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MONTHLY BUSINESS REVIEW o f the FEDERAL RESERVE BAN K o f Dallas ~=====================================~~=========== D a11 as, T exas, A·l 1, 1941 Thi s copy is relensed for pubvoIume 26, No.2 pC! Jication in afternoon paperB Mar. 31 - 'r ~~=~~=========================================================================================== DISTRICT SUMMARY The demand for merchandise at wholesale and retail trade establishments in the Eleventh District remained at a high level in February. On a seasonally adjusted basis, department s~ore sales were at an all-time peak for that month, and the distribution of commodities through wholesale channels exceeded that of a year ago by 14 per cent. In the industrial field, the value of construction contracts awarded was at a ~uch higher rate than a month earlier or a year ago, due to Increased awards for publicly-financed projects. Daily average ~troleum output was the largest since May, 1940, and crude 011 runs to refinery stills rose further to a new high level. The outlook for agriculture and livestock in this district is generally satisfactory, but warm, sunshiny weather is needed over a large portion of the district to stimulate the growth of P1a~ltS and range vegetation and to permit farmers to proceed rapidly with plowing and seeding operations. BUSINESS The expansion in purchasing power, resulting from increased Payrolls and higher farm income, is being reflected in co~su,?er Purchases at retail establishments in the Eleventh Dlstnct. During the first two months of 1941, the sale of merchandise at representative firms operating in seventeen lines of retail t~ade other than department stores averaged about 16 per cent higher than in that period of 1940. Department store sales at repOrting firms have likewise shown a pronounced gain over fhose of a year ago. In February, daily average sales increased ess than the average seasonal amount but were 14 per cent greater than in the corresponding month last year. This bank's seasonally adjusted index of department store sales stood at 118 per cent of the 1923-1925 average in February as against 126 per cent in January, and 107 per cent in February, 1940. ~uring the first two months of the current year, the distribution of merchandise through reporting department stores was ~t ~he highest level of record for that period. Weekly reports Mdlcate that department store trade during the first half of . arch was about the same ·as in that period of 1940, which is Significant in view of the fact that sales in March last year Were augmented considerably by the early date of Easter. b Stocks of merchandise at department stores were increased about the average seasonal amount in February, and at the c Ose of the month their dollar vah,le closely approximated that of a year ago. On a seasonally adj\lsted basis, inventories have shown little change since last October, their value fluctuating around 71 per cent of the 1923-1925 average. r averaged 15 per cent higher than in that period a year earlier. The value of merchandise stocks at wholesale establishments showed an average increase of 3 per cent during February, and at the month-end the total was 7 per cent higher than a year earlier. Employment and payrolls in Texas, as reported by the Bureau of Business Research of the University of Texas, showed moderate advances in February, reflecting chiefly increases at wholesale and retail trade establishments and at plants manufacturing food, textile and forest products. As compared with February, 1940, employment was 4 per cent higher and payrolls were up 8 per cent. The number of business failures in the Eleventh District among manufacturing, trade, construction and commercial service establishments declined from 41 in January to 33 in February. On the other hand, the average liability of defaulting firms increased considerably, with the result that their aggregate indebtedness rose 50 per cent to $415,000, which was more than double that in February, 1940. AGRICULTURE Weather conditions have had varying effects upon agricultural and livestock conditions in the Eleventh District during recent weeks. Rains and snow during the latter part of February and early in March temporarily relieved a deficiency in surface moisture in eastern New Mexico and in the Texas Panhandle and afforded some relief from dust storms, which had caused considerable damage to wheat in local areas. On the other hand, moisture supplies in central and east Texas and northern Louisiana continued excessive and wet fields caused further delays in soil preparation and seeding of crops, particularly corn. Early in March field work in those areas ranged from one to four weeks behind schedule. During the second week of March high winds dried out the topsoil in many areas of Texas, permitting a resumption of planting and plowing operations. In the vegetable growing area of south Texas persistent rains, high winds and frosts during February caused additional damage to truck crops and delayed further the harvesting and shipment of vegetables. Planting of spring vegetable crops throughout most of the commercial producing areas of Texas is also later than usual. According to the Department of Agriculture, unfavorable weather during the past winter reduced considerably the production of some truck CASH FARM INCOME El.