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MONGJrHLG)( REVIEW FEDERAL Vol. 39, No.1 RES E R V E BANK DALLAS, TEXAS o F DALLAS January 1, 1954 THE EC ONOM IC T REN D Looking back upon economic developments in the South· west over the past 12 months, certain features stand out im· pressively. Although there is no single index available which reflects total economic activity in the area, several widely used indicators of production, distrihntion, and income support the conclusion that 1953 was a record year. Most of the principal indexes of economic activity - such as nonagricul· tural and mannfacturing employment, average weekly earnings in m.anufacturing, crude oil production and refining, III retail and department store sales, bank debits, bank deposits, , and bank loans - rose to new highs in 1953 and also averaged higher than during the preceding record year of 1952. The outstanding exceptions to this general pattern were cash receipts from farm marketings and the value of construction contract awards. While 1953 was a year of record economic actIVIty, it also must be noted as a year in which inflationary forces were firmly checked and deflationary factors became more apparent. The several charts presented in this article clearly show that the gains in 1953 over comparable months in 1952 narrowed perceptibly and, in some cases, disappeared as the year moved to a close. Adjnstments taking place in business, industry, and agriculture, although generally moderate, were of sufficient strength to level off the trends which had been rising and, in a few cases, to turn the direction of the lines slightly downward. Clearly, 1953 removed the last traces of the dominance of a seHer's market and unmistakably marked the shift to a buyer's market. Consequently, competition alTlong businessmen became more intense, and selling efforts became more aggressive. Efficiency and service gained greater recognition, and the concept of economy - or more value for the dollar of the producer or the consumer gained respect and acceptance. boom. The year 1953, on the other hand, came to an end on a note of adjustment. For several months there has been taking place a sort of transition from a condition of economic boom that has been stimulated, at least partly, by inflationary tendencies and characterized by sharply rising trends to a different kind of economic situation. Here, of course, arises the $64 question: Is this transition likely to lead, after a further period of adjustment, into a situation of comparative economic stability at levels near to or only moderately below current figures, or is it probable that there will be considerable deflation of economic activity to levels that are significantly lower than those now prevailing? It is not easy to develop an answer to this question that is categorical and definitive and, at the same time, wholly satisfactory and intellectually honest. Just as estimates of the economic outlook - at least in part - depend on and are influenced by the plans of various segments or groups in the economic system, so are those plans often influenced and modified as the economic future unfolds. If the economic plans or intentions of, for example, Government, business, and the American buying public were positively determined and known and were not suhject to change, a projection of the economic outlook obviously would be much simpler and, incidentally, much more reliable than actually is the case. However, despite the elements of uncertainty that are involved in such projections, it is useful to review the recent trends of the major economic factors and to appraise the significance of tbe broader, tentative plans for 1954 of major groups in the economy. Certainly, one of the most publicized happenings influencing economic conditions in the District during 1953 was the continuation of the severe drought that has adverscly affected agriculture in a large part of the Southwest. VirThese developments in the District - which, in large meas- tually all of the western part of the District and parts of the ure, have been consistent with national movements - nat- extreme South and Southwest experienced a serious lack of urally have clouded the outlook for 1954 and have aroused rainfall. Moreover, in much of this area the shortage of much speculation as to the economic pattern for the months moisture had prevailed during the preceding 2 years. In some ahead. It will be remembered that 1952 closed on a note of parts of the area, crop production was limited, and in almost marked strength; moreover, that characteristic extended into all of the western sections, livestock operations suffered. Genthe first 4 or 5 months of 1953 before adjustmeuts, becoming erally widespread rainfall during the third quarter of the more numerous, began to slow down the progress of the year relieved conditions greatly and improved the outlook, This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 2 MONTHLY BUSINESS REVIEW CASH RECEIPTS FROM FARM MARKETINGS FI\,'E SOUTHWESTERN STATES e -E IHm ll l d SOU RCE U S OH Qll m.nl ~' A ~ ' iull"". although the damage to ranges and pastures and to agricultural operations in the most severely affected sections obviously will require time to overcome_ Despite the severity of the drought - and its effects should not be minimized, total agricultural production in the District in 1953 exceeded production in 1952 by perhaps 2 percent and represents the fourth largest output of agricultural products in the area. Especially fortunate were the larger crops of cotton, rice, and peanuts, which helped to raise total crop production to the highest level since 1949. There was very little net change during 1953 in the total production of livestock and livestock products, although marketings of cattle and sheep were very heavy as a result of the severe drought and the unfavorable feed situation. The slaughter of cattle and calves in Texas in 1953 was perhaps 50 percent larger than a year earlier. A second unfavorable development affecting agriculture in the Southwest was the sharp decline in fann commodity prices that continued during 1953. Estimates indicate that prices of farm commodities averaged from 16 to 18 percent lower during 1953 than a year earlier. Consequently, although crop production was somewhat larger and production of livestock and livestock products showed virtually no net change, cash receipts from farm marketings in the five southwestern states lying wholly or partly in the Eleventh District are estimated to have declined about 12 percent. Cash receipts from marketings of crops were in the neighborhood of 11 percent under 1952 figures, while receipts from marketings of livestock and livestock products are estimated to have declined perhaps 14 percent. In 1952, total cash receipts from farm marketings in the area were $3,875,000,000, whereas the estimate for 1953 places the total at about $3,400,000,000. Year-end moisture conditions are reported to be generally better than a year ago, although in parts of the area, additional rains will he needed to compensate for the long drought. There is some feeling that the declining trend of fann commodity prices has passed through its worst stages and that over the next 6 or more months prices may tend to • hold comparatively near to current levels. In reviewing agri- • cultural developments in the District, it is significant that, on the whole, the results for 1953 were more favorable than might have been expected earlier in the year. Also, there has been no development of a cumulative distress movement. On the whole, the adjustment through which agriculture has been passing for the past 2 years or more and which was severely aggravated in this District by the drought has been reasonably well withstood. In the absence of a regional index of industrial production, reliance must be placed on other available data revealing trends with respect to factors such as employment, crude oil production and refining, and construction. More people were at work in the Southwest during 1953 than in 1952. It is estimated that the average increase in total nonagricultural employment during 1953 was about 2 percent, while that of manufacturing employment probably was about 4 percent. Moreover, each month during the year showed larger nonagricultural and manufacturing employment than the com· parable monlh in 1952. On the other hand, it should be noted that the number of persons added to the employed working force was appreciably smaller in 1953 than in the preceding year. In other words, there continued to be growth in employment bnt at a lesser rate - and, in fact, magnitude - than in 1952. At the end of 1953, persons employed in manufacturing ~ in the area are estimated to have totaled about 727,500, or ,. about 4,600 more than at the end of 1952. From the accompanying chart showing manufacturing employment hy months during 1953 and 1952, it will be noled that the margin of gain over 1952 was well maintained through the fir.st 8 months of the year, and peak employment was reported m August at 736,300. During the last 4 months of the year the gain over comparable months in 1952 shrunk sharply and steadily. To a large extent, the decline during the latter part of the year was heaviest in what might be termed "defense and defense-related industries." On the other hand, employment gains in such industries as those producing primary MANUFACTURING EMPLOYMENT FIVE SOUTHWESTERN STATES OUSAN OS .0 "0 O~ •" TH OUSANDS OF PERSO PEI'tSON S 00 7 '0 0 1953 , I J J 70 o I __ --- .... -I _ ..... .,}_----::1 7 00 _L f------ - - 19~2 ,'0 6 , 0 60 0 J M A _-E ",,,,,,lld S O U R C E ' S ' ~t . 