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MONTHLY
BUSINESS
REVIEW
of

the

Volume 31

FEDERAL

RESERVE

BANK

of

Dallas, Texas, August 1, 1946

Dallas
Number 8

THE HOUSING PROBLEMCONSIDERATION OF SOME OF ITS ASPECTS
R. B.

JOHNSON

In the Eleventh Federal Reserve District and the nation, an acute shortage of living accommodations and a rapid increase in building costs have contributed to substantial divergencies between the
original cost of houses and their current replacement cost and the prices at which they are being offered
in the market. Surveys conducted by the National Housing Agency during March 1946 revealed a
significant degree of inflation in the prices of residences and residential sites throughout the nation.
Houses valued at less than $6,000 in the spring of 1940 had risen an average of 65 per cent in price by
February 1946, while the prices of "raw land" and lots had increased approximately 60 per cent.
Increases reported for the Southwest were greater than for any other area except the Pacific Coast.
In the Southwest, prices of houses valued under $6,000 in 1940 had risen 77 per cent by February
1946, and "raw land" usable for residence sites had increased 93 per cent. Since February, increases in
urban site values and in the prices of existing dwellings have continued in the areas in the Southwest
from which current information is available.

The increase which has occurred since the beginning of the war in the average cost of constructing
a dwelling unit cannot be determined precisely fro,m available data. As shown in Table II, indexes of
wholesale prices of building materials other than lumber, union wage rates in the building trades, and
the estimated cost of constructing a "standard house" have increased considerably less than 50 per cent
since 1940. These indexes, however, do not perhaps
TABLE I. AVERAGE PERCENTAGE INCREASES
adequately reflect the effect upon the cost of conIN PRICES OF HOMES AND HOMESITES
struction of such intangible influences as variations
Homesites - Homes Valued in the efficiency of labor, delays in construction, and
Under $6,000 to Raw
$6,000 $12,000 Land
Lots
the use of substitute materials. Moreover, rising
Spring
1940
to
February
1946
contractors' margins have contributed further to
65.1
57.0
60.1
61.8
S.-All cities .. ...
the increase in cost to the buyer. Giving consider- U. Cities
66.0
61. 7
68.7
64.0
100,000 and over.
64.9
55.9
57.9
61.3
Cities under 100,000 ...
ation to the effect of these intangible factors, repSouth Central'
utable building contractors report that the cost of West
57.6
93.3
62.2
All cities. . . .. ... . ..
76.7
building residences probably has risen somewhere
91.4
67.9
75 .6 108.0
Cities 100,000 and over.
55 .7
59.9
74 .1
90.6
Cities under 100,000 ....
between 85 per cent and 100 per cent since the
September 1945 to February 1946
beginning of the war. Their estimates conform ap14 .8
23.0
23 .3
U. S. - All cities ......... . 17.7
proximately to the increase in the cost per square
15.8
27.6
26.6
Cities 100 000 and over . . 17 .3
17
.8
14.6
21.8
22.4
Cities uilder 100,000 .... .
foot of residential construction computed from
Soutb Central
data compiled by the F. W. Dodge Corporation. West
23.7
All cities....... .... .... 18.1
15 .1
37.8
28 .0
Cities 100000 andover .. 19 .0
15.. 4
40.1
These data, summarized in Table III, show that the
22.9
Cities under 100,000..... 18.0
15.1
37.3
average valuation of dwelling units constructed in
SOURCE: National Housing Agency.
~ Texas rose from approximately $3,900 in 1940 to
'Includes Arkansas, Louisiana, Oklahoma and Texas.
•
$6,580 in the second quarter: of 1946, although the
average unit size of dwellings declined from 1,270 square feet to 1,149 square feet. The reported cost
per square foot of residential construction in Texas averaged $3.04 in 1940 and $5.73 in the second
quarter of 1946.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

98

MONTHLY BUSINESS REVIEW

The housing situation in Texas raises several questions of great interest to contractors, owners,
prospective purchasers, and lenders. What will be the probable duration of the rise in residential values
and building costs? Around what levels will the prices of houses and the cost of new construction
eyentuaUy fluctuate? How rapidly can the conTABLE II . VARIATIONS IN INDEXES OF
struction industry meet the demand for new dwellCONSTRUCTION COST
ings? What will be the magnitude of the long-run
Index
P eriod
P ercentage demand for housing? Although obviously it is imPrices of wholesale building
. answers to th
'
.Tuly 1940·April l946 mcrease
possible to give d efi rute
ese questIOns,
materials
All building materials .... .
37
it is profitable to analyze the factors which are inBn cks and tile . . . ...... .
33
fluencing housing demand, dwelling values, and
Cement . .
.
13
. ... . .
Lu mber .......
81
construc
tion volume and costs. In this article some
Paint and paint materials .. .
28
of the dominant influences upon the housing marPlumbing and heating ... .
25
Aver~e union wage rates in
ket and the residential construction industry in
building trades....... . .. . . .J une 1940·.July 1945
14
Texas
and the Eleventh District are considered.
Index of cost of building standard house
Feb. 194O-May 1946
The Deficiency in Housing
Houston, T exa".
34
Residential construction lagged behind the popuUnited States. . . . . . . . . . . . . . .
40
SOURCE : U. S. Depart ment of Labor and Federal H ome Loan lation increase and the industrial and trade expanBank.
sion which occurred throughout the 1930's, despite
TABLE III. COST CHARACTERISTICS OF NEW
the efforts of the national government to stimulate
DWELLING UNITS IN TEXAS
the construction and ownership of homes. Between
Average valuation Square
Cost per
1930 and 1940, 492,000 ' dwelling units were conof dwelling units
footage
square
Period
const ructed
per unit
foot
structed in Texas, as compared with an increase of
1937 . . . ... . ...
$4,185
1,468
$2 .85
318 ,000 in the number of families in the State.
1938 .. . .....
4,341
1,357
3 .20
Although that volume of construction apparently
~~: : : ::: :::: :: : ::
~:!:
~:~~~ ~ : ~!
created a surplus of 174,000 new housing units,
1941. .. .....
3,777
1,133
3 .33
those additional units did not much more than com1942 .. . .. . . . . . ... . .
2,793
813
3 .44
pensate for the disappearance of dwelling units
1943.. .. . . .. ... . ...
2,051
587
3 .50
which occurred during the decade as a result of
1944 . . ........ . ....
2,926
876
3 .34
depreciation and destruction. Consequently, little
1945 . . .. . . . . .. .. . ..
5,319
1,282
4. 15
d
d
l'
.h
1st quarter, 1946 ....
6,684
1,349
4 .96
progress was rna e towar rep acmg Wlt new
2d quarter, 1946. ...
6,580
1,149
5 .73
dwelling units the many housing structures which
SOURCE : Computed from F. W. Dodge Corporation data.
provided substandard living conditions. At the beginning of 1940, the supply of shelter in Texas
probably was great enough to hous.e all the families in the State, but a large number of the dwellings
provided inadequate facilities or were in serious disrepair. In urban areas three out of every eight dwelling units needed major installations or repair, while in rural areas the percentage of substandard
residential units was much greater.
The unsatisfactory character of the shelter in which a large percentage of the families in the State
lived tended to establish a potential demand for new housing. That potential demand began to crystallize as effective demand when individual incomes rose late in 1940 and throughout 1941. Partly as a
consequence of this development, residential construction increased greatly in Texas during 1941 and
the first six months of 1942, but thereafter was curtailed as a result of government regulations which
restricted residential construction to low-cost dwelling units f or war-plant employees and military
personnel.
Between 1940 and 1946, 200,000 permanent dwelling units' and 25 ,000 temporary dwelling units'
were built. That construction, however, actually did not meet the demand for new housing in the
State created by immigration, shifts of population f rom rural to urban areas, and a substantial increase
in m arriages. When the war ended, an absolute deficiency of shelter existed in the urban areas of the
State. It was anticipated before the end of the w ar that when w ar contracts were terminated migration
of war-plant workers from urban to rural areas would alleviate the housing shortage, but that expected
shift in population did not develop on a large scale. Expansion of employment in service and trade
offset to a considerable extent the moderate decline in industrial employment which occurred, and as
'Data from the 1940 Census of Housing. "Dwelling units" as defined by the Census include all living accommodations int ended for occupancy by one household, irrespective of cost or t ype of structure.
2Estimated from Bureau of Labor Statistics data.
aData from Federal Public Housing Authority.

MONTHLY BUSINESS REVIEW

•
,

99

veterans returned, the housing shortage in urban areas was aggravated. It is estimated that at the
beginning of 1946 an absolute deficiency of 35,000 to 40,000 dwelling units existed in the urban areas
of Texas.'
The Potential Demand for New Housing
The need for additional housing to alleviate the
distress arising from the absolute deficiency in housing constitutes only a small portion of the requirements for new units to satisfy the potential demand.
National requirements to satisfy the pent-up housing demand, provide shelter for an increasing
population, and replace destroyed and substandard
dwellings during the 1946- 1955 decade have been
variously estimated at from 820,000 to 1,260,000
new non-farm dwelling units annually." Allocation of these ten-year estimates gives an annual
potential demand for between 40,000 and 60,000
units in Texas.

TABLE IV. DWELLING UNITS BY TYPE-TEXAS-1940
Rural
All
Urban non-farm
Total dwelling units ..... ........ 1,804,884 845,982 383,239
Vacant ........................
126,488 43,381 23,494
No. reporting state of repair and
plumbing .. .. .......
1,708,045 792,714 365,345
No. needing major repair and
plumbing' .... ..............
346,384 87,925 73,069
No. needing major repair only .. . .
52,642 40,539
8,864
No. needing major plumbing installations only .. . .... .. ... . . .
089,168 196,668 168,660
SOURCE: 1940 Census of Housing.
IDwellings needing Itmajor repairs" are those requiring repairs

or replacements which if neglected would impair the soundncss
of the structurc and creatc a haza rd to its safety as a residence.
Dwellings needing "major plumbing" are those without a Bush
toilet or without running water .