£VENTH . rEOERAI. RaERVE DISTRICT hiSal~s at reporting wholesale firms in eight lines of trade in ~ s district showed wide variations from January to February ~e chiefly to seasonal factors, but the aggregate dollar value o . sales evidenced little change over the month. In comparison ;Ith the corresponding month of 1940, sales in only two lines, 1rUgs and tobacco, failed to participate in the average gain of h4 per cent. A greater distribution of durable goods, including j.rdware, surgical equipment, automotive and electrical suples, and machinery and equipment, was chiefly responsible O{ the large gain over the same month last year, although S\es at wholesale grocery firms were up 8 per cent. Cumulative Sa es at all reporting firms during the first two months of 1941 f This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 2 MONTHLY BUSINESS REVIEW crops, but supplies of winter vegetables were for the most part adequate to meet market demands, and prices received for products have been fairly satisfactory. The Texas wheat crop made fairly good growth during February and the first half of March, although the crop in some areas was damaged by high winds and dust storms. Rains and snows in the heavy producing sections of the State early in March were beneficial, but additional surface moisture is needed as a considerable acreage of wheat, which is of short, thin growth, is susceptible to further wind damage. The Texas oat crop has shown relatively little growth due to the lack of sunshine, but thus far there has been comparatively little damage from freezes and insects. Livestock ranges in this district showed a noticeable improvement during February, and their condition on March 1, as reported by the United States Department of Agriculture, was the highest for that date in recent years. Although continued rains and cool weather in the eastern half of the district have delayed the growth of new grass and damaged old feed, prospects are generally favorable for early spring grazing. In the western portion of the district range grass and weeds made good growth during February. Grazing on small grain fields has been limited thus far due to the slow growth of crops and to wet fields. Livestock weights increased during February in virtually all sections except in those areas where excessive rainfall caused further damage to range feed. Losses of animals during the past winter were light because of the generally mild, open weather. Current prospects are good for large spring calf and lamb crops. The demand for cattle has been strong, but trading on the whole has been light. Although the development of early spring lambs in Texas has been slow due to unfavorable weather, animals are expected to mend rapidly with the appearance of clear, sunshiny weather. Production of wool in the Eleventh District rose to a new all-time peak of 103,000,000 pounds during 1940, reflecting chiefly an increase of about 5 per cent in the number of sheep shorn in Texas. In that State, the 10,300,000 head of sheep clipped accounted for a total wool output of 80,350,000 pounds. The increase in the production of wool during 1940 was accompanied by an exceptionally heavy demand for and WHOLESALE AND RETAIL TRADE STATISTICS ~-----.Porcontngo ohange in: , Number ~ Net sal~tocks-----, of Feb., 1941 from Jan. 1 to Feb. 28, 1041 from reJ:lOIIlIlrting Feb., Jnn., Feb. 28, IMI Fob 20., Jan. 31, Retail trade: fir 1940 1041 from 1040 1940 IOU Department stores: Total 11th Dist ., .. 45 +10 - 2 +12 - 1 + 8 Dallas . . ..... ... ... 7 +6 +1 +8 +3 +8 Fort Worth ....... . 4. + 2 - 12 +18 - 2 + 3 Houston .......... . 6 +16 - 6 +14 - 18 +10 San Antonio . . . .... . 5 +12 + 3 +16 + 6 + 2 Shreveport ... .... . 3 +15 + 1 +14 Other cities .. .. ... . 20 +13 + t +13 Independont stores:' Arilona. . . . . . . . . . . 245 +0 -4 +10 New Mexico........ 179 +5 -3 +0 Oklahoma .. .. .. . .. 562 +11 - 3 +16 Texas.... . .. .. .... 1,025 +12 - 4 +16 Wholesale trndo:' Machinery, eqpt. &: supplies..... .. .. .. 4. +10 + 7 +31 Automotive supplies. 7 +12 -17 +ii Drugs (incl. liquors) . 8 - 3 - 10 -5 Elootrionl supplies.. . 4. +63 + 9 Grooeries.. . .. .. .. ... 32 +8 - t Hardwaro. . .. . . .. . . 14 +24 - 10 Surgical equipmont.. 4. +14 +11 Tobaoco &: produots. 5 No ehg. +17 - 1 'Compilod by United States Bureau of Census. tChango 1088 than ono-half of ono per cent. INDEXES OF DEPARTMENT STORE BALES AND STOCKS (1928-1925 averago~I00) February Jnnuary Decembor February 1941 1041 1040 1040 Sales (daily average): Without S0880Dal adjustment . .... .. . 101 96 201 91 With Be880nal adjustment . . ... ... ... ,. 118 126 107 116 Stocks (end of month): Without s0880nal adjustmont .... ... . 