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Monthly Business Review
OF THE

FEDERAL RESERVE BANK

OF DALLAS

•

(Compiled January 15, 1937)

=Volume 21, No. 12

Dallas, Texas, February 1, 1937

=

This COpy is r eleased for pubIIcation In morning papers-

Feb. 1

DISTRICT SUMMARY
THE SITUATION AT A GLANCE
E leventh Federal Reserve District
B
D~nk debits to individua l accounts (at 18 cities)

T otal
1916

$9.167. 513.000
W~a{tment store sales .. ..........................................
................
Val o esa Ie trade sales (five lines) ........................
........ .......
ion building permits at lar ger centers .... $ 59 .930.685
Ce uat
C ment production at Texas mills (barrels) ......
5.840.000
C~ment s!,ipments from Texas mills (barrels)..
5.853.000
Commerc!al failures (number) ............................
218
OUmJ,'ercla l . failures (liabilities) ........................... $
2.479.000
_
roductlOn (barrels ) ..........................................
470.9 50.200

Pctg. change
fr olll 1911
+ 16.6 cA,

+18.5 %
+19.0%
+84.5%
+58.5%
+57.20/0
- 22 .4%
-38.5 %
+15.8%

R~covery of business and industry in the Eleventh District
ContInued at an accelerated rate in 1936, and the level of
bcti.vity was higher than in any year since 1930. The dish'iutJ?n of commodities reflected a marked expansion, and
the Improvement was evident in virtually all lines of busin~~s. Consumer buying at department stores in principal
Clt~es averaged 19 per cent better than in 1935. This bank's
adjusted index of departlnent store sales evidenced an upWard trend during the year and the December figure, which
tood .at 107.6 per cent of the 1923-25 average, was higher
sh
t .an In any corresponding month since 1929. Wholesale
dlstr.ibution, as represented by the combined sales of reporting firms in the five lines surveyed by this bank, also
Increased 19 per cent as compared with the preceding year.
Payments on accounts at both wholesale and retail establishments showed a material improvement. Debits to individual
accounts at banks in eighteen leading cities of the district
~Xceeded the 1935 volume by 17 per cent. The betterment
n t~e financial status of business was reflected in the lower
usmess mortality rate, there being fewer failures and
s~alI er liabilities than in any previous year for which dist1'1ct figures are available.
The volume of construction work evidenced a further
l11arked increase, and there was a strong demand for the
products of allied industries. The valuation of building
permits issued at the district's principal cities was 85 per
?ent larger than in 1935. An important feature of the buildIng situation was the noticeable expansion in residential
construction, which is indicative of the increase in consU~er purchasing power and the larger volume of funds
ah~llable for financing these projects. The production and
ShIpments of lumber and cement were materially higher
t an in the preceding year.
The production of petroleum established a new high
record in 1936 and exceeded the previous year's output
by 16 per cent. This increase was absorbed by an expansion

b

in the demand for petroleum and its products, and the
industry operated throughout the year on a generally stable
and profitable basis. Mining operations in the western
portion of the district increased during the latter part of
the year when many of the larger copper mines reopened
after several years of inactivity.
Agricultural production declined in 1936 as a result of
the drought which affected crops at the critical periods of
growth. The effects of the diminished production, however,
were more than offset by higher unit prices received for
practically all field crops, and the total farm value of all
crops was somewhat larger than in the previous year. The
cotton crop, which accounts for the major portion of the
district's cash farm income, was moderately larger than in
1935. Wheat production, while sharply lower than the average, exceeded the previous year's low harvest by a wide
margin. The largest reduction occurred in the principal feed
crops which are used on farms and do not enter directly
into the farmers' cash income, but the effects of the lower
production will be reflected in the increased cost of producing 1937 crops in those areas where supplies are insufficient
for feedin g requirements. Although a large area of the district's range territory was affected adversely by the severe
drought in the spring and late summer months, the physical
condition of the livestock industry was generally favorable
at the close of the year. The calf, lamb, and kid crops were
large and losses generally were few . Wool and mohair production was larger than in 1935, and market prices were
considerabl y higher. Marketings of cattle and sheep were
smaller than in the previous year, and toward the end of the
year range trading was very active.
The deposits of member banks increased considerably in
1936, and after the middle of June there was a sharp upward
movement in member bank reserve balances. During the
closing month of the year, both deposits and reserves were at
record high levels. Excess reserves were reduced at the mid·
dIe of August by the 50 per cent increase in required reserves,
but there was a noticeable increase during the latter part of
the year. The loans of reporting member banks in leading
cities showed a noticeable expansion, reflecting principally
the increased demand from agriculture, commerce, and industry. These banks also greatly increased their investments
in United States Government securities. Federal Reserve Bank
loans to member banks were in small volume throughout
the year.

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

MONTHLY BUSINESS REVIEW

2

BUSINESS
The distribution of merchandise through
wholesale channels declined less than
usual in December, reflecting chiefly the
substantial replacement orders by retail merchants necessitated by the unusually heavy consumer buying. Sales of
wholesale dry goods firms were 7.1 per cent greater than
in December, 1935, and the decline of 26.6 per cent from
November was considerably less than the average recession
for that season. The large distribution of food products during the Christmas season was a sustaining factor in the
wholesale grocery trade. The decline in business from November to December was only 6.4 per cent, and the increase
of 14.2 per cent in sales as compared with the previous December was considerably larger than the average gain for the
entire year. The business of wholesale drug firms was unusually heavy during the month, sales being 15.1 per cent
greater than in November, and 16.2 per cent above the level
in December, 1935. While this improvement is accounted
for in part by the growth in the liquor trade, the distribution
of other items also increased. Although the sales of hardware at wholesale usually show a substantial year-end decline, the recession from November to December this year
was small, and the volume of business was 34,.4 per cent
greater than a year ago. The record-breaking demand for
farm implements evident in recent months continued unabated in December. Sales for the month were 9.5 per cent
larger than in November and 137.2 per cent above those in
the corresponding month of 1935.

Wholesale
Trade

Wholesale trade in this district showed a distinct improvement during 1936. The combined sales of all wholesale firms
reporting to this bank were 19.0 per cent greater than in
1935, the increases in individual lines of trade ranging from
CONDITION OF WHOLESALE TRADE DURING DEOEMBER. 1986
Percentage of Increase or decrease InNet S.le.
Dec., 1936
compared with
Dec.
Nov.
1935
1936

Groceries ......: .........•

+ 14.2

~~!O~~lmie;;ts:J18i:~

+

Hardware.......• .......
34.4
Druga. ..................•.. + 16.2

-

6.4

+2t~

- 2.5
+15.1

Rati o Dec.
Stockl
collections
Tot.1 S.leo
Dec. 3 I, 1936
to accounts
1936
compared with
compMed with Dec. 3 1, Nov. 30, outs t:lI1ding
1935
1935
1936
Nov. 30

+ 5.9
+17 .4
+70.7
+27.5
+21.9

+14.8 +34.6 +
+ 8.3 +
+ 3.0 +19.8 -

7.8
8.2
4.7
4.9
8.9

84.2
40.3
11.5
52.8
64.8

5.9 per cent for groceries to 70.7 per cent for farm imple·
ments. Inventories at the end of the year were materially
higher than those a year earlier.

