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MONTHlY BUSINESS REVIEW of the Volume 26, No.9 FEDERAL RESERVE BAN K o f Dallas This copy is released for publica tion in morning papers- Dallas, Texas, November 1, 1941 DISTRICT SUMMARY Acceleration of industrial output in this district is indicated by persistent increases in employment at manufacturing establishments, and the rising volume of payrolls, accompanied by increased cash farm income, has created unprecedented conSUmer demands for merchandise for the season. During September consumer purchases at department stores were at the highest level of record for that particular month, and the distribution of merchandise through wholesale channels continued at a rate about one-third higher than a year earlier. Construction work on national defense projects has been increased by the letting of a large volume of new contracts, and the output of defense goods is expanding. The value of construction contracts awarded during September declined sharply from the exceptionally large August volume, but was at a very high level, reflecting heavy awards for publiclyfinanced projects. During the first nine months of 1941 the value of construction contracts let in this district was 19 per cent above the total for the entire year of 1940. The daily average rate of petroleum production showed little change from August to September, while refinery operations continued to expand. Consumption of cotton at Texas textile mills averaged one-fourth higher than in September, 1940. Growing crops, as well as harvesting operations, were affected adversely by unfavorable weather in September and the first half of October, and prospective production of some important cash crops declined. Livestock and ranges continued in good to excellent condition. BUSINESS Sales at reporting department stores in the Eleventh District, which had increased very sharply in August due chiefly to heavy purchases by consumers in anticipation of future needs, showed less than the usual expansion in September. Nevertheless, the distribution of merchandise during the latter month was 22 per cent greater than in September, 1940, which compares with an average year-to-year gain of 19 per cent for the first nine months of the current year. Reports indicate that trade was especially heavy during the closing days of September when consumers made large purchases of merchandise subject to new or higher Federal excise taxes that became effective on October 1. Sales at weekly reporting firms during the two weeks ended October 18 averaged 13 per cent higher than in that period of 1940. The heavy buying at department stores in recent months has resulted in substantial increases in charge purchases. The gain over a year ago in receivables outstanding on regular accounts closely approximates the average increase in sales, whereas, instalment accounts receivable have risen by a much greater percentage, being 40 per cent greater than a year earlier on September 3 o. Coincident with these gains, the turnover of receivables has kept pace with that in earlier Years, reflecting a proportional increase in collections. Inventories of merchandise at reporting department stores were increased by about the average seasonal amount in September, and at the close of the month the value of stocks was nearly one-fourth greater than a year earlier. The distribution of merchandise through wholesale channels in this district evidenced a further seasonal gain in September, and the value of sales remained at a level about one-third higher than in the corresponding month of 1940. Gains over a year ago were recorded in each of the seven reporting lines of trade, the increases ranging from 13 per cent in sales of tobacco and tobacco products to 97 per cent in the distribution of elec- 0 ct. 31 trical supplies. During the first three quarters of 1941, aggregate sales at all reporting firms averaged nearly one-fourth greater than in the comparable period a year earlier. Distribution of durable goods, including machinery and equipment, electrical supplies, hardware, and surgical equipment, has been especially heavy thus far this year. The value of inventories on September 30 at all cooperating firms showed little change from that a month earlier, but remained at a much higher level than a year ago. According to data compiled by the Bureau of Business Research of the University of Texas, employment and payrolls in Texas increased further by about 3 per cent from August to September. In the latter month the number employed in nonagricultural trades was 15 per cent higher than a year earlier and payrolls were up 28 per cent. The Bureau of Labor Statistics estimated that employment in non-agricultural businesses and Government establishments in Texas totaled 1,118,000 during August, which exceeded that a year earlier by 130,000 persons, or an increase of 13 per cent. According to data compiled by Dun and Bradstreet, the number of business failures in this district during September was the smallest for any