TEXAS BUSINESS REVIEW A Monthly Summary of Business and Economic Conditions in Texas BUREAU OF BUSINESS RESEARCH THE UNIVERSITY OF TEXAS VOL. XXXIX, NO. 1 TWENTY CENTS A COPY-TWO DOLLARS A YEAR JANUARY 1955 Adjustment for Seasonal Variation Dairy Products Manufacturing Index • 1~47-1949 •100 1so r-----+----+----1----+-----i1so A. Unadjusted Seasonal adjustment, illustrated in the chart-series at left, is the statistician's means of compensating for the seasonal factors that influence most businesses in the same manner year after year. Chart line A is a simple graph of the output of manu­factured dairy products-ice cream, butter, cheese, and concentrated milk products-in Texas. Production is expressed as a percentage of the average monthly production in the years 1947-49 rather than in pounds or other concrete units. As might be expected, the output of these products is much greater during the summer, when more milk is available and when there is a seasonal rise in demand for ice cream. Statisticians study this seasonal pattern for several consecutive years and formulate an average pattern of seasonal variations, as seen in line B. Then the actual production figures (A) are adjusted to take out the portion of the variation in production that can be attributed to the purely seasonal forces represented by line B. Line C shows the fluctuations in the output of manufactured dairy products that remained after the purely seasonal variations represented by line B were removed. In March 1953 production was 86, but March pro­duction is normally 15°/o below the average monthly production for the year. This means that March pro­duction was the equivalent of I 0 I if there had been no seasonal variation present. In the same way Octo­ber 1954 production of 53 was found to be 56 after allowance for seasonal variation. Line C represents the monthly fluctuations in the output of manufactured dairy products that resulted from applying the sea­sonal adjustment factor to each month so that the effect of forces other than seasonal were reflected. ®tF 1j[E!(fl\~ JAN 1955 The Business Situation in Texas Business act1v1ty in ,Texas registered a moderate im· provement during November. The index of business ac· tivity compiled by the Bureau of Business Research rose 1% from October and stood at 8% above the level of November 1953. The rise in November restored two out of the three points lost by the index in October, bringing it to within one point of the record high of 156 established in September. Monthly time series frequently show rather sharp month-to-month fluctuations which are difficult at the time to distinguish from the more basic movement of the series. The chart below shows that in spite of these erratic fluctuations the level of Texas business activity has increased substantially and rather steadily during the first eleven months of 1954. The table below shows the fluctuations in the various components of the index of business activity. Only two of the components of the index of business activity declined during November from the level of October, and only one was lower than November 1953. INDEX OF TEXAS BUSINESS ACTIVITY AND COMPONENT SERIES (adjusted for seasonal variation, 1947-49 = 100) Nov Oct Percent Index Weight 1954 1954 chan ge INDEX OF BU SINESS ACTIVITY (COMPOSITE) --------------------------­100.0 155* 153* + 1 Total electric power consumption --------·--­ 3.0 245* 253* 3 Crude oil runs to stills _______________________ 3.9 127 125 + 2 Ordinary life insurance sales, deflated____ 4.2 186* 176 + 6 Crude petroleum production ----------------­ 8.1 120 113 + 6 U rban bu ilding permits issued, deflated .... 9.4 157* 165* 5 Miscellaneous freight carloadings_________ __ 10.0 92* 89 + 3 Industrial electric power consumption ___ 14.6 243* 241* + 1 Retail sales, deflated ---------------------·········-­ 46.8 140 137 + 2 *Preliminary. Business in the country as a whole has begun to show definite signs of improvement, although this rise has come considerably later than the recovery movement in Texas business. The index of industrial production compiled by the Board of Governors of the Federal Reserve System rose from 126 to 129 (preliminary estimate) in November, the third consecutive month that an increase has been shown. Increases were spread widely throughout industry, but durable goods accounted for the largest share of the rise. Automobile production during November averaged 134,200 cars and trucks per week, compared to 103,600 per week during November 1953. ,The seasonal pattern in automobile production was different in 1954, because production was curtailed earlier to permit the changeover to new models. With the early introduction of the 1955 models, production during November ran far ahead of the same period last year. December production schedules forecast that production will be the highest monthly rate since 1950. The public reception of the new models indicates that the automobile industry will continue to be a strong supporting factor in the 1955 business picture. The most spectacular phase of Texas business during 1954 has been the construction industry. Building permits issued during the first eleven months of 1954 were 26% greater than in the first eleven months of 1953 and only slightly below the record year of 1950. The F. W. Dodge Corporation's compilation of contracts awarded in ,Texas showed an increase of 10% for the same period. Depart­ment of Commerce estimates of new construction put in place in the United States reached a new high in Novem­ber, 8% above November 1953. Nonfarm housing starts in the United States reached a new record for the month of No\'ember, totalling 103,100 units, 26% higher than a year ago. Expanding industrial activity continued to give strong support to Texas business. although the rate of expansion in 1954 probably was slightly lower than in 1953. No comprehensive statistical data are available on industrial expansion in Texas, but the information on new plants and the expansion of existing facilities shows very little slowing down in activity. For the United States new infor­mation on capital expenditures became available from the survey made in November by the Securities and Exchange Commission and the Department of Commerce. The survey Texas Business Activity Index • Adjusted for seasonal variation .1947-1949 • 100 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 showed that businesses anticipated that their expenditures for 1954 would total $26.7 billion, compared to $28.4 billion in the record year 1953. Each quarter of 1954 showed a small decline, after adjustment for seasonal variation, and this decline was expected to continue into the first quarter of 1955. Every type of business showed this decline during 1954., although it was small in every case. .The total of over $26. 7 billion spent in 1954 represents a tremendous volume of capital expenditures, particularly when it is remembered that in 1950 expenditures amounted to only $20.6 billion. In each of the four years since 1950 expenditures have exceeded $25 billion. With Texas making rapid strides towards industrialization, the indus- Wholesale Prices in the U.S. Index • 1947-1949 •100 I20llO -~ - ~ "' I I I " DO • • .J 1 r ~~ 1 • II ,....-­ 10 II / 10 .. 19J9 1940 1941 194.2 ' ISO 1"4 1545 ml 1941 1941 1949 mo JUI 1152 till .IU4 0 tries of the state have received a substantial share of these capital expenditures. Consumer buying in Texas during November was 5% more than a year ago, and 2% above October 1954. All of this rise from October was in durable-goods stores, with nondurable-goods stores reporting a decline of 3%, compared to the increase of 10% in durable goods. All types of durable-goods stores registered strong gains in comparison with the previous month. Lumber and hard­ware stores reported a gain of 30% over November 1953, while furniture and household equipment stores gained 19%. Sales of automobile dealers were practically un­changed in comparison with a year ago. Total retail sales for the years 1953 and 1954 are apparently going to be very close, although the patterns of business in the two years were considerably different. During 1953 sales were declining, while in 1954 they were increasing. The level of prices has stayed remarkably stable during recent months. The index of wholesale commodity prices for November rose very slightly from the October level, but it can be seen from the chart above that there was very little change in prices during 1953 and 1954 .. What change did occur was a very slight downward movement. The index of consumers' prices showed almost the same pattern as wholesale prices. The table below shows that a frac­tional rise occurred between September and December, but the average for 1954. was 116.7 compared with an average of 116.8 for 1953. INDEXES OF CONSUMERS' PRICES IN HOUSTON (1947-49=100) Source: Bureau of Labor Statistics, U.S. Department of Labor Nov Aug Nov from from Index 1954 1954 1953 Aug 1954 Nov 1958 ALL ITEMS ·--····-116.7 116.5 117.3 x Food 110.3 111.9 ------------·------------------112.3 2 Apparel 106.9 108.1 --------------------107.0 x Housing 124.8 124.1 124.1 --------------------------+ 1 + Transportation ------------------125.8 123.1 126.9 + 2 Medical care --···-··........... 