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Economic Report

or the President

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Economic Report

of the President

TRANSMITTED TO THE CONGRESS

JANUARY 20, 1959

UNITED STATES -GOVERNMENT PRINTING OFFICE

WASHINGTON : 1959


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LETTER OF TRANSMITTAL

THE WHITE HOUSE,January 20, 1959.

To the Congress of the United States:I present herewith my Economic Report, as required by Section 3(a)

of the Employment Act of 1946.In preparing this Report, I have had the advice and assistance of the

Council of Economic Advisers. I have also had the advice of the heads ofexecutive departments and independent agencies of the Government. I setforth below, largely in the language of the Report itself, what I consider tobe its salient conclusions and recommendations.

Economic Recovery in 1958

When the Economic Report was submitted to the Congress in January1958, a contraction in production and employment that had started somesix months earlier was still under way. The decline proved to be sharperthan the 1953-54 recession, but it did not last as long. A recovery beganin May 1958, and by the end of the year most of the ground lost had beenregained. Gross national product, our broadest measure of the Nation'soutput of goods and services, was at an annual rate of $453 billion in thefourth quarter of the year. In dollars of constant purchasing power, thiswas almost equal to the highest output attained in the pre-recession period.Nearly a million more people were at work in December 1958 than in July,after allowance for seasonal changes. Although the number of persons un-employed was above 4 million in December, it was 1 million below the highestunemployment figure reached during the recession. Wage and salary incomeand consumer spending were at an all-time high, and the index of consumerprices had been virtually stable for six months, although about 2 percenthigher than a year earlier.

Economic Policies in 1957-58

The events of the last 18 months show again the considerable capacityof our economy to resist contractive influences and to hold a downturnwithin fairly narrow limits.

Many factors contribute to this capacity. Chief among them are theindustry and resourcefulness of our people, the strength and resiliency of ourfree competitive institutions, and the continuing operation in the Americaneconomy of powerful forces making for long-term growth.

Also of importance are features of our economic system that moderatethe impact of contractive influences on personal income, and thus help to

in


maintain demand. Increasingly, our people work in industries and occu-pations that are not readily affected by moderate economic declines. Andsuch reductions in income as do result from lower production and employ-ment are offset, to a considerable extent, by supplementary payments, not-ably by those made under the Federal-State system of unemploymentinsurance.

Governmental actions also played an important role in moderating therecession and helping to bring about a prompt and sound recovery. Mone-tary and credit policies were employed vigorously to assure ample suppliesof credit. Legislation was enacted to lengthen temporarily the period ofentitlement to unemployment benefits. Numerous actions were taken tospur building activity. Steps were taken to accelerate Federal constructionprojects already under way and to speed up projects supported by Federalfinancial assistance. Activities under a number of Federal credit programs,in addition to those in the housing field, helped counter the recession. Andthe acceleration of defense procurement, which was being undertaken inline with national security policy, exerted an expansive effect.

The 1957-58 recession shows that the major emphasis of Federal policiesto counteract an economic downturn should be placed on measures thatwill act promptly to help shift the balance of economic forces from con-traction to recovery and growth. Though an effective contribution can bemade by the acceleration of public construction projects already under way,little reliance can be placed on large undertakings which, however usefulthey may be in the longer term, can be put into operation only after anextended interval.

The 1957—58 experience is also a reminder that there is no simple pre-scription for corrective action which can be applied with only minor varia-tions in every business downturn. It emphasizes the importance, in asituation in which powerful corrective forces are at work, of avoiding hastyand disproportionate actions, such as tax reductions that needlessly endangerthe prospects of future fiscal balance and prejudice the orderly revision ofthe tax structure.

As production, employment, and income moved upward in 1958, theeconomic policies of Government became increasingly concerned with keep-ing the recovery on a sound basis and promoting a sustainable long-termexpansion. Monetary and credit policy was shifted with a view to limitingthe expansion of bank credit to a sustainable pace. The large financing op-erations of the United States Treasury are being conducted with a view toenhancing the basic stability of our financial system and promoting soundeconomic growth. And the fiscal operations of Government are moving inthe direction of restoring a balance between outlays and incomes and therebycountering potential inflationary tendencies.

The Economic Outlook

As 1959 opens, there is reason for confidence that the improvementin business activity which began in the second quarter of last year will

rv


be extended into the months ahead. Factors that influence decisionson business capital outlays have become more favorable, and an upturnin these expenditures may already be under way. Residential constructionoutlays should contribute further to economic expansion, especially if favor-able action is taken by the Congress on recommendations made in theReport to provide a steadier and more assured flow of private funds intomortgages. Sales of United States products in foreign markets may increaseas the pace of business activity abroad quickens and the trade position ofprimafy producing countries is improved. The combined outlays of Fed-eral, State, and local government units will continue to rise. Under theimpact of these developments, the liquidation of inventories should sooncome to an end; indeed, the gap between current sales and stepped-upproduction schedules may already have been closed. The effect of thesefavorable factors on employment and income can be expected to enlargethe markets for consumer goods and thereby to reinforce the conditionsmaking for over-all economic expansion.

A Program for Economic Growth with Stable PricesOur objective must be to establish a firm foundation for extending eco-

nomic growth with stable prices into the months and years ahead. This willnot come about automatically. To attain our goal, we must safeguard andimprove the institutions of our free competitive economy. These are basicto America's unassailable economic strength. We must wage a relentlessbattle against impediments to the fullest and most effective use of ourhuman and technological resources. We must provide incentives for theenlargement and improvement of the facilities that supplement humaneffort and make it increasingly productive. Finally, an indispensable con-dition for achieving vigorous and continuing economic growth is firm con-fidence that the value of the dollar will be reasonably stable in the yearsahead.

Action to meet these challenges is required on many fronts, by all groups inour society and by all units of government.

The individual consumer can play an important part by shopping care-fully for price and quality. In this way the American housekeeper can bea powerful force in holding down the cost of living and strengthening theprinciple that good values and good prices make good business.

Businessmen must redouble their efforts. They must wage a ceaselesswar against costs. Production must be on the most economical basis pos-sible. The importance of wide and growing markets must be borne in mindin setting prices. Expanding markets, in themselves, promise economiesthat help keep costs and prices in check.

Leaders of labor unions have a particularly critical role to play, in viewof the great power lodged in their hands. Their economic actions mustreflect awareness that the only road to greater material well-being for theNation lies in the fullest realization of our productivity potential and thatstability of prices is an essential condition of sustainable economic growth.


The terms of agreements reached between labor and management inwage and related matters will have a critical bearing on our success inattaining a high level of economic growth with stable prices. It is notthe function of Government in our society to establish the terms of thesecontracts, but it must be recognized that the public has a vital interest inthem. Increases in money wages and other compensation not justifiedby the productivity performance of the economy are inevitably inflationary.They impose severe hardships on those whose incomes are not enlarged.They jeopardize the capacity of the economy to create jobs for the expand-ing labor force. They endanger present jobs by limiting markets at homeand impairing our capacity to compete in markets abroad. In short, theyare, in the end, self-defeating.

Self-discipline and restraint are essential if reasonable stability of pricesis to be reached within the framework of the free competitive institutionson which we rely heavily for the improvement of our material welfare. Ifthe desired results cannot be achieved under our arrangements for deter-mining wages and prices, the alternatives are either inflation, which woulddamage our economy and work hardships on millions of Americans, or con-trols, which are alien to our traditional way of life and which would be anobstacle to the Nation's economic growth and improvement.

The chief way for Government to discharge its responsibility in helpingto achieve economic growth with price stability is through the prudentconduct of its own financial affairs. The budget submitted to the Con-gress for the fiscal year 1960, which balances expenditures with receiptsat a level of $77 billion, seeks to fulfill this responsibility. If Govern-ment spending is held within the limits set in the proposed budget, thegrowth of our economy at the rate that may be expected would make itpossible in the reasonably foreseeable future to provide, through a signifi-cant further step in tax reform and reduction, added incentives and meansfor vigorous economic growth and improvement.

Governmental actions in other areas can also help to maintain price sta-bility as our economy expands. The Congress will be requested to amendthe Employment Act of 1946 to make reasonable price stability an explicitgoal of Federal economic policy, coordinate with the goals of maximumproduction, employment, and purchasing power now specified in that Act.Steps will be taken within the Executive Branch to assure that governmentalprograms and activities are administered in line with the objective ofreasonable price stability, and programs for the enlargement and improve-ment of public information on prices, wages and related costs, and produc-tivity will be accelerated.

The many continuing programs of Government that promote the ex-pansion and improvement of our economy will be administered vigorously.Also, new legislation will be requested to strengthen competitive forces, toenhance personal welfare, to promote integrity in labor-management re-lationships and to foster better industrial relations, to assist local areas

VI


experiencing heavy and persistent unemployment, to make more effectiveuse of the large Federal expenditures relating to agricultural price support,to promote conditions favorable to trade among nations, and to assist inthe economic growth and development of the Free World.

Favorable consideration of these legislative proposals by the Congresswill materially help to achieve the goals of vigorous, orderly, and sustain-able economic progress within a framework of reasonable price stability.

All of our people, in view of their broad common interest in promotingthe Nation's economic strength, can fully support this program.

DWIGHT D. EISENHOWER.

VII


CONTENTS

Page

CHAPTER 1. The Lessons of Recession and Recovery in 1957-58. . . 1The Economy's Capacity To Resist Recession 1Policy Implications of Differences Among Economic Cycles . . . . 3Achieving Vigorous and Sustainable Economic Growth 4

CHAPTER 2. Economic Developments in 1958 and Outlook for 1959 . 7Extent of the Decline 7Major Factors in the Decline 10Resistance to Contraction 14Prices and Costs 17Resumption of Economic Expansion 20Developments in World Production and Trade 27Outlook for 1959 30

CHAPTER 3. Economic Policies in 1958 33Policies During the Contraction 33

Money and Credit 33Housing and Home Financing 37Unemployment Insurance Benefits 40Defense Procurement 40Civil Procurement and Construction 41Acceleration of Grants-in-Aid and Tax Refunds 41Federal-Aid Highway Program 42Federal Credit Programs 42Federal Fiscal Operations 42

Policies After the Upturn 44CHAPTER 4. A Program for Economic Growth With Price Stability. 48

A Balanced 1960 Budget 49Other Governmental Financial Policies 51Additional Governmental Actions To Maintain Price Stability. 52Additional Measures for Economic Growth 53

Competition 53Small Business 54Personal Welfare 55Area Assistance 56Agriculture 56Foreign Economic Policy 57

IX


CHAPTER 4—Continued PageContinuing Programs for Economic Growth and Improvement. 59

Education 60Personal Security and Health 60Construction and Transportation 61Water Projects and Mineral Exploration 62Research and Development 63

APPENDIXES

A. Summary of Recommendations in the Economic Report of thePresident 65

B. Report to the President on the Activities of the Council ofEconomic Advisers During 1958 71

C. Some Major Economic Developments in 1958 79I. Employment and Earnings 81

II. Prices 91III. Agriculture 98IV. Financial Developments 106V. Government Finances 114

VI. United States Foreign Trade and Payments 122D. Statistical Tables 133

LIST OF TABLES AND CHARTS

(Chapters 2 and 3 and Appendix C)Tables1. Duration and Extent of Declines in Selected Economic Indicators. 72. Changes in Income ahd Consumption in Recessions 163. Obligations and Payments on Federal-Aid Highway Programs,

1957-58 ' . . . . . " 4 24. Federal Budget Receipts and Expenditures, Fiscal Years 1957-60. 43C-l. Changes in Nonagricultural Employment Since December

1956 82C-2. Civilian Employment, by Major Occupational Group, 1947,

1957, and 1958 83C-3. Insured Unemployment Under State and Federal Employee

Programs, April 1957 and April 1958 86C—4. Index of Average Hourly Earnings, Adjusted for Overtime

and Inter-Industry Employment Shifts, Selected Periods,1948-58 88

C-5. Distribution of Employees Receiving Wage Increases UnderMajor Labor Agreements, 1956-58 89

C—6. Changes in Wholesale Price Indexes Since June 1955 95


Tables Page

C-7. Changes in Consumer Price Indexes Since July 1957 96G-8. Price Changes in the United States and Selected Other Indus-

trial Nations, 1953 to 1957 97C-9. Number of Farms and Average Income of Farm Families,

1947 and 1952-56 99C-10. Meat and Poultry: Prices, Receipts, Production, and Con-

sumption, 1952-58 101C-ll. Net Budget Expenditures for Agricultural Programs, Fiscal

Years 1953-60 103C-12. Wheat: Production, Utilization, and Carryover, 1952-58.. 103C-13. Feed Grains: Production, Utilization, and Carryover,

1952-58 104C—14. Changes in Short- and Intermediate-Term Consumer Credit

Outstanding, 1955-58 107C-15. Net Changes in Commercial Bank Holdings of Loans and

Investments, 1955-58 110C-l 6. Net Changes in Ownership of the Publicly Held Federal Debt

During 1958 110C-l 7. Flow of Funds for Selected Nonbank Financial Institutions,

1955-58 I l lC-l8. Federal Budget Expenditures, 1957-60 114C-l 9. Relation Between the Federal Budget Surplus or Deficit,

Receipts from and Payments to the Public, and Changein the Public Debt, 1953-59 117

C-20. Consolidated Cash Statements of Federal and State andLocal Governments, 1953-58 119

C-21. Government Receipts and Expenditures as Shown in theNational Income Accounts, 1957-58 120

C-22. United States Balance of Payments, Selected Periods,1952-58 122

C-23. Exports of the United States and Other Countries, 1956-58 . . 123C-24. Change in United States Exports, 1956 to 1958 124C-25. Change in United States Imports, 1956 to 1958 126C-26. Use of Gold and Dollars for International Settlements,

Selected Periods, 1952-58 130

Charts

1. Changes in Major Sectors of the Nation's Output, Third Quarter1957 to First Quarter 1958 8

2. Changes in Major Sectors of the Nation's Output, First Quarter1958 to Fourth Quarter 1958 9

3. Manufacturing Capacity, Production, and Prices 114. Consumer Prices on a Prewar Base 175. Consumer Prices on a Recent Base 186. Wholesale Commodity Prices 19

XI


Charts Page

7. Employment in Nonagricultural Establishments 218. Employment, Hours, and Earnings in Manufacturing 239. Employment, Production, and Income 2410. Foreign Industrial Production 2811. World Trade 2912. Interest Rates and Bond Yields 3413. Member Bank Reserves 3514. Money Supply 3715. Housing Starts and Requests for Federal Underwriting 3916. Federal Government Receipts and Expenditures, National In-

come Accounts 4317. Stock Prices and Credit 45

XII


Chapter 1

The Lessons of Recession and Recovery in 1957-58TTTTHEN THE ECONOMIC REPORT was submitted to the Congress

* * in January 1958, the American economy was in a recession that hadstarted about six months earlier. The decline was still moderate, but itwas gaining momentum and spreading to additional areas of the economy.The Economic Report gave an account of the recession as it had developedto the turn of the year, and expressed the view that the underlying strengthand regenerative powers of our free competitive system, supported byappropriate private and public policies, might be expected to bring thedecline to an end soon and to restore the economy to an upward path. Therecession did, in fact, halt in April 1958. By May, a recovery was underway; and before many months had passed, most of the ground lost duringthe decline had been regained. As 1958 ended, we were moving towardnew high levels of production and employment.

The present Economic Report therefore reviews the greater part of afull economic cycle. Chapter 2 describes the extent of the contractionand how it started, what helped to keep it within narrow limits, howrecovery began and developed, and what the economic situation was at theend of the year. Chapter 3 summarizes the Government actions that helpedto shorten the decline, to reduce the severity of its impact, and to promotea sound recovery. And Chapter 4 proposes a program for promotingeconomic growth on a sustainable, inflation-free basis.

These major divisions of the Report are-presented in fulfillment of theexplicit requirements of the Employment Act of 1946. But it is useful alsoto consider what broad lessons may be learned from the events of the pastyear and a half as guides for the future. What do these events tell usabout how our economy responds to contractive influences, about the rolethat Government can usefully play in seeking to moderate economic fluctua-tions, and about the problems that Americans must face in the years aheadin striving to achieve high and sustainable rates of economic growth,unmarred by inflation? These questions are treated in the present chapter.

THE ECONOMY'S CAPACITY TO RESIST RECESSION

In many respects, the most important lesson taught by the recent recessionis that a competitive economic system has remarkable power to resist con-tractive pressures and, without an extended interruption of growth, to stage


a good recovery. The inherent features of our economy that make thispossible—its strength and resiliency—are due mainly to our free competitiveinstitutions, to the stability of our institutions of saving, banking, and finance,and to the character of our people, notably their industry and resourcefulnessand their capacity to take a confident and balanced view of the Nation'seconomic prospects. Other sources of strength are due to certain long-term,structural changes in our economy—which have resulted in growing per-centages of American workers being employed in industries and occupationsnot readily affected by an economic downturn—and to certain changes inbusiness practices, notably long-term planning for the enlargement ofoperations.

Our economy is also aided in resisting recession by features that tend tomoderate the impact of a decline in economic activity on the flow of incometo individuals and thus on the volume of spending for consumption. Themost important of these is the Federal-State unemployment insurance system,under which payments are made to individuals out of work. In addition,our system of graduated personal income taxes cushions the impact of anover-all decline in income on the amounts available for spending on consumergoods and for savings.

These features of our economy, which were clearly evident in the 1957-58recession, have certain implications for public policy that are worthy ofspecial note. First, the capacity of our economy to withstand contractiveinfluences provides time for regenerative processes to make the adjustmentsneeded for sound recovery, and for the counteractive measures taken byGovernment, jointly with factors making for long-term growth, to maketheir effects felt. Where necessary, efforts should be made to strengthenthese features of our economic system.

Second, the major emphasis of Federal countercyclical policy should beplaced on measures that will result in prompt action to help promote a shiftin the balance of economic forces from contraction to recovery and growth.Though a useful contribution can be made by the acceleration of publicworks projects that are already under way or are ready to be started, littlereliance can be placed on large undertakings which, however useful theymay be in the longer term, can be put into operation only after an extendedinterval of planning. By the time they are fully under way, they may exertexcessive demand on an economy that has already recovered.

Third, in contrast to large-scale public works, monetary and credit policy,used vigorously, can produce prompt and significantly helpful results.Although the easing of credit does not affect all parts of the economy to thesame degree, it works broadly, is promptly reversible, and makes its impactfelt without entailing direct governmental intervention in the affairs ofbusiness concerns and individuals.

Finally, the capacity to resist short-term fluctuations can be increased byGovernment actions to strengthen the factors that make for long-termeconomic growth—vigorously competitive markets, research and develop-


ment activity, and heightened incentives for all Americans to work, save,and invest. It is on these factors that we depend most heavily for the thrustthat lifts the economy from recession to recovery and for the stimulus tocontinuing economic expansion and improvement.

POLICY IMPLICATIONS OF DIFFERENCES AMONG ECONOMIC CYCLES

Although all economic cycles have certain common characteristics, eachis unique in character and follows a course that varies in significant respectsfrom its predecessors. These distinctive characteristics must be taken intoaccount when governmental policies intended to help reverse a recessionarytrend are formulated.

The need to do this was especially evident in the 1957—58 recession. Ithad been preceded by a major expansion in productive capacity withouta corresponding increase in utilization, so that when the downturn beganthere was ample, if not temporarily excess, capacity in a number of importantindustries. In contrast, the expansion of capacity prior to the 1953 down-turn had been matched by a roughly equivalent increase in production.Similarly, the American consumers' requirements for a broad range of goodswere more nearly satisfied when business activity turned down in 1957 thanthey had been when activity began to recede in 1953. Sales of automobilesreached an exceptionally high level in 1955, aided by a sharp easing ofinstalment credit terms. In 1953-54, production of Western Europeannations was expanding rapidly, world commodity prices were relativelystable, and international trade was continuing to rise. In 1957-58, onthe other hand, industrial activity in Western Europe tended to level off,commodity prices weakened, and international trade turned downward forthe time being.

These differences naturally affected the character and extent of the recentdecline. Business expenditures for new plant and equipment, which hadfallen only 11 percent in 1953-55, dropped 22 percent in 1957-58. Totalconsumer expenditures were virtually stable in both periods; but in the ninemonths following the 1957 peak, automobile production fell 47 percent,compared with an 11 percent decline following the economic downturn in1953. Merchandise exports, which had increased 18 percent in 1953-54,fell by about that amount in the 1957-58 recession.

But from the viewpoint of public policy, the most significant differencebetween the two periods was in Federal fiscal operations. In the threequarters following the 1957 peak of activity, Federal purchases of goodsand services increased $1 billion, measured on an annual rate basis; inthe comparable period of 1953-54, they fell $6 billion, largely as a resultof the termination of the Korean conflict. This critical difference wasaccentuated by the fact that, although State and local government purchasesof goods and services were rising in both recessions, they rose more in 1957-58than in 1953-54. It was clear in January 1958 that even without a generaltax reduction the fiscal operations of the Federal Government would have


a significantly more expansive effect on the economy than they had hadduring the 1953-54 recession, notwithstanding the tax cut of $7.5 billionin early 1954. As it turned out, the economy received an even largerstimulus from Federal fiscal operations in the fiscal year 1958 than had beenexpected at first. And this effect has been intensified in the fiscal year 1959.

These facts are a reminder that there is no single prescription for correctiveaction which can be applied with only minor variations in every cyclicalepisode. They emphasize the importance, in a situation in which powerfulcorrective forces are already at work, of avoiding hasty and disproportionateactions, such as tax reductions that needlessly endanger the prospects offuture fiscal balance and prejudice the orderly revision of the tax structure.Clearly, the distinctive features of a downturn are pertinent not only to anappraisal of the probable course of business activity as contraction developsbut also to the design of measures to help stem the downturn and promoterecovery.

ACHIEVING VIGOROUS AND SUSTAINABLE ECONOMIC GROWTH

We may justifiably take satisfaction in the increases already achieved inemployment, production, and incomes and in the. fact that the price level hasbeen reasonably steady of late.

Our objective now must be to establish a firm foundation for extendingthis economic advance and price stability into the months and years ahead.But this will not come about automatically. On that point, history is clear.Action is required on many fronts, by all groups in our society, and by allunits of government.

First, we must zealously safeguard and improve the institutions of ourfree and competitive economy. America's unassailable economic strengthderives in no small measure from the fact that over the years there havebeen incentives and freedom to do new things and to challenge old andestablished ways. Our strength comes in large part from the pressures whichthis competition entails, pleasures to shelter groups from these pressuresand from the need to make the readjustments that they compel come at thecost of limiting our capacity to grow.

Second, a high rate of growth in our economy requires that we wage arelentless battle against impediments to the full and most effective use ofour human and technological resources. Such impediments curb the pro-ductivity of our work force and increase production costs. They raise theprices of the things we buy and limit the success of our efforts to lift levelsof living.

Third, if we are to achieve a rapid rate of economic growth and improve-ment in the years ahead, we must continue to enlarge and improve the plantand equipment that supplement human effort and make it increasinglyproductive. There must be strong incentives for businesses to commit everlarger sums for expanding their operations and reducing their costs. Andthere must also be incentives for the thrift essential to the financing of these


critically important outlays. Policies that weaken these incentives will causeus to fall short of achieving our full potential for expansion.

Finally, an indispensable condition for achieving vigorous and con-tinuing economic growth is firm confidence that the value of the dollarwill be reasonably stable in the years ahead. In recent months, pricesgenerally have moved within a narrow range, and some of the price increasesearly in the year were the result of temporary conditions, such as the effect ofadverse weather on food supplies. But these facts provide no basis for com-placency regarding the long-term problem of maintaining reasonably stableprices. Despite recession during the first part of the year, wage ratescontinued to move upward. The rate of increase was nearly as greatas in periods of economic expansion, and higher than the rate at whichgains in productivity have been achieved in our economy over extendedperiods of time. Obviously, if we have only limited success in restrainingincreases in unit costs during recession, much remains to be done to achievea basis for holding prices reasonably steady when productive capacity ismore fully utilized. To this challenge everyone must respond.

The individual consumer can play an important part by shopping carefullyfor price and quality. In this way, the American housekeeper can be apowerful force for holding down the cost of living and strengthening theprinciple that good values and good prices make good business.

Businessmen must redouble their efforts. They must wage a ceaselesswar against costs. Production must be on the most economical basis pos-sible. The importance of wide and growing markets must be borne in mindin setting prices. Expanded markets, in themselves, promise economies thathelp keep costs and prices in check.

Leaders of labor unions, in view of the great power lodged in their hands,have a particularly critical role to play. Their economic actions must reflectawareness that stability of prices is an essential condition of sustainableeconomic growth and that the only road to greater material well-being forthe Nation lies in the fullest possible realization of our productivity potential.This requires not only that our resources be fully employed, but thatarbitrary restraints on their most effective utilization be removed. Wecan realize more from our economy only to the extent that we produce more.

It is not the function of Government in our society to establish the termsof contracts between labor and management; yet it must be recognized thatthe public has a vital interest in these agreements. Increases in moneywages and other compensation not justified by the productivity performanceof the economy are inevitably inflationary. They impose severe hardshipson those whose incomes are not enlarged. They jeopardize the capacity ofthe economy to create jobs for the expanding labor force. They endangerpresent jobs by limiting markets at home and impairing our capacity tocompete in markets abroad. In short, they are, in the end, self-defeating.

Self-discipline and restraint are essential if agreements consistent with areasonable stability of prices are to be reached within the framework of the

489916 O—59-


free competitive institutions on which we rely heavily for the improvementof our material welfare. If the desired results cannot be achieved underour arrangements for determining wages and prices, the alternatives areeither inflation, which would damage our economy and work hardships onmillions of Americans, or controls, which are alien to our traditional way oflife and which would be an obstacle to the Nation's economic growth andimprovement.

Government also has a vitally important part to play in helping to preventinflationary developments. First, through the management of its fiscalaffairs, it can help to create an environment favorable to the achievementand maintenance of price stability. Second, to the extent consistent withother national objectives, it must strive to operate those Government pro-grams that directly affect costs and prices in a way that will contribute toover-all price stability. Third, it must lose no opportunity, through revisionsof its tax structure or by other means, to promote improvements in produc-tivity and to provide greater incentives for economic expansion.

Numerous elements in the program recommended to the Congress inChapter 4 of this Report are concerned explicitly with establishing a moresecure basis for the price stability essential for orderly economic expansion.Other parts of the program, though immediately directed to other goals,will also further this objective. All of our people, in view of their broadcommon interest in economic growth, can fully support this program.


Chapter 2

Economic Developments in 1958and Outlook for 1959

A^TER A SHARP but brief contraction starting in the third quarter of1957, economic activity turned upward in the second quarter of 1958.

Signs that the recession was being reversed began to appear early in Mayand, once started, the recovery spread rapidly through the economy. Bythe end of the year most of the ground lost during the contraction had beenregained. The index of industrial production was 142 percent of the 1947-49 average, compared with the peak of 146 in 1957; total employment hadincreased by about 1 million from its recession low; unemployment had beenreduced by approximately the same amount; and the income and expendi-tures of individuals were at new high levels. Gross national product, ourbroadest measure of the Nation's output of goods and services, had risen toan annual rate of $453 billion. Expressed in dollars of constant purchasingpower, this represented an output of goods and services about equal to thepeak reached in 1957.

EXTENT OF THE DECLINE

Measured by the duration and extent of declines in employment, produc-tion, and income, the 1957-58 recession may be regarded as a moderate oneby the standards of earlier experience (Table 1). The Nation's total output

TABLE 1.—Duration and extent of declines in selected economic indicators

Period

1929-331937-38 ...1948-491953-54 .1957-58

Duration(months)

431311139

Percentage change l

Nonagriculturalemployment

Total(Census)

(3)(3)-0.7-2.5-1.7

Wage andsalary

workers(BLS) »

-30.7-10.0-4.1-3.4-4.4

Industrialproduction

-50.8-32.3-7.7-9.6

-12.4

Personalincome

-49.8-11.2-3.4-. 1-.9

1 Percentage change from cyclical peak to cyclical trough (3-month centered averages), based on season-ally adjusted data.

2 In nonagricultural establishments. See Table D-22, footnote 1, for explanation of differences betweenthis series and the Bureau of the Census series.

3 Xot available.

Sources: Board of Governors of the Federal Reserve System, Department of Commerce, Department ofLabor, National Bureau of Economic Research, and Council of Economic Advisers.


CHART 1

Changes in Major Sectors of the Nations OutputThird Quarter 1957 to First Quarter 1958

State and local spending and consumer outlays on nondurables

and services helped offset declines in business investment, exports,

and consumer spending on durables.

-30

BILLIONS OF DOLLARS, SEASONALLY ADJUSTED ANNUAL RATES

-20 -10 0 +10

-30 -20 -10

TOTAL G N P

CHANGE IN BUSINESSINVENTORIES

BUSINESS FIXEDINVESTMENT-I/

CONSUMER EXPENDITURESFOR DURABLE GOODS

NET EXPORTS OF GOODSAND SERVICES

FEDERAL PURCHASES OFGOODS AND SERVICES

RESIDENTIAL CONSTRUCTION

CONSUMER EXPENDITURESFOR NONDURABLE GOODSAND SERVICES

STATE AND LOCALPURCHASES OF GOODSAND SERVICES

I

+ 10

U PRODUCERS' DURABLE EQUIPMENT AND NONRESIDENTIALCONSTRUCTION.

SOURCE*. DEPARTMENT OF COMMERCE.


CHART 2

Changes in Major Sectors of the Nation's OutputFirst Quarter 1958 to Fourth Quarter 1958

Changes in inventory investment and purchases by consumers and

by government were major factors in the GNP increase.

BILLIONS OF DOLLARS, SEASONALLY ADJUSTED ANNUAL RATES

- 10 0 +10 +20 +30

TOTAL GNP

CHANGE IN BUSINESSINVENTORIES

BUSINESS FIXEDINVESTMENT-!/

CONSUMER EXPENDITURESFOR DURABLE GOODS

NET EXPORTS OF GOODSAND SERVICES

FEDERAL PURCHASES OFGOODS AND SERVICES

RESIDENTIAL CONSTRUCTION

CONSUMER EXPENDITURESFOR NONDURABLE GOODSAND SERVICES

STATE AND LOCALPURCHASES OF GOODSAND SERVICES

I

-10 + 10 + 20 + 30

-V PRODUCERS' DURABLE EQUIPMENT AND NONRESIDENTIALCONSTRUCTION.

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.


of goods and services, adjusted for changes in prices, fell about 5*/2 percentbetween the third quarter of 1957 and the first quarter of 1958. Indus-trial output decreased more sharply, which is typical of economic contrac-tions; over a period of eight months, it decreased 13 percent. Employmentin manufacturing industries began to decline in January 1957, slowly forsix or seven months and then more rapidly. By May 1958, one monthafter what is commonly regarded as the low point in general businessactivity, a decline of 11 percent had been recorded. Reductions in non-farm employment outside of manufacturing were smaller. Unemploy-ment began to rise in the third quarter of 1957 and fluctuated around 5million in the spring and summer of 1958. Lower employment naturallymeant a reduction in the incomes received by individuals. Total wage andsalary payments fell 3/2 percent between July 1957 and April 1958. Thedrop in total personal income, on the other hand, was only 1 percent.

These broad measures tend to obscure the fact that economic fluctua-tions characteristically affect some parts of the economy more severely thanothers. The recent recession was no exception in this respect. Productionof nondurable goods declined very little, and the output of the service indus-tries actually increased. On the other hand, production of consumer durablegoods fell 27 percent from July 1957 to April 1958; the output of steel andof machinery fell 40 percent and 21 percent, respectively; and the productionof automobiles in April 1958 was about 40 percent below what it had beenin the same month of 1957.

The pace of the decline was also uneven. The downturn was precededby a slowing in the rate of growth of the economy, and for the first fewmonths the rate of contraction was relatively moderate. However, it tendedto accelerate in the early months of 1958, with the result that a large propor-tion of the total decline was compressed into a period covering less than halfof its full duration.

By the end of March the decline was abating, and by May indicationsof a general improvement began to appear. The signs of recovery, whichmultiplied quickly, were confirmed before long by a sustained upturn, andthe recession may now be regarded as having ended in April.

MAJOR FACTORS IN THE DECLINE

Early in 1957, changes in several economic sectors, developing at the sametime mainly by coincidence, tended to sap the vigor of the expansion then inprogress. Each exerted a growing downward pressure on production andemployment, and ultimately their joint effect was to tip the balance, aroundmidyear, toward a general reduction in economic activity (Chart 1).

The major developments were the decrease in the volume of incomingbusiness of the capital goods industries and reduced appropriations by manu-facturing businesses for their investment expenditure programs. By theend of 1957, these early signs were confirmed by lower expenditures of busi-ness concerns on machinery, equipment, and new facilities. Throughout

10


CHART 3

Manufacturing Capacity, Production, and Prices

Manufacturing capacity rose in 1956-58 relative to production

INDEX, 1953= 100140

120

100

MANUFACTURING CAPACITY-!/

V

1953 1954 1955 1956 1957 1958

. . and prices of capital goods rose relative to the prices ofother products.

INDEX, 1953 = 100140

120-

100

Q Q I 1 I I I I I I

1953I I I I I I I I I I I I I I I I I I | I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I

1954 1955 1956 1957 1958-!•/ END OF YEAR.

& SEASONALLY ADJUSTED.

SOURCES: Me GRAW- HILL PUBLISHING COMPANY, BOARD OF GOVERNORSOF THE FEDERAL RESERVE SYSTEM, DEPARTMENT OF LABOR, ANDE. H. BOECKH AND ASSOCIATES.

I I


most of 1957, financing for expansion programs was becoming more costly.Corporate liquidity was low, and instances of capital issues being postponedbecause of unfavorable financing conditions increased. Clearly, financialconsiderations were exerting a progressively greater influence on businesses torestrict their commitments for further expansion of their facilities.

A more basic factor affecting the capital expansion programs of businesseswas the widening gap between the supply and use of industrial capacity. Inmanufacturing alone, spending on new plant and equipment between 1953and 1957 had increased capacity by about one-fourth, but production hadincreased by only 7 percent. At the same time, the cost of new capacity, asreflected in the prices of industrial equipment, rose substantially more thanthe prices of industrial output (Chart 3).

Pressure to curtail the capital improvement and expansion programs ofbusinesses mounted rapidly. By the second quarter of 1958, outlays forthese purposes had dropped $7.4 billion, on an annual rate basis, from thepeak reached three quarters earlier. This sharp decline was a major factorin initiating the general economic contraction.

A similar though lesser impact on business activity resulted from a reduc-tion in merchandise exports. These had risen at a particularly rapid ratein 1956 and early 1957, and in the first quarter of the latter year they were60 percent higher than in 1954. The decline that began in the second quar-ter of 1957 persisted through the first quarter of 1958, when the volume ofexports stabilized some 20 percent below the level a year earlier. Initially,the decline occurred largely in wheat, cotton, and petroleum, but it soonspread to exports of metals, machinery, and manufactured goods generally.

The rising volume of exports in 1956 and early 1957 had helped to main-tain an upward trend in our economy at a time when domestic investmentdemands were beginning to level off. The disappearance of the specialfactors accounting for this surge in foreign sales coincided with the declinein investment outlays of business concerns, and reinforced this downwardpressure on economic activity. The Suez crisis that had led earlier tounusually heavy petroleum shipments subsided. Shipments of cotton andother agricultural products, which had been exceptionally large during thesecond half of 1956 and the first half of 1957, declined. Economic activityin certain industrialized countries of Western Europe and in Japan ceasedto increase, following a prolonged period of expansion; and, in view oftheir large stocks of imported materials, these countries reduced theirdemands on the productive capacity of the United States. Industrial con-traction in Canada resulted in smaller United States exports to that impor-tant market, and some of the less developed countries of the world curtailedimports, because of a weakening in their terms of trade and foreign exchangepositions.

The drop in our shipments abroad, occurring at a time when our importswere declining very little, meant a decrease in net exports of goods and

12


services of about $4 billion on an annual rate basis from the first half of 1957to the first half of 1958.

Obligations by the Department of Defense for major procurement andproduction items, which had risen in the second and third quarters of 1956to an annual rate of about $18.2 billion, were being made at a $10.6 billionrate in the same period of 1957, but actual expenditures changed much less,and only after some time lag. The annual rate of purchases of goodsand services for national defense declined from $44.9 billion in the secondand third quarters of 1957 to $43.9 billion in the fourth quarter; but sinceFederal expenditures for nondefense programs increased, total expendituresin the fourth quarter declined only $600 million. Additional nondefenseexpenditures caused a rise in the total for the first quarter of 1958. Subse-quently, however, both defense and nondefense spending increased, and totalexpenditures in the fourth quarter reached $53.8 billion. Meanwhile, therise in expenditures of State and local government units continued. As aresult, total expenditures for goods and services by all units of govern-ment—Federal, State, and local—increased throughout the recession. Inthe first quarter of 1958, they were 3 percent higher than they had been sixmonths earlier.

Finally, although the aggregate of consumer spending changed very little,large and important shifts occurred in the amounts spent on different groupsof goods. Purchases of consumer durable goods moved irregularly in thefirst three quarters of 1957, then dropped sharply in the next six months.In the first half of 1958, they were 11 percent less than in the third quarterof 1957, and approximately four-fifths of the decline was accounted for byreduced purchases of automobiles. Sharp cuts in consumer purchases ofdurable goods are by no means unprecedented in recession, but the 1957-58decline was unusually large in view of the small reduction—about 1 per-cent—in the amount of income available to consumers after payment oftaxes.

These largely independent changes in demand—lower rates of spendingby businesses on new plant and equipment, smaller exports, briefly andslightly reduced purchases by the Federal Government, a lower rate ofcontract placement, and reduced expenditures by consumers for durablegoods—led to a change in the inventory policies of business concerns. Thischange was a major factor in the decline.

From 1955 to mid-1957, business inventories were increased substantially.To a considerable extent this represented the rebuilding and enlargement ofstocks of materials, work in process, and finished products that are a normalpart of any expansion period. The rate of inventory accumulation slack-ened noticeably in the first three quarters of 1957, however, as uncertaintiesabout future sales and prices emerged and as the financing of inventoriesbecame more costly and difficult. But the major change did not come untilthe final quarter of the year. Business concerns then curtailed their produc-tion schedules sharply below the rate at which they were making sales, and


by the first quarter of 1958 inventories were being reduced at the rate of$9.5 billion per year. Thus, a rather common feature of economic fluctua-tions in an enterprise economy was repeated: a moderate decline in the paceof actual sales produced a much larger effect on production and employ-ment by provoking a sharp swing from inventory accumulation to inventoryliquidation.

The inventory declines were closely related to the specific reductions indemand already noted. Indeed, reductions in inventory holdings by manu-facturers of machinery, aircraft, and automobiles accounted for over one-halfof the decline in total business inventories. Producers supplying these indus-tries in turn were faced with substantial declines in incoming business, andthey attempted to pare down their holdings. As a consequence, particularlylarge reductions occurred in the output of the supplying industries.

Certain additional developments also influenced inventory policies. Spe-cial problems of excess capacity and unfavorable relationships betweencurrent sales and inventory holdings affected the petroleum, chemical, andpaper industries. The inventories of manufacturers of consumer householddurable goods were high when the downturn began; although sales declinedonly moderately, production was cut sharply in order to complete the indi-cated adjustment. And distributors of all types of consumer goods—apartfrom automobile dealers, whose inventories were rising sharply—cut theirpurchases from manufacturers and drew down their inventories, even thoughconsumer purchases were well maintained. The major part of this liquida-tion of trade inventories came in the first quarter of 1958, when recessionarypressures were greatest.

The impact of these inventory adjustments was considerable. The swingfrom accumulation at an annual rate of $2.2 billion per year in the thirdquarter of 1957 to liquidation at the annual rate of $9.5 billion during thefirst quarter of 1958 reduced gross national product by $11.7 billion, about60 percent of its entire decline during this period.

RESISTANCE TO CONTRACTION

Measures taken in 1957-58 specifically to counteract economic recession,and other measures taken for reasons independent of economic conditions,played an important part in limiting the contraction in production andemployment to a moderate over-all decline and to a brief span of time. Butthese limiting features were in part also the result of the considerable andgrowing capacity of our economic system to resist deflationary forces.

A major element in the economy's resistance to recession in 1957-58 wasthe maintenance of over-all consumer demand, a result that may be attrib-uted to consumer confidence and to the maintenance of personal income.Although gross national product was $20 billion lower on an annual-ratebasis in the first quarter of 1958 than in the third quarter of 1957, the declinein personal disposable (after tax) income was less than $4 billion, andaggregate consumer expenditures fell only $2 billion.

14


In contrast, during the recessions prior to World War II, large declinesin investment activity commonly resulted in large contractions in personalincome, and reduced incomes naturally led to lower consumer purchases.But in recessions since the war, the relative stability of consumer incomesand purchases has provided a check on this potentially cumulative process.As a result, declines in production have been contained within a narrowersegment of the economy.

A number of factors help to account for the maintenance of consumerincome during the 1957-58 recession. First, the decline in personalincome earned in production was small relative to the contraction in thevalue of output. For every decline of $1 billion in private output, personalincome earned fell only $360 million; in 1929-30, it fell $670 million foreach $1 billion decline in output. This relatively more moderate declinein earned income resulted in part from the fact that a larger proportion ofour labor force is now employed in industries and occupations not quicklyaffected by moderate changes in business conditions; and even in the indus-tries that are more sensitive to business fluctuations, a larger proportion ofemployees hold positions not usually affected by production cutbacks ofshort duration. Moreover, wage rates continued to press upward during the1957-58 period, increasing the pay of employed persons and moderating theincome reductions of those working a shorter week. But this is a factor thatworks two ways. It may sustain income for the employed; but to the extentthat it leads to higher costs and prices, it may induce reductions in theworking force and be an obstacle to re-employment.

Some of the factors that have made personal income earned in productionmore resistant to recession have, on the other hand, made corporate incomemore sensitive. Total corporate profits, and consequently the revenuesreceived by Government from corporate income taxes, fell sharply duringthe recession. Because corporate dividends were maintained at a high level,helping to sustain personal income, corporate retentions of income weresharply reduced. For every $1 billion decline in gross national product,corporate income taxes and retained earnings (adjusted for inventory valua-tion) together fell $590 million from the third quarter of 1957 to the firstquarter of 1958, compared with a drop of $240 million from 1929 to 1930.

Another development accounting for the small decline in personal incomeearned in production was the rise in farm income during the recession.Net farm income rose in the first quarter of 1958 to an annual rate thatwas 10 percent higher than in 1957, increased another 6 percent in thesecond quarter, and then remained roughly unchanged for the rest of theyear. To some extent, however, the beneficial results for the economy of thelarger income of farmers were offset by the effect of higher farm prices,which reduced nonfarm real income and purchases.

Second, certain supplements to earnings helped to maintain aggregateconsumer income. Unemployment compensation payments increasedsharply as employment and earnings fell, and the extension of these benefits

15


for additional periods in 1958 provided a further offset to lost pay for thosewho had exhausted their rights. Actually, the extended benefits did notbegin to be paid until after the recovery had started; nevertheless, theyassisted those who felt the recession's effect for the longest time and theyalso strengthened the recovery movement. In addition, supplemental unem-ployment compensation payments under private plans helped to maintainpersonal incomes and consumption expenditures. Another major incomesupplement was the steady increase in payments under social security,pension, and other benefit arrangements. The increase in such paymentsduring the recession resulted from the growth in the number of personseligible to receive them and from benefit increases under certain publicsocial security programs which had been legislated earlier.

The increase in these so-called "transfer" payments was very large:$2.6 billion on an annual rate basis between the third quarter of 1957 andthe first quarter of 1958, and another $2.6 billion by the third quarter. Inthis way, not only was the personal income earned in production relativelywell maintained during the recession, but the declines that did occur wereappreciably moderated in their effect on total personal income.

Finally, part of the fall in personal income was offset by a decline intax obligations, so that the income available to consumers after taxes, andthus their purchasing power, declined less than the flow of personal income.

The combination of these three stabilizing factors—the small decline inearned personal income relative to the decline in production, the growthin transfer payments, and the reduction in personal tax payments—greatlymoderated the fall in consumer income available for spending. And con-sumers, in turn, reduced their purchases of goods and services by less thanthe fall in their income.

If purchases by consumers in 1957-58 had fallen as much, in proportionto the decline in all other demands for output, as from 1929 to 1930, they

TABLE 2.—Changes in income and consumption in recessions

Period

1929-301937-381948-491953-541957-58

Percentage change

Grossnationalproduct

-12.7—6 2-3.6-2.7-4.4

Personalincome

earned inproduc-

tion

-10.7-8 0-3.7-1.1-2.2

Disposablepersonalincome

-10.5—7 5-2.0

.8-1.2

Personalconsump-tion ex-

penditures

-10.1—4 0

.21.4

-.7

Ratio ofchange inconsump-

tion tochange in

grossnationalproduct

(percent) l

0.6048

(2)

(2).11

1 Ratio based on change in dollar amounts.2 Not computed because consumption rose while gross national product declined.

NOTE.—Changes from 1929 to 1930 and from 1937 to 1938 are based on annual data. Other changes arebased on seasonally adjusted data for the peak and trough quarters of gross national product.

Sources: Department of Commerce and Council of Economic Advisers.

16


would have dropped by at least $26 billion. Actually, they fell only $2billion. While gross national product fell 4/2 percent, personal disposableincome fell only about 1 percent, and consumption expenditures only 0.7percent (Table 2 ) .

The moderate extent and relatively short duration of the recession werealso due in part to the absence of adverse financial developments—which inthe past have tended to aggravate business contractions—and to the increaseof asset values, notably farm land and real estate. These circumstancesreflect the fact that the recession was brief and moderate, but they helpedto keep it brief and moderate.

PRICES AND COSTS

Public attention was attracted during the recession to the apparent para-dox of prices continuing to rise while production and employment weredeclining. Attention was naturally focused mainly on consumer prices.As measured by the consumer price index, this group of prices rose, on theaverage, by about 2 percent, though there was considerable diversity ofmovement among different items. A major part of the increase was dueto higher food prices and the continuing upward drift in the costs of variousservices used by consumers (Charts 4 and 5). On the other hand, prices ofmanufactured products, with the major exception of new and used auto-mobiles, were reasonably stable.

CHART 4

Consumer Prices on a Prewar BaseBetween 1939 and 1948 commodity prices increased rapidly,

service prices slowly. Since then, prices of services have risen

steadily relative to prices of commodities.INDEX, 1939 = 100

250

200

150

100

•>..••*

/ DURABLE/COMMODITIES

ALL ITEMS

NONDURABLE COMMODITIES «^»*EXCLUDING FOOD , ' ^

I I I I I I I J I I 1 I 1 I I I I

1940 42 44 46SOURCE: DEPARTMENT OF LABOR.

48 50 52 54 56 58


Prices in wholesale markets rose somewhat less than prices at retail, andhave been roughly stable since early in 1958. Again, however, the averageof wholesale prices fails to disclose the considerable differences of movementamong commodity groups. Prices of farm products and foods rose sharplyduring the recession and then declined after mid-1958. Prices of rawmaterials, which are always sensitive to changes in domestic and worldmarket conditions, declined sharply during the recession but recoveredrapidly after the upturn. Prices of manufactured products continued torise during the early months of the contraction, but fluctuated within anarrow range throughout 1958 (Chart 6).

While it is important to beware of overly simple explanations for the risein prices during the last few years, and in particular for the continuance ofsome increases during the recession, three factors of major importance maybe identified as having contributed to these results. First, during the earlypart of the upward price movement which started about three years ago,some increases were caused by heavy and rapidly mounting demands. Thesehigher prices often became higher costs for other industries, thus diffusingtheir effects throughout much of the economy.

Second, a substantial part of the rise during the recession reflected forcesnot closely related to the immediate business situation. Prices of services,on which consumers spend over one-third of their total outlays, were makinga delayed adjustment to earlier increases in prices and costs. This paralleled

CHART 5

Consumer Prices on a Recent Base

Between 1955 and mid-1957 all major price indexes rose; during

the next year increases were confined mainly to food and service

prices; in recent months the over-all index has been stable.I N D E X , 1953-54=1001 1 5

105

100

1953 1954 1955 1956SOURCE: DEPARTMENT OF LABOR.

1957 1958

18


CHART 6

Wholesale Commodity PricesThe wholesale price index was roughly stable in recession and

recovery. Offsetting changes occurred in prices of the various

components.

INDEX, 1953-54 = 100

120

no

100

FINISHED

-

1 II 1 ll 1 1 1 ! 1

INDUSTRIAL PRODUCTS

...-••"

PRODUCERS' EQUIPMEI*

1 II 1 1 ll 1 1 M m

<T

V /./""

, — '

1

•••"

CONSUMER

mnlnm

*•

-

GOODS

l l l l l l l l l l l

1953 1954 1955

SOURCE: DEPARTMENT OF LABOR.

1956 1957 1958


the experience in the other two postwar recessions. Prices of food, whichaccount for roughly one-quarter of the expenditures of consumers, rosemainly because of supply conditions. Lower marketings of livestock resultedin higher meat prices; and unfavorable weather conditions reduced thesupplies, and led to higher prices, of fresh fruits and vegetables.

Third, substantial increases in costs in recent years have influenced prices.Large additions to productive capacity, and the replacement in this periodof facilities originally acquired when costs and prices were lower, havecaused capital costs to mount sharply. A rapidly enlarging complement ofprofessional and technical personnel has also added to costs, though inevi-tably the full beneficial effects of these larger staffs will be realized only overan extended period of time. Since commensurate gains in output have notoccurred, these increases in costs have resulted in higher expenses per unitof output produced.

Finally, wages, salaries, and employee fringe benefits have increased atrates above those consistent with the long-run productivity performance ofthe economy. As a result, employee compensation per unit of output, whichhad been fairly stable between 1953 and 1955, rose about 10 percent in thenext two years.

This persistent advance in costs of all types naturally exerted an upwardpressure on prices. The increase in prices that did occur was less than therise in costs, however, with the result that profits per unit of output werelower in 1956 and 1957 than in 1955.

Clearly, severe reductions in the price level during a brief and moderaterecession are not to be expected and would not be a proper objective ofnational economic policy. Indeed, such reductions might impede earlyrecovery of the economy. Rather, the problem is how to achieve a reason-able stability of prices when economic activity is advancing and output andemployment are high. The limited downward flexibility of prices in amoderate recession, and the upward movement even then of certain keyprices and costs, highlight and emphasize the need for public and privatepolicies that will produce the desired price stability at all times.

RESUMPTION OF ECONOMIC EXPANSION

Even during periods of general economic contraction, some industriesand some regions of the Nation continue to forge ahead and others experi-ence only a temporary cessation or slowing down of their rate of growth.This continuing strength helps to moderate cutbacks of production else-where ; and when demands begin to rise again in areas where there had beenactual declines, over-all gains in output and employment follow quickly.

A pattern of this type prevailed in the 1957-58 recession. While produc-tion and employment were declining rather sharply in some sectors, notablyin the heavy industries and in those producing consumer durable goods,output and sales of consumer nondurable goods fell only slightly, the serviceindustries expanded, and purchases by State and local governments con-

20


CHART 7

Employment in Nonagricultural EstablishmentsManufacturing, mining, and transportation accounted for four-

fifths of the 1957-58 decline in employment and for half of the

increase since April.

MILLIONS OF PERSONS

54

52 -

4 -

2 -

1953 1954 1955 1956 1957 1958SOURCE: DEPARTMENT OF LABOR.

21489916 O—59 3


tinued to rise. Then, as areas of the economy that had suffered declinesresumed expansion, and as sales began to be met increasingly out of currentproduction rather than out of inventories, a rise in general economic activitystarted (Chart 2 ) .

In the early part of 1958, shifts of this kind developed quickly. In Febru-ary, employment was declining in all major sectors of the private economy;only in government was it increasing. By April and May, increases inprivate employment were reported (Charts 7 and 8). The demand forgoods and services ceased declining in a number of industries and in somecases began to rise. The decline of exports virtually ended by the secondquarter of 1958, eliminating an important contractive force.

As indicated earlier, Federal outlays on goods and services fell only in thefourth quarter of 1957, and then by a relatively small amount—$600 millionon an annual rate basis. A rise in such outlays began in the next quarter.Purchases of nondefense goods and services by the Federal Government roseat an annual rate of $3 billion from the first to the fourth quarter of 1958,largely on account of increased payments under agricultural price supportprograms and higher Government pay scales. And defense outlays, sig-nificantly influenced by the effect of pay increases, rose at an annual rate of$400 million between the first and second quarters of 1958 and by another$900 million in the next two quarters. At the same time, there was a sharpincrease in the placement of contracts for the purchase of military goods.New orders for major items of defense goods, which in the second half of1957 were being placed at an annual rate of $12 billion, increased to anannual rate of $22 billion in the first half of 1958. The most immediateeffect of this rise was to slow and eventually halt the liquidation of inventoriesby defense contractors.

Most of the decline in business expenditures for plant and equipmenthad occurred by the second quarter of 1958. However, indications thatthe decline would not be of long duration began to appear early in theyear; new orders for machinery and equipment, after falling sharply inthe late months of 1957, stabilized after the turn of the year and movedupward shortly thereafter. Surveys of the plans of businesses for capitaloutlays reported in September 1958 and again in December indicated thatthe decline in these expenditures had ended and that some increase was inprospect. Although industrial capacity was generally ample, the need formore or for improved facilities was already being felt in some industries.Throughout the economy, increased competitive pressures and rising costsintensified the search for more efficient production techniques.

Indications that home building would help promote an upturn wereapparent early. Applications for FHA commitments, after declining morethan seasonally in the final quarter of 1957, moved moderately upwardthrough March 1958 and then increased strongly for the next six months.The number of new private dwelling units being started increased steadilyafter February. As was to be expected, time was required for these changes

22


CHART 8

Employment, Hours, and Earnings in ManufacturingThe average length of the workweek turned up in March 1958 . . .

HOURS*

42

40

38

AVERAGE WEEKLY HOURS(PRODUCTION WORKERS)

II I i I i I I i I I 11 i i I i I 11 I I I 11 i I i i i I i 1 1 I 11 i i 1 1 i 1 1 1 I i 1 1 i I 11 I 11 1 1 i 11 i i I I i 1 1 I I i ii1953 1954 1955 1956 1957 1958

. . . and employment of production workers in June.

MILLIONS OF PERSONS*

14

13

12

I IS

EMPLOYMENT

NONPRODUCTION (SALARIED)WORKERS *

t'0 r l I I I I I I I I I 1 1 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1 I I I I I I I I I I I I I I I 1

1953 1954 1955 1956 1957 1958

Hourly earnings continued to advance throughout the year.

DOLLARS

2.20

2.00

1.80

1.60 -

AVERAGE HOURLY EARNINGS(PRODUCTION WORKERS)

0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 11953 1954 1955 1956 1957

* SEASONALLY ADJUSTED DATA.

SOURCES: DEPARTMENT OF LABOR AND DEPARTMENT OF COMMERCE.

1958


CHART 9

Employment, Production, and Income

Employment changes have been broadly similar to previous post-

war experience.

PEAK MONTH = 100*110

NONAGRICULTURAL EMPLOYMENT (BLS)

105

100

95

90

85 L-L-J—L

1948-50V

1953-55

0 2 4 6 8 10 12 14 16 18 20 22 24MONTHS AFTER CYCLICAL PEAK

PERCENT OF CIVILIAN LABOR FORCE*

2 -

0 2 4 6 8 10 12 14 16 18 20 22 24MONTHS AFTER CYCLICAL LOW

* SEASONALLY ADJUSTED.

SOURCES: DEPARTMENT OF LABOR, DEPARTMENT OF COMMERCE, ANDCOUNCIL OF ECONOMIC ADVISERS.

24


CHART 9—Continued

Employment, Production, and IncomeChanges in production and income also have been similar to

previous experience.

PEAK QUARTER=100 f

115

110

105

100

95

90

TOTAL OUTPUT(GNP IN CONSTANT PRICES)

1957-58

1948-50

1953-55

2 3 4 5 6

QUARTERS AFTER CYCLICAL PEAK

PEAK MONTH = IOOf

115PERSONAL INCOME

110

105

100

95

90 I i i i i i i i i i i i i i i i i i

0 2 4 6 8 10 12 14 16 18 20 22 24MONTHS AFTER CYCLICAL PEAK

t SEASONALLY ADJUSTED.

* INCLUDES SPECIAL LUMP-SUM PAYMENTS.SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.


to be translated into actual construction activity, but the volume of expendi-tures for residential construction turned upward after May and quicklypushed well above the levels of 1956 and 1957.

The rise in home building activity and the stability of consumer demandin general began early in 1958 to exert a favorable influence on the inven-tory policies of producers and distributors of building materials and consumergoods. In the first quarter of the year, these industries were cutting backtheir inventories sharply. Except for automobiles, however, sales were notfalling by a significant amount, and in many cases were rising. As retailand wholesale firms placed larger orders with manufacturers, the latter in-creased their production, both to meet the increased sales and to replenishtheir own inventories. In preparation for a new model year, the automo-bile industry also began expanding production and adding to inventories.The change in the rate of inventory investment by wholesalers and retailersand by the automobile industry accounted for a rise of about $4 billion innational product between the first and fourth quarters of 1958, about one-seventh of the total increase recorded for that period.

Although inventories of manufacturers not closely associated with con-sumer developments continued to decline throughout the summer at a fairlyrapid rate, they eventually began to feel the effects of the increase in demandelsewhere. Inventory reductions were slowed considerably, as productionexpanded faster than sales; but in some industries, particularly those pro-ducing capital goods, liquidation continued in the final quarter of 1958.For the economy as a whole, however, the rate of production in the fourthquarter was equal to sales, whereas in the first quarter it had been $9.5billion less than sales. This rise of $9.5 billion accounted for more thanone-third of the increase in gross national product during the period.

As a result of increases in sales and production, and a continued rise intransfer payments, personal income began to rise in March. Apart from theeffects of retroactive salary payments to Federal employees in July, and thepattern of dividend payments in December, the increase continued throughthe year, providing the basis for higher consumption expenditures. Althoughthe decline in consumer spending on durable goods continued through thesecond quarter, total consumption expenditures began to increase in thatquarter and by the end of the year retail sales were above sales a year earlier.After September, purchases of durable goods increased substantially.

Responding to the increase in output and sales, corporate profits recoveredsharply in the second half of 1958. By the fourth quarter of the year, theywere apparently equal to the highest quarterly figure in 1957 and onlyslightly below the peak attained in 1955. Supplementing the increasingallowances for depreciation, these higher earnings were providing substan-tially larger amounts of internal funds to business concerns by the end ofthe year.

Had it not been for extensive work stoppages in the final quarter, therecovery in output, employment, and income, and in spending by consumers,would have been more rapid. As it was, changes in employment followedfairly closely the patterns of change in previous postwar cycles. The rate of

26


unemployment, which had risen above the rate in previous recessions sincethe war, also fell rapidly. In the final two months of the year, the unem-ployment rate was close to what it had been in the corresponding period inthe 1948—50 recession and recovery, though still above what it had been inthe corresponding period in 1953-55 (Chart 9).

DEVELOPMENTS IN WORLD PRODUCTION AND TRADE

The recession was not limited to the United States in its origins or in itseffects. Production ceased to expand in most other industrial countries ofthe Free World, and in some countries it declined in 1957-58 (Chart 10).However, the general level of industrial output abroad in the closing monthsof 1958 was moderately higher than it had been a year earlier, and manyindications pointed toward a renewal of expansion in countries with whichthe American economy is closely related. World commodity prices, crucialto the incomes of the primary producing countries, stabilized in the first halfof the year, and some of them tended to strengthen in the second half.World trade, after its first significant setback since the Korean conflict, alsoappeared to reflect a strengthening of demand.

The period of expansion which preceded the recession produced certainmaladjustments abroad, the correction of which entailed at least someslowing down in production and trade before growth could be resumedon a firmer footing. As in the United States, the expansion of industrialcapacity in certain countries was greater than the increase in industrialoutput. In the United Kingdom, the increase in capacity resulting fromlarge investment outlays after 1955 was not matched by a correspondingincrease in industrial production or in output per worker. As wage ratescontinued to rise rapidly, labor costs per unit of output increased. Togetherwith rising capital costs, they exerted an upward pressure on prices. Inmost other industrial countries, the investment boom was translatedinto a rapid growth in output and in productivity. Some of thesecountries, especially the Federal Republic of Germany, Italy, and Austria,successfully combined these high growth rates with only moderate priceincreases. Others, however, including particularly Japan, France, andthe Netherlands, developed strong inflationary pressures at home and unsus-tainably heavy external deficits as their demands for capital goods and indus-trial materials rose. To these maladjustments were added the strains ininternational payments produced by the Suez crisis and the short-termcapital movements that started in late 1956.

Readjustments thus had to be made in a number of countries at aboutthe same time. The timing of these shifts was partly coincidental, but theireffects were closely intertwined. A contraction of demand arising out ofthem had immediate effects on inventory policies not only in the countriesimmediately concerned but in other countries as well, as world prices ofprimary commodities weakened. Some commodities were already vulner-able to such changes. This was especially true with respect to nonferrousmetals, for which production capacity in the United States and abroad had

27


CHART 10

Foreign Industrial ProductionProduction abroad rose rapidly from 1952 to mid-1957 and since

then has shown little further change.

I N D E X , 1953 = 100*160

140

120

100

WESTERN EUROPE,CANADA, AND JAPAN

V

80 I I 1 I I I I I I I I1953 1954 1955 1956 1957 1958

180

160 -

140 -

120 -

100

1953 1954 1955 1956 1957 1958

120

100

80

UNITED KINGDOM

\

1953 1954 1955 1956 1957* SEASONALLY ADJUSTED.

SOURCES: DEPARTMENT OF COMMERCE AND ORGANIZATION FOREUROPEAN ECONOMIC COOPERATION.

1958

28


CHART 11

World TradeThe chief decline was in exports of the U. S. and the primary

producing countries and in imports of other industrial countries.

BILLIONS OF DOLLARS*

100

80

60 -

WORLD

EXPORTS

. . . f1953 1954 1955 1956 1957 1958

60

40

20

INDUSTRIAL COUNTRIES

WESTERN EUROPE,CANADA, AND JAPAN

IMPORTS

1953 1954 1955 1956 1957 1958

40

20

PRIMARY PRODUCING COUNTRIES-^

EXPORTS

1953 1954 1955 1956 1957 1958

* SEASONALLY ADJUSTED ANNUAL RATES.J/EXCLUDES PETROLEUM-EXPORTING COUNTRIES (BUT

LATTER ARE INCLUDED IN WORLD TOTAL).

NOTE: DATA EXCLUDE TRADE OF USSR AND SOVIET- BLOC COUNTRIES.SOURCES: DEPARTMENT OF COMMERCE AND INTERNATIONAL MONETARY FUND.


been rapidly expanded in response to the extraordinary demands generatedby the Korean conflict and its aftermath and by the investment boom.Burdensome surpluses of coffee had also been generated by excessive in-creases in capacity.

The decline of commodity prices, in turn, reduced the buying power ofcountries producing primary products, in many of which the demand forimports had already grown beyond export earnings or other means offinancing.

For these reasons, international trade receded from the high level reachedin the first half of 1957 and declined into the early part of 1958 (Chart 11).The decline was especially marked in United States exports, for reasonsrelated to their commodity composition and country distribution. In thesecond half of 1958, however, United States exports were at about the samerate as in the first half of the year, and there appeared to be some strength-ening in world trade.

OUTLOOK FOR 1959

An examination of changes in demand that have been occurring recentlyin the major sectors of our economy provides a useful basis for estimatingfurther changes during the months ahead. In the private sector, theindustries that supply capital goods and facilities have, so far, con-tributed only modestly to the recovery. New orders for such goods haveimproved and demands for them have begun to rise, but output in theindustries producing these goods has not increased markedly and theincrease in employment has been even more restricted. In the monthsahead, however, these industries and others more or less closely relatedto them should make a larger contribution to rising production, employ-ment, and income. Factors that have a considerable influence on capitaloutlay decisions have become more favorable. Business earnings haveimproved. The rate of utilization of existing industrial capacity, thoughstill not exerting pressure on businesses generally to enlarge their facilities,has increased sufficiently to bring the need for additional capacity withinsight for some industries and firms. Moreover, the need for controllingcosts provides incentives to replace obsolete and high-cost facilities, eventhough they remain operational. Present evidence indicates that businessconcerns contemplate no further curtailment of their expenditures for newand better facilities, and an upturn in such expenditures may already beunder way. In the past, improving economic conditions have typically ledbusiness concerns to revise upward their plans for capital outlays, and it isreasonable to believe that some such revision may take place as the yearprogresses. There is not, as yet, a sufficient basis for judging how largethe eventual increase in demand from this sector of the economy may be,but it seems reasonable to expect that it will make an increasing contributionto a rise in over-all economic activity.

Although residential construction has already risen by about one-fourthsince mid-1958, it is continuing to be a major factor in economic recovery.

3°


Financing commitments already in hand and uncompleted starts shouldentail some further increase in construction outlays in the next few months.Subsequently, however, the level of building activity will depend increas-ingly on the capacity of the industry to compete for funds in the capitalmarkets. Favorable action by the Congress on recommendations madeelsewhere in this Report to correct those features of our housing laws thattend currently to impede the flow of private funds into home financingwould significantly improve the outlook for a sustained high level of resi-dential construction.

For the time being, exports are still affected by some of the factors thatcontributed to their decline in 1958: a leveling of industrial activity abroad;apparently large inventories of some commodities that are important inUnited States shipments; and continued trade deficits and strains on foreignexchange reserves in some of the primary producing countries. Theseconditions not only moderate foreign demands for United States output butalso produce keener export competition. A decisive upturn in UnitedStates exports can scarcely be expected until a renewed rise in industrialactivity abroad sets in, and perhaps then only with some delay whereinventories or idle capacity are large. However, there are encouragingindications of such a rise in some countries abroad, and policies favorable toeconomic expansion have been undertaken generally. Increased demandarising from renewed expansion in the industrial countries may be expectedto benefit the trade position of primary producing countries. Meanwhile,United States imports appear to be strengthening further, as domestic eco-nomic activity rises, and this should help to increase foreign buying power,both directly through larger earnings from the United States and, morewidely, through some continued firming of raw material prices. Accord-ingly, the prospect is that in the course of this year foreign economic activityand, possibly with some delay, the foreign demand for United States exportsshould begin to rise again in a mutually reinforcing relationship with ourown economy.

Farm production may be expected to remain an element of strength andstability in 1959. Even with growing conditions less favorable than in1958, which was an exceptional year, the aggregate output of crops prom-ises to remain high. It is expected that the total supply of milk, eggs, andmeat will be increased, the last especially by a substantial amount of pork.Large production and stocks of many crops are likely to keep farm pricesunder some pressure, but prices of many products are protected from severedecline by governmental supports. Livestock prices may recede somewhat,owing to larger supplies of hogs and poultry, though beef cattle prices mayremain relatively unchanged. Farmers' cash receipts from marketingsmay be well maintained but total expenses on account of farm productionwill probably continue to rise somewhat, reflecting higher payments forwages, taxes, interest, and machinery. Lower or unchanged costs areexpected for other items. In these conditions, income from farming maybe slightly below that in 1958, but still high, and farmers' expenditures for

31


production and consumption may be expected to remain at levels favorableto an expansion of business activity. Also, the high productivity of agricul-ture and large stocks of food and feed should help restrain increases in thegeneral price level in the year ahead.

In the public sector of the economy, a rise in Government outlays—Fed-eral, State, and local combined—may be expected in the present year,though probably a smaller increase than in 1958. Outlays by State andlocal governments have been rising steadily, and they may be expected tocontinue expanding at the same rate as in the past year, if not at a somewhathigher rate. The Federal Government's outlays for goods and services andfor transfer payments in connection with social security programs will in-crease in 1959, though by a lesser amount than in the past year.

If increases in the demand for output continue to develop along theselines, the liquidation of inventories should soon come to an end, if it has notalready done so, and some stepping up in production schedules above salescan reasonably be expected. A building up of stocks of materials and workin process is typical of a period of economic expansion. Moreover, inven-tories of some businesses in 1958 appear to have fallen below the amountsappropriate for even the reduced pace of sales at that time. The improvedliquidity position of business concerns and financial institutions should makeit possible to finance needed increases in inventories with reasonable ease.

When account is taken of the currently favorable appraisal of eco-nomic conditions which consumers appear to hold, their improved creditposition, and the higher incomes likely to be generated in sectors of theeconomy not directly connected with the production of consumer goods, itseems reasonable to expect an enlarging market for these goods in the comingyear. In turn, higher employment in these industries may be expected tocontribute further to the increase in economic activity generally. On theother hand, the extent to which increases in income can lead to higher con-sumption of goods and services, and thus to higher levels of production andemployment in the consumption goods industries, depends on whetherincreases in wage and other costs are held within limits consistent with rea-sonable stability of consumer prices.

With due allowance for the limitations that surround all efforts to fore-cast the probable course of activity in a free economy, there is a reasonablebasis for confidence that the recent improvement in activity will be ex-tended into the months ahead. However, it must be recognized that theactions of all individuals and groups in the Nation—consumers, businessconcerns, labor organizations, and Government—will have a decisive bear-ing on the outcome. All must play their parts appropriately if the highlevels of employment, production, and purchasing power envisaged by theEmployment Act are to be attained. A significant contribution by Govern-ment to the accomplishment of this purpose, and particularly to theachievement of the price stability essential for sustainable economic growth,would be assured by the economic program outlined in Chapter 4. Thatprogram is recommended to the favorable attention of the Congress.

32


Chapter 3

Economic Policies in 1958

ARIOUS MEASURES undertaken by Government helped overcomethe contractive forces in our economy in 1957-58. Some of thesemeasures were initiated specifically to help reverse the decline and topromote a higher level of business activity. Others were designed tomitigate the special hardships experienced by individuals and familiesthrough loss of employment. Still others were called for by considerationsentirely independent of economic conditions, but they nevertheless had theeffect of stimulating economic activity. After the recovery started, policieswere directed to helping achieve a high and sustainable rate of economicgrowth with stable prices.

A review of these actions and an appraisal of how they influencedthe year's economic developments are important as guides for Govern-ment and for private individuals and groups in meeting future problems ofeconomic stabilization with balanced and constructive policies.

POLICIES DURING THE CONTRACTION

Money and Credit

During the past 18 months, monetary and credit policy was directedsuccessively to moderating the rate of credit expansion, helping to reverseeconomic contraction, and encouraging a steady and balanced recovery andgrowth.

Demands for capital and credit were heavy in the months preceding the1957 downturn. Plant and equipment expenditures were at an all-timehigh, and expanding inventories required financing. Because the cash andliquidity position of businesses was relatively strained, funds to help financeinvestment programs and working capital needs were necessarily sought inlarge volume from outside sources. But because the Federal Reserve Sys-tem confined the reserves supplied to member banks at its own initiative toamounts consistent only with seasonal swings in activity, bank credit wasless readily available than in 1956. Businesses did obtain additional creditfrom commercial banks, but the increase was much smaller than in 1956,and more reliance for funds had to be placed on the capital markets.Securities offered by corporations increased to a new high volume, and theofferings of State and local governments approached record amounts.Meanwhile, the flow of funds into life insurance companies, savings andloan associations, and mutual savings banks slackened. Although larger

33


CHART 12

Interest Rates and Bond YieldsShort-term interest rates continued to decline until mid-1958, then

rose sharply until October.

PERCENT PER ANNUM

4 -

1955 1956 1957 1958

Long-term interest rates declined slightly early in the year, but

rose rapidly from midyear until October.PERCENT PER ANNUM

0 i i i i i i I i i i i i I i i i i i I i i i i i I i i i i t I i i i i i I i i i i i I i i i i i

SOURCES: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, MOODY'S INVESTORSSERVICE, AND TREASURY DEPARTMENT.

34


CHART 13

Member Bank ReservesIn 1958 the rise in Federal Reserve holdings of U. S. Government

securities offset the effect of gold outflow on bank reserves.

