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MONTHlY BUSINESS REVIEW
FEDERAt RESERVE BAN K o f Dallas
of
Volume 26, No.7
Dallas, Texas, September 1, 1941
NOTICE
Under authority of the Executive Order of the President of the United States of August 9, 1941, the Board
of Governors of the Federal Reserve System has adopted
Regulation W relative to instalment credit, to be effective with respect to most provisions on September 1,
1941. The regulation prescribes instalment credit terms
applicable to 24 consumers' durable goods; contains provisions covering certain modernization loans; and applies to instalment cash lending in amounts of $1,000
or less, thereby covering credit used for consumptive
purposes.
The primary purposes of the regulation are to assist
in the adjustment of public demand to the available
supplies of designated consumers' durable goods the
production of which requires materials-especially
metals-now urgently needed for military and naval
purposes; to give greater effectiveness to other means
adopted for checking price advances and for devoting
materials, manufacturing facilities and man-power more
intensively to the defense effort; and to assist in building up a backlog of demand for such articles until defense needs are lessened.
Copies of the regulation may be obtained from the
Federal Reserve Bank of Dallas and its branches and
from local banking institutions.
DISTRlCT SUMMARY
Business and industrial activity in the Eleventh District,
"'hich had made pronounced gains during the first year of the
National defense program, was well sustained in July. EmployInent and payrolls continued to expand and department store
trade was at the highest level of record for that particular
Inonth. Retailers in general made heavy purchases at wholesale establishments in order to meet current and anticipated
COnsumer demands. Construction activity, as measured by the
Value of contracts awarded, increased moderately from June
to July, and the demand for lumber at pine mills in this district
~howed an increase during the latter month much greater than
IS usual at that season. Crude petroleum output was reduced
~ornewhat in July because of lower production allowables, but
Increased during the first half of August; the rate of refinery
Operations established a new peak in July. Commercial loans
~t weekly reporting member banks increased substantially durIng the five weeks ended August 13, and debits to individual
accounts during July at banks in eighteen cities of the district
"'ere 30 per cent greater than in that month a year earlier. The
outlook for crop production showed some improvement during
july and the first half of August, as weather conditions were
Inore favorable for field work and plant growth.
BUSINESS
. The contraction that ordinarily occurs from June to July
l~ consumer buying at reporting departme,n t stores in this
district was less pronounced than usual this year, and as a
result this bank's seasonally adjusted index of sales, which has
followed an upward trend since the beginning of 1941, reached
the highest level of record in July at 132 per cent of the 19231925 average. In addition, the actual physical volume of merchandise distributed during July was at an all-time high for that
Inonth, and sales in virtually all departments participated in
This CODY is released for Dublication in morning paDers-
A
ug. 31
an aggregate gain of 24 per cent over those in the corresponding month a year earlier. July was the third consecutive month
in which the gain over the year averaged nearly one-fourth,
and preliminary reports indicate that sales during the first half
of August were almost one-third higher than in that perio~ a
year earlier.
Merchandise inventories at reporting department stores
showed a counter-to-seasonal gain in July, reflecting heavy
purchases in anticipation of a continued strong consumer demand, and to some extent the higher level of prices of fall
merchandise. The value of stocks on hand July 31 was 19 per
cent greater than a year earlier, and on a seasonally adjusted
basis inventories held on that date were the largest in more than
eleven years. The index of department store stocks rose from 75
per cent of the 1923-1925 average in June to 80 per cent in
July, which compares with 66 per cent in July last year. At
the close of July orders outstanding at reporting firms were 60
per cent greater than a month earlier and more than threefourths higher than on July 31 last year.
Although seasonal declines occurred in the distribution of
some commodities at wholesale in this district during July, the
aggregate dollar value of sales at reporting wholesale firms
showed little change from the preceding month and exceeded
that of a year ago by about 30 per cent, which compares with
an average year-to-year increase of 20 per cent during the
first seven months of 1941. Sales at reporting firms in each of
the various lines of trade participated in the gain over July last
year. Inventories at reporting firms were increased seasonally in
July and at the month-end the value of stocks was about onefifth greater than at the corresponding time last year.
Business failures in the Eleventh District during July were
few in number, and liabilities of defaulting firms were the
smallest since January, 1937. Dun and Bradstreet reported 14
insolvencies, with an aggregate indebtedness of only $69,000.
The indebtedness of business failures during the first seven
months of 1941 was 50 per cent smaller than in that perioli
of 1940.
AGRICULTURE
Following a prolonged period of wet weather that damaged
growing crops and caused a serious delay in field work, weather
conditions in most areas of the Eleventh District were more
favorable for crop growth during July and the first half of
August. Intermittent rainfall persisted in Louisiana and in some
other sections of the district, but on the whole, weather conditions were conducive to the growth and maturation of crops,
to field operations, and to more effective insect control. In
consequence, summer crop production prospects improved. On
the basis of conditions existing at the beginning of August,
production of virtually all summer crops except cotton will
equal or exceed the ten-year, 1930-1939, average production,
and the anticipated harvest of a majority of crops is above
that a year earlier, the principal exceptions being in the prospective production of cotton, corn, oats, peanuts, and pecans.
In addition to a 6 per cent reduction in the acreage planted to
cotton in this district during the current year, weather conditions during the planting and early growing season were unfavorable for plant development and were conducive to widespread
insect activity. As a result of these handicaps the indicated
production of 3,132,000 bales of cotton in the Eleventh District is nearly one-fifth smaller than the 1940 harvest. According to the Department of Agriculture, insect damage has been
most pronounced in the eastern half of Texas and northern
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
MONTHLY BUSINESS REVIEW
Louisiana where frequent rains have made poisoning partially
The general condition of livestock ranges in the Eleventh
ineffective. The August production forecast for Texas was District continued very good during July, though rank, coarse
placed at 2,572,000 bales, which indicates one of the smallest range vegetation in the sheep growing territory of Texas concrops since 1921, and compares with a harvest of 3,234,000 tinued to retard the development of sheep and lambs. Cattle
bales in 1940. The indicated per acre yield of lint cotton in made about average gains in weight during the month, and losses
Texas was placed at 152 pounds as against 184 pounds in 1940, from disease and other causes were lighter than usual. The conIn Louisiana, the August 1 estimate of 428,000 bales indicates dition of sheep and goats declined somewhat during July, but
the smallest harvest since 1923, and in Oklahoma the forecast continued above-average for that season. Insect infestation h~s
of 537,000 bales compares with a ten-year average production been very troublesome. According to the Department of Agnof 750,000 bales. Prospective production of cotton in New culture, most growers of sheep are withholding ewes from the
Mexico and Arizona aggregates 116,000 and 230,000 bales, market for breeding purposes or because of the poor condition
respectively, which is well above the average harvests. The of animals. The demand for cattle was active during July at very
August 1 forecast for the United States of 10,817,000 bales is 14 satisfactory prices, but sales were limited due apparently to the
per cent smaller than the 1940 harvest and compares with a desire of ranchers to hold animals for higher prices and for
ten-year average production of 13,246,000 bales.
restocking purposes.
