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MO T
o f

the

Volume 27, No.5

---

BUSt

ESS REVIEW

FEDERAL RESERVE BAN K o f Dallas
Dallas, Texas, July 1, 1942

This COpy is released for pub·
licatlon In morning papers-

July 1

DISTRICT SUMMARY
declined by less than the average seasonaI amount from April
. Trade and industrial activity in the Eleventh District dur- to May, with the result that this bank's adjusted index of
Ing May reflected the effects of various Governmental measures stocks continued to increase, reaching 105 per cent of the
which are designed to accelerate the national war effort and to 1923-1925 average, as against 72 per cent a year ago.
restrict non-essentiaI consumer buying in order to limit the
The distribution of merchandise through 75 firms in seven
upward trend in the cost of living. On a seasonally adjusted lines of wholesale trade in this district declined by more than
basis, sales at reporting department stores were at the lowest the usual seasonal amount in May, and sales averaged only 5
level of the current year and were moderately lower than for per cent higher than in the corresponding month of 1941. The
May last year, the first year-to-year decline since June, 1940. latter gain compares with an average year-to-year increase of
The value of sales at reporting wholesale firms in this district 20 per cent during the initial four months of 1942. Inventories
declined about 10 per cent from April to May and was only 5 at reporting wholesale firms were reduced further by about 6
per cent higher than a year earlier, despite the higher level. of per cent during May, but the value of merchandise on hand at
wholesale prices. Publicly-financed construction, most of which the end of May was still 8 per cent higher than a year earlier.
Was for military and naval purposes, increased sharply in May,
The upward trend of employment in Texas that has been in
and the aggregate value of contracts awarded during the progress since the middle of 1940 continued during May. The
?lonth was slightly higher than the previous peak established draft on manpower since the entry of the United States into
In August, 1941. Crude petroleum ou tput in this district in- the war has been especially heavy, and reports indicate that
creased during May and the first half of June due to the higher many business and manufacturing establishments in Texas are
production allowables in Texas, but in view of the accompany- having considerable difficulty in obtaining experienced workers
Ing expansion in crude oil stocks production aHowables for the to replace those entering the country's armed forces and to
final half of June were reduced moderately. Activity at cotton meet the demands created by increased business and industrial
textile mills in Texas was maintained at the advanced level at- activity. According to the Bureau of Business Research of the
tained in March. Employment and payrolls continued to in- University of Texas, employment in Texas during May was 18
crease under the stimulus of widespread war production.
per cent higher than a year ago, and pay rolls, which increased
6 per cent from April to May, were 43 per cent greater than in
BUSINESS
The volume of consumer purchases at reporting department May, 1941.
stores in the Eleventh District was about the same during May
The number of business failures in the Eleventh District deas in the preceding month, whereas, an increase in sales ordi- clined by nearly one-third from April to May, whereas, liabilinarily occurs at that season. The value of sales during May, ties of defaulting firms showed little change, indicating an
however, was smaller than in the corresponding month increase in the average indebtedness of business insolvencies.
a year earlier, which contrasts with an average year-to- Dun and Bradstreet reported 21 failures in May with liabilities
year gain of 15 per cent during the initial four months of aggregating $253,000. During the first five months of 1942,
1942. The slowing down in consumer buying after allowance liabilities of defaulting firms totaled $1,008,000, which was 38
for seasonal factors appears to be attributable to several factors. per cent less than in the corresponding period a year earlier.
AHRICULTURE
~he volume of anticipatory purchases, which had been espeCrop conditions in the Eleventh District lacked uniformity
Cially heavy during the first quarter of 1942, subsided to some
eXtent in April and decreased further in May after the Office at the middle of June due to variable weather conditions during
of Price Administration announced that ceilings on retail prices the preceding six weeks. In north and east Texas and northern
Would become effective May 18. Another factor having a Louisiana planting and cultivation of crops had been retarded
restrictive influence on consumer purchases was the amend- by an extensive period of wet weather, whereas, crops in southment to Regulation W, which became effective May 6, 1942. west Texas were suffering from droughty conditions, and rainThat amendment extended the "listed articles" to cover a fall was needed to replenish surface moisture in parts of New
":'ide range of semi-durable goods for civilian consumption, Mexico and Arizona. On the other hand, physical conditions
tightened the terms of instalment credit and broadened the during May and early June were generally favorable for field
work and crop growth in most other areas of the district.
regu~ation to cover open accounts. The regulation, as amended,
REPORTING .MEMBER BANKS IN LEADING CITIE9
provides tha t "no listed article shall be sold in a charge
aCCOunt with an agreement that payment therefor may be "'Il l or DOlt. "
000
~eferred beyond the tenth day of the second calendar month
ullowing the calendar month in which such article was sold." Ooo r---~----~-----+-----+----~----·~~--4---~
nder the provisions of the Regulation, open accounts outStanding prior to May 1, as well as open account purchases
l1lade during May, must be liquidated or placed on an instal- 000 I-----r---~m~nt basis by July 10; otherwise, the account will be frozen
With respect to "listed articles." The apparent effect of the
amendment to the regulation was to cause many consumers
who had substantial unpaid balances in their charge accounts
t, defer making additional purchases until their accounts were
Paced On a current basis. At weekly reporting firms, sales dur~hg t?e first half of June averaged about 2 per cent smaller 2oo~~L-PC=-~----~-----+-----+--__~----~--__~
an In the corresponding period of 1941.
Inventories of merchandise at reporting department stores
~