month in four years and liabilities of the eleven defaulting firms, which totaled $121,000, were much smaller than a month earlier and a year ago. The indebtedness of the 227 firms that failed during the first nine months of 1941 was nearly 50 per cent smaller than in that period a year earlier. AGRICULTURE After showing some improvement in August, prospective production of several important cash crops in this district was lowered during September and the first half of October by unfavorable weather and insect activity. The widespread rains, together with the tropical storm along the Texas Gulf Coast, also seriously interfered with harvesting operations and other farm work, and caused deterioration in the quality of unharvested crops. During September, pecan and rice crops sustained heavy damage and prospective production of cotton, corn, and Irish potatoes was r.educed considerably. N evertheless, the indicated production of virtually all crops except cotton, corn, and pecans on October 1 was still well above the 1930-1939 average production. Physical conditions in the wheat growing area of Texas have been generally favorable for land preparation and seeding operations. Wheat pastures are reported to be the best for this season in several years. The indicated production of cotton in the United States was raised 351,000 bales in September, but the forecast for the MEMBER BANK RESERVES ELEVENTH nDfRAL PZSlAVt Dm1UCT. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) MONTHLY BUSINESS REVIEW Eleventh District was lowered 121,000 bales as a consequence of the adverse physical conditions prevailing during the month. With the exception of Oklahoma, the prospective production was reduced in each individual state included in this district. The October 1 forecast for Texas was placed at 2,800,000 bales, or 88,000 bales less than the September 1 estimate and 434,000 bales below the 1940 harvest. In New Mexico and Arizona prospective production declined about 6 per cent, and in Louisiana the forecast was reduced further by 13 per cent to 335,000 bales, indicating the smallest crop for that State since 1919. In Oklahoma, production was placed at 710,000 bales as against a 1940 crop of 802,000 bales. Reflecting the lateness of this year's cotton crop, ginnings in Texas prior to October 1 totaled only 810,000 bales as compared with 1,480,000 bales ginned to the same date last year. Prior to October 1 the Commodity Credit Corporation had made loans on only 89,600 bales of the 1941 cotton crop, including 37,000 bales of Texas grown cotton. The estimated production of rice was reduced about 2,400,000 bushels during September, principally as a result of the tropical storm; harvesting conditions have been unfavorable since October 1. The Texas pecan crop deteriorated further in September and the October 1 production forecast of 21,390,000 pounds was about one-half the 1940 harvest. The Eleventh District corn crop was estimated at 85,292,000 bushels at the beginning of October, which compares with a production of 105,113,000 bushels last year. The initial estimates on the production of citrus fruit in Texas from 1941 blooms were placed at 15,100,000 boxes of grapefruit and 3,100,000 boxes of oranges. These estimates are considerably higher than the respective harvests in 1940. Ranges and livestock remain in good to excellent condition, and prospects for fall and winter range feed are very good. The supply of supplemental feed is also abundant except in local areas. The demand for livestock has been very strong generally, but Texas producers have shown some reluctance to sell due to the favorable range conditions and to large feed supplies. Marketings of sheep and lambs in that State during September were much smaller than the heavy shipments in that month of 1940. FINANCE On September 23, the Board of Governors of the Federal Reserve System increased reserve requirements for member banks to the present statutory limit, as a further step in the Government's program for combating inflation. The increase amounts to about one-seventh and will become effective November 1, 1941. The new rates will be 6 per cent for time deposits at all member banks, 26 per cent for demand deposits at member banks in central reserve cities, 20 per cent for demand deposits at member banks in reserve cities, and 14 per cent for demand deposits at "country" member banks. The Board of Governors' announcement stated that "the action will leave the banks as a whole with ample funds to meet all bank credit needs of the defense program and all legitimate requirements of their customers." During the last half of September, net demand and time deposits of all member banks in this district averaged $1,26k 783,000, against which the banks were required to maintain average reserves of $168,300,000. In that period, however, member bank reserve deposits with the Federal Reserve Bank of Dallas averaged $253,000,000, which was about $84,700,00 0 in excess of requirements. On the basis of average deposits during the last