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MON<THLG)(
REVIEW
FED ERA L
\ '01. 39, No, 3
RES E R V E
BANK
DALLAS, TEXAS
o
F
DALLA S
March 1, 1954
THE ECONOMIC REPORT OF THE PRESIDENT OF THE UNITED STATES
omy and contributing to sustained economic growth if they
have an understanding of the basic philosophy and policy
recommendations of the President as presented in his Economic Report.
The Employment Act of 1946 requires the President of the
United States to transmit to the Congress an Economic Report
covering, in general, current and prospective developments,
as well as to review the economic programs of the Federal
Government and to submit a program for action with recommendations for supporting legislation_ The Act also created
a Council of Economic Advisers to keep informed of developments in all phlises of the economy; to assist and advise with
the President on economic matters and in the preparation of
the Economic Report; to analyze and interpret economic
developments; to appraise programs and activities of the
Government in the light of the policy declared in the Act;
and to formulate and recommend national economic policies
to promote employment, production, and purchasing power
under free competitive enterprise, Likewise, the Act established a Joint Conmlittee on the Economic Report in the
Congress to receive the Report and to function as a liaison
body for studying matters relating to the Report and recommending actions to the Congress,
This article presents a summarization of some of the more
important features of certain parts of the Report. In this
summarization, no attempt is made to interpret or evaluate,
to support, or to criticize any part of the Report. The material is presented in summary form, with the thought that the
views expressed in the Report will be of value and interest to
bankers, industrialists, businessmen, and others in the District who, in directing their own affairs, contribute so importantly to the utilization of the Nation's material and human
Under the reorganization plan adopted in 1953, all of the
advisory functions of the Council are vested in the Chairman.
At the same time, the President established under the chairmanship of the Chairman of the Council of Economic
Advisers an "Advisory Board on Economic Growth and
Stability," composed of the heads of several departments and
agencies of the Government or their represen tatives, so that
the work of the Council could be made more effective at the
top policy level of the Executive Branch. Through this Board
and the committees that have been or may be utilized, the
Council can maintain, through its expert representatives, a
watchful eye over developments in every major field of economics embraced by its responsibilities.
This chapter is devoted primarily to presenting the main
lines along which the Federal Government proposes to carry
out the mandate of the Congress as set forth in the Employment Act of 1946, as amended: "To promote maximum employment, production, and purchasing power . . . in a manner
calculated to foster and promote competitive enterprise and
the general welfare." At the outset, the Report states that our
economic goal is an increasing national income, shared equitably among those who contribute to its growth and realized
in dollars of stable buying power. It emphasizes that the
achievement of this goal demands that the dynamic forces
of society be fully released. Hence, it is held that Government
programs must be designed to help maintain reasonable stability during periods of readjustment and to encourage longterm growth.
The ]954 Economic Report of the President was transmilled to the Congress on January 28. This Report is the first
one submitted by the present Administration and the first
prepared with the assistance of the reconstituted Council of
Economic Advisers and its auxiliary committees. Moreover,
the current Report has greater-than-usual significance, because it has appeared at a time when the economy is undergoi ng some readjustment on a broad front, with a downward
trend noticeable in the major indexes of economic activity.
All private groups in our economy will be in a better position
to plan and direct their own activities to the end of achieving
the obj<'Ctive of strengthening the basic structure of the ccon-
•
ff'SOUrces.
Role of Government in Economic Progress
Jn stressing the importance of progress, the Report recognizes that the United States must continue its efforts to build
security forces adequate to deter and to strike back at aggression and, at the same time, engage in parallel efforts to raise
defense potentials and living standards of friendly peoples in
other countries. If thesc needs are to be met and American
living standards are improved, a high and sustained rate of
economic growth and industrial production is necessary.
As a prelude to a discussion of the conditions of progress,
the Report states that progress is the product of a people's
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
34
MONTHLY BUSINESS REVIEW
culture or "way of life," which includes such intangible and
spiritual qualities as their religious ideals, belief in personal
dignity, faith in self·improvement, capacity for cooperation,
and receptiveness to change. Recognizing the importance of
the atmosphere in which people pursue their productive activi·
ties and that progress can he nurtured by wise public policy,
the Report discusses the following basic conditions of eco·
nomic progress.
Individual Freedom
It is pointed out that progress can best be made in - and
traditionally the Government has sought to create and main·
tain - a democracy of opportunity in which individuals have
general freedom and the specific opportunities to work, to
spend, to save, and to invest and the incentive to pursue these
opportunities to the fullest extent.
Adequate Incentives
Recognizing that present conditions require a much larger
role for Government and a much higher level of taxation, it
is pointed out that Government must exercise greater care to
sha pe its policies so as to strengthen economic incentives.
These incentives should include reasonable assurance that the
wage earners will be fairly rewarded for greater exertion and
improvements in skill and capacity; that savers will receive
a fair return for contributing capital; and that the risk·taking
investors will obtain adequate rewards for successful ventures.
Effective Competition
The Report states that open markets and effective competi.
tion are the means of channeling productive efforts toward a
private enterprise system. This can be accomplished because
open markets provide opportunities for newcomers to enter
the productive process, and competition performs the role of
regulator and energizer to direct the economy into those lines
which most accurately meet the needs or tastes of consumers.
Since competitive markets are basic to the functioning of the
economic order, the Government has a vital responsibility,
free from restraints, to preserve and strengthen competition
and to challenge through antitrust laws any outcropping of
monopoly power.
such knowledge, create an endless roster of new industries
and products, as well as more efficient processes and the im·
provement of old products.
Maintenance of Econol11ic Stability
The Report recognizes that an economy cannot be abso·
lutely stable under a competitive enterprise system, which
gives freedom to individual initiative and encouragement to
technological change and innovation. To meet this situation,
the economic system needs fluidity and resilience, which will
permit flexibility in individual prices and adjustments in pro·
ductive activity under reasonably stable conditions. Price
lIexibility is essential to the shifting of resources from uses in
which rewards of labor, management, and capital are low to
uses in which rewards are high. Likewise, it encourages in·
dustries benefiting from advances in technology or shifts
in demand to offer expanding opportuniti es for employment
to fill the gap created by thc fewer jobs in these industries
which have lost public favor. The Report indicates that, in
these circumstances, the proper role of Government is to
foster conditions under which adjustments can be accomp·
lished with a minimum of hardship or difficulty, the most
important of which is a reasonable measure of stability in the
over·allievel of employment and incomes.
Floot of Individual Security
The Report states that since a dynamic urbanized economy
poses numerous hazards for the individual, a condition of
economic progress is a floor of secnrity for him and that the
Government should help to establish it. The Report recog·
nizes that the spread of private pension and insurance plans
and the social security programs have strcngthened the forces
of economic growth by helping to relieve individuals from
the anxieties attached to sickness, accident, unemployment,
and old age but indicates that a further strengthening is highly
desirable. At the same time, it emphasizes that the individnal
has a responsibility to provide, as far as he can, for his own
security, and Government can make its greatest contribution
to the welfare of individuals by fostering improvements in
their productivity.
World Community of Free Nations
Savings and Cap ital Formation
The Report takes the position that since the growth of real
capital is dependent upon an ample supply of savings, it is
essential that economic policy give encouragement to thrift
and that the Government can make its contribution best
through assurance that a dollar saved today will not go to
waste through inflation of prices tomorrow. Moreover, sav·
ings are most effective when readily transformed into produc.
tive investment. To accomplish this, the economy must have an
efficient, competitive financial system, capable of channeling
the accumulated funds into those lines in which they appear
likely to be most productive.
Research and Devel opment
It is stated that a fundamental condition of economic prog·
ress is a growing fund of scielltiflc alld technological knowl·
edge. Research and developm ent, wh ich are respon si ble for
Finally, the Report notes that economic progress in our
country is tied closely to the progress of the rest of the world.
This interdependence prevents this country from making
maximum progress while other nations are suffering from
economic stagnation or decline. Hence, a program for pro·
moting economic progress in America must provide for an
extension anel strengthening of economic ties with the rest of
the world. This can be accomplished, in part, through an
accelerated flow of goods and of capital across national boun·
daries.
Performance of the American Economy
III its analysis of developments during 1953, tbe Report •
, tates that. despite the fact that economic aClivity receded
sOlllCwhat at tllP dose "I' the yea r, lI ell' ....cords were estal,·
ii,hed in illdu>t ri al activity, employmellt, and distribution
MONTHLY BUSINESS REVIEW
of incomes, with unemployment dropping to the lowest level of
any peacetime year in recent decades. The average level of
prices showed remarkable stability. The fruits of expanding
production and enterprise were distributed widely among the
population. Nevertheless, some sections of industry, especially
farming, did not participate in the widespread prosperity.
