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MONGJrHL'lC

REVIEW
FEDERAL

RES E R V E

BANK

June 1,1952

DALLAS, TEXAS

Vol. 37, No.6

DALLAS

BROILER PRODUCTION IN THE ELEVENTH DISTRICT

Commercial broiler production in the Eleventh Federal
Reserve District has had a phenomenal rate of growth during
the past decade. Since 194.0, annual production has risen
from 9,000,000 birds to more than 61,000,000 birds, or 570
percent. This multiple increase in broiler production, reflecting the increased Consumer demand for poultry meat, has
been accompanied by a rapid expansion in production of
hatching eggs, an increase in output of broiler chicks by commercial hatcheries, an increase in production of high-quality
poultry feeds, marked improvement in poultry management,
~ the development of new measures for disease control, an
expansion of poultry processing facilities, and an extension
of marketing and distribution channels.
The broiler industry, including production, processing,
and distribution, is rapidly becoming an important source
of income in many parts of the Eleventh District. Commercial broiler production in the states of the District returned
to growers in 1951 a cash income of around $51,000,000, or
more than was obtained from the production of such other
farm commodities as farm chickens, mohair, turkeys, corn,
oats, hay, or peanuts. Broiler raising is one of the more

important sources of farm income in many counties of the
District, including McLennan, Gonzales, Nacogdoches,
Shelby, Angelina, San Augustine, Cherokee, Rusk, and Sabine
Counties, Texas; Pima County, Arizona; Choctaw County,
Oklahoma; and DeSoto and Lincoln Parishes, Louisiana.
The broiler industry in the District has grown so fast
during the past decade that questions sometimes are raised
concerning its long-term soundness. Some bankers, feed
dealers, and others engaged in financing the broiler business
have expressed anxiety with regard to the wisdom of helping
to promote further development and expansion of the industry_ They are concerned lest the produclion of broilers greatly
exceed the demand, or the rapidity of expansion be at the
expense of efficiency, with ultimate losses to producers and
creditors alike_ Many others are enthusiastic as to lhe longrun future and profit possibilities of this industry. The following pages of this article indicate that the outlook for the
industry is generally good, in view of the growing demand
for broilers and the increasing efficiency with which' they
are produced and marketed.
Commercial Broiler Versus Farm Chicken

GROSS FARM INCOME FROM BROILERS I
Four Southwestem States2
(In thousands of dollars)
Total
Year

1934 ...........
1935 .... . _....
1936 ..........
1937 ..........
1938 .... _.....
1939 .... _.... _
1940 ...... . .. .
19.41 •••• • •....

1942 ..........
1943 ..........
1944 ..........
1945 ..........
1946 .. _ .......
1947 ......... .
1948 ..........
1949 .. ........
1950 .... _.....
1951 .... ......

•

Arizona

Louisiana

32
60
92
134
161
226
323
504
787
517
678
566
517
837
875
1,033
1,085

108
132
147
20 8
202
187
248
314
629
1,003
1,057
1,240
1,174
1,326
1.738
2,358
1,750
3,912

Oklahoma

450
539
684
729
768
666
595
476
497
675
583
858
607
718
998
1,513
2.160

TeJl.Qs

510
720
900
1,080
1,440
1.500
2,448

3,168
5,683
8,395

7,540
9,245
9,468
8,748

.. statel

1,068
1,423
1,791
2,109
2,5.44
2,S14

3,517
4,281
7,313
10,860
9,697
12,021

Twenty years ago most of the chicken meat produced and
consumed came from surplus cockerels and birds culled
from laying flocks_ At that time, laying hens in the United
Stales averaged only about 90 to 95 eggs per hen per year,
but in 1951 layers averaged 1'45 eggs each. As improvements
in poultry developed, there were fewer laying hens in relation to egg output, and, relative to the growing number of
consumers, there was less and less poultry meat available
from the layin g flocks. Commercial broiler raising, therefore,
was started to fill that "gap_"

The growth of the commercial broiler industry has been
accompanied by Lhe development of a new kind of chicken25,231
Lhe broiler chicken. Poultry breeders, in effect, have re30,811
4,295
51,635
designed the chicken in recent years and have come up with
what they enthusiastically describe as a new balloon-breasted
I Includes home consumption, which II ress thon 1 percent of tolal production.
2 There Is some scattered production In New Mexico, but no officiol estimates are a't'ailable.
model. No longer a leftover from the laying flock, it is an
SOURCE; United States Department of Agriculture.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
14,148
20,485
25,868
.42,343

11,815

11,309
17,721

MONTHLY BUSINESS REVIEW

BROILERS PRODUCED
M Ill"
lonl
I,~

00
00

I
UNITED iTATE? _

~88°
6 00
400

Y
4z __ -~J'i"_---"- T-

80
60
40

,If!..::... DELAWARE,

"..-

" ... "

~ MA~:~'ND,

... " - 1--- VIRGINIA I

,.,.

.r I .....

,"~
t:.(
81-

ARKANSAS..,.. ~

8
/ 4 r- ---:.•••:::

.....

2~.

...

.;;;6..···,·..........

/ -

;*
~
.~4 -

......... /.~..

20r- -".'

MI 11011.
J

00
00
60
4o
20

o
o

GEORGIA

.,,'" .
1940

1945

,.>0

200
I

..'
··2

Two states competing for third place are Arkansas and
Texas, which in 1951 produced 69,800,000 and 50,400,000
broilers, respectively_ Texas has gained third place in the first
half of 1952, as indicated by broiler chick placement reports. Other important producing areas are in North Carolina, California, Missouri, Maine, Connecticut, Florida, Indiana, Alabama, and Mississippi.

entirely new bird- a superior meat·type chicken. It has a
deep, broad breast, plumper thighs, drums6cks the shape of
bowling pins, and more meat in relation to bone throughout.
It also has fewer pinfeathers, is uniform in size, faster grow·
ing, and makes more efficient use of feed than does the common-type farm chicken.
This new kind of chicken also fits well into the farmers'
production line. By feeding birds to market size in 9 to 11
weeks, growers can turn out three or four crops a year and
make full use of buildings and equipment. Broilers also are
rated high in efficiency of gr,a in consumption. Many producers get an average of a pound of meat to 3 to 312 pounds
of feed; some do even better than that. Broilers are produced
in houses under conditions of close confinement and, as a
result, stay more tender and do not "run off" their gain.

Broiler production in the Eleventh District is heavily concentrated in Texas around Waco, Gonzales, and N acogdochesCenter, as shown on the accompanying map. Of the 61,397,000 broilers produced in the states of the District in 1951,
Texas accounted for about 50,4.08,000, or 82 percent. The
estimates of broiler production by states are based on commercial hatchery output of broiler chicks, with adjustments
for known in-shipments or out-shipments, and there are no
official estimates of commercial broiler production in the
respective producing areas .
Local estimates, however, reflecting the consensus of a
large number of feed dealers, hatcherymen, and processors,
indicate that production of broilers in the Waco area in 1951
totaled about 6,000,000 to 7,000,000 birds. Estimates of production in the Gonzal es area, although varying widely, seem
to center around an. output of 16,000,000 to 18,000,000.
Output in the Nacogdoches-Center area is placed at about
18,000,000 to 20,000,000, leaving some 8,000,000 to
10,000,000 scattered from the Rio Grande to the Red River,
mostly in the eastern half of the State. Production centering
around Paris, Texas, extends over into southeastern Okla- ~
homa, Since 1950, there has been a rapid growth of pro- •
duction in Louisiana, with output in the northern part of the
State centered around Ruston but extending east and west
along U. S. Highway 80, There is an extension of the Center,
Texas, area over into Louisiana as far as Natchitoches. There
is also an area of production around Tucson, Arizona.
BROILERS PRODUCED
Four Southwestern States 1
(In thousands)

Trends in Broiler Production

Total

Year

United Statcs broiler growers last year produced a record
791,000,000 birds, according to estimates compiled by the
United States Department of Agriculture; production in
1952 is expected to set a new record of some 850,000,000 to
900,000,000 birds. Production is heavil y concentrated in
several areas, the most important through 1951 being the
Del-Mar·Va section, This area, which is comprised of parts
of Delaware, Maryland, and Virginia, last year produced
about 160,000,000 birds; other areas in these same states
produced about 26,000,000, bringing the 3-state total to
186,000,000.

193£, • .. • ... . .
1935 ..........
1936 ..... ... ..
1937 ..........
1938 ..........
1939 ..........
1940 ..........
1941 .. ........
1942 .... .... ..
1943 ..........
1944 ..........
1945 ••. .•• ....
1946, ••..• ....
1947 ••.•.•. ...

1948 •... .•....
19.49 • . • •• ... • .

1950 ......... .
1951 •• . •••••••

Arizona

louisiana

50
100
140
280
280
360
450
610
793
476
738
517
450
729
838
1,048
1,100

250
300
350
400
450
500
600
700
1,100
1,540
1,232
1,540
1,309
1,244
1,617
2.426
2,'46
4,507

Oklahoma

1.000
1,100
1.200
1.350
1,450
1,600
1,400
1.100
900
1,000

800
1,000
800
704
1,056
2,006
2,909
5.382

Texas

.4 states

1.500
2.000
2.500
3,000
4,000
5,000
6.800
8,800
12,300
14,400
12,600

2,750
3.450
4,150
4,890
6,180
7,380
9.160
, 1,050
14,910
17.733
15,108
17,138
15,100
13.001
17.610
30.560
40,130
61,397

13,860
12.474
10.603
14,208
25,290
33,383
50.408

I There is some scattered production in New Mexico, but no offlcial edimates are a.,oiloble.
SOURCE: United States Oepartment of Agriculture.

At the present time, however, Georgia is feedin g more
broilers than Del-Mar-Va, according to reports on weekly
broiler chick placements on farms; producers in the latter
area have curtailed production, due partly to the presence
of a poultry disease called air sac, which is causing heavy
losses. In second place last year, Georgia farmers produced
about 87,000,000 broilers.

