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Monthly Business Review OF THE Volume 25, No.4 FEDERAL RESERVE Dallas, Texas, June 1, 1940 BANK Thi8 COpy i8 OF DALLAS released for pub- M 29 ~~~~================================================================~1i;ca;ti;on~in~a;ft;e~rn;oo;n;~p;ap;e~r8~-~~a~y~ DISTRICT SUMMARY standing accounts during April were at a slower rate than in . The outlook for the agricultural and livestock industries April last year. ~n t~e Eleventh District was improved by widespread rains Employmen.t and payrolls in Texas, as reported by the uI'lng April and the first half of May. Distribution of com- Bureau Busmess Research of the University of Texas, modities to consumers declined considerably in April, but showed httle change from March to April, but continued the rate of industrial activity continued at a high level. The considerably higher than a year ago. In manufacturing invalue of construction contracts awarded increased sharply, dustries the number employed during April was 5 per cent exceeding that of a year ago by 15 per cent. Daily average higher than a year earlier and payrolls were up 10 per cent. production of crude oil, which had increased substantially The number and liabilities of commercial failures in the In ~arch, was maintained at the advanced rate in April but Eleventh District increased from March to April but condechned about 2 per cent in the first half of May. Operations tinued at considerably lower,levels than in the corresponding at petroleum refineries in Texas during April were near the month of 1939. Dun & Bradstreet reported 23 insolvencies teak rate established in July, 1939. Cotton mill activity in during the month with an aggregate indebtedness of hexas expanded moderately to a level 17 per cent greater $215,000. AGRICULTURE t an a year ago. Following a sharp increase in March, deWeather conditions during April had varying effects upon Partment store trade showed a noticeable contraction in ~il and sales were moderately smaller than in April, 1939. the agricultural and livestock industries in the Eleventh Dish' olesale trade declined seasonally but was 9 per cent trict. Cold weather and high winds interfered with seed germination, retarded the growth of crops and range feeds Igher than in April last year. and damaged truck, corn, fruit and cotton crops. On the BUSINESS Consumer buying at reporting departlnent stores in the other hand, the low temperatures destroyed much insect life ~eventh District during April was considerably smaller than ?nd heavy rai?s over the major portion of the district greatl; e heavy demand in the preceding month and 1 per cent Improved mOIsture conditions. Rainfall during April in the OW~r than in April, 1939. When allowance is made for the Texas Panhandle, the Lower Rio Grande Valley and extreme earher date of Easter this year, however, April sales closely west Texas was light, but the moisture deficiency in those areas was partially relieved by fairly general rains early in ~pproximated those of a year ago. Due to the marked variaMay. Seeding operations were retarded during April by the ~hns in consumer purchases resulting from differences in e date of Easter and in weather conditions during March cold weather and wet soil. Considerable replanting of feed ~d April of 1939 and 194.0, a better comparison between crops has been necessary as a result of the damage sustained e two years is afforded by combining the sales of March by the April freeze. Condition of the Texas cotton crop an.d April of each year. Total sales during the two months ra~ges fro~ f~ir to good with seeding operations proceeding of the current year were 3 per cent greater than those in the satIsfactorIly m north and northwest Texas. Stands are irregular, however, and wet soil has delayed cultivation of the ~hrresponding period of 1939 and considerably higher than crop in east Texas. fi Ose in that period of any other recent year. During the Prospective production of winter wheat in Texas showed a 4 rst four months of 1940 the business of reporting firms was t per cent larger than in the comparable period of 1939. On marked increase during April. The betterment in conditions .he basis of preliminary reports, department store trade dur- was particularly noticeable in the Blackland area and in g the first two weeks of May was 6 per cent above that in north-central Texas where April rainfall was very beneficial. The condition of the crop in the Panhandle was spotted on e first half of May last year. lrWentories of merchandise at reporting firms were in- May 1, and according to the Department of Agriculture late creased by more than the average seasonal amount in April, sprouted seed in this area is susceptible to considerable damand at the close of the month the value of inventories ex- age from high winds and lack of moisture. Light to heavy ~.eeded that of a year ago by 7 per cent. The rate of collec- precipitation in. that ar~a ~uring the fi~st half of May Ions. on both open and instalment accounts during April was afforded some rehef. The mdlCated production of wheat in cons~derably higher than in that month of 1939. CONSTRUCTION CONTRACTS AWARDED . DIstribution of commodities through wholesale channels ELEVENTH fEOERAL RESERVE OISTRlcr ~LA~ t~e Eleventh District evidenced a moderate decline in ~LF'O~N5~Oi'~~LAA~'T---r--.