. The 1946-1947 requirements for new housing
to provide adequate shelter for veterans arc somewhat greater than the average annual requirements
during the next decade. The national goal set by the Wyatt Emergency Housing Program has not
been formally apportioned among the states," but it is estimated that Texas' share of the nation's twoyear veterans' housing goal is construction of 135,000 new units by December 31, 1947, including
118,000 units in non-farm areas.
•

The potential demand for new dwelling units is probably not overstated by these estimates of
housing needs. If, as seems likely in view of the rising trends of marriages and births, the rate of
"family formation" prevailing during the 1930's continues, construction of 38,000 new dwelling
units each year will be necessary in Texas to provide living accommodations for new families. Moreover, replacing of depreciated, destroyed, and subTABLE V. GOALS AND ESTIMATED POTENTIAL
standard units could swell the State requirements
DEMAND FOR NEW DWELLING UNITS
during the next decade to construction of 60,000
- -Number of units---- non-farm and 15,000 farm units annually.
Eleventh
Texas
District
U. S.
The Capacity of the Housing Industry
1946-1947 vctcran's housing goal!. 135,000 158,000 2,700,000
1946-1955 average annual potenA substantial increase in activity above present
tial demand 2:
or
pre-war levels would be necessary in the housing
Minimum cstimate. . . . .
40,000
50,000
820,000
Maximum estimate. . . . . . . .. 60,000
75,000 1,260,000 industry and in ancillary industries in the SouthEleventh District and Te.xas estimates based on national data.
west in order to satisfy the estimated requirements
!lncludes temporary units.
for new dwelling units. As the accompany Table
'Permanent, non-farm units only.
VI indicates, fewer than 30,000 conventional nonfarm dwelling units have been built annually in Texas ·each year since 1941,' and at the peak of
activity in 1941, the housing industry in Texas provided only 39,500 new non-farm units. As has been
pointed out, estimates of the potential demand for new housing during the next decade range from
40,000 to 60,000 non-farm units annually and the Veterans' Housing goal calls for construction of
118,000 non-farm units in the State during 1946 and 1947.
'Estimates of the magnitude of the present housing deficiency are subject to large margins of error since they require
broad assumptions as to population increase, composition and location, and assumptions relative to depreciation and destruction of houses.
"The smaller estimate by F. W. Dodge Corporation; the larger by the National Housing Agency.
6N ational Veterans' Housing Goals:
Total
Temporary Units
Conventional Houses
Permanent Prefabs
1,200,000
250,000
1946 . . . . . .
700,000
250,000
1,500,000
1947 . . . . . .
900,000
600,000
2,700,000
850,000
250,000
Total 1946-1947 . . . . . . 1,600,000
'The Bureau of the Census reports that 360,000 non-farm dwelling units were constructed in Texas between 1930 and 1940,
an average of 36,000 units annually, but the Census data include such non-conventional habitation as tenantable lofts and
houseboats.

MONTHLY BUSINESS REVIEW

100

When the war ended, the construction industry was not in a position to undertake residential
construction on a large scale immediately. During the boom in private residential construction in 1941
and the first half of 1942, residential construction activity expanded rapidly, efficient work crews
were organized throughout the District, and production of building materials was expanded. When
private construction was drastically reduced by
TABLE VI. NEW DWELLh'lG ill'jITS STARTED, TEXAS government restrictions in 1942, activity was
P eriod
Ko. of non·f:.rm units'
shif ted to construction of publicly financed resi1940 . ... . .. ...
. . . ..... . . . .
. . . .. ... .. ... . 35,100 den tial projects and maintained at a high level until
39,500 early 1943. Shortly thereafter, publicly financed
1041. ... . . . .. . .. . . . . . . . . . .. . . . . . ....... . .. . . . .
1942 .... . ...... .. . . . ... . .. ...
.. . . .. .. .
26,900
residential construction was also curtailed. Restric. . ... .. . . . . . .. ... . . . ... .... ..... . 29,900
1943 .. ..
tions
on privately financed construction were not
1944 . ... .. . . . . . . .. . . . . . . . . .. . . . .. . . . . . . . . . . . . . . 17,600
removed,
and military needs for construction had
.. . . . ..... .. . . 26,300
1945.... . .. . .. ............. . . . .
been
largely
met. Consequently, the construction
lBureau of Labor Stat istics data are estimates of new residenindustry
rapidly
cut back its operations. Constructial construction in all non-farm areas based on the nu mber of
tion
labor
drifted
into war plants or left the area,
permits issued.
and m any brick plants, sawmills, and other building material manufacturers reduced operations or shut down . When restrictions on residential construction were relaxed after the end of t he war, it was necessary to reassemble a construction labor
force and expand production of many building materials before residential construction on a large
scale could be initiated. Residential construction soon increased markedly above war levels, but as
Table VII indicates, the number of dwelling units started during the first five months of 1946 was
small compared with the number of units required t o satisfy estimated minimum needs. Furthermore,
maldistribution of materials, inadequate supplies of skilled labor, and serious shortages of lumber, tile,
plumbing, wall-board, and other essential compone nts have delayed completion of dwellings. Surveys
conducted in Dallas indicate that only about one-fifth of the 600 units for which building permits
were issued in March had been completed by July 15, and similar lags in completion are reported for
other metropolitan areas in the District.
Ultimately, however, the housing industry should be able to construct new dwellings in sufficient
numbers to meet the demand contemplated in the m ore sanguine estimates of potential annual requirements. Scarcity of lumber is likely to continue for
TABLE VII. NUMBER OF DWELLING UNITS STARTED some time despite the acceleration of production in
AND REQUIRED·
recent months, and use of substitute materials to
No. units star ted'
No. units
alleviate
the shortage may be necessary. Shortage
- - - - - - - - required'
1942-1945
1946 t 1946-1947
of cast iron soil pipe, including fittings, is likely to
Amarillo . .. . . ..... . . . . .....
1,282
625
1,800
rem ain equally acute since the development of new
Austin . . . . . . . . . . . . . ...
1,198
1,179
3,680
residential areas will severely tax the existing capacBeaumont . . . . . . . . . . . . . . . . . .
2,104
198
3,100
Corpus C hristi. .. . ... . . .....
1,724
401
3,470
ity of the industry, which is limited by declining
~i~:~.·. ·. : : :: : :: ::: ::::::: 6'k~
3, ~~
1~:~~
supplies of pig iron and scrap. Production of most
Fort Worth .
. . . . . . . . . .• .
6,962
2,248
7,530
other essential building materials can be expanded
ii~~'t';~f " : :: : : : : : : : :: :
2,4~g 1~:?~ rapidly, however, by utilizing existing plants more
San Antoni05. . . .. . . ...... . .
5,301
1,593
10,630
intensively. Brick, tile, cement, glass, wall-board,
Waco . . . . . . . . . . . . . .
923
372
2,530
Texas met ropolitan . . . . . . 34,718
12,475
68,830
insulation, and most other building materials are
Shreveport. . . . . . . . . . . . . . . . .
1,005 .
514
3,340
d d f
. I hi h
b d t
11 representative T exas cities
pro uce rom raw materIa s w c are a un an
of 10,000 to 50,000'.... . ..
5,651
1,981
10,487
and manufactured in plants which can be con·"Number started" based on permits issued. The actual nUffi- structed and brought into operation fairly quickly

g:

bel' of starts is probably slightly smaller.
fFirst five months.

lBureau of Labor Statistics estimates based on building permits.
' E stimated number of new dwelling units needed to meet veterans' housing goal.
3Includes Highland P ark and University P ark.

provided adequate supplies of labor are available.
Shortage of labor in the building trades, although a
limiting factor, probably will not be a permanent

condition and may be offset to some extent by more
judicious use of available skilled workmen on large
scale projects. Construction of 50,000 to 60,000
non-farm units and 10,000 to 15,000 farm units in
.
1947 and each year thereafter in Texas does not
appear to be an unattainable objective so far as capacity of the industry is concerned.

'Includes Galena P ark, Bellaire, and South Houston.
'Includes Alamo Heights.
'Brownsville, Bryan, D enton, Laredo, Lubbock, Ma rshall, Port
Arthur, San Angelo, Sweetwater, Tyler and Wichita Falls.

101

MONTHLY BUSINESS REVIEW

The Effective Demand for Housing
Expenditures upon residential construction are closely related to changes in the aggregate income of individuals and to variations in construction costs. An expansion of income payments is ordinarily reflected quickly in an increase in residential building, as the chart comparing the trends of the
aggregate income of individuals with the total expenditure upon residential construction shows. The
divergence of the trends between 1942 and 1945 reflects the effect of government regulations restricting residential construction which were enforced throughout the war. Had those restrictions not been
in effect, expenditures on residential building would have tended to advance to new peaks as they did
when the restrictions were removed in October, 194 5.