BILLIONS OF DOLLARS T

35

30

25

20

15

CURRENCY IN CIRCULATION

^__ X|

:.GOLD

-

^^

STOCK -^

f ' 1U.S. GOVERNMENr SECURITIES

HELD BY FEDERAL RESERVE BANKS

y

MEMBER BANK /RESERVrE BALANCES

v......,x

* * " " ^ ™^**

-

1955 1956 1957 1958

Free reserves increased sharply early in 1958 and

declined after midyear.

BILLIONS OF DOLLARS1" (ENLARGED SCALE)

FREE RESERVES(EXCESS RESERVES

LESS BORROWINGS)

I957I955 I956t AVERAGES OF DAILY FIGURES.* CHANGE IN RESERVE REQUIREMENTS.

SOURCE: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

I958

35


amounts of savings were supplied from other sources, notably from the in-creasing volume of time deposits in commercial banks, the rising tide offinancial demands in the capital markets helped bring about progressivelyhigher interest rates and bond yields. The peak of credit and capital costscame in the fall of 1957, when interest rates generally reached the highestlevels since the early 1930's (Chart 12).

By the end of September, there were indications that the demand bybusiness concerns for bank credit was slackening; and the flow of fundsinto home financing fell as the ceiling interest rates on federally under-written mortgages became increasingly out of line with yields available oninvestments not subject to such controls. In the second half of October,the Federal Reserve authorities began to ease slightly the reserve positionof member banks through open market operations in United States Gov-ernment securities. This was followed in mid-November by a reductionin the discount rate from 3/2 percent to 3 percent, signaling a decisivechange in policy. Subsequently, the Federal Reserve authorities easedreserve positions still more by open market purchases of Governmentsecurities and released some $1.5 billion of bank reserves by lower-ing reserve requirements. In a series of steps over five months beginningin mid-November, the discount rate was reduced to 1% percent.By March 1958, the reserve position of banks had eased markedly. Mem-ber bank borrowings from the Federal Reserve Banks were nearly $ 1 billionbelow those of September 1957, and net free reserves (excess reserves lessborrowings) had increased to $500 million. This reserve position of mem-ber banks remained virtually unchanged until July 1958 (Chart 13).Monetary policy was, moreover, sufficiently expansionary to offset theimpact on bank reserves of a gold outflow of $1.4 billion, which took placein the first six months of the year.

These steps produced emphatic reactions in financial markets. Theimproved reserve position of commercial banks enabled them to add nearly$10 billion in loans and investments to their assets in the first half of 1958.This took the form largely of additions to their holdings of United StatesGovernment securities, which increased $6.0 billion by midyear, but theirholdings of State and local securities also increased significantly. The de-mand for bank credit from most other borrowers was not heavy, and otherforms of credit increased only a little or declined. As a result, theratio of United States Government securities to loans in bank portfoliosincreased.

Because the major part of this increase in bank assets was reflected inan expansion of $5.7 billion of time deposits, the volume of demanddeposits and currency, which is the economy's active money supply, increasedby only $2.2 billion, on a seasonally adjusted basis (Chart 14). Withoutposing potentially inflationary threats, this timely expansion of the moneysupply helped to improve the liquidity position of the economy generally.


CHART 14

Money SupplyThe money supply increased in 1958, mainly in the first 7 months

of the year.

BILLIONS OF DOLLARS

140 -

1956END OF MONTH

1957 1958

SOURCES: BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, NATIONAL BUREAUOF ECONOMIC RESEARCH, AND COUNCIL OF ECONOMIC ADVISERS.

Borrowing costs and investment yields in capital and credit markets re-acted quickly to these developments. Short-term interest rates fell sharply.The rate on 91-day Treasury bills dropped significantly below 1 percent byMay, and the rate on prime commercial paper was reduced to as low as 11/%percent in June. In the market for longer-term funds, the yield on out-standing long-term United States Government issues fell to a low of 3.05percent in April, a decline of 19 percent from the October 1957 high. Bythe time the economy was turning from recession to recovery, the yield onhigh-grade corporate bonds had fallen 14 percent below its 1957 high,and the yield on high-grade municipal securities almost 19 percent. Pricesof FHA-insured and VA-guaranteed home mortgages in secondary marketshad risen significantly by midyear, and there was a rapid improvement inthe availability of mortgage investment funds throughout the country.

Housing and Home Financing

Nowhere in the economy was the stimulative effect of the easing of creditconditions more clearly visible than in residential building. Evidences ofunderlying strength in this area, in which activity had been declining moreor less steadily for two years, were apparent as early as mid-195 7. Lowvacancy rates, a somewhat quickened tempo of sales, and a reduction in

489916 O—5937


the number of unsold houses held by builders suggested a firming ofdemand. In numerous communities, the elimination of rent controls hadcreated conditions more favorable to the construction of apartment proj-ects; and significant progress had been made, through the provision ofneeded community facilities, in removing deficiencies that were impedingthe construction of single-family homes. In August 1957, minimum down-payment requirements on FHA-insured loans were reduced by administra-tive order, issued under the authority granted by the Housing Act of thatyear. And the increase in residential construction costs, which had beenparticularly rapid during 1955 and a good part of 1956, halted.

In this favorable environment, an increase in the flow of private fundsinto the home mortgage market served rather quickly to initiate an upturnin prospective residential building activity. Indeed, the reaction was somarked that it was necessary in January 1958 to request authority fromthe Congress to use additional funds to meet the costs of processing anunexpectedly large volume of applications for FHA loan insurance (Chart15).

Numerous administrative actions were taken to spur building activity.In December 1957, more than $175 million was released for purchases ofmortgages by the Federal National Mortgage Association (FNMA) andto assist urban renewal. Early in January 1958, the rule requiring thatclosing costs on FHA-insured loans be paid in cash—a rule which had beenimposed in 1955 as a check on the excessive use of credit—was rescinded.In February, a new program was launched by the Federal Home LoanBank Board to make loans available on a five-year basis to member asso-ciations, supplementing its shorter-term loan program. In March, adjust-ments were made in allowable discounts on VA loans, another $200 millionwas released to the FNMA for the purchase of mortgages under its specialassistance programs, and the Housing and Home Finance Agency wasdirected by the President to expedite construction on approved and plannedprojects for college housing, urban renewal, and public housing. Early inApril, minimum downpayment requirements on VA-guaranteed loans werereduced. In the same month, several additional steps were taken underauthority granted by the newly approved housing legislation. Adjustmentswere made in the interest rate on military housing to expedite the flow ofprivate funds into this type of investment; minimum downpayment require-ments were reduced on FHA-insured loans; the interest rate on VA-guaran-teed loans was adjusted upward to the maximum permitted under the law,in order to draw additional funds into this type of investment; discountcontrols, which had previously tended to block the flow of funds into FHA-insured and VA-guaranteed loans, were removed; and $325 million wasreleased by the President for purchases by the FNMA of mortgages onproperties in urban renewal areas and on housing for elderly persons andfor military personnel. Funds were made available in April, May, July,


and August^ under the FNMA special assistance program created by theApril housing legislation for the purchase of mortgages ranging in amountup to $13,500. At that time, the law required that qualifying mortgagesbe purchased at par. Since this assured financing of projects at costs belowthe price of funds obtainable from private sources, and because the lawauthorized the issuance of advance commitments, builders turned at onceto the Federal Government. By the middle of September, virtually all of the$1 billion authorized by this legislation had been committed to be paid outas mortgages were delivered.

As already indicated, evidence of an imminent upturn in home buildingwas visible even before the end of 1957, but the increase naturally laggedby some months behind the improvement in financial conditions. A smallincrease in housing starts began in March 1958, when the seasonally ad-justed annual rate rose slightly above the 915,000 reached in February. ByDecember 1958, starts of new homes had reached a rate of 1,430,000. Thevolume of new residential construction expenditures also increased, butsomewhat later than the rise in housing starts. Although other types ofconstruction activity continued at a high level, it was residential buildingthat supplied the major impetus from the construction field to generaleconomic recovery.

CHART 15

Housing Starts and Requests for Federal UnderwritingPrivate housing starts rose sharply after March 1958. Appli-

cations for FHA and VA financing increased before midyear,

then declined.MILLIONS OF UNITS

1.5

1.0

.5

- /"\ANNUAL R A T E S

PRIVATE NONFARMSTARTS

fm\ UNADJUSTED

1955 1956 1957 1958! NEW HOME CONSTRUCTION.

SOURCES: DEPARTMENT OF LABOR, FEDERAL HOUSING ADMINISTRATION (FHA), ANDVETERANS ADMINISTRATION (VA).

39


Unemployment Insurance BenefitsThe primary objective of our Federal-State system of unemployment

insurance is directly to aid those experiencing involuntary loss of employ-ment. However, by sustaining the aggregate purchasing power of consumersat a level higher than would otherwise prevail, these payments contributesignificantly to the stabilization of the whole economy.

In both these respects, benefit payments were materially helpful duringthe 1957-58 recession. Payments rose moderately in the third quarter of1957 and very sharply in the fourth quarter and after the turn of the year,as unemployment mounted. From July 1957 to April 1958, they directlyoffset about one-third of the decline in wage and salary disbursementsand, because they are not taxable, their effect in maintaining disposablepersonal income was even greater.

The contraction of job opportunities meant that unemployment was ex-tended for many workers beyond normal lengths and beyond the periodof benefit rights under basic laws. As a result, the number of personsexhausting their benefits rose from 82,000 per month in September 1957to a peak of 285,000 in July 1958.

Legislation was requested in March 1958 to lengthen temporarily theperiod of entitlement to unemployment benefits, and a bill was enacted inJune. States participating in this temporary program, or otherwise ex-tending the duration of benefits, accounted for 70 percent of covered em-ployment. The number of Unemployed persons eligible for its benefitsreached a maximum of 658,000 in late August 1958. Extra benefitsamounted to about $390 million during the year.

Defense Procurement

The Economic Report of January 1958 noted that the economy wasbeginning to feel the impact of an increase in defense expenditures. Inthe January 1958 Budget Message, $39.6 billion of new obligationalauthority was requested for the military functions of the Department ofDefense, and budget expenditures of $40.3 billion were contemplated forthe fiscal year 1959. The latter figure was $1.4 billion higher than theexpenditures estimated for fiscal 1958. Much of this increase resultedfrom higher planned expenditures for military research and developmentprograms, additional military construction, and a contingency reserve forthe acceleration of weapons development. In line with national securitypolicy, a supplemental appropriation request of close to $1.3 billion wasmade on January 7, 1958, as an advance on the program for the fiscal year1959; and in April, close to $1.5 billion of additional funds were requestedfor the fiscal year 1959.

The acceleration of defense procurement under the amounts appropriatedin the calendar year 1958 and prior years was soon evident in the awarding

40


of contracts for major items. In the third quarter of 1957, gross obligationsfor major procurement and production in the Department of Defense mili-tary functions amounted to $2.2 billion. They rose to nearly $3.9 billionin the fourth quarter of 1957, and reached $4.7 billion and $6.1 billion inthe first and second quarters of 1958, respectively.

Because changes in the backlog of unfilled orders permit the rate of cur-rent production to follow a more even course than would be dictated bythe flow of new orders alone, this acceleration in defense contracting wasnot accompanied by a corresponding increase of output in the affectedindustries. However, the rise in defense contracting in the first half of1958 did result in an expansion of defense production, and through itseffect on the inventory policies of defense contractors had a significantlystimulative effect on the economy.

Civil Procurement and Construction

Steps taken to accelerate needed Government procurement and con-struction in nondefense programs also had a helpful, though necessarilylimited, effect. Early in March, accelerated procurement of needed equip-ment and supplies was authorized, and instructions were issued to agenciescalling for the placement of as many planned orders as possible under avail-able authorizations. Stress was placed on the desirability of giving theseorders, insofar as possible, to firms in areas of substantial labor surplus.

Legislation was requested in March and enacted in April to make avail-able for immediate use one-half of the amounts requested for the purchaseof supplies and equipment in the fiscal year 1959. The General ServicesAdministration, the Veterans Administration, and other civilian agenciesordered substantial quantities of supplies under this plan, and the PostOffice Department placed orders for new trucks earlier than had beenscheduled. A program for accelerating the repair and modernization ofFederal buildings was also put into operation in March, and congressionalassent to requests for supplemental appropriations made it possible to con-tinue an accelerated rate of activity on Federal water projects already underway.

Acceleration of Grants-in-Aid and Tax Refunds

Allocations to State and local bodies under various Federal grant pro-grams, including aid for the construction of hospitals, medical researchfacilities, and airports, were accelerated during March and April so thatcontracts might be negotiated for projects that could be started immediately.

Special efforts were made by the Internal Revenue Service in 1958 tospeed up the payment of refunds to those who had overpaid their 1957income taxes. Refunds distributed in the first five months of the year ex-ceeded those of the same period of 1957 by $700 million.

41


Federal-Aid Highway Program

In order to maintain construction of the Interstate Highway System onschedule, legislation was requested to permit larger allocations to theStates than would have been possible under the original provisions of thelaw. Such legislation was enacted in April, and allotments were promptlymade. During the following six months, contracts were negotiated by theStates for the construction of Federal-aid highways to cost $3 billion, 80percent more than the amount obligated during the corresponding periodof 1957 (Table 3) . During this same six-month period, Federal paymentsto the States exceeded $1^4 billion. This, also, was more than 80 percentgreater than the amounts paid during the same months a year earlier.

TABLE 3.—Obligations and payments on Federal-aid highway programs, 1957—58

[Millions of dollars]

Period

1 957; First quarterSecond quarterThird quarterFourth quarter

1958' First quarter

Third quarterFourth quarter 3

New obligations for highwayconstruction 1

Total

781896803

1, 174

7701 3781,3991, 266

Interstateprogram

418410405833

386598737650

Otherprograms 2

364486398341

385780662615

Federal payments to States

Total

214235362423

269410643886

Interstateprogram

8264

120173

129251365509

Otherprograms 2

132171242250

140159278377

1 Includes Federal and State matching funds.2 Includes primary, secondary, and urban extension highways.3 Preliminary estimates by Council of Economic Advisers.NOTE.—Detail will not necessarily add to totals because of rounding.Source: Department of Commerce (except as noted).

Federal Credit Programs

Steps to help counter the recession were taken in a number of Federalcredit programs outside the housing field. Loan approvals by the SmallBusiness Administration during the first half of 1958 amounted to about$122 million, $33 million more than in the corresponding period of 1957.The Export-Import Bank contributed even more heavily to the increasedvolume of Federal lending activity. Its contribution through loan author-izations toward the financing of domestic economic activity is estimated tohave been more than $250 million larger in the first half of 1958 than inthe corresponding period of 1957.

Federal Fiscal Operations

Not all Federal actions taken to help counteract recession are reflected inFederal budget accounts. Many involved no additional budget outlaysat all and, where the placement of contracts and orders was involved, somepart of the impact on the economy came at an earlier date than would besuggested by their eventual reflection in the budget as expenditures. Evenso, significant interactions between economic developments and Govern-ment fiscal operations are revealed in the Federal budget.

42


In the fiscal year 1958, Federal expenditures were $2.5 billion higherthan in the fiscal year 1957—the twelve-month period which preceded the1957 downturn (Table 4). This increase was due in part to actions takenspecifically to help counter the recession but in part also to actions which,though taken for other reasons, had an expansive effect on the economy.Directly and indirectly, increases in Federal expenditures resulted in an

TABLE 4.—Federal budget receipts and expenditures, fiscal years 1957—60

[Billions of dollars]

Fiscal year

19571958 ..1959 'I960 i

Receipts

71 069. 168 077 1

Expendi-tures

69 471.980 977.0

Surplus ordeficit (-)

1.6-2.8

-12.9.1

1 Estimate.

Sources: Treasury Department and Bureau of the Budget.

additional demand for output at a time when private demand had slack-ened. Furthermore, a small part of the impact of the recession oneconomic activity in general was lessened by a decline in personal incometax payments. Because of the structure of our tax system, the decline inpersonal income after taxes was less than the decline in income beforetaxes.

CHART 16

FeNo

BILLI

100

90

80

70

60

0

10

0

-10

-20

deral Government Receipts and Expenditurestional Income Accounts

ixpenditures rose steadily in 1958. Receipts fell in the first part

of the year and increased thereafter.

ONS OF DOLLARS*

__ ^ EXPENDITURES _

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

SURPLUS_ ^ H Q i g i B a . ni|i||ii^ i 1 1 1

— & & DEFICIT

1 1 1 1 1 1 1 1 1 1 1 1 1 ! 1 1 1 1 1 1 1 1 1

1953 1954 1955 1956 1957 1958

* SEASONALLY ADJUSTED ANNUAL RATES.

SOURCES: DEPARTMENT OF COMMERCE AND COUNCIL OF ECONOMIC ADVISERS.

>

43


The effect of changes in the Federal Government's fiscal operations canbe followed more closely in our national income accounts. Total receiptsand payments as registered in these accounts are larger, and differ fromthose in the budget, mainly because of the inclusion of trust fund operations,the exclusion of intra-governmental transactions, and the timing of trans-actions on a basis more closely related to their economic effects.

These accounts show that in the third quarter of 1957 the Federal Gov-ernment was withdrawing more funds from the economy through receiptsthan it was putting in through disbursements. Aggregate receipts at theseasonally adjusted annual rate of $83.3 billion exceeded disbursementsby $3.4 billion. By the first quarter of 1958, on the other hand, receiptsfell short of disbursements by an annual amount of $6.6 billion; in thisquarter, therefore, the Federal Government's combined fiscal operationswere, on balance, exerting a stimulative effect on the economy. Thisturnabout of $10 billion—nearly three-fourths of which was reflected inthe decline in receipts—had a greater impact on the economy than did fiscaloperations in either of the two other postwar contractions (Chart 16).

POLICIES AFTER THE UPTURN

With production, employment, and income moving upward in the secondquarter of 1958, the economic policies of Government became concernedincreasingly with keeping the recovery on a sound basis and promoting asustainable, long-term expansion.

Credit and capital markets responded quickly to the rapidly strength-ening confidence that a firm recovery was under way. The large financingrequirements of the Treasury also influenced financial mairkets. Theupturn in interest rates, which reflected these changed views and conditions,was accentuated by the liquidation, beginning in June, of large speculativeholdings of United States Government securities. Interest rates subse-quently stabilized, however, and the liquidation appears not to have had anycontinuing effect on capital costs. To the greatest extent possible, thelarge-scale Treasury financing that was essential in these months was carriedout in ways designed to minimize inflationary consequences and yet not tohamper the recovery and expansion of the economy by putting undue pres-sure on long-term capital markets.

The events of 1958 presented an unusual variety of problems in the man-agement of the public debt. During the year, an increase of $8 billion inthe public debt had to be financed, and $53.2 billion of maturing marketableissues (exclusive of bills) needed refinancing. At the same time, thereduced pressure of private demand for credit made it practicable to under-take a lengthening of the average maturity of the Federal debt. In the firstsix months of the year, $19.6 billion of intermediate and long-term securitieswere issued, which resulted in a significant increase in the average length ofthe outstanding marketable debt. But after July, heavier than expectedsubscriptions to the June exchange bond and the later rapid decline in bond

44


CHART 17

Stock Prices and Credit

Stock prices rose to a record level in 1958.

INDEX, 1939*100420

380 -

340 -

300 -

2601956

BILLIONS OF DOLLARS

1957

4.5

4.0

3.5 *

A

STOCK MARKET CREDIT-^

(END OF MONTH)

l I l l 1 I l l l I

1958

i I i i i i i I i i i i i I i i i i i I i i i i i I1956 1957 1958

PERCENT OF MARKET VALUE100

MARGIN REQUIREMENTS

50

1956 1957 1956y CUSTOMERS' NET DEBIT BALANCES AND BANK LOANS TO OTHERS THAN BROKERS

AND DEALERS. EXCLUDES U. S. GOVERNMENT SECURITIES.

SOURCES: SECURITIES AND EXCHANGE COMMISSION, BOARD OF GOVERNORS OFTHE FEDERAL RESERVE SYSTEM, AND NEW YORK STOCK EXCHANGE.

45


prices caused the Treasury to repurchase a quantity of its newly issued secu-rities. During the latter part of July, the Federal Reserve suspendedtemporarily its policy of confining open market operations to short-termsecurities. For the remainder of 1958, the Treasury confined its borrowingsto maturities not in excess of 2/2 years.

It was evident by the end of the year that the Treasury's vast and dif-ficult financing operation was being satisfactorily concluded. By De-cember 31, most of the Treasury's prospective new money requirementsfor the current fiscal year had already been met. The Federal debt increased$6.6 billion during the second half of the year, but only about $2 billion ofadditional United States Government securities had been absorbed by thebanking system. The expansion of the money supply, measured in terms ofdemand deposits and currency in circulation, had been limited to about $3billion, or 2 percent, in the second half of the year. Most of the remainderof the Treasury's borrowing needs during this half-year were met from non-financial corporations and other short-term investors, rather than fromlonger-term holders of securities.

As business conditions improved, monetary and credit policy was shifted,with a view to limiting the expansion of bank credit to a sustainable pace.The increased restraint on bank reserves was marked by the sharp risein member bank borrowings that began in August. Discount rates wereraised to 2 percent in August and to 2/2 percent in October, as short-termmoney rates moved upward. Margin requirements on new stock purchaseswere raised from 50 percent to 70 percent in August and to 90 percent inOctober, to prevent the excessive use of credit in stock market transactions,equity prices having risen in the meantime to record levels (Chart 17).

The response of interest rates to the recovery of the economy and theshift in monetary policy was rapid. Within the short space of four months,a rise in short-term borrowing costs wiped out much of the previous re-duction, long-term capital costs returned to the levels they had reachedin the late summer and early fall of 1957, and funds became more costlyand somewhat less readily available in the mortgage market. By the closeof the year, capital and credit markets had moved a considerable distancetoward the conditions prevailing 18 to 24 months earlier.

Federal receipts and disbursements also reflected the economic andfinancial developments of the recovery period. The aggregate of the Fed-eral Government's disbursements, as registered in national income accounts,rose from a seasonally adjusted annual rate of $82.8 billion in the firstquarter of 1958 to $90.6 billion in the final quarter. Meanwhile, Federalreceipts of all types, which had declined under the impact of recession toan annual rate of $76.1 billion by the first quarter of 1958, rose to a rateof $83.4 billion in the fourth quarter.

The gap between the Federal Government's disbursements and receiptsnarrowed, from a rate of $9.9 billion in the second quarter of the year to$7.2 billion as the year ended, as the fiscal operations of Government, which


had tended earlier in the year to cushion the contraction, moved in thedirection of restoring a balance between outlays and receipts and therebycountering potentially inflationary tendencies. This direction of change inthe fiscal operations of Government is favorable to sustainable economicgrowth and improvement. Its beneficial effects would be extended byenactment of the financial plan presented to the Congress in the 1960 budget.

47


Chapter 4

A Program for Economic Growth

with Price Stability

THE EMPLOYMENT ACT OF 1946, under which this Report issubmitted to the Congress, lays principal emphasis on the need for

public and private policies to promote high levels of employment, produc-tion, and purchasing power. Achievement of these goals has assumedincreasing importance with the addition of a heavy and continuing burden—the maintenance of strong national defenses—which our economy mustcarry while raising the living standards of an increasing population andhelping to discharge the Nation's international responsibilities.

Experience during the life of the Act has, however, directed attention moreand more to the need for a framework of reasonable price stability in order toachieve sustainable economic growth. A persistent upward movement ofprices would do great harm to our economy. Quite apart from theinequities it would impose on those whose incomes would not rise cor-respondingly, it would narrow markets at home for important groups ofgoods, lower our capability to compete in the world's markets, and byrequiring restrictive fiscal and monetary policies, lessen our chances offully realizing our potential for economic growth. If price increaseswere to accelerate, the continuing upward movement would sooner or laterundermine the confidence on which our economic system depends andwould eventually release drastic corrective forces. Since some of the forcesthat tend to produce an upward movement of prices are themselves expres-sions of the process of vigorous growth in a free economy, the objective ofnational economic policy must be to balance encouragement and restraint.

Clearly, reasonable stability of costs and prices cannot be preserved byany single policy or measure, nor by Government acting alone. To achievethe goal of inflation-free, sustainable growth requires that we adopt appro-priate policies and modify certain practices in both the public and privatesectors of the economy. As noted in Chapter 1, every group in the Nationhas a responsibility to help check the forces which contribute to increases incosts and prices. Although success depends on a combination of appropriatepublic and private policies and actions, Government must supply the re-quired leadership and direction for its achievement.


A BALANCED 1960 BUDGET

The principal means by which Government can express leadershipin the effort to preserve price stability is to conduct its own financialaffairs prudently. The budget submitted to the Congress for the fiscalyear 1960, which balances expenditures with receipts at a level of $77billion, seeks to fulfill this responsibility.

The expenditures estimated for fiscal 1960 are $3.9 billion less thanthose estimated for the present fiscal year. A few items account for mostof this difference. First, an important part is accounted for by a nonre-curring expenditure of about $1.4 billion for the increased quota of theUnited States in the International Monetary Fund, which is recommendedfor the fiscal year 1959.

Second, during the current fiscal year the Federal National MortgageAssociation will purchase most of the mortgages for which commitmentswere made under the housing legislation enacted in April 1958. Net pur-chases of mortgages under this special assistance program in fiscal 1960 willbe about $360 million less than in fiscal 1959.

Third, all the budget transactions in 1960 of the Federal National Mort-gage Association, and those of the Export-Import Bank as well, are beingput on a self-sustaining basis by aligning new credit extensions more closelywith collections on outstanding credits and by sales of portfolio assets.The resulting reduction in net budget expenditures between 1959 and 1960will be over $300 million for the Federal National Mortgage Associationand almost $250 million for the Export-Import Bank.

Fourth, the expiration on April 1, 1959 of the law providing for a tem-porary extension of the duration of unemployment compensation paymentswill result in a decrease of over $400 million in expenditures in the fiscalyear 1960.

Fifth, the termination of the acreage reserve will reduce expenditures inthe fiscal year 1960 by more than $700 million, although a partially off-setting increase will occur in the conservation reserve program.

Sixth, proposals will be made for rate adjustments to cover the costsof operating the postal establishment, except for specified public services;these proposals will lower budget expenditures by $350 million. This reduc-tion, together with nonrecurring items affecting budget expenditures inthe fiscal year 1959—retroactive pay increases and higher payments fortransportation—account for the decrease of the postal deficit by $645 millionin the fiscal year 1960.

Seventh, the funding of retroactive pay increases to Federal civilianemployees, apart from the payments to postal employees mentioned above,added some $250 million to expenditures. These payments were mademainly in the fiscal year 1959 and do not recur in the new fiscal year.

Finally, expenditures of other Federal departments and agencies willbe reduced, to the extent that this is consistent with the satisfactory per-formance of their respective responsibilities.

49


Although the projected expenditures are lower in the aggregate, theyinclude increased outlays for many programs that support the growth ofour economy and assist growth elsewhere in the Free World. Outlays forresearch and development will be increased over $600 million, withemphasis on space exploration, peaceful as well as military uses of atomicenergy, and basic science. Federal expenditures to improve education,especially in science and mathematics, will rise significantly. Federalexpenditures for the conservation and development of land and waterresources (including agricultural) will rise almost $200 million. All Federalexpenditures for civil public works—including grants to States, mainlyfrom the Highway Trust Fund—will be increased $700 million; at $5.2billion, they will be higher than ever before. Larger expenditures areestimated for other grants and long-term loans to foster community de-velopment. Expenditures by the Federal Aviation Agency, primarily for theconstruction and operation of new facilities for the Federal airways system,will increase almost $100 million. Programs will be proposed for assistanceto areas where unemployment that is considerably above the national aver-age persists, and for grants to localities for the modernization of airports;however, the latter will not affect expenditures until after the fiscal year1960. Higher expenditures are expected for economic and technical co-operation under the Mutual Security Program, but because of a reductionin the military assistance portion, expenditures for this Program as a wholewill be decreased.

The revenues projected in the 1960 budget are substantially higher thanthose estimated for the current fiscal year, reflecting the confident expecta-tion that economic recovery will be extended into the calendar year 1959and beyond.

Certain actions by the Congress are needed to give effect to the 1960financial plan. First, changes are required in the laws affecting Federalrevenues: the corporate income tax and excise taxes on automobiles andparts, cigarettes, distilled spirits, and wines and beer should be continuedat their present levels for one year beyond June 30, 1959; a temporaryincrease in the Federal motor fuel tax should be enacted to continue con-struction of the Interstate Highway System on a self-sustaining basis; the taxon aviation gasoline should be raised, and a similar rate for jet fuels, now taxfree, should be enacted, to help pay the Federal cost of operating the airways;and a revision in postal rates should be authorized. The Congress has beenrequested to enact a permanent plan for the taxation of life insurance com-panies, and it will be asked to adjust present laws relating to the taxationof cooperatives. The Congress will also be requested to specify the treat-ment processes which shall be considered as mining for the purpose ofcomputing percentage depletion allowances in the case of mineral products.This amendment, prompted by court decisions and similar to that recom-mended last year for cement and clay products, would prevent an unintended


extension of depletion allowances to the sales price of finished products.Recommendations will also be made for certain additional user charges.

Second, the Congress will be requested to grant wider administrativeauthority for setting maximum interest rates for various credit programsand to make certain adjustments in rates. These include the VeteransAdministration programs of home loan guaranties and direct home loans,the rental (including armed services) and cooperative housing programsof the Federal Housing Administration (Sections 207, 803, and 213 ofthe National Housing Act), the college housing program of the Housingand Home Finance Agency, the loan program of the Rural ElectrificationAdministration,, and ship mortgage loans of the Maritime Administration.The flow of private funds into home construction and other types of build-ing is restricted when market interest rates are high relative to the legallyprescribed ceiling rates; as a result, the volume of construction is restrictedand an increased part of its financing is shifted to the Federal Government.

Third, improvements are needed in the procedures by which appropria-tion bills arc enacted into law. The Congress will be requested to grantthe President authority to veto, or reduce the amounts for, specific items inappropriation bills and in other bills authorizing expenditures.

OTHER GOVERNMENTAL FINANCIAL POLICIES

Acceptance by the Congress of the expenditure level of the 1960 budgetwould be the most important single step in discharging Government's respon-sibility to help preserve the stability of prices and costs through prudentmanagement of its own financial affairs. Moreover, adherence to theproposed expenditure program would provide an opportunity, as budgetaryresults improve with economic recovery, to promote economic growth bymaking a start on constructive tax reduction and reform. The growth ofthe American economy was significantly aided by the 1954 tax changes.But our tax burden remains heavy, and in important respects Federal taxesare levied in ways that tend to weaken the incentives on which we mainlyrely for vigorous economic expansion. If our economy grows at the expectedrate, and if Government spending is held within the limits set in the pro-posed budget, a significant additional step in tax reduction and reformcan be taken in the reasonably foreseeable future.

Federal debt management policies are also pertinent to the achievementof sustainable economic growth without inflation. In the formulation ofthese policies, account must be taken of the necessarily far-reaching im-pact on the economy of the continual refinancing of large parts of thepresent debt of $283 billion, of which $228.5 billion is held by the public.The magnitude of this refinancing problem is indicated by the fact that$49 billion of the marketable debt outstanding at the end of 1958, exclusiveof $24 billion of 13- and 26-week Treasury bills, will mature in 1959. This


is in addition to the cash borrowing in the market required by seasonalneeds and by the redemption of nonmarketable debt.

Insofar as possible, financial requirements will be met in ways designedto reduce the frequency of Treasury issues and to improve the structureof the debt. By offering securities which are attractive to investors outsidethe banks, particularly to savings institutions, pension funds, individuals,and other long-term investors, the Treasury can avoid undue reliance onbank credit and thus assist, rather than interfere with, the exercise ofmonetary policies appropriate to the maintenance of sustainable economicgrowth and price stability. The 4 percent bonds due in 1980 that wereannounced in January 1959 are an example of such offerings.

As indicated in Chapter 2, a large part of the financing of the 1959deficit had already been completed by the end of the calendar year 1958without impairing the effectiveness of monetary policy. Completion ofneeded financing will bring the public debt to $285 billion before June30, 1959, and it will be necessary to renew the request made of the Congresslast summer for a permanent debt limit of $285 billion—$2 billion higherthan at present. Adherence to the 1960 financial plan and receipt ofrevenues as expected would obviate the need for a larger increase in thepermanent debt limit. But a temporary increase of an additional amountwill be needed to cover heavy borrowing requirements in the first half ofthe next fiscal year. These borrowings would be repaid, however, beforeJune 30, 1960.

Finally, the maintenance of a framework of price stability requires theavoidance of excessive extension of credit. Responsibility for monetaryand credit policies rests with the Federal Reserve authorities who haveindependent status within Government. However, to help coordinate themonetary and credit policies so determined with the economic and financialpolicies of the Executive Branch of Government, frequent meetings ofprincipal officials have been held for the exchange of views. These meetingshave proved useful and will be continued.

ADDITIONAL GOVERNMENTAL ACTIONS To MAINTAIN PRICE STABILITY

Adherence to the financial plan presented in the 1960 budget and thepursuit of appropriate monetry, credit, and debt management policieswould help attain rising production and employment at stable prices.Governmental actions in other areas can also help to maintain price stabilityas our economy expands.

First, the Congress is requested to amend the Employment Act of 1946 tomake reasonable price stability an explicit goal of Federal economic policy,coordinate with the goals of maximum production, employment, and pur-chasing power now specified in that Act. Such an amendment wouldstrengthen Government's hand in restraining inflationary forces and would


help build a public opinion favorable to the adoption and vigorous applica-tion of needed measures. This amendment would make it clear thatGovernment is as determined to direct its policies toward maintenance ofprice stability as it is to employ them in combating economic contraction.

Second, a Cabinet Committee on Price Stability for Economic Growth isbeing established to follow governmental and private activities affectingcosts, prices, and economic growth; initiate studies by Government or bygroups of private citizens of price stability in relation to economic growth;seek ways to enhance productivity in the American economy and to builda better public understanding of the need for reasonable price stability in afree society and of the conditions necessary to achieve this objective.

Third, a Committee on Government Activities Affecting Prices and Costsis being established, to follow the operation of all relevant Federal programs,including those involving procurement, construction, stockpiling, and com-modity price support, and to make recommendations to the appropriatedepartments or agencies or to the President for the administration of theseprograms in line with the objective of reasonable price stability.

Fourth, questions concerning the level and movement of consumer prices,changes in wage rates and earnings, and changes in productivity have as-sumed such significance in our economy as to require more and better sta-tistics concerning them. Accordingly, the Bureau of the Budget has beenrequested to accelerate programs for enlargement and improvement ofpublic information on prices, wages and related costs, and productivity.

ADDITIONAL MEASURES FOR ECONOMIC GROWTH

The Federal policies and actions outlined above will do much to assurea vigorous growth of our economy, free from inflation. However, additionalmeasures should be taken by Government to promote the Nation's economicstrength and well-being.

Competition

The vitality of our economic system depends in large part on vigorouscompetition, which would be enhanced by certain improvements in ourantitrust laws. The Congress is urged to act favorably on five proposals, asfollows: to authorize Federal regulation of the merger of banking institutionsaccomplished through the acquisition of assets; to require notification to theantitrust agencies when firms of significant size that are engaged in inter-state commerce propose to merge; to grant the Attorney General powerto issue civil investigative demands under which the necessary facts maybe elicited when civil procedures are contemplated in antitrust cases; tomake cease-and-desist orders issued by the Federal Trade Commission forviolations of the Clayton Act final unless appealed to the courts; and toauthorize the Federal Trade Commission to seek preliminary injunctionsin merger cases where a violation of law is likely.

53489916 O—59 5


Small BusinessLegislative actions taken last year will greatly enlarge the opportunities

for the formation of new businesses and yield important benefits to existingsmall concerns and to the economy generally. To facilitate the access ofsmall business concerns to capital and credit, the Small Business Adminis-tration was made permanent; its loan authorization was substantiallyincreased; and it was authorized to help State and local development com-panies extend financial and other aids to small businesses, and to licenseand purchase the obligations of investment companies especially organizedto provide capital on a long-term debt and equity basis to small businesses.

Small concerns may also be expected to benefit from certain changes inthe tax laws enacted by the last Congress. These include ordinary-lossrather than capital-loss treatment for losses incurred on the investment ofprivate funds in small business investment companies; similar treatmentof losses incurred by small business investment companies or by an originalinvestor in a small business concern (up to a limited amount) ; allowanceto small business investment companies of a 100 percent tax deduction forintercorporate dividends received, rather than the 85 percent generallypermitted; provision of an additional depreciation allowance for the acquisi-tion of new and used tangible personal property; the option for certainsmall corporations of having their profits taxed directly, as if they werepartnerships; the option to pay estate taxes over a period of up to 10 years,where the estate consists largely of investments in closely held business con-cerns; extension of the carryback of net operating losses from two to threeyears; and an increase, from $60,000 to $100,000, in the minimumaccumulated earnings credit.

Other steps taken in 1958 include an Act to improve the opportunities ofsmall business concerns in obtaining Government procurement contracts,and a new program of the Small Business Administration to facilitate thesharing by small companies in Government research and developmentcontracts.

The Cabinet Committee on Small Business, which was established in1956, continues to follow closely the position of small firms in the economy.A recommendation made by the Committee in its Second Progress Reportis called to the attention of the Congress for favorable action, namely thatthe Securities and Exchange Act be amended to extend the privilege ofthe simplified Regulation A filings to a wider range of security issues.

Although significant benefits for small business concerns may be expectedfrom the actions already taken and from those proposed, the long-run healthof small concerns also requires an environment of satisfactory labor-manage-ment relations and opportunities to retain a larger share of business earn-ings. The first of these conditions would be advanced by enactment ofthe proposals made below for changes in legislation governing labor-man-agement relations. The second would be advanced by adherence to theexpenditure level proposed in the budget for the fiscal year 1960, which

54


would bring closer the time when additional steps can be taken to make ourtax system more conducive to economic growth.

Personal WelfareSubstantial progress has been made by the States in recent years in raising

the standards of the unemployment insurance system. Benefits have beenincreased and their potential duration lengthened. Coverage has beenbroadened to include more than four-fifths of all employees in nonagricul-tural establishments.

Still further improvements are necessary and desirable. Enactment oflegislation is requested to provide for extending the coverage of the systemto employees of firms having fewer than four workers; to make its benefitsavailable to employees of Federal instrumentalities, nonprofit organizations,and certain other groups; to bring the provisions of the District of Columbiasystem up to those recommended for the States; and to provide for extendingthe system to workers in Puerto Rico. Benefits should be raised so that themajority of covered workers will be eligible for payments equal to at leasthalf their regular earnings; and the maximum duration of benefits shouldbe lengthened to 26 weeks for any person who qualifies for any benefit andwho remains unemployed that long.

These steps would greatly enhance the contribution that the unem-ployment compensation system makes to our economy's capacity to resistrecession. During the recent recession, this system offset directly about one-third of the decline in wage and salary payments. Supplemented by tem-porary legislation providing longer duration of eligibility for employees whoexhausted their entitlement to benefits, unemployment insurance paymentssubstantially alleviated hardships arising from loss of income.

In an industrial economy, occupational accidents may result in hardshipfor an employee and his dependents. It is therefore again recommendedthat the States, which have primary responsibility, strengthen their systemsof workmen's compensation.

Certain legislative improvements are required in programs that lie withinFederal jurisdiction. Proposals will be made to the Congress to extendthe coverage of the Fair Labor Standards Act. Favorable consideration isagain requested for legislation to revise the ambiguous and outmoded pro-visions of the 8-hour laws applying to Federal and federally assisted con-struction projects and to carry out the principle of equal pay for equal workwithout discrimination based on sex.

The Economic Report of 1958 outlined the responsibility of the Gov-ernment to maintain a framework of laws to protect the basic rights ofthe individual, to promote integrity in labor-management relationships,and to foster better industrial relations. Proposed legislation to accom-plish these purposes having failed of enactment, the Congress will againbe requested to require reporting and disclosure of financial dealingsbetween employers and employee representatives and their agents, and to

55


require public reports of union finances, organization, and procedures.Requested legislation will also prescribe standards to promote democraticprocedures in union affairs, including the election of union officers, andto correct abuses in the supervision of the affairs of subordinate bodies.Modifications will be proposed in the law governing secondary boycotts,organizational and recognition picketing, and representation elections, andauthority will be requested for the States to act in labor-management dis-putes where the National Labor Relations Board declines jurisdiction. Leg-islation will also be requested to correct shortcomings in the Welfare andPension Plans Disclosure Act enacted by the 85th Congress.

Area Assistance

Despite the forward economic strides of the Nation since the war, somecommunities have suffered substantial and persistent unemployment, whenmeasured against national experience. Federal assistance to these com-munities is required not only to mitigate the hardships of individuals andfamilies but also to provide for the use of underutilized resources, to theenhancement of the national welfare.

A program of assistance through development loans and through grantsfor technical studies will be recommended to the Congress in order that thesecommunities may share in the general economic advance. By design andadministration, the program would seek to complement and reinforce com-munity efforts to help themselves, to encourage maximum participation byState and local agencies and private investment institutions, and to createnew job opportunities instead of merely transferring jobs from one localityto another.

The program would also provide technical aid to towns heavily dependenton a major industry and to rural low-income areas, to help them achievegreater economic stability through diversification.

Agriculture

Recommendations will be made to the Congress by the Executive with aview to reducing the cost of price stabilization operations, stopping theincrease of surplus stocks, and making progress in the reduction of accumu-lated supplies. Major revisions are overdue in the legislation relating tothese agricultural programs. In their present form, these statutes have theeffect of adding many billions of dollars annually to the Federal budget. Netbudget expenditures for agricultural price and income support increasedfrom an annual average of $3.5 billion during the fiscal years 1955-58 toan estimated $5.4 billion in the fiscal year 1959.

What is more, experience has demonstrated that it is very difficult toforetell reliably how much the Federal Government will be required toexpend in a given fiscal period under what are essentially open-end com-mitments for price support, a fact that greatly complicates the managementof the Federal Government's fiscal affairs.

56


Even these large expenditures have not brought farm output into linewith commercial demands at home and abroad while maintaining andstabilizing farm income. Ever since the Korean conflict, the aggregateoutput of our farms has exceeded these demands by subs antial amounts.Steps taken to reduce surpluses while protecting farm incomes—CommodityCredit Corporation support of prices at slightly declining minimum levels,retirement of acreage from cultivation, and large exports under loan orsubsidy arrangements—have not succeeded in preventing an increase insurplus stocks. By June 30, 1959, there will be a record carryover of 1.3billion bushels of wheat, the equivalent of more than 2 years of domesticrequirements, and a carryover of 1.8 billion bushels of corn. Stocks ofcotton remain excessive; stocks of tobacco and rice are large; and if it werenot for the surplus disposal program, stocks of dairy products and of fatsand oils would be high.

The investment of the Commodity Credit Corporation in price supportedcommodities is expected to rise to more than $9 billion by June 30, 1959,and to almost $10.5 billion by June 30, 1960. To carry out existing commit-ments on price support activities will probably require use of most of theCorporation's borrowing authority of $14.5 billion. Expenditures of theFederal Government for storage, transportation, and interest on these sur-plus holdings are estimated at $850 million for the fiscal year 1959 and at$1.2 billion for the fiscal year 1960.

The recent sharp increase in the cost of our agricultural programs is duein part to exceptionally favorable crop conditions in 1958. But a majorpart of the increase is due to the programs themselves. These are notproperly adjusted to the rapidity with which farm technology is improving.Remedial legislation should be enacted without delay. Even though actiontaken at this time can become effective only in the fiscal year 1961, steps tobring the price stabilization expenditures of the Federal Government undercontrol and to reduce them materially are urgently needed.

Actually, the majority of farm people derive little or no benefit from ouragricultural price support legislation. Cattle ranchers, producers of poultryand eggs, and growers of fruits and vegetables operate their farms todaypractically without price supports. Only some 1.5 million of our commercialfarmers are the recipients of price support outlays in any material amounts,and, within this group, those with the higher incomes are the main benefi-ciaries. More than 2.5 million farmers—whose annual sales are less than$2,500 and who produce each year only about 9 percent of our marketedfarm products—receive only very small supplements, or none at all, to theirincomes from Government expenditures for price support.

Foreign Economic Policy

Next to maintaining the mutual security of the Free World, the chiefconcern of the United States in its foreign economic policy is to promoteconditions favorable to the exchange of goods, services, technology, and

57


capital among nations, and to assist in economic growth and develop-ment. The efforts to rebuild and expand the economy of Western Europeand Japan, to which we have contributed so much, have met with remark-able success. We can now look forward to increasingly effective par-ticipation by the industrial nations of Europe in the task of supplying creditand investment capital, along with goods and services, to the less developedareas of the world.

The United States will continue to share with friendly nations its ad-vanced technology and the achievements of its scientific research in publichealth, resource development, agriculture, industry, and commerce. Thispolicy will be continued through our technical assistance programs, as wellas through international agencies.

The impressive gains of the European economies have been accompaniedby efforts at removing hindrances to foreign trade. At the end of 1958,the leading European countries made their currencies convertible for non-residents. Simultaneously, the European Payments Union was replacedby the European Monetary Agreement, which had been prepared by theOrganization for European Economic Cooperation several years earlier,to become effective when currency convertibility measures were taken.Although these countries have not given up their foreign exchange control,their step implies the intention of proceeding further with the removal ofdiscriminatory controls and other import restrictions, beyond the liberaliza-tion measures adopted in recent months by the United Kingdom, France,and others.

The European Economic Community of six continental countries, whichcame into existence on January 1, 1958, has lowered duties by 10 percentand liberalized quota restrictions as a first move in connection with thedevelopment of its common market. Some of these concessions have beenextended to other countries.

The United States is favorably disposed toward such regional reductionand eventual elimination of trade barriers; but as a signatory to the GeneralAgreement on Tariffs and Trade, it insists on the principle that such regionalarrangements must lead to the creation of more favorable trade relationswith other countries. The new authority provided by the Congress last yearby the four-year extension of the Trade Agreements Act will be used infurther efforts to reduce trade barriers on a reciprocal basis, and the enlargedloan authority of the Export-Import Bank will promote United Statesexports as well as contribute to economic growth abroad.

The increasing participation of other industrial countries in financing theflow of trade and the development of industrially retarded countries is reas-suring and welcome, inasmuch as additional economic resources are thusbrought into action. However, the task of financing sound and sustainableeconomic development in large areas of Latin America, Africa, and Asiais of such scope and urgency that it requires joint efforts. In this connec-


tion, the Government of the United States, together with other members ofthe International Monetary Fund and the International Bank for Recon-struction and Development, is proposing that the resources of those institu-tions be enlarged. Special legislation will be proposed to the Congress.

The United States is exploring the feasibility of cooperating with othercountries in their efforts to establish regional agreements on freer tradeand economic development. An inter-American development bankinginstitution is under consideration. The United States has also expressedits readiness to support a regional Arab development institution, should theArab states desire it and support it with their own capital. Also understudy is an International Development Association, which would be affiliatedwith the International Bank for Reconstruction and Development andwould extend to less developed countries loans repayable wholly or partiallyin the currency of the borrowing country. Requests for authorizations forsome of these programs will be submitted in due time to the Congress.

The Development Loan Fund, which began in 1958 to extend loans foreconomic growth in less developed countries, needs additional obligationalauthority.

Authorization for sales of surplus agricultural commodities for foreigncurrency under Title I of Public Law 480 and for the donation of suchcommodities for famine relief and other assistance under Title II expiresDecember 31, 1959. In view of the continued existence of heavy surplusesof farm products and the desirability of using such stocks constructively, theauthority should be extended.

CONTINUING PROGRAMS FOR ECONOMIC GROWTH AND IMPROVEMENT

The need for new programs or for legislative changes in those alreadyin existence should not cause us to neglect the contributions to economic im-provement that are made by continuing programs that return to the atten-tion of the Congress only with respect to the amount of funds they annuallyrequire or for occasional legislative revision.

Under the 1960 budget, the Federal Government will continue activitieswhich will strengthen the Nation in health, education, scientific develop-ment, transportation, and other important areas. The Federal Govern-ment's efforts will, of course, be supplemented by the efforts of State andlocal governments and by countless private undertakings. This blend ofpublic and private action will enable us to take full advantage of theopportunities that lie before us for an improvement in the level of living.

Nowhere are these opportunities more plainly registered than in recentCensus Bureau projections of population growth, which has proved a sureavenue of economic progress in American circumstances. The lowest ofthese new projections indicates a rise to 202.5 million persons by 1970,from the present 175 million; the highest, a rise to 219.5 million. Thecorresponding estimates for 1975 are 215.8 million and 243.9 million.

59


Projections for selected age groups suggest the magnitude of the develop-ing demand for schooling. By mid-1962, children of elementary school age(5-13 years) should number about 34.5 million, 3.3 million more than thecorresponding total for mid-1958; and the annual growth of this groupmay exceed 1 million during the remainder of the 1960's. The numberof children of high school age (14-17 years), which was about 10.6 millionin mid-1958, may increase to 12.9 million by mid-1962 and to 15.9 millionby mid-1970. By 1962, the number of college-age persons (18-21) maybe about 10.7 million; in 1975, about 16.3 million, or twice the 1957 figure.

Education

To discharge fully their traditional obligation to the younger generation,State and local governments will obviously have to increase their effortsgreatly to provide needed school buildings, equipment, and teachers, par-ticularly for secondary education. State and private institutions will haveto do likewise to accommodate greater numbers of college and graduatestudents.

In the areas of secondary and higher education, additional support is beingrequested for the science and education programs administered by theNational Science Foundation and the Department of Health, Education,and Welfare. Projected expenditures of the first of these agencies for scienceeducation during the fiscal year 1960 are almost one-fifth greater than theestimated expenditures for 1959 and four times the 1958 outlay. The in-creased expenditures would be made for graduate and faculty fellowshipsand for training high school and college teachers of science and mathematics.

Further Federal assistance to secondary and higher education is providedunder the National Defense Education Act of 1958, through contributions tostudent loan funds; matching grants to States for equipment needed in teach-ing science, mathematics, and foreign languages; fellowships for graduatestudy; grants to States for guidance, counseling, and testing services; andsupport of training programs for foreign language teachers. Two otherimportant features of the Act are the authorization of Federal financialassistance to States for improving educational statistics, and the authori-zation of a unit in the Federal Government to provide or arrange forabstracting, translating, and other services to improve the distributionof scientific information.

Personal Security and Health

Programs designed to enhance personal security also contribute to theNation's economic strength and well-being. Protection from want in oldage, for families losing breadwinners, and for persons permanently disabledis afforded by the Federal Social Security system. Broadening of the cover-age of the Old Age, Survivors, and Disability Insurance program in recentyears to nearly 90 percent of all persons in paid employment, together with

60


the normal increase in the number of persons eligible for benefits, has in-creased benefit payments from $5.7 billion in 1956 to $7.3 billion in 1957, andto an annual rate of $8.9 billion at the end of 1958. The increase in 1958played an important role in helping to maintain the flow of incomes duringrecession. Benefits are currently being paid to more than 12 million persons,and the average monthly benefit for old age is approximately $66. Amend-ments adopted in 1958 increased benefit amounts, which had been prac-tically unchanged since 1954, by 7 percent, effective in January 1959.Taxes were also increased in order to strengthen the actuarial basis ofthe program.

Federal contributions to State-operated public assistance programs inbehalf of the aged, the blind, the disabled, and dependent children willcontinue to rise in fiscal year 1960. An Advisory Council authorized byrecent legislation is studying the appropriate distribution of financial respon-sibility between the Federal Government and the States.

Through the Rural Development Program initiated in 1955 and carriedforward through existing agencies under the guidance of an interagencycommittee of the Federal Government, efforts are being made to aid farmfamilies most in need of assistance. The program now reaches more than100 rural counties. Beneficial results in the form of increased job opportu-nities, improved farm practices, and higher standards of living are alreadyevident.

In the area of health, sharply increasing outlays have been made in recentyears for the medical research and training programs administered by the Na-tional Institutes of Health in the Department of Health, Education, andWelfare. Sizable funds have also been expended to assist the construc-tion of hospitals and health research facilities. Expenditures will increasefurther in the fiscal year 1960. The budget also provides larger sums forthe enforcement of the food and drug laws, including administration of thenew chemical additives amendment enacted in 1958.

Construction and Transportation

The increase in population and changes in the location patterns of peopleand industry will require greater public and private investment in fieldsother than education. The formation of new families and the continuingmovement from cities will require additional residential construction andplaces of worship and commercial and community facilities of all kinds,including utilities. Responsibility for these undertakings rests largely onprivate individuals and firms, but Government programs of loan insuranceand guaranty make an important contribution to home construction. Theeffectiveness of these programs would be materially increased by favorableaction on the proposals made to the Congress to grant greater discretionaryauthority to the Executive for determining maximum interest rates on cer-tain insured, guaranteed, and direct loans. Other proposals for changes

61


in present laws affecting housing and home financing and the program ofFederal assistance to urban renewal projects will be made to the Congress.

Construction of Federal-aid highways, which form a vital part of the net-work of roads connecting our cities, is increasing rapidly. The interstatehighway program, enacted in 1956, authorizes construction of 41,000 milesof limited-access roads linking 90 percent of all cities with 50,000 or moreinhabitants, as well as many smaller places along the way. The Federalshare of the cost is financed out of revenues obtained from highway users.Proposals are being made to keep the program on this self-supporting basis.In the calendar year 1958, total capital outlays for Federal-aid and all othernew highway construction reached $6.2 billion, about $600 million morethan in 1957 and about three and one-half times the outlay of a decade ago.Still higher expenditures may be expected in the present calendar year andin several succeeding years.

Recent legislation will also strengthen the air, rail, and waterway com-ponents of the Nation's transportation system. A unified Federal AviationAgency will allocate air space, develop and operate a common systemof navigation facilities for civil and military aircraft, and make and enforcesafety regulations for civilian aviation. The Transportation Act of 1958and the repeal of Federal excise taxes on the transportation of property,also enacted last year, will help improve the physical and financial conditionof the railroads.

The St. Lawrence Seaway, which will open in the spring, will providedeep water transportation almost half-way across the continent, reducingshipping costs and directly serving eight States that have almost two-fifthsof the population and constitute the agricultural and industrial heart of theland. User tolls will make the Seaway, constructed with Federal fundsin a joint venture with the Canadian Government, a self-liquidating project.

Water Projects and Mineral ExplorationMany public and private programs are improving the Nation's base of

material resources. Water and related power projects under way willfacilitate the economic development of the Western states. Federal ex-penditures for such projects are much higher than they were a few yearsago, and further increases are expected in 1960 and 1961. Progress towardeconomical conversion of saline to fresh water by chemical and other tech-niques will be assisted by 1958 legislation for the construction of demonstra-tion plants and by increased appropriations for the fiscal years 1959 and1960. Other contributions to the resource base are envisaged. In 1958,legislation authorized a continuing program of assistance to minerals ex-ploration. The Congress is requested to enact a long-range program forconservation of the Nation's supply of helium gas, encouraging maximumprivate participation in, and financing of, this endeavor.


Research and DevelopmentThe Nation's technological base is being strengthened by Government pro-

grams in support of scientific research and development. Many of theseprograms, though undertaken initially or primarily to maintain the Nation'smilitary might, contribute increasingly to peaceful technology. Thus, thebillions of dollars spent annually for military research and development areextending the horizons of civilian industry, providing experience for pro-fessional and other skilled workers, and expanding private opportunities forinvestment in new materials, processes, and products.

The benefits to be derived from research and development activities canbe enhanced by closer working relations between Government and privateinterests. Large companies and universities already participate extensivelyin Government contract or Government-supported research, supplementingthe substantial endeavors conducted on their own account. The researchcapabilities of small companies are necessarily limited, but many smallfirms have formal programs under way and some have achieved notable suc-cess. Explicit provision for the encouragement of research—direct andGovernment contract—by small businesses was made in the 1958 revisionof the Small Business Act.

Most current research and development activity involves the useful appli-cation of known principles rather than the search for new avenues of funda-mental advance. Greater attention can appropriately be given by privateenterprise to the advantages obtainable from basic research. Meanwhile,Government expenditures for basic research are rising. For all agencies,they will amount to about $500 million in the fiscal year 1960. In the sameyear, expenditures by the National Science Foundation for basic researchwill be about one-third above the figure for 1959 and more than doublethat for 1958.

In the field of atomic energy, important strides have been taken towardthe adaptation of military technology to peaceful uses. A full-scale proto-type atomic power reactor was operated in 1958, and other plants, of com-mercial size, are being planned and built under cooperative industry-Govern-ment arrangements. The wider industrial, agricultural, and medical useof radioisotopes and radiation sources is being stimulated. Incentives arebeing provided to private organizations for the commercial undertaking ofactivities heretofore performed only by the Government. Technical andfinancial assistance is being given to the European Atomic Energy Com-munity, and through bilateral agreements to separate nations, in the devel-opment of power reactors and provision of small-scale reactors for researchand training. Other efforts are being made through the InternationalAtomic Energy Agency and through diplomatic negotiations to realize morefully for the world the peaceful possibilities inherent in nuclear fission. Andprogress is being made in cooperative international research on the genera-tion of electric power by the controlled release of fusion energy—a projectwhich, if successful, promises great benefits to mankind.

63


Appendix A

SUMMARY OF RECOMMENDATIONS INTHE ECONOMIC REPORT OF

THE PRESIDENT


Summary of Recommendations in the EconomicReport of the President

I. GOVERNMENT FINANCIAL POLICIESa) Continue for one year beyond June 30, 1959, the present tax rate on

corporate income and the excise taxes on automobiles and parts, ciga-rettes, distilled spirits, and wines and beer. [Page 50]

b) Increase temporarily the Federal tax on motor fuels, raise the tax onaviation gasoline, and impose a similar tax on jet fuels. [Page 50]

c) Authorize a revision in postal rates. [Page 50]d) Enact a permanent plan for the taxation of life insurance companies

and adjust the present laws relating to the taxation of cooperatives.[Page 50]

e) Specify the treatment processes which shall be considered as mining forthe purpose of computing percentage depletion allowances in the case ofmineral products. [Page 50]

f ) Grant wider administrative authority in setting interest rates and makecertain adjustments in rates for various credit programs, as follows:Veterans Administration programs of guaranteed and direct home loans;Federal Housing Administration programs of rental (including armedservices) and cooperative housing (Sections 207, 803, and 213 of theNational Housing Act) ; the college housing program of the Housing andHome Finance Agency; the loan program of the Rural ElectrificationAdministration; and the ship mortgage loan program of the MaritimeAdministration. [Page 51 ]

g) Provide the President with authority to veto or reduce the amounts forspecific items in appropriation bills and in other bills authorizing ex-penditures. [Page 51]

h) Raise the permanent debt limit by $2 billion, to $285 billion, andauthorize a further temporary increase for the fiscal year 1960. [Page 52]

II. MEASURES To PROMOTE ECONOMIC GROWTH WITH PRICE STABILITYa) Amend the Employment Act of 1946 to make price stability an explicit

goal of Federal economic policy. [Page 52]b) Extend Federal regulation to bank mergers accomplished through the

acquisition of assets. [Page 53]c) Require notification to the antitrust agencies of proposed mergers by

businesses of significant size engaged in interstate commerce. [Page 53]


d) Empower the Attorney General to issue civil investigative demands inantitrust cases when civil procedures are contemplated. [Page 53]

e) Make Federal Trade Commission cease-and-desist orders final whenissued for violations of the Clayton Act, unless appealed to the courts.[Page53]

f ) Authorize the Federal Trade Commission to seek preliminary injunctionsin merger cases where a violation of law is likely. [Page 53]

g) Amend the Securities and Exchange Act to extend the privilege ofRegulation A filings to a wider range of security issues. [Page 54]

h) Enact a program that will provide assistance, through development loansand grants for technical studies, to communities that have suffered sub-stantial and persistent unemployment; and technical aid for the diversifi-cation of rural low-income areas and of towns heavily dependent on amajor industry. [Page 56]

i) Enact a long-range program to conserve helium gas. [Page 62]

III. PERSONAL WELFAREa) Provide for extending the coverage of the Federal-State unemployment

insurance system to employees of firms having fewer than four workers,to employees of Federal instrumentalities, nonprofit organizations andcertain other groups, and to workers in Puerto Rico. [Page 55]

b) Bring the provisions of the District of Columbia unemployment insurancesystem up to the standards recommended for the States. [Page 55]

c) Strengthen State systems of workmen's compensation. (State respon-sibility.) [Page 55]

d) Extend the coverage of the Fair Labor Standards Act. [Page 55]e) Improve the 8-hour laws applicable to Federal and federally assisted

construction projects. [Page 55]f) Carry out the principle of equal pay for equal work without discrimina-

tion based on sex. [Page 55]g) Require reporting and disclosure of financial dealings between employers

and employee representatives and their agents, and the filing of publicreports on the status of union finances, organization, and procedures.[Pages 55-56]

h) Prescribe standards to promote democratic procedures in union affairs.[Page 56]

i) Modify the law governing secondary boycotts, organizational and recog-nition picketing, and representation elections; and provide that States begiven jurisdiction in labor-management disputes where the NationalLabor Relations Board declines to exercise authority. [Page 56]

j) Correct shortcomings in the Welfare and Pension Plans Disclosure Act.[Page 56]

68


IV. FOREIGN ECONOMIC POLICY

a) Enlarge the resources of the International Monetary Fund and theInternational Bank for Reconstruction and Development. [Pages 58-59]

b) Provide additional authorization for the Development Loan Fund.[Page 59]

c) Extend the authority for sales of surplus agricultural commodities forforeign currencies and for the donation of such commodities for faminerelief and other assistance. [Page 59]

69489916 0—59 6


Appendix B

REPORT TO THE PRESIDENT ON THE

ACTIVITIES OF THE COUNCIL

OF ECONOMIC ADVISERS

DURING 1958


Letter of Transmittal

DECEMBER 30, 1958.

The PRESIDENT.SIR: The Council of Economic Advisers submits this Annual Report for

calendar year 1958 in accordance with the requirements of Congress, asset forth in Section 4 (d) of the Employment Act of 1946.

Respectfully,

RAYMOND J. SAULNIER, Chairman.KARL BRANDT.PAUL W. McCRACKEN.

73


Report to the President on the Activities of theCouncil of Economic Advisers During 1958

The Council's attention in the early months of 1958 was focused largelyon measures to help arrest the economic decline; after April, attention wasdirected increasingly to measures that would help promote a sound recoveryin the economy and a high and sustainable rate of long-term expansion.

Through its Chairman, the Council kept the President informed of eco-nomic developments and their policy and program implications. TheChairman attended all Cabinet meetings and reported frequently to theCabinet on economic developments and policy. The Chairman also at-tended, on direction of the President, all meetings of the National SecurityCouncil at which economic questions were discussed.

The Council was called upon frequently during the year to appraiseproposals for legislative or administrative actions, with special regard to theeffect they might have on the growth and stability of the economy. Throughits membership on interdepartmental committees and task forces, andthrough frequent consultation with Government and private agencies, theCouncil participated in the formulation of policies affecting economicgrowth and stability. A Council member serves on the Council on ForeignEconomic Policy and the Civil and Defense Mobilization Board. TheChairman of the Council is also Chairman of the Cabinet Committee onSmall Business and serves on the President's Special Committee on Finan-cial Policies for Postattack Operations. Council staff members serve onad hoc committees of the latter committee. The Council conferred fre-quently with the State Department on foreign economic questions, and itssenior staff economist on international economic matters attended mostmeetings of the National Advisory Council on International Monetary andFinancial Problems.

The Council participated in a number of international meetings duringthe year and continued its cooperation with various international agencies.In April a member of the staff participated in the Thirteenth PlenarySession of the United Nations Economic Commission for Europe held inGeneva, Switzerland; and a member of the Council, accompanied bysenior staff economists, attended two meetings under the auspices of theOrganization for European Economic Cooperation (OEEC) in Paris. InJuly, the Council submitted a Survey of Economic Developments in theUnited States for the Annual Review of the OEEC; and in February, itsubmitted responses to the United Nations' annual questionnaire on eco-

75


nomic developments and policies. In December, a member of the Councilstaff participated in a meeting of the "Economic Experts" group of theOEEC, held in Paris. Two members of the staff met frequently withforeign groups studying in this country under the auspices of the Inter-national Cooperation Administration.

During the year, the Council met with representatives of business con-cerns, financial houses, and consumer organizations, and representatives offarm and other groups to discuss business conditions, the economic outlook,and policy questions relating to the economy's growth and stability. TheChairman participated in the semiannual meetings of the Business AdvisoryCouncil of the Department of Commerce, and a staff member attendedmeetings of the technical consultants to that body.

In accordance with the Employment Act, the Council assisted the Presi-dent in the preparation of the annual Economic Report. This Report, whichis transmitted to the Congress in January, reviews the economic develop-ments of the past year, including the steps taken by Government to promotethe economy's growth and stability; appraises the current position of theeconomy and the outlook for the year ahead; and makes recommendationsto the Congress and suggestions to the States, local communities, and pri-vate groups for actions and policies to help-achieve the goals set forth in theEmployment Act. It also includes an extensive appendix of statistical in-formation bearing on the United States economy.

Twenty-nine thousand copies of the January 1958 Economic Report ofthe President were published, of which half were sold to the public throughthe Superintendent of Documents. Copies were supplied to all membersof the Congress and were made available to depository libraries throughoutthe country.

The Council also prepares Economic Indicators, a monthly compendiumof current economic statistics. This widely used periodical is published bythe Joint Economic Committee of the Congress. Like the Economic Re-port of the President, it is distributed to all members of the Congress andto depository libraries. An additional 6,500 copies of Economic Indicatorsgo to paying subscribers.

Council Membership

The present members of the Council are Raymond J. Saulnier, Paul W.McCracken, and Karl Brandt.

Dr. Saulnier, Professor of Economics on leave from Barnard College,Columbia University, and from the National Bureau of Economic Research,where he is Director of the Financial Research Program, has served as aconsultant to the Council from 1953 to 1955, as a member of the Councilsince April 1955, and as Chairman since December 1956.

Dr. McCracken, Professor of Business Conditions on leave from theSchool of Business Administration, University of Michigan, has served as


a member of the Council since December 1956 and previously as a memberof the senior staff.

Dr. Brandt was designated a member of the Council, on an interimappointment basis, in November 1958. He is Professor of AgriculturalEconomics on leave from Stanford University, where he is AssociateDirector of the Food Research Institute. Dr. Brandt's name will be trans-mitted to the Senate for confirmation when the Congress convenes in Janu-ary 1959.

Joseph S. Davis, Professor Emeritus of Stanford University and formerlyDirector of the Food Research Institute at tjiat University, resigned hismembership on the Council in October 1958. Dr. Davis had served asa member of the Council from May 2, 1955.

Council Staff

The Council has a staff of 29 persons, of whom 14 are senior economistsand statisticians. Each senior staff member is assigned one or more areas forspecial attention, and cooperates with other Government agencies and withbusiness, labor, and other private groups in analyzing and evaluating eco-nomic developments. Two of the members are on leave from universityfaculties; all others are permanent employees. Supplementing its full-time staff, several university economists serve the Council occasionally asconsultants. The present members of the senior staff are Bernard S. Beckler,Henry W. Briefs (on leave, Georgetown University), Samuel L. Brown,Robert C. Colwell, Frances M. James, Marshall A. Kaplan, Hal B. Lary,David W. Lusher, John A. Schnittker (on leave, Kansas State College),Charles L. Schultze, Irving H. Siegel, Walter F. Stettner, Collis Stocking,and Charles A. TafT.

Advisory Board on Economic Growth and Stability

The Advisory Board on Economic Growth and Stability, which meetsweekly under the Chairmanship of the Chairman of the Council, was es-tablished by the President in 1953 to advise with the Council on mattersaffecting the growth and stability of the economy. Present members of theBoard are as follows:

Department of State—Thomas C. Mann, Assistant Secretary forEconomic Affairs

Department of the Treasury—Julian B. Baird, Under SecretaryDepartment of Agriculture—True D. Morse, Under SecretaryDepartment of Commerce—Frederick H. Mueller, Under SecretaryDepartment of Labor—James T. O'Connell, Under SecretaryDepartment of Health, Education, and Welfare—Bertha Adkins,

Under SecretaryBoard of Governors of the Federal Reserve System—Abbot L. Mills,

Member of the BoardBureau of the Budget—Roger W. Jones, Deputy Director

77


Export-Import Bank of Washington—Samuel C. Waugh, PresidentThe White House Office—Don Paarlberg, Special Assistant to the

PresidentCouncil of Economic Advisers—Raymond J. Saulnier, Chairman

Budget for Fiscal Year 1959

For the fiscal year 1959, the Congress appropriated $375,000 for theCouncil's activities. A supplemental budget request for $20,000 is beingmade to cover part of the cost of increased salaries due under the terms ofthe Federal Employees Salary Increase Act of 1958.


Appendix C

SOME MAJOR ECONOMIC DEVELOPMENTSIN 1958

I. Employment and Earnings

II. Prices

III. Agriculture

IV. Financial Developments

V. Government Finances

VI. United States Foreign Trade and Payments

79


I. Employment and EarningsRecession and recovery in 1957 and 1958 were clearly reflected in the

Nation's labor markets. Employment declined sharply in late 1957 andearly 1958. Recovery began in May and continued through the end of theyear. Unemployment, which had increased to the highest levels since WorldWar II, declined significantly after August 1958. Unemployment benefits,particularly in view of the longer duration of eligibility made possible byspecial temporary legislative action, played a major part in counteracting thereduction of wage income. Despite the fall of employment and the rise ofunemployment, wage rates and hourly earnings continued to advance.Real weekly earnings declined through April, but recovered as the workweekwas lengthened and as prices stabilized. Though infrequent for most ofthe year, labor disputes increased sharply in late autumn.

EMPLOYMENT

Total employment in nonagricultural establishments, as estimated fromemployers' payroll records, began to recede in August 1957, and by April1958 it had fallen by 2.4 million, seasonally adjusted. Four-fifths of thereduction was in manufacturing, mining, and transportation, although theseindustries account for only two-fifths of nonfarm employment. The declinewas halted in April, and employment began to rise moderately in May. Theexpansion continued to the end of the year, although delayed in October andNovember by labor disputes. In December, employment on nonfarm pay-rolls was 50.7 million, an increase of 700,000 from the April low figure.

Part of the decline of nonfarm payroll employment during the recessionwas due to less extensive dual jobholding and to reduced labor turnover,as well as to the fall in the number of employed persons. Monthly esti-mates of the Bureau of the Census based upon household sample surveysindicated a drop of 1.3 million from July 1957 to April 1958 in the numberof persons having nonfarm wage and salary jobs as their primary activity,compared with a total reduction of 2.4 million estimated by the Bureauof Labor Statistics from employer payroll records. All of this differencecannot be accounted for, but part of it is doubtless due to the fact thatpersons holding two jobs, or moving from one job to another and thereforereceiving pay from more than one employer, are counted only once in thehousehold surveys but twice in the payroll records. The smaller decline ofthe Census estimates thus in part reflects the lessened dual jobholding andreduced labor turnover shown by other surveys.

81


Employment began to recede in several important industrial sectorsbefore the general downturn in business that started after the middle of1957. Moderate reductions commenced in the construction industry, intransportation, and in nondurable manufacturing as early as the middleof 1956, and in durable goods manufacturing after the end of that year.However, until mid-1957, these declines were more than offset by con-tinued increases in nonmanufacturing sectors, especially in trade, in Stateand local government, and in financial and service industries. But in thelate summer of 1957, reductions appeared in mining, communications, andtrade, and the downward trend in employment in construction continued.

TABLE C—1.—Changes in nonagricultural employment since December 1956

[Thousands of persons, seasonally adjusted data]

Change

Major industry group

Nonagricultural employment: 2 . _ .

Manufacturing

Durable goods

Ordnance and accessoriesLumber and wood products (except furniture) _ -Furniture and fixturesStone, clay, and glass productsPrimary metal industries. _ _ ... . ._ _ .. . .Fabricated metal products (except ordnance, machinery,

and transportation equipment)Machinery (except electrical)Electrical machinery. .. _ . ._. .._ . _ . _ _ . .Transportation equipmentInstruments and related products... . ... _ ... .Miscellaneous manufacturing industries

Nondurable goods

Food and kindred productsTobacco manufactures-. _. . . _ . _ . .Textile-mill productsApparel and other finished textile products .Paper and allied productsPrinting, publishing, and allied industries . ._ .. . ..Chemicals and allied productsProducts of petroleum and coal. . . ._Rubber productsLeather and leather products

Mining .Contract constructionTransportation and public utilities

TransportationCommunicationPublic utilities . .