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

MONTHLY BUSINESS REVIEW

2

Despite the varying conditions prevailing in the several sections
of the district, prospects for crop production on the whole are
generally good. Timely rains in northwest Texas during the
first half of June relieved the moisture deficiency that was
becoming acute, and although the hail which accompanied the
rains caused some damage to wheat, the loss was not extensive.
Planting and cultivation of cotton in the principal growing
sections of the district have made satisfactory progress except
in east and north-central Texas and northern Louisiana, where
excessive rainfall has prevented normal field operations. According to the Department of Agriculture, insect damage to
the cotton crop has been small thus far, although boll weevils
and flea hoppers are prevalent in most southern and eastern
counties of Texas.
The indicated production of wheat in northwest Texas
showed a moderate decline in May due to insufficient moisture.
Nevertheless, the June 1 production forecast of 44,325,000
bushels for the State as a whole indicates that the 1942 harvest
argest of record and 17,139,000 bushels above
will be the third L
the 1941 harvest. Despite the moderate decline in prospective
production that took place during May in the territory above
the Cap-rock in northwest Texas, the indicated harvest in that
area accounts entirely for the prospective gain in production
for the State as a whole. The Oklahoma wheat crop was also affected adversely by dry weather in May, with the result that indicated production was reduced 4 per cent to 52,826,000
bushels, which compares with a harvest of 48,610,000 bushels
in 1941. The condition of the Texas oat crop, which suffered
severe damage from insects and drought during the growing
season, showed some improvement during May; nevertheless,
the prospective production of 25,610,00 bushels is about onethird smaller than in 1941. The indicated production of barley
in Texas, which amounted to 5,238,000 bushels on June 1, is
much smaller than the record harvest in 1941 but more than
double the 1930-1939 average harvest.
In the eastern half of the district, feed crops, including
corn, grain sorghums and hay, have been handicapped by a
late start and excessive rainfall but elsewhere those crops have
made generally good progress. The condition of corn in Texas
on June 1 was placed at 64 per cent of normal as compared
WHOLESALE AND RETAIL 'IlRADE STATISTICS
- - -- - - : ereentage change in:: -- - -- _
P
Number
Net sales
Stock8t~
of
May, 1042 from
Jan. I, to
May, 1042 from
Rstail trade:
reJlO~~ng
May,
April,
May al 1042
May,
April,
Department . tores:
fir_
1941
1042
from j 941
1041
1042
Totaillth Dist.. . . .
48
- 7
- 1
+10
+46
- 1
7
- 12
- 4
+ 4
+ 33
- t
Dallas ...... .. .. ..
Fort Worth. ... . . . .
4
- 14
+11
+10
+49
+ 1
Houston .. .........
7
- 3
+ 1
+12
+43
- 6
San Antonio .... ...
5
- t
- 1
+18
+04
- a
Shrevcport.... .. ..
3
+ 6
+ 0
+18
....
Other cities. .... ...
22
- 7
- 5
+ 8
+40
- 2
Independent stores:"
- 3
Arizona ... ........ 242
New Mexico .. . . ... 182
+11
- 18
Oklahoma ... .. .. . . 509
+1
Texas . ... . . . ..... . 1,104
-t
+6
+4
Wholesale trade:"
- 4
Automotive supplies
4
- 1
+12
-1
+22
Drugs (incl.liquors).
12
- 1
+ 12
+ 14
- 0
+25
I!.lectrioal supplies ..
4
- 9
+ 20
+3
:':"'7
32
- 14
Grocerios . . . . . . . . . .
+ 1
+19
+i7
Hardware . . .......
15
- 10
+5
+21
- 0
- 5
Surgical eqp't . ... ..
3
- 13
+ 5
+24
5
Tobacco'" products.
+ 13
+2
+1
"Compiled hy United Statos Bureau of Census. t Ohangc loss than one-half of onc por cent.
tStocks at end of month.

tt

t12
-1

INDEXES OF DEPARTMENT STORE SALES AND STOOKS
(1923·1925 average - 100)
May
April
March
1042
1942
1942
Salos (daily average) :
Without seasonal adjustment ... . ... .
126
127r
129
With seasonal adj ustment ......... . .
126
lSIr
133
Stocks (end of month):
Without seasonal adjustment ...... .•
106
108
101
With seasonal adj ustment .. ..... . ..•
105
104
98
r-Revised.