VALUE OF

INCOME PAYMENTS AND
RESIDENTI AL CONSTRUCTION - TEXAS
AWARD~

INCOME -BILL I NS OF D LLARS

- MILLION S OF DOLLARS

400

8

I/o

6
4
2

o-

30 0

TOTAL INCOME PAYM E N V

J. - -

- T

"
/
I-

~~I........ ,

I

_ ..--. -

I 00

- TOTAL VALUE OF........
/
RESI DENTIAL CONSTRUCTION CONTRACTS .........,- 1940

1938

1942

1944

200

I 946

..

o

SOURCES ; U. S. DEPARTMENT OF COM MERCE, F. W. DOD GE CORPORATION

VALUAT ION OF RESIDENTIAL CONSTRUCTION
PER SQUARE FOOT - TEXAS

SOURCE; F. W, DODGE- CORPORATI ON
* EST[MATED

The demand for new residential construction is also extremely SensItiVe to vanatlOns in construction costs, however, and continuation of employment and individual incomes at high levels does
not stimulate a permanent increase of residential construction if the cost of building becomes excessive
relative to the income of the majority of the population. I n order that a sustained volume of residential
construction may be assured, building costs must be low enough to be supported by the incomes of the
large percentage of the population which is in the lower income groups. The rapid increase in the cost
of construction which is occurring gives rise to some doubt, therefore, whether the housing industry
~ will be called upon to provide the large number of dwelling units contemplated in the estimates of
, potential demand. While the housing deficiency remains acute, distress bui lding will probably support
intensive residential construction, but if the upward trends of building costs and land prices continue
and are not accompanied by proportionate increases in f amily income, residential building may not
be sustained at a high level after the minimum shelter n eeds of the community are satisfied.

102

MONTHLY BUSINESS REVIEW

Despite the substantial increase in family incomes which has occurred since 1940, the number
of families which can support high-cost dwellings is small. In 1939, 85 per cent of the families in
Texas received wage or salary incomes of less than $2,000, and 95 per cent received annual incomes
of less than $3,000. Approximately 85 per cent of the families in the State expended less than $30
monthly on shelter, and 95 per cent expended less than $50 monthly in that year. Although family
incomes have nearly doubled since 1939, on the basis of estimates of current income distribution it
appears that approximately 80 per cent of the families in the State are still unable to pay more than
$50 monthly for shelter or to support a residence costing in excess of $6,000 without diverting too
large a portion of current income from essential expenditures for food, clothing, and family maintenance.

~

111

It has been a common assumption that families will utilize their savings to support the purchase
of new homes. Investigations conducted throughout the nation relative to the ownership of liquid
assets indicate, however, that the majority of family units have not accumulated sufficient savings
to support a large down payment on a home. Moreover, most of the families which have accumulated
large savings apparently do not intend to use their surplus for that purpose.
The development of "low-cost" dwellings is also prerequisite to fulfillment of the veterans' housing program. In order to meet the urgent needs of veterans for housing, it is necessary to build a
satisfactory unit at a cost which the average veteran can afford. Surveys of World War II veterans'
housing intentions and ability to pay reveal that at present building costs most veterans cannot compete
for new housing despite the liberal financing policies provided by the Veterans Administration's guarantee of veterans' loans. In Dallas, the typical gross monthly rental (including cost of heat, light, and
cooking fuel) which veterans estimate they can pay is approximately $40; the typical expenditure for a home they estimate they are able to support is about $6,000. Three-fifths of the veterans
who indicate they are planning to buy or build are able to pay less than $50 monthly for housing,
including the cost of taxes, insurance, heat, lighting, and cooking fuel, as well as interest and retirement of principal, and it is reasonable to assume that in many areas in the District the gross monthly
cost of housing which the veteran can support is much smaller. The housing industry would find it
difficult to build satisfactory dwelling units cheaply enough to satisfy such a demand at present material
and labor costs and using present techniques of building.

~

111

Although the construction of low-cost housing units has not been entirely uncommon in the past,
in general, shelter has been provided communities by concentrating upon the construction of medium
and high-cost dwellings for the middle and upper in~ome groups. A large proportion of the population, then, has obtained its housing by shifting into the depreciated dwellings from which the middle
and upper income groups have moved. The present acute need for housing is too great, however, to be
met in that manner.
To alleviate the distress which the housing shortage is causing veterans and others, it will be necessary to provide new dwellings at costs which are within the range of incomes of the large number of
families who, in effect, comprise the mass market for housing and who now are most severely affected
by the acuteness of the housing shortage. Housing to meet the requirements of the average American
family receiving an "average" or "typical" income must be low-cost housing. Easy financing methods
will not alone solve the problem, although they may contribute to the solution.

If the low and low-middle income groups of our population are to be adequately housed, the
alternatives seem to be either subsidization in one manner or another of residential construction or a
greater application to residential construction of the principles of mass production . which have been
so successful in reducing costs in other durable goods industries. Surely the latter alternative is highly
preferable. It is evident that the techniques of mass production designed to lower unit costs have not
been fully applied to the construction of housing and, consequently, we have not been able to lower
costs sufficiently to tap the large potential demand of the mass of consumers for adequate housing.
It is recognized that there are barriers to such a modification of building techniques and practices.
The barriers may be serious, but they should not be considered insurmountable. The advantages which
would accrue, both economically and socially, to all segments of the population and the financial
benefits to the construction industry would be so great as to justify every effort toward achieving the
objective of low-cost housing for the mass market.

4

103

MONTHLY BUSINESS REVIEW

Review of Business. Industrial. Agricultural. and Financial Conditions
In the year which has passed since the end of hostilities in va:uum cleaners, electric ranges, and sewing machines. The orthe Pacific, industry in the Eleventh Federal Reserve District der pl;\ces the same limitations on manufacturers' photographic
and in the Southwest genera 11 y has achieved a level of activity cq uipInl n t and some building materials.
which closely approximates, and in some particulars greatly exIn district department stores which report a monthly breakceeds, the level of June 1945, when war production dominated down of sales by type of transaction, charge account sales durthe industry of district and nation alike. Construction activity ing June constituted 54 per cent of total sales, as compared with
in general, measured by the value of contract awards, has more 43 per cent at the end of hostilities in August 1945. The expanthan trebled, while residential construction has increased more sion thus revealed in the use of retail credit by consumers may
than tenfold. T he high level of district productive enterprise be attributed in part to higher unit prices of many items but
is reflected in a total of nonagricultural employment in general, in larger part to the buying of both non-durable and durable
and of fac t ory employment in particular, greater than in any goods in greater variety. The relatively small proportion of duraother peacetime period. Timely rains in portions of West and ble goods as yet coming into the market is indicated by the
Northwest Texas in late June and early July and generally open fact that percent.gewise instalment sales in both department
weather in the eastern part of the district during the past month stores and furn iture stores have shown practically no change in
improved the farm outlook. Hot, dry weather, however, dur- recent months.
ing the latter part of July over most of the district has
\'\fith the purpose of adapting controls on consumer credit
depleted moisture and caused some deterioration in crops
and ranges. In the New Mexico and Arizona portions of the to changing relations in supply and demand, the Board of Govdistrict protracted drought has reduced the condition of ernors of the Federal Reserve System by issuance of Amendranges to the lowest point since the middle Thirties. The July ment 20 to Regulation \'\f made effective on July 5, 1946, the
1 report of the United States Department of Agriculture on following five modifications in the provisions of the Regulathis year's crop conditions reveals that total acreage of crops tion:
in Texas for the year is about equal to the acreage harvested in
I. Instalmen t sale credits in amounts in excess of $1,500 are
1945, with anticipated vields somewhat higher than last year in exe mpted from the requirements of the Regulation.
such importa nt crops as corn, wheat, potatoes, and peaches. Oats,
2. Attic ventilating fans, automobile batteries and accessories,
rice, and hay are expected to fall somewhat below the relatively
high yields of 1945. Department and furniture store sales in and tires and tubes for passenger automobiles are removed from
the district during June and July declined seasonally from the category of "listed articles."
the high levels of the past spring but showed considerable
3. Combination kitchen or other household units arc added
gains over the same months of last vear both in sales and in ro Group A of the "listed articles" if they incorporate cook
. stocks.
.
stoves or ranges, electric dishwashers, ironers designed for household use, mechanical refrigerators of less than 12 cubic feet
BUSINESS
capaci ty, or household washing machines.
Operation of seasonal factors during June resulted in a decline of 10 per cent below the May level in sales of monthly
WHOLESALE AND RETAIL TRADE STATISTICS
reporting department stores of the district. Compared with the
::::::~~P~rere~n~~e~CM~D~~~in~~~~::::
Number :
Nets.'LleaStoebt
same month of last year, however, June sales were up 32 per
of
June 1946 from
Jan. 1 ~
June 1946 rrom
cent, thereby slightly exceeding the 31 per cent margin of in- Pct.'l.i1 trade:
reporting
Jllne
1hy
June 30.1946
June
May
firms
1045
1046
from H)45
19{.5
194.6
Department litotes:
crease which May sales of this year showed over the correspond Total t1 th Dist....
48
+32
-10
+28
+ '8
+ 5
ing month of 1945, and holding the cumulative increase in sales
Cnrpu8 Christi
4
+25
- 8
+21
+21
+ 5
7
Dalbs
.
.
...
.
+35
-14
+31
+25
+ 3
for the first six months of this year over the same months of
Fort Worth ..
4
+25
-13
+22
+14
+ 5
7
Houston . . ..... .
+47
- 3
+33
+25
+ 6
last year at 28 per cent, the same cumulative increase as for the
SaIl Antonio . .. . .. .
5
+25
- 9
+28
+14
+ 3
first five months of the year. Preliminary reports from weekly
+29
- 1\
+24
3
Shreveport, La.. .. .
18
+23
-12
+21
+ '0
+ '8
Other cities . .... .. .
reporting department stores for the first two weeks in July
Retail furniture:
indicate that because of seasonal influences sales are currently
'flltHl llth Disl.. ...
49
-H6
- 3
+30
+10
D!lllos . ..
3
+27
- 7
at the lowest level since January, though running well ahead
Houston..... ...
:;
+42
+13
Port Arthur......
3
+45
- ]3
of the same weeks of last year.
Ran Antonio.... .
3
+36
- 8
Sh
rcycport,
L!
..
3
+62
- 4
+2i
+i3
Merchandise st ocks of monthly reporting stores increased 5
trade:·
per cent during June over the previous month and 18 per cent Wholt'&'lle
Machiner,v eqp't &:
supplies. _. . . . . . .
3
+64
+60
.. .
over June of last year. In contrast with a negligible rise during
Automotive supplies
5
+31
-IS
No chg.
- ()
May, orders outstanding in June exceeded those of the previous
8=J~~~·.1~~~ol'8). ~~
t~~
=1
~
+20
+lg
~
month and of the same month last year by 29 per cent and 61
Hnrdware . .. _.
13
+16
- 2
+38
+21
+6
per cent, respectively.
· ColDpileJ by United StaWs Bureau of (A)n:rus (wholesale trade figures preliminary) .
tStocks at end of month .
June sales of reporting furniture stores in the district showed
a slight decline of 3 per cent, as compared with sales in the
INDV.xES OF DEPARTMENT STORE SALES AND STOCKS
previous month, but were 46 per cent greater than t hose of
Daily average salea-(l936-1939-100}
June 1945 . Furniture stocks in retail stores showed increases of
Adjusted
Unadjusted'
May
May
April
June
April
June
June
June
10 per cent over the previous month and of 30 per cent over
1946
1046
1946
H145
1946
1946
1945
194&
June a year ago.
228,
342
352
20Sr
322
335
368
District . ... . 313
352
3.14
270
331
336
221
374
Da!lr.."l ••• • • . 307
D ealer's stocks of furnit ure and household appliances may be Houston .... . 336
387
333
329
253
320
32&
220
~proved aft er August 15, effective date of a Civilian ProSlook.--(1936·1989 -1(0)
~uction Administration order which forbids manufacturers of
Adjwt.ed
UnadjuJted'
those items to hold in inventory more than thirty days' output
May
April
June
June
May
April
June
June
1946
1045
1946
1945
1946
1946
194&
19'6
of their factories or more than a "practicable minimum work253
241
209
201
208
203
246
229
District . ....
ing inventory," whichever is less. Important consumer articles
·UDadju.ted ror aeaeoosl varie.tioD.
affected include furniture, refrigerators, washing machines,
,...Reviaod.

