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Monthly Business Review
Or
THE
FEDERAL
RESERVE
BANK
OF
DALLAS
~~~~~~==================================================================~==========~======
Volume 25, No.1
Dallas, Texas, March 1, 1940
~~!~i;~prniB'::~~~~~ ;~~:.~ Mar. 1
===================================================~~=====
DISTRICT SUMMARY
and 8 per cent greater than a year ago. Seasonal declines
Business and industrial activity in the Eleventh District from the preceding month occurred in the sales of drugs,
~vas fairly well sustained in January, after allowance is made hardware, electrical supplies, and tobacco and tobacco prodor customary seasonal changes. The adjusted index of de- ucts. Dealers in surgical equipment likewise experienced a
part,ment store sales closely approximated the high levels reduction in sales. These declines, however, were virtually
attaIned in January and December, ,1939, and distribution of offset by increases in the business of grocery and machinery
Illerchandise through wholesale channels continued some- and equipment firms. While the demand for tobacco and
what higher than a year ago. The value of construction surgical equipment was below that in January a year ago,
Contracts awarded during January was below that of the all other reporting lines of trade participated in the expanPreceding month and the same month last year, but was sion over a year ago, the gains ranging from 6 per cent for
Considerably higher than the January total for any other groceries and hardware to 26 per cent for machinery and
rece~t year. Although the productien of crude petroleum equipment. Inventories of merchandise at reporting firms
dechned from December to January, it continued above that were increased seasonally in January and at the close of the
o~ January last year. Refinery operations exceeded those in month they were about 11 per cent greater than on that date
¥ther comparative month. January cotton consumption at in 1939. The rate of collections in January on accounts outeXas mills was larger than that for any month in recent standing at the beginning of the month was approximately
iear~. Total loans at weekly reporting member banks in the same as in the corresponding month last year.
hadIng cities showed a noticeable seasonal decline during
The number and liabilities of commercial failures in the
t e first six weeks of 1940_
Eleventh District increased moderately from December to
The agricultural and livestock industries were affected ad- January, but were sharply lower than in the corresponding
versely by the low temperatures prevailing during much of month last year when liabilities of defaulting firms were the
January. The severe weather caused a shrinkage in livestock largest for any month since the summer of 1935. According
and considerable damage to crops and range feeds. On the to Dun & Bradstreet there were 23 insolvencies in January,
ot~er hand, moisture conditions have been improved by the with a total indebtedness of $286,000.
raIns and snows received thus far this year. The heavy rains
AGRICULTURE
t~at fell over a large portion of the district after the middle
Weather conditions during January had varying effects
o February were especially beneficial, since they afforded upon the agricultural and livestock industries in the Eleventh
~uch needed relief in some areas where the moisture defi- District. Rains and snows over the major portion of the terridlency Was pronounced, aided the recovery of crops that were tory improved surface moisture conditions, although they
atnaged by the January freezes, stimulated the growth of were insufficient in many areas to offset the accumulated
gre~n range feeds, and left the soil in good condition for deficiency in subsoil moisture. Sub-freezing temperatures,
SPl'lng plowing and seeding operations_
which extended to the Lower Rio Grande Valley, pulverized
the soil and placed the ground in good condition for spring
BUSINESS
Consumer buying at department stores in principal cities plowing and planting operations, but caused' a shrinkage in
~ the Eleventh District continued very active in January. livestock and damaged considerably grain, citrus and truck
crops and green range feeds.
thepa~tment store sales, which had increased in December to
The winter wheat crop in the Texas Panhandle apparently
d e ~Ighest level for any month in more than ten years,
echned by about the average seasonal amount in the initial escaped serious injury from the low temperatures in JanllI~nth of 1940; as a consequence, this bank's seasonally uary. Top growth was retarded, but a heavy snow cover proadjusted index of sales showed little change from that re- vided protection against freezes and aided in the developCorded in December. The dollar value of sales in January ment of al good root system. In some areas of the State where
about 3 per cent larger than in the corresponding month grain crops received a poor start and were not protected by
~939, but the increase was accounted for by an extra snow, damage was extensive, particularly to oats. For the
USIne~s day in January this year. Business during the month State as a whole, the condition of grain crops on February
as stImulated somewhat by extensive price reductions and 1 was far below the average for that date.
c earance sales which were featured by merchants in an
LOANS AND INVESTMENTS OF REPORTING MEMBER BANKS
o..EVENTH FED£RAL RESERVE DISTRICT
effort to clear shelves of winter merchandise. Preliminary
N5 or DOLLAA.!
W£DN£..5OAV flGlAES
t,,411.l.1ON.1 01
reports indicate that sales during the first half of February
Were about the same as those in the corresponding two
'~eeks of 1939, but on a seasonally adjusted basis, they were 300
300
a a somewhat lower level than in the preceding month.
r-..~
~ i\ TOTAL INVESTMENTS
JJj-LOANS
~
~ I I 1 1 1 1".-:: 'r-bStocks of merchandise at reporting firms were reduced by
~ Out the average seasonal amount in January and at the """
~'::~-+-UJ-~1"I-r
c ose of the month they were about 7 per cent greater than
rLlJ,,",I'NJuSTU
In that date last year. Collections declined seasonally during 200
~ DI~ SOe~.JTIONS
anuary, but they were well in line with those in the corre'I
~~II
sPonding month of 1939.
.k+--I
I '~I .~
D and
I~
II
Y
fi en:
for merchandise during January at wholesale
I>W, ~~
,..,t ~s In seven lines of trade operating in the Eleventh Dis-
wr
b
1
/,i'1;:
-r
J IJ
iriT~{}lli
Jill
~,
Ig391a)6---
l1et Was in about the same dollar volume as in December
1 .111
Lrr1f
I]
103&---
I~
100
100
J'
.........
JJ
...
