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This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS 2 PRICES AND WAGES Changes in prices and wages from the low points may be sumarized as follows: Prices The Bureau of Labor Statistics index of wholesale prices increased from January, 1922, to March, 1923, 15 per cent. The hiring rate of wages for unskilled labor in Eastern industrial centers increased from April, 1922, to April 15, 1923, 22 per cent. Average weekly earnings of workers in New York state factories (fairly representative of industrial earnings in the country as a whole), increased from April, 1922, to March 15, 1923, 11 per cent. Wages serve bank credit, particularly in the industrial sections of the country, has also increased from the low point of last summer, as follows: All Federal reserv~ banks earning assets have increased $138,000,000 since August 9, 1922, or 14 per cent. Loans to member banks have increased $263,000,000 since July 26, 1922, or 69 per cent. Included in earning assets are the government securities and acceptances held by the reserve banks, as well as the loans to member banks. As the volume of securities and acceptances owned has decreased, the volume of loans to member banks has risen to a somewhat larger amount, and earning assets consequently have risen. The lending power of the reserve banks remains very large, as is apparent in the high reserve ratio, the result mainly of the heavy inflow of gold. THE VOLUME OF CREDIT The high industrial activity has involved a great increase in the volume of bank credit in use. COltlparisons are made below between those dates when low points were reached and April 11, 1923. I I: Member Banks Total loans and investments have In Leading increased $1,974,000,000 since Cities March 1, 1922, or 14 per cent. Commercial loans have increased $783,000,000 since August 30, 1922, or 11 pel' cent. Demand and time deposits have increased $2,453,000,000 since September 2, 1921, or 19 per cent. Since the first of the year the growth of total loans and investments has been due entirely to the rapid increase in commercial loans; loans on stocks and bonds and the investment holdings of those banks have declined. This shift in the fornl of bank credit is in response to the increasing demand for credit for commercial and industrial purposes. The use of re- RELATION OF CREDIT CAPACITY TO PRODUCTION CAPACITY The relation of this great supply of credit, still held in reserve, to the productive capacity of the country is referred to as follows in the current issue of the Federal Reserve Bulletin: "The present lending capacity of the country's banking system, in view of the great growth of the reserve at the reserve banks, is now far in excess of the credit needs of the country's productive capacity. In such a situation it is the available supply of labor and equipment and not the potential supply of credit that in the end must fix the limit which may be attained by aggregate national production. As these limits are approached credit policy must be increasingly influenced by careful consideration of the continued effectiveness of further additions to the total volume of credit in contributing to increased productivity. DISTRICT SUMMARY :'111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111= i=~ " § THE SITUATION AT A GLANCE Eleventh Federal Resel've District 1=- I~~l~:i~~:~~::,*~~~~Z~:~~t;~3;:'~;;)~~~;~$~~;~:;:::~:i:;::: :~ l~: Dii~~ '0' Reserve Bank ratio at end of month.............................................. Building permit valuations at larger centers................................ Commercial failures (Number)........................................................ Commercial failUl'es (Liabilities) .................................................... Oil production (,b arrels) .................................................................. Lumber orders at pine mills (per cent of normal production) 45.5 % 11,661,391 91 2,474,504 11,212,490 87% 50.0% 7,067,294 91 2,104,596 10,363,280 84% o. Dec. 4.5 points [nco 65.0% None Inc. 17.6% Inc. 8.2 % Inc. 3 points E 1======- 1=====: ~ 1IIIIIlll1llllllUIIIIIIIIIIIIUIIIIIIIIIllUIIIIIIIIIIIIIIIIIIUIIIIIIIIIIIIIIIIIIIIIII111111111111111111111111111111111111111111111111111111111111111111111111111111I 1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111I111I11I11I11II1I11I11I11I11111I1II11I1I11111I111I11II1111I11I11I1II11I1111r. MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS A further rise in the tide of business and industry occurred in this district in March, accompanied by a moderate increase in the use of bank credit. Retail trade was surprisingly brisk. March sales of the district's department stores exceeded the February total by 35 per cent, notwithstanding the handicap imposed upon seasonable merchandise by abnormal weather conditions, which gave the month of March the unusual record of being the coldest month of the winter. The month also witnessed an accelerated activity in farming operations, construction work, and other basic industries, including livestock, lumber, cement and oil. As compared with February, there was a 65 per cent gain in the month's total of building contracts awarded in the larger cities, bringing the volume of construction work in the district close to record-breaking proportions and threatening another serious shortage in the supply of skilled and common labor. No unusual changes occurred in the banking situation, although March statistics reflected the beginning of the usual ebb in deposits and rise in the volume of loans, principally in the rural communities where banks are gradualy increasing their advances to farmers for financing the 1923 crops. Our 3 loans to member banks increased approximately $3,000,000 during the month of March, and although they continued to expand i,n April at a rate approximately double that of March, the demand is still well within normal proportions, as most banks still appear to be able to finance the bulk of their customers' needs out of their own resources. The recent amendment to the Federal Reserve Act making ninemonths agricultural paper eligible for rediscount has not thus far materially affected the volume of rediscount offerings in this district, although it has already brought within the time limit of eligibility