May
1941
124
124
73
72

with 67 per cent on the corresponding date last year. The
prospective production of peaches in Texas was reduced 70,00 0
bushels in May, but the June 1 forecast of 2,030,000 bushels
is still 829,000 bushels larger than the ten-year average harvest.
The condition of citrus fruit in south Texas at the beginning
of June was well above that a year earlier and the ten-year
average.
The condition of livestock ranges in the Eleventh District,
which had improved considerably in April, increased by less
than the usual seasonal amount during May and the first half
of June. According to the Department of Agriculture, the
supply of range grass is adequate to abundant in virtually all
areas, except in portions of south Texas, and prospects are generally favorable for good summer grazing. Livestock continued
to gain weight during May, and reports indicate that cattle
are in good grass-fat condition. The demand for cattle and
calves remained active, and although contracting for future
delivery was limited, current marketings continued heavy. In
April this year marketings in Texas numbered 332,000 head,
which was the second largest number of record for that month,
and 83,000 head greater than in April, 1941. Sheep and lambs
have responded more slowly than cattle to the ' betterment in
range conditions, with the result that ranchmen have delayed
spring shipments to some extent pending the development of
animals into slaughter condition. A considerable number of
sheep have been shipped to northern feed lots for fattening·
During April marketings of sheep and lambs in Texas nUm"
bered 129,000 head as against 135,000 head in that month a
year earlier. Sheep shearing has been virtually completed.
During the first quarter of 1942, cash income of farmers
and ranchmen in this district from the sale of crops, livestock
and livestock products averaged about 57 per cent greater th~n
in the corresponding period a year earlier. Although the gaIn
was due in part to increased marketings of farm products, the
major contributing factor was the higher level of prices. Government benefit payments to farmers in this district during
January and February, 1942, totaled only $19,735,000, which
was much smaller than the $34,859,000 distributed in the
initial two months of 1941.
CASH FARM INCOME FROM THE SALE OF PRINOTPAL FARM PRODUCTS
AND GOVERNMENT BENEFIT PAYMENTS
(In thousands of dollars)
~ March, 1942-----.
Receipts from:
Govern- ,
Total receipts- - - - - ,--- - - - - - . , ment
Maroh
March
Jan. I to Mar'4311
Crops Livestock" paymcnte
1042
1941
1942
10
Arizona. ..... .
6,247
3,838
10,085
6,057
20,712
1~'M~
Louisiana......
3,824
3.839
7,663
6,341
32,389
28'041
New Mexico. ..
077
1,954
2,031
2,110
11,048
43'450
Oklahoma . . . ..
3,132
13,472
16,604
11,708
65,621
07'1 76
Texas. . . . . . . . . 14,055
28,339
4a,294
28,407
149,580 ~
Total. .... 29,135
51,442
80,577
55,613
278,350
100,781
"Includes reocipts from thc sale of livestock and Iivostook products.
.
ed
NOTE: Government paymcnts for March, 1042, not availahle; amounts will be IIlclud
in accumulated income estimates for April.
SOURCE: United States Department of Agriculture.
LIVESTOCK RECErPTS-(Number)
~--Fort Worth- - -- - - San AntoniO--::iI
Apr
May
May
April
May
May
1042
1941
1042
1042
1941
1942
Cattle.......... . .... .. . . 52,346
47,410
78,702
10,014
22,952
Calves. ....... .. .. .... .. 15,742
21,816
17,006
18,773
16,706
U'810

g,m

:h::p:::: :::: :::: ::::: :: 1~~:~~~ 2~~:m

~~:~g~

~:~~~

1

ml~

8:870

COMPARATIVE TOP LIVESTOOK PRICES
(Dollars per hundrcdweight)
- - -Fort Worth- - - - - - San Antonio ----Ap
ril
May
May
April
May
May
42
1042
1041
1042
1042
1941
19
00
Beef steers ...... . . . . . ... . $13 .50
$10 . 75
S13. 00
511 . 50
$ 9. 50
$13.
Stocker stecrs .. . . . .. . .. . .
00
n:~
l~' ~~ 12. 60 . i0:25 .i3:50
Hcifers nnd yearlings . . .. .
9. 50
8. 10
0:50
9.25
7.50
0. 60
Butcher cows ........... .
Calvos ... . ............. .
13.50
10.50
13.50
13.00
11.00
1
3.
14 .30
9.25
14 .60
13.85
9.25
14.~~
r~~sIi~:: :: :
14.25
10 .75
12 . 75
11.00
8.50
10.

lUg

:::::::::::: :