30NO
JFMAMJ
J
•
SON
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
0
MONTHLY BUSINESS REVIEW
2
In the commercial vegetable and citrus growing areas of
south Texas the extent of the damage to all crops resulting
from the freezes has not been fully determined, but it is
apparent that crop losses were heavy. Tender vegetable crops
were virtually destroyed and the production of beets, cabbage, green peas, Irish potatoes and spinach will be smaller
than earlier expectations. The development and growth of
those vegetable crops that appear to have escaped serious
injury has been retarded, and harvesting will be somewhat
later than usual. In the Lower Rio Grande Valley hardy
winter crops suffered some damage, but cloudy weather
during the period of low temperatures, together with the
gradual moderation from the extreme temperatures, prevented heavy losses. Some acreages of truck crops for spring
harvest will be replanted.
Citrus crops in the Lower Valley suffered severe damage,
but the loss of trees is believed to be small. According to
the Department of Agriculture, approximately 35 per cent
of the citrus crops remaining for harvest was destroyed,
which indicates a physical loss of 2,800,000 boxes of grapefruit and 280,000 boxes of oranges. Moreover, large quantities of grapefruit affected by the freezes were shipped to
canneries during the cold weather for immediate utilization.
The indicated production of grapefruit and oranges in Texas
on February 1 amounted to 12,400,000 boxes and 2,450,000
boxes, respectively, which compares with an actual harvest
of 15,670,000 boxes of grapefruit and 2,815,000 boxes of
oranges from the 1938 blooms.
The severe weather also caused a marked decline in the
condition of livestock ranges, particularly in the southern
half of the district where winter grass and weeds were susceptible to damage from freezing temperatures. Prospects for
grazing on grain pastures during the remainder of the winter
is poor because of the set-back in growth these crops sustained in January. Despite the deterioration that occurred in
January, the outlook for spring range feeds is generally
good, since with the improved moisture conditions the new
crop of range vegetation should make rapid growth. The
condition of livestock declined in January, but animals were
in good condition to withstand the cold weather and losses
were very light, being limited largely to young calves and
Rotail trade:
WHOLESALE AND RETAIL TRADE STATISTICS
r - - - Peroontage ohango in: _ _ _ _ Ratio Jan. oolleotions
Net Illlies
Stooks·
to aocounts outstanding January 1
Jan., 1940 from
Jan., 1940 from :,....----~
January Decomber January Decembor
Instal1989
1989
1989
1989
Regular
mont
D'¥'~[!F{lttsifi~~s.: . .... + 8.1
+
- 53 .2
- 1.1
41.0
15. 1
6.5
-50.S
.3
39.6
16.5
- 3.1
Dallas..............
5.1
36.3
-62. 7
10.4
- 6.1
+10.9
4.9
Fort Worth..........
-51.6
-13 .8
40.8
+13.8
Houston .... .........
2.4
46.4
-49.9
13.7
+19 .3
6.7
San Antonio.... .. ...
.6
-55.8
43 .6
19 .7
+13.4
Other oities.. .. .. .. .. + 1.1
+1.4
Indopendent stores:t
ArIZona............. +10.2
......
Oklahoma........... - 5.0
-44.0
Now Mexico ...... .. .
~8'f9
Texas .... ...........
.
Wholellllie trado:t
Maohinery, equipment &
supplies (exoopt olectrical) ............ ... +26.1
+ 8.8
..
i2 .' 0' +....4.4
88.9
Grooeries.............. + 6.8
+ 6.4
80.2
Drugs ................. +15 .2
- 10.1
7.2
+ 2.0
65.7
Hardwaro............. + 5.6
- 8.7
+13.6
+14.8
Eleetrioalsupplics...... +24.2
-14.6
-82. 1
....
Tobaeooandproduots ... - 6.0
Surgioal oquipmont ..... -20 .0
- 15 .2
+3(4
:ril:i
35:2
.Stocks at 01080 of month. tCompiled by United States Dopartmont of Commeroe.
+
+
+
+
+
++ g
t"
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1923-25 average = 100)
With seasonal adjustmont
Without seasonal adjustment
,
Total Eloventh Dist ..
Dallas .. ............
Fort Worth ........ ,.
Houston.............
San Antonio.........
Sales-Jan.
1940
1939
112 .6 113.9
110.2 m:~
111 .4
95.4 101.0
83.8
86.3
Sales-Jon.
1940
1989
85.6
86.6
94.8
93.6
82.4
81.4
84.9
89.9
76.3
78.5
Stoob-Jan.
1940
1989
60.7
56.7
59.4
59 .5
56.6
48.4
40.5
44.4
57 .0
52.1
lambs. Heavy supplemental feeding was general. According 1
to the Department of Agriculture, the supply of grass-fat
cattle and sheep for spring marketing should be fairly large '
in view of the generally favorable outlook for early spring
grazing. Contracting for spring delivery, however, has been
light thus far.
FINANCE
Following a recovery in the first half of January from a
seasonal contraction in December, daily average reserves of
member banks carried with the Federal Reserve Bank of
Dallas showed little change in the subsequent four weeks,
During the first half of February reserves averaged about
$218,000,000 daily, a total which was only slightly under
the all-time high recorded in the first half of January and 21
per cent greater than that for the corresponding period of
1939. Required reserves likewise have been relatively steady
since the first of the year, and as a result excess reserveS
have been maintained at a level about 60 per cent of reo
quired reserves. Earning assets of this bank increased
slightly during the month ended February 15, but on that
date the total was $12,200,000 less than a year ago due
chiefly to smaller holdings- of United States Governme,nt
securities. Federal Reserve notes of this bank in actual Clr'
culation reflected a further seasonal contraction between
January 15 and February 15, but on the latter date the total
was $3,200,000 greater than a year earlier.