119.9 119.9 119.2 0 Personal care 119.7 119.5 120.1 x Reading and recreation__ 111.6 108.5 114.9 3 + Percent change Nov 1954 Nov 1954 Other goods and services.... 119.1 119.1 119.4 0 xChange is less than one-half of one percent. One of the most important measures of business, as far as the public is concerned, is the level of employment and unemployment. Nonfarm employment in the United States reached a new high for the year in November after rising more than seasonally for the third consecutive month. Re­hiring by automobile firms and the seasonal upturn in retail trade accounted for most of the increase. An un­usually large seasonal decline in farm employment re­sulted in a drop of 410,000 in total employment between October and November. Unemployment rose from 4·.2% of the labor force in October to 4.5% in November, but the Department of Commerce reported that the rise was less than the normal seasonal increase. Bank Debits in Texas Index • Adjusted for seasonal variation • 1947-1949. JOO Inventories of manufacturers increased during October, due to an increase in inventories of durable-goods pro­ ,.. ducers. This was the first rise in the level of manufacturers' inventories in more tl:ian a year. In the 12 months ending October 31, 1954, manufacturers' inventories dropped 7% 100 and retailers' inventories 3 %. Retail inventories declined further during October. The fact that inventories of manu­facturers have begun to rise indicates that these business­men think the decline has come to an end. The fact that • " the decline in inventories did not generate any serious decline in the other parts of the domestic private invest­ment (building or producers' durable goods) may be taken as rather conclusive evidence that the minor recession is coming to an end . .The fact that business investment in Texas has been proceeding at a more rapid rate than in the rest of the country probably accounts for the fact that the decline was less and the recovery quicker than for the country as a whole. 193' 1148 IUI 1142 194J 1'4-4 1'4~ 1141 190 IMI tMt 1150 IHI 11S2 ISSl ltS4 The index of bank debits in 20 Texas cities, computed by the Bureau of Business Research from data compiled by the Federal Reserve Bank of Dallas, again established a new high in November, 183% of the average month in the 1947-49 period. (See chart above.) This level repre­sented an increase of 3% from October and was 12% above November 1953. JOHN R. STOCKTON TEXAS BUSINESS REVIEW Robert H. Ryan____________________Managing Editor COLLEGE OF BUSINESS ADMINISTRATION THE UNIVERSITY OF TEXAS _________Dean William R. SprlegeL. Bwiness Research Council William R. Spriegel (ex officio), J. W. Cashin, A . F. E'tier, J. L . Hazard, Elizabeth Lanham, R. H. Montgomery, and G. H. Newfove. STAFF OF THE BUREAU OF BUSINESS RESEARCH John R. Stockton Director Stanley A. Arbfngaat Assistant Director Florence Escott Research Supttrtlisor Re•ource• SpuialiBt Richard C. Henshaw, Jr. StatiBticia,n A . Hamilton Chute R•tailing Speciali•t Robert H. Ryan Research A•sociat6 Francis B. May Research Associate Alfred G. Dale R esP-arch Associate Anne K. Schuler Research Associate William S. Lowe, Jr. Research Associate J o Overstreet Senior Clerk Sylva Bowlby Research .4 ssista-·nt Marjorie T. Cornwell Administrative Clerk Martha Ann Moore Statistical Assistant Calvin Jayroe Offset Press Operator David Lewis Tina Piedrahita Alice R. Locklin Cartographer Publications Assistant Libra1'1/ AssiBtant Judy Vaughan Mary Frances Oxford Secretaries Assistants Pierce Arthur, Jr.• Marilyn Biel, Ben Cummins, l\ilaurice Friedman, Benny Hill, J ulian Jones, Virginia Kindig, Patricia Ludwig, Clifford McCormick, Jr., Don Noble, Candis Pattillo, and Sharon Young. Cooperating Faculty A. B. Cox Elizabeth Lanham Profes•or of As•ociate Prof•••OT Cotton Marketing of Management TABLE OF CONTENTS Adjustment for Seasonal Variation ____ -------·------------1 The Business Situation in Texas____ _____ __ __ ___________ 2 Construction --------------------------------------·--· 4 Retail Trade . _-··----------------­ 6 Finance ------·-----·--·-------·-------·· ·--------­ 8 Industrial Production ________ .. ·---··---··---__ ______ ____ 9 Labor ________ ________________________________ .___________________ __ ----------· 10 Agricultural Chemicals in ,Texas _______ __ ____ __ __ ___ ___ 11 Local Business Conditions ____ ____ ________ ____ __________________ 14 Barometers of Texas Business. _------___ __ ____ ______ _________ 20 Published monthly by the Bureau of Businese Research, College of Business Administration, The University of Texas, Austin 12. Entered aa second class matter May 7, 1928 at the post office at Austin Texas, under the act of August 24, 1912. Content of this publication is not copyrighted and r:lay be reproduced freely. Acknowledgement of source will he appreciated. Subscription $2.00 'J year : individual copies, 20 cents. • TEXAS BUSINESS REVIEW CONSTRUCTION Texas construction shows slight decline. After ad­justment for seasonal variation, Texas building con­struction authorized in November was 5% lower than in October but was 40% above November 1953. The decline resulted primarily from a 31% decrease in new nonresi. dential building and a 33% decrease in additions, alter­ations, and repairs to nonhousekeeping buildings. Even though office and bank building increased by more than S5.9 million during November, public works and utilities decreased over $6 million. Other major decreases occurred in commercial garages (-937c) ; institutional buildings (-827c) ; amusement buildings, stores, and other mercan· tile buildings (each -62%) ; service stations (-257{) ; and educational buildings (-13%). ~~~~~~~~~~~~~--. V11lue of Building Constmtit1 Authorized in Texas Index • Adjusted for seasonal variation • 1947·1949 •100 mg li43 1s41 1s.12 1m 134"4 Ji45 "" tso ma 1m mo m1 1m 1953 1m Residential building, however, registered a substantial 10/i. increase in l\overnber compared with October, with one·farnily houses increasing 11% ; duplexes, 13%; and three-and four.family houses increasing 310'.?c. Building activity this year has been at a rate well above January-:\ovember 1953. However, with the o.-erall de· cline experienced in j\ovember, the year-to·date average decreased from + 28% (January-October 1954 compared with January-October 1953) to +26% (January-Novem· ber 1954 compared with January-i\'o\·ember 1953). In Dallas, November permits were issued for 734 new dwelling units for an estimated total of $6.8 million; Houston, 592 for $6.6 million; Irving, 521 for $3.8 mil· lion; San Antonio, 466 for $3.0 million; Fort Worth, 327 for $2.0 million; Corpus Christi, 283 for $2.0 million; Austin 207 for $2.5 million; El Paso, 172 for $1.7 mil· lion ; Garland, 158 for $1.1 million; Lubbock, 127 for $1.4 million; and Amarillo issued 107 permits for $1.0 million worth of new dwellings. In San Antonio a permit was issued for an office build· ing to cost $4. 7 million ; another permit was issued in VALUE OF CONSTRUCTION CONTRACTS AWARDED Source: Dodge Stat istical Research Service January-November Type of Nov Percent construction 1954 1954 1953 change Value (thousands of dollars) NEW CONSTRUCTION_ 111,124 1,188,439 l,076,009 + 10 ALL BUILDINGS ---­Residential building ______ 93,304 61,257 961,099 588,441 885,659 439,064 + 9 + 34 Nonresidential building __4 32,047 372,658 446,595 -17 PUBLIC WORKS AND UTILITIES ----­ 17,820 227,340 190,350 + 19 Amarillo for an office building to cost $1.3 million. Hous­ton issued two permits for $1.9 million worth of edu­cational buildings. Twenty permits for stores and other mercantile buildings were issued in Dallas for $2.6 mil­lion and 23 were issued in Houston for $1.3 million worth of s~ores and other mercantile buildings. Construction contracts awarded. Awards for com· mercial building in November increased over 200% from October 1954, while manufacturing building, educational and science building, and hospital and institutional build­ing decreased 73o/o, 39%, and 99%, respectively, causing total nonresidential building to decrease 10% from Oc· tober 1954. There were no contracts awarded for hotels in October or November, but awards for dormitories and apartment buildings rose $2.5 million each. One-family houses in· creased over $22 million, including a tremendous increase (over $23 