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MON<IHLGJr
It
BUSINESS
FEDERAL
REVIEW
RESERVE
Vol. 40, No.2
P RESID ENTI AL
In three messages to Congress, the President of the United
States outlined his concept of the current and prospective
economic conditions of the Nation, the course of action to
attain a desired goal of growth and stability, and the estimated
revenue and expenditures of the Federal Government for
the fiscal years 1955 and 1956. Since these messages are of
great importance as indications of the Administration's
program, they are summarized in this article for the readers
of the Review.
The State of the Union
On January 6 the President delivered the State of the Union
Message to Congress. This address stresses the current economic position of the United States and thc course of action
desired in the light of international and internal developments
in 1954. On the international scene, the President sees an
insecure peace with a number of sobering problems, chiefly
tllOse concerning the military and subversive threats of
communism.
America's International Policies
According to the President, "America's course is clear:
We must tirelessly labor to make the peace more just and
durable. We must strengthen the collective defense under
the United Nations Charter and gird ourselves with sufficient
military strength and productive capacity to discourage
resort to war and protect our Nation's vital interests. We must
continue to support and strengthen the United Nations....
We must also encourage the efforts being made in the United
ations to limit armaments and to harness the atom to peaceful use. We must expand international trade and investment
and assist friendly nations whose own best efforts are still
insufficient to provide the strength essential to the security
of the Free World. We must be willing to use the processes of
negotiation whenever they will advance the cause of just and
secure peace to which the United States and other free nations
are dedicated. In respect to all these matters, we must, through
a vigorous information program, keep the peoples of the
world truthfully advised of our actions and purposes .... "
•
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F
DALLAS, TEXAS
THREE
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BA NK
The address advocates an expansion of international trade
to be achieved by facilitating a freer flow of capital and by
DALLAS
February I, 1955
MES SAGE S
reducing trade barriers. However, it empbasizes that, while
our long-term goal is a reduction in armament, a strong military position is a basic requirement at the present time; our
military forces must be kept in balance, and military planning
must be sufficiently flexible to utilize the latest weapons. There
must be a continued stockpiling of nuclear weapons until
world peace is assured.
America's Domestic Policies
In the national picture, the President finds that "tlle economic outlook is good" and recommends a number of policies
designed to implement that outlook. These may be discussed
conveniently in the general categories of resources, farm,
welfare, and labor recommendations.
Resource Policies
In tlle section of the address concerning our natural resources, the President states " ... I believe that the Nation
must adhere to three fundamental policies: First, to develop,
wisely use, and conserve basic resources from generation to
generation; second, to follow the historic pattern of developing these resources primarily by private citizens under fair
provisions of law, including restraints for proper conservation; and, third, to treat resource development as a partnership undertaking-a partnership in which the participation
of private citizens and State and local governments is as necessary as Federal participation."
To achieve these policies, the President notes that " ... the
1956 budget will recommend appropriations to start six new
reclamation and more than 30 new Corps of Engineers projects of varying size. Going projccts and investigations of
potential new resource developments will be continued."
Farm Program
The President notes that there has been a stabilization of
farm income; thus, he hopes to be able to move toward less
restrictive acreage controls. However, he also stales, "Greater
attention must be directed to the needs of low-income farm
families. Twenty-eight percent of our farm operator families
have net cash incomes of less than $1,000 per year_" He indi-
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
18
MONTHLY BUSINESS REVIEW
cates that certain recommendations designed to assure a
steady alleviation of the most pressing problems of these lowincome families will be submitted to Congress at a later date_
The President also indicates that "because drought also
remains a serious agricultural problem, I shall recommend
legislation to strengthen Federal disaster assistance programs_
This legislation will prescribe an improved appraisal of need,
better adjustment of the various programs to local conditions,
and a more equitable sharing of costs between the States and
the Federal Government_"
food and drug laws, and strengthen programs to combat river •
and air pollution.
l
The President states that all Americans should have equal
opportunities to acquire an education but that sufficient facil·
ities are not available. Consequentl y, the President indicates
that he will send to Congress on February 15 a message presenting an affirmative program to deal with the problems of
education, such as the rising student load and the shortage
of classrooms.
Labor
Welfare Activities
In another section of the address, the President reviews the
progress of the Nation in providing for the health, productivity, and well-being of its citizens and states that notable
advances have been made in the past 2 years. He reports that,
in spite of this progress, there are a number of tasks yet to
be accomplished and suggests the following programs to help
fulfill these obligations.
"As part of our efforts to provide decent, safe, and sanitary
housing for low· income families, we must carry forward the
housing program authorized during the Eighty.third Congress. We must also authorize contracts for a firm program of
35,000 additional public housing units in each of the next two
fiscal years. This program will meet tbe most pressing obligations of the Federal Government into the 1958 fiscal year
for planning and building public housing. By that time, the
private building industry, aided by the Housing Act of 1954,
will have had the opportunity to assume its full role in providing adequate housing for our low·income families."
The address states that there are two fundamental problems
connected with medical services to citizens of this countrynamely, the high costs of such services and the gaps and shortages in these services. The President indicates that:
"By special message on January 24, I shall propose a coordinated program to strengthen and improve existing health
services. This program will continue to reject socialized med·
icine. It will emphasize individual and local responsibility.
Under it, the Federal Government will neither dominate nor
direct, but serve as a helpful partner. Within this framework,
the program can be broad in scope.
"My recommendations will include a Federal health ;einsurance service to encourage the development of more and
better voluntary health insurance coverage by private organizations. I shall also recommend measures to improve the
medical care of that group of our citizens who, because of
need, receive Federal-State public assistance. These two proposals will help more of our people to meet the costs of llealth
.
serVICes. "
Moreover, to fill in the gaps and shortages in these medical
services, the President intends to propose a number of measures to combat mental illness, improve services for crippled
children, give better protection to consumers through pure
Finally, the President presents his recommendations with
respect to both general labor conditions and changes in Federal employment conditions. In discussing general labor conditions, the President recommends three major legislative
actions.
"First, in the past 5 years we bave had economic growth
which will support an increase in the Federal minimum wage.
In the light of present economic conditions, I recommend
its increase to 90 cents an hour. I also recommend that many
others, at present excluded, be given the protection of a minimum wage.
"Second, I renew my recommendation of last year for
amendment of the Labor-Management Relations Act of 1947
to further the basic objectives of this statute. I especially
call to the attention of the Congress amendments dealing with
the right of economic strikers to vote in representation elections and the need for equalizing the obligation under the Act
to file disclaimers of Communist affiliation.
"Third, the Administration will propose other important
measures, including occupational safety, workmen's compensation for longshoremen and harbor workers, and the 'eighthour laws' applicable to Federal contractors. Legislation will
also be proposed respecting nonoccupational disability insurance and unemployment compensation in the District of Columbia."
In the field of Federal Government employment, the President speaks of his January 11 recommendations for " ... a pay
adjustment plan for civilian employees outside the postal field
service to correct inequities and increase individual pay rates,
... voluntary health insurance on a contributory basis for
Federal employees and their dependents .... , and a modern
pay plan, including pay increases, for postal field employees."
Beyond tbese changes in pay, the President requests more
adequate training programs and improvements in survivor,
disability, and retirement benefits for Federal civilian and mil·
itary personnel.
Budget Message
The annual Budget Message of the President was presented
to Congress on January 17. This Message contains the Administration 's estimates of revenues and expenditures for the
fiscal year 1956, as well as estimates for the current fiscal year
MONTHLY BUSINESS REVIEW
1955. The President indicates that three hasic considerations
of national policy were followed in preparing the budget.
"First, we must defend our priceless heritage of political
liberty and personal freedom against attack from without and
undcrmining from witlun . ... Second, the Government must
do its part to advance human welfare and encourage economic
growth with constructive actions, but only where our people
cannot take the necessary actions for themselves .... Third,
we must maintain financial strength .... "
The President indicates that, in the budget for fiscal 1955,
total reveuues probably will reach S59,000,000,000 and total
cxpcnditures $63,504,000,000, resulting in a budget deficit
of . 4,504,000,000. In contrast, the estimates for fiscal 1956
show revenues of $60,000,000,000, expenditures of $62,408,·
000,000, and a budget deficit of $2,408,000,000. Thus, it is
expected that revenues will rise $1,000,000,000, while ex·
pendi tures will decline $1,100,000,000.
