Full text of Review (Federal Reserve Bank of Dallas) : April 1, 1948

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MONTHLY
BUSINESS
REVIEW
of

the

Volume 33

FEDERAL

RESERVE
Dallas,

T~xas,

April 1, 1948

BANK

of

Dallas
Num be r .1

BANKING IN 1947-ELEVENTH FEDERAL RESERVE DISTRICT

The increase in principal assets, deposits, and capital funds of the member banks of the Eleventh
District during 1947 was a natural outcome of the expansion of economic activity which characterized the southwestern area. Unusually favorable agricultural harvests and rising or high prices
for the basic agricultural crops during the marketing seasons yielded farmers of the Southwest their
largest income in history. The petroleum industry, which together with agriculture is the source
of approximately 40 percent of the area's income, also enjoyed its best year in history, as demand
for the industry's products continually taxed productive capacities while prices rose sharply. The
building and construction industry in the area, confronted during most of the year by what appeared
to be an almost insatiable demand for construction of many major types, likewise increased substantially its contribution to the region's income. Responding to the income stimulus arising from expansion of activity in these basic industries of the area, as well as from a general increase in the output
of most manufactured goods lines, retail trade in the District showed a substantial dollar increase
during the year. In fact, virtually all business and economic indexes reached peak levels during 1947,
as the forces and pressures of inflation spread their influences into practically all segments of the
economic structure.
In view of the highly important and very close relationship between banking and business, which,

in fact, resolves itself into a state of virtual interdependence, it is not surprising that banking facts
and figures establish that 1947 was another year of substantial growth for the District's member
banking system. During the 12-month period total resources of the member banks increased by
approximately 10 percent, or $583,443,000, to reach a record level of $6,279,593,000. Although
country banks of the District reported a greater aggregate and percentage growth during the year
than the reserve city banks, each of these major groups participated substantially in the expansion.
Table 1 reveals the close comparability in rates of growth of most of the major items of the condition
statement, principal differences appearing only in holdings of Government securities and in capital
accounts.
Resuming the trend which was broken only in 1946 when the United States Treasury used its
large war loan account balances for the cash redemption of Government securities, total deposits of
the member banks of the District increased by approximately 10 percent to reach the record total
of $5,940,594,000, as the Distric t's country banks accounted for $301 ,3 87,000 of the increase and
the resave city ban ks, the remaining $253,2 04,000 , or increases of approximately 11 percen t and
9.5 percent, respectively. During the year the only class of deposits which did not show a significant
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

5G

MONTHLY BUSINESS REVIEW

increase was deposits of the United States Government, which declined by slightly more than 45
percent, as reserve city banks reported a decline of $29,588,000 in this category of deposits, or
approximately 61 percent, while country banks reported a decline of $12,323,000, or about 28 percent.
Another significant growth development during the year, especially from the standpoint of
banking stability, was the practice of member banks to expand capital funds, as favorable earnings and conservative dividend policies enabled banks to strengthen their undivided profits and
surplus accounts while new investments added to capital stock accountS. An increase of approximately $27,000,000 in capital funds of the District's member banks raised their total capital accounts
to $319,083,000. It is noteworthy, however, that, relatively speaking, the growth in capital accounts
of major groups of banks in the District did not keep pace with the growth in deposits, total resources,
or risk assets. In fact, the increase in capital accounts during 1947 was substantially smaller than
the $38,426,000 increase which occurred during 1946 and the $31,559,000 increase which occurred
during 1945. At a later poin~ in this article a further discussion of those relationships will be presented.
Principal asset items of
TABLE 1
the member banks of the
District, including cash
PRINCIPAL RESOURCES, DEPOSITS, AND CAPITAL
and balances with other
Member Banks- Eleventh Federal Reserve District
banks, loans and discounts,
December 31, 1947
and investments, showed
- -All Member BuuQ- - -Coulltry BBllks- -- 1Rcserve City Banks--Perccnt
Percent
Percent
. +or Alliount
+ or Amount
+orsubstantial increases during
Amount
1947
(000',)
10'7
(000',)
1947
(000',)
1947, as the expanding vol- Cash and balances . ... . . . . . $2,074,929 +12 .0 · $1,064,815 + 12 .2 $1,010,114 +11.9
990,461 . - 2 . 1
ume of deposits, favorable U. S. Government securities. 2,281,254 + 1.6 1,290,793 + 4 .7
597,875
+20.3
981,837
+19 .4
+ 19.7
Loans and discoun ts. . . . . . . 1,579,712
earnings, and additional ' Total resources . . . . . . . . . . . . 6,279,593 +10 .2 3, 162,557 +11.1 3,117,036 + 9.4
3,011, 560
+11.1 2,929,035
+ 9.5
capital provided banks Total deposits. . .. . . . . . . . .. 5,940,594 ++ 10.2
9.2
145,937
+11.0
173,146
+ 7 .9
Total capital acco un ts. . . . .
319,083
with new funds. The rate
of growth of these items
differed considerably, however, as member bank holdings of Government securities increased 1.6
percent, loans and discounts 19.7 percent, cash and balances 12 percent, and holdings of obligations
of states and political subdivisions 25 .2 percent, while other less important items changed in different
degrees during the year. THis uneven rate of increase in principal asset categories of the member
banks raises the question as 0 the effect of these changes upon the distribution of bank assets.
A proper utilization of banking funds to achieve a distribution of assets that will assure a
reasonable operating profit to the bank's stockholders while at the same time affording safety to
depositors and complying prith sound banking principles and policies is, of course, an essential of
a sound banking system. Various factors are involved in the determination of the proportion of
funds to be placed in different types of assets. In addition, particular circumstances affecting individual banks may play an important part in influencing the utilization of funds. For this reason
there may be deviations from gruup averages, although as a general rule such differences should be comparatively minor. It is not the purpose of this article to attempt to establish or defend an optimum
relationship but merely to picture the changes which occurred during the year and to indicate their
effects upon the banking structure of the District. Several facts, however, seem apparent from the
data in Table 2 dealing with this subject.
Although a substantial growth in assets occurreq during the year and despite the fact that
various important categories of assets increased in diffetent degrees, the relative importance of these
items in terms of total assets showed no very significant change. The pattern of distribution of assets
of the member banks of the District and, in fact, of the country banks and the reserve city banks
remained quite similar to what it had been at the start of the year, indicating for the most part
a rather balanced growth of assets. It is true that, although holdings of Government securities increased slightly, their relative importance in terms of total assets declined somewhat as loans and
discounts, cash and balances, and other assets increased more substantially. That trend, however,
hardly can be said to have progressed during the year to the point where it raised significant problems
with respect to the utilization of banking funds. It is possible that the existing distribution of assets

MONTHLY BUSINESS REVIEW

67

may not be the most desirable one from different points of view. For instance, from the standpoint
of profits, some bankers may contend that loans and discounts or obligations of states and political
subdivisions rniZht represent a larger proportion of total assets, in view of their greater earning potential. On the other hand, ·it might be argued equally well that, in view of the excessive money supply
and the accompanying inflationary pressures in the economic system, it would have been better if
the increase in loans and discounts had been more restrictive. Nevertheless, it does appear that, considered collecti~ely, all member banks, country banks, and reserve city banks of the District continued
to report an asset distribution reflecting a condition of soundness with respect to this particular factor.
One of the most important and
TABLE 2
perhaps frequently discussed subPERCENTAGE DISTRIBUTION OF PRINCIPAL ASSETS
jects of bank operation is that of
Member Banks- Eleventh Federal Reserve District
loan policy. This has been especially
.--All Member Dan b - - Country Banks --Reserve City Banks--.
true during the past several months,
1046
1947
1946
1947
1946
1947
31.6
32 .5
when such groups as the American Cash and balances .. .. . .... . 32 .5 33 . 1 33.4 33.7
Loans a nd discounts .. ...... 23.2
25.2
17 .5
18 .9
28. 8
31.6
Bank.ers Association and the bank U. S. Government securities . 39. 4 36 . 5 43 .4 40 .9
35. 8
31.9
4 .5
5.2
5 .9
2.7
3. 0
supervisory authorities have urged Other stccksand bonds..... 4 .0
Other assets...... .... .. ...
0 .9
0.7
0 .5
0.6
1.1
1.0
banks to adopt an attitude of cau100.0 100.0
Total assets. . . . . .. 100 .0
100 .0 100 .0
100 .0
tion and to observe reasonably conservative lending policies in order to
avol~ a.dding fuel in the form of new bank credit to the inflationary flames. During the last year bank
credIt ill the form of loans and discounts of the member banks of the District expanded by $260,690,000, or 19.7 percent, to raise 't he loan aggregate, as shown in Table 1, to $1,579,712,000. Moreover, although the composition of the loan increase differed considerably as between country banks
and reserve city banks, the rate of expansion of total loans was approximately the same. Country
banks reported a loan expansion during the year of 20.3 percent, while reserve city banks showed
only a slightly smaller increase-approximately 19.4 percent,
Following a decline of almost 10 percent in 1942, loans and discounts of the member banks of
the D~strict rose at a very substantial rate. The years of maximum increases were 1945 and 1947,
when illcreases of $322,958,000 and $260,690,000, respectively, were reported, although, percentagewise, the increase in 1944-22.5 percent-exceeded the 19.7 percent increase of the last year. Table 3
shows the annual increase or decrease in loans and discounts of the member banks of the District.
More detailed analysis of the character or composition of the
increase in total loans of all member banks shows that the rate of
ANNUAL INCREASE OR DECREASE increase was greatest in commercial and industrial loans-30.3
OF LOANS AND DISCOUNTS
percent, closely followed by increases of 29.3 percent in loans of
Member Banks
a consumer credit type and 24.1 percent in real-estate loans. The
Eleventh Federal Reserve District
d ff
h
i erences in t e general nature of loan demand upon country banks
Year
Amount (000'8)
Percent
$ 83,280 (+)
+16. 9
and reserve city banks are shown by the significant variation in ex1940 .... . . .
1941. ..... .
83,576 ( +)
+14 . 3
pansion
of different types of loans by these two groups of banks.
1942 .. .... .
1943 ...... .
~~:g~~ ~+l
Whereas reserve city banks reported an increase of $173,284,000,
1944 .. .... .
~g:~~ ~+l
+~U or 34 percent, in commercial and industrial loans, the expansion of
1945 ...... .
1946 .... . ..
180,217 (+)
+ 17 .8
this type of credit by the country banks of the District amounted
1947 ...... .
260,690 (+)
+ 19 . 7
only to $38,910,000, or 20.6 percent. On the other hand, while
the country banks were expanding agricultural loans to farmers by
almost 11 percent, or $12,095,000 , a decrease of approximately 34 percent in such loans was reported
by reserve city banks. These developments, of course, should be expected because of the nature of
the business and economic operations of the customers of the two groups of banks.
TABLE 3

+IU

It is noteworthy that consumer credit type loans expanded to a much greater extent, both in
terms of dollars and percentage, on the ledgers of the country banks than on those of the reserve
city banks. At the end of 1946 these types of loans, including retail automobile instalment paper,
other retail instalment paper, repair and modernization instalment loans, instalment cash loans, and
single payment loans to individuals, reported by the reserve city banks exceeded such loans of

58

MONTHLY BUSINESS REVIEW

country banks by $28,607,000. As a result of developments during 1947, when country banks
expanded their volume of such loans by $42,376,000, or 58.4 percent, while reserve city banks
reported a net increase of $8,392,000, or 8.3 percent, the relative position of the two groups of banks
was reversed. On December 31, 1947, country banks of the District reported consumer type loans
totaling $114,890,000 as compared with $109,512,000 for reserve city banks. Further reflecting the
unusually rapid expansion of such loans by country banks is the fact that consumer credit extensions
represented about 19.3 percent of their total loan portfolio at the end of 1947, in contrast with 14.6
percent a year earlier; on the other hand, consumer type credits of reserve city banks declined from
12.3 percent to 11.2 percent of total loans.
Perhaps indicative of the breadth and widespread nature of the demand for real-estate loans
during the past year, this type of credit extension increased at approximately the same rate at both
country and reserve city banks. The former group of banks reported total real-estate loans of
$98,447,000, representing 16.4 percent of their total loan portfolio, while reserve city banks reported
a total of $70,432,000, or 7.3 percent of total loans. These figures represent increases of 23.5 percent
and 25 percent, respectively, for the two groups of banks during 1947.
The relationship of total loans and
discounts to total resources of the
District's member banks has been
discussed at an earlier point in this
article and is presented in tabular
form in Table 1. Other loan relationships equally significant, or possibly
more so, include the ratio of total
loans to deposits and the relationship
between capital funds and total
loans. Several variations of these re-.
lationships are shown in Table 4.