million) in houses for sale or rent and a slight decrease ($1.3 million) in houses built for occupancy by owners. Awards for public buildings over the 11-month period increased 21'%. The largest increase percentage­ wise was in residential building (290% ). The number of dwelling units provided in residential building was 4,209, which brought the 11-month total to 48,593, some 26% over the January-November 1953 total of 38,527. So far this year, contracts for 3,899 apartment type dwelling units have been awarded, 39% more than in 1953. Only 926 dwelling units in duplexes have been started since January, 59% less than January-November 1953. One­ family houses for sale or rent showed a 34% increase over January-November 1953. National activity declines. New construction activity declined seasonally in November, but the $3.3 billion of work put in place set a new record for the month and was 8% above November a year ago, according to preliminary estimates prepared jointly by the U. S. Department of Commerce and Labor. On a seasonally adjusted basis, out­lays for new construction were at an annual rate of $38.l billion, the highest level ever reached. Private residential building activity, at $1.3 billion, was the largest November total ever recorded and nearly 25% more than similar outlays in the same month of last year. Expenditures for new office building and church construction were at an all-time high in November, while a continued recovery was indicated for private industry construction, which showed an upturn for the second con· secutive month. During the first 11 months of 1954, new construction outlays amounted to $34.l billion, 5% more than in the same 1953 period. Total private work was up 7% over January-November 1953 to $23.4 billion, with residential, commercial, religious, and educational building setting new records for the period. Continued increases to new record levels for all im· portant classes of state and local government construction have been largely offset by a reduced volume of direct federal construction and public housing, so that total public construction expenditures in 1954 through No­vember were ab-0ut the same as in the corresponding months of a year ago, $10.6 billion. Texas construction employment stays high. Con­struction employment wavered in October as the result of contract completions and labor-management disputes, according to the Texas Employment Commission. The ESTIMATES OF VALUE OF BUILDING PERMITS ISSUED Source: Bureau of Business Research in cooperation with the Bureau of Labor Statistics, U. S. Department of Labor January-November Nov Percent Classification 1954• 1954 1953 change CONSTRUCTION CLASS Value (thousands of dollars) ALL PERMITS ·--------82, 795 848,531 673,245 + 26 New construction _____ 76,896 767,413 592,813 + 29 Residential -·-----------50,641 497,521 350,423 + 42 Housekeeping --------50,522 491,770 331,977 + 48 Single family -------48,980 466,394 315,457 + 48 Multiple family ____ 1,542 25,376 16,520 + 54 Nonhousekeeping ---119 5,751 18,446 -69 Nonresidential ---·-----26,254 269,892 242,390 + 11 Additions, alterations, and repairs -····-··-·-·----5,900 81,118 80,432 1 + METROPOLITAN vs. NONMETROPOLITANt ALL PERMITS ·-------82, 795 848,531 673,245 + 26 Metropolitan -----·-·----65,781 655,749 510,461 + 28 Central cities ________ 53,411 568,750 452,622 + 26 Outside central cities___ 12,370 86,999 57,839 + 50 Nonmetropolitan -----------17,014 192,782 179,740 7 + 10,000 to 50,000 pop.. ___ 10,396 110,908 100,852 + 10 Under 10,000 pop. ___ 6,618 81,874 78,888 4 + Only building for which permits were issued within the incorporated area of a city is included. Federal contracts and public housings are not included. •Preliminary. tAs defined in the 1950 Census. number of persons involved in disputes was not large, but other workers were affected by th~ work stoppages. Late October settlements, however, should pull the total up again to its September level. Construction is forecast to continue in high volume, but from now through the win· ter the number of jobs available will be greatly affected by the weather. A sizeable backlog of residential, indus­trial, and school projects was augmented by addition of $18 million in military contracts for construction awarded between mid-October and mid-November. Permit values in Texas cities. The 16 central cities in the metropolitan group showed the only decrease (-18% ) during November compared to October 1954. Because this group represents the largest cities in Texas, total metropolitan building decreased 11 %. However, all other classes increased from 1% to 38%. Changes in value of building permits issued from Oc· tober to November in the six largest cities were: San An­tonio, +140% ; Dallas, +15% ; Houston, -38%; El Paso, -43%; Fort Worth, -50%; and Austin, -54%. Weatherford had the largest relative increase over Oc­tober, + 1240% ; followed by Taylor, + 1120%; Nava· sota, +920% ; Denison, +560% ; Raymondville, +530% ; Rockdale, +520% ; Childress, +450%; and Eagle Pass, +410'/r. The city leading the state in per capita value of building permits issued in November was Irving with $1,497.52. Other top cities were: Richardson, $576.42; Rockdale, $231.80; Mesquite, $142.10; Garland, $132.06; and Arlington, $129.36. Average municipal per capita build­ing in November was $18.78, about 9% below the $20.66 average for September. J0 OVERSTREET RETAIL TRADE Strong market situation. Dynamic confidence under­lies the present situation in retail distribution, in contrast to the seasonal holiday surge in sales but steadily de­clinin" trend of a year ago. Many observers are sure that 1954 ~vill prove to be the second best year in American business history, falling little short of the top level of 1953. Consumers have been displaying more confidence in their security in terms of income and the present price structure. Numerous reports indicate that holiday buying started in November on a thrift basis but that higher quality and more expensive goods have been increasingly in demand since then. Retail Sales in Texas Index • Adjusted for seasonal variation • 1947-1949 • JOO 1m IUD 1941 1941 ISO 1944 194S 1946 1941 "" mt 1150 IHI ttS? KS3 nu Sales volumes were increased in many areas as con­sumers were tempted by aggressive seasonal promotions, heavily cut prices, easier credit terms, and numerous night openings. The retail stores of the nation were selling in November at a rate of 2% over October (in Texas equal­ling October) and only 1 % below the peak rate of Febru­ary 1953. With a sturdy lift from sales of new-model auto­mobiles (although many at less than list prices and with easier credit terms than last year), sales are expected by many to match or surpass the record December sales of 1952 and 1953. However, the rate of profit is substantially lower. With more than the usual seasonal upturn in No­vember, and allowing for slowly decreasing prices in various lines, physical units of purchase in some lines of consumer goods and services are approaching new high figure5. ESTIMATES OF TOTAL RETAIL SALES Sales (mils of dols ) N ov 1954 Percent change Nov 1954 Jan-Nov 1954 Type of store Nov 1954 Jan-Nov 1954 from Oct 1954 from from N ov 1953 Jan-Nov 1953 TOTAL .............. $837 .2 $8,696.5 x + 5 Durable goods ···-····· 299.8 3,222.0 + 2 + 12 Nondurable goods ·-537.4 5,474.5 + 1 xChange is less than one-half of one percent. Sales of apparel showed their usual seasonal upturn, especially in men's wear, shoes, and some children's lines. Furniture and household goods remained sluggish except for televi sion and minor appliances. Food buying con­tinued well above last year. The used-car market was slow. Customers remained conservative in their use of credit, which totalled $700 million less than at the start of 1954. In contrast, installment obligations rose more than $3 bill ion in the first ten months of 1953. In the wholesale markets short-range buying continued with few commitments beyond 30-60 days. Some tendency appeared for the slow upbuilding of stocks. Rush reorders of holiday goods and general fill-in orders were plentiful. Showings of spring apparel drew good attendance but spotty ordering. Some delivery delays appeared in ap­parel lines. Ordering of furniture and of toys trailed 1953 but improved in December. Good orders were placed at the New York Curtain and Drapery Market. Prices of consumer goods, unusually stable throughout the year, fell slightly in October for the third consecutive month and reached the lowest point since mid-1953. In addition to food, which had shown a downward trend since late 1952, other items slumped. However, there were small price advances for rent and medical care, recreation, apparel, fuel, gas, and electricity. Recent prices for tur­keys were the lowest since 