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MONTHLY
·BUSINESS
REVIEW
of
Vol. 34
the
FEDERAL
RESERVE
BANK
of
Dallas, Texas, January 1, 1949
Dallas
Number 1
A REVIEW OF ECONOMIC TRENDS IN 1948
R. R.
GILBERT,
President
Federal Reserve Bank of Dallas
On the basis of virtually all major business and economic indexes, the year 1948 was one of
unusually high-level activity and prosperity. Personal income payments to individuals, average weekly
earnings of workers, and corporation profits rose during the year to points above comparable 1947
figures. Employment fluctuated in the general area of 60,000,000 civilian workers, industrial production was relatively stable at levels which indicated virtually full utilization of plant capacity
under the conditions of availability of materials and labor which prevailed, capital expenditures for
plant and equipment exceeded the total of the preceding year, new construction continued in record
volume, while another huge crop of agricultural products has caused concern over the possibility of
sizable surpluses of such important crops as cotton, corn, wheat, and perhaps others. Department
store sales, a partial indicator of the volume of retail trade, showed a cumulative gain over the total
of the preceding year; bank debits, which also tend to indicate business activity, held gains over the
comparable months of 1947; and principal banking items, such as demand deposits, loans, and capital, expanded during the year but at a slower rate than the trend which was characteristic of the
preceding year.
During the past year, however, in spite of the generally high level of economic activity, there
were periods when first deflationary and then inflationary forces seemed to gain strength. Although
probably at no time during 1948 could it be said that deflationary forces were clearly dominant,
inflationary pressures were most marked during the period extending from about April through
September, while deflationary or restrictive influences seemed most prominent during the first and
fourth quarters of the year. Moreover, during the year several important readjustments in the relationship between different economic factors began to take effect. In most cases these readjustments
occurred more or less gradually, while in other cases-the most notable of which was agriculturethe change in conditions was sharp and sudden. Perhaps as a result of these somewhat mixed and
at times confusing developments, businessmen and others maintained a commendable degree of caution in their operations and, except in a few lines, avoided speculative ventures as inflated prices and
expanding supplies of goods combined to influence buying practices and increase competition for
the purchaser's dollar.
The upward rate of inflationary expansion which had gained momentum during the last quarter of 1947 and continued into January of 1948 was interrupted suddenly in the first two weeks of
February by a sharp break in the prices of farm products. A more favorable domestic and foreign
crop outlook for most of the basic agricultural products, a less active demand for wheat than had
been anticipated earlier, and increasing resistance to the very high level of prices for farm and food
products were among factors which combined to break the steady climb which had carried agricultural prices to record levels.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
2
MONTHLY BUSINESS REVIEW
This sharp decline in agricultural prices, which carried the prices of such important products
as wheat downward from a January high of $2.81 a bushel to a February low of $2.12, corn from
$2.46 a bushel to $1.92, grain sorghums from $3.79 per hundredweight to $2.77, and hogs from
$26.70 to $21.60 per hundredweight, naturally had a disturbing and sobering effect on business thinking and planning. In fact, businessmen and others seemed to be impressed by this very positive and
startling demonstration that readjustments could be expected to occur in those areas of the economy
where prolonged and marked inflation had produced distorted and unbalanced conditions. The break
in prices of agricultural products seemed to introduce an element of caution, which carried over into
some lines of business and into banking.
As the crop-growing season progressed, the favorable expectations regarding agricultural production were borne out as a record-breaking corn crop and considerably above-average crops of
wheat, cotton, and several other major products were harvested. Despite sporadic upward movements, prices of these major commodities fluctuated around the government support levels throughout the last half of the year. By the end of 1948 it had become increasingly apparent that, barring
serious crop failures in 1949, the inflationary movement in agricultural products had passed its peak
and that the level of agricultural prices would be influenced strongly and perhaps primarily by
government decisions and policies relating to the support program. In fact, if 1949 harvests compare favorably with those of the past year, real pressure may be placed on the program of price
supports now in effect.
Flexible Treasury fiscal policies during 1948 ranged from strongly counter-inflationary to neutral and to mildly inflationary. During the first quarter of the year deflationary fiscal policies were
followed by the Treasury. Treasury cash receipts from the public during January, February, and
March amounted to approximately $15,700,000,000 in contrast with cash payments to the public
of about $9,300,000,000, leaving the Treasury with an excess of receipts during the period of some
$6,400,000,000. Inasmuch as surplus funds of the Treasury were used almost entirely to retire Government securities held by the Federal Reserve banks, the excess of receipts over expenditures exerted
a very strong deflationary pressure and was reflected in a substantial decline in the money supply.
After the end of the first quarter of the year the Treasury program of retiring Government
securities became irregular, reflecting the influence of the Treasury's cash position. During periods
when receipts were considerably in excess of expenditures debt retirement was undertaken, while at
other times the program was temporarny discontinued. During the last three quarters of the year
there were two periods of debt retirement-between July 1 and September 9 and between November 18 and December 9; on the other hand, it was considered desirable to discontinue the program
from mid-April through June and from September 9 through November 12. At those times during the year when the program of debt retirement was being carried out, the policy tended to
exert some pressure on bank reserves; at other times, when Treasury receipts roughly approximated
expenditures to the public, the counter-inflationary force from this source was lacking.
Treasury policies regarding rates for maturing certificates of indebtedness also varied during
the year, influenced at least in part by the apparent strength or weakness of inflationary pressures.
In May, when it was believed in some quarters that inflationary pressures were weakening, the Treasury announced that June and July maturities of certificates of indebtedness would be refunded
at the prevailing rate with offerings of 118 percent 12-month certificates. Later, in August, when
inflationary forces were admitted by the Government to have gained strength, the Treasury announced
its September and October refundings with offerings of 1 Y4 percent 12-month certificates of indebtedness. Finally, as the rate of business expansion began to show signs of lagging during the last two
months of the year, the Treasury withheld any further increase in rates by announcing that it
would refund the December 15 maturities of bonds and the January notes and certificates with
an offering of 1 Y4 percent 12-month certificates of indebtedness.
In the meantime, during the year the average discount rate on weekly offerings of Treasury
bills rose steadily from approximately 0.952 percent for the first offering in January to approximately 1.154 percent for the offering dated December 23. This steady increase in the bill rat e,
MONTHLY BUSINESS REVIEW
together with increases in the certificate rate from 1 percent to 1 Ys percent for the January 1948
offering and from 1 Ys percent to 1/4 percent for the September and October offerings, influenced
private short-term rates at commercial banks and contributed in bringing about an increase of from
percent to % percent. In addition, increases in the rediscount rates of the Federal Reserve banks
from 1 Ys percent to 1/4 percent and later to 10 percent contributed to the firming trend of rates.
o
Also in the credit sector of the economy, the Board of Governors of the Federal Reserve System
announced an increase, effective February 27, of 2 percentage points in reserve requirements against
demand deposits of member banks in central reserve cities and another identical increase effective
June 11. Then again in September an increase of 2 percentage points against demand deposits and
10 percentage points against time deposits became effective for all member banks. Also in September, acting under authority granted by the special session of Congress, the Board of Governors of
the Federal Reserve System reinstated Regulation W, with somewhat more restrictive credit terms
than those prevailing in the market at the time. Supplementing the actions of the monetary and
credit authorities, the American Bankers Association throughout the year strongly urged its membership to support its program of voluntary restriction of the expansion of bank credit and especially
to avoid commitments involving speculative or inflationary loans.
Although it probably is not possible to measure the individual effectiveness of these various
efforts of the Treasury, the Federal Reserve System, and the private banking system in restricting
the expansion of credit, it is a fact that bank lending expanded at a considerably slower rate during
1948 than during the preceding year. During the first six months of 1948 total loans of the Nation's
member banks increased approximately $1,243,000,000, or only 63 percent of the amount of increase
which occurred during the comparable six months of 1947. Figures for the second six months of
1948 are not complete at this time, but it is a virtual certainty that the loan expansion of member
banks was very substantially less than the $3,973,000,000 recorded during the last half of 1947; in
fact, loan expansion of member banks during the last half of 1948 may not exceed more than 50
percent of the increase of the comparable six-month period in 1947. It is evident that the combination of official and unofficial monetary and credit policies, at least to a considerable degree, had a
salutary effect in restricting the volume of credit expansion at a time when the demand for bank
loans continued strong.
Industrial production was maintained at a relatively stable, high level throughout the year,
except during a brief period in the spring when labor problems slowed the production of durable
goods and in July when mass vacations of industrial workers brought about a temporary decline in
output. With the output of the N ation's productive system running at such high levels, the supply
of merchandise improved notably in relation to demand in a steadily increasing number of lines.
