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MONG£HLG)(

BUSINESS
FEDERAL

REVIEW

RES E R V E

Vol. 41, No. II

BANK

o

F

DALLAS

DALLAS, TEXAS

November 1,1956

SOUTHWESTERN AGRICULTURE IN TRANSITION
J. Z.

ROWE, Agricultural Economist
Federal Reserve Bank of Dallas

Significant changes occurred in southwestern farming and
ranching during the past quarter century. During this time,
agriculture experienced a severe depression, two wars, a pro·
longed drought, and the birth of numerous programs designed
to assist the farm business in weathering economic and na.
tural calamities. A growing population, the adoption of
technological improvements in agriculture - as well as in
nonagricultural industries, and a high level of general busi·
ness activity have resulted in far.reaching changes in farm·
ing and farm·family living.
The acceleration of the trend from a self· sufficing to a
commercial· type agriculture has resulted in the need for in·
creasingly larger amounts of cash to defray the costs of
family living items and farm production goods. As a result,
farmers have become more dependent upon other segments
of the economy to supply their needs and provide a market
for their products.
The Basis for Change

Much of the basis for the changes in American agriculture
had been laid prior to 1930. The establishment of agricul·
tural experiment stations and extension services and the in·
troduction of vocational agricultural training had provided
research and education to rural people. The foundation for
accelerating the rate of mechanization also had been laid.
The cumbersome tractors, adapted principally for heavy
work, were gradually being replaced with lighter, faster gen·
eral'purpose tractors, and a start had been made in equipping
them with rubber tires and mounted equipment.

Government programs designed to meet the problems of
low agricultural income probably stimulated some of the
changes in farming. Under the acreage control programs of
the Agricultural Adjustroent Administration of the early
• 1930's, farmers were anxious to increase acreages of high.
, profit crops in order to utilize equipment fully and obtain
the benefits of the programs. Th~ reduction in numbers of
croppers and share tenants was retarded during the early part
of the Agricultural Adjustroent Administration, apparently

because landlords were subject to loss of benefit payments if
they needlessly removed or discriminated against tenants.
A major stimulus which accelerated changes in agriculture
was the exceptionally heavy need for farm products during
World War II and the continuance of a high level of demand
for food and fiber following the cessation of hostilities. Short·
ages of agricultural labor, created by manpower require.
ments for the Armed Forces and defense industries, resulted
in further pressure to mechanize and combine farming units.
Farm Productivity

Output per farm worker rose sharply as those remaining
in agriculture utilized the advances of science and technology.
Increased farm labor productivity in the United States has
made it possible for one worker to supply almost 20 people
with agricultural products, which reflects an increase of about
nine persons since 194.0 as contrasted with an increase of
about seven persons during the 100 years prior to 1940. This
increased efficiency has resulted from many changes, which
often have been so gradual that they passed almost unnoticed.
Much of the gain in farm output in the Southwest has reo
sulted from the adoption of new varieties and hybrids, the
increased use of higher.analysis fertilizers and other soil·
conserving practices, the expansion of irrigation, the in·
creased timeliness of farm operations which results from
greater mechanization, and the utilization of acreages form·
erly devoted to the production of feed for work stock. The
transition in southwestern agriculture has resulted in changes
in the structure of farming and ranching and in rural living
that are perhaps irreversible.
One of the more important developments is the increased
size of farms 1 and the accompanying decline in numbers.
1 Tbe United States Bureau of the Census makes no distinction be·
tween farms and ranches ; thus, livestock ranches are included in the
general term "farms." All the land under the control or management
of one person or partnership is included as ODe farm. Control may be
through ownershjp, lease, rental, or cropping arrangement.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

MONTHLY BUSINESS REVIEW

162

PERSONS SUPPORTED BY PRODUCTION
OF ONE FARM WORKER

states experienced the same rate of growth. The acreage per
farm in Arizona increased sixfold; in New Mexico, it rose
over 2113 times; in Texas the acreage per farm almost
doubled; and farm sizes in both Oklahoma and Louisiana
increased about 80 percent. Between 1950 and 1954, the
average size of farm in the District increased 16 percent, compared with a 12-percent rise for the Nation.
The growth in average farm size for the District states was
not as rapid during the past few years as it was immediately
prior to and during World War II. During the 1935-45
period, the average farm size increased 55 percent; but during
the next 10 years, the acreage per farm rose only 35 percent.
Most of this difference in rate of growth, however, resulted
from the extremely large gains in Arizona and New Merico
- particularly during 1940-45.

SOUllct'U.8 .OIParIIllUI of A~rICllllu".

The size of farms in the District states has been growing since
1925, but it was not until a decade later that the trend toward
larger units accelerated. During much of this time, the total
land area devoted to fanning also was increasing, but not as
rapidly as the size of farms.
Land in Farms

In 1930, slightly more than half of the land area in the
District states was in farms. Since then, the land in farms
has increased more than a third, rising in 1954 to 73 percent
of the total land area in these states. The greatest increases
in the proportion of land in farms since 1930 have occurred
in Arizona, New Mexico, and Texas. Part of the gain reflected
an expansion in irrigation, but a portion resulted from a
more complete enumeration of farm lands in subsequent
censuses.
Under existing technology, the acreage in farms in the
District states in 1954, at 284,387,506 acres, probably is close
to the peak. Reclamation may provide additional acreage,
but widening and construction of roads and expansion of
industrial, recreational, and residential areas are likely to
result in a net reduction in farm land in the future.
The number of farms in District states, which reached a
peak of 944,751 in 1935, declined to 553,433 in 1954, or almost 40 percent. The average size of farm increased to 514
acres, being more tl,an double the size a quarter century
earlier."
Although the average size of farm increased steadily in
each of the District states from 1930 to 1954" not all of the
Because of changes in the census definition of a farm, the data
are not strictly comparable throughout the period j however, the
changes have not been great enough to obscure basic trends.
2

The exceptional gains in farm size immediately preceding
and during World War II partially reflected the rapid combination of units to take advantage of mechanization and to
offset farm labor shortages, as well as tl,e relatively profitable
operations resulting from rising farm product prices. More
importantly, however, the gain in farm size was the result
of substantial additions of grazing land in Arizona and New
Mexico. The changes among the various sizes of farms comprising the average have been even more significant than the
changes in the average size of farm. Studying only the trend
in average size does not pinpoint the important developments
that have resulted from the impacts of economic and technological forces.
Size of Farms

The size of the farm business in District states - as meas·
ured by acreage - has followed three broad trends. First,
there has been an increase in the proportion of farms with
fewer than 10 acres. Secondly, the proportion of small- and
medium-size farms (those Witll between 10 and 179 acres)
has been declining, with the largest decrease occurring in the
percentage of farms with fewer than 100 acres. Thirdly, the
proportion of the District's farms with 180 acres or larger
has increased, the highest relative gain occurring in the group
of farms with 260 acres or more.
The proportion of farms in the District states with fewer
than 10 acres has increased 2% times since 1930 and now
accounts for a tenth of the total. Most of these represent rural
residences for retired persons or part-time farms of workers
employed in off-farm jobs. This group of extremely small
farms may increase further, particularly if industry locates
in rural areas and provides employment opportunities. In
addition, as older farmers become eligible for social security
benefits, many of them may decide to retire to small acreages
to occupy their time and supplement their retirement benefits
with home-grown produce.
Farms with between 10 and 179 acres - including the traditional homestead size - accounted for only 56 pcrcent of
the total number of farms in the District states in 1954,

t

MONTHLY BUSINESS REVIEW

compared with over three-fourths in 1930_ More than half
of the decline in this group occurred among farms with fewer
than 50 acres, which generally are too small to be economic
units_ Many of these small tracts are subsistence farms, providing only part-time employment for the operator and his
family, and a substantial portion of the family's income is
derived from oIT-farm sources_
The problem of low farm income is most acute among
operators of farms within the 10- to 179-acre group_ In the
absence of supplemental income, the farm family's living may
be near subsistence levels_ The agricultural resources of operators of small units usually are insufficient to produce an
adequate volume of crops and livestock or to utilize fully the
labor of the farm family, except where highly specialized
production is feasible_ Production of high-value commodities, such as vegetables and dairy products, is one method of
overcoming the disadvantage of small-size farms_ There is a
limit to which this can be accomplished, because of location
or inadequate market outlets. Farms in the 10- to 179-acre
group may show some further decline in response to the need
for large-volume output at lower per unit costs.
In 1954, a third of the farms in District states had 180
acres or more, or about twice the proportion in 1930. The
greatest relative gain was made by farms with 260 acres or
over, particularly those with above 1,000 acres. The proportion of farms in the latter group has almost tripled since
1930, although they still comprise less than 6 percent of the
totaL The rising importance of farms with 180 acres or more
probably reflects efforts of farmers to take advantage of
mechanization and volume output.
The increased proportion of extremely large-size farms
(1,000 acres or more) is alarming to some people. Most of
these farms are located in areas where considerable acreage
is needed for a sufficiently large output to be economically
feasible_ The large-size farms are located primarily in the
low-rainfall areas in the western part of the District, where
extensive range livestock operations and wheat farming are
conducted. In 1954, about 70 percent of the farms with 1,000
acres or more in the District states were located west of a line
generall y extending sou thward from the northern boundary
of Oklahoma through Enid, Oklahoma, and San Antonio,
Texas, to the Rio Grande River.
The trend toward fewer small-size farms and the gain in
numbers of larger units are not phenomena of the post-Korean
period only_ The increase in the number of farms with 1,000
acrcs or more in District states between 1950 and 1954 was
only a fourth of that between 1935 and 1940 and about a
third of the increase between 1930 and 1935. The decrease
in numbers of farms of 10 to 179 acres during the 5-year
period cnded in 1954 was about the same as in 1935-40.
A further increase in the number of large farms is likely
as the economies of large-scale operations are more fully
realized_ Continued improvement in the design and operation of farm equipment and machinery may result in add i-

163

PERCENTAGE DISTRIBUTION OF TOTAL FARMS. BY SIZE GROUP

Five Southwestern States
sr.u group (Acres)
Under

to ..•.••......•

10 to 29 ••••• . ••••• .•
301049 ••• •• .••••• ••
50 1069 ••••. .• ••• . ••
70 to 99 •••..••••••••
10010139 •..••••••• •
14010179 •••••••••••
18010219 ...........
22010259 ••••••.••••
26010499 . •• ••.•••••
500 to 999 ••••••• •• ••
1,000 and over ••••••••
Tolal •• •• •.•••..••••

1930

1935

1940

1945

1950

1954

4_3
34.8

6.8
2.8
2.0

6_4
19.4
13.8
8.9
11.6
9.9
11.2
3.7
2.5
7.1
3.2
2.3

7_3
17_4
12.4
8.1
11.0
9.8
10.8
4.1
3.0
8.7
4.0
3.4

10_9
15_5
11.3
7.4
9.8
9_2
10.2
4.3
3.2
9.8
4.6
3.8

8.5
15.3
10.7
7.1
9.3
9.2
9.7
4.7
3.8
11.5
5.6
4.6

10.1
14.2
9.7
6.4
8.6
8.3
8.9
4.6
3.9
12.8
6.9
5.6

100.0

100.0

100.0

100.0

100.0

100.0

21.9
27.4

SOURCE: United States Sureau of the Census.

tional consolidation of holdings, but growth of large-scale
units is apt to be a gradual process.