1942. Liquidation of inventories apparently has been ending and department store stocks have shown a "normal" seasonal increase for several months. Stocks of new automobiles, chiefly 1955 models, dropped to 245,000 at the close of October in contrast with 650,000 early in 1954. Prospects good. Many forecasters and observers be­lieve that 1955 will reveal a slow but steady upward trend in sales and some improvement in profit margins, al­though with the usual summer seasonal slowing. Some expect 1955 to top 1954 but to fall a little short of the 1953 peak. Encouragement stems from various surveys indicating optimistic buying intentions among customers. Little change is expected in prices or in the cost of living. Purchasing power will remain high. Merchandise will be plentiful. Confidence appears to be strongly based al· though still accompanied by reasonable caution. Ag­gressive promotion should still be profitable. RETAIL SAL ES TRENDS Source: Bureau of Business Research in cooperation with the Bureau of the Census, U.S. Department of Commerce Percent change Number of-~~~~~~~~~~ reporting Nov 1954 Nov 1954 Jan-Nov 1964 establish-from from from Group ments Oct 1954 Nov 1953 J an-Nov 1953 KIND OF BUSINESS DURABLE GOODS Automotive stores _______ 230 + 3 + 6 Furniture and household appliance stores ______ 136 + 10 + 8 Lumber, building material, and hardware stores __ 325 2 + 24 + 4 NONDURABLE GOODS Apparel stores -··-·---· 198 Drug stores ···-·--------· 172 Eating and drinking places 119 Filling stations ·····-·­-····· 1,250 + 1 x 8 + 5 + 7 + 10 + 3 + 12 + 2 4 + 7 Florists ·-·--·······-··-·-····-·­ 37 + 5 + 9 Food stores ···-·-·-········-··-·· 303 5 + 4 General merchandise stores Jewelry stores -------------­ 183 28 + 3 + 24 + 7 4 7 Liquor stores ----------­ 18 + 4 3 Office, st ore, and school supply dealers -·---·· 38 + 8 CITY­SIZE CLASS (1950) Over 250,000 ----····--···-1,648 10-0,000 to 250,000 ·-·-·-··· 244 50,000 to 100,000 -·····-···· 251 2,500 to 50,000 ···-····-··--­844 Under 2,500 ---------------­146 + + + x 5 4 3 4 + 6 + 14 + 12 + 10 + 2 + x xChange is less than one-half of one percent. CREDIT RATIOS IN DEPARTMENT AND APPAREL STORES Credit ColJection Number ratios* ratiost Classification of reporting stores Nov 1954 Nov 1953 Nov 1954 Nov 1953 ALL STORES --------------------­ 65 67.1 66.0 38.2 36.0 BY CITIES Austin -------------------------------­ 3 61.1 60.3 55.6 53.1 Cleburne ----------------­-----------­ 3 41.0 37.2 40.2 40.7 Corpus Christi ·-·--·--·-------··­ 62.0 60.1 44.5 37.6 Danas ---------------------------­ 7 71.8 72.4 39.4 37.7 El Paso ··--------·---···-··----------------·· 3 59.1 58.5 32.8 31.7 Fort Worth ----·--·······----··-----·-··· 70.1 68.1 36.6 36.3 Galveston ------------------------------­ ( 62.3 61.6 49.6 47.0 Houston -------------·--------------­ 6 66.7 64.0 34.6 31.5 San Antonio ·---····-----------·----­ 4 65.6 65.0 42.8 38.8 Waco ·---------·----···---·-····--··-··· 4 60.9 60.2 58.3 51.3 All others -------·---·---·--··· 25 59.4 58.1 43.6 40.4 BY TYPE OF STORE Department stores (over $1 million -·-­ ·-----·---··-···---· 20 68.2 67.3 37.0 34.9 Department stores (unde.r $1 million ---------------------------­--­ 17 46.0 44.0 39.2 42.0 Dry goods and apparel stores.... 4 58.5 58.2 44.8 41.8 Women's specialty shops --------­ 17 63.7 62.3 46.6 41.7 Men's clothing stores --------­ 7 64.0 61.6 50.4 49.4 BY VOLUME OF NET SALES Over $3,000,000 -------------------­ 19 68.3 67.3 87.4 35.1 $1,500,000 to $3,000,000 ----·­ 4 60.4 60.1 54.5 50.6 $500,000 to $1,500,000 ··-----·--­ 15 58.6 56.8 49.7 46.2 $250,000 to $500,000 --­-------------­ 12 47.3 45.3 40.9 42.5 Less than $250,000 ------------­ 15 45.6 44.1 42.9 42.9 •Credit sales as a percent of net sales. tColiections during the month as a percent of accounts unpaid on the first of the month. Surveys of Texas trade. Sales for the first 11 months still trailed January-November 1953 by 3%. The per­centage of decrease has steadily become smaller through the year. A drop of 15% has been registered in January, -8% in April and May, and-5% in August. Conversely the percentage of increase over 1952 registered a year ago had slumped from +13% in January to +8% in May­July and +4% in November. Reporting by cities, 264 Texas department and apparel stores averaged 3% over October and 7% above last No­vember but still 1 % under January-November 1953. Of the 33 cities tabulated, 18 bettered October, with the best reports coming from Fort Worth (+21 % ), Austin, (+20%), Laredo (+19%), El Paso (+12%), Lubbock and Breckenridge (each + 11 % ) , and Plainview ( +8%). Twenty-five cities topped last November, led by Childress ( + 37%) ; El Paso ( +28%) ; McAllen ( +22%) ; Lub­bock ( + 17%) ; Denison ( + 16%) ; Abilene and Fort Worth (each +15% ); and Big Spring, Lockhart, and San Angelo (each + 11 % ) . Twelve cities were ahead of January-November 1953, mostly by 1 % to 3%. EI Paso (+ 15% ) outdistanced all others. Four cities were behind by 11% to 18%. Of the 36 cities reporting enough retailers of various types to be listed individually, 19 topped October and 28 bettered last November, but only 7 were ahead of January-November 1953. The largest gains over October were at Lampasas ( + 24%), Lubbock (+21% ) , Paris 7 pasas (+48%), Jasper (+30%), McAllen (+23%), Temple and Wichita Falls (each +20% ), and Plainview ( +17% ). Fourteen other cities had gains of 8% to 14%. Comparing the January-November periods, sales gains appeared for Greenville (+16%), Jasper (+13%), San Angelo ( +6%), Kirbyville (+5%), McAllen ( +3%), Plainview ( + 2%) , and Dallas ( +17': ). Secondary trade indicators. Advertising linage in 23 Texas newspapers averaged 4% below October but 3% over last November. Of the 23 papers, only three topped October, but 12 bettered last November. Postal receipts for 121 Texas cities topped October by 3% and last No­vember by 18%. Of the 121 cities, 66 were ahead of Oc­tober and 91 above November 1953. A. HAMILTON CHUTE POSTAL RECEIPTS Percent change Nov 1954 Nov 1954 Nov Oct Nov from from City 1954 1954 1953 Oct 1954 Nov 1953 TOTAL• _ $5,308,291 $5,169,422 $4,511,682 3 + 18 + Alice -------------10,241 12,320 9,954 -17 3 + Alpine 3,130 3,518 3,153 -11 1 -·----­ Arlington -----·-16,298 14,558 ll!,021 + 12 + 36 Bastrop ---------1,550 1,431 1,459 + 8 + 6 Bay City ·--··--8,320 9,734 7,741 -15 7 + Belton ---·----5,301 5,338 4,186 -1 + 27 Brady ---------4,074 3,382 3,487 + 20 + 17 Brownfield ··--·-· 7,993 7,720 6,555 + 4 + 22 Cameron ---------7,403 5,890 6,563 + 26 + 13 Cisco --··-··----3,472 2,922 4,058 + 19 -14 Cleburne -··-·--11,446 12,003 11,215 -5 2 + Coleman ····--------5,610 4,862 5,502 + 15 + 2 Crystal City ----2,478 2,364 2,297 + 5 + 8 Cuero -----------4,076 4,013 3,821 2 7 + + El Campo --------8,694 8,092 7,348 + 7 + 18 Gainesville -----------12,856 10,313 9,795 + 25 + 31 Gatesville -------4,132 4,9()1 3,323 -16 + 24 Gilmer --------4,922 4,259 4,297 + 16 + 15 Graham -----------4,995 5,840 4,794 -14 4 + Granbury -----·-1,646 1,270 1,378 + 30 + 19 Grand Prairie ___ 15,993 13,352 15,362 + 20 + 4 Hillsboro 4,696 4,929 -------5,047 -5 -7 Huntsville -------9,053 5,806 6,422 + 56 + 41 Jacksonville ----10,040 9,568 7,895 + 5 + 27 Kenedy 3,127 3,117 3,318 x -6 ------+ 5 Kerrville 8,257 9,579 7,888 -14 Kingsville _______ 10,452 10,849 9,110 -4 + 15 Kirbyville ·-·----1,657 1,852 1,686 -11 2 La Grange ·---3,376 4,499 3,362 -25 x LevelJand ··--·-·---6,251 6,663 6,139 -6 2 + Littlefield ---······-···-6,417 5,586 5,201 + 15 + 23 Luling --·------3,301 2,808 3,107 + 18 + 6 McCamey ------2,616 2,733 2,672 -4 2 Marlin --------------5,773 5,416 5,692 + 7 + 1 Mission ___________ 6,032 6,744 5,972 -11 1 + Pasadena ---------20,278 17,764 18,931 + 14 + 46 Pecos 11,182 18,321 11,104 -39 x Pharr ----------4,530 3,539 3,800 + 28 + 19 Pittsburg ------3,212 2,335 2,392 + 38 + 34 Taft ----------2,401 1,930 1,864 + 24 + 29 TerrelJ -----5,825 5,678 5,667 + 3 + 3 Vernon -----------·-9,781 10,425 10,143 6 -4 Yoakum ······-·-·-11,164 11,028 12,672 + 1 -12 ( + 17% ), Sherman ( + 11 % ) , Plainview ( + 10% ), and •The total includes receipts for cities which are listed individually under Wichita Falls ( + 9%). Best showings over last November "Local Business Conditions." were at Greenville ( + 54%), Lubbock ( + 49%), Lam-xChange is less than one-half of one percent. FINANCE Bank merger in Dallas. The recent merger of the Re­public National Bank and the City National Bank of Dal­las is a financial event of major significance in the rapidly expanding industrial economy of the state. A hardy native industry can flourish only in an environment which pro­vides the capital needed for expansion. That Texas banks and bankers are bending every effort to organize the fi. nancial structure necessary to provide these funds is evi­denced by this action which creates one of the largest