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MONGJ'HLG)( REVIEW FE D E R A L R ES E R V E Vo\. oW, No. 11 ~ o F DALLAS DALLAS, TEXAS November 1, 1955 THE EM PLO Y M ENT SITUATION To the majority of the people in the Southwest and in the Nation, the primary measure of prosperity in a given eco· nomic situation is the ability to obtain a job at a reasonably good level of pay. Even to trained observers, the composition and utilization of the labor force is a vital measure in the progress of any economy. In fact, to many in the latter group, the starting point for prosperity throughout the economic structure is more jobs at higher rates of pay. Thus, in a period of growth in most lines of economic activity, as has been evidenced in 1955, it is probably worth while to ~ analyze in some detail the current employment situation. Included within this general framework are the changes in the over-all employment record and any significant differences which may have occurred within the major components of the labor force. The relationship of such changes to the trends which have been apparent since 1950 will provide some insight into the employment situation today and the outlook for the near future. , BANK The data used in the following discussion are based on nonagricultural wage and salary employment as reported by the employment security agencies of the five states lying wholly or partially within the Eleventh Federal Reserve District. These data exclude agricultural workers, proprietors, firm members, self-employed persons, independent contractors, and unpaid family workers. The five-state area including Arizona, Louisiana, New Mexico, Oklahoma, and Texas will be referred to as the Southwest. A Backgroun d of Progress Economic conditions and their effects upon employment during late 1953 and throughout 1954 have a distinct bearing upon tlle basic interpretations which should be placed upon the employment data for 1955. The mild recessionary movement which commenced in 1953 and terminated in mid-1954 caused a slight contraction in employment totals for the early months of 1954. The decline in employment in the Southwest was both smaller and of shorter duration than that which occurred in the Nation. Inspecting the details of this brief recession in total employment, it is significant that most of the decline ~ccuue<i because of the de- crease in Government operations, particularly ordnance. Manufacturing employment declined contraseasonally during the latter part of 1953 and more than seasonally in early 1954. Nonmanufacturing employment, which took a sharper downturn in the first quarter of 1954 than could be expected seasonally, turned upward in the second quarter. On balance, total employment declined until the April-June period in 1954. Thus, in calculating the year-to-year gains in 1955, some allow alIce must be made for the slightly lower levels of employment in early 1954. However, this adjustment need not be considered a major factor and will be ignored in discussing the recent trends in relation to the 5-year average. The Current Situati on As the southwestern and national economies continued their recovery into 1955, most major indexes of economic activity showed rather marked increases over their comparable levels in 1954. However, as is characteristic of a recovery period, nonagricultural employment lagged behind because there was sufficient flexibility in the utilization of the basic labor force to allow sizable increases in production and hours of work before there was need for additional workers. Hence, it was not until the third quarter of this year that employment advanced appreciably over the year-earHer totals. During the third quarter of 1955, nonagricultural wage and salary employment in the five southwestern states established a new record, with employment in September totaling 3,924,700. This is the first new record to be established since December 1952, although seasonal gains should cause record totals for each succeeding month through the remainder of 1955. During the first 8 months of this year, nonagricultural employment averaged 3,848,400, or 2.1 percent more than in the comparable period of 1954. In the same period, aver: age nonagricultural employment in the Nation was only 1.5 percent above the corresponding 1954 figure. Over both the past year and the 5-year period, the growth in employment has progressed more rapidly in the Southwest than in the Nation. Betw()en _ J95Q1!nd ~~~5L.l£ta.! ~!"l?!'?}ll1ent ~~!h~ This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) MONTHLY BUSINESS REVIEW 146 Within the south west total, Texas accounts for about 58 percent of nonagricultural employment and the remainder is distributed among the four other states in this order: Louisi· ana, Oklahoma, Arizona, and New Mexico. This order of distribution has remained the same since 1950, although the relative percentages are under constant change. Employment has been most dynamic in the States of Arizona, New Mexico, and Texas over both the 5-year period and the 1954·55 period. Between 1954 and 1955, Arizona employment showed the largest relative gain, followed by New Mexico, Texas, and Oklahoma, with Louisiana showing a loss in employment. INDEX OF NONAGRICULTURAL EMPLOYMENT (1950· roo) IQUAflITE:RL'r '[lte 0 0 1>0 I SOUTHWEST 120 '" 140 .- i ~ 120 .- ,. ~~' 0 " '0 o ~ 10 1 00 UNITED STATES • • 0 0 Over the S-year period in Arizona, much of the growth has been associated with developments in the electronic and aircraft industries, while New Mexico growth in nonagricul· tural employment has stemmed largely from the atomic energy program in that State. 90 80 7 0, 1950 1951 1952 1953 1954 1955 .,' 7 o SOURCES : SIGh .",pl o, ",.nl"Q' "~ '" U.S B~'.a.. or lobo< $tQIo.t'CI. Nation increased 13 percent, whereas employment southwestern states increased 19 percent. lfi the To compare the recent gains in southwestern employment against the average rate of growth during the past 5 years, it is important to have a clear understanding of the factors affecting that average rate. Very sharp increases occurred in nearly all categories of employment at the start of the Korean War, with more moderate gains coming after the initial impact. Most categories showed losses between 1953 and 1954 as a result of the mild recession. Therefore, the average annual rate of growth between 1950 and 1955 is an average of extremes combined with moderate net gains in the intervening years. Since the war-induced gains were much larger than the recession·bred losses, the average rate generally is higher for most employment categories than either the 1954-55 rate or the expected rate over the coming years. In fact, the rates of growth shown in total nonagricultural employment averaged 3.2 percent over the past 5 years and only 2.1 percent in the most recent period. DISTRIBUTION OF NONAGRICULTURAL WORKERS, BY' STATE In Texas, employment growth has been more widely dif· fused. Important factors accounting for the improved level of employment in this Slate have been the high level of con· struction; a significant increase in industrialization, particu. larly in chemicals, metals, and transportation equipment; and the growth of a widespread market requiring distribution facilities . Employment gains in Louisiana and Oklahoma have lagged substantially behind those of the other southwestern states. Louisiana employment during 1955 has been retarded by sharp cutbacks in shipbuilding and heavy industrial construe· tion, as well as by strikes in transportation and utilities. However, in August, Louisiana employment totaled 693,900, or .4 percent more than in August 1954. In Oklahoma, a sharp gain in manufacturing employment was not sufficient to maintain a growth comparable with the more western states because nonfactory employment showed only slight increases. In both the Southwest and the Nation, the largest number of wage and salary workers are employed in the non manufacturing industries. During the first 8 months of 19S5, non- SOURCES OF NONAGRICULTURAL EMPLOYMENT SOUTHWEST SOUTHWEST flflST [ IG HTWONTH$ r;, 19!!5 FIRST [ I GMT WOHTHS OF 19!!i!l TRADE MANUFACTURING _IIL_N". GOVERNMENT MEX ICO SERVICES AND MISCELLANEOUS TRANSPORTATION AND UT ILITIES CONSTRUCTION MINI NG FINANCE , INSURANCE,AND REAL ESTATE SOURet: , Slor","prfJ'fI'I.~I _oOlncr ... _L-...1.._ _" - _ - ' ~ MONTHLY BUSINESS REVIEW factory employment in the Southwest accounted for 81 per. cen t of total nonagricultural employment and showed a 2.1. percent increase over the comparable figure in 1954. The major segments of nonmanuiacturing employment in the order of their importance are trade, government, services, transportation and utilities, construction, mining, and finance. With one exception, this order is the same as in the Nation as a whole; finance outranks mining in the Nation. Between 1954 and 1955, all major employment categories showed in· creases except tran spor tation and utilities. 147 GOVERNMENT EMPLOYMENT SOUTHWEST THOUS.olHDS 000 ~ tlllOffTHI..YI ,*OAk[I'I' THOUS,U,OS OF ..... 