Retail
Trade

The volume of department store trade
was unusually heavy in December and eXceeded that of any corresponding month
since 1929. The sales of firms reporting to this bank were
67.9 per cent in excess of those in November and were 18.9
per cent higher than in the closing month of 1935. Although
this December had one additional shopping day, the daily
average sales showed a gain of 14,.3 per cent over those a
year ago. The adjusted index of department store sales,
which makes allowances for average seasonal changes, rose
to 107.6 per cent of the 1923-25 average in December, which
was a new high for the recovery period, and compared with
97.2 per cent in November and 95.2 per cent in December,
1935.
Department store sales for the full year 1936 were 18.5
per cent above those in the preceding year and were the
largest since 1930. This expansion in business was well
distributed over the district and is indicative of the increased
consumer buying power resulting from the general improve·
ment in economic conditions.
Inventories at department stores reflected a seasonal de·
cline of 20.5 per cent during December, but year.end stocks
were 11.3 per cent higher than a year earlier. The rate of
stock turnover was higher than in any year for which figures
are available. During the year 1936 reporting stores turned
their stocks 3.71 times as compared with 3.35 times in 1935.
Collections on regular accounts evidenced a substantial
improvement during the year. The betterment was particUlarly noticeable in December when the ratio of collections
during the month to accounts outstanding at the first of t~e
month was 44.7 per cent as compared with 42.3 per cent In
November and 41.1 per cent in December, 1935. The ratio
of payments on installment accounts rose from 14,.6 per cent
in November to 16.1 per cent in December, and the latter
figure compares with 16.2 per cent in the same month last
year.

-

BUSINESS OF DEPARTMENT STORES
Total sales (percentage):
December. 1986. compared with December. 1935 ....................................................................
December. 1936. compared with November. 1986 ................................................................ ..
January 1 to December 81. 1986. compared with same period last year........................
Credit sales (percentage):
December. 1986, compared with December. 1985 ......................................................................
December, 1986. compared with November, 1986 ..................................................................... .
January L to December 81. 1986. compared with srune period )nst year....................
Stocks on hand at end of month (percentage):
December. 1986. compared with December. 1985 ................................................................. .
December. 1936. compared with November. 1986 .................................................................. ..
Stock turnover (rate):
Rate of stock turnover In December. 1985 .................................................................................... .
Rate of stock turnover in December. 1936 ............................................................................. .
Rate of stock turnover January 1 to December 81. 1985 ....................................................
Rate of stock turnover January 1 to December 81. 1986 .................................................. .
Ratio of December collections to open accounts receivable and outstanding Dec. 1. 1986
Ratio of December collections to installment accounts receivable and outatandln~
December 1. 1936 ............................................................................................................................ .
Indexes of department store sales:
Unadjusted-November. 1986 ...................................................................................................... .
Unadjusted-December. 1986 ...................................................................................................... .
Adjusted- November, 1986 ............................................................................................................ .
Adjusted- December. 1986 ..............................................................................................................
Indexes of department store stocks:
Unadjusted-November, 1986 ... _.................................................................................................. .
Unadjusted-December. 1986 ........................................................................................................
Adjusted- November, 1986 .... ........................................................................................................ .
Adjusted-December. 1936 ..........................................................................................:...................

Dalbo

Ft. Worth

+ 21.0
64 .5
20.9

+ 16.6
87.1
19.1

t

Houston
+ 17.2
+ 60.8
+ 14.8

+
t

+ 82.4
+ 86.7
+ 20.9

+
t

18.9
49.2
17.6

-

+ 11.0
- 19.1

t

21.8
59.7
20.8

+ 17.1
- 16.8

6.2
27.4

San Antonio

Others

Total Dis trict

+ 18.8
+61.1
+ 19.2

+ 18.4
+ 73.3
+ 16.7

+ 18.9
+ 67.9
+ 18.6

+ 19.8

+ 16.4
+ 66.9
+ 14. 2

+ 21.8
+ 61.7
+ 18.9

+ 16.5
- 19.2

+ 10.0
- 23. 7

+ 11. 3
_ 20.5

t·18.4
54.9

.49

.44
.47
2.83
8.15
41.8

.58
3.86
8.71
44.7

18.6

16.1

.51
.56
8.81
4.15
45.8

.51
.60
2.94
8.40
88.2

18.7

12.6

121.4
188.1
102.9
114.4

116.9
204.4
97.4
115.5

120.6
176.4
103.1
107.6

97.8
149.4
85.0
96.4

112.7
175.4
97.2
107. 6

71.1
58.2
65 .2
66.1

76.0
55.2
67 .3
67.8

50.1
89.3
43.6
42.8

64.1
58.0
57.7
59.6

72.1
57.1
64.4
65.8

.47
.50
8.12
3.50
48.5

.49
.50
3.66
3.98
46.8

-

MONTHLY BUSINESS REVIEW
Commercial
Failures

The commercial failure record in the
Eleventh Federal Reserve District was
very favorable in 1936, when the number of defaults and the amount of indebtedness involved
Were smaller than in any year for which district figures
have been compiled. According to the report of Dun & Brad-

8

street, Incorporated, there were only 218 failures with liabilities aggregating $2,479,000, while the 281 insolvencies
reported in 1935 had an aggregate indebtedness of $4.,030,000. In December, 1936, there were 13 defaults with liabilities of $171,000.

AGRICULTURE
Crop ConThe agricultural outlook in the Eleventh
ditions
Federal Reserve District at the opening
.
of the new year was generally favorable.
WIdely distributed precipitation during the last days of
December and the sleet, snow, and rain during the second
week in January greatly improved the moisture situation.
While reports indicate that a good surface and subsoil season
now obtains in most sections of the district, there are still
a few areas which have a scant supply of subsoil moisture.
Due to the mild temperatures and open weather prevailing
d~ring much of December, farmers made good progress
WIth winter plowing and other farm work except in some
localities where wet soil retarded operations. Dry, sunshiny
weather is now needed in most sections for the completion
of this work.

