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MONGJrHLG)(
REVIEW
BU8INB88
FED ERA L
RES E R V E
B AN K
o
F
D ALLAS
DALLAS, TEXAS
Vol. 39, No. 10
October 1, 1954
THE OIL REFINING INDUSTRY IN THE SOUTHWEST
JACK
D. COLCLOUGH, Pelroleum Economist
Federal Reserve BanT, 0/ DaUas
This is the second in a series 0/ a.rticles about the oil industry in Ihe Southwest
which will appear in the Mo nthly B usiness Review from time to time. Additional
copies of this article may be obtained by addressing a request to:
Research Department
Federal Reserve Bank of Dall&
Dallas, Texas
The Southwest is the foremost oil refining area in the
Nation. More refineries and a larger proportion of refining
capacity are located in the southwestern States of Louisiana,
New Mexico, Oklahoma, and Texas - which lie wholly or
partly within the Eleventh Federal Reserve District - than
in any other section of the -ation. Th is region's pre·eminence
in refining has been associated with its position as the dominant producer of the Nation's crude oil.
Before undert.aking a discussion of the Southwest's oil
refining industry, it may be desirable to describc briefly the
function of refining in the oil industry as a whole. Refining
is a manufacturing operation, whereas the lacation and ex·
traction of crude oil from underground reservoirs technically
are classed as a mining opera tion. The function of an oil
refinery is the processing of crude oil in order to obtain prod.
ucts which will be more useful in our modern economy. Crude
oil itself is of limited usefulness; as such, it cannot be used
in the engines which run automobiles, trucks, and trains and
in the oil burners for heating our homes. The derivation of
various products from crude is accomplished either by separ·
ating it into different components and/ or through changing
the molecular structure of some of thc compounds found in
the crude. The principal finished products manufactured
from crude oil are gasoline. kerosene, heating oil, diesel fuel,
and residual fuel oil: although many refiners make other im·
portant products, such as lubricants, asphalt, waxes, solvents,
chemica ls, and raw materials for petrochemical manufacture.
Devel opment of the Southwest's Reflni ng Ind ustry
A pri,"itive cO lltrapl.ioll ,d,ich .crved M a ref,nel'y was ill
operation in Nacogdoches as early as 1890. The first south-
western refinery of consequence, however, was estahlished in
1898 with a capacity of 1,000 barrels to process the crude oil
from the region's first important oil discovery, the Corsicana
field.
The refining industry on the Gulf Coast had its origin in
the three refineries built at Beaumont and Port Arthur within
a few years after the electrifying Spindletop oil discovery in
1901. While these refineries were established to process Spin.
dletop crude, they subsequcntly began to tap other fields.
Pipelines were constructed to northeastern Oklahoma in
1906·7 to obtain the higher·gravity, lower·cost oil available
in the major Glenn pool near Tulsa. These pipelines were
forerunners of a major network of pipelines to be constructed
in future years to bring crude from interior sections of the
Southwest to gulf coast refineries. The original three refineries in the Beaumont·Port Arthur area developed into some
of the largest and most modern refineries in the Nation.
The Glenn pool also provided a start for the oil refining
industry in Oklahoma, which expanded following the discovery of Cushing and other maj or fields in the State. Increas·
ing demands associated with World War I, together with a
marked rise in Oklahoma's crude oil production, gave a substantial impetus to the State's refining industry, making it a
major supplier of refined products to the Middle West and the
East. as well as to international markets.
The refining induslry in Texas and Louisiana also ex·
pllllded sharply during World War T, u trend which continued
practically unabated during the 1920's. Refining capacity in
Texas almost tripled and in Louisiana, about doubled. In
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
142
MONTHLY BUSINESS REVIEW
CRUDE OIL CAPACITY
OF OPERATING REFINERIES
fineries began to take on the aspects of the chemical industry.
The chemical nature of the region's refineries has become
more pronounced in the past 15 years, with the utilization of
catalytic cracking, catalytic reforming, and solvent r efining
processes. These technological improvements have enabled
the Southwest's refineries to increase the number and quality
of products obtained from a barrel of crude oil. They have
permitted an increase in the yield of the more valuable products, such as gasoline and distillate fuels, and reduced the
yield of less valuable products, such as residual fuel oil. Moreover, they have increased the flexibility of the region's refining industry, permitting it to secure greater variation in the
yields of different produ cts to meet se asonal and other
changes in demand.
~
Number and Capacity
SOURCES'U. S. Bur.ou of Win ....
0;1..,40", Journlli .
Oklahoma, however, the refining capacity began to show a
declining trend in 1925. During the 1920's, an increasing
number of "prairie-dog" refineries-small and inefficient installations established in oil fields to process local crude were supplanted by larger, more efficient refineries drawing
crude from wider areas and having access to more extensive
markets. While the capacity of the Southwest's refining industry rose markedly during this period, the number of refineries
declined.
Although the depression slowed refinery expansion in
Texas, the refining industry in the State continued to experience a substantial growth during the 1930's, accounting for
nearly three-fourths of tbe net expansion in the United States.
This development contrasts with a marked decrease in refinery capacity in Oklahoma and a more moderate decline in
Louisiana. Some refining expansion occurred in New Mexico,
but refining capacity in that State remained a very small part
of the Southwest's total.
The Southwest's refining industry at the beginning of 1954
was comprised of 107 refineries, with a crude capacity of
3,186,637 barrels per day. Excluding the capacity of the six
shutdown refineries, the operating crude capacity of the region's 101 active refineries amounted to 3,078,400 barrels.
These represented almost one-third of the Nation's refineries,
and their operating crude charge capacity constituted 40
percent of the national total. The Southwest's share of the
Nation's operating refining capacity has shown little change
during the past 15 years.
The Southwest's refining industry not only accounts for a
substantial proportion of the Nation's gross refining capacity
but also possesses a significant share of the cracking, reforming, a nd other types of specialized capacity which determine
the variety and quality of products obtained and the flexibility of the refining operation. The following table shows the
proportion of the Nation's capacity of the various types of
refining facilities which is located in the Southwest.
REFINING CAPACITY,
SOUTHWEST AS PERCENT OF NATION
January
In the past 13 years, the refining industry has grown significantly in each of the four southwestern states. Most of this
expansion has occurred on the Texas and Louisiana Gulf
Coasts, although substantial growth also has been evident in
Oklahoma and New Mexico. Refining capacity in the interior
of Texas and in northern Louisiana has shown little net
change in the past decade.
The expansion in the Southwest's refining capacity during
World War II and in the postwar period has been primarily
through the enlargement of existing refineries. Very few new
refineries have been established, and many small ones owned
by both major and smaller oil companies have been shut
down.
Over the years, as the Southwest's refining industry has
been expanding, it also has been keeping pace with technical
advances in refining_ Technically, the region's refineries have
come a long way from the cheese-box and shell stills in use
at the advent of the century. With the adoption of thermal
cracking during World War I and in subsequent years, re-
1, 1954
Crude oil..................................
40
Vacuum distillgtion .. .. . ... ............ ..... .
Thermal operations..... . ...... . ... ... .. . ....
Cata lytic cracking....... . ....... .. .........
39
38
41
Catalytic reforming. . . . . . . . . . . . . . •. . . . . . . . ..
46
Polymerization. . . . . . .. . • . . . . . . . . . . . . . .. . . ..
lubes... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
42
47
Coke.. ... .. ................ . .... ....... . .
Asphalt...................................
18
16
SOURCE: Ofl and Gos Journar.
Location
Although refining facilities may be found in most sections
of the Southwest, the region's refining industry tends to be
concentrated both with respect to the states within the region
and with respect to areas within the states. At the beginning
of 1954, Texas accounted for the maj or proportion of the
Southwest's refining capacity, with the total crude charge
capacity of its refineries amounting to 2,151,037 barrels per
day, or about 67 percent of the region's total. Louisiana
ranked second, with 20 percent of the region's capacity, followed by Oklahoma with 12 percent. New Mexico refineries
had less than 1 percent.
4
MONTHLY BUSINESS REVIEW
143
REFINERIES IN THE SOUTHWEST ACCORDING TO CRUDE OIL CAPACITY
JAN UA RY 1,1954
••
•
-,.
- -'€O..
-
+•••
+
OK~AHOMA·
NEW MEXICO
0
•
•
+•
+
++
•
•
•
--••
•
•
•
-.. -..
• .+
•
TEXAS
Barrels per day
.- Less than 5,000
+-5,000-9,999
.-10,000-24,999
0-25,000 - 49,999
0-50,000-99,999
... -100,000-199,999
•
- 200,000 and over
SOURCE: U.S. Bureau of Minn.
Within Texas and Louisiana, refining capacity is concentrated largely in a single area common to both states - the
Gulf Coast. At the beginning of 1954, the Texas and Louisiana Gulf Coasts, together, possessed over three-fourths of
the Southwest's refining capacity and 31 percent of that in
the Nation. The gulf coast refineries tend to be grouped in a
relatively few areas: Corpus Christi, Houston-Baytown-Texas
City, Beaumont·Port Arthur, Lake Charles, Baton Rouge, and
New Orleans.
Several major economic advantages, both natural and developed, are responsible for the concentration of the Southwest's refining capacity on the Gulf Coast of Texas and Louisiana. Foremost among thesc advantages is the access to
cheap water transportation. Gulf coast refineries can ship to
east coast markets via ocean-going tankers, which, at present,
are the cheapest form of transportation. In addition , the refineries can utilize barges to reach, via the Intracoastal Canal
and the Mississippi River system, the large markets in the
Middle West.
A second major factor has been the availability of a large
and relatively stable supply of crude oil. Not only is the Gulf
Coast an important oil-producing area in its own right, but a
network of trunk pipelines brings crude to the Gulf Coast
from most producing areas in the Southwest. Although this
network of crude pipelines to the Gulf Coast is, in part, the
product of the existence of the refineries on the Gulf Coast,
the pipelines probably would have been built in any case if
the Southwest is to help supply the oil needs of the east coast
markets.
The Gulf Coast also has other advantages for refineries.
The large quantities of natural gas produced in this area have
supplied the refineries with a relatively cheap source of fuel.