0111( '" 000 40 0 r- 40 0 -..J '- 450 400 STATE AND LOCAL 0 300 30 0 3 00 Nonmanufacturing Employment 20 0 Trade 20 0 The wholesale and retail trades of the Southwest, account· ing for approximately one·fourth of nonagricultural employ· ment, constitute the largest of the employment categories. Averaging 984,200 during the first 8 months of 1955, trade employment was 18,900, or 2 percent, above the comparable figure a year earlier. In general, this gain represents a con· tinuation of the trend of the past 5 years, in which trade employment has moved up an average of 3 percent per yearexcep t in the recession period of 1953·54. The most imp or. tan t types of establishments in the continued growth of em· ployment in this category have been food stores, general merchandise stores, and wholesale establishments. ~ The relative importance of trade employmcnt in the rIve southwestern states does not vary significan tly from sta te to state, with the lowest ratio of trade to total nonagricul. tural employment- 23 percent--occurring in New Mexico and the highest ratio- 27 percent- occurring in Texas. The sou thwestern average so fa r in 1955 has hee n 26 perccnt·, compared with a nationa l average of 22 percent. Trade em· ployment is a particularly volatile type of employment, with sharp seasonal peaks d uring the year. This ca tegory requires an especially large degree of flexibility in the labor force to handle the part·time cmployment in rush periods, such as Easter or Christroas. ., - 150 SOUItCE: 5'1" 2 00 FEOERA~~ 2 00 1953 ''''~I!'IUI 1 954 1955 I 50 ...n.c:I... Government With a large number of military and defense installations and with its population increasing rapidly and locating in concen trated industrial areas, the Southwest shows an un· usually large percentage of people employed in government positions. In fact, government jobs supply 17 percent of total nonagricultural employment in the Southwest, com· pared with 14 percent in the Nation as a whole. Between 1954 and 1955, government jobs increased over 4 percent, for the sharpest year·to·year increase since the 9·percent g rowth between 1950 and 1951. However, this earlier gaininduced by the defense emergency- as well as the sharp decrease following the Korean truce, occurred mainly in Federal Government employment. The recent growth has been attributable largely to the development of activities at the state and local level, where the demand for employees by ed ucational instituti ons has been the most important fac· tor. In many respec ts, the 1954·55 gain in government em· ployment probably represents more acc urately the type of growth which can be expected in the coming years, because the continuing gain in population in urban areas will requirc even more local government services. TRADE EMPLOYMENT I. 100 THOUSANDS OF 1,200 lOUARTERL'I'I I. 000 1,000 .., I, 200 L V ~~ V •00 0 / 80 700 Services and Miscellaneous THOUSANDS OF WOR KERS 1,10 .0 Within the southwest total, New Mexico, with the smallest employed labor force, depends upon government for 25 per· cen t of its jobs. In Texas, government employment accounts for only 15 percent of total employment. The other states of the Southwest range between these extremes. SOUTHWEST OR EAS 8 00 19'" 19:>1 1952 1953 1 954 1955 7 00 Services and miscellaneous employment, accounting for 12 percent of total nonagricultural employment, has con· tinued to expand in 1955 under the impetus of enlarging demands of consumers for personal and professional services. Tou rist industries, lawyers, doctors, engineers, and such servo ice industries as hotels, laundries, and barber shops have en· j oyea a greater demand for their services in line with a con· centrating population, nearly full employment, and an in· creased amount of leisure time for most of the workers in 148 MONTHLY BUSINESS REVIEW the Southwest. The increasing use of mechanical equipment in the home, on the farm, and in business has required additional servicing facilities, and the more extensive use of automobiles has boosted gasoline station demands for labor. During the first 8 months of 1955, service employment increased an average of 1 percent over the comparable period in 1954, whereas during the 1950-55 period, the average yearly rate of gain was more than 2 percent. However, the future looks particularly bright for further gains in service employment as tourist, recreation, and amusement industries are expected to expand sharply. More skilled labor will be required to meet the advance of automation, and professional services, particularly of engineers, will be in even larger demand. Within the Southwest's service employment gain, Arizona has shown the sharpest relative adVance, reflecting chiefly the strong stimulus from the developing tourist industry and the needs of expanding numbers of industrial employees and their families. In terms of absolute numbers, the largest gain has occurred in Texas as the growing trend toward concentrations of population in the larger urban areas has increased the demand for many services. Louisiana has shown only a moderate gain, while New Mexico and Oklahoma have registered small declines. Eventually, therefore, another increase may occur in such employment. Contract Cons.rvction The expansion in building activity in both the Southwest and the Nation has supplied a new stimulant to construction employment in 1955. During the first 8 months of this year, southwestern construction employment increased by 11,500 workers, or 4.3 percent above the level in 1954. This increased level of construction employment is particularly significant, as it represents the first large year-to-year gain since 1950-51, when construction employment increased 16 percent. In fact, between 1951 and 1954, construction employment was either stable or declining. Consequently, the present level of construction employment is still below that prevailing in 1951. The 1954-55 growth in construction employment occurred entirely within the States of Texas, New Mexico, and Arizona. Construction employment declined in Louisiana and remained virtually stable in Oklahoma. The growth in Texas and Arizona stemmed largely from residential building activity, while industrial and heavy engineering construction played a major role in the New Mexico increase. Mining Transportation and Utilltle. Employment in transportation and utility industries h as not responded yet to the economic growth of 1955_ Although this category accounts for 10 percent of total nonagricultural employment, it has shown practically no growth since 1950 except the temporary gain stimulated by the Korean conflict, which was dissipated rapidly after the truce_ Between 1950 and 1955, employment in this category increased only 1 percent, and between 1954 and 1955, average employment decreased by nearly 1.5 percent_ This lack of growth is attributable to a number of factors, some connected with the changing defense situation and others related to internal operating procedures. Certainly, the decline in defense activities has bccn one of the major causes of the decrease, but the drought in the Southwest also has reduced agricultural demands for freight services. Moreover, the shift to diesel engines has reduced the need for railroad employment, not only the number of crews required but also the number of workers needed for maintenance and repair. Demand for transport facilities has occasioned the construction of alternative means, such as pipelines, which require less manual labor for operations_ Moreover, nearly all transportation and utility industries are so mechanized that they can expand or contract their operations without significant changes in employment. Nevertheless, it is not expected that the declining trend of 1954-55 will be repeated in the coming years. It seems probable that the long-run demands for transportation services will expand as the population grows, and the demands for utility services already are exceeding available capacity. Southwestern mmmg activity and mmmg employment have increased in response to the upturn in economic activity in 1955, but these gains have been less than those experienced in earlier years. Mining employment, accounting for 6 percent of total nonagricultural employment, has shown strong advances in nearly every year since 1950 as the demand for oil, sulfur, and metals has continued to expand. The 1954-55 increase of 1.5 percent is much smaller than the defenseinspired gains of 1950-51 but is only slightly less than the average gain of 2 percent in 1952 and 1953. The most important industries contributing to the increases in mining employment since 1950 have been those engaged in petroleum, potash, copper, and sulfur mining; however, in 1954-55, the copper strikes had a marked retarding effect upon average mining employment. Future gains in this ca tegor y are likely to average between 1 and 2 percent per year as exploration becomes more difficult and more labor is required to find the needed reserves of nearly all minerals. On the other hand, mining technology is improving, and operations rapidly are becoming mechanized. The rates of growth in mining employment have varied sharply among the five states, both during the longer and shorter periods. The most rapid gains over the long run have occurred in New Mexico, Louisiana, and Arizona. Mining employment in New Mexico has been