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~EVIEW
MONTHLY BUSINESS
o f
the
Volume 26, No.8
FEDERAL RESERVE
BAN K
Dallas
This copy is released for publication in afternoon papers-
Dallas, Texas, October 1, 1941
DISTRICT SUMMARY
The distribution of commodities to consumers in the Eleventh District increased sharply during August. On a seasonally
adjusted basis, department store sales were at an exceptionally
high level, exceeding by a wide margin that for any month
during the twenty-two years for which data are available.
Retail merchants continued to make heavy purchases of merchandise; wholesale trade expanded in August and averaged
about one-third higher than a year ago. Employment and
payrolls in Texas rose further during the month. Following
a marked increase in July, consumption of cotton at textile
mills in Texas declined in August, but remained at a much
higher rate than in the corresponding month last year. The
production of crude petroleum increased substantially during
August, and the output of petroleum products, as measured by crude oil runs to refinery stills, reached a new peak for
the second consecutive month. The value of construction contracts awarded in this district during August was exceptionally
large, being nearly double the previous peak recorded in April
tIlls year. The large total >reflected the initiation of numerous
large projects, principally in connection with the defense program, that had been in the planning stages for some time. The
production of Portland cement in Texas during recent months
has been in record proportions and the output of lumber has
been well sustained. Shipments of cement and lumber have
exceeded production of those products by a substantial margin.
Agricultural prospects improved further in August, and the
condition of ranges and livestock continued good to excellent.
BUSINESS
Consumer purchases at reporting department stores in the
Eleventh District, after declining by less than the usual seasonal amount in July, increased very sharply in August.
The buying wave, which was apparently set off by fears of
impending shortages following the impounding of raw silk
stocks by the Federal Government, gained momentum after
the announcement that instalment credit terms would be restricted. While sales of silk merchandise and consumers' durable
goods, such as furniture, house furnishings, refrigerators, radios and washing machines, showed the largest increases, reports indicate that substantial gains occurred in sales of a
wide range of merchandise. Aggregate sales during August at
reporting firms were 35 per cent greater than in that month
a year earlier, and this bank's adjusted index of department
store sales rose 34 poin ts to a peak of 166 per cent of the
1923-1925 average. The year-to-year gain in sales during August in this district was slightly larger than that for all reporting stores in the United States.
During the first seven months of 1941 sales in this district
and in the United States showed average year-to-year increases
of 17 per cent and 16 per cent, respectively, which conform
rather closely with the 15 per cent increase in national income
payments in the United States during that period. Prelinlinary
reports indicate that following the exceptionally heavy buying
in August consumer purchases declined somewhat during the
first half of September; nevertheless, sales at weekly reporting
firms in this district were 18 per cent greater than in the
corresponding period a year earlier, or slightly larger than
the average gain during the first seven months of the year.
Inventories of merchandise at reporting department stores
were increased by about the average seasonal amount in Au-
o f
0
ct. 1
gust, and this bank's seasonally adjusted index of stocks remained at 80 per cent of the 1923-1925 average. In comparison with a year earlier, the value of inventories on August 31
was one-fifth greater. Merchandise orders outstanding at the
close of August were double those a year ago.
The demand for merchandise at reporting wholesale trade
establishments in this district was maintained at an active pace
during August. Aggregate sales showed a seasonal gain of 6
per cent over those in July, and exceeded the total for the
corresponding month of 1940 by about one-third. The demand
for durable goods, particularly electrical supplies, hardware
and machinery, contiI).ued especially heavy. The distribution of
merchandise during the first eight months of 1941 averaged
about 20 per cent greater than in the comparable period a
year earlier. The value of inventories at reporting wholesale
establishments evidenced little change during August, but at
the month-end the total was 16 per cent higher than a
year ago.
Employment and payrolls in nonagricultural businesses in
Texas continued in August the upward trend that has been
uninterrupted since last January. According to data compiled
by the Bureau of Business Research of the University of Texas,
the number of persons employed in August was 15 per cent
greater than a year earlier and payrolls were up 28 per cent.
The gains were general over the State. Among manufacturing
industries, increases in employment occurred at establishments
producing food, forest, chemical, stone and clay, iron and
steel, and textile products.
The number and indebtedness of business failures in the
Eleventh District increased somewhat from July to August,
but remained considerably smaller than a year ago. Dun and
Bradstreet reported 20 insolvencies during the month, with liabili ties totaling $210,000.
AGRICULTURE
Agricultural prospects showed some further improvement
during August and the first half of September, as physical
conditions were generally favorable for the development of
growing crops. Timely rains in the western portion of t~e
district replenished surface moisture and virtually assured
large crop yields, and dry, hot weather in many areas that
had received excessive rainfall earlier in the season enabled
crops to make good growth and to partially overcome the lateness of the season. As the season progressed, it became apparDEPARTMENT STORE SALES AND STOCKS
[LEVE~
FED£RAL
RaERV£
DISTRICT
,
""
140
,30
,20
_.... C [NT
1'01 CENT
",0
140
')0
'20
INocxtS ADJUSTeD f'OR $tMONAL VARIATION
-
1023 · 10
Avr.AN% -100
110
jI. '(V"
'00
SALES
~
00
eo
70
_d'r
V
II
Vv-N
W
V\J
rVVJ~
~j
r-
110
,00
00
SfOCl<S
J
80
_~~~~N
70
/J,'....r""'.,./
"J
40
30
,.,.
