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MONTHLY BUSI N ESS REVIEW of the FEDERAL RESERVE Volume 26, No.5 Dallas, Texas, July I, 1941 BANK o f Dallas ~~~~~~~~~~~~~~~~==========~============~~~==~~~~~~~~~~~~~==~~~~== This CODY is r eleascd for pub· lication in morning p nDcrs- J une 3 0 ~~~~~~============~================================~==========================~~~~==~==== DISTRICT SUMMARY increases of 7.9 per cent in employment and of 17.9 per cent I)'Di~tribution of commodities to consumers in the Eleventh in payrolls were reported, reflecting substantial gains in virtuIStnct showed a further gain in May, and industrial output ally all lines of manufacturing and at trade and service estaband the production of minerals also increased. Employment lishments. According to available data, it appears that the and payrolls continued to expand. National defense contracts number of non-agricultural workers in Texas during May awarded in Texas prior to May 31 were valued at slightly more exceeded the 1940 peak, recorded last December, by about th a? $5 00,000,000, including contracts valued at $173,000,000 2 per cent. whIch were let in May. Department store trade in May and the The number and liabilities of business failures among manulirst half of June was nearly one-fourth greater than a year facturing, trade, construction, and commercial service estabago, and the distribution of merchandise through reporting lishments in this district increased in May to a level somewhat higher than in the corresponding month last year. Dun & BradWholesale firms in this district was 19 per cent higher than in ~ay, 1940. The value of construction contracts awarded dur- street reported 35 insolvencies during the month, with liabili~ng the month was somewhat smaller than the record attained ties totaling $371,000. Thus far this year business failures In A.pril, but nearly double that in May last year. Output of have been 40 per cent more numerous than in the comparable Crude petroleum rose sharply and refinery operations reached period of 1940. AGRICULTURE ? newall-time peak. Consumption of cotton at textile mills In Texas declined in April, but continued at a much higher Heavy rains over wide areas of the Eleventh District during fate than a year ago. Weather conditions were generally un- May and the first half of June delayed further the planting liavorable to crops during the final two weeks of May and the and cultivation of row crops, damaged small grains and hay, rst half of June, but conditions in the livestock industry are and interfered with the harvesting of wheat, oats, and barley. good to excellent throughout the district. The prolonged period of wet weather has also increased the BUSINESS danger of crop damage from rust and insect activity. In fact, Reflecting to a considerable extent the effects of increased a considerable amount of wheat has already fallen due to high purchasing power, resulting mainly from rising employment winds and rust, and the early appearance of boll weevils and and payrolls and higher cash farm income, consumer purchases fleahoppers in cotton fields has caused farmers to begin poisonit retail establishments in this district continued to expand. ing operations much earlier than usual. Despite the unfavorable n May, department store sales rose by more than the average factors that have affected crop development thus far, the outseasonal amount and exceeded the May, 1940 total by 23 per look for agricultural production on the whole remains genJent . A heavy demand continued during the first half of erally good due to the excellent season obtaining in all sections f une, when sales at weekly reporting firms averaged about one- of the district. The prospective production of grain crops is ;urth higher than in the corresponding two weeks of 1940. well above the 1930-1939 average. The Texas cotton crop 6. he aggregate value of department stores' sales during the made f airly good progress during May and early June, though rs~ five months of 1941 was 14 per cent greater than in that washing rains have necessitated considerable replanting. There period a year earlier. According to the United States Depart- is urgent need for dry, sunshiny weather to enable farmers to ment of Commerce, the distribution of merchandise through proceed with planting and cultivation of crops and with grain : a.il outlets in Texas other than department stores during the harvesting. According to the Department of Agriculture, the indicated tlal five months of the current year averaged 18 per cent gr~ater than in that period of 1940, with the most pronounced production of wheat in Texas on June 1 totaled 56,116,000 galU~ being recorded in sales at country general, jewelry, auto- bushels, but the severe damage from excessive rainfall, high mOtive, furniture, and lumber and building materials stores. winds and rust during the first half of June reduced the Inventories of merchandise at reporting department stores estimate to 45,914,000 bushels on June 16. This figure com~ere reduced 