In appraising the general increase in the Nation's output in
1953, the Report indicates that it was achieved partly through
additions to cmployment and partly through gains in produc.
tivity. In manufacturing, for instance, where the average
length of the workweek was about the same in 1953 as in 1952,
the number of employed rose 5 percent and output, 8 percent.
Likewise, larger output occurred in agriculture and some
othcr branches of production. According to the Report, the
basis for this large increase in the output of the Nation's fac·
tories, mines, and construction yards is the $180,000,000,000
spent by American business firms since 1946 for new plant
and equipment to expand and modemize productive facilities.
In 1953 the increased production generated a larger 110w of
income to individuals, corporations, and the several levels
of government. 'iVhile both workers and investors shared in
the larger personal income, the percentage of total income
received by workers increased. Proprietors' incomes declined,
both in dollars and relatively to other groups, largely as a
result of the decline in farmers' incomes. Corporate profits,
whcther before or after taxes, showed a greater rate of in·
crease than disposable personal income. It should be noted
~ that the bulk of the Nation's huge output of goods and servo
ices, as represented by the gross national product, was dis·
tributed among consumers, business firms, and the Govern·
ment in abont the same manner in 1953 as in 1952. The Report
indicates that, whereas the increase in gross national product
in 1952 was utilized by the Government for an expansion of
the defense program, the gain in 1953 was devoted principally
to civilian uses.
Thc Rcport points out that, despite the high level of produc.
tion and consumption, some important developments and
readjustments could be noted in various sectors of the econ·
omy even before contraction became visible after midyear.
These adjustments included a continuing shrinkage of the
real income of farmers; a downward drift in stock prices
after the turn of the ycar; a downturn in the average length
of the workweek in manufacturing and in orders for durable
, goods received by manufacturers; a failure of retail trade to
expand, while consumer debt and business inventories kept
rising; a ri.e in business failures; and an increase in interest
rates at an accelcrated pace. The Report discloses two signifi.
cant facts: One is that various indicators of economic activity
reached peaks at different times during the year, but none
declined significantly from these peaks; the other is that while
the broad composites failed to convey the degree to which the
decline had been diffused over the economic system, it was
cl ear from the behavior of the components of the indexes that
• toward the close of the year a large portion of the economy
• was undergoing readjustment.
Ti,e I{"port i"di cales that the immediate cau.e of the con·
traction was an imbalance between production and sales that
3S
developed earlier in the year. In the months following the
settlement of the steel strike in July 1952, the strong consumer
demand and a need for inventory replacement set in motion
a period of intense productive activity. In the period from the
fall of 1952 through the first half of 1953, this productive
activity was induced, in part, by the fact that consumer spend.
ing, augmented by growing indebtedness, was increasing
faster than disposable personal income. The Report indicates
that the inlbalance between production and sales in the early
months of 1953 stemmed primarily from the following fac·
tors: Quicker deliveries lessened the need for businesses to
add to their inventories; business firms had overestimated
consumer demand; and after the turn of the year consumer
spending turned more in the direction of services than of
commodities.
Because of the sluggishness in retail sales, which feU below
business expectations, inventories soon piled up in all hands,
with the highest rate of accumulation concentrated in a few
major durable goods industries - motor vehicles, other transportation equipment, and primary metals. The growing acuteness of the inventory problem, which was augmented by the
reshaping of the defense program, had caused manufacturers
in numerous industries to curtail operations to bring output
and inventories into better alignment with orders and sales.
As a result of the curtailment in manufacturing, overtime
was reduced or eliminated, some workers were laid off, the
rise in hourly earnings of factory workers was checked, and
average weekly earnings stopped rising. During the last half
of 1953, employment in areas other than manufacturing experienced little change in the aggregate, and basic wage rates,
in general, continued to move upward.
The Report states that the contraction in economic activity
since mid·1953 thus far has been largely in the nature of an
inventory adj ustment. It points out that total expenditures
- exclusive of reduced expenditures by business firms or
additions to inventories - have remained virtually un·
changed. The decline in Fedcral expenditures has been offset
by larger state and local outlays. The smaller expenditures by
business firms for inventory additions rel1ect adjustments
designed to bring production and inventories more nearly
into line with current sales.
Tn discussing wholesale and retail prices, it was brought out
that the differential between costs of industrial raw materials
and prices of finished industrial commodities widened further
in 1953, as industrial prices rose somewhat and prices of in·
dustrial raw materials and farm products continued to fall.
The year's outstanding development in primary markets was
the continued decline in prices of major farm products, reflecting record supplies and sharply curtailed exports. On the
other hand, the consumer price index increased slightly,
largely because of higher costs of rents, medical care, and
transportation, which are still in the process of adjusting to
the price revolution of the past 10 to 15 years.
It was pointed out that while the reduced farm income
led to smaller purchases of farm equipment, machinery, and
IJuiltlillg 1I!>Ilt-rials, it 8l'pears that ~ross Iarlll investment Wag
larger than the normal wear and tear on existing farm plant
36
MONTHLY BUSINESS REVIEW
and equipment. In the international field, the outstanding
development was the achievement of a broadly balanced
pattern of trade and payments at high and growing levels of
economic activity, which was accomplished in an environment
of general monetary stability and diminishing controls.
Governmental Policy in a Year of Economic Change
In this section the Report indicates that the broad objectives which guided governmental actions were the stimulation
of output and employment, the protection of the purchasing
power of the dollar against further shrinkage, the wide distribution of the fruits of expanding activity, and the extension of
international trade and investment. At the same time, it recognizes that the road to reasonably full employment without
price inflation is narrow. Since there always exists the danger
that the economy, by moving too far on one side, may enter
the zone of inflation or, by moving too far to the other side,
may slip into the zone of contraction, the essential need is to
moderate economic movements before they acquire large
momentum. It is recognized, however, that the ability to do
so is limited, partly because the economy is subject to the
shifting moods and modes of human behavior and partly
because policy makers cannot predict with scientific accuracy
the strength of the responses which their actions may generate.
The Report indicates that the policies pursued in 1953
included monetary and credit policies, debt management policies, and fiscal policies as instruments to influence general
economic movements and other broad Government policies as
a means of creating a more favorable climate in which the
economy can operate.
During the early part of the year, when economic activity
was increasing rapidly, inflation seemed to be the most critical
and pressing problem, and the protection of the value of the
people's money was the immediate concern of the Government_ Hence, both credit policy and fiscal policy were aimed
at this objective. The Federal Reserve System allowed the
buoyant demand for credit to adjust itself to the restricted
market supply and in January raised the discount rate from
1% percent to 2 percent to discourage member bank borrowing at the Federal Reserve banks. To reinforce this policy,
the Treasury sought to obtain the funds needed to finance
the Government from investors other than banks. In May
the President recommended to the Congress that the excess
profits tax be extended to the end of the year as a means of
holding down the Government deficit when there was still a
latent inflation.
The restrictive monetary and debt management policies
pursued during the early months of the year had a more potent
effect than was generally expected. Federal Reserve authorities met the situation quickly by augmenting reserves of member banks through substantial purchases of Government
securities in the open market and by reducing reserve requirements of member banks_ This prompt release of bank reserves
ended the existing tightness of tbe credit market and gave
assurance to the business community that the needs for private
credit and Treasury financing during the months ahead could
be met by the banks. In subsequent months the maintenance
of monetary ease in the money markets was facilitated by the
coordination of debt management and credit policies, which
not only strengthened the lending power of banks but also
minimized the competition between Treasury borrowing and
demands for long-term credit by business firms and state and
local governments. In June and subsequent months, interest
ratcs declined , and mortgage credit and credit for other needs
became more plentiful.
In the fi eld of fiscal policy, in addition to the retention of
the excess profits tax during the last half of 1953, the Treasury announced during the fall that the Administration would
not seek to postpone the reduction in personal income tax
scheduled for January 1954.
With respect to credit policy, its role as a stabilizing tool
was extended to the housing industry when the Congress
created stand-by authority, which gives the President permissive authority to vary down payments and maturities
under FHA-insured mortgages on certain properties.
In the field of agriculture, where difficult problems of adj ustment were faced, steps were taken to provide needed
assistance. These included increased commitments to the
Commodity Credit Corporation, r elief to drought-stricken
areas, Government purchases of beef to assist in checking the
collapse in cattle prices, and the institution of a program of
famine relief to friendly nations.
To strengthen the basis of the economy, the Government
took certain steps during the year. One was to remove the
direct controls of prices and wages to restore to individuals
and businesses greater freedom of action. Another was the redrawing of the line separating public from private activities,
so that the Government could divest itself of functions which
can be performed more efficiently by private enterprise. A
further step was the effort to broaden the scope of home
ownership and of the social security system, so that more
people might gain a greater measure of security in a dynamic
environment.
