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Monthly Business Review OF ----- THE Volume 24., No.6 FEDERAL OF DALLAS This COllY is released for publication in morning papers- Dallas, Texas, August 1, 1939 DISTRICT SUMMARY The agricultural outlook was improved further by heavy rains that fell over the major portion of the Eleventh District during June and the first half of July. Although departtnent store sales declined by more than the usual seasonal ~tnount in June, they were about as large as in that month In 1938. Wholesale distribution was well sustained and the volutne of sales was 5 per cent in excess of that for the same tnonth last year. The value of construction contracts awarded declined further by 15 per cent from May to June due chiefly to the smaller volume of residential building, but total awards for all classes of construction during June were 6 per cent larger than in the corresponding month last year. ~aily average production of crude oil declined moderately In June and then increased somewhat during the first half of July; nevertheless, production during the six-week period Was at a substantially higher level than in that period of ~938. At weekly reporting member banks in leading cities In this district, loans on July 12 were in larger volume than ~t any other time in recent years and deposits rose to an alltllne high level. BUSINESS The sales of reporting department stores in principal cities of the Eleventh District, which had shown a considerable expansion in May, declined by more than the average seaSonal amount in June, and were in about the same volume as in the corresponding month of 1938. On a daily average ~:sis sales during June were 15 per cent smaller than in lV1ay; whereas, the average decline is only 11 per cent. Reflecting the larger-than-average May to June decline, this bank's seasonally adjusted index of department store sales declined from 104..7 per cent' of the 1923-1925 average in May to 101 per cent in June. Although the latter figure is the sallle as that for June, 1938, it is the lowest recorded for any onth dUring the current year. The distribution of merchanlse during the first half of 1939 was about 1 per cent larger tha~ in the corresponding period last year, indicating that tl~slUess ,for the half-year w,as mai~tai~ed at a higher level an dunng any correspondmg penod m ten years, J InVentories at reporting firms were reduced seasonally in une, and at the close of the month they were in about the ~atne volume as a year ago. The rate of stock turnover thus ar in 1939 has been at a record high level. Collections on 1itstanding accounts showed the usual seasonal decline from ay to June, and were at about the same rate as a year ago. The demand for merchandise at wholesale in this district ~vas Wen sustained during June, aggregate sales of all report~ng firms being only slightly smaller. than in the prece~ing onth . The decline from May to June lS account~d for ~hle~y 1.Y a sharp reduction in sales at drug firms whlch mamtam bquo~' departments, but decreases in sales were also reported ~ dIstributors of dry goods and of tobacco, an~ tobacco h~oduc~s. On the other hand, sales i~ six reportl~g hn.es were 19hel'm June than in May. Sales m all reportmg hnes ex~ept .drugs were larger Lha~l in J un.e, 1938, the increas~s ngIng from 3.2 per cent m grocenes to 32.4. per cent m e ectl'ical goods. During the first six months of 1939 the volul1le of merchandise dish'ibution through wholesale chanels exceeded that in the corresponding per~od of 1938 Y about 4. per cent. Farm machinery and equlpment fixms i BANK RESERVE JUIY 30 recorded a decline in sales for the six-month period, but business in this line of trade has shown considerable improvement during the past two months. The dollar value of inventories at reporting firms showed little change from May to June, but at the close of the latter month stocks were in excess of those a year earlier for the first time since November, 1937. Collections at reporting firms continued at a higher rate than a year ago. The Bureau of Business Research of the University of Texas reported that employment in Texas increased further by 0.6 per cent in June and was 2.9 per cent larger than a year earlier. Payrolls showed a rise of 0.5 per cent from May to June and exceeded those in June last year by 1.9 per cent. Commercial failures in this district increased moderately from May to June and the total for the latter month was double Lhat in June last year. Liabilities of defaulting firms, although registering a further substantial decline from the preceding month, were considerably l.arger th~n i~ June, 1938. DUll & Bradstreet reported 30 msolvencles m June this year, having an indebtedness of $265,000. During the first half of 1939 the number and liabilities of commercial failures were the largest for any similar period in several years, and they exceeded those in the