As a consequence, by the en d of the year housing and automobiles seemed to be the only important
consumer goods not in adequate supply, while shortages confronting industrial purchasers were acute
only in certain steel products, some items of machinery, freight cars, and certain heavy equipment,
especially types required by the electrical and public utility industries. Most items of soft goods,
including foods, clothing and apparel, shoes and leather goods, textiles, and virtually all more or less
expensive or luxury goods were in adequate supply by the year-end. Moreover, as the year progressed,
a similar situation became increasingly noticeable in the durable goods fields and was accompanied
by numerous instances of price reductions. In fact, with comparatively few but individually important exceptions, urgent deferred demands of consumers were largely satisfied, and buying shifted
more and more as the m onths passed to meeting requirements of a replacement type. Consequently,
consumers became much more selective and value-conscious in their buying. .
Price movements during the year were of a mixed character, with fluctuations most notable in
foods and other products derived f rom agricultural production. In the first quarter, price trends
on the whole showed a tendency toward softness, but in March and April prices firmed and for
several months moved sharply upward to reach new high levels at wholesale and retail. However,
strong price resistance which developed noticeably in July, together with the marked improvement
in supplies of goods, tended to check the advance, and during the last four or five months of the
3
4
MONTHLY BUSINESS REVIEW
year an increasing number of price soft spots began to appear. At the end of November 1948 wholesale
prices of farm products were slightly lower than the 1947 monthly average and about 11 percent
below the high level reached in January 1948. Wholesale prices of other than farm and food products
rose between January and August but then leveled out as price resistance intensified. Although the
cost of living was higher at the end of 1948 than 12 months earlier, a slight decline during the fourth
quarter seemed to indicate that the peak in living costs may have been reached and passed unless crop
failures, increased government expenditures, or other strongly inflationary developments should
intervene. Rather sharp reductions in the prices of numerous food items and an increasing number of
price decreases in other lines announced during the last two months of the year appear to point toward
a moderate downward readjustment of prices which should restore a more soundly balanced price
structure.
The volume of construction was maintained at very high levels during 1948, as new records
were reached in some categories of building, while in others previous records were approximated.
It is estimated that industry's investment in plants and equipment reached a record dollar volume
of some $18,840,000,000, or about $2,000,000,000 above the total reported for 1947. Physical volume of construction, however, was slightly lower than a year earlier, as higher prices accounted for
most of the increased expenditure. New residential construction was in the area of 925,000 units
and approximated very closely the all-time record of some 927,000 units built in 1925. During 1948,
however, the dollar value of new residential construction exceeded all former levels. Nontesidential
construction also was in very large volume during the year, exceeding the dollar amount that was
reported for 1947. Production of construction materials reached a postwar high, and some shortages
which prevailed during preceding years were relieved. Construction costs, after rising during the
first half of the year, tended to level off somewhat as stronger resistance to the high cost level developed and as materials became more plentiful and permitted more continuous job progress.
Production of crude oil and products was at record levels during 1948, but again in this important sector of the economy the rate of increase tended to level out as the year progressed. As capacity
of existing facilities was being utilized fully and as demand-though still strong-gradually flattened
out somewhat, the rate of expansion slackened. It is estimated that demand for petroleum in 1949
may be about 6 percent higher than that in 1948, but, compared with 1948 year-end production,
such an increase will hardly impose any serious strains upon the industry. Despite the strong demand
for petroleum, stocks of crude oil and products have risen throughout the year, thus making it
possible to meet seasonal demands in the months ahead while maintaining a more stable production
volume.
A review of developments during the past year would not be complete without reference to
certain governmental actions which exerted an influence on the trend and level of economic activity.
In March, following a sudden worsening of international conditions, the President presented a strong
appeal for rearmament which was subsequently accepted in large part by the Congress. Soon after,
influenced perhaps by the international situation, the European Recovery Program was legislated and
assured continuance of a substantial volume of exports during the year. In April Congress legislated
tax reduction and, in addition, by its pronouncements and deeds made it reasonably clear that strong
anti-inflationary powers or control devices would not be enacted. The combination of these developments seemed to influence business thinking and planning, for their potential stimulative or supporting force was recognized. Later in August, after strong inflationary movements had occurred forcing
prices to record levels, the special session of Congress legislated the emergency measures dealing with
consumer credit and member bank reserves which have been referred to earlier in this article.
In the Eleventh Federal Reserve District, the trend of economic activity closely followed the
national pattern, although there were some differences in degree with respect to the rates of growth
or levels of the major indexes. This similarity of trends, of course, might be expected, for business,
industry, agriculture, and banking in this District cannot be insulated against the effects and impacts
of national developments affecting economic activity; moreover, agriculture, which was an impor-
MONTHLY BUSINESS REVIEW
tant factor in shaping national price trends and which contributed substantially as a source of income,
is one of the principal bases of this southwestern economy; furthermore, petroleum production and
refining in the District-6f very great importance to the Southwest as a source of income-was
influenced by the national and, to some extent, the foreign demand situation; then too, wartime
and postwar industrial growth of the area has tended to make this part of the country more sensitive
to national industrial developments than perhaps has been true in years past; also, national credit
policies and other policies of a related character tend to bear with more or less equal force on the
banks of this District; in addition, in this District, as in many other parts of the country, a growing
population and serious shortage of residential and ·nonresidential properties stimulated a construction boom that has more than kept pace with national trends; finally, large-volume production of
the products of the area, in response to strong national and foreign demands, assured full employment and a steady and expanding flow of income payments.
Estimates of crop production in the five States lying wholly or partly in the Eleventh District
during 1948 indicate that several of the major crops of the area were produced in quantities in excess
of 1947 production, while virtually all important crops yielded a larger volume of production than
the 10-year (1937-46) average. Estimated production of cotton, grain sorghums, rice, and all hay
was larger than 1947 output or the 10-year average production. Grapefruit and oranges, although
declining from production levels of 1947, were substantially above the 1937-46 average; while
wheat production resulted in the third largest crop on record, being exceeded only by the remarkably
favorable crop of 1947 and the slightly larger crop of 1944. Livestock on farms in the five States
of the District continued to decline in numbers during 1948, with the decline being general among
cattle and calves, sheep, and hogs. Most pronounced declines were in the numbers of sheep and cattle
and calves, as poor range conditions and drought encouraged reduction in numbers.
On the basis of incomplete figures, it appears probable that cash farm income in the five States
of the District during 1948 may have approximated the total of almost $3,300,000,000 which
was reported for 1947. Among the several factors which combined to hold cash receipts from farm
marketings at a record level were the large volume of production of numerous crops which tended
to offset the effect of price declines, an unusually large volume of 1947-crop wheat marketed during
the first quarter of 1948, and very favorable livestock prices which tended to compensate for a
somewhat smaller volume of marketings.
Production of crude oil in the District during the year just closed is estimated at only slightly
less than 1,000,000,000 barrels, or approximately 10 percent above the total for 1947. Drilling activity
as measured by well completions probably was in the neighborhood of 13,700, second only to the
1937 record of 15,620 completions. Crude oil prices remained favorable throughout the year at
approximately $2.65 per barrel. The price situation was comparatively stable until early in the
fourth quarter when a large independent company raised its posted price by 35 cents per barrel.
Major companies resisted the increase, however, and in December the advance was rescinded. As a
result of the very large volume of production of petroleum during the year at stable, favorable prices,
the industry again represented one of the most important single sources of income to the District.
Construction contract awards in t he Eleventh District continued in very large volume throughout 1948, although during the closing months of the year the rate of expansion ·in awards leveled
off considerably. During the first six months of the year awards were well ahead of those of the comparable months in 1947, but the comparison became less favorable as the year progressed. There are
indications that the construction of manufacturing buildings may have passed its postwar peak,
but other nonresidential building is being maintained at record levels. Although residential building
was at boom levels during 1948, future prospects for this type of construction may depend in considerable part on a better adjustment of construction costs and housing prices to buyers' incomes.
In Texas, for instance, new dwelling units were built during 1948 at almost twice the national per
capita rate, but the long-continued rise in construction costs and real-estate prices may have reached
the point where selling of houses--especially in the range of prices from about $12,500 to $25,000
5
6
MONTHLY BUSINESS REVIEW
-poses real difficulties. Somewhat tighter mortgage terms and the problem of obtaining the cash
payment to complete transactions have been important contributing factors to a slowing down in
residential construction and real-estate activity.
