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MONTHLY BUSINESS REVIEW
o f
the
FEDERAL RESERVE
Dallas, Texas, June 1, 1942
Volume 27, No.4
/
DISTRICT SUMMARY
The effects of war-time restrictions in certain lines of activity and shortages in transportation facilities for the moveme~t
of some industrial products became increasingly apparent ~n
the operations of some of the pri~cipal bra~ches of mdustry m
the Eleventh District during Apnl. The dally average production of crude petroleum was curtailed sharply further, and
drilling of new oil wells continued the downward tren? ~hat
has been in progress since last September. The restnCtions
placed upon non-essential building an~ a smaller v~lume of
awards for the construction of war projects resuked m a pronounced decline in the value of new construction started
during April. On the other hand, the dema~d for building
materials, including lumber and cement, particularly for war
purposes, continued heavy. The value of c,onsumer p~rc~ases
at reporting department stores in this distnct was mamtamed
at about the level attained in March, and the value of merchandise distributed through wholesale channels was ne~rly
one-fifth higher than in April, 1941. The heavy and Widespread rains during April and the first half of !"fay retarded
farming operations in some areas, but greatly Improved the
outlook for livestock ranges and for crop production.
BUSINESS
The dollar volume of consumer buying at department stores
in this district continued at a high level during April. The value
of sales at reporting stores was abo~t the same as in March and
Was 7 per cent higher than in Apnllas~ year. The pe~centag,e
gain in sales as compared with a year earher was smaller m Apnl
~han during the first quarter of the yea~, apparently reflectlll,g
In part the effect upon sales of the earher date of Easter t~lS
year. This bank's adjusted index of department store sales, which
makes allowance for seasonal factors and the variable dat~ of
Easter, was 132 per cent of the 1923-1925 average in ,Apnl ~s
compared with 133 per cent in March and 1 ~ 8 per c~nt m ApnI,
1941. During the first quarter of 1942, the,ll1crease l~ the, dollar
volume of sales was about offset by the higher retail pnce~ of
goods handled by department stores, indicating that the ~hyslcal
volume of goods sold was about the same in the two per~od~. In
A.priL, however, it appears that the physical volume of dlstnbution was considerably smaller than in that month ,of ~941. O~
A.pril 1, the index of retail prices, compiled by F01rclnl~ Publtcations, was 19 per cent higher than on the correspondmg date
of 1941. During the first half of May the dollar value of sales
~t weekly reporting stores was about 4 per cent smaller than
In the comparable period last year.
The value of merchandise inventories at reporting departlllent stores increased further during April, and at the monthend was 40 per cent greater than a year earlier. The value of
n1erchandise orders outstanding on April 30 was 29 per cent
slllaller than a month earlier, but 69 per cent larger than on
that date in 1941.
BANK
o f
Dallas
June 1
This copy is released for pub·
lication in afternoon papers-
pared with those during April last year closely approximated
the average year-to-year gain for the first four months of
1942. Inventories of merchandise at reporting wholesale firms
were reduced slightly during April.
According to data compiled by the Bureau of Business Research of the University of Texas, employment in Texas was
about the same in April as in March, but payrolls showed a
further increase of about 2 per cent. In comparison with April,
1941, employment was 16 per cent higher and payrolls were
up 41 per cent. The most pronounced decreases in employment
from March to April< occurred at confectionery establishments,
cotton oil mills, cement plants, and in the production of crude
petroleum.
The number and liabilities of business failures among manuf acturing, trade, construction, and commercial service establishments in this district increased considerably during April
and exceeded by substantial margins the respective totals for
the corresponding month a year earlier. Dun and Bradstreet
reported 31 insolvencies during the month, with liabilities
aggregating $252,000.
AGRICULTURE
Weather conditions during April and the first hal£ of
May had varying effects upon agricultural conditions in the
Eleventh District. Widespread rains relieved the moisture
deficiency in most areas, checked insect activity, and stimulated the growth of crops. On the other hand, field work
was seriously delayed in some sections, particu].arly in the
eastern half of the district, and floods caused considerable
damage and loss of crops in many lowland areas. In north
and east Texas and in northern Louisiana, planting and cultivation of summer crops were seriously retarded and many
fields became foul with weeds. In most other areas, however,
f armers were able to make satisfactory progress with field
work. The corn crop, although later than usual in some areas,
has made satisfactory growth. Planting of cotton has extended
into northwest Texas, while chopping of cotton is weU under
way in south Texas. Reflecting the strong demand for and
urgent need of domestic vegetable oils, as a result of the loss
of important foreign sources of supply, farmers in this district
have increased substantially the acreage planted to peanuts.
According to the Department of Agriculture, seeding of peanuts is going forward in virtually all adapted areas of T exas,
DEPARTMENT STORE SALES AND STOCKS
ELEVENTH FEDERAL
R~RVE
DIURIGT
PIA ClNT
"'0
~0~--4----+----r---4----+----r---i----+--i·~1--~1~
00
l
Total sales of reporting wholesale firms in eight lines of
trade in this district showed little change from March to
A.pril, as increases in sales of drugs, electrical supplies, hard\Vare, surgical. equipment, and tobacco, were count~rbalanced
~Y declines in the distribution of grocenes and machl11ery. The
Increase of 18 per cent in sales during April this year as com-
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
80
70
00
50
~
'04,
30
2
MONTHLY BUSINESS REVIEW
and good stands are reported in the southern portion of the
State.