According to the Report, the Government, recognizing the
need for tax reductions to provide adequate economic incentives, sct about energetically to bring down the rate of expenditures and thus pave the way for tax reductions which would
enable the people to retain morc of their incomes to spend
themselves.
Appraisal of the Current Economic Situation
In this section the Report attempts to assess the strength
and weakness of the economy and to give some indication of
the probable course of the economy in the months ahead. It
indi cates that certain factors which contributed to the maintenance of a high level of business activity in 1953 are also
elements of strength in the current situation and outlook.
These include the following.
*
The continued high level of final purchases of output by
business, consumer" and Government will make it possible
for business establishmen ts to apply methods to ease adequately their inventory situations and to achieve gradually
MONTHLY BUSINESS REVIEW
a better balance between production and sales. Since substantial progress was made in the corrective process during th e
closing months of 1953, it was felt that a continuance of the
high final expenditures would soon end the contraction in
product ion.
>" The downward adjustments that have occurred in prices
of industrial raw materials and farm products may be reRected in downward adjustments in manufacturers' prices
for finished goods.
*
Business firm s plan to maintain capital expenditures
for plant and equipment at a high level ; available measures
seem to suggest that productive facilities are not excessive in
relation to current rates of output.
'" The financial position of business firms is strong, and
their incentive to invest will be encouraged hy the termination of the excess profits tax.
*
Housing construction is expected to continue at a level
close to that for 1953. Despite the record volume of home
building in recent years, vacancies are relatively low, and the
effect of the reduced rate of family formation should be
largel y oJIset by other factors, such as population movement
to suburbs, improvement of incomes, and the recent easing
of mortgage funds.
*
The outlook for other consumer expenditures is likewise considered to be very favorahle. During the next 6
months, disposable income of individuals (personal income
after taxes ) may well approximate the rate in the final quarter
of 1953, mainly because of the lO-percent cnt in perso nal
income taxes, effective January 1, 1954, which may total
$3,000,000,000 for the year. The Report also indicates that an
increase in consumer cxpenditures might occur through a
rcduction in the rate of savings, which has been at an exceptionally high average rate of 7 percent in the past 3 years,
as compared with an average of about 4 percent in 1947-50.
The latest survey of consumer attitudes (October 1953)
indicates that more consumers consider the market favorable
for th c purchase of durable goods than at any time since the
outbreak of the Korean War. Liquid assets of conswners are
large and widely distributed, and whilc the proportion of
consumer income absorbed by contractual obligations has
increased substantiall y in recent years, it is no larger than
the pre· World War II level.
'" Federal Government expenditures will continue to be a
stroll g sustaining factor. While the annual rate of these outla ys may be reduced by $2,000,000,000 by mid-1954, mainly
in national sec urity expenditures, it is expected that this reduction will be co unteracted hy a corresponding rise in
expenditures by state and local governments. There is still
all immense backlog of demand for schools, highways, hospitals, and other facilities, and public pressure for their
expa nsion and improvement is mounting.
*
Domestic demand for farm products remai ns near r ecord
levels, while pxpo rt demand seems unlikely to weaken much
(urther. With farlll products prices apparently stabilizing,
cash fa rlll illcome should be near the 1952 level. aud farmers'
expenditures for consumption and equipment ; hould be well
sustained.
37
*
Finally, the Report suggests other grounds which justify
confidence in the future. (1) Financial institutions are fully
capable of meeting all deserving credit demands and of withstanding successfully any strains imposed by business readjustments. (2) There have been no extensive speculative
developments in the commodity, security, or financial markets
during recent years. (3) Certain structural changes in the
economy will serve to bolster consumer incomes as a key to
prosperity, such as social security and private pension systems, unemployment compe nsations, and certain ilexibilities
in the Federal tax structure.
Toward a Stronger Economy
The Report takes the position that prudence, as well as zeal
for economic improvement, requires that public policy Contribute both to the immediate strength of the economy and to
its long-term growth and indicates two classes of action that
should be taken during the current year to build a stronger
economy.
The first of these action s should be the protection and promotion of economic stability by modernizing unemployment
insurance; by broadening the base and benefits of old-age and
survivor insurance ; by permitting a larger "carry-back" of
losses for tax purposes; by granting broad discretionary
authority to the Executive to alter, within limits and appropriate to changing circumstances, the terms of governmentally
insured loans and mortgages; by establishing a secondary
home mortgage market; and by making improvements in the
planning of public works programs. The other is that steps
should be taken to stimulate the expansive power of individual
en terprise by revising the tax laws so as to increase incentives
and to remove certain impediments to enterprise, especially
of smali business ; by improving credit facilities for home
building, modernization, and urban renewal; by strengthening the highway system; and by facilitating the adjustments
of farming to current conditions of demand and technology.
The Report then outlines a program which includes recommendations for state and local governments, as well as for the
Federal Government. It outlines specific suggestions in the
fields of tax structure, housing and its financing, agriculture,
social insurance and the minimum wage, and puhlic works.
In the field of international relations, the Report observes that
the achievement of a mutually advantageous system of trade
can be furthered by the maintenance of an expanding United
States eco nomy. It points out, however, that the favorable
effects of the vigorous tariff-reducing programs in recent
years have been partly lI eutralized by the atmosphere of uncertainty as to its continuit),. It is expected that a specific
program will be presented to the Congress later on the basis
of the report of the Commission on Foreign Economic Policy.
In concluding, the Report states that these recommcndations, like the analysis of the current situation on which they
arc based, envision a sustained improvement in American living standards and a broadly expanding economy. There is
every reason for co nfidence that our system of individual
ent erprise, "hich is one of the wonders of the world, will long
con tinue to be a prod ucer of ever-increasing wealth and
widely diffused well·being.
38
MONTHLY BUSINESS REVIEW
REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
District department store
sales in January were 10 percent less than a year earlier;
the corresponding loss in the
first 2 weeks of February was 4
percent. Accounts receivable and inventories declined in January; compared with a year earlier,
end-of-month accounts receivable were up 5 percent, while inventories were down 4 percent. Orders
outstanding were 17 percent below a year ago.
Farmers in most parts of the District made good
progress with field work in February. Planting of
summer crops is active in southern counties; early
cotton is up. The winter wheat crop is in generally
satisfactory condition but needs moisture. livestock
are in fair to good condition, despite lock of green
feed in western areas. Form commodity prices in
February were steady to strong; cotton advanced.
The total dollar volume of retail
sales at department stores in the
Eleventh Federal Reserve District
during January showed a decline of
10 percent compared with January
1953. Part of that decline resulted from one less business day
in January of this year. Sales continued under year-earlier
totals during the early part of February and for the 2-week
period ended February 13 were 4 percent below the compar·
able weeks a year earlier.
The declines in January and February projected into 1954
the lower level of consumer demand at department stores in
the District that has been evident since September 1953. Dur·
ing November and December, net losses in sales compared
with a year earlier resulted from lower demand for the more
costly department store hard goods items. During January,
however, there were declines from year-earlier figures in sales
of both hard goods and soft goods.
RETAIL TRADE STATISTICS
District crude oil production rose slightly in February, extending the upward trend which began in
January. Crude stocks of District origin, declining
since November, reached at mid-February a level
substantially below a year earlier. Refinery activity
continues at a lowered level to reduce stocks. Demond for petroleum products in January and early
February was near record levels; price trends were
mixed.
Lorge declines in construction and manufacturing
activity caused a slump in nonagricultural employment in District states in December. Employment declined through February to a level 1 percent below
February 1953 .
The value of construction contracts awarded in the
District in January totaled slightly less than a year
earlier; residential awards gained.. Latest figures on
construction costs show a continuing but slow rise.
Effective February 15, the discount rate of this
bonk was reduced from 2 percent to 13/4 percent,
following similar action by each of the other Reserve
bonks.
Deposits of the weekly reporting member bonks
declined sharply during the 4 weeks ended February 17, principally because of heavy withdrawals by
individuals and businesses_ Cash assets and investments were also reduced markedly. Total loans were
practically unchanged, although commercial, industrial, and agricultural loons declined.
(Percentage change]
NET SALES
line of trode
by area
DEPARTMENT STORES
Totol Eleventh District ••..• •••• •.••••.
Corpus Christi ••••••••...••• • • • •••••
Oallos •••••• ••• •••••••.•••• ••• •• . •
EI Paso ••••••••••• ••• ••••• ••• • • • ••
Fort Worth •••••••••••••• •• • •••••••
Houston •••••••••••••••• • ••• •••••• •
Son Antonio •••••••••• • ••• ••••••• ••
Shre ... eport, La .............. .. ..... .