all agricultural paper maturing during 1923. March debits to individual accounts at thirteen cities exceeded those of the shorter month of February by 10 per cent. Contrary to the normal tendency at this season, there was a slight upturn in the district's business mortality rate, liabilities shown in the month's failure r ecord exceeding those of the month of February, which is usually the peak month of the year. The crop outlook continues to be the subject of much favorable comment, and so far as early indications go the farmers are facing an even more successful season than they enjoyed last year, except in the wheat belt, where another short crop is expected as a result of weather damages. CROP CONDITIONS The severest weather of the past winter occurred in this district in March. Early reports indicated that the killing freezes which occurred during the month inflicted heavy damage upon such crops as fruit, early truck, and wheat. In addition to the direct loss suffered by early vegetables, as a result of the cold waves of March, there will be some economic loss to the district's vegetable growers due to the fact that weather conditions made it impossible for them to market their products in time to get the advantage of early season prices. damaged, on the average, about 50 per cent. Later information, however, indicates that the loss was over-estimated, and while some damage occune.' where the fruit buds were swollen or the blooms were open, it is too early to estimate the exact extent of the loss. The planting of cotton has been practically completed, and in many localities it is up to a good stand. Some slight damage was suffered by the plant as the result of freezing, but only a small amount of replanting was necessary. No defimte information The extent of damage to Southwestern fruit as to this year's acreage is available as yet, although caused by late frosts and freezes has been variously ' reports agree that there has been a substantial inestimated from 25 per cent to 75 per cent. Peaches, crease. the most important item in the district's commercial fruit crops, were at first reported to have been The severe weather last month administered a 4 MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS setback to the district's wheat crop, and reports from the Texas Panhandle indicate another short crop in that section this year. " , ') COTTON MOVEMENTS THROUGH THE PORT OF GALVESTON Aug. 1s t to Mch. 31st March 1928 Seeding of corn and oats is well advanced, and some replanting, due to weather damage, has been found necessary. Abundant rains occurring in Aprli have given small grains an excellent start, however, and the outlook for production is exceptionally favorable at this time. In fact crop conditions, particularly in West Texas, are more promising than they have been at this season since the banner year of 1919. In contrast with the situation a year ago, there was a sharp decline in the March movement of cotton through the port of Galveston, both receipts and exports for that month showing a decided falling off from the record of the preceding month. Exports, however, outstripped receipts by a margin of more than 100,000 bales, reducing stocks on hand to an unusually low point. This Last Season Season Gross Receipts........ 76,591 176,392 2,265,230 2,105,570 Exports..................... 180,483 181,670 2,154,196 2,039,238 Stocks, March 31st ................. ................ 175,769 309,019 -111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 1I11111111111111111111111111111~ SEASON'S RECEIPTS, EXPORTS, AND STOCKS AT ALL UNITED STATES PORTS Lns t Spason This Receipts since Aug. 1, 1922 .. .. Exports: Great Britain ......... . France ..................... . Continent .............. .. Japan-China .......... .. Mexico .................... .. Total foreign ports Stocks at all U. S. ports, March 31st.. .......................... .. It Cotton Movements. March 1922 Season 5,276,241 1,207,747 522,599 1,615,077 481,042 13,749 3,840,214 4,794,608 1,100,437 533,004 1,746,180 784,923 2,100 4,166,644 646,603 1,030,844 "11 111111111111111111111111111 111111 111111111111111 111111 1111 111111111 11 11111111111111111111111111111111111111111111111111111111111I11I1I 111I111111 111111l111 11 111 1i: '!J IIIIIIIIIIIIIII IIIIIIII IIIIIIIIIIIII IIIIIIII II II IIIIIIIIIIII11111111 11 1111111111 111111111111111111111111 1111 111111111111111111111 111111111111111111 111111111111111'# ; ~ ~ § GALVESTON STOCK STATEMENT I~:; ~:~~;'B'itai~:: : E For other foreign ports.................... § For coastwise ports............................ M"{'i:~gg "l~~ii I In compresses...................................... 37,812 § 3,500 E 242,452 Total.............................................. , 18,344 4,500 144,225 175,769 309,019 _:=_=' _---= ::;'11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111: " , LIVESTOCK Although the district's ranges suffered temporarily from the unusually low temperatures prevailing in March, grazing conditions reacted well to the warmer weather and abundant precipitation occurring in April, and the passing of the winter found both livestock and ranges in a satisfactory condition, the herds having suffered but little from the severe blizzards that occurred in the first month of spring. In Arizona and New Mexico recent rains have further improved cattle and sheep ranges, insuring sustenance for livestock which had been weakened by the winter drouth. Ranges " ) .. ' " 'I The early spring movement of cattle in Texas appears to be considerably lighter than that of last year. The prospective nu~ber of grass-fed cattle to be moved Movements and Prices is estimated at 80 per cent of last spring's movement. The reverse condition, however, applies to sheep, which have been favored by abundant pasturage, and it is believed that the present movement of grass-fattened sheep will largely exceed the light shipments that characterized the movement a year ago. The Fort Worth market offered attractive prices on all classes of animals throughout most of the month, but when the supply became more liberal toward the end of March quotations took a downward turn that all but wiped out the early gains. The market, however, took care of all receipts in a satisfactory manner, the demand being particularly steady for hogs and sheep. Lambs, after selling up to $16.00, dropped back to a point slightly below the closing level of the preceding month. As this is written cattle values show a declining tendency, while the hog market continues to reflect a firm demand with prices about steady with those at the close of March. MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS =.'1 1111111111111111111111111111111 111111111111111111111111111111111111111 111111111111 11 11111111111111111111111111 111111111111111111111111IIIIIIIIIIIIIII IIIIIIII IIIII,!:: FORT WORTH LIVESTOCK RECEIPTS. March 1923 February 1923 Cattle ........37,341 35,841 G Calves ........ 