The indicated production of wheat in this district was reduced
The sheep industry in the Eleventh District showed a furth~r
further in July to 36,100,000 bushels. Although this figure is gain during 1941 due chiefly to an expansion of operations In
above the 1940 and ten-year average harvests, it represents a Texas. According to the Department of Agriculture, the nu~
marked decline from that anticipated earlier in the season due to ber of breeding ewes on Texas ranges was increased further thIS
the abandonment of many fields following excessive rainfall, year and the estimated production of lambs rose to 5,268,000
severe rust damage, and harvesting difficulties. The corn and head, which exceeds the previous high established in 1940 by 8
tame hay crops responded to the more favorable weather condi- per cent. The indicated production of 1,277,000 lambs in Ne!,
tions during July and the production forecast for these crops Mexico was 90,000 head smaller than in 1940, while in Anwas increased during the month; however, the anticipated yields zona production showed a moderate increase.
are still below the large 1940 harvests. The acreage planted to
The indicated production of wool in Texas is placed at a
grain sorghums in this district was somewhat smaller than in record high of 82,462,000 pounds, exceeding the 1940 produc
1940, but the indicated production is one-fifth higher than a tion by 2,110,000 pounds. The gain over the year is accounte d
year ago. The Texas pecan crop is estimated at 29,670,000 for by an increase in the number of sheep shorn, since the av~r
pounds, which is much smaller than the 1940 harvest but 22 age weight per fleece showed a slight decline. In New MeXICO
per cent greater than the 1930-1939 average production. The and Arizona the estimated quantity of wool shorn and to be
condition of citrus trees in the Rio Grande Valley of Texas shorn this year averages 2 per cent higher than in 1940. T~e
showed an improvement in July, and fruit is reported to be Department of Agriculture estimated that wool production In
of good size with growth more advanced than at this time last the United States, amounting to approximately 400,000,00 0
year.
pounds, will be the largest of record; more than one-fourth of
WHOLE.'lALE AND RETAIL TRADE STATISTICS
the total production will originate in this district.
,,------Percentage change in:
~
The sharp upward movement in commodity prices that has
Number ~
Netsales--v---Stoeka---...
of
July, 1941 from
Jan. I, to
July, 1941 from
been in progress in the United States since the beginning of
reportls'n g
July.
June,
July 31,1041
July,
June,
Retail trade:
1941 has been especially pronounced in quotations on agriculfirm
1040
1941
from 1940
1040
1941
Department stores:
Total 11th Dist .. . .
47
+24
-10
+17
+19
+ 3
tural products. According to the index of the United States
7
+24
- 2
+14
+18
+ 3
Dallas .......... ..
Bureau of Labor Statistics, wholesale prices of farm productS
Fort Worth ... .... .
4
+22
-21
+17
+ 5
- 4
2
Houston .... ..... ..
+18
- 13
+15
+22
+ 4
7
San Antonio ..... . .
5
+32
- 6
+24
+30
+15
ShreYeJlOrt ....... .
3
+23
- 8
+14
+"2 1
''
....
Other cities ....... .
21
+26
-12
+18
+ 2
Independent stores:'
Arizona.... .... ....
261
+24
-9
+17
+25
New Mexico.......
172
+13
Oklahoma.........
518
+16
+15
Texas... .. . .. .. ... 1,092
+26
-5
+10
Wholesale trado:'
Machinery, cqpt. '"
supplies....... .. ..
6
+45
-21
+48
Automotiyo supplies.
3
+32
-23
Drugs (inol. liquors).
11
+19
+23
Eleotrionlsupplies...
4
+69
+ 0
Groceries...........
31
+15
- 2
+ii
Hardware..........
16
+49
- 1
+32
Surgioal equipment..
6
+ 15
- 2
Tooaeoo '" produots.
5
+ 1
+ 4
- 1
'Compiled by United States Bureau of Census. tCbange lOBS than one-half of one pcr oent.
=l
INDEXES OF DEPARTMENT STORE SALES AND STOCKS
(1923·1025 ayerage - l00)
May
July
June
1941
1941
1941
Sales (daily avorage):
93
110
Without seasonal adjustment .•......
124
132
123
With lIC880nal adjustment .......... .
124
Btooks (end of month):
Without soaoonal adjustment. . .•. •.•
73
70
73
With 8e88onal adjustment.. .. .. .. .. •
80
75
72
July
1040
76
108
60
66
CASH FARM INCOME FROM THE SALE OF PRINCIPAL FARM PRODUCTS
AND GOVERNMENT BENEFIT PAYMENTS
(In thousands of dollars)
, , - - - May, 1941----..
Reoeipts from:
Goyern- ,
Total receipts
~-----,
ment
May
May
Jan. 1 to May 31
Crops Livestook' payments
1941
1940
1941
1040
Arizona... . . . .
2,648
4,039
30
6,717
3,303
32,686
24,161
Louisiana .... ..
7,724
2,496
1,748
11,968
9,261
44,337
39,792
New Mexico...
270
3,050
180
3,518
2,702
16,823
16,303
Oklahoma . . . . .
2,092
10,367
880
13,339
11,228
72,303
62,408
Tex88......... 18,440
35,021
933
54,403
39,769
213,307
176,733
Total. .... 31,192
54,973
3,780
89,945
66,353
"Includes receipts from the sale of livestook and liyestook products.
