Full text of Review (Federal Reserve Bank of Dallas) : December 1, 1948

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MONTHLY
'B USINESS
REVIEW
of

the

Volume 33

FEDERAL

RESERVE

BANK

of

Dallas

Dallas, Texas, December 1, 1948

Number 12

CROP YIELDS-A MEASURE OF FARMING EFFICIENCY

w. M. PRITCHETT
Agricultural Economist, Federal Reserve Bank of Dallas

The almost insatiate demand for agricultural products that persisted throughout the war years
and, in fact, through the postwar period until very recent months has caused the government agricultural authorities and farmers to attempt to expand production to a virtual maximum. More intensive utilization of land resources has been an order of the times during most of the period, improved
agricultural practices have been encouraged, and more extensive cultivation has been practiced as
additional acreage has been drawn into agricultural production of one kind or another.
Although the record of agriculture during those years is deserving of high commendation, we
cannot afford to be complacent regarding those problems that are generally recognized as being basic
to the sound development and stable future of the agricultural part of our economy. One of these
problems that deserves consideration, especially in the Southwest, is that of crop yields per acre of
land cultivated. Crop yields are, in fact, a measure of the efficiency of agriculture and become of
vital importance not only to the farmer but to the Nation as a whole as the postinflation period of
readjustment appears to be moving closer. Probably a considerable degree of productive inefficiency
might be tolerated in agriculture-as in industry or in other lines of economic activity-during periods
of high demand characterized by inflationary developments, but that is obviously not true as abnormal
demand begins to lessen and competitive uses for purchasing power begin to increase.
Since 1940, the huge demand for agricultural products both at home and abroad has enabled
farmers to sell their production at prices much in excess of prewar levels; since costs have not risen
commensurately with prices, profits have been large. But now the specter of surpluses in several most
important farm products and weakness in farm commodity prices again are appearing to haunt farmers
and agricultural authorities. Farm prices in October averaged 10 percent below the January 1948
peak. Prices of such basic commodities as cotton and grains are at or near support levels, while prices
of some of the nonsupported commodities such as citrus, mohair, and pecans have declined substantially. There is a strong feeling in most quarters that farm commodity prices have passed their postwar
peak and that now there will be mounting pressure on the top side of the market. Because of a probable
slackening foreign demand, growing sluggishness on the part of domestic buyers, and the large domestic
production, larger carry-overs of wheat, cotton, corn, and other crops are in prospect for next year.
On the other hand, costs of farm operation this year are about 8 percent above 1947 and more
than double the prewar (19H-39) average. Farm wage rates, which are expected to average about
266 percent above prewar in 1948, are likely to remain relatively high, especially if nonagricultural
wage rates retain much of their postwar gains-a probability in the opinion of many observers. Farm
real-estate taxes in 1947 averaged about 15 percent higher than similar levies made in 1946 and about
40 percent above the prewar average. In addition, a host of other levies, including the federal income
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MONTHLY BUSINESS REVIEW

tax, are taking a sizable share from the farmer's income. As in similar periods in the past, tax rate
declines probably will lag far behind reductions in farm commodity prices. Costs of farm machinery
are more than 60 percent above the prewar level and, in view of the large unsatisfied demand and
relatively high production costs, are not expected to decline significantly in the near or foreseeable "
future. Costs of building materials, fertilizers, insurance, rents, and supplies also are expected to
remain high in relation to probable farm commodity prices. The principal exception to the upward
movement of farm costs is in the prices of feeds, which have been declining since April and may
decline even further during the months immediately ahead. On the whole, therefore, farm costs during
1949 are likely to average close to the level of 1948 and, although they may decline in succeeding
years, their downward trend probably will be at a slower rate than that of farm commodity prices.
Of course, the government price support program will playa part in shaping farm receipts, but
there appears to be developing in many quarters and, in fact, among some farm leaders the view that
support prices are uneconomic ally high. Present legislation extends the current levels of support only
to 1950, and in view of the possibility that the program will be reviewed by the new Congress, there
is no certainty that the percent of parity at which prices will be supported may not be lowered.
Moreover, whether or not farm prices are supported at a lower percent of parity, the parity price
itself may decline in 1949 and in succeeding years. The index of prices paid by farmers, which is the
index series used in compiling the parity prices of individual crops, is based to the extent of about
45 percent on the prices of foods, clothing, feeds, and seed, which are things that are produced or
originate on the farm. Declines in prices of any of these commodities tend to reduce the levels at which
farm commodity prices are supported. The index reached a record high of 251 in August, but declined
one point in each of the following two months. The United States Department of Agriculture predicts
that declines in certain prices which have occurred this year and others which are expected during the
months ahead may bring about a reduction of as much as 10 percent in parity prices and in support
prices next year, unless such declines are offset by increases in prices of industrial products included
in the index.
But entirely aside from the question of government support prices, farmers may secure large
benefits by reducing their costs and improving their efficiency of production. In fact, this course may
be necessary if farmers are to maintain a
satisfactory margin between costs and
TABLt;; I
gross income. As farmers produce more
efficiently, the prices they receive will CHANGES IN PER ACRE YIELDS OF SELECTED CROPS IN THE
UNITED STATES AND IN TEXAS BETWEEN PERIODS
bear a more favorable relationship to costs
1910-14 AND 1943-47
and will provide incomes and services
_ _ _ _ T..... _ _ _ _ __ Unio.cd 8tal..,- -more nearly on a parity with those of
Percent.
Percent
Units
1910-14.
1943-47
change
1910·14
1943-17
change
nonfarm workers. At the same time
21.6
24.1
..... . Bushels 22.2
17 . 6
-21
12
greater stability will be given to the agri- Barley
Corn ..... . .. Bushels 18 .8
15 .9
- 15
26.0
32.6
25
cultural economy and to our economy as Cotton ...... Pounds 174 .0 167 .0
- 4 200 .3 261.4
31
1.15
Hay . . . .... . Tons
1 . 18
0.91 - 23
1.36
18
a whole. Furthermore, as farm commodi- Oats
29.3
32.2
. ....... Bushels 28 . 2
21. 7
-23
10
ties are produced at lower costs, consum- Peanuts ..... Pounds 720 . 0 429 .0
-40
700 .0 653 .0
-18
48 .6· 45.9
Rice . . ...... Bushels 51. 1· 45.0
- 12
-6
ers will be able to buy more of the prod- Sorghums
16 .7
.... Bushels 18.4t 16.9
- 8
15 .6t
7
14
.3
13.2
4
17 .3
21
ucts of farms and buy them at relatively Wheat.. . .... Bushels 12.7
·1933-37.
tI922-26.
lower prices, which will contribute toSOURCE: United States Department of Agriculture.
ward a higher standard of living in this
country.
But just how efficient is American agriculture and what progress is being made in increasing
its efficiency? Since 1910 there has been an upward trend in efficiency of both agriculture and industry as measured in terms of production per worker, but the increase over the period from 1910 to 1940
was somewhat greater for industry than for agriculture. During World War II the rise was slightly
greater in agriculture, and the output per worker on farms in the United States in 1946 reached a
peak of 65 percent above the 1935-39 average. These accomplishments have been made by use of
more lime and fertilizer and more machinery, by changes in land use, conservation, rotation of crops,
by changes and improvements in crops and varieties grown, and by many other miscellaneous means.
One of the best concrete indications of changing efficiency is the trend in production of crops
per acre. Progress in this respect in the United States is illustrated by comparison of crop yields during

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MONTHLY BUSINESS REVIEW

the periods 1910-14 and 1943-47. Wheat yields per acre have risen from 14.3 bushels to 17.3 bushels,
or 21 percent; corn yields per acre rose from an average of 26.0 bushels to 32.6 bushels, or 25 percent;
while cotton yields rose from 200 pounds to 261 pounds per acre, or 31 percent. These and other
data shown in Table I indicate that the Nation's farmers, as a group, are moving forward in increasing
their efficiency by enlarging the production of commodities on the acreage of land cultivated. Much
of this increase has taken place within comparatively recent years, however, as evidenced by the fact
that wheat yields, which had fallen considerably,
TABLE II
increased 48 percent between 1935-39 and 194347, and the production per acre of all crops in- RELATION OF CROP YIELDS PER ACRE IN TEXAS
TO UNITED STATES AVERAGE YIELDS
creased about 22 percent between these two periods.
1910-14

~D

1943·47

Tc:xn.9 yields 88 percent of
In Texas, however, yields of most crops have
_ - United Sw.tcs Bvemgcs-Cropo
19H1-14
19'3-47
failed to make increases parallelling those of other
Barley . .. . .... . . . ...... • . . . . . . ...
103
73
important producing states and, in fact, yields of Corn ..... . ............. . ..... . . .
72
49
87
64
Cotton ....... . .. .. ...... .... .. . . .
many crops are declining. Corn yields in the State H
103
67
ay ...... .. .. . ...... • .. . • . . .. . ..
averaged 15.9 bushels per acre in 1943-47, com- Oats . . . . . .. .. ..... .... .. . . . • . . ...
96
67
Peanuts .... . ...... ..... .. ..... .. .
90
66
pared with an average of 18.8 bushels in 1910-14. Rice
... . ..... . ..... . ......... . . . .
IDS"
98
They are now about one-half the national average, Sorghums . . . .... .......... . . . ... .
l1St
101
89
76
compared with three-fourths the average in the Wheat .. . . ... ...... ... . . .. . .. ... .
*1933-37.
tI922-26.
earlier period. Average hay yields for the same
SOURCE: United States D epartment of Agriculture.
periods have declined from 1.18 tons to 0.91 tons
per acre and from 103 percent to about 67 percent
of the average of all states. Oat yields have declined from 28.2 bushels to 21.7 bushels per acre, or
from 9 6 percent to about 67 percent of the national average. Peanut yields, which have declined from
720 pounds to 429 pounds per acre, have declined from 90 percent to 66 percent of the national
average. Cotton yields, although lower than during the pre-World War I period, are substantially
above levels that prevailed during the Twenties, but are only 64 percent of the national average,
compared with 87 percent in 1910-14. Wheat yields, which have risen slightly since 1910-14, have
declined from 89 percent to 76 percent of the national average. Yields of most other major crops
in the State are low in relation to the combined average of all states, as indicated in Table II, and
many of them are lower than they were in 1910-14.