6,188 7,295 L Hogs ..........66,962 43,843 G Sheep ........ 7,294 5,912 G Ga in or Loss March 1922 1,500 53,833 1,107 11,406 23,119 70,258 1,382 45,120 Gain or L oss L 16,492 L 5,218 L 3,296 L 37,826 ~II IIIIIIIIIIIIIIIIIIIIIUIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 11111111 1 1111111111 11 1111111111111111111 1 111111111111111111 11IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIS 5 ~IIIIIIIIIIII"IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111.:. COMPARATIVE TOP LIVESTOCK PRICES Beef steers ............................ Stocker steers ........................ Butcher cows ........................ Stocker cows .......................... Calves .................................... Hogs ........................................ Sheep ...................................... Lambs .................................... Ma rch 1923 $ 9.25 7.00 5.50 4.00 9.25 8.45 9.00 16.00 February 1923 $ 8.75 7.30 5.50 4.00 9.00 8.50 9.00 14.50 March 1922 $ 8.50 6.75 5.75 4.25 9.50 10.60 9.25 15.10 ~1I1111111111111111111111111111111111111111111111111111111111111111111 11111111111111111111111111111111111111 111111111111111111111111111I111111111111111111111111111~ WHOLESALE TRADE The upward trend of wholesale distribution in this district continued during the past month in nearly all lines of trade. There was a substantial increase in sales over March, 1922, in every line of trade, and dry goods was the only line to show a recession from the February volume of sales. Despite that decline in March the dry goods business is reacting well under the stimulus of more favorable weather conditions prevailing in April. While wholesale dealers, as a rule, are optimistic over the present expansion in business, they are aware of the dangers in the situation, and are watching carefully the trend of production and credit expansion and are adhering to a conservative policy in credit extension. Prices continue as a factor of uncertainty. In general, prices are still rising, but some basic raw materials have given evidence of reaction. Nevertheless, labor troubles are being avoided by general concessions for higher wages in basic industries, which will tend to offset a decline in raw materials. In consumptive channels some hesitation is apparent on account of the higher prices, but the increase in employment in industrial centers, with higher wages for workers in some quarters, together with the prospects for good crops. in the country district~, has tended to stimulate consumption. Dry Goods. The distribution of dry goods at wholesale, as measured by the dollar value of sales, reflected a decline of 5.7 pel' cent as compared with the previous month, but was 13.9 per cent larger than during March a year ago. Sales for the first three months of the year were 29.6 per cent greater than during the corresponding period of 1922. The upward movement of prices is now manifesting itself more strongly in finished commodities, despite the efforts of manufacturers and jobbers to keep prices from advancing far enough to check consumption. Most raw materials are either going higher or are holding steady. While cotton has to some extent reacted downward, the future trend is still uncertain. The textile mill workers have been granted higher wages to avoid labor troubles, which has added to the cost of production. Dealers report that while the retailers appear to have confidence in the market, the consumer buying has been slow and retailers have been buying on a conservative basis to avoid an excessive accumulation of stocks. Despite the adverse developments in the trade, dealers generally are optimistic over present conditions and state that the outlook is promising. Reports indicate that collections are from fair to good. Hardware The wholesale hardware trade experienced a large seasonal expansion during March when the sales of eleven firms reflected an increase of 40.3 per cent over the corresponding month last year. The first decisive improvement in the hardware trade since 1920 occurred in the spring of 1922. In June of the latter year, sales, for the first time in more than two years, exceeded those of the same month of the previous year. Since that time, however, steady improvement has been in evidence. During the first three months of this year sales averaged 37.3 per cent greater than during the same period of 1922. Seasonable items, such as garden tools, poultry netting, screen wire, MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS 6 screen door hardware, and sporting goods are in strong demand. The demand for building hardware has been good on account of the enormous amount of building under way. Prices are still advancing in sympathy with the increase in iron and steel products. , " ' ..I.,' ,) ') I, farmers more confidence in their ability to buy and has made more imperative the necessity for equipping themselves with sufficient implements to carry on farming operations satisfactorily. Furniture Drugs. The l\1"arch reports from eight wholesale drug firms disclose an increase of 8.3 per cent over February sales and 2.9 per cent over March, 1922, sales. For the season, January 1st to March 31st, sales were 9.6 per cent greater than during the corresponding period of 1922. The buying demand is generally reported to be holding up well, but some dealers report sales somewhat slow. While buying for the most part is satisfactory, the retailers are confining their purchases principally to immediate needs and do not show any disposition to anticipate their forward requirements. Wholesalers report that prices have continued the upward trend which has been noticeable for several months. Farm Implements The March