1I,.pIOJ'",' ~ ' oOlftc l" . M A S 0 N , 0' 00 MONTHLY BUSINESS REVIEW • metals, apparel, and chemicals were more than sufficient to offset the cutbacks that occurred in the defense-type industries. NONAGRICULTURAL EMPLOYMENT FIVE SOUTHWESTERN STATES •• 4. ILLt OfrlS Average weekly hours worked and earnings of manufac· turing workers in the District are reflected, at least in part, by figures showing developm nts in Texas. During the first 8 months of 1953, average weekly hours of work by persons engaged in manufacturing in Texas showed very little change from comparable figures for 1952. For instance, during August 1953, average weekly hours worked were 41.9, as against 42.1 in January; in 1952, comparable figures were 42.0 and 42.3. During the last 4 months of 1952, average weekly hours worked rose appreciably and at the year's end were 43.4. On the other hand, during the same months in 1953 a slight decline occurred, with the result that the estimate for December places the figure at 41.0. Throughout the past year, assuming a 40-hour workweek as "normal," manufacturing workers in Texas were on an overtime basis, although the amount of overtime by the year-end had shrunk to about one-third of what it was a year earlier. Average weekly earnings of manufacturing workers in Texas rose further during 1953, although the increase from January to December was about $1.49, as compared with an increase of 6.38 in 1952. The trend of average weekly earnings during the 2 years is not appreciably different from that of average weekly hours worked and thus tends to re~ flect the increase in overtime work during the last third of , 1952, as compared with the decrease in the same 4 months in 1953. Higher average wage rates also are reflected, inasmuch as average weekly earnings in December 1953 were $70.70 for 41 hours of work, as compared with $70.25 for 43.4 hours of work in December 1952. These figures indicate that the volume of industrial output in the Southwest in 1953 exceeded that of 1952 and thus was at a record level. WillIe the gain of man power engaged in manufacturing was not large when consideration is given to the increase in the number of workers and the slight decline in the number of hours worked, it probably represented an increase in output due to the greater productivity per worker that may safely be assumed for industry in the area. Capital expenditures designed to increase plant efficiency and to modernize equipment have been in substantial volume. In addition, new industries have continued to be attracted to the area, as witnessed by such figures as those reporting 84 new manufacturing finns in Texas during the first 11 months of 1953, as compared with 87 such firms during the full year 1952. An increase in the use of electrical power for industrial purposes also points toward greater production. While none of these factors, considered individually, is conclusive, collectively they seem to support the view that comparatively full utilization of an enlarged productive capacity was achieved in the area in 1953. Turning to the broader coverage of total nonagricultural cmployment, a similar picture presents itself, although the declining rate of increase in employment set in earlier in the year than was the case with respect to manufacturing. During January 1953, for instance, about 142,000 more people 3 O~ 'EltSOHS " 4.' MILLIONS OF PER50 4. 0 .. 1 - -'- ---,... _-' 4 .0 I I I ....!_..J_-I 1 9~2 ----- • . I 3. 3.o. 1953 F M 3 A M J J A S 0 H 3 .0 .-!I II ",.I.". SOURCE ' SI;I, , .. ,Ieym l nl ClOUt l. .. were engaged in nonagricultural employment than in the same month of 1952. Each month thereafter, with but one exception, the gain over the comparable month in 1952 was somewhat less. By the end of the year, nonagricultural employment, estimated at 3,910,000, was 7,700 more than a year earlier. This larger number of employed workers indicates a higher volume of business activity - a condition that is supported, in general, by other data drawn from banking sources, from retail trade, and from such indexes as that of business activity published by the Bureau of Business Research of the University of Texas. Perhaps one of the most significant features of the trends that have developed in employment, hours worked, and weekly earnings is the absence of any sharp or seriously cumulative declining movement during the year. In other words, such adjustments as have been taking place in the economy of the area have not tended to "feed upon themselves" in a serious manner. Moreover, elements of resistance to decline and, in some cases, factors of actual strength have tended to moderate or to prevent a downward movement of the indexes. In effect, it appears that the business and industrial system has been operating at Illgher levels but is reflecting in less rapid growth some of the effects of economic adjustments. The petroleum industry in the District in 1953 achieved new gains in terms of output but, at the same time, faced certain problems of adjustment. New record levels were reached in daily average crude production, daily average crude runs to refinery stills, and total well completions. As the accompanying chart on crude oil production shows, strength was most notable during the first half of the year, whereas in 1952, daily average production was largest during the last 4 months. In 1952, following settlement of the refinery strike, production rose sharply, reaching a peak in December. As the months passed in 1953, inventories of both crude and refined products began to accumulate. In addition, despite an increase in the price of crude at midyear, prices of petroleum products began to show easing tendencies. MONTHLY BUSINESS REVIEW 4 CRUDE OIL PRODUCTION TOTAL WELL COMPLETIONS ElEVENTH FEOERAL RESERVE DI STRICT MILL IONS OF IIARRELS n NU"'IaER OF WELLS ' .0 I I '.0 EL.EVENTH FEDERAL RESERVE OI STRICT MIL LIONS OF a lilRA EL S Z,500 I 2.000 --+-+-~f--+-+-----j-~ • l,OOO ..,----- I·E,tUMI,d SOI.lRCES' U. 5 . 8 ~ r'<lu or M,n,' American P,tr ol ,"", Inllilyll . At no time, however, did either the inventory or the price situation threaten to get beyond control or manageable proportions. Total production and daily average production of crude oil in the District were approximately 1 percent larger than in 1952. It is estimated that production totaled about 1,135,400,000 barrels, as compared with 1,127,700,000 barrels in 1952. Daily average production followed a declining trend during most months of the past year, with output of the District's wells averaging an estimated 2,910,000 barrels daily in December, or 322,000 less than the January daily average. Refinery activity, as reflected by crude runs to stills, was more than 5 percent above the 1952 figure. Output of refined products was larger between January and June than in subsequent months, reflecting in considerable part the unfavorable inventory situation which developed. In fact, refinery activity during both 1952 and 1953 reflected the effect of inventory developments in the industry. During the last 6 months of 1952, refining was stepped up to replenish inventories that had been reduced by the strike which occurred in the second quarter of the year. On the other hand, during the last half of 1953, refinery operations were cut back in an attempt to improve inventory positions that had become somewhat excessive. Month-to-month fluctuations in refinery activity during 1953 were comparatively small- the largest being 85,000 barrels daily average. This tendency toward stability in outpnt, together with an over-all increase in refinery runs for the year, seems to confirm the view that the inventory problem is not unduly serious. The search for oil in the District, stimulated at midyear by the increase in the price of crude, was very active during 1953, with the result that very large-scale drilling activity prevailed. New well completions are estimated at more than 20,000 for the 12-month period, exceeding the 1952 total by about 5 percent. The widespread distribution of petroleum operations over large parts of the District has had a stabilizing effect upon the economy in several respects. In the first place, the petro- t---1 I,OOO , - [''''''~' '<1 SO URCE 01 1 on ~ (; 0' Jou,no l leurn industry in all its ramifications certainly represents a major source of income and a strong economic support in the District. Secondly, it provides the basic raw materials for an important segment of the industrial development that has been taking place in the Southwest. Third, the industry's demand for a multitude of products tends to help support a substantial industrial structure. Fourth, it is a major source of tax receipts to governmental bodies. Finally, through its production, refining, leasing, and drilling activities in 1953, .. the indUl.try supplied a substantial offset to declining agri- , cultural income, especially in the wcstern part of the District where the drought was so severe and livestock and agricultural losses were heavy. The value of construction contract awards in the District fell below the $1,454,500,000 reported in 1952 by perhaps 8 percent, judging from preliminary and incomplete figures. Following over-all strength during January and February, total awards declined under comparable 1952 monthly data until September, when the declining trend was reversed. Residential a wards showed a larger decrease during 1953 than other types of construction. As was the case with rcspect to total awards, weakness was most pronounced during the late spring and summer months. A tighter mortgage money market probably accounts, at least in part, for the midyear trend. Later in the year, as the mortgage market eased somewhat and money became more available, conditions in the residential field showed improvement. Construction - even at the somewhat lower levels of 1953, when awards probably exceeded $1,300,000,000 - has been a very 'strong support of economic activity in the Southwest. For several years, very large consumer expenditures have been especially important in maintaining a high and expanding level of economic activity. Full employment at relatively high wages has contributed to a high level of income, and the broadening of the income base has strengthened total consumer spending power. The year 1953 was no exception in this respect. Total retail trade is estimated to have run slightly above the 1952 volume, with the increase prohably being in the neighborhood of from 3 to 4 percent. 