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Monthly B usines OF THE Volume 23, No.7 FEDERAL Review BANK RESERVE DALLAS This copy is r eleased for publication in af ternoon paper s-- Dallas, Texas, September 1, 1938 DISTRICT SUMMARY Conditions in the agricultural and livestock industries of this district continued generally fa vorable during the past month and, on the basis of the August 1 estimate of the Department of Agriculture, production of principal crops other than cotton will be larger than a year ago. The value of construction contracts awarded turned sharply upward in July, after having declin ed considerably in the preceding three months. Petroleum production, which had increased sharply in the forepart of July due to the abandonment of the Saturday shut-down, rose moderately from the middle of July to the middle of August. Department store sales declined less than seasonally in July and then increased in the first half of August. BUSINESS The business of department stores in principal cities of the Eleventh District held up better than usual in July, resulting in a rise of this bank's adjusted index of sales to 103 per cent of the 1923-1925 average. This figure compares with 101 per cent in June and 106.7 per cent in July last year. The index showed a sharp decline from January through April, but the trend has been upward in the past three months, with the average for the period being only 4, points below that in the corresponding period in 1937. On the basis of sales in the first half of August, indications are that the index will show a further increase for that month. The dollar volume of sales in July reflected a decline of 22 per cent from that a month earlier and was 6.5 per cent less than in July, 1937. On a daily average basis the decrease from a year ago was only 2.7 per cent as July this year had one fewer business days than July last year. The declines from both the previous month and the same month last year was general among reporting stores in the several sections of the district. Inventories at department stores declined fu r ther by an amount larger than is usual at this season and as a consequence the adjusted index of stocks declined for the third consecutive month, and on July 31 stood at the lowest level in nearly two years. The rate of collections on open accounts outstanding evidenced a further seasonal decline in July, whereas the rate of payments on installment accounts remained unchanged. In each case, however, the ratio of collections to outstanding accounts was smaller than a year ago. The demand for merchandise at wholesale in this district was somewhat sluggish during July. Combined sales of all reporting firms in seven lines of trade reflected a decline of 3 per cent from the preceding month and were 11 per c~nt less than in July, 1937, which is about the average ?e.clme for the first seven months of the year. Among the indIVIdual lines of trade the distribution of tobacco and tobacco products showed ; further increase over that a month earlier and a year ago, while declines from July last year, ran~ing from 4, per cent for groceries to 48 per cent for machmery and equipment, were recorded in other lines of busil1 e~s . Sales?f electrical supplies and dry goods exceeded those m June; m the case of dry goods, howcver, the rise was considerably .less than ordinarily occurs at this time. Inventorie~ in so.~e h~es Were increased seasonally during the month m antICIpatIOn of the usual fall buying season, but stocks generally were OF A ugust 30 lower on July 31 than a year ago. Collections during July were about the same as those of a month earlier, but in relation to accounts outstanding they showed a sizable increase. Although the. number of commercial failures in this district showed little change from June to July, liabilities of defaulting firms decreased further. Dun and Bradstreet, Incorporated, reported 14 insolvencies during the month, with an aggregate indebtedness of $129,000. INDUSTRY A further contra-seasonal increase was reflected in the domestic consumption of cotton during July, although mill sales of cotton goods apparently declined and were lower than production during the month. Prices of cotton goods, despite reductions in some constructions recently, have been fairly well sustained, but the trend of raw cotton prices has been downward since early in July and the average price at the ten spot markets at the middle of August was only about 50 points higher than the low level reached in May. Exports of cotton from the United States likewise reflected a large counter-to-seasonal increase in July which resulted chiefly from larger takings by the United Kingdom, Italy and Japan. July shipments were also 57 per cent greater than a year ago . The world utilization of American cotton during the 1937· 1938 season was somewhat smaller than in the preceding