Farm Prices of Broilers
Broiler prices in the Eleventh District in the postwar years
naturally have shown some increase, although they are low

•

MONTHLY BUSIND3S REVIEW

£::) CONC ENTRATED

PRODUC TION

~ SCATTE RED PRO DUC TIO N

_._---

.stln

~~ZOI.'

son~:
An t onio

COMMERC IAL BROILER PRODUCING AREAS
Eleventh Fede ral Reserve Distr ict

in comparison with farm commodities generally and with
meat animals in particular; there have been short periods
of market instability during which prices of broilers dropped
to very low levels, as in late April and early May of this year.
In Texas, for example, prices of all farm commodities in 1951
averaged almost 260 percent above the 1940 level; beef cattle
and lambs were up over 300 percent, and hogs were 280 percent higher, while broiler prices were up only 67 percent.
An explanation of these different levels of prices leads
back to the increased efficiency in broiler production dis·
cussed previously. As growers have produced more and more
pounds of broiler with a given poundage of feed and, at the
same time, cut sharply the losses from disease, the produc·
tion costs per pound of broiler have declined steadily rela·
ti ve to the costs of producing a pound of beef, lamb, or pork.
Broiler growers have multiplied production to such an extent
that market prices of broilers have been held down nearer
the cost·or.production level, with the result that much of the
benefit from increasing production efficiency has been passed
on to the consumer. Beef cattle, lambs, and hogs have not
shown such a marked increase in efficiency of feed consump·
tion; moreover, had they done so, production of these ani·
mals could not have been expanded as rapidly as the output
of broilers because of the longer production period required .
•
•

Broiler prices have a number of other distinguishing char·
acteristics. They generally hold rather steady but are subject
to occasional short periods of marked instability. For example, prices in Texas in early April of this year were around
26 cents per pound for first-quality birds. Within a few days

the price dropped to 18 cents, held for several days, and then
rose to 28 cents.
The real causes of such price changes are somewhat ob·
scure, but the volume of production in relation to demand
unquestionably is an important factor. During April and
early May the volume of broilers ready for the market was
running at an all-time high . Since broilers are a perishable
product that must be marketed when the desired bird weight
is reached, a heavy overhanging supply of birds may have
a temporary depressing effect on market prices.
Price irregularities also may reflect the efforts of buyers
to adjust their stocks and operations to the supply.demand
relationship that they foresee. During the first quarter of this
year, for example, as processors anticipated a large flow of
production to the market, they tended to reduce substantially
their holdings of dressed and frozen poultry in anticipation
of the decline in broiler prices that might be expected under
conditions of temporary excessive supply. Factors such as
these, working both at the production an~ marketing levels,
probably contributed to the market weakness that occurred
in late April and early May.
With broiler production growing so rapidly and broiler
prices affected by many factors other than production, it is
difficult to point to any definite seasonal price pattern. At
least a seasonal pattern is too indefinite to be of much benefit
to broiler producers in planning their operations. It is
true, however, that broiler prices tend to be lower in Dc·
tober, November, December, and early January than the

MONTHLY BUSINESS REVIEW

FARM PRICES, TEXAS
1940-100

PEIIC m

"'"0
'0

CENT

·_·l
Ii'

40 0

.;~-.

\.-:,Y·'
v ~, .. ..:;,
7i--/·····~~

HOGS-l!
30 0

•

/1
.-

0/'

........ ;..;

~'"
/ . <."....... ,

..,.::;I

3 00

1.~.(.lAMBS

,/'
BEEF

(.".

CATTLq·

/'~L....--

~ROILERS

2 00

~:.
10 0

1940

1942-

I 00

1944

1946

9'8

19SO

The principal areas of competItIOn with Texas in the
broiler business are Arkansas, Mississippi, and Georgia.
Their distribution zones overlap to a marked extent; and as
growers in each of these fou r states compete in many of the
same markets, their prices should be comparable, allowing
for dilIerences in costs of transportation. Arkansas has
shipped many broilers to Texas in past years, although Texas
consumption of Arkansas broilers has declined considerably.
Okahoma and Louisiana send broilers in, primarily because
of the lack of processing facilities in border areas. Some
Mississippi and Georgia broilers have been marketed in
Texas at times. Furthermore, as dressed broilers from some
of the larger poultry processing plants in Texas are marketed
by national food distributing organizations, producers in the
State compete in many western and midwestern states. Direct
shipments by Texas processors are made to a large number
of states, as shown in an accompanying map.

195 2

supply of broilers would indicate (as shown in figures on
placement of broiler chicks on farms), but the supply of
broilers at that season of the year is supplemented by the
seasonally heavy marketing of farm chickens. Likewise, the
greater consumption of turkey meat during the holiday sea·
son increases the competition which chicken meat faces in
the market durin g late November and December.
Apart from the tendency for broiler prices to be low in
the fourth quarter of the year, low or high prices in other
months seem to shift from year to year, depending on the
placement of chicks on farms in the commercial broiler areas.
Of course, there is a dual relationship between broiler place.
ments and broiler prices, in that changes in numbers of
broiler chicks placed on farms weekly may cause opposite
changes in prices of broilers 9 to 12 weeks later, while
changes in prices may cause parallel changes in placements
for several weeks.

BRO ILERS'
FA RM PRICES AND CHICK PLACEMENTS,TEXAS

CENTS PE" POUNO

WEEKLY

'O~-------b--------t--------b

THOU SAND S OF CHI CKS

1800

,'if\

1600
1400

1200
1000

800
600
400

.r-------~------_t------~------__1 200

Financi n g Broile r Production

Most of the financing of broiler production during the
early years of the industry's development in the District was
by feed dealers, working with their respective feed compa·
nies. It was a rather common practice for the grower to pro·
vide the house; the dealer would provide the chicks and feed ,
sell the birds for the grower, and deduct the chick and feed
bill, interest charges, and other costs from the returns to the
producer.
During the past 5 years, commercial banks in some of the
newer broiler· producing areas have participated in the
financing of broiler production. The methods used for han·
dling this paper have varied within rather wide limits. In
most cases, financing has been done through the feed dealer,
with the bank ruscounting the producer's notes made out
to the feed dealer. This method of handlin g the loans gives
additional security to the paper if it is handled by a reputable
dealer. It also enables the bank to build up a sufficient volume •
of broiler paper to make the operation worth while.
•

0
1952

In other instances, broiler producers have borrowed di·
rectly from their banks for the purchase of feed and certain

•

MONTHLY BUSINESS REVIEW
other expenses incident to the production of broilers. In
most cases, this type of loan has been limited to producers
who could show a satisfactory net worth statement and who
had sufficient collateral other than the broilers for securing
the loan. A number of loans for the construction of broiler
houses have been made by commercial banks under the provi.
sions of Title I of the National Housing Act.
Although there are wide variations in the methods of han.
dling broiler paper, there are certain principles or guides
that should be considered in connection with loan applica.
tions for the production of broilers:
1. The producer should have the house and equipment
and should give evidence of being a good farm manager. If
it is necessary to advance funds for housing, it should be
done on a separate loan, with the terms of the loan adapted
to the particular situation.
2. Bankers who have not had experience in handling
broiler loans should work closely with a reputable feed dealer.
Such a dealer should be handling high·quality feed, should
be able to assist the grower in selling his birds, and should
have a substantial equity in his own business. Some banks
insist that the dealer carry 50 percent of the credit outstand.
ing on anyone batch of birds, but other banks have advanced
a larger proportion of the cost.
3. The bank should make certain that teclmical assistance
in feeding and in disease control will be provided the grower
by the feed dealer, the county agricultural agent, or other
local specialists who are qualified to render such service. The
average farmer is not prepared to diagnose disease outbreaks
or to analyze carefully the progress of the birds.
4. The producer should have some equity in each group
of birds. Often, he is required to pay for the chicks upon de.
livery. Credit is then extended for subsequent production
costs, primarily feed and medical expenses.
A chattel mortgage is always taken on the birds and
usually on other livestock or on equipment held by the broiler
producer. As in any bank loan, the integrity of the borrower
-and, in the case of broiler loans, the feed dealer-is of
utmost importance.
The market break in late April is a recent reminder to
persons in the broiler industry that they can expect losses
as well as profits. Many old·time producers expect to lose
money on one group of birds each year, break even on an.
other group, and make a profit on the two remaining groups.
Bankers who enter into the financing of broiler production
might keep in mind that there may be certain seasons when
paper cannot be paid off at maturity without liquidating the
producer; if he is properly equipped and knows how to
handle the birds, filling the houses again may be the best
procedure.
Hatchery Operations

Even before the large expansion in broiler production in
the Eleventh District, the poultry industry was a leading

enterprise in this area. Until only several years ago, Texas
was one of the top two or three states in the Nation in the
production of eggs. Texas also has been one of the leading
producers of farm chickens. Because of .the demand for
chicks to supply commercial egg producers and farmers gen·
erally, commercial hatchery operations in Texas had reached
sizable proportions even before the development of the
broiler industry. Hatcheries have merely shifted a major part
of their production from chicks for farm flock replacements
to broiler chicks. Meanwhile, there has been a tremendous
expansion in hatchery facilities- both enlargement of exist·
ing facilities and erection of new hatcheries.
Most of the larger commercial hatcheries producing broiler
chicks in the District are located within broiler producing
areas or in hatchery egg producing areas. Those in Texas
produced 50,725,000 broiler chicks last year, according to
reports of the Bureau of Agricultural Economics in Austin.
This represents about 90 percent of the 56,661,000 broiler
chicks placed on Texas farms during the year. The remaining 5,936,000 carne principally from Arkansas and Missouri, although some were shipped from such states as Oklahoma, Iowa, Illinois, Mississippi, and Michigan. Texas hatcheries also produced some 31,000,000 chicks last year for
farm flock replacements, for a total chick output of about
82,000,000. Hatcheries in Oklahoma produced 20,800,000,
while Louisiana hatcheries accounted for 7,235,000. Arizona
and New Mexico produced around 1,000,000 chicks each.
The full extent to which Texas hatcheries have contributed
to the rise of the broiler industry is not told in statistics on
production. of broiler chicks, however. Leading hatcheries
have played an important part in the increase in production
of hatching eggs, and especially in the breeding of improved
broiler chicks. Several hatcheries now own large laying flocks
which produce disease-free cWcks. One firm has 100,000
pullets wWch were started in the fall of 1951 for laying eggs
in the summer and fall of 1952. There is, of course, still an
influx of hatching eggs from other states, notably Iowa, Minnesota, Missouri, Michigan, Nebraska, and I\1inois, although
the number brought last year from most of these states was
relatively small.
Broiler Processing

As with the output of baby chicks, the poultry processing
industry in the Eleventh District was an important business
10 or more years ago. However, with the growth of the
broiler industry, there has been a shift to processing of
broilers in the older plants, while new plants have been
and are being built in a number of towns and cities in the
area.

