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MONTHLY BUSINESS REV I EW of the FEDERAL RESERVE Dallas, Texas, April 1, 1945 Volume 30 DISTRICT SUMMARY Frequent rains throughout most of the district .during February and the first half of March have interferred with the co~ pletion of soil preparation and the planting of early crops, wll1c~ is already behind schedule; a period of clear, ~ry w~ather 1S urgently needed to enable farmers to proceed rap1dl,! with ~eed ing operations. On the other hand, the excellent mOisture Sltuation and the generally mild temperatures ~ave s~imulated the growth of small grains and of range vegetatIOn. Livestock have wintered well and should gain flesh rapidly with the improvement in range conditions. Reflecting the letting of contracts for ne,: facilities for war production the value of awards in February mcreased over that in the prec~ding month and was more than double .that in Feb:uary last year. Reports indicate that employmen: m ~1~ny war ~dustries is expanding and that over-all production IS. mcreaslllg. Daily average production of crude petroleum mcreased further and was about 11 per cent larger tha~ a year ago; ~llo,: able production for March indicates a contmued expanSIOn 111. output. Drilling operations are on a substantially larger scale than a year ago. After allowance for the shor.t mo~th, cotton consumption at Texas mills increased substantially 111. Fe~ruary and was the largest in several months. Consumer buY111.g at department stores increased by more than the usual amount from January to February and was substantially larger than a year ago. The deposits and loans and investments at weekly reporting member banks increased during the four weeks en~ed March 14, recovering most of the decline that occurred dunng the preceding five weeks. BUSINESS Buying at department stores in this district continued in exceptionally large volume during February. Daily average sales during the month were about 13 per cent higher than in January and exceeded those in February last year by 20 per cent. Total sales during the first two months of 1945 were 19 per cent greater than those during the corresponding period of 1944. During the two weeks ended March 17, the margin of increase in sales as compared with a year ago has continued to widen, reflecting in part buying in anticipation of Easter, which occurs earlier this year than in 1944. The aggregate stocks at reporting department stores at the end of February were 7 per cent larger than those a month earlier but were 4 per cent below those at the end o~ Fe?ru~ry last year. Reports indicate that merchants are experlencmg mcreasing difficulty in obtaining certain types of merchandise to maintain inventories in the face of expanding sales. At the end of February, stocks of piece goods and house furnishings were substantially smaller than a year earlier and those of many other departments were also at a lower level. On the other hand, inventories of such items as small wares, infants' wear, and toilet articles and drugs are sharply higher than a year ago. Sales of women's and misses' ready-to-wear continue to show the most pronounced gains over a year ago. Department stores continued to collect approximately twothirds of their open accounts outstanding on the first of the month and approximately one-third of their instalment accounts Outstanding. BANK of Dallas Number 2 After having declined substantially in January, the sales of reporting furniture firms increased slightly during February and were 16 per cent greater than in February, 1944. Inventories showed a further expansion during February but were about 7 per cent lower than on the corresponding date last year. AGRICULTURE Heavy rains in recent weeks throughout most sections of this district, except in portions of southern New Mexico and Arizona, were beneficial to ranges, small grains and other growing crops, but further delayed plowing and the seeding of spring crops, which is considerably behind schedule in many areas. Winter wheat, which was seeded under ideal conditions last fall, has developed rapidly under mild temperatures and good moisture supplies, and the general condition is reported much better than at this time last year. Range feeds and pasturage are in good condition in all areas with ample stock water supplies available. Livestock have wintered well and losses have been comparatively small. The mild temperatures which prevailed throughout mQst of the winter caused fruit trees to start growth earlier than usual in tlus district, exposing them to danger from late frosts . Some damage to fruit was caused in north Texas by sleet and ice during the first week in March but losses appear to have been comparatively light. A considerable period of warm, dry weather is now urgently needed to enable farmers to complete land preparation and to plant crops before the season is too far advanced. Above normal rainfall in most of the commercial vegetable areas of Texas during February and the first half of March had retarded planting and harvesting operations, resulting in only fairly satisfactory crop conditions. Shortage of transportation facilities and market conditions curtailed shipments o.f early beets, brocolli, cabbage and spinach. Planting of most spring vegetable crops made good progress and a large acreage of cantaloupes, cucumbers and watermelons has been planted in the earliest Texas districts. Transplanting of tomatoes has started in the early districts outside of the Rio Grande Valley and planting of potatoes is well under way. The green corn crop in the lower Rio Grande Valley is in excellent condition and a large acreage of sweet corn was planted in later producing areas. Blight infestation is rather general but is not considered serious except in the