Department store sales in the District reflected a better-than-national average volume of activity
during the year, despite an unexpected slowing down of sales which became evident in mid-October
and continued on through successive weeks into December. Cumulative sales for the year in this
District, according to preliminary estimates, may show an increase of about 8 percent over the
1947 volume. The large total of department store sales and retail sales in the District in 1948 reflected
the favorable trend in the production and value of petroleum and agricultural products, sustained
high-level construction activity, and a steadily increasing volume of industrial activity as the District's new and expanded industries added their contribution to the area's income.
Inventories and accounts receivable of department stores in the District rose appreciably during the year, while collections became slower. The rate of collections declined more markedly on
installment accounts than on charge accounts, but both types of credit showed the increased pressure of higher prices upon incomes. At the end of the year the ratio of collections on charge accounts
was still substantially above prewar levels, whereas the ratio for installment accounts was only moderately higher.
Principal assets and liabilities of the member banks of the District reflected the high level of
business activity in the area and the large value of agricultural, mineral, and industrial production.
In common with trends in other spheres of economic activity in the District, most banking items
showed an increase during the year but at a more moderate rate than during 1947. For instance, preliminary estimates indicate that total resources of the District's member banks may have increased
in the range of $125,000,000 during 1948, in contrast with an increase of approximately $465,000,000 in 1947, as total loans increased by about $235,000,000, investments in Government securities
declined by some $140,000,000, and holdings of other securities increased about $30,000,000. Demand
deposits and time deposits increased moderately during the year just ended, whereas during the preceding year an expansion of about $430,000,000 was reported. Reflecting a continuation of generally
favorable earnings, conservative dividend policies, and the sale of additional stock, capital accounts
of member banks in the District increased during 1948 and final figures may show a capital structure some $20,000,000 larger than a year earlier.
The brief summary of the trend of economic events during 1948 which has been presented
in this article tends to point up certain major readjustments which occurred during the year; it may
be helpful as we attempt to look ahead into the uncertainties of 1949. One of the most important
readjustments during the past year occurred in agriculture and rather clearly established the fact
that the inflationary force in that area of economic activity has virtually disappeared as large volume production increased supplies greatly. Also, in many lines of business activity the steadily increasing volume of goods has led to the appearance or at least rapid approach of buyers' markets. Strong
consumer resistance to rising prices at midyear and the tendency t oward a softening of the price
structure in certain important categories also are factors which seem to point toward the end of the
inflationary movement unless it is revived and stimulated by additional external or artificial forces.
Certainly it is evident from the, events of 1948 that prices again can move in two directions and
that competition in the disposal of most types of merchandise has reappe!1red and is increasing.
Since readjustments in one area of the economic system tend to extend their influences to other
areas, it is quite probable that the new year will witness a continuation of the process of adjustment;
therefore, this is an especially appropriate time for all businesses and banks to re-examine their affairs
to be sure that they will be able to adapt their operations to changing conditions. Even though it
may be probable that the over-all trend of business activity will be maintained at good or comparatively high levels in the months ahead, business and other forms of economic activity may expect
to be confronted by problems more numerous and difficult than those which have characterized
earlier postwar years.
7
MONTHLY BUSINESS REVIEW
Review of Business. Industrial. Agricultural. and Financial Conditions
'DISTRICT SUMMARY
The outlook for the agricultural and livestock industries
in the Eleventh Federal Reserve District is clouded by the continuance of the acute drought prevailing over the major portion of the area. While scattered rains have fallen recently in
some localities, a large portion of the District is seriously deficient in both surface and subsoil moisture. The lack of moisture has retarded the seeding and germination of small grains
and winter cover crops. The condition of livestock and their
ranges has deteriorated further during the past month, with
range feeds and stock water becoming very short in some areas.
The value of construction contracts awarded in the District
during November declined 10 percent from that in October
and was one-fourth smaller than in November 1947. Daily
average production of crude petroleum again rose to a new
peak in November and a further increase is indicated for December. The Texas Railroad Commission, however, announced
recently a reduction of 10 percent in production allowables for
that State for January 1949.
The value of department store sales increased from October
to November but was slightly less than that in the corresponding
month of the preceding year. A similar decline occurred during
the first two weeks of December. While sales of furniture stores
also increased in November, they were sharply lower than those
in that month of 1947.
greater choice in the merchandise purchased. These conditions
naturally contributed to greater selectivity in buying and to a
demand for better quality merchandise in relation to the purchase price. At the same time, there has been increasing evidence
that numerous consumers have been finding it more difficult to
maintain the volume of their purchases in the face of the rising
cost of living. During the past year the ratio of credit sales to
total sales has been rising somewhat, the volume of outstanding
accounts has increased substantially, and the rate of collections
on outstanding accounts has declined. The increase in outstanding accounts and the decrease in collections have been most pronounced with respect to installment accounts. The ratio of collections on installment accounts during November to receivables
outstanding at tbe first of the month was 19 percent as compared
with 30 percent during November 1947. The rate of collections
on regular accounts was 53 percent of outstandings during November as compared with 55 percent a year earlier.
•
WHOLESALE A>'1D RETAIL TRADE STATISTICS
.:
Retail trade:
Department swrea:
Totaillth Dist .....
~~~h.~:::::
Fort Worth ....... .
Houston . . , ....... .
San Antonio .... . . .
Shreveport, lA .... .
The loans of weekly reporting member banks in selected
cities of the District showed a further seasonal expansion between November 10 and December 15, but the increase was
much smaller than in the corresponding period of 1947. The
investments and deposits of these banks also continued to increase during the five-week period.
BUSINESS
Number ::::::~~,&,"ro~'D~~~i~.~'h~'~DP~m~~~~::~
Net sales
Stock! t
of
November 1948 from 11 mo. 1948 November 1048 (rom
compo with November October
reporting November October
firms
1M7
1948
11 mo. HI47
H14?
1048
Otber citiea ..••.•.•
Furniture st-orea:
Total 11th Diat.... .
D.u.. ....... .
Houston .......... .
Port Arthur. .... "
San Antonio ...... .
Wholesale trade:Ma.chinery, equip't
and supplies .••..
Dru.............. .
Dry good......... .
Groceries .... . . . .. .
Hardware ........ .
TobBcoo &: product..
Wiriogaupplies, con-
.8
•
7
4
7
6
3
18
- 2
- 5
- 4
- 6
- 2
-I
5
- 2
7
4
6
1
12
15
- 6
6
43
4
4
4
4
-20
- 38
- 31
-2
- 21
20
1
0
0
4
5
9
40
7
12
-23
18
-22
1
- 12
5
-I
4
10
- 14
10
1
4
7
23
8
18
6
10
-24
'6
-17
-6
-13
1
18
6
6
10
22
5
15
2
21
21
6-1
iii
-' i
16
8
2
4
16
-1
1
8
10
7
15
7
1
-2
1
5
-1
-2
The slowing down in consumer buying at department stores
which became apparent in October continued during November and early December. This trend developed not only in the
Eleventh Federal Reserve District but throughout the United
States. In the District the value of sales increased about 7 percent from the lower-than-seasonal level established in October
but fell 2 percent below the value during November a year
earlier, even though November 1948 had one more business day.
This decrease from the preceding year contrastsi
' ith a gain of
10 percent in cumuhtive sales for the first ele n months of
1948. The adjusted index of department store sale which makes
allowance for seasonal factors and the varying nu er o.f trading
days, amounted to 390 percent of the 1935 -39 average in November, which is sharply lower than the 415 percent for November 1947 and the all-time peak of 448 percent registered in April
1948. During the first half of December sales were slightly under
those during the corresponding period of 1947.
Stocks-(l93,1.39 -100)
_ - - - Unadjusted- - - - - - - - - A d j usted
Nov.
Oct.
Sept.
Nov.
Nov.
Oct.
Sept.
1948
1948
1048
1947
19'8
1948
1948
mh D~trict. 431
419
423
382
402
370
378
r-Revised.
-Unadjusted for seasonal variation.
D espite the current leveling off in consumer buying, it shouPd
be pointed out that dollar sales for the fourth quarter of 1948
may exceed those during the comparable period of 1947. While
the unseasonable temperatures prevailing during the fall months
probably have contributed to the slowing down in buying, readjustments in certain basic factors have been in process for several months. The expanding supply of available goods in both
durable and nondurable categories has enabled consumers to buy
virtually whatever merchandise might be needed and to have a
The underlying strength of consumer demand, however, is indicated by the generally favorable response to the special promotions and clearance sales featured by department stores during
November. These sales efforts apparently stimulated buying
substantially in certain departments where sales had shown a
tendency to lag. These developments suggest thac there may
have been some deferment of buying in anticipation of lower
prices or better quality merchandise but a willingness to pur-
struction materials
diatributonl . . ... .
No chg.