6 per cent in May, but at the month-end value pares with a ten-year average yield of 31,360,000 bushels, and a stocks was still 4 per cent higher than a year ago and orders the record crop of 67,983,000 bushels harvested in 1931. The iUtstanding on May 31 were nearly double those on that date Oklahoma wheat crop was also affected adversely by heavy rains aSt year. early in June. Some fields, particularly in the southwestern t Wh?lesale trade, as reported by 74 firms in eight lines of REPORTING MEMBER BANKS IN LEADING CITIES rade In this district, increased moderately from April to May, ~nd sales were nearly one-fifth greater than in the correspond~,ng month of 1940. Sales in most lines of trade participated In dthe gain over May last year, with the distribution of durable 700 i-.J---+----j----t----t-- - - t- --::!V-=----I'oo an . . 6. seml_ d urable goods recording the largest gains. Durmg t he rst five months of 1941 cumulative sales of hardware and ""'1-.J----l----!---'''"""-t----::!-r--''''-'--t----Jbo- - -1 000 ~afhinery were sharply higher than in that period a year r ler, and aggregate sales of all reporting firms averaged ~hOUt.I 5 per cent larger. The dollar value of stocks of merI' at dlse at reporting wholesale firms in this district evidenced ltt t , e change in May, but at the month-end the value of inveno~es was 20 per cent greater than on that date last year. n employment and payrolls in Texas, as reported by the £ur au of Business Research of the University of Texas, rose Urt her from April to May. In comparison with a year ago, '00 !rJ.ili.J..l.1.l...u..u .... "-'-'.l.u.u.LLJ..I..u.w.J..l.1.l-':':'-'c.J.U.J.L.u.,":,-,.J..I.1.I-'-'+'u..,:,:,,,~L.I..U-'-'--':'::-u..l.l.ll,,"",=L.>..U..v,j'oo [ L.EVENTH r f DERAL RU CRVC DI5TRICT b , This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 2 MONTHLY BUSINESS REVIEW portion of the State, are expected to be completely abandoned, Cash income of farmers in this district from crop and liveand the prospective per acre yield has been reduced gene~ally. stock marketings averaged 30 per cent higher in the fi.rst The June 16 estimate of 60,156,000 bushels compares With a quarter of the current year than in the corresponding penod forecast of 71,296,000 bushels on June 1 and a harvest of 56,- of 1940. However, Government benefit payments to farmers 332,000 bushels in 1940. The indicated production of wheat for compliance with the provisions of the Agricultural Adjustin New Mexico is somewhat higher than the 1940 harvest, ment Administration were 18 per cent smaller than in that whereas, in Arizona a much smaller harvest is forecast. The period of 1940, with the result that the total income showed indicated production of oats in Texas was placed at 39,803,000 an average gain of only 15 per cent. bushels on June 1, which compares with a 1940 harvest of FINANCE 37,125,000 bushels. Since much of this crop had been harvested On May 22 the Secretary of the Treasury invited c~sh sub£ prior to the June rains, the weather damage was not ~s severe scriptions in the amount of $600,000,000 to a new Issue 0 as in the case of wheat. The acreage sown to barley m Texas 2 liz per cent Treasury bonds dated June 2. In addition, holders was greatly increased this year, and the production forecast as of the 3 Y4 per cent Treasury bonds maturing on August IJ of June 1 was placed at 9,450,000 bushels, indicating a record 1941, outstanding in the amount of $834,000,000, were off.ere crop. the privilege of exchanging these securities for the new Issue The Texas corn crop has made fairly good progress under of 2 liz per cent Treasury bonds or for the two-year, % pe~ the handicap of a late start and excessive moisture. On June 1 cent, Treasury notes dated March 15, 1941. In the Eleven t the condition of this crop was placed at 67 per cent of normal, District, cash subscriptions to the 2 liz per cent Treasury bond; as compared with an average. o~ 72 per cent .on the corre- amounted to $206,645,000 against which allotments 0 sponding date last year. The mdlcated productIOn of peaches $16,545,000 were made. Exchange subscriptions and allotin Texas was lowered 149,000 bushels in May; nevertheless, if ments in this district aggregated $2,977,000. the June 1 forecast of 2,261,000 bushels is realized it will be Reflecting chiefly purchases of the new issue of 20 'per the largest peach crop since ~9.19.. . cent Treasury bonds, holdings of Government direct obligaAlthough widespread preclpltatlOn m May and early June tions by weekly reporting member banks in this district ro:t was unfavorable to crops, livestock ranges continued to im- $7,700,000 between May 14 and June 11. On the other han, prove throughout the district. Their condition averaged 95 investments in corporate and municipal securities and ~n Gor per cent of normal on June 1, which was near the highest ernment guaranteed obligations were reduced consl~erab Y figure ever reported by the Department of Agriculture. In during the four-week period, with the result that total mves t some areas