TEXAS BUSINESS REVIEW A Monthly Summary of Business and Economic Conditions in Texas BUREAU OF BUSINESS RESEARCH THE UNIVERSITY OF TEXAS VOL. XXXIII, NO. 5 TWENTY CENTS A COPY-TWO DOLLARS A YEAR ~1AY 1959 The Economy of Laredo The Business Situation in Texas By FRANCIS B. MAY Over-all business activity in the state in March was at a level of 202% of the 1947-49 average rate, after adjusting the data for seasonal variation. At this level the Index of Texas Business Activity was 6% below the all-time record established in February. It was 10% above the March 1958 value. The average value of the index for the first quarter was 209, compared with 193 for the first quarter of 1958-or an increase of 8% over last year. It is apparent that, al­though the course is an irregular one, the general direc­tion of movement of Texas business activity is strongly up· ward from the depression lows. With economic activity in the United States in a vigorous recovery, the direction of movement should be upward for the next year at least. Rail traffic in March was up substantially over February, after seasonal adjusunent. The 15% gain in March placed the index 12% above the March 1958 level. Rail shipments are following the upward course of the business cycle. How­ever, the index at 85 is still 15% below the 1947-49 aver· age volume of shipments. Lower freight rates are needed before the railroads can regain their former status in the transportation field. Lower freight rates can result only from a revision of the basic cost structure of the industry. Such a revision seems unlikely in such a highly regulated industry. Ours is a high-cost industrial organization, by and large. Rail rates are one reflection of this fact. Crude petroleum production in March rose 1 % above February, after adjusunent for seasonal variation. At 123% of the 1947-49 average the index was 22% above the March 1958 rate. It was 2% below its post-recession high of 125 in January. Heavy imports during the early months of the year, in anticipation of mandatory Federal import quotas, have created an imbalance in inventories that neces­sitates restraint by domestic producers, particularly by Texas, which is the largest producer. The Railroad Com· mission set an 11-day allowable for April, which will fur. ther retard production. The May allowable is 12 days. This will have the effect of increasing daily allowable produc. tion in May by 3% to 3.15 million barrels from 3.07 mil­lion barrels in April. The April allowable was 3% under March, for which a 12-day production pattern was set Demand for crude petroleum this year has not lived up to the forecasts of a 5% increase, at least not as far as Texas is concerned. This is partly due to our traditional role of "balance wheel" to the domestic industry and partly due to the temporary oversupply induced by high imports in January and February. It is still believed that, due to im· port quotas and rapidly rising economic activity in the country as a whole, there will be a 4% to 5% pickup in demand later this year. Crude oil runs to stills in Texas in March were down 5% from April as a result of cutbacks induced by fear of a glut of refined products. Much of the oil imported prior to the imposition of import quotas was in the form of re· finery products. There have been additional cuts in refinery runs in April. This is despite the fact that the current basis for determining import quotas (refinery runs) emphasizes the desirability of high-level operations for individual refiners. With inland as well as coastal refiners eligible for quotas, Texas Business Activity Index • Adjusted for seasonal variation • 1947-1949=100 1946 '47 '48 '49 '53 '54 '55 '56 ·57 '58 '59 Cr.de Pttroln• ProdtctlOI 11 Tuas Index • Adjusted for seosonol variation • 1947-1949·100 it will place an added strain on the industry by providing an institutional environment that favors the refiner who lets his competitors cut back their runs while maintaining operations at full capacity in his own plant, thereby im· proving his prospects of an increased import quota when the next allocations are made. It places the individual re· finer in the position of trying to compute his probable losses due to weak product prices balanced against his probable gains from an increased import quota. The result will discourage industrial statesmanship. Total electric power consumption in March dropped 4% below February, after adjustment for seasonal vari· ation. The decline was caused by a 7% decrease in indus­trial power consumption, which makes up a large part of the total. Both total and indu!?trial power use in March were 10% above the March 1958 rate of consumption. Total power consumption for the first quarter of this year averaged 7.7% above the comparable 1958 period. Reports from the Edison Electric Institute show improved power usage during the first half of April. Ordinary life insurance sales declined 2% in March, on a seasonally adjusted basis. They dropped 1% in February. This result stems from the upsurge of consumer buying of appliances and other durables and the decline in savings as a result of renewed optimism over the business outlook. A smaller portion of family income is being set aside for future needs. People save less at the beginning of a cyclical upswing than they do when the economic outlook is un­certain. Reports from Wall Street indicate that part of this money not spent on insurance is going into speculation. Total retail sales in Texas rose 2% in March, after seasonal adjustment. Sales of durable goods were responsi­ble for the rise, increasing 4% on a seasonally adjusted basis. Durable goods sales in March were 24% above March of 1958, led by motor vehicle sales. The comeback of automobile sales from the depressed levels of a year ago is one of the bright spots of the business revival. Auto­motive sales are highly correlated with personal income and activity in the stock market. High income and large un­realized (or realized) capital gains from stock speculation make for large motorcar sales, as past experience shows. U. S. personal income in March rose to another new an­nual high of $368.6 billion, showing the largest month-to­month increase since mid-1955. As for the stock market, the Dow-Jones industrial average reached a new high of 624.06 on April 17. It may carry the first cargo of jubilant speculators into deep space months before the scientists send up their first manned space probe. After a tremendous upsurge of 16% in December of 1958, the index of retail sales of nondurable goods has been on a plateau, showing no month-to-month change in MAY 1959 March after seasonal factors are taken into account. Not even an early Easter could shake the index from its path. Though the March index was unchanged from February, it showed a 3% gain over March of 1958. It is apparent that consumers have altered their budgets to emphasize durable goods and have reduced their relative rate of expenditure on nondurables. Nationally, total retail sales increased from Sl7.6 bil­lion, seasonally adjusted, in February to Sl7.7 billion in March, an increase of 0.6% . Adjusted durable goods sales increased to $5.9 billion, slightly more than the February total of just under $5.9 billion. Nondurable goods sales rose almost $100 million to $11.8 billion, an increase of approximately 0.8% from February, on a seasonally ad­justed basis. SELECTED BAROMETERS OF TEXAS BUSINESS Percent change Index Ma r 1959 Feb 1959 Mar 195 Mar 1959 from F eb 1959 Mar 1959 from Mar 1958 Texas Business Activity ·-······-· 202 215 1 3 - 6 + 10 Miscellaneous frei ght carloadings in S.W. district 85 74 76 + 15 + 12 Crude petroleum production _ _ 123• 122° 101 + 1 + 22 Crude oil runs to stills ·······-···· 145 152 132 5 + 10 T otal electric power consumption -------------­-------------­ 340° 354° 309 4 + 10 Indust r ial electric power consum ption ---­------------·-····----­ 347° 375° 316 7 + 10 Ba nk debits ···················-·-···-····· 241 257 219 6 + 10 Ordinary life insurance sales 394 401 330 2 + 19 Total r etail sales ·······-······­····-·· 203° 199r + 2 + 9 Durable-goods sales ---- ------­--166° Nondurable-goods sales --­---­-222• Urban building permits issued 235° 159 r 22lr 235° 202 + 4. •• •• + 24 + 3 + 16 Residential ------------­------­-······­ 273° 279 210 - 2 + 30 Nonresidential ------------­-------­--­ 187° 179° 196 + 4 - 5 Adjusted for seasonal variation, except annual average and farm cash income~ • Preliminary. r Revised. •• Change is less than one-half of one percent. Total urban building permits issued in March were, after seasonal adjustment, at the same level (235% of the 1947­49 average) as in February. This was 16% above the March 1958 level. The steady state of total permits was the result of offsetting changes in the rate of issuance of resi­dential and nonresidential permits. Residential permits declined 2% below February. At 273% of the 1947-49 average of permits issued, the index was 30% above March of 1958. Nonresidential permits rose 4% above February to 187% of the base-period average. This was 5% below the March 1958 level. In February residential permits declined 9%. The March drop represents a slowing in the rate of decline. Since the housing boom is proceeding unabated at the national level, it is highly probable that residential permits in Texas will turn upward and follow the course of nonresidential permits. A glance at the column of year-to-year comparisons shows only one negative change. It is obvious that re­cession levels of activity have been exceeded by substan­tial margins. There is every reason to believe that the general recovery that is now underway will last for an­other two years. The pattern of the business cycle since World War II has been one of roughly a year of decline followed by 35 to 45 months of expansion. There is no law of economics that says that this pattern will inevitably repeat itself, but at present there is no factor in sight that is likely to mar seriously the present expansive phase of the cycle. This is the time of the year when stockholders meetings are held and corporation presidents discuss the prospects for the current year. Optimistic forecasts are being served with the fried chicken and tuna salad both in the state and in the nation. The president of Texas Instruments, Inc., manufacturers of transistors, electronic devices, and geophysical explora­tion equipment, reports that sales and earnings for the first quarter of 1959 were the highest in the company's history. Sales of $30.0 million for the quarter were substantially above the $20.5 million recorded for the first quarter of 1958. Shipments of Lone Star Steel Company for the first quarter were about 150% greater than for the same period of 1958. The president of the company expects 1959 to be a good year. Reed Roller Bit Company earned a profit in the first quarter and expects business to improve during the year. The company lost money in 1958. Houston Lighting and Power Company expects a good year in 1959 because of new industrial and residential ex· pansion in its service area. The president of Chance Vought Aircraft, Inc., expects that 1959 sales will be second only to the record volume attained in 1958. Despite various problems, the oil industry does not ex­ pect 1959 to be a bad year. If demand comes up to expec­ tations and prices remain firm, this will be a good year for nearly all companies. These are large "ifs," but the industry has a record of surmounting difficulties. REVENUE RECEIPTS OF THE STATE COMPTROLLER Source: State Comptroller of Public Accounta September 1-March 31 Percent Account 1958-59 1957-58 change TOTAL -------------------------$605.834 ,210 $549.209.492 + 10 Ad valorem, inheritance, and poll taxes ------------------------------------------38,339,132 39,752,672 -4 Natural and casinghead gas production taxes ------------------------------27,288,400 24,854,679 + 10 Crude oil production taxes ----------------80,074,562 81,550,210 -2 Other gross receipts and production taxes ------------------------------11,198,811 11,242,044 •• Insurance com panies and other occupation taxes ------------------------------14,725,509 2,562,314 + 475 Motor fuel taxes (net) ---------------------· 100,865,441 96,301,968 + 5 Cigarette tax and licenses ----------------28,988,297 26,899,068 + 8 Alcoholic beverage taxes and licenses ---------------------·----------------18,820,877 18,500,896 + 2 Automobile a nd other sales taxes ---· 11,757,972 12,794,418 8 Licenses and fees ------------·--·-----------···--23,050,866 20,408,862 + 13 Franchise taxes ---·-----·-----------·--·-·---------6,576,436 8,764,744 -25 Mineral leases, land sales, rentals, and bonuses ---------------------­13,529,154 11,107,391 + 21 Oil and gas royalties ---------·----------·-----18,770,723 17,200,431 + 19 Interest earned .................................... 15,492,873 17,139,178 -10 Unclassified receipts --------------------------11,689,480 15,682,503 -25 Other miscellaneous revenue ............ 