68 62 68 68' 72· 71 71 71 With ceasonal adjustment ... ..... '" ". • Revised I an increase in the farm price of that product. As a result, cash income of wool producers in this district from the sale of that product rose $6,000,000 to a total of $29,100,000. In Texas, cash income from wool marketings amounted to $23,300,00 0, which was only fractionally below the all-time peak reo corded in 1937. Production of shorn wool in the United States was likewise at an all-time high during the past year, totaling 387,800,000 pounds. Marketing of this wool resulted in a cash income of $110,000,000 to farmers and ranchmen. Mohair production in this district rose sharply to a record of 20,000,000 pounds, which was 14 per cent greater than in 1939. Producers' cash income during 1940 from the sale of mohair totaled $10,100,000 as against $8,500,000 in 1939. The growth of mohair in this district represented 95 per cent of total production in the United States. The aggregate income of farmers during 1940 in the five states included in this district, which amounted to $1,012.000,000, was slightly lower than in the preceding year, reflecting the smaller Gov~rnment benefit payments to farmers for participation in the program of the Agricultural Adjustme!1t Administration. However, Government benefit payments, which amounted to $143,000,000 during 1940, were higher than in any year prior to 1939. Income from the sale of farm products, including crops, livestock and livestock products, was 2 per cent greater than in 1939. Moreover, the decline in total receipts, including Government payments, waS occasioned by a substantial contraction in income in Louisiana, where unfavorable weather conditions during 1940 cau~ed severe damage to cash crops. In Texas, Oklahoma, New MeXICO and Arizona the increase in income from the sale of farm products more than offset the decline in benefit payments recei~ed from the Federal Government, with the result that total Income in those states averaged 2 per cent higher than in the preceding year. Among the principal divisions of farm income, receipts from the sale of crops amounted to $460,000,000 during 1940, which was 6 per cent higher than the revised estimate of $434,000,000 received in 1939. Although cotton continues to dominate the trend in cash income from the sale of crops, farmers in this district have made some progress in the diversification of agricultural production in recent years. The acreage diverted from cotton production has been utilized largely ad pasturage for livestock and to increase production of fee and vegetable crops. The growing importance of truck crops as a revenue producing source is indicated by the fact that 1940 cash income from this source rose to an all-time peak °d $44,000,000, which was $6,000,000 greater than in 1939 an $2,000,000 above the previous maximum established in 1931, Cash income from the sale of grain crops, including co rnl wheat, oats, barley, rice and grain sorghums, totaled $98,000,000 as against $94,000,000 in 1939. IIi The livestock industry in this district continued as a maj?r source of revenue during 1940, though a moderate decline )!I cash income occurred as compared with the preceding year. The contraction is accounted for by a reduction in the market! ings of cattle and calves due apparently to the restocking. o ranges following heavy sales in 1939. Reports indicate that Ink come from the sale of sheep and wool was at an all-time peak during the past year. Total income from the sale of lives toC and livestock products during 1940 amounted to $410,000,000, which represents a decline of $5,000,000 from the preceding year. FINANCE Member bank reserves maintained at the 'Federal Reser;e Bank of Dallas, which had increased considerably during t e I 1 ) 8 MONTHLY BUSINESS REVIEW first six weeks of 1941, and reached a record of $2 57,000,000 products and brick and tile, it appears that operating schedules on February 14, showed little net change during the subsequent w,ere mainta!ned in January ~nd Fe?ruary at a level sharply thirty days and daily average reserve balances during the first higher than m the correspondmg penod a year earlier. Produchalf of March were $33,200,000 greater than in that period of CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES (In thoUBands of dollars) 1940. Required reserves increased further between February Maroh 12, Maroh 13, Feb. 12, 1941 1940 1041 IS and March 15, but the gain was apparently small and daily loans ... .. . ..... .. average excess reserves continued near the peak of $95,300,000 Total loan..and..invcstments. .. .. .. ..... .... ... ....... .... .. 5591,360 $532,227 $580,238 Total . . ... .. .. .. .. 320,800 270,566 321,677 recorded during the first half of February. Balances of member Commeroial, industrial and agrieulturallo.ns. . . . . . 220,946 179,521 222,975 Open market paper .......... . . ............... . · 1,650 1,812 1,413 banks in this district carried with other domestic commercial Loans to brokers and dealers in seuurities. . . . . . . . . . 3,854 3,642 4,676 Othor lonns for purohasing or carrying seourities.... 11,895 13,303 12,186 banks also reached a new high level in February. The average Real estate loans . .. .. ............... · .. ...... .. · 28,471 22,234 22,500 during the first half of the month amounted to $527,000,000, Loans to banks ..... .. . . .. . . ... .. .. .. . . . .. .. . .. . 640 235 686 All other loans ... ,. . . ... .. . . . .. .. . .. . . .. ... ... .. 57,844 40,819 57,232 which was $30,000,000 above that in the corresponding period United States Government direct obligations. ... .. ... 169,004 152,901 166,872 Obligations fully guaranteed by United States Govt.. 40,385 51,036 38,855 of 1940. Other securities. ...................... ............ 