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MONTHLY BUSINESS REVIEW
of

the

FEDERAL

RES E R VE

BANK of Dallas

~~~~~~===========================================================================================
Volume 25 , NO. 6
Dallas, Texas, August 1, 1940
This cony
is released papersfor pub- J U IY 30
lieacion
In afcerooon
~~~~===============================================================================================
DISTRICT SUMMARY
period of 1939. Inventories at drug and hardware firms were
.Business and industrial activity in the Eleventh District increased considerably in June, and the value of stocks at all
faded to keep pace with the expansion that took place during reporting firms on June 30 was 6 per cent higher than on
June in the nation as a whole. Employment and payrolls in that date last year. Collections continued at a slower rate than
Texas declined from May to June but remained higher than a a year ago.
year earlier. Petroleum production was reduced further in
The data compiled by the Bureau of Business Research of
June, and refinery operations, which showed little change over the University of Texas showed that employment and paythe month, were at a 2 per cent lower rate than in June, 1939. rolls in Texas declined from May to June, but continued
~nsumption of cotton in Texas declined seasonally, but con- higher than a year ago. The increases over June last year were
~lUued at a much higher rate than a year ago. Building activ- 1.1 per cent for employment and 1.6 per cent for payrolls.
Ity, as measured by the value of construction contracts Employment and payrolls in manufacturing industries as a
aWarded, expanded to an all-time peak in June, as a result of whole showed larger gains over a year ago than those for all
aWards for a large national defense project. The demand for types of establishments.
~~rchandise at wholesale and retail trade establishments deThe number of commercial failures in the Eleventh District
c Ined sharply, due in part to seasonal factors, but on a daily during JWle was the smallest for any month thus far this
~erage basis sales closely approximated those of a year ago. year, and liabilities of defaulting firms declined to the lowest
d n t~e whole, conditions in the agricultural and livestock in- level since December, 1938. According to Dun & Bradstreet,
Ustrles showed a further improvement during June, but heavy eighteen firms, with liabrliitie<si totaling $166,000, entered
and frequent rains caused considerable damage to crops in some bankruptcy in June. During the first half of 1940 the numareas.
ber of failures was nearly one-third smaller than in that period
BUSINESS
of 1939, and liabilities, totaling $1,350,000, were with one
h Consumer buying at department stores in principal cities of exception the smallest of any corresponding period for which
t e Eleventh District fell off by considerably more than the data are available.
aV7rage seasonal amount from May to June, and this bank's
AGRICULTURE
a~Justed index of sales declined 3.5 points to 101.5 per cent of
Heavy and frequent rains, which fell over the major portion
t e 1923-1925 average. This figure is about the same as that
of this district during June, were followed by torrential rains
rhcorded for June, 1939, but below that for any other month in some sections at the end of the month that caused widet us far this year. The sharp contraction in department store spread floods and extensive damage to property and crops in
t;ade in this district during June was in contrast with the the affected areas. Crops in most sections of the district made
~:uation in the United States where department store sales rapid growth during June and except in the flooded areas are
lid not show the usual seasonal decline and were substantially now in fair to good condition. The frequent rains, however,
.arger than a year ago. The heavy and frequent rains which interfered with field work and stimulated the growth of grass
Ihterfered with shopping and the subnormal temperatures were and weeds. The July 1 report of the Department of Agricul~ e .principal factors contributing to the smaller volume of ture indicates that prospective production of feed and food
tl?lng in this district. Sales at weekly reporting stores during crops is considerably higher than in 1939 and in a majority of
he first three weeks of July were about 10 per cent above cases the indicated yield is above the 1929-1938 average har\ Ose in that period last year. Distribution of merchandise in vest. Moisture conditions are good in most areas of the district.
According to the Department of Agriculture, the area of
t e Eleventh District during the first six months of 1940
aVferaged 2 per cent higher than in the corresponding period cotton placed in cultivation in the Eleventh District was
o 1939.
expanded in 1940, but continued far below the 1929-1938
Inventories of merchandise at reporting firms decreased average. In Texas there were 8,963,000 acres in cultivation
fUrth .
alI e~ In June, due in part to seasonal factors. On a season- on July 1, which exceeds that of a year ago by 89,000 acres.
f Y adjusted basis, stocks on June 30 were at the lowest level On the basis of average annual abandonment, the acreage
r any month-end since last September, but they were still harvested in Texas this year should exceed that of a year ago
~ OVe those at the end of June last year. The rate of stock by about 2 per cent. In states partially included in this discurnover during the first half of 1940 averaged about 3 per trict, the percentage increase over 1939 in cotton in culti. ent lower than in the corresponding period of 1939, reflectLOANS AND INVESTMENTS OF REPORTING MEMBER BANKS
~ng the larger average stocks carried at department stores this
ELEVENTH FEDERAL
OISTRICT
wtD tsOO
Mn.llOfl CI 00 w...
tONS Of OOUAA.!
aear. Thus far this year collections on open and instalment
i~c~hn~s. Outstanding have been at a slightly higher ra.te than
C : I~ltial six months last year.
.
300
300
re .olncldent with a decline during June in the busmess of
.......
TOTAL LOANS
!r'
TOTAL INVESTMENTS
.r~
III tall trade establishments in this district, the distribution of
II
'
IIIII~~
1;-':.-1
toercrandise through reporting wholesale firms declined sharply
'<;::::::! I
V'~
fro~ eve! 4 per cent below that of a year ago. The contraction
er I May to June, which amounted to 9 per cent, was g:n200
us. GOY'T.
& AGRICULTURAL LOANS
among reporting lines and was due partly to seasonal m- 200
, OBLIGATIONS
~IIIIII
~ ~ OIRECT
I I I
I I .-...
I • • •.. ..
fo enhes. The declihe from a year ago was the first recorded
lQ:...1 , , ' .... I .v-:
tor t at comparison since December, 1938, and was due chiefly
~
eq ~ubstantial declines in the sale of groceries and surgical
, .'....
,I I
1""'tioUlpment. During the first half of 1940 wholesale distribu'''':i-.'.r.'"T'
'00
...
AMJ,JASOND
"'MANJJA$ONO
n averaged 6 per cent higher than in the corresponding 100 ."