MONTHLY BUSINESS REVIEW
FINANCE
Member bank reserve balances maintained at the Federal
Reserve Bank of D allas fluctuated widely during May and the
first haIf of June. After reaching a peak of $327,600,000 on
May 14, reserve balances declined sharply during the remainder
of the month, reflecting member bank payments for allotments
of new issues of Government securities and heavy withdrawals
by the Treasury from War Loan accounts at depositary banks.
The downward trend was reversed during the first half of June,
and daily average reserves for the period rose to a new peak of
$316,6 34,000, exceeding that of a year ago by $73,1 09,000 .
It is estimated that average excess reserves during the first half
of June were also at a new high level of approximately
$96,000,000.
There was an accelerated demand for currency in the
Elevent h District during May and the early part of June. Federal Reserve notes of this bank in actual circulation rose to a
new peak on June 8 at $15 7,738 ,000 , which was $8,108,000
higher than that reached early in May, and $ 5 2,715 ,000 greater
~han on the corresponding date a year earlier. The net increase
In circulation during the month ended June 8 was the largest
for any similar period since September last year.
. The liquidation of loans at weekly reporting member banks
In leading cities of the Eleventh District continued to exceed
the demand for new credit, with the result that total loans
declined further by about $7,000,000 during the four weeks
ended June 10. The contraction took place in advances for
commercial, industrial and agricultural purposes and in "all
other" loans, consisting principally of personal and instalment
loans. Although the decline in total loans since the turn of the
Year, amounting to $35,900,000, has been due in part to seasonal influences, important contributing factors include the
decline in personal and instalment financing and the accelerated
Collections on outstanding accounts, which have enabled business
establishments to liquidate their indebtedness at commercial
banks. Investments of reporting banks in direct obligations of
the United States Government were increased further by
$18,400,000 during the four-week period. Although the increase reflected chiefly purchases of the new issue of 2 per cent
rrea.sury bonds dated May 15, reporting banks increased their
oldlJ1gs of Treasury bills by $6, 151,000 between May 13 and
Ju~e 10. The increase in holdings of Treasury notes was due
chl~fly to the exchange of Government guaranteed obligations,
h1 either matured or were called for redemption on July 1,
ch
Or a new issue of 1 liz per cent Treasury notes dated June 5,
1942. Investments in corporate and municipal securities were
reduced $2,153,000 during the period. Total loans and investments on June 10 aggregated $699,000,000, which was
$7,400,000 larger than four weeks earlier and $96,800,00 0
greater than a year ago.
b Deposits at reporting banks showed a net gain of $5,300,000
detween May 13 and June 10, reflecting increases in adjusted
ell1and, time, and inter-bank deposits. United States Govern~ent deposits declined further to the lowest level since last
eptember.
INDUSTRY
FOllOWing a pronounced decline in April, the value of conshruction contlracts awarded in the Eleventh District increase~
s arply in May, reflecting awards for military and naval proj~Cts and other essential work. The value of construction con/a cts let in May amounted to $94,300,000, which was about
our. times that in April and fractionally higher than the
pre~lous all-time peak established in August, 1941. The increase
~het le .va!ue of awards during the month extended to each of
. prll1 clpal classes of construction work, although the most
fl0nounced gain occurred in contracts let for heavy engineers~g pr.ojects, including public works and public utilities cono ~lCtlon. The effect of the War Production Board's recent
r er plaCing restrictions on non-essential building was apparent

7

3

CONDITION OF THE FEDERAL RESERVE BANK
(In thousands of dollars)
June 15,
June 15,
1942
1041
Tot.1 c.sb reserves .. ... .... . ........ ............ . $409,078
$345,405
Discounts for member b.nks .............. ... . .... .
110
74
Industrial adv.nces .. . .. . ... .... . ....... . ..... ... .
210
276
United St.tes Government seourities .. . ... .. ...•....
00,143
8~~!~
All otber investmcnts. , . , ........... .. ........... .
14
Total earning assets . ........................... ..
09,477
88,306
Member bank reserve deposits . .... ... .. . .......•..
318,564
240,222
Fedoral Reserve notes in .otual oiroulation . . ....... .
157,140
103,763