61,671 57,724 61,884 Federal Reserve notes of this bank in actual circulation, which had shown a counter-to-seasonal gain during the latter part of January, fluctuated around $97,000,000 during most of February and then turned upward again toward the end of the month, reaching an all-time high of $100,900,000 on March 4. Although a moderate decline has occurred since the latter date, Federal Reserve note circulation on March 15 was about the same as the 1940 peak established in December and $18,600,000 greater than a year ago. An increasing volume of currency shipments to army camps to meet contractors' payr?lls and salary payments to soldiers and a greater demand for Circulating currency to accommodate the expanding volume Of. business and industrial activity are the principal factors con~1'lbuting to the high level of Federal Reserve note circulation In this district. loans at weekly reporting member banks in this district on March 12 totaled $320,300,000, which was only $1,377,000 lower than the 1941 peak reached four weeks earlier, and was nearly $50,000,000 greater than a year ago. Moreover, total loans were still higher than at any time during 1940. Although the generally active use of bank credit that has persisted thus far in 1941 may be accounted for in part by the greater deilland for funds by business and industrial concerns to carry arger inventories of non-defense goods, it is probable that a ~ubs.tantial portion of the net expansion in loans represents bor?Wl11gs to finance the purchase of materials and the production of goods incident to the National Defense Program. InVestments at reporting banks showed a further expansion of $3,.500,000 during the four-week period ended March 12, due to l11creases in holdings of direct and guaranteed obligations of the United States Government. Total loans and investments at these banks on March 12 were $59,000,000 greater than a y.e~r earlier. Deposits at reporting banks continued to expand, riSing $19,200,000 during the four-week period. Debits to individual accounts at banks in eighteen cities of ~ he Eleventh District, which reflect in some degree the trend In employment and in business and industrial activity, were 13 ~er cent higher in February this year than in the correspondtng month of 1940. During the first two months of 1941, c~arges to depositors' accounts were the highest of record for ~ at period, exceeding the previous maximum established in 929 by about 5 per cent. INDUSTRY BUilding activity in the Eleventh District and operations at ~roce~sing and manufacturing establishments in allied inUStl'les, including lumber, cement, structural iron and steel, ar:d brick and tile, have been well sustained since the begin:?g of 1941. Production and shipments of cement at Texas thills .during the first two months of the current yea~ were at I e highest level of record for that period. On the basIs of emp 0Yment at establishments producing structural iron and steel Reservcs with Federal Reserve Bank. . . . .. . .. .. .. .. 161,057 Balances with domestic banks. ..... . .. .. ... ..•. .... 307,409 Demand deposits-adjust.ed·. . . .. .... .. ..... . .. ... 556,706 Time dejloslts .... . .. ,. ..... .. . . . .... ... .. .... .. . . 137,900 United States Government deposits.. ......... ...... 22,420 Interbank deposit. .. ..... .... ........... .. ··· · ···· 29Y26 Borrowings from Federal Reserve Bauk... . ......... None 'Includes all demand deposita other than interb.nk and United cash itema reported as on bend or in the prOClCM of eoUeotion. 140,532 159,837 301,021 201,896 483,687 542,989 136,593 136,957 31,117 22,787 272.484 289,715 None None States Government leBS ' CONDITION OF 'fHE FEDERAL RESERVE BANK (In thou.ands of dollars) March 15, March 15, 1941 1940 $3l1!~06 $249,959 Total cosh reserves . ....... . .. . ....... ..... ...... . None 131 Disoounts for member b.nks ......... . ............ . None 60 Other bills disoounted .... . . .. ............• . ...... . 277 481 Iudustrial advanoes ... .. .............. .. . ........ . 86,834 94,362 United States Government securities ........ .... .•.. 87,112 95,034 Total carning assets . .. .......................... . 255,056 219,002 Member bank reserve deposits .................... . 98,705 80,064 Federal reserve notes in aotu.1 circulation .......... . Feb. 15, 1941 $311,696 None None 278 86,834 87, 112 256,005 97,225 DEBITS TO INDIVIDUAL ACCOUNTS (In thouaand. of doUars) February February Petg.ehauge January 1941 1040 over year 1941 Abilene. . . .. .. .. .. . .. .. . $ 12,224 S 8,068 +52 $ 11,552 Austin.................. 34,088 31,392 + 9 38,416 Beaumont.............. . 27,193 28,242 +17 27,136 Corsicaaa.. .. .. .. .. .. .. . 3.373 3.357 + t 4,310 Dallas. . . .. . . . . .. .••. . .. 266,539 246,780 + 8 304,498 EI Paso. . . . . . . . . . . • . . . . . 46,800 29,231 +60 49,584 Fort Worth.............. 83,361 71,651 +16 100,418 Galveston. . . . .. .•. . . ..... 24,449 30,075 - 19 26,790 Houston................. 260,147 227,069 +15 280,528 Port Arthur............. 10,188 9,175 +11 10,919 Roswell. ................ 4,577 3,053 +16 4,855 S.n Antonio............. 78,347 66,023 +19 84,657 Shreveport . . . ...... . ... . 45,716 42,964 + 6 53,227 Texarkana..... .. ..... .. . 8,406 6,813 +23 10,002 'fueson............... .. . 13,887 11,368 + 18 14,360 Tyler . .... .. .. ......... . ll,439 11,081 + 3 14,438 Waoo................... 14,606 14,424 + 1 15,896 Wichita Falls........... . 15,508 16,420 - 6 17,650 Petg.ehango ovor month + 6 - 11 + t -22 - 12 - 6 -17 - 9 - 7 - 7 - 6 - 7 -14 -16 - 7 -21 - 8 - 12 Total... ........ $060,348 $853,086 +13 $1,069,181 -10 .Inoludes figures of two banks in Texarkan., Arknnaas, loo.ted in the Eighth District. tChange less than one-half of one per cont. GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS (Average of daily figures-in thoUBands of doUars) Combined total Reserve city banks Country banks February, February, October, November, Deoember, January, February, Gross demand 1939 . ..... , . . . $1,193,160 1940 ......... . 1,355,474 1940 .......... 1,408,515 1040 . ......... 1,460,895 1940 .... . .... · 1,474,217 1041 ....... . . , 1,495,852 1941 . . . . .. . ... 1,533,864 Beaumont ..... . . ....•. · . Dallas ........ · ·· .. · .. · . EI Paso ... .. .. · ·. · .... .. Fort Worth .............. G.lv ..ten .......... ·· · .. Houston ........... · ..... Port Arthur . ......... ... San Antonio ............. Shreveport .. ............ Waco .......... · .... · .. · Wiohita Falls ............ All othors . .............. Total . • . _ •. _ ... Time $225,328 234,306 233,323 283,412 287,808 289,594 241,491 Gross demand $674,977 785,130 814,555 842,576 841,903 856,284 876,181 Gross demand $518,183 570,344 598,960 627,319 632,314 639,618 657,683 Time $124,975 129,055 128,295 128,213 131,622 138,190 134,266 Time $100,353 105,251 105,028 105,199 105,686 106,395 107,285 SAVINGS DEPOSITS Percentage ehan,e in February 28, 1941 aavings deposita rom r Number of Amount of ~ Number of Jan.31, Feb. 29, s.vings aavings re~orting 1941 1940 deposits depositors anks .7 10,283 S 4,251,192 + 7.6 3 26,671,914 + 1. 3 91,542 + .01 8 .8 8,343,080 + .4 19,544 2 13,128,532 + .2 35,143 + .2 3 .3 .7 12,130,624 + 18,825 4 32,418,263 + 4.2 77,926 + .4 10 3,265,804 + 2.8 5,992 + .9 2 .7 18,064,659 + .9 28,281 6 + 2.2 12,309,593 + .8 25,331 3 .6 4,510,332 - 2.9 8,129 3 .4 3,655,702 - 1.2 7,ll3 3 .3 30,828,145 + 1.5 62,542 69 - + - + 115 385,601 $169,572,840 + 1.6 + ~1 4 MONTHLY BUSINESS REVIEW tion and shipments of lumber at pine mills in this district, which had increased sharply in January following the usual year-end decline, showed a moderate recession during February, but continued at a much higher level than a year ago. The value of construction contracts awarded in this district, which had shown a substantial decline in January from the record total reported in December, 1940, advanced 14 per cent in February and the total exceeded that of a year ago by about 43 per cent. On a daily average basis the value of contracts awarded in February was one-third higher than in the preceding month and nearly 50 per cent greater than in February, 1940. The expansion in the rate of awards over both the preceding month and the corresponding month a year earlier extended to each of the principal classes of building, with the most pronounced gain occurring in awards for public utilities construction. During the initial two months of the current year the aggregate value of construction contracts awarded in this district was 39 per cent greater than in that period of 1940. The marked expansion in building activity during the past year, with the consequent increase in demand for labor and building materials, has been accompanied by a rise in building costs. Wage rates have increased and prices of building materials, particularly lumber, have shown noticeable advances. According to data compiled by the Federal Home Loan Bank Board, construction costs in 25 key cities of the United States for a standard residence rose from 106 per cent of the 1936 average in July, 1940, to 112.5 per cent in December. Daily average crude oil production in the United States, which had followed a moderate downward trend during the preceding four months, increased 3 per cent in Februal'y due chiefly to a substantial gain in output in Texas. In the Eleventh District, daily average production rose 6 per cent in February to the highest level since last May. However, in comparison with the corresponding month a year earlier, when the heavy production of crude oil was causing substantial additions to above-ground stocks, the February daily average output in this district was 3 per cent smaller and production in the United States was down 2 per cent. Crude oil inventories showed only moderate increases in February this year. Refinery operations in this district increased further to a newall-time peak in February, and crude oil runs to stills in the nation as a whole were only fractionally below the peak established in June, 1940. Production of gasoline in the United States since the turn of the year has exceeded distribution by a wide margin. Inventories have shown an average gain of 1,500,000 barrels weekly and on March 1 they were only 2 per cent below the volume on hand a year earlier. Following a substantial decline in January, preliminary reports indicate that the rate of drilling activity in the Eleventh District showed a pronounced increase in February, reflecting chiefly increased operations in north and east Texas. In contrast with the sharp gain in this district the rate of drilling activity in the United States was only moderately higher than a month earlier. In comparison with February last year, the daily average number of wells completed in both this district and the nation was slightly smaller. The rate of operations at cotton textile mills in the United States increased by more than the average seasonal amount from January to February, and the Board of Governors' adjusted index of cotton consumption, which had declined in January, rose 4 points to 142 per cent of the 1935-1939 av- erage, which