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MONCYHLG)(
BUSINESS
FEDERAL
REVIEW
RES E R V E
Vol. 39, No. 9
BANK
o
F
DALLAS
September 1, 1954
DALLAS, TEXAS
CRUDE OIL EXPLORATION AND PRODUCTION IN THE SOUTHWEST
JACK
D.
Petroleum Economist
Federal Reserve Bank of Dallas
COLCLOUGH,
The Southwest and oil! Oil and the Southwest! The one
generally is associated with the other. It is understandable
that this relationship should exist, since for 50 years the
Southwest has been an important oil.producing region, and
for almost 30 years it has been the principal source of supply
of the Nation's petroleum needs.
During the 20th century, the Southwest's oil industry has
developed from practically nothing to a tremendous, com·
plicated, and highly technical industry. All phases of the oil
industry are represented in the Southwest - production, refining, transportation, and marketing. Neverthelcss, the major
emphasis in this region has been on production_
The first oil producion of consequence in the Southwest
occurred at Corsicana, Texas, where oil was discovered in
1894 while drilling for water. This field, however, was merely
a prelude to the development of the region's oil resources_
It was the blowing-in of the tremendous gusher at Spindletop,
near Beaumont, on January 10, 1901, which opened up the
Southwest to oil exploration. This discovery well, flowing at
an initial rate of 75,000 to 100,000 barrels per day (or about
one-halI the total of all other wells in the Nation), stirred
world-wide interest and made people aware of the region's
great oil potentialities.
For several years after the Spindletop discovery, exploration tended to be concentrated on the Gulf Coast, but the discovery of the huge Glenn Pool near Tulsa in 1905 shifted
attention from the Gulf Coast to Oklahoma. Many other
important discoveries were made in Oklahoma in subsequent
years, and this State led the Southwest in oil production
from 1906 to 1928. In the latter year, Texas forged ahead
and, since, has maintained its position as the largest prodncing state. Oil was discovered in Louisiana as early as 1902;
New Mexico, ho"ever, was the last of the four southwestern
states to have production, with the Grst commercial development of its oil resources occurring in 1924.
Oil production in the Southwest has shown an almost steady
increase during the past half century. While production in
the individual states generally has followed a rising trend,
the growth pattern has not been as persistent as that of
the region as a whole. Three of the four states - Texas,
Louisiana, and New Mexico - posted new highs in production last year; Oklahoma's peak production was reached in
1927. In the postwar years, all of these southwestern states
have experienced marked increases in production.
Total crude oil production in the four southwestern states
in 1953 amounted to 1,553,000,000 barrels, representing 66
percent of the Nation's production and 33 percent of the
world's production. Texas alone accounted for a little more
than 1,000,000,000 barrels.
The Southwest's oil resources are widely distributed over
the region . Oil production was reported last year in 304
SOUTHWEST'S SHARE OF NATION'S
CRUDE OIL PRODUCTION
1953
$ OU ItCE U
S. B~r ....
ol M'" n ..
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
126
MONTHLY BUSINESS REVIEW
CRUDE OIL PRODUCTION IN SOUTHWEST
1900-1953
_NEWME XICO
~OKLAHOMA
tiill~
LOUISIANA
~TE XAS
600~----~------~-----+------~-----+------+---~"~
SOURCE:U.S. Bureou of Min ...
of the 427 counties and parishes of the four-state area_ The
most important producing areas are the Permian Basin and
the Gulf Coast. The major portion of Texas oil production
comes from these two areas. Almost all of New Mexico's
production is derived from the Permian Basin fields, while
over four-fifths of Louisiana's production is from the Gulf
Coast.
interpretation of data obtained from seismic, gravity meter,
and magnetometer surveys_Trained personnel are needed for
the vastly improved drilling rigs, and specialists have found
places in activities associated with drilling, such as well
cementing, mud control, perforating, acidizing, and fracturing. Meanwhile, the petroleum engineer has become a key
person in planning the development and production of the
oil reservoir.
Exploration and Production Activities and Institutions
While it lay buried in limestone and sand rcservoirs for
millions of years, the Southwest's oil was of no value until
means were found to locate and produce it. Hence, the activities and institutions which have been associated with, and
necessary to, the discovery and production of oil naturally
occupy a vital place in the Southwest's oil industry, as well
as in the region's over-all economy. Moreover, some of the
activities and institutions developed in connection with the
Southwest's oil production have contributed to the discovery
and production of oil throughout the world.
Locating and producing oil today is the work of specialists,
the increasing use of whom has been necessitated by technological advances in the industry. At the same time, these
advances have been largely the product of the specialists or
scientists employed by the industry_ Geologists, geophysicists,
and other scientifically trained personnel are needed Lo carry
on the various oil-prospecting techniques, such as surface
geology studies, core analysis, electric log analysis, and the
While individuals specializing in most phases of oil exploration and production can be found in the southwestern
producing divisions of one or another major oil company,
the major oil companies -- as well as the smaller producing
companies and independents -- usually depend upon other
firms to handle under contract many of the specialized activities involved in oil exploration and production.
Leasing
Although a geological or geophysical crew frequently precedes a lease man into an area, the lease man usually is the
first, and sometimes the only, contact the residents of an
area have with the oil industry_ The lease man goes to the
owner of a piece of land to secure an oil and gas lease, which
permits a company or individual to drill wells and produce
any oil or gas discovered. The lease man may be an employee
of the land department of a large oil company; he may he
working for an independent operator; or he may be a lease
broker or private lease man who is assembling leases either
MONTHLY BUSINESS REVIEW
ESTIMATED ACREAGE UNDER LEASE
January 1, 1954
Acreage under lease
Total
la nd oreo
Tellos ............. .
28,903,680
77,767,040
44,179,840
168,648,320
Southwest . .... ... .
319,498,880
Louisiana ••• ..• . • . •••
New Me.ico ........ .
Oklahoma . .... ..... .
Total
11,450,000
Proven
productive
1,200,000
Nonproductive
10,250,000
13,800,000
800,000
17 •.400,000
72,500,000
1,300,000
3,500,000
69,000,000
115, 150,000
6,800,000
108,350,000
13,000,000
16,100,000
SOURCE: Independent Petroleum Association of America.
for a specific client or for his own account for resale to
others,
Land under oil and gas lease in the four southwestern
states at the beginning of 1954 amounted to 115,000,000
acres, or 36 percent of the total leased acreage in the Nation,
according to estimates of the Independent Petroleum Asso·
ciation of America. Around two·fifths of the total land area
in each of the States of Louisiana, Oklahoma, and Texas
was under lease, while in New Merico about one· fifth was
leased.
The bulk of the leased acreage in all four states was non·
productive or unproven . Only 6,800,000 acres, or about 6
percent, of the land under lease had been proven productive of
oil and gas. Proven acreage represented only 2 percent of
the land area of the Southwest. Of the four states, Texas had
the largest number of proven acres, but Louisiana had the
highest proportion of its land area in proven acreage.
127
earthquakes), gravity (the measurement of vanatlOn in
gravity at different locations), and magnetic {the measure·
ment of magnetic elements of subsurface rock strata). In
addition, information obtained through electric logs, cores,
cuttings, and other means from wells drilled in a general
area aids in reconstructing the subsurface geology of an area.
Data are compiled monthly by the Interstate Oil Compact
Commission on the number of geological crews making seis.
mic, gravity, and magnetic surveys. This information reAects,
in part, exploratory interest in the various states in the
Nation. The number of geological crews in the four south·
western states in 1953 averaged 427, an all·time high. Texas,
with 231 crews, accounted for the largest share of this total,
followed by Louisiana with 118. New Mexico and Oklahoma
had 46 crews and 33 crews, respectively.
The average number of geological crews operating in the
four southwestern states in 1953 represented about 59 per·
cent of the United States total. This proportion has shown
a declining tendency in recent years, despite the rise in
the absolute number of crews working in the region. The
increase in the number of crews in other parts of the Nation
has been even larger than that of the Southwest.
It should be pointed out that not all land is leased nor
are an wildcat wells located on the basis of geological or
geophysical studies. Sometimes, developments occur so
rapidly in an area that leases are taken for protective purposes, with the intention of geologizing the leased area
later. Moreover, some wildcats are located on a " hunch" basis,
or at least on the basis of nontechnical considerations.
Locati ng tho Oil
The decision to lease particular areas and the pinpointing
of a specific location where a wildcat well is to be drilled
usually arc made by, or based upon recommendations of,
geologists and geophysicists who have studied the areas to
determine the existence of structures which may be favorable
for the accumulation of oil. These specialists frequently are
employees of large oil companies, although some of them are
consultants working on a contract basis, and still others are
oil producers in their own right.
While the number of petroleum geologists and geophysi.
cists in the Southwest is unknown, the residence of memo
bers of the American Association of Petroleum Geologists
furnishes a clue. At a recent date, members living in the four
southwestern states totaled 5,373, including 3,413 in Texas,
1,144 in Oklahoma, 624 in Louisiana, and 192 in New
Mexico. Members in the four states comprised 56 percent
of the total members in the United States.
A committee of the American Association of Petroleum
Geologists which has been compiling statistics on the methods
used in locating new·field wildcats found that, in 1953, more
than four·fifths of all such wildcats drilled in the four south·
western states were located upon the basis of geological or
geophysical studies or a combination of both. Less than 6
percent were located on a nontechnical basis, while the
methods used to locate about 11 percent of these new·field
GEOPHYSICAL CREWS OPERATING
IN SOUTHWEST
1948-1954
HUNSER 0' CRI!:WS
N' N8U 0' CREWS
3 00
'0 0
..
0
>It-Ii
20
~"""V\' \
v
"V"'"
10
J
LOUISIANA~ ... ,
"
~
I 00
NEW MEXICO
~
/".
-~
·····r ',. . . :.....,.,...., c,~;~·~~~·~.~·:?r---t/
01948
2 00
I 50
1-·
O~~""'"'·~··:·\d""."
.j. 11"""'1'>''\'~~''/"~'
_
50 -" ',
2 50
/,...