half of ,September, the higher reserve percentages would increase required reserves by about $26,000,000 and would decrease excess reserves by a corresponding amount. From the accompanying chart, it will be noted that reserve deposits of member banks ordinarily rise during the fall months when crop marketings and other factors cause an increase ill member bank deposits. In the first half of October this year, the rise in average reserve deposits amounted to about $7,000,000, reaching a new high level of approximately $260,000,00 0. Total earning assets of the Federal Reserve Bank of Dallas were reduced $9,400,000 between September 15 and October 15, reflecting chiefly a decline in holdings of United States Government securities occasioned by the quarterly reallocation of the System's investment holdings among the several Reserve banks. This bank's holdings of Government securities at the middle of October amounted to $76,550,000, which waS $14,600,000 lower than a year earlier. The circulation of Federal Reserve notes of this bank expanded further in Septembe~, reaching a new peak at $124,400,000 on October 6. ThIS figure was about $35,300,000 higher than a year earlier. On October 9, the Secretary of the Treasury invited cash subscriptions to an offering of $1,200,000,000 of 2 Vz per cent Treasury bonds dated October 20, 1941, and maturing on September 15, 1972. The new bonds were also offered in eX- WHOLESALE AND RETAIL TRADE STATISTICS ~----Pe roentago chango in:----~ Numbor Net sales Stookst~ of Sopt., 1041 from Jan. 1 to Sept., 1941 from Retail trade: reporting Sept., August, Sept. 30.1941 Sopt., August. Dopartmont stores: firms 1940 1941 from 1940 1940 1941 Total 11th Dist. .. . 47 +22 +11 +19 +23 +11 Dallas. ........... 7 +27 +13 +19 +19 +14 Fort Worth........ 4 +30 + 9 +20 +12 + 8 Houston.......... 7 + 0 + 9 +16 +23 +15 San Antonio....... 5 +29 - 2 +27 +29 + 6 Shreveport. . .. . . .. 3 +28 + 9 + 18 .... . ... Otber cities. ....... 21 +20 +22 +19 +33 + 9 Independent storos:· Ari.on8. .. .. . .. • .. 261 -9 +20 +26 New Mexico....... 168 -2 +18 +13 -1 Oklahoma.. . . • . . .. 534 +16 +15 Texas...... .. . ... . 1,078 +20 +17 -t Wholesale trade:· Machinery, eqpt. '" BUPPUes. .. ......• 4 +61 +15 Drugs linol. liquors). 13 +32 +24 Eleotrioal supplies .• 12 +97 - 6 Groceries...... ..... 33 +20 + 4 Hardware.. . . ..... . 9 +46 + 6 Surgioal oquipment . 4 +58 + 15 + 'i Tobacco & produots. 4 +13 + 4 ·Compiled by United States Duroau or Census. t tltooks at oloso of month. tChange lese than one-half or one per cent. CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS AND GOVERNMENT BENEFIT PAYMENTS (In thousands of dollars) INDEXES OF DEPARTMENT STORE SALES AND STOCKS (1923·1925 averago - 100) July Septembor August Soptombor 1941 1941 1941 1040 Bales 1daily average): 127 151 128 93 Wit out seasonal adJustment ..•..... 132 136 160 115 With seasonal adjustment •.•...•...• Stocks (ond of month) 72 81 73 88 Without lle880nal adjustment ......•• 80 65 80 80 With 100000nai adjustment •.•..••• , •• ~ Jllly .1941 ~ Arizona ... .. . . Louisiana . .... . New Moxico .. . Oklahoma .... . Toxas ... .. ... . Reooipts from: Govern· mont Crops Livestook· payments 4.500 1.590 104 891 2.929 632 1,733 1.858 258 11.945 13;467 672 22,334 25,940 1,339 ~---Total July 1941 6.194 4.452 3,849 20,084 49,013 July 1940 3.942 3.573 3.541 25,998 34.575 Total. . . . . 41.403 45,784 3,005 90,192 71,029 ·Inoludes receipts from the Mlo of Iivestook and Iivestook produots. SOURCE: Ullitsd States Dopartment of Agrioulture. reeoipf.ol Jan. I to July ~IO 1941 19. 46.132 31.4697~ 60,245 52, 23,483 21,030 114.773 99,383 315.304 239.790 --550,087 444,378 LIVESTOCK REOEIPTS-(N umbor) Worth,------ San AntonioSept. Sopt. August Sept. Sopt. August 1041 1940 1041 1041 1940 1941 Cattlo .................. . 72.714 53,551 54,570 18.025 15.621 17.741 Calves ......... . ....... . 51.518 50.376 29,702 25,078 28,634 20,~~~ 28,574 34,a38 20.493 13.201 14.152 11'332 52,982 62,104 42,206 9,179 13,518 9, ~--Fort :hc~~:::: ::::::::::::::: COMPARATIVE TOP LIVESTOCK PRICES (DoJIars per hundredweight) ~--Fort Worth------San Antonio--;Sept. Sopt. Aug,'st Sopt. Sept. Aug"! 1941 1940 1041 1941 1940 1041 Deef steers . .... .. . . . . .. .. Sl2.00 $10.75 Sl 1. 25 $10.40 $ 8.75 $10. 00 Stoo.ker steers .. .. ....... , lUg ~~:~~ 'ii:25 'iil:ilil 'iil:i;i; Heifers and yearlings ..•.• ~U~ Dutohcr oows . ..... ..... . 8.W 6.m 8.W 7.m 6.00 7.: Calves ................. . Hogs ...... .... .... ... . .. 8.00 10 .50 8.50 7.75 8.00 Lambe ................ .. 