Total loans at weekly reporting member banks in this dis'
trict declined $11,600,000 during the first six weeks of 194,0,
reflecting the liquidation of commercial and industrial loans
that usually occurs after the turn of the year and a con'
traction in "all other" loans, a substantial portion of which
consists of personal loans. Although the net decline in loaDS
thus far this year has been much more pronounced thap
that in the corresponding period of 1939, total loans on
February 14 were still $31,300,000 greater than a year
earlier. The investments of reporting banks showed little net
change during the first six weeks of 194,0, which contrasts
with a reduction of $25,500,000 in the corresponding period
of 1939. Security holdings at the middle of February were
in about the same volume as on that date last year; whereas,
at the beginning of 1940 they were $27,000,000 smaller.
Total loans and investments on February 14 this year were
$10,700,000 less than six weeks earlier, but $31,000,00 0
greater than a year ago.
Following a marked decline in the last half of December,
occasioned by the usual withdrawal of funds over the year·
CASH FARM INCOME
(In thousands of dollars)
,-----Texos ---v--Eleventh Distriot·----Sourco
19a9
1938
1987
1939
1938
1937
Cotton.. ...... ... ..
1120,862 $136,951 $212,483 1193,501 $210,900 129~'5~~
Cottonseed. . . .. .........
17,538
19,982
32,092
28,496
31,170
4 '766
All grainst...............
36,034
38,521
54,892
90,640
92,764
12~'518
~....................
~
~
~
~
Wheat..................
All vegetablest ... . . ·. · .. ·
Irish potatoes.. .. . . . . .. . .
Truok oropo............. .
Fruits and nute.. ........
17,911
23,466
1,046
20,519
11,530
18,140
21,431
1,350
17,985
10,569
33,914
29,429
2,569
24,366
15,222
50,950
46,060
3,359
37,556
20,795
51,945
fa'296
48,088
4'925
3,853
'a99
33,006
~~'875
18,962-.:.-.:
~
~
Total all crops ..... . ..... 5223,515
Livestock§............... 218,713
Govcrnment payments.. .. 110,755
1239,945
217,391
68,814
5355,548
243,922
36,010
5423,821
405,617
170,189
1439,591 5591,~~
389,075 426~'il2
113,245-.:.-.:
Total farm ineomo .... $552,988 8526,150 $635,480 S999,627
SI,080,~83
·Eloventh Distriot figures represent combined totals for tho five states wholly or
attached to tho Eleventh Distriot. tInoludes ocrn, wllCat, oots, barley, rioo and grain so Iivc~Inoludes Irish and sweet potatoes and truok orops.
§Inoludes rooeipts from tho sale
stook and livestook produete.
SOURCE: United States Dcpartment of Agrioulture.
$o4l.01I
FORT WORTH LIVESTOOK REOEIPTS
(Number)
January
January Change over December ChBngCtCh'or
1Il0o
year
1940
1939
1939
41,595
48,488
-6,893
34,813
Cottlo ........ .... ...... .
+ O,!~~
23,075
28,263
23,502
Oalves ............ . . . .. .
-5,1 88
:;:: 8,081
39,649
31,085
31,568
+8,614
+14,1 41
38,637
45,129
-6,492
24,496
~he~p:: ::: :: :: ::: :: :::::
8
MONTHLY BUSINESS REVIEW
end, adjusted demand deposits at reporting banks increased
~harply during the first six weeks of 1940 and on February
fl4 they were at a newall-time high. Interbank deposits have
Uctuated widely thus far this year, and at the middle of
February they were $2,300,000 smaller than six weeks
earlier. Total deposits on February 14 were $22,500,000
greater than at the beginning of 1940 and $108,000,000
~ove those of a year ago. The net expansion in deposits and
t e contraction in loans and investments since the turn of
the year has augmented greatly the volume of idle funds held
y these banks, most of which have been placed on deposit at
other commercial banks in the United States.
INDUSTRY
Low temperatures prevailing during much of January
retarded construction activity in the- Eleventh District and
apparently caused a delay in the letting of some contracts.
~evertheless, the value of contracts awarded was maintained
In relatively large volume, the total for the month being only
lnoderately below the average monthly value of awards for
1939_ Contracts let for non-residential building expanded 20
per cent from December to January, and public works conitruction initiated during January, although 16 per cent
OWer than in December, was 50 per cent greater than the
}939 average. Following a sharp rise in December, awards
.or public utility construction declined by about 50 per cent
In ~anuary, but continued much higher than a year ago.
~esidential building followed the downward trend that had
een in evidence during the preceding four months. The
value of awards for this type of construction was 30 per
Cent smaller than in January, 1939, and below that for any
dthe~ month in almost two years. The contraction in resit enbal building during recent months has been due largely
seasonal factors and to a reduction in awards for slumc ear~nce projects.
S DatIy average production of crude petroleum in the United
dtat~s, which had risen to an all-time high level in December,
echned in January due to a noticeable contraction in outPbf i~ the Eleventh District occasioned by reduced allowes In Texas and New Mexico. In comparison with January
ast year, petroleum production in this district was only 2
per cent higher; whereas, in the United States it was up 10
fer cent, reflecting chiefly the increased output in Illinois.
the latter State, daily average production amounted to
~ .out 351,000 barrels in January this year as compared
D~~ 137,000 barrels in the corresponding month of 1939.