Waco ••••••••• •• ••••••• •• • • • •••• •
Other cities •••••••••••• •••••••• ••••
FURNITURE STORES
Total Eleventh District •••••••••• • •••••
Austin •••••• • ••• • •• ••• •••••• •• ••• •
Dallas ••• • ••••••••• • ••• •••••••••••
Houston ••• ••• •••• ••••• •••• ••• •••••
Port Arthur ••••••••••••••••••••••••
San Antonio ••••••••••••••••••••• • •
Shre .... port, La .................... . .
Offler dties ••••• • • •• •• ••• •• ••••••••
HOUSEHOlD APPUANCE STORES
Total Eleventh DbtrJct ••••••••••• • ••••
DoUos •• • •••• • • •• •• • ••• ••••• ••• • ••
STOO:Sl
January 1954 from
JonlXlry 1954 from
January
1953
December
Jonuary
1953
-10
-57
-62
-56
-57
-61
-56
-53
-58
-61
- 57
-14
-9
-12
-15
-9
_10
-8
-1'
-.
1953
-15
-.1
-11
-44
-19
-15
8
-20
-13
-14
-31
-57
-18
-50
-37
-'0
-36
-30
-4
-4
-5
-4
-3
-5
-3
-7
-2
-3
December
1953
-.
-.
-2
-3
-3
3
-7
12
_1
- 1
-14
-2
-20
-5
-19
-10
-6
3
-39
-'1
1 Stocks at end of month.
On the basis of daily average sales, which is a better indicator of consumer demand when the number of trading days
varies from month to month, January sales of hard goods were
12 percent below a year earlier, while sales of soft goods
showed a moderate decline of 3 percent. Although consumer
demand at department stores generally was at a lower level
than a year earlier, there were areas in which gains in sales
were recorded. Daily average sales of household textiles were
unchanged from January 1953, while sales of men's clothing
gained 6 percent. Among the hard goods lines, radios, phono·
graphs, and records registered increases up to 27 percent.
Total basement store sales, which scored gains in hoth Novem·
her and December, showed a daily average gain during Januar)' of 1 percent above the same month last year.
•
•
MONTHLY BUSINESS REVIEW
and on January 31 were 14 percent lower than on the same
date last year.
WHOlESALE TRADE STATISTICS
Eleventh Federal Reserve Dislrict
NET SALESp
STOCKS'p
January 195. from
January 1954 from
Janua ry
)onuQry
line of Irad e
1953
Automotive :5upplies •••••••••••••••••••
December
-26
-10
Dry goods •••• •...• • .. •• .•• • • •••.••••
Grocery {full. line wholesalers nol
Industrial supplies •••••.•••••••••••....
Machinery equipment and supplies eKcepl
electrical •••.••.•.••..•.•••••..••.•
M.lals ••••.••.• •. •.•.••• •••• •....•••
Tobacco products . •••...•• . .. .••.. •• . •
Wines and liquors ••••••••••••...••..•
,
1953
-5
-16
-5
-25
-38
-26
-8
-6
Hardware • •••••••••••• •••• •• ••••• • . •
December
1953
•
17
-16
-2
4
sponsoring groupsl ••..•.... ••• ••. , ••
1 Stocks
1953
-8
-49
5
-23
6
I
I
~67
'I
26
-57
_9
-21
2
21
-3
39
-I.
- I
-2
29
Field work made satisfactory
progress during February in most
parts of the District, favored by open
weather. Subsoil moisture supplies
generaIly are adequate in all cropfanning areas except south and southwest Texas. Surf~ce
moisture is needed in most western and southwestern countIes
of the District to retard blowing of soil and stimulate growth
of small grains and grasses. However, over-all moisture conditions in the District are improved compared with a year ago.
Qt end of monttL.
p-Preliminory,
; Indicot., chonge of leu thon one·half of 1 percent.
SOURCE: United Stat•• Bureau of tile CenILlS.
Accounts receivable at District deparbnent stores declined
seasonally during January, with the end-of-month total 14
percent lower than at the close of December. The largest rate
of decline was in charge accounts, which were reduced 22 percent. Over the same period, instalment accounts were reduced
3 percent. Despite these reductions, however, total accounts
receivable at the end of January were 5 percent higher than
on the same date last year; charge accounts were virtually
unchanged, while instalment accounts were up 13 percent. Of
the total amount of accounts outstanding, charge accounts
and instalment accounts represented 56 percent and 44 percent, respectively.
January collections on charge accounts were 3 percent
greater than during the same month last year; instalment
collecti ons were up 5 percent. On the whole, collections were
reported firm , with no indication of softening.
Deparbnent store inventories were reduced 2 percent during January and on the 31st - which marked the end of the
department store fiscal year - were 4 percent below the same
date last year. This is the first year-to-year decline in inventories reported hy District department stores since September
1952. Orders outstanding at the end of January were 17 percent below a year earlier.
Furniture store sales at reporting stores in the District
during January were 15 percent under January 1953.
Accounts receivable declined 2 percent from December but at
the close of the month were 3 percent higher than a year
earlier. Inventories were reduced 2 percent during the month
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
11947-49
=
The condition of the winter wheat crop is generally satisfactory in the major wheat-producing regions of the District.
Some acreage in western and northwestern counties has been
lost because of inadequate surface moisture and strong winds,
but most plants have developed strong root systems and are
being sustained by subsoil moisture. In the northern Blacklands of Texas and in eastern counties of the District, small
grains have recovered from dry January freezes and are in
excellent condition.
Cotton planting is in full swing in the Lower Rio Grande
Valley of Texas and is making rapid progress in th~ Corpus
Christi area. Many early fields are up to a st811d_ Sattsfactory
progress is being made in the preparation of land for cotton
and corn in central 8lld northern counties of the District and
for cotton and sorghums in the irrigated sections of Arizona,
New Mexico, and west Texas. Early planted corn fields
in south Texas are up to a stand, and planting of sorghums
and corn is well advanced in the Coastal Bend counties of
Texas. Indications are that a substantial portion of the acreage
taken out of cotton will be planted in grain sorghums or corn.
Production of winter commercial vegetables in Texas this
season is estimated by the United States Department of Agriculture to be 17 percent larger than a year ago. Conditions
have been generally favorable in most sections during January and February, and harvest is active in all a~eas: Prepa.ration for spring commercial vegetable productton IS maklllg
rapid progress, with considerable acreage of cantaloupes .up
to a stand in the Lower Rio Grande ValIey and Laredo sectIon
of Texas. Tomato plants in hotbeds in the east Texas area are
making good growth, and the planting of the nortl1 Texas
onion crop is virtually complete. Reports from the Panhan_dle
of Texas on growers' planLing intentions indicate a .reductIOn
of about 50 percent in summer potato acreage thIS year as
compared with 1953.
1001
LIVESTOCK RECEIPTS
ADJUSTEDI
UNADJUSTED
Jan.
Area
•
SALES-Daily average
Eleventh Dislrict •••..•..•••.
OaUa s . •. . ••.•.•.•. . •. . ..•
HOLlSton •••.. . .. . •..• .. .•••
STOCKS-End of month
Eleventh Dislrict .•. • .. .• ....
Dec.
Nov.
9'
92
110
209
203
238
144
(Number)
Jan.
Jan.
Dec.
Nov.
Jon.
100r
125
122
141
127
122
148
127
122
146
136
135
1954 1953 1953 1953 1954 1953 1953 1953
FORT WORTH MARKET
116p 120r
141
166
98
115
119
115
139
151
12 1r
129p 13lr
-~ ~ --
1 Adjusted fo r seasonal variation.
r-Revised.
p-Preliminary.
SAN ANTONIO MARKET
Cla u
JanUCIry
1954
Janucry
1953
December
1953
January
1954
January
1953
Dece mb e r
1953
Cattle •••••.••..
Calves ••••. . . . ••
Hogs ...••.. . . _.
Sheep ...•..... •
61,461
19,587
52,613
20,743
87,728
42,696
73,920
29,198
44,522
43,563
29.426
21 ,467
12,420
31 ,029
19,934
44.269
69,346
110,599
18,832
17,983
I
Indudes goals.
26,346
MONTHLY BUSINESS REVIEW
40
Ranges and pastures in the eastern half of the District are
providing abundant grazing, while green feed is generally
lacking in most other areas. Some small grain fields in west
and northwest Texas continue to be grazed, but growth has
been limited during the past month because of lack of moisture. In general, small grain pastures have provided good to
excellent grazing during the winter months, with cattle and
sheep making rapid gains. Severe dronght continues to prevail
in extreme southwest Texas and in southern New Mexico.
There has becn virtually no cured range feed in these sections
during the winter, and surface moisture is badly needed to
stimulate the growth of spring grasses. Supplemental feeding
continues in these areas, and livestock numbers have been reduced substantially.