corresponding six months of 1938 by 44 and 54 per cent, respectively. AGRICULTURE Heavy rains in most sections of Texas during June and the first half of July were very beneficial to, growing crops, and agricultural prospects showed a further improvement. The moisture supply in most sections of Texas is now generally adequate for current needs, but there are some localities where additional precipitation is needed to overcome the accumulated moisture deficiency. In much of New Mexico and in southeastern Arizona the shortage in rainfall and high temperatures have resulted in drouth conditions and general rains are urgently needed for ranges and crops. According to the Department of Agriculture, the area of cotton in cultivation in Texas on July 1 was 8,980,000 acres. This figure represents a decline of 2 per cent from that of a year ago, and is less than two-thirds the average acreage for the 10-year period 1928-1937. If the acreage abandonment this year approximates the average of 3.1 per cent, the area harvesLed will be the smallest since 1905. Cotton acreage in cultivation on July 1 was 1 per cent larger than a year ago LOANS AND INVESTMENTS OF REPORTING MEMBER BANKS ""l.UON5 or ELEVENTH f'EDEnAl. RE:.£RVE DI STRICT we .:at Y rlCl.f\ts DOLLARS '00 I.ClLLO 3>0 h i 300 i\ frrlitr roTAL LOANS 2>0 200 cotvw£.RCIAL . INOUSTRIAL • 1 >0 b 1 00 Vi ---- AGAICULTURAL LOAN ll-H-H JfMAMJ,JA'OUO ,--' 1--1 u s. COY". ~T OBLIGATIONS _'..I'~ 0 --:--"j-~,-~--!.----y ~I-' 1'~38--" r ... • ... J J • • 200 1 >0 LL J 300 .,1-- . INVESTMENTS ~mtt(~ 1 ~nl1nnt TOTAL o N .... 0 This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 1 00 MONTHLY BUSINESS REVIEW 2 The Texas rice crop made a poor start but it has shown a in Louisiana; 2 per cent in New Mexico; 7 per cent in Oklaremarkable improvement since the rains, and the prospective homa; but it was 11 per cent smaller in Arizona_ The estimate for the United States was placed at 24,943,000 acres, per acre yield is as high as that last year. Estimated producwhich is fractionally smaller than a year ago and the lowest tion is slightly larger than a year ago due to the increased in 40 years. Weather conditions during the past several weeks acreage. The acreage planted to peanuts this year is larger have been generally favorable for the growth and cultiva- than in 1938 and the condition of the crop on July 1 was tion of cotton in this district with the result that the crop slightly better than a year ago. made good progress in most sections. Although the crop is Livestock ranges in Texas improved further in June, but later than usual and the plants are in all stages of growth, drouth conditions continued over much of the Edwards Plathe major portion of the crop is fruiting rapidly. Picking teau, west and south-central sections of the State. Toward the has become general in extreme south Texas. Insect infesta- middle of July heavy rains fell over most of the drouth area tion is increasing in Texas, but reports indicate that the dam- and range prospects are greatly improved. Ranges dete· age to the crop thus far has been generally light. riorated sharply in New Mexico and southeastern Arizona The Department of Agriculture estimated the production due to the high temperatures and lack of ~oisture, and conof wheat in Texas at 29,390,000 bushels on July 1 which is ditions in some portions of these states are becoming acul e. about 1,500,000 bushels smaller than the estimate a month Although livestock have held up fairly well in these states, earlier and compares with a harvest of 35,046,000 bushels they are beginning to show the effects of poor ranges. In in 1938. The decrease in prospective production during June Texas, cattle made good gains except in the dry areas, and resulted from rains in the heavy producing section of north- prospects are now favorable for a good supply of grass-f~t west Texas which delayed the harvest and did considerable cattle but the movement will be later than usual. The condl' damage in some areas. Winter wheat production in New tion of sheep declined and lambs have not made satisfactory Mexico is substantially larger than a year ago, but a smaller growth. Since the July rains, however, prospects are much crop of spring wheat is in prospect. The indicated pro.duction improved. of oats in this district is 11 per cent smaller than m 1938 The demand for wool in this district slackened somewhat due chiefly to the prolonged drouth during the spring months in June, following active sales at advancing prices in May, that caused an almost complete crop failure in some sections. and prices apparently declined somewhat from the level atExceptionally heavy yields, however, were obtained in some tained early in the month. Trade reports indicate that buY' parts of central and north Texas. ing became more active around the middle of July and The production of corn in Texas is forecast at 82,790,000 prices again