In the Budget Message, the estimated costs of Government
operations ill 1956 are explained in seven major sectionse.g., national security; commerce and manpower; natural resourccs; agriculturc; welfare, health, and education; veterans' services and benefits; and debt interest and general government.
Nati ona l Secu rity
The national security programs are expected to cost $40,500,000,000, or about 65 percent of the total budget. The
Defense Department is expected to spend $34,000,000,000,
with thc Air Force spending $15,600,000,000; the Navy, $9,700,000,000; and the Army, $8,800,000,000. The remaining
86,000,000,000 is to be divided among the mutual security,
atomic energy, and materials stockpiling programs.
In presenting the defense budget, the President notes that
"under our current plans, the number of military personnel
is scheduled to be reduced from the present level of approximately 3.2 million to about 3 million by June 30, 1955, and
to something over 2.8 million by June 30, 1956 . . .. " However, military personnel costs will remain nearly the same as
in fiscal 1955, primarily because of "the added costs of the
pay increase and other benefits proposed in my special message." The President further reveals that the projected military security expcnditures place a greater emphasis upon air
power and give a high priority to the strengthening of our
continental defense system.
In fiscal 1956, the United States will deliver about the same
amount of military equipment to friendly nations as in 1954
and 1955, but there will be a nunlber of ncw atomic energy
plants placed into operation. The President indicates that
"I he dollar value of our stockpile of strategic materi~ls is
expected to reach 78 percent of the minimwn objcctive, compared with 58 percent in 1954."
Comme rce and Manpower
This group of expenses is estilllated to total $2,200,000,000,
or $364,000,000 below the 1955 figure. The change is the
19
result of a number of increases and decreases in various Government activities projected for 1956. The President states,
" In addition to selling the Inland Waterways Corporation and
ii'luidating the Reconstruction Finance Corporation, we have
already sold or shut down a number of Department of Defense
plants for processing scrap and manufacturing paint, clothing, and chlorine." On the other hand, provision is made for
extending unemployment insurancc, and the Presidcnt proposes " ... that we start a lO-year program to modernize the
interstate highway system .•.. "
One of the largest items of expenditure in this section is
the expenses assigned to navigation aids and facilities. Included in these expenses is the Saint Lawrence Seaway development, of which the Message says, "Almost one-quarter
of the work is scheduled for completion by the end of the fisc al
year 1956." Also included is the Corps of Engineers program
for rivers and harbors, within which " .. . 14. new navigation
projects and the resumption of one project previously suspended are recommended in the fiscal year 1956."
Nalu ral Resources
III the Budget Message, the conservation and development
of natural resources is estimated to cost $953,000,000, compared with $1,100,000,000 in the current fiscal year_ The
President indicates that "about two-thirds of the net expenditures in 1956 will be for flood control, irrigation, power, and
multiple-purpose river basin development." The remaining
one-third is to be spent for the operation and development of
such public responsibilities as national forests, parks, and
public lands.
The largest segment of the expenses for natural resources
is to be spent by the Corps of Engineers for present floodcontrol programs and multiple-purpose projects, for which
the fiscal 1956 budget allows $363,000,000. The Message indicates that the Corps of Engineers and the Bureau of Reclamation have under way 152 projects, 37 of which are expected to
be completed in 1956.
Agriculture
Net budget expenditures fOT agriculture and agricultural
resources are estimated at $2,300,000,000, or $871,000,000
less than the estimated total for fiscal 1955. Of this total, the
Commodity Credit Corporation price support, supply, and
purchase programs are cstimated to cost $968,000,000, or
nearly $1,000,000,000 below the previous year.
As stated by the President, the reasons for this decline are:
"First, continuation of acreage restrictions, ... and lower
support levels on some comlllodities are expected to result in
a lower volume of price support loans. Second, receipts from
sales of such commodities as cotton, corn, and wool are ex·
pected to increase as our efforts to find new and expanded
markets for agricultural products hegin to show results ."
The President indicates that activity under the International Wheat Agreement is expccted to expand, with larger
20
MONTHLY BUSINESS REVIEW
exports resulting. In addition, the CCC is expected to sell
wheat for export at competitive world prices.
Welfare, Health, and Education
Total expenditures in fiscal 1956 for welfare, health, and
education are estimated at $2,300,000,000, or $4.,000,000
less than in fiscal 1955. While the President intends to give
the details of his program in a future message to Congress,
the outline of the program is available in the Budget Message.
A major item is the promotion of public health, about which
the President says, "I am recommending ... that the Atomic
Energy Commission be authorized to build a new medical
research center containing a nuclear reactor designed spe·
cifically for medical research and therapy." He also recommends legislation which includes health reinsurance-"the
best method yet proposed for encouraging adequate health
insurance coverage for our people."
Public assistance and other welfare aids and services are
mentioned as items in this total expenditure. The President
speaks of two major amendments to pubHc assistance legislation, one of which would limit to 50 percent the Federal share
of old-age assistance, resulting in " ... a more equitable sharing of costs between the State and Federal governments. The
other amendment would encourage States to help needy individuals to become self-supporting or to care for themselves at
home." Other welfare aids and services include the school
Innch program, expected to be the largest in the Nation's
history, and the enlarged vocational rehabilitation program.
Veterans' Services and Benefits
The Budget Message includes an estimated $4,600,000,000
for veterans' services and benefits- an in crease of 5 percent
over the amount budgeted for fiscal 1955. The President
states that " ... the long-run outlook under present laws is
for continued large increases in payments to veterans." The
basic reasons for the expected rise are threefold. First, there
has been a large increase in the present and potential veteran
population, which now totals more than 24.,000,000 persons.
Second, nearly 3,000,000 World War I veterans are reaching
age 65 and, thus, are qualifying for pension benefits. Third,
the scope and liberality of benefits have increased substantially.
In presenting the estimated expenditures for veterans'
services and benefits in fiscal 1956, the President notes that
"our veterans' pension and compensation laws, in particular,
are in need of constructive reconsideration ....The over-all
system of statutes and regulations governing eHgibiHty and
payment rates for service-connected compensation has not
had a fundamental review for many years." The President
then continues that he is ". _ . appointing a Commission on
Veterans' Pensions to study the entire structure, scope, and
philosophy of our veterans' pension and compensation laws
in relation to each other and to other Government programs."
Debt Interest and General Government
The expenditures for this group are estimated at $8,000,000,000, of which $6,400,000,000 is reserved for debt interest.
The estimate for debt interest for fiscal 1956 shows a decline
of $180,000,000 from the fiscal 1955 level. This decline is attributed by the President to decreasing interest rates during
the past 12 months, together with a change in the timing of
interest payments.
The net expenditures for general government are estimated
in the Message at $1,600,000,000, or $344,000,000 above
those of fiscal 1955. This increase is expected because of
" ... (a) the proposed resumption of payments to the Civil
Service Retirement Fund for the Government's share of the
cost of current benefits for retired Federal civilian personnel
and (b) substantially higher payments arising from claims
against the Government."
Economic Report
The Economic Report of the President, delivered to Congress on January 20, is in part a reiteration of the ideas, proposed legislation, and economic problems discussed in the
State of the Union Message and the Budget Message. However,
the main sections of the Economic Report concern the readjustment period of 1953-54., the recovery period currently
under way, and the potentials for future economic progress.
The Readjustment Period
According to the Report, the basic causes of the readjustment pedod of 1953-54 were the decline in defense spending
and the liquidation of inventories. "The primary contractive
factor during the latter part of 1953 was the adjustment of
inventories," although "this role shifted to defense spending
after the turn of the year."
Reflecting the magnitude of the decline, the Report shows
that, from the second quarter of 1953 through the first quarter of 1954, the combined decrease of inventory and defense
spending was at an annual rate of $17,000,000,000. This decrease was immediately reflected in production, employment,
the flow of income, husiness loans, imports, and many other
sectors of economic activity. It is noted that "the over-all
decline of economic activity was small, hut its impact was very
uneven, and some industries and localities suffered seriously_"
The Report slates that, toward the end of 1953, signs of
improvement began to appear in financial and investment
markets, and these indications multiplied after the turn of the
year. Moreover, "by the spring of 1954, the decline in production had abated and the economy stabilized."