season due entirely to a reduction in domestic consumption. Coincident with the general slowing down of industrial activity in the United States, the operations of domestic cotton mills were reduced in an effort to liquidate inventories and to bring production into closer alignment with demand. As a consequence, cotton consumption during the twelve months ended July 31 totaled only 5,756,000 bales which was 28 per cent less than the record total of 7,950,000 bales consumed in the preceding season. On the other hand, exports of American cotton showed a slight in crease, notwithstanding a noticeable decline in foreign textile activity in recent months. The larger exports resulted from the increased takings of European countries which more than offset the sharp reduction in shipments to the Orient. Factors accounting for the heavier exports to European countries include the favorable price relationship between American cotton and foreign grown cotton that obtained during the greater part of the season and the replenishment of warehouse supplies of cotDOMESTIC CONSUMPTION AND EXPORTS OF AMER ICAN COT TON MILLIONS Of' RUNNI NC BALES ::"LLIONS Of RUNNING BAL ES I2 f2l DOMESTIC CONSUM PTtON • EXPORTS 10 I 8 8 ~ 4 I~ 2 0 ~~ ~ ~ ~ ~ 31'32 ~.~ . ~ ~ I? 35 38 o 3738 '39 40 2 MONTHLY BUSINESS REVIEW ton in some countries. Nevertheless, exports of cotton continued at the relatively low level that has prevailed since the 1933-1934 season. Shipments aggregated 5,598,4,00 bales in the 1937-1938 season as against 5,440,000 bales in the previous season and a ten-year average of 7,010,000 bales. In the ten years prior to the 1934.-1935 season, exports were considerably larger than domestic consumption but in the past four seasons they have been smaller. This relationship has been due to the lower volume of exports rather than to an expansion in the domestic use of cotton. Although domestic consumption in the 1936-1937 season was at a record level, the average for the latest five seasons is about the same as the average for the preceding ten-year period. In recent years the foreign production of cotton has shown a rapid expansion with the result that the percentage of American cotton consumed by world textile mills has shown a substantial deWHOLESALE AND RETAIL TRADE STATISTICS , - - - - Percentage ohange in: ---~,Rntio July collcotions Not sales Stocks' to accounts outstanding July 1 • July, 1938 from Jan. 1 to v July. 1988 from ",..-- - - -_ July. June, July 31,1938 July, Juno, Install1037 1038 from 1037 1037 1038 R.gul.r mont Retail trllde: Department stores: Total 11th Dist .. - 6 .5 -22.2 - 1.2 - 8 .0 Dall............ - 5.9 -20 .7 - 1.9 - 3.6 Fort Worth ...... - 6.4 -20.9 -14. 0 .9 Houcton. . . . . . . .. - 3.4 -26.6 2.3 - 6.5 San Antonio. . . .. - 5.3 - 17.4 - 5.0 .4 Other oities ...... - 11.3 -25. 5 - 13.8 ' - 4.6 Independent storcs:t Arilona. . . . . . . .. -22.4 - 9.5 Oklahoma ....... -16.6 - 9.6 Now MoDco ..... -19.1 - 3.5 Tox............. -14.7 - 9.2 Wholesalo trado:t Maohinery, equipment &; .upplies lexo'ptelect"o.l) -47.7 -52.3 -34. 1 Dry goods ....... -29.0 + 5.5 -15.6 ':':'23:7 Groceries . •. . . . .. - 4.3 - 2.3 - 6.9 - 2 .6 Drug!l .... ....... - 4.8 - 3.4 + 2.1 + 1.5 Hardware ....... - 14.4 - 1.9 - 12.9 - 7. 1 Eleotrical .upplies -15 .9 + 1.2 - 17.5 -22.7 Tobsooodoprod .. + 4.7 + 6.1 tCompiled by United States Dep.rtment 01 Comm~rce. + + - 7.6 - 7.9 - 10 .5 - 12 .2 - 4.6 - 5.3 +i7:8 + + - 5.4 3.4 1.1 6.2 38.3 38.5 35.8 30 .0 41.4 30.5 13.5 15 .7 11.1 io:1i 14.6 33:5 94.2 69. 0 56.7 108:5 ·Btookl at .10' . 01 month. INDEXES OF DEPARTMENT STORE BALES AND STOCKS (1023-25 anrag. ~ 100) With ,cneon.1 .dju,tmont Tot.1 E10venth Di.t.. D.II ................ Fort Worth .......... HOUlton ............. Ban Antonio.. .. .. ... Sales-July, 1038 1037 103.0 106.7 109.9 112.1 112.3 112 .4 105.3 108.9 101. 8 103.5 Stooks-July, 1038 1037 60.8 64.9 58.9 60.6 58.2 67.6 41. 2 41.3 57.8 62.0 Without .... on.1 adjul tmont S.les-July, 1038 1037 72.1 74.7 73.6 75.1 84.2 84.3 73.7 76.2 60.2 70.4 Stooks-July, 1038 1037 50.1 65.3 54.8 56.4 53 .5 62.2 36.7 30.8 50.3 53.9 VALUE OF CONSTRUCTION CONTRACTS AWARDED (In thou.nnd. 01 doll.,,) July July June January 1 to July 31 1938 1987 1938 1938 1937 $ 10,871 $ 12,826 $ 96,056 S 75,128 Eleventh Distriot-total.. . $ 15,095 Residential. ... .. .... .. 4,949 3,586 5,507 32,703 30,211 All other. .. .. .. .. . .... 10,146 7,285 7,319 63,353 44,917 Unitod Statcs·-total. . . . . 239,799 321,603 261,006 1,637,405 1,814,839 Residential............ 87,978 81,046 86,682 487,016 597,353 All other. . . . . . . . . . . . . . 151,821 240,557 165,324 1,050,389 1,217,486 'S7 .t.tes enst of the Rocky Mountains. BOURCE: F. W. Dodge Corpor.tion. July, 1938 Amarillo ...... . Au.tin ....... .. Benumont ..... . Corpus Chri. ti. . Dallas· ...... .. EI Paso ...... .. Fort Worth ... .. Galveston .....• Hou.ton ....... . Port Arthur .