-7
-Compiled by United Btat.ea Bureau of Ctnrua. (Wholesale trade figures preliminary.)
tstocks at end of month
tIndicates change less than one-half of one percent.
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
Daily average salclI- (1936-39-100)
11 th Distriet.
Dallaa .. .. ..
Houston .....
No....
1948
475
432
5(11
UnadjustedOct.
Sept.
19.8
1948
427
444
.16
397
480
552
Nov.
1947
607r
467r
fi95r
No....
1948
390
357
.64
Adjusted
Oct
Sept.
1948
1948
388
.23
361
376
437
616
No....
1947
4.15r
386r
491r
No ....
19H
357'
MONTHLY BUSINESS REVIEW
8
chase goods whenever prices are considered reasonable. Strong
factors that will tend to sustain consumer buying in large volume are the high levels of employment and consumer incomes.
Department stores during recent months have shown a tendency to hold down inventories and to bring about a better
balance between supplies in the several departments. Total inventories at the end of November were only 6 percent larger
than a month earlier, and the 18 percent increase as compared
with inventories on the same date of the preceding year represents the smallest year-to-year gain reported during 1948. There
has been a tendency to reduce the volume of merchandise orders
outstanding. At the end of November such orders were 15 percent lower than a month earlier and 39 percent below those at
the end of November 1947.
Sales of furniture stores in the Eleventh Federal Reserve District, which had declined sharply from September to October,
increased 10 percent in November, but the total for the latter
month was 20 percent smaller than that for November 1947.
The size of the decline from a year ago, together with the widespread clearance sales advertised by furniture stores generally,
suggests that buyers may have become more restrictive in their
purchases and more selective in choices of merchandise. It is significant that the ratio of cash sales to total sales increased during
November, while collections were about the same as those in
October and 10 percent higher than a year ago. Accounts receivable at the end of November were fractionally.lower than
a month earlier but 41 percent higher than at the end of November last year. This year-to-year increase, however, was the
smallest reported for any month during 1948.
Reflecting a continuation of the upward trend shown for
other recent months, inventories at reporting furniture stores
incq,.sed 2 percent from October to November and at the end
of the month were 16 percent larger than a year earlier. For
several months the margin of increase over the preceding year
has been widening, and in November it was the largest reported
in more than a year.
AGRICULTURE
The drought that prevailed throughout most of the Eleventh
Federal Reserve District this summer and fall continued during
November and the first part of December. Showers in northeast
Texas and other scattered areas around mid-December brought
temporary relief, but other areas still needed rain. The dry open
weather, which delayed land preparation and seeding of crops,
was favor~ble for harvesting of vegetables in the southern part
and of cotton in the northwestern part of the State. There was
considerable damage to tender vegetables in the commercial
garden areas of T exas because of low temperatures. Due to the
extended drought during the fall and early winter, farmers were
unable to seed alL of their intended acreage of grains and other
winter cover crops. This shortage of moisture, together with
blowing winds and brief periods of freezing temperatures, also
resulted in losses of planted acreage.
The United States Department of Agriculture, in its December 1 report, estimates the 1948 United States cotton crop at
14,937,0 00 bales, or 229,000 bales below the estimate made a
month earlier. The reduction occurred principally in states east
of the Mississippi River, where rainy weather retarded harvesting
and reduced yields. The latest estimate, which is more than
3,000,000 bales larger than the production of 1947, is 24 percent above the 10-year (1937-46) average. The 1948 estimated
yield of 3 11. 5 pounds per acre is at the highest level on record,
being 17 percent above that of 1947 and 23 percent above average. Ginnings prior to December 1, amounting to 12,762,000
bales, represented 85 percent of estimated production or about
the same proportion of the crop ginned prior to the same date
in 1947.
The December 1 estimate of the Texas cotton crop of 3,200,000 bales, which is unchanged from that a month earlier, is
slightly below 1947 production but about 11 percent above the
10-year average harvest. Yield per acre is 1948, estimated at 176
pounds, is 22 pounds below that of 1947 but slightly above
average. The estimate of cotton acreage for harvest is placed at
8,750,000 acres, which, when compared with the estimate of
8,974,000 acres planted, indicates an acreage abandonment of
2.5 percent, or slightly less than the average of the previous five
years. Below normal rainfall throughout the State following the
start of harvesting favored a rapid harvest of the crop with
little loss in the field. The percentage of total expected production remaining for harvest on December 1 was much smaller
than usual. Ginnings in Texas prior to December 1 were 2,916,000 bales, or about 91 percent of the estimated production,
compared with 82 percent of the crop ginned prior to the same
date in 1947. The 1948 cotton production in Louisiana was
estimated on December 1 at 760,000 bales, which is 50 percent
larger than the 1947 crop and 29 percent above average. The
Oklahoma crop, placed at 370,000 bales, is substantially above
the 1947 crop but one-third below average. The New Mexico
and Arizona cotton crops, estimated at 240,000 and 320,000
bales, respectively, are the largest on record for these States.
TEXAS COTTON BY CROP REPORTING DISTRICTS
Yield per harvested acre
_ - - (pound.!!)
Crop
reporting
1948
Average
1937-16
I-N North High Plains . ... 170
l-S South High Plains .. .. 196
2 Permian Plains . ...
161
3 North Central. ... . .. . . 116
4 Nortbern Texaa Prairies 160
5 East Te:l88 . ........... 146
6 Trans-Pecoo .. . . . . . . . . . 490
7 Edwards Plateau . . ... .. 126
8 Southern Texas Prairiea. 164
9 Coastal Prairies . ....... 216
1947
districUJ
288
224
148
121
168
164
698
"134
indicated
D ec. 1
286
140
1<8
128
163
168
707
Production 5Ol)..1b. gross weight
balee (thoU&'londs) -1948
Average
1937-16
1947
5.\
lOS
446
528
45
764
346
946
494
16
810
77
inrJimtoo
Dec. 1
n
113
32
316
129
293
125
605
WO
20
780
220
140
18
280
180
352
3.437
3.200
10 South Texas ...........
204
223
219
303
201
256
331
46
317
129
141
State . . ........ .
170
198
176
2.894
1~
SOURCE: United States Department of Agriculture.
Crop conditions in the commercial vegetable areas during the
latter half of November and the first part of December were
rather unfavorable due to low temperatures, high winds, and
scme shortages of moisture. Tender crops suffered considerable
damage from low temperatures on November 29 in the LaredoWinter Garden-Eagle Pass Districts. At the same time, frosts
were reported from practically all sections of the Lower Rio
Grande Valley. At mid-December, hardy type crops in the Valley were in good condition, as they had suffered only minor 'cold
damage. Transplanting of onions was making good progress in
irrigated sections and was nearly completed in some areas of tbe
Winter Garden section. Planting of early spring crops was under
way in some areas of the Lower Valley. Some plantings in the
non-irrigated Coastal Bend area, where a good reserve of subsoil
moisture has been built up, were in need of surface moisture.
Marketing of commercial vegetables during the first half of
December was limited mainly to the hardy type crops, such as
beets, broccoli, cabbage, carrots, and spinach.
Conditions in the Lower Rio Grande Valley throughout most
of November and early December were favorable for maturing
and harvesting of citrus. While rainfall for the month was light
MONTHLY BUSINESS REVIEW
and accumulation of soil moisture during the season has been
considerably below normal, fall rains were timely and fruit sized
well with good quality. The low temperatures of November 30
did practically no damage, but strong winds for two days resulted in considerable defoliation of trees. Production of grapefruit in Texas, estimated at 19,000,000 boxes, is 18 percent less
than last season but 9 percent above average. The Texas orange
crop is estimated at 4,700,000 boxes-l0 percent less than last
season but 45 percent above average. The United States grapefruit crop is estimated at 56,250,000 boxes, compared with 61,630,000 boxes in 1947, while the orange crop estimate is placed
at 114,900,000 boxes, compared with 110,380,000 boxes the
previous season. Texas orange and grapefruit shipments during
October and November were 37 and 15 percent, respectively,
ahead of movements during the same period in 1947.
Ranges and pastures in the District continued to deteriorate
during November and early December except in southern counties of Texas and the northern Panhandle area. Some precipitation was reported throughout most of the District on December 14, but for the most part it was not sufficient to bring material relief. The growth of small grain pastures, rescue grass,
clovers, and winter weeds continues very slow except in the
northern Plains counties of Texas where early planted wheat
was supplying fair grazing. Despite heavy supplemental feeding
in all areas, except extreme south Texas and some northern
Texas Panhandle counties, livestock continued to shrink.
CASH RECEIPTS FROM FARM MARKETINGS
(In thousands of dollara)
Oetober 1948
Slate
Cro.,.