TABLE 4
LOAN RATIOS
Member Banks- Eleventh Federal Reserve District
--All Member Banks-- Country Ba.nks _-Reserve City BanksIM6
1947
1946
1947
1946
1947

Total loans
Total deposita
Total loans
Total assets
Total capital funds
Total loans
Surplus, undivided profits,
reserves

Total loans
Undivided prufits and reserves
Total loans

24 .5

26 .5

18.4

19 .8

30 .6

33 .6

23.2

25 .2

17 .5

18 .9

28 .8

31.6

22.2

20 .2

26.6

24.4

19 .6

17.6

13. 6

12.6

lG .4

15 .6

11 .8

10 .7

4 .65

4.62

6.25

6.05'

3. 66

3. 75

Inasmuch as loans represent, to a
very considerable extent, funds
which depositors have placed with their banks, it is not uncommon to relate these two items to
determine the trend of loans in relation to deposited funds and the proportion of depositors' funds
being placed into this type of risk asset. That relationship, however, does not reveal information
regarding the margin of safety or the protection of depositors against the element of risk which
is inherent in more or less degree in all loans. If it may be assumed that the capital funds represent,
in a sense, a buffer of protection to depositors, then it seems desirable to consider the volume of a
bank's loans in relation to all or part of its capital funds. Perhaps a first line of defense against loss
to depositors from uncollectable loans is the total of undivided profits and reserves. A broader concept
of this relationship would include the surplus accounts, and, finally, total capital funds might be
used as a basis of comparison to obtain complete capital coverage.
The figures in Table 4 provide several sets of measurements, each of which reveals the extent
to which loans have expanded more substantially than or are "out of balance" with other significantly
related asset, liability, and capital accounts. Inasmuch as grouped figures and averages probably supply
only general standards around which it might be reasoned most banks' figures would cluster, the
data in this table are presented only as general guides which may serve as a useful warning signal for
those institutions whose figures deviate too far from the "norm." In fact, presentation of these figures
carries with it no implication that they represent most desirable relationships-they represent merely
averages which existed among certain large groups of member banks on December 31,1947.
The v olume of United States Government securities held by member banks in this District
increased greatly between 1939 and 1945, when the total reached a record level of $2,702,604,000.

MONTHLY BUSINESS REVIEW

59

During 1946, primarily as a result of the debt retirement program of the Treasury, member bank
holdings of United States Government securities decLned to $2,246,267,000. In 1947, only a very small
increase occurred in the holdings of this class of asset, with the consequence that the total amount
remained approximately $421~,350,000 below the peak level reached at the end of 1945. Rather
noteworthy changes, however, were made in the composition of the Government securities portfolio
by member banks in this District during 1947. Moreover, the country banks of the District held a
substantially larger proportion of their Government securities portfolio in short-term or comparatively short-term issues than did the reserve city banks. The most significant decreases reported in
types of Government securities held were in certificates of indebtedness and Government bonds
maturing within 5 to 10 years. The decline in holdings of the former probably resulted from Treasury
retirement of a substantial part of a number of certificate maturities and "runoffs" of maturing
issues; with regard to the latter type of issues, detailed figures are not available to indicate the extent
to which the change in relative importance in terms of the total portfolio was due to sales or to
shortening of maturities with the passage of time, although it is probable that sales of these issues
maturing in 5 to 10 years were not unimportant.
Holdings of Treasury bills increased substantially in the portfolios of country banks while
declining slightly at the reserve city banks. In this connection it is interesting to note that holdings
of the three shortest term issues-bills, certificates, and notes-represented a much larger proportion
of total holdings in the case of the country banks than was true of their larger city counterparts;
in addition, the total amount of such short-term holdings of the country banks, amounting to
$581,117,000, exceeded the comparable holdings of the reserve city banks by $330,461,000. The
increase in the holdings of Treasury bills by country banks in this District occurred during the last
six months of 1947. During that period country banks experienced a substantial increase in available
funds and, attracted by the higher rates on bills which prevailed during the last half of the year;
invested at least part of these funds in this type of security. In general, there is a tendency to consider
Treasury bills and, perhaps to a lesser extent, certificates of indebtedness somewhat in the nature
of money market instruments and to associate their purchase more frequently with what might be
termed money market banks. That impression, however, is not correct when applied to banking prac·
tices in the Eleventh Federal Reserve District, for at the end of December 1947 country banks of
the District held $90,586,000 of Treasury bills and $319,232,000 of certificates of indebtedness as
compared with $6,666,000 and $135,390,000, respectively, for reserve city banks.
TABLE 5
Table 5, showing the percentage
distribution of Government securiCOMPOSITION OF U. S. GOVERNMENT SECURITIES PORTFOLIO
Member Banks- Eleventh Federal Reserve District
ties in terms of total holdings, indi..---All Member Bank&--- Country Banks --Reserve City Bankscates a trend during 1947 toward
1946
H14?
1946
1947
1946
1947
2 .2
4.3
3.4
7. 0
0 .8
0. 7
somewhat shorter maturities, as the Treasury bills ... .
27 .2
19.8
32.2
24 .7
20.9
13.7
certificates ...
percentage of securities maturing Treasury
13.0
12.6
14.5
13. 3
11. 1
11.0
Treasury notes . ....
18. 9
28 .4
18. 1
27.3
20. 0
30. 0
within five years increased from 68.2 Bonds- within 5 years .. .
31. 7
25.5
25.8
19 .9
39 .0
33. 0
Bonds-5 to 10 years ... .
4. 8
3.0
4. 0
4.2
5.8
percent to 72.3 percent at country Bonds-IO to 20 years ..... . 3.5
2.6
3. 2
1.7
1.8
3.G
5.1
Bonds- over 20 years . ... .
banks and from 52.8 percent to 55.4 Other
0 .9
1.4
1 .3
2. 0
0.4
0. 7
U. S. Govt . securi ties ..
percent at reserve -city banks. Like100. 0 100.0 100 .0 100 .0 100 .0
T otal. . ...... . .... 100 .0
wise, these figures emphasize the
shorter or more liquid position of the
country banks as far as holdings of Governments are concerned. The same tendency toward greater
liquidity on the part of country banks is further emphasized by the proportionately larger volume
of cash and balances and the substantially smaller loan volume of the country banks as compared
with the reserve city banks.

In view of their important place in the banking system of this area and , also, because of the
rather significant growth differences reflected by figures for the year 1947, changes in condition of

60

MONTHLY BUSINESS REVIEW

the member banks in the four larger metropolitan counties of the District deserve consideration.
Some impression of the importance of these banks in the southwestern .economy is evidenced by the
fact that their resources at the end of 1947, totaling $2,915 ,374,000, accounted for 46.5 percent
of the member banking resources of the District, their deposits represented 46 percent of the District's
total, and their capital funds 51 percent. The increase in principal assets, deposits, and capital funds
of these banks during 1947 is shown in Table 6.
. Member banks in Harris County experienced the largest rate of growth and reported the largest
dollar increases during 1947 in such important banking items as cash and balances, loans and discounts,
total resources, and total deposits. In addition, although total capital funds of the member banks
in Tarrant County increased by approximately 11.2 percent, in contrast with an increase of 9.8
percent in Harris County, the dollar increase in capital funds of the banks in the latter county
exceeded that of the banks in any of the other counties under consideration.
TABLEI 6
PRINCIPAL RESOURCES, DEPOSITS, AND CAPITAL
M ember Banks-Eleventh Federal Reserve District
December 31, 1947
- -Bexar CountyP-.-, ce-ntAmount
(000 ',)

Cash and balances . . ... ... . .
U. S. Government securities .
Loans and discounts . ...
Total resources ... .
Tow l deposits ....... . .. . ... ... ..
Total capital acco unts . . . . .

$110,01 9
199,829
60,422
390,960
373,344
16,338

+ or 1947

+
+
+
+
+

6.4
5.8
23 .3
2.6
2 .4
8 .5

- -Da1las CountYp-er- ceDt- - -Harris CountYp-.-rc.-ntAmount

(000',)

$ 343,990

209,025
452,952
1,038,747
964,264
68,517

+ or -

Am.ount

1947

(000',)

+13.9
+ 3.8
+14 .6
+11 .5
+11. 9
+ 6.4

$ 364,960

400,300
279,916
1,104.,210
1,039, 100
58,756

+ or -

- - Tarrant Count~;;;Amount

1947

(000', )

+18 0
+ 0.1
+ 30 .4
+13 .4
+135
+ 9.8

$128,734
109,982
122,801
381,457
361 ,954
18,899

+ or 1947

+ 2 .2
- 12.9
+ 13 . 1
+ 2 .2
+ 1. 8
+11.2

Ver y noticeable differences appear in the percentage distribution of assets of the member banks
in these four counties. Reference t o Table 7 and to Table 1 shows that the member banks of Harris
County conform very closely in the percentage distribution of their assets to the distribution of
assets reported by all member banks in the District, whereas member banks in the other three metropolitan counties deviate substantially in this respect. The member banks of Dallas County reported
a much larger proportion of their total assets in the form of loans and discounts than did any of the
other groups of banks considered in this article. On the other hand, the loan volume of the Bexar
County banks, amounting only to 15.5 percent of total assets, was unusually small. Of course, as
should be expected under such circumstances, the member banks in Bex ar County held a very large
proportion of their funds in Government securities, while Dallas County banks reported the smallest
percentage of funds in this type of investment.
In view of the difference in the rate of expansion
TABLE 7
and in the magnitude of the increase of total loans
PERCENTAGE DISTRIBUT ION OF PR INCIPAL ASSETS
in the four counties, it is desirable to inquire more
:Member Banks- Eleventh Fed e ral Reserve District
specifically into the details of the loan expansion
December 31, 1947
of these member banks and, also, to consider briefly
some of the more important loan relationships. As
Bexar
Dallas
Harris
Tarrant
County
County
County
County
noted above, figures of aggregate loans at the end Cash and balances .
28.1
33. 1
33 . 1
33 .8
43 . 6
and discounts ...
15 . 5
25 .3
32 .2
of 1947 reveal that the largest loan increase oc- Loans
U. S. Govern ment securities 51 . 1
20.1
36. 2
28 .8
3 . (i
1.9
4.5
curred in Harris County. Loans of the member Other stocks and bonds . . . . 4 .2
Other assets. .
1.I
1. 3
1. 8
0 .7
bank~ of this county increased by $65,332,000, as
Total assets. . . . .. 100.0
100. 0
100 . 0
100 .0
compared with an increase of $57,856,000 by the
Dallas County member banks, or increases of 30.4
percent and 14.6 percen t , respec tively. More significant, however, t han t he aggrega te loan figures
is the r elationship between loans and other banking items. T able 8 is presented to show the comparative position of the member banks in the four counties.