Raymondville district where some fields are a total loss. The citrus crop in the Rio Grande Valley developed rapidly and the bloom this season averaged about three weeks earlier than usual. Growing conditions have continued favorable and .trees were holding a heavy set of new fruit at the end of February. The production of grapefruit is now estimated at 21,000,000 boxes, representing an increase of 4 per cent over earlier predictions and 19 per cent above the crop harvested last season. The orange crop is estimated at 3,850,000 boxes, indicating an increase of approximately 9 per cent over the production last season. During 1944, a record volume of 3,475,000,000 eggs was produced in Texas, representing increases of about 8 per cent over 1943 and of approximately 64 per cent over the 10-year (1933-1942) average. During the first two months of 1945, the number of laying hens was about 10 per cent below the same period a year ago but egg production for the period declined This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) MONTHLY BUSINESS REVIEW 2 only 4 per cent. Production at Texas commercial hatcheries in CASH FARM INCOME January was estimated at 3,300,000 chicks, which was about (Thousands of dollnrs) - Decemher 1044 the same as in January last year, and about 4 per cent above the Rceeipts fromDecember Crops Livestock' 1044 5-year (1939-1943) average. The output of turkey poults was S 0,830 S 2,na l S 12,740 Arizona .. ... . . . . ... much greater than during January a year earlier, reflecting an Louisiana 22,467 5,Ij06 27,072 ... . ..... .... . . . 5,931 4,789 10,720 New Mexico . .. ......... . increased interest in turkey raising. I ' Range conditions are above average in all major areas of the district, reflecting the favorable moisture conditions which have greatly improved range feeds and pasture grasses. The condition of ranges in Texas on March 1 was reported at 82 per cent, an increase oi 1 point during February and 4 points above the 20-year (1924-1943) average. The mild weather during the winter, together with good small grain pastures, made it possible to handle livestock with lighter than uSllal supplemental feeding, although feed supplies are reported plentiful in virtually all areas. Due to favorable moisture supplies, mild temperatures and rapid growth of winter grasses and weeds, prospects for spring grazing are goodi. The condition of Texas cattle and calves on March 1 was 81 per cent, an improvement of 1 point over the preceding month and 5 points over a year earlier. Cattle in good flesh are in demand but the number being offered for sale are few. Reflecting the favorable moisture conditions which provided ample grass and weeds for winter grazing, the March 1 condition of Texas sheep at 85 per cent was 1 point higher than a month earlier and 3 points above that a year ago. Lambing started earlier in some sections than a year ago, and with ewes reported in good flesh, a large lamb crop is in prospect. Comparatively heavy marketings of good weight lambs from grain pastures are under way, but since herds were closely culled in 1944, shipments of grass fat sheep and yearlings are not expected to reach last year's record volume. There appears to be little demand for stock sheep and some sheep ranches are shifting to cattle. The number of meat animals on farms and ranches in the Eleventh District and in the nation as a whole decreased during 1944, due largely to the record slaughter, resulting from the heavy demand for all types of meat and a close culling of herds. The tight feed situation during the first hal£ of 1944 and the less favorable relationship existing between livestock prices and feed prices contributed to the heavy marketings of livestock but the feed situation improved considerably during the latter part of the year and is now much more favorable than a year ago. 'NUMBER AND VALUATION OF ALL CATTLE IN TEXAS, JANUARY I WI IONS . '" 20 -- - 1910 1945 • ~: WJ/tt\ / / 10 I 8 ~ ~ I-;/, _--r-' 6 NUMBER "-:( loll LItIH ~,,,w.,,~ W +H / / \+~ \; I'IF 001 JL 400 / / ...... ,..... / . . r+- zoo 160 ...... 120 I '--1 4 80 3 60 2 4o 1 ~ . l il ~ 12. 1 92~ IIUO 20 I g~S 19"0 19"S SOIJIICE UNlTI!D STA TU DtPAATM[N T 0' AORICUl. lURe ' 1IO •• iZO VA LUAl lON I!STI MATEO 'filOM AlTERNATIVE 5OUPC[ The United States Department of Agriculture reported that the number of cattle, sheep, hogs, horses and mules on Texas farms and ranches on January 1, 1945 was smaller than a year earlier, 'but the number of goats showed a further increase. Marketings of cattle and sheep during 1944 reached record proportions and resulted in substantial reductions in numbers. The ••• ' 14,010 72,893 Okillhomn .... . .....•.. .. TexllS . .. . . ..... . . .. . .. . . 16,047 36,568 Totnl receiptsl -- - - Deoember Jan. 1 to Dec. 31 1043 1044 1043 S 15,088 S 121,136 S 128,735 30,148 237,802 233,422 O,06n 100,890 106,877 30,057 30,514 471,034 384,481 100,461 07,178 1,208,808 1,103,020 Totnl. ...... . . $126,040 $65,810 $101,850 $1 81,001 $2,140,369 $2,017,435 ' Ynoludes receipts from the sale of livestock nnd Iivestoek products. SOURCE : United States Departmeat of Agrioulture. LIVESTOCK RECEYPTS-(N urober) - -ForI Worth- - - - - - S O n Antonio - - Fobruary Februnry January Febru",y February January 1045 1944 1945 1045 1044 1945 62,892 17,503 13,837 20,034 36,824 Cattl o.. . . .. .. .. .. .. .. . 38,271 15,570 16,300 22,775 15.334 30,605 Cnlvcs ... ....... . " .... . · 21,450 70,147 6,867 13,703 14,138 108,520 35,121 03,063 18,560 11,594 23,052 . :::::::::::: ::::: - ~hoe~~: ~~:~~~ LIVESTOCK ON FARMS, JANUARY I, 1944 AND 1945 N umber-(Thousands of hend) ~- TexllS Five States' -~-United Stat<l81944 1945 1044 1045 1044 1045 576 550 1,268 1,244 0,302 8,807 Horses lind colts . . ....... . 400 372 706 667 3,531 3,408 Mules and colts . . .... . .. . 