Small grains have made fair to excellent progress as there
has been sufficient moisture generally to stimulate plant
~rowth and to develop a good root system. However, there
IS a deficiency in subsoil moisture in portions of the heavy
wheat producing section of northwest Texas, and in this
area considerable rainfall will be needed throughout the
growing season. The Department of Agriculture estimated
that the area sown to winter wheat in Texas in the fan of
1936 reached the record total of 5,315,000 acres, which represents an increase of 5 per cent over see dings in the fall
of 1935 and 35 per cent above the 1927-31 average seedings.
In recent years there has been a noticeable expansion in
wheat seedings, but during the past five years heavy acreage
abandonment and low per acre yields have held down total
production. In New Mexico the area ·seeded to winter wheat

in the fall of 1936 was 4.10,000 acres as compared with
360,000 acres in the previous fall.
The January 1 report of the Department of Agriculture
indicated that the 1936 production of oranges in Texas
·would total 1,600,000 boxes as compared with 747,000 boxes
in 1935. The harvest of grapefruit was placed at 6,790,000
boxes as against a production of only 2,741,000 boxes in
the previous year.
The total farm value of principal crops ·
Crop Results
harvested in Texas in 1936 was estimated
For 1936
by the Department of Agriculture at
$384,052,000, which represents an increase of 5.5 per cent
over the 1935 total of $364,137,000. The increase in farm
value was brought about by the higher unit prices of all
major commodities which more than offset the decline in
production. The sharp decline in the production of corn,
oats, grain sorghums, sweet sorghums, peanuts, and sweet
potatoes was due both to the lower per acre yield resulting
from the summer drought and to the smaller acreage harvested. With the exception of wheat and Irish potatoes, the
increases in the production of some crops were caused entirely by the larger acreages. The combined per acre yield
of 33 important crops was estimated by the Department
at 89 per cent of the 10-year average yield as compared
with 104. per cent in 1935. The farm value of crops in New
Mexico and Louisiana increased 26.7 per cent and 33.5 per
cent, respectively, due principally to the higher income from
the cotton crop. The 24.7 per cent decline in Oklahoma resulted from the disastrous drought which greatly reduced
crop production.

ACREAGE HARVESTED, PRODUCTION, AND FARM VALUE OF SELECTED CROPS IN TEXAS, AND ACREAGE HARVESTED AND TOTAL
FARM VALUE OF ALL CROPS IN STATES ATTACHED TO THE ELEVENTH DISTRICT
Acreage h:trves ted
(000'. omitted)
1935
1936

11;;~i"~;; ~;-;~:_t:l; =~j; =;j;!;:~: ; ;=

:':111

:1~

pWeet sorghum (forage and hay) .................................................