SOURCE: UnIted States Department of Agriculture.
379,456
317,487
PRICES RECEIVED BY TEXAS FARMERS FOR SELECTED
PRODUCT8-(DoUars pcr unit)
July 16. Aug. 16, Peroentage
Commodity
Unit
1941
1930
ehnnge
Wheat.. .. .. .. .. .. .. .... Bushel $ .860 $ .640
+ 59
Corn .............. .. .... Bushel
.660
.440
+ 60
Oats .. .... .............. Bushel
.350
.270
+ 30
Rice .. .. .. .. .. .. .. .. . . .. Bushel
1. 200
.620
+ 04
Grain sorghums.. .. .. .. .. Cwt.
1. 050
. 820
+ 28
Peanuts.............. ... Pound
.036
.031
+ 16
Hay, aU........ .. .. .....
Ton
7. 100
7. 100 No ehg.
Cotton .... .... .... ...... Pound
.130
.086
+ 64
Cottonseed .. .. .. .. .. .. ..
Ton
35 .000
15.600
+ 130
Butterfat.. ........ ... ... Pound
.330
. 100
+ 74
Milk, wholesalo.. . .. .. .. . Cwt.
2.250
1. 050
+ 16
Chiokens, Ii Yo. . . . . . . . . . .. Pound
. 145
. 100
+ 33
~:\.'::::: : : : : :::: ::::: ~:~~d
: ~~~
J~~
:I: ~~
AGRICULTURAL
o
Jan.15, Peroentog
ohango
1941
+21
$ .710
+25
.530
No ohg .
. 350
+21
.990
+18
.890
+13
.032
_7
7.600
+58
.088
+37
26.200
+14
.290
-6
2.400
+30
.112
+24
. 183
+19
.310
+49
6.500
+16
7.000
+17
8.600
+8
5.200
+7
7.600
Hogs.. .. . .. .. . .. .. .. .. .. Cwt.
O. 700
5 . 400
+ 80
Beef oattle............... Cwt.
8.100
5.800
+ 40
Vealoalyes........ .. .... Cwt.
0 .000
7.200
+ 38
Sheep................... Cwt.
5.600
4.200
+ 33
Lambs............ .... .. Cwt.
8.100
6 .800
+ 40
SOURCE: United States Department of Agrioulture.
CROP PRODUCTION-(In thousands of units)
. t . t~
,..---TexB8----v--Eleyentb DIS riO . n
Estimated Production Estimated Produotl O
Crop
Unit
Aug. I, 1941
1040
Aug. I, 1041
1940 9
Cotton.. ... .............
Bales
2,572
3,234
3,132
10~'~~3
Corn....... .. .. .. . . .... . Bushels
76,428
00,324
90,020
29'957
Winter wheat . .. . . • . . . . . . Bushels
35,420
20,355
36,105
40'507
Oats... ..... ..... . . .. ... Bushels
36,100
37,125
39,292
11'053'
Barley.. .. .. .. .. .. . .. .. . Bushels
7,884
3,825
16,811'
16'OO5t
Rioe. . . . . . . .. . . . . . . . . . . . BlIshols
16,060
16,005
16,060
22'OOO~
Broomcorn.. ............
Tons
4,000
3,800
19,800
67'587'
Grain sorghums.......... Bushels
58,294
46,307
81,370'
1'781
Tame bay. . . . .. ......•..
Tons
1,212
1,341
1,719
235'780t
Peanuts ... :........ .. .. . Pounds
160,000
170,200
202,335§
3'949
Potatoes, Irish .. ; . . ...... Bushels
6,386
3,200
7.204
10'023"
Potatoes, sweet.......... Bushels
4,774
4,335
12,952·
3'082'
Peaches . . . . . . . . .. .. .. .. . Bushels
2,261
2,036
3,809'
67'744.
Pecans... ... . .. .. ....... Pounds
29,670
41,000
59,410·
, N 'II
'Texas, OklahOma, New Mexico and Arizona. fTex88 only. rrex88, Oklahomokr1.0;.'
Mexico. §Tex88 and Oklahoma. ·Tex88, Oklahoma and Louisiana. -Tex88,
\natcs
Louisiana, New Mexico and Arizona. Other data for Eleyenth Distriet derived from estl
by states.
SOURCE: United States Department of Agriculture.
t
MONTHLY BUSINESS REVIEW
rose 20 per cent betwten January 1 and July 19 this year, this
gain being the largest recorded for any major group of commodities included in the Bureau's comprehensive index. Due to
the increase in wholesale quotations, prices received by farmers
for their products rose to the highest level since March, 1937.
The prices of virtually all farm products participated in the
gain, with pronounced increases being recorded in the prices
received for principal cash crops, including cotton, wheat, corn,
rice, grain sorghums, wool and livestock and livestock prodUcts. Factors contributing to the upward trend in prices included marked increases in demand resulting from the rising
national income and purchases in connection with the defense
program, and Federal action with respect to the establishment
of minimum prices on poultry, dairy, and pork products and
legislation establishing mandatory loan rates on five principal
cash crops at 85 per cent of parity prices.
Farmers in the Eleventh District have apparently benefite4
from the advancing prices to a greater extent than those in
Some other sections of the country due to the fact that prodUcts contributing most substantially to cash farm income in
this area have been affected by the above factors. The rise in
the price of cotton, which enabled farmers to sell for substantial sums their equities in cotton previously pledged as collateral for Government loans, has contributed significantly to
an increase in farm income thus far this year. During the first
five month of 1941 cash income of farmers in this district from
the sale of crops averaged nearly 27 per cent larger than in the
Corresponding period a year earlier, whereas, for the nation as a
whole the gain in farm income from this source amounted to
Only 2 per cent. Livestock prices in this district showed gains
during the first half of 1941 ranging from 7 per cent for sheep
to 50 per cent for hogs, and cash income from the sale of livestock and livestock products rose sharply as compared with
a year earlier. Farm income in this district from the sale of both
crops and livestock averaged about one-third higher during the
first five months of 1941 than in that period of 1940, but total
income was up only 20 percent, reflecting a substantial contraction in Government benefit payments.