banks in the country with a capital structure in excess of $68,000,000. The Guaranty Bank and Trust Company, eventually to become the Republic National, opened its doors in Feb­ruary of 1920, in the middle of the post-World War I business recession. Its initial capital stock was $100,000. In 1920, cotton and cattk were the basis of the state's economy. The present capital stock of $27,000,000 rep· resents an increase which reflects the explosive expansion resulting from aggressive cultivation of all fields of lend­ing. The Republic's efforts in helping to secure an $85,· 000,000 loan for the Lone Star Gas Company and a $110, 000,000 loan for the Lone Star Steel Company' are ample evidence of the scale of operations carried on by leading Texas financial institutions. Reserve requirements. The chairman of the board of directors of the Bank of Manhattan Company has called for a reduction of the reserves which member banks of the Federal Reserve System are required to carry against demand deposits to "approximately 10% of their total deposits." At present the reserves required are the following percentages of net demand deposits : central re· serve city banks, 20%; reserve city banks, 18% ; and country banks, 12%. New York and Chicago are the only central reserve cities. All cities which have Federal Re­serve banks or their branches are designated reserve cities. In addition, certain other cities are designated reserve cities because of the large amounts of deposits due to other banks carried by banks in those cities or because the banks in those cities wish to have the reserve city classification. High reserves reduce the lending power of the reserve city banks and consequently their earnings. INDEXES OF WHOLESALE PRICES IN THE UNITED STATES (1947-49 = 100) Source: Bureau of Labor Statistics, U.S. Department of Labor 1954* Nov Dec Index Dec 14 Dec 7 1954 1953 ALL COMMODITIES... -.. ­ 109.4 109.4 109.8 110.1 Farm products ····-········-·······-·· 90.2 90.9 93.1 94.4 Food ------------------------·--------­ 103.4 103.4 103.8 104.3 All others ------------------------.----­ 114.7 114.7 114.6 114.6 *Estimates of the index for the week ending on date given. Historically, the reason for the classification of certain cities as central reserve or reserve cities was based on the role of these communities as financial centers whose banks carried an unusually large volume of interbank demand deposits. The banks in these financial centers acted to an appreciable extent as banker's banks. In a time of financial crisis, they might be subject to unusually large with­drawals and must accordingly carry larger reserves in order to meet these demands. Subsequently, the Federal CHANGES IN CONDITION OF WEEKLY-REPORTING MEMBER BANKS IN THE DALLAS DISTRICT Source: Board of Governors of the Federal Reserve System Percent change* Nov 1954 Nov 1954 Nov 1953 from from from Item Oct 1954 Nov 1953 Oct 1953 ASSETS Loans and investments -------------+ 2 + 11 + 4 Loans -----------------------------··---+ 6 + 12 + 2 Total U.S. Government securities -3 + IO + 8 Treasury bills --····------------·-----24 -16 + 20 Treasury certificates of indebtedness ·--··----·--····--···--10 -52 + 6 Treasury notes -··------------······-··-5 + 27 Bonds ------------------·--···--------+ 3 + 86 + 9 Other securities -···-·---·--···-··-x + 17 + 3 Reserve with Federal Reserve Banks ---·-········----···----····· 1 + 8 -5 Cash in vaults --·--·-·--······· 0 4 Balances with domestic banks...... + 5 1 + 1 LIABILITIES Total deposits (except interbank) + s + 10 + 2 Demand deposits (adjusted) ·-· + 2 + 6 1 Time deposits -·---1 + 18 + 2 U.S. Government deposits.. ·-··· + 40 + 55 + 88 Interbank deposits ·----·-··--··---···· 2 + 7 + 6 Domestic banks ·-··--·-------·----3 + 7 + 6 Foreign banks ---····----------·-· + 7 + 25 -8 CAPITAL ACCOUNTS -······ x + 11 + 1 *Percentage changes are based on the Wednesday nearest the end of the month. xChange is less than one-half of one percent. Reserve System has used its discretionary authority to change bank reserves within legally prescribed limits as a means of credit control. It is to the use of this latter authority that there is objection. The reason offered is that the Federal Reserve has the means of controlling credit expansion through varying the discount rate and open market operations without need to resort to changes in reserve requirements. The discount rate and open market operations have proved to be ineffective as means of restraining credit expansion during some recent periods. It is unlikely, therefore, that the Federal Reserve would wish to re· linquish reserve changes as a control device. Howe~er, there are strong arguments which can be advanced agamst the practice of requiring higher reserves in certain cities. The historical reasons for this practice do not have the force that they once had. And it may be that in the future the practice of maintaining reserve differentials will cease. Eleventh District hanking. November loans of weekly reporting member banks in the Eleventh District increased 6% over October. This is three times as large as the 2% October-to-November increase for last year. This rise takes on added significance when we reflect t?at it is a 12% increase over the amount of loans outstandmg in November 1953. Holdings of U.S. government se· curities declined 3% in the month to November because of declines in bank portfolios of short-term Treasury obi!· gations. Total deposits increased 3% over October ~n­marily because of increases in U.S. government deposits. State revenue receipts. State tax and other inco~e for the current fiscal year is down slightly from the hke period of 1953-54. This decline is due primarily to a re· duction in receipts from crude oil production taxes. FRANCIS B. MAY INDUSTRIAL PRODUCTION Independents move against imports. The Bureau of Mines forecast of market demand for domestic crude petroleum during December anticipates a daily average demand of 6.5 million barrels. Demand for Texas crude is estimated at 2.74 million barrels. Advance estimates from importing companies indicate that imports of crude will average 650,000 barrels daily in December. ELECTRIC POWER CONSUMPTION P ercent change Nov 1954 Nov 1954 Nov Oct Nov from from Use 1954* 1954* 1954 Oct 1954 Nov 1953 Consumption (thous of kw-hrs) TOTAL 2,291,427 2,596,079 2,151,489 -12 + 7 Commercial ·······-···-339,006 425,352 306,098 -20 + 11 Industrial -----···--------1,477,097 1,530,670 1,401,315 -3 + 5 Residential -----------363,057 500,768 345,320 -27 5 + Other --------------112,267 139,289 98,756 -19 + 14 •Preliminary-based on report of nine electric power companies, leveled to Federal Power Commission estimates by the Bureau of Business Research. Texas producers, particularly the independents, have long been concerned over the increasingly high level of crude imports, and in mid-December important groups of independent producers formulated plans for joint action to combat what they consider to be a major threat to the viability of the domestic industry. Representatives of the Independent Petroleum Association of America, Texas Independent Producers and Royalty Owners Association, North Texas Oil and Gas Association, West Central Texas Oil and Gas Association, East Texas Oil Association, and Panhandle Producers and Royalty Owners Association met in Fort Worth on December 13 and considered joint action on several points. It is probable that the general committee which was formed at the meeting will seek legislative means for restricting imports, although there is some debate as to how this should be accomplished. TIPRO does not favor establishing import quotas but prefers the institution of some type of equalization tax on imported crude. Possibly this approach will be revised early next year at the annual meeting of TIPRO. Offshore activity increasing. During October and November sales of underwater leases on the continental shelf off the Louisiana and Texas coasts by the Federal Bureau of Land Management have amounted to $140 mil­lion. Meanwhile drilling activity is increasing offshore, with approximately 304 oil wells producing from state tidelands and the outer continental shelf and 21 rigs operating on the continental shelf alone. Estimates of oil and gas reserves are still very speculative, but most cur­rent reports indicate that recoverable oil reserves from the Louisiana-Texas continental shelf may amount to 12 bil­lion barrels; gas reserves may approximate 68.5 trillion cubic feet. In addition, it is anticipated that reserves of elemental sulfur may be augmented by underwater dis­coveries by as much as 120 million long tons. Rubber-plant decision nears. December 27 is the deadline on negotiations for the sale of the government-owned synthetic rubber plants. At present it is uncertain whether