The availability of water at a low cost has been important to
the refining industry because of the large amounts it uses.
Moreover, the existence of plant sites, an adequate labor supply, and housing facilities have tended to attract gulf coast
refineries.
In view of the advantages of a gulf coast location, the question may be raised as to why any refinery in the Southwest
is located in the interior. Most of the interior refineries were
established near oil fields to get the advantage of low-cost
crude. Prior to prorationing, oil fields usually were developed
MONTHLY BUSINESS REVIEW
144
claims the Nation's largest refinery, and the second and third
ranking refineries are located near Houston and Port Arthur,
respcctively.
Olt REFINERIES,
NUMBER AND CRUDE Olt CAPACITY
January 1, 1954
Number
Ownership
Crude oil capacity
(In ba rre ls per day)
Under
C~· --------~----~--~---------
Oper- Shutstruc·
oling down Total tlon
A<,o
Louisiana ••••••••
New Mexico •••••
Oklahoma •••••••
Texo5 ••••••••••
15
7
20
59
1
1
2
2
SOUTHWEST••• 101
16
8
22
61
6 107
29 337
UNITED STATES 308
Operating
587,075
19,375
339,950
2,132,000
7
3.078,400
7,782,103
Shutdown
Tota l
Unde r
construction
639,800
23.550
37 2,250
19.D37 2,151,037
48,300
5,000
61,400
224,794 8.00 6.897
114,700
397.500
52.725
4.175
32.300
- -----108.237 3,186,637
SOURCE: United Stotes Bureau of Mine,.
as rapidly and as intensively as possible; the ensuing flood
of oil, frequently exceeding the capacity of transportation
facilities, resulted in low crude prices at the field. Even today,
an interior refinery obtaining its crude from a nearby oil
field generally gets it more cheaply than a gulf coast refinery
because of the savings in transportation costs. This advantage, however, is limited largely to the small refinery, since
a large refinery must draw its crude over a wider area in
order to have an adequate and dependable supply.
The interior refinery also enjoys transportation cost advantages in the distribution of its products in nearby markets.
On the other hand, a lack of cheap water transportation tends
to limit the extent of its market. In fact, those interior refineries which do not have access to products pipelines generally
are restricted in their markets to the local territories in which
they are operating.
Size
The Southwest's refineries vary greatly in size, ranging
from those '~ith a crude capacity of less than 1,000 barrels
per day to giant refineries with capacities exceeding 250,000
barrels. The larger refineries are located in the gulf coast
areas of Texas and Louisiana, while the smaller refineries
usually are found in the interior. The average crude capacity
of the region's refineries is somewhat greater than that of
refineries in the Nation as a whole; at the beginning of 1954,
the average capacity of refineries in the Southwest was 29,782
barrels per day, as compared with 23,759 barrels in the Nation. The proportion of very small refineries in the region is
lower than that elsewhere in the Nation, and the proportion
of very large refineries is higher in the region. Baton Rouge
Most of the major oil companies have refineries in the
Southwest. Major oil companies, or thcir subsidiaries, acco unt for roughly one·third of the number but four-fifths of
the crude capacity of refineries in the region, due to 1heir
ownership of the larger refineries. Most of the refining capacity of the major oil companies is located on the Gulf Coast,
although Lhey have a substantial number of moderate-size and
small refineries in Oklahoma and inland areas of Texas.
While about one· half of the total refining capacity of independent refiners and smaller oil companies in the Southwest
is located on the Gulf Coast, most of the individual refineries
of such owners are located in the interior of the region.
Although the refining capacity owned by both major and
small oil companies has increased greatly since 194·0, that of
the major oil companies has shown the larger relative growth.
A.t the beginning of 1954, the crude charge capacity of major
Oil company refineries comprised 79 percent of tbe total
capacity of the Southwest; on January 1, 1940, the crude
capacity of major oil company refineries was 71 percent of
the total.
Utilization
While a prime objective of refiners is operating their facilities at full capacity as a means of securing lower unit costs,
it is impractical for the refining industry or individual refiners to operate continuously at 100-percent capacity. Refinery units must be shut down from time to time for repairs_
Moreover, even allowing for these necessary shutdowns,
capacity operations are not practical on a sustained basis.
Under the defcnse program of recent years, the Government
ha s encouraged the building of some excess capacity through
granting certificates of necessity, which permit accelerated
depreciation for tax purposes. Furthermore, even before the
defense program, refining capacity in excess of that to meet
CRUDE RUNS TO STILLS
AS PERCENT OF CAPACITY
SOUTHWE ST
DISTRIBUTION OF REFINERIES ACCORDING TO
CRUDE 01 L CAPACITY
January 1, 1954
Refine ries in other sections
of United States
ReAneries in Southwest
Crude oil capacity
No.
Percent
affolo!
39
17
20
15
7
5
4
36.5
15.9
18.7
140
6.5
4.7
3.7
Tolal. .......•.. 107
100.0
(In berrels per dey)
less thon 5,000 ....
5.000·9.999 ... . ...
10.000·24.999 ....
25.000·49.999 •.. ,
50.000·99.999 ....
100.000.199.999 .•
200,000 and over ..
Capacity
83,137
115,500
291,000
529,500
431,200
703,000
1.033.300
Pe rcent
of tolal
2.6
3.6
9.1
16.6
13.5
22.1
32.5
----3.186,637 100.0
Percent
No.
of total
90
50
36
24
17
12
1
39.2
21.7
15.7
10 .4
230
100.0
7.4
5.2
..
Percent
Copacity
20 9,060
337.700
5 57,300
811,800
1,154,800
1.537.200
212.400
of total
4.3
7.0
11.6
16.8
24.0
31.9
4.4
2
----4.820.260 100.0
SOURce u. s. Bw. uuol
SOURCE:: United Stotes Bureau of Mines.
"" 1~
••.
(
145
MONTHLY BUSINESS REVIEW
average demands was necessary to prepare for the continuing
long.term rise in demand, as well as to meet seasonal peaks
in the aggregate demand for petroleum products. Part of this
seasonal peak demand, however, has been met by the accumu·
lation of inventories in periods of lower demand.
The degree to which the Southwest's refining industry has
been able to approach full utilization of its facilities has
varied over the ycars. In the years following World War II,
the region's refineries were strained to meet the rapid in·
crease in demand for petroleum products which was the out·
growth of the sharp increase in the number of automobiles
in use, the expansion in oil use for heating homes and busi·
nesses, growth of the industrial needs associated with the
high level of economic activity, and further mechanization of
farming. Accordingly, the refineries operated at a higher per·
cent of capacity during this period than during either the war
years or the prewar years. The peak utilization of the South·
west's refineries was in 1948, when daily average crude runs
to refi nery stills were equal to 97 percent of the total capacity
of the region's refineries at the beginning of that year. With
the build·up in refining capacity and the more recent leveling
off in demand, refinery operations have dropped to a lower
rate of capacity. During the first 6 months of 1954, daily
average crude runs amounted to 87 percent of the total capac·
ity. Comparable figures for the period 1935·40 ranged from
77 percent to 88 percent.
Reflnery Yield.
Considerable difference exists among the individual reo
fineries, among the various refining districts of the region,
and between the Southwest and the Nation in the proportion
of the sundry petroleum products derived from a barrel of
oil. Moreover, the product yields of the individual refineries
vary from season to season. These variations are due to dif·
ferences in plant facilities, in the type of crude processed, and
in the market which a refinery is serving.
The gulf coast refining industry, which serves the large
heating oil markets on the East Coast, produces a substan·
REFINERY YIELDS
OKlAHOMA,KANSAS, AND MISSOURI
50UIIC£
u.s 8~reou of IIIllIu.
tially higher percentage of kerosene and distillate fuel oil per
barrel of crude than the refineries in the Nation as a whole.
Moreover, with ready access to major lubricating oil markets
not only in this country but also in foreign countries, the gulf
coast refineries also have been large producers of lubricating
oil. In 1953, refineries in this area accounted for 51 percent
of the Nation's kerosene output, 37 percent of the Nation's
distillate fuel oil production, and 44 percent of lubricating
oil production. On the other hand, yields per barrel of resid·
ual fuel oil are somewhat lower in gulf coast refineries than
in the Nation's refineries.
Refinery yields in inland areas of the Southwest tend to be
high in gasoline and low in residual fuel oil. The principal
markets accessible to these inland refineries are primarily
gasoline markets, and, consequently, the inland refineries
tcnd to maximize their production of that product. On the
other hand, their immediate market for residual fuel oil is
relatively limited, and they must absorb transportation costs
to dispose of the product in more distant markets. Because
of this situation, the inland refineries have been quicker to
install coking and other equipment to reduce residual fuel oil
REFINERY YIELDS
TEXAS GULF COAST
CRUDE RUNS AND PRODUCTION OF SelECTED PETROLEUM
PRODUCTS AS PERCENT OF NATIONAL TOTALS
1953
Olcla.
Kans.
Mo.
Crude runs • •• ••.
Go5Oline ••. •••••
Kerosene ••••.••.
Distillate fuel oil ••
Residual fuel oil • •
lub ricants .• •.•••
Wax •••••.•. • ••
Coke • . . ••••.•••
Asphalt •.•....•.
Road oil ••.•.•.•
Still g05 .........
liqueAed gases . .•
Miscellaneous ••••
Tellos
Inland
Tellos
Gulf
8.4
9.9
9.3
9.3
4. 2
6.B
9.5
11.6
11.1
16.1
6.7
6.4
6.4
3.7
5.2
3.4
2.9
2.7
.3
1.9
1.6
5.B
.7
4.7
4.5
18.5
24.3
23.8
36.2
27.9
19.B
34.1
20.7
B.3
7.B
.1
25.6
25.1
9.1
lao
Ark.
New
Gulf
No. la.
Mexico
7.9
B.O
14.4
9.5
4.2
9.4
14.0
7.B
5.6
I
5.6
19.7
13.8
1.2
1.0
2.2
1.3
.6
3.7
,
Total,
southwestern
reAnery
districts 1
.3
.4
.1
.2
.3
4.0
5.0
.1
1.1
1.6
8.3
.1
.2
1 Due to rounding, the sum of various c;omponenh may not agree with the total .
SOUACE' U s. ell'U~ ol"l~ ...