6,648,002 5,727,453 + 16 Federal aid for highways -----------------­83,233,420 56,814,476 + 47 Federal aid for public welfare -------­80,872,234 70,831,171 + 14 Other federal aid ------------------------·-------13,591,440 10,464,036 + 40 Donations and gran ts ........................ 320,576 510,978 -37 •• Change is less than one-half of one percent. TEXAS BUSINESS REVIEW Editor______________________ __ _____________________________John R. Stockton Managing Editor______________________ __________Robert H. Drenner CONTENTS The Business Situation in Texas ----------------------------------2 Finance ------------------------------------------------------------------------5 The Economy of Laredo ----------------------------------------------7 Building Construction ------------------------------------------------I0 Retail Trade ----------------------------------------------------------------11 Management -----------------------------------------------------------·--14 Agriculture ...........................__ ..................................... 15 Local Business Conditions ------------------------------------------18 Barometers of Texas Business ------------------------------------24 BUSINESS RESEARCH COUNCIL John Arch White, Acting Dean of the College of Business Admini•· tration (e"' officio); John R. Stockton ; W. H. Baughn; L. G. Blackstock; E. W. Cundiff; J. Neff; G. H . Newlove. BUREAU OF BUSINESS RESEARCH Director Assistant Director Administrative Assistant John R. Stockton Stanley A. Arbingast Florence Escott Francis B. May Statistician Resources Specialist Alfred G. Dale Robert H . Drenner Research Associate Deirdre C. Handy Research Associate Charles 0. Bettinger Research Associate Research Associate J acquie LeRoy Research Associate Arvid A. Anderson Tina Piedrahita Research Associate Ida M. Lambeth Research As•ociat• Marjorie T. Cornwell Administrative Clerk Research Associate Mildred Anderson Roberta Steele Cartographer Can dler P . Cass Statistical Assistant Marie F letcher Statistical Assistant Eva A. Arias Senior Secretaru Crescencia M. Stanley Statistical Technician Anna Merle Danz Senior Secretary Josephine J. Knippa Librari1 Assistant Marilyn Whites Publications Assistant Senior Clerk Typist Gail McElroyClerk Typist Dorothy W. Smith Clerk Barbara Warden Robert Dorsett Daniel P. Rosas Clerk Typist Offset Press Operator 0/fset Press Operator Assistants Robert B. Gentry, Walter Gray, Richard B. McGregor, Marie Payne, James H . Scott, and Charles J . Turner. Published monthly by the Bureau of Busineso Research, College of Business Administration, The University of Texas, Austin !Z. Entered as second class matter May 7, 1928 at the post office al Austin, Texas. under the act of AugW!t 24, 1912. Content of this publi· cation is not copyrighted und may be reproduced freely. Acknowledll.. ment of source will be appreciated. Subscription. $2.00 a year: individual copies, 20 rAnts. TEXAS BUSINESS REVIEW Finance: EASY MONEY-TIGHT MONEY By DAVID TOWNSEND* Federal Reserve manipulation of the supply of funds in the nation's money markets has been the mainspring of governmental economic stabilization controls in the 1950's. The Federal Reserve authorities have caused loan funds to he relatively scarce (tight money) when excessive spend­ing either threatened or caused inflation; conversely, they have provided the money markets with an abundance of funds (easy money) when employment and production were sagging. The almost sole reliance on monetary policy to curb excessive cyclical movements in business activity in this decade has pushed Federal Reserve policy decisions into a position of unprecedented prominence. Their powers, re­sponsibilities, functions, and policies are current subjects for government research and investigation, for compre­hensive research programs financed by business groups, for research by academic economists, and for graduate semi­nars. ,,,..,. 1 COUNTER-CYCLICAL MONETARY POLICY All US •••'"•• .....~ •••• •••• GH'" M.lkAI •' o.n... •""'-·ol Oollort -.----------.---------,..--~... 1957 1958 1959 The ingredients for the most widely used statistical measure of money market tightness or ease are: (1) the reserve positions of the nation's member hanks (com· mercial hanks which belong to the Federal Reserve Sys­tem), and (2) the volume of loans supplied to the member banks by the twelve Federal Reserve hanks. A member bank's total legal reserve is its deposit in the District Fed­eral Reserve hank. A member hank's required reserve is an amount computed by multiplying the hank's deposit liabilities by a prescribed percentage. Total legal reserves minus required reserves equal excess reserves; and excess reserves minus the volume of member hank borrowing from the Federal Reserve banks are called free reserves. A tight money policy causes a slight decline in excess reserves and an increase in member hank borrowing, which together produces a sharp decline in free reserves. When member bank borrowing exceeds excess reserves, free re­serves become negative and are called net borrowed re­serves. A policy of easy money permits member hanks to reduce their indebtedness to the Federal Reserve, which causes net borrowed reserves to approach zero and to be­come free reserves. To summarize: a policy of monetary ease produces a decline in net borrowed reserves and/or a • Asaociate Professor of Finance, The Univerity of Texas. Fi9ure 2 FREE RESERV ES AND NET BORROWED RESERVES OF THE 26 "RESERVE CITY" MEMBER BANKS IN TEXAS .lililltou of Oo1lot1 _,. 20 ·20 "'................. ... -1 I .1 .10 /\_} .. ""' I/ \ ­ 0 "" v I I _, - I \ I \ I -1 -10 I \ I v .1 v ........................_...... "~ ' \/ ,,. ·2' " 1959 1957 1958 rise in free reserves; tight money produces a decline in free reserves and/or an increase in net borrowed reserves. Figure 1 provides a graphic summary of the Federal Re­serve's attempts to counter business fluctuations with mone­tary policy in 1957, 1958, and 1959. The steady increase in Gross National Product in the first three quarters of 1957 was countered with tight money (a sharp increase in net borrowed reserves) . The rather severe decline in GNP after the third quarter of 1957 was accompanied by a rapid switch to easy money (decline in net borrowed re­serves to zero, then an increase in free reserves). The up­ward surge in GNP which began after the first quarter of 1958, and which is still in progress (March 1959), has been countered by tight money (decrease in free reserves to zero, then an increase in net borrowed reserves). Lest the preceding outline create an erroneous im­pression, it must be pointed out that the beautiful simplicity and effectiveness of Federal Reserve counter-cyclical mone­tary policy is probably more apparent than real. In this connection consider the plight of the central bankers in the first half of 1958, when recession was accompanied by creeping inflation. Their problem since the summer of 1958 has been equally difficult, as uncomfortably high levels of unemployment seemed to indicate a policy of easy money while partial business recovery, large govern­mental budget deficits at all levels of government, and in­flationary federal debt management decisions seemed to require a policy of tight money. Clearly, the Federal Re­serve cannot pursue a tight money course and a policy of easy money at the same time. Another factor to be considered is the possibility of the existence of a considerable time lag between the impo­sition of a tight or easy money policy and the impact of FREE RESERVES OF THE 605 "COUNTRY " MEMBER BANKS IN THE ELEVENTH FEDERAL RESERVE DISTRICT 1'1.ill.o"I el Oollat1 .. of Don.,. 10 0 ot----------+-----------+---<10 1957 1958 MAY 1959 the policy actions on the economy.t If the lag is great enough, an easy money policy initiated in recession would accentuate the following boom and inflation, while a tight money policy initiated in the inflationary period of the boom would accentuate the following recession. Such thoughts or fears might partially explain the rapid shift to tight money in mid-1958, at a time considerably in ad­vance of full recovery and inflationary pressures. This un­expected reversal of monetary policy caught many bond market speculators with large holdings of bonds purchased with borrowed money. The speculators were confident that Table A NUMBER AND ASSETS OF TEXAS BANKS* P ercent Total of total assets Percent of Ba nk classification Number number (000) total assets Members of the Federal Reserve System 575 59.4 $10.885,616 86.3 National Banks 469 9,887.817 State Banks 106 947,799 Nonmembers of the Federal Reserve System (all State Banks) 393 40.6 1.714.471 13.7 TOTAL 968 100 $12,550,087 100 *As of December 31, 1958. Source : Federal Reserve Bank of Dallas; Texas State Ba nking Dept. the policy of monetary ease would be pursued with in­creasing vigor until the achievement of full recovery. Easy money, of course, lowers market rates of interest and raises bond prices, while tight money reverses these effects. The impact of recent Federal Reserve monetary policy on Texas commercial banks is shown graphically in Fig­ures 1 and 2. Figure 2 depicts the changes in free reserves and net borrowed reserves of the 26 Texas commercial banks classified as "Reserve City" banks. Numerically unimportant in a state with 968 banks, this small group of large banks owns nearly 50% of the total assets of all Texas banks. Table B NUMBER AND ASSETS OF MEMBER BANKS OF THE ELEVENTH FEDERAL RESERVE DISTRICT* Texas as percentage Item The District Texas of total Number of member banks ·········· 631 575 91.l Total assets of member banks (thousands of dollars) ... ......... 11.682,730 10,835,616 93.1 Number of "Reserve City•• banks ........ 26 26 100 Total assets of "Reserve City" banks (thousands of dollars ) ........ 6,027,821 6,027 ,821 100 Number of "Coun try" banks . .............. 605 549 90.7 Total assets of "Country" banks (thousands of dollars ) ... . ..... 5,604,909 4,807,795 85.8 *As of December 31, 1958. Source: Federal Reserve Bank of Da llas ; Texas State Banking Dept. Figure 2 reveals that these large banks have recently experienced rapid and severe shifts in their reserve po· sitions. There are at least two important factors which help to account for these shifts from net borrowed reserves to free reserves and back to net borrowed reserves. The large. bank policy of operating with a low level of excess reserves when business is brisk, and the willingness of large banks t For the results of a recent attempt to measure this time lag see Thomas Mayer, "The Inflexibility of Monetary Policy" The Re~iew of Economics and Statistics, Vol. XL, No. 4 (November 1958) pp. 359-374. ' to borrow from the Federal Reserve, combine to accentuate the swings of the "free reserve--net borrowed reserve" line above and below zero. The effect of changes in monetary policy in 1957, 1958, and 1959 on the 605 member banks classified as "Country" banks in the Eleventh Federal Reserve District is shown in Figure 3. One reason for using Eleventh Federal Reserve District data as a measure of banking developments in Texas is found in Table A. The 393 Texas banks which do not belong to the Federal Reserve System, and are not included in District data, account for only 13.7% of the assets of all Texas banks. A second reason for using Dis. trict data as a substitute for state data may be seen in Table B. Texas banks account for 91 % of the number of banks in the Eleventh Federal Reserve District, and the Texas banks own 93 % of the assets of all District bank& All of the District "Reserve City" banks are Texas banks and 549 of the 605 "Country" banks are Texas banks. The reserve positions of the District "Country" banks have been relatively insensitive to changes in monetary policy (Figure 3). The preference of the medium and small banks for sizable excess reserve positions, and the unwillingness of these banks to borrow from the Federal Reserve, account for the high level and the relatively small movements of free reserves in recent years. CHANGES IN CONDITION OF WEEKLY REPORTING MEMBER BANKS IN THE DALLAS FEDERAL RESERVE DISTRICT Source: Board of Governors o( the Federal ReaerTe S11tem Mar 1959 Mar 1959 Mar 1958 from from fromAccount Feb 1959 Mar 1958 Feb 1958 TOTAL ASSETS .............. •• + 7 + 4 Loans and investments, less loans to banks and valuation reserves + 2 + 12 + 4 Loans, less loans to banks a nd valuation reserves + 2 + 9 + 1 Commercial, industrial, and agricultural loans . + 2 + 11 + 1 Loans for purchasing or carrying securities ........ . + 4 •• + 12 Real estate loans .. + 1 + 11 -2 Other loans .......................... . + 1 + 5 - 1 Total U. S. Government securities ........... . .. . + 1 + 15 + 12 Treasury bills ................................... . + 26 + 8 +107 Treasury certificates of indebtedness ............................. . -23 + 46 + 2 Treasury notes ····-----­-······· + 21 + 61 + 7 Bonds Other securities ............................. . Loans to banks .............. + 1•• -82 + 4 + 23 +171 + 7 + 4 -80 Reserves with Federal Reserve banks .................... + 3 2 -1 Cash in vaults ............................ - 8 + 2 - 8 Balances with domestic banks .................................... •• -14 + 17 Other net asseta .................. ...... - 9 - 9 4 TOTAL LIABILITIES .. •• + 7 + 4 Total adjusted deposits ............. . + 11 + 2 Demand deposits .............................. Time deposits .................................... U. S. Government deposits .... ....... Total interbank deposits ............ -4 + 1 + 65 + 5 + 6 + 14 + 92 -8 -1 + 8 + 49 + 17 Domestic banks ................................ + 5 -8 + 17 Foreign banks .................................. -6 •• •• Borrowings .................................... + 96 +213 + 36 Other liabilities ............................ -29 -26 -16 CAPITAL ACCOUNTS.. •• + 9 •• •Percentage changes are based on the week nearest the end of the month. ••Change is less than on&-half o! one percent. TEXAS BUSINESS REVIEW The Economy of Laredo By CHARLES R. McCORD* On May 14, 1755, Thomas Sanchez de la Barrera y Gal­lardo, acting in the name of the Spanish colonizer Jose de Escandon, founded the settlement of Laredo on the north bank of the Rio Grande some 200 miles northwest of the river's mouth. Until his death in 1796, Sanchez, holding concurrently the offices of Chief Justice and Alcalde, was in effect the one-man government of the new settlement. Within the term of his administration, Laredo became the largest and most successful permanent Spanish settlement in what is now Southwest Texas. From an initial popula­tion of about 85 in 1755, by 1800 Laredo had grown to be a then impressive community of about 1,000 and had estab­lished itself as the major point of crossing on the Rio Grande between El Paso del Norte and the Gulf of Mexico. As a condition of the treaty of Guadalupe Hidalgo, which terminated the hostilities of the Mexican War in 1848, Mexico agreed to recognize the Rio Grande as the international boundary and thus relinquished all claim to Laredo and all other Mexican settlements north of the river. Laredo was at that time designated as the seat of govern­ment of the newly-created Webb County. But the movement of people and goods is apt to follow the easiest and most accustomed route, regardless of politi­cal decisions. The boundary relocation effected by the treaty did not appreciably alter the course of commerce in the area, for it did not depreciate the comparative advan­tages of the river-crossing at Laredo. The new international division simply created a need for a new Laredo on the south side of the river. The importance of the river-cross­ing itself-Laredo--Nuevo Laredo-as a major point of confluence of traffic between Mexico and the United States was never diminished; rather, it grew steadily as commerce between the nations increased through the years. The Rio Grande was first bridged at Laredo in 1889. Until then passage across the river had been by ferry. The two predecessors of the present international bridge had unhappily brief careers-the first was destroyed by fire in 1920, the second by flood in 1954. The present bridge, an impressive four-lane span, was built on a scale sufficient to handle the tremendous flow of vehicular and pedestrian traffic that crosses the river each day. The population of Laredo has increased steadily through· out the history of the community. As measured by per­centage increase of population, the city experienced its most dramatic growth during the decade of the 1880's. In 1881, both the Corpus Christi and Rio Grande (later the Texas-Mexican) and the International-Great Northern (later the Missouri Pacific) railways completed the con­struction of their tracks into Laredo. Here, as in the West generally, the advent of the railroad was a powerful eco­ •Formerly Research Associate, Bureau of Business Research. nomic stimulus. From 1880 to 1890 Laredo's population rose from 3,521 to 11,319, an increase of 221 % . The years of World War I were Laredo's next period of explosive growth. From 1910 to 1920 its population increased ap­proximately 53 %, from 14,855 to 22,710. Since 1920, ~ar~o has shown substantial percentage, and increasingly s1gmficant absolute, increases in each population census. The most reliable estimates available place the current pop1;1lation of the city at approximately 65,000. As the pop­ulation of Laredo has grown through the years, it has come to represent an increasingly larger portion of the total population of Webb County. At the turn of the century, only 61 % of the people of Webb County resided in Laredo. In 1957, it was estimated that the population of the city comprised roughly 93% of the population of the county as a whole. The growth of Laredo has been paralleled by the expansion of her sister city across the river. In fact, most es_timates now indicate that Nuevo Laredo's population slightly exceeds that of Laredo. It is now quite likely that the two cities together form a metropolitan area of approxi­mately 140,000 population. Webb County is located in the central western portion of the South Texas (or Rio Grande) Plain, a subregion of the Texas Coastal Plain. The topography and vegetation of Webb County is typical of that which has caused much of the South Texas Plain to be called "Brush Country" or "Monte." The land, rising from the river in gentle undula­tions, is covered by a dense growth of bunch grasses, cactus and scrub. With the exception of a narrow band of irrigated truck farms on the alluvial shelf along the Rio Grande, the great expanse of the country is given almost exclusively to large-scale cattle ranching. The southern portion of the South Texas Plain, including Webb County, has the longest summer and mildest winter seasons of any area in the state. The climate of Webb County is dry and warm with an average annual rainfall of 19.27 inches and a mean annual temperature of 72 degrees. The irrigated farms of Webb County are favored with a 293-day growing season, only about 85 days of which, on an average, are cloudy. In its natural state, the Rio Grande is not an unqualified blessing to Laredo. The river's flow-fluctuating from flood stage to a mere trickle--is too erratic for it to be an ideal municipal water supply. At present, there are two projects in advanced stages of planning, either one, or both, of which would solve Laredo's water problems for the foresee· able future. One of these plans is to use Lake Casa Blanca as an off­river storage reservoir. By this plan, the city could borrow water from the reservoir in time of need and repay the amount borrowed whenever the Rio Grande was again run­ning high. Lake Casa Blanca was created in 1950 by the construction of an impounding dam across Chacon Creek just northeast of the city limits. Apart from its possible MAY 1959 function as a stora<>e reservoir, the lake now provides the people of Laredo ;ith an excellent sports and recreation area. The other plan, and it now appears the one most likely to he effected consists in attacking directly the problem of the river's unc~rtain flow. This now much-publicized project, the Diablo Dam, will be a huge international dam on the Rio Grande near its confluence with the Devil's River a few miles northwest of Del Rio. The Diahlo Dam is one of three such projects proposed in a treaty signed by t~e United States and Mexico in 1944. The Falcon Reservo:r in Starr and Zapata counties is the only one of these proj­ects realized thus far. It is estimated that the Diahlo Dam, as now planned, would produce a total st?rage capacity ?f 5,977,000 acre-feet, making its reservou the largest m Texas. Construction of this great multi-purpose dam would provide a permanent solution to the water l?r.oblem of Laredo and would be of great value to the c1lles down­stream. Though the economy of Laredo is b_asically oriented to the functions of an international port, 1t has a modest, but growing, industrial sector. Through their Ch~mher of Commerce and Industrial Development Committee, the business and civic leaders of the community are actively soliciting new industry for Laredo. City officials are also aware of the need for a more diversified industrial base for Laredo's economy. The City Planning Commission ~as recently proposed an industrial z??ing ordinance wh1_ch would encourage, and set the cond1llons for, an orderly m­ dustrial development in the city. Just north of the Laredo city limits, Texas Mining and Smelting, a division of National Lead Company, operat:s the largest antimony smelter in the world. For years this smelter has been a major employer in Laredo. It smelts ores imported from Mexico, the leading supplier of this strategic raw material to the United States. Another major industrial employer in Laredo, and o~e of ever growing significa.nc:, is the apparel ~nd texllle products industry. The prmc1pal manufacturer m the tex­ tile products category is the Texas Harvest Hat Company, a firm whose products have been well known for years in international markets. The leading firms in the apparel category are the Laredo Manufacturing Company, Amedee Frocks, Inc., and Salo Manufacturing Compan_Y. Together, these four leading concerns employ approximately 500 people. There is an abundant labor supply in Laredo pa!'­ ticularly suitable for industries such as these, and electnc power and natural gas are also available at attracti~e rates. The principal minerals of Webb County are hnck clay, sand, gravel, cannel coal, oil and natural gas: A~ sources of income and employment, by far the most s1gmficant of Crude Oil Runs to Stills in Texas . Index • Adjusted for seasonal variation • 1947-1949°100 200 200 - 150 I v M "\I/ /'~ ~ ,,,.,,..-­ rr L.f'--. 100 I00 [,.-"\. I/ I -w 0 0 1946 '47 "48 '49 50 51 52 53 54 55 56 57 '58 ·59 Industrial Electric Power Use ii Tnas these are oil and natural gas. Natural gas was discovered in Webb County in 1908, and in 1920 0. W. Killam hr?ught in the county's first oil well. The total value of ~neral production in Webb County, largely from sales of oil.~ natural gas, was $7,368,590 in 1957. T_he c_ente~ of activ!ty in petroleum and natural gas product10n is Muando City in the southeast corner of the county. However, Laredo businesses receive a considerable income in providing goods and services for mining empl~yees working in the oil and gas fields of Webb, Duval, Jim H?g~ and ~pata counties. The Texas Employment Comm1ss1on t;stimates that, on the average, 375 workers were empl~yed m W~b County in 1958 in mining, quarrying, ~d011 P.r~ductio~. In addition to manufacturing and mmmg achv1ty, agn· cultural production makes a large contribution to the economy of Webb County. According to 1958 estimates of the Texas Employment Commission, approximately 13~ of the persons employed in the county we.re e~gaged. ID agriculture. Though irrigated truck farmmg is an un· portant element in the agriculture of \Y'eh~ County, as a source of income to the area cattle ranchmg is of far greater significance. The value of all farm products sold from the county in 1954 was $5,784.,812_. Of that total, .$4,020,067 or 70% derived from sales of livestock and livestock prod· ucts. 