sales of farm implement firms reflect an increase of 10 per cent over February and 187.8 per cent over March, 1922. The fact that sales for the first quarter of 1923 were 134.6 per cent greater than sales for the same period last year is indicative of the substantial improvement which has occurred in this line of trade. While the upward movement of prices has to some extent had an adverse effect upon trade, the present crop outlook, which appears good in all sections of the district, has given the ~ ! The distribution of furniture during March continued at a high level, sales being 23 per, cent greater than during February, and 27.7 per cent greatr than during March, 1922. There is a strong demand for all classes of furniture at retail, which in turn is being reflected in wholesale channels. While considerable buying has come from the country sections, the heaviest distribution has been in the larger cities on account of the expanded program of home building which is being carried on more extensively in these centers than is the case in the country districts. Groceries The March sales of thirteen grocery firms were 9.0 per cent larger than during February and 11.9 per cent larger than during March, 1922. During the first three months of this year the dollar volume of sales was 15.5 per cent greater than during the corresponding period last year, the increase being attributable to some extent to the higher level of prices. The buying demand has continued good in all sections of the district, and the general outlook is reported by several dealers to be improving. Some dealers state that April business has slowed down to some extent, but this is largely due to the seasonal slackening of business. Prices on all staple articles continued their upward trend. CONDITION OFP:~~t~!~~fLfnc;!~! ge~!~~eGinMARCH, -Net Sales- i 1923 - Net Sales- -Stocks- +134.6 + 24.2 + 9.6 - 16.6 + 2.0 ................. ............... . + 8.1 + 2.7 i I~~~:2}~;·.·••• •••• •• :·••·••.•••••••••·:... .. ... . ................ i:i:~!;Jl.;~:.:;:;':;t:!:· ~i;d:;;,~i I = = ~: Farm Implements..................................................................................... Furniture ........................................................................ .'.......................... Drugs ......................................................................................................... +++182277·:8~ +t 210~ . . O~ i====== .ilIlIIIIIIIIIIIIIlIIIHIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 11111111111111111111111111111111111111111111111111111111111111111111111 1 111111111111111111111111111111111111111111111I~ 8 MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS a.!IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII11111111111111111111111111111111111111 .. 111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111.:: ~ CHARGES TO DEPOSITORS' ACCOUNTS I~~:~!:::~: ; M~'~!:!'ii:gg! F'b';'~:gii!!g T;!1 Dallas ..................................................................... El Paso ................................................................... Fort Worth ............................................................. Galveston ............................................................... Houston ................................................................... San Antonio ........................................................... Shreveport, (La.) ............................... :.................. Texarkana (Texas ) ............................................... Tucson ..................................................................... Waco ....................................................................... 159,058,000 28,543,000 105,992,000 73,963,000 99,384,000 26,826,000 29,428,000 10,948,000 6,475,000 16,184,000 5.6 26.4 5.5 10.5 16.2 17.9 31.3 3.3 + 21.1 +.5 148,763,000 31,696,000 142,066,000 65,040,000 105,969,000 27,271,000 30,994,000 6,849,000 6,666,000 14,800,000 $660,590,000 Totals, Eleventh District ........................... + + + + + + + M';';!:iii:ggg 167,932,000 36,070,000 111,870,000 81,763,000 115,945,000 31,638,000 38,645,000 10,587,000 7,843,000 16,262,000 $595,416,000 + 10.9 'T~11 $616,780,000 + + + + + + + + + 12.9 13.8 21.3 25.7 9.4 16.0 24.7 54.6 17.7 9.9 + 7.1 M" "ons JcmuQ.YV Febyuary !V/aych Apn' June July Auql/st SeptemberOctobel' Novembey December MII/,On.S O f Dolla 1'05 Dollal's r---~--~----+----+----r---~---4----+----+----~--~--~ Or gOOr,~~-----+-----r~--~--__+-____~____~__-4____-+____~____~__~!OO :t> '- ...... , 70orrA~,~·'~____~~__~~~____-+____-+____~____~~~~.-~.~.~~__._:~~~~.,~.~_~-~.~.:~~~~ ..... ~ .. ... .. c,~:\. V '-'-'- ." . . . -- .............. . 60 0 '--_B_..!,.'-:;':-1 ..."'":"'..... "±t..-"',.. :!Ol-_ _ _r-_.-_.-ti'-_._-_.--+.---.--.-+.--./---::oF'~:.../-._-_--+___ ...._-__'"'+__-j bOO •• '~-' ./""/::... ...•. .. '+~_ .... -1:;. I .......::...... "., _.' - ...... ~"" ..................:&-_.~.. - --- ~ ;!'" ... - .... 500r---~-----r----~____r-__~____~··_···_~_~_~~··_···_··_~__~__~____~____+-__~50o .....:;.::;:..::.:,. ..... ~ 40°r----+----~----~---+----4---__~---+----+---~~--~--__+-__~4oo '" I III : ~~ 3qo 300 I A 1923 B ............. 1922 I" 200 C - - - - 192 t 1920 D-'-'-' Zoo '~" I' 100 100 DEBITS TO INDIVIDUAL ACCOUNTS AT THIRTEEN CITIES IN ELEVENTH FEDERAL RESERVE DISTRICT DURING 1920, 1921, 1922, AND 1923 Acceptance Market Acceptances executed by banks of this district and which were outstanding on March 31st amounted to $2,465,248.65 as compared to $2,325,415.61 on F ebruary 28th. The volume of outstanding accept- ances based on the domestic shipments and storage of goods declined from $1,118,426.27 on February 28th to $893,549.42 on March 31st. On the other hand, the outstanding acceptances executed against import and export transactions rose from $1,206,- MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS 9 989.44 on February 28th to $1,571,699.23 on March munity as well as from the country banks which 31st. The volume of bankers' acceptances held in are supplying funds for carrying on business in the portfolio of the Federal Reserve Bank declined country towns and to farmers for carrying on farm from $21,402,428.25 on February 28th to $20,662,- operations. However, deposits were $39,004,000 972.96 on March 31st. greater than on March 29, 1922. Their