Physical conditions during April continued almost ideal for
the growth and development of wheat in the heavy producing
area of northwest Texas. The May 1 production forecast of
the Department of Agriculture for the State was placed at
45,802,000 bushels, which, if realized, will be the second
largest crop of record and 18,616,000 bushels in excess of the
1941 harvest. The estimated acreage abandonment is 18 per
cent of the total area seeded to wheat in the fall of 1941,
which compares with 33 per cent for 1941. Most of the
acreage abandonment this year occurred in north and central
Texas where the wheat crop was severely damaged by insects
and drouth. The indicated per acre yield on the 2,955,000
acres remaining for harvest on May 1 was placed at 15.5
bushels, which compares with a yield of 10.4 bushels last year.
Further evidence of the damaging effects of greenbugs and
drouth is revealed by the condition of oats in Texas on May
1, which was placed at 39 per cent of normal as against 81
per cent on the corresponding date last year. The prospective
production of wheat in Oklahoma was forecast at 54,800,000
bushels on May 1, which compares with a 1941 harvest of
48,610,000 bushels. The indicated production of 4,170,000
bushels for New Mexico is 73 per cent higher than the 1941
harvest.
Although adverse weather prevailed during the blooming
season, conditions since that time have been generally favorable for the growth of peaches in Texas. The 1941 production
forecast was placed at 2,100,000 bushels on May 1, which
compares with 2,475,000 bushels harvested in 1941. The
1930-1939 average production is only 1,200,000 bushels.
Livestock ranges in this district, which had deteriorated
considerably during the first quarter of the year, showed a
marked improvement in April and the first half of Mayas a
result of the heavy and widespread rains throughout most of
the district. In contrast with the favorable situation prevailing
in most sections, drouth conditions still prevail in some southwestern counties of Texas. In that area there is little range
forage, cattle are thin, and ranchers have either continued
WHOLESALE AND RETAIL 'URADE STATlSTICS
Percentage cbange in:
Stockot-Net oales
Number
April, 1942 Crom
April,
1042
Crom
Jan. I, to
of
April,
March,
reporting
Ar.r.
30,
1042
Retail trade:
1~4~' ~04~h,
rom IOU
IOU
1042
firms
Department stores:
- I
47
+15
+40
+7
Totollltb Dist .....
+7
-1
-8
7
+27
+0
Dallas ... . ........
+3
4
+47
- 6
+18
+18
Fort Wortb . . .. •...
+7
+16
+46
7
+7
Houston .. ..... ... .
+7
+5
4
+24
+56
+18
San Antonio ... . ...
+24
+3
+22
3
Shreveport ... ... ..
+5
+11
+'3
22
+13
+47
Other cities .. . ....•
+5
+8
Independent Btoras:'
-t
+15
Arizona . . . . . . .... . 239
+11
-1
New Mexico ....... 171
+1
+6
-3
- 5
+4
Oklahoma .. ....... 517
-t
Texas .... .. . . ..... 1,119
+2
+5
Wholesale trade:'
Maebinery, eqp't. de
-12
- 27
4
Bupplies ...... .. .
+3
No ehg.
No chg.
- 13
3
Automotive supplies
':":'io
+14
+20
Drugs (inc1.liquors).
10
+10
+2
-1
I!.lectrical supplies ..
3
+40
+61
- 4
- 4
30
+24
Groceries . .... . .. . .
+17
- 2
+26
Hardware . . . . . .. . .
+25
+5
~
+27
+16
Surgical eqp't . ... . .
5
+25
+1
+37
-2
4
-t
Tobacco & products.
+10
'Compiled by United States Bureau of Census. tChange less tban one-half of one per cent.
i2~
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1023-1925 average ~ 100)
April
March
February
1042
1042
1942
Sales 1rlaily average):
129
108
128
\Vit out seasonal adjustment . . . .....
13S
127
132
With seasonnl adjustment ... . ... . ...
Stocks (end of month):
01
101
108
Without seasonal adjustment .. .. .. ..
05
lOt
98
With seasonal adjuBtment . ... ..... . .
April
1941
117
118
77
74
supplemental feeding or have shipped stock to other areas for
pasturing. More rain would also be beneficial to the TransPecos area of Texas and in scattered localities elsewhere.
Since the betterment in range conditions, livestock have
made more than average gains for this season. Cattle generally
are in vigorous condition, with many grass-fat cattle available
for marketing. The calf crop, which is better than average,
has made good growth. An active demand prevails for all
classes of cattle. Sheep and lambs are now making satisfactory
progress, following a slow start due to the prolonged drouth
and poor range conditions in the sheep growing territory
earlier in the year. Sheep shearing, although later than usual,
has made satisfactory progress. Marketings of cattle and calves
for the first quarter of 1942 totaled 421,000 head, the second
largest movement of record for that period, as compared with
351,000 head in the corresponding quarter of 1941. The
market movement of sheep and Lambs for the quarter was
353,000 head as compared with 242,000 head a year earlier.
The March movement of 160,000 head was the largest of
record for that month.
FINANCE
United States Treasury financing during the first half of
May included an issue of 2 per cent Treasury Bonds of 19491951 in the amount of $1,250,000,000, which was offered for
subscription to all investors, and a new so-called "tap" issue
of 2Yz per cent registered Treasury Bonds of 1962-1967,
which was offered for subscription to investors other than
commercial banks with demand deposits. Subscriptions to the
latter issue were allotted in full and investors in this district
purchased a total of $19,339,700 of such securities. Subscriptions by investors in this district to the 2 per cent Treasury
Bonds of 1949-1951 amounted to $84,688,500, against which
allotments of $35,329,800 were made. Beginning with the
issue dated May 13, the Treasury bill offerings were raise?
from $150,000,000 weekly to $250,000,000 weekLy. On Apnl
30 the Federal Open Market Committee directed the Federal
Reserve banks to purchase for the System Open Market
Account all Treasury bills that; might be offered to them on a
discount basis at a rate of Ys of 1 per cent per annum.