Wholesale and retail trade

Wholesale trade -Retail trade. . . . . . . - ... .

December1956 to

July 1957

213

—217

-157

— 6-29

0— 16-37

3— 17

20— 77

o— 5

— 60

—39-7

— 117

-314-3

A

—6

17— 70-12

-32146

122

5963

Julv 1957to April

1958

-2,410

— 1 633

— 1,327

—7-68— 40-48

-252

-143-244-157-302-26—40

—306

-32-1

-87-69-19-4

-30-9

-28-27

-105-223-273

-241-29-3

-318

-77-241

April 1958to Decem-ber 1958 »

682

424

374

13381829

. 82

49—23

569877

50

—22-311313

-1— 1-41323

-15—74-26

10—36

0

50

-1262

Finance, insurance, and real estateService and miscellaneousGovernment . . . . .

FederalState and local .

i 24. 1 170

1 179

13. 166

7 28-43 94178 201

-58 62236 139

1 Based on preliminary data for December.2 See Table D-22, footnote 1, for type of workers included.

Source: Department of Labor.

82


By the fourth quarter, the contraction had become quite general, andit was accelerating in most manufacturing industries, with particularlysharp reductions in firms producing primary metals, transportation equip-ment, and machinery. Steeper declines took place in the first quarter of1958 in transportation and in construction. In financial and service in-dustries, on the other hand, the hitherto steadily rising employment trendmerely leveled out for several months, and in State and local governments,the strong employment uptrend was completely unaffected by the recession(Table C-l).

Employment cutbacks were heaviest for hourly-rated production jobs inmanufacturing industries. The number of such jobs declined by 1.5million, or 12 percent, from July 1957 to April 1958, while "nonproduction"or salaried jobs declined by 100,000, or about 3 percent. The recovery ofmanufacturing employment since late spring has been due almost entirelyto an expansion of production work; salaried employment has risen onlyslightly since that time.

The occupational groups in general civilian employment that were mostaffected by the recession were operatives and related workers, and crafts-men and foremen (Table C-2). The employment of professional andtechnical personnel, which has followed a strong upward trend in recentyears, continued to increase, rising by 400,000, or around 7 percent, between1957 and 1958.

Contraction of employment was very rapid in the early months of 1958,and was aggravated by especially unfavorable weather in February andMarch. Some signs of recovery appeared in April, however, as the numberof jobs began to increase in construction and firmed in nondurable manu-facturing. In late spring and summer, the recovery spread to durablegoods manufacturing, trade, and service and financial enterprises, and by

TABLE C-2.—Civilian employment, by major occupational group,1947, 1957, and 1958

[Thousands of persons 14 years of age and over]

Major occupational group

Emplovment- - .. .-. . _ ..-

Professional, technical, and kindred workersFarmers and farm managersManagers, officials, and proprietors, except farmClerical and kindred workersSales workers - - -Craftsmen, foremen, and kindred workersOperatives and kindred workersPrivate household workersService workers, except private householdFarm laborers and foremenLaborers, except farm and mine

1947

57, 843

3,7944,9955,7957, 2003,3947,754

12, 2741,7304,2563,1243,526

1957

65, 016

6, 4683,3296,7039, 1524,1288,664

12, 5302,0985,5342,7303, 680

1958

63,907

6 8933,1286,7279 1244, 1058,487

11 4642,2105,5712 5293,669

Change,1957 to 1958

— 1, 109

425— 201

24— 28—23

-177— 1 066

11237

— 201— 11

Note—Annual figures shown above are averages of data for January, April, July, and October, since dataprior to 1958 are available only for these months. The data represent total employment of the civilian laborforce and, therefore, include proprietors and self-employed persons. See Current Population Reports,Series P-57, Xo. 193, Table 15, for list of workers included in each group.

Detail will not necessarily add to totals because of rounding.

Source: Department of Commerce.


August employment was expanding moderately in most of the principalsectors of the economy.

Extensive work stoppages in the automotive and other hard goods manu-facturing industries retarded the increase of employment in the final quarterof the year. The number of employees involved in labor disputes, which hadremained very low until September, rose abruptly to more than 500,000 latein that month, rose further to 525,000 in October, and was 300,000 inNovember. These stoppages substantially afTected the recovery of employ-ment in the final quarter of the year through their indirect effects on sup-plying industries, as well as by their immediate impact on the workers andfirms directly involved.

Employment in agriculture, where trends are especially difficult toestimate over short periods, appears to have been unaffected by therecession. The Department of Agriculture estimates that total employmenton farms was virtually unchanged in 1958. The Census Bureau, usingdifferent definitions and procedures, reports farm employment reduced by6 percent from 1957 to 1958 (Tables D-17 and D-65).

UNEMPLOYMENT

Unemployment, which for two years had fluctuated narrowly around2.8 million, or 4.2 percent of the civilian labor force, began to rise mod-erately, after adjustment for seasonal factors, in the third quarter of 1957.As employment fell more sharply toward the end of the year, and as thelabor force continued to grow, unemployment increased more rapidly andin April 1958 exceeded 5 million. This high level of unemployment, sea-sonally adjusted, persisted until September, when substantial reductionsbegan. By December 1958, unemployment had declined to 4.1 million, aseasonally adjusted rate of 6.1 percent of the labor force.

The 4.0 to 4.4 percent ratio of unemployment to the civilian laborforce that prevailed from the summer of 1955 to the third quarter of 1957was considerably higher than that which prevailed before the onset of the1953-54 recession, and was somewhat higher than before the downturn in1948. The reductions of employment in 1957 and early 1958 resulted^therefore, in rates of unemployment higher than those reached in the twoprior recessions since World War II. However, both the recovery ofemployment and significant reductions of unemployment commenced rela-tively earlier than in 1949 or in 1954; in December, the rate of unemploy-ment was not much different from that in the corresponding period of the1948-50 recession and recovery, although still above the rate of the 1953-54period.

A large part of the unemployed are a swiftly changing group, duringrecession as well as in more prosperous times. Although total unemploy-ment rose steeply from December 1957 to April 1958, an average of amillion or more previously jobless workers were able to find work eachmonth. However, about three-fifths of those unemployed in any month


were still unemployed in the following month, and slower rates of hiringand rising layoffs rapidly increased the number of those out of work 15weeks or more, from 490,000 at the outset of the recession to 1.9 millionin April 1958. In September 1958, the recall of workers who had beenlaid off in manufacturing industries brought the first significant reductionof long-term unemployment. Substantial reductions, after allowance forseasonal factors, continued in the final months of the year.

Because the decline in unemployment was most severe in durable goodsmanufacturing and related industries, the impact upon the working popu-lation was quite uneven. Of the total increase of 2.4 million jobless personsfrom April 1957 to April 1958, by far the greater part were men, theirnumbers rising by 1.7 million, or 93 percent. Men from 20 to 34 years ofage were especially affected, and the rate of unemployment for marriedmen living with their families—that is, for those most likely to be stronglyattached to the labor force—rose from 2.3 percent in July 1957 to.a peakof 6.5 percent in March 1958. In the spring and summer, employment op-portunities improved, and the rate of unemployment diminished for headsof families to 4.8 percent by the end of the year. Unemployment amongwomen also rose substantially, but not to the same extent as among men.

Durable goods manufacturing industries accounted for about one-third ofthe total rise of the jobless, and rates of unemployment among durable goodsworkers reached 12 percent in April 1958; they were especially high inindustries manufacturing primary metals and transportation equipment,rising to 13 percent and 14 percent, respectively. Large increases alsooccurred in the railroad industry, in mining, and in construction. Serviceindustries, government, and public utilities were least affected.

The uneven effect of the recession on the different areas of the countryis shown by the statistics of insured unemployment (Table C-3). By April1958, rates of insured unemployment were 7 percent or more in New Eng-land, many of the Middle Atlantic and North Central States, and Cali-fornia, and were more than double the rates in the previous year. In Mich-igan, Ohio, and West Virginia, the rates had at least tripled. In severalSouthern and Western States, however, insured unemployment remainedbelow 5 percent of covered employment. Of the Nation's 145 principallabor market areas, the number having "substantial labor surpluses" in-creased from 21 in July 1957 to 86 by July 1958 and then declined to 80in November, according to surveys by the Bureau of Employment Security.However, reduced unemployment and an improved employment outlookwere evident in ?1 labor market areas during the second half of the year.

More than four-fifths of nonagricultural wage and salary workers arecovered by the system of unemployment insurance. Consequently, benefitpayments increased rapidly during the recession and partially compensatedfor the wage loss to the employee and his family. While the provisions ofthe unemployment insurance system still fall short of the President's recom-mendations, unemployment benefit payments rose from an annual rate

85489916 O—59—-7


TABLE C—3.—Insured unemployment under State and Federal employee programs,April 1957 and April 1958

State

Insured unemployment'

Weekended

April 13,1957

Weekended

April 12,1958

Insured unemploymentas percent of covered

employment

Increase, Week1957 to ended1958 2 April 13,

19573

Weei:ended'

April 12,1958*

Thousands

United States 1,486

Alabama 23Arizona 6Arkansas 19California 125Colorado 6

Connecticut 21Delaware 3District of Columbia 5Florida 13Georgia _ 27

Idaho 5Illinois 68Indiana 37Iowa 10Kansas _ 11

Kentucky _ 37Louisiana 16Maine 12Maryland 14Massachusetts 57

Michigan 87Minnesota 35Mississippi 17Missouri _ 31Montana 9

Nebraska 7Nevada — 3New Hampshire 7New Jersey 75New Mexico 4

New York 184North Carolina 46North Dakota 4Ohio 65Oklahoma 14

Oregon _ 21Pennsylvania ___ 167Rhode Island 19South Carolina 15South Dakota 3

Tennessee _ 39Texas.. 34Utah 5Vermont 3Virginia 12

Washington 28West Virginia _ 13Wisconsin _ 24Wyoming _ 2

3,333

481330

32514

6379

3552

7178931720

67303048

124

29757246513

16153

7

22328

3234727243

6280116

32

525253

4

1,877

247

11200

8

4244

2225

211056

210226

334

249

78

215222

15815

11180

8

Percent

3.7

4.43.17.13.52.1

2.82.41.21.9

4.82.53.32.53.0

7.82.96.02.03.7

4.55.47.33.3

3.53.84.94.92.9

3.85.66.32.53.6

5.95.17.63.93.7

6.12.02.74.01.8

4.53.72.93.3

8.1

8.36.4

1.1.28.64.3

8.15.51.94.56.7

6.16.48.23.85.2

14.05.2

14.36.57.9

15.28.69.26.5

10.5

4.29.0

11.09.74.7

7.87.98.38.46.9

8.510.610.65.74.0

9.24.45.68.14.4

8.113.66.26.8

1 Represents the number of unemployed workers covered by unemployment insurance programs who havocompleted at least 1 week of unemployment. Excludes territories.

2 Based on unrounded data.s Based on average covered employment for 12 months ended June 1956.4 Based on average covered employment for 12 months ended June 1957.NOTE.—Detail will not necessarily add to totals because of rounding.


86


(seasonally adjusted) of $1.7 billion in July 1957 to $4.3 billion in April1958, thus directly offsetting nearly one-third of the decline in total wageand salary payments, and providing benefits for the laid-off employee aver-aging $30 to $37 per week in the principal industrial states. Private sup-plementary unemployment benefit plans, which raised the level of benefitsfor the unemployed in certain industries, also helped to maintain incomes.

As in earlier recessions, the number of beneficiaries exhausting theirregular entitlement to benefits began to rise rapidly a few months after theonset of recession. Starting at 82,000 per month in September 1957, theseexhaustions increased to a peak of 285,000 in July 1958. Legislation rec-ommended by the President and enacted by the Congress provided, bymeans of agreements with the States, for the payment of benefits for addi-tional periods to persons still unemployed who had exhausted their regu-lar benefits. States participating in the program, or otherwise extendingthe duration of benefits, accounted for 70 percent of covered employment.Unemployed persons claiming benefits under this temporary programreached a maximum of 658,000 in August 1958, and then declined to lessthan 400,000 by the end of the year. Extended unemployment benefitpayments amounted to approximately $390 million during 1958.

The months of recession also affected other social security and publicassistance programs, even though these are less closely related to employ-ment trends than unemployment insurance. Total recipients of aid todependent children increased more sharply than in previous years. Casesof "General Assistance"—relief provided from State and local funds whereapplicants are not eligible for federally assisted programs—also increasedmore in late 1957 and early 1958 than would be expected for seasonalreasons.

HOURS WORKED AND EARNINGS

The average workweek of production workers in manufacturing indus-tries declined moderately during the first half of 1957, and sharply fromSeptember 1957 through February 1958. It then turned upward andadvanced through the rest of the year. Gross average hourly earnings,which had leveled out at $2.11 in the final months of 1957, remained prac-tically unchanged through April 1958, but then rose at a quickening paceduring the second half of the year, reaching $2.19 in December. Hourlyearnings, excluding premium pay for overtime, continued to rise through-out the year. Average weekly earnings, reflecting both changing hoursand changing rates, declined from September 1957 to February 1958, butby June they had recovered all of their lost ground, and at $88.04 inDecember were $5.30 above earnings a year earlier. In terms of realpurchasing power, weekly earnings continued to decline through April1958, but recovered sharply by the end of the year, as the workweek waslengthened and as consumer prices stabilized.

The manufacturing workweek and the amount of overtime workedbegan to recede early in 1956 from the high levels of 1955, and declined

87


gradually until September 1957, when the contraction became sharper.The low point was reached in February 1958 when average hours of workwere lower (seasonally adjusted) than at any time since World War II.An upturn occurred in March, before the beginning of the recovery ofemployment. This development is typical of periods of recovery. Whendemand improves, production is first increased by lengthening the work-week, and later by adding employees.

Reduced overtime tends somewhat to counteract, in recession periods,the continued rise of basic wage rates. In February 1958, when overtimehad been minimized and the workweek was shortest, gross average hourlyearnings in manufacturing were 2.4 percent above the level of February1957, while average straight-time earnings were 3.5 percent higher. Thecontinued rise in basic wage rates in 1958 is reflected in the index of hourlyearnings excluding premium pay for overtime and adjusted for interin-dustry shifts of employment (Table C-4).

Reduced hours of work and less overtime, and the continued rise of con-sumer prices, resulted in a persistent decline of real weekly earnings in 1957and through April 1958, despite the rise of basic wage rates. However,this tendency was reversed by the increase in hours of work and by thetendency of prices to stabilize after the middle of 1958. By the end of theyear, real weekly wages had recovered nearly all of the ground lost sincethe record rates of late 1956.

Pay rates of armed forces personnel, and of salaried civilian employeesof the Federal Government, which had been unchanged since early in 1955,were increased by about 10 percent, on the average, during 1958. Theincreases were made retroactive to January 1958 for civilian employees,

TABLE C-4.—Index of average hourly earnings, adjusted for overtime and inter-industry employment shifts, selected periods, 1948-58 *

[1947-49=100]

Month

JanuaryFebruaryMarch

April... .MayJune _

JulyAugust .September

OctoberNovemberDecember .

1948

97.498.298.1

98.499.4

100.5

102.1103.2104.5

104.4104.8104.8

1949

105.4105.3105.5

105.9105 9106.2

106.5106.1106.4

105.8106.2106.5

1953

128.2128.8129.1

129.4129 8130.4

131.4131.4133.3

132.6133.3133.5

1954

134.3134.2134.4

134.5135.0135.0

135.1134.8136.3

136.3136.4136.3

1957

151. 3151.7152.4

152.6153.1154.0

154.5155. 1155.5

156.4157.2157. 6

1958

158.4158.7159.2

159. 6160.1160.4

161.1160.9161.fi

*16L4» 162. 9(3)

1 For production workers in manufacturing. See note below.2 Preliminary.

j-3-Not available.

Average hourly earnings of production workers in manufacturing are affected by changes in pre--mium pay for overtime, by changes in the industrial composition of employment, and by other factors, as

ll as by general changes in hourly wage rates. This index excludes the effects of premium pay for over-erindustry employment shifts, and better reflects the movements of wage rates. Employ-

industries are based upon average 1954 production man-hours.

DJBpiSStjjnent of Labor.

88


resulting in lump-sum cash payments of about $332 million in June andJuly. In all, about 3.4 million persons are receiving higher salaries underthis legislation, and the total rise of income amounts to about $1.4 billionper year.

Faim wage rates, according to the index compiled by the Department ofAgriculture, increased by about 3 percent between July 1957 and July 1958.

COLLECTIVE BARGAINING DEVELOPMENTS

Basic wage rates, established in major collective bargaining situations,continued to rise in 1958. As in 1957, the over-all average wage increasewas about 12 cents an hour, and increases were negotiated or put intoeffect for 6.8 million workers—about 85 percent of those covered by majorcollective bargaining contracts (Table C-5). Improvements of supple-mentary benefits continued to characterize three out of every four settle-ments.

TABLE C—5.—Distribution of employees receiving wage increases under major laboragreements, 1956-58 *

Size of increase (cents per hour)

Employees receiving wage increases:

Number (millions)

Percentage distribution: Total

Under 5 cents5 and under 9 cents ^ „ _ _ , ^ „ , . _9 and under 13 cents ,. _ „ _ „ . „ _ ..„ _J3 and under 17 cents17 cents and over _Not specified or computed. . _ _

1956

7.5

100

11962873

1957

7.6

Percent

100

221303852

19582

6.8

100

3213222192

1 Includes cost of living, deferred, and newly negotiated wage increases received under collective bargain-ing situations affecting 1,000 or more employees and coming to the attention of the Department of Labor.Excludes construction, services, finance, and government.

2 Preliminary.NOTE.—Detail will not necessarily add to totals because of rounding.Source: Department of Labor.

At the outset of 1958, about 3.3 million employees were covered by laboragreements providing for specified wage increases during the year, and inmost cases for cost of living adjustments as well. In addition, at leastone cost of living wage review was scheduled for about 1 million workersbefore expiration of their contracts in 1958. Employees in the steel, alumi-num, meatpacking, and railroad industries received total increases rangingfrom 12 to 19 cents per hour, as a result of both deferred and escalatoradjustments. Automobile workers received total increases of approximately13 cents per hour in 1958 under both old and newly negotiated contracts.The continued advance of the consumer price index until August, and therecord number—4 million—of employees with wages subject to cost of livingescalator clauses, were major factors in the continued rise of wage rates.


Wage increases were negotiated for 3.5 million employees in 1958. Ne-gotiated increases tended, on the whole, to be slightly smaller than in 1957,with 7 to 9 cents per hour being the most common, compared with 9 to 11cents in 1956 and 1957. About 7 percent of workers affected by negotia-tions received no wage increase.

After delayed negotiations, three-year settlements in the automobile in-dustry were concluded with major firms in September and October. Wageincreases of 2.5 percent at 13-month intervals, extra increases for skilledemployees, continued cost of living adjustments, and improvements of sev-erance pay, pensions, and supplemental unemployment benefits were pro-vided. An agreement reached in the coal mining industry in Novemberincreased wages by $2 per day, effective in 1959, and provided higher vaca-tion pay and other benefits.


II. PricesPrices of most manufactured industrial goods in both retail and wholesale

markets have been fairly stable over the last 18 months. On the other hand,prices of other types of goods—farm products, industrial raw materials,foods, and services—have changed by relatively large amounts, some fluctu-ating over a wide range and others rising steadily.

In wholesale markets, farm prices rose during most of the period ofcontraction, and then declined in the last nine months of 1958. Prices ofindustrial raw materials, on the other hand, moved in the opposite direction,falling as economic activity receded and rising during the recovery. Re-flecting these offsetting price movements and the stability of prices of mostmanufactured goods, the wholesale price index has been roughly unchangedsince mid-195 7.

Prices of consumer services have continued to advance steadily; food pricesrose sharply in early 1958, and despite some modest declines in recentmonths they have remained above 1957 levels. Together with higherprices for new and used automobiles, these developments accounted foralmost all of the 2.6 percent increase in the consumer price index betweenJuly 1957 and November 1958.

FARM AND FOOD PRICES

Farm prices rose irregularly throughout 1956 and 1957 from the ab-normally low levels of the winter of 1955-56, and the rise was accelerated inearly 1958. During the first three months of 1958, wholesale prices of farmproducts rose 9 percent above prices in the same quarter of 1957, while thevolume of marketings, particularly of price-supported crops, rose 5 percent.Marketings of livestock, however, were smaller than in the preceding year,and unfavorable weather during the winter and early spring reduced thesupply of fresh fruits and vegetables. Although the maintenance of con-sumer income undoubtedly contributed to the rise in food prices during therecession, these changing supply conditions played the major role. As foodsupplies increased in the summer and fall of 1958, food prices declined;nevertheless, they remained above 1957 levels. During most of the periodof rising farm prices, marketing margins continued to advance. The highermanufacturing, transportation, and distribution costs resulted not only fromhigher wage rates, freight charges, and the like, but also from the costsincurred in continually adding to the quality, variety, and "built-in" servicesincorporated in prepared and packaged foods. A large part of the rise in


margins came in the second half of 1958, when the fall in farm prices wasaccompanied by a much smaller decline in food prices. In November,retail food prices were still about 2 percent above mid-1957 levels.

CONSUMER SERVICES

Ever since World War II, prices of consumer services have been risingsteadily, through economic expansions and contractions. They have in-creased not only absolutely but also in relation to prices of commodities.Because of their relatively small rise during the war years, however, theincrease since then has only recently brought service prices, excluding rent,back to their 1939 relationship to nonfood commodity prices. Rents are stillwell below their prewar relationship to other prices. While the prewarrelationship between prices of services and other prices is not necessarilynormal for the current period, some of the relatively sharp increase in pricesof services during the past ten years may reflect an attempt to achieve inthese industries the real income gains attained earlier in other segments ofthe economy.

Consumer services cover a wide variety of economic activities, rangingfrom the highly industrialized and regulated public utilities to domesticservice. They also include such items as real estate taxes and propertyinsurance premiums, which have little immediate connection with the stateof business activity. It is not surprising, then, that there have been signifi-cant differences among the various categories in the timing and magnitudeof price changes.

Prices of services provided by the regulated public utilities tend to adjustto inflationary pressures with some time lag. During the nine monthsfollowing the conflict in Korea, for example, when other prices were risingsharply, prices .of most of these utilities increased moderately. In thesucceeding two years, on the other hand, they rose fairly rapidly whilecommodity prices were falling. Similarly, the prices of this group of servicesadvanced quite gradually from 1956 to mid-1957, but since then they haverisen at a much more rapid rate. The recent increase is more a delayedreaction to cost increases that occurred earlier than a reflection of inflation-ary forces currently at work. Since the end of World War II, prices ofsome of these services—gas, electricity, and telephone—have risen substan-tially less than prices of other services. A major reason for the smallerincrease is that these services are very highly industrialized and haveachieved substantial efficiencies of operation through large investment pro-grams, rapid expansion of operations, and the introduction of new technol-ogy. Certain other utilities, particularly local public transit, although rela-tively large users of capital equipment, have faced problems peculiar to theirindustry, which have tended to raise their costs and prices even more thanfor services in general.

For another large group of services included in the consumer priceindex, prices are influenced by governmental and administrative factors not

92


closely related to the current state of the economy. The most importantitems in this group are real estate taxes, auto registration fees, postage rates,mortgage interest, and automobile and property insurance premiums.Some of these items have been included in the consumer price index onlysince December 1952. Since then, prices for this group have risen fasterthan service prices generally. While property taxes, insurance rates, andother items of a similar nature tend, in the long run, to be influenced bygeneral economic conditions, the specific timing of changes is usually deter-mined by noneconomic considerations.

For consumer services other than the regulated utilities and the mis-cellaneous group discussed above, a common characteristic is that a largepart of their total cost is payment for labor services. They normallycannot achieve the efficiencies made possible by heavy capital investmentand new technology to the same extent as the commodity producing andpublic utility industries. For this group of "other" services, prices haverisen steadily since the end of the war, and substantially more than theprices of services provided by the regulated utilities. In many instances,an advance in prices for this group when other prices are stable reflects anadjustment of wages and salaries to increases in living costs which occurredat some earlier period. Also, wage and salary gains often lead to cost andprice increases in many of the service industries, in contrast to the industrial-ized sectors where there is greater opportunity for wage and salary increasesto be offset by improvements in productivity.

Taken altogether, service prices, excluding rent, rose 3.9 percent betweenmid-1957 and mid-1958, and another 0.7 percent in the second half of 1958.Since March of last year, however, the rate of increase has been somewhatslower than during most years since the war. Rent has risen about 2.5 per-cent in the 18 months since the middle of 1957. While this is about the rateof increase which has persisted since 1953, it is well below the annual in-creases of 4 to 5 percent in earlier postwar years.

INDUSTRIAL MATERIALS

A number of important crude or slightly processed materials used byAmerican industry, such as lead, zinc, copper, tin, and natural rubber, aresupplied in whole or in part from abroad. In most instances, the UnitedStates purchases a significant part of the world supply, but other industrialnations are also heavy buyers. Hence, prices of these materials were deter-mined during the recession not only by the course of economic activity in theUnited States but also by the leveling of industrial production and the reduc-tion in inventory purchases by other industrialized nations. Prices of thesematerials have also been affected in recent years by the termination of large-scale stockpiling, and by supplies from new sources which have been de-veloped since the post-Korean defense mobilization began. The changes inindustrial production and inventories in the United States were, nevertheless,major factors determining the movement of prices of crude and slightly

93


processed materials, not only prices of domestic materials but also those offoreign supplies on which the United States relies heavily.

Prices of this group of commodities tend to be much more volatile thanthose of fabricated materials. After reaching a peak in December 1956,prices of crude materials, exclusive of farm products, declined irregularly tomid-1957, as industrial production leveled and purchases for inventoryreceded. In the succeeding nine months, the decline was more rapid, asindustrial consumption of materials decreased sharply and inventories werereduced. Prices moved upward in the summer of 1958, shortly after indus-trial production began to recover. Since stocks of copper, lead, and zinc hadrisen during the recession, the increased consumption of these materialswas at first achieved by drawing down inventories; subsequently, purchasesfrom primary producers increased. Later in the year, the restoration oftariffs on copper and the imposition of import quotas on lead and zincstrengthened the tendency for the prices of these commodities to rise. Pricesof steel scrap, rubber, and tin also advanced sharply as the recovery pro-gressed. Prices of crude and slightly processed industrial materials as awhole began to rise in June, and by the end of the year they had almostreached the level recorded prior to the recession.

SEMIFINISHED AND FINISHED PRODUCTS

With some notable exceptions, prices of fabricated industrial products(intermediate materials and finished goods) changed little during 1958(Table C-6). Prices tended to decline in the first half of the year, butsubsequently they rose enough to erase these declines. Prices of steel andof many intermediate steel-using products advanced significantly in both1957 and 1958. Steel prices were raised on the average by 4.2 percent inJuly 1957 and by 2.6 percent in August 1958. Both price increases wereput into effect shortly after substantial upward adjustments of wage ratesin the industry. On the other hand, prices of nonferrous metal products,along with those of basic copper, lead, and zinc, declined during the reces-sion. Although prices of these products have increased in recent months,they are still below their pre-recession peaks. Prices of building materialswere relatively stable during 1956 and 1957 and then declined slightly inearly 1958. In the second half of the year, however, the rapid increasein residential building and in public construction was accompanied by arecovery in the prices of construction materials. Prices of semifinishednondurable commodities, which had risen only moderately during the over-all price advance in 1956 and 1957, fell throughout 1958. For all inter-mediate materials, components, and supplies as a group, prices at the endof 1958 differed little from those prevailing at mid-195 7. A small riseoccurred in the last half of 1957, a modest decline during early 1958, andan equally modest recovery in the latter part of the year.

During the two years preceding the recession, prices of machinery andequipment rose 15 percent, the sharpest increase for any major group of

94


TABLE G—6.—Changes in wholesale price indexes since June 1955

Commodity group

All commodities.

Farm productsProcessed foods _Other than farm products and processed foods

(industrial) _

Crude materials *_

Intermediate materials, supplies, and compo-nents3

Materials for durable manufacturing.Materials for nondurable manufacturing...Components for manufacturingMaterials and components for construction.

Finished goods:

Producer finished goodsConsumer durable goods _Consumer nondurable goods (other than

food).

Special index: All manufactured products

June 1955to

July 1957

7.2

1.13.2

8.7

11.3

9.0

12.13.3

15.77.3

15.26.8

4.5

8.0

Percentat

July 1957to

December1957

0.3

-.2.2

.3

-7.3

.2

.3

.0

.7-.3

2.51.8

.4

.4

je change

December1957to

June 1958

0.6

3.25.7

-.6

—1.2

-1.0

-.8-1.2

.1-.6

-.1-.2

-1.4

.3

June 1958to

December1958>

0.0

—5.1-4.1

1.5

4.8

1.0

2.4.0.9

1.5

1.31.2

1.0

.4

1 Based on preliminary data for December 1958.2 Excludes a number of partially processed materials, such as copper, lead, and zinc, which are discussed

in the text along with crude materials. In this table, these materials are included in intermediate materials,supplies, and components.

3 Includes groups not shown separately.Source: Department of Labor.

finished products. Even during the last half of 1957, when machinery ordersand sales were falling rapidly, prices advanced another 2l/z percent. AfterNovember 1957, prices stabilized and remained so for most of 1958. Latein the year, however, there were a number of small increases on particularlines of equipment, notably agricultural and construction machinery.

With the principal exception of automobiles, the average increase inprices of finished consumer goods, at wholesale and retail, was slight in thepast 18 months. Prices of new automobiles were raised in 1957 and 1958when new models were introduced. However, a comparison of publishedindexes at the end of 1958 with those in mid-1957, covering changes for twomodel years, tends to exaggerate the increase, since discounts were larger atthe beginning of this period than at the end. The changes in prices of con-sumer goods, both as published and as adjusted to eliminate the essentiallyseasonal changes in prices of automobiles, are shown in Table C-7. The risein prices of used cars was particularly marked in the past 18 months, con-tinuing the advance begun in the period of very low prices in early 1956.Over the past three years, almost half of the 9 percent increase in the pricesof consumer durable goods was due to the rise in prices of new cars, andanother third to the rise in prices of used cars.

95


Prices of appliances, which had fallen for many years, continued to de-cline after mid-1957, but the decreases tended to be small. Furniture pricesalso fell slightly; apparel prices declined after a moderate seasonal in-crease in late 1957; and prices of gasoline, fuel oil, and textile house-furnishings moved lower. On the other hand, increases occurred in prices oftires, prescriptions and drugs, cigarettes, newspapers, soaps and detergents,and many other miscellaneous products. On balance, as can be seen fromTable G-7, when automobile prices are excluded, the indexes of prices ofconsumer durable and nondurable commodities advanced very slightly.

TABLE G-7.—Changes in consumer price indexes since 1957

Item

Ml items

FoodOther commodities

Durable goods _

New automobiles .... _ ..Used automobilesOther durable goods 8

Appliances .Furniture and bedding

Nondurable goods

Services including rent -

Relativeimportance

in index,December

19571

100.0

28.636.4

13.6

3.01.69.0

3.11.7

22.8

34.2

Percentage change,July 1957 to

November 1958

Based onpublished

data

2.6

1.72.0

4.3

13.69.0.7

4-1.94 -.9

.7

4.0

Based onadjusted

data 2

2.5

1.7

3.4

9.3

1 Detail will not add to total because a small number of items could not be allocated to any individualgroup.2 Indexes for July 1957 for groups containing new automobiles were adjusted to eliminate, so far as pos-sible the effect of changing discounts during the model year.

3 Includes groups not shown separately.4 Change from June 1957 to September 1958.Sources: Department of Labor and Council of Economic Advisers.

The index of prices of consumer goods rose 2.6 percent, mainly be-cause of increases in the prices of three groups of items—foods, services,and automobiles. The over-all index of wholesale prices, in contrast,changed very little in the recession and during the recovery to date. Thisindex includes prices of very few service items, but it does include prices ofindustrial raw materials. In general, the prices of these materials movedin the opposite direction from prices of farm products and processed foods,falling in the early part of 1958, when farm prices were increasing, and risingin the latter part of the year, when farm prices were declining. Pricechanges in these two major groups tended to offset each other, while pricesof semifinished and finished industrial products moved within a very narrowrange. The rise in the consumer price index relative to the wholesale priceindex therefore reflects not an increase in retail margins, but rather thesubstantially different composition of the two indexes.


COMPARISON OF DOMESTIC AND FOREIGN PRICE DEVELOPMENTS

The United States was not the only country to experience an increase inthe general level of prices during the past several years (Table C-8).In fact, the average change in United States prices between 1953 and 1957was somewhat less than the change in many Western European countries,though nearly as much as in Germany and Italy. In the United States,wholesale prices of nondurable goods and of farm products behaved in sub-stantially different fashion from those of durable industrial products. De-spite their rise in 1956 and 1957, farm prices in the United States were lowerat the end of the 1953-57 period than at the beginning, while in most West-

TABLE C-8.—Price changes in the United States and selected other industrial nations,1953 to 1957

Price series

Gross national product deflators: 1

Total

ConsumptionGross domestic fixed Investment- .

Producers' durable equip-ment ..

Consumer price index:

All items

Food

Selected wholesale price indexes:

Textile productsBuilding materialsMachinery _

Index of prices received by farmers

Percentage change, 1953 to 1957

UnitedStates

9

615

17

5

2

-49

21

-6

UnitedKing-dom

16

1414

14

16

5

21315

2

France

11

1113

7

»6

33

47

(2)

15

Ger-many.Federal

Republic

9

711

5

6

9

3(')

6

16

Italy

8

88

6

10

11

-13

(2)

« 6

Norway

21

1413

(8)

i2

13

(2)114

15

i Implicit deflators for gross national product and specified components. For Germany (1956-57) andFrance (1953), deflators for producers' durable equipment were not available; estimates, based on other data,were used.

* Not available.3 Based on data for Paris only.< Based on wholesale price index of farm products.Sources: Based on data from various agencies of the U. S. Government and international organizations.

ern European countries they had increased substantially. Prices of manynondurable goods in the United States also were more stable than thoseabroad, and prices of most consumer goods rose less than in Western Europe.

The increase in prices of durable goods for industrial use, on the otherhand, seems to have been greater in this country, both relative to otherprices here and to prices of similar goods produced abroad. Prices ofmachinery and equipment rose at a particularly rapid rate; scattered evi-dence from a comparison of prices of processed durable materials indi-cates that the rise in prices in this country was greater than the increaseabroad. The over-all price behavior in the United States, compared withother industrial nations, thus conceals significantly divergent trends amongdifferent commodity groups.

97


III. AgricultureFor American agriculture, 1958 was a year of exceptionally favorable

weather and marked prosperity. Outstanding developments were recordyields and output of many crops, increased livestock prices, and a sharp risein farm income. The demand for food remained strong throughout theyear as personal incomes fell only moderately and briefly. The food com-ponent of the consumer price index averaged 4 percent higher than in 1957as farm prices and the cost of marketing services rose about equally. Also,exports of farm products remained high, although they were smaller inthe fiscal year 1958 than in 1957. Still, domestic and foreign demands wereagain not large enough to absorb the output of many crops.

Agriculture's remarkable productivity, aided by favorable weather,resulted in record crop output even though the acreage planted was thesmallest in many years. As a result, the two-year decline in price supportactivity ended, and Federal expenditures for the stabilization of farm pricesand incomes are expected to be a record $5.4 billion in the fiscal year 1959.Despite continued intensive efforts to dispose of surplus commodities, thevalue of farm commodities under loan and in inventories of the CommodityCredit Corporation (CCC) by mid-1959 may exceed the 1956 peak. Pricesupport commitments now made on 1959 crops suggest high expendituresagain in the fiscal year 1960, if production in 1959 is near the averageof recent years.

LEVEL AND SOURCES OF FARM INCOME

Realized net income of farm operators in 1958 was $13.0 billion, 20 per-cent more than in 1957 and the highest since 1953 (Table D-64). Delayedmarketings of 1957 crops, chiefly feed grains and cotton, contributed morethan $400 million to the increase in 1958. Total net income includinginventory change was $13.2 billion, 14 percent higher than in 1957. Pro-duction expenses increased 5 percent, as feeder livestock prices, wage rates,prices of farm machinery and motor vehicles, and taxes rose. Farm peopleearned more than $6 billion from nonfarm sources so that their averageper capita income from all sources exceeded $1,000 for the first time.

The rise in farm output and income in 1958 contributed to enlargedexpenditures on farm machinery, and thus to a greater productive capacity.Also, the living standards of farm families continued to improve as aresult of gains in income. In addition, the increased farm expenditureshelped to moderate the business decline and to speed recovery. However,


many farm people did not share in the gains in 1958, and they still havevery low incomes. Wide differences in productive assets per farm and inalternative employment opportunities continue to lead to large income dis-parities among farmers and to considerable diversity in the problems facedby farm people.

Farms with annual gross sales of more than $2,500 represent only about45 percent of all farms but produce nine-tenths of all farm products sold.Operators of these farms earn most of their income from farming; theyare the chief beneficiaries of public expenditures for agricultural credit,conservation, and price support programs; with the public, they share inthe important benefits of agricultural research. Per family average incomefrom all sources for the 2.2 million farms in this group has been compara-tively high (Table C-9). Large differences exist within the group, however;in 1954, 28 percent of all farms in this group made 64 percent of the group'ssales of farm products.

TABLE C-9.—Number of farms and average income of farm families, 1947 and 1952-56

Year

1947

195219531954

19551956

Farms with sales of more than $2,500 per year

Number(thousands)

2,140

2,1382,1582,180

2,1962,213

Average income '

Total

$5, 716

6,1895,6555,528

5,4175,415

Farm

$4,969

5,1044,5304,363

4,1234,033

Off-farm

$747

,085,125,165

,294,382

Farms with sales of less than $2,500 per year

Number(thousands)

3,733

3,2833,1503,021

2,8892,751

Average income l

Total

$2,359

2,8162,7062,691

2,8062,925

Farm

$1, 114

1,086937881

806789

Off-farm

$1,245

1,7301,7691,810

2,0002,136

i Farm-operator family.

Source: Department of Agriculture.

Families on the 2.8 million low-production farms with annual sales below$2,500 earn little income from farming, but their off-farm income is com-paratively large (Table C-9). Again, there is a wide range within thegroup. On many of these farms, the operator has little supplementaryemployment, and farm sales are his major source of income. However, thenumber of these farmers who are finding off-farm jobs is growing.

About 1.5 million part-time and residential farmers make up the re-mainder of the low-production group. Gross sales of these units are verylow since farms are small, and many of the farm operators have off-farmjobs. Only 2 percent of all sales of farm products are made by part-timeand residential farms, which comprise nearly one-third of all farms. Clearly,the welfare of the families on low-production farms is more closely linkedwith the expanding nonfarm sector of our economy than with agricultureas such.

99


FINANCIAL POSITION

The financial position of agriculture, which was already strong, con-tinued to improve in 1958. Farm debt increased somewhat, but farmassets rose by a larger amount, as the stock of machinery, the number an<ivalue of livestock on farms, and land prices increased. Equities in farmproperties reached new peaks, with the gain in equities alone nearly equalto the total farm real estate debt.

PRODUCTION AND PRICES

Most of the gains in farm income in 1958 are attributable to the coinci-dence of record output of crops with insufficiently flexible, supported prices;sharply higher prices for certain crops whose output was reduced; and com-paratively high prices for the moderately reduced marketings of livestock.In addition, the maintenance of personal income and consumer spendingduring the business contraction contributed significantly to higher farmincomes.

Crops

Total crop production in 1958 exceeded the record output of 1956 and1957 by 11 percent, while harvested acreage was little changed from thoseyears and was 5 percent below the 1951-55 average. New record yieldsper acre were reported for wheat, corn, cotton, sorghum grain, soybeans,rice, and other crops which together made up 96 percent of all crop acreagein 1958. These increases were the joint result of widespread favorableweather and improved technology, the latter both a permanent and majorsource of increased farm output.

Production of food grains was 48 percent higher in 1958 than in 1957.An increase of more than 400 million bushels in stocks of wheat is indicatedby present estimates of domestic and foreign sales in the year ending June30, 1959. Despite record output and large carryovers, the index of pricesreceived by farmers for food grains declined only moderately in 1958, asprice supports operating through nonrecourse loans set effective limits onthe price declines resulting from the large crops. The statutory pricesupport for wheat of the 1958 crop was 9 percent below, and for rice 5 per-cent below, that of 1957; prices for both commodities reflected these reduc-tions, with wheat prices slightly below, and rice prices slightly above, thesupport level.

Price supports had similar sustaining effects on the prices of feed grainsand oil crops in 1958, despite sharply increased output. As a result,the increase in income from these major price-supported crops was verylarge; food and feed grains, and oil crops accounted for one-third of theincrease in cash receipts from farm marketings in 1958.

Reductions in the size of crops were rare in 1958; for two major com-modities, however, reduced output contributed to increases in cash receipts

100


and in net farm income. Smaller marketings of early citrus fruits followingfrost damage sent their prices up sharply; the seasonally adjusted index ofprices received by farmers for all fruit rose 19 percent in the month preced-ing April 15. For the year, citrus fruit prices were 28 percent higher thanin 1957, while production decreased 15 percent. As a result, the value ofproduction of the reduced 1957-58 crop was $426 million, $47 million morethan the value of the larger 1956-57 crop. Noncitrus fruit production wasslightly reduced, and prices were moderately above those in 1957.

A shortage of fresh vegetables early in the season caused their pricesto rise sharply; prices fell as supplies increased at midyear.

Eight percent of the increased cash receipts from farm marketingsin 1958 was attributable to fruits and vegetables.

LivestockPer capita meat consumption in 1958 was less than in 1957, as red

meat production declined 4 percent, largely early in the year. By mid-year, monthly pork output began to exceed the 1957 volume. Beefoutput, however, continued well below 1957, as breeding herds wererestocked following large reductions in 1956 and 1957; cattle on farmsincreased by more than 2 million head in 1958. Lamb and mutton pro-duction was also slightly below 1957, but poultry meat production m-creased 11 percent, partly offsetting the reduction in red meat supplies(Table C-10).

TABLE C-10.—Meat and poultry: Prices, receipts, production, and consumption,1952-58

Year

195219531954

1955195619571958s

Pricesreceivedfor meatanimals

(1910-14=100)i

353296292

249238279334

Receiptsfrom saleof meatanimals(billions

of dollars)

10.18.78.9

8.28.39.4

10.8

Production

Total Redmeats

Poultrymeat

Billions of pounds

27.229.029.8

31.333.232.431.8

23.024.725.2

26.928.126.925.8

4.24.34.6

4.45.25.56.0

Consumption per capita

Total Redmeats

Poultrymeat

Pounds

173182183

189197191186

146155155

163167159152

272728

26SO12{4

i Index of prices received by farmers for meat animals.* Preliminary.


The reduction in total and per capita meat supplies was reflected in in-creased prices in 1957 and even larger increases in 1958, when the indexof prices received for meat animals rose 20 percent. Because of thissharp price response to moderately reduced marketings, sales of meatanimals accounted for nearly half of the 1958 increase in cash receipts fromfarm marketings.

101489916 O—59-


Even though there was some increase in 1958 in the volume of marketingsof poultry and eggs, prices increased slightly. Dairy production andmarketings were almost the same as in 1957, but prices fell moderately.

EXPORTS

Agricultural exports decreased by 15 percent, to $4 billion in the yearended June 30, 1958; nevertheless, they were exceeded in only two otheryears on record. Grains, cotton, and animal products accounted formost of the decrease. Thirty percent of all exports of farm products wereshipped under special programs, compared with 40 percent in the fiscalyear 1957, mostly under provisions of Public Law 480. Cash exportsremained at $2.8 billion, partly because export subsidies continued to bepaid on several commodities in order to bridge the gap between domesticand world prices. Sales for foreign currencies and grants for relief ac-counted for nine-tenths of the exports under special programs. Bartertransactions declined, under revised regulations, to only one-fourth the vol-ume of the preceding fiscal year.

The Department of Agriculture expects a small decline in agriculturalexports during the fiscal year 1959, chiefly because of increased productionin importing countries. Cotton exports may not exceed 4 million bales,a sharp drop from fiscal 1958, while wheat exports are expected to increaseslightly. Exports of farm products in the period from July to December1958 were 4 percent below those in the same period in 1957.

PRICE SUPPORT OPERATIONS

Farm income has become increasingly dependent on price supports, asrising productivity and increased resources have combined to keep the out-put of major farm commodities well in excess of total demand at establishedprices. Somewhat less favorable crop weather, the soil bank, and largeexports based primarily on special financing or grants for relief, permittedreductions in the carryover of wheat and cotton in 1956 and 1957. Feedgrain carryover, however, has increased in each of the last eight years. Oil-bearing crops have become heavily dependent on surplus disposal programs.High levels of price support activity in grains, cotton, and oilseeds from the1958 crop indicate a record total of CCC holdings by mid-1959.

Since the fiscal year 1953, budget expenditures for the stabilization offarm prices and incomes have ranged from $1.7 billion to the record $5.4billion estimated for the present fiscal year (Table C-ll). Most of theseexpenditures have been in support of the prices of wheat, corn, and cotton,commodities which have continued to present grave problems of overpro-duction and excess carryover.

102


TABLE C—11.—Net budget expenditures for agricultural programs, fiscal years 1953-60


Fiscal year

1963 _- .1954

1955195619571958 _-1959 >

I9602

Agriculture and agriculturalresources

Total

2,9362,557

4,3894,8684,5264,3896,775

5,996

Stabilization of farmprices and income

Total

2,1251,689

3,4863,9003,4303,1515,386

4,490

CommodityCredit Cor-poration 1

1,9621,392

3, 3053,6072,7932,2944,420

4,218

1 Excludes the CCC portion of acreage reserve program expenditures as follows: $4 million in 1956, $344million in 1957, $81 million in 1958, and $99 millon in 1959.

> Estimate.Sources: Treasury Department and Bureau of the Budget.

COMMODITY MARKETS

Per capita consumption of wheat as food in the United States has de-clined for many years as personal incomes have risen and diets changed.From 1910 to 1957, the total amount of wheat used as food actually fellslightly, although population almost doubled. Exports in the period sincethe war have depended heavily on grants for relief and on sales for foreigncurrencies. For the crop years 1953 through 1957, 63 percent of all wheatexported was shipped under special Government programs, chiefly PublicLaw 480 and the Marshall Plan. In that period, domestic uses plus cashexports (excluding those under special programs) averaged 737 millionbushels per year, 73 percent of average annual production (Table C-12).At 1956-58 average yields, enough wheat to supply these markets can beproduced on about 60 percent of the present national acreage allotment. If

TABLE C-12.—Wheat: Production, utilization, and carryover, 2952-58

[Millions of bushels]

Crop year l

195219531954

1955195619571958 *

Produc-tion

1,3061,173

984

9351,004

9511,462

Utilization

Domes-tic

661634611

601587588608

Regularexports

288116116

105174152140

Specialexports

30101158

241375249290

Changein

carry-over

350328102

-3-124-28434

Carryover, endof year

Total

606934

1,036

1,033909881

1,315

Underprice

supportprogram

493850990

980837853

1,250

1 Beginning July 1.2 Preliminary.Source: Department of Agriculture.

103


such yields occur, production from a larger acreage will either add to thealready large carryover or require shipment through surplus disposal pro-grams, unless markets are expanded. A substantial addition to stocksappears likely from the 1959 crop, according to present indications asreported by the Department of Agriculture.

Utilization of feed grains is tied closely to the production of livestockand livestock products which, unlike wheat, have been increasingly in de-mand as per capita incomes have risen. As a result, grains fed to livestockhave increased, although irregularly; exports also have risen, partly underspecial financing. Yet production has exceeded utilization each year since1952 (Table C-13). Price support holdings of feed grains, already nearly$3 billion on June 30, 1958, may be expected to rise as a result of the large1958 crop.

TABLE C-13.—Feed grains: Production, utilization, and carryover, 1952-58

[Millions of tons]

Crop year 1

1952 ._19531954

1955 -19561957 -.1958 2

Production

120117124

131130143158

Utilization

114115117

128126134140

Change incarry-over

757

46

1019

Carryover, end of year

Total

273239

43495978

Under pricesupportprogram

172330

35415068

1 Beginning July 1 for oats and barley, and October 1 for corn and sorghum grain.2 Preliminary.Source: Department of Agriculture.

Cotton has faced strong competition from foreign cotton in the worldmarket, as well as from artificial cellulose and synthetic fibers in the do-mestic market. Domestic per capita consumption has fallen in the pastfew years, and mill consumption has been reduced despite a growing pop-ulation. Exports have been unstable, rising sharply after the war andagain in 1956 and 1957, largely because of foreign shortages and specialfinancing. Stocks in the past six years have fluctuated widely, but atpresent they are only moderately excessive. Total utilization in the 1958crop year (August 1958 to July 1959) is estimated at 12 million bales, onlyslightly more than 1958 production, which was reduced sharply becausemore than one-fourth of the cotton acreage allotment was placed in thesoil bank. It is possible that, under present programs, production in 1959and 1960 may again exceed utilization and that stocks may increase.

Tobacco also poses a serious problem in view of drastically reduced acre-age, rising yields, declining cash exports, and large carryover. Under thepresent program, support prices are rising, thus increasing the tendencytoward higher yields per acre and jeopardizing foreign markets.

104


Prices of oilseeds, including soybeans, cottonseed, flaxseed, and peanuts,also depend heavily on Government support; excessive Government-heldstocks of soybeans and cottonseed have been prevented so far only by heavyexports under Public Law 480.

While domestic consumption of these major crops either has declined orhas increased slowly, and exports have depended heavily on Governmentprograms, production per acre has increased sharply because of improvedcrop varieties, expanded use of fertilizer, increased irrigation, and bettercultivation. In 1957, crop production per acre was 12 percent above out-put in 1947-49; in 1958, it was 26 percent higher. Virtually all crops haveshared in these gains. Per acre yields of wheat, corn, and rice in 1956-58were, respectively, 37, 33, and 50 percent more than in 1947-49. Cottonyielded 47 percent more, tobacco 30 percent more, and soybeans 16 percentmore per acre in 1956-58 than in the earlier period. The output of mostcrops would be raised significantly if farmers were to increase fertilizer ap-plications in response to present favorable crop-fertilizer price ratios, or wereto adopt available machinery even more rapidly. Also, improvements inlivestock breeding and feeding have reduced the feed requirements per unitof output for some types of livestock production.

105


IV. Financial DevelopmentsShifts in monetary and credit policy during 1958, and the changes in

the underlying economic conditions that called for them, were quickly andstrikingly reflected in financial markets. The principal developments affect-ing the demand for capital and credit, the supply of funds available forvarious users, and changes in interest rates and stock prices are describedin the following sections.

DEMANDS IN FINANCIAL MARKETSCorporations

The financing requirements of corporations in 1958 were lower than in1957 as capital outlays and inventory expenditures declined much morerapidly than the flow of internal funds from depreciation allowances andretained earnings. Loans to businesses from commercial banks declined$400 million, compared with a growth of $1.8 billion in 1957. Gross pro-ceeds of corporate security offerings were $11.5 billion, about one-tenthless than the record set in 1957. In the second half of the year, a rapidimprovement in retained earnings limited the need for an expansion ofborrowing as economic activity recovered. It was not until the fourthquarter that business loan activity by commercial banks showed a significantincrease, and this was partially offset by a decline in corporate securityflotations.

Despite the attractiveness given to equity financing by rising stock prices,only about one-tenth of corporate flotations last year took the form of com-mon stock, compared with about one-fifth in recent years. Although bondsconvertible into common stock increased as a proportion of total offerings,and rose somewhat in absolute dollar volume over 1957, this was morethan accounted for by one sizable offering in the first quarter.

Corporate liquidity improved over the year, though it remained close tothe low point in the period since the end of World War II. There was areversal of the decline that had taken place since 1955 in corporate hold-ings of United States Government securities and cash, and the proportionof these liquid assets to current liabilities rose somewhat.

Consumers

In 1958, for the first time in the years since the war, consumer creditoutstanding remained practically unchanged (Table C-14). Automobilepaper outstanding declined by more than $1 billion, as the volume of newautomobile credit extended fell below repayments, which changed very

106


little. This decline was offset mainly by a continued growth in per-sonal loan credit and in noninstalment credit.

Residential mortgage debt expanded more than in 1957, mainly in thesecond half of the year. The increase reflected substantial commitmentsmade by financial institutions in late 1957 and the first half of 1958, wheneasier credit conditions widened the differential between mortgage yieldsand corporate bond yields and made mortgages a more attractive invest-ment. Further effects of these commitments on mortgage debt will befelt in 1959. The increase in nonfarm residential mortgage debt over theentire year was $10.4 billion, compared with $8.6 billion in 1957; for thesecond half of 1958, however, the increase has been estimated at $6.3billion, compared with $4.2 billion in the second half of 1957.

TABLE C-14.—Changes in short- and intermediate-term consumer credit outstanding,1955-58


Type of credit

Total consumer credit outstanding (end of period)

Net change in consumer credit outstanding:

All types of consumer credit _ _

Instalment credit . - .. . . .

Automobile paperOther consumer goods paper"Repair and modernization loansPersonal loans , , , ,

NnninstalTnent credit

1955

38, 670

6,378

5,390

3,66388373

771

988

1956

42 097

3,427

2,869

987876206800

558

1957

44 774

2,677

2,268

950182196940

409

19581

44,800

0

-400

-1300300

0600

400

1 Preliminary estimates by Council of Economic Advisers.

NOTE.—Data are not adjusted for seasonal variation.Source: Board of Governors of the Federal Reserve System (except as noted).

Consumers maintained a remarkably good record in meeting debt pay-ments, despite the recession. Delinquencies in meeting automobile pay-ments were low, although there was a sharp increase in repossessions ofautomobiles.

State and Local Governments

In order to finance mounting construction expenditures, State and localgovernments further expanded their security flotations, to the record figureof $7.4 billion. In addition, the dollar volume of bonds authorized at elec-tions was much larger in 1958 than in 1957; however, the authorizationsfell short of the record level reached in 1956. A large part of the 1958increase in proceeds from State and local offerings went for roads andbridges, as States obtained funds to match Federal aid for accelerating thehighway programs.

107


Federal Government

The Federal debt rose $8.0 billion during the past year, with $6.6 billionof the increase occurring during the second half. In addition, the Treasuryrefinanced a large volume of maturing securities, thus heightening the im-pact of the Federal Government on credit markets. Two very long-termbonds were issued, lengthening the maturity structure of the debt. In Feb-ruary, about $1.7 billion of 3J/2 percent bonds falling due in 1990 wereissued as part of a large exchange offering. In June, $1.1 billion of 3}4percent bonds due in 1985 were offered for cash. The latter issue came atthe same time that a large refinancing offer, mainly into a new 2 $4 percentbond maturing in 1965, was made. The sharp decline that occurred shortlythereafter in the prices of Government securities led the Treasury Depart-ment to repurchase $625 million of the 2% percent bonds in the openmarket.

In the second half of the year, the Treasury restricted its financing opera-tions to relatively short-term securities. A notable development, initiatedin December, was the issue of a series of 26-week Treasury bills to supple-ment the usual 13-week bills. With capital markets again favorable, theTreasury issued a long-term security for cash in January 1959.

SUPPLY OF FUNDSFederal Reserve Policy

The first public indication of a reversal of the Federal Reserve's policyof monetary restraint came in mid-November 1957, with the reduction ofthe discount rate from 3/2 percent to 3 percent. Although this action byitself did little to make money and credit more easily available, it helpedto initiate a sharp decline in interest rates that continued into early 1958.Three further decreases lowered the discount rate to 1% percent by May1958.

To provide funds to commercial banks, the Federal Reserve authoritiesreduced reserve requirements. Successive decreases, announced in Febru-ary, March, and April, lowered reserve requirements against demand de-posits from 20, 18, and 12 percent in the three classes of member banks,to 18, 16 5/2, and 11 percent. This was equivalent to releasing about $1.5billion in reserve funds that could serve as a basis for a multiple expansionof money and credit. In addition, the Federal Reserve authorities pro-vided bank reserves through open market purchases of United States Gov-ernment securities. This need arose in part from an outflow during theyear of more than $2 billion of gold, which, if not offset, would havereduced bank reserves by an equivalent amount.

On July 18, the Open Market Committee of the Federal Reserve Sys-tem authorized open market purchases of Government securities other thanTreasury bills, as a result of the sharp decline in Government securityprices. For a short while, some long-term securities were purchased by the

108


Federal Reserve System, although most of the purchases under this author-ization were confined to the new 1^4 percent one-year Treasury Certificatesthat were being marketed in July. Open market operations during themajor part of the year continued to be restricted to 13-week Treasury bills.

The effect of the various Federal Reserve actions was to provide the basisfor a substantial expansion of bank deposits. From January through July,the money supply (demand deposits and currency) increased $5.4 billion,on a seasonally adjusted basis, more than offsetting a decline during thepreceding six months. Time deposits at commercial banks increased $5.7billion. The rise in time deposits on an annual basis was the highest in anyyear since the end of the war.

Monetary policy shifted as business conditions improved and concernemerged over possible inflationary developments. In mid-August, theFederal Reserve Board approved an increase in the discount rate from124 percent to 2 percent. A reversal also occurred in the tenor of FederalReserve open market operations. Previously, such operations, by providinglarge amounts of reserve funds to member banks, had almost eliminatedthe need for member bank borrowing at Federal Reserve banks. In lateAugust and early September, as the reserve position of member banks cameunder increasing pressure, borrowings from the Federal Reserve banks roserapidly. In October, Federal Reserve banks again raised the discount rate,from 2 percent to 2| percent. Margin requirements against new stockpurchases, which had been reduced from 70 percent to 50 percent in Janu-ary, were raised again to 70 percent in August and to 90 percent in Octo-ber. The money supply rose $700 million from July through December,a rate of increase that was considerably less than the rate in early 1958.Time deposits, likewise, grew at a much slower rate.

Commercial Bank Credit

As a result of Federal Reserve actions in the first half of the year, loansand investments of commercial banks (excluding interbank loans) expandedby $8.9 billion, in contrast to a decline of $200 million during the sameperiod of 1957. For 1958 as a whole, the expansion of bank loans andinvestments was more than $14 billion (Table C-15), the largest expansionin any year since the war.

In the absence of a strong private demand for credit, most of the expan-sion in bank assets took the form of enlarged holdings of United StatesGovernment securities. These rose by $7.9 billion (based on par value; seeTable C-16) and accounted for almost all the increase in the publiclyheld Federal debt. However, this increase in commercial bank holdings,made possible by additional reserve funds, was concentrated in the first halfof 1958, and was accomplished largely through a reduction in the holdingsof other investors; Government securities outstanding rose very little duringthe first half of the year.

109


TABLE C-15.—Net changes in commercial bank holdings of loans and investments,1955-58


Loan or investment

Loans (excluding interbank) and investments 2

Loans (excluding interbank) 2

BusinessReal estateConsumerSecurityAgriculturalAll other

Investments

U. S. Government securities. ...Other securities

1955

4.6

11.6

6.42.42.3.6

-.7.9

—7.0

-7.4.4

1956

4.2

7.6

5.51.71.3-.8-.3

.5

-3.5

-3.0-.4

1957

4.9

3.5

1.8.6

l.l-.1-.1

.3

1.3

-.31.7

1958*

14.4

3.9

-.42.4

(3)

.3

.9

.7

10.3

7.92.5

1 Preliminary estimates by Council of Economic Advisers.2 Total loans are net of, and individual loans are gross of, valuation reserves.> Less than $50 million.

NOTE.—See Table D-41 for data including interbank loans.Detail will not necessarily add to totals because of rounding.Source: Board of Governors of Federal Reserve System (except as noted).

After midyear, when the public debt rose rapidly, commercial banksadded to their holdings of United States Government securities at a muchslower rate, absorbing about one-fourth of the increase in the publicly heldFederal debt. The additional Government securities were placed in nonbankhands, in some cases with commercial banks serving in effect as under-writers. Thus, large-scale monetization of the public debt—i. e., additionsto bank holdings through reserve funds provided by monetary authorities—that might have provided the basis for a renewal of inflationary pressureswas avoided.

TABLE G-16.—Net changes in ownership of the publicly held Federal debt during19581


1958investor group

Debt held by the public: Total .

Commercial banks 3 - ..Federal Reserve Banks . . . . , - _ , - _ - , - . . , - - - -Mutual savings banks - . . .Insurance companies .Other corporationsState and local governmentsIndividualsMiscellaneous investors

First half

0.8

5.81.2-.2-.3

-3.2-.1

-1.1—1.4

Second half »

8.1

2.1.9

-. 1.5

4.0.3

—.81.2

» Change based on par value. See Table D-49.2 Based on preliminary estimates for December 31,1958 by Council of Economic Advisers.3 The change in ownership of Federal debt by commercial banks given in this table differs from Table

C-15. This table is based on par values and includes holdings of banks in United States Territories andpossessions, whereas Table C-15 is based on book values and includes only banks within the continentalUnited States.

NOTE.—Detail will not necessarily add to totals because of rounding.

Source: Treasury Department (except as noted).

110


The maturity structure of Government securities held by banks waslengthened as a result principally of intermediate-term securities offered inTreasury financing operations. Since such issues are not as liquid as short-term Government securities, the liquidity of banks was not enhanced assubstantially as the increase in bank holdings of Government securitiesmight indicate. Moreover, after the middle of the year, market prices ofsecurities of intermediate- and long-term maturity declined as interest ratesrose, making banks more reluctant to sell them because of the capital lossesthat would be entailed.

In view of the reduced demands for consumer and business loans, themajor portion of the remaining increase in bank assets consisted of largerholdings of State and local securities and real estate loans. The increasein the former was a substantial fraction of the total increase in State andlocal securities. Bank loans to aid in financing real estate transactions,including mortgages and interim credit, also expanded significantly, particu-larly in the second half of the year, and the rise in bank holdings of realestate loans was about the same as the 1955 record increase.

Nonbank Financial InstitutionsIndividuals added large amounts on balance to their financial assets.

The rise in savings capital at savings and loan associations exceeded bymore than one-quarter the rise in 1957 (Table C-17). In mutual savings

TABLE C-17.—Flow of funds for selected nonbank financial institutions, 1955-58


Item

Life insurance companies:

Net change in assets

Savings and loan associations:

Net change in savings capital

Mutual savings banks:

Net change in deposits

First ten months

1955

4,948

3,688

1,473

1956

4,615

3,757

1,396

1957

4,435

3,463

1,222

1958

4,744

4,464

1,886

Sources: Institute of Life Insurance, Federal Savings and Loan Insurance Corporation, National Asso-ciation of Mutual Savings Banks, and Federal Deposit Insurance Corporation.

banks, which are concentrated in the northeast section of the country, therate of growth in savings accounts increased by more than 50 percent. Theflow of savings into life insurance companies, as measured by the net in-crease in life insurance assets, was slightly greater than in 1957. Savingsand loan associations and mutual savings banks used the additional fundsavailable to increase substantially their accumulation of mortgages, and lifeinsurance companies increased their accumulation of State and local secu-rities. Holdings of United States Government securities by life insurancecompanies seem likely to show little change for the year as a whole. This

ii i


would make it the first year since 1946 that life insurance companies didnot reduce their holdings of such securities significantly.

Although the flow of funds from individuals directly into commonstocks may have declined somewhat, the flow of funds into mutual funds asmeasured by the accumulation of mutual fund shares was at a record level.As a result, mutual funds increased their accumulation of common stocks. Inaddition, many pension funds were reported to be enlarging their equityportfolios. Individuals, however, continue to hold the largest amount ofshares and, according to the public transactions study of the New York StockExchange, they continue to account for most transactions on the Exchange.

INTEREST RATES AND STOCK PRICES

The decline in interest rates that began in the autumn of 1957 con-tinued into 1958 as economic activity diminished and Federal Reserveauthorities made credit more readily available. The drop in long-terminterest rates was particularly sharp through early January 1958. By then,the average yield on long-term United States Government bonds had fallenabout /a of 1 percent, and a further decrease occurred through April.Short-term rates declined almost continuously through late May. The rateon new 13-week Treasury bills, which had reached 3^4 percent in 1957,fell to about of 1 percent.

With economic recovery, interest rates rose even more abruptly thanthey had declined. By early autumn, interest rates on long-term Govern-ment securities not only surpassed the rates in 1957 but were the highestsince, the early 1930's. Other long-term rates also increased, althoughnot quite as much. Short-term interest rates rose swiftly, with new Treas-ury bills yielding almost 3 percent six months after yields significantly below1 percent had prevailed; however, short-term rates did not attain the highrates of 1957. Thus, short- and long-term interest rates advanced fromthe low levels of early 1958 in a remarkably brief time, in contrast to theprotracted period of low interest rates during the economic contractionof 1953-54.

A combination of factors contributed to the sharpness of the rise inrates. These included the suddenness with which the upturn in businessactivity came about; the projected rise in the supply of Government securi-ties, reflecting the Federal deficit; and widespread discussion of potentialinflationary pressures. Another factor was the large-scale selling of UnitedStates Government securities by many of those who had bought earlier in theyear on the assumption of declining interest rates and rising bond prices.Many Government bonds, notably the 1% percent bonds of 1965 issuedin June, had been bought on a thin margin basis. When bond prices be-gan to decline, many of these holders had little choice but to sell theirsecurities. This helped bring about further price declines through thesummer months, making for sharply higher interest rates.

112


Stock market prices increased persistently throughout most of 1958. Byautumn, prices of common stocks exceeded their previous highs; and,according to one measure, prices of industrial stocks at the end of theyear were, on the average, 22 times the earnings that had prevailed inthe year ended September 1958. This high capitalization of current earn-ings had occurred only seldom in the past, and then under unusual cir-cumstances. The dividend yield of a composite of stocks declined during1958 from about 4% percent to 3J4 percent, considerably below yields onlong-term bonds. After the middle of the year, low-price stocks became themost actively traded, and they increased in price substantially more thanhigh-price stocks. The proportion of stock market transactions for short-term and trading purposes was the largest since 1955, according to the publictransactions study of the New York Stock Exchange.

Stock market credit, as measured by net debit balances of New YorkStock Exchange firms and bank loans to others than brokers and dealers,increased about $900 million from the end of 1957 to the end of 1958,and about $400 million when measured from the peak figure in 1957.Most of the rise occurred before August 1958, at which time margin require-ments on new stock purchases were raised from 50 percent to 70 percent,and other moves were taken to restrain general credit expansion.


V. Government FinancesFederal, State, and local government expenditures increased during the

calendar year 1958. State and local receipts also rose, but Federal Gov-ernment receipts declined, reflecting the effect of economic recession oncorporate and individual incomes. For the fiscal year 1958, the Federalbudget showed a small deficit (the first in three years), and a much largerone is estimated for the current fiscal year. State and local debt rose by$4.7 billion during the year ended June 30, 1958; the Federal debt increasedby $5.8 billion in the same period and by an additional $6.6 billion duringthe second half of the calendar year 1958. It is expected to increase byanother $2 billion by June 30, 1959.

FEDERAL FINANCESExpenditures

Budget expenditures in the year ended June 30, 1958 amounted to $71.9billion, $2.5 billion higher than in the preceding fiscal year. There wereincreases in nearly all categories, with the largest increases in the majornational security and commerce and housing categories (Table C-18).

TABLE C-18.—Federal budget expenditures, 1957-60[Fiscal years, billions of dollars]

Function

Total budget expenditures ,

Major national securityInternational affairs and financeCommerce and housingAgriculture and agricultural resources-Natural resourcesLabor and welfareVeterans services and benefitsInterestGeneral governmentAllowance for contingencies _ . ,...-..

1957

69.4

43 32.01 54.51.33 04.87.31.8

1958

71.9

44 12.22.14.41.53 45.07.71.4

1959(estimated)

80.9

46.13.73.56.81.74.45.27.61.7.2

1960(estimated)

77.0

45 82.12.26.01.74.15.18.11.7.1



A further rise in budget expenditures, to $80.9 billion, is indicated for thecurrent fiscal year (1959), as increases in nearly all major categories areexpected. For each of the four categories—agriculture and agriculturalresources, major national security, international affairs and finance, andcommerce and housing—an increase of more than $1 billion is estimated*

The largest single increase is expected for agriculture and agricultural

114


resources, primarily because record crops have caused increased payments tofarmers under open-end commitments for price support. To a smaller ex-tent, the increase results from additional soil bank payments for corn andcotton acreage. Estimates for expenditures on agriculture and agriculturalresources in the fiscal year 1959 have been revised upward repeatedly, from$4.6 billion in the January 1958 budget to $6.4 billion in the midyear reviewand to $6.8 billion as of January 1959. Agricultural expenditures thereforebecome the third largest category in the Federal budget, exceeded only byexpenditures for national security and interest payments on the public debt.

The increase estimated for national security expenditures in the currentfiscal year is attributable primarily to higher spending on research anddevelopment, procurement of missiles, larger operating expenditures, andhigher expenditures for military construction. Expenditures of the AtomicEnergy Commission are expected to increase by over $300 million. Anestimated increase of more than $1 billion for research and development(including testing and evaluation) will raise estimated expenditures by theDepartment of Defense in this category to a level 50 percent higher than inthe fiscal year 1958. Increased expenditures for new weapons and moremodern equipment, on the other hand, will be more than offset by a reduc-tion in expenditures for conventional weapons and equipment, resulting inan estimated reduction of $600 million in total expenditures for procurement.

The estimated increase in expenditures for international affairs andfinance is due primarily to the recommended expenditure for the additionalUnited States quota in the International Monetary Fund.

The higher expenditures for commerce and housing in fiscal 1959 reflectprimarily the purchases of mortgages for low- and medium-priced housingby the Federal National Mortgage Association, extension of the direct homeloan program of the Veterans Administration, larger expenditures for themodernization of airway navigation facilities, and greater assistance to smallbusiness by the Small Business Administration. Despite the rise in postalrates, a significant increase is expected in the net deficit of the Post OfficeDepartment, owing to the pay increase for postal workers enacted in May1958 and to higher payments to railroads on account of the increase in ratesgranted them by the ICG in the spring of 1958.

The increase of almost $1 billion estimated for labor and welfare is chieflythe result of the program enacted in June 1958, which provides for tem-porary advances to States for the extension of unemployment compensationbenefits, and of recent legislation increasing the Federal share of paymentsto States for public assistance grants.

Revenues

Federal budget receipts in the fiscal year 1958 were almost $2 billionless than in the preceding year, reflecting the impact of the recession. Re-ceipts from taxes on individual incomes declined by about $900 million, andthose from taxes on corporate incomes by $1.1 billion. Revenues from

"5


excise taxes declined by about $400 million. However, other receipts, in-cluding customs and miscellaneous receipts, rose by more than $500 million.

A further decline in revenues is expected in the fiscal year 1959. Receiptsfrom the corporate income tax are expected to fall by $3 billion as a resultof the decline in corporate profits during the calendar year 1958, which wasparticularly sharp in the first half of the year. On the other hand, receiptsfrom the personal income tax, which is collected mainly on a current basis,are expected to increase, reflecting the economic recovery and the rise inpersonal incomes beginning in the spring of 1958. Small declines areestimated for excise and other receipts, except customs. The net effect ofall these changes will be a decrease of approximately $1 billion from the fiscalyear 1958 in Federal revenues. (For details on Federal budget receipts bysource, see Table D-51.)

Upon recommendation of the President, the Congress extended for oneyear the current rates of the corporate income tax and certain Federalexcise taxes which were to be reduced last June. It also repealed the taxeson transportation of property (including coal, and oil by pipeline), effectiveAugust 1, 1958, at a revenue loss estimated at $350 million for the re-mainder of the fiscal year 1959 and somewhat over $500 million for a fullyear. In addition, it enacted a number of technical tax revisions, includ-ing changes aimed at aiding small business; the revisions from which smallbusiness is expected to benefit are estimated as involving a loss of $260million in revenue in the fiscal year 1959.