investments in Government securities amounted to $61,927,000 There was a slight increase of on March 28th, which is $7,271,000 greater than Condition of Reserve City $884,000 in the loans of reserve city those owned on February 28th, and $20,000,000 Banks. banks during the month of March. greater than on March 28th a year ago. The bills The net demand deposits of these payable and rediscounts with the Federal Reserve banks dropped from $247,213,000 on February 28th Bank decreased from $3,071,000 on February 28th to to $236,134,000 on March 28th, showing a net loss $2,716,000 on March 28th, or a reduction of $355,000. of $11,079,000, which indicates the withdrawal of Due to the loss in deposits, the ratio of loans to dedeposits to meet the increased demand for funds posits rose from 87 per cent on February 28th to which generally materializes at this season of the 91 per cent on March 28th. This ratio stood at 97 year. This demand comes from the business com- per cent on March 29, 1922. 'i March 28, 1928. Number of reporting banks ................................................................... . 2. U. S. securities owned ............................................................................. . 3. All other stocks, bonds, and securities owned ..................................... . 4. Loans secured by U. S. Government obligations ............................. . 5. Loans secured by stocks and bond s other than U. S. Government obligations ............................................................................................. . 6. All other loans ........................................................................................... . 7. Net delnand deposits ..... _ ........................................................................... . 8. 'l'ime deposits ............................................................................................. . 9. Reserve with Federal Reserve Bank ..................................................... . 10. Bills payable and rediscounts with F edera l Reserve Bank ................ 11. Percentage of loans ( * ) to net demand deposits .............................. *Loans include only items 4 and 6. 1. Operations of the Federal Reserve Bank The loans of the Federal Reserve Bank to member banks, which began to increase early in March, reflected a gradual gain throughout the month and on the 31st stood at $19,961,116.90, as compared to $16,913,248.17 on February 28th, representing a net increase of $3,047,868.73. Due to the demands for credit by banks outside the reserve cities loans increased to $21,116,534.55 on April 16th, or a gain of $1,155,417.65 during the sixteen day period. It is to be noted that our loans to member banks on April 16, 1922, amounted to $34,541,444.03 which was $13,424,909.48 greater than the amount on the same date this year. While loans have been steadily increasing for the past six weeks, the demand for funds from the member banks continues light despite the fact that the farmers are well along in their planting operations. This is due to the fact that as a general rule the banks were able to liquidate the major portion of their frozen loans 52 March 29, 1922 52 $61,927,000 9,515,000 5,137,000 $41,927,000 7,890,000 5,065,000 52,374,000 211,598,000 236,134,000 75,666,000 25,623,000 2,716,000 91% 40,705,000 187,246,000 197,130,000 63,004,000 21,605,000 4,055,000 97 % last fall and are now able to draw up their own resources to finance the greater part of their customers' needs. The total amount of bills held by this bank increased from $38,315,686.42 on February 28th to $40,624,089 .86 on March 31st, distributed as follows: :!1 11"1I11111111111I1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII~ Member bank's collateral notes secured by U. S. Government oblig·ations ..................$ 980,850.00 Rediscounts and all other loans to member banks .................................................... 18,980,266.90 Open market purchases (Banker s' acceptances ) ............................................................ 20,662,972.96 Total bills held ................................................ $40,624,089.86 .. jlllllllllll llllllll llllllllllllllll lllllllllllllllllllill111111111 111111 111111 11111 111111 111111111111111111111111/11111111111111111111 1111111111111111 111111 1111111 .. The amount of Federal reserve notes in actual circulation on March 31st was $29,031,160, as compared to $30,799,920 on February 28th, or a net reduction of $1,768,760 during the month. It is to be noted that our note circulation on the above date was $1,209,171 larger than on the corresponding date last year. The reserve deposits of member banks I, MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS the previous seven years. The March statistics show the same number of defaults as February, but the indebtedness of firms failing during March amounted to $2,474,504, as compared to $2,104,596 during the previous month. The amount of liabilities involved in March failures was the largest for any month since August last year. The appended chart, which shows failures for 1922 and 1923, discloses the fact that after the peak was reached in February, 1922, the liabilities of de- 11 faulting firms took a definite downward trend, reaching a low point in October of that year. (The unusual aggregate of indebtedness shown for August was due to one failure involving liabilities totalling more than $4,000,000). Each month since October, 1922, (with the exception of January, 1923) the liabilities of defaulting firms have steadily risen. This seems to indicate that, while there has been a substantial recovery in business, weak spots in the business structure still exist, which warrant caution in the extension of credit. !""""''''''''"''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''"'"''''''''''' ' '''''''~~:;;;;~'~;:~'';:;:~~;~''''''"'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''1 I ! t",""""",,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, """';"""''''" """ """ """"""''''''''''''"""""'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' """"""'""""""'"''''''''""""""""""""" """""''''''''''''''''''''''''''''''''',,'''',,''''''''"""" """""""""""",,,..l Thousand.