•

=

104

MONTHLY BUSINESS REVIEW

4. The cost of "listed articles" included in loans for repairs,
alterations, or improvements is brought under the Regulation.
5. Loans for hospitals, medical, dental, or funeral expenses
are subject to the Regulation unless made on borrower's written
statement that the proceeds are to be paid over in amounts specified in such statement to the creditor or creditors whose
names, addresses, and occupations are set forth therein. In addition to the statements already prescribed, the borrower must
state he is unable to meet the requirements of the Regulation
with income available for the purpose and failure to obtain the
extension of credit would cause undue hardship to him or his
dependents.
AGRICULTURE

.

The 1946 total acreage of all crops for harvest in Texas is
estimated to be about equal to that harvested last year, according
to the July 1 crop report of the United States Department of
Agriculture. Throughout most of the Eleventh District unfavorable weather in the form of excessive rains in some areas
and drought in others during the latter part of the spring planting season prevented the seeding of the full intended acreage
of many crops. The wheat acreage harvested in Texas this year,
however, was 1 per cent greater than that of last year. The
acreage of other major crops is about the same as in 1945. The
growth of crops was encouraged by generally favorable weather
from the middle of June to the middle of July throughout
most of the district, with the exception of the unseasonally
wet upper coastal counties and of some areas in the far west
and on the High Plains, where drought conditions persisted.
During the latter half of July dry weather and abnormally
high temperatures in most areas retarded the growth of crops
and range feeds and reduced stock water supplies.

°

The United States Department of Agriculture estimated the
cotton acreage in cultivation in Texas on July 1 this year at
6,350,000 acres. This estimate, approximately four per cent
above the small acreage in cultivation on the same date last
year, is only about two-thirds of the 1935-44 average, aod is
the second lowest cotton acreage since 1895. The United States
acreage was estimated at 18,316,000 acres, compared with 17,749,000 .cres on the same date last year and a IO-year average
of 25,608,000 acres. In the west and northwest districts of
Texas, extremely dry weather throughout the planting season
reduced the acreage below intended .mOWlts, while in the central and eastern part of the State excessive moisture by delaying
planting caused some loss of acreage. An increase in cotton acreage over 1945 was indicated in irrigated Trans-Pecos and lower
Valley counties. Over most of the district, weather conditions
during July were favorable for the growth of cotton and the
control of insect infestations. Insects are still numerous, however, in central and eastern Texas. Open weather permitted
needed cultivation in the eastern portion of the district, and
most fields were clean as the month ended. The drought in the
northwestern part of the district was partially broken by rains
in the latter part of June, and most of the acreage that had been
brough t to a st and in that area was making good progress at
the end of July.
The acreage of corn for harvest in Texas this year was estimated on July 1 at 3,968,000 acres, compared with 4,177,000
acres last year and the 10-year average of 4,972,000 acres. The
forecast production of 67,456,000 bushels for this season is
slightly above the 1945 crop, but about 16 per cent below the
19 35-44 average of 80,209,000 bushels. Excessive rainfall in
the eastern part of the district during the planting season caused
some reduction in intended corn acreage. With favorable grow-

ing conditions, however, in June and July, early planted Corn
is largely made and in good condition. Showers arc needed on
late plantings except in the southeastern counties, where mois- ~
ture is still adequate.
•
The 1945 Texas wheat crop was estimated on July 1 at 53,613,000 bushels, compared with 41,778,000 bushels harvested
last year aod the 1935-44 average of 33,557,000 bushels. Cool,
cloudy weather with showers during the latter part of the growing season partially offset the earlier damage done by the drought
in the Panhandle and resulted in a better yield than had been
expected. The estimated 5,106,000 acres of wheat for harvest
is the largest wheat acreage on record and compares with 4,642,000 acres harvested in 1945. The indicated yield on July 1 of
10.5 bushels is above the nine bushel yield last year but slightly
below the 10-year average of 11.1 bushels. Oat production was
reduced by unfavorable weather early in the year and by green
bug infestations. The indicated barley crop for 1946 is slightly
below that of last year. Rice production is expected to fall below the large crop of last year but will be well above the 193544 average of 13,926,000 bushels.
Tentative estimates for Texas place the acreage of grain sorghums grown for all purposes at 6,424,000 acres, compared
with 6,298,000 acres in 1945. Planting operations were completed in the High Plains in July, while in southern counties the
harvest made good progress during the month. The estimated
acreage of 1,385 ,000 acres of tame hay for harvest this season
is three per cent bclow the 1945 acreage. The indicated production of 1,316,000 tons is slightly below that of last year but
11 per cent above the 10-year average.
This year's estimated peanut acreage of 838,000 acres is about
five per cent below the acreage for last year. From an acreage of ..
Irish potatoes estimated at 62,000 acres, the indicated produc- ~
tion on July 1 was 5,642,000 bushels. The acreage is about 11
per cent above that of last year, and production is about 21 per
cent above last season's crop. The acreage in sweet potatoes Was
estimated at 64,000 acres compared with 52,000 acres last year,
and production was expected to reach 5,120,000 bushels, a 13
per cent increase over last year and over the 10-year average.
Favorable weather in June and the first part of July in most
commercial vegetable districts encouraged the growth of crops
and facilitated harvesting. Since early June there has been a
heavy movement of watermelons and cantaloupes to market.
Preparation of land and seed beds for ea rly fall crops in the
southern part of the district has made good progress. Some
planting direct to fie lds has occurred in the lower Valley,
and transplanting of fall crop peppers and tomatoes has been
progressing in the Winter Garden area.
Fruit crop prospects in Texas arc favorable. An above average
peach crop of 2,496,000 bushels was forecast on July 1. Citrus
orchards started the summer period in good condition. Many
orchards were requiring irrigation in July, however, in spite of
good rains received in most citrus areas during June. Trees are
in healthy condition; the fruit is well sized; and the drop in
June was very light.
Late June rains in the central and southern High Plains of
Texas relieved the drought that had prevailed for months in
that section, and summer range feed prospects are fair to
good in all major areas, except in the western Trans-Pecos
counties. Range grass, however, is beginning to dry in widely
scattered counties from north Texas to the Edwards Plateau, "
and the growth of new range feeds has been retarded by the .
high temperatures which have depleted surface moisture. In
Arizona and New Mexico the drought situation continues,
with the poorest July 1 range feed conditions since 1934.

105

MONTHLY BUSINESS REVIEW
Stock water is short, and prospects for late range feed are
"enerally very poor. Cattle, calves, and sheep are in good flesh
~in all areas in Texas except in the Trans-Pecos, where some
shrinkage is reported. Livestock in the High Plains counties
were losing weight prior to the rains late in June, but at
present with the growth of new grass their condition is improving. Cattle continued in good condition in Oklahoma,
but in New Mexico livestock arc shrinking, and calves and
lambs are showing the effect of dry, short feed. Some forced
movements of cattle and sheep from New Mexico ranges and
other dry areas in the west rn part of the district has been
reported. In Arizona cattle and sheep ha ve held up well until
recently, but are now beginning to show the effects of dry,
short feed and arc in only fair condition.
The movement of cattle and calves into the Fort Worth and
San Antonio markets in June was heavier than in May, but considerably lighter than in June of last year. Receipts of hogs at
these two markets fell far below those of May this year and
of June 1945. The movement of sheep increased considerably
during June over the pervious month, hut continued to fall
below the rate for the same month of last year. Receipts of
cattle and calves at these markets rose sharply after July 1,
hogs increased slightly, but receipts of sheep were greatly reduced. For the first six months of 1946 cumulative receipts of
cattle and calves totaled 651,455 head, or only 71 per cent of
the receipts for the same period last year. Sheep receipts of 1,~ 98,983 head were 89 per cent of the total for the same period
r ast year. On the other hand, hog receipts for the six months
were 353,023 head, or 11 per cent above the corresponding
period in 1945.
The mid-June price report of the United States Department
of Agriculture indicated that prices received by farmers for
most crop and livestock products have continued to rise. The
most significant increase occurred in beef animals and sheep.
Small gains were registered by wheat, corn, oats, barley, cotton,
and cottonseed. Butter and milk also registered smali increases,
while potatoes, sweet potatoes, and hay declined significantly.
Prices of most farm commodities have risen sharply since July
1. A particularl y marked rise has occurred in the prices of cotton) corn, wheat, and grain sorghums.
FINANCE
The daily average of combined gross demand and time deposits of member banks in this district for June declined $3,500,000 from the May average, continuing at a somewhat reduced
rate the generally downward trend in evidence since January.
Nevertheless, the average of these deposits in June, amounting
to $5,444,000,000, exceeded the average for June 1945 by
$73 5,000,000. The decline from May to June this year of $8,926,000 in gross demand deposits was due principally to Treasury withdrawals from war loan accounts at depositary banks
and the redemption in cash of a substantial amount of Government securities. Time deposits increased further in conformance
t Vith the trend since the beginning of the war.
The average reserve balances of member banks in this district
which had shown a downward trend from February to April
increased during May and June and in the latter month were
only about $4,000,00 0 below the all-time peak recorded in Jan-