--~__-r__-r__.-__~__~MI~LL~~~'~~~~ b PI'll, but exceeded that in the corresponding month of 1939 y 9 per cent. All reporting lines of trade participated in the ~hPansion over a year ago. During the first four months of e CUrrent year, distribution of machinery and equipment ~Xceeded that in the corresponding period of 1939 by 36 per 7ent and sales of electrical supplies and hardware were up g ~nd 6 per cent, respectively. In nondurable goods lines, the 1alns over a year ago for the four-month period ranged from i per cent for tobacco and tobacco products to 10 per cent i Or drugs, including liquors. The aggregate dollar volume of dnV~ntories at reporting firms showed virtually no change rlng April, and the total at the end of the month remained Out 4 per cent higher than a year ago. Collections on out- ot r :h A ab This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) MONTHLY BUSINESS REVIEW 2 Texas on May 1 was placed at 26,172,000 bushels, which is sharply higher than the April 1 forecast and compares with a production of 27,650,000 bushels in 1939 and a ten-year, 1929-1938, average harvest of 32,958,000 bushels. Acreage abandonment in this State was placed at 30 per cent of the area seeded to wheat last fall, which is about the average. The indicated yield per acre on the 2,900,000 acres left for harvest on May 1 was 9.0 bushels as compared with a 1939 and a ten-year average yield of 10.0 bushels. Production prospects in Oklahoma also showed an improvement during April but the May 1 forecast of 31,178,000 bushels was still sharply below the 1939 harvest. The prospective production of 2,480,000 bushels of wheat in New Mexico compares with a harvest of 2,740,000 bushels in 1939. The condition of oats and tame hay in Texas on May 1 was somewhat higher than on that date last year. The Texas peach crop was damaged considerably by the April freeze; nevertheless, prospects are st~ll favorable .for a.n above average yield. The outlook for CItruS crops In thIS State has been affected adversely by unfavorable weather. The 1940 bloom is somewhat later than usual and the set of oranges and grapefruit is expected to be comparatively light. Livestock ranges showed a noticeable improvement during April in most sections of the Eleventh District, since ·the betterment in moisture conditions more than counterbalanced the adverse effects of the cold weather. The condition of ranges on May 1 was much higher than a month earlier and a year ago and moderately above the ten-year average condition for that date. Precipitation early in May in portions of the Texas Panhandle and in south and west Texas partially relieved the drouth in those areas, but additional rains are needed to insure summer grazing. Cattle and sheep have responded to the improvement in ranges, and their condition on May 1 was likewise considerably higher than a month earlier and a year ago. The 1940 calf crop is expected to be about average in number, and a record lamb crop is anticipated. Losses of young animals have been light. According to the Department of Agriculture, the demand for cattle has been good, but sales have continued comparatively light. The movement of sheep and lambs, on the other hand, was fairly large during the latter part of April and shipments in May and June are expected to be much heavier than a WHOLESALE AND RETAIL TRADE STATISTICS ,...-_ _ _ Peroontage obange in: .Ratio April oolleotions Net sales Stooks" to aooounts outstand,...---------v , i n g April 1 , April, 1940 from Jan. 1 to April, 1040 from , April, Marob, April 30, 1040 April, Maroh, Instal1030 1040 from 1030 1030 1940 Regular ment Retail trade: Department stores: 40 .0 15.5 + 7.2 + 3.7 41.0 + 4.0 + TotallJth Dist . . - 1.3 - 0.0 17.4 4.0 2.2 5. 1 DaUas .... .. .. .. + 1.3 - 0. 5 11 .2 36 .8 +11.0 +10.0 5.7 Fort Worth ...... - 7.2 - 24 .2 40.6 + 2.0 +15.0 5.7 Houston .. ....... - 7.6 - 10.0 44 .4 2.9 + 5.5 + 8.0 + San Antonio .. .. . + 5.1 - 2.6 10 .8 41.3 .5 + 9.4 Other oities .. .... - 2.1 - 11 .7 + 1.5 Independent stores:t + 8.5 Amana ......... + 5.0 .. .... + .1 Oklahoma .. ..... - 1.5 - 0.0 + 7.3 New Moxioo ..... + 3.0 .... .. 6.4 Texas . . . .. .. . .. . 3.0 - 11 .6 Wholesale trade:t Maohinery, eqp't '" supplies (except eleotrioal} ....... +40 .0 - 11 .1 +35 .6 - 7.6 - 2.0 32.3 Grooeries . . ... .. .. + 0.1 - 1.4 + 6.0 + 7.1 - 2.1 85 .0 Drugs .. .. ...... . . +13 .0 - 4.4 + 0.6 + 1.8 - .0 75.6 Hardware ........ + 2.0 - 1.1 + 5.5 + 6.8 +.9 72.7 + 6.6 +30.7 +18.2 00.3 Eleetrioal supplies . + 3.2 +11.0 Tobaooo"'proo's.. + .8 + 3.9 + 1.0 80.0 "Stooks at 01080 of month. tCompiled by United States Department of Commeroe. + + + + ia:-i + + INDEXES OF DEPARTMENT STORE SALES AND STOCKS (1923-25 average = 100) With seasonal adjustment Without seasonal adjustmont Total Eleventh Dist . . Dallas ....... .. ..... Fort Wortb.. .. ...... Houston .. ......... .. San Antonio......... Sales-April 1040 1939 103 .0 103.6 114 .5 110136.' 