7,745 7,500 14,606 14,360 82,364 81 ,760 All cattl o nnd calves .. .. . . 1,593 1,503 2,004 2,985 27,656 27,785 Milk co\Vst ..... . ... .. . 3,106 2,010 5,801 3,964 83,852 60,660 Hog." including pigs ..... . 10,803 10.001 13,721 13,178 51,760 47,945 All sheep and lambs ..... . 3,500 3,316 G oats ~ ..... ... . . ..... .. . Total, above species . . Chickens ... . .. ....... . . . Turkeys . .. ... ...... .. .. . 25,506 38,405 848 24,131 33,072 856 36,105 64,280 1,133 38,422 56,477 1,100 Vnluntion-(Thousands of dollnrs) Horses and eolts ... . . .... . $ 35,024 $ 30,713 S 73,078 S 65,041 36,008 20,597 67,002 5~,573 Mules nnd colts ......... . 376,241 721,888 723,034 All enttle and calve• .. . ... 386,922 108,545 200,720 202,887 Milk oowst . . ... .... . . . 108,324 36,li85 32,182 64,276 58,400 Hogs, including pigs ... . . . 61,776 60,673 87,621 84,311 All sheep nnd lambs .. .. . . 14,425 15,050 Goats ~ . ....... . .. . . . . . . . 230,818 576,441 7,572 202,670 511,130 7,401 732,865 505,710 5,661,007 2,822,040 1,470,533 451,383 S 576,640 ' 453,581 5,505,410 2,758,870 1,262,057 411,220 Totnl, above species . . $570,780 5544,456 $1,014,765 S989,868 58,821,588 S8,208,017 38,880 34,651 66,204 59,613 675,408 616,445 C1hickens . ... .. . .. . ... . . . 3,646 4,152 4,829 5,346 40,001 48,075 Turkeys . . .. . . . .. ..... .. . Total farm vnlue, including chickens nnd turkel's.... 613,306 583,250 1,085,708 1,054,327 0,537,087 8,868,437 ' TexllS, Arizonn, Louisiana, New Mexico, and Oklaboma. tCow8 nnd heifers 2 yenrs old nnd ovor kept for milk, included ill "All cnttle and OIIlves." ~Goata numbers and value shown for TexII" ollly, lind not included in U. S. totals. Estimates for Arizona, Louisinna, New Mexico, nnd Oklahomn 1I0t avnilnble. SOURCE: Ullit~d Stnte. Depnrtmellt of Agriculture. COMPARATIVE TOP LIVESTOCK PRICES (Dollara per hundred weight) - - - F o r t Worth,- - - - - - Son Antonio - - February Februnry Janunry February Fobrunry January 1945 1944 1945 1045 1944 1945 515.25 516.00 $15.00 514.50 $14.00 Bcof steeN! ...... ... .. ... . $16 .35 13.50 l4.00 13.00 Stocker steers . . ... . . .. . . . .i5:00 . j.j:50 14.25 Heifers lind yenrlings .... . 16 .00 15.00 15 . 25 12 . 25 12.00 11 .50 13.00 12.00 12.75 Butcher cO\VS ... . .... .. . . 14.25 14.25 14.25 14.50 14 .00 Cnlves ... .. . .... . . . . . . . . -14.50 14.55 13.55 14.55 14.55 13.65 14.55 Hogs . ........ . .. ... . .. . . 13.85 15.00 14.50 15.25 15.50 15.00 Lambs ................. . COTTONSEED AND COTTONSEED PRODUCTS ~---Texns United Statcs--August 1 to Februnry 28 Augnst 1 to Februnry 28 This sellSon LaIlt season This ROlISon LaIlt SCIISon Cottonseed reoeived nt mills 4,087,220 3,816,827 888,703 003,761 (tollS) ...... .. ... . ... . ..... 3,131,825 3,237,728 803,785 680,483 Cottonseed erushed (tons) . . ... Cottonseed on hand Feb. 28 1,067,151 667,875 120,677 254,924 (tOilS) . ... . ...... . ......... Produetion of products : 1,004,891 230,081 06M22 206,508 Crude oil (thousand Ibs.) . .. . 1,497,920 370,195 1,436,878 321,146 Cake nnd mo.11 (tons) . ...... 188,870 725,460 755,316 Hulls (tons) . . .. . .. . . ...... 158,950 240,630 015,300 064,351 200,208 Linters (running bllles) ...... Stocks on hand Feb. 28: 12,262 42,654 47,684 12,061 Crude oil (thousand lb•.) . ... 69,414 15,571 94,327 22,516 Cake nnd menl (tons) ....... 5,310 10,595 50,826 Hulls (tons) ..... ..... ..... 18,489 207,320 81,026 113,177 34,492 Linters (running bales) ...... SOURCE: United States Bureau of Census. DOMESTIC CONSUMPTION AND STOCKS OF COTTON-(Bales) January Au~ust 1 to February 28 February Fehruary 1045 TillS sellSon Last season 1044 1945 Consumption nt: 16,161 121,459 108,885 15,536 15,971 Toxas mills . . ..... . 5,658,740 5,002,178 811,062 849,945 781,550 United States mills. U.S. • tocks-end of mOllth: In consuming estabm'ts... 2,278,O.~2 2,350,819 Public stg. & compresses .. 12,400,392 11,521,058 MONTHLY BUSINESS REVIEW most drastic reduction, however, in Texas livestock numbers was in hogs, with the number reported on January 1, 1945 being more than 1,000,000 head, or 35 per cent, less than on the same date a year earlier. The reduction reflected primarly the decrease in pig production which was 1,733,000 smaller in 1944 than in 1943. Due to generally favorable conditions in Texas during 1944, death losses of cattle and calves were comparatively light and as a result of close culling and selling off of old cows, cattle on hand tlllS year are of better grade and quality than those in earlier years. Sheep herds were also culled closely in both 1943 and 1944 and the total inventory on January 1, 1945 was estimated at 10,091,000 as compared with 10,363,000 on the same date a year earlier, representing a decline of approximately 3 per cent. On January 1, 1945, the total farm value of all Texas livestock, including clllckens and turkeys, was estimated at $583,259,000 as compared with an inventory value on January 1, 1944 of $613,306,000, representing a decline of 5 per cent. Despite this decline, the present inventory value of Texas livestock is more than 50 per cent above the 10-year (1934-1943) average. . After having increased steadily from 1938 through 1943, lIvestock numbers in the nation as a whole dropped during 1944 and on January 1, this year, were below either of the past two years. Moreover, the aggregate value of livestock in both the Eleventh District and the nation as a whole was smaller on January 1, 1945 than a year earlier due to the general reduction m numbers and the further fact that, with the exception of hogs, the average value per head of all livestock was lower this year than last. Farm prices received by Texas fanners and ranchers during ~ebx:uary, as reported by the Department of Agriculture, showed slgruficant increases for beef cattle