I less Ihan one-half of 1 percent.
SOURCE. United 510leJo Bureau of Mines.
45.7
48.3
60.8
51.1
31.6
5-4 .3
46.1
33.3
35.5
17.0
43.B
57.5
54.9
146
MONTHLY BUSINESS REVIEW
production and increase th e yield of gasoline and other light
products.
The yields of residual fuel oil have been hecoming pro·
gressively smaller in most a reas of the Southwest. This trend
has been in keeping with that prevailing in the Nation. The
relatively low price of residual fuel oil as compared with most
other petroleum products has encouraged the refiner to reduce his residual fuel oil yield to the minimum.
Source of Refiners' Crude
As one might expect, practically all the crude requirements
of the Southwest's refineries are met by crude oil produced
in this region. In 1953, crude oil produced in the southwestern states - Louisiana, New Mexico, Oklahoma, and Texas
- accounted for approximately 97 percent of the total crude
received by refineries in those states. The remaining small
amount of crude received by the region's refineries consisted
of crude produced in the nearhy States of Mississippi , Alabama, and Kansas, as well as in forei gn countries.
The large refineries in the Texas gulf coast area draw their
crude from widely scattered areas of the region, including
west Texas and New Mexico, east Texas, the gulf coast area
itself, and - to a limited extent - Oklahoma. On the other
hand, interior refineries, most of which are small, usually
obtain their crude from oil field s located relatively close to
the refineries. Some of the larger inLerior refineries, however,
must secure some of their crude supply via pipelines from
southwest fields, sometimes located several hundred miles
from the refineries.
The Southwest's refineries in recent years have been processing about two·thirds of the crude oil produced in the region . Moreover, the proportion of southwestern crude refined
in the region has tended to move irregularly higher. During
the past 5 years, crude runs to refinery stills in the Southwest
amounted to 67 percent of the region's crude production. In
the preceding 5 years, rcfinery crude runs were 65 percent of
crude production; in the prewar years 1935·39, the com·
parahle figure was 60 percent.
Markets
The transportation faciliti es available to a refinery are the
dominant element determining its market. Those refineries
having direct access to water transportation gcnerally have
much broader markets than inland refineries. Moreover, in·
land refineries with access to producLs pipelines usually have
wider markets than refineries without such facilities.
The Southwest's refineries differ considerably in the transportation facilities available to them and, hence, in the markets they serve. Practically all the major markets of the
Nation east of the Rocky Mountain s are reached by some
southwest refineries. The largest share of the products of the
region's refineries, however, goes Lo the East Coast. The
Southwest itself ranks second as a market, followed by the
Middle West. A relatively small proportion of the products
"f southwesLern refineries is exported , a lll! all insignificant
amount is shipped to the Mountain and Pacific Coast States_
An accompanying chart, prepared fr om data compiled by
the P etroleum Administration for Defense, shows shipments
of refilled products from PAD DisLrict 3-which comprises
the States of New Mexico, Texas, Louisiana, Arkansas, Mississ ippi_ and Alabama - and provides some approximation
of the market ex isLing for products of southwest refiners. This
chart, however, und ersLaLes the amount of shipments going
Lo the :\forth Central States since shipments from Oklahoma,
which is in PAD District 2, are not included_ On the other
hand, it should be noted that not all shipments originate in
District 3; furthermorc, some of thc shipments include natural gas liquids not derived in refin ery operations_
4
Refineries in the gulf coast area, with access to water tra,,,portation, have the hroade>t markeLs of the Sou Lhwest's refineri es. The major portion of their production is shipped
by tanker to the East Coast. These refineries also supply, via
pipelines, important inland markets in the SoutheasL, as well
as in the Southwest. Moreover, sign ificant quantities of refined producLs are barged up the Mississippi River system to
middle west markets. For some gulf coast refineries, the export market has been important.
Refineries in Oklahoma and the Texas Panhandle, not having access to water transportation , havc dcveloped products
pipelines which havc enabled lhem to maintain important
ma rkets in many of the T
orth Central States, including North
DakoLa , South Dakota, Minnesota, Wisconsin, Nebraska,
Iowa, Kansas, Missouri, and Illinois. These markets take the
bu lk of the production of these refineries, with most of the
remainder being marketcd locall y. Othcr souLhwestern inland
refincri es generally uo not have direct access to either water
or pipeline transportation; and their markets, for the most
pa rt, a re confined to a relatively linlited area . However, they
ma y ship some specialty products ove r long distances.
C
Importance of Oil Refining to the Southwest
Oil refining is 01 considerable imporlance to the Southwest's economy. It ranks second among the region's man ufacLuring industries, both in the number of persons employed
and in the value added by manufacturing. In Jun e 1954, employmen t in the oil refineries of the lour States of Louisiana,
New Mexico, Oklahoma, and Texas toLaled around 75,000,
or about J 1 percent of the total manufacturing employment
of the area. Approximately one out of every 50 wage and
sa lary workers in the Southwest is employed in an oil r efin ery. Moreover, wage rates of refiner y workers are higher
than those for most other industries in the region.
The value added by manufacturin g of the Southwest's oil
refineries exceeded $800,000,000 in 1952, according to the
latcst data available from the United States Bureau of the
Census. This figure represented 18 percent of the total value
added by all manufacturing establishments in the region_ It
will be noted that this proportion is substantially higher than
that of the manufacturing employment accounted for by the .refinin g indu, try and is a reflection of the relatively heavier ~
plallL a lld equipmellt expendiLures per lI'orker ill refining as
(·","partd "iLlI 1II,),;t ul h"r L
ypes of IlH(llufacturing in the
Southwest.
DISTRIBUTION OF REFINED PRODUCTS
FROM PETROLEUM ADMINISTRATION FOR DEFENSE DISTRICT 3,1950
(BARRELS PER DAY)
DISTRICT
Gasoline
5 ,000
DISTRICT
Gasoline
Kerosene
Di stillate
Residual
Other
287 , 000
Kerosene
EXPORTS
Gasol i ne
Kerosene
~istillate
Residual
Other
S OURCE ' P et roleum Adm i nistration for Defenu .
38,000
4,000
13,000
7,000
25,000
87 ,000
MONTHLY BUSINESS REVIEW
148
In this connection, oil refining has promoted the development of metals fabricating firms in the region which supply
the refineries with fractionating towers, pressure vessels,
tanks, pipe coils, pipe fittings, and other equipment. Such
metals fabricating firms tend to be concentrated in refinery
centers, such as Beaumont-Port Arthur and Houston.
The role of the refining industry in the development of the
petrochemical industry has been of outstanding importance
to the Southwest's economy. Oil refining h as contributed to
the petrochemical industry in two ways: (1) through research and (2) through supplying basic raw materials. Some
of the petrochemicals produced in the region today are the
result of research conducted by the oil refining industry both
in the Southwest and elscwhere. Refinery gases, as well as
other bydrocarbon components obtained in refineries, constitute raw materials for the petrochemicals. Many of the
region's refineries have expanded their activities to bccome
important producers of petrochemicals_ The major portion of
the petrochemicals produced in the Southwest, however, is
manufactured by chemical plants which receive their basic
raw materials, in many instances, from nearby oil refineries.
Problems and Outlook
During the past year, the refining industry in the Southwest, as well as elsewhere in the Nation, has been confronted
with a leveling off in demand, excessive stocks, declining
products prices, and narrowing profit margins. Reflecting the
decline in refinery gross margins, the spread between the
price of crude oil at the wellhead and refiners' realization
from major products, as measured by the Independent Petroleum Association of America, has decreased from $1.07
per barrel in the autumn of 1953 to 82 cents per barrel in
July of this year, which is the lowest level in over 4 years.
Southwestern refiners have been forced to cut back their
crude runs, and a number of the small refineries have been
shut down.
Part of the current difficulties of the Southwest's refining
industry is merely a reflection of increased competitive pres-
GROSS PROFIT MARGINS OF OIL REFINERS
UNITED STATES
NOT E~:~~: :,r,~~:r~-::~ ~:::rO!1:~~~~~,! :~!,',~~~~~:~~":tOI" .,fon,
SOURCE
J nh~.n ~,",
P" , ol,wIB A $$ O,"Ol loll 01 <I ",,,leo
sures arising from the expansion in refining facilities during
the past few years. This expansion has more than met the
industry's immediate needs, and some surplus, or reserve,
capacity has resulted. With the industry forccd to operate at
less than full capacity, the ncw, modern, and more efficient
facilities inevitably are exerting a competitive pressure on
the older and less efficient installations.
These competitive pressures also are manifested in the
steady increase in the octane rating of motor fuel. If one refiner achieves a higher octane rating for his gasoline, other
refineries are impel1ed to instal1 new equipment to raise their
gasoline octane ratings. This competition to improve the
quality of the product has been largely responsible for the
substantial increase anticipated in refinery expenditures for
new equipment during 1954. The octane race, or the quality
race, is not new in the refining industry, but it has become
more intense recently.
Residual fuel oil has long been considered a problem by
southwestern refineries because of its relatively low price.
The price of residual fuel oil consistently has been less than
the price the refiner pays for his crude oil at the wellhead.
Consequently, refiners have been striving to minimize their
yield of residual fuel oil and to increase their yields of the
more valuable products. The residual fuel oil problem is more
acute for the inland refiner than for those on the Gulf Coast.
With the conversion of the rail roads lo diesel engines, the
interior refiner has lost one of his important markets for residual fuel oil. Although he may still find a market for his
residual on the Gulf Coast or in industrial centers of the
Middle West, his return will be considerably less than that
which the gulf coast refiner receives for his residual.
Improvements in coking processes have heen developed
recently which have enhanced the opportunity of the refineries to convert economical1y their residual oil to lighter,
more valuable products and to petroleum coke. With the advent of these new processes, interior refineries have been
turning increasingly to coking to solve their residual fuel oil
problem. Even some gulf coast reflfleries have installed coking equipment.