Cattle and calves are reported to be in fair to good condition in most sections of the District, except in the drought
areas_ Reports from the Edwards Plateau sheep country of
Texas indicate that breeding ewes are being maintained with
heavy supplemental feeding. Small grain pastures were grazed
off in late December and early January, and lambs were
moved to packers or to feed lots_
FARM COMMODITY PRICES
LIVESTOCK ON FARMS. JANUARY 1
Tex o s, Five Southwestern Stotes, end United Steles
(I n thousands)
Five southwestern
slates!
Texas
1954p
All cattle .. ... ....... ....
8.587
1, 554
Mifk cenle .. .. .... .... .
Beef canle . ........... 7.033
All sheep . .. . ............ 5.291
Stock sheep . . ....•.... 5. 191
100
Feeders . ... . ... ..•....
Hags .. . . .. .. . .. .... . . , .
906
Goats! .. , .. . .. . ,., .. .. . . 2,044
Horses ... ........ . ... . ..
269
Mules .... . ..... .. .... . .
75
Total above species ..... 17, 172
s.. .. .. ....... ... 21,184
Chickens
609
Turkeys . ................
1953
1954p
1953
8,853
1,62 1
7,232
5,574
5,464
15,82 8
3,137
12,691
16,026
3,179
12,847
110
7.362
7.130
232
7.637
7.432
205
1.119
1,910
1,704
2,044
2, 155
1.910
286
89
610
183
654
209
United States
1954p
94,677
37,587
57,090
30,902
26.905
3.997
17,831
27,731
28,591
48,179
2,044
3, 432
1,603
180,83 7
20.455
615
34.423
719
34.018
731
439.271
5.323
1953
93,637
36,744
56,893
31 ,861
27,700
4,161
54.294
1.910
3.798
1.753
187,253
429,731
5,305
I Arizona, louisiana, New Mexico, Oklahoma, and Te:w:os.
: Goat numbers shown for Texas only, estimates for other states not ovoifable.
S Does not incfude commercial broilers.
p-Preliminory.
SOURCEl United States Deportment of Agriculture.
Contrary to the national trend, the number of all callIe and
calves declined 3 percent in Texas, 5 percent in New Mexico,
and 4 percent in Arizona, reflecting the effects of the drought
last year. Oklahoma and Louisiana showed increases of 3 and
4 percent, respectively. The net change for the five District
slates was a decline of about 1 percent.
Top Price s Paid in local Southwest Markets
Commodity (lnd market
conON,
Middling 15 / 16-inch, Dallos ....
WHEAT. No.1 hard, Fort Worth .•.. •.. ...
OATS. No. 2 white, fort Worth ...........
CORN. No.2 yellow, fort Worth .. .......
SORGHUMS, No.2 yellow, Fort Worth . ...
HOGS, Choice, Fori Worth . . . .. ..... . ......
SLAUGHTER STEERS, Choice, fori Worth ...
SLAU GHTER CALVES, Choice, fort Worth .. .
STOCKER STEERS, Choice, Fort Worth .....
HENS, .4. pounds and over, Fo rt Worth .....
FRYERS, Commercial, Fort Worth ..........
BROILERS, south Texas .......... . .......
EGGS, Graded and candled, Fort Worth...
Comparable Comparable
Week ended
week
week
Unit Feb.18.1954 last month
lalt year
lb.
b,.
b,.
b,.
<wI.
cwt.
cwt.
cwl.
cwl.
lb.
lb.
lb.
case
.3410
2.68Yz
1.0 41A
1.81
2.93
26.75
22.75
20.00
22.00
.23
.23
.25
15.00
$
.3292
2.71JA
1.07Vl
1.81 Yz
2.97
26.50
23.25
20.00
2 1.00
.25
$
.3250
2.65JA
1.01
1.82Y
l
3.20
21.25
23.50
24.50
24.00
4
.24
.25
.27
.2 6
15 .50
12 .50
.25V1
The number of milk cattle showed little change in the District. Declines in Texas and New Mexico were offset by increases in Arizona and Louisiana; Oklahoma reported no
changc. In line with national trends, the numbers of sheep,
hogs, horses, and mules in District states declined in 1953 ;
the number of chickens, excluding commercial broilers, increased slightly. The number of goats on Texas farms and
ranches also rose_
Prices of most agricultural commodities in the District
continue steady to strong, compared with recel~t months.
Prices of all livestock held steady during February, while
seasonal increases were recorded for most grains and for
cotton. Prices of commercial broilers continue weak.
Recent congressional action increased cotton acreage allotments. The national allotment was raised from 17,910,000
acres to 21,379,000 acres. All states shared in the increase, but
the 1954 allotments for most states are below the acreages
planted in 1953. Percentage declines in District slates are:
Arizona, 36; New Mexico, 27; Louisiana, 21; and Texas, 10.
The allotment for Oklahoma is 4 percent above the acreage in
cultivation in 1953 because of the reduction in plantings in
1953 due to drought.
The number of all cattle and calves on farms and ranches
in the United States increased about 1,000,000 head during
1953, according to the United Statcs Department of Agriculture. Increases were recorded in all but seven states. The Department also reports moderate increases in the numbers of
milk cows, chickcns, and turkeys. Declines were recorded for
hogs, sheep, horses, and mules.
Net profits in 1953 of all member banks in the United States
amounted to 865,000,000, up 4.3
percent from 1952, according to preliminary figures released February 8
by the Board of Governors of the Federal Reserve System.
The rise in net profits reflects principally an expansion of
$466,000,000, or 11.3 percent, in current operating earnings,
with earnings on loans and Unitcd States Government securities increasing 14.1 percent and 8.4 percent, respectively.
About four-fifths of the ri se in current earnings was absorbed
by increases of 11.2 percent in current operating expenses
and 14.8 percent in taxes on net income. In 1953, member
banks declared cash dividends (incl uding interest on capital
notes and debentures) of 5421,000,000, as compared with
5390,000,000 in 1952.
Member banks in the Eleventh District reported net profits
of 41,796,000 for 1953, an increase of 1.8 percent compared
with 1952. Although earnings from Government securities
and loans rose 10.7 percent and 7.1 percent, respectively,
current operating expenses showed an even greater relative
rise of 11.8 perce nt and absorbed most of the expansio n in •
current earnings. Taxes on net income in 1953 wcre up 11.4 •
perccnt from 1952. Member banks in the District declared
(,8sh dividends of $20,961,000 during the year, renecting a
year-to-year increase of $955,000, or 4.8 percent.
..
•
MONTHLY BUSINESS REVIEW
Effective February 5, the Federal Reserve Banks of Boston,
New York, Philadelphia, St. Louis, Minneapolis, and San
Francisco reduced their discount rates (which apply to disco unts for and advances to member banks under the provisions of Sections 13 and 13a of the Federal Reserve Act) from
2 percent to 17.4 percent. Subsequently, the discount rates of
the other Reserve banks were reduced, effective within the
period February 9-15. The lower rate at the Dallas bank became effective February 15. Lowering of the discount rates reflects principally a recognition of the general decline which
has occurred during recent months in market rates for shortterm funds.
The Secretary of the Treasury announced on February 15
that investors accepted $7,012,000,000 of the new I-year 1%·
percent certificate of indebtedness and $11,167,000,000 of
the new 7-year and 9-month 2%-percent bond in exchange
for their holdings of the February 15 and March 15 maturities and the bonds maturing or called for redemption on
June 15. The five issues which were eligible, in whole or in
part, for the exchange offerings were outstanding in the
amount of $20,796,000,000.
Holders of the 2%-percent certificates which matured February 15 in the amount of $8,114,000,000 and the l%-percent notes maturing March 15 in the amount of $4,675,·
000,000 were offered the choice of exchanging their securi·
ties for ·either the new certificate or the new bond. However,
holders of the 2-percent bonds maturing June 15 (in the
amount of $5,825,000,000), the 2'l4-percent bonds of 1952-55
BANK DEBITS. END-Of-MONTH DEPOSITS
AND ANNUAL RATE OF TURNOVER OF DEPOSITS
(Amounh in thousands of dollars)
DEBITS'
DEPOSITS:
Percentage
change from
City
ARIZONA
Tucson •.• . .••.• , . ..•
LOUISIANA
Monroe •...•..•....•
Shre'¥eporf. •. .. . • ..•
NEW MEXICO
Roswell ..• . ...•.•..•
TEXAS
Abilene •.•• . • •• •••••
Amarillo ••••••••••••
Austin ••.•..••••.••.
Beaumont .•• ••••.•..
Corpus Christi ••••••.•
Corsicana •••.. .•....
Dallas ....•. ...•...•
el Pa so ••••....•.. . .
Fort Worth ••...•....
Galveston ••. •...••. .
Houston • •.••.•..••..
laredo •••••.•••. , •.
lubbock •••....• • , • .
PorI Arthur ••...•.••.
San Angelo •••.....•.