OASH FARM INOOME FROM THE SALE OF PRINOTPAL FARM PRODUCTS
AND GOVERNMENT BENEFIT PAYMENTS
(In thouoandBof dollars)
,,---February, 1942-..,
Receipts Crom:
Govern. r
Total rcce~ts
----, ment
Fcbruary February
all. 1 to Feb. 28
1941
1042
1041
Crops Livestock' payments
1042
11,173
3,561
272
4,335
8,168
3,982
10,458
Arizona . .... . .
15,734
5,246
11,605
6,052
307
6,533
24,371
LouiBiana .. ....
6,88 1
1,541
1,655
302
3,588
3,150
7,099
New Mexico .. .
31,661
4,714
9,822
3,028
17,564
16,100
38,237
Oklahoma . ....
78,769
20,206
3,735
43,859
34,866 103,644
Toxas ....... .. 10,828
40,466
7,734
84,784
64,640
103,700
Total. ... . 36,584
"Includes roceipts Crom the Bale of livestock aad livestock products.
SOURCE: United States Department of Agriculture.
\
~
f
-
144,168
LIVESTOCK RECEJPTS- (Numbcr)
~--Fort Worth
Cattie . ........ . ....... . .
Calves . . . .. .... . .. .... ..
~oe~~::::: : : :::: : : ::::: :
April
1042
78,702
17,006
62,760
83,202
April
1041
37,153
18,844
40,040
87,710
March
1042
40,868
10,835
60,626
77,967
April
1042
17,012
15,678
11,810
8,870
San Aatoni0--;-h"
arc
April
1041
1942
10,083
17,7~
16,547
l~'~IO
12,265
0'061
8,172
'
COMPARATIVE TOP LIVESTOCK PRICES
(Dollar. per hundredweight)
~--Fort Worth
San An\onio ~
April
March
A1ltil
Apr>1
1042
tC4~1
1041
1942
1042
1942
$10 .25
$11. 26
$12 .50
Beof stecrs ... .. ... . ..... . $13.00
$11 .00
S13 .00
11.25
12 .00
Stocker steers .. ... . ... . .. 13 .00
.i2:00
12 .85
Heifers and yearlings .. ...
13.25
11.35
13 .00
0. 26
7.50
Butchor cows . . , . .... . ...
0.50
8.00
0.25
0.50
12. 00
10 .50
12 .50
13 .50
Calves .. ......... .. .. . . . 13 .50
11.50
6
13.1
8.50
13 .65
14 .10
Hogs ....... . .. .. . ... .... 14 . 60
8.75
11 . 25
8.25
Lambs .. .. . ... .. .. .. . . . . 12.75
11.35
13 .00
10 .50
.io:oo
>
I
(
MONTHLY BUSINESS REVIEW
The total earning assets of the Federal Reserve Bank of
Dallas rose approximately $7,100,000 between April 15 and
!vfay 15, reflecting chiefly this bank's participation in the net
Increase during the period in holdings of United States Government securities by the System's Open Market Account. The
reserve balances of member banks in this district have continued to show wide fluctuations, reflecting largely the effects
of Treasury operations. Although reserve balances declined
approximately $31,000,000 between April 14 and April 21,
SUbsequent increases raised the total to a newall-time peak
of $327,600,000 on May 14. However, on the following day
~hen payments were effected for the allotments to the new
ISSue of 2 per cent Treasury bonds, dated May 15, 1942, total
reserve balances declined to $315,000,000. The demand for
c~rrency in this district has continued unabated. The actual
Circulation of Federal Reserve notes of this bank totaled $147,700,000 on May 15, which was $5,300,000 higher than a
month earlier and $46,700,000 higher than a year ago.
. Reflecting chiefly a substantial decrease in loans, the principal earning assets of weekly reporting member banks in
leading cities of the Eleventh District declined $10,600,000
between April 15 and May 13. The contraction in loans was
accOunted for by declines in advances for commercial, indus~rial and agricultural purposes and in "all other" loans, includIng personal and instalment loans. Since the beginning of
19 42, total loans at these banks have shown a net decline of
$28,900,000, as compared with a contraction of only $3,500,000 during the corresponding period a year earlier. The Jarger
d~c1ine during the current year reflected decreases in commerCial and industrial loans, in loans on securities, and in personal
and instalment loans. Investments of reporting banks were
r~duced $1,200,000 during the four-week period, reflecting
hquidations of Government direct obligations and municipal
and corporate securities. Despite the decline that took place
between April 15 and May 13 in the principal earning assets
of these banks, total loans and investments on the latter date
Were stiU $93,100,000 greater than a year earlier.
Total deposits at reporting banks declined $8,600,000 during
the four-week period, due to a pronounced reduction in United
~tates Government deposits which more than offset increases
In adjusted demand and interbank deposits.
INDUSTRY
11: Construction
activity in tllls district declined sharply from
arch to April, reflecting in part the limitations placed upon
~on-essential building and in part a smaller volume of awards
Or the construction of war projects. The value of contracts
aWarded during April, amounting to $18,750,000, was about
60 per cent lower than in either the preceding month or the
c.orresponding month of 1941, and the smallest for any month
Since the inauguration of the National defense program in
June, 1940. The decline in the value of awards occurred in
eac.h of the principal classes of construction work, including
l~Sldential, non-residential and engineering, and in both pubdc1~ and privately financed projects. Despite the marked
;cl~ne in the value of construction contracts awarded during
1 pril, total awards during the first four months of 1942 were
8 per cent higher than in the corresponding period a year
carher.