strengthened. Cash farm income from the sale of principal farm prod· bushels, which is about 7,000,000 bushels larger than last year's harvest. The increased production is due to the larger ucts in the five states attached to the Eleventh District in' acreage and the higher average yield. Although the crop is creased further by 6 per cent from April to May, but the very poor in south Texas on account of the drouth during total for the latter month was 14 per cent smaller than in the growing season, the condition of the crop is above the May, 1938. The gain over the preceding month was due to II average in most other sections and some areas report that sharp increase in receipts from the sale of livestock and live' yields are expected to be unusually large. The prospective stock products, which more than offset a 27 per cent decrease production in Louisiana, although smaller than in 1938, is in income from crop marketings. Despite the decline from 11 higher than the average. The indicated production of tame year ago in receipts from the sale of farm products, agg re· hay in this district is slightly larger than in 1938 and con- gate income, including Government benefit payments, eJ(:' ceeded that in May, 1938, by 11 per cent. During the month, siderably above the 10-year average production. Government payments to farmers amounted to $23,786,000, WHOLESALE AND RETAIL TRADE STATISTICS which is the largest amount paid out in any month since the _ - - - Percent.ge ch.nge in: ,Ratio June colleotiolls Net sales Stocks" to .ooounts outst.nd· fall of 1933, and is more than double that in May last year. r--------v-- 1939 from ,r,- . .ing. June .1- - - During the first five months of 1939 income from the sale r June, 1939 from Jan. 1 to June, . ..: Junc, M.y, June 30, 1939 June, May, Instalof farm products was one-fifth smaller than in that period Retail trade: 1938 1939 frem 1938 1938 1939 Regular ment Department stores: of 1938, but total receipts including Government payments 13 .8 38.9 Total 11th Dist .. .4 - 18.2 +.9 +.4 - 6.7 16.4 37.3 Dallas .......... - 1.3 -21.6 -.3 + 2.4 - 10 .2 were only 7 per cent smaller. 10.4 35.8 Fort Worth ...... + 5.2 -14.4 + 2.2 - 1.6 Houston ......... - 1.4 -11 .8 + 1.7 + 5.3 San Antonio ..... - 4.8 -24.1 -.2 - 4.4 Other cities ...... + 1.9 -15.2 + 2.7 -.8 Independent stores:t ArIZona ......... + 6.0 - 5.4 .1 -10 .0 Oklahoma ....... New Mexico ..... + 5.6 + .3 Telas ........... + 8.1 - 9.1 Whol esale trade:t Maehinery. CQp't & su pplies (elcept electric.I) ....... +14.9 +7.4 - 11 .2 + 7.0 Dry goods ........ + 5.4 - 3.9 + 4.7 + .4 Groceries ......... + 3.2 + 4.5 + 1.7 - 1.5 .6 -22.2 + 1.9 Drugs . ........... + 2.3 +15.2 Hardware ........ +12.6 +.2 Eleotrical Supplies. +32.4 + 6.5 Tobaeoo&prod's .. + 3.4 - 2.6 +'4:8 Surgical eqp·t..... +22.2 +10 .0 ...... Automotivesuppl' +30.0 +18.2 +10.4 - 4 .8 .Stooks at elose of month. tCompiled by United States - 3.6 -12.0 + 6.3 - 7.2 39.2 43.7 40.3 12.3 Crop 'Estimated Jnly 1, 1939 29,390 Winter wheat. . . .. . . ... . . . . . .. . . . .. Bushels Corn ...... , .... . .. . .. .. .. .. .. ..... Bushels 82.790 Oats.... . .. .. .. .. . ........ . .. .. ... Bushels 32.660 +2.9 - 5.1 + 5.3 .9 69.4 39 .2 89.3 67 .6 62 .7 86:4 .. .... 58.0 - 7.8 64.5 Department of Commeree. Q Total Eleventh Dist.. D.llas ....... .. .... . Fort Worth .......... Houston ............ San Antonio.. ....... Salee-June 1939 1938 101. 0 101.1 101.7 102 .4 114.1 108.1 90.2 91.7 79.9 83.6 Sales-June 1939 1938 89.9 90.0 88.5 89.1 107.3 101.6 95.6 97.2 81.9 78.3 Unit ~i~!~~ :::::::::::::::::::::::::::: R~:~~l: 1~:~~~ Tame hay. . . . . . . . . . .. . .... . . . . . . . . Tons 1,024 INDEXES OF DEPARTMENT STORE SALES AND STOCKS (1923-25 avernge l00) With seasonal adjustment Without seasonal adjustment r CROP PRODUCTION (In thousands of units) Texas ii:1i --- Stoeke-June 1939 1938 60 .2 59.7 62.1 60.4 69.8 59.8 42.6 38.6 51.3 63.1 Eleventh Dis~ &timated 1938 July 1, 1939 35.046 30.624 75.648 97.640 36.920 35.367 &~~~ 1,012 u:m; 10S8 36.020 91 ,6 77 39,6~~. li:~Jt 1,430 , 18 Irish potatoes..... ..... ... .. ...... Bushels 2,606 2.950 3.380 a'~601 Sweet potatoes. . . . . . . . . . . . . . . . . . . .. Bushels 4,200 4,350 13,552t 12. d .Texas, Oklahoma, New Mexico and Arizona. tToxas only. tTexas. OklahomA ~u Louisiana. Other data for Eleventh Distriot derived from estimates by stutes. SOURCE: United States Department of Agriculture. CASH FARM INCOME FROM SALE OF PnINClPAL FARM PRODUCTS A~V GOVERNM ENT BENEFIT PA YMEN'I'S (In thousands of doll.rs) , - - - - May, 1939---.. Reoeipts from Govern- , Total receipts ./' , - - - - - - _ , ment May May Jan. 1 to May 31 Crops Livestoek" p.yments 1939 1938 1939 193 8 Arizona ....... $ 378 S 1,790 ' ..537 $ 2,705 $ 3,214 $ 18,229 $ 22'~!: Louisiana.... . . 3,270 2.051 3,368 8,680 5,669 30.506 31'91 9 New Mexico... 116 1,876 421 2.413 2,039 10.540 11'792 Okl.homa. . . . . 