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Monthly Business Review OFT H E Volume 23, No.5 FEDERAl!. RESERVE BANK OF DALLAS ~his, Dallas, Texas, July 1, 1938 copr is released for pubhcabon In afternoon papers- June 30 ====================================================== DISTRICT SUMMARY E The value of construction contracts awarded in the leventh District declined further from April to May, but wr about one·fifth larger than in the corresponding month o 1937. An important factor in the maintenance of consth~cti~n activity was the expansion in residential building, IC~ m May reached the highest level in several years and nstltuted about 4,5 per cent of the total volume of constru~tion in the district. The output of petroleum declined cblslderably following the reduction in production all~w ~ es effected during May, and the daily average productIOn h the first three weeks of June was about 15 per cent lower t an the average for June last year. Refinery operations Were apparently maintained at about the same level as in other recent months. The dollar volume of sales at depart1~nht stores and at wholesale establishments increased s 19 tly from April to May, but continued lower than a year ago. :a BUSINESS ail theRE buyin/?i at. department stores. in prin~ipal cities of th leventh DIstnct was well sustamed dUrIng May_ Alough sales declined somewhat in the first half of the ~Obth,. this decrease was more than offset by the expansion In, USmess in the last half of the month when buying was stImulated by more seasonable temperatures and the inauguration of price reduction sales. Total sales for the month Were 1 per cent larger than in April, but were 5,3 fer cent below those in May, 1937. The decreases in sales rom .a year ago at most of the reporting cities showed compa~atlVely small deviations from the district average, indid~tIn,g that the decline was fairly uniform throughout the thstl'lct. In the first five months of the year sales were about i e ~ame as those in the corresponding period of 1937, but of the lower level of prices it is probable that the VnoIVlew urn f ' , F e 0 goods sold has been larger. ollowing larger than seasonal increases during the three P . ' fiurns d recedin I' g mont h s, stocks of merchandIse at reportmg i ec llled, considerably in May. At the close of the month 5n~entones were 6,6 per cent less than a month earlier, and . Cper cent smaller than on May 31, 1937. u lllectio ns on regular accounts failed to register the S:~:wheasonal increase in May, and they were at a rate on' at below that of a year ago, The rate of payments 8I.In~tallment accounts was also below that in either comatlVe month. Distrib sh d u t'Ion 0 f merchandise through wholesale channe Is P co~~~ considerable irregularity during May. Although in th~ned sal~s of reporting firms were slightly larger than in M P1eced mg month, they were 13 per cent smaller than the ay ast year. The May comparison with a year ago is an most unfavorable reported this year, and compares with slllailerage d~cline of 10 per cent for the five months. The hrou g htPanslOn in combi~ed. sales fro:n April, to. May was hard about by substantIal Increases 111 the dIstnbutlOn of ,vhich are , electrical supplies and machinery and equipment, Vento . mO.re than o.ffset the declines in other lines. Innes m nearly all lines declined during May, and as compared with a year ago the decreases were particularly large for dry goods and electrical supplies. The rate of collections on outstanding accounts showed a further decline. According to figures of Dun and Bradstreet, Incorporated, the number of commercial failures in this district declined from April to May, but liabilities of defaulting firms rose sharply to the highest level since August, 1935. There were 21 insolvencies during the month with an indebtedness of $437,000, which compares with 13 failures in May last year owing $84.,000. FINANCE The reserves of member banks in the Eleventh Federal Reserve District, whiGh had shown a substantial decline between the first of the year and the middle of May, fluctuated within a relatively narrow range during the month ended June 15. During this period reserves averaged approximately $163,800,000; at this level they were about $27000,000 lower than the average during the first half of January and the lowest for any semi-monthly period since the latter part of 1936. Although required reserves have declined by nearly $30,000,000 since the first of the year, the major portion of the reduction resulted from the decrease in reserve requirements