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MO NTHLY BUSINESS REVIEW
of
the
BANK
FEDERAL RESERVE
o f
Dallas
=======================================~=============
VoIUtne 26, No.1
II T
M 1
This copy is r elensed f or pubDa as, exas, arc 1 1,1941
Iicntion in morning pnper sMar. 2
~~=~~~============================================================~====~~~~;;~~~========
DISTRICT SUMMARY
The output of manufactures in the Eleventh District and
~he distribution of commodities to consumers continued heavy
In January, exceeding the respective totals for the opening
Illonth of 1940 by a substantial margin. Employment and payrolls Were maintained at a considerably higher level than a
year ago. Department store sales declined by less than the average seasonal amount from December to January, and on a seaSonally adjusted basis they were near the all-time high. At
repOrting wholesale trade firms business increased noticeably
to a level 17 per cent higher than in January last year. The
Value of construction contracts awarded declined somewhat
from the record total reported in December, but continued
Illu.ch greater than in the corresponding month a year earlier.
Dally average crude oil production declined fractionally from
December to January, but refinery operations were stepped up,
Crude oil runs to stills being the highest of record. Production
and shipments of lumber increased sharply, following the usual
Year-end decline. Operating schedules were above those of a
YCar ago at meat-packing establishments and at mills producing
~O~ton textiles, cottonseed products and flour. Producti~n of
rick and tile and structural iron and steel products contmued
to. expand. The high level of business and industrial activity is
Stimulating the demand for bank credit; total loans at weekly
repOrting banks in this district increased during the first six
Weeks of this year, although a decline ordinarily occurs at
that time.
BUSINESS
d' C~nsumer purchases at reporting department stores in this
IStrtct during January were at the highest level of record for
that particular month, and on a seasonally adjusted basis they
Were near the all-time peak. This bank's index of department
:t~re sales, which makes allowance for customary seasonal varinlOns, rose from 116 per cent of the 1923-1925 average in
ecember to 126 per cent in January. The latter figure comares with an index of 113 per cent in January, 1940. The dolar value of sales in January was 14 per cent greater than a
Year earlier, and reports show that the gain was general among
~eporting stores located througho~t t~e district. Durin.g the
rSt half of February, the distnbutiOn of merchandIse at
~eekly reporting department stores was one-fifth greater than
In the corresponding period of 1940.
hThe value of merchandise inventories at reporting firms
S OWed little net change during January, but at the monthhnf stocks on hand were valued 2 per cent higher than those
e d at the close of January, 1940.
T~e aggregate distribution of merchandise through 72 re~~rtl.ng wholesale firms operating in six lines of trade in this
stnct increased 5 per cent from December to January, and
~Otal sales in the latter month were 17 per cent greater than
~n January, 1940. Only one line of trade failed to participate
In the gain over the year, which was the largest reported in
:any. months. The distribution of durable goods, including
'" achinery and equipment, electrical supplies, and hardware
d as sharply higher than a year ago, and sales of groceries and
;Ugs exceeded those in January last year by a substantial margin. Inventories of merchandise at reporting firms were in~reased seasonally in January and at the close of the month the
i Otal averaged about 7 per cent higher than on the corresponde~g d.ate a year earlier. Stocks at electrical supply houses were
ea~;.clally heavy on January 31, exceeding those on hand a year
ler by more than one-third.
r
Employment and payrolls in Texas, which had shown substantial increases during the final five months of 1940, declined seasonally in January, but continued well above the
totals of a year ago. According to data compiled by t he Bureau
of Business Research of the University of Texas employment
declined 5 per cent from December to January and payrolls
were reduced 6 per cent. In comparison with January, 1940,
when, according to the Bureau of Labor Statistics, 941,000
persons in Texas were employed in nonagricultural businesses,
employment was up about 4 per cent and payrolls were 8 per
cent greater.
The number of commercial failures in the Eleventh District
increased considerably from December to January, but the
average liability of defaulting firms showed a noticeable decline, with the result that the aggregate indebtedness declined
28 per cent to a point moderately below that in the initial
month of 1940. Dun and Bradstreet reported 41 insolvencies
during January with liabilities totaling $272,000.
AGRICULTURE
On the whole, physical conditions during January were
favorable to the agricultural and livestock industries in most
sections of the Eleventh District. Farmers generally were able
to make considerable progress with plowing operations despite
delays caused by intermittent rainfall; nevertheless, much field
work remains to be completed, especially in central and east
Texas, and north Louisiana. The growth of small grains in
Texas made good progress during January. The condition of
wheat and oats appears to be normal or better for this season
of the year over most of the winter grain producing area,
and the current outlook points to above-average yields. A
good subsoil season obtains in virtually all sections of the district. During the first half of February, strong winds dried
out surface moisture over a large part of Texas and caused
considerable shifting of soil in the north and northwest portions of the State.
The most unfavorable development to agriculture in this
district during January occurred in portions of the truck
growing area of south Texas, where a heavy frost in the latter
half of the month destroyed limited quantities of winter
vegetables, including snap beans, eggplant, peppers and squash.
It is believed that some damage also occurred to the st rawberry,
tomato and spring corn crops. In addition to the damage resulting from frosts, many fields of beets, carrots, onions and
spinach in the Lower Rio Grande Valley suffered heavy losses
from torrential rains. Harvesting operations have been delayed in virtually all sections of the vegetable growing area.
LOANS AND INVESTMENTS OF REPORTING MEMBER BANKS
, ,
ELEVENTH FEDERAL R£SERvt
l.(1t.L.
400
300
200
wroNr_-.cl y
A~'
""'
-1
-'_
TOTAl. l.OANS
"
i"-ii--'-~ldJ~J)tJ~~.,-~,,~~
----1- I ' .I.,';
I
....
,LJ_
'>0
J
rUAMJJA,
300
TOTAl.
