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MONTHLY BUSINESS REV EW o f the Volume 29, No.4 = FEDERAL RESERVE Dallas, Texas, June 1, 1944 DISTRICT SUMMARY . Consumer buying at department stores in this district, after Increasing substantially in February and March, declined in April but was 10 per cent larger than in the corresponding month of 1943 . Available data indicate that nonagricultural employment in this district has declined more than 5 per cent since reaching its all-time peak in November, 1943. In March, 1944 employment in manufacturing establishments was approximately 9 per cent smaller than in November of last year and only fractoinally larger than in March, 1943. Agricultural employment in the Southwest has increased less than usual at this season due to delays in field work occasioned by adverse weather condi~ions and the scarcity of farm laborers, and on May 1 was about 6 per cent smaller than a year earlier. The value of construction contracts awarded in this district continued approximately at 1940 levels in April this year and was about 90 per cent below the peak reached during the autumn of 1942. DUring recent months awards for public works have accounted for a much larger portion: of construction awards than during the 1941-1943 period. Daily average production of crude petroleum in this district increased slightly in April but remained below the all-time peak attained in November, 1943. It appears that daily average production will reach a newall-time peak ill May, and allowables for June call for a further increase. Stocks of crude petroleum in this district, which reached an all-time peak in February, declined until mid-April but have increased Il1Qderately since that time. The general acceleration of drilling ~ctivity continues in most sections of the Eleventh District and In the United States as a whole, but substantially fewer wells are being completed than during comparable periods prior to ~he War. Consumption of cotton at textile mills in Texas and IU the United States declined more than seasonally in April and Was considerably smaller than in April, 1943. Extremely varied weather conditions in this district during April and the first two weeks in May had generally adverse effects upon agricultural prospects. Ranges deteriorated during April and field work, particularly in the eastern sections of this district, was delayed by heavy rains and floods late in April and early in May. Prospects for wheat and other small grains have greatly improved. BUSINESS The dollar volume of sales at reporting department stores in this district decreased by more than the usual seasonal amount from March to April, but was 10 per cent larger than in April, 1943. Reflecting the decrease in the dollar volume of sales, this bank's adjusted index of department stores sales declined from the all-time peak of 247 per cent of the 1935-1939 average in March to 232 per cent in April, but the latter figure was well above the 195 per cent registered in April last year. The dollar volume of stocks at the end of April showed a negligible change from that of a month earlier but was 11 per cent higher than that of a year ago. Sales of weekly reporting department stores during the first three weeks of May were 27 per cent above sales for a similar period in 1943, indicating the continuation of the high level of consumer buying during May. Sales of piece goods, ~cIuding dress and coat yard goods, increased 20 per cent durIng the first four months of this year over the same period a year ago. This increase was recorded despite the exceptionally BANK o f D allas This copy is r eleased for publication in afternoon papers-- June 3 large volume of sales during February, 1943. Sales of several lines which had increased sharply in March as a result of consumer anticipation of new and high excise t ax levies, declined substantially in April. As compared with March, the reporting department stores showed a 45 per cent decrease in sales of toilet articles and drugs, and a 41 per cent decrease in sales of jewelry and silverware. Nevertheless, total sales of department stores during the first four months of 1944 were 14 per cent higher than: sales during the same period in 1943. In April, I oth cash and credit sales at department stores showb ed decreases from the high March volume. However, cash sales decreased only 4 per cent whereas charge account and instalment sales showed decreases of 18 and 17 per cent, respectively. Cash sales accounted for 54 per cent of the total sales in April and were approximately one-fifth larger than a year ago. Charge account and instalment sales also showed a slight increase over those for the corresponding month of 1943. Sales at reporting furniture stores in April declined 5 per cent from the moderately high volume of a month ago and were in approximately the same volume as in April, 1943. Stocks at the end of the month remained at approximately the same level maintained during the past two months. Cash sales during April were 16 per cent higher than those of a year ago, while credit sales showed a decrease of 4 per cent. This is f urther evidence of the increase in the ability of the consumer to pay cash and to liquidate his obligations while income is high. According to Dun and Bradstreet, Incorporated, there have been no business failures in this district since December, 1943. Although the business mortality record throughout the United States has been favorable, this district is the only one in which no failure has been reported thus far this year. AGRICULTURE Varied weather conditions prevailedi during April and the first half of May in the Eleventh District. Heavy rains late in April and early in May provided much needet'l moisture to all parts of this district except the southwestern and western sections, but flooded the lowlands in central, southeast and east Texas, damaging growing crops and necessitating considerable replanting in those areas. Cool nights throughout this district have retarded development of crops and! the shortage of irrigation