which became effective at the middle of April. Other factors contributing to the lower required reserves have been the decrease in member bank deposits and a substantial increase in their balances with other commercial banks. After declining moderately in the first quarter of the year, excess reserves increased substantially and for the past six weeks have averaged close to $50,000,000, or about $3,000,000 higher than in the first half of January. Member bank borrowings from the Federal Reserve Bank of Dallas increased seasonally by about $200,000 between May 15 and June 15, bringing the volume of such discounts to $533,000, which compares with $4<34.,000 at mid-June last year. Industrial advances, representing loans to industry for working capital purposes, declined $65,000 during the period and on June 15 wer~ $460,000 l~wer ~an a year ago. Federal Reserve notes In ~ctual CIrculatIOn amounted to $76,776,000 on June 15, wInch reflects a further seasonal decline of $1,169,000 from that a month earlier and compares with a total of $91,500,000 on June 15, 1937. MEMBER ~ILLIONS OF OOLL.ARS BANK RESERVES ELEVENTH fEDERAL RESERVE DISTRICT MILLIONS Of OOLLAAS 260 250 200 I-I _____~~---+----~~----±-----_r-----1200 50 This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) MONTHLY BUSINESS REVIEW 2 Total loans and investments of weekly reporting member banks in leading cities of the Eleventh District continued dO\\Tnward during the five weeks ended June 15. The loans of these banks declined $8,332,000 during the period, after having shown little fluctuation in the preceding two months. While the decrease extended to virtually all classes of loans, it occurred chiefly in commercial, industrial and agricultural loans. In the corresponding period last year, the demand for funds to finance the expansion in business and industry brought about a substantial increase in this type of loan but this year repayments exceeded the demand for new loans. During the first two weeks in June, these banks increased their investments considerably, with the result that total holdings on June 15 were $5,620,000 higher than on May 11; however, investments were still lower than at the middle of April and were $17,707,000 below those on June 16,1937. All classes of deposits at reporting banks showed in- II WHOLESALE AND RETAIL TRADE STATISTICS r - - --Percentage ohange in: -----.."Ratio May colleotiens Stocks' to accounts outstandNet sales r------~ ingMayl 'May, 19S81 from Jan. 1 to May, 1938, from , . - - - - - - - - . , May, April, May 31, 1938 May, April, lnataU1937 1938 from 1037 10S7 1938 Regular m.nt Retail trade: Department stores: 40.0 13 .9 Total 11th Dist .. - 5.3 - 5.5 - 6.6 .2 1.Q .7 .03 - 5.3 30.6 16 . 2 DaUas . . ... ..... - 5 .0 .6 -3. 1 -6.3 37.2 10 .1 Fort Worth . . .... - 6.4 +12.1 .8 40.5 Hou.ton ....... .. - 3 .5 - 6.7 - 4 .7 - 4.4 3.3 San Antonio ..... - 4.2 .8 - 8.9 -13. 0 ii:s 41.4 2.9 - 13 .0 - 5.4 41.3 Other oities ...... - 7.7 - 3.2 16.1 2.6 Independent stores:t ArizonB ... ...... -25.2 -2.4 Oklahoma ....... -10.7 2.7 New Mexioo ... .. -20.6 .6 Toxas ..... .. .... -12.3 1.4 Wholesale trade:t Maohinory, equipment & supplies -34.7 (exo'pt eleotrloa!) - 20 .7 +47.2 ':':'29:6 .:.:.' 4:i 34:2 I))ry goods ....... -16 .5 - 4.6 -12.3 92.7 - 9 .4 -1.0 - 1.2 Groceries . ....... -11 .9 - 3.5 .1 76 .8 Drugs . . ......... .3 3.3 7 .3 - 6.2 - 12. 1 57.3 Hardwnre ....... -20.0 .9 - 3.7 5.7 -25.6 -12 .7 -16.8 Eleotricnl supplies -22.5 +12.9 90.8 109.2 Tobacoo&prod .. + 6.6 - 2.3 Surgical eqp't. & supplies ....... . + 2.8 - 9.8 + 5.1 + 2.5 44 .0 tCompiled by United States Department of Commerce. 'Stookl at 01 ... of month. + + + + + + + + + + + + + INDEXES OF DEPARTMENT STORE SALES AND STOCKS (1023-25 aTCrago~100) With Beasonal adju.tmenl Without 8OMonal adjuBtmonl r-------------~v~--------------~ Total Elevonth Dist .. DaU ....... ... .. .. .. Fort Worth .. . ..•... . Houaton . . ........... Ban Antonio......... Sale.,-May, 1938 1037 102.5 107.2 107.8 112.4 112 . 2 118.4 103.8 106.3 84. 7 00.4 Stook.-May, 1088 1037 64.8 67.5 65.8 65.5 62.7 64.8 49 .3 48 .7 63.2 62.4 Sales-Mny, 1938 1037 102.6 107.2 104.6 109 .0 112 .2 118.4 103 .8 106 .3 89.8 96.8 Stocks-May, 10S8 1037 65.4 68 . 