May 15,
1042
$417,235
246
212
06,020
None
06,478
315,236
147,717

CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In tbousands of doll.rs)
June 10,
June II,
M.y 13,
1042
1041
1042
$602,200
$601,612
'fotal loans and investments. .... . . . .... . . ....... . . $600,028
Totallo.ns. . . .. .. .. . . .. . . . . . . . . . . .. .. .. .. . . .. . . . 337,038
314,466
344,950
Commeroial, industrial and agrioulturallo.ns . . . . ..
241.597
211,1 23
247,188r
Open market paper.. .. .. .. .. .. .. .. .. .. .. .. .. .. .
8,483
2,453
3,210
LOans to brokers and dcalers in seourities.... . .. ...
3,442
2,888
3,276
Other lo.ns for puroh.sing or o.rrying securities .. . .
13,313
11,831
12,591
Real cat.te lo.ns. . . . . . .. .. .. .. .. . . . . . .. ... .. .. .
21,471
23,116
21,832
Lo.ns to b.nks .. .. . . . . . . . . .. . . .. .. .. .. .. . . . ... .
240
462
288
All other loans.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ...
54,383
62,503
56,574r
United St.tes Government direot oblig.tions.. . . . . . . .
263,311
186,008
244,908
Obligations fully guaranteed by Unit~d States Gov't. .
35,031
42,303
37,744
Other seourities. . ... ... . ...... . ............... .. .
61,848
59,342
64,001
Reserves with Feder.l R080rve Bank.... . . .. ... .. .. .
194,414
153,040
200,831
Balances with domcatio b.nks .... . . . . .. . .. .•.. . . . . . 305,354
315,814
301,640
Demand deposits-adjusted". . . ........ . ..•.......
655,73 1
559,644
650,820
Time d~poSlts. . . . .. . . . .. . . .. . . .. .. . . . . . . . ..•.. . . .
131,312
135,853
130,423
United States Government deposits... ....... .. .....
20,863
35,574
20,280
Interbank deposits . ..... .. . .. . . .. .. .. .. .. . . .. . . .. . 340,010
288,800
332 141
Borrowings from Federal Reserve Bank . . ...........
None
None
None
"Inoludes .11 dem.nd deposits other tban interbank and United St.tes Government, 1 ..
0
oash itoms reported .s on b.nd or in prOC088 of oolleotion.
r- Revised
DEBITS TO INDIVIDUAL BANK ACCOUNTS
(In tbousands of doll.rs)
May
M.y
Potg.ohange
April
over year
1942
1041
1942
Abilene .... .. ........... S 12,966 $ 13,060
13,170
1
Amarillo' ,., . ...........
28,671
., 3'8',a32
.. '4'2',020
' + '62
Austin, .................
58,880
Beaumont ... , ...........
35,557
31,627
33,501
+ 12
Corsioann. , ...... .. .....
4,015
3,694
4,547
+ 0
28,002
g~l~~ Ch.ri~ti~: : : : : : : : :: 371,178 . 3'10;'750
' +'io
. 3'60:053
43,653
41,346
EI Paso .... ........ .. ...
43,813
+ 6
Fort Worth ..............
118,052
00,813
109:049
+ 18
Galveston ...... . .... ... .
33,356
31,010
32,192
+ 8
330,467
Houston .... . . . . . . . . .. . ..
307,006
343,053
+11
7,000
Laredo' ..... . .. .. .. . ....
Lubbook' ........ ••. . .. .
18,564
Monroo", ... . ....... . . . .
11,805
.. j']ji3
'+'35
. . '14:03ti
15,065
Port Arthur .......... .. .
6,470
4,877
Roswell. . . . . ............
+ 33
6,237
San Angolo' " . ..........
11,081
.. 08:00a
'+"8
.. 97:0a1
San Antonio ....... . .....
106,567
70,114
54,041
Shreveport ..............
+ 30
58,807
Tex.rkan.· ............. .
23,476
8,922
+163
26,021
Tuoson ... . .. . .. . . . ......
10,000
10,259
+ 17
17,413
11,504
12,633
9
12,708
ir~~~::::::::::::::::::
22,020
16,074
+ 37
19,760
17,933
Wiohit. Fulls ............
19.180
7
18,770

-

Potg.oh.n~

over mont

---

:

-2
"+40
+6
-12
"+'3
- t
+8
+4
- 1
"+' j
+4

.'t;~
- 13
+10
- 0
+11
- 5

Total. . . ... . . . .. $1,416,085 S1,128,085
$1,256,833
+ 16t
+ 4t
"Inoludes figurca of two banks in Tex.rkana, Arkansas, located in the Eighth Distriot
' New report.ing oentor. data for comparablo periods not available.
.
t Peroontagca oaloulated for b.nks reporf.ing oomparable figurca.
tCb.nge less th.n one-half of I per cent.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(Average of daily figures-in thousands of doll.rs)
Combined totsl
Reserve oity b.nks
Country banka
Gro..
Gro..
Gross
demand
Time
demand
Time
demand
M.y,
1040 ........... $1,346,733 $234,567 $ 784,003 $120,060 $562,730
M.y,
1041. ..... . , ... 1,545,384 245,367 901,377
135,607
644,007
J.nu. ry, 1042 ..... ... ... 1,801,210 231,871 1,026,567 128,427 774,643
227,543 1,034,477
Febru.ry, 1042 .. ..... , ... 1,805,645
126,409 771,168
Marob, 1042.... . .. . ... 1,804,123
227,091 1,036,318 126,307 767,805
April,
1042 .. . . ...... . 1,803,410 227,515 1,033,505
127,278 769,815
M.y,
1042 ..... . . .. . . 1,820,563
227,607 1,030,887
127,432 780,676

Time
$105,507
100,670
103,444
101,044
100,784
100,237
100,175

SAVINGS DEPOSITS
May 31,1042
Number of

rer.~~~g

Beaumont . . ..... ....... .
Dallas .. ................
, EIPllSo . .. .. . ........ ...
Fort Wortb ..............
Galveston .... . ..........
Houston .. .. ..... . .... . . .
Lubbook, ... .. ........ ..
Port Arthur ...... . ......
S.n Antonio ...... . ..... .
Shreveport . . ........... .
Waco . . .... . ............
Wiohita Falls ..... .. ...•.
All other . . . .. ...... .....
Total ...........