It should be pointed out, however, that there is considerable variation in yields per acre of the
same crops between different sections of the State. Yields of cotton, wheat, corn, and other crops
vary notably in different crop reporting areas. For instance, in 1947, average yields of cotton per
acre varied from a high of 296 pounds in the Lower Rio Grande Valley and southwest Texas area
to a low of 148 pounds in north Texas. Tests made with corn at various experiment stations in the
State (see Table III) show yield averages in some sections which compare favorably with the national
average, while averages in other parts of the State are very low. Likewise, in 1947, grain sorghums
grown in the south Texas area returned an average yield of 30 bushels per acre, in contrast with a
yield of 18 bushels per acre in the heavy producing Panhandle area. The course of crop yields in Texas,
which to some extent reflects farming efficiency-or inefficiency-in the State, raises the rather
obvious questions of " Why are yields relatively low or declining?" and "What can be done to increase
them?"
There are a number of factors that underlie the decline in crop yields in Texas and which help
to answer the first of these questions. One important factor that applies to most crops has been the
decline in soil fertility, due to the continuous cropping to soil-depleting crops and to failure on the
part of farmers to carry out soil conservation and soil-building practices. Despite the demonstrated
advantages of crop rotations, many Texas farmers have been reluctant to rotate green manure crops
with cash crops for soil improvement, with the result that continuous cropping of land to cotton,
grain, or other crops year after year is still practiced on a large scale. The practice of applying commercial fertilizers and lime to the soil for yield improvement is growing in importance in the State,
but still falls far short of recommendations made by agronomists. Then, too, soil fertility has been
reduced immeasurably by loss of topsoil due to improper surface drainage. Failure of farmers to
establish necessary ditches, terraces, and waterways; to plant crops on contours; to plant cover crops;
and to carry out other recommended practices has resulted in the loss of untold millions of tons of

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MONTHLY BUSINESS REVIEW

priceless topsoil and organic matter. Progress has been made in initiating a program of soil conservation
and improvement in the State, but the trend toward loss of the fertility of the soil has not been
reversed and, consequently, continues to pose a basically important problem.
Some of the decline in yields in recent years has been due to a lack of sufficient labor to cultivate
crops properly, to control grass and weeds, and to eliminate insects. Also, there has been a shortage
of machinery needed for proper and timely planting, cultivation, and harvesting of crops.
Besides these factors of management, there is the factor of acreage expansion which has contributed to declines in yield averages of some crops in the State. As production of a crop is increased,
less productive land often is brought under cultivation and less experienced producers enter the field.
Cotton acreage in Texas, for example, rose from f,OOO,OOO acres to 16,000,000 acres between 18919f and 1922-26, and yields declined from about 220 pounds to 12f pounds per acre. As the acreage
was contracted to an average of 7,000,000 acres in 1943-47 and some of the less productive lands
were withdrawn from cultivation, yields rose to an average of about 170 pounds per acre. Of course,
acreages of crops are expanded or contracted in response to various combinations of factors, and the
resulting effect upon yields will depend upon what combination of factors brought about the change.
For instance, an increase in yield averages may result from an increase in acreage if, because of relatively more favorable prices for the particular commodity, a shift is made to more fertile lands. The
yield average might increase, also, if appropriate measures were taken to conserve and improve the
lands added to production of the crop.
One should not necessarily expect, however, to raise Texas average yields of all crops to the
national average or to levels attained by some of the highest producing states. The chief limiting
factor, of course, is climate. For good production of most crops it is usually desirable to have 20 or
more inches of rainfall properly distributed throughout the year; the part of Texas west of the 100th
meridian often receives too little rain, while in the remainder of the State rain may not be distributed
properly, especially during the growing season. The temperature also is subject to rather extreme
variations, with all parts of the State being subject to occasional periods of excessive heat or freezing
temperatures at times when they will affect crop yields adversely.
The limiting effect of climate on yields is reflected not only in the yields of crops produced but
in other ways. Higher yielding crops generally are affected more than others by changes in climatic
conditions, and many farmers prefer to plant lower yielding crops and be more certain of some
production each year than to plant higher yielding crops and run greater risks of crop failure in
years of limited rainfall or extreme temperatures. Farm management studies have shown, for example,
that in seasonable crop years wheat farmers in part of the Plains area could make good yields and
more money growing oats, but if they substituted oats for wheat they would risk complete loss due
to hard freezes late in the season which are likely to occur in some years. Also, in this connection it
should be pointed out that farmers often must plant the crops that can be planted at the time adequate
soil moisture is available and not the crops that would produce higher yields. But despite these limiting
factors, there undoubtedly exist many opportunities for increasing crop yields in Texas and, in that
way, raising the efficiency of farming in the State.
Although a discussion of ways of increasing crop yields in Texas involves all phases of crop
production, most of the approaches to the problem may be classified under six headings: (1) Land
use, conservation, and improvement; (2) Use of fertilizers, lime, and manure; (3) Selection of
adapted crops and varieties; (4) Use of farm machinery; (5) Use of recommended cultural practices;
and (6) Control of weeds, insects, and diseases.
Land Use, Conservation, and Improvement

Yields depend to a large extent upon land being put to its most efficient use or being used for
purposes for which it is best suited. Some land, however, is used for crops which are not adapted to it,
such as land used for cultivated row crops which should be used for hay crops or pasture. There have
been extensive shifts in land use in recent years, but many of these shifts have been toward placing
more land of lower productivity to crop use or cropping new land which should remain in grass.
The large production of agricultural products in man y states during the last decade has been achieved
partly by expanding crop production to include less productive land, but some people hold that the

MONTHLY BUSINESS REVIEW

193

present distribution of land between crops, pasture, and other uses is out of balance, that there is a
need for a shift back to fewer acres of crops and more acres of grassland. Certainly if this were done,
much of the less productive land now in use for crops would be returned to grass. If such a balance
were achieved, it would have the effect of raising crop yields in the State and, at the same time, the
grassland could be used for production of livestock, for which there is a strong demand.
The need for shifts in land use applies not only to regions of the State but to particular farms,
for many farmers put land to uses to which it is not adapted. The balancing of cultivated crops with
grasses and hay will tend to take place, however, as farmers realize the importance of hay and pasture
in a system of soil maintenance on their farms. In the more humid areas of southeast Texas, for
example, crop rotations that contain a combination of row-planted, close-growing, and sod crops
are more likely to maintain fertility and to sustain high crop yields over a series of years than is
single cropping. Crop rotations including legumes improve the soil productivity, delay or reduce the
damaging effects of root rot, reduce soil erosion, aid in weed control, and distribute farm labor and
incomes more uniformly.

__......,~ ,--r:=,"

wm:m:m

NO TREATMENT

~

LEGUMES ONLY

_

*
•

RESULTS FROM COTTON DEMONSTRATIONS IN 1947
LEGUMES ONLY AND FERTILIZED LEGUMES

FERTILIZED LEGUMES
DEMONSTRATIONS ON IRRIGATED LAND ONLY
DEMONSTRATIONS ON BOTH IRRIGATED AND DRY LAND

COMPILED FROM REPORTS FROM 79 COUNTIES ; EXTENSON SERVICE A 6 M COLLEGE
OF TEXAS, COOPERATING WITH U. S DEPARTMENT OF AGRICULTURE
FIGURES REPRESENT AVERAGE YIELD IN POUNDS OF LINT COTTON PER ACRE

Figure I

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MONTHLY BUSINESS REVIEW

Tests over a long period of years at the Denton Agricultural Experiment Station have shown,
for example, that maintaining or increasing the fertility of the black upland soils is largely a problem
of increasing the organic matter by turning under all possible organic materiaL Furthermore, the
growing of sod crops, such as the clovers, aids in the binding together of the soil particles and, also,
permits rapid movement of air and water within the soil. The necessary organic matter is best produced
and utilized in a cropping system which includes leguminous winter or summer green manure crops
or which includes a legume grown a year or more for grazing, hay, or seed, depending upon the
adaptability of the legume. Crop rotations usually should be set up so that no crop will succeed itself
on the same land. Deep-rooted crops should follow shallow-rooted crops. In most sections of the
State, each rotation should include a soil-building crop at least once in three or four years.
Some of the benefits to be derived from use of legumes preceding cotton are illustrated in Figure I
showing results from cotton demonstrations last year with legumes only and with fertilized legumes.
Cotton yields per acre were increased up to 100 percent with legumes only and up to 200 percent
with fertilized legumes.
The most favored winter legumes for Texas include hairy vetch, Austrian winter peas, common
and Williamette vetch, Hubam clover, annual yellow blossom sweet clover, bur clover, Madrid sweet
clover, blue lupines, alfalfa, and small grains. In the northern sections of the State, small grains from
fall seeding produce more winter pasture and make more green forage to turn under by May 1
than any other legume. They lack the nitrogen-fixing ability of other legumes but are satisfactory
for green manure purposes. Recommended summer legumes include cowpeas, soybeans, velvet beans,
and crotalaria.
One of the most important parts of a program of soil conservation is the control of surface
drainage. As mentioned earlier, yields of many crops in Texas are low because much of the valuable
topsoil has been lost by erosion. While there is much that can be done through rotation of crops and
fallowing legumes to build up the organic content and, in general, the productivity of the soil, it is
necessary that steps be taken to control drainage, both to retain the improved topsoil and to conserve
rain water. Surface drainage can be controlled by such measures as construction of terraces and
diversion ditches, by strip cropping and contour tillage, by rotations, and by proper utilization of
crop residues. In Texas, where soils are badly eroded and where a shortage of moisture is a recurring
problem, a surface drainage control program has much to its credit.
Some lands in Texas, particularly in the Coastal areas and Blacklands, can be made more productive by proper drainage. The principal objections to poor drainage are that land saturated with stagnant
water is not in condition for planting crops until late in the spring, killing frosts come early in the
fall, and damage due to freezing and thawing is more severe than on well-drained soil. In the Coastal
areas, good drainage usually can be developed by proper ditching. Internal drainage problems such
as exist in sections of the Blacklands often are caused by improper use of the land. Continuous cropping to cotton, corn, or other row crops reduces the organic content until the topsoil becomes compact and water does not penetrate as it should. The drainage of such lands can be improved by plowing
under crops or crop residues in sufficient quantities to restore the organic content of the soiL As this
is done, the soil regains much of its original form, and water again can penetrate to the subsoiL One
of the primary purposes of crop rotations and green manure crops is to maintain soil permeability
and, thus, to reduce drainage problems. Some of the soils in the Blacklands, however, are underlain
with a so-called "tight" subsoil through which water penetrates very slowly. This condition can be
improved in many cases by ditching or by the laying of underground tile systems.
Not only is water erosion a problem in many parts of Texas, but much topsoil is lost due to wind
erosion. Recommended practices for control of wind erosion include strip cropping, use of winter
cover crops, maintaining organic content of the soil at a high level, and leaving crop residues on the
surface of the soil.
Use of Fertilizers, Lime, and Manure
Use of commercial fertilizer and lime in the United States was greatly accelerated in the immediate prewar and war years and has continued to increase. A considerable part of the larger farm
production during recent years can be attributed to the greater use of these materials. More farmers

MONTHLY BUSINESS REVIEW

195

have come to realize that increased yields can be obtained from the use of fertilizers; this is evidenced
by the fact that fertilizer sales in Texas increased from 85,000 tons in 1936-37 to 451,000 tons in
1947-48.
Studies by the Texas Agricultural Experiment Station show that most of the soils of Texas,
except those of the Blacklands, the Edwards Plateau, and scattered smaller areas, are very deficient in
nitrogen. Practically the whole State is deficient in active phosphorus, and land in east, eastcentral,
and northcentral Texas is low in potash. The eastern half of the State, with the exception of the
Blacklands and counties bordering on the Gulf, is deficient in lime. Careful analyses of Texas soils
show t hat there are deficiencies in some of the plant food elements which are generally considered
to be of minor importance but which may have a definite bearing on the yields of crops per acre.
East Texas farmers, for example, have recently been told by soil scientists that many of the soils of
that part of the State are deficient in boron, which is necessary to successful production of many
vegetable and forage crops. There are possibly many instances of deficiencies in soil content of other
of the minor or so-called "trace" elements, such as manganese, copper, and zinc.
In undertaking extensive applications of fertilizers, farmers will find it worth-while to have their
soils analyzed to determine which fertilizers will prove most beneficial. If soils already have a high
nitrogen content, it may be unprofitable to apply fertilizers containing large quantities of nitrogen.
In such cases, the benefits from potash or phosphate in the fertilizer may be offset by the unfavorable
effects of an over-supply of nitrogen. One reason why some farmers have concluded that the use of
fertilizers is unprofitable is that they have used the wrong kind of fertilizers or did not apply them
at the most appropriate time. Many of these errors can be corrected by taking advantage of the services
of soil analysis offered by the Texas Agricultural Experiment Station at College Station.
One factor that has contributed to the reluctance of many farmers to use fertilizers or to use
them more extensively has been the uncertainty of weather conditions during the season ahead. It is
known that if large quantities of fertilizer are used under a crop in a year of drought, the fertilizer
may reduce yields rather than increase them, but farmers can reduce tlus risk-if not eliminate itby applying the fertilizer to a legume to be fallowed before the particular crop is planted. In this
way, the benefits of the fertilizer are still available to the crop and the possibility that the crop will
suffer damage from the fertilizer during drought is reduced to a nunimum.
The possibilities that exist for increasing crop yields by use of fertilizers in combination with
legumes are illustrated in Figure I, which shows the results of tests with cotton on a selected group
of farms in areas throughout the State in 1947. In the High Plains, for example, cotton following
a legume produced 600 pounds of lint per acre, compared with 300 pounds per acre without the
benefit of a legume. Where legumes and fertilizer both were used, yields averaged 900 pounds per
acre, or three times the untreated cotton. It is known that fertilized legumes also will raise the grade
of cotton staple and increase the oil content of cottonseed.
Fertilizer not only may increase production of a crop but also may make the difference between
a good crop and no crop at all. Fertilized oats in north Texas, for example, are much more winterhardy than are those grown without fertilizer. Much of the Texas oat crop was killed last winter by
the severe freeze in March, but fields of oats that had been fertilized with 20 percent superphosphate
withstood the cold and produced high yields.
In areas of lime deficiency it is necessary to make annual applications of lime in order to obtain
full value from commercial fertilizer, especially phosphates; lime and phosphate applications are
required for successful stands of the legumes and grasses necessary in a good crop rotation program
and for soil maintenance. The United States Department of Agriculture has recommended that lime
consumption in the country as a whole be increased to more than seven times the 1935-39 average
in order to bring about desirable and economic adjustments in land use. Lime consumption rose
rapidly during the war and perhaps half of recommended annual use of lime has been achieved.
Attent ion is called again to the fact that soils in some areas of Texas have an abundance of lime, but
the areas of greatest need are in east Texas, parts of south Texas, and the western part of the South
High Plains. In these areas, lime would increase appreciably the yields of crops by adding to the supply
of available nutrients and by helping to get full use of fertilizers.