5 98.0 105 .0 112 .0 99.0 92.3 Stooks-April 1940 1080 71.3 67.0 72.7 71.5 70.8 02.0 56.4 40.3 54.7 50.0 Sales1040 08.0 . 107.6 04 .0 100.8 97.6 April 1039 103.0 100.7 103 .9 110.0 93 .2 Stocks1040 74 . 2 74 .9 73.6 57.1 62.6 April 1089 69 .7 73.6 65.4 50.8 58.0 year ago. Shearing of sheep is under way in the Edwards Plateau and wool sales and contracts for future delivery are active. The Department of Agriculture reported that the spring clip of mohair in Texas was larger than usual. Prices of cattle and calves on the Fort Worth market were stimulated by a strong demand during the final two weeks of April, and some sales of beef steers and yearlings were made at the highest prices since the fall of 1937. During the first half of May, cattle prices were well sustained. Hog prices showed little net change bdween April 15 and May 15, as the decline around the middle of May cancelled the earlier ad· vances. The increase in receipts of sheep and lambs during the last half of April was accompanied by a strong demand at rising prices, but a portion of the price gains was lost in the second week of May when marketings were in record volume. The market for Texas wool and mohair strengthened in April, and current prices are considerably higher than a year ago. The data compiled by the United States Department .of Agriculture show that cash farm income in the five states In· cluded in this district duripg the first two months of 1940 was materially larger than in the corresponding period of 1939. Receipts from the sale of farm crops and livestock and livestock products were only 3 per cent higher than in that period of 1939, but Government benefit payments, which t?taled nearly $50,000,000 during the two months, were four tImes those of a year ago, and the highest of record for that period; m?reover, they constituted 37 per cent of aggreg~te cash farm Income from all sources. Total farm income, winch includes Government benefit payments, exceeded that in the initial two months of 1939 by 35 per cent. FINANCE Daily average reserve balances of member banks in the Eleventh Federal Reserve District showed a noticeable increase during the last half of April and the first two weekS in May, following a substantial decline in the preceding 31· day period. The increase was principally in the reserve bal· ances of Reserve city banks and reflects the shifting to the Federal Reserve Bank of funds made available by a de· clin~ in loans and investments. Daily average excess reserves durIng the first half of May rose to a new all-time pea~ at about $84,000,000, or approximately 65 per cent of reqUIred reserves. Total earning assets of the Federal Reserve Bank CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS AND GOVERNMENT BENEFIT PAYMENTS (In thousands of dollars) r - - - February, 1940------..,. Roooipts from: Govern- , , - - ---Total rceeipts---;O' , ment February Fcbrullry Jan. 1 to Fe~9S0 Crops Livestock" payments 1940 1939 1940 45 Arizona .. .... . 1,650 1,215 714 3,588 3,415 0,063 1~'~20 Louisiana . ... . . 3,503 1,707 1,252 6,552 5,840 13,187 4'868 Now Mexico . . . 546 1,595 933 3,074 2023 6 680 's Oklahoma .. . . . 2,607 5,460 5,210 13,376 8'003 28'J25 2056 Texas .. . ..... . 0,382 10,853 14,350 34,585 25:704 74:149 ~ 91,482 20,020 22,468 61,175 45,714 131,204 Total. . . . . 17,787 "Inoludes reoeipts from the 8ale of livestook and livestook pr&duots. SOURCE: UOIted States Departmont of Agrioulture. LIVESTOCK RECEIPTS (Number) r---;--Fort Worth---v--- San Antonio ~ April April Maroh April April ~~40 1040 1039 1040 1040 1939 281 Cattle.. . . . . . . ...... . . . . . 35,245 52,310 36,147 14,884 21,920 lh47 Calves .... .. .... .. .. . .. . 18,361 22,714 22,704 14,307 28,030 8'S17 Hogs.... . .... . . ..... . . .. 34,710 34,048 43,416 8,321 13,401 5'631 Sheep ... .... . •. .. .. . .. . . 147,638 101,901 40,088 0,740 8,073 ' COMPARATIVE TOP LIVESTOCK PRICES (Dollars pcr hundredweight) ,...--Fort W o r t h - - - v - - San Antonio ~ April April March April April ~040 1040 1030 1040 1940 1030 5 Beof steers .. . . .. . . . . . . . . $10 .00 $10.50 $ 9.25 $ 8.50 $ 9.50 S ~.~ Stooker sLeors ... . . . . .. .. . 10.00 0.50 10.00 7.50 7.50 9'00 Heifers and yearlings . . .. . 10.50 10.35 10.00 0.50 0.75 6'35 Butoher oows ... . .... . . . . 7.00 7.25 6.50 6.50 7.00 0'00 Calves .. ......... ...... . 10.25 9.25 0.00 9.25 9.00 5'50 Hogs ....... . . . . . ...... . . 6.35 6.85 5.60 0.00 6.75 7' 60 Lambs ................. . 