2 67.1 66.8 63 .3 66.4 50.3 49 .7 62.7 61.8 creases during the five weeks, but most of the gain occurred in adjusted demand and interbank deposits. The funds made available by the increase in deposits and the net d?' cline in loans and investments were utilized to increase thelT reserves with the Federal Reserve Bank and to build up their balances with other domestic banks. In the five weeks these banks redeposited approximately $16,500,000 with other commercial banks, bringing the total increase in such balances since the middle of April to about $45,000,000. AGRIOULTURE The condition of growing crops in the major portion of the Eleventh District has shown some improvement in recent weeks. In the first three weeks of May frequent showers ove much of Texas delayed the seeding of summer crops an resulted in grassy fields in the principal farming areas. Since that time, however, weather conditions have been more favorable and farmers generally have made excellent progress in cleaning fields and with the completion of seeding operations. The moisture deficiency in the western half 0 f d CONDITION STATISTICS OF MEMBEn BANKS IN LEADING CITIES (In thousands of dollar.) June 16, May 11, June 15, 1088 1937 1938 Totnllonns and investments . . " .. . . •.. . . ... . . . . . . . 1477,821 $487,054 $480,.~33 'rotalloans. .. . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . .. . . 222,494 214,020 230,826 Commeroial, industrial and agrioulturalloans. . . . . . 140,784 131,527 147,210 Open market paper.. . . .. . . . . . . . . . . .. .. . . .. . . . .. 1,656 2,542 ~:~~ Loans to brokers nnd dealers in seouritie.. . . . . . . . . . 2,304 2,772 276 Other loans for puroh .. ing or oarrying seourities... . 13,666 14,895 14, neal est.. te loans. . .. . . . . .. .. .. .. . . . .. .. . .. .... . 20,147 20,819 20,021 621 975 1,174 Loan. to banks...... ... . . ..... .. ............•.• All other lonn......... ...... .... ....... ...... .• 43,417 40,400 43,068 United States Govornment direct obligatio"" . .... .. .. 172,080 194,266 170,8~; Obligations fuUy guaranteed by the U. S. Governmeat. 33,023 27,944 29'~70 Other seou~ities ...... ............... ......... , ... 50,224 50,824 ~h80 Reserves WIth Federal Reserve Bank...... . ... .... . . 98,445 112,811 '078 Balances with ~omestio banks............... . . . .... 222,503 156,648 ;~g'237 D.emand doposlts- adJu.tedt. . . ...•............••. 400,862 397,007 130'224 'rll~e deposIts .. .... .. . ........ :.................. 131 ,567 121,748 24742 25,032 12,24 1 180'400 Untted States G~vernment dOPoslts. . . . . . . . . . . . . . • . . Interbank depo.lts. ... . .. . .. . .. . . . . . ... .... .. . .... 189,833 175,416 N no Borrowings from Federal Resorvo Bank . .. .. ....... . None None a b tlnoludes all demand deposits other than intorbank and United States Government, less ell! items reported 118 on hnnd or in proc... of eolleotion. SAVINGS DEPOSITS May 31,1038 Boaumont . . ....•... . .... Dall................... . EI Paso . .. ............. . Fort Worth ........ .. •... Galveston .............. . Houston .........• ... .• .. Port Arthur ..... • ....... San Antonio .......... .. . Shroveport ......... . .• . . Wnco ......... .. ... .... . Wichita Fnlls .. .. ... . . .. . All others . .... . ........ . Total. ..... •. ... CONDITION OF THE FEDERAL RESERVE BANK (In thousands of dollars) June 15, Juno 15, 1938 1937 $192,975 Total onoh resorves .............................. . $196,847 434 638 Disoounts for membor banks ...................... . 828 1,288 Industrinl advances . ... . ...... .... . .......... •. ..• 16 112 Bills bought in tho open market ......•.....• .. .. ..• 97,283 98,634 United States Government seouriti"" .. .... .. .. .. .. .• 98,660 100,458 Total earning IlB8()ts ... . ... ...................... . 166,108 170,389 Member bank reserve deposits . ... ... .. ......... .. . 01,500 76,776 Federal Reserve notes in aotual oiroulation .•••..•..• 302 02 Commitments to make industrial advanoce ...••. . .•. May 15, 1038 1205,630 329 89a 16 97,283 98,521 164,470 77,045 244 GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS (Avorage of daily figure.os-in thousands of dollars) Combined total Rceorvo oity banks Country hanks Gr... demand 1936 .... .. . .... S 926,027 May, 1937 ........... 1,035,133 May, January, 1938 .... . ...... 1,116,242 February, 1938 . . . ..... .. . 1,113,919 MllI"eh, 1938 ........... 1,096,362 tr,ril, 1938 .. ........ . 1,074,855 1938... . . . . . . . . 1,073,302 ay, v Time $194,692 200,293 215,115 216,344 218,188 217,942 210,469 v GrOM domand $529,858 669,613 608,648 605,222 601,364 692,059 699,164 Timo $107,863 109,344 119,174 119,587 121,102 120,806 121,163 GroBS demand $397,069 465,520 507,594 607,697 406,008 482,796 474,138 Time 586,829 90,949 95,941 96,757 97,086 97,046 08,306 ~ Numbor of r Number of reporting savings banks depositors 3 9,520 8 00,386 2 16,091 3 37,800 4 18,281 10 71,787 6,113 2 5 23,478 3 24,442 3 0,206 3 7,154 70 63,9S3 depOSIts $ 3,773,298 26,200,424 8,074,450 13,333,741 11,462,133 28,793,878 2,632,551 17,585,414 11,340,264 4,839,220 3,589,524 20,294,886 373,700 $160,019,783 116 Amount of 8avin~9 Peroentago ohanf,e iu savings doposi~ ___ May 31, 1037 3.3 + 1. 