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MONTHLY BUSINESS REVIEW of the FEDERAL Volume 35 RESERVE BANK of Dallas, Texas, May 1, 1950 Dallas Number 5 EIGHTH ANNUAL RETAIL CREDIT SURVEY ELEVENTH FEDERAL RESERVE DISTRICT JACK D. COLCLOUGH, B1tsiness EC0110mist Federal Reserve Bank of Dallas Summary Sales of automobile dealers reached record levels in 1949, but the adverse effect of last year's moderate economic readjustment on many kinds of retail stores in the Eleventh Federal Reserve District was clearly revealed by the Eighth Annual Retail Credit Survey conducted by the Federal Reserve Bank of Dallas. Of the nine types of retail stores surveyed, only automobile dealers and auto tire and accessory stores showed an over-all increase in their 1949 sales as compared with 1948. In the other lines, aggregate sales of reporting stores reflected decreases ranging from 4 percent for furniture stores to 9 percent for jewelry stores. Cash sales evidenced the largest decreases, continuing the downward trend which began in 1947. Although credit sales were off slightly, the decline was entirely in the charge account category, since instalment sales at most types of stores rose substantially. Accounts receivable outstanding-both open credit and instalment-continued to expand in the Eleventh District despite the contraction in sales in most lines, with total receivables at the end of the year 12 percent higher than a year earlier. Particularly sharp increases were noted in the instalment receivables, and the increases would have been even more pronounced in some lines if it had not been for heavy sales of instalment paper. The expansion in accounts receivable was in line with the national growth of consumer credit and reflects, in part, the heavy volume of consumer buying of durable goods normally sold on a deferred-payment basis. A prime factor promoting sales and increasing the accounts receivable was the liberalization of credit terms, particularly following the expiration of consumer instalment credit controls on June 30, 1949. Moreover, the lower down payments and the slowing in collections as manifested in longer pay-out periods, as well as less prompt payments, contributed to the rise in receivables. The reduction in inventories, which was a dominant characteristic of the economic readjustment of last year, was apparent in most of the lines surveyed. The year-end stocks of seven of the nine lines covered were noticeably lower than a year earlier. The lower stocks at the end of 1949 are more impressive when it is considered that sales at that time were generally showing a buoyant tendency, while the higher stocks of a year previous occurred at a time when sales in many lines were declining substantially. Description of the Survey The Eighth Annual Retail Credit Survey, as in previous years, covers data obtained from representative retail stores in the Eleventh District in lines in which credit sales normally constitute a significant proportion of total sales. The types of stores included in the survey are automobile dealers, auto tire and accessory stores, department, furniture, hardware, household appliance, jewelry, men's clothing, and women's apparel stores. Retail stores reporting in the survey are independent This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 76 MONTHLY BUSINESS REVIEW stores and local outlets of chains operating in limited areas, since the activities of national chain store outlets located in the District were included in consolidated reports made directly to the Board of Governors of the Federal Reserve System for inclusion in its National Retail Credit Survey. Coverage was greater in this year's survey than in previous surveys, both as to the number and geographic distribution of the firms reporting. The number of reporting firms totaled 656, operating 826 retail outlets with a volume of business exceeding a half billion dollars. On the basis of national experience, it would appear that the types of stores covered by the survey do almost 40 percent of the total retail trade of the District, more than 80 percent of the total sales of durable goods stores, and slightly less than 20 percent of the total sales of nondurable goods stores. If food stores and eating places are excluded, the sales of the surveyed lines comprise 36 percent of the total sales of nondurable goods stores. Reports were received from stores located in 138 cities and towns in the Eleventh Federal Reserve District, with all the principal areas in this District being represented. Almost half of the stores reporting were in cities and towns of less than 10,000 population, while two-thirds were in cities and towns of less than 25,000 population. The survey this year covered total sales, cash sales, and credit sales (charge account and instalment), as well as end-of-year receivables outstanding and inventories for 1948 and 1949. Before considering the detailed information revealed by the survey, it may be desirable to review the general retail picture during 1949 and the various economic developments which influenced retail sales. Economic Trends Affecting Retailing in 1949 Total retail sales in the Eleventh Federal Reserve District and in the Nation as a whole maintained a high degree of stability during 1949, despite the moderate economic readjustment experienced during that period. While total retail sales held close to the 1948 level, sales of many retail lines were affected adversely by the economic readjustment. In fact, sales of all retail lines except the automotive group and filling stations were lower in 1949 than in the previous year and, except for jewelry and liquor stores, represented the first declines since the war. The stability in total retail sales was due largely to the increase in the sales of automobile dealers, which offset the declines in other lines. The increased resistance in consumer buying and the "shopping" for lower prices, which were reflected in the declining sales volume in most lines, resulted in an intensification of competition, accompanied by a narrowing of profit margins and a substantial decline in net profits of many retailers. Failures among retailers increased significantly, although the failure rate continued to be considerably lower than in the prewar period. In the fall of 1948, retailers in many lines began to note a weakening in their sales. Recognizing the implications of their declining sales, they began to appraise their inventories, both as to level and balance, and to take steps to put their inventories on a sounder basis. A substantial selective cancellation of orders was instituted. Although the 1948 Christmas season produced a fairly high level of sales, the declining tendency evident during the preceding few months was carried over into the new year, being particularly noticeable in consumer durable goods. The sharp decline in sales of household appliances and furniture during the first few months of 1949 was an outstanding development in this period of economic readjustment. Even automobile sales, particularly in the used car market, showed some slowing, and a note of hesitancy crept into the construction industry. Merchants energetically attempted to rid themselves of slow-moving items, to reduce stocks of staple items to levels commensurate with the existing demand, and to acquire distress stocks for promotional purposes. Inventory clearance sales became widespread, and orders outstanding were reduced sharply. These cutbacks in orders naturally had their effect on the wholesaler and the manufacturer, who, in turn, attempted to reduce their inventories. Prices were lowered and unemployment increased, particularly in manufacturing industries. While the increase in unemployment was greater in other sections of the country, a larger-than-seasonal rise in unemployment was noted in the Eleventh Federal Reserve District during the first few months of 1949. Oil production in this District was cut heavily, particularly during the first few months of the year, with production in April more than 20 percent less than 4 months earlier and at the lowest DA®;HAR;-··-I'. i i BORGER DUMAS ® I P~PA AM;'LLO • CHILORESl ® PORTALES , ® • ® C ~ OISOEE .""'-. ® LA~CRUCES -L . ---... " J 'WICHITA FALLS I.UBBOCtI ROlRING SPRINGS LA~ESA • CARLSBAD ® ..----.J NI< W® OIG SN~ER ® PECOS " ®@MONAHANS ® C COlORADO GAINESVILLE BOWIE ® ® ® E CAM Y ® STAMFORD OE~ON WEATHER'O~~S ® ® ABU.ENE BREct<ENRIDGE @ KERRVILLE ® MARSH1L.L RUSTON @:PAl~iERREfrAOEWA~TER @ I ~HREVEPORT @ ® •• LONGVIEW (i) f"o1{r WORTH G!..EBURNE • @ENNIS ®CAMERON \t -KILGORE I NOHROE S~ @SEGurN ANTONIO ® ~NROE (i) PASAOr-NA ® ROSENBERG WHARTON~ @ yftl,I(UM E~C PO BAY~ITY TEXAS ALICE ® {""PUS CHRISTI EOIN~RG } MC~L~N~ ®HARLINGEN -......,.@ .. WES A~NSVILLE ~~~E~~ LOUISIANA FERRIDAY ® ®HUNTSVILLE BRENHAM SAN MARCOS ~ ti)LUUNG NEW BRAUNFElS @LOCKHART HO®OO ® B~AN ®rAYLOR ® CITIES COVERED IN 1949 RETAIL CREDIT SURVEY ELEVENTH FEDERAL RESERVE DISTRICT TEXARKANA p*~~~~®®GARlANO AU~I ALPINE GEOGRAPHICAL DISTRIBUTION OF REPORTING STORES I ® MG KINNEY MT.PLEASANT _ _ •• ® @GREEHVILL@ ®ATLANTA~' ® BURNET ® P~I S SH MINERAL Cl.AfH(SV~L "" "" T ®CISCO"" WAXXHACHIE AT'ffENS ER ColHENDERSON SWEE WATER COLEMAN ST"EPHENVILLE (it) ®JACKiONVI LLE\ BALLINGER ® CORSltANA (i) @RUSK ® ® MEXIA@) PALESTINE (i) BROWNWOOD WACO NACO"?iOOCHES • $A"®AJoIGE1.O GATES~I.LE @®MARLIN BRADY LAMPASAS TEMPLE ® ® rf@@I(ILL£EN BARTLE eELiON NAVASOTA "" ®CITY SP~ING!f, ODESSA ® MIDLAND M M ................. GRAHAM ® ® DE @ELECTRA SEYMOUR ® IDABEL ®" ~.. VERNON ® ® BROWNF"IELO NEW MEXICO I ~RIZONA' TUCSON I ~ PADUCAH (i) I . • PlAINVIEW ®SILseEE • @BAYTOWN ANGE ®B1AUMONT H~US V P O R T ARTHUR • LVESTON ®FREEPORT 78 MONTHLY BUSINESS REVIEW level in more than 2 years. Moreover, a sharp decrease in copper and other nonferrous metals mining reduced employment markedly in some portions of Arizona and New Mexico falling within the Eleventh Federal Reserve District, while similar cutbacks in lumber production distinctly affected portions of the District in Louisiana and east Texas. By and large, however, total employment in the District continued at a high level. SELECTED NATIONAL ECONOMIC INDICATORS . MILLIONS OF DOLLARS 1926 100 II. PERCENT 200 I 80 ~WHOLESALE PRICES " I80 I40 I 20 SOtlRCE: II.S.8(JREA(J OF ~~~ S;A~/S;'~S, I , I BILLIONS OF DOLLARS .U. Ll LLt.' I 00 PERCENT 210 200 G0 5",.-- ,,-/ BUSINESS 0 ""'" - """ - ~ INVENTORIES~ v ./"' SOiIHC£: lJ.$.DEPAHrMENT OF COMMERCE. I , I 1948 1949 , . . -INOUSTRIAL PRODUCTION '\ '\ A/ I 90 ~ I 80 VV 5 4o "" , .. 1935 39 100 6 4 .L1 I 70 I60 SOIlR'CC.'FCI)CRAL RESERVE 80ARD. , I 1950 I 50 1948 1949 1950 The decline in industrial production induced by the cutback in orders did not seriously affect the level of consumers' incomes. Moreover, despite this economic readjustment during the first part of 1949, consumer confidence in prospective income was not appreciably impaired, with the result that the level of total retail sales was maintained. While in many lines the dollar volume of sales showed a declining tendency, consumer response to clearance sales and attractively priced merchandise was very good, and merchants were able to maintain their physical volume of sales. In the spring of 1949, automobile sales, which had slowed temporarily during the winter months, again attained heavy volume. Construction picked up seasonally, and consumer buying of appliances and furniture showed some improvement. Consumer instalment credit controls under Regulation W, which had been reinstituted in September 1948, were liberalized in March and again in April and then were abandoned at the end of June, when the temporary authorizing legislation expired. Although industrial production continued to decline to midyear as business reduced inventories, the stability of retail sales augured well for an ultimate upturn in the economy. By fall, automobile sales and construction were at all-time highs. Merchants were again in the market, not only having worked off most of their excess inventories but having allowed stocks of some items to fall below desirable working levels. Oil production in the District increased appreciably, and drilling activity reached a new peak. Business expectations, despite the steel strike, became more optimistic; employment rose; and nonagricultural prices began stabilizing. Farm producton in this District, due in part to unusually favorable weather conditions, established a new record, and farm income attained the high levels of the previous year despite a decline in farm prices. Total retail sales were maintained, and sales picked up in some lines that had been previously depressed. Christmas buying in the Eleventh District reached record proportions, with the dollar volume probably slightly higher than the previous high of the year before and the physical volume noticeably higher, in view of the lower prices which existed. Retail trade, in particular, and business in general in the District ~ MONTHLY BUSINESS REVIEW 79 thus ended the year on an optimistic note. Economic conditions in the Nation as a whole may not have been quite as favorable as in the District, but business optimism was amply evident throughout the country. Total Sales Total sales in the Eleventh Federal District in the lines surveyed, following the same pattern as in the Nation as a whole, showed a slight decline during 1949, after having registered uninterrupted increases in the six previous annual surveys. Automobile dealers TABLE I and auto tire and accessory stores PERCENTAGE CHANGE IN SALES AT RETAIL STORES IN ELEVENTH were the only lines to experience FEDERAL RESERVE DISTRICT AND INDEPENDENT STORES IN larger sales in 1949 than in 1948, UNITED STATES, 1948 TO 1949, BY KIND OF BUSINESS the increases being 17 and 1 perIhdepcodent sLorul Ret.ail Jtores Eleventh District United States Kind of buaine88 cent, respectively. These increases, 14 Automobile dealers . ..... ........ . . . . ...... ... . . .. . 17 however, were sufficient to offset 1 Auto tire and accessory stores .... . ...... . . ...... . . . -8 largely the declines in the other Department stores ..... .... .... .... .............. . -6 -5 -6 -4 seven lines, ranging from 4 to 9 Furniture stores ... . . ... .. . . ...... . .. .. .. .. ....•.. -11 -8 Hardware stores ...... .... .. . . ... . .. . .. . .. .• . ..•.. percent. In all lines the sales HoU!ehold appliance .tores ... .. . .. . ....•.. . ... . . . .. -1 -6 - 12 stores .. .. .. . ... . . ..... . ........ . . ..... . . . -9 performance in this District was Jewelry - 6 Men'. clothing stores ........ .. . . .. . . .. ..... . .... . . -10 better than that of independent Women'. appareistores ............ .. ........... .. . -9 -7 stores in the same lines in the Source of data (or independent .t.oree. Unit.ed States: United States Bureau of C008tta. Nation as a whole, based on data compiled by the United States Department of Commerce. Although the decline in total sales of reporting stores in all lines was less than 1 percent, half of all stores reporting had sales declines of 4 percent or more, and one-third of the stores had declines exceeding 10 percent. The substantially greater number of stores having declines larger than the average for all stores results from the tendency of the larger stores, which constituted a minority in the survey, to show a more favorable sales picture than the smaller stores. Only two out of every five stores surveyed experienced an increase in sales during 1949. It will be noted, however, that 5 percent of the stores had sales increases of 50 percent or more, while one-fourth of the stores had increases of 10 percent or more. DISTRIBUTION OF RETAIL STORES ACCORDING TO Pt:RCENTAGE .CHANGE IN SALES.1948 TO 1949 nEVENTH 'EDERAL RUERVE DISTiller Sales of automobile dealers, still under the stimulus of the backlog of war-deferred demand, rose sharply during 1949 to reach an all-time high. The continued expansion in automobile production, which had been a limiting factor in sales in the earlier postwar years, of course, enabled the dealers last year to make such a favorable showing. The increase in District automobile sales was spread over most dealers, irrespective of the size of the dealership or the make of car sold. More than seven out of every eight dealers reported increases in sales. The impressive sales picture is revealed by the fact that half of all dealers showed increases in sales of 20 percent or more, and one out of every six dealers reported increases of 50 percent or more. Despite these large gains, it will be noted that the 17-percent over-all increase in the sales of automobile dealers was less than the 21-percent increase in 1948 and substantially less than the percentage increase in earlier postwar years. The smaller percentage increase in 1949 in relation to that of prior postwar years naturally is explained by the fact that sales at the war's end had been reduced to extremely low levels, being limited largely to repair work and used car transactions. 80 MONTHLY BUSINESS REVIEW N evertheless, the smaller percentage increase in 1949 sales reflects .the growing competItIOn in the trade as the backlog of consumer demand became more nearly satisfied. Although the list price of new cars evidenced a high degree of stability, concessions in the nature of more favorable trade-in allowances and cash discounts had become common by the end of the year, and priees of used cars dropped appreciably. Total sales of auto tire and accessory stores surveyed rose 1 percent in 1949 to continue the upward trend noted in the seven previous surveys. Although this increase was made despite lower prices for tires, batteries, seat covers, and many other important accessories, the sales picture among tire and accessory stores was not as favorable as might be indicated by the over-all increase. Almost twothirds of the stores experienced decreases in their 1949 sales. Moreover, sales of one-half of the stores were 4 percent or more below those of the year before, and approximately one out of every four stores showed decreases of 10 percent or more. The larger stores tended to have better sales records than the smaller stores. Moreover, those stores which gave greater emphasis to instalment selling appear, by and large, to have been more successful in maintaining their sales volume. TABLE II DISTRIBUTION OF RETAIL STORES ACCORDING TO PERCENTAGE CHANGE IN SALES ' 1948 TO 1949 Eleventh Federal Reserve District Percentage cbange in sales Automobilo dealers -50 and over .... . . . -40 -49.9 .. .. . . -30 - 39.9 ... ... - 20 - 29.9 . . . . .. -10 - -19.9 .... . . - 9.9 . .. ... 0 1 1 4 5 6 + 9.9 .. .... 0 +19.9 . . .... +10 + 29.9 ...... + 20 + 39.9 . . . .. . + 30 +49.9 ... .. . +40 +50 and over ....... 21 31 24 14 6 23 T otal .... . .. .... .. 136 - - Auto tireacd Department aeccssory stores Btores 1 &tor.. Number of stores Hardware Household appliance stores stores Jewelry &\qr" 4 26 36 8 4 4 11 2 2 .. 1 81 2 8 28 31 Meo's clothina: stores Women's apparel stores .. 1 1 3 7 17 46 Furniture 2 9 18 13 19 3 3 4 1 1 12 5 101 60 1 1 2 6 3 11 1 2 6 14 14 All .tores 2 3 10 47 145 185 4 14 31 3 30 26 4 6 1 2 99 59 37 24 12 33 72 656 10 2 2 3 3 5 4 3 1 10 3 2 2 .. 48 4.8 64 1 • Each firm was counted as a sioale store, although in 47 CMCfl. flrlD3 operated more than onB store. The severe weakness in furniture store sales during the early months of 1949 was dissipated in subsequent months, with the high volume of sales during the last half of the year reducing the over-all sales decline for the entire year to 4 percent. In view of the declines in furniture prices which took place during the year, it is probable that furniture stores did a larger physical volume of business in 1949 than in the previous year. The heavy volume of sales of furniture stores during the latter half of the year was undoubtedly influenced by the record volume of residential home construction which occurred during that period. Half of the furniture stores reporting showed a change in their sales volume ranging between decreases of 10 percent and increases of 10 percent, with an additional one-fourth of the stores reporting declines of between 10 and 20 percent. The remaining one-fourth of the stores were about equally divided between those having sales increases exceeding 10 percent and those with sales decreases exceeding 20 percent. \Vhile household appliance stores showed a larger decline in sales during 1949 than furniture stores, the pattern of sales during the year was very similar in these two lines of trade. The boom in residential building during the latter half of the year undoubtedly was as much of a stimulant to appliance sales as it-was to furniture sales. Moreover, in some of the larger cities in the District the advent of television broadcasting furnished a large market for television sets for both household appliance stores and furniture stores. In some respects, the sales picture for household appliance stores was more favorable than for furniture stores. For instance, despite the 6-percent decrease in the total sales of all appliance stores reporting, more than half of the appliance stores reported increases in sales for 1949. Moreover, one out of every fou r stores reported increases in sales exceeding 20 percent, and one out of every ten stores had increases exceeding 50 percent. MONTHLY BUSINESS REVIEW 81 Hardware stores, with a sales decrease of 8 percent, had a poorer sales record in 1949 than any of the other lines surveyed except jewelry stores. Almost one out of every five hardware stores reported a decrease in sales of 20 percent or more. The less favorable showing of hardware stores may reflect, in part, the intense competition that prevails for this type of goods-competition for hardware goods which extends from national department stores and mail order houses to drug and variety stores. Continuing the softness which developed in consumer luxury goods about a year and a half after the end of the war, sales of jewelry stores showed a decline in 1949 for the third successive year. Total sales of reporting jewelry stores were 9 percent less than in 1948, as compared with a I-percent decline in 1948 and a 10-percent decline in 1947. More than three-fourths of all the jewelry stores surveyed experienced lower sales, with almost half of the stores reporting decreases exceeding 10 percent. Sales of men's clothing stores were down 6 percent in 1949, the second successive annual decrease. A shift in consumer buying from the higher-priced to the medium- and lower-priced clothing, a development which was facilitated by the greater availability of lower-priced merchandise, was an important factor in the decline in the dollar volume of sales. In addition to this trading down, prices of clothing actually declined moderately, and prices of some lines of men's furnishings declined rather substantially. Despite the decline in the dollar volume, the physical volume probably showed little change from 1948 levels. Nevertheless, the sales volume of men's clothing stores appears not to have held up as well as the sales of men's clothing departments in department stores. Almost four out of every five stores surveyed reported sales decreases, with almost half of the stores experiencing declines up to 10 percent and one in five stores having declines between 10 and 20 percent. Although a little over one-fifth of the stores reported increased sales, the gains at most of these stores were less than 10 percent. In contrast with the weakness in the demand for consumer durable goods during the early months of 1949, women's apparel stores began the year with a fairly high sales volume, but after Easter, sales dropped off noticeably and continued at a disappointing level throughout the remainder of the year. The major style change of 1947, which after a reluctant consumer acceptance had stimulated sales considerably during 1948, thus appeared to have largely dissipated its influence after the first few months of 1949. Moreover, the strong demand for consumer durable goods after midyear undoubtedly had an adverse effect on women's apparel sales. Total sales of women's apparel stores in 1949 were 7 percent less than in the previous year. As in the case of men's clothing stores, a decline in prices was responsible, in part, for this lower dollar volume, and the physical volume of sales probably was not much lower than in the previous year. Over four-fifths of all stores reporting showed declines in sales, with half of the stores showing declines exceeding 9 percent. A little less than 20 percent of the stores experienced increased sales, and only about one store in eight showed increases of 10 percent or more. Because department stores have such a large variety of merchandise, including consumer durable goods as well as apparel and other soft goods, the sharp decline in sales of consumer durable goods during the early part of last year was partially offset by the continued large volume of apparel sales. Moreover, the later easing of women's apparel sales was counterbalanced by the increase in sales of consumer durable goods. Consequently, department store sales, although showing a moderate decline for the year, had a higher degree of stability during the course of the year than some of the other types of stores. Furthermore, while consumer durable goods stores made a more favorable showing than the soft goods stores, the sales experience of the department stores fell between these two general categories. The intensification of competition, the decline in prices, and the aggressive action in reducing and balancing inventories, which were evident in the other lines of retail trade, were particularly noticeable in department store activities. Total sales of department stores in 1949 were 5 percent less than in the previous year. D epartment stores, it will be noted, showed a smaller variation in sales performance among the individual stores than any other line. Almost half of the department stores reported sales decreases ranging 82 MONTHLY BUSINESS REVIEW between 5 and 15 percent, and four out of every five stores had decreases up to 20 percent. About one in six stores showed increases, most of which were less than 10 percent. Cash Sales The declining trend in cash sales which became apparent during 1947 continued in 1949 at an accelerated rate. Total cash sales of all kinds of stores surveyed declined 6 percent last year, with three out of every four stores experiencing a decrease. Automobile dealers were the only line to show an increase in cash sales. A substantial increase in consumer financing of automobile purchases directly through financial institutions was probably responsible for the rise in cash sales of the automobile dealers. As revealed in Table III, declines in cash sales of other lines ranged from 9 percent for department and women's apparel stores to 23 percent for furniture stores. In the case of the latter type of store, nine out of every ten experienced lower cash sales. TABLE III PERCENTAGE CHANGE IN SALES ACCORDING TO TYPE OF TRANSACTION BY KIND OF BUSINESS, 1948 TO 1949 Eleventh Federal Reserve District Kind or business Automobile dealers ............. . ... . Auto tire and accessory stores ....... . Department stores ................. . Furniture stores . .. . ........... . ... . H ardware stores . . . .. .. ........ . .. . . Household appliance stores ......•. . .. J ewelry stores .. .. . . . . . . .. ... . .... . . Men's clothing stores . .. . ..... ... ... . Women's apparel stores ... . . . . ..... . . All stores ... . . . ........... . .... . Casb sal .. 7 - 12 Charge account oaJ.. Ill6talment. ..I" -9 3 - 16 - 3 - 7 -4 -10 -1 - 2 -4 15 - 3 21 - 4 - -3 19 -9 - 23 -12 -13 - 18 -13 6 I lodioate& c.hange of leM Lhan one-hair of I percent. 72 22 5 # 28 This widespread decline in cash sales last year reflects, in part, the reduction in total sales of most of the retail stores. Nevertheless, the less favorable showing of cash sales than credit sales is indicated by the decrease in the proportion of total sales which cash sales constituted. Cash sales comprised only 40 percent of the total sales of the stores surveyed, as compared with 42 percent in 1948. Cash sales have made up a progressively smaller proportion of total sales since the war ended. This decline in the proportion of cash sales was evident in all lines last year. Credit Sales While aggregate credit sales for the nine lines surveyed showed a slight decline last year, they made a much stronger showing than cash sales. Moreover, the smaller credit sales were almost entirely the result of a decline in charge account sales; instalment sales increased markedly in a majority of the lines and were undoubtedly an important factor sustaining total sales in 1949. Charge account sales declined TABLE IV last year in eight of the nine lines PERCENTAGE DISTRIBUTION OF SALES ACCORDING TO TYPE OF covered, with only automobile TRANSACTION, 1948 AND 1949 dealers showing an increase in this Eleventh Federal Reserve District type of transaction. For most lines the decline was small, but Charge account ill!taJment sales Totalaales Cash sale5 oaJes auto tire and accessory stores and 1948 1949 1948 1949 1948 1949 1948 1\H9 Kind of business household appliance stores experi23 28 19 100 100 Automobile dealers. . . . . . . . . . .. 52 20 58 enced declines of 16 and 10 per- Auto tire and accessory stores.. 42 11 48 40 100 100 49 10 54 8 8 100 100 Department stores. . . . . . . . . . . . 38 39 53 cent, respectively. Of the eight Furniture 71 67 100 100 stores . . . . . . . . . . . . .. 13 17 16 16 lines having lower charge account H ardware stores. . . . . . . . . . . . . . 48 100 100 44 7 51 45 5 100 100 34 37 44 38 Household appliance stores. . . .. 22 25 sales, however, the declining tend- Jewelry 37 25 23 100 100 stores. . . . . . . . . . . . . . .. 36 40 39 ency was not universally apparent Men's clothing stores. . . . . . . . .. 46 1 100 100 52 50 2 49 2 100 100 2 42 57 56 in all stores. For instance, two out Women's apparel stores.... .. .. 41 100 42 43 18 15 100 All stores. . . . . . . . . . . . . . . .. 40 42 of every five stores in the auto tire and accessory line, furniture line, and the hardware, the household appliance, and the jewelry lines had increases in their charge account sales, and one out of three of the department and women's apparel stores had increases. Moreover, a substantially larger number of men's clothing stores showed increased rather than decreased charge account sales. ~ 83 MONTHLY BUSINESS REVIEW The heavy demand for consumer durable goods, together with the relaxation and later expiration of consumer instalment credit controls in midyear and the progressive easing of credit terms, tended to foster a strong expansion in instalment sales. Intalment sales, in the aggregate, rose 19 percent. Particularly sharp increases in instalment sales were noted among automobile dealers and hardware and auto tire and accessory stores. Increases exceeding 50 percent were reported by 9 out of every 10 automobile dealers and, exceeding 500 percent, by 7 out of every 100 dealers. Almost one-third of the hardware stores showed increases in instalment sales exceeding 50 percent, while one out of every five auto tire and accessory stores had like gains. The proportion of instalment sales to total sales of all lines increased from 15 percent in 1948 to 18 percent in 1949. Despite this increase, it will be noted that instalment sales still constituted a smaller proportion of total sales of these lines than in the prewar year 1941. Accounts Receivable Accounts receivable outstanding, after a temporary dip in the early months of the year, continued in 1949 the markedly expansionary trend evident since the end of the war. The growth in consumer credit in the District, as indicated by the survey, parallels the increase which occurred throughout the Nation. Not only has the conTABLE V tinued heavy demand for consumer durable goods had a powerful effect PERCENTAGE CHANGE IN TOTAL ACCOUNTS RECEIVABLE, OPEN CREDIT AND INSTALMElI.'T RECEIVABLES in increasing consumer instalment BY KIND OF BUSINESS, 1948 TO 1949 credit outstanding, but the lowering of down payments and the lengthEleventh Federal Reserve District Ill3talmenl ening of pay-out periods following Total accounts Open credit Kind of bwines8 receivable receivables receivables the expiration of Regulation W . 18 Automobile dealers . . . ............•.. 46 125 have exerted a strong influence in Auto tire and accessory stores ....... . 12 5 # D epartment stores ................. . 9 2 33 this direction. With the intensified Furniture stores ..... . . .. ....... . • .. 21 7 ~~ competition which existed in 1949, H ard ware stores .. . ........ . .... . .. . 22 23 Household appliance stores ......•. . . . 3 40 52 the easing in credit terms became, Jewelry stores ........... ...... .... . 1 -5 ~ in some cases, an important selling Men's clothing stores .. ............. . 5 5 Women's apparel stores ............. . 5 5 6 factor. In addition, consumers' in30 comes were being stretched more All stores . .. .. . ................ . 12 3 and more to meet commitments I Indicates change of less than on&-halr of 1 percent. arising from past purchases, with the result that collections tended to slow. Indicative of this was the increase occurring in most lines in their open credit receivables, at the same time that charge account sales generally were showing a decline. All lines of retail trade surveyed showed an increase in receivables outstanding for the year, irrespective of the declines in sales experienced by most stores. Although the most marked expansion TABLE VI DISTRIBUTION OF RETAIL STORES ACCORDING TO PERCENTAGE CHANGE IN ACCOUNTS RECEIVABLE* 1948 TO 1949 Eleventh Federal Reserve District Percentage change in accounts receivable Automobile Auto tire and Department accessory stores dealers &\ores -50 and over ....... -40 - -49.9 ...... -30 - -39.9 .. .... - 20 -29.9 .... . . -10 - - 19.9 .. . ... 0 - - 9.9 ...... 0 +10 +20 +30 1 1 - 3 3 4 7 12 6 1 2 3 2 9 14 - 12 6 17 10 6 7 \) 3 22 18 3 3 Furniture ,10m! 4 5 13 6 5 3 9 16 6 7 105 86 68 39 36 92 589 3 2 49 36 36 60 65 43 75 94 &I 1 3 12 1 131 counted 1 1 9 6 3 8 8 24 49 71 4 Total. ............ W&I 1 14 3 a single store. although in '3 cases. firms operated more 'ban one store. 3 3 2 All stores 1 21 9 5 1 2 4 9 firm Women's 4 7 7 4 3 7 13 39 ~ch 3 1 Men'a clothing stores apparel stores 1 2 4 10 18 18 17 9 11 10 • 1 1 5 2 1 Jewelry stores 1 1 3 6 + 9.9 . . ... . +19.9 .. . .. . +29.9 . .. ... +39.9 ...... HO - +49.9 ...... +50 and over ....... 1 Number of.tares Hanlwaro Household ,tor.. appliance atores 84 MONTHLY BUSINESS REVIEW occurred in the instalment receivables, charge accounts for all stores, with the exception of jewelry and auto tire and accessory stores, showed an increase. The greatest expansion in receivables was in the consumer durable goods stores, with automobile dealers and household appliance stores reporting outstanding increases of 46 and 40 percent, respectively. Moreover, in these two lines, the receivables failed to reflect the large sales in instalment paper made during the year. Most retail stores in all lines except automobile dealers retained their instalment paper, financing it either through their own resources or by other means. A majority of the automobile dealers, however, sold the bulk of the instalment paper accumulated through their sales. A significant number of household appliance stores also sold their instalment paper, while a small number of auto tire and accessory, furniture, and hardware stores financed instalment sales, in part, through the sale of such paper. Despite the fact that such PERCENTAGE CHANGE IN INVENTORIES,BY KINOS OF BUSINESS sales more than doubled during 1949, however, ""''''''.'''' ,. "".'" _."" the instalment receivables of these stores illELE VENTH FEDERAL RESERVE D'STR'CT creased sharply. WO.EN·S APPAREL ' STORES • •• •1 JEWEL.RY STORES In connection with the large expansion ill HAROWARE STORES instalment credit among the stores surveyed in this District, it is important to note that total DEPARTMENT STORES instalment credit in the Nation rose during 1949 MEN'S CLOTHING STORES almost 27 percent to $10,891 million. This large F'URHITURE STORES increase was due chiefly to the tremendous exAUTOMOBILE DEAI.ERS pansion in instalment credit for automobiles, which rose from $1,961 million at the end of AUTO T IRE AND ACCESSORY STORES • • •• • 1948 to $3,144 million one year later. InstalHOUSEHOLD APPLIANCE STORES • • • • •• • ment credit arising from the sale of other consumers' goods rose $529 million to $3,096 million, while consumers' loans payable on an instalment basis were up $ 579 million to $4,651 million. Inventories The reduction in inventories, which was probably the most outstanding characteristic of the economic readjustment in the District and in the Nation during 1949, was clearly manifested by the survey. Aggregate inventories of all stores reporting were 5 percent lower at the end of 1949 than on the same date of the previous year. Seven of the nine lines showed decreases; only jewelry and apparel stores indicated higher stocks. Automobile dealers and household appliance stores were two TABLE VII DISTRIBUTION OF RETAIL STORES ACCORDING "TO PERCENTAGE CHANGE IN INVENTORIES' 1948 TO 1949 Eleventh Federal Reserve District Percentage change in in ...cntorics Automobilll dealers - 50 and over ... . . .. -40 - -49.9 .... .. -30 - -39.9 ...... -20 - 29.9 .. .... -10 -19.9 .... . . - 9.9 ...... 0 13 11 18 16 11 9.9 . ... . . - ++ 19.9 .... .. -- +29.9 ...... - +39.9 ...... HO - +49.9 . .. ... +50 and over . . . .. . . Total ............. - 0 +10 +20 +30 Auto tire and Department accessory stores stores \) 2 4 4 7 1 4 23 23 12 12 8 5 5 13 11 1 2 14 14 1 133 45 10 1 Furniture stores Number of Btores Household Hardware appliance stores stores 2 3 8 12 20 21 8 3 4 2 .. 3 1 80 84 • Each firm was counted as a single store, although in 43 cases, firms operated more than one sLore, Jewelry stores .. 1 3 Men's Women's clothing stores apparelstores 2 1 4 G G 14 14 8 17 4 3 14 5 3 1 .. 4 10 18 5 3 13 7 8 8 3 1 5 3 2 2 1 2 2 2 .. 1 54 47 48 .. 1 All stores 12 23 .. 