-
,m
---
,...
This publication was digitized and made available by the Federal Reserve Bank of Dallas' "'"
Historical Library (FedHistory@dal.frb.org)
,...
40
30
MONTHLY BUSINESS REVIEW
2
ent that yields of several crops, including cotton, grain sorghums, tame hay, sweet potatoes, rice and peanuts, would
be larger than had been anticipated earlier. Prospective pro. duction of virtually all summer crops except cotton is now
equal to or above the 1930·1939 average production. Seeding of fall sown grain crops is progressing under favorable
conditions in Northwest Texas.
Prospects for the production of grain sorghums in this
district showed a marked improvement during August; in
Texas the indicated production of 70,660,000 bushels is the
highest of record. The September 1 production forecast
for rice in Texas is likewise at an all-time peak of 17,920,000
bushels, which compares with a previous high of 16,000,000
bushels harvested in 1940. Harvesting of corn in this district
is making rapid progress, but operations have revealed some
damage by heat and insects; in consequence, production prospects were lowered 2 per cent in August to 88,322,000 bushels, which compares with a harvest of 105,113,000 bushels
in 1940. The indicated production of pecans in Texas was
lowered 3,4 50,000 pounds in August, and the estimated crop
of 26,220,000 pounds represents a 36 per cent decline from
the 1940 harvest.
The cotton crop in this district made good progress during
August under weather conditions that were conducive to
rapid plant growth and better insect control. In consequence,
prospective production was raised 10 per cent to 3,436,000
bales. In Texas hot, dry weather in those areas infested by
insects enabled farmers to poison more effectively; at the
same time, opportune rains were received where most needed in
the west and northwest portions of the State. The indicated
production of cotton in the Southern High Plains and Northwestern Low Plains of Texas is now well above average. For
the State as a whole the Department of Agriculture placed
the September 1 estimate of cotton production at 2,888,000
bales, which is 316,000 bales higher than the August 1 forecast, and compares with a harvest of 3,234,000 bales in 1940.
The indicated yield per acre in Texas was increased nearly 25
pounds in August to 175 pounds, which compares with a
yield of 184 pounds in 1940 and a 1930-39 average of 154
pounds. Cotton prospects for the State of Oklahoma likewise
improved during August. The September 1 forecast of 627,000
WHOLESALE AND RETAIL TRADE STATISTICS
~----'Peroentago ohanllO in:----~
Number
Net sales
Stookst~
of
August, 1941 from
Jan. 1 to
August, 19U from
Retail trado:
reporting August,
July,
Aug. 31, 1941 August,
July,
firlIlll
19~0
1941
from 1940
19~0
1941
Department stores:
'fotal 11th Dist....
47
+35
+34
+19
+20
+12
Dallna .. ..........
7
+ 38
+~7
+17
+16
+10
Fort Worth.... ....
4
+31
+28
+10
+ 7
+ 6
Rouiton.... .. ....
7
+3~
+28
+17
+20
+20
San Antonio.......
5
+38
+39
+26
+30
+ 2
Shreveport.. .. ....
S
+39
+ 18
+17
....
. ...
Other cities........
21
+29
+22
+19
+30
+24
Indepeudent stores:·
248
Ne" Mexico . . ..... 180
Oklahom • ... ...... 550
Te....... .. ..... .. 1,121
Arizona .. . ... .... .
Whole""le trade:·
Machinery, eqpt. '"
supplies .. . .. . . . . .
Drugs Ciucl. li~uors).
Electrical supp ies ..
Groceries ... . .. .....
Hnrd"nre . . . . . .....
Surllioal equipment .
Tobaeoo & produots.
·Compiled by United
5
10
5
28
12
4
+25
+10
+17
+28
-1
-5
+7
+13
+19
+12
+15
+ 20
+42
+a
+ 88
+16
+51
+35
-1
+ 10
+3
+ 13
+48
+ 10
+'5
+6
+12
+35
+27
+11
+ ~
tl~
4
States Bureau of Consus.
- 2
- 1
t I:ltooks at eloso of month.
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1923·1925 average = 100)
August
July
June
Sales (daily averalle):
Without se.sonal adjustment .... . .. .
With season.l adjustment ....... . .. .
Stock. (end of month)
Wi thout ..,ason. 1 adjustment ....... .
With 8en.onal adjustment . ....... . .•
+'3
+'2
August
1D41
1941
1941
1940
128
166
93
132
110
123
94
122
81
80
73
80
70
75
67
68
bales compares with an estimate of 537,000 bales as of August
1 and a 1940 harvest of 802,000 bales. Little change occurred
in the anticipated production in New Mexico and Arizona,
but heavy insect activity in Louisiana caused further damage
to the crop, which reduced the indicated production to
384,000 bales as against a ten-year average harvest of 703,000
bales.