CASH FARM INCOME
(Thousands of dollars)

--Marth 1911&&------Totalreceipta...----Receipt. from- March
.March
Jan I to March 3 1,
Crops Livestock·
1~6
1945
1946
19~5
111.472
13.427
114.899
114.000
134.270
13~.399
Arizona ........•••.•.•
6.232
4.814
11.086
12.817
37.497
12.199
Louisiana. ...
1.291
3.930
1.221
0.661
13.859
17.730
New Mexico ............ .
9.162
16.068
25.230
29.581
77.350
91.343
Oklahoma . .........•.•..
36.282
41.962
78.244
78.616
213.654
234
.995
T.....
Total. ........ 164.439

170.241

1134.680

1140.471

1376.830

1421.666

·!oeludet recejpta [rom the sale of liveatock and livestock products.

SOURCE: United States Department of Agriculture.
CROP PRODUCTION-(Thousand6 of units)

Units
Bushels
Winter wheat . .
Bushels
Corn ...•..
BusHels
Oats ... .
Bushels
Barley ... .
Tons
Tame hay ..... .
Potatoes, Irish ......... . . Bushels
Potatoes, sweet ......... . Bushels
Rice . . ....... ... . . ..... . BIISh.1s

_--Texas--_-Ele\'enth DistrictEstimated
Estimated
HI45
Jul)' 1, 1946
1945
July 1, 1946
42.546
13.613
41.778
54.287
80.183
~7.4!6
66.832
17.400
37.371
42 .411
40.711
47.001
9,1673,616
3,857
8,4721.937
1.316
1.344
1.884
5.433
5.642
4.648
6.406
16.098!
~.120
4,124
16.500\
41.0281
16.400
18.000
37.1108

-Arizona, New Mexico, Oklahoma and Texas.
tLouieiana and Texu.

tLouisiaoll., Oklahoma and Texa!.

SOURCE: United States Department of Agriculture.

ACREAGE-(ln tho,sand. )
TCJ:1\8
Eleventh District - - _
Fo, - - Harvested - - Fo,
_ - Harvested-harvest.
Average
harvest
Average
1935-44
11H5
194.
1945
193544
1946
12.925
6.350
9.454
6.133
8.63 1
8.'49
Cottont ..
3.968
8.514
7.023
4.177
6.802
Corn ..... ...............
'.972
5.106
7.4621
10.4911 11.2331
3.031
4.642
Wheat ... ...............
1.62~
2.921
3.038
2.852
1.404
1.806
Oata .....
5971
5051
4331
226
218
266
Barley ...
27
18
15
Rye ....
M~l
~~i ~g~l
100
292
400
RUle .... .... ...... .....
60·
90·
76
25
63
Fllu: ..
2.727
3.182
1.385
3.091
1,207
1.431
Tame hay ..
212
673
753
212
214
Wild hay .....
73'
140
135
141
56
62
55
Potatoes, Irish ...........
U-i5&
175°
20n9
52
64
59
Potatoes, sweet ..... , ....
8.730
9.375
7.238
7.2~1
9.340
6.363
All sorghum, except syrup.
1,1{)49
1,145&
7566
549
882
838
Peanub3 (aloDe) ..........
229
783 8
3773468
537
254
CoNPCas (alone) .....

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

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

9'·

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

.Texaa, Ari.tona, Louisiana, New Mexico and Oklahoma. t Acreage in cultivation, July 1;
tAri.tona, New Mexico, Oklahoma and Texa8. §New Mexico, Oklahoma and Texas. ·Louisiunn. and Tems. bArizona, Oklahoma. and Texas. 61.ousiiana, Oklahoma and Texas.

SOURCE; United States Department or Agriculture.
LIVESTOCK RECEIPT8-(Nwnbe,)

CuUie ......
Calves . ..... ..•.•...
Hogs .....
Sheep ...•

_ - - F o r t WorLh...---_---San Antonio - -June
June
May
June
Juno
May
1946
1945
1940
1946
1945
lIH6
64.683
79.493
60.328
20.243
28.455
19.722
22.330
28.308
18.174
9.1 86
22.517
12.256
12,196
38,028
37,586
1,538
4,431
7,400
546.526 586.646 433.027
107.069
111.392
76.591

COMPARATIVE TOP LIVESTOCK PRICES

(Dollars per hundred weight)
_ - - F ort Worth
May
June
June
1945
11H6
1946
$17.35
116.50
Deer steers . .. ...... . ..... 117.35
16 .00
14.00
16.50
St~er steers, . ..........
17.35
17 .3.
16.25
Heifers and yearlings .....
1a .00
14 .25
15 .00
Butcher cows.
14 .60
16.50
17 .35
Ca1vea ......
14.65
14.1lS
14 .M
Hop ... .... .
14.75
15.50
11 .50
Lambe ..... .

June
1946
117 .00

17.00
14 .00
17 .00
14 .65
14 .25

San Antonio - - Juno
May
1945
1946
S15.25
S15.25

ii:i6

11.10
14 .25
14 .55
12 .7~

. isiiO
14.00
16.00
14 .65
13.75

uary. Throughout the period, there was a steady increase in
required reserves and a consequent decrease in excess reserves.
In June, excess reserves averaged approximately $105,000,000
or nearly $40,000,000 below the January average.
The seasonal upturn in the circulation of Federal Reserve
notes of this bank that began in May continued during June
and the first half of July, reflecting in parr the heavy demand

MONTHLY BUSINESS REVIEW

106

for curren cy over the July 4 holiday week end, and total circulation on J uly 15 aggregated $59 7,900,000, or about $4,200,0 00
higher t han a month earlier. In consequence of the $22,500 ,00 0
decline in Federal Reserve note circulation during the first six
and one-half months of the year, the increase ill total circulation as compared with a year earlier was only $16,000,0 00 on
July 15, as against $72, 00 0,000 at t he beginnin g of the year.
T otal depesits of weekly reporting member banks in the district decreased $50, 100,000 during the four weeks ended July
10, bringing the net decline since mid-January to $24 0,000,000.
T he decline during the four weeks, as well as for the six months
period, resulted chiefly f rom the Treasury's withdrawals of war
loan deposits at reporting banks. During t he first four months
of the year, there was a sharp decline in interbank depesits as
count ry banks withdrew balances from correspondents to obt ain funds to meet war loan calls and to increase loans and investments. The recent expansion in interbank depesits, however, has partially offset the earlier decline. The decrease in total
deposits has reflected largely the effects of the debt retirement
program of the Treasury. Since a larger proportion of the securities redeemed in cash were held by the banking system, only that
portion of the funds disbursed to redeem securities held by nonbank investors flowed back to the banking system as privat e
deposits.
During the four weeks between June 12 and July 10, the
inves tments of repertin g banks declined $4 2,300,000, reflecting chiefly the decrease in certificates of indebtedness and Treasury notes, most of which were associated directly with the
deb t retirement program. Total investments have declined by
$160,000,00 0 since mid-January.
The decrease of $1 0,300,000 in loans during the fou r weeks
reflected the liquidation of $6,900,000 of commercial, industrial, and agricultural loans, and $9,400,000 of loans to others
than brokers and dealers for the purpose of carrying securities.
The latter loans, represent ing mostly advances for the purpose
of carrying Government securities purchased during the Victory Loan D rive, have declined slowly since the peak was reached
on December 12, 1945, but there has been an accelerated liquidation in recent weeks. Nevert heless, the total of these loans outstanding on July 10 totaled $132,500,000. Despite the recent
decline in commercial, industrial, and agricultural loans, the
total on Jul y 10 was $106, 000,000 higher than a year earlier.
The continued upward trend in real estate loans and in " all
other" loans represents a continuation of the upward trend that
has developed as a result of the increased building activity and
of the improvement in the supply of consumer goods.

CONDITION STATISTICS OF WEEKLV REPORTING ME MB ER DA NKS
IN LEA DI NG CIT IES-El eveIl1h Federal Re!er l'e Dist rict

(Thousands of dollars)

1940
Total gold certificate resea:ves . . .
Discounts for member banIa! . . . .
Foreign loan8 on gold .............
U. S. Government securities
Total earrung assets. ...........
Member bank reserve deposita . . .
Federal R eserve Notes in actual circulation . . .

.. .. .... ...