'The value of all crops sold was $1,763,545, or 30% of the total. Vegetables-primarily tomatoes, ~nions, and melons, but also including lettuce, peppers, spmach, bro_c· coli, carrots, beets, sweet corn, mustard greens, grapefru1~ oranges, and limes-accounted for 87% of the value of all crops sold in that year. . . Laredo is served by two railways, the Texas-Mexican and the Missouri Pacific. Freight and passengers entering Mex· ico by rail are transferred at the river to the equipment of the Ferrocarriles Nacional de Mexico. The city also re· ceives the traffic of three U. S. highways and one state highway. At Laredo these highways tie into the much· travelled Pan American Highway, which provides a popu· lar route to Mexico City via Monterrey. When present ro~d construction is completed, Laredo will communicate with the national Interstate and Defense Highway Systems through a four-lane divided highway to San Antonio. The completion of this project is certain to bring a considerable increase in tourist traffic through Laredo. The city is also served by air through the facilities of the Laredo Air Force Base where flights of the Trans-Texas Airlines are serviced. Tourists travelling by air can continue into Mexico on a flight of the Campania Mexicana de Aviacion, which op­erates a terminal in Nuevo Laredo. Laredo Air Force Base was constructed during World War II to he used as a flexible gunnery training base. It TEXAS BUSINESS REVIEW was closed after the war in 1945, but on April 1, 1952, the Air Force reactivated it as a field for basic single-engine pilot training. There are now about 2,400 military person­nel at the base and its operations give employment to ap· proximately 650 civilian workers. A recent report from Washington indicates that there will be no change in the status of the base in the foreseeable future. The recent growth of Laredo's economy is indicated by some of the commonly-used measurements of business con· ditions. Total value of retail sales for the Laredo metro­politan area in 1950 was $46,441,000. In 1957 this value had increased to $52,814,000. The value of authorized con­struction rose from $1,102,000 in 1950 to $3,946,499 in 1957, and in that same period bank debits increased from $214,800,000 to $282,092,000. It is estimated that in 1958 the total population of the Laredo retail trading area was 4 72,460. This market area includes several of the surrounding Texas counties and extends into Mexico as far as Monterrey. Laredo has 42 merchant wholesalers employing about 40 persons and 17 sales agencies, brokers and petroleum bulk stations with employment of approximately 240. The extent of commerce between Laredo and Nuevo Laredo is suggested by the very large number of automo· biles and auto passengers that regularly cross the Inter­ national Bridge in both directions-in 1958, for example, 1,529,463 automobiles carrying 5,530,805 persons crossed into Nuevo Laredo, and a slightly greater number of both crossed into Laredo from Mexico. Traffic on International Bridge, in fact, has increased at an average annual rate of nearly 10% in recent years. Part of the increase, of course, was caused by a greater number of tourists travelling to the interior of Mexico and the United States, but by far the greater portion of the traffic was composed of business men, laborers, and shoppers that daily crossed from one side of the river to the other and frequently back again in the same day. A greater dollar volume of goods moves between Mexico and the United States at Laredo than at the other port on the two nation's common boundary. Laredo import customs collections exceed $4 million annually. Last year a daily average of over 180 railroad cars of freight crossed into Mexico from the United States at Laredo; there is also a very large amount of goods transportation by truck. The city continued to be the leading port of entry for tourists going into the interior of Mexico in 1958, when it recorded 58,267 tourists cars and 151,588 tourists crossing the border. To accommodate the great number of tourists passing through Laredo, there are four hotels and 23 motels with a Gasoliu Coaumption ia Texas Bureau of Business Research Publications Texas Retail Lumber Dealers Survey of Cost of Doing Business, 1958 by Florence Escott Administrative Assistant one dollar Texas Industrial Expansion March-April 1959 by Stanley A. Arbingast, Assistant Director Robert H. Drenner, Research Associate twenty-five cents combined capacity of 1,100 rooms. The present trend in motel construction in Laredo is toward the large self·suffi­cient luxury·type operation, such as is now exemplified by the Sands Motel at the northern edge of the city on U.S. Highway 81. All indications are that the most dynamic element in the city's economy in future will be the rapidly expanding service industries catering to the tourist trade. By no means all the tourists that come to Laredo are merely passing through; the varied recreational oppor­tunities that the city offers-hunting, fishing, water sports, golfing, horseback riding, bullfights--attract tourists on their own account. They also help to create a positive com­munity atmosphere that can be a major factor in future in­dustrial growth. Fine theaters, civic concerts, a first-rate school system (including private and parochial schools and fully-accredited Laredo Junior College), good hospitals, a moderate tax rate, and a cooperative, progressive munici­pal government and Chamber of Commerce also contribute to an outstanding environment for future business and in­dustrial growth. The continued rapid industrialization and economic growth of Mexico, and a consequent sharp rise in its com­merce with the United States, is safely predictable. It is reasonably certain, therefore, that Laredo will retain in­definitely its established position as a leading port on our southern border. Projected improvements in the highway systems of both countries, with Laredo as a major exchange between these systems, will encourage still further the flow of tourists and goods through the city. Benefits accruing from this rising flow will tend to encourage the growth of those sectors of Laredo's economy not directly related to the city's function as a tourist and transportation center. Ordinary life Insurance Sales in Texas* Index • Ad justed for seasonal variation • 1947-1949·100 Building Construction: MARCH PERMITS SHOW SEASONAL GAINS By ROBERT H. DRENNER An estimated $114,290,000 in urban building construc­tion was authorized in Texas in March. As usual, permits for new buildings accounted for about 90% of the total ($102,565,000 in this instance), and authorizations for additions, alterations, and repairs on existing residential and nonresidential buildings were responsible for the re­maining 10% (or $11,725,000 in March). March authorizations, without seasonal adjustment, were 17% higher than in February and 16% above March 1958. The total value of building authorized in the state in the first quarter of 1959 ($316,392,000) was 22% greater than in January-March 1958 and a new record for the period. In comparing building authorized so far this year with the same months in 1957, however, it should be noted that last year's building boom in Texas got underway only after the first quarter. Furthermore, the average monthly value of the seasonally adjusted building index last year was 237 (1947-49= 100), and for January-March 1959 the average value of the index was slightly below this figure--and was substantially below the average index value (262) for the second half of 1958. The March index, at 235, was unchanged from its February value and only nominally changed from its January reading (239). For the last four months, in fact, the index has given no indi­cation of a trend either upward or downward, and after the monthly dollar authorization totals are appropriately ad­justed for seasonal variations in the building pattern it is Building Construction in Texas• Index • Adjusted for seasonal variation • 1947-1949·100 19<16 47 48 49 50 51 52 53 54 55 56 51 58 59 •value of building construction authorized. obvious that building in Texas, though at a high level, is so far not quite up to expectations. The year's showing, however, will be greaty influenced by whatever federal housing bill is eventually passed by the present Congress. The future course of the economy will also be a factor, of course. Specifically, if economic recovery is strong enough to occasion a substantial rise in money rates, and if the new housing bill does not make home mortgages attractive to investors under such conditions, it will be difficult for residential building, which is responsible for about two­thirds of all building construction, to match last year's record. RESIDENTIAL New urban residential (housekeeping) building author· ized in Texas in March totaled an estimated $71,987,000, up 17% from the preceding month and 30% above March 1958. For the first 1959 quarter, the total dollar value of new homes authorized was 37% greater than in the com· parable quarter last year. The seasonally adjusted residential building index, however, fell from 279 in February to 273 in March. Its January value was 308. On average, the residential index has been falling slowly since mid-1958, although the level of activity from which the decline started was so high that it was perhaps unreasonable to expect it to be maintained. What decline there has been, however, has not been sharp; homebuilders are still extremely active, and there is as yet little evidence that the market for new homes is saturated LOANS BY SAVINGS AND LOAN ASSOCIATIONS Source: Federal Home Loan Bank of Little Rock Percent chana:e Type Ma r 1959 Feb 1959 Ma r 1958 Ma r 1959 f rom F eb 1969 Mar 1969 f rom Mar 1968 Number ALL LOA N S 4,352 3,848 3,724 + 13 + 17 Construction ... 826 801 702 + 3 + 18 P urchase 2,1 23 1,791 1,464 + 19 + 46 Other ....... ----------------------­ l ,404 1,256 1,668 + 12 -10 Value (thousands of dollars) ALL LOANS 39,409 34,034 34,55 1 + 16 + 14 Construction 9,816 9,268 12,895 + 6 -24 Purchase ___ -----­ 20,286 17,117 13,059 + 19 + 66 Ot her .. ------------------­ 9,307 7,649 8,697 + 22 + 8 or that interest rates have risen enough to make financing a problem. There are some reports, on the other hand, that homebuyers who are buying homes for the first time are a decreasing percentage of home purchasers, and that a growing proportion of home sales involve trade-ins. Such reports suggest that, in contrast with the tendency last year, builders are showing more interest in higher-priced homes. Multiple-family dwelling authorizations in March were down 13% from February, but for the first quarter were 34% above January-March 1958. Duplex construction, last year 58% above the 1957 level, for the quarter was 5% below January-March 1958 and appears to be easing off, but permits for new apartment buildings, which last year accounted for 84% of the dollar value of all multiple· family housing authorizations, though down 13% from February, in the first quarter were 43% above the same period last year. NONRESIDENTIAL . Despite the gradual decline of the adjusted residential mdex through the first quarter, the over-all building index has been relatively stable as a result of moderate improve· ment in the nonresidential sector. Authorizations in the latter category in March represented new building with an estimated total dollar value of $30,578,000, or approxi· mately 30% of all new building authorized during the month. March permits were 14% greater than the Febru· ary total, a larger gain than normal from the one month to the ~th~r, and as a result the seasonally adjusted nonresi· dential mdex moved upward to 187 from 179 in February. IO TEXAS BUSINESS REVIEW The February index in turn had risen by roughly the same amount from January's 167. For the first quarter, non­residential authorization were 3% above the first three months of 1958. However, the average value of the index for January-March 1957 ( 177) was 11% below the index average for last year. Nonresidential building this year, in short, has considerable ground to gain to match last year's showing for the category. Showings of the individual classifications in the in­clusive nonresidential building category varied widely in March, as usual, nor was much uniformity apparent in their separate trends for the quarter. The over-all 14% gain from February was caused primarily by strong gains in authorizations for bowling alleys, theaters, and other amusement buildings (+544%), office-bank buildings (+147%), works and utilities (+474%), and schools ( + 19%). A large portion of these gains, however was off­set by decreases in permits for hotels (-100%) ,'factories (-57%), hospitals and institutional buildings (-49%), and stores (-25% ) . The more important showings for the quarter include amusement buildings ( + 140% ), churches (-5%), factories (+60%), hospitals (+85%), office­bank buildings ( +51% ) , schools (-41% ) , and stores (+26%). ESTIMATED VALUE OF BUILDING AUTHORIZED Souree t Bureau •f BaslneH Research In eeoperatlon with the Bureau of Ldor StatlatJea, U . S . Departmeat of Labor Percent change 1959 Claasiftcation Mar 1969 January-March 1969 1968 from 1968 Thousands of Dollars CONSTRUCTION CLASS ALL PE'RMITS ...................... lU,290 316,392 258,906 + 22 Resident ial (housekeeping) ................ 71,987 201,222 146,907 + 37 One-family dwellings .. 67,440 186,654 136,039 + 37 Multiple-family dwellings ... . 4,647 14,668 10,869 + 34 Nonresidential buildings ......... . 30,578 86,163 83,819 + 3 Nonhousekeeping buildings (residential) ....................... . 1,165 4,262 2,633 + 62 Amusement buildings ........... . 2,163 4,038 1,682 +140 Churches ................................... . 2,914 7,724 8,147 - 5 Factories and workshops ..... . 1,768 9,385 5,866 -60 Garages (commercial and private ··-·--······----····-·····-······· 464 l,116 1.049 + 6 Service stations ----····· ········-····-· 842 2,004 2,867 -30 Institutional buildings 360 3,715 2,004 + 85 Office buildings• ................... . 6,144 12,445 8,253 + 61 Works and utilities ............... . l ,877 2,492 2,406 + 4 Educational buildings .......... 6,030 17,230 29,210 -41 Stores and mercantile buildings ....................... . 6,729 18,385 14,574 + 26 Other buildings and structurest ........................... . 1.132 3,368 5,128 -34 Additions, alterations, and repairs§ ......................... . 11,725 29,007 28,181 + 3 METROPOLITAN vs. NON­ METROPOLITANt Total metropolitan ....................... . 