the feeding quality of range grass has been lowered ments showed a net gain of only $4,500,000. by the prolonged period of wet weather, but good summer Outstanding loans at weekly reporting member banks grazing is virtually assured in most areas. The condition of showed little net change between May 14 and June 11. Comlivestock continued good to excellent during May. Cattle mercial, industrial and agricultural loans declined further by responded to the. favorable range conditions, ~howing substan- $2,000,000, but this contraction was about offset by an e"d tial gains in weight. Althoug~ sheep were m go?d flesh on pansion in "all other" loans, consisting largely of personal ~n June 1, animals were not takmg on flesh a~ rapldly as had instalment loans. The volume of "all other" loans outstandmg been expected earlier, and as a result, marketmgs of grass-fat is now at the highest level of record, exceeding that of a year yearlings were delayed. Sheep shearing, which had been re- ago by $12,600,000. On June 11, total loans and investmentS tarded by unfavorable weather, was nearly completed by June at reporting banks were $79,000,000 greater than a year 15. Shipments of cattle from this district during May cont tinued lighter than a year ago, and while demand for fall ~~~ The total of combined gross demand and time deposits ~ delivery was active, cattlemen have been hesitant to sell due all member banks in this district showed a substantial gam apparently to excellent range conditions and the possibility of during the first five months of the current year, contrary to obtaining higher prices at a later date. the usual trend at that season. During May, daily avelra~e WHOLESALE 'AND RETAIL TRADE STATISTICS deposits were at an all-time peak, exceeding the tota III --====iN.tPerccntage change in: .., Number ;. Nct sales---v--Stocks---., of May, 1041 from Jan. 1 to May, 1041 from reportiDg May, April, May 31,1041 May, April, firms 1040 1041 from 1040 1040 1041 45 +23 +10 +14 + 4 - 6 7 +10 + 7 +11 + 5 - 3 4 +18 +11 +14 - 1 _ 4 7 +22 + 0 +13 - t - 4 5 +38 +22 +24 + 0 -21 3 +17 +12 +11 20 +27 + 8 +16 Retail trade: Dcpartment stores: Total 11th Dist .. .. Da II as............ Fort Worth ....... . Houston............ San Antonio. . . .. . . Shrevcport........ Other cities........ Indepondent stores:· ArizoDa, . . . . ... .. . . . 256 +23 +10 +12 +16 Now Mexioo .... \... 166 +17 +12 Oklahoma. . . . . . . . . 560 Texna , . . . . . . . . ... .. 1,028 +28 +10 Wholesale trade:· Machinery, cqpt. &: Bupplies............ 6 +47 - 5 +35 +15 +16 Automotive supplies. 6 +25 - 7 +' '8' . Drugs (excl. liquors). 5 +15 + 6 +7 -3 +44 +20 +ii Eleotrioal supplies... 4 +24 Groceries... ...... .. .. 31 +11 + 1 +24 Hardware . .. . ... ... 13 +28 + 5 +26 -1 Surgical equipment.. 4 +37 + 6 _ 1 5 - 4 - 4 Tobaooo &: produots . ·Compiled hy UDited States Bureau or CeDsus. tCh.nge less than one-half of ODO per oont. ·:.::3 +~ .:..:.' t INDEXES OF DEPARTMENT STORE SALES AND STOCKS (1923-1926 avorage=100) May April Maroh 1941 1041 1941 Sales (daily average): . 125 p 117 112 Without seasonal adJustment .•..... , 118 118 125 p With scnsonaladjustmcnt ....•..... , Stocks (end of month): 77 74 72 P Without seasonal adJustmeDt .....•. , 74 72 72 p With sca.onal adjustment ..... ........ , p-Preliminary. May 1040 105 105 69 68 CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS AND GOVERNMENT BENEFIT PAYMENTS (ID thousands of dollars) ".---- March, 1041-----.. _____ &ceipts from: Govern- r~----'Total receipt. M 31 , - - - - - - - - . . , ment March Maroh Jan. 1 to a ' 40 Crops Livestock· payments 1941 1040 1041 1O 8 Arizona . . . " . . Louisiana ..... . New Mexico .. , Oklahoma, ... . Texas .. .... . . . 3,642 3,332 495 2,988 12,737 3,315 3,009 1,615 8,810 15,670 124 1,984 381 3,488 7,292 7,081 8,325 2,401 15,286 35,699 5,225 8,418 2,537 12,195 25,663 18,254 24,059 9,322 46,047 114,468 Tolnl. .. . . 23,104 32,419 13,209 08,882 54 ,038 213,050 ·Includes receipts from the salo of livestock and livestock produots. SOURCE: UOItcd States DopartmeDt of Agricultur•. ~N~5 9'217 40'320 09'812 ~ 185,242 . _____ LIVESTOCK RECEIPT8-(Numher) r - - F o r t Worth--v---- San AntoDIO A ril ' May May April May M.y 1841 1041 1040 1941 1941 1040 83 Cattie" . .... " • . . " .. ". 47,419 44,669 37,153 22,952 16,795 IH41 Calves, ...... ,. ...... .. . 21,810 26046 18,844 16,706 21,074 12'265 Hogs .... .......... " " .. , 40,302 38:084 49,040 12,216 8,422 8'172 Sheep.,., ... , . , .,.,., ... 250,243 315,716 87,710 12,540 6,427 ' COMPARATIVE TOP LIVESTOCK PRICES (Dollars por hundredweight) . _____ r - - F o r t Worth--v---- San ADtOOlO April May May April May May 1041 1041 1040 1941 1041 1040 25 Beef sleors ....... ... .. .. . $10.75 $10,25 $11.00 $ 0.50 $ 0.00 $10." Stooker steers ... , ....... . 11.00 9.50 1\ ,25 ' 10 '6 ' ','2 ' ' 1'0','00 ' 'io'OO Heifers and yearlings .. , . . 10 .85 1\,00 1\,35 7'50 Butoher oows .. . . , .... .. . 8,10 7,00 8,00 7,50 6.50 50 Calves .......•. .... ... .. 10.50 10 ,25 11.50 1\ .00 0,50 8 50 Hogs, .... . ..... ........ . 0,25 6.20 8.75 9.25 5 .55 8'25 Lambs ............. ..•.. 10.75 0.85 11.35 8.50 7.00 . 10: l MONTHLY BUSINESS REVIEW December last year by $79,000,000 and that in the corresponding month of 1940 by $2 09,000,000. After reaching a newall-time peak at $2 60,000,000 on May 16, member bank reserves maintained at the Federal Reserve Bank of Dallas followed a noticeable downward trend during the remainder of that month and in the early days of June. Between June 4 and 15, member bank reserves rose by about $14,000,000, and although daily average balances during the first half of the month were $4,200,000 smaller than in May, they were $2 5,000,000 greater than the average reserve balances in June las t year. Excess reserves of member banks in this district, which had averaged about $95,000,000 during the first half of May, declined considerably in the subsequent thirty days to a level near the low recorded for any semilllonthly period thus far this year. Federal Reserve notes of this bank in actual circulation reached a new peak at $105,700,000 on June 4, and although a moderate decline occurred in the following ten days Federal Reserve note circulation on June 15 was $2,700,000 larger than a month earlier and $24,500,000 greater than a year ago. INDUSTRY Construction contracts awarded in this district during May alllounted to $29,639,000, which was considerably smaller than the record attained in April, but substantially above the tOtal for any other month this year. The large May total reflected heavy awards for residential, commercial and manufacturing building, and engineering projects, a substantial proportion of which was for direct or indirect use in the defense program. The aggregate value of construction contracts let during the initial five months of 1941 was about 75 per cent greater than in the corresponding period of 1940, with all of the principal types of construction work contributing to the gain. The expanded rate of building activity in this district has resulted in a heavy and sustained demand for building materials. Production and shipments of cement at Texas mills dUring the initial four months of 1941 were at an all-time peak. Although shipments of lumber have fallen off somewhat from the high level attained last fall as a result of heavy Governmental purchases for the construction of army camps, they have been maintained at the approximate level of lumber production, which has been sustained at the advanced rate established during the final half of 1940. Significant developments affecting the petroleum industry during May included substantial increases in production and refinery operations, further advances in prices of crude oil and refined products, and the appointment of a Petroleum Coordinator for National Defense. The Coordinator is charged with the duty of fostering (1 ) economic development, production and utilization of petroleum reserves, (2) the development of new and the effective use of existing transportation and storage facilities, (3) the balancing of refining operations to s~Cure the maximum yields of specific products with full cons~deration for requirements, and (4) economic drilling opera~Ions. The immediate problem facing the petroleum industry IS a shortage in transportation facilities for the movement of petroleum and its products from the Gulf Coast to the Atlantic seaboard, rather than the industry's ability to produce the necessary amounts of crude oil and refined products. The d.eficiency in transportation facilities resulted from the diversion from intercoastal service of 50 ocean-going oil tankers, Which represented about one-fifth of the industry's coastal transport facilities. Although the tanker shortage may cause a temporary accumulation of the above-ground stocks of petroleum in the Southwest and a temporary deficiency in the SUpply of petroleum and petroleum products on the Atlantic Coast, means of relieving the situation are under consideration. ~uggested remedies include the construction of additional pipe Ines from the Southwest to the Atlantic seaboard and a more 3 efficient use of eXlstmg facilities, including pipelines, railroads, river barges, and the remaining oil tankers operating throughout the western hemisphere. During May d ~ily average petroleum output in this district and elsewhere in the United States expanded sharply, but remained at slightly lower levels t han in the corresponding month of 1940. Notwithstanding the increased production, CONDITION OF T HE FEDERAL RESERVE BANK (In thousands of dollnrs) June 15, June 15, 1941 1940 Total cash reserves ............-. ". ".............. ... 5345,495 $241,363 Disoounts for member banks ....... ...... .. ........ 74 316 Other bills discounted.. ............. ............ ... None Nono Industrial ndvances.. . ... .. .. .. ....... .... ........ 276 473 United Stntes Government securities... .. .. . .. .. ...• 88,046 95,281 Total earning assets .. . . .. ... . . ........ ......... . 88,396 96,070 Member bonk reserve deposits. . ... ..... ......... ... 