61

MONTHLY BUSINESS REVIEW

TABLE 8
LOAN RATIOS
Member Banks-Eleventh F ederal Reserve District
December 31, 1947

Jotalloans
Total deposit,
/ Total loans
Total assets
Total capital funds
Totallo)lJlS
Surplus, undi vided profits,
reserves
Total IOMs
Undivided profits and reserveS"
Total loans

Be'"
County

Dallas
County

Harris
County

Tarrant

Couuty

16.2

47.0

26.9

33.9

15.5

43.6

25 . 3

32 . 2

27.0

15.1

21. 0

15. 4

17. 5

9.3

11 . 9

9.2

7. 1

3.5

3.4

3.3

It is to be expected that loan demand should
vary in different localities as a result of differences
in loan requirements arising out of the character
of the areas' economies. Moreover, it is often the
case that certain financial centers reach out into a
wider area in their financial dealings than do others.
A miscellany of individual differences might be
called upon to explain why banks of one locality
show different condition statements and reflect
different sets of financial relationships. In fact,
different banks tend to serve different groups of
customers, whose requirements vary. Consequently,
. as was stated earlier in this article, figures such as
those presented in Table 8 are useful principally as
general guides to what might be considered more
or less average conditions or situations.

Substantial differences also are reflected in the loan figures of the member banks of these four
areas with regard to the rate of expansion and the relative importance of different major categories
of loans. For example, although real-estate loans of member banks increased 7.9 percent and 6.2
percent, respectively, in Dallas and Bexar Counties during 1947 and increased only by an insignificant f r actional amount in Tarrant County, this type of loan showed an increase of about 47.5 percent
according to the reports of Harris County member banks. Also, while consumer type loans of the
member banks of Dallas and Harris Counties showed a net decline of 17.4 percent and 4.6 percent,
respectively, this general category of loans expanded at a very substantial rate in the Tarrant and
Bexar Counties areas. Likewise, commercial and industrial loans increased during 1947 by approximately 30 percent in Dallas and Tarrant Counties, by over 38 percent in Harris County, but by
less than 20 percent in Bexar County.
Further illustrating the varying character of the demand for loans from banks in different areas,
Table 9 shows the relative importance of major categories of loans in the loan portfolios of the four
groups of banks. While all of the groups of banks
TABLE 9
find their largest demand for loans from commercial and industrial borrowers, other types of bor- PRINCIPAL CATEGORIES OF LOANS AS PERCENTAGE
rowers do represent important sources of loan de·
OF TOTAL LOANS
mand to some of the groups of banks. Banks in
Member Banks-Eleventh Federal Reserve District
Bexar and Tarrant Counties report that 28 percent
December 31, 1947
and 22 percent, respectively, 9f the outstanding
Bexar
Dallas
lIa.rris
Ttl,rran~
County
h
County
County
Coullty
loans at the end of 1947 were of t e consumer Y Commercial and industrial.. 57 .4
7.2 .4
68.7
63.8
0. 1
2.7
credit type, while banks in Dallas and Harris Coun- Agricultural. . . . . . . . . . . . . . 1. 3
0.7
10.7
22. 0
ties report relatively substantial loans tp financial v ~~i-~t!~~: ::: : : :::::: : ::
9.4
5.3
11.1
6 .2
borrowers. In view of the metropolitan predomi- Other .................... 9. 3
13.3
nance in these collnties, it is not surprising that
Total .. . .. ... .... 100.0 100 .0 100.0 100.0
agricultural loans are quite insignificant, while only
in Harris County do real-estate loans appear to approach a relatively important level in terms of
total loan volume.

2t 8 U

As a concluding remark, it should be emphasized again that it is not the purpose of this article
to pass judgment or to attempt to establish the m ost desirable relationships between the many banking
items. The purpose of this article is to p resent only a summary picture of some of the more important
banking developments during the last year and to provide certain sets of averages and group totals
which may be useful to bankers in making internal an alyses of their own organizations in the light
of all of the particular circumstances which they know have affected the operations of their banks.

62

MONTHLY BUSINESS REVIEW

Review of Business, Industrial, Agricultural, and Financial Conditions
DlSTRICl' SUMMARY
The extremely low temperatures prevailing during the cold
wave in the second week of March damaged vegetable crops,
fruit buds, and to some extent grain crops. There were also
shrinkages in livestock weights and sizable losses of newborn
calves, Jambs, and kids. The cold wave and the effects of adverse
weather earlier in the year have delayed the preparation of soil
and the planting of some crops beyond the optimum period. The
winter rains and snows, however, have greatly improved moisture conditions and the outlook for winter wheat in most areas
of the District.
Adverse weather conditions have also tended to hold down
consumer buying. Department store sales declined 5 percent
from January to February and were only 6 percent larger than
in February 1947. Furniture sales, likewise, declined in February
and were smaller than a year earlier.
Nonagricultural employment declined seasonally during January and February but is expected to show an upward trend during March and April.
The value of construction contracts awarded in the District
during February reached a new peacetime peak of $77,200,000,
which was about $15,000,000 above the average during the preceding four months when awards were at a very high level. The
large February total reflected the letting of contract. late in the
month for some very large projects. Production of crude petroleum and refining operations continued at peak levels in February and were at rates substantially higher than a year ago.

accounts to accounts receivable outstanding at the first of t he
month dropped slightly during February to 51 percent as compared with 53 percent in January. Collections on instalment
accounts outstanding declined from 27 percent during December to 22 percent during January and to 19 percent during February.
WHOLESALE AND RETAIL TUADE STATISTICS

Pcr"''''~n..~g~.:.:eh~a~n~ge~i~n=::s.:;~~=
Nurn bet :====N.~
Net salcsStocks 1
of
Fcbruury 1948 from
Jan. 1 to
February 1948 from
reporting
february
JanUllry
Feu.
29.1948
February
January
Retail trade:
firms
1947
1948
from 1947
1947
1948
DepartmeD\ stores:
48
6
- 5
6
U
7
Total 11th DiBt... . . .
4
- 5
- 5
- 5
4
13
Corpus Chriati . .. . .
IJallao ......... . . .
;
41
1
11
8
,
5
16
- 1
:For~ Worth ... .. . . .
7
17
- 5
17
43
6
Houston ........ .
5
5
-18
11
17
11
San Antonio . . .. .. .
3
17
I
12
Sbreveport. La .. . .
49
10
18
- 1
- 7
1
Otber cities ....... .
Re\ail furniture:
3
-6
-7
Totaillth Dim. . . . .
40
- 12
-11
Dallao. ...........
3
-I
-14
- 5
Houston . .... . . . ...
5
- 13
22
Port Arthur. . . . . . .
3
5
4
San Antonio.
4

I

WholeeaJe trade:*

Machinery, eqp't &:
2
ISUppliea.........
3
65
-'S
- 28
.o\uUHnotive supplies
3
- \
.i
-'6
- 1
- 2
- 6
DruglI.. .... .. .. .. .
4
-I
- 1
20
3
- 8
Groceries.. ...
21
2
- 17
23
-I
Hardware.........
8
- 6
-7
I
- 1
- 7
I
Tobacco &: product!.
9
·Compiled by United SLatea Bureau of Census. (Wholesale trade figure8 preliminary.)
tSt.ocks at end of month.
tlndicatea change less than one-half of one percent..

INDEXES OF DEPARTMENT STORE SALES AND STOCKS
Daily Ilverage I8lcs-( t935-1939=IOO)

BUSINESS
District. ... .

Feb.
1948
324
320
359

Unadjusted •
Jan.
Dee.
19<8
316
295
348

1947
633
579
726

Feb.
1947
300,
308,
300

Feb.
1948
3<18
364
408

AdjUBWd
Jan.
Dec.

1948
390
359
447

1947
388
36<1
457

Feb.
1947
348,
350,
348

The unuSllally severe winter weather which extended from
mid-January to mid-February had an adverse effect upon the
dollar volume of sales at reporting department stores in the District during the first two months of the year. With the return
of more moderate temperatures and better shopping conditions
during the last half of February, however, sales rose sharply and
in the final week of the month were 14 percent larger than in
the corresponding week last year. Nevertheless, sales for the
month were 5 percent less than in January and were only 6 percent higher than in February 1947, as compared with a year-toyear gain of 7 percent in January. Reflecting a counterseasonal
decline from January to February, the seasonally adjusted index
of department store sales during February was 368 percent of
the 1935-39 average as compared with 390 percent in January
and 348 percent a year ago. The return of exceptionally low temperatures during the second week of March again curtailed buying, with the result that sales of spring merchandise through
mid-March were below expectations. It is anticipated, however,
that sales will increase sharply during the two weeks preceding
Easter if weather conditions are generally favorable.

Merchandise inventories at reporting department stores on
February 28 were 7 percent greater than at the end of January
and 24 percent larger than the corresponding 1947 period. The
seasonally adjusted index of department store stocks stood at
422 percent of the 1935-39 average at the end of February as
compared with 343 percent on February 28, 1947. The rise in
inventories, the slowing down in sales, and the uncertainties
regarding the outlook for business and industry generally have
apparently generated a marc cautious policy in making forwa rd
commitments. Total orders outstanding at the end of February
showed a decline of 13 percent from those a month earlier and
were 7 percent below those a year ago.

The ratio of cash sales to total sales continued to drop in February when credit sales accounted for 65 percent of the total
as compared with 63 percent in the previous month and 61 percent in February 1947. This rise in the use of credit probably
reflects the pressure of rising prices on goods usually purchased
with cash, the increasing availability of merchandise, especially
duroble goods, and the easing of credit terms. Coincident with
the increase in the use of credit, collections have shown a tendency to slow down. The ratio of collections on regular charge

Furniture stores reporting in the District showed a further
decline in February sales of 7 percent from January and a decrease of 6 percent from Fcbruary 1947. An increasing flow of
furniture of better quality and consumer preference for this type
of merchandise ha ve exerted added pressure on retailers to dispose
of inferior quality goods. As a result of these factors and evidences of a slowing down in consumer buying and of consumer
resistJllce to rising prices, promotional sales and reduced prices on
certain classes of merchandise have become more widespread.

Dalla •......

Houawn .....

Slo<kJ- (193i1-1939-100)
}!~eb.

Unadjusted·
Jan.
Dec.
1047
1948
346
333

1948
375
Dilltriet .. , ..
·Unadjusted for 8easonal variation.

Adj",kd

Feb.
1947
306

Feb.
1948
422

Jan.

Dee,

1947
1948
397
385
r- Revised.