87,302 233,100 191,118 + 22 Central cities ........... . 72,051 196,777 163,339 + 20 Outside central cities ............... . 15,261 36,323 27,779 + 31 Total nonmetropoJitan 26,988 83,293 67,788 + 23 10,000 to 60,000 population ... . 18,275 60,477 49,941 + 21 Less than 10,000 population ... . 8,713 22,816 17,847 + 28 •Ineludea public (nonfederal) administration buildin1:1 beginnina: July 1957. Unclud• a:onrnment (nonfederal) 1eniee buildinp bea:inning July 1967. flncludea addition• and alteration1 to public buildln1:1 bea:inninir July 1967. tA• dellned ln 1950 cenaua. Retail Trade: DURABLES SELL STRONGLY IN MARCH; EASTER HELPS NONDURABLES By TINA PIEDRAHITA Dollar sales. Retail sales in Texas in March 1959 were estimated at $1,062.6 million, up 14% from the preceding month and 9% higher than in March 1958. Retail sales for January-March 1959 were 7% ahead of sales in the same period last year. Durable goods sales in March 1959 ($317.4 million) were 17% above sales in February 1959, bettered March 1958 by 24%, and topped January-March 1958 by 17%. Nondurable goods sales ($745.2 million) rose 13% from the preceding month, were 3% ahead of March 1958, and 4% above the first three months of 1958. ESTIMATES OF TOTAL RETAIL SALES (Unadjusted fer seasonal •ariation) Percent change Type of store Mar 1959 Mar 1959 Mar 1959 Jan-Mar 1959 J an-Mar from from from 1959 F eb 1959 Mar 1958 Jan-Mar 1958 Millions of dollars TOTAL ............... 1,062.6 3,001.3 + 14 + 9 + 7 Durable goods* .......... 317.4 872.7 + 17 + 24 + 17 Nondurable goods .... 745.2 2,128.6 + 13 + 3 + 4 • Contains automotive stores, furniture stores, and lumber, building material and hardware stores. The increase in nondurable goods sales this March over the same month a year ago was partly the result of earlier Easter shopping this year. The large percentage increase in sales by durable goods stores, however, reflects the general upward trend in retail sales in Texas. Based on seasonally adjusted sales of the first three months of 1959, total 1959 retail sales in Texas are esti­mated at $12.937 billion, as compared with sales in 1958 of $12.238 billion. Retail Sales in Texas Index , Adjusted for seasonal variation , 1947-1949·100 19<16 ·q "8 '49 ·50 '51 March indexes. The preliminary March index of total retail sales in the state (1947-49=100 and adjusted for seasonal variation) was 203, four points above the revised February index and 11 points above the average month for 1958. The durable goods index ( 166) was seven points above February 1959 and six points above the average month for 1958, while the nondurable goods index (222) was one point above February and 14 points above the MAY 1959 average month for 1958. Deflated for price changes, the preliminary March index of retail sales was 172, up three points from the deflated February index. Sales by store types. With the exception of jewelry stores, which reported a 3% decline in sales from Febru­ary, both durable and nondurable goods stores reported sales increases in March from the preceding month rang­ing from 2% to 57%. Sales by durable goods stores as a whole bettered both March 1958 and January-March 1958­Highest increases over the same month a year ago were made by lumber and building material dealers ( +32%) and motor vehicle dealers ( +27%). For January-March 1959, best increases over the same period last year were also reported by lumber and building material dealers ( +20%) and motor vehicle dealers ( + 19%). Among nondurable goods stores, sales declines in March from March 1958 were reported by food stores ( -7%), country general stores ( -4%), and jewelry stores (-2%). Best showings were made by florists ( +34%), men's and boy's clothing stores and shoe stores (each +21 % ) , office, store, and school supply dealers ( + 18%), department stores (+9%), and women's ready-to-wear stores, drug stores, gasoline and service stations and liquor stores (each +8%) . For the January-March periods of comparison, all but food stores and country general stores (each -1% ) reported sales improvements; increases RETAIL SALES TRENDS BY KINDS OF BUSINESS Source: Bureau or Bu siness Research fn cooperation with the Bureau ol the Census, U.S. Department of Commerce Percent cha nge K ind of Business Numbe r of reportin g establishments Mar 1959 from F eb 1959 Ma r 1959 J a n-Mar 1959 from f rom Ma r 1958 J an-Mar 1958 DURABLE GOODS Automobile stor es ---------­ 285 + 18 + 26 + 19 Furniture a nd h ousehold appliance stores _ 168 + 8 + 11 + 9 L u mber, building ma terial, a n d hardware stores 286 + 30 + 30 + 19 NONDURAB LE GOODS Apparel stores 199 + 30 + 12 + 7 Drug stor es ·-·----·-··--········· 154 + 5 + 8 + 7 Eatin g a nd drinking places ---------­ 87 + 10 + 2 + 1 Food stores ------··········-····· 300 + 3 6 Gasoline a n d service stations -­ 872 + 14 + 8 + 7 Gen eral mercha ndise stor es -­---------·····-----­--­---Other retail stores -·-­·-·· 166 222 + 30 + 16 + 9 + 16 + 8 + 10 ranged from 1 % to 14.%. Greatest gains were reported by florists ( + 14%), shoe stores (+12%), office, store, and school supply dealers (+11% ) , department stores (+9%), women's ready-to-wear stores and jewelry stores (each +8%), and men's and boys' clothing stores, drug stores, and gasoline and service stations and liquor stores (each +7%). Volume of department and apparel stores. March sales by Texas department and apparel stores were 30% above February 1959 and 11 % ahead of sales in the same month a year ago. For the first three months of 1959, sales were 8% above the same period last year. Total sales by department and apparel stores in all of the 30 reporting cities showed gains from sales in the preceding month. Increases ranged from 11% reported Consumer's Prices In the U. S. by Amarillo to 73% reported by Texarkana. Of the 27 cities reporting increases over March 1958, highest per­centage gains were reported by Lubbock ( +35%), Plain­view and Temple (each +29%), Sherman (+28%), Brownwood (+26%), Henderson and Marshall (each +25%), Corpus Christi (+23%), and San Angelo (+20%). Sales declines from March of last year were reported by Cleburne (-4% ), EI Paso (-3%), and Bryan (-2%). For the first 1959 quarter, 24 cities bettered January-March 1958; sales in two cities showed no change. The leading gains for the period were posted in Lubbock (+26%), Plainview (+22%), Temple (+21 % ) , Marshall ( +20%), and San Angelo ( +19%). Sales in Texas cities. Of the 25 Texas cities reporting enough retailers to permit total retail sales listings, all but one city reported increases over February 1959. Per­centage increases ranged from 10% reported by both Amarillo and Dallas to 54% reported by Brownwood. Twenty-four of the reporting cities topped March 1958 and 23 bettered January-March 1958. The leaders among these 25 cities in the year-to-year comparison were Plainview (+ 59% ) Greenville (+46%), Texarkana (+44%), Amarillo (+40%), Lubbock (+38% ) , Waco (+30%), Wichita Falls (+27%), Brownsville (+22%), Beaumont (+20%), and Austin, Harlingen, Henderson, and Temple (each +19%). Best showings for January-March 1959 were made by Plainview (+73%), Texarkana (+40%), Greenville ( +28%), Amarillo ( +26%), Brownsville and Lubbock (each +25%), and Waco (+21%). Erratic variation in several important retail sales cate­gories had some effect in the total retail sales reported by several cities. Thus Plainview, with a 48% increase in March over February sales by apparel stores, reported a 10% decline in sales by automotive stores; the decline brought total retail sales 1 % below February 1959. For January-March 1959, sales by automotive stores in the same city were 108% above sales of the same period last year, and total retail sales were up 73% from the 1958 first quarter. For January-March 1959, Brownwood re· ported a sales decline in automotive stores ( -25%) and an increase in sales by both apparel stores and furniture and household appliance stores (+15% and +9%, re­spectively). But total retail sales for the city dropped 7% from January-March 1958. With Easter falling in March instead of April, apparel stores recorded sales increases over March 1958 in most cities. However, sales by such stores in El Paso fell 24% from March 1958, Bryan reported a 2% decline and Waco slipped 1 %. ' TEXAS BUSINESS REVIEW POIT.lL aECl!:IPTI Credit and collection ratio•. The ratio of credit sales to total net sales in 60 Texas deparbnent and apparel P ercent change stores in March was 65.8%, or 5.3 points below the Febru­ Mar 7-Mar7­ ary 1959 ratio and 0.1 points below March 1958. By cities, April 3 April 3 1969 1969 highest ratios were reported by Bryan ( 69. 7%), Dallas from from (67.2%), Galveston (66.1%), and Austin (64.3%). By Mar7-Feb 6-Mar S-­Feb 6-Mar8­ April 3 Mar 6 April 4 Mar 6 April 4 type of store, men's clothing stores (74.0%) and women's City 1959 1959 1958 1959 1958 specialty shops (9.4%) showed highest ratios. Alice ......................... $15,544 $14,866 $12,303 + 5 + 26 The ratio of collections during the month of March to Brownfield ................ 8,741 7,852 6,733 + 11 + 52 outstandings at the first of the month was 35.8%, or 2.5 Cameron 8, 7 41 7,473 8,694 + 20 + 3 Childress ...... 4,833 4,661 4,731 + 4 + 2 points below the ratio of March 1958. Highest ratios were Cleburne ..... . 12,117 10,401 9,832. + 16 + 23 Coleman ............. . 6,726 5,086 6,527 + 32 + 3 Cuero ............... . 6,668 5,593 3,828 + 48 + Denison ·················---17,540 15,605 + 12 Credit Collection Eagle Pass ............... . 6,217 5,814-6,272 + 7 + 18 ratios• ratios•• CREDIT RATIOS IN DEPARTMENT AND APPAREL STORES Edna ......................... . 4,076 5,469 4,944 -25 -18 Number of ----­ reporting Mar Mar Mar Mar El Campo ···········-····· 9,178 9,099 6,914 + + 33 Classification stores 1959 1958 1959 1958 Gainesville 14,731 12,947 11,356 + 14 + 30 Gatesville ................. . 4,433 3,554 3,447 + 25 + 29 ALL STORES ....................... . 60 65.8 65.9 35.8 38.3 Gilmer .......... . 4,543 3,876 3,294 + 17 + 38 BY CITIES Graham ................... . 7,437 9,984 6,616 -26 + 14 Austin ............................ . 5 64.3 64.2 51.l 64.5 Granbury ................. . 3,510 3,299 3,297 + 6 + 6 Bryan ......................................... . 3 69.7 56.0 44.l 47.7 Hale Center 1,737 1,256 1,378 + 38 + 26 Cleburne ..................................... . 3 45.l 43.6 42.9 40.7 Hillsboro 6,963 6,092 4,916 -2 + 21 Dallas ............................. . 6 67.2. 66.l 38.0 34.3 Huntsville 14,017 7,583 7,729 + 85 + 81 El Paso ....................................... . 3 57.7 59.6 29.l 30.4 Jacksonville ... ... 14,577 15,343 11,750 -5 + 24 Galveston ................................... . 4 66.l 63.4 45.2 43.5 Ken edy ...................... 3,990 3,016 3,282 + 32 + 22 San Antonio ·························-··· Kermit ...................... 7 ,309 7,177 6,326 + 2 + 16 5 63.6 64.0 28.3 41.8 Waco ........................................... . 6 60.0 60.2 43.6 42.6 Kerrville . 11,027 10,403 8,957 + 23 + 6 BY TYPE OF STORE Kingsville .................. 14,814 13,628 11,753 + 9 + 26 Department stores Kirbyville .................. 3,634 2,065 2,386 + 72 + 48 (over $1 million) 19 65.4 66.l 34.3 36.8 La Grange ......... 4,228 6,728 3,527 -26 + 20 Department stores Levelland .................. 7 ,366 7,157 6,779 + 3 + 27 (under $1 million) 17 49.l 48.4 39.4 41.3 Littlefield .................. 6,656 6,458 4,717 + 22 + 41 Dry goods and apparel stores 4 62.6 58.5 44.5 43.8 Llano .................... 2,333 2,091 l ,914 + 12 + 22 Women's specialty shops -······· 12 69.4 67.4 42.8 44.6 Lockhart .................. 3, 729 3,478 3,549 + 7 + 5 Men's clothing stores 8 74.0 72.5 44.2 47.8 McAllen .................... 26,606 24,670 20,878 + 8 + 27 Marlin ............. . 6,036 6,137 5,121 2 BY VOLUME OF + 18 Mission ·--· 8,785 8,034 NET SALES 6,832 + 9 + 29 Navasota ................. . 4,378 ­ Over $1,000,000 ..... 21 66.7 66.9 35.4 37.9 6,091 3,853 14 +14 $600,000 to $1,000,000 ·············· 13 68.4 68.7 43.4 45.l Pecos --·--·-----·········----·-10,556 9,808 8,789 + 8 + 20 44.2 Pittsburg .... . 4,537 2,960 2,627 $260,000 to $600,000 ........ . 13 66.2 62.2 41.8 + 53 + 73 Sinton ....................... . 4,987 6,083 Less than $200,000 ................... . 13 64.l 62.l 38.9 38.4 5,686 -2 -12 Snyder ..................... . 14,362 12,924 + 11 • Credit sales as a percent of net sales. Taft ......................... . l,9'15 2,786 2,173 -29 -9 ••• Collections during the month as a percent of accounts unpaid on Terrell .................... . 6,435 7,616 6,233 -29 -13 the first of the month. Waxah.achie ........... . 11,241 11,332 9,352 -l + 20 Weatherford ........... . 8,3H 9,357 6,969 11 -+ 20 reported by Austin ( 51.1 % ) , Galveston ( 45.2 % ) , Bryan Yoakum ................... . 