TEXAS BUSINESS REVIEW Bureau of Business Research The University of Texas Vol. XII, No. 1 A Monthly Sammary of Bulin-and Economic Conditions in TeJ:as and the So~weet Bureau of Bmineu Reeearch, The UniYenity of Texu, Au1tin, Te:u1 lalelM u -o•• ela• ..11.. • Ma7 T, lnl, ot Ille pool olice at Autia, Tent, uder A.et ef A.....1 H, lt1J E.GE.N O · Tl..AN .S Ml ~ LI NlSS ON o Kv . ft.AM M1~310M Liil 0 t>LLO\Jf D Tl.lbUTIOll · llM1 "' TEN CENTS PER COPY ONE DOLLAR PER YEAR TEXAS BUSINESS REVIEW OO~HtitttltHtltttttlt INDE.XE.~ OF e>us1NE.ss ACTIVITY IN TE. XAS 180~ftttttttttttttttttlt 170 lb() '"° 140 100 AvUl.AGE MONTM Of 1930•100"' EMPLOYMENT AND PAY ROLLS IN TEXAS, CLASSIFIED BY INDUSTRIES AND SELECTED CITIES, JANUARY, 1938 Pay Rolls for One Week Ending Nearest Fifteenth of Month Number Number of l'ercentage Amount of Percentage Average Weekly Waae of Estab-Employees Change from Pay Roll Change from per Employee*lnduetry Iishments Re· Jan. Dec. Jan. Jan. Dec. Jan. Jan. Dec. Jan. porting 1938 1937 1937 1938 1937 1937 1938 1937 1937 All Manufacturing Industries_________________________ 634 46,649 2.4 + 2.8 $1,148,510 3.2 + 12.5 $24.62 $24.82 $22.51 Food Products Bakery Goods___________________________________________ 39 969 4.0 2.3 18,887 7.8 + 2.5 l~.49 20.30 19.63 Beverages, Carbonated___________________________ 30 4.37 + 2.6 +36.1 9,149 + 7.5 + 40.3 20.94 19.99 19.37 Confectionery_____ _________________________________ 5 174 9.4 + 4.0 2,482 -11.1 + 4.1 14.26 14.54 13.19 Flour Milling_______________________________________ 8 446 3.0 + 12.2 9,976 2.9 + 26.1 22.37 22.34 21.41 Ice, Manufactured_____________________________ 64 557 5.1 7.8 10,072 3.5 -8.0 18.08 17.78 18.03 Ice Cream________________ _____________________________ 6 253 6.6 7.9 5,253 + 1.0 -11.4 20.76 19.20 20.58 Meat Packing__________ _____________________________________ 10 3,266 7.8 7.6 82,282 8.8 + 4.9 25.19 25.47 22.63 Textiles Cotton Textile Mills ______ -------------------------·-----9 2,670 5.0 + 28.5 34,587 + 0.3 + 7.4 12.95 12.27 12.91 Men's Work Clothing______________________ _______________ 12 1,007 + 1.4 -28.5 8,4.33 + 0.4 -46.5 8.37 8.46 9.21 Forest Products Furniture ___________ --------------------------------9 459 3.8 -14.4 7,080 -26.8 -24.0 15.42 20.28 17.19 Lumber: Planing Mills________________________________ _ 21 620 1.1 -3.1 11,326 7.5 -5.4 18.27 19.53 18.05 Lumber: Saw Mills_______________________ __________ _ 9 1,137 -16.2 -13.5 17,187 4.3 -5.4 15.12 13.24 14.74 Paper Products______________________________________ _ 6 276 + 3.8 + 7.8 5,999 + 5.8 + 19.4 21.74 21.31 18.88 Printing and Publishing Commercial Printing__________________________________ 36 565 8.0 + 3.8 14,655 -10.3 + 11.8 25.94 26.62 23.92 Newspaper Publishing_______________________________ _ ~ 16 847 5.5 + 6.4 28,222 -10.1 + 7.7 33.32 35.05 34.41 Chemical and Allied Products Cottonseed Oil Products_______________________________ __ _ 29 1,360 3.7 + 13.9 20,290 7.4 + 39.3 14.92 15.52 13.55Petroleum Refining______________________________________ _ 33 17,705 + 3.9 + 3.0 560,740 + 1.4 + 20.9 31.67 32.44 28.26 Stone and Clar Products Brick and Tile________________________________________ 13 414 -11.9 -32.2 4,194 -17.3 -23.0 10.13 10.79 92:7 Cement_________________________________________________ 8 1,102 -17.7 -26.8 22,732 -21.1 -12.4 20.63 21.50 17.99 Iron and Steel Products Foundries, Machine Shops___________________________ 30 2,281 -2.5 + 8.8 58,138 -2.8 + 25.8 25.49 25.57 22.52 Steam Railroad Repair Shops_______________________ _ 17 2,458 -13.1 -11.5 69,184 -13.7 3.2 28.15 28.34 25.16 Structural and Ornamental Iron__________________________ _ 13 746 4.1 + 0.9 14,643 7.9 -5.6 19.63 20.44 24.52 Unclassified Miscellaneous Manufacturing ·--··-·-------------·-----211 6,900 2.1 + 16.6 132,999 3.3 + 18.7 19.28 19.51 20.29 Nonmanufacturing Industries Crude Petroleum