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MONTHLY BUSINESS REVIEW

The yields of crops in Texas could be increased very markedly if farmers were more efficient in
the use of manure. Because of enormous losses of manure due to improper handling, only a small
portion of the potential crop-producing and soil-conserving values of manure is actually realized .
Even after it is spread on the land, serious losses from evaporation of ammonia are probable if fermented manure dries before it is effectively incorporated into the soil or at least before the soluble
constituents have been leached out and absorbed by the soil. Other factors in the inefficient use of
manure are that it is not always applied at the season, in the manner, at the rate, or to the crop which
would give the greatest return. The economic possibility of preventing much of this loss has been
conclusively demonstrated, both experimentally and practically. The wasteful and inefficient methods
of handling manure are evidence that many farmers still do not understand the true nature of manure, the perishable character of its most valuable constituents, and the direct money loss incurred
through its improper treatment. A study of the facts regarding the production, losses, care, and
field management of manure should help any farmer better to understand the problem and to work
out a solution practical for the conditions of his own farm. Of course, the greatest benefits of manure
to crop yields are to be realized only from its intelligent use in combination with other practices that
constitute good soil management.
In common with most other improved practices, greater use of fertilizers, lime, and manure,
especially on cash crops, would increase the volume of farm products that goes to market, which in
turn would tend to reduce the prices of those products; but the farmers who use these materials
would have lower costs per unit of product and an increased volume to offset the lower prices. Also,
it is to be remembered that insofar as the increased use of these materials promotes soil-building
rotations, the emphasis is shifted away from the staple cash crops that are likely to be overproduced.
Such shifts, therefore, might actually aid in avoiding market gluts of some products. Moreover,
part of the increase in lime and fertilizer constitutes a capital investment in permanent soil improvement that is in the interest of future welfare, both for individual farmers and for the Nation as a
whole.
Selection of Adapted Crops and Varieties
Farmers are able to increase production of crops by using new plants that are better adapted to
the soils and climate of their respective areas; however, actual cultivation usually lags far behind the
discovery of new plants. Farmers who are alert to the introduction of new crops are able to increase
the productivity of their farms and to increase their net return, while farmers who produce low
yields and have low incomes usually are among those who are last to make recommended changes.
This applies not only to the adoption of new crops but to the planting of new varieties of a crop
already in cultivation. Of course, changes in relationships of prices of various farm commodities
tend to increase or decrease the relative advantages of producing different crops, for it is the farmer's
net return, not the absolute physical quantity of commodities produced, that is the factor determining
what crops are, or should be, grown.
TABLE III
SUMMARY OF CORN YIELDS AT NINE TEXAS AGRICULTURAL EXPERIMENT STATIONS FOR
THREE-YEAR PERIOD, 1943-45
Temple

Hybrid or variety

DeDton

College
Station

Hybrids:
51. 1
30 .6
T exas Hybrid No.8 ... .... , ........ ..... .... . 38 .6
25. 0
53. 9
T exas H ybrid No. 9-W . .. .. . . . . . . .. . ... . . . . . . .. 39 .4
29 . 9
61.4
Texas H ybrid No. 12 . . ... .. · . . . . . . . . . . . . . . . . . 36 .3
27 .6
53.6
Texas H ybrid No. 18 .. '" .
. .. . . ..... ..... 38. 2
Texas Hybrid No. 22 ........ . . . ............. ..
Funk G711 .......... ......... . . . . . . . . . . . . . . . 42. 3
26. 7
56. 3
53. 2
25.5
National 134 TOo .. . . . ..... . ... . .. . . . . ........ . 42 .0
Varieties:
18 .4
40. 3
Fer~uson Yellow D ent . . ... · . . . . . . . . . . . . . . . . . . 29 .0
Gol ' en June ..... ...... . .. ....... . - ... . .... ...
Mexican June . . . . . . . . ..... ... " . , . , ...... .... .
17 . 1
34 .9
R eese Drout h Resistant .... · . . . . . . . . . . . . . . . . . . 29 .8
29.8
19 .8
SurcroPSer . ..... ....... . . ... .... ... - .. .. _. _.
20. 8
32 .8
Yellow urcropper . . ... . ... ................... 30 .3
Yellow Tuxpan ......
SOURCE : Progress Report 103, T exas Agricultural Experiment Station.

.
.

Vicki of shelled com per acre, bu8bels

Stephen-

Beeville

T yler

Angleton

Cbillioothe

ville

26. 2
23.6
23 . 2
26. 2

46. 7
49 . 6
54.8
50 . 3

31. 3
35 .5
29. 7
31. 2

28. 2
25 .4
30 . 1

25 . 1

26. 1
26 .6

49.1
49. 9

27 .8

28.4

21. 3

15. 9
20. 0
22.1
17 .6
20 .6
19. 2

37 . 3

18 .8
25. 1
32 . 7
22 . 9
28.8
23. 2
26 .4

18 .9
22 . 1
19 . 3
17.0
16 .8
21. 5

16 . 1
19 .3

37 . 3
32 .4

19 .5

W..1aeo
76 . 3
70 . 1
78 .0

18 .8
22 .7

67.8

MONTHLY BUSINESS REVIEW

197

Since World War I, Texans have witnessed the introduction in the State of new farm crops, such
as grapefruit, oranges, flax, and various forage crops. Other crops which have become more important
since World War I include peanuts, grain sorghums, rice, barley, oats, and many commercial vegetables. In addition, crops such as sesame, broomcorn, sweet potatoes, dry beans, rye, and ramie may
become of major importance as time goes on. From the standpoint of selection of adapted crops and
varieties, however, the greatest advantage will accrue to farmers in the relatively short run from
selec tion of adapted varieties.
Some of the possibilities that exist for increasing yields of crops produced on Texas farms may
be illustrated by results of variety tests conducted by the agricultural experiment stations in the State.
For example, in tests with corn varieties, including hybrids adapted to the State, yields at Beeville
during 1943-45 varied from 15.9 bushels to 26.6 bushels per acre, as shown in Table III. At College
Station, yields varied from 32.8 bushels to 61.4 bushels per acre for the varieties and hybrids tested .
In tests at Denton, yields varied from 17.1 bushels to 30.6 bushels per acre. In each case, the highest
yields were obtained from hybrids.
Plant breeders in Texas have been active in developing improved varieties of crops for Texas
farms. They have tested for adaptation to Texas regional climatic and soil characteristics or have
developed new varieties of most of the important crops grown in the State.
Use of Farm Machinery
The use of mechanical power and associated equipment on the farm results in an increased
output per worker by enabling him to do the job faster, by doing a better job of tillage or other
operation, and by enabling him to do the work (or at least more of it) at the proper time. The
effects of the greater timeliness in farm operation that is possible by mechanization are difficult to
measure, but as power equipment can cover more acres per hour and also can be used longer hours
if necessary, it enables the farmer to do critical jobs without the delay that frequently occurs where
horse or mule-drawn equipment is used.
Perhaps one of the best illustrations of the contribution of mechanical power to timeliness of
operations in Texas is the experience of farmers in the Winter \Vheat Belt. In years when there is a
serious shortage of moisture at seeding time, a light shower which would be sufficient for seeding is
effective for only a short time before the moisture is dissipated. With mechanical equipment for
large-scale seeding operations, a farmer may seed his entire crop within the short time that sufficient
moisture is available. Likewise, the quick coverage possible in spring potatoes with a multiple-row
power sprayer may salvage a crop that otherwise would be seriously damaged. The farmer is able
also to harvest the crop at the proper time, thereby avoiding losses which might result from delay.
Corn producers find that with a tractor and power equipment they can prepare and plant three acres
of corn during the same time required to plant one acre with work animals. In terms of a 24-hour
schedule, which is not possible with work animals, the preparation and planting job can be done
seven times as fast as with animal power. With machinery, farming operations are less subject to
the irregularities of climate; this is a major contribution of mechanization to crop production.
The introduction of the general-purpose tractor adapted for use on smaller farms and for a
wide variety of farm jobs, introduction of rubber tires for tractors and other machines, and improvements in designs of tractor equipment have accelerated the shift to tractor power and stimulated the
adoption of combines, corn pickers, and other tractor-drawn machines which reduce costs of farm
operation. Furthermore, improvements in construction of both tractors and associated equipment
have enabled farmers who are relatively unskilled at mechanical work to operate power equipment
without serious disadvantage. Substitution of tractors for horses and mules in Texas has moved ahead
of the Nation since 1920, as indicated by percent increase, and the number of tractors on farms in
the State increased about 40 percent between 1940 and 1945, compared with about 30 percent increase
for the United States. Large numbers of tractors are being added to Texas farms each year, and this
will be an important factor in increasing the yields of crops in the State.