water in the lower Rio Grande Valley, where little rain has been received, has been detrimental to growing truck crops and to progress of the new citrus crop. The corn crop in Texas was planted later than usual, and thin stands are reported to be fairly common in some areas. Some acreage in east Texas was lost as a result of the recent rains and floods, but the crop in Blacklan'd and southern sections of the State was growing well at the middle of May. The cultivation and chopping of cotton are under way in southern Texas, with a portion of the crop in bloom. In other sections, much cotton planting remains to be done and replanting will be necessary in the lowlands of central and east Texas. At mid-May, preparations for the cotton crop were at least three weeks late throughout most of Texas. Prospects for the Texas wheat crop were greatly improved during April, and a 1944 crop of 52,949,000 bushels is now indicated, as compared with 36,366,000 bushels produced in 1943, and the 1933-1942 average of 28,195,000 bushels. If the indi.- This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) 2 MONTHLY BUSINESS REVIEW cated production is realized, it will represent the second largest crop of record. The May rains also checked deterioration of the Texas oat crop, which is expected to be somewhat larger than tpe 1933-1942 average and considerably larger than the small 1943 crop. The 1944 T exas peach crop will probably be much larger than the short crop of 1943 but slightly below the 19331942 average. The harvest of citrus fruit for the 1943-1944 season is almost complete in the State. The indicated orange crop of 3,300,000 boxes is more than twice the 1932-1941 average and 20 per cent greater than the harvest of 1942-1943, a~d the indicated grapefruit productiton of 17,500,000 boxes is only frac tionally smaller t han the record crop last year and more than twice the 10-year average. New range growth was retarded by high, drying winds in A,pril, and the condition of ranges in most sections of this district was less f avorable on May 1 than a month earlier. Ranges in the eastern half of Texas were benefited by early May rains but ranges in west, south and southwest Texa~ and in southern New Mexico and Arizona received little moisture. Reflecting the decline in the condition of ranges during April and the shortage of stock water supplies in some sections, the average condition of cattle and sheep in this district was somewhat lower on May 1, 1944, than a month earlier or at the same time in 1943. The lamb crop in New Mexico is expected to be smaller than last year, and heavy death losses among early lambs have occurred in Arizona as a: result of an epidemic of black scours, but new lambs are in good condition in Texas. Late feeding of livestock and the large number of animals on farms rapidly depleted hay and other feed stocks in Texas during the early months of this year. Stocks of hay as of May 1 were lower than a year earlier and the lowest for that date since 1938, and a record disappearance of wheat in Texas during the first quarter of 1944 drastically reduced wheat stocks, which on April 1 were more than 25 per cent below the 1935-1942 average in the Stat e and 80 per cent smaller than on April 1, 1943. Present stocks of cottonseed hulls and cake and meal are also low as compared with stocks held in the State on comparable dates in earlier years. Despite the larger number of cattle on farms, total marketings of cattle and calves in Texas during the first four months of 1944 were somewhat lighter than in recent years and movements to feeding areas from the Southwest were much smaller than the heavy movements during the same period in 1943. Larger cattle herds are 'being retained on farms in this area, apparently in anticipation of better prices for beef and veal. These large herds present a potential threat to orderly marketing during the remainder of this year, since present feed supplies are low and extensive deterioration of range and pasture feeds might necessitate a sudden liquidation of herds. During March and April of this year, the prices received by Texas farmers for most of their products continued near the high levels attained in 1943. The average farm prices of wheat, corn and oats reached new peaks during March and April, 1944, and prices of grain sorghums and hays were only slightly below the peaks of the 1940-1944 period. Livestock prices, which reached their peaks for the 1940-1944 period during the spring and summer of 1943 and declined steadily until the end of last year, increased moderately from December, 1943 to March, 1944, but were from 5 per cent to 10 per cent lower on April 15, 1944 than a year earlier. During April and Mayall frozen foods, many canned foods and all meats except some beef cuts were removed from the list of rationed products. The relaxation of food rationing, which was not generally anticipated, seems to have been motivated! by several considerations. Stocks of many foods have been accumulated which are large in comparison with current and anricipated demands, and economies in the utilization of foodstuffs which COTTONSEED AND COTTONSEED PRODUCTS ___- - Te x n s - - v - -United StatesAugust 1 to April 30 August 1 to April 30 Last season This season Last season This sen., on Cottonseed recoived at mills 005,068 1,007,886 3,800,540 4,425,067 (tons) .. .. ...... , , .... , ... . 892,568 098,252 3,601,616 4,202,208 Cottonseed crushed (tons) . ... . Cottonseed on hand Apnl 30 204,800 42,589 287,709 (tons) .... .. ... . . . ....... . . 57,169 Production of prod ucts: 1,304,631 1,151,090 Crude oil (ttrousand Ibs.) ... . 268,578 287,380 1,859,628 1,712,247 Cake and Ineal (tons) .. . ... . 424,1 86 446,569 1,013,131 862,606 Hulls (tons) . , .. .. ........ . 210,030 247,720 1,262,276 Linters (r unning bales) .... . . 267,076 295,444 1,103,397 Stocks on hnnd April 30: 20,086 24,336 Crude oil (thousnnd lbs.). . . . 10,724 2,080 38,382 58,121 Cake and meal (tons) . . . . . . . 15,286 6,373 24,602 H ulls (tons) . . . . . . . .. .. . .. . 