the efforts to turn over the synthetic industry to private enterprise will be successful. Sales must involve properties producing at least 500,000 long tons of GR-S rubber and 43,000 tons of butyl rubber, they must be appr?ved by the Attorney General, and they must pass scrutiny in Congress within 60 days after January 27. Failure to meet the requirements as to disposed capacity, or to satisfy the antitrust requirements, or to negotiate purchase prices acceptable to Congress may prevent the proposed changes in ownership. In that event, it is probable that the Rubber Act of 1948, which provided for government operation of rubber plant facilities, will be continued for a long period of time. Synthetic rubber pro­duction is vital to the economy, and the necessity for main­taining strong development, research, and expansion pro­grams will be important under either priYate or public ownership. Industrial briefs. During the latter part of November and the first weeks of December, Chance Vought Air­craft (located at Grand Prairie near Dallas) was forced to lay off 500 employees, following cancellation of a $70 million Navy contract. The reason for this cancellation, involving 96 A2U-I planes (twin-jet attack version of the Cutlass) was the unavailability of suitable jet engines. Further layoffs early next year are probable; however, Chance Vought had a backlog of almost $250 million in unfilled orders on September 30, and the contract cancel­lation was partly offset by a new $45 million Navy con­tract for development of a day fighter. PETROLEUM AND GAS ACTIVITY Source: State Comptroller of Public Accounts and Oil and Gas Division, Railroad Commission of Texas Percent change Product Nov 1954 Oct 1954 Nov 1953 Nov 1954 Nov 1954 from from Oct 1954 Nov 1953 CRUDE' OIL Value (thous of dols) __ 225,687 207,907 234,719 + 9 4 Production (thous of bbls) ··-···-··-···--·· 79,600 73,366 83,055 + 8 Runs to stills (thous of bbls) ······-----··· 58,119 60,268 56,168 4 + a NATURAL AND CASINGHEAD GAS PRODUCED (value in thous of dols) _ 36,386 34,965 33,414 + 4 + 9 SULFUR RECOVERED (long tons) ··-··-­ 142 736 - 81 Ground breaking for the new Santa Fe line into Dallas from Sanger in Denton County was begun on December 11. Construction of the new line is significant in several respects. It is the largest trunk line construction project by a major railroad company in many years; when com­pleted, it will provide Dallas with its first through ser­vice to Chicago; and access to the line will broaden the industrial opportunities of the rapidly developing indus­trial area north and west of Dallas, and particularly in Denton, which actively sought to have the new trackage routed through the city. ALFRED G. DALE LABOR Texas employment shows gain. Texas is the only on~ of four southwestern states to show an employment gam over last year. The Bureau of Labor Statistics re­ported that firms in the Southwest listed 3,800,000 workers on their payrolls during the fall. This was a drop of some 20,000 workers below last year's total. Texas em­ployment, on the other hand, was 13,700 above last year's total. The addition of some 10,000 workers in trade indus­tries accounted for a large part of the gain in Texas. A climax to the Texas employment uptrend was looked for in December, although sizeable reductions were fore­cast by the Texas Employment Commission for most areas in the state during January and February. Seasonal re­ductio~s, particularly in retail trade employment, will occur m January, followed by additional reductions in February after the "after Christmas" sales. Bad weather conditions may also reduce employment among construc­tion workers. The largest number of nonfarm workers ever employed in T:avis County (63,165) was recorded December 1 by Austm TEC officials. Employment in Travis County has in­creased steadily since April, and the number of unem­ployed has also decreased continuously since July. Heavy layoff expected. Dallas' employment level also headed for a new record in December, but cutbacks were expected during the early part of the new year. TEC re­ports from employers indicate that December nonfarm employment in Dallas will reach a total of 315 000 an increase of about 2,500 workers above last De~ember's total. But, the possibility of a heavy layoff of workers at HOURS AND Chance Vought Aircraft darkened the employment picture. (See "Industrial Production.") F. 0. Detweiler, president of the firm, announced in mid-December that a recent cancellation of a $70,000,000 Navy contract for one type of fighter airplane built at the Dallas plant could result in the systematic layoff of 6,500 employees by early 1956. Detweiler emphasized that the layoff of such a large num­ber would come only if the plant could not get new con­tracts. At present, the company has 14,500 employees and is the largest employer in Dallas County. Workers are now being released at the rate of 500 per month. Court reverses opinion. The Texas Supreme Court changed its opinion in mid-December concerning an El Paso labor-trucking company case. The court in its original opinion handed down June 30 held that only federal courts had jurisdiction in the case, but in its reversed de­cision the .Texas court held that jurisdiction belonged to state courts. Both opinions dissolved an injunction that had been granted by the lower courts against the Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 914 of El Paso and six motor freight companies. In another labor-management dispute, the National Labor Relations Board dismissed charges of unfair labor practices against the CIO Industrial Union, Local 1814, of Port Arthur. The board's general counsel authorized dis­missal of the charges, because it was ruled that the union's picketing was not a violation of the ,Taft-Hartley law. The four store chains which filed charges claimed that con­tinued picketing by the union after present employees voted against unionization was coercive and thus in viola­tion of the Taft-Hartley law. The union however terms the present employees "strike-breakers."' ' EARNINGS Source: Texas Employment Commission In cooper..t1on with the Bureau of Labor Statistics, U.S. Department of Labor ANNE K. SCHULER Average weekly earnings Average weekly hours Average hourly earnings Nov Oct Nov Nov Oct Nov Nov Oct Nov Industry 1954* 1954 1953 1954* 1954 1953 1954* 1954 1953 ALL MANUFACTURING_______ ___________ $72.21 $72.04 $71.40 41.5 41.4 42.0 $1.74 $1.74 $1.70 Durable goods_______________________________________________ 73-08 72.24 71.06 42.0 42.0 42-3 1.73 1.72 1.68 Primary metals_____________________________________ 80.79 83 .83 77.22 39.8 41.5 39.4 2.03 2_02 1.96 Machinery-except electricaL--------------· Oil field machinery________________________________ 74.93 78.20 76.08 78.59 75.96 82.88 41.4 39.9 41.8 40.3 42.2 42_5 1.81 1.96 1.82 1.95 1.80 1.95 Transportation equipment_______ ____________ 85_60 83.10 84.66 40.0 39.2 41.5 2-14 2.12 2.04 Fabricated metal product•------------­--------· Lumber and wood products .__________________ 73.65 53.45 72.38 52.90 71.97 50.74 44_1 45.3 43.6 45.6 44_7 44.9 1.67 1.18 1.66 1.16 1.61 1.13 Furniture and fixtures ________ __ _________________ 56.89 57.20 54.86 44.1 44.0 43.2 1.29 1.30 1.27 Stone, clay, and glass------------------------------­ 67.05 67-18 64.08 44.7 44.2 43.3 1.50 1.52 1.48 Nondurable goods ------------------------------­-----­ 71.75 71.58 71.72 41.0 40.9 41.7 1.75 1.75 1.72 Textile mill products ---------·----------------------· 47_95 48.05 44.93 43.2 42.9 41.6 1.11 1.12 1.08 Broad woven goods ·------------------------..----­ 49.49 49_28 45.36 43 -8 44.0 42.0 1.13 1.12 1.08 Apparel and fabric products-----------------· 36.26 36.57 35.77 37.0 37.7 36.5 0.98 0.97 0.98 Food.-----------·------------------------------------------------· 65 -60 66.25 66.90 42.6 42.2 44.6 1.54 1.57 1.50 Meat packing ·--------------------------------------­Paper and allied products______________________ 77.99 78.62 76.89 76.97 86.00 74.16 40.2 43_2 40.9 43.0 43.0 41.9 1.94 1.82 1.88 1.79 2.00 1.77 Printing____________________·..-----------------------­ 80.14 82.89 82.29 37.8 38.2 39.0 2.12 2.17 2.11 Chemicals and allied products------­--------· Vegetable oil mills____________________________, 84-67 52.40 83.33 51.90 83.47 53_00 43.2 52.4 43.4 53_5 43.7 53.0 1.96 1.00 1.92 0.97 1.91 1.00 Petroleum and coal products__________________ Leather_____________________ _____________________________ 94.64 42.64 94.33 42_54 95.82 49.93 40.1 41.4 39.8 40.9 40.6 47.l 2.36 1.03 2.37 1.04 2-36 1.06 NONMANUFACTURING Mining___·--­----------·.