705

~~~~~gX:2:;;t~~~·;!jf.:~~+~j:~~;·;~ lO:ji

11,:il

~l truck crops (except potatoes ) .............................................

206

Bu.
Bu.
Bu.
Bu.
Bu.
B'u.
Tons
Tons
Tons
Lbs.
Bu.
Bu.
Bales
Tons

269

Total all crops*

-6hl:~.;ma::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ~~:m

606

Unit

~t

m

Louisiana.......................................................... 4,288
4,286
New Mexico....................................................... 1,270
1,141
Arizona...............................................................
591
618
• Acreage harvested-44 crops; farm value-64 crops; dupliclltions exoluded.
tPounds.
SOURCE: Department of Agriculture.

Physical conditions of ranges and livestock in the Eleventh District varied considerably during 1936. While conditions in the eastern half
of the district remained generally favorable throughout
the year, the major portion of the western half suffered from

Livestock

Yield pcr acre
1935
1936

19.5
7.0
28.0
8.0
52.0
18.5
1.065
1.10
1.85
560
54.0
90.0
188t

Production
Tot.1 (000'. omitted)
1935
1936

15.0
7.7
18.5
6.0
51.0
9.5
.861
1.05
1.05
420
65.0
65.0
119t

90,824
11,473
88,410
888
8,684
60,075
851
805
952
146,720
2,646
6,300
2,956
1,816

68,915
18,927
22,552
1,122
10,200
81,711
815
815
686
99,120
2,860
8,640
2,945
1,811

Total farm value
In doUars (000'. omitted)
1935
1936
$ 47,872
$ 58,689
9,687
17,981
8,570
12,291
1,510
1,784
6,600
8.874
80.088
25,869
6,808
7,742
2,044
2,588
7,616
5,724
8,078
4,255
3,482
2,223
8,640
4,158
162,420
178,755
40,967
48,268
15,004
12,568

$864.187
124,927
101,827
16,958
28,567

$884,052
94,009
185,809
21,488
80,779

the effects of adverse weather conditions. In the latter area,
the late winter and spring drought caused a sharp decline
in the condition of ranges and livestock and acute conditions
developed in some areas. This situation was partially relieved by the heavy May rains, but unfavorable conditions

4

MONTHLY BUSINESS REVIEW

again developed as a result of subnormal rainfall and the
extremely high temperatures during the subsequent three
months. The heavy fall rains, however, brought about a
marked recovery and conditions in most sections remained
generally favorable during. the remainder of the year. Livestock generally entered the winter in good condition, and
in all sections of the district except parts of the Panhandle
and north Texas and southwestern New Mexico there is
an .ample to surplus supply of natural range grass and dry
feed to carry stock through the winter in good shape.
Despite the adverse effects of drought and the generally
lower level of prices, the district's livestock industry as a
whole came through the year in good condition, and the
outlook for the new year is promising. There was a record
lamb crop and a large crop of calves and kids. The relatively
large wool and mohair clips were sold at profitable prices,
and during the latter part of the year a substantial amount
of the 1937 wool clip was placed under contract at favorable
prices. The fact that only a small proportion of the large
lamb crop was marketed during the year indicates that sheep
herds are being increased to take advantage of available
supplies of feed. In the cattle division, large numbers of
grass fat cattle were shipped to market from the areas unaffected by the drought, and in other areas feed supplies
carried over from the previous year were available to meet
feeding requirements.

supply in December last year. Receipts of cattle and calves
declined seasonally from November to December and the
supply of cattle was materially smaller than a year ago.
The arrivals of sheep were very light, being moderately
lower than in November and sharply below those in De·
cember, 1935.
The market for most classes of cattle reflected an upward
trend during the past month and the prices paid for some
highly finished offerings were the best recorded in several
months. There was a steady improvement in hog prices until
toward the middle of January when a sharp reaction wiped
out most of the gain. The sheep and lamb market was gen·
erally slow during the last half of December but prices
reflected a noticeable upturn in the subsequent two weeks.
At the middle of the month choice wool lambs cleared at
$9.75.
FORT WORTH LIVESTOOK REOEIPTS
(Number)
Dec.
1936

Oattle.......................
Oalves.......................
Hogs .........................
Sheep .......................

60,885
48,868
48,626
18,548

Dcc .
1935
74,084
42,119
29,246
28,567

Chnnge over

yenr
- 18,649
1,749
+14,881
-10,024

+

Nov.
19 36

Ch:U1ge over

67,848
58,202
20,672
20,156

- 7,458
- 0,884
+28,054
- 1,618

month

OOMPARATIVE TOP LIVESTOOK PRICES
(Dollars per hundredweight)
Dec.
1935
$ 9.90
6.75
11.00
6.00
7.00
9.70
5.76
10.00

An unusually large supply of hogs arrived at the Fort Worth market in December due in part to seasonal influences.
The month's receipts were more than double the arrivals
in the previous month and were a third larger than the
Movements
and Prices

No',
1916

$ 8.76
7.00
10.00
6.0 0
6.26
9.46
6.00
8.26

FINANCE
Reporting member banks in leading cities
of this district increased their investments
in direct obligations of the United States
Government $14.,557,000 in response to
the Treasury offerings on December 15,
and although there was a moderate reduction in the subsequent four weeks, the net gain for the five-week period ending January 13 amounted to $11,234.,000. During the same
period holdings of fully guaranteed obligations were reduced $3,888,000. Investments in other securities were increased $501,000. While loans on securities rose $931,000
between December 9 and January 13, "all other" loans
(agricultural, commercial, and industrial loans) reflected
a further seasonal decline of $3,4.66,000. During the five
weeks there was a net withdrawal of $21,003,000 in interbank deposits and $854.,000 in time deposits, which was
partially offset by the expansion of $10,411,000 in demand
deposits-adjusted and $4.,283,000 in United States Government deposits. Reserves with the Federal Reserve Bank r?se
to a new high point at $109,902,000 on January 13, whICh
was $2,626,000 above the level reached five weeks earlier.
To meet the decline in deposits and the increase in reserves
and investments these banks reduced their balances with
other banks $14,895,000.
During 1936 there was a marked rise in loans, investments, deposits, and reserves of member banks in the
district's leading cities. The principal increase in investments occurred in the direct obligations of the United States
Government and on January 13, 1937, holdings were $4.7,-

Condition of
Member Banles
In Leading
Cities

887,000 greater than a year earlier. During the first six
months of the year investments in fully guaranteed oblig a·
tions were reduced approximately 50 per cent but holdings
of these securities were increased somewhat in subsequent
months. There was only a moderate increase in investments
in other securities. Agricultural, commercial, and industrial
loans evidenced a decline of less than seasonal proportions
during the early months of the year and after midsummer
there was a rapid expansion, reflecting increased business
activity and to some extent the accumulation of inventories
and the rise in prices. Demand deposits-adjusted followed atl
upward trend throughout the year and were maintained at 8
substantially higher level than in the previous year.
OONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In thousands of dollars)
J:1I1. 13,
193 7

United States securities (owned) ..................... $198,890
Securities fully guaranteed by United
States Government (owned) ...........................
89,448