. The demand for lumber at pine mills in this district con-
~Inued to expand in April when unfilled orders and shipments
h
r lll mills reached the highest levels in recent months. On the
ht I er hand, production of lumber declined, apparently being
led down to some extent by a shortage of logs. Mill stocks of
U1llber have continued to decline, with reports indicating that
3
the supplies are inadequate to meet the heavy demand. To
partially relieve this situation, the Government has made
substantial purchases of lumber from retail yards. Operations
CONDITION OF THE FEDERAL RESERVE BANK
(In thousands of dollora)
May 15,
May 15,
1042
1041
Total cash reserves .... ... . . . . .......... . .. .. .. . . . $417,235
$341,530
Discounts for member banks . .. .. . ...... .. ....... . .
246
43
Industrial advanoes ... .. ..... . .. ...... .... . . . .. .. .
212
277
United States Govcrnment securities . . .. .. . . .. .•... .
90,020
88,040
Total earning asscts . .. .... ...... . .... ..... .... .. .
00,478
88,300
Mcmber bank rescrvc dcposits .... . ... .. ... . ...• .. .
315,230
258,407
Fedcral Reserve notes in actual circulation ..... . . . . .
147,717
101,006
April 15,
1042
1410,122
147
230
89,027
89,404
307,034
142,441
CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In thousands of dollara)
May 13,
May 14,
April 15,
1042
1041
1042
Total loans and investments . . . . .. . . . . . . .. . . . . . . . .. $601,012
$598,494
$702.208
Total loans . . . . .. ... ... ... ..... . . .. .. .. . ... . .... . 344,050
315,223
354,383
Commercial, industrial ond agricultural loans . . .. . . 244,088
213,150
251,599
Open market papor... . . ....... ...... . . . . ... . ...
3.210
2.410
3,204
LOans to brokers and dealers in securities... . . . . . . .
3,270
3,059
3,077
Other loans for purchasing or earrying ••curities . ...
12,501
11.805
12,438
Real estate loans. . . . ... .. .................... . .
21,832
23,486
21,787
Loans to banks...... .. .. .. .. .. .. .. .. .. .. .. .. .. .
288
458
277
All other loans. . ... . . . . .. . .... . . ....... .. . .... .
50,074
60,849
61,101
United States Government direct obligations . .. . . ....
244,908
178,330
245,737
Obligations fully guaranteed by United States Gov't..
37,744
43,401
37,746
Other securities. . .. . .. .. .. .. . .. .. .. .. .. .. .. .. . .. .
64,001
61.540
64,342
Reserves with Federal Reserve Bank... . .. . ...... . ..
200,831
102,208
190,781
Bclances with domestio banks .. .. .. . . . . . .. . • .. .. . . . 301,040
310,102
310,205
Demand deposits-adjusted' ... '" ....... . .. . . . ...
650,820
561,343
642.285
Time d~poslts. ... ... ..... . . . . . . . . ........ . .......
130,423
136,304
130,478
Uuited Stutes Government deposits .. ....... .. . . . . ..
20,280
28,783
52,170
Interbank deposits.... . . . . .. . . . . . .. . . .. . ... .. . . . . . 332,141
294,006
326.314
Borrowings from Federal Reserve Bank. .. . .. . ... . ..
None
None
NOlle
'Includes all demand deposits other than interbank and United States Government, less
oash item reported as on hand or in proce.. of oolleotion.
DEBITS TO INDIVIDUAL ACCOUNTS
(In tbouaande of dollars)
April
April
Potg.ohango
1042
1941
over year
Abilonn ......... . .... .. . $ 13,170
12,008
+ 4
Austin ... .. .... ... ......
42,020
37.947
+11
Beaumont ....... . .. .... .
33,591
30,169
+11
Corsicans . .... . .. ... . . ..
4,547
3,811
+ 19
Dallas .... .... .. ... .. ...
360,053
311,555
+ 10
EI Paso . .. ..............
43,813
89,105
+ 12
Fort Worth ... ..... ... .. .
100,049
92,441
+ 18
Galvoston . .• .. ... . .. . ...
32,192
20,277
+ 10
Houston .... . . . ..........
343.053
274,955
+ 25
Port Arthur ....... . .....
14,936
10,205
+ 45
Roswell . . . . .. .. ....... ..
6,237
5,217
+ 20
San Antonio ......... . ...
97,984
83,996
+ 17
Shreveport . .. ...........
58,807
50,757
+ 10
Toxarkana- . ... . ..... . ...
26,921
9,834
+174
Tueson .... . .............
17.413
15,009
+ 12
12,708
12,408
+ 2
~~~~: :::: : ::::::::::: : : 19,700
15,267
+ 29
Wichita Falls ............
18,779
18,080
+ 4
Maroh
1042
12,030
02.514
33,917
4.736
367,002
40.495
119,960
38,460
344,537
14,245
0,176
98,080
62,134
29,171
17,337
12,398
21,104
19,988
Potg.ohan~e
over mont \
+4
-,'13
-1
-4
- 2
- 6
- 9
- 4
- t
+5
+1
-1
-5
-8
+ t
+3
- 6
-6
Total .... ...... .. ... $1,256,833 $1,053,541
+ 19
$1,300,808
- 4
'Includes tho figures of two banks in Telarkana, Arkansas, located in tb. Eigbth District
tIndioatcs chango of lcs., than one-half of one per cent.