3
8
2
3

4

10
3
2
5
3
3

3
63
112

Por~entaae o~ange in
savlDgs eposlts from
Number of Amount of
savings
s.vin~s
May 31,
April 30,
depositors
deposlts
1941
1042
10,331 S 4,156,350 - 1.7
- 1.0
89,737
25,086,099 - 6.4
+ .4
18,115
6,780,027 -18.8
+ .5
32,942
12,324,733 - 6.3
+ .0
18,100
10,505,007 -11.5
- 1.3
73,700
31,078,086 - 4.9
+ .3
1,341
551,565 - .6
+ 1.3
5,347
3,012,858 - 6. 1
.5
22,738
17,406,472 - 2.4
+ .6
25,360
11,048,816 - 1.6
.5
7,263
4,108,744 - 8.5
.1
+ 1.2
6,979
3,368,741 - 4.2
+
52,462
27,202,102 - 8.5
+ .3

-

364,514

$157,620,500

- 6.6

+

.1

MONTHLY BUSINESS REVIEW
in May. Publicly-financed construction, a major portion of
which was classified as essential and carried a high priority
rating, constituted about 96 per cent of the total value of all
contracts awarded in May. Even in the residential construction
field, where normally most of the work is financed by private
capital, 79 per cent of the value of awards in May was publicly-financed.
Production of lumber at pine mills in this district declined
slightly further in May, due apparently to the shortage of logs,
and simultaneously shipments of lumber dropped to the lowest
level. for any month thus far this year. Nevertheless, the movement of lumber continued well above that of a year ago, and
the volume of unfilled orders on the books of reporting mills
at the month-end was about 50 per cent greater than on the
corresponding date of 1941. Activity at cement mills in Texas
continued at near record levels.
After declining sharply during the preceding two months,
daily average production of crude petroleum in the Eleventh
District rose 11 per cent in May due to higher production
allowables in Texas. Nevertheless, output during the month was
still 23 per cent less than the record attained in February this
year and 14 per cent below production in May, 1941. The
increase in output during May resulted in further accumulations to above-ground stocks of crude oil in the Eleventh District due to the fact that production was in excess of the effective demand. At the close of May stocks were 2 per cent higher
than a month earlier and the highest for any report date since
September, 1938. Elsewhere in the United States stocks of
crude oil declined 4 per cent in May, and at the end of the
month were 10 per cent smaller than a year earlier. The maldistribution of crude oil and refined products continues the paramount problem with which the petroleum industry is confronted. In an attempt to partially relieve that situation the
War Production Board on June 10 approved the construction
of a large pipe line extending from Longview, Texas, to Salem,
Illinois. The proposed line, which is scheduled for completion
before the end of this year, is expected to increase deliveries
of crude oil to the East Coast by 150,000 to 200,000 barrels
daily. The completion of this pipe line should partially reIieve
the shortage of supplies on the East Coast and enable the petroleum industry to effect a better distribution of crude oil and
refined products.
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thou8llnds of doll.rs)
M.y
May
April
January 1 to May 31
1942
1041
1042
1942
1941
Eleventh Distrielr-total.. . $ 04,304
$ 20,215
$ 18,687r $ 226,115 $ 140,572
10,213
9,522
4,450r
Residenti.1. ........ . ..
54,121
45,601
All other . . . . . . . . . . . . . .
84,061
19,693
14,228
171,904
94,881
United States'-total. ....
673,517
548,700
498,742
2,533,461
1,947,826
Re.identi.1. ........ ...
147,964
201,274
162,097
800,109
743,360
All other. . . . . . . . . . . . ..
525,553
347,426
336,645
1,733,352
1,204,466
'37 states cast of the Rooky Mountains.
r-Revisod.
SOURCE: F. W. Dodge Corporation.

Abileno ..........
Amarillo .........
Austin ....... .. ..
Beaumont ........
Corr.us Christi ....
Dal.s ...........
EI Paso ..........
Fort Worth .......
G.lveston ........
Houston ......... .
Lubbook .........
Port Arthur ......
S.n An tonio . . ...•
Shrevepcrt ......•
W.oo ............
Wiohit. F.IIs .....

BUILDING PERMITS
Peroentage ohange
Percentage
Mny,!1942
valuation from
Jan. 1 to M.y 31,1942 oh8n6e
valuation
No. Valuation May,1941 Apr.,1942 No.
Valuation from 1941
22
345,559 +100
- 22
192 $ 1,07M24 + 69
34
19,917 - 94
- 82
191
452,728 - 61
217,213 - 53
73
562
+ 41
1,355,701 - 47
276
240,122 + 76
962
+ 22
1,168,482 + 25
01
634,460 -73
- 47
709
3,350,960 -56
293,755 - 81
653
- 32
3,376
4,724,473 - 18
567,131 +204
68
362
+382
1,817,287 + 55
311
492,703 - 6
1,464
5,406,022 +126
- 8~
120
1,003,655 - 46
578
1,637,214 - 46
135
5,503,820 +258
1,755 10,418,505 + 21
+006
210,645 + 23
80
+359
610
1,856,535 + 37
85
64,579 - 59
+ 74
361
270,089 - 46
821
318,536 - 24
- 18
4,117
2,785,321
1
114
130,423 - 62
- 50
576
1,264,643 - 14
47
81,437 - 60
- 55
339
731,033 - 65
40,550 - 74
31
- 56
185
357,848 - 47

Tot.1. ....... 2,961 $10,064,505
'Inorease over one thou8llnd pcr oent.