.....';;:7J
"
The methods are varied by which geologists and geophy.
sicists locate structures in which oil may be found. In general,
the methods fall into two categories: surface geology and
subsurface geology. In the former, studies are made of the
topography of an area, rock outcroppings, and any surface
indications of oil or gas. Subsurface geological studies dc·
pend heavily on geophysical methods, such as seismic (the
measurement of waves originated by miniature man·made
1\",.,.-~~IV,\...
~~
TEXAS"71
1949
1950
SOURCE In!erotall 011 COfI'IpOt' COII,,"I .. ! ~ft.
195 1
195Z
1953
1954
5o
o
'"
co
DAILY AVERAGE CRUDE OIL PRODUCTION IN SOUTHWEST, 1953
D
NO PRODUCTION
UNDER 1,000 BARRELS
~ 1, 000-9,999 BARRELS
10, 000-24,999 BARRELS
_
25,000 BARRELS AND OVER
OKLAHOMA DATA BASED ON PI PELINE RUNS
FOR THE PERIOD MAY 1952 -APRIL 1953.
MONTHLY BUSINESS REVIEW
wildcats could not be ascertained. The proportion located on
nontechnical considerations was sligbtly smaller in the Southwest than in the Nation as a whole.
129
EXPLORATORY HOLES DRILLED
IN SOUTHWEST
Drilling
Although many technical advances have been made during
the past few decades in locating structures which may be
favorable for the accumulation of oil, drilling remains the
only positive way of determining the actual existence of oil.
To this extent, drilling represents a phase of oil exploration.
Usually, only those wells are considered exploratory which
are long extensions of partly developed pools; are tests of
possible new pools located above, below, or outside tbe limits
of proven productive reservoirs; or are tests of new struc·
tures or environment never before productive. Drilling within
already proven pools is considered development drilling.
Drilling is the final phase of locating oil. The sponsor or
operator who is having the wildcat drilled usually has been
responsible for the performance of the other exploratory activities preceding the actual drilling. In view of this situation,
the question may arise as to wbo is responsible for oil
exploration. To whom do we owe the discovery of the Southwest's oil resources? Who assumes the risk of exploration?
Although specific information is not available on the Southwest, data for the Nation compiled by the Committee on
Statistics of Exploratory Drilling of the American Association of Petroleum Geologists probably reflect the situation
prevailing in this region. Of the new-field wildcats completed
in 1953, major oil companies drilled 17 percent and con·
tributed more than half the cost of an additional 13 percent
drilled by smaller oil companies and independent operators.
The remaining 70 percent were drilled and financed by
smaller oil companies and independents.
In general, the independents and smaller oil companies
are more active in areas of relatively shallow wildcatting,
where the cost per well is not so great. On the other hand,
most of the very deep wildcats, costs of which may run to
several hundred thousand dollars or more, are drilled by
the large oil companies.
The operator owning the lease usually is not the one who
actually drills the wells, since the actual drilling ordinarily
is done on a contract basis by firms specializing in this work.
However, many of these contractors are independent pro·
ducers in their own right. The home offices of a majority of
the Nation's drilling firms are in the Southwest, with im·
portant concentrations being found in Dallas, Fort Worth,
Houston, Oklahoma City, Shreveport, Tulsa, and Wichita
Falls.
Exploratory drilling has increased steadily in the South·
west during the past 10 years. The number of exploratory
wells drilled in the region in 1953 totaled almost 7,400, which
is 65 percent greater than 5 years earlier and 461 percent
greater than the prewar year 1939.
During the past 5 years, the four southwestern states
accounted for about 55 percent of the total exploratory holes
~
OKLAHOMA
~
LOU ISIANA
~
TEXAS
ill,.
SOUIIGE " "d"lc H Lo h••• Cboirman of Co mill
Oft 51all111u
of hploralMy Drltlfllg at II........,I,an "I_lotion of '.'roIIYm 101010,1.11.
in the Nation and 64 percent of the total footage of such
wells. In both, the Southwest's share of the national total
has been somewhat larger in the postwar period than it was
dnring the war years.
Although men have been drilling wells for oil in the Southwest for more than 50 years, there is no evidence that the
region has exhausted its untapped oil and gas resources.
The number of successful wildcats in the Southwest last year
was the highest of record. Moreover, the proportion of wild·
cat ventures which have been successful in bringing in oil,
condensate, or gas wells in recent years has been markedly
higher than in the late 1930's and the early 1940's. The ratio
of producers to total exploratory wells in the four southwestern states averaged 21.9 percent for the years 1949-53,
compared with 21.5 percent in the previous 5 years and 16.5
percent in the period 1939·43. However, at least part of the
improvement in the success ratio shown by these fignres may
be due to a lack of strict comparability of the data for early
years, as well as to differences in the proportions of the
various types of exploratory wells (outposts, deeper pool
SUCCESSFUL WelLS' AS PERCENT OF TOTAL
EXPLORATORY HOLES DRILLED
1938·53
United
New
Year
lovlslana
Mexico
Oklahoma
Texas
Southwest
1938 ........ ...
1939 ...........
1940 •••••.•....
1941 •• ••• . •. . . •
1942 •••••. ••...
19.3 ...........
19... 4 •••••.. ...•
1945 •••••......
1946 .... ..... ,.
1947 ••••....•..
1948 .•••• .... . .
1949 ...........
1950 ...........
1951 •••••••••••
1952 .......... .
1953 .......... .
20.8
10.7
23.6
15.3
19.B
26.0
29.0
30.2
21,4
21.2
2B.6
27.9
23.9
26.6
24.3
24.1
9.3
24.0
23.1
14.0
20.0
19.0
12.2
23.1
22.6
25.0
21.2
26.3
36.4
36.4
29.6
28.7
25.B
1 B.B
22.2
26.B
13.B
17.7
22.7
21.5
19.7
lB.7
lB.5
20.5
18.3
21.0
17.6
23.7
13.1
12.6
11.4
17.7
17.0
17.0
21.B
23.1
21.0
21.9
19.B
23.4
23.3
20.2
20.0
21.3
14.7
Stot.s
14.0
13.2
10.4
14.'
12.0
15.4
15.3
17.0
19.7
21.6
19.8
20.3
18.3
20.2
19.5
18.9
18.8
20.1
18.6
16.9
lB.2
22.3
23.'
20.8
21.2
20.5
23.4
22.8
2 1.5
20.5
22.0
1 Iltclude not only oil producers but also gas and condensate producefs,
SOURCE! Frederic H. Lanee, Choirman, Committee on Statistics of Exploratory Drilling,
American Association of Petroleum Geologist's.
MONTHLY BUSINESS REVIEW
130
GROSS ADDITIONS TO CRUDE OIL RESERVES
RElATED TO EXPLORATORY HOLES DRILLED
1938·53
(In thousands of barrels per hole drilled)
New
Year
Louisiana
Meldeo
1938 .••••••.•..
1939 ...........
1940 ...........
1941. ..........
1942 . ..........
1943 ...........
2,826
1,621
4,465
1944 ..••......•
1945 .......... .
1946 ...........
1947...........
1948 ...........
1949 ...........
1950 .......... .
1951. ..........
1952 ... . .......
1953 ...........
845
1,139
1,253
798
920
880
1,128
535
850
381
United
Oklohomc
1,055
_689 1
_130'
818
875
565
511
1.006
492
722
703
810
349
611
921
268
416
841
777
1,000
545
514
768
291
177
484
135
247
221
571
279
220
294
303
409
Texa s
1,359
775
1,236
709
979
296
457
392
745
369
514
466
229
599
122
194
Southwest
1,558
847
1,098
764
895
331
472
388
658
378
532
448
294
539
230
281
Stotes
1,158
927
623
603
585
386
431
376
462
364
474
352
249
375
221
248
I Re1erves flgure revised downward.
SOURCES: Frederic H. Lahee. Chairman. Committee on Stathtics of Exploratory Drilling,
American Association of Petroleum Geolog ists.
information available regarding thousands of wells which
have been drilled, assist in locating oil pools despite the
gradual reduction in the number of undiscovered pools in
the region. On the other hand, the sheer size of the larger
oil·producing structures increases the odds of their being
located earlier than the smaller structures. Moreover, oil
operators are likely to drill larger structures first and then
smaller structures.
Although exploratory drilling is of prime importance in
determining future oil production, development wells make
up the larger portion of wells drilled. In 1953, there were
more than three times as many development wells drilled in
the Southwest as wildcat wells. In kceping with its position
as the dominant producing region, the Southwest has been
accounting for the majority of the Nation's development
wells.
Reserves CommiHee, American Petroleum InstltLlte.
Well-Servicing Activity
tests, new·field wildcats, etc.), each of which has a different
success ratio.
While the success in locating oil in exploratory drilling
may have improved somewhat during the past 15 years,
there is evidence that the oil pools being discovered are
tending to become smaller. Gross additions to crude oil
reserves have shown a declining trend in relation to the num·
ber of exploratory wells drilled and to the footage of such
wells.
The gross addition to crude reserves per exploratory well
drilled has been noticeably higher in the Southwest than
in the Nation, but no substantial difference has existed in
the relationship of gross additions to reserves per foot of
exploratory wells drilled.
The maintenance of the success ratio in wildcatting at
the same time that the size of oil pools discovered is tending
to decline is not a wholly unexpected development. Improve·
ments in oil·prospecting techniques, as well as additional
GROSS ADDITIONS TO CRUDE OIL RESERVES
RELATED TO FOOTAGE OF EXPLORATORY HOLES DRILLED
1938·53
(Number of barrels per foot drilled)
New
Year
1938 ...........
1939 ...........
1940 ...........
1941. ..........
1942 ...........
1943 .. ..... ....
1944 ........ ...
1945 ...........
1946 ...........
1947 ..•........
1948 . ..........
1949 ......... ..
1950 ...........
1951 ...........
1952 ...........