All other stocks, bonds, and securities
«(lwned) .............................. ............................... .
52,460
Loans on securities...............................:.............. .
46, 821
All other loans ...................................................... . 179,520
Total loans............................................................. .
226,841
Demand deposita-adjusted· .............................. . 802,809
Time deposits .......................................................... 121,139
United States Government deposits..................
38,408
Interbank deposits................................................. 201,720
Balances with domestic banks ............................ 172,259
Reserves with Federal Reserve Bank .............. .
109,902
Bills payable and rediscounts with Federal
Reserve Bank.....................................................
None

J ~ n.

1 S,
1936

Dec. 9,
1936

$160,508

$187,16 6

52,228

48,881

61.96~

47,786
42,2 52
149,909
102,161
828,964
119,920
26,877
187,480
177.885
85,569

121. 99
84,12 6
222,72:
187,16
107,276

40

None

46,89

182,9~~
228,8

882,89~

"Demand deposits other than Interbank and United States Government,
leBa cash Items reported as 9n hand or In process of collection.

MONTHLY BUSINESS REVIEW
Operations 0/
the Federal Reserve Banlc

Member bank reserve balances, after
showing wide fluctuations over the yearend, rose to a new high level at $173,.
905,000 on January 15, representing an
Increase of $7,053,000 over the total a month earlier and
$39,199,000 as compared with the aggregate on the corresponding date in 1936. Average reserve balances maintained
by member banks in December were 62.3 per cent above
requirements, and the volume of excess reserves was larger
than in any month since the 50 per cent increase in reserve
requirements became effective at the middle of August. Federal Reserve notes in circulation reached a peak of $95,664.,000 on December 21 in response to the pre-holiday
?emand for currency, but the return flow of these notes
In subsequent weeks had reduced the circulation to $88,742,000 on January 15. The substantial increase during the
year in Federal Reserve note circulation was due largely
to the higher lever of business activity, larger payrolls,
the increase in farm income, and the substitution of Federal
Reserve notes for National bank notes. Member bank borrowings from the Federal Reserve Bank continued in small
volume throughout 1936 and shortly after the turn of the
year these borrowings were completely liquidated. This
bank's investments in United States Government securities
declined $5,877,000 at the end of the year due to the reallocation of the Reserve System's holdings among the various
Federal Reserve banks.
CONDITION OF THE FEDERAL RESERVE BANK
(In thousands of dollars)
Jan. IS,
] nn. IS,
1937

5itsl cash reserves............ .................................. $191.604
Othcounts for member banks............................ ..
None
! d er bills discounted ...........................................
None
ustrlal advances ............................................. ..
1,810
489
BII'iuDltments to make Industrial advances ... .
U s bought In the open market. .......................
87
95,019
ARlted States Government securities owned. ..
6
96,422
178,905
Fedember bank reserve deposits ............................
88,742
eral Reserve notes In actual elrculatlon. ...

c:,

~ot:lt~:~~r::s!::r~~:::::::::::::::::::::::::::::::::::::::::::.

1936
$140,406
85
None
1,771
598
126
83,975
9
85,966
134,706
72,643

Dec. IS,

1936
$175,854
6
None
1,860
492
87
100,896
14
102,868
166,852
92,663

i
Acceptance
Mar/eet

The usual year-end expansion in the
volume of outstanding acceptances executed by accepting banks in this district
OCcurred in December due to the increase in the amount of
acceptance credit based on the domestic shipment and storage of goods. Total acceptances outstanding at the close of
the month amounted to $2,202,277 as compared with the
revised figure of $2,136,798 on November 30.

N. heavy, general increase in debits to
individual accounts at reporting banks in
eighteen cities of this district was registered during December, reflecting the
large volume of business, increased bonus and dividend
payments, and heavy year-end withdrawals. The aggregate
for the month was $954.,915,000: which exceeded the previous month's volume by 23.3 per cent and that of the corresponding month a year earlier by 20.8 per cent. The year's
volume, which amounted to $9,167,513,000, was 16.6 per
cent larger than in 1935, and was the heaviest since 1930.
During the early months of 1936, the monthly totals were
considerably lower than the corresponding figures in 1930,
but there was a narrowing of the margin during the summer
~onths and in the final quarter there was a considerable
lncrease.
Debits to
In.dividual
Accounts

5

DEBITS TO INDIVIDUAL ACOOUNTS
(In thousands of doUars)
Pctg. chnngefrom
P
h
Dec.
Nov.
Tol.1
Tot.1 ctg. c .nge
Dec.
1936
1935
1936
1936
19J5 from 19J5
Abilene ........................ $ 9,806 + 6.8 + 8.8 $ 91,833 $ 75,936 +20.9
Austin .........................
80,677 +26.8 +85.5
298,384
819,569 - 8.2
Beaumont...................
25.637 +13.8 +25 .1
261,988
240,186 + 9.1
Corsicana....................
4,028 +24.8 +17.0
88,408
32,432 +18.4
DalIae.......................... 282,177 +22.2 +26.0 2,671,096 2.161,880 +28.6
EI Paso........................
29,485 +19.5 + 8.2
294,228
248,851 +18 .6
Fort Worth.................
96,967 + 6.3 +20.4
914,865
809,596 +12. 9
Galveston....................
32,524 +16.1 + 4.6
312,489
260,426 +20.0
Houston ....... _.............. 238,876 +27.6 +23.4 2,222,896 1.922,888 +15.6
Port Arthur...............
9.091 +20.6 +19.4
92,012
74,120 +24. 1
Roswell........................
4,188 +37.8 +15 .2
85,821
80,016 +19.3
San Antonio...............
75,252 + 7.7 !26.9
767,187
728,360 + 4.7
Shreveport..................
62,606 !51.6
81.0
488,869
858,298 +86.4
Texarkana* ................
9,871
85.3
24.2
84,744
67,917 +24.8
Tucson ........................
12,797
30.3 +29.0
120,553
101.628 !18.7
Tyler............................
16,087 +38 .8 +25.0
162,582
127,948
27.1
Waco............................
17,125 + 8.6 +19.6
164,441
151,288
8.7
Wichita Falls ... _........
14.822 + 2.0 +20.4
160,748
154,755 + 8.9
TotaL ...... $954,916 +20.8 +23.8 $9,167,613 $7,869,876 +16.6
*Includes the figures of two banks In Texarkana, Arkansas. located In
the Eighth District.

Deposits of
Member
Banlcs

The gross demand deposits of member
banks rose to a new high level during
1936. After showing relatively small
fluctuations during the first five months
of the year, these deposits reflected a marked upturn which
continued with little interruption until the end of the year.
The daily average of gross demand deposits increased from
$925,804.,000 in January to $1,108,4.10,000 in December
for a net gain of $182,606,000. Of this amount, $73,483,000
occurred at country banks and $109,123,000 at reserve city
banks. The January to December expansion in average time
deposits amounted to $5,133,000 and was due entirely to
the growth at country hanks.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(Avernge of daily figures- in thousnnds of doll. rs)
Combined Total
Reserve City Bonks
Country Banks
1936

January .......... ..
February ......... ..
March ............... .
April ................ ..
May................... .
June .................. .
July .................. ..
August............. ..
September.........
October............ .
November ........ ..
December ......... .

Gross demand

deposits
$ 925,804
987,137
988,528
927,928
926.927
948,139
999,460
988,821
1.017.186
1,061,297
1.097,227