198

MONTHLY BUSINESS REVIEW

Use of Recommended Cultural Practices
Cultural practices include fallowing, disking, rolling, and harrowing of land, preparation of
seedbeds, and planting and cultivating the crop. In considering the effects of these practices on yields,
it is important to consider also the dates at which they are done. Changes in cultural practices usually
are made rather slowly. Studies of the effects of different cultural methods on yields, however, indicate
that yields may vary considerably due to differences in methods of cultivation, which suggests that
many farmers could increase their crop yields if more attention were given to this subject.
The importance of cultural practices to yields has been demonstrated by the results of tests
conducted by the agricultural experiment stations throughout the country. In a test at the Georgia
Agricultural Experiment Station a few years ago, corn yields varied as much as 11.9 bushels per acre
merely as a result of differences in seedbed preparation. In a test in Mississippi, yields varied from 7.9
bushels to 31.8 bushels per acre due to date of planting. In a similar test in Louisiana, corn yields
varied from 10.0 bushels to 50.9 bushels per acre.
Results of experiments in various states to determine the effect of the number of cultivations,
variations in depth of cultivation, ridge versus level culture, time of cultivations with respect to age
or growth of crop, spacings in' the rows, width of rows, and many other similar matters show that they
have an important effect on yields. Farmers, therefore, should give careful attention to each cultur:,ll
practice or combination of cultural practices used and their effectiveness in producing good yields.
They can do this by studying the results of experiments with crops in their localities and on their
types of soil. Also, they can analyze the variations in their own yields which can be attributed to
differences in cultural methods. The best choice of methods to be followed in cultivation of crops
varies, of course, from crop to crop, from region to region, and from year to year. Furthermore,
as climatic conditions are variable, there are advantages to be gained by varying the methods of
cultivation. It is significant that adoption of the most preferred methods of cultivation usually can
be made without any increase in costs of operation.
Control of Weeds, Insects, and Diseases
With many crops the yields per acre are seriously reduced by the heavy growth of weeds.
This is especially true of crops that are not cultivated after seeding, such as rice and flax. Weeds in
rice crops have been eliminated successfully by applications of 2,4-D. Yields of flax and small grain
crops also can be increased by application of chemical weed killers. Of course, weeds can be eliminated
to some extent through cultural practices, such as clean tillage and proper crop rotations.
Estimates of cotton losses from insects in the State during recent years have run as high as
one bale in seven or eight produced or that would have been produced if damage from insects had
been prevented. Other crops experience heavy losses from insects, although the losses may not be as
high proportionately as with cotton. Savings that can be made by control of insects may make the
difference between profit and loss for many farmers and, consequently, the importance of insect
control to production of high yields per acre can scarcely be overestimated.
As new insecticides are introduced frequently, farmers should attempt to keep up with the
insecticides most suitable for use on their crops. Operators of large farms frequently employ entomologists to supervise insect control work, but this is a service that operators of small farms cannot
afford. Because of their lack of complete understanding of the proper use of insecticides, operators
of small farms are usually less successful in controlling insects and their crop yields are reduced. As
more is learned by farmers about insect pests and methods of control, and as this knowledge is put
into practice, a long step will have been taken toward increasing crop yields.
There are many insecticides available for controlling insects. Probably the most widely known
at present is DDT. A new insecticide which is closely related t o DDT and called DDD, or Rhothane,
is equally as effective and has the added advantage of being harmless to warm-blooded animals. There

MONTHLY BUSINESS REVIEW

199

are on the market today various insecticides that will kill most of the harmful insects of importance.
The chief difficulty so far in control of insects with chemicals has been attributed to improper or
untimely application.
A program for control of insects may not be complete without what is generally referred to
as a fall cleanup campaign. Cotton insects, for example, hibernate during the winter in stalks and
other residue left on the land following harvest. More of the weevils and bollworms will freeze out
during the winter if cotton stalks are plowed under during the fall. As evidence of this fact, it
may be noted that Williamson County last year had a county-wide stalk cleanup program completed
September 30; this year on July 30, 27 per cent of the squares had been punctured. In contrast, in
the adjoining county of Milam, where there was no county-wide stalk destruction campaign last
season, 63 percent of the squares were punctured on the same date.
Many of the diseases of crops which may be traced to infected seed may be eliminated by seed
treatment. N ew Improved Ceresan, for example, is a preparation widely used in treating grain seed.
One may secure seed treatments for most crops produced in the State, and these undoubtedly will
add substantially to yields of crops.
There are other diseases, such as root rot in cotton, that are related to soil conditions. Usually
the only method of control is to improve the soil by proper land use practices. Cotton root rot may
be eliminated by crop rotations including a legume, such as Austrian winter peas, hairy vetch, or
Hubam clover. Soils seriously infected with cotton root rot usually can be cleared sufficiently to
produce cotton safely after two or three crops of legumes. A rotation of a legume about every third
or fourth year thereafter may be necessary to keep the root rot under control. This disease is typical
of others that destroy various crops or which reduce crop yields in the State.
Summary

A study of crop yields in Texas reveals trends that are disquieting to those who are concerned
about the future prosperity of agriculture in the State. In the case of some crops, yields have declined
in contrast with increasing yields for the United States, while yields of other crops either have declined
more than the national averages or have increased at a slower rate. The unfavorable trends in the State
apparently have resulted largely from the unnecessary losses of fertility through soil erosion and
continuous cropping to soil-depleting crops and from the slowness of farmers generally in adopting
improved farm management practices.
Fortunately, the facts developed as a result of extensive research and experiments indicate that
soil fertility can be restored and crop yields increased significantly. In fact, many farmers in various
sections of the State have demonstrated on their respective farms that improved yields are possible
year after year. These results have been accomplished by the adoption of such measures as adequate
soil conservation practices, crop rotation, planting of leguminous cover crops, the use of fertilizer
where feasible and desirable, more extensive mechanization, the introduction of new crop and seed
varieties better adapted to the soils and climate, the use of better cultural methods, and the application
of chemical compounds to control weeds, insects, and plant diseases. Significant improvements in
yields are possible on other farms throughout the State where some or all of these measures are adopted
and followed consistently.
In view of the opportunities for developing greatly increased efficiency in farming operations,
these measures deserve careful consideration not only by individual farmers but also by all those whose
operations are related directly or indirectly to the m aintenance of a sound and prosperous agriculture.
Much can be accomplished in communities where the interested groups, through concerted action,
strive t o achieve maximum results. The present is an especially desirable time to work intensively for
increased yields because of the possibility that net incomes of farmers may decline during the next
several years as a result of lower prices and the probable continuance of high production costs. To the
extent that net incomes can be sustained through increased yields and greater efficiency in farming
operations, farmers will be in a stronger position to meet any necessary readjustments in future years
and will contribute toward the maintenance of stability in the economy of the State and Nation.

200

MONTHLY BUSINESS REVIEW

Review of Business. Industrial. Agricultural. and rmancial Conditions
DISTRICT SUMMARY
The sales of department stores in the Eleventh Federal Reserve District showed a counter-to-seasonal decline from September to October, and the increase over October last year was
narrowed to 4 percent. Cumulative sales for the ten months,
however, were 11 percent higher than in the corresponding
period of 1947, the largest percentage gain for any Federal
Reserve District. October sales of furniture stores declined 31
percent from the large September volume and were 17 percent
smaller than in October last year.
The value of construction contracts awarded in the District
increased sharply in October from the low September volume
but was considerably smaller than in October last year.
Daily average production of crude petroleum reached new
peaks in October both in the District and in the United States
at levels 6 percent higher than in October last year. Stocks of
crude petroleum and of refined products at the end of October
showed larger increases over a year ago than were recorded a
month earlier.
Moisture conditions were improved during the past month
by the light to heavy rains which fell over most of the
Eleventh District, but there is still a marked deficiency of
subsoil moisture in nearly all areas. The District's wheat crop
is making good growth under the stimulus of more adequate
moisture, with prospects greatly improved for winter pasturage and production next year. Estimated productions for
1948 on November 1 were lower than a month earlier for cotton,
peanuts, and sweet potatoes. In Texas, the 1948 production of
cotton, corn, rice, potatoes, and peanuts is lower than in 1947,
in contrast with increased production of those crops in the
in the United States. Condition of livestock and their ranges is
substantially below the average for this season, and in the
drought areas shrinkages in livestock weights have occurred
despite supplemental feeding.
The loans of weekly reporting member banks increased substantially between October 13 and November 10, extending .
t he rise that had been in progress during the preceding four
months. Investments also increased during the four weeks,
after having declined sharply during the preceding four-week
period. Deposits showed a seasonal expansion, reflecting chiefly
a rise in interbank deposits.
BUSINESS
Department stores in the Eleventh Federal Reserve District
reported a contraseasonal decline in sales during October, the
dollar volume being 4 percent below that of September and
only 4 percent above that of October 1947. This year-to-year
gain, which compares with 15 percent in September, is the
smallest reported for any month since October 1947. The
cumulative sales of reporting stores for the first ten months of
this year exceeded by 11 percent those during the corresponding period of 1947, a percentage which is larger than that
reported for any other Federal Reserve District. Reflecting the
decline in sales from September to October, the seasonally
adjusted index of department store sales in this District dropped
sharply in October to 388 percent of the 1935-39 average, the
lowest level since March, as compared with 423 percent in
September of this year and 360 percent recorded in October
1947. Each October since 1945, the adjusted index of sales
has declined from the September level, but in each of the

previous two years it has shown an increase from October to
November. Some executives anticipate a recurrence of the
upward trend this Novemher, but a continued lag in sales is
indicated by reports from weekly reporting department stores
for the first two weeks of November, which show that sales
in the District were 10 percent below those of the corresponding 1947 period. Further evidence of the lagging sales is the
increasing number of storewide promotional sales and of promotions of special purchases in particular departments, including some of the household durable goods items.
Reflecting at least in part the decline in sales during the
month, stocks of reporting department stores increased 5 percent in October. The increase in October this year, however,
was much smaller thao the 12 percent gain from September
to October last year; as a result, the year-to-year increase at
the end of October this year was only 19 percent, compared
with 26 percent at the end of September. The increase in October was the smallest year-to-year gain in inventories for any
month since January of this year. Outstanding orders, after
having declined during the preceding two months, rose slightly
in October, largely because of increased purchases of merchandise for the holiday season, but were 27 percent below those at
the end of October 1947.
WHOLESA LE AND RETAIL TRADE STATISTICS
Number

Retail trade:
Department stores:
Total 11th Dist... .
Corpus Christi . . .

of
reporting

Dallas .... .

Fort Worth .... .
Houston ... .
San Antonio ...... .

Shreveport. La ...•.
Other cities .. _....
I<~u rni ture stores:
Tot.all 1th Dist.....

Dallas ..

Houston .... , .... . .
Por t Arthur ..• . .. .
San Antonio .. . . . . .

firma
48
4
7
4
7
6

Pe"~~n~~g~.~M~.~n.~.~in~~~~==::
:======~~,
Net sales
Stow t
October 1948 (roUl
October September

1947
4

- t
t

1

to

1

HItS
- 4
- 1
- 5
4
- 13
- 5

3

23

7

18

4

3

44
4
5
4
4

- 17
-4 1
- 22
3
- 12

- 31

10 mo. 1948
compo with

October BloiS from
October September

10 mo. 1947
11
2
5
9
27
9
20

1947
19
2
17
21
21
12

7

26

- 63

- 37
- 31
- 19

1948
~

1
5
4
10
8

16
12

8
11

25

in

Whol.ale trade:
Machinery , equip't
22
- 3
and 8uppllea ..•..
3
23
Automotive supplies
4
2
5
No Mg.
5
8
Drugs ..... .
7
-5
t
-17
- 20
10
-2
Dry good........ . .
8
- 10
-16
- 2
5
2
Groceries ..... . . . . .
44
- 1
-1
13
- 4
7
5
Hardware ..... . .. .
- 1
-4
- 7
Tobacco &: products.
10
- 5
-t
Wiring supplies, eonstruction material
distributorn
-1 3
- 2
10
· Compiled by United States Bureau of Census. (Wholesale tnwc figures prelimina.ry.)
tStocu at end of month
tlndicate8 change le88 than one-balf of one percent.

INDEXES

October
1948
427
11th District .
Dalla, . .....
397
Houston ..... 480

O~'

DEPARTMENT STORE SALES AN D STOCKS

Daily average a les-(1935-39= loo}
Unadjus..ed ·
Sept.
August Oct-ober Oct.obcr
19<8
1048
1947
1918
444
365
396 r
388
361
41 6
333
38 2r
552
426
419
437

Adj...ted

Sept.

August

1948
. 23
a76
616

1948
41 9
391

. 84

Stocb-(l935.:J 9 - 100)
UnOOjusted ·
Adjusted
Sept.
August
October SeP".
August. October October
1948
1948
1948
1948
19.7
1948
1948
37S r
364
11th District.. 419
423r
411
346
370
r-Revised.
·Unadjusted for seasonal varia..ion.