1953 ...........
louisiana
427
228
140
171
184
114
116
144
123
123
70
65
128
69
90
78
Mexico
Oklahoma
Texas
Southwest
1,377
287
465
218
269
105
245
130
139
207
72
44
117
31
67
62
136
77
61
73
67
96
387
204
313
173
227
64
92
85
165
84
404
203
267
177
19'
70
93
81
146
85
110
100
62
108
44
53
-193 1
-33 1
240
91
126
178
52
81
147
127
II.
110
50
123
25
39
United
State,
345
278
185
170
155
98
102
92
120
93
116
92
64
89
49
54
1 Reserves figure revised downward.
SOURCES: Fred.ric H. Lahee. Chairman, Committee on Statistics of Exploratory Drilling.
American Association of Petroleum Geologists,
R••erve, Committee, Amerlcon Petroleum Institute.
Completing an oil well involves much more than the work
of the drilling contractor, his crew, and the rig used in actu·
ally drilling the well. Frequently, the well casing has to be
cemented to keep out unwanted lIuids, and a firm specializing
in this work is employed. Furthermore, electric logs are
often taken by firms specializing in this process to determine
the existence of oil sands and the various types of formations
through which the well has passed. Such logs are needed
particularly in rotary drilling when the mud in the well bore
tends to obscure the formations encountered. Perforating
the well casing to tap oil sands is another function usually
performed by a separate contracting firm. Other important
well·servicing activities performed by special contractors
include acidizing, shooting, and fracturing reservoir rocks
to increase the flow of oil. Well·servicing firms are important
elements in the Southwest's oil industry. Their gross receipts
from these operations in Texas alone last year are estimated
to have exceeded $45,000,000.
Producing the Oil
With the drilling of the discovery well, the petroleum engi·
neer comes into the picture. He is responsible for planning
the proper development of the field and instituting methods
and practices to secure the maximum amount of profitable
oil from the oil pool. The petroleum engineer frequ ently is an
employee of the operator or owner of the wells, although
he may be a consultant operating on a fee basis.
The operator naturally assumes direct responsibility for
producing wells once they are completed. The men he em·
ploys to handle the necessary functions associated with
servicing the wells are called the production crew. They
include men who connect pipes and valves; care for such
motors as are needed; clean out wells; and, in the case
of pumping wells, see that wells arc being pumped efficiently.
Near many oil fields in lonely stretches of west Texas and
New Mexico, these production crews can be found living in
neat little settlements provided by the oil companies,
MONTHLY BUSINESS REVIEW
131
Importance to the Southwest's Economy
That crude oil production is important to the Southwest's
economy is obvious to even the most casual observer. There
are relatively few people in the region who do not have at
least one or more friends or relatives associated with oil
production - either working for some major oil company,
independent operator, drilling contractor, or one of the many
well.servicing firms or receiving income from royalties or
lease rentals.
TOTAL WELL COMPLETIONS IN SOUTHWEST
I.
19 40-1953
THOUS4N()SQF WELl.S
THOUSANDS OF WELL S
~._._.L.-
16f----+---+--+- - T
.LE-XA
-S-..,-,!
14f----+---j---+--,-- / ·--j---+--I I.
121---1---+- -+ - - 1-/
I
10 _.-"'.
Total salaries and wages of employees in oil and gas
exploration and production activities in the Southwest in
1952 are estimated at around $900,000,000. This represents
7 percent of the gross payrolls of all workers and almost 5
percent of the total personal income in the region. Wage
rates in the oil industry are higher than those in most of
the Southwest's other industries.
Royalty income from the region's oil production last year
is estimatcd to be in excess of $600,000,000. Furthermore,
southwestern landowners receive a substantial income from
rentals and bonuses from the more than 115,000,000 acres
under lease. Rentals frequently are $1 an acre per year, hut
rentals on particularly sought·after areas may be consider·
ably higher.
In addition to salaries and wages, royalties, and rentals,
the region's inhabitants also receive income from oil produc.
DAILY AVERAGE PRODUCTION
PER OIL WELL
\
6-
12
1-+---/---+-+'0
\
.----'.
~
The number of wage and salary workers engaged in the
exploration, development, and production of crude oil and
natural gas in the four producing southwestern states in May
1954 amounted to 194,000, or over 5 percent of total non·
farm employment. Texas, with 114,000, accounted for the
major portion of these oil workers. Oil and gas exploration
and production workers comprised a larger proportion of
nonfarm employment in Oklahoma than in any of the other
southwestern states, amounting to about 8 percent of the total.
On the other hand, such workers comprised only 4 percent of
nonfarm employment in Louisiana.
I.
16
./
\-t-------:--.".
/'
\-·_·/1
·~l~-+--+---f--~8
/
I'0KLAHOt-AA ----; •••~ 6
k ......
. . ._. . . . . . . ·i............T
............_'I
4
LOUISIANA:3.,.
--
4
: ·~·::::;:::·":"'::-:·:::~L----,---- -N~::E~'CO,--~:
1940
SOU RGE ' OIi ond
1942
1944
1946
1948
19~
19&2
O~, Jo~r~ol.
tion in the form of profits and dividends. No precise data are
available on regional income from profits and dividends, but
it is probably smaller than the amount received as either
salaries and wages or royalty income.
Although the number employed and the direct income
received from oil exploration and production are impressive,
such activity represents only one facet of the role oil plays
in the Southwest's economy. Probably of equal or greater
importance are the indirect effects of oiL Prior to the oil
industry, the Southwest had largely an agricultural economy.
Oil not only has furnished a new and expanding source of
employment and income to the people of the region but also
has provided the stimulus for a major portion of the indus·
trial development experienced by the Southwest. The rna·
chinery, metals fabricating, and steel industries in the region
got their start in turning out equipment and supplies for the
oil industry, and an important part of their business today
continues to be with the oil industry. Other industries, such
as the oil refining and chemicals industries, were attracted
to the region to process oil and associated natural gas and
natural gas liquids products. Moreover, natural gas - which
was, in effect, a by.product of the oil development - brought
to the Southwest many industries seeking cheap fuel, such
as the aluminum, zinc, and lead refining industries.
1953
While the expansion in the region's manufacturing indus·
tries has been one of the outstanding effects of the develop.
ment of its oil resources, oil has had its impact on most other
types of economic activity in the Southwest. In trade, oil
field stores; in service industries, law firms specializing in
oil work and oil accounting and oil appraising businesses;
in finance, oil departments in some of tbe region's large
banks; in transportation, pipelines; and in construction, gaso·
line plants, office buildings for oil companies, and a variety of
other projects - all are products of oil development.
l.OUISIANA
NEW MEXICO
TE X AS
UNITED STATES
OKLAHOMA
o
SOUIIO( ' !..9.!..!.t..2!.
10
20
NUlol8EII:
30
40
or 8. '1:111[1..5
60
As employment has increased in the oil industry and asso·
ciated activities, the market of the various consumer indus·
tries also has increased. All segments of the region's economy
have been stimulated by this growth in consumer demand,
MONTHLY BUSINESS REVIEW
132
The rapidly expanding southwest economy has had insufficient capital to meet its needs_ Oil has created nationwide interest in the opportunities existing in the Southwest
and has attracted a substantial inflow of capitaL This capital
has been vital in the development of oil itself, as wel! as in
the growth of many industries connected with the oil industry_
Oil, moreover, has been an important investment outlet
for capital accumulated by institutions and individuals within
the region itself_ The oil loan business of commercial banks
has become increasingly important during the past 20 years,
since the adoption of proration machinery in the various
states in the region imparted a greater stability to the industry. At the present time, oil loans of weekly reporting
member banks in the Eleventh Federal Reserve District
appear to be well in excess of $200,000,000 and comprise the
largest single type of commercial and industrial loan made
by these banks.
In addition to inducing the inflow of capital, oil has
brought an in-migration of skilled and technically trained
workers. Some of the first oil fields in the Southwest were
developed by men who gained their experience in Pennsylvania fields. Technical people in various phases of the oil
industry have continued to be attracted to the Southwest.
Land values have been influenced markedly by the existence of oil in the region. Almost every fanner and rancher
has hopes that some day oil will be discovered on his land.
It is not uncommon for the price of unproven land to be
double, or more, the price the land would be worth for purely
agricultural purposes.
The State and local governments in the region are supported to an important extent by taxes on oil. Oil production
taxes furnished over one-fourth of the tax revenue of the
State Government of Texas in the fiscal year 1953; around
one-fifth of the Louisiana State Government's tax revenue;
and substantial, although smaller, shares of the revenue of
the State Governments of Oklahoma and New Mexico. In
addition, these states have a variety of other taxes which increase the amount of revenue derived direcly or indirectly
from oil. Property taxes paid by the oil industry are a very
important source of revenue for many of the local governments. For instance, in 1953, over one-third of the total
property tax collections of county governments in Texas
came from the oil industry.
Oil contributes significantly to the support of the Southwest's public schools, partly through taxes paid to the State
governments as well as through property taxes paid to the
local public school districts. A recent survey of the Texas
Mid-Continent Oil and Gas Association reveals that many of
the independent school districts in Texas derive more than 50
percent of their tax revenue from oil property taxes.
The increasing diversification of the Southwest's economy
during the past decade has tended to reduce the region's dependence upon oil. Nevertheless, if the indirect - as well as
direct - effects of oil development are considered, oil has
been the most important single factor influencing the Southwest during the 20th century.
Summary and Outlook
The development of oil production has tended to diversify
- and, accordingly, stabilize - the Southwest's economy.
Oil activity frequently has been a sustaining factor in trade
and income in areas experiencing droughts or other unfavorable agricultural developments.
The Southwest is one of the world's major oil-producing
areas. There are more geologists, more drilling contractors,
more oil companies, and more crude oil production in this
region than in any other area of the world. The Southwest
now accounts for about one-third of the world's production
and about two-thirds of the production in this Nation_
AVERAGE DEPTH
OF NEW WELLS DRILLED
Crude oil production in the region has shown an almost
uninterrupted rise since the famous discovery at Spindletop
in 1901. In Ule past 10 years, production has almost doubled_
The increase in production has been caused by a combination
of factors: (1) the sustained growth in the Nation's demand
for petroleum products, (2) the relative success of the industry in locating rich oil pools which are accessible to markets,
and (3) a favorable economic climate which has induced investment in oil exploration and production activities. The
future of the region's crude production undoubtedly will
continue to be affected greatly by developments in these
factors.