It is emphasized that "the transition from contraction to
recovery is an intricate economic process, worked out over
tinle, whose character is never disclosed by over-all measures
of economic activity." The stability of the gross national
product during much of 1954 concealed the fact that the number of declining industries in the area of manufacturing
progressively diminished. Further, it concealed the change
taking place in the Nation's stream of expenditures, where
Federal spending between the first and third quarters of 1954
declined at an annual rate of $7,000,000,000, while other
MONTHLY BUSINESS REVIEW
major categories of expenditures increased at approximately
the same rate.
The President continues his review of 1954, stating that "by
the early autumn of 1954, the forces of recovery had gathered
sufficient strength to lift total production and employment,
despite a continued drop of Federal spending." When the
year ended, the traces of contraction had not yet been erased,
but a general economic recovery was in process.
The Economic Report then questions: "Why did the economic setback of 1953-54 prove so mild on an over-all basis,"
and "Why did our total national output of goods and services
decline no more than 4 percent?" These and other questions
on the readjustment period are considered, and statements
are made concerning some of the factors contributing to the
result, including the following.
"Consumers not only maintained their spending at a consistently high level, but reduced their rate of saving during
1954. Businessmen kept up their capital expenditures at a
high rate, increased the flow of dividends to stockholders, and
intensified their selling efforts. Builders and real estate developers stepped up their operations. Trade unions conducted
their affairs with an eye to basic conditions and with a
sense of responsibility. Farmers and their organizations recognized the danger of piling up ever larger surpluses. Commercial banks and other financial institutions made ample
supplies of credit available on liberal terms. States and localities carried out large and expanding programs of school, hospital, and road construction. And the continuing recovery of
Western Europe helped to augment our exports and to bolster
the prices of internationally traded raw materials."
The Report indicates that the Federal Government also
contributed significantly to the process of recovery. It influenced the economy by deliberately pursuing monetary, tax,
and expenditure policies which inspired widespread confidence on the part of the people, thereby encouraging them to
act in ways that were economically constructive.
The Present Economic Situation
On the current economic position, the President states that
the recovery is widespread and already has made up half of
the decline that had occurred in industrial production. The
rate of inventory liquidation has sharply abated, and soon
we are likely to experience some rebuilding of inventories.
Moreover, he indicates that the projected dccline of Federal
spending is less than in the past 2 years, with state and local
expenditures likely to continue to expand and more than offset any future decline that may occur in Federal expenditures.
In considering the high level of residential construction
activity in 1954 and the prospects for its continuance, the
Report indicates that the recent increase of housing starts
and the rush of applications to Federal agencies for mortgage
insurance or guarantees promise that home building will
continue to mount for some time and that the recent high
level of commercial building contracts probably will mean a
high level of expenditures for this type of construction over
21
the coming months. However, the Report is somewhat less
optimistic about spending for new plant and equipment, which
is characterized as uncertain. Neverthelees, it indicates that
risin g orders for machinery-to say nothing of new plans
and revisions of old plans that are likely to accompany continued recovery- give a basis for expecting that this broad
category of expenditures soon will join the general economic
advance. The spirited behavior of retail sales in recent months
has borne out earlier surveys of consumer attitude, and a
further expansion of consumer spending may be expected as
economic recovery continues.
Beyond these immediate signs of business recovery, the
Report notes that new firms are being established at an increasing rate; plans are being made for new homes, schools,
and commercial and industrial projects; and the President's
highway building plan will create economic opportunity in
many directions.
The Future Economic Situation
With all these signs of economic progress, the President is
concerned with the possibility of recurrent inflationary or
speculative activity. He states that it is essential to keep a
close watch on financial developments so that continuing
economic recovery will not be jeopardized by overemphasis
on speculative activity.
The President states that there is a possibility of difficulties
in labor-management relations and the stock market. Industrial disputes have heen morc frequent in periods of expansion than in periods of contraction, and such disputes
sometimes have serious economic repercussions. Moreover,
" ... activities which involve the discounting of a long future,
as in the case of home purchases or the pricing of corporate
shares, may be carried to excess in the course of a business
expansion." The recent increase of stock margin requirements
by the Federal Reserve Board demonstrated a watchful attitude and a responsibility on the part of the Government to
assure balanced economic growth.
For the future, the President indicates that there are several basic economic tenets which arc to be followed by his
Administration.
First, competitive markets rather than Government decrees
are, as a rule, the most efficient instruments for organizing
production and consumption.
Second, a free economy has great capacity to create jobs
and incomes if a feeling of confidence in the economic future
is widely shared by investors, workers, businessmen, farmers,
and consumers.
Third, the Government creates a climate favorable to business when it encourages private initiative, curbs monopolistic
tendencies on the part of either business or labor, avoids encroachment on the private sector of the economy, and carries
out as much of its own work as is practicable through private
enterprise.
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MONTHLY BUSINESS REVIEW
Fourth, the Government generates confidence when it reo
stricts tendencies toward recession or inflation and does this
by rel ying largely on indirect means of influencing private
behavior rather than on direct controls over people, industries, and markets.
Fifth, the Government contributes to economic growth
when it works with states in promoting scientific research
and in providing public facilities, such as highways, hospitals,
harbors, and educational institutions, on which the expansion
of the private economy heavily rests.
Finally, the Government strengthens the foundations of the
economy when it widens opportunities for its less fortunate
citizens and, working in cooperation with states and localities,
helps individuals to cope with the hazards of unemployment,
illness, old age, and blighted neighborhoods.
The President states that, in view of improved economic
conditions, a continuation of rapid economic growth may be
reasonably expected by following these basic tenets. Among
the more favorable economic factors, he recognizes that our
population is rapidly increasing, educational levels are rising,
work skills are improving, incomes are widely distributed,
consumers are eager to improve their living standards, husinessmen are actively engaged in starting new enterprises and
expanding old ones, the tools of industries are multiplying
and improving, research and technology are constantly open.
ing up new opportunities, and our public policies generally
encourage enterprise and innovation.
Recomm endations
The remaining major section of the Report is devoted to the
President's recommendations on policy and legislative action.
The Report contains 33 such recommendations, most of which
are either mentioned or discussed in the previous messages.
However, a few need further elaboration as major items affect·
ing the economic outlook. These may be grouped under the
headings of taxes and the debt limit, labor, and construction.
In the first group, three recommendations are important.
First, the President proposes to postpone the lowering of the
corporate income tax and excise taxes which is scheduled for
April L Second, he recommends that the tax rate on corporate
income from forei gn sources be reduced by 14 percentage
points. Third, in view of the deficits expected, a n increase in
the statutory debt limit is requested to permit greater flexi·
bility in the management of Federal finances.
The second group of proposals is important in its implica.
tions to wage costs and labor.management relations in the
future. The first of these proposals would increase the Federal
minimum wage to 90 cents per hour and extend the coverage of the law to a substantial number of workers now excluded. Second, there are a number of proposals dealing with
fringe benefits, such as unemployment compensation and old·
age and survivors insurance. Each of thesc suggests either an
increase in the benefits to be paid under the programs or an
extension of the coverage of such programs.
Finally, a group of recommendations is made which would
have important consequences in the construction industry.
The President requests that the insurance authorization of
the FHA be increased and that he be given greater latitude
in varying the terms on which home mortgages are under·
written by the Federal Government. The latter action is reo
quested in order to allow the President to adj ust these terms
more realistically to changes in economic conditions.
Anotller important step affecting future construction ac·
tivjty is the recommendation to allow na tional banks to make
conventional real estate mortgage loans with maturities up
to 20 years and to extend the maximum duration of construe·
tion loans. The President also recommends to the states that,
where necessary, they enact legislation to permit the writing
of open.end mortgages. Also , there is a reconmlendation to
authorize the FHA to enter into contracts for 35,000 addi·
tional units of low·rental public housing in each of the next
two fiscal years.