It is difficult, if not impossible, to pinpoint any single
factor as being mainly responsible for the rate at which the
changes in the various sizes of farms have occurred. Mechanization, war-induced farm labor shortages, nonfarm employ.
ment opportunities, changes in farm profit prospects, weather
risks, and even farm programs have been factors influencing
the size of the farming unit. Generally, the average acreage
of all farms increased during the past quarter century - regardless of the principal product grown; thus, the factors
responsible for the trends in the size of farms apparently were
common to all types of farms. The changes in the proportion
of farms within the various size groups illustrate the fact that
agriculture can be quite dynamic in making adjustments to
conform to a different set of relationships.
Trends in the average acreage in farms are an imperfect
measure of the changes in the size of the agricultural business.
Acreages needed for economic family-size farms in the production of dry-land crops are different from those for irrigated crops; acreages of pasture needed in eastern parts of
the District for a given number of animal units are far below
requirements for the same number of livestock in arid western
areas_ Within the same general farming area, differences in
soils, topography, and types of enterprises - and even in the
skills and managerial ability of operators - will result in
variations in acreages needed for an economic farm unit.
The 1954 Census of Agriculture contains data on farms by
economic class in 1949 and 1954 which provide the distribution of farms in terms of gross value of sales_ Between the
years, the changes occurring in economic classes of farms
would be influenced greatly by relative changes in production
and prices.
Total agricultural output in the District states in 1954 was
a tcnth smaller than during 1949. This decrease resulted
from a 16-percent decline in crop output, which was only
partially offset by a I-percent increase in marketings of livestock and livestock products. Moreover, prices for all farm
commodities were 4 percent lower, inasmuch as a 9-percent
increase in crop prices was more than offset by a IS-percent
decline in livestock prices. Thus, it would be reasonable to
expect a reduction in the proportion of the farms in 195'4
with extremely large gross sales and an increase in the pro-

MONTHLY BUSINESS REVIEW

164

portion of those with a smaller dollar volume of marketings.
This was not strictly true.

FARMS BY ECONOMIC CLASS, 1954 AND 1949
Five Southwestern States
M percenta g e of

Value of Sales

The proportion of noncommercial farm s (part. time and
residential) in District states increased to almost 40 percent
of the total number of farms in 1954, or 5 percentage points
more than in 1949. In the Nation, these farms accounted for
about 30 percent of the total, or slightly less than in 1949.
The gain in importance of noncommercial farms in the South·
west partially reflects the rising significance of off-farm work
and the larger numher of farm families whose income from
other employment exceeded that received from sales of farm
products, although the smaller output and lower prices between the 2 years may have been a factor.
The proportion of noncommercial farms among the south·
western states in 1954 was the lowest in Arizona (33 percent )
and the highest in Louisiana (almost 46 percent). These farms
accounted for 38 percent of the total in both Oklahoma and
Texas and 4.3 percent in New Mexico. The proportions increased from the 1949 levels in all of the southwestern states
except Arizona.
In line with trends for the Nation, commercial farms Witll
sales of less than $5,000 in 1954 accounted for a smaller
proportion of all southwestern farms than 5 years previously.
On the other hand, the proportion of commercial farms in
the District states with sales totaling $25,000 or more i~­
creased slightly, and the percentage of farms with gross
marketings of $10,000 to 524,999 gained fractionally between
1949 and 1954. Excluding part-time and residential farms,
each class with sales of $2,500 or more in 1954 comprised
a larger proportion of total commercial farms than in 1949.
Almost 58 percent of commercial farms in 1954 had gross

-

I-N

All farms

Number
Class of fa rm,
IValue of products sold)

~

1954

COMMERCIAL FARMS ........ ... 335,088
Class 11$25,000 or more) . .. ... 20,309
Cia" illS 1 0.000-524,999). . .. 40,700
Cia" III 155,000-59,999) . • ... . 55,925
Clem IV ($2,500· $4,999) .. .. .. 76,024
Cia" V 1$1,200-$2.499) ...... 85,288
Clan VI 1$250·51,199) ... ..... 56,842
OTHER fARMS . ............... 219,007
Part-time' •................ . . 87,294
Residential l ieu than $250
value of products sold) . • . ..• 131,468
Abnormol (public Qnd private
2,(5
institutional forms, etc.) . . . • ..

All FARMS .................. . 554,095

Commerciolforms

1949

1954

1949

1954

1949

410,166

60.5
3.7
7.3

6".9
3.0
7.2

100.0

100.0

6.1

4.6

12.1

11.1

10.1

10.7

16.7
22.7

16.4
21.9

25.4

25.8
20.2

18,693
45,428
67,340

89,882
105,722
83.101
22 1,839
83,070

13.7

141.2

15.4

16.7
13.1
35 .1

10.3
39.5
15.8

13.1

138.177

23.7

21.9

592
632,005

.0
100.0

17.0

.1
100.0

1 form s with the 'Va lue of sQ les totQling $250 to $1,199 and with operators either reporting 100 days or more of off-farm work or reporting other income ex.ceeding the 'Value
of farm soles.
SOURCE: United States 8ureau of the Census.

sales of $2,500 or more, compared with 54 percent during
the previous census period.
The largest proportion of residential and part-time farms
and low·income commercial farms is located in the eastern
third of the District, where farms are small and nonfarm em·
ployment opportunities are relatively more numerous. For
example, over 72 percent of the noncommercial farms in
Texas in 1954 were located in Crop Reporting Districts 4, 5,
and 8, which have significant industrial development. These
tlu'ee crop reporting districts accounted for over half of the
commercial farms in the State. Approximately three-fourths
of the farms selling between $250 and $1,199 of products
were located in these three districts, as were two·thirds of the
farms with gross sales between $1,200 and $2,499.
In contrast, western Texas Crop Reporting Districts 1-N,
1-5, and 6 accounted for only 2 percent of the State's noncommercial farms and about 14 percent of the commercial
farms. However, fewer than 6 percent of the commercial
farms with sales between $250 and $2,499 were located in
these districts. Almost half of the Texas commercial farms
with sales of $25,000 or more in 1954 were located in the
three western crop reporting districts, compared with fewer
than a fifth of the total in the three eastern districts,

PERCENTAGE DISTRIBUTION OF FARMS, BY ECONOMIC CLASS, 1954

Texas

Crop Reporting

Di strict s

COMMERCIAL FARMS, 8Y CLASS [Value of products sold)
Crop
reporting
district
I-N ......
1-S ..... .

2 ........

CROP REPORTING
DISTRICTS OF TEXAS

3 ........
4 ....... .
5 ........
6 ........
7 •.......
8 ........
9 ........

Commercia I
forms

6.1
6.6
9.8
7.0
22.0

Class I

1$ 25,000
or more)

23.2
22.0

4.1
2.1
4.8
4.1
4.7

Closs II

14.3
18.8
11.1

'.2

13.3

15.2
1.0
5 .5
15.2
5.4
2.5
3.7

9.3
10.4
2.8
8.1

7.7
1.8
5.7
9.5
5.7
2.0
5.9

State ... 100.0

100.0

100.0

10 ·N .. . .
10- 5 .....

•••

Closs III

6.5
6.7
15.4

6.7
22.8
10.2

CIon V

Clau VI

3.4
3.1
13.3
6.9
28.3

1.5
1.7
7.6
9.3

0.8
.6
3.9
8.4

11.0

27.4
18.7

.9
6.6

.5
6.7

.3
5.3

10.6

16.4

19.2

6 .5
2.8
4.3

5.1
2.'
2.9

3.9
2.6
2.5

33.2
.3
3.5
20.7
4.4
2.3
1.9

100.0

100.0

100.0

100.0

Includes port-time, residential, and abnormal forms.
SOURCE: United States BureQu of the Census.
I

CloS! IV

1$10,000· 1$5.000. 1$2,500· 1$1,200. 1$250· Other
$24,999) 59,999 1 $4,999) $2,499) $1,199) fo rmsl

20.0

1.1
.9
3.3
7.6

..

17.9
" 1.8

3.1

12.6

7.7
1.7
1.9
100.0

~

MONTHLY BUSINESS REVIEW

As contrasted to the eastern crop reporting districts of
Texas, agriculture in the western part of the State is characterized by large farm and ranch units, more extensive irrigation, and topograpbic and climatic conditions favoring the
use of large-scale machinery_ Fewer opportunities for alternative employment and crop failure risks have prompted commercialization of agriculture to a greater extent than in the
eastern distriets_
One of the disturbing factors in the southwestern agricultural situation is that more than 40 percent of the commercial farms have gross sales below $2,500_ When production
expenses are deducted, little remains for family living, re payment of debts, or capital accumulation_ Although data
are not available on the net income of these low-income farms,
the average net income (including value of home consumption and rcn tal value of farm dwellings) for all farms in the
DistTict in 1954 totaled $2,263, or 22 percent less than in 1949_
Off-farm Employment
Fortunately, off-farm work and other sources have tended
to sustain the farm family's ineome_ During 1954., almost half
of the farm operators in the District states reported off-farm
work; of this group, two-thirds worked 100 days or more off
their farm s_ A quarter century earlier, only 29 percent of the
operators reported ofT-farm work, and fewer than a third of
these spent over 100 days in such employment_ While data
are not available on the amount of off-farm income reccived
by District farmers, 38 percent of the farm operators in 1954
had outside income exceeding agricultural income. In the
Nation, about 29 percent of the total net income of the farm
population was derived from nonfarm sources_
The rising trend in the proportion of farmers engagcd in
off-farm work is the result of pressures to supplement family
income and the attractiveness of alternative nonagricultural
cmployment. Some of the increase in off· farm work may be

DECREASE IN RURAL -FARM POPULATION
F IVE SOUTHWESTERN STATES AND UNITED STATES

g.
.