stimulated not only by increased potash mining but also by the discovery and development of new oil reserves. In Louisiana, offshore drilling in the Tidelands has had an appreciable effect, and in Arizona the opening of new copper mines has been largely responsible for the sharp gain in mining employment. Mining employment in Oklahoma has shown the slowest rate of growth of any southwcstern state over the past 5 years, and ( iIIII ,. ~ , MONTHLY BUSINESS REVIEW an actual decline has occurred in the past year, largely in response to a reduction in the number of drilling rigs ill operation. Finance, In surance, and Real E.tale Although finance, insurance, and real·estate employment accounts for only 4 percent of total nonagricultural employ. ment, it has consistently been among the most rapidly grow. ing categories of employment. In the first 8 months of 1955, employment in these industries advanced 3.9 percent over the average in 1954. This rate of growtll is substantially be· low the 5.8·percent average annual rate since 1950, but future gains probably will average nearer the 4.percent level. The stinlUlus to finance employment from expanding savings and loan and consumer finance companies is expected to continue. However, the inlpetus from new insurance institu· tions may have been dampened by the new Texas law. I Much of the recent gain stemmed from the same factors; but, in addition, new suburban communities needed banking, insurance, and real·estate facilities. Over the past 5 years, the ease with which insurance companies could be started in Texas and the passage of the driver responsibility law tended to stimulate employment in the category. Among the southwestern states, the largest absolute gain in finance, insurance, and real·estate employment occurred in Texas. Louisiana also showed a moderate gain, but New Mexico, Oklahoma, and Arizona gained only slightly. Manufacturing Employment The economic growth in 1955 has been reflected in an upturn in manufacturing employment in both the Southwest and the Nation, although nonmanufacturing employment in the Sonthwcst has responded mOTe rapidly than factory em· ployment. In contrast, growth in manufacturing employment in the Nation in 1955 has exceeded nonmanufacturing growth by nearly one· third. The major reason for this difference is INDEX OF MANUFACTURING EMPLOYMENT 149 the fact that the recession was concentrated in durable goods manufacturing, which accounts for a much smaller part of total manufacturing in the Southwest than in the Nation. Consequently, the recession had a sharper effect upon the number of manufacturing employees in the Nation than upon the number in the Southwest. Manufacturing employment during the first 8 months of 1955, averaging 712,400, accounted for 19 percent of non· agricultural employment in the Southwest, compared with 34 percent in the Nation as a whole. During these months of 1955, manufacturing employment in the five states increased 13,400, or nearly 2 percent, over the same period of 1954. The growth between 1954 and 1955 has not yet fully recov· ered the 3.5·percent decline in average employment in the previous year. Comparing the 1954·55 rate of gain with that of the 1950·55 period, the recent growth has not meas· ured up to the average 4-percent gain in the 5·year span. Nevertheless, the increase this year probably is more truly reflective of the gains which can be expected over the coming years as manufacturing growth develops at a more moderate rate. The stimulant of defense·induced manufacturing gains is past, and, unless a stronger wave of industrialization stemming from market industries develops, the future rate of growth is more likely to be similar to that of 1954·55. Among the several states of the Southwest, the largest aver· age 1954·55 increases occurred in Texas, Oklahoma, and Arizona. New Mexico showed only a moderate gain, and Louisiana manufacturing employment declined slightly. The most important segment of manufacturing employment in the Southwest is the nondurable goods industries, which account for 53 percent of total manufacturing employment, compared with only 4,2 percent nationally. The average level of nondurables manufacturing employment during the first 8 months of 1955 increased 1.7 percent over a year earlier; a large part of the gain occurred in apparel employment, which showed a 3·percent increase. The next largest increase was in employment in the chemical and allied products in· dustries, which averaged 1.4 percent above the first 8 months SOURCES OF MANUFACTURING EMPLOYMENT (1950-IOO) " (QU ARTERLY ) RCE HT FI RST [ IGI'iT PER C '" I 40 14 M O~THS ~ 19 ~5 SOUTH WEST LUMBER , WOOD PRODU CTS. 0 SOUTHWEST).. ~ I 12 1 0 1 0 0 17' • V-:7'" - 1 ,./ • I ••• 20 PRIMARY META L S, META L PRODUC TS, A ND MACHI NE RY TRANSPORTA T ION EQU IPME NT 10 FOOD AND K I ND RED PRODUCTS I 00 APPAREL AND FIN ISHED TEXTILE PRO DUCTS CHEM I CALS AND '0. 80 70 I '0 //t'-~>I ~~/- I UN ITED STATES / F URNITURE , AND F IX TURE S AL U ED PRODUCTS PET ROL EUM AN D COAL PROD UCTS 80 1950 1951 SOURCES . Siolo . "'~IOlm,"1 ogl/IC lu. u S . 8"'"d~" L"bM S'Olllllu. 1952 1953 1954 195!5 70 OTHER 40~~O IO P(RC.E NT S()uRCES S ,e re .",plc, "'" M" 4"""" U S B~ ' . o ~gl Lobo, srohshn 10 ZO )() PERCENT 40 150 MONTHLY BUSINESS REVIEW of 1954. A minor gain in food processing offset a similar decline in petroleum refining employment. AVERAGE WEEKLY HOURS IN MANUFACTURING SOUTHWEST Durable goods manufacturing, which is currently of less importance in the Southwest than in the Nation, has been the most dynamic manufacturing field in recent years. How· ever, the industries which were most important in the 2.2percen t increase in average durable goods manufacturing employment during the first 8 months of 1955 over the same period of 1954 were not the same industries that were mainly responsible for the nearly 50-percent increase from 1950 to 1955. The most rapid rate of growth between 1954 and 1955 was reflected in the lumber, wood products, and furniture industries, which showed only an insignificant rate of growth over the longer period. Contributing a smaller number of jobs over the past year have been the metal industries (primary metals, fabricated metals, and nonelectrical machinery), which combine to account for almost one-sixth of manufacturing employment. Over the longer trend, the metals industries have been a dynamic force behind the growth in durable goods manufacturin g employment. Similarly, the transportation equipment industry, plagued with sharp changes in military aircraft orders, has reduced its average employment this year, although it gained substantially over the 5-year period. This particular industry in the Southwest- at its point of greatest concentration, the Dallas-Fort Worth areahas only held its own as increases in automobile assembly employment have failed to compensate fully for reductions in aircraft industry employment_ The only District state showing a manufacturing employment decrease between 1954 and 1955- Louisiana-experienced this loss almost entirely in transportation equipment manufacturing. However, the overall southwestern decrease in transportation equipment jobs would have been greater if it had not been for an expansion in the aircraft industry near Tucson and the generally accelerated pace in the automotive field. Conditions and Characteristics of Employment HOURS PER WE (OUAII'TERL'r) URS I"ERWE[K "'• 4 4 44 A ~- Ij' Q ,I . 43 4 2~ 4 43 . ~ _ ' - 42 4' , 40 40 • '.50 3 "• 4 1951 1952 1953 .. , 4 19!5!S 3. require workers with a fairly high degree of intelligence and adaptability. In consequence, labor productivity has been increasing rapidly. Although no statistical proof is available, it would be logical to assume that southwestern industries, particularly chemicals and petroleum, are achieving a higher rate of employee productivity than those in the Nation as a whole. Thirdly, although a reserve of labor generally has been available, southwestern laborers have been working fairly long hours per week. For example, the average weekly hours of manufacturing workers in the Southwest have not averaged helow 41 hours in any quarter since 1950. In contrast, the Nation's manufacturing workers have averaged less than 40 hours per week for three quarters during 1954 and only slightly above 40 hours per week in the fourth quarter of 1954 and the first two quarters of 1955. In other words, the manufacturing workers of the Southwest have been utilizcd more intensively, with the result that over-all employment growth may have been retarded. Of perhaps equal interest to workers and to the economy in general are the characteristics and conditions of employment. The southwestern labor force has matured within the past 15 years, with a steady upgrading of skills as a result of the establishment of large wartime industries and rapid industrial progress since then. However, a reserve of unused labor still is concentrated near urban centers but located in rural and semirural areas. This reserve of labor provides a pool from which the Southwest obtains its labor flexibility during periods of full employment or extreme emergency. The steady improvements in agricultural technology are