11 .75 tt~~ U~ lU~ ~U~ n~ H:so MONTHLY BUSINESS REVIEW 8 change for the Treasury notes maturing on December 15, 1941, third greater than in September last year. During the first two Outstanding in the amount of $204,000,000. In this district, months of the current season domestic consumption of cotton cash subscriptions to the new issue of Treasury bonds totaled was at the record rate of 10,500,000 bales annually, which $193,407,050 against which allotments of $24,267,600 were compares with 9,700,000 bales consumed during the 1940. made. Exchange subscriptions and allotments in this district 1941 season. Although the demand for cotton yarns and texaggregated $2,351,500. tiles continued active, trading during September and early The principal earning assets of weekly reporting banks in the October was restricted further by uncertainties in the price Eleventh District increased at an accelerated rate during the CONDITION OF THE FEDERAL RESERVE BANK (In thousands of dollal'8) five weeks ended October 15, reflecting substantial additions to Ootober 15, Ootobcr 15, Sept. 15, both loans and investments. The expansion in loans for com1041 1040 1041 mercial, industrial and agricultural purposes, which rose Total cash reserv"" . .......•.....•........ . ..•.... $367,277 5286,276 $847,004 Di.counta for member banks... .. ... ... . .. ... . .. . . . 574 347 673 $12,500,000 during the period, was accompanied by increases Oth.r bills discounted............................. Nono 16 6 advances.. . .. . .. . . .. .. .. .. .. . . . . .. . .. . . 284 252 208 of $1,200,000 in loans to brokers and dealers in securities and Indu.tri.1 United States Government seourities.. . . . ..•... .... . 76,551 91.164 85.829 of $4,300,000 in "all other" loans, consisting in large part of Total oarning asset. . . . ..................... ... ... 77.409 91,770 86.806 Member bank reserve deposita. . . .. . ...... .. ... . .. . 263.090 230.081 258,356 personal and instalment loans. Investments of these banks in Federal Reserve notes in aotual circulation. . . . . ..•. . 122,373 89,133 113,744 direct and guaranteed obligations of the United States GovernCONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES (In thousauds of dollnl'8) ment were increased $5,800,000 between September 10 and Ootober 15, October, 16 Sept. 10, October 15, and in the subsequent week these banks were al1041 1940 1941 lotted substantial amounts of the new issue of Treasury bonds Total loans and investmenta. . . . . . . . . . . . . . . . . . . . . . . $660.504 5546,533 5634.626 .. .. .. . .. . .. .. .. .. .. . .. . .. . .. . .. . . . . . 356,240 279,687 338,528 ~ated October 20. The total loans and investments of report- Totallonns. Commercial, indllstrial.nd agri-ulturalloans. ..... 241,8 13 185.816 220.277 Open market p'per ... ...... ,' . . ...... ,' ........... 1,803 1.679. 2.263 Ing banks at the middle of October were $25,900,000 greater Loans to brokel'8 nnd denlel'8 In .eou"t'........ . . . .. . 5,384 2.425 4.146 than five weeks earlier and $114,000,000 higher than on OcOth.r loans for purohasing or carryiag securities. .. . 14.101 13.4ft1 13,952 Real ",,(ate loans. .. . .. .. .. .. .. .. .. . . .. . . .. .. . . . 23'200l 23, 145 28,296 t?ber 16, 1940. As compared with a year ago the increase conLo.na to banks.. .. . . .. .. .. .. .. .. .. .. .. . . .. .. .. . 531 820 All other loans .. . ... . ...... .. ....... .. . ... . . ... 60.087 53,130 64,774 Sists of $77,000,000 in loans and of $37,000,000 in investments. Unit.d Stotes Government direot obligations. ........ 103.387 161,810 188,515 46,272 47,534 Deposits at reporting banks continued to expand during the Obligations. f~lIy gunranteed by United State. Govt.. 48.5 11 Otherseeurlt,es. . ................................ 62.366 58.755 60.040 five-week period despite heavy withdrawals of United States Re •• rves with Fedoral Reserve Bank........ . ...... . 167,481 142.070 157.712 with dom""tie b.nks...... . .. . . .. ...... ... 295.405 307,537 308,801 Government deposits. During the same period, these banks Balanocs Demand deposits-adjusted" .. . ................... 600.167 501,027 592.650 reduced their balances with other domestic commercial banks ftin~t~~:::G~~~;~m~~i d~P;,;,i~:::::::::: :::::: : 1n:~~~ I~N~~ I~~:m by $13 ,400,000 and increased their reserve deposits with the Interbank deposits..... . . .. .... .... ... . .. ... .. . ... 810,977 276,900 285,343 None None None Federal Reserve Bank by $9,800,000. On October 15 total Borrowings from Federal ne.crvo Bank. ............ "Includes .11 demaa~ deposits other than int~rbnnk and United States Government, Ie.. deposits were $21,800,000 higher than five weeks earlier and ..,h items reported a.!I on hand or in proccas of coUcetion. $127,000,000 above those a year earlier. At the middle of DEBITS '1'0 INDIVTDUAL ACCOUNTS (In thousand, of doUal'8) October, adjusted demand deposits, which include individual, September September Potg.ehange August Potg.ehange partnership and corporation deposits, were $108,000,000 higher 1941 1U40 over year 1941 over month than on the comparable date of 1940. Abilene ................. $ 11,019 '8,420 +41 $ 11.413 + 4 Aultin............. .... . 34,685 30,009 +18 37.588 - 8 INDUSTRY Beaumont.......... ..... 31,343 21,474 +46 30.514 +3~ • . .• . ..•.....• 4,074 3,858 +29 3,673 + The building of defense projects accounted for a substantial COl'8icona. DaUa.!I ...... ,......... . . 842,143 235,503 +45 319.382 + ~ Portion of the total volume of construction contracts awarded EI Pnso. ................ 