9.50 9.50 11.00 7.50 7.00 . MONTHLY BUSINESS REVIEW ~ Dallas increased moderately during the month ended \. . ay 15, reflecting chiefly an increase of $222,000 in holdIngs of United States Government securities. Federal Reserve nho tes of this bank in actual circulation declined slightly furt er between April 15 and May 15, but the total of $78,714,000 at the middle of May was still $2,4.00,000 greater than a year earlier. Total loans and investments at weekly reporting member ~an~s in the Eleventh District declined further by $8,100,000 unng the five weeks ended May 15, and on that date they wer~ only $11,700,000 greater than a year earlier. Loans ~echned $2,4.00,000 during the five weeks, reflecting contractIons in advances for commercial, industrial and agricult~~al purposes and in loans to brokers and dealers in securtbes. All classes of investments participated in a total contraction of $5,700,000, but the most pronounced liquidation Sccurred in holdings of securities guaranteed by the United tates Government. . 00 Deposits at reporting banks were increased by $15,600,o during the five-week period, and the total on May 15 was. $98,500,000 greater than a year ago. The expansion in ~vallable funds at these banks resulted in a marked increase In balances on deposit at other domestic commercial banks and an increase of $2,900,000 in their reserves at the Federal Reserve Bank. INDUSTRY fi A marked increase in contracts awarded for publicly. nanced engineering projects resulted in a sharp expansion construction activity in the Eleventh District during April. e aggregate yalue of contracts awarded was 50 per cent freater than in March and 15 per cent higher than the total ~r April, 1939. Heavy awards for street and highway con:hrU?bOn and for a large dam project in Texas accounted for e Increase in public works construction, the value of which Was above that for any other month in more than two years AId more than three and one-half times that in April, 1939. hi tto ugh awards for public utility construction were much th g e~ than in March, they were only about one-third of b ~ie .In April last year. A 15 per cent increase in residential t~1 ding from March to April raised the value of awards for t ISbtype of construction to the highest level since last Sepetn er but the total was 8 per cent smaller than in the corre~ponding month of 1939. Awards for non-residential buildg, which declined further by 15 per cent in April, were also Out ~ ~er cent smaller than a year ago . This class of build~g a<:tlvlty, which includes commercial and industrial con; rUcbon, has shown a noticeable decline from the high level thached in February; nevertheless, the total value of awards p u~ far in 1940 has exceeded that in the corresponding t enod of 1939 by 4, per cent. The cumulative value of cond~a~ts awarded in this district for all types of construction tIng the first four months of 1940 was about the same as th at' D l~ the comparable period of 1939. El ally average production of crude petroleum in the Cr eVenth District and in the United States, which had inIneased considerably in March, showed little change in April. onlcomparison with Aprillast,year output in this district was th/ ,Per cent higher, but the gain for areas elsewhere .in Cr llited States amounted to 15 per cent. The latter InWh,as e re~ected the marked expansion in output in Illinois, ab ere dally average production during April this year was tn Out two and one-half times that in the corresponding nfnt~ of 1939. The rapid development of new oil fields in prl~OlS ~uring the past three years has resulted in a rise in 0 th UChon from abbut 20,000 barrels daily in 1937 to more in 400,000 barrels daily in the first four months of 194,0. lev Ivehntories of crude oil are still at a considerably lower e t an a ,Year ago; nevertheless, the expansion in stocks Th b f 8 in recent months has reduced the spread between the two years. On May 4 stocks of crude petroleum in the Eleventh District were 15 per cent greater than at the beginning of 194,0 and in the United States they were 8 per cent higher. Refinery operations, as measured by crude oil runs to stills, CONDITION OF THE FEDERAL RESERVE BANK (In thou.and. of dollars) M.y 15, M.y 15, 1040 1089 Total e.sh re.ervos ... . ......................... .. $246,750 $223,170 Di.counts for member b.nks ............ . ......... . 335 359 Otber bill. diseounted .... . . . . . ...............••... 30 Nonc Indu.trial .dv.nces .... . . . ...... .. ... ... . . ....... . 476 500 Bills bought in the opon market ............... .... . None 16 United St.tes Government .ecurities ...........••. . . 95,234 102,282 Total e.rning nssets ......... . ..... . ............. . 06,075 J03,256 213,404 Member b.nk roserve deposits . ........... . .... .. . . 180,586 Feder.1 Roservc notos in .ctu.1 circul.tion ......... . 78,714 76,314 April 15, 1040 $240,560 274 30 482 Nonc 05,012 05,708 212,078 70,542 CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES (In thousands of dcllars) May 15, M.y 17, April 10, 1040 1030 1040 Totallonn •• nd invostmcnts.... .... .. ....... .. .... $522,036 S510,200 $530,143 Total loan.. ........................... . ......... 267,361 251,061 260,795 Commercial, indu.trial and agricultural loan. . . . . . . 175,433 165,573 178,027 Opon market paper............................. 2,356 1,366 1,750 Lenn. to brokers .nd de.lers in securities..... . .. .. 2,346 3,537 4,306 Other lo.ns for purch.sing or carrying .eeurities. ... 13,352 15,108 13,401 &.1 est.te loans ........ ........ ............... 22,423 10,513 22,264 Le.n. to b.nks..... . .. .. . . . .. . . . . . . . .. .. . . .. .. . 501 405 438 All other lo.n. ........... .. ... .. .. .. ...... ..... 50,860 46,450 40,510 150,380 154,065 151,223 United St.tos Government direct obligation.......... Obligation. fully guarnntsed by United Statos Govt. . 45,940 46,167 40,874 OLllOr securities. . ...................... . ......... 58,346 58,106 50,251 Reserves with Feder.1 Roserve Bank................ 135,180 114,460 132,254 B.I.nees with domestic b.nks.... . . . . . . .. .. . . . . .. .. 314,628 244,087 292,088 Dem.nd deposits-adju.ted· . . . ........ . ....... . .. 479,482 442,904 473,430 Time deposIts.. . .. ........ .. .. .. ................. 136,541 136,164 136,016 United State. Government deposits .. . ... .... ....... 30,824 33,807 31,008 Interb.nk depo.its........ ........ ................ 272,461 207,906 263,161 Borrowing. from Federal Roserve B.nk. .. . . . . . .. . . . None None NOlie ·Ineludos aU dem.nd deposits other than interbank .nd United St.tes Government, IOS8 e••h items reported ns on hand or in the prooess of coUeetion. GROSS DEMAND AND TIME DEPOSITS OF MEMBEl~ BANKS (Aver.ge of daily figures-in thousand. of doll.rs) Combined tot.1 Roserve city banks Country banks April, April, December, J.nuary, February, March, April, Gross dem.nd 1988 .......... $1,074,855 1930 ... .. ..... 1,178,066 1939 . . . . . . . . .. 1,344,386 1040 . .. ....... 1.340,235 1040 .......... 1,355,474 1940. .. .. .. ... 1,350.015 1040 . . . . . . . . .. 1,340,972 Time $217,042 220,607 234,145 233.470 234,306 235,086 232,400 Gross demand $592,050 672,316 777,931 775,643 785,130 782,012 777,009 Gross dem.nd Timc $120,896 1482,796 127,813 505,750 130,290 566,455 564,592 120,435 129,055 570,344 129,580 568,003 128,764 563,873 DEBITS TO INDIVIDUAL ACCOUNTS (In thousands of doU.rs) April April Petg. eb.ngo 1040 1939 over year Abilene................. $ 8,640 $ 8,157 + 6.0 Au.tin.................. 36,403 36,020 - 1.2 Be.umont............... 24,345 22,033 + 6.2 Corsic.na .. .. .. .. . .. .. .. 3,342 2,859 + 16.9 D.U.s...... ............ 257,803 227,487 +13.3 EI Paso.. .. .. .. .. .. .. .. . 20,864 28,142 + 6.1 Fort Worth.............. 81,802 72,218 +13.3 Galveston....... ........ 24,061 22,501 +10.9 230,356 207,503 +15.3 Houston ......... ...... .. Port Arthur............. 0,510 8,595 +10 .8 Roswell................. 4,100 3,662 +14.7 S.n Antonio............. 71,847 66,872 + 7.4 Shreveport.. .. .. . .. .. .. . 46,236 39,465 + 17 .2 Tex.rk.n.·........ ... ... 7,251 7,079 + 2.4 Tuoson...... ... .. ...... . 12,622 11,558 + 0.2 Tyler ................... 11,686 10,607 +10.2 W.eo................... 13,795 12,178 +13.3 Wiohitn Falls............ 17,327 15,001 +14.8 M.rch 1940 $ 8,517 35,185 23,780 3,329 263,377 33,240 80,071 28,078 251,008 0,500 4,467 72,100 45,376 8,244 13,022 12,410 14,722 16,608 Time S 97,046 101,884 103,846 104,035 105,251 105,447 103,645 Poevtegr'mehc.nntgle " + 1.5 + 3.7 + 2.4 +.4 - 2.1 -10.2 + 1.0 - 11.1 - 4.6 -.8 - 6.0 -.4 + 1. 0 - 12.0 - 3.1 '-}:- 5 8 - 6:3 + 4.3 Totn!. .. .. .. .. .. SOOI,007 $808,917 +12.1 S024,042 - 2.5 ·Ineludes the figures of two banks in Texarkana, Arkansa., located in the Eighth District. SAVINGS DEPOSITS April 30, 1940 d Bo.umont ........•...... D.lla................... EI Paso . .......... . ..... Fort Worth .............. G.lveston ............... Hou.ton .............. . .. Port Arthur ............. San Antonio ... .......... Shreveport .. . ........... Waco ... .... . ........... Wichitn FaUs ............ All otber ................ Total ......... Number of reporting b.nks 3 8 2 3 4 10 2 5 3 3 3 60 115 Number of savings depositers 9,883 89,670 18,160 35,974 10,055 77,245 5,854 22,876 25,237 8,293 7,320 61,822 depo.lts $ 3,091,182 26,288,167 8,127,845 13,051,886 12,319,038 31,271,260 3,226,965 17,814,597 12,248,090 4,623,613 8,664,190 30,451,701 381,348 $167,078,561 Percentage ehan~e in savings deposits rom Amcunt of: savin~s April 30, 1930 + 1.4 - 3.1 .7 - 5.0 + 2.2 + 4.8 +11 .5 - 6.2 + 5.7 + .3 - 5.3 + 1.9 - + .1 M.reh 31 , 1040 + .2 + .2 - 1.5 + .3 - .6 + .4 + 1.0 + .1 + .6 + .1 .1 + .5 --.2 + 4 MONTHLY BUSINESS REVIEW increased further in April and exceeded those of a year ago by about 7 per cent. Despite a seasonal increase in demand, production of gasoline continued to exceed consumption. Stocks of motor fuel, which reached an all-time peak on April 20 at 102,800,000 barrels, declined in the subsequent two weeks, but the total on May 4 was still slightly higher than five weeks earlier and 18 per cent larger than on the corresponding date of 1939. Although gasoline prices ordinarily strengthen at this season of the year, the heavy inventories continue to exert a depressing influence on the market. The export demand for crude petroleum and refined products has shown a marked decline in recent months, due chiefly to the effects of the European war on foreign demand; whereas, imports of crude oil into the United States have shown a sharp increase. The rate of