A.,.RIZO A

,

r;:LO~ISI

due to custom farm labor and employment on neighboring
farms, but a major proportion probably is the result of employment in nonagricultural j obs_ Since 1930, the farm
population in the Southwest has declined almost one-half, as
opportunities for nonfarm employment have increased. In
many instances, part· time off-farm employment may be the
fir st step before leaving the agricultural field_
The loss of farm population in many communities has resulted in rather severe adjustments in the bnsiness of merchants. Where expansion in nonagricultural segments occurred, adjustments were less severe since merchants were
able to shift emphasis to services and products needed by
nonagricultural customers. On balance, the increase in offfarm work and the smaller farm population probably have
resulted in a gain to the southwestern economy as a whole.
The enlargement of agricultnral holdings has made it possible
for farmers to increase efficiency and introduce economies,
and, therefore, to receive a larger proportion of the total agricultural income. For persons remaining on part-time farms,
snpplementation of the family's income through off-farm
employmcnt has resulted in a higher and more stable income
and has contributed to the growth of the economy.
Mechanization
Paralleling the decrease in the number of farms and the
farm population and the increase in thc size of farms and
off-farm work has been the striking growth in the usage of
tractors and auxiliary eqnipment, electricity, and fuel-driven
power units. Power equipment makes it possible for farmers
to plant, cnltivate, 811d harvest crops from larger acreages in
less time and with the same or lower labor requirements.
Since 1940, the number of tractors on farms in the District
states has increased 185 percent. The harvested acreage per
tractor in 1940 was 276 acres; but by 1954, it had been reduced to only 88 acres, or about two-thirds. The reduction
in harvestcd acreage per tractor does not indicate fully the
extent to which tractor power usage has risen, because of
the upward trend in sales of tractors with higher horsepower
ratings. In 1939, about 94 percent of the all·purpose farm
tractors sold in the Nation had belt horsepower ratings of
30 or below, compared with only 16 percent in 1954; approximately 45 percent of the tractors sold in 1954 were rated at
40 belt horsepower or above.

NA

r...~

rl
HEW M
.:;JCO

"'rCf"tQ~ of

165

.t

per'Oft. 011.1 loath ,~, b.g l""11I9 Qnd ." ~ ol.odl </.(:od • .
SOURC£ U. S . Ot por,m .ftI el Aorl~wlru".

Accompanying the higher tractor horsepower, auxiliary
equipment was developed which increased the capacity of the
operator to carryon the farm business. The larger and more
efficient machines permit the operator to make substantial
savings in labor, time, and energy - and often in costs of
production. In recent years, the use of other types of farm
cquipment has increased at a faster rate than that for tractors.
Although the number of farm tractors in the District states
rose a fifth between 1950 and 1954, pick-up hay balers incrcased 73 percent, corn pickers more than doubled, and the
number of field forage harvesters more than quadrupled.
Mechanical harvesting of cotton has increased steadily; in
1955, over a fifth of the Tcxas cotton crop was harvested
mechanically, or double the proportion in 1949.

MONTHLY BUSINESS REVIEW

166

The substitution of machinery for labor has been an al·
most continuous process in agriculture. As labor shortages
grew during World War II, farm operators increasingly
sought to introduce labor·saving equipment; however, war·
time scarcities of machinery retarded the rate of mechaniza·
tion. After hostilities ceased, the trend toward mechanization
accelerated as machinery became more plentiful and high
wages in the nonfarm segments drew more people from farms.
As mechanization of some of the more important south·
western crops - particularl y corn and cotton - is adopted
on a wider scale, the proportion of hired workers to family
workers may decline. Larger farm units and lower birth rates
of farm families are counteracting influences which may tend
to maintain the importance of hired workers in agriculture.
Many farm chores - especially in livestock productionrequire decisions and close attention which machine tech·
nology has not been able to supplant; however, mechanized
watering and feeding devices and other innovations are reo
ducing labor requirements.
Progress in mechanization and the adoption of improved
techniques in production and marketing have resulted in
more exacting requirements for successful farm operators
and workers. A modern farm needs alert, skilled workers to
make the most effective use of power equipment. The sizable
investment in much of today's equipment requires careful
and regular maintenance, and the high·speed machinery reo
quires expert operators. Obtaining and keeping good "tractor
men" remaios a problem of farm operators, as many workers
highly skilled in the use and care of farm machinery are also
well adapted to semiskilled and skilled jobs in nonagricultural
lines.
Reductions in numbers of workers needed to carryon farm
operations have resulted in improvement in communications
between the farmer and his workers and in the supervision
of tasks. As long as large numbers of workers are needed,
expansion in farm size under one management is complicated
unless an effective method of worker supervision is developed.
The use of large.scale power equipment for farm work per·
mits the operator to spend a greater portion of his time in
more productive farm management activities.

farmers owning land and renting additional acreage to en·
large their farm business increased from about 8 percent in
1930 to 21 percent in 1954. As a result, tenancy declined
steadily. Some tenants became farm owners, while others
moved out of agriculture or became farm laborers.
In 1954, about a fourth of the farms in District states were
under the management of tenants, compared with 60 percent
in 1930. Tenant farmers accounted for one of every three
farm operators in Louisiana, about one of every four ·in both
Texas and Oklahoma, and only slightly more than one of
every 10 farmers in Arizona and New Mexico.
The largest gain in the proportion of farm owners and the
greatest decline io the proportion of tenants in District states
occurred between 1940 and 1945, and by almost the same
amounts. During this period, agricultural prices and man·
power requirements for both the Armed Forces and defense
industries rose sharply. While the alternative employment op.
portunities in nonfarm jobs drew some tenants from farms,
the relative attractiveness of farm ownership provided those
with capital or credit the incentive for buyjng farms or en·
larging existing holdings. Also, military service was quite im·
portant in reducing numbers of tenants since, traditionally,
the younger farmers are those who rent as their first step
io owning land.
Farm operators under 25 years of age accounted for only
2 percent of the total farmers in District states in 1945, or
less than half the proportion in 1940 and a fifth smaller than
in 1930. In 1950 the proportion of these youthful farmers
increased slightly, but the recent census indicates that they
comprise less than 2 percent of the total. The proportion of
farmers between 25 and 34 years of age also has shown an
almost continuous decline sioce 1930. Farmers 45 years of
age and older consistently have gained in importance; in this

FARM OPERATORS. BY AGE
FIVE SOUTHWESTERN STATES

Management decisions of farmers are integrally related to
the tenure arrangements under which they operate. Under
the relatively high capital requirements of present· day farm·
ing, stahle tenure arrangements are desirable to justify the
accumulation of facilities and equipment for the efficient use
of resources. Stability of tenure is especially helpful during
times of natural adversity, such as drought, or wben addi·
tional capital is required to undertake adjustments in the
farming operations resulting from natural and economic
forces and - in some cases - governmental programs.
Farm Operators

During the past quarter century, the proportion of farm·
owner operators in the District states increased continuously.
In 1954, over half of the farms were operated by owners, com.
pared with fewer than a third in 1930. The proportion of

ODWalot . . .,..,tI....

souille£ U.' .Ouar1I11U! 01 ,.,rI,.lIurl.

167

MONTHLY BUSINESS REVIEW

group, the proportion of those 65 years and over rose from 8
percent of the total in 1930 to 17 percent in 1954.
The increase in the average age of farm operators is understandable in the light of changes that have occurred in both
agricultural and nonagricultural sectors of the economy. Advancements in nutrition, medicine, sanitation, and other fields
have contributed to a longer life span. However, retirement
programs among farmers have not been as widespread, nor in
effect as long, as have those for nonagricultural workers. An
amendment to the Social Security Law in the summer of 1954
extends coverage to farm operators for retirement benefits
under the Federal Old-Age and Survivors Insurance Program.
This coverage could significantly affect the relative ages of
farm operators in the future as many of the older farmers
participate in the program long enough to qualify for retirement benefits.
Traditionally, farmers have regarded land ownership as
a major factor in providing security in old age. The energies
and capital of a lifetime often have been used to acquire land
so that the farmer would have a place to live and an income
during his twilight years. Once his capital is invested in land,
active management may be continued as long as possible, in
the absence of supplemental sources of income, in order to
maximize the returns accruing from both ownership and
management_
With the expansion of employment in nonagricultural
sectors of the economy, the younger segment of the farm
population has been able to take advantage of alternative opportunities_ Young farmers have greater mobility than older
ones, who have considerable investment in land and equipment or deep-rooted ties in their communities. Improvement
of educational facilities in rural areas has provided young
people with broader backgrounds and greater skills useful
in nonfarm jobs_ Also, the increasing number of farm youths
entering college has tended to reduce the proportion returning to the farm.
Traditionally, the beginning farmer rents land to accumulate capital and experience needed for eventual farm ownership_ In many cases, father-son partnership arrangements are
made, so that the family farm can be handed down as a going
concern when the father dies or relinquishes active management. Since social security benefits soon will be available
to many older owner-operators, many farm properties may
become available to young replacement operators through
leasing or purchasing arrangements designed to minimize
capital gain taxes.
The changes in southwestern agriculture would have little
significance unless they make it possible for farm families
to increase their levels of living. The disparities in living
conditions between city dwellers and farm families have
narrowed gradually_The extension of electric and telephone
services into rural areas, construction of all-weather roads,
and improvement in educational facilities for adults and
youths have contributed to the betterment of rural living.
The reduction in the time needed to go from the farmhouse
to the courthouse has made it possible for rural families to

share in the advantages offered by larger urban centers and
yet retain the many advantages of rural living they find
enjoyable.
Indexes of the United States Department of Agriculture
show that the levels of living of Texas and Oklahoma farmoperator families were twice as high in 1954 as in 1930 and
almost three times higher in Louisiana. The improvements
made in levels of living in these three District states (data
are not available for Arizona and New Mexico) were at faster
rates than those for the Nation, although the levels of living
in Oklahoma and Louisiana remain below the national
average.
Summary