1,108,410

Time

Gross demand

deposits
deposits
$196.765 $623,120
197,078
580,276
195,804
631.473
195,675
527,743
194,692
529,858
196,708
640,958
199,576
578,721
570,488
199,824
585,518
199,602
200,768
608,277
200.788
627,187
200.898
682,243

Time

deposit,
$110,061
109,664
108,414
107,560
107,868
108,066
109,652
109,534
109,864
109,623
110,106
110,280

Gross demand Time

deposits
$402,684
406,861
402,050
400,186
897,069
402,181
420,789
417 ,883
481,678
458,020
470,040
476.167

deposits
$85,714
87,414
87,890
88,016
86,829
88,638
89,924
90.290
90,288
91,140
90,678
90.618

ADJUSTED DEMAND AND TIME DEPOSITS OF MEMBER BANKS ON
SELECTED "CALL" DATES
(In thousands of dollars)
Reserve Ci ty B.nks Country nanks (2)
Combined Totd
Dem.nd
Demand .
Demand
deposits
Time
deposits
Time
deposit.
Tim.
Call dates:
adjusted (I) Deposits .dJusted (I) Deposit. adjusted (I) Deposit.
June 80, 1938 .......... $879.662 $189 ,868 $176,729 $114,301 $202,983 $75,662
Dec. 80, 1988 .......... 444,206
190,000
194,914
107,497
249,291
82,608
June 80, 1984 ......... 495,520
197,280
282,911
111,864
262,609
86,426
Dec. 81, 1934 ......... 561,276
196.066
242,422
112,117
808,854
83,949
June 29. 1986 .......... 588,644
195,210
276,556
118,421
127,943 81,789
Dec. 81, 1985 ........... 642,167
198.495
292,629
111.851
849,588
86,644
June 30, 1986.......... 697.486
200,661
827.868
110,966
870.188
89.696
(1) Demand deposits other than Interbank and United States Government.
less cash Items In process of collection and. prior to December 31.
1986, less cash Items reported on hand but not in process of collection.
(2) Outlying banks In reserve cities which have been authorized to carry
country bank reserves are Included with country banks.

There was a further growth during December in the number of savings depositors and in the amount of savings deposits at 118 reporting banks in this district. Savings
deposits, which aggregated $157,051,643 on December 31,
reflected an increase of 0.7 per cent as compared with those
a month earlier, and 2.3 per cent over the total at the close
of 1935.

Savings
Deposits

MONTHLY BUSINESS REVIEW

6

SAVINGS DEPOSITS
December 3 1. 19 JS

December 31. 1936

November 30. 1936

Number

of re·
porting
bank.

Beaumont....................... - ......................
Dallas ......................................................
El Paso ............................................·······
Fort Worth ............................................
Galveston ....................................····.·····.
Houston ..................................................
Port Arthur .......................................... ·
San Antonio ..........................................
Shreveport.............................................
Waco ............................................. ·····.....
Wichita Falls............................... ·········
AU others ............................ ·······.··· ... ·····
ToteL ..............................

Number of

5:lvings

savings

savings

depositors

deposi ts

depositors

8
8
2
8

4
11
2
6

8
8
8
71

ill

8.978
80.710
18.849
86.600
17.068
74.662
6.881
20.077
28.884
9.648
6.646
64.824
862.011

Amount of

Number of

$

8,668,860
26,694,620
7,586,671
12,588,769
10,864,806
29,982,650
2,884,171
16,112,654
11,275,978
5,070,846
8,501,122
27,586,011
$157,051,648

9,224
76,912
12,094
84,626
16,906
72,949
5,599
17,928
22,060
9,810
6.264
52.406
386.772

Amount of
savings
deposits

$

8,798,521
25,108,177
6,295,288
11,648,400
10,641.872
88,145,251
2,259,886
15,158,297
10,619,492
5,679.858
8,820,826
25,866,662
$158.541.976

Percentage change
over year In
..f1ngs deposit.
- 8.8
6.9
+19.7
7.6
2.1
- 9.6

+

+
+
+ 8.8
+ 6.8
+ 6.2
- 10.7
+ 6.4
+ 6.6

'+2.3

Number of
lavings
depo.ltors

8,823
80,583
13,630
36,684
17,076
78.952
6,869
19,986
23,834
9,667
6,467
64,896
850,206

Amount of Percentage change
over month In
savings
SD.vings depol1t1
deposit.
S 3,640,116
.4
26,142,646
1.7
8.1
7,309,680
12,401,051
10,881.464
.8
29,701,671
.9
2.0
2,288,867
16,020,482
.6
11.265,640
.2
- 6.8
6,412,184
8,457,813
1.8
27,449,046
.6
$165,909.898

+
+
+
+1.1
+
+
+
+
+
+
+
+-:7

DISCOUNT RATES CHARGED BY MEMBER BANKS DURING JANUARY. 1937
Prev.lUng Rates

D.U ••

Rate charged customers on prime commercial paper such as Is now eligible for
rediscount under the Federal Reserve Act......................................................................
Rate charged on loans to other banks secured by bills recelvable....................... _...... .
Rate on loans secured by prime stock exchange or other current coUateral (not
Including loans placed In other markets throlllrh correspondent banks) :
Demand ..............................................................................................................................
Time ....................................................................................................................................
Rate charged on commodity paper secured by warehouse receipts. etc .... _...................
Rate on cattle loans....................................... _...... _.............. -.......................................................

El P.so

Fort Worth

Houston

San Antonio

8-8

5-6
6-6

1%.-7
4-6

4-7
6-6

6-7
6

2-6
6

4

6-6
6-8
6-8
5-8

4-10
4- 10

8-7
3-7
2-7
7-10

6-6
5-7
4%-8
5-8

6
6
6-8
8

4- 8
2-8
6-8

6-10

INDUSTRY
The December receipts of cottonseed at
Texas and United States cottonseed oil
mills reflected a seasonal drop as compared with the previous month, and at Texas mills they
were sharply lower than a year ago. The crushings of seed
and the production of products at United States mills also
declined seasonally from November to December, but they
were about a fourth larger than in December last year.
While operations at Texas mills were lower in December
than in the previous month, they closely approximated those
in the same month a year ago. During the five months of
the current season the production of cottonseed products
has been measurably larger than in the corresponding period
of the previous season, but the increased shipments made in
response to the strong demand for products have held stocks
to a relatively low level for this season. Prices of cottonseed and cottonseed products have shown a considerable
advance in the past six weeks.

Cottonseed
Products

STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS
Texns

August 1 to Decembe r 3 1
This scason Last season

Cottonseed received at
861,688
867 ,292
mills (tons) .......................
616,668
689,967
Cottonseed crushed (tons)
Cottonseed on hand ............
267,482
Dec. 81 (tons) ............ ..
177,201
Crude 011 produced (Ibs.) 192.887,716 174.788,642
Cake and meal produced
284,417
317,472
(tons) .................................
165,753
184 ,690
Hulls produced (tons) .......
LInters produced
119,696
145,443
(running bales) ...............
Stocks on hand December 81 :
Crude 011 (pounds) .............. 18,478,618 26,816,458
96,751
Cake and meal (tons) .........
88,094
92,704
Hulls (tons) ..........................
68,481
61,717
J.lnters (runnln~ bales) ....
62,170
Source: Bureau of Oensus.

United Statcs

Au gust 1 to December 31
This season
Lut season

4,016,698
2,780,298

8,246,694
2,478.829

1,268,226
827.516,649

86 6,940
747,105.188

1,249,106
711,456

1,117,561
635,966

671,684

653,041

61.851,590
214,781
155,830
188.981

80,125,807
868,676
194,878
181.198

The domestic consumption of cotton in
the United States in December totaled
692,921 bales, which was a new high
figure for that month, and only slightly under the all-time
record total of 696,472 bales established in June, 1933. The
December consumption exceeded that of the previous month