and lambs and moderate increases for grapefruit, sweet potatoes, chickens, feed grains and wool. Prices received for such items as wheat, cotton and Cottonseed, peanuts, butterfat, hogs and sheep were at about the same levels as in January. On the other hand, moderate declines were indicated for milk and eggs. With the exception of feed grains, hay and eggs, prices received for most farm products were above the levels obtaining during February last year. FINANCE The upward trend in the reserve balances of member banks in this district was halted temporarily in February when average balances declined about $12,000,000, but the rise was resumed dUring the first half of March. In that period, average reserve balances were at a new peak of $635,800,000, which was $29,200,000 higher than the February average and $120,000,000 above that in March last year. During February, the gross deposits of member banks declined moderately, since the decline 1U the Treasury's war loan deposits at banks was only partially offset by a rise in private deposits. Due to this rise in private deposit, the average required reserves of members banks increased moderately and as average reserve balances declined, there was a substantial decline in the excess reserves which dropped to the lowest level since last October. The circulation of Federal Reserve notes of this bank, which ~howed little net change during January, rose substantially durIng February and remained at the high level during the first ha~f of March. Total circulation of $556,000,000 on March 15 this year was approximately $10,000,000 higher than at the end of 1944, corresponding closely with the dollar increase that occurred during the same period last year. The rate of expansion, however, was somewhat smaller than a year ago and was lower 8 than the rate of expansion in the circulation of Federal Reserve notes of all Federal Reserve banks. The deposits of weekly reporting banks, which had declined sharply from the middle of January to the middle of February, increased by $63,900,000 during the four weeks ended March 14. Although Government deposits showed a further decline of $44,200,000, all other classes of deposits increased substantially. These banks utilized the increase in deposits to expand loans and investments by $20,100,000 and to add $23,200,000 to their reserves with the Federal Reserve Bank and $21,400,000 to their balances with correspondents. The total loans of these banks, which followed an irregular downward trend during the first two months of the year, increased substantially during the first half of March and are now at approximately the same level as at the end of 1944. The net increase of $7,900,000 during the four weeks end:ed March 15 consisted chiefly of $2,300,000 in commercial, industrial, and agricultural loans and $5,500,000 of "all other" loans. Commercial, industrial, and agricultural loans, which normally decline during the first half of the year, have fluctuated within relatively narrow limits thus far in 1945. Du.ring the four week period between February 14 and March 14, these banks made net additions of $12,200,000 to their holdings of investments and made substantial shifts in their holdings of various classes of securities. The largest shift represented a reduction of $51,800,000 in holdings of Treasury notes and an addition of $72,200,000 to holdings of certificates of indebtedness. A considerable part of this shift represented the exchange of maturing and called Treasury notes for a new issue of certificates of indebtedness. Holdings of Treasury bonds were reduced by $11,400,000 following a period in which holding~ had expanded substantially. Holdings of Treasury bills, whIch had reached the lowest level in two years toward the end of February, increased moderately during the first half of 1'.1arch. INDUSTRY Reflecting the effect of recent War Production Board app.rovals covering essential construction, the value of construc~lOn contracts awarded in this district, after declining sharply III January, resumed an upward trend during February. The aggregate value of awards, amounting to $17,855,000, was about 17 per cent above that in the preceding month and more than double that for February, 1944. WillIe non-residential con.struction showed a sharp increase over February, 1944, whlch was relatively low, the value of awards for all other types of construction was lower than in the same month last year. Moreover, in February, 1945, the value of awards for residential c,onstruction was smaller than in any corresponding month Slllce 1933 and 94 per cent below the record volume in February, 1942. Increased military demands have resulted in a marked reduction in the supply of all types of construction materials with the exception of cement and concrete products. The lumber supply is extremely critical due to a drop in production brought abo~t by difficulties in obtaining logging and transportation eqUlpment, shortage of manpower and tires, and unusually bad weather that has prevailed in the major lumber producing regions. As war demands for lumber and steel are expected to increase, the War Production Board has ruled that even for authorized essential construction, extreme caution must be exercised in specifying the use of these materials. Production of 553,000 barrels of Portland cement at Texas mills during January was about 50,000 barrels above the output for December and the largest since September, 1944. Shipments of cement in January increased sharply over the preceding month but as 4 MONTHLY BUSINESS REVIEW production in recent months has exceeded shipments, stocks at the end of January had increased to 1,050,000 barrels, the largest since February, 1944. The step-up in production of west Texas crude oil, is to increase the movement