Feb .
1947
343

63

MONTHLY BUSINESS REVIEW
The pressure of rising prices and the easing of credit terms have
been factors contributing to the increasing percentage of credit
transactions at furniture stores. Credit sales edged up slightly in
February constituting 85 percent of the total sales as compared
with 81 percent in the previous month and 81 percent in February 1947. Inventories, as reported by a somewhat smaller sample
of furniture stores, increased 5 percent in February and at the
end of the month were 3 percent larger than on the same date
of the previous year.
AGRICULTURE

Extremely low temperatures over the District during the first
part of February and in early March delayed field work, damaged
or checked the progress of growing crops, and retarded the
development of range feeds. Moisture supplies have been adequate to excessive in all areas except in parts of the Edwards
Plateau, Trans-Pecos area, and South High Plains of Texas. Livestock have suffered from the cold weather, and losses of newborn lambs, kids, and calves have been heavy, although losses of
mature animals were generally lighter than expected. Snow
cover provided protection for the wheat crop in northwest Texas
through most of the periods of freezing weather in February
and March, and it appears that damage may not have been
severe. However, the crop has not made sufficient growth to
prevent blowing of the soil loosened by the freezes. The winter
oat crop was badly damaged by the severe March freeze in central and northcentral Texas, but loss of acreage is expected to
be small in north Texas. The cotton crop in the Lower Rio
Grande Valley suffered weather damage in March, and some replanting became necessary. Marketing of vegetables and citrus
has been retarded by unfavorable weather, and many spring
vegetable crops arc late. At mid -March, there was urgent need
for a period of warm weather to permit field work, hasten
growth of pastures, and stimulate growth of small grains.
Following the prolonged period of cold weather in late January and in early February, the progress of the commercial vegetable crops was generally satisfactory until the second week in
March when the cold wave did heavy damage to early snap
beans, cantaloupes, cucumbers, and watermelons. Much of the
acreage of these crops had to be replanted. The low temperatures
in March resulted in complete loss of the tomato plants in cold
frames in east Texas and serious damage to the tomato crop in
south Texas. The north Texas onion crop was damaged, but the
acreage set out was very small compared with the usual for this
period.
On the basis of conditions existing March I, the United States
Department of Agriculture estimated the Texas winter beet
crop at 1,140,000 bushels, or 17 percent greater than the 1947
crop and 9 percent above the 1937-46 average. The planted early
potato acreage in Texas this year, estimated at 13,800 acres, is
44 percent above the 9,600 acres harvested in 1947 and is the
largest planted acreage since 1930. The production of winter
carrots is estimated at 3,293,000 bushels, which is 11 percent
above the previous crop and 39 percent above average.

weeds in all areas except parts of the Edwards Plateau, TransPecos, and South Plains areas of Texas. Supplemental feeding
continued heavy during the cold weather of early February,
tapering off in the latter part of the month as limited supplies
of new range feeds became available. Heavier feeding was made
necessary in early March, however, by th cold wave which temporarily reduced range and pasture feed supplies. Wheat pastures
have supplied only a limited amount of feed, and many oat fields
in central and southern Texas at times have been too wet to
graze. On March 1, the condition of ranges in Texas was
reported to be slightly better than a month earlier but 8 percent
below average for this time of the year.
CASH FARM INCOME
(ThOUBaDds of dollars)

_~::f!~7~:::-Dec-.--~'~1 receila~
-

t to Dec. 31
CroPS Livesioek'
1947
1946
1947
1946
$ 21.037 $ 5,1G7 $ 26,234 1 21,802 1 182,574 1 169,551
24.385
l1,W
36,038
25,393
309,133
250,838
11.420
6.'76
17,896
10,382
181.939 1411.418
New Mexico ..
37,823
27,600
65,423
49,413
69.\,005
484.794
Oklahoma .. . ........... .
70,048
197,596
128,452 I,G74,575 1,387.804
Texas .. . . ... ... . .... . .. . 127,648

~~=~

. . : ::: : :::::

Total . . . . .. ... 1222,213 $120,974 1343,187 1235,502 13,343,226 12,439,205
·l[lcludes reseipts from the sale ot liveatock a.nd liveetock products.
SOURCE: United Statea ~partment of Agriculture.

Cattle and sheep came through the winter in only fair flesh,
despite large-scale supplemental feeding. The six weeks of cold,
stormy weather in January and early February caused heavy
shrinkage in cattle, after which they showed some recovery until
cold weather and feed shortages the first part of March caused
further shrinkage. Mature animals withstood the cold weather
better than was expected, but many calves were lost. Cattle in
Texas on March 1 were reported to be in slightly better condition
than a month earlier but about 2 percent below average. Sheep
have been affected adversely by cold weather and shortages of
range feeds, particularly on the Edwards Plateau and TransPecos areas of Texas. Although there have been many lambs lost,
these losses were not as heavy as expected, considering the inclement weather and condition of ewes. The condition of sheep in
Texas on March 1 was 3 percent below that of a month earlier
and 9 percent below the average for this time of the year.
CASH FARM INCOME
(TboUAlld. 0/ dollan)

--January 1~8====T~otal receipt.-

--Reeeipta from
Crops
Livestoclt'

Araona • . .. ... . . . . . . ... . ...... . .....

Louisiana . .• ••• .. . •. •••• ~ .•• ••• • . • •• .
New Mexico .•••. .• .•. •.•• •. •. •. •. •..

Oklahoma • . . . . • . .. .•. • ••. • .• •• . • . • ••

TeD! . ... . . .... . .. ....... . . ... . . . . . .

1 11.907
17.8211
7.262
27.870
110.278

1 6.273
9,016
4,06li
!w.M9
64.986

January - - 1948
1941
1 18.180
1 14.832
26.845
23.206
11 ,327
8.923
52.51 9
U.013
161S.264
101.6112

Total. . . . . . .. . . . . . . .. . . .. . 1175.146
I 98.989
1274.135
·rnruudes receipts from the sale of liTeltoek a.nd Ih..estock produeta.
SOURCE: United States Departmen' of Agriculture.

1189.665

The Texas citrus crop escaped damage f rom the frosts and
freezes, but harvest of citrus continues to lag, largely because
of the unfavorable demand and price factors. Shipments to rnidMarch were about 30 percent behind those to the same date last
season. The March freeze damaged other fruits in most sections
of the District, although in some areas, particularly north Texas,
fruits may have escaped serious damage.

The 1947 production of shorn wool in Texas was estimated
at 61,946,000 pounds, or about 9,317,000 pounds less than the
1946 clip. Cash income from sale of wool in the State totaled
$26,637,000 in 1947, compared with $30,643,000 in 1946.
Shorn wool production declined appreciably also in Arizona,
Louisiana, New Mexico, and Oklahoma. Mohair production in
Texas, placed at 17,407,000 pounds in 1947, or about 473,000
pounds less than in 1946, yielded cash receipts to growers of
about $10,618,000.

Rains throughout the range areas of the Dist rict during February stimulated growth of rescue grass, clovers, and winter

Receipts of cattle and calves at Fort Worth and San Antonio
nurkets in February were 36 percent below those of January

64

MONTHLY BUSINESS REVIEW

and 38 percent below those of February 1947. Hog receipts were
down about one-third below those in January and those of the
corresponding month last year. While declines in receipts of
sheep and lambs weee less marked, February marketings were
about 13 percent below those of January and 28 percent below
those of February 1947.

cent from the all-time peak of 40,642,000 head reached on
January 1, 1944. During the same period, poultry numbers
declined from a peak of 66,263,000 to 47,204,000, or about 29
percent. Declines during 1947 occurred in numbers of all major
types of livestock and poultry and represented an extension of
the downward trend in evidence since the wartime peaks were
reached.

LIVESTOCK RECEIPT8--(Number)

The number of cattle and calves in the five states on January I, estimated at 14,443,000 head, represents declines of
5 percent during 1947 and of 11 percent since the peak of
16,185,000 was reached in 1945. The reduction in cattle numbers last year resulted from declines in each of these states
except New Mexico, where the number was unchanged. Texas
reported 8,578,000 head of cattle this year, or 4 percent fewer
than last year. The decline in the number of cattle in the nve
states during 1947 reflected reductions in the beef cattle population and in the number of milk cows and heifers two years old
and over. The cattle population in the United States has been
declining since the peak in the cattle cycle was reached in 1945;
but the large decline last year, occasioned by the record slaughter
of cattle and calves, reflected the effects of exceptionally heavy
demands for and the high prices of meats, the drought conditions
in certain areas, the scarcity of feeds, and reduced imports of
cattle from Mexico. A better-than-average calf crop in 1947
was a factor in moderating the decline in cattle numbers during
the year. The United States Department of Agriculture has
indicated the probability that the down-phase of the present
cattle cycle will continue for at least another year or two.

- -_ _ _ San Antonio - - _
January February February January

~--Fort Worth-

February .F ebruary
1948
1947
27,465
52,595
Ca1v.................... 11,147
20,778
Ho...................... 46,430
72,148
Sheep................... 32,764
64,699

C.ttle.......... .........

1948
34,437
27,303
70,932
45,439

1948
20,394
10,692
6,436
25,269

19.7
22,933
16,634
7,116
16,431

1948
29,342
17,949
12,648
21,066

COMPARATIVE TOP LIVESTOCK PRICES
(Dollan per hundredweight)
~--FortWorth---_--San

Beef Ilt.eera .... ' •.•
Siocker steers ...... . . . . . .
Heifers and yearlinp ... .

Butcher cows ........... .
Calvea .. .. .... , ..... .
Hogs .. . ................ .

Lambs .. ........... •...•

February February
1948
1947
$28.00
$25.00
26.00
19.25
33.00
26.00
22 .00
15.00
27.00
21.00
26 .60
28.00
25.00
23.50

January
1948
$32.25
27.60
33.25
22 .50
30.00
28.2.;
26 .00

Antonio - - -

February February
1948
1947
$28.50
$22.60

January
1948
$29 .00

.28:50

'22:50

.29:ixi

22 .00
27 .00
27.00
22.60

15.60
22.25
26.00
20.00

22 .60
28.00
27.60
24 .25

The report of the United States Department of Agriculture
indicated that prices received by Texas farmers for most crop
and livestock products declined during the month ended February 15, but prices of most products remained above levels of a
year ago. The greatest changes occurred in prices of wheat, feed
grains, cotton, cattle, and hogs, while prices received for lambs,
poultry, eggs, and dairy products declined slightly. Exceptions
to the downward trend were the price of oranges, which rose
sharply, and prices of rice, sweet potatoes, wool, hay, and
grapefruit, which made moderate advances. The index of prices
received by farmers in the United States feU from 307 at
mid-January to 279 at mid-February, which is one of the sharpest declines on record for a similar period since 1921.
AVERAGE PIU CES