•.• Ban Antonio ... . Sh roveport .. . . . Waoo . ....... .. Wiehita Falls .. . BUILDING PERMI'l'S Percentage chongo Porcontago valuation from J an. 1 to July 31,1938 ohange No. Valuation "July, 1037 63 $ 144,153 + 80.8 100 346,517 - 20.5 134 110,987 + 1.0 98 151,240 - 67.9 677 855,475 + 2.1 99 162,763 + 152.0 106 644,664 + 89 .5 146 103,686 + 45.1 420 1,550,320 + 68.1 146 179,856 +192.5 208 521,961 + 84.9 167 217,369 + 31.0 57 276,221 +201 .5 31 37,832 + 49.7 --- - - - Juno,193B~ No. 5.1 - 11.2 + 1.9 - 58.4 - 10 .7 - 11 .8 + 3.9 + 20.5 - 56.3 +123.1 - 47.2 + 10.9 +294.0 - 63.5 Valu.tion 281 $ 1,252,916 1,358 3,334,341 926 797,431 984 1,860,647 4,709 6,908,284 581 891,576 1,468 3,828,325 1,117 1,428,976 3,079 15,338,585 935 1,030,041 1,960 3,231,656 1,025 3,214,320 381 787,923 394 427,062 ---- - - ----32.1 19,198 $44,338,083 Total ...... 2,632 $5,303,044 + 33.9 'lncludOl Highland Park IlDd University Pnrk. Tnluntion Irom 1937 + 138 .5 + 29.9 9.3 - 20.7 6.1 + 13 .5 - 26.3 + 93.2 + 27.1 66.9 9 .0 + 74.4 + 14.5 +118.7 + + + + 15.0 cline. The world carry· over of American cotton on August 1 this year totaled about 13,500,000 bales, which was slightly larger than the previous record established in 1932. As a result of the record supply of cottonseed available from the 1937 cotton crop and the good demand for cot· tonseed products, cottonseed oil mills in the United States operated at an unusually high level throughout the 1937· 1938 season. For the entire season, the volume of cotton· seed crushed and the amount of products produced were about 4.0 per cent larger than in the preceding season. De· spite the heavy production, the end·of·season stocks of crude cottonseed oil, while higher than a year earlier, were smaller than in most other recent years. On the other hand, stocks of STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS ,----Tex.. - - v - - U n i t e d States------August 1 to Jul y 31 August 1 to July 31 This SCMon Last senson This SCMon Last senson Cottonseed received at mill. 4,519,024 1,756,483 947,822 6,616,060 (tons) ..................... 4,498,321 934,826 6,325,498 1,603,039 Cottonseed crushed (tons) .... . Cottonseed on hand July 31 42,304 332,057 (ton. ) .................. ... 176,216 22,872 Produotion of produots: 1,363,978,069 Crude oil (pounds) ... .. . .. . 477,891,971 266,306,445 1,965,993,076 2,031,488 Cake nnd menl (tons) ...... . 751,611 489,127 2,830,399 1,144,138 1,624,579 Hulls (tons) ..... ....... ... 419,565 246,784 1,126,873 381,891 201,796 1,471,918 Linters (runnin~ hales) ...... Stooks on hand Ju y 31: 2,557,298 Crude oil (pounds) ........ . 3,258,562 1,236,295 9,722,283 41,052 Cake and menl (tons) ....... 46,569 7,859 216,503 43,422 Hulls (tons) ............... 31,124 131,156 6,940 61,547 Linter. (running bales) . ... .. 105,430 11,764 479,564 SOURCE: Bureau 01 CeMUS. CONSUMPTION, STOCKS AND RXPORTS OF' COTTON (B.les) July July June August 1 to July 31 1938 1937 1938 This SCMen Last senso n Consumption at: 130,962 Tox.. millo ............ 10,731 11,141 118,313 10,248 7,950,070 449,511 583,011 442,742 United States mill •..... 5,756,096 U.S. Stooks- end 01 month: In con.uming .. tab'mts. 1,226,983 1,285,543 1,416,161 2,813,305 0,606,667 Publie stg., compresoCil .. 9,641,201 Exti0rts Irom U. S. to: 1,144,379 30,707 24,336 21,641 nited Kingdom ...... . 1,551.843 655.2·18 4,398 2,608 Franeo ........ ........ 7,873 715,850 397,636 22,234 10,603 '10,448 505,454 It.ly ....... .. ......... 649,647 9,303 23,136 Germany .............. 16,921 655,894 662,681 Other Europe .......... 41,731 13,075 57,879 935,352 1,550,499 Japan ................. 6U,575 28,000 30,286 690,513 370,971 All other countries . ..... 17,758 22,554 21,830 543,509 Total oxports .... 195,706 124,312 5,598,415 175,878 - 5,440,044 RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THR PORTS OF' HOUSTON AND GALVESTON (B.les) July July August 1 to July 31 June This se..on Last sCBSon 1938 1937 1038 3,016,021 Recoipts ................. 42,814 20,125 3,772,258 48,893 2,933,545 Exports . ..... . ... . ... ... 129,434 60,135 137,273 3,000,382 Stocks, end of month ..... 1,230,712 522,375 1,338,944 CRUDE OIL PRODUCTION (Barrelo) Inor.a •• or decr,""o in daily July, 1938 average produotion £rooo:---"\ North Tex ....... .' .......... . West Tex................... . Eo.st rrOXn.9 •••• ••••• ••• •••••• South 'rex.................. . Tox.. Co.. tal. .............. . Total Production 4,552,950 7,554,350 16,514,100 7,314,850 6,547,350 Daily Ayg. Production 146,860 243,689 532,713 235,963 211,205 July, 1937 - 4,345 + 7,610 -59,439 + 326 + 6,582 Tolal Tex........ . New Mexico ............... .. North Loui.iana ... ....... ... . 42,483,600 3,128,400 2,502,700 1,370,439 100,916 80,732 -40,266 - 13,514 _ 7,873 'rolal dislriot. . . . . . 