•
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(Average of daily figures-in thousands of dollars)
Combinod total
Reserve oity banks
Country banks
Gross
demand
April,
1940 ... ...... . $1,340,972
April,
1041.. .. .. .... 1,541,825
December, 1041 . .... . . ... 1,803.380
January, 1942 . . . . ...... 1,801,210
February, 1942 .. .. . .. ... 1,805,045
Muroh,
1042 ... . .... . . 1,804,123
April,
1042.. .. .. .... 1,803,410
Time
$232,400
243,042
230,810
231,871
227,543
227,001
227,515
Gross
domand
$ 777,099
801,686
1,028,881
1,020,567
1,034,477
1,030,318
1,033,595
Gross
Time
demand
$128,764 5563.873
135,990 050,139
131,948 774,440
128,427 774.043
120,490 771,168
126.307 767.805
127,278 760,815
SAVINGS DEPOSITS
April 30, 1942
Beaumont . .. ........ ....
Dallas . . . . . ...... . . . .. . .
El Paso ....... ... .......
Fort Worth ..............
Galveston . . ..... . . .. . . ..
Houston .. .. .... .. .......
Lubbook .. . . . .. . . . .... . .
Port Arthur ..... .. ... . ..
San Antonio .... . ..... .. .
Shreveport .... . . .. .. ....
Waco .... ...... ..... . . ..
Wiohita Falls ... .. .. . .. ..
All other ..... . . . .. .. .. ..
Total. .. . .... . ..
Number of
ret:rting
anks
3
8
2
3
4
10
3
2
5
3
Number of
savings
3
63
depositors
10,353
80,961
18,241
33,108
18,174
74,464
1,373
5,411
22.863
20.574
7,307
7,097
53,100
112
368,042
3
Amount of
aavin~s
Per~enta~e ol~ange in
saVlllgS
24,902,264
0,758,581
12,322,043
10,638,192
30,978,158
544,223
3,026,504
17,391,405
11,088,334
4,106,182
3,333,223
27,107,634
April 30,
1941
- 2.5
- 7.0
- 20.3
- 6.5
- 11.9
- 5.4
- 1.7
- 7.2
- 3.6
- 2.3
- 9. 2
- 0.9
- 9.7
Sl57,384,605
- 7.4
depOSits
$ 4,197,142
Time
$103.045
107.952
104.871
103,444
101,044
100,784
100,237
eposlts from
March 31,
1942
- 1.0
.0
.5
.1
-1.5
+ .5
.1
+ .7
.1
+ .1
+1.1
+ .1
.8
--
-
-
.2
MONTHLY BUSINESS REVIEW
at cement mills in Texas have been at exceptionally high
levels. During the first four months of 1942, production of
cement exceeded the previous peak established in that period of
1941 by nearly one-third and shipments were 22 per cent higher.
Consumption of cotton in the United States during April
reached a new peak of 999,000 bales, which compares with
967,000 bales in March and 921,000 bales in April, 1941.
Total consumption during the first nine months of the
current season amounted to 8,245,000 bales, representing an
increase of 18 per cent over that during the corresponding
period of the preceding season. Stocks of cotton at consuming
establishments on April 30 were slightly smaller than the
record supply held at the end of the previous month, but
were still 36 per cent larger than a year earlier.
On April. 21, the War Production Board directed the cotton
textile industry to convert within 30 to 60 days a substantial
part of its capacity from civilian to military or more essential
constructions. Under that order the production of bag sheetings and bag osnaburgs, which are needed in the war program
or for industrial purposes, will be greatly increased. Steps had
already been taken to expand the output of some other essential
constructions. The new program, which calls for a shift from
the lighter to heavier weight constructions, will require greater
quantities of cotton per yard of fabric produced, further stimulating the consumption of cotton. According to the War
Production Board, plans now being worked out call for the
production of 14 billion square yards of cloth during the
calendar year 1942 and 15 billion square yards in 1943 . These
amounts would compare with slightly more than 9 billion
square yards of cloth produced in 1939.
The General Maximum Price Regulation Order, announced
by the o.ffice of Price Administration on April 28, togetheU:'
with the amendments relating to cotton yarns and textiles,
placed absolute price ceilings on all cotton products, eliminating the previous fixed rel.ationship under which price ceilings
for cotton goods varied with the price of cotton.
Although the movement of petroleum and petroleum products by railroad tank cars has continued to increase, it has
Abileno ...... .. ..
Amnrillo .........
Austin ... , ... . •..
Beaumont ... . .. ..
Corr,us Christi ....
Dol as .......... .
EIPaso ..........
Fort Worth .......
Galveston ... .....
Houston ..........
Lubbook ... ......
Port Arthur ......
San Antonio ... ...
Shroveport ... . . .•
Waoo ............
Wichita Falls . . ...
BUILDING PERMITS
Percentage change
Percentage
April,l942
valuation from
Jail. 1 to Apr. 30, 1042 ohan~o
valuatIon
Valuation from 1041
No. Valuation Apr.,1941 Mar.,1942 No.