1489.8110
None

3.840
915.382
!119,222
700,1 34

697.938

J une 15,

1461.435
76
NOlle
84.0,74 2
840.817
093.133
582.299

1503.325
144
3.840
896.879
900.863
762.702

1946

593,713

1,41 6,826
74,604
409,979
269,561

613,208
145
49.329
367. 447
273,339
1,221,599

204.025
383.783
590.465
NOlle

Ju ne 12,
1946
12,069,427
680.394
401,261
7.567
141.874
41.8019
288
87.545
1.389.033
43.530
414.928
215.808
1147.285
145
67.337
400.931
235.54 6
1.457.893
308,762
288.525
556.sa6
None

(Thousands or dollara)
June

June

1946
Abilene ....•. " ... . . ,," 1 23.394
Am&rillo .. . , .
59.186
96,296
Austin ..... ..
Bea.umont .... .. , . . . .. . ..
57.355
6.\,035
CorpUll Christi, . ....•... .
6.528
COnlicana . •• •. •.••.•.. . .
Dallas . .• . • . •.•.• • .•.. . .
71 3.020
El Paao ......... . ..... . .
83.275
Fort Worth . .. ........ . ..
254.322
04,007
Oalveaton . . . .......•• . •.
Houston .. .. . .. . .. • •.•. . .
672.717
Laredo ... . . ... . . ..•••...
15.140
41.251
Lubbock,., . . ,,"""" .
Monroe, La .. . . . ...•.....
22 .051
Port Arthur ... . ...... . ..
25.522
10.526
Hoewell , N. M .. .
San Angelo ... .. ........ .
24.872
208.826
San Antonio ... . .. .. .....
89.786
Shreveport, La•...•. . ....
Teurkana. . ...•. . . . . ....
20.251
44,778
Tucaon. MI ..... ..... . . .
29.562
39.044
39.026
Wichita Falls ........... .

~~~: ::::::: ::: ::::::::

1945
18.208

Pctg.change
over year

H8
+ 16
+ 19
-8
+t
- 20
+ 4
+ 15
+ 2
+t
+2
+8
+ 22
+23
+ 2
+ 10
+ 18
+15
+ 1
- 10
+ 24
+ 14
+2 7
+ 4

51,197

81.0sa
62,065
65.029
8.184
6801.839
72.538
250.228
53.999
661 .860
14.007
33,731
17.951
24.904
9.550
21 .123
181 .707
88,754
22 .458
36.213
25.8010
31 .248
37.043

Mny

1946

Pctg.chana:e
over month

23 ,171

55.207
82.249
57.324
63 .809
7.958
683 ,332
87.690
223.428
53.23 5
656.098
16.379
36.8016
24,560

24.671
11.353
22,81 2

205.475
93, 707

19.891
49.333
30.279
37.83 7
39.043

+ 1
+7
+17
+t
+2
-1 8
+4
-5
+14
+1
+ 3
- 8
+12
- 10
+3
-7
+ 9
+2
- 4
+2
- 9
-2
+5
-t

•

52 .605.697
Total-24 cities .
... ,. 12.696.270 S2.5Sli ,319
+6
+3
·Includes the li gures or t wo banks in Texarkana, Arkansas, located ill the Eighth District.
tChange less than one-half or one per cent.

GROSS DEMA N D AN D TIME DEPOSIT S OF MEMBER BANKS
E leventh Federal n eierve Distriet
(Avera.a;e or daily figures-Thouaa.nda of dollars)
Combined total
G."",
demand
1944 .. . .. .... . 13.361.412
June
June
19-46 ..
4.299.715
February 1!J.46 . .. . .. . ... 5,097.096

Man:!>
A il

11146.
1946 .

J une

1946 . .

~r.y

1946 ..

5.101.702
. 5.012.002
4,{l66,772

. 4.957.846

Time

Reserve city baw
a .""
demand

1296,955 11.749.241
409,205 2.1S9.248
457.348 2.620.309
465,564 2.592.431
472,155 2.520.721
480.926 2.480.288
486.339 2.461.342

Country bauQ
a"",
demand

Time
TiIDI!
1184.628 11 .612.171 11 12.327
263.505 2.110.467 145,700
293.575 2,476,787 163. 773
296,725 2.509.271 168.83 9
300.908 2,491,341 171.247
305.520 2,486,484 175.406
310.839 2.49M04 175.500

SAVINaS DEPOSITS
J une 20, 1046

Fort Worth .. .... .... .. ..
Galveston .• . . . . . • •.••• . •
Howton . ... .•. . ..•.. . . ..
Lubhock ... . ............
Port Arthur .•.•.. , • . • • • •
Sao Antonio . • ••. • . .•••••
Shreveport, La.... • .•.• . •
Waco .......•.. . ...•. • . •
Wle:hita Fa.lls ......... . ..
All other . . ..... .. .. .... .

an..
3
8
2
3
4
8
2
2
5
3
3
3
57

Total . .. •..••.

103

Beaumont ••. • •• . • • •• • •••
Da.llas .. ...... . . . • . •• .• •

July 15.
1945

1945
11.886.437
469.611
288.158
4.848
94,925
23 ,71 1
206
57,763

DEBITS TO I N DI VIDUAL ACCOU:-iTS

CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS

J uly 16,

J uly 11,

1946

· I noludes aU demand deposita other than interba.nk and United States Government, lesE
cash it-eml reported on hand or in prooess of colleetion.

Number
rera:r1.ing
(Thousands of dollars)

July 10,
Total loana aDd investment. . . . . . . .. . . . •.. . • . ... . . . $2 ,0 16,80 9
T otalloana . . .. . . . . . . . . . . . . . . . . • . . • . . . . . •. . . . . .
670,085
Commercial, industrial, and aaricultural loam . .
394.392
LoaDJ to broken and dealers in Itcurities . . .
8,496
Otber loans for purcllasing Or carrying securit ies. .
132,500
Real estate loans.. ........ . . . .
43,968
Loane to banka.. . ... . .. .. . . ... . . .
31n
All other lOll'll. . . . . . . • . . • • • . . . . • . • .. . .. •
90,338
T otal inve6twenta . . . . . .. .. .. .. .. . .. . . . . . . .
1,346,724
U S. Treasury bill! . . .. . . . . . . . . . . . . . . . .
H ,3 13
U· S. Treasury certificat es of indebtedness
403,245
U· S. Treasury nM ... . . . . .... . . ........ ..
181,695
U. S. Government bonds. . . . . . . .. ... . . . . . . . . . .
fW6 ,419
145
Obligations guaranteed by United States Gov 't . .
70,007
Ot her securitiea .. . ..... . . . . . . . . ..... ... . . . . ..
Resery8S with Federal Reserve Bank. . . . . . . . . . . . .
410,160
Balances with domeatic banQ.... . . . . . . .. . . ... . . . . .
232,408
Demand deposita-adjusted · . . . .. . . . . . . . . . . . ... . . . 1,4.61,985
Tune dej)OSlte ... . . .... ... .. . . . . . . . . ......... .. .. .
311 ,043
Un ited 6tntes Government deposits .. ...............
219,861
Interbank deposlta .. .. . . ... . . .
568,U73
BorrOWings from Federal Reserve Bank . . . . . . .
NOlle

E1 Paan .•... . .•.• ...... •

Number of
aaviog8
depoaitora

Percentage change in
savings deposita from

Amount of
savin~

depolilb

J une 30,

12.573
130.718
30.41 8
40.705
24.41 3
103.533
933
6.167
36.647
33.418
9.41 0
7.384
61 .307

I

7,843 .277
73,042,205
23,378.168
32.807.414
20.366.758
71.440.802
2,41 8.195
5.521.492
43.882.261
26.005.834
9.086.903
4.780.977
51.027.822

m5
+ 14 .4
+ 24 .5
+ 30 . 1
+ 20. 5
+ 17 . 2
+ 16. 6
+287.9
+ 18. 1
+ 21.7
+ 18.9
+ 24.0
+ 10. 1
+ 21.1

497.626

1371.1102.108

+ 21.3

May al,
19'6
+ .1
+ 2 .2
+ 1 .2
+ 2 .2
+1.1
+1.1
-4 .1

+ .1
+ 2 .3
+ .7
+ 2 .4
+ .8
+ .9
+ 1.5

•

107

MONTHLY BUSINESS REVIEW
INDUSTRY
~

Twelve months ago act ive combat ended in tbe Pacific. The
r "suing readjustment of our economy has been complicated by
:In acute housing shortage, scarcity of materials, price increases,
and widespread labor unrest, all of which have contributed to
uncertainty and confusion and at times obscured the progress
made in converting from war t o peace. Nevertheless, this first
postwar year has been a period of major accomplishment. Although progress in providing goods to supply the pent-up demands accumulated during five years of war has not been satisfactory, the rapidity with which the labor force has been redistributed, the military personnel discharged and assimilated
into productive employment, and the complex industrial machine retooled to produce consumer goods has surprised the
pessimists who foresaw large-scale unemployment, delays in
reconversion, and general business deflation as consequences of
the peace.
At this time more people are engaged in productive activity
than at any time in the nation's history. The resources and manpower of the Eleventh Federal Reserve District are also being
used intensively in meeting the increasing demands of the postwar economy. The shift from wartime to peacetime operations
was accomplished somewhat more expeditiously here than in
other areas, partly as a result of an earlier start (reconversion
began in some plants in the Southwest early in 1944), and partly
because the type of work upon which the Southwest had con. ccntratcd during the war permitted conversion to peacetime
~roduction without extensive retooling. Most of the plants in
this district found major readjustments in machine processes
or facility layouts unnecessary in order to undertake production
of goods for civilian consumption. Little change was required
in apparel plants, food processing establishments, or refineries;
producers of oil-well supplies and agricultural machinery found
reconversion presented only simple problems; and the chemical
and lumber industries experienced virtually no mechanical reconversion difficulties. Readjustments in the labor force were
also accomplished quickly and in an orderly fashion. Lay-offs
at shipyards, ordnance and aircraft plants, in which the greatest
reduction in the labor force occurred, were largely offset by
increases in employment in construction, trade, and services.
Non-agricul tura l employment in this district, even at its postwar low in January 1946, was substantially greater than in any
month prior to 1942, and since January it has increased at a
fairly steady rate, regaining a large part of the loss sustained
during the initial period of postwar adjustment.

The progress which has been made in shifting from military
to civilian production is best revealed by a comparison of present, war-peak, and prewar levels of employment. Total civilian
employment in nonagricultural occupations is at an all-time
high in the nation and near the war peak in this district. In
Texas, approximately 400,000 more persons arc now employed
..,n commercial and industrial establishments than in any month