continuing to release farm labor, not only on a permanent basis but also for temporary nonagricultural work. Finally, partially as the result of this relatively high workweek and partly beca use of the strong demand for skilled labor, average weekly earnings of manufacturing employees in the Southwest have risen quite rapidly. Of course, a large portion of the gain has been the result of wage increases, stemming partially from increases in the cost of living. However, average weekly earnings are substan tially above those of 1950; at 73.45 in the second quarter of 1955, they were $2 per week above those in the second quarter of 1954. Average weekly earnings gained more rapidly in the District states than in the Nation from 1950 through 1955, although the current level of average weekly earnings for the Nation's man ufacturing workers is slightly higher than the average for manufacturing workers in the Southwest. A second major feature of the labor force is a result of the type of industry developed in this region . In general, tha maj or increases in manufacturing industries have occurred in those industTies wherein a large investment per worker is required. This type of industry usually needs skilled or semiskilled employees, as the majority of jobs Ou~ook The outlook for nonagricultural employment in the District states is conditioned by the future direction of a number of economic trends. A continued growtll in population and 4 MONTHLY BUSINESS REVIEW further concentration near the existing centers of trade and industry are expected to exert a strong force toward increases in service, finance, trade, and government employment. The recent pattern of industrialization centering upon industries with a high ratio of investment per worker probably will be modified as market-oriented industries are attracted to this area. However, improved technology and higher labor productivity are expected in nearly all industries, with a consequent lessening in the rate of growth in demand for unskilled labor and a developing premium for skilled workers. Improved technology also will require additional training and retraining for effective utilization of the available labor force. Nevertheless, in view of the raw material and climatic attractions to industry, further growth is expected in such industries as chemicals, petroleum, and metal refining. Another major factor affecting future industrial employment prospects is the development of corollary process firms, which are attracted by the presence of other manufacturers. For example, new steel and metal-fabricating industries are being attracted by the oil industry, as well as by other industries. Further gains in durable goods industries, marking a continuation of recent trends, are expected to induce a greater cyclical liability but also will improve the balance of manufacturing facilities, thus reducing the dependence of the area upon an individual industry. In summary, total nonagricultural employment in the Southwest is expected to increase at an annual rate of nearly 2 percent, and manufacturing employment should gain at a rate of approximately 3 percent per year. In other words, the outlook is very promising, with some growth expected in every major category of employment. ELEVENTH FEDERAL RESERVE DISTRICT c:zm OCl llo. Hue! Olfin IIIUII HOIJ,Ion T,,,itorr Branch Terrilor), 1.:.:.:.:.:1 San Anl0nlo BrGlleh Territory ~ Ef Po . o Branch Territory 151 152 MONTHLY BUSINESS REVIEW REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS Department store sales in the Eleventh Federal Reserve District in September declined 2 percent below August sales but were 7 percent more than in September 1954. Sales of homefurnishings continued strong, while the soft goods departments showed slight sales increases from a year earlier. Inventories were 8 percent higher than in August 1955 or September 1954. Sales at District furniture stores during September were 10 percent below those of August but were 15 percent above the year-earlier level. The total dollar volume of Dis· trict department store sales during September declined 2 percent from August, primarily because of one less business day, but was 7 percent above that in the comparable month of 1954. Weekly reo ports indicate that sales during the fir~t half of October exceeded the year·earlier total by approxImately 11 percent. Normally, the level of consumer buying at department stores in this District, as measured by daily average sales, rises approximately 7 percent from August to September. This year the rise--2 percent-was less than ~easonal, but daily average sales during September estabhshed a new high. Reflecting the less than seasonal gain, the adjusted index of sales declined from 139 in August to 131 in Sep· tember, compared with 122 for September 1954. The indicated production of cotton in the District states, as of October 1, is 5,865,000 bales, or 3 percent below production last year. Estimates of the corn, grain sorghum, peanut, and rice crops are higher than the month-earlier forecasts. Ranges in the District states are in the best condition for this time of the year in several seasons. During the first three quarters of 1955, District depart. ment store sales were 10 percent above sales in the first 9 months of 1954 and were 8 percent above the previous high for the January·September period, which was in 1953. Daily average crude oil production in the District rose moderately in October, following small increases in the preceding 2 months. A further rise in production is indicated for November in view of the higher oil allowables announced by the Texas Railroad Commission. On the other hand, District refinery crude runs declined noticeably during the first half of October to extend the decrease which began in September. Sales in the individual soft goods departments in Septem. ber generally showed slight increases from a year earlier, but sales in consumer durable goods departments continued to experience marked gains from last year. Sales of women's and misses' ready·to·wear accessories and apparel were 2 percent higher than in September 1954, while sales of men's and boys' wear were 1 percent lower. In the small wares departments, sales were at the same level as a year ago. Of selected soft goods departments, only piece goods and house· hold textiles experienced a marked change from a year earlier, Nonagricultural employment in the District states during September rose sharply to 3,924,700, or 17,400 over August. The primary stimulant was an increase in employment by educational institutions and retail trade establishments. Manufacturing employment rose moderately to 733,200. The value of construction contracts awarded in the District during September was 7 percent more than in August. Residential awards increased 6 percent, while all other awards were up 8 percent. Compared with a year ago, total awards were down 10 percent during September. Gross loans of the District's weekly reporting member banks rose 1 .5 percent during the 4 weeks ended October 19 . Total investments increased 2 .1 percent, primarily reRecting the added holdings of Treasury certificates following the new Treasury financing. Total deposits increased nearly 1 percent. RETAIL TRADE STATISTICS (Percentage change) STOCKS' NET SALES Sept. 1955 from line of trade by Clrea DEPARTMENT STORES Tolal Beventh District ••••.• . ••••• Corpus Christi •.••.••• . • •.•.•.••• Dallas •• ••••• ••.••••.•• .• •.•••. 8 Poso •..••••••••• .. ••••••• ••• Fort Worth ••••••••• . ••• • •••• •. • Houston •••••• •.•••..•••••••• •• San Antonio .•••. .. •••.••••••••. Shreveport, la . •••••••••••••• • •• Waco ••• . •••••••••.••••••• •• •• Other cities ••••••••.•••••••••• • FURNITURE STORES Total Eleventh District •••••••••••• Amarillo ••••••••••• ••••• •••••• • Austin ••••• • •• •• ••••••••••••••• Dallas •••••••• •••••••• ••••••••• Houston •••••••••• ••••••••••••• lubbock ••.•••••• •••••• • ••••••• Port Arthur •••••••••••••.••••••• Son Antonio ••.••••••••••••••••• Shreveport, la .••••••••••••••••• Wichita Falls •••••••.• . ••••••••• Other cities ••••••••.••••••••••• HOUSEHOLD APPLIANCE STORES Total Eleventh District ••••••••••.• Dallas ........................ . I Stocks 01 end of month. Sept. 1954 7 -2 9 7 9 7 2 2 18 12 15 9 12 27 12 23 9 4 15 25 15 -5 -5 Aug. 1955 -2 -8 3 2 _6 0 _11 0 0 -5 Sept. 1955 from 9 mo. 1955 camp. with 9 mo. 1954 10 9 11 10 10 8 8 6 14 13 18 -10 -14 -23 -11 -7 15 19 27 -20 -9 8 12 17 II -7 11 -4 -4 -3 8 Sept. 1954 Aug. 1955 8 8 23 8 25 12 4 9 6 4 _2 6 9 7 8 11 4 I 7 2 5 14 9 -1 16 19 -3 -I -9 3 7 3 4 5 4 8 12 8 4 2 4 153 MONTHLY BUSINESS REVIEW INDEXES OF DEPARTMENT STORE SALES AND STOCKS 11947-49 = 100r UNADJUSTED Sept. Area Aug. ADJUSTED' July 1955 Sapt. 1954 Sept. Aug. 1955 1955 1955 1954 129 123 144 123 117 139 122 120 140 131 125 147 139 139 153 145 141 158 122 115 137 155p 144 136 142 146p 145 143 134 1955 1955 J..ly Sept. SALES- Doily overage Eleventh District .•• • . .. •. .. • Dallas .•••.....•......... . Houston .•••.••••..•••.