compares with the peak level of 145 per cent attained in December, 1940. The volume of cotton consumed during the month totaled 794,000 bales, which was the highest of record for that month and 20 per cent greater than in February, 1940. During the first seven months of the current season, domestic consumption of cotton totaled 5,221,000 bales, which was at a rate of about 9,000,000 bales annually. Such a figure, if realized this season, would be the highest of record, exceeding the previous maximum established in the 1936 -19 37 season by about 1,000,000 bales. Although purchases of cotton textiles from processing establishments during much of February were on a smaller scale than in January, the heavy buying that developed in the last week of the month apparently brought total mill sales well above the month's output. During the first week of March, the commercial demand for textiles continued heavy and the Government entered the market for a substantial volume of goods for defense purposes. Prices of cotton goods have continued to show some advances. Purchases of raw cotton by consuming establishments during Februa:Yl exceeded by a small margin the amount consumed, and mil stocks at the end of the" month were 12 per cent higher than a year earlier. Between the middle of February and the middle of March the average price of cotton, middling, 15/16-inch staple, at ten spot markets rose 68 points to the season's high of 10.68 cents per pound. According to trade reports, the recent strength in the raw cotton market was apparently due to the heavy demand from domestic consuming establishmentS, the scarcity of "free" cotton in trade channels, and the uncertainty with respect to probable changes in the farm program. Repossession of cotton in the Government loan is pr~ ceeding at a fairly substantial rate. The Commodity Cred~t Corporation reported that on February 28 there were apprOXImately 11,026,000 bales of cotton in Government loan stocks, consisting of 6,183,000 bales owned outright by the Corporation and 4,843,000 bales held as collateral for loans. Exports of cotton from the United States remained in smaIl volume during February, totaling only 60,600 bales, which brought total shipments for the first seven months of the current season to 724,700 bales. The latter figure compares with exports totaling 4,917,000 bales in the corresponding period of the preceding season. VALUE OF CONSTRUCTION CONTRACTS AWARDED (In thousands of dollars) February February January January 1 to February 28 1041 1040 1941 1040 1041 4 Eleventh Distrietr-total.. . S 23,731 $ 16,603 $ 20,768 $ 44,490 $ 31,°8 Residential. . . ....... . . 7,666 6,616 8,448 16,013 10,9 28,486 20,060 All other. . . . . . . . . . . .. . 16,166 0,088 12,320 United States·-total.... . 270,373 200,fi74 306,205 676,678 300,~~~ Residential. .. . ........ 116,460 74,868 111,306 227,766 162'607 All other . . . ... . . .. .... 153,014 126,716 103,800 347,813 244, ·37 states east of the Rooky Mountains, SOURCE: F. W. Dodge Corporation. 1 BUILDING PERMITS Pereentage Percentage ehange valuation From Jan. 1 te Feb. 28, 1041 chan"C --. valuation Valuation " Feb.,1940 Jan., 104 1 No. Valuation From 1040 +43 $ 55,763 - 26 +113 88 $ 130,613 +37 197,525 122 371 ,485 + 43 +14 _6 760, 188 404 1,1 61,346 +00 + 3 + 91 88,453 -7 1 231 395,763 - 31 _ 2 1,456,068 2,658,422 448 +21 + 4 +1 071,657 - 7 1,324 - 14 2,020,248 + 64 286,782 287 608,814 +28 +66 360,660 - 30 - 20 443 851,641 :':5~ 96,706 - 13 207,825 - 37 287 _ 40 1,116,640 -44 3,1 20,715 - 20 834 +26 106,428 204 100,844 + 22 +26 +68 370,362 - 12 -65 1,060 1,402,447 +0 298,365 023,206 -8 238 + 7 +35 161,666 -8 316,651 135 + 86 +6 81,120 139,245 + 89 +40 66 February, 1041 Abilene ........ Amarillo ....... Au,tin ...... ... Beaumont .... . . Corrru8 Ohristi. . D.I .. • ...... . . EI Paso .... .... Fort Worth ... .. G.lve8ton . ... . . Heuston . .. ..... Port Arthur . ... San Antonio .... Shreveport ..... W.co .......... Wichita Falls . . . No. 43 58 197 119 216 667 160 216 149 406 92 560 112 65 34 ------ - Total. . . . 3,074 $6,405,142 6 - 17 ·Includes Highland Park and University Park. 6,171 $14,159,254 -_1 MONTHLY BUSINESS REVIEW April 1, 1941 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) .... 0 ..... - INDUSTRIAL PRODUCTION 100 Tarj-IV J 60 tJ IV \ ./ 40 -----::~ ~ URA Bl.E MANVFAfuRE8 20 I00 eo eo NONDURAOI..£ MA~~9.-1~ 40 ~~INERAL8 20 I 1 9315 o 1936 1937 1938 1 939 1940 1941 ~ederal Reserve index of physical volume of produc· for variation, average tlon, ;=Olntsadjusred tOtn!season. Iby months,1935-39rerms of .100. Subnroups sbown are expressed in in the index January, 1935 to February, 1941. WHOLESALE PRICES OF BASIC COMMODITIES ~§?HIm~ 180 1 60 ~---+----4---~160 120 100 rv""''-F'''''~-l----\l,-=w~~I-='+---IIOO 60· '--_-l..___-==:::::...-:~.L 193~ 1 9 ~6 1937 1 938 ____L __...L__....J 60 1 939 1 940 1941 ~urffeau of Labor Statisti cs' indexes based on 12 foodu s and 16 industrial ma teri als, August, 1939 100. T bursday figures, Jaouary 3, 1935 to Marcb 13, 1941. "'<t., = MONEY RATES IN NEW YORK CITY • Industrial 2ctivity and employment increased further in February 2nd the nrst half of Much . Buying by producers and consumers continued in 12rge volume and wholesale commodity prices, particularly of imports, adv2nced. I20 / 60 I6 0 I40 140 120 - no ... 