1.835 7,621 5.407 14,863 12,271 64.366 53, 618 Telas.... .. . .. 3,659 20,695 14,053 38,407 37.201 143.111 ~ Tot.l ... .. S 9,258 $34,033 $23 .786 $67.077 560,394 ·Includes reeeipts from tho sale of livestock and Iivestook product•. SOURCE: United States Department of Agriculture. S256.752 $275,Jo8 \' MONTHLY BUSINESS REVIEW 8 FINANCE able through Federal Housing Administration insured loans. Total earning assets of the Federal Reserve Bank of Dallas Thus far in 1939 non-residential building has averaged ~eclined $6,181,000 between June 15 and July 15, after hav- about 6 per cent smaller than in the comparable period of lng remained comparatively stable during the preceding two 1938, reflecting principally a reduction in awards for commonths. The decrease during the past month reflected chiefly mercial and manufacturing buildings. The volume of Public the periodic reallocation of the System's holdings of United Works construction has been maintained at about last year's States Government securities among the several Federal Re- level. Although the value of contracts awarded for public serve banks. Member bank borrowings from this bank in- utility construction during the six-month period was small creased moderately during the period, but industrial ad- in relation to that for other types of building, it was about CONDITION OF THE FRDERAL RF;SIl,RVE BANK vances showed a further slight decline. Daily average excess (In thou.ands of dollars) reserves of member banks in this district, which had shown July 15, July 15, June 15, 1030 1038 1930 an increase in May and the first half of June, declined someTotnl onsu reserves. . .... ..... . ..... . .. . ......... . $230,650 $200,651 $236,818 what in the subsequent two weeks, averaging about 4,7 per Discounts for member banks.. . . . . . . .. . . •.. . ..•. . .. 846 323 305 discollnted ........ ....... .. .... . . . .. 50 None None ?ent of required reserves. Federal Reserve notes of this bank Other bills adv"noes .... .. .. .............. ........... Industrilll . 667 814 591 16 16 16 1n actual circulation increased slightly during the month Bills bought in tho open mnrket... . . .. . . . . . ... . .. .. United States Government seourities. . . . . .. . . .• .. .. . 06,025 84,063 102.282 ended July 15, and on that date the total of $76,595,000 1'otnl enrning nssets ............... . . ..... .. ...... 07,013 86.110 103,104 Membor bonk reserve deposits...... ..... .......... 185.032 171,607 187,742 exceeded that of a year ago by about $1,000,000. Federal Reserve notes in actual oiroulation. . . . . . . . . . 76,505 75,620 75,840 None 91 None . FOllowing a slight decline in May, loans at weekly report- Commitments to make industrial advances. . . .. . .... CONDITION STA'1'IS'1'ICS OF MEMBER BANKS IN LEADING CITIES lng member banks in leading cities of the Eleventh District (In thousands uC dollars) July 12, July 13, June 14. ~urned upward in June and continued to expand in the first 1038 1030 1030 a1£ of July. The increase of $3,4,00,000 in loans during the Total loans nnd investments ... . . ............ . .... . 5513,540 $480,388 5511.524 256,440 225,015 253.051 Total loan............. ..... ... . ............ .. .. . ~our weeks ended July 12 was larger than in the correspond165,476 160,856 142,081 Commercinl, industrinl nnd agriculturallonns .. ... . 1,562 1,652 1,160 Open market paper .... . ...... .... ...... .. . . ... . ln~ four weeks of 1938, with the result that the margin of 2.723 5,125 4.400 Loons to bruke", and deniers in secllrities ......... . 13,725 13,582 raln over last year widened further during the period. Total Other loans Cor purcbnslDg or carryiug seourities ... . 14,837 21,061 20,633 Hcnl estate lonns ...................... . ....... . 20,953 oans on July 12 aggregated $256,4,4,9,000, which was $31,445 346 302 Lonn8 to banks ...... . . .... .. . ................. . 44,827 43,846 45,833 All other loal18.. . ..................... . ...... . . :00,000 larger than a year ago and the highest for any report United States Government direct obligations .. . ... . . . 158,185 172,783 158,064 31,323 41,765 $ ate in recent years. Investments of these banks declined Obligatinns fully guaranteed by United States Govt .. 44,078 61,267 57,744 54.828 Otherseouri ties .............. . .................. . . 1,380,000 during the four weeks and on July 12 their hold- Reserves with Federal Reserve Bank .............. . 121,714 120,656 102,007 251,046 218,931 251.265 Bnlances with domestio banks . ....... ... . . ........ . lngs were only $1,700,000 larger than a year ago. 458,737 406,069 451,843 Demand deJlOSits-adj usted" .. ................... . 136,401 135,207 130.304 Time depoSIts .... . . . ....... . . ....... .... ........ . £ Deposits at reporting banks increased further during the United Stotes Government deposits .. . .......... .. •. 31,115 25,016 33,480 .. OUr weeks ended July 12 and were at a new high level at Interbnnk deposits .... . ................ .... ... .. .... 21~~~~ 10~~~! 21~~~~ Borrowings from Federal Reserve Bank .•. . ..... th~ end of the period. Increases during the four weeks in "Inolude.. all demand deposits other thnn interbank and Gnited States Government, les. idJusted demand and interbank deposits were responsible cllsh itoms reported as 011 ha.nd or in prooess of colleotion . GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS or a net expansion of $4,885,000 over the previous high (Average nf doily figures- in thousands of dollnrs) Combined totnl Reserve city banles Country banks recorded at the middle of June. On July 12 total deposits v exceeded those of a year ago by $86,862,000. Reserves of Gross Gross Gross demand Time demnnd Time demand Timo these banks at the Federal Reserve Bank and their balances June, 1037 ...... . ... $1,037,335 $201,800 $573,110 $110,625 $464,225 $ 91,175 With other domestic commercial banks also rose during the Juno, 472,263 00,046 1038 .... . .. . ... 1,077,586 220,001 605,323 121,045 518, 183 . . . .. .. . ... 674,077 beriod, reaching all-time high levels. Balances of reporting Fcbruary, 1930 ........... 1,193,160 225,328 072.005 124,075 508,919 100,353 Maroil, l OBO 1,18 1,014 228,585 128,122 100,4 63 605,750 ... .. anks with other domestic commercial banks, which amount- April, ·1030 ..... .. ...... 1,178,066 220,607 672,310 127,813 502,356 101,884 102,581 May, 1030 .. .. 1,182,097 23 1,079 680,641 128,498 ~d to approximately $252,000,000 011 July 12, constituted June, 1030 ... .... . ... 1,193,874 232,582 600,578 129,282 503,206 103,300 DEBITS TO INDIVIDUAL ACCOUNTS o per cent of total deposits. (In thousands oC dollnrs) May June June Potg. chango Debits to individual accounts at banks in eighteen cities ~~~~. ~~:t"e 1039 1938 over year 1939 of the Eleventh District have shown counter-to-seasonal in- Abilene ................ . $ 8,158 $ 7.934 + 2 .8 5 8,350 - 2.4 34.070 31,872 + 7 .6 - 2.0 creases during the past two months, and in each of the Austin ....... . ....... . . . 34.205 28,343 - 2.7 22,713 22.456 + 1.1 Beaumont ... . . . .. ...... . ~onths of May and June debits exceeded those in the respec- Corsioann. . .... . ....... . . 2,826 2,772 + I. 0 2,770 + 2.0 230,726 227,403 + 8.0 245,560 Dollns ................. . + 6.1 hve months of 1938 by about 6 per cent. These increases EI PIISO ..... .... . ...... . 25,521 27,767 24,324 + 4.0 - 8.1 77,523 84.088 87,157 - 3.5 Fort Worth .... : . ..... .. + 8.5 ~ere the largest recorded for a year-to-year comparison since Galveston .............. .. 22.541 25,794 - 12.6 21.720 + 3.7 4~ovember, 1937. . 208,470 220,186 198,222 +11.1 HOllston .. . . .......... .. + 5 .6 8.810 0,567 8,960 + 6.3 Port Arthur .... . . ...... . + 8.5 4,215 INDUSTRY 4,409 3,088 + 12.8 + 6.7 !toswell ............... .. 74,140 75,392 60,817 + 8.0 + 1.7 San Antonio ............ . h BUilding activity in the Eleventh District, as measured by Shreveport ... . ......... . 41,868 41,076 41,470 +.0 .3 6,481 6,340 7,023 - 9.7 - 2.2 1'exnrknnn" . ... .. ..... .. . :h e value of construction contracts awarded, declined fur- 1'ucsoo ..... ...... ...... . 11,546 -11.2 11,810' - 2 .3 12,006 11,296 12,221 11,418 + 7 .0 + 8.2 . er by 15 per cent in June to the lowest level for any month 11,043 +12.8 12,530 ~~~~::: :::: :: :::: :::::: 13,474 + 7.5 ~lnce last September. Nevertheless, the value of awards was Wichita Fulls .......... . . 15,065 14,478 16,680 - 0 .7 + 4.1 --- --- + 5.5 $822,597 + 4.0 per cent greater than in the corresponding month last year. Total........... S855,860 $811,100 "Inoludes the figures oC two banks in Texarknna, Arkansns, locnted in tbe Eighlh District. ~On-residential building, which had declined considerably SAVINGS DEPOSITS 1n the preceding two months, registered a substantial increase June 30, 1030 Per~entnge obango in oVer both comparative months, and although residential con~--~ aavlngs depOSits from Numbcr oC Number of Amount of ,-------~ strUction showed a further decrease of 26 per cent from the reporting savings sovings June 30, May 31, banks dopositors deposits 1938 1039 ~eceding month, the June volume was 8 per cent higher 3 10.046 $ 3,024,002 + 3.4 +.7 Bcnumoot . ............. . an that a, year ago. 8 80,521 27,616,488 + 5.3 + 1.0 Dnllns ....... .... ...... . 2 17,049 8,351,010 + 2.2 + 1.7 .... ...... During the first half of 1939, the value of construction gl Pnao ................ .. 3 36,066 14,316,277 + 5 .5 + 2.2 Fort Worth .. 4 18,002 12,106,066 + 4.7 +.5 . C?ntracts awarded in this district was larger than in any Gnlveston ..... . . ... .... ... 10 74,731 30,414,029 + 4.6 + 1.2 Houston .............. 2 5,884 2,923,282 +11.4 + 1.7 SllDilar period since 1931, and exceeded that in the cor- Port Arthur ............ . 5 24,350 19,124,471 + 6 .2 +.6 Snn Antonio .......... . . . responding six months of 1938 by 20 per cent. The latter Shreveport ............ .. 3 25,375 11,586,628 + I. 7 + 1.3 3 8,356 4,630,246 - 4.8 +.3 ....... ........ ~a1n Was due chiefly to a sharp increase in residential build- Waco .. .Falls .......... ... 3 7,570 3,078,888 + 8.6 + 1.6 Wiohitn g, Which was stimulated by reduced financing costs, small All otber ............... . tiO 00,408 30,848,427 + 2.8 +.8 115 378,057 $169,321,623 + 4.2 + 1.1 OWn payments, and low monthly instalments made availTotal. ......... . f MONTHLY BUSINESS REVIEW 4 two and one-half times that in the first half of 1938, and responding date in 1938 for the first time this year. Invenrepresented chiefly awards for electric light and power proj- tories of crude oil on July 1 were about 3 per cent below ects. Privately-financed construction in Texas during the the 1939 peak, reached on May 6, and were 7 per cent first half of 1939 was 13 per cent greater than in that period smaller than a year ago. Activity at cotton textile mills in the United States delast year and publicly-financed work increased 22 per cent. The valuation of building permits issued at fifteen princi- clined by a smaller amount than is usual at this season, and pal cities in this district declined in June and was smaller than on a seasonally adjusted basis, was at the highest level since in any other month of the current year. Although the total December, 1938. There were 578,000 bales of cotton procwas 14 per cent smaller than in June, 1938, two-thirds of essed at domestic mills during June as against 605,000 bales the reporting cities showed substantial increases over a year in May, and 44.3,000 bales in June, 1938. During the first ago. The decrease from June last year was due chiefly to a eleven months of the current season cotton consumption sharp decline in the value of permits issued at Houston, exceeded that in the corresponding period last season by 20 Texas. During the first six months of 1939 the value of per cent. Mill sales of cotton goods, which had increased permits issued was 13 per cent greater than in that period of sharply in the latter part of May, were apparently well sustained during June and the first half of July. According to 1938. Crude oil production in both the Eleventh District and trade reports, mill sales of cotton goods during June were the United States declined moderately during June, reflect- greatly in excess of production and the ratio of unfilled ina chiefly a decrease in output at Texas fields resulting orders to production at the end of the month was the highest fr~m a reduction in production allowables. Notwithstanding in several months. Mill stocks of raw cotton were reduced the decline from May to June, production continued at a by considerably more than the average amount in June, and substantially higher level than in June last year when a at the close of the month were 28 per cent less than a year drastic curtailment program was in effect. Under the terms earlier. At the end of June, stocks of cotton held by mills of the 90-day proration order issued by the Texas Railroad totaled 1,021,000 bales and there were 11,944.,000 bales in Commission late in June, the basic production allowable for public storage and compresses. The volume of "free cotton" the State during July was increased 54,,000 barrels over that is small, however, as the amount of cotton in Government for June and further adjustments in some fields have been loan stocks exceeds 11,000,000 bales. Exports of cotton fromi the United States declined further made since that time. In consequence, daily average production during the first half of July was 2 per cent higher than in June to the exceptionally low level of 113,600 bales the June average, but was 6 per cent less than the demand which compares with 142,600 bales in May, and 175,900 as estimated by the United States Bureau of Mines. The bales in June last year. Shipments of cotton to foreign counrate of drilling activity in the Eleventh District showed little tries during the first eleven months of the current season change from May to June, and continued about one-fourth aggregated 0111y 3,220,000 bales, which is 40 per cent smaller than in the corresponding period of the preceding season smaller than a year ago. and less than one-half of average exports for that period Crude oil runs ,to refinery stills in the United States, which have shown a sharp upward trend since February this year, during the past ten seasons. Following the increase in April and May, raw cotton reached an all-time high level in June and exceeded the average in that month last year by about 12 per cent. Al- prices fluctuated within narrow limits during June and the though estimated consumption of gasoline during June was first half of July. Withdrawals of cotton from Government also at an all-time high level and somewhat in excess of loan stocks continued in substantial volume. CRUDE OIL PRODUOTION production, withdrawals of gasoline from storage continued (Barrels) much smaller than at this season a yem: ago. During the June, 1039 lucrenso or decrense in doily ------,_ average production rrom second quarter of 1939, gasoline inventories were reduced r-Daily avg. , - - - - - - - - - Total at an average rate of about 4,75,000 barrels weekly, which production June, 1938 May, 1930 production 153,880 + 20,630 - 2, J14 was only about one-half the rate in that period last year. North ToxllS .. . .. . .......... . 