drilling activity in this district and in the United States showed little change from March to April, but it continued at a sharply higher level than a year ago. During the first four months of 194,0, the number of wells completed in the United States was 4, per cent greater than in the comparable period of 1937 when drilling activity was the heaviest in recent years. The volume of cotton consumed in the United States showed little change from March to April, but continued at a 15 per cent higher level than a year ago. During the latter part of March and the first half of April, the de!lland for co!ton textiles expanded sharply, but SInce the mIddle of Apnl mill sales apparently have been much smaller than production. Prices of some constructions of cotton goods have declined in recent weeks, reflecting the contraction in demand. The 624,000 bales of cotton consumed in April this year brought the total for the current season to 5,955,000 bal~s, which is 16 per cent greater than the amount consumed In the first nine months of the previous season, but slightly smaller than the record volume for that period established in the 1936-1937 season. Domestic stocks of raw cotton at consuming establishments and in public storage and compresses were reduced further in April, and at the close of the month the total was 14 per cent smaller than a year ago. Domestic cotton prices, which had fluctuated within narrow limits during April, turned downward early in May and in the second week of that month the market dropped sharply following the extension of the war in Europe. The price of VALUE OF CONSTRUCTION CONTRACTS AWARDED (In thousands of dollars) April April Maroh January 1 to April 30 1940 1930 1940 1040 1039 Eleventh Distriot-total... $ 21,048 $ 18,291 $ 13,945 $ 66,940 $ 67,555 Residential . . . .. . . .... . 7,665 8,200 6,687 25,283 26,604 All othor.......... .... 13,383 0,002 7,308 41,657 40,861 United States"-total..... 300,504 330,080 272,178 960,447 1,102,561 Residential............ 135,420 114,405 121,708 400,a86 a08,813 All other.......... . ... 165,084 215,625 150,470 560,061 703,748 .37 states east of the Rooky Mountains. SOURCE: F. W. Dodge Corporation. , Abilono ........ Amarillo ....... Austin ......... Beaumont ...... Corr,us Christi .• Dal as· ........ EI Paso ....... . Fort Worth ..... Galveston .. .. .. Houston ........ Port Arthur ..•. San Antonio .... Shreveport ..... Waoo .... . .. ... Wiohita Falls ... BUILDING PERMITS Poroentage ohango P ercentago valuation from Jan. 1 to Apr. ao, 1040 ohan~e , valuatIOn v v Valuation Valuation Apr.,19aO Mar.,1040 No. from 1030 113 $ 105,872 - 10.2 $ 60,390 - 36 .0 +36 .1 275 240,085 - 38.0 -10.1 777,741 - 14 .0 1,177 540,067 - 16 .4 -50.4 2,890,380 - 10.8 441 122,004 + 10.3 + 1.3 440,804 - 4.8 327,003 + 60.1 -42.2 842 3,613,217 +85.0 1,234,524 + 30.5 +13.0 2,454 4,320,675 - 15.8 356,402 +101.8 +67.7 373 878.402 +24 .3 440,457 + 7 .8 - 7.0 060 1,710,548 - 25.4 133,850 + 24 .8 -30.0 553 845,402 +64.0 1,704,330 - 48.3 - 8. 6 1,080 8,738,185 - 13 .0 110,113 + 82 .4 -16.8 501 414,000 +22.6 585,102 + 65.6 - 18.3 2,641 2,170,025 +26.0 437,945 + 38.6 -18 .6 705 1,563,208 - 8.1 263 105,600 - 22.1 - 16.2 466,170 - 28.5 179,496 +201.7 190 423,877 +46.9 +50 . 2 April,1040 No. 30 86 334 131 203 709 100 289 145 600 151 000 301 75 71 ------ -- - - 0.0 -13.2 Total ...... 4,143 $6,605,547 .Inoludes Highland Park and Univorsity Park. 13,576 $20,450,414 --- 2.8 spot cotton, middling, H-inch staple, at ten designated markets averaged 9.60 cents per pound on May 15 as compared with 10.70 cents per pound at the beginning of the month. Exports of cotton from the United States during April amounted to 345,000 bales, which was nearly double those in the corresponding month last year, thereby maintainin1 the rate of gain for the first nine months of the season. Ap~1 shipments, however, were only about one-third of those 10 January this year. The contraction in exports during the past three months has been due in part to seasonal influences, but other factors contributing to the decline include the ac' cumulation of heavy stocks of raw cotton in foreign countries, and the temporary cessation of shipments to Great Britain under the cotton-rubber barter agreement, as well as the difficulties involved in making shipments of cotton to other European countries. At the present time exports are being affected adversely by the extension of the European war to the Low countries and a 50 per cent reduction by the British Government in the allotment of freight space for the importation of American cotton. The /British Government has also restricted the amount of cotton textiles that may be pur· chased by its domestic population to 75 per cent of the pre· war trade. CRUDE OIL PRODUCTION (Barrols) Total produotion Daily avorage prod~ April Maroh 1940 1040 181 ,727 186,~~ 303,056 304 '00 01 8 482551 4, 251:577 258.7~~ 251,577 ~ J 491,690 46,242,400 1 470 488 " '112,042 3,501,200 111,017 68,153 69,088 _ 2,112,750 "--:A-pr-::i1---M-a-ro-h~ 1940 1040 North Toxas ....... . . . .... . ......... . 