R~CEIVED

NUMBER OF CATTLE ,SHEEP AND HOGS
JANUARY I Of EACH lUI'!:
MILLIONS

TEXAS,OKLAHOMA,LOUIS1ANA, NEW MEXICO AND ARIZONA

2

MILLIONS

20

llY FARMERS IN TEXAS

Jan. 15,
Feb. 15.
1048
1948
2 .79
2.11
2.35
2.00
1.29
1.10
3.70
2.70
Rice, per bushel..........
. ...... dollars
3.30
3.40
Cot.ton lint, per lb...
. . . . . . . ... cents
3t. 7
28 .6
Pe.,\DUts, per lb......
. ........... cents
tL8
9.6
Hogs, per cwt.. ... . ................. . . . . . . dollars
25.20
21.20
20.20
18.20
Dee( callie, per ewt .. . . . . . .............. . . dollars
Lambe. percwt..... ... . . .• . •...
. ... dollars
19 .2()
18 .70
Chickens, live. lb...
..cents
24.6
24.2
E~i per doten.....
. . cents
48.9
43.6
. ... cents ~O.O
41.0
42.0
' oo,perlb. . ...... ............
Allhay,l00ee,toll . ..
. . . doUurs 18.00
23 .60
24.60
. ....... dollars
1.80
0 .95
t . 76
Oranges, per boxt . .
GrapefrUIt, per boxt.
. ....... dollars
0.78
0.45
0 .52
·It.eviscd.
tEquivalent packing·bouse door returns for all methods of sale.
SOURCE: Uttited States Department of Agriculture. Bureau of Agricultural Economics.
Commodity and Unit
Wheat. per bushel. . . . . . .
. ....... dollars
Coro, per bushel........
. ... . . . dollars
Oat.3. per busbel.,......
. ...... dollars
Gl1Li n80:r~bum.pe rcwt ...
. ...... dollars

Feb. 15,
1047
1. 99
1.46
.92
2.15
2.32t
29.9
8.3
21.80
15 . 10
15.00
23.1
36.0

Reports from spot commodity markets indicate that from
February 15 to mid-March the prices received by farmers for
most commodities made irregular recovery. On the latter date
price quotations for cotton, grains, cattle, and hogs were higher,
but prices of lambs were lower.
Changes in Numbers and Values of Li vestock in the
Southwest During 1947

The January 1 estimate of 32,098,000 head of livestock in
rhe five southwestern Slales lying wholly or partly ill the Eleven th Federal Reserve District reflected a decline of about 21 per-

SOORG(.U S O[PARTM[NT 01' AGRICULTURE,8 A [

The 9,887,000 head of sheep in the five states last January 1,
the smallest number reported since 1929, was 8 percent below
the number a year earlier and 31 percent below the peak of
14,384,000 reached in 1943. Also, the number of ewes one year
old and over and the total number of stock sheep declined about
4 percent and 7 percent, respectively, during J947. On January 1 of this year, Texas had all estimated 7,632,000 head of
sheep, which was 9 percent less than last year and the smallest
number reported since 1936. The number of sheep on farms and
ranches in the United States on January 1, the smallest number
since 1871, was 7 percent below the number a year earlier and
37 percent below the peak in the cycle reached in 1942. Several
important western sheep states showed increases in the number
of ewe lambs last year, indicating a possibility that the downward
trend is being checked in some of these states. The maintenance
of consumption of fine wools al a rdatively high level in the
United States and the expanding demand for such wools in foreign countries have reduced >locks and brought aboul a rise in

65

MONTHLY BUSINESS REVIEW
price. This situation may serve as an inducement to some ranchers to increase their sheep numbers during the next year or two
if weather conditions and feed supplies should permit.
On January 1 of this year, there were an estimated 3,114,000
goats in Texas, or 2 percent less than the number a year earlier
and about 10 percent less than the record number of 3,465,000
reported in 1942. The price of mohair weakened during 1947 in
response to a reduced demand, and these conditions, which may
continue to obtain in 1948, might be an inducement for a further reduction in goat numbers during the current year.
LIVESTOCK ON FARM~, JANUARY I, 11H7 AND 11H8

Number (thousands of head

- - T.... - ---Five States·---Ullitcd StawHomes "lid colts .... . . .
Mules and colts . . . ... .

All cattle aDd calves ... .. .

Mill; co... t ... .. . . . . . . .
Ho.p. including pigs ... . . .
Sows and giltat ..... . . .
All sheep and lambs .. . . . .
EWell, one year old and

overt· . . ...... . . .... . .

Goatstl •• •••

• • • • •• •

Total aoo.'e species .. .
Chicken8 .
Turke')'8

11H7
468
230
8,935
1,453
1.736
215
8,341

1948®
440
191
8,578
1,351
1,753
221
7,632

11H7
1,045
43 6
15,273
2,694
3,303
462
10,709

11H8®
974
380
14.443
2,504
3,300
463
9,887

lIH7
7,249
2.772
81,207
26,098
56,921
9,616
37,818

11H8®
6.607
2.644
78,5st
25,165
55.038
8.690
35,332

5,396

5,180

6,851
3,114
32.098
46,3M
838

25,048
3,178
189,145
174,441

23.826

462,976

6,650

4,507

3,178
22,888
29,178

21,708

7,142
3,178
33,944

28,352

47,727

786

700

983

3,114

in many years. Turkey numbers in Texas last year declined to
700,000, or about 11 percent. Chickens and turkeys in the
United States declined 2 percent and 32 percent, respectively,
during 1947. Poultry declines during 1947 were due largely to
the unfavorable relationship between prices of feeds and prices
received for poultry, and similar conditions appear to be in prospect for 1948.
The higher level of livestock prices in 1947 brought increases
in value per head of all categories except horses and mules, with
the result that the total value of livestock increased 19 percent
in the five states and 11 percent in the United States despite the
reduction in numbers. Cattle, hogs, and sheep reached new record levels in value per head. The average value of $90.05 per
head of cattle in the five states last January was $20.28 above
the average of a year earlier and compares with a national average value of $116. The value of sheep in the five-state area averaged $12.09 per head at the beginning of 1948, compared with
TOTAL VALUATION OF LIVESTOCK ON FARMS

3,114
181,199

Valuntiou-(thOU&Lllds of dolb,rs)
I torsea and colts . . . .. .

Mules and colt~ ...... .

All cattle aDd calves .. .
Milk cowst . . . ......
Il ogs, including pip ... . . .
All sheep and lambs ......

Goat.!'"' . ... . . . ..... . .•. • .
Total above species
Ch ickens .... . ..
Turkeys . . ..
Total (arm value, including
chickens and turkeys ... .

I 23,400
16,100
621,876
136,582
44,442
74,876
17,002
797,696

35,597
3,851
837,1 44

I 20,680

I 51,304

12,988

36,594

144,600 I 428,798 I 366.480

3 1,1 85
389,776
337.901
7,907,198 9,1 60,013
254,746
155,365
292,557 3,787.080 4,126,161
55,745
78,133
97,543 2.049.066 2,355.609
90,753
99,978
119.5;4
477.296
542,321
17,5Q4
17,002
17,594
17,002
17,594
959,' 86 1.348,544 1,611 ,142 1I,269,I3Q 12,769,918
33,172
M ,107
56,103
682,486
667,697
3,710
43,0 16
4,88'
' ,491
30,989

761,726 1,065.533 1,300,546

996,368

1,412,535

1,671,736

11 .994,638 13,468,504

~Prelimin.a ry .

--rcus, Arizolla, Louisiaua, New Mcxico nnd Oklahoma.
tcow9 and heifers 2 years old and over kept for milk, included in "All cattle aud calves."
tBows and gilts included in "Hop, including pigs."
§Ewes onc year old "lid oYer iue1udcd in "All sheep nnd Jambs,"
6(;oot numbers and value shown for Texas only, since estimates not available for other
IJtatea alill most of goatl'l are on ranges in Texaa.
SOURCE : Un ited Slates Departwcnt of Agriculture.

The estimated number of hogs in the five states on January 1,
totaling 3,300,000 head, was about the same as on January 1,
1947, but about 43 percent below the 1944 peak. Small increases
in hog numbers in Texas and in Arizona last year were offset by
declines in Louisiana and New Mexico; the number in Oklahoma
remained unchanged. The estimate of 463,000 sows and gilts in
the five states on January 1 was virtually unchanged from a year
earlier, but the 221,000 in Texas this year represents an increase
of about 3 percent during 1947. Hog numbers in the United
States declined about 3 percent during 1947 and on January 1
of this year were about 34 percent below the record high reached
in 1944. The spring pig crop, which is estimated at 48,000 ,000
head or 9 percent below 1947, together with the prospective
demand for pork, indicates that an increase in hog numbers during 1948 is unlikely.
The 46,3 66,0 00 chickens in the five states last January 1 were
3 percent below the number of a year ea rlier and 29 percent
below the record numb~r of 65,140,000 reported in 1944. The
decline last year applied to each of the five states except Arizona,
which reported a 9 percent increase. The 28,3 52,000 chickens
reported On farms in TexlS thi, ycar retl e~l ' a oecline of 28 percent fOI' the State since January I , 19~4. The number of lurkeys
on farms in the five states fell 15 percent during 1947, and the
838,000 on hand January 1 was the smallest number reported

a national average of $15.35. Hogs in this area had an average
value of $29.59 per head, or $13.21 below the national average.
Horses and mules in the United Sta tes and in the Southwest
declined in value per head as well as in numbers.
FINANCE
Principal asset and liability accounts of the weekly reporting
member banks in the Eleventh District declined during the
four-week period ended March 10, as more restrictive credit
policies and the impact of heavy income tax payments were
reflected in banking operations. Major declines during the period
appeared in total loans, in holdings of United States Government securities, and in deposits.
Expansion of bank loans in this District was interrupted in
the last week in January, when total loans and discounts of the
reporting banks showed a decline of about $2,680,000. Throughout February and the first week in March the decline continued,
the trend not being reversed until the week ended March 10
when total loans for that week showed an increase of approximately $1,358,000. Commercial, industrial, and agricultural
loans, which since the first of the year have represented roughly
70 percent of total loans and discounts of the reporting banks
of this District, increased until the week ended January 28 and
then showed successive weekly declines through March 3. During the last week for which figures arc available this category
of Joans increased by approximately $4,640,000 to bring the
total amount of commercial, industrial, and agricultural loans

MONTHLY BUSINESS REVIEW

66

outstanding on March 10 to $716,406,000, or $16,334,000
below the peak reached on January 28 and approximately $340,000 lower than the amount oustanding at the end of the fust
week in 1948,
While the pattern of events with regard to the loan trend
has not been regular and is not entirely clear, it seems that several factors may have played a part in the development, To an
extent, the trend of loan volume may reflect seasonal influences,
but, in addition, it is probable that the Voluntary Credit Control Program of the American Bankers Association has played
a part in causing bankers to reappraise their loan portfolios
and to approach the problem of loan extension in a somewhat
more cautious and conservative manner, Then, too, the feeling
of uncertainty which has pervaded the economic system since
the substantial decline in grain prices early in February and the
increasing doubt in the minds of many as to the stability of the
foreign situation may have contributed to more conservative
policies, Finally, monetary and credit policies which have been
designed to place firm and continuous pressure upon bank reserves undoubtedly have had their influence, while the loss of
reserve funds by banks as a result of the transfer of tax payment
funds to Treasury balances at the Reserve banks has been a
restrictive factor,
Most reports indicate a continuing strong demand for bank
credit from many different types of business organizations; consequently, it would appear that the decline in commercial, industrial, and agricultural loans in the first quarter has been initiated
by some credit tightness and a shift in policy on the part of
bankers ra ther than a weakening in the demand for loans by
business borrowers, There arc no reports of any significance that
would indicate that business firms in sound operating condition
are unable to obtain financing accommodations from the banks
of the District for productive non-inflationary and non-speculative types of loans, On the other hand, there are reports and
indications that bankers have become increasingly reluctant to
extend their loan position in those loan categories which might
be assumed to involve speculative or inflationary potentialities,
Weekly reporting member banks' holdings of Government
securities showed a decline of $35,290,000 during the four-week
period ended March 10, Over 70 percent of the decline in holdings of United States Government securities was the result of a
reduction in holdings of United States Government bonds from
$827,167,000 to $8 00,946,000, Holdings of other types of
Government securities, with the exception of United States
Treasury bills, also decreased,

Bank debits in 24 CItIes in the Eleventh District showed a
decline of 17 percent during February from the preceding
month, with each of the cities except Galveston reporting more
or less substantial declines, In contrast with the situation a year
ago, however, bank debits in 22 of the 24 reporting cities were
considerably higher during February of tius year, The annual
rate of turnover of deposits, which had risen to 13,7 during
January of this year, declined to 11.4 during February, This
development tended to reflect a slowing down in trade activity
during the month and, in fact, is probably of significance merely
as a seasonal movement, as bank debits tend to decline seasonally soon after the turn of the year,
BANK DEBITS, END-OF-MONTH DEPOSITS, AND ANNUAL RATE 01' TURNOVER
OF DEPOSITS
(Dollar figu!'ell in thousands)
- - -Debits-- Pdg. change over End-of-month
February
Feb. January
depositsCity
Tucson, Ariz ... .
Monroe, La... .
Shreveport. La.,

Roswell, N. M..
Abilene ....
Amarillo.
Austin . ...
Beaumont..