35 .5 12 22 62 126 140 86 61 27 14 9 1 10 12 3 3 1 3 59 71 621 26 MONTHLY BUSINESS REVIEW 85 lines showing some of the larger reductions in inventories, with decreases averaging 12 and 19 percent, respectively. Although these substantial reductions in inventories may have been due, in part, to a policy of inventory liquidation, an important factor in the lower stocks was an inability to secure adequate replacements late in the year. The steel strike, together with model changeovers in the case of automobiles, curtailed production in these lines. Nevertheless, it will be noted that the lower year-end inventories were at a time when retail trade began evidencing a buoyant tone in this District and consumer demand w as very strong for durable goods. In contrast, sales had been declining the year before, with marked weakness apparent in durable TABLE VIII goods. In fact, the only lines showing year-to-year increases in PERCENTAGE CHANGE IN SALES AND INVENTORIES BY KIND AND LOCATION OF BUSINESS, 1948 TO 1949 their inventories-jewelry and women's apparel-were lines in Eleventh Federal Reserve Dis trict which the sales pattern at the end Number P ercentage chauge 1949 over 1948 of 1949 did not compare favorKind of businw by locativo of storce Inventories Total sales ably with a year earlier. Automobile dealers : Austin ................... .. ..... . Dallas ....... . ......... • .. .. . . ... Houston .. . ...... . .......•..... . . TJubbock .............. . . ... . .. . . . San An tonio ......... . . . ..... . ... . Department stor es: Dallas .................... . . . ..• . Fort Worth ... . . . . . .. . ... . . ..... . H ouston ...... . .... . ...... .. . . .. . San Antonio ....... . ... . . . . . .. . . . . Fur niture stores: Beaumont ... . .. . ... . ........... . Dallas ......... ... ... . ....... . .. . Houston . ..... ... . ... . . ......... . P ort Arthur .. . .. . ......... .. .... . San An tonio ..................... . Shreveport ..... . . . . .. ... . ...... . . H ousehold appliance stores: Dallas . . .. . .. . .......... . Jewelry stores: Dallas ....... . ........... • ...•.•. Houston . . . ....................•. Men's clothin g st ores: H ouston .... . ........ . . .. ....•... P ort Arthu r ........... . ......... . Shreveport ....... . ..... .. . .. . . .. . Women 's apparel stores: Dallas ...................... . • . • . Galveston ............. .. . .. . . •... Houston . . . . .... . . . . .. .....•.. . • . San Antonio .. .. ...... . . . . .... . . . . Shreveport .. . .......... .. ....... . 4 4 3 4 4 20 -2 25 26 - 10 -25 -10 - 10 15 G -5 -2 -7 -11 5 6 6 3 7 14 -16 7 - 21 -18 5 - 19 - 4 3 -22 -17 - 5 5 3 3 -5 -6 -3 -4 -2 -8 5 3 5 3 4 - 10 -7 6 3 4 4 1 5 5 - 5 8 -17 -5 - 10 - 38 - 15 10 6 0 13 49 -If -5 23 -11 -5 -8 - 19 I Indicates cbange of 1e!S than on~bal£ of I percent. had lower inventories at the end of the year than at the end The over-all decline in inventories in the various lines tends to hide the large variation which existed in the year-end stock position of the individual stores. In other words, despite the over-all decline, one-third of all firms surveyed showed higher stocks on December 31, 1949, than a year earlier. Variation in inventories was noted particularly among automobile dealers, with a substantial number reporting increases exceeding 50 percent and quite a few having percentage decreases of like amounts. Although three out of every ten furniture stores reported decreases of 20 percent or more, two in every five showed increases. Moreover, despite the noticeable increase in the aggregate stocks of jewelry stores, three-fourths of all such stores of the previous year. Recent Trends and the Outlook for Retail Trade Retail trade in the District during the first few months of 1950 has evidenced a buoyant tone, with particular strength apparent in the consumer durable goods lines. Sales of automobiles, household appliances, and furniture have been at high levels. The noticeable reduction in prices and the widespread clearance sales which marked the early part of 1949 have not prevailed this year. Nevertheless, many phases of the economic readjustment last year as related to retailers have carried over into this year. Among these aspects of readjustment are: ( 1) R etail stores are continuing to show a diversity in their sales performance, not only among the t ypes of lines but also within the same line. In contrast with the strength of sales of the consumer durable goods stores, some of the nondurable goods stores have been having disappointing sales. Moreover, business failures among retail stores are rising. 86 1I1ONTHLY BUSINESS REVIEW (2) Competition in practically all lines has continued to be very keen, and aggressive merchandising has been necessary to stimulate sales. Profit margins are narrowing, although net profits have been more satisfactory than during the first half of 1949, when stores, in some cases, took inventory losses in order to move excess inventories and eliminate slow-moving merchandise. (3) Prices, while showing a high degree of stability during these early months of the year, still give indications of being under pressure toward downward readjustment. Consumers have continued to be very selective in their buying and are "shopping for bargains." (4) Despite the improved tone in consumer buying, merchants continue to follow a conservative inventory policy, holding to short-term ' commitments and limiting purchases to stock replacement and attractively priced merchandise for promotional purposes. (5) The shift in retail trade from cash sales to charge account sales and from charge account sales to instalment sales has continued. The liberalization of credit terms is becoming an increasingly important factor in sales. Instalment accounts receivable have continued to expand as a result of the heavy volume of instalment sales, the lengthening of the pay-out period, lowering in down payments, and the tendency among consumers to be less prompt in meeting their commitments. Insofar as the continued rapid expansion of consumer credit and the use of liberal credit terms have been important in the sales of merchandise, the situation is not reassuring for the long-term maintenance of a high level of retail trade. Economic activity in the District-the industries which supply the consumers with the funds to buy-has shown considerable strength during the first few months of the year. Although oil production was reduced slightly during the first 3 months, production allowables were increased 'substantially in April, and the industry's unfavorable stock position which prevailed during most of 1949 has improved considerably during recent months. Housing starts have been at record levels, and the unusually large volume of construction contract awards lends promise to the industry in the months immediately ahead. The veterans' insurance refund has been giving additional purchasing power to the consumer, and the high level of retail trade is, in itself, generating income for those large groups of retail employees who are, themselves, consumers. While the 75-cent wage minimum appears to have caused difficulty for some lumbering concerns, the demand for lumber has improved considerably in recent months. Mining activity has picked up. Despite the present strength in the economy of the District, some factors bear watching for the possible effect they may have on retail trade during the latter part of the year. Farm income may drop appreciably, since lower prices are anticipated and the record crop production of last year probably will not be duplicated, in view of acreage controls and possible weather conditions less favorable than the unusually good weather of 1949. Although the veterans' insurance refund may have a stimulating effect on retail trade over much of the year, the most noticeable influence will have passed when distribution is completed within a few months. The expansion in consumer credit, which has been stimulating trade, cannot be expected to continue indefinitely. The oil industry is moving into the summer months, when demand is normally lower than in winter; and the pressure of oil imports, as well as the competition from natural gas, could weaken the precarious stability of crude prices. Moreover, in the Nation, the sustaining influence of record automobile production may become less powerful as the backlog of deferred demand is eliminated. Adjustments in this industry, a declining tendency in capital expenditures, and a reduction in the Nation's exports as a result of the currency devaluations in foreign countries are factors which need to be watched. A weakening in the national economy would undoubtedly have repercussions in the District. While unfavorable developments among any of the above factors may not foreshadow a decline in retail trade, the existence of these situations should temper the optimism generated by the present buoyant tendency of retail trade. « MONTHLY BUSINESS REVIEW 87 Review of Business, Industrial, Agricultural, and Financial Conditions DISTRICT SUMMARY Prospects for crop production in the Eleventh Federal Reserve District in 1950 were greatly improved by the rains received over wide areas around mid-April. The planted acreages of corn, grain sorghums, and cotton received ample moisture for germination, and the , ceding of these and other summer crops is being rushed to completion. The rains also benefited small grains, pastures, and ranges in mOSt areas, although the moisture received was inadequate in much of the northern High Plains and in some western and southwestern sections of the District. The 1950 Texas wheat crop was forecast on April I at less than 25,000,000 bushels, or one-fourth last year's crop and the smallest in 14 years; it appears that the rains were too late to improve greatly the production in the Texas Panhandle. Commercial vegetable crops generally are in good condition, although moisture shortages still exist in some areas. Livestock are in fair to good condition and arc expected to gain weight rapidly as ranges and pastures respond to the improved moisture supply. Department store sales in the District in March continued to exceed year-earlier levels for the fourth consecutive month, but their showing was not quite as favorable as in February. Easter apparel buying failed to equal the very satisfactory volume of last year. On the other hand, the unusually heavy demand for consumer durable goods continued to bolster department store sales, with major appliances and radio and television sales showing extremely sharp gains over year-earlier levels. Sales at furniture stores in the District were up seasonally in March, registering marked year-to-year gains for the sixth successive month. Daily average production of crude petroleum in the District declined slightly further in March and was about 250,000 barrels lower than a year earlier. Due to the increase in Texas allowables, the April production rate is expected to exceed that in March by about 130,000 barrels and that in April last year by about 100,000 barrels. Reflecting the strong demand for petroleum products thus far this year, United States stocks of principal products declined sharply during the first quarter and at the end of March were considerably lower than a year earlier. The value of construction contracts awarded in the District during March rose to the highest level since the wartime peak in October 1942. T otal awards of $110,000,000 were 62 percent greater than in February and 72 percent larger than in March 1949. Awards during the first quarter of 1950 exceeded those in the corresponding quarter of 1949 by 57 percent, reflecting largely the 135-percent increase in residential awards. The continuance of the large volume of residential awards is an evidence of the strong demand for housing in the lower-priced brackets. Selected member banks in larger ci tics of the District reported an increase of more than $44,700,000 in total deposits during the 5-week period ended April 12, with approximately three-fourths of this growth accounted for by an increase in demand deposits of individuals, partnerships, and corporations. The total loans of these banks showed little change during the period, but investments rose by about $3 1,000,000. BUSINESS Consumer buying in the Eleventh rederal Reserve District during March continued the strong showing evident in other recent months, although the retail sales picture was not quite so favorable as in February. Sales at District department stores exceeded year-earlier levels for the fourth consecutive month, with the March volume showing a year-to-year increase of 5 percent as compared with an increase of 7 percent in February. Easter appa rel buying, which is normally a dominant element in department store trade at this time of year, got off to a slow start during the first part of March. This slow pace may have reflected the depressing influence of income tax collections, as well as a tendency of consumers to delay Easter shopping now that a wide selection of merchandise is available. In the latter half of the month sales picked up markedly, but the total dollar volume for March showed a less-than-seasonal increase from the previous month. The sustained gains in