Textile
Milling

WacO

-

by 10.6 per cent and was 38.6 per cent above that in tl~e
same month of 1935. The amount of cotton used by domestic
mills in the five months of the current season aggregated
3,170,131 bales as compared with 2,423,897 bales in the
corresponding period of the previous season, or an increase
of 30.8 per cent. The stocks of raw cotton on hand at mills,
which showed a rapid increase during the fall, amounted
to 2,001,378 bales on December 31, representing an increase
of 209,128 bales during the month. The December figure
was the highest registered since March, 1923, when monthend mill stocks reached a record total of 2,033,837 bales.
COTTON CONSUMED AND ON HAND
(Balcs)
Dec.

Dec.

1936

19J5

Cotton-growing stetes:
Cotton consumed ............................. 576,786
Cotton on hand December 31 InConBumlng establishments.........
Public storage and compresses..
United States:
Cotton consumed ............................. 692,921
Cotton on hand December 31 inConsuming establishments....... .
Public storage and compresses..
Source: Bureau of Census.

Cotton
Movements

Augu s t 1 to December 31
This season Last seaJ on

499,778

2.664,288

2,080,288

1,722,188
7,706,775

416,939

1 228,480
8:267,548

3,170.181

2.428,89Q

2.001,878
7,788.326

1 481.24 9
8:389,086

-

The combined receipts of cotton at Houstnn and Galveston reflected a seasonal
decline between November and December,
and were 28.0 per cent smaller than in the closing month of
1935. The total for the five months of the current season waS
approximately the sa~e. as ~ year earlier. Exports frond
these ports, after declmmg m November, turned upwar
in December but the aggregate for the month fell 14,.8
per cent short of the volume a year ago. Shipments for the
period August 1 to December 31 averaged 2.0 per cent
greater than those in the same period of the previous season.
Stocks of cotton at the two ports on December 31 were 8.6
per cent lower than a month earlier and 3.6 per cent beloW
those a year ago.
The movement of cotton into export channels from all
United States ports during December was in light volume

7

MONTHLY BUSINESS REVIEW
~or that month. Exports amounted to 593,860 bales, reflectIng a decline of 13.9 per cent from shipments in November
and 32.3 per cent from those in the corresponding month
last year. Exports thus far this season, which aggregated
2,896,802 bales, were 16.1 per cent lower than the 3,452,266
bales shipped in the corresponding period of the previous
dea~on. With the exception of the 1934-35 season, exports
UrIng the five months were smaller than in any similar
period since 1920.

for the major portion of the increase in crude oil production.
The posted prices for crude oil at major fields, after
advancing slightly early in 1936, remained steady during
the remainder of the year, but toward the year-end the
heavy demand for products and the difficulty of obtaining
sufficient crude oil resulted in the payment of small premiums in some fields.
OIL PRODUCTION
(Barrels)

COTTON MOVEMENTS THROUGH THE PORT OF GALVESTON
(Bales)

~~tt:::::: ::::::::::::::::;:::::::::::.
cks, December 31.. ........

Dec.
1936

lS5,189
294,954

Dcc.
1935

242,OSl
259,429

August 1 to December 31
This seuon Lllst scason
1,509,211
1,296,916
994,182
709,498
S77,274
S12,071

COTTON-GALVESTON STOCK STATEMENT
(Bales)
Dec. 31,
1936

f~~ ~&~~~~.~~.~~~:::::::::::::::::::::::::::::::::: ::::=:::::::~::::::::::::::~:::::: ~~:~~g

r~~~~~!:~{~~~!~.:~:~~:: : ::::: : :: : : : :: : : : ::::: : : : : : : : : : : 877;274
7:i:~~~
TotaL ..... _...... _.............................................................

Dec. 31,
19l5

7,000
9,000
41,900
600
758,571

8f2.ii7I

OOTTON MOVEMENTS THROUGH THE PORT OF HOUSTON
(Bales)
August 1 to December 31
This season Last senson

Dec.
1935

250,574
279,920

1,135,602
700,645
680,266

1,858,160
962,069
699,804

SEASON'S RECEIPTS, EXPORTS, AloiD STOCKS OF COTTON AT ALL
UNITED STATES PORTS
(Bales)
August 1 to December 31
This season

L:ast season.

I!~~ifi~=~j;i~-j; li~=i;i;l-~; ::ii i!!! ::iiiii
Stocks held at all United States ports, Dec. 31............... 2,866,148

2,808,180

SPOT COTTON PRICES
Middling Basis
(Cents per pound)
December, 1936
HIgh
Low

18.11
12.96
12.66
12.77
12.68

12.66
12.44
12.01
12.28
12.26

J.I1. H.
1937

18.04
12.99
12,87
12.68
12.68

----------------------------------------------------Petroleum
Crude oil production in the Eleventh Dis.
trict rose to the highest level of the year
In December, reflecting the continued heavy market demand
nd increased allowab1es. The month's output of 42,4.64,200
arrels represented a daily average increase of 57,711
b~rrels over November and 209,398 barrels as compared
WIth December, 1935. Production for 1936 reached the
record total of 470,950,200 barrels, which was 16 per cent
~arger than in the previous year. There was also a substantial
lhcrease in drilling activity, the number of wells completed
S OWing a gain of 12 per cent. The expansion in new
development was particularly marked in north Louisiana,
south and west Texas, and New Mexico due to the extension
of producing areas, and the discovery of new sands and
new pools at deeper levels. These areas were responsible

b

Increase or decrease

over November, 1936
To~,1
Dolly Avg.

December. 1936
Total
Dally Ayg.

North Texas.......................... 8,987,800
We.t Texas ............................ 6,167,160
East Texas ............................ 16,687,700
South Texas.......................... 6,627,800
Texas CoastaL.................... . 6,181 ,7 60
Total Texas ....................... 37,841,700
New MexIco.......................... 2,647,100
North Loulslana. ................. 2,476,400
Total District................... 42,464,200

127,026
198,618
688,474
178,800
167,168
1,204.671
86,890
79,862
1,869.818

121,400
616,700
i 1,128,060
602,000
+ 486 ,660
2,804.700
144.160
162,800
i
+8,101.160

+

187
+18.986
i19.S19
10,790
8.980
+68.888
+ 1.968
+ 2.416
+67.711

DECEMBER DRILLING RESULTS
Completion. Producerl

Gas Well.

FaUur..

Initial
Production

North Texas................. _...
288
186
16
87
84,696
West Texas........................
182
146
2
84
266.861
East Texas........................
267
241
1
16
800,220
South Texas......................
264
186
6
64
89.747
Texas CoastaL............ _..
80
69
8
18
20,824
Total Texas ................... T.Oi1
-n6
27
218
1,211.248
New Mexico......................
48
41
2
66,690
North Loulslana..............
86
16
11
9
9,686
"Dec. totals, district ....... T.Osii
40
227
1,286.624
··Nov. totals, dlstrict..... 1.898
1,067
44
292
1,614.181
·December figures represent four weeks ended December 26, 1986.
·-November figures represent five weeks ended November 28, 1986.

-m

CRUDE OIL PRICES
(Price per barrel)

Jan. 9.
1937

Jan. 10,
1936

Texas Coastal (84 gravlb' and above)..................................
$1.22
$1.22
North Texas (40 gravity and above) .........................._.........
1.08
1.08
North Louisiana (40 gravity and above).............................
1.10
1.10
(011 statistics compiled by "The Oil Weekly." Houston. Texas)

The December production of cement at
Texas mills registered an increase of 12.8
per cent as compared with the previous month and was 15.2
per cent larger than in the same month of 1935. Although
shipments declined 5.1 per cent from November to Decembell, the total for the latter month exceeded that a year
earlier by 4·6.9 per cent. There was a noticeable expansion
in the activities of these mills during 1936. Production and
shipments reflected increases of 53.5 and 57.2 per cent,
respectively, as compared with the previous year. Stocks on
hand at the close of the year were 1.7 per cent lower than