5,451,800 5,785,350 West 'fexns ...... . . . ...... . ......... . 0,001,700 0,431,300 East Texas . .. . ........... . ......... . 14,476,550 15,221,250 South Texas ............. .. . . . .... ' " 7,547,aoo 8,020,250 Toxas Coast·nl ................... . ... . _ 7,_54_7,_30_0 _ 7,_78_ 4,_25_0 Total Toxas. . . . . • . . . . . . . . . 44,114,650 New Mexioo. .. . .. . . . . . .... . . . .. .. ... 3,357,500 N ortb Louisialla.. .. . . . . . . . . . . . . . . . . . . 2,072,500 Total District . .. . . . . . . . . . .. 40,544,650 51,856,350 Maroh figures from The Oil JVttkly, Houston, Texas. April figures estimated from the A. P. J. weekly reports. 1,651,488 1,672,785 STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS ~--Toxas---v---United State~August 1 to April 30 August 1 to AprIl 30 II This season Last S0350 This season Last soason Cottonseed reoeived at mills (tons) .. ......... . ........ . I 004 80 4 003 054 4 102,573 807 968 , , , 1 " Cottollseed orushed (tons) .... . 034,315 1,125,103 3,052,034 •",008,170 Cottonseed on hand AprIl 30 (tOilS) .................... . 18,721 61,681 171,646 337,004 Production of produots: Crude oil (pounds) ..... . .. . 273,353,146 Cako and meal (tons) ...... . 440,050 Hulls (tons) . . .. .. .... ... . . 240,759 Lintors (runlling bales) ..... . 210,067 Stooks on hand April 30: Crudo oil (pounds) .... .... . 20,275,733 Cako and meal (tons) ...... . 41,388 Hulls (tOilS) ......... . .... . 20,453 Linters (running bales) .. 08,043 SOURCE: Bureau of CensuB. 33a,373,667 531,836 299,855 240,510 1,254,388,459 1,788,110 1,001,806 1,015,650 35,188,036 47,221 52,615 158,103 58,622,374 157,768 67,308 305,876 1,283'~M'~~~ I, '097 l',~~~:518 109,677.:~: 175, 7 123,74 583,409 CONSUMPTION, STOCKS AND EXPORTS OF COTTON (Bales) April April Maroh August 1 to AprJ'136 asa n 1040 '1'his season Last sc 1930 1040 ConBumption at: 1 01 ,74 Toxas mills .. . ........ . 10,700 0,240 10,507 103,750 5,152,547 United States mills .... . 623,893 543,187 626,331 5,954,728 U.S. stooks-cnd of month: In consuming estab'mts. 1,409,617 1,202,565 1,505,722 Publio stg. &: compresses. 10,743,002 12,076,432 11,404,208 EXJlorts from U. S. to: United Kingdom.. .. .. . 111,655 20,022 110,795 1,748,378 33,016 France. .. .. . .. . .. . .. . . 6,787 51,080 702,000 Italy.... . . .. . . . . . .. . . . 47,404 13,534 489,014 57,288 Gormany.. . . . .. .. . . . . . NOllC 15,382 18,002 Nono Other Europe. . . . . . . . . . 42,340 30,874 1,022,572 62,430 56,530 803,074 74,480 '. : : : : 35,090 77,769 009,132 i~r~~bo~ ~~~"'t~i';,;. Total exports.. . . ~gM 344,609 178,225 433,842 5,604,062 RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF HOUSTON AND GALVESTON-(Bales) '130 April April Maroh August 1 to Apr:..,asap 1040 1030 1040 This soasoll La. t 3 962 Reooipts. . ... . . . . . . . . . . . . 98,738 21,477 248,077 3,711,156 ~'~~1'320 Exports............... .. 105,905 116,713 281,260 a,202,455 , ' .. . 1,110,008 1,457,704 Stooks, ond of month. . . . . 1,376,601 ..... MONTHLY BUSINESS REVIEW JUNE 1, 1940 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION j.f6NTt IN TOTAl. INDEX POllfTi IN TOTAl.. IIGeX ~J 12<) .,/ 100 fV'~ eo l.CI. 140 \ / V 60 ---...". 40 1-/-' . . 40 . . . . . .- 100 _~=r. 60 ~, ------ "~-~l ~ l---/ iJ~ ~ES b v 120 ) 1\ "- / tv \ 20 IIUiDW..S o 1934 19M 1936 1931 1938 1939 1940 Index of physical volume of production, adjusted for seaSOnal variation, 1928-1925 average 100. Durable manufactures, nondurable manufactures, nnd Illinerals expressed in terms of points in the total index. By months, January, 1984 to April, = 1940. FREIGHT CAR I.OAOINGS POlm IN TOT'AI. INDEX I 00 eo ..... lOT... ~ \, h../' --/ / ""' 40 --~~~ """""en !eus V AU. "I ~ 1m rV 80 ~ .... .r f-'""' ',,"," IV 1834 80 '\- C()~ 1938 1937 r-----' " 20 p- lY rv 1938 I~ o 1940 ~ndex of total loadings of rev~nue freight, ad- ~~sted for seasonal variation, 1928-1925 average o. = Miscellaneous, coal, and all other expressed in Jerrns of points in the total index. By months, nnuary, 1984 to April. 1940.. t DEPARTMEtiT STORE SALES AND STOCKS rtRca<r Or-- I 10 I 00 SALtSI 0 ~~ rv V ~ srOCl(8 --'\ 0"""- -....., --,,/" 1\ ,tI~ "'-- 90 10 r-.--' 60 0 50 0,19 40 34 1935 1936 1937 1938 1939 1940 Index Sea es of value of sales and stocks. adjusted for lno:: a1 variation, 1928-1925 average 100. By s. January. 1984 to April, 1940. = MONEY RATES IN NEW YORK CITY PCltct NT 4 o 1936 li'or \V Ilk 1937 1936 1939 1940 e s ending January 6. 1984 to May 18. 