4,616,400 248,640 + 40,106 + 046 7,450,200 West Texas .. . ........... . . . . 472,185 + 17,410 -37,035 On July 1 stocks of gasoline exceeded those on the cor- East Texas ................. . 14,165,550 VALUE OF OONSTRUOTION OONTRAOTS AWARDED (In tbousands of dollars) Jnnullry 1 to June 30 .June Juno May 1939 1938 1939 1038 1939 97.128 80,961 Eleventb District-total.. . 13.596 12,826 16,977 40,64 1 27,754 R.esidcntial. . . . . . . . . . . . 6,946 6,607 8,002 56,487 53,207 All otber..... .. . ...... 7,661 7,319 7,975 1,699,364 1,294,272 United States·-total. . .. . 288,316 261,006 308,487 644,527 399,038 ll.esidential. .. .. .. .. .. . 111,896 85,682 133,818 1,054,837 895,234 All other. . . . . .. . . ... . . 176,420 166,324 174,669 .37 states east of tbe Hooky Mountains. sounOE: F. W. Dodge Oorporntion. DUILDING PERMITS Percentage Percentage chango Jan. 1 to Juno30, 1939 oban~o valuation from ,June, 1939 valuation yo v r from 1938 Vnluation No. Valuation June,1938 May,1939 No. -35.9 154 $ 336,440 -20. 0 24 $ 39,014 +37.1 Abilene ........ +40.5 -47.2 394 1,657,786 222,360 +46 .3 56 Amarillo ........ +50.0 1,462 4,608,787 - 1.0 631,657 +61.8 Austin ........ . 248 724,461 + 6.6 800 + 4.3 128,627 +18. 1 155 Deaumont ...... +67.3 911 2,859,248 +70.7 581,065 +70.2 0';.l£us Ohristi .. 150 +20.9 3,814 7,315,670 +20.4 620 1,193,581 +24.6 D tIS· . .. ..... 1,020,210 + 40 .0 607 + la.5 166,755 - 9.6 EI PtlSo .. ...... 136 + 3.6 1,490 3,297,952 - 12 .0 468,359 - 24.5 Fort Wortb ..... 259 -39.6 800,778 852 +13.6 151,742 +76.3 132 Galveston ...... + 5 .5 3,040 14,548,295 - 13 .8 2,034,800 -42.6 520 Houston ...... .. 530,159 -38.1 741 +55.8 116,722 +44.8 132 Port Arthur .... - 7.1 1,552 2,516,801 + 9.5 421,198 -57.4 Son Antonio .... 336 - 2.5 048 3,071,142 -60 .6 387,396 +07.7 Shreveport ..... 145 953,591 +86.4 392 -26.6 127,517 +81.9 66 Waco .......... 473,597 +21.7 249 -40 .2 69,214 -33.3 49 Wichita Falls ... ------ Total .. .. 3,037 $6,740,806 - 14 .0 • Inoludes Highland Park and University Park. 9.7 17,505 $44,514,916 +12 .5 South Tcxas ....... . .... . ... . Toxas Ooastal. ......... . . . .. . Total Toxas .... ...... . New Mexico ............. . . . . North Louisiana .. .. . ........ . 6,768,900 6,461,550 --39,471,600 3,234,150 2,195,850 225,630 215,385 + 20,202 + 27,307 --1,315,720 --+ 125,835 107,805 73,105 + 17,087 5,780 --- --+137,142 Total District......... . 44,901,600 1,496,720 BOunOE: The Oil Weekly, Houston, Texas. - - 17,420 - 8,802 -64,785 + 1,005 - 1,16 1 - 64,041 OONSUMPTION, STOOI{S AND EXPOHTS OF OOTTON (Dales) August 1 to Junc 30 May June Juno This setlSon Last SOtlSOD 1039 1939 1038 Oonsumption at: 107,582 113,278 11,182 Texas mills. . . . . . . . . . . . 10,355 10,248 5,299,526 6,333,841 605,353 578,448 443,043 United States mills. . . . . U.S. stocks-cnd of month: ....... ' In cQllsuming estab'mts . 1,021,236 1,175,290 1,411,988 Publio stg. &< compresses. 11,943,683 9,725,704 12,369,578 Ex~orts from U. S. to: 393,555 1,621,1~~ 9,853 12,822 nitod Kingdom .. ... . . 21,041 335,131 711,4 6 3,234 5,453 7,873 261,030 9,253 9,222 483,1~2 19,448 044,0 5 306,636 Gcrmany ... . ... . ..... . 14,575 20,822 16,921 697,146 Otber Europo ... . ..... . 17,816 805,0~8 20,330 57,879 620,0 845,523 40,500 30,286 525,7 61 i~r~~hcr :co;;rit~i';'·.·. '. : :: 28,000 30,903 381,288 21,830 33,338 Total exports...... 113,634 175,878 142,577 3,220,309 5,402,700 r{~~~~: :::::::: :::::: : --- RECEIPTS, EXPORTS, AND STOOKS OF OOTTON AT THE POR'rS OF HOUS'roN AND GALVESTON-(Bales) JUll'e Juno May August 1 to Juno 30 1939 1038 1939 This senson Last sensoD Receillts ....... . . . .. . 66,500 52,335 35,967 2,045,971 3,729,444 Exports........ ........ . 81,558 144,410 110,oJ5 2212,902 2,871,54 8 Btocks, end of month..... 1,023,783 1,338,944 1,041,111' ..... " . MONTHLY BUSINESS REVIEW August 1, 1939 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION 'til"." ,,",",,' 14() 140 I 30 120 eo '0 I 20 /VV\ 110 f \ \ ~ I lL'\ V I 10 'y./ / -v 100 / V 90 so '0 60 19:.