••• 131 131 149 STOCKS-End of month Eleventh District ••. ••••••••• Adjusted for $oosonol variation. p-PreJiminory. I with sales up 11 percent. Year-to-year increases in sales of homefurnishings ranged from 7 percent for domestic floor coverings to 25 percent for major household appliances. Charge accounts receivable at department stores followed the usual pattern during September, rising 7 percent above August; the end-of-month total was 5 percent above the volume outstanding on the same date last year. Instalment accounts showed virtually no change from August but were 16 percent above a year earlier. Collections on charge accounts during September were 45 percent of the amount outstanding at the beginning of the month, indicating an average pay·out period of approximately 67 days. Collections on instalment accounts amounted to 12 percent of outstandings at the beginning of September, reflecting an average collection time of abont 16 months. These ratios show no significant change from a month ago or a year ago. The dollar value of inventories of reporting department stores in the District increased further by 8 percent from August to September and at the end of the month was 8 percent greater than in September last year. The adjusted index of department store stocks, which makes allowances for usual seasonal variations, rose from 145 percent of the 1947-49 average in August to 146 percent in September. Orders outstanding, which had increased substantially in June and July, decreased in August but rose in September; at the end of the month, they were 24 percent higher than a year earlier. Rains fell over the major portion of the District during the last week in September and the first part of October, with the heavier amounts occurring in southeastern New Mexico, northwestern sections of Texas and Oklahoma, and the southern and coastal areas of Texas. Light to heavy rains in the High Plains provided needed moisture for planting additional acreages to wheat. Wheat fields which were planted prior to the September rains are up to a uniform stand and are making good growth. Precipitation checked deterioration of dry-land cotton in most of the High Plains area but lowered the grade of open cotton in irrigated sections in much of the western portion of the District. Cool weather during the middle of October retarded development of late cotton and feed crops. Harvesting of feed crops rapidly is drawing to a close in most of the later areas, and seeding of winter legumes and other small grains is virtually complete in many sections of the District. Showers during the past month have delayed development of commercial vegetables in south Texas, and plantings of additional acreages have been delayed as a result of wet fields. Cotton harvesting is practically complete in south·central and upper coastal counties of Texas, while activity is reaching a peak in the High Plains, southern valleys of New Mexico and Ari2ona, and District 6 of Texas. Cotton gin. nings in the District states prior to October 1 totaled 1,901,109 bales, or 15 percent less than in the corresponding period last year. In the Nation the cotton crop is forecast, as of October 1, at 13,928,000 bales, or 8 percent above the month·earlier estimate and 2 percent greater than last year's production, according to the United States Department of Agriculture. The indicated yield per acre is a record 405 pounds, which is 64 pounds above the previous record set in 1954 and is 126 pounds greater than the 10-year (1944-53) average. The indicated production of cotton in the District states is placed at 5,865,000 bales, or 5 percent higher than on CROP PRODUCTION New car registrations in three of the larger metropolitan centers of the District declined from August to September; registration s were down 5 percent in Dallas, 8 percent in Fort Worth, and 15 percent in San Antonio. However, registrations in Houston showed a month. to-month increase of 2 percent. Registrations in the four cities ranged from 28 to 70 percent higher than a year ago. Furniture store sales in this District, after an almost steady increase since the first of the year, declined notice. ably in September. Sales were down 10 percent from Augnst but were 15 percent above the year-earlier level. Following three successive monthly declines, stocks rose 5 percent from the end of August and were also 5 percent higher than a year ago. Texas and Five Southwestern States (In thousands of bushels) TEXAS E! timated Crop Cotton 2 ••• •• ••• • Corn •••••••••• • Wheat. ........ Oats • . . . ...... . Barley, ....•. . . Rice' ••....•.•• • Sorghum grain •.• Flaxs eed ..... .. HCly 4 • • • • • • • • • • • Peonvts 5.. . .... . Irish pototoes .... Sweet potatoes .. Oct. 1. 1955 4,000 50,196 14.212 34.615 2.208 14,036 138,424 78 1,810 237.250 2,772 2,600 FIVE SOUTHWESTERN STAlESt AYerage 195.( 3,9.40 33,184 30.894 41,354 3.135 16.120 117.386 578 1.389 108.185 2,033 1,350 19.4.4·53 Oet. 1, 1955 879 5,865 77.879 44,744 57,324 17.776 26,564 164,765 186 1,570 5,391 272.522 3,479 3,664 341.375 5,610 12,715 3,388 417,111 55,404 28.167 2.481 10,918 77,502 Average Estimated 1 Ari:zono, Louisiana, Ne w Mexico, Oklahoma. and Texas. 2 In thousand s of boles. I In thousands of bag$ containing 100 pounds each. , 10 thousand s of ton s. a In thousands of pounds. SOURCE: United States Deportment of Agriculture. 1954 194.4·53 6.Q32 52.047 84.584 102,895 138,465 65,737 21,966 47,500 9,964 21,886 93,103 1,300 4,807 390.998 7,580 13,379 31,116 130,950 676 4,476 153,325 4,815 10,374- 5,067 MONTHLY BUSINESS REVIEW 154 LIVESTOCK RECEIPTS (Number) SAN ANTONIO MARKET FORT WORTH MARKET Sept. Clou Se pt. Aug. Se pt. Sept. Aug. 1955 1954 1955 1955 1954 1955 68,832 79,7 10 24 ,3 84 3 5,615 26.263 18,227 40 ,006 3 9,50 6 2,597 '34,017 30,130 4,573 '25.782 Ca lves . . .. • . .. . 21 ,417 10 4,5 62 36,33 8 Hogs• . •... . ... . Sheep . •• . .•. •. . .41,840 58,993 36,180 72,536 Cottle • •. • . . . . . . 3,873 '2 6,720 55,73 5 37,851 1 Includes goats. pared with a 1955 marketing quota of 30,000 bales and an aC eage allotment of 46,154 acres. On December 13 a referl" endum will be held, in which two·thirds of the growers voting must approve the marketing quotas for both upland and extra-long staple cotton if such quotas are to become effective. CROP REPORTING DISTRICTS OF TEXAS September 1 but 3 percent below the 1954 crop. The indicated production in each of the District states is higher than the month·earlier estimate. In Texas the prospective cotton crop is placed at 4,000,000 bales, reflecting an increase of 150,000 bales from a month ago. A crop of this size would be 2 percent above that in 1954 and 18 percent larger than the 1944·53 average. Approximately half of the increase in prospective production from a month earlier occurred in northwestern Texas; about one· third, in the Blacklands; and the remainder, in eastern, south-central, and upper coastal counties. The yield per acre in Texas is indicated at 289 pounds, or 44 pounds more than in 1954 and 101 pounds above the lO-year average_ On October 14 the Secretary of Agriculture proclaimed a national marketing quota of 10,000,000 bales and a national acreage allotment of 17,391,304 acres for the 1956 crop of upland cotton. The upland cotton acreage allotment for 1956 is 4 percent below the 18,113,208 acres allotted for the 1955 crop. The marketing quota for extra-long staple cotton is 35,300 bales and the acreage allotment is 45,305 acres, com- Production prospects for grain sorghums and corn in the District showed further improvement during September. The corn crop is estimated, as of October 1, at 77,879,000 bushels, or 50 percent larger than in 1954. Grain sorghum production is indicated at 164,765,000 bushels, which is 26 percent greater than last year's crop and 77 percent more than the 10-year average. Improved grain sorghum prospects in northwestern Texas more than offset the decline in indio cated production in Oklahoma, New Mexico, and Arizona, while all of the increase in expected corn production is the result of higher estimates for the Oklahoma crop. In Oklahoma and Texas, peanut yields are higher than those anticipated earlier; and production in the District is indicated, as of October 1, at 341,375,000 pounds, or 7 per· cent more than the month·earlier estimate and 123 percent larger than last year's small crop. The prospective output of rice in Texas and Louisiana is placed at 26,564,000 bags, or 3 percent more than the September 1 estimate and only 15 percent below production in 1954. In Texas, total citrus production in the 1955-56 season is forecast at 4,000,000 boxes. The grapefruit crop is indicated at 2,200,000 boxes, or 12 percent less than that in the preceding season, and the orange crop is placed at 1,800,000 boxes, which reflects an increase of 20 percent from the 1,500,000 boxes harvested last year. COTTON PRODUCTION Ranges in the District states as of October 1 were in the best condition for that date in several years, according to Texas Crop Reporting Districls [In thousands of boles-500 lb. grosl wI.) Crop reporting district 1955 Indicated Odober 1 l·N ••••• ••• • •••• •••. • . • .• •• 1·5 • • • •• • ••. •• • . • . • • • • .. ••• 2·N • • • •• •• •. •.•• •.•• • •• . •• • 400 1.075 245 2·5 •• •• • • ••••••• ••• •• •• •• •• 3 •••• • •• •• • ••• • • • • •• • •••••• 4 •••••••••••••••••••• • • •• • • 5·N ••• •• . • •••. •• • •• . • •••.