48,114,700 1,552,087 SOURCE: The Oil Weekly, Houston, Tox ... - 70,653 June, 1038 + 13,619 + 35,245 + 71.038 + 30,625 + 23,127 -~ - + 10,198 + 1,757 +192,509 PRODUCTION, SHIPMENTS AND STOCKS OF PORTLAND CEMEN'r A'r TEXAS MILLS-(In thousands of barrel. ) ,----Produotion---v-- Shipments ---v-Stocks, end of month---1938 1937 1938 1937 1938 1937 J.nuary .... . 334 552 530 372 752 910 l~obruary ... . 444 469 532 491 664 889 March .. ... . 664 592 646 576 681 P07 ApriL ...... . 751 520 580 681 853 746 M.y ... . ... . 717 625 612 683 958 688 Julie ...... .. 611 610 664 608 905 689 July .. .... .. 630 631 507 600 1,027 715 Total, 7 mos. 4,151 3,999 4,071 SOURCE: Unitod States Bureau of Mines. 4.017 MONTHLY BUSINESS REVIEW linters and cake and meal were the highest on record. During the past season imports of cottonseed products were r educed sharply while exports showed a substantial increase. Following the downward trend in the second quarter, con· struction contracts awarded in the Eleventh District increased 18 per cent from June to July and were more than one-third larger than in July, 1937. The high level of building activity during July was due chiefly to a sharp increase in public works projects, but contracts for other classes of building were well sustained. While residential building declined further by 10 per cent from June to July, the decrease was less than usually occurs at this time, and awards were 38 per cent greater than a year ago. Coincident with the heavy volume of building activity in the Eleventh District, the oper ation s of Portland cement mills in Texas during the first seven months of 1938 rose to an exceptionally high level. Production was larger than in any similar period for which data are available, and with one exception shipments were in record volume. Mill stocks of cement on July 31 were somewhat larger than at the beginning of the year and 44 per cent greater than on July 31, 1937. The production of crude petroleum both in the Eleventh District and in the United States increased sharply during the first week of July, reflecting chiefly the return to production on a six-day basis in Texas. In the subsequent weeks production in this dish·ict showed a further moderate expansion and in the first hal£ of August was at the highest level since last November. However, the production rate in the first two weeks of August was 8 per cent below the record rate established in August last year. Refinery operations in the United States also increased but the output of motor fuel continued below demand, necessitating further withdrawals of gasoline from storage. Despite this decline, gasoline stocks on August 6 were 9 per cent larger than a year ago. Crude oil in storage decreased further in July and at the end of the month was 6 per cent lower than a year earlier. Well completions in this district declined further by 11 per cent in July and were about one-fourth fewer than in July, 1937. FINANCE The average reserves of member banks maintained with the Federal Reserve Bank of Dallas, which were at the lowest level of the year during June, rose somewhat in July and remained at the higher level during the first hal£ of August. Although a portion of the increase was absorbed by the higher required reserves resulting from the expansion of deposits of member banks, estimated excess r eserves during the first hal£ of August averaged about $2,500,000 higher than in the last hal£ of June. In the latest period total reserves were about 45 per cent in excess of requirements. Although member bank borrowings from the Federal Reserve bank reflected a seasonal increase of $187,000 from July 15 to August 15, the volume of such discounts continued small and Was below that a year ago. Industrial advances increased slightly during the past month. Federal Reserve notes in actual circulation, which had declined substantially during the preceding ten months due in part to seasonal facto rs, fluctuated within narrow limits between the middle of July and the middle of August, with the total of $75,300,000 at the end of the period being $16,535,000 less than a year earlier. The customary seasonal expansion in the demand for commercial, industrial and agricultural loans accounted for a further increase of $1,492,000 in total advances of weekly reporting member banks in leading cities of the Eleventh 8 District during the four weeks ended August 10. This increase, however, was much smaller than that which occurred during the corresponding period in 1937, and as a conseCONDITION OF THE FEDERAL RESERVE BANK (In thouBaneL! of doll.rs) Aug. 15, Aug.15, 1938 1037 8200,450 5190,622 'rotn.l tlUJb rC~Cr\'CS .. . . . . .. •• ... •••• . ••.••..•..•.. 1,329 DiMountBfor member banks ........... . . . ........ . 510 848 1,196 Industrial advances .... . .. . ... ... . . ... ........... . 16 Bills bought in the open market ... ... ..... . .. ..... . 87 84,903 United States Government seeuritiC!l ........ . .. . . .•. 