-J an F4b.Mar A e lpr Ma XjJune July Au~ ~ (X, Of Nov Dec Ja.n Fieb Mar Apr Ma J .u ne J uty_ A I ~ S,~it ()c"t Nov 0 ec Number II of Dollars Fa,lul'es 6000 600 5000 4000 / V\ 500 j 3000 2000 11 -- - IV ~ I~~tles 1 \ I \ :JOO BoO 700 \ I \t I 40D \ \ \ 1000 1\ " 1\ \ \ '\ /\ \ \ .,. 300 1 / V\ V V ,.. "' Number L A / I / ,... I IV ,/ 200 V , 1'" /00 90 " r-j 10 70 ''L'' \ i/ 600 60 500 $0 400 40 300 JO 200 20 I' ' .0 0 192L ~ COMMERCIAL FAILURES IN THE ELEVENTH FEDERAL RESERVE DISTRICT DURING 1922 AND 1923 /0 12 MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS PETROLEUM The March output of crude oil in the Eleventh Federal Reserve District amounted to 11,212,490 barrels as against 10,363,280 barrels during the previous month. This larger output, however, was due to the long.r month, as the daily average during March amounted to 361,693 barrels as compared with 370,117 barrels during February, showing a decrease of 8,424 barrels in the daily average run. The daily average yield of Texas fields decreased from 291,391 barrels during February to 282,314 barrels during March. The Louisiana territory, which had been showing a steady decline for the past several months, came back during March with a gain of 653 barrels in the daily average yield. 11,584 barrels in February to 12,191 barrels during March. In the Moran-Shackleford County field the output for March amounted to 21,945 barrels. The Stephens County field, however, showed a decline in the daily average production from 29,886 barrels in February to 29,621 barrels in March. While the total production of the Haynesville (La.) field increased from 1,005,870 barrels in February to 1,106,730 barrels in March, the daily average yield for the latter month was 223 barrels less than the previous month. The Bellevue (La.) field increased its daily average output from 6,388 barrels in February to 6,650 barrels in March. Further declines occurred during March in the Texas Gulf Coast fields, despite the longer month and the large increase in the initial production of new wells. The actual production in these fields amounted to 2,802,250 barrels as against 2,841,310 barrels during the short month of February, thereby resulting in a reduction of 11,080 barrels in the daily average yield. This indicates that the recovery of oil from the old wells is rapidly decreasing. In the Hull field there was a production slump of 6,335 barrels in the daily average yield. The average daily output in the Goose Creek field amounted to 19,300 barrels in March as against 19,979 barrels during the previous month. Drilling Results. Despite the heavy rains and cold weather during the month of March, drilling operations in this district showed a marked gain over the previous month. There were 539 wells completed in March, of which 370 were producers yielding an initial flow of 50,888 barrels as compared to 348 completions in February, including 239 producers with an initial yield of 26,708 barrels. Completions during March in the Texas fields numbered 479 wells, of which 326 were successful, yielding an initial flow of 46,998 barrels as against 317 completed during February, of which 212 were producers with a flush production of 25,223 barrels. The total output of crude oil from the North Texas district during March amounted to 1,996,970 barrels, which is a gain of 232,445 barrels over the short month of February. The daily average run of the Burkburnett field increased from 24,423 barrels in February to 24,787 in March. The largest gain in this district was scored in the Holiday-Archer County field where the average daily yield increased from 5,681 barrels in February to 7,061 barrels in March, due to the large amount of new production added during the month. On the other hand, the Electra field and the Young County field suffered slight declines in the daily average production which offset to some extent the increases in the other • _.- .... R-.!I fields. " ,,',', - :'~,,:n.':,n ·~ : Noticeable gains were registered during March in the Texas Coastal fields both with regard to the number of completions and the amount of new production added. There were 57 wells completed with an initial flow of 16,250 barrels from 46 producers, which compares to 40 completions during February with a flush production of 8,278 barrels from 33 producers. The Goose Creek field scored 13 completions, all of which were producers, making an initial yield of 4,690 barrels as compared to 5 completions during the previous month with 750 barrels of new production added from four producers. The Hull field scored 9 producers out of 16 completions, which yielded an initial flow of 5,375 barrels. This compares to 11 producers obtained out of 12 completions during February, which added 4,480 barrels of new production. ~-";-'1 , Production gains were registered in the CentralWest Texas fields during March, when the output amounted to 3,676,365 barrels as compared to 3,309,075 barrels during the previous month. The Mexia-Currie district produced 1,939,670 barrels of oil in March as compared to 1,740,095 barrels during the previous month. The Ranger-Eastland County field increased its daily average flow from Drilling was more active in the North Texas district than in any other section of the state. In fact during March there were more completions and a greater amount of new production added to the district than has been the case in any month since July, 1920. There were 214 completions during 13 MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS March, of which 153 were producers as compared to 105 completions during February with 73 producers. The initial yield obtained from these new producing wells amounted to 19,026 barrels in March, as against 6,922 barrels during February, or a net gain of 12,104 barrels. The Holiday-Archer County section easily led all the other fields in the North Texas district, having completed 85 wells of which 56 were producers, netting a combined initial output of 8,155 barrels. This record compares with 19 producers obtained out of 28 competitions during February, which added 2,214 barrels of new production. The Electra field dropped to second place with 64 completions including 55 pr oducers with a combined initial yield of 4,771 barrels. The Burkburnett field had 39 completions, of which 27 were producers with a flush produ~tion of 3,824 barrels, which compares to 10 