MONTHLY BUSINESS REVIEW
23
REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
Department store sales in
the Eleventh District during the
first half of January were 18
percent above those in the comparable period in 1954. Sales
in December, the largest for any month of record,
were 7 percent above the December 1953 level.
Department store inventories at the end of December were 2 percent above those of a year earlier.
Recent snows and rains provided needed moisture in many parts of the District, but the condition
of winter wheat in the High Plains of Texas and
ranges in the southwestern third of the State is still
poor. Winter vegetable harvest is in progress, with
Texas production in 1955 indicated at 4 percent
below the 1954 crop. The value of principal crops
grown in Texas in 1954 is estimated at 5 percent
higher than a year earlier.
District crude oil production rose substantially in
January to mark the third successive monthly increase. Refinery crude runs, after reaching an alltime high in December, showed a further gain in the
first half of January. Texas and Louisiana allowables
for February will be approximately the same as in
January, except for new production.
Nonagricultural employment in the District states
during December established a new record. Manufacturing employment was about 1 percent below
the December 1953 level.
Department store sales in the
Eleventh Federal Reserve District,
after reaching record proportions
during the pre·Christmas shopping
season, have continued at an unusually strong pace. Sales in the 2 weeks ended J auuary 15
were 18 percent higher than in the comparable period a year
ago. This heavy post· Christmas buying has been caused partially by the extensive "clearance" and "white" sales carried
on by department stores.
Final figures for December indicate that daily average
sales of department stores in the District rose 60 percent above
November and were 7 percent above December 1953. Total
sales for 1954 were almost equal to those for 1953, despite
the 5·percent decline recorded in the first half of the year.
Sales during December in most major departmental groups
showed seasonal gains over November and registered moderate to substantial increases over a year earlier. The principal gains were made by the record sales of homefurnishings, small wares, and women's and misses' ready-to-wear
apparel. Compared with year·earlier fi gures, sales of homefurnishings were up 12 percent; small wares, 11 percent; and
women's and misses' ready·to·wear apparel, 10 percent. Other
departments showing increases were household textiles and
women's and misses' ready·to·wear accessories, both up 3
percent, and men's and boys' wear, up 4 percent.
Tnstalment sales at department stores, which increased
steadily during the last half of 1954, rose 46 percent during
December and were 28 percent greater than the year.earlier
figure. Instalment sales represented 10 percent of total store
sales, compared with 8 percent in December 1953.
RETAIL TRADE STATISTICS
(Percentcge change)
NET SALES
The value of construction contract awards in
December rose 24 percent above November and
38 percent above December 1953. Nonresidential
awards were valued 3 percent above those of a
year earlier.
~
Gross loons of the District's weekly reporting
member bonks rose 1.3 percent during the 5 weeks
ended January 19, reflecting principally increases in
loons on securities and loons to consumers. Total
assets decreased 1.0 percent, primarily because of
declines in investments and in cash assets. Demond
deposits declined 1.2 percent, and time deposits
rose 2.7 percent.
STOCKS'
Dec. 1954 from
Dec. 1954 from
line of trade
by area
OEPARTMENT STORES
Totcl Eleventh District ••••••• •• ••••
Corpus Christi ••••• • • • •••••• • ••••
Dallas ••• • • • ••••••• ••• •••••••••
EI Paso •• • •••••••••••••••••••••
Fori Worth •••••••••••••••••••••
Houston •••••••••••• •• •• •• ••••••
Shreveport, La ....... .. . . ........
Waco •••••• • ••••••• • • ••• ••••••
Other cities ......... . .... . . . ....
fURHITURE STORES
Total 8eventh District •• • • • •••••• • •
Austin •••• • • • • •• •• •• •• •• • ••• • • •
Dallas •••••• • • • •• •••••• ••••••••
Houston •• •• ••••••••••••••••••• •
Port Arth",r ••• •••••••• • •• ••• • •• •
San Antonio • •••• • ••• •• • •• • ••• • •
Other cities • •• • ••••• • ••• •••••• ••
HOUSEHOLD APPliANCE STORES
Total Eleventh District ..... ... .....
Dallas ••• •• ••• • ••••••••• •• • • •••
1
Stocks at end of month.
n,a .-Not available.
D.c.
1953
7
12
12mo.19S4
compo with
12 mo. 1953
1954
Nov.
60
76
62
11
n.a.
n.a.
7
6
3
8
3
56
56
58
74
58
15
5
19
31
16
6
3
33
45
31
20
35
38
46
-24
4
1
-15
De..
Nov.
1953
1954
0
3
1
2
10
5
-17
-17
-16
n.a.
n.a .
-1
0
-1
1
-3
n.a.
7
-6
7
-1
2
-20
-19
-21
-16
-14
4
-10
15
18
17
-1
-3
-8
-6
7
-5
0
-4
-5
2-4
MONTHLY BUSINESS REVIEW
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1947-49
Texas and five Southwestern States
UNADJUSTED
Dec.
Area
Nov.
CROP PRODUCTION
= 1001
ad.
(In thousands of bushels)
ADJUSTED'
Dec.
1954 1954 1954 1953
Dec. Noy. Oct. Dec.
1954 1954 1954 1953
TEXAS
SALES-Daily average
Eleventh DIstrict. •••.•••• •••
225
Dallas .•.....•.•.••••.•••• 226
HOulton . • ..•... •.••••... .. 251
STOCKS-End of month
Eleventh Dlstrlc:t •••••••• •••• 119p
FIVE SOUTHWESTERN STATESI
Average
1943·52
Average
147
146
168
143
135
131
156
144
210r
203
238
117r
134
135
149
130
127
150
131 p 129
129
122
158
132
125
122
141
128r
1 Adjusted for leolonal variation.
r-Re't'ised.
p-Prelimlnary.
Most department store managers followed conservative
inventory policies during 1954, even though they increased
inventories in line with the rising sales volume in the last
quarter of the year. Although stocks were reduced approxi.
mately 17 percent during December, at the end of 1954 they
were 2 percent higher than on the same date a year earlier.
Total inventories of all types of department store merchandise
at the end of December were 1.44 times December sales, com·
pared with December ratios of 1.54 for 1953 and 1.47 for
1952.
In anticipation of a continued strong consumer demand in
the first quarter of 1955, department stores increased new
orders for merchandise during the latter part of 1954. Orders
outstanding at the end of December were 7 percent higher
than on the same date in 1953 but were down seasonally 24
percent from November.
Sales at reporting furniture stores in the District during
December rose seasonally 33 percent above November and
were 15 percent above December 1953. End-of-year inventories were 4 percent above year· earlier figures but were down 5
percent from November_
Light to heavy rains and snow
fell over many parts of the District
during the last week in December
and the first part of January. Precipitation was received in much of
the Edwards Plateau, northcentral, eastern, and coastal
prairie sections of Texas and in southwestern New Mexico,
benefiting small grains, legumes, and pastures. Less effective
amounts of precipitation fell in the High Plains and southwestern third of Texas and in eastern New Mexico.
Conditions in the major wheat-producing regions in the
northern High Plains of Texas and in eastern New Mexico
have continued to deteriorate. As a result of poor wheat con·
ditions, cattle are still being moved off dry-land wheat pastures
in the High Plains.
Ranges in Texas on January 1 were in the poorest condition
for this time of year since January 1, 1935, according to the
United States Department of Agriculture. The condition of
Tcxas range cattle and calves was reported as slightly worse
than a month earlier, in spite of increased supplemental feeding. The condition of sheep and lambs on January 1 showed
no change from the previous month.
Crop
CoHon' .• •. ... ..
Corn ...... . ....
Wheat •........
Oats •. •. . . ....•
Rico' • . .........
Sorghum groin •••
PeonuIs 4 • • • •••••
Flaxseed ••.•... •
Pecans ...•.....•
Irish potatoes ...•
Sweet potatoes. .•
Hay, all' ••......