Arizona
J..£Iuisiana .....
New Merico ..
OkL'lhoma ..
Texas .....
$ 8.362
45.3 19
11,49-4
.. 56,616
143,047
$ 7.783
0,923
Total. .... $265,438
Livestock
Oetober
Cumulative receipts
1947 --Jan. 1 to Oct. 31--
31,634
81,454
Total
$ 16.145
55.242
41.646
88.250
225,101
Tolal
$ 22.395
58.121
47.657
73,170
281,9<{
11H8
$ 110.292
283.490
128.45.1
690,217
1.698,934
1947
$ 140.238
241.1G1
129.015
530,126
1.513,10.1
$160,946
$426.384
5483,287
$2,761,388
12,5.13,675
30, 152
SOURCE: United States Department of Agriculture.
The number of cattle on feed in the United States was expected at the first of Dec.ember to exceed the volume of 1947,
according to the Bureau of Agricultural Economics. Cattle feeders bought heavily during November, upsetting earlier indications of a decline in feeding operations during the current season.
Shipments of stocker and feeder cattle going into 11 Corn Belt
states during November showed a 39 percent increase over November 1947. In Iowa and Illinois, the biggest corn-producing
States, November in-shipments of cattle were the largest on record. Also, a large number of cattle will be on feed in the West
this season, with California feeding a record number. However,
cattle feeding in the wheat pasture areas of Kansas, Oklahoma,
and Texas has been hampered by inclement weather. The number
of lambs on feed in the United States will be the lowest in 20
years, due to heavy slaughter and to shortage of grain pastures.
Lamb feeding on wheat pastures in western Oklahoma and the
Texas Panhandle remains negligible.
Total receipts of livestock at the Fort Worth and San Antonio markets during November showed a seasonal decline of 4
percent but were above receipts of November 1947 by the same
percentage. Receipts of cattle were off 5 percent from the previous month and down 13 percent from the corresponding
month in 1947. Although receipts of calves rose almost onefourth, they were still 7 percent below the same month of the
previous year. Receipts of hogs in November, rising seasonally,
were double those of October and 29 percent above the same
9
month in 1947. Sheep receipts, making a sea50nal decline of 36
percent from October, remained 15 percent above November 1947.
LIVESTOCK RECEIPT8-(Number)
- - -- lt~ort Worth - - - - - - Ssn AntolJio - - -
November November
Class
Cat-LIe ...••
CalV(:ll ................ .
Hogs ..••
Sheep ...
1948
60,108
54,056
86.095
87,324
1947
81,671
60,153
65,01 1
80,458
October November November October
1948
70,362
40,545
40,649
137,004
1948
38,714
34,664
7,452
52,267
IIH7
41,934
35.691
7,184
32,256
1IH8
33,907
31 ,689
7,078
60,956
COMPARATIVE TOP LIVESTOCK PRICES
(Dollan per hundredweight)
- - - F o r t Wortb------Sa.n Antonio - - November November October November November October
Class
Beer steers ....... ... .... .
Stocker steers ...... . . . . . .
Heirers and yearlings .....•
Butcher cows ...... . . . .. .
Slaughter calves .... . .... .
Hoga .......... . ... .. •. ..
Iambs ..............••••
1948
1947
1948
1~8
~IOO
~I . OO
~I.OO
W .W
25 .50
30 .00
21.00
26 .00
26 .00
25 .00
22 .00
26 .00
18.25
24.00
26.10
23 .10
25.W
31.00
26.00
26 .00
27.00
25.00
26.00
25.00
20.00
25.25
25 .00
21 .10
IIH7
m.oo
25.00
17.00
22.00
25 .76
21.00
IIH8
m.oo
26.00
26.00
20.50
26.26
26 . 50
22.50
The November 15 price report of the United States Department of Agriculture shows that the index of prices received by
Texas £lrmers for all commodities, which was 300 percent of
the 1910-14 average level, was one point above the level of the
previous month. This rise was in sharp contrast to the United
States index of prices received by farmers, which declined for
the fourth consecutive month to the lowest level since June
1947. Price movements among commodity groups in Texas
varied, with increases registered for food grains, feed grains and
hay, poultry and eggs, and oil-bearing crops more than offsetting
price declines for meat animals, citrus fruits, sweet potatoes,
and truck crops. The most important decline affecting meat
animals was in the price of hogs, which, at $21.50 per hundred
pounds, was off $1.90 for the month. Prices for beef cattle and
veal calves were about unchanged from the previous month,
maintaining a level about $4.00 per hundred pounds above a year
earlier. Sheep and lambs, at $9.70 and $20.10 per hundred
pounds, respectively, were off about 20 cents from October.
Rice advanced 55 cents to average $2.75 per bushel. Corn
prices showed no change, while prices of other grains made
sl ight gains during the month. The sharpest decline occurred in
the prices of citrus fruits, which dropped about 60 percent.
While citrus prices usually decline substantially during the marketing season beginning October 1, the decline this season occurred earlier and was very pronounced due to the heavy early
season marketings and the poor quality of the early fruit, which
resulted in decreased consumer demand for Texas citrus.
Reports from spot commodity markets indicate that from
November 15 to mid-December the prices received for corn and
oats declined, while prices of wheat and grain sorghums made
little change. Cotton prices rose slightly during the period, and
while lamb prices held steady, prices of other livestock declined.
FINANCE
During the five-week period ended December 15 totalloans
of selected member banks in leading cities of the District increased by $17,845,000. Commercial, industrial, and agriculturalloans rose by $10,385,000 and "all other" loans by $7,128,000 to account for most of the loan expansion. Other loans
for security trading and real-estate loans showed minor increases
of $753,000 and $384,000, respectively, offset in part by declines of $545,000 in loans to brokers and dealers in securities
and $260,000 in loans to banks.
MONTHLY BUSINESS REVIEW
10
Although most types of loans have continued to increase at
selected member banks in this District during the past five
weeks, the increase has been much less in amount than that
which occurred during the comparable period in 1947. During
the same five-week period in 1947 total loans of these selected
member banks increased by about $44,100,000, as commercial,
industrial, and agricultural loans rose by $42,000,000, realestate loans by approximately $1,500,000, and the category "all
other" loans by about $8,000 ,000, with partially offsetting decreases in other types of loans. The less rapid increase in bank
credit in this District during the past few weeks in contrast with
comparable weeks 'of 1947 reflects a combination of a slowingdown in business activity, especially in retail trade, construction,
and real-estate transactions, somewhat tighter credit conditions,
and a more selective attitude on the part of the District's member banks with respect to loan commitments.
Total invesrments of the selected member banks in the District rose hy $9,308 ,000 during the five-week period ended
December 15 as a result of increases in holdings of United States
Treasury bills and United States certificates of indebtedness.
These banks reported a reduction in holdings of United States
Government bonds by $18,901,000 and a decline in holdings
of United States Treasury notes by $2,403,000. The trend reflected during this five-week period was a continuation of the
trend which has been evident during the past year. For instance,
since December 17, 1947, selected member banks in this District
have added $27,220,000 to their holdings of Treasury bills and
have increased their portfolios of Treasury certificates of indebtedness by $75,962,000, while disposing of Treasury notes
and United States Government bonds in an amount totaling
$186,134,000.
Total deposits of member banks in leading cities of the District increased by $73 ,964,000 as a result of an increase in demand deposits adjusted amounting to $80 ,814,000 and an increase in interbank deposits of $5,591,000, offset in part by
declining time deposits and deposits of the United States Government.
CONDITION STATISTICS OF WEEKLY REPORTING MEMBER BANKS
IN LEADING CITIES-Eleventh Federal Reserve District
(fn t.hoUSRnds of dollsr8)
Dec. 15,
ltem
1918
Tow.l1oans and inveetmenls ....... .............. $2,336,438
Total loans-Net t ........... "
........ _. _.
1,11 5,528
Totalloana--GroIII ............... __ . _. _. _......
Commercial, industrial, and agricultural loana . ..
Ulana to brokers and de.'llers in securities..... . . .
Other loans for purcbasing or carrying securities . .
1, 121,849
774,074
5,754
57.972
Real_t' loans........... .. ... . ............
Lao" to ban\u...............................
87.732
86
Dee. 17.
Nov. 10.
1947
1918
12,306.886- S2,30fl.285
. . . . . .. .
1,097,610
l ,Oli.930716,109
6,407
66,083
76.272
I Il3
1,104.()()4;
7&3,689
6.299
57,2 19
87,348
346
All otber loans . . . . . . . .............. . .........