30,647 26,281 +51 38,729 + Fort Worth......... . .... 100,703 72,685 +47 98,533 + 8 in this district during the first eight months of 1941, and Galveston............... 20,062 22,848 :/:~r 3m~~ 4 available data indicate that contracts let for this type of con- Wo,~a~~h""" """" " 3r~'m 28~'m +25 10,948 "+ ~ Struction continued heavy in September. The aggregate value n:well.. ~~'.:::::::::::: 4:037 7~:~~~ "+~~ 4.621 - 13 San AntoDlO............. 91.457 '5 +32 ~b'm :/:+48~ of all contracts awarded in the latter month was nearly Shroveport. . . . ... .. . ... . ~H~~ 4~'M8 +74 8:942 $50,000,000. Although this total was considerably below the Texarkana .............. 13'556 10:105 +34 12,024 + 5 13'368 10.700 +24 12,660 + 6 peak established in August, it was the highest for any other Tucson.................. ~Ier................... 18'091 14,106 +35 17.406 + 0 month of record. In comparison with other recent months, wrehli~ 'JiIillB::: ::::::::: 22:084 14,503 +52 20,459 + 8 awards for non-residential building and engineering projects Total .. ... ...... .... $1,151,461 3880,240 +37 $1,110,931 + 4 Continued especially heavy, and residential building was well "Includes the figures 01 two banks in To.arkenn, Arkansas, located in the Eighth Diatriet. SUstained. GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS (Average of daily figures-in thousands of dollal'8) The volume of building contracts awarded for defense projCombined total Reserve city bnnks Country bank. ects in Texas during the first eight months of 1941 amounted Gro811 Gro.. to $101,200,000, which represents 41 per cent of the total Gro88 Time Time demand demand Timo demand \7alue of all contracts let during that period. National defense September, 1930 .... . .... $1,255,034 $231,820 $129,653 $12R,084 $525,981 $103,736 construction accounted for only 17 per cent of the total value September, 1040 .......... 1,846,346 233,028 783.742 128,1 61 562.604 104,862 135.097 644.007 100,670 901.377 245.307 May 1941 .......... 1,545,384 of residential building during the eight-month period, whereas, June: 135.810 645.788 908.683 106,020 242.489 1041 .......... 1,554,471 642,400 133.b88 912.591 105,565 239,153 1041 .. .. .. .... 1,555,000 54 per cent of non-residential building and engineering con- July 133,758 645,539 921,868 105,181 238.939 Au~st, 1041 .......... 1,567,402 Struction was for defense projects. September, 1941 .. ........ 1,618,051 237,500 950,967 132,164 667,684 105,345 . Productive activity in the domestic cotton and wool~n te~ SAVINGS DEPOSITS September 30, 1041 Per~ent':fte chan?" in tile industries has continued in record-breaking proportIOns m savmgs OPOSlts rom a~ .effort to meet the unprecedented demand for defense ~nd Numhcr of Number of Amount of Sept. 30, August 31, savings savin,lls re~rti ng 7i'Vllian needs. The importance of the high rate of prod~ctlOn depOSit. 1940 1041 depositol'8 anks In those branches of the textile industry to producers m the Beaumont •.........•.... 10,583 $ 4,276.243 + 4.2 3 + .5 26,140,028 .3 .1 02,120 8 ...... . ..... . ..... Eleventh District is apparent from the prices being received by D.Ua.!I 7,210,757 - 12.5 .9 10,044 2 EI Paso .. ... ............ 12,793,721 - 1.2 34,560 - .9.0 3 farmers and ranchmen for cotton and wool. The prices of those Fort Worth .............. 11,682,005 5.7 18,073 4 + ............. 82.402,244 + 2.8 products are currently at the highest levels in recent years, Galveston 78,003 + .2 10 Houston . .. .... ..... . .... 3.084,412 - 8.0 6,015 +1.1 2 Arthur ............. and the cash income of producers in this district from these Port 17.741,045 + .1 23,342 - .3.5 5 Ban Antonio ... .... .. .. .. 12,049,015 - 2.6 25,841 + 8 Bhreveport ..••.. .•. .. . . . Sources may reach the largest total since 1929. 4,345,242 - 6.2 - 1.1 7,747 3 Wa"o ..... .. ............ 3.402,087 - 6.0 - 1.1 7,231 . According to the Bureau of Census, consumption of cotton Wichita Falls ......... , .. 3 29.468.976 - 3.7 59,131 + .1 68 In ~he United States aggregated 875,700 bales in September, All otbers ............... .02 $164,637,575 -1.0 382,509 114 ..... ... . Total which was about the same as in August, and more than onc- - MONTHLY BUSINESS REVIEW situation and the sold-up position of most mills. Inventories of raw cotton at consuming establishments declined further in September, but month-end stocks were still more than twice those a year earlier. Although advancing prices have had a tendency to retard trading in recent weeks, demand for Texas wool and mohair has continued generally active. According to trade reports, the unsold supplies of wool and mohair in Texas from the 1941 clips are comparatively small due to heavy purchases earlier by consuming establishments. Data compiled by the Department of Agriculture reveal that consumption of apparel wool in the United States during the first eight months of 1941 aggregated 625,000,000 pounds, grease basis, which was about threefourths greater than in the corresponding period of 1940. For