4 5 MONTHLY BUSINESS REVIEW DEPARTMENT STORE SALES .., , ELEVENTH FED ERAL RESE RV E DI STRICT ( 1947 · 49 - I OO) " 0 "' I"EIII C[ PEft C 50 ,4 0 '4 0 1953 ~ .~ ~r~ "0 , , -/V '\e::: 't. -:.::.:: . .W' ' I,,,...... -...JI '90, 20 0 6 ' " '00 J F M A M J J o A N "o , 0 00 ' · (0 . ..".1 •• "dlll.h. '01 "1.0"" ~" , .II •• Figures reported by the weekly reporting department stores in the District indicate a gain in department store sales over 1952 of about 1 percent. During the first half of the past year, department store sal es ran appreciably abovc year·earlier fi gures but then tapered off. Sales during Sep· tember and October showed the largest monthly declines from a year ago but were followed by satisfactory recovery during the two closing months of the year. On the whole, .. sales of soft goods held up well durin g 1953, willIe hard , goods sales were under 1952 levels. Inventories at department stores l'ose during the fir st 3 months of the yea r and were probably somewhat excessive by August and September. More cauti ous buyin g practices on the part of department store managements, together with unproved sales results during the closing months of the year, relieved the inventory situation. At the end of 1953 it is estinlated that department store inventories were in r~a. sonably good balancc and only slightl y above the 1952 level, after all owances are made for the necessary seasonal adjustments. Viewing retail and department store sales as a whole during the year, the conclusion appears to be one of strength and a willingness on the part of consumers to buy the goods and services necessary to meet their requirements. It is true that a buyer's market prevailed, especially during the last 6 months of the year, and sales policies of retail stores neces· sarily hecame more aggressive. On the whole, however, con· sumers responded favorably and maintained their purchases at high levels. No adverse psychological factors appeared in the picture. Banking developments in the District, as might be expected, reflected the general economic trend. Such important banking items as total resources, total deposits, total loans, and capital accounts are estimated to have risen above 1952 year-end figures. The increase over 1952, however, was somewhat less than that of the preceding year. During the first 5 months of 1953, the demand for bank credit was very strong, and a degree of tightness prevailed. During the remainder of the year, however, a moderate degree of ease developed, as ccntral banking policies designed to make reserves more readily available began to exert their influence. On the basis of figures through the first 11 months of the year, indications are that total resources of the District's member banks probably were in the neighborhood of about 88,900,000,000 at the end of 1953, reflecting an increase of between 1 and 2 percent. A similar increase in total deposits probably brought this figure to about $8,300,000,000 by the year-end. Total loans, which increased during 1952 by about 11 percent, are estimated to have shown a 5-percent rise during the past year, with the total volume somewhat in excess of $3,000,000,000 on December 31. Perhaps the most significant banking development during 1953 was the lessth an-seasonal gain in bank loans during the last 6 months. This shonld not be surprising, however, for it was consistent with the general economic pattern that prevailed during the period. On the whole, banks in the District proved adequately able to meet the essential growth and seasonal requirements of business, industry, and agriculture and closed the year on a note of strength. MEMBER BANKS DEPARTMENT STORE STOCKS El EVENTH FEDERA L R ES ERVE DI STRICT E L EVENT H FE DE RA L RESER V E DISTR I CT " o '4 T PEAC E T I _I ~ o i l, " r- ______ ---' J I J I " ,50 "' ( 1947 4 9 100 ) R(;(NT 15 0 ~' ............ ,/ I 19 52 ,20 BILLIONS .., ,40 --1'= " ..,::::.:: ,'0 ... ---- 0 TOTAL DEPOS ITS 0 , 1-_,-1"' '- 1 953 7. 7.0 , 6. I _...L-., . . 19:52 I or 'JO_L 9. 0 '" ..., --¥/l ~ -' -- -- 8.0 75 7.0 • .5 ,. >r----,----,---,--,---------,---,---~~--~ , . , ,' 0 "0 '0 0 LLIO NS Of COLLARS 9 "0 F M A M J J A S 0 N 0' 0 0 • [ 11U1I.t.. L-___;._ _ _'_ •• •• .. .._ _,,_ ____________________________ •• .'.. •• _ _ _.,_ ... .. I ~ 'l--+-I.-t--+--+-l,---!---!- -l-.l---h.o .-[ . I,,..c, . d 6 MONTHLY BUSINESS REVIEW The foregoing review of developments which occurred in various fields of economic activity during 1953 reveals certain features that are of significance as we look ahead into the future_ Of course, one of these is that, despite the adj ustments that occurred during part of 1953, the over-all level of economic activity showed further growth, even though it was slightly less than the growth experienced in 1952. Another significant factor is that, with the exception of developments in such limited areas as livestock prices and with respect to certain other agricultural factors, there were no sharp or serious declines which threatened the stability of economic activity in the District. Likewise, there were no tendencies apparent for adjustments to cumulate into a downward movement of serious proportions. In fact, on the contrary, factors of strength and support in the economy clearly moderated the effect of such adj ustments as were occurring. Evidences of a resistance to decline - such as occurred in the closing months of the year with respect to retail trade, department store trade, and construction - seem to indicate an underlying strength and an absence of fundamental weaknesses. The economy of the Southwest, of course, must function and operate within the general framework of what is usually referred to as national economic conditions. In this respect, certain tentative estimates of major groups in the economy pointing toward their intentions and plans in 1954 are significant. The Nation's business and industry apparently intend to continue capital expenditures in large volume. Available estimates of these types of expenditures for 1954 place the total for the first quarter of the year slightly above the comparable figures of 1953 and for the year as a whole only 4 percent below the 1953 record level. Private and governmental estimates of total construction expenditures during 1954 also are so large as to indicate virtually full utilization of that major supporting industry's labor and facilities. These estimates indicate that total construction expenditures in 1954 probably will be no more than 2 or 3 percent under the 1953 figures. ~ Economy in Federal expenditures undoubtedly will be achieved in some degree, and it now appears that the deficit in the Federal budget during the coming year may be somewhat less than was previously anticipated. Expenditures of the Federal Government for national security and other purposes, however, will be so large as to provide strong support to the economy as a whole, even though the stimulative effect of rising expenditures such as has been experienced during past years will be lacking. Finally, most estimates of consumer expenditures indicate that there will be no weakening in this very important factor - possibly there may be a moderate increase in such expenditures, which would tend to offset contractive influences in other factors. Early in this article the question was raised whether the transition from economic boom to a different kind of economic situation could be comparatively smooth and lead into satisfactory economic stability at levels, at most, only moderately below current figures. There do not appear to be compelling reasons why this question should not be answered affirmatively; in fact, recent trends of economic activity in the District and estimates of major supporting factors such as those reviewed above point strongly toward that affirmative conclusion. Further adjustments in 1954 are probable; also, economic conditions are likely to become more competitive and a premium will be placed on aggressive merchandising, efficiency, and sound business and financial practices. Nevertheless, the outlook for 1954 should not be regarded as unfavorable. New records of over-all economic activity may not be achieved in 1954, but if there should be net changes from 1953, it appears at this time that they would be comparatively small and capable of being absorbed without too serious difficulty or strain. 4 MONTHLY BUSINESS REVIEW REVIEW OF BUSINESS, AGRICULTURAL, AND Christmas trade at District department stores is estimated to have fallen slightly below the record total reported during the corresponding period of 1952, although sales of gift-type merchandise items probably reached a record volume somewhat in excess of those a year ago. Year-end inventories at department stores indicate a substantial reduction during December; while they are still slightly higher than a year ago, the distribution among departments is better balanced. Harvest of the large 1953 cotton crop is nearing completion; excellent yields per acre were obtained in most areas. Farm prices are holding relatively steady. Moisture conditions in the District at the start of 1954 are improved over a year ago. Winter pasture and grain and vegetable crops are making good progress. Planting of early spring crops is expected • to begin under generally favorable conditions. District crude oil production in December declined for the fifth consecutive month. Heavy stocks of refined products and a smaller-than-usual rise in demand stemming from mild fall weather have combined to hold refinery runs to a reduced level. Prices have eased somewhat. Nonagricultural employment in the District increased in December to a record level, but the gain over a year earlier was less than 1 percent. Manufacturing employment, which increased in November, declined in December but also closed the year slightly above December 1952 figures. 