Prospective production of cotton in the United States waS
placed at 10,710,000 bales on September 1, which indicates
a decline of 1,856,000 bales from the 1940 harvest. Despite
the anticipated decline in production, the 1941-1942 domestic supply of cotton is expected to be only fractionally smaller
than in the preceding season due to the fact that an increase
in the carryover of cotton largely offsets the indicated decline
in production. On the basis of the carryover from the 19401941 season and the September 1 forecast of production in
1941, the domestic supply of cotton this season will aggr~
gate about 22,900,000 bales, as against 23,000,000 bales I~
the preceding season. The. anticipated supply of cotton ~hls
year compares with a distribution of 10,870,000 bales dunng
the twelve months ended July 31. According to data compiled by the New York Cotton Exchange, the world suppl.y
of American cotton during the 1941-1942 season will apprOXImate 23,500,000 bales, which represents a decline of 1,600,0.00
bales from that in the preceding season. A substantial declIne
occurred in foreign stocks of American cotton during the past
season, reflecting chiefly the inability or unwillingness of foreign countries to replace American cotton that was consumed.
The condition of livestock and their ranges in the Eleventh
District continued good to excellent during August, and the
outlook for fall and winter range feed is promising. ProspectS
are also good for an abundant supply of supplemental feed~,
including grain, hay, forage and silage. The reported condItion of ranges at the beginning of September was the highe.s t
of record for that date. Cattle made about average gains Ifl
weight during August, and their condition on September 1
was well above average. The development of sheep and lambs
has improved under more favorable range conditions. The Department of Agriculture reports that a strong demand for
livestock persisted in August. Contracting of fall-shorn wool
and mohair was active at slightly higher prices during the fi~r
half of September. Prices are somewhat above those prevaling a year ago.
FINANCE
Earning assets of the Federal Reserve Bank of Dallas increased slightly between August: 15 and September 15, reflecting a further seasonal gain in discounts for member bank
but the total of such discounts is very small, Member ban
reserves maintained at this bank fluctuated widely during the
month ended September 15, with daily average reserves record
ing a new high at $251,000,000 during the initial half .0
September. Despite these variations, the net increase in dally
average reserves was comparatively small, and excess reserves
showed little change over the month.
Federal Reserve notes of this bank in actual circulation have
risen to successive peaks each month since January this year,
and on September 4 were at the record level of $115,360,000.
This amount is $20,300,000 above the low point in January
and $ 3 0,000,000 higher than a year earlier. The gain this y~r
has occurred despite the fact that note circulation or 1narily declines during the first half of the year. During the
last half of ·the year circulation normally expands partly.on
account of the large amount of currency used in connectiOn
with the harvesting and marketing of crops. The curren.c~
withdrawn from banks for those purposes usually remal~
in circulation for a considerable period since much of it IS
not immediately redeposited in banks but is held by laborers
k
f
MONTHLY BUSINESS REVIEW
and tenants until spent, and considerable amounts received by
banks are paid out again in the normal course of business.
The higher level of business and industrial activity that prevails during the fall months also increases the demand for curr~ncy. During the past three years Federal Reserve notes of
this bank in actual circulation showed an average expansion of
about $9,300,000 between the end of August and Christmas
and last year the increase amounted to $ 13,500,000.
Total loans and investments at weekly reporting member
banks in the Eleventh District continued to expand during the
four weeks ended September 10. For more than a year the
total of these assets has followed an upward trend, recording
a new high in each successive month since last January. On
September 10 aggregate loans and investments, which amounted to $634,600,000, were $102,400,000 greater than a year
earlier. Approximately two-thirds of the gain over the year
Was in loans, with the remainder representing an increase in
security holdings. On September 10 investments of these banks
Were slightly above the previous peak recorded near the close
of 1936 and loans were at the highest level since the closing
months of 1930. While it is customary for loans and investments at reporting banks to rise at this season of the year,
the upward trend in evidence during the first half of the
Current year was contrary to the usual movement, reflecting
a sustained demand for loans coincident with increased purchases of securities.
Although the expansion in loans and investments at weekly
reporting banks during the past year was marked, the gain
Was about $42,000,000 less than the increase in deposits at
these banks. The latter amount has been utilized by building
up reserves with the Federal Reserve Bank and balances with
other domestic commercial banks.
The high level of business and industrial activity and expanded consumer purchases resulting from higher incomes
have brought about a pronounced increase in debits to individual accounts at banks in eighteen cities of the Eleventh
District. During each of the past ten months charges to
depositors' accounts have been at a rate in excess of one billion
dollars, and in August they exceeded those of a year earlier by
34 per cent. Indicating the extent to which bank deposits are
being employed by individuals, partnerships and corporations,
the deposit turnover at · weekly reporting member banks,
which is computed by dividing total debits during a given
period by the average volume of deposits over the same
period, was 12.26 times during the first eight months of 1941
as against 11.49 times in the corresponding period a year
earlier, representing an increase of 7 per cent. This increase
in turnover occurred qespite the substantial expansion in deposits.
According to data released by the United States D~partment
of Commerce, income payments in Texas during 1940 aggregated $2,715,000,000. This figure exceeds the 1939 total by
$100,000,000 and is $79,000,000 greater than in 1929, The
gain over the preceding year reflects increases in salaries and
Wages, other labor income, and dividends, interest, etc. Entrepreneurial income declined $5,000,000 over the year and was
$68,000,000 less than in 1929. The increase in salaries and
Wages and other labor income between 1933, the depression
low, and 1940 amounted to 78 per cent or $722,000,000,
whereas, the gain in other types of income, including business
profits, interest, dividends, etc., was nearly 100 per cent. In
the four states partially included in this district income payments during 1940 registered increases ranging from 1 per cent
in Louisiana to 9 per cent in New Mexico, The aggregate
income for the five states attached to the Eleventh District
8
was up 4 per cent as compared with the preceding year,
whereas, the gain for the nation as a whole amounted to 7
CONDITION OF THE FEDERAL RESERVE BANK
(In thoullands of doUars)
Sept.15,
Sopt. 15,
1941
1940
Total oash reserves ... ... ... ... . . ... .... ......... . $347,004
$273,972
Diloounts for member banks ...... .. .............. .