194 0-19~3
Most observers in the industry expect the demand for oil
to show a continued, although somewhat moderated, rate of
growth during the next few decades. If this assumption is
accepted, demand will continue to provide a stimulus to
oil production in the Southwest.
SOUflce, 1!!!!!..Q!!
Continued expansion in the region's oil production, then,
will depend upon the existence of sufficient oil resources and
the industry's success in locating and economically produc-
MONTHLY BUSINESS REVIEW
ing oil. Despite the number of oil fields already discovered
and the amount of oil produced, there are no indications
that the Southwest is running out of oil. The steady increase
in exploratory activity in the region attests to the satisfactory
results achieved. The success ratio in exploratory drilling has
been maintaincd, and last year the number of new discoveries
in the Southwest reached an all-time rugh.
Technical advances in oil prospecting are helping to locate
structures favorable to oil accumulation which might have
been overlooked by earlier methods. Deeper oil pools are
becoming increasingly available with the improvement in
drilling equipment. Furthermore, new techniques are permitting the development of some oil pools formerly considered
noncommercial. Other methods increasc the proportion of
oil in place wruch can be produced economically from existing pools_ While sccondary recovery methods are being
utilized to a greater extent, the Southwest, as yet, is far from
fully exploiting these means of achieving additional oil production. In most instances, primary recovery has left considerably more oil in the ground than has been produced
from the various pools.
Another promising factor which may be expected to support further growth of the Southwest's oil production is the
prospective development of the Tidelands - a new frontier
for oil exploration. While some production was obtained in
this area off Louisiana in the early postwar years, in recent
years drilling activity was practically halted because of the
uncertain status of ownersrup. With the ownership question
settled, exploratory activity has increased markedly, and
Tidelands production may be expected to increase accordingly. The relatively heavy cost of Tidelands oil ventures,
however, may have a deterring influence on oil production
in that area. Nevertheless, if the oil resources of the Tidelands prove to be a counterpart of the rich oil pools found
on the shoreward side of the Gulf Coast, as many geologists
believe, the development of these resources certainly will
move forward_
Tending to offset these favorable factors in the outlook
for the region's oil production, the cost of locating and
producing crude oil in the Southwest has been following a
noticeably rising trend. This rise has been due, in part, to
increases in labor and material costs_ In addition, the apparent decline in the size of discoveries is tending to increase
costs. Fewer barrels of oil are being discovered in relation
133
to the number of exploratory wells drilled than was the
case 10 or 15 years ago. If this trend should continue, it
would become an unfavorable factor in the future developmcnt and expansion of the region's oil industry. In so far as
the Nation may be experiencing a corresponding decline
in the size of oil pools discovered in relation to exploratory
wells drilled - and, hence, similar tendencies for costs to
rise - the Southwest may not suffer a competitive disadvantage in relation to other areas in the Nation. A rise in
discovery costs, however, may place the region's oil industry
at a competitive disadvantage with foreign oil or other
current and prospective sources of energy, unless they also
sustain increases in costs.
Despite the rise in costs, the economic climate has been
favorable for oil exploration and prod uction in the postwar
period. Crude oil prices, wruch had been held at a fairly constant level during World War II, rose markedly in the early
postwar years and today are more than double the 1945
level. Meanwhile, exploratory drilling, stimulated by the rise
in prices, has shown a corresponding increase in the postwar
period_ Federal tax provisions pertaining to the percentage
depletion allowance and the expensing of intangible drilling
costs also have promoted oil exploration and production_
While the depletion allowance has remained unchanged since
1926, the rise in the corporate income tax has had the effect
of enhancing the value of the depletion allowance in encouraging investment in oil exploration ventures.
During the current year, the oil induslry has been confronted wilh excessive stocks. Demand has failed to meet
earlier industry expectations, and petroleum markets have
been soIt. It has been necessary for major producing states
in the Southwest to cut back production substantially. Crude
production in the region during the first part of August, at
4,340,000 barrels per day, was 440,000 barrels less than in
August 1953.
Current difficulties, however, are likely to prove only a
temporary setback to the long-term expansion in the Southwest's oil production. Over the longer run, rising costs and
increasing competition from other fuels and other sources of
crude may modify the rate of growth in the region's o!l
production, but it appears reasonable to expect that th,S
segment of the Southwest's economy will show a further upward trend for years to come.
This is the first in a series 0/ articles about the oil industry
in the Southwest which will appear in the M onfltly Business
Review from time to time. The second article, on refining, will
be published in the October Review.
134
MONTHLY BUSINESS REVIEW
REVIEW OF BUSINESS, AGRICULTURAL, AND FINANCIAL CONDITIONS
Consumer spending at District deDepartment store sales in the
partment
stores during July estabDistrict in July reached a record
lished
a
new
dollar volume record
dollar volume for the month
for
that
month
and exceeded July
and exceeded those of a year
1953 by 6 percent. July was tbe
earlier by 6 percent. However,
second month this year in which department stores gained
cumulative sales for the first 7 months of 1954 lagged in monthly sales over 1953; however, sales in April, which
4 percent behind a year ago.
showed a year-to-year increase of 1 percent, were benefited
by the late date of Easter.
Department store credit outstanding declined
percent in July, with the decrease in charge accounts
more than offsetting the increase in instalment
accounts. End-of-month credit about equaled that of
a year earlier. Inventories on July 30 were 6 percent
below those on the same date in 1953 .
High temperatures and lack of moisture in August
reduced prospects for agricultural production in the
District, although showers late in the month brought
some relief. In many sections, ranges and pastures
are in the poorest condition in two decades, and
livestock are being maintained by supplemental
feeding. Preparations for seeding winter wheat
started under generally favorable moisture conditions. Farm commodity prices are holding about
steady.
District crude oil production declined during
August to the lowest daily average rate in 2 years,
as the Nation's refineries reduced runs to work off
heavy gasoline inventories; stocks of gasoline in early
August were 10 percent above a year earlier.
The monthly index of District department store sales (194749
100), adjusted for seasonal variations, rose from
127 percent in June to 132 percent in July, compared with
125 percent in July 1953. The July adjusted index of 132
was the highest since June 1953 and compares with the
average of 123 for the last half of 1953 and 121 for the first
half of 1954.
=
As a result of the favorable sales record for July, the cumulative loss in total department store sales compared with 1953
was reduced from 5 percent as of June 30 to 4 percent at
the end of July. During the first half of August, District
sales continued above those in 1953, showing a year-to-year
gain of over 2 percent.
A strong consumer demand for hard goods was the principal feature of District department store sales during July and
appears to have accounted for the largest percentage gains
over a year earlier. Among the major appliances, sales of
air-conditioning units were reported to be 188 percent above
a year ago; sales of mechanical refrigerators were up 3
percent. Sales of furniture and bedding also rose above 1953
by 3 percent. Consumer buying of wearing apparel, in total,
was slightly below the 1953 figure; however, sales of men's
clothing showed a year-to-year gain of 2 percent.
Nonagricultural employment in the five states of
the District rose in August to slightly above a year
ago. Manufacturing employment increased in August
for the third consecutive month but remained 4 percent below the record established in August 1953.
RETAIL TRADE STATISTICS
(Percentage change)
NET SALES
Jury 1954
from
STOCKst
July 1954 from
7 mo. 1954
The value of construction contracts awarded in
the District in July was 6 percent above a year earlier,
with residential awards up 40 percent. The JanuaryJuly value was 9 percent over a year ago.
Commercial, industrial, and agricultural loans of
the District's weekly reporting member banks declined substantially during the 4 weeks ended August
18, due principally to CCC cash redemptions of certificates of interest maturing August 2. Other loans
increased. Security holdings rose sharply, reflecting
the investment of funds arising from deposit gains,
reductions in reserve requirements, and redemptions
of CCC certificates of interest.
Line of trgd.
by area
DEPARTMENT STORES
Totol Eleventh District ••••••••••••.
Corpus Christi • •• • ••••••••••••••.
Oollos •••••••••••••••••••••••••
\:1 Paso • ••• • •. •••••••••••••••••
Fort Worth ••••••••••••••••• ••. .
Hovston ••••••••••••• •• • ••••••••
Son Antonio •••••••••••••••••• . •
Shreveport, lo .•• •• .• •••• • •••.• . •
Waco ••••••.•••..•••••••••••••
Other cities • • •••.•••••.•••••.•••
FURNITURE STORES
Total aeventh District ••• ••••••••••
Austin ••••••••••••••• •.••• . ••••
Dallas ••••••••••• • ••• •• .•• •••••
Houston • • • • •••••••••••.•••..•••
Port Arthur ••••••• • •••••.•••• • ••
Sen Antonio • •••••••••••••..••••
Shreveport, La .................. .
Other cities ••••••••.•••••• •. • •. •
HOUSEHOLD APPUANCE STORES
Total Eleventh District •• •••••••••••
Dollas •••• • ••••••••••••••••••••
I
Stocks at end of month.
Joly
June
compo wifh
July
1953
1954
7 mo. 1953
1953
6
8
8
2
5
4
-1
-13
5
-12
-5
_4
-6
_5
0
_2
-1
_6
-10
-5
-8
1
-4
-9
(Di s c o n t i nu e d )
9
-12
_1
-7
15
0
_3
6
6
0
_5
-7
6
-1
-6
1
53
7
14
-13
-15
7
-2
5
28
1
7
10
-1
-10
-10
o
June
1954
2
o
5
4
o
o
- 1
4
2
1
-9
36
1
-6
-6
-17
-6
-3
-4
MONTHLY BUSINESS REVIEW
135
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
[1947-49
COTTON PRODUCTION
= 100)
Texas Crop Reporting Districts
lin thoulonds of bole.-500 lb. groll wt. J
ADJUSTEDl
UNADJUSTED
July
Area
June
May
July
July
)"".