b

R£SERVp;

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~

T11

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I~

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...-

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This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

MONTHLY BUSINESS REVIEW

2

vation on July 1 amounted to 3 per cent in Louisiana; 4 per
cent in Oklahoma; 14 per cent in New Mexico; and 20 per
cent in Arizona. The estimate for the United States was placed
at 25,077,000 acres, which is 1.6 per cent higher than a year
ago. The cotton crop in this district made fairly good growth
during June, but in many areas plants are smaller than usual
for this season. Heavy and frequent rains have prevented effective poisoning operations, and insect activity has increased in
nearly all sections of the district. Picking of cotton is under
way in extreme south Texas.
The indicated production of wheat in Texas on July 1 was
fractionally lower than that a: month earlier, despite the fact
that per acre yields are turning out better than earlier expectations. Untimely rainfall during June delayed harvesting
operations in north Texas and damaged uncut as well as
shocked grains. In New Mexico and Oklahoma, the wheat crop
showed a noticeable improvement during June. In the latter
State the estimated production of 54,400,000 bushels on July
1 was 41 per cent greater than the June 1 forecast and 16 per
cent higher than the ten-year average harvest. The prospective production of oats in Texas and in the Eleventh District
is one-fifth greater than in 1939 and about the same as the
ten-year average harvest.
The Texas corn crop made rapid progress during June, and
if the July 1 production forecast of 91,600,000 bushels
materializes, it will be the largest harvest for any year since
1932. With the exception of New Mexico, the estimated production of corn in states partially included in this district is
also considerably higher than in 1939. In the heavy producing
states of Louisiana and Oklahoma increases in production of
10 and 31 per cent, respectively, are indicated as compared
with the 1939 harvests. The prospective production of tame
hay in this district is nearly one-fifth larger than a year ago,
reflecting chiefly an indicated record production in T exas. The
acreage planted to rice in Texas this year was increased considerably and growing conditions have been very favorable.
The July 1 forecast of production was 12 per cent greater
than the 1939 harvest.
Heavy rains during June were also very beneficial to the
livestock industry in the Eleventh District. In Texas, the condition of livestock and their ranges showed a further improvement and on July 1 was at the highest level for that date since
1928. Conditions in New Mexico and Arizona at the beginWHOLESALE AND RETAIL TRADE STATISTICS
~--- Peroentage ohange in: - - - - - Ratio June oolleotions
Net sales
Stooks'
to accounts outstand·
ing June 1
Jan. 1 to ~ June, 1040 from ',,,------~
, June, 1040 from
Instal.
June, May, June 30, 1040 Juno, May,
Regular
ment
10aO
1040
from 1030
1039
1940
Retail trade:
Department stores:
14.3
Total 11th Dist .. - 3.7 - 21. 4
38 .5
+
2.1
+
4.0 - 7.7
15 .7
Dallas ...... .... - 7.8 - 27 .3
.0
- 2.1
+ a. o -10.6 a8
37 .1
12 .3
Fort Worth .. .... - 1.4 - 12.8
+11.1 - a.7
+
2.5
Houston .. .. .. .. . - 7.4 - 21.0
.0
+ .7 + 7.7 - 12.8 37
40 .8
iU
San Antonio .. .. . + 0.5 -21.0
+
6.0
+
2.3 + 4.0
16 .4
Other oities ...... - 5.1 - 18. 0
.1
+ 5.2 - 0.2 39 .5
Independent stores:t
Amona . .. .. .... + 3.3 .. ....
5.9
Oklahoma ....... + 2. 0 - 7.0
+ 1.7
New Mexico.. .. . - 1.4
+ 2.0
Texas .......... . - 3. 1 - 12 .3
+ 2. 0
Wholesale trade:t
Maohinery, eqp't &:
suppli es (exoept
eleotrioal) .. ... .. .2 - 13 .3
31.8
+24 .5
- 7.6 - 7.0
Groceries ... .. .. .. -12.4 - 1. 0
+ 4.8 +12 .a - 1.0 U3.1.0
Drugs .. ........ .. + 3.3 - 25 .1
+ 7.6 + 6.0 +12 .2 64
67 . 1
Hardwaro.... .. .. + .7 - 2.7
+11 .8 + 5.6
3.6
Eleotrioal supplies . .2 -27.8
81.0
+ 5.6
80.1
Tobaooo &: prod's" - 1.0 + 5.1
- 1.1
Surgionl eqp't .. .. . -30.0 - 6.7
58 .3
Automotive supl's. + 3.5 -13 .2
'Stooks at oloso of month. tCompiled by United States Department of Commoree.
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1023-25 avorage ~ l00)
With sensonal adjustment
Without seasonal adjustment

+

+

Total Eleventh Dist . .
Dallas.. .... .... .. ..
Fort Worth .... .... ..
Houston .... .... .. ...
San Antonio .... .. . ..