Corpus Christi .
COf'l!lica.na ..

1947
26
8

1948
- 16
- 22

21
19

- 15
- 26

18
16
10

- 17
-23
-25
- IS
- 21
-34

24
10

-

t

856,176
11 7,546

II
31

262,063
68,951
896,615
13,403
60,920
32,063

Tyler .. .

12,971
34,528

10
37
31
- II
34
18
28
7
5
17

10
-"
-2 1
- 27
- 8
- 15
-21
-17
-19

48,155

13

-12

Wichita Falls ..

44,689

7

-16

DnIL'US ....
RIl'a&> .. , ... ,
Fort. Worth ..
Galveston.

Houston .. ,
lAorooo, .
),ubboek ....
Port Arthur .
San Angelo ..
Antonio.
Texarkana: ..

San

Waoo ........ .

27,~11

210,272

F,b. 29, 1948
$

18. 120
41.305

82,738
100,135
08.857
72,579
19,906

-19
-13
-20

685,786
116,938

26.1,676
93,455
627,526
21 ,845
67,280
40,803
37,408
3 10,861
22,574

50,292
63,418
76,680

1948
'fotalloans and investments. . . . .
. .... S2,191,962
Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,0 18,563
Commercial, industrial, and agriculturalloana..
716.400
Loans to brokers lind dealers in securities.....
5,1)24
Uther loans for purchasing or carrying securities. .
5(1,030
Real estate loons. . . . . . . . . . .. .. . . . . . . .. . . .. . . .
78,309
Loans 00 banks........
............
463
All other loans. . .
IfH ,341
Total investments .....
1. 173,391)

1947
12,089,078
829,991
648,363

U. S. T reasury biOs..... ... ...
. .
U. S. Treasury certificates of indebLodness

8,.524
162.042
88.1 00

U. S. Treasury notes............ ...

.........
U. S. Government bonds (i nol. gtd. oblignt.iolls).
Other securities..............
Reserves with Federol Reserve Dank
Balances with domestic banks ...
Demand deposits-adjusted*..
Time deposits .. . . . . . . . . . . . . . .. ..
United States Government deposit1l .
lu terba,llk deposits
Borrowings from feJcr:\1 Resen 'e Ua nk

800 . 9~6

113.727
480,.5';7
268,1 06

011

293.724

1.846,769

1,712.079

388,703
35.031
544,051
Ncmt'

366,851
66,685
M3. I JO
1,000

-Includes nil uelilunJ deposits lither than interbank and
cnsh iteuis rcporteJ us

7.0 1.5
76,38.5
6.1,022
357
133,849
1,259,087
36,231
247,263
126.8 17
757,178
91,MB
433.259

halld or in process of ooUection.

Ull i ~ed

12 .0
10 .6
10.8
5.0

10 , 9
10 .1

15.5
12 . 4
13 . 4

14. . 0

14.4

11.9
11.6
8.9
13.0
7 ,3
10.6
0 ,5
8,9
8,0
6,8
8.2
g.O
7 ,0

08
108
72

10.2

10 .6
5 .3

11.2

8 ,9
0.6
8,3
7 ,2
7 ,7
6 ,
80
8.3
7.6

7.4
18. 0
J3.4
14 _3
8. 2
150
10 .3
13 .9
10 .2
10 .2
10 . 1
8.0
9.8
10 .0
8 .2

Principal changes in the condition of the Federal Reserve
in holdings of Government securities amounting to almost $20,000,000, together with a decline of abou t $5,500,000 in discounts for member banks and a reduction in the amount of
Federal Reserve notes in actual circulation from $601,575,000
to $594,307,000,
CONDITIOK OF THE FEDERAL RESERVE DA)[ K OF DALLAS
(Thousands of

dolla.rs)

(Tbousands of dol13 rs)
March 12,

Jan.
1948
9.2
10 .2
10.4
g.8
10.1
13.1

Bank of Dallas for the month ended March 15 included a decline

LEA DI NG CITIES-Eleventh Federal Reserve District

March 10,

87,092
40,238
166•.543

Feh.
1947
6,6
8, 4
8, 0
6 ,5
7.8
10,3

Feb.

1948
7.7
8,4
9. 0
7.6
8. 4

10.4
13.7
11.4
18
-17
13,397,"5
Total-24 cities... .. $.1,259,148
-Demand aud time deposits at the end of the month include cc::rtiucd nud offi<:er's c.hecks
ouklLallding but c.xclude dcpooila to tbe crcdiL of bauks.
t Indicates: change of less than one-half of one percent.
ffhis fi~ure includes only one bank in Texarkana, Texas. Total debits for all banks in
Texarkana. Tews.-Al'kanSBs, including two banks located in the Eighth District, amounted to
$20,834,

COXDITION STATISTICS OF WEEny REPORTL'IG MEMllER BAl\KS
r~

1918
, I 5b,238
28,504
116.087
11,718
29,127
71,763
119,49'
86,886
6.'),778
8,361

Annual rate of turnover

Fe!:mmry II,
H148

12,238,80.\
1,029,957
724,421

5,764
60,2'7

.......
ToLaI gold eerti ficale rcecrye ..
Discounts ror member banks ..
Foreign loans 011 gold . . .
U. S. Government 8CCurities ... .
Total eatl1ing MSCLs ... , , , , ... .
Member bank rCRCrye rlepositl:! ..... , , ,. . ...
Federal Reserve Notes in actual circulation . . ,

March 15,
19'8
1528.870
2117

March 15, February 15,
1948
1947
$549,737
S48~!~
5,800

4,794
018,535

4,349

4,48 1

885,224

023,62G
840,60G

889,573
770,400
5S0,373

938,062
948,343

594,307

82<,143
60 1,575

; 8,686
413

160,426
1,208,848
4,779
166,26.1

GROSS DEMAND Al\D TIME DEPOSITS OF MEMBER BAl\KS
(Average of daily figures in thousands of dollars)

00,75 1

827,167
113,886
475,479
252,240
1,843,482
391,943
27,483
668,739
8,200

States GO\'f'rnment kss
'

~-=C_O_lli_bi_"_'d_'_O_I"_
' ~_R-:':-'sc_,_
,,_'Ci-,lY_ bo
_ uk_ ,_ _C_'o_uutry banks

Gross

Io'ebruary 1946.
February 1947.
Uctober

1947 ..

November 1947 ,

December 1947,
Ja.nuary 194$
February 1948.

demand
, ,,$5,09i,096
4,669,675
5,100.591
5,2S6,OO3
5,2/S'l, 150
5.319,13$
.... 5,088,150

Gtoas

Gross

Time
demanJ
Time
demand
$457,348 $2,620,309 $293,5i5 $2,476,i8i
514,300 2,218,668 327,017 2,451,007
541 ,504
543,685
M9.698

55i.57 1
.5f}4,973

Time
$1~J,773

2 ,524,g~:IO

337.197
337.324

2,516,1W9
2,527,706
2,392,425

34:Ui3~

187,379
2.663,200 204,:-\07
2,761,173 2tl6,36 I
2,707,30 1 207,060

349,429
355,853

2,79 1,432
2,695,725

2,437,292

208,142

209,120

67

MONTHLY BUSINESS REVIEW
MEMBER BANK RESERVES AND IlELATED !'ACTORS

INDUSTRY

Eleventh Federal Reserve District
(MiliiolUl of dolla rs)

Seasonal declines in the number of workers engaged in trade
establishments and widespread lay-offs of construction workers
on account of severe winter weather reduced total nonagricultural employment in Texas and in the District during the first
two months of this year. All major labor market areas report,
however, that the upward trend of employment which prevailed
during most of 1947 has been resumed. Hiring schedules of
employers indicate that this trend may continue at least through
May, .t he strongest demands for additional workers being anticipated in Dallas, Austin, San Antonio, Lubbock, and San
Angelo.
Although consid'erably below the all-time peak of December
1947, nonagricultural employment in Texas in January 1948
was at a much higher level than a year earlier, being larger in all
major categories of activity except trade and government and
in all important manufacturing classifications except petroleum
refining and aircraft and shipbuilding. The increase of approximately 18,000 workers, or about 6 percent, in manufacturing
establishments of the State reflects chiefly the significant expansion of employment that has occurred in iron and steel, machinery, lumber and timber, apparel, and chemical industries. Major
increases in mining (principally drilling and petroleum production), transportation and public utilities, financial and service
establishments, and construction also contributed to a rise in
total nonagricultural employment of 67,700 employees, or about
4 percent. If indicated hiring schedules are followed, employment will be raised considerably above the January level by the
end of May, probably to a newall-time peak. Such expansion of
employment would create considerable pressure upon the supplies
of craftsmen and other skilled personnel, since there w;U be few
additions to these groups during the period. It is not expected to
cause serious scarcities of unslcilled workmen, inasmuch as additions to the labor force should be adequate to meet essential requirements for such workmen.

Cumulative changes

Changes in weeks ended

March 10, March 3,

Feb. 25,
1948
- 1.4

Feb. 18.
1948
- 5 .2

1948
1948
Jo'ederaJ Reserve cretlitlocal.
2. 0
13.2
In tard iaL;ict ~~me~ial &:
finan cial t ron s,"lctiO[lB ... - 11.6
2. 7
- 2. 1
Treasury operations ......
8.8
21.1
8.5
Currency transactiOIl! ....
1.1
1. 9
2. 5
Ot.her depooitl.! at the
Federal Reserve Bank .. . - 0.6
- 0.2
- 0. 1
Other Federal Reserve
aeoounLs .. . . .. . . . .". - 0.1
0.2
- 0. 1
Member bank reserve
balances. . . . . . . . . . . . . . . - 0.4
9.3
7 .3
Kote: Amount.a prcoodod by n minUl sign reduce reservesi

4 weekI!
cndcc1
Jail. I to
March 10, Ma.rch 10,
1948
1948
-1 7.8
- 12 1
21

13 . 1
27.7
3. 0

0.2

4.7

23.8
-81.2
34. 8

0.7

-

11 .3

-

0.1

0. 1

0.3
1.8

16. 5
- 0.3
-40. 2
all others add to reserves.

SAVINGS DEPOSITS
Reporting Banks-Eleventh Federal Reserve District
February 29, 1!H8

Number
reporting

8
2
2
5
3
3
3
55
102

519.691

bank!

Beaumont . .... .