673
097
Other bil," diacounted .................... . .... ... .
6
9
Induotrial advances ........ . ..............• . . . .. . .
208
401
85,820
United State. Government seourities ........ , ...... .
94,972
Total earnini assets . ......... .................. ..
80,806
90,138
258,356
Member bank roserve deposits .. ........ . ... . . .... .
220,951
113,;44
Federal Res.rvo notes in aotual circulation ......... .
85,321
Augu.t 16,
1941
$360,437
515
None
333
85,830
80,678
25a,7H
109,090
CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In thousands of doUars)
Sept. 10,
Sept. 11,
Augu.t 18,
IOU
1040
1941
Total loans and investments . . . . . . . . . . . . . . • . . . . . . . . $634,626
$532,212
$624,077
Totallo.n.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 338,628
272,40 I
330,340
Commercial, industrial and agri~ulturalloans. . ....
220,277
170,755
222,419
Open market papor. ... . .. . . . . . . .. .. . . . . . . .. . .. .
2,263
2,074
2,470
!IE Lo.n. to brokcrs and dealers in BOouriti08 . .........
4,146
2,049
3,598
I:i Other lo.n. for purohasiai or carrying socurities... .
13,052
13,034
13,732
U:!:~~a~a~o:.~s.'. : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :
23,~~~
All other loans . ................................
64,7U
United State. Government direot obligations... ... ...
188,515
Obliiation. fJlly guaranteed by United States Govt. .
47,5~~
Other .eourities. . . .. . ........ . .......... .. .......
60,049
ReMrves with Federal Reserve Bank.... ...... .. .. ..
157,712
Balanoes "ith domestio banks ........... ,.. .. ......
308,801
Demand deposits-adjusted' . . . . ..................
502,050
Time dejlOslta....................................
131,736
United States Government deposits... .. . .... .. .. ...
40,041
Intarbank deposits.............................. . .
285,343
Borrowing. from Federal Reserve Bank. ............
None
'Includes all 'demand deposits other than interbank and United
eaah items reported a. on hand or in process of colleotion.
~:6:6
23,~~~
50,828
153,886
64,H9
187,350
40,143
00,232
162,377
310,732
50a,I00
133,555
~8,206
57,020
135,745
287,780
490,613
13~,004
31,851
38,34~
240,055
280,731
None
None
States Government, less
DEBITS TO INDIVIDUAL ACCOUNTS
(In thousand. of dollars)
July
AUiust
AUiust
Pcti.ohani.
1941
10~0
over year
1041
Abilene ................. $ 11,413
12,420
$ 7,885
+45
37,583
34,543
34,338
Au.tin ......... .........
+0
Beaumont ....... . ...... .
30,514
21,835
31,830
+40
3,673
3,136
3,755
Corsicana ...............
+17
310,382
227,8~7
Dalla9................ , .
330,700
+40
38,720
26,218
41,502
EI Paso .................
+48
U,594
98,533
102,823
Fort Worth ..............
+32
30,258
28,410
30,604
Galveston ...............
+20
314,488
230,152
320,572
Houston .................
+37
10,048
0,800
11,361
Port Arthur ... .. .. .. ....
+11
4,621
8,829
4,538
Roswell. ................
+21
70,021
87,053
01,380
San Antonio .............
+20
41,152
50,390
51,375
Shreveport ............. .
+22
8,042
6,016
9,a72
Texarkana· .. .. . ..... ... .
+20
12,024
10,320
14,069
Tueson .. .. ..............
+25
12,606
10,853
14,427
Tyler ...................
+17
17,406
13,561
IO,75~
W.eo . ........ ..... .....
+20
29,450
15,153
21,700
Wichita Falls ...... , .....
+35
~~~~'~~~t~
---
-8
+9
-4
-2
-3
-7
-4
-
1
-2
-4
+2
-4
-2
-5
-8
-12
+4
-6
$831,330
Total. .. . . . ... . , $1,110,931
$1,143,706
-3
+34
'Ineludes tho figures of two banks in Texarkuna, Arkunlla., looated in the Eighth Diltriot.
GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS
(Averaio of daily fiiures-in thou.and. of dollars)
Combined total
Reoerve eity banks
Country banb
GroSl
domand
AUiust, 1030 ............ $1,208,731
AUiust, 1040 ............. 1,315,55~
April, 1941 .......•..... 1,541,825
May, IOU ............. 1,545,384
June, IOU ............. 1,554,471
July, 1941 ............. 1,555,000
Auaust, 1041 ............. 1,567,402
Time
$232,308
234,123
243,042
245,367
242,430
230,153
238,030
Gross
demand
$701,907
708,031
891,686
001,377
008,683
012,501
021,863
Time
$128,122
128,063
135,990
135,007
135,810
133,588
133,758
GroSi
demand
$506,734
547,523
050,139
644,007
645,788
642,400
646,530
Tim.