4 PRODUCTION In February volume of industrial output, on a daily average basis, rose more than seasonally, 2nd the Board's adjusted index advanced from 139 to 141 per cent of the 1935-39 average. Increases in February, as in other recent months, were lugest in the durable goods industries where 2 la rge proportion of defense program orders have been placed. Activity continued to rise sharply at machinery plants, aircraft factories, shipyards, and in the railroad eq uipment industries. Steel pr<>duction fluctuated around 96 per cent of capacity in January and February and rose to 99 per cent in the first half of March. New orders for steel continued large and, despite the high rate of output, unfilled orders increased further. Many orders have been placed for delivery in the second half of this year, reflecting the prospect of heavy consumption and some uncertainty on the part of steel users regarding future availability of supplies. Output of pig iron, coke, and nonferrous metals W2S likewise 2t near capacity rates in February 2nd unfilled orders for these products, too, were at exceptionally high levels. Demand for lumber continued large owing to a high rate of construction activity and output was sustained in large volume for this time of year. Automobile production increased in February and the first half of March to 2bout the peak rate 2tt2ined last November. Retail sales of new 2nd used cars 2dvanced to unusually high level •. In industries manufacturing nondurable goods, activity continued at the record levels reached in the latter part of 1940. There were further increases in the cotton textile, rubber, and chemical industries and activity at woolen mills also increased, following a temporary reduction in January. In most other lines activity was m2intained at the high levels of other recent months . Coal production rose less than seasonally in February but increased considerably in the nrst half of March when, according to trade reports, there was some inventory accumulation in anticipation of 2 possible shutdown on April 1 at the expiration of the present contract between the mine oper2tors and the miners' union. Copper and zinc production increased in February and recently domestic supplies of copper have begun to be supplemented -by imports from South America. Output of crude petroleum continued at about the rate that had prevailed during the three preceding months. Value of con.truction contract aW2rds in February declined somewhat more than se2sonally, reflecting decreases in both public and private work, according to reports of the F. W. Dodge Corpontion. Awards for public construction, although sharply reduced from the high levels reached in the btter half of 1940, were somewhat above those of a year ago, and awards for private construction were nearly half ag2in 2S large 2S in February of 12St yeu. DISTRIBUTION Distribution of commodities to consumers increased more than seasonally from January to Febru2ry. Sales at v2riety stores and by mail-order houses were the largest on record, making allowance for usual seasonal changes, and department store sales were also 2t a high level. ~~~~~__~~~~~~~~~--J O 1930 li38 1'137 1938 1939 1940 ~eeklY averages of' daily yields of 3- '84 1 5-year tax12empt Treasury notes, Treasury bonds callable after to lr years, and average discount on new issues of eaSUry bills offered within week. For weeks ending January 5, 1935 to March 15, 1941. ~.,DCII.Uu MEMBER BANKS IN 101 LEADING CrrtES Freight-car 102dings increased by about the usual seasonal 2mount. Shipments of miscellaneous freight, consisting mOiStly of manufactured products, showed an incre2Sc while 102dings of fore&t products rose less th2n seasonally 2nd grain shipments declined. WHOLESALE COMMODITY PRICES Prices of 2 number of basic imports rose sharply from the early part of February to the middle of March. Cotton yarns and gr2Y goods and nonferrous metal scup showed further increases in this period 2nd there were also advances in prices of some other domestic commodities, including lead, wheat, cotton, and oils and fats. 12 r - + - - l----+--l----I--"'04---l12 BANK CREDIT Commerci21 1020s continued to increase 2t member banks in 101 leading cities in February and the first half of M2rch and these banks also purchased 2ddition21 Treasury notes 2nd bills issued in connection with the defense program. As a result: of the increase in loans and investments, bank deposits showed a further ffi2rked advance. UNITED S1"A TES GOVERNMENT' SECURITY PRICES r I LOANS TO DROKERS 1 AND O!A1.ERS O~~__-L__Jt~~==~~~~o ~ 11315 ISse IlI1IT 1 038 1 83S 1940 1941 194dnesday figures, Januaty 2, 1935 to March 121 agrl- Conunercialloans, whIch include industrial ana eu Itural loans, represent prior to May 19, 1937 so-called "Ower loans" as then reported. Prices of Government securities increased after Fcbru2CY 15, following a sh2rp decline in the preceding ten weeks. The 1960-65 bonds on March 15 were about 3l1i points above their price on Februuy 15 and 2bout 1 \4 points below the 211-time pe2k of December 10. The yield on this issue, which incrc2Sed from 2.03 per cent 2t the pe2k in prices on December 10 to 2.30 per cent on February 1S, had declined to 2.14 per cent on March 11. MONTHLY BUSINESS REVIEW CASH FARM INCOME (In thousands 01 dollars) ~---Texas - - - " . - E l e v e n t h DistriotO ______ 1940 1939 1938 1940 1939 1938 Cotton .... ............. . $139,828 $128,137 Sl31,017 S 213,463 $ 199,943 $204,822 Cottonseed ... . ......... . 