Dallaa ... ...
E1 P880 . .. ..
Fort. Worth . ..
Galveston ...
Houston

...........
...........
Lubbock . . . . . . . . . . . . . , .
Port. Art.hur . ............

San Antonio .

La:.

Shreveport,
Waco .........
Wiehita Fall& . .
All other ...............
Total .. .

3
8
2
4
4

~EW

Perceu~e

savings
Number of
savings
dpoaitors
12.O\JO
138.988
35 ,1 43
43 ,139
23,342
105,761
1.374
6.100
39.841
33.000
10.172
7.009
63,657

change in
epoaits from

Amount of

,

savin ~8

deposita
6,41 8,M5
78.299.593
23 ,7 11 ,528
35,429,480
21 .571,726
72.262,831
2.100.702
4,970,612
47.641 .383
25.943.881
0.747.448
4.585.052
54.967.804

$387.656.695

Feb. 28.
1947
-14 .0
1.8
- 0.4
2.3
4.0
2.0
- 5 .8
- 5. 9
3.0
- 1.3
1.2
- 0 .6
3.1
1.5

Jan. 31.
1948
0 .6
0.8
0 .1
0.4
- 0. 2
1.2
5.2
0.2
- 0 .5
1.0
0.3
- 0.4
- 0.02

-

0.1

MEMBER BANKS

The First National Bank of Borger, Borger, Texas; a
n=ly organized institlItion located in the territory served
by the Head Office of the Federal Reserve Bank of Dallas,
opened for business on March 20, 1948, as a member of the
Federal Reserve Syste·m. This bank has total capital funds
uf $200,000, including capital of $100,006, surplus of
$50,000, and ",ulh;ided profits of $50,000 . Its officers
are: C. R. Stahl, President; Preston P. TC1Itple, Vice President and Cashier; and J. H. O'Neal, Assistant Cashier.
The UniOl' State Bank, Carrizo Springs, Texas, located
in the territory served by the San AntOllio Branch of the
Federal Resertle Bank of Dalias, was admitted to membership in the Federal Reserve Syste11> on March 20, 1948.
Tbis bank, which opened for business as a primary organization 011 October 11 , 1947, has total capital funds of
$82,700, including capital of $50,006, sllrpltts of $25,006,
and undivided profits of $7,700. Its officers are: A. N.
Box, President; Sam H. AI~xander, Exemtive Vice Presid!!tlt and Cashier; Joe L. Gardtter, Vice Presid!!tlt; Jam.
D. Carpmter, Vice Preside1tt; and Mrs. O"a B. Trant,
Assista"t Cashier.
NEW PAR BANK

The Citizens Bank, TlIc1l1/tcari, New Mexico, a n=ly
organized illS1<red notl1/te1nber bank located in the territory served by the El Paso Branch of the Federal Reserve
Bank of Dallas, was added to the Federal Reserve PaT List
On its openi1'K date, Marcb 15, 1948. This bank has capital of $100,000, surplm of $10,000 and 1I.tlallocated
fllllds of $15,000 . Its ufficers tire: Guy 1-1. Waldell, Presid/!llt, and James P. Arlloid, Cashier.

1I0XAGRICULTURAL EM PLOYMENT- T EXAS
--~umbe r

J anuary
1948
342 .9
14 1. 4
19 .4
30. 7

of E mployees (in thousands) - -

December
1947
346 . 8

Cbange
January

1947
324 .8
134 .6
16. 5
28 . 2

T ota.l manuracturi ng
Durable good.s ...
141.9
Iron and steel.. ............
1D .3
Machinery, except electrical .. .
31.1
Transportation equipment, except
24 .5
24 .6
automotive ......
25 .9
11.2
11.1
10 .1
Nonferrous mel.tlls ...
Lumber and timber ....
....
31.5
31.3
28. 4
Furniture and fin ished lu~bc;..
114
11.7
12 .0
Su:mc, elay, !lnd glu.ss ..
0.6
9 .6
9. 9
Other durable goods ...
3 1
3 .2
3 .6
20 1.5
Nondurable good8 .....
204 .9
100. 2
9 .8
9. 8
8 9
Textiles .. . . .
Apparel .. .... .. .... .
28 0
28. 3
247
68.7
72 .2
67 2
f ood . . .. ..............
3.7
3.8
Pap er and allied produets
3. i
P rinting and publishing ..
19.8
198
19.0
24.1
23 .9
19. 7
Chemicals . .....
37 j
Petroleum ..... _........
33.0
39 .2
7 .8
9. 7
Other nondurable goods ..
9 .1
T ota l nonmanufacturillg .....
1,328 .0
1.278.4
1.360.7
Mi lling ......
92 .2
90 .9
85.6
'T'rrUlsportation' a~d' p~biic' ~ti iiti~·.·.
219.5
220 .3
208. 5
425.3
T rade .......
. . . . . . . . . . ..
388.S
398. 9
}~inB.nce and se~vic·e·............. .
2B6 ..f
231. 5
266 .2
101 .5
Cont1'3ct construction . . _..........
78.0
99.0
Oovernmeot ..
242.8
241 .2
. .......... .. . 240 .6
Total nonagricultural ... _
1,603 .2
1,707. S
1.670 .9
SOURCE: B lreau of Business Research, The Universit.y or TeX!1s.

.

J an. 1947 to
Jan. 1948
18 . 1
6 .8
2 .9
2 .5

-

l.4
1.1
3.1
- 0.6
- 0.3
- 0 .5
11.3
O.D
3.6
1.5

-

0: 8
4.4
1.2
1.3
49 .6
6.6
11.0

-10 . 1
19 .2
23 .5
- 0 .6
67.7

The value of construction contracts awarded in the District
rose to a new peacetime high of $77,200,000 in February. Residential awards declined slightly from the January level, but
major awards for educational, public utility, commercial, and
public projec ts, the latter including a $16,000,000 dam on the
Brazos River and a $7,500,000 tunnel near Pasadena, Texas,
raised total awards slightly above the peacetime high attained

68

MONTHLY BUSINESS REVIEW

last October and approximately $19,000,000 above the level of
February 1947. Awards have been maintained at notably high
levels for five months. The mon thly average rate of $67,000,000
during the £irst two months of this year and of $65,000,000
du ring the October-February period compares with the 1947
average of $47,000,000.
BU ILDING PERMITS
.'cbruary 1948

Abilene •. .. ......
Amarillo . ... . .. . .
Austin . . ,_ .. " ...
Beaumont ........
Corpus Christi ... .
Dallas ....
E I Paso ...
Fort Worth
Galveston ...

Houston

Lubbock ... .
Port Arthur ..

San Antonill .....
Shreveport, L.a . ...
Waco . . .... ..
Wichita Falla.
ToLaI.

No. Valuation
68$ 254 ,215
136
591,825
266 1,557,625
205
478,8S4
220 3,919,885
I .IOS
6,1l9,065
107
878,585
319 1,286,239
100
174,140
688 10,819,125
232 1,259,097
86
182,938
869 2.312,813
292 2,900,281
13.
793,480
70
383,620

-----

.. . ..

Percentage
Percentage ehange Jan. t to Feb. 20,1948 change
valuation from
valuation
Feb.I947 Jan. 1948 No.
Yaluation from 1941
13
- 24
166 1 590,665
63
7
- 26
286 1,389,940
42
20
- 25
587 3,637,544
67
35
- 17
451 1,054,488
73
236
143
533 5,533,080
144
72
- 24
2,143 14,178,237
128
17
- 13
261
1,889.778
31
- t
- 33
700 2,577,935 - 3 1
- 41
- 44
252
484,718
17
255
- 28
1,583 25,847,075
146
177
76
452 1,978,889
130
- 15
III
121
269,838 - 21
7
- 34
2,162 5,832,643
62
206
232
512 3,m,169
100
18
- 70
290 3,417,480
205
146
2
137
760,536
137

4,806 133,91l ,787
92
1Change less than one-half of oue percent.

-

14

-10,636
--173,2 17,0 15

99

Estimates of the dollar value of new construction activity in
1947 in the United States and in individual states indicate increases from 1946 of about 30 percent in the N ation and 44 percent in the five southwestern st at es. Although much of the
increase reflects higher cost s of construction, physical volumes
of new construction were about 8 percent greater in the United
States and approximately 1 I percent larger in the five-state
area. Residential building was the most important category of
new construction activity in t he Southwest las t year, comprising 40 percent of the total in the five-state area and 44 percent
of the total in T exas. H eavy industrial building, public utility
cons tructibn, and highway projects also accounted for significant
portions of total activity, all being carried on in greater dollar
volumes than in an y prior peacetime year. It will be observed
from the accompanying table that in 1947 the southwestern
states received a notably larger portion of total Uni ted Stat es
construction acti vity than in 1946 or the prewar year 1939,
principally because of a substantial in crease in T exas, which led
all other states except California in t otal value of new construct ion activity in 1947.
TOTAL NEW CONSTRUCTION ACT IVITY

United Slates.
li'i\'eStates .
Arizona.
l..ouisiana.....
New Mexico,.
Oklahoma
T.... ...........

--Dolla.r vn.luc (millions)---Percent of U. S. total- 11139
1946
1947
1939
1946
1947
$6,062.0 '9.890 .0 $12.825.0
100.0
100.0
100.0
562.6
986.1
1,422 1
0.3
10.0
11.1
39.5
41.4
93 .7
0.7
0.4
0.7
109.3
101. 6
160 .5
1.8
1.0
L3
34.5
37.2
no .!
0. 6
0.4
0. 5
69 .7
128.0
1113 .5
1.2
1.3
1.5
309.6
677 .9
908.3
5.1
6.9
7.1

VALUE OF CONSTRUCTION CONTRACTS AWAR DED
(Thousands of dollars)
Febru.a.ry
Fcbruary
Jllouary
January 1 to February 29
19,8
194.7
1948
1948
1947
S 58,225
1 56,886 $ 134,064 I 128,' 80
Eleventh District-totaL . . S 77,178
26,40 1
22,105
48,665
46,292
Residentia l ... ... .
22,264
54,914
36,020
30,485
85,399
82,188
All other .. . . .. . . . .
615,206
1,297,173
1,013,825
United Stat.cs· -total.
681,967
442,197
471,348
465,810
Resideutial. . . .... .
232,250
208,391
239,098
825,825
248,015
All otber .. . . .
449,717
2'J3,806
376.108
·37 states east of tbe Rocky Mountaios.
SOURCE : F. W. Dodge Corporation.

The Portland cement industry in Texas operated at peak
levels during 1947 in support of t he construction boom in the
State and in surrounding regions. Production rose from 10,713,000 barrels in 194 6 to 12,461,000 barrels in 1947. Shipments
about kept pace with production and, consequently, stocks at
the end of 1947 were only slightly grea ter than a year earlier,
when t hey were considerably smaller than at the end of any
prior year since 1924. Prospective 1948 requirements for Portland cement in Texas and the Southwest are as great or greater
than in 1947. Mill capacity has been ex panded at Fort Worth
and Houston, increasing potential output in Texas by about
100,000 barrels per month. Maintenance of production at 1947
levels may prove difficult, nevertheless, since intensive operation
for nearly seven years without normal periods of shutdown has
left most T exas mills in need of repair and subject to frequent
breakdown.
PORT I,A:< D

CE~!ENT

STATISTICS-TEXAS MILLS

(Thousands of barrels)
1940 ....... ....... . .... .. ...... ..
1941 ............................. .
1942 .................................... . ...... .
1943 ............. ....... ................. ..... . .
1944.............
.. ............ .
1915 .. .......... .
1946 . . ... .. . .. .