department store sales over yearearlier levels have been due to the stimulating effects of the distribution of veterans' insurance refunds, a continued high level of COnsumer income, the confidence in the business outlook, the strong demand for consumer durable goods, and the liberalized credit terms which are now available. The veterans' insurance refund, it should be noted, has been paid-out at an extremely rapid rate, with more than three-fourths of the total refund having been distributed by the end of March. It is expected that the refund will have been largely completed by the end of April. Although retail trade may be bolstered during the corning months by the continued expenditure of insurance refunds, as well as by the improved financial position of veterans who have used the refunds to reduce indebtedness, the influence of the refunds probably will be less pronounced. The dominant reason why department store sales did not reflect the fulJ seasonal increase in March was the failure of women's apparel sales to come up to expectations. Sales of women's and misses' dresses were 9 percent below the March 1949 level, women's and misses' coat sales were 20 percent less, and sales of women's and misses' ready-to-wear accessories were 1 percent less. It will be noted, however, that sales of women's apparel in March of last year were still at a very high level. In contrast with the year-to-year decline in women's apparel sales, sales of men's clothing showed a healthy increase of 11 percent. The heavy demand for consumer durable goods continued to be a vital force maintaining department store sales. Sales of major household appliances in March were double the somewhat depressed level of the same month a year ago and were at the highest level for any month on record. Moreover, sales of radios, phonographs, and television sets, due largely to the latter item, were more than double the sales volume of the same month a year ago, while furniture and bedding sales showed a 17 -percent increase over the volume of a year earlier. Of the major housefurnishing lines, domestic floor covering was the only one to show a year-to-year decline, with a decrease of 2 percent. Instalment buying continued at a very high level in March, reflecting the heavy demand for conSumer durable goods which are normally purchased on a deferred-payment plan, as well as the liberalized credit terms now prevailing. The ratio of instalment sales to total sa les rose from 11 percent in February to 13 percent in March to constitute the highest proportion on record. The ratio of charge account sales to total sales showed a small decline for the month and, at 56 percent, was 4 percentage points lower than in March last year. Meanwhile, the declining trend in the proportion of cash sales which has been ev ident in recent years continued in March, with cash sales comprisin g only 31 percent of total sales, as compared with 34 percent in the same month last year. MONTHLY BUSINESS REVIEW 88 The ratio of collections to receivables outstanding for both instalment accounts and charge accounts rose noticeably, reversing, in the case of the instalment collection ratio, the downward trend apparent during the past 8 months. While these increases in the collection ratios may be due, in part, to the use of veterans' insurance refunds to payoff accumulated debts, it will be observed that the collection ratios customarily tend to rise during the month of March. WHOLESALE TRADE STATISTI CS ===K.;~ Percentage change in =Marcb 1950KetsaIes from 3 mo. HI50 March 1949 Lines of trade:· Automotive snpplies..... ........ Drugs and sundries. . . . . . . . . .. . .... Dry ,ood!.. .......... ... . . . . . . . .. Grocery <full-line wholeMlers not eponsormg groups). . . . . . . . . . . . . . . Hardware...... .............. Industrial supplies. .. . . . . . . . . . . . . . . Machinery equipment and supplies except electrical. .. .. . . . . . . . . . .. . Tobacco products. . . .. .. . . . .. .. . . . Wiring 8upplie!, constnlction material! distributors........... .... Feb. 1950 compo wit.h 3mo, 1949 - 10 16 :; 32 12 16 - - 2 11 - - I) 4 8 23 -36 1 Stockat March 19/iO from March Feb. 1949 19bO 4 5 1 -15 5 8 -# 3 :; -6 - 4 -22 -2 2 - 24 2 19 25 4 13 5 23 - 14 • Preliminary data. Compiled by United States Bureau of Census. t Stocks at end of month. , Indicates change of less than one-ba1f of 1 percent. 2 I -8 ===N."~ Percentage cbange in =March 1960NetfromsaltJI 3 mo. 1950 MarchStochlt 1950 from March Feb. 1049 1950 5 5 5 24 17 g'!ll: ~.h.r~~::::::::::::::::::: : Fort Worth ...................... . Houston .. ..................... __ _ San Antonio . .................... . Shreveport. La .. . . ... ... ... . . . ... . Other cities .. ................. . .. . Furniture stores: Total Eleventh District . . ___ . . . . . . . Dallas ............ .. .... .. .. .. , Houston......... .... .. . . .... Port Arthur. . . . . . . San Antonio . ......... ............ Shreveport, La. . . . . . . . . . . . . . . . . . Wichita Falls ..... ..... ,...... . Household appliance stores: Total Eleventh District. ........... Dallas . . . . ....................... 7 -5 13 4 8 24 21 23 31 21l 22 compo with . March 3 mo. 1949 1949 5 5 5 8 -3 9 4 Feh. 1950 3 9 -6 6 3 6 - 3 14 10 10 8 6 _. 11 ii 20 21 8 - 4 -2 - 27 - 4 's -7 - 6 0 28 20 21 115 22 95 29 14 14 10 -t6 26 23 - 18 3 • Indicates change of less than one·half or 1 percent. t Stocks at end of month. INDEXES OF DEPAHTMENT STORE SALES AND STOCKS Daily average sales - (1935-30 - 100) Mar. Eleventh District ... . . Dallas .......... ,'" , Houston . ... . ... .. ... 1960 362 344 374 Unadjusted' Feb. Jan. 1950 327 318 342 1950 313 201 343 Stocks- Mar. 1950 Eleventh District ... .. 384 1949 352t 335 394r M.... 1950 880 366 435 Adjusted Jan. Feb. Mar. 1950 1949 400 331 389 1950 396 3M 440 391r ab6 4b9r ( 1935-39 ~ IOO) Unadjll!ted' Feb. Jan. 1950 357 Mar. 1950 328 Mar. 1949 393r Mo.r. Adjusted Feb. Jan. 1950 302 1950 304 1050 353 Furniture store sales in the District showed a marked seasonal increase in March and, with a year-to-year increase of 14 percent, exceeded year-earlier sales for the sixth consecutive month. Heavy instalment buying continued to be responsible for the favorable sales performance of the furniture stores, since cash sales continued markedly below year-earlier levels. Collections showed a moderate gain, with the result that accounts receivable outstanding showed a small decrease for the month. Receivables outstanding at the end of the month were 33 percent higher than on the same date of last year. Merchants continued to build their stocks for the spring season, with inventories at the end of the month up 3 percent from a month earlier. Despite the heavier volume of sales this year, however, furniture store inventories are continuing noticeably smaller than a year ago, reflecting the generally conservative inventory policy being followed by the trade. 6 RETAIL TRADE STATISTICS Department stores: Tot..1 Eleventh District . .......... _ tive stock positions, their purchasing policies indicate a greater confidence with respect to the sales outlook this year than last. M"" 1949 370, r-Reviscd. , Unadjusted for scB:!onal variation. Department store stocks in March showed about the usual seasonal increase. Despite the higher sales volume, however, inventories at the end of the month continued to fall slightly below year-earlier levels. On the other hand, orders outstanding at the month's end were up 11 percent from the same date last year. Although merchants are continuing to maintain conserva- AGRICULTURE Widespread rains around mid-April brought temporary relief from the drought that had prevailed in many parts of the District for several months. Winter and early spring crops, as well as pastures and ranges, were greatly benefited by the timely addition to the seriously depleted moisture reserves. Some summer crops which were planted but had not germinated because of the lack of topsoil moisture are expected to make rapid development. Furthermore, farmers will be able to move ahead rapidly in preparing land and in planting summer crops. The rains came too late, however, to be of great benefit to flax and some of the winter grain crops, although early planted cotton in the Coastal areas is expected to overcome the effects of the drought except where damaged by insects. Livestock generally are in fair to good condition, and rapid improvement is expected to follow the recovery of ranges and pastures. The United States Department of Agriculture forecast on April 1 a 1950 winter wheat crop in Texas of 24,940,000 bllShels. This estimate, which is the smallest since 1936, is only about one-fourth as large as the 102,848,000-bushel crop produced last year and less than one-half the 10-year (1939-48) average. The 6,235,000 acres seeded to wheat last fall is 19 percent below the record 7,697,000 acres seeded for harvest in 1949, which reflects the effect of acreage allotments. The indicated yield of 4 bushels per seeded acre compares with a 10-year average of 10.5 bushels. This sharp reduction in wheat yields is the result of serious drought and green bug infestation in many of the principal wheat producing sections of the State. Wheat has been holding up fairly well over much of the Low Rolling Plains and the northern Blacklands of Texas, and the rains received during mid-April are expected to increase production over April 1 prospects. The outlook for 1950 oat production in Texas is very poor. Green bug infestation and droughty conditions caused considerable loss of oats in the northwestern part of the State, and before the rains it was too dry in other areas for spring seeding. At mid-April, winter oats were heading in Central Texas, but straw was short and heads were not filling properly. Corn planting was extended during April into all areas of the State except the northwest, but at midmonth considerable corn remained to be planted in the northern counties. Completion of corn planting had been delayed by the dry weather, while much of the planted corn had failed to germinate. Droughty conditions also caused delay in planting of grain sorghums but, as fairly heavy rains were received over most of the grain sorghum producing areas, it is expected that a very large acreage will be 89 MONTHLY BUSINESS REVIEW planted. South Texas flax was ripening at mid-April, but yield prospec ts were so low in somc fields that farmers were salvaging the crop for feed. Cotton planting has been practically completed in south Texas and the Coastal Bend, and the crop in these arcas is up to a good stand, although some fields have been infested with thrips. In other parts of the State, much cotton remained to be planted following the rains. Planting of rice has been making satisfactory progress under generally favorable conditions. Pecan trees were leafing out in all parts of Texas in early April, while peach trees in the central part of the State were blooming. Progress of commercial vegetables was retarded during the first part of April by strong winds, cool nights, and the lack of moisture, and practically all sections were affected to some extent. Vine crops such as cantaloupes, cucumbers, and watermelons in the early sections were hurt, and planting in the later areas was stopped until conditions were improved. The winds also caused damage to the tomato crop being harvested in the Lower Valley and delayed the progress of late plantings. In most of the later tomato producing areas, plants were still in cold frames prior to the mid-April rains because of the need for moisturc before setting to the fields. The south Texas onion harvest was under way at mid-April in all areas except the Eagle Pass and Wilson-Karnes sections. North Texas onions arc expected to benefit greatly from the April rains as the crop had been in need of moisture. Planting of the irrigated onion and potato crops in the Panhandle has been making good progress. The early spring crop of snap beans in Texas is estimated by the United States Department of Agriculture at 270,000 crates, compared with the 325,000 crates harvested in 1949. The estimate of the State's early spring cucumber crop is placed at 210,000 crates, or 30,000 below last year. The production of early spring onions is forecast at 3,976,000 sacks, which is about one-half larger than that of last year although only slightly above average. The Lower Valley's early spring potato crop of 420,000 bushels is less than one-half the 1949 harvest, while the area's early spring tomato crop of 2,275,000 cratcs is only fractionally below that of last year. The mid-April rains were beneficial to ranges and pastures over wide areas where the lack of moisture previously had caused deterioration in gl'azing conditions. April 1 spring range feed prospects were described as poor, but the increased moisture at this season of the year will cause rapid improvement in ranges and pastures. Supplementol feeding of cows and ewes was carried on in some areas prior to the rains, and it has been necessary to continue this practice, pending expected improvement in grazing conditions. CASH RECEIPTS I'ROM FARM MARKETINGS (In thousands of dollars) February 1950 February Cumulative receipts - - - - - - - ' -- - - - 1949 -Jan. 1 to I',b. 28-Crops Livestock Total Total 1950 1949 1 7,006 I 5,663 I 12,672 I 13,574 1 43.837 $41.358 Arilona .. , ...... . 