May
Indicated
111
108
129
112
103
128
119
113
138
IOSr
IOOr
12.
132
133
148
127
126
141
123
115
139
123
143
124p 121
130
131
133p 131
128
141 r
12Sr
1 Adjusted fo r seosonol variatIon.
r-Revised
p-Preliminory.
As a result of the increase in purchases of "big ticket"
hard goods items, instalment credit outstanding at department stores in the District rose 2 percent during July. This
increase was more than offset by an 8-percent decline in
charge accounts, and the net change in total credit during
the month was a decrease of 1 percent. Compared with a year
earlier, total sales credit in July showed no net change, as a
I-percent decrease for charge accounts was offset by a corresponding increase in instalment accounts. The average collection time, based on July figures, was 64 days for charge
accounts and about 16 months for instalment accounts. Collection ratios showed no important changes from either a
month ago or a year ago.
Department store inventories increased 2 percent during
July and at the end of the month were 6 percent below July
1953. End-of-month stocks related to total sales during July,
as reported by a representative group of District department stores, indicated 3.32 months' supply of merchandise on
hand, compared with 3.34 months at the end of June and
3_67 months at the end of July 1953. Merchandise on order
was reported to be up 2 percent from June but down 11
percent from a year earlier.
Furniture store sales in the Eleventh Federal Reserve District during July declined 1 percent below June but showed
a gain of 6 percent over July 1953. Accounts receivable, up
2 percent from June, were 3 percent under a year earlier.
Furniture store inventories at the end of July, although showing a month-to-month rise of 1 percent, were 10 percent below
the same date last year.
1952
548
835
\43
285
39
1,101
136
119
253
39
215
76
238
32
258
469
1,005
182
59
12
610
95
95
239
17
201
222
231
61
310
68
116
\40
5-1'4 ................... -· .. •
5-5 ........... _.... · .... ··6 .................. . .. · ....
7 ..........................
8-1'4._ ................ ·_· .. •
8-5 .................. ..... ·
9 ... .. _•..•...•••.. _. ••.•. 10-1'4 ............. ... .. .. .. •
10-5._ .. __ .......... · .... ••
375
970
200
205
20
420
70
60
160
25
110
180
150
55
.00
Sigle ........... .. ·. · ·· ·· .
3,400
4.317
3,808
79
1-1'4 ... _. _.... _.. __ . __ ··._·_
1-5 ............. _... _..... 2-N .•••.... .. ••.•••...••...
2·5, .... . .... , .............
3 ................ · .. _· _....
4 . ...... ...•... ... ..... • . ..
August 1
The United States Department of Agriculture reports that,
on the basis of August 1 conditions, cotton production in
District states is indicated at 5,250,000 bales, down 25 percent from a year ago but 9 percent above the 1943-52 average.
The decline from 1953 results largely from an 18-percent
72
51
38
51
50
63
6.
51
237
63
172
155
SOURCE: United Slates Department of Agriculture.
reduction in acreage. Estimated yield per acre is sharply
lower in Oklahoma, somewhat below the near-record level
of 1953 in Texas, about unchanged in Louisiana, and higher
in New Mexico and Arizona_
The condition of the cotton crop on August 1 was reported
to be generally good in most sections of the Dist~ict, as well
as in other parts of the Cotton Belt. However, dunng August,
extremely high temperatures caused some deterioration of
yield prospects_ In the irrigated sections of west T~x.as, New
Mexico, and Arizona, the crop is in excellent condItIOn, and
yields are expected to equal or exceed those of a year ago.
The Texas cotton crop, indicated at 3,400,000 bales, is 21
percent below production in 1953 but 5 percent above :he
1943-52 average. Tbe prospective yield of 212 pounds of hnt
per acre is sharply lower than the 1953 ave.rage of 233
pounds - the second highest of record - but IS 30 pounds
above the 10-year average_ Increases in production are indicated for south Texas, the southern High Plains, and the
northern Rolling Plains. More favorable weather d~ring the
growing season has resulted i~ increased_ ?utput m so~th
Texas, while more favorable mOIsture condItIOns at plantmg
Prospects for agricultural production in the District declined during
August, as temperatures above the
100-degree mark and lack of moisture caused deterioration of most
growing crops. Light to heavy showers in the latter part of the
month brought relief from high temperatures and were of
material benefit to feed crops and pastures but were generally
too late to improve the cotton crop, except in northwestern
counties of Texas.
•
as percent of
1953
1953
Crop repol1ing district
SALES-DoilY average
Eleventh Distrid ..•. .......•
DoUos .•••••••••••••••••••
Houston • •.••• .•••.••••.•• •
SrOCKS-&1d of month
Eleventh District • • •••• • •••••
1954
1954
July
195. 1954 1954 1953 195. 1954 1954 1953
CROP REPORTING
DISTRICTS OF TEXAS
MONTHLY BUSINESS REVIEW
136
CROP PRODUCTION
SHORN WOOL PRODUCTION
Texas and Five Southwestern Slates
(In thousands of pounds)
(In thousonds of bushels)
1954
Averag.
TeXAS
fIVE SOUTHWESTERN 5T ATESl
Estimated
August 1,
Average
Estimated
August I,
Crop
1954
1953
1943-52
1954
1953
1943-52
Cotton 2 , • • ••••••
Corn •••• •••• •••
Winter wheal ••••
Oals ••••••• ••••
Barley ••••••••••
3,400
35,152
31,160
42,412
3,150
280
15,810
74,877
578
1,545
102,550
2,140
1,485
4,317
33,874
23,035
39,150
1,755
315
14,924
55,198
868
1,705
179,400
2,484
2,550
3,239
51,266
57,221
26,309
2,628
206
10,162
79,379
819
1,546
282,635
3,818
4,047
5,250
53,042
102,886
64,701
20,396
1,182
29,204
84, 193
677
4,946
161,050
5,064
10,675
6,957
52.99 1
94,92.454,141
10,641
1.054
27,080
66,156
868
5,063
299,890
6,099
11,511
",791
91,286
136,509
46,983
9,877
777
20,829
94.745
1.288
4.740
395,214
8,303
13,894
Rye ••••••••••••
Rices •••••••••••
SoTg hum grain •••
Flaxseed ••••••••
Hoyt •••••••••••
Peanuts' ••••••••
Irish potatoes ••••
Sweet potatoes.••
Average
Ari~ono. Louisiana, New Mexico, Oklahoma, and Tex as.
In thousand, of bales•
In Ihousandl of bags conlaining 100 pounds each.
In thous<:md, of lon5.
t In thousand, of ~vnds.
SOURCe. United tales Department of Agriculture.
1
,
•
..
time enabled farmers of the Plains counties to plant a sub·
stantially larger acreage than in 1953, The sharpest decline
in cotton production is in the northern Blacklands section
where production is estimated to be only 38 percent of las;
year's output.
During August the cotton crop continued to deteriorate
in central and eastern sections of Texas, and some dry.land
acreage in the southern High Plains counties suffered from
lack of moisture. Harvest of the Lower Rio Grande Valley
crop was virtually complete by August 31, the deadline under
~he pink bollwor~ control program. By mid-August, ginnings
m the Lower RIO Grande Valley were approaching the
400,000·bale mark,
The outlook for District production of feed crops, rice,
peanuts, and potatoes declined during July and most of
August. High temperatures reduced production from late
acreages of corn and sharply curtailed yields of grain sor·
ghums in central and eastern sections of the District. Pros·
pective rice yields were reduced slightly by a lack of sufficient
irrigation water to meet the reqnirements of a record acreage,
However, rice production is expected to exceed the record
output of last year, Grain sorghum production of 84,193,000
bushels - an increase of 27 percent over 1953 - is indicated
by the Department of Agriculture's August 1 report,
Peanut production in Texas, now forecast at 102,550,000
pounds, is 43 percent less than the 1953 crop. Hay production, at 1,545,000 tons, is 9 percent below the record 1953
crop and about average for the past 10 years, Citrus fruits
in the Lower Rio Grande Valley of Texas continue to grow
(Number,
SAN ANTONIO MARK ET
Clan
July
1954
July
1953
J une
1954
July
19 5 4
July
1953
June
1954
Cottle •••• •• ••••
Calves • •• • .•••••
Hogs • •••• ••• •• •
Sheep ••••••••••
80,186
23,422
26,401
56,297
100,696
27,539
26,635
67,966
98,808
24,548
33,550
155,932
26,009
21,637
2,697
118,807
29,222
21256
35,389
17,257
2,947
127,942
I Indudes goats.
1954p
1953
1943·52
as percent of
average
Arizona •••••••••••••••••••••
Louiliana •••• ••• •• •• •••••.• • •
New Mexico •••..•••••• ••••••
Oklahoma •••.•.•.•••••••••••
Texas • •••• •••• •. •. •• ••• ••••
2,993
416
10,875
1,028
43,505
2,808
364
11,349
883
42,511
3,121
469
12,573
1,318
61,992
96
89
86
78
70
Total •• •. • ••• •..••••••• •• •
58,817
57,915
79,473
74
p Preliminary.
SOURCE: United Stales Department of Agriculture.
satisfactorily, and indications are that shipments will be a
little earlier than usual.
Commercial vegetable production in the District has been
reduced by the high temperatures and dry weather of July
and August, and carlot movement of melons and other
summer vegetables was stopped earlier than usual. Seeding
of acreage for early fall harvest and preparation of seedbeds
for winter commercial vegetable production in south Texas
are making satisfactory progress under generally favorable
moisture conditions.
Preparation for seeding of the 1955 winter wheat crop
was getting under way in northwestern counties of Texas
at the end of August. Showers during the month brought up
volunteer wheat, and moisture conditions generally are considered favorable for seeding of the new crop.