I' bhza~ion of crude petroleum during January was well in
~Ue wlth production, and in consequence stocks of crude
f showed little change over the month, the total at the end
the . period being 13 per cent lower than a year ago.
l' olloWIng declines in the preceding two months, crude oil
i UjB to refinery stills in the United States increased slightly
~ a~uary, exceeding those of a year ago by a substantial
t argin. The expansion in refinery operations occurred simul~nious~y with a further decline in the consumption of motor
c e, wuh the result that gasoline stocks continued to inpre as e. On February 3 inventories of this product were 10
a:l' cent greater than five weeks earlier and were higher than
fn an~ time during 1939. Heavy consumption of gas and
shel otIs during January resulted in a continuation of the
ar arp downward trend in stocks of these products, which
D~urrently considerably below those of a year ago.
enthlSc~veries of new supplies of crude oil in both the Elevrat DIs.trict and the United States continued at a high
1P e dUl'lng 1939. According to data compiled by the Oil
Jaeekly , the proved petroleum reserves in this country on
to~lbY. 1, 1940, amounted to 18,750,000,000 barrels, this
Cr a eing the highest of record and representing a net inease of about 8 per cent over that a year earlier. During the
1
i
b
F
past five years the amount of oil discovered has been about
double the amount produced. For several years Texas has
been responsible for a large share of the annual increase in
petroleum reserves. During 1939 the net increase in reserves
in this State amounted to 427,000,000 barrels, or 30 per
cent of the nation's total, and exceeded that of any other
state, despite the extensive discoveries in Illinois. The known
CONDITION OF THE FEDERAL RESERVE BANK
(In thousands of dollars)
Feb. 15,
Feb. 15,
IMO
1939
Total cash reserves . . . . . . . . . . . . . . • . . . . . . .• . . . . . . .. S248,535
S204,187
Discounts for member banks........ .... ...... .. ...
09
170
Other bills diseountod... .... .... .... . .............
161
None
Industrial advances... . . .. . . . . .. .. . . . . . . . . . .. . . .. .
483
021
Bills bought in the open market .. ....... .• •. .. . .• . .
Nono
16
United States Government securities. . . . . . . . . .. . . • . .
94,362
106,419
Total earning assets . . . ...... .. .. .... .......... ...
95,005
107,232
Member bank reserve doposits .. .. . .. . .. . .... . .... .
217,582
178,503
80,431
77,208
Fodoral Resorve notes in aotual eiroulation ...... . . . .
Commitments to make industrial advances. . . . . . .. ..
None
44
Jan. 15,
1940
S256,177
4
151
487
None
94,302
95,004
222,741
81,386
None
CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In thousandB of dollars)
Feb. 14,
Feb. 15,
Jan. 10,
1940
1939
1940
Total loans and investments. . .. .. . . .. .. .. . . .. .. . . . S537,120
S606,428
S548,172
Totnlloans. . . . . . . . . . . . .. .. . . . . . . . .. . . . . . . . . . . . . .
275,186
243,933
283,965
Commercial, industrial and agrioulturalloanB. .. ...
182,522
100,243
188,170
Open market paper ... .. . , . .... . . . . . . .. . .. . .. . . .
2,040
833
1,749
Loans to brokers and dealers in seourities . ... . .. .. .
2,892
2,943
3,033
Other loans for purohasi ng or carrying Beeurities ....
13,9oa
14,462
14,145
Roal estato loans ...................... . ........
21,921
19,373
22,416
Loans to banks.. .... . .. . .. .. .. .. .. .. .. .. .. .. .. .
240
224
230
All other loans. . . . . . .. . ... . . . . . . . ....... . . . . . . .
51,602
45,855
54,216
United States Government direct obligations.. . . ... . .
153,167
161,186
163,132
Obligations fully guaranteed by United Stntes Govt. .
61,936
46,089
63,690
Other securities. . . . .. . . .. . . . . . . . . . . .. . . . . . . . . . . . .
66,837
66,221
67,479
Resorves with Federal Reservo Bank .. .. . . . . . .. .. .. .
141,473
107,938
138,622
Balances with domestic banks... . . . . . . .. . . .. .. . •. ..
294,248
249,590
261,9oa
Domand deposits-adjustcdo . . . .. .. .. .... . . .. .....
474,822
430,472
459,494
Time deposIts ... .. . . ... . . .. " . . . . . . .. . . . . . . . .... .
135,788
134,499
137,122
United States Government deposits . . .. .. .. . . .. • . . . .
31,016
33,894
32,089
Interbank deposits.. ... ... .. .. .... .. .. .. . .. .. .. .. .
282,547
217,170
270,059
Borrowings from Federal Resorve Bank . . . . . . . . . . . . .
None
None
Nono
"Inoludes all demand deposits other tban interbank and United Stntes Government, lellS
cash items reported as on hand or in the IlrOeess of eo\leotion.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(Avorage of daily figures-in thousands of dollars)
Combined total
Resorvo oity banks
Country banks
January,
January,
September,
October,
November,
Deoomber,
January,
Gross
demand
1088 ... ... . . . S1,116,242
1939 .... .... .. 1,192,054
1939 ...... .... 1,266,634
1939 .... .. .... 1,305,705
1939 .. ........ 1,340,118
1939 .. . ....... 1,344,386
1940 .......... 1,340,235
Timo
$215,115
223,681
231,820
231,303
232,340
234,145
233,470
Gross
demand
S608,648
672,652
729,663
760,456
777,046
777,931
775,643
Time
S119,174
123,805
128,084
127,667
128,081
130,299
129,436
Gross
demand
S507,694
619,402
525,981
545,260
563,073
666,455
564,592
Time
S 95,941
99,876
103,736
103,796
104,269
103,846
104,035
DEBITS TO INDIVIDUAL ACCOUNTS
(In tbousands of dollars)
January
January Potg.obango December Petg.ohange
1940
1989
over year
1939
over month
$ 8,671
+ 6.6
9,917
Abilone .. .. ..... ... .... . S 9,050
- 8.7
36,684
31,487
+ 16 .5
39,330
Austin .. . .. .... .. .. .. . ..
- 6.7
25,262
23,106
+ 9.3
26,738
Beaumont ...... . . • . . . ...
- 5.6
3,546
3,477
+ 2.0
4,220
Corsicana . ... . ...• . .....
- 16.0
277,437
246,274
+12 .7
326,097
Dallas . . . .. .. ...... .... .
- 14.9
31,518
30,220
+ 4.3
35,877
- 12 .1
EI Paso .... . ..... .. .. . ..
89,184
88,877
+ 6.3
104,386
Fort Worth ... . . .. .... . . .
- 14 . 0
28,396
28,403
0.0
29,689
Galveston ... . . . .. . . .. . . .