San Antonio . •.•..• • .
Texarkana ' •••.•• . .•.
Tyler •..••.• • •.• . ••.
Waco ••.•..•.... • ..
Wichita Falls ••.•..••.
)onvary
1954
Jan. Dec.
1953 1953
Annual rale of turnover
Jan. 31,
1954
Jon.
Jan.
1954 1953
Dec.
1953
107.160
-12
-2
84,984
15.0
15.8
15.2
51,472
2 18,831
-9
_2
3
f
43,356
165,057
13.9
15.5
15.4
15.1
14.4
15.0
27,526
-1
7
30,125
10.9
11..4
10.3
60.44<
124.045
111.551
122,087
152,229
15.397
1,892.512
210.835
533.710
77.992
1,724,2 81
21,539
135,.4-46
45,801
39,212
381.159
18,094
58,954
75,884
81,613
8
-14
2
_4
1
-3
54,601
99,397
101,327
101,463
101,939
22,130
927,296
126,943
338,420
79,731
1,095,861
18,537
93.123
38,-430
45,772
307,165
18,310
56,9 11
64,809
102,873
Totol-24 cities ........ $6,287,774
-13 -12
-6
6
-4
-7
6
-12
-10
-7
-5
-6
-9
_2
-1
-13
-9
- I
-6
-8
-8
-8
3
2
-3
_4
-13
-3
_4
-2
-2
_7
-9
-8
-1
-8
Indlvidual~,
$4,118,560
13.2 12.8 13.2
14.9 16.2 15.4
13.0 13.4 13.7
1-4.3 17.0 16..4
17.4 18.1
16.0
8.3
9.0
8.9
24.2 24.0 27.5
19.4 21.7 21.4
18.8 20.0 20.9
11.6 14.3 11.8
18.4 20.0 20.0
13.7 14.2 13.4
17.8 16.7 20.5
14.3 15A 15.6
10.3
9.6 10.3
14.6 14.9 15.1
11.911.812.2
12.1
13.7 12.2
13.6 15.1
14.4
9.5 11.0 10.4
18.0
18.8
19.6
1 Oebits to demand deposit accounts of
partnerships, and corporations and
of slates and politico subdivisions.
: Oemgnd deposit accounts of individuals, partnerships. and corporations and of states
and political subdivisions.
, The5e figures include only one bonk in Texarkana, Tellas. Total debits for all bonks in
exarkona, Texas·Arkonsos, Including two banles located in the Eig hth District, amounted to
138,022,000 for the month of January 1954.
$1 Ind icates (honge of less thon one·holf of 1 percent.
41 '
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
tin thousand. of dolJanJ
Feb. 15,
1954
Item
Feb. 15,
1953
Total gold certificate reserves ••• ' .••. •. .•••• $ 789,478
Discounts for member banlel .•... ••• •..•..•.
25,000
Industrial advances •.••.•.. . .. . ....•.... • . .
o
Foreign laans an gold •••...••..•.••••.• • . •
705
U. S. Govemment securities ••..•....••...•.•
985,366
10tal earning auels •••.•••...•.•. ... ••.•••
1,011,071
Member bank reserve deposits ••.•.••.•••..• 1.001.038
Federcl Reserve notes in actual circulation • ..• •
712,860
Jon. 15,
1954
$ 665.584
49,180
831,768
945
1,153,318
1,203,443
1.081.871
728,979
705
997,078
997,783
1.0 90,408
723,407
o
o
o
which are called for redemption on June 15 (outstanding in
the amount of $1,501,000,000), and the 214 -percent bonds
of 1954-56 which also are called for redemption on June 15
(outstanding in the amount of $681,000,000) were offered
only the new bond in exchange for their holdings. Owners of
about 98.6 percent of both the February maturity and the
March maturity accepted the refunding issues.
Between January 15 and February 15, total earning assets
of the Federal Reserve Bank of Dallas rose $13,288,000,
reflecting an increase in discounts for member banks and a
less-than,offsetting rednction in holdings of United States
Government securities. Other changes reflected in the COI\"
dition statement of the bank included substantial decreases
in member bank reserve deposits and gold certificate reserves.
On February 15, Federal Reserve notes of this bank in actual
circulation amounted to $712,860,000, as compared with
S728,979,000 on February 15, 1953.
Marked reductions occurred in most major categories of
assets and liabilities of the weekly reporting member banks
between January 20 and February 17. These decreases were
largely seasonal but, in most cases, were greater than a year
ago. Reflecting these changes, total resources declined $319,077,000, or 6.2 percent, to a total of $4,854,526,000 on February 17.
Deposits of the weekly reporting member banks declined
sharply during the 4 weeks, falling $341,009,000, or 7.1 percent. Demand deposits accounted for practically all o~ the
reduction. Individuals and businesses drew heavily against
their demand accounts, reflecting in part income tax payments and a temporary "unfavorable" balance in interdistrict
commercial and financial transactions. Interbank deposits
and deposits of states and political subdivisions were reduced
substantially, while Government deposits rose by about onethird. Time deposits of individuals and businesses increased.
In meeting the heavy decline in deposits, these banks drew
down their cash and balances in the amount of $253,684,000,
GROSS DEMAND AND TIME DEPOSITS Of MEMBER BANKS
Eleventh Federal Reserve District
(Averages of doily figures. In thousands of dollars)
COMBINED TOTAL
Dote
Gron
demand
January 1952 .. ,. $6,779,455
January 1953 .. . . 7,109,145
September 1953. 6,647,956
October 1953... 6,719,484
November 1953 ..
6,948,849
December 1953 .. 7,104,841
January 1954 .. . . 7,232,657
Time
RESeRVE CflY 8ANKS
Gross
demand
Time
COUNTRY BANKS
Gross
demand
Time
$714,332 $3,162,301 $391,577 $3,617,154 S322,755
798,393 3,387,726 428,928 3,721 ,419 369,465
912,860 3,236,056 501,477 3,411,900 411,383
925,358 3,263,306 508,529 3,456, 178 416,829
936,175 3,369,875 516,162 3,578,974 420,013
971,988 3,453,418 545,675 3,651,423 426,313
993,495 3,517,349 561,053 3,715,308 432,442
42
MONTHLY BUSINESS REVIEW
CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES
CONDITION STATISTICS OF All MEMBER BANKS
Elevenlh Federal Reserve District
Eleventh federal Reserve District
(In millionl of doHon)
(In thousands of dollars)
Feb. 17,
1954
Item
"'SSETS
Commercial, industrial, and agricultural loans ... .
loans to broken and dealers in securities .... . .
Other loans for purchasing or carrying securities.
Real estote loans ••••••••••••••••••••••••••
loons to banks ..... .. .. .. ...... . . ... ..... .
All other loons •••••••••••••••••••••••..•••
Feb. 18,
1953
Jon. 20,
1954
$1,285,503 $1,203,212 $1,298,919
10,782
11,452
10,965
74,499
68,361
74,238
131,051
131,028
132,106
16,908
18,183
1,109
399,729
376,239
402,189
Gross loons .. ......... . ...... .......... .
less reserves and unallocated charge·offs . .
1,918,472
17,106
1,808,475
18,704
1,9 19,526
17,067
Het Icons . ............................ .
1,901,366
1,789,771
1,902,459
U. S. Treasury notes .... ................. . . .
U. S. Government bonds {inc. gtd. obligations) . . .
Other securities ••.•. .......•...............
90,852
203,135
160,083
783,572
200,684
139,9 13
152.993
218,233
693,043
176,254
155,898
262,003
199,869
684,375
197,518
Toiol investments . .... . .... . ............ .
Cash items In process of collection •..•.........
Balances with banks in the United States •.. ....
Balances with banks in foreign counlries •.... .. .
Currency and coin . .... ••. . ...... ..........
Reserves with federal Reserve Bank .......... .
Other assels . . .. ......... .... ..... .. , . . , , .
1,438,326
325,501
445,45 0
1,202
44,764
589,123
108,794
1,380.436
305,944
412,063
1,313
45,053
605,349
101,979
1,499,663
435,339
550,077
1,564
47,562
625,182
111,757
TOTAL ASSETS ...... ... ............... ..
4[854,526
4,641,908
5,173,603
\lA.ILITIES ...ND CAPITAL
Demand der.0sits
Individuo $, partnerships, and corporations ... .
United Statas Government ...... . ......... .
Slatas and political subdivisions ........... .
Banks in the United Stoles .. .. ...... ...... .
Banks in foreign (ountries •••.•.•.•........
Certified and officers' checks, etc.......... . .
2,584,421
94,898
203,104
853,841
9,653
45,145
2,490,623
112,469
221,835
840,242
10,334
53,976
2,776,411
69,494
230,410
977,978
10,575
66,200
3,729,479
4,131,068
527,767
10,142
450
106,338
1,388
519,202
10,144
450
115,904
1,388
Totollime deposits .••.•..... • . . ........