Consolidated Cash Statement

The consolidated cash statement, which presents information on thetotal flow of money between the public and the Federal Government,shifted—like the conventional budget—from a surplus in the fiscal year1957 to a deficit in fiscal 1958. However, both the change from the fiscalyear 1957 to the fiscal year 1958, and the deficit in the fiscal year 1958,were smaller than those shown by the conventional budget. In every fiscalyear from 1953 through 1958 (as well as in most prior years), the Federalbudget on a consolidated cash basis has shown smaller deficits or largersurpluses than the conventional budget (Table C-19).

Trust funds, whose receipts and disbursements are included in the con-solidated cash statement but not in the conventional budget, have showna surplus in recent years, including the fiscal year 1958. In addition,accrued interest on savings bonds has exceeded the cash interest paid onredeemed bonds and has contributed to a reduction in Federal cash pay-ments relative to budget expenditures.

Through the fiscal year 1957, the largest of the trust funds—the FederalOld-Age and Survivors Insurance (OASI) Trust Fund—showed a con-sistent and substantial excess of receipts over payments, although the amountof the excess has been declining in recent years. Most of the other trustfunds also showed a consistent excess of receipts over payments during this

116


TABLE C-19.—Relation between the Federal budget surplus or deficit, receipts fromand payments to the public, and change in the public debt, 1953—59

[Fiscal years, billions of dollars]

Item

Budget surplus or deficit (— )

Plus: Net receipts, or expenditures (— ), fromtrust account transactions _ _ . _ _ _ . .

Accrued interest and other noncash ex-penditures (net) _ _ _ _

Less: Receipts from exercise of monetary author-ity .

Expenditures (net) of government-spon-sored enterprises

Equals: Net receipts from, or payments (— ) to, theSublic (consolidated cash surplus or

eficit)

Plus: Receipts from seigniorage less changes incash balance held outside Treasury

Less: Increase or decrease (— ) in Treasurer's ac-count balance

Equals: Net cash borrowing from the public or re-payment ( — ) 2

Plus: Accrued interest on savings bonds andTreasury bills

Issuance of public debt securities repre-senting budget expenditures or refundsof receipts - - _ _

Net investment in Federal securities bygovernment agencies

Less: Net sale of obligations of government en-terprises in the market

Equals: Net increase in public debt

1953

—9.4

3.6

.5

.1

-.1

-5.3

.1

-2.3

2.9

.7

(i)

3.3

(i)

7.0

1954

—3 1

2.0

.6

.1

-.4

- 2

-.2

2.1

2.5

.5

.1

2.1

(i)

5.2

1955

—4 2

1.0

.6

0).1

-2.7

.3

-.6

1.8

.5

.1

1.5

.9

3.1

1956

1 6

2.2

.9

(i)

.3

4 5

.2

.3

-4.4

.5

.2

3.2

1.0

-1.6

1957

1 6

1.4

— 8

(i)

(i)

2 1

(i)

-1.0

— 3 1

.4

rj

2.3

1.2

-2.2

1958

—2 8

.3

5

. 1

- 6

—1 5

— 1

4.2

5 8

.3

.7

.4

5.8

1959(esti-

mated)

— 12 9

— 1 3

1 9

. 1

9

—13 2

4

-4 3

8 5

.5

1.2

-.5

1.0

8.7

1 Less than $50 million.2 Sign changed.NOTE.—Detail will not necessarily add to totals because of rounding.


period. An occasional excess of payments over receipts in one trust fund,such as the Unemployment Trust Fund in the fiscal years 1954 and 1955,was more than offset by an excess of receipts over payments in other funds.

A change began, however, in the fiscal year 1958, when payments fromthe OASI Trust Fund exceeded receipts for the first time. Substantialnet payments were also shown by the Unemployment Trust Fund in thatyear. These net payments were more than offset in total by the net re-ceipts of the Federal Disability Insurance Trust Fund, the Federal Em-ployees Retirement Fund, and the Highway Trust Fund. In the fiscal year1959,, however, payments of the Highway Trust Fund, as well as the OASITrust Fund and the Unemployment Trust Fund, are expected to be sub-stantially in excess of current receipts; therefore, the current operations ofthe trust funds are expected to show, for the first time in recent years, asubstantial net excess of expenditures over receipts, and the anticipatedFederal deficit on a consolidated cash basis is expected to exceed the esti-mated deficit on a conventional basis (Table C-19).

It is estimated that in the fiscal year 1960 the situation will be reversedagain and that the Federal surplus on a consolidated cash basis will be

489916 O—59 9117


larger than the budget surplus on the conventional basis. Current opera-tions of the trust funds are then expected to show again a small net accu-mulation, partly because of higher contributions to the OASI Trust Fund,effective January 1, 1959, smaller net payments by the UnemploymentTrust Fund, and increased revenues for the Highway Trust Fund from therecommended increase in the Federal gasoline tax.

Public Debt

The public debt increased by $5.8 billion, to $276.3 billion, during thefiscal year ended June 30, 1958. By the end of the calendar year 1958,it had increased to $282.9 billion, an increase of $8 billion for the year.A further increase of approximately $2 billion by June 30, 1959 is nowestimated. The increase in the public debt during the fiscal year 1958 wassubstantially in excess of either the conventional budget deficit or the cashdeficit for the same period, but the opposite result is expected for the fiscalyear 1959 (Table C-19). The major reason for this difference is that theTreasury's cash balance was abnormally high on June 30, 1958.

Changes in the public debt do not necessarily measure the impact of Gov-ernment debt operations on the economy in terms of withdrawals of fundsfrom, or additions of funds to, the public. Net receipts by trust accounts,which are invested in United States Government securities, provide theTreasury with funds that can be used to redeem securities held by the publicor to reduce the amount of borrowing from the public if there is a budgetdeficit. On the other hand, net payments by trust accounts reduce the cashposition of the Treasury, and may lead to an increase in the debt held by thepublic as Federal security holdings by these accounts are reduced. The rela-tionships between the budget surplus or deficit, net cash receipts or payments,and changes in the public debt are shown in Table C-19 for the fiscal years1953 to 1959, inclusive.

FEDERAL, STATE, AND LOCAL FINANCES

Data on the net results of the financial transactions of the Federal Gov-ernment on a cash basis (Table C-20) show that the relationship betweenFederal cash payments and receipts has fluctuated considerably in recentyears. A deficit of $5.3 billion in the fiscal year 1953 was practically elimi-nated in the following year. A deficit of $2.7 billion in 1955 was followedby a substantial surplus in the fiscal year 1956 and a smaller surplus in thefiscal year 1957. In the fiscal year 1958, there was a deficit of $1.5 billion.

By contrast, cash receipts and payments of State and local governmentunits show much smaller swings during this period, with both cash receiptsand payments increasing steadily. Since 1953, payments have consistentlyexceeded receipts, with the largest deficit occurring in 1958. Except for1953, therefore, the net effect of State and local cash transactions has beento reduce the size of the cash surplus or to increase the size of the cash deficitof all government units combined.

118


TABLE C-20.—Consolidated cash statements of Federal and State and localgovernments, 1953—58

[Fiscal years, billions of dollars]

Receipts or payments

Total government:Cash receiptsCash payments

Total cash surplus or deficit (—) _ . _ _

Federal Government:Cash receiptsCash payments _. _ _

Federal cash surplus or deficit ( — )

State and local governments: !Cash receiptsCash payments _

State and local cash surplus or deficit (— )

1953

93 999 1

-5.2

71 576.8

— 5 3

22.422.3

1

1954

95 696 1

-.5

71.671.9

— 2

24.024.2

— 2

1955

93 597 5

-4.0

67 870 5

—2 7

25.727.0

— 1 3

1956

105 8101 7

4.1

77 172 6

4 5

28.729.1

4

1957

113 1111 6

1.5

82 180.0

2 1

31.031.6

6

1958

114 4117 7

-3.3

81.983.4

-1.5

32.534.3

— 1.8

i Estimates by Council of Economic Advisers.

NOTE.—Federal grants-in-aid have been deducted from State and local government receipts and pay-ments since they are included in Federal payments.


Sources: Treasury Department and Bureau of the Budget (except as noted).

All major classes of State and local government expenditures increasedduring the past year. Expenditures for education—more than one-third ofthe total—continued to be by far the largest single outlay, followed by ex*penditures for highways and public welfare. As in previous years, propertytaxes and taxes on sales and gross receipts accounted for about three-fifthsof State and local revenues. Both these sources of receipts, and also revenuefrom personal income taxes, have increased from year to year. Receiptsfrom taxes on corporate profits—not an important source of revenue forState and local governments—declined in 1958.

RECEIPTS AND EXPENDITURES OF FEDERAL, STATE, AND LOCALGOVERNMENTS: NATIONAL INCOME ACCOUNTS

Quarterly changes in Government receipts and expenditures, at season-ally adjusted annual rates, are shown in Table C-21 in terms of the na-tional income accounts. The presentation of Government receipts andexpenditures in these accounts shows the contribution of Governmentoperations to the gross national product and the income of the economymore directly than the piesentation in either the conventional budget orthe consolidated cash statement. A major difference between the nationalincome concept and the consolidated Government cash statement is thatthe former excludes capital transactions, such as sales of Governmentproperty, mortgage purchases by the Federal National Mortgage Asso-ciation, and Government purchases of other existing assets. Adjust-ments are also made for other reasons, such as differences in timing be-tween the recording of certain transactions in the national income accountsand the actual outlay or receipt of cash by the Government. For fiscal 1958,


the major part of the difference between receipts in the national incomeaccounts and in the consolidated cash statement was due to the differencein timing between the accrual and payment of corporate profits taxes. (Fora reconciliation between Federal Government receipts and payments on acash basis and on a national income basis, see Table D-54.)

As indicated in Table C-21, the surplus of Federal Government opera-tions on income and product account in the third quarter of the calendaryear 1957 was wiped out in the fourth quarter when receipts and expendi-tures were nearly in balance; and in each quarter of the calendar year 1958,

TABLE G—21.—Government receipts and expenditures as shown in the nationalincome accounts, 1957-58

[Calendar years, billions of dollars, seasonally adjusted annual rates]

Receipt or expenditure

Federal Government:

Receipts

Expenditures

Purchases of goods and servicesTransfer paymentsQrants-in-aid to State and local govern-

mentsAll other 2, ___

Excess of receipts or expenditures (— )

State and local governments:

Receipts., _ _ ._ ._

Expenditures

Purchases of goods and services _ _ . _All other 2

Excess of receipts or expenditures (— ).

IS

Thirdquarter

83.3

79.9

49.717.1

4.38.8

3.4

38.3

38.9

36.12.7

-.6

57

Fourthquarter

80.6

80.8

49 118.6

4.48.8

-.2

38.5

40.6

37.82.9

-2.1

Firstquarter

76.1

82.8

49 719.5

4 49.1

-6.6

38.9

41.6

38.63.1

-2.7

Ifi

Secondquarter

76.1

86.0

50 721.5

4.89.1

-9.9

39.8

42.1

39.13.0

-2.2

58

Thirdquarter

80.2

88.7

52.222.1

5.49.0

-8.6

41.2

42.8

39.93.0

—1.6

Fourthquarter l

83.4

90.6

53.821.7

6.09.1

-7.2

42.8

44.0

41.03.0

—1.2

1 Preliminary estimate by Council of Economic Advisers.2 See Table D-53, for items included.

NOTE.—Federal grants-in-aid to State and local governments are reflected in Federal expenditures andState and local receipts and expenditures.


Source: Department of Commerce (except as noted).

Federal Government operations showed a large deficit, the largest beingrecorded in the second quarter. Both a substantial decline in receipts andan increase in expenditures contributed to the shift from a surplus in the thirdquarter of 1957 to a deficit in the first quarter of 1958. Federal receiptsreached a low point in the first and second quarters of 1958; by the fourthquarter, they had recovered all the loss since the third quarter of 1957. Ex-penditures, however, continued to rise in each quarter of 1958; and by thethird quarter, they were more than 10 percent above expenditures a yearearlier. All major types of Federal expenditures increased, with the largestrise occurring in transfer payments.

120


Purchases of goods and services by the Federal Government in the firstquarter of 1958 were about the same as in the last two quarters of 1957,but in the following three quarters they increased at an accelerating rate.Payments for national defense, by far the largest component, account forsome of the increase during this period. Greater outlays for the support ofagricultural prices, as well as increased payments to Government employees,contributed to the increase in nondefense purchases of goods and services.

The steady rise in transfer payments through the third quarter of 1958reflects primarily higher unemployment insurance payments as well as in-creased benefit payments under the old-age, survivors, and disability system.Likewise, benefit payments from other social insurance funds, and compensa-tion and pension payments to veterans, have been increasing.

Grants-in-aid to State and local governments have been rising, particu-larly in the last three quarters of 1958. The two major items accountingfor the rise are the increase in Federal public assistance grants to Statesand grants-in-aid under the highway program.

State and local receipts and expenditures during this period show asteady upward trend. However, while the increases in expenditures inthe fourth quarter of 1957 and the first quarter of 1958 were more rapidthan the increases in receipts, the gap between receipts and expendituresnarrowed in subsequent quarters. State and local purchases of goods andservices rose steadily during this period; the most significant expenditureswere for education and for the construction of highways and other facilities.

121


VI. United States Foreign Trade and PaymentsChanges during the past two years in the economic situation in the United

States and abroad inevitably affected this country's foreign trade and pay-ments. While imports were well maintained, exports declined sharply aftermid-195 7; as a result, the United States surplus on transactions in goods andservices in the first half of 1958 was much below the high level attained a yearearlier and about the same as in 1956 (Table C-22). At the same time, thenet outflow of capital remained considerably above the early 1956 rate.These changes resulted in substantial additions to foreign gold and liquiddollar assets. Thus a movement which had proceeded for several yearsbefore the Suez crisis was resumed, but at a higher rate.

TABLE C—22.—United States balance of payments, selected periods, 1952—58 *


Receipt or payment

U nited States receipts -

Merchandise exports _ _Services and military transactionsForeign long-term investments in United States

United States payments -

Merchandise importsServices and military expenditures _Remittances and pensionsGovernment grants and related capital outflows (net)_.United States private and other Government capital

outflows (net)

Excess of receipts or payments:All transactionsGoods and services ._Capital, grants, remittances and pensions

Errors and omissions (net receipts) _ __ _

Increase in foreign gold and liquid dollar assets throughtransactions with the United States .__ .

July 1952-June 1956(annualaverage)

18, 955

13, 4015,259

295

20,903

11,1545,983

6012,128

1,037

-1,9481,523

-3, 471

303

1,645

1956,first half

1957,first half

1958

Firsthalf

Thirdquarter

Seasonally adjusted annual rates

22, 970

16, 2466,160

564

24, 408

12, 5307, 050

6102,428

1,790

-1,4382,826

-4, 264

214

1,224

27, 716

20, 0447,086

586

27, 860

13, 1987,336

6862,978

3,662

-1446,596

-6, 74C

1,148

-1,004

22, 946

16, 1546,764

28

26, 334

12, 5387,518

6762,454

3,148

-3, 3882,862

-6, 250

386

3,002

23, 324

16, 3247,000

26, 876

12,7127,880

7242,412

3,148

-3. 5522,732

-6, 284

376

3,176

1 The selection of periods is dictated by the behavior of certain major items in the balance of payments,especially that of United States exports. Mid-1952 to mid-1956 provides a base period of more or less normaldevelopment of trade and payments after the repercussions of the Korean conflict were over and before theeffects of the Suez crisis were felt; the first half of 1956 is given separately to show the levels prevailing at theend of that period. The first half of 1957 shows United States exports and other transactions at their peak,influenced by the general level of economic activity as well as by the Suez situation and other special forces.The first half and third quarter of 1958 give the more current situation, affected by the recession and otherdevelopments.

2 Transfers of military aid are excluded both from exports (under receipts) and from grants (under pay-ments) .


122


REASONS FOR DECLINE IN UNITED STATES EXPORTS

From the first half of 1957 to the first half of 1958, the value of UnitedStates merchandise exports fell more—in relative as well as absolute terms—than those of all other countries combined (Table C-23; also Chart 11

TABLE C-23.—Exports of the United States and other .countries, 1956-58

Period

1956: First half.Second half. _ _ _ _ _

1957: First halfSecond half _ _

1958: First half. ..Third quarter _ _

Change, first half 1957 to first half 1958:ValueUnit value

UnitedStates

Foreign countries l

TotalWesternEurope,Canada,

and Japan

Othercountries 2

Billions of dollars, seasonally adjustedannual rates

16.218.4

20.018.6

16.116.3

73.475.0

79.679.6

77.1378.6

43.244.8

47.948.2

47.2347.9

30.230.2

31.731.4

29.9330.7

Percent

-19.5-.5

-3.1-4.0

-1.5-2.0

-5.7-6.5

1 Excludes exports of U.S.S.R. and Soviet bloc countries.2 Includes Ireland, Iceland, Finland, Spain, and Yugoslavia.3 Preliminary.

Sources: Department of Commerce, International Monetary Fund, and United Nations.

in Chapter 2 ) . The reduction in the value of exports of foreign countrieswas due chiefly to a fall in export prices of the primary producing countries.Exports of the industrially developed countries declined relatively little, and,unlike those of the United States, remained significantly higher in the firstsix months of 1958 than in the first half of 1956. Exports, adjusted forseasonal variations, of these other industrial countries rose moderately againin the third quarter of 1958; and exports of the United States were slightlyhigher in that quarter than earlier in the year.

Examination of the export performance of the United States disclosesthat by far the greater part of the recent decline, as well as much of thesharp rise immediately preceding it, is attributable to developments ina few products. Six major commodities or commodity groups, whichusually constitute only about 30 percent of total United States exports,accounted for most of the rise from the first half of 1956 to the firsthalf of 1957 and for about three-fourths of the fall in the first half of 1958(Table C-24).

Special circumstances dominated the movements of petroleum, cotton,and wheat. Petroleum exports were temporarily swollen in the first halfof 1957 by the interruption of traffic through the Suez Canal. Cottonexports, which had been abnormally low in the first half of 1956, pending

123


TABLE C-24.—Change in United States exports, 1956 to 1958

[Millions of dollars, annual rates]

Commodity group !

Total exports, excluding "special category"

Six main items in the decline '

Crude petroleum and selected fuels 2 _Raw cotton including lintersWheatCoal and related fuelsIron and steel-mill products, nonferrous metals, scrap, and

ferroalloysAutomobiles and parts and accessories

Other exports *

Meat and dairy products, lard, and other edible animalproducts

Oils, greases, and other inedible animal productsVegetable food prr ducts and beverages, excluding wheat. . .Rubber and manufacturesOilseeds and expressed oils. ..Wood and paperLubricating oil and~ other petroleum productsMetal manufactures . . . - - - - . . . . . .Machinery, all typesChemicals and related productsTextile manufactures (semi- and finished manufactures)Selected finished manufactures 3

All other products 4

Exports,first half

1956

16. 294

5,029

214484669630

1,5261,506

11, 265

383313

1,235262256444308462

3,6121,244

632673

1,441

Change

First half1956 to first

half 1957

3,690

2,357

582794241224

562-46

1, 333

2921

-284678464644

4381646691

292


half 1958

-3, 920

-2,992

-617-422-335-328

-1,030-260

-928

-140-60

97-26

-137-44-72-20

-218-60-68-41

-139

1 Exports grouped to show main products accounting for the decline from first half 1957 to first half 1958.See Table D-73 for additipnal detail by area.

2 Includes gas oil, fuel oil, and motor fuel other than aviation gasoline.3 Includes photographic and projection goods, scientific and professional instruments, musical instru-

ments, miscellaneous office supplies, small arms and ammunition, books, maps, and other printed matter.4 Includes, in addition to miscellaneous items, such exports as tobacco and tobacco products, articles for

charity, and total reexports of merchandise.


a revision of the United States export price, rose subsequently when foreignstocks were being replenished, but later declined, although they still wererelatively high. Wheat shipments were exceptionally large for a timebecause of the poor 1956 harvest in Europe and because of deliveries tothe Far East under special programs.

Two other export items—metals and coal—proved to be extremelysensitive to changes in demand—first when foreign production capacitywas strained during the boom and later when excess capacity emerged.The effect of this changed world market situation on United States steelexports has been aggravated by intensified price competition from foreignsuppliers. United States coal remains strongly competitive at its landedprice abroad, but it is encountering serious obstacles in Europe. There,stocks have piled up at pithead because of continued high coal productionin the face of decreased demand as a result of reduced activity in the Euro-pean steel industry, cuts in users' stocks, gains in coal-burning efficiency,and further displacement by fuel oil.

Exports of automobiles, parts, and accessories have shown a general andpronounced decline, after having failed to share in the over-all rise in

124


United States exports in 1957. The decline in 1958—especially that inexports of motor trucks which had previously increased—is attributable inconsiderable part to cyclical influences. Exports of passenger cars and ofchassis, however, have fallen over the last several years so much that theynow represent only a quarter of the total value of exports of this group.Meanwhile, exports of foreign cars have risen rapidly; in the first half of1958, their value was equivalent to five times the American exports of pas-senger cars and chassis. The growth in demand abroad for the small for-eign models reflects the spread of the market to lower income groups, theincrease in traffic congestion in many cities, steeply graduated taxes onlarge cars and high gasoline taxes in many countries, continued restrictionson car imports in the producing countries, and, in some other countries,preferential import treatment for small cars.

In addition to the influence of the shifts in the major export items justdiscussed, United States exports have been affected by changes in the eco-nomic situation in certain countries. The annual rate of sales to Canadaalone in the first half of 1958 was $750 million below the rate a year earlier.Half of this decline was in exports of products other than the six discussedabove (Table D-73). The decline in sales of machinery to Canada is espe-cially noteworthy since it is in contrast to such sales to most other countriesand reflects a slower rate of industrial investment in Canada.

Much of the $400 million decline in the annual rate of exports to West-ern Europe (Table D-73) of items other than the six separately discussedis directly attributable to changes in general business conditions or in agricul-tural production, though the effects of these changes have been felt by othersuppliers as well.

In summary, the relatively sharp decline in United States exports afterthe middle of 1957 is accounted for by a combination of factors: the disap-pearance of certain special circumstances which had, for a time, raisedshipments of petroleum, cotton, and wheat to exceptionally high levels; andcyclical shifts which had also lifted certain exports, such as steel and othermetals, to unusually high levels but which now leave them temporarilydepressed. Both sets of influences have affected United States exports withparticular force because of their broad commodity composition, which differsfrom that of any other industrial country, and to some extent also becauseof their country distribution. These reasons for the wide swings in UnitedStates exports, however, do not diminish the importance of efforts tostrengthen the position of the United States in a more highly competitiveworld market.

FACTORS OF STRENGTH AND WEAKNESS IN UNITED STATES IMPORTS

The total value of United States imports, on the other hand, has beenrelatively well maintained. This comparative strength is attributable toseveral forces, including particularly the maintenance of consumer demand.

'25


TABLE C-25.—Change in United States imports, 1956 to 1958


Commodity group l

Total imports for consumption . . . .

Main items increasing l

Meats meat products and cattleOther foods, except coffeePetroleum and productsAutomobiles _ -

Items showing little change l

Sawmill productsChemicals and related products _. - . _..Machinery, including agricultural and officeTextile manufactures 2

Selected finished manufactures 8 _- . - _\11 other products

Main items decreasing1. . . . . .

CoffeeNonferrous metals, iron ore, ferroalloys and steel-mill

products _ .Diamonds, rough, cut, and bort. ..- _.. __Natural crude rubberWool and other textile fibers 4

Newsprint and paper base stocks . -

Imports,first half

1956

12, 473

3, 220

1641,6961,232

128

3,611

300290374608184

1, 855

5, 642

1,500

2,028244450416

1,004

Change


half 1957

323

420

24-30266160

47

-68-6704

3413

-144

-84

204-52

-108-68-36


half 1958

-298

728

216190114208

-52

-14-218

-2-6

-46

-974

186

-482-34

-100-102-70

1 Imports grouped according to direction of change from first half of 1957 to first half 1958.2 Semimanufactures other than man-made filaments included.3 Leather goods, photographic goods, scientific and professional instruments, toys and athletic goods,

advanced metal manufactures.4 Cotton, silk, man-made filaments, and hard fibers.NOTE.—Detail will not necessarily add to totals because of rounding.


As shown in Table C-25, the value of a substantial number of importedcommodities has either increased or changed very little. Imports of auto-mobiles,, especially, continued to rise during the recession; imports of meatand other foodstuffs, except coffee, were substantially greater in the firsthalf of 1958 than a year earlier, though largely because of temporary con-ditions affecting domestic supplies of some of these products; and petroleumimports were also higher, but the increase was less than in the first half of1957, when the rise from a year earlier was due to higher prices as well asgreater volume.

The value of imports of coffee in the first half of 1958 was sharply belowthe value in the same period of 1956 and of 1957. The pressure of coffeesupplies on the market resulted in some weakening of prices and thereforein increased caution in dealers' inventory policies; as a result, the volume aswell as the price of coffee imports declined.

The other main commodity imports shown in Table C-25 as decreasingare all in the nature of industrial materials. This group as a whole declinedby an annual rate close to $800 million, or almost 20 percent, from the firsthalf of 1957 to the first half of 1958. Reductions in volume and in pricewere of about equal importance.

126


These changes in United States imports affected different supplyingcountries and areas according to the composition of their exports. Exportsfrom the Middle East to the United States increased because of petroleum;those from Mexico and Cuba expanded chiefly because of meat and otherfoodstuffs. On the other hand,, exports to the United States from thecoffee-supplying countries in Latin America were depressed, and alsothose from Canada and Latin American countries for which nonferrousmetals and other industrial materials are important. Influenced by goodmarkets for cocoa and for African types of coffee, United States importsfrom Africa were well maintained. Imports from Europe fluctuated verylittle, as increases in automobiles offset decreases in steel and other metals.Imports from Japan rose, but those from other areas in the Far East fellbecause of smaller United States purchases of rubber and tin.

INCREASE IN UNITED STATES INVESTMENT ABROAD

Like receipts from exports, the net outflow of funds in the form ofcapital investment and grants from the United States had risen to a peakin the first half of 1957. The subsequent decline, however, was smallerthan the decrease in exports, and the net outflow of funds in the first sixmonths of 1958 still exceeded that in the corresponding period in 1956 orearlier (Table C-22). The large outflow in 1957 included substantial pay-ments for oil concessions (Table D-72) and related investment activitiesin Venezuela. The net outflow of capital exclusive of these payments con-tinued to increase during each of the last several years. Preliminary esti-mates indicate that the net outflow in the third quarter of 1958, adjustedto correct for the usual summer lull, was about the same as in the first halfof the year, though with offsetting changes in the component items.

The largest increase over the first half of 1956—at least up to mid-1958—was in new foreign security offerings; United States private direct in-vestment abroad, after a considerable expansion in 1957, fell back to its earlierlevel. (For details by type and area of investment, see Tables D-71 andD-72.) Private short-term credits abroad and Government lending havealso risen, while the inflow of foreign redemption payments to Americanbondholders and of foreign long-term investment in this country hasdeclined.

There may also have been some unrecorded capital outflow, followingthe large shifts of funds to the United States during the Suez crisis andthe subsequent currency speculation in Europe. By their nature, suchshifts frequently do not appear in the recorded data on capital flows, andthe only evidence of these movements lies in the behavior of the residualitems (errors and omissions) in the United States global balance of pay-ments (Tables C-22 and D-71). This item normally shows unidentifiedreceipts of several hundred million dollars annually, because of over-estimates of certain payments or underestimates of certain receipts forwhich precise records are not available. With due allowance for this dc-

127


ficiency in the estimates, the inflow of unrecorded capital during the 12months from October 1956 through September 1957 seems to have reachedsomething like $1 billion. Any subsequent outflow of these funds hasbeen small, at most, or outweighed by other unrecorded receipts.

The high level of foreign security flotations in the United States duringthe first half of 1958 is accounted for largely by bond offerings by the Inter-national bank for Reconstruction and Development to finance its grow-ing lending operations abroad, and by Canadian issues. The spreadbetween interest rates in the United States and Canada in the early part ofthe year gave a particular inducement to the flotation of Canadian issuesin the United States market. There has also been, especially in the latterpart of 1958, a noteworthy rise in securities offered by overseas countries.Foreign bonds payable in United States dollars have again become anattractive investment medium for security buyers, both in this country andabroad.

The large outflow of public and private capital from the United Statessince the end of the war has helped to achieve a rapid growth in the worldeconomy. It has also made possible a high volume of United States exports,directly by providing funds which were spent on United States goods andindirectly by leading to the strengthening of foreign reserves and helping toremove obstacles to international trade and payments. When, as recently,foreign purchases of American goods slacken for any reason, a continuingstrong flow of dollars for imports and for foreign investment and grantsresults, for the time being in a faster increase in the gold and dollar hold-ings of other countries. At the same time, however, these movementsstrengthen the basis for economic expansion and generate conditions favor-able to the growth of United States exports. Such considerations arepertinent to an appreciation of the foreign trade and payments position ofthe United States in 1958.

RISE IN GOLD AND DOLLAR HOLDINGS OF INDUSTRIAL COUNTRIES

Since the autumn of 1957, foreign countries and international institutionshave increased considerably their holdings of gold and liquid dollar assetsthrough transactions with the United States. During the year ended Sep-tember 1958, their gains from this source totaled $0.8 billion in dollar fundsand $1.8 billion in gold. Inclusive of gold acquired from new foreign pro-duction or other sources outside the United States, the 12-month gain ingold and dollar balances owned abroad amounted to $3.4 billion.

This gain, however, accrued almost exclusively to the industrially devel-oped countries; the holdings of other countries decreased considerably. The12-month changes in foreign gold and dollar holdings (in millions of dol-lars) were distributed as follows: United Kingdom, +1,380; Netherlands,+ 421; Belgium, +326; Italy, +416; Federal Republic of Germany. +263;Switzerland, +165; other Western Europe, +545; Canada, +149; Japan,+ 312; Venezuela, —382; other Latin America, —226; all other countries,

128


— 311; international institutions, + 351 (see Table D-75 for further details).The increases were primarily in reserves of countries which ordinarily holdofficial reserves chiefly in gold, though some of them also added to theirdollar holdings on official or private account. Conversely, the decreaseswere largely in countries (for example, most Latin American countries),which usually keep most or much of their official reserves in dollars, inaddition to private funds held in this currency; however, some of them hadto reduce their gold holdings also.

INCREASE IN THE USE OF DOLLARS FOR MULTILATERAL SETTLEMENTS

The large increases in the gold and dollar holdings of the industrially ad-vanced countries—Western Europe, Canada, and Japan—resulted in con-siderable part from the strains in the foreign trade and payments of the lessdeveloped countries and of certain others which are also exporters of primaryproducts. Domestic inflation, overimporting, and widespread declines inthe prices of export commodities and in export earnings in recent yearshave caused sharp increases in the trade and payments deficits of the pri-mary producing countries with third areas, chiefly Western Europe. (Forchanges in trade flows, see Chart 11 and Table D-74.) As a regularfeature of the multilateral trade system, part of these deficits is usuallysettled in dollars. Indirect evidence indicates that the amount of dollarsso employed recently has been much greater than in the years prior to 1957;in this comparison, 1957 is disregarded because of the exceptionally largedeficits on trade or capital account of certain Western European countriesand Japan.

The data in Table C-26 (though subject to a considerable margin oferror) suggest that the net annual rate of gold and dollars used for multi-lateral settlements by the countries exporting primary goods was at least $1billion or more higher in the first half of 1958 than in the first half of 1956,and higher still in comparison with the 1952—56 average. The fact thatthe net receipts of gold and dollars of Western Europe, Canada, and Japanvia multilateral settlements have risen by a still greater amount in the periodsince 1956 reflects the increased activity of the International MonetaryFund—which has helped to relieve strains in international payments—andthe increase in loans by the International Bank for Reconstruction andDevelopment.

The increase in multilateral settlements, far more than any change inthe net receipts of the industrial countries from the United States, accountsfor the recent large increases in the gold and dollar accumulations of thisgroup of countries.

By far the greater part of dollar settlements of the primary producingcountries with the industrial group has been covered by their net receiptsfrom the United States, as shown in Table C-26. These receipts, togetherwith the growing financial support given by the United States throughinternational institutions, have effectively assisted in rebuilding and

129


TABLE C-26.—Use of gold and dollars for international settlements, selected periods,1952-58


Area and item

Western Europe:Increase in gold and dollar holdingsLess: Net receipts from known transactions with the

United States !

Goods and services _Capital 2 and grants

Equals* Other gold and dollar receipts, net

Canada:Increase in gold and dollar holdingsLess- New gold production

Net receipts from known transactions with theUnited States »

Goods and services _ _ _ _ _Capital 2 and grants

Equals' Other gold and dollar receipts, net

Japan:Increase in gold and dollar holdingsLess: Net receipts from known transactions with the

United States J

Equals* Other gold and dollar receipts, net ... _ .

Other countries:Increase in gold and dollar holdings 3

Less* New gold production 3

Net receipts from known transactions with theUnited States !

Goods and servicesCapital 2 and grants •>

Equals' Other gold and dollar receipts, net

International institutions:Increase in gold and dollar holdingsLess: Net receipts from known transactions with the

United States '

Equals* Other gold and dollar receipts, net

Addendum:Deficiency in sum of net gold and dollar receipts as given

above

Unidentified transfers, net, to the United States 4

Other unidentified uses [or receipts (— )] of gold anddollars, n e t . . _ _ _ _ _ _

July 1952-June 1956

(annualaverage)

1,700

1,250

1401,110

450

55150

-575

-970395

480

80

325

-245

200665

870

-8851,755

-1,335

165

75

90

560

290

270

1956,firsthalf

1957,firsthalf

1958,firsthalf

Annual rates

1,260

1,070

80990

190

270155

-990

-1,725735

1,105

290

350

-60

330725

1,400

-1,2902,690

-1,795

115

40

75

485

315

170

625

-235

-1,4801,245

860

430155

-635

-1,9201,285

910

-785

-325

-460

890740

1,400

-2,6504,050

-1,250

-900

320

-1, 220

1,160

1,250

-90

3,540

1,410

2851,125

2,130

440160

-75

-1,2501,175

355

435

250

185

-765785

1,500

-1,9003,400

-3,050

450

660

-210

590

485

105

1 See Table D-72. The balance for Japan, however, is a rough estimate by the Council of EconomicAdvisers, and the figures for "other countries" have been adjusted accordingly to exclude Japan.

2 Includes movements of long- and short-term U. S. capital and of foreign long-term investments in theUnited States (other than United States Government securities).

3 Excludes gold holdings and gold production of the U.S.S.R. and other countries of the Soviet bloc4 Errors and omissions item in Table D-71, expressed as an annual rate rounded to the nearest $5 million

NOTE.—The area or country figures on "other gold and dollar receipts" (derived as a residual in themanner indicated above) include not only inter-area settlements but also unrecorded transfers to the UnitedStates. The latter are known only on a net global basis Cas the errors and omissions item in the UnitedStates over-all balance of payments). They explain, as shown in the addendum to the table above, mostof the discrepancy between the sums of the plus and minus figures for "other gold and dollar receipts."The remainder of the discrepancy would, in principle, represent the net effect of such operations as (a) useof gold in the arts and industry or for hoarding and (6) receipts of gold from dishoarding or from Sovietsales.

Source: Council of Economic Advisers.

130


strengthening the framework of multilateral trade and payments and havecontributed much to the progress in overcoming restrictive forces in theworld economy.

For the remainder of their multilateral gold and dollar settlements, theprimary producing countries have drawn on their accumulated gold anddollar holdings. In addition, they reduced their balances in other cur-rencies; sterling balances alone were drawn down in the first half of 1958at an annual rate of some $300 million, compared with no reduction twoyears earlier.

Preliminary estimates indicate that in the third quarter of 1958 theprimary producing countries continued to make large settlements in goldand dollars, covered partly by their net receipts from the United Statesand partly by further drawings on their reserves. Canada also showednet payments for the quarter, though perhaps for seasonal reasons. West-ern Europe's net gold and dollar receipts from third countries continuedat about the same rate as earlier in the year; these receipts, together witha large surplus in transactions with the United States, caused WesternEurope's gold and dollar holdings to rise further.

UNITED STATES EXPORT PERFORMANCE ANDTHE ADJUSTMENT PROBLEM

The increase in the foreign investment and other payments of the UnitedStates in recent years has not been matched by an equally large growth in itsexports of goods and services. The annual rate of outflow through privateand public investments and grants, net of foreign long-term investment inthis country, was some $2.8 billion higher in the first three quarters of 1958than in 1952-56 (Table C-22). Imports of goods and services togetherwith military expenditures abroad rose over the same period by $3.1 billion.Thus, the total increase in these transactions was $5.9 billion.

Exports of goods and services have risen about $4.4 billion above the1952-56 average, or at an annual rate of 6 percent. Most of this increasehad occurred by 1956, and was surpassed temporarily in 1957 because ofexceptional demand forces at that time. The level actually attained in1958 can be regarded as a significant increase in relation to earlier years,since foreign economic conditions last year were not favorable to the normaldevelopment of United States exports. Some major shifts in internationaltrade were unavoidable, not only because of the cessation of certain condi-tions (such as those related to the Suez crisis) that had prevailed in theearly part of 1957, but also because various maladjustments had arisen dur-ing the previous period of rapid growth (see Chapter 2 ) . Contrasting de-velopments during the two latest recessions illustrate the significance of sus-tained world economic growth for United States exports. While UnitedStates imports slackened in the 1953-54 recession and remained weak forsome time, exports, after only a momentary pause, followed the upwardcourse of economic activity abroad (Charts 10 and 11) and contributed torecovery in the United States.


Appendix D

STATISTICAL TABLES

1334890160—59 -10


CONTENTSNational income or expenditure: Page

D-l. Gross national product or expenditure, 1929-58 139D-2. Gross national product or expenditure, in 1958 prices, 1929-58 140D-3. Gross private and government product, in current and 1958 prices,

1929-58 142D-4. Gross national product or expenditure, in 1954 prices, 1929-58 143D-5. Implicit price deflators for gross national product, 1929-58 144D-6. Gross national product: Receipts and expenditures by major economic

groups, 1929-58 146D—7. Personal consumption expenditures, 1929-58 148D-8. Gross private domestic investment, 1929-58 149D-9. National income by type of income, 1929-58 150D-10. Relation of gross national product and national income, 1929-58. . . . 151D—11. Relation of national income and personal income, 1929-58 152D-l2. Sources of personal income, 1929-58 153D-l 3. Disposition of personal income, 1929-58 154D-l 4. Total and per capita disposable personal income and personal con-

sumption expenditures, in current and 1958 prices, 1929-58 155D-l 5. Financial saving by individuals, 1939-58 156D-l 6. Sources and uses of gross saving, 1929-58 157

Employment and wages:D-l 7. Noninstitutional population and the labor force, 1929-58 158D-l8. Employment and unemployment, by age and sex, 1942-58 160D-l 9. Employed persons not at work, by reason for not working, and special

groups of unemployed persons, 1946-58 161D—20. Unemployed persons, by duration of unemployment, 1946-58 162D—21. Unemployment insurance programs, selected data, 1939 and 1946-58. 163D-22. Number of wage and salary workers in nonagricultural establishments,

1929-58 ' 164D-23. Average weekly hours of work in selected industries, 1929-58 166D—24. Average gross hourly earnings in selected industries, 1929-58 167D—25. Average gross weekly earnings in selected industries, 1929-58 168D-26. Average weekly hours and hourly earnings, gross and excluding over-

time, in manufacturing industries, 1939-58 169D—27. Average weekly earnings, gross and net spendable, in manufacturing

industries, in current and 1958 prices, 1939-58 170D-28. Labor turnover rates in manufacturing industries, 1930-58 171

Production and business activity:D-29. Industrial production indexes, 1929-58 172D—30. Business expenditures for new plant and equipment, 1939 and 1945-59 . 174D-31. New construction activity, 1929-58 175D-32. New public construction activity, 1929-58 176D—33. Housing starts and applications for financing, 1929-58 177D—34. Sales and inventories in manufacturing and trade, 1939-58 178D—35. Manufacturers' sales, inventories, and orders, 1939-58 179

135


Prices: PageD-36. Wholesale price indexes, 1929-58 180D-37. Wholesale price indexes, by stage of processing, 1947-58 182D-38. Consumer price indexes, 1929-58 184D-39. Consumer price indexes, by selected major groups, 1935-58 185

Money supply, credit, and finance:D-40. Deposits and currency, 1929-58 186D-41. Loans and investments of all commercial banks, 1929-58 187D-42. Federal Reserve Bank credit and member bank reserves, 1929-58. . . . 188D-43. Bond yields and interest rates, 1929-58 189D-44. Short- and intermediate-term consumer credit outstanding, 1929-58. . 191D-45. Instalment credit extended and repaid, 1946-58 192D-46. Mortgage debt outstanding, by type of property and of financing,

1939-58 193D-47. Net public and private debt, 1929-58 194

Government finance:D-48. U. S. Government debt, by kind of obligation, 1929-58 195D-49. Estimated ownership of Federal obligations, 1939-58 196D-50. Federal budget receipts and expenditures and the public debt,

1929-60 197D-51. Federal budget receipts by source and expenditures by function, fiscal

years 1946-60 198D-52. Government cash receipts from and payments to the public, 1946-60. . 199D-53. Government receipts and expenditures as shown in the national income

accounts, 1955-58 200D-54. Reconciliation of Federal Government receipts and expenditures in

the conventional budget and the consolidated cash statement withreceipts and expenditures in the national income accounts, fiscalyears 1956-58 201

D-55. State and local government revenues and expenditures, selected fiscalyears, 1927-57 202

Corporate profits and finance:D-56. Profits before and after taxes, all private corporations, 1929-58 203D-57. Relation of profits before and after taxes to stockholders' equity and

to sales, private manufacturing corporations, by asset size class,1956-58 204

D-58. Relation of profits after taxes to stockholders' equity and to sales,private manufacturing corporations, by industry group, 1956-58. . 205

D-59. Sources and uses of corporate funds, 1947-58 207D-60. Current assets and liabilities of U. S. corporations, 1954-58 208D-61. State and municipal and corporate securities offered, 1934-58 209D-62. Common stock prices and earnings and stock market credit, 1939-58. 210D-63. Business population and business failures, 1929-58 211

Agriculture:D-64. Income of the farm population, 1929-58 212D-65. Farm population, employment, and productivity, 1929-58 213D-66. Farm production indexes, 1929-58 214D-67. Indexes of prices received and prices paid by farmers, and parity

ratio, 1929-58 215D-68. Comparative balance sheet of agriculture, 1940-59 216D-69. Level-of-living indicators for farm-operator families, selected years,

1920-56 216D-70. Selected indicators of farming conditions, 1929-58 217

136


International transactions: PageD-71. United States balance of payments, 1952-58 218D-72. United States balance of payments with individual areas, 1952-58. . . . 219D—73. United States exports by selected commodities and markets, 1956-58 . 222D-74. World exports, 1956-58 223D-75. Estimated gold reserves and dollar holdings of foreign countries and

international institutions, 1952 and 1956-58 224D—76. Price changes in international trade, 1955-58 225

137


NATIONAL INCOME OR EXPENDITURE

TABLE D-l.—Gross national product or expenditure, 1929-58


Period

1929

19301931193219331934

19351936193719381939

1940 .19411942 . . _1943194419451946194719481949

19501951195219531954

1955 .195619571958 6

1956:First quarterSecond quarter __Third quarterFourth quarter _ _

1957:First quarterSecond quarter __Third quarterFourth quarter __

1958:First quarterSecond quarterThird quarterFourth quarter 6 _

Totalgrossna-

tionalprod-uct

104.4

91.176.358.556.065.072.582.790.885.291.1

100.6125.8159.1192.5211.4213.6210.7234.3259.4258.1284.6329.0347.0365.4363.1397.5419.2440.3436.7

410.8414.9420. 5430. 5

436. 3441.2445. 6438.9

425.8429.0439.0453.0

Per-sonalcon-

sump-tionex-

pendi-tures i

79.071.061.349.346.451.9

56.362.667.364.667.671.981.989.7

100.5109.8121.7147.1165.4178.3181.2

195.0209.8219.8232.6238.0

256. 9269.4284.4290.6

265.2267.2269.7275.4

279.8282.5288.3287.2

286.2288.3291.5296.5

Gross private do-mestic investment 2

"3

116.210.35.5.9

1.42.9

6.38.4

11.76.79.3

13.218.19.95.67.1

10.428.131.543.133.0

50.056.349.950.348.9

63.868.265.353.5

68.067.768.168.8

65.967.066.761.5

49.6*49.2853.7861.5

§

1

1

8.76.24.01.91.41.72.33.34.44.04.8

5.56.63.72.32.73.8

11.015.319.518.824.224.825.527.629.734.935.736.536.5

35.235.835.836.2

36.136.136.637.1

36.334.936.338.6

£X!2~II3 O<^ o>

5.84.52.81.61.62.33.14.25.13.64.25.56.94.34.05.47.7

10.716.718.917.218.921.321.322.320.8

23.127.027.922.6

25.926.627.328.2

28.728.128.026.7

22.98 22. 3»22.3823.0

Is•°'Sfi-3

!>j§-**CJ w

£ s

1.7-.41 3

-2.6-1.6

1 l

.91.02.2-.9

.4

2.24.51.8-.8

-1.0-1.1

6.4-.54.7

-3.16.8

10.23.1.4

-1.65.85.41.0

-5.6

6.95.44.94.4

1.12.92.2

-2.3

Q C

-s!o-5.0

(8)

Net exports ofgoods andservices 3

£

1I0.8

.7

.2

.2

.2

.4

-.1-.1

.11.1.9

1.51.1

-.2-2.2-2.1-1.4

4.99.03.53.8

.62.41.3

A

i.'o1.12.84.91.3

.82.83.24.4

5.66.04.83.3

1.71.71.7

en

Iw

7.05.43. 62.52.43.03.33.54.64.34.45.46.04.94.55.47.4

12.817.914.514.0

13.117.917.416.617.519.423.026.0(7)

20.922.523.624.8

26.426.626.024.9

21.922.422.8(7)

•§oash-H

6.3

4.83.42.32.32.53.33.64.53.23.5

3.84.85.16.87.58.87.98.9

11.010.2

12.515.516.117.016.518.320.221.0(7)

20.119.820.420.4

20.820.621.221.6

20.220.821.2(7)

Government purchases ofgoods and services

3e8.59.29.28.18.09.8

10.011.811.712.813.314.124.859.788.696.582.930.528.434.540.2

39.060.576.082.875.375.678.885.791.2

76.877.279.581.8

85.085.785.886.9

88.389.792.094.8

'cs

1

1.3

1.41.51.52.03.02.94.84.65.35.26.2

16.952.081.289.074.820.615.619.322.2

19.338.852.958.047.5

45.345.749.451.6

44.844.546.147.5

49.149.749.749.1

49.750.752.253.8

Federal

11'£ Oiccid

1.1.1.1.2.3.2.4.4.5.

1.32.2

13.849.680.488.675.918.811.411.613.614.333.946.449.341.2

39.140.344.344.3

39.139.141.042.1

43.744.944.943.9

43.744.144.545.0

CDft

6

34550098633.9

4.03.22.71.51.61.04.55.48.28.9

5.25.26.79.06.76.65.75.57.6

6.15.75.45.7

5.85.15.25.7

6.36.98.09.2

feS£39t3J <D|

(5)

(5)(5)(5)(5)(5)

(5)(5)(5)(5)(5)

(5)(5)0.2.6

1.22.22.71.1.5.2

.1

.3

.3

.3

.3

.4

.3

.4g

.3

.4

. i

i!si

^3c03

100

7.2

7.87.76.66.06.8

7.17.07.27.58.27.97.87.77.47.58.19.9

12.715.217.919.721.723.224.927.7

30.333.136.339.6

32.032.733.434.4

35.936.036.137.8

38.639.139.941.0

1 See Table D-7 for major components.2 See Table D-8 for more detail and explanation of components.3 For 1929-45, net exports of goods and services and net foreign investment have been equated, since foreign

net transfers by government were negligible during that period.4 This category corresponds closely to the major national security classification in the Budget of the United

States Government for the Fiscal Year ending June 30,1960.5 Less than $50 million.6 Preliminary; fourth quarter by Council of Economic Advisers.7 Not available.8 Data for the last 3 quarters of 1958 have not been revised to reflect lower expenditures reported in the last

two surveys of business expenditures for new plant and equipment. See Table D-30.

NOTE.—Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement to theSurvey of Current Business, 1959.




TABLE D-2.—Gross national product or expenditure•, in 7958 prices, 7929-58 1—Continued

[Billions of dollars, 1958 prices]

Period

1929

19301931193219331934

19351936193719381939

19401941194219431944

194519461947 --.19481949

19501951195219531954

1955195619571958 7

1956:First quarterSecond quarter..Third quarter...Fourth quarter ...

1957:First quarterSecond quarter _.Third quarter. _ _Fourth quarter..

1958:First quarterSecond quarter. _Third quarter...Fourth quarter 7.

Totalgross

nationalproduct

201.0

182.0168.3143.1139.5152.9

168.3191.7202. 5192.8208.8

227.0264.1299.4335.7360.0

354.1312. 2311.8323.7324.0

351.6379.6393. 3411.1403.2

435.4446.1451.1436.7

Personal consumptionexpenditures

Total

138.0

129.7125.7114.3111.6117.4

124.7137.5142.3139.9147.8

155. 7166.0162. 4166.6172.6

184.6207.0210.5214.5220.0

233.4235.3241.4253.1256.3

275.6284.0291.1290.6

Dura-ble

goods

15.7

12.510.88.27.99.1

11.313.914.611.814.0

16.218.611.59.99.1

10.320.524.626.027.8

33.930.830.134.934.2

41.840.040.336.8

Non-durablegoods

69.4

66.165.760.558.762.6

66.173.776.277.581.6

85.491.192.995.8

100.0

107.9114.5112.0111.8113.1

116.2118.3122.3125.9127.0

133.4138.5141.2142.0

Services

52.9

51.149.245.645.045.7

47.349.951.650.652.1

54.156.358.060.963.5

66.472.073.976.879.1

83.386.289.092.395.1

100.4105.4109.6111.8

Gross private domestic investment

Total

40.6

27.817.34.95.19.1

18.324.631.018.025.1

33.442.321.712.914.5

20.149.048.857.245.4

64.466.958.659.156.7

72.173.167.053.5

New construction

Total

24.1

17.912.67.05.35.9

7.810.813.011.614.0

15.617.59.05.15.6

7.720.022.926.025.6

31.329.929.831.734.1

38.837.737.236.5

Resi-dential(non-farm)

9.6

5.64.72.31.72.1

3.45.15.55.67.5

8.18.74.01.91.6

2.08.1

10.712.712.5

17.214.314.215.117.1

20.118.117.217.8

Other

14.5

12.37.94.73.63.8

4.35.87.56.06.4

7.58.85.03.24.0

5.711.912.213.313.2

14.115.715.616.617.0

18.719.520.018.7

Produc-ers'

durableequip-ment

13.2

10.57.04.24.46.0

8.010.912.48.6

10.0

13.015.38.88.2

10.9

15.119.125.827.023.5

25.326.125.926.724.7

26.729.428.622.6

Changein busi-

nessinven-tories

3.3

— . 6-2.3-6.2-4.6-2.8

2.62.95.6

-2.21.1

4.89.53.9-.4

-2.0

-2.89.9.1

4.2-3.7

7.810.92.9

-2.'f)

6.56.01.2

-5.6


443.4444. 1445. 1451.5

452. 4453.7453.3444.4

427.7429.0438. 6451.5

282.8283.0282.9287.1

289.1290.1293.9291.3

287.4288.2291.5295.5

41.039.638.840.5

40.939.840.739.8

36.635. 836.138.6

138. 3138.7138. 0139. 2

140.0140.8143. 0140.9

139. 9140.9143.1144.2

103. 5104.7106.1107.4

108.3109. 5110.2110.6

110.8111.5112.2112.8

74.772.772.572.4

68.968.967.762.3

49.8M9.2^53.7'61.4

38.137.637.537.6

37.636.737.037.4

36.434.836.438.5

18.718.117.918.0

17.416.616.917.6

17.116. 318.020.0

19.419.419.719.6

20.120.120.019.8

19.218.518.418.5

29.029.229.629.8

29.828.928.527.0

23.0'22.3*22.3s 23. 0

7 66.05.45.0

1.53.32.2

-2.1

-9.5-8.0-5.0(e)

See footnotes at end of table, p. 141.

140


TABLE D-2.—Gross national product or expenditure, in 1958 prices, 1929-58 l—Continued


Period

1929 .

1930 . -1931.193219331934 .

193519361937 - -1938 - - _ -1939

19401941194219431944

19451946194719481949

1950 - .195119521953 . .1954

195519561957 . . .1958 7

1956: First quarterSecond quarterThird quarterFourth quarter ... _ _

1957: First quarterSecond quarterThird quarterFourth quarter

1958: First quarter -Second quarterThird quarter _ . . . .Fourth quarter 7

Netexportsof goods

andservices 2

.9

.8

.2

.1-.4-.2

-1.5-1.7-1.1

1.4.8

1.7(6)-2.4-6.1-6.2-4.9

4.79.12.83.51.13.22.3.1

2.0

2.13.75.31.3

Government purchases of goods and services

Total

21.5

23.725.023.823.126.526.831.330.333.635.1

36.355.8

117.8162.3179.2154.4

51.543.449.255.252.674.191.198.888.1

85.685.387.791.2

Federal

Total 3

3.5

4.04.44.66.28.2

7.912.111.413.513.0

15.536.299.9

146.1163.3138.133.322.827.029.825.546.362.869.356.1

51.349.650.451.6

Nationaldefense 3 4

(5)

(5)(5)(5)(5)(5)

(5)(5)(5)(5)

3.1

5.629.494.8

143.4160.4

136.226.014.915.517.918.640.154.858.648.2

43.943.444.844.0

Other

(6)

(5)(5)(s)(')(5)(5)(5)(5)(5)

9.89.96.85.12.72.81.97.37.9

11.511.96.96.28.0

10.87.9

7.46.25.67.6

State andlocal

18.0

19.720.719.216.918.318.919.218.920.122.1

20.819.617.816.215.916.218.220.622.225.327.227.828.329.532.0

34.335.737.339.6


1.53.74.2,5.4

6.06.6M3.4

1.71.71.7.2

84.384.585.586.6

88.388.186.687.4

88.889.991.794.5

49.149.049.950.3

51.251.249.949.3

49.950.951.953.5

42.442.744.044.3

45.245.944.743.6

43.644.044.044.5

6.76.35.96.0

6.05.35.35.7

6.36.97.99.1

35.235.535.636.2

37.136.936.738.1

38.939.039.840.9

1 These estimates represent an approximate conversion of the Department of Commerce series in 1954prices. (See Tables D-4 and D 5.) This was done by major components, using the implicit price indexesconverted to a 1958 base. Although it would have been preferable to redeflate the series by minor compo-nents, this would not substantially change the results except possibly for the period of World War II, andfor the scries on change in business inventories.

For explanation of conversion of estimates in current prices to those in 1954 prices, see U. S. Income andOutput, A Supplement to the Surrey of Current Business, 1959. (The basic income and product series havebeen revised beginning 1946.)

2 For 1929-45, net exports of goods and services and net foreign investment have been equated, since foreignnet transfers by government were negligible during that period.

3 Net of Government sales, which are not shown separately in this table. See Table D-1 for Governmentsales in current prices.

* See Table D-1, footnote 4.5 Not available separately.6 Less than $50 million.7 Preliminary.* See footnote 8, Table D-1.

NOTE.—Detail will not necessarily add to totals because of rounding.Sources: Department of Commerce and Council of Economic Advisers.

141


TABLE D—3.—Gross private and government product, in current and 1958 prices, 7929-58


Period

1929..

19301931193219331934

19351936 _193719381939..

19401941194219431944

1945194619471948. . . _1949

19501951 - . . ..19521953_ . .. .1954

1955195619571958 5 _ - _ . __ .

Current prices

Totalgrossna-

tionalprod-uct

104.4

91.176.358.556.065.0

72.582.790.885.291.1

100.6125.8159.1192.5211.4

213.6210.7234.3259.4258.1

284.6329.0347.0365.4363.1

397.5419.2440.3436.7

Gross private product l

Total

100.1

86.671.654.051.359.4

66.675.583.977.683.5

92.8116.4144.0167.0179.2

178.4189.9217.6242.0238.7

263.8301.7316.0333.6330.8

363.5382.9401.7395.6

Farm 2

9.8

7.76.24.44.64.3

6.96.38.16.76.5

6.89.4

13.415.315.7

16.219.320.723.819.3

20.523.622.820.920.3

19.619.419.322.1

Non-farm

90.3

78.865.449.646.755.1

59.669.275.870.977.0

86.0107.0130.6151.7163.5

162.2170.7196.9218.2219.4

243.2278.2293.2312.7310.5

343.9363.5382.4373.5

Grossgov-ern-

mentprod-uct a

4.3

4.54.74.44.75.6

5.97.36.97.67.6

7.89.4

15.125.632.2

35.220.716.717.419.4

20.827.331.031.832.3

34.036.338.641.1

1958 prices *

Totalgrossna-

tionalprod-uct

201.0

182.0168.3143.1139.5152.9

168.3191.7202.5192.8208.8

227.0264.1299.4335.7360.0

354.1312.2311.8323.7324.0

351.6379.6393.3411.1403.2

435.4446.1451.1436.7

Gross private product 1

Total

188.3

168.7154.7129.9125.2136.4

150.8171.1183.1171.8187.6

205.2236.9259.9273.7288.3

283.8275.3283.8295.6294.5

321.0341.7352.4370.6363.3

395.6405.7410.1395.6

Farm 2

16.6

15.217.816.716.513.7

16.714.217.818.017.9

17.619.020.618.919.4

18.318.617.019.518.5

19.518.219.019.620.5

21.621.721.022.1

Non-farm

171.6

153.5137.0113.2108.7122.8

134.1156.8165.3153.9169.7

187.5218.0239.2254.8268.9

265.5256.8266.7276.1276.0

301. 5323.5333.4351.0342.8

374.0383.9389.1373.5

Grossgov-ern-

mentprod-uct'

12.7

13.413.613.314.216.4

17.620.619.421.021.2

21.827.239.662.071.7

70.336.828.128.129.5

30.537.940.940.539.8

39.840.440.941.1

1 Gross national product less compensation of general government employees, i. e., gross product accruingfrom domestic business, households, and institutions, and from the rest of the world.

2 See Survey of Current Business, October 1958, for description of series and estimates in current and con-stant prices and implicit deflators for 1910-57.

3 Includes compensation of general government employees and excludes compensation of employees ingovernment enterprises. Government enterprises are those agencies of government whose operating costsare at least to a substantial extent covered by the sale of goods and services, in contrast to the general activi-ties of government which are financed mainly by tax revenues and debt creation. Government enter-prises, in other words, conduct operations essentially commercial in character, even though they performthem under governmental auspices. The Post Office and public power systems are typical examples ofgovernment enterprises. On the other hand, State universities and public parks, where the fees and ad-missions cover only a nominal part of operating costs, are part of general government activities.

* See Table D-2, footnote 1.8 Preliminary.

NOTE.—Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement to theSurvey of Current Pusiness, 1959.



142


TABLE D-4.—Gross national product or expenditure, in 7954 prices, 7929-58l


Period

1929

19301931193219331934 . .

19351936193719381939

194019411942 . .19431944

19451946194719481949

19501951 ... _ „19521953 ..1954

1955195619571958 5

1956:First quarterSecond quarter _ _Third quarterFourth quarter. .

1957:First quarterSecond quarter, _Third quarter....Fourth quarter. .

1958:First quarterSecond quarter _ _Third quarter....Fourth quarter 5.

Totalgrossna-

tionalprod-uct

181.8

164.5153.0130.1126.6138.5

152.9173.3183.5175.1189.3

205. 8238.1266.9296.7317.9

314.0282.5282.3293.1292.7

318. 1341.8353. 5369.0363.1

392.7402.2407.0394.3

399.6400.4401.4407.1

407.9409.3409.1401.2

386. 2387.3396.1407.8


15

128.1

120.3116.6106.0103.5108.9

115.8127.7132.1129.9137.3

144.6154.3150.8154.6160.2

171.4192.3195.6199.3204.3

216.8218.5224.2235.1238. 0

256.0263.7270.3269.7

262.7262.9262.7266.6

268.5269.3272.9270.4

266.7267.4270.5274.3

be

31Q

14.9

11.810.37.87.58.6

10.713.113.811.213.3

15.317.610.99.48.6

9.819.423.324.626.3

32.129.228.533.132.4

39.637.938.134.8

1

1

65.3

62.161.856.955.258.8

62.169.271.672.876.7

80.285.687.390.094.0

101.4107.6105.3105.1106.3

109.2111.2115.0118.3119.3

125.4130.2132.7133.5

o02

48.0

46.444.641.440.841.5

42.945.346.845.947.2

49.151.152.655.257.6

60.265.367.069.671.7

75.578.280.883.786.3

91.095.699.4

101.4

Gross private domesticinvestment

30

35.0

23.615.03.94.07.4

16.121.027.015.521.6

29.036.718.810.712.3

17.042.441.549.838.5

55.957.750.450.648.9

62.563.157.846.5

.2•8

1£

20.9

15.410.96.04.65.1

6.79.4

11.310.112.2

13.615.37.84.44.8

6.617.319.922.722.3

27.426.026.027.629.7

33.932.832.331.8

llsiII1*OH

11.1

8.85.93.53.75.0

6.79.2

10.57.38.5

10.912.97.46.99.2

12.716.121.722.819.8

21.322.021.822.520.8

22.524.824.119.1

IsI!I1O

3.0

-.7-1.8-5.6-4.2-2.8

2.62.45.2

-1.81.0

4.58.63.6-.6

-1.7

-2.49.0-.14.4

-3.6

7.29.72.6.5

-1.6

6.15.61.4

-4.4

Netex-

portsof

soodsandserv-ices 2

0.2

.2-.3-.3-.8-.6

-1.9-2.2-1.6

.8

.3

1.1-.6

-2.9-6.6-6.7

-5.63.88.02.02.6

.22.21.2

-.91.0

.92.43.9.1

Governmentpurchases ofgoods andservices

3

18.5

20.521.620.519.922.8

23.026.926.028.830.1

31.147.7

100.1137.9152.2

131.243.937.242.147.2

45.163.377.784.375.3

73.272.975.078.0

3I2.9

3.43.73.95.36.9

6.710.39.6

11.411.0

13.130.784.7

123.9138.4

117.128.219.422.925.3

21.639.353.358.847.5

43.542.042.743.7

1

12

02

15.6

17.117.916.614.615.8

16.316.616.417.419.1

18.016.915.414.013.8

14.015.817.819.221.9

23.524.124.525.527.7

29.730.932.334.3

Grosspri-vateprod-uct4

171.5

153.7142.0119.4115.0125.1

138.7156.6167.8158.1172.1

188.1216.0234.8246.4259.8

257. 0252.7259.6270.3268.7

293. 3311.1320.4336.2330.8

360.4369.4373.8361.0


38.837.536.838.4

38.737.738.537.6

34.633.934.236.5

130.0130.3129.7130. 8

131. 6132.3134.4132.4

131. 5132.4134.5135.5

93.995.0C6.397.4

98.299.3

100.0100.3

100.5101.1101.8102.3

64.562.862.862.5

59.359.558.454.0

43.2742.6746.6753.6

33.232.732.732.7

32.731.932.132.5

31.630.331.733.6

24.424.624.925.1

25.224.324.022.7

19.4718.8718.8719.3

6.95.55.24.6

1.53.32.3

-1.3

-7.8-6.5-3.9

.7

0.32.52.94.0

4.65.13.72.0

.4

.3

.5-.9

72.172.373.174.0

75.575.474.174.8

75.976.978.480.8

41.641.642.342.7

43.443.442.341.8

42.343.244.045.4

30.430.730.831.3

32.131.931.833.0

33.633.834.435.4

1

i For explanation of conversion of estimates in current prices to those in 1954 prices, see U. S. Income andOutput, A Supplement to the Survey of Current Busmess, 1959. (The basic income and product series havebeen revised beginning 1946.) See Table D-5 for implicit price deflators.

3 For 1929-45, net exports of goods and services and net foreign investment have been equated, sine*1, foreignnet transfers by government were negligible during that period.

3 Net of Government sales.4 Gross national product less compensation of general government employees.5 Preliminary estimates by Council of Economic Advisers.6 Not available.7 See footnote 8, Table D-l.



H3


TABLE D-5.—Implicit price deflators for gross national product, 1929-58

[Index numbers, 1954 = 100]

Period

1929 . .

1930 .193119321933 - -1934-.

1935.1936193719381939 - .

19401941194219431944

1945.1946194719481949

19501951195219531954

1955 . . -1956195719582

1956: First quarterSecond quarterThird quarter - . .Fourth quarter


1958: First quarterSecond quarterThird quarterFourth quarter 2

Grossnational

prod-uct i

57.4

55.449.944.944.246.9

47.447.749.548.748.1

48.952.959.664.966.5

68.074.683.088 588.2

89.596.298.199.0

100.0

101.2104.2108.2110.7

102.8103.6104.8105. 7

107.0107.8108.9109.4

110.3110.8110.8111.1


Total

61.6

59.052.646.544.847.6

48.649.150.949.849.2

49.753.159.565.068.6

71.076.584.689.588.7

89.996.098 099.0

100.0

100.4102.2105.2107.7

101.0101.7102.7103.3

104.2104.9105.7106.2

107.3107.8107.8108.1

Dura-ble

goods

62.0

60.553.547.046.148.8

47.947.950.350.850.2

50.754.864.270.378.7

82.882.088.492.493.5

94.6101.1102.299.4

100.0

100.1101.3104.7105.6

99.7100.6101.9103.0

103.8104.7105.0105.3

104.8105.2105.6106.8

Non-durable

goods

57.7

54.846.940.040.345.3

47.247 A49.146.745.8

46.450.558.865.869.5

72.278.888.794.090.9

91.499.0

100.199.7

100.0

99.5100.9104.0106.4

99.7100.4101.5102.0

103.0103.6104.5104.8

106.3106.8106.2106.3

Services

66.8

64.260.355.350.750.7

50.951.953.854.554.5

54.856.859.862.865.5

67.171.176.881.783.6

85.989.893.697.7

100.0

101.7104.2107.1110. 2

103.2103. 8104.6105.2

106.1106.6107.4108.4

109.5110.1110.5111.0

Gross private domesticinvestment !

New construction

Total

41.7

40.036.531.131.233.3

34.134.839.039.139.0

40.143.447.653.056.3

57.863.776.685.984.3

88.395.398.4

100.1100.0

103.1109.0112.9114.8

106.1109.4109.8110.6

110.6113.2113.9114.2

114.7115.1114.5115.0

Resi-dential

non-farm

41.8

40.837.130.129.833.1

32.634.337.839.239.5

40.944.647.751.456.2

60.065.378.488.685.9

90.997.5

100.3101.3100.0

103.0108.1110.1111.0

106.0108.2109.0109.2

109.1110.0110.9110.7

111.1110.4110.8111.5

Other

41.6

39.736.231.731.933.4

35.435.239.939.138.4

39.142.247.654.056.3

56.962.674.883.182.6

85.193.196.598.9

100.0

103.2109.8115.5118.8

106.3110.5110.5112.0

111.9115.9116.5117.5

118.2119.5118.4118.9

Pro-ducers'durableequip-ment

52.5

50.547.945.543.145.9

45.645.448.750.249.4

50.654.058.558.459.3

60.066.776.883.187.0

89.096.897.599.0

100.0

102.6109.0115.8118.6

106.0108.1109.6112.2

114.2115.3116.3117.4

118.0118.8118.9118.9


144


TABLE D-5.—Implicit price deflators for gross national product, 1929-58—Continued

[Index numbers, 1954=100]

Period

1929

1930193119321933.1934

19351936 . _193719381939

19401941.194219431944..

1945.19461947 . .19481949

19501951195219531954

19551956 -19571958 2

1956: First quarter - .. ... ._Second quarterThird quarter . _ _Fourth quarter . . -

1957' First quarterSecond quarterThird quarterFourth quarter ... -..

1958* First quarterSecond quarter _ .Third quarterFourth quarter 2

Exports and imports ofgoods and services 1

Exports

63.1

55.043.236.235.243.0

44.746.048.946.546.9

51.256.164.968.173.3

75.380.893.498.692.7

90.3103.3103.0101.0100.0

100.7103.4106.7105.0

0)0)0)(0

(>)C1)0)(0

0)0)C1)0)

Imports

57.3

48.939.732.329.333.8

36.036.941.138.038.6

40.943.048.951.353.3

57.465.579.786.382.0

87.8102.8102.898.2

100.0

99.9101. 9102.899.0

0)C1)0)0)

(00)C1)0)

0)C1)C1)0)

Government purchases of goodsand services

Total

45.8

44.942.739.440.342.9

43.444.045.144.544.2

45.251.959.664.363.4

63.269.476.482.085.1

86.595.597.898.3

100.0

103.3108. 1114.2116.9

106.4106.6108.7110.4

112.2113.4115.4115.8

116.2116.7117.3117. 3

Federal

44.5

41.841.738.238.343.2

43.746.947.346.146.8

47.055.161.465.664.3

63.973.080.884.488.0

89.698.799.298.6

100.0

104.1108. 8115.6117.9

107.7107.0109.1111.2

113.1114.4117.4117.4

117.5117.4118.5118.5

State andlocal

46.1

45.543.039.741.142.8

43.342.243.843.442.7

43.946.249.852.754.6

57.463.071.579.381.7

83.790.294.897.5

100.0

102.2107.2112.4115.6

104.7106.2108.2109.4

110.9111.9112.8113.8

114.8115.7115.9115.9

1 Separate deflators are not available for total gross private domestic investment, change in businessinventories, and net exports of goods and services, and for exports and imports quarterly.

For explanation of conversion of estimates in current prices to those in 1954 prices, see U. S. Income andOutput, A Supplement to the Survey of Current Business, 1959. (The basic income and product series havebeen revised beginning 1946.)

2 Preliminary estimates by Council of Economic Advisers.



TABLE D-6.—Gross national product: Receipts and expenditures by major economic groups,1929-58


Period

1929

19301931193219331934

19351936193719381939

19401941 .19421943 - -1944 .

19451946194719481949

19501951195219531954 .

19551956 -19571958 * .

1956* First quarter.Second quarterThird quarterFourth quarter

1957' First quarterSecond quarterThird quarterFourth quarter

1958* First quarter.Second quarterThird quarterFourth quarter 4 _ _ _

Persons

Dis-pos-ableper-

sonalincome

83.1

74.463.848.745.752.0

58.366.271.065.770.4

76.193.0

117.5133.5146.8

150.4160.6170.1189.3189.7

207.7227.5238.7252.5256.9

274.4290.5305.1310.5

Per-sonalcon-

sump-tion ex-pendi-tures

79.0

71.061.349.346.451.9

56.362.667.364.667.6

71.981.989.7

100.5109.8

121.7147.1165.4178.3181.2

195. 0209.8219.8232.6238.0

256.9269.4284.4290.6

Per-sonal

savingor dis-saving(-)

4.2

3.42.5-.6-.6

.1

2.03.63.71.12.9

4.211.127.833.036.9

28.713.54.7

11.08.5

12.617.718.919.818.9

17.521.120.719.9

Business

Grossre-

tainedearn-ings i

11.5

8.85.22.72.64.9

6.36.57.87.88.3

10.411.514.116.317.2

15.613.118.926.627.6

27.731.533.234.335.5

42.143.245.645.0

Grossprivate

do-mesticinvest-ment

16.2

10.35.5.9

1.42.9

6.38.4

11.76.79.3

13.218.19.95.67.1

10.428.131.543.133.0

50.056.349.950.348.9

63.868.265.353.5

Excessof re-ceiptsor in-vest-ment(-)

-4.7

-1.5-.31.81.22.0

.1-1.9-4.0

1.2-1.0

-2.8-6.6

4.310.710.1

5.2-15.1-12.6-16.5-5.4

-22.3-24.8-16.6-16.0-13.4

-21.8-25.0-19.7-8.5

International

Foreignnet

trans-fers bygovern-ment 2

(2)

(2)(2)(2)(2)(2)

(2)(2)(2)(2)(2)

(2)(2)(2)(2)(2)

(2)0.3.1

1.63.2

2.82.11.51.61.4

1.51.41.51.2

Netexportsof goods

andservices 2

0.8

.7

.2-.2.2.4

-.1-.1

.11.1.9

1.51.1

-.2-2.2-2.1

-1.44.99.03.53.8

.62.41.3

-.41.0

1.12.84.91.3

Excess oftransfersor net

exports(-)

-0.87

-'.2-.2-.2-.4

.1

.1-.1

-1.1-.9

-1.5-1.1

.22.22.1

1.4-4.6-8.9-1.9-.5

2.2-.2

.22.0.4

.4-1.4-3.5-.1


283.1288.8292.1297.2

300.0305.7308.7306.8

305.0307.5314.0315.4

265.2267.2269.7275.4

279.8282.5288.3287.2

286.2288.3291.5296. 5 .