A comparison of the characteristics of southwestern agriculture today with those a quarter century ago indicates that
changes have been revolutionary. However, data in one period
as compared with those in another are only still pictures
rel1ecting events at particular moments; and if the motion
of events between the two periods is presented, it would indicate that the changes are evolutionary, rather than revolutionary. When changes occur rapidly, it is often more difficult
to comprehend the rate at which the transition is taking place
than to visualize the changes themselves. The impact of wars,
capriciousness of weather, introduction and application of
new technology, and ebb and How of economic forces within
the past two and a half decades produced a setting in which
rapid changes were inevitable.
The transition is as much the result of forces outside agriculture as those from within. The tremendous expansion of
industrialization and the resultant opportunities for employment; the exceptional demands born of wartime scarcities and
post-World War II aid programs; the improvements in transportation, communications, and services; and a prosperous,
growing population are factors which have influenced, and
will continue to influence, agriculture.
Many of the trends evident since 1930 are likely to continue. Some further decline in numbers of commercial farms
and farm employment and an increase in farm size may
occur; but with favorable weather conditions and an orderly
growth in over-all economic activity, these developments may
take place at a slower rate. There is a practical level near
which total farm employment is likely to stabilize, although
workers in agriculture may comprise a still smaller proportion
of the total lahor force than they do at present. Economic
pressures and new technology may result in a further increase
in the number of large farms, and the direction and extent
of this change will vary according to the location and type
of farm or ranch.
A surprisingly large number of farms produce only small
amounts of produce for market, and a significant proportion
of the operators has other income. The rising importance of
part-time farming has provided an expanding market for
garden-type tractors, custom work, and other agricultural
supplies and services designed for the special needs of this
group. On the other hand, the output of a large number of

168

MONTHLY BUSINESS REVIEW

farm operators not having supplementary income is inadequate for family needs. In this group, adjustments are needed
to improve efficiency and income, provide other employment,
or both_
Among the efficient commercial farms, the effect of the
changes has been to place more emphasis upon business management. Capital requirements are likely to continue at a
high level, and cash expenses may represent a rising proportion of the total costs of operating a farm; consequently, good
financial management will become one of the prerequisites
of a successful farmer. The past two decades were partially
characterized by the adaptation of power and other mechanical sciences to farming, and the future is likely to be characterized by the addition of chemistry and other physical
sciences. The development of systemic poisons, weed killers,
and antibiotics and the use of hormones may result in as
startling an achievement in production efficiency as the general-purpose tractor did_
The rapid expansion in manufacturing, trade and service,
and government employment in the Southwest in recent years
has tended to reduce agriculture's relative importance in the
total economy. In 1954, agriculture accounted for only 8 percent of total personal income, compared with about 18 percent
in 1930_ However, the share of income derived from any
industry does not reflect fully its importance to the economy.

Like the primary metals industry, agriculture supplies raw
materials to and is a customer of a multitude of secondary
and tertiary industries engaged in processing, manufacturing,
warehousing, transportation, distribution, finance, and services. Because of the interdependence of industries, the wellbeing of one influences others.
Aside from the industries furnished raw materials by agriculture, merchants, bankers, and others are aware of the importance of rural customers. In 1954, farmers in District
states spent $1,838,100,000 for farm production goods and
paid $148,000,000 in rent to nonfarm landlords and as interest on farm mortgage indebtedness. Depreciation on farm
capital amounted to almost $355,000,000. After deducting
these operating costs, southwestern farmers and ranchers had
a net income of $1,332,200,000 for family living or investment. Thus, agriculture in District states in 1954 was almost
a $4,000,000,000 industry.
The transition during the past quarter century and the
changes likely to occur within the foreseeable future point
toward a continuing dependence of farmers upon nonfarm
commodities and services to provide a substantial part of the
production items needed for profitable operations. Although
there may be a decrease in the numbers of farms and people
on farms, the aggregate dollar volume of purchases by
farmers in the Southwest is likely to be maintained.

MONTHLY BUSINESS REVIEW

169

REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS

Consumer buying at Eleventh
District department stores during September was 6 percent
be/ow that in August but was
slightly higher than in September 1955. Sales of consumer durable goods declined
sharply during the month and were at the lowest point
since February last year. Department store stocks
increased 4 percent during September and at the end
of the month were 3 percent larger than a year ago.
Furniture store sales declined 13 percent from August
and 1 percent from September 1955.
Agricultural prospects were improved slightly during October as a result of light to heavy rains over
most of the District. Fal/ harvesting of major crops,
except cotton in western areas, is virtually complete;
cotton production in the District states is indicated to
be 10 percent below output in 1955. Fall grazing
conditions as of Odober 1 were at all-time low levels,
and prior to the recent rains, cattle receipts at major
southwestern markets were exceeding those at the
same time a year ago.
Crude runs to refinery stills were curtailed during
September and early October in an effort to reduce
gasoline stocks, which are excessive for this time of
the year. Crude oil production in the· District and the
Nation decreased slightly during the first half of
October and was only a little above the year-earlier
average. Texas allowab/es for November production
were increased slightly.

The total dollar volume of sales at
department stores in the Eleventh
Federal Reserve District, after a less
than seasonal increase from July to
August, declined contraseasonally
during September and was only slightly higher than in September a year earlier. The month-to-month decrease was partially accounted for by two fewer trading days in September.
The sales index for September, adjusted for seasonal variation
and the number of business days, was 140, compared with
134 for the same month in 1955 and 148 in August. Cumulalive sales for the first 9 months of this year were 4 percent
higher than in the comparable period of 1955. In the first
half of October, department store sales decreased 9 percent
from the same period a year ago_
Sales in the soft goods deparbnents in September generally
showed moderate increases from a year earlier, while sales
in the consumer durable goods departments declined sharply
during the month and were at the lowest point since February
1955. Sales in the women's and misses' apparel and accessories departments were up 3 percent and 4 percent, respectively, from a year ago, while sales of men's and boys' wear
showed no change. Of selected major soft goods departments,
only piece goods and household textiles experienced a marked
decline from a year earlier, with sales down 7 percent. Yearto-year declines in the sales of important homefurnishings
departments in September ranged from 12 percent for both
furniture and floor coverings to 17 percent for housewares.
Sales of major household appliances and television sets were
17 percent lower than those of September 1955.
Instalment sales at District department stores, reflecting
the smaller volume of hard goods sales, were 11 percent lower
RETAIL TRADE STATISTICS

Nonagricultural employment in the District states
during September reached 4,144,300, a record high
for the second consecutive month. A seasonal increase
in school employment provided the largest gain from
August.

{Percentage chan;.}
NET SALES

Uno of trade
by area

Sept.

1955

Aug.

1956

DEPARTMENT STORES

The value of construction contracts awarded in the
District during September showed a downturn of 6
percent from August but was a.t the same level as a
year earlier. Both residential and "all other" awards
were below their levels in the previous month.

Totalloans and investments of the District weekly
reporting member banks rose sharply between September 19 and Odober 17, primarily because of the
$49,156,000 increase in holdings of Treasury bills.
Member bank reserves during this period averaged
$3,808,000 lower than in August, and free reserves
also declined.

STOCKS·

Sapt. 1956 from

Talai Eleventh District • • • •••••••••
Corpus Christi •••••••••••••••••••
Dallas •••••••••••••••••••••••••

fl Paso •• •••••• •• ••• • •••••••• ••
Fort Worth •••••••••••••••••••••

Houston •••••••• •••••••••• •••••
San Antonio ••••••••••• •••••••• •

Shreveport, La •• • • •••• ••••••••• •
Woco •••••••••••••••••••••••••
Other cities •••••••••••••••••••••
FURNITURE STORES
TOI(lI Seventh District •• •• •••••• • •
Amarillo ••••••••• •••••••••••• ••

Aultin •••••••••••••••••••• ••• ••
Oglla ••••••••••••••••••••••••••

HOU1ton •••••••••••••••••••••• •
Lubbock •••••••••••••••••••••••
San Anlonio ••••••••••••••••••••

Shreveport, La ••••••••••••••••••
Wichita Falls •••••••• • ••••••••••
Other cities •• o • • • • • • • • • • • • • • • • • 0
HOUSEHOLD APPLIANCE STORES
Total Eleventh Oish"id ••••••• •• • • •

Dallas ••••••

0 ••••••••••••••••••

'Slock. at end of month.

1
9
-2
4
2
0
0
0
-1
3

-6
_2
-3

-11

-7
-6

-11
-6

-5
-9

_1
9
_6
-22
10
8
_4
-2
-14
-6

_13
-2
-24
-6
-13
6
-14
-21
25
-10

-8
-18

-14
-21

Sept. 1956 from
9 mo. 1956
compo with
9 mo. 1955

4
8
2

..
6
6
0

3
5
7

2

Sept.

Aug.

1955

1956

3
-2
-A
4
16
5
-5
-1
9
8

4
2
3

8
_1
-3
2
0

..

4

..

7

5
-5

11

13
-14
10
14
-6
9

7

-5

D

-1
-20
11

-4

7

-4
2
8

170

MONTHLY BUSINESS REVIEW
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1947·49

=

Texas Crop Reporting Districts

UNADJUSTED
At••

SALES-Daily Q¥eroge
Eleventh District • . .• .•. ....•
Dallas . ••••.••.•..... .. •.•
Houston ••••••..••...•••• •
STOCKS-End of month
Eleventh District •. ... •• .••••

COTTON PRODUCTION

100)

lin thouland, of bole.-SOO lb. gross wt.,

AOJUSTEot

Sept. Aug. July Sept. Sept. Aug. July Sept.
1956 1956 1956 1955 1956 1956 1956 1955

Crop reporting district

140
134
ISS

138
126
152

129
120
149

131
149

140
127
152

148
143
162

152
US
170

125
147

163p 158

149

lS9r

154p 159

157

lSOr

134r

134r

1 Adiusled for seasonal variation.
r-Revise d.
p-PrellmlnClry.

in September than in the previous month but were 1 percen t
above the same month last year. Charge account sales,
although up 1 percent from August, were 3 percent lower than
a year ago. Cash sales showed a 9·percent decrease from
August but were up slightly from a year earlier.
Charge accounts outstanding increased seasonally during
September, bringing month·end balances to 6 percent above
both August 1956 and September a year ago. Collections
during the month amounted to 4,2 percent of first·of·month
balances outstanding, or 1 point below the August collection
ratio and 3 points below September a year earlier. Instalment
accounts outstanding at department stores continued prac·
tically unchanged during September and at the month end
were 6 percent above a year earlier. The instalment collection
ratio, at 14 percent, was the same as a month ago but was
2 points more than in September 1955.
Inventories at department stores rose during September;
at the end of the month, tl,ey were up 4 percent from a month
earlier and 3 percent from the same date last year. Total
orders outstanding at the end of September were 4 percent
larger than at the close of August but were 3 percent below
those at the end of September last year.
Furniture store sales in the District during September declined 13 percent from August, or more than seasonally, and
were 1 percent under the level of September 1955. Although
collections were down 4 percent, accounts receivable at the
end of September were unchanged from August and were up
5 percent from a year ago. Inventories at the close of September were 4 percent above both August and a year earlier.