\4 19)5 19315 1937 193t t9Mt ~ndex of physicnl volume of production, adjusted or seasonal variation, 1923-1925 average 100, By months, January, 1984, to June, 1939. = FACTORY EMPLOYMENT 120 """'''' 110 00 I~ /" V 110 JV'\ 100 90 IV so Output of factories and mines increased in June, reflecting chiefly sharp expansion at steel mills and bituminous coal mines. In the first half of July, industrial activity was gen· erally maintained. PRODUCTION The Board's seasonally adjusted index of industrial production advanced to 97 in June as compared with 92 in April and May. At steel mills output increased from a rate of 45 per cent of capacity in the third week of May to 54 at the end of June and to 56 in the third week of July. Automobile production, which had declined in May, showed some increase in June when a decline is customary. In the first three weeks of July automobile output was at a lower rate, reflecting in part ewtailment preparatory to the change·over to new models. Plate glass production rose considerably in June. Output of lumber, which usually shows some increase over May, was unchanged. Among non·durable goods industries woolen mills showed in· creased activity in June, and activity at cotton and silk mills was maintained though deelines are usual at this season. Meat-packing was lower than in May. Mineral production increased considerably in June reflecting a sharp rise in output at bituminous coal mines which had been closed during April and the first half of May. Produc· tion of anthracite declined from May to June and there was some reduction in output of petroleum. Value of consu'uction contracts aW81'ded declined in June, according to F. W. Dodge Corporation figw'es, reflecting chiefly a greater than seasonal decrease in private residential building. Contracts awarded for publie residential construction, principally for United States Housing Authority projects, were maintained at the advanced level reached in May, while public construction other than residential showed a small decline. EMPLOYMENT '" 60 19.s~ 't!4 19315 '937 1938 1939 ~n<l~x of number employed, adjusted for seasonal = U"ntion, 1928-1925 uverage 100. By months, January, 1984, to June, 1989. DISTRIBUTION FREIGHT-CAR LOADINGS 10 """'" I 100 00 '- 90 00 ~ rv,.;- .r lA so "\ V /' 'v TO <0 40 t935 1936 1931 1938 1G39 }~~ex "f total 10lldlngs of revenue freight, Ild_ ~odo for sellsonlll variation, 1928-1926 average . By months, January, 1984, to June, 1939. MEMBER BANKS IN 101 LEADING CITIES !>Cu.", '0 ....."lOI'tt O#OOI.\. ~........ , h..~ us••,- '"j ........" , OOVT O84...IO-'TIONS ~ .o, 12 '- Freight-c81' loadings increased more than seasonally in June reflecting a sharp rise in sltipments of coal and smaller increases in shipments of grain and miscellaneous freight. 10 Prices of hides, silk, steel scrap, copper, and some other industrial materials advanced from the middle of June to the third week of July, while some farm products, particularly grain, declined . Prices of most other commodities showed little change. AGRICULTURE A total wheat erop· of 716,655,000 bushels was indicated on the basis of July 1 conditions. According to the Department of Agriculture, this would be much smaller than last year's large crop and somewhat below the 1928-1937 average. Cotton acreage in cultivation was estimated to be about the same as last year but one·third less than the 10·year average. A record tobacco crop is indicated. Most other major crops are expected to approximate last year's harvests and are generally larger than average. V BANK CREDIT Total loans and investments of member banks in ]01 leading cities continued to increase during the four weeks ending July 12, reflectin g largely purchases of United States Govern· ment seeurities. Commereialloans, which had shown liltle change in recent months, increased sligh.tly. Deposits and reserves at th ese banks rose to new high levels in July, refleeting continued gold imports and Treasury disbursements from its balances at the Reserve banks. l~~s~ .,.. Department store sales showed a less than seasonal decline from May to June and the Board's adjusted index advanced from 85 to 86, which compares with. a level of 88 during the first four months of the year. Sales at variety stores and by mail-order houses showed Ii ttle change. COMMODITY PRICES '" '9)4 Factory employment and payrolls increased somewhat from the middle of May to the middle of June according to reports from a number of important industrial states. There was a sharp expansion in employment at bituminous coal mines following the reopening of the mines in the middle of May, and the number employed on the railroads increased more than seasonally from May to June. OfHr:II $tCUftITlts L04NS TO UAC)(LA$' AHO DelLER' .~ 1935 Wed 1936 1 937 1938 1939 o lOl re!\()d IlY fil{Ures for reporting member banks in 19U9 ea ing cities, September 6, 1934, to July 12, I\nd' COmmercinl 10ILns, which include industrinl 19:.rgrlcultural lonns, represent, prior to May 19, , so-called "other loans" as then reported. MONEY RATES Priees of United States Government secw'ities, which had deolined somewhat during June, reeovered part. of the loss in July. The 10ngesH erm Treasury bllllcl olli sianding showecl a yield of 2.31 per cent on July 20, as compared with a record low of 2.26 on June 5. Openmarket money rates showed little change.