of crude oil to West Coast refineries where it is urgently needed. The immediate goal is to increase the current Cotton consumption at United States textile mills reached a , movement of west Texas crude oil to California refineries from record rate of approximately 1,000,000 bales in April, 1942, but 14,500 barrels daily to 20,000 barrels daily and to eventually since that date, despite the greatly increasing military and increase the movement to 42,000 barrels daily, provided transcivilian requirements and the concerted efforts of several gov- portation facilities are obtainable. ernment agencies to maintain output at high levels, the general Despite the near record production schedules being mainconsumption trend has been downward. Although total cotton tained, stocks of above ground crude oil in this district declined consumption during February of 781,500 bales was 8 per cent approximately 2 per cent during February and' the 119,256,000 below that in January, and about 4 per cent under that in Feb- barrels on hand at the end of the month was about 6 per cent ruary last year, daily average consumption in February increased below the stocks held at the end of February, 1944. Stocks outsubstantially and was at the highest level since November, 1943. side this district amounted to only approximatelY' 99,00@,000 Total consumption for the first seven months of the 1944-1945 barrels at the end of February and were 10 per cent smaller than season was 4 per cent or approximately 241,000 bales less than a year earlier. in the same period last season. Drilling activity, as measured by total well completions, was The War Production Board recently announced that good progress had been made in stepping-up the production of vitally needed cotton duck for military use but that the greatly expanded military requirements for textiles and textile products, coupled with continued labor shortages and inventory' depletions, have resulted in a serious reduction in the total textile supply for civilian consumption. Continued efforts are being made to divert a substantial proportion of the remaining available supply of cotton textiles to producers of the most essential items of everyday wearing apparel for all age groups, at prices that normally meet the greatest demand. Cottonseed receipts at Texas cottonseed oil mills during February totaled 35,000 tons, or about 53 per cent less than in the preceding month but were more than three times the reecipts in February a year earlier. Shortage of manpower necessary to process the cottonseed is reflected in an average decline of about 24 per cent in the volume of cottonseed crushed and in the production of cottonseed products. Stocks of cottonseed ,on hand at the end of February totaled 255,000 ton, as compared with 130,000 tons held at the same time last year. Stocks of linters and crude oil were less than a year ago due to the continued heavy demand for these products. On the other hand, stocks of hulls, cake and meal were much larger than at the same time last season as supplies of grain sorghums and other supplemental feeds have been much more plentiful. Production of crude petroleum in the Eleventh District increased further in February and the daily rate of 2,320,000 barrels was approximately 11 per cent above that for February last year. Production of crude oil outside this district also increased slightly above January levels and was approximately 6 per cent above the production in February, 1944, reflecting the continued increase in production activities on the West Coast. For the second consecutive month, the Petroleum Administration for War has certified all-time high production schedules for the various oil producing states with a daily average crude production rate for March of 4,756,800 barrels, representing an increase of 36,550 barrels daily over that for February, the previous all-time high. The March certification for Texas calls for a daily production rate of 2,31 0,000 barrels of crude oil, representing an increase of 20,000 barrels daily over the previous month; the increase to come entirely from west Texas fields. at a much higher level in the Eleventh Federal Reserve 1i)istrict and in the nation as a whole during the first two months of 1945 than during the same period in 1944. Approximately 1,300 wells were completed in this district during January and February of this year as compared with 880 wells during the first two months of 1944. Dry wells were encountered in about 40 per cent of the completions during the first twO' months of 1944, as compared with 35 per cent for the same period this year. The greatest drilling activity in this ,district during the first two months of 1945 was concentrated mostly in proven territories in west Texas, north Texas and south Texas fields. The Petroleum Administration for War has arranged! to increase the supply of tubular steel so vitally needed in drilling operations, and the present daily average of 20 well completions is expected to increase during the summer months. Readjusted war production programs, drastic changes in design, delays in obtaining new machinery and manufacturing equipment, and shortages of trained employees have caused some lags in Texas industrial production in recent months, but the over-all output has apparently been expanding. To,tal employment in the principal war industries was maintained at about the same level during January this year as in the last few months of 1944, although there has been considerable shifting from plant to plant. Urgent demands for munitions since last June imposed new pressures on ordnance plants in Texas and the number of employees at these plants has increased during the past seven months with further additions to working forces scheduled as plant facilities are expanded. In