08,634 86,337 101,246 '1'otal earni ng assets .... . .............. .. ........ . 100,721 Member bank reserve deposits ................. .. . . 170,660 75,306 01 ,841 Federal Reserve notes in oetual cireulotion ......... . Commitments to make industrial adv.noCB ... .. .... . 51 302 July 15, 1938 $209,651 323 814 16 84,063 86,116 171,607 75,629 01 CONDITION S'rATISTICS OF MEMBER BANKS IN LEADING CITIES (In thou.ands of dellar.) Aug. 10, Aug. 11, July 13, 1938 1037 1038 Total loans and investments .. " .. . . . . . . . . .... .. . . . $488,486 $502,554 5480,388 Total loanB. .. . . . . . . . . . . . . .. . . .. . . .. .. . . .. .. .. . .. 220,507 228,723 225,015 Commereial, industrial and agrieulturallonn •. " . .. 143,884 143,456 142,081 Open market paper.. . . . . . . . . . . . . . . . . . . . .. . . .. . . 1,665 3,422 1,562 Loans to brokers and dealers in securitie... .. . ... . . 2,562 2,858 2,723 Other lonns for purolmoillg or carrying 8eouriti.... . . 13,838 15,234 13,725 Real est.ate lonno..... . ... . . ... ... . ....... . ... .. 20,703 21,316 20,633 Lonns to banks...... .. .. .. .. .. .. .. .. .. .. .. ..... 642 881 445 All other loan9. . . . . . . . .. . . .. .. .. .. . . .. . . .. . . ... 43,213 41,556 48,846 Unitod Statos Government direot obligatio!l.'l... . .... . 170,741 193,629 172,783 Obligations full y gunr.nteed by the U. 8. Government . 30,075 29,035 31,323 Other securities. . . .. .. .. .. .. .. .. .. .... .. .. . ...... 51,263 50,267 51,267 Reserves with Federnl Reserve Bnnk....... ... .. .... 10J ,381 108,256 102,007 Balnnces with domestio banks. . ... .. .. . ... . ... ..... 211,600 142,765 218,081 Dem.nd deposits-adjustedt . . . . . . . . ....... .. .. . .. 400,007 390,187 406,060 Time d~poslts... . . . . . . . . . . . . . . . .. . .. . ............ 132,581 121,578 130,394 United States Government deposits ... ..... . . , ...... 24,032 18,075 25,016 Interbank deposits.... . .... . .. . .. . ................ 104,070 176,727 101 ,234 Borrowings from Federnl Reserve Bank. ............ NOlie None None tIneludeo all dem.nd deposits other than intorb.nk and United States Government, I... OMh item. reported .. on hand or in process of colleotion. GROSS DEMAND AND TIME DEPOSITS OF MEMBER BANKS (Average of daily figu ..s-in thou •• neL! of dollars) Combined total RCBer •• eity banks Country ban'" Gross demand July, 1036 ............. S 009,400 July, 1937 ............. 1,053,745 Mnreh, 1038 . . . .......... 1,000,362 April , 1038 ... ... . .. . . . . 1,074,855 Mny, 1038 .... ......... 1,073,302 June, 1038 .. . .. , . .... . . 1,077,586 July, 1038. . . . . . . . . . . . . 1,089,421 Tim. $109,570 201,803 218,1 88 217,042 2J9,459 220,901 220,012 Gros:! Gross dem.nd Timo demand $578,721 $100,652 S420,739 584,1 17 110,020 469,628 601,354 121,102 495,008 502,050 120,806 482,790 121 ,1 53 500,104 474,188 605,323 121,045 472,263 614,076 121,006 475,345 SAVINGS DEPOSITS July 31, 1038 , Beaumont ... ............ Dnllas . ................. EI Paso ..... ....... ..... Fort Worth ...... . ...... . Galveston . .............. Heuston ........ . ... ..... Port Arthur .... ... ...... San Antonio . . . . .... . . ... Shreveport .............. W.eo .... .. ... .......... Wiehita Fall.......... ... All othors .. . ............ Total. ... . ...... Number of reporting banks 3 8 2 3 Number of 8&vings 10 2 5 3 3 3 70 ·depo.itor. 0,721 00,665 16,160 38, J32 18,524 7J,888 6,008 23,OlU 2- ,632 1 9,227 7,273 59,303 116 375,542 4 Amount of , Percentage chan~e in .avings doposits rom r savings deposits S 8,807,056 20,321,160 7,041,003 13,480,388 11,560,242 28,972,823 2,771,240 17,872,229 11,308,ij60 4,757,526 3,704,043 29,274,107 July 31, 1937 + 5.1 + 2.9 + .7 + 4.5 + 3.0 + 2.6 + 12 .0 + 6.8 + 2.3 - 4.8 +10 .6 + 4.2 - - - - --$161,862,200 + 3.6 , Tim. 589,024 01,264 97,086 97,046 08,306 90,046 00,006 June 30, 1938 + .4 + .4 - 2.8 .6 + 1.0 + - .4 - , .4 3.3 .8 + .02 - 2.2 +1.1 - 1.0 DEBITS TO INDIVIDUAL ACCOUNTS iIn thou•• nd. of dollar. } July July Petg.ohange Juno Potg. eh.ngo 1037 1038 over year 1088 over month S 8,644 -11 .0 Abilene . .. .... ....... .. . $ 7,697 $ 7,034 - 3.0 29,470 27,724 AUB ................ .. till 31,872 + 6.3 - 7.5 22,087 25,084 -15. 0 Beaumont .... .... . . ... .. 22,456 - l.6 3,241 2,641 - 18.5 Corsioana . ...... . ... . .. . 2,772 - 4.7 214,666 252,017 - 15.1 Dullas .. .. ........... .. 227,403 - 5.6 23,438 26,110 - 10.2 EI Paso . ............... . 24,324 - 3.6 112,250 83,013 -25.2 87,157 Fort Worth ..... , .. .... .. - 3.7 26,650 30,053 - 11.3 Gnlveston ..... . .. . .. ... . 25,704 3.3 207,763 235,347 - 11.7 Houston ...... ...... , . .. . 108,222 4.8 8,226 9,838 - 16.4 8,009 Port Arthur . ... .. .... .. . - 8.6 4,056 3,638 +11.5 Roswell. ... . . . ......... . 3,088 +1.7 68,058 65,382 - 5.2 San Antonio ...... .. .. .. . 60,817 - 6.4 - 17.6 48,136 30,665 Shreveport .. .......... .. 41,470 - 4.4 8,414 - 17.0 6,004 'rcxnrknlla· . ............ . 7,023 - 1.7 10,004 0,096 - 8.a 11,819 'rUC5on ........ . ... . .... . - 15.4 11,127 15,686 -29. 1 11,418 - 2.5 13,6GO - 13.7 11,701 i(~~~'. ::::::::::::::::: 11,043 - 1.3 17,431 - 11 .0 15,509 Wiehita Falls .. . . . .. .. . . . 16,680 - 7.0 + + : Total.... .... ... $700,990 $018,944 - 13.0 $811,100 - 2.5 "Ineludes the figure:! of two banks in Texarkana, Arknns .., loeated in the Eighth Diatriel, 4 MONTHLY BUSINESS REVIEW quence total loans fell below those outstanding a year earlier for the first time since the spring of 1936. Investments of these banks in direct obligations of the United States Government were reduced $2,042,000 between July 13 and August 10, but a substantial increase in the holdings of obligations fully guaranteed by the United States Government more than offset this decline, with the result that total investments rose $6,600,000 to the highest level since the middle of last November. Aggregate loans and investments on August 10 were $8,100,000 greater than four weeks earlier, but $14,068,000 smaller than a year ago. Following a substantial increase in the first half of July, adjusted demand deposits at reporting banks declined $5,972,000 in the subsequent four weeks, but this decrease was largely offset by increases in interbank and time deposits. Since July, 1937, time deposits have shown a gradual upward trend and on August 10 this year they were at the highest level in several years. AGRICULTURE The prospective production of agricultural products in the Eleventh District continued very promising during July as weather conditions were generally favorable for growing crops. The clear, dry weather during the first half of the month enabled farmers to place their crops in a good state of cultivation and general rains in the subsequent two weeks provided ample moisture supplies in all sections of the district except in south Texas and in limited areas of northwest Texas. Excessive rainfall and the resultant floods caused considerable damage to crops along the Colorado River basin. The indicated production of cotton in this district, as reflected by the August 1 estimate of the Department of Agriculture, is 35 per cent less than the 1937 harvest, due chiefly to the greatly reduced acreage. The crop is in generally good condition and the estimated per acre yield, although considerably lower than last year's heavy yield, is much larger than the 1927-1936 average. In Texas the condition of the crop on August 1 was above average in all sections of the State except in the South Plains district and the indicated per acre yield of 170 pounds compares with an actual yield of 197 pounds in 1937, and a ten-year average yield of 140 pounds. Production is estimated at 3,425,000 bales, which represents a decrease of 34, per cent from last year's harvest of 5,154,,000 bales. In the other four states attached to the Eleventh District declines in estimated production ranged from 16 per cent in Oklahoma to 43 per cent in Louisiana. The August 1 forecast for the United States was placed at 11,988,000 bales as compared with the record harvest of 18,946,000 bales last year. Current reports are to the effect that insect infestation is spreading in many sections of this district and that boll weevils, boll worms and leaf worms are causing considerable damage to cotton, particularly in those areas where recurring showers have handicapped poisoning operations. Frequent rains in some sections are also causing root rot and the shedding of forms and young bolls. Substantial increases in the area planted and the estimated per acre yield of grain sorghums in Texas resulted in a forecast of 63,612,000 bushels on August 1, which is 22 per cent greater than the 1937 production. The indicated harvest of this crop in Oklahoma, New Mexico and Arizona is also larger than a year ago. The condition of corn, oats and tame hay in this district showed little change in July, and the estimated production of these crops on August 1 was about the same as that a month earlier. The condition of livestock ranges in the Eleventh District was improved considerably by the heavy general rains which fell during July. Since the rains, ranges have made rapid growth and with a surplus of feed crops being produced in many sections prospects are favorable for ample feed supplies during the fall and winter months. Conditions in South Texas and in limited areas of the Texas Panhandle, however, are still poor due to the lack of moisture. Except for the dry areas, cattle and sheep are in good to excellent condition. According to the Department of Agriculture, cattle will enter feed lots in good flesh this year and indications point to a substantial increase in feeding operations in Texas. The indicated production of wool in Texas during 1938, as estimated by the Department of Agriculture, was placed at 76,903,000 pounds, which is