Probably the most serious problem facing the southwestern
refi neries is the threat of increasing competilion in some of
their established markets. The Southwest's refineries, while
located relatively close to the source of crude, must ship their
products a substantial distance to reach the inlportant markets of the East and Middle West. Under lhese circumstances,
the discovery of new oil fields closer to the markets, the construction of new pipelines, changes in the rates on existing
forms of transportation, and other factors may reduce or
eliminate certain competitive advantages which southwestern
refineries presently enjoy in selected markets.
Al the presen l time, the establishment of refineries in
North Dakota and Minnesota to process oil from newly developed fields in the Williston Basin and Canada is exerting
strong pressures on Oklahoma refiners' markets in some portions of the T
orth Central States. The increasing competition
in these markets, however, probably will develop gradually;
and, in the meantime, Oklahoma refiners undoubtedly will
ill
,.
MONTHLY BUSINESS REVIEW
attempt to expand their markets elsewhere. For instance, a
products pipeline recently has been completed from central
Oklahoma to the Mississippi River at Memphis which may
improve the accessibility of Oklahoma refiners to markets in
Arkansas, as well as east of the Mississippi River. Moreover,
the demand for their products in Oklahoma itself and nearby
territories rna y be expected to expand.
Gulf coast refiners, meanwhile, are confronted by increasjng pressures in east coast markets resulting from the marked
expansion of refinery capacity in that area. During the postwar period, the rna j or portion of the growth in east coast markets has been met by larger shipments from gulf coast reli ncrs, but their share of the total market has declined.
Although the expansion in the rcfining capacity on the
East Coast may represent, in part, the long-term trend for
refineries to move closer to the markets they serve, a major
reason for the growth in the east coast refining industry has
been the processing of increasing amounts of foreign crude
coming into that area. In so far as foreign crude is imported
to help supply east coast demands, it is likely to be refined in
that area rather than on the Gulf Coast because of thc saving
in transportation cost.
~
The future course of imports will be dctermined by a
variety of factors, including the relative cost of locating and
producing oil in this country as compared with foreign countries, tanker rates, and national defense considerations, as
well as national and international policies. Jn view of these
circumstances, it is hazardous to predict the course of imports. On the other hand, the major importing companies
own a large portion of the refining capacity on the Gulf Coast.
The fact that they have been expanding and modernizing
their refineries in this area appears to indicate that they are
unlikely to increase their imports and their east coast refining capacity to the extent that markets of the gulf coast refineries would be impaired seriously.
The gulf coast location gives refineries in this area considerable flexibility in the markets they can reach. They are not
dependent upon east coast markets alone. At the present time,
gulf coast refineries have important markets in the Southeast,
Middle West, and the Southwest itself. The Southeast and the
Southwest, which have been experiencing a more rapid economic growth than most other areas in the Nation, should
provide increasingly large markets to gulf coast refineries.
Whilc competition in the Middle West is very keen in view of
I hc large number of refineries in different areas which are
attempting to sell in that market, the gulf coast refiner can be
expected to continue to meet at least some of the needs of this
very important consuming area. All in all, the availability of
cheap transportation-water and products pipelines, its wide
markcts, and the ability to tap crude from practically all portions of the Southwest give the gulf coast refining industry
competitive strength.
Inland refi ncrics in Texas, New Mexico, and northcrn Louisiana which are not served by products pipelines have had
scrious problems to overcome, and many have been forced
to shut down over the years. The markets they can reach eco-
149
nomically have been relatively small and their opportunities
for cxpansion limited. Moreover, before the war, the small
inland refineries had difficulty obtaining some types of equipment needed to produce gasoline of a quality which the larger
refineries were capable of turning out. This situation has
changcd in the postwar period, although the cost of equipment per barrel of capacity still may be higher for the small
refinery than for the larger refinery. Some inland refineries,
dependent for their crude upon the production of a particular
field, have secn their source of supply play out.
Despite these handicaps, some of the inland refineries have
progressed through capitalizing on certain advantages available to them. The successful small inland refineries usually
have been those which have had one or more of the following
attributes: (1) aggressive management, (2) a favorable location with respect to particular local markets, and (3) specialization in selected products to which their crude supplies
were particularly adapted, such as solvents, naphthas, and
asphalt. In addition, these successful refineries capitalized on
their low overhead costs, their flexibility of operation to take
advantage of temporary changes in refined products markets,
and their ability to render more personalized service than
their large competitors located in other areas.
A place undoubtedly exists in the Southwest's refining industry for the efficient, well-situated inland refineries, and
such refineries probably will show further growth. It is likely
tha t some of the less efficient inland refineries may lose out
in the competitive struggle and the total number may decrease, but the total capacity of such refineries may be
maintained.
While markets will be prime factors influencing the future
development of the Southwest's refining industry, the availability of crude will be the fundamcntal factor conditioning
this devclopment. As long as southwest crude production expands, the odds are probably better than even that the region's refining industry will expand. On the other hand, a
persistent contraction in the region's crude production would
jeopardize its refining industry. At least a continued existcncc of crudc production in the Southwest seems necessary
if the refining industry is to do anything more than meet
regional needs. At the present time, however, there are no
indications that the Southwest's crude production will be a
limiting factor in the region's refining industry. In fact,
southwestern refineries now are utilizing only about twothirds of the region's crude production.
In summary, the Southwest's refining industry, experiencing an almost uninterrupted growth during the 20th century,
has expanded markedly during the postwar period. There
are no indications that the industry has reached its maximum
size, although it faces several problems which may tend to
limit its growth. The factors which have been responsible for
the development of the region as the foremost refining area
in the Nation are still present. Although refining capacity in
the region may not increase as rapidly in the next 10 years
as it did in the preceding decade, it probably will continue
to rise and provide an expansionary influence to the Southwesl's economy.
150
MONTHLY BUSINESS REVIEW
REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
Department store sales in
the District in August rose seasonally 3 percent above July
but were 1 percent below
August 1953. January-August
sales trailed those of a year ago by 4 percent. The
year-to-year loss continued in the first half of
September.
August sales were marked by a relatively greater
use of credit, compared with a year earlier. Instalment and regular charge account sales were up 11
percent and 1 percent, respectively. Department
store inventories reflected a year-to-year decline of
7 percenti merchandise on order was up 4 percent.
Hot, dry weather in September intensified the
drought in most areas of the District. Harvest of the
cotton crop is virtually completed in southern and
southeastern Texas counties and is we.ll advanced
in other areas. Seeding of the 1955 winter wheat
crop is making progress in northwest Texas. Ranges
and pastures continue to deteriorate . Prices of cotton
and some classes of cattle rose in September, while
prices of most other farm commodities declined.
September daily average crude oil production in
the District rose moderately following decreases in
July and August, but a reduction in Texas daily
allowables for October foreshadows a decline . An
increase in Dis.trict refinery runs in August and the
first part of September halted a 5-month decline.
August sales at District department stores rose seasonally 3 percent
above July but were 1 percent below
August 1953. Although it declined
from 132 in July to 127 in August,
the seasonall y adjusted index of monthiy sales (1947-49 =
100 ) remained 6 points higher than the average for the first
6 months of this year. Cumulative sales from January
through August were 4 percent under the comparable 8-month
period last year and represented a small gain from the 5-percent loss during the first half of 1954.
September sales made a slow start, influenced by unseasonab ly hot, dry weather over most of the District during
the first half of the month. Department store sales during
the 3 weeks ended September 18 were 2 percent under those
during the same period last year.
Back-to·school buying during August at District department stores showed a moderate gain over a year earlier,
reflecting principally the larger requirements of a growing
student population. The gains were offset, however, by a
decline in the demand for other department store goods.
Sales of girls' wear and boys' wear rose 3 percent and 7 percent, respectively. Sales of foo twear rose 4 percent. A strong
demand for jewelry and watches resulted in a 14-percent rise
in the sales of those items, while sales of sheetings, blankets,
and comforters registered a corresponding gain. On tbe
other hand, August sales of women's and misses' coats and
suits declined 17 percent compared with a year ago; the demand for men's clothing was down 6 percent. Sales of furnilure and major household appliances were off 7 percent and
13 percent, respectively.
~
RETAil TRADE STATISTICS
Nonagricultural , mployment in the District rose
e
seasonally from August to September, Average
weekly earnings in both manufacturing and nonmanufacturing industries in Texas showed an increase from June to July.
The value of construction contracts awarded in
the District during August was 6 percent below July
but 12 percent above August 1953. The total for the
first 8 months of 1954 reflected a gain of 9 percent
above a year earlier.
Under the stimulus of seasonal credit demands,
commercial, industrial, and agricultural loans of the
District's weekly reporting member banks rose 4 percent during the 5 weeks ended September 22 . Investments declined, while total deposits increased.
{Percentage changel
I
NET SALES
STOCKSI
Aug, 1954 from
line of Irad e
by area
DEPARTMENT STORES
Toiol Eleventh Dis!rkt. •....•••••.•
Corpus Christi •....••••..•.. .•...
Dallas .•.. . . . .... .. ..•..•.••...
EI Paso ....... ....• • . ..•••.•..•
Fort Worth •.•.•.• . • .. .•.. . .•...
Houston ..... . . . .....•• •. .. .• ..•
Shreveport, La ............... ....
Waco •.. .•. •............•. .•.•
Other cities ............ .. . .... . .
FURNITURE STORES
Tolol Elevenlh Didr ict ••.......•• ..
Austin . ..••...••......... .• ••.•
Dallas •••••.•....... .•.. •••••••
Houston .•...• ..•. .....•...••• • .
Pori Arthur ...........••.•....•.
Son Antonio .......... .. •.... .. •
Shreveport, La ... ............. ...
Other cities • . .. .... •••••..•....•
HOUSEHOLD APPLIANCE STORES
Tola l Elevenlh Dittric t . ..
001101. .....•........•.
1
SIO(ks al end of monlh.
n.a.-Nal availab le.
Augtl5t
1953
July
1954
_ 1
11
1
-1
3
17
0
l'
3
0
-8
6
-.
-.
3
-3
0
3
1
17
-1
5
25
- 13
1
-9
2
- 1
•
6
Aug. 1954 from
8 mo. 1954
compo with
8 mo. 1953
Augult
July
-.
1953
1954
-7
1
-6
-10
-7
-9
-12
-9
5
4
3
9
-3
-2
_5
-3
-2
-3
_5
-6
6
-6
7
4
2
5
-18
-21
-16
-3
-2'
n.o.
n.a.
n.o.