Sales-June
10aO
1940
101.5 101.0
97.8 101.7
117.9 114 .1
88 .a
00 .2
9a .2
70 .0

Stooks-June
1940
1089
66.8
64.0
66 .1
64 .7
60 .0
62 .9
40 .2
47 .2
58 .2
58 .3

Sales-June
1040
1030
90.3
89 .0
85. 1
88. 5
110.8 107 .a
Oa .6
95 .6
01.3
78.a

Stooks-June
1940
10aO
62 .8
60 .2
63 .5
62. 1
66.4
59. 8
44 .a
42.5
51.2
51.a

ning of July were better than a year ago and the ten-year
average for that date. The outlook for summer grazing 011
ranges is very good in virtually all areas except in portions of
northwest Texas, and in some sections of New Mexico and
southeastern Arizona. These areas are in need of additional
rainfall. As a result of the favorable range conditions, most
cattle available for marketing this fall will be in slaughter
flesh with the result that the movement of cattle to feed lots
is expected to be smaller than usual this fall. According to
the Department of Agriculture, a good local demand for cattle
prevailed in June, but contracting for fall delivery continued
light. Shipments of sheep apparently declined somewhat in
June from the exceptionally high level attained in May, but
reports indicate that a large supply of sheep was available for
shipment in July. Marketings of w'OOl were in substantial volume during the first half of June but declined somewhav during the remainder of the month. A noticeable decline in hog
production is indicated for this district during 1940. the
number of pigs saved from the spring crop and the number
of sows to farrow next fall is estimated at about 15 per cent
smaller than in 1939.
.FINANCE
The daily average of combined gross demand and time deposits at member banks in the Eleventh District has shown
a sharp upward trend in recent years. Although the expansion
has usually been interrupted by seasonal declines in the first
half of the year, increases in deposits during the last half of
the year have more than offset the temporary declines with
the result that substantial gains have been registered during
each succeeding year since 1933. During the first six months
of 1940 total deposits showed little net change contrary. to
the seasonal decline that ordinarily occurs during that per1~d
and the total for June averaged $151,000,00 0 greater than Jll
June, 1939. Although time and interbank deposits have contributed substantially to the increase in gross deposits during
CROP PRODUCTION
(In thousands of units)
, - - - Texas - - - v - - Eleventh Distriet---Estimated
Estimated
Crop
Unit
July I, 1040
10aO
July 1, 1040
1039
Wint~r whent. . . . . . . . . . . . Bushols
26,270
27,650
27,036
28,70~
Corn .. .. .. . .. . ...... . .. . Bushels
01,630
73,a76
107,000
87,16
Oats. . . . ... . .. .. . . ...... Bushels
34,375
28,750
37,658
31,3~.
Barley. . . . . . . . . . . .. . . .. . Bushels
3,632
2,055
10,507'
10,2
Tamo hay. . .. ..... . . . . ..
Tons
1,283
1,022
1,706
1,4 30
Irish potatoes . . . . . . . . . . . . Bushels
3,102
2,666
3,813
3, 34901
Sweet potatoes.. . . . . . . . . . Busbels
4,158
3,780
11,978t
11,6~~
Rioo . . . . . . . . . . . . . . . . . . . . Bushols
15,714
13,988
15,714t
13,0
a
'Texas, Oklahoma. New Mexico and Arizona.
tTexas, Oklahoma and Louisia • •
tTexas only.
Other data for the Eleventh Distriot derived from estimates by states·
SOURCE: United States Department of Agrioulture.
CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS
AND GOVERNMENT BENEFIT PAYMENTS
(In thousands of dollars)
r - - -Ar,ril, 1940-----Receipts rom:
Govcrn- ,, ,--- --'Total rcoeipts------;O'
~--------"
mcnt
April
April
Jan. 1 to Aprg39
Crops Livestook" payments
1940
1030
1040
1 424
Ari z.o~a ... ... .
4,227
2,300
43
6,570
6,009
20,858
2 ~'!1'
LoUIsiana . ... . .
5,423
1,664
1,830
8,026
7,602
30,531
8'SSI
New Mexioo . . .
743
2,525
116
3,384
2,143
12,601
44'914
Oklahoma .... .
3,618
5,640
1,602
10,860
12,091
51,1 80 120'348
TeXjlS .... . ... .
7,081
22,811
5,a60
36,152
36,308
135,964 ~
6
251,134 228,67
Total. . . . . 21,902
84,040
8,060
65,892
64,333
'Inoludes receipts frOID the salo of livestook nnd livestook products.
SOURCE: Umted States Department of Agrioulture.
.
LIVESTOCK RECEIPTS
(Number)
_______
r - - -Fort Worth- - v - - - San Antonio lJar
June
June
May
June
June
940
1040
1089
1040
1040
10aO
1 6
Cattle...... ...... .. ..... 40,534
53,345
44,660
11,328
11,701
~n~4
Calves..... . . ... . ... .... 24,504
a3,403
26,046
16,832
24,077
8'422
Hogs........ ...... ... . .. 28,217
27,160
38,084
6,079
10,443
6'427
Shoop. . . . . . •. . . .. . . . . . .. 152.806 136,400 315,716
5.204
5,368
'
COMPARATIVE TOP LIVESTOCK PRICES
(Dollars per bundredweight)
. _______
,..----Fort W o r t b - - v - - - San AntonIo lJar
June
June
May
June
June
1040
1040
1930
1040
1040
1039
00
$10 .00
$10 .25
$ 0.25
S 0.25
$ ~ ·00
Beof steers .... . .. . . ..... . $ 0.75
Stooker steers .. . . . .... . . .
0.50
0.00
0.50
6.50
7.00
10'00
10.25
11.00
10.00
10 .00
6'50
Heifers and yearlings .. . . . 10 .25
7.~
6.n
7.00
6.W
5.n
0'50
Butoher cows .. .. .... . . ..
0.50
10.25
10.00
0.50
6'55
Calves .. ... ... .... .... . . 10.00
5.60
7.10
6.20
5.80 '
7.00
{00
0.50
8.50
0.85
7.75
6.25
.
f.:'~t9:::