•• 225 25 6 •••••••••••••••••••• • ••• • • 630 130 90 260 B·N • ••••• • •••• • ••••• •• •••.• 30 160 5·5 •• • ••• • •••••• • .•.•• • • ••• 7 ••• • . .. .. ...• • ... . .. . .. • . . 8·5 ••. • •••.•• • •••••••••••.• 9 •••••••• • ••• • .• • ••• •• • ••• • 10·N • • ••.• •• •. • .•• • ••••• • • 70 235 1955 1953 1954 512 1.Q98 548 835 78 98 180 20 448 75 74 261 285 39 1, 10 1 13 6 119 125 125 141 142 39 215 76 221 25 218 10·5 •••••. • •.•..•• • •• • ••• • • 390 192 67 407 State......... . . .. ..... ....000 3.940 35 FARM COMMODITY PRICES a s perce nt of 1954 SOURCE. United Slates Deportment of Agriculture. 143 253 238 32 258 4,317 Top Prices Paid in local Southwest Markets 111 173 122 100 120 113 32 122 52 96 102 Commodity gnd market COnON, Middl ing 15 / 16-inch, DaUas •• .. WHEAT. No. 1 hdrd, Fort Wort" •••.• . . .. OATS, No. 2 white, fort Worth ... . ..... . CORN, No. 2 yellow, Fort Worth ...•. • •.• SORGHU M S, No.2 yellow, fort Worth •• .• HOGS, Choice, Fori Worth •• .•• • •• . •. ... SLAUGHTER STEERS, Choice, Fort Worth ••• SLAUGHTER CALVES, Choice, Fort Worth •• STOCKER STEERS, Choke, fort Worth • . • •• SLAUGHTER SPRING LAMBS, Choice, Fort Worth .• • •.. • •. • .• • .•.•..••.•.• BROILERS, south Texas ••••.•.••••• • • • • • • Comparable Comparable Week ended week week Unit Oc:t. 20, 1955 last month lalf year lb. bu. bu. bu. cwl. cwl. owl. S .3270 2.41Y.. $ .3195 2.43 .85 1.53 .83 1.55 2.05 2.05 15.50 17.50 23.50 cwt. (wt. 23.00 20.00 21 .00 owl. lb. 19.50 .25 .3400 2.65 1.00Vl 20.00 1.96Y.. 2.62 19.75 25.00 21.00 21.00 18.S0 .26 19.50 .24 18.50 155 MONTHLY BUSINESS REVIEW the Department of Agriculture. In the High Plains, rains increased prospects for winter grazing on wheat fields, and small grains in the eastern part of the District are developing rapidly. Livestock generally are in good condition, and many ranchers are del aying fall marketing to take advantage of the improved feed supply. In the 4 weeks ended October 19, the weekI y reporting member banks in the District showed an increase of $34,359,000 in their gross loans and discounts, a somewhat smaller increase than during the corresponding weeks last year. Even though brokers' loans and real-estate credits declined, other loans for purchasing securities, loans to banks, "all other" loans, and cOlwnercial, industrial, and agricultural loans increased. Last year, all of the loan accounts showed gains except loans to banks, which decreased slightly. The weekly reporting member banks added $30,007,000 to their total investments during the 4 weeks. The most substantial increase, $57,947,000, was registered in holdings CONDITION STATISTICS OF WEEKLY REPORTING MEMBER BANKS IN LEADING CITIES Eleventh Federel Reserve District CONDITION STATISTICS OF All MEMBER BANKS Eleventh Federal Reserve District (In millions of dollars) Sept. 28, 1955 Item ASSETS Loans and discounts .•....... . ... .............. United States Government obligations ........... . Other securities ...................•.•.... .... Reserves with Federal Reserve Banll .... .... . • .... Cosh in 'l'a ulte ....... .................. . • . ... 8alances with banks in the United States ..... ... . . Balances with bonks in foreign countries e ...... .. . Cash items in process of collection . ............. . Other ossehe .. . ... . ... . ...... .... .......... . Sept. 29, 1954 Aug. 31, 1955 $3,711 $3,100 2,600 492 961 125 1,102 2 329 158 $3,643 2,375 565 938 137 912 2 349 182 2,337 575 945 159 959 2 357 186 TOTAL ASSETSe .. ........•. ...... .•....... 9,231 8,869 9,103 L1A81L1TIES AND CAPITAL Demond deposits of banks . .... , ......... .•... . Other demand deposits ..•........•.•.......... Time deposits .. ..........................• • .. 981 6,186 1,292 1,148 5.957 1,089 943 6,129 1,277 Total deposits .......... , .. . ...... • . ....... Borrowings e , .................... .• ...... ... . Other liabilities e .. . . ................• . ....... Total capitol Qccounts e •...... , .... .. .•.... .... 8,459 34 71 667 8,194 1 67 607 8,349 25 66 663 TOTAL LIABiliTIES AND CAPITAle .•..... ..... 9,231 8,869 9,103 e-Estlmoted. of Treasury certificates, reflecting the new issue during the period; holdings of United States Government bonds rose $2,094,000. The banks' portfolio of Treasury bills, Treasury notes, and other securities declined. During the corresponding period of 1954, the weekly reporting member banks added $88,135,000 to their investment accounts. {In thousands of dollars} Item Oct. 19, 1955 Oct. 20, 1954 Sept. 21 , 1955 ASSETS Commercial, industrial, and agricultural loans • .. loans to brokers and dealers In securities .. .. . . Other loans for purchasing or corrying securities. Real·estate loons ......... . ........ . ... . . . . loons to banks ...................... . .... . 51,513,515 51,282,760 $1,496,323 16.590 14,789 20,08 1 118,763 94,774 117,850 205,166 155,361 209,528 13,035 9,134 404,695 8,635 508,832 25,226 1,961,513 17,965 2,361 ,249 25, 201 All other loons . . • .. •.• ••.••••••• .•.•. ••••• 528.539 Gross loans . ............ . ............. . leu reserves and unallocated chorge ~offs •• 2,395,608 Net loans.... ...... . ... ......... . .... .. 2,370,382 1,943,548 2,336,048 U. S. Treasury bills ... ...... .. . .. ...... .... . U. S. Treasury certificates of indebtedness . .... . U. S. Tre<::ISury notes ... ...... .... .......... . U. S. Govemment bonds (inc. gld. obligations) .. Other securities ..... . .... .. .............. . 39,318 74,143 258,271 834,909 248,547 160,101 151,461 287,250 879,014 227,025 48,845 Total in'l'estments .. ... ... .. ..... ........ . Cosh items in process of collection ..... ...... . Balances with bonks in the United States ... ... . Balances with banks in foreign countries .... .. . Currency and coin . ....................... . Reser'l'es with Federal Reserve Bank ....... ... . Other asseh ..... .. ........ .............. . 1,455,188 379,441 425,810 1,771 47,853 596,255 139,886 1.704.851 332,192 541,351 45,277 616,227 115,641 1,425,181 388,109 453,350 2,240 47,927 587,650 13 2,154 Between September 21 and October 19, the weekly reporting banks showed an increase of $45,590,000 in their total deposit liabilities. A gain of $56,664,000 in United States Government balances more than offset declines in most other categories, so that total demand deposits increased $48,140,000_ Time deposits declined $2,550,000, a decrease of $3,222,000 in local government balances beiug the most substantial decline. 1,657 16.196 272,312 832,815 255.013 TOTAL ASSETS •••.••.••.••. • .•. •••••• 5,416.586 5.300,744 5.372,659 LIABILITIES AND CAPITAL Demond deposits Indi'l'iduals, partnerships, and corporations .. . . United States Government . .. . ...... . .. . . . Stales and political subdi'l'isions . .......... . Banks in the United States .... . . ... ....... . Sanks in foreign countries .... . . .......... . Certified and offlcers' checks, etc.......... . 2,837,590 131,640 180,170 861,131 18,011 66,041 2,731,362 136,730 156,975 1,012,704 14,717 73,194 2,837,931 74,976 Total demand deposits .•...... •. ....... 4,094,583 4,125,682 As of October 19, bills payable and rediscounts totaled $40,200,000, reflecting a decrease of $8,300,000 since September 21. At the same time last year, borrowed funds totaled $30,000,000. Reporting banks in 24 cities in the District showed an aggregate 2-percent decline in debits to deposit accounts from August to September but a 14-percent increase from September 1954_ Approximately the same number of cities reported increases as reported decreases_ Lubbock showed the largest monthly increase, 9 percent; and Corpus Christi, 4,046,443 Time deposi ts Individuals, partnenhips, and corporations .... United States Government ...•.. . ......... Posla l savings ...... ... ........... .. . .. . States and political subdivisions .. .. . ...... . Bonks in the U. S. and foreign countries .... . . Total time deposits ................... . 698,465 11,874 606,376 189,628 867,372 18,562 57,974 GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS Elevenlh Federal Reserve Districl (Average, of daily flgures. In thousands of dollars) 697,898 12, 159 452 13.369 452 118,431 2,025 105,475 1,278 121,653 1,635 831.247 726.950 833,797 452 Totol deposits ... . .. . ......... .. ... . Bills pa yable, redisco unts, etc ... . ... . . . ... . . . All other liabilities . ... . ................... . Total capitol occounls .. . .... ... . .. ... ... .. . 4.925,830 40,200 61,910 388,646 4,852,632 30,000 63,422 354,690 4,880,240 48,500 58,536 385,383 TOTAL LIABIlITIES AND CAPITAL .... . ,.. 5.416.586 5,300,744 5,372,659 COMBINED TOTAL Dote Grass demand TIme RESERVE CITY SANKS Gross demand Time COUNTRY SANKS Gran demand Time Sept. 1953 .... $6,647,956 $ 912,860 13.236,056 $501,477 $3,411,900 $411,383 Sept. 1954 .... 7,086.193 1.081,B50 3,499.932 600,926 3,586,261 480,924 May 1955 . ... 7.241,268 1,226,177 3,541 ,867 704,826 3,699,401 521,351 7,190,550 1.223,862 3,5 18,648 704,471 3,671.902 519,391 June 1955 .... July 1955 .... 7.218.169 1,273,423 3.545,239 753,896 3,672,930 519,527 Aug. 1955 . ... 7,144,992 1,276,939 3,480,158 755,284 3,664,834 521.655 Sept. 1955 .... 