249,222 224,0 17 Federal Reserve notes in actual oiroulation. . . . ... . . . 103,763 79,244 May 15, 1941 $341,530 43 None 277 88,046 88.366 259,407 101,066 M CONDITION STATISTICS OF MEMBER BANKS I N LEADING CITIES (In thousands of dollars) May 14, June 11, June 12, 1041 1040 104 1 $508,404 Total loan. and investments . . .. .. .. ...... .. .... .. .. 8602,209 $523, IR3 315,223 Total loans ...... .... . .. . ......... . ............. , 314,466 266,608 Commeroial, industrial and agricultural loans. . . . . . 211 ,123 174,077 213.156 2,410 2,453 1,638 Open market paper...... .......... . .... ........ 3,050 Loan. to brokers and dealers in seourities.... . ..... 2,888 3,018 Other loans ror purohasing or carrying securities.. .. 1t,83 1 13,320 11.805 23,486 Real estato loans . . .. . . .. .. ... .. . . .. .. . . . . ... ... 23,116 22,089 458 Lonn. to banks..... .. .. ... . ... .. . . .. .. .. .. .. .. . 462 778 60,840 All other loans. . .. .. .. . . . .. .. . . . . .. .. .. .. .. .. .. 62,593 40,969 178,330 United State. Governme nt direct obligations. . . .... . . 186,008 151,510 43,401 Obligations rully guaranteed by United States Govt.. 42,3Q3 47,120 61,540 Other securities . . .. . . .. .. . . . . . . . . . .. .. .. .. .. .. .... 59,342 57,846 162,298 Reserves with Federal Reservo Bank. ......... . .. .. 153,040 149,082 3 10,102 Balan ces with domestic banks.... . ..... . ........... 315,8 14 207,147 501,343 Domand deposits-adjustedo. ...... . .............. 550,644 401,372 136,~04 Time d~po.., ts ... . ....... ............. ............ 135,853 137,212 United States Government deposits.............. . .. 35,574 31,398 28,783 Interbank doposits.. ... . . . . . . .. .. .. ..... .......... 288,800 250,340 29~~~~ Borrowings from Federal Reserve Bank. . . ........ . . None None °Inoludes all demand deposits other than interbank and United States Government, les8 cash items reported as on band or in the process of oolleotioD. DEBITS TO I NDIVIDUAL ACCOUNTS (In tbo"sandR or dollnrs) Potg.ehango April May May 1041 1940 over year 1011 Abilene ..... .............. $ 13,060 $ 8,467 +54 12,608 Austin ......... .. ...... . 38,832 38,520 + 1 37,947 Bea umont .. ........ ..... 31,627 24,630 +28 30, 160 Corsienna ........... ...,. 3,694 3,213 + 15 3,811 310,750 259,083 +23 311,555 Dallas .. .. .. ... ........... ... EI Paso . .. .. .. . ..... . .. .. . 41,346 29,435 +40 aO, 165 Fort Worth............... 90,813 87,556 + 14 02,441 31,010 25,890 +20 20,277 Galveston.. .. .. .... .. .. .. Houston......... ... .. .... 307,096 250,270 +~3 274,955 Port Arthur .............. 11,173 0,506 +18 10,205 Roswell .. .... .......... ... 4,877 4,401 + ll 5,217 San Antonio.............. 98,608 80,411 +23 83,096 Shreveport........ . ..... 54,041 48,412 + 12 50,757 Texnrknnao.......... .... 8,922 7,164 +25 9,834 Tucson .. . ..... ...... ..... ,. 16,250 14,282 +14 15,600 T yler ...... ..".... ...... 12,633 11,683 + 8 12,468 Waco.................... 16,074 13,507 + 10 15,267 Wichita Falls.. . ...... .... 19,180 18,373 + 4 18,080 Potg.ehange over month + 3 + 2 + 5 - 3 + 3 + 6 + 8 + 6 + 12 + 9 - 7 + 18 + 6 - 0 + 4 + 1 + 5 + 6 $034,8 12 +21 $1,053,541 + 7 Total. .. .... .. .. . $1,1 28,085 °Inoludes figures of two banks in Texarkana, Arkansa.q , located in th o Eighth Distriot. GROSS DEMA ND AND TIME DEPOSITS OF MEMBER BANKS (Average of daily figures-in thousand. of dollars) Combined total Reserve oity banks Country banks Gross demand May, 1030 .... ....... $1,182,997 May, 1040 .... . ...... 1,346,733 January, 104 1. .......... 1,495,852 February, 1041 . . ... . • . ... 1,533,864 March, 1041. .... .... . . 1,520,028 1941. .......... 1,541,825 tf,ril, ay, 1041 .. . . . ...... 1,545,384 Timo $23 1,070 234,567 239,504 241,401 244.006 243,042 245,367 Gro88 demand S680,641 784,003 856,234 876, 181 870,948 80 1,686 001,377 SAVINGS DEPOSITS May 31,1041 Beaumont . ...... . .... ........ Dallas ... . ..... ... ...... EI Paso . . ... ...... . ...... Fort Worth ............... Galveston ............ . .. . Houston ..... ............. Port Arthur . .... . ........ Snn Antonio ............ ,. Shreveport ..... , ...•.... Wnoo .... . . . ....... .... . Wichita Falls ... . . . .... ... All others ... ....... ....... Total ." _ ...... Number of reporting banks a 8 2 3 4 10 2 Number of BUvings Amount of: S8v in(t8 3 3 3 60 deposi tors 10,350 01,998 20,011 34,064 18,887 78,140 5,974 23,303 25,420 8,067 7,124 62,640 deposits $ 4,227,162 26,808,368 8,361,670 13,1 52,86 1 11 ,871,202 32,606,285 3,200,188 17,032,385 12, 137,880 4,492,077 3,515,436 30,409,550 115 386,977 $168,814,073 5 Gross demand $502,356 562,730 630,618 657,683 640,080 650,1 39 644,007 Time $128,408 129,060 133, 109 134,206 136,080 135,990 135,607 Timo $102,581 105.507 106,a95 107,285 10i,9 17 107,052 100,670 Percentage ohnn~o In savings deposits rom May 31, 1040 + 6.4 + 1.5 + 3.0 +1.1 .7 3.0 1.0 + .6 - 1.4 - 2.0 - 4. 7 .0 April 30, 1041 - 1.8 .2 - 1.4 .2 - 1.7 .1 - 1.5 .6 - 1.1 .6 - 1. 