~---_.!. I
S
ONO
INVESTMENTS
I ..L-l_J....---.,'
---'S""-
-rrr
200
u s. COV'T
fl.T
19. 1 10.0 - - -
19.0 _ _
'00
'"''
I-- f-- ,..~r-
"r--TI-rr-t-,
1111-,/
I
OISTRICT
J
f
DIRECT OBLI GATIONS
I I It'
I
_/\
C
.....
'--'
MAM.lJA
S
ONO
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
'00
MONTHLY BUSINESS REVIEW
2
Although January weather was unfavorable to growing crops
in south Texas, it was generally favorable to the outlook for
crop production in the dry-land areas of that district. According to the Department of Agriculture, there will likely be a
considerable increase in the early seeding of commercial truck
crops in non-irrigated areas. Shipments of vegetables and citrus
fruit from south Texas prior to February 16 totaled approximately 13,000 car loads, which was about one-third smaller
than in the corresponding period of the preceding season.
The indicated production of oranges and grapefruit in Texas
showed no change in January and reports indicate that citrus
groves are in good condition, with most of the fruit remaining
for harvest of relatively large size.
The preliminary 1941 cotton acreage allotment for Texas
has been placed at 9,777,000 acres by the Agricultural Adjustment Administration. This figure, however may be increased
somewhat due to allowances under the minimum allotment
provisions of the Agricultural Adjustment Act of 1938. The
preliminary allotment for Texas is 139,500 acres less than that
allotted in 1940, which represents 38 per cent of the total
reduction for the United States.
The condition of livestock ranges in the Eleventh District
continued well above the average during January. Excessive
moisture in limited areas of east and southeast Texas caused
some additional grass-rot, but elsewhere the generally favorable
moisture conditions and mild temperatures were conducive to
the growth of winter weeds and grasses. The outlook for livestock grazing on early spring feeds is favorable provided unseasonably cold weather does not occur during the remainder of
the winter. Livestock weights remained above-average in January. In those areas where range feed is short, considerable
supplemental feeding has been resorted to, but the plentiful
supply and use of these feeds have prevented a heavy shrinkage
in animal weights. Reports indicate that the demand for cattle
is strong and some contracts for spring delivery have been
closed at comparatively high prices. Some ranchers, however,
have shown a reluctance to sell in the hope of obtaining higher
prices. The strong physical condition of sheep and the relatively
high contract prices being offered indicate that there may be
a much heavier spring movement of yearling lambs to market
than was the case a year ago.
According to the Department of Agriculture, the number
of livestock on feed in Texas at the beginning of 1941 was
much greater than that a year earlier. This development may
be accounted for in part by the generally good condition of
WHOLESALE AND RETAIL TRADE STATISTICS
, . - - - Percentage cbange in:----..
Net Sales
Stocks'
Number
January, 1941
January, 1941
of reporting
compared with
oompared with
Retail trade:
firms Jan., 1940 Deo., 1940 Jan., 1940 Deo.,1940
Dopartment stores:
Total Eleventh Distriot. ... .. ...
46
+14
- 50
+ 2
- 1
Dallas........................
7
+10
-47
+ 9
+ 2
Fort Worth.............. .. ....
4
+25
-55
- 3
- 8
Houston.......................
7
+11
-51
- 6
-21
San Antonio ......... ~.........
5
+19
-45
+ 4
- t
Shreveport....................
3
+14
-58
Oth~r cities....................
20
+13
-53
- 6
i;
Indel"'ndent stores:t
ArIZona. . . . . . . . . . . . . . . . . . . . . . . 251
+ 10
-20
Now Mexico................... 158
+14
-17
Oklahoma. . . . . . . . . . . • . . . . . . . . . 542
+21
-33
To.as. . . . . . . . . . . . . . . . . . . . . . . .. 1,059
+20
-32
Wholosale trade:t
Maobincry, e~uipment & supplies.
5
+36
+40
+ 5
- 1
Drugs.(inoludln~ liquors).... ....
9
+ 9
-12
+13
+ 2
EleotrlCal supplies... .. . ..... ...
10
+56
-10
+38
+ 4
Grocerics......................
32
+13
+12
+ 2
+ 9
Hardware......................
12
+ 7
+ 4
+ 3
+7
Tobacoo and produots. . . . . . . . . . .
4
- 1
-28
'Stooks at olose of month.
tCompiled by United States Bureau of Census.
tCbange
less tban one·balf of one per oent.
+'
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1923·1925 averago=100)
January
Decembor November
January
1941
1940
1940
1940
Sales (daily average) without seasonal
adjustment ... .. .. .... . .. .. .. . . . .. .
96
201
131
86
Sales (daily average) with seasonal ad·
justment .........................•
126
116
117
113
Stocks without seasonal adjustment .... .
62
62
77
61
Stooka, with seasonal adjustment ........
71
71
69
70
M
pastures, the abundance of supplemental feeds and the can'
tinued growth of the livestock industry in that State. The
number of cattle on feed January 1, 1941, amounted to 168,·
000 head, which was the largest for any recent year and 17
per cent greater than a year earlier. The number of sheep and
lambs in Texas at the beginning of the current year that were
being fed for subsequent marketing totaled 290,000 head,
which was nearly 60,000 head greater than a year earlier. It
is probable that the number of Texas lambs on feed throughout
the United States is the largest on record.
FINANCE
In contrast with a decline that ordinarily occurs at the
beginning of each year, total loans at weekly reporting mem'
ber banks in the Eleventh District showed a further net el('
pansion during the first six weeks of 1941, reflecting chieflY
a sustained demand for funds to finance the high level of business and industrial activity. On February 12 total loans outstanding at reporting banks amounted to $322,000,000, which
was nearly $3,000,000 higher than at the close of 1940 and
$46,500,000 greater than a year earlier. The expansion ill
loans during the first six weeks of the current year compares
with a ten-year, 1931-1940, average decline of $12,000,00 0
for that period. Among the individual classes of loans, advances for commercial, industrial and agricultural purposes
rose $3,800,000 during the six-week period and "all other"
loans, including chiefly personal and instalment loans, el(panded by about $1,000,000. These increases were partially oftset, however, by declines in other classes of loans, particularlY
loans to customers for trading in securities. Investments of
reporting banks showed a net expansion of $5,400,000 betweell \
December 31 and February 12, reflecting increases in holdingS
of direct obligations of the United States Government and ill
corporate and municipal securities. Total loans and investmentS \
on February 12 were at an all-time peak, exceeding those of ~ \
year ago by $52,000,000.