8 3.1 4.9 3.6 + 2.0 0.8 7.3 + 6 _ 5'6 + + + + + + + 6:6 +.4 .1 +.8 +.6 +.7 .5 +.1 +.4 No chg· 1.7 + +5. 1 ~ + 3.4 +.5 DEBITS TO INDIVIDUAL ACCOUNTS (In thousands of dollars) April May Pctg. change May over year 10S8 1037 1038 $ 8,314 - 1.1 S 8,437 Abilene ... .......... .. . . S 8,346 35,070 28,400 - 3.6 20,464 Austin ................. . 23,048 24,320 22,142 - 9.0 Beaumont ........... . .. . 3,071 -12.6 2,017 3,338 Corsicana . . ... . ....... . . 231,231 231,737 8.2 212,808 Dallast .........•....... 26,307 27,636 -10.9 24,527 EI Paso . ............... . 76,054 -16.3 76,434 91,361 Fort Worth ....... . ..... . 26,574 -12.1 25,628 22,448 Galveston ..•.........•.. 201,139 207,708 192,610 - 7.3 Houaton ...... . ......... . 0,547 9,807 9,439 - 3.8 Port Arthur ..•........ . • 3,992 3,956 4,038 Roowoll ................ . 2.1 64,068 71,285 San Antonio ......•...... 66,691 - 6.4 41,510 - 16.8 40,879 48,564 Shreveport. ............ . 6,476 -26.9 8,056 5,889 Texarkana' ............. . 11,077 - 12 .0 11,815 13,566 Tueson .. .. .. ..... .... .. . 13,046 -24.5 14,806 11,182 Tyler ........... . ...... . 12,301 12,768 - 12.0 11,239 Wnco ..... .. ... ....... . . 16,873 14,886 17,648 +18.6 Wiohita Falls ........ . . . . + April 30, 1038 +. 1 $ pctg. ohn ovor JllOn + .4 3. 9 5. 0 8. 0 6. 8 _21. 0 _ _ _ _ + .55 __15. 4. 2 _ 1.1 +t.21 + 4. 5 _1. _ 9.1 _1.4 _14. 3 _ 8. 6 + 4. 6 ...:---:-:- t~i;' Total. .......... $769,452 $847,123 - 0.2 $811,497 'Inoludes the·figures of two b.nks in Texarkana, Arkansas, located in the Eighth ~t8cd ba~o tFigures for Dallas includo debits of fivo additional banks. Data previously publt.b beon revised back througb January, 1987. MONTHLY BUSINESS REVIEW th~ ~exas Panhandle, in portions of west and south Texas, In southern New Mexico and southeastern Arizona has . een only partially relieved by the recent rains and crops In most of these areas are making poor to only fair progress .. .Rain is needed for practically all crops in north LOU1slana. bn of ~~~ sp:ea~ o~ insect. infe~tation . over a considerable ar.ea r IS dIstnct IS caUSIng IncreaSIng concern. CommerCIal eports indicate that boll weevils, leaf worms, and flea hoppel'S are damaging to some extent the cotton crop in a large ~m~er of ~ounties ,in the Gulf Coast section. The grasshopit ~ InfestatIOn covers an extensive area of the district, but tv.[ IS. most serious in the Texas Panhandle and in New h :XlCO; i~ those areas large scale poisoning operations are eIng carned on in an effort to bring the pests under control. 39~~eoestimated production of wheat in Texas on June I was ' ,000 bushels, the same as a month earlier, but prosPects w'th' h th I In teState have changed somewhat. Although the prop has continued to deteriorate in the western half of e co d.a?handle as a result of the inadequate moisture supply, Ihons have improved considerably in the northeastern d al~s counties. Prospects for winter wheat in New Mexico be? Ined further during May, the June I production estimate i:T~3~,.785,000 bushels as compared with 2,829,000 bushels pt TIl ' , The d d'ISt nct s corn crop, although late in many areas, has oa~ ehgenerally satisfactory progress. An excellent crop of lIa s as been produced and harvesting is well advanced. pe ~ crops. are in better than average condition with prosh s partICularly favorable in those sections which have \han abundance of rainfall. since ~hTexas cotton crop has made generally good progress repl .e latter part of May. Although an unusual amount of are abtIng has been necessary this spring, seeding operations Sta ~ out completed except in portions of northwest Texas. n pro s are rep?rted to be fair to good, and chopping has low~eRss.ed rapidly. The crop is nearing maturity in the el 1'0 Grande Valley. l'e~h~ edstimated production of peaches in Texas on June I aIne unchanged at 1,080,000 bushels, but reductions d CASH FARM INCOME FROM SALE OF PRINCIPAL FARM PRODUCTS AND GOVERNMENT BENEFIT PAYMENTS (In thousands of dollars) -------:--April, l038- - - - - v - - Total receipts , RecClPts from: GovernJan. 