2,667 Louisiana .. ,., .. . 4.586 7.493 0,775 36,529 38.814 4,857 4,065 8,922 6,894 21,770 18,376 New Mexico ............ . 16,479 32,477 27,013 83.714 65,739 Oklahoma . . .. , ....... . . . 15,008 58,131 Texas . ... . ..... ... . . . . . 41,673 99,804 71.529 296.440 173,013 State TotaL .... . . . . . . ...... 188.002 172,466 $161 ,368 $128,785 SOURCE: United States Department of Agriculture. 1482,290 1327.300 Cartle and calves generally are in good conditiun rhroughout tbe District, although many in the formerly very dry areas were beginning to shrink in early April. Local demand for stocker cows and calves began to ease prior ro the rains because summer range prospects were very poor at that time. Ewes and lambs are in fair to good condition, despite the fact that in early April the growth of grain feed was at a standstill in the eastern Plateau counties of Texas, The spring marketing of yearlings this year started a full month earlier than usual. Even milk lambs were moving in volume the last week in March, although heavy movement usually does not begin until midMay. Sheep shearing got under way the first part of April. LIVESTOCK RECEIPTS (N umber) Fort Worth murkct March CI... 1950 Cattle..... . . . .. .. . . . . . . .. . . ... 30,503 Calves. . . . . . . . . . . . . 11,226 ~hO:P : :::::::: ::: :: .. ... z,~:t1~ March 1949 39.160 12,615 68,924 36,925 Sau Antonio market Feb. 1950 March 1950 25.427 8,856 46.497 20,673 27,308 14.482 7,382 15,624- March 1949 26,311 13,607 8.292 17,460· F,b, 1950 21.103 10,429 6.238 8,&9· • Includes itoa~ TOP LIVESTOCK PRICES (Dollan per hundredweight) Fort Worth market Class ~~~~~~;t=~:~~: :::::.... ,..... Slaughter cows .. . ... ........... Slaughter heifers and yearlings ... ~t:~~;e:J~e:~: :::::::::::::: : Slaughter lambs ................ Hogs .......................... March 1950 127.00 26 .00 20 .00 28 .00 27 .00 28 .00 29 .00 17.50 March 1949 125.00 27.00 20.00 27.00 26.00 28 .50 32.00 21.25 Feb. 1950 127.00 26 .00 10 .00 28 .00 26 .56 28 .00 26 .00 18.00 San Antonio market March 1950 Feb. March 1949 124.50 1950 $23.00 2i:60 25.50 28.00 27 .00 27 .56 21.25 20:00 26.00 27.00 27.00 25 .00 17.50 Combined receipts of livestock at the Fort Worth and San Antonio markets during March were 77 percent above those of February, due to seasonal influences, the earlier-than-usual marketing of yearling and spring lambs, the shortages of range feed in some of the drier areas, and other factors. Large increases were reported for all major types of meat animals, although the greatest percentage increases were for sheep and hogs. As compared with the corresponding month last year, the March receipts of livestock at these markets were up 18 percent, with substantial increases in marketings of hogs and sheep offsetting declines in receipts of cattle and calves, Prices received by Texas farmers averaged slightly higher at mid-March than on the corresponding date in any month since last May. The March 15 index of prices received by farmers for all agricultural commodities was at 274, compared with 293 a year earlier and with the postwar peak of 329 in June and July 1948. The rise in the index during the month ended March 15 resulted from continued increases in prices of most meat animals and slight advances for cotton, wheat, barley, chickens, and eggs. Reports from commodity markets indicate that from March 15 to mid-April, prices received by farmers for cotton and corn advanced significantly, while prices of hogs, cattle, and other grains made little net change. On the other hand, prices of shorn lambs, poultry, and eggs declined, Prospective Plantings in the Eleventh Federal Reserve District in 1950 Farmers in the five states of the Eleventh Federal Reserve District intend to increase tbeir total acreage of major field crops in 1950 (excluding cotton) approximately 1 percent, according to data recently released by the United States Department of Agriculture and based on a survey of farmers' 1950 crop plans. Texas farmers, who will account for about 57 percent of the acreage of these crops in the five states, have indicated they plan to increase their plantings by about 6 percen t, as shown in the accompanying table, 90 MONTHLY BUSINESS REVIEW District farmers have reduced their acreage of winter wheat for harvest in 1950 by 19 percent, and they plan to curtail their acreages of peanuts and rice by 11 percent and 7 percent, respectively, in compliance with acreage control programs. Reductions in acreages of these three important crops amount to about 3,100,000 acres. Largely because of lower price supports for flaxseed and Irish potatoes in 1950, acreages devoted to these crops also will be red uced. The acreage seeded to flaxseed was reduced 156,000 acres, or 39 percent below last year, while a reduction of 8,000 acres, or 1 percent, is expected for commercial Irish potatoes. Acreage reductions for these crops total approximately 3,250,000 acres. reported to be a limiting factor, many farmers have indicated they plan to curtail acreages of crops involving heavy hired labor requirements and to shift to those which they can handle themsel ves with mechanical equipment. Machinery in use and available was adequate for making rapid progress when fields were ready last year and is likely to be ample again this year. PROSPECTIVE PLANTINGS-1950" ° (In thousands of acres) T .... 1950 The declines in acreages of wheat, rice, peanuts, flaxseed, and commercial Irish potatoes will be more than offset by increases in other crops. The crops showing the greatest acreage increases are corn, oats, and sorghums; in each instance the increase bears a very definite relationship to the acreage control programs. Minor increases are also reported for barley, hay, soybeans, cowpeas, and sweet potatoes. The effects of the reduction in acreages of wheat and cotton are reflected not only in the increase in seedings of oats and barley but also, more spectacularly, in farmers' plans to expand acreages of corn and sorghums. District farmers have indicated they will increase their corn crop by about 550,000 acres and their plantings of sorghums by more than 2,200,000 acres. The five states' total acreage devoted to the crops discussed above (excluding cotton) is about 38,400,000 acres. The addition of 10,156,000 acres of cotton (the amount originally allotted to the five states) brings the total to about 48,550,000 acres. However, this is about 2,700,000 acres below the acreage planted to these same crops last year. On the basis of recent congressional legislation granting an increase in 1950 cotton acreage, it is probable that the acreage allotted to the five states may be increased by as much as 700,000 acres; and if weather conditions permit, it is likely that farmers will take full advantage of their allotments. This leaves roughly 2,000,000 acres of last year's cropland; some of it will be left in fallow, a considerable part will be put in legumes and grasses, and the remainder will be left idle. The intentions of Texas farmers with respect to crop acreages in 1950 conform more or less to the same pa ttern as that for the five states. They have indicated they will increase their acreage of spring-seeded crops (excluding cotton) by nearly 2,500,000 acres, or about 25 percent, and will decrease their acreage of fall-sown crops by a little over 1,000,000 acres. In Texas, as in the five states, the effects of the control programs are shown in reduced acreages of wheat, rice, and peanuts. Substantial reductions arc also reported for flaxseed, Irish potatoes, and sweet potatoes. Offsetting these reductions, growers' intentions indicate an increase of 42 percent, or a little over 2,000,000 acres, in grain sorghums and an increase of 500,000 acres in corn. Acreages of oats and barley show increases of 25 percent each. The principal feed grains thus show an increase of about 3,000,000 acres. All hay acreage for harvest in 1950 shows a reduction from a year ago, due in part to the reduction in peanut acreage. It should be clearly understood that these data represent only the expressed intentions of farmers at the time the survey was made, 311d these plans may be changed in response to unfavorable weather conditions, marked changes in relative prices of specific commodities, announcements concerning price supports, or other factors. Nevertheless, farmers were able to take into account some of the factors affecting 1950 crop acreages in making their plans. While availability of farm labor is not Wheat .. . Corn .... .. Rice ... . Oats ... Darley ... . All hay .... Peanuts .. . Soybeans .. Cowpeu .... . . ,., . ... . . . .W sorghums . . ... ........ Flaxseed .....•.......... Irish potatoes (commercial) S",eet potatoes ... ...... . . 6.236 3.146 467 1.820 216 1.174 501 10 221 7,592 230 32 50 1949 1960aspercento£l9C9 7.697 81 2.599 121 1>31 88 1.456 126 172 12.\ 1.223 96 589 88 5 200 177 12.\ 136 5.588 360 64 38 84 55 89 Five States· 1950 12.8811 6.543 1.01\()j 3.387 6791 3.376 693+ 160" 3789 9.780 240+ 71· 155· 1949 1950 a8 percentof1949 81 IMIOI 4.994 III 1.1361 93 2.666 128 4961 137 3.340 101 783' 89 1269 120 333· 114 129 7.559 406' 61 70 9 90 I5(JO 103 Total. .... ..... . .. . . 21.692 20.491 106 38.401 101 37.866 •• Data regarding the acreage planted or to be planted to cotton will not be released prior to July 1. 1950. • Arizona. Louisiana. New Mexico. Oldahoma, and Texas t Arizona. Oklahoma. NeW' Mexico, and Texas t Louisiana and Texas + Louisiana, Oklahoma, New Mexico, and Texas e Lou.isiaoa. Oklahoma, and Texas • Arizona, Oklahoma, and Tex18 FINANCE Selected member banks in leading CItIes of the District reported total assets of approximately $3,608,000,000 on April 12. Growth in investments, balances with banks, and cash items during the preceding 5-week period marc than offset a decrease in reserves with the Federal Reserve Bank and a small decline in loans, with the result that $43,800,000 was added to total resources. Total loans of these selected banks remained virtually unchanged-the decline being insignificant-between March 8 and April 12; on the latter date total loans amounted to $1,186,930,000. The stability of loan volume during the latest reporting period is in contrast with a decline of 2.8 percent during the comparable period in 1949. The behavior of loans during the first 41> months of this year reflects slightly lower though generally satisfactory levels of business, as compared with levels of business activity prevailing in the last quarter of 1949 when seasonal and other factors exerted upward pressures in most sectors. The influence of these factors extended into the first quarter of 1950 and tended to delay somewhat teasonal reaction in lending activity. Contraction in loan volume was confined to a decrease of $11,402,000 in loans for commercial, industrial, and agricultural purposes, si nce growth in "II other categories of loans was reported, with the exception of loans to banks, which did not change. The greatest increases in lending activity were reported for real-estate loans and "all other" loans, which include loans to COnsumers. As a further indication of the extent to which total loan volume has been maintained, total loans on April 12 were approximately 1.4 percent below the peak loan volume outstanding on February 1. Changes which occurred in the investment portfolios of selected member banks in the District affected both the composition and the amount of aggregate holdings. Although investments in Treasury certificates of indebtedness and bonds declined by more than $19,000,000, more-than-offsetting gains 91 MONTHLY BUSINESS REVIEW in other categories of securities increased total investments by approximately $31,079, 000. Changes in the composition of Government security portfolios were caused not only by additiQllal purchases but also b)' refunding operations of the Treasury on March 15 and April 1, which resulted in the retirement of certain maturing or called outstanding issues of certificates, notes, and bonds and the issuance of a new 1 !;4-percent note and a new 1 y.