an increase of 1.4 per cent over the record production in 1937. In New Mexico the estimated production of wool showed a further moderate decline, while in Arizona production increased slightly. The number of lambs docked in Texas during 1938 waS estimated at 4,,615,000 head, exceeding the previous record established last year by 11 per cent. The indicated lamb crop in New Mexico was placed at 1,248,000 head, a decrease of 8 per cent from a year ago, but in Arizona the crop increased from 484,,000 head in 1937 to 503,000 head this year. During the first half of 1938 receipts from the sale of principal farm products in the five states wholly or partially attached to the Eleventh District were 6 per cent larger than in the corresponding period of 1937. Receipts in Texas, Oklahoma and Arizona showed increases ranging from 8 to 25 per cent, but in New Mexico and Louisiana farm income was down 13 per cent in each instance. Larger receipts from cotton, wheat and livestock were the sustaining factors in the three states showing increases, while the smaller income from livestock, cotton and truck crops largely accounted for the decreases in New Mexico and Louisiana. Government benefit payments during the first half of 1938 totaled $50,070,000 as compared with $58,422,000 in the same period of 1937. This decrease was insufficient to offset the gain in receipts from marketings, however, and as a consequence aggregate farm income including Government payments during the period was 2 per cent larger than a year ago. Total receipts in June were 5 per cent smaller than a month earlier, but 16 per cent greater than in June last year. CROP PRODUCT TON (In thousands' of units) ,...-Toxas -------v-- Eloventh Distriot--.. Estimated Estimated Crop Unit 1938 1937 1938 1937 Cotton", , " , " " ,.. . • . . Bales 3,425 5,154 4,140 6,329 Winter Whent... . . .. .... Busbels 35,397 41,090 36,371 42,807 Corn...... .. .. .. .. . . .. .. Bushels 85,104 72,048 101,063 86,045 Oats . . . . . . . . . . . . . . . . . . . . Bushols 34,875 30,432 37,778 33,087 Grain sorghums .. . . . . .. .. Bushels 63,012 52,330 86,7M71,758 Tame bay. . .. ... .. . .. .. . Tons 1,042 831 1,441 1,211 Ri co. .... Bushels 13,000 12,250 1a,000t 1 2, 25~t Irish potatoes. .. .. .. . Bushels 2,050 3,4bO 3,765 4,26 Sweet potatoe.L .... .. .. Bushels 4,800 3,744 13,764t !l,364t -Oklahoma, Texas, Now Mexico and Arizona. tTexas onl y. tLouisiana, Oklahoma aad 'ro"·' · SOURCE: United States Department of Agrioulture. Data C Eleventh Distriot dorived or Cram estimates by states. CASH FARM INCOME FROM SALE OF PRINCIPAL FARM PRODUCTS AND GOVERNMENT BENEFIT PAYMENTS (In thousands oC dollars) ,------- June, 1938 - - - - v -- -- Total reoeipt, ----~ Receip~, Cram: Govern,J" n. 1 to June 30 ~-----" mont Juno JUlie ,...-- ----Crops Livestook- p.ymonts 1938 1937 1938 1937 Ari <ona .. .. ... S 860 S 1,530 S 118 $ 2,517 S 2,111 $ 24,603 $ 10,911 I,ouisiana .. .... 1,30G 1,432 1,174 4,002 5,450 35,375 4)'b~~ New Mexico.. . 144 1,00G 410 I,G29 1,5aG 12,008 l u, 0 Oklahoma .. ... 7,828 0,971 2,185 15,U84 11,481 09,776 08,11 9 0 Toxas.. .. .. . .. 13,210 17,495 2,402 33,.110 28,643 189,094 ~ Total. .. $23,447 $27,503 S 6,298 $57,248 549,221 -Includes receipts Cram salo oC livestook and livestook product•. BOURCE: United Btates Dopartmont ol Agrioulturo, $332;350 $324,649 MONTHLY BUSINESS REVIEW SEPTEMBER 1, 1938 NATIONAL SUMMARY OF BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) ... "" INDUSTRIAL PRODUCTION 140 1 1.0 100 00 / Volume of industrial production increased from 77 per cent of the 1923-1925 average in June to 83 per cent in July, according to the Board's index which is adjusted for changes in the numher of working days and for usual seasonal variations. Steel output rose sharply, lumher production also increased, and output of cement and glass was maintained. Automohile production declined somewhat further. In the first three weeks of August activity at steel mills was at a rate of around 40 per cent of capacity as compared with an average of 35 per cent in July, while in the automohile industry there was more than the usual seasonal reduction in output as producers closed plants somewhat earlier than in other recent years to prepare for the shift to new model production. At textile mills activiLy in July showed a further rise, marked increases being reported in mill consumption of cotton and wool and in shipments of rayon yarn. Shoe production also increased substantially, following a decline in June. Bituminous coal production advanced somewhat in July, and output of crude petroleum was at a much higher rate, reflecting chiefly a reLurn to production on a six-day week basis in Texas. Anthracite production decreased sharply following a considerable volume of output during May and June. Value of construction contracts awarded in 37 eastern states showed little change from June to July, according to figures of the F. W. Dodge Corporation. Contracts for residential building continued to increase, and there was an increase also in commercial building, reflecting the award of a contract for a large office building. Factory construction remained at a low level and declines were reported in most other types of construction. 