1956
Indicated
October 1

I·N........................
'·S. . . .. . . . . . ... . . . . . . . . . ..
2·N........................
2·5........................
3... .. ............ . . .. .. .. .
4..........................
5·N........................
5·5.. ......................
6....... ...................

465
1,070
170
90
8
360
85
75
305

8·N. .. ...... . ... .. .. .. .•...
8·5. .. ....... ... .... . ... . ..
9..........................
10-N ... ... ....•..... . .....
10·5.. .. . . . ... . . • . . . . • ... . .
State. . . . ... . . . . . . . .. . . ..

7........... ............ ...

195~

80
135
165
50
393

379
1,024
273
264
23
642
145
94
269
33
163
69
238
40
383

512
1.097
221
179
21
447
76
75
261
26
142
217
192
67
407

123
104
62
34
35
56
59
80
113
27
49
196
69
125
103

3,460

4,039

3.940

86

9

SOURCes United States Department of Agriculture.

supplies impounded in Falcon Reservoir. Inadequate moisture remains the dominant feature of the agricultural situation in the District, and slow, general rains are needed to
replenish subsoil moisture supplies and stock water tanks.
The precipitation was especially helpful to early planted
winter grains and for germinating grain seeded in dry soils.
Hail and rain damaged cotton in some west Texas areas_ Lateplanted feed crops in the eastern part of the District were
benefited by the moisture and may provide additional forage
before frost.
Harvesting of 1956·crop cotton is virtually complete in
most of the District except western areas. Pulling of lightyielding dry-land cotton is well advanced in northwestern
Texas, and harvest of irrigated cotton is past the halfway
mark. Cotton grades in the High Plains have been good during the early part of the season, increasing returns to farmers.
Harvesting is at a peak in the irrigated areas of the TransPecos of Texas and in Arizona and New Mexico. The generally
dry, open weather and premature opening of bolls resulting
from drought have speeded harvest of this year's crop_ Cotton

Registration of new car sales during September in Dallas,
Fort Worth, Houston, and San Antonio was down 38 percent
from a year earlier and 22 percent from August. New car
sales in the four cities for the January-September period were
22 percent less than in the same period of 1955.
Light to heavy general rains extending from the eastern sections of
New Mexico eastward during mid·
October provided encouragement to
drought·harassed farmers and waterconscious city dwellers. Precipitation generally was heaviest
in the west-central, southern, and upper coastal Texas counties, although local areas received rain in cloudburst propor·
tions. Runoff in southern Texas slightly increased the water

1956
as percent of
1955

1955

CROP REPORTING
DISTRICTS OF TEXAS

171

MONTHLY BUSINESS REVIEW
CROP PRODUCTION

LIVESTOCK RECEIPTS

Texas and Five Southwestern Slates

(Number)

lin thousands of bUlhels)

SAN ANTONIO MARKET

FORT WORTH MARKET
TEXAS

FIVE SOUTHWESTERN STATES'

1956

Class

E
stimated
October 1,

1956

Crop
Cotton

J

• • •• • • • • •

Corn • .. •• • •...•
W inter wileat •• • o

Ools ••.. • •... . •
Sarley ••• •• . • • •

Rye ••• • •.

0 "

•• •

Rices •••••• • • •••
Sorghum grain •. •
Flo :ueed • • •••..

Hay' .•...•.... •
Peanllts5 • • • • ••••

Irish potctoesS • ••

~:c~~l~t.~t~~~:.:

3,460
25,528
28,27 5

21,998
2,480
184
10,841
93,480
95
1,541
88,550
1,286
594
27,500

~m

Sept.

Estimated
Average

1955
4,039
48,288
14,326
23,590
2,072
124
14,880
148,309
96
2, 261
239,235
1,760
1,914
38,000

1945-54
3,518
44,209
50,722
27,090
2,040
244
11,837
82,103
911
1,660
252,600
11,474
11,397

30,565

October '.
1956

5,455
47,483
95,129
39,052
17,023
910
22,185
107,465
147
4,921
140,675
3,155
4,674
53,000

Average

1955

1945-54

6,078

5,256

77,273
41,204
40,518
17,181
691
28,030
175,296
174
6,255
374,055
3,787
7,932
99,460

78,089
131,765
44,837
10,589
822
23,476
97,420
',293
4,951
366,517
'3,382
16,369

65,595

1 Arizona, Louisiana, New Mexico. Oklahoma, and Texas.
2 In thousands of bales.
S In thousands of bags containing 100 pounds each.
~ In thousands of tons.
, In thousands of pounds.
15 In tnousands of hundredwe ight.
7 AVerage, 1949· 54.
SOURCE; United Stales Oepartment of Agriculture.

ginnings prior to October 1 in the District states are estimated
to be 41 percent of the prospective crop, compared with 31
percent of the 1955 crop ginned as of the same date a year
ago.
The 1956 cotton crop in the Nation is estimated, as of
October 1, at 13,268,000 bales, or 153,000 bales more than
the month-earlier forecast but 10 percent below the outturn
in 1955_ The indicated yield of 407 pounds of lint per harvested acre is second only to the 417 pounds harvested a year
ago, In the District states, prospective production is placed
at 5,455,000 bales, which is 20,000 bales higher than was
indicated on September 1 but is 10 percent below production
last year, The October 1 estimates place prospective output
higher than a month earlier in Arizona and Louisiana but
5,000 bales lower in both New Mexico and Oklahoma.
The Texas cotton crop is estimated at 3,4,60,000 balesunchanged from the September 1 indication but 14 percent
below the 1955 outturn. Production is below average in all
dry-land districts except the Coastal Bend, where the crop
made excellent progress during the early part of the season.
Above-average output is expected in irrigated districtsespecially in the Trans-Pecos area, where a record crop is
being harvested, Indicated lint yield per harvested acre in
the State is placed at 266 pounds, compared with 281 pounds
for the 1955 crop.

102,862

Cattl ••••••••.•.
Calves ••••••..•
Hogl ...... . ....
Sheep .••....•.•

31,8~7

44,147
84,875

Aug.

1956
112,125
31,076

41,8~0

43,3~1

58,993

104,627

1956

26,263
18,227
3,873

24,312
27,544
3,222
'39, 807

Aug .

1955

1956

21,417

68,832

Sept.

Sept.

34,033

126,720

27, 979

4,472
136,159

I Includel goats.

fifth below last year, The drought-stricken peanut crop is
estimated to be only a third as large as the 1955 production,
and hay output is indicated to be a fifth less.
Inadequate moisture is curtailing activity in Texas commercial vegetable areas. Light to heavy rains during midOctober were beneficial, but crops are making slow development in much of south Texas, Plantings of fall and early win·
ter vegetables in the Laredo, Winter Garden, and Eagle Pass
areas are making good progress, Production of commercial
fresh vegetables for fall harvest in Texas is estimated, as of
October 1, to be 27 percent ahove last year's output. Plantings of all fall-harvested vegetables are lower than a year
earlier, except the Panhandle carrot crop.
A small volume of citrus fruits is being shipped from the
Lower Valley, but the fruit is comparatively small and is
sizing slowly, Texas citrus production for the 1956-57 season
is forecast, as of October 1, at 3,500,000 boxes of grapefruit
and 2,300,000 boxes of oranges, Total citrus output in the
State is expected to be 53 percent larger than it was in 195556 and the highest since the 1951 freeze.
Fall grazing conditions in District states are at all-time
low levels. According to the United States Department of
Agriculture, range feed conditions in Texas and Oklahoma
on October 1 were the lowest of record - even worse than
during the 1934 drought; conditions in New Mexico were
equal to the all-time low in 1934; and those in Arizona were
the worst since 1924. October rains in scattered areas provided some encouragement, but most ranchers face a severe
feed shortage unless sufficient moisture is received to bring
out winter weeds and grasses_ Receipts of cattle and calves at
major southwestern livestock markets in September were 38
percent larger than during the same month a year earlier;
sales of sheep were 45 percent greater.
FARM COMMODITY PRICES

Harvest of other major field crops in the District is rapidly
coming to an end, Combining of grain sorghums is virtually
complete in the High Plains of Texas and New Mexico, with
yields generally satisfactor y in irrigated areas but poor on
dry-land acreages. The output of both corn and grain sorghums in District states is placed, as of October 1, at 39 percent below the oulturn in 1955. In Texas, corn production is
estimated at 25,528,000 bushels, or only slightly more than
half last year's production and the smallest crop in over 80
years, Unusually low yields and the smallest harvested acreage
since 1875 account for the short crop, Harvesting of rice is
virtually complete in District states, with the outturn being a

Top Prices Paid in Local Southwest Markets

Commodity and market
COTTON, Middling 15 / 10·inch, Dalla . ....
WHEAT, No. I hard, Fort Worth ••• .....•
OATS, No.2 white, Fort Worth . • . • .. . ..•
CORN, No.2 yellow, Fort Worth . . . •. . . .•
SORGHUMS, No.2 yellow, Fort Worth . .••
HOGS, Cnolce, Fort Worth .. .. .•. . .... . •
SlAUGHTER STEERS, Cnoice, Fort Worth . •.
SLAUGHTER CALVES, Choice, Fort Worth • •
STOCKER STEERS, Choice, Fort Worth •. ..•
SlAUGHTER SPRING LAMBS, Cnoice,
Fort Worth .•. .. •.•.•.. .. •• • • . ...• ..
BROILERS, south T.xas ••• •• .. •.• .. •.•...