The poultry processing plants in the District are mostly
in an area bounded by Dallas, Fort Worth, Waco, Austin,
San A ntonio, Gonzales, Houston, Center, Tyler, and Terrell,
Texas. Tyler has a plant reported to be one of the largest
poultry dressing plants in the Southwest. A new plant under
construction at Center, Texas, will be one of the largest in
the Nation, equipped to handle 100,000 broilers per week,
with space for installing equipment to handle an additional
100,000 weekly when the supply becomes available.

MONTHLY BUSINESS REVIEW

Texas broiler growers last year produced some 141,000,000
pounds of broilers, and virtually all of these birds were
dressed in processing plants in the State. Moreover, Texas
farmers sold about 32,000,000 pounds of farm chickens, the
greater part of which was processed through these plants.
There were several million pounds of broilers brou ght into
Texas from border areas of Oklahoma and Louisiana last
year for processing.
In so far as the Eleventh Federal Reserve District is con·
cerned, most of the poultry processing facilities are in Texas,
where most of the broilers are grown. There are a few relatively small plants in northern Louisiana, southern New Mexico, and southeastern Arizona which help supply the lo cal
demand for poultry meat.

Producing Broilers Efficiently

A 3·pound bird in 9 weeks, with less than 9 pounds of
feed, has become the goal of most producers of commercial
broilers in the District. Many growers fall short of this goal,
while a few exceptionally efficient operators have been able
to reduce the amount of feed to less than 8 pounds for each
3·pound bird. The accompanyin g table shows standards of
efficiency that can serve as guides to producers in appraising
their own operations. These stan dards are estima tes, based
on opinions of men working with the industry and thorou ghly
familiar with the operations of broiler producers.

be repla ced with 25 4-foot broiler feeders. Waterers should
be placed around the house so that the chicks do not have
to walk more than 10 feet to get watcr. Automatic waterers
are in common use throughout the District, frequently supplemented by the glass jar-type of waterer, especially when
the chicks are young. At today's prices, housing and equipment cost about $1.00 per bird capacity. If construction
material is available on the farm and if considerable labor
can be contributed by the farmer, this cost may be reduced
substantiall y.
A third problem that should be settled before purchasing
chicks is the selection of a market. When the birds reach
maturity, they must be sold quickly- usually within a period
of 3 or 4 days- if the producer is to avoid loss. In many
areas the birds are contracted for sale at the time the chicks
are purchased. This assures an outlet when the birds are
ready to go . However, if there are regular market outlets in
the community, with sufficient buyers to assure prompt movement of the birds from that area, it may not be necessary to
contract their sale prior to the time they are ready to be
moved.

If these three requirements are met, the potential broiler
producer is ready to buy his chicks. He should purchase only
healthy, broiler-strain chicks guaranteed to be free of pullorum disease. Many different breeds and crossbreeds of
chicks are on the market, and the recommendations of local
agricultural specialists should be followed if the broiler producer is not familiar with these breeds. In many cases, the
breed best suited to a particular area will depend somewhat
upon the market demands in that community.

STANDARDS OF EFFICIENCY IN COMMERCIAL 8ROILER PRODUCTION
Ex.cellent

Pounds of feed required per pound of broiler produced •••..

Pounds of feed required per bird (to 3 Ibs.l •••.••.••...•..
Number of weeks for birds to reoch 3 Ibs .•••.•••..••...•.•
Percent mortality ••••••••••••••••••••••••••••• • •••••••

Birds cored for per man •••••.• , •.•..•....•. . ..• ....•..
Birds produced annually per man ••••••••••••••••••••••••

2.6
7.8

9
2
25,000
100,000

Averege

3.0
9.0
lOY2
5

12,000
36,000

The first requirement for efficient production of broilers
is the willingness of the producer to work with chickens and
to devote the time needed for their proper care. From 75 to
125 man-hours are required for the production of each
1,000 birds. In practice, this means that about 2 hours will
be required each day to care for even the minimum-size
broiler unit (generally considered to be 3,000 birds). The
birds must be given attention each day, and preferably twice
a day. They cannot be left for 2 or 3 days at a time, even
though automatic feeding and wateri ng equipment is being
used.
The second requirement for producing broilers is suitable
housing and equipment. In general, from % to 1 square
foot of floor space is required per bird. In addition to the
housing, a number of feeders and waterers will be required.
Attempts to economize on these items usuall y result in slower
gains and more feed consumed ror each pound of broiler
produced. Usually, 15 4-foot chick feeders are required
for each 1,000 birds, and after 4 weeks of age these should

After the chicks are placed in the houses, they should be
fed high-quality feeds containing all the essential food elements, plus vitamins, antibiotics, and certain preventive
medicines. They should be given ample amounts of water
and watched carefully for signs of disease. The first few
days that the birds are in the house are often critical days
from the standpoint of mortality. A sharp drop in temperature, overcrowding of the birds, and unusual excitement or
noise can cause severe losses that eliminate the possibility
of profit from that particular group of birds.

It is difficult to arrive at accurate figures regarding the
cost of producing broilers, si nce no cost studies have been
made recently in this area, but an accompanyin g t.able gives
a general indication of the distribution of costs and the actual
dollar values, usin g prices whi ch prevailed in April 1952.
Cost of chicks is a rather stable figure, and the cost per pound
of feed has no t fluctualed a great deal in the past several
years. However, the cost of liller, while a minor item in the
total , does vary considerably from area to area, ranging as
high as S50 per 1,000 birds. In other communities, suitable
litter may be available at a very low cost. Poultry specialists
recommend removin g the litter after each batch of birds and
replacing it with clean litter.
The labor cost is an arbitrary figure, and many .b roiler
producers do not count this as a cost, feelin g that any profit
r rom the operation will represent their wage.

MONTHLY BUSINESS REVIEW

ESTIMATED COST OF PRODUCING 1,000 8ROILERS'

THE AVERAGE GROWER

THE MORE EFFICIENT GROWERS

Unit
Qucntity

cost

1,000
7,800

$0.15
.0 6

10 yd ••

1.00

Tola l
cost

Unit

Quantity

"",

1,000
9,000

$0.15
.06

10 yds.

1.00

Total
cost

CASH COSTS

Baby chldu •.••..•..•.•..••••••••••.•••••• • ••.• • ••• .••• ••
Feed . .• ••••••••••••••••••••.•• • ••• • ••••• •• • ..•• •••• • •••
Medicine •••••••••••••••••••••••••••••••••••••• • • • •• •• •••

litter (sond) •••• ••••••• .•••••. ••• ...••••••••••••••••••• ••

$150
468
30
10

$740

$658

Total •••••••••••••• •••••••.• • ••• •• •••••••••••••••••• • •

$150
540
40
10

OTHER COSTS

Oepreciation on houles and equipment (4 percent of original cost) ..

Labor............... .. .. ...... ....................... ..

80 man-hours

0;75

10
60

100 mon-hours

0.75

12
75

Totar •••••••• • •••• •••••• •• •••• • • • ••• •••••• • •••••••••

$70

$87

Grand total ••• • • •••••••••••••••••••• •••• ••••• •

$72 8

$827

POUNDS OF BRO ILERS PRODUCED
Number of e!'Me!.:s purcha sed ••••••••••••••• ••• • ••• • •••••••••
Less mortality ••••• . •••• . •••••• • •••••••••• . •••••••••••••••

Number of birds for sale •• •• • ••• • ••••••••••••••••••••••• • ••
Total weight ot 3 pounds .ad! ... . ... •.....• ••• •.. .•••.•. •••

1,000
-20

1,000
-50

980
2,9401bs.

2,850Ib,.

950

CASH COST PER POUND ........ . ... . ..................... .

$0.224

$0.260

TOTAL COST PER POUND •••••••• •• • .•.• •• . • ••. • .•••••••••••

$0.248

$0.290

1 Data pertain to birds that ar. fed ta average wieght of 3 pound" Prlc", lJIed are tho •• whIch prevaile d generally in Tua , during April 1952.

Outlook
Most of the problems in the broiler industry today are
typical of those facing any relatively new and rapidly expand.
ing industry. Inexperienced producers are entering the field
in new areas, and they are encountering the problems of
obtaining adequate financing, learning new management
skills, and developing satisfactory market outlets. Other
phases of the industry, such as the hatcbing of chicks, mixing
and di stribution of scientifically prepared feeds, processing
of the mature birds, and the distribution of poultry meat,
are facing constant and at times sharp adjustments as they
attempt to fit their operations to the location and volume
of broiler production. During this period of adjustment and
growth of the industry, mature birds frequently are trans·
ported relatively long distances, resulting in considerable
loss of weight. Quality standards for dressed broilers are
not widely understood or used.
Basic economic forces, such as the demand for broilers,
transportation costs, and costs of producing, processing, and
distributing the birds, wiII dictate the ultimate answers to
these problems. Therefore, these problems must be givoo
careful study by leaders in the industry in order that their
solution may be made on a sound basis that will stimulate
confidence in the industry and give stability to its operations,