January, employment at petroleum refineries and at chemical and rubber plants was above that in December and resumed the upward trend which first became pronounced in May, 1944. Slight increases were also indicated in the number of workers in duck mills, machinery, iron and steel plants. On the other hand, employment at aircraft plants continued the decline which has been in evidence during the past nine months, due largely to increased productivity of wo·rkers and the severe cut-back in aircraft production, but indications are that an increased number of workers will be needed within the next three months. Further declines are indicated for employment in shipbuilding and in the lumber industry. Although civilian employment at military establishments, which had been well sustained in 1944, declined in January, there seems to be a need for additional workers. MONTHLY BUSINESS REVIEW APRIL 1, 1945 NATIONAL SUMMARY OF BUSINESS CONDITIONS (ComIllled by the Board of Governors of tho Federal Reserve System) ~ ..., 240 ""~L~ _ ' " , l I l t , "·101 /\ , Ii 220 too V leo 160 J 140 120 """ / 1157 1858 1938 1940 ..0 prices generally showed little change. .20 INDUSTRIAL PRODUCTION The Board's seasonally adjusted index of industrial production was 235 per cent of the 1935-)9 average in February, as compared with 234 in January and 232 in the last quarter of 1944. 160 180 / 80 of department store sales was one-fifth greater than in the same period lost year. Wholesale commodity 200 / IV ) .:1. 100 / Industrial activity continued to increase slightly in February and the early part of March. Value ..."0"" INDUSTRIAL PRODUCTION """~VOUI'" 200 194 1 1942 1043 140 Steel production, which declined further in the first part of February as a result of continued 120 severe weather conditions, showed a substantial increase at the end of the month and in the first three 100' weeks of March. Average output of open hearth steel during February was 2 per cent above rhe January eo rate, while electric steel production increased 7 per cent. Outpu~ of nonferrous metals continued to 1944 Federal Reserve index. Monthly ligures, larest shown is for February, 1945. rise slightly in February, largely reflecting increased military demands. Activity in the machinery and transportation equipment industries was maintained at the level of the preceding month; a decline in shipbuilding offset a slight increase in output of most other munitions industries. Production of lumber DEPARTMENT STORE SALES AND STOCKS and stone, clay, and glass products in February was at about the January level . ...."'. "",-"__ _u"",,,,""""'"'IM ,I), :\ lI-r\ 180 ! 160 120. ~ 100 ES: 80 ~N~II eo JP rtt V ,,~uA 140 200 fI,V \ r\~~~ nocKi ~..(',J) I I ing establishments continued to decline, as pork and lard production dropped further and was 50 per 40 cent below the peak level reached a year ago. In March it was announced that supplies of meat available 20 for civilians in the second quarter of 1945 would be 12 per cent less than in the first quarter. Activity in rubber products industries in January and February was 6 per cent above last autumn, reflecting chiefly a sharp increase in production of military tru.c k tires. eo I 1938 ago. Output of explosives and small arms ammunition showed further large gain5. Activity at meatpack- 60 100 V"" . r, In? Production of most nondurable goods showed little change in February. Output of cotton goods and shoes, however, rose 5 per cent from the preceding month to a level slightly above that of a year 1939 1940 1941 1942 1943 19 44 Federal Reserve indexes. Monthly ligures, latese shown arc for February, 1945. . Minerals output rose slightly in February, reflecting increased output of anthracite and a further gain in crude petroleum production. Anthracite production recovered in February and the first two weeks of March from a large decline during January. Bituminous coal production showed little change in February from the January level and declined slightly in the early part of March. WHOLESALE PRICES DISTRIBUTION 140 r - - t - -- i - - - i - - - l 140 Departmen.t store sales in February, which usually show little change from January, increased considerably this year. Value of sales in Fobruary and the first half of March was 22 per cent larger r UM Ililloouc r~",- 120 ___1/_~~.v' 1 Vi t - - - I - -- I than in the corresponding period a year ago\ reflecting the earlier date of Easter this year and continua- Ij tion of the freer spending in evidence since the middle of 1944. ,-.J. _ ."IAt.LGOlOoIOOITIU 1001----11-_ --+-_....lr"- :~--"--oiiii;';"--"- 0 - 1 - - - 1 - ---\---1 'eo Freight carloadiogs, which had declined at the end of January and the early part of February owing to severe weather condition5, have increased since that time. Shipments of miscellaneous freight were in larger volume in the five-week period ending March 17 than in the corresponding period of 60 '-1----~----·~--~-----+_---1ro 1939 1940 19 41 1942 1943 1944, while loadings of most other classes of freight were less. BANK CREDIT 1944 Bureau of Labor Statistics' indexes. Weekly ligures, latest shown arc for week ending March 17, 1945. Treasury expenditures during February and the first half of March continued to increase the total volume of deposits and currency held by the public. Adjusted demand deposits at weekly reporting banks in 101 cities increased 1.4 billion dollars and time deposits rose about 200 million dollars during . OOVERNMENT SECURITY HOLDINGS OF BANK~ IN LEADING OITIES ' 'I,\''H''''''' U~' the four -week period ended March 14. Currency in circulation increased) 50 million dollars over the same period, but declined somewhat in the week following. To meet the resulting increase in required reserves as well as the currency drain, Federal Reserve