We.1e ended
Unit Oct. 22, 1956

lb.
bu,
bu,
bu,

$

_3280
2.53Y2
1.02!4

1 .64~

Comparable Comparabl.
week,
weak,
pravioul
previous
month
y.or

$

.3275
2.52

25.50
19.00

23.00
20.00

cwl,

cwt.
cwt.

19.00

19_50

20,00
.18

20.00
.18

cwt.

cwt.

Ib,

19.00

_3275
2.41 Y,

1.80
2.37
16.75

2.46
16.50
201.00

cw!o

$

.85
1,53
2.05
15.50

.95Y,

21.00
19_50
.24

MONTHLY BUSINESS REVIEW

172

The index of prices received by Texas farmers and ranchers
at mid·September is placed at 248 percent of the 1910·14
average, reflecting declines of almost 1 percent from a month
earlier and nearly 2Yz percent from a year ago, according to
the Department of Agriculture. Lower prices received for
cotton, cottonseed, peanuts, Irish potatoes, sweet potatoes,
some commercial vegetables, beef cattle, and chickens more
than offset increases in prices for hay, all grains except sorgo
hums, calves, eggs, milk sold at wholesale, and wooL The
all· crops index was 243 percent, or 2 percent lower than a
month earlier but unchanged from a year ago. The livestock
and livestock products index - at 255 percent of the average
- rose 1 percent from mid.August but was 5 percent below
the level on September 15, 1955.
The sharp expansion in loans and
investments at Eleventh District
weekly reporting member banks be·
tween September 19 and October 17
was moderately smaller than in the
corresponding period last year, and the composition of the
changes was markedly different. This year, the expansion was
dominated by an increase of $49,156,000 in holdings of
Treasury bills, which was occasioned by the purchase of the
special issue of bills dated October 17 by credit to Tax and
Loan Account. The net increase of $8,679,000 in loans reo
flected the sharp increase in interbank loans (mostly Federal
funds) and the more moderate gains in real· estate loans,
loans on securities, and "all other" loans, which were only
partially offset by the substantial decline in commercial and
industrial loans.

CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES

Eleventh Federal Reserve District
(In thousands of dollars)

Item

Oct. 17,
1956

Oct. 19,
1955

Sept. 19,
1956

ASSETS
Commercial, industria l, and agrieulturalloons ••• $1,518,445 $1,513,515 $1,533,205
1,486,971
1,501,306
Commercial and industrial loansl •••••• •• •••
31,474
Agriculturol loans l •• •• ••• • ••.••••••• •• •••
31,899
28,657
16,590
24,359
Loans to brokers and dealers in securities ••.. ••
145,190
118,763
145,380
Other loans for purchasing or carrying securities.
218,221
205,166
214,259
Real-e'tate loans ••.•.••••••••• . •.•..•.•..•
25,832
13,035
8,540
Loans to bonks • • •• ••• ••• . •••••••••••••••••
579,530
528,539
578,435
AU other loons ••••••• • ••••••••••••••••••••
Gross loons •• • ••••• •.•••••••• .. ••••• •••
Leu reserves and unallocated chorge·offs ••

2,5 15,875
35,821

2,395,608
25,226

2,504,178
32,803

Net loans ••••••••••••••••.•••••••••••••

2,480,054

2,370,382

2,471,375

U. S. Treasury bills • •••••• ..••••.•••• ••• ••••
U. S. Treasury certiflcates of Indebtedness ••••••
U. S. Treasury noles ••••••• • ••.•••••.•...•••
U. S. Government bonds [inc. gtd. obligations) ••
Other securities • •• •• ••• • •••••••••• •• •• ••••

87,148
70,949
220,303
796,930
24 1,725

39,318
74,143
258,271
834,909
248,547

37,992
76,943
213,024
801,932
237,606

Total investments ••. ••.•• .• ••• •••••••••••
Cash items in process of collection ••.•.• ••••••
Balances with banks in the United States •••••••
Balances with banks In foreign countries •••••••
Currency and coin .• ••..•••.••••••• •••••• ••
Reserves with Federal Reserve Bank ••••••• ••••
O ther assets •• ••• ••••• ••••••••• ••• •••••• ••

1,417,055
442,123
523,437
1,704
47,523
524,651
162,703

1,455,188
379,441
425,810
1,771
47,853
596/2 55
139,886

1,367,497
436,429
518,053
1,347
47,859
567,979
157,924

TOTAL ASSETS ..... . .............. ...

5,599,250

5,416,586

5,568[463

LIABILITIES AND CAPITAL
Demand deposits
Individuals, partnerships, and corporations ....
United States Government •••• • •• •• • . •••••
States and political subdi visions • •••••••••••
8anks in the United States .................
8anks in for eign countries •••••••••••••••••
Certifled and officers' checks, etc•••••••••••

2,862,962
127,928
155,435
953,287
19,807
70,307

2,837,590
131,640
180,170
861,131
18,011
66,041

2,838,267
91,911
168,172
953,837
19,285
66,893

Total demand deposils •••• • ••••••••••••

4,189/726

4,094,583

4,138,365

Time deposits
Individuals, partnerships, and corporations ••••
Unite d States Govemment ••••••••••••••••
Poslal savings ••••••••••.•••••••••••••••
States and political subdivisions ••••••••••••
80nks in the U. S. ond foreign countries ••••••

724,229
12,240
452
130,745
7,282

698,465
11,874
452
118,431
2,025

72 0,854
12,229
452
133,550
7,185

Toto I lime deposits ••••••••••••• • ••••••

In the same period a year earlier, the banks were increasing their earning assets; and the gaius were concentrated in
commercial, industrial, and agricultural loans, "all other"
loans, and Treasury certificates - the latter reflecting the
type of seasonal borrowing effected by the United States
Treasury. Moreover, in the third quarter of 1955, bank

874,948

831,247

87.4,270

Total deposits ••••••••••••••••••••••
Bills payable, rediscounts, etc ................
Atl other liabililies •• •• •• •• • • • • ••••••••••• ••
Tolal capitol accounts •••••••• •• •••••••• ••• •

5,064,674
19,700
83,216
431,660

4,925,830
40,200
61,910
388,646

5,012,635
44,400
85,172
426,256

TOTAL LIABILITIES AND CAPiTAL ••• ••• ••

5,599,250

~416,586

5,568,463

I Prior to January 4, 1956, agriculturalloanl were 1'101 reported separately. Comparable
year-earlier figures will be shown as they become available.

credit of the weekly reporting member banks advanced more
rapidly than during the same period of 1956.

CONDITION STATISTICS OF ALL MEMBER BANKS

Eleventh Federal Reserve Di$frict
(In millions of dollars)

Item

Sept. 26,
1956

Sept. 28,

1955

Aug. 29,
1956

ASSETS
loans and discounts •••••••••••••••••••••••••••
United Stctes Government obligations ••••••••••••
Other securities •••••••• ••• ••• ••• •••••••••••••
Reservet with Federal Reserve Benk •••••• • •••••••
Cash In vault e •••••••••••••••••••••••••••••••
Balances with banks in the United Stales ••••••••••
Balances with banks in foreign covntries e •••••••••
Cash items in process of collection •••••••••••••••
Other ouetse ••••••••••••••••••••••••••••••••

$3,893
2,312
600
940
109
1, 158
2
506
218

$3,711
2,337
575
945
159
959
2
357
186

$3,881
2,297
596
985
123
966
2
358
220

TOTAL ASSETSe •••••••••••••••••••••••••••

9,738

9.231

9.428

L1A8Il1TIES AND CAPITAL
Demand deposits of banks •••• • •••• ••• •• •••••••
Other demand deposits •••••••• • •••••••• •••••••
Time deposits • •• ••••••••••••••••• • •• • •• •• •• ••

1,179
6,309
1,388

981
6,186
1,292

1.003
6,195
1,387

Total deposits • ••••••••••••• ••••••••• • •••••
Borrowing s e • ••• •• ••••••••• •• •••••• •• • •••••• •
Other liabilitiese •••••••••••••••••••••••••••••
Total capitol accountse ••••••••••••••••••••••••

8,876
28
101
733

8,459
34
71
667

8,585
17
96
730

TOTAL LIABILITIES AND CAPITAle ••••••••••••

9,738

9,231

9,428

a-Estimated.

Between September 19 and October 17, all but a minor
part of the $52,039,000 deposit increase was channeled
through demand deposit accounts. United States Government
demand balances showed the largest growth, as the banks
credited the United States Government with the proceeds of
the special Treasury bill awards. The balances of individuals
and businesses also were replcnished, but state and local
governments claimed part of their checking account balances.
During the recent 4-week period, the weekly reporting memo
ber banks repaid $24,700,000 of indebtedness.
In the 4-week period ended October 17, Eleventh District
member banks experienced a reserve drain of $58,273,000.
Commercial and financial transactions led to an outAow to
other districts of $102,550,000 in reserve balances. Local
Federal Reserve credit - float and member bank borrowing
- contracted by $24,430,000, and the flow of currency into
circulation absorbed an additional $10,766,000 of reserve

173

MONTHLY BUSINESS REVIEW
CHANGES IN fACTORS AFFECTING MEMBER BANK RESERVE BALANCES

RESERVE POSITIONS OF MEMBER BANKS

Eleventh Federal Reserve District

Eleventh Federal Reserve District

(In thousands of dollars)

(A'f'oraijlts of dolly Aijure •• In thousands of dollars)

CHANGEI
... weeks end.d
Oct. 17, 1956
-$ 24,430
102,5 50
+
79,334
10,766
39
+
178

+$ 11,045
- 913,457
+ 837,573
+
29,930
50
+
12,349

-$ 58,273

-$ 22,510

FACTORS

Fede ral Roserve credit-local ••••••••••••. .•.• .•
Interdistrict commercial and flnancial transac tions •• •
Treosury operations ••••••••••••••••••••• • ••• • •
Currency transactions •••••• •• •.••••••••••••••.•