•
,

The most fundamental problem facing the industry con·
cerns the long· run outlook for the demand for broiler meat.
Is the industry overexpanding in relation to the probable
lon g.run demand for broilers, or will consumers continue to
increase their demands for thi s type of meat as they have
in the past decade? Can broiler producers compete success·
fully with beef if it becomes more competitive in price? Can
production costs be lowered further through the develop·
ment of even better feeds and more efficient strains of chicks?
Th ere is su bsl1lntial basis for optimism concerning the
long·run outlook for the broiler industry in this area. This

conclusion reflects the consensus of leaders in the industry,
although they are generally cautious in their optimism and
mindful of the many problems that confront the industry
in the years ahead.
The prospect of a continued strong demand for broiler
meat is the most favorable aspect of the outlook. This fore·
cast of a relatively high demand is supported by factors such
as an anticipated high level of consumer income, a growing
population, a relatively high per capita consumption of
chicken, and increased advertising and promotional work on
the part of the industry.
The anticipated high level of consumer income is of par·
ticular interest to broiler growers, as statistical studies of
chicken prices show that consumer income is the most impor.
tant factor affecting chicken prices in the long run. High
incomes usually are associated with relatively high poultry
prices.
The population of the United States is now about 156,·
000,000 and is increasing by over 2,700,000 per year, which
will provide a larger and larger potential market for broiler
meat. In view of the growing industrialization of the South·
west, population centers in the Eleventh Federal Reserve Dis·
trict may obtain more than a proportionate share of this
growth, Per capita consumption of chicken meat in the
Un ited States this year is expected to total about 31 poundsabout one· half of which will be broilers and one.half, farm
chickens. This compares with about 18 pounds in 1935·39,
of which only 8 percent was broilers.
This rise in per capita consumption of chicken meatespecially broilers-has been influenced by such factors as
the growing popularity of broilers because of the improved
quality of the meat, relatively lower retail prices of broilers
and chi ckens compared with prices of most other meats, and
the availability of chicken meat 365 days in the year rather
than only in certain seasons, as was true some years ago,

MONTHLY BUSINESS REVIEW

As the production of eggs per hen continues to increase,
there will be relatively fewer hens in the laying flocks and less
chicken meat from Lhis source, relative to demand, to compete
with broilers. Furthermore, many farmers are taking less
interest in maintaining a small poultry flock to produce meat
for home use or for sale and are joining the growing group
of chicken meat buyers. For these reasons, the so·called
"gap" between the production of farm chickens and the de·
mand for chicken meat is growin g. It will take more and
more broilers to fill this gap.
Improved processing methods, more attractive packaging,
and a higher quality product have increased materially the
year.round demand for broilers. Moreover, several promo·
tional developments in recent years undoubtedly have con·
tributed to the increase in consumption of chicken meat.
One development has been the "chicken restaurant," where
chicken dinners are a specialty. Another development has
been the packaging of frozen chicken so that housewives
may purchase not only whole chickens ready to fry but also
any part of the bird, such as drumsticks, breasts, and livers.
Another favorable aspect of the outlook is the increasing
efficiency being achieved in the production of broilers. The
great advances made in recent years in increasing the output
of chicken meat per ton of feed, which largely account for
the price advantage broilers have over red meats today, have
placed the broiler far ahead of the cow, hog, or sheep as a
converter of grain to meat. Feed efficiency of these animals
is about 1 pound of meat for each 5 or 6 pounds of grain,
compared with 1 pound of meat for each 2.5 to 3 pounds of
grain for broilers. While improvements are bein g made in
the feed efficiency of other animals--especially hogs-the
broiler is likely to hold an advantage for the foreseeable

future. As a result, broilers may continue to undersell grain·
fed animals on a weight basis.
This relativel y favorable long·run outlook, however, does
not seem LO justify a rapid expansion of broiler production
except in areas which have a competitive advantage because
of location, markets, or other factors. The relative stability
of broiler prices during the past 4 years, with no definite
upward trend evident despite some further increases in other
farm commodity prices, suggests that the advantage of a
steadil y rising price is not likely to prevail in the broiler
business during the next few years.
A slQwdown in the rate of expansion during the past year,
plus the fact that some decline has occurred in certain older
producing areas, lends support to the view that the industry
is approaching the point where production is about equal to
demand at a price equal to the cost of production (including
reasonable profit) under current economic conditions.
Per capita consumption of poultry meat has increased to
the point where further increases may be more moderate and
gradual, especially in view of the prospects for an increase
in the supply of beef during the next 5 or 6 years as a result
of greatly expanded beef cattle numbers.

On balance, the lon g-run outlook for commercial broiler
production in the Eleventh Federal Reserve District is generally favorable for some further expansion but not at the
rapid rate experienced during the past decade. There will be •
opportunities for profits for the efficient producer, hatchery. ~
man, processor, and others in the industry, although profit
margins probably will be somewhat narrower than in most
rccent years. Under such conditions, the "speculative" or "in·
and·out" operation is likely to be particularly hazardous.

MONTHLY BUSINESS REVIEW

REVIEW O F BUSINESS, IN DUSTRIAL, A G RICULTURAL, AND FINANCIAL CONDITIONS
Rains during April and Ma y improved
greatly the outlook for agricultural produc:ion and farm income in the Eleventh
District i n 1952 ; however, wet soils
caused delay in field work. The winter wheat crop in the
District has shown improvement since rains fell in the High
Plains, but the crop remains far below average. Planting
of cotton, sorghums, corn, and other crops is heing rushed
to completion in the earlier sections and is active on the
High Plains. Pastures are supplying excellent grazing in the
eastern two·thirds of the District, and livestock in these areas
are in good condition. Farm prices are still reflecting some
weakness in market demand.
Department store sales in the District in April were 9 percent over March and 13 percent above April last year; sales
in the first 2 weeks of May showed a gain of over 20 percent
as comparcd with the corresponding weeks of 1951. Cumulative sales [or the first 4 months of 1952 gained slightly
over the corresponding period last year. Sales in April were
more normally distributed between the various major departments than in preceding months. Inventories at department stores at the end of April were lower than a year
earlier, while orders outstanding were up slightly. Furniture
store sales in April showed an increase over a year ago,
although inventories droppcd 21 percent.
Construction contract awards in the District in April fell
6 percent below March and were below April 1951 by the
same percentage; a substantial decline in residential awards
from a year ago more than offset a year-to-year increase in
nonresidential awards. Largely because of the strike in the
oil industry, crude oil stocks in the Nation rose by May 10
to the highest level in 13 years_ The near-record production
of crude oil in the District in April was 2 percent below the
March level. Allowables for district states were cut for May,
but the strike caused an even greater reduction in crude output for the month.
During the 4 weeks ended May 21, practically all major
categories of assets and liabilities of the weekly reporting
member banks in the District declined. Commercial, industrial, and agricultural loans were reduced 2 percent. Investments declined, reflecting principally a decrease in holdings
of Treasury bills. Total deposits declined about 1 percent;
an increase in demand deposits of individuals, partnerships,
and corporations was more than offset by reductions in other
types of demand deposits; time deposits increased.

The total dollar volume of department
store sales in the El eventh Federal Reserve District during April, aided by
heavy Easter buying and one more busi• ness day than in April last year, rose 9 percent above March
, and was 13 percent higher than April 1951. As a result,
cumulative sales for the year, which to the end of March
had been laggin g, rose in April to approximately 1 percent
above the first 4 months of a year ago_

An analysis of April sales reveals a somewhat better distribution among various departments than had been experienced during preceding months. This year, prior to April, the
distribution of sales had shown weaknesses compared with
last year in such important items as piece goods and household textiles, men's clothing, furniture and bedding, and,
for the first 2 months, women's and misses' coats and suits.
During April, sales of coats and suits were up 27 percent
from last year, and men's clothing showed an increase of 16
percent_ Sales of furniture and bedding and domestic floor
coverings were under year-ago totals but showed increased
activity during the latter part of the month. Consumer buying of piece goods and textiles remained under a year ago.

RETAIL TRADE STATISTICS
(Percentage chonge)

STOCKS'

HET SALES
April 1952 from

line of trade
by area

tt5i~

Morch
1952

DEPARTMENT STORES
Totol Eleventh District •••••••••••••

Corpus Christi ••••••••••••••••• • •
Oollos . . • • ••• •• ••••••.••••. . •.•
EI Paso •• . ••••••••••••••••••. . •
Fo(' Worth ••••••• . •••. . ..•• . •.•

13
35
11

Houston ••••••••• • •••• •• ••••••••

15
17

San Antonio •••••. .. .•••..•••..•
Shreveport, La •.•••••••• • ••••••••
Waco •....•• . •••••••••••••••••
Other cities ••••••••••.•.••... • ••

18
35
8

FURHITURE STORES
Total Eleventh District •••. . •••• • •• •

Austin •• ••••• • .• . ...• . . . .•••• • •

29
28
36

Datras •... • •.•. •• •••• • . •• ••• . • •
Houston • •••••. ...... _ . .. .•. . ..•
Pori Arthur • .•• . •....••••.•• ... •
San Antonio . •• •. ..•••.•••.. . •••
Shreveport, L ... . , ..•• , ..•.• . .•.
a
Wichita Falls ....................
APPLIANCE STORES
HOUSEHOLD
Total Eleventh District •••.•••••••••
Dollos •••••• • . •••.•••••••••••.•

9
11

3
26
17
9
2
12
16
11

April 1952 from

4 mo. 1952
compo with

-4 mo. 1951
1
17
-3
1
-2
5
1
7
15
-6

April
1951

MQreh
1952

-12
-10

-2
-3
-1
2

-14

-16
-9
-12
-12
-3
2
-9

-3
-3
-9
4
-3

-2 1

-10

-3'

-27

- I

15
-2
12

3
7
- 4
4
-2

-13
3

-9
-6

-22
-20

1 Stocks at end of month.

Indicates cnange of less than one-naif of 1 percent.

Department store inventories in the District were lower at
the end of April than at the same time last year, even in the
major departmental groups which showed declines in sales
volume. Stocks of piece goods and household textiles, furniture and bedding, domestic floor coverings, and major
household appliances were down from a year ago, with
declines ranging between 21 and 40 percent. This absorp·
tion of inventories by consumers is a most welcome sign to
both wholesalers and manufacturers. Orders outstanding at
the reporting department stores at the end of April were
approximately 1 percent higher than a year earlier bnt were
nearly 22 percent lower than at the end of March 1952.
Sales reported by furniture stores in the District durin g
April showed a year-to-year increase of approximately 7
percent and were fractionally above the previons month's
total. This was the third consecutive month in which sales
were above the level in the corresponding month of 1951.
Inventories were not significantly different from a month
earlier, although they were 21 percent below April 1951.