196,231
152 .866
189.103
Total investments... . . . .............. . . . . . .... . 1,214.589
1,288.956
1,205,28 1
U. S. Treasury billa .... . ............ . .... . ....
64,047
36.827
45. 108
U. S. Treasury certificates of indebtedness. . .. . . .
244,079
168.117
232.379
U. B. Treasury notes . ... .. ,"",." .. , .. ,',.. .
66,W7
128.1 99
68.{l1 0
U. B. Government bonda (inel. gtd. obligational.
719, 187
843.629
738.088
Otber securities ... . . . . . . . ........... . ' ... . , , .
120.769
112, 184
120.700
Reserves with ~~ed e ral Reserve Bank. .... . . . . . . . . . . .
571.568
487.847
673,IH5
Balances with domestic banks , ... , . , . . . . . . . . . .. . , , .
329,501
2DO.828
28 1,427
Demand deposits-adjusted· .. .... . . ,., ....... ,... 2,016.334
1,894.221
1,D34,520
Tim, depooit..... ... .......... .. .................
410.816
378,991
417,1 2'7
United States Government deposits .. . . . . . ... . . . ,.,.
26.426
15.61 0
32,2r.l)
lnterbank deposits ... . .. . . . . .
650.038
672.334
644,447
BorroW'lDg8 from ~~ederal Reserve Bank. . . . . .. .
None
9,500
2,000
'Ineludes all demand deposita other tban interbank and United States Government, less
caah items reported as on hand or in process of coUection.
· Prior to June 30, 1948. the individual chases of loan.!! were reported net ; however, tbe
amount of reserves deducted IJUbaequent to June 30, 1948, was ItO amall as to haYe no signi 6.cant
effect upon the comparability or the data.
tAfter ded u c~i o u8 for r(l6Crves and unallocated chargtH)fJ8.
Gross demand deposits of member banks in the Eleventh District continued the upward trend which has been evident for
many months and during November averaged approximately
$5,407,000,000. This increase in deposits was slightly larger
at the country banks of the District, which reported a total
sOme $82,000,000 more than a month earlier in contrast with
an increase of about $78,000,000 at the reserve city banks.
Time deposits of the District's member banks increased slightly,
with the bulk of the increase also occurring at the country banks.
Comparison of most recent figures with those of November
1947 shows that gross demand deposits of the District's member
banks have increased by approximately $122,000,000, while
time deposits during the same period increased by about
$51,000,000.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
Eleventh Federal Reserve District
(Averagee of daily figures. In thousands or dolla.rs)
Combined total
Reserve city banks
0 ....
Time
demand
Date
Time
demand
Country banb
Oro..
demand
Time
$503.710 $2 ,341,161 $319.618 $2,523,213 $184,1XI2
543,68.1 2,524.800 337,321 2,761,173 206,36l
687.716 2,456,1l33 375,215 2,639,501 212.50l
69l ,551
2,449,802 379.803 2,662.609 211,748
589,5l9 2,508,252 378.943 2,695,516 210.576
692,462 2,606,619 379.873 2,740,000 212,589
594,125 2,584,489 379,005 2,823,38.1 211,220
November 1946 . .... . .... $4.86l.407
November 1947 ... . . . ... . 5,286.063
July 1948 . . .............. 6.000.434
Augun 1948 .. , ..........
ScpLembcrI948 .. ,.,., ...
October 194 8 ............
November 1948 , . . . . .....
0 ....
5.112,411
5.203 ,768
5,247,51 9
.5,407,874
SAVINGS DEPOSITS
Eleventh Federal Reserve District
Percentage change in
savings depoaita from
Novcmber 30. 1948
Number of
re6:rting
oks
City
I.ouiaiana: Shreveport
Texas:
Beaumont . ... , , ..... . .
DaIIaa ................
EIP..., ..... .. .... . ...
Fort Worth ............
Galveston .. ...... . ... .
HoU8i.on , ... . .........•
Lubbock .. ... ....... . .
Port Arthur . ....... , ..
San Antonio . ...... . . . .
Waoo .........•.......
Wichita Falls . ..
All other.
Total ......
Amo~nt
Number or
aavings
depoaiwrs
or
8llVIDg9
dcp:>sita
3
82.688
$ 21.954,100
3
8
2
4
4
8
2
2
5
3
3
55
12,121
140,151
31,607
43,136
23,129
1Ol,793
l ,503
6,178.298
77,941,151
22,18.1,379
31.396.181
21.555.706
39,195
lO,201
7,069
62,730
45,234.494
9,1l36,686
4,523,442
63,959,811
102
511,411
1382,221.6l9
Nov. 29,
1947
- 1 .1
1918
0 .03
0.3
O.l
0.8
0.4
0.8
0.1
26.8
- 0.7
- 0.1
0.4
-
0.6
0.1
3,500.098
4,782.072
-
6. 6
0.7
5.4
1.6
2.1
4.5
91.3
6.1
4.3
3.0
3.8
0 .9
-
72,978.105
6,121
October 30,
-
-
-
1.4
O. l
Bank debits reported by banks in 24 cities throughout the
District declined 1 percent during November, as 16 of the
cities reported a smaller volume. Largest decreases in bank debits
occurred at the banks in Shreveport, Louisiana, and Corsicana,
Houston, Waco, and Wichita Falls. The decline in 'bank debits,
although not a wholly accurate measure of the trend of business and trade activiry, docs reflect the slowing-down that has
occurred during the last few weeks. The annual rate of turnover of deposits at these reporting banks also declined in November from the October level but continues above the level
of 1947. During November the annual rate of turnover of deposits was 13.1, in contraSt with 13.4 a month earlier. The most
active turnover of deposits was reported from banks in Dallas,
MEMBER DANK RESERVES AND RELATED FACTORS
Eleventh Federal Reserve District
(In millions of dollars)
Changes in weeks ended
Cumulative changes
5 weeks
ended
Dec. IS, Dec. 8, Dec. I, Nov.24, Nov.17, Dec. 15,
Item
Federal Reserve
1918
1918
1948
1948
1948
5.2 - 17.7
13 .8
1948
Ja.n. 1 to
Dec. l5.
1948
credi~
1Dea1. ....... . .... .. ...
4 .6
luterdistrict commercial 4:
financial transactions .. .. - 11 .0
Treasury operations . ..... - 1. 7
Curreoey transactions . ....
3.6
Ot~!d:~a:~!ctb&nk.. .
Otber Fedeml Reserve
accountB., . . ..... . . .. . -
3.5 -
4.0 - 25. 3 11.3
22.0
1.1 - 4.6
9.2 6.4
2.4
7 .3
1 .3
2 .6
1.1
0.5
-48 .8
42 .3
5.1
-
- 00.7
192.3
- 7.4
0.1
0.7
0 .6 -
0.4 -
0.2 -
0.2
0.6
0.1 -
0 .5
0 .4 -
0.2
0.1
-
0.3
U
14 . t
-
2.4
104.5
Member bank rcscrve
29 . 7 - 23 .6 -18 .5
balances .... .... .. .. .. . - " .2
Note: Amouots preceded by • minus lip reduce J'eSerTt8;
an othen add to ftIIieI'VeL
MONTHLY BUSINESS REVIEW
which showed a rate of 17.4, while banks in El Paso, Fort Worth,
Houston, and Lubbock reported a turnover of 14 or more times
per year.
BA:-<K DEBITS, E:;D-OF-MO~TII DEPOSITS, AND ANNUAL RATE OF TURNOVER
OF DEPOSITS
(Amounta in thousands of dollars)
-Debits--Petg.change over End~r-montb
Nov.
Nov.
Oct.
deposits·
City
19(8
1947
1948 Nov. 30,1948
Arilona: Tucson ...... S 59,326 12
- 2
I 86,807
Louisiana:
Monroe . . .. . . . ... .
38,432
7
41,673
-:3
Shreveport . .. . ... .
143,731
18
-13
164,794
New Mexico: Roswell .
16,923 16
1
20,308
Tems:
Abilene .. . ....... .
36,497 10
42,688
t
Amarillo . , ....... .
93,435
- 3
8
86,441
Austin .. . .. , ..... .
106.779 11
2
101,029
Beaumont ... . .... ,
103,357 22
102,263
- t
Corpus Christi . . , . .
75,768
5
I
81,417
Corsicana . , ...... ,
11,138
- lb
9
20,682
DaUa. ............ 1,078,512 17
2
758,049
El Paso .. ....
138,646 20
3
114,195
Fort. Worth ...
341,248 12
4
296,362
67,024 10
Galveston .. "
- 2
98,939
1,081,976 20
Houston .... ..
- 5
924,663
lli,721
- 1
wredo ...... .