------------­--------------------­-Crude petroleum products______ _________________ Sulfur__________________________________________________ Public utilities _______________________________________________ Retail trade__ _____________________________________,_____ 93.72 95.26 80_58 70_30 56.72 93 .93 95.26 80_59 68.17 57.07 97_39 100.13 82.40 67.60 55.30 44.0 44.1 39.5 40.4 43.3 44.1 44.1 39.7 40_1 43.9 44.7 44.9 41.2 40.0 43.2 2_13 2.16 2_04 1.74 1.31 2.13 2.16 2.03 1.70 1.30 2.19 2.23 2.00 1.69 1.28 Wholesale trade___________________ ________ __________________ 72.11 71.38 71.56 43.7 43 .0 43 .9 1.65 1.66 1.63 Figures do not cover proprietors. firm memben. or other principal executives. •Preliminary-subject to revision upon receipt of ._dditional reports. Agricultural Chemicals 1n Texas One-quarter of all farm production can be attributed to the use of fertilizers. And fungicides, insecticides, and herbicides have increased agricultural yields and stream­lined harvesting. Texas farming, and farming in most parts of the nation, is becoming a chemical industry·. Before the surprised and skeptical eyes of old-time dirt farmers, a new generation of agricultural specialists are feeding and treating t~eir crops with a variety of chemical products and reapmg their rewards in the form of record harvests. Since the 1930's, cotton farmers have raised their aver­age yield per acre about 60%. Cattle raisers today produce about 30% more beef and veal than in the 1920's from the same size herd, and rice farmers average about 10% more rice per acre now than in the 1920's. Nationally, the use of fertilizers during the last 15 years has tripled to 25 million tons, and consumption of all other agricultural chemicals has jumped tenfold. During the same years, crop yields per acre rose 28%, and animal yields 13%. Com­mercial fertilizers now account for an estimated 20% to 30'/v of our total farm production. With the continuing demand for high quality foodstuffs to support a high stand­ard of living, agricultural chemicals properly used in the future may have to account for at least 50% of our total production of most crops. Farm population has declined 9.5% in the last 20 years, yet agricultural output has risen 45%. And agricultural chemicals have played a big part in this increased-produc­tion story. Yields of wheat and oats in Central and North Texas have been increased as much as 10 bushels and 26 bushels an acre, respectively, by the proper use of fertiliz­ers, according to tests made by the Texas Agricultural Ex­periment Station. The use of fertilizers on small grains in­creases not only grain yields but also the amount of forage available and the winter hardiness of the plants. In the 1952-53 season, the use of 30 pounds of nitrogen and 60 pounds of phosphorus per acre resulted in an average gain of 25.l bushels per acre for oats and 9.1 bushels for wheat on seven farms in North Central Texas. And phos­phorus tripled the yield of winter forage from oats. Less than 25 years ago Texas was a one-crop cotton state; today more than 30 crops are produced on a large commercial scale. And, like the castor bean, many are new crops that have been introduced in the state only in recent years. This termination of the one-crop system and the instigation of diversified farming in ,Texas was brought about by a combination of modern farming practices, bet­ter equipment, and, in recent years, the introduction of many new agricultural chemicals that have greatly en­riched vast areas of Texas soil. A single chemist employing the advanced techniques of science provides the Texas farmer with the equivalent of a whole township of workers, at a cost of a few cents. His technology makes available chemicals that not only' en­rich soil and crops hut which also strike back at insects and pests that plague the land and its produce. Agricultural chemicals limit the crippling effects of animal and plant disease, and attack and kill harmful weeds. The technological expert may be a soil scientist, bacteri­ologist, entomologist, plant physiologist, or pathologist. Whatever their specific fields, the army of agricultural scientists employed by the chemical industry examine soil, raise cultures of bacteria, conduct intensive studies of the nature of insects that attack crops, study cell structure and growth of plants and the course of diseases that affect plants. In their research, the scientists work in close co­operation with government agencies, experiment stations, and universities. In all, the scientist, the chemical indus­try, and the Texas farmer work hand-in-hand to provide more and better crops for consumption and use by Texans and by the nation. Chemicals alone, without crop rotation; flood control; modern equipment; and good planting, growing, and harvesting weather, cannot guarantee bigger and better crops. Still, the use of agricultural chemicals has had sweeping effect, both in prevention of losses caused by insects and disease and in savings made through more economical use of soil. Dr. C. F. Bishop, coordinator for the Federal-State Pink Bollworm Research Center at Brownsville, says that total chemical control of crop dis­eases alone in the United States would save $2.8 billion annually, or about 7% of potential production of all farm and forest products. He says that such control, by keeping land from being denuded, would also help prevent erosion. But, despite the giant strides made in farming through the use of agricultural chemicals, the battle is by no means won; in fact it has scarcely begun. Farmers spend more than $300 million annually for pest control materials. But regardless of all man's effort, he has not eradicated one single insect species from the earth. The Department of Agriculture estimates that by the end of 1948 some 686,000 different species of insects had been described and named in the entire world. Of these, 82,000 insect species -2,600 different ticks and mites alone-flourish in the United States. Probably 10,000 of them are important enough to be called public enemies. While no species of insect has disappeared from the earth because of man's activities entomologists believe some insects can be eradi­cated, although they think it highly improbable that any will be. The boll weevil, for example, which has caused millions of dollars of damage to cotton every year, could be eradicated quickly by establishing a series of zones across the cotton states in which no cotton could be grown for a while. However, entomologists believe farm adjust­ments and loss of income for even a year to ginners, oil millers, and others would keep any state from adopting the necessary legislation. In the meantime, ravenous insects continue to dine off the farm lands of America with an insatiable appetite. In a recent year, insects ate their way through $4 billion worth of crops. Mortality rates among plants stricken by disease are such that the United States lost $3 billion in foodstuffs one year. Without chemical help, there is no estimating what the loss might have been. Weeds, too, took their toll by robbing plants of vital nutrients to an extent of $5 billion worth of U.S. crops. In ,Texas, the use of agricultural chemicals is expanding. Agri-Chem of Texas, manufacturers of agricultural chemi­cals in San Antonio, reports that sales of soluble fertilizers have increased about 50% last year. While larger-acreage farmers use more fertilizer in proportion to the acreage cultivated, smaller farmers are finding that it pays them to use fertilizers too, the firm reports. The San]acinto Chemi­cal Company of Houston recently completed a 50% ex­pansion of its plant to produce greater quantities of an­hydrous ammonia, used in the manufacture of dry fertili­zers and as a chemical applied directly to the soil. T. L. Cubbage, vice president and general manager of Phillips Chemical Company at Bartlesville, Oklahoma, says that 112,000 tons of agricultural chemicals have been shipped by the firm to Texas since last July. The firm also has completed a large expansion program in Texas where it doubled production of anhydrous ammonia by com­pleting a new plant at Adams Terminal on the Houston Ship Channel. Production began December 31, 1953. Fur­ther expansion took place in the first quarter of 1954 with the manufacture of triple superphosphate from a new unit capable of producing 405 tons of this product per day. Late in 1953 Phillips added 50% to its production of nitric acid at its Etter plant. INDEXES OF PRICES RECEIVED BY FARMERS (1909-1914 = 100) Source: Bureau of Agricultural Economics, U. S. Department of Agriculture Percent change Nov 1954 Nov 1954 Nov Oct Nov from from Index 1954 1954 1953 Oct 1954 Nov 1953 ALL FARM PRODUCTS ·-----­ 259 264 260 2 x ALL CROPS ---------------­ 253 259 242 2 + 5 Food grains -------------­ 230 232 239 - 4 F eed grain and hay --------­ 192 187 183 + 3 + 5 Potatoes and sweet potatoes...... 