7 FINANCIAL The 1953 Christmas trade at department stores in the Eleventh Federal Reserve District apparently fell slightly below the record volume of 1952. December sales through Christmas Eve totaled an estimated 2 percent less than in the comparable period a year earlier. Sales of gift items (such as jewelry and watches, handbags, wearing apparel, men's furnishings, small appliances, sporting goods, and radios and phonographs, as well as furniture and bedding) were reported near - and, in some cases above - the 1952 record. Sales of children's toys and game's were the most active ever experienced by department stores and probably established a new high for the Christmas season. On the other hand, sales of floor coverings, television sets, and major appliances were lower than in December 1952, with losses ranging up to 25 percent. In fact, consumer purchases of these items since late spring of 1953 have been below the heavy buying which occurred in corresponding months of 1952, following suspension of Regulation W. During November, daily average sales at department stores picked up sharply over October. Despite three less business days, total sales for the month equaled the October volume and showed a decline of less than 1 percent from November 1952. Sales recovered in a number of soft goods lines which had been lagging behind year-earlier totals since August and showed moderate to substantial gains. Sales of household textiles rose 5 percent above November 1952; sales of sportswear and girls' wear rose 5 percent and 13 percent, respectively; and sales of men's furnishings rose 8 percent, while boys' wear showed a gain of 4 percent. Basement slore sales, which RETAil TRADE STATISTICS (Percentage change) NET SALES Une of tr(lde by area DEPARTMENT STORES The value of construction contracts awarded in the District during November exceeded by a substantial margin the year-earlier total. A wards for the first 1 7 months of 1953 trailed the comparable 1952 figure, with most of the 8-percent decline occurring in government outlays. Loans of weekly reporting member banks rose moderately during the 4 Vleeks ended December 16, after a much smaller-than-usual expansion during the fall months; CCC operations contributed significantly to the increase. CONDITIONS Total Eleventh District ••••••••••••• Corpus Christl ••••••••••••••••••• _1 Dallas ••••••••••••••••••••••••• 2 -8 2 2 -2 -2 -11 -3 EI Paso •••••••••••••••••••••• • • Fort Worth •••.••••••••••••••••• HOulton •••••• . •••••••.•••••••.• Son Antonio •••••••••••••••••••• Shreveport, La .. , .• •••••••••••• . • Waco .••••••••.•.••••••••••••• Other cities ••••••••••••••••••• •• FURNITURE STORES Total Elaventh District •••• •• ••••••• Auttin ••• ••••••••••• ••••••••••• Dollas ••••••••••••••••••••••••• Houston •• • • •••••••••••••••••••• Port Arthur ••••••••••••••••••••• Son Antonio •••••••••••••••••••• Shreveport, La ............ . ..... . Other cities •••••••••••••• • •••• _ • HOUSEHOLD APPUANCE STORES Total Eleventh District ............ . DoUos._ ••• _••••••••••••••••••• STOCKS' Nov, 1953 from No't'. 1953 from - - - - - 11 mo_ 1953 - - - Nov. Oct. compo with No.,. Oct. 1952 1953 11 mo.1952 1952 1953 -7 -7 -I _12 -2 -9 10 3 1 -1 2 -3 -3 2 -12 -3 -1 -1 -15 -10 2 -7 -7 -10 -19 -12 20 42 -7 1 3 2 2 -3 4 -2 2 -6 2 4 -6 6 3 2 8 3 -2 2 3 -10 12 -20 -I -2 -1 -5 -I 1 3 -3 -3 , , _1 -10 14 -I 1 Stocles at end of month. , Indicates change of less than one·half of I percent. -17 -10 -3 4 MONTHLY BUSINESS REVIEW 8 stalment receivables at rcporting stores at the end of November were at an all-time high, but the ll-percent increase .. from January 1, 1953, was considerably lower than the 22- • percent rise that occurred during the same period in 1952. INDEXES OF DEPARTMENT STORE SALES AND STOCKS = (l947.49 100) UNADJUSTED Area ADJUSTEDl Oct. Sept. Noy. No..,. Oct. Sept, Noy. 1953 1953 1952 1953 1953 1953 1952 Nov. 1953 SALES- Daily average Eleventh District •••• •••••••• Dallas ..•................ . Houston •••••. . •.••••••••• • 144 141 166 128 128 142 119 119 137 138 162 127 122 148 122 119 144 112 108 125 120 145 152p 152 148 14Sr 137p 139 142 131 145r 128r STOCKS-End of month Eleventh District ........••.. 1 Adjusted for seasonal voriation. r-Revlsed. p-Preliminory, declined in both September and October, rose in November to a level 6 percent above November 1952. Other gains registered during November over year· earlier totals were in sales of silverware and jewelry, which were up 4 percent; furniture and bedding, up 10 percent; radios and phonographs, 43 percent; and toys and games, 20 percent. The principal losses during the month occurred in the sales of major household appliances and television sets, which were down 32 percent and 26 percent, respectively. For the year 1953 through November, cumulative monthly depart· ment store sales for the District showed a gain of 1 percent over the comparable period in 1952. Total sales for 1953 are estimated to have set a new record, although the gain over 1952 was very small. At reporting stores the proportion of sales for cash duro ing November represented approximately 32 percent of total sales - 1 percent lower than during November 1952. Charge account sales were 58 percent of the total, compared with 54 percent a year earlier; instalment sales represented 10 per· cent, whereas in November 1952 they represented 13 percent. Charge accounts receivable rose 10 percent in November as compared with the end of October and were 4 percent above November 1952. Instalment receivables at the end of the month were up only 1 percent from a month earlier but were 14 percent higher than on the same date in 1952. InWHOLESALE TRADE STATISTICS Eleventh Federal Reserve District (Percentage change) NET SALESp STOCKSl p November 1953 from line of trade Drugs and sundries ••.... ...• Dry goods .•......•....... Grocery (volootary-group and full· line wholesalers not sponsoring groups) ........ Hardware .•.............. . Industricl supplies ........... Machinery equipment and sup· plies except electrical ..... Metcls ................ • ... Tobacco products ........•.• Wines ond liquors ...... ...• Wiring supplies, construction materials distributors ...... November 1953 from 11 mo.1953 compo with November 11 mo.1952 1952 November 1952 October 1953 9 -24 3 -22 5 - 7 -2 _4 -8 -2 -3 -2 77 - 5 -1 -11 -16 -. -22 -23 - 11 16 44 Stocks at end of month. p_Prelimlnary. 1 i Indicates change of less Inan one·half of 1 percent. SOURCE: United Stales Sureau of the Census. Furniture store sales at reporting stores in the District during November declined only 3 percent from October, despite the fact that November offered three less business days. Compared with the same month a year earlier, however, November sales showed a loss of 7 percent. Collections were off 6 percent from October, while accounts receivable rosc 1 percent during the month to a total 4 percent above November 1952. Inventories registered a month-to-month decline of 1 percent and at the end of the month were 10 percent below November 30, 1952. 4 Agricultural conditions in the District during December generally were favorable for development of small grains, legmnes, and commercial winter vegetables. Fog and light rain dnring the early part of the month delayed completion of cotton harvesting operations. However, extensive use of mechanical strippers, plus an ample supply of labor, en· abled farmers to harvest most of the 1953 cotton crop by the end of December. Generally favorable weather during November resulted in further increases in the estimates of cotton production in the District and the Nation. On December 1 the forecast for Texas was raised by 200,000 bales and that for the District by 233,000 bales. Increases also were indicated for Oklahoma and Louisiana. The national crop, now forecast at 16,437,000 bales, is exceeded only by the crops of 1926, 1931, and 1937. 1953 -7 -5 -8 3 3 -8 - 7 3 -6 -3 8 25 -3 - i - 11 Department store inventories declined slightly during November and at the end of the month were 4, percent above a year earlier, the increases occurring chiefly in wearing ap· parel and major appliances. Further improvement in inventory positions occurred during December. October 2 6 • Collections on accounts receivable during November, as related to the amount outstanding at the beginning of the month, showed no appreciable change from recent months and only a slight change from November 1952. On the basis of reported figures, the average collection time on charge accounts was approximately 67 days. On instalment accounts the average pay-out period was about 17 months, compared with 16 months a year earlier. -1 20 The 419 pounds of lint harvested per acre in Louisiana in 1953 is a record. In Texas the per acre yield is estimated at 232 pounds - 61 pounds above 1952 and 49 pounds above the 10·year (1942-51) average. The Texas average yield has been exceeded only once since the turn of the century; in 194.9, yields per acre averaged 261 pounds. Yields were unusually good in the Blacklands area, with an average of 243 pounds per acre, compared with the 1942-51 average of 152 pounds. In the Pecos and Upper Rio Grande Valleys, the average yield of 587 pounds of lint is more than 100 pounds above that for the lO-year period. ~ ~ MONTHLY BUSIKESS REVIEW 9 COTTON PRODUCTION LIVESTOCK RECEIPTS Texas Crop Reporting D istricts (Number) (In thousands of bolas-SOD lb. gross wi .) SAN ANTONIO MARKET FORT WORTH MARKET 1953 1951 Crop reporting district l·N ..................... . .. 1952 10·5 .. ... .................. 351 941 288 218 33 608 113 85 192 25 192 86 256 79 607 467 1,005 182 59 12 610 95 96 UO 17 200 222 231 62 310 Stole ... .......... . .... . 4.074 3.808 1-S • ....... . • ... ........ .. . 2·N ........................ 2·5 ................... . .... 3 .............•..........•. 4 ......... .. . .. ... .... ..... S·N ........ ' ...•.... . .... 0. 5·5 ... ......... ............ 6 .......................... 