MONTHLY BUSINESS REVIEW

86
WHOLESALE TRADE STATISTICS
Eleventh Federal Reserve District
(Percentage change)

STOCKSL p

NET SAlESp
April 1952 from
April

March

April 1952 from

"mo.1952
compo witt.
.4 mo. 19S1

April

March

1951

1952

-27

100
-39

3
-5

8
-16
10

2
1
19
12
-2

- I
I
-9
7
-3

-10

lin. of trode

1951

Automotive supplies • • . .•••••
Dry goods •.••...•.•.••••.•
Grocery (full·llne wholesalers
nof sponsoring groups) •••••

-17
9

6
-8

17
-1
38
21
13
-9

7
- I
8
13
-19

7
-2

-11

-4

Hardware ••.....••••••••. •
Industrial supplies •• .••.. • ••.
Metals ................ . ...

Tobacco products •..........
Wines and liquors •.•• .....•

Wiring supplies, construction

mot.rials distributors . . ....
I

1952

-14

Stocks at end of month.

p-Prelimmory.
, Indica t.s chonge of Ie" thon one-holf of 1 percent.

Field work in the District made good
progress during the first part of May,
following the late April rains, but was ~
interrupted again past midmonth as two
cold fronts from the Northwest brought rain to virtually all
dryland farming areas. Where soil moisture conditions permitted, farmers in southern sections cultivated cotton and
grain sorghums, baled prairie hay, and planted rice during
May. In northern sections they planted and replanted cotton, sorghums, and corn and: cultivated growing crops. Soil
moisture supplies over the District are now adequate for
germination and growth of summer crops, although additional rain is needed to replenish complete! y subsoil moisture reserves which are necessary for full maturity of crops
this summer.

SOURCEI United Stat•• Sureau of the Census.

WINTER WHEAT PRODUCTION

Sales at weekly reporting department stores in the first
2 weeks of May reflect the usual seasonal changes in consumer buying, as well as the influence of Mother's Day and
the effect of the suspension of consumer credit controls
under Regulation W. Sales d·uring the week ended May 10
were 22 percent above the comparable week in May last
year and were the highest on record for any week that early
in the year. Sales for the week ended May 17 were 17 percent above the same week last year.
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(19'7-'9~1001

ADJUSTEDl

UNADJUSTED
April

Area

March

Feb.

April

April March

Feb.

April

1952 1952 1952 1951 1952 1952 1952 1951

SALES-Da ily onroge
Dallas .. . ... ... ... . .......
Houston ••••••••••••• . ••• . •

11'
106
126

105
102
116

93
94
100

114
109
128

115
108
129

115
111
128

105

112r

STOCKS-End of month
EI ..... nth District • •••.•••••••

129

131

120

146

122

124

122

138

Eleventh District . •••••.•.•••

10Sr

110r

119r

Adjusted for seasonal variation.
r Revised.

(In thousands of bushels)
Average

State

1941-50

N ew MeAico • ••••.•...• .• ••• • •••• • •
Olclahoma ..•.•...•... . • . . ..• .. ..• .
TeAas .••.••..•... •.. .. .....•. • ..• .

571
3,800
71,737
60,347

To'a l .•... . ... . ........•..• •

136,455

Arizona •••••••••.•.• .. ••.•••.•.•• •

Indicated

1951
572
786

1952

575
1,099

38,902

17.307

78,502
38,071

57,567

118,247

SOURCE: Uni'ed States Department of Agriculture.

The district winter wheat crop has shown improvement
during the past 2 months, favored by timely rains in late
April and early May. Production forecasts have been raised
to higher levels, although they are still far below the average
production of recent years. The Texas crop estimate is
placed at about 38,000,000 bushels, which is more than
double last year's short crop and compares with a 1941-50
average annual production of over 60,000,000 bushels. Yield
per acre is estimated at 11 bushels, compared with 9 bushels
per barvested acre last year.

It is too early to appraise the effect which suspension of
government control of consumer credit has had on general
business activity. One effect was the consummation of sales
and immediate delivery of merchandise on which consumers
had been accumulating down payments-either with the
merchant or privately. Moreover, many who were being held
back because of down payment or credit terms entered the
market. To what extent new demand will be created by the
absence of credit restrictions remains to be revealed, as most
merchants are reluctant to abandon down payments entirely
or to lengthen unduly the payout period.
A number of factors favor a moderate pickup in consumer
buying in the second half of 1952. Total employment continues at a near·record level, while personal income in
March was at the annual rate of $258,000,000,000 for the
third consecutive month. A general gain in consumer income
in 1952--even after taxes-has been forecast by government
agencies. It is estimated that consumers, business, and Government may spend 5 percent more this year than in 1951.
Farmers will spend less in 1952, as their net income may
decline 3 to 5 percent from last year.

Oklahoma farmers expect to harvest a winter wheat crop
of about 78,500,000 bushels, which is double last year's
crop and 10 percent above average. An average·sized crop
of 575,000 bushels is forecast for Arizona, while the New
Mexico crop forecast is placed at 1,099,000 bushels, or less
than one· third of average. The United States crop is about
one-fourth above average.
The cotton crop in Louisiana and central Texas has made
good pTOgress, and cotton planting extended into northwest
Texas by mid·May. The rainfall received during the month
offered encouragement to west Texas farmers to plant a
large acreage of cotton, although the possibility of a labor
shortage at harvest time remained a factor in farmers' plans.
Corn planting was under way in northwestern counties of
Texas in May, while the crop in central and eastern parts
of the State and in northern Louisiana made good progress,
aided by favorable weather and generally adequate moisture.
Land preparation and planting of sorghums was rushed on .
the High Plains during May; planting neared completion .
in central, eastern, and southeastern counties of Texas. Harvesting of hay was in progress over the District in May, as
farmers gathered in oats, hubam clover, prairie hay, and

MONTIILY BUSINESS REVIEW

alfalfa. Peanut planting was started in the northern com-

FARM COMMODITY PRICES

~ mcrcial area of Texas.

Top Pri'.1 Paid in

Conditions in most commercial vegetable areas of the District in late May were favorabl e, although water supply in
the Lower Va lley has been low. The east Texas tomato crop
ha s made gradual improvement, and some of the earliest
plantings were beginning to hold a good set by mid month.
Early spring tomato production in the Lower Valley is estimated at 1,638,000 bushels, which is far below average but
larger than last year's short crop. Latc sprin g productionmostly in East Texas- is estimated at 1,625,000 bushels, a
relatively small crop.
Cantaloupes and watermelons in some of the latcr areas
made good growth during May; harvest of. watermelons was
started in southern sections in the fi rst part of the month.
Texas watermelon acreage for harvest this summer is estimated at 64,000 acres, or 3,000 acres more than were harvested Iast year.
The early spring onion crop in Texas-produced in counties south of San Antonio- is estimated at 3,802,000 sacks,
almost doublc last year's crop but slightly below averagc.
Late spring on ions in north Texas were benefited greatly by
May rains, and a good crop is being harvested. The crop is
forecast at 890,000 sacks, compared with a large crop of
1,280,000 sacks in 1951.

Comparable Comparable

Class

Co"i ••••• •.•••.
Calves ••••....•.
Hogs •••••••••••

Sheep ..••....•.

Unit Moy22,1952

COnON, Middling 15/ 16-inch, DQllol. •••
WHEAT, No. I hard, Fort Worth •• •• ••• •••
OATS. No.2 white, Fort Worth •••••••••••
CORN, No.2 yellow, Fort Worth •••••••••
SORGHUMS, No.2 yellow milo, Fort Worth.
HOGS, Choice. Fort Worth ••.•••...•...•
SLAUGHTER STEERS, Choke, Fori Worth •••
SLAUGHTER CALVES, Choice, Fort Worth ...

STOCKER STEERS, Choice, Fori Worth ••..•
SLAU GHTER LAMBS. Choice, Fort Worlh •• •
HENS, 3-4 pounds, Fort Worth •••••••.•.•
FRYERS, Commercial, Fort Worth ••••••••••
BROILERS, South Texos . ... .. ... .... ... ..
EGGS, Current rllceipls, Fort Worth •••••••
TURKEYS, No.1 hens, Fort Worth •. • ••••••

lb.
b,.
b,.
b,.
cwl.

SAN ANTONIO MARKET

tf5~

March

April

1951

1952

Ap ril
1951

March

33 ,7 19
10,609
83.435
66,120

36. 152
9,499
71,029
58,988

27,484
9,358
93,792
43,459

18,155
9,013
5,371
120.097

20,955
15,232
7,203
lJ 6,8U

20,882
13.706

1952

5,250
1J0,431

.3860
2.68V2
1.06~

2.19
3.32
22.00
35.00
35.00
35.00
29.00
.19
.29
.28
10.50
.28

cwl.
cwl.
cwt.
cwt.
lb.
lb.
lb.
casil
lb.

week
lost montn

.4095
274;4
1.13\4
2.12!!..
3.20
17.75
36.00
34,50
35.00
29.00

week
last year

.4477
2.60V2
1.14
1.98
2.65
21.50
37.00
37.00
38.00
34.00

.23
.27
.26
10.50

Farm prices In the District continue somewhat weak as
compared with most months of the past year. Declines
occurred during May in the prices of such commodities as
cotton, wheat, oats, and barley. Price increases were noted
for wool and hogs. Broiler prices fell sharply in late April
and early May but recovered by May 15. Farm commodity
prices in the District in May averaged some 10 percent beIowa year earlier.

CASH RECEIPTS FROM FARM MARKETINGS
(In thousand, of dollors)

State

April

<wI.

January

{Number}

Markets

Week ended
Commodity and market

LIVESTOCK RECEIPTS

FORT WORTH MARKET

local ~Sovthw.st

195 1

Arizona ..... . ... $ 28,842
LOi.Ihiona ••••.•.•
31.201
13,195
New Mexico •.•••
40,884
Oklahoma •••.•. •
Tex.as •••••. . •.• 160,627
Totol . . ... . .•• $274,789

1952

February

1951

1952

Cumula li"e recei pls
Janua ry-Feb ruary

1951

1952

$ 55,895 $ 22,560 $ 32,447 $ 51,402
34,299
15,01 5
13,701
46.256
19,197
9,571
12,512
22,766
42,899
30,536
36,241
71,420
174,375
79,588
86,173
240,215

$ 88,342
48,000
31,709
79,140
260,548

$326,665

$507,739

$157,270

$181,074

5432,059

SOURCE: United States Deportment of Agriculture.