-5
l'
-8
-30
-30
-27
-25
-6
-.
" o.
4
MONTHLY BOSINESS REVIEW
151
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1947.49
COTTON PRODUCTION
= 100)
TexCl s Crop Reporting Districts
(In thou sands of
Aug.
Area
July
June
Aug .
A"".
July
J",.
lb. gross wt. )
liS
107
137
111
108
129
11 2
103
128
107
137
127
122
152
132
133
1<8
127
126
141
127
121
152
128p
123
121
139r
131p
133
131
142
lIS t
19S~
1954
Aug .
19S' 1954 1954 1953 1954 195 4 19S4 1953
Crop reporting district
SAlES-Daily av.r<lge
Eleventh District ••... . . . •..•
boles-SO~
ADJUSTEDI
UNADJUSTED
Indicated
Se ptemb er 1
a s percent of
1953
STOCKS-End of month
Eleventh District .••...••.•..
1
Ad juifed for seasonal variation.
r-Revised.
p-Preliminory.
The customer bought less for cash in August than he did
last year and used his credit more. Instalment sales were 11
percent greater, despi te the lower sales volume of hard goods,
while cash sales were down 6 percent and regular charge
account sales were up 1 percent.
Cha rge acco unt credit outstanding at department stores
rose 5 percent during August to a total 1 percent below a
year ago . Instalment acco unts were unchanged from July
but on August 31 were 5 percent higher than on the same
.-late last year.
Tnventories at department stores on August 31 were 5 pcr"ent above a month earlier and 7 percent below a year ago.
The month-to-month increase rcpresented the normal seasonal
accumulation of fall lllcrcha ndise. The lower level of total
stocks on hand , com pared with 1953, was consistent with
Ihe invcntory paUern established early this year. Merchanr1i . c 0 11 order at the end of August was up 4. percent froll1
the ~all1e datei:l 1953. The stock-sales ratio reported by a
representative gro up of stores indicated that, on August 31,
department store stocks represented a 3.3-month supply,
based on August salc •. This is the same ratio reported for
August 1952 and com pares with a 3.6-month supply on hand
on the same date in 1953.
f urni ture store sales at reporting stores in tbe District
during August rose 5 percent above July and 3 percent above
August 1953. August was the second consecutive month for
furniture stores to report sales increases over year-earlier
totals; during the first 6 months of 1954, year-to-year losses
ranged from 10 percent to 15 percent. Inven tories decreased
Ii pcrcent during August to a level 18 percent under the
same month last year. Accoun ts receivablc showed liule
change. rising 1 percent over Jul y and declining 1 percent
below a year ago.
Cotton harvesting dominated the
agricultural picture in much of the
District during September_ Harvest
was virtually completed in southern
and southeastern Texas counties
.. and is nearing completion in northcentral and northeastern
, Texas and northern Louisiana. Yields in the lauer areas
Im\r IJ ~ell relutivd), low. i\cliw 11i"' v ,~, t i" under way ill the
ew
IIi!,>!. !'b in, of Tex ... "lid in T Mexico and Arizona, with
, cry sa ti sfactor y yields.
l -N....... .. ..... . .........
, ·S.. .. . ... ... . ... . ........
2-N........ .... .... . .......
2-5........................
3 . . , . . ........... .. . .... . ..
4... . .......... .. .... . . ... .
5· N........ .. •... .• . .. .•• . .
5·5 .. . ...... . .. . . .. .. ... . ..
.400
930
175
145
18
405
60
60
548
835
143
285
39
1,101
136
119
8-5 .. . .....................
OoUos . ••.•••••.••.•.•••••
HOlISton ••. . ••. .•• • .••• •• , •
7 .... .. ... . .••.... , .... ,...
8· N . . . . ...... , .... , .. .. ,...
17
130
205
39
215
9 ......... , ....... , . ... , . ..
I O-N .•. .......... . " ... ,...
10-5 . ......... . ...... . . ,...
180
65
405
State.. . . . . . . . . . . . . . . . . .
3.375
6 ........•...•. ... ,........
180
1952
1953
.69
73
1.005
III
238
32
258
182
59
12
610
95
95
239
17
201
222
231
61
310
122
51
46
37
.44
50
71
44
60
270
76
203
157
4,317
3,808
78
253
76
SOURCE; United States Department of Agriculture.
Ginnings prior to September 16 were 1,305,380 bales in
Texas, compared with 951,752 bales as of the same date in
1953. In general , the crop in Texas is shorter in staple but
hi ghcr in grade than a yea r ago_
Colton production in the Na tion is estimated by Ihe United
Slates Department of Agriculture at 11,832,000 bales, based
on conditions as of September 1. Reports during September indicated further deterioration of the crop in central and
east Texas, the Mississippi Delta area, and parts of the
Southeast, while conditions in the irrigated sections of west
Texas, New Mexico, Arizona, and California continue favo rable. The estimated national average yield of 295 pounds
of lint per acre is 30 pounds lower than in 1953 but 23
pounds above the 1943-52 average.
The September estimate of the cotton cr op in District
states was about 200,000 bales below that of August_ Declines were recorded in Arizona, Louisiana, Oklahoma, and
Texas, while the estimate for ew Mexico was unchanged.
CROP REPORTING
DISTRICTS OF TEXAS
MONTHLY BUSINESS REVIEW
152
.In Texas, cotton production is forecast at 3,375,000 balesdown 25,000 bales from the August 1 estimate. Declines in
the Low Rolling Plains and northcentral and northeastern
regions more than offset small increases in south Texas, the
northern High Plains, and the Trans·Pecos areas.
Light rain in coastal areas of south Texas late in Septem.
ber improved prospects for small grains and other winter
feed crops in those areas, but elsewhere in the District rain
is needed urgently. Considerable acreage of oats has' been
seeded in the dust in central and southeastern counties.
Planting of the 1955 winter wheat crop continues in north·
~vestern T~xas, with some farmers in the drier areas dusting
m the gram. In extreme northern Panhandle counties mois·
ture has been .sufficient to bring early fields up to a 'stand;
these fields and some volunteer wheat are providing grazing.
.Harves~ of grain sorghums is progressing rapidly in the
Hlgh Plams of west Texas, with yields from irrigated land
turning out very satisfactorily but with most dry-land acre·
age being grazed or baled. Dry-land sorghums in most of
the southern High Plains and Low Rolling Plains of Texas
have been harvested for forage or grazed off.
. Harv~t of. a record rice crop in Texas is nearing complehon, wlth Ylelds per acre estimated at 2,650 pounds-50
pounds higher than the record yield last year. Total production in the State is now forecast at 16,430,000 100-pound
bags, or nearly 2,000,000 bags more than in 1953 and over
6,000,000 bags above the 1943-52 average. The bountiful
crop, harvested somewhat earlier than usual, has posed a
senous storage problem. Considerable on·the-farm storage
has been constructed to provide suitable space.
LIVESTOCK RECEIPTS
(Number)
FORT WORTH MARKET
August
1954
Closs
Cottle . • ......•
Calves •••... . . .
Hogs . ... . . . .•.
Shee p . .. . ... ..
I
•
.
•
.
August
1953
9B,467
30,923
31,636
44,434
30,B17
25,B44
54,332
83,024
SAN ANTONIO MARKET
July
1954
August
August
1954
80,1 86
23,422
26,401
36.5 B7
2.610
56,297
July
1954
1953
44,646
33,507
28,386
136,778
26,009
21,637
2,697
'18,807
127,077
Includes goats.
the month improved prospects for winter grasses in the eastern half of Texas and in northern Louisiana. However, even
in those sections, subsoil moisture is very lo w, and additional rains will be required for maximum production. In
the western half of the District, range feed is scarce, except
in the Big Bend area and extreme northern Panhandle of
Texas, where showers have been more frequent during the
late summer and early fall. Movement of cattle to market
has been seasonally heavy, but orderly.
A relatively strong stocker and feeder cattle demand from
the Corn Belt states and from major wheat-growing areas
has maintained prices of such cattle in the Southwest at
levels generally $1 to $2 per hundredweight higher than
those which prevailed in early August and about $1 per
hundredweight above prices a year ago. Stocker sheep prices
also continue strong to slightly higher, with considerable
demand for animals to restock ranges and to send to feed lots.
The early winter commercial vegetable crop in south Texas
is making excellent progress. Harvest of the Texas Panhandle lettuce crop is nearing completion. Shipment of the
new crop of ~itrus fruits from the Lower Rio Grande Valley
began early m September; the fruit is of good size, and the
trees are in excellent condition.
Cotton prices advanced nearly % cent per pound following the announcement of the September 1 forecast of
production. Prices near the end of September were about
1 cent above a month ago and 2 cents above a year earlier.
It is reported that farmers are offering current ginnings
rather freely, although much of the low-quality, short.staple
cotton of the eastern half of the District is not wanted by
the trade and, hence, is going into the Commodity Credit
Corporation loan. Loan entries in the Nation through September 10 totaled 67,902 bales.
Continued hot, dry weather during most of September
caused further deterioration of ranges and pastures in virtually all sections of the District. Rains the latter part of
~
The Secretary of Agriculture has announced that, because
of the very large supplies of wheat, the 1955 wheat crop will
be supported at not less than a national average price of
FARM COMMODITY PRICES
CROP PRODUCTION
Top Prices Paid in Local Southwest Markets
Texas and five Southwestern States
(In thousand s of bushels)
Five sovlnwede rn Ifotes 1
Tellas
Estimated
Crop
Cotton 2 , ••• •••• •
Corn ••• . •. •••• •
Rice 3•••••••••• •
Sorghum grain •••
Hoy' .. . ....... .
Peanllb 5 ••••••• •
Irish potato!ls •. ..
Sweet pototoes •••
Sept. I,
1954
, 953
3,375
34,054
16,430
77,146
4,317
33,874
'.4,924
55,198
1,522
102,550
2,100
1,705
179,400
2,484
2,550
I.4B5
Average
1943-52
Estimated
Sept. I,
1954
3,239
51,266
5,065
51.290
10,162
79,379
30.292
86.515
52,991
27,OBO
66,156
1,546
4,823
156,050
4,991
5.063
299,890
6,099
10.70 5
11,51 1
2B2,635
3,818
4,047
Ari:zona, Louisiana, New Mexic:o, Oklahoma, ond Texas..