Bank holdings of United States Government 20r----4----~----4_----+---~1-~~1 I.r----+----+---~~--_t-F--+---~ securities increased 395 million dollars in the four weeks ended March 14, while reductions in nonmember and in Treasury deposi ts at the Reserve Banks supplied 410 millions of reserve funds to member banks. Excess reserves have remained at an average level of about a billion dollars. The increase in Federal Reserve holdings of Government securities roughly paralleled the decline in commercial bank holdings. Reporting banks reduced their portfolios by 260 million dollars in the four weeks. Holdings of Treasury notes declined by 1.7 billion dollars while certificate holdings increased by 1.4 billion dollars, reflecting the March 1 Treasury exchange offer. Bill holdings were 1939 1940 1941 1942 19 43 1944 Excludes guaranteed securities. Data not available prior to February 8, 1939; certilimtes first reported on April 15, 1942. Wesdnesday figures, latesl shown are for March 14, 1945. reduced by 210 million dollars. Bond holdings, however, continued to increase. Total loans for purchasing and carrying Government securities declined by 1 8 5 million. 2) 0 million dollars and comm.ercial loans by MONTHLY BUSINESS REVIEW CONDITION OF THE FEDERAL RESERVE BANK (ThouStlnds of dollars) March 15, March 15, 1045 1044 5557,800 Total cash reserves ..................... ....... .. . $5 15,654 2,422 346 Di,counts for member banks ...................... . 12 Indu,trial advances ........................•...... None 710,604 430,324 U. S. Government securities ...................... . 432,758 711,040 Total earning asset.............. . . . ........ . .... . 527,764 634,630 Member bank reserve deposito .................... . 426,240 555,047 Federal Reservo Notes in actual oirculation ......... . Fcbruary 15, 1045 $533,697 275 None 660,274 669,549 608,005 547,326 CONDITION STATISTICS OF WEEKLY REPORTING MEMBER BANKS IN LEADING CITIES (ThouStlnds of dollars) March 14, March 15, February 14, 1045 1944 1045 Total loans and investments ..... .. . . . . .... .. ...... $1,670,458 $1,408,020 SI,659,374 Total loans.. ................... ............... 412,451 337,808 404,517 Commorcial, industri"I, lind agriculturallo.ns . ... 274,200 226,846 271,896 Loans to brokers and dealers in 'ccurities..... . . . 4,387 5,276 3,302 Other loans for purcbasing or carrying securities.. 52,139 38,488 52,158 Rcal estat.loans....... . .. ...... ........ ..... 21,630 18,071 22,485 Loans to blinks...... .. .... .. .. .. .. . . . .. . .. .. . 120 100 130 All othcr loans.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 50,048 48,208 54,447 Tot.1 investments. . .. .......... ................ 1,267,007 1,065,131 1,254,857 U. S. Treasury bills.................... ....... 72,750 98,072 65,245 U. S. Treasury certificates of indebtedness...... . 388,320 267,042 316,141 U. S. Treasury uoles... .. .... . . .. .. .. . . . .. . .. . 221,241 100,404 273,046 U. S. Governmcnt bonds...................... 528,880 42 1,183 540,243 Obligations guaranteed by United States Gov't. . 0,081 40,435 14,201 Other securities.............................. 45,826 47,095 45,081 ne.erves witb Federal Reserve Bank....... .. .. .. . . . 360,443 208,078 337,268 Balances with domestic banks...................... 236,012 207,225 215,534 Dcmand deposits-adjusted"...................... 1,252,311 1,043,176 1,163,155 Time deposIts......... .............. ............. 226,464 170,705 220,588 210,013 208,068 255,162 United States Governmcnt deposits............ ..... Int<lrbank deposits................................ 51~J145 42~J700n5e 502,002 Borrowin~s from Federal Reserve Bank............. NOlie N None "Includes all demand deposits otber than interbank and United States Government, less cosh items reported os on hand or in process of collectioll. DEBITS TO INDIVIDUAL ACCOUNTS (Thousands of dolini'll) January Fcbruary Potg.chango February 1045 over yoar 1944 1045 20,088 -10 Abilene ................. S 17,213 $ 19,128 47,780 40,673 41,037 +3 Amarillo ............... . 102,109 -22 70,400 61,833 Austin ................. . 64,572 56,077 57,087 Beaumont .............. . t 57,878 43,450 48,617 +12 Corpus Cbristi ......... .. - 16 7,082 6,185 5,200 Corsicana .............. . 633,803 -6 546,209 510,804 Dall." ................. . 71,484 62,053 -4 50,383 E1 Paso .............. .. . 227,576 100,510 227,965 +20 Fort Worth ............. . -21 45,200 47,267 37,267 Galveston ............. .. 588,434 470,857 503,157 +5 Houston ................ . -12 12,301 11,001 10,622 Laredo ................. . 38,395 - 1 30,522 30,166 Lubbock ............... . 21,869 -8 18,503 17,106 Monroe, Ln ............. . 24,270 - 10 24,060 21,610 Port Arthur ............ . 0,630 -26 10,580 7,797 Roswell, N. M .......... . 18,160 12,706 13,000 +0 San Angelo ............. . 163,360 130,400 140,730 +1 San Antonio ............ . 06,455 -6 78,004 73,172 Shreveport~ Ln... . ... : .. 22,158 18,754 10,324 +3 Texarkana ............. . 33,000 27,811 83,420 +20 Tucson, Aril . . .......... . 25,402 20,729 21,420 +3 32,165 25,010 25,300 +1 32,425 25,385 26,550 +5 Wichita Falls ........... . + ~~~~::::::::::::::::::: ~~~~.:~~~ - 18 -12 -39 -12 - 16 -27 -19 - 17 +t -18 -14 -15 -21 -22 - 11 - 10 -23 -14 -24 -18 +1 -16 -21 -18 GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS (Average daily figures-ThouStlnds of dollars) Combined tolai Reserve eity banks Country banks February February October November December Janull\'Y February 'rime $231,843 274,586 324,328 333,158 338,689 345,591 354,586 Gross Gross demand Time Time demand $1,470,333 $134,674 51,210,270 $ 07,160 1,698,420 160,105 1,578,698 105.481 1,020,004 203,702 1,785,138 120,536 1,077,205 210,317 1,867,180 122.841 2,066,046 213,060 1,057,882 125,620 2,000,671 218,338 2,014,075 127,253 2,020,660 224,548 1,006,002 130,038 SAVINGS DEPOSITS February 28, 1045 Number of 3 3 3 58 depOSIts $ 6.430,568 52,071,707 16,164,352 24,507,487 16,346,474 52,633,502 555,087 4,410,147 32,5GO,760 10,754,642 6,162,020 4,056,100 30,603,717 105 428,339 $276,255,662 re~rting Beaumont ............... D.llas . ......... . .. .. · .. EI Poso ................. Fort Worth .............. Galveston . .............. Houston ................. Lubbock ....... ......... Port Arthur ............. San Antonio ............. Shreveport, La ........