completions during the previous month when 867 barrels of new production were added from 8 producers. The large increase over last month was due to developments of the Hirschi pool, where a large number of producing wells were completed. The initial production ranged from 300 to 800 barrels to the well. In Young County, there were 10 producers obtained out of 19 completions, which added 1,975 barrels of new production. Completions in the Central-West Texas fields reflected a sharp increase during March with a corresponding addition of new production. Out of the 152 completions 95 were successful, making a flush production of 9,819 barrels. Renewed activity was noted in Mexia-Currie sections, where there were 13 completions with only two dry holes. The 11 producers added 1,945 barrels of new production. During February there were only 4 successful completions yielding an initial output of 240 barrels. About the middle of March the deep test well drilled in during January in the oM Corsicana shallow field resumed its flow after being drilled several feet deeper. Later in the month other producers were completed and indications point toward a further development of this field. Stephens County reported 25 completions in March as compared to 20 in February, but the 20 producers completed in March made a flush production of 2,965 barrels, as against 3,835 barrels from 11 producers completed during February. The Moran-Shackleford County field registered 70 completions, of which 39 were producers, yielding an initial flow of 2,351 barrels as compared t o 31 producers out of 43 completions during February, which added only 225 barrels of new production. Other fields produced a greater number of completions but failed to show any appreciable gains in new production. The North Louisiana territory completed 60 wells during March, of which 44 were successful, yielding an initial flow of 3,890 barrels. This compares to 31 completions in February with an added production amounting to 1,485 barrels. The Haynesville field had 9 completions, all of which were successful, yielding a flush production of 925 barrels. With the passing of interest in the Haynesville field, operators are now centering their attention on the Bellevue field. F or some months this field has been void of interest, but with the increases in crude oil prices further · developments are now under way. Seven wells were completed during March, which yielded an initial flow of 215 barrels. Crude Oil Prices With the advance on Texas Coastal oil from $1.50 per barrel to $1.75 per barrel on March 15th, the crude oil market ceased its upward trend, and early in April suffered a reaction when Mexia crude' and Currie crude were reduced 20 cents per barrel. The posted price on Mexia crude now stands at $2.00 per barrel, and Currie crude at $2.40 per barrel. It will be remembered that the crude oil market began its upward movement early in December, and within the interval of four months price advances on crude oil at the various fields ranged from 25 cents per barrel to $1.10 per barrel. E.' 1 1 1 1 1 111111 1 1 111 1 11 11 11 1 1 111111 1 11 11 1 11 1 1 11 1 11111 1 111 1 11 1 11 11 1 11 1 11 11 1 11 1 11 11 1111 1 11 1 111111111 1 111 1 11 1 1 1 11 1 111111111111 1 11 1 11111 1 1111111 1 1 11 11111 11 11111111 11 11 1 11 1 1111111 111 11 1 11 11 1 1 111 1 11111111 1 11 11 11 1 11 1 111 1 1 11 11 111111111 11 11 1 11 11 111111 1 111 11 1111 1 111111 1 111111111111111 1 111 1 111 1 111 11 111 1 11 1 1111 1111111111111 1 111111 1 111111111 11 11 1 1111111 1~ OIL PRODUCTION Total Increase or Decrease Febl'UllrY MUI'Ch DailY Avg. Total Daily Avg. Total Dui ly Avg. Field: North Texas .................................................... Central-West Texas ...................................... r exas Coastal ................................................ Miscellaneous fields ...................................... 1,996,970 3,676,465 2,802,250 276,055 64,418 118,596 90,395 8,905 1,764,525 3,309,075 2,841,310 244,050 63,019 Inc. 118,181 Inc. 101,475 Dec. 8,716 Inc. 232,445 Inc. 367,390 Inc. 39,060 Dec. 32,005 Inc. 1,399 415 11,080 189 Totals, Texas .......................................... 8,751,740 282,314 8,158,960 291,391 Inc. 592,780 Dec. 9,077 79,379 2,204,320 78,726 Inc. 256,430 Inc. 653 2,460,750 orth Louisiana .............................................. I N " 849,210 Dec. 8,424 370,117 Inc. 361,693 10,363,280 11,212,490 Totals, 11th District.............................. 1r.1II111111111111111111111111111111l11l11l11l11l11l11l111l11l1111111111111111111111 111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111II11111111111111111111111111111111111111111111111111111111111111HIIIIIIIIIIIIIIII1I111111111111rllllllllllllllllllllllllllll~ i, " MONTHLY REVIEW OF BUSINES S AND INDUSTRIAL CONDITIONS 15 fl l ll l llll l llll l llll l lllllllllllllllll'llllllllllllllllll1 1 11111111111111111111111111111111111111111111111111111111111111 1 111111111 1 1111111111 11 11111 1 1111111111 1 111111 1 11111111111111111111111111111111111111111111111111111 11 1111111111111111111111 1 111 1 11 1 1111111111111111111111111111111111111111111I111111I111111I11I111I11I11 1 11111 1 1I111111111 ~ I BUILDING PERMITS March, 1923 Austin .....................•.. ....... Beaumont .................: ....... Da llns El P as ~:::::::::::::::::::::;::::::: Fort Worth ...... ..........·....... Galvest on ...... .......... .. .'...... Houston ........................... Port Art hur ..................... San Antonio ................: .... Shreveport .................. :.... Waco ............................: .. .. 