1940. Industrial activity was steady during April after three months of sharp decline, and in the first half of May increases appeared in some lines, particularly steel. Prices of basic commodities showed mixed changes toward the middle of May, accompanying the extension of active warfare in Europe, while stock prices declined sharply. PRODUCTION The Board's seasonally adjusted index of industrial production for the month of April was 102, compared with 104 for March and 109 for February. Steel ingot production was steady during April at slightly over 60 per cent of capacity as compared with an average rate of 64 per cent in March; in the first half of May output rose sharply and currently is sched. uled at about 70 per cent of capacity. Automobile production in April continued at about the March rate, although ordinarily there is an increase at this season, and in early May declined somewhat. Retail sales of new cars approximated production in April and dealers' stocks of both new and used cars remained at earlier high levels. Output of plate glass, used largely by the automobile industry, declined considerably in April, and lumber production showed somewhat less than the usual seasonal increase. In the machinery, aircraft, and shipbuilding industries activi ty continued at the high rate of other recent months. In the textile industry activity at cotton and woolen mills declined somewhat further in April, following considerable reductions in March. At silk mills activity remained at a low level, while rayon production was maintained at a high rate. Output at meat-packing establishments continued in large volume. There was some furth er curtailment in shoe pro· duction in April; in most other industries producing nondurable goods changes in output were largely seasonal in character. Coal production, which usually declines sharply in April, showed only a small decrease this year. Output of crude petroleum, which had reached record high levels in March. was largely maintained in April and the first half of May, although stocks of crude oil were increasing and gasoline stocks were unusually large. Value of construction contract awards increased further in April, reflecting principally a rise in contracts for private building, according to figures of the F. W. Dodge Corporation. Awards for private residential building were in somewhat larger volume than a year ago. Private non·residential building was about one·third greater than at this season last year and was near the previous peak level reached in mid-1937. Awards for public construction, how· ever, were considerably below the level of last spring. DISTRIBUTION Distribution of commodities to consumers showed little change in April and the first half of May. The Board's seasonally adjusted index of department store sales was 90 per cent of the 1923·1925 average in April, alhout the level that has prevailed since the first of the year but below the peak of 96 reached last December. Total freight·car loadings in April were in about the same volume as in March. Shipments of coal declined less than seasonally, while loadings of miscellaneous freight, which include most manufactured products, showed less than the sharp rise that is customary at this season. In the early part of May increases were reported in shipments of most classes of freight. FOREIGN TRADE Exports of United States merchandise, which have been at a high level since last December declined somewhat in April. A large part of the decrease in April was accounted for by th~ complete cess~tion of shipments to n~rthe~ European countries after ~lUtbreak of hostilities there, but declmes were also reported m shIpments to most other countnes. Exports to Canada, the Union of South Africa, and France, however, increased. Shipments of commercial vehicles declined sharply, following a considerable rise in March and exports of iron and steel products, which had been increasing steadily since last summ~r also showed a decline. Exports of cotton and copper decreased further from earlier high lev~ls, while machinery and aircraft shipments continued in large volume. During April, the monetary gold stock of the United States increased by $337,000,000, the largest increase since August, 1939. Acquisitions of gold in tbe first two weeks of May totaled $169,000,000. COMMODITY PRICES Prices of a number of basic commodities, which had been declining after a rise in April, advanced from May 10 to May 14. Increases in this period were particularly marked for imported materials, such as rubber, tin, and silk. Grain prices rose at first but subsequently showed sharp declines. Price changes for other commodities were mixed; steel scrap advanced while cotton declined considerably. Prices of certain steel products, which had been reduced early in April, were restored to earlier levels on May I, and producers announced that steel purchased at the lower prices must be taken by the buyers on or before June 30. GOVERNMENT SECURITY MARKET Prices of United States Government securities declined sharply from May 10 to May 14, accompanying the further spread of war in Europe. Prices of long. term Treasury bonds on May 14 were 3%, points below the high point reached on April 2. The yield on the 1960·65 2%, per cent bonds rose from 2.26 per cent on April 2 to 2.48 per cent on May 14. BANK CREDIT Total loans and investments at reporting member banks in 101 leading cities increased during the four weeks ending May 8. Most of this increase was at New York City banks and reflected purchases of United States Government obligations. Deposits and reserves of banks in leading cities continued at record high levels.
@FedFRASER