1 to April 30 , C . " ment April April 1087 Arizona ropS Llvestocko payments 1038 1037 1038 &o\lisiati~ " ' " 5 2,615 $ 2,068 $ 196 $ 4,879 $ 4,547 $ 18,872 $ 14,636 OklelVhMeli~~ ' " a oma . . . Telns ': .. , 4,~0576 2,285 1,533 1,431 5,836 15,601 1,596 745 3,458 7,228 7,836 2,482 11,579 31,020 7,676 2,603 0,730 80,765 28,816 11,221 46,785 110,277 25,704 9,240 41,521 110,377 '" ~ Total - -- --•lnol~ci·'· S~8,873 $26,550 $13,223 558,655 564,330 $214,714 SOURC~:~el?ts from sale of lives took and lives took produots, . ruted St.tes Departmont of Agrioulture, Cattle, . . lialo FORT WORTH LIVESTOCK RECEIPTS (Number) May May Chango over April 1038 1037 year 1938 vllS • " : : • •• •• • , • •• • , • p Sh : :,',',:::::: ::: ::::: : 74,824 26,678 24,447 325,272 106,105 37,832 28,320 312,500 -31,281 - 11,154 - 3,873 +12,772 47,895 21,154 23,211 166,596 COMPARATIVE TOP LIVESTOCK PRICES (DoUal'll por hundrodweight) May May Beef Rteel'll StOcker ... . .... .. . '" .. .. , .... .. . ... . .. ... .. . lIof atcora i,'" ond y,;~rli';g.; .. ... .•... . .•. .. .... . . ..•.. . . Bul S~7/ .•.•.. •. H•.•••·. 1938 $0 .50 7,65 9 ,75 6,25 8 ,25 8 ,60 7 .50 19S7 $11 . 15 7.85 11 .25 8.00 8.60 11,35 11 .00 $220,735 Change over month + 20,929 + 5,524 1,236 +158,676 + April 1938 $9 .60 7,75 9 ,50 6 ,60 8 ,25 8.25 8.35 8 were made in the estimates for Louisiana and Oklahoma. The Texas citrus fruits are making rapid growth and with a continuation of favorable weather the crop is expected to be earlier than usual. Commercial truck crops made fair progress during the month, although harvesting was delayed and some damage resulted from excessive rainfall and wet soil. Range conditions in most sections of Texas are wen. above the average and prospects for summer pasturage continue favorable, However, there are some areas in northwest, west and south Texas where the lack of moisture has retarded the growth of range vegetation and rains are badly needed to insure summer feed. Continued dry weather has damaged ranges considerably in New Mexico and southeastern Arizona and the situation is becoming serious in some parts which have been overstocked. Reflecting the abundant supply of range feed in most sections of Texas, livestock in the State have fattened rapidly and are in better than average condition. Marketings of grass-fat cattle and yearling lambs have been heavier than usual, while shipments to pastures outside the State have been light. Although livestock in New Mexico and southeastern Arizona are still mostly in fair to good condition, they are showing the effects of the continued dry weather. Receipts of sheep at the Fort Worth market were in record volume during May, but total marketings, which include interstate shipments, were smaller than in May last year. Marketings of other classes of livestock at Fort Worth increased more than seasonally during the month, but were less than a year ago. Cattle prices ruled unevenly lower in the latter part of May, but in the subsequent two weeks the market strengthened somewhat. The hog market has evidenced a slightly upward trend recently, wIllIe lamb prices have declined. Cash income from the sale of principal farm products in this district during the first quarter of 1938 was maintained at a level II per cent higher than in the corresponding period of 1937, the principal contributing factors being the sizable marketings of cotton from last year's crop and the heavy sales of livestock and livestock products. In April, however, income from marketings showed a decrease of 6 per cent from a year ago. Although receipts from the sale of crops were II per cent higher, this increase was more than counterbalanced by the smaller income from livestock and livestock products, resulting largely from the reduced marketings of meat animals at lower prices. Government payments to farmers continued smaller than a year ago, the April total being 8 per cent lower than in March a,nd 18 per cent below those in April, 1937. During the first four months of 1938 total farm income, including Government payments, was 3 per cent smaller than in the same period last year. The index of farm prices in the United States, as computed by the Department of Agriculture, declined furth~r during the month ended May IS, 1938. The current figure IS about 30 per cent below that a year ago and the lowest since the middle of 1934. INDUSTRY Residential construction in the Eleventh Federal Reserve District increased sharply in May, continuing the expansion that has been in evidence since the first of the year. The value of awards in May rose to $6,038,000 which was nearly three times the small total reported last December and about 45 per cent above that in May, 1937. The awards during the month represented principally the construction of one family