October
1947
360r

347r
381

October
1947
306

The ratio of collections to accounts receivable outstanding
at the beginning of the month showed little change in October
from that of the previous month. The ratio of collections on
regular accounts rose slightly and amounted to 53 percent in
October, while that on installment accounts continued at 18

201

MONTHLY BUSINESS REVIEW
percent, where it has been for five consecutive months, in
spite of the fact that installment accounts outstanding increased during each of the four previous months. The influence
of Regulation \V may be reflected to some extent in the ratio
of cash sales to total sales, which rose in October to 34 percent
from 31 percent in September.
After having shown substantial sales increases during August
and September, furniture stores in the Eleventh District reported a decline of 31 percent in October volume from the
level of the previous month and 17 percent from that of the
previous October. The October decline probably reflects the
effects of the large August and September sales volume and,
to some extent, the more restrictive terms of Regulation W,
wlllch became effective September 20, 1948. It should be
pointed out that aggregate sales for the three months- August,
September, and October-were 7 percent larger than those for
the corresponding three months of 1947, wlllch is slightly
larger than the percentage gain in cumulative sales for the first
seven months of the year.
The effects of the credit regulation also were indicated by
the decline of credit sales, both in actual amount and relative
to total sales. Credit sales declined 35 percent in October as
compared with those in September, willie cash sales increased
5 percent, causing the ratio of credit sales to total sales in October to drop to 85 percent from 91 percent in September. The
October ratio, however, was above the 83 percent reported in
October last year. One reason for the increase in cash sales in
October was the unusually low level to which such sales had
fallen in September, when consumers were increasing their
credit purchases prior to the reimposition of control on installment credit. As a result of the substantial decline in credit
sales during October and the small increase in collections during
the month, accounts receivable at the end of October were
2 percent below those at the close of the previous month but
were 56 percent above those of October last year.
The inventories of reporting furniture stores were 8 percent
larger in October than at the close of the previous month and
were 16 percent above the dollar value of stocks in October
1947. The September to October rise was the largest month-tomonth increase for any month since August 1946, and the percentage gain over the previous October was the largest yearto-year rise in stocks since September 1947. The sharp drop
in sales during October probably accounts for the size of the
gain in inventories, especially since reports indicate that stores
generally have followed conservative policies with respect to
inventories over the past several months.
AGRICULTURE
Moisture conditions in the Eleventh Federal Reserve District
improved as moderate to heavy rains fell in the Panhandle,
North High Plains, and coastal areas of Texas and light general
rains brought some relief to eastern and central areas during late
October and early November. The more favorable moisture
supply improved prospects for wheat pasture in the North
Plains and Panhandle and permitted seeding and germination
of small grains and winter cover crops in central and eastern
sections of the District. Additional rains are needed in most
areas to increase subsoil moisture and for the continued development of late feed crops and improvement of pastures
and ranges. Harvesting of fall-maturing crops has made good
progress and is nearing completion for corn, cotton, rice, and
grain sorghums. Estimates of production in Texas of cotton,
corn, rice, hay, potatoes, peanuts, and citrus are below those
of last year, but larger crops of grain sorghums, flaxseed, and
pecans are forecast. The outlook at mid-November for produc-

cion of winter vegetables was generally good, although frost
on November 10 interrupted harvesting and caused some damage to tender vegetables and tomatoes in the Winter Garden
and parts of the Laredo area. The condition of cattle and sheep
continued to decline in October except in the North High Plains
and in coastal areas, where livestock were making good gains.
In central and eastern areas, shrinkage continued despite supplemental feeding.
TEXAS COTTON PRODUCTION BY CROP REPORTING DISTRICTS

Crop
reporting
districts
I·N ..........•.......
I·S . . ....•...........

([n thousand8 of b&les-500 lb. groM ""t.)
1948

indicated

4...

November I

nr 1947

131

130
585
505
20
795
220
130
15
285
160
355

124
62
102
133
98
119
115
47
90
124
121

1.794

1.669

3,437

3,200

93

................
.. , ....... ......

581

5 ................ . . ..

119

80

6 ...... •. • . •.. ..... . .
7 ......•. •.•.• .•.•...
8 .. . ... • .•. •.. . . ... ..
9 ..•.....•. •. . ... . . . .
10 ............... _, _, .

State .. .. . ..... .. ..... . ..

percent

1947
105
946
494
15
810
185
113
32
315
129
293

2 ........•...........

3 ...

1948 as

1946
35
198
270
14
482
96
99
15
185
46
229

1945
15
10li
380
11

27
227

106

The November 1 cotton report of the United States Department of Agriculture indicates a record yield for the United
States in 1948 of 312.1 pounds of lint per acre. This is 44.8
pounds above the 1947 yield and 57.9 pounds above the 10year average. Texas, however, is not experiencing a record
yield, since estimates for 1948 indicate a lint yield in the
State of only 171 pounds per acre, 27 pounds below the yield
in 1947 and about the same as the 10-year average. The report
estimates the United States crop in 1948 at 15,166,000 bales,
which is 87,000 bales higher than the October 1 estimate, willie
the Texas crop, estimated at 3,200,000 bales, is 50,000 bales
below the October 1 estimate for the Sqte. Ginnings in Texas
prior to November 1, totaling 2,379,000 bales, represent 74 percent of the crop and compare with 68 percent in 1947 and 75
percent in 1946.
CROP<pRODUCTION-(In thousand. of bushels)
_ - --TeD.!
Average
1937~6

Winkr wbeat. .

Com ... _....
O'ta..
Darley
Cotton t.. .

All bart.. .... . ......

Estimated

Nov. I, 1948

Stawin Eleventh Dislrict·_
Average
Est..imatcd
1937~6
1947
lio v.1, 1948

45,686
70.442
a'.370

1947
124,270
48,b92
31.248

4.049

2,020

2,370

12.12011

2.894
1,383
4,311
6, 121

3,437
1,.36
.,636
4,675

3,200
1,319
4,400
3,290

4,348
.,271
9,978
14,366t1.

64 ,169
46,167
14.734

113.00111
123.919
6.\.166

238.71287.6M
69.006

159.602100,157
40.004

9,230·

11,213-

4,686
4,7401
9,260

4-,MS
.,817

Potatoes, Irish.......
8,734
Pot.atocs. sweet.....
12,5MtI.
lO,964t1.
Rice ... ... ......... . 15,688
23.700
23,092
36,991° 46,1.56°
46,8420
Gruin sorghums..
65,662
68,313
77,764
68,497
77.130
92,144
-Figures are combined totals for five States lyini!; wholly or partly in the Eltwenth Federal
Reserve District: Texas, Arizona, Kew Mexico, Louisl&na, and Oklahoma.
tIn thoutmnds of
bales. tin thousands of tons.. . -Arilona, New Mexico, Oklahoma, and Texas. tl.louisiana ,
Oklahoma, and Texas. DLouwana and Texas.

SOURCE: Uoited States Department of Agriculture.

November 1 estimates of corn, grain sorghum, and rice
crops in Texas, details of which arc given in the table on crop
production, were unchanged from the October 1 report. The
acreage of grain sorghums was substantially higher than last
year, but much of the increase occurred in the High Plains,
where a large acreage failed to produce grain and is being
utilized for forage. Yields of peanuts in Texas are lower than
expected earlier and production on November 1 was placed at
294,750,000 pounds, 10 percent below the October 1 forecast.
WIllIe late peanuts suffered some frost damage on November
10, harvest of early peanuts was being rushed to completion
in most counties by mid-November. TIlls year's pecan crop
was estimated at 47,250,000 pounds, 125 percent above last
year's crop and 76 percent above average. The relatively low

202

MONTHLY BUSINESS REVIEW

price offered for pecans this season and the high labor costs
have tended to delay harvest, with reports indicating that hogs
have been turned into some native groves.
The Texas grapefruit crop was estimated at 19,000,000
boxes, which, although 500,000 boxes above the October 1
forecast and 9 percent above average, is 18 percent below last
year's near-record crop. The prospective orange crop, estimated
at 4,500,000 boxes, unchanged from a month earlier, compares with the 1947 crop of 5,200,000 boxes and an average
of 3,242,000 boxes. Harvest of the new crop is well under
way, with total shipments to date larger than for the same
period in 1947.
Although heavy rains and below-normal temperatures in late
October and early November delayed field work, interrupted
planting in irrigated districts, and retarded the maturing of
tomatoes, the general condition of most fall and winter crops in
the commercial vegetable areas of Texas was favorable. Planting
for late season harvest was active, and growers were able to
cultivate earlier planted crops, such as beets, broccoli, cabbage,
carrots, cauliflower, onions, and spinach. Beans, eggplant, peppers, and squash were available in increased supplies, and harvest
of fall-crop tomatoes, although delayed by the November 10
frost, was under way in all areas. Harvesting of carrots and lettuce from the fall-crop acreage in the Panhandle area continued
active, but the season there was nearing an end.
CASH RECEIPTS FROM FARM MARKETINGS
(In thousands of dollars)

8eptember 1!H 8
State

Cropo

Louisiana •.. .•...... .

45.9~

Oklaboma .. ..... . . . .
Texas ..............

6.943
21 .71 1
150.213

Livestock
I 4.HU
11.904
6.100
41.215
69,734

Total ...... . 1228.905

1133.114

Aruous. ' " .. .. ..... I 6.104
New Mexico .........

---

Total
I 9,2M
,7.838
12.043
62.926
219.947
1302.019

September
Cumulative re<leipts
1947 - Jan, 1 to Sept. SD-T olAl
11H8
1947
I 7.053 I 134.147 I 117.843
5 1.493
228,248
183.070
10.682
86.809
81,358
57.427
501.967
456.9.\6
233.977 1.373.833
1.231.161
1360.632 $2,325,(Kl4

12,070,388

SOURCE: United States Department of Agriculture.

Range feed conditions deteriorated further during October
and early November in those parts of the District where
drought conditions continued but improved in areas receiving
light to heavy rain. Winter range feed prospects are very good
in south T exas as a result of raios during September and again
in October, which started winter weeds and grass. Scattered
light showers in October and November have benefited grass
and weeds in some Trans-Pecos counties, but more rain is needed
for continued growth. A generally adequate supply of range
feed is available in northern range counties, and scattered
showers during October, along with a general rain on November 1, sharply improved winter wheat prospects in that area.
Winter oats for pasture in southern counties have been making
very good growth. Small grain pastures in most of central
Texas, which were at a standstill until the rains of mid-November, have taken on new growth. In the southeastern and upper
coastal counties of Texas, range feed was critically short prior
to rains last month, Ranges in southern New Mexico and
Arizona, which arc in need of moisture, are in poor to fair condition. Supplemental feeding of livestock was rather heavy
during October and November in all range sections of the
District.
Cattle and calves showed heavy shrinkage during October
and early November in the upper coastal and most eastern
counties of Texas, where range feed was very short. However,
in the southern and western Edwards Plateau counties, cattle
were in good flesh and gaining on the new supply of green feed
at the beginning of November, Herds have been culled closely
on most ranches in the District, old cows and calves having

been sold and the younger breeding stock retained. Sheep in the
northern and eastern Plateau counties arc goiog into the winter
with poor flesh. In most southern and western counties of Texas,
sheep generally are gaining on improved feed supplies. The
condition of both cattle and sheep in Texas on November 1
was about 7 percent below average for this season of the year.
As a result of usual seasonal increases in the marketing of
livestock, total receipts at the Fort Worth and San Antonio
markets in October were 13 percent higher than in September
but 9 percent below those in October last year. All classes of
meat animals shared in the increase over September receipts,
but only cattle and calf receipts were below those of a year
ago; hog receipts increased slightly and marketings of sheep
were up 16 percent.
LIVESTOCK RECEIPTS-(Number)

-

-

-FortWortb,- - - - --Sao An tonio --~
October Sept.ember October

Oetober September October
1948
1948
1941
7, ,1 40
100,169
79,302
37,8
11
08.251
40.545
Calycs ........ . ••.• .• . •.
33.675
40,341
Hogs ........•. •. •••••. • • 40.049
102,898
135,918
Sheep . . . . •.••••.••.••• • • 137 ,004

Cia"
Cattle ............... .. ..