:::::::::::: :::

MONTHLY BUSINESS REVIEW

8

the past several years, more than two-thirds of the expansion and public works construction exceeded that of a month
represents a growth in the demand deposits of individuals and earlier and a year ago by a substantial margin. Excluding conCorporations. Factors contributing to the latter increase include tracts awarded for the naval air station, construction activity
the heavy distribution of Government funds resulting from in this district during June was at a comparatively high level,
loa~s! grants and relief expenditures, a growth in industrial exceeding that a month earlier and a year ago by 9 and 23
per cent respectively. In the residential field construction of
actiVity, and an expansion in agricultural income.
The rise in deposits at member banks during recent years single-family dwellings was higher than in either the precedhas been at a much more rapid rate than the expansion in loans ing month or the corresponding month of 1939, and awards
hnd investments and as funds in excess of the amounts used for dormitories increased sharply.
During the first six months of 1940 the cumulative value
~ve accumulated, these banks have built up their balances
CONDITION OF THE FEDERAL RESERVE BANK
~Ith correspondent banks and with the Federal Reserve Bank.
(In thou.and. of doUars)
July 15,
July 15,
Juno 15,
Rhus far this year total reserves carried with the Federal
1040
1039
1040
eserve Bank of Dallas have averaged about $83,000,000 in Total oash reservos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $251,549
$280,050
$241,363
Disoounts for momber banks.. . .. .. .. ... .. . . . .. . .. .
330
340
310
~Xcess of requirements, and the current trend of excess reserves
Otbor bill. disoounted.... .. .................. .. ...
Nono
50
None
IS upward. It is estimated that excess reserves averaged about Indu.trial advanoos... ... . ................... . ....
465
567
473
Bills bought in tho opon market.. . . . . .. . . . .... .....
Nono
16
Nono
$90,000,000 during the first half of July.
United States Governmont seourities... .. .. .. . ......
05,465
06,025
05,281
Total
earning
assets.
.
.
.
...
.......................
06,266
07,013
96,070
Total earning assets of the Federal Reserve Bank of Dallas Momber bank reserve doposits. ... . ...... . ....... .. 210,820
185,032
224,017
expanded slightly between June 15 and July 15, reflecting Federal Rosorve notes in actual oiroulation. . . . . . . . . .
81,631
76,505
70,244
CONDITION
STATISTICS
OF
MEMBER
BANKS
IN
LEADING
OITIES
s?alI increases in discounts for' member banks and in holdings
(In thousands of dollars)
July 10,
July 12,
June 12,
of United States Government securities. Federal Reserve notes
1040
1030
1940
\ this bank in actual circulation expanded $2,400,0 00 during Total loans and invostments. . . . . . . . . . . . . . . . . . . . . . . $514,074
$513,540
$523,183
256,449
206,608
~ e month ended July 15, and the total outstanding on that Total loan. . . .. .. . . . . . . .. .. . . . .. .. .. .. .. ......... 260,750
Commeroial, industrial and agrioulturnlloans..... .
174,890
109,356
174,977
ate Was $5,000,0 00 greater than a year ago.
Opon market papor. . . .. . . . . .. .. .. . . . .. . . .. .. . . .
2,035
1,652
1,638
Loans
to
brokers
and
dealors
in
.oouritios.
.
.......
.
2,372
5,125
3,918
The Customary seasonal contraction in the need for comOther loans for purohasing or oarrying seouritios. .• .
12,896
13,582
13,820
Real estato loans . . . . . .. . . . .. .. .. .. . .. . .. .. .. .. .
22,211
21,061
22,089
lllycial bank credit to finance commerce, industry and agriLoans to banks..... .. . .. .. .. .. ....... ... .. .. .. .
620
340
778
U
t~re was evident at weekly reporting member banks in
All other loans. . .. . .. . .. .. . . .. .. .. .. ....... ....
51,711
44,827
49,960
United States Govornmont direot obligation..... ... ..
145,828
158,185
151,510
le;dlU g .cities of this district during the first six months of Obligation.
fully guaranteed by United States Govt..
45,176
44,078
47,120
56,320
54,828
57,846
40, With the result that their loans followed the usual down- Other seourities. . . . . .. .. .. . .. ... . . .. .. .. .. .. . ....
Reserves with Federal Reserve Bank..... .. .. .. ... . • 140,600
121,714
140,982
Ward trend during that period. The low point of the season Balances with domostio banks..... .. .. .. .. .. .... .•. 300,480
251,046
297,147
Demand deposits-.dju.ted". . . ...... . . .. ........ .
485,550
458,737
491,372
Was apparently reached on June 19 when total advances Time
doposits ... . . . . . . . . . . . . . . .. .. ... .. .. .. .. ..
136,710
135,207
137,212
United
States
Government
doposits
.
..
.
..
..
.
..
.
.
..•.
27,102
31,115
31,308
aillounted to $264,7 00,000 , or $24,4 00,000 under the total
Interbank deposits..... . . . . . . . .. . . . . . . . .. .. .. .....
255,007
214,516
259,340
a~ the beginning of the year. In comparison with earlier years, Borrowings from Fedoral Reserve Bank. ............
None
Nono
Nono
"Inoludes .U domand deposits other than interbank .nd United St.tos Governmonl, loss
t e volume of loans on June 19 was above that for any coro.sh itoms roported a. on hand or in tho prooess of 001leotion.