8 .0 .9 .7 :j: - + - MONTHLY BUSINESS REVIEW 4 above-ground stocks of crude oil in the nation as a whole Cotton mill activity in the United States continued in May declined by about 4,000,000 barrels in May, whereas, petroleum at the advanced rate established in April, and on a seasonally inventories in the Eleventh District increased further by adjusted basis the volume of cotton consumed recorded a neW' nearly 2,000,000 barrels, reflecting in part the curtailment high for the third consecutive month. During May, cotton in shipments of crude oil from this area to the Atlantic sea- consumption amounted to 919,000 bales, which closely ~p board. In recognition of the tightening transportation situa- proxima ted the record attained in April and compare~ W'lt~ tion, the Texas Railroad Commission lowered the June crude 642,000 bales utilized in May last year. Forward buymg 0 oil production allowable for Texas by nearly 16,000 barrels cotton fabrics continued brisk due apparently to the str?n~ daily in an effort to bring about a better alignment between consumer demand and advancing prices. On June 7 the UllIt~ production and consumption. The utilization of crude oil by States Bureau of Labor Statistics' index of prices of all textile refiners in this district, as well as in the United States, rose products, including cotton, wool, silk and rayon, was at ~he to a new peak in May, the rate exceeding that of a year ago highest level recorded since early in 193 o. The Office of price by about 5 per cent. Inventories of gasoline and industrial Administration and Civilian Supply placed a ceiling on combed fuel oil continued to decline as a result of the heavy domestic cotton yarn prices on May 26 at a level somewhat below rec~nt demand for these products. quotations, and following this action the commercial buyuhg The rate of drilling activity in the United States declined of cotton yarns showed some abatement. Mill margins, or t e moderately from April to May, but operations in the Eleventh difference between the price of a pound of cotton and its cloth District rose 4 per cent to the highest level in nearly a year. equivalent, continued to advance in May, establishing a neW' In comparison with May last year the number of wells com- high for the 16-year period for which data are available .. Inci pleted in both this district and the nation averaged about 9 ventories of raw cotton at consuming establishments decline per cent fewer. slightly in May, but remained at a much higher level than a Prices of crude oil and refined products continued to advance year ago. in May. Quotations for crude petroleum were increased from Spot cotton prices showed a further pronounced incre~se 7 to 10 cents per barrel throughout the Mid-Continent, Illi- between the middle of May and the middle of June. The price nois, Michigan, and Rocky Mountain regions, and in Pennsyl- of cotton, middling, 15/16-inch staple, at ten spot market; vania an increase of 15 cents per barrel was posted. Crude oil averaged 13.75 cents per pound on June 15, as agai~st. 12'~f prices now average from 10 to 15 per cent higher than at the cents a month earlier and 10.06 cents at the begmlllng beginning of 1941. Prices of virtually all the principal refined 1941. The recent enactment of legislation providing for products, including gasoline, kerosene, fuel oils and lubricants, ernment loans on cotton, corn, wheat, rice and tobacco at ~ shared in the rising markets during May; in the final week of per cent of parity prices was an important factor in t e the month the advance in prices of petroleum products was advance of cotton prices. 11 especially pronounced, averaging about 5 per cent. Exports of cotton from the United States continued sm~ in May, totaling only 71,500 bales as against 226,500 bales !n VALUE OF CONSTRUCTION CONTRACTS AWARDED (In thousands of doll.rs) May last year. During the first ten months of the curren~ May M.y April J.nuary 1 to May 81 1941 1940 1941 season, for~ign shipments of American co~ton av~raged 1~; 1941 1940 Eloventh Distriot.-tot.l.. . 29,639 15,347 45,234 r 140,996 81,898 than one-sixth the total in the correspondmg period of t Rosidontial. . . . . . .. . . . . 9,522 6,094 12,240 r 45,691 30,483 All other...... ........ 20,117 9,253 32,994r preceding season. 95,805 50,910 GO"; United Stntes·-tot.l.. .. . 548,700 828,914 406,675 Residenti.l. . . .. .. . .. .. 201,274 145,912 106,462 All other. . . .... . . . .. .. 847,426 183,002 240,213 '37 st.tes east of the Rooky Mountnins. r-Rovisod. SOURCE: F. W. Dodge Corporation. 2,010,856 743,860 1,267,496 1,298,361 555,298 743,063 BmLDING PERMITS Peroentage oh.ngo Pereent.ge v.luation from J.n. 1 to M.y 31, 1941 ohnn~e "\ valuat10D V.lu.tion v M• y,1940 Apr.,1941 v No. V.luation from 1940 172,850 +848 +141 258 S 080,808 +172 318,948 - 18 + 8 856 1,160,880 463,048 - 54 - 7 925 2,562,845 - 8 130,087 - 8 - 40 627 934,173 + 56 1,971,807 +768 -+ 3t 1,164 7,537,613 + 96 1,528,690 + 24 4 8,813 5,759,442 + 4 186,431 - 25 - 80 666 1,168,961 4 525,972 + 18 + 9 1,402 2,432,753 13 1,873,689 +. +449 1,059 3,014,629 +224 1,536,235 4 + 11 2,300 8,624,944 - 17 156,205 + 47 + 65 536 510,305 - 1 421,189 - 20 6 2,624 2,809,090 + 4 342,369 - 36 + 43 603 1,476,283 - 30 202,010 + 68 - 85 343 2,102,561 +259 157,021 +148 8 288 670,570 + 38 May, 1941 r Ahilono ... .." .. Am.rillo ........ Austin ........ ... Bo.umont ....... . Corpus Ohri,ti. . D.llas ..... . .. . EI P.so .......... . Fort Worth ..... . G.lveston ........ Houston ........ . Port Arthur .. . . San Antonio ... . Shroveport .. . . . Waco ......... . Wiohita Falls .. . No. 47 75 162 124 218 847 150 332 275 511 134 556 118 55 71 Totnl. .. '. 8,675 9,992,547 'Inorease ovor 1,000 per oent. t t + 47 + 11 17,024 541,407,863 + 14 fCh.ngo less th.n onc-h.lf of ono per oont STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS - - - T o x . s - - - v - - U n i t c d St.tcs--..,. August 1 to May 31 August 1 to M.y 31 This season L.st season This season Last senson Cottonsoed received nt mills 1,077,161 908,852 (tons) ... .. ............... . 4,428,558 4,028,787 1,057,861 941,683 Cottonseed orushed (tons) ... . . 4,198,791 4,052,685 Cottonseed on hand May 31 35,047 17,287 268,609 (tons) ... . ...... .. ... . ... .. 96,728 Produotion of produots: 275,635,095 1,356,196,561 1,291,722,061 Cnldo oil (pounds) .....•.... 324,737,253 495,077 453,765 1,865,305 C.ko and meal (tons) .... . . . 1,836,486 268,954 242,811 1,056,312 Hulls (tons) ..... ........ .. 1,020,163 262,796 220,727 1,146,951 Linters (ruDning bales) . . ... . 1,046,190 Stooks on hand May 31: 12,645,039 34,940,764 Crudo oil (pounds) ..... ... . 12,082,370 35,692,315 49,662 31,980 255,028 Cake and meal (tons) ...... . 129,173 76,717 11,549 195,892 Hulls (tons) . .. .......... .. 46,048 52,253 66,608 225,742 Linters (running bales) ..... . 245,034 SOURCE: Buroau of Cen8U~ CRUDE OIL PRODUCTION-(Bnrrols) . dailY May, 1041 Inoroase or doore,,!,e lie III .verago productIOn r~ Dailyavg. Total M.y, 1940 April, 19~1 produotion produotion _ 3,423 314 North Texas .. .............. . 5,510,850 177,760 _ 6,138 +22,189 West Tex .................... . 8,718,800 281,252 - 17,588 +16,293 Ea,! Tox.s .. ... ............ . 13,800,900 445,190 -31,446 +11,865 South Telas ..... . ........ .. . 6,396,900 206,352 TOlas Coastnl.. ..... . . . ...... . 8,484,800 +30,269 ~ 272,090 +70,191 -28,326 Total Texas .....•. 42,862,250 1,382,653 + 2,769 New Moxieo ......... . . . . .... . + 4,772 3,459,950 111,611 + 1,969 North Louiai.n ... ........... . + 2,620 2,251,900 72,642 Tot.1 Distriot ... " . 48,574,100 1,566,906 -20,984 SOUROE: Estim.ted from Amorionn Potroloum Institute weekly reports. CRUDE OIL PRICES-(40 gravity Bnd Rhove) May 31, 1941 M.y 31,1940 North Bnd West Central Tex.s ... . . . .. . $1.18 $1 .03 E •• t Centr.1 Toxas................... 1.27 1.12 Tex.s Gulf Coast.. .. . . . . . . . . . . . . . . .. . 1 .48 1. 28 West TexBs-New Moxieo.. .. ......... 1.12 .05 North Louisi.nn .............. .. ...... 1.20 1.05 1. 25 1.10 Enst Texas (flat price) . .. .. .. .. .. .. .. . SOURCE: The Oil Weekly, Houston, Texas. - +74,920 April 80, 1941 $1.08 1.17 1.38 1.02 1.10 1.15 RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF HOUSTON AND GALVESTON-(Balcs) M 31 Y ason May May April August 1 to n L.s ~ 7~1 1941 1940 1941 This sc.so Reoeipts...... .. .. .. .. .. . 158,078 92,585 111,064 1,948,2~g N~0:i11 Exports................. 93,177 136,656 79,267 963,5 ' ..... Stooks, ond of month.... . 1,872,581 1,327,414 1,882,269 t CONSUMPTION, STOCKS, AND EXPORTS OF (;OTTON-(Balcs)M 31 Mny May April ~ugust 1 toLast~.,on Consumption at: 1941 1940 1941 ThiS season 6059 Toxas mills............ 17,813 12,309 23,491 192 ,3 84 6 ~~5:685 4 United Stntes mill.. .... 918,902 641,636 920,143 7,91, 140 ' U.S.• tooks-ond of month: .... In oonsuming utah·mts. 1,927,939 1,314,792 1,938,507 .. •. . Publiestg. &: oompresses. 11,358,417 10,091,517 12,374,839 5.'9'21,481 Exports from U. 71,539 226,469 74,000 975,540 ret mc *1 n t hc. Interest 0f ' . nntlon3 l :md hemisphere defense, the Departme nt of Com una" f des h.s dwded to ce.se publishing det.iled st.tlstics concerning the country 0 tlon of cotton exports. S.· .... .. MONTHLY BUSINESS REVIEW JULY 1, 1941 NATIONAL SUMMARY OF BUSINESS CONDITIONS -.. 160 (Oompiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION nlTIoI,INOD Pawn TOT; V \ / 100 ..-~, URABLE l~MANUFACTURE$ to I 40 / I 20 I 00 / rJi'" 60 40 "'" I 60 •1 140 120 eo a toni. 80 NONDURABLE MA~~'!.~E..s.. 7 J;--t....!---ifT' 60 40 ---/~NEAALS 20 I I 193' 1936 1937 1938 1939 o 1940 1 1 94 F~deral Reserve index of physical volume of produc· tlon, adjusted for seasonal variation. 