I Inc:ludes goah.

Pasturcs arc su pplying excellent feed for livestock in all
areas of the District except in some parts of west Texas and
in ew Mexico where rainfall prior to mid -Ma y was rather
limited. In these areas, many pastures are bare and livestock
are thin. However, improvement in many of these areas is
expecled as a resulL of May rains. Livestock in Louisiana and
the eastern half of Texas are in good condition. Livcstock
receipts at the Fort Worth market are running at levels
quite different from a yea r ago, due mostly to difference in
timing of usually sharp seasonal changes. In the 4 weeks
ended May 17, receipts of cattle and calves were up 38 percent and 47 percent, respectively, as compa red wilh the
corrcsponding weeks of 1951. Marketings of sheep and
lambs wcre down 30 percent because of late movement of
spring lambs. Receipts of hogs showed a gain of 5 percent.

Meat production in commercial slaughter plants in Texas
t in the first quarter of 1952 was 15 percent above a year
earl ier. Milk production in the State in April was up seasonally from March but at about the same level as a year ago.
Egg production from January through April was up 10 percent as compared with thc first 4 months of last year.

Farm income pro spec Is in the District for 1952 appear
more favorable than a month ago, due principally to the
greatly improved moisture situation which has favored production of livestock as well as crops. In the first 2 months
of the year, cash receipts from farm marketings in the five
states of the District were up 17 percenl as compared with
the same months in 1951. Over-all, the prospects for cash
farm income in the District this year are better than a year
ago, although costs of production will again be high, and
net farm income may be liltlc, if any, higher than in 1951.

011 April 29 the Secretary of the
Treasu ry announ ced a number of
changes in United States savings bonds,
effeclive May 1. The redemption schedule of Series E bonds was Tevi sed so as to give a higher
rate of return in the earlier years of the life of the bond if
redeemed before maturity; the over·all rate of interest to
maturity was raised from 2.9 percent to 3.0 percent, compounded semiannually, by shor tening the life of the bond
from 10 years to 9 years 8 months; lhe interest ratc ,luring
the extension period after maturity was raised for all honds
maturing on or after May 1, 1952, from 2.9 percent to 3.0

MONTHLY BUSINESS REVIEW

percent, compounded semiannually ; and the annual limit on
purchases was raised from $10,000 to $20,000 maturity
value.
A new current income savings bond to be designated
Series H will be offered beginning June 1. The new bond,
a companion to Series E bonds, will have in terest paid by
check semiannually on II graduated scale of rates which will
be approximately the same as intermediate yields on Series
E bonds ; the over·all yield to maturity (9 years 8 months)
will be 3 percent; the bonds will be issued at par and will
be redeemable at par after 6 months and on 1 month's
notice; and the bonds will be offered with a minimum
denomination of $500 and an annual purchase limit of
$20,000.
Sales of Series F and Series G bonds were withdrawn,
effective May 1, and two new series of savings bonds, desig.
nated Series J and Series K, were substituted for them. The
new series differ from the old principally in their higher
rate schedules. The new bonds yield 2.76 percent if held 12
years to maturity, and intermediate yields are higher than
those obtainable from the superseded Series F and Series G
bonds. Purchases of Series J and Series K bonds, combined,
may not exceed $200,000 per year (issue price), as compared with the limit of $100,000 for Series F and Series G.
On April 30 the Secretary of the Treasury announced an
additional step in the Treasury's program to raise funds
required in financing the defense program. In accordance
with this announcement, beginning on May 19 investors
were offered additional amounts of the 2%,-percent Treasury
bonds, Investment Series B-1975·80, which were issued
originally April 1, 1951. Subscriptions to the 2%,-percent
bonds are payable in full in cash, or not less than one-fourth
in cash and the remainder by exchange, par for par, of the
restricted 2lh-percent bonds of 1965-70, 1966·71, Jun e 15,
1967-72, and December 15, 1967-72. Payment for the new
bonds may be made in full on June 4, 1952, or in four equal
instalments on June 4, August 1, October 1, and December
1, 1952, with acceleration of payments if desired by subscribers. Commercial banks were excluded from the offering, except to the extent that they were permitted to exchange restricted bond's acquired prior to December 31,
1945, for the partial investment of their savings accounts.
Commercial bank subscriptions were required to be 75 percent in bonds eligible for exchange and 25 percent in cash.
The new bonds are nontransferable but may be exchanged,
at the owner's option, for Ph·percent 5-year marketable
Treasury notes to be dated April 1 and October 1 of each
year during the life of the bond. Restricted bonds eligible
for exchange are outstanding in the amount of $14,748,
000,000.
Following the announcement of the new offering, prices
of the four restricted bonds eligible for exchange rose from
16/32 to 23/32 by May 9. Subsequently, closing bid prices
receded somewhat, however, so that by May 15 increases
over the prices prevailing on April 30 ranged from 9/32
to 13/32. Other price changes between April 30 and May 9
included an increase of 19/32 for the 2%-percent bonds of

1962-67 which became eligible for commercial bank ownership May 5, followed by a decrease of 11/32 by midmonth.

On May 15 the Secretary of the Treasury announced that
the option to call the 2-percent bonds of 1951·53 for redemption on September 15 would not be exercised. These
bonds are dated September 15, 1943, and are outstanding
in the amount of $7,986,000,000.
Each of the weekly offerings of Treasury bills dated May
1, May 15, May 22, and May 29 was increased approximately $200,000,000 in excess of the amount of the bills
maturing on those dates, for the purpose of meeting current Treasury disbursements and to increase the General
Fund balance. The Treasury borrowed approximately $600,000,000 in April through similar weekly offerings.
The Board of Governors of the Federal Reserve System
announced on May 5 that it had concurred unanimously in
the recommendation of the National Voluntary Credit Re·
straint Committee that the screen ing of applications for
financing, in accordance with the principles established by
the Voluntary Credit Restraint Program, be suspended in
the light of the prevailiog circumstances. The Board also
announced that the Voluntary Credit Restraint organization
will continue on a stand· by basis so that the voluntary pro·
gram may be reinstated should subsequent developments
require. In connection with this announcement, the Board
withdrew its request previously made of all financing insti·
tutions to act in accordance with the provisions of the
voluntary program.
Regulation W, governing the terms of the extension of
consumer instalment credit, was suspended by the Board of
Governors of the Federal Reserve System May 7. Upon
ann ouncing this action, the Board indicated that it had
recommended to Congress that authority for the regulation
of consumer credit be continued after June 30 so that the
regulation could be reinstated should subsequent develop.
ments necessitate such action.
Between April 23 and May 21, practically all major categories of assets and liabilities of the weekly reporting member banks in the District declined. The net effect of reduc·
tions in loans, investments, and cash assets was to decrease
the total resources of these banks in the amount of $33,508,000, or about 1 percent, to a total of $4,204,789,000.
At this lower level, however, total assets were 10 percent
above the comparable total last year.
The reduction in commercial, industrial, and agricultural
loans during the 4 weeks amounted to $25,979,000, or 2 percent, the largest reduction in any 4- or 5·week reporting
period this year. Most major types of business borrowers
reduced their outstanding bank indebtedness, but the principal factor contributing to the decrease in commercial, industrial, and agricultural loans was the repayment of loans by .
cotton and other commodity dealers. Loans for financing .
security transactions and "all other" loans, the category
which iocludes consumer·type loans, showed increases during the 4 weeks.

MONTIILY BUSINESS REVIEW
CONDITION STATISTICS Of WEEKLY REPORTING
MEMBER BANKS IN LEADING CITI ES
Eleventh Federal Reserve District
(In thousands of dollars)

May 21,

1951

1952

$2.877.078
1,53 1,258

Total loons (gron) and investmenl~ •. .. • . ..
Tofal loons-Net' .. . .. .......... . ...
Total loons-Gross ................. . .
Commerical, industrial, (lnd agricultural

May 23,

1952

Item

$2,633,593
1,466,4 78
1,482,663

',559,620

BANK DEBITS, END-O f -MONTH DEPOSITS,

1,00 3,763
9,393

1,071,565

AND ANNUAL RATE Of TURNOVER Of DEPOSITS

60,488
115,062
11.325
306,854

55 .1 70
121 ,968
19,009
273,360

58,966
116,301
8,525
296,503

1,329,382

1,150,930
60,546

1,343,301
224,034
161 ,693
175,452

1,547,696

loons •....•. . ..•....•.•.••••..... .

, ,045,586

loons 10 brokers and dealers in securities..
Other loans for purchasing or carrying
securities ..... ... .. .... . ... .. . . ....
Reol eslate loo ns .. ......... . ... .. ....
loans to bonks . . . .......... . .... . ....
All other loans •• •• • .•.•.•.. . .

8.381

Tota l investmenh .. ........ ....... . .....
U. S. Treasury bills ............... . ....
U. S. Treasury c;ertific;o'es of indebtedness.
U. S. Treasury notes ...................
U. S. Govemment bonds (inc;. gtd.
obligations) ............ . .... . .. .. . .
Other securities ...... .................
Reserves with Federal Reserve 8ank . . ...... . .
8alances with domestic banks . ..............
Demand deposits-adiusted t • . • • . • . . . . • . • . . •
Time deposits except Government ........... .
United States Government deposits .... .......
Interbank demond depruih . ... . ............
Borrowings from Fede ral Reserve Bank .... ....

195,213
169,959
177,363
613,488
173,359

570,871
389,006
2,348, 558
463,861

91,862
705,023
10,250

0
342,541
581,363
166,480
492,306
368,933
2,184,712
427,459
100,066

594,586
0

7,760

614,453
167,669
524,130
373,836
2,275,613
460,795
100,937
728,056
20,250

1 After deductions for reser"'e! and unallocated chorge-ofh_
, Includes all demand de posits other than inte rbank and United Siales Govemment, leu
cash items re ported a s on hand or in process of collection.