10,891 9,530 7,152 + 14 + 52 (44.1 % ) , and Waco ( 43.6%) . By type of store, highest ratios were made by dry goods and apparel stores ( 44.5 % ) and men's clothing stores (44.2%). Improvements over 1958 collections were reported by Cleburne, Dallas, Gal­ FEDERAL INTERNAL REVENUE COLLECTIONS Source : Internal Re~enue Senice, U. S. Treasury Departmen t veston, and Waco. The March ratio of charge account sales to total net July 1-March 31 sales in 16 Texas department and apparel stores was 44.2%, Percent or 0.3 points below the March 1958 ratio. The ratio of District 1958-1959 1957-1958 change instalment sales to total net sales (19.l % ) dropped 0.5 TEXAS ............................... $1,812,962,494t $1,828,556,131 t points from the same month a year ago. Collections on Income ...... ................................... 788,329,320 820,982,296 4 charge accounts ( 47.3%) were 0.1 points below collections Employment .... ........................... 20,627 ,593 21,997,236 6 in March 1958, while collections on instalment accounts Withholding .... 842,863,543 816,767,603 + 3 Other ................. .......................... 161,142,029 168,808,988 (17 .4%) were 0.4 points above collections in March of 5 SOUTHERN DISTRICT.. 926,893,992t 973,758,794t last year. Income ·-···············--· -··-···-·-········· ·· 395,076,672 444,197,947 -11 Employment ........ . 5,862,111 5,931,359 lSecondary trade indicatora. Advertising linage in 25 Withholding .............................. . 427,769,850 419,274,764 2 + Texas newspapers was 21 % above February 1959 and Other .......................................... . 98,195,360 104,354,721 topped March 1958 by 9%. All of the reporting newspapers NORTHERN DISTRICT.. 886,068,503 864,797,336t + registered increases over the preceding month and 21 were Income -···-·-·····---·----------------···--···· 393,252,658 376, 784,349 + 4 Employment ............................... . 14,765,483 16,065,876 8 above the same month last year. Withholding ............................... . 415,103,693 397,492,968 + 4 Of the 115 Texas cities reporting postal receipts for the Other ............................... . 62,946,669 64,464,142 2 March 7-April 3, 1959 period, 89 were ahead of February 6-March 6, 1959 and 107 better March 7-April 3, 1958. t Details do not add to totals due to rounding. MAY 1959 Management: AN APPROACH TO TECHNICAL MANAGEMENT TRAINING By KENNETH W. OLM* Science, mathematics, engineering, and business admin· istration, blended into a coordinated program of study, utilizing the faculties of three separate colleges-this is the approach which the Engineering Route to the Bachelor of Business Administration degree has been using since 1947 to provide technically trained personnel for man­agerial positions in business and industry. A recent note­worthy change in this degree program has been the ad­dition of a study option in the field of petroleum land management. A specialized program of study has been developed which features geology and petroleum engi­neering, law, accounting and management, in addition to other business administration, engineering, and arts and sciences studies. The impetus for this new study option was provided by the American Association of Petroleum Landsmen. Their educational committee representativest discussed the needs and benefits of such a study program with the Dean of the College of Business Administration. Later a faculty com­mittee considered the matter further and solicited the ad­vice of the Departments of Petroleum Engineering and Geology in regard to the proposed study program. With the affirmative vote of the College faculty in March of this •Assistant Professor of Management, The University of Texas. t M. W. Hankinson, Assistant Chief Landsman, Humble Oil and Refining Company, and J. P. McGowan, Superintendent, Land Sec­tion, Southern Region, Continental Oil Company. Mr. McGowan is also chairman of the Educational Committee of the A.A.P.L. year, the new option was made ready for catalogue listing this fall. (Inquiries relating to degree requirements or to this curriculum should be directed to the Dean, College of Business Administration, The University of Texas, Austin.) Ever since the first Bachelor of Business Administration degree was granted by this College in 1917, the faculty has been concerned with the task of assisting in the develop­ment and training of students capable of entering into the management ranks in business and industry in rapid order after graduation. It was recognized that native talent and high motivation alone are not sufficient to insure advance· ment into such positions. What is needed-in addition to the above factors-is a broad knowledge of business prac­tices and theory, combined with knowledge of the technical aspects of the industry in queston. The graduate must he able to contribute a job skill, as well as knowledge and training which will prepare him to accept broad responsi· bilities in the future. In order to develop a curriculum which would be most suitable to the needs of the dynamic industrial economy taking shape in Texas, the opinions of practical business· men were solicited, as well as the views of the faculty in other colleges. Out of these efforts and numerous faculty meetings was developed the cooperative degree program which was to be administered by the College of BusineM Administration. As originally conceived twelve years ago, this course of study combined specified work in chemistry, physics and mathematics, engineering, and business administra· lion. Other studies in the language arts and the social sciences were required to round out a total of 123 semester hours for the degree. The engineering studies were pre­dominantly in the mechanical field. It was expected that graduates would seek employment in such fields as manu· HOURS AND EARNINGS Source: Texas Employment Commission in cooperation with the Bureau of Labor Statistics, U. S. Department of Labor. Average weekly earnings Average weekly hours Average hourly earnings Mar Feb Mar Mar Feb Mar Mar Feb MarIndustry 1959* 1959 1958 1959* 1959 1958 1959• 1959 1958 ALL MANUFACT URING ············---·-· --·-··· $88.40 $87.34 $83.62 41.5 41.2 40.2 $2.13 $2.12 $2.08 Durable goods --------··-····-······---­--······­·········-·-·---·········-·--········-······--··· --­--······ 88.20 87.78 82.81 42.0 41.6 40 .2 2.10 2.11 2.06 Primary metals ·--···--··--····-···----·---········---··---·····-·· 104.00 102.75 95.52 41.6 41.1 39.8 2.5 0 2.50 2.40 Mach in ery-except electrical ········-···-----·-· ········--·-····· -·--····--­ 94.83 93.96 84.3 5 43.3 43. 1 39.6 2.19 2.18 2.13 Transportation equipment ············--··--­·--·········----····--·---------·--··-----··-----­ 103. 75 104.02 96.97 39.6 39.4 39.1 2.62 2.64 2.48 Fabricated metal products .......... ------··········-·-·-·--·······--·····--·------······-··--­ 88.83 87.16 83.84 42.3 41.7 41.l 2.10 2.09 2.04 Lumber and wood products ·····------------············-···--···-···-······-·----········-­--.. 59.21 59.15 54.31 45.9 45.5 42 .1 1.29 1.30 1.29 F urn it ure a nd fixtures ·----·······--··-·--·········--···-··········-·--·-····-··---·······-·-----­ 66.56 66.08 67.57 41.6 41.3 41.2 1.60 1.60 1.64 Stone, clay, and gl""" --···-­·--····------·--··-······--····--········--·-·······--------·---··--·-·· 70.15 67.87 65.04 41.5 40.4 40.4 1.69 1.68 1.61 Nondurable goods ------·--········--····-------·---·--·········---·········--·-········----·-····· 88.56 86.28 84.63 41.0 40 .7 40.3 2.16 2.12 2.10 Textile mill products ---··-·······-····-·--····-·········-···········-··---·-·---·------·······---··· 57.68 55.70 64.91 42 .1 42.2 41.6 1.37 1.32 1.32 Broad woven goods ----·-····-------·--······--······--····-·--···············-----·-····--··---·· 57.27 54.76 64.89 41.8 41.8 41.9 1.37 1.31 1.31 Apparel and fabric products --·----····--·····--···-······--···---··········------·--·--·­----­ 47.12 47.00 44.76 37.4 37.3 36.1 1.26 1.26 1.24 Food ................................. -----------------··········--·--·-···········-···--·····------·-···-­ 75.60 75.08 74.12 43 .2 42.9 42.6 1.75 1.75 1.74 Meat packing ····­-·---······-···---·-·--·-·---··········-········--·-···········-··---···········--· 88.78 87.94 88.01 38.6 38.4 38.6 2.3 0 2.29 2.28 Printing ---·------------·-----···--··-···--·----·········--·····-·············--·--·········-····-----······-·· 96.60 94.73 91.76 42.3 42 .1 41.9 2.2 6 2.25 2.19 Paper a nd allied products ·-················-­··················--···--·-········--··----·-·-···· 93.41 90.68 89.09 38.6 38.1 38.4 2.42 2.38 2.32 Chemical and allied products ··-···········-··----··--··········-·----··--·-····· .... 116.69 116.16 110.03 40.8 40.9 40.6 2.86 2.84 2.71 P etroleum and coal products -· ---··----··--·--·-··-·················--·-·······­·· ···-----···· 122.51 120.88 114.80 40 .7 40.7 41.0 3.01 2.97 2.80 Leather -············--···-----·---·­-·------·--·---····--··-·--······················-··---·--········--·--­NON MANUFACTURING 55.62 55.89 51.17 41.2 40 .5 41.6 1.35 1.38 1.23 Mining -···············-·--·-----··-·--···--··········································-··-----·····-·-······--······ Crude petroleum products -----····---·······-··················--··-·-·· -­------····--········ Sulphur --···--··-------------·--········--··-····------·--··----····----·····--·--·-----·------------···--····· Public Utilities ···--······------·--··--····----···--·····-----·-·--·---···-···----------------------­---····· Retail trade ·--···---·----···---······---------­···················-·····--··--·---------·-----·----···--·-----· Wholesale trade --·--···--------------···--···-----·----··----·----····--····--··--------·--··-··----------­ 112.71 114.22 113.99 84. 77 62.20 92.01 112.13 113.62 114.68 83.95 60.78 92.20 106.82 111.44 109.56 79.98 58.51 90.39 44.2 44 .1 41.3 39.8 42.6 42.4 43.8 43 .7 41.4 39.6 42.5 42.1 43.6 43.7 41.5 39.4 42.4 40.9 2.55 2.59 2.76 2.13 1.46 2.17 2.56 2.60 2.77 2.1 2 1.43 2.19 2.45 2.66 2.64 2.03 1.38 2.21 Figures do not cover pr oprietors, firm members, other principal executives, or unpaid household workers. • Preliminary-subiect to revision upon receipt of additional reports. TEXAS BUSINESS REVIEW facturing staff work, in production supervision, or in tech­nical sales. In many respects this program was similar to the pio­neering course of study developed by Professor Erwin Schell at M.I.T. in the 'twenties. This course of study is still offered by M.I.T. under the simple description, "Course 15." Student interest in the new course program at The Uni­versity developed slowly but steadily as students became aware of the opportunity to prepare themselves more ade­quately for industrial employment opportunities. Employ­ers were also slow to become fully acquainted with the program. Later they began to seek out its graduates more actively. In 1953 a coordinator was assigned to the task of bringing about a greater awareness and better understand­ing of the program, as well as to work in keeping it in tune with the needs and desires of students and potential employers. Four years ago a study committee working with the vari­ous engineering departments developed a group of engi­neering options in addition to the mechanical option. The new options provided for were in electrical, chemical and petroleum engineering. Each of these options proved to be popular with a limited number of students who had strong employment preferences in one of these fields. As with the older study options, the new petroleum land management option should prove to be popular with those students who have a strongly developed interest in the petroleum industry. One of the notable features of this new curriculum is that graduates will be eligible to participate in a two-week short course for Petroleum Landsmen immediately follow­ ing graduation. This course will be jointly sponsored by the American Association of Petroleum Landsmen and The University of Texas. Of interest to prospective students in this curriculum, and to their parents as well, is the offer of summer posi­ tions to all qualified students by the member firms in the A.A.P.L. It is anticipated that several scholarships will also be available for those students needing financial assistance. Members of the A.A.P.L. state that there are and will continue to be many excellent employment opportunities for young men upon completion of this educational pro­ gram. What type of employment opportunities can a student in this program look forward to? He will have an excellent background to become either a landsman, a management trainee with a large or small producing company, or a lease broker, for example. It is noteworthy that many oil men consider training in land office work to be one of the best access routes to administrative positions in the oil industry. Here, then, is a program of study at The University of Texas which is designed to help develop the student's abili­ ity to analyze problems, to develop workable solutions to those problems, and to familarize him with the technology of an industry in which he may choose to work. A dynamic technology requires a dynamic type of train­ing. It is fully intended