-percent note in exchange. Largely as a result of these refunding operations, holdings of certificates of indebtedness declined by $18,659,000, while investments in Treasury notes were increased by $30,587,000. Increased purchases of Treasury bills, amounting to $15,291,000, further added to total holdings of Government securities, while a smalI decline occurred in investments in Treasury bonds. On April 12 total holdings of United States Government securities amounted to approximately $1,209,000, 000. In addition, these banks added to their other investments by purchasing approximately $4,449,000 in state, municipal, and corporate securities. As a partial means of financing the over-all increase in investments banks drew down their reserves with the Federal R eserve Bank by $19, 179,000, although approximatel), $7,443 ,000 was added to balances with other banks. with $5,617,162,000 in February and $5,139,728,000 in March of last year. Most of the decline in gross demand deposits during March occurred at country member banks, with approximately two-thirds of the decrease reported by these banks and onethird reported by Reserve city banks. Although total time deposits of all member banks showed a fairly persistent tendency to increase during recent months, a decrease of $14,647,000 was reported during March. Reserve city banks more than accounted for this decline, since country banks showed a fractional growth in time deposits. CONDITION STATISTICS OF WEEKLY REPORTING MEMBER BANKS TN J~EAD T Na CTTIES- Eleventh Fedora] Rcscrvo Diat.riot Debits to deposit accounts reported by banks in 24 cities throughout the District each month tend to reflect prevailing levels of business activity. During March these banks reported a 14-percent increase in debits over the comparable figures for February and a 7-percent increase over March 1949. Debits in March were influenced somewhat by an increased volume of purchasing by individuals and others in anticipation of the Easter season. The greatest increases for the most recent month were reported by banks in San Antonio, Wichita Falls, Austin, Galveston, and Monroe, Louisiana, with most other cities showing substantial gains. Banks in Lubbock reported the only decline for the period, a 9-percent decrease, with the greatest increase-a growth of 24 percent-reported by Wichita Falls (In thousands of dollars) Item Total loans (gross) and invcst.m en'-" ,. _ Total loans-nett Totalloans-jl;ross... , ....... _ . .. . .. . f;::~~c~~~~~u:~~aJc:l!ssr~i=~~fti~~~:: .. Ot.her loans ror purchasing or carrying securities .. Real·cetate loaua . Loans 10 banks..... . .. ........ . AU other loons . . . . .. . ..... . ...... . Total investments ...... . U. S. Treasury bills ..................... . U. S. Treasury certifi catc6 of indebtedness .. U. S. Treasury notcs ...... . ............... ~ ... U. S. Government bonds (inc. gtd. obligations) . . Other securitie8 ............. . Reserves with FL'licra\ Reservc Bank BaillllcC8 with domestic banks ...... . Dcmllnd deposits - adj usted· . .. . Time deposJts cxeept Government. United States Government dep06ita Interbank demand dep06its .... . ..... . Borrowings from Federal Reserve Bank . Apri112, 1950 $2,531,695 1,173,585 1,186,930 826,231 7,313 48,M6 97,504 79 207,757 1,344,765 95,049 262,270 191,M6 660,889 135,511 455,856 320,877 2,005,658 439,183 62,860 652,516 o April 13 , 1949 $2,225,053 1,060,820 1,070,957 736,154 6,068 52,341 87,152 2M 189,048 1,154,096 28,057 244,525 39,838 721,957 119,719 529,037 312,870 1,939,029 418,382 52,320 516,471 o March 8, 1950 $2,501.141 1,175,043 1,187,455 837,633 5,881 47,623 93,874 79 202,355 1,313,686 79,758 280,929 160,459 661,478 131,062 47s.o35 313,434 1,999 ,831 434,626 53,786 653 ,938 GROSS DEMAND AND TIME DEPOSITS O~' MEMBER BANKS Eleventh Federal Reserve District (Averages of daily figures. In tboUBand& of dollars) Date March 1948 ........ March 1940 ........ November 1949 •. . • December 1949. . ... January 1950 . ..... [;::~r{gM~·. :::: The greatest cha nge in the condition of selected member banks in larger cities of the District during the period ended April 12 was a $44,7 14,000 growth in total deposits, almost three-fourths of which was accounted for by an increase in demand deposits of individua ls, partnerships, and corporations. Total demand deposits on March 15 r eached a peak of $2,972,449,000 for the 5-weck period. However, income tax payments on this date were large ly responsible for a decline of more than $134,600,000 during the following 2 weeks. Treasury expenditures during the remainder of the period tended to oif~et this decline, and deposits. increased. Favorable levels of business activity and the strength shown b)' loan volume have tended to maintain total deposits at high levels. The behavior of deposit s, pa rticularly demand deposits of individ uals, par tnerships, and corporations, during the first quarter of this year has been somewhat more stable than during the comparable period last year when econom ic readjustments to lower levels were under way, Gross demand deposits of all member banks in the Eleventh District averaged $5,566,562,000 during March, as compared Time $569,800 607,104 636,996 648,676 669,140 661,292 646,645 Gr... Time demand $2,3.';7,864 $357,605 2,450,349 388,298 4{)8,479 2,606,217 417,067 2,712,547 423,289 2,752,603 2,660,793 420,111 2,643,667 406,065 G._ Tim. demand $2,661,600 $212,195 2,589,379 218,806 228,517 2,815,866 231,609 2,900,011 235,861 2,980,615 241,181 2,966,369 2,922,895 241,580 BANK DEBITS, END-OF-MONTH DEPOSITS, AND AN NUAL RATE OF TURNOVER OF DEPOSITS (Amount.s in thousands or dollars) o t Arter deductions tor reserves and unallocated charge-offs. • Includes all demand deposits other than interbank and United States Government, less cash items reported M on hand or in process of collection. Country banta Reserve city banks Combined total Gn", demand $5,019,464 5.139,728 M82,103 5,612,558 5,733,218 6.617.162 50566,562 Deposita· Annual rate or turnover ---Debita+ Petg. change from Mar. 1949 Feb. 1950 Marcb 31, 1950 M... 1950 Mar. 1949 Feb. 1050 62,797 -4 16 86,947 8.6 9. 1 7. 6 38,810 145,488 8 4 19 15 43,812 177,031 10.3 9.8 10.2 10.2 8.6 8.6 17,982 20 II 22,211 9.6 9.7 8.6 43,509 104,909 144,393 Aust-io .. . ... 97,482 B.eaumont ......... 96,663 Corpua Christi . .... 10,249 Corsicana ..... .... 1,152,524 DaU38 .....•.•.• . . 154,625 EI P9.5o ......•...• 360,742 Fort Worth . . .. . . . . 72,082 Galveston ..... .... Houston ... . .. .. . . 1,142,012 17,722 La.rOOo . . .•..... 79,607 Lubbock ........ 38,829 PortArtbur .. . . . . 33,549 San Angelo ..... .. 321,784 San Antonio . ... 15,497 Texarkana .... . 44 ,970 61,286 ;V;~:::::: 65,882 Wichita Falls ... . 25 16 - 10 - 2 24 3 9 14 16 11 12 21 6 13 42,924 92,069 114,390 90,433 88,318 21 ,119 791,419 130,650 307,028 94,103 954,066 22,073 86,531 4{),371 43,655 344,665 23 .733 52,291 73,301 90,274 12.1 13 . 4 15 . 2 12 . 7 12. 8 5.8 17.4 \4.2 14.2 9. 1 14 .2 9.6 11 .2 10.0 9. 2 11.2 7.8 10.3 10.2 8.8 10.3 13. 1 18.4 11. 8 11.8 5.9 17 .2 13 .6 12.7 9.2 15 .1 9.5 10.8 11.8 12.7 11 .8 11.3 5 .2 15 .8 12.4 11.0 7.7 12 .1 9.1 12 . 6 9.5 8. 5 9. 0 7. 1 9.0 10 .0 7.1 City Ari&OD&: T ucmo . .... . . . . . . . S Louisiana.: Monroe . .... .. . . . . Shreveport ... New Mexico: Roswen .. Texas: Abilene .. . Amarillo March 1950 -5 - I I 24 -1 17 25 8 2 17 10 14 11 15 18 19 16 7 - 9 5 8 24 11 16 7 24 11.4 10 .2 8.9 9. 7 7.4 10.3 9.5 8.8 13 .4 13.3 11 .8 $3,836,401 14 Total- 24 cities . .... $4,318,988 + Debits to deposit accounts except inf.crb3.nk accounts. • Demand and time deposits. including certified and officers' checks outstanding but excluding dethiits to the credit of banks. . " . • • his figure includes only one bank Ln Texarkana, Texas. 10tal deblt.; for all baoks In Texarkana, Texas.Arkaosas. including two banks located in the Eighth District. amounted to $27,332. , Indicates change of lese than one-half of 1 percent. MONTHLY BUSINESS REVIEW 92 and San Antonio. The turnover of deposits, reflecting the rate of use of deposit accounts, was 13.4 in March, as compared with 11.8 in February and 13.3 a year ago. Total earning assets of the Federal Reserve Bank of Dallas declined $10,613,000 during the period March 15 to April 15, due largely to a decline in holdings of United States Government securities. Other changes in the condition of the Federal Reserve Bank of Dallas included a decrease of $6,700,000 in notes in actual circulation and increases of $89,519,000 in gold certificate reserves and $19,161,000 in member bank reserve deposits. Although notes of this bank in actual circulation tended to decline during the month ended April 15, the outstanding volume on this date amounted to approximately $608,808,000, about $15,400,000 greater than the volume outstanding on the comparable date last year. A favorable volume of trade in the District, which has been stimulated somewhat by government payments in the form of national service life insurance dividends, has contributed to the maintenance of note circulation at a high level. NEW 1\IEMBER BANK The First National Bank in Wheeler, Texas, a conversion of The Citizens State Bank of that city, opened for business April 12, 1950, as a member of the Federal Reserve System, The 1ICU1 ballk has capital of $50,000, ",rpltts of $25,000, undivided profits of $10,000, and total resources of approximately $1,500,000. The officers are: D. E. Holt, President; R. J. Holt, Executive Vice President; R. J. Holt, Jr., Cashier; and H. W. Coffmall, Assistant Cashier. NEW PAR BANK The Home State Bank, Westhoff, Texas, an i1tSured nonmember bank located in the territory served by the San Antonio Branch of the Federal Reserve Ballk of Dallas, was added to the par list on April 1, 1950. This bank has capital of $17,500, surplus 0/ $5,000, and undivided profits of $8,575. Theo. Rogge is President and E. R. Aschen is Cashier. CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS INDUSTRY (In thOUWl<h of dollars) Item T .. .. . .......... , . . . D ...... ........... .. Fo . . ..... ... . .• .•. .. . U. .. .. .. .......... .. .... . Total earnin~ S88eta ...... . .... . ... . . . . . ..... ... .. Member ba.D reserve dcpoaib .. . . . ..... . ..... . . . . . Federal IleserY6 notes in actual circulation . . ... .. .. . April US, 1060 $717.795 2,060 1,393 796,456 799,909 810.373 608,608 Aprill~. 1949 $688,998 2,280 5,323 915,534 923.137 914,441 593,368 March 15, 1960 $628.276 1,410 1.481 807.631 810.522 791,212 615,608 SAVINGS DEPOSITS March 31, 1950 Number of rel:~tg City Louisiana: Shreveport .... ...... Tua: BeAumont ........•. • 3 Dallas .............. 8 2 Elf... .. ........... Fort Worth ..... . .... 4 Galveston ...... . .•.. 4 Hou9ton . ..... . ..... . 8 Lubbock .......... .. 2 Port Arthur . .... .... 2 San Antonio ........ . 5 Waco ............ . .. 3 Wichita Falls ...... . . 3 AU other . ............. 55 Total ........ ..... 102 Number of savings depositors Amouot of 8avinjts depOSIta Percentage cban~e in savings deposits rom Mar. 31, 1949 Feb. 28, 1960 43,771 $ 24,790,108 - 1.3 0.4 12,213 143.501 32.365 44.233 22,576 95.310 2,026 5,985 41,876 10,2M 8,192 66,518 6,891.730 22,962.206 36,nt.236 21.196.926 7U02.1U 3,851,811 4,430.630 43,818,404 10,367,766 - 6.6 0.5 0.5 1.7 0.5 1.7 24.1 5.5 3.0 2.0 1.1 3.2 -0.3 -0.03 0. 6 -0.03 0. 5 0 .2 4.4 1.0 0.1 0.4 0.5 0.3 528,880 $386,060,770 77,931~96 4,506~23 56,189,109 - 0.5 0.2 On April 7, the Secretary of the Treasury announced that a new issue of 91-day Treasury bills in the amount of $1,000.000,000 would be offered to yield $100,000,000 in cash and to refinance $900,000,000 of similar bills maturing April 13. The offering represents the first new government borrowing, exclusive of that in connection with net sales of Treasury tax and savings notes and savings bonds, since September 1949, On April 13, a similar announcement was made regarding the bill maturity of April 20. Rates on new issues of Treasury bills have shown a gradual tendency to advance during the year to date, with the issue of April 20 selling at an average discount of 1.162 percent, With the satisfactory completion of its most recent refunding program-an offering of 1 Y4 -percen t notes in exchange for 1 Y4 -percent certificates which matured April 1 and an offering of 1 Yz-percent notes in exchange for 1 Va-percent notes which also matured on April I-the Treasury will not face another maturity, with the exception of weekly bill maturities, until June 1 when $5,000,000,000 in certificates become due. The building boom in the Eleventh District was extended further in March when construction contract awards totaled $110,000,000, the highest level since the wartime peak of October 1942. This amount was 62 percent more than in February and 72 percent more than the level of March a year ago. Residential awards, which totaled nearly $48,000,000, were only slightly under the all-time peak of May 1946, being 24 percent above the high level of February and 2.6 times the total for March of last year. The month of March marks the tenth consecutive month of high level awards in the residential category. During the first quarter of 1950, residential awards exceeded by 13 5 percent the total for the corresponding Deriod of 1949 and largely accounted for the fact that total awards were up 57 percent. March awards were augmented by the letting of contracts for a number of large residential pro;ects to be built for sale or rent. The low-cost housing program continues to be the strongest factor in the residential building picture, with continuing availability of mortgage creditboth from within and from outside the area- also being a sustaining influence. The temporary rationing of FHA insured loans during March and April, resulting from the near exhaustion of maximum authorized insurance funds, may have held up temporarily the letting of contracts for some sizable residential projects during these months. Authorization of additional funds for FHA insuring operations in the recently passed Housing Act of 1950 will permit the resumption, on a nonra tioned basis, of the insurance of housing mortgages. VALUE OF CONSTRUCTION CONTRACTS AWARDED (10 thousands of dollars) March March 1960 1949 Eleve.tb Diotrict-total... S110.447 $ 64~13 Reside.tial.... .. ...... 