Investments of these banks declined $13,919,000, with the
contraction in holdings of Treasury bills more than accounting for the change. The increase in holdings of Treasury
notes and certificates of indebtedness was offset only slightly
~ by a small reduction in holdings of Treasury bonds_ Invest, ments in municipal and other non-Government securities
rose.

of $62,007,000, or about 1 percent, from the total for March
and an increase of $543,118,000, or 9 percent, over the comparable total for last year. Country banks accounted for
almost 60 percent of the reduction during April. In contrast
with the contraction in demand deposits, time deposits rose
$14,326,000, or 2 percent, with most of the increase occurring at the reserve city banks.

$2,902,921
1,543,299

Ap ril 23,

(Amounh in thousQnds of dollarsl
DEBITSI

City
ARIZONA
TucsOCl ............ . .$

April
1952

Gross demand deposits of all member banks in the District
averaged $6,451,803,000 in April, which reRects a decrease

GROSS DEMAN D AND TIME DEPOSITS OF M EM BER BANKS
Eleventh federa l Reserve District
{A ... erClges of daily Agur es. In thousands of dollarsl
COMBINED TOTAL
Date

Groll
demand

Time

RESERVE CITY BANKS
Gross
demClnd

Time

COUNTRY BANKS
Gross
demand

Time

APril 1950 ..... . $5,521.595 $656.387 $2,634,090 $410,645 $2,8B7,505 $245,742
April 1951 ..... . 5,908,685 647,902 2,751.029 353,798 3,157,656 294, I 04
December 1951._ 6,753,139 706,327 3, 170,047 390,143 3,5B3,092 316,184
January 1952 .... 6,779,455 714,332
3,162 ,301 391,577 3.617,154 322,755
FebrlJClry 1952 . . _ 6,567,846 721,578 3.030.813 395,992 3,537,033 325.586
March 1952 ... . .
6,513,810 719,844 3.046,289 392,193 3,467,521 327,651
April 1952 . . ... .
6,451,803 734,1 70 3.021,143 401,280 3,430,660 332,890

April March
1951 1952

Annual rate of turnover
April 30,

1952

April
1952

April March
1951 1952

94,811

-4 $ 107,029

10,7

10.7

11.0

Monroe ... _... _.....
46,542
Shreveport .... . . ....
189,091
NEW MEXICO
Roswell ........ ...• .
2 1,898
TEXAS
Abilene ............ .
51,794
Amarillo ............
13B,050
Austin ............. .
173,569
Beaumont ... _ ..... . .
128,406
Corpus Christi. ..... ..
134,088
Corsicona .. .. ... . ...
12,772
Dallas ............. . 1,423,414
EI Paso . ..... .......
179,425
Fort Worth .. . . ......
484,591
Galveston . . ........ .
84,093
Houston .. . ......... . 1,593,841
laredo ............ .
23,250
lubbock . ...........
107,329
Pori Arthur . .........
42,879
San Angelo .... .. ....
39,155
San Antonia ... ......
370,059
Te;l;arkona S••••••••• •
20,999
Tyler .............. .
51,479
Waco ..............
71,397
Wichita Falls .•.... ...
88,942

6
18

-8
-I

47,487

201,701

11.5
11.3

11.5
10.4

12.4
11.5

-4

LOUISIANA

TOlo l-2 4 cilies ........ $5,571,874

On May 21, total deposits of the weekly reporting member
banks amounted to $3,873,371,000, reflecting a decrease of
$26,345,000, or about 1 percent, during the 4 weeks. Although demand deposits of individuals, partnerships, and
corporations rose, the expansion in these accounts was more
than offset by the reduction in other types of demand
deposits. In contrast with the trend of demand deposits, time
deposits increased, principally as a result of the expansion
in time deposits of individuals and businesses. The contraction in deposits at the weekly reporting member banks this
year (to May 21) is notably less than the decrease last year
- somewhat more than 6 percent as compared with slightly
more than 8 percent.

DEPOSITS2

Percentage
change from

26,118

10.0

11.2

10.0

2
-5
55,496
10 -7
116,017
19
21
119,520
14
- 3
98,645
105,032
19
- 5
9
2
21,697
994,897
-3
-4
143,485
4 -13
-4
391,345
II
101,866
-4
4
20
-4 1,1 55,003
24,751
12
7
97,677
21
-2
45,471
II
-I
50,122
-2
-3
379,880
6
-3
25,195
23
-3
53,886
8
-7
85,391
3
5
105,483
25
7

11.3
14.3
17.9
15.4
15.2
7.0
17.2
14.9
14.8
9.8
16.4
11.6
12.8
11.4
9.4
11.6
10.1
11.4
9.8
10.2

12.5
15.5
15.4
15.1
14.6
6.6
19.7
15.8
15.1
10.3
14.9
11.9
11.2
11.5
9.8
11.5
8.4
11.3
10.6
9.1

12.0
15.7
15.7
15.7
16.2
6.7
17.4
16.7
15.6
9.5
17.3
I 1.4
12.8
11.6
9.5
11.9
10.7
12.2
9.2
9.6

-3 $4,553,194

14.6

15.1

Debits to deposit accounts e;l;cept Interbank accounts.
Demand and time deposits, including certified and officers' checks outstanding but ex·
c1uding deposits to the credit of bClnks.
3 These figures include only one bank In TexarkClna, Te;l;as. Tota l debits for all banks in
re;l;arkana, Texas-Arkansas, including two banks locClted In the Eighth District, amounled to
$39,380,000 for the month of April 1952.
I
I

Debits to deposit accounts reported by banks in 24 cities
of the District were 3 percent lower in April than in March
but 9 percent above the total for April 1951. The contraction
of debits during April was general over the District, as most
cities showed decreases. The turnover of deposits, reflecting
the annual rate of use of deposit accounts, was 14.6 in April
(the same as for April 1951), as compared with 15.1 in
March.
On January 31, 1952, demand deposits credited to personal accounts (as contrasted with business accounts) at
banks in the Eleventh Federal Reserve District amounted to
an estimated $3,053,000,000, or approximately 52 percent of
total demand deposits of individuals, partner~hips, and corJlorations held by these banks. On January 31, 1948, demand
deposits credited to personal accounts constituted 56 percen t of the total. Although personal demand deposits rose
$473,000,000, or about 18 percent, between January 31,
1948, and January 31, 1952, the proportion of demand
deposits of individuals, partnerships, and corporations held
in personal accounts declined in each of the 4 years, During
the 4-year period, demand deposits owned by farmers rose
almost 32 percent, as compared with an increase of 13 percent in other personal accounts.

MONTHLY BUSINESS REVIEW

CONDITION OF THE FEDERAL RESERVE BANK Of DALLAS

OWNERSHIP OF DEMAND DEPOSITS OF INDIVIDUALS,
PARTNERSHIPS, AND CORPORATIONS'

=====================(~ln='==~ d.=O=f=d=o==~=)===================== ~
~ ~a="=
110

Banks in Eleventh Federal Reserve District

May 15.

{In millions of dollars}
January 31

Type of hold.r

1952

1951

1950

1949

1948

Total manufacturing and mining

715
244
887
345
134
275
48
142
3.os3
978
2,075
5
$5,848

$ 623
231
805
303
120
247
35
118
2,932
939
1,993
5
$5,419

496
198
764
292
128
220
29
115
2,673
786
1,887
2
$4,917

$ .68
173
736
286
104
202
28
122
2,576
755
1,82 1

$ .37
158
716
275
94
192
27
121
2,580
7.3
1,837

$4,695

$4,600

Public: utilifiti ••••• •••••••••
Trade ••••••••••••••••••••
Other nonflnancial ••••••••••
Insurance •• • •••••••••••••••

All oth.r flnanclal. •.•• ••••••
Trust funds of bonks •••.•••• •
Nonprofit •••••••••• • •• ••••

Per5Onol ••. •.•..•.•••• .• ••
Farmers •• •••••..••.•.•••
Oth.rs ..•.... •. .. .••....
Foreign •••• ••••••••••••• ••
Total ••••• • . .•••••••

a-Estimated.

Demand deposits owned by businesses-proprietorships,
partnerships, and corporations-rose at notably faster rates
than those of personal deposits. For example, demand deposits of manufacturing and mining firms rose almost 64
percent during the 4 years, while public utilities, financial
concerns (other than insurance companies), and insurance
companies showed increases of 54.4 percent, 43.2 percent,
and 42.6 percent, respectively. Trust funds of hanks rose
almost 78 percent. Consequently, the proportion of total
demand deposits of individuals, partnerships, and corporations credited to business accounts at banks in the District
increased. Manufacturing and mining businesses owned 12.2
percent of total personal and business demand deposits on
January 31, 1952, as compared with 9.5 percent on January
31, 1948. The proportion owned by public utilities rose
from 3.4 percent to 4.2 percent. On the other hand , trade
establishments accounted (or 15.2 percent of the total on
January 31, 1952, as compared with 15.6 percent 4 years
earlier,

NEW MEMBER BANK

The First National Bank of Rarville, Rarville,
Louisiana, a newlr organized institution located in the
territorr served br the head 0 fJice of the Fedeml
Reserve Bank 0/ Dallas, opened lor business Mar 10,
1952, as a member of the Federal Reserve Srstem. The
new bank has capital of $100,000, surplus of $50,000,
and undivided profits of $50,000. The officers are:
W. D. COllon, President; fohn C. Morris , Sr., Vice
President; R. L. Walters, Vice President; O. C. Lrnch,
fr., Cashier; F, L. Ellerbe, Assistant Cashier; and Eula
Mae Fletcher, Assistant Cashier.
NEW PAR BANK

The Communitr State Bank, Waco, Texas, a newlr
organized, insured, nOTlJTtember bank located in the
territorr served br the head office of the Federal
Reserve Bank of Dallas, was added to the par list on
its open ing daJe, Mar 14, 1952. The officers are: foe
H. Craven, President; Rar mond Ford, Jr., Vice Presi·
dent; and f. D. Hudson, fr., Cashier.