1953
1943·52
1954
4,317
33,B74
23,035
39,150
15,068
55,198
179,400
868
28,000
2,484
2,550
1,705
3,239
51,266
57.221
26,309
10,162
79,379
282,635
819
32,465
3,818
4,047
1,546
5.945
52,047
102,895
65,737
31,116
130,950
149,225
676
47,000
1954
3,920
33,184
30,894
41,354
16,120
117,3 86
105,875
578
22,500
2,033
1,350
1,389
1953
6,957
52.991
4,791
91.286
136.804
95,154
54,1.41
27,752
.46,983
20.839
94.745
395,214
1.288
63.990
66,156
299,890
868
79.600
4,815
10,374
4,476
6,104
11,703
8,303
13.894
4.740
5.056
1 Arizona, louisiana, New Mexico, Oklanoma. and Tuos.
In thollSonds of bole,.
• In thousands of bag" 100 pounds each.
, In thousands of pounds.
, In thousands of tons.
SOURCE: United States Department of Agriculture.
1
The number of sheep and lambs on feed on January 1, 1955,
in the District states-except Louisiana, which was not reported-was practically wlChanged from January ~, 1954,
according to the Uni ted States Department of Agriculture.
The number on feed on January 1, 1955, is estimated at 308,OOO-only 1,000 head more than the estimate on the same date
in 1954. Iucreases of 21 percent and 38 percent, respectively,
for New Mexico and Arizona were offset by a decrease of 33
percent for Oklahoma. The number of sheep and lam?s on
feed in Texas remained unchanged from a year ago, whIle the
total in the United States was down 4 percent.
The United States Department of Agriculture estimated
the total value of principal crops grown in Texas in 1954 at
$1,305,772,000, which is 5 percent higher than the 1953 production value of $1,238,715,000. The sharp increase in sorghum grain production, coupled with only slightly lower
prices for this crop, was responsible for a major portion of
the increased valuation of crops.
Crops were produced on 25,642,000 acres in Texas in 1954,
which is 10 perccnt greater than the 1953 harvested acreage
of 23,343,000 acres. Smaller acreages of cotton, flaxseed,
sorghum forage, hay, some seeds, peanuts, and potatoes were
more than offset by larger acreages of sorghum grains, other
FARM COMMODITY PRICES
Top Prices Paid in local Southwest Markets
Commodity and marlcet
Comparable Comparable
Week ended
week
week
Unit Jan. 20, 1955 last month
lost year
conON, Middling 15 / 16-inch, DoUos • • • ••
WHEAT, No.1 herd, Fort Worth .•..• . . •..
OATS, No.2 white, Fort Worth .•. • . .. ...•
CORN, No.2 yellow, Fort Worth • .• ...•..
SORGHUMS, No.2 yellow, Fort Worth • •••
lb.
bu.
bu.
bu.
owl.
~3.~aH~~~(ST~~:S.~:i~~: F~rt' W~ih: ::
cwt.
SLAUGHTER CALVES, Choice, Fort Worth .. .
STOCKER STEERS, Choice, Fort Worth •••••
SHORN lAMBS, Choice, Fort Worth • ••••••
BROilERS, south Texes. .. ••....••••••••.
WOOL. 12-mo;'ltM, w.st T.xes ••••••••..•
MOHAIR, kid, west Texes ••••........•..
1 Cleen basil..
t No sales reported.
cwt.
owl.
<"".
owl.
lb.
lb.
lb.
$
.3355
2.723,4
1 .0 1~
1.82~
2.71
$
.3380
2.70*
I.O.4!A
1.87Y2
2.75
18.50
26.00
21 .00
22.00
19.00
25.00
20.00
21.00
19.75
.25
IB.OO
.20
11.70
11.65
(')
1.00
$
.3295
2.71~
1.08~
1.821,4
2.97
26.50
24.00
20.00
21.00
19.00
.25
(' 1
1.02
MONTHLY BUSINESS REVIEW
LIVESTOCK RECEIPTS
(Number)
FORT WORTH MARKET
December
Class
December
1954
195 3
Cottle . . . • ..... •
57,115
2 1,782
52,2 15
47,543
7 3,9 20
2 9.198
44,522
4 3,563
Calves .... .. .. . .
Hogs •..... • .• .•
Sheep .... .. .. . .
SAN ANTONIO MARKET
Novemb er
Dece mbe r
D ecl!lmbe r
1954
195 4
1953
1954
80,774
29,734
49,59 4
60,353
2 1,06 5
19,172
2,067
1] 4,453
31 ,02 9
26,346
35,44 0
3 1,853
17,983
2,1.41
11 6,3 39
Nove mb er
2S
During the 5 weeks ended Janu.
ary 19, total assets of the District's
weekly reporting member banks declined $56,034,000, or 1.0 percent,
reAecting principally declines of
$51,700,000 in investments and $43,919,000 in cash assets
that were offset only partly by increases in loans and dis·
counts and in other assets.
I Includes gooh.
small grains, rice, commercial vegetables, corn, and other
minor crops.
The United Stales Department of Agriculture estimates
that, as of January 1, the production of winter vegetables in
the Nation in 1955 will be about 5 percent below the 1954
crop but nearly equal to the 1949·53 average. Texas production for 1955 is indicated to be 4 percen t below 1954 but 16
perceut above lhe 5·year average.
On December 14, cotton growers voted approval of market.
ing quotas and acreage allotments on the 1955 cotton crop,
and the Secretary of Agriculture has set the support price at
90 percent of parity. The 1955 upland cotton allotment for
Texas is 7,612,779 acres, compared with 8,719,178 acres in
1954. The allotment for District states was reduced from
11,200,659 acres in 1954 to 9,649,880 acres for 1955. The
1955 acreage allotment for extra·long staple cotton in Texas,
Arizona, and New Mexico is 32,965 acres, which is 13 percent
below the 1954 allotment.
The decrease in investments was weighted heavily by declines in holdings of Treasury certificates of indebtedness
and Treasury bonds, which decreased $34,337,000 and $18,221,000, respectively. The banks increased their holdings of
Treasury notes by $4,597,000, and their investments in other
bonds, stocks, and securities rose moderately.
The rise in gross loans, which amounted to $28,746,000,
resulted primarily from an $18,137,000 increase in loans for
purchasing and carrying securities (other than to brokers
and dealers) and a rise of $14,177,000 in "other" loans,
which consist mainly of consumer borrowings. Both real
estate loans and loans to banks rose moderately, while com·
CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES
Elevenlh Federal Reserve District
(In rhousonds of dollars)
Item
Jan. 19,
1955
11,263
120,826
19,205
430,331
10,965
74,238
132,106
1,109
402,189
15,817
102,689
166,844
12,429
416,154
Gross loans ••.. .. • • • . .•. .• . •.. . • . . . . ... •
Len reserves and unallocated charge·offs ••
2,182,359
22,371
1,919,526
17,067
2,153,613
18,040
Net loans • .•. . ..• ••• .• • . • . . .. • •...••. .•
2,159,988
1,902,459
2,135,573
U. S. TreclSury bills • ........ •• • • . •. .. •.• •• • .
U. S. Treasury certificates of Indebtedness .... . .
U. S. Treasury notes .. .• .... ... .. .. . .• . . .. .•
U. S. Go¥ernment bond, (Inc. otd. obligations) ....
Other securities • •• ••. • •• • ..•......... • •.•..
123.498
107,123
250,115
882,270
229,625
155,898
262,003
199,869
684,375
197,518
129,088
141,460
245,518
900,491
,00
Total Investments • • ••• • • • • •••• •• •• • • • •• ••
Ca sh items in process of colledion •.•. • • .....•.
Balances with banks in the United States •......
Balances with banks in foreign countries • • •• .. ..
Currency and coin .••... •• • • .•• •• .•. .. .. .• •
Reserves with Federal Reserve Bank •. • .. ..•.••
Other assets .•. •• .• •• •.• . • . .. • ...•. . .....•
1,592,631
356,477
463,684
2,364
42,758
607,389
135,676
1,499,663
435,339
550,077
1,564
47,562
625,18 2
111,757
2 DO
TOTAL ASSETS ...... ....... ... .. ... .. .
5,360,967
--5,173.603
1,644,331
364, 844
487.720
2,174
4 8,463
613,390
120.506
LIABIlITIES AND CAPITAL
Demand deposits
Indi¥iduals, partnerships, and corporations .. ..