. . , 1939, and only 75,000 fewer than at the wartime peak reached
late in 1943. The slight decline in nonagricultural employment
from the war peak reflects reduced employment in shipyards,
aircraft plants, and some chemical plants, and reduction of

civilian employment in military establishments. The increase
over the prewar level reflects a general rise in employment in
virtually all types of activity.
NO~-AGRICULTURAL

- M'I'IIL, tolAY AMI JUNE [511"""1(0
SOUR'f. IlEP'!'~TMENT OF l460If, eUREAU Of' LA80R

EMPLOYMENT IN

TEXAS

STATISTICS

Employment in manufacturing plants in the State is approximately 80 per cent larger than in 1939, although 30 per cent
smaller than at the crest of wartime manufacturing activity in
November 1943. As the accompanying table indicates, the number of workers employed in refineries, apparel plants, food processing establishments, plants manufacturing transportation
equipment, iron and steel plants, and establishments manufacturing machinery is much larger than before the war. Small to
moderate increases in employment have occurred in all other
categories of manufacturing activity in the State.
MANUFACTURTXG EMPT.QYMENT-TEXAS

-Number of workers· (i n lOOO's) _

All f1ulnufacturing industries .. .
Food and kiudred products ... .
Products or petroleum and coal.
Lumber and timber basic products ......... .
Printing, publi.shing, a.nd allied industrie8 .... .
Apparel ... ...... ,.,., ....•...
~1achinery (except e1cctrica1) , ..
Cbemica1s and allied produeta ...
Furniture and finished lumber products . .
Textile mill product:> tlnd other fiber manufactures.
!tOil, steel and their products ..
Paper and paper products ..... .. . . . ............ .
SLone, clay and glass products , ........... .
Transportation equipment. (except automobilea) .. .
Nonferrous metals and their products ........... .
All others ..... .... , .......... , ....... ,

Prewar

War-peak

June HI46

166 .7
39.2
25.3
18.3
12.5
11.8

442.7
59.1
33.0
26 .5
13.9

11.9

28 .5
20.5

303.3
59.1
38.7
27 .0
17.5
22.0
29 .5
11.5

11.7

11.2

8.2
29.1
3.5
6.0
158.9
11.9
8.3

8.7
16.5
3.8
0.7
22.1
9.4
10 .5

9.1
8.8
7.5
6.5
2.2
6.4

1.6
.8
5.8

22. 1

or

·"Prewar"-employmeot as 16th Census of Manufactures, October 1939.
"War-peak"-employmeuL during November 104.3, the peak of manufacturing employment
n Texas, us reported by the Bureau of labor Statistics.
"June 1946" is estimated on basis of percentage deviation from May 1946 in selected firms.

Construction activity and oil production are also being maintained at much higher levels than before the war. During May
1946, the value of all construction contract awards totaled
$82,983,000 in Texas and $85,298,000 in {he Eleventh District,
increases of 480 per cent and 456 per cent, respectively, as
compared with May 1940. Comparisons based on dollar valua{ions of contract awards are distorted by the large increase in
construction costs since 1940. Even after this distortion is

MONTHLY BUSINESS REVIEW

108

taken into accoun~, it is apparent that, although the total
volume is considerably smaller than at the peak reached during
the summer and fall of 1942, much more construction activity
is now going on than before the war. Petroleum production has
greatly exceeded all anticipations for the first postwar year.
Instead of dropping precipitously after the termination of hostilities, as had been generally expected, the demand for petroleum
products declined only slightly, and since the beginning of
1946 has increased steadily, creating an urgent need for expanded production f rom fields in this district . Production of
crude oil in the Eleventh District averaged 2,425,427 batrels
daily during June 1946, as compared with 2,395,866 barrels
daily at the previous production peak in August 1945 and 1,496,720 barrels dai ly in June 1939. Drilling activity in the district, as measured by well completions, has not regained the
level of the years immediately preceding the war, but has been
accelerated since the end of hostilities, and is currently 170 per
cent above the low point to which it dropped in March 1943.

COTTONSEED AND COTTONSEED PRODUCTS
T. ....
Cottonseed receh'ed [J.t mills
(ton.s) ....... . . . . . .........
Cottonseed crushed (tons) .....
CottolUeed on hand June 30
(to..) .....

(June 1940 equals ]00)

- -T."",- _ - District - _United State8June

~on·:igricultur9.1 emllloymcut·t . . ..
Manufacturing employmcn tt.. . ..
Crude oil production....... . ... .
Crude oil rUD S to stiJls4 . ... . ......... .
Drilling activity§ (well completions). . . .

11'145
141
182
171
130
68
68

Latest

month
135
162
176
130
78

Juue

Latest

)945 month
135t
1281
172t
149
156
un
130
127
68
79
61
144
40
J 00
71
126
7go
gge
98
132
101
102

June

1945
119
149
131
136
70
70

Latest
month
117
128
133
133
76
249
246
Ul
120
97
96

Value of conslmction oontrnct.nwards§..
144
Residential . . . .
194
31
AU other . . ...... . ....
79
124
98
Lumber production ~ ... . .
67
77
111
Cement product ion6 .....
98
132
65
Cotton spindles in place~ ~ .
101
102
93
Hours of operation.
89
95
89
95
102
04
Cottonseed crushed §.. .
374
45
N.A.
N.A.
241
05
Freight car landings§.
N.A.
N.A.
165"
152"
120
118
• Proprietors, sel£ employed, domestic servunts and armed forces excluded. t Latest monthMarch. 1946. tFivc states: Ariwna, Louisiana, New Mexico, Oklahoma a nd 'rex1U:!. t1.8t.e:rt.
mont h- June H146. - Latest month- Mny 1046. 61940 average equal.! 100. 6Fh'e st.a.tet! and
Arkansas. "Southwestern district. ""Lute~ t month- April 1946.

.u

which developed 1ll this district early in 1946 and continued
despite the rigid limitations of March 26, governing the type
of project for which authorizations would be granted, bas been
slowed by imposition of the Civilian Production Administration order of May 29 sharply restricting nonresidential building
for 45 days. The order, which is designed to conserve scarce
building materials for use in residential construction, has been
extended for an unstated period beyond July 15. In the petroleum industty, acceleration of drilling is being retarded by
sbortages of pipe and other oil field equipment and by lack of
trained workmen. Shortages of pipe and skilled labor also limit
the speed with which pipe lines now being constructed or planned can be brought into operation. Until additional pipe-line
faci lities are available, expansion of crude oil production in the
district, which will be necessary if forecast increases in the demand for petroleum products materialize, apparently cannot be
accomplisbed witbout producing above maximum levels of efficiency in the East Texas and coastal fields.

208,983
320,751
161,574.
21 8,8.12

277.769

30 :
Crude oil (thousand lbs.) . . .
Cake a nd meal (tons) ... ...
Hulls (tona) .. . ........ .
Linters (running bales) ...

3,102,287
3,218,839

4,310,510
4.137,353

100,230

284,013

1.003.129

1.28.1.745
1.899,7<7
957.652
1.211 ,576

428,511

1,415,270

209 .004
273 .234

77:1.297
975.372

3.743
15.894
17.014
6,538

8,326
40,314
33.326
48,704

~tocks on ha nd June

471

8.041
3,096
6,994

14,626
71,488
M,I04

31,M5

SOURCE: United States Bureau of Census.

DOMESTIC CONSUMPTION A..'lD STOCKS OF COTTON-{Ba1ca)
June

June

1946
16.559
792.551

1945
16,146
786,063

U.S.ltocu--end of month:
In consuming estabm'~ . . . 2,280,942
Public stg. & compresses . . 6,381,566

2,036,556
9,1 92.041

Consumption at:
T e.J.a5 mills . . . . . ...... . . .
United States mills .. . ... .

Rapid expansion of activity above present levels is prevented
in many industries in this district at this time by continuin;
scarcities of vital materials and developing shortages of skilled
labor. The boom in commercial and industrial construction
MEASURES OF INDUSTRIAL ACTIVITY: PREWAR, YEAR AGO, AND
RECENT MONTII S

118,832

11.627

Production of prod ucts:
Crude oil (thous...md 100.).
Cake and meal (tOlll!l) ..
Hulls (tons) .. . . ....
I..inter8 (running bales) ...

•

Unitcd States-- AU.I(Ust 1 to June 30
Last seaaon
This SCllSOU

August 1 to June 30
This season
Last. season
620,1 69
943.125
905,1 89
692,141

May
'946
18,783
871,559

August 1 to Juno 30
This srnt.801\ Last season

182,638
8,436,102

174,506
8,902,742

CRUDE OIL PRODUCTIO:l-(Barrels)
Increase or decrease in daily
average production from

Juue 1946
Daily avg.
production
250,982

T ntal
production

7.529.450
17.997,350
14,359.800
11.1118,850
16.334.800

North Texas .... . ... .
West Texas .........
East Teus .... . .. ....
Southwest Texaa .. . . . ... . . . ..
Texas Coastal . ...... . . . ......
Total Teus.

New Mexico.
North Louisiana .·......
Total District ..

June 1945

599,912
478,660
372 ,295

544,493

67,390.250
2.926.250
2.446.350

2,246,342

72,762.850

2.425,429

97,542

81,545

May 1946

3,182
78,812
49,740
'0,795
58,403

+ 6,382
+102,512
- 38,873
+ 14,732
- 18.574

+
+
+
+

-+

+ 66,179
6.230
12,322

+'3',b42
+ 1,779
+ 1,532

+ 72,271

+ 134.853

SOURCE : Estimated from American Petroleum Institute weekly reporta.