FINANCE
Daily average reserves of member banks maintained at the
Federal Reserve Bank of Dallas, which increased considerably
between October, 1940, and February this year, have fluctuated
within comparatively narrow limits since that time. During
the first half of August these balances averaged $248,600,000
which was less than $1,000,000 below the average for February,
but $31,500,000 greater than a year ago. Excess reserves, on the
other hand, have declined somewhat since last February, reflecting chiefly increased deposits at member banks with the consequent expansion in required reserves. Daily average excess reserves during the first half of August were estimated at $87,000,000, which was $7,900,000 less than in February.
Federal Reserve notes of this bank in actual circulation reCorded a new peak at $111,600,000 on August 4. This figure
Was $2,400,000 larger than the previous. high established one
month earlier and $28,300,000 greater than a year ago.
Total loans and investments at weekly reporting member
banks in this district showed a pronounced increase between
july 9 and August 13, reflecting chiefly the customary seasonal
Upturn in the demand for bank loans incident to the harvesting
and marketing of crops and the movement of merchandise in
Preparation for fall trade. Total loans increased $11,400,000 due
~Illlost entirely to a net increase in advances for commercial,
Industrial and agricultural purposes. "All other" loans, conSiSting in large part of personal and instalment loans, declined
slightly during the five-week period, which contrasts with
month-to-month increases since August last year. Aggregate
loans of these banks outstanding on August 13 this year were
the highest since December, 1930, and $62,000,000 greater than
a year ago. Investments at reporting banks continued the upWard trend in evidence since February, increasing $5,100,000
8
during the five weeks ended August 13 to a level near the alltime peak re!=orded in December, 1936.
The daily average of gross demand deposits at all member
banks in the Eleventh District increased slightly further to a
new high in July, whereas, daily average time deposits declined
to the lowest level recorded thus far this year. Reflecting in
part purchases of Defense Savings Bonds, savings deposits on
July 31 at 114 reporting banks in this district were the smallest
in about two and one-half years. This decrease was fairly general
among reporting banks throughout the district.
INDUSTRY
The building industry in this district continued at a comparatively high rate of activity in July, reflecting to a considerable extent the construction of projects for use directly or indirectly in the National defense program. Contracts awarded
during the month were valued at $23,100,000, which was moderately higher than a month earlier and nearly one-fifth greater
than in July last year. The val'\le of awards for engineering
CONDITION OF THE FEDERAL RESERVE BANK
(In thousand. of doUars)
August 15. August 15,
1941
1940
Tot.1 oash rosorves . . . . . . . . . . . . ... . . . . . .• .. . . . . . . . $356,437
$270,795
Discounts for member b.nks... . . . . . . . . . .. . . . . .. ...
515
862
Industri.1 .dv.noos... . . . . . . . . . .. . . . . . . .. . . .. .... .
333
463
United St.tos Govornment seouritios. . . . . . . . . . . . . • . .
85,830
95,344
Tot.1 e.rning assots. . . . .. .. .. .. .. . .. .. . . .. . .. .. ..
86,678
96,669
Member b.nk reserve doposits. . .......... .........
253,774
211,954
Fed ....1 Roservo notos in actual oiroulation. . . . . .. .. .
109,099
82,400
July 15,
1941
1345,304
250
274
85,830
86.354
248,584
107,068
CONDITION STATISTICS OF MEMBER BANKS IN LEADING CITIES
(In thousand. of dollars)
August 13, August 14,
July 9,
1941
1940
1941
Tot.lloans .nd invostments ....... ... ............. $624,077
$527,626
1607,556
Total loans . ...............................•....•
330,346
268,404
318,051
Commeroi.l, indu.trial.od .grioultur.lloan8. .....
222,419
170,000
211,796
Open market paper .. .. .. . . .. .... .. .. .. ...... ...
2,470
2,302
2,523
Lo.ns to brokers and dealors in seourities . . . . .. . . ..
3,598
2,853
2,458
Oth~r loans for pnroha.ing or carrying aeourities....
13,782
13,472
14.107
Re.l e.t.• t,. loans ... ............................
23,062
28,004
23,130
Lo.n. to banks ............... . .................
610
000
311
All other lo.ns............................... . .
64,449
49,774
64,631
United St.te. GO"croment direct oblig.tion..........
187,356
153,104
183,617
Oblig.tions fully gu.r.nteed by Unitod States Govt ..
40,148
48,166
45,840
Oth~r 8Oeuritie.. . ...................... . ...... .. .
00,232
57,862
50,148
Roservca with Feder.1 Roserv. B.nk...............
162,377
140,600
155,162
B.lanoca with demcatio b.nks......................
310,732
284,714
308,826
Demand deposits-adjusted·. ..............••....•
593,190
400,145
558,622
Time dejlOSlts.. ... ... . ...........................
133,555
135,569
135,017
United States Government doposits...... ...... .. . . .
38,344
31,708
37,233
Interb.nk dep08ita .... .. .. .. .. . .. . . . . .. .. ...... .. .
289J073nol
245,636
290,429
Borrowing. from Federal Rosorv. B.nk. . . . • . . ... . . •
N
None
None
·Ineludes .11 demand depoaita other than interb.nk and United States Gov.rnmont, le81
ca.h itoma roported .s on b.nd or in the proooss of collection.
DEBITS TO INDIVIDUAL ACCOUNTS
(In thousan~. of dollars)
Potg.ch.ngo
July
July
1941
1940
over ye.r
$
Abilene .. . .. ............... .
12,429
$ 7,818
+59
Austin ................. .
34,388
31,000
+ 8
Beaumont . .. .. ....... .. . .
31,830
23,300
+37
Corsicana ....•....•...•.
3,755
2,810
+34
330,700
244,214
+35
D.U.8 .. ............... ..
El Paso ................ .
41,502
26,720
+55
Fort Worth ............. .
102,823
80,847
+28
G.lveston ........ _ ..... .
30,664
24,948
+23
320,572
247,614
+29
Houston ................ .
11,361
9,242
+28
Port Art·hur ... .........•
4,538
4,689
- 3
Roswell . .... . • ..........
91,389
71,964
+27
San Antonio ...... ..... . .
51,375
45,032
+14
Shreveport ..•... .. .. . ...
T.xarkana· ............ ..
9,372
6,617
+42
14,069
11,292
+25
Tuoson ................. .