$104,180
105, 160
107,05a
109,670
106,029
105,505
105,181
SAVINGS DEPOSITS
AUiust 3), 1041
Beaumont ...............
Dalla...................
EI Poso .................
Fort Worth ............. .
Galveston
Houston . ... :::::::::::: :
Port Arthur ... .... .... ..
San Antonio .............
Shreveport . . ............
Waoo ............ .......
Wichita Falls ... ........ .
All others ............' ...
Total
... .. ... .
Number of
rec::rting
anks
3
8
2
3
4
10
2
5
3
a
3
68
114
Percent~6 ohange in
savings eposits from
Number of Amount of
July 31,
savings
August 31,
savinJ.t8
depOSIts
depositors
1040
1941
10,536 $ 4,253,441 + 4.3
+ .1
02,305
26,150,988 - 1.3
.7
10,950
7,273,608 -11. 1
- 1.9
34,718
12,907,854
.7
- 1.0
11,564,546 - 5.0
.2
18,780
78,214
32,422,720 + 2.8
.1
3,050,803 - 0.6
.1
6,008
23,652
17,795,380 + .1
.02
25,U4
11,084,334 - 2.8
+ .3
4,304,353 - 4.8
.4
7,897
7,207
3,W,234 - 5.7
+ .6
.5
59,135
29,430,057 - 3.7
-
-
-
384,236
$164,078,438
-1.9
-
.4
4
MONTHLY BUSINESS REVIEW
per cent. A more favorable relationshi? may ~e re~or~ed .in
1941 in view of the importance of agnculture m thiS dlstnct
and ~he substantial increases in prices of agricultural commodities that have occurred thus far this year.
INDUSTRY
The value of construction contracts awarded in this district
during August reached a new peak at $84,700,000. This total
is 87 per cent above the previous high reached in April this
year and is equivalent to 31 per cent of the aggregate value
of contracts awarded during the year 1940. The heavy volume of work started in August reflects chiefly the letting of
contracts for a wide variety of publicly-financed projects incident to the National defense program. Awards for publiclyfinanced construction during August accounted for about 85
per cent of the total. Among the general classes of construction work, public utilities construction showed the greatest
gain during the month, but awards for nonresidential bui~ding
and public works construction also advanced sharply. Reslden~ial building, which does not ordinarily fluctuate to the extent
of other classes of construction work, rose 77 per cent from
July to August, probably reflecting heavy awards for defense
and military housing. The value of contracts awarded in the
first eight months of 1941 totaled $27 0,201,000, which was
about two-thirds greater than in that period a year earlier.
. Operations at Portland cement mills in Texas during the
first eight months of 1941 followed a marked upward trend.
Production recorded new highs in four of the eight months,
and aggregate output for the eight months exceeded by. 28
per cent that in the same period of 1939, when the prevlOUS
peak was established. A heavy demand for cement has also
been apparent this year. Shipments have been in record volume,
exceeding the high rate of production by a substantial margin,
with the result that mill stocks were reduced 200,000 barrels
between January 1 and August 31 this year. Although production of lumber at pine mills in this district has not shown
a continuous upward movement during the current year, output has been well sustained and shipments have been well in
excess of those in the first eight months of 1940. Mill stocks
of lumber at the close of August averaged nearly one-third
smaller than a year earlier.
Activity at domestic cotton mills during August declined
moderately from the all-time peak established in July. Nevertheless, the volume of cotton consumed was at the highest
level of record for that particular month, exceeding by about
one-third the amount utilized in August last year. The Bureau
of Census reported cotton consumption at 874,100 bales in
August, as against 928,900 bales in the preceding month and
650,900 bales in August last year. Consumption of cotton
linters during August amounted to 131,300 bales, as compared with 86,800 bales in the corresponding month last year.
Mill sales of cotton fabrics appear to have been smaller in
August and early September than in some other recent months
due to uncertainties regarding the establishment of ceiling
prices on additional ~onstructions of cotton textiles and t,he
reluctance of some ffillls to make further long-range commitments' nevertheless, the demand outlook for cotton textiles
appea:s to be generally fav?ra~le. According to the. Department of Agriculture, the pnnclpal factors that contnbuted to
the high level of cotton consumption during the past season
are still operating. It is probable also that cotton will be substituted to some extent for imported commodities, including
silk, jute, hemp, and flax, in the ma~~facture of certa~n textile products. In view of these condmons, together With the
heavy backlog of orders on the books of processing establishments, consumption of cotton may be expected to remain at
a comparatively high level over the next several months. In-
ventories of raw cotton at consuming establishments declined
seasonally in August, but at the month-end they were mo rc
than double those a year earlier.
Spot cotton prices in the United States showed a pronounced increase between August 15 and September 15. On
the latter date the price of cotton, middling, H ·-inch staple,
at ten spot markets averaged 17.54 cents per pound, wh~ch wad
nearly two cents per pound higher than a month earher an
eight cents per pound above the average price on September
. d
15, 1940.
The total demand for petroleum products in ~he Unite I
States during the first half of 1941 was at the highest leve
of record, notwithstanding a sharp contraction in exportsj
According to data compiled by the United States Bureau 0
Mines, domestic demand for virtually all petroleum produc.ts
participated in an average gain of 10 per cent over ~hat In
the initial six months of 1940. The aggregate demand, mcl ud£
ing exports, was up only 6 per cent, however, as a result 0
a one-third, or 24,000,000.-barrel, decline in foreign shipmentS
of crude oil and refined products. Imports of crude petroleum
and petroleum products during the first half of 194~ were
about one-fifth greaten than in that period a year earher.