4,288 6,714 23,012 285,001 216,384 Li nters (rllnning bales) . .. . . . 58,979 76,752 SOUR CE: United States Duroau of Consus. DOMESTIC CONSUMPTION AND STOCKS OF COTTON-(Bales) Apr il 1944 Consumption nt: 15,533 Texas mills ....... .. ... . 776,007 United States mills ..... . U.S. stocks-end of month : I n consuming cstnb'monts. 2,221,800 P ublicstg. & compressos . . 10,276,595 April 1943 22,903 089,178 March 1044 17,027 002,102 August 1 to April 30 This season Last scasoD 154,910 196,314 7,580,279 8,439,480 2,421,004 10,601,339 LIVESTOCK RECEIPTB-(N umbor) ~FortWorth--~---San An~onioApril Apr il March April April Mnrch 1944 1943 1044 1044 1043 1944 24,056 17,132 14,037 117,026 41,284 Cattle.. .. .. . . . . .. .. .. . . . 86,813 21,354 11,905 15,606 11 ,452 13,394 Calves . . . . . . . .. . . .... . . . 16, 187 13,071 0,869 13,276 127,837 02,350 Hogs. . . . . . .. • .. .. .. . .. . 112,565 19,073 16,994 9,371 76,301 55,321 Sheep .. .. .. .. .. .. .. .. .. . 108,332 COMPARATIVE TOP LIVESTOCK PRIOES (Dollars per hundrnd weight) ~FortWorth--~---8an Beef steers .. ...... . . . . .. . Stocker steors .. .. .. .... . . Heifers and yoarlings . . .. . Butcher cows . .. ... ..... . Calves ... . . .. . .. . . . . ... . Hogs ..... .... .. .. . . . ... . Lambs . .... .. .. . . ... ... . April 1044 $15.50 April 1043 S16.65 Maroh 1944 $16 .00 April 1944 $14 .50 12. 50 14. 50 13.65 15.00 13 .25 15.00 15 . 20 15 .75 12 . 25 14 . 25 13 .75 16 .00 13 .50 13 .55 13 .65 U : I~ ~:~ U .~:~ :W 12 .00 Antonio-April March 1943 1044 $14 .50 $14 .50 .~:~~ . ~:~ 13 .50 15.00 15 .00 14.50 12.00 14 .25 13 .65 14.50 have been effected will permit a reduction in the reserve stocks held for contingencies. The large amount of food in storage makes it desirable, furthermore, to accelerate the movement of foods at this time in order to provide storage space for the produce of the current season. It is probable, furthermore, that the current demand for foodstuffs by our military services and by our allies is smaller than anticipated since marine losses have been smaller than expected and since some of the territories recently regained by the United Nations are providing foodstuffs which the United States had planned to supply. The Office of Price Administration has warned, however, that the conditions which made the removal of many of the ration restrictions 011 foodstuffs possible may be temporary and that it may become necessary to r~turn all items to the ration list within a short time. In appraising the prospective food supplies for the civiliall economy, several conditions should be considered. Supplies of many grains are small in relation to the current high level of consumption, Although the large number of livestock on farms may be marketed in an orderly manner if ranges and pastures provide adequate feed, the development of unfavorable grazillg and feeding conditions might cause a sudden rush of livestock to market, resulting in a temporary oversupply followed by an acute shortage of meat. Spring planting and field work hav.e proceeded under somewhat unfavorable weather conditions thiS year and although at this time the prospects for most crops indicate average or better production, an unsatisfactory gro'Wi ing season might result in scarcities of various agricultura products, particularly grains. It should be observed, furthermore, that the supply of farm labor may not be adequate ~o meet extraordinary demands which might be placed upon It, such as extensive replanting in the event of floods or rapid harvesting in anticipation of early damaging freezes. If satisfactor1 MONTHLY BUSINESS REVIEW 8 to.favorable weather conditions prevail throughout the rest of increase in customer deposits and to draw down their balances t,hls season and unanticipated military needs do not arise, it is ' with correspondents for investment. h~ely that the supplies of most foodstuffs available for civilians INDUSTRY Will be somewhat greater in the future than during the past During March and April, representatives of the Federal ReYear, but changes in the fortunes of war or unfavorable weather serve Bank of Dallas interviewed executives of a large number COnditions could renew the need for widespread rationing. of war supply contractors in the Eleventh Federal Reserve DisFINANCE trict in connection with a study of recent industrial develop,Although the reserve balances of member banks in this dis- ments and the problems which might be encountered by industry tOCt have shown wide fluctuations from week to week, the during the reconversion period. Executives of 180 industrial daily average during each of the first four months of the cur- organiza tions in Dallas, Fort Worth and Waco, Texas, and in the rent year has been relatively stable at levels slightly below the principal cities of the north coastal area of Texas have contriball-time peak reached in December last year. During April, uted to the study. Since these organizations account for approxidaily average reserve balances amounted to $512,700,000 which mately 80 per cent of the value of war contracts received in this Was only about $3,000,000 below that in December, 1943. The district, it is believed that a study of their experience provides a relative stability of reserve balances seems to indicate that banks comprehensive and representative picture of the problems which are utilizing existing excess reserves to provide required reserves industrial plants in this area will encounter in shifting from war against the expanding volume of customer deposits. Excess re- work to production of civilian goods. Much of the information serves during April averaged approximately $92,800,000 as com- which was collected is confidential and a great portion of it canpared with $101,000,000 in December, 1943 and $141,000,000 not be released at this time because of restrictions as to the distribution of data concerning the war effort. A few brief comltl April, 1943. ments upon the apparent situation in several industries in the h The circulation of Federal Reserve notes of this bank, which ad increased only $15,000,000 