Following the usual temporary withdrawal of funds during
the ~nal week of December, adjusted demand deposits at t~
portmg banks, which include chiefly individual, partnershiP
and corporation deposits, showed one of the sharpest rises oll
record during the subsequent six weeks, and on February 12
they were at a new record high. Other classes of depositS
evidenced a net decline of $4,400,000 during the period as a
result of substantial withdrawals of United States Governmellt
deposits. Nevertheless, total deposits on February 12 were
$30,000,000 greater than at the beginning of 1941, and $68,000,000 above those of a year ago. The expansion in depositS at
I
CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS
AND GOVERNMENT BENEFIT PAYMENTS
(In thousand8 of dollars)
-------:November, 1 9 4 0 - - v - - T o t a l reacipts-----RecClpts from:
Govern·
, . - - - - - . - - , ment
Nov.
Nov.
Jan. 1 to Nov. 30
Crops LIvestock' payments
1940
1930
1940
1939
Arizona.......
3,555
4,700
366
8,681
10,040
52825
53,oBS
Louisiana. ..... 14,443
2,808
1,020
17,831
19,281
104:309
Il 8,09~~
Now Mexico...
2,401
9,550
292
12,243
14,472
54175
51,
Oklahoma. . . . . 14,491
8,140
2,254
25,185
20,255
185:705
179,8~~
Texas .. .... ... 34,000
22,141
8,992
05,199
54,316
531,930 ~
Total... . . 68,950
47,269
12,924 129,139 118,370
929,004 007,416
'Inoludes receipts from the 8ale of livestock and livestock produots.
SOURCE: United States Department of Agriculture.
LIVESTOCK RECEIPTS-(Number)
,.---Fort Worth----v-- San Antonio---;
January January December January January DccolXlbe
1941
1940
1940
1941
1940
1940
Cattle................... 39,521
41,449
42,181
15,726
14 894
12,720
Calves.................. 24,952
23,475
27,565
20,721
17;923
2~,3U
Hog..................... 67,438
40,664
68,867
15,903
13,172
13,6
Sheep..... .... .......... 26,223
38,776
28,738
6,908
5,230
4,29 9
COMPARATIVE 'l'OP LIVESTOCK PRICES
(Dollars per hundredweight)
,.---Fort Worth---.,--- San Antonio--;;January January December January January DecclXl
1041
1940
1940
1941
1040
19 40
Beef steers ..... .... . . . .. . $11.60
$ 9.35
$11.00
$12.00
$ 8.60
$1\.00
Stooker steers ........... . 11.50
8.50
9.75
10.25
725
7. 60
Heifers and yearlings ... . . 11 .60
10.00
12 .00
11.60
9:50
i2.66~
Butoher oows ........... .
7.25
0.60
0.75
6.85
6.50
6.
Calves .. ....... .. ... . .. . 10.00
9.00
9.00
9.75
8.60
o.~~
6'00
Hogs
.
...•
~ ........ . .... .
8.45
5.85
6.85
8.25
5.85
8
Lambls .• ____ .. __ •••_
9.75
8.60
8.75
8.60
7.26
•
8
MONTHLY BUSINESS REVIEW
these banks since the turn of the year has resulted in large additions to their reserves at the Federal Reserve Bank and to
their deposits at other domestic commercial banks.
Reserve balances of all member banks in tlus district have
followed a noticeable upward trend since the turn of the year,
and On February 14 they had reached a record high of $257,000,000. During the first half of February total reserves
averaged $250,000,000 daily, wluch was $32,000,000 greater
than the average for the first half of February, 1940. The expansion in member bank reserves since the beginning of the
Current year has been much greater than the increase in required reserves, resulting from the gain in commercial bank deposits, and as a consequence daily average excess reserves
7eached a new peak during the first half of February, exceedIng by a substantial margin the previous maximum of $90,000,000 recorded in July last year.
Total earning assets of the Federal Reserve Bank of Dallas
showed little change between January 15 and February 15, although member bank borrowings, which had been in small
yolume, were completely liquidated on the latter date. Follow~ng the Christmas holiday, Federal Reserve notes of this bank
In actual circulation showed the usual downward trend until
January 24. After that date a substantial increase in the deIlland for currency developed, with the result that by February
15 note circulation had risen to a point only moderately below
the all-time peak of $98,400,000 established on December 23,
1940. The recent increase in note circulation reflects primarily
shipments of currency to meet payrolls of workmen at army
cantonments that are under construction and to pay the sala~ies of soldiers at the several army camps located in this
district.
INDUSTRY
The value of construction contracts awarded in the Eleventh
District during January was much smaller than that reported
for the preceding month due chiefly to a reduced volume .of
awards for National Defense projects. The December total meluded the value of contracts for several defense projects that
had been awarded earlier in the year, but had not been included in construction figures at that time because of inSufficient detail information. Nevertheless, the value of conStruction work initiated during January closely approximated
the monthly average for 1940, which was an all-time high,
and Was more than one-third greater than in January last
year. The value of residential building, which was augmented
?Y the letting of additional contracts for United States HousIng Authority projects, was nearly double that in the opening
month of 1940. The value of contracts awarded for nonresirential building was likewise sharply higher than in ~alluary
ast year, reflecting chiefly increased awards for pnvat~ly
~nanced manufacturing structures. Engineering constructlOn,
Including public works and public utilities construction, was
about one-fifth lower than a year ago due to smaller awards
for streets and highways and electric light and power projects.