7,195,579 1.271.089 3,517,182 748,666 3,678,397 522,423 MONTHLY BUSINESS REVIEW 156 BANK DEBITS, END·Of·MONTH DEPOSITS AND ANNUAL RATE OF TURNOVER OF DEPOSITS NEW MEMBER BANKS (Amounts in thouUlnds of dollou) DEBITS' DEPOSITS' Percentage chanQe from September 1955 Area S e pt. Aug. Annual rot e of turnover Sept. 30, 1954 1955 1955 Sept. 1955 Se pt. 1954 Aug. 1955 ARIZONA Tucson •••••••••••••• 131,479 23 -2 95,256 16.7 14.9 17.2 59,532 241,277 14 22 7 16.4 15.6 15.1 -2 45,438 187,434 13.4 16.3 16.1 26,610 4 -2 25,677 12.2 10.9 12.4 18 21 12 1 12 -1 -1 -11 9 6 16 -3 19 3 13 -3 4 -2 12 -3 14 -1 22 9 16 -3 3 7 13 -3 9 8 17 1 1 2 18 4 13.7 106,404 17.6 118,528 97,416 107,707 22,219 1,012,046 129,670 356,771 70,433 1,206,303 19,459 87,603 45,555 45,366 346,968 17,749 56,448 67,850 103,032 14 .3 12.7 15.0 13.8 14.4 15.2 LOUISIANA MonrOe •••••....... • Shreveport •• ••••.••• NEW MEXICO Roswell •••••••••••• • TEXAS Abilene ...... . ..... . Amarillo .......•... . Austin .............• Beaumont •••• •• •••• • Corpus Christi ...•...• Corsicana .......... . Dallas ............. . EJ Paso .......... . .. Fort Worth .......... Golveston ........ . . . Houston ............ laredo ........... . . lubbocK ............ Port Arthur .......... San Angelo ......... San Antonio . . ....... Texarkana' •. ...... . Tyler .............. . Waco .............. Wichita Falls •.. . . •.• 67,068 157,850 139,048 124,766 156,651 17,481 1,956,668 221,548 594,181 80,508 1,973,058 19,623 126,560 53,713 44,502 465,250 18,665 72,205 88,100 97,779 Total-24 cities ........ $6,934,122 ° ° 14 -2 58,793 15.4 17.4 9.5 23.6 20.5 19.9 13.7 19.7 12.2 16.8 14.0 11.6 16.2 12.6 15.4 15.7 11.3 $4,430,125 ....- 1 8.S 9.4 21.7 18.2 18.6 13.9 18.7 11.6 15.5 14.0 10.7 15.6 11.6 13.6 16.0 9.8 17.5 13.7 17.5 14.2 15.4 19.3 8.9 25.0 19.8 20.4 14.0 20.5 12.2 15.1 14.6 11.3 17.2 11.9 15.1 15.8 10.9 19 .6 I Debits to demand deposit accounts of individuals, partnerships, and corporations gnd of states and political subdivisions. I Demand deposit accounts of individuals, partnerships, and corporations and of stgtes and political subdivisions. I These figures include only one bank in Texarkana. Texas. Total debits for all banks in Texarkana. Texas-Arkansas, Including two bgnks located in the Eighth District, amounted to $39,422,000 for tile month of September 1955 . with a month·to·month decline of 11 percent, recorded the most substantial decrease. The annual rate of turnover of deposits in the 24 cities also declined during September, from 19.6 in August to 18.8; a year earlier, the rate of turnover was 17.5. During September, gross demand deposits of all member banks in the District averaged $7,195,579,000, reflecting in· creases of $50,587,000 from August and $109,386,000 from September 1954. Gross demand deposits at reserve city banks rose $37,024,000, while those at country banks rose $13,· 563,000. Time deposits in the District were $5,850,000 below their August level, with the decline at reserve city banks more than offsetting the slight increase recorded at country banks, and were $189,239,000 larger than during September last year. During the 4 weeks ended October 19, total earning assets of the Federal Reserve Bank of Dallas increased $4,488,000 to $1,003,056,000. A $16,441,000 addition to holdings of CONDITION OF THE FEDERAL RESERVE BANK OF DAllAS (In thousands of dollars' Item October 19, 1955 Total gold certificate res erves ..•......•..... $ 729,022 Discounts for member banks . . . ..... .. .... . . 41,155 Other discounb and advances .. . .... .•..... 627 U. S. Government securities ... ............. . 961,274 Total earning assets ........•.............. 1,003,056 Member bank reserve deposits ..... ........ . 991,626 Federal Reserve notes in actual circulation .... . 718,014 October 20, 1954 Sept. 21, 1955 $816,506 318 8,695 960,988 970,001 976,591 733,156 $743,488 52,482 1,253 944,833 998,568 981,492 717,115 The First National Bank of Bovina, Bovina, Texas, a newly organized institution located in the territory served by the Head Office of the Federal Reserve Bank of Dallas, opened for business October 29, 1955, as a member of the Federal Reserve System. The new bank has capital of $50,000, surplus of $50,000, and un· divided profits of $25,000, The officers are: I, P. Macon, Chairman of the Board; C. R. Elliott, Presi. dent; R. A. Iefferies, Vice President; Ioe B. Temple, Vice President; and Warren Embree, Vice President and Cashier. The Citizens National Bank of Gonzales, Gonzales, Texas, located in the territory served by the San An· tonio Branch of the Federal Reserve Bank of Dallas, opened for business October 31, 1955, as a conversion of the Gonzales State Bank, Gonzales, Texas, which was a member of the Federal Reserve System. The bank has capital of $14(),000, surplus of $185,000, and undivided profits and reserves of $71,700. The officers are: M. P. Rochelle, Chairman of the Board; V. S, Marett, Presi· dent; Horace Wood, First Vice President; F. D. Koker· not, Vice President; George V. Holmes, Vice President and Agriculturist; Herman H. Braley, Cashier; P. L. Crockett, First Assistant Cashier; and Mrs. Marcella Burchard, Assistant Cashier. NEW PAR BANKS The Southwest Bank and Trust Company, Irving, Texas, a 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 its opening da.te, October 13,1955, The officers are: C. B. Hardee, Chairman of the Board; Carr P. Collins, Ir. , President; Hans Mueller, Executive Vice President; and E. B. Wilkins , Cashier. The Main Bank and Trust, San Antonio, Texas, an insured, nonmember bank located in the territory served by the San Antonio Branch of the Federal Re· serve Bank of Dallas, was added to the Par List on its opening date, October 17, 1955. The officers are: lack G, Lawrence, President; Charles B. Cooney, Vice Presi· dent; and I. A. Potts, Cashier. Government secuntles more than offset declines of $11,. 327,000 in member bank discounts and $626,000 in other discounts and advances. By contrast, a year earlier, total earning assets were $970,001,000, including member bank discounts of $318,000, other discounts and advances of $8,695,000, and United States Government obligations of $960,988,000. Total gold certificate reserves were reduced $14,446,000 in the 4-week period and were $87,484,000 be· low the level on October 20, 1954. Federal Reserve notes in actual circulation on October 19 totaled $718,014,000, 4 ~ r MONTHLY BUSINESS REVIEW 157 CHANGES IN FACTORS AFFECTING MEMBER BANK RESERVE BALANCES CRUDE 01[, DAILY AVERAGE PRODUCTION Eleventh federal Reserve District (In thousands af barrels) (In thousands of dolton;) Change from Sept. 1955 1 lS9!~'2 August 195!i1 3,088.5 2;745.7 572.6 1,073.9 206.9 2,914.5 2,606.9 552.9 1,011.2 212.6 86.1 744.1 3,077.1 2;734.2 574.7 1,081.9 202.6 89.9 785.1 226.3 116.5 3,589.1 6,666.2 CHANGE' Area .4 weeks ended Oct. 19, 1955 Dec. 29, 1954Cd. 19, 1955 -$ 2,998 - 47,138 + 65,247 4,986 +$ 25,595 - 376,297 + 309, 473 fACTORS Federa l Reserve credit-local ........ .. .... . .. ,. Interdistrict commercial and flnancial transactions . •• Treasur y operations •••.•.. •.•••• .•. •..•.• .. •.• Currency transactions ••• •... •....•• . •.• ..•.•.. • Other depositl at Federal Reserve Bank ..... . ... . Other Federal Reserve accounh ..... ...... .... . . RESERVE BALANCES October 19, 1955.. . .. ...... .... September 21, 19$5. . ...... .... I + + 6 3 +$10,134 $991,626 $981,492 + + 16,153 566 10,757 -$ 14,885 Sign of change indicates effect on reserve balances, which represents an increase of $899,000 over a month earlier but a decrease of $15,142,000 compared with last year's figure. Member bank reserve balances rose $10,134,000 in the 4·week period ended October 19 and $15,035,000 over the corresponding date last year. Treasury operations in the District had an expansive effect of $65,247,000 on reserve balances, which more than counteracted the $47,138,000 decline resulting from the interdistrict flow of funds. Cur· rency transactions had the effect of reducing reserve bal· ances by $4,986,000, and local Federal Reserve credit de· clined $2,998,000. For the year through October 19, reserve balances decreased $14,885,000. The increase in short· term rates of interest evident through. out the year has continued in recent weeks. Representative of this firmness, the prime rate (the price of direct bank loans to the best credit risks) was increased on October 14 to 3ljz percent, which is higher than at any time since 1933, On Octoher 11 the Treasury issued approximately $2,900,000,000 of Tax Anticipation certificates bearing a 2%,percent coupon and maturing June 22, 1956. Subscribers in this District received $127,980,000. Demand for petroleum products in the Nation continued very strong during September and the first part of October. Generally favorable driving conditions maintained gasoline consumption, and the demand for light heating oils rose seasonally. In the 5 weeks ended October 14, the demand for maj or refined products at refineries and bulk terminals was 7 percent higher than in the corresponding period last year, with both gasoline and distillate fuel oil up 9 percent, resid· ual fuel oil practically unchanged, and kerosene down 3 per. cent. Crude oil production in the District during the first half of October rose moderately, following small increases during August and September. Production during the first 2 weeks of October averaged 3,151,000 barrels per day, which is 63,000 barrels higher than in the preceding month and 259,000 barrels more than a year earlier. The pattern in the ELEVENTH DISTRICT •••••••• Texas .....