In thousands of bales.
$ In thousands of bags c:ontaining 100 pounds eac:h.
, In lkousands of tons.
S In thousands of pounds.
SOURC~ United States Oepartment of Agriculture.
1
1
Average
1953
6.957
1943-52
4,791
9 1,286
20,B39
94,745
4,740
395,214
B.303
13,894
Commodity and market
Unit
COnON. Midd ling 15 / 16·in,h, Dallas ....
WHEAT, No.1 hard, Fort Worth .•........
OATS, No.2 white. Fort Worth .•. . .......
CORN, No.2 yellow, Fort Worth . ........
SORGHUMS, No.2 yellow, Fort Worth . ...
HOGS. Chaice, Fort Werth •.. . ...... ....
SLAUGHTER STEERS, Choice, Fort Worth ...
SLAUGHTER CALVES. Choice, Fort Worth...
STOCKER STEERS, Choice, Fort Worth . .. ..
SLAUGHTER SPRING LAMBS, Choi,e, Fort
Worth .............................
BROILERS, south Texas ... ...............
EGGS, curront re'eipts, Fort Worth .•••....
WOOL, 12·months, west Texas .•.•.......
MOHAIR, kid, west Texas ••••• . .. . .•. .. .
lb.
b,.
b,.
b,.
1 No soles reported.
2 Clean basis.
cwl.
cwl.
cwl.
cw~.
,wi.
cwl.
lb.
,ose
lb.
lb.
Comparable Comparable
Week endod
week
week
Sept.21,19.54 last month
lost year
$
.3425
2.63
1.01 Yl
1.94
2.62
20.50
25 .00
17.50
20.00
1 B.OO
.23
9.50
('I
1.00
S
.3385
2.60
.9414
$
.3230
2.49
2.70
23.75
23.50
17.50
19.00
.97*
1.97*
2.80
25.75
24.00
18.00
17.00
19.00
19.00
1.90
.26
10.00
.26
' 1.80
21.85
1.05
1.01 Y2
•
MONTHLY BUSINESS REVIEW
CASH RECEIPTS FROM FARM MARKETINGS
153
CONDITION STATISTICS OF WEEKtY REPORTING
MEMBER BANKS IN LEADING CITIES
(In thousands of dollars)
Eleventh Federal Reserve District
Cumulative receipts
June
Stole
1954
lin thovsand. of dollars]
January-June
1953
1954
160,171
115,717
$ 192,914
62,005
220,852
656,431
73,017
230,473
674,720
$1,215,176
Sl,283,277
Arizona ................. .. . .
louisiana .•......... .........
New Mexico ........• . . . . •.. .
$ 28,990
Oklahoma . . • . ......•... . •.. .
Texas ............ . , .... , .. .
89,112
118,999
26,412
11,927
9,765
82,273
119,636
Totol ••.... . .•.• .. . . •..•. •
$256,615
$252,013
11.376
10,138
1953
Item
Sept. 22,
1954
Sept. 23,
1953
Aug. 18,
1954
112,153
ASSETS
Commercia l, industrial, and agricultural
loons •.......................•....... . .
Loons to brokers and dealers In securities ......
SOURCE, United 510les Oeportment of Agriculture.
$2.06 per bushel. This is 82:Y~ percent of current paritythe minimum permitted by law. The Secretary also has announced that, in view of reduced feed production in drought
areas, land laken out of production because of acreage allotments on basic crops in 1955 may be planted to any crop
except those under production controls.
Cash receipts from farm marketings in District states
during the first half of 1954 were 5 percent helow those in
the first half of 1953. Largely because of a decline of nearly
1,000,000 hales in the prospective cotton crop of the District, cash farm income in 1954 is expected to be 5 to 10
percent lower than in 1953. Partially offsetting the declines
in cotton, peanut, and corn production will be larger crops
of wheat and grain sorghums and larger marketings of cattle
and calves.
Other loons for purchasing or carrying
securities ........................ ... . .. •
$1,249,161 $1,156,204 $1 ,203,382
6,767
9,661
9,406
Real estate loons . .................. . .... . .
loans to banks ............................
AU other loans ............................
89,647
153,394
9,258
402,841
71,463
135,566
2,494
411,690
13,409
409.209
Gross loans ................ .. ...... .. ..
Less reseryes and unallocated charge-offs ..
1,913,088
17,855
1.789.098
18,457
1,876,251
17,408
U. S. Treasury bills ............. . . . ... . .....
U. S. Treasury certificates of indebtedneS! . . . . . .
U. S. Treasury notes ................. . ......
U. S. Go .... ernment bonds {inc. gtd. obligations) .. •
Other securities .. ....... . ... .... .. ... ......
160,250
169,664
205,256
868,676
212,870
114,790
262,494
207,411
620,789
190,581
Total in .... estments ... •............ .. ... . ..
Cash items in process of collection .... ........
Balances with bonks in the United States . . .....
Balances with bonks in foreign countries ........
Currency and coin . ... . ....................
Reserves with Federal Reserve Bonk ...........
Other asseh ............... . ... . .. ........
1.616,716
334,321
534,373
1,822
45,442
631,897
109,209
1,396,065
323,741
485,196
1,753
48,425
576,748
86,417
TOTAL ASSETS .................... ... •
5.169.013
4.688 1986
5!064,920
UABIUTIES AND CAPITAL
Demond deposits
lndiyiduals, partnerships, and corporations ....
United States Government .................
States and political subdiyisions . ...........
Banks in the United States •.. ..............
Banks in foreign countries ...•. ............
CertiAed and officers' checks, etc ....•......
2,716,762
79,915
172,621
1,029,652
12,267
46,546
2,530,277
104,515
190,512
641,567
10,336
47,365
2,669,9 16
, 10,027
160, 157
975,769
12,627
51,613
Net loans ......... . . ............. . .....
--1,695,233 1,770,641
89.565
151,280
1,858,843
249,707
156,630
202,953
885,511
206.685
--1.701,486
303,842
476,996
1,416
44,793
577,763
99,761
Total demand deposits •.••.•...... ... ..
Treasury spending in the current
fiscal year ending June 30, 1955,
will total $64.,000,000,000, and revenues will amount to $59,300,000,000, according to the revised estimatcs of the Bureau of the Budget. As compared with J anuaey estimates, the new figures are $1,600,000,000 lower for
expenditures and $3,300,000,000 lower for receipts, increasing the budget deficit to $4,700,000,000 as against the J anuary estimate of $2,900,000,000. On a cash basis, the deficit
is expected to run about $2,100,000,000. The downward
revision of receipts- the principal change reflected in the
new totals- is attributable largely to greater than projected
tax cuts this year and anticipated lower yields from corporate and individual income taxes.
Loan trends at weekly reporting member banks in the District during the 5 weeks ended September 22 showed considerable evidence of a seasonal pickup in business and other
credit demands. Commercial, industrial, and agricultural
loans of these banks rose in each week, with the total increase
amounting to $4·5,779,000, or 4 percent. During most weeks,
commodity dealers, wholesale and retail trade establishments,
manufacturers in the food and liquor lines, and grain and
milling concerns added substantially to their outstanding
bank borrowings. Manufacturers in the petroleum and related products industries, construction firms, and sales
.. finance companies also borrowed on balance. The increase in
, commercial, industrial, and agricultural loans to a total of
$1,249,161,000 on September 22 stands in rather sharp contrast to the reduction of $5,168,000 during the comparable
weeks of 1953.
4,060,003
3,724,574
3,960,511
Time deposits
lndi .... iduals. partnerships, and corporations ....
United States Gayernment ...... . . . .. . .....
Postal sa .... ings ..... . ........ . .. . .........
States and political subdiYblons ............
Banks In the U. S. and foreign countries .... . .
566,164
13,365
451
98,640
469,929
10,129
450
81,924
1,938
563,378
9,805
451
99,035
1,883
Total time deposits .. .................. .
699,823
584,370
694,552
Total deposits .......................
BrIIs payable, rediscounts, etc .•..............
All other liabilities ................ ... .... ..
Total capital accounts ...... .. ............. .
4,759,826
2,000
59,319
347,666
4,308,944
15,000
44,656
320,366
4,675,063
0
44,674
344,963
TOTAL LIABILITIES AND CAPiTAL .........
5,169,013
~688.9a6
5,064,920
1,203
Changes in other categories of loans included an increase
of $2,114,000 in loans secured by real estate and decreases
of $6,368,000 in "all other" loans and $4,151,000 in loans to
banks. Loans for financing security transactions were virtually unchanged. On September 22, total loans of these banks
were $1,913,088,000, as comparcd with the year-earlier figure of $1,789,098,000.
The weekly reporting member banks reduced their investments between August 18 and September 22 in the amount
of $84,770,000, or 5 percent, with Treasury bills accounting
for somewhat more than the total decrease. Holdings of Government bonds declined $16,835,000, but additions to Treasury certificate and note portfolios had the effect of offsetting
most of that reduction. Investments in municipal and other
non-Government securities rose moderately .
Deposits of these banks rose $84,763,000, or 2 percent,
during the 5 weeks to reach a total of $4,759,826,000 on September 22. Increases of $53,34,3,000 in demand deposits of
banks and $48,864,000 in the demand accounts of individ-
154
MONTHLY BUSINESS REVIEW
CONDITION STATISTICS OF ALL MEMBER BANKS
CONDITION Of THE fEDERAL RESERVE BANK Of DALLAS
Eleventh Federal Reserve District
(In thousands of dollaul
(In mUllans of dollau)
Item
ASSETS
Loans and discounts •••••••••••• •••••••••••••••
United States Govemment obllgationt ••••••••••.•
Other securities •••••••.•••••••••••••••••••••••
July 28,
1954
Cash In vc:u.rlto •••••••••• •• ••••••••••••••••• • ••
Balances with banks In the United Stales ••••••••••
Balance, with banks In foreIgn countriel •••••••••••
Cash Items In prOCess of collection.