1948
33,907
31,689
1,018
80,9S6

1948
211.133
23.601
9,055
81,148

1947
52,201
40,549
6,115
51,801

COMPARATIVE TOP LIVESTOCK PRICES
(Dollars per hundredweight.)
- - - Fort Worth,- - - - - - San Antoni) October September October October September October
1948
1948
1947
19'5
19.5
1947
CIAoo
131. 00
131.00
127 .00
U6 .00
127 .50
124 .50
Beef steers . . ... .
22
.60
20
.00
28.00
20
.00
25.60
28.00
Stocker steers , ......... . .
27 .00
26 .00
27 .50
24 .25
31.00
Heifers and yearlings . . .. . 31.00
22
.60
17
.60
20
.50
22.00
17
.
00
20.00
Butcher CO .....8 •• • • • •••••••
28 . 00
22 .50
26 . 25
29 .00
20.50
Slaughter calves .. . . . .... . 26.00
27
.00
29
.50
29.75
26.50
28.00
28
.50
Hogs . .•. •••. •.• . .. . . . . . .
25 .00
25 .50
22 .50
22 .50
24 .00
20 .00
Lambs ••••••• ••• •.•.•.••

The downward trend in the general level of prices received
by Texas farmers contioued for the third successive month,
with the mid-October index of 299 the lowest since March
1948, accordiog to the midrnonth price report of the United
States Department of Agriculture. The report indicates sharp
declines in midmonth average prices of meat animals and
corn, with moderately lower prices for cottonseed, sweet
potatoes, and butterfat. These declines were only partially
offset by limited price gains registered for other grains, poultry
products, and wholesale milk. Prices received for cotton, flaxseed, grain sorghums, and retail milk remained unchanged. During the month ended October 15, hogs dropped $2.90 to average $23.40 per hundredweight. Beef cattle at $20.20 and veal
calves at $22.90 were off $2.60 and $2.30 per hundredweight,
respectively, while lambs at $20.30 were 90 cents lower than
the previous month. Prices of all meat animals were below the
high August levels but averaged higber than a year earlier,
except for hogs, which were at an all-time high in October
1947. Com declined 9 cents to average $1.43 per bushel as of
mid-October, while other grains reflected only limited price
changes. Following the usual seasonal pattern, the prices of
chickens, eggs, and turkeys made substantial advances during
the month.
Reports from spot commodity markets indicate that from
October 15 to mid-November prices of grains increased slightly,
hog prices declined further, and prices of other meat animals
and cotton fluctuated within narrow limits.
FINANCE
Reflecting the favorable operating conditions experienced
during the first six months of 1948, figures recently released
by the Comptroller of the Currency show that national banks
in the United States and possessions reported net operating
earnings of $355,307,000 for the period ended June 30, 1948,
This total represented an increase of $36,125,000 over the first
half of 1947.

203

MONTHLY BUSINESS REVIEW
The principal item of operating earnings in the first half of
1948 was $423,091,000 received from interest and discount on
loans, or about $94,262,000 more than the amount earned
during the corresponding period of 1947. An increased average
volume of loans during the period at moderately higher interest
rates contributed to the more favorable trend. Earnings from
interest on United States Government obligations and interest
and dividends on other securities totaled $349,384,000, or a
reduction of $15,191,000 from the amount earned during the
first half of the previous year.
While gross earnings increased, operating expenses excluding
taxes on net income rose to $570,883,000 from $516,946,000
for the first half of 1947. Principal operating expenses were
$272,545,000 for salaries and wages of officers and employees
and fees to directors, a sum approximately $27,128,000 more
than was paid during the first half of 1947, and an increase
in payments for interest on time and savings deposits, which
brought total expenditures for that purpose to $87,194,000.
Net profits before dividends for the six months ended June
30, 1948, amounted to $196,866,000, which at an annual rate
is approximately 7.10 percent of capital funds. Comparison of
net profits before dividends during the first half of 1948 and
the first half of 1947 is not practical, owing to reserve accounts
amounting to more than $99,000,000 which were charged out
of current earnings under provisions of a ruling issued by the
Bureau of Internal Revenue. Cash dividends declared on common and preferred stock were slightly larger than during the
comparable period of 1947 and amounted to $92,393,000. The
annual rate of cash dividends was 3.33 percent of capital funds
and was 46.93 percent of the net profits available. The remaining 53.07 percent of net profits, or more than $104,000,000,
was retained by the banks in their capital accounts.
Between October 13 and November 10, total loans of the
member banks in leading cities in the Eleventh District rose by
about $33,934,000. Over $26,000,000 of the increase during
that period was in commercial, industrial, and agricultural loans
and represented a more or less normal seasonal increase for those
types of borrowings. "All other" loans, which include consumer credit transactions, also showed a substantial increase
of some $10,737,000. Minor decreases were reported for other
types of commercial bank loans. The increase in commercial,
industrial, and agricultural loans was rather well distributed
throughout the four-week period, although the rate of increase
lessened somewhat during the week ended November 10.
Despite the rising loan trend that has prevailed during the last
few months, the rate of increase in member bank loans in leading cities of this District has been notably less in 1948 than
during the comparable period in 1947.
Holdings of United States Government secutltles of these
selected member banks increased by $13,666,000 as banks
added to their investment in Treasury bills and Treasury certificates of indebtedness but sold off some of their holdings
of Treasury notes and Government bonds. An interesting note
is reflected in the figures which show that during the year
ended November 10, 1948, member banks in leading cities in
this District reduced their holdings of United States Government bonds by $112,272,000, reported holdings of Treasury
notes some $41,356,000 less than on the comparable date a
year ago, but increased their short-term portfolio of bills and
certificates of indebtedness by a total of $49,699,000.
Total deposits of selected member banks in leading CItIes
in this District increased by $58,604,000 during the four-week
period ended November 10. An increase of $18,318,000 was
reported for demand deposits adjusted, while time deposits were

$2,402,000 larger than on October 13. Interbank deposits,
however, showed the largest increase during the four-week
period, rising by $45,193,000.
CONDITION STATISTICS OF WEEKLY REPORTING MEMBER HANKS
I N LEADING CITIES-Eleventh Federal 'Re8erve District
(In thousands of dollars)

Nov. to,

Item

Nov. 12,

October 13,

1947

1948

1048

T otal loans and investments...

. . . . . .. , . , ..... . . 12,309,285

Totalloans- Kett....

1,097,610

TotallotullJ-G ros!J ... ................. . , ... , .,.

1,104,004

Commercial, industrial, and agricultural loaos. ..
Loons to brokers snd dea ler! ill securities., ..... ,
Other 1001111 for purchasing or carrying securities.,
Real~tc lOtIOs . ....... . . ..... . . ........ ,...
Lonusto banks. .. .. . . . . . . ... . . ........
All otber loons.... . ... ......................
Total investmcnts..............................
U. S. Trcu.~ury bills.......... . ... ..... . .......
U. S. Treasury certificates of indebtedness
U. S. Trca:lUry now,. .. . . . . . . . . .. .. . . . . . . . . . . .
U. S. Government bonds (incl. gtd. obligatiolls)..
Other sceuriticu . . . . . . ... . . .. .. .. . . . . . . . . . . . . .
Reserves with Fcderu.l Reserve Bank.. .......... ..
Balances with domest ic banks ... ,..................

763,689
6,209
57.219
87,348

$2,274,367- I Z.200,8().4

973,833-

1,063,896
1,070,070

67.(,046
7,355
72,600
74,786

737,6 11
6,890
58,093
88,6M

346

161

466

189.103
1,2D5.281
45,108
232,379
68,910
738,088
120,796
573,515
281,427
1,{I:U,520

144,885
1,300,534
36,553
191,235
110,266
8.50,360
112,120
41X1,820
325 ,135
1,850,{l03