the year 1941 it is estimated that consumption of apparel wool in the United States will exceed 900,000,000 pounds, which is by far the largest of record and about twice as great as domestic production. Imports of apparel wool during the first seven months of 1941 were in record proportions, aggregating about 400,000,000 pounds. Exports of cotton from the United States during September were small in comparison with the usual volume shipped in that month prior to the European war. Nevertheless, shipments, of 189,200 bales during September were the largest since October last year. Three Government programs have been inaugurated which may have a stimulating effect upon cotton exports during the current season. These measures include, (1) exports of cotton under the lease-lend program, (2) the program of the Commodity Credit Corporation to sell Government stocks of cotton grown in 1937 at 13.25 cents per pound for export provided exporters comply with certain regulations, and (3) a subsidy of 2.50 cents per pound on cotton exported to Canada. Daily average production of crude petroleum in the Eleventh District showed little change from August to September, but was maintained at a rate 5 per cent higher than a year ago. In the United States, daily average output increased moderately further to a new peak, exceeding that in September last year by 9 per cent. Aggregate production allowables for October in Texas, Louisiana, and New Mexico were set at a rate 5 per cent higher than in September, indicating that petroleum output in this district during that month may reach the highest level since April, 1940. Since the beginning of the current year the trend in petroVALUE OF CONSTRUCTTON CONTRACTS AWARDED (In thousands of dollnrs) Jan. 1 to September September August 1041 1040 1041 1041 325,401 E1ovonth Distriot-totol... 46,261 22,5B4 03,590r Re"identinl........... . 10,301 0,645 16,476 01,326 234,075 All other . . .•. . . .... ..• 35,870 12,919 77,123r 4,510,870 United States·-total..... 623,202 347,651 760,233 175,713 152,372 231,520 1,56 1,285 Residenti.l. ..•........ 2,040,504 All other. . . . .. . . ..... . 447,570 195,270 528,704 ·37 states east of the Rocky Mountsins. r- Rovi.od. SOURCE: F. W. Dodgo Corporation, Sept. 30 1940 187,173 65,781 121,302 2,784,352 1,136,362 1,647,000 valuation Valu.tion Sept .. 1940 Aug.,1941 No. 43 S 04,852 -11 +213 250,968 75 + 14 + 34 164 433,179 + 39 + 4 148,797 157 56 + 28 2P9 417,353 - 65 - 50 - 40 - 31 857 1,120,644 145,534 - 28 - 62 01 -12 327 386,250 - 35 132,041 175 - 27 + 17 436 1,408,866 - 6 + 9 05 113,860 + 14 + 6 944 1,420,638 +211 +128 324,568 - 35 113 + t 150,086 77 6 + 78 250,723 76 - 78 + 78 - ------ - No. 413 653 1,689 1,282 2,102 7,048 1,120 2,576 1,826 4,217 1,067 6,615 1,106 640 588 Valuation $ 079,253 2,080,685 4,310,568 1,703,157 10,048,113 11,278,024 2 ,2~5,5 41 5,075,910 3,780,719 15,350,115 945,169 6,233,Oi5 2,815,795 3,692,186 2,375,077 ------ 32,042 $73,903,803 3 - 25 Total .... 3,029 $6,897,400 tReprosents ohango of loss th.n one·half of ono per oent. STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS Toxas United StateaAugust 1 to Se~omber 30 August 1 to Se~ember 30 This season ast season This senson ast season Cottonseed roooived at mills 725,422 (tons) . ...... . .. . ... ....... 218,472 306,741 1,145,117 434,299 Cottonseed crushed (tons) ..... 03,272 167,002 526,663 Cottonseed on hand Sept, 30 330,630 (tons) ....... . ............. 152,394 155,251 748,083 Production of products: Crude oil (pounds) ...... . .. 27,227,000 40,708,000 163,278,000 135,500,~ 103,4 Cnke nml meal (tons) . . ..... 48,594 78,031 227,115 110,127 Hulls (tons) .......... ... .. 22,428 42,743 135,737 103,418 25,898 Linters \running bales) ... .. . 38,587 150,834 Stooks on lBnd BOdot. 30: Crude oil (poun s) ......... 8,315,000 10,284,000 89,234,000 57,470,~ 96,66 Cako and moal (tons) ....... 42;821 34,146 174,385 57,14 3 Hulls (tons) ..... .......... 60,068 26,604 154,100 116,007 Linters (running bnles) ...... 28,828 42,880 103,477 SOURCE: Bureau of Consus. RECThIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF HOUSTON AND GALVESTON-(Balce) Soptember September August Au~ust 1 to September 30n 19U 1940 1941 Th.s season Lnst senso Receipts .... ..... ....... . 142,046 317,420 102,409 244,455 521.359 Exports (foreign and oonst178,789 wise).. . .. . . . . . . . . . . . . . 60,533 100,626 64,158 124,691 ........ Stooks, end of month. . . .. 1,708,006 1,527,012 1,800,556 CONSUMPTION~ STOCKS AND EXPORTS OF COTTON-(Balce) Consumption .t: BUILDING PERMITS PeroentaKo chango Poroentage Septembor, 1041 Jan. I to Sept. 30,1041 oh.nije valuation from Abilene ........ Amarillo ..•...• Austin ......... Be.umont ..... . Corr,us Cbristi .. Dal as ......... EI Paso .. ...... Fort Worth ..... Galveston ...... Houston . . ..... . Port Arthur .. .. San Antonio .... Shreveport ..