-646,085
--
447,994
10,383
450
56,649
1,070
516,546
4,437,147
32,250
59,845
325,284
4,246,025
35,150
61,372
299,361
4,778,156
14,000
59,952
321,495
TOT ...L lI .... ILITIES ...ND CAPITAL ACCOUNTS
4,854,526
4,641,908
~~
ASSETS
Loans and discounts . . .... ............. .
United Stotes Government obligations ............ .
Other securities ....... ... ... ........ . ........ .
Reserves with Federal Reserve 8ank . ........ .. .. .
Co sh in You!t e .. .. ... , ....................... .
Balances with bonks In the United States .. ....... .
8alances with banks In fo reign countrles e , .....•. . .
Cosh items In process of collection . . .. ........• . ..
Other assets e . . , ......................... . .. .
$3.082
2.483
460
1.019
139
1,092
2
320
157
$2,871
2,462
421
1,041
122
999
1
279
141
8,754
8,337
8,891
1,052
969
5,961
801
1,158
6,109
8.250
0
71
570
8,891_
TOTAL ASSETSe ................ . . . ........ .
LIABILITIES AND CAPITAL
Demand deposits of banks ....... .....•........
Other demand deposits .. ......... •. ...........
Tim a deposits . . ...... .. .. . .... ..• ... . •.. . .•..
6,057
1953
Dec:. 30,
1953
$3,065
2,441
460
1,024
141
1,264
1
340
155
647,088
Total deposits ••... . ..•.........•....
Bills poyoble, rediscounts, etc:...... .... • • • ....
All other liabilities .. ......... .. ........... .
Tolgl capitol accounts . •...•. . . .... .... .....
Jan. 27,
19 54
Jan. 28,
Item
U. S. Treasury bills . . . ...... ... ... . ... . .... .
U. S. Treasury certiflcates of indebtedneu ..... .
Tolal demand deposits ............ ..... . 3,791,062
TIme deposits
Individuals, partnerships, and corporations....
United Stgtes GOY.rnmanl.... .... .... ... ..
Postal savings... . . . . . . . . . . . . . . .. . .. . . . . .
Siaies and politico I subdivisions.. ..........
Bonks in the U. S. and foreign counlrial .. ... .
or 15.3 percent, and reduced their investments by $61,337,000, or 4.1 percent. Holdings of Treasury bills, certificates,
and notes declined markedly, while investments in Government bonds and other securities increased. Changes in holdings among certificates, notes, and bonds reflected, in part,
Treasury refunding operations.
Commercial, industrial, and agricultural loans declined
$13,416,000, or 1.0 percent, between January 20 and February 17, which contrasts with a mild increase during the comparable weeks of 1953. Some loan reduction was offset by
member bank purchases of CCC certificates of interest which
were issued February 2. Sales finance companies, commodity
NEW PAR BANK
The First State Bank, Covington, Texas, an insured
nonmember bank located in the territory served by the
Head Office of the Federal Reserve Bank of Dallas, was
added to the Par List on February 15, 1954_ The officers
are: R. L. Cowan, President; S. C. Thames, Vice President; and R. J. Capps, Cashier_
1,001
Total deposits. : ..........•....•....•....•..
Borrowings e . . ....... .. ....•....•... . • . ...•..
Other liabilities e .... , .... .... .. .............. .
Total cap ital acc:o~tse .•••••••.•...•••.•.•.•..
8,110
566
7,731
17
67
522
TOTAL LIABILITIES AND CAPITAL ACCOUNTse.,
8.754
8.337
8
70
983
e-Estimoled.
dealers, grain and milling concerns, and manufacturers in
the food and liquor lines were among the more important
borrowers who repaid substantial amounts of outstanding
loans.
With the exception of an increase in loans to banks, changes
in other categories of loims were relatively nominal. On February 17, loans of the weekly reporting member banks
amounted to $1,918,472,000, up 6.1 percent from the comparable year-earlier total.
The outstanding development in
the petroleum picture during J anu·
ary and the early part of February
was tbe sharp decline in the Nation's
primary stocks of distillate fuel oil.
In the 6 weeks ended February 13, distillate fuel oil stocks
dropped almost 40,000,000 barrels, or 35 percent, compared
with a decline of 25,000,000 barrels during the same period a
year ago. The recent decline has improved greatly the position
of distillate stocks. On February 13 they were about 2 percent
lower than a year earlier; whereas, at the end of December,
they showed a year· to-year increase of 13 percent.
The decline in distillate stocks was accompanied by a
marked decrease in kerosen e stocks and a moderate decrease
in stocks of residual fuel oil. On February 13, primary stocks
of kerosene were 8 percent less than a year earlier; residual
fuel oil stocks were about the same as a year ago.
The improvement in the stock position of heating oils during this recent 6-week period was offset by seasonal increases
in gasoline stocks. On February 13, gasoline stocks were at
an all·time high of 176,000,000 barrels and were 21,000,000 •
barrels, or 14 percent, higher than a year earlier. If such •
stocks follow seasonal trends of the past, they may be expected to register fur ther increases until the latter pa rt of
March.
4
CRUDE OIL, DAILY AVERAGE PRODUCTION
(In thousands of barrels)
Change from
January
January
1954 1
1953 2
1953 1
2,968.2
Teltos •..•.••.•........ • 2,663.5
Gulf CO<lst ............
582.4
West Texas .... ... . ... 1,016.3
East T.xos (proper) .....
230.9
Panhand le ....•....... .
78.6
Rest of Stole ... .. ......
755.3
Southea stern New Mexico.,
195.8
Northern Louisiana ........
108.9
OUTSIDE ELEVENTH DISTRICT. 3,341.1
UNITED STATES ............ 6,309.3
3,231.9
2,934.3
661.0
1,152.1
260.8
75.0
785.4
2,907.9
2,609.2
577.9
970.9
-263.7
-270.8
231.5
-29.9
3.6
-30.1
19.7
Area
ELEVENTH DiSTRiCT •••• • ••••
SOURCES:
I
176.1
121.5
3,323.4
6,555.3
December
77.6
751.3
190.6
108.1
3,312.1
6,220.0
January
December
1953
1953
-78.6
-135.8
-12.6
17.7
-246.0
60.3
54.3
4.5
45.4
-.6
1.0
4.0
5.2
.8
29.0
89.3
Refinery activity in both the District and the Nation has
continued to be held down in order to work off stocks, Crude
runs to refinery stills in the District in January averaged an
estimated 1,994,000 barrels per day, or 14,000 barrels less
than in December and 127,000 barrels less than a year earlier_
In the Nation, refinery crude runs averaged an estimated
6,985,000 barrels per day, which is about the same as in
December and 57,000 barrels less than in January a year ago,
During the first part of February, refinery crude rUDS in the
United States averaged a little lower than in January but in
the District were unchanged.
Estimated from American Petroleum Institute weekly reports .
: United Stotes Bureau of Mines.
A resumption of the declining trend of the Nation's crude
stocks was apparent in late January and early February, after
stocks leveled out following marked decreases in November
and December, Crude oil stocks of District origin have shown
an almost uninterrupted decline since mid-November,
National crude stocks on February 13 totaled 266,100,000
barrels, or 5,800,000 barrels below a year earlier; crude
stocks of District origin amounted to 134,600,000 barrels, or
10,200,000 barrels less than a year ago.
Demand for petroleum products during January and early
February apparently reached record levels, as below-normal
temperatures over widespread areas were a powerful stimulus
Il to the lagging demand for home-heating oils, Total demand
, for major refined products at refineries and bulk terminals
during the 5 weeks ended February 13 averaged 7,479,000
barrels per day, up about 8 percent from the same period last
year. Dcmand faT distillate fuel oil and kerosene was up 18
percent and 22 percent, respectively, over a year earlier_ The
demand for gasoline continued to show year-to-year increases,
with a gain of 3 percent. On the other hand, demand for residual fuel oil was down 2 percent from a year ago, The relatively unfavorable showing by residual fuel oil is related to
the downturn in industrial production, including the lower
rate of steel mill operations,
•
43
MONTHLY BUSINESS REVIEW
Daily average crude oil production in the District rose
moderately in January after five consecutive monthly declines, and a further slight increase was evident in the early
part of February. Production in the first 2 weeks of February
averaged an estimated 2,972,000 barrels per day, which is
about 4,000 barrels higher than in J anual'y although 249,000
barrels lower than in February a year ago, The January rate
was up about 60,000 barrels from December. A marked increase is expected in District production during March in
view of the Texas Railroad Commission's raising the allowablcs for that month 159,266 barrels above the mid-February
level. The March allowable is the highest for Texas si nce
September 1953.