14,427
10,022
+32
16,754
12,639
+33
Wiehit. FaU•............
21,700
16,061
+35
WV~~~::::::::: :::::: :: : :
June
1941
13,259
35,050
30.040
3,808
311,112
34,814
04,805
30,855
312,403
10,354
4,620
92,165
51,121
8,422
15,518
18,388
15,145
18,454
Potg.eh.nge
over month
-6
-2
+6
-1
+6
+19
+8
- 1
+3
+10
-2
-1
+t
+11
-9
+8
+11
+18
$1,005,483
$878,120
Total. ........ ". $1,143,706
+4
+30
·Inoludes figure. of two b.nks in Tex.rk.na, Ark.nsas, loo.ted in the Eighth District.
tIndioatcs ohange of le88 th.n one-haU of on. por cent.
SA VINGS DEPOSITS
July 31,1941
Percentage ohaofe in
savings deposit. rom
Number of Number of Amount of ~
July 31,
June 30,
savings
saviORS
rec,ortin g
1940
1941
dopositors
depoeits
.nks
10,475 $ 4,250,038
.6
Beaument ..........•....
3
5.8
92,254
20,340,006
.4
- 2.2
0.11....................
8
7,417,367 - 0.6
- 11 .9
2
19,909
EI Paso .................
34,707
13,036,548 + . 1
Fort Worth ..............
3
- 1.8
-1.5
18,803
11,587,173 - 5.7
Galveston ..........•.•..
4
77,932
32,456,943
Houston .... . ............
10
- 1.6
2.8
3,054,700 - 4.5
- 2.6
2
6,015
Port Arthur .............
17,799,095 + .1
- 2.1
23,628
San Antonio .. ...... .....
5
.5
25,624
11,950,875 - 3.6
3
Shreveport ..............
4,409,074 - 4.6
- 1.2
7,950
3
W.co ... . . . .........•.•.
7,142
3,424,460 - 6.1
Wiohit. Falls ..... .......
- 1.6
3
29,582,321 - 3.4
59,258
- 2.1
All others ...............
68
-
+
-
+
-
Total. •• _ ........
114
383,697
$105,309,405
-
1.5
-
2.2
MONTHLY BUSINESS REVIEW
projects, including public works and public utilities construction, which had been maintained at a high level during the first
half of 1941, declined considerably in July to the lowest level
in more than a year. This contraction, however, was counterbalanced by a substantial upturn in non-residential building,
the major portion of which consists of commercial, manufacturing, educational and science buildings. Residential building was
well sustained in July; the value of contracts awarded was about
the same as the monthly average for the first half of 1941,
which, in the aggregate, was the highest recorded since 1926.
The high rate of building activity in this district thus far
this year has brought about a pronounced increase in the demand
for allied products, including cement, lumber and lumber products, and structural and ornamental iron and steel.
The work of coordinating operations of the petroleum industry with National defense efforts continued during July and
the first half of August. On July 12 the National Petroleum
Coordinator announced the appointment of four advisory committees in each of five designated areas for the purpose of studying and recommending effective measures of coordination in the
four branches of the petroleum industry-production, refining,
transportation and marketing. Other important measures adopted were concerned chiefly with the matter of meeting the potential shortage of petroleum and petroleum products on the East
Coast. These measures included enactment of legislation extending the right of eminent domain to private builders of
petroleum pipe lines that the administration considers essential
to the National welfare, voluntary reduction of freight rates
by railways to facilitate transportation of crude oil to the East
Coast, and the order issued as of August 15 by the Office of
Price Administration and Civilian Supply reducing the amount
of gasoline that may be supplied to retailers and consumers in
states along the Atlantic seaboard to 90 per cent of the amount
delivered in July.
Physical operations in the petroleum industry were maintained at a high level during July, notwithstanding a contraction in the daily average rate of crude oil production occasioned
by a lowering of production allowables in Texas, New Mexico
and Louisiana due apparently to the shortage of ocean-going
tankers used in transporting crude oil from the Gulf Coast to the
Atlantic seaboard. On the basis of August 1 production allowables, output in the southwestern states during August should
recover the July decline and closely approximate the output in
June. Refinery operations during July in both this district and
the United States reached new high levels, with the rate of
activity averaging about 10 per cent higher than in July last
year. Drilling activity was also increased during July. In the
VALUE OF CONSTRUCTION CONTRACTS AWARDED
(In thousands of dollars)
July
July
Juno
January 1 to July 31
1941
1940
1941
1941
1940
Eleventh Distriolr-total... $ 23,138
$ 19,011
$ 21,831
$ 185,541 $ 138,367
Residontial. .......... .
9,312
6,516
9,456
64,459
47,727
All othor . . . .. . .. . .. . . .
13,826
12,495
12,375
121 ,082
90,640
United Stat.s'-total.. . ..
577,392
398,673
539,106
3,127,354
2,021,760
Residential. . . . . . . . . . . .
205,049
140,430
205,634
1,154,043
831,002
All other . . . . . .... .. .. .
372,343
258,243
333,472
1,973,311
1,190,758
"37 states east of the Rooky Mountains.
SOURCE: F. W. Dodge Corporation.
Abilene .... .. . .
Amarillo . ..... .
Austin ...... . ..
Beaumont ..... .
Corcus Christi. •
Dal as ........
EI Paso ........
Fort Worth . . ...
Galveston ......
HOllston ........
Port Arthur . .. .
San Antonio . .. .
Shreveport . ....
Waoo .. .. . .. .. .
Wiohita Falls . ..