Receipts of cattle and calves at major markets in the Dis·
trict during August were generally higher than a year ago
and about the same as in July, The extreme drought in
central and eastern Texas counties resulted in some liqtrida.
tion in advance of the normal marketing season, Elsewhere
in the District, cattle and calves were moving to market at
normal rates for this season of the year, A substantial por·
tion of calves and yearlings in the range areas of the District
was contracted for early fall delivery, and prices for quality
cattle from these areas continue steady to strong,
The condition of ranges and pastures in the District de·
teriorated rapidly during August; according to United States
Department of Agriculture reports, they were in the poorest
condition since 1934. Hot, dry weather during July and Au·
gust cured all green feed, and most ranges were bare by
early August. In central and eastern counties of Texas, pas·
FARM COMMODITY PRICES
Top Prices Paid in local Southwest Markets
Commodity and marSeet
LIVESTOCK RECEIPTS
FORT WORTH MARKET
State
1J7,085
COTTON, Middling 15j16·incn, Dallas ••••
WHEAT. No.1 hard, Fort Worth •••••••.. .
OATS, No.2 white, Fort Worth •• • ••••••.•
CORN, No.2 yellow, Fort Worth •••.•••••
SORG HU MS, No.2 yellow, Fort Worth • • ••
HOGS, Choico, Fort Worth •••••• • ••• ••••
SLAUGHTER STEERS, Choice, Fort Worth •••
SLAUGHTER CALVES, Choice, Fort Worth...
STOCKER STEERS, Choice, Fort Worth • • • . •
SLAUGHTER SPRING LAMBS, Choice, Fort
Worth .•.••••.••...•..••••.••• •••• •
BROILERS, south TeJ\.as ....... . ..... .. ...
EGGS, current receipts, Fort Worth ....... .
Comparable Comparable
Week ended
week
week
Unit Aug. 19, 1954 last month
lasf yeor
lb.
bu.
bu_
bu.
<wt.
cwt.
cwt.
cwt.
cwt.
cwt.
lb.
case
$
.3385
2_60
.94'A
1.87
2.70
24.50
22 .00
17.00
18.50
20.00
.27
10.00
.3395
2.60
.96*
1.89*
2.75
24.25
24.00
19.00
20.00
19.50
.28
9.00
, 322O
2.50*
1.02V2
1.91 '%
2.96
26.50
24.00
18.00
18.00
22.00
_29
~
~
,
MONTHLY BUSINESS REVIEW
CASH RECEIPTS FROM FARM MARKETINGS
137
CONDITION STATISTICS OF WEEKLY REPORTING
MEMBER BANKS IN LEADING CITIES
(In thou land, of dollars'
Eleventh Federal Reserve District
Cumulative receipb
May
State
Arizona •••....•..•. • ..•• • , . •
louisiana .•................. .
New Mexico .........•.......
Oklahoma .................. .
Texas . . . . . . . . . . . . . . . . . . . . . .
Total ...•••• • .••• • ....••. .
1954
1953
20,777
15,434
9,140
26,016
96,737
21,841
13,692
$168,104
{In thousands of dollors}
January-May
10,492
27,0 11
96,874
$169,910
1954
$131,181
104,341
51,867
131 ,740
537,432
$ 956,561
1953
179,910
93,444
69,361
146,738
589,79 1
$1,079,244
SOURCE: United States Deportment of Agriculture.
tures dried rapidly, and supplemental feeding was necessary
on many farms. A few stockmen were forced to haul water
for their cattle. Exceptions to the general situation were
extreme southwestern and southern Texas counties, which
received generous rains in July and have some green feed
and cured range feed available. Showers late in August reo
vived prospects for fall feed in the District. Fairly adequate
rains in the high altitudes of New Mexico range land brou ght
relief Lo pastures, but most low altitude rangcs and southern
sections of the StaLe r emained dry.
Price changes for major agricultural commodities were
relatively small during the past month. Cotton prices dropped
about 1f2 cent per pound following the August 9 announce·
ment of estimated collon production by the United SLates
Department of Agriculture. Farmers are reported to be offering current ginnings much more reluctantly at the lower
price levels. Prices of cattle and calves continue to hold steady
despite fairly heavy marketings, and most grades and classes
are selling about in line with prices which prevailed a month
ago and a year ago. Stockers and feeders are averaging
slightly higher in price than during the same period in 1953.
During the January·May period, cash receipts from farm
marketings in District states, as reported by the United
States Department of Agriculture, showed an ll-percent de·
cline from a year ago. The decrease resulted from generally
lower prices for many commodities, plus smaller market·
ings of 1953 crops in 1954. The year·to·year decline during
May was only 1 percent. Indications are that total cash farm
income for 1954 will be moderately lower than in 1953, as
a result of Lhe smaller cotton crop and lower prices for rice
and most feed grains.
Commercial, industrial, and agri·
cultural loans of weekly reporting
member banks in the District de·
clined $95,178,000, or 7.3 percent,
during the 4 weeks ended August
18 to a total of Sl,203,382,000. The reduction was weighted
heavily by a decrease in holdings of Commodity Credit Corporation certificates of interest, due to cash redemptions
hy the CCC of the outstanding certificates maturing on Au·
gust 2. Among all commercial hanks in the District, the total
amount of redemptions was well in excess of $235,000,000.
Commercial and industrial loans of these banks rose in most
weeks, with commodity dealers, construction firms, and sales
finance companies increasing the amounts of their outstanding
borrowings.
Item
August 18,
1954
August 19,
1953
July 21,
1954
ASSETS
$1,203,382 $ 1,163,372 $ 1,298,560
9,406
12,129
7,925
89,565
72,071
86,354
134,270
Real estate loons•.....• . ••••.•...• . ••• . ..•
15 1.280
145,294
, 3,409
22,456
loans to banks .. . ... .. .... . . . ......• . .....
3,633
409,209
409,104
399,411
All other loans . ••.••.... .. . .. •. ... . ..•...•
Commercial, industrial, and agricultural loam .. ..
loans to brokers and dealers in securities .. ....
Other loons for purchasing or carrying securities.
Gross loans ..... . ............. . . . .......
1,876,25 1
Less reserves and unallocated charge·offs .•
17,408
1,813,402
18,778
1,941,177
17,160
Net loans ......... . ........ . ...........
1,858,843
1,794,624
1,924,017
U. S. Treasury bills ... ......................
U. S. Treasury certiflcates of indebtedness . . . . ..
U. S. Treasury noles ........................
U. S. Government bonds (inc. gtd. obligations) ...
Other securities .... .................. .. ....
249,707
156,630
202.953
885,511
206,685
161,539
203,016
176,026
712,178
189,270
116,493
134,096
201,080
790,324
214,793
Total investments ........................
Cash items in process of collection .............
Balances with banks in the United Stoles .. .... .
Balances with banks in foreign countries .. ... ...
Currency and coin ... ......... ...... ... ....
Reserves with federal Reserve Bank . .... . .....
Other assets .. ............................
1,701,486
303,842
476,996
1,416
44,793
577,783
99,761
1,442,029
289,487
428,731
1,137
45,616
549,429
85,166
1,456,786
296,259
482,519
1,505
45,424
592,696
96,744
TOTAL ASSETS .... .. ... ... ............
51064,920
4,636,219
4,895,950
LIABILITIES AND CAPITAL
Demond deposits
Individuals, partnerships, and corporations .. ..
United Stoles Government .................
States and political subdivisions ...• . .......
Bonks In the United States . ...... . . . . ......
Bonks In foreign countries .•.......... . ....
Certifled and ofAcers' checks, etc.. . ... . .•...
2,669,918
110,027
160,157
975,769
12,827
51,813
2,502,455
121,860
204,011
761,217
10,982
51,908
2,646,065
76,269
159,140
868,443
10, 120
54,421
Total do!lmand deposits .... . ... . ...... . ..
3,980,511
3,6 52,4 33
3,814,458
Time deposits
Individua ls, partnerships, and corporations .. ..
United States Government .................
Postal sovings ...........................
Stales and political subdivisions ............
Banks in the U. S. and foreign covntries. .....
583,378
9,805
451
99,035
1,883
489,386
10,048
450
78,884
2,293
575,513
9,805
450
109,047
1,883
Total time deposits .....................
694,552
Tolal deposits .......................
Bills payable. rediscounts, etc .. ..... .... . . . . . .
All other liabilities ........................ .
Total capital accounts ......................
4,675,063
TOTAL LIABILITIES AND CAPITAL .........
581.061
696,698
0
44.874
344,983
4,233,494
44.500
41,746
316,479
4,511,156
4,250
37,852
342,692
5,064,920
4,636.219
4,895,950
Changes in other loan categories during the 4, weeks included increases of $9,798,000 in "all other" loans (includ·
ing consumer· type credits), $9,776,000 in loans to Lanks,
and $5,986,000 in loans secured by real estate, Loans for
financing securiLy transactions also rose. As a result of these
changes and the reduction in commercial, industrial, and agri·
cultural loans, total loans of the weekly reporting member
banks declined $64,926,000 Lo a level of $1,876,251,000 on
August 18.
Total investments rose sharply between July 21 and Au·
gust 18, with these banks adding $244,700,000 to their
Government securities and other investment portfolios. Hold·
ings of Treasury bills increased $133,214,000; bonds, $95,187,000; and certificates, $22,534,000. However, investments
in municipal and other non·Government securities were reo
duced $8,108,000. The marked increase in total security
holdings reRected principally the investment of funds derived
from cash redempLions of CCC certificates of interest on
August 2, a rise in deposits, and the reductions in member
bank reserve requirements effective at reserve city banks on
July 29 and at country banks on August 1.
MONTHLY BUSINESS REVIEW
138
CONDITION STATISTICS OF ALL MEMBER BANKS
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Elevenlh Federal Reserve District
Eleventh Federal Reserve District
(In millions of dollars)
(AVerages of daily figUres. In thousandl of dollars)
J uly 29,
1953
July 28,
195.4
Itom
ASSETS
loons and discounts ••• • •• ••••••••• ••••••••••.•
United Stotes Government obligations ••••••••• •.•
Other securities •••••••••••••••••••••••••••••••
Reserve, with Federal Reserve Bank ••••••••••••.•
June
3D,
Balances with bonks in the United Slates •••• ••••••
Balances with banks in foreign countries •••••••••••
Cosh items In procen of collection ••••• •••••••••.•
Other asseh •••••••••••••••••••••••• • ••••••••
$3,197
2,342
477
952
135e
1,007
1.