tresp on d'Ing date since 1931. Between June 19 and Ju Iy 10
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(A verago of daily figurca-in thousands of dollars)
otal loans increased $2,1 00,000 , one-half of which repreCombined totol
Reserve oity banks
Country banks
iented an expansion in commercial loans. Thus far in 1940
Gross
Gross
Gross
Oans at reporting banks have been in excess of those on the
demand
Time
domand
Timo
demand
Time
cOlllparable dates in 1939, but the spread between loans in the June,
1938 ........... $1,077,586 $220,001 $605,328 $121,045 $472,263 $ 09,046
503,206
June,
1930
...........
1,103,874
232,582
690,578
129,282
108,300
~ho years was reduced from $42,600,000 at the beginning of February, 1940 .......... . 1,355,474 234,306 785,130 120,055 570,344 106,251
e year to $10,30 0,000 on July 10. The reduction in the Maroh, 1040 ........... 1,350,015 235,036 782,012 120,589 568,003 105,447
April,
1940 .......... . 1,340,072 282,400
777,009
128,764 563,873
~1read is due to the fact that loans reflected an increase during May, 1040 .... .. ..... 1,346,733 234,567 784,003 120,060 562,730 103,645
105,547
June,
1040
..
.........
1,342,591
285,311
782,025
120,216 560,566
106,005
e first half of 1939 which was in contrast with the usual
DEBITS TO INDIVIDUAL ACCOUNTS
~e~ional decline. Investment holdings at reporting banks have
(In thousands of dollars)
Juno
Juno
Potg.obango
May
Petg. ohango
10 OWed a downward trend since the early part of December
1040
1030
ovor yoar
1040
over month
ob~i ye~r. The contraction has been in direct and guaranteed Abilone ........ . . . . . .. .. $ 7,610 $ 8,158
- 6.7
S 8,467
-10.1
34,618
34,295
+.9
38,520
-10 .1
Austin . . .............. ..
h I ~atlOns of the United States Government, and the total Beaumont
22,833
22,713
+.5
24,030
..........•. ...
- 7.3
i 0 ~ngs of these securities on July 10 were at the lowest level Corsicana . . ...... ...... .
3,213
2,843
2,826
+.6
-11.5
245,569
- 2.0
259,083
Dallas . . . ... . . . . . . ..... . 288,522
- 7.0
s~ lie years. On that date total investments were $9,800,000 El Paso ... ......... .. .. . 26,847
20,435
25,521
+ 5.2
- 8.8
87,556
80,297
84,088
4.5
Fort
Worth
.......
.
....
..
- 8.3
er than a year earlier.
25,585
22,541
+13.5
25,809
- 1.2
Galveston . . ............ .
220,186
+ 2.8
250,270
- 9.5
ind.o~lowing a counter-to-seasonal increase in May, debits to Hou.ton ................ . 226,411
0,506
9,484
0,567
-.9
.2
Port Arthur ..... . ...... .
D' IV~dual accounts at banks in eighteen cities of the Eleventh Roswell ...... . ........ ..
4,401
4,502
4,400
+.1
+ 2.3
73,820
75,392
2.1
80,411
8.2
San
Antonio
..
...
.
..
....
.
th:~n~t declined sharply in June and were fractionally smaller Shreveport ............. . 42,480
41,868
+ 1. 5
48,412
-12 .3
6,082
6,340
+10. 1
7,164
- 2.5
pa' 1U the corresponding month of 1939. The latter com- Tex.rkanao ............. .
12,309
11,546
+ 7.4
14,282
-13.2
Tucson ........ ... ...... .
th~l~n C~ntrasts with an average increase of 9 per cent for Tyler . .... .. ........... . 11,003
12,221
- 0.2
11,683
- 5.1
12,436
18,474
- 7.7
13,507
-7.9
Waco . . ................ .
rst SIX months of 1940.
16,585
15,065
+10.1
18,373
- 0.7
Wiohita Falls .... . ...... .
----Th
INDUSTRY
Total.
..
.
..
..
..
•
$855,356
$855,869
.
1
$034,812
- 8.5
D' ~ value of construction contracts awarded in the Eleventh
°Inoludes the figures of two banks in Texarkana, ArkanSAS, looated in the Eightb Distriot.
ott lCt showed a marked increase during June, as a result
SAVINGS DEPOSITS
Wit~ e letting of contracts for one large project in connection
June 30, 1040
Peroentogo ohango in
savings doposits from
pr . the national defense program. Awards aggregating apNumber of Number of Amount of:
reporting
savings
Juno 30,
May 31,
savinf!S
na~~m~tely $23,000,000 were let during the month for a
banks
depositors
depoSits
1939
1940
qUe a air training base at Corpus Christi, Texas, and in conse- Beaumont ...... .. . . .... .
3
9,836 $ 4,023,628 + 2.5
+ 1.3
8
00,024
26,695,455 - 3.3
+1.1
dur?-ce of this action the value of all construction work started D.llas ...... .. ......... .
2
8,221,808 - 1.5
EI Paso ................ .
18,280
+ 1.3
'fhi~nt the ~onth rose to an all-time peak of $39,70~,000. Fort Worth ............. .
3
13,127,163 - 8.3
35,038
+ .0
4
.............. .
12,289,310 +1.5
10,088
+ 2. 8
pre d.gure IS more than two and one-half times that ill the Galveston
10
Hou.ton ..... . ..... .. .. ..
77,425
31,846,367 + 4.7
+ 1.2
2
3,145,515 + 7.6
5,842
+ 1.0
lllo C\lng month and exceeds that in the corresponding Port Arthur .. . ........ ..
San Antonio . .. . ........ .
5
22,738
18,040,760 - 5.0
+ .8
c1a~t of 1939 by a similar amount. Awards for all principal Shroveport . ...... . ..... .
3
12,464,403 + 7.6
25,530
+ 1.3
3
W.oo
..........
.
......
..
8,287
4,691,108
+
1.3
+1.4
con~es of construction work were augmented by the letting of Wiohita Falls ........... .
3
7,228
3,763,831 - 5.4
+ 2.0
60
61,556
30,060,878 + 2.0
+ .0
and ra~~ .for the naval air base. Residential, non-residential All othor ............... .
ut Itles construction were in or near record proportions
115
381,681
1160,270,m
Total .. ' .... ..
- .1 + 1.2