170 S 780,405 + 57
24 S 445,811 +522
+427
157
432,811 - 40
108,000 -03
- 41
36
153,541 - 69
- 00
489
1,138,488 - 40
107
196,423 - 22
680
928,300 + 10
173
- 20
2,810,500 - 49
1,003,001 - 49
+282
618
106
2,723
4,430,718
432,088 - 02
- 35
025
5
294
1,250,156
79
117,739 - 56
- 87
27
1,153
5,004,210 +102
3,229,198 +567
209
+287
53,221 - 84
458
033,559 - 44
121
- 78
-03
1,620
4,914,685 -31
547,050 - 60
295
45,858 - 88
539
1,645,890 + 39
84
- 05
- 17
276
215,410 - 40
37,104 - 61
85
3,290
2,406,785 + 3
386,987 -14
- 50
810
462
1,134,220 + t
133
261,582 + 9
- 37
292
179,887 - 87
649,596 - 66
72
+ 4
93,047 - 46
154
317,298 - 38
43
- 35
+
+
---
-
0
Total. ....... a,131 $7,291,197 - 22
tIndioate. ohangc of leBS than one-half of one pcr ocnt.
13,387 $28,709,160
- 12
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of doUars)
Jan. 1 to April 30
April
April
March
1942
1941
1942
1042
1941
Eleventh Distriot-total... $ 18,703
$ 45,234
S 46,934r
$131 ,877
S11l,357
48,974
36,109
Residential. . ... .... . ..
4,525
12,240
10,780r
All other.. ............
14,228
32,994
86,154
87,903
75,188
United Statcs"-totn!.. ...
498,742
406,675
010,790
1,859,944
1,390,120
052,145
542,080
Residential. . . ........ .
162,007
166,462
219,276
AU other . . . .. . . ... . .. .
380,045
240,213
391,523
1,207,700
857,040
r-Roviecd.
"37 etatcs cast of the Rooky Mountaine.
SOURCE: F. W. Dodge Corporation.
only partially relieved the transportation diiliculties resulti?g
from the virtual withdrawal of ocean tankers from the serVIce
of moving such products for civilian consumption. The effect
of shortages in transportation facilities is reflected in the
rationing of gasoline along the East Coast and in states in the
northwestern part of the United States, and in the curtailment
of operations in the petroleum industry in the Southwest,
particularly Texas. The dail.y average output of crude oil in
the Eleventh District during April was reduced 16 per ce~t
below that .in March and was 18 per cent lower than that In
April, 1941. Elsewhere in the United States daily average
production increased slightly from March to April and was 6
per cent higher than in the corresponding month last yea~,
Although daily average production in this district during April
was about one-third lower than in January this year, stocks
of crude petroleum increased approximately 10,000,000 barrels
between January 31 and May 2.
Refinery operations in the United States were curtailed
further in April, when crude oil runs to refinery stills wer~ a~
the lowest level since August, 1940. Inventories of princlpa
pe't roleum products likewise declined . While stocks of gasol me
and heating oil on May 2 were above those on the same date
last year, those of industrial fuel oils were 16 per cent smaller
than a year ago.
The rate of well completions in this district showed a
further noticeable decline in April, but there was a moder~th
increase elsewhere in the United States. In comparison WIt
April, 1941, well completions in both this district and the
United States reflected a decline of about 45 per cent. ~e
number of drilling rigs in operation in the Eleventh DistrlC~
at the beginning of May was 17 per cent fewer than a mont
earlier,
STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS
~---Texas
Ullited StalesAugust 1 to April 30
August 1 to April 80
This
season
Last
season
Thie
season
Last SOBSOD
Cottonseed received at mills
(tons) ... .......... . ...... .
053,093
1,071,442
3,884,600
4,3752'06~
025,438
1,038,477
8,714,540
4,01 ,
Cottonseed crusbed (tons) .... .
Cottonseed on hnnd April 30
401,283
55,440
48,712
(tone) ........ " ......... . .
300,502
Production of products:
266,091
318,474
1,290,O~r
Crudo oil (thouaand lhe.) ... .
1,154,258
Cako and menl (tons) ...... .
405,201
485,000
1,020,649
1,780'~16
240,500
Hulls (toile) ..... ... . . . ... .
203,a05
021,632
1,008'789
1,000,
Lintere (running bales) .. .. . .
257,000
252,458
1,004,450
Stooks on hand April 30:
47,663
Crude oil (thollaand lhe.) . . . .
5,571
17,010
10,063
256,4~!
Cako alld meal (tOilS). . . . . . .
76,407
58,816
311,403
100,2
Hulls (tons). . . . . . .. . . .. . ..
51,011
86,775
124,998
256,202
Linters (running bales).. . . . .
31,240
08,566
05,308
SOURCE: United States Burenu of Census.
DOMESTIC CONSUMPTION AND STOCKS OF COTTON-(Bnles)
April
April
Maroh
August 1 to April ~on
1042
1041
1042
'fhis senson Last ac·
Consumptioll at:
1
22,481
23,401
22507
181,520
174,671
Texas mills .. .... . . . .. .
098,754
920,050
960;031
8,245,493
6,902,50
United States mills .. . . .
U.S, stooks---end o[ month:
In oonsuming cstab'mts . 2,031,880
1,935,365
2,051,014
Publio stg,« compreBBCS. 10,396,902 12,300,807 11,352,007
......
CRUDE OIL PRODUCTION-(Barrole)
. dailY
April, 1042
Jnorease or deorea~e If oW
averago prodllot~
Daily nvg.
Total
0
produotion
April, 1041
Marob, 17::
produotion
6,630,450
+ 12623
- 7, ()3
North Toxas ................ .
221,015
- 40;005
- 30,3 96
5,380,800
Wcst Texas ............ • .....
170,600
8,732,200
- 137,824
- 08,t77
East Texas . . . .... ..... . .... .