on the corresponding date in 1935.
Cement

PRODUCTION, SHIPMENTS. AND STOCKS OF PORTLAND CEMENT
(In thousands of barrels)
Percentage change over
Dec.
19l5

Nov.
1936

Total
1936

Percentage
change
from 19H

Production at Texas m1l1s .................. 601
+16.2
Shipments from Texas m1l1s .............. 467
+46.9
Stocks at end of month
at Texas m1l1s .................................... 730 - 1.7
Source: United States Bureau of Mines.

+12.8
- 6.1

6.840
6,868

+68.6
+67.2

Dec.
1936

+ 4.9

There was a sharp upturn during December in the valuation of building permits issued at fourteen reporting cities in this district due
in part to the issuance of permits for the construction of
public projects. Permits issued during the month had an
estimated value of $6,151,868, which was 73.7 per cent
greater than in November and 92.9 per cent higher than in
the corresponding month last year. Augmented by the large

Building

MONTHLY BUSINESS REVIEW

8

December total, the dollar volume of permits issued at
these cities during 1936 aggregated $59,930,685, which rep·
resents a gain of 84.5 per cent over 1935, and is the largest
figure recorded since 1930. There was an increase during

the year of 8.6 per cent in the number of permits issued.
The revival in residential construction, which began in 1935,
continued at an accelerated rate in 1936. There was also
a large volume of public construction.

BUILDING PERMITS
December, 1936

No.

Amarillo .........................
AuBtin .............................
Beaumont.......................
CorpuB ChrIBtL ............
DallaB..............................
El PaBO ............................
Forb Worth ...................•
GalveBton ........................
HOuBton .........................•
Port Arthur...................
San Antonio ..................
Shreveport......................
Waoo ............•..................
Wichita FaJlB................

83
148
97
132
857
64
184
76
824
126
252
82
31
18

TotaL. ......... 1,914

Valuation

Decemb er, 1915
No.
Valuation

39,607
214,666
174,075
141,635
1,944,439
50,601
614,760
48,840
1,649,370
58, 802
393,178
135,278
144,150
547,577

35
115
84
41
309
29
75
61
208
49
170
82
24
19

$6,151,868

1,296

$

$

68,477
285,250
18,810
23,151
502,013
13,085
386,800
588,691
657,485
24,812
289,868
93,682
275,213
28,087

$8,189,874

Pctg. change

November, 1936
No.
V.luation

valuo.tion

over yeAr
- 87 .6
- 24.8

•
+511.8

+287.8
+286.7
+ 58.9
- 92.6
+150.9
+137.0
+ 64.3
+ 44.4
- 47.6

•

+ 92.9

24
114
117
126
414
74
185
94
848
119
216
118
81
25
2,000

45,777
266,172
51,784
204,245
851,886
81,162
484,783
60,664
1,802,445
40,725
880,458
281,399
91,180

$

Total year

Pctg. change
valuation

over month
- 18.5
- 16.2
+236.2
- 80.7
+458.4
- 37.7
+ 41.4
- 27 .7
+ 26.6
+ 44.4
8.3
+
- 41.5
+ 58.1

~

*

$8, 541 ,278

+ 78.7

No.

1936
Valuation

No.

1915
Valuation

366
1,869
1,400
1,886
5,710
781
2,165
1,279
4,538
1,650
2,964
1,518
483
225

$ 1,140,462
4,891,129
1,196,729
2,718,759
10,988,275
940,618
8,526,115
1,544,909
18,766,247
912,557
4,544,625
2,518,071
847,496
894,698

853
1,801
1,887
689
• 4,614
558
1,294
1,296
8,098
905
6,186
1,507
327
289

$

26,288

$69,980 ,686

24,199

$82,489,268

886,944
5,411,128
568,610
555,166
4,328,108
1,085,552
8,824,855
1,220,077
6,961,396
554,511
4,191,522
1,286,464
2,859,781
810,169

"IncreaBe over one thou Band per cent.

SUMMARY OF NATIONAL BUSINESS CONDITIONS

Pctg. ch.ns'
valuation
over period

+288.5
- 18.9
+112.3
+389.7
+168.9
- 18.4
+156. 4
+ 26.6
+169.6
+ 64.6
+ 8.4
+ 95.7
- 64 .1
+ 188.!+ 84.5

-

(Complied by the Board of GovernorB of the Federal Reserve System)

The Board's index of industrial production showed a
sharp advance in December after allowance is made for the
usual seasonal changes. There was a marked expansion in
employment and payrolls and retail trade continued at high
levels.
PRODUCTION AND EMPLOYMENT
Actual volume of industrial production showed little
change from November to December, at a time when a sharp
seasonal decline is usual, and the Board's adjusted index
advanced from 114 to 121 per cent of the 1923-1925 average.
There was a further rise in activity at textile mills to the
highest level on record and output of other nondurable
manufactures was maintained. Declines in production of
steel and lumber were smaller in December than are usual
in that month. At automobile factories there was a marked
increase in output. In the first three weeks of January activo
ity at steel mills increased somewhat, but there was a decline
in assemblies of, automobiles as a result of shutdowns
occasioned by strikes. Coal production declined seasonally
from November to December, while output of crude petro·
leum increased, contrary to seasonal tendency.
Value of construction contracts awarded, according to
figures of the F. W. Dodge Corporation, showed a seasonal
decrease in December.
Factory employment expanded further between the middle
of November and the middle of December, contrary to the
usual seasonal movement. Increases were general among the
durable goods industries, with the largest advances at plants
producing automobiles and machinery. In the nondurable
goods industries there were marked increases in the number
employed at textile mills and at shoe factories. Reflecting
principally the higher level of employment and advances in
wage rates, factory payrolls increased sharply in December,
particularly at steel mills and in the textile industries. In
retail trade, employment rose more than seasonally and in
most other non· agricultural pursuits there were increases,
when allowance is made for seasonal changes.
DISTRIBUTION
Retail sales in December increased seasonally at depart·

ment stores and by more than the usual seasonal amount at
variety stores and mail·order houses serving rural areas.
"
.
Fre1ght·car loadmgs showed a smaller decrease than IS
?sual in December, and the Board's seasonally adjusted
mdex advanced further.
COMMODITY PRICES
Wholesale prices, for both industrial and agricultural
commodities, continued to advance in the second half of
December and the first half of January. There were marked
increases in prices of industrial raw materials, particularly
nonferrous metals, lumber, hides, and wool, and prices of
a number of finished goods, such as steel products, paper,
and textiles, also advanced. Since the middle of January
there has been a decline in prices of commodities traded in
on the organized exchanges.
BANK CREDIT
Loans and investments of reporting member banks in
leading cities declined in the first three weeks of January,
as a result of reductions in commercial loans and in loans
to brokers. The decrease in loans reflected in part the retire·
ment of notes issued by the Commodity Credit CorporatiOn
last July and in part repayment of other loans, which had
increased sharply in preceding weeks. Holdings of Govern·
ment obligations declined further at New York City banks
but increased at banks in other leading cities. Demand deposits decreased at the turn of the year, but thereafter increased somewhat, reflecting chiefly the return of currencY
from holiday use.
The rate on 90.day bankers' acceptances was raised 1/16
of 1 per cent on January 13 and now stands at 1/4. of 1 per
cent. Market discount rates on Treasury bills have also increased, with bills offered in the week ending January 16
selling at a discount of over 1/3 of 1 per cent, as compared
with a rate of about 1/10 of 1 per cent early in December.
Excess rese~ves of member banks increased from $1,880,000,000 to $2,130,000,000 in the four weeks ending January
20, reflecting largely the post·holiday return flow of currency from circulation.