BUILDING PERMITS
Percentage ohange
Percentage
valuation from
July, 1941
Jan. I to July, 31,1941 ohan~e
v
v
, valuation
Valuation
No. Valuation July,1940 June,1941 No.
from 1940
332 $ 777,738
37 $ 83,375
+ 45
+ 58
+126
245,388
505
1,642,473
65
+ 38
+ 4
+ 8
379,352
- 21
1,313
- 27
197
3,461,855
- 28
200,909
952
1,304,695
169
+ 18
+ 37
+ 4
818,446
1,598
225
- 20
9,500,085
+ 5
+ 05
- 12
- 21
5,402
7,043,027
781 1,022,773
5
342,041
015
1,702,324
+ 50
+ 79
116
+14
591,105
1,961
302
+ 35
- 45
4,001,451
+ 41
243,704
1,466
212
+ 95
+ 12
+181
3,476'003
- 24
3,384 12,482, 0
- 31
543 1,578,231
8
123,070
818
+ 55
+ 40
723,736
135
+ 3
583,041
4,510
4,100,250
- 29
- 27
1,081
+ 6
370,470
2,167,310
142
- 39
+ 16
870
- 27
734,251
400
3,363,194
+ 10
+ 30
81
+144
233,115
+246
441
071,044
100
+146
+ 38
------ - - - - 7 - 15
Total. .... 4,195 $7,550,351
-
-
24,066 $57,798,474
+ 16
Eleventh District the number of wells tompleted was at the
highest rate since February, 1939, and in the United States the
daily average number of well completions was above that for
any month since October, 1937. Factors contributing to the increase in drilling include the higher level of prices and heavy
demand for crude oil and refined products, and increasing production allowables in some producing states. The number of
drilling rigs in operation in this district on August 1 was nearly
one-third greater than a year ago and in the United States the
number was up 14 per cent.
In contrast with the trend in other recent months, inventories of crude oil in this district declined in July along with a
further contraction in petroleum inventories in the United
States as a whole. This development appears to have been due
to the expansion in refinery operations coincident with a curtailment in crude oil production, since shipments of cru~e
petroleum from the Gulf Coast continued to be deferred In
favor of petroleum products. On August 2 stocks of motor fuel
on the East Coast were only 783,000 barrels lower than a year
ago and in the United States as a whole they were down 2,113,000 barrels. Inventories of heating oil continued to expan.d
seasonally, and stocks of industrial fuel oil showed an apprecIable gain for the first time in nearly one year.
Cottonseed oil mills in Texas and the United States increased
operations considerably during the 1940-1941 season, reflecting
chiefly a larger supply of seed available for processing. In the
United States seed crushing and the production of products
averaged about 6 per cent higher than in the preceding seasonJ
and in Texas these operations were up 13 per cent. The deman
for cottonseed oil during the twelve months, as measured. by
mill shipments, was appreciably higher than in the preceding
season, whereas, shipments of cake and meal and hulls showed a
noticeable contraction due in part to sharply reduced exports.
Although the domestic consumption of linters during the I:ast
season was 294,000 bales in excess of that in the precedmg
season, this gain was more than offset by a decline in exports.
Mill stocks of cake and meal and hulls on July 31 this year
were much greater than on that date a year earlier, but inventories of crude cottonseed oil were the smallest for any monthend in four years.
STATISTICS ON COTTONSEED AND COTTONSEED PRODUCTS
,.._--Texas--v--Unitnd StatesAugust 1 to July 31
August 1 to July 31
TIllS season
Last season
Thi, S08son
Last scase a
Cottonseed received at olllls
1,097,052
023,431
4,488,725
4,060,635~
7
(tons) ................... . .
1,085,572
062,087
4,306,101
4,150,
Cottonseed crushed (tons) . . .. .
Cottonseed on h.nd July 31
39,705
27,227
16,412
131,376
(ton') .. . ...... . .... . . . . . . .
Produotion of produots:
281,231,027 1,424,809,485 1,325,241,460
Crude oil (pounds) ........ . 333,765,418
462,030
1962011
1,882,21 7
Cake and me.1 (tonB) . ... . . .
507,432
247,742
1'107'688
1054,778
Hulls (tons) ........ . . . . . . .
276,877
"
1',072,389
260,213
224,857
1,207,309
Linters (running b. leB) .. .. . .
Stooks on hand July 31:
13 248,158
6,226,074
8,581,828
Crude oil (pounds) ........ .
1,835,043
, 70,501
165,066
31,352
20,548
Cnko and menl (toIlB) ...... .
20,914
151,546
6,105
Hulls (tonB) .... .. . . ...... .
60,511
129,340
124,421
28,213
43,638
Linters (running bales) ..... .
SOURCE: Bureau of CensuB.
CRUDE OIL PRODUCTION-(Barrels)
.
Inorease or deoronse in dally
July 1941
,
M'orago produotion ~
Total
Dailyavg.
1
June, 194
production
July, 1940
production
5,660,250
North Texa' .... .. .......... ..
182,580
+ 31,049
.:!=1~:~~~
8,383,600
W..tTex•• . . .. .. . . ..........
270,430
+ 53,337
-'16,428
East TexaB ................. . 12,772,750
412,024
- 50,815
_13,425
6,040,200
South Tox.B ................ .
105,135
+ 14,267
_ 15,596
260,574
+ 73,026
_
8,077,800
Telas CODBtal.. ............. .
Total TexaB ..... . .
Now MOlieo .... . .. ......... .
North Louisiana ............. .
40,943,600
3,380,150
2,378,000
1,320,761
109,037
76,739
+121,764
+ 4,134
+ 10,913
-
_81,181
- 3,036
+ 867
_8~,350
Total Distriot......
46,702,650
1,506,637
+la6,811
SOURCE: Estimatnd from American Petroleum InBtitute weekly reports.
RECEIPTS, EXPORTS, AND STOCKS OF COTTON AT THE PORTS OF
HOUSTON AND GALVESTON-(BaleB)
July
July
June
August 1 to Jul~.a.~oo
1941
1040
1041
ThiB Beason Last"....
Reoeipts.... . . . . . . ... ....
150,011
62,011
154,345
2,252,624
3,923,435
Ex:r..:,~..(~~~~i.g.~ ~~~.~~~.~
67,061
Stocks, ond of month . . . . . 1,661,367
83,050
1,235,465
65,665
1,878,965
1,096,236
3,605,220
...
MONTHLY BUSINESS REVIEW
SEPTEMBER I. 1941
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
.......
INDUSTRIAL PRODUC'rION
160
160
I
1'0
100
IJ
140
i
150
I
120
110
1('0
L f!
90
00
... ""
'\
\
/
)
J
\
140
I----
I V-
120
I 10
I00
v
90
r--J
rv/
80
70
70
1016
1
935
19~8
1937
1939
1941
1940
Federal Reserve index of physical volume of production. adjusted for seasonal variation. 1936-39
average
100. By months. January. 1986 to
July. 1941.