Other deposits at Federal Reserve Bank •••• .. ••.•

Other Federal Reserve accounts • . •••• . ••• ...• • .•
RESERVE BALANCES

September 19, 1956 •• • • • ...•..
October 17, 1956 •••..........•

+

5982,823
$92.11,550

1 Sign of chonge indicates effect on resene balances.

funds. Treasury transfers, the leading expansive factor duro
ing the period, released $79,334,000 in reserve balances.
Daily average gross demand and time dcposits at all memo
ber banks in the District rose in September. At $7,388,.
782,000, the average of gross demand deposits reflected a
monthly increase of $178,339,000, about three· fifths of which
occurred at reserve city banks, and an increase of $193,·
203,000 over the year-earlier level. Daily average time de.
posits registered a monthly gain of $7,439,000 in September
and an increase of $117,688,000 over the average for Sep.
tember 1955. Nearly all of the August·September increase
in time deposits occ urred at country banks,
Membcr bank reserves averaged $1,008,252,000 in Sep.
tember, Or 3,808,000 below the August average. Required
reserves rose $7,297,000, however, and the combination of
larger required balances and the loss of reserve funds pro·
duced an $11,105,000 decline in excess reserves, Member
bank borrowings from the Federal Reserve bank declined ,
and average free reserves (excess reserves minus borrowings
from the Federal Reserve bank) decreased to $40,937,000,
or $4,187,000 below August,
The loss of reserve funds , decline in excess reserves, and
reduction in free reserves during September occurred entirely
at COWl try banks, as the reserve positions of reserve city
banks showed a slight improvement. At these banks, a
$3,623,000 monthly gain in reserve funds more than covered
the smaller increase in required reserves, and average excess
reserves rose 897,000. As reserve city banks reduced their
borrowings from the Federal Reserve bank by $6,072,000,
their net borrowed reserves declined from $8,977,000 in
August to $2,008,000 in September, In contrast, free reo
GROSS DEMAND AND TIME DEPOSITS Of MEMBER BANKS
Eleventh Federal Reserve District
(Averages of daily figures . In thousands of dollors)
COMBINED TOTAL

Gross
Dote

d ema nd

Time

RESERVE CITY BANKS

Gross
demand

Item

September
1956

September
1955

Augult
1956

RESERVE CITY BANKS
Reserve balances •••••••••••••••••
Required reserves •••• • • ••• •••• •••
Excess reser'f'es ••••••• •• •••• • ••••
Borrowings •. • •••••••••••••••••••
Free reserves ••••••••••••••••• , ••

$ 564,133
551,721
12,412
14,420
-2,008

$556,992
545,790
11,202
26,576
-15,374

$ 560,510
548,995
11,515
20,492
-8,977

444,119
395,818
48,301
5,356
42,945

435,508
388,399
47,109
11,813
35,296

451,550
391,247
60,303
6,202
54,101

1,008,252
947,539
60,713
19,776
40,937

992,500
934,189
58,311
38,389
19,922

1,012,060
940,242
71,818
26,694
45,124

Dec. 28, 1955Od. 17, 1956

Time

COUNTRY BANKS

Gross
demand

Time

Sept. 1954...• $7,086,193 $1,081,850 $3,499,932 S600,926 $3,586,261 $480,924
Sept. 1955 . ••• 7,195,579 1,271,089 3,517,182 748,666 3,678,397 522,423
May 1956 • • • • 7,132,519
1,363,058 3,454,927 766,439 3,677,592 596,619
June 1956 ... .
7,150,377 1,369,915 3,493 ,663 767,137 3,656,714 602,778
July 1956 ••••
7,271,859 1,380,093 3,579,411 770,067 3,692,448 610,026
Aug. 1956 •••• 7,210,443 1,381,338 3,529,320 764,016 3,681,123 617,312
Sept. 1956.... 7,388,782 1,388,777 3,641,972 764,478 3.746,81 0 624,299

COUNTRY BANKS

Reser'f'e balances •••••••••••••••• •
Required reSer'f'8s ••••••••••••••••
Excess reser'f'es ••••••• • •• ••.• ••• •
Borrowings • •••••••••••••••••••••
Free reser'f'es •• ••• •••• •••••••••••
MEMBER BANKS
Reserve balances •••••••••••••••••
Required reserves ••• ••• • ••• ••• •••
Excess reserves •••••• ••••••••••••
Borrowings ••••••••••••••••••••••
Fr•• r.serves ••••••••••••••••••••

serves of country banks decreased from $54,101,000
August to $42,945,000 in September.

III

Earning assets of the Federal Reserve Bank of Dallas
increased $5,298,000 during the 4 weeks ended October 17.
This increase featured a $10,888,000 addition to the bank's
holdings of Government securities, partially offset by a
decline of $5,590,000 in discounts for member banks, On
October 17, earning assets were $44,406,000 below the
level of October 19, 1955. Gold certificate reserves declined
$12,954,000 during the 4 weeks to a total of $720,217,000,
or $8,805,000 below the amount on October 19 last year_ At
BANK DEBITS, END-Of-MONTH DEPOSITS
AND ANNUAL RATE Of TURNOVER Of DEPOSITS
(Amounts In thousands of dollars)
OEPOSIT5s

OEIIITS l
Percentage
change from
Area

September
1956

ARIZONA
Tucson ...... ........ $ 139,237
LOUISIANA
64,292
Monroe •• •••••••• •••
245,389
Shreveport • •••••••••
NEW MEXICO
Roswell •••••••••••••
26,185

Annual rat. of turnover

Sept. Aug.
1955 1956

Sept.30,
1956

Sept. Sept. A ...
1956 1955 1956

98,850

17.0

16.7

18.2

2
-1

50,543
186,576

15.7
15.8

16.4
15.6

15.6
15.8

-2

-1

26,378

11,9

12.2

11.9

70,664
144,501
147,643
134,025
172,440
16,580
1,902,607
215,851
628,221
85,128
2,109,105
20,834
120,317
51,798
,U,443
431,662
18,733
74,659
84,405
91,513

5
-8
6
7
10
-5
-3
-3
6
6
7
6
-5
_4
0
-7
0
3
-4
-6

-5
-12
0
-3
-6
11
-7
-13
-8
-22
-7
_2
3
-12
-1
-13
-1
-1
-5
-8

58,306
104,856
112,343
102,423
109,644
21,735
993,328
132,787
372,319
73,696
1,233,974
18,972
89,165
43,967
45,900
341,405
16,459
58,428
65,173
103,459

14.6
16.7
15.7
15.6
18.8
9.2
23.3
19.9
20.3
13.9
20.6
13.3
16.6
14.0
11.6
15.0
13.4
15.5
15.6
10.7

13.7
17.6
14.3
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

15.5
18.8
15.6
15.8
20.2
8.5
25.6
23.2
22.0
18.6
22.3
13.6
16.3
16.0
11.9
17.0
13.6
15.5
16.6
11.6

Tolal-24 cities ••.••.• • $7,040,232

2

-7

$4,460,686

19.0

18.8

20.6

TEXAS

Abilen •••••••• • • ••••
Amarillo ••••• • ••••••
Austin •••••• ••••• •• •
Beaumont ••• •• ••••••
CorpU$ Christi ••••••••
Corsicana •••••••••••
Dallal • •••••• • ••••••
B Paso • ••• •••••••••
Fort Worth •••••• ••••
Galveston • •••.••••• •
Houston • •••.•. •.•••
Loredo •••••••••••••
Lubbock ••••••.•.•••
Port Arthur • •• •••• .••
Sen Angelo •••••••••
Scln Antonio ••••• ..••
Texarkana ' ••••••.••
Tyler ..... ..... .....
Waco ••••. •••••••••
Wiehita Falls •••••• . •

6

-8

8
2

$

~

1 De bits to demand deposit oCtounts of individuals, partnerships, and corporations and
of slates and political subdi"';sions.
: Demond deposit accounts of individua ls, partnerships, and corporations aod of states
and politica l subdivision$.
~ These Agures include only one bonk in T.xarkana, Texas. Total debits for all bonks In
Texarkano, Texas-Arkansas, Including two bonks located In the Eighth District, amounted to
$40,048,000 for the month of September 1956.

174

MONTHLY BUSINESS REVIEW
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS

CRUDE OIL, DAILY AVERAGE PRODUCTION

(In thousands of dollars)

(In thousands of barrels)

Oct. 17,
1956

Item

Oct. 19,
1955

Sept. 19,

Change from

1956
September September

Total gold certificate reservos., •••.•.......•
Discounts for member banks •••..•.••.••••.•
Other discounts and advances •••••• •.••.•.•
U. S. Government securities •••..••. .....••.•
Totol earning assets •••••.................•
Member bank reserve deposits .•••. ...•••..•

$720,217
10,361

$ 729,022

948,289
958,650
924,550

Federal Reserve notes In actual circulation •••••

718,.531

627
961,274
1,003,056
991,626
718,OU

o

41,155

$733,171
15,951

o

937,401
953,352
982,823
710,049

$718,531,000 on October 17, the bank's Federal Reserve
notes in actual circulation reflected an increase of $8,482,000
during the 4·week period and an increase of $517,000 over
a year earlier.
Primarily because of the smaller number of business days
in September, bank debits declined in 20 of the District's
24 reporting centers. For all 24 centers, bank debits in
September were 7 percent below August but 2 percent above
the level of September 1955. The annual rate of deposit
turnover in September was 19.0, compared with 20.6 in
August and 18.8 in September 1955.

NEW MEMBER BANK

The KeUy Field National Bank of San Antonio, San
Antonio, Texas, a newly organized institution located
in the territory served by the San Antonio Branch of
the Federal Reserve Bank of Dallas, opened for busi.
ness October 15, 1956, as a member of the Federal
Reserve System. The new bank has capital of $300,000,
surplus of $200,000, and undivided profits of $100,·
000. The officers are: B. B. McGimsey, President;
Wm. F. Holder, Executive Vice President; and Wm.
I. Bowman, Cashier.

The Nation's petroleum industry
successively cut back refinery ac·
tivity during the latter part of Sep.
tember and early October to prevent
a further build·up of gasoline stocks.
However, such reductions in refinery activity were not
sufficient to allow a reduction in gasoline stocks because of
the need for enlarging fuel oil inventories. Gasoline stocks,
much above last year, are considered excessive by industry
sources and have exerted pressure on gasoline prices in
many areas.
Crude oil production in the District, averaging 3,291,000
barrels per day, decreased slightly during the first half of
October but was 1 percent greater than a year ago. Texas
allowables for Novemher production were increased 72,986
barrels per day, although the number of producing days
remains at 15. Crude oil production in the Nation during
early October, at 7,003,000 barrels per day, was 1 percent
below September but 3 percent above the average of a year
earlier.