201,073
4,375,950
- 48,622
- 36'&00
South Texas ...... ....... ... .
145,805
_ 30,731
- 30,
Texas Coastal. .... . ......... .
6,636,000
221,200
- 253,049
- 209'0J7
1,058,813
Total Texas ... ....... . 31,704,400
2,302,000
New Mexico ................ .
78,733
- 30,100
- 12'665
2,382,750
70,425
North Louisiana ....... . .•....
+ 8,752
~
_224,04 3
Totnl distriot. . . . . . . . . . 30,500,150
1,216,971
- 275,000
SOURCE: Amerioan Petroleum Institute woekly reports.
-6Gl
i
MONTHLY BUSINESS REVIEW
JUNE I, 1942
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Comviled by the Board of Governors of the Federal Reserve System)
INDUSTRIAL PRODU CTION
""~
200
I BO
18 0
PRODUCTION
'"
/
160
16 0
I
fi
140
140
J
120
100
Industrial activity increased i.n April and the first half of May reflecting conti.nued advances in
armament production. Following an increase in buying during the first quarter, retail trade declined
somewhat. Wholesale commodity prices advanced further.
L
~
\
80
1 9~6
1937
12 0
I IV
\
\
v
/
~
100
-.....1.
eo
1 9~9
19'8
1940
1941
1942
l'edderal Reserve monehly index of physica l volume of
P
. ro uceion, adjuseed for seasonal va ri adon, 1935-39
.'verage = 100. Laeese figures shown arc for April ,
1942.
FREIGHT-OAR LOADINGS
' OI ."I"~fiL I
....
Expansion of industrial product ion in April was reflected in an advance in the Board's seasonally
adjusted index f rom 172 to 174 per cent of the 1935-39 average. This increase followed upon a period
of relative stability during the first quarter of the year, when growing war production was offset by
decreased civilian output.
Since the beginning of the year total volume of industrial output has shown little change but
there have been marked differences among individual industries. In general output of machinery,
chemicals, and armament of all kind s has continued to expand at a rapid rate. There have also been
substan t ial increases in output of electric steel, nonferrous metals, glass containers, wood pulp, and
coal. On the other hand , output of many products for civilian use such as automobiles, tires and tubes,
wool textiles, elect rical appliances, alcoholic beverages, petroleum, and petroleum products has been
sharply reduced either by direct order' or by shortages of material or transportation facilities. In the
month of April crude petroleum and petroleum products were the principal commodities showing a
decline in output. Output of furniture, cotton and rayon textiles, manufactured foods, paper products,
and tobacco products has been maintained in large volume.
I 60
I 40
120
100
.. ~
'\
TOU£
t\/ iV
k1(V
7
I 00
'0
--
20
80
40
~
AI.L OTIC It
['---
qo
V"
'V
i"" ."..."...
~ \-~~
If
I 20
V
20
y
V eoA !.
o
F
1936
1937
1938
1939
1940
194 1
1042
rcederal Reserve monthly index of total loadings of
19;~nu e freight, adjusted for seasonal variation ,
100. Subgroups shown are exr . 39 . average
I> essed In terms of points in the toeal index. Latese
figures shown are for April, 1942.
=
MONEY RATES IN NEW YORK CITY
'11 CUI
4
Value of construction con t racts awarded in April, as reported by the F. W.' Dodge Corporation,
was almost one-fifth below the high March total, reflecting a decline in publicl y financed construction.
Residential contracts decreased by one-fourth and for the month were at about the same level as last
year. Awards for non-residential building increased slightly, mainly because of a 40 per cent increase
in awards for factory construction, practically all publicly financed.
In the first four months of 1942, total awards were about one-fourth greater than in the corresponding period last year; public awards more than! doubled , while those for private projects were
down by about two-fifths. Public awards in this period made up over 70 per cent of the total, compared
w,ith about 40 per cent last year.
DISTRIBUTION
Retail sales declined somewhat in April, following a cOll.'liderable amount of anticipatory buying
during the first quarter of this year. At department stores, dollar sales in April were about 10 per cent
below the first quarter average, making allowance for usual seasonal variations, but were 5 per cent
above the level prevailing during the latter part of 1941. During the first half of May sales showed
a further decrease and were around 6 per cent larger than a year ago in contrast with price increases
amounting on the average to about 20 per cent over the year period.
Total freight car loadings increased sharply in April owing chiefly to larger shipments of coal
and forest products, and to a sharp rise in iron are loadings as the Great Lakes shipping season got
underway. Shipments of mer~ handisc in less than carload lots, which had begun to decline in March,
were reduced sharply further in April, reflecting Government action to increase the average load per
car in order to effect fuller utilization of railroad equipment.
COMMODITY PRICES
Beginning on May II, wholesale prices of most commodities were limited to the highest levels
reachec\ during March, according to the general maximum price regulation issued April 28. Effective
May 18, retail prices of most commodit ies wero likewise limited. Retail prices of related services will
be limited beginning July 1-
\'(1
19'6
1937
1938
u~a9
1940
194 1
1942
an~e~)' averages of daily yields on T reasury nOees
lre oods and average discount on new issues' of
as u ry bills offered within week. Latest figures
shOwn are for week ending May 16, 1942.
t.lEt.lBER BANK RESERVES AND RELATED ITEt.l9
~ I "-"",,~,
e" I-' ACTO"'s.u"L1'IHG Mst~vt r\llolOS
~l.o ITL~ ~
22
rAtTOll3
USINO"t'C I'!Vl r\IN~
I----~-----t----~ I.