In the Nation, daily average crude oil production in the
first part of February showed a small decline, which contrasts with the slight increase in District production, The
Nation's crude oil produclion averaged an esti maLed 6,298,UOU barrels jJ d day, or 11,000 Larrel; less thall in January
and 264,000 barrels less than in February a year earlier,
Nonagricultural employment in
District states in December totaled
3,913,700, or 3,300 less than a year
earlier, Manufacturing employment,
at 718, 100, was 4,100 workers below
December 1952, Rising seasonally, trade and government
categories accounted for most of the gains over November,
but these were outweighed by heavy losses in manufacturing
and construction employment.
The loss in manufacturing employment in the District from
November to December was 12,600 workers, which is more
lhan four times the largest November-to-December manufacturing employment loss in any of the past 5 years_ This figure
includes about 1,600 metal-fabricating industry workers in
Texas who were on strike in December but returned to work
in January. Nevertheless, the December reports show a continuation of the decline in manufacturing activity which
started in August 1953. The rest of the November-to-December decrease in nonagricultural employment in District states
stemmed from an earlier-than-usual seasonal decline in foodprocessing employment; a sharp reduction in lumber employmenl ; and moderate decreases in ordnance, apparel, petroleum, machinery (except electrical), and primary metals
employment,
Unofficial estimates of total nonagricultural employment
in District states through February indicate a sharper-thanusual seasonal decline, The February total was 3,763,000, or
1 percent below a year earlier, Manufacturing employment in
February is estimated at 705,000 workers, or more than 1
NONAGRICULTURAL EMPLOYMENT
Five Southwestern States1
Percent change
Dec. 1953 from
Number of persons
December
Type of employment
December
November
Dec.
1953p
1952
1953
1952
3,917,000
722,200
3,876,100
730,700
3,145,.400
227,200
292,200
Totol nonagricultural
wage and salary workers . . 3,913,700
Manufacturing .. .........
718,100
Nonmanufoduring ........ 3.195,600
226,800
Mining ............... .
286,100
Construction • ..........
Traruportation and public
405,900
utilities .......... . .. .
Trade .•.......... . .. . 1,025,200
151,200
Finance . ..............
Service . ............ ..
445,500
654,900
Government . .. ........
3,19.4,800
224,300
290,600
.419,100
1,025,100
142,900
435,700
657,1 00
L Ari10na, louisiana, New Mexico, Okla homa , end relCas.
p-Prellminary.
SOURCE: State employment agencie s.
Nov.
1953
-.1
1.0
- .6 -1.7
.02
1.6
1.1
-.2
_ 1.5 -2.1
408,200
-3.1
989,200
150,500
446,800
631,300
0
5.8
2.2
-.3
_.6
3.6
.5
-.3
3.7
MONTHLY BUSINESS REVIEW
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of dollcus)
LUMBER ACTIVITY IN TEXAS
£ljPL()lMOH
'~ o..lIO .. d •• 'Work .. ,
January
MUllen.,
_M"
FHI
Area and type
70
ELEVENTH DiSTRiCT •• • •• ••••••••••••
Residential • •••.• • •.... • • ••• •• •••
January
1954.
PIIIOOl/eTlOH."" STOC)($
"
1953
UNITED SfATESI •••••••••••••••••••
Resi deolial ••••...•...•••.•••••••
All other •• . •.•••.•••.•••••••• •. •
------l6o
96.769
49.876
46,893
1,151,987
689.505
All other •••••••••.••.•.•••.••••.
$
,(62,,482
99.325
4S,404
50.921
1,075,868
,(60,036
615.832
$
118.403
29.507
88.896
1.299.764
0433,500
866,26.4
I 37 stales eO$t of the Roeky Mountains.
p-Pr.timlnary.
SOURCEI F. W. Dodge Corporation.
~------~---------+--------~--------~IO
0L---~~~---'I~.,UI--~--~I.~'~2---L--~I9~--~0
..
5QUltCE 5' l:~~~'!':..=i:; ~~rt::::r.",ft.
.. '"ely,,, _ I•• lu .. h, oftd woolll proch.c.1t l114utl'J
t ... ,.,..,,111 ",. M'ttl,d G'_' of "
"I~".
,1", ... 111•.
percent below a year ago. Hours worked per week by manufacturing employees in these states averaged 40.4 hours in
February, compared with 41. 7 in February 1953.
A recent Bureau of Mines report on iron ore production in
1953 shows that Texas ranked tenth among all the states. Texas produced 1,000,000 gross tons of iron ore last year, or 28
percent more than in 1952. The Bureau of Mines also reports
that on a tonnage basis, metals mining in Arizona declined
significantly in 1953. The decreases for individual metals
were: Silver, 7 percent; copper, 1 percent; lead, 44 percent;
and zinc, 42 percent. Gold production in Arizona was virtually
unchanged from 1952. Because of a large price increase for
copper, the value of Arizona's metal production last year was
9 percent more than in 1952. Arizona remained the largest
copper· producing state in the United States and ranked fourth
in silver production, fifth in gold, eighth in lead, and tenth
in zinc. The State ranked first in the value of production of
these five metals.
Important changes have been occurring in the lumber and
wood products industry in Texas. One of the more significant
has been a steady drop in employment. As of December 1953,
there were 23 percent fewer workers employed in this industry than in August 1950; the nnmber declined over 8 per·
cent during 1953. In early 1950 the lumber and wood products industry in Texas was the third largest employer of manufacturing workers but was down to the ninth position in
December 1953.
Although figures on the production of southern pine in
Texas are limited to those from a number of regularly reporting producers and omit many small producers, they indicate
that southern pine production in 1953 was only 2 percent below that of 1952. The industry has been able to maintain production , while reducing employment, by greater mechanization and centralization of operations and by a heavy overtime work schedule. Employees in lumber and wood products
firms worked an average of 44.5 hours per week in 1953, compared with 43.8 hours in 1952. Average hourly earnings in
December 1953 were about the same as a year earlier and
4 percent above the December 1951 level.
Stocks of southern pille Iwnber held by producers increased
considerably in the last 6 months of 1953. As shown in an
accom panying chart, stocks of southern pine in December
were 24 percent higher than in June and 34 percent above a
year earlier.
The value of construction contracts awarded in the District
in January is estimated at $96,769,000, which is only about
52,500,000 less than the January 1953 figure and lower than
the January 1951 total but considerably higher than in any
other January of record. Awards for residential building were
valued at $49,876,000; this is 3 percent above a year earlier
.and the second highest January value of record. All other
construction cont,ract awards totaled $46,893,000, down
about $4,000,000 from January 1953.
Construction contracts awarded in the District in the fourth
quarter of 1953 totaled $343,000,000, wbich is below the
record fourth-quarter total of $384,000,000 a year earlier but •
is more than $30,000,000 above awards in the last 3 months
of any other year.
Since mid-1952 the number of residential units under construction in Dallas has moved upward slowly, according to
reports of the Dallas Power and Light Company. The total of
2,420 units on January 30, 1954, was almost 800 more than
a year earlier and the largest number reported in 3lh years.
There were 8,057 one·family residential units completed in
Dallas in 1953, or 122 units more than in 1952. The year 1953
was one of 4 years of record in which the number of residential units completed exceeded 8,000; the record of 10,641
occurred in 1950.
BUILDING PERMITS
Percentage change
in 'tahKltion from
Januo ry 195.4
January
December
Valuation
1953
1953
249
$ 1.611.420
-36
-42
Corpus Christi •• . ••• .•. •
Dallas • . . . •••.•••• • •••
EI Paso .•••..•••••••.•
Fort Worth ••.•••••••.•
Gal¥05Ion •••••••••••••
Houston •• • • •• •• •. •• • .•
L
ubbock ••••••••.•.••.
Port Arthur ••••••••••••
Son Antonio •••••• • ••• •
Waco ••..•••••••.•.••
Wichita Foils ...........
91
137
182
180
364
1,248
325
418
96
884
221
40
1,082
179
68
460,891
1,003,149
1.366.339
1.550.403
2,427,191
10,577,802
1,847,167
2,483,255
166.533
11 ,739,422
2,098,443
100,525
2,759,571
1,322,129
374,116
-17
-47
-51
14
-12
-3
-11
-31
-83
23
- /
-56
-20
122
-32
26
20
-74
395
-44
55
114
-69
-38
31
161
-33
-11
_5
-25
Total •.••••••.•.••.•..••
5.764
$41,888,356
-9
-7
COy
Number
LOUISIANA
Shreveport ••..•• . .•• , .
TEXAS
Abilene ••••••• ••••...•
Ama rillo •••• ••••• • ••••
Austin ••••••••••••••••
Bea umont ••• •• ••••••••
I Indicotos chonge of le u than one·1'to1f of I percent.
•