7 .......................... S·N ............•..... _.... . 8·5 ........................ 9 .......................... lO-N ........ .... . ...... . •.. Indicate d December 1 540 835 155 320 35 1953 01 Odober 1953 Octob.r November November 1953 1952 111,363 .U,347 38,872 38,027 37,029 21,506 15,925 24,181 18,816 60,016 124,979 116,022 130,651 1953 1952 67.588 104.818 Cal ....I . . . . . . . . . . 38,896 Hogl .......... . 52.886 Sheep ......... . .40,155 Cattle . ........ . 130 122 275 35 210 76 230 32 260 116 83 85 542 292 180 137 127 115 206 105 34 100 52 84 4,35 0 114 1,095 Cia» percent of November November 1953 19$2 25,217 57.875 49,535 I Include, goats. In the eastern two· thirds of the District and in northwestern Texas counties, small grains, winter pastures, and legumes are providing abundant grazing, and cattle are making excel· lent gains. Sheep are entering the winter in fair to good con· dition in most of the sheep·producing areas. SOURCEI United Slot., Department of A\lriculture. Winter wheat acreage in District states for harvest in 1954 is estimated by the United States Department of Agriculture at 10,946,000 acres, which reflects a decrease of 16 percent from the acreage seeded for harvest in 1953 but is 31 percent above the acreage actually harvested in 1953. Texas acreage is placed at 4,731,000 acres - 13 percent below the acreage seeded in the fall of 1952 hut nearly double the acreage actually harvested. Acreage in all areas is about in line with acreage allotments issued for the 1954 crop, with allowances for permissible overplanting under specified conditions. Na· • tional winter wheat acreage, estimated at 46,575,000 acres, , is about 20 percent below a year ago and the smallest since 1943. Condition of the present winter wheat crop is reported to be good to excellent, with moisture supplies generally ample. Production in District states in 1954, presently indicated at 128,139,000 bushels, is highly dependent on weather condi· tions between now and harvest time, but if the crop indicated should materialize, it would be 35 percent larger than the relatively small production in 1953. The Texas crop is esti· mated at 52,041,000 bushels, which, if realized, would be the largest crop since 1949. Year·end range and pastme conditions in the District are reported to be substantially better than a year earlier and generally favorable, except in southwestern areas of Texas and in southern New Mexico and Arizona. In those areas, cured range fced is extremely short, and supplemental feed· ing is being contin ued on a large scale. Despite heavy feed· ing, cattle and calves are reported to be losing some weight. Marketings of cattle and calves during November were in relatively large volume, but the increase over a year ago was much smaller than in earlier months of the year. Incomplete figures indicate that slaughter of cattle and calves in Texas in 1953 was nearly 50 percent higher than in 1952. For the Nation, slaughter probably exceeded the volume of 1952 by as much as 30 percent. Commercial production of winter vegetables in Texas is expected to be 7 percent greater than in the 1952·53 season and one·fifth larger than the 1949·52 average. Total acreage planted is 8 percent larger than a year ago, but per acre yields are not expected to equal those of last season for all crops. Freezing temperatures around the 15th of December extended into the Winter Garden Area and the Lower Rio Grande Valley of Texas, causing damage to both mature and young vegetable plants. At 259 percent of the 1910·14 average, the index of prices received by Texas farmers was unchanged from mid·October to mid·November but was 14 percent (42 index points) below November 1952. Reports from spot commodity markets in. dicate only minor changes since mid·November. Hogs and feeder cattle generally are selling for somewhat higher prices than 6 weeks ago, while prices of cotton and rice have de· c1ined slightly. The moisture situation over the District at the beginning of 1954 is considerably better than that at the same time last year . Planting of spring crops in south Texas is expected to be made under generally favorable moistme conditions. Cot· CITRUS FRUIT PRODUCTION lin thousands of boxes) WINTER WHEAT ACREAGE SEEDED (In ftlousandt of acret) Crop of Stole 1953 Arizona ........... .. ..... .. . 25 611 6,966 New Mexico .. .... .. ..•...•. . Oklahoma .................. . Crop of 1954 Crop of 23 550 598 515 1953 Texo$ .. • •.•••.••••••••.••. • 5,438 5,642 4,731 70;J76 23,035 Total •....•••..... • .•.. • 13,040 10,946 94,924 SOURCE: United Siales Department of Agriculture. Average of PRODUCTION 10,.as::ms end.d 1952 (In thousands of blJShels) Crop of 1954 552 ARIZONA Oranges .•.•.••.••••....• . Grapefruit .••...•..•.•.•.. 2,200 73,346 LOUISIANA .52,041 1951·52 Oranges ... .. ............ . 128,139 Grapefruit • . . .......•• . ... Indicated 1953·54 1,000 3,220 2,140 900 3,000 3,300 300 50 50 85 3,366 15.342 300 200 1,000 TEXAS Oranges .........•....•... 1952·53 SOURCE: United Stoles Deportment of Agriculture. 730 400 1,200 1,300 1.100 10 MONTHLY BUSINESS REVIEW FARM COMMODITY PRICES Top Prices Paid in Local Southwest Markets Comparable Comparable Week ended 'Nuk woek Unit 00c.21,1953 last month la lt year Commodity and marKet ------------------ - - - - - .3235 - - - -COTTON, Middling 15 / 16-inch, Dallas .... lb. .3210 $ WHEAT. No.1 hard, Fort Worth .......•.. OATS. No.2 whit., Fort Worth ........ . . . CORN. N.J. 2 yellow. Fort Woorfh ....•.•.• SORGHUMS, No, 2 yellow, f,;,rt W orth .••• HOGS, Choice. Fort Wo rth .. . ..... .. .... SlAUGHrER srEERS. Cholce. Fort Worth •.. SLAUGHTER CALVES. Choice, Fort Worth ... STOCKER STEERS. Choice, Fort Worth .•... HENS, 4 pounds and ovor, Fort Worth ..... FRYERS, Commercia l, Fori Warth ....... . ,. BROILERS, south Texa s.... . .. . . . .. . . .... EGGS, Graded and E:ondled, Fort Wortn . .. TUR.<EYS, N o.1 henl, Fort Worth ......... $ $ .3220 2.7014 2.6~Yl 2.69 1.04 I .OJ;/l 1.13 2.90 25.00 24.00 18.50 19.00 .25 .28 .27 1.77Vl 2.77 21.75 23.50 17.00 18.00 .25 .26 .29 I.BY 3.43 17.50 28.00 25.00 21.00 14.00 14.50 .36 .37 ~ I.B6!4 cwt. cwt. cwt. lb. lb. lb. cOle lb. 1f.l .24 . 32 .32 ton, wheat, and peanut crops will be under production controls in 1954, and growers must be in compliance with acreage allotments and marketing quotas for these crops to be eligible for price support benefits. However, a recent ruling by the Secretary of Agriculture states that failure to comply with production controls on anyone crop makes a grower ineligible to receive price support only on that crop and does not affect his eligibility with respect to others. CASH RECEIPTS FROM FARM MARKETINGS (In thousands of dollars) September State 1952 Arb:ona .. •.. $ 17.403 Louisiana ..• . 65,503 New Mexico. 12,724 Oklahoma .•. 76,477 Texas .•.... 260.649 Tolal ..... $452,756 1953 October 1952 $ 16,804 $ 29,853 56,763 77,843 10,759 42,637 56,740 75,692 208,787 298,252 $349,853 --$524,277 4 13 50 .39 b •. b •. b •. cwt. twl. Marketable issues of Treasury certificates, notes, and bonds amounting to $35,466,000,000 matured or were called for redemption in 1953. Holders of the maturing or called securities exchanged $34,023,000,000, or 96 percent, for refunding issues and redeemed the remaining $1,442,000,000 for cash. Maturities of other marketable issues included approximately $5,302,000,000 of tax anlicipation bills. During 1954, Treasury financing requirements arising from maturities of marketable issues which are currently outstanding will amount to $53,716,000,000. This total includes the $5,901,'000,000 of Tax Anticipation Series certificates of indebtedness which mature March 22, 1954. 1953 $ 45,783 Cumulative receipts January-October 1952 $ 2BO,396 1953 The Commodity Credit Corporation issued approximately $:150,00),000 of 2I,4·percent certificates of interest to com· mercial bank purchasers on December 17. The Corporation's offering (announced on December 7) of participations in its price support loans on 1952.crop cotton and a portion of the 19.53 crop was oversubscribed by one and two·thirds times the amount of certificates offered. Applications for up to $50,000 were allotted in full; the basis of allotment for amounts in excess of this total was 34.5 percent. The new certificates mature August 2, 1954. A similar issue of 21/2percent certificates representing participations in a $360,000,000 pool of crop loans other than on cotton was sold by the CCC on October 28_ On December 11 the Treasury invited holders of approximately $2,200,000,000 of Series F and G savings bonds which mature in 1954 to exchange them at maturity for ~ $ 304,002 77,204 330,430 38,137 66,693 272,600 149,911 569,223 143,904 483,401 1,729,184 1,438,348 $500,417 $3,059,144 276,155 BANK DEBITS, END-Of-MONTH DEPOSITS AND ANNUAL RATE OF TURNOVER OF DEPOSITS $2,645 ,8 10 (Amounts in thousonds of dollars) SOURCE, United States Department of Agriculture. DEBITS I Price supports through the Commodity Credit Corporation will be continued at 90 percent of parity for 1954 crops of cotton, rice, peanuts, and wool; while price supports at 85 percent of parity will be in effect for oats, barley, rye, and grain sorghums. Flaxseed will be supported at 70 percent of parity. Preliminary announcements by the Department of Agriculture indicate the following minimum national average support prices for 1954 farm commodities: wheat, $2.20 per bushel; oats, 75 cents per bushel; barley, $1.15 per bushel; grain sorghums, $2.28 per hundredweight; fla xseed. $3.14 per bushel; and wool, 52.1 cents per pound. Treasury cash borrowing in 1953 through the sale of marketable issues amounted to $12,427,000,000, a postwar record total. In addition to raising $2,300,000,000 by increasing weekly nfferings of 91·day bills, the Treasury entered the market on four other occasions for $3,426,000,000 through the sale of intermediate- and long-term bonds and for $6,701,000,000 through tax anticipation certificates and bills. These cash borrowing operations were concentrated rather heavily in May, June, and July, principally in anticipation of a large deficit in the second half of the calendar year. DEPOSITS' Percentage change from November 1953 City Nov. Annuol rate afturnover Oct. Nov.30, 1952 1953 1953 Nov. Nov. Ocl. 1953 1952 1953 ARIZONA 86,050 13.1 14.4 13.9 LOUISIANA Monroe ............ . Shreveport . ......... NEW MEXICO 49,872 193.909 2 11 -6 -B 42,205 175.857 14.5 13.9 14.2 12.7 16.1 16. 1 Ros w ell •.•.• . • .• ••• • 27,319 5 -6 29,478 11.3 11.4 12.6 52,242 -3 -6 120,B95 -9 -B 104,042 8 -2 127,128 -2 -7 137,209 -3 -8 12,914 2 -30 1,623,480 12 -6 206,725 3 -5 477,052 -5 -6 72,495 -3 -8 1,587,039 1 -11 18,99B -9 1 110,800 -32 4 41.655 -7 -13 35,407 -1 -6 356,138 -5 2 17,805 -7 -9 52,833 8 -13 75,057 14 -11 76,245 -13 -7 52,565 100,829 97,326 97,3B9 107,345 22,304 890,899 123,607 332,9 19 80,944 1,10B,418 18,372 81,967 38,475 43,794 315,606 lB,113 57,322 65,727 99,168 12.0 14.5 12.B 15.7 15.5 7 .1 21.8 20.4 17.3 10.B 17.5 12.5 16.7 13.2 9.7 13.7 11.8 11.2 13.8 9.2 12.5 14.9 12.2 16.7 16.0 7.3 13.1 15.7 13.0 17.4 16.9 19.6 18.2 13.9 18.5 12.1 21.5 13.9 9.0 13.3 10.0 11.3 12.7 11.0 $4,086,679 16.8 16.9 Tucson .•........... . $ 92,436 -12 -4 $ TEXAS Abilene ............ . Amorillo ............ Austin ..... .. . ..... . B80u"1'Ionl . ••.•••..•• Corpus Christi ... ..... Corsicana .......... . Dalla s ...... ... .. .. . EI Paso . ........... . Fort Worth ......... . Ga lveston . ......... . Hou;lon ... .... .. ... . Loredo ............ . lubbock . ... .. ...... Pori Arthur ••• ••••••• San Angelo .. ...... . . San Antonio . ........ Texa rkana ' ... ...... . Tyler .............. . WaCO . ..........•.. Wichita FoUs ......... ----- TOlol-24 citiel . . . . ... . $5,669,695 2 -8 20.0 10.6 23.4 22.1 18.5 11.6 20.0 12.6 17.0 15.5 10..4 14.5 13.0 12.7 15.8 10.1 1 B.5 Debits to d emand deposit accounts of individuols, pa rtnerships, and corporations and of s'ales ana politictJl subdi¥i.i.::ms. t Demond d e posit occou:ifs of individuals, partnerships, and corpo rations and of stotes and p olitico I subdivisiOn!!. ~ These figures ioclude on ly one bank in Texarkana, Texas. Tolal debits for all bonks in Texarkana, TeJr.:ab~rkonsas. including two bonks locoted in the Eighth Dlslrlct, amounted to $37,967,000 for the month of November 1953. I 11 MONTHLY BUSINESS REVIEW CONDITION STATISTICS Of WEEKLY REPORTING MEMBER BANKS IN LEADING CITIES CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS (In thou lands of dotlon) Eleventh Federal Reserve Distrid De~, 15, Dec. 15, Total gold certiRcote relONes ............... $ Discounts for member bonks ••••• ...••.•.•.. Industrial advances ••• •. ......• ••••.••...•• U. S. Government securities ................ . 1953 74.4.718 38,238 769,540 16,000 $ 801,205 45,796 675 1,691 1,002,715 1,041,628 1,003,267 1,094,074 1,111.765 1,060,874 540 991,394 1,037,730 1,031,544 754,458 759,099 742,586 o foreign loons on gold .... ........... • ..... Total earning assets ......•. . ..• •.•.•..•.• . Member bank reserve deposits .•. . ..... ... .. Federal Reserve notes in actuol circulation ..••. (In Ihousands of dollars) Nov. 15, 1952 1953 Item o o other series of savings bonds. Individual owners of the rna· turing securities may reinvest in Series E and H bonds up to an annual limit of 20,000 for each of these series, Any owner (individuals, as well as others) may reinvest in Series J and K bonds, which have a combined annual limitation of $200,000 issue price, Series E and H savings bonds yield 3 percent, compounded semiannually, if held 9 years, 8 months to maturity; Series J and K bonds yield 2.76 percent, compounded semiannually, if held 12 years to maturity, Of course, owners of Series F and G bonds wIDch mature in 1954 may redeem them for cash. The volume of spending by individuals and others in the District during November, as reflected by debits to deposit accounts reported by banks in 24 cities, declined 8 percent from October but rose 2 percent over November 1952. The October·to·N ovember reduction is more than accounted for, ~ however, by the fewer business days in November, as daily , average charges to deposit accounts in that month were ap· proximately 4 percent above those in October, The annual rate of turnover of deposits in November was 16,8, as com· pared with 18.5 in October and 16,9 in November 1952, ~ The principal changes in the condition of the Federal Re· serve Bank of Dallas between November 15 and December 15 included increases in total earning assets and ll·K notes in actual circulation and decreases in gold certificate reserves and member bank reser ve deposits. The rise in earn· CONDITION STATISTICS Of All MEMBER BANKS Eleventh Federal Reserve District (In mililani of dollors} No.... 25, 1953 Nov. 26, 1952 Oct. 28, 1953 Cosh in voulte .... . ... ...............•........ Ba lonces with bonks In the United Stales ........ .. Ba lance, with banks In foreign countries· .......... COloh items In procen of collection ••••••. ••• .. •••• Otller assets e ..•............................. $2,996 2,439 454 1,022 123 1,079 2 371 147 $2,835 2,487 430 1,067 132 1,082 1 331 139 $2,971 2,367 443 954 136 1,073 2 306 139 Item ASSETS Loans and discounts ..... .....•.. . ..•.... .. ... . United Siotes Government obligations ••••...••... Other securities ............................... Reser ....s with Federal Reserve Bonk .•••......•..• TOTAL ASSETSe ...•...• .....•. ,., . .. . , ..... 8,633 8,504 ~ LIABIlITIES AND CAPITAL Demand deposih of bonks .•......•. , .......• ,. Other demand deposits ........... , ............ Time deposits ................ , .. ,', ...•...... 1,005 6,015 935 1,046 6,036 782 984 5,811 937 Tolal deposits ....... ..•. , ........... , ' ,. ," Borrowings e ........... , . , ...... , , . , . , ..• ... , Other liabilities e ............................. Total capital accounts· .. .•...... .. ... . ,",., .. 7,955 43 65 570 7,864 42 66 532 7,732 32 59 568 TOTAL lIABILIneS AND CAPITAL ACCOUNTSe .. 8.633 8,504 ~ ..-Estlmated. Item Dec. 16, 1953 Dec. 17. 1952 No ... 18. 1953 ASSETS Commerciol. industrial, and agricultural loans.... 51,249,949 $1,193,714 $1,221,493 10.670 11,912 11,985 loons to brokers and dealers in securities ...... 67.867 77,339 76,016 Other loons for purchasing or carrying securities. 130,136 134,078 134,687 Real estate loons ........... , ..•........... 11,623 16,838 9,039 loons to bonks ............................ 410,835 363,802 408,325 All other loons ... ...... ........ ........... Gross loons ............................. leu reserves and unallocated charge·ofh .... 1,892,511 17.803 1,777,812 18,655 1,869,985 17,803 Net loans ... . .... .. ... ................. -187.129 -- 1,874,70 8 1,759,157 1,852,182 U. S. Treasury bills . ........................ U. S. Treasury certlAcate! of indebtedness . .. ... U. S. Treasury noles .. . .. ......... .......... U. S. Government bonds (inc. gtd. obligations) ..• Other securities ........ , ..•................ 259,150 208,425 672,627 196,425 243,000 149,864 216,637 701,410 180,439 174,596 263,214 210,386 661,021 195,862 Tota I investmenh ................ . ....... Cosh items in process of collection ............. Balances with banks in the United States ....... Ra la nces with bonks in foreign countries ..... ... Currency and coin ... . ..................... Reserves with Federal Reserve Bank ........... Other assets ....... . .. ............. ....... 1,523,756 342,0 61 523,406 1,331 49,550 601,692 106,015 1,491,350 314.916 454,986 886 47,867 619,860 100,161 325,152 484,251 1,350 48,586 591,233 100,109 TOTAL ASSETS ........................ 5,022,519 42: 89,183 4,907,942 LIABILITIES AND CAPITAL Demand deposits Individuals. partnership I, and corporations .... United States Government .•............... States and political subdivisions ..•......... Banks in tile United State, ................. Bonks in foreign countries ............•.... Ce rtified and officen' checks, etc............ 2,622,364 85,787 242,135 939,891 10,931 59,063 2,610,691 100,394 207,066 929,113 11,269 57,114 2,559,540 , 26,8045 Total demand deposits .................. 3,960,171 Time deposits Individuals, portnershipl, and corporations ... , United States Government ................. Poslal savings ........................... States and political subdivilions ...... .. .... Bonks in Ihe U. S. and foreign countries ..... . Total time deposits ................ ..... Total deposils ............•. , .... • ... Bills payable, rediscounb. etc ................. AU other liabilities ................•........ Toiol capitol accounts ....... .. ............. TOTAL LIABILITIES AND CAPITAL ACCOUNTS 1,505,079 227,622 909,837 11,556 57,931 ---3,915,647 3,893,331 108,704 1,788 431,878 10,386 450 57;765 870 501,964 10,144 450 84,613 1,938 636,043 501,349 599,109 .... 416,996 4,492,440 14,800 61;752 295,635 54,937 321,065 5,022,519 ~183. 4,907,942 514.957 10.144 450 ",596,214 42,100 63,716 320,0489 39,500 ing assets reflects principally an increase in holdings of United States Government securities and a less·than·offsetting reduction in discounts for member banks, Federal Reserve notes of this bank in actual circulation on December 15 amounted to $754,458,000 as compared with $759,099,000 on December 15, 1952. Loans of the weekly reporting member banks in the District rose $22,526,000, or 1.2 percent, between November 18 and December 16, which contrasts with a mild reduction during the comparable 4 weeks of 1952. The expansion in loans for commercial, industrial, and agricultural purposes accounted for somewhat more than the total increase and was weighted heavily by financing related to the price support program of the Commodity Credit Corpora· tion. In most weeks, construction firms, wholesale and reo tail trade establishments, and manufacturers of metals and metal products repaid substantial amounts of borrowings; other manufacturing firms reduced their outstanding bank indebtedness but on a somewhat smaller scale_ On the other hand, sales finance companies, commodity dealers, and a group of miscellaneous borrowers increased their borrowings on balance. MONTHLY BUSINESS REVIEW 12 encouraging in view of the curtailment in crude production and refinery runs which has been necessary during the past ~ several months because of the overstocked position in the • industry. GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS Eleventh Federal Reserve District (Averagel of daily flavrel. In thousands of dollars) COMBINED TOTAL Gross Dote demand lime RESERVE CITY BANKS Gross demand COUNTRY BANKS Gross lime demand Time November 1951.. $6,592,874 $686,144 53,101,804 $376,802 $3,491.070 $309,342 November 1952.. 