=
DEPARTMENT STORE SALES AND STOCI<S
... ''''
/2()
,
110
60
-"
IAJ'"
/
t--"'\
'VI"'V
--.J"r./""/
I00
]V
J
Y , SAI.EI
90
70
I 10
,)
109
80
H"Ion
20
90
eo
"J
'_:~.7
70
V'
PRODUCTION
Volume of industrial output showed little change from June to July. Reductions in actIvIty at
automobile factories and steel mills were largely offset in the total by further increases in the machinery. aircraft. shipbuilding. and lumber industries. The Board's adjusted index. which includes allowance
for a considerable decline at this season. advanced from 157 to 162 per cent of the 1931-1939 average.
Steel production. which in June had been at about 98 per cent of capacity. declined to 96 per cent
in July. owing in part to holiday shutdowns at some mills. In the first half of August steel output was
again at about 98 per cent of capacity. Automobile production in July declined less than usual but in
the first half of August there was a sharp reduction as most plants were closed to prepare for the shift
to new model production. Activity in the nonferrous metals industries continued at a high rate. Early
in August copper. pig iron. and all forms of steel were placed under complete mandatory priority control as it became evident that actual demand for these metals could not be fully met.
In the wool. cotton. and rayon textile industries and at shoe factories activity in July was maintained at or near the peak levels of &ther recent months and production of chemicals rose further. Output of manufactured foods increased less than seasonally from the high level reached in June.
Coal production declined slightly in July but as in June was unusually large for this time of year.
Crude petroleum production was maintained at about the high rate that had prevailed in the previous
two months.
Value of construction contract awards in July increased further to a level more than two-fifths
higher than a year ago. according to F. W. Dodge Corporation reports. The rise reflected chiefly a
continued increase in contracts for public construction. mostly defense projects. Private residential
building contracts increased somewhat. although there is usually some decline at this season. while
awards for other private building declined further from earlier high levels.
60
'0
50
1935
Industrial activity in July and the first half of August was maintained at the high level reached
in June. Wholesale commodity prices advanced further and distribution of commodities to consumers
was in exceptionally large volume.
1938
1937
1938
1940
1939
1941
Federal Reserve indexes of value of sales and
stocks. adjusted for seasonal variation. 1928-26
average
100. By months. January. 1986 to
July. 1941.
=
DISTRIBUTION
Sales at department stores and in rural areas declined by much less than the usual seasonal amount
in July and variety store sales increased further. In the first half of August department store sales rose
sharply.
110
Total loadings of revenue freight in July and early August showed little change from the advanced
level reached in June. Grain shipments. which had been larger than usual in May and June. increased
less than seasonally and loadings of coal declined somewhat.
100
COMMODITY PRICES
WHOLESALE PR ICES
·U"ffT
ilUU'"
110
90
90
00
80
70
70
60
60
00
00
19~
1
936
1937
1938
1939
=
1940
1941
Bureau of Labor Statistios' indexes. 1926
100.
"Other" includes commodities other than farm
IJroducts and foods. By weeks. January 6. 1986 to
week ending August 16. 1941.
............... MEMBER
14
B~~~, IN 101 LEADING CITIES'
......,& ......
I
;
I I
12
U. 8.
arNr
OBLIGATIONS
~ _flt
10
I~
/
./"'
o
.,..
~
I
I
----'"
I
I
11>36
Total loans and investments at reporting banks in 101 leading cities rose further during the five
weeks ending August 13. Commercial loans continued to increase substantially. while holdings of
United States Government obligations showed little change. Bank deposits remained at a high level.
LOANS 10 BROKERS
-J
1937
AGRICULTURE
Agricultural production in 1941 may exceed that in any previous year. according to indications
on August 1. and carryovers of major crops arc unusually large. Crops of wheat and other leading
foodstuffs are expected to be exceptionally large. while substantial declines in production are indicated
for the major export crops-cotton and tobacco. Although the cotton crop is estimated at 10.600,000
running bales. or 1.800.000 bales less than last season. total supplies of cotton will be about the same
owing to a larger carryover on August 1. Marketings of livestock and livestock products. except hogs.
will be substantially above last year.
BANK CREDIT
./
OTHER 8EWRITI1!.8
-
1
935
,...,r
/~
lc;~LOI.NS
-
I
The general index of wholesale prices advanced about 2 per cent further from the middle of July
to the middle of August. reflecting sharp increases in prices of a number of agricultural and industrial
commodities. Federal action to limit price increases was extended to additional basic materials. including
burlap. silk. rayon fabrics. rubber. and sugar. and in the early part of August prices of these commodities in domestic markets showed little change or were reduced. On the other hand. prices for paperboard. automobile tires. and cotton yarns and gray goods were advanced with Federal approval; prices
of textile products not under Federal control continued to rise; and there were considerable increases in
prices of lumber. other building materials. and chemicals. On August 16 it was announced that for
Southern pine maximum prices somewhat below recent high levels would become effective on September 5.
,)... AND D£AI.ERS
o
1938
1939
1940
1941
Wednesday figures. January 2. 1986 to August 18.
1941. Commercial loans. which include industrial
and agricultural loans. represent prior to May 19.
1987 so-called "Other lonns" as then reported.
UNITED STATES GOVERNMENT SECURITY PRICES
After advancing to the highest levels on record. prices of both taxable and partially tax-exempt
Treasury bonds declined somewhat in the first part of August. On August I S the partially tax-exempt
2* per cent 1960-65 bonds yielded 2.06 per cent. compared with the all-time low of 2.02 per cent on
July 29. Yields on Treasury notes showed little change in the period.
THE UNITED STATES COTTON INDUSTRY-1940-1941 SEASON
The cotton industry in the United States was affected materially during the 1940-1941 season ended July 31 by the
National defense program, increasing national income, and international trade restrictions. Outstanding developments included a marked expansion in the domestic demand for cotton
products with the consequent rise in consumption of raw cotton, sharp advances in prices of raw cotton and cotton textiles,
the withdrawal of ,a substantial volume of cotton formerly
placed in Government loan stocks, and a pronounced decline in
shipments of raw cotton to foreign countries.