-

+ 38

16,348 $38,773,665

-

9

The rate of drilling aCtiVIty in this district remained unchanged from April to May, but well completions averaged
only about 50 per cent of those in May last year. Elsewhere
in the United States, the daily average number of wells completed was 6 per cent higher than a month earlier but 29 per
cent below that in May, 1941.
Cotton mill activity in the United States was well sustained
during May although cotton consumption was moderately below the peak attained in April. There were 957,000 bales of
cotton utilized during the month, as against 999,000 bales in
April and 924,000 bales in May, 1941. Reports indicate that
the demand for cotton textiles declined considerably during
the latter half of May pending clarification of price schedules
by the Office of Price Administration. That development enabled mills to produce against unfilled orders, which are in
heavy volume, and to accelerate the diversion of plant facilities
to the production of goods needed for war purposes. Mill stocks
of raw cotton showed a further moderate decline during May,
but at the month-end inventories were still one-third greater
than a year earlier. Stocks of cotton in public storage and compresses on May 31 were the smallest for that date since 1937
and 18 per cent below those of a year ago.
Cotton prices in the United States declined sharply between
May 15 and June 15 -due in substantial part to heavy and sustained liquidations of holdings by cotton merchants, and to a
temporary reduction in mill demand for raw cotton. On June
15 the average price of middling cotton, 15/ 16-inch staple, at
ten spot markets was 18.56 cents per pound, which was 8 per
cent, or about $8.00 per bale, below that of a month earlier.
Total loadings of revenue freight by railroads in the Southwest during May indicate that the distribution of agricultural
products, minerals, and manufactures was at the highest rate
for any month since October, 1937. According to the Association of American Railroads, freight-car loadings numbered
about 277,100 during the month, which was one-fifth greater
than in May last year.
STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS
~--Texas ---v---United Statos----August 1 to May 31
August 1 to May 31
Last season
This season
L•• t senBon
This Soa'OIl
Cottonsood reoeived at mills
(tons) ........ . ........... .
952,875
1,077,567
3,005,366
4,426,500
Cottonseod orushed (tons) .... .
945,013
1,058,261
3,858,756
4,197,OJO
Cottonseed on hand May 31
(tons) .. . .... . ............ .
35,056
35,023
177,139
267,48 2
Produotion of produots:
Crude oil (thou8Ilnd 100.) ... .
272,470
325,003
1,201,316
1,356,2~
Cake and meal (tons) ...... .
413,030
495,066
1,683,010
1,865'~51
Hulls (tons) .............. .
245,016
260,314
055,460
1,055'048
Lintors (running b.le. ) ..... .
256,886
1,146,
263,010
1,136,684
Stooks on h.nd May 31:
34,372
Crude oil (thou8llnd lb•. ). . . .
3,051
11,577
18,266
Cake and meal (tons). . . . . . .
65,024
40,688
254,72~
286,844
Hulls (tons). . . . . . .. . .. .. ..
38,345
76,058
100,536
195'~~2
Linters (running bales)... . . .
21,002
224,
51,850
66,514
SOURCE: United States Bureau of Consus.
DOMESTIC CONSUMPTION AND STOCKS OF COT'l'ON-(Bales)
April
August 1 to May 31 11
May
May
Consumption at:
1942
1911
1942
This season Last .c~~
Texas mills............
22,528
17,813
22,481
204048
102,3
United States mills .....
957,015
923,518
008,754
9,202:508
7,016,1 00
U.S. stooks-cnd of month:
In consuming estab'mts. 2,589,456
1,931,565
2,631,889
Publio stg. &: comprcS8CS. 0,402,060 11.300,082 10,306,062
. , .. ,
CRUDE OIL PRODUCTION-(Barrels)
.
. daIlY
M .y, 1942
fnoreaso or dcoreaso
i11
overage produotio~
Total
Daily nvg.
2
produotion
produotion
M.y, 1041
April, 104
North Texas..... .... ... .•...
7,320,200
236,135
+ 28,450
+ 15'5:~
West Toxas .... . . ..... . . .•...
5,691,200
J83,587
- 07,740
+ ~ '004
East TOxlUl.................. 12,526,400
404,077
- 41,113
+J1 '752
South Texas.................
4,157,500
134,113
- 72,239
- Jl'52il
Texas Coastal................
7,648,400
246,723
- 25,367
+ 25,

Ir

Total Texas......... . .
New Mexioo. . ...... . . . ... ...
North Louisi.n...............

37,343,700
1,954,650
2,616,850

1,204,635
63,053

~

Total distriot. . . . . . . . . . 41,915,200
1,352,103
SOURCE: Amerioan Potroleum Institute weekly reports.

- J78,01 8
- 48,558
+ lI,773
-214,803

~
+Jtooo

~

+135,132

MONTHLY BUSINESS REVIEW
JULY 1.1942

NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
INDUSTRIAL PRODUCTION

,

~.

leo

100

./

PRODUCTION

./

160

160

(

'f'I

140

140

J

120

\

L

100

\
\

..,I

/

w

r

120

I V

roo

......J
1936

1937

eo

1
938

1939

1940

1941

1942

Federal Reserve monthly index of physical volume of
production, adjusted for seasonal variation, 1935-39
average 100_ Latest figures shown are for May, 1942.

=

DEPARTMENT STORE SALES AND STOCKS
~.

...

"'"

100

1
40

\~

11 0

......