178,366
1,190.734

296,7{12
1,916.202

~~~~:~~~G~~e~~~~~i de~sit·II'.: :: :: :: :::::::: : 4~~:~~

3~~:~

4~~:~

IXwuud deposits---OO'justed· ....• ,. , . . . . . . . . ... . . .
Intrrbnnk deposits

28.722

210,106
79,661
752,440
119,915

545,233

. ... . . .. • • ..
644,447
723,110
59{1,'Ui4
B:mowmgB from Federal Reserve Hank ..
2,000
1,500
None
· Includes aH demand deposita other than interbank and United States Government, 1et:18
cash items reported as 01) hllnd or in process of collection.
~~_.IM~~~~_~_~_~_-~~

amouu~ of

reserves deducted subsequent. to June 30, 1948, was 80 small as to have no significant
effect upon the comparability of the data.
tArter dcuuctioll9 Cor reserves and unallocated charg~tfll.

Gross demand deposits of all member banks in the Eleventh
District continued to follow the rising trend that has been in
evidence for several months, although during October all of
the increase was reported by country banks. During that
month, average daily figures of gross demand deposits for the
District's country banks were $2,740,900,000, or approximately $45,384,000 higher than the September average. In
contrast, average daily figures for the reserve city banks showed
total gross demand deposits during October of $2,506,619,000,
reflecting a decline from the September level of $1,633,000.
Time deposits during October averaged slightly higher at both
reserve city banks and country banks of the District.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER Bru'!KS
Eleventh Federal Reserve District
(Averages of daily figures. In thouaands of dollan)
Combined total

Reserve city banks

Country banks

Groos
Gro..
Time
demand
Time
demand
Time
1500,813 $2,342,242 $317 ,424 12,502.946 1183,389
54 1,504 2,437 ,202 337,197 2,663,299 204,307
5,O44,{l42
576,282 2,415,559 364,648 2,629.383 211,734
587,716 2,456,033 315.216 2,639,501 212,501
5,096,434
5,IJ2,41 1
591.551 2,440.802 379.803 2.662.609 211.748
580,519 2,508,U2 378.943 2,695,516 210.576
5,203,768
502.462 2,506.619 379,873 2,740.000 212.689
5,247.519

Gross
demand
Date
October 19" 6 .. .... .. .... $4.845,188
October 1947 . .... ...... 5,100,591
June I!H8.
July 1948 ..... . .... .....
August 1948 ..... . .......
September 1048 ..... ....

Oct.obe, I tH8 . .•.... ....

SAYINGS DEPOSITS
Eleventh Federal Reserve District
Per~ent~e c~ange in
saVings eJ)08lts from

October 30, 1948
Number of
reporting
C;ty

Louisiana: Shreveport .....
Texas:
.Heaumont, . . .

Dallas .......
El Paso ....
}t~Ort

Worth.

Gah-eston.
Houstoll ...
Lubbock .. ..•.
Port Arthur .. ,.

San Antonio . . .
Waco . ... ... . ......•. .
Wichita FaJls .. .. .
All other . . ... ...
Total .. .

Nwn~rof
8I\VlUgs

ballks
3

de~tors

3
8
2
4
4

12,130

32,759

Amotplt of
8l\vJn~

Oe~be,

1947
1 24,963,405 - 4.9

55

6,171
39,028
10,188
7,136
63,120

6,160,126
77,838,017
22,355,990
34,621,840
21,724,327
72,909,450
2,836,459
4,816,919
45,258 ,318
9,898,100
4,687,2 15
53.855.184

102

514 ,744

$381 .758.410 -

8

2
2
6
3
3

142,308

32,367
43 ,092

23,137
101,819
1,489

31,

depoSits

-

7. 2

-

0.4

- 4 .0
- 0 .7
- 1.8
4. I
51.6
- 4.7
- 1.1
2.0
- 2 .2
- 0.8
0.6

Sept. 30,
194B

0.4
0.2
0 .1
1.5
1.6
- 0.6
0.1
- 22.3
0.2
0.1
0.7
- 0.1
0.2
-

0.1

During October, bank debits as reported by banks in 24
cities in the District showed an increase of 10 percent whell;

204

MONTHLY BUSINESS REVIEW

compared with figures for the same month of last year and
were 4 percent larger than during September. Largest increases
in debits were reported from Roswell, New Mexico, and Lubbock and EI Paso, Texas, with moderate to slight increases
being reported by most other cities in the group. Five cities,
however, reported declines in bank debits, ranging from a low
of 1 percent at Monroe, Louisiana, and San Angelo, Texas, to
the largest decline of 13 percent reported from Austin. Although the annual rate of turnover of deposits declined from
13.9 in September to 13.4 in October, the turnover continued
at a higher rate than for the comparable period last year, when
reports showed a turnover in October 1947 of 13.1. The highest
rate of turnover of deposits on an annual basis continued to be
reported from Dallas, as the turnover in that city was 17.5 for
October. Houston, EI Paso, Fort Worth, Amarillo, and Lubbock
also reported a turnover for the latest month in excess of the
average for the group of 24 cities.

creased seasonal demand for currency, Federal Reserve notes of
this bank in actual circulation increased by $5,088,000 during
the month ended November 15 and were slightly larger in outstanding amount than on the same date in 1947. As a result
of a decline in holdings of United States Government securities
from $1,058,756,000 to $1,046,051,000 and slight changes
in other earning assets, the total earning assets of the bank
showed a decline between October 15 and November 15 of
$13,359,000.
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
(In thousands of donars)

Item
Total gold certificate reserves, . ................... .

Discounts for member banks . ...... . . . ............ .

~~rS~~I::::nr!~~iti~ : ::::::::::::::::::::: :

Total earning assets .. . . , .. . . . . . . ... . ............ .
Member bank: reserve deposits . . , .... . . .. ......... .
Federal Reserve notes ill actual circulation ......... .

Nov. 15,

Nov.15,

1948
$ 641,528
2,280
7,857
1,046,051
1,056,188
978,391
630,294

1947
$ 530,611
2,700
1,247
1,009,521
1.013,468
841,167
628,078

0,t.15,
1948
I 623,033
2,418
8,373
1,0li8,756
1,069,647
962,218
621,206

DANK DEBITS, END·OF-MONTH DEPOSITS, AND:ANNUAL RATE OFjTURNOVER
OF DEPOSITS
(Amounts in thousands of dollan)
---Debite---

Petg.chan~ over End-of·montb

October October

City
1948
1947
Arizona: Tucson ...•.. S 60,726
4
Lowsiana:
39,737 10
Monroe ... , ..... . .
165,303 33
Shreveport ........
New Mexico: Roswell.
16,831 18
Texas:
Abilene ...•...• . •.
36,329 - 2
96,178
Amarillo . .........
4
Austin ............
104,288
4
Beaumont .. . ......
103,382 25
Corptl8 Christi .....
75,280 - 2
Corsicana ....
13,107 - 6
Dallas ..... •.
.. 1,062,490 7

EIP""" . ..........

Fort Worth ........
Galveston .•• • .....
Houston .... .......
Laredo ............
Lubbock .........•
Port Arthur ..... . .

San Angelo .•......
San Antonio . ......
Texarkanat ........

~ler . . ...........
aco .............
Wichita Falls •.•.•.

134,854
328,724
68,307
1,135,281
15,888
74.280
35,160
31,074
241,084
16,527
41.245
56,029
59.711

13
1
8
20
2
- 4
6
- 3
- 1
1
9
4
19

-

Total-24 cities ... ". 14,011,815

cpt.

deposits-

1948
5

Oct. 31. 1948
$ 85,265

Annual rate of turnover
October October
1948
8.6

1947
8.6

Sept.
1948
8.2

-1
11
28

42,005
167,761
19,282

11.4
12.0
10.9

10.8
10.1
9.4

11.6
10.9
8.8

1
5
-13
2
-6
2

42,421
84,775
102,255
101,553
80,644
20,533
728,452
113,508
287,408
96,521
900.452
21,741
67,998
38.280
39.964
318,268
22.764
54,293
66,623
82,229

10.3
13.8
12.1
12.6
11.3
7.8
17.5
14.4
13.8
8.6
15.1
8.6
13.7
11 .0
9 .6
9 .1
8 .6
9.1
10 .3
8.8

11.3
13.3
11 . 6
10.9
12.6
8. 4
17.3
13.4
14.4
8.4
14.3
9.2
16 .7
10 .1
9 .8
9.1
9.0
9.2
9 .8
8 .0

10.3
13.1
13.8
12.5
12.0
7.9
16.8
12.4
13.9
8 .4
14.4
8.0
11.3
10 .6
9 .8
9 .0
8 .3
9.4
10 ,2
8 .3

$3,684,915

13 .4

13 .1

13.9

4
17
1
1
5
4
24
3
-1
1
4
-3
3
5

10

·Dcmand and time deposits at tho cnd of the month include cert ilied and officers' cheeks
outstanding but exclude deposits to the credit of banks.
1Tbia figure include8 only one bank in Texarkana, Texas. Total debit! for all bankB in
Tcxarimna, Tuns-ArkrLos.'\8, including two banks located in the Eighth District , amounted to
$29,815.

MEMBER BANK RESERVES AND RELATED FACTORS
Eleventh Federal Reserve District
(In millions or dollars)
Changes in weeks ended

ended

Nov. 3,

Oct. 27,

0et.20,

Item
1948
1948
1948
1948
Federal Resen'e creditlocaL .................
30.4
-19.8
-10.5
18.4
Interdistrict commercial &:
financial transactions, ... -13 .3
- 26.2
11.1
10.1
Treasury operations, .. " .
16.6
6.5
3.1
9.7
Currency transactions ... . . - 1.0
3.1
- 8.7
4.6
Other deposits at the
Federal Reserve Bank ... - 0.2
0.1
- 0.1
- 0.2
Other .Federal Reserve
0.3
accounts., ........ ,., . - 0.1
2. 1
0.6
Member bank. reserve
ba.lances ....... ,., . • .•.
6.2
32.3
- 9.0
7.9
Note: Amounts preceded by n minus sign reduce rcscn'CS; nil otb ers

The First State Bank, Abilene, Texas, a newly organized' institution located in tbe territory served by the
Head Office of tbe Federal Reserve Bank of Dallas, opened
for business November 18, 1948, as a member of the Federal Reserve System. This bank has paid-in capital funds
of $250,000, including capital of $150,000, surplus of
$50,000, and undivided profits of $50,000. The officers
are: E. L. Thorntrm, Cbairman; Charles P. McGaba, Vice
Chairman; R. B. Tanner, President; Wayman Rose, Vice
President and Cashier; Jasper Albrigbt, Assisttmt Cashier.

NEW PAR BANK
The Bellaire Stale Bank, Hemston, Texas, a newly organized nomnember bank located in the territory served
by the Houslon Branch of the Federal Reserve Bank of
Dallas, was added to the Federal Reserve Par List on its
opening dale, November 12, 1948. This bank, a member
of the Federal Deposit Insura1.ce Corporation, has total
capital of $200,000, surplus of $25,0'00, and u1Utllocated
funds of $25,000. Its officers are: Alfred]. K1UtPP, Presidenl; Dewey Marsh, Executive Vice President; Edmond
A. Fretz, Vice President; George Gentry, Cashier.

Cumulative changes
4 weeks

Nov. l0,

NEW MEMBER BANK

Nov. 10,
1948

Jan. 1 to
Nov. 10;
1948

18.5

1.6

-18.3
36.8
- 2.1

-41.9
150.0
-12 .5

-

0.4

0.3

2.9

9.4

36.4
106. 9
add to reaerves.

Principal changes in the condition of the Federal Reserve
Bank of Dallas included an increase in total gold certificate
reserves, an increase in Federal Reserve notes in actual circulation, and a decline in total earning assets. Gold certificate
reserves of the bank rose by $18,495,000 to bring the total
on November 15 to $641,528,000, or almost $111,000,000
more than on the same date a year ago. Reflecting the in-

The United States Treasury Department is now engaged in
its third peacetime savings bond drive in an effort to encourage and expand the habit of regular saving among the American
people. The current drive extends until December 11 and places
its greatest emphasis on pay roll savings and the Bond-A-Month
Plan.
Latest Treasury figutes show that there are currently about
7,500,000 persons who are buying savings bonds regularly
through pay roll deduction. The average deduction for these
putchases amounts to about $20, so that the aggregate being
saved regularly in this way is running in the neighborhood
of $150,000,000 a month.
The Bond-A-Month Plan, according to Treasury Department reports, has shown very marked gains over figure. of a
year ago. At that time, the Treasury estimated that there were
about 250,000 participants in the Bond-A-Month Plan, with
aggregate purchases of $15,000,000 of savings bonds a month.

MONTHLY BUSINESS REVIEW
Around the first of this year, the number of participants was
estimated to have risen to more than 500,000, while the latest
official estimate is that more than 1,000,000 persons are now
buying bonds regularly under the Plan, with aggregate monthly
purchases of some $50,000,000.

INDUSTRY
The value of construction contracts awarded in the Eleventh
Federal Reserve District during October increased sharply from
the low September volume but was considerably smaller than
the large total for October last year. Nevertheless, total awards
for the first ten months of 1948, which amounted to $647,000,000, exceeded those in the same period of 1947 by about
14 percent. Although awards for the final two months of the
year may fall below those for the corresponding months of
last year, awards for 1948 are expected to exceed the 1947 volume by some 10 percent. Moreover, the 1948 total will be
larger than any other year of record except 1942, when construction for war purposes was at a peak.
The construction materials situation has tended to improve,
despite the continuance of occasional shortages of some items
in some localities. The production of practically every construction material has been increasing, with new records established
in many lines during the third quarter of the year. The usual
seasonal slackening in construction during the winter months
should permit some further increase of stocks throughout the
country.
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In t housand!! of dollars)

October

October
lQ47
Eleventh District- total.
I 76,000
Residential . .
22.058
All other . . .
53 ,948
United States--t.ot.al ..
793 .286
Residential .. .
340.400
All other . . . . .
443.796
-37 state:!! cast of the Rocky Moun tains.
1948®
I 58.M8
17.358
41,210
778.606
206.760
48 1.846

September
1948
I <15,635
19,234
26,401
762.192
279.658
482,634

J anuary I to October 31
1048®
1947
S 647.421 I 56.\ .925
214.747
20 1.805
432.674
364 .060
8.124.379
6,419,397
3.087 .236
2,636,757
6.037.143
3,782,640

206

latter enjoying also a higher rate of utilization of existing
capacity. Stocks of Portland cement in the Nation generally
have been smaller throughout most of 1948 than in 1947, with
the reverse being true in Texas. Stocks have followed the usual
seasonal pattern, with an excess of production above consumption accumulating considerable stocks by the second and third
months of the year, followed by a drawing down of stocks
thereafter until a seasonal low is reached, usually in October.
PRODUCTION AND STOCKS OF PORTLAND CEMENT
(In thousands of barrels)

September September
1948
1947
Production
1,196
Texas .. . .... ... . .... . .
1.013
United States . ........ .
17,319
18,605
Stocks. end or month
TexRs ....... ...... . . ..
387
271
United States.... . .... .
7,022
7,U21
SOURCE: United States Bureau of Mines.

®-Preliminary.

Valuation

(In billions of board feet)

239 I

128
213
262
394
307
: 1,439
El Paso .... .
212
551
Fort Worth . .
Gu lvcston .
142
Houston . ...
600
Lubbock . . ..
190
Port Arthur .
140
1,240
San Antonio . .
' Vaco . . . . ... . . .
150
Wich ita Falls . .
68

Pereentage

Pel'1Jcntage change Jan. J to Oct. 30. J948 cban$e
valWltiOIl from
valuatlon
0 01..1947 Sept. 1948 No.
Valuation from 1947

B':.lk~~ ~~.r~~ :

711 .070

-35

- 52

495.436
919,300
1.31 6,276
637.354
1,049,506
5.120,638
2,372,0 16
2,245 ,51 8
191 ,598
7,329.700
480,549
210,622
2,325,245
714,250
183.256

66

977
2,011
3,243
3.698
3,04 6
13,838
1,419
6.676
1,609
7,535
2,368
1,442
12,556
1,521
780

4,547,956
9,511 ,939
20,074,969
8,163,997
14,028,760
76,696,751
10,357.777
24 ,225,836
3.363.890
84 ,609.447
11.977,829
2.761,333
30. 154,332
10.342 ,161
3.394,121

22
33
21
51
5
58

6

21
1
-9
12
16
- 26
89
10
-47
- 7
- 76
12
- 24
- 14
- 40

- 13

- 14

64,949 1339,716,025

42

------

Total. ......

6.275 $26 .302,382

- 10
- 16
13
- 63
- 26
184
-

[4

- 3
- 12
- 25

10
- 13
~2 1

-

1.1

1940
1.3

Oklahoma ... . ...........
New l\1 e:rico . ..••...••..•
Arizona . ..... • .•• •.•••.•

1.0
0.1
0.1
0.1

1.1

1945
0 .9
1 .0

0 .2
0. 1
0.1

0 .1
0.2

Total, 5 States . . . ..

2 .4

2 .8

Tota l, United States . . . . . . 25 .0
Perceut of U. S. production in:
4.4
.... .... ......
4.0
9.6
Above 5 Statcs .........

28 . 9

~~isia~a·:.: : : : ::: :::: : ::

Louisiana :
Shreveport .... .
Texas:
Abilene . ...
Amarillo . .
Austin . ....
Beaumont . . . . . .

385
8,406

LU1mER PRODUCTION

BUILDING PERMITS

No.

January 1 to September 30
1948
1947
10,047
8,993
150,215
135,295

Lumber production in the Southwest and in the Nation
has increased considerably since the war, but the proportion
of the national production in the Southwest appears to have
declined slightly. Texas has tended to produce JUSt under half
of the total output of the five States included in the Eleventh
Federal Reserve District, with Louisiana producing practically
as much as Texas. Stocks of lumber at the mills, concentration yards, and retail yards of the Nation have been increasing
gradually; and with the seasonal winter slack in construction
in most parts of the country, there are prospects of an easing
of the supply situation for lumber as well as most other construction materials.

1939

City

1948
1,168
18,961

Texas has cement plants at Dallas, EI Paso, Fort Worth,
Houston, San Antonio, and Waco, which assures supplies for
the large centers of construction activity in the State. The
abundance of natural gas for fuel and of limestone, marls, and
clays for raw materials, as well as the expanding markets of
the Southwest, make Texas a very suitable location for cement
production.

SOURCE: F. W. Dodge Corporation.

October 1948

August

3,231 I 25,524 ,827

161

64
8
56
43
28
42
34
33

56

The production of Portland cement in Texas during September was fractionally below the July record, while the figure
for the United States was only 2 percent below the August
peak, Production for the year is expected to total about
13,500,000 barrels in Texas and 200,000,000 barrels in the
Nation, in each case exceeding the high production levels of
1947 and 1942. During the past decade, production capacity
has declined in the Nation, though rising in Texas, with the