1 FollOWing a sharp seasonal year-end decline,. operations at
Umber mills in this district were stepped up m January to
about the average level prevailing during the latter half of
1940. Production of lumber during the month averaged nearly
one-third higher than a year earlier and shipments exceeded
~hose of a year ago by more than 50 per cent. As forward buyIng showed a marked increase, unfilled orders on the books of
bep~rting mills rose sharply to a level about double that at. the
eglUning of February, 1940. Mill stocks of lumber contmue
to decline.
I)'Da~ly average production of crude oil in the Ele:enth
IStrlct and in the United States during January contmued
~he moderate downward trend that had been in progress since
. eptember, 1940. Although the month-to-month curtailment
~n c.rude oil output since last September has been small, the
ecllUe over the period for the United States has amounted to
144,000 barrels daily. Lower production allowables in the
Eleventh District and a sustained downward trend in output in
Illinois have accounted for about four-fifths of the decline. Aggregate output in the country as a whole is currently near the
lowest level recorded since the Mid-Continent shutdown in
August, 1939.
In contrast with the curtailment in crude oil production
during the five months ended in January this year, refinery
CONDITION OF THE FEDERAL RESERVE BANK
(In tholl8llnds of dollnrs)
Fob. 15.
Fob. 15,
1941
1940
Total cnsh reserves. . . . . . . . . . .... ... . . . . . ... ... . .. $31h06n060
$248,636
69
j'j
Discounts for momber banks.. ......... ........... .
Other bills di.eounted........... . ... .. . ...........
None
161
278
483
Industrial ndvances.. . . .. . .. .. . .. . .. .. . . .. .. .. . .. .
United St.tes Govornmont seourities. . .. .. .. .. .. .. ..
86,834
94,362
Total earning n""ets.... . .........................
87, 11 2
95,065
Momber bank reserv~ deposit. . ..... . . . ...... .... ..
256,005
217,682
Federal reservo notes in aotual oiroulalion............
97,225
80,431
Jan. 16,
1941
$207,081
12
18
278
86,835
87,143
244,118
96,110
CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In thousand. of dollars)
Fob. 12,
Feb. 14,
J.n. 8,
1941
1940
1941
Tolalloans and inve.tments....................... $589,238
$537,126
$582,364
Totallonns......................................
321,677
275,186
315,695
Commeroial, industrial and agrioullurallo.ns. . . ...
222,975
182,522
216.133
Open market paper ............... ........ .... ··
1,413
2,040
1,517
4,676
2,892
5,033
Lo.ns to brokors and dealers in .eourities... . . . . .. .
Othor loan. for purchasing or oarrying soouritios . ...
12,186
13,963
12,640
Real estate loans .. . .......... , . .. . ... . . . .......
22,509
21,921
23,268
Loans to bonks..... .. .. .. .. .. .. .. .. .. .. .. .. ....
686
246
508
All other loans . . ........ . .......... · .... ·......
57,232
51,602
56,606
United States Governmenl direct, obligations. .. .. . . . .
166.872
153,167
167,218
Obligations.(~lIy guaranteed by United Stoles Govt..
38,855
61,936
40,423
Other .eourltlCs. . . . . ... . . . . . . . . . .. . . . . ... .. .. .. ..
61,834
56,837
59,028
Reservo wilh Federal Reserve Bank. . . ..... . .......
169,837
141,473
149,204
Balances with domeslio banks. . . . . . . . . . . . . . . . . . . . . .
291,806
294,248
282,698
Demand deposits-adjusted" . . . ..... . .... ... . ... . .•
542,989
474,822
620,377
Timo deP,oo.lts .. . . .. . . . . . .. .. . . . .. .. .. .. .. .. .. .. ..
136,967
135,788
135,936
United Stales Government depooits. ................
22,787
31,016
29,609
interb.nk deposita..... . .. .. .. ... ... . ...... . ......
289,715
282,547
279,592
Borrowings (rom Federal Reserve Bank. .. ..........
None
None
None
"Inoludes .11 demand deposits other than interbank and United States Government, leu
08.h itoms roported as on hand or in tho proccsa of ool1oolion •.
DEBITS TO INDIVIDUAL ACCOUNTS
(In Ihousands of dollars)
January
January Petg.ob.nge Doeember Potg obange
1941
1940
ovor yoar
1940
ovor'month
Abilone ................. $ 11,552
$ 9,060
+28
10,130
+14
Austin .. ...... ... .......
38,416
36,084
+ 5
43,056
-11
Beaumonl.. .............
27,136
25,262
+ 7
28,286
- 4
4,310
3,646
+22
4,171
+ 3
Corsic.na.. ............ .
DaIl8.. . . ..... . . .. ..•. ..
304,493
277,437
+10
334,728
- 9
EI Paso ....... , . .... .. ..
49,634
31,518
+57
50,595
- 2
100,418
80,184
+13
100,502
- 8
Fort Worth............ ..
26,790
28,306
- 6
32,932
-19
Galveston. . . .. ... . . .. .. .
Houston.................
280,628
257,617
+ 9
292.633
- 4
Port Art.hur. . . . . . ... . . . .
10,919
9,773
+ 12
10,605
+ 3
Roswell.................
4,856
4,255
+14
6,744
-15
San Antonio. . . . . . . . . . . . .
84,657
70,445
+20
84,077
+ 1
Shrevoporl. . . ...... .... .
63,227
47,817
+11
53,845
- 1
Texark.na"..............
10,002
7,272
+38
9,951
+ 1
Tuoson..................
14,360
12,358
+16
13,120
+ 9
rl~~~:::::::::::::::::::
Wiohita Falls............
U::~~
17,660
U:~~~
16,057
:m
+10
t~:m
17,521
:!:+ ~1
Total. .... .. .... $1,069,181
S052,728
+12
11,130,377
- 5
"Inoludes figures of two banks in Texarkana, Ark.nsa., looated in tho Eighth Distriot.