•. . W.co .......... Wiohita Falls .... leum production has been sharply upward in both this district and the United States. Although the increase in production in this district has closely approximated the gain in demand for that product, the distribution of crude oil in the country as a whole has greatly exceeded production, with the consequent decline in inventories. Between January 4 and October 4 this year petroleum inventories in the United States showed a net decline of 6 per cent or 14,000,000 barrels, and on the latter date stocks were at the lowest level in more than eighteen months. Refinery operations in this district and elsewhere in the United States continued to expand in September, and crude oil runs to refinery stills rose to a newall-time peak. Drilling of new wells was maintained at an active pace in September. The daily average number of wells completed in the Eleventh District and the United States was 4 per cent higher than in August, and as compared with September last year the rate of completions in this district was up nearly 50 per cent as against a 14 per cent gain elsewhere in the United States. Total loadings of revenue freight by railroads in the Southwest, which had averaged about 48,000 cars weekly in each ot the preceding three years, have shown a pronounced increase in 1941 simultaneous with a sharp rise in loadings in the United States as a whole. During the first nine months of the current year the number of freight cars loaded in the Southwestern territory was about 16 per cent greater than in the corresponding period of 1940, which compares with an increase of 20 per cent in total loadings in the United States. Loadings of revenue freight in the Southwest were affected to some extent during August and September by the late maturity and delayed harvesting of some agricultural crops. from 1040 + 05 + 2 - 21 +54 +54 1 -16 + 36 +123 - 15 + 5 + 22 - 29 +139 +149 - -+11 ooptember 1041 t;ill!l~~St~ ·.;,jlb: :::: 8~~:m U.S. stocks-<lnd of month: In consuming cst.nh'mts . 1,636,521 Publio BtR. & compresses. 11,523,702 Total exports............ 180,215 September 1040 August 1041 784.116 1,697,056 0,206,898 78,516 6~~:~~~ 10,747,308 90,655 8~~:m 30 Au~u.t I (0 SeJltembe r n Th•• season L.st sc:~~ d~:~~~ 1,2~~: 123 ":i6'7~7ji . , .. , " 1'5'5',9S0 CRUDE OIL PRODUCTION-(Barrols) . Soptember, 1041 Inorease or decrease in dailY averago produotion ~ Dailyavg. Total Sopt., 1940 Aug., I U41 prod,'otion produotion _ 160 + 5,246 North Texas .. , . .... , .. " ... . 5,546,S60 181,878 West Te.................... . 8,846,600 204,853 +32,676 =14S,'~~ East Texas .. " ........ .... .. 12,967,700 431,024 -S I,440 6,2 17,650 -13,602 - 7,86~ South Tems ... .. ........... . 207,255 +6 1,952 - 4,66 8,386,200 Texas Coastal. ........ .. .. . . . 270,507 Total Texas . ,. Now Mexi oo................. North Louisiana.............. 41,062,500 3,422,800 2,404,700 --- 1,398,417 111,093 80, 157 --- +49,5 17 +15,053 +1,~,150 Total Distriot...... 47,780,000 1,592,667 +80,620 SOURCE: Estimated from Amorioan Potroleum Iustituto weokly roports. --_25,798 + 2.419 + 2,61 4 _20,866 MONTHLY BUSINESS REVIEW NOVEMBER 1, 1941 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) ... INDUSTRIAL PRODUCTION ~ ...., ~ ' 80 '00 110 '. i I 110 0 lI".7 " 0 14 0 ISO 110 100 90 150 14 0 120 80 ,.0 A.I 20 I 10 7 I0 0 / \ b,./ 90 h.! 80 10 19315 1936 In? 1938 1939 1940 1941 Federal Reserve index of physical volume of ])1'0duction. adjusted fo r seasonal var iation. 1985-89 average 100. By months. January. 1985 to September. 1041. = DEPARTMENT STORE SALES AND STOCKS RK. .... Un 12 0 "0 100 90 80 10 60 V IAJ ~~ .'L" ]'I / 1\/ F'7 lr-"'\ ~ -~T-./ V I"J " 120 flO 100 90 80 P 70 60 .0 80 1935 1936 1931 1936 1939 PRODUCTION 30 , 7 V "\ \ / , 7 10 ... Industrial activity continued at a high rate in September and the first half of October. Further advances in the output of defense prod ucts were accompanied by curtailment in some lines of civilian goods. particularly automobiles, r ubber, and silk. Prices of industrial products increased further but agricul tural prices declined after the middle of September, and on October 16 dropped sharply in response to international developments. 1940 1941 Fe~eral Reserve indexes of va lue of sales and stocks. ad lusted for seasona l variation. 1923-25 average = 100. By months. J anuary, 1985. to September. 1941. WHOLESALE PRICES OF BASIC COMMODitiES Industrial outp ut increased by about the usual seasonal amount in September and the Board', adjusted index remained at 160 per cent of the 1935- 1939 average, the same as in July and August. Continued increases in activity were reported in the machinery, aircraft, and shipbuilding industries. At steel mills activity in September and the first half of October was maintained at about 97 per cent of capacity. Output and deliveries of nonferrous metals likewise remained at about capacity levels while lumber production declined somewhat from the high August rate. Automobile productio~ increased less than seasonall y in Septem ber, following the changeover to new models, and, according to preliminary estimates, output in September was considerably below the maximum quota that had been