17.921.622.421.7

20.323.220.419.6

18.819.222.519.0

42.641.843.744.9

44.845.246.445.4

42.443.944.549.2

68.067.768.168.8

65.967.066.761.5

49.6M9.2553.7561.5

-25.4-25.9-24.4-23.9

-21.1-21.8-20.3-16.1

-7.2-5.3-9.2

-12.3

1.31.51.21.6

1.41.81.21.4

1.21.21.21.2

0.82.83.24.4

5.66.04.83.3

1.71.71.7.2

0.5-1.3-2.0-2.8

-4.2-4.2-3.6-1.9

-.5-.5-.51.0

See footnotes at end of table.

146


TABLE D-6.—Gross national product: Receipts and expenditures by major economic groups,1929-58—Continued


Period

1929-

1930-1931 -1932.1933_1934_

1935-1936-1937-1938-1939.

1940-1941-1942-1943-1944-

1945..1946-1947-1948-1949-

1950..1951-1952-1953-1954-

1955--.1956--.1957---1958 <__

1956: First quarterSecond quarter _Third quarter _ -Fourth quarter,.

1957: First quarterSecond quarter. _Third quarter...Fourth quarter. _

1958: First quarterSecond quarter _ _Third quarter. _-Fourth quarter4-

Tax andnontax

receipts oraccruals

11.3

10.89.58.99.3

10.5

11.412.915.415.015.4

17.725.032.649.251.2

53.251.157.159.256.4

69.385.590.694.990.0

101.4110.4116.2114.5

108.4109.3110.4113.7

116.4116.3117.3114.7

110.6111.1116.0120.2

(

Less:Transfers,interest,and sub-sidies 3

1.7

1.83.12.52.63.1

3.44.13.13.84.2

4.44.04.34.86.5

10.116.515.416.519.4

22.118.918.419.221.5

23.025.328.833. 3

24.325.325.426.3

27.329.328.730.2

31.633.534.133.8

jovernmen

Netreceipts

9.5

8.96.46.46.77.4

8.08.9

12.311.211.2

13.321.028.344.444.6

43.134.641.642.837.0

47.266.672.275.768.5

78.485.187.481.2

Seasonal!}

84.184.185.087.4

89.187.088.684.5

79.077.681.986.4

t

Purchasesof goods

andservices

8.5

9.29.28.18.09.8

10.011.811.712.813.3

14.124.859.788.696.5

82.930.528.434.540.2

39.060.576.082.875.3

75.678.885.791.2

7 adjusted a

76.877.279.581.8

85.085.785.886.9

88.389.792.194.8

Surplus ordeficit (-)on income

andproductaccount

1.0

-.3-2.8-1.7-1.4-2.4

-2.0-3.0

.6-1.6-2.1

-.7-3.8

-31.4-44.2-51.9

-39.74.1

13.38.2

-3.1

8.26.1

-3.9-7.1-6.7

2.96.31.7

-10.0

nnual rates

7.26.95.45.5

4. 11.32.8

-2.3

-9.4-12.2-10.2-8.4

Statisticaldiscrep-

ancy

0.3

-1.0.8.8.9.7

-.21.1

-.2.5

1.2

.8

.4-.8

-1.72.8

4.52.13.5-.8

.5

-.71.21.41.3.9

1.0-.9

.7-1.2

-0.2-1.3-1.5-.5

.91.5.7.7

-1.7-1.1-2.7

.9

GROSSNATIONALPRODUCT

104.4

91.176.358. 556.065.0

72.582.790.885.291.1

100.6125.8159.1192.5211.4

213.6210.7234.3259.4258.1

284.6329.0347.0365.4363.1

397.5419.2440.3436.7

410.8414.9420.5430.5

436. 3441.2445.6438.9

425.8429.0439.0453.0

1 Undistributed corporate profits, corporate inventory valuation adjustment, capital consumptionallowances, and excess of wage accruals over disbursements.

2 For 1929-45, foreign net transfers by government were negligible; therefore, for that period, net exportsof goods and services and net foreign investment have been equated.

3 Government transfer payments to persons, foreign net transfers by government, net interest paid bygovernment, and subsidies less current surplus of government enterprises.

* Preliminary; fourth quarter by Council of Economic Advisers,s See footnote 8, Table D-l.NOTE.—Series revised beginning 1946. For details, see 17. S. Income and Output, a Supplement to the

Survey of Current Business, 1959.Detail will not necessarily add to totals because of rounding.Source: Department of Commerce (except as noted).

147


TABLE D-7.—Personal consumption expenditures. 1929—58


Period

1929

19301931193219331934

19351936193719381939

1940 .1941194219431944

1945 ...1946194719481949

19501951195219531954

195519561957 -1958 4

1956' First quarterSecond quarter . .Third quarterFourth quarter


1958: First quarterSecond quarter -. ..Third quarterFourth quarter 4

Totalper-sonalcon-

sump-tionex-

pend-itures

79.0

71.061.349.346.451.9

56.362.667.364.667.6

71.981.989.7

100.5109.8

121.7147.1165.4178.3181.2

195.0209 8219.8232.6238.0

256.9269.4284.4290.6

Durable goods

To-tal

9.2

7.25.53.63.54.2

5. 16.36.95.76.7

7.89.77.06.66.8

8.115.920.622.724.6

30.429.529.132.932.4

39.638.439.936.8

%Saa03

1

s<<

3.2

2.21.6.9

1.11.4

1 Q2.32.41.62.2

2.73.4.7.8.8

1.03.96.37.49.8

13.011 611.014.013.4

18.315.617.114.0

li•sic3 3s?32

¥4.8

3.93.12.11.92.2

? 63.23.63.13.5

3.94.94.73.93.8

4.68.7

11.011.911.5

14.014 ?14.114.714.8

16.617.417.317.1

10

1.2

1.1.9.6.5.6

7.8

1.0.9

1.0

1.11.41.61.92.2

2.53.33.43.43.3

3.43 73.94.14.3

4.85.35.55.6

Nondurable goods

To-tal

37.7

34.028.922.822.326.7

29.332.835.234.035.1

37.243.251.359.365.4

73.284.893.498.79G.6

99.8110. 1115. 1118.0119.3

124.8131.4138.0142.0

*"ibe be

|l,2 o>%*<D_0

|1

£

19.5

18.014.711.410.912.2

13 615.216.415.615.7

16.719.423.727.830.6

34.140.745.848.246.4

47.453 455.856.657.7

59.262.266.469.1

x:rC

3bC

|

"o0

9.4

8.06.95.14.65.7

6 06.66.86.87.1

7.48.8

11.013.414.6

16.518.218.820.119.3

19.6?1 121.921.921.9

23.424.524.624.4

'oT3

o>.s

o

1.8

1.71.51.51.51.6

1 71.92.12.12.2

2.32.62.11.31.4

1.83.03.64.45.0

5.46 06.77.58.0

8.89.6

10.210.4

£a0

7.0

6.35.74.85.37.2

7 99.19.89.5

10.1

10.812.314.516.718.7

20.822.925.226.025.9

27.4?9 530.731.831.7

33.435.136.738.0

Services

To-tal

32.1

29.826.922.920.721.0

21.923.525.125.025.8

26.929.031.534.737.7

40.446.451.456.960.0

64.970.275.681.886.3

92.599.6

106.5111.8

be

0

11.4

11.010.39.07.97.6

7 67.98.48.89.0

9.310.010.811.311.9

12.413.815.617.619.3

21.223.225.427.529.1

30.732.835.437.1

|"c3

1O

T33J3

O

4.0

3.93.53.02.83.0

3 ?3.43.73.63.8

4.04.34.85.25.9

6.46.77.47.98.4

9.310.110.811.712.1

13.514.815.816.8

§

1

1&

2.6

2.2.9.6.5.6

7.9

2.01.92.0

2.12.42.73.43.7

4.05.15.56.06.1

6.36.97.48.07.9

8.38.69.09.2


265.2267.2269.7275 4

279.8282 5288.3287.2

286.2288.3291.5296.5

38.737.837.539 5

40.239 540.439.6

36.335.636.139.0

16.015.115.016 5

17.316 717.317.1

13.613.513.215.8

17.417.517.117 7

17.517 317.517.0

17.116.617.317.6

5.35.35.35 4

5.45 45.65.5

5.65.55.65.6

129.6130.9131.6133.4

135.5137.1140.5138.8

139.8141.4142.9144.0

61.361.962.363 5

64.666 167.867.2

68.369.369.269.8

24.124.324.6?4 8

24.8?4 325.124.4

23.924.024.824.9

9.29.59.69 P

10.210 ?10.310.2

10.310.310.510.7

35.035.235.135 ?

35.936 537.337.1

37.337.838.438.6

96.998.6

100.6102.5

104.1105.9107.4108.7

110.1111.3112.5113.5

31.832.333.133 8

34.435 135.736.3

36.636.937.237.5

14.414.714.915 1

15.315 615.816.2

16.416.717.017.2

8.58.68.58.7

8.99 09.29.0

9.19.19.29.3

I0

14.0

12.711.29.38.58.8

9 410.311.110.711.0

11.412.313.114.716.3

17.520.823.025.426.2

28.129.932.034.637.1

39.943.546.448.7

42.143.044.144.9

45.546.246.747.2

48.048.649.149.5

1 Quarterly data are estimates by Council of Economic Advisers.2 Includes standard clothing issued to military personnel.3 Includes imputed rental value of owner-occupied dwellings.* Preliminary; fourth quarter by Council of Economic Advisers.NOTE.—Series revised beginning 1946. For details, see 17. <S. Income and Output, A Supplement to the


148


TABLE D-8.—Gross private domestic investment, 1929-58


Period

1929

1930193119321933 ..1934

1935193619371938 .1939

1940 . .1941___ .19421943 - _1944

1945-. .194619471948 .__ . _ .1949

1950... ._ _ _19511952 .19531954

1955 . _19561957 .1958 s

1956:First quarter _ .Second quarter..Third quarter. ...Fourth quarter.

1957:First quarter . .Second quartet. .Third quarter. ._Fourth quarter.

1958:First quarter.Second quarter. .Third quarter ...Fourth quarter s.

Totalgross

privatedo-

mesticinvest-ment

16.2

10.35.5.9

1.42.9

6.38.4

11.76.79.3

13.218.19.95.67.1

10.428.131.543.133.0

50.056.349.950.348.9

63.868.265.353. 5

Nonfarm producers'plant and equipment

Total i

9.5

7.44.52.52.33.0

3.85.16.64.75.3

7.08.75.34.66.3

9.314.820.723.321.0

23.427.428.130.229.5

33.439.441.135.0

Equip-ment 2

5.2

4 02.61.41.52. 1

2.73.64.53.13.7

4.96.13.73.54.7

6.99.8

14.916.414.4

16.218.418.619.518.5

20.624.825.520.4

Con-struc-tions

4.2

3 41.91.0.8.9

1.11.42.11.61.6

2.02.61.61.11.5

2.35.05.86.96.6

7.29.19.5

10.711.0

12.814.615.614.6

Farm equipmentand construction

Total 4

0.9

7.4.2.2.3

.5

.7

.8

.7

.7

.81.1.9.8

1.0

1.01.83.24.14.4

4.44.84.64.54.0

4.13.84.03.9

Equip-ment

0.6

5.3.1.1.3

.4

.5

.6

.5

.5

.6

.8

.7

.6

.7

.7

.91.82.62.9

2.72.92.72.82.3

2.52.22.42.3

Con-struc-tion

0.3

2.1

(7)0

.1

.2

.2

.2

.2

.2

.3

.3

.3

.3

.3

.91.41.51.5

1.61.81.91.71.6

1.61.61.61.6

Resi-dential

con-struc-tion(non-farm)

3.6

2 11.6.6.5.6

1.01.61.92.02.7

3.03.51.7.9.8

1.14.87.5

10.19.6

14.112.512.813.815.4

18.717.717.017.8

Otherpri-vatecon-

struc-tion *

0.5

5

:\.1.1

.1

.1

.2

.2

.2

.2

.2

.1(7)

.1

.4

.5

.91.1

1.31.41.31.41.7

1.81.92.22.5

Net change inbusiness inventories

Total

1.7

— 4-1.3-2.6-1.6— 1 1

.91.02.2-.9

.4

2.24.51.8-.8

-1.0

-1.16.4-.54.7

-3.1

6.810.23.1.4

-1.6

5.85.41.0

-5.6

Non-farm 6

1.8

-1.6-2.6-1.4

2

.42.11.7

-1.0.3

1.94.0.7

-.6-.6

-.66.41.33.0

-2.2

6.09.12.11.1

-2.1

5.55.9.2

-5.8

Farm

-0.2

-.3.3

(7)-.3

— 1 3

.5-1.1

.5

.1

.1

.3

.51.2-.2-.4

-.5(7)

-1.81.7

-.9

.81.2.9

-.6.5

.3-.5

.82


68.067.768.168 8

65.967.066.761.5

49.69 49. 29 53. 79 61. 5

37.939.239.840.7

41.541.341.440.1

36.09 34. 7934.49 34. 8

23.924.525.025.9

26.325.525.624.4

20.820.120.120.4

14.014.714.814.9

15.215.815.815.7

15.214.614.314.4

3.63.63.93.9

4.04.13.93.8

3.63.93.84.2

2.02.12.32 4

2.52.52.42.2

2.02.32.22.6

1.61.61.61.6

1.61.61.61.6

1.61.61.61.6

17.817.717.617.7

17.216.516.917.6

17.116.217.920.1

1.81.91.92.0

2.12.22.22.3

2.42.42.52.5

6.95.44.94.4

1.12.92.2

-2.3

-9.5-8.0-5.0

(7)

7.46.25.34.6

.62.01.3

-3.1

-9.3-7.8-5.4-.7

-.5O

-!4-.2

.5

.9

.9

.8

-.2-.2

.4

.7

1 Items for nonfarm producers' plant and equipment are not comparable with those shown in Table D-30principally because the latter exclude equipment and construction outlays charged to current expense andalso investment by nonprofit organizations and professional persons.

2 Total producers' durable equipment less farm machinery and equipment, and farmers' purchases oftractors and business motor vehicles.

3 Industrial buildings, public utilities, gas- and oil-well drilling, warehouses, office and loft buildings,stores, restaurants, garages, miscellaneous nonresidential construction, and all other private construction.

4 Farm construction (residential and nonresidential) plus farm machinery and equipment, and fanners'purchases of tractors and business motor vehicles. (See footnote 2.)

5 Includes religious, educational, social and recreational, and hospital and institutional.6 After inventory valuation adjustment.7 Less than $50 million.8 Preliminary; fourth quarter by Council of Economic Advisers.9 See footnote 8, Table D-l.NOTE.—Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement to the


489916 0—59 11


TABLE D-9.—National income by type of income, 1929—58


Period

1929 ... .

193019311932193319341935193619371938 .1939194019411942194319441945 .194619471948 -.19491950 --195119521953 ---1954 ._ ...1955 _ _ _ . _ . .19561957 _.1958 6

1956- First quarterSecond quarter. . ..Third quarterFourth quarter

1957: First quarter .Second quarterThird quarterFourth quarter

1958: First quarterSecond quarterThird quarterFourth quarter6 .

Totalna-

tionalin-

come1

87.875.759.742.540.249.0

57.164.973.667.672.881.6

104.7137.7170.3182. 6181.2180.9198.2223.5217.7241.9279.3292.2305. 6301.8330.2349.4364.0359.6

Com-pen-

sationof em-ploy-ees 2

51.1

46.839.731.129.534. 3

37.342.947.945.048.152.164.885.3

109.6121.3123.2117.7128.8141.0140.8154.2180.3195.0208.8207.6223.9241.8254. 6253.8

Business and pro-fessional incomeand inventory

valuationadjustment

Total

8.87.45.63.43.24.65.46.57.16 87.38.4

10.913.916.818.019.021.319.922.422.723.526.026.927.427.830.430.831.431.0

In-come

ofunin-corpo-ratedenter-prises

8.6

6.75.03.13.74.65.46.67.16.67.5

8.511.514.317.018.119.123.021.422.822.224.626.326.727.627.830.631.331.731.0

In-ven-toryvalu-ationad-

just-ment

0.1.8.6.3

-.5-.1

(5)-.1

f»).2

-.2

(•)-.6-.4-.2-.1-.1

-1.7-1.5-.4

.5-1.1-.3

.2-.2(5)

2-.5-.3(5)

In-come

offarmpro-prie-tors 3

6.04.13.21.92.42.4

5.04.05.64.34.34.66.5

10.011.411.5

11.815.315.517.812.914.016.315.313.312.711.811.611.613.2

Rent-al in-come

ofper-sons

5.4

4.83.82.72.01.7

1.71.82.12.62.72.93.54.55.15.45.66.26.57.38.39.09.4

10.210.510.910.710.911.812.2

Corporate profitsand inventory

valuationadjustment

Total

10.16.61.6

-2.0-2.0

1.12.95.06.24.35.79.1

14.519.723.823.018.417.323.630.828.235.741.037.737.333.743.142.941.9

736.2

Cor-porateprofitsbeforetaxes 4

9.63.3

0

-3.0.2

1.73.15.76.23.36.4

9.317.020.924.623.319.022.629.533.026.440.642.236.738.334.144.945.543.4

736.4

In-ven-toryvalu-ationad-

just-ment

0.5

3.32.41.0

-2.1-.6-.2-.7(5)1.0-.7-.2

-2.5-1.2-.8-.3-.6

-5.3-5.9-2.2

1.9-5.0-1.2

1.0-1.0-.3

-1.7-2.6-1.57 -.2

Netin-

terest

6.46.05.85.45.04.9

4.84.74.74.64.64.54.54.33.73.33.23.13.84.24.85.56.37.18.29.1

10.411.312.613.2


342.2346.2350.8357.9361.5364.1368.7361.5350.6352.4363.1372.1

235.3240.6243.0248.1251.6254.9257.3254 8

250.9250.7255.3258.4

30.730.930.830.931.131.431.731.3

30.630.731.131.8

31.131.631.031.531.431.731.831.8

30.730.730.931.9

-0.4-.7-.2-.6-.3-.3-.1-.5

«2-.2

11.311.311.912.011.511.611.811.512.613.413.313.3

10.710.710.911.211.411.712.012.2

12.112.112.212.3

43.341.642.844.043.742.043.138.8

31.332.538.0

743.0

46.244.844.346.746.143.544.239.9

31.732.037.9

744.0

-2.8-3.2-1.5-2.7-2.4-1.5-1.1-1.1-.3

.5

.27-1.0

10.911.111.411.712.112.512.812.9

13.013.113.213.3

1 National income is the total net income earned in production. It differs from gross national productmainly in that it excludes depreciation charges and other allowances for business and institutional con-sumption of durable capital goods, and indirect business taxes. See Table D-10.

2 Wages and salaries and supplements to wages and salaries (employer contributions for social insurance;employer contributions to private pension, health, and welfare funds; compensation for injuries; directors'fees; pay of the military reserve; and a few other minor items).3 Excludes income resulting from net reductions of farm inventories and gives credit in computingincome to net additions to farm inventories during the period. Data for 1929-45 differ from those shown inTable D-64 because of revisions by the Department of Agriculture not yet incorporated into the nationalincome accounts.

4 See Table D-56 for corporate tax liability (Federal and State income and excess profits taxes) andcorporate profits after taxes.5 Less than $50 million.

6 Preliminary; fourth quarter by Council of Economic Advisers.7 Provisional.NOTE.—Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement to the


150


TABLE D-10.—Relation of gross national product and national income, 1929-58


Period

1929

19301931193219331934

19351936..193719381939

19401941194219431944

194519461947.19481949

19501951 . -195219531954

19551956195719583

1956:First quarterSecond quarter ..Third quarterFourth quarter ..

1957:First quarterSecond quarter ..Third quarterFourth quarter _.

1958:First quarterSecond quarter..Third quarter 'Fourth quarter 3_

Grossna-

tionalprod-

uct

104.4

91.176.358.556.065. 0

72.582.790.885.291.1

100.6125. 8159. 1192. 5211.4

213 6210.7234.3259.4258. 1

284.6329.0347.0365. 4363.1

397. 5419.2440. 3436. 7

Less: Capital con-sumption allowances

Total

8.6

8.58.27.67.27.1

7.27.57.77.87.8

8.19.0

10.210.912.0

12 510.713.015.517.3

19.122.024.026.528.8

32.034.737.739.6

Depre-ciation

charges

7.7

7.77.67.06.76.6

6.76.76.96.97.1

7.38.19.29.9

10.8

11.29.0

11.113.115.1

16.518.820.923. 125.2

27.930.833.735.9

I Other

0.9

.8

.6

.6

.5

.5

.6

.8

.8

.8

.7

.81.01.01.01.2

1.31.72.02.42.2

2.63.23.13.53.6

4.03.94.03.7

EqualsNetna-

tionalprod-uct

95.8

82.668 150.948 857.9

65.375.283.077.483.3

92.5116.8149.0181.6199.4

201.0200.0221.3244.0240.8

265.5307.0323.0338. 9334.3

365. 5384. 5402. 6397.1

Plus:Sub-sidiesless

currentsurplusof gov-

ern-mententer-prises

-0.1

-.1(2)(2)(2)

.3

.4(2)

.1

.2

.5

.4

.1

.2

.27

.8

-:'-.2-.2

.2

.2-.2-.4-.2

(2)1.01.3|1.5

Less:

Indirect businesstax

Total

7.0

7.26.96.87.17.8

8.28.79.29.29.4

10.011.311.812.714.1

15.517.318.620.421.6

23.725.628.130.230.2

32.935. 637.638.6

Fed-eral

1.2

1.0.9.9

1.62.2

2.22.32.42.22.3

2.63.64.04.96.2

7. 17.97.98.18.2

9.09.5

10.511.210.1

11.011.612.211.9

Stateandlocal

5.8

6.16.05.85.45.6

6.06.46.86.97.0

7.47.77.77.88.0

8.49.4

10.812.313.5

14.716. 117.619.020.1

21.824.025.426.7

Busi-ness

trans-fer

pay-ments

0. f

'.(

.6

.6

.6

.4

.5

.4

.5

.5

.5

.5

.5

.6

'.7.8

.81.01.21.41.3

1.51.51.61.6

Sta-j tisti-

caldis-

crep-ancy

0.3

hi•',2

L I— . £

L 2

.8

.4-.8

-1.72.8

4.52.13.5-.8

f,

~L21.41.3.9

1.0— .9

.7-1.2

Equals:Na-

tionalincome

87.8

75 759 742.540.249.0

57.164.973.667.672.8

81.6104.7137.7170.3182.6

181.2180. 9198.2223. 5217.7

241. 9279.3292. 2305. 6301.8

330. 2349.4364. 0359.6


410.8414.9420. 5,430.5

436.3441.2445.6438.9

425.8429.0439.0453.0

33.734.335.035.7

36.637.538.138.5

38.939.339.740.4

(4)(4)(4)(4)

(4)(4)(4)(4)

f4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(>)

377.1380.6385.5394.8

399.7403.7407.5400.4

386. 9'389.7399.3412.6

.91.01.11.2

1.41.41.3J1.2

1.61l.s!1.51.5

34.535.335.837.0

37.137.837.937.7

38.038.338.639.5

11.111.411.612.4

12. 112.512.312.0

12.011.811.711.9

23.423.924. 324. 6J

25.025.325.625.7

25.926.526.927.6

1.51.51.51.5

1.61.61.61.6

1.61.61.61.6

-.2-1.3-1.5-.5

.91.5.7.7

-1.7-1.1-2.7

.9

342.2346.2350.8357.9

361.5364.1368.7361.5

350.6352.4363.1372.1

1 Accidental damage to fixed capital and capital outlays charged to current account.2 Less than $50 million.3 Preliminary; fourth quarter by Council of Economic Advisers.4 Not available.





TABLE D—11.—Relation of national income and personal income, 1929—58


Period

1929 _

19301931 .-193219331934 ._

19351936 .-193719381939 .

19401941194219431944

19451946194719481949

19501951195219531954

1955 . -195619571958 i --



1958: First quarterSecond quarterThird quarterFourth quarter1 ...

Nationalincome

87.8

75.759.742.540.249.0

57.164.973.667.672.8

81.6104.7137.7170.3182.6

181.2180.9198.2223.5217.7

241.9279.3292.2305.6301.8

330.2349.4364.0359.6

Less:

Corpo-rate

profitsand in-

ven-toryvalu-ation

adjust-ment

10.1

6.61.6

-2.0-2.0

1.1

2.95.06.24.35.7

9.114.519.723.823.0

18.417.323.630.828.2

35.741.037.737.333.7

43.142.941.9

2 36. 2

Contri-butions

forsocialinsur-ance

0.2

.3

.3

.3

.3

.3

.3

.61.82.02.1

2.32.83.54.55.2

6.16.05.75.25.7

6.98.28.68.79.7

11.012.314.214.4

Excessof

wageac-

crualsoverdis-

burse-ments

0.22

.1

-.1

Plus:

Gov-ern-menttrans-

ferpay-

mentsto

persons

0.9

1.02.11.41.51.6

1.82.91.92.42.5

2.72.62.62.53.1

5.610.911.110.511.6

14.311.612.012.915.0

16.017.119.924.4

Netinter-

estpaidby

gov-ern-ment

1.0

1.01.11.11.21.2

1.11.11.21.21.2

1.31.31.52.12.8

3.74.54.44.54.7

4.85.05.05.25.4

5.45.76.26.2

Divi-dends

5.8

5.54.12.62.12.6

2.94.54.73.23.8

4.04.54.34.54.7

4.75.86.57.27.5

9.29.09.09.29.8

11.212.012.412.3

Busi-ness

trans-fer

pay-ments

0.6

.5

.6

.7

.7

.6

.6

.6

.6

.4

.5

.4

.5

.5

.5

.5

.5

.6

.7

.7

.8

.81.01.21.41.3

1.51.51.61.6

Equals:

Per-sonalin-

come

85.8

76.965.750.147.253.6

60.268.573.968.672.9

78.796.3

123. 5151.4165.7

171.2179.3191.6210.4208.3

228.5256.7273.1288.3289.8

310.2330.5347.9353.4


342.2346.2350.8357.9

361.5364.1368.7361.5

350.6352.4363.1372.1

43.341.642.844.0

43.742.043.138.8

31.332.538.0

243.0

11.912.112.512.7

14.014.114.314.2

14.214.214.714.6

.8

.8-1.5

16.617.017.317.6

18.419.920.021.3

22.524.625.224.9

5.55.75.85.9

6.16.26.26.2

6.36.26.26.2

11.712.012.211.8

12.512.612.712.0

12.512.412.511.8

1.51.51.5.5

.6

.6

.61.6

1.61.61.61.6

322.3328.7332.3338.1

342.3348.4351.8349.7

347.3349.8357.5359.1

1 Preliminary; fourth quarter by Council of Economic Advisers.2 Provisional.




152


TABLE D-12.—Sources of personal income, 1920—58


Period

1929

1930193119321933 -.. .1934

19351936193719381939

1940 . .194119421943 . .1944 .

194519461947.19481949 .. .

19501951.. . .195219531954 .

19551956 _. .1957_19585

1956:First quarter. .Second quarter.Third quarter _ _Fourth quarter.

1957:First quarter _ _ _Second quarter.Third quarter..Fourth quarter.

1958:First quarter. _.Second quarter.Third quarter...Fourth quarter 5.

Totalpersonalincome

85.8

76.965.750.147.253.6

60.268 573.968.672.9

78.796.3

123. 5151. 4165.7

171.2179.3191.6210.4208.3

228. 5256.7273.1288. 3289.8

310. 2330. 5347.9353. 4

Lahorincome

(wage andsalary

disburse-ments

and otherlabor

income) l

51.0

46.739.630.929.434.1

37.242.546.743.646.6

50.562.883.0

106. 7118.5

119.4113.8125. 2137.9137.4

150. 2175. 5190.2204. 1202.5

218.0235.2247.1246.2

Proprietors'income 2

Farms

6.0

4.13.21.92.42.4

5.04.05.64.34.3

4.66.5

10.011.411.5

11.815.315.517.812.9

14.016.315.313.312.7

11.811.611.613.2

Busi-ness andprofes-sional

8.8

7.45.63.43.24.6

5.46.57.16.87.3

8.410.913.916.818.0

19.021.319.922.422.7

23.526.026.927.427.8

30.430.831.431.0

Rentalincome

ofpersons

5.4

4.83.82.72.01.7

1.71.82.12.62.7

2.93.54.55.15.4

5.66.26.57.38.3

9.09.4

10.210.510.9

10.710.911.812.2

Divi-dends

5.8

5.54.12.62.12.6

2.94.54.73.23.8

4.04.54.34.54.7

4.75.86.57.27.5

9.29.09.09.29.8

11.212.012.412.3

Per-sonal

interestincome

7.4

6.96.96.66.26.1

5.95.85.95.85.8

5.85.85.85.86.2

6.97.68.28.79.4

10.311.212.113.414.6

15.817.018.819.4

Trans-fer pay-ments

1.5

1.52.72.22.12.2

2.43.52.42.83.0

3.13.13.13.03.6

6.211.411.811.312.4

15.112.613.214.316.2

17.518.621.525.9

Less:Per-sonal

contri-butions

forsocialinsur-ance

0.1

.1

.2

.2

.2

.2

.2

.2

.6

.6

.6

. 7

.81.21.82.2

2.32.02.12.22.2

2.93.43.83.94.6

5.25.76.66. 7

Non-agricul-tural

persona]income 4

77.7

70.860.946.943.649.8

53.963.267.062.867.1

72.688.0

111.5137.6151. 6

156. 8161.2172.8189.2192.1

211.3237.0254.3271. 5273.8

295. 0315. 4332.7336. (>


322.3328.7332.3338.1

342.3348.4351.8349.7

347.3349.8357. 5359. 1

229. 0234.1236.2241.2

244.2247.3249.6247.2

242.6242.4249.0250. 6

11.311.311.912.0

11.511.611.811.5

12.613.413.313.3

30.730.930.830.9

31.131.431.731.3

30.630.731.131.8

10.710.710.911.2

11.411.712.012.2

12.112.112.212.3

11.712.012.211.8

12.512.612.712.0

12.512.412.511.8

16.5 ! 18.116.9 18.517.2 18.817.6 | 19.1

18.2 : 20.018.7 21.519.0 i 21.619. 1 | 22. 9

19.3 24.219.3 i 26.219. 4 26. 819.5 I 26.5

5.65.75.75.9

6.66.66.76.6

6.76.76.96.8

307. 6313.9316.9322. 5

327.2333. 2336.3334. 6

i 331.0i 332. 8

340. 7342. 3

i

1 The total of wage and salary disbursements and other labor income differs from compensation of em-ployees in Table D-9 in that it excludes employer contributions for social insurance and excludes the excessof wage accruals over wage disbursements.

2 Excludes income resulting from net reductions of inventories and gives credit in computing incometo net additions to inventories during the period.

3 Data for 1929-45 differ from those in Table D-64 because of revisions by the Department of Agriculturenot yet incorporated into the national income accounts.

4 X on agricultural income is personal income exclusive of net income of unincorporated farm enterprises,farm wages, agricultural net interest, and net dividends paid by agricultural corporations.

s Preliminary; fourth quarter by Council of Economic Advisers.

XOTE.—Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement lo theSurvey of Current Business, 1959.



'53


TABLE D-13.—Disposition of personal income, 1929-58

Period

1929

19301931193219331934 .__

1935 - - -..193619371938. - .1939

1940 ...194119421943 --1944

1945194619471948 _ -1949

19501951 .-19521953 .. . .1954

195519561957 .-1958 a .

1956: First quarter .Second quarterThird quarterFourth quarter

1957: First quarterSecond quarter - _Third quarterFourth quarter . . . . _ . .

1958: First quarterSecond quarter. _ ._ - . ..Third quarterFourth quarter 3 .

Personalincome

Less:Personaltaxes i

Equals:Dispos-

ablepersonalincome

Less:Personal

con-sumptionexpendi-

tures

Equals:Personalsaving

Billions of dollars

85.8

76.965.750.147.253.6

60.268.573.968.672.9

78.796.3

123.5151.4165.7

171.2179.3191.6210.4208.3

228.5256. 7273.1288.3289.8

310.2330. 5347.9353. 4

2.6

2.51.91.51.51.6

1.92.32.92.92.4

2.63.36.0

17.818.9

20.918.721.521.118.7

20.829.234.435.832.9

35.740.142.743.0

83.1

74.463.848.745.752.0

58.366.271.065.770.4

76.193.0

117.5133.5146.8

150.4160.6170.1189.3189.7

207.7227.5238.7252.5256.9

274.4290.5305.1310.5

79.0

71.061.349.346.451.9

56.362.667.364.667.6

71.981.989.7

100.5109.8

121.7147.1165. 4178. 3181.2

195. 0209.8219.8232.6238.0

256. 9269.4284.4290.6

4.2

3.42.5-.6-.6

.1

2.03.63.71.12.9

4.211.127.833.036.9

28.713.54.7

11.08.5

12.617.718.919.818.9

17.521.120.719.9

Saving aspercentof dis-

posablepersonalincome

(percent)2

5.0

4.63.9

-1.3-1.4

.2

3.55.45.31.64.1

5.511.923.624.725.2

19.18.42.85.84.5

6.17.87.97.97.3

6.47.26.86.4


322.3328. 7332. 3338.1

342.3348.4351.8349.7

347.3349.8357.5359. 1

39.239.940.240.9

42.342.743.143.0

42.342.343.543.7

283.1288.8292. 1297. 2

300.0305. 7308. 7306. 8

305. 0307.5314.0315.4

265.2267. 2269. 7275.4

279.8282. 5288.3287. 2

286. 2288.3291. 5296.5

17.921.622. 421.7

20.323.220.419.6

18.819.222.519.0

6.37.57. 77.3

6.87.66.66.4

6.26.27.26.0

1 Includes also such items as fines, penalties, and donations.2 Annual percentages are based on data in millions of dollars, and may therefore differ slightly from per-

centages computed on the basis of figures shown in this table.3 Preliminary; fourth quarter by Council of Economic Advisers.




154


TABLE D-14.— Total and per capita disposable personal income and personal consumptionexpenditures, in current and 1958 prices, 1929-58

Period

1929 . .

19301931193219331934

193519361937 .19381939

19401941194219431944

19451946194719481949

19501951196219531954 _

1955195619571958 3

1956: First quarterSecond quarterThird quarterFourth quarter. __

1957: First quarterSecond quarter. __Third quarterFourth quarter. __

1958: First quarterSecond quarter. ._Third quarterFourth quarter3..

Total disposablepersonal income

(billions ofdollars)

Currentprices

83.1

74.463.848.745.752.0

58.366.271.065.770.4

76.193.0

117.5133.5146.8

150.4160.6170.1189.3189.7

207.7227.5238. 7252.5256. 9

274.4290.5305.1310 5

1958prices 1

139.9

128.5121.1102.9102.1112.0

122.5137.7142.6134.3146.5

156.9182.3208.0222.6241.0

241.3237.5219.8227.3229.9

249.3252.8259.5272.4276.2

295.7308.3313.3310.5

Per capita dis-posable personalincome (dollars)

Currentprices

682

604514389364411

458517551505538

576697871977

1,060

1, 0751,1361,1801,2911,271

1,3691,4741,5201,5821, 582

1,6611,7271,7821,784

1958prices 1

1,148

1,043975822812886

9621,0751,1061, 0331,119

1,1881,3671,5421,6281,741

1,7261,6801,5251,5501,541

1,6431, 6381,6521,7071,701

1,7901, 8331,8301,784

Total personalconsumptionexpenditures

(billions ofdollars)

Currentprices

79.0

7-1.061.349.346.451.9

56.362.667.364.667.6

71.981.989.7

100.5109.8

121.7147.1165.4178.3181.2

195.0209.8219.8232. 6238.0

256.9269.4284.4290.6

1958prices 1

132.9

122.6116.4104.2103.6111.8

118.3130.2135.1132.2140.5

148.2160.5158.8167.6180.4

195.3217.6213.7214.1219.6

234. 1233.1238.9251. 0255.9

276.9286.0292.0290.6

Per capita per-sonal consump-tion expendi-tures (dollars)

Currentprices

648

576494395369410

442488522497516

544614665735794

870,040,148,216,214

,286,359,400,457,466

.555,602,661,670

1958prices *

1,091

995937835824884

9291,0151,0481,0161,073

1,1221,2041,1771,2251,304

1,3961, 5381,4831,4601,472

1,5441,5101,5221,5721,576

1,6761,7011, 7051,670

Popu-lation(thou-

sands)2

121, 875

123, 188124, 149124, 949125, 690126, 485

127, 362128, 181128, 961129, 969131, 028

132, 122133, 402134, 860136, 739138, 397

139, 928141, 389144, 126146, 631149, 188

151, 683154, 360157, 028159, 636162, 417

165, 270168, 176171, 196174, 064


283.1288.8292.1297.2

300.0305. 7308.7306.8

305.0307.5314.0315. 4

304.7308. 5308.1311.2

312.2315.2314.7311.8

306.8306.9313.1314. 5

1,6941,7211, 7331,754

1,7631,7891,7991,780

1,7621,7701,8001,800

1,8231,8391,8281,837

1,8351,8441,8341,809

1,7731,7661,7951,795

265.2267.2269.7275.4

279.8282.5288.3287.2

286.2288.3291. 5296.5

285.5285.5284. 5288.4

291.2291.2293.9291.9

287.9287.7290.6295.6

1,5871,5921,6001,626

1,6441,6541,6801,666

1,6541,6601,6711,692

1,7081,7011,6881,703

1,7111, 7051,7131,693

1,6641,6571.6661,687

167, 158167, 828168,600169, 424

170, 151170, 839171, 612172,393

173, 054173, 705174, 460175, 253

1 Dollar estimates in current prices divided by the consumer price index on a 1958 base (using 11-monthaverage). Personal consumption expenditures in this table therefore differ from the data in Table D-2.

2 Population of the continental United States including armed forces overseas. Annual data are forJuly 1; quarterly data are for middle of period.

3 Preliminary; fourth quarter by Council of Economic Advisers.

NOTE.—Annual figures for total income and expenditures in 1958 prices and for per capita income andexpenditures in current prices are computed from data in millions of dollars.

Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement to the Survey ofCurrent Business, 1959.

Sources: Department of Commerce, Department of Labor, and Council of Economic Advisers.

'55


TABLE D-15.—Financial saving by individuals., 1939-58l


Period

1939

19401941194219431944

19451946194719481949

1950195119521953 _1954

19551956 .1957

1956:First quarterSecond quarter. _Third quarter. ..Fourth quarter.

1957:First quarterSecond quarter. .Third quarter. ..Fourth quarter .

1958:First quarterSecond quarter. .Third quarter. . -

Total

4.24

4.2310.5129.2838.6941.39

37. 3314.046.452.692.09

.9310.8712. 9510.739.19

6.9313.6216.62

5.042.253.213.12

5.522.874.863.36

4.551.205.22

Cur-rencyand

bankde-

posits2

3.04

2.934.84

10.9516.2017.57

19.0110.612.07

-1.78-1.38

3.746.007.144.935.41

3.814.875.65

-.14.44

1.622.94

.15

.722.202.58

401.145.14

Sav-ingsandloanasso-cia-tion

shares

0.04

.20

.36

.25

.55

.81

1.061.181.201.191.51

1.542.073.053.644.45

4.794.834.80

1.081.52.67

1.57

.991.62.49

1.71

1.321.82.67

Securities

Total

-0.83

-.432.64

10.3314.1415.71

9.93-1.43

2.423.122.39

.90

.433.443.39.22

6.285.166.02

2.89.88.83.56

2.431.022.16.41

.96-.77

-1.42

U.S.sav-ings

honds

0.66

.862.757.98

11.1411.80

6.85.96

2.011.601.46

.25-.47

.09

.20

.60

.26-.09

-1.91

.16-.08-.08-.10

-.58-.46-.49-.38

-.01-.19-.16

Othergov-ern-

ment3

-0.87

-.84.38

2.343.254.59

4.23-2.40-.28

.40

.20

-.07-.771.281.88

-.95

3.292.983. 93

2.35.39.30

-.06

1.87.12

1.87.08

-.28-.73

-1.80

Cor-porateand

other

-0.62

-.44-.50

.01-.26-.68

-1.16(9).69

1.12.73

.711.672.071.32.57

2.732.273.99

.37

.56

.62

.72

1.151.37.77.70

1.25.15.54

Pri-vate

insur-ancere-

serves4

1.72

1.852.142.492.853.21

3.463.423.643.753.71

3.924.064.885.045.38

5.495.645.13

1.281.341.561.46

1.221.151.521.25

1.231.151.34

Non-in-

suredpen-sion

funds

0.05

.05

.08

.12

.20

.60

.93

.30

.30

.40

.60

.901.361.511.841.93

2.082.412.68

.60

.60

.60

.60

.67

.67

.67

.67

.65

.65

.65

Gov-ern-

mentinsur-anceandpen-sionre-

serves5

1.30

1.301.862.553.924.96

5.143.553.493.572.34

1.094.244.403.242.63

3.093.493.09

.771.58.94.21

.731.44.76.15

-.25.72.19

Less: Increase indebt

Mort-gage

debts

0.50

.85

.82

.10-.38-.05

.223.604.624.724.12

7.296.596.527.309.01

11.9310.388.25

2.482.752.762.39

1.932.192.201.92

1.512.152.79

Con-sumerdebt7

0.81

1.01.69

-2.96-1.03

.14

.482.322.812.412.64

3.64.99

4.363.65.96

6.093.142.58

-.531.43.68

1.56

-.931.50.75

1.25

-1.77.31.09

Secur-ities

loans9

-0. 23

-.20-.11

.27

.581.38

1.48-2.34-.76

.43

.32

.22-.30

.60

.40

.86

.60-.75-.07

-.52-.08-.44

.28

-.34.05

-.02.24

.011. 05

-1.53

1 Individuals' saving, in addition to personal holdings, covers saving of unincorporated business, trustfunds, and nonprofit institutions in the forms specified.

2 Includes currency, demand deposits, time and savings deposits, shares and deposits in credit unions,and the postal savings system.

3 Includes armed forces leave bonds and other U. S. Government bonds (except savings bonds) and allsecurities issued by State and local governments.

4 Includes insured pension reserves.5 Includes Social Security funds, State and local retirement systems, etc.6 Mortgage debt to institutions on one- to four-family nonfarm dwellings.7 Consumer debt owed to corporations, largely attributable to purchases of automobiles and other dur

able consumer goods, although including some debt arising from purchases of consumption goods. Policyloans on Government and private life insurance have been deducted from those items of saving.

* Change in bank loans made for the purpose of purchasing or carrying securities.9 Less than $5 million.

NOTE.—In addition to the concept of saving shown above, there are other concepts of individuals'saving, with varying degrees of coverage, currently in use. The series with the most complete coverage,the personal saving estimates of the Department of Commerce, is derived as the difference between personalincome and expenditures. Conceptually, Commerce saving includes the following items not included inSecurities and Exchange Commission saving: Housing and farm and unincorporated business investmentin inventories and plant and equipment, net of depreciation and increase in debt. Government insuranceis excluded from the Commerce saving series. For a reconciliation of the two series, see Securities and Ex-change Commission Statistical Bulletin, October 1958.

Revisions for 1957-58 in the consumer credit statistics of the Board of Governors of the Federal ReserveSystem have not yet been incorporated into these estimates.


Source: Securities and Exchange Commission.

156


TABLE D-16.—Sources and uses of gross saving, 1929—58


Period

1929

19301931193219331934

19351936193719381939

19401941194219431944

194519461947 -1948 .1949

1950. _ - -1951195219531954

19551956.195719583

1956:First quarterSecond quarter __Third quarterFourth quarter..

1957:First quarterSecond quarter __Third quarterFourth quarter _ _

1958:First quarterSecond quarter _ _Third quarter ...Fourth quarter '

Gross private saving and government surplus ordeficit on income and product transactions

Total

16.7

11.94.9.3.6

2.6

6.47.2

12.17.39.0

13.918.810.55.12.3

4.530.636.845.933.0

48.555.348.347.047.6

62.470.568.054.9

Private saving

Total

15.7

12.27.72.01.95.0

8.410.111.58.9

11.2

14.622.641.949.354.2

44.326.523.637.636.1

40.349.252.254.154.4

59.664.266.364.9

Per-sonalsaving

4.2

3.42.5-.6-.6

.1

2.03.63.71.12.9

4.211.127.833.036.9

28.713.54.7

11.08.5

12.617.718.919.818.9

17.521.120.719.9

Grossbusi-ness

saving

11.5

8.85.22.72.64.9

6.36.57.87.88.3

10.411.514. 116.317.2

15.613.118.926.627.6

27.731.533.234.335.5

42.143.245.645.0

Government surplusor deficit (-)

Total

1.0

-.3-2.8-1.7-1.4-2.4

-2.0-3.0

.6-1.6-2.1

-.7-3.8

-31.4-44.2-51.9

-39.74.1

13.38.2

-3.1

8.26.1

-3.9-7.1-6.7

2.96.31.7

-10.0

Fed-eral

1.2

.3-2.1-1.5-1.3-2.9

-2.6-3.5-.2

-2.0-2.2

-1.4-5.1

-33.2-46.7-54.6

-42.32.2

12.28.0

-2.5

9.26.4

-3.9-7.4-5.8

3.86.82.9

-8.1

Stateandlocal

-0.1

-.5-.7_ 2(2)

.5

.6

.5

.7

.4

.1

. 71.31.82.52.7

2.61.91.1.3

-.6

-1.0-.3

. 1

.3-.9

-1.0-.6

-1.2-1.9

Gross investment

Total

17.0

11.05.71.11.53.3

6.28.3

11.87.8

10.2

14.719.29.73.45.0

9.032.740.445.033.5

47.856.649.748.348.5

63.469.668.853.6

Grossprivatedomes-tic in-vest-ment

16.2

10.35.5.9

1.42.9

6.38.4

11.76.79.3

13.218.19.95.67.1

10.428.131.543. 133.0

50.056.349.950.348.9

63.868.265.353.5

Net for-eign in-vest-

ment1

0.8

!2.2.2.4

-.1-.1

.11.1.9

1.51.1

-.2-2.2-2.1

-1.44.68.91.9.5

-2.2.2

-.2-2.0-.4

-.41.43.5.1

Statis-ticaldis-

crep-ancy

0.3

-1.0.8.8.9.7

-.21.1

-.2.5

1.2

.8

.4-.8

— 1. 72.8

4.52.13.5-.8

.5

1.21.41.3.9

1.0-.9

.7-1.2


67.770.371.672.0

69.269.769.662.6

51.850.957.159.8

60.563.466.266.5

65.168.466.864.9

61.263.167.068.2

17.921.622.421.7

20.323.220.419.6

18.819.222.519.0

42.641.843.744.9

44.845.246.445.4

42.443.944.549.2

7.26.95.45.5

4.11.32.8

-2.3

-9.4-12.2-10.2-8.4

7.77.35.86.5

5.52.63.4-.2

-6.6-9.9-8.6-7.2

-.5-.4-.4

-1.0

-1.4-1.3-.6

-2.1

-2.7-2.2-1.6-1.2

67.569.070.071.6

70.171.270.363.4

50.149.754.260. 5

68.067.768.168.8

65.967.066.761.5

49.649.253.761.5

— .51.32.02.8

4.24.23.61.9

.5

.5

.5-1.0

-.2-1.3-1.5-.5

.91.5

. 7

-i!i-2.7

.9

1 Net exports of goods and services less foreign net transfers by Government. For 1929-45, net foreigninvestment and net exports of goods and services have been equated, since foreign net transfers by govern-ment were negligible during that period.

2 Less than $50 million.3 Preliminary; fourth quarter by Council of Economic Advisers.




157


EMPLOYMENT AND WAGES

TABLE D-17.—Noninstitutional population and the labor force, 1929-58

Period

Old definitions: 21929

19301931 ... -. _193219331934

19351936193719381939

19401941194219431944 .

1945 -1946194719481949

19501951195219531954 _

195519561957

New definitions: 2

1947 . . _19481949. . _ .

19501951195219531954 . .

1955195619571958

Nonin-stitu-tionalpopu-

lation i

Totallaborforce

(includ-ing

armedforces) i

Armedforces i

Civilian labor force

Total

Employment 2

TotalAgri-cul-tural

Non-agri-cul-tural

Unem-ploy-

ment2

Thousands of persons 14 years of age and over

C3)

(3)(»)(3)(3)(3)

(3)(3)(3)(3)(3)

100, 380101, 520102, 610103, 660104, 630

105, 520106, 520107, 608108, 632109, 773

110, 929112, 075113, 270115, 094116,219

117, 388118, 734120, 445

107, 608108, 632109, 773

110, 929112,075113, 270115,094116, 219

117,388118, 734120, 445121,950

49, 440

50, 08050, 68051, 25051, 84052, 490

53, 14053, 74054, 32054, 95055, 600

56, 18057, 53060, 38064, 56066, 040

65, 29060, 97061, 75862, 89863, 721

64, 74965, 98366, 56067, 36267, 818

68, 89670, 38770, 761

61, 75862, 89863, 721

64, 74965, 98366, 56067, 36267, 818

68, 89670, 38770, 74471, 284

260

260260250250260

270300320340370

5401,6203,9709,020

11,410

11, 4303, 4501,5901,4561,616

1,6503,0973,5943,5473,350

3,0482,8572,797

1,5901,4561,616

1,6503, 0973,5943,5473, 350

3,0482,8572,7972,637

49, 180

49, 82050, 42051,00051, 59052, 230

52, 87053, 44054,00054, 61055, 230

55, 64055, 91056, 41055, 54054, 630

53, 86057, 52060, 16861, 44262, 105

63, 09962, 88462, 96663, 81564, 468

65, 84767, 53067, 964

60, 16861, 44262, 105

63, 0996J2, 88462, 96663, 81564, 468

65, 84867, 53067, 94668, 647

47, 630

45, 48042, 40038, 94038, 76040,890

42, 26044, 41046,30044, 22045, 750

47, 52050, 35053, 75054, 47053, 960

52, 82055, 25058, 02759, 37858, 710

59, 95761, 00561, 29362, 21361, 238

63, 19364, 97965, 272

57, 81259, 11758, 423

59, 74860, 78461, 03561, 94560,890

62, 94464, 70865,01163, 966

10, 450

10, 34010,29010, 17010,0909,900

10, 11010,0009,8209,6909,610

9,5409,1009,2509,0808,950

8,5808,3208,2667,9738,026

7,5077,0546,8056,5626,504

6,7306,5856,229

8,2567,9608,017

7,4977,0486,7926,5556,495

6,7186,5726.2225,844

37, 180

35, 14032, 11028, 77028, 67030, 990

32, 15034, 41036, 48034, 53036, 140

37, 98041, 25044, 50045, 39045, 010

44, 24046, 93049, 76151, 40550,684

52, 45053, 95154,48855, 65154, 734

56, 46458, 39459, 043

49, 55751, 15650, 406

52, 25153, 73654, 24355, 39054, 395

56, 22558, 13558, 78958, 122

1,550

4,3408,020

12,06012, 83011, 340

10, 6109,0307,700

10, 3909,480

8,1205,5602,6601,070

670

1,0402,2702,1422,0643,395

3,1421,8791,6731,6023,230

2,6542,5512,693

2,3562,3253,682

3,3512,0991,9321,8703,578

2,9042,8222,9364,681

Totallabor

force aspercentof non-institu-tionalpopu-lation

Unemploy-ment as per-cent of civil-

ian laborforce

Percent

(3)

(3)(3)(3)(3)(3)

(3)(3)(3)(3)(3)

56.056.758.862.363.1

61.957.257.457.958.0

58.458.958.858.558.4

58. 759.358.7

57.457.958.0

58.458.958.858.558.4

58.759.358.758.5

3.2

8.715.923.624.921.7

20.116.914.319.017.2

14.69.94.71.91.2

1.93.93.63.45.5

5.03.02.72.55.0

4.03.84.0

3.93.85.9

5.33.33.12.95.6

4.44.24.36.8

See footnotes at end of table.

158


TABLE D-17.—Noninstitutional population and the labor jorce^ 1929-58—Continued

Period

New definitions 2

1956: JanuaryFebruary, ._MarchApril-MayJune

JulyAugustSeptember. .OctoberNovember. .December...

1957: JanuaryFebruary. _ _MarchApril-MayJune

July...AugustSeptember ..OctoberNovember. .December ...

1958: JanuaryFebruary. _ .MarchApril..MayJune

JulyAugustSeptember _ _OctoberNovember..December. __

Nonin-stitu-tionalpopu-lation i

Totallaborforce

(includ-ing

armedforces) i

Armedforces i

Civilian labor force

Total

Employment 2

TotalAgri-cul-

tural

Non-agri-cul-tural

Unem-ploy-

ment2


118, 080118, 180118, 293118,367118, 537118,632

118, 762118,891119,047119, 198119,344119, 481

119,614119, 745119,899120, 057120, 199120,383

120, 579120, 713120, 842120, 983121, 109121, 221

121, 325121, 432121, 555121, 656121, 776121,900

121, 993122, 092122, 219122, 361122, 486122, 609

68, 69168, 39768,80669, 43470,71172, 274

72, 32571, 78770, 89670,90570,56069, 855

68,63869, 12869, 56269, 77170, 71472, 661

73, 05171,83371,04471,29970, 79070, 458

69, 37969, 80470, 15870,68171,60373, 049

73, 10472, 70371, 37571, 74371, 11270, 701

2,9162,9062,8932,8792,8652,844

2,8362,8402,8272,8232,8282,826

2,8172,8172,8162,8202,8212,819

2,8232,8392,8192,7862,7292,688

2,6472,6442,6482,6542,6382,631

2,6312,6362,6352,6322,6272, 620

65, 77565, 49165, 91366, 55567, 84669, 430

69, 48968,94768,06968, 08267, 73267, 029

65, 82166, 31166, 74666, 95167, 89369, 842

70, 22868, 99468, 22568,51368,06167, 770

66, 73267,16067, 51068, 02768, 96570, 418

70, 47370, 06768, 74069, 11168, 48568, 081

62,68462,35462, 78763, 79964,95066, 027

66, 35466, 42065, 77465, 95565, 08464,306

62, 57863,19063, 86564,26165, 17866,504

67, 22166, 38565, 67466,00564,87364, 396

62, 23861, 98862,31162,90764, 06164, 981

65, 17965, 36764,62965, 30664, 65363, 973

5,6255,4635,6626,3867,1207,859

7,6747,2377,3767,1686,1905,105

4,9355,1955,4345,7556,6597,534

7,7726,8236,5186,8375,8175,385

4,9984,8305,0725,5586,2726,900

6,7186,6216,1916,4045,6954,871

57, 05956, 89157, 12457, 41057, 83058, 166

58, 68059, 18458, 39558, 78558, 89359, 199

57,64357, 99658, 43158, 50658, 51958, 970

59, 44959, 56259, 15659, 16859, 05759, 012

57, 24057, 15857, 23957, 34957, 78958, 081

58, 46158, 74658, 43858, 90258, 95859, 102

3,0923,1363,1252,7552,8963,403

3,1342,5272,2952,1272,6482,723

3,2443,1212,8822,6902,7153,337

3,0072,6092,5522,5083,1883,374

4,4945,1735,1985, 1204,9045,437

5,2944,^994,1113,8053,8334,108

Totallabor

force aspercentof non-institu-tionalpopu-lation

Unemploy-ment as per-cent of civil-

ian laborforce

Unad-justed

Season-ally ad-justed

Percent

58.157.958.258.759.760.9

60.960.459.659.559.158.5

57.457.758.058.158.860.4

60.659.558.858.958.558.1

57.257.557.758.158.859.9

59.959.558.458. 658.157.7

4.74.84.74.14.34.9

4.53.73.43.13.94.1

4.94.74.34.04.04.8

4.33.83.73.74.75.0

6.77.77.77.57.17.7

7.56.76.05.55.66.0

4-04.14.34.14.44-4

4.4

i'o114-1

4.24-13.94.04.14-2

4.24.34.54.74.95.0

5.8ft. 77.07.57.26.8

7.57.67.27.15.96.1

1 Data for 1940-52 revised to include about 150,000 members of the armed forces who were outside thecontinental United States in 1940 and who were, therefore, not enumerated in the 1940 Census and wereexcluded from the 1940-52 estimates.

2 See Note.3 Not available.NOTE.—Civilian labor force data beginning with May 1956 are based on a 330-area sample. For January

1954-April 1956 they are based on a 230-area sample; for 1946-53 on a 68-area sample; for 1940-45 on a smallersample; and for 1929-39 on sources other than direct enumeration.

Effective January 19--7. persons on layoff with definite instructions to return to work within 30 daysof layoff and persons waiting to start new wage and salary jobs within the foltowing 30 days are classifiedas unemployed. Such persons had previously been classified as employed (with a job but not at work).The combined total of the groups changing classification has averaged about 200,000 to 300,000 a month inrecent years. The small number of persons in school during the survey week and waiting to start newjobs are classified as not in the labor force instead of employed as formerly. Persons waiting to open newimsinesses or start new farms within 30 days continue to be classified as employed. (New definitionsseries for periods prior to January 1957 are Census Bureau estimates under the old definitions adjusted byCouncil of Economic Advisers to the new definitions.)

Beginnim: July 1955, monthly data are for the calendar week containing the 12th of the month; previ-ously, for week containing the 8th. Annual data are averages of monthly figures.

For the years 1940-52, estimating procedures made use of 1940 Census data; for subsequent years, 1950Census data were used. For the effects of this change on the historical comparability of the data, seeAnnual Report on the Labor Force, 1954, Series P-50, No. 59, April 1955, p. 12.


Sources: Department of Commerce, Department of Labor (labor force, 1929-39), and Council ofEconomic Advisers.

159


TABLE D-18.—Employment and unemployment, by age and sex, 1942—58


Period

Old definitions ;i

194219431944

19451946194719481949

19501951195219531954

19551956

New definitions:1

19571958

1957: JanuaryFebruary...MarchAprilMav . ...June .

JulyAugustSeptember-OctoberNovember-December..

1958: JanuaryFebruary. __MarchAprilMay-June .

JulyAugustSeptember..OctoberNovember..December. .

Totalcivil-ian

laborforce

56, 41055, 54054, 630

53,86057, 52060,16861, 44262; 105

63, 09962, 88462, 96663, 81564, 468

65, 84767, 530

67, 94668,647

65, 82166, 31166, 74666, 95167, 89369, 842

70, 22868, 99468, 22568,51368, 06167, 770

66,73267, 16067, 51068, 02768,96570, 418

70, 47370, 06768,74069, 11168, 48568,081

Employed

Totalem-

ployed

53,75054, 47053,960

52,82055,25058, 02759, 37858, 710

59, 95761, 00561,29362, 21361, 238

63,19364, 979

65,01163, 966

62, 57863,19063, 86564, 26165, 17866, 504

67, 22166, 38565, 67466,00564, 87364, 396

62, 23861, 98862, 31162, 90764,06164, 981

65, 17965, 36764, 62965,30664, 65463, 974

14-19years

5,7706,3506,050

5,4804,5504,7174,8414,512

4,5644,6144, 5304,5144,285

4,4464,764

4,7194,512

3,8713,9734,0874,2044,4755,667

6,3325,9534,6804,6784,3384,384

3,8053,8443,8784,0164,3615,308

5,7565,7974,4164,4684,2384,252

20-44 years

Male

20,79017, 55016, 380

15, 83021, 17023,40923, 84223, 483

23, 83323, 59423, 37223, 71523, 178

23, 76824, 051

23, 99223, 374

23, 59823, 58323, 80723, 91124, 08424, 346

24, 49024,45024, 19924, 10123, 83223, 513

23, 02222, 73822, 81823, 01823,26623, 513

23, 56723,76923, 73023, 82323, 76323,467

Fe-male

9,40011, 05011, 280

11, 1409,8709,828

10, 09810,087

10, 37610, 83310, 91710, 95310, 730

11,00011, 271

11, 24711, 028

10, 79711,06611,07711, 09111, 27611, 191

11,20111,06711,41611, 76611,55011, 465

10, 89010, 77910, 87710, 94211,13110, 983

10,88710, 89111, 12511, 45011,28611,096

45 yearsand over

Male

14,16015,16015, 480

15,52015,28015, 47415, 67715, 491

15, 66616, 14416, 34516, 72516,649

16, 87817,294

17, 24717, 036

16, 84616, 95517, 10917, 21217, 40717, 480

17, 38517, 30417, 43017, 43117, 27417, 125

16, 83716, 78416, 74616, 88817, 13717, 146

17, 11917, 05817, 23617, 35117, 17216, 964

Fe-male

3,6304,3604,770

4,8504,3804,6004,9245,138

5,5175,8196,1306,3066,395

7,1017,598

7,8038,015

7,4687,6127,7867,8437,9367,820

7,8147,6137,9458,0307,8787,909

7,6827,8447,9948,0398,1678,031

7,8517,8528,1228,2148,1958,194

Unemployed

Totalunem-ployed

2,6601,070

670

1,0402,2702,1422,0643,395

3,1421,8791,6731,6023,230

2,6542,551

2,9364,681

3,2443,1212,8822,6902,7153,337

3,0072,6092,5522,5083,1883,374

4,4945,1735,1985,1204,9045,437

5,2944,6994,1113,8053,8334,109

14-19years

510290200

190290425415595

543356362312515

471510

574758

493465497461566

1,105

847553436401547512

578640603673776

1,360

1,200754695601625587

20-44 years

Male

670180140

3301,200

920757

1,329

1,119515495512

1,158

854784

9361,715

1,0781,086

947915790874

828779802809

1,0231,294

1,8392,0952,1471,9591,8121,836

1,8481,6331,3651,2651,2581,529

Fe-male

520260170

270280303353559

552419344300617

502491

566850

652566506517556606

582554555523638541

779932894937915906

886907838752745707

45 yearsand over

Male

770240110

200410396414719

697402345363684

606530

605966

731724671606563528

499479505528667768

9201,1031,1711,114

992916

930968825807874968

Fe-male

19010050

509099

127194

232190127116256

222239

254392

289280262192242225

251244251248313258

377400382436410420

428436387381330316

1 See Note, Table D-17 for explanation of differences between the old and new definitions.

NOTE.—Data are not available prior to 1942 for all the age/sex groups above.See Note, Table D-17 for information on area sample used and reporting periods.Detail will not necessarily add to totals because of rounding.


160


TABLE D—19.—Employed persons not at work, by reason for not working, and special groupsof unemployed persons, 1946-58 *


Period

1946..194719481949

195019511952 .. .19531954

1955195619571958

1957' JanuaryFebruaryMarch .AprilMayJune .. . -

July.AugustSeptemberOctoberNovemberDecember

1958' JanuaryFebruaryMarch .AprilMayJune

July..AugustSeptemberOctoberNovemberDecember

Employed persons not at work,by reason for not working

Total

2,1032,2602,4902,243

2,4402,4592, 5552,5292,688

2,6832,8883, 0173,076

1,9942,C111,9051,8222,0563,358

7,0146.0482,7772,5712,4922,161

2,2972,8212,1492,3161,9023, 305

7,3155,8932,7312,2241,9711,991

Badweather

(6)211197110

151111689673

103109139182

354?2616713914961

17254753

175257

3427082711354065

14527292044

353

Indus-trial

dispute

(6)959779

8557

1647353

61764559

122640404666

1138141341627

222754415045

315858

2063385

Vacation

662834

,044,044

,137,073,130,171,361

,268,346

1,4471,479

313342342429707

1,959

5,5774,5221,430

794524421

330353324742584

1,867

5,7814,5171,512

788602353

Illness

819847844719

718782775827776

835901962882

876999975896810783

793885857

1,3421,339

989

1,1451,2021,026

938836751

745736737821850801

Allother

reasons 2

(8)273308291

349436418362425

416456425474

442418382317344489

514535402348438467

458531474460391577

612555395389442399

Special groups of un-employed persons 3

Tempo-rary

layoff «

97123141185

92117142167221

133124150166

202149102143142137

189129148181121160

187227201207160156

176154112129153129

New wageand salary

jobs

5892

121101

116103117101127

117147110120

103938368

147251

13610599548496

61686488

188328

130175135705677

1 Data prior to 1957 are Census Bureau estimates adjusted by Council of Economic Advisers to the newdefinitions of employment and unemployment.

2 Includes persons waiting to open new businesses or start new farms within 30 days.3 Under the old definitions of employment and unemployment, these groups were included in the

"employed but not at work" category.4 Persons on layoff with definite instructions to return to work within 30 days of the layoff.5 Persons scheduled to start new wage and salary jobs within 30 days. Under the old definitions, the

"new job or business" group included these persons as well as persons waiting to open new businesses orstart new farms within 30 day? (see "all other" category in this table) and persons in school during thesurvey week and waiting to start, new jobs (these are now classified as "not in the labor force").

6 Not available.NOTE.—See Note, Table D-17 for information on area sample used and reporting periods.Detail will not necessarily add to totals because of rounding.


161


TABLE D-20.—Unemployed persons, by duration oj unemployment, 1946-58

Period

Old definitions: *

1946194719481949

19501951195219531954

19551956

New definitions: >

1957 . .1958

1957: First quarterSecond quarterThird quarter.Fourth quarter


Total un-employed

Duration of unemployment

4 weeksand under

5-14weeks

15-26weeks

Over 26weeks


2,2702,1422,0643,395

3,1421,8791,6731,6023,230

2,6542,551

2, 9364,682

3,0822,9142,7233,023

4, 9555,1544,7013,915

(2)1,0411,0871,517

1,3071,003

925910

1,303

1, 1381,214

1,4851,833

1,3821,5591,4691,530

1,9022,0241,7851,619

(2)704669

1,195

1,055574517482

1,115

815804

8901,397

1,108738781935

1,9001,3771,322

986

(2)234193427

425166148132495

367301

321785

371359245309

7991,126

683533

141164116256

3571378479

317

336232

239667

223258228248

354626911776

Averagedurationof unem-ployment(weeks)

(3)9.88.6

10.0

12.19.78.38.1

11.7

13.211.3

10.413.8

10.610.79.8

10.3

11.113. 515.315.9

1 See Note, Table D-17 for explanation of differences between the old and new definitions.2 For duration of less than 6 months, data are available only for under 3 months (1,568,000) and 3 to 6

months (564,000).3 Not available.

NOTE.—See Note, Table D-17 for information on area sample used and reporting periods.Detail will not necessarily add to totals because of rounding.Source: Department of Commerce.

l62


TABLE D-21.—Unemployment insurance programs, selected data, 1939 and 1946-58

Period

1939.

State,veteran,

andFederal

employeepro-

grams 2

188

1946 3411947 f 2801948 2821949 375

1950.1951 2111952 2151953 2221954 310

1955 2361956 2341957 27619581° 11 379

1957: January 347February 256March 219April 254May 221June 226

July 280August 196September 250October 263November 325December 466

1958: January 505February 461March 435April 457May 355June.

July 367August 302September 273October 276November " 328December10 "415

Initial claims 1

Statepro-

grams 3

Insured unem-ployment 4

All pro-grams 5

Statepro-

grams 3 6

Exhaus-tions,Statepro-

grams 3 ;

Weekly average (thousands)

188

189187210323

236208215217303

228229271372

340251214250218220

276191246259320460

497454427451349360

361298269274315405

2, 8031,8041,4652,474

1,599996

1,0641,0582,039

1,3881,3121, 560

11 2, 727

1,8501,8461,7001,5651,4241,319

1,3681,2281,2401,3141,6232,256

3,0653,3753,5053,5273,1862,847

2,7172,3742,0621,863

11 1,95711 2,300

1,086

1,2941,008

9991,973

1,497965

1,019988

1,857

,269,225,466,537

,737,730,592,475,350,251

,285,151,167,237,513

2,112

2,8773,1633,2763,3022,9842,667

2,5112,2031,9061,7221,7812,106

Stateinsuredunem-ploy-mentas per-cent ofcoveredemploy-

ment(per-

cent)3 4

4.33.13.06.2

4.62.82.92.85.2

3.43.13.56.1

4.44.34.03.63.33.0

3.12.82.83.03.65.1

6.97.67.97.97.16.3

6.05.24.54.14.35.0

Benefits paidunder State pro-

grams 3

Total(millions

of dollars)s

429.3

1,094. 9775.1789.9

1,736.0

1,373.1840.4998.2962.2

2,026. 9

1,379.21,409.31, 766. 43,475. 0

177. 6164.9168.8154.3145.7123. 5

130.1121.3113.3131.8136.6207.1

313. 0320.2370.2403.8363.6325.0

305. 6255. 4231.1210.3174.5206.0

Averageweeklycheck

(dollars) s

10.66

18.5017.8319.0320.48

20.7621.0922.7923.5824.93

25.0827.0628.2130. 55

27.7327. 8527.7227.7227.4727.44

27.5927.8728.6429.2029.4429.75

30.0930.4830.5330.8830.8030.80

30.6230. 5030.6630.4530.3330. 50

1 Most of these are instances of new unemployment.2 Data on veterans relate to those under the following programs: Servicemen's Readjustment Act

which became effective in October 1944 and expired for most veterans in July 1949, and Veterans Read-justment Assistance Act of 1952, effective October 15, 1952.

3 Beginning 1955, data include State programs and the program for Federal employees; all prior yearsare for State programs only. Beginning 1956, data also include workers added by the extension of cov-erage to smaller firms.

4 Represents the number of unemployed workers covered by unemployment insurance programs whohave completed at least one week of unemployment. Excludes territories.

5 State, veteran, Railroad Retirement, and Federal employee programs.6 State unemployment insurance programs during the period shown excluded from coverage agricultural

workers, domestic servants, workers in nonprofit organizations, unpaid family workers, the self-employed,and (in most States) workers in very small firms.

7 Represents the number of individuals who received payment for the final week of compensable unem-ployment in a benefit year. Workers who have exhausted benefit rights do not necessarily remain unem-ployed; some find employment, and others withdraw from the labor force.

8 Monthly totals are gross amounts; annual figures are adjusted for voided benefit checks.9 For total unemployment only.

1° Preliminary.11 Includes activities under the unemployment compensation program for ex-servicemen, which became

effective October 27, 1958.


163


TABLE D-22.—Number of wage and salary workers in nonagricultural establishments, 1929-58 1

[Thousands of employees]

Period

1929

193019311932 ..19331934

1935 . .1936393719381939

19401941194219431944

19451946194719481949

19501951195219531954

1955195619571958 4

1956: JanuaryFebruary. ..MarchAprilMayJune

JulyAugustSeptember ._OctoberNovember..December . _

1957: JanuaryFebruary. --MarchAprilMay .June.

July..AugustSeptember..OctoberNovemberDecember .