47.878 18,207 All other.............. 62,569 46,106 United Statcs·- tot&I.... . 1,300,201 747.619 Residential ..... . . .... . 574.681 251.770 All other.. .. .. .. .. .. .. 7U.520 495,849 ·37 .tates east of the Rocky Mountains. SOURCE: F. W. Dod.. Co.poration. February 1960 $ 68,362 38,763 29,599 779,.130 361,452 418,078 January 1 to March 31 1960 $ 241,238 112,938 128,300 2,810,686 1,279,634 1,530,952 1949 $ 153.776 47,984 105,792 1,799,070 603,971 1,195,009 Nonresidential construction awards also increased in March, reaching the highest level since July of last year, Such awards totaled nearly $63,000,000, or more than double the level of MONTHLY BUSINESS REVIEW the previous month and 36 percent higher than in March a year ago. Commercial, office, and manufacturing buildings contributed to the March total, while awards for highway construction, other public works, and utilities were also important. During the first quarter of 1950, nonresidential awards were running 21 percent above the level for the corresponding period of last year. of striltes, the decrease in the Nation amounting to 225,000 barrels per day as compared to the average level of the previous month, with about two-thirds of the decrease taking place in this District. Efforts were being made to divert crude oil from the closed plants to other plants. BUILDING PERMITS RAILROAD COMMISSION OF TEXAS OIL AND GAS DISTRICTS Percentage March 1950 Percentage change Jan. 1 to Mar. 31,1950 cha~e valuation from valuatIon Number Valuation Mar. 1949 Feb. 1950 Number Valuation from 194!) City Louiaiana: Shreveport . ... Texas: 123 - 40 1.162 1 6.762.925 139 1.882.215 1.629.555 2.37•• 937 454.905 2.326.125 11.257.1 85 2.959.450 4.386.7SO 343.182 10.824.137 2.078,136 540.655 3.981.372 2.490.043 349.062 394 56 53 - 53 128 90 286 83 45 144 87 84 47 140 - 27 547 899 1.139 1.027 1.193 6.626 1.131 2.699 3.836.110 - 70 25 28 I 135 68 Total. ...... 10.725 149.999.397 99 11 Abilene . . .. . . AmariUo. Austin . . Beaumont .. . . . g:j: ~.b.r~t~: EIP.... ..... . l' or\ Worth .. .. Galveston .. . Houston .... . Lubbock .... .. POC't Arthur .. . Sail Antonio .. . Waco ..... ... . Wichita Falla .. 40.5 '2.120.649 211 344 346 354 392 2.608 486 1.137 ISO 1.178 347 219 2.022 372 124 93 4.290.882 194 25 8.781.937 2.924.04. 60673.965 26.267.233 6.237.274 10.612.992 1.087.272 34.826.97' 4.946.246 1.491.353 13.066.700 6.914.040 820.204 99 62 184 83 - 48 145 141 76 26.570 1138.429.150 93 58 62 53 23 100 - 17 48 H7 3.062 942 698 5.029 869 300 - 4 -10 85 1 71 266 2 I. SOUTH Ct:NT1V.L I . "'IOOlt: 01,11..1 The daily average production of crude petroleum in the Eleventh District during March amounted to 2,134,000 barrels, representing declines of 68,000 barrels from the preceding month and of 245,000 barrels from a year ago. The United States production outside of this District during March was down 46,000 barrels daily from that in the previous month. The increase of 130,000 barrels daily in T exas allowables for April was reflected in increased production during the early part of that month, and it is expected that the District output for the full month may approximate that for last December. In such case, the April output would exceed by about 100,000 barrels daily the production rate in April 1949, when allowabies had been sharply curtailed. CRU DE Oil, PRODUCTION (Barrels) March 1950 Total production Dailyavg. production 803.100 2 Middle Gulf. .. 3.682.050 10,344.050 3 Upper Gulf .. ~ Lower Gulf ...... ••708.650 738.100 5 East Central . .. . Northeast . . ... 10.207.600 6 East Texas .. 7.673.700 Other fields. 2.533.600 7b North Central 1.934.100 70 West Contral . . 1.545.200 16.638.200 8 We.t.. ..... 4.030.350 9 North ........ .. . 2.766.350 10 Panhandle ...... . 58.297.750 Total TCUlJ . New Mexico ... 3.055.000 North Louisiana ......... . . . 3.892.900 Totlll Eleventh District. 66.145.650 Out:.5ide Eleventh District . . . 84.362.400 United St.aLcs ... . ... _... . . 150,608.050 25.906 115.650 333.679 184.150 23.810 329.278 247.539 81 .739 62.390 49.845 536.716 130.011 89.237 1,880,572 127,581 125,577 2.133.730 2,721,368 4,855,098 ."t.rea Texas: Dutrict I South C.ntral .. . Intre886 or decrease in daily average production from March 1949 February 1950 --1l62 - 23.769 - 73.796 - 20.131 - 18.063 -42.264 - 26.698 -15.666 1.545 2.868 -77.531 3.737 1.976 - 246.289 - 6.693 8.020 -244.962 -31.888 160 2.630 - 46.717 2.609 - 7.894 27.142 30.198 - 3.056 267 -276.850 SOURCE: EstimatOO frow American Petroleum Iustitute weekly reports. 177 -42.332 106 - 1 --62.953 -1.355 -4.033 -68.341 -46.020 -114.361 Largely as a result of the recent strength in demand, Texas allowables for May were also increased, the 58,OOO-barrels-perday increment including 22,000 barrels daily of cold-test crude for lubricating oil, the supply of which has been particularly short. Crude oil runs to refinery stills during March were slightly larger than in February in both the District and the Nation. In early April, however, refinery runs fen off sharply as the result 1. UPf'1!1I CUL' .... LOW£III GUL' a. [Mf ctNTItAL • . IIOIIITltU5T 11. JrtOftTH ctll'TltAL 1.0. .!:Sr C[HlItAL • . nST .. NORTH 10. PANHAN(lt.[ The stock position of the petroleum industry was strengthened somewhat during March. Stocks of crude oil at the end of the month were nearly 2,500,000 barrels below those a month earlier, indicating that new supplies were still running below requirements. Practically all of this stock reduction took place in this District. Rising demand for gasoline held the increase in gasoline stocks to slightly less than 1,700,000 barrels during March, as compared with about 10,000,000 barrels per month during the immediately preceding months. However, the moderate rise of gasoline stocks during March permitted the establishment of another new record at nearly 135,600,000 barrels, or nearly 8,000,000 barrels higher than at the same time last year. During the first week of April gasoline stocks were drawn down 470,000 barrels, chiefly as a result of the 3 percent decline in gasoline production due largely to the refinery strikes. The seasonal rise in the demand for gasoline is likely to bring about a steady decline in gasoline stocks during the next few months, in line with the usual seasonal pattern. The influence of demand in holding down or reducing stocks of petroleum products has been amply illustrated during recent months, when the strong demand for kerosene and fuel oils has led to rapid drawing down of stocks of these products, with the decline during March amounting to nearly 29,000,000 barrels. This was a much larger decrease than occurred during March last year. On April 1 the combined stocks of the four principal petroleum products-gasoline, kerosene, gas and distillate fuel oil, and residual fuel oil-totaled nearly 227,600,000 barrels, or over 27,200,000 barrels less than a year earlier. Stocks of crude oil plus these four major products totaled nearly 470,700,000 barrels, representing decreases of nearly 30,000,000 barrels from a month earlier, and of slightly over 50,000,000 barrels from a year ago. The estimated proved reserves of crude petroleum and natural gas liquids in the Eleventh District increased by 1,168,- MONTHLY BUSINESS REVIEW 94 000,000 barrels during 1949, or over 7 percent, this increase accounting for 75 percent of the 1,557,000,000-barrel increase for the Nation. Texas, north Louisiana, and New Mexico, each, had a percentage increase greater than the average for areas outside of the District. As of January 1, 1950, the District had reserves of 16,871,000,000 barrels, or over 59 percent of the national total of 28,378,000,000 barrels. The gain in proved reserves during 1949 largely resulted from extensions and revisions of estimates for old fields, amounting to 1,455,000,000 barrels in the District and 2,592,000,000 barrels in the Nation. New discoveries accounted for increases of reserves by 649,000,000 barrels in the District and 983,000,000 barrels in the Nation. Production during the year drew upon these reserves by 936,000,000 barrels in the District and 2,018,000,000 barrels in the Nation. ESTIMATED PROVED RESERVES OF OIL AND GAS Extensions Reserves and New dis- Produo- Reserves Jan. 1; revisions coveriee tiOll Jan. I, 1949 in 10(9 in 1949 in 1940 [960 Cbanges in reserves counted for nearly two- thirds of the extensions and revisions in the District and over one-third of those for the Nation. In fact, the gain in the Scurry field equals 82 percent of the net increase in reserves in Texas during 1949, as well as 77 percent of the net rise for the District and 58 percent of the net increase for the Nation. It is expected that the Scurry field will account for a further increase of estimated reserves during 1950. Estimated proved reserves of natural gas rose during 1949 by 6,806 billion cubic feet, or over 5 percent, in three states in the Eleventh District- Texas, Louisiana, and New Mexico. Outside of the District there was a small decline in reserves, so that the national total increased by only 6,512 billion cubic feet, or less than 4 percent. The three states producing natural gas in this District had total reserves of 132,099 billion cubic feet on January 1, 1950, and accounted for 73 percent of the national total of 180,381 billion cubic feet. Extensions and revisions in the District during 1949 slightly more than equaled the net increase of reserves, with new discoveries being fully offset by production during the year. Amount Percent Crude petroleum and =~~ ~: ~=8 <:r barrelo) DOMESTIC CONSUMPTION AND STOCKS OF COTTON 14,5S~ 20 42 832 &3 61 1~,6M 1,455 849 938 18,871 1,188 7.4 . 1,137 2,692 334 983 1,082 2,018 11,607 28,378 38\1 1,667 8.8 Te18.9 . ........•.... North Louisiaoa® .. . New Mexico ........ Total Eleventh District . . ••.•.• 632 60 65 1~,703 Outside Eleventb Di8trict ••..... ... United States ... .... 11,118 26,821 ~[2 1,34ll 587 &39 878 1.005 7.6 46 7.3 27 (Bal..) ~.8 3.~ Natural gas (amountll in billions of cubic feet) 2,522 Texa8, .. . ......... . 95,709 3,963 3,024 99,170 3.6 3.461 Louisiana·· .. .-.... .. 23.978 1,277 2,239 806 26.888 2,710 11 .3 8,606 New Mexico ... ..... 739 H6 2.\7 6,241' &36 11.3 Total Eleventh District . ....... [2.\,393 3,~5 4,087 132,099· 8.941 6.808 6.4 Outside Eleventh 1,[20 District. ... . ..... 48,576 868 2.168 48.2821 - 294 -0.6 United States .... ... 173,869 4.613 8.06\ 6.246 180,38['1 6.512 3.7 ® Preliminary, ·Includes 1 billion cubic: feet added to underground storage in New Mexico. , IDCludes 76 billion cubic fcet. added to underground etor~Old.aide the Eleventh Di:Jtrict • •• Includes BOUth Louisiana, which is outaide the Eleventh . met. SOURCES: American Gas As&ociatioo. American Petroleum Institute. Estimated reserves in the Scurry County Reef field in Texas were increased by about 900,000,000 barrels. This increase ac- March1950 M....b =c-=-__::-__ _ Last season Augus~ Mareb 1949 Consumption at: Texas mills..... . . . . . . . United State. miU,..... 15.090 898,228 U. S. Stocks - end of month: In consuming cstabm'ta. 1,881,498 Public IJtorage and comor................... 8,302.176 13,269 72[,378 1 [0 FebruarYI 1950 ThQ !ea30D 11,966 739.438 1,660,787 1,825,791 8,682.706 9,228,737 31 103 ,3 16 102,136 5.977.391 !,661,349 • Five weela ended April 1. t Four weeD ended February 25. The daily average rate of consumption of cotton at United States mills during March was 3 percent lower than in the previous month but 14 percent above the level of a year earlier. Since the March cotton consumption report covers 5 full weeks, the March total is artificially inflated compared with the totals for the earlier periods given in the adjoining table. Total consumption during the first 8 months of the 1949-50 season was 7 percent more than during the previous season.