'I'oml ............................. No. 64 120 470 102 284 277 584 184 378 320 37 -2,810 Valuation 63,295 173,274 2,059, 537 212,617 655,122 174,962 5,848,319 1 55,~6 5 1,137,511 1,612,344 79,065 11,661,391 ; Inc. or F ebruary, 1923 Dec. V a luation No. 567,976 _ 90.4 85 184 319,133 _ 45.7 1,760,495 + 17.7 458 77 177,270 + 19.9 237 550,369 + 19.0 287 111,562 + 56.8 484 1,675,051 +219.8 123 695,680 _ 77.7 262 624.220 + 82.2 280 355,265 +858.8 39 160, 274 _ 47.4 Inc. or March, 1922 Dee. No. Valuation 8.7 36 49,020 + 109 141,929 + 22.1 492 1.598,007 + 29.8 97 167,095 + 27.2 219 1,057,501 _ 38.0 182,950 _ 862 4.4 619 1,328,925 +302.5 124 89,828 + 78.1 450 682,366 + 79.9 240 477,543 +287.6 49 100,980 _ 21.7 Firs t Quarter 1923 Valuation No. 745,360 154 650,077 378 1,890 6,619,832 280 692,897 836 2,068,278 452,218 865 1,587 7,728,868 1,021,529 458 986 2,352,486 866 2,492,012 189 878,107 First Quarter Inc. or 1922 Dec. No. Valuation 83 154,900 +381.2 239 813,107 +107.6 1,139 5,501,808 + 20.3 265 629,846 + 30.8 587 1,701,796 + 21.2 962 770,819 _ 41.8 1,402 3,847,103 +180.9 282 173,667 +488.2 1.125 1,679,091 + 49.0 640 1,112,288 +124.1 132 801,656 + 23.7 2,361 2,796 7,934 6,806 7,067, 294 + 65.0 5,821,094 + 100.3 25,191,094 15,485,525 + 62.7 ::.1111111111111111111111111111111 11111 1111 111111111 111 11IIIIINIIIII IIIIIIIIIIIIIIIIII IIIIIIII IIIIII IIIIIIIII IIIIIII1IIlII IIII IIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIllIIIIIIIIIIIIIUllllllllllilllllllll 11111111111 11111111111111111111111111111111111111111111111111111111111111 1111111 11111111 11111111111111111111111111111111111111111111111111. SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by /he Federal Reserve Board 05 of April !l6, 1923.) Further increases in production of basic commodities, in wholesale prices, employment, wage rates, and wholesale and retail trade, took place in March. PRODUCTION: Production in basic industries, according to the Federal Reserve Board's index, increased 4 per cent in March to a level 8 per cent higher than at the 1920 peak and 67 per cent above the low point of 1921. The output of pig iron steel ingots, automobiles, and crude petroleum, an'd the mill consumption of cotton exceeded all previously reported monthly totals. Building operations showed a, further large expansion and the value of contracts let for residences in March was the highest on record. Railroad freight shipments have been larger every week this year than in the corresponding weeks of the past four years. Car shortage has been reduced to the lowest point since September, chiefly as a result of the addition of new equipment, a decrease in the number of bad order locomotives and cars, and a concerted effort to increase the average loadings. Employment in the building trades and in many lines of manufacturing continued to increase in the Eastern States. The surplus of unskilled labor in the West reported in earlier months is being gradually absorbed by the seasonal increase in farm work. A number of leading textile mills, steel mills, and packing plants announced general wages advances ranging between 11 and 12112 per cent, and numerous wage advances in other industries also were reported. Trade: March sales by department stores reporting to Federal reserve banks were 22 per cent above those of March a year ago, partly because Easter purchases were m.ade in March this year, whereas last year such purchases were largely deferred until April. Stocks of goods held by department stores were 6 per cent larger than those held a year ago, but this increase was not as large as the increase in sales and hence the rate of stock turnover has been somewhat more rapid. Sales by mail order houses were larger than for any month since November, 1920, and 35 per cent larger than March, 1922. Wholesale trade in all reporting lines was larger than in March a year ago. WHOLESALE PRICES: Wholesale prices, as measured by the Bureau of Labor Statistics index, advanced 1.2 per cent during March and were 15 per cent above the low point of January, 1922. AS in recent months, the prices of metals and building materials showed the greatest increases, while fuel prices showed a further decline from recent high levels. Compared with a year ago, metals were 37 per cent and building materials 28 per cent higher. The cost of living increased slightly more than one per cent during March to a level of 3 per cent higher than a year ago. BANK CREDIT: During the month prior to April 11 a more moderate growth in the demand for credit for member banks in leading cities resulted in an increase of about $48,000,000 in their loans made largely for commercial purposes, as compared with an increase of $235,000,000 in the preceding month. Through withdrawal of funds from investments and a further inflow of gold, member banks have been able to meet demands of their CUI3tomers for increased credit and currency independently of the reserve banks. Consequently, the tota1 volume of Federal reserve bank credit, measured by total earning assets, has remained relatively constant during the past month, and in fact since the seasonal liquidation at the turn of the year. The volume of Federal reserve notes in circulation has also changed but little as the larger demand for hand to hand money has been met chiefly by an increase in other forms of money in circulation. There has been little change in money rates from those prevailing in March. 16 MONTHLY REVIEW OF BUSINESS AND INDUSTRIAL CONDITIONS BANK CREDIT BANK CREDIT ALL fEDERAL RESERVE BANKS 800 MEMBEn BAi'l\{S IN LrADl ilG CITIES MILLIONS Of DOLLARS M I LLIONS Of DOLLARS 4000 BILLlCNS or DOLLARS DIUIO tlS Of DOLLARS 4000 16 16 3500~------~-------4--------~------4--------43S00 14 14 '.' j ,r rr-f4~ !~r/'\~!I ~ ·fY; \~~ ""V'-I'"-----f~ ~--l----+----j3000 \ 3000f--- \\1 2 500 I'"'~A : •. -,'."J : .. : \. ~ Vp.R .NOTES ~~ r ~ ••• DISCOUNTS DEMAND DE ;? --'~ '---'~",\. ,+--------l--------I o;- ,.;.ff,j , 2500 1'- ., -.. .. ...... LOANS AND 12 ~ ' 4- 10 I'- .. ~. ~ ~ 12 K 10 ~ 2000~------+-------4----r--~------~-------4Z000 8 8 6 6 "o 'I, ,~ 1 500~------~-------f------"": ··':1._-------l--------l 1 500 " EARNING _", ~:S£TS ", J • ''1'.-'''-:'.~.~r tJ !l,-':I 100011 --------!--------I ···------4-----"'---~----__l 1000 4 r-'" ••Ifi•• 500 ~------ I------__I -------+------~-----~S OO 2 TIME DEPOSITS p PRICES 2 1920 1919 1921 1923 1922 PERCENT 300 :l00 25 0 COMBINATION 0 1' 22 INDIVIDUAL SERIES CORRECTED FOR SEASONAL VARIATION ( /!lI!1 - IOO) PER CENT PER CENT 250 160 14 0 200 pJ IV r'\, r\........ ·:. -" o INDEX OF PRODUCTION IN BASIC INDUSTRIES· I ND~X PfRCWT ~ . --" 1 o NUMBERS Of WHOLI:SALE FRICES U. S. ElUREAU Of LABOR STAT ISTICS ( MONTNLY AVERACE 19/~ "00) ,..... :'#•••• .::,r--. 1NV£!JTM£NTSl·· ..'·· I 150 140 J 120 200 100 ,..,.- l.; 150 ./ 160 \ /\J "V ~ \ 80 120 I ~ /" "V 100 W' eo 60 6o 40 40 20 100 20 100 5o 50 LATEST FI PURE- o 0 1919 Note: 1920 1921 1922 1923 Bnse Adopted by United States Burenu of Labor Statistics o o 1919 1920 1921 1922 1923