I,
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(Average of daily figures-in thousands of dollars)
Country b.nks
Combined total
Resorve oity banks
V'
Gross
Gross
Groos
Time
Timo
domand
demand
Time
demand
$99,876
$672,662 $123,805 $519,402
January, 1039 ...... . . . . $1,192,054 $223,681
564,592
104,035
129,436
775,643
233,470
Janunry, 1940 . . .. . ..... 1,340,235
104,862
562,604
128,161
783,742
233,023
Seplember, 1040 .... .. .... 1,346,346
106,028
128,295
593,960
814,555
233,323
Ootober, 1940 ... .. ..... 1,408,515
105,199
128,213
627,319
842,676
233,412
November, 1940 .......... 1,469,805
105,686
131,622
632,314
841,903
237,308
Deoember, 1940 .......... U74,217
106,395
133,199
639,618
850,234
239,604
January, 1941 .. ........ 1,495,862
SAVINGS DEPOSITS
Pereent.ge ohango in
January 31, 1041
savinge depo.its from
r
Number of Number of Amount of ~
Deo.81,
Jan.31,
savings
snvio~8
reEorling
1940
1940
deposi 8
depositors
anks
10,183 $ 4,282,956 + 9.0
+ .9
3
Beaumont ...... . ........
26,669,193 + .9
91,181
+ .2
8
D.lla................ • ..
- 1.8
8,406,888 + 1.0
19,298
2
EIPaso . ... . .... ........
.1
.
7
13,108,305
36,019
3
Fort Worth ..............
.6
.7
12,088,566
18,609
Galveston ...............
+
.3
+
4.2
32,201,714
77,505
10
Houston ......... · ..... · .
- 2.3
3,235,927 + 3.4
5,877
2
Port Arthur ... . .........
-1.1
.2
17,940,848
23,066
+
5
San Antonio .............
.4
12,208,328 +1.6
26,136
a
Shreveport .. . ...........
+ 3.1
4,639,092 - 3.5
8,123
3
Wnco ....... · ........ · ..
.2
3,640,831
2.6
7,107
3
Wiohita Fallo ............
.4
30,919,089 + 2.0
62,323
69
All others ........... .... ..
--
•
Total ••• __ • __
116
383,421
$l60,331,827
--+1.6
-
-
.2
r
I
,
MONTHLY BUSINESS REVIEW
4
operations have been well sustained. In this district daily
average crude oil runs to refinery stills during January were
at an all-time high level and in the United States as a whole
they were only 1 per cent smaller than the peak recorded in
June last year. The contraction in crude petroleum output
and the heavy volume of crude oil runs to refinery stills over
the past several months are reflected in above-ground stocks
of crude oil, which were reduced by about 2 per cent between
August 31, 1940, and February 1, 1941. On the latter date,
stocks in the United States totaled 261,200,000 barrels. Stocks
of gasoline increased sharply during January, and at the close
of the month the volume on hand closely approximated that
of a year ago. Inventories of heating oil in the United States
showed a marked seasonal decline during the month, and stocks
of industrial fuel oil decreased moderately.
The domestic demand for cotton textiles continued heavy
in the opening month of 1941 and cotton mill activity increased further. The volume of raw cotton consumed in the
United States during the month aggregated 843,300 bales,
which was an all-time high for any single month, exceeding
the previous peak established in March, 1937, by 9 per cent.
Notwithstanding the heavy production of cotton goods during
January, mill sales of cotton textiles appear to have exceeded
output with a consequent increase in unfilled orders. Prices of
cotton goods showed further advances during the month.
During the first half of the 1940-1941 cotton year, domestic
mills consumed cotton at the rate of 737,900 bales monthly for
a cumulative total of 4,427,000 bales. The rate of consumption during that period was at an all-time peak, and the aggregate amount of cotton utilized during the six months exceeded
the previous maximum for that period recorded in the 19391940 season by about 10 per cent. Consuming establishments
continued to make heavy purchases of raw cotton during January, though there was little net change from a month earlier
in the volume of stocks on hand January 31 due to the high
rate of consumption during the month. At the close of January mill stocks of raw cotton amounted to 1,875,000 bales,
which was 6 per cent greater than the volume on hand a year
earlier. Inventories of cotton in public storage and compresses
on January 31 totaled 14,668,000 bales and of this amount
slightly more than 11,000,000 bales represented Government
loan stocks. According to the Commodity Credit Corporation,
2,984,000 bales of the 1940 cotton crop had been pledged as
collateral for Government loans prior to February 12. Repossessions prior to that time amounted to approximately
118,000 bales, leaving a net total of 2,876,000 bales of the
1941 crop under the loan.
VALUE OFj CONSTRUCTION CONTRACTS AWARDED
(In thousauds of dollars)
January
January
December
1041
1040
1040
15,344
41,221 r
Eleventh Distriot-total.. . . . . . . • . . . . . . . • . . . . . . . . . .
20,768
Rcsidential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,448
4,366
11,076r
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . .
12,320
10,078
29,245r
United Statcs·-total.. . . . . . . . . . . . . . . . . . .. . . . . . . . .
305,205
106,191
456,189
Residential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111,306
77,400
159,276
All other. . . . .. . . . . . . . . .. . .. . . . . . . .. . .. . . . . . . . .
103,809
118,701
206,014
·37 states east of tho Rooky Mountains.
r-Rovised.
SOURCE: F. W. Dodge Corporation.
BmLDING PERMITS
Percen tage ohange
January, 1941
valuation from
~------------~v~------------~,
Amarillo ...... . ....... . . ., ........ . . .
Austin . . .. . ...... . ........... ........ .
Boaumont ... . ...... . ...• .. . . ... . ....
Corpus Ohristi. . ........ .. ...•.......
Dall..• .. . . ... .. .. .. .. ..... ...... . .. .
ElP..o ... . . . . ....... . ..... ... .. . . . .
Fort Worth . ..... . . . •.. .... ... ..•....
Galveston . . ....... ... ..... . .... ... . •
Houston . ... . ..... .. .. . .. . .... .. ... . .
Port Arthur ... ... .. .... ... ... . .. . .. .
San Antonio ........... ..... . . ...... .
Shreveport ......... . ...... . ...... . . .