April IS,

May IS,

1952

Item

1951

Tofal gold certiReat. re'erve••••• ....•.... • . $ 678.790
5, 100
Discounts for member banks ••••...•.•..•..•
Industrial advances ••••••....•... .• ....••..
5
foreign loans on gold •••..•.•..•.• , • • .• •••
38
1,022,840
U. S. Government securities •.••....•....•..•
Tolal earning Quels •••.•••••••••••..••••.•
1,027,983
Member bank reserve deposits •• . •..•.•. ...
987,167
f ederal Reserve nol8. in actual circulation •...•
681,747

1952

$ 537,630
1,911
30

1,068,769
1,070.710
928.713
620.834

624,383

15
532
1,061,827
1,0 62,374
975,654
679,449

The value of construction contracts
awarded in the District during April
was about $140,000,000-6 percent be·
low both the previous month and the
corresponding month last year. Residential awards of $48,000,000 were one·third lower than a year earlier, while
nonresidential awards of about $92,000,000 were up 19 percent. The value of residential and nonresidential award's in
the United States increased 15 and 17 percent, respectively.
VALUE OF CONSTRUCTION CONTRACTS AWARDED
lin thousands of dol/a")
Janua ry-A pril
April
1952p

Area and type

March
1952.

April
1951

ELEVENTH DISTRICT •• $ 139,834 $ 148,733
Residential . .•• . •.
48.089
71,397
All other, •.. . .• ..
91,745
77,336
UNITED ST ATESI, , •• 1,597,517 1,374,991
681,614
590,8.48
Rl!!sidl!!ntiol •••.•• •
All othl!!r •••. , .•••
915,903
78<4.1A3
I

1952p

1951

149,531
55,981
93,550
1,321 ,254
592,717
728,537

455,499
172,582
282,917
4,706,068
2,008,490
2,697,578

$ 547,136
2..46,143
300.993
",831,716
2,117,481
2,714,235

•

37 states east of the Rocky Mountains.

~OJRCI~~~~o~: Dodge Corporation.
Within the District, nonresidential awards continue to
represent an increasing proportion of total awards. This
situation is due primarily to the industrial expansion of
defense·related industries, although the lower level of residential construction activity accentuates this trend. Residential awards in the District in the first 4 months of 1952
accounted for only 9 percent of the United States tolal, com BUILDING PERMITS
.4 months 1952

Percentage
change In
valuation from
April 1952
City

Nlln'lber

Valuation

Number

Valuation

April March
1951 1952

LOUISIANA
463 $ 2,081,763
Shreveport ••. •
TEXAS
Abilene •..... .
158
1,075,936
2,815,705
Amarillo •• ••. .
373
247
3,4 80,458
Austin ••.• . •••
1,819,677
Beaumont ••• . .
232
Corpus Chritli. •
410
1,245,327
Dallas .• . . . •.• 2,150
9,265,032
290
EI Paso .. ••••.
889,1 06
Fort Worth •.•. 1,084
4,821,329
127
147,91 8
Galveston •.•••
Houston, ••.•••
992 11,622,722
Lubbock .•••..
258
l,90S,8S9
Port Arthur • . ..
192
379,514
Son Anlonio ... 1,356
3,964,032
Waco ••• ....•
334
1,654,9 31
1,007, 357
Wichita Falls ...
113

-52

1,400 $

141
7
99
315
9
- 13
-27
31
- 12
18
93
1.
-11
48
-51

2
31
11
358
-39
54
-54
-2
-44
57
48
76

562
1,576
1,067
989
1,508
7,317
1,295
3,804
465
3,808
1,143
658
5,383
1,415
602

Tafol ••••••••••• 8,779 $48,176,696

- I

59
-40

f Indicates change of ress than one·holf of 1 percent.

Percentage
change in
valuation
from ..
months
1951

8,883,757

3,093,689
9,448,739
11,506,359
4,230,285
5,729,258
29,547,470
7,464,004
15,5 70,515
923,462
36,3 87,18'
5,956,035
14,768,789
6,180,931
12,157,944

- 8
5
12
67
- 44
- 30
13
-3 1
-36
-39
- 13
-22
-18
10
280

32,992 $172,876,650

-17

1,028,22~

MONTHLY BUSINESS REVIEW

pared with 12 percent a year earlier; nonresidential awards
accounted for 10 percent, or about the same as a year ago.
• Despite the strong showing of nonresidential awards, total
awards in the District for the first 4 months of 1952 were
16 percent under the year· ago figure.
The oil strike appears well along toward settlement, al.
though it will continue to have repercussions on the industry
for some time. The strike began on May 1 and involved a
coalition of CIO, AFL, and independent unions demanrung
originally a 25·cent hourly wage increase and: an increase
in night·shift differentials. These demands were in excess of
the amount wruch could be granted under the prevailing
rules of the Wage Stabilization Board, and little progress
was made in settling the strike until the WSB announced
On May 14 that fifteen cents was the maximum amount it
would approve as an hourly wage increase.
At the height of the strike, more than one·third of the
Nation's refinery capacity was shut down, some pipelines
and bulk terminals were tied up, and crude oil production
in some areas was curtailed sharply. Texas probably was
affected more severely by the strike than any other state,
with about 60 percent of the State's refinery capacity shut
down, most of which was located on the Gulf Coast. The
strike involved an estimated 90,000 workers in the Nation,
with perhaps 25,000 of them in Texas,

The strike came at a time when refined stocks, with the
exception of aviation gasoline, were ample or at relatively
• high levels in most areas of the country. Furthermore, the
demand in May is usually lower than in most months of the
year. While shortages of motor gasoline were reported in a
few cities of the Nation, most areas had no appreciable diffi.
culty. Commercial and military flights, however, were cur.
tailed because of a tight supply situation in aviation
gasoline,
The area with the heaviest stock position when the strike
began was the central portion of the Nation, which is also
the area in which most of the struck refineries were located.
On April 26, prior to the strike, aggregate stocks of the four
maj or refined products in those sections of the country be·
tween California and the Appalachian Mountains were over
16 percent higher than on the corresponding date of the
previous year. In the Eleventh District, stocks of major
refined products were almost 21 percent higher than a year
earlier. East Coast stocks were up only 5 percent, while
stocks in California were down 23 percent.
Crude oil stocks in most areas of the Nation were also at
a relatively high level when the strike began. While East
Coast stocks of crude oil on April 26 were down a little
more than 2 percent from a year earlier and crude stocks
in California were up less than 1 percent, aggregate stocks
of crude oil in other sections of the Nation were over 11
percent higher. Crude stocks in the Eleventh Federal Reserve
District were up 10 percent from a year earlier, and total
~ational stocks were 9 percent higher. Moreover, crude oil
stocks in the Nation rose noticeably during April.
The April cut in Texas allowables, which had been made
in recognition of the somewhat heavy crude stock situation,

resulted in a 2·percent reduction in crude oil production in
the District for that month; but the daily average produc·
tion of 3,185,000 barrels, although below February and
March, was higher than any other month on record. Texas
made a further cut in allowables for May, and reductions
also were made in other states in the Southwest. The strike
undoubtedly caused a more substantial cut in crude oil
production in this District than was indicated by the May
allowables.
CRUDE Oil PRODUCTION
(Barrels)

April 1952
Area

Total
prodvttion

ELEVENTH DISTRICT
Texas R. R. Cam. Districts
1 Sovth Central..... .... 1,017,200
2 Middle Gulf........ . . 4,965,350
3 Upper Gulf .......... . 14,801,050
4 Lower Gulf . • • • • • • • • • • 8,000,800
5 East Central. • .• . . . . . . 1,840,700
6 Northeast .•••........ 11,910,450
East Texas......... 8,105,400
Other fle lds... •••.• 3,805,050
7b North Central . . • . • . . • • 2,682,100
7c Wed CentraL........ 4,188,650
8 West ................ 30,190,800
9 North....... ... .. . ... 4,845,800
10 Panhandle............ 2,482,700
Total Texas ••• . ••••• 86,925,600
New Mexico............ ... 4,815,700
North Louisiana ...•....... . , 3,816,600
Total Eleventh District ..... , 95,557,900
OUTSIDE ELEVENTH DISTRICT... 95,227,250
UNITED STATES .............. 190,785,150

Daily ovg.
production

33.907
165,512
493.368
266,693
61,357
397.015
270.180
126,835
89.403
139.621
1,006,360
161,527
82.757
2,897,520
160,523
127,220
3,185,263
3,174,242
6,359,505

Increase or decrease in daily
average production from
April 1951

247
-351
-10,203
8,656
9,549
2,495
-8,520
11.015
5,733
40.206
69.388
10,910
-6,890
129,740
18,570
-2,005
146,305
74,479
220,764

March 1952

213
-4,554
-5.956
-5.757
-1,337
536
4.622
-4,086
755
-6.187
-32.114
-73
536
-53.938
754
-509
-53,693
4,'58
-49,035

SOURCE: Estimated fram American Petroleum Institute weekly reports.

Crude oil stocks accumulated at a record rate, at least
during the first part of the strike. On May 10 national stocks
of crude oil were the highest in 13 years, and district stocks
were the highest on record. National crude stocks on that
date amounted to 276,897,000 barrels, or 5 percent higher
than on April 26, prior to the strike, and 14 percent higher
than a year earlier. Meanwhile, crude stocks in the District,
at 144,455,000 barrels, showed increases of 7 percent and
19 percent for the same periods, respectively. The major
proportion of the strike·induced increase was in Texas. A
relatively full storage situation may have moderated the
increase in crude stocks during the latter days of the strike.
The precise effect of the strike on refined stocks is not known
at the time of this writing, but they undoubtedly have been
reduced noticeably.
The sharp increase in crude oil stocks resulting from the
strike, on top of an already relatively high stock position,
may have the effect of curtailing crude oil production in the
coming months until the excessive stocks are worked off.
The Texas Railroad Commission announced a moderate cut
in allowables for June, the third successive monthly reduc·
tion. A sharp cut, sufficient to eliminate rapidly the excessive
crude inventories, apparently is not practical. Some plants,
particularly among the ones not shut down during the strike,
are dependent for supplies of crude on current production;
consequently, a sharp cut in the crude oil allowable might
hamper their operations. Correction of the heavy crude stock
situation must come gradually. On the other hand, since the
strike undoubtedly has reduced refined stocks in some areas,
refineries may increase somewhat their demand' for crude
oil until deficiencies in refined inventories have been
eliminated.

Full text of Review (Federal Reserve Bank of Dallas) : June 1, 1952

FRASER