during the first three and one- Eleventh District, however, will reveal some important develophalf months of'the current year, rose sharply between April 15 ments. Information concerning the operations and prospects of and May 15. Total circulation of $447,800,000 on the latter the major industrial classifications ill the Eleventh District is date .was $16,300,000 higher than a month earlier. This ex- now being assembled and analyzed. It is hoped that more detailed pansion was the largest during any 3 O-day period since last No- reports concerning the situation in specific industries can be Yember and was considerably larger than that which occurred released through this publication in the future. during the corresponding period of 1943. The gross deposits of weekly reporting member banks in leading cities of this district showed a further decline between April 12 and May 10 and the total of $1,799,000,000 on the latter date was $31,000,000 lower than four weeks earlier and $69',000,000 below the all-time peak reached at mid-February. DurlUg the four-week period, there were withdrawals of apprOximately $44,000,000 from Government accounts at these banks and $9,000,000 from interbank accounts. These with?rawals were partially offset by increases of $18,000,000 in adJusted demand deposits and $4,000,000 in time deposits. The funds to meet the deposit withdrawals were obtained principally through a decline in loans and investments of $13,700,000 and frOm reductions of $11,600,000 in reserve balances with the Federal Reserve Bank and of $2,300,000 in balances with correspondent banks. The commercial, industrial and agricultural loans of these banks showed a further increase of $3,700,000 between April 12 and MaY '10, extending the contraseasonal increase that has been in progress since the first of ,the year. This increase, however, was more than: offset by the declines in other classes of !oans. The principal decline occurred in loans for security tradIng which are now at the lowest level of the current year. During the four weeks ended May 10 these banks made a further reduction of $11,700,000 in their investments. Although there were moderate increases in holdings of Treasury notes and GOYernment guaranteed obligations, substantial reductions occ~rred in holdings of all other types of securities. The largest de~hnes occurred in holdings of Treasury bills and certificates of ltldebtedness. During the past year, the reporting banks increased their total loans by $47,400,000 and their investments by $142,500,000, or an increase in total loans and investments of $189,900,000, while deposits during the year increased by only $101,000,000. These figures indicate that the reporting banks have been Ill.OYing toward the policy of full investment. The banks have shown a tendency to utilize the excess reserves with the Federal R.es erve Bank to meet the increase in required reserves from the The Problems of Mechanical Reconversion The consensus among managers of plants which operated in this area before the war is that mechanical reconversion of their plants from production of war goods to production of civilian products will require only a short period. In the textile industry, reconversion will involve little more than minor changes in the layout of machinery and construction of new cutting tables and can be accomplished virtually overnight. In iron and steel products plants mechanical readjustments will likewise be accomplished quickly, although in some instances they may require a month to a month and one-half. Furthermore, it appears that plants in both of these industries are likely to reconvert gradually rather than suddenly, since it is probable that they will experience a gradual decline of their war business accompanied by a proportionate acceleration of their civilian business. Manufacturers of agricultural machinery began shifting back toward normal operations early in 1943, producers of oil field equipment began reconverting during the fall of 1943 and a partial "reconversion" also seems to have occurred in garment factories. On the other hand, the problems of mechanical reconversion seem likely to be extremely difficult in the aircraft plants, in the plants closely associated with them, and in the large ordnance plants. Most of these organizations and their facilities were established solely to perform war contracts. Their technicians have had only limited experience in manufacturing goods for the civilian market and the plants are poorly adapted to produce anything other than their present products. It seems likely that mechanical conversion of these plants would require at least six months and perhaps much longer. These plants, which are almost certain to close down for a relatively long time when their war contracts are completed or terminated and which may find it difficult to convert to production of civilian goods at all, employ in the aggregate approximately 11 0,000 people in Texas, or about one-fourth of the persons engaged directly in war work in the State. Mechanical reconversion does not appear to present a problem in either shipyards or chemical plants. Most chemical plants apparently can be diverted from producing one type of product 4 MONTHLY BUSINESS REVIEW to producing another with little change in equipment, and since shipyards seem limited to performing only the services of shipbuilding and ship repair, a "conversion" of them to other types of activity will not be feasible. Chemical plants probably will be a;bJe to accomplish the shift from war production to production of civilian products very rapidly if such a course seems desirable. The rapidity with which they make the shift, however, will depend on the volume of demand for their services. The chemical plants seem to have excellent prospects. Executives in the industry are optimistic concerning the ability of the industry to maintain employment close to the present high level of approximately 12,000 workers in Texas, including about 5,500 workers in: synthetic rubber plants. On the other hand, the prospect of