MI ... . U
' I-
t~ulUlIV CUIlIU.NtY
G::,.-r--------l--
:-U'
I·. '"··iI
BANK CREDIT
IlANK
I. LL
IS
I, 'o
Wholesale prices of most farm products and basic foods, which are exempt from direct control,
showed little change in this period, following sharp increases earlier in the year.
Ittsutvt lAl.AHCU
2or-.L
2
About 30 new maximum price schedules for industrial products were issued from the middle of
April to the middle of May. Most of these covered wholesale prices of items previously subject to
informal or temporary controls. Upward adjustments in maximum prices were allowed for coal,
ferroman ganese, tires, petroleum produc ts, and a few other items.
\'(1 d 11 40
19 41
1942
1940
10 41
1942
e Ilesday fi gures. Latese fi gures shown are for
May 13, 1942.
During the five weeks ending May 2 0 Federal Reserve Bank holdings of Government securities
increased by about 200 million dollars, while currency in circulation rose by 260 million. Member bank
deposits increased during the period and required reserves showed a corresponding growth . The net
res ul t was a decline of 300 million in excess reserves. Holdings of United States securities at banks in
leading cities increased further, while commercialloal1S declined. Liquidation of loans was concentrated
at banks in N ew York City and in the Kansas City district.
UNITED STATES GOVERNMENT SECURITY PRICES
Prices of U. S. Government bonds declined in th e last half of April, but steadied in the fir st half
of May. Rates on current Treasury bill issues rose from about 0.20 prr cent in March to 0.36 per cent
in May. The Federal Open Market Committee announced on April 30 that Federal Reserve Banks stood
ready to purchase all Treasury bills offered at 0.375 per cent.
I
MONTHLY BUSINESS REVIEW
BATTLE FRONTS AND HOME FRONTS
The long heralded spring offensives are under way. Intensive action is taking place on battle fronts
in widely separated areas, and in the critical months ahead increasing quantities of war materials will be
needed to equip and support the expanding fighting forces in the ever-widening spheres
of activity. Industry is making rapid strides in meeting the tremendous goals set ~y
the President early in January this year, and reports from official quarters indicate that In
many instances actual output is exceeding previous expectations. In fact, the Director of
the Budget, in issuing revised estimates of war expenditures for the fiscal years ending
June 30, 1942 and 1943, stated that the remarkable acceleration of war production
had necessitated upward revisions in probable expenditures. It is now estimated that war
expenditures alone will amount to $70,000,000,000 during the fiscal year ending June
30, 1943, an amount which is about eight times total Government expenditures during the fiscal year
ended June 30, 1940, the year preceding the inauguration of the defense program. It is needless to ~a)
that the financing of such huge expenditures constitutes a great financial problem, and that it is VIta
that ever),! measure possible be taken to carry out the financing on a basis that will preserve the soundness
of our economic system. Taxes have already been increased and additional levies are under consideration,
yet it is apparent that a large proportion of total expenditures must be financed through borrowing. In
that, individuals throughout the nation can make an important contribution by purchasing increasing
amounts of War Savings bonds and stamps.
In the first year that War Savings bonds and stamps were on sale, May 1, 1941 to April 30, 1942, the
Treasury sold to the public a total of approximately $ 5,400,000,000 of such securities, including appro){~
imately $3,400,000,000 during the five months following Pearl Harbor. On May 1 this year, the Secre~
tary of the Treasury outlined a new and enlarged program for the sale of War Savings bonds and starnps.
That program calls for total sales of $600,000,000 in May, $800,000,000 in June, and $1,000,000,00 0
in July and each month thereafter. Quotas for the sale of War Savings bonds and stamps are being set up
for every county and parish in the United States. Sales during the first half of May suggest that the goal
for that month will be met or exceeded, but it is important to remember that the goals for future months
can be met only through increased buying by those who are now participating in the program and by
enlisting the cooperation of the millions who are not now buying War Savings bonds and stamps.
The realization of the goals set by the Secretary of the Treasury will require coordinated action on
the part of all institutions and individuals. Financial institutions and corporations have the important
function of providing the means by which individuals may make their purchases of War Savings bonds
and stamps as conveniently as possible. Many businesses have already established a payroll allotrnent
plan, whereby their employees can save regularly specified amounts of their salaries for the purchase. of
War Savings bonds and stamps. Some of these concerns have qualified as issuing agents so that indivId~
ual purchasers may receive their bonds quickly and conveniently. Other businesses who are in a positioJ1
to do so, should seriously consider inaugurating those services for the benefit of employees and the
country at large. These facilities for the saving of funds and the distribution of securities are essential to
enable individuals to make maximum contributions.
The general plan of the Treasury contemplates that each individual should invest 1 per cent of. his
income in War Saving bonds and stamps. While each individual may not be able to meet that goallnt~
mediately because of individual circumstances, he shquld make arrangements to do at least that rnuch
as soon as possible. To make sure of contributing his part, each individual should inaugurate an invest~
ment program which can be adhered to without interruption. Then, by carefully planning expenditUr
he should be able to divert from time to time additional amounts of his income to War Savings bon
and stamps. In the months ahead when fewer civilian goods will be available, increasing amountS 0
expanded incomes should be used to help finance the war. Every individual cannot serve on BATTLB
FRONTS, but he can make his contribution on the HOME FRONT. He has a challenge to do his utrn?st
in making PAY DAY stand out as BOND DAY for the purpose of helping to finance the steadily IJ1~
creasing flow of war materials to the fighting forces.
°
df,
J
r
@FedFRASER