ProductionL ---------·-·---·--------4.3 8,157 1.3 + 18.5 293,782 1.4 + 17.1 36.02 36.07 35.07 Quarrying and Nonmetallic Mining____ ___________ _ 29 1,613 1.5 + 8.2 36,735 0.1 + 8.4 22.77 22.44 23.63 Public Utilities_____________________________________ 893 19,300 1.6 + 4.1 497,828 3.5 + 15.4 25.79 26.30 26.89 Retail Trade_____________________________________________ 500 12,217 -18.8 + lo.4 243,063 -18.3 + 0.8 19.90 19.77 19.25 Wholesale Trade_____________________________________ 224 4,177 -4.3 + 11.4 103,984 -7.1 + 10.6 24.89 25.64 25.47 Cotton Compresses -----·--------·--·-----------------16 1,557 -16.6 + 14.5 25,414 -13.3 + 36.8 16.32 15.69 16.46 Dyeing and Cleaning________________________________ _ 13 277 3.1 + 5.7 5,566 + 0.7 + 17.0 20.09 19.33 16.18 Hotels:j: ---------------------------------------25 1,787 0.1 + 7.4 21,172 1.5 + 16.3 11.85 12.03 10.95 Laundries_______________________________________________ 22 1,396 0.2 + 1.8 16,938 2.4 + 0.4 12.13 12.41 12.63 Miscellaneous Nonmanufacturing ____ -·-·----__ 61 817 6.4 -13.9 19,022 6.5 -8.1 23.28 23.31 23.75 STATE____________________________________________________ 2,460 97,947 4.9 + 6.7 $2,412,014 5.1 + 14.0 $24.63 $24.68 $22.96 Cities Abilene-------------·---------------------­ Amarillo________________________________________ Austin----·------------------------------···---- BeaumonL_____________________________ Dallas_________________________________ El Paso______________________________ Fort Worth_________________________________ Galveston____________________ _____ Houston______________ ____________ Port Arthur____________________________ San Antonio__ ____________________ Sherma1i______________________________ Waco_____________________ _______ _ Wichita Falls_________ _______________ 18 46 26 37 221 83 92 19 219 13 158 16 57 30 266 1,103 634 3,170 15,195 2,768 5,695 675 14,470 7,040 5,058 655 1,642 846 6.0 5.2 3.1 + 2.7 9.9 4.2 4.5 -11.5 + 1.7 -6.3 -14.l 4.7 -6.6 -7.1 6.7 + 9.9 + 8.2 + 3.4 + 5.5 + 12.2 + 9.1 + 0.4 + 1.9 +33.3 2.2 2.2 5.8 1.5 $ 5,809 28,173 10,890 81,185 364,298 53,816 138,209 15,295 344,279 216,214 110,665 10,504 28,391 20,097 5.1 5.9 3.8 4.8 -11.4 6.4 6.3 7.7 + 1.4 6.6 7.3 2.0 4.9 0.2 + 6.0 + 21.6 + 15.2 -0.4 + 9.8 + 13.3 + 3.5 + 16.6 + 13.9 + 8.0 + 8.7 -13.9 -0.3 + 65.8 •Not strictly comparable from month to month because of changes in the size and composition of the reporting sample. tCrude petroleum and natural gas production, including natural gasoline. ?Cash payments only; the additional value of board, room and tips cannot be computed. Prepared from reports from Texas industrial establishments to the Bureau of Business Research, coOperating with the United States Bureau of Labor Statiaticl. Business Review and Prospect Industry and trade during January in the country at large had receded to the level of January, 1934, accord­ing to Barron's business index. There was a further slight recession of the index during the first three weeks of February, but there are indications that the bottom has about been reached, and a gradual upward tendency is expected to develop within the next six weeks. There is a growing conviction that business recovery in this country will be considerably slower than was thought likely during the early stages of the sharp de­cline last fall. Among the reasons for the more pesi­mistic view of the outlook is the low ebo of industrial activity in this country which already has seriously af­fected business abroad, and the slowness with which industrial and political leaders in this country are reach­ing agreement as to future policy makes further business recession abroad almost inevitable. The increase of unemployment in Great Britain since last September is reported to be the greatest for any similar period, even in the worst depression years since 1929, and this has occurred in the face of great arma­ ment and building proi.