21,894 16,347 21,604 32,358 26,831 32,787 41,692 36,616 38,836 97,735 All grainst .............. . 94,273 94,530 Corn ....... .. ... ... .• . 4,026 4,158 4,654 7,640 8,560 8,133 16,309 18,411 51,436 52,508 53,643 17,775 Wheat ....... ........ . 23,772 21,353 53,189 46,649 42,840 All vogelablest .......... . 30,375 Irish potatoes ........ . . 1,584 1,569 1,286 3,591 3,945 3,654 Truok crops ..... ... . . . 26,378 20,519 17,985 44,329 37,693 33,606 13,436 11,561 24,244 22,869 20,417 13,765 Fruits and nuts ... . ..... . 23 1,546 237,468 459,926 434,372 438,101 Total income Irom all orops 262,653 233,160 217,075 409,040 414,540 388,730 Livestook§ .............. . 230,050 110,755 68,814 142,667 170,189 113,245 Government income pmts . 86,489 TotaICarm income ... . $579,192 $575,461 $523,357 $1,012,233 $1,019,101 $940,076 'Eleventh District figures represent combined totals for the five states wholly or partially included in the Eleventh District. tlneludes corn, wheat, oats, barley, rioe and grain sorghums. Uneludes Irish and sweet potatoes and truck crops. §Ineludes receipts from the salc 01 livestock and livestook produots. LIVESTOCK RECEIPT8-(Numbor) ,.----Fort W o r t h - v - - - San Antonio--... Fobruary February January February February January 1941 1940 1941 1941 1940 1941 30,530 39,521 12,918 11,679 15,726 CattI................... . 26,309 18,445 24,952 15,662 11,993 26 1721 Calves .. .............. .. 16,415 37,937 67,438 13,877 10,081 15,993 Hogs ............. ... ... . 48,359 29,604 26,223 5,831 6,317 6,908 Sheep ................. .. 18,740 COMPARATIVE TOP LIVESTOCK PRICES (Dollars pcr hundredweight) ,.----Fort W o r t h - v - - - San Antonio--... Fehruary February January February February January 1941 1940 1941 1941 1940 1941 $ 9.25 $11.50 $11.75 $ 7.50 $12.00 Be.1 .teers ............. .. $11.50 11.25 9.00 11.50 Stooker sleers .. ... ..... . . .iiJ:iJiJ 10 .00 11.50 12.00 9.00 11.50 Beifer. and yearlings .... . 7.50 6.50 7.25 6.85 6.00 Butcher cows ....•. .... • . 7.00 9.75 10.50 8.50 10.00 8.25 Calves .............•.... 10.50 8.25 5.50 8.10 5.50 8.45 7.85 Bog.................... . 9.50 7.50 8.50 Lambs ................. . 10.50 8.75 9.75 RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF HOUSTON AND GALVESTON-(Bales) February 1941 100,143 Receipts ............... . . 74,749 Exports ................ . Stooks, end of monlh .... . 1,961,039 February 1940 330,887 396,519 1,495,844 January 1941 96,141 85,679 1,967,962 August 1 to February 28 This seMon Last season 1,580,651 3,308,441 2,815,191 686,770 STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS ~---Texas--v---United Stales---August 1 to February 28 August 1 to February 28 This season Last season This season Last scason Cottonseed received at mills 1,039,582 888,778 4,139,744 3,885,59 1 (tons) ... . . ...... ... ...... . 3,485,370 916,548 865,924 3,335,075 Cottonseed orushed (tons) .. . . . Cottonseed on h.nd Feb. 28 520,847 72,922 (tons) ..... ... ............ . 843,511 138,781 Production of products: 250,461,341 1,064,803,291 1,095,635,500 Crude oil (pounds) ........ . 278,404,249 1,569,864 426,360 412,504 1,480,764 Cake .nd meal (tons) ...... . 879,842 233,967 223,701 839,100 Hull. (tons) ...... . .. . ... .. 885,354 200,282 895,119 225,325 Linters (running bales) ..... . Stooks on hand February 28: 79,652,434 89,221,337 25,102,170 Crude oil (pounds) . . .. . ... . 30,098,388 200,275 74,405 252,947 Cake Bnd meal (ton.) .. .. . . . 61,369 104,787 211,243 43,884 96,890 Hulls (tons) .............. . 324,665 Linters (running bales) ..... . 75,458 271,837 96,829 SOURCE: Bureau of Census. CONSUMPTION, STOCKS, AND EXPORTS OF (;OTTON-(Bales) August 1 to February 28 January February February Thi. season Last senson 1941 1940 1941 Consumption .t: 82,453 20,373 129,923 19,368 11,451 Texas mills . ........... 4,703,707 5,220,917 793,626 661,771 843,274 Uni ted States mills ..... U.S. stooks-ond of month: 1,874,611 In consuming cstab·mts. 1,905,413 1,700,394 Publie stg. &: compresses . 14,038,917 12,176,733 14,668,189 Ex~orts from U. S. to: 1,525,928 nited Kingdom ... . ... 12,920 192,631 18,218 339.988 617,904 France .......... ...... 130,230 None None None 385,132 None Italy ...... ......... ... None 74,404 None 18,992 Germany .............. None None None None 017,832 Other Europe . . ... . . ... 8,435 102,307 5,305 164.042 675, 180 49,456 9,986 01,990 0.754 775,543 171,243 29,256 155,118 18,907 i~Forho; ·e~~;;I~iCs·.·.:::: Total exports . .... ... 60,597 746,080 52,184 724,729 - 4,916,511 CRUDE OIL PRODUCTION-(Barrela) February, 1941 Increase or decrease in dailY average produotion from~ Total produotion 4,830,000 North Tex .................. . West Texas ............. . ... . 7,446,800 East Tcxas ...... .. ... .. .... . 12,539,350 5,688,050 South Texas ....... . ........ . 7,113,700 Texas Co.slal. ......... .... .. Dailyavg. production 172,500 205,957 447,834 203,144 254,061 Fob., 1940 - 2,524 1,110 -46,978 - 16,725 +22,506 37,617,900 2,861,950 1,949,550 1,343,496 102,213 60,627 -42,611 - 8,654 + 1,008 Total Texa •... . .. . New Mexico .. .. . ...... ..... . . North Louisian.............. . + Total District... .. . 42,420,400 1,515,336 -50,257 SOURCE: Estimated from American Potroleum Institute weekly reperts. J.n., 1941 + 1,434 +27,304 +17,861 +17,497 +18,256 - +82,352 + 1,378 + 669 +84,399