dwellings. Although contracts for all classes of construction showed a further decrease of 16 per cent from the pre- MONTHLY BUSINESS REVIEW 4 ceding month, due chiefly to the smaller awards for public projects, the total was about one· fifth higher than in May last year. During the first five months of the year, the value of contracts awarded was 30 per cent greater than in the comparable period of 1937. Although private construction has shown some expansion, most of the gain has occurred in publicly-financed projects. After increasing considerably i'n the preceding three months, the valuation of building permits issued at fourteen principal cities in this district declined somewhat more than seasonally in May and was 12 per cent smaller than a year ago. The output of crude oil in this district, which had been maintained at a level only slightly under that a year ago during the first four months of 1938, was reduced sharply in May when production allowables were cut in an effort to bring production in closer alignment with demand. The curtailment was more drastic than in other sections of the country and was effected largely in Texas where the two-day shutdown each week was inaugurated. As the shutdown was extended through June, the district's daily average production during the first half of the month was about 10 per cent lower than early in May, and was at a rate about 15 per cent below that in June last year. Drilling activity, as measured by the number of wells completed, increased seasonally during May, but showed a decline of about 9 per cent from the comparable period in 1937. On June 1, there were 7 per cent fewer rigs in operation than a month earlier. Operations at cotton textile mills in the United States during May showed a slight improvement over the restricted VALUE OF CONSTRUCTION CONTRACTS AWARDED (In thou.ands of doll an) May May April January 1 to May 31 1938 19S7 19S8 1938 19S7 Eleventh District-total.. . $ 13,680 S 11,356 S 16,207 $ 68,135 S 52,298 IWsidential............ 0,038 4,152 4,888 22,247 22,257 All other. . . . . .. . . . . . . . 7,642 7,204 11,319 45,888 30,041 United States"-total.. .. . 283,156 244,113 222,016 1,046,600 1,175,869 Residential. . . . . . . .. .. . 83,153 83,937 74,577 313,356 423,320 733,244 752,540 All other. ...... ....... 200,003 160,176 147,439 "37 .tates east of the Rooky Meuntai119. SOURCE: F. W. Dodgo Corporation. Amarillo ... .. .. Austin ......... Beaumont . . .. .. Corpus Christi. . DallllS" ........ EIPlISo ........ Fort Worth ..... Galveston ...... Houston ...... .. Port Arthur .... Ban Antonio .. . . Shreveport ..... Waco .......... Wiohita Falls ... BUILDING PERMITS Percentage .hange Poroontage May, 1988 valuation from Jon. 1 toMay31,1988 ohango , nlualion v No. Valuation v May, 19a7 Apr., 1938 No. Valuation from 1937 47 S 118,083 +169.1 -47.2 166 S 956,822 +179.0 213 372,357 + 15.7 - 11.7 2,597,546 954 + 48.0 141 91,318 + 42.2 + 9.9 657 577,505 + 14.8 183,670 - 48.7 - 46.7 134 753 1,384,664 5.6 1,134,065 + 8.7 - 4.4 3,359 5,095,a96 777 - 9.2 109,127 + .7 -32.2 360 544,257 78 .01 + 1,045 237 346,894 - 38.8 -61.4 2,563,009 - 35.9 93,664 + 48 0 -47.3 815 1,239,227 158 +104.8 461 1,777,745 - 24.4 -28.3 2.121 10,244,020 + 0.2 163 87,120 - 27.0 +15.8 655 775,571 + 58.2 505,780 2.1 +58.8 1,486 1,720,304 366 - 24.7 162 244,626 7.9 -82.4 717 2,800,975 + 81.1 274 441,595 92,823 - 13 .3 -29.7 3.6 50 96,904 +178.3 +84.9 326 285,490 81 +105.3 - - ------ Total ...... 3,068 $5,254,176 - 11.9 -33.9 "Includes Highland Park and Univer.ily Park. - ---- - -6.3- 13,688 $31,226,441 + STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS ,----TexllS---v--United Stntes----.. August 1 to May 31 August 1 to May 31 This SOllSon LlISt BOIlSon This Beason LlISt sanson Cottonseed reeoived at mills 6,471,021 1,681,442 909,718 4,448,375 (t0119) ................... . . 910,411 6,041,681 Cottonseed orushed (tons) ..... 1,550,804 4,384,738 COtto119eed on hand May 31 153,510 9,183 470,915 85,328 (tons) ................... . . Produotion oC products: 1,866,947,207 259,607,550 1,326,379,858 Crudo oil «(lOunds) .. .... ... 457,412,546 426,789 2,698,995 1,975,255 725,083 Cake nnd meal (tons) ....... 1,554,366 240,526 1,1l3,641 Hulls (tons) ............... 406,988 1,398,202 196,468 1,095,615 321,888 Linters ~unn~ bales) ...... Stooks on and ay 31: 30,799,208 427,144 7,472,332 9,127,026 Crude oil (pounds) ......... 281,107 15,485 61,949 83,790 Cake and meal (tons) ....... 172,892 12,604 77,041 39,229 Hulls (tons) ... . .. ...... ... 