- 4.4
267,617
230,312
+11.8
288,203
Houston ........ .. ...... .
- 9.1
9,773
9,266
+ 6.5
10,723
Port Arthur . .. . ...... .. .
- 8.9
4,255
4,104
+ 2.2
5,oa9
Roswell. . .. ... . ... . .... .
- 24 .5
70,446
67,880
+ 3.8
78,608
Snn Antonio .... .... .. . . .
- 10.3
47,817
46,205
+ 6.8
54,966
Shreveport ......... .... .
- 13 .0
7,272
7,160
+ 1.6
9,328
Texarkanao .. .. .. , ...... .
- 22.0
12,363
11,965
+ 3.8
13,159
Tueson .. .. ..... ... ... .. .
- 0.1
12,143
+ .2
13,621
12,160
- 10.7
14,177
- 1.3
16,926
W~~~ :: : :: ::: ::::::::: :: 13,996
- 17 .8
16,057
14,149
+13 .5
17,997
Wichita Falls ....... .. .. .
-10 .8
- -- --- - --
Totol.. ........ . $952,728
1871,776
+ 9.3
S1,080,384
-11.8
°Inoludes tho figures of two banks in Texarknna, Arknnsas, looated in the Eighth District.
SAVINGS DEPOSITS '
January 31, 1940
Number of
ro~orting
Beaumollt .......... . . .. .
Da\las ... .. ..... .. . . ....
EI Paso . .. ... .. .. .. .... .
Fort Worth ... . ......... .
Galveston ...... .. .. .... .
Houston .... . . . . ... . .... .
Port Arthur .. . . .. .......
San Antonio ... . "" .... .
Shroveport .. . .... .......
Waco .. . ... . .. . . . .. .. .. .
Wiohita Falls ........ ....
All other . .... .. .. .... .. .
anks
8
8
2
3
4
10
2
5
3
3
3
09
Totnl .........
116
Percentage ehan,e in
savings deposits rom
Number of Amount of ~
savings
Jan.31,
Dec.31,
savin~s
depositors
depOSIts
1939
1989
9,927 S 3,928,815 + 1.0
+ .2
89,404
26,422,708 - 1.6
-1.0
17,842
8,320,911 + 2.2
- 1.9
36,839
13,197,915 - 3.6
.6
12,170,535 + 1.6
18,889
+ .3
30,976,866 + 5.2
76,613
.1
3,105,278 + 8.5
5,786
.2
22,713
17,909,050 - 5.2
- 1.6
12,023,487 + 4.9
25,286
+ .8
8,329
4,702,437 + .4
- 1.2
7,271
3,736,378 - 2.4
- 1.5
30,326,109 + 3.1
00,787
+ .6
-
-878,836
--
$166,826.138
-+ 1.0
-
-
.4
MONTHLY BUSINESS REVIEW
4
reserves in the Eleventh District on January 1, 1940, consti·
tuted about 60 per cent of the total in the United States.
Producing wells in the United States at the beginning of
1940 numbered 381,000, or approximately 11,500 more than
at the beginning of 1939. One·half of the net expansion
during the year occurred in the Eleventh District, bringing
the estimated number of producers to about 95,000 on January 1, 1940. The rate of production per well in the nation
as a whole amounted to 9.7 barrels daily in 1939, which
compares with an average of about 17.5 barrels daily in the
Eleventh District.
The daily average number of wells completed in the United
States during January was lower than in December but
about 29 per cent larger than in January, 1939. The increase
over a year ago in the Eleventh District, however, was only
about 14 per cent. The number of drilling rigs in operation
in this district at the beginning of February was 4 per cent
greater than a month earlier and 13 per cent above that of
a year ago.
Cotton mill activity in the United States, as measured by
the volume of cotton consumed, increased from December
to January, and continued much higher than in the corresponding month a year earlier. Although the expansion over
the preceding month was smaller than the average gain for
that season, it will be recalled that cotton consumption was
exceedingly heavy in December. Moreover, the 730,000
bales of cotton consumed in January this year was, with
one exception, the largest for any month for which data
are available. During the first half of the current season
domestic mills utilized over 4,000,000 bales of cotton, which
is greater than that for any corresponding period and 19
per cent larger than the amount processed in the first six
months of the 1938-39 season. New orders for cotton textiles
were apparently below output in January, with a consequent
reduction in the backlog of unfilled orders that had been
accumulated during the latter part of 1939. Trade reports
indicate that at some mills unsold inventories of cotton
products increased in January. Prices of most types of cotton
textiles have declined somewhat since the first of the year
but they are still appreciably higher than a year ago. Following substantial increases in the preceding four months, mill
stocks of raw cotton were reduced 4 per cent in January,
but the total at the end of the month was considerably larger
than on the same date last year. Supplies of cotton in public
storage and compresses were reduced sharply further in January' and at the close of the month they were 11 per cent
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of dollars)
January
January
1040
$ 15,344
4,366
10,078
106,191
77,400
118,791
Eleventh District-total ... .. .... , ..... .. .... ... .. .
Residential. .. . ........ ..... ........... .. . ... . .
All othor ............... · .. · · · .. · .... · ...... .. ·
United States·-total.. ....... .. ....... . .. ... .... .
Residenti. l. ... . . ... . . .. . .. .......... .. ..... . . .
All other . ....... . ..... . . . .. .. . , .............. .
. 37 states cast of the Rocky Mountains.
SOURCE: F. W. Dodgo Corporation.
BUILDING PERMITS
January, 1040
,----~-~
Number
Abilene .. ..... . . . .... · .. · .. ·· .. ··· ..
Am.rillo ......................... , ..
Austin ... . .. . ... .. .... ·· .. ·· .. · · · .. .
Beaumont . ... ....... .. .. ·.· · · • · ··· · •
Corpus Christi. . .......... ....... . .. .
Dallas· .. ... ........ . .... · · .... ·· .. .