Totalwageand

salarywork-

ers

31, 041

29, 14326, 38323, 37723, 46625, 699

26, 79228, S0230, 71828, 90230,311

32, 05836, 22039, 77942, 10641, 534

40, 03741. 28743, 46244, 44843, 315

44, 73847, 34748, 30349, 68148, 431

50, 05651,76652, 16250, 531

Manufacturing

Total

10, 534

9,4018,0216,7977,2588,346

8,9079,653

10, 6069, 253

10, 078

10, 78012, 97415, 05117, 38117, 111

15, 30214, 46115,29015, 32114, 178

14, 96716, 10416. 33417, 23815, 995

16, 56316, 90316, 78215, 462

Du-rablegoods

(»)

(3)(3)(3)(3)(3)

(3)(3)(3)(3)

4,683

5,3376,9458,804

11,07710, 858

9,0797, 7398,3728,3127,473

8,0859,0809,340

10, 1059,122

9,5499,8359,8218,739

Non-dura-ble

goods

(3)

(3)(3)(3)(3)(3)

(••)(3)(3)(3)

5,394

5,4436,0286,2476, 3046,253

6,2226, 7226,9187,0106,705

6,8827,0246,9947, 1336,873

7,0147,0686,9616,723

Min-ing

1,078

1,000864722735874

888937

1,006882845

916947983917883

826852943982918

889916885852777

777807809721

Con-tractcon-

struc-tion

1,497

1,3721,214

970809862

91?1,1451,1121,0551,150

1,2941,7902,1701,5671,094

1,1321,6611,9822,1692, 165

2, 3332,6032, 6342,6222,593

2,7592,9292,8082,649

Trans-porta-tionand

publicutili-ties

3,907

3,6753,2432,8042,6592,736

2,7712,9563,1142,8402,912

3, 0133,2483,4333,6193,798

3,8724,0234,1224,1413, 949

3,9774, 1664, 1854,2214,009

4,0624,1614,1513,905

Trade 2

6,401

6,0645,5314,9074,9995,552

5, 6926,0766,5436,4536,612

6,9407,4167, 3337,1897,260

7,5228,6029,1969,5199, 513

9, 64510, 01210, 28110, 52710r 520

10, 84611,22111,30211, 136

Fi-nance

1,431

1,3981,3331,2701,2251,247

1,2621, 3131,3551, 3471,399

1,4361,4801,4691, 4351,409

1,4281,6191,6721.7411, 765

1,8241,8921, 9672,038?, 122

2,2192,3082,3482,375

Serv-ice 2

3,127

3,0842,9132,6822,6142,784

2,8833,0603.2333,1963, 321

3, 4773,7053,8573, 9193,934

4,0114,4744,7834,9?54,972

5, 0775,2645,4115,5385,664

5,9166,1606,3366,394

Gov-ern-

ment(Fed-eral,State,and

local)

3,066

3,1493, 2643,2253,1673,298

3,4773,6623,7493,8763,995

4,2024,6605,4836,0806,043

5,9445,5955, 4745,6505, 856

6, 0266, 3896,6096, 6456,751

6,9147,2777,6267,889

Seasonally adjusted

51,30151, 39151, 30351, 63151, 76751, 963

51, 34552, 02951,95352, 13752, 15652, 251

52, 19452, 25452, 20752, 24352, 34052, 415

52, 46452, 45752, 22452, 01551,75851,516

16, 95116, 89816, 81216, 93116, 92216, 894

16, 47116,90016, 87317,04317, 05717, 093

17, 03016, 97816, 94916, 94716, 93016, 909

16,87616, 82616, 67816, 60416, 45516, 252

9,8639,8029,7369,8399,8149,800

9, 4389, 8359,8349,978

10, 03310, 050

10, 0179,9919,9529,9409,9289,921

9,8939,8639,7269,6819, 5629,393

7,0887, 0967,0767,0927,1087,094

7,0337,0657,0397,0657,0247,043

7, 0136,9876,9977,0077,0026,988

6,9836,9636,9526,9236,8936,859

792794801814809822

759819824820814811

808807803812814823

828820814802789784

2,7682,8022,8342, 8912,9643, 079

2,9843,0072,9802,9512,9262,917

2,7982,8312, 8592,8552,8912,899

2,8472,8052,7822,7632,7102,679

4,1544,1414,1314,1444,1634,182

4,1344,1634,1704,1834,1654,175

4,1814,1614,1644, 1574,1584,159

4,1634,1794,1704,1414,1044,070

11,19711,23111, 16311,24211,21511,251

11,22711,26911,20611,24211,23811,246

11,27511,30611,25811,26511,29811,327

11,36811, 40211,34911,31511,29011,237

2,2712,2842,2882,2892,3002,307

2,3062,3292,3282, 3302,3302, 325

2,3212,3302,3292,3262,3352,342

2,3492,3592, 3662,3732,3722, 365

6, 1086, 1386, 1276,1476,1306, 160

6, 1826,1646,1716,1656,2016, 225

6,2686, 3066,2796,2846,3066, 347

6, 3956,3726,3806, 3436,3676, 382

7, 0607, 1037,1477, 1737,2647,268

7,2827,3787,4017, 4037, 4257, 459

7,5137,5357, 5667, 5977,6087,609

7,6387, 6947, 6857, 6747,6717,747

Sec footnotes at end of table.

164


TABLE D-22.—Number of wage and salary workers in nonagr{cultural establishments, 1929-58*—Continued

[Thousands of employees]

Period

1958: JanuaryFebruary. .-MarchAprilMay _ _June

JulyAugust .September--OctoberNovember 4-December 4 .

Totalwageand

salarywork-

ers

Manufacturing

TotalDu-

rablegoods

Non-dura-ble

goods

Min-ing

Con-tractcon-

struc-tion

Trans-porta-tionand

publicutili-ties

Trade 2 Fi-nance

Serv-ice 2

Gov-ern-

ment(Fed-eral,State,andlocal)

Seasonally adjusted

51, 22350,57550, 21950, 05450, 14750, 315

50, 41150, 57050, 78050, 58250, 82550. 736

15, 96515, 64815, 38915, 24315, 20215, 275

15,31215, 33015,52915, 35815, 66415, 667

9,1558,8958,7178,5668,4988,556

8,5968,6058,8018,6258,9148,940

6,8106,7536,6726,6776, 7046,719

6,7166,7256,7286,7336,7506,727

766747733723718713

709701707708708708

2,6522,4552,5732,6242,6982,698

2,6932,7112,6982,6982,6922,550

4,0453,9903,9303,8903,8773,888

3,8773,8673,8583,8873,8763,864

11,30511, 23511,11611,05011,08711, 105

11,12111,17511,15111, 15411,11011, 100

2,3682,3672,3602, 3562,3702,367

2,3632,3772,3922,3922,3892,384

6,3686,3676,3306,3526,3606,392

6,4336, 4206,4406,3996,4246,446

7,7547,7667,7887,8167,8357,877

7,9037,9898,0057,9867. 9628,017

1 Includes all full- and part-time wage and salary workers in nonagricultural establishments who workedduring, or received pay for, any part of the pay period ending nearest the 15th of the month. Excludesproprietors, self-employed persons, domestic servants, and unpaid family workers. Not comparable withestimates of nonagricultural employment of the civilian labor force (Table D-17) which include proprietors,self-employed persons, domestic servants, and unpaid family workers, which count persons as employedwhen they are not at work because of industrial disputes, bad weather, etc., and which are based on asample survey of households, whereas the estimates in this table are based on reports from employingestablishments.

2 Beginning with 1939, data are not strictly comparable with data shown for earlier years because of theshift of the automotive repair service industry from the trade to the service division.

3 Not available.4 Preliminary.



165489916 0—59


TABLE D-23.—Average weekly hours of work in selected industries, 1929-58

Period

192919301931. .19321933.1934

19351936-193719381939

19401941-..19421943.1944

1945194619471948194919501951.195219531954

195519561957 . .1958«

1957: JanuaryFebruary. ....March .AprilMayJune-JulyAugustSeptemberOctoberNovemberDecember

1958: JanuaryFebruaryMarchAprilMav .. -. .JuneJulyAugustSeptemberOctoberNovember 6 _ .December 6-._

Manufacturing

Total

44.242.140.538.338.134.636.639.238.635.637.738.140.642.944.945.243.440.440.440.139.2

40.540.740.740.539.740.740.439.839.2

40.240.240.139.839.740.039.840.039.939.539.339.438.738.438.638.338.739.239.239.639.939.839.940.2

Du-rablegoods

(3)(3)(3)32.634.833.937.341.040.035.038.039.342.145.146.646.644.140.240.640.539.541.241.641.541.340.2

41.441.140.339.540.940.940.840.540.340.540.040.340.239.839.739.738.938.639.038.839.139.639.439.840.240.140.340.7

Non-du-

rablegoods

(3)(3)(3)41.940.035.136.137.737.436.137.437.038.940.342.543.142.340.540.139.638.8

39.739.539.639.539.0

39.839.539.138.839.139.239.138.838.939.239.439.539.639.038.839.038.338.138.137.738.138.739.039.439.539.439.439.6

Bitumi-nouscoal

mining

38.4

33.528.327.229.527.026.428.827.923.527.128.131.132.936.643.4

42.341.640.738.032.6

35.035.234.134.432.6

37.637.836.633.637.538.437.437.035.837.636.336.536.936.433.535.534.033.131.730.031. 135.232.435.335.435.835.6(3)

Build-ing

con-struc-tion

(3)(3)(3)(3)(3)28.9

30.132.833.432.132.6

33.134.836.438.439.6

39.038.137.6

437.336.736.337.238.137.036.2

36.236.436.135.734.036.336.036.236.436.936.837.236.836.534.434.935.233.035.235.536.336.236.336.736.536.835.4(3)

Class Irail-

roads i

(3)(3)(3)(3)(3)fl)

(3)(3)(3)(3)43.744.345.847.048.748.948.546.046.446.243.740.841.040.640.640.841.941.741.741.642.542.240.942.042.441.042.642.341.142.240.940.841.641.540.141.441.241.342.541.242.242.6(3)(3)

Tele-phone 2

(3)

(3)(3)(3)(3)(3)

(3)(3)38.838.939.139.540.140.541.942.3

541.739.437.439.238.538.939.138.538.738.9

39.639.539.038.4

38.739.038.738.739.039.239.538.938.839.240.038.638.038.237.837.737.838.238.538.639.039.039.6(3)

Whole-sale

trade

(3)(3)(3)(3)(3)(3)41.342.642.8

* 42. 241.741.241.041.342.242.9

42.741.541.040.940.740.740.740.640.540.4

40.640.440.240.140.240.240.140.040.140.340.440.440.440.240.040.440.139.839.939.640.040.140.340.240.340.340.1(3)

Retailtrade

(excepteatingand

drink-ing

places)

(3)(3)(3)(3)(3)(3)(3)(3)(3)(3)42.742.542.141.140.340.440.340.740.340.340.440.540.239.939.239.139.038.638.138.038.238.138.037.938.038.238.638.638.137.637.538.337.837.837.837.837.838.238.738.738.037.937.8(3)

Laun-dries

(3)(3)(3)(3)(3)39.441.042.742.641.641.841.842.142.242.942.942.842.942.641.941.541.241.141.140.540.140.340.339.739.339.839.839.940.040.340.439.839.439.639.439.039.539.038.639.039.239.639.839.739.339.339.438.9(3)

1 Averages are based upon monthly data (exclusive of switching and terminal companies) summarizedin the M-300 report by the ICC and relate to all employees who received pay during the month, exceptexecutives, officials, and staff assistants (ICC Group I). Beginning September 1949, data reflect a reduc-tion in the basic workweek from 48 to 40 hours.2 Prior to April 1945, data relate to all employees except executives: from April 1945 to May 1949, mainlyto employees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory em-ployees only.3 Not available.4 Data beginning with January of year noted are not comparable with those for earlier periods.5 Nine-month average, April through December, because of new series started in April 1945.6 Preliminary.

NOTE.—Data are for production workers in manufacturing and mining, construction workers in buildingconstruction, and for nonsupervisory employees in other industries (except as noted). Data are for payrollperiods ending nearest the 15th of the month.

The annual figures for 1958 are simple arithmetic averages of the monthly figures shown and are notstrictly comparable with the averages for earlier years, which have been weighted by data on employment.


166


TABLE D- 24.—Average gross hourly earnings in selected industries, 1929-58

Period

1929. _ .

19301931 .1932. . .19331934...1935193619371938. . .1939

19401941 .194219431944

194519461947-..19481949 ..

1950. - .19511952 ..19531954

1955.-.195619571958 7 .

1957: JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

1958: JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovember 7 _ _ _December * _ _ _

Manufacturing

Total

$0. 566.552.515.446.442.532

.550

.556

.624

.627

.633

.661

.729

.853

.9611.019

.023

.086

.237

.350

.401

.465

.59

.67

.77

.81

.88

.982.072.13

2.052.052.052.062.062.072.072.072.082.092.112.102.112.102.112.112.122.122.132.132.142.142.172.19

Dura-ble

goods

(4)(<)(4)

$0. 497.472.556

.577

.586

.674

.686

.698

.724

.808

.9471.0591.1171.111.156.292.410.469

.537

.67

.77

.87

.92

2.012.102.202.28

2.182.172.182.182.182.192.202.212.222.232.242.242.242.242.252.252.262.272.282.292.302.292.332.35

Non-dura-ble

goods

(4)(4)(4)

$0. 420.427.515

.530

.529

.577

.584

.582

.602

.640

.723

.803

.861

.9041.0151.1711.2781.325

1.3781.481.541.611.66

1.711.801.881.94

1.861.861.871.871.881.891.891.881.901.901.911.921.921.921.931.941.941.941.941.931.951.951.961.97

Bitu-minous

coalmining

$0. 681.684.647.520.501.673.745.794.856.878.886

.883

.9931. 0591.1391.186

.240

.401

.636

.898

.941

2.0102.212.292.482.482.562.813.023.02

2.952.932.933.023.013.053.093.043.063.043.053.043.043.043.043.023.003.023.023.003.013.013.03

(4)

Build-ingcon-

struc-tion

(4)(4)(4)(4)(4)

$0. 795.815.824.903.908.932

.958

.010

.148

.252

.319

.379

.4781.681

51.8481.9352.0312.192.312.482.602.662.802.963.09

2.912.922.902.912.932.94

2.952.973.023.023.033.053.073.083.063.063.063.063.093.093.133.133.13

(4)

Class Irail-

roads i

(4)(4)(4)(4)(4)(4)(4)(4)(4)(4)

$0. 730.733.743.837.852.948

.9551.0871.1861.3011.4271.5721.731.831.881.931.962.122.262.43

2.192.242.202.212.232.272.242.262.282.252.402.402.382.442.402.392.432.452.432.452.452.43

(4)(4)

Tele-phone2

(4)(4)(4)(4)(4)(4)(4)(4)

$0. 774.816.822

.827

.820

.843

.870

.9116.9621.1241.1971.2481.345

1. 3981.491.591. 681.761.821.861.952.05

.91

.92

.92

.93

.94

.95

.94

.94

.95

.97

.982.012.012.012.022.032. C42.052.062.072.082.092.08

(4)

Whole-sale

trade

(4)(4)f 4)(4)(4)(4)

$0. 648.667.698

5. 700.715

.739

.793

.860

.933

.985

1.0291.150.268.359.414

.483

.58

.671.771.83

1.902.012.102.172.062.062.072.072.092.112.112.112.132.132.142.142.132. 152.152.152.162.182.192. 182.202.182.19(4)

Retailtrade

(excepteatingand

drinkingplaces)

(4)(4)(4)(4)(4)(4)(4)(4)(4)(4)

$0. 542.553.580.626.679.731.783.893

1.0091.0881. 1371.1761.261.321.401.451.501.571.641.701.611.611.611.621.641.661.671.661.671.671.661.631.681.681.671.681.691.701.711.711.711.711.71(4)

Laun-dries

(4)(4)(4)(4)(4)

$0. 378.376.378.395.414.422.429.444.482.538.605.648.704.767.817.843.861.92.94.98

1.001.011.051.091.131.071.071.071.081.091.091.091.101.111.111.111.111.121.121.121.131.131.141.141.141.141.141.14(4)

Agri-cul-ture 3

$0. 241.226. 172.129.115.129.142.152.172.166.166.169.206.268.353.423.472.515.547.580.559.561.625.661.672.661.675.705.728.757.785

.643

.717

.757

.804

.657

.728

""."795

1 Averages are based upon monthly data (exclusive of switching and terminal companies) summarized inthe M-300 report by the ICC and relate to all employees who received pay during the month, except execu-tives, officials, and staff assistants (ICC group I). Beginning September 1949, data reflect a wage rateincrease and reduction in basic workweek from 48 to 40 hours.

2 Prior to April 1945, data relate to all employees except executives; from April 1945 to May 1949, mainly toemployees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employeesonly.

Weighted average of all farm wage rates on a per hour basis.Not available.Data beginning with January of year noted are not comparable with those for earlier periods.Nine-month average, April through December, because of new series started in April 1945.Preliminary.

NOTE.—Data are for production workers in manufacturing and mining, construction workers in buildingconstruction, and for all nonsupervisory employees in other industries (except as noted). Data are for pay-roll periods ending nearest the 15th of the month.

The annual figures for 1958 are simple arithmetic averages of the monthly figures shown and are notstrictly comparable with the averages for earlier years, which have been weighted by data on man-hours.

Sources: Department of Labor and Department of Agriculture.

167


TABLE D-25.—Average gross weekly earnings in selected industries, 1929-58

Period

1929

1930193119321933193419351936193719381939194019411942194319441945194619471948194919501951 .19521953. -19541955195619571958 •1957: January

FebruaryMarchApril...MayJuneJulyAugustSeptemberOctoberNovemberDecember

1958: JanuaryFebruaryMarchAprilMay ..JuneJuly...AugustSeptemberOctoberNovember 6...December 6 _ _ .

Manufacturing

Total

$25. 03

23.2520.8717.0516.7318.4020.1321.7824.0522.3023.8625.2029. 5836.6543.1446.0844.3943.8249.9754. 1454.9259. 3364.7167.9771.6971.8676.5?79.9982.3983.5082.4182.4182.2181.9981.7882.8082.3982.8082.9982.5682.9282.7481.6680.6481.4580.8182.0483.10

83.5084.3585.3985.1786.5888.04

Dura-ble

goods

$27. 22

24.7721.2816.2116.4318.8721.5224.0426.9124.0126. 5028.4434.0442.7349.3052.0749.0546.4952.4657.1158.0363.3269.4773.4677.2377.1883.2186.3188.6690.0689.1688.7588.9488.2987.8588.7088.0089.0689. 2488.7588.9388.9387.1486.4687.7587.3088.3789.8989.8391.1492.4691.8393.9095.65

Non-durablegoods

$22. 93

21.8420.5017.5716.8918.0519.1119.9421.5321.0521.78

22.2724.9229.1334.1237.12

38.2941.1446.9650.6151.41

54.7158.4660.9863.6064.7468.0671.1073.5175.2772.7372.9173.1272.5673.1374.0974.4774.2675.2474.1074.1174.8873.5473.1573.5373.1473.9175. 08

75.6676.0477.0376.8377.2278.01

Bitumi-nouscoal

mining

$25. 72

22.2117.6913.9114.4718.1019.5822.7123.8420.8023.8824.7130.8635.0241.6251.2752.2558.0366.5972.1263.2870. 3577.7978.0985.3180.8596.26

106. 22110. 53101.47110. 63112.51109. 58111.74107. 76114.68112.17110.96112.91110.66102. 18107. 92103. 36100. 6296.3790.6093.30

106. 3097.85

105.90106. 55107. 76107. 87

(3)

Build-ingcon-

struc-tion

(3)

(3)(3)(3)(3)

$22. 9724.5127.0130.1429.1930.3931.7035. 1441.8048.1352.18

53.7356.2463.30

< 68. 8570.9573.7381.4788.0191.7694.1296.29

101. 92106. 86110.3198.94

106. 00104. 40105. 34106. 65108. 49108. 56110. 48111.14110.23104. 23106. 45108. 06101.64107. 71108. 63111.08110. 77112. 17113.40114. 25115.18110.80

(3)

Class Irail-

roads i

(3)

(3)(3)(3)(3)(3)(3)(3)(3)(3)

$31. 9032.4734.0339.3441.4946.3646.3250.0055.0360.1162.3664.1470.9374.3076. 3378.7482.1288.4094.24

101. 0993.0894.5389.9892.8294.5593.0795.4295.6093.7194.9598.1697.9299.01

101. 2696.2498.95

100.12101. 19103. 28100. 94103. 39103. 52

(3)(3)

Tele-phone 2

(3)(3)(3)(3)(3)(3)(3)(3)

$30. 0331.7432.1432.6732.8834.1436.4538.54

s 40. 1244.2944. 7748.9251.7854. 3858.2661.2265. 0268.4672.0773.4776.0578.7273.9274.8874.3074.6975.6676.4476.6375.4775.6677.2279.2077.5976.3876.7876.3676.5377.1178.3179.3179.9081.1281.5182.37(3)

Whole-sale

trade

(»)(3)(8)

$27. 7226.1126.3726.7628.4129.87

* 29. 5429.8230.4532.5135. 5239. 3742.2643.9447.7351.9955.5857. 5560.3664.3167.8071.6973.9377.1481.2084.4287.0282.8182.8183.0182.8083.8185.0385.2485.2486.0585.6385.6086.4685.4185.5785.7985.1486.4087.4288.2687.6488.6687. 8587.82(3)

Retailtrade

(excepteating

anddrink-

ingplaces)

(3)(3)(3)(3)(3)(3)(3)(3)(3)(3)

$23. 1423.5024.4225.7327.3629. 5331.5536.3540.6643.8545.9347.6350.6552.6754.8856.7058.5060.6062.4864.6061.5061.3461.1861.4062.3263.4164.4664.0863.6362.7962.2562.4363.5063.5063.1363.5063.8864.9466.1866.1864.9864.8164.64(3)

Laun-dries

(3)(3)(3)(3)(3)

$14. 8915.4216.1416.8317.2217.6417.9318.6920.3423.0825.9527.7330.2032.7134.2334.9835.4737.8138.6339.6940.1040.7042.3243.2744.4142.5942.5942.6943.2043.9344.0443.3843.3443.9643.7343.2943.8543.6843.2343.6844.3044. 7545.3745.2644.8044.8044.9244.35(»)

1 Averages are based upon monthly data (exclusive of switching and terminal companies) summarized inthe M-300 report by the ICC and relate to all employees who received pay during the month, except execu-tives, officials, and staff assistants (ICC group I). Beginning September 1949, data reflect a wage rateincrease and reduction in the basic workweek from 48 to 40 hours.

2 Prior to April 1945, data relate to all employees except executives; from April 1945 to May 1949, mainly toemployees subject to the Fair Labor Standards Act; and beginning June 1949, to nonsupervisory employeesonly.

3 Not available.4 Data beginning with January of year noted are not comparable with those for earlier periods.5 Nine-month average, April through Dec " * " ' "9 Preliminary.

i December, because of new series started in April 1945.

NOTE.—Data are for production workers in manufacturing and mining, construction workers in buildingconstruction, and for nonsupervisory employees in other industries (except as noted). Data are for pay-roll periods ending nearest the 15th of the month.



168


TABLE D-26.—Average weekly hours and hourly earnings, gross and excluding overtime, inmanufacturing industries, 1939-58

Period

1939

194019411942... _19431944

19451946194719481949

195019511952..19531954

19551956195719583

1957: JanuaryFebruaryMarchAprilMay ...June

JulyAugustSeptemberOctober.. _NovemberDecember

1958: JanuaryFebruaryMarch. .AprilMayJune

JulyAugust .SeptemberOctoberNovember 3

December 3

All manufacturingindustries

Averageweeklyhours

Gross

37.7

38.140.642.944.945.2

43.440.440.440.139.2

40.540.740.740.539.7

40.740.439.839.2

40.240.240.139.839.740.0

39.840.039.939.539.339.4

38.738.438.638.338.739.2

39.239.639 939.839.940.2

Ex-clud-ing

over-time

0)

0)0)0)0)0)

0)0)0)0)0)

0)0)0)0)0)

0)37.637.437.2

37.637.737.637.537.537.6

37.437.637.437.237.037.4

37.036.837.036.837. Oj37.3

37.337.337.537.437.4;

37.5J

Averagehourly

earnings

Gross

$0. 633

.661

.729

.853

.9611.019

.023

.086

.237

.350

.401

.465

.59

.67

.77

.81

1.881.982.072.13

2.052.052.052.062.062.07

2.072.072.082.092.112.10

2.112.102.112.112.122.12

2.132.132.142.142.172.19

Ex-clud-ing

over-time

0)

0)$0. 702

.805

.894

.947

2.9631.0511.1981.3101.367

.415

.53

.61

.71

.76

.82

.912.012.07

1.981.991.992.002.002.01

2.012.012.022.032.052.05

2.062.062.072.072.072.07

2.082.072.082.082.110)

Durable goods manufac-turing industries

Averageweeklyhours

Gross

38.0

39.342.145.146.646.6

44.140.240.640.539.5

41.241.641.541.340.2

41.441.140.339.5

40.940.940.840.540.340.5

40.040.340.239.839.739.7

38.938.639.038.839.139.6

39.439.840.240.140.340.7

Ex-clud-ing

over-time

0)

0)0)0)0)0)

0)0)0)0)0)

0)0)0)0)(0

0)38.137.937.6

38.038.238.238.138.138.1

37.738.037.737.537.537.8

37.337.137.537.437.637.9

37.637.737.937.737.838.0

Averagehourly

earnings

Gross

$0. 698

.724

.808

.9471.0591.117

1.1111.1561.2921.4101.469

1. 5371.671.771.871.92

2.012.102.202.28

2.182.172.182.182.182.19

2.202.212.222.232.242.24

2.242.242.252.252.262.27

2.282.292.302.292.332.35

Ex-clud-ing

over-time

0)

0)$0. 770

.881

.9761.029

21.0421.1221.2501.3661.434

1.4801.601.701.801.86

1.932.032.142.22

2.102.112.112.122.122.13

2.142.142.162.172.182.19

2.202.202.212.212.212.22

2.232.232.242.232.260)

Nondurable goods manu-facturing industries

Averageweeklyhours

Gross

37.4

37.038.940.342.543.1

42.340.540.139.638.8

39.739.539.639.539.0

39.839.539.138.8

39.139.239.138.838.939.2

39.439.539.639.038.839.0

38.338.138.137.738.138.7

39.039.439.539.439.439.6

Ex-clud-ing

over-time

0)

0)0)0)0)0)

0)0)0)0)0)

(0(00)0)0)

0)37.036.736.6

36.836.936.836.636.736.8

36.937.037.036.636.436.8

36.436.236.236.036.236.6

36.837.036.936.936.937.0

Averagehourly

earnings

Gross

$0. 582

.602

.640

.723

.803

.861

.9041.0151.1711.2781.325

1.3781.481.541.611.66

1.711.801.881.94

1.861.861.871.871.881.89

1.891.881.901.901.911.92

1.921.921.931.941.941.94

1.941.931.951.951.961.97

Ex-clud-ing

over-time

0)

0)$0. 625

.698

.763

.814

2.858.981

1.1331.2411.292

.337

.43

.49

.56

.61

.66

.75

.83

.89

.81

.81

.81

.82

.83

.83

.83

.82

.83

.84

.86

.86

.88

.87

.88

.89

.89

.89

.89

.88

.89

.89

.900)

1 Not available.2 Eleven-month average; August 1945 excluded because of VJ Day holiday period.3 Preliminary.NOTE.—Data relate to production workers and are for payroll periods ending nearest the 15th of the

month.The annual figures for 1958 are simple arithmetic averages of the monthly figures shown and are not

strictly comparable with the averages for earlier years, which have been weighted by data on employment(in the case of hours) and man-hours (in the case of earnings).


169


TABLE D-27.—Average weekly earnings, gross and net spendable, in manufacturing industries,in current and 7958 prices, 1939-58

Period

1939-.

19401941194219431944

19451946194719481949 .

19501951. _ -195219531954

1955..- .195619571958 3

1957: JanuaryFebruaryMarch.. ... _ _ _ _ _AprilMayJune

JulyAugustSeptember.OctoberNovember .__December .

1958: January .FebruaryMarchApril. .M a y _ _ _June. .

JulyAugustSeptemberOctoberNovember 3

December 3

Average gross weeklyearnings

Currentprices

$23. 86

25.2029.5836.6543.1446.08

44.3943.8249.9754.1454.92

59.3364.7167.9771.6971.86

76.5279.9982 3983.50

82.4182.4182.2181.9981.7882.80

82.3982.8082.9982.5682.9282.74

81.6680.6481.4580.8182.0483.10

83.5084.3585.3985. 1786.5888.04

1958prices 1

$49.60

51.9658.0064.8771.9075.67

71.2564.8264.5664.9966.57

71.2271.9073.8877 3477.27

82.4684.9284.5983.50

86.0285.6785.2884.7984.4085.01

84.1684.4084.6084.1684.1884.00

82.4081.2181.5380.7381.8882.93

83.1784.1885. 2285.0086.24

(4)

Average net spendable weekly earnings 2

Worker with nodependents

Currentprices

$23.58

24.6928.0531.7736.0138.29

36.9737.7242.7647.4348.09

51.0954.0455.6658.5459.55

63.1565.8667.5768.46

67.5867.5867.4267.2567.0867.90

67.5767.9068.0567.7067.9967.85

66.9866.1766.8166.3067.2968.14

68.4669.1469.9769.8070.9372.10

1958prices 1

$49. 02

50.9155.0056.2360.0262.87

59.3455.8055.2556.9458.29

61.3360.0460.5063.1564.03

68.0569.9269.3768.46

70.5470.2569.9469.5469.2369.71

69.0269.2269.3769.0169.0368.88

67.5966.6466.8866.2367.1668.00

68.1969.0069.8369.6670.65

(4)

Worker with threedependents

Currentprices

$23.62

24.9529.2836.2841.3944.06

42.7443.2048.2453.1753.83

57.2161.2863.6266.5866.78

70.4573.2274.9775.88

74.9974.9974.8274.6474.4775.31

74.9775.3175.4675.1175.4075.26

74.3773.5474.2073.6774.6875.55

75.8876.5877.4377.2578.4179.60

1958prices 1

$49.11

51.4457.4164.2168.9872.35

68.6063.9162.3363.8365.25

68.6868.0969.1571.8271.81

75.9277.7376.9775.88

78.2877.9577.6177.1976. 8577.32

76.5876.7776.9276.5676.5576.41

75.0574.0674.2773.6074.5375.40

75.5876.4377.2877. 1078.10

(4)

1 Estimates in current prices divided by the consumer price index on a 1958 base (using 11-month average).- Average gross weekly earnings less social security and income taxes.3 Preliminary.4 Not available.

NOTE.—Data relate to production workers and are for payroll periods ending nearest the 15th of themonth.



170


TABLE D-28.—Labor turnover rates in manufacturing industries, 7930-58

[Rates per 100 employees]

Period

Separation rates

Total Quit i LayoffDischarge,military,and mis-

cellaneous i

Accessionrates

19301931193219331934

19351936.193719381939

19401941...194219431944...

194519461947...1948...1949

19501951195219531954

19551956195719582

1957: JanuaryFebruaryMarchAprilMayJune

JulyAugustSeptember...OctoberNovember. _ .December


JulyAugustSeptember...OctoberNovembers..

5.04.04.43.84.1

3.63.44.44.13.1

3.43.96.57.36.8

6.14.84.64.3

3.54.44.14.33.5

3.33.53.63.6

3.33.03.33.33.43.0

3.14.04.44.04.03.8

5.03.94.24.13.62.9

3.23.53.53.22.7

.91.11.3.6

.92.03.85.25.1

5.14.33.42.81.5

1.92.42.32.31.1

1.61.61.4

1.31.21.31.31.41.3

1.41.92.21.3

1.21.51.1

3.02.93.52.73.0

2.52.13.03.42.2

2.21.31.1.6.6

2.31.21.01.32.4

1.11.21.11.31.9

1.21.51.72.4

1.51.41.41.51.51.1

1.31.61.82.32.72.7

3.82.93.23.02.41.8

2.01.91.61.71.6

.2

.2

.2

.2

.2

.2

.2

.1

.1

.3

.71.71.51.1

.9

.6

.5

.5

.3

3.13.13.35.44.7

4.24.43.63.84.1

4.45.47.67.56.1

6.36.75.14.43.5

4.44.44.43.93.0

3.73.42.93.1

3.22.82.82.83.03.9

3.23.23.32.92.21.7

2.52.22.42.53.03.8

3.33.94.03.42.7

1 Prior to 1940, military and miscellaneous separations are included with quits.2 January-November average.3 Preliminary.NOTE.—Detail will not necessarily add to total because of rounding.


171


PRODUCTION AND BUSINESS ACTIVITY

TABLE D-29.—Industrial production indexes, 1929-58

[1947-49=100]

Period

192919301931193219331934193519361937193819391940194119421943194419451946194719481949195019511952195319541955195619571958 i

1957: JanuaryFebruary ..MarchAprilMay „ .June

JulyAugustSeptemberOctoberNovemberDecember

1958' JanuaryFebruary ..MarchAprilMayJune. ... _ .

JulyAugustSeptemberOctoberNovemberDecember '

Industrial production

Total

59494031374047566148586787

10612712510790

10010497

112120124134125139143143134

Manufactures

Total

58483930363946556046576688

11013313011090

10010397

113121125136127140144145136

Durable

Total

60453119243038495535496391

12616215912386

10110495

116128136153137155159160142

Pri-marymet-als

10310790

115126116132108140138131104

Fabri-catedmetalprod-ucts

10310493

115122121136123134135139128

Non-elec-tricalma-chin-ery

10410690

105126136143125135153150128

Elec-tricalma-chin-ery

10110198

131138167194177194207204179

Trans-porta-tion

equip-ment

96102102120135154189175203199213188

Instru-mentsand re-latedprod-ucts

10010595

114128142155140149166172164

Clay,glass,andlum-ber

prod-ucts

10010595

115121118125123138140133129

Fur-niture

andmiscel-lane-ous

man-ufac-tures

10010495

117116118131121132135132127

Seasonally adjusted

145146145144144145

145145144142139135

133130128126128132

134136137138141142

147147147145145147

147147146143141137

135131129128130134

136138139140144144

163164163160160163

162163160156154146

142137135131134139

141144145146152152

143143137134132132

134136131128121107

10095918691

103

102109113122123123

137138138138138139

141140139137141135

129124122118120125

129132135133136137

154155155152152153

152151150148143137

130127126122122125

125126129130133133

206206204196199207

215215209197203194

192177170166167171

181188186180182189

218222219216216220

216216212208203194

191185183178182185

185186178183205203

173174173172173173

173174173170170168

166163160159158160

162162166169172175

133134134134136140

133136134131128124

125120120120124129

134135136133138137

131129132132132133

133135135132129125

123120121121122126

129130132134134132


172


TABLE D-29.—Industrial production indexes, 1929-58—Continued

[1947-49=100]

Period

1929

19301931193219331934

19351936193719381939

1940194119421943 _.1944

19451946194719481949

19501951 _. ...195219531954

1955195619571958 '

1957: JanuaryFebruaryMarchAprilMay.Tune

July.August -_.-SeptemberOctober .NovemberDecember

1958: January ...FebruaryMarchApril._May _ .June

JulyAugustSeptemberOctoberNovember _.December '

._Industrial production j

Manufactures

Nondurable

Total

56

5148424849

5561645766

69849310399

96959910299

111114114118116

126129130130

Tex-tilesandap-parel

9910397

110106105107100

109108105104

Rub-berand

leatherprod-ucts

10610193

110105107113104

122117118113

Paperandprint-ing

96103101

114118118125125

137145148148

Chem-icalandpetro-leumprod-ucts

97103100

118132133142142

159167172170

Foods,bever-ages,and to-bacco

101100100

103105106107106

109112112115

Min-erals

68

5951424851

5563716268

7681848793

929110010694

105115114116111

122129128117

Output of consumer durables

Total

98102101

133114105127116

147131130113

Autos

8593122

159127103146131

190138146101

Majorhouse-holdgoods

9910596

143118115132122

144144132(2)

Othercon-sumerdura-bles

10910586

95969510295

106111111110

Seasonally adjusted

130131131130131131

131132131130128127

127125124125126129

132133133134135136

105105106106106106

10710610610410197

9797959899102

107108109110112112

118121124118118119

119122120117116108

108105106102104111

114116119119125125

148147147146148148

146149149149149146

146144142143143146

148150150153152153

173172171171173172

174175174173171169

168164163164165168

171174174175176178

111113114111112113

113112113111110113

114114113113114116

116116116116116116

131132132131130127

128129129127123123

121118112109109112

116120123122123123

132135132123126134

1 132135134129128119

11311010497105111

114115103108134137

154156149136144157

147154150143142127

11710792819699

99955667

.139143

130135132123127134

138139137134134124

118117114107113123

133137138141150(2)

113114114110109110

111112114112110107

105107108106105111

111112113114114116

1 Preliminary. 2 Xot available.NOTE.—Detail not available prior to 1947.Source: Board of Governors of the Federal Reserve System.

173


TABLE D—30.—Business expenditures for new plant and equipment, 1939 and 1945-59


Period

1939

19451946194719481949

1950 .1951195219531954

19551956 3 -1957 31958 3 4

1956' First quarterSecond quarterThird quarterFourth quarter.. .

1957- First quarterSecond quarterThird quarterFourth quarter

1958' First quarter .- ..Second quarterThird quarterFourth quarter 4

1959: First quarter *

Total i

5.51

8.6914.8520.6122.0619.28

20.6025.6426.4928.3226.83

28.7035.0836.9630.53

Manufactur

Total

1.94

3.986.798.709.137.15

7.4910.8511.6311.9111.04

11.4414.9515.9611.50

Dura-ble

goods

0.76

1.593.113.413.482.59

3.145.175.615.655.09

5.447.628.025.54

ing

Non-durablegoods

1.19

2.393.685.305.654.56

4.365.686.026.265.95

6.007.337.945.96

Mining

0.33

.38

.43

.69

.88

.79

.71

.93

.98

.99

.98

.961.241.24.92

Transportation

Rail-road

0.28

:55.58.89

1.321.35

1.111.471.401.31.85

.921.231.40.76

Other

0.36

.57

.921.301.28.89

1.211.491.501.561.51

1.601.711.771.50

Publicutili-ties

0.52

.50

.791.542.543.12

3.313.663.894.554.22

4.314.906.206.10

Com-mer-cialand

other 2

2.08

2.705.337.496.905.98

6.787.247.098.008.23

9.4711.0510.409.74


32.8234.4935.8736.46

36.8937.0337.7536.23

32.4130.3229.6129.93

30. 51

13.4514.6515.7815.81

16.1216.2516.3715.27

13.2011.5310.8610.79

11.06

6.577.388.208.21

8.098.318.237.57

6.585.575.165.11

5.35

6.887.277.587.60

8.037.94-8.147.70

6.625.965.705.68

5.71

1.131.281.261.28

1.351.281.241.15

1.00.92.88.91

.84

1.251.221.201.23

1.421.351.541.26

1.02.77.63.59

.54

1.651.631.791.76

1.521.821.811.91

1.691.401.291.64

1.72

4.564.615.085.27

5.725.936.646.43

5.875.976.106.32

6.41

10.7811.1010. 7611.11

10.7610.4010.1510.21

9.639.739.859.68

9.94

1 Excludes agriculture.2 Commercial and other includes trade, service, finance, communications, and construction.3 Annual total is the sum of unadjusted quarterly expenditures; it does not necessarily coincide with the

average of seasonally adjusted figures. See footnote 4.4 Estimates for fourth quarter 1958 and first quarter 1959 based on anticipated capital expenditures re-

ported by business between late October and early December 1958. The quarterly anticipations includeadjustments, when necessary, for systematic tendencies in anticipatory data.

NOTE.—These figures do not agree precisely with the plant and equipment expenditures included in thegross national product estimates of the Department of Commerce. The main difference lies in the inclusionin the gross national product of investment by farmers, professionals, and institutions, and of certain out-lays charged to current account.

This series is not available for years prior to 1939 and for 1940 to 1944.Detail will not necessarily add to totals because of rounding.

Sources: Securities and Exchange Commission and Department of Commerce.

174


TABLE D-31.—New construction activity, 1929-58

[Value put in place, millions of dollars]

Period

1929 .

1930193119321933_ .1934

193519361937 _. _19381939

19401941 _194219431944 ..

19451946 --- -194719481949

195019511952 _ - - _ _ _19531954

1955195619571958 4

1957- JanuaryFebruaryMarchAprilMayJune.

JulvAugustSeptember.. _OctoberNovember. _ _December

1958: January ..FebruaryMarch.April _MayJune

JulyAugustSeptember _ _OctoberXovember_ _December 4 _

Totalnewcon-

struc-tion

10. 793

8,7416, 4273,5382,8793,720

4,2326,4976, 9996, 9808,198

8,68211,95714, 0758, 3015,259

5,80912, 73717, 91523, 22224, 163

29, 95532, 73934, 75037,11839, 601

44, 58146,29248, 11548, 980

Private construction

Total i

8,307

5,8833,7681,6761,2311,509

1,9992,9813,9033,5604,389

5,0546,2063,4151,9792,186

3,41110, 37514, 48118, 39517, 759

22, 95423, 32023, 84925, 72427, 679

32, 62033, 28733, 98833, 947

Resi-dential

building(non-farm)

3, 625

2,0751,565

630470625

1,0101,5651,8751,9902,680

2,9853,5101,715

885815

1,2764,7527,535

10, 1229,642

14, 10012, 52912, 84213, 77715, 379

18, 70517, 67717, 01917, 884

Nonresid

Total

4,682

3,8082,2031,046

761884

9891,4162,0281,5701,709

2,0692.6961I7001,0941,371

2,1355,6236, 9468,2738,117

8,85410, 79111, 00711, 94712, 300

13, 91515, 61016, 96916, 063

ential building and other construction

Com-mercial 2

1,135

893454223130173

211290387285292

3484091553356

2031,132

8561,2531,027

1,2881,3711,1371,7912,212

3,2183,6313, 5643,561

Indus-trial

949

5322?174

176191

158266492232254

442801346156208

6421,6891,7021,397

972

1,0622,1172,3202,2292,030

2,3993,0843,5572,443

Publicutility

1.578

1,527946467261326

363518705605683

771872786570725

8271,3742,3383,0433,323

3,3303,7294,0034,4164,284

4,5435,1135,6245, 554

Otber 3

1,020

856582282194194

257342444448480

508614413335382

4631,4282,0502,5802,795

3,1743,5743, 5473,5113,774

3,7553, 7824,2244,505

Publiccon-

struc-tion

2,486

2,8582,6591,8621,6482,211

2.2333, 5163,0963,4203,809

3, 6285, 751

10, 6606,3223,073

2,3982, 3623,4344,8276, 404

7,0019,419

10, 90111,39411, 922

11,96113,00514, 12715, 033


48, 20447, 43647, 83247, 70047, 68847, 688

46, 86048, 04848, 57649, 58449, 22450, 100

48, 81648, 04847, 59246, 57246, 54847, 148

47, 77248, 49249, 42851, 34852, 53653, 676

33,36033, 44433, 72033, 58833, 74433, 732

33, 58834, 09234, 28434, 77634. 82434, 584

33,96033, 55233, 08432, 38832, 35232, 700

33,12033, 58834, 16435, 32836, 18036, 588

17, 28017, 08817, 08816, 65616, 32016, 476

16, 59616, 94417,18417, 53217, 66417, 532

17, 34017, 22016, 76416, 21216, 17616, 632

17, 20817,95218, 48019, 47620,18420, 580

16, 08016, 35616, 63216, 93217,42417, 256

16,99217, 14817, 10017, 24417, 16017, 052

16,62016, 33216, 32016, 17616, 17616, 068

15,91215, 63615, 68415,85215, 99616, 008

3,5043, 3963, 4923, 5283, 6363, 624

3,5043,5523, 5763. 6723, 6603, 648

3, 4563, 3723, 4563, 5283, 6243,732

3, 6963,5283, 4923. 5523, 6243, 660

3,4563, 5883, 6723,7443, 7803, 732

3, 6003, 6123, 4803, 3963, 3723,264

3, 2283, 0242, 8802, 6642,5202, 340

2,2442,1482,0642, 0642, 1002,076

5,1125,2805, 3165, 4365,7725, 640

5, 7725, 6885,7485,8805,8205, 796

5, 6285, 5925, 6525, 6165, 5925, 508

5, 4365,4365,5205, 5685,5685, 604

4,0084,0924,1524,2244, 2364,260

4, 1164,2964,2964,2964, 3084,344

4,3084, 3444,3324, 3684, 4404,488

4, 5364,5244,6084, 6684, 7044, 668

14, 84413, 99214,11214,11213, 94413, 956

13, 27213, 95614, 29214, 80814, 40015, 516

14, 85614, 49614, 50814, 18414, 19614, 448

14, 65214, 90415, 26416, 02016,35617,088

1 Excludes construction expenditures for crude petroleum and natural gas drilling, and therefore does notagree with the new construction expenditures included in the gross national product. (Table D-l).

2 Office buildings, warehouses, stores, restaurants, and garages.3 Includes farm, institutional, and all other.4 Preliminary.

Sources: Department of Commerce and Department of Labor.

175


TABLE D-32.—New public construction activity, 1929-58

[Value put in place, millions of dollars]

Period

1929

19301931193219331934

19351936193719381939

19401941194219431944

19451946194719481949

19501951195219531954

19551956195719583

Total new public construction *

Allpublicsources

2,486

2,8582,6591,8621,6482,211

2,2333,5163,0963,4203,809

3,6285,751

10, 6606,3223,073

2,3982.3623,4344,8276,404

7,0019,419

10, 90111, 39411, 922

11, 96113, 00514, 12715, 033

Fed

Direct

155

209271333516626

814797776717759

1,1823,7519,3135,6092,505

1,737870840

1,1771,488

1,6252,9824,1864,1513,445

2,8002,7723,0183,152

eral

Federalaid

80

104235111286721

5671,5661,1171,3201,377

946697475268126

99244409417461

465479619700709

758878

1,3632,168

Stateandlocal

2,251

2,5452,1531,418

846864

8521,1531,2031,3831,673

1,5001,303

872445442

5621,2482,1853,2334,455

4,9115,9586,0966,5437,768

8,4039,3559,7469,713

Major types of new public construction

High-way

1,266

1,5161,355

958847

1,000

8451,3621,2261,4211,381

1,3021,066

734446362

398895

1,4511,7742,131

2,2722,5182,8203,1603,870

4,0504,6554,9715,350

Educa-tional

389

36428513052

148

153366253311468

1561581286341

59101287618934

1,1331,5131,6191,7142,134

2,4422, 5562, 8252,877

Hos-pitaland

institu-tional

101

118110834951

38747397

127

5442354458

858585

223477

496528473365360

322298350401

Sewerand

waterand

miscel-laneouspublicservice

404

500479291160228

246509445492507

469393254156125

152278492699803

819959958

1,0501,171

1,3181,6591,7371,838

Con-serva-tionandde-

velop-ment

115

137156150359518

700658605551570

528500357285163

130260424670852

942912900892773

701826971

1,004

Mili-tary

facili-ties

19

2940343647

37293762

125

3851,6205,0162,550

837

690188204158137

177887

1,3881,3071,030

1,3131, 3951,3221,235

Allother

public 2

192

194234216145219

214518457486631

7341,9724,1362,7781,487

884555491685

1,070

1,1622,1022,7432,9062,584

1,8151,6161,9512,328

1 For expenditures classified by ownership, combine ''Federal aid" and "State and local" columns toobtain State and local ownership. "Direct" column stands as it is for Federal ownership.

2 Includes nonresidential building other than educational and hospital and institutional (industrial,commercial, public administration, social and recreational, and miscellaneous), public residential buildings,and publicly owned parks and playgrounds, memorials, etc.

3 Preliminary.

Sources: Department of Commerce and Department of Labor.

176


TABLE D-33.—Housing starts and applications for financing, 1929-58

[Thousands of units]

Period

19293 . ...

19301931193219331934. - .. _ _

19351936193719381939 . . -

19401941 . _. _ _194219431944

19451946194719481949

195019511952195319541955195619571958 7

1957' JanuaryFebruaryMarch.AprilMay.TuneJulyAugustSeptember _. .OctoberNovemberDecember

1958: January-- _. . -FebruaryMarchAprilMayJuneJulyAugust. .SeptemberOctoberNovemberDecember < _

New nonfarm housing starts

Total

509.0

330.0254.0134 093.0

126. 0

221. 0319.0336.0406.0515. 0

602. 6706.1356.0191.0141.8

209.3670.5849.0931.6

1. 025. 1

1, 396. 01, 091. 31, 127. 01, 103. 81,220.41, 328. 91,118.11,041.91, 197. 7

64.265.887.093.7

103. 099.997.8

100. 091.997.078.263.467.966. 181.499.1

108. 5112.9112.8124.0121.0

' 111.0" 102. 0

91.0

Pub-liclyfi-

nanced

5.314.83.66.7

56.6

73.086.654.87.33.1

1.28.03.4

18.136.3

43.871.258.535.518.719.424 249.' 167.14. 12.77.72.36.15.43.93.21.78.62.5.9

5.05.14.14.97.2

11.64.29.4

10.1• 2 . 0' 2 .0

1.5

Privately financed

Total

509 0

330 0254 0134.093.0

126.0

215.7304.2332.4399.3458. 4

529.6619.5301.2183.7138.7

208.1662.5845.6913.5988.8

1, 352. 21, 020. 11,068.51, 068. 31, 201. 71, 309. 51, 093. 9

992.81,130.6

60.163.179.391.496.994.593.996.890.288.475.762.562.961.077.394.2

! 101.3101. 3108.6114.6110.9

7 109. 07 100. 0

89.5

Government programs

Total i

14.049.460.0

118.7158.1

180.1220.4165.7146.293.3

(5)(5)(5)(5)(5)

686.7412.2421.2408.5583.3669.6460.0296.7397.6

19.719.222.725.627.028.328.029.328.228.421.418.917.414.119.627.432.036. 540.343.646.349.436.834.2

FHAi

14.049.460.0

118.7158.1

180.1220.4165.7146.293 3

41.269.0

229.0294.1363.8

486.7263.5279.9252. 0276. 3276. 7189.3168.4295.4

7.79.3

11.312.114.915.315.717.716.418.715.014.213.311.316.522.726.028.029.730.531.934.725.825.0

VA

(5)(5)(5)(5)(5)

6 200. 0148.6141.3156.5307.0392.9270.7128.3102.212.09.9

11.413.512.013.012.311.611.89.76.44.64. 12.83. 14.86.08.5

10.613.114.314.711.09.2

Private,season-ally ad-justedannualrates

962935933962994995

1,0151,0561,0121,0201,0091,0001,020

915918983

1,0391,0571,1741,2281,255

7 1,260' 1,330

1,430

Proposed homeconstruction 2

FHAapplica-

tions

*20.647.849 8

131.1179.8

231.2288. 5238. 5144 462.9

56.6121.7286.4293.2327.0

397.7192.8267.9253.7338.6306.2197.7198.8341.710.512.116.216.816.916.618.422.320.420.214.713.617.320.625.031.634.633.431.833.636.831.822.323.0

VA ap-praisal

requests

(5)(5)(5)(5)(5)

(5)164.4226.3251.4535.4620.8401. 5159.4234.218.920.219.519.416.613.714.014.58.96.43.73.55.25.38.4

24. g29.528.428. t28.,26.'19.1is.:14. i

1 Excludes armed forces housing in 1956 (2,567 units); 1957 (18,573 units); and 1958 (23,744 units).2 Units in mortgage applications for new home construction.3 The number of starts for the years 1920-28, respectively, was as follows: 247,000; 449,000; 716,000; 871,000;

893,000; 937,000; 849,000; 810,000; and 753,000.4 FHA program approved in June 1934; all 1934 activity included in 1935.5 Not available.6 Partly estimated.7 Preliminary.

Sources: Department of Labor, Federal Housing Administration (FHA), and Veterans Administra-tion (VA).


TABLE D-34.—Sales and inventories in manufacturing and trade., 1939-58

[Amounts in billions of dollars]

Period

1939

19401941194219431944

1945194619471948 - -1949

19501951195219531954

1955195619571958 5 6

1957: JanuaryFebruary, _ _MarchAprilMayJune .

JulyAugustSeptember..OctoberNovember..December. _.

1958: JanuaryFebruary. _ .MarchAprilMayJune

JulyAugustSeptember. .OctoberNovember 6

December 6.

Total manufactur-ing and trade 1

Sales2

10.8

12.115.818.621.923.8

23.927.233.236.134.5

39.744.745.948.447.4

52.354.856.353.8

Inven-tories 3

20.1

22.228.831.131.331.1

30.942.950.555.451.8

62.873.875.478.675.5

81.789.190.785.1

Ratio*

1.77

1.721.58.66.40.33

.30

.33

.43

.48

.56

.39

.58

.61

.61

.62

.49

.561.611.61

M anuf actur ing

Sales 2

5.1

5.98.2

10.412.813.8

12.912.615.917.616.4

19.322.322.824.523.5

26.327.728.426.2

Inven-tories 3

11.5

12.817.019.320.119.5

18.424.528.931.728.9

34.342.843.845.443.0

46.452.353.549.3

Ratio*

2.11

2.061.781.771.511.45

1.481.661.711.721.86

1.571.771.901.841.86

1.681.791.891.93

Wholesale trade J

Sales 2

2.2

2.43.03.43.84.2

4.56.07.37.57.2

8.49.49.69.89.7

10.611.311.311.0

Inven-tories 3

3.1

3.24.03.83.73.9

4.66.67.67.97.6

9.19.7

10.010.510.4

11.413.012.712.1

Ratio*

1.34

1.301.201.19.97.94

.91

.901.011.011.07

.961.051.011.061.07

1.021.081.131.11

Retail trade '

Sales2

3.5

3.94.64.85.35.9

6.58.5

10.010.910.9

12.013.013.514.114.1

15.315.816.716.6

Inven-tories 3

5.5

6.17.88.07.67.6

7.911.914.115.815.3

19.321.221.622.722.1

23.923.924.523.7

Ratio4

1.53

1.491.481.761.431.31

1.211.131.271.401.43

1.401.651.551.591.59

1.501.501.441.46

Seasonally adjusted

57.957.456.256.456.856.4

57.457.056.355.754.754.5

53.852.151.352.152.453.2

54.054.454.855.656.2

89.389.689.990.190.690.7

91.091.391.391.191.090.7

90.089.388.587.686.986.4

85.985.485.084.985.1

1.541.561.601.591.591.61

1.581.601.621.641.661.67

1.681.721.731.691.661.63

1.601.581.561.531.51

1 '

30.029.528.428.728.628.1

29.028.628.228.127.226.7

26.425.524.924.925.225.7

26.326.426.827.227.6

52.452.953.353.753.953.9

54.154.254.254.153.953.5

52.952.452.051.550.950.2

49.849.449.349.349.3

1.751.781.871.871.881.91

1.861.891.921.931.982.01

2.022.062.092.072.031.96

1.901.881.841.821.79

11.611.511.411.311.511.4

11.411.411.211.010.910.9

10.710.510.310.710.710.9

11.011.111.411.511.6

12.912.812.812.812.712.7

12.712.812.812.812.812.7

12.612.512.412.212.112.1

12.112.112.112.112.1

1.111.111.121.131.111.11

1.121.121. 151.171.171.17

1.181.201.211.151.141.11

1.101.091.061.051.04

16.316.416.316.416.616.8

17.017.016.916.716.616.8

16.716.116.116.516.616.6

16.716.916.616.917.017.5

24.023.923.723.723.924.1

24.124.324.424.224.324.5

24.524.324.123.923.924.1

24.023.923.723.523.7

1.471.461.461.441.431.43

1.421.421.441.451.471.45

1.461.511.511.461.441.45

1.441.421.441.391.39

1 The series beginning in 1948 are not comparable with the previous years because of changes in definitionfor the wholesale series. Beginning in 1951, the estimates of retail sales and inventories are based on anew method cf estimation adopted by the Bureau of the Census.

2 Monthly average shown for year and total for month.3 Seasonally adjusted, end ofnd of period.

4 Inventory/sales ratio. For annual periods, ratio of weighted average inventories to average monthlysales; for monthly data, ratio of aveiage end of current and previous months' inventories to sales for month.

5 Where December data not available, data for year calculated on basis of no change from November.6 Preliminary.

NOTE.—For a description of the series and their comparability, see Survey of Current Business, Septemberand November 1952, January 1954, and June 1957 for retail, and August 1957 for manufacturing andwholesale.

The inventory figures in this table do not agree with the estimates of change in business inventoriesincluded in the gross national product since these figures cover only manufacturing and trade ratherthan all business, and show inventories in terms of current book value without adjustment for revaluation.


178


TABLE D-35.—Manufacturers' sales, inventories, and orders, 1939-58


Period

1939

19401941194219431944

19451946194719481949

19501951195219531954

1955195619571958 ^ s

1957:JanuaryFebruary. _.MarchAprilMayJune

JulvAugustSeptember. _OctoberNovember, _December- _

1958:JanuaryFebruaryMarch _AprilMayJune

JulyAugustSeptember..OctoberNovember 5_

Sales i

Dura-ble

goodsindus-tries

1.9

2.53.85.26.97.3

6.35.06.77.67. 1

8.810.410.912.411.2

13.113.814.212.4

Non-durablegoodsindus-tries

3.2

3.44.45.36.06.4

6.67.69.2

10.09.3

10.511.911.912.112.3

13.313.914.213.8

14.914.814.214.314.314.2

14.614.314. 113.913.513.1

12.612.011.711.511.612.1

12.312.412.712.913.4

15.014.714.214.414.313.9

14.514.314.114.113.713.6

13.713.513.313.413.613.7

14.014.014.114.214.2

Inventories 2

Durable-goodsindustries

Pur-chasedmate-rials

1.8

2.13.13.73.93.3

3.24.55.15.64.6

6.17.47.37.46.5

7.48.78.37.7

8.68.78.78.68.58.4

8.48.48.58.68.68.3

8.38.38.18.07.87.6

7.57.47.57.77.7

Gbodsin

process

1.5

2.03.24.65.25.0

3.54.65.25.44.7

6.08.6

10.210.79.8

11.112.812.711.3

S

12.812.913.013.413.413.3

13.513.613.413.213.112.7

12.412.111.911.811.611.4

11.311.311.311.311.3

Fin-ishedgoods

2.1

2.22.32.22.12.1

2.12.94.04.74.7

4.76.86.98.17.7

8.29.2

10.18.9

Nondurable-goodsindustries

.Pur-chasedmate-rials

2.4

2.64.04.34.54.7

4.96.57.27.36.5

8.49.18.68.17.9

8.18.58.88.6

Goodsin

process

0.8

.91.21.21.41.4

1.51.82.22.22.1

2.52.72.72.72.6

2.83.03.12.9

Fin-ishedgoods

2.9

3.03.23.33.03.0

3.24.25.26.56.3

6.68.28.18.48.4

8.810.110.59.9

New orders l

Total

5.4

6.89.8

13.312.711.9

10.513.715.617.415.9

21.024.523.623.122.5

27.228.327.326.0

Dura-ble

goodsindus-tries

2.2

3.45.38.06.85.5

3.95.96.47.56.6

10.312.711.711.010.2

13.914.413.112.1

Non-durablegoodsindus-tries

3.2

3.44.55.35.96.4

6.67.89.39.99.3

10.711.811.912.112.3

13.313.914.213.9

easonally adjusted

9.29.39.49.49.69.7

9.89.89.89.99.8

10.1

9.99.99.89.79.69.5

9.59.39.29.08.9

8.68.78.78.78.99.0

9.09.08.98.98.98.8

8.88.88.88.88.88.8

8.88.78.68.78.6

3.03.03.03.02.93.0

2.93.02.93.03.03.1

3.03.02.92.92.92.9

2.93.02.92.92.9

10.210.310.410.610.510.5

10.510.510.510.410.410.5

10.510.410.410.410.210.0

9.89.79.79.89.9

28.928.628.127.928.427.1

27.327.326.626.226.025.1

24.424.124.824.525.025.8

26.426.127.027.927.9

14.214.113.913.214.113.2

13.013.212.512.212.411.4

10.710.711.510.811.412.2

12.512.212.913.513.7

14.814.514.214.714.313.8

14.314.214.014.113.713.7

13.713.413.313.713.613.5

13.913.914.214.414.2

Un-filledorders(unad-just-ed) 3

7.0

18.437.972.971.549.0

20.933.830.326.920.8

41.167.676.359.546.9

56.964.250.746.4

64.063.763.261.961.160.3

59.357.856. 053.252.050.7

49.147.847.546.546.146.4

46.746.746.246.146.4

1 Monthly average shown for year and total for month.2 Book value, seasonally adjusted, end of period.3 End of period.4 Based on data through November.5 Preliminary.

NOTE.—Seo Table D-34 for total sales and inventories of manufacturers.


179


PRICES

TABLE D-36.—Wholesale price indexes, 1929-58

[1947-49=100] i

Period

1929 -

19301931 -193219331934

1935 _ . _ _ _ . - _ - . _1936193719381939

19401941 . _ _ _ _ - _ - . _194219431944

19451946 - -1947 .19481949

19501951195219531954

19551956 -1957 - - -1958 3

1957: January .. _FebruaryMarch . __AprilMayJune

JulyAugustSeptember _.October. .. _ _ .NovemberDecember


JulyAugust _ .SeptemberOctoberNovemberDecember 3

Allcom-modi-

ties

61.9

56.147.442.142.848.7

52.052.556.151.150.1

51.156.864.267.067.6

68.878.796.4

104.499.2

103.1114.8111.6110.1110.3

110.7114.3117.6119.2

116.9117.0116.9117.2117.1117.4

118.2118.4118.0117.8118.1118.5

118.9119.0119.7119.3119.5119.2

119.2119.1119.1119.0119.2119.2

Farmprod-ucts

58.6

49.336.226.928.736.5

44.045.248.338.336.5

37.846.059.268.568.9

71.683.2

100.0107.392.8

97.5113.4107.097.095.6

89.688.490.994.9

89.388.888.890.689.590.9

92.893.091.091.591.992.6

93.796.1

100.597.798.595.6

95.093.293.192.392.190.7

Proc-essedfoods

58.5

53.344.836.536.342.6

52.150.152.445.643.3

43.650.559.161.660.4

60.877.698.2

106.195.7

99.8111.4108.8104.6105.3

101.7101.7105.6110.9

104.3103.9103.7104.3104.9106.1

107.2106.8106.5105.5106.5107.4

109.5109.9110.7111.5112.9113. 5

112.7111.3111.1110.0109.5108.8

All commodities other than farm productsand foods

Total

65.5

60.953.650.250.956.0

55.756.961.058.458.1

59.463.768.369.370.4

71.378.395.3

103.4101.3

105. 0115.9113.2114.0114.5

117.0122.2125.6126.0

125.2125.5125.4125.4125.2125.2

125.7126.0126.0125.8125.9126.1

126.1125.7125.7125.5125.3125.3

125.6126.1126.2126.4126.8127.2

Textileprod-uctsand

apparel

64.2

57.147.139.046.051.8

50.450.854.247.449.5

52.460.368.969.269.9

71.182.6

100.1104.495.5

99.2110.699.897.395.2

95.395.395.493.5

95.895.795.495.395.495.5

95.495.495.495.195.094.9

94.694.194.093.793.593.3

93.393.393.393.293.193.2

Chemi-calsand

alliedprod-ucts

(2)

(2)(2)(2)51.253.7

56.056.459.055.955.8

56.661.669.369.570.2

70.676.3

101.4103.894.8

96.3110.0104.5105. 7107.0

106.6107.2109.5110.4

108.7108.8108.8109.1109.1109.3

109.5109.8110.2110.4110.3110.6

110.8110.6110.7111.0110.8110.7

110.4110.0109.9110.2110.2110.0

Rubberand

rubberprod-ucts

83.5

73.062.053.856.865.8

66.471.784.482.786.3

80.286.5

100.6103.3102.0

98.999.499.0

102.198.9

120.5148.0134.0125. 0126.9

143.8145.8145.2145.0

145.0143.9144.3144.5144.7145.1

144.9146.9146.5146.2144.7145.7

145. 1144.6144.6144.5143.8144.2

144.7144.4145.2146.1146.6146.7

Lumberand

woodprod-ucts

31.9

29.423.820.324.228.5

27.428.733.730.831.6

35.241.845.448.051.9

52.560.393.7

107.299.2

113.9123.9120.3120.2118.0

123. 6125.4119.0117.7

121.3120.7120.1120.2119.7119.7

119.3118.6117.8117.3116.9116.3

116.3115.8115. 5115.7115.9116.4

116.8118.6120.4120.8120.0119.6


180


TABLE D-36.—Wholesale price indexes, 1929-58—Continued

[1947-49=100] i

Period

1929

1930 .. -.1931193219331934

1935 . .1936193719381939

19401941 _194219431944 .

1945 _194619471948 _ .1949

195019511952 .19531954

19551956 -195719583

1957: JanuaryFebruaryMarch. _AprilMayJune

JulyAugustSeptember ...OctoberNovember _ . _December

1958: JanuaryFebruaryMarch . .AprilMayJune

JulyAugustSeptember- .OctoberNovember-December 3__

All commodities other than farm products and foods (continued)

Hides,skins,

leather,and

leatherprod-ucts

59.3

54.446.839.744.047.1

48.751.956.950.552.0

54.858.964.063.963.4

64.274.6

101.0102.196.9

104.6120.397.298.594.2

93.899.399.4

100.6

98.498.098.498.698.999.8

100.6100.3100.0100.1100.099.5

99.599.699.599.799.9

100.3

100.3100.5100.2101.4102.3103.6

Fuel,power,

andlight-ing

mate-rials

70.2

66.557.259.556.162.0

62.264.565.764.761.8

60.764.566.468.470.3

71.176.290.9

107.1101.9

103.0106.7106.6109.5108.1

107.9111.2117.2112.7

116.3119.6119.2119.5118.5117.2

116.4116.3116.1115.8115.7116.2

116.1113.6112.4111.0110.3110.7

111.9113.7114.1113.0112.6112.9

Pulp,paper,

andalliedprod-ucts

(2)

(2)(2)(2)(2)(2)

8%(2)(2)(2)(2)(2)(2)(2)&.102.998.5

100.9119.6116.5116.1116.3

119.3127.2129.6131.0

128.6128. 5128.7128.6128.9128.9

129.5129.9130.1130.9130.9131.0

130.8130.8130.5130.5130.5130.5

131.0131.0131.7131.9131.9131.4

Metalsand

metalprod-ucts

67.0

60.354.149.950.956.2

56.257.365.663.162.6

62.864.064.964.864.8

65.973.991.3

103.9104.8

110.3122.8123.0126.9128.0

136.6148.4151.2150.4

152.2151.4151.0150.1150. 0150.6

152.4153.2152. 2150.8150.4150.5

150.0150.1149.8148.6148.6148.8

148.8150.8151.3152.2153.0153.0

Machin-ery andmotiveprod-ucts

(2)

(2)(2)(2)(2)(2)

(2)(2)(2)(2)65.3

66.268.671.271.071.0

71.680.392.5

100.9106.6

108.6119.0121.5123.0124.6

128.4137.8146.1149.8

143.9144.5144.8145.0145.1145.2

145.8146.2146.9147.7149.2149.4

149.4149.3149.2149.4149.4149.5

149.5149. 5149.4149.9151.2151.5

Furni-tureand

otherhouse-holddura-bles

69.3

68.262.855.455.560.2

59.860.667.265.665.4

66.871.276.876.478.4

78.683.095.6

101.4103.1

105.3114.1112.0114.2115.4

115.9119.1122.2123.2

121.9121.9121.9121.5121.6121.7

122. 2122.4122.3122.6122.7123.5

123.8123.6123.5123.4123.2123.0

123.2123.0123.0123.0122.7122.8

Non-metal-

licminer-

als(struc-tural)

72.6

72.467.663.466.971.6

71.671.773.471.169.5

69.771.374.174.575.9

79.184.293.9

101.7104.4

106.9113.6113.6118.2120.9

124.2129.6134.6136.0

132.0132.7133.2134.6135.0135.1

135.2135.3135.2135. 3135. 4135.7

136.4136.5135.3135.4135.4135.2

135.3135.2136.7136.7136.7136.9

Tobaccomanu-

facturesand

bottledbever-ages

86.6

87.184.681.472.876.0

75.975.876.576.476.4

77.378.179.183.083.4

85.889.797.2

100.5102.3

103.5109.4111.8115.4120.6

121.6122.3126.1128.2

124.0124.1124.1124.5124.5124.7

127.7127.7127.7127.7127.8128.0

128.1128.1128.0128.0128.0128.0

128.0128.0128.0128.8128.7128.7

Miscel-laneousprod-ucts

(2)

(2)

8(2)(2)

(2)(2)(2)

88(2)(2)(2)(2)(2)100.8103.196.1

96.6104.9108.397.8

102.5

92.091.089.694.2

93.292.492.091.489.487.3

88.890.189.487.786.887.2

88.389.394.397.896.293.7

97.295.692.591.293.2

100.9

1 This does not replace the former index (1926=100) as the official index prior to January 1952. Thesedata from January 1947 through December 1951 represent the revised sample and the 1947-49 weightingpattern. Prior to January 1947 they are based on the month-to-month movement of the former index.