1935·39 average ::::: 100. Subgroups shown arc expressed in terms of Points in the total index. By months, January, 1935 to May, 1941. WHOLESALE PRICES :10"" "LIIClN"r 110 100 100 90 90 eo 90 to 70 eo 60 eo .0 19~ 1936 1937 1938 1939 1940 1 941 = ~ureau of Labor Statistics' indexes, 1926 100. Other" includes commodities other than farm prod· Ucts and foods. By weeks, January 5, 1935 to week ending June 14, 1941. DEPARTMENT STORE SALES AND STOCKS tot. C , h H' 120 110 110 r 100 /,~ .ALES 60 .V " / v--"'\ IV / IV' 1--- --'-/T-./' 100 ]V 90 80 8lllCKS 60 I .'V" r 70 60 '0 ~o 193' 1 936 1937 1938 1939 1940 1941 l'c~cral Reserve index of value of sales and stocks, adjusted for seasonal variation, 1923·25 average 100. By months, January, 1935 to May, 1941. = MONEY RATES IN NEW YORK CITY After a slight decline in April industrial activity increased sharply in May and the first half of June. Wholesale commodity prices showed a f urther considerable advance and retail prices also increased • Distribution of commodities to consumers was maintained in large volume. PRODUCTION Volume of industrial output increased sharply in May, following a decline in April, and the Board's seasonally adjusted index rose to 149 per cent of the 1935-1939 average, as compared with 140 in April and 143 in March. The decline in April had reflected mainly reduced output of bituminous coal and automobiles occasioned by shutdowns accompanying industrial disputes. These were settled during the month and in May and the first half of June output in these industries rose to the high levels prevailing earlier. In a nwnber of other lines activity increased steadily throughout the spring months, particularly in the machinery, aircraft, and shipbuilding industries. Steel production was maintained at 99 per cent of capacity, except for a short period during late April and early May when output was reduced somewhat owing to a shortage of coal. Output of nonferrous metals also continued near cap:u:ity; deliveries of foreign copper in May increased to 49,000 tons, amounting to about one-third of total deliveries to domestic consumers. Toward the end of the month, as it became apparent that combined military and civilian need for these metals would soon greatly exceed available supplies, a General Preference Order covering all iron and steel products was issued by the Priorities Division of the Office of Production Management and in June mandatory priority controls were established for copper and zinc. Textile production rose further in May, reflecting increased activity at cotton, wool, and rayon mills. A continued rise in output of manufactured food products was likewise reported and activity in the chemical and shoe industries was maintained at earlier high levels, although usually there is a considerable decline at this season. Petrolewn production increased, and output of anthracite also advanced following some curtailment in April. Iron ore shipments amounted to 11,000,000 tons in May, a new record level and near the shipping capacity of the present Lake fleet. Value of construction contract awards rose sharply in May, reflecting increases in both public and private construction, according to F. W. Dodge reports. Awards for private residential and nonre..idential building increased more than seasonally, and contracts for defense projects continued in large volume. DISTRmUTION Distribution of commodities to consumers was sustained at a high level in May. Department store sales showed a further rise, while sales at variety stores declined by slightly more than the usual seasonal amount. Retail sales of new automobiles continued at the high April level and sales of used cars rose further. Freight-car loadings increased sharply in May, reflecting a marked rise in coal shipments and a further expansion in loadings of rniscellaneow freight. In the first half of June total loadings were maintained at the advanced level of other recent weeks. COMMODITY PRICES Wholesale prices of a number of agricultural and industrial commodities showed further increases from the middle of May to the middle of June and the general index of the Bureau of Labor Statistics advanced two points to 87 per cent of the 1926 average. Federal action to limit price increases was extended to some consumer goods, principally new automobiles, hides, and certain cotton yarns. In retail markets prices of most groups of commodities have advanced, reflecting in part increases in wholesale prices earlier this year. BANK CREDIT Commercial loans at reporting banks in 101 cities continued to rise during the four weeks ending June 11. Bank holdings of United States Government securities increased further, chiefly through the purchase of bills by New York City banks and of bonds by banks in other leading cities. As a result of the expansion in loans and investments bank deposits continued to increase. UNITED STATES GOVERNMENT SECURITY PRICES 193& 1 936 1937 1 936 1 939 1 940 1941 \'(;cekly averages of daily yields of 3·to·5·year tax ~~elllPt Treasury notes, Treasury bonds callable after l' years, and average discount on new issues of re.sury bills offered within week. For weeks ending January 5, 1935 to June 14, 1941. Following a rise in the latter part of May Treasury bond prices declined slightly in the first half of June. On June 14 the 1960-65 bonds were % of a point below the all-time peak in prices of December 10. Yields on both taxable and tax-exempt 3- to 5-year notes declined slightly from the middle of May to the middle of June.