299
USe
$2,897
2,376
433
942
1276
867
1.
249
130e
$3,19 1
2,334
468
971
119
1,199
1
433
148
TOTAL ASSETS ................... ........ ..
8,555e
8,0220
8,86.4-
982
5,840
1,082
811
5,670
906
1,193
5,951
1,084
Total deposits •••••••• •••••••••••• .• •• ..• • .•
Borrowings •••••••• ••• •••• •••••• •• , •••• , •••••
Other liabilities •••••• ••• ••••• •••• •. ••••••.••.•
Total capital accounts •••••••••••••••••••.•••••
7,904
5.
47.
8,228
5990
7,387
28.
49.
558e
TOTAL LIABILITIES AND CAPITAL. •••••.•••••••
8,555e
8,0220
8,864
Cosh In 'IIoult ..... ... . ........ . . .. .. ......... .
LIABILITIES AND CAPITAL
Demand deposits of banlcs • • •••••••••••. •.•••••
Other demand deposits ••••••••••••••••••••••••
Time deposits •••••••••••• ••••••••••••••••••••
e
COMBINED TOTAL
, 954
°
48
588
Estimated.
Demand deposits of weekly reporting member banks rose
$166,053,000, or 4.4 percent, during the 4 weeks ended
August 18, with domestic interbank deposits accounting for
slightly less than two-thirds of the expansion. Country correspondents built up their balances with these larger banks
with funds partly obtained from cash redemptions of the
CCC certificates of interest maturing August 2. The more
notable changes in other categories of demand deposits included increases of $33,758,000 in deposits of the United
States Government and $23,853,000 in the accounts of indiBANK DEBITS, END-Of-MONTH DEPOSITS
AND ANNUAL RATE OF TURNOVER OF DEPOSITS
Date
Gross
demand
July 1952 ..... $6,566,056
July 1953 •••.• 6,572,440
March 1954 . .. 6,821,245
April 195.4 •... 6,802,386
May 1954 •.•• 6,752,376
June 1954 •••• 6.804,576
July 1954 ..... 6,874,500
Time
RESERVE CITY BANKS
Gross
demand
Time
COUNTRY BANKS
Gross
demand
Time
744,250 $3,147,075 $408,616 $3,418,981 5335.6 34
901,614 3,152.963 495,431
3,419,477 406,183
1,031,005 3,277,128 579,324 3,544,117 451,681
1,057,137 3,295,363 594,744 3,507,023 462,393
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
1,08 1,651
3,349.903 600,870 3,524,597 480,781
viduals and businesses. Time deposits of individuals, partnerships, and corporations rose $7,865,000.
Gross demand deposits of all member banks in the District
averaged $6,874,500,000 during July, up $69,924,000 as
compared with June and $302,060,000 over July 1953_ The
June-to-July increase was divided about evenly between reserve city and country banks_ Time deposits declined $1,489,000 during July to average $1,081,651,000, marking the first
reduction in these accounts since March 1952. Reserve city
member banks accounted for somewhat more than the total
decrease_
Charges to deposit accounts reported by banks in 24 cities
of the District virtually were unchanged in July as compared
with June but were 5 percent above July 1953. The June-toJuly change reflected the net effect of increases for about
one-half of the reporting cities and offsetting reductions for
the others. The annual rate of turnover of deposits rose from
18.0 in June to 18_1 in July_ The rate of turnover for July
1953 was 17,8.
(Amounts In thousancb of dollars)
DEBITSI
DEPOSITS!
Percentage
change from
City
Jufy
1954
July Jooe
1953 1954
ARIZONA
Tucson •• ••• ••••••••• $ 101,179
-3
LOUISIANA
Monroe •••••••••••••
48,257
-2
Shreveport ••• • ••••••
203.093
6
NEW MEXICO
Roswell •••••••••••••
24,868
TEXAS
Abilene •••••••••••••
56,433
9
Amarillo •••• ••••••••
135,495
4
Austin ••••• • ••••••••
120,347
9
Beaumont •••••••• •••
114,169 -13
CorplJI Christi •••••• • •
165,492
5
Corsicana • ••••••••••
12,332
-2
Dallas ••••••••• • • • ••
1,783,406
8
EJ Paso ••••••••• .•••
183,374
-8
Fort Wortfl ••• •••••• •
541,545
6
Galveston •• •• • •••• ••
74,610
-2
Houston •• • . •••••••••
1,756,080
6
Laredo •••••••••••• •
18,614
-2
Lubbock •• • • • •• •• •••
98,590
7
Port Arthur ••••••••••
47,277
1
Son Angelo •••• ••• •••
41.Q95
10
Son Antonio •••••••••
409,462
4
Texarkana' ••••••••••
17,190 -12
Tyler ••• • •••••••.•••
61,288
5
79,083
Waco •••••••••• • .••
6
Wichita Falls •••••••••
83,431
2
Total-24 cilies ••• • 56,176,710
Annual faleofturnover
July 31,
1954
July
July
June
1954 1953 1954
-3
8.4,952
14.4
14.5
14.8
6
1
41 ,260
167,825
13.4
14.5
15.5
14.2
12.6
14.6
-4
28.542
10.3
10.7
10.7
5
-5
4
-8
53,177
102,056
103,663
93,130
118,534
20,664
909,914
119,948
330,655
67,333
1,076,133
17,50.4
81,256
37,553
45,5.45
313,.400
17,508
56,150
62,439
103,812
12.7
16.2
13.3
14.6
16.8
7.1
22.9
18.1
19.4
13.2
19.4
12.4
14.4
15.1
10.9
15.7
11.8
12.8
15.1
9.6
12.2
15.0
13.3
16.9
17.4
7.7
22.6
20.3
18.4
1/.2
19.0
12.2
J.4.0
15.2
10.0
J.4.9
12.2
13.2
14.5
10.1
12.2
15.5
13. 1
15.2
16. 1
7.7
22.3
17.9
20.3
12.5
19.6
12.4
13.6
15.1
10.9
16.0
11.413.3
14.6
10.8
-I
$4,052,953
18.1
17.8
18.0
7
1
-4
5
-7
3
2
-5
6
-3
-4
7
-1
4
- I
3
1 Debits to d e mand deposit accaunh of individuals, partnerships, and corporations and
of states and political sIJbdivisioru.
, Demond de posit accounts of indiyiduals, partnerships, and corporations and of slates
and political subdivisions.
, These figures include only one bonk in Texarkana, Texas. Tota l debits for all bonks In
Texarkana, Texas·Arkansas, including two banks located in the Eighth District, amounted to
$34,988,000 for the month of July 1954.
l Indicates change of leu than one-half of 1 p ertent.
Between July 15 and August 15, member bank reserve
deposits at the Federal Reserve Bank of Dallas rose $112,730,000_ Other changes during the month in the condition of
the bank included an increase of $47,582,000 in gold certificate reserves and a decrease of $34,623,000 in total earning
assets. Holdings of-Government securities were reduced $35,476,000, while loans and discounts rose by a relatively nominal amount. On August 15, Federal Reserve notes of this bank
in actual circulation totaled $730,275,000, as compared with
$723,683,000 on July 15 and $728,863,000 on August 15,
1953_
On August 13 the Treasury announced that investors had
exchanged $7,367,000,000 of the 2%-percent certificates of
indebtedness maturing on August 15 and September 15 for
the new refunding issues of I-year Ills-percent certificates
of indebtedness and 6%-year 2Ys-percent bonds. Exchanges
CONDITION OF THE fEDERAL RESERVE BANK OF DALLAS
(In that/land, of dollars)
Item
Total gold certiflcote reserves • .• .•.•••••.•••
Discounts for member bankl ••••.•. . •• .... ..
Other discol.mts and advances •.•.....•••...•
U. S. Govemment securities .•••••••••......•
Total earning aueh •...••••••••..•...•.•••
Member bank reserve deposits ••.•.•.•.•....
Federal Reserve notes in adual circulation •••..
August 15,
1954
877,173
329
4,230
938,207
942,766
1,127,315
730,275
August 15,
1953
July IS,
1954
S 588,849
51,870
428
1,178,811
1.231,109
995,6 16
728,863
829,591
3,00 1
705
973,683
977,389
1,014.585
723,683
~
MONTHLY BUSINESS REVIEW
NEW PAR BANK
The First State Bank of San Diego, San Diego, Texas,
a newly organized, insured, nonmember bank located in
the territory served by the San Antonio Branch of the
Federal Reserve Bank of Dallas, opened for business on
August 9, 1954, and was added to the Par List on August 10,1954_ The officers are: Earl Delaney, 'President;
Walter W_ Meek, Vice President; and J_ C_ Lopez,
Cashier_
represented 98.1 percent of the outstanding amount of the
maturing securities. Holders turned in $2,733,000,000, or
98_0 percent, of the August 15 maturity and $4,634,000,000,
or 98_1 percent, of the September 15 maturity in exchange for
$3,808,000,000 of the new bonds and $3,558,000,000 of the
new certificates_ Each of the new issues is dated August 15.
On August 12 the Treasury called for redemption on December 15 the 2-percent bonds of 1951-55 dated December
15, 1941. These bonds are outstanding in the amount of
$510,000,000_ Upon calling these securities for payment
prior to maturiLy, the Secretary of the Treasury announced
that holders may be offered the privilege of exchanging their
bonds, in advance of the redemption date, for other interestbearing obligations of the United States
Petroleum markets developed a
firmer tone in the last half of July
and the first part of August, after
a pronounced weakness in early July
threatened a general break in the
crude price structure. Increases in Gulf Coast cargo prices
of gasoline and distillate fuel oil were followed by increases
in wholesale gasoline prices and the rescinding of voluntary
discounts on distillate fuel oil on the East Coast.