••. W.co .................. . Wichita Falls ............ All other ................ 'fotal. ........ anks 3 8 2 3 4 9 2 2 5 savin~s +' 6 :":'is - INDEXES OF DEPARTMENT STORE SALES AND STOCKS Daily average sales -(1035·1039 - 100) Unadjusted H Adjusted Dec. Feb. J ail. Feb. Jan. Dec. Feb. 1044 1945 1945 1044 1044 1045 1045 201 263 Distriot ..... 211 421 200 283 238 242 207 269 245 Dallos ...... 248 210 309 241 256 206 193 412 200 Houston ... .. 231 Feb. 1044 241 228 260 UnadJusted t • Jan. Dec. Feb. 1944 1045 1045 91 Distriot .. ... 08 05 "Unadjusted for seasonal variation. February 1045 Abileno . ........ . Amarillo ......... Austin .... .. ..... Bealllnont ........ Corr,us Christi .... Dal as .... ....... EI Paso .......... Fort Worth ....... Galveston ........ Houston .......... Lubbook ......... Port Arthur ...... San Antonio ...... Shreveport, Ia .... Waco ....... .. ... Wiohita Falls ..... Valuation No. 15 $ 15,220 82 111,088 107 192,027 127 82,475 130,041 180 203,000 665 45 20,506 228 387,732 51 66,004 267 1,119,644 137 177,906 17,318 58 783 422,304 220,101 101 100,333 51 28 10,937 ----- Total ...... 2,015 $3,387,606 "Over 1,000 per cent. Feb. 1044 97 Feb. 1045 102 Jan. 1045 100 Adjusted-. - -Dec. Feb. 1044 1044 104 101 BmLDING PERMITS Percentage ohange Percentage valuatioa from Jlln. 1 to Feb. 28, 1045 chan~e - valuatIOn Feb.10U Jan.1945 No. Vnluation 'rom 1044 25 $ 28,155 - 80 +100 + 18 263,776 - 26 157 +226 222 356,250 +065 +610 + 17 - 51 294 157,342 - 15 + 10 I 21 328 317,573 + 32 + 1,1l4 701,710 6 - 41 - 53 - 23 104 120,075 - 80 + 88 513 748,770 +102 + 64 + 7 102 110,106 - 46 - 36 24 527 1,742,147 80 + 88 +156 268 324,125 + 22 +451 +544 - 35 129 44,122 8 +173 1,654 838,283 + 10 + 28 + 2 1 303 442,518 +316 +334 146,522 -11 - 26 +104 106 2 - 56 55 35,537 - 38 " - t - - + 65 +10 ----5,901 $0,477,010 + 27 VALUE OF CONSTRUCTION CONTRACTS AWARDED (ThouStlnds of dollars) February February January January 1 to February 28 1046 1944 1045 1944 1045 S 33,071 S 25,613 Eleventh Distriot-total.. . S 17,855 $ 8,701 $ 15,216 2,100 6,139 Residential............ 1,158 1,073 051 30,062 10,474 All other . . . . . . . . . . . . . . 16,607 6,818 14,265 287,006 290,484 United States"-total.. . . . 146,957 137,246 140,940 38,836 65,858 10,300 24,861 19,586 Residential.. .. .. .. .. .. 240,070 230,626 All other. . . . . .. .. . . . . . 127,657 112,385 121,413 "37 states east of the Rocky Mountains. SOURCE: F. W. Dodge Corporation. Percenta~e cbange in savia~ eposits from Amount of Number of savings depositors 11,803 106,230 24,670 37,110 20,800 87,751 802 5,515 31,403 31,035 B.503 6,681 55,739 :..:.' t Stock.o-(1023·1026 ~ 100) Total-24 oities .. .... .... $2,001,507 52,015,272 - 1 $2,306,784 - 16 "Includes tbe figures of two banks in Texarkana, ArkanStl8, looated in the Ei~bth District. tCbange less than one· half of ono per cent. Gross domand 1948 . .... •.... $2,605,603 1944 ........ .. 3,277,127 1044 .......... 3,705,142 1944 . ......... 3,844,475 1944 .......... 4,024,828 1045 .......... 4,104,746 1045 .......... 4,010,752 WHOLESALE AND RETAIL TRADE STATISTICS ~-----:Percentage change i n : - - - - - ~----Net stiles Stocks t-~ Number February 1045 from Jan. 1 to February 1045 from Fcbruary January Fcb. 28, 1045 February January of Retail trade: firms 1944 1045 from 1044 1044 1045 Dop.rtment stores: Total 11th Dist ... . 40 +14 + 4 +10 - 4 + 7 Dallos .......... .. 7 +14 + 0 +10 - 6 - 1 Fort Worth ... . ... . 4 +16 +14 +17 - 3 + 2 Houston .......... . 7 +11 +11 +13 - 7 +W San Antonio ...... . 5 +22 - 3 +20 +10 +10 Shreveport, La . .. . 3 -13 +20 .... .. .. + 8 Othor cities .•...... 23 +11 - 6 +16 - 12 + 4 Retail furniture: -7 Total 11th Dist ... . 53 +16 +2 + i -5 Dallos ........... . 4 +7 Houston .......... . 7 +27 +2 +'0 -2 -0 Port Artbur ...... . 4 San Antonio ...... . -6 3 +31 +2 +10 Wichita Falls ..... . 3 +38 +11 Independent stores:" Oklahoma......... 364 + 8 - 8 +16 Texos............. 050 +11 ~ 1 +14 Wholesale trade:" Automotive supplies 4 - 4 -28 Grooeries.......... 27 - 2 -10 2 Hardware. . ....... 14 +10 - 2 +10 - t + 1 Tobacco'" produeto. 3 - U - 5 - 10 .... "Compiled by United States Bureau of Oensus (wholcsnle trade figllres preliminary). tBtooks at end of montb. tCbangc less than onc·half of one per cent. f2.0 20.6 16.0 25.7 S5 . 36.7 +23.8 13 2 . 20.7 Jan.31, 1045 + 2.1 + 2.8 + 3.3 + 3.0 + 1.2 2.4 .4 + 3.1 + 3.2 + 2.0 - 4.8 +1.1 + 2.4 +33.8 + 2.4 Feb .. 20, 1044 +27.0 +43.3 +43.8 +30.5 t t a t CRUDE OIL PRODUCTION-(Darrels) Inorease or decroase in daily February 1045 average produotion from Dailyavg. Total production Jan. 1045 produotion Feb. 1044 236,270 5,202 6,615,550 + 4,420 North Texas ................ . -12,768 13,043,300 465,832 +105,161 West Texas ................ .. 537,088 +12,509 + 30,388 Eost Tel." ..... .. ........ .. . 15,063,650 346,502 + 4,152 0,702,050 + 58,014 Soutb Telos ............... . . 561,082 + 8,482 44,648 Coastal Toxos ............... . 15,710,300 + Total Toxas ..... .. Now Mexico ...............•. North Louisiana ............. . 60,134,850 2,008,200 1,024,700 2,147,074 103,864 68,730 +238,010 0.Q78 8,300 Total Dbtriot.. . . . . 64,967,750 2,320,277 +221,451 SOURCE: Eetimated from American Petroleum Institute wecldy reporto. +16,705 682 237 + - +17,240