Waoo .... .. . . .. . .. ..... . .. . . . ...... .
Wichita Falls ... . . . .. .. . .. .... •. . ....
Number
64
207
112
232
657
137
227
138
428
112
500
126
80
32
Total... .. .. . ..... . .... . .. ..
3,052
·Inoludos Highland Park and Univ~rsity Park.
Valuation Jnn., 1940
S 173,960
+ 31
302,158
- 19
307,310
+200
1,202,464
- 8
1,048,691
+ 20
223,032
+ 64
500,882
+ 77
111,029
- 67
2,004,075
- 45
84,416
+ 29
1,083,085
+148
324,040
+ 6
165,085
+ 8
58,125
- 34
$7,670,252
-
8
Doc., 1940
- 20
- 39
+269
+387
- 65
+ 66
+168
+ 171
- 36
+ 69
+ 20
+ 47
+104
- 04
-
23
,
Domestic cotton prices, which had declined by nearly one
and one-half cents per pound between June 15 and November
1 last year, recovered about one-half of that decline during
the final two months of 1940. Since the beginning of the
current year prices have fluctuated within narrow limitS
around the level attained on December 31, 1940. On February
15 the price of raw cotton, middling, 15/16-inch staple, at
ten designated spot markets averaged 10 cents per pound,
which was 7 per cent above the 1940 low of 9.31 cents per
pound recorded during the last half of October. The relative
strength in cotton prices during recent weeks reflects in part
the heavy domestic consumption of raw cotton and the comparative scarcity of cotton in commercial trade channels as a
result of large Government loan stocks.
Exports of cotton from the United States continued in
small volume during January, totaling only 52,200 bales as
against shipments of more than 1,000,000 bales in January,
1940. During the first half of the current season, exports totaled 653,600 bales, which was less than one-fifth the volume
exported in the corresponding period of the preceding season,
Shipments to the United. Kingdom and Russia account for
about three-fourths of total cotton exports thus far this season,
Operations at cottonseed oil mills in the United States
during the first half of the 1940-1941 season averaged somewhat lower than in the corresponding period of the preceding
season, due in part to a curtailment in the demand for cottonseed products. During the six months, August, 1940, through
January, 1941, mill shipments of cottonseed oil and cake and
meal were 10 per cent smaller than in that period a year earlier
and movements of hulls and linters were about one-fourth
smaller. In contrast with the decline in operations at all miUs
in the United States, the volume of cottonseed crushed and
the production of products at Texas mills have averaged appreciably higher than in the first six months of the 1939-194 0
season. Although shipments of cottonseed hulls and linters
from Texas mills thus far this season have been considerably
smaller than in the comparable period a year earlier, movementS
of oil and cake and meal have shown an increase.
STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS
~--- Texns----v-----United Stntes----August I to Janunry 31
August I to Janunry 31
This season
Last season
This season
Lnst season
Cottonaced received at mills
3,730,46 1
(tons) ... . '" . .. .. ... . . . .. .
996,207
850,533
3,014,555
3,061,686
Cottonseed orushed (tons) . ... .
804,002
776,108
2,876,981
Cottonseed on hand January 31
708,401
(tons) .... ....... . . _...... .
207,862
138,403
1,076,416
Production of products:
Crude oil (pounds) . . .... . . . 243,073,203
056,043,5M
223,185,436
017,191,673
1,373,6
Cake nnd meal (tODS) .. . ... .
373,723
367,072
1,278,942
773,1 42
Hulls (tons) . .. .. . .... . ... .
204,817
200,671
722,085
770,313
Lintors (running bales) ..... .
196,650
178,257
767,220
Stooks on hand January 31:
80,865,104
Orudc oil (pounds) . ....... . 33,189,406
24,894,333
91,212,501
217,083
Cake and menl (tons) . . .... .
70,739
71,380
215,358
150,52~
Hulls (tODS) ... . ..... . .... .
92,232
196,746
61,608
333,28
Linters (running bales) . . . .. .
76,201
106,923
250,942
SOUROE: Bureau of Census.
RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF
HOUSTON AND GALVESTON-(Bnlcs)
Jnnunry
January
Deeember August 1 to January 31n
1941
1940
1940
This scason Lnst sease
Reoeipts .... . ........ .. " .
96,141
332,380
105,360
1,480,508
3,03:,g~~
Exports.... .. . . . ...... . .
85,679
519,240
08,013
612,021
2,41,
Stooks, end of month. . . .. 1,967,962
1,570,608
1,066,026
....... .
CONSUMPTION, STOCKS, AND EXPORTS OF (;OTTON-(Bales)
January
JnnJnry
December August 1 to Jnnunry 81
1941
This senson J.J6St sca son
1940
1040
Consumption nt:
71,002
Texns mills .. .. .. . .. . ..
20,373
12,827
22,408
110,555
4,041,086
United State. mills ... ..
843,274
731,793
4,427,201
776,472
U.S. stooks-end of month:
In consuming . stab'mts . 1,874,611
1,776,508
1,833,864
Publio stg. &: oompresses. 14,668,189 13,200,600 15,046,513
Ex-mrla from U. S. to:
I 333,291
niled Kingdom . ......
18,218
379,600
10,564
326,718
'487,674
Franco .. . . . ... . ... . . ..
None
178,310
None
None
31O,12~
Italy .. .... .. ..... . ....
NODe
None
None
18,99
6~~~~
Germany ... . ... . . . .. ..
None
None
None
815,525
5,305
Other Europe ........ ..
106,917
42,129
152,005
0
583,19
9,754
161,019
8,865
39,470
620,425
i'lr~~bo~ ~~;;~t~i~8·. '. : : : : 18,007
141,944
36,817
141,038
----- ----4,169,83 1
Total exports .. .... _
52,184
1,035,416
107,375
660,131
-
r
MONTHLY BUSINESS REVIEW
March I, 1940
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reeerve SYltem)
.