that this curriculum will be main­tained to reflect the future needs of business and industry and the interests and needs of our students. Agriculture: TEXAS PRODUCES 97 % OF THE NATION'S MOHAIR By WALTER GRAY Last year Texas' more than 8,000 Angora goat raisers clipped a record-breaking 20,207,000 pounds of mohair-a 10% increase over 1957 production, and 97% of the nation's total. The total value of the 1958 Texas mohair clip was $13,741,000. This was a decrease, however, from the $15,483,000 value of the 1957 clip. Texas producers received an average of 84¢ for mohair marketed in the 1957 season (April 1957 through March 1958) , but the average price paid for mohair from April 1958 through January 1959 was 68¢, or nearly 20% lower than the average market price of the preceding year. Part of the increased production in 1958 resulted from a larger number of goats clipped (3,247,000, as compared with 3,062,000 in 1957). Another contributing factor, the result of long-range selective breeding, was a .2 pound increase in average fleece weight. The average fleece weight clipped, which has steadily increased for a number of years, was 6.2 pounds last year. The 1958 decrease in value of sales denotes the market fluctuations which have affected the industry since the end TEXAS MOHAIR PROD UCTION Production Cash receipts Goats clipped Year (thousands of pounds) (thousands of dollars) (thousands) 1948 15,184 7,273 2,956 1949 12,314 5,788 2,306 1950 12,643 9,735 2,168 1951 12,280 14,613 2,233 1952 11 ,670 11,437 2,121 1953 12,160 10,822 1,994 1954 13,997 10,218 2,233 1955 16,401 13,613 2,546 1956 17,616 14,974 2,700 1957 18,432 15,483 2,808 1958 20,207 13,741 2,864 Source: U. S. Department of Agriculture. of World War II. Limited in its uses because it is coarse and scratchy unless blended with softer fibers, mohair is classified as a specialty fiber by textile manufacturers. As such, its luster, length, strength, and dyeing qualities make it valuable in manufacturing upholstery, drapery, clothing, and carpeting materials. However, extensive use of less expensive synthetic fibers, chiefly nylon and rayon, and the changed styles which have resulted therefrom, have nearly eliminated mohair from its once primary markets, auto­mobile and furniture upholstery. (It is noteworthy that Texas leads the nation in not only mohair production, but also in output of cotton, wool, and the materials from which synthetic fibers are made-and that each of these competes strongly with the others.) Angora goats were first brought to this country from Turkey 110 years ago. Because they thrive on plants which are detrimental to the development of choice grass pastures and the production of farm crops, they were brought to the Southwest in 1853 for brush extermination purposes. At the turn of this century Angoras in the United States existed almost exclusively in the Southwest. A majority of the goats are now in the dry, rugged Edwards Plateau region of Texas, which, because of its altitude and vegeta· MAY 1959 tion, is ideal for goat raising. Of th~ other southweste~n states, only Arizona and New Mexico have Angoras m noteworthy quantities. The Angora goat has become an integral part of the economy of the Edwards Plateau region. The goats are grazed along with sheep and cattle on many of t~e s.ame ranges. Goats utilize browse, including brush, which is of little or no value to other types of livestock, and which usually hinders the growth of natural grasses. By destroy­ing or controlling such vegetation, goats improve the qual­ity of the range for other types of livestock. They thus confer a double benefit where they are run on range with sheep or cattle. But they also thrive in terrain too rough or broken to accommodate other livestock, and thus make it possible to realize value from large areas of otherwise­useless land. Much of the economic potential of an esti­mated 2,250,000 acres in the 37 counties of the Edwards Plateau would be lost without the Angoras. Most of the goat raising is carried on in the central and southern portion of the Plateau, where conditions are most suitable. The leading mohair producing counties are Ed­ wards, Gillespie, Kerr, Kimble, Mason, Real, Sutton, Uvalde, and Val Verde. As the Angora is especially resistant to disease, it re­ quires little care. External parasites are controlled by spraying or dipping the goats with insecticides. Pheno­ thiazine salt effectively controls internal parasites. The greatest threat to the Angora, especially to young or newly shorn goats, is exposure to chilling temperatures or cold rains. Goats are usually sheltered for six weeks following the shearing season. If range browse is short in the winter months or during droughts, raisers must supply feed. Roughage, oats, peanut hay, cottonseed cake or meal, or any kind of grain is fed them if the necessity arises. Also, during the kid­ ding season (March-April) mothers are usually fed and sheltered. CARLOAD SHI PMENTS OF FRUIT AND VEGETABLES Source: Co mpiled from reporl:9 recehed f'rom Agricultural Marketing Service, U.S. Department ol Agriculture January 1-March 31 Percent Commodity 1959 1958 change TOTAL SHIPMENTS ........... . 6,005 10,752 -44 VEGETABLES ........................... . 5,580 10,322 -46 Beans ....................... . 1 -100 Beets .......................... . 12 41 -71 Broccoli .................................................... . 31 46 -33 Cabbage ..................................................... . 1,078 2,113 -49 Carrots ....................................................... . 941 3,232 -71 Cauliflower ............................................... . 118 361 -67 Celery ......................................................... . 3 -100 Endives and Escarole ............................. . 7 8 -12 Greens ....................................................... . 69 88 -22 Lettuce ...................................................... . 134 186 -28 Mixed vegetables .................................. . 2,066 2,883 -28 Onions ················----····-··-··--············· ··········· 3 67 -96 P eppers ...................................................... Radishes ................................................ . 1 -100 Spinach ....................................... . 1.110 1,285 -14 Turnips and rutas ............................. . 10 + 43 FRUIT ....................................... . 425 430 -1 Grapefruit ................................................. . 216 189 + 14 Lemons ········-···········-----······--·-··-········-···-----­ 15 -100 46 42 + 10Oranges --·········-·-············-·······----················ .. 2 2 Mixed Citrus ........................................... . 161 182 -12 Strawherries -·······----·······-----······--··---·-······· •• Change is less than one-half of one percent. CARLOAD SHIPMENTS OF J,IVESTOCK • Source : Bureau of Bualnee1 Ree•rcb In cooperation '!Ith Agericult ural Marketing Service, U. S. Department of A gr1cultur P e rcent change Mar 1959 Mar 1959 Classification Mar 1959 Feb 1959 Mar 1958 from Feb 1959 from Mar 1958 Cattle TOTAL ------·--····--······----·····-----­ 3,106 2,541 1,693 1,847 8,392. 2,920 + + 83 89 8 -13 Calves ---·--···--·-···········-----······· 286 146 236 + 96 + 21 H ogs --··-··------·······-··············--· Sheep ·-----····----··-····--······----··· INTERSTATE -···­····· 0 279 2,841 0 200 1,464 235 3,158 + + 40 94 -100 + 19 -10 Cattle --····--··-·····----·······-· 2,339 1,159 2,717 +102 -14 Calves ---···--····-·····---····------····· 227 106 208 + 14 + 9 Hogs --···-----····-···---···· Sheep -····-----·--··------···-····--·--·· INTRASTATE --·-···--· Cattle -· ······-·····--·-··-·······--······ 0 275 265 202 0 199 229 188 1 232 234 203 + 38 + 16 + 7 -100 + 19 + 13 •• Calves -----· ---····--­--· ··--·------­ 59 40 28 + 48 + 111 Sheep ·-----··-·····---·········-·-··----­ 4 3 +300 + 33 • Rail-car basis: Cattle, 30 head per car ; calves, 60; hogs, 80, and sh eep, 250. • • Change is less than one-half of one percent. The Angora is clipped twice a year in Texas. The spring clipping season ordinarily begins late in .Janua~ and lasts through early April. The fall season begms late m August and lasts through September and October. . . Mohair is more similar to wool than to hair. The mohair fiber is less oily and less serrated, and has a smoother surface and greater uniformity, than wool. There are two chief types of Angora fleece, which is classified by "ringlet" type. "Tight-lock" mohair, fine and lustrous, is the most desirable type because its spinning qualities make it ".alu· able in producing fine velvets and upholstery materials. "Flat-lock" mohair is bulkier, wavier, heavier, and less lustrous than "tight-lock," and is used in correspondingly less valuable materials. The "flat-lock" fleece was once used extensively in automobile upholstery. A third type, "fluffy fleece," is so easily broken and torn on the range that its value as a marketable product is negligible. The weight, texture, and diameter of the mohair fiber is determined for the most part by tlie age and sex of tlie goat. Mohair classed as "fall kid," clipped when tlie goat is six months old, and "spring kid," clipped six months late.r, command the best prices on the mohair market because kid fiber is lighter and is finer in texture and diameter than any other. Yearling mohair, clipped at eighteen months, is more desirable than adult mohair, which all goats produce at their fourth clipping. Also, bucks produce coarser fleece than wethers, and wethers' fleece is coarser than that from does. Maximum staple length (four to six inches for one· half year's growth) is reached in the first year. At two years of age the goat will have attained its maximum pro· duction of mohair per pound of body weight; one year later, maximum fleece weight is determined. Not until the eighth year of the goat's life does its fleece attain maximum fiber diameter. The most reliable time to tell whether a goat is going to produce a good grade of mohair is at eighteen months of age; the herds are tlierefore culled of undesirable goats after their "yearling clip." The best Angora specimens are completely covered with mohair except on the lower face and legs. Their fleece will contain a minimum amount of kemp, a short, coarse, ribbon-shaped hair which grows along tlie shoulders and backbone. Kemp, which cannot be removed by combing, may cause as much as 18% loss of the mohair clip. In TEXAS BUSINESS REVIEW finished products kemp's stiff, bristle-like qualities show up all the more prominently because it rarely dyes well. Se­lective breeding in the United States has done much to minimize the number of goats producing excessive quanti­ties of kemp. This is a major reason why mohair produced in this country is of decidedly better quality than that pro­duced in the two other leading mohair producing nations, Turkey and the Union of South Africa. In the early 1920's a rapid increase in the demand for mohair was created by the expanding automobile industry. As a soft cushion formed by mohair pile fabric is not only comfortable and durable, hut allows air circulation around and under the passenger's body, practically all automo­biles manufactured in the period 1922-1942 were up­holstered with some type of mohair. At the end of World War II, reduced demand for mohair, partly as result of wartime stockpiling, sent the mohair market spiralling downward so rapidly that the existence of the industry seemed threatened. From 1945 to 1949 alone the number of goats clipped declined by 33%. In 1949 the market price of mohair averaged 47¢ per pound. The number of goats clipped annually in Texas continued to decline until 1954. The inclusion of support for mohair in the Agriculture Act of 1949 encouraged the ranchers to continue produc­tion, but it was not until 1954 that the number of goats and the yearly production of mohair began to show promise of the substantial and continued increases which have oc­curred since that time. As annual production continues to increase, and with market prices stabilized near the 70¢ government support level, it appears that the mohair in­dustry has weathered a period of serious threat to its con­tinued existence. Future market prospects for mohair are conditioned by the success of the raisers' efforts to stimulate the demand FARM CASH INCOME BY CROP RE PORTING DISTRICT, 1957, for their fiber. That it is left up to the raisers to encourage the market for their product is somewhat of an anomaly of the industry. For finer quality mohair is recognized by textile manufacturers as a fiber of superior quality which readily lends itself to the weaving process, dyes with "re­ markable clarity of color," and is a valuable content of high quality fabrics. Scarcity of mohair, however, creates no crisis for textile manufacturers because, as has already been noted, it can be replaced by cheaper synthetics. (Paradoxically, mohair cannot be so extensively substi­ tuted for