authorized by the Government. In the textile industry activity declined somewhat in September, reflecting mainly a further sharp reduction at silk mills. Activity at wool mills rose to a new high level, while at cotton mills there was little change f rom a rate slightly below the peak reached last May. Shoe production continued in large volume, and output of manufactured food products was maintained ncar the peak August level . Ou tput of chemicals likewise continued at earlier high rates, but at rubber plants activity was considerably below the level of last summer owing to curtailment programs ordered by the Government. Coal production, which during the summer months had been unusually large, increased less than seasonally in September, owing in part to temporary work stoppages at some bituminous and anthracite mines. Crude petroleum production advanced to record levels in September and the first half of October, and output of metals and shipments of iron ore down the Lakes continued at about capacity. Value of constr uction contract awards declined in September, according to figures of the F. W. Dodge Corporation, reflecting chiefly dec~eases in. awa~ds fo~ p.ublic project.s which had been exceptionally large in August. Awards for pClvate reSidential bUilding also declined, while contnces for other private work increased somewhat further. Total awards in Septem ber, as in August, were 80 per cent larger than in the corresponding period last year. This higher level reflected mainly :l greater amount of public construction, which was nearly three times as large as a year ago, compared with an increase of about 10 per cent for private construction. On October 9, the Supply Priorities and Allocations Board announced that, effective immediately, no public or private construction projects which use critical materials could be started during the emergency unless these projects were either necessary for direct national defense or essential to the health and safety of the nation. DISTRIBUTION 160 120 00 ~__-L____-=~~ 1930 19156 1937 __ 7~~~~I--~~--~ IOO ~-L 1938 ____L-__-1__~ 1939 1940 00 MEMBER .BA~rql_ IN 101 lEADING CITIES IIWoto'CWOOl.U.Al Loadings of revenue freight in September increased less than seasonally, particularly those of miscellaneous freight, which have been high in recent months, and loadings of coal, which were curtailed during part of the month by work stoppages at some mines. Shipments of forest products declined considerably from the high August level. COMMODITY PRICES 194 1 ~~eau of Labor Statistics' indexes based on 12 198 stuffs and 16 industrial materials. August. 9 = 100. Thursday figures. J anuary 8, 1985. to October 16, 1941. 14 Distribution of general merchandise showed less than the customary seasonal rise in September, following an unusually large volume of sales in August. During the past three months sales have been larger than in the corresponding period of any pre~ious year. In the first half of October sal.. at department stores decl ined from the peak reached In late September when there were considerable consumer purchases, particularly of articles subject to higher taxes on October 1. ~ . .. 14 Prices of industrial products continued to advance in September and the first half of October and Federal price ceilings were announced for additional commodities, including leading types of lumber coke was tepaper, paperboard, acetic acid, alcohols, and carded cotton yarns. In some cases these c~iling; were below previously existing market quotations. Price advances were permitted, however for some other commodities under Federal control. Prices of cotton and of food stuffs increased furtiler in the first half of September, but subsequently declined, owing partly to seasonal influences. On Thursday, October 16, prices of these commodities dropped sharply. 2r----+----~--~~--~----+_~r~--__; 1 2 RANK CREDIT Commercial loans at member banks continued to rise during September and the first half of October reflecting in part defense demands. Increases were substantial both in New York and in other le~ ding cities. Holdings of United States Government obligations decreased, mainly at banks in leading cities outside of New York. Excess reserves of member banks showed little change in this period. UNITED STATES GOVERNMENT SECURITY MARKET LOANS TO BROKERS , AND DEALERS o~-L__L-~==~~~~~ 1935 1936 19~7 1938 1939 1940 194 1 ~~dneSday figures. J anuary 2. 1935 to October 8. ani ' Cc;>mmercial loans, which include industrial 19S;BrlCultural loans. r epresent prior to May 19. • so-called "Other loans" as then reported. Following a slight decline in the first half of September, prices. of long-term Treasury partially tax-exempt bonds increased during t he latter half of September and In the first part of October. The yield on the 2 % per cent bonds of. 1960-65. reached a new record .low of 2.0.1 per .cent. in Oc.tober. Prices of taxable bonds moved witllln a relatively narrow range durIDg the peClod With yJCids slightly above previous low levels.
@FedFRASER