INDUSTRIAL PRODUCTION
""
0
'NT
140
0
120 f--
I
"0 f-&0
I
eo
h/
10
1I.l.i
I V
-
/
100
J
1-/
v
130
J
120
r 10
)
I 00
90
r---.!
80
70
60
60
1934
1935
1936
1937
1938
1939
1940
In~ex of fhYSical volume of production, adjusted for
=
100. By
easona variation, 1935.1939 average
months, January, 1934 to January, 1941.
FREIGHT CAR LOADINGS
POINT1IN TOTAl. INDEX
100
o
18~
Ig;sS
19M
1931
1938
1939
=
WHOLESALE PRICES OF BASIC COMMODITIES
'.~~
;~:
100
eo r--t:.,-"""'/-
80
- 60
40
40
1934
1935
1936
1937
1938
PRODUCTION
In January volume of indust ri~1 production declined less th~n se~sonally and the Board's adjusted
index rose one point further to 139 per cent of the 1935 -39 average. There were further considerable increases in activity in industries making machinery, aircraft, ships, and similar products important in the defense program., and output of industrial materi.ls, such ~s steel .nd nonferrous
metals, continued .t ne.r c.pacity rates. Lumher production also was in unusually large volume owing
to demand arising from construction under the defense program as well as from private building.
Automobile production, which ordinarlly declines considerably at this time of year, w.s maintained at • high rate in Janu.ry and the first half of February. This reflected in part .n unusually
large volume of retail sales and in part the industry's efforts to build up dealers' stocks of cars as
much as possible with a view to having an ~dequate supply on h~nd in case priorities or work on
defense orders should necessitate curtailment of automobile production. Currently dealers' stocks of
new cars are probably near record levels.
In the cotton textile industry, activity in J~nuary showed some further increase from the record
level reached in December but the rise w.s less than usually occurs at this se.son. At wool textile
mills there was some decline from the high level of November .nd December, while output .t r.yon
mills was maintained in large volume. Defense program orders for textiles, p.rticularly wool and
cotton products, have been substantial for some time, .nd these combined with considerable civilian
demand have resulted in the accumulation of large order b.cklogs at most mills. Activity at me~t
packing est.blishments was reduced in Janu~ry owing chiefly to a sharp decline in hog sbughter,
which had been exceptionally large in the I~tter part of 1940. Shoe production advanced by less than
the usual season.1 amount following a high nte of output in November ~nd December.
At mines output of most metals continued at record levels in January. Production of fuels was
sustained in I.rge volume but w.s not at such high levels as output of other minerals owing in part
to the existence of considerable stocks, particularly of petroleum products.
1940
~~~;x of total loadings of revenue freight, adjusted
Mi seasonal variation, 1923·1925 average
100.
of ~C~lJaneous. coal. and all other expressed in terms
Olnts in the total index. By months, January, 1934
to January, 1941.
... .....
Industrial ~ctivity continued at a high level in January ~nd distribution of commodities was maintained in large volume.
1939
1940
Value of construction contracts, as reported by the F. W. Dodge Corpor.tion, declined in January. The decr.. se reflected chiefly ~ sharp reduction in awards for public construction from the
exceptionally large December total, which had included a number of defense projects not previously
reported by the Dodge Corpor.tion for lack of detailed information. Contr.cts .worded for private
nonresidential building declined somewh.t in Janu.ry but as in December were twice as large as the
amount awarded in the corresponding period a year ago. Awards for private residential building increased and on a seasonally adjusted basis were at the highest level since the middle of 1929.
DISTRIBUTION
Distribution of commodities to consumers in J.nuary was maintained .t the high level reached
in the btter part of 1940. Sales at department and variety stores declined seasonally following .n
unusually large .mount of Christm.s trode, while sales of automobiles continued near the rate prevailing in December. In the early part of February department store s.les were sust~ined in large
volume.
Total freight-car loadings, which usually decline from December to Januory, showed little change
this year and the Board's s..sonally ~djusted index rose two points further to 86 per cent of th.i:
192 3-25 average.
WHOLESALE COMMODITY PRICES
J:!e~er~1 Reserve groupings
of Bureau of Lahar Statis·
cs data. Thursday figures, January 4, 1934 to
Fehruary 13, 1941.
MONEY RATES IN NEW YORK CITY
PrJt UH f
4
Prices of industri~1 m.teri.ls and foodstuffs generally showed little ch.nge from the middle of
January to the middle of February. Some imported commodities, principally coffee, cocoa, rubber,
.nd tin rose slightly and there were increases also in prices of lard and wool tops, while declines were
reported for livestock ond ~ts, hides, groins, lumber. ~~d sc~.p ~et.ls. Prices of SOme finished
commodities, particularly textile products, showed ~dv~nces In thIS period.
BANK CREDIT
Total loans and investment! ~t reporting member banks in 101 leading cities incre.sed substantially
d ring January and the first half of Febru~ry, reflecting largely purchases of new Defense Notes
is~ued by the Government. Commerci~~ loans at these banks incre~sed further while loans to New
York security brokers and dealers dcclUled.
UNITED STATES GOVERNMENT SECURITY PRICES
1936
1937
1938
1939
1940
For weeks ending January 6, 1934 to
February IS, 1941.
Prices of United States Government securities continued to decline in the latter half of January
d the first half of February, more th.n canceling the gains from the end of October to the peak on
~necember 10. The 1960-65 bonds on February 14 were selling on ~ yield basis of 2.28 per cent, compared with a low of 2.03 per cent on December 10.
MONTHLY BUSINESS REVIEW
PERTINENT FACTS ABOUT THE PETROLEUM INDUSTRY*
The rate at which petroleum reserves in the United States
were discovered declined for the third consecutive year during
1940, and the year's total discoveries of approximately 1,600,000,000 barrels were the smallest since 1935, but were still
relatively high as compared with other years. Despite record
production during 1940, the industry made a net addition of
252,000,000 barrels to proved underground reserves, bringing
the total to an all-time peak of 18,735,000,000 barrels, a
fourteen-year supply at the current rate of production. Accretions to proved reserves occurred principally in the states of
Texas and Illinois. The largest net gain occurred in Illinois,
where net additions amounted to 193,000,000 barrels and
slightly exceeded those in Texas which totaled 182,000,000
barrels. The only other important additions were 52,000,000
barrels in Louisiana and 35,000,000 barrels in Kansas. In other
states proved reserves either showed unimportant increases or
actually declined. The significant declines included 157,000,000 barrels in California and 43,000,000 barrels in Oklahoma.