the shipyards is considerably less favorable. Shipbuilding capacity on the Texas Coast has been expanded phenomenally since 1939. In 1939 there were 10 yards on the Texas Coast employing about 1,500 persons, while in: January this year, there were 25 yards employing 76,000 persons. All of the larger yards and most of the smaller ones are concentrated in four north coastal counties and the effect of their rapid growth upon the commercial businesses and community life in that small area has been extensive. The ultimate level of shipbuilding activity, therefore, is a matter of concern. Plans in the yards do not seem to have been crystallized as yet. Many of the facilities are Government-owned and the disposition of them has not been determined. Furthermore, those yards cannot develop a demand for their own products but must await the growth of a need for their services, which will depend upon the volume of international trade and a variety of international decisions which cannot be anticipated at this time. The smaller yards hope to continue in operation, building pleasure craft, barges and small commercial vessels and repairing craft which use the intracoastal canal, on which a large volume of traffic is expected. It seems likely, however, that most of the yards will close down in the event of a sudden termination of war contracts and it is quite probable that there will be a substantial reduction of activity in all of them. It is noteworthy that the Texas shipbuilding industry also received a great stimulus during WorldiWar I. Between 1914 and 1919 employment at Texas shipyards rose from approximately 200 persons to a little more than 6,000 persons, but between 1919 and 1921, 11 Texas yards went out of existence and employment in the 10 yards which survived declined to approximately 250 persons. A comparable readjustment in the Texas shipbuilding industry after this war would occasion a net discharge of approximately 72,000 workers, most of whom are employed in four north coastal counties. The Financial Problems of Reconversion The financial experience of the war contractors who were interviewed has not been uniformly favorable, but the majority seem to have improved their financial positions during the war. Exact quantitative data concerning the improvement in the financial position of the firms have not yet been completely analyzed, but it appears from an initial survey of a representative sample of financial statements that most firms which have operated on prime war supply contracts in this district have placed themselves in a more liquid position, have acquired title to additional fixed assets and have accumulated moderate reserves to meet the costs of reconversion. Nevertheless, the financial position of these organizations is not completely secure, for although most of them are in an: excellent position to meet "normal" demands for funds, very few would be able to meet the extraordinary demands for funds which might Ibe placed upon them during the period of recollversion. Several sources of demand for additional capital might arise during the period of reconversion. Funds will be needed to acquire inventories of raw materials, to replace depleted inventories of finished civilian goods, to ·settle the claims of subcontractors, to meet the expenses arising from mechanical reconversion and to finance the developments of the civilian market. Furthermore, if activity at these plants should continue at or near present levels aher war contracts are terminated, their normal working capital needs ffiight be considerably larger than during the war. Industrial production is currentlyabout 100 per cent above the level maintained in 1939. This expansion of activity has been accomplished without a proportionate increase in working capital, for it has been possible to operate with relatively small inventories of raw materials and finished goods. Furthermore, the Federal Government has met a large portion of the working capital needs of war plants by making advance payments against war contracts and by supplying inventories. In addition, since the gross income of most plants has increased rapidly during the war and the income tax on current earnings has, consequently, exceeded the tax due on income from the preceding year, deferring of income tax payments has provided large amounts which have been used to ·finance current operations. These conditions which have minimized the need for private capital are not likely to continue after war contracts are terminated OJ: completed, and it is possible, therefore, that during the period of reconversion and for a period thereafter the working capital needs of industries in this area and in other sections of the United States which must be supplied by private sources will be much larger than before the war. Funds will also he needed to finance acquisition of Government-owned facilities. The investment in war industrial facilities in this district now totals approximately $1,400,000,000 of which more than 70 per cent is Government-owned. Although many of these facilities will be held in a stand-by condition or dismantled, others will be sold to private interests. The rapidity with which satisfactory purchasing arrangements can be completed may be a significant factor in determining the duration of reconversion unemployment. Postwar Planning Postwar planning by industrial concerns in the Eleventh District does not seem to be progressing rapidly nor is extensive planning contemplated until tlle prospects of business are considerably clearer. As has been pointed out, mechanical reconversion is not expected to present serious problems except in aircraft and ordnance plants and will probably be accomplished quickly. Furthermore, many plants expect to !be able to accomplish reconversion gradually, effecting an orderly readjustment of operations as the volume of war contracting declines and civilian business becomes proportionately more important. A few firms seem to be developing specific postwar objectives. A number of plantS in the iron and steel products industry