EI Paso ... .. ... · ·· ·· · .. · ·· · · .. · · · · ..
Fort Worth ... ...... ..... . ... .. · · · .. ·
G. lveston ......... ..... . . ·· .. • · .... .
Houston ............... · .. · · ·· · · ··· ..
Port Arthur ............. . .. . ... . .. ..
San Antonio ........ .. . .......... ... .
Shrovoport .............. ... ....... ..
W.co . .. .. .. ..... ··· .. · .. ··· .. ·· ··· ·
Wiohita FaUs . .. . ........ .. . .. .... . . .
10
47
201
75
102
431
58
155
102
401
70
436
127
71
28
Total. .. .. . .. . . . . .. . . . . . . . ..
2,503
•Inoludes Highl.nd Park and Univorsity Park.
Valuation
1930
$ 18,221
6,227
11,094
251,673
80,163
171,510
Decombcr
1939
S 17,603
4,762
12,841
354,008
88,681
265,417
Potg. change valuation from
J.n., 1039
Dec., 1030
64,035
132,747
483,268
78,700
1,311,810
872,378
135,717
283,113
335,500
3,665,705
65,258
437,082
307,555
152,043
88,680
- 10 . 0
- 22.8
- 42.6
- 14.3
+ 34 . 0
- 40.0
- 43 . 6
- 14 . 7
+140.0
+ 79 . 7
- 52 .8
- 30.4
4.0
- 40 . 4
51.8
+282.4
+ 24.2
+ 75.2
7.8
+636.1
40 . 0
- 15.8
- 20 .8
+213.4
+ 88.0
6.5
5.4
+ 14.2
+166 . 9
- 66.4
$8,415,431
7.4
+ 67.7
$
+
+
+
smaller than a year earlier.
A major factor contributing to the heavy withdrawal of
cotton from public storage has been the noticeable increase
in foreign demand for American cotton. Exports thus far
this season have been at the highest rate in six years and
they were nearly double those in the first half of the 1938·
1939 season. In January, shipments were in excess of 1,000,.
000 bales. Although it was usual for exports to equal or
exceed that figure in some early months of each season
between 1924 and 1933, there has been only one month
since that time in which exports exceeded those in January
this year. Shipments to Great Britain and France were very!
large during January, accounting for more than one·hal
the total. Likewise, these countries have taken about 44 per
cent of the cotton exported from the United States in the
six months ended January 31, 1940. China and Spain have
again become important purchasers of American cotton,
takings in the first half of the current season having totaled
468,750 bales as compared with only 40,825 bales in the
same period of the 1938·1939 season. Exports this season
have been stimulated by favorable prices of American cotton
in relation to foreign grown- cotton, the Government export
subsidy, a disposition of foreign buyers to replenish deplete
stocks of American cotton, and the large consumption 0
cotton in some foreign countries.
Raw cotton prices in the United States fluctuated within
comparatively small range during the first six weeks 0
194,0. On February 15 the price of cotton, middling, 15/ 16.
inch staple, at the ten spot markets averaged 10.81 cents pe
pound, which was 3 per cent lower than at the beginning 0
the year, but about one·fourth higher than on that date
last year.
According to the Rayon Organon the production and con·
sumption of rayon in the United States recorded new hi~hS
in 1939. Production amounted to 384,,000,000 pounds, wh~ch
was about one·third greater than in 1938, and consumptl~n
totaled 462,000,000 pounds, or 41 per cent above that In
the preceding year. Imports of rayon fiber in 1939 were
more than double those in 1938.
1
f
f
CRUDE OIL PRODUCTION
(Barrels)
Increase or dcorease in dailY
Janua,ry, 1040
average productiOl~
Total
Dailyavg.
Jan ., 1030
Deo .. 1939
produotion
production
North Toxas . . .... . .... . . . .. .
+ 17,137
5,008,650
7,54~
161,560
West Texas ..... ... ......... .
+
20,600
- 17,07
8,305,900
267,032
East Texas ................. . 14,716,100
474,713
+ 2,174
- 72'M~
6,452,450
South Texas .. . . . ... .. . .... . .
208,144
-20,145
1~:333
+13,721
_____
Toxas Coastal. ..... . ........ .
7,000,400
228,723
Total Texas .. ...... .
Now Mexioo .. ... .... . . .... . .
North Louisiana ..... .. . ..... .
41,578,500
3,230,200
2,128, 150
1,341,081
104,200
68,650
+33,577
+ 5,502
- 2,805
--+36,184
=
=
_133, 1~~
4'~26
-----806
- 138,
Total Distriot . ....... 46,031,850
1,513,931
SOURCE: Th, Oil W"kly, Houston, Texas.
CONSUMPTION, STOCKS AND EXPORTS OF COTTON
(Bales)
January
January
Decembor August I to Janunr~:1o
1040
This scason Last so
1030
1030
Consumption .t:
61,76 6
Texas mills ..... . . . . . . .
12,827
10,378
11,040
71,002
3,306,840
United States mills ... . . 730,143
652,605
598,132
4,041,845
U.S. stooks-<lnd of month:
.... .
In consuming estab'mts . 1,776,031
1,630,427
1,850,664
Publio stg. &: compresses. 13,206,810 14,757,627 14,581,642
Experts from U. S. to:
28 5
Unitcd Kingdom ... . . . . 370,609
1,833,297
41,465
162,873
203, 20
Franco .. ........ .. ... . 178,310
487,674
20,6n
67,451
67,527
Italy .. ........ ... ... ..
310,728
22,036
08,761
~~::36
Germ.ny ... . .. . ... . .. .
None
31,300
18,002
None
486.~~\
Other Europe . ........ . 106,917
816,625
59,696
160,825
161,010
628'693
583,190
123,032
70,954
224,
~~r~~h~; ·co~;;t~;~".·. :::: 133,156
48,273
611,637
188,878
,m
~
Total exports. . . . 1,026,628
280,514
806,720
4,161,043
2,191,8
RECEIPTS, EXPORT~ AND STOCKS OF COTTON AT THE PORTS OF
HOUtlTON AND GALVESTON- (B.les)
31
J.nuary
January
Deoember August 1 to Jan~n:jlSOO
1040
1930
1030
Thi. se.son Las 23 7
Receipts.. .... .. .. . .. .. ..