>;rams involving huge public ex­ penditures. British critics are inclined to trace their industrial setback to the business decline in this country and fear that if the business recession here should he prolonged, it would endanger the consummation of the Anglo-American trade agreement. The significance of normal business conditions in the United States to world trade is forcefully stated in the London Sphere in these words: "The United States contains 6 per cent of the world's area and 7 per cent of its population. It normally con­ sumes 48 per cent of the world's coffee, 53 per cent of its tin, 50 per cent of its rubber, 21 per cent of its sugar, 72 per cent of its silk, 36 per cent of its coal, 42 per cent of its pig iron, and 69 per cent of its crude petroleum. "The United States operates 60 per cent of the world's telephone and telegraph facilities, owns 80 per cent of the motor cars in use ... produces 70 per cent of the oil, etc. "The United States possesses .. . nearly half of the world's monetary metal. ... The purchasing power is greater than that of the more than a billion Asiatics." It will he noted that a number of the products of which this country is a major consumer-rubber, coffee, silk, and tin-are produced in foreign lands because they cannot economically be produced here. Thus, seri­ ous industrial depression here is promptly reflected in a reduction of our purchases from abroad which in turn retards activity there. Many other ways exist, in addi­ tion to the reduction of commodity purchases abroad, in which a sharp slowing down of the tempo of industry and trade in this country adversely affects business abroad. Since we must lo"ok to foreign countries for a market for many of our products, a decline in purchas­ ing power in these countries as a result of increasing unemployment, a sharp derline in raw material prices and the like soon reduces their purchases from this country. Thus the downward spiral of activity in a wid­ening circle gains momentum and becomes more and more difficult to stop and to reverse. It is to be hoped that the critical nature of the present situation is fully realized by the American public and, that as a conse­quence, even more constructive steps than those already adopted for clarifying the longer-term economic outlook will soon be taken by the industrial and public leaders of the Nation. TEXAS B USINESS Texas business receded moderately from December to January. The composite index for January is 96.48; for the month before, 97.78; and for a year ago, 92.94. Three factors in the adjusted composite index de­clined from December to January--employment, pay rolls, and miscellaneous freight car loadings-while the other three increased--runs of crude oil to stills, de­partment store sales, and electric power consumption. In the preparation of the composite index 70 per cent of the weight is given to employment, pay rolls, and miscellaneous freight car loadings-the items which in January made the relatively unfavorable showing. Of the three factors which made the favorable comparisons, the one which made the greatest gain-runs of crude oil to stills-is only given 5 per cent of the weight. It thus appears that the composite index should fully reflect the adverse factors in the Texas business situation. Com­pared with the Nation as a whole, the business recession in Teaxs to date has, therefore, been quite mild. FARM CASH INCOME The computed farm cash income of Texas during January was $21,500.000 compared with $19,750,000 during the corresponding month last year-an increase of 9 per cent. The index of farm cash income for Jan­uary based upon the average monthly income for the five-year period, 1928-32, adjusted for seasonal varia­tion is 97.8 For December the index is 113.2 and for January last year 90.4. The following table