After declining somewhat during July, the daily average
production of crude oil in this district increased considerably
during August to a level one-fifth higher than a year ago.
Refinery operations rose to a new peak, being 23 per c~nt
higher than in August, 1940. The rate of drilling activity Increased slightly further during the month, exceeding that of
a year ago by nearly one-fourth. Operations in the petrole~m
industry outside the Eleventh District also registered gaJns
during August, and ~lthough fai~l~ large ~n~reases in producci
tion, refinery operatlOns, and dnllmg activity were recorde
as compared with a year earlier, the percentage gains were
not so large as those recorded in this district.
Although production of gasoline in the United States w~s
near the July peak in August, aggregate inventories of thiS
product declined further during the month, reflecting a sustained demand for motor fuel, and at the month-end stocks
were 4 per cent smaller than a year ago. In actual vo!u me
inventories of heating oil on August 30 were moderately higher
than a year ago, but in, relation to current demand they are
somewhat smaller. Stocks of industrial fuel oil at the close
of August were 13 per cent smaller than a year ago.
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of dollars)
August
August
July
January 1 to August 31
1041
1040
1041
1040
1041
Eleventh Distriot-total .. . S 84,660
S
270,201 S 164,600
S 26,242
S 23,138
Residential. . ...... ... .
80,035
56,136
16,476
8,400
0,312
All other .... ........ ..
180,266
108,473
68,184
17,833
13,826
United States*-total. ... .
760,233
414,041
577,392
3,887,587
2,436'97
Residential. . ......... .
231,529
152,088
205,049
1,385,572
083,
All other ............. .
528,704
261,053
372,343
2,502,015
1,452,711
'37 states east of the Rocky Mountains.
SOURCE: F. W. Dodge Corporation.
gJ
Abilene ........
Amarillo . .... ..
Austin ........ .
Bonumont ......
CorGus Christi. .
Dal as .........
EI Paso ........
Fort Worth .....
Galveston. . . . . .
Houston ...... . .
Port Arthur ....
San Antonio ....
Shreveport .. .. .
Waoo ... .... ...
Wiohita Falls ...
Total
....
BUILDING PERMITS
Percentage
Percen tage ehange
August, 1041
valuation from
Jan. 1 toAug. 31, 1041 ohaD~e
valuatIOn
No.
Valuation Aug.,1040 July,IOU No.
from 1040
Valuation
38 S 106,663
+ 87
- 17
370 $ 884,401
+ 28
73
187,244
+ 1
- 35
- 24
578
1,820,717
_25
212
415,534
1,525
+ 22
+ 10
3,877,380
173
339,665
+ 57
1,125
1,644,360
+242
+ 60
205 1,029,775
+ 77
- 3
1,803 10,530,760
+ 26
780 2,214,053
6,101 10,157,080
+ 52
+1l7
_15
114
387,683
- 60
1,029
2,000,007
+ 13
. 288
+ 42
598,215
2,240
4,689,666
+ 49
+ 1
185
+131
181,375
1,651
- 48
- 26
3,657,678
_16
307 1,369,169
- 53
3,781 13,851,240
- 13
154
107,573
- 13
072
831,309
+ 5
+ 4
1,152
622,128
9
5,671
4,812,387
+ 7
123
32.3,917
- 33
- 13
003
2,401,227
73
+142
160.006
- 77
3,533,100
+114
563
1,154,210
71
+161
512
2,125,254
+040
+305
-----4,047 $9,208,010
+•
-
:!: 2~
3
+ 22
20,013 $67,006,484
-
+ IS
MONTHLY BUSINESS REVIEW
OCTOBER I, 1941
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
INDUSTRIAL PRODUCTION
... ....,
... "'"
I 60
'"0
I 70
170
IGO
I60
f
ISO
I' 0
tJ
140
ISO
120
\
110
/
100
/
I IV
\
\
i-I
90
/
'0
I 20
.r
I 10
I 00
90
".l
., .,./
60
I40
I
60
70
70
1935
1936
1931
1938
1939
1940
1941
Federal Reserve index of physical volume of production , adjusted for seasonal variation, 1935·39 average
100. By months, January, 1935 to August, 1941.
=
. ..
'OfII Tt .. TOT
IGO
FREIGHT-CAR LOADINGS
'0,." III 'o,,~"'".
•• I
~
I 60
40
140
120
100
80
..,-/
,-\,l
"-AI'"'
60
~
rv' iV
./
40
f' i f
~
- .......- ;;,p'
p./
1936
1937
1038
1939
I00
.-./
60
1940
20
194 1
Federal Reserve index of total loadings of revenue
freight, adjusted for seasonal variation, 1935-39 average
100. Subgroups' shown are expressed in terms
of points in the total index. By montbs, January, 1935
to August, 1941.
=
WHOLESALE PRICES OF BASIC COMMODITIES
;~'O"~" m"';~~
140
-
120
T:
140
~ .