United States Government •.....•. . ..••.•..
States and political subdi¥isians .•.. ........
Banks in the United States .. .. .. . ......... .
Bonks in 'oreign countries .. . •..• . .........
Cerlifled and officers' checks, ek.•.. .. . •. . ..
2,866,555
50,825
197,267
989,118
14,729
63,262
--4,181;156
---
2,776,411
69,494
230,410
.977,978
10,575
66,200
2,826,799
125,903
178,885
1,0 21,307
14,395
66,825
4,131,068
4,234, 114
633,168
13,370
452
96,191
923
519,202
10,144
450
115,904
1,388
6 12,234
13,369
451
97,861
978
--4,959,007
Other loons
'(If
purchasing or carrying securities.
AGRICULTURAL PRICE INDEXES
1910· 14-100
RCtNT
'"
PER C
.0 0
20
. 00
°17~ ~ RECEIVED BY FARMERS·TEXAS
400
.1
1
1
~""""'''r'''''''''''~'''~~~''''''
O~PRICES
PAID BY FARMERS-UNITED STATES
10 0
I 00
0
19~1
19 5 3
195 4
1955
0
~
On J anuary 28, 1955, rice growers voted in a referendum
, to determine whether they desire marketing quotas and acre·
age allotments on the 1955 rice crop. Secretar y of Agriculture
Benson has set the national rice acreage all otment for 1955 at
J ,S5Y,099 acres, about 25 percent below the United States
planted acreage in 1954..
17~,381
All other loons ••• • •• •• • • • ••• • • • •• •• ••• • • ••
30 o
195~
Commercial, ind\lstriol, and ogrlcultUTol loans .•• . $1,~26,353 $1,298,919 $1,439,680
Loans to brokers ond deolers In securities •••• • •
Loons to banks .. . •.•.••••• . • • • • • • .••.••.••
40
0"c.15,
ASSETS
Reol .stol. loanl •• .• • ••. • •• • . . • • •..• •• ...•
"
Jan. 20,
1954
Total demand deposits ........ .. ....... .
Time de posits
lndividuals, partnerships, and corpora lions • • • •
United Slates Go¥ernment ••.........•.....
Postal savings ... . .. ......... . .......... .
Slates and polilical subdivisions .•.•.... . . . .
Bonks in the U. S. and foreign counlries .•.• . .
Toiol time deposits .. . . . . . . .. ......... . .
744,104
647,088
Toiol deposits .......... . .. . ........ .
Bills payable, rediscounts, etc ..... . . ......... .
All other liabilities ..... ........ . .......... .
Tala I capitol accounts ...... . ........ . ..... .
4,925,860
5,000
74,805
355,302
4,778,156
14,00 0
59,952
3 2 1,495
TOTAL UABIUTIES AND CAPiTAL ........ .
5,360,967
5,173,60 3
227;17~
724,893
29,500
70,587
357,907
5,417,001
MONTHLY BUSINESS REVIEW
26
aged slightly more than in the preceding month and were I
16.5 percent greater than in December 1953.
CONDITION STATISTICS Of All MEMBER BANKS
Eleventh Federal Reserve District
(In millions of dollars)
Dec. 29,
1954
Dec. 30,
1953
Nov. 24,
Other assets e .••••••••••••••••• . ...•.••. .. • .•
53,465
2,67.
511
965
136
1,169
2
357
179
$3,065
2,441
460
1,024
141
1,264
1
340
155
$3,351
2,649
519
1,050
132
1,137
2
352
170
TOTAL ASSETS., . . ........ . ..............
9,500
8,891
9.362
L1A61UTIES AND CAPITAL
Demand deposits of banks ••••••••••••• ••• •••••
Other demand deposits •••••••••• • •••••••••••••
Time deposln ••••••••• • • •••••••••••••••••••• •
1,2 10
6,393
1,140
1,156
6,109
963
1,121
6,394
1,123
Total deposits ••••••••••••••••••••• •• ••.•.••
Borrowing s· •••••••••••••••••••••••••••••••••
Other liabilities••••••••••••••••••••••••••• ••••
Total capital accollnts e ••••••••••••••••••••••••
6,743
43
65
629
6,2S0
0
71
570
6,636
20
79
625
TOTAL LlA6IUTlES AND CAPiTAL..... .......
9.500
~
9.362
Item
ASSETS
Loans (lnd discounts ••••••••••••••••••• •• ••••••
United States Government obligations ••••••••••••
Other '.(urlties •••••....•.•.........•.••...••.
Reserves with Federal Reserve Bank ••••••••••• •• •
Cosh In vClulr e •••••••••••••••••••••••••••••• ••
Salonees with banks in the United States ••••••••••
Salonees with bonks in foreign countries •••••••••••
Cash Items In process of colleclion ••••• • ••••••••••
1954
Debits to deposit accounts at banks in 24 cLtles in the
District rose seasonally in December to $7,761,537,000, up 22
percent from November 1954 and 14 percent over December
1953. Debits in 23 of the cities showed increases over the
preceding month and were unchanged in one city. Reflecting
the increase in total debits, the annual rate of deposit turnover reached 21.1 in December, compared with only 17.9
in the preceding month and 19.6 in December 1953,
On January 4 the Board of Governors of the Federal Reserve System announced amendments to Regulations T and U,
the effect of which was to increase the cash payment required
for purchases of registered stocks from 50 percen t to 60 percent of their market value. The last change in such margin
requirements was on February 20, 1953, when they were reduced from 75 percent to 50 percent.
a-Eatimated.
mercial, industrial, and agricultural loans declined $13,327,000 and loans to brokers and dealers in securities decreased $4,554,000,
Notable changes in the banks' liabilities included a decrease of $33,147,000 in total deposits and a decline of $24,500,000 in bank borrowings. Although the decline in borrowings was similar to the year· earlier trend, the decrease
in total deposits contrasts with an increase of $181,942,000
in the comparable 1953-54 period. The movement in demand
deposits, which declined $52,358,000, resulted from sharp
decreases in United States Government deposits and do·
mestic interbank funds that were offset only partly by ex·
pansion in demand deposits of individuals and businesses,
states and political subdivisions, and foreign banks. The
increase of $19,211,000 in time deposits resulted from larger
deposits of individuals and businesses. Total capital accounts
of the banks declined $2,605,000, as compared with an increase of $1,006,000 in the year· earlier period.
Gross demand deposits and time deposits of District memo
ber banks averaged $7,551,892,000 and $1,131,996,000,
respectively, in December 1954, establishing new record
levels for both categories. Demand deposits of the banks
were 1.7 percent above the November 1954 level and 6.3
percent higher than in December 1953. Time deposits aver·
GROSS DEMAND AND TIME DEPOSITS Of MEMBER BANKS
Eleventh Federal Reserve District
(Averages of daily flgure s. In thou sands of dollars)
COMBINED TOTAL
Oot.
Gross
demClnd
Time
RESERVE CITY BANKS
Gross
demand
Time
COUNTRY BANKS
Gross
demand
TIme
Oec. 1952 •••• $7,090,304 $ 764,739 $3,360,096 $422,356 $3,710,206 $362,363
Oec. 1953 • • •• 7,104,841
971,966 3,453,416 545,675 3,651,423 426,313
Aug. 1954 ••••
6,992,543 1,076,297 3,439,030 600,994 3,553,513 477,303
Sept. 195.4 •••• 7.086,193 1,061,650 3,499,932 600,926 3,586,261 480,924
Oct. 195.4 ..... 7,2S9,916 1,109,374 3,591,134 622,569 3,666,762 466,605
Nov. 195.4 •••• 7.464,379 1,126,793 3,650,354 635,036 3,814,025 A91 ,757
Dec. 1954 •••• 7,551.692 1,131,996 3,667,176 629,546 3,864.7U 502,.448
Effective January 1, the Treasury removed restrictions
against bank ownership of the 211z·percent Treasury bonds
of June and December 1967·72, of which $5,700,000,000 is
outstanding. The purpose of the action was to widen the
market for these obligations, which were the only two issues
of marketable securities that remained ineligible for bank
ownership.