7.025,207 780,156 3,338,376 421.427 3,666,831 358,729 Joly 1953 •...... 6,572,440 901,614 3,152,963 495,431 3,419,477 406,183 AugusI 1953 ..... 6.555,188 903,610 3,153,585 495,813 3,401,603 407,797 September 1953. 6,647.956 912,860 3,236,056 501,477 3,411,900 411,383 October 1953. . . 6.719,484 925,358 3,263,306 508,529 3,456,178 416,829 November 1953.. 6,948,849 936,175 3,369,875 516,162 3,578,974 420,013 Other changes in loans during the 4-week period include relatively small increases in real estate and consumer-type loans and reductions in loans to banks and loans for financing security transactions. On December 16, loans of the weekly reporting member banks amounted to $1,892,511,. 000, reflecting an increase of $114,699,000, or 6.5 percent, over the comparable year·earlier total. The weekly reporting member banks increased their in· vestments $18,677,000, or 1.2 percent, to a total of $1,523,. 756,000 in the 4 weeks ended December 16. Holdings of Treasury bills rose $12,533,000, or 7.2 percent; investments in Government bonds, which rose by a relatively smaller amount, increased $11,606,000, or 1.8 percent_ Portfolios of Treasury certificates of indebtedness and notes were reo duced moderately. Deposit trends during the 4 weeks included increases of $66,840,000, or 1.7 percent, in demand deposits and $36,934,000, or 6.2 percent, in time deposits. The expansion of demand deposits reflects principally gains in the accounts of individuals and businesses and in interbank deposits. De· mand deposits of the United States Government were drawn down sharply. The marked rise in time deposits was weighted heavily by an increase in the accounts of states and political subdivisions but also included a substantial increase in depos· its of individuals, partnerships, and corporations. On Decem· ber 16, total deposits of these banks were about 4 percent above a year earlier. NEW PAR BANK The Ruidoso State Bank, Ruidoso, New Mexico, a newly organized nonmember bank located in the tern· tory served by the EI Paso Branch of the Federal Reserve Bank of Dallas, was added to the Par List on its opening date December 1, 1953. The officers are : T. B. Hood, Executive Vice President and Cashier; 0, !, Hull, Vice President; and Lois A. Tucker, Assistant Cashier. Continued growth in the Nation's petroleum industry in 1954, although at a slower rate than in most other postwar years, is indicated by the recent forecasts of the Bureau of Mines. The outlook for continued expansion, however, is The total demand for petroleum in 1954 is forecast at 8,340,000 barrels per day, or 3.4 percent higher than the estimated 1953 total. In 1953, total demand increased an estimated 4.5 percent. Exports are expected to decline about 20 percent in 1954, but the decrease will be more than off· set by a gain of 4.6 percent in the daily average domestic de· mand. Although 1954 may show a further net increase in stocks, the rise probably will be substantially less than in either of the two preceding years. To meet the expected increase in demand, a further ex· pansion in total new supplies of 173,000 barrels per day wHl be required, which is less than half the rise that occurred in 1953. The Bureau of Mines anticipates that 90,000 bar· rels per day of the additional new supplies will come from domestic crude production; 45,000 barrels per day, from natural gasoline and other light oils; and the remaining 38,000 barrels per day from imports. Thus, domestic crude production will increase 1.4 percent in 1954, or to 6,556,000 barrels per day; production of natural gasoline and other light oils will rise 6.8 percent, or to 710,000 barrels pel' day; and imports will increase 3.6 percent, or to 1,096,· 000 barrels per day. Despite the outlook for further growth next year, the • petrolemn situation in November and early December continued to be characterized by relatively heavy stocks and price easiness. Mild weather in November held down the demand for heating oils, although demand picked up substantially around mid· December under the stimulus of mark· edly colder weather in the North and East. Demand for the four major refined products at refineries and bulk terminals during the 5 weeks ended December 19 averaged an estimated 6,761,000 barrels per day. Although, at this level, demand was down about 3 percent from the corresponding weeks of 1952, the decrease from a year earlier was smaller than that of the preceding 5·week period. During the 5 weeks ended December 19, gasoline was the only product to show a year·to·year increase, with a 4.percent gain. The demand for distillate fuel oil was off 7 percent from a year earlier; kerosene demand was dOlVn 6 percent; and residual fuel oil showed a 10-percent loss. Prices of refined products, with the exception of residual fuel oil, continued to show wealrness during November and early December. GuH Coast refineries posted small reduc· tions in their prices for regular gasoline. Marketers on the Atlantic seaboard generally announced decreases in the prices of both regular and premium gasoline, while shading of gasoline prices in midwestern markets continued. More· over, distillate fuel oil and kerosene prices were reduced about 712 cent per gallo" in east coast markets. However, residual fuel oil prices in the Middle West rose appreciably. The price of ' 0. 6 fuel oil, Oklahoma Group 3 basis, has increased about 50 cents per barrel since J uoe. 4 MONTHLY BUSINESS REVIEW Crude imports during the 5 weeks amounted to 592,000 barrels per day, as compared with 615,000 barrels per day in the corresponding 5 weeks a year earlier. CRUDE O il, DAilY AVERAGE PRODUCTION (In thousands of barrels) Change from November Area 1953 1 ElEVENTH DiSTRICT ••... . ... 2,931.1 2,622.9 584.8 969.3 238.6 76.6 753.6 201.4 106.7 3,275.9 6,207.0 Texas ......... . . . .. . .. . Gulf Coast ............ West Texas . . ......... East Texas (proper) ..... Panhandle •. •. • . . ..... . Rest of State . • ........ . Southeastern NeW Mexico . . Northern Louisiana . .. . . .. . OUTSIDE ElEVENTH DISTRICT. UNITED STATES ••••••••.. • • SOURCES: I No,¥ember 1952 2 October 3,244.6 2,959.7 667.2 1,184.9 253.4 72.7 781.5 170.6 3,046.2 2,740.9 1953 1 610.7 1,031.7 244 .9 75.-4 778.2 200.5 114.3 104.8 3,242.4 6,.487.0 3,194.5 6,240.7 November 1952 October 1953 -313.5 -336.B -82.4 -215.6 -115.1 _118.0 -25 ,9 _62.4 -lA.8 -6.3 1.2 -24.6 .9 1.9 81.4 -33.7 3.9 -27.9 30.8 -7.6 33.5 -280.0 Estimated from Americon Petroleum Institute weekly repor", 3 United States Bureau of Mines. Aggregate stocks of maj or refined products declined mod· erately during the first week of December, but stocks at mid· December were still substantially higher than a year earlier. Both gasoline and distillate stocks on December 19 were 17 percent above a year earlier, and stocks of kerosene and residual fuel oil were up 13 percent and 3 percent, respectively, Crude oil stocks, after reaching a peak at mid·October, subsequently have shown a declining trend. On December 19, crude stocks in the Nation amounted to 277,200,000 barrels, or about 10,700,000 barrels less than the October high. Almost one· half of the decrease was in stocks of Dis· • trict origin. Despite the recent decline, the Nation's crude , stocks at mid·December wcrc still 5,400,000 barrels higher than a year earlier. Stocks of District origin, however, were 3,800,000 barrels less than a year ago. • 13 Crude oil production in the District during the first part of December continued the downward trend which bas been evident since August. District production in the first 19 days of December averaged an estimated 2,906,000 barrels per day, which is 26,000 barrels less than the November rate and 392,000 barrels less than in December 1952. It appears, however, that the declining trend will be haltcd in January. Although the Texas Railroad Commission held the number of permitted state·wide producing days in January at 17, the same as in December, an increase in the number of pro· ducing days in the Spraberry trend from 11 to 17, together with new wells coming into production, may be expected to raise District output moderately. The downward movement in crude production in the Nation apparently ceased in December, with daily average production during the first part of the month amounting to 6,222,000 barrels, or 15,000 barrels more than in November. This rate, however, is 412,000 barrels per day less than in Dccember 1952. The year·to·year decline in the Nation's pro· duction is largely accounted for by the decrease in District production. Imports of crude oil and refined products during the 5 weeks ended December 19 were at about the same level as in the preceding 5 weeks. Residual fu el oil imports were up, but crude imports declined for the second successive 5·week period and averaged lower than at any time since February. After rising somewhat in November, refinery runs in both the District and the Nation were at a reduced level during the first part of December. Crude runs to refinery stills in the District during the first 19 days of December averaged an estimated 1,995,000 barrels per day, as compared with 2,039,000 barrels per day in November and 2,076,000 bar· rels per day in December 1952. In the Nation, refinery crude runs in the first part of December averaged 6,929,000 bar· rels. This is about 83,000 barrels less than the