~~~~~

-Approximate.

4 .5
3 .8
9.7

B.a.

2. 428. 1

1946
1.3

n.B.
n.a.
n.a.
n.a.

1947

1.4-

n.a.
n.a.
n.a.
n.a.

Jan.-Aug,
1948

n.a.
n.a.

n.a.
D.a.
D.a.

n.B.

n.a.

n.a.

34 .9

36 .6

24 . 7

3.2
3 .8
3 .8
3 .6
n.a.
n.a.
n.8.
n.a.
8. 5
D.a.-Not available.

n.s.
D.S.

n.B.

SOURCES: United. States BUN:au of the Census.
National Lumber Manufacturen Association.

The daily average production of crude petroleum during
October reached new peaks at 2,752,000 barrels in the Eleventh
Federal Reserve District and at 5,574,000 barrels in the Nation.
Production has edged up in most months of 1948 but at a
slower rate than in 1947 because the industry for some time
has been producing at virtual capacity and increases in production have depended largely upon the completion of new
producing wells. Nevertheless, production for the first ten
months of 1948 exceeded that for the corresponding period
of 1947 by 11 percent in the District and 9 percent in the
Nation. The expansion in refinery operations has about kept
pace with that of crude oil production, as is indicated by the
fact that crude oil stocks, though rising, were at the end of
October only 3,600,000 barrels higher than a year earlier. The
industry has made excellent progress in accumulating supplies

206

MONTHLY BUSINESS REVIEW

of refined products in an effort to prevent the development
of shortages this winter. At the end of October, supplies of
refined products were substantially larger than a year ago, ranging from 11 percent more for gasoline to 41 percent for residual
fuel oil. In view of the favorable stock situation, it is believed
that the winter demands can be met if, as now seems likely,
the problems of geographical distribution and local storage can
be solved.
ORUDE OIL PRODUOTION-(B",.I.)

October 1948

Tot.nl

Dliily llvg.
production

Increase or decrease in daily
average production from

Area.
produ otion
September 1948 October 1947
Texas:
District I .
882,850
28,479
- 287
4.076
2
5,569,300
170,655
88
17,682
3. .
15,626,500
504,081
9.473
11,423
4.
7,878,450
254,143
3,560
- 6,364
5
1,586,300
51,171
1,921
10.118
6 ........
0,358,700
301,894
- 7.248
- 17,909
Other 6 .
3,776,000
121 ,806
1,706
3.506
7b.o
1,782,550
57,502
4,919
13,781
7c.....
1,480,700
47,7M
2.922
7.104
8....
22,586,700
728,603
20,828
82,908
9..
4,412,700
142,345
2,345
6,416
10.. ............
2,741,600
88,439
1.607
-70~
Total Texas.
77,682,350
2,505 ,883
41,925
132.933
New Mexico......
4,124,750
133,056
1,123
16,929
North Louisiana.. . .......
3,510,350
113,237
-800
10,126
Totli Eleventh District
85,317,450
2,752,176
42,248
168.988
Outside Elc\'enth District. . .
87,163,150
2,821,392
165,619
161.740
Unit.ed States.. . ............ 172,780,600
5,573,568
197,767
320,728
BOUnCE: i:"Llmated from American Petroleum Institute week1y reporte.

Drilling operations, as measured by well completions, have
been on a large scale this year despite the shortages of pipe and
other materials. The 36,000 well completions expected in the
United States will be the largest number on record, while the
13,600 completions in this District will be the highest since
the 1937 peak.
NUMBER OF OIL AND GAS WELLS COMrLETED

Yea<
1920 .• .•.... . . ... . ......
1921-30 (avg.) ...... .....
1931.. ..... . ............
1932 ....................
1933 .. .. . ..... ..........
1934 ................... .
1935.. ............... ...
1936 ....................
1937 ......... . ......
1938 ..............
1939 ..............
1940 ..........
1941. .............
1942 ..............
1943 ..............
194L ......
1945 ..... . . . ... . ........
1946 . . . . . . . . . .
1947 ....................

};~~~;;~p~~~~. i94S:'

United
States
33,911
22,883
12,233
14,910
12,76.1
21,122
20,915
26,167
31,622
26,805
25,419
28,093
29,7i4
16,390
16,862
22,057
23,567
26,321
30,724
36,000
26,396

E leventh
Distriot

n.s.

n.a.
D.9o.
n.8..
n.8..
n.8..
11,915
13,224
15,620
13,0 12
10,468
10,378
10,901
5,479
4,SH
6,725
8.100
8,994
10,828
13,600
10,022

Texas
n.a.
6,352
6,381
9,133
6,559
9,310
11,235
12,024
14,275
11,810
9,325
9.094
9,833
4,688
4.175
6,021
7,229
7,805
9,254
11,500
8.533

Northern
Louisiana
n.s..
n.8..
n.8..

n."
n.8..

n.8..
343
648
680
622
537
673
791
445
209
288
456
730
1,013
1,500
1,062

August 1945 wartime peak. The growth of demand is now
at a slower rate, so that, as the number of wells in operation
increases, there will be less need for production at any cost
and more attention can be given to conservation practices. The
Railroad Commission of Texas has reduced the daily allowable
production for East Texas by 9,333 barrels, or about 3 percent.
Earlier the Commission had announced that orders we.re being
prepared by which 17 fields, mostly in West Texas, would be
shut down unti!' the 330,000,000 cubic feet of casinghead gas
produced daily in those fields could be saved. The daily allowable crude production of the 17 fields h .. been 397,000 barrels,
or about 15 percent of the State total and 7 percent of national
production. However, arrangements have already been made
for the utilization of the gas from one of these fields and
similar plans may be announced for others. In the period
ahead, the installation of additional injection systems, the
completion of natural gasoline plants now planned or under
construction, and other means of utilizing the gas are expected
to decrease the practice of flaring,
After some hesitancy in July and August, nonagricultural
employment in Texas showed a strong upward tendency in
September and October, with further gains expected during
the last two months of the year, according to the Texas Employment Commission. The mid-September total of 2,301,600
represented a one-month rise of 15,700. Nonmanufacturing
employment made a greater proportionate increase than did
manufacturing, but only because of the return of teachers to
schools. Retailers also hired many more workers, but employment in construction declined, in part due to labor disputes.
In manufacturing, which accounted for about 17 percent of
all nonagricultural employment in the State, gains occurred
in cotton oil mills and in aircraft, chemical, and other
industries.

New Mexico
n.s..
n.8..
n.9o.
n.8..

n."
n.8..

337
552
665
580
606
611
277
346
257
416
416
419
661
600

m

n.a.-Not a.vailable.
SOUROES: United States Bureau or Mines.

COTTONSEED AND COTTONSEED PRODUCTS

October 1948

_ _ _ Te""' ....,._ _ _August 1 La October 31
This season Last scusou
750,336
728,m
Cottonaecd received at mills (tons) ..
382,8 12
317,294
Cottonseed crushed (LollS)
•..
431 ,7 18
465,309
CottonsccU on hand October 31 (toilS) ..
Production of product3:
114,208
94,188
Crude oil (thousand runds) ..
183,231
149,826
Cnke and meal (tons ........
85,151
70,517
.
.....
Hulls (tons).
128,428
106,044
Linters (running bales) ........
Stocks on hand October 31 :
13,736
14,512
Crude oil (thousand pounds).
30,442
13,029
Cake and meal (tons) ...
24,671
26,363
Hulls (tons) ..............
68,60[)
43,220
Linters (running bales) .. . .

UliitOO
August 1 to
This SCMOIl
3,196,661
.1,414 ,364
1,871,377

Statee--

438,531
640.767
322,680
444,187

335,524
508,117
250,875
341,650

42,795
80,246
70,79B
170,842

55,604
62,021
72,432
104,334

Outober 31
Lnst season
2,486,106
1,101,496
1,484,138

SOURCE: United States Bureau of CeJlsus.

World Oil.

The long-continued expansion of crude petroleum production may soon taper off, with future increases being more
gradual and with some possibility of decline for a time below
present record levels. Both crude production and the demand
for petroleum products have been rising since the war, with
the present levels of both production and refining being about
15 percent above the 1945 average and 11 percent above the

DOMESTIC CONSUMPTION AND STOCKS OF OOTTON-IB.Ie,)

October
1948
CoIl8Umption at:
Texas mills ..........
11,942
United States mills ..
695,887
U. S. stocks-end of month:
in consuming c.:,"i.abm'ts . . . 1,468,500
Public stg. &: comprCSSC3 .. 7,325,729

October
1947
13,827
828,576
1,418, 112
5,098,757

September August 1 to October 31

This season Last season
39,341
37,390
2,270,046
739,139 2,163,758
l i48

16,309

1,282,404
4,1 40,3 19