3
22,299
Lubbock ..........
79,555 - 9
67,544
7
33,939 12
Port Artbur . . .. ...
- 3
40,023
San Angelo .. . . . ...
30,935
6
40,843
- t
San Antonio .......
- 2
235,244
6
322,i81
16,14D
Tu.nrknuat. . .... . .
3
- 2
22,786
41,034 14
I
54,277
53,075
4
- 6
67,398
Wichita Falls . .....
56,656 17
- 6
82,660
-
'fJ''::::::::::::::
-
-
Anoual rate of turnover
Nov.
1948
8.3
Nov.
Oct.
li47
7.7
]948
8.6
11.0
10.3
10.2
10.4
9.7
9.1
11.4
12.0
10.9
10.3
13.2
12.6
12.1
11.3
6.5
17.4
14.6
14 .0
8.3
14.3
8.5
14 .0
10.4
9.2
8.8
8.6
9.1
9.5
8.3
10.0
12.1
11.3
10.7
11 .8
6.0
15 .8
12.6
13 . 1
8.0
13 .3
8.9
16.6
9.5
8.9
8.4
8.4
8.9
9.1
7.7
10.3
13.8
12.1
12 .6
11 .3
7.8
17 .5
14.4
13.8
8.5
15. 1
8.6
13.7
11.0
9.6
9.1
8.6
9.1
10.3
8.8
Total-24 cities ... . . . $3,955,100 15
- 1
13,669,921
13.1
12.2
13.4
·Demand and time deposits at the end of the month include certified and officers' checks
outstanding but exclude deposits to the credit of bonks..
rrbis figure includes only one bank in Teurkana. Tens. Total debits for a.ll banks in
Texarkana. Texas-Arkansas, including two bana located in the Eighth District. amounted to
126,825.
tlndicates change of less than one·half of one percent.
Principal changes in the condition of the Federal Reserve
Bank of Dallas during the month ended December 15 included
a decline of more than $4,000,000 in holdings of United States
Government securities and a reduct.ion in total earning assets
of about $7,400,000. A counterseasonal movement of currency
in circulation is reflected in a decline in Federal Reserve notes
of the Dallas Bank in actual circulation from $630,294,000 on
November 15 to $628,738,000 on December 15, This counterseasonal movement reflected in figures for the Eleventh District
is also characteristic for tbe Nation as a whole.
11
been lagging in recent months, increased sharply in November
but were still 21 percent under the total for the same month
of 1947, This rise in residential awards from October to Noyember, however, was more than offset by the 25 percent decline in awards for nonresidential construction. During t he first
eleven months of 1948, the total yalue of construction contracts awarded was 10 percent larger than in the corresponding
period of 1947; but residential awards were up only 2 percent,
compared with 14 percent for other construction.
VALUE OF CONSTRUCTION CONTRACTS AWARDED
Eleventh District-total ..
Reaidential. ...... .
All other . ........ .
United St.atcs·-toto1. . . ..
Residential . .
All other . ...
(In thousands of dollars)
November
October
1947
1948
I 59,123
I 71,235
27,251
17,148
43,984
41,975
715,108
778,006
290,220
296,760
424,888
481,846
November
19(B®
I 52,920
21,497
31,423
611,216
264,033
347,183
Jan. 1 to
194B®
I 698,384
234,160
464,224
8,735,595
3,351,269
5,384,326
Nov. 30
1947
$ 637,160
229,116
408,044
7,134,605
2,926,977
4,207,528
®-Preliminary.
'37 states eaat of the Rocky Mountains.
SOURCE: F, W, Dod.. Corporation.
BUILDING PERMITS
Percentage
Percentage change Jan. 1 to Nov. 30.1948 cha.n~e
valuation from
valuatIOn
No.
Valuation from 1947
Valuation Nov. 1947 Oct. 1948
November 1948
City
Louisiana:
Shreveport . .
Texas :
Abilene ... .
Amarillo .. .
Austin ... .
Beaumont .... .
g~lb!~ ~.h.r~t~ .
ElP""" ........
Fort Worth .....
Galveston ... .
Houston . . . .
Lubbock .. . .
Port Arthur . .
San Antonio . ...
Waco .... .. ... .
Wichita Falls ...
Nn.
231
646,091 -67
-9
75
286,7M - 2
512,571 - 60
824,250 - 53
894,986 179
1,232,308
73
8,120,036
96
425,391 -64
2,704,058 -15
136,980 - 60
7,663,925
34
1,618,838 182
41
336,912
2,654,880 - 36
bI5,960 - 13
220,005
88
- 42
-44
- 37
40
17
59
-82
20
-29
5
237
00
14
- 28
20
182
190
331
234
1,292
148
581
135
538
181
137
1,758
99
97
Total. ..... 6,204 128,793,965
10
3,462 5 26,170,918
1,052
2,193
123
4,834,741
20,899,219
9,058,083
15,261,068
84,816,786
10,783,168
26,029,894
3,490,870
92,273,372
13,596,667
3,088,246
32,809,212
10,M8,1l1
3,614,126
20
23
14
68
8
61
44
5
44
42
37
41
23
30
58
71,153 5368,608,990
30
3,433
4,029
8,280
15,130
1,562
6,256
1,744
8,073
2,640
1,579
14,314
1,620
877
10,024,510
The dollar value of new construction put in place in the
United States in 1949 is estimated by the Department of Commerce and the Department of Labor at $18,750,000,000, or 5
percent above the 1948 record, However, the physical volume
of construction is likely to be no more in 1949 than in 1948,
since most or all of the increase in dollar value is expected to
CONDITION OF THE FEDERAL RESERVE BANK OF DALLAS
PROBABLE VOLUME OF NEW CONSTRUCTION EXPENDITURES IN 1948 AND 1949
(In thousands of dollar!)
Hem
Total gold certificate resen-es ... . ...... , ....... ... .
Discounts for member banks ... .............. . .. .. .
Foreign loans on gold . . ............... ,. , .... .. .. .
U. S. Goveroment securities . .. ................. . . .
Total earning assets . ...... . ..................... .
Member bank reserve deposits . ................... .
Federal Reserve notes ill actual circulation . ........ .
Doo. IS,
1948
$64~~;~
6,667
1,042,036
1,048,703
967,657
628,738
Dec. 15,
1947
1515,079
11,000
1,313
975,344
987,657
830,801
627,735
Nov. 15,
1948
1641,528
2,280
7,867
1.046,001
1,056,188
978,391
630,294
Treasury fiscal operations during the four weeks ended December 9 included weekly retirements of $100,000,000 of
Treasury bills. During the same period the average rate of discount on offerings of Treasury bills firmed moderately, rising
from 1.141 percent per annum to 1.152 percent for the issue
dated December 9. A further slight rise to 1.153 percent was
reported for the issue of bills dated December 16, an issue which
was rolled over in total.
INDUSTRY
The value of construction contracts awarded in the Eleventh
Federal Reserve District during November totaled $53,000,000 ,
or 10 percent less than in October and 26 percent less than in
November 1947. Awards for residential building, which had
(Amounts in millions of dollars)
1949
518,760
Total new construction .... ............... .
13,750
Private COIllltruction. . . . . . . . . . . . . . .. . . . ... . .... , .... .
Residential bwldiol/: (nonfarm)
...
. .. ...... . .
6,500
4,050
Nonresidential bnilding (nonfarm).. . ..
. . . . . . . . . .. .
1,300
Industrial.
1,460
Commercial
.
450
WareboWiCS, office snd loft buildings .. .
1,000
Stores. restaurants, and gamges . .
1,300
Othcr nonresidcntial .
325
Religious ... .
325
Educatioua1. .. .. . . . .
275
Socia.l and recreational. .' .. . . . ... . . . . . ..... , ...
Hospital and institutional .
175
Hotels lind miscellaneous .
200
460
Farm construction
2,760
Public utilities.
350
Railroad .. . . ... . ..... .
725
Telephone a.nd telegraph.
1,675
Other . .... .
5,000
Puhlic construction. . . . . . . . .
. .. . ... . .... .
150
Residential building .............. . . . .. . ... . .
1,375
Nonresidential building ............. . ...... .
700
Educational . ..... . ...... . ............ . ..... .
375
Hospital and institutional . ........ . .......... .
300
Other nonresidential . . . ................. .
Military and naval facilities . . . .. ' ......... . ........ .
17S
1,700
Bjghways. streets, and ronds ... .. . ... . .............. .
550
126
~~~~~i=~ubli~ :,ar~rc:~~~rP~iSCs:
760
Conservation and development . ..
. ......... .
175
All other public construction .. . . .
SOURCES: United States Department of Commerce.