i

F

h

MONTHLY BUSINESS REVIEW

4

of contracts awarded was nearly one-fourth greater than that
in the comparable period of 1939. Among the several classes
of construction work, increases ranged from 6 per cent for
residential building to 46 per cent for public utilities construction. Publicly-financed construction increased sharply in June,
with the result that the aggregate for the first half of 1940
amounted to about 54 per cent of total construction, which
compares with 42 per cent in the first six months of 1939.
Daily average production of crude petroleum in the United
States showed little change from May to June, notwithstanding a sharp curtailment in output in the Eleventh District.
The reduced production in this district reflected chiefly the
effects of the fifteen-day emergency proration order for Texas
issued during the latter part of June, and since the emergency
order was subsequently extended to September 1, the net production allowable for Texas during July and August is substantially below the daily average output in June. Although
petroleum production in this district was reduced in June,
daily average output continued slightly above that in the
corresponding month of 1939, and in the United States production was at a 9 per cent higher rate than a year ago.
Refinery operations in J;his district showed little change
from May to June, but were at a 2 per cent lower rate than
a year ago. On the other hand, daily average crude oil runs
to stills in the United States rose to an all-time peak for the
second consecutive month and exceeded those of a year ago
by 5 per cent. Although gasoline production was maintained
at a high level during June and the first half of July, lower
yields of that product from crude oil and a heavy demand
for motor fuel resulted in large withdrawals from storage.
Nevertheless, stocks continue much greater than the excessive
inventories of a year ago. Stocks of crude oil, which had
shown a steady increase during the seven preceding months,
evidenced little change in June. Inventories of heating oil
increased further during the month, but stocks of fuel oil
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thoulIBnds of doUars)
June
June
May
January 1 to June 30
1040
1930
1040
1940
1030
Eleventh Distriot-total.. .
30,600
13,506
15,347
121,002
07,128
Rcsidontial. . . . . . . . . . ..
12,464
5,945
6,004
42,947
40,641
All othor . . .. .. .. .. ....
27,235
7,651
0,253
78,145
56,487
United Statcs ·-total. .. ..
324,726
288,316
828,014
1,623,087
1,699,864
Residential. . .. ... .....
135,274
111,896
145,912
690,572
644,527
AU othcr . . . . . . . . . . . . . .
189,452
176,420
188,002
032,515
1,054,837
·37 states east of the Rooky Mountains.
SOURCE: F. W. Dodge Corporation.
BUILDING PERMITS
Pcroentage ohange
Percentago
Juno, 1940
valuation from
Jan. 1 toJune30,1940 ohan$o
,
v
v
valuatIOn
No. Valuation June,1939 May,1040 No.
Valuation
from 1930
27 $ 56,005 +43 . 8
166 $ 200,560 - 13 . 6
Abilene ........
+ 45 .4
188,332 - 17 .6
- 52 .7
73
460
1,348,715 - 13.4
AmariUo ...... .
443,961 - 29 .7
- 55.0
1,775
4,341,388 - 3 . 7
Austin ... . ..... 210
100,059 +24.4
109
723
757,886 + 4. 6
Boaumont ... ...
+ 8.2
248,947 - 57.2
1,178
4,090,720 +43 . 1
Corf:ss Christi .• 167
+ 8.9
3,634
Dal ......... 570 1,478,250 +23 . 8
7,004,631 - 3 .8
+ 19.0
138,960 - 10. 7
70
1,200,494 +23.6
- 46 .0
547
EI Paso .... ....
312,057 -33.4
1,466
- 29.8
2,407,149 - 25 .2
Fort Worth ..... 286
179,907 +18 . 6
870
+111 . 6
1,110,383 +38 .7
Galvcston ...... 152
- 26 .0
2,965 11,580,405 - 20 . 7
Houston .. .. .. .. 374 1,189,950 -41.5
09,184 - 15 .0
7.0
779
620,795
Port Arthur . • . . 124
17 1
441,009 + 4.7
- 16 .5
4,009
San Antonio ... • 658
3,130,910
24 ..8
260,128 - 30.5
1,152
- 49 .0
2,366,780 - 22 .0
Shreveport . . . .• 154
123,667 - 3. 0
48
423
709,739 - 25.6
Waoo .. . .......
+ 3. 1
47
120,020 +74 . 7
275
+ 90 .7
Wiohita Falls ..•
008,192 +28.4