During the early months of the 1940-1941 season domestic
cotton mill activity was stepped up to meet a strong commercial
demand for cotton products and heavy Government orders for
N ational defense and relief purposes, and the upward trend in
operating schedules continued with minor interruptions
throughout the remainder of the season. Rising employment and
payrolls intensified consumer demand for cotton products and
the enlargement of the country's armed forces necessitated
heavy additional purchases by the Federal Government, A
large percentage of the orders placed with mill,S early last season
were for delivery in distant months and in consequence textile
mills accumulated a heavy backlog of unfilled orders. Although
mills increased production of textile products to meet those
commitments, subsequent buying largely offset current output,
and trade reports indicate that at the beginning of the current
season mills still had a heavy volume of orders on hand and that
some producers were receiving substantial orders for delivery
during the first quarter of 1942.
As a result of the heavy demand for cotton textiles during the
past season, cotton consumption exceeded by a wide margin the
previous all-time high established in the 1936-1937 season. The
all-time monthly peak in cotton consumption occurred in July
this year when 929,000 bales were utilized, On a seasonally adjusted basis, ,this amount was 180 per cent of the 1935-1939
average. During the twelve months ended July 31,1941, processing establishments consumed 9,718,000 bales of cotton,
which compares with 7,784,000 bales in the preceding season,
and an average of 6,200,000 bales during the ten seasons ended
July 31, 1940. The utilization of cotton at consuming establishments in Texas showed a much larger increase during the
past season than consumption at all mills in the United States
due to the intense demand for some of the products produced
b~ mills ~n that state. Total consumption of cotton by Texas
ffilils durmg the season amounted to 242,000 bales which was
73 per cent larger than in the preceding season,
Reflecting the increase,d dema~d for cotton textiles during
the 1940-1941 season, pnces of virtually all constructions followed a noticeable upward trend until the final few weeks of
the season when the Office of Price Administration and Civilian
Supply established ceiling prices somewhat below the then prevailing quotations on combed cotton yarns and the more important types of cotton textiles. Despite that action, prices of cotton
products at the beginning of the current season were substantially above those prevailing in other recent years, averaging
more than 50 ,per cent hig?er t,han quotations on August 1
last year. Despite advances m pnces of raw cotton, mill margins, or the average spread between the price of a pound of raw
cotton and the price of its cloth equivalent, showed successive
gains during each mon,th from AUg,ust, 1940, through June,
1941. .Although a declme occurred m July as a result of the
establishment of ceiling prices on many textile products below
CONSUMPTION, STOCKS, AND EXPORTS OF C;OTTON- (Bnles)
July
July
June
August 1 to July 31
1941
1940
1941
This senson Last senson
Consumption nt:
Texas mills , , ' . , .... . , .
29,607
12,497
10,677
241 668
130 310
United States mills . ' , ..
928,043
622,723
875,137
9,718:220
7,783:774
U.S. stooks--1lnd of month:
In consuming estnb'mts. 1,874,1 87
972,353
1,918,385
Publio8tg. & compresses . 9,704,095
9,121,817 10,570,235
Total exports . . . . . .. . .'•. .
32,718
136,751
75,236
i,08 ',<iIi<i
S
the then prevailing quotations, the average mill margin for
that month was still nearly three-fourths higher than for the
corresponding month a year earlier.
The net increase in raw cotton prices during the last five
months of the 1940-1941 season averaged about 6.66 cents per
pound or $33.30 per bale. The principal factors contributing
to this rise were the strong domestic demand for cotton and
Federal legislation increasing the Government loan rate on
cotton to 85 per cent of parity. In consequence of the rise in
cotton prices, a considerable portion of the cotton that had
been pledged as collateral for Government loans was redeemed
with substantial profits to producers. According to the Department of Agriculture, approximately 4,785,000 bales of cotton
were repossessed during the past season and on July 31 Government loan stocks amounted to only 6,480,000 bales, as against
stocks of 8,733,000 bales on July 31,1940. Government stocks
at the close of the past season included only 425,000 bales
against which loans were outstanding; the remainder was owned
outright by the Commodity Credit Corporation. During the
final week in July and the first half of August cotton prices
declined by about 7 per cent, reflecting in part the substantial
volume of "free cotton" in commercial channels, a decline in
demand, and the operation of market forces to bring a closer
alignment between spot prices and the established loan rate
on cotton grown in 1941. On August 4, the Department of
Agriculture announced that 1941 loans on cotton produced by
farmers cooperating with the program of the Agricultural Adjustment Administration would average 85 per cent of parity
or about 14.82 cents per pound for middling, 15/16-inch
staple, which compares with an average loan rate of 8.90 centS
per pound on cotton of similar grade and staple grown in 1940.
The average price of cotton, middling, 15/16-inch staple, at
ten spot markets on August 15 was 15.74 cents per pound.
Exports of cotton from the United States during the past
season were the smallest since the Civil War period, totaling
only 1,083,500 bales as against 6,192,000 bales in the preceding season.
The Department of Agriculture estimated the domestic carryover of cotton on July 31, 1941, at 12,200,000 bales, or 1,640,000 bales larger than a year earlier. A substantial portion of
this gain was in stocks of cotton held by domestic consuming
establishments. In view of the large monthly consumption and
the continued strong demand for cotton textiles, mills have
made heavy purchases of raw cotton and have maintained larger
stocks than usual; on July 31 inventories were the highest of
record for that date and 93 per cent greater than a year ago.
Stocks in public storage and compresses on July 31 aggregated
9,704,000 bales, as compared with 9,122,000 bales on the
corresponding date a year earlier. On July 31 this year, commercial interests apparently owned between one-fourth and onethird of the cotton in public storage and compresses, whereas,
a year ago their holdings were relatively small.
"'" "ONS
12
DOMESTIC CONSUMPTION AND EXPORTS OF
AMERICAN COTTON ML LIONS or AUNNI NC
or RUNNINC SALts
f2J
•
BALES
OOMESTIC CONSUMPTION
EXPORTS
I'·
'",
10
•
•
•
•
4
-
2
0
1911:>'2.
Zl l!8
'29-'30
'31 .'32
33:3<1
'33'38
-38
'
30-00
J
2
0
@FedFRASER