United States Department of Labor.
Type of construction
::::::::::::::
1948
517,775
13,735
7,100
3,600
1,380
1,260
350
910
960
230
245
215
115
155
500
2,535
360
tl75
1,510
4,040
65
970
625
200
225
150
1,560
450
105
600
150
Percent
change
5 .5
-
-
.1
8.6
12.5
5.8
15.1
28.6
9.9
35A
41.3
32.7
27.9
52.2
29.0
- 10.0
8.5
o
7.4
10.9
23 .8
130 .8
41.8
33.3
87.5
33 .3
16.7
9.7
22.2
Ht.O
25.0
16.7
12
MONTHLY BUSINESS REVIEW
result from higher average construction costs, The Departments
have indicated that increases for 1949 over 1948 are expected
for the various types of public construction and for private nonresidential building other than industrial. Industrial and residential building is expected to decrease moderately, with the number of new dwelling units started declining to about 875,000
from the estimated near-record total of about 925,000 during
1948. Maintenance of a high volume of home building in 1949
is generally believed to depend to a considerable extent upon the
ability of builders to adjust their operations to include a larger
proportion of lower priced homes than in 1948 , .
Production of crude petroleum during November reached
new peaks in both the District and the Nation, The daily average production in the District, amounting to 2,771,000 barrels,
was 19,000 barrels higher than in October and 205,000 barrels
larger than in November 1947, Daily average production in
the Nation was 5,631 ,000 barrels, or 57,000 barrels more than
in the previous month and 373,000 barrels more than in the
same month a year earlier. Production during the first eleven
months of 1948 exceeded that for the corresponding period of
1947 by 10 percent in the District and 9 percent in the Nation.
CRUDE OIL PRODUCTION-(B.".l.)
November 1948
Total
production
Texas:
District 1. ..... " .........
829,950
2 •..... ...........
6~39,250
3 ... ............. .
4 ..... ...••••.
5 ........ .
15,126,!lOO
7,1143,100
6 ...... ..
Other 6 ..
7b .......
70 . •.. ...
1.5.53.850
8,910,450
3,747,000
1,746,000
1,466,850
8 ...... . . . .
22~98,OOO
9........ ..
4,278,1\00
2,661,1\00
75,701 ,550
4,027,050
3,413,700
10 .... ... .
Tot.al T ame. .
New Mexico ........ . .
North Louisia.na ............. .
ToLal Eleventh District. .. ".
Outside Eleventh District .... .
Uoiwd States .............. . .
Daily avg.
product.ion
27,665
177,975
504.230
254,770
51,795
297,015
124,!lOO
58,200
48,895
746,600
142,620
88,720
2,523,385
131,235
83,142,300
113,790
2,771,410
85,777,350
168,919,650
2,859,245
5,630,655
Increase or decl'(lMe in daily
average produotion (rom
November 19*7 October 1948
3,108
15,768
17,183
689
10,237
-7,137
7~53
16,750
7,237
102,940
- 814
- I,OSO
149
627
624
-4 ,879
3,01!4
698
1,130
17 ,997
8,885
275
547
183,560
281
17.502
1,179
553
19.234
37,853
57 ,087
14,.117
7~03
205,380
167 ,557
372,937
SOURCE: Estimated from American Petroleum Institute weekly reporta.
Daily average crude oil runs to refinery stills during November were close to record levels in both the District and the
Nation. At the same time, stocks of crude oil have continued
to rise, reaching a level 5 percent above a year earlier, Stocks of
refined products other than gasoline also have increased substantially and are beginning to tax the available storage facilities
of some producing companies,
In view of the improved inventory position with respect to
crude petroleum and refined products, the Railroad Commission of Texas has cut January average daily allowable petroleum
production to 2,466,034 barrels, or approximately 10 percent
below that of December and 2 percent under the December
rate of actual production, Moreover, the accumulation of large
stocks of petroleum products is taxing the storage facilities of
some refineries, leading to a curtailment of operations and to a
softening of prices of some products. Some companies which
earlier in the fall increased the posted prices of crude oil have
rescinded that action,
The petroleum requirements of the N ation in 1949 have recently been estiroated by the Interstate Oil Compact Commission at 6,517,000 barrels daily , or 6 percent more than in 1948.
This estiroate indicates some slackening in the rate of increase
of demand and suggests tha t production need not increase so
rapidly as heretofore. Sufficient working stocks are expected
to be available to meet fluctuations in requirements while allowing production at an approximately uniform rate,
ESTIMATED DAILY AVERAGE PETROLEUM SUPPLY
A~D
REQUIREMENTS, 1919
(Amounts in barrels per day)
End use
Gasoline .... . ............... . ... .
Kerosene ....... . ...... , .. .
194:9 requiremellts
2,648,000
354,000
1,108,000
1,409,000
098,000
Distillate . . ..... . . "
Residual ......•.. , .
Other ....... .
Total . . ... .
Percent change from 19(8
7
11
12
o
4
6,517,000
194.9 new supply
Sources of supply
Crude production . . ".
Natur3t gas liquids ..
Imports ..
5,550,000
420,000
545,000
Total. ...
.. .. .. .. .. .. .. .. .
6,515,000
SOURCE: Interstate Oil Compact Commission.
The 1948 cottonseed production in the United States, based
on a 14,937,000 bale cotton crop and past ratios of lint to seed,
probably will approximate 6,036,000 tons, compared with 4,681,000 tons in 1947 and a 10-year average of 4,947,000 tons,
Since over a 10-year period an average of 82 percent of all seed
produced is received at mills for crushing, receipts during the
August 1948-July 1949 season should approximate 5,000,000
tons, Receipts during the first four months of the season totaled
4,172,000 tons or 83 percent of the estiroated season total, compared with receipts of 76 percent of the total during the corresponding period of the previous season, The high receipts thus
far this season reflect the rapid harvesting of cotton and the
comparatively prompt movement of seed to mills.
In Texas, the 1948 cotton crop is estiroated at 7 percent less
than the 1947 crop, but ginnin gs are advanced and receipts of
cottonseed at mills during the first four months of the season
were 8 percent more than durin g the corresponding months of
the previous season.
Production of cottonseed products this season has been 24 to
29 percent above that for the previous season, while shipments
have been up 28 to 34 percent, with the result that the seasonal
increase of stocks of products at mills has been less than during
the previous season, November 30 stocks of aU products except
oil exceeded those of a year earlier only because of larger stocks
at the beginning of the present season.
COTIONSEE D AND COTIONSEE D PRODUCTS
November 1948
- - - Toms -----United Stat.ca--Aug, 1 to Nov. 30
Aug. I to Nov. 30
This season !Aut BCllSOn Tbi59Cf1son Last 8C8son
Cottonseed received at mills (toM ) .. . ••
Cottonseed crushed (tons) ... . ....... . .
Cott.onseed on band ~ov. 30 (tons) .... .
Production or products:
Crude oil (thousand pounw) .. .
Cake a nd meal (tons) .. .
Hulls (Ions) ......... .
Linters (running bales).
Stocks on hand November 30:
Crude oil (thousand pound.e) ..
Ca.ke and meal (tODB) ..
H uU! (t ODS) ...•......
Linter! (running bales)
964,835
895,214
4,171,898
554,174
469,370
480,272
2,124.956
2,129,379
141,766
221,493
104,820
157,099
666,487
963,339
484,534
663,667
514,707
17,477
26,332
15,928
12 ,594
22.997
65,222
43,271
49,199
78,427
74,606
170,331
58,221
24,054
474 ,855
166,435
264,837
123,364
182,288
3,098,201
1,. 8',.m
1,509,160
];9,821
382,379
526,988
70,183
70,04 0
169,757
SOURCE: United SLates Bureau of CCDSUIJ.
With increasing world production of fats and oils and with
United States production of edible vegetable oils expected to
reach a new record of about 3.6 billion pounds during the 194849 se.1son, prices of cottonseed and cottonseed oil this season
have remained below the levels of the previous season and the
autumn rise in the price of cottonseed in Texas has been much
less than during 1947 or 1946.
DOMESTIC
CO~SUM PTION
November
AND STOCKS OF COTION- (Bales)
~ovembe r
October August 1 to November 30
1948
J947
11 ,007
685,166
759,860
In consuming estabm'ts... 1.653.888
Pobtio st•. & comp....... . 8,431,988
1.848,480
5,363,315
Consumption at:
Texas mills . .. ......... ..
United States miUS ... ,...
11,944
1948
11,912
695,887
U. S. stocks--end or month :
1,468,500
7,325,729
This season
51,308
2,848,924
last seuon
49,30<
3,029,912
@FedFRASER