331,642
105,277
471,859
3,032,522
l'~~~'064
Exports.. . ..............
503,351
237,303
455,738
2,398,202
1, ' .,
Stooks, end of month. . . . . 1,586,136
1,557,085
1,762,632
...•..
MONTHLY BUSINESS REVIEW
MARCH 1, 1940
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Complied by tbe Board of Governors of the Federal Reserve System)
...
INDUSTRIAL PRODUCTION
ortIT
140
I~O
/
Ito
I
90
:y "'"
~
Yo
100
IV
Cl
80
110
}
\
\
f
100
I
l V'V!..
110
120
v
90
I
eo
70
80
'19H
60
19~G
1 9~6
19~7
19~8
19~9
1940
I~~ex
oC physical volume of production, adjusted
Bseasonnl variation, 1923-1925 nverage
100.
y months, January, 1984 to January, 1940.
=
FACTORY EMPLOYMENT
!!!l
".
#\.
/" J
90
80
I~
10
r-.
60
'--
I 10
\
/
100
I
/
100
r-./
60
V
60
70
60
19301
10M
1936
1937
1938
1939
1940
Index of
vnrlat.
number employed. adjusted for .easonal
lon, 1928-1925 average
100. By montha,
January, 1984 to January, 1940.
=
FREIGHT CAR LOADINGS
POIHl'S IN TorAl. lHDD'
100
,o' I-i--+-..,q.c.:~'I--+-4----j 80
In January and the first half of February industrial aCUVlty declined from the high
level reached in the latter part of 1939. Retail trade, which had been in large volume,
decreased more than seasonally, while merchandise exports were maintained.
PRODUCTION
Volume of industrial production declined somewhat from December to January, and
consequently the Board's index, which allows for a considerable seasonal increase, dropped
sharply from the high level of 128 reached in December to 120 in January. Data availahle
for the firs~ half of February indicate a further sharp reduction in the index.
Steel ingot production, which had been above 90 per cent of . capacity during most of
the fourth quarter of 1939, has declined steadily since the turn of the year and by the middle of February was at about 69 per cent of capacity. Plate glass production, which also
had reached. high levels in the latter part of 1939, was reduced in January and lumber pro·
duction showed a considerable decrease owing in part to unusually cold weather in the
Southern regions. Automobile production in January was larger than; is usual at this season.
In the latter part of the month, however, and in the first half of February, as retail sales of
new cars declined seasonally and dealers' stocks, which had been lower than usual at the
beginning of the year, rose rapidly, the output of cars declined. In the machinery industries
activity was generally sustained at the advanced levels reached in December.
Output of cotton textiles in January continued at about the high rate of other recent
months but production of woolen textiles declined further from the peak levels of October
and November, and output of silk products remained in small volume. Activity at meatpacking establishments was maintained in January at the high level prevailing for several
months. Coal production rose sharply, following a marked reduction in December, and was
at about the high level reached last October. Output of crude petroleum continued in large
volume.
Value of contracts awarded for both public and private construction declined considerably in January, according to reports of the F. W. Dodge Corporation. Awards for private
residential building showed. a greater than seasonal reduction and were lower than the level
prevailing a year ago. Contracts for other private work declined somewhat but remained in
larger volume than in the corresponding period last year.
EMPLOYMENT
Factory employment and pay rolls, which had risen sharply during the latter half of
1939. declined by somewhat more than the usual seasonal amount from the middle of
December to the middle of January, accordinw to reports from leading industrial States.
DISTRIBUTION
Sales at deparUnent stores, variety stores, and mail·order houses in January declined
more than seasonally from the high level of December. Total freight-car loadings showed a
seasonal decline; shipments of miscellaneous freight and grain decreased, while coal load·
ings increased considerably.
FOREIGN TRADE
18~
ueo
1938
o
1840
}~~e" of total londings of revenue freight, adjusted
Mi. s~isonal variation, 1928-1925 average
100.
ter';:" nfneou. . coni, und ull other expressed In
a o· pointa in the totol index. By months, January, 1984 to January, 1940.
=
Exports of United States merchandise, which usually decline in January, were maintained this year at the high level reached in December. Shipments of cotton, which have
been large in recent months, rose further, while exports of many industrial products
declined. Exports to the United Kingdom increased sharply, owing mainly to larger cotton
shipments.
Reflecting principally acqUlSltlons of foreign gold, the country's monetary gold stock
increased by $287,000,000 during January and by $132,000,000 in the first two weeks' of
February.
COMMODITY PRICES
MEMBER BANKS IN 101 LEADING CITIES
!'CUAIIo
10
~
•
8 1WON S '" DOl,»,:
I2
~
U .I.~TION'
'or""
/'"
10
GOVERNMENT SECURITY MARKET
u ..
J,~~ r--..
6
Prices of United States Government securities declined slightly during the latter half
of January from the recovery peak reached early in the month hut regained part of these
losses during the first half of February.
oaNS
.,-
' HlR , iM ITID
'~4
Wed
L.OA~forg~~
1936
t!B7
~
1936
Prices of copper, lead, and silk showed marked declines from the middle of January
to the middle of February and there were smaller decreases in prices of some other basic
industrial materials, such as steel scrap, wool, and textile yams. Prices of foodstuffs, on the
other hand, showed little change in this period.
1939
o
1840
10, {'ge:gUYfigures, September 5, 19~4 to Februl\ry
. Commercial loana based on new claSSIfication beginning May 19, 1987.
BANK CREDIT
Total loans and investments at reporting member hanks in 101 leading cities rose during
the five weeks ending February 7 as a result of increases in holdings of Government securities at New York City banks. Loans to security brokers and dealers and commercial loans
declined. Demand deposits continued to increase during the period.