Other assetse ••••••••••••••••••••••••••••••••
$3,060
2,633
477
911
121
1,100
1
309
152
$2,902
2,396
434
951
124
909
2
288
132
$3,197
2,342
477
952
135
1,007
1
299
145
TOTAL ASSETS ....... , .................. ,
8164
8,138
8.555
LIABILITIES AND CAPITAL
Demand deposits of banks .................... .
Other demand deposits ••••••••••••••••••••••••
Time depos.its ••••••• ••• •• ••• •••••••• , ••••••••
1,087
5,938
1,078
828
51H
904
982
5,840
1,082
Total deposits ••••••••••••••••••••••••••••••
Borrowingse •••• •••••••••••••••••••••••••••.•
Other lIabilitiese •••••••••••••• • • •• ••••••••••••
Total capital accaunbe, •••••••••••••••••••••••
8,103
2
56
603
7,476
48
53
561
7,904
5
47
599
TOTAL lIAB1UTlES AND CAPITAL......... . ..
8,76"
8.'38
8,555
Reser .... es with Federal Reterve Bank ••••••••••••••
II •••••••••••••
e-Estimated.
uals and businesses were the principal factors in the rise,
Demand deposits of the United States Government declined
$30,112,000; total time deposits increased $5,271,000, De·
posit expansion during the 5 weeks was associated, in part,
with gains from Treasury operations and a net flow of funds
into the District.
Gross demand deposits of all member banks in the District
averaged $6,992,543,000 during August, reflecting increases
of $118,043,000, or 1.7 percent, over July and $437,355,000,
or 6,7 percent, over August 1953. Reserve city member banks
accounted for 76 percent of the J uly-to·August rise, which
was weighted rather heavily by the expansion in interbank
deposits. Time deposits declined $3,354,000, or 3,1 percent,
from July to August, due entirely to the reduction at country
member banks. At this lower level, however, time deposits
were $174,687,000, or 19,3 percent, above the comparable
year.earlier total.
Debits to deposit accounts reported by banks in 24 cities
of the District declined 5 percent during August as compared
with July but were 6 percent above August 1953, The lower
volume of spending in August was general; practically all
cities reported decreases, The annual rate of turnover of
deposits also declined, from 18,1 for July to 17.2 for August,
The rate for August 1953 was 16.8,
GROSS DEMAND AND TIME DEPOSITS Of MEMBER BANKS
Eleventh Federal Reserve District
(Avereliles ef deily figurel. In theusands of dollars)
COMBINED TOTAL
Date
Gron
demand
AugUS11952 ... $6,546,078
August 1953 ... 6,555,188
April 195.4 •••• 6,802,386
May 1954 •••• 6,752,376
June 1954 •••• 6,804,576
July 1954 ..... 6,874,500
August 1954 ••• 6,992,543
Time
RESERVE CITY BANKS
Gross
demand
Time
COUNTRY BANKS
Gran
demand
nme
758,238 $3,123,616 $-41-4,837 $3,-422,462 $3-43,401
903,610 3,153,585 -495,813 3,401,603 J.07,797
1,057,137 3,295,363 594,744 3,507,0 23 462,393
1,073,865 3,263,439 599,299 3,488,937 474,566
1,083,140 3,313,244 605,899 3,491,332 477,241
1,081 ,651
3,349,903 600,870 3,524,597 480,78 1
1,078,297 3,439,030 600,994 3,553,513 477,303
Sept. 15,
1953
Sept. 15,
1954
Item
August 25, August 26,
1954
1953
Total gold certificate reserves •••••••••••••.•
Discounts for member banks ••••••• ••• •• •••••
Other discounts and advances. ••••••••.•••••
U. S. Govemment securities •••• •••••••• .• •• ••
Total eaming aneh •••. •• ••.••••••.••••• ••
Member bonk reserve deposits .............. .
Federal Resenenotes in QctuQI circulation .•••••
736,613
15,570
$748,661
1,829
4,935
942,565
949,329
9U,842
730,676
o
995,668
1,011,238
964,828
734,834
August 15,
1954
$ 877,173
329
4,230
938,207
942,766
1,127,3 15
73 0,275
Between August 15 and September 15, member banks drew
down their reserve deposits at the Federal Reserve Bank of
Dallas in the amount of $212,473,000, The reduction reo
fleeted, in part, the investment of funds freed through the
lowering of reserve requirements in July and August, The
use of excess reserves for purchasing securities, together with
other interdistrict payments during the month, contributed,
in turn, to a net reduction of $128,512,000 in the gold cer·
tificate reserves of this bank. Other changes in the condition
of the Federal Reserve bank between August 15 and Septem.
ber 15 included an increase of $6,563,000 in total earning
assets, reflecting principally a rise of $4,358,000 in holdings
of Government securities and an expansion of Sl,500,000 in
discounts for member banks, On September 15, Federal Reserve notes of this bank in actual circulation totaled $730,·
676,000, as compared with $730,275,000 on August 15 and
$734,834,000 on September 15, 1953.
~
~
On September 20, the Treasury announced that it would
offer for cash subscription on September 23 $4,000,000,000
BANK DEBITS, END·Of·MONTH DEPOSITS
AND ANNUAL RATE Of TURNOVER OF DEPOSITS
(Amounts in thousands of dollars)
DEBITSl
DEPOSITS~
Percentage
change fram
City
August
1954
ARIZONA
97,294
Tucson •• ••••••••.••• $
LOUISIANA
44,122
Monroe •••••••••••••
Shreveport ••••••••••
190,893
NEW MEXICO
23,634
Roswell •••••••••••••
TEXAS
Abilene •••••••••••••
Amarillo ••••••••••••
Austin •• • ••• •• •• ••••
Beaumont • ••• • ••• •• •
Corpus Christi ••••••••
Corsicana •••••••••••
Dallas .••••••• •• • •••
EI Paso •••••••••••••
Fort Worth •••••• • • ••
Galveston •.•...•••••
Houston •••••.•••.•••
Laredo •• •. •. •• •••••
Lubbock ••••••••••••
Port Arthur •••• • ••• ••
San Angelo ••• •• •••••
San Antonio •••••••••
Texarkana ' •• ••..• •..
Tyler •••••••• • •• •• ••
Waco ••••••••••••.•
Wichita Falls •••••••••
Aug.
1953
July
1954
Annual rate of turnover
August 31,
1954
Aug.
195-4
Aug.
July
1953 1954
11
-4
87,350
13.6
13.0
1-4."
-8
-3
-9
-6
42,373
178,461
121
13.2
15.4
14.6
13.4
14.5
7
_ 5
28,898
9.8
97
10.3
53,317
7
-6
130,673
4
-4
114,104
12
-5
107,241 -15
-6
174,993
19
6
12,548
10
2
1,674,252
11
-6
172,089 -10
-6
500,347
6
-8
72,981
2
-2
1,667,11 0
5
-5
16,341
-4 -12
_1
98,090
15
5
'5,497
-4
_5
39,094
13
_1
7
40",752
_4
16,462 -11
_2
60,067
9
83.os8
18
5
83,212
7
0
53,550
103,323
104,121
93,271
125,707
20,702
924,321
124,534
338,739
68,072
1,121.964
17,798
80.127
40,253
47,660
317,101
17,550
53,981
64,780
101 ,536
12.0
15.2
13.2
13.B
17.2
7.3
22.0
16.9
17.9
13.0
18.2
11.2
).4..6
1.4.0
10.1
15.4
11.3
13.1
15.7
9.7
11.9
).4.8
12.5
16.7
16.4
7.0
21.0
191
17.3
10.3
18.1
11.3
13.6
14.0
9.2
1.4.6
11.9
12.6
13.4
9.6
12.7
16.2
13.3
14.6
16.8
7. 1
22.9
18.1
19..4
13,2
19.4
12.4
).4.4
15.1
10.9
151
11.8
12.8
15.1
9.6
$-4,156,172
17.2
16.8
18.1
Total-24 cities •••• $5.882,171
6
-5
$
•
1 Debits to demand depolit accounts of individuals, partnerlhips, and corporations and of •
stales and p~itical subdivisions.
I Demand deposit accounts of individuals, partnerships. and corporations and of sto tes and
politico I subdjvisiorll.
a These figures include only one bonk In Texarkana, Texas. Total debits for all bonks in
Texarkana. Texas·Arkansas, Including two banks located In the Eighth District, amounted to
$33,259,000 for the month of Augult 1954.
MONTHLY BUSINESS REVIEW
155
CRUDE OIL, DAILY AVERAGE PRODUCTION
NEW MEMBER BANK
The Southern National Bank at Tallulah, Tallulah,
Louisiana, a newly organized institution located in the
territory served by the Head Office of the Federal ResenJe Bank of Dallas, opened for business September
20,1954, as a member of the Federal Reserve System.
The new bank has capital of $100,000, surplus of
$100,000, and undivided profits of $50,000. The officers
are: A. M. Stewart, President; J. W. Love, Vice Pre$ident; Lamar T. Loe, Vice President; and Harvey T.
Mounger, Vice President and CG,$hier.
{In thousands of barrels}
Change from
August
Area
August
July
August
July
195-4 1
1953~
195-4 1
1953
1954
3,163.6
2,853.1
631.1
1,099.5
245.8
76.4
800.3
197.5
113.0
3,418.9
6,582.5
2,940.6
2,627.0
575.4
1,016.9
218.5
82.0
734 .2
201.9
111.8
3,341.3
6.281.9
-288.6
-292 .6
-77.3
-106.8
-40.2
7.1
-75.4
6.6
-12.6
-147.2
-435.8
-65.6
-66.S
-21.6
-24.2
-12.9
I.S
-9.3
2.2
-1.4
-69.6
-135.2
2,875.0
2,560.5
553.8
992J
205 .6
83 .5
72-4.9
20-4.1
110.4
OUTSIDE ELEVENTH DISTRICT . 3,271.7
UNITED STATES . ...... .. ... 6,146.7
ELEVENTH DiSTRiCT ....... '. '
Texas .•................
Gulf Coast ............
West Texas ...•.......
East Texas (proper} . . ...
Panhandle ..•..... . ...•
Rest of Stote ..•..... . ..
Southeastern New Mex.ico ..
Northern Louisiana .... . ...