547,270 121,950 24,56.1 108,286 Linters (running bales) ...... SOURCE: Bureau of CeosUll. activity in April, but the decrease from a year ago was about in line with the average decline for the first five months of 1938. Trade reports indicate that mill sales of cotton goods also increased, particularly around mid-May, and probably resulted in some reduction of mill inventories. Cotton con' sumption during the month totaled 4,25,684, bales, which represents a decline of 36 per cent from the amount used in May last year. Although mill stocks of raw cotton were reo duced 7 per cent further during the month to a level 13 p~r cent below those a year ago, they continued higher than In other recent years. Consumption of cotton by mills in Texas increased 14, per cent between April and May, but was 11 per cent lower than in May last year. The foreign demand for American colton reflected a sharp decline during May, when exports totaled only 193,OO~ bales. This amount was 4,9 per cent smaller than in Apnl and 40 per cent lower than a year ago. Decreases from b~th comparative months occurred in shipments to all countTles which are major importers of American cotton. During the first nine months of the season exports to Great Britain a~d Continental European countries were considerably heav'ler than in the corresponding period of the preceding seaso~, but takings were used in part to build up stocks of Amerl' can cotton which are now considerably higher than a y~ar ago. In recent months textile mill activity in these countrJ~ has slackened perceptibly and prices of American cotton In relation to foreign growths have become much less fa~or' able. In reflection of these conditions, buying of Amenc~n cotton has diminished. Takings by Japan, which had ?ncreased somewhat in April, declined considerably dunng May. Exports to Japan during the ten months of the curre~t season have amounted to only about 4,0 per cent of those the same period of the 1936-1937 season, and stocks 0 American cotton in that country have been reduced to a low level. If CONSUMPTION, STOCKS AND EXPORTS OF COTTON (Bales) April August I to May 31 on May May This sOllSon L!l8t geM 1938 1937 19S8 Consumption at: 108,093 9,356 10,622 11,864 ToxllS mills ........... . 97,334 6,686,64 7 4,863,843 414,392 425,684 669,665 United States mills . • .. . U.S. Stooks-end of month: ....... 1,703,045 1,814,701 In oonsuming estab'mts. 1,685,551 3,583,781 10,485,880 Public stg., compre,",es .. 10,058,430 Exports Crom U. S. to: 1,060,~~~ 1,409,495 42,774 78,540 26,836 United Kingdom . . . . .. . 644, 8 703,079 20,004 !l,661 9,969 Franoo . .............. . 347,I~O 403,772 28,973 25,709 33,806 Italy ....... .. ........ . 508'~3 24,725 25,845 629,670 14,814 Gormany ............. . 82,848 835,742 40,938 616'438 54,363 Other Europo ......... . 1,478'86 123,757 120,996 500,652 31,356 Japan ................ . 331, 4 503,921 39,144 46,075 29,955 All other countries .. ... . 5,086,09 Total export. .. .. 103,002 323,736 377,250 5,226,831 ----3 RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF HOUSTON AND GALVESTON (Bales) August 1 to May ~cn May May April Tb is sellSOIl I"",st se: 6 1938 1937 1938 Recoillts... . . . .. . . .. . .... 31,385 30,064 61,333 3,680,551 2,978880'~~1 Exports. . . . . . . . . . . . . . . . . 126,048 113,034 201,832 2,734,275 2, '". Stocks, end of month. . . . . 1,430,310 657,063 1,527,372 CRUDE OIL PRODUCTION (Darrcls) . daily May, 1938 Inore""e or dooreas e average produoti~ 'rotal Dai~ Avg. Apr., 10S8 May, 1937 Pro uotion Produotion _ 60~ 140,007 12,690 4,343,000 North Texas ................. - 8,28 216,317 - 24,936 6,705,850 West Texas .......... ..... ... _30,7~7 - 90,345 493,413 Enst 'rexM ...... . ....•...... 15,295,800 _14,5 7 217,573 - 14,946 6,744,750 Soutb TexllS ................. _10,65 9,954 6,051,050 195,195 Texas Coastal .. . ............. If PI' Total Toxna ....... Now Mexico ................. North Louisiana .............. -- - -1,262,595 39,140,450 3,054,800 2,458,400 Total district ...... 44,653,650 SOUnCE: Tho Oil Weekly, HOUllton, Toxna. 98,542 79,303 - -152,871 - 13,747 + 2,350 ------1,440,440 -16~,268 --_73,7~~ - 7,7 0 + 15 ~ _81,87 MONTHLY BUSINESS REVIEW JULY I, 1938 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal ROllerve Syatem) ~ "" r- .." 14"'" INDUSTRIAl PRODUCTION f---- I o_ " 0_ " 10 or- - '0 ..6 I V / I I 10 \ \ 'v./ I--~ 40 I 20 j ~ I~ • '- -.... 