Effective the same date, the Treasury revised its savings
bonds regulations to permit purchases of Series E and H
BANK DEBITS, END -Of-M ONTH DEPOSITS
AND ANNUAL RATE Of TURNOVER Of DEPOSITS
(Amaunh in thousand. of dollan)
DEBITS1
DEPOSITS'
Percentage
change from
City
December
195.4
ARIZONA
19
Tucson • • •••••••••• •• $ 130,298
LOUISIANA
Monroe •.•••••••••••
56,594
12
Shreveport ••••••.•••
236,405
8
NEW MEXICO
31,002
Roswell •• • •••• ..• • , •
20
TEXAS
Abilene •••... •••• • ••
66,760
12
Amarillo ••••••• , ••••
155,317
20
Austin ••••••••••.•••
129,073
12
Beaumont •••••• • •.• •
125,015 -10
In,366
24
Corpus Christi •••• •• ••
17,046
3
Corsicana ••••.••••••
12
DaUas ••••••••••.•.• 2,368.453
250,637
10
EI Paso • • ••• •• ••••• •
679,323
16
Fort Worth ••••••••••
91 ,976
16
Galveston ••••••• • •••
2,161,260
15
Houston ••••.. •••••••
21,336
-1
laredo •••••••.•••••
lubbock •••• ••••••.•
166,095
26
Pori Arthur •• ••••••••
54,626
10
45,362
San Angelo ••••• •••••
16
476,127
San Antonio • •••. •• ••
19
20,641
13
Texarkana ' ... .......
70,166
Tyler •••••.• ••• •••••
17
67,979
6
WecO •.•.. ••••• ••••
100,196
13
Wichita Faltl •••••••••
Totol-24 cities .•••••.• $7,761,537
Annual rate of tumover
Dec. Nov.
1953 1954
14
Dee. 31.
195.4
Dec. D.~ Nov.
1954 1953 1954
91,015
17.A
15.2
16.1
16
12
46,965
167,357
15.2
15.6
14.4
15.0
13.2
lH
6
31,755
11.9
10.3
11.9
0
11
14
1
12
40
26
13
30
20
26
12
13
17
13
16
22
12
6
13
60,310
112,502
119,053
104,727
120,663
22,690
1,0.42,966
135,567
345,879
68,505
1,218,109
19,235
113,393
39,496
47,314
339,004
16,117
S9,625
72,296
111,701
13.4
16.6
13.2
14..4
17.6
9.2
16.6
11.5
17.2
14.2
14.5
15.0
11.0
13.2
15.4
13.7
16.4
16.0
6.9
27.S
21.4
20.9
11.8
20.0
13..4
20.5
15.6
10 .3
15.1
12.2
12.2
1.4.4
10.4
14.3
15.5
12.0
14.5
15.6
6 .6
23.4
21.0
17.9
13.1
16.2
12.1
21.4
14,3
10.3
15.0
11.9
13.3
14.4
10.3
22
54,526,266
21.1
19.6
17.9
12
$
28 •.4-
22.6
23.2
15.7
22.1
13..4
21.1
I Debits to demand deposit accounts of individuals, pa rtnerships, and corporations and
of states and politico I subdivisiOnS.
2 Demond deposit accounts of individuals, partnerships, and corporations and of states
and political subdivisions.
• These figures include only one bank in Texarkana, Texas. Total de bits for aU banks in
Texarkana, Texas-Arkansas. including twa banks locate d in the Eighth District. amounted to
$38,912.000 for the month of December 195 ....
4
MONTHLY BUSINESS REVIEW
27
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
CRUDE OIL. DAILY AVERAGE PRODUCTION
lin thousands of dollars)
(In thousand, of barrels)
Jan. IS,
Item
Jcm. IS,
D&(. IS ,
195 5
1954
1954
Change from
December
Total gold (ertiflcote reserves. . . . . . . . . . . . . .. $
896.601
Oh.:=ounts for member bonks. . •. •.•••• • •• .. .•
2,000
Other dbcounh and advances • . . ... .... . .. ..
U. S. Government securities ................ .
6,267
950,789
Total earning assets ..... . . .••.... • ..... ...
Member bank reserve deposits ...... .. . .. . . .
Federal Reserve notes in ocluol circulation •....
959,056
, ,069, 593
727,835
831.768
o
705
997,078
997,783
1,090,408
723,407
$ 804,153
December
November
December November
1954 1
1953 2
1954 1
1953
ELEVENTH DiSTRiCT ••••..• • • 3,017.9
Texas ..•.. ..•... •• ....• 2,702.9
Gulf Coast . •.•.......•
584.0
West Texas ..•••.....• 1,048.8
East Texas (proper) •••••
215.9
84,1
Panhandle •• , ••.•.• • •• •
Rest of Stat•.••••.•.••.
770.1
Southeastern New Mexico ••
210.9
104,1
Northern Louisiana . ••• ••••
OUTSIDE ELEVENTH DISTRICT. 3,339.5
UNITED STATES ________ __ __ 6,357..4
2,919.9
2,610.5
576.0
977.8
233.8
80.6
742.3
193.9
115.5
3,318.1
6,238.0
2,960.9
2,648.8
571.9
1,027.0
210.6
84.2
755.1
207.5
104.6
3,278.6
6,239.5
98.0
92.4
8.0
71.0
-17.9
3.5
27.8
17.0
-11.4
21..4
119.4
Area
1954
14,000
8,115
977,963
1,000,078
1,002,441
751,315
bonds by "personal trust estates," The annual purchase limit
of $20,000 of each series that applies to an individual owner
also will apply to a trust estate, regardless of the number of
beneficiaries,
On January 11 the Federal National Mortgage Association
accepted subscriptions for an offering of $500,000,000 of
3·year 2% 'percent notes dated January 20, 1955. Although
the notes are not guaranteed by the United States, the Treas·
ury is backing them indirectly by promising to lend the
FNMA any amount necessary to retire them at maturity.
This feature, in addition to payment provisions that were
especially attractive to commercial banks, resulted in a heavy
oversubscription to the issue, Subscriptions were accepted in
the amount of $50,000 or 14 percent of the amount of each
subscription, whichever was larger. Investors in the Eleventh
Federal Reserve District subscribed to $177,112,000 and
were allotted $30,386,000 of the securities,
The oil picture in this District was
stronger at the beginning of 1955
than at any time since the first part
of 1953, The improvement in the
District during the past few months
has reflected the better supply and demand situation in the
Nation's oil industry, Excess stocks, which were plaguing the
industry as late as September, have been largely eliminated,
Demand, which was disappointing during most of 1954, has
strengthened considerably, partly because of seasonal factors
and also the expansion in general business activity. Wholesale
prices of heating oil have firmed, and gasoline prices have
been stead y.
After moderate increases in November and December,
crude oil production in January rose appreciably, reo
Recting marked increases in Texas and Louisiana allowables
and a smaller increase in the New Mexico allowable, District
production during the first 2 weeks of January averaged 3,·
229,000 barrels per day, which is 211.,000 barrels higher than
in December and 298,000 barrels higher than in January a
year ago, The Nation's crude oil production showed a similar
pattern, with daily production in the first 2 weeks of J anu·
ary averaging 6,632,000 barrels.
Daily average crude oil production in the District in Febru·
.. ary apparently will be maintained at a high level as the Febru·
, ary daily allowable for Texas was reduced only 38,000 barrels
from the mid·J anuary allowable, and this decrease may be
offset by allowables assigned new wells. In Louisiana the Com·
lIIissioner of Conservation indicated allowables generally
would be unchanged, except to take care of new production,
57.0
54.1
12.1
21.8
5.3
_.1
15.0
3.4
-.5
60.9
117.9
SOURCESI 1 Estimated from American Petroleum [nstiMe weekly reports.
:I United States Burea u of Mines.