-
120
'-:==::==~;:::::::;==~=:::~==::=~ 160
100
100 r
j---j.--+-.,/-I160
\+---~--+--+-~~140
120
100
p.,...,_L.f:::::"''---l---w
80
~_~
1935
_ _-=~~
/936
19 H
__-L_ _
193 8
193 9
L-_-L_~80
1940
PRODUCTION
In August industrial output increased somewhat more than seasonally and the Board's adjusted
index advanced from 160 to 161 per cent of the 1935-39 average. There were sharp further advances
in activity in the machinery, aircraft, shipbuilding, and railroad equipment industries. Lumber production also increased, while furniture production, which had been unusually large in July, showed
less than the customary seasonal rise in August. Output of steel and nonferrous metals continued
at near-capacity rates.
In the automobile industry output of finished cars declined sharply as plants were closed during
the changeover to new model production and output in factories producing bodies and parts also
was reduced considerably. In the first half of September automobile assemblies increased as production
of new models WaS begun but from now on, owing to Government restriction on passenger car production, output will be considerably below that during the previous model year.
In most nondurable goods industries production in August continued around the high levels
reached earlier this year. At cotton mills activity declined slightly from the record level reached in
July, while at woolen mills there was some increase. Rayon output continued at peak levels. In the
silk industry operations were curtailed sharply, as the Government requisitioned all supplies of raw
silk, and deliveries of silk to mills declined from 28,000 bales in July to 2,000 in August. Rubber
consumption also decreased, owing to a Government curtailment 'program. Shoe production, which
had been unusually large, increased less than seasonally in August, and output of manufactured food
products and chemicals showed seasonal increases from the high levels prevailing in June and July.
80
40
1'"--
1035
20
;;f
I
ALL OTHER
20
{- :
Industrial activity increased further in August and the first half of September, and commodity
prices continued to advance. Distribution of commodities to consumers expanded considerably .
1941
Bureau of Labor Statistics' indexes based on 12 foodstuffs and 16 industrial materials, August, 1939
100. Tbursday figures, January 3, 1935 to September 11, 1941.
=
At mines coal production in August, as in other recent months, was unusually large for the
season, and output of crude petroleum rose to a record level of 4,000 ,000 barrels daily in the latter
part of the month. Iron are shipments down the Lakes amounted to 11,500,000 tons, the largest
monthly total on record •
Value of construction contract awards showed a further sharp increase in August and waS about
four-fifths larger than a year ago, according to F. W. Dodge Corporation reports. The rise from
July was substantial for all general types of construction but was most pronounced for publiclyfinanced projects. Awards for residential building continued to increase.
DISTRIBUTION
Sales of general merchandise rose sharply in August and were at an extremely high level for
this time of year. The Board's seasonally adjusted index of department store sales advanced to 1 H
per cent of the 1923-25 average as compared with 115 in July and an average of 103 in the first
half of this year. In the early part of September department store sales declined from the peak
reached in the latter part of August.
Railroad freight-car loadings in August were maintained in the large volume reached in June
and July. Coal shipments increased, following some reduction in July, while loadings of grain, which
had been large since last spring, declined.
COMMODITY PRICES
Wholesale prices of most groups of commodities continued to advance from the middle of
August to the middle of September. Prices of grains, other foodstuffs, and cotton showed large
increases and there were advances also in prices of a number of industrial commodities not covered
by Federal price ceilings. Fragmentary data available indicate that retail prices of foods and other
commodities rose further during this period.
AGRICULTURE
The outlook for agricultural production in 1941 showed little change during August. Crop
prospects were reduced slightly by drought but aggregate crop production is expected to be two
per cent larger than last year and the largest for any year except 1937. Total marketings of livestock
and livestock products will probably be the largest On record. Preliminary estimates of the Department of Agriculture indicate that cash farm income, including Government payments, will be about
$10,700,000,000, compared with $9,120,000,000 in 1940.
MONEY RATES IN NEW YORK CITY
BANK CREDIT
Commercial loans at reporting member banks i~ 101 cities continued to rise substantially during
the four weeks ending September 10. Bank holdings of United States Government securities showed
little net change, while holdings of other securities increased somewhat at New York City banks. As
a result of the expansion in loans and investments bank deposits continued to increase.
1935
1936
1937
1938
1939
194 0
1941
Weekly averages of daily yields of 3- to 5-year taxexempt Treasury notes, Treasury bonds callable after
12 years, and avera pc discount on new issues of Treasury bills offered WIthin week. For weeks ending January 5, 1935 to September 13, 1941.
UNITED STATES GOVERNMENT SECURITY MARKET
Prices of Treasury bonds increased in the latter part of August but subsequently declined somewhat in the first part of September. On September 15, the partially tax-exempt 2 % per cent 1960-65
bonds were yielding 2.06 per cent compared with the record low yield of 2.02 per cent. Yields on
Treasury notes showed little change in the period.
MONTHLY BUSINESS REVIEW
COMPARATIVE TOP LIVESTOCK PRICES
(Dollars por hundredweight)
_---Fort Worthl---~--- San Antonio ~
August
July
Au~u.t
August
July
Aug"st
1941
1940
1941
1941
1940
1941
$11.
25
$10.60
$11.50
$10.00
$
8.25
$
9.75
Beef steers .............. .
9.25
11 .00
Stooker steers ....... .... . 10 .50
12.25
10.00
12
.00
10.65
"0:00
Heifers . nd ye.rlings .... .
8.50
6.50
8.25
7.75
6.00
8.00
Butcher cows ........... .