2 Not available.3 Preliminary.


181489916 O—59 13


TABLE D—37.—Wholesale price indexes, by stage of processing, 1947—58

[1947-49=100]

Period

194719481949

19501951195219531954

1955195619571958 *

1957:JanuaryFebruary . _ _MarchAprilMayJune _ _ __

JulyAugustSeptember. .OctoberNovember..December. _

1958:JanuaryFebruary. ..MarchAprilMayJune

JulyAugustSeptember..OctoberNovember. .December 4 _

Allcom-modi-ties

96.4104.499.2

103.1114.8111.6110.1110.3

110.7114.3117.6119.2

116.9117.0116.9117.2117.1117.4

118.2118.4118.0117.8118.1118.5

118.9119.0119.7119.3119.5119.2

119.2119.1119.1119.0119.2119.2

Crude materials

Total

98.6108.093.4

101.8116.9107.499.298.3

94.595.097.299.4

97.496.796.797.196.598.8

99.799.697.095.395.396.4

97.599.5

101.5100.3101.7100.7

100.099.198.498.098.497.1

Food-stuffsandfeed-stuffs

100.7108.890.5

97.0112.3105.794.694.7

85.784.087.792.8

86.385.986.588.086.989.1

90.490.387.386.186.888.5

90.393.296.795.497.795.7

94.392.190.789.389.988.4

Non-foodma-

terials,except

fuel

96.0106.897.2

111.0128.1110.9106.2104.2

110.1114.2112.5108.4

115.8114.2113.4111.6112.0115.0

115.2115.0112.6109.9108.1107.7

107.6107.9107.1106.3106.0107.0

107.7109.3109.6111.1111.2110.1

Fuel

89.4105.6105.0

104.6106. 5107.2111.0106.0

105.8113.3119.7121.2

120.8121.7119.9120.0119.3118.1

118.0118.0118.6119.0120. 5122.4

123.0123.5123.4117.9117.9118.2

118.8120.6121.8123.1123.0123.5

Intermediate materials, supplies, and components l

Total

96.2104.099.9

104.3116.9113.5114.1114.8

117.0122.1125.1125.3

124.8125.1124.9125.0124.7124.5

125.2125.5125.4125.2125.3125. 4

125.4125.0125.0125.1124.9124.7

125.0125.3125.4125.4125. 7126.3

Materials and components formanufacturing

Total

96.4104.099.6

104.5118.4113.4115.2115.4

118.2123.7126.9127.2

126.4126.5126.3126.3126.2126.2

127.1127.4127.4127.3127. 5127.6

127.5127.3127.1126.9126.8126.9

126.7127.2127.3127.6127.8127.8

Ma-terials

forfood

manu-factur-

ing

102.8106.091.2

94.9105.7101.5101.8100.9

97.798.099.9

102.2

101.1100.499.699.098.599.2

100.199.599.699.6

100.8101.6

102.4102.5102.4103.2103.5103.4

102.6101.8101.5101.4101.2100.4

Ma-terials

fornon-du-

rablemanu-factur-

ing

99.2105.095.8

100.5116.5104.8104.0102.3

102.7104.3105. 7104.7

105.4105.5105.2105.4105.6105.9

105.8105.9106.0106.0105.8105.8

105.7105.4105.2105.0104.6104.5

104.3104.2104.1104.2104.3104.5

Ma-terials

fordu-

rablemanu-factur-

ing

91.2103.0105.8

111.9124.3124.6130.1133.1

139.7148.5153.2154.3

152.1152.6152.5152.5152.0151.6

153.8154.7154.3154.2154 2154.2

153.8153.6153.5152.9152.9152.9

152.9155.0155.4156.2156.6156.5

Com-po-

nentsfor

manu-factur-

ing

94.4101.9103.8

107.6122.2122.5124.7125.3

130.9142.9148.3149.5

147.5147.4147.6147.9148.0147.7

148.3148.8149.4148.9149.2149.3

149.3149.1148.8148.5149.0149.4

149.5149.5149.8150.2150.7150.7

Ma-terialsandcom-po-

nentsfor

con-struc-tion

93.3103.2103.5

108.9119.1118.3120.2120.9

125.6132.0132.9132.9

132.8132.8132.7132.8132.6132.6

133.3133.4133.1133.0133.0132.9

133.0132.6131.9131.8132.0132.1

132.1132.7133.7134.2134.1134.1


182


TABLE D—37.—Wholesale price indexes, by stage of processing, 1947—58—Continued

[1947-49=100]

Period

194719481949

19501951 -195219531954

19551956 .19571958*

1957: January . _ _FebruaryMarch _AprilMayJune

JulyAugust-SeptemberOctober _ _NovemberDecember -

1958: January - .FebruaryMarch -AprilMayJune

JulyAugust -SeptemberOctober _ . _ _NovemberDecember 4

Finished goods

Total

95.9103.5100.6

102.4112.1111.5110.4110.7

110.9114.0118.1120.8

116.7117.0116. 9117.4117.4117.6

118.5118. 6118.8119.0119.6119.9

120.6120.6121.4120.9121.0120.7

120.8120.6120.9120.6120.6120.5

Consumer finished goods

Total

96.8104.199.2

100.9110.3109.0107.1107.1

106.4108.0111.1113.5

109.9110.2109.9110.5110.5110.7

111.6111.6111.6111.8112.2112.5

113.3113.3114.4113.7113.9113. 6

113.7113.3113.7113.3113.0112.8

Foods

97.0105.897.2

99.2111.3110.4104.6103.8

101.1101.0104.5110.5

102.3101.8101.3102.7103.1104.2

106.2106.2106.0106.2106.8107. 2

109.2110.1113.1111. 9112.5111.6

111.5110.0110.8109.6108.5107.7

Othernon-

durablegoods

97.4103.599.2

100.8108.5105.9106.9107.2

107.8109.9112.4111.7

111.8112.9112.7112.8112.5112.0

112.2112.2112.4112.4112.3112.6

112.5111.8111.5111.1110.9111.0

111.4112.0112.2112.2112.0112.1

Du-rablegoods

94.8101.3104.0

105.0112.1113.0113.8114.7

115.9119.7123.3125.0

122.9123.0122.9122.7122.7122.7

122.9123.1123.0123.5124.7124.9

125.1124.9124.9124.8124.7124.7

124.7124.7124.6125.0126.0126.2

Pro-ducer

finishedgoods

92.8101.1106.1

108.7119.3121.3123.1124.7

128.5138.1146.71.50.3

144.3144.7145.1145.3145.5145.5

146.4147.2147.8148.4149.8150.1

150.1150.1150.0150.1150.0150.0

150.0150.0150.1150.3151. 6151.9

Special groups of industrialproducts

Crudemate-rials 2

92.9108.598.6

109.9120.8109.3108.5103.3

113.4120.0118.3113.7

123.5121.2119.7117.1117.6121.4

121.3121.2118.3114.4112.1112.5

112.2112.9112.0110.2109.7111.2

112.4114.7115.9117.8118.5116.5

Inter-mediate

materials,supplies,and com-ponents 3

95.3103.7101.0

105.7118.5114.7116.2116.7

120.1126.0129.3129.1

128.7129.0129.0129.1129.0128.9

129.5129.8129.8129.8129.8129.8

129.7129.2128.8128.6128.5128.5

128.5129.1129.4129.6129.7129.8

Con-sumer

finishedgoods ex-cluding

foods

96.6102.8100.6

102.1109.6108.0108.9109.4

110.2112.8115.7115.8

115.2115.9115.8115.8115.5115.3

115.4115. 5115.6115.7116.1116.3

116.3115.8115.6115.3115.2115.2

115.5115.8116.0116.1116.3116.5

1 Includes, in addition to subgroups shown, processed fuels and lubricants, containers, and supplies.2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, oilseeds, and leaf tobacco.3 Excludes intermediate materials for food manufacturing and manufactured animal feeds.4 Preliminary.

NOTE.—For a listing of the commodities included in each sector and their relative importance, see MonthlyLabor Review, December 1955.


183


TABLE D-38.—Consumer price indexes, 1929-58

For city wage-earner and clerical-worker families

[1947-49=100]

Period

1929

19301931193219331934

19351936 _1937 .-19381939

1940.1941194219431944

19451946194719481949. _ _ .

19501951195219531954

19551956 -19571958 2

1957' JanuaryFebruary ...MarchAprilMayJune

JulyAugustSeptember..October .NovemberDecember

1958: January _FebruaryMarchAprilMayJune

JulyAugust.. _-_ - _ _ _SeptemberOctoberNovember.

Allitems

73.3

71.465.058.455.357.2

58.759.361.460.359.4

59.962.969.774.075.2

76.983.495.5

102.8101.8

102.8111.0113.5114.4114.8

114.5116.2120.2123.4

118.2118.7118.9119.3119.6120.2

120.8121.0121.1121.1121.6121.0

122.3122.5123.3123.5123.6123.7

123.9123.7123.7123.7123.9

Food

65.6

62.451.442.841.646.4

49.7.50.152.148.447.1

47.852.261.368.367.4

68.979.095.9

104.1100.0

101.2112.6114.6112.8112.6

110.9111.7115.4120.4

112.8113.6113. 2113.8114.6116.2

117.4117.9117.0116.4116.0116.1

118.2118.7120.8121.6121.6121.6

121.7120.7120.3119.7119.4

Housing

Total

0)

0)0)0)(0(071.872.875.476.676.1

76.478.381.882.884.7

86.188.395.0

101.7103.3

106.1112.4114.6117.7119.1

120.0121.7125.6127.7

123.8124.5124.9125.2125.3125.5

125.5125.7126.3126.6126.8127.0

127.1127.3127.5127.7127.8127.8

127.7127.9127.9127.9128.0

Rent

117.4

114.2108.297.183.678.4

78.280.183.886.586.6

86.988.490.490.390.6

90.991.494.4

100.7105.0

108.8113.1117.9124.1128.5

130.3132.7135.2137.7

134.2134.2134.4134.5134.7135.0

135.2135.4135.7136.0136.3136.7

136.8137.0137.1137.3137.5137.7

137.8138.1138.2138.3138.4

Ap-parel

60.3

58.953.647.545.950.2

50.651.053.753.452.5

53.255.664.967.872.6

76.383.797.1

103.599.4

98.1106.9105.8104.8104.3

103.7105.5106.9106.9

106.4106.1106.8106.5106.5106.6

106.5106.6107.3107.7107.9107.6

106.9106.8106.8106.7106.7106.7

106.7106.6107.1107.3107.7

Trans-porta-tion

0)

0)0)0)0)0)

69.670.271.371.970.2

69.872.278.578.278.2

78.182.190.6

100.9108.5

111.3118.4126.2129.7128.0

126.4128.7136.0140.1

133.6134.4135.1135.5135.3135.3

135.8135.9135.9135.8140.0138.9

138.7138. 6138.7138.3138.7138.9

140.3141.0141.3142.7144.5

Medi-cal

care

0)

0)(')0)0)(0

71.471.672.372.572.6

72.773.175.178.781.2

83.187.794.9

100.9104.1

106.0111.1117.2121.3125.2

128.0132.6138.0144.1

135.3135.5136.4136.9137.3137.9

138.4138.6139.0139.7140.3140.8

141.7141.9142.3142.7143.7143.9

144.6145.0146.1146.7147.0

Per-sonalcare

0)

0)(00)0)(054.655.358.559.859.6

59.561.066.973.879.0

81.587.497.6

101.3101.1

101.1110.5111.8112.8113.4

115.3120.0124.4128.6

122.1122.6122.9123.3123.4124.2

124.7124.9125.1126.2126.7127.0

127.8128.0128.3128.5128.5128.6

128.9128.9128.7128.8129.1

Read-ing andrecrea-

tion

0)

0)(00)0)0)58.159.160.862.963.0

64.166.469.575.383.4

86.889.795.5

100.4104.1

103.4106.5107.0108.0107.0

106.6108.1112.2116.7

109.9110.0110.5111.8111.4111.8

112.4112.6113.3113.4114.4114.6

116.6116.6117.0117.0116.6116.7

116.6116.7116.6116.6117.0

Othergoodsand

services

0)

0)0)0)0)0)

67.267.068.869.470.6

72.874.276.380.282.4

85.788.696.1

100.5103.4

105.2109.7115.4118.2120.1

120.2122.0125.5127.2

123.8124.0124.2124.2124.3124.6

126.6126.7126.7126.8126.8126.8

127.0127.0127.2127.2127.2127.2

127.2127.1127.1127.2127.3

1 Not available.2 January-November average.Source: Department of Labor.

184


TABLE D-39.—Consumer price indexes, by selected major groups, 1935-58

For city wage-earner and clerical-worker families

[1947-49=100]

Period

1935 -1936193719381939

19401941 . _.194219431944 ._

19451946194719481949 .-

1950195119521953 ..1954

195519561957 ._19581

1957: January.FebruaryMarch__. _ _ _AprilMayJune

July ,August _ -SeptemberOctober __ _NovemberDecember

1958' JanuaryFebruaryMarchAprilMay -June

JulyAugustSeptemberOctober.. _ _ _ _November

Allitems

58.759.361.460.359.4

59.962.969.774.075.2

76.983.495.5

102.8101.8

102.8111.0113.5114.4114.8

114.5116.2120.2123.4

118.2118.7U8.9119.3119.6120.2

120.8121.0121.1121.1121.6121.6

122.3122. 5123.3123.5123.6123.7

123.9123.7123.7123.7123.9

Allitemslessfood

65.866.568.969.669.1

69.471. 476.478.581.5

83.487.095.1

101.9103.0

104.2110.8113.5115.7116.4

116.7118.8122.8125. 4

121.0121.5122.0122.3122.3122.5

122.8123.0123.4123.7124.6124.5

124.7124.8125. 0125. 0125.1125. 2

125. 4125.6125.8126.0126.5

Allitemslessshel-ter

55.556.258.056.455.4

55.859.166.671.672.9

74.882.395.6

103.1101.3

102.0110.5112.7113.1113.0

112.4114.0117.8121.2

115.9116.4116.5116.9117.1117.8

118.5118.7118.7118.6119.2119.2

120.0120.2121.0121.2121.3121.4

121.6121.4121. 5121.5121.7

Commodities

Allcom-modi-ties

52.052.754.752.751.6

52.155.763.869.470.2

72.380.196.3

103.2100.6

101.2110.3111.7111.3110.2

109.0110.1113.6116.3

111.9112.3112.4112.8113.0113.7

114.4114.6114.5114.3114.7114.7

115.4115. 5116.4116.6116.6116. 6

116.8116.4116.4116.4116.6

Food

49.750.152.148.447.1

47.852.261.368.367.4

68.979.095.9

104.1100.0

101.2112.6114.6112.8112.6

110.9111.7115.4120.4

112.8113.6113.2113.8114.6116.2

117.4117.9117.0116.4116.0116.1

118.2118.7120.8121.6121.6121.6

121.7120.7120.3119.7119.4

Commodities less food

All

57.357.960.460.459.4

59.862.769.872.776.7

79.784.795.7

102.9101.5

101.3108.9109.8110.0108.6

107.5108.9112.3113.3

111.2111.4111.9112.1111.8111.9

112.2112.1112.6112.8113.8113.6

113.5113.2113. 1112. 8112.9112.9

113.1113. 2113.5113.9114.5

Dura-bles

53.354.157.558.557.3

56.860.768.971.277.8

83.787.594.9

101.8103.3

104.4112.4113.8112.6108.3

105.1105.1108.8110.3

108.2108.3108.6108.8108.3108.4

108.2108.4108.6108.6110.9110.3

110.5110.3109.6109.6109.7109.6

109.8109.9110.3111.2112.8

Non-dura-bles

57.157.659.959.658.7

59.361.868.471.374.9

77.683.395.7

103.1101.1

100.9108.5109.1110.1110.6

110.6113.0116.1116.9

114.7115.0115.6115.8115.6115.8

116.3116.0116.7117.0117.4117.3

117.0116.7116.9116.6116. 5116.7

116.9116.9117.2117.2117.1

Services

Allserv-ices

75.676.478.780.380.4

80.681.684.285.887.9

89.090.894.5

100.4105.1

108.5114.1119.3124.2127.5

129.8132.6137.7142.3

135.0135.7136.3136.7137.2137.5

137.9138.3138.8139.2139.8140.0

140.5141.0141.7142.1142.3142.3

142.6143.0143.0143.1143.4

Rent

78.280.183.886.586.6

86.988.490.490.390.6

90.9-91.494.4

100.7105.0

108.8113.1117.9124.1128.5

130.3132.7135.2137.7

134.2134.2134.4134.5134.7135.0

135.2135.4135.7136.0136.3136.7

136.8137.0137.1137.3137.5137.7

137.8138.1138.2138.3138.4

Allserv-iceslessrent

72.672.272.973.573.5

73.674.577.881.385.2

87.090.294.7

100.1105.2

108.1114.6120.1124.6127.7

130.1133.0138.6143.7

135.6136.5137.1137.6138.1138.4

138.9139.3139.8140.3140.9141.1

141.7142.3143.1143.5143.8143.8

144.1144.4144.4144.5144.8

1 January-November average.


185


MONEY SUPPLY, CREDIT, AND FINANCE

TABLE D-40.—Deposits and currency, 1929-58


End of period

192919301931193219331934193519361937193819391940194119421943194419451946194719481949195019511952195319541955195619571958 s1957: January

FebruaryMarch.AprilMayJune. . . -_ _JulyAugust.. _ _ _ -SeptemberOctoberNovemberDecember

1958: JanuaryFebruary.-MarchAprilMay. _ __-JuneJulysAugust 5 - _September «October 5

November 5

December «

Totaldeposits

andcur-

rency

54.753.648.445.442.648.152.757.656.859.964.771.179.1

100 5123.4151.4176.4167.5172.3172.7173.9180.6189.9200.4205. 7214.8221.0226.4232.3245.9222.4221.1221.5224.3224.2224.9225.2225.0225.4226.9227.0232.3227.7228.0230.9234.4234.2239.5237.2238.7238.1240.5243.4245.9

U.S.Gov-ern-

mentde-

posits i

0.2.3.5.5

1.01.81.51.21.01.81.51.12.89.2

11.021.225.63.52.33.64.13.73.95.64.85.14.44.54.74.92.53.14.34.75.85.24.24.94.53.93.84.72.94.26.46.06.1

10.04.86.25.04.26.34.9

Total excluding U. S. Governmentdeposits 2

Total

54.653.247.944.941.546.351.356.455.858.163.370.076.391.3

112.4130.2150.8164.0170.0169.1169.8176.9186. 0194.8200.9209.7216.6222.0227.7241.0219.9218.0217.2219.6218.4219.7221.0220.0220.9223.0223.3227.7224.8223.9224.5228.4228.1229.5232.4232.5233.1236.2237.0241.0

Timede-

posits 3

28.228.726.024.521.723.224.225.426.226.327.127.727.728.432.739.848.554.056.457.558.659.261.565.870.475.378.482.289.197.882.983.684.684.985.786.486.787.187.788.187.689.189.890.992.593.694.695.596.597.097.297.496.797.8

Demand deposits andcurrency

Total

26.424.621.920.419.823.127.031.029.631.836.242.348.662.979.690.4

102.3110.0113.6111.6111.2117.7124.5129.0130.5134.4138.2139.7138. 6143.1136.9134.4132.6134.7132.7133.3134.3132.9133.3134.9135.7138.6135.0133.0132.0134.8133.5134.0135.9135.5135.9138.8140.3143.1

Demanddeposits

ad-justed 4

22.821.017.415.715.018.522.125 524.026.029.834.939.048.960.866.975.983.387.185.585.892.398.2

101.5102.5106.6109.9111.4110.3114.5109.5107.0105.2107.3104.8105.6106.6105.1105. 5107.2107.2110.3107.6105.6104.6107.2105.8106.2108.1107.5108.1110.8111.6114.5

Cur-rency

outsidebanks

3.63.64.54.74.84.74.95.55.65.86.47.39.6

13.918.823.526.526.726.526.125.425.426.327.528.127.928.328.328.328.627.427.427.427.427.927.827.827.827.827.828.528.327.327.427.427.627.827.827.928.027.928.028.828.6

Demand deposits andcurrency,

seasonally adjusted

Total

134.1134.5134.7135.0134.6135.2136.0134.7133.9134.2134.0133.2132.2133.1134.0135.0135.5135.4137.6137.3136.7137.9138.5138.3

Demanddeposits

ad-justed 4

106.5106.9107.0107.3106.6107.3108.0106.8106.2106.6105.9105.1104.7105.5106.4107.2107. 6107.4109.5109.2108.9110.0110.3110.3

Cur-rency

outsidebanks

27.627.627.727.728.027.928.027.927.727.728.128.127.527.627.627.827.928.028.128.127.827.928.228.0

1 Includes U. S. Government deposits at Federal Reserve Banks and commercial and savings banks and,beginning with 1938, includes U. S. Treasurer's time deposits, open account.

2 Includes holdings of State and local governments.3 Includes deposits in commercial banks, mutual savings banks, and Postal Savings System, but ex-cludes interbank deposits.4 Includes demand deposits, other than interbank and U. S. Government, less cash items in process ofcollection.

« Preliminary; December estimates by Council of Economic Advisers.NOTE.—Monthly data are for the last Wednesday of the month, except the unadjusted data for December

1957 and June and December 1958, which are for call dates. All end-of-year figures are for call dates.Detail will not necessarily add to total because of rounding.Source: Board of Governors of the Federal Reserve System (except as noted).

186


TABLE D—41.—Loans and investments of all commercial banks, 1929—58


End of period 1

1929— June 5 - -1930— June 5 . . . .1931— June 5 - - -1932— June 5

1933— June 51934— June 5

1935 - -1936 . -19371938193919401941194219431944 . - - -1945 - - - -- --19461947 .- -1948 .194919501951 -. .-195219531954 -- --1955 _ - _195619571958 7

1957: January . _ _ _ _ .FebruaryMarchApril. _ -.- .MavJuneJulyAugust -- _ - - -SeptemberOctoberNovember. - _ -December

1958: JanuaryFebruary _ _ _ _ _March _ _ _ _ _ _ _AprilMay_.June__ _ _July 7

August 7

September 7 _October 7

November 7

December 7 _

Totalloansand

invest-ments

49.448.944.936.130.432.736.139.638.438.740.743.950.767.485.1

105.5124.0114.0116.3114. 3120.2126.7132.6141.6145.7155.9160.9165.1170. 1184.5162.8162. 5162.9165.1165.1165.6165. 4165.9166.3167.9167.3170.1167.7168.6171.4175.6175.4179.9177.6180.0179.5181.4183.6184.5

Loans

• Total2

35.734.529.221.816.315.715.216.417.216.417.218.821.719.219.121.626.131.138.142.543.052.257.764.267.670.682.690.393.997.988.989.390.691.091.293.392.392.893.493.0/92.993.992.092.193.093.592.995.693.693.894.294.996.097.9

Businessloans 3

(6)(6)(6)(8)(6)(6)(6)(6)(6)

5.76.47.39.37.97.98.09.6

14.218.218.917.121.925.927.927.226.933.238.740.540.137.637.839.039.038.940.539.639.940.339.739.640.538.838.639.238.438.138.937.938.338.738.839.240.1

Investments

Total

13.714.415.714.314.017.020.923.121.222.323.425.129.048.266.083.997.982.978.271.877.274.474.977.578.185.378.374.876.286.573.973.272.274.173.972.373.073.172.974.974.376.275.676.578.482.182.584.384.086.285.386.587.686.5

U. S. Gov-ernment

obligations *

4.95.06.06.27.5

10.313.815.314.215.116.317.821.841.459.877.690.674.869.262.667.062.061.563.363.469.061.658.658.266.157.756.855.757.557.155.556.356.255. 957.356.958.257.758.359.662.863.164.264.166.164.766.067.366.1

Othersecurities

8.79.49.78.16.56.77.17.97.07.27.17.47.26.86.16.37.38.19.09.2

10.212.413.314.114.716.316.716.317.920.416.216.316.516.716.816.816.816.917.117.617.417.917.918.218.919.319.420.119.920.220.620.520.320.4

1 End-of-year, December 1957, June and December 1958 figures are for call dates. Other data (includingthose for June 1957) are for the last Wednesday of the month.

2 Data are shown net, i. e., after deduction of valuation reserves. Includes commercial and industrial,agricultural, security, real estate, bank, consumer, and other loans.

3 Beginning with 1948, data are shown gross of valuation reserves, instead of net as for previous years.Prior to June 1947 and for months other than June and December, data are estimated on the basis of reporteddata for all insured commercial banks and for weekly reporting member banks.

4 Figures in this table are based on book values and relate only to banks within the continental UnitedStates. Therefore, they dp not agree with figures in Table D-49, which are on the basis of par values andinclude holdings of banks in United States Territories and possessions.

3 June data are used because complete end-of-year data are not available prior to 1935 for U. S. Govern-ment obligations and other securities.

6 Not available.7 Preliminary; December estimates by Council of Economic Advisers.

NOTE.—Detail will not necessarily add to totals because of rounding.Source: Board of Governors of the Federal Reserve System (except as noted).

187


TABLE D-42.—Federal Reserve Bank credit and member bank reserves, 1929—58

[Averages of daily figures, millions of dollars]

Period

1929

19301931193219331934

19351936193719381939

1940 .--194119421943 ..1944

194519461947 .19481949

19501951195219531954

1955195619571958 -

1957' JanuaryFebruaryMarchAprilMayJune


1958* JanuaryFebruary --MarchAprilMayJune

JulyAugustSeptemberOctober .NovemberDecember

Reserve Bank credit outstanding

Total

1,459

1,0871,2742,0772,4292,502

2,4752,4812,5542,6002,628

2,4872,2933,4088,182

15, 358

22, 21124,02922, 98922, 28320, 161

19, 06224, 07024, 80126, 26225, 602

25, 47225, 70225, 37325, 982

25,90524, 91224, 96825, 41125, 04125, 189

25, 46625, 16625, 48925, 32625, 37326, 186

25, 22924, 56824, 55924, 68224, 93925, 851

26, 31026, 55426, 54826, 78927,21128, 412

U.S.Govern-ment se-curities

208

564669

1,4612,0522,432

2,4312,4312,5042,5652,584

2,4172,1873,1917,724

14, 772

21, 36323,25022,33021, 51119,560

18, 41022, 75623,06624, 66124, 646

23, 89123, 70923, 34524, 654

24, 09223, 11123, 06123, 23923, 04122, 989

23, 35123, 14623, 32523, 34823, 41723, 982

23, 60823, 37823, 48623, 64923, 93924, 749

25, 21825, 41025, 05125, 29625, 65026, 312

Memberbank

borrow-ings

943

27132351823429

76

1494

355

24135

366215156140115

106289780768147

607831837294

407640834

1,011909

1,005

9171,005

988811804710

451242138130119142

109252476425486557

Allother,mainly

float

308

25228298

14341

3744362640

67101212434451

482564503632486

5461,025

955833809

9741,1621,1911,032

1,4061,1611,0731,1611,0911,195

1,1981,0151,1761,1671,1521,494

1,170948935903881960

983892

1,0211,0681,0741,536

Member bank reserves

Total

2,358

2,3792,3232,1142,3433,676

5,0015,9896,8307,935

10, 352

13, 24913, 40412,64812, 62613, 222

15, 05515,96916, 46118,00117, 774

16,40019, 29320, 35619,99619, 276

18, 84318, 96519, 02118, 647

19,29518, 81618, 88419, 08718, 82718, 982

19,12918, 83418, 95619, 04018, 95819, 420

19, 29619,00018, 73018, 39418, 22318,600

18,60918, 58018, 42518, 47618, 54018, 899

Re-quired

2,315

2,3242,2341,858

11,815i 2, 112

2,5323,4775,6105,4135,960

6,9238,0809,980

11,11612, 176

13, 93414, 99315,60817,16416, 952

15, 61718, 53619,64219, 31918,501

18, 25718, 40318,504

2 18, 056

18, 77318, 30218, 36618, 58018, 36218, 485

18, 59518,30018, 43418, 57318, 44718, 843

18, 72318, 43418, 09717, 77217, 55717, 974

17, 95317, 94617, 85417, 95518, 034

2 18, 372

Excess

43

5589

2561528

i 1, 564

2,4692,5121,2202,5224,392

6,3265,3242,6681,5101,046

1,121976853837822

783757714677775

586562517

2592

523514518506465496

534534522467512577

573567633623666626

656635571521506

2527

Memberbankfree

reserves(excess re-serves lessborrow-

ings)

-900

-216-234-262

2941,535

2,4622,5061,2062,5134,388

6,3235,3192,6631,486

911

755761697697707

677468

-66-91628

-21-269-3202298

117-126-316-505-444-508

-383-471-467-344-293-133

122324495493547484

546383959620

2-30

1 Data from March 1933 through April 1934 are for licensed banks only.2 Preliminary.


Source: Board of Governors of the Federal Reserve System.

188


TABLE D-43.—Bond yields and interest rates, 1929-58

[Percent per annum]

Period

1929 .

19301931193219331934

19351936193719381939 - - -

19401941 ..-194219431944

19451946 - - - -194719481949

1950 - - - -195119521953 - .--1954

195519561957 ..1958

1956' JanuaryFebruaryMarchAprilMayJune.. _


U. S. Governmentsecurities

3-monthTreas-

urybills i

(4)

(4)1.402.879.515.256

.137

.143

.447

.053

.023

.014

.103

.326

.373

.375

.375

.375

.5941.0401.102

1.2181.5521.7661. 931.953

1.7532.6583.2671.839

2.4562.3722.3102.6132.6502.527

2.3342.6062.8502.9613.0003.230

9-12monthissues 2

(5)

(5)(5)(5)(5)(5)

(5)(5)(5)(5)(5)

(5)(5)(5).75.79

.81

.82

.881.141.14

1.261.731.812.07.92

1.892.833.532.09

2.502.382.432.832.832.69

2.623.013.173.073.153.33

Taxablebonds 3

2.462.472.48

2.372.192.252.442.31

2.322.572.682.942.55

2.843.083.473.43

2.882.852.933.072.972.93

3.003.173.213.203.303.40

Corporatebonds

(Moody's)

Aaa

4.73

4.554.585.014.494.00

3.603.243.263.193.01

2.842.772.832.732.72

2.622.532.612.822.66

2.622.862.963.202.90

3.063.363.893.79

3.113.083.103.243.283.26

3.283.43

' 3.563.593.693.75

Baa

5.90

5.907.629.307.766.32

5.754.775.035.804.96

4.754.334.283.913.61

3.293.053.243.473.42

3.243.413.523.743.51

3.533.884.714.73

3.603.583.603.683.733.76

3.803.934.074.174.244.37

Commonstock

yields,200

stocksMoody's)

3.41

4.546.177.364.424.11

4.063.504.774.384.15

5.316.256.674.894.81

4.193.975.135.786.63

6.276.125.505.494.78

4.064.074.334.05

4.214.093.863.874.134.01

3.874.024.244.234.254.13

High-grade

munic-ipal

bonds(Stand-ard &

Poor's)

4.27

4.074.014.654.714.03

3.403.073.102.912.76

2.502.102.362.061.86

1.671.642.012.402.21

1.982.002.192.722.37

2.532 933^603.56

2.642.582.692.882.862.75

2.782.943.073.143.383.44

Averagerate onshort-termbankloans

to busi-ness-

selectedcities

(6)

(6)(6)

8(6)

(6)(•)(6)(6)2.1

2.12.02.22.62.4

2.22.12.12.52.7

2.73.13.53.73.6

3.74.24.64.3

3.93

4.14

4.35

4.38

Primecom-mer-cial

paper ,4—6

months

5.85

3.592.642.731.731.02

.75

.75

.94

.81

.59

.56

.53

.66

.69

.73

.75

.811.031.441.49

1.452.162.332.521.58

2.183.313.812.46

3.003.003.003.143.273.38

3.273.283.503.633.633.63

Fed-eralRe-

serveBankdis-

countrate

5.16

3.042.112.822.561.54

1.501.501.331.001.00

1.001.00

71.0071.0071.00

71.0071.00

1.001.341.50

1.591.751.751.991.60

1.892.773.122.16

2.502.502.502.652.752.75

2.752.813.003.003.003.00


189


TABLE D-43.—Bond yields and interest rates, 1929-58—Continued

[Percent per annum]

Period

1957: JanuaryFebruaryMarchAprilMayJune _

JulyAugustSeptemberOctober _NovemberDecember


JulyAugustSeptemberOctober - -NovemberDecember

U. S. Governmentsecurities

3-monthTreas-

urybills i

3.2103.1653.1403.1133.0423.316

3.1653.4043.5783.5913.3373.102

2.5981.5621.3541.1261.046.881

.9621.6862.4842.7932.7562.814

9-12monthissues 2

3.173.233.353.413.373.55

3.713.934.023.943.523.09

2.561.931.771.351.21.98

1.342.142.842.832.923.24

Taxablebonds 3

3.343.223.263.323.403.58

3.603.633.663.733.573.30

3.243.283.253.123.143.20

3.363.603.753.763.703.80

Corporatebonds

(Moody's)

Aaa

3.773.673.663.673.743.91

3.994.104.124.104.083.81

3.603.593.633.603.573.57

3.673.854.094.114.094.08

Baa

4.494.474.434.444.524.63

4.734.824.934.995.095.03

4.834.664.684.674.624.55

4.534.674.874.924.874.85

Commonstock

yields,200

stocks(Moody's)

4.314.444.354.164.054.05

4.014.214.504.684.584.77

4.564.624.504.354.274.15

3.973.913.723.643.543.34

High-grade

munic-ipal

bonds(Stand-ard &

Poor's)

3.403.263.323.333.523.75

3.753.913.903.793.763.47

3.323.373.453.313.253.26

3.453.743.963.943.843.84

Averagerate onshort-termbankloans

to busi-ness-

selectedcities

4.38

4.40

4.83

4.85

4.49

4.17

4.21

4.50

Primecom-mer-cial

paper,4-6

months

3.633.633.633.633.633.79

3.883.984.004.104.073.81

3.492.632.331.901.711.54

1.501.962.933.233.083.33

Fed-eralRe-

serveBankdis-

countrate

3.003.003.003.003.003.00

3.003.153.503.503.233.00

2.942.752.352.031.751.75

1.751.751.912.002.402.50

1 Rate on new issues within period. Issues were tax exempt prior to March 1, 1941, and fully taxablethereafter. For the period 1934-37, series includes issues with maturities of more than 3 months.2 Includes certificates of indebtedness and selected note and bond issues (fully taxable).

3 First issued in 1941. Series includes: October 1941-March 1952, bonds due or callable after 15 years;April 1952-March 1953, bonds due or callable after 12 years; April 1953 to date, bonds due or callable 10years and after.4 Treasury bills were first issued in December 1929 and were issued irregularly in 1930.5 Not available before August 1942.6 Not available on same basis as for 1939 and subsequent years.7 From October 30, 1942, to April 24, 1946, a preferential rate of 0.50 percent was in effect for advancessecured by Government securities maturing or callable in 1 year or less.

NOTE.—Yields and rates computed for New York City, except for short-term bank loans.Sources: Treasury Department, Board of Governors of the Federal Reserve System, Moody's Investors

Service, and Standard & Poor's Corporation.

190


TABLE D-44.—Short- and intermediate-term consumer credit outstanding, 1929—58


End of period

1929

19301931 . -1932 _ _19331934

19351936193719381939 .

1940194119421943 . -1944 . . _ .

19451946 . . . .194719481949

19501951195219531954

19551956 - .. ...19571958 5

1957: JanuaryFebruary _MarchAprilMayJune _ - _ .- _ _ _ _ _ _

JulyAugust _ _ _ _ _ _SeptemberOctoberNovemberDecember

1958' JanuaryFebruary. _ .MarchApril _ - -_MayJune _ _ -

JulyAugustSeptemberOctober-NovemberDecember 5 . _ _ _

Total

6,444

5,7674,7603,5673,4823,904

4,9116,1356,6896,3387,222

8,3389,1725,9834,9015,111

5,6658,384

11, 57014, 39817, 305

21, 39522,61727, 40131, 24332, 292

38, 67042, 09744, 77444,800

41, 28840, 87740, 85441, 35242,08042, 496

42, 63343, 03343, 15943, 16243, 43844, 774

43, 90443, 01742, 50042, 61742, 98543, 079

42, 92343, 12843, 14443,16443, 46444, 800

Instalment credit

Tqtal

3,151

2,6872,2071,5211,5881,871

2,6943,6234,0153,6914,503

5,5146,0853,1662,1362,176

2,4624,1726,6958,996

11,590

14, 70315, 29419, 40323, 00523, 568

28, 95831, 82734, 09533,700

31, 58131, 49431, 52731, 78232, 16532, 602

32, 96233, 28333, 39333, 48433, 56634, 095

33, 71333, 27832,94032, 88832, 91033, 008

33, 07433,16533, 07933, 05233, 12633,700

Auto-mobilepaper l

(4)

(4)(4)(4)(4)(4)

(4)(4)(4)(4)

1,497

2,0712,458

742355397

455981

1,9243,0184,555

6,0745,9727,7339,8359,809

13, 47214, 45915, 40914,100

14, 40414,41914, 50914, 66414, 84915,086

15, 27715, 43115, 48815, 50515, 45915, 409

15, 23515, 03014, 79314, 69114, 61314,590

14, 56714, 51414, 33214, 16414, 06614,100

Othercon-

sumergoods

paper l

(4)

(4)(4)(4)(4)(4)

(4)(4)(4)(4)

1,620

1,8271,9291,195

819791

8161,2902,1432,9013,706

4,7994,8806,1746,7796,751

7,6348,5108,6929,000

8,3208,1688,0498,0178,0928,164

8,1968,2218,2208,2298,2898,692

8,4958,2778,1798,1248,1588,190

8,1978,2548,3128,4118, 5289,000

Repairand

modern-zationioans 2

(4)

(4)(4)(4)(4)(4)

(4)(4)(4)(4)298

371376255130119

182405718853898

1,0161,0851,3851,6101,616

1,6891,8952,0912,100

1,8801,8751,8801,8941,9281,956

1,9812,0242,0492,0782,0952,091

2,0692,0412,0192,0172,0382,048

2,0612,0912,1072,1282,1462,100

Per-sonalloans

(4)

(4)(4)(4)(4)(4)

(4)(4)(4)(4)

1,088

1, 2451,322

974832869

1,0091,4961,9102,2242,431

2,8143,3574,1114,7815,392

6,1636,9637,9038,500

6,9777,0327,0897,2077,2967,396

7,5087,6077,6367,6727,7237,903

7,9147,9307,9498,0568,1018,180

8,2498,3068,3288,3498,3868,500

Noninstalment credit

Total

3,293

3,0802,5532,0461,8942,033

2,2172,5122,6742,6472,719

2,8243,0872,8172,7652,935

3,2034,2124,8755,4025,715

6,6927,3237,9988,2388,724

9,71210, 27010, 67911, 100

9,7079,3839,3279,5709,9159,894

9,6719,7509,7669,6789,872

10, 679

10, 1919,7399,5609,729

10, 07510, 071

9,8499,963

10, 06510, 11210, 33811,100

Chargeac-

counts

1,602

1,4761,2651,020

9901,102

1,1831,3001,3361,3621,414

1,4711,6451,4441,4401,517

1,6122,0762,3532,6732,795

3,2913,6054,0114,1244,308

4,5794,7354,8295,000

4,1713,7143,5603,7723,9433,987

3,9273,9683,9664,0444,1474,829

4,2903,7543,5793,7724,0104,012

3,9273,9564,0334,1914,2975,000

Other 3

1,691

1,6041,2881,026

904931

1,0341,2121,3381,2851,305

1,3531,4421,3731,3251,418

1,5912,1362,5222,7292,920

3,4013,7183,9874,1144,416

5,1335,5355, 8506,100

5,5365,6695,7675,7985,9725,907

5,7445,7825,8005,6345,7255,850

5,9015,9855,9815,9576,0656,059

5,9226,0076,0325,9216,0416,100

1 Includes all consumer credit extended for the purpose of purchasing automobiles and other consumergoods and secured by the items purchased.

2 Includes only such loans held by financial institutions; those held by retail outlets are included in "otherconsumer goods paper."

3 Single-payment loans and service credit.4 Not available.5 Preliminary estimates by Council of Economic Advisers.

Source: Board of Governors of the Federal Reserve System (except as noted).


TABLE D—45-—Instalment credit extended and repaid, 1946-58


Period

1946194719481949 .195019511952195319541955195619571958 i

1957; JanuaryFebruaryMarchAprilMayJune.JulyAugustSeptember. _ _OctoberNovemberDecember

1958: JanuaryFebruaryMarchAprilMayJuneJulyAugust -_ .September. _ .October . .NovemberDecember i _ _ _

1957: January. __FebruaryMarchApril.MayJuneJulyAugust.. _SeptemberOctoberNovemberDecember

1958: January-FebruaryMarchAprilMayJune.JulyAugustSeptember,...OctoberNovemberDecember L _ .

Total

Ex-tended

8,49512, 71315,58518, 10821,55823, 57629, 51431, 55831, 05139, 03940,06342, 42640,400

Re-paid

6,78510, 19013, 28415, 51418, 44522, 98525, 40527, 95630, 48833, 64937, 19440, 15840,800

Automobilepaper

Ex-tended

1,9693,6925,2176,9678, 5308,956

11, 76412, 98111, 80716, 74515, 56316, 54514, 100

Re-paid

1,4432,7494,1235,4307,0119,058

10,00310, 87911,83313, 08214, 57615, 59515,400

Other consumergoods paper

Ex-tended

3,0774,4985,3835,8657,1507,4859,1869,2279,117

10,63411, 59011, 62611,800

Re-paid

2,6033,6454,6255,0606,0577,4047,8928,6229,1459,751

10, 71411,44411, 500

Repair andmodernization

loans

Ex-tended

423704714734835841

1,2171,3441,2611,3881.5681,6621,600

Re-paid

200391579689717772917

1,1191,2551,3151,3621,4661,600

Personalloans

Ex-tended

3,0263,8194,2714,5425,0436,2947,3478,0068,866

10, 27211, 34212, 59312, 900

Re-paid

2,5393,4053,9574,3354,6605,7516,5937,3368,2559,501

10,54211,65312,300

Unadjusted

3,1052,9723,3513,5903,7603,6613,8453,6933,3863,5473,4284,0883,0882,7423,1563,3353,3713,4773, 4833,3853,2973,4753,3384,200

3,3513,0593,3183,3353,3773,2243,4853,3723,2763,4563,3463,5593,4703,1773,4943,3873,3493,3793,4173,2943,3833,5023,2643,600

1,253,207,373,457,503,482,550,454,350,393,231,292,176,014,094,211,199,257,281,193,105,173,091,300

1,3081,1921,2831,3021,3181,2451,3591,300,293,376,277,342,350,219,331,313,277,280,304,246,287,341,189,250

816758848898

1,027988

1,0081,012

928978

1,0141,351

794714901876

1,000973956976993

1,0751,0541,400

1,006910967930952916976987929969954948991932999931966941949919935976937

1,000

10410912113216014415616415215513812710795

111131144146146151158159141150

119114116118126116131121127126121131129123133133123136133121142138123150

932898

1,0091,1031,0701,0471,1311,063

9561,0211,0451,3181,011

9191,0501,1171,0281,1011,1001,0651,0411,0681,0521,350

918843952985981947

1,019964927985994

1,1381,000

9031,0311,010

9831,022,031,008,019,047,015,200

Seasonally adjusted

3,4983,5033,4283,4613, 5513,5343,6083, 5803,5423,5333,5533,6353,4813,2213,1843,2623,2433,2593,3303,4153,3243,4503,5913,600

3,2983,2593,2623,2843,3173,3453,3813,3563,3983,3693,3933,4963,4153,3893,3843,3933,3393,3933,3673,4043,3773,4193,4493,400

1,4141,3981,3661,3621,3521,3471,3711,3431,3771,4241,3841,4071,3311,1711,0671,1511,1001,1011,1591,1481,0881,2051,2821,300

1,3141,2831,2701,2911,3031,2921,3061,2811,3031,3121,2811,3591,3571,3121,2941,3281,2851,2791,2781,2771,2471,2821,2441,200

952956932932

1,006995

1,0101,018

974913958980933896978916986961961

1,013999998

1,0341,050

942934939910919953968982979958980980929960964920941962948948950964

1,0021,000

134138133133147138142150140139134134137122122132134135135142142143142150

117121115117125122129121128122118131126130130135124138132124139134124150

9981,011

9971,0341,0461,0541,0851,0691,0511,0571,0771,1141,0801,0321,0171,0631,0231,0621,0751,1121,0951,1041,1331,100

925921938966970978978972988977

1,0141,0261,003

987996

1,010989

1,0141,0091,0551,0411,0391,0791,050

1 Preliminary; December by Council of Economic Advisers.Source: Board of Governors of the Federal Reserve System (except as noted).

192


TABLE D-46.—Mortgage debt outstanding, by type of property and of financing, 1939-58


End of period

1939

19401941194219431944 _ _

19451946194719481949

19501951195219531954

1955195619571958 3

1956- First quarterSecond quarter _Third quarterFourth quarter

1957: First quarterSecond quarterThird quarter-Fourth quarter

1958- First quarter 3

Second quarter 3

Third quarter 3

Fourth quarter 3

Allprop-erties

35.5

36.537.636.735.334.7

35.541.848.956.262.7

72.882.391.4

101.3113.8

130.0144.5156.6171.2

133.5137.5141.3144.5

147.3150.4153.7156.6

159.1162.6166.7171.2

Nonfarm properties

Total

28.9

30.031.230.829.929.7

30.836.943.950.957.1

66.775.684.293.6

105.5

120.9134.6146.1160.0

124.1127.9131.5134.6

137.2140.1143.3146.1

148.5151.7155,7160.0

1- to 4-family houses

Total

16.3

17.418.418.217.817.9

18.623.028.233.337.6

45.251.758.566.175.7

88.299.0

107.6118.0

90. 793.796.699.0

101.1103.4105.7107.6

109.3111.7114.8118.0

Government under-written

Total

1.8

2.33.03.74.14.2

4.36.19.3

12.515.0

18.922.925.428.132.1

38.943.947.250.2

40.241.342.543.9

45.145.946.547.2

47.748.349.250.2

FHAin-

sured

1.8

2.33.03.74.14.2

4.13.73.85.36.9

8.69.7

10.812.012.8

14.315.516.519.7

14.715.015.215.5

15.715.916.116.5

17.117.718.619.7

VAguar-

anteed

0.22.45.57.28.1

10.313.214.616.119.3

24.628.430.730.5

25.526.327.328.4

29.430.030.430.7

30.630.630.630.5

Con-ven-

tional *

14.5

15.115.414.513.713.7

14.316.918.920.822.6

26.328.833.138.043.6

49.355.160.467.8

50.552.454.155.1

55.957.559.260.4

61.663.465.667.8

Multi-family

andcom-

mercialprop-

erties 1 2

12.5

12.612.912.512.111.8

12.213.815.717.619.5

21.623.925.727.529.8

32.735.638.542.0

33.434.234.935.6

36.236.737.538.5

39.140.040.942.0

Farmprop-erties

6.6

6.56.46.05.44.9

4.84.95.15.35.6

6.16.77.37.88.3

9.19.9

10.511.2

9.49.69.89.9

10.110.310.410.5

10. 610.911.111.2

1 Derived figures.2 Includes negligible amount of farm loans held by savings and loan associations.3 Preliminary; fourth quarter by Council of Economic Advisers.

Source: Board of Governors of the Federal Reserve System, estimated and compiled from data suppliedby various Government and private organizations (except as noted).

193


TABLE D-47 .—Net public and private debt, 1929-58 *


End ofperiod 2

1929

19301931193219331934

1935193619371938 . .1939

19401941194219431944

19451946194719481949

19501951195219531954

1955195619571958s

Total

190.9

191.0181.9174.6168.5171.4

174.7180.3182.0179.6183.2

189.9211.6259.0313.6370.8

406.3397.4417.4433.6448.4

490.3524.0555.2586.4611.8

672.2699.8725.8757.9

Fed-eralGov-ern-

ment

16.5

16.518.521.324.330.4

34.437.739.240.542.6

44.856.3

101.7154.4211.9

252.7229.7223.3216.5218.6

218.7218.5222.9228.1230.2

231.5225.4224.4232.5

Stateandlocalgov-ern-

ment 2

13.2

14.115.516.616.715.9

16.016.216.116.016.3

16.516.315.814.914.1

13.713.614.416.218.1

20.723.325.828.633.4

38.442.746.750.9

Private

Total

161.2

160.4147.9136.7127.5125.1

124.2126.4126.7123.1124.3

128.6139.0141.5144.3144.8

139.9154.1179.7200.9211.7

250.9282.2306.5329.7348.2

402.3431.7454.7474.5

Corporate

Total

88.9

89.383.580.076.975.5

74.876.175.873.373.5

75.683.491.695.594.1

85.393.5

108.9117.8118.0

142.1162.5171.0179.5182.8

212.1224.2232.8236.0

Long-term

47.3

51.150.349.247.944.6

43.642.543.544.844.4

43.743.642.741.039.8

38.341.346.152.556.5

60.166.673.378.382.9

90.097.4

106.0113.5

Short-term

41.6

38.233.230.829.130.9

31.233.532.328.429.2

31.939.849.054.554.3

47.052.262.865.361.5

81.995.997.7

101.2100.0

122.2126.7126.8122.5

Individual and noncorporate

Total

72.3

71.164.456.750.649.6

49.450.350.949.850.8

53.055.649.948.850.7

54.660.670.883.193.7

108.8119.7135.5150.2165.4

190.2207.5221.9238.5

Farm 3

12.2

11.811.110.19.18.9

9.08.68.69.08.8

9.19.28.98.27.7

7.27.68.6

10.811.9

12.213.615.116.917.6

18.819.520.322.0

Nonfarm

Total

60.1

59.453.346.641.540.7

40.441.742.340.942.0

43.946.441.040.543.0

47.453.062.272.381.8

96.6106.1120.3133.3147.8

171.4188.0201.7216.5

Mort-gage

31.2

32.030.929.026.325.5

24.724.424.324.525.0

26.027.226.826.226.1

27.032.538.745.150.6

59.467.475.283.894.7

108.8121.2131.7144.3

Com-mer-cialand

finan-cial*

22.4

21.617.614.011.711.2

10.811.211.310.19.8

9.510.08.19.5

11.8

14.812.111.912.913.9

15.816.117.818.420.8

24.024.625.227.5

Con-sumer

6.4

5.84.83.63.53.9

4.96.16.76.37.2

8.39.26.04.95.1

5.78.4

11.614.417.3

21.422.627.431.232.3

38.742.144.844.7

1 Net public and private debt outstanding is a comprehensive aggregate of the indebtedness of borrowersafter elimination of certain types of duplicating governmental and corporate debt. For a further explana-tion of the concept, se£ Survey of Current Business, October 1950.

2 Data for State and local government debt are for June 30 of each year.3 Farm mortgages and farm production loans. Farmers' financial and consumer debt is included in the

nonfarm categories.* Financial debt is debt owed to banks for purchasing or carrying securities, customers' debt to brokers,

and debt owed to life insurance companies by policyholders.« Preliminary estimates by Council of Economic Advisers.


Sources: Department of Agriculture, Department of Commerce, Treasury Department, Board of Gov-ernors of the Federal Reserve System, Federal Savings and Loan Insurance Corporation, and InterstateCommerce Commission (except as noted).

194


GOVERNMENT FINANCE

TABLE D-48.—U. S. Government debt, by kind of obligation, 1929-58


End of period

1929

19301931193219331934

19351936 ._193719381939

19401941 . -194219431944

1945194619471948 ---1949

195019511952 .1953195419551956195719581957: January _ _ _ _

FebruaryMarchAprilMayJune. _ .

JulyAugust..SeptemberOctoberNovemberDecember _

1958: JanuaryFebruary.. _ . .MarchAprilMay -_June .


Grosspublic

debt andguar-

anteedissues !

16.3

16.017.820.824.031.5

35.139.141.944.447.650.964.3

112.5170.1232.1

278.7259.5257.0252.9257.2

256.7259.5267.4275.2278.8280.8276.7275.0

7 283. 0

276.3276.4275.1274.1275.3270.6272.6274.0274.5274 2274.9275.0274.7274.8272.7275.2275.7276.4

275.6278.6276.8280.3283.2

7 283. 0

Interest -bearing public debt

Marketable publicissues

Short-term

issues 2

3.3

2.92.85.97.5

11.1

14.212.512.59.87.7

7.58.0

27.047.169.978.257.147.745.950.2

58.365.668.777.376.081.379.582.192.2

79.680.079.179.179.574.977.979.481.080.881.982.182.578.175.278.378.375.775.881.681.986.489.692.2

Treasurybonds

11.311.313.513.414.715.4

14.319.520.524.026.9

28.033.449.367.991.6

120.4119.3117.9111.4104.8

94.076.979.877.281.881.980.882.183.4

80.880.880.880.880.880.880.880.880.881.481.482.182.186.387.787.787.690.990.587.685.785.785.783.4

Nonmarketable public issues

UnitedStates

savingsbonds

0.2.5

1.01.42.2

3.26.1

15.027.440.448.249.852.155.156.7

58.057.657.957.757.757.956.352.551.2

56.055.855.655.455.254.654.354.053.853.553.252.552.352.352.352.252.152.051.951.951.851.751.751.2

Treasurytax andsavingsnotes

2.56.48.69.88.25.75.44.67.6

8.67.55.86.04.5

(5)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(•)(6)(«)

(6)(6)(6)(«)(6)(6)

Invest-ment

bonds 3

1.01.01.01.0

13.013.412.912.712.311.610.39.0

11.611.511.411.311.211.111.010.910.710.510.310.310.210.19.89.79.79.69.59.39.29.19.19.0

Specialissues 4

0.6

.8

.4

.4

.4

.6

.7

.62.23.24.2

5.47.09.0

12.716.320.024.629.031.733.9

33.735.939.241.242.643.945.645.844.845.345.545.645.246.146.846.346.746.246.146.045.845.546.045.845.446.146.2

45.946.346.045.445.144.8

1 Total includes non-interest-bearing debt, fully guaranteed securities (except those held by the Treas-ury), Postal Savings bonds, prewar bonds, adjusted service bonds, depositary bonds, and armed forcesleave bonds, not shown separately. Not all of total shown is subject to statutory debt limitation.

2 Bills, certificates of indebtedness, and notes.3 Series A bonds and, beginning in April 1951, Series B convertible bonds.4 Issued to U. S. Government investment accounts. These accounts also held $9.7 billion of public

marketable and nonmarketable issues on December 31, 1958.5 Less than $50 million.6 The last series of treasury savings notes matured in April 1956.7 Of this amount, $282.6 billion was subject to the statutory debt limitation of $288 billion.

Source: Treasury Department.

195


TABLE D--49 .—Estimated ownership of Federal obligations, 1939-58

[Par values 1, billions of dollars]

End of period

1939194019411942194319441945194619471948194919501951195219531954195519561957195881957: January

FebruaryMarchAprilMayJune.JulyAugustSeptemberOctoberNovemberDecember

1958: JanuaryFebruaryMarchAprilMayJune _ _JulyAugustSeptemberOctoberNovember 8...December s _ _ _

Gross public debt and guaranteed issues 2

Total

47.650.964.3

112.5170.1232.1278.7259. 5257.0252.9257.2256.7259.5267.4275.2278.8280.8276.7275.0283.0276.3276.4275.1274.1275.3270.6272.6274.0274.5274.2274.9275.0274.7274.8272.7275. 2275.7276.4275.6278.6276.8280.3283.2283.0

Heldby U.S.

Gov-ern-

mentinvest-ment

ac-counts

6.57.69.5

12.216.921.727.030.934.437.339.439.242.345.948.349.651.754.055.254.553.954.154.253.754.955.655.255.855.455.455.355.255.155.455.455.255.855.955.656.055.655.154.854.5

Held by others

Total

41.143.354.7

100.2153.2210.5251.6228.6222.6215.5217.8217. 5217.2221.6226.9229.2229.1222.7219.8228.5222.4222.3221.0220.4220.5215.1217.4218.2219.1218.7219.6219.8219.6219.4217.4220.0220.0220.5220.0222.6221.2225.3228.4228.5

FederalReserveBanks

2.52.22.36.2

11.518.824.323.322.623.318.920.823.824.725.924.924.824.924.226.423.422.923.123.223.123.023.423.523.323.323.724.223.323.223.623.724.225.424.525.325.025.426.226.4

Com-mercialbanks 3

15.917.321.441.159.977.790.874.568.762.566.861.861.663.463.769.262.059.359.167.058.357.758.158.057.755.856.856.658.358.158.259.158.659.459.463.263.664.965.066.465.566.767.767.0

Mutualsavingsbanksand in-surance

com-panies

9.410.111.915.821.228.034.736.735.932.731.529.626.325.525.023.822.820.9IP. 619.520.920.820.620.520.420.220.220.120.120.019.719.619.619.519.419.319.119.119.219.419.419.419.519.5

Othercorpor-ations 4

2.22.04.0

10.116.421.422.215.314.114.816.819.720.719.921.519.223.018.216.517.319.920.617.717.618.215.416.016.515.715.916.516.517.317.215.414.614.713.313.914.614.315.916.917.3

Stateandlocal

govern-ments s

0.4.5.7

1.02.14.36.56.37.37.98.18.89.6

11.112.714.415.116.117.017.216.216.316.616.816.816.916.917.117.217.217.317.017.317.317.317.117.016.917.017.017.017.217.217.2

Individ-uals 6

10.110.613.623.737.653.364.164.265.765.566.366.364.665.164.963.665.867.366.864.967.367.668.468.267.967.867.968.468.567.867.666.867.166.866.966.466.165.765.365.064.864.964.964.9

Miscel-laneousinves-tors 7

0.7.7.9

2.34.47.09.18.18.48.99.4

10.510.611.713.213.915.616.116.516.416.416.416.416.116.416.016.215.915.916.316.516.516.215.915.415.715.415.215.014.915.315.816.016.4

1 United States savings bonds, series A-F and J, are included at current redemption value.2 Excludes guaranteed securities held by the Treasury. Not all of total shown is subject to statutory

debt limitation.3 Includes commercial banks, trust companies, and stock savings banks in the United States and in

Territories and possessions; figures exclude securities held in trust departments. Since the estimates in thistable are on the basis of par values and include holdings of banks in United States Territories and possessions,they do not agree with the estimates in Table D-41, which are based on book values and relate only to bankswithin the continental United States.

4 Exclusive of banks and insurance companies.s Includes trust, sinking, and investment funds of State and local governments and their agencies, and

of Territories and possessions.6 Includes partnerships and personal trust accounts.7 Includes savings and loan associations, nonprofit institutions, corporate pension trust funds, dealers

and brokers, and investments of foreign balances and international accounts in this country. Beginningwith December 1946, the foreign accounts include investments by the International Bank for Reconstruc-tion and Development and the International Monetary Fund in special non-interest-bearing notes issuedby the U. S. Government. Beginning with June 30, 1947, includes holdings of Federal land banks.

8 Preliminary estimates by Council of Economic Advisers.NOTE.—Detail will not necessarily add to totals because of rounding.Source: Treasury Department (except as noted).

196


TABLE D-50.—Federal budget receipts and expenditures and the public debt, 1929-60


Period

Fiscal year:1929 _

193019311932 ._19331934

193519361937 _1938 - -1939

1940194119421943 - - . -1944

1945 _ -1946 _ .194719481949

1950. . _ _-.19511952.19531954 _

1955 . .19561957 -195819593

I9603--

Calendar year:1946 _194719481949

19501951]95219531954 .

195519561957 -. - .1958

Net budgetreceipts 1

3 861

4,0583 1161 9242 0213 064

3 7304 0694 9795,6154 996

5 1447 10312 55521, 98743,635

44, 47539, 77139 78641 48837, 696

36, 49547, 56861, 39164,82564, 655

60,39068 16571,02969 11768,000

77, 100

38, 56840, 38940, 86437, 514

37, 30652 97964,84063, 84161,171

63, 35870 99472, 284

4 68, 700

Budget ex-penditures

3 127

3 3203 5774 6594 6236 694

6 5218 4937 7566 7928 858

9 06213 26234 04679 40795, 059

98 41660,44839 03233 06939 507

39, 61744 05865, 40874 27467, 772

64, 57066 54069, 43371 93680,871

77, 030

41, 08037 95535, 62341, 106

37,72856 33770,68272 99764, 854

66, 12967 21671, 692

4 75, 800

Surplus ordeficit (-)

734

738462

—2 735—2 602—3 630

2 791—4 425—2 777—1 177—3 862

—3 918—6 159—21 490— 57 420—51 423

—53 941—20 676

7548 419

— 1 811

-3, 1223 510

—4,017—9 449—3, 117

—4, 1801 6261,596

—2 819-12,871

70

-2, 5122 4345,241

—3 592

-422—3 358—5, 842—9, 157-3, 683

—2 7713 779592

4 _7; 100

Public debtat end ofyear 2

16 931

16 18516 80119 48722* 53927 053

28 70133 77936 42537 16540 440

42 96848 96172 422136 696201 003

258 682269 422258 286252 292252 770

257, 357255 222259 105266 071271 260

274 374272 751270 527276 343285,000

285,000

259, 149256 900252 800257 130

256, 708259 419267, 391275 168278, 750

280 769276 628274, 898282, 922

1 Gross receipts less refunds of receipts and transfers of tax receipts to the Federal old-age and survivorsinsurance trust fund, the Federal disability insurance trust fund, the railroad retirement account, and thehighway trust fund.

2 Excludes guaranteed obligations. The change in the public debt from year to year reflects not onlythe budget surplus or deficit but also changes in the Treasury's cash balances, the effect of certain trust fundtransactions, and direct borrowing from the public by certain Government enterprises.

3 Estimate.« Estimated by Council of Economic Advisers from data available as of January 15, 1959. May therefore

differ from figures in Treasury Department monthly statement of receipts and expenditures to be releasedabout January 20, 1959.


Sources: Treasury Department and Bureau of the Budget (except as noted).

489916 O—59197


TABLE D-51.—Federal budget receipts by source and expenditures by function, fiscal years 7946-60


Fiscalyear

1946194719481949

19501951195219531954

195519561957195819593...

19603,. .

Budget receipts by source

Total

39, 77139, 78641,48837, 696

36, 49547,56861, 39164,82564,655

60,39068, 16571, 02969, 11768,000

77, 100

Indi-vidualincometaxes

16, 15717,83519, 30515, 548

15, 74521,64327, 91330, 10829,542

28, 74732,18835, 62034, 72436,900

40,700

Corpo-rationincometaxes

11,8338,5699,678

11, 195

10, 44814, 10621,22521, 23821, 101

17, 86120,88021, 16720,07417,000

21, 448

Excisetaxes

6,9997,2077,3567,502

7,5498,6488,8519,8689,945

9,1319,9299, 0558,6128,467

8,945

Allother

re-ceipts i

4,7826,1755,1503,451

2,7523,1713,4023,6104,067

4,6505,1695,1875,7085,633

6,007

Budget expenditures by function

Total

60,44839, 03233,06939,507

39, 61744, 05865, 40874, 27467, 772

64,57066,54069,43371, 93680, 871

77,030

Majorna-

tionalsecurity

43, 20714, 37211,77112,907

13,00922.44443, 97650,36346,904

40, 62640,64143, 27044, 14246, 120

45, 805

Veter-ans'serv-icesand

bene-fits

4,4167,3816,6546,726

6,6465,3424,8634,2984,256

4,4574,7564,7935,0265,198

5,088

Agri-milcul-tureandagri-

cultu-ral re-sources

7471,243

5752,512

2,783650

1,0452,9362,557

4,3894,8684,5264,3896,775

5,996

Inter-est

4,8165,0125,2485, 445

5.8175,7145,9346,5836,470

6,4386,8467,3087,6897,601

8,096

Allother

expend-itures 2

7,26211,0228,820

11,917

11,3619,9079,590

10,0947,584

8,6619,4289,536

10, 68915, 177

12, 046

Budgetsurplusor defi-cit (-)

-20, 676754

8,419-1,811

-3, 1223,510

-4,017-9, 449-3, 117

—4,1801,6261,596

-2, 819-12,871

70

1 Includes employment taxes, estate and gift taxes, customs revenues, and miscellaneous receipts.2 Includes expenditures for international affairs and finance (including defense support under the mutual

security program), labor and welfare, natural resources, commerce and housing, and general government;also includes adjustment to daily Treasury statement (for actuals) and allowance for contingencies (forestimates).

3 Estimate.



198


TABLE D-52.—Government cash receipts from and payments to the public, 7946-60

LBillions of dollars]

Period

Calendar year:1946194719481949

195019511952.. . .19531954

195519561957 .1958 <

Fiscal year:19531954

19551956195719581959 8

I960 8

Total

Cashre-

ceipts

52.957.460.057.9

60.479.193.193.493.3

98.4110.2116.3115.1

93.995.6

93.5105.8113.1114.4

Cashpay-

ments

50.950.751.859.8

61.178.394.799.395.2

100.2105. 2116.3124.2

99.196.1

97.5101.7111.6117.7

Excessof re-ceiptsor ofpay-

ments(-)

2.06.78.2

-1.8

-.6.9

-1.6-5.9-2.0

-1.84.9

(3)-9.1

-5.2-.5

-4.04.11.5

-3.3

Federal 1

Cashre-

ceipts

41.444.344.941.3

42.459.371.470.168.6

71.480.384.581.7

71.571.6

67.877.182.181.981.7

93.5

Cashpay-

ments

41.438.636.942.6

42.058.073.176.369.7

72.274.883.388.8

76.871.9

70.572.680.083.494.9

92.9


merits(-)

(3)5.78.0

-1.3

.41.2

-1.6-6.1-1.1

-.75.51.2

-7.1

-5.3-.2

-2.74.52.1

-1.5-13.2

.6

State and local 2

Cashre-

ceipts

11.413.115.116.6

18.019.921.723.224.7

26.929.831.833.4

22.424.0

25.728.731.032.5

Cashpay-

ments

9.512.114.917.1

19.120.221.623.025.6

28.030.433.035.4

22.324.2

27.029.131.634.3


ments(-)

1.91.0.2

-.5

-1.1-.4

.1

.3-.9

-1.1-.6

-1.1-2.0

.1-.2

-1.3-.4-.6

-1.8

1 For derivation of Federal cash receipts and payments, see Budget of the United States Government for theFiscal Year ending June SO, 1960, and Table D-54.

2 Estimated by Council of Economic Advisers from receipts and expenditures in the national incomeaccounts. Cash receipts consist of personal tax and nontax receipts, indirect business tax and nontaxaccruals, and corporate tax accruals adjusted to a collection basis. Cash payments are total expendituresless Federal grants-in-aid and less contributions for social insurance. (Federal grants-in-aid are thereforeexcluded from State and local receipts and payments and included only in Federal payments.) SeeTable D-53.

a Less than $50 million.4 Preliminary.« Estimate.NOTE.—Detail will not necessarily add to totals because of rounding.Sources: Treasury Department, Bureau of the Budget, Department of Commerce, and Council of Eco-

nomic Advisers.

199


TABLE D-53.—Government receipts and expenditures as shown in the national income accounts,1955-58*

[Calendar years, billions of dollars]

Receipt or expenditure

Total government

Receipts - -ExpendituresExcess of receipts or of

expenditures (— )

Federal Government

ReceiptsPersonal tax and non-

tax receiptsCorporate profits tax

accruals ...Indirect business tax

and nontax accruals.Contributions for so-

cial insurance

E xpendituresPurchases of goods and

services -Transfer payments

To persons .- ---Foreign (net)

Qrants-in-aid to Stateand local govern-ments

Net interest paidSubsidies less current

surplus of Govern-ment enterprises

Excess of receipts or ofexpenditures (— )

State and local govern-ments:

Receipts ..Personal tax and non-

tax receiptsCorporate profits tax

accrualsIndirect business tax

and nontax accruals-Contributions for so-

cial insurance -Federal grants-in-aid..

ExpendituresPurchases of goods and

servicesTransfer paymentsNet interest paidLess: Current surplus

of Government en-terprises _. .- .-

Excess of receipts or ofexpenditures (— )

Year

101.598.6

2.9

72 8

31 5

20.9

11.0

9.3

68 9

45.314.012.51 5

3 04.9

1.6

3.8

31.7

4.2

1 0

21.8

1.73.0

32 7

30.33.5.5

1.6

-1.0

1955

Firsthalf 2

98 397.6

.7

70 5

31 0

19.6

10.9

9 0

68 3

44.914.112 41 7

3.04.9

1.5

2.2

30.8

4.2

9

21.2

1.63.0

32.3

29.83.6.4

1.6

-1.4

Sec-ond

half a

104.499.4

5.0

75.0

32 1

22.2

11.2

9.6

69 4

45.713.912.61 3

3 25.0

1.8

5.6

32.6

4.3

1 0

22.5

1.73.2

33 2

30.83.5.5

1.6

-.5

Year

110.3104.1

6.3

78.7

35 2

21.4

11.6

10.5

71 9

45.714.913.51 4

3.35.2

2.8

6.8

34.9

4.8

1 0

24.0

1.83.3

35 5

33.13.6.5

1.7

-.6

1956

Firsthalf 2

108.8101.8

7.0

77.7

34 8

21.4

11.2

10 2

70 2

44.614.613.21 4

3.15.1

2.7

7.5

34.2

4.8

1 0

23.6

1.83.1

34 7

32.43.6.5

1.7

-.4

Sec-ond

half 2

112.0106.4

5.6

79.8

35 6

21.4

12.0

10 8

73 6

46.815.213.81 4

3.45.4

2.8

6.2

35.6

5.0

1 0

24.4

1.83.4

36 2

33.93.6.5

1.8

-.7

Year

116.2114.5

1.7

82.5

37 4

20.7

12.2

12.2

79 6

49.417.315.91 5

4.15.6

3.1

2.9

37.8

5.4

1 0

25.4

2.04.1

39 0

36.34.0.5

1.8

-1.2

1957

Firsthalf 2

116.4113.7

2.7

83.0

37 2

21.3

12.3

12.2

78 9

49.416.915.31 6

3.85.6

3.2

4.0

37.2

5.2

1 0

25.2

1.93.8

38 6

36.03.8.5

1.8

-1.4

Sec-ond

half 3

116.0115.8

.2

82.0

37 6

20.0

12.2

12.3

80.4

49.417.816.61.3

4.45.7

3.1

1.6

38.4

5.4

1 0

25.6

2.04.4

39.8

37.04.0.6

1.8

-1.4

Year

114.5124.5

-10.0

79.0

37.1

17.7

11.9

12.3

87 0

51.621.220.01.2

5.15.7

3.4

-8.1

40.6

5.8

.9

26.7

2.15.1

42.6

39.64.3.6

1.9

-1.9

19583

Firsthalf 2

110 8121.6

-10.8

76 1

36 6

15.5

12.0

12.1

84 4

50.220.519.31 2

4.65.7

3.4

-8.2

39.4

5.8

.7

26.2

2.14.6

41.8

38.84.3.6

1.8

-2.4

Sec-ond

ha l f*

118 1127.4

-9 4

81 8

37 7

19.8

11.8

12 4

89 8

53.022.020.81 2

5.75.6

3.4

-8.0

42.0

5.9

1 0

27.2

2.25.7

43.4

40.44.4.6

2.0

-1.4

1 These accounts, like the cash budget, include the transactions of the trust accounts. Unlike both theconventional budget and the cash statement, they exclude certain capital and lending transactions. Ingeneral, they do net use the cash basis for transactions with business. Instead, corporate profits taxes areincluded in receipts on an accrual instead of a cash basis; expenditures are timed with the delivery insteadof the payment for goods and services; and CCC guaranteed price-support crop loans financed by banks arecounted as expenditures when the loans are made, not when CCC redeems them.2 Seasonally adjusted annual rates.3 Preliminary; fourth quarter estimates by Council of Economic Advisers.

NOTE.—Federal grants-in-aid to State and local governments are reflected in Federal expenditures andState and local receipts and expenditures. Total government receipts and expenditures have been adjustedto eliminate this duplication.

Detail will not necessarily add to totals because of rounding.Source: Department of Commerce (except as noted).

20O


TABLE D-54.—Reconciliation of Federal Government receipts and expenditures in theconventional budget and the consolidated cash statement with receipts and expenditures in thenational income accounts, fiscal years 1956-58


Receipts or expenditures

RECEIPTS

Budget receiptsLess* Intragovernmental transactions _ _ . _

Receipts from exercise of monetary authority. - _Plus* Trust fund receiptsEquals: Federal receipts from the public (consolidated cash receipts) _ .Less: Adjustment for agency coverage:

District of Columbia revenues _ .Plus: Adjustments for netting and consolidation:

Federal Government contributions to:Employee retirement fundsVeterans' life insurance funds

Federal Government employee contributions to employeeretirement funds _- . . . _ ._ _

Interest dividends, and other earningsAdjustments for timing:

Excess of taxes included in national income accounts overcash collections:

PersonalCorporate profits -.. .Other

MiscellaneousLess: Adjustments for capital transactions:

Realization upon loans and investmentsProceeds from sale of government propertyRecoveries and refunds

Equals: Receipts — national income accounts. .._ _ _ . .

EXPENDITURES

Budget expenditures - - - - - -- _ _ _Less* Intragovernmental transactions

Accrued interest and other noncash expenditures (net)Plus* Trust fund expenditures

Government-sponsored enterprise expenditures (net) -- -.Equals: Federal payments to the public (consolidated cash expenditures) . _Less: Adjustment for agency coverage:

District of Columbia expenditures ._. _ ..Plus: Adjustments for netting and consolidation:

Federal Government contributions to:Employee retirement fundsVeterans' life insurance funds

Federal Government employee contributions to employeeretirement funds

Interest received and proceeds of government salesAdjustments for timing:

Accrued interest on savings bonds and Treasury billsCommodity Credit Corporation guaranteed non-recourse

loans (net change)Increase in clearing account . _ _ . _ .M i«?cellaneous

Less: Adjustments for capital transactions:Loans and other adjustments:

Federal National Mortgage Association secondary marketoperations

Other -- - - -Purchase of land and existing assetsTrust and deposit fund expenditures -Redemption of International Monetary Fund notes _ _ _

Equals* Expenditures — national income accounts

I

1956

68 22 7

o11 777. 1

2

21

.6— 4

2.7o

— 4

35

.676.4

66.52 7

99.4.3

72.6

.2

2.1

.6— .8

.4

4.3

-1.3

.11.1.0.8

-.269.7

^iscal yean

1957

71 03 2

014 482 1

2

5o75

_ 3122

344

81.7

69 43 2

— 813 0

.080.0

.2

5o

.7— 6

6

— .2-.8

— 1.0

1.0.4.0.5.7

76.5

1958

69 13 5

116 381 9

2

7o7g

_ i—2 3

1_ 2

335

78 3

71 93 5

516 1-.683.4

.2

7o

.7- 6

.3

.1

.6-1.0

.11.1.1

-.2.4

82.5

NOTE.—Detail will not necessarily add to totals because of rounding.Sources: Treasury Department, Bureau of the Budget, and Department of Commerce.