10 1 00 1 \ 1 ./ "v/ ~ 70 V PRODUCTION 120 J ~. 110 80 150 , Ito •• 80 'V 70 .. 80 " 11S7 1936 1 034 80 Index of physical volume of production. adjusted for seasonal variation. 1928-1925 average 100. By months. January. 1934. to July, 1938. = CONSTRUCTION CONTRACTS AWARDED ' W ClNI or DOU.AAI W IL,LI OH l crOOl.UM 800 800 ..1'0 400 ... \M ~, I~~ . ~ ,,\0'" \. °rt;~-~ RESloe:~ 1929 1930 1931 ,.. '~2 EMPLOYMENT .t j0y V _ J \v: AIV' tJV I""' I 1 ~l 1m ~ 1134 ~ V i"'liM I~ Industrial activity increased in July, when there is usually a considerable decline, and rose somewhat further in the first three weeks of August. v- 1837 '008 Three-month moving averages of F. W. Dodge data for value of contracts awarded In 37 Eastern States. adjusted for seasonal variation. Latest figures based on data for June and July and estimate for August. WHOLESALE PRICES ~----+------r-----T----~----~ I OO r-----+-----~~--_f~I~~~----__i.O Factory employment and payrolls, which usually decline at this season, increased somewhat from the middle of June to the middle of July. There were substantial increases in the number employed at textile mills, clothing establishments, and shoe factories, and at railroad repair shops there was a slight increase. In the machinery and automobile industries employment declined somewhat further. In non-manufactw'ing industries the principal changes in employment were a decrease at mines and an increase on the railroads. AGRICULTURE A domestic cotton crop of 12,000,000 bales was indicated on August 1, according to the Department of Agriculture. Last season the crop was 19,000,000 bales and, with world consumption of American cotton about 11,000,000 bales, the carry-over increased sharply to 13,500,000 bales. The wheat crop was forecast at 956,000,000 bushels, as compared with 874,000,000 bushels hal"Vested last year and usual domestic consumption of about 670,000,000 bushels. Production estimates for most other major crops were slightly under the large harvests of a year ago. Preliminary estimates by the Department of AgriculLure indicate that cash farm income, including Government payments, will total $7,500,000,000 for the calendar yem' 1938, a decline of 12 per cent from last year, which was the highest since 1929. '0 DISTRIBUTION 70 In July department store sales declined by less than the usual seasonal amount, while sales at varieLY stores and mail-order houses decreased seasonally. Retail sales of automobiles increased somewhat, although there is ordinarily a decline in July. In the first half of August sales at department stores showed less than the usual seasonal rise. Freight.car loadings increased from June to July, reflecting chiefly larger shipments of grain, coal, and miscellaneous freight. ~~--1-----_r----_i------r_--~.0 .0~_1.-~--J---1.~--~~1.~~~~1=~7~--=,.=~'0 •• •• .. Indexes compiled by the United States Bureau of Labor Statistics, 1926 100. By weeks, 1934 to week ending August 20. 1938. = MEMBER BANK RESERVES AN D RELATED ITEMS "WONI OPDOI..LAA. 81 LUONS or oou.AIIS 14 " 1·r-----+------r-----+~4-~r----__i < .. 10r-----+---~~~---+------r_--~10 1834 Wednesday figures, January 8, 1984, to August 17, 1988. COMMODITY PRICES Prices of grains, cotton, livestock and meats were lower in the third week of August than in the middle of July, while prices of most industrial commodities were unchanged. Steel scrap advanced further in July, then declined somewhat in the first half of August. Cotton grey goods also declined in the early part of August, while prices of copper and rubber were maintained, following increases in the latter part of July. BANK CREDIT Excess reserves of member banks declined by about $230,000,000 in the five weeks ending August 17 to a total of $2,930,000,000, followinm a steady growth from the middle of April to a peak on July 13. The decline in reserves was largely the result of an increase in Treasury deposits with the Reserve banks, reflecting receipts from weekly Treasury bill offerings in excess of maturities and a sale of Reconstruction Finance Corporation notes. Most of the decrease in excess reserves was at city banks. Following substantial declines since the autumn of last year, commercial loans and brokers loans at reporting member banks in 101 leading cities increased somewhat during the first half of August. Member banks in leading cities added about $170,000,000 to their holdings of investments in the middle of July, mainly United States Government guaranteed obligations, but thereafter theil' holdings showed little change.