November average and 23,000 barrels less than in December a year earlier. Operable refining capacity (that is, refining capacity ex· clusive of that which is shut down in need of major repairs) in this District rose 6.5 percent during the year ended Sep· tember 30, 1953, and on that date totaled 2,300,000 barrels per day, according to a recent survey of the American Pe· trolcum Institute. In thc Nation the increase amounted to 6.9 percent. Further substantial growth in refining capacity in both the District and the Nation during the next 12 months is indicated by the survey. Nevertheless, the projected ex· pansion in each case is somewhat less than in the period just completed. Most of the additions to the refining capacity in the Dis· trict during the past year, as well as the anticipated gains in 1954, center on the Texas Gulf Coast. On September 30, 1953, the Texas Gulf Coast had an operable refining capa· city of 1,867,000 barrels daily, which accounted for the major portion of the District's refining capacity and repre· sented the largest concentration of refining capacity in the Nation. The operable refining capacity on the Texas Gulf Coast constituted 24 percent of the national total. As 1953 came to an end, the states in the Eleventh Federal Reserve Dis· trict could look back upon another year of industrial advancement. While there were fewer multimillion· dollar plants established in 1953 than in 1952, there was a steady gain in small·plant development. It also is significant that many of tbese small plants were located in towns where there had been few, if any, industrial facilities, Of course, this situation has diversified the economic base of such towns. Since the Korean truce, the establishment of new defense facilities has slackened, and production and employment in the existing ones have been reduced. For example, through October the ordnance and aircraft manufacturers in the Dis· trict had curtailed employment by nearly 11,000 workers. However, gains in the primary metals, apparel, and chem· ical industries kept District manufacturing employment ahead of 1952 for the first 10 months of 1953. In Texas, employment in the transportation equipment industry - which includes automobile, aircraft, and ship. building companies - has fluctuated widely over the past MONTHLY BUSINESS REVIEW 14 BUILDING PERMITS ========================================I=I=m=O="===1=9=53~----~ 41 I~ TRANSPORTATION EQUIPMENT EMPLOYMENT IN TEXAS 1950·1953 THOUSANDS Perc.ntage chang. in va luation from 11 months 1952 Percentage chonge in valuation from THOUSANDS •• •• November 1953 NlJITIber Oty LOUISIANA Shreveport ••• • Nov. Oct. 1952 1953 Numb er Valuation 275 2,300,170 194 -3 3,674 109 2,972,531 244 898,648 - 7 1,391,750 -8 489,377 42 1,723,945 24 9,560,059 -34 834,500 -29 2,801,418 23 112,912-63 13,803,091 34 1,649,170 31 214,094 4 2,674,385 -3 495,389 -11 435,806 114 790 -25 -4 3 -7 8 -22 35 -19 - 18 -55 39 59 -60 -21 -53 -16 1,147 2,916 2.721 2,470 4,996 19,628 3,152 8,538 1.D62 10,944 2,539 1,675 16,716 3,435 766 9 86,379 Valuation $ 21,798,325 20 10,132,825 17,934,3 17 25,821 ,829 105,812,600 18,333.799 40,638,502 4,586,475 121.223,790 15.918.936 3,093.955 45,221,865 10,160,325 6,710.024 28 -21 12 12 32 _4 29 -3 -27 15 -16 -19 12 -20 -63 $48 4,155,127 2 TEXAS Abilene ••••••• 154 Amarillo •••••• Austin ••••••• • 211 184 381 1,521 206 544 98 811 148 114 1,002 184 80 Beaumont ••••• Corpln Christi •• Dollas •••••••• EI Paso • • •• ••• Fort Worth •••• Golvoston ••••• HOlulan •••• ••• •• 1950 1951 SOURC;ES -Ttull E ..,ht'p'mu! 1953 1952 Lubbock ••• ••• Port Arthur • •• • San Antonio ••• •• Waco •• ...• • • Wichita Falls••• Tolol •• • • ••••••• 6,022 $42,357,245 C~ml .. J OfI 8 28,611,101 8,156,459 U.s. lurlaY of L•• or $11' 1 "k,. 4 years, From January 1950 to December 1951, employment in this category increased 93 percen t, but from the latter date until November 1953, it decEned 11 percent. These fluc· tuations stem primarily from changes in defense contracts and automobile production schedules. Transportation equip. ment companies employ nearly 13 percent of all manufac· turing workers in Texas. In the number of employees, this industry is exceeded only by the food industry, which em· ploys 14 percent. From September to October, employers in the five states of the District added 9,500 nonagricultural workers, to raise the total to 3,868,500, or 1 percent above October 1952, A gain of nearly 13,000 in government and construction em· ployment more than offset moderate losses in service, min· ing, and manufacturing employment. Major declines in trans· portation equipment and machinery, except electrica l, in· dustries accounted for most of the decrease of 2,900 in man· ufacturing employment, but manufacturing employment in October, totaling 728,800, was still 1 percent above Octo· ber 1952. NONAGRICULTURAL EMPLOYMENT Five Southwestern States 1 Percenl chang e Oct. 1953 from Number of persons Type of employment October 1953p Total nonagricultural wage and salary workers •• 3,868,500 Monufacturlng ••••••••••• 728,800 Nonma nufactlJfing •••••••• 3,139,700 226,900 Mining •••••••••••••••• Construction . •••• . ••••• 295,200 Tronlporto tlon and public 41 0. 100 utillti.s •••• •• • ••• •• •• 977,500 Trade •••• ••••• ••••• •• 150,200 Anonce ••••••••• . ••••• 447,1 00 Servicfl! • • ••••••••••••• Gayernment •••• •• • •••• 632,700 October 1952 September 19 53 Ocl. 1952 Sepl . 1953 3,828.300 719.300 3,109,000 221,100 298,000 3,859,000 731,700 3,127,300 230,200 288,700 1.1 1.3 1.0 2.6 -.9 .2 -.4 .4 -1.4 2.3 412,600 971,700 '''2,400 439.900 623,300 409,000 974.100 150,200 449,000 626.100 _.6 .6 5.5 1.6 1.5 .3 .3 0 _.4 1.1 Unofficial estimates of total nonagricultural employment in District states show further gains in November and De· cember, bringing the end·of.year total to ahout 3,9l0,000, or slightly more than a year ago, Manufacturing employ. ment in December is indicated at 727,500, or about 4,600 above a year earlier. Averaue weekly earnings of Texas manufacturing em· ployees increased further from September to October, with • the figure raised to $71.40, which is $2.60 above the average in October 1952. However, November earnings declined to $71.23, compared with $69,50 a year earlier. Average weekly hours worked by these employees rose from 41.5 in September to 42.0 in October but decreased to 41.9 in November, compared with 42.9 hours per week in November 1952. Nearly all the October·to·November decline in average weekly earnings occurred in nondurable goods manufacturing, On the other hand, during the past year the largest gains in average weekly earnings were in nondurable goods manufacturing, especially in chemicals and food·processing industries, Unemployment in Texas remained unchanged from Sep. tember to October. The total for October was about 107,000 workers, or 3.9 percen t of the nonagricultural labor force, As was true in each of the earlier months of 1953, unem· ployment in October was above that of the comparable month in 1952. VALUE OF CONSTRUCTION CONTRACTS AWARDED (In thousands of dollars) 1 Arizona, louisiana, New M.Jtica, Oklahoma, and Te Aas. p_Preliminory. SOURCEI State employment agenci.s. January Area and typ s Nove "l'lber 1953p --- Nov • ."ber 1952 Oct.,ber 1953 1953 November 1952 99,695 $ 113,3 15 $ 1,174,589 $ 1,276,360 ElEVf'.ITH DI5TRICT .... S 111,977 $ 57,386 Resids"IliaJ. • • . . . . . . 31,120 39.314 469,77 4 527,855 All other. . • . • • • . • . • 80,857 60,381 55,929 704,815 7 48,505 U\.IITE:> STATES' ••••.• 1,394,050 1,248,803 1,892,388 16,143,699 15,307,552 Re;idantiol. • • . • . • . • 611,857 528,429 634,582 6,173,332 6,228,924 An other •.•...•.•.• 782,193 720,374 1,257,806 9,970,367 9,078,628 I 37 states easf of the Rocky Mountains. p -Preliminary. SOURCE: F. W. Dodge Corporation. « 15 MONTHLY BUSINESS REVIEW .. Construction activity in the District was at record or near• record levels during 1953, and the volume of construction put in place probably was at an all-time high_ However, the value of construction contracts awarded in the first 11 months of the year was 8 percent less than that for the comparable period of 1952, indicating the probability of some slight easing off in construction activity in 1954. Construction contracts awarded in the District in November are valued at an estimated $111,977,000; this is about the same as in October and is 12 percent greater than the total for November 1952. Residential awards are valued at $31,120,000, which is down sharply from October and is one of the three lower monthly totals since 1951. Other awards in Kovember are valued at 80,857,000, reflecting a year-to-year gain of 34 percent_ Prices of construction materials continued to rise during 1953. Indexes of wholesale prices in September, the latest month for which figures are available, show that gains of 4 percent or more from a year earlier were made by structural clay products, flat glass, building paper and board, concrete ingredients, concrete products, prepared asphalt roofing, and gypsum products. Smaller increases are reported for millwork, plywood, heating equipment, fabricated structural metal products, and plumbing equipment. Costs of construction machinery and labor also rose further. Lumber prices, on the other hand, were slightly lower than a year earlier. DOMESTIC CONSUMPTION AND STOCKS OF COTTON (Boles) AugUst-October October Area 1953 l Odober 1952 CONSUMPTION Total Texas mills • •••••••••.• U.S. mills .... .. ... . . . . Daily average Texas mills ••••• • ...•.. U. S. mills ••• ••.•...... STOCKS, U. 50-End of period Consuming establishments .• • 14,509 872,128 14,735 915,568 586 35,237 595 36,992 September 1953! 11.59 1 38.362 38,116 702,425 2,300,402 2,396,224 594 36,022 1,506,192 1,300.832 1,296,811 Public storage and compresses ........... . 9,406,484 6,753,266 5,852,917 I Five weeks ended October 31 . , Four weeks ended September 26. SOURCEI United States Bureau of the Census, This se oson last se050n 598 35,804 594 37,328