contemplate manufacturing and marketing a wide variety of products which were not manufactured in volume in this district prior to the war. They have acquired automatic machinery, have gained experience in using assembly line methods and mass production techniques, and have a labor force which is much larger and far more skilled than before the war. These developments are expected to place them in a position in which they can compete successfully with organizations outside this district. The textile and garment plants apparently will operate above prewar levels for some time after the war. Their managers look forward to a large dem a.l1d for garments and other textiles and expect their competitive position to be satisfactory as compared with organizations outside this district. As has been indicated, the plans and prospectS of the shipyards and aircraft plants seem to be very indefinite at this time, whereas the executives of the chemical plants are hopeful that the postwar period will provide a sufficiently large demand for their products to justify continued operation ot many of the chemical facilities in this district. MONTHLY BUSINESS REVIEW JUNE 1, 1944 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Fedet'al Reserve System) INDUSTRIAL PRODUCTION Industrial production and employmellt at factories and mines declined somewhat further in April, reflecting principally reduction in output of metal industries. The number of industrial wage-earners was about 6 per cent or 800,000 less than in November 1943. INDUSTRIAL PRODUCTION ~942. 1940 \944 1 940 1 942 I!'I . . Fedel'al Reserve Indexes. Groups are expressed in terms of points in the total index. Monthly flS'" Urcs, lat est shown are for April, 1944. WHOLESALE PRICES ,'".100 _ - ,_ _- ,___ ,u tt'" 1401---1:---1---.1----/----/-----1 '40 -_+_.....+ ___ , '201;, '~~ __ ~ 120 ____4-____+-__ ~ ____ "OTIC.II "'.. ,. ...... OOWT' 1939 1940 1941 1942 1943 ~ro The Board's seasonally adjusted index of output in manufacturing and mining industries was at 240 per cent of the 1935-39 average in April, as compared with 242 in March and 245 in February. Small declines in output of metals and metal products continued to account for most of the decrease in industrial production. Electric steel production decreased further in April to a level 5 per cent below the same month last year. Production of mDst nonferrDus metals declined, reflecting partly planned curtailments and partly the effects Df lubor shDrtages in mines and smelters. A further curtailment of aluminum prDductiDn was announced in May. Activity at plants prDducing munitions i,n the machinery and transpDrtation equipment industries declined sDmewhat in April. Production under the farm machinery program cDntinued to' increase and was reported at a r ate above the highest volume recorded in any peacetime year. Output of nDndurable manufactured gDDds showed little change in April. Activity at cotton mills was maintained at the level of recent mDnths, approximately 15 per cent belDw the peak level Df April 1942. As a measure to' increase productiDn, a 48-hour work week was ordered in the cDtton textile industry, effective May 14. The number of animals slaughtered cDntinued at an exceptionally high level in April, and effective May 3 most meat prDducts were remDved frDm rationing. Output of dairy products cDntinued to' rise seasDnally and supplies available fDr civilians increased. f Mineral prDductiDn was maintained in large vDlume in April. PrDductiDn D both bituminDus and anthracite cDal fDr the year through May 6 was apprDximately 5 per cent mDre than in the same period in 1943. Crude petroleum prDduction in April cDntinued at a level abDut 12 per cellt abDve a year agO'. Mine production Df irDn Dre showed a large seasDnal rise, reflecting the opening On April 10 of the seaSDn for lake shipments. no P'OOO'. DISTRIDUTION 1944 BUreau of Labor Statistics' indexes. Weekly figures, latest shown are fDl' week ending May 18, 1944. .. EMBER BANKS IN LEADING CITIES Department store sales declined in April and, after allowallce fDr usual seasDnal changes, were about 10 per cent below the high level which prevailed in the nrst quarter of this year. In the first half of May sales were maintained and were considerably larger than in the cDrresponding period Df 1943 . CariDadings Df railroad freight in April and the nrst half Df May were maintained ill large volume. Grain shipments continued to decline from the exceptionally high levels of Jalluary and February. Ore loadings increased sharply in April and were 60 per cent greater than a year ago. COMMODITY PRICES l0r---r-----/---. 20 v -- - - i , 30 r--::b"""=-4-.,--+--;tL--t----t----j 20 \0 Wholesale prices Df mDst cDmmodities showed little change from the middle Df April to' the thi.rd week of May. Prices Df farm prDducts and foods were slightly lower, while maximum prices Df some industrial commodities were raised. The CDst of living index advanced one-half per cent from mid-March to' mid -April, reflecting higher retail prices for fDods and furniture and increased excise taxes effective April!. BANK CREDIT nerna~d depo~it8 (ndj9~~ted) 1!:~cludel94U. s. a;vern .. tnent and interbank depDsits and eo\1ection items. ~o\'ernment securities include direct and guaranf ed issues. Wednesday figures, lates t shown are Or May 17, 1944. MEMBER BANK RESERVES AND RELATED ITEMS ~.- -.~~ / 20 .... _ ........... _..l. ......... --1. ~!!~~~"' . C=~'%N - Fr----' ' r---+.-,1L I, .,(...... 20 y' ,..." l°tJ~~+- 1 9!9 ~----,¥~_-+--~I' __+---,~q-_-+-_ "'0 1941 1942 194! I.j...