CASH FARM INCOME IN THE ELEVENTH FEDERAL RESERVE DISTRICT
Revised estimates of cash income of farmers in the five
states wholly or partially included in the Eleventh Federal
Reserve District show that cash receipts from the sale of
farm products, including livestock, during 1939 were approximately the same as in 1938 but nearly one-fifth smaller
than in 1937. The revised estimates, which make allowance
for revisions in estimated production of farm products and in
average prices received by farmers, reflect upward adjustments in income for each of the past four years, the most
pronounced increases being in cash receipts from marketings
of livestock and livestock products. Cash income from the
latter sources during 1939 was estimated at $406,000,000,
which was 4 per cent greater than in 1938, but 5 per cent
less than the revised 'estimates for 1937. The expansion over
1938 in cash income from operations of the livestock industry offsets a corresponding decline in cash receipts from the
sale of farm crops. Cash income from crops last year
amounted to $424,000,000, which was below that for any
other year since 1934. Supplementing cash receipts from
the sale of farm products, Government benefit payments to
farmers of $170,000,000 during 1939 were 50 per cent
greater than the amount disbursed in 1938, the year in
which the previous maximum was reached. When Government payments are included, farm income from all sources
in 1939 was 6 per cent larger than that in the preceding year.
The accompanying chart portrays the marked variations
in cash income of farmers in this district during the past
sixteen years. During the five years from 1924 through 1928
cash receipts averaged approximately $1,300,000,000 annually. In the subsequent four years, cash income declined
sharply, reaching a depression low of about $500,000,000
in 1932. Since that time cash farm income from the sale of
products has shown an upward trend and cash receipts from
marketings have been augmented considerably by Government benefit payments. The expansion in cash income since
1932, however, has not been shared proportionately by all
branches of the agricultural and livestock industries. Cash
income from the sale of crops in 1939 was less than one-half
the 1924-1928 average and only 29 per cent greater than in
1932. On the other hand, receipts from marketings of livestock and livestock products in 1939 were nearly two and
one-half times the low income of 1932 and 38 per cent
greater than the five-year average.
An important factor in the variation in cash income over
the sixteen-year period has been the wide fluctuations in
prices received by farmers for their products. On the whole,
prices of farm products were at a comparatively high level
from 1924 through 1928, the general index being 46 per
cent above the 1910-1914 average. In the subsequent four
years, however, when cash farm income was declining, average prices of farm products fell about 56 per cent, or nearly
as much as the percentage decrease in cash farm income
during that period. After 1932 there was a sharp recovery
in prices, and by 1937 the index of farm prices had risen
to the highest level since 1930. Cash farm income also
reached its post-depression high in 1937, but the larger income was not due entirely to the higher prices, since the
production of some major crops was very large. There were
also heavy marketings of livestock and livestock products in
1937 at favorable prices. The smaller cash income from
agricultural crops during the past two years has resulted not
only from the lower level of prices but also from the smaller
production of some of the principal cash crops.
From the standpoint of individual commodities, the most
significant change over the period has occurred in cash receipts from the sale of cotton. During the five years from
1924 to 1928 cash income from that commodity was heavy
due both to a large annual production and to the relatively •
high average prices. The sharp decline in cotton prices froIl1
1928 to 1932 was largely responsible for the reduction in
cash income from cotton during that period, the total having
dropped to an amount less than one-third of the 1924-1928
average. Cash receipts from the sale of cotton have varied
considerably during the past few years; yet, in 1937, when
production was equivalent to the 1924-1928 average, incoIl1e
from that source was only 50 per cent larger than in 1932.
Cash income from marketings of cotton in 1939 was virtually
the same as that in 1932, the higher prices received being
about counterbalanced by the smaller production.
Cash income from the sale of wheat, which had declined
materially from 1929 to 1932, also reached a post-depression
high in 1937 when cash receipts were about four times those
five years earlier and 12 per cent above the 1924-1928 aver'
age. In comparion with 1937, smaller production and lower
prices in 1938 and 1939 reduced cash income from marketings of wheat by about 40 per cent, but in each of the lauer
years cash receipts were nearly three times those in 1~32.
Cash income from the sale of truck crops in 1939 was hke·
wise smaller than in 1937; hut it was higher than in any
other year of record.
In contrast with the moderate recovery of cash receipts
from the sale of farm crops, cash income from marketin~S I
of livestock and livestock products has expanded sharply ]n
recent years. The restricted production of some agricultural \
products since 1932 has encouraged a more extensive devel·
opment of the livestock industry in order to utilize more
effectively the non-commercial crops and to provide neW I
sources of revenue. Virtually all branches of the livestock
industry have contributed to the expansion of cash farIl1
income that has occurred in the past seven years. One factor
has been the growth in the sheep industry over the pa.st
sixteen. years which has made possible sharp increases. In
marketmgs of sheep and wool. There has also been a notice'
able expansion in the dairy industry. In each of the pa.st
few years, marketings of cattle and calves have been In
record or near record volume, and prevailing prices on the
whole have heen favorable in comparison with those for
principal farm crops. Average annual cash receipts froJll
operations of the livestock industry during the past four
9
years have constituted 45 per cent of total farm income, a
against an average of only 23 per cent during the five yearS
~rom 1924 ~o 1928. This rising proportion of total cash farX
mcome denved from the sale of livestock and livestock pro U
ucts has been due to l~rger aggregate cash receipts~ as weal
as to the lower cash mcome from the sale of agncultur
crops. As pointed out previously, Government benefit pll~
ments. have be~n assuming increasing importance in tot t
farm mcome; m 1939, they were equivalent to 20 per cell
of the amount received from the sale of farm products.
CASH
FARM
INCOME
ELEVENTH FEDERAL RESERVE DISTRICT
MILLIONS oF
OOLI~
@FedFRASER