•.......•... . Gulf Coast • ....•.•.. . . West Texas ........... East Texa s (proper) .•... 90.1 802.2 227.1 115.7 Panhandle ••...••...•. Rest of Stote •••• •• .••• Southeastern New Mexico .. Northern Louisiana ••••••.• 201.1 OUTSIDE ELEVENTH DISTRICT. 3,578.9 6,667.4 UNITED STATES ••.........• 106.5 3,236.4 6,150.9 S e pt. August 1954 1955 174.0 138.8 19.7 11.4 11.5 - 2.1 - 8,0 62.7 -5.7 4.0 58.1 26.0 9.2 342.5 516.5 4.3 .2 17.1 .8 -.8 -10.2 1.2 SOURCES: 1 Estimated fram American Petroleum Institute weekly reporh . .l Unite d States Bureau of Mines. Nation was similar to that in the District, with production in the first half of October averaging 6,702,000 barrels per day- or 34,000 barrels higher than in September and 567,000 barrels more than in October a year ago. A further rise in District crude oil production is indicated for November in view of the increased allowables scheduled for Texas. While the number of state-wide producing days in Texas remains unchanged at 16, the effect of the one less calendar day in November is to raise allowables 74,389 barrels over the mid-October level. Refinery crude runs in the Nation declined substantially during the first half of October but continued noticeably above the year-earlier level. This decrease followed a moderate decline in September, when the Nation's refinery crude r!1ns averaged 7,484,000 barrels per day- or 95,000 barrels less than in August but 545,000 barrels higher than in September 1954, In the District, crude runs to refinery stills also were down in the first part of October, extending the decline which occurred in September. District refinery crude runs in September averaged 2,183,000 barrels per day, down 55,000 barrels from August but 112,000 barrels above a year earlier. The declining trend in the Nation's crude stocks, evident since June, continued during September but halted in early October. Crude stocks on October 15 totaled 255,100,000 barrels, which is 15,900,000 barrels less than a year ago and is below the range generally considered desirable. On the other hand, refined products stocks have been rising because of the seasonal build-up in heating oils and, east of California, may be considered a little on the high side. As of midOctober, distillate fuel oil stocks were at a record high, up 15,600,000 barrels from a year earlier. Residual fuel oil NATURAL GAS, MARKETED PRODUCTION (In millions of cubic: feet) Fint quarter Second quarter Second quarter Area 1955 1954 1955 Lauhiano ................•.. New Meulica .... .... . ....... . 281,600 105,200 153,800 1,106,500 403,000 Oklahoma ......... .... .. .. . Texas .•.•.... ... ... ..... . .. 355,200 123,300 173,000 1,143,700 1,252,600 Total .................... . 1,795,200 1,647,100 , ,966,500 SOURCE: United States Bure au of Mines. . :~r:~gg MONTHLY BUSINESS REVIEW 158 stocks were noticeably higher than a year ago in all areas east of California. Gasoline stocks, however, were slightly below the year·earlier level. VALUE O F CONS TRUCTION CONTRACTS AWARDED (In thousands of dollors) Jgnucry-Seplember Marketed production of natural gas in the major producing states lying wholly or partly within this District- Louisiana, New Mexico, Oklahoma, and Texas- declined seasonally during the second quarter of 1955 but continued to show an appreciable gain over the year-earlier period. At 1,795 billion cubic feet, marketed production in the District states comprised 81 percent of the national total. During September, total nonagricultural employment in the five states lying wholly or partially within the District established the first all-time record since December 1952. September employment, at 3,924,700, reflected a seasonal gain of 17,400 above August and was 108,100 more than in Sep· tember 1954. The most important factor in the month-to· month increase was the reopening of schools, which not only caused educational employment to rise but also stimulated employment in the retail trades. Construction declined sharply, as an increase in Arizona was more than offset by losses in the other states. Mining employment declined moderately as students left their summer jobs to return to schoo!. Manufacturing employment during September increased to 733,200; most of the gain occurred in transportation equipment manufacturing, although gains also were experienced in cotton oil mills, segments of food processing, printing and publishing, and apparel manufacturing. Scattered information indicates that textile factories in the District are operating at sustained high levels as orders are running well ahead of last year. Unemployment during September decreased sharply as students withdrew from the labor force and winter school employees returned to theit· regular jobs. In Texas, the only state for which data are available, unemployment during the month totaled 103,000. Texarkana continued to be the September 1955 Area gnd tYPIl September 1954 August 1955 ELEVENTH DISTRICT... S 148,962 S 166,11Sr S 139,06 3 4S,186 84,S69r Re5idenlio!.... . ... 51, lS8 SI ,5 49r 90,877 All other. . . . . . . . . . 97,774 1,894,841 UNITED STATES l . ... . 2,034,895 1,816,232 835,418 777,332 Residentio l. . . ..... 733,382 AUother .. " ... .. . 1,301,513 1,038,900 1,059,423 1954 1955 1,332 ,181 580,156 752,025 18,184,044 7,984,550 10,19 9,49 4 1,039,920 488,629 551,291 14,477,24 1 6, 196,199 8,281,042 I 37 state s ecat of the Rocky Mounlain~. r- Revise d SOURCE: F. W. Dodge Corporotian. only major labor market in the District with a substantial labor surplus; however, unemployment in the city has decreased considerably from a year earlier_ The value of construction contracts awarded in ti,e District during September totaled $148,962,000, or 7 percent above August but 10 percent below September 1954. The year-toyear decline was accounted for by residential awards, which were down 39 percent, although they demonstrated a 6-percent gain above the August level. All other awards during September were up 8 percent from the preceding month and were 20 percent more than a year earlier. During the first three quarters of 1955, total awards in the District exceeded those of a year ago by 28 percent; residential awards were up 19 percent; and all other awards were up 36 percent. In the Nation during September, the value of construction contract awards was 7 perce nt above the preceding month and 12 percent above a year earlier. However, residential awards were down 12 percent from August and 6 percent from September 1954, while all other awards were up 23 percent from the previous month and 25 percent from last year. Compared with the /irst 9 months of 1951, total awards in the Nation rose 26 percent during the same period in 1955 ; residential awards, 29 percent; and all otl,er awards, 23 percent. 8UILDING PERMITS 9 months 1955 Pereenreg. dlange in valuation from NONAGRICULTURAL EMPLOYMENT Five Southwestern Stalesl September 1955 Percent change Sept. 1955 from Number of persons September Type of employment Total nonagriculrural wage and salary workers .. ManufachJting •• • • . •••• •• September August 1955p 1954 1955 3,924,700 733,200 Nonmanufacturing ........ 3,191,500 Mining . ....... , ...... 243,500 Construction, .•........ 278,400 Transportation and public utilities ..........•. . 397,900 Trad e ...... . . ... .. ... 1,003,8 00 Finance ... .. . . ..... . . • 162,700 Service •....... ....... 452,500 Government ...... . ... . 652,700 Sept. 1954 Aug. 1955 3,816,600 705,300 3,111,300 233,400 272,800 3,907,300 732,500 3,174,800 245,200 285,200 2.8 4.0 2.8 4.3 2.1 .4 .1 .5 -.7 -2.3 392,200 978,400 156,100 446,900 631,500 399,100 997,100 163,600 453,600 631,000 1.5 2.6 4.2 1.3 3.4 - .3 .7 -.6 _.2 3.4 1 Arizona, Loublanc, New Mexico, Oklahoma, and Texcl$. p-Prelimindry. SOURCE: Stale employment cgencies. Area Number LOUISIANA Shreveport .... 459 TEXAS 176 Abilene .... . . 201 Amarillo ..... . Austin ....... . 266 Beaumont .. . . . 338 278 Corpus Chrbti .. Dallas ....... . 2,089 482 EI Paso ... , ... Fort Worth,.,. 687 Galveston .... . 87 848 Houston .... " 25 1 lubbock .. .... Port Arthur . . , . 199 San Anlanio . .. 1,675 413 Waco ... . , . . . 111 Wichita Falls .. Valuation Sept. Aug. 1954 1955 Number 1,986,924 -47 Valuation Percentage chenge in valuation from 9 months 1954 -58 4,309 29,261,391 42 1,.(84 2,323 2, 827 2,849 3,941 20,964 4,003 7,057 9,036,732 - 59 1,885,961 - 2 590,453 60 4,603,864 - 27 1,0 46,490 - 18 1,658,875 30 _42 31 - 18 29 -23 -28 41 0 -56 3 - 22 2 0 - 28 105 9,791 2,650 1,406 16,000 2,737 1,284 15.32 0,450 17.848,567 31,707,136 7,247,838 24,606,483 138,756,7 84 27,011,589 44,969,62 3 4,150,150 113,133,041 22,471,835 ",082,857 45,394,626 12,106,525 10,486,421 51 24 8 6 -6 23 34 35 -29 -6 11 43 13 6 47 Tolol-16 cities .. 8,560 $50,871,945 - 30 _16 84,580 $548,555,316 14 1,440.629 1,75.4,511 2,910,050 1,05 1,783 1,681,179 14,035,240 2,556,652 4,079,937 10 ' 61 -2 0 12 - 42 _ 22 - 25 3 552,665 -64 955 4 TH FEDERAL RESERVE DIS T R