-~-llo 1944 . i"'ednesday figures, latest shown are for Moy 17, 944. From the end Df the FDurth \\'Tar Loan Drive in the secDnd weele Df February through the middle of May, demand deposits of individuals and businesses at weekly reporting banks increased by about 3 billiDn dollars. Time deposits also increased appreciably. During the same periDd War lDan accounts at reporting banks declined by mDre thall 6Y. billiDn dDllars. HDldings of U. S. GDvernment securities by these banks declined by about 2 billiDn dollars and IDans contracted by mDre than 1 y, billiDn dollars. A large part Df the loan decline was the liqtlidatiDn Df credits extended during tlle war loan drive. Loans to' brokers and dealers arc now less than they were befDre the Fourth \'if ar LDan Drive and IDans to others fDr purchasing and carrying U. S. GDvernment securities are dDwn to' abDut pre-drive levels. During the same period commercial loans alsO' declined rapidly. Sales of U. S. Government securities by cDmmercial banks were paralleled by equivalent purchases by the Federal Reserve System. System holdings arc now about 2 y. billion dDllars larger than they were at the eltd Df the Fourth \'ifar Loan Drive. 11,ese purchases were made to' supply member banks with reserve funds needed to meet a cDntinued increase in currency and the growth in required reserves which resulted from shifts of deposits from Treasury war-loan aCCDunts to Dther aCCDunts. SDme Df these needs have been met by a decline in excess reserves. Sharp declines in excess reserves at the end of March and April were associated with unexpectedly large tax receipts and the building up Df Treasury balances at Reserve Banks. Currency in circulation, which increased somewhat less rapidly during the nrst quarter Df 1944 than in the same periDd last year, renewed its rapid outflDw late in April and during early May. In the four weeks ending May 17 the currency outflDw was over 500 milliDn dollars. MONTHLY BUSINESS REVIEW CONDITION OF THE FEDERAL RESERVE BANK (Thousands of dollars) May 15. May 15. 1944 1943 T~tal cash reserves. . .. .. . . .. . . .. . . . . . . . .•. . . . .• . . 5572.949 $607.033 Dlscou~ts for member banks. . . . . . . . . . . . . . . . . . . . . . . 250 225 Inqustrlal advances . ... . . . . . . .. . . . . . . . . . . . . . . ... . . 2 19 ~'i't~~ St.ates Government seourities. .. . . . . ..•. .. . . . 48~J064D5e 106' 45 8 o er Investtncots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . N N0ne ~otalbcarnin~ asscts ...... '.' . . . . . . . . . . . . . . . . . . . . . . 483.807 105.702 em cr ban rescrve deposits. . . . . . . . . . . . . . . . . . . . . 535.101 480.470 Federal Reserve Notes in aotual circulation.......... 447.485 292.132 BUILDING PERMITS April 15. 1944 $547.389 None 3 46O' O 07 None 461.000 526.380 431.884 CONDITION STATISTICS OF 33 MEMBER BANKS IN LEADING CITIES (Thousands of dollars) May 10. May 12. April 12. 1044 1043 1044 Total loans and investment• ... .. . ................ . $1.368.206 $1.178.441 $1.382.028 Totalloan~ .......... : . ........ :................. 331.244 283.840 333.205 CommorClal. mdustrlal. and allrlculturalloans.... . . 236.106 108.849 232.453 Loans to brokers and dealers lQ scourities.......... 2.062 2406 2.477 Othfr loans for purohasing or carrying seourities.... 27.324 17:914 32.404 Rca estate loans.......... .... ................. 10.713 18.737 19.826 Loans to bank... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02 151 101 All other loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.057 45 792 46.035 Totn~ investmcnts:.. . . ... ....... .. .. . . .. . ....... 1.037.062 804:692 1.048.733 U. . Treasury bJlIs . . .... ........ . ... ........ . .. 88.339 126125 92.983 ~. Treasury certificatcs of indebtedness.... .. . .. 264.213 19R:090 258.887 . . Treasury notes..... . .. . ... . . ... ........... 190.163 107.310 195.865 U. S. Government bonds. .......... ... .......... 410.064 357074 413.018 Obligations.g.uarauteed by United States Gov·t ..... 39.931 49:285 39.496 Othcr securities. . . . . . . . . . . . . . . . . . . .. . . . . . . ... .. 45.342 57890 47.584 Reserves with Federal Reserve Bank .... . . . .. . . .. . .. 291.300 278:433 302.857 galanoes with ~omest\o banks.. . . . . . . . . . . . . . •. .. . . . 190.693 291.075 202.035 .emand dcposlts-adJusted·. . . ... . ... . .... ....... 1.073.578 006003 1.056.970 T,mo dejloslts .. .. .. . .... .... ................ . .... 178.747 130'009 174.252 United States G~vernment deposits.... . . . . .. .• .•. .. 136.256 203:642 180.107 Interbank deposits..... . . . . . . . . . . . . . . .. . . . . . . . . . . . 41~,o04 44~J976 419.667 Borrowings from Fedoral Resorve Bank............. None None None ~Inoludes all demand deposits other than interbank and United States Government less cash Items reported as on hand or in process of collection. • g. DEBITS TO INDIVIDUAL ACCOUNTS (Thousands of dollars) April April Potg.ohange 1944 1943 over year Abilene ........ . ...... .. $ 16.738 17.489 - 4 Amarillo. . . . .. . .. . . . . . . . 39.623 44.276 -11 86.077 80.829 + 8 Austin. . . . ... . . .. . ... . . . Beaumont .. .. ....... . ... 64.501 50.963 - 9 Corpus Christi. . . . ... . .. . 46.961 43.730 + 7 Corsicana............... 5.830 7.730 -25 Dallas... ........... .... 509.363 483.987 + 5 EI Paso. . . . . . . . . . . . . . . . . 61.220 65.503 - 7 Fort Wortb . . . . . . . . . . . . . . 185.423 182.555 + 2 Galveston............... 41.432 41.009 + 1 Houston . . . . . . . . .•. . . . . . 600.232 464.138 + 8 Laredo.. .. . ... . . ... .. . . . 11.458 11.483 - t Lubbook................ 25.874 29.083 -11 Monroe. La..... .. . .. . ... 16.322 16.092 - 4 Port Arthur . . . . •. .... . .. 22.237 20.474 + 9 ROslVoll.N.M ...... . ... . 7.686 8.136 - 6 San Angelo.............. 12.709 15.011 -15 San Antonio . .. . . .. .•. . . . 142.357 138.991 + 2 Shreveport. La.. .. .. .•... 73.200 69.669 6 Texarkana·.............. 17.457 19.236 - 0 Tucson. Ari..... . ... . .. . . 27.735 26.061 + 6 8 20 Wiohita Falls. . .......... 23.886 26.778 - 7 + y~~~: :::::::::::::::::: ~~:m ~~:~~~ 2: Marob Potg.ohange 1944 over month 17.016 - 2 42.241 - 6 103.455 -16 53.565 + 2 44.048 + 4 6.687 -13 517.331 - 2 64.607 - 6 105.958 - 6 43.780 - 6 564.376 -10 11.448 + t 28.959 -11 18.688 -13 25.034 -11 8.584-10 14.003 - 9 143.081 - 1 81.602 -10 18.496 - 6 29.284 - 5 ~~:~~~ 27.696 =~ -14 Total-24 oities .......... $1.974.304 $1.022.034 + 3 $2.008.886 - 6 ·Includes the figures of two banks in Toxarkana. Arkanall!. located in the Eigbth Distriot. tChange less than one·half of one per cent. GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS (Average of daily figures-Thouaanda of dollars) Combined total Reserve oity banks Country banks Gross demand April 1942 .......... $1.803.410 April 1043 . . ...... . . 