9.00
11 .25
It .OO
9.00
1t .00
C.lves .... . ............ . 10.50
11.85
7.35
11 . 10
11 .50
6.75
11.00
Hogs ................•...
8.00
10.50
8.00
7.50
8.50
L.mbs ..... . .... ... ···· . 10.50
'io:so
CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS
AND GOVERNMENT BENEFIT PAYMENTS
(In thousands of doUars)
~Juno ,1941 ----
CONSUMPTION, STOCKS AND EXPORTS OF COTTON-(Bales)
August
August
July
August 1 to August 31
Consumption at:
1941
1940
1941
This season Last season
Tox.s mills.... ... .....
20,233
15,213
29,607
20,233
10.2 13
United States mills. . . . .
874,113
650,888
928,943
874,113
650,888
U.S. stooks_nd of month:
738,051
1,874,187
In oonsuming est.b'rots . 1,697,056
9,131 ,474
9,704,095
Publio ,tg. '" compresses. 9,296,898
.. 65:425
Total exports. . . . . . ... . . . .
34,9U7
65,425
32,718
Receipts from:
Arizon.. . . . . . .
Loui.inn.......
New Mexico. . .
Oklahoma.... .
Tex.s. . . .. . .. .
Crops
4,774
5,151
635
5,455
22,803
Govern· -----Totnl roooipts,----ment
June
Juno
Jnn. I to June 30
Livestook· payments
1941
1940
1941
1940
2,361
114
7,252
3,396
39,938
27,557
2,580
3,725
11,456
9,306
55,793
49,008
2,Oa6
140
2,811
2,096
19,634
17,489
10,380
551
16,386
10,977
88,689
73,385
27,927
1,654
52,384
29,482
265,691
205,215
LIVESTOCK RECEIPTS-(Numbcr)
----Fort Worth---~--- San AntonioAugl'st
Au~ust
July
August
August
July
1941
1940
1941
1941
1940
1941
45,087
53,918
17,741
10,603
23,254
C.tt1e .... . .. .... .... . .. . 54,579
37,726
22,242
20,053
17,129
17,832
C.lves ............... . . . 20,702
30,293
28,026
11,751
11,411
11.700
Hogs ............ . ...... . 29,493
57,279
88,571
9,332
6,890
10,383
Shoep ..... ..... . ..... .. . 42,206
Total ... 38,818
45,287
6,184
90,289
55,257
.Includes receipts from the sale of livestock and lives took produots.
SOURCE: United States Department o( Agrioulturo.
469,745
372,744
CRUDE OIL PRODUCTION-(Barrels)
August, 1941
Increase or deorease in daily
average production from
D.i1yavg.
Total
produotion
produetion
July, 1941
August, 1940
179,632
5,56R,600
+ 22,153
- 2,957
North Toxas ................ .
9,262,100
208,778
+ 77,055
+ 28,3~9
West Tex.s ....... . ..... . . .. .
446,636
564
+ 34,612
East Texas ................. . 13,845,700
215,108
6.668,350
+ 36,931
South Texas ...... . ....... . . .
+ 19.973
8,805,900
284,061
+ 96,~30
+ 23,487
Texas Co.stal.. . . .... . ...... .
+
Total Tox.s
New Moxioo....... ..... .. ...
North Louisiana....... .. .... .
44,150,650
3,461,900
2,406,950
1,424,215
111,674
77,643
+2~3,033
+ 10,519
+ 13,070
Tot. 1 Distriot...... 50,019,506
1,613,532
+256,622
SOURCE: Estim.ted (rom Amerioan Petroleum Institute weekly repor1s.
+103,454
+ 2,637
+
904
+106,995
RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF
HOUSTON AND GALVESTON-(Bales)
August
July
August 1 to August 31
August
1941
1940
1941
This season Last season
Receipts ..... . .. .. ...... .
102,409
. 203,939
150,Oll
102,409
203,939
Exports (foroign .nd coast73,163
wise) . . . . . . . . . . . . . . . . . .
64,158
67,061
64,158
73,163
Stooks, ond of month. . . . . 1,800,556
1,352,366
1,661,367
STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS
----Texas---~---United StatesAugust 1 to August 31
August 1 to August 31
This senson
Last season
This season
Last season
Cottonseed reoeived at mills
127,283
(tons) . .. ..... . .. . .........
105,489
29,380
96,387
79,580
Cottonseed orushed (tons) .....
21,180
51,277
107,498
Cottonseed on hnnd August 31
87,210
(tons) ........... . ...... ...
61,522
35,427
129,367
Production of produots:
24,133,000
Crude oil (pounds) .........
15,025,000
33,779,000
6,286,000
37,206
Cake .nd meal (tons) . . .... .
25,035
46,186
9,909
19,835
Hulls (tons) . ..............
4,5ll
12,2ll
27,723
18,613
Linters (running bales) ......
30,226
5,535
11,280
Stooks on hand August a1:
17,184,000
14,705,000
Crudo oil (pounds) . ... ... . .
8,125,000
3,476,000
58,069
131,618
C.ke and meal (tons) . .... . .
26,308
19,764
18,869
Hulls (tous) .......... . ....
9,920
132,713
55,926
87,026
Linters (running bales) ......
71,485
38,483
23,977
SOURCE: Bure.u of Census.
@FedFRASER