Area

ELEVENTH DISTRICT ••••••••
Tellos ..................

Gulf Coast ............
West Texas ...........
East Tex.as (proper} .. . ..
Panhandle ••.•......••
Rest of Siale .... .....•
Southeastern New Mexico .•
Northem Loui.uana ..•••.. •
OUTSIDE ElEV~TH DISTRICT.
UNITED STATES ••••.•....•.

August

September

1955

1956 1

1955'

1956 1

3,318.9
2,959.6
5917
1,224.5
202.1
100.8
840.6
237.9
121.4
3,727.4
7,046.3

3,128.9
2,785.9
601.2
1,073.6
210.0
93.7
807.4
219.6
123.4
3,601.7
6,730.6

3.379.1
3,025.6
611.9
1,254.0
210.5

100.0
849.2
231.1
122.4
3,727.1
7,106.2

190.0

173.7
-9.5
150.9
-7.9
7.1
33.2
18.3
-2.0
125.7
3157

August

1956
-60.2
-66.0
-20.2
-29.5
-8.4
.8
-8.6
6.8
-1.0
.3
-59.9

SOURCES, 1 Estimated from American Petroleum Institute weekly reports.
:I

United States Bureau of Mines.

Imports in the 5 weeks ended October 12 averaged 1,421,.
000 barrels per day, or 6 percent above the previous 5·week
period and 26 percent above the comparable period of 1955.
Reflecting the previously announced pl~ns of major oil
companies, crude runs to refinery stills were cut back during
the latter part of September and early October. District
crude runs, at 2,189,000 barrels per day in the first half of
October, were 6 percent below September and only 1 per·
cent above the average for October 1955. Refinery crude
runs in the Nation, at 7,581,000 barrels per day, were also
6 percent below September but were 2 percent above October
last year.
Crude stocks remained virtually unchanged during early
October but, at 279,458,000 barrels on October 13, were 10
percent greater than a year earlier. Because of the cutback
in refinery activity and the increase in demand, stocks of
the maj or refined products remained virtually unchanged
during early October and did not show the usual seasonal
increase. Stocks of these products totaled 408,174,000 bar·
rels on October 12, or 6 percent above the level on October
14, 1955. Gasoline stocks, totaling 174,062,000 barrels on
October 12, were 23,582,000 barrels- or 16 percent- above
a year earlier. Residual fuel oil stocks were virtually un·
changed from a year ago, while distillate fuel oil stocks
were 3 percent larger.
The demand for the four major products from the begin.
ning of 1956 to October 12 was 6 percent above the com·
parable period last year. The summer decline in demand, in·
duced largely by the steel strike, was reversed sharply during
September and early October. The demand for the major
products during the 5 weeks ended October 12 was 6 percent
above the previous 5·week period and 8 percent above the
comparable period a year ago. Reflecting the end of the
summer driving season, the demand for gasoline was 3 per·
cent below the previous 5·week period but was 4 percent
above the corresponding period of 1955. Influenced by cool
weather in the northern consuming area, the demand for dis.
tillaLe fuel oil was 29 percent above the preceding 5·week
period and 21 percent above the year.earlier period. The
demand for residual fuel oil was up 4 percent from the pre·
vious period and 1 percent from the comparable period last
year.

MONTHLY BUSINESS REVIEW

Nonagricultural employment in
District states during September
reached a record level for the second consecutive month. The total of
4,144,300 workers during September rcflected gains of 32,900 from August and 135,100 from
a year earlier. The largest month·to·month gain was the
addition of 27,800 employees in government, with school
employment accounting for most of the increase. Wholesale
and retail trade showed a seasonal gain of 8,300.
NONAGRICULTURAL EMPLOYMENT
Five Southwestern States 1
Percent change

Number of persons

Sept. 1956 from

Sef~$6~er

September
1955r

August
1956

wage and solary workers .• 4,144,300

4,009,200
745,900
3,263,300
249,700
287,100

4,111 ,400
765,700
3,345,700
262,800

402,900
1,027,800
166,600
466.6 0 0
662,600

Type of employ ment

Sept.

Aug.

1955

1956

299.~OO

3.4
3.0
3.5
3.4
4.5

0.8
.3
.9
-1.7
.2

403,500
1,053,300
176,500
480,100
670,100

- .1
3.3
5.4
3.0
5.3

-.2
.8
_.5
.1
4.1

Total nonagricultura I

767,800
3,376,500
Mining . • ......• • . • . ••
258,300
Construction .. .. ... . .. .
300,000

Manufacturing • • .••• ••• ••
Nonmanufacturing ••.••• ••

Transportation and public
utilities •••••••••.•••

402,600
Trade ........ . ..... .• 1,061,600
Finance .. • .. . . .... . .. .
175,600
Servite . . ... . .........
480,500
Government ...... . .. . .
697,900

I Ari~ona. louisiana, New Mexico, Oklahoma, and Texas.
e-Estlmated.
r-Revised.
SOURCES: State employment agenties.
Federal Reserve Bank of Dallas.

Manufacturing employment increased 2,100 over August
to a record high of 767,800 workers during September. The
settlement of labor-management disputes in the aluminum
industry and hirings in the transportation equipment, chemi·
cals, and apparel industries offset the effects of a 2-week
labor.management dispute which idled more than 3,000
workers in the District steel industry during mid-September.
Construction employment showed little change from the
August level.
Unemployment in the District declined dnring September
as students and teachers withdrew from the ranks of those
seeking employment. In Texas, unemployment decreased
from 110,200 in August to 107,500 in September.
Average earnings of manufacturing workers in the Dis·
trict states during August, at $79.94 per week and $1.94 per
hour, reflected year-to· year gains of 6 perccnt and 8 percent,
respectively. Wage increases granted in several important
District industri es during August and September foreshadow
further increases in average earnings. In the Nation, average

175

BUILDING PERMITS
9 months 1956
Percentage
change in
valuation from

Percentage
change in
valuation
from 9
months

September 1956

Area

Number

ARIZONA
Tucson .••..•. •

282 $

Valuation

962,675

Aug.
1956 Number

Sept.
1955

1955

Valuation

3,604

$ 17,465,796

86

-3.

3,940

20,931,296

-28

1,010,948 -30 -32
1,.456,292 -17
-2
5,252,603
80
69
1,813,213
72
18
958,651 -43
-4
10,719,542 -24
38
1,914,825 -25 -7
3,687,815 -10 -39
738,195 34 345
11,364.100
26 -19
1,703,315 -10
0
547,850 -7
21
3,628,220 -21 -32
2,322,518 122
159
53.4,459 -68 -13

1,594
2,050

18,180,428
15,592,850
36,309,070

78 -65

LOU1S1ANA
Shreveport ....
398
TEXAS
Abilene. , • • , ..
110
Amarillo . . . .. .
196
Austin . .. . . .. .
251
Beaumont .. . . .
343
Corpus ChrIstl ..
324
Dallas •... .. . • 1,993
EI Paso •. . ....
361
Fori Worth ....
538
GalveJton • •.• .
104
Houston . .... •
708
lubbock • . . . ..
174
Port Arthur •...
187
San Antonia .•. 1,420
310
Waco .......•
Wichita Falls. ,
129

1,375,810 -31

Talal-17 cities .. 7.828 $49,991,031

_5

-3

2,696
1,310

48,523,881
13,089,668
7,258,393

19
_13
15
57
-38
-15
-22
-23
-3
6
-23
-4
7
8
-31

79,379

$522,846,209

_6

2,376
2,478
3,030
18,875
3,659
5,938
887
8,104

2,042
1,642

11,392,512
15,355,700

117,427,631
21,105,952
34,490,030

4,025,645
120,439,221
17,322,588
3,935,548

15.154

earnings rose from $79.79 per week and $1.98 per hour
during August to reach a weekly rate of $81 and a record
hourly rate of $2 during September,
The value of construction contracts awarded in the District during September showed a downturn of 6 percent
from the improved August level but was at the same level
as in September 1955. Both residential and "all other"
awards decreased from August; while residential awards
were above the level of September 1955, "all other" awards
were down 4 percent from a year earlier.
In the Nation, construction contract awards during September declined 2 percent from August and were 1 percent
below the level in September last year. However, in both
the District and the Nation, cumulative construction awards
during the first 9 months of 1956 remained well above the
totals for the corresponding period of last year.
Investment in plant facilities by District businesses declined during the third quarter, based on decreases in the
value of construction awards for manufacturing and commercial buildings in Texas. At an estimated total of $73,
268,000, these awards during the 3 months ended September 30, 1956, reflected a decline of 21 percent from both the
previous quarter and the corresponding period in 1955.
DOMEST1C CONSUMPTION AND STOCKS OF COTTON
IBaiesl

VALUE OF CONSTRUCTION CONTRACTS AWARDED
Area

(In thousands of dollars)

August
1956 1

August

1955

July
1956'

10,389
686,276

11,356
717,115

9,034
549,520

519
34,313

568
35,313

452
27,476

797,238
12,312,831

1,211,562
9,764,505

902,890
12,845,734

CONSUMPT10N
January-September
September
Area and ty pe

September

1956

1955

ELEVENTH DISTRICT ... $ 148,725 $ 148,962
Residentia l. . . . . . . .
54,663
51,188
I
All athe r.. . . . . . . . .
94,062
97,774
UNITED STATES I.. . .. 2.0 24,794 2,034,895
Resid ential . .. . . . . .
76 3,817
733,382
All othe r.. .. ...... 1, 260,9 7 7
1,301 , 513
I 37 stot os eost of the Rocky Mountains.
SOURCE; F. W. Dod;e Corporation.

August
1956

1956

1955

Total
Texas mills ........ . . , ... . ... . .
U. S. mills •. . .. . . ... . . .. .. ... . .
Dally average

158,593 $ 1,517,927 $ 1,332,181

62,80 9

627,219

580,156

95,784

890,708

752.025

2,068,754

19,441,066
8,09',637
11,346,429

18,165,044
7,965,550
10,199,494

874.233
1, 194.521

Texas mills ... .. ...... . .•..... .
U. S. mills ......... . .•...... . . •
STOCKS, U. S.-End of period
Consuming establishments . . ...... . .
Publit storoge and compresses •.....

1 Four weeks ended August 25.
, Four weeks ended July 28.
SOURCE: United Stotes Bureau of the Census.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102