2OI


TABLE D—55.—^-State and local government revenues and expenditures, selected fiscal years, 1927—57


Fiscal year J

1927

1932193419361938

19401942194419461948

1950195219531954

19551956 .19575

Revenues by source 2

Total

7,271

7,2677,7138,5049,228

9,60910, 41710,90812, 35717, 251

20, 91125, 18127, 30729, 013

31, 07334, 66738, 310

Prop-ertytaxes

4,730

4,4874,0764,0934,440

4,4304,5374,6044,9866,126

7,3498,6529,3759,967

10, 73511, 74913, 097

Salesandgrossre-

ceiptstaxes

470

7521,0081,4841,794

1,9822,3512,2892,9864,442

5,1546,3576,9277,276

7,6438,6919,461

Indi-vidualincometaxes

70

7480

153218

224276342422543

788998

1,0651,127

1,2371,5381,767

Corpo-ration

netincometaxes

92

7949

113165

156272451447592

593846817778

744890984

Reve-nuefromFed-eralGov-ern-

ment

116

2321,0511,057

SCO

945858954855

1,861

2,4862,5662,8702,966

3,1313,3353,838

Allotherreve-nue 3

1,793

1,6431,4491,6041,811

1,8722,1232,2692,6613,685

4,5415,7636,2526,897

7,5848,4659,163

Expenditures by function 2

Total

7,210

7,7657,1817,6448,757

9,2299,1908,863

11, 02817,684

22, 78726, 09827, 91030, 701

33, 72436, 71140, 438

Edu-cation

2,235

2,3111,8312,1772,491

2,6382,5862,7933,3565,379

7,1778,3189,390

10, 557

11,90713, 22014,501

High-ways

1,809

1,7411,5091,4251,650

1,5731,4901,2001,6723, 036

3,8034,6504,9875,527

6,4526,9537,762

Publicwel-fare

151

444889827

1,069

1,1561,2251,1331,4092,099

2,9402,7882,9143,060

3,1683,1393,411

Allother 4

3,015

3,2692,9523,2153,547

3,8623,8893,7374,5917,170

8,86710, 34010, 61911,556

12, 19613, 39714,763

1 Fiscal years not the same for all governments.2 Excludes revenues or expenditures of publicly owned utilities and liquor stores, and of insurance-trust

activities. Intergovernmental receipts and payments between governments in these categories are alsoexcluded.

s Includes licenses and other taxes and charges and miscellaneous revenues.4 Includes expenditures for health, hospitals, police, local fire protection, natural resources, sanitation,

housing and community redevelopment, local recreation, general control, interest on general debt, andother and unallocable expenditures.

5 Preliminary.

NOTE.—Data are not available for intervening years.See Table D^47 for net debt of State and local governments.Detail will not necessarily add to totals because of rounding.

Source: Department of Commerce (Bureau of the Census).

202


CORPORATE PROFITS AND FINANCE

TABLE D-56.—Profits before and after taxes', all private corporations. 1929-58


Period

1929

193019311932 .19331934

19351936193719381939 . .

19401941 . _ . .194219431944

19451946 . -194719481949 .

19501951195219531954

19551956195719583 .

1956: First quarterSecond quarter _ . _ _ _ _ .Third quarterFourth quarter, _ _ . . . .

1957: First quarterSecond quarterThird quarterFourth quarter... _ _ _

1958: First quarter. ...Second quarterThird quarterFourth quarter 3 _ ... ...

Corporateprofitsbeforetaxes

9.6

3.3-.8

-3.0.2

1.7

3.15.76.23.36.4

9.317.020.924.623.3

19.022.629.533.026.4

40.642.236.738.334.1

44.945.543.4

<36.4

Corporatetax

liability 1

1.4

.8

.5

.4

.5

.7

1.01.41.51.01.4

2.87.6

11.414.112.9

10.79.1

11.312.510.4

17.922.419.520.217.2

21.822.421.618.5

Corporate profits after taxes

Total

8.3

2.5-1.3-3.4-.41.0

2.24.34.72.35.0

6.59.49.5

10.510.4

8.313.418.220.516.0

22.819.717.218.116.8

23.023.121.817.8

Dividendpayments

5.8

5.54.12.62.12.6

2.94.54.73.23.8

4.04.54.34.54.7

4.75.86.57.27.5

9.29.09.09.29.8

11.212.012.412.3

Undistrib-uted

profits

2.4

-3.0-5.4-6.0-2.4-1.6

-.7-.2

(2)-.91.2

2.44.95.26.05.7

3.67.7

11.713.38.5

13.610.78.38.97.0

11.811.09.45.6


46.244.844.346.7

46.143.544.239.9

31.732.037.9

M4.0

22.822.121.823.0

23.021.722.019.9

16.116.319.322.4

23.422.722.423.7

23.121.822.120.0

15.515.718.621.6

11.712.012.211.8

12.512.612.712.0

12.512.412.511.8

11.710.710.211.9

10.69.29.48.0

3.03.36.19.8

1 Federal and State corporate income and excess profits taxes.2 $48 million.3 Preliminary; fourth quarter by Council of Economic Advisers.4 Provisional.NOTE.—No allowance has been made for inventory valuation adjustment. See Table D-9 for profits

before taxes and inventory valuation adjustment.Series revised beginning 1946. For details, see U. S. Income and Output, A Supplement to the Survey of

Current Business, 1959.Detail will not necessarily add to totals because of rounding.


203


TABLE D-57.—Relation of profits before and after taxes to stockholders' equity and to sales,private manufacturing corporations, by asset size class, 1956-58

[Thousands of dollars}

Period

1956:First quarterSecond quarter, _ _Third quarterFourth quarter...

1957:First quarterSecond quarter. _.Third quarterFourth quarter...

1958:First quarterSecond quarter. _.Third quarter

1956:First quarterSecond quarterThird quarterFourth quarter. . .

1957:First quarterSecond quarter. _ _Third quarterFourth quarter...

1958:First quarter _Second quarter, _.Third quarter

All assetsizes Under 250 250-999 1,000-4,999 5,000-99,999 100,000 and

over

Ratio of pro fits (annual rate) to stockholders' equity— percent

Beforetaxes

23.824.220.222.3

22.521.619.116.8

12.913.915.9

Aftertaxes

12.513.011.012.6

11.911.610.59.8

6.87.89.0

Beforetaxes

17.324.025.213.0

15.619.418.25.5

1.59.2

16.7

Aftertaxes

10.315.615.35.8

8.411.111.0

.7

-3.04.7

10.3

Beforetaxes

18.922.123.012.8

15.719.220.47.4

7.612.416.3

Aftertaxes

9.511.511.75.8

7.510.010.12.4

2.15.78.9

Beforetaxes

21.421.521.418.9

18.819.718.712.2

8.913.016.8

Aftertaxes

10.610.410.79.1

8.99.69.15.4

2.95.98.0

Beforetaxes

22.824.122.422.4

20.821.420.016.6

12.914.317.0

Aftertaxes

11.212.011.111.4

10.110.610.08.6

6.17.18.5

Beforetaxes

25.424.918.624.0

24.522.218.818.7

14.314.115.3

Aftertaxes

13.713.910.814.5

13.612.410.911.8

8.48.69.3

Profits per dollar of sales— cents

Beforetaxes

10.210.39.09.3

9.79.48.57.6

6.46.87.7

Aftertaxes

5.35.54.95.2

5.15.04.74.4

3.43.84.4

Beforetaxes

3.34.64.92.4

3.13.73.51.0

.31.93.3

Aftertaxes

1.93.03.01.1

1.72.12.1.1

-.6.9

2.0

Beforetaxes

4.65.25.32.9

3.74.54.71.8

1.92.93.8

Aftertaxes

2.32.72.71.3

1.82.32.3.6

.51.42.1

Beforetaxes

6.96.96.95.9

6.36.36.03.9

3.14.45.4

Aftertaxes

3.43.33.52.9

3.03.12.91.7

1.02.02.6

Beforetaxes

9.810.19.79.4

9.09.18.87.4

6.46.98.0

Aftertaxes

4.85.04.84.8

4.44.54.43.9

3.03.44.0

Beforetaxes

13.112.810.511.9

12.411.610.310.2

8.78.69.4

Aftertaxes

7.07.16.17.2

6.96.56.06.5

5.15.25.7

NOTE.—Data on a comparable basis are not available for earlier periods. For details concerning compila-tion of the series, see Quarterly Financial Reports for U. S. Manufacturing Corporations, Federal TradeCommission and Securities and Exchange Commission.

Sources: Federal Trade Commission and Securities and Exchange Commission.

204


TABLE D-58.—Relation of profits after taxes to stockholders' equity and to sales, private manu-facturing corporations, by industry group, 1956-58

Period

1956:First quarterSecond quarter..Third quarter.--Fourth quarter..

1957:First quarterSecond quarter..Third quarter. ..Fourth quarter _.

1958:First quarterSecond quarter _-Third quarter. ._

1956:First quarterSecond quarter ..Third quarter. _ .Fourth quarter..

1957:First quarterSecond quarter. .Third quarter. ..Fourth quarter..

1958:First quarterSecond quarter. .Third quarter. ..

Allpri-vateman-ufac-tur-ingcor-

pora-tions

Durable goods industries

Lum-berandwoodprod-ucts(ex-cept

furni-ture)

Fur-nitureandfix-

tures

Stone,clay,andglassprod-ucts

Pri-maryironandsteelin-

dus-tries

Pri-marynon-fer-rous

metalin-

dus-tries

Fab-ri-

catedmetalprod-ucts

Ma-chin-ery(ex-ceptelec-

trical)

Elec-trical

ma-chin-ery,

equip-ment,andsup-plies

Mo-tor

vehi-clesand

equip-ment

Othertrans-porta-tion

equip-ment

In-stru-

mentsandre-

latedprod-ucts

Mis-cella-neousman-ufac-tur-ing(in-

clud-ingord-

nance)

Ratio of profits after Federal taxes (annual rate) to stockholders' equity — percent

12.513.011.012.6

11.911.610.59.8

6.87.89.0

9.111.09.05.6

2.06.26.54.1

.23.1

11.0

10.711.413.011.2

7.39.29.77.8

2.03.48.7

12.617.215.913.6

10.013.713.811.9

4.011.114.9

14.715.16.0

15.1

13.813.09.98.9

5.36.56.5

19.918.013.914.1

12.49.78.17.1

5.74.65.6

10.911.511.09.4

9.510.911.05.8

4.97.38.8

11.914.212.012.3

12.313.010.17.5

5.77.77.2

10.312.111.611.4

13 912^911.511.9

8.59.2

10.3

16.713.16.9

15.7

18.815.39.2

13.6

8.35.91.6

14.316.713.616.1

14.816.413.913.8

11.09.9

10.1

8.711.912.516.3

10.612.411.613.2

6.99.3

12.1

9.710.413.313.0

6.97.5

10.45.8

1.06.9

14.7

Profits after taxes per dollar of sales — cents

5.35.54.95.2

5.15.04.74.4

3.43.84.4

4.44.73.82.5

1.02.93.12.1

.11.65.0

3.13.34.03.1

2.32.83.12.4

. 71.22.8

7.39.18.67.8

6.68.17.87.4

3.17.38.9

7.37.24.17.5

7.17.06.15.8

4.25.05.0

10.29.88.18.7

8.16.66.05.5

4.83.94.4

4.24.24.03.5

3.74.14.22.3

2.23.13.5

5.25.85.35.2

5.35.54.73.7

3.13.93.9

3.64.03.93.5

4.54.34.04.0

3.23.53.9

6.05.03.35.8

6.35.74.05.4

3.72.91.0

3.63.83.23.2

3.23.33.12.9

2.62.32.5

4.55.86.16.6

5.35.85.76.0

3.74.86.2

3.23.44.13.8

2.42.43.21.9

. ( >2.34.7


205


TABLE D-58.—Relation of profits after taxes to stockholders' equity and to sales, private manu-facturing corporations, by industry group, 1956—58—Continued

Period

1956:First quarterSecond quarterThird quarterFourth quarter


1958:First quarterSecond quarterThird quarter



1958:First quarterSecond quarterThird quarter

Nondurable goods industries

Foodandkin-dredprod-ucts

To-baccoman-ufac-tures

Tex-tilemillprod-ucts

Ap-pareland

relatedprod-ucts

Paperand

alliedprod-ucts

Print-ingandpub-lish-ing(ex-cept

news-pa-

pers)

Chem-icalsand

alliedprod-ucts

Petro-leumrefin-ing

Prod-ucts ofpetro-leumandcoal(ex-cept

petro-leumrefin-ing)

Rub-ber

prod-ucts

Leatherand

leatherprod-ucts

Ratio of profits after Federal taxes (annual rate) to stockholders' equity — percent

8 29.9

10.48.7

7.48.4

10.48.3

6.98.69.9

10 012.012 712.1

10.311.913.913.8

11.813.314.5

6.44.85.56.4

4.44.44.83.4

.92.75.2

6.84.5

10.910.0

6.75.99.73.0

3.41.39.5

12.112.211.011.3

10.29.08.77.8

6.87.67.4

16.315.011.010.0

12.314.811.98.0

8.39.3

11.5

15.014.713. 113.9

13.713.913.112.3

9.911.312.0

13.114.013.215.3

14.411.811.112.5

8.98.2

10.4

7.711.112.08.4

4.38.2

10.87.6

-.86.29.8

11.913.111.012.8

11.511.610.910.6

6.78.1

11.3

9 66.66 36.4

6.66.56.98.0

4.13.28.4

Profits after taxes per dollar of sales — cents

2.22.62.72.2

2.02.22.62.1

1.82.22.5

4.55.05.35.1

4.74.95.55.4

5.15.25.5

2.82.22.62.8

2.02.02.21.5

.41.32.4

1.41.02.11.9

1.41.21.8.6

.7

.31.7

6.46.45.95.9

5.74.94.94.5

4.14.54.3

5.45.03.73.0

4.04.83-. 82.5

2.83.34.0

8.58.17.67.9

7.87.97.67.3

6.46.77.0

10.612.011.412.3

11.010.29.8

11.3

8.28.29.9

3.84.75.33.8

2.13.64.43.4

-.52.93.9

4.34.64.14.7

4.44.34.04.1

3.03.44.5

2.81.91.81.8

1.81.92.02.4

1.31.02.4

NOTE.—Data on a comparable basis are not available for earlier periods. For explanatory notes concerningcompilation of the series, see Quarterly Financial Reports for U. S. Manufacturing Corporations by FederalTrade Commission and Securities and Exchange Commission.

Sources: Federal Trade Commission and Securities and Exchange Commission.

206


TABLE D-59.—Sources and uses of corporate Junds, 1947-58l


Source or use of funds

Total uses

Plant and equipment outlaysInventories (change in book

value).. .-.Change in customer net receiv-

ables 3Cash and U. S. Government

securitiesOther assets ._

Total sources

Internal sources

Retained profits and deple-tion allowances

Depreciation and amortiza-tion allowances

External sources

Change in Federal incometax liability

Other liabilitiesChange in bank loans and

mortgage loansNet new issues

Discrepancy (uses less sources)

1947

28.2

17.0

7.1

3.1

1.0(4)

27.9

16.6

11.4

5.2

11.3

2.11.5

3.34.4

.3

1948

27.0

18.8

4.2

2.8

1.0.2

27.8

18.8

12.6

6.2

9.0

.9

.4

1.85.9

-.8

1949

16.8

16.3

-3.6

.9

3.2(4)

15.8

14.9

7.8

7. 1

.9

—2.2.5

—2.34.9

1.0

1950

36.5

16.9

9.8

5.0

4.5.3

35.4

20.8

13.0

7.8

14.6

7.31.0

2.63.7

1.1

1951

36.8

21.6

9.8

2.0

2.8.6

36.9

19.0

10.0

9.0

17.9

4.31.9

5.46.3

— .1

1952

27.3

22.4

1.3

3.1

. 1

.4

28.1

17.8

7.4

10.4

10.3

-3.12.4

3.17.9

-.8

1953

28.2

23.9

1.8

1.8(4)

30.0

19.7

7.9

11.8

10.3

.62.2

.47.1

-1.8

1954

24.0

22.4

-1.6

2.4

(4)

.8

22.4

19.8

6.3

13.5

2.6

-3.1.4

-.65.9

1.6

1955

45.1

24.2

6.7

6.4

5.02.8

44.8

26.6

10.9

15.7

18.2

3.82.1

5.46.9

.3

1956

39.9

29.9

8.4

5.0

—4.3.9

41.5

27.9

10.2

17.7

13.6

— 1.42.0

5.27.8

-1.6

1957

39.3

32.7

1.7

4.4

— 1.82.3

41.2

28.5

8.8

19.7

12 7

-1.91.9

1.810.9

-1.9

19582

33.5

26.5

-4.5

6.5

2.52.5

33.5

27.5

56.0

21.5

6.0

-3.0(4)

-1.010.0

(4)

1 Excludes banks and insurance companies.2 Preliminary estimates.3 Receivables are net of payables, which are therefore not shown separately.4 Less than $50 million.8 Preliminary estimate by Council of Economic Advisers.


Source: Department of Commerce based on Securities and Exchange Commission and other financialdata (except as noted).

2O7


TABLE D-60.—Current assets and liabilities of U. S. corporations, 1954-58l

[Billions of dollars, end of period]

Asset or liability

Total current assets

Cash on hand and inbanks.

U. S. G o v e r n m e n tsecurities

Receivables from U. S.Government 2

Other notes and accountsreceivable.

InventoriesOther current assets 3

Total current liabilities

Advances and prepay-ments, U. S. Govern-ment 2 ._ _

Other notes and accountspayable

Federal income tax lia-bilities

Other current liabilities. .

Net working capital

1954

194.6

33.4

19 2

2.4

71.265 33.1

99.7

2.4

59.3

15.522.5

94.9

1955

224.5

34.6

23.0

2.3

87.172 84.7

121. 5

2.3

73.5

19.326.5

103.0

1956

235.9

35.1

18.2

2.6

94.580.45.1

126.8

2.4

78.0

17.928.6

109.1

Firstquarter

235.2

32.3

17.7

2.5

94.9

5.5

124.2

2.5

77.0

15.429.4

111.0

19

Secondquarter

234.9

33.0

15.4

2.5

96.182.45.4

122.8

2.6

77.3

13.129.7

112. 1

57

Thirdquarter

239.5

33.7

15.7

2.4

98.783.25.7

126.6

2.6

78.3

14.831.0

112.9

Fourthquarter

239.9

35.0

16.5

2.8

97.582.25.9

126.5

2.3

77.6

16.030.6

113.5

Firstquarter

232.8

32.6

15.4

2.7

94.681.46.2

118.0

2.1

73.2

12.829.9

114.8

1958

Secondquarter

231.0

34.5

13.3

2.6

96.078.36.3

114.5

1.9

72.1

10.130.4

116.6

Thirdquarter

236.0

35.5

14.3

2.7

99.977.36.3

117.2

1.8

73.1

11.730.6

118.8

1 All corporations in the United States, excluding banks, savings and loan associations, and insurancecompanies. Data for 1954-55 are based on Statistics of Income, covering virtually all corporations in theUnited States. Statistics of Income data may not be strictly comparable from year to year because of changesin the tax laws, basis for filing returns, and processing of data for compilation purposes. Data for 1956-58are estimates based on data compiled from many different sources, including data on corporations registeredwith the Securities and Exchange Commission. As more complete data become available, estimates arerevised.

2 Receivables from and payables to U. S. Government do not include amounts offset against each otheron the corporation's books or amounts arising from subcontracting which are not directly due from or tothe U. S. Government. Wherever possible, adjustments have been made to include U. S. Governmentadvances offset against inventories on the corporation's books.

3 Includes marketable securities other than U. S. Government.NOTE.—Detail will not necessarily add to totals because of rounding.Source: Securities and Exchange Commission.

208


TABLE D—61.—State and municipal and corporate securities offered, 1934-58l


Period

1934. .

19351936193719381939 .

19401941194219431944

19451946194719481949 _

19501951 - -195219531954

1955195619571958«

1956: First quarter.. -Second quarter .Third quarter. .Fourth quarter.

1957: First quarter...Second quarter .Third quarter..Fourth quarter.

1958: First quarter...Second quarter.Third quarter. .Fourth quarter B_

Stateand

munici-pal se-curitiesofferedfor cash(prin-cipal

amounts)

939

1,2321,121

9081,1081,128

1,238956524435661

7951,1572,3242,6902,907

3,5323,1894.4015,5586,969

5, 9775,4466,9587,400

1,5171,617

9281,384

1,7581,6891,5491,962

2,2062,2281,6681,283

Corporate securities offered for cash 2

Gross proceeds 3

Total

397

2,3324,5722,3102,1552,164

2,6772,6671,0621,1703, 202

6,0116,9006,5777,0786,052

6,3617,7419,5348,8989,516

10, 24010, 93912, 88411,518

2,2502,9892,6903,010

3, 5583,2582,9973,071

3,3142,9082,9442,352

Com-monstock

19

22272?852587

108no3456

163

397891779614736

8111,2121,3691,3261,213

2,1852,3012,5161,335

352532457960

753765404593

287212344493

Pre-ferredstock

6

862714068698

183167112124369

7581,127

762492425

631838564489816

635636411544

19114699

199

9813972

102

182135104122

Bondsand

notes

372

2,2244,0281,6182,0441,980

2,3862.390

917990

2,670

4, 8554,8825,0365,9734,890

4,9?05,6917,6017,0837,488

7,4208,0029,9579,640

1,7062,3112,1341,851

2,7062,3542,5212,376

2,8452,5622,4961,737

Proposed uses of net proceeds 4

Total

384

2,2664,4312,2392,1102,115

2,6152,6231,0431,1473,142

5,9026,7576,4666,9595,959

6,2617,6079,3808,7559,365

10, 04910, 74912, 66111, 331

2,2092, 9352,6412,964

3,4933,1942,9503,023

3,2692,8602,8962,305

New money

Total

57

208858991681325

5698684743C8657

1,0803,2794, 5915,9294,606

4,0066,5318,1807,9606,780

7.9579,663

11, 7849,926

1,9472,5892,3692,758

3,1802,9482,8092,847

3,0692,2782,5821,997

Plantand

equip-ment

32

111380574504170

424661287141252

6382,1153,4094,2213,724

2,9665. 1106,3125,6475, 11C

5, 3336,7099,0407,841

1,0761,8641,6372,132

2,5912,2381,9552, 255

2,5601,8961,9361,449

Work-ing

capi-tal

26

96478417177155

145?07187167405

4421,1641,1821,708

882

1,0411,4211,8682,3131,670

2,6242,9542,7442,084

871725732626

589710853592

509382645548

Retire-mentof se-

curities

231

1,8653,3681,1001,2061,695

1,8541,583

396739

2,389

4,5552,8681,352

307401

1,271486664260

1,875

1,227364214553

1061308642

49465169

13523811268

Otherpur-poses

95

19320414822295

19217217310096

267610524722952

984589537535709

864721663852

155215187164

26420191

107

66344203240

1 These data cover substantially all new issues of State, municipal, and corporate securities offered forcash sale in the United States in amounts over $100,000 and with terms to maturity of more than 1 year.

2 Excludes notes issued exclusively to commercial banks, intercorporate transactions, and issues soldthrough continuous offerings, such as securities of open-end investment companies and employee-purchaseplans.

3 Number of units multiplied by offering price.4 Net proceeds represents the amount received by the issuer after payment of compensation to distributors

and other costs of flotation.5 Preliminary.


Sources: Securities and Exchange Commission, The Commercial and Financial Chronicle, and The BondBuyer.

209


TABLE D-62.—Common stock prices and earnings and stock market credit, 1939-58

Period

1939

194019411942 . -19431944

194519461947 . .19481949

195019511952 - .19531954

1955195619571958

1957: January -February . .MarchAprilMayJune - - -

JulyAugust - ---September _ _ _ _OctoberNovemberDecember

1958: January - - _ _FebruaryMarchAprilMayTune .


Commonstockpricesindex,

1939=100(SEC) i

100.0

94.285.774.999.2

108.1

131.2149.4130.9132.7127.7

154.1184.9195.0193.3229.8

304.6345.0331.4340.9

338.2325. 1328.5338.6352.2354. 6

361.8343.2327.9306.4301.8298.5

304.7304.0310.8311 9322.9330.6

339. 2351.7360.5376.4387.8392.8

Commonstockprice/

earningsratio-

industrials(Standard& Poor's) 2

15.06

10.227.92

12.1814.4016.07

19.7413.908.946.456.88

7.039.54

10.919.56

12.90

12.8314.1912.24

(«)

13.10

14.36

12.76

12.24

13.70

15.92

18.20

(«)

Stock market credit

Customer credit (excluding U. S.Government securities)

Total Net debitbalances 3

Bank loansto

"others" 4

Bank loansto brokers

anddealers 5

Millions of dollars

(6)

(6)(6)(6)(6)(6)

1,374976

1,032968

1,249

1,7981,8261,9802, 4453,436

4,0303,9843,576

(«)

3,9023,8463,8323,9383,9244,031

4,0043,9293,8823,6433,5773,576

3,5543,6793,8633,9804,0694,218

4,2524,1994,3084,3694,423

(«)

(6)

(6)(•)(«)(6)(6)

942473517499821

1,2371,2531,3321,6652,388

2,7912,8232,482

(«)

2,7612,7292,7132,7922.7942,887

2,8852,8332,7892,5682,5172,482

2,4872,5802,6652,7352, 8562,921

3, 0213,0133,1093,1883,245

O

(6)

(6)(•)(6)(6)

353

432503515469428

561573648780

1,048

1,2391,1611,0941,270

1,1411,1171,1191,1461,1301,144

1,1191,0961,0931,0751,0601,094

1,0671,0991,1981,2451,2131,297

1,2311,1861,1991,1811,1781,270

715

584535850

1,3282,137

2,7821,471

7841,3311,608

1,7421,4192,0022,2482,688

2,8522,2142,1902,504

1,6891,7601,6701,8421, 7651,842

1,6601,8101,7481,6421,6102,190

1, 6451,8822,0702,7492, 2043,170

2, 3081, 6651,6711,6411, 9152,504

1 Based on 265 stocks.2 Based on 50 stocks for 1939-56 and 425 stocks beginning 1957. Ratio is obtained by dividing aggregate

market value at end of period by aggregate earnings for 12 months ending with period shown.3 As reported by member firms of the New York Stock Exchange carrying margin accounts. Includes

net debit balances of all customers (other than general partners in the reporting firm and member firms ofnational exchanges) whose combined accounts net to a debit. Balances secured by U. S. Governmentobligations are excluded. Data are for end of period.

4 Loans by weekly reporting member banks to others than brokers and dealers for purchasing or carryingsecurities except TJ. S. Government obligations. However, some U. S. Government securities areincluded after 1952. Series revised beginning July 1946 and March 1953. Data are for last Wednesday ofperiod.

5 Loans by weekly reporting member banks for purchasing or carrying securities, including U. S. Govern-ment obligations. Series revised beginning July 1946 and January 1952. Data are for last Wednesday ofperiod.

6 Not available.

Sources: Securities and Exchange Commission, Board of Governors of the Federal Reserve System.Standard & Poor's Corporation, and New York Stock Exchange.

2IO


TABLE D-63.—Business population and business failures, 1929-58

Period

19291930193119321933.1934193519361937193819391940 . . _1941194? .1943.... ._1944194519461947- . .194819491950 _195119521953.1954 .1955 .1956195719581957:

JanuaryFebruary...MarchApril..MayJuneJulyAugust .September. -OctoberNovember..December__

1958:JanuaryFebruaryMarchAprilMay.. _JuneJulyAugustSeptember..OctoberNovemberDecember

Operating businesses andbusiness turnover (thou-

sands of firms) i

Oper-atingbusi-

nesses 2

3, 029. 02, 993. 72, 916. 42, 828. 12, 782. 12, 884. 02,991.93, 069. 83, 136. 33, 073. 73, 222. 23. 318. 93. 276. 03, 295. 33, 030. 02, 839. 12, 995. 43, 242. 53, 651. 23, 872. 93, 984. 24, 008. 74, 067. 34, 121. 34, 178. 84, 185. 34, 189. 04, 245. 24, 289. 04, 322. 7

4, 289. 0

4. 323. 2

4, 322. 7

Newbusi-ness-es s

(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)

275.2290.0121.2146.0330.9422.7617.4460.8393.3331.1348.2363.2363.9340.5334.2380.4380.8365.6

211.0

154.6

Dis-con-tin-uedbusi-ness-ess

(6)(6)(6)(6)(6)(6)(6)(•)(6)(6)(6)

318.1270.7386.5337.0174.6175.6208.7239.2282.0306.5289.6309.3306.3334.0330.6324.1337.0332.0

176.9

155.1

Busi-ness

trans-fers s

(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(6)(8)(6)(6)

359.4473.2626.9571.9501.3434.7419.4378.3374.9356.2319.7327.0327.3341.0

193.2

147.8

Newbusi-ness

incor-pora-tions(num-ber) 3

(6)(6)(•)CO(6)(6)(•)(6)(6)<•)(6)(6)(•)(6)(6)(6)(6)

132, 916112, 63896, 10185, 49192, 92583, 64992, 819

102, 545117, 164139, 651140, 775136, 697150, 268

13,38710, 79112,04912, 31212, 22011,26911, 68611, 36110, 52611,2519,270

10, 575

13, 08010, 46611, 670

' 11,32911, 94311, 99112, 45412, 23412, 93213, 63312, 09016, 446

Business failures 3 <

Busi-nessfail-ure

rate »

103.9121.6133.4154.1100.361.161.747.845.961.169.663.054.544.616.46.54.25.2

14.320.434.434.330.728.733.242.041.648.051.755.9

48.051.164.948.250.150.047.863.458.751.556.061.9

53.264.160.059.755.367.358.264.053.457.455.951.3

Number of failures

Total

22, 90920, 35528. 28531,822

7 19, 85912, 09112, 2449,6079,490

12, 83614, 768

713,61911,8489,4053,2211,222

8091,1293,4745, 2509,2469,1628,0587,6118,862

11,08610, 96912, 68613, 73914, 964

1,1481,1461,3361,1751,2001,0841,0591,1451,0711,1221,1731,080

1,2791,2381,4951,4581,3411,2601,2531,1271,0391.2711.1211,082

Liability sizeclass

Under$100,000

22, 16525,40827, 23030, 197

718,88011, 42111. 6919,2859,203

12,55314,541

7 13, 40011, 6859,2823,1551,176

7591,0023,1034,8538,7088,7467,6267,0818,075

10, 22610, 11311,61512,54713, 499

1,0221,0421,2251,0711,069

988974

1,070984

1,0321,075

995

1.1421,1131, 3421,2751,2351,1301,1391,018

9321,1781,007

988

$100,000andover

744947

1,0551,6257979

670553322287283227

7219163123664650

127371397538416432530787860856

1,0711,1921,465

12610411110413196857587909885

13712515318310613011410910793

11494

Amount of currentliabilities (millions of

dollars)

Total

483.3668.3736.3928.3

7457.5334.0310. 6203.2183.3246.5182.5

7 166. 7136.1100.845.331.730.267.3

204.6234.6308.1248.3259.5283.3394.2462.6449.4562.7615.3728.3

54.165.455.857.152.651.544.343.545.447.452.945.3

64.465.371.684.056.261.465.450.848.147.356.757.1

Liability sizeclass

Under$100,000

261.5303.5354. 2432.6

7 215. 5138.5135. 5102.8101.9140.1132.9

7119.9100.780.330.214.511.415.763.793.9

161.4151.2131.6131.9167.5211.4206.4239.8267.1297. 6

21.023.125.223.121.520.719.723.420.922.323.622.6

23.824.431.627.828.525.225.422.521.424.121.521.5

$100,000andover

221.8364.8382.2495.7

7 242. C195.4175.1100.481.4

106.449.7

746.835.420.515.117.118.851.6

140.9140.7146.797.1

128.0151.4226. 6251.2243.0322.9348.2430.7

33.042.330.634.031.030.824.620.224.525.129.322.7

40.640.940.056.227.836.239.928.326.723.235.235.6

1 Excludes firms in the fields of agriculture and professional services. Includes self-employed persononly if he has either an established place of business or at least one paid employee.

2 Annual data through 1939 are averages of end-of-quarter estimates centered at June 30. Beginning1940, annual data are for January 1.

3 Total for period.4 Commercial and industrial failures only. Excludes failures of banks and railroads and, beginning 1933.

of real estate, insurance, holding, and financial companies, steamship lines, travel agencies, etc.s Failure rate per 10,000 listed enterprises. Monthly data are seasonally adjusted.6 Not available.7 Series revised; not strictly comparable with earlier data.NOTE.-—Detail will not necessarily add to totals because of rounding.Sources: Department of Commerce and Dun & Bradstrcet, Inc.

21 I


AGRICULTURE

TABLE D-64.—Income of the farm population, 1929-58

Period

1929

19301931193219331934

193519361937.1938.1939

1940.1941194219431944

1945 --1946194719481949 .195019511952195319541955195619571958*

1957:First quarter—Second quarter-Third quarter.Fourth quarter.

1958:First quarter 5_Second quarter'Third quarter '_Fourth quarter'

Income from agricultural sources

Farm operators' income

Realszed gross farm income

Total i

Cash re-ceipts frommarketings

Live-stockand

prod-ucts

Crops

Gov-ern-

mentpay-

ments

Farmpro-duc-tionex-

penses

Net farmincome 2

Real-ized(ex-

clud-ingnet

changein in-ven-

tories)

Total(in-

clud-ingnet

changeinin-

ven-tories) s

Wagesof

farmresi-dentwork-

ers

Total(in-

clud-ingnet

changeinin-

ven-tories)

Incomefromnon-agri-cul-tural

sources

Incomefromall

sources(in-

clud-ingnet

changeinin-

ven-tories)

Billions of dollars

13.911.48.46.47.18.59.7

10.711.310.110.611.013.818.823.424.425.829.734.434.931.832.537.337.035.333.933.334.634.337.6

6.25.23.82.82.83.34.14.74.94.54.54.96.59.0

11.511.412.013.816.517.115.416.119.618.316.916.315.916.317.418.8

5.13.92.52.02.53.03.03.63.93.23.33.54.66.58.19.29.7

11.013.113.112.412.413.314.414.213.713.714.212.414.1

00000.1.4.6.3.3.4.8.7.5.6.6.8.7.8.3.3.2.3.3.3.2.3.2.6

1.01.1

7.66.95.54.44.34.75.15.66.15.86.26.77.79.9

11.512.212.914.517.018.918.019.322.222.621.421.721.922.523.524.6

6.34.52.91.92.83.94.65.15.24.34.44.36.28.8

11.912.212.815.217.316.113.813.215.214.413.912.211.512.110.813.0

6.14.33.32.02.62.95.34.36.04.44.54.66.69.9

11.811.812.415.315.517.812.914.016.315.313.312.711.811.611.613.2

0.9.8.6.5.4.5.6.6.7.7.7.7.9

1.21.41.5.6.8.9.0.8.7.8.9.8.8.7.8

1.81.8

7.05.14.02.53.03.4

5.95.06.85.15.25.37.5

11.113.213.4

14.017.017.519.814.715.718.117.315.114.413.513.413.415.0

(4)(4)(4)(4)(4)1.92.02.32.52.32.52.73.13.84.24.4

4.24.34.95.15.25.35.66.16.05.86.36.76.36.4

(4)(4)(4)(4)(4)5.37.97.39.37.47.78.0

10.614.917.417.818.221.422.424.919.921.023.723.421.120.219.820.119.721.4

Percapitaincome

fromall

sources(dollars)

(4)(4)(4)(4)(4)

165244228296239249

262349509654696

720806825962767838983962931925894903967

1,027


34.434.334.334.3

37.038.037.737.8

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(«)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

23.423.623.423.6

24.224.424.825.2

11.010.710.910.7

12.813.612.912.6

11.511.611.811.5

12.613.413.313.3

88(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

(4)(4)(4)(4)

8(4)(4)

(4)(4)(4)(4)

1 Also includes nonmoney income furnished by farms (value of farm products consumed in farm house-holds and gross rental value of farm dwellings), not shown separately.

2 Realized gross farm income less farm production expenses.3 Data prior to 1946 differ from farm proprietors' income shown in Tables D-9 and D-12 because of revi-

sions by the Department of Agriculture not yet incorporated into the national income accounts of theDepartment of Commerce.

4 Not available.5 Preliminary.NOTE.—Detail will not necessarily add to totals because of rounding.


212


TABLE D-65.—Farm population, employment, and productivity, 1929-58

Period

1929

193019311932 ..19331934

19351936 _193719381939

1940 .194119421943.--1944

19451946194719481949

19501951195219531954

195519561957 -1958 6

Farm popu-lation

(April 1) i

Num-ber

(thou-sands)

30,580

30, 52930, 84531,38832, 39332, 305

32, 16131, 73731, 26630, 98030, 840

30, 54730, 27329, 23426,68125, 495

25, 29526, 48327, 12425,90325,954

25, 05824,16024, 28322, 67921,890

22, 15822, 25720, 39620, 827

As percent oftotal

popula-tion 2

25.1

24.824.825.125.825.5

25.324.824.223.823.5

23.122.721.719.518.4

18.118.718.817.717.4

16.515.715.514.213.5

13.413.211.912.0

Net mi-grationto andfromfarms(thou-

sands)3

-477

-61156607

-463-527

-799-834-661-545-703

-633-1,424-2, 975-1, 563

-564

864151

-1,686-371

-1,314

-1,302-271

-1,996-1,171

-91

-256-2, 236

93(7)

Farm employment(thousands) 4

Total

12,763

12, 49712, 74512, 81612, 73912, 627

12, 73312, 33111,97811, 62211,338

10, 97910, 66910,50410, 44610, 219

10,00010, 29510, 38210, 3639,964

9,9269,5469,1498,8648,639

8,3647,8207,5777,525

Familyworkers

9,360

9,3079,6429,9229,8749,765

9,8559,3509,0548,8158,611

8,3008,0177,9498,0107,988

7,8818,1068,1158,0267,712

7,5977,3107,0056,7756,579

6,3475,8995,6825,570

Hiredworkers

3,403

3,1903,1032,8942,8652,862

2,8782,9812,9242,8072,727

2,6792,6522,5552,4362,231

2,1192,1892,2672,3372,252

2,3292,2362,1442,0892,060

2,0171,9211,8951,955

Averagegross

hourlyearn-

ings ofhiredfarmwork-ers5

$0. 241

.226

.172

.129

.115

.129

.142

.152

.172

.166

.166

.169

.206

.268

.353

.423

.472

.515

.547

.580

.559

.561

.625

.661

.672

.661

.675

.705

.728

.757

Man-hours

offarmwork

Farmoutput

perman-hour

Crop produc-tion

Perman-hour

Peracre

Index, 1947-49=100

135

134137132132118

123119129120121

119117122121120

11210810310097

8991898885

85837980

55

5458585351

5955646666

7074797881

869192

104104

112113120123127

132136143154

53

5256575149

5852626565

6973797781

869291

105104

115112123124129

135141154169

79

7583797159

7665888585

8889999196

9510195

10699

9798

103103101

106109112126

1 Farm population as denned by Department of Agriculture and Department of Commerce, i. e., civ-ilian population living on farms, both urban and rural, regardless of occupation.

2 Total population as of July 1 including armed forces overseas.3 Net change for year beginning in April, estimated by Department of Agriculture. For 1940 and sub-

sequent years, includes inductions and enlistments into the armed forces, and persons returning from thearmed forces. For all years, includes persons who have not moved but who are in and out of the farm popu-lation because agricultural operations have begun or have ceased on the place where they are living.

4 Includes persons doing farm work on all farms. These data, published by the Department of Agri-culture, Agricultural Marketing Service, differ from those on agricultural employment by the Departmentof Commerce, Bureau of the Census (see Table D-17) because of differences in the method of approach, inconcepts of employment, and in time of month for which the data are collected. For further explanation,see monthly reports on Farm Labor by the Department of Agriculture.

3 Weighted average of all farm wage rates on a per-hour basis.6 Preliminary.7 Not available.Sources: Department of Agriculture and Department of Commerce.

489916 O— 59 15213


TABLE D-66.—Farm production indexes, 1929-58

[1947-49=100]

Period

1929

193019311932...-19331934

19351936....193719381939....

1940194119421943-.--1944

19451946--..194719481949.....

19501951195219531954

1955195619571958 4_-

Farmout-put i

74

7279767060

7265827980

8386969497

969895104101

100103107108108

112113113123

Livestock and products

Total 2

77

7880818275

7277767985

8792102111105

10410110097103

107112112114117

120122121124

Meatani-mals

77

7882838673

6674717787

8994107120108

10310110097103

109117117116121

127123120123

Dairyprod-ucts

82

8486868785

8687868990

929610099101

10310210198101

101100100105107

108110111111

Poul-tr?;andeggs

63

6563636259

5963636569

707789102102

106999896106

111116117120125

123136137144

Crops

Total 3

79

7684807158

7664888382

8586979096

939893106101

9799103103101

105106106118

Feedgrains

83

7384957348

8053878483

859110496100

9710581116103

10497102101106

112112122134

Hayandfor-age

88

7579867967

9674879893

106106115110109

11310410310097

106111107110109

116110126125

Foodgrains

66

7276624544

5352727561

6776806985

899210810389

83821059685

808479117

Vege-tables

81

8283838087

8883898988

91929610399

1011109810399

9892929694

9610197101

Fruitsandnuts

76

7594767772

9172958598

9510210087102

9311010496100

104106102104104

104110108110

Cot-ton

104

98119919168

75871338483

8875908086

636183104113

7010610611596

103937781

To-bac-co

75

8176496854

6558786994

7262707096

981141059897

101115112103110

1091078387

Oilbear-ingcrops

21

2323211821

3427303647

5661929882

888591109100

116106104102116

128152148181

1 Farm output measures the annual volume of farm production available for eventual human use throughsales from farms or consumption in farm households. Total excludes production of feed for horses and mules.

2 Includes certain items not shown separately.3 Includes production of feed for horses and mules and certain other items not shown separately.< Preliminary.


214


TABLE D-67.—Indexes of prices received and prices paid by farmers, and parity ratio, 1Q29—58

[1910-14=100]

Period

1929

19301931193219331934 _

1935193619371938.1939

19401941194219431944.194519461947 _1948 ._.1949

19501951 .195219531954195519561957 .1958. _.1957:JanuaryFebruary ...MarchAprilMay..JuneJulyAugustSeptember .OctoberNovember .December- -

1958:JanuaryFebruary. .-MarchAprilMayJuneJulyAugustSeptember .OctoberNovember _December..

Prices received by farmers

Allfarmprod-ucts 1

148

12587657090

1091141229795

100124159

3193319732073236276287250

258302288258249

236235242255

237235238241242243246247245241242243

247252263264264255254251258252251246

Crops

All

crop

s '

135

11575577198

1031081188082

90108145187199202228263255224

233265268242242236240233232

237234237241241240237232227225223219

224229245252246

! 232

22822523222722522C

3C8SHbo

£

116

9356446690

971081207572

8497120148166172201271250218224243244231232229224225206

237235235233225218218217217219221221

21721922422322119719f19C19519£

1 20f| 19*

|

.s

I118

10674485795

1071031257172

8592115152172

167202256258177193226234208206187185170156

187181181180179173170169163156150151

146148152162163167165163161153145154

|"o0

150

104644968101

9899947074

83111156167172

179238274272246282336310268274272268264253

256255252258266270273278279273263239

!

23221122023624624626C281292281274256

1

171

1409884107156

171163200173152

134157247319348

360376374380398402436432429439

437453465481

457458459459457457460469484483473466

474475475475475474

473483482501485505

aIbofl"S

10

143

111734457103

1271201299596

103138183202222

228260363351242

276339296274279

250250252228

266260265264263260250252244231235237

23322S23423723823S

22723222C2142U2U

Livestock and products

All

live

stoc

k an

dpr

oduc

ts l

159

13498727081

114119126112107

109138171198196

211242288315272

280336306272255236230249275

238236238242242245254261260255258263

2671 273

28027528C27527727528C

1 275>! 274>| 27C

Mea

t an

imal

s

155

13391635968

115118130113110

108143186203190

32073248329361311340409353296292249238279334

253252263275280288297302291275277293

30832433633935534834733833S33C326323

Dai

ry p

rodu

cts

166

1421118687101

114125131115110

120140163

3 198322232293268273301252249286302274252253260264259

271266260253248246253

i 260272278

1 28C275

26?26626124£244241246

1 25526427127227(

Pou

ltry

and

egg

s

161

12898817489

11611511111096

98122152191177198201223242221

186228206221176188177162169

155156149148143145155168175181

1 188j 185

1 174165187172168163166166

! 1741 164

5 164) 157

Prices paid byfarmers

Allterns,inter-est,taxes,andwagerates(par-ityin-dex)

160

151130112109120

124124131124123

124133152171182190208240260251

256282287279281281285295305

292293294296296296295295295296298299

301302304306306305305304305307308308

Fam-

ryliv-ingterns

154

144124106108122

124124128122120

121130149166175182202237251243

246268271270274273278286292

28328428428286

1 28

282828286289289

289290

! 2931 293! 294

293293291290291293291

Pro-duc-tionterns

146

1351139999114

122122132122121

123130148164173176191224250238

246273274253252249249258270

25525625825925925"2525258

1 25826C26

262626272727C27C26?272271272273

Par-ityra-tio 2

92

8367586475

8892937877

8193105113108109113115110100

101107100928984828284

818081818282838483818181

828387868684838385828180

1 Includes items not shown separately.2 Percentage ratio of index of prices received by farmers for all farm products to parity index.3 Includes wartime subsidy payments.


215


TABLE D-68.—Comparative balance sheet of agriculture, 1940—59


Beginningof period

19401941194219431944

19451946194719481949

1950195119521953....1954

1955 .._1956195719581959 3

Assets

Total

53.055.162.573.383.8

93.1102.0113.9125.2132.1

130.8149.6165.6162.9159.7

164.7168.3176.4186 7200.0

Realestate

33.634.437.541.648.2

53.961.068.573.776.6

75.386.896.096.694.7

98.8102.7109.5116.3123.2

Other physical assets

Live-stock

5.15.37.19.69.7

9.09.7

11.913.314.4

12.917.119.51^.811.7

11.210.711.114.2

Ma-chin-eryand

motorvehi-cles

3.13.34.04.95.3

6.35.25.17.09.4

11.313.015.215.616.3

16.216.717.217.6

Crops !

2.73.03.85.16.1

6.76.37.19.08.6

7.67.98.89.09.2

9.68.38.37.6

House-holdfur-

nish-ingsand

equip-ment2

4.34.34.54.64.6

4.74.85.46.27.0

7.88.79.5

10.210.8

11.411.912.412.8

Financial assets

Depos-its

andcur-

rency

3.23.54.25.46.6

7.99.4

10.29.99.6

9.19.19.49.49.4

9.49.59.39.4

U.S.savingsbonds

0.2.4.5

1.12.2

3.44.24.24.44.6

4.74.74.74.64.7

5.05.25.15.1

Invest-mentin co-opera-tives

0.8.9.9

1.01.1

1.21.41.51.71.9

2.12.32.52.72.9

3.13.33.53.7

Claims

Total

53.055.162.573.383.8

93.1102.0113.9125.2132.1

130.8149.6165.6162.9159.7

164.7168.3176.4186.7200.0

Realestatedebt

6.66.56.46.05.4

4.94.84.95.15.3

5.66.16.77.37.8

8.39.19.9

10.511.2

Otherdebt

3.43.94.14.03.5

3.43.23.64.26.1

6.97.07.98.89.3

9.59.89.69.7

11.4

Pro-prie-tors'equi-ties

43.044.752.063.374.9

84.894.0

105.4115.9120.7

118.3136.5151.0146.8142.6

146.9149.4156.9166.5177.4

1 Includes all crops held on farms for whatever purpose and crops held off farms as security for CommodityCredit Corporation loans. The latter on January 1, 1958, totaled $700 million.2 Estimated valuation for 1940, plus purchases minus depreciation since then.3 Preliminary.4 Not available.

NOTE.—Detail will not necessarily add to totals because of rounding.Source: Department of Agriculture.

TABLE D-69.—Level-oj-living indicators Jos farm-operator families, selected years, 1920—56

Period

1920193019401945195019541956 4

Level-of-living indexes l

(U. S. average in 1945=100)

UnitedStates

7579

100122140145

North-east

102115138152167169

NorthCentral

104104128147161165

South

44496592

113119

West

93102127145163167

Percentage of all families reporting:./

Elec-tric-ity 2

3 7133348789394

Tele-phones

39342532384752

Auto-mobiles

31585862637174

Run-ningwater

10162229435964

Me-chan-ical

refrig-erators

153263

90

Tele-vision

33653

Homefreezers

123239

1 Indexes based on percent of farms with electricity, telephones, and automobiles and the average valueof products sold or traded in the year preceding the appropriate Census of Agriculture.

2 Differs in minor respects from series shown in Table D-70.3 Gas or electric lights.4 Based on Special Cooperative Survey of Farmers' Expenditures.Source: Department of Agriculture.

2l6


TABLE D—70.—Selected indicators of farming conditions, 1929-58

Period

1929

19301931193219331934

19351936193719381939

19401941194219431944

19451946194719481949

19501951 L19521953... -.1954

1955195619571958 9

Numberof farms(thou-sands)

6,512

6,5466,6086,6876,7416,776

6,8146,7396,6366,5276,441

6,3506,2936,2026,0896,003

5,9675.9265,8715,8035,722

5.6485,5355,4215,3085,201

5,0874,9694,8564,754

Averagevalue of

productionassets per

farm(dollars) 1

(8)

(8)(8)(8)

8(s)(8)

8(8)6,0946,3407,4498,934

10, 328

11,34612, 43514, 15415,90617, 144

16, 97920,43423, 20622, 94622, 592

23, 80625, 09627, 20329,600

Total invest-ment in farm

plant andequipment(millions of

dollars)

Gross

966

717408194189376

560756903685774

8721,1991,202

9181,488

1,5332,0353,2454,3164,492

4,5944,8254,6964,7854,230

4,2293,8574,0644,307

Net2

50

-238-448-540-455-274

-10428

107-148

-7

76325

-168-485

25

193811

1,6412,2572,064

1,8581,5991,2971,265

614

507116149301

Real estatedebt as

percent ofvalue of

real estate(percent)3

20.3

20.121.524.527.523.9

22.821.720.319.819.9

19.618.917.014.311.2

9.27.87.26.96.9

7.47.07.07.58.2

8.48.89.19.0

Fore-closurerate per

1,000farms «

15.7

18.728.438.828.021.0

20.318.114.313.412.5

10.46.14.33.01.9

1.51.1.0.2.4

.5

.6

.3

.72.0

2.32.01.7

(«)

Operators'net income

per farm(dollars) «

962

691437288410571

676762788655682

675978

1, 4231,9502, 035

2,1542,5692,9472,7672,410

2,3342,7392,6592,6192,346

2,2552,4372,2322,735

Farm in-come perworker

(dollars) «

593

456298203266360

423487519452475

484694995

1,3311,411

1,5151,7261,9371,8421.671

1,5981,8811,8821,8831,727

1,6981,9061,7622,126

Percent ofall farms

withcentralstation

electricalservice 7

(8)

(8)(8)(8)(8)(8)

10.912.315.819.122.1

30.434.938.340.342.2

45.754.361.068.678.2

77.284.288.190.892.3

93.494.294.895.4

1 Farm real estate less value of dwellings, crops held for feed, livestock, machinery and equipment less 60percent of the value of automobiles, and demand deposits used for production. Data are for January 1.

2 Gross investment less depreciation and other capital consumption.3 Data are for January 1.* Data are for year beginning March 15.s Including Government payments and excluding the net change in inventories.e Net income of farm operators including Government payments and excluding the net change in in-

ventories, plus farm wages of resident workers and other hired workers.7 Data are for June 30, except for the Census of Agriculture years: 1935 (January 1), 1940 (April 1), 1945

(January 1), and 1950 (April 1).8 Not available.9 Preliminary.


217


INTERNATIONAL TRANSACTIONS

TABLE D-71.—United States balance of payments, J952-58l


Type of transaction

United States payments' Total

Imports of goods and services: Total

Merchandise, adjusted, excludingmilitary

TransportationTravel - -Miscellaneous services, excluding

military -Military expendituresIncome on investments:

PrivateGovernment

Unilateral transfers, net, excludingmilitary Total _ -

Government grantsRemittances and other transfers

United States capital, net: Total

Private net' Total

Direct investments, netNew issuesRedemptions _ _ _ _ _Other long-term, netShort-term net

Government net' Total

Long-term capital, outflowRepaymentsShort-term, net _ -

United States receipts: Total

Exports of goods and services: Total

Merchandise, adjusted, excludingmilitary _ - _ . . _ _ - _ - _

TransportationTravelMiscellaneous servicesMilitary transactionsIncome on investments:

Direct investmentsOther privateGovernment -

Foreign long-term investments in theUnited States, net 2

Net United States payments ( — )

Increase in liquid dollar holdings byforeign countries and internationalinstitutions

United States gold sales or pur-chases (— )

Errors and omissions

July1952-Junc1956

(annualaver-age)

20 930

17, 157

11 1041,1491,029

6862 657

38587

2,397

1,795602

1,376

1 159

776255

-14358

213

217

522—474

169

18,980

18 685

13, 4371 303

606966167

1 705238263

295

— 1 950

1 242

416

292

19

Firsthalf

12 522

9,898

6 426707535

3581 572

23268

1 183

875308

1 441

1 100

630205

—94206153

341

294— 185

232

11, 581

11 299

8 36676931651491

1 000'l45

98

282

—941

899

-115

157

56

Secondhalf

13 226

9,912

6 365725740

4261 338

23286

1,149

820329

2,165

1 880

1,209252-75113381

285

240—294

339

12, 479

12 219

8 95585038954565

1 16015996

260

-747

403

-191

535

19

Firsthalf

14 194

10, 316

6 640711565

3631 725

21399

1,226

883343

2,652

2 203

1,395399

-70216263

449

258—360

551

13, 935

13 642

10 23998936460784

1 08517599

293

—259

308

-673

624

57

Secondhalf

12 994

10, 391

6 651717807

4801 395

239102

1,081

730351

1 522

1 008

677198

— 7916745

514

729—299

84

12 902

12 834

9 088858421661284

1 228188106

68

—92

-35

-125

252

19

Firsthalf

13 379

10, 061

6 313728621

3821 733

21965

1 143

805338

2 175

1 714

578721

—40207248

401

494—338

305

11 508

11 494

8 239'792364605159

1 027195113

14

—1 871

183

1 445

243

58

Thirdquarter

6 58 r>

5, 258

3 116408586

248757

11132

548

367181

779

441

16446

— 1014893

338

334— 110

114

5 533

5 533

3 79541625632249

5419955

— 1 052

394

483

175

1 Excludes transfers of goods and services under military grant programs.2 Excludes investment in U. S. Government securities.


2l8


TABLE D-72.—United States balance of payments with individual areas, 1952-58l


Area and type of transaction

Western Europe:United States payments: Total

Imports of nonmilitary goodsMilitary expenditures _

FranceGermany _United Kingdom

Other servicesRemittances and other transfers, net.Government grants and capital, net..

Greece, Spain, Turkey, andYugoslavia - - .

Private capital, net outflow

Direct investmentsOther long-term - --Short-term

United States receipts- Total

Exports of nonmilitary goodsIncome on investments abroad:

Government -_ -Private

Other services and military trans-actions

Foreign long-term investments in theUnited States net 3

Net U n i t e d S t a t e s r e c e i p t s orpayments ( — ) - -

Canada:United States payments: Total

Imports of nonmilitary goodsMilitary expenditures.Other servicesRemittances and other transfers, net.Government capital netPrivate capital, net outflow

Direct investmentsOther long-term _ .._ _ ._Short-term


Exports of nonmilitary goodsIncome on investments:

Government _ - _Private

Other services and military trans-actions. .. . - _ - .


Net U n i t e d S ta tes r ece ip t s orpayments (— )

July1952-June1956

(annualaver-age)

6 630

2 2901 429

487258308

1,587264911

301

149

84-28

93

5 376

3 687

203244

1 033

209

—1 254

3, 693

2 522206524

122

431

3822524

4,268

3,218

384

619

47

575

19f

Firsthalf

4 005

1 430'976

289167267

933148343

261

175

1105213

3 459

2 481

61159

598

170

—536

2,189

1 392121220

6—5455

269191—5

2,683

2 068

212

315

88

494

>6

Secondhalf

4 120

1 518700

154175168

1 002152181

174

567

34663

158

3 974

2 864

64186

647

213

—146

2,554

1 521138377

6

512

27520433

2,685

2,046

275

359

5

131

19,

Firsthalf

4 399

1 5391 049

233246317

937146372

302

356

15790

109

4 516

3 282

57171

754

252

117

2,438

1 421'l36228

71

645

416273

-44

2,755

2, 142

256

347

10

317

57

Secondhalf

3 896

1 552747

159207170

1 063166316

89

52

97—34— 11

3 875

2 656

67216

878

58

—21

2,356

1 519'l52386

71

291

1689132

2,515

1,872

284

368

-9

159

19v

Firsthalf

4 052

1 5121 004

211325213

971150233

179

182

83110

— 11

3 348

2 349

62215

718

4

— 704

2,273

1 279186227

6_1576

14533992

2,310

1.763

229

325

-7

37

58

Thirdquarter

2 160

803396

(%}(2)

75

6369287

84

146

344567

1 561

1 078

3294

356

1

—599

1 255

70490

2654

192

114717

1,183

850

133

207

-7

-72


219


TABLE D-72.—United States balance of payments with individual areas., 1952-58 l—Continued



Latin America:United States payments' Total

Imports of nonmilitary goods _Military expendituresOther servicesRemittances and other transfers, net--Government grants and capital, net—Private capital outflow, net

Direct investmentsOil concession payments to

Venezuela - - _Other long-termShort-term

United States receipts' Total

Exports of nonmilitary goods -..Income on investments:

Government - -Private

Other services and military trans-actions - - -- .


Net United States receipts orpayments ( — )

Other countries'.United States payments: Total

Imports of nonmilitary goodsJapan

Military expenditures..Japan

Other services. ... . . _ ....Remittances and other transfers, net..Government grants and capital, net, .

Cambodia, Laos, Vietnam, Ko-rea, and China (Taiwan)

JapanIndiaPakistan .

Private capital, net outflow . . . .

Direct investmentsOther long-termShort-term


Exports of nonmilitary goods

Japan

Income on investments:GovernmentPrivate _ . _ - - . .

Other services and military transac-tions


Net United States receipts orpavments ( — ) _

July1952-June1956

annualaver-age)

4 844

3, 57225

77837

179253

153

7129

4 722

3,272

29662

739

20

-122

5,598

2,780341

997613

406289849

435406564

277

1565566

4,526

3,240

663

31640

605

10

-1,072

19,

Firsthalf

2 801

1,98213

4622091

233

141

1775

2 698

1,864

17416

392

9

—103

3,461

1,622263

462246

276134748

376604981

219

1103970

2,684

1,938

378

20351

363

12

-777

56

Secondhalf

3 030

1,79314

5232087

593

471

2233884

2 917

1,966

17468

442

24

-113

3,428

1,533295

486238

269151751

349666975

238

11715

106

2,854

2,069

521

15382

379

9

-574

19^

Firsthalf

3 434

2,00718

4732794

815

704

2673477

3 229

2,238

20502

455

14

—205

3,710

1,673273

522224

294163821

475—57159

237

118—1120

3,381

2,564

721

22322

463

10

-329

>7

Secondhalf

3 240

1,92217

51324

163601

400

9011190

3 365

2,390

20473

477

5

125

3,340

1,658328

479221

324154720

30453

11547

5

1258

-65

3,097

2,157

510

19436

476

9

-243

19,

Firsthalf

2 966

1,91726

47022

163368

301

-1481

2 947

2,098

22395

434

—2

-19

3,705

1,605302

517205

325160845

401— 1511379

253

4911886

2,851

2,016

443

29371

421

14

-854

58

Thirdquarter

1 422

85013

27110

24632

—4

1917

1 451

989

10216

242

-6

29

1,668

759177

258(2)

17075

364

1434

4834

42

20202

1,311

872

184

13189

227

10

-357


220


TABIE D-72.—United States balance of payments with individual areas, 1952-58 1—Continued



International Institutions:United States payments: Total

Government grants and capital, net..Private capital, net outflowOther payments


Exports of nonmilitary goodsIncome on investments:

Government _ . _ . _ _Private

Other services - -Foreign long-term investments in

the United States, net 3

Net Uni ted States receipts orpayments (— ) . _ _ _ _ . _ .

Addendum: Total sterling area:United States payments: Total .

Imports of nonmilitary goodsMilitarv expenditures _ . .. .Other servicesRemittances and other transfers, net.Government grants and capital, net .

United Kingdom

Private capital, net outflow

Direct investmentsUnited Kingdom ._ _ ,

O ther long-term . _ . _Short-term


Exports of nonmilitarv goods. Income on investments:

Government.. . ... ...Private

Other services and military transac-tions


Net Un i t ed States rece ip t s orpayments (— ) . . ... ... _ _

July1952-June1956

(annualaver-age)

164

744842

89

20

1446

9

-75

3,431

1,71939976795

332

143

119

86228

25

3,019

1 856

104381

584

94

-412

19

Firsthalf

66

39189

47

15

722

3

-19

2,121

1,00632945149

177

11

109

934844

-28

1,749

1,108

13228

310

90

-372

56

Secondhalf

94

86-30

38

49

10

g22

9

—45

2,196

994239456

48116

—54

343

2402138221

1,961

1 240

13280

338

90

-235

19

Firsthalf

213

4415019

54

13

925

7

— 159

2.412

1 094406453

56169

— 1

234

126894068

2,176

1 445

14225

380

112

-236

57

Secondhalf

162

445959

50

13

725

5

— 112

2,326

1 068264496

57430

245

11

7668

-16-49

2,054

1 341

17302

383

11

-272

19

Firsthalf

383

2633522

52

13

1222

5

-331

2,292

1,05032648256

237

10

141

88403815

1,815

1,148

24277

355

11

-477

58

Thirdquarter

80

82943

27

6

g11

2

-53

1,100

48812326927

109

— 1

84

26-32929

851

525

4127

197

—2

-249

1 Excludes transfers of goods and services under military grant programs.2 Not available.3 Excludes investment in U. S. Government securities.


221


TABLE D—73.—United States exports by selected commodities and markets, 1956-58


Commodity and period

Total exports, excluding "special cate-gory": 2

1956: First half1957- First half1958: First half

Six main groups in the decline:1956: First half1957: First half1958: First half

Crude petroleum and related fuels:1956: First half _ ._1957- First half1958: First half

Cotton, raw, including linters:1956: First half .. ._1957- First half1958: First half

Wheat:1956: First half1957- First half1958: First half .

Coal and related fuels:1956: First half1957- First half1958: First half _

Iron and steel-mill products, scrap,nonferrous metals and ferro-alloys:

1956: First half1957- First half1958: First half

Automobiles, parts, and acces-sories:

1956: First half1957: First half1958: First half _ .

Other exports:1956: First half1957- First half1958: First half _ _ . . . .

Machinery, all types:1956: First half1957- First half1958: First half

Chemicals and related products: «_1956: First half _- _ . .1957: First half1958- First half

Textile manufactures: 4

1956: First half _1957: First half. _ _1958' First half

All other exports:1956- First half1957: First half..1958: First half

Total, allcountries

16,29419,98416,064

5,0297,3864,394

214796179

4841,278

856

669910575

630854526

1,5262,0881,058

1,5061,4601,200

11, 26512, 59811, 670

3,6124,0503,832

1,2441,4081,348

632698630

5,7776,4425,860

Main countries accounting for declinefrom first half 1957 to first half 1958

Total

9,38311, 6668,592

3,2294,9712,648

108609106

3961,070

678

327420236

594798498

1,1281,528

694

676546436

6,1546,6955,944

1,8922,0721,808

620710688

254294248

3,3883,6193,200

WesternEurope ]

4,5896,0404,278

1,6122,8381,468

2948137

198750470

281347149

376556354

576608378

1529680

2,9773,2022,810

608664602

292354366

10613498

1,9712,0501,744

Canada

4,0364,1843,428

1,1911,185

807

617337

125246

(3)(3)

190194108

408428264

520438352

2,8452,9992,621

1,2101,2781,018

252254246

148156150

1,2351,3111,207

Japan

7581,442

886

426948373

185532

186268162

467387

284836

14449252

4124

332494513

74130188

7610276

(3)4

(3)

182258249

All othercountries

6,9118,3187,472

1,8002,4151,746

10618773

88208178

342490339

365628

398560364

830914764

5,1115,9035,726

1,7201,9782,024

624698660

378404382

2,3892,8232,660

i Excludes Greece and Turkey.2"Special category" includes those commodities for which detailed statistics are withheld for security

reasons. The data for the first half of 1956 include estimates for commodities declassified in a revision of"special category" coverage in 1957.

3 Less than $500,000.4 Includes semimanufactures as well as finished products except those for Japan which include finished

manufactures only.Source: Department of Commerce.

222


TABLE D-74—World exports, 1956-58


^\^^ Exports to

Exports from ^\^

World:1956: First halfChange, first half:

1956-19571957-1958.

United States:1956- First halfChange, first half:

1956-19571957-1958

United Kingdom, Iceland,and Ireland:

1956: First halfChange, first half:

1956-19571957-1958

Continental WesternEurope:

1956: First halfChange, first half:

1956-19571957-1958

Canada:1956- First halfChange, first half:

1956-19571957-1958

Japan:1956- First halfChange, first half:

1956-19571957-1958

Outer sterling area:1956- First halfChange, first half:

1956-19571957-1958

Latin America:1956: First halfChange, first half:

1956-19571957-1958

All other countries:1956: First half.Change, first half:

1956-19571957-1958

World i

2 91, 349

2 10, 1132-6,363

2 16, 728

2 3, 7422—3,844

9,690

566-462

25, 906

3,569-484

4,633

23923

2,320

335127

12, 266

533-928

8, 568

240-819

11,238

88924

UnitedStates

12, 378

118-261

694

6239

1,876

190-29

2,781

146-98

501

2675

1,166

—63

4, 045

-254-225

1,315

-46-26

UnitedKing-dom,

Iceland,and Ire-

land

10, 047

395-507

3 842

33383 —393

571

2151

2,351

-2313

756

-3345

86

-249

3,728

—51-238

668

206-134

1,045

-39140

Conti-nental

WesternEurope

27, 755

4,007-2, 583

33 479

3 1 1163—1 321

2,388

315-352

12,690

2,013-557

411

10460

132

76-15

2,548

— 57-62

1,671

203-268

4,436

237-68

Canada

5,392

208-780

4 167

144—769

523

181

241

29-11

65

— 54

212

9-32

95

217

89

Q

34

Japani

2,472

1 207-1,101

3 755

36803 —555

61

50— 55

128

129—77

112

24-35

656

276-324

224

32-33

536

16-22

Outersterling

area

11, 584

1 120-321

3 1 242

33223 —169

3 856

111-125

1.800

22076

259

— 1883

606

76-55

2,217

171-207

104

18-5

1,500

22081

LatinAmer-

ica

7, 161

1 314-371

3 754

784— 260

397

47— 10

1,465

28866

163

74-45

174

—4054

114

95(4)

597

136-76

497

-70-100

Allothercoun-tries

13 159

1 442—387

3 2 1133341

3 —427

1 146

-82— 1

5,058

676114

150

— 5913

551

12261

1 347

— 14—65

1,089

-68-100

1,705

52618

1 Totals for each exporting area include amounts for which destinations are not specified in sources, andtherefore exceed sums of destination details.

2 Excludes U. S. military aid exports.3 Excludes U. S. "special category" shipments for which destination details are withheld on security

grounds. Figures for 1956 and for 1956-57 changes are based upon the "special category" coverage in effectuntil mid-1957, while 1957-58 changes are computed from revised data reflecting the more limited "specialcategory" coverage subsequently in effect.

4 Less than $500,000.NOTE.—Data exclude exports of U. S. S. R. and Soviet bloc countries to each other.Detail will not necessarily add to totals because of rounding.Sources: United Nations and Department of Commerce.

223


TABLE D—75.—Estimated gold reserves and dollar holdings of foreign countries and internationalinstitutions, 1952 and 1956-58

[Millions of dollars; end of period]

Area and country

Total

Continental Western Europe

AustriaBelgium-Luxembourg (and

Belgian Congo)France (and dependencies) - .Germany .-. ._ -ItalyNetherlands (and Nether-

lands West Indies andSurinam)

Scandinavian countr ies(Sweden, Norway, Den-mark, and Finland)

Other

Sterling area ,

United Kingdom. _Other.

Canada .-

Latin America

ArgentinaBrazilChileColombia . ._ _ ...CubaMexicoPeru . ._•VenezuelaOther

Asia

JapanOther

All other countries..-

International institutions

1952

24, 451

8,651

149

1,0271,141

691665

824

6063,548

3,473

2,514959

2,627

3,432

428392121194543380107521746

2,376

9311,445

345

3,547

19

Sept.

32, 933

14,429

358

1,2771,6383,1121,288

1,136

8374,783

4,160

3,0861,074

2,899

4,158

399583152180574565117811111

2,810

1, 1901,620

368

4,109

56

Dec.

32, 621

14, 433

377

1,2391,5123,3431,270

1,080

8824,730

4,157

3,0151,142

2,996

4,313

370550138210514604119

1,061747

2,812

1, 1491,663

375

3,535

19

Sept.

32, 299

14, 756

432

1,1731,0134,0771,460

983

9694,649

3,847

2,6871,160

3,229

4,752

31345811824458355696

1,617767

2,399

7001,699

415

2,901

57

Dec.

32, 712

15, 074

460

1,190955

4,1131,533

1,058

9804,785

4,243

3,0801,163

3,195

4,544

26345711621552556988

1,556755

2,340

7161,624

397

2,919

Mar.

33, 397

15, 251

465

1,266921

3,9831,530

1,274

9834,829

4,851

3,7011,150

3,163

4,415

27044111820051753982

1,430818

2,404

8351,569

394

2,919

1958

June

34, 704

15, 786

473

1,400916

4,0521,682

1,302

9405,021

5,135

4,0301,105

3,432

4,383

26645112719250348893

1,462801

2,475

9331,542

351

3,142

Sept.

35,708

16, 892

561

1,4771,0304,3401 876

1,402

1,0425 164

5,206

4,0671,139

3,378

4,144

24445912520749552392

1,235764

2,499

1 0121,487

337

3,252

NOTE.—Includes gold reserves and dollar holdings of all foreign countries with the exception of goldreserves of U. S. S. R. and other Eastern European countries, and of international institutions (InternationalBank for Reconstruction and Development, International Monetary Fund, United Nations and others).Holdings of the Bank for International Settlements (both for its own and EPU account) and of the Tripar-tite Commission for Restitution of Monetary Gold are included under "other" Continental WesternEurope.

Source: Board of Governors of the Federal Reserve System.

224


TABLE D-76.—Price changes in international trade, 1955—58

[1953=100]!

Trade sector

United States foreign trade: 2

Exports: TotalFoodstuffsIndustrial materialsFinished manufactures _ _ _ _ _. _

Imports for consumption: TotalFoodstuffs _ _ _Industrial materialsFinished manufactures

World trade: 3

Industrial countries' ExportsOther countries: Exports _

Commodity classes:

Manufactured goods 5

Nonferrous base metals 5

Primary commodities 6

Foodstuffs 6

Other agricultural commodities 6- _Wool e

Minerals 6

Metal ores 6 -Crude petroleum 6

1955

10089

104100

10210110498

99100

99119

10096

10284

102103104

19

Firstquar-ter

10488

111104

10497

109100

10299

102134

9994

10080

107111104

56

Thirdquar-ter

10488

108105

104100107100

10298

103117

10198

10088

108108104

19

Firstquar-ter

10892

111110

106101112101

105101

106110

10610010599

119112107

57

Thirdquar-ter

10789

107112

10599

108102

105100

10796

10297

10296

111105112

Firstquar-ter

10789

103114

10299

103101

10495

10885

97939477

10999

112

1958

Secondquar-ter

10691

101112

10097

101101

10394

10786

96949169

10999

112

Thirdquar-ter

10689

100112

9996

100100

(4)(4)

10790

96959065

10899

112

1 Data shown for United States foreign trade and for country groups and for manufactured goods in theworld trade section of the table are unit value indexes. All others are price indexes.

For description of world trade indexes by commodity classes, see "Methods in Compiling the UnitedNations Price Indexes for Basic Commodities in International Trade," Statistical Paper, Series M, No.29, United Nations, New York.

2 The series shown for foodstuffs is the weighted average of the two commodity classes, crude foodstuffsand manufactured foodstuffs. The series shown for industrial materials is the weighted average of thetwo commodity classes, crude materials and semimanufactures.

3 Excludes trade of U. S. S. R. and Soviet bloc countries.4 Not available,s Exports.e Exports and imports.

Sources: Department of Commerce and United Nations.

225U. S. GOVERNMENT PRINTING OFFICE: 1959 O—489916