215 247 147 - 13 + 46 Fruit --------------------------------­ 115 164 160 - 30 -28 Truck crops -----------------------------­ 304 272 287 - 12 + 6 Cotton -------------------------­ 260 269 246 3 + 6 Oil-bearing crops ---------------­ 283 286 255 + 11 LIVESTOCK AND PRODUCTS --------·-·----­ 267 272 283 + 2 6 Meat animals --------------------·--­ 273 283 260 4 + 5 Dairy products --------------------------­ 257 252 282 + 2 9 Poultry and eggs --------------------­ 220 222 304 1 -28 Wool ---------------------------­ 242 348 379 2 -10 xChange is less than one-half of one percent. ,The Dow Chemical Company, a major producer of a wide variety of agricultural chemicals, reported that sales for such chemicals in 1953 amounted to 6% of the com­pany's total $430 million sales. Texas customers bought methyl bromide, a fumigant used to a great extent for con­trol of leaf-cutting ants, in such large quantities that sales increased 600% from 1940 to 1946, and 300% from 1946 to 1953. Sales of phenothiazine, a material to control in­ternal animal parasites, increased 45% from 194.0 to 1953. Weed killers that came on the market shortly after 1946 also. attained substantial volume in Texas during 1953. Agricultural grade ammonia for direct application to the soil as a fertilizer was sold in Texas in 1953 in the multimillion pound range. FARM CASH INCOME January-November Percent Commodity 1954 1953 change Value (thousands of dollars) TOTAL 1,604,932 1,666,490 -4 Cotton ________ ------------------­ 584,086 490,966 + 19 Cottonseed --------------------­ 90,460 87,867 + 8 Wheat ------------------------------­ 46,S62 43,115 + 9 Oats -------------------------------­ 12,018 10,984 + 9 Corn ----------------------------­ 16,271 15,494 + 5 Grain sorghum -----------­ 37,319 61,834 -40 Flaxseed ---------------------------­ 3,225 3,070 + 5 P eanuts ----------------------------­ 9,569 13,618 -30 Rice -------------------------------­ 74,666 82,472 - 9 Cattle ------------------------------­ 252,019 281, 782 -11 Calves ------------------------------­ 84,436 108,871 -22 Hogs --------------------------­Sheep and lambs -------------­ 56,841 24,368 70,374 21,100 -19 +15 Wool --------------------------------­ 21,978 23,782 - 8 Mohair -----------------------------­ 9,610 10,576 - 9 Poultry -----------------------------­ 57,477 68,266 -16 Eggs --------------------------------­ 63,898 81,305 -21 Milk and milk products.­ 110,056 134,348 -18 Fruit and vegetables________ 49,773 56,666 -12 Farm cash income as computed by the Bureau understates actual farm cash income by from 6% to 10%. This situation results from the fact that means of securing complete local marketings, especially by truck, have not yet been fully developed. In addition, means have not yet been devel­ oped for computing cash income from all agricultural specialties of local importance in scattered areas. This situation does not impair the ac­curacy of the index shown on page 20. Chemically treated fence posts, poles, and fencing lum­ber also have gained in popularity among Texas farmers. Henry J .Beck, Jr., president of Houston Chemical Service, Inc., said that from 1947 to 1950 less than 5% of the firm's sales of chemically treated posts, poles, and fencing lum­ber was to farmers and ranchers. During 1953-54, this figure jumped to 50%. The firm manufactures a wood preservative, pentachlorophenol, for Penta treated wood products and for soil sterilization. A chemical distributing firm, Empire Paper Company of Wichita Falls, said that ranchers are showing great interest in the problem of weed and brush control. Man­ager Pete Estes, Jr., predicted that weed-spraying in pas­tures will become increasingly important to ranchers in the near future because the greater forage production re­sulting from the use of chemicals more than offsets cost of spraying. Substantiating this prediction, a new business, unique in the United States, has been started by W. H. Glimp, former ranchman near Allamore in Menard county. Glimp is operating the first commercial business for the chemical eradication of noxious plant life on the range. The small industry began operations in 1953. Chemicals were use ------------------------------·------------------· 291 277 329 305 Business failures {number> ----------------------------·-----·-----·-------·--------·--··--·---·---·---·······-23 12 19 21 15 tlndex of ordinary life insurance sales, adjusted for price changes (4.2) . ____ __ _ 186* 176 174 169 164 Index of ordinary life insurance sales 208 197 200 193 188 Index of ordinary life insurance sales in the West South Central states --·---··­202 198 206 191 179 Index of ordinary life insurance sales in the United States.... -------·-----·----·---·---179 171 177 169 160 TRADE tlndex of total retail sales, adjusted for price changes {46.8) _ --·-··---------·----·-··· 140 137 138 136 141 Index of total retail sales -···-·····-··-------------···-----········-·-·-·---·--------·-·---------····--· 156 153 154 152 158 Durable-goods stores ---·-----------·--------····--·--·-·---------------171 156 160 162 165 Nondurable-goods stores................................. ------·· ··-·----------··-148 152 151 147 154 Ratio of credit sales to net sales in department and apparel stores..... 67.1 63.2 64.9 64.1 63.2 Ratio of collections to outstandings in department and apparel stores.. 38.2 38.3 35.4 39.1 39.1 PRODUCTION tlndex of industrial electric power consumption (14.6) .. 243• 241* 255* 240 218 tlndex of crude runs to stills (3.9) _____ _ 127 125 124 127 128 Index of wheat grindings________________________ _ 66 58 59 64 Index of dairy products manufactured_______ ---··-··-·--·-··-------···--56 54 80 79 Index of cottonseed crushed_______________________________ _ 114 131 207 127 Index of southern pine production, unadjusted, 1935-39=100 112 112 117 124 tlndex of building, adjusted for price changes (9.4) 157* 165* 161* 133 Ill Index of building authorized.............. -----·---------------------·-·-209• 220• 215• 176 140 tlndex of crude petroleum production (8.1) ........ . 120 113 116 120 124 Index of gasoline consumption_______________________________ -------·-··-·----·---123 126 129 179 Index of industrial production in the United States..... . 129 126 124 125 134 tlndex of total electric power consumption (3.0) .... 245* 253* 264* 239 214 Index of cement consumption ----·-··-····--·-----------------··--·· 142 175 152 130 Construction contracts awarded (thousands) ···-·-· $111,124 $128,538 $151,535 $108,039 $ 98,397 AGRICULTURE Index of prices received by farmers, unadjusted, 1909-14=100_______________________ _ 259 264 262 266 273 Index of prices paid by farmers in the United States, parity index-unad­ justed, 1910-14=100_____________________________ ----------------···-···---· ---------··----·······------279 279 280 281 279 Parity ratio___________ ·····---····---····---------------------····-·---·--------------·-···--------------·-·---------·-·---93 95 94 95 98 lndex of farm cash income, unadjusted ------·------··· ···--···--------------··-_______ _ 129 160 106 93 99 Index of prices received by farmers-livestock, unadjusted, 1909-14=100.... 267 272 267 285 298 Index of prices received by farmers-all crops, unadjusted, 1909-14=100.. 253 259 258 251 254 FINANCE Loans, reporting member banks in the Dallas district {millions) $ 2,093 $ 1,970 $ 1,920 $ 1,932 $ 1,793 Loans and investments, reporting member banks in the Dallas district {millions) ·-----------·--------------······--········-·---·--------·------··-------------·····-·-·---------···------$ 3,762 $ 3,681 $ 3,566 $ 3,463 $ 3,178 Demand deposits adjusted, reporting member banks in the Dallas district {millions) ----------·······-··-··-··--·--·-----------------··--·---·-----$ 2,665 $ 2,620 $ 2,587 $ 2,534 $ 2,481 Bank debits in 20 cities {millions).______________ _ $ 5,962 $ 5,966 $ 5,718 $ 5,715 $ 5,570 Revenue receipts of the State Comptroller {thousands) _ $ 67,735 $ 57,762 $ 56,251 $ 63,023 $ 65,583 Federal Internal 13.evenue Collections {thousands) $100,490 $135,479 $195,776 $183,283 LABOR Total nonagricultural employment {thousands) 2,270.8* 2,260.7 2,261.4 2,236.8 2,242.0 Total manufacturing employment {thousands) 427.5* 428.0 428.0 425.5 437.8 Durable-goods employment (thousands)_--------------·-········-···-----·--------­200.4* 201.4 202.2 200.1 209.l Nondurable-goods employment (thousands ) 277.1 * 226.6 225.8 225.4 228.2 All figures are for Texas unless otherwise indicated. All indexes are based on the average months for 1947-49, except where indicated and are adjusted for seasonal variation, except annual indexes. Manufacturing employment estimates have been adjusted for first quarter 1953 benchmarks. *Preliminary. tThe index of business activity is a weighted average of the indexes indicated by a dagger (t). The weight given each index in computing the composite is given in parentheses. llndex computed for February, May, August, and November only.