In the matter of total proved reserves, Texas continues to lead
by a wide margin, having a total of 9,950,000,000 barrels, or
53 per cent of the United States total. California ranks second
with 18 per cent, while Louisiana, which ranks third, has only
6.5 per cent of known reserves in the United States.
Well completions during 1940 exceeded those in 1939 by
11 per cent and with the exception of 1937 were the largest
in 20 years. The 30,560 wells completed during 1940 included
nearly 6,800 dry holes, although the number of failures in
1940 represented a slightly smaller percentage of total completions than was the case in the preceding year. In Texas,
where the 9,775 wells drilled constituted nearly one-third of
the United States total, the gain of 4 per cent in the number
of completions as compared with 1939 was much smaller
than the national average. Although large increases in drilling
occurred in north Texas, in west-central Texas, and in the
Texas Panhandle, those gains were nearly offset by sharp declines in other sections of the State. The most pronounced
percentage increases in drilling took place in a few states where
completions constituted a relatively small part of the Nation's
total completions, but a very large percentage of completions
in those states represented dry holes, probably indicating that
the activity represented in large part wild-cat drilling. The
states which had a large number of completions, as well as
substantial percentage increases in activity, included Louisiana,
Kansas and Indiana.
A significant feature of drilling activity during the year
was the large amount of this work carried on by the smaller
companies, usually referred to as 'independents.' According to
the data compiled by The Oil Weekly, the independents accounted for 72 per cent of all wells completed during 1940.
Among the six major oil producing states, Illinois and California were the only states where the larger oil companies
drilled more than one-half of the wells. In the other four states,
the proportion of wells drilled by independents ranged from
56 per cent in Louisiana to 78 per cent in Oklahoma. The
proportion was 62 per cent in Kansas and 66 per cent in Texas.
Nearly all of the 10,000 wells completed outside these six states
were drilled by independents.
During 1940, completions of oil producing wells continued
to exceed abandonments by a wide margin. At the end of the
year, there were 392,000 producing wells in the United States,
an increase of nearly 12,000 wells over the number a year
earlier. In Texas there were net additions of approximately
5,000 wells, bringing the total at the end of 1940 to 95,50 0
producing wells, of which 40,600 wells, .or 43 per cent, were
flowing wells. The ratio of flowing wells in New Mexico to
the total number of producers in that State is much higher
than in Texas, but that State has only 3,300 producing wells.
These two states, together with Louisiana and California, at
the end of 1940 had 47,473 flowing wells out of a total of
48,670 such wells in the United States.
Notwithstanding the increase in the number of producing
wells, the average daily output per well in the United Stat~S
was slightly higher than in the preceding year, resulting In
a record production of pGtroleum in 1940. Among the major
oil producing states, Texas with a daily average per well output of 14.5 barrels ranks well above Oklahoma and Kansas,
but ranks considerably lower than most other heavy producing
states. The Texas per well output which showed a decline for
the third consecutive year during 1940 was at a lower level
than at any time in more than 20 years. Louisiana had a per
well output of 59.9 barrels daily, the highest of any of the
major producing states. California ranked second with a
per well output of 41.2 barrels daily. During the past decade
the average daily output per well in New Mexico has declined
from 93.7 barrels to 34.2 barrels, reflecting a much more
rapid growth in the number of producing wells than in the
demand for petroleum from that State. In Illinois, the per well
output was only 21.6 barrels daily, even though productio~
in that State is not subject to proration. The low average IS
due primarily to the large number of wells in old fields where
the recovery of oil is very small, but there is a tendency for
output of wells in new fields to decline after being broug~t
into production. During the first half of 1940, production In
Illinois rose rapidly and reached a peak with a daily average
output in excess of 500,000 barrels late in June of that year.
Since that time, the trend of production has been downward
and currently amounts to only about 325,000 barrels daily.
During January this year, the daily average number of wells
completed in the United States was the smallest for any mon~h
since the early part of 1939 and 13 per cent lower than In
January, 1940. Declines from a year ago in states included
in this district were: Texas, 20 per cent; Louisiana, 16 per
cent; and New Mexico, 68 per cent. In all of these states the
number of drilling rigs in operation on February 1 was sharplY
lower than on that date last year.
CRUDl~
OIL PRODUC'rION- (Barrels)
January. 1041
Inere880 or deere880 in dailY
"'--T-otaI - - -D
-ai1y-a''R'- '
average produetion ~
North Texa .... . ............ .
West Texas ... . . ... . . ..... . . .
Ea.t Texas .. .. . .... .. .. .... .
South Texas . ... . . . . .. . . . . .. .
Texa. Coastal .. ... . ..... . ... .
produetion
5,303,050
7,308,250
13,320,150
5,755,050
7,300,050
produotion
171,006
238,658
420,073
185,n47
235,805
' • Jan., 1040
0,497
- 20.270
- 44740
- 22:407
7,082
Total Texas .. .. . . .
New Mexico .... . ...... . .. . . .
North Louisiana ...... . . .. . .. .
30,005,450
3,125,900
2,137,700
1,261,144
100,835
68,058
- 10,037
- 3,365
308
+
+
+
Total Distriet .... .. 44,350,050
1,430,037
- 82,904
SOURCE: Estimated from American Petroleum In. titute weekly reports.
Doe., 1940
_ 10,857
2,147
- 2,317
- 1,769
1,301
+
-+
_ 11,435
_
401
302
+
_ 11,540
*This article is based on data published by The Oil Weekiy, Houston,
Texas.
@FedFRASER