These firming tendencies in petroleum markets have been
an outgrowth of cutbacks in refinery runs, together with further reductions in August allowables of the major producing
states in the Southwest. District refinery crude runs averaged
1,938,000 barrels per day in July, down 64,000 barrels per
day from June and the lowest level since the refinery strike
CRUDE Oil, DAilY AVERAGE PRODUCTION
(In thousands o f barrels)
Change from
Area
July
1954 1
ELEVENTH DiSTRICT . •.•••.• •
Texas . .......... . . . . . ..
Gulf Coasl . . .. . .......
West Tell.os . ..........
2,940.6
2,627.0
575.4
East TeJlcs (proper) •. . . .
Panhandle .... . .... . .. .
Rest of State . . . .... . ...
Southeastern New Mexico . .
Northern l ouisiana . . . .....
218.5
1,016.9
July
1953 2
June
19S4 l
3,184.0
3,080.6
2,877.1
644,3
1,095.9
249.2
2,764.2
606.6
1.069.7
234.9
80.1
82.0
75.2
734.2
201.8
111 .8
OUTSIDE ElEVENTH DISTRICT. 3,341.3
812.5
192.5
114.4
3,419.2
6.281 .9
6,603.2
UNITED STATES ... . .. ... . . .
SOURCES;
1
July
June
1953
1954
-140_0
-137.2
-3 1.2
-52.8
-16.4
1.9
3,405.1
-243.4
-250.1
-68.9
-79.0
-30.7
6 .8
-78.3
9.3
-2.6
-77.9
6,485.7
- 321.3
-203. 8
772.9
203.6
112.8
Estimated from American Petroleum Institute ..... eekly reports.
~ United Slates Bureau of Mines.
-38.7
-1.8
-1.0
-63.8
139
in May 1952. Crude runs in the Nation's refineries in July
showed a smaller decline than in the District. In the first 2
weeks of August, crude runs in the Nation declined further,
while those in the District remained about unchanged.
Reflecting lower allowables in Texas and Louisiana, crude
production in the District during the first part of August was
at the lowest level in 2 years, averaging 2,875,000 barrels per
day, or 66,000 barrels below July and 289,000 barrels less
than in August a year ago. In the Nation, production showed
an even larger decline; daily average production in the first
part of August, at 6,156,000 barrels, was 427,000 barrels
below a year earlier.
The District's daily average production probably will show
an increase in September, in view of the action of the Texas
Railroad Commission in increasing daily allowables 67,235
barrels over the mid-August leveL The number of state-wide
producing days iu Texas was held unchanged at 15, but since
September has one less day than August, the result is a rise
in the daily allowable.
In contrast with the decline in domestic production, imports
rose moderately during July and early August to exceed
year-earlier levels for the first time since February. In the 5
weeks ended August 13, imports of crude oil and refined
products averaged 984,000 barrels per day, which is 44,000
barrels higher than in the previous 5 weeks and 84,000 barrels higher than in the same weeks last year.
The demand for petroleum products continues to fall below
earlier industry expectations. Demand for major refined
products at refineries and bulk terminals in the 5 weeks ended
August 13 was slightly less than a year earlier. Moderate
year-to-year increases in the demand for gasoline and distillate fuel oil were more than offset by substantial decreases
in the demand for residual fuel oil and kerosene.
The gasoline stock situation, which has been a major cause
of concern in the petroleum industry during the past several
months, has shown some improvement recently. Gasoline
stocks declined almost 8,000,000 barrels in the 6 weeks ended
August 13, a larger decline than has occurred in the same
period in most recent years. Nevertheless, gasoline stocks on
that date, at 156,300,000 barrels, still were l4o,600,000 barrels, or 10 percent, higher than a year earlier. Residual fuel
oil stocks continue substantially higher than a year ago_ Com.
plicating further the refined products stock situation, an
imbalance exists in the regional distribution of stocks, with
Middle West stocks being particularly heavy. Crude stocks
showed little change during July and early August.
Drilling activity in both the District and the Nation was
maintained at record levels during the first half of this year.
Well completions in the District in the first half of 1954
totaled 10,512, or 9 percent higber than in the same period
last year, according to data in The Oil and Gas Journal. The
total of 25,868 wells drilled in the Nation was 11 percent
higher than last year's first-half totaL The number of wildcat completions, however, was slightly lower than a year
earlier in both the District and the Nation.
MONTHLY BUSINESS REVIEW
140
NATURAL GAS, MARKETED PRODUCTION
(In millions of cubic feet)
Fourth quarter
First quarter
First quarter
Area
1954
1953
1953
louisiana ••••....... ......•••
313,900
127,200
171,000
321,200
117,300
161,400
1,167,400
1,767,300
New Mexico .............. .. .
Oklahoma •••............... .
Texas .......•. •.........•..
1,180,900
307,400
98,600
171,500
1,164,700
Total ........ . ........... .
1,793,000
1,742,200
SOURCE: United Stotes Bureau of Mines.
Marketed production of natural gas in the four producing
states lying wholly or partly within the Eleventh DistrictLouisiana, New Mexico, Oklahoma, and Texas- showed a
moderate seasonal increase in the first quarter of 1954, At
1,793 billion cubic feet, the marketed production was 2.9
percent higher than in the first quarter of 1953. This year·
to·year increase was smaller than in any previous quarter in
the past few years and reflects, in part, some leveling off in the
growth of demand from industrial consumers.
Total nonagricultural employment
in the five states of the District in·
creased from July to August to reach
3,851,000, with a large portion of
the gain caused by seasonal factors.
August was the first month since February that total nonagricultural employment exceeded that of the comparahle month
last year. However, in August 1953, a series of strikes depressed nonagricultural employment. The July·to-August gain
was occasioned largely by increases in construction and trade
employment, although there was some improvement in manufacturing employment.
Manufacturing employment rose in August for the third
consecutive month, and the estimated total of 712,000 reflects
a moderate increase over July. Although manufacturing employment remained at a level approximately 4 percent helow
the record peak of August 1953, recently there has heen some
improvement and more is expected. Most of the manufacturing rise in August can be attributed to gains in the apparel,
machinery (except electrical), transportation equipment, and
stone, clay, and glass products industries. Minor improvements were noted in most other manufacturing categories,
with the exception of food processing, which normally suffers
a seasonal setback following the peak in June.
NONAGRICULTURAL EMPLOYMENT
Five Southwestern Stales 1
Percent change
June 1954 from
Number of persons
Type of employment
June
June
May
19S4p
1953
195.4
Total nonagricultural
wage and lalory workers .. 3,846,500
Manufacturing ...........
704,900
Nonmanufacturing ........ 3,141,600
Mining ................
23.4,900
Construction ........ .. .
297,600
Transportation and public
utilities ...... . ... .. . .
393,300
Trade ................
977,600
finance ..•............
158,500
Service ....... ..... .. .
4S8,300
Government • . . .. .. ... .
621.400
Average weekly earnings of Texas manufacturing workers
rose from April through June to reach a record $72.28, which
compares with $69.30 a year earlier and $71.82 last December. Based on average weekly earnings, the highest paid
workers in this manufacturing group were those employed in
crude petroleum production, petroleum refining, and trans·
portation equipment manufacturing.
Unemployment in Texas, after climbing sharply from May
to June, declined in July and then leveled off at an estimated
132,000 in August, or 20,000 above July 1953 but 13,000
below the peak in Fehruary 1954.
The value of construction contracts awarded in the District in July is estimated at $105,662,000, down 7 percent
from June but 6 percent ahove July 1953. Residential awards,
which reached a record high for the month, are valued at
$4.9,545,000, about the same as in June and 40 percent higher
than in July 1953. On the other hand, nonresidential awards
fell 13 percent helow both the June total and the year.earlier
total to an estimated $56,117,000.
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of dollars)
January-July
July
June
19S3
1954
July
1954p
Area and type
ElEVENTH OISTRICT .... $ 105,662 $
Residential ..... . .. .
49.S4S
All other ..........
UNITED STATES' .....
Residential ........
All other ..........
.
.
.
.
56,117
1,836,935
745,440
1,091,495
99,625
35.387
64,238
1,793,342
653,407
1,139,935
1954p
19S3
114,078 $ 768.487 $ 708,047
49,858
360,811
322,393
64,238
407,676
385,654
1,733,264 11 ,088,144 9,701,180
720,266
4,726,131 3,911,903
1,012,998
6,362,013 5,789,277
1 37 states east of the Rocky Mountains.
p-Preliminory.
SOURCE: F. W. Dodge Corporation.
Construction contracts awarded in the District in the first
7 months of 1954 are valued at $768,487,000, np 9 percent
from the comparable period last year. Residential awards alld
Ilonresidential awards gained 12 percent and 6 percent, respectively.
May
J""e
1953
1954
3,874,200
734,700
3,139,500
230,700
299,700
3,822,900
700.400
3,122,500
226.200
286,500
-.7
-4.1
,1
1.8
-.7
.6
.6
.6
3,8
3.9
409,500
979,400
153,000
449,200
618,000
390,200
976,500
156,800
453,300
633,000
-4.0
-,2
3.6
2.0
,6
.8
.1
1.1
1.1
- 1.8
I ArizOf\Q, Louisiana, New Mexico, Okla homa, and Texas.
p- Preliminory.
SOURCE: State employment agencies.
Average weekly hours of Texas manufacturing workers,
after a steady decline from January to April, rose to 41.3
in June and are estimated to have increased to 41.4 in July
and August. At this level, the average weekly hours of manufacturing workers in Texas would be only slightly below the
41.9 hours worked during August 1953. During June, all
major durable goods manufacturers were employing their
laborers more than 40 hours per week, with manufacturers
of fabricated metals products and stone, clay, and glass products employing their workers over 44 hours per week.
Expenditures for new construction in the United States rose
seasonally in July to a new monthly peak of $3,513,000,000
and reached a record total of $20,135,000,000 for the first
7 mOllths of the year, according to preliminary estimates
prepared jointly by the United States Departmellts of Commerce and Labor. Comparing the J anuary-J uly 1954 volumes ~
with those of a year earlier, private expenditures were up 4 ~
percent, while public outlays were about the same. Increased
spending by state and local governments offset a decrease in
Federal spending.
@FedFRASER