100

90
00
70

60

I
I 40

120

I/

~

v

Ir--'"'\

1"

......,

IV

tE:
,

....,

'I

>0
20

I 10

"J' II

I 00

"
r'

eo

/

ITOCU

1--''''''

70

60
•0

1937

1938

1939

1940

1
942

$41

Federal Reserve monthly indexes of value of sales and
stocks, adjusted for seasonal variation, 1923-25 average
100. Latest ligures shown are for May, 1942.

=

I. ---

MEMBER BANKS IN 101 LEADING CITIES

....-

. . . . . 1Q.l,.AU
u

I

I
I
_G " OIUtATICM
.....
OY' _u., /

10
I~

J

rI

•

I

I"

I

u. S.

"

J'-

10

~~

........r

I

1939

&940

t941

nn.o,

GOUlnlc~ r--

22

20

)

10

/

e_~~;!~!~!'.!~"T;

l I

AU

1940

DISTRIBUTION
Retail trade declined further in May. Department store sales were about 7 per cent smaller than jn
April and sales by mail-order houses showed a similar decrease. In the first half of June department
store sales increased somewhat.
Carloadings of revenue freight increased in May by about the usual seasonal amount. There was'
further substantial decline in the number of cars loaded with merchandise in less than carload lotS,
reflecting the effect of Federal orders raising the minimum weights for such loadings. Increases were
reported in shipments of most other classes of freight. particularly coal, ore. and miscellaneous freight.

Prices of most commodities both at wholesale and retail showed little change after the gen er .;
maximum price regulation went into effect around the middle of May. Declines occurred in priCes ~
cotton and some other agricultural commodities, and prices of some industrial commodities were redu c
to conform with the general order that prices should not exceed the highest levels reached in Marc,h
Action was taken to exempt most military products from the general regulation and to allow for spe'"
treatment of women's coats and dresses and a few other nonmilitary items.
BANK CREDIT

Reporting member bank holdings of United Statcs Government securities increased by nearl~ :
billion dollars during the period. Two-thirds of the increase came in the week ending May 20 wl~lI
delivery of new Treasury 2 per cent 1949-51 bonds, and the balance represented mainly increased b~le
holdings. Loans declined somewhat in the period. Adjusted demand deposits continued to increase, whl
United States Government deposits were reduced.

14

-

Value of construction contract awards increased sharply in May, following a decline in the previous
month. and was close to the record high level reached last August, according to figures of the F. V{.
Dodge Corporation. Awards for publicly financed work increased in May and. as in other recent months •
constituted around three quarters of the total. Awards for residential buildi!\!; continued to decline.

During May and the first half of June, the Federal Reserve Banks purchased about 200 million
dollars of United States Government securities. Additions to member banks' reserves from this sour~
however, were offset by continued withdrawals of currency by the public. Excess reserves fluctU a!
around 2.700 million dollars during the six-week period.

MEMBER BANK RESERVES AND RELATED ITEMS
' &CTCIIII Wf'I'\,Y\NG IIUIIIVI

Coal production was sustained at a high rate in May and output of crude petroleum increased
somewhat. following considerable declines in March and April. Copper production and iron ore shipments rose sharply to new record levels.

i

1942

\Xlcdnesday ligures, Commercial loans, which include
industrial and agricultural loans, represent prior to
May 19. 1937 so-called "Other lnans" as then reported, Latest figu res shown arc for June 10. 1942 .

24

Steel production was maintained at about 98 per cent of capacity in May and the first half of
June. Lumber production increased seasonally and activity at furniture factories, which usually declines
at this time of year. was sustained at a high rate. In industries manufacturing textiles and food products.
output continued large in May. Gasoline production declined further, however, reflecting the effectS of
transportation difficulties. There was a further marked decrease in paperboard production which,
according to trade reports. reflected a slackening in demand.

COMMODITY PRICES

/ ' :""

I
1938

The largest increases in May, as in other recent months were in the machinery and transportation
equipment industries which arc now making products chiefly for military purposes. The amount of
copper smelted rose sharply and output of chemicals continued to advance. Activity in the automobile
industry, which since January had been retarded during the conversion of plants for armament production, showed an increase in May.

I

;"........."V

''i''''''~ V

.r/"

,.,-

I

~J/ "'"
~

Volume of industrial production increased in May and the Board's seasonally adjusted index
advanced to 176 per cent of the 1935-39 average, as compared with 173 in April and 171 during the
first quarter of this year. Output of manufactured products continued to increase, reflecting chieflY
further growth in production of war materials, while mineral production showed a seasonal rise.

80

00
1936

Industrial activity continued to advance in May and the first half of June. Commodity price>
showed little change after the middle of May when the general maximum price reg ulation went intO
effect. Retail trade declined further in May but increased somewhat in the first half of June.

UNITED STATES GOVERNMENT SECURITY PRICES

IANK

1941

~

1942

__

~

\940

____
1941

~

____

~

0

1942

Wednesday ligures. Latest ligures' shown are for June
10. 1942.

Prices of taxable United States Government bonds. which declined by about II, point at the tim,e ~
the early May financing. subsequently regained that loss and during the first half of June rem atn
steady.