•

The American Petroleum Institute ha.! abandoned i~ reporting dilltricts in Favor of those
of the Teus Railroad Commission, consequently June data are not exactly comparable with
previous periods.

BUILDING PERMITS
June 1946

No.
Abilene . .....
Amarillo .... .
Austin .. .... .....
Beaumont ... _. . ..

~r:~~t~ ::::

El Pa&O ... . ......

Fort Worth .... . ..
Oalve8oon .
HOullton ......... .

Lubbock ..... . . . .

Port Arthur .. . ...
San Antonio .. . . . .
Shreveport. La•.. .
Waoo .•.......•..
Wichita Falls . . . . .

93
176
322
27.
246
958
77
483
133
554

160
146
1,162
294
139
77

V.lllation

304.813
451.MO
1.326.123
21 7,505

1,084,897
2,638.248
216.80'
1,564.,919

200.057
2.404 .807
3,776,809
261,920
1,74 8.291
44 7,551
.04.896
163.000

- - - -T...1. . . . . . 5,29' 117,202,440

Percentage change
Percentage
valuation from
Jan .l to JuDc 29, 1046 ebaD~e
VallJa.t10D
No.
Valuation from 194:S
June 1945 May 1946

+ 69
+ 393
- 47
+229
+ 87
+ 72
+217
+ 75

- 12
+ 69

585 1 2,804,9110
4,420,.;75
1,298
2.3M
9.379.'58
1,445
1,705,158
6.249.925
1.5S9
7,3i6 26.653.378
531
2.439.361
3.817 14.9'1.947
695
1.158.660
4.216 39.069.439
ij,OM.473
1.137
1.062
1.301.614
7.534 14,298,983
1,940
5.334 ,438
831
2.222.105
1.143.362
433

+301
+761
+94
+221
+513
+435
+379
+168
+18.
+479
+419
+442
+386
+186
+286

6

36,913 1138,1118,866

+318

+ 40
- 34
-12
+ 2
+ 100
+ 3
- 76

- 44

.

+ 132

+13~

-

-H85
H18
+ 188
H 80
+ 187

+ 136
+ 16

- 44

+ 211

+

32

·Over 1,000 per cent.

VALUE OF CON STRUCTION CONTRACTS AWARDED
(Thousands of tloi.lar3)

19. 6

June
1945

1 64.653
20.419
34.234

1 25.715
4.368
21.437

1ltLy
1946
S 85,298
51,311
33,987

80 7,914
332.2'8
475,666

227.298
41.779
18.1,619

952,418
463,600
488,818

June
Eleventh District-total.. .
R esidential . ..
All ot her .
United States· -total. .
Residential
All other ... . . .

"37 lltates east of t he Rocky Mountains.
EOtRCE : F . W. D odge CorptJration.

January 1 to June 30

1946
343,328
155,019
188,309

19.5
S 139,224
16,029

3,937.736
1,633,,73
2,304,263

1,482,399
197,509
1,284,800

123, 195 .

MONTHLY BUSINESS REVIEW
AUGUST 1, 1946

NATIONAL SUMMARY OF BUSINESS CONDITIONS
(ComDiled b,. the Board of Governors of the Federal Reserve System)

."

INDUSTRIAL PROCUCTION
260

"

,..--

' ~It;,\L-"'-.l-..l. .. ,

,,i,, rI( l'i.:i

0

200

r-c -

0

Vl

-

", I
or

.),I,.,u .....

1--

"° j

,~

JQT...

,00

• lAA/ilIPOllTATlON

0v~

eo'

~ [t- ~r

tJ

,

20

-~

,/

1

fO

I

EI I' i ~,,+: l~ l

'"

Federal Reserve index . Groups arc expressed in terms
of points in tb e total index. Monthly figures. latest
shown are for J uoe 1946.
EMPL.OYMENT IN NONAGRICULTURAL ESTABLISHMENTS

IJJ..
--I Y'

1 R\'

"

.J

:./

p::
"

-f--

C-

J

°

i'-I\

,

V

,/

,

---,,,,, ~~
,,, :';:;;"

lI.Ql

I _L

I

1IOYl~1."UT

'
"0

WHOLESALE PRICES

........

~

1

110

..

'1II!.' Cf.

' ,

"
L,
~,/ '"

'"
~

'

........ 1

V

1 I

I ALLtO"'IrOOlTIU

I

1

J,

10

OTIII~·

~~

k
" ~--k:7
~'l-

.

1939

liMO

70

OUtput of d urable manufactures increased about 10 pe r cent in June, reflecting chiefly the
recovery of iron and steel output f roro the sharply r educed May rate. Steel mill activity adv anced from
44 per cent of capacity at the end of May to 87 per cent of capacity at the end of June and in July
ro::e somewhat further to a rate of 89 per cent during the currem week. Output of nonferrous metals
and of machinery showed moderate gain s in June, largely reflecting settlement of wage disputes in these
indust r ies, .lOd producti on of stone, clay an d glass product s recovered f rom the low May level. Lumber
production showed abou t the usual seasona l increase .
Output of nondurable goods as a g roup sh owed lit tle change from May to June, with a further
decline in manufactured food output otf ~ et in the totd by moderate gains in most other lines. Meat
production under Federal inspeclion dropped fun her in June t o a rate about 80 per ce nt of the 19H39 average, but rose sharply after the lapse of price controls on June 30. Output at textile mills continu ed t o adv ance slightly in June and was at a level [0 per cent above a yea r ago. There were sligh t
gains in activity in t he p aper, ch emical, petroleum and rubber prod uct s industries.

Value of construction contract aw ards, acc ording to the F. \X'. Dodge Corporation, declined in
June, follow ing a sharp rise during the past yea r. Residential awa rds were reduced by one-fourth from
the record level reached in May, while those fo r nonresidentia l construction showed only slight decline.

EMPLOYMENT
Employme nt .ill nonagricultural establishments cont inued t o advance in Jun e, after allowance for
seasonal changes, reflecting large i ncrcas~ s in mining and construction and a slig ht gain in manufactu ring. The n umber of persons unemployed, other than students looking for summ er jobs, showed little
change from May co June.

DISTRIBUTION
D epartment store sales in June , lfter allowance f or scasona l changcs, were the largest on record ,
and in the first half of July sales showed about the usual seasonal decline.
Loadings of railroad revenue freight increased sharpl)' in June, follow ing in terruptio ns to shipments in Apr il and M aya s a res ult of industrial disputes . A ll classes of freig ht sha red ill the rise. After
a tcmporary decline in t h e week of July 4, there was a furthe r rise and in th e middle of the month
coal, livestock, fo rest products, and less than carl oad lot sh ipme nts exceeded those during the same

COMMODITY PRICES
Pr ices of farm products and foods adv:mced sharp ly during the fi rst half of July after tpe lapse

Bureau of Labor Statistics' indexes. Weekly figures,
latest eu ow n :l re for week ending July 20, 1946.

of Federal p rice controls. Subsequentl y p rices of graim and some foods declined somewhat while
prices of liv est ock advanced furth er. Prices of hides. cotton goods, newsprint, lu m ber, lead and zinc
also incr~ased in Jul y.

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INDUSTRIAL PRODUCTION
Th e Board's seasonally ad justed index of industrial produclion rose f rom 159 per cent of the
1935-39 aver age in May co 170 in JW1e. This comp ares with ead ier postwar highs of 168 in November
and in March. Most of the increase from May to Ju ne rcflected sharp advances in output of coal and

per iod !.ast ye:lr.

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further rise.

=NSTRUCTION

Bureau of Labor Statisti cs' estimates, adjusted for
seasona l variation by Federal Reserve. " O rner" includes transportation, public utilities, finance, service and mIScellaneous. ProprielOrs and domestic
workers excluded. L:uest month shown is June 1946.

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Minerals output rose 2} per cent as coa l and metals produ ction showed sharp ga ins with the settlement of wage disputes, and crude petrol eum production advanced f u rther to :1 new record rate
un der t h e pressure of exceptionally large demand for petroleum products.

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and prices of industrial commodities showed

of iron and steel after settlement of the coal strike.
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\\:Tith settlemen t o f major industrial disputes , output at factories and mines increased sharpl y in

Junc. Retail trade was in exception ally large volume in June and the carly part of July. Prices of
agricultural commodi ties rose sh arply in th e first half of July following the lapse of Federal cont rols,

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\'X'ednesday figures. latest shown are for July 17. 1946.

Treasu ry operations in connection with retirement of maturing obligations and quarterly income
(ax coll ections domin ated bank d evelopments in Ju ne and the first h alf of July. M ember bank reserve
positions fluctuated somewh at as Treasury balances at the Reserve Banks were built up and drawn down
around the security redemption dat ~ of June I, June 15 , and Ju ly 1. R eserve posit ions tig htened generall y duri ng the period as a whole, however, reflecting both t he shift of deposits fr om Treasury balances to pr iv ate aCCounts accompanyi ng security retirement and ca sh redemp t ion of about 800 million
dollars of Gover nment securities held by the R ese rve Banks. Drains on bank reserves were met by
purchases of abou t 1 billion dollars of Government securities by the Reserve System .
Holdings of Government securities at reporting b:mks decli ned further by 3 billion dollars in
June and the first half of july, refl ecting the sale of these securit ies to the R eserve Banks as well as cas h
redemption by the Treas ury. Loans f or purchasing and ca r rying Go vernment securities showed further
declines. Comme rc ial and i nd ust r i~1 loa ns expanded considerab ly at banks ours id e New York City and
real estate and ot her loans continued to increase.