Refinery activity in both the District and the Nation rose
substantially during December and the first part of January
to reach all·time highs. December crude runs to refinery stills
in the District averaged 2,146,000 barrels per day, which is
67,000 barrels higher than in November and 152,000 barrels
higher than in December 1953, In the Nation, refinery crude
runs in December, at 7,203,000 barrels per day, were up
248,000 barrels from November and 239,000 barrels from
December a year earlier,
The Nation's stocks of crude oil and major refined products
declined considerably during December and early January
and on January 14 totaled 597,100,000 barrels, or about 10,·
000,000 barrels less than a year earlier. At 256,500,000 bar·
rels, crude stocka were about 13,100,000 barrels below a year
ago, while stocka of major refined products, amounting to
340,600,000 barrels, were 3,100,000 barrels higher than a
year ago,
Demand for major refined products at refineries and bulk
terminals during the 5 weeks ended January 14 averaged
7,467,000 barrels per day, which is 288,000 barrels - or 4
percent - higher than in the corresponding period a year
earlier, The demand for distillate fuel oil showed a year·to·
year gain of 8 percent, and the demand for gasoline was 5 per·
cent higher than a year earlier, Meanwhile, kerosene demand
SUPPLY AND DEMAND FOR ALt OILS, 1953·55
Uniled States
(In thousands of barrels per da)')
Foretast
NEW SUPPlY .. __ ... . ____ ....... __ •
Production ••• ••••••••••••• , •••• , •
Crude •••••.......•..••••••• , .
Other oils ... .. .. ..•..•...... ,.
Imports ••••••••••••••• •• •• • •• •• •
Crude •••••• . ...••.•.•• , ••.• , •
Reftned •• •..... ..••••••• .• •• , •
CHANGE IN STOCKS .............. .
Crude ••••••••••••••••• •• , •• •• • •
Products • • • •••••••••••••• , ••••••
DEMAND ......................... .
Exports ••••••••••••••• •••••••• ••
Domestic •••••••••••••••••• • • •• • •
Gosoline •••• •• ••• ••• •••• • • ••• •
Kerosene •••••••••••••••••• ••• •
Dis1i11ate ••••••••••• ••• ••• . •• • •
Residual ••••......•.••....... •
All other ••• • •• • .•••••••••• •• ••
SOURCE: United States 8ureau of MInes.
Estimated
Actual
1955
1954
1953
8,373
7,2.47
6,537
710
1,126
707
.419
22
8,080
7,017
6,340
677
1,063
658
.405
-19
-40
21
8,099
351
7,748
3,378
323
1,436
1,44.4
1,167
8,180
7,130
0,466
664
1,050
648
402
148
13
135
8,032
402
7,630
3,373
332
1,351
1,548
1,026
22
8,351
293
8,058
3,485
332
1,518
1,479
1,244
28
MONTHLY BUSINESS REVIEW
NATURAL GAS: MARKETED PRODUCTION
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In millions of cubic feet)
(In thousands of doltors)
Are.
Third quarter
1954
Texas .... . .. • ............. .
285,900
113,000
152,600
1,069,600
Tolal ....•..........•...••
1,621,100
Louisiana ••••••• • ••••••••• •• •
New Mexico •. ...............
Oklahoma •••...•.••...•..•..
Third quorter
Second quarter
1953
1954
December
1954p
Atea and type
276,900
95,600
281,600
105,200
131,200
1,080,400
153,800
1,106,500
1,584,100
1,647,100
The improvement in demand in recent months is expected
to continue in 1955, according to the United States Bureau of
Mines forecast which was issued recently. The Bureau's forecast, assuming normal weather, indicates a total demand for
all oils of 8,351,000 barrels per day, which is 3 percent higher
than in 1954 and may be compared with the estimated increase from 1953 to 1954 of less than 1 percent. Domestic
demand is expected to be up 4 percent, but exports may show
a further decline of 16 percent. With refined products stocks
now considered to be near normal levels, the rise in demand
is expected to be accompanied by an approximately corresponding increase in supply. The forecast calls for a gain of
3.1 percent in domestic crude oil production, an increase of
4.9 percent in light oils from natural gas, and a rise of 5.9
percent in total imports.
Marketed production of natural gas in the four producing
states lying wholly or partly within the Eleventh Federal Reserve District-Louisiana, New Mexico, Oklahoma, and Texas
- declined 2 percent to 1,621 billion cubic feet during the
third quarter of 1954. The decline was of a seasonal nature,
largely reflecting a reduction in summer requirements for
residential consumption. Third-quarter production, however,
was 2 percent higher than in the same quarter of the previous
year. Compared with 1953, production in New Mexico and
Oklahoma showed substantial increases, and that in Louis·
iana, a moderate gain. On the other hand, Texas production
declined. The aggregate marketed production of the four states
in the third quarter of 1954 comprised 81 percent of the na·
tional total.
JonlKJry- Gecember
November - - - - - - - 1954
1954p
1953
ELEVENTH DiSTRICT .... S 157,014 $ 114,028 $ 127.115 $ 1,469,278 $ 1.287.956
Residential.. .... . ..
AJI other. .. . . . .. . . .
UNITED STATESI ... ...
Residential... ......
All other ...........
68,543
88,471
1,830,094
761,577
1,068,517
SOURCE: United States Burecu of Mines.
was down 4 percent, and residual fuel oil demand was down
1 percent,
December
1953
28,082
67,417
85,946
1,299.764
433,500
866,264
59,698
1,498,850
708,691
790,159
706,820
497,195
762.458
790,761
19,771,524 17,443,463
8,518,291 6,606,832
11,253,233 10,836,631
1 37 stoles east of the Rocky Mounloins.
p-Preliminary.
SOURCEI F. W. Dodge Corporation.
in the fabricated metals, furniture, and machinery industries,
while there were increases in the textiles, paper, and printing
and publishing industries.
Indicating a probable high level of construction activity
during early 1955, the value of contract awards in December
was nearly 24 percent hlgher than in November and 38 percent above December 1953. Residential awards, which were
up 2 percent from the November level, exceeded those in
December 1953 by 144 percent. Nonresidential awards increased sharply to a level 48 percent above November and 3
percent above December a year earlier.
For the year 1954, total contract awards were up 14 percent
from 1953, reflecting the 42·percent gain in residential
awards which more than offset the 4-percent decline in all
other awards. In the Nation, total awards increased 13 per·
cent; the gain in residential awards was only 29 percent,
and all other awards were up 4 percent.
~
Contracts awarded during 1954 for building educational
structures in Texas increased nearly 10 percent to $107,779,000, or 25 percent of the value of total nonresidential building contracts. Indicative of future construction activity, indebtedness incurred for building purposes by Texas school
districts during the 4 weeks ended January 10 amounted to
almost $8,000,000. During the same period municipalities
in Texas sold bonds totaling over $15,000,000, primarily
for the expansion of utility systems.
NONAGRICULTURAL EMPLOYMENT
Five Southwestern Stales1
Nonagricultural employment in
the District states during December
established a new record at 3,946,000, which exceeds the previous
record of December 1953 by 20,800.
As in the preceding month, the major factor contributing to
the increase was seasonal hlrings in retail trade, which more
than offset declines in some manufacturing segments and
construction.
A seasonal decline of 8,800 placed manufacturing employment in the District states in December at 715,200 - about
1 percent below that in December 1953. Decreases occurred
Percent change
Dec. 1954 from
Number of persons
Typ e of employment
December
1954p
Total nonagricultural
wage and salary workers .. 3,946,000
715,200
Manufacturing . ....... ...
Nonmanufac:turing . .•. .. .. 3,230,800
231,500
Mining .••............ .
273.600
Construction . ..........
Transportation and publk
391.800
utilities . ... ..........
Trade ............... . 1,051,700
158,100
Finance . ... .....•• ....
452,600
Service .............. .
671,500
Government . ..... . ....
December
1953
November
1954
3,925,200
721,500
3,895,200
3,203,700
229,600
284,000
3,171,200
229.700
282,500
406,900
1.034,000
154,500
391,300
1,008,200
724,000
443,400
157,800
452,600
651,300
649,100
I Arizona, Louisiana, New Mexico, Oklahoma, and Texas.
p-PreUminary.
SOURCE: State employment agencies.
Dec:.
Nov.
1953
1954
.5
-.9
.8
.8
-3.7
1.3
-1.2
1.9
.8
- 3.2
-3.7
1.7
2.3
2. 1
3.1
.1
4.3
.2
0
3.5
4