1947...... .

Prod uction
7,375
9,680
12,133
9,680
6,160
8,042
10,713
12,461

1,010

655
371
487

Petroleum indust ty operations in the Dis trict are being maintained at peak or near-peak levels. Refineries in the Gulf Coastal
Area operated above rated capacity during February and March,
and drilling and pipe line construction activities are being intensified throughout the District as the spring season advances.
Daily average production of crude oil reached a new high of
2,651 ,500 barrels in t he District in February as compared with
2,2 50,000 barrels in February 1947. The rate of production
during the first two weeks of March was somewhat below the
record of the preceding month, bu t production may rise to a
new peak in April in view of the increase of allowables in Texas
to the highest level of record.
CRUDE OTL PRODUCTION-(Bar",ls)

NEW CONSTRUCTION ACTIVITY, 1947
UNITED STATES AND FI VE SOUTHWESTERI' STATES
New

:Mexico
160.1
397
IR 5
11 4
23
7.5
20.4
1.1
10 .0

0 .•
U

Total

Oklahoma Texas
$193.5 $908.3
133.0
740.2
402.2
70.6
232.7
25.4
9.0
22.4
28 .0
82.9
605
168 . 1
12.2
32 .5
22.0
83 .•
6. 1
16 .7
20 .2
35.4

..... .. .......
.. .......... ..
.. . . . . . . . . . . .

production
745,300
4,990,900
14,465,050
7,384,850
1,286,150
9,135,000
3,652,500
1,.07,900
1,286,159
19,251.850
4,216.600
2,594,150
70,116,200
3,625,000

Dnily Ilvg.
vroduotion
25,700
172,100
498,450
254,650
44,350
315,000
122,500
45,100
44,350
663,850
145.400
86.350

Increase or dcc.reaae in daily
:I. verage production from

J an, 1948
Feb. 1947
144
5,780
4,002
26,580
2,195
48,838
990
31.998
306
7,998
s..
............
10,529
- 12,228
6
1,673
16,637
OI.hCt 6 ..
2, 198
7b.
9,076
1,577
1,188
7c ...
. ...........
5,181
196.499
8 ..
9 .....
3,034
19,339
- 5,686
3,239
10 ...
34,163
Total Texas .............
2,417.800
365,61G
125,000
21,164
New Mexico ..
2,074
3 Ih2 000
1011,690
North Loui.3iaJln ..
1..121
1 " ,4 ~
401,238
2,651.490
'!'ot.'ll District
78:893:200
37,758
DIILside District .. : .
187.000
75!,336,975
2.701.275
- 5.182
]55,230,175
5,352,765
588,244
United States
32.576
SOURCE: Est.i..mated from American Petroleum lustil.ule weekly reports.

District 1..
2..
3.
4.

(Millions of dollal'8)
C&~gory
Stales
Arizona Louisiana
TotaL ...
.. 112,825.0 51,422. 1 193 .7
1166.5
Totaltrivate .... 9,87 1.0
1,090.0
52.6
124.5
Resi ential. ... 4,934 .0
569.0
20.4
67.3
Nonresidentia l . 3, 179.0
19 .6
330.1
41.0
Farm .........
450.0
40.5
3.4
34
Public utility .. 1,308 .0
150. 4
9.2
22 .8
Total public .... 2,954 .0
332 . 1
41.1
42 .0
Nonresidculi:,I .
524 .0
:L3
55 . 7
G.6
Highwl~y ......
1,164 .0
1O!l
143.2
17.4
Sewer uud water
311 .0
4fl
1.4
29.3
All other.
965.0
103.9
23.0
10 . v
SO"C"RCE: United States Departmellt of Commerce.

9. 177
6.285
8,397
10,997
12,350

903

739
732
1,135

*End of year.

Februnry ] !liS

Five

12,140

Stocks·

SOURCE: United States Bureau of Mines.

SOURCE: United States Dep:utmcnt of Commerce.

United
States

Shipments
7,384
9.842

69

MONTHLY BUSINESS REVIEW
Very heavy consumption of heating oils between December 1
and March 1 lowered stocks of fuel oils in the District and the
Nation by about 37 percent and 30 percent, respectively. Stocks
of crude oil were reduced only slightly during the period, and
gasoline stocks were raised to the highest levels of record. In
early March, total stocks of crude oil and its principal products in the Nation and tl1e District were somewhat above the
levels of a year earlier.
DOMESTI C CONSUMPTION AND STOCKS
Fehrua.ry

l"ehruM,l:
1947

O~'

COTTON - (S,I,,)

Augllst I to February 29
This seMOn (.aat 6688011
1948
13,534
89,308
130,202
860,202 5,422,602
6,052,188

Jrl.1lUfl.ry

19'5
13,745
185,231

11,059
839,315

In consuming c!:It.abm't.s ...

2,243,185

2,2~7,lJ2

2.222.2M

Public Itg.

4.470,307

4.287,239

5,116,954

COllsumption at:
Texas mills. , . .
United States mills ..
U. S. stocks-end of month:

d: compresses.

COTTONSEED A.'1 D COTTONSEED PRODUCTS

February 1048
_--T'X8S - - ---United Statea----.
August 1 to Febnlary 29 AURust 1 to Febmary 20
This eeason Last season This 5C88Of\ Last seuon
1,098,500
049,3 19
3,869,610
2,918,480
Cottonseed receive till mills (tonl!) . .
8~,922
643.992
3, lOO,79il
2,467.974
Cottonseed crushed (WIIS).. . . . .
. ...
257,006
G2.581
778,339
5f}8,Z12
Cottonseed on baud February 29 (Lolld).

Production or products:
Crude oil (thousand pounds) .. . '
Cake and meal (tons) . . ... . . . .

275,413
422,037
202,049
297,328

162,908
204,7 15
120,146
187,345

Stocks Oll htUlJ February 29:
15,470
Crude oil (tbotLSAnd [)Ounda) ...
13,896
Cake and meal (tOilS) . . .
J5,421
Hulls (tous) ..... . . .. ....... . ..•...
53,m
Linters (runnillg bales) . . ' .......... .
SOURCE: United Stutes Bureau of Census.

29,281
17,972

Hu118(tons).

.

Linlers (running bales) .. ...

6,820
41,096

983,918
1,475,000

720,332
996,407

48,955
85, 139
56,505
181,276

769,480
1,089,400
573,4804
793,655
30.934

16!),724

86,511
110,618

70

MONTHLY BUSINESS REVIEW
April 1, 1948

NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board

0 '(

Governors of the Federal Reserve System)

Output of manufactures and minerals continued to show
little change in Februa ry. Department store sales increased by
about the usual seasonal amount in February and the first half
of March. Wholesale prices generally showed little change following marked declines in farm products and some other commodities from mid-January to mid-February.
INDUSTRIAL PRODUCTION
Industrial production was maintained in February at the January rate of 193 percent of the 1935-39 average, according to
the Board's seasonally adjusted index.
Output of durable goods declined slightly in February, partly
because unusually severe weather conditions led to a curtailment of activity in a number of lines early in the month. Steel
production, however, was maintained at the January rate and
scheduled operations were increased in the first three weeks of
March. Activity in the machinery and transportation equipment
indusrries declined somewhat in February. Automobile production was sharply reduced in the first two weeks of the month
but recovered to earlier postwar peak rates during the last half,
and has been maintained at a high level in March. Output of
most other durable manufactures showed' little change from the
January level.
Activity in nondurable goods industries in February, after
allowance for seasonal variation, was slightly above the January
rate. Textile mill activity was maintained at the record level
reached in January. Distillers' output of alcoholic beverages is
estimated to have increased sharply in February, following the
end of limitations on grain usage. Newspaper publishing activity, as rellected in newsprint consumption, showed a substantial
gain. Output of manufactured food products was maintained
at the level of recent months, notwithstanding a further decline
in meat production. Activity in most other nondurable goods
industries continued at the January rate or declined slightly.
Output of minerals in February was maintained at the January level. Bituminous coal production declined 4 percent, while
output of anthracite, crude petroleum, and metals advanced. In
the middle of March bituminous coal output was sharply reduced
by a labor-management dispute.
EMPLOYMENT
Employment in nonagricultural establishments in the middle
of February was slightly below the January level, after allowance for seasonal changes. The decline rellected mainly the effects
of unusually severe weather conditions on activity in industries
manufacturing durable goods, and also in mining and construction. The number of persons unemployed increased and was
150,000 larger than in February 1947.
CONSTRUCTION
Value of construction contracts awarded, according to the
F. W. Dodge Corporation, rose somewhat more than seasonally
in February rellecting largely an increase of one-fourth in awards
for public types of construcLion. Private r~ , idential award,
~howed linl .: cllJtlgc 35 In in c rease 111 ConlrJCl!il for apartment
buildings was offset by a decline in awards for single family
homes. According to Department of Labor estimates the number

of dwelling units started was 50,000 in January and 47,000 in
February, as compared with a total of 84,000 in the same two
months in 1947.
DISTRIBUTION
Department store sales increased seasonally in February and
the early part of March but the Board's seasonally adjusted index
of sales continued somewhat below the average level in the
fourth quarter of 1947.
Carloadings of railroad freight during February and the first
half of March were somewhat below' year-ago levels. Shipments
of grain and livestock products were 30 percent smaller, loadings of forest products and merchandise in less than carload lots
were less by about 10 percent, while shipments of most other
classes of freight were at the same levels as in the corresponding
period of 1947.
COMMODITY PRICES
Prices of farm products rose somewhat from mid-February to
mid-March, following the sharp declines in the preceding four
weeks. Prices of some industrial materials, like leather and cotton fabrics, however, declined further, and prices of most types
of finished' industrial products continued unchanged.
Prices of foods in wholesale and retail markets, which had generally been reduced by 3 to 5 percent from mid-January to midFebruary, showed little change through the middle of March.
In the third week of the trulnth wholesale meat prices advanced,
reflecting the effects of the industrial dispute in the packing industry.
BANK CREDIT
Tax receipts in February and the first half of March in excess
of Treasury payments shifted deposits from accounts of individ uals and businesses at commercial banks to Treasury balances at
the Reserve Banks. As a result of these deposit transfers, over 1.5
billion dollars were drained out of bank reserve balances. Banks
received some new reserve funds from further gold inflows and
a small return of currency from circulation. Federal Reserve
purchases of Government securities in the market supplied the
remainder of the funds required to maintain member bank reserve positions.
Further purchases of Treasury bonds were made hy the Federal
Reserve in support of the market prices of these issues, although
after mid-February market conditions were stronger and the
volume of such purchases was greatly diminished. Total holdings
of Government securities at the Reserve Banks continued to decline, reflecting Treasury use of its current cash surplus and of
a part of its deposit balances to retire abour 2.8 billion dollars of
securities held by the Reserve Banks.
Required reserves of member banks in New York and Chicago
were increased by about 500 million dollars on February 27, the
effective date for an increase in their reserve requirements against

net demand deposits from 20 to 22 percent.
Government sec urity holdings at banks in leading cities declined during February and early March. Real estate loans conLinued LO "'p.lnd. Commercial and indu>[riaJ 10ll1> d~c1ined
somewhat at bank, in New York City and ,howed little change
a t banks in other leading cities.