SOURCESI 1 Estimated from American Petroleum Institute weekly reports.
2 United States BureauofMines.
of 10/; -percent notes, to be dated October 4 and to mature
May 15, 1957. Subscriptions from commercial banks, for
their own account, were restricted in each case to an amount
not exceeding one-half of combined capital, surplus, and
undivided profits as of June 30. Payment for the new notes
will be permitted by credit to Treasury Tax and Loan
Account.
Daily average crude oil production in the District rose moderately
during September, after declining in
August to the lowest level in more
than 2 years. Production during the
first 10 days of September averaged 2,914,000 barrels per
• day, which is 39,000 barrels higher than in August although
221,000 barrels below the same month a year earlier. A
smaller increase occurred in the Nation during early Sep.
tember; daily average production, at 6,158,000 barrels, was
down 399,000 barrels from September 1953.
The upturn in District crude production in September
apparently will be short-lived. The October daily oil allow.
able announced by the Texas Railroad Commission is 59,138
barrels below the level prevailing on September 11.
Total imports of crude oil and refined products showed a
small decline during August and early September, with residual fuel oil accounting for the decrease; crude imports rose
moderately. In the 5 weeks ended September 10, total im.
ports amounted to 988,000 barrels per day, or 35,000 barrels
higher than in the comparable period last year.
Refinery crude runs in the District turned upward during
August and the early part of September, after registering declines for five consecutive months. August refinery runs averaged 1,989,000 barrels per day, which is 51,000 barrels above
July although 42,000 barrels lower than August a year ago.
Runs in early September, however, were slightly higher than
the average for September 1953. Crude runs in the Nation's
refineries also rose in the latter part of August and early
September. Nevertheless, the August average of 6,859,000
~ barrels per day was moderately below that of July and was
II' 304,000 barrels less than a year earlier.
The demand for petroleum products in the Nation has
continued to lag slightly behind year-earlier levels. During
the 5 weeks ended September 10, the demand for major refined products at refineries and bulk terminals was about 1
percent less than in the same weeks of last year. While the
demand for kerosene and distillate fuel oil showed increases
and that for gasoline was practically the same as a year
earlier, the demand for residual fuel oil was down 11 percent from a year ago.
Wholesale prices of major petroleum products in the principal markets of the Nation remained generally steady during August and early September. Some firming has occurred,
however, in prices of residual fuel oil in Mid-Continent
markets.
The Nation's stocks of major refined products have been
following seasonal trends, with gasoline stocks declining
and heating oil stocks rising. Although they have declined
over 26,000,000 barrels from the seasonal peak of early April,
gasoline stocks still appear large, especially since the end
of the heavy motoring season is approaching. In fact, primary stocks of gasoline amounted to 153,300,000 barrels on
September 10, or 8 percent above the high level of the corresponding date last year. Residual fuel oil stocks also were
substantially higher than a year earlier, but distillate fuel
oil stocks were slightly lower. Crude stocks declined 6,400,000 barrels during August and the first part of September
and on September 11 totaled 273,300,000 barrels.
Nonagricultural employment in
the District states during July can·
tinued the rise of the previous
month. Total wage and salary employment increased to 3,850,800, or
2,200 above the June level but 5,400 below the level of July
1953. The reduction of 6,300 in government employment
between June and July was more than offset by gains in
other categories.
The July increase in the number of nonagricultural wage
and salary employees did not apply, however, to each of
the five states lying wholly or partly within the District. Total
employment in both Texas and New Mexico increased substantially over June, while the level of nonagricultural employment in Arizona remain unchanged. Oklahoma reported
a slight decrease, and Louisiana showed a sharp decline.
MONTHLY BUSINESS REVIEW
156
NONAGRICULTURAL EMPLOYMENT
tries also were up from a year ago, despite a shorter work-
Percent change
July 1954 from
Number of persons
July
Type of employmenf
July 1954p
Totell nonClgriculturClI
wage and salary workers . . , 3,650,600
Manufacturing • .••••••••.
707,500
Nonmanufacturing • . •.. . . . 3,143,300
Mining ......... ...... •
236,700
Construction ••••• •••• ••
298,400
Service ••• • •••••.•.••.
G overnment • ••.•••• . ••
394,600
980,300
158,700
458,900
615,700
J"".
July 1953
June 1954
1953
1954
3,656,200
736,900
3,119,300
3,648,600
705.500
3,143,100
230,900
295,000
234,500
-.1
-4.0
.8
2.5
1.2
.1
.3
0
.9
.4
411,.400
978,900
393,700
978,900
158,600
458,100
622,000
_4.1
.2
.1
.1
.2
297,300
Transportation and public
utilities .•••... . •. ••. •
Trade • . .....•...••.• •
Finance ... .. .. . . •..•. .
153.700
449,400
600,000
.1
3.3
2.1
2.6
Manufacturing employment, which gained 2,000 to reach
a total of 707,500, accounted for the bulk of the increase in
nonagricultural employment. On the basis of incomplete data,
it appears that manufacturing employment in August showed
little change from July. It is estimated unofficially that manufacturing employment in the District in September totaled
about 715,000. This estimate reflects seasonal increases in
chemicals, petroleum and petroleum products, furniture and
fixtures, apparel, and food-processing employment.
The employment picture in the District and the Nation is
tending towards stability, following earlier declines. Recent
increases in employment have been seasonal in nature. Trade
and manufacturing activities are experiencing a seasonal
preholiday expansion. Although below postwar records, the
construction industry is still supplying a large volume of
jobs. Th.is situation should continue, in view of further easing of the mortgage market and the high level of construction contracts awarded during July and August.
Average weekly earnings in both manufacturing and nonmanufacturing industries in Texas during July were up
from June and higher than in July 1953. These increases
are due to higher wages, as the number of hours worked in
manufacturing industries showed no change from June and
a slight decrease from July 1953. The average of $72.86
per week in manufacturing was 3 percent above the level
of July 1953. Weekly earnings in nonmanufacturing indusVALUE OF CONSTRUCTION CONTRACTS AWARDED
lin thousands of dollars)
August
1954p
January-August
August
1953
July
1954
1954p
1953
ELEVENTH DISTRICT .. $ 105,220 $
94,245 $ 112,078 $
876,817 $
602,292
R&Sidential ... .. . .
43,064
29,245
52.625
405,892
351,638
All other ...... . ..
62,156
65,000
59,453
470,925
450,654
UNITED STATESI, ... 1,572,865 1,414,408 1,836,935 12,661,009 11,115,588
Residential ... ....
692.736
507,560
745,440
5 ,418,867
4,419,463
All other ....... ,.
860,129
906,848 1,091,495
7,242,142
6,696,125
I 37 states east of the Rocky Mountains.
p- Preliminary.
SOURCE~ F. W. Dodge Corporation.
The value of District construction contracts awarded in
August totaled $105,220,000, which is 6 percent less than
July awards but 12 percent greater than awards in August
1953. Contracts for residential construction in August declined to $43,064,000. Although it was 18 percent less than
in the preceding month, the August r esidential total was 47
percent above August 1953. Nonresidential contracts increased slightly over July but were 4 percent helow the level
of a year earlier.
'
_1.0
I Arizona. Louisiana. New Melilico, Oklahoma, and Texas.
p-Preliminary.
SOURCE, State employment agencies.
Area and type
~
week.
five Southwestern Stales 1
For the first 8 months of 1954, construction contracts in
the District were valued at $876,817,000. Compared with the
same period last year, this total renects a gain of 9 percent;
residential and nonresidential awards were up 15 percent
and 5 percent, respectively. The District increase in both residential and nonresidential construction was smaller than that
for the Nation during the same period. The national increase
was 2.i percent in residential construction and 8 percent in
nonresidential construction.
BUltDING PERMITS
8 months 1954
Percentage
change in
va luation from
August 1954
Aug.
City
Number
Valuation
LOUISIANA
Shreveport . . . .
350 S 3,065,041
137
TEXAS
Abilene ...... .
138
866,901 -10
Amarillo . .... .
213
2,063,189
160
Auttin ....... .
322
3,099,396
8
Beaumont. . . ..
389
1,026,220
150
418
44
Corpus Chritti . .
2,315,261
Dallas .. . . .. . . 2,636 13,113,2 08
78
489
EI Paso ...... .
2,521,005
109
Fort Worth .... .743
3,669,422
26
786,964
Galveston .... .
97
501
Houston .. ..... 1,451
13,537,373
66
Lubbock ... , ..
388
1,902,885
93
Pori Arthur . ...
162
367,263
99
San Antonio . . . 1,464
7 ,114,275
113
Waco .. . .....
1,482,965
271
82
Wichita Falls . . .
110
622,765 -15
Tola l-16 cities .. 9,641 $57,554.153
July
1953 1954 Number
71
Valuation
Percentage
change in
valuation
from 8
months
1953
- 9
2, 887
16,818,80 1
7
-73
49
30
86
-27
1,116
1,719
9,445,780
13.278,905
5,851,979
52
-7
25
18
20
31
5
-5
13
9
53
16
-3
30
8
$409,458,858
15
2,212
1,924
25,810,133
5,884,358
3,738
23,338,151
94,981,593
16,813,545
29,442,645
4,289,908
96,64,,763
18,372,570
2,478,227
33,907,039
10,100,461
_4 17,633
-23 3,554
0 5,903
195
818
7 8,680
- 3 2,662
25 1,106
91 11,596
-28 1,974
-57
981
1 68,505
The rise in consLruction activity durin g ]954 is illustrated
further in a comparison of the number of dwellings provided
for by construction contracts awarded. New dwelling units
provided in Texas during the first 8 months of 1954 totaled
31,453, compared with 29,808 for the same period of 1953.
Not only have more units been provided in 1954 than in
1953, but the average valuation per unit in the first 3
months of 1954, was $11,194, or $615 per unit more than
in 1953. In 1954 as in 1953, the bulk of new residential
units is being constructed by the speculative builder. During the first 8 months of 1954., onc-family units contracted
by owners for construction for future occupancy amounted
to less Lhan 7 percent of new one-family units. During the
same period of 1953, owner·occupied units accounted for t
almost 3 percent of such new units.
4
@FedFRASER