7 I.35 60 1138 1138 19ST ndex of h . for seaso~arslcal . volume of production, adjusted By Ino th vaJrmtlon, 1928-1925 average=100 n s, anuary, 1984 to May, 1988. FREIGHT-CAR LOAOINGS "'-'lilt "or- 100 '" '(lI t 110 I-I~ .0 .0 70 r- b, tv./' _L /\ "1934 1935 .0 '\ 70 .0 ,a i\y eo I." PRODUCTION In May the Board's seasonally adjuste.d inde,,: of ind_ustrial production was at 76 per cent of the 1923-1925 average as compared WIth 77 In Apnl and an average of 79 in the first quarter of the year. Steel ingot production, which in March and April had been at a rate of 33 per cent of capacity, averaged about 31 per cent in May, and automobile output also showed a decrease. Textile production increased in May. Activity at woolen mills rose sharply and there was some increase at cotton mills, while silk mills showed a decline. Changes in output in most other manufacturing industries were largely seasonal in character. Output of crude petroleum was curtailed sharply in May, and bituminous coal production declined somewhat, while anthracite production increased considerably. Lake shipments of iron ore were in very small volume, reflecting both the low rate of activity in the iron and steel industry and the large supply of ore remaining from the previous season. In the first three weeks of June output of steel and petroleum increased somewhat, hut the rate of activity in these industries remained below the average for May. Automobile production showed a further decline and continued below sales, so that stocks of new cars were further reduced. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a substantial increase in May, reflecting chiefly a marked rise in awards for publiclyfinanced projects. Contracts for residential building increased moderately and were in about the same amount as in May a year ago. Other privately·financed work remained in small volume. EMPLOYMENT I." 1937 Index of tota iusted for I loadings of revenue freight ad::::100. By ::.eas~hnal variabion, 1923-1925 av~rage on s, January, 1984 to May. 1988. " " In ¥ay and the first three weeks of June industrial activity showed little change from tlle Apnl leve~. Wholesale commodity prices generally declined further, but in June wheat and cotton prIces advanced and at the end of the period some other staple commodities showed increases. WHOLESALE PRICES 101----r-----,__~~;=~--,_--~~ Factory employment and payrolls continued to decline from the middle of April to the middle of May. There were further decreases in employment in the machinery, steel, and automobile industries, and a sharp decrease in the number employed in the men's clothing industry. In most other manufacturing linea changes in employment were small in amount. The number employed at mines and on the railroads continued to decline. 'UUIn 110 --J----+----+-----+------l ,~ --I--~iS'::"'~~I7I-::-J.----l .0, r=9:::irzie~~~~q:J;~--\~~~-l .0, ~""r--+---+---.::p.;~---l70 eo DISTRIBUTION Department store sales declined considerably in May and the Board's seasonally adjusted index was at 79 per cent of the 1923-1925 average as compared with 83 in April. Sales at variety stores and by mail·order houses also decreased from April to May. Reports for the first half of June indicate about the usual seasonal decline in department store sales. The volume of railroad freight traflic showed little change in May following sharp declines in previous months. COMMODITY PRICES Ill. 19~ 1938 I.n 1938 '0 indexes COInPiled b Y the United States Bureau of abo r Statistl weeks'en1d9126=JI00. By weeks, 1984 to ng une 18, 1988. ~:","" ",~ER BANK RESERVES AND RELATED ITEMS BANK CREDIT ~ BlWOK! OF DOU.ARI .. rI-----r----t----+~~+=~~ Prices of both agricultural and industrial commodities decreased in the latter part of May. In the first three weeks of June wheat and cotton prices advanced, while prices of industrial products generally continued to decline. I• It Reserves of member banks continued to increase in May and June, largely as the result of Treasury disbursements from its deposits with the Reserve banks. Excess reserves increased chiefly at city banks, reflecting retirement of Treasury bills and further expansion of hankers' balances. Demand deposits at reporting member banks in 101 leading cities increased further during tlIe first half of June, and total loans and inv.estments, which had declin~d i,n May, also increased, reflecting substantial purchases of Umted States Government oblIgations by New York City banks. MONEY RATES 'b 1134 "edneSday fl 1885 I ••• IrUres, January 8, 1984 to June 15 1988. ' Yields on Treasury bonds declined further in the four weeks ending June 18, and those on Treasury notes reached new low levels. Rates on open·market commercial paper declined somewhat about the middle of June.
@FedFRASER