t

-

- - - -- -

Total. . • ..• 3,010 $5,440,426 - 10 .3
- 10.8 20,512 $41,683,651 - 6.4
·Inoludcs IDghland Park and Univorsity Park.
CRUDE OIL PRODUCTION
(Barrels)
June, 1940
Inorease or dooreaso in daily
~---------.,
average produotion from
Total
Daily avg. , - - - produotion
production
June, 1939
May, 1040
5,040,300
168,010
+14,130
- 13,182
North Texas .. .... . ... . ... .. .
7,847,400
261,580
+12,940
Wcst Texas ... ... ....• .. ... . .
- 25,810
449,216
- 22,969
East Texas .... . . .. . . . .... .. . 13,476,500
- 13,562
6,864,050
228,802
+ 3,172
South Texas ... ... . .. ..... .. .
- 8,996
0,788,750
226,125
+10,740
Texas Coastal.. .. . . .. ... . . .. .
-15,696
Total Toxas . . . .. . .
New Mexico . ... ..... .. .. . .. .
North Louisiana ..... . . ... ... .

40,012,000
3,180,050
2,066,300

1,333,733
106,002
68,877

+18,013
- 1,803
- 4,318

Total Distriot . .. ... 45,258,350
1,508,612
+11,802
SOURCE: Estimated from American Petroloum Institute weekly reports,

-77,246
837
- 1,145
- 79,228

showed virtually no change and on June 30 were 8 per cent
smaller than a year earlier.
Around the middle of July some purchasers reduced posted
prices for crude petroleum in local areas of Texas from 4 to
28 cents per barrel. Gasoline prices remained generally steady
at the low level prevailing in other recent months.
Well completions in this district during the first half of
1940 were 11 per cent higher than in that period of 1939,
and in the United States they were 19 per cent greater. Although completions during June in both this district and the
nation as a whole were fewer than in the preceding month,
the percentage gains over the corresponding month of 1939
closely approximated the respective increases recorded for the
first six months of the current year.
Cotton consumption in the United States was well sustaine~
in June, although seasonal factors and a fewer number ~
working days resulted in declines as compared with the preVIous month and with the corresponding month in 1939. On a
seasonally adjusted basis, the 556,500 bales of cotton utilized
during the month, represented a consumption rate slig~t1Y
higher than that a month earlier and a year ago. ConsumptJO:J
during the first eleven months of the current season total e
7,148,000. bales, which reflects an increase of 13 per cent over
that in the comparable period of the 1938-1939 season. Following the heavy mill sales of cotton cloth and yarn during
the second week of June, demand declined considerably, but
the heavy backlog of unfilled orders has been a sustaining factor in mill operations. Mill stocks of raw cotton were reduced
12 per cent in June and inventories in public storage and compresses declined to the lowest level since; September, 1937. the
volume of "free" cotton in domestic trade channels has beef
reduced to a low level, and according to the Department 0
Agriculture, this condition was a strong factor in the recovery
of cotton prices following the sharp decline in May. Since thd
middle of June, however, prices have shown a downwar
trend, apparently reflecting the poor export demand and ?epressing foreign developments. The average price for middhng
cotton, t ~ -inch staple, at the ten designated spot markets waS
10.26 cents per pound on July 22 as compared with 10.7 7
cents on June 15 and the 1940 low of 9.39 cents recorded on
May 18.
Exports of cotton from the United States showed a further
sharp decline during June, due in part to seasonal factors, and
shipments were at a level only 18 per cent above the exceptionally small volume in June last year. The decreas~ from the
preceding month was occasioned by declines in shipmentS to
Great Britain and to Continental Europe. There were 133,5 00
bales exported during the month, which brings total shipment
for the season thus far to 6,055,000 bales. This figure is m uc h
greater than that in the corresponding eleven months of the
preceding season but 7 per cent smaller than the 1929- 1938
average shipments for that period.
CONSUMPTION, STOCKS AND EXPORTS OF
(Bales)
June
Juno
Mny
1040
1030
1940
Consumption at:
Toxas mills. . . .. . . . . . . .
10,759
10,355
12,309
556,529
United Statcs mills. . . . .
578,436
636,467
U.S. stocks-end of month:
In oonsuming estab'mts. 1,160,025
1,020,600
1,314,105
Publio stg. & oomprCBSes . 9,572,142 11,048,702 10,087,027
Exports from U. S. to:
United Kingdom . . . . . . .
26,055
0,853
72,400
France.. .. .... .... ....
11,874
3,234
10,151
Italy . ... . . . . . . . . . . . . .•
6,540
9,263
46,342
Gormany . . .. ... .... . . .
Nono
14,575
Nono
Other Europe .. ........
4,264
17,816
16,922
Japan.. .... .. .. .. . ....
34,503
28,000
33,634
AU oth~r countrics. .. . . .
50,204
30,003
47,020

COTTON
Augllst 1 to Jllno 3~on
This season Last sen
113,278
126,818
6,387,078
7,147,724

1,847,016
724,025
542,400
18,922
1,043,758
872,111
1,006,730

309,~~t

386'03 0
201'63 6
306'146
~~h23
288
~

Total oxports . . . .
133,580
113,084
226,460
6,054,961
3,220,300
RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF
HOUSTON AND GALVESTON- (Bales)
30
June
Juno
May
August 1 to J11110 ascP
1040
1939
1040
This season JAlst se429
Receipts.......... . .. ....
57,674
07,058
01,694
3,800,524
~'~~h02
Exports ... . ..... . .. . .. . .
02,078
81,558
136,746
3,521,270
, '...
Stooks, end 01 month.. . .. 1,284,743
1,025,241
1,326,528

.....