2.718.086 December 1943 .... . ..... 3.285.642 January 1944 .......... 3.242.366 February 1944 . ......... 3.277.127 Marcb 1944 .......... 3.320.227 April 1944 .......... 3.202.262 Time $227.515 234.791 263.522 270.576 274.586 277.705 284.538 Gross Gross demand Time demand Time $1.033.505 $127.278 $ 769.815 $100.237 1.482.955 138.031 1.235.132 96.760 1.731.039 160.223 1.568.704 103.299 1.699.310 166,973 1.648.056 104.603 1.608.420 169.105 1.578.608 105.481 1.725.356 171.392 1.594.870 106.313 1.709.276 175.621 1.582.977 108.918 SAVINGS DEPOSITS April 30. 1944 Beaumont ........... ... . Dallas ... . .. ........... . EI Paso .............. . . . Fort Worth ............ . . Galveston ...... . ...... .. Houston ................ . Lubbook .. ............. . Port Arth ur ............ . Ban Antonio ............ . Shreveport. La ...... . ... . Waco .................. . Wichita Falls •.... .. ..... All other ............... . Total ...... .... . Percentaae ohange in Number of -Number of Amount of ~vings reporting savings savin)!. April 30. banks depo"itors depOSits 1043 3 11.266 $ 6.267.543 +19.0 98.076 39.202.751 +33.8 8 23.491 12.068.353 +42.6 2 3 34.829 18.474.843 +30 .9 4 20.631 13.078.251 +22.6 10 82.521 42.398.030 +21. 8 2 852 474.726 + 3.4 2 6.259 3.661.153 +20.2 6 30.874 26.135.250 +24.1 3 28.276 15.330.895 +26 .8 3 7.976 6.258.404 +11.6 3 6.591 3.620.99a + 8.6 68 62.251 31.758.266 +15.1 106 403.682 $216.624.472 +24.4 epo~~ Mnroh 31. 1944 + 2.6 + 3.4 + 4.2 + 2.8 + 2.0 + 2.4 -.1 + 2.5 + 2.8 + 3.4 + 1.8 +.4 + 1.9 + 2 .6 Percentsge Percentage ohange valuation from Jan. 1 to Apr. 30.1944 cban~e ~-..:.....---~--..:.....---~-~~-...:..::..:...:.... valuation No. Valuation Apr. 1944 Mar. 1043 No. Valuation from 1948 Abilene . ... ..... . 24 $ 12.380 +104 + 10 110 $ 161.476 +506 86 94.606 01 - 60 244 363.917 82 Amarillo . ... ... . . Austin .. ... ... . . . 107 43.309 + 18 - 25 367 150.239 + 29 Beaumont ....... . 127 102.873 88 +110 402 337.678 - 88 Corpus Christi ... . 125 130.880 - 64 + 34 480 484.742 - 46 Dnllas ......... . . 725 708.292 +404 + 63 2.468 2.822.250 +380 EI Paso . . ....... . 99 194.301 +316 +382 285 299.062 65 Fort Worth ...... . 308 455.880 - 23 + 22 070 1.286.513 + 5 Galveston ....... . 64 22.863 + 57 - 61 357 290.376 + 8 Houston .... ... .. . 220 368.057 +112 - 34 879 1.861.529 - 61 Lubbock .. . . .. .. . 106 64.937 +484 + 64 389 164.877 + 180 Port Arth ur . .. .. . 68 36.646 + 179 + 10 173 116.632 + 185 San Antonio ..... . 1.100 387.814 +124 + 2 3.164 1.410.894 +133 Shreveport. La ... . 136 63.565 68 - 48 601 268.548 + 152 Waco ........... . 101 239.020 + 37 +109 321 610.787 75 Wiohita Falla .... . 27 22.658 - 60 - 82 136 92.646 + 89 April 1944 + + + + + Total. . . .. . 3.403 $2.948.780 + + 51 + 16 - 11.316 $10.609.159 + 2 VALUE OF CONSTRUCTION CONTRACTS AWARDED (Thousands of dollars) April April 1044 1043 Eleventh Distriot-total.. . $ 13.640 $ 37.388 Residential . . . . . . . . . . . . 2.830 8.026 All othor. . . . . . . . . . . . . . 10.810 29.357 United States·-totnl..... "179.286 303.371 Residential. ......... ,. 37.772 70.434 All other. . . .. .. . . .. . . . 141.514 223.937 ·37 stntes cast of the Rooky Mountains. SOURCE: F. W. Dodge Corporation. Maroh 1944 S 22.206 6.428 16.783 176.383 35.164 141.219 Jan. 1 to 1044 S 61,459 14.392 47.067 662.163 138.794 613.359 April 30 1043 S 205.799 49.362 156.437 1.387.247 356.327 1.031.920 CRUDE OIL PRODUCTION-(Barrela) April 1944 Inorease or deoreal!e in dally averalle produotion fro~ Total Dailyavg. produotion Maroh 1944 produotion April 1043 North Texas . ......... . ... .. . 730 7.052.250 235.076 + 9.160 West Texas .. ............... . 11.242.050 +32.770 374.735 +159.978 East Texns ... .... ....... ... . 14.690.160 + 6.563 489.672 + 60.802 South Texas . .. ............. . + 2.088 8.803.950 293.466 +106.470 Texas Coastal . ... ........... . 16.560.050 + 4.713 618.668 +176.803 Total Texas ........ . New Mexico ................ . Norlh Louisiana ............. . 67.348.450 8.874.650 2.276.850 Total Distriot... . . . .. 62.999.050 ---+622.213 1.911.616 112.488 76.895 2.099.998 + 16.726 - 12.795 +525.144 SOURCE: Estimated from Ameriean Petroleum Institute weekly reporta. - +45.894 389 _ 547 - +44.458 - WHOLESALE AND RETAIL TRADE STATISTICS Percentage change in Net sales Stockslr1944 from April 1944 rom Jao. 1 to March AEr.30. 1944 April Maroh 1944 1943 1044 rom 1943 -1 - 0 +14 +11 -15 -t +17 =1=21 -10 +11 13 +21 -7 +8 +12 =l=1~ -17 -7 -6 - 1 =l=2~ -2 +'7 Retail trade: Departmont stores: Total 11th Dist .... Dallas . .. ......... Fort Worth .. .... . . Houston . . ... . ..... San Antonio . . ..... Shrcveport. La .. . .. Othcr oities ........ Number of re¥,ortin g ums 48 7 4 7 6 3 22 April April 1948 +10 +16 +4 +12 +7 +17 +7 Retail furnituro : Total 11th Dist. ... Dallas . ........... Fort Worth ...... .. Houston ... .. .... .. San Antonio .... . . . 63 8 3 10 3 -2 +9 -11 +1 -6 -6 -9 -16 -10 -11 Independent stores:· Arizona . .......... New Mexioo ....... Oklahoma ......... Texas ............. 163 141 378 923 +6 +1 +7 +5 -2 +2 -3 :ra -8 -13 -30 .:..:a, -2 t~ :ra +4 +3 +8 +9 +9 Wholesale trade:· Automotive supplies 4 +40 - 1 +33 Drugs (inol.liquors) 0 +19 - 9 +ii; :'::2 Groceries.......... 20 + 8 - 7 + 0 +'7 _2 Hardware. . ....... 10 + 6 + 3 6 + 1 No ohS' Surgical equipment. 6 +21 - 6 24 - 1 Tobacco'" products. 4 +11 - 8 16 .... ·Compilod by United Statcs Bureau of Census (wholenale trade figures prelimiaary). tStocks end of month. tChange less tban one·half of one per c~nt. i INDEXES OF DEPARTMENT STORE SALES AND STOOKS Sales \1935.1039 = 10~ Wit lout seasonal a justmont ........ With seasonal adjustment .... ....... Stooks (1923·1925 = 100) Without seasonal adjustment ... .. ... With seUBonal adjustment ........... April 1944 228 282 Maroh 1044 227 247 99 96 101 98 February 1944 200 241 97 101 April 1948 193 196 91 88