synthetics.) Having little incentive to promote the production or consumption of a fiber which is of ad­ mittedly superior quality, the textile manufacturers have left the task to the Angora raisers. This spring the Texas Angora Goat Raisers Association announced a program to develop a demand for greater use of their product. Significantly greater demand, however, depends to a great extent on many market variables over which mohair producers have little or no control. Any future apparel styles predicated on fabrics resulting from experiments blending mohair with synthetics, wool, or cotton would, of course, increase the market for mohair. Otherwise, future market demands will likely expand or contract depending upon how well mohair competes with synthetics without sacrificing price. It is possible, of course, that some important new area of mohair use will be de­ veloped, but at present it appears that the most promising prospects for increased usage exist in its combination with other materials in the production of fabrics for clothing. Unless there is a reversion to pre-1940 styles in automobile or household furniture upholstery, the mohair producers will probably have to rely chiefly on the use of mohair in new fabrics if they are to succeed in significantly stimulat­ ing demand for their product. AND BY CROP REPORTING DISTRICT AND CO.lllllODITY, 1958 Commodity 1-N 1-S 2 • 6 6 7 8 9 10 10-A Total Value (thoua&nda of dollars) 1957 Total• ---------------­-------­------377,099 342.997 199,449 115,100 245,049 163,747 81,250 94,803 227,036 146,022 89,305 137,089 2,294,139 1958 Totalt----··-··········-··--------·­248,027 211 ,474 116,103 101.037 204.860 157, 122 69,252 89,075 185,099 122,650 78,710 100,764 1,734,765 Percent change -----·-·-······ + 52 + 62 + 72 + 14 + 20 + 4 + 17 + 6 + 23 + 19 + 13 + 36 + 32 TOTAL CROPS ····-···-­280,042 323,618 144 ,178 32,903 126,743 41,309 52,395 18,485 110,587 103 ,733 39,946 127,065 1,467,267 Cotton ·----------· ·------··-------­--­---­ 83,384 237,268 82,855 463 63,892 13,347 45,194 2,775 39,842 23,522 3,898 64,289 660,729 Cottonseed ·-·--·-­··-··---·-----------· 10,518 29,928 10,451 58 8,059 1,683 5,701 350 5,025 2,967 492 8,109 83,341 Wheat -········­·-·------·······-·····-­-·· 96,628 2,777 30,236 6,357 8,593 1,549 146,140 Oats ----··· ·-­·······-----·-··-············· 113 113 2,825 1,808 4,63 1 339 1,130 339 11 ,298 Corn ·--···----·--······--·--------------··-· 1,567 522 261 8,619 4,179 261 7,574 1,567 1,045 522 26 ,117 Grain sorghum ----------·········· 84,832 51,842 16,495 2,356 18,851 4,713 32,990 7,069 7,069 9,426 235 ,643 Flaxseed ···········--­- 16 737 43 87 2 885 Hay ·-·--···--·-----··-·····----------------­ 731 487 609 1,096 4,261 1,827 365 487 1,340 609 122 244 12 ,178 Peanuts ··-·--·----·--······--·-·--------­ 367 16,873 4,035 3,668 2,568 4,035 367 4,769 36,682 Rice ---­······--·----------·-··--------·--·-­ 2,3ll 8,721 63,505 74,537 Fruit and vegetables ----­-- 9,984 4,084 22 ,464 44,473 ll3,454 Other cropst --······--------------··­ 66,263 TOTAL LIVESTOCK AND 2,269 681 340 3,631 5,786 13,9;;5 1,135 4,652 POULTRY PRODUCTS --­ 97,057 19,379 55,271 82,197 ll8,306 122,438 28,825 76,318 ll6,449 42,284 49,359 10,024 826,872 Cattle ----------··----·-----·-··-··----­---­ 70,970 8,368 25,103 37,500 32,231 22,314 13,636 21.384 31,611 14,876 27 ,273 4,649 309,915 Calves --··········------···-··­-···--·---·­ 16,618 4,233 17,402 16,305 22,105 18,029 3,919 13,169 21,635 9,720 12,072 1,568 156,775 Hogs ................ ------·········--·----­ 2,665 1,607 1,881 3,371 7,997 6,663 744 3,174 7,917 1,450 l ,4ll 314 39,194 Sheep and Jambs ----··-·­·------­ 404 311 1,135 995 995 47 2,192 8,829 404 31 202 15,545 Wool ·--­--·····--···-· ···················-­ 141 335 1,339 881 l ,021 2,131 ll,077 511 176 17,61 2 Mohair ·····-·----------·-··--········-·-·­ 17 388 2,462 1,451 51 742 10,457 1,080 186 34 16,868 Poultry ........... -----------············ 429 343 944 2,232 13,132 44 ,973 86 1,631 18,968 2,4 03 514 172 85 ,827 Eggs -----····--·--··-· --------············· 2,357 2,660 3,143 5,138 12,633 7,556 543 4,050 16,380 3,506 1,390 1,088 60 ,444 Milk a nd milk products ...... 3,473 1,505 3,936 13,313 26,741 22,805 4,862 2,547 17,943 10,3 03 6,135 2,199 115,762 Other croPBt--------­-----------------­ 8,930 All district breakdowns and 1958 commodity figures are Bureau of Business Research estimates ; all other totals are U. S. Department of Agri­culture data. • Does not include $112,667 received in payments to farmers by the U. S. Government. t Does not include $122,118 received in payments to farmers by the U. S. Government. t District totals do not add to grand totals because they include only the major crops listed and exclude other miscellaneous crops and livestock Products which were not assigned to districts due to the lack of a reasonable basis for distribution. Local Business Percent changePercent change Mar. 1959 Mar. 1959 March from from Mar. 1959 Mar. 1959 March from from City and Item 1969 Feb. 1959 Mar. 1958 City and Item 1959 Feb. 1959 Mar. 195& BAY CITY (pop. 14,042r)ABILENE (pop. 62,500r) Postal receipts• .......................................... $ 10,470 + 9 + 24 Retail sales Bank debits (thousands) ........................ $ 10,879 + 6 + General merchandise stores --·······-----·-+ 24 + End-of-month deposits (thousands) t .. $ 19,835 + 12 Postal receipts• ....... . ..................... $ 103,708 + 2 + 20 Annual rate of deposit turnover ........... . 6.6 + 10 4 Building permits.le ss federal contracts $ 2,554,431 + + 121 Bank debits (thousands) ........................ $ 98,004 + 5 + 13 End-of-month deposits (thousands) t....$ 63,508 1 + 6 BAYTOWN (pop. 28,945r) Annual rate of deposits turnover ....... . 18.5 + 6 + Postal receipts• .... . ....................... $ 22,635 + 4 + 25 Employment (area) ................................. . 31,850 .. + 4 Building permits, less federal contracts $ 631,174 +238 + 82 Manufacturing employment (area) ... . 3,450 + + 10 Bank debits (thousands) ........................ $ 21,997 + -3 Percent unemployed (area) ......... . 4.8 13 -20 End-of-month deposits (thousands) t ....$ 24,931 -3 -17 Annual rate of deposit turnover ........... . 10.4 10 + 12 Employment (area) ................................. . 473,500 + + 3 ALPINE (pop. 5,261) Manufacturing employment (area) ... . 93,900 + 1 -1 Postal receipts• .......................................... $ 4,629 + 15 + 17 Percent unemployed (area) .................. . 5.4 8 -18 Bank debits (thousands) .......................... $ 2,968 + 24 + 35 End-of-month deposits (thousands) t ....$ 3,588 -9 -8 BEAUMONT (pop. 122,485r) Annual rate of deposit turnover .... 9.5 + 34 + 42 Retail sales ................................................ . + 41 + 20 Aparel stores ........................................... . + 48 •• Automotive stores + 40 + 27 AMARILLO (pop. 125,049r) Eating and drinking places ............... . + 12 Retail sales ................................................. . + 10 + 40 Food stores ............................................. . + 5 Apparel stores ................................. . + 11 + 15 Furniture and household Automotive stores ................................... . + 10 + 61 appliance stores .... + 1 + Drug stores ............................................. . + 6 •• General merchandise stores ................. . + 44 + Eating and drinking places ............... . + 15 + 9 Lumber, building material, Food stores ...... . ......................... . s + •• and hardware stores ....................... . + 85 + 42 Furniture and household Postal receipts• ......................................... $ 113,606 + 10 + 24 appliance stores ---------························· -16 + 22 Building permits, less federal contracts $ 1,102,157 -19 -23 Liquor stores ................ -----·· ----------·-··----·· + 6 + 11 Bank debits (thousands) ........................ $ 157' 721 + 10 + Lumber, building material End-of-month deposits (thousands) i ...$ 104,270 4 and hardware stores ····----------------···· + 38 + 55 Annual rate of deposit turnover ....... . 17.8 + 11 + Postal receipts• ........................................ $ 171,153 + 4 + 19 Employment (area) ... ............................. . 87,600 + 5 Building permits, less federal contracts $ 2,091,595 -6 -27 Manufacturing employment (area) 26,610 + 20 Bank debits (thousands) ...................... $ 221,993 + 13 + 23 Percent unemployed (area) ................... . 11.3 -3 + 24 End-of-month deposits (thousands ) t .. $ 115,859 + + 8 Annual rate of deposit turnover ........... . 23.2 + 17 + 15 BEEVILLE (pop. 15,I05r) Employment (area) ................................. . 50,700 + 1 + 4 Retail sales Manufacturing employment (area) ... . 5,810 + 2 + Lumber, building material, Percent unemployed (area) ................. . 4.1 -11 -52 and hardware stores + 27 + 12 Postal receipts• .......................................... $ 11,684 + 23 + 32 ARLINGTON (pop. 45,340r) Building permits, less federal contracts $ 100,485 +103 +108 Bank debits (thousands) ........................$ 9,279 + 2 + 13 Postal receipts• .........................................$ 34,728 + 9 + 52 End-of-month deposits (thousands) t....$ 13,726 + 2 +Building permits, less federal contracts $ 1,925,909 +123 +213 Annual rate of deposit turnover ......... . 8.2 5 Employment (area) ................................ . 194,000 + + 1 + Manufacturing employment (area) .. 54,925 + -1 Percent unemployed (area) .................. 5.7 -21 BIG SPRING (pop. 30,433r) Retail sales Apparel stores .... + 55 + 10 AUSTIN (pop. 197,000r) Lumber, building material, and hardware stores ...................... . + 54 + 68 Retail sales --·-·········································· + 22 + 19 Postal receipts• .......................................... $ 25,737 + 8 + 39 Apparel stores + 42 + 20 ········································ Building permits, less federal contracts $ 162,150 + 58 -51 Automotive stores .... + 37 + 38 Drug stores ................................... + 6 -2 Eating and drinking places ................ + 8 + 15 BRADY (pop. 5,944) Furniture and household Postal receipts• ........................................ $ 4,778 + 25 + 26 appliance stores .................................. + 11 + 11 Building permits, less federal contracts $ 6,775 -27 -25 Gasoline and service stations ............ + 32 + 16 Bank debits (thousands) ........................ $ 4,692 + 19 + 11 Lumber, building material, End-of-month deposits (thousands) t....$ 6,988 + + and hardware stores + + 56 8.1 + ...... 21 Annual rate of deposit turnover ....... Postal receipts• .......................................... $ 344,688 + 3 + 27 Building permits, less federal contracts $ 4,811,817 6 + 50 BRENHAM (pop. 6,941) Bank debits (thousands) ........................ $ 207 ,231 + 10 + 9 Postal receipts• ..................................$ 9,396 + 37 + 47End-of-month deposits (thousands) L ..$ 154,094 + 1 + 17 Building permits, less federal contracts $ 70,650 +133 +135 Annual rate of deposit turnover ............ 16.2 + 7 + 9 Bank debits (thousands) ........................ $ 7,741 + 22 + 11 Employment (area) ································ 71,600 + + 2 End-of-month deposits (thousands) L .. $ 12,698 -1 +5,540 1 2 Manufacturing employment (area) .... + + Annual rate of deposit turnover ....... . 7.3 + 14 + 24 Percent unemployed (area) .................. 4.0 2 -13 For explanation of symbols, see page 23. TEXAS BUSINESS REVIEW Conditions Percent change Percent change Mar. 1959 Mar. 1959 Mar. 1959 Mar. 1959 March from from March from from City and Item 1959 Feb. 1959 Mar. 1958 City and Item 1959 Feb. 1959 Mar. 1958 BROWNSVILLE (pop. 36,066) DALLAS (pop. 641,000r) Retaii sales ................................. . Automotive stores ............... . + 20 + 28 + 22 + 36 Retail sales Apparel stores + 10 + 48 + 10 + 20 Lumber, building material, and hardware stores Postal receipts• ........................................ $ Building permits, less federal contracts $ 30,463 223,883 + 22 + 1 + 60 + 7 + 29 +372 Automotive stores Eating and drinking places Florists .......................................... . Food stores ............... . + 6 + + 24 + 6 + 18 •• + 28 -9 Furniture a nd household BROWNWOOD (pop. 20,181) Retail sales ................................. . Apparel stores Automotive stores ................. . + 54 + 58 + 56 + + 27 -11 appliance stores ........... . Gasoline and service stations General merchandise stores .... Jewelry stores 2 + 18 5 + 24 + 18 + •• Furiture and household Liquor stores ........ ................ . + 7 + 28 appliance stores Building permits, less federal contracts $ 261,496 + 26 +2923 + 19 +1869 Lumber, building material, and hardware stores + 28 + 47 Bank debits (tnousands) ............. . ... $ End-of-month deposits (thousands) t ....$ Annual rate of deposit turnover ...... . 13,679 13,163 12.6 + 11 + 1 + 13 + 35 + 9 + 25 Office, store, and school supply dealers P os