MONTHLY BUSINESS REVIEW
AUGUST I, 1940

NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
INDUSTRIAL PRODUCTION

'tit ClNT
140

PER ceNT

.40

lao

I!O

j

Ito

Jf"V\
\
J

Ito
100

I~

80

eo

v

Y

70

J IV

\

''vJ

ILl

11\

I

120

PRODUCTION

110

The Board's seasonally adjusted index of industrial production advanced from 106 in May to
114 in June. In that month, as in May, increases in activity were most marked in the iron and
steel and textile industries where declines earlier in the year had been greatest.
Steel ingot production rose from 60 per cent of capacity at the beginning of May to 87 per
cent in the latter part of June and was maintained at about that level in the first three weeks of
July. Production of coke and pig iron showed similar sharp increases and iron ore shipments down
the Lakes were at near-capacity levels. Demand for steel was general as most domestic steel-consuming industries were operating at high rates. Exports of steel, which had declined in April, rose
to earlier high levels in May and June, amounting to about 10 per cent of steel-producing capacity.
Automobile production, which had begun to decline in May, continued to decrease in June
and the first half of July reflecting in large part seasonal influences. Retail sales of automobiles
were in large volume and dealers' stocks of new and used Cars declined from the high levels prevailing earlier.
In the textile industry there was a further sharp advance in activity at woolen mills, and at
cotton mills output was reduced less than seasonally. Rayon production Was maintained at earlier
high levels while at silk mills activity remained near the unusually low rate reached in May.
Coal production continued in large volume during June, but output of crude petroleum
declined in the latter part of the month, owing to reduced production in Texas fields.
Value of construction contract awards showed little change from May to June, according to
F. W. Dodge Corporation figures for 37 eastern States. Awards for private residential building
decreased more than seasonally, following a sharp rise in May, and contracts for private nonresidential building also declined. Contracts for public construction increased further in June, owing
in part to expansion in the construction of Army and Navy air bases.

100

I V

90
80

70

eo

80
1034

t9SG

tellS

19:57

lese

1939

1940

Index of physical volume of production, adjusted
for seasonal variation, 1923-1925 average
100_ By
months, January, 1934 to June, 1940_

=

DEPARTMENT STORE SAlES AND STOCKS
"",C<NT

110

°r---~---+

____ __ __-4____
~

~

~

Volume of industrial production increased rapidly during June and rose somewhat further in
the first half of July. Distribution of commodities through retail and wholesale markets and by
rail continued active.

__~ro

DISTRIBUTION
Indexes of value of sales and stocks, adjusled for
100_ By
seasonal variation, 1923-1925 average
months, January, 1934 to June, 1940_

=

...

WHOLESALE PRICES OF BASIC COMMODITIES

J++tt·
f-+
-I~
-:~-L

__ ____L-__
~

19~

-L__~____~~~ 40

1936

1931

1938

1939

~ederal Reserve groupings of Bureau of Labor StaIStics'

data_ Thursday figures, January 4, 1934 to
July 11, 1940_
MONEY RATES IN NEW YORK CITY

I'tllotHT

4

Department store sales in June were maintained at the May level, although usually there is a
considerable decline, and the Board's seasonally adjusted index advanced to 93 as compared with
87 in May and a level of about 89 earlier in the year. Sales at variety stores showed little change
from May to June, continuing at the advanced level that has prevailed since the beginning of the
year. In the early part of July department store sales declined seasonally from the June level.
Freight-car loadings increased further in June. Shipments of coal and miscellaneous merchandise continued to expand and loadings of coke, which usually decline at this season, showed a
substantial rise.
COMMODITY PRICES
Prices of a number of industrial materials, particularly steel scrap, copper, rubber, and silk,
declined from the middle of June to the middle of July. Wheat prices also showed decreases in thia
period, while prices of livestock and products advanced owing partly to seasonal influences.
AGRICULTURE
Production of major crops this season, according to the July 1 report of the Department of
Agriculture, may be slightly lower than last seaSon. Tobacco production will be sharply reduced
from last year, when the crop was unusually large. Domestic supplies of wheat and other field crops
as well as of vegetables and fruit are expected to show little change from last season. Indicated hog
production this year will be about 10 per cent smaller than last year.
BANK CREDIT
Total loans and investments at reporting member banks in 101 leading cities increased during
the five weeks ending July 10, chiefly as a result of increases in holdings of short-term United
States Government obligations and in commercial loans. Holdings of United States Government
bonds and loans to security brokers and dealers declined.
The monetary gold stock increased by $885,000,000 in this five-week period, the largest gold
acquisition for any corresponding period on record. This inflow of gold was reflected in a growth of
$31 0,000,000 in foreign bank balances with the Federal Reserve Banks and increased deposits and
reserves of member banks. On July 10, excess reserves of member banks amounted to $6,833,000,000.
GOVERNMENT SECURITY MARKET

o
1934

POrwck
e

1935

S

1936

1937

1938

1939

1940

·
,
ending January 6, 1934 to July 13, 1940.

Prices of Government securities, which had advanced sharply in June, showed further increases
after July 8 when the Treasury announced a new bond issue for cash subscription. Between June 10
and July 15 the price of the 1960-65 bonds rose about 3 points, and the yield on this issue
declined from 2.52 per cent to 2.34 per cent as compared with 2.26 per cent at the year's peak in
prices on April 2.