gives the indexes for the State and for each of the crop reporting districts. l'.'IDEX OF AGRICULTURAL CASH INCOME Jan. Jan. Dec. District 1938 1937 1937 1-N ··-·-····-····----····-··-·····---­99.4% 95.9% 122.7% 1-S ···-·····. ...... ...... ________144.4 103.6 171.8 2 .. -...... ····· -······ ···-··-­ . ---73.2 37.2 59.7 3 ....... --·-···-···· ····-···-­______123.9 110.2 107.0 4 ... -·· ----··· ... -·· .. ... -···-·· 67.1 72.4 86.6 5 .... ·-· .. ····-····-... ·--······ -­ 67.6 74.0 72.9 6 ... -···­... .. -···­ -.. ..158.6 117.8 123.2 7 .. ··---­ . .... . .105.1 107.3 86.8 8 .. - ... --.. .. -·-··· ... ... 95.9 109.7 79.5 9 . ...... 167.2 291.3 107.8 10 191.6 203.5 265.9 10-A • .... .. --···----------... 214.9 214.4 338.7 STATE ... ···--····----·-········ 97.8 90.4 113.2 *Included in Di!trict 10. For Other Texas Data, See Statistical Tables at the End of This Publication Crop reporting districts in which the index of farm cash income is the most favorable are the South High Plains (district 1-S) ; North Central Texas (district 3) ; Trans-Pecos (district 6); Coastal Prairies (district 9): and South Texas (district 10). The South Plains dis­trict continued to benefit during January from the un­usually large cotton crop while the increased incomes from districts 3 and 6 were derived from live stock. In district 9 the income from rice was substantial although not so large as in January last year, while in the Lower Rio Grande Valley the income from citrus and vegetables was practically on the same high level which prevailed a year ago. F. A. BUECHEL. Financial Four significant developments of the past month de· serve some comment: the partial reversal of the Treas­ury's "inactive gold policy," the announced decision of the Board of Governors of the Federal Reserve System to "stabilize" government bond prices, the new rules governing short ~elling promulgated by the Securities Exchange Commission, and the probablr drastic admin­istrative reorganization of the New York Stock Exchange. It will he recalled that the Treasury i11augurated it8 "inactive gold policy" some fourteen months ago with the object of sterilizing gold imports and preventing a further broadening of the credit base from inflows of the yellow metal. Especially was it desired that gold im­ports should not continue to add to the already top· heavy excess reserve balances of the member banks. The policy, therefore, was deflationary in its general effect and quite consistent with the subsequently ordered in­crease in member bank legal reserve requirements. In brief, the policy required the Treasury to pur­chase incoming gold with funds newly borrowed from the money market. Thus the Treasury extracted from the market through sales of its notes as much credit as was added to the market through its purchases of gold, leaving the aggregate supply of money market funds unchanged. Further, since the Treasury did not sell the gold thus purchased to the Federal Reserve Banks, the metal was not added to the credit base of the central banks on which subsequent secondary credit might he based. The net effect, of course, was that the Treasurv was borrowing funds with which to carry an enormou.s stock of idle gold, a procedure involving heavy interest expense. Since the inception of this gold policy, the Treasury has acquired approximately $1,500,000,000 of gold, of which $300,000,000 was sold to the Reserve Banks last fall in an effort to check the decline in general business activity through furthering the easy money program. At present, therefore, the inactive gold account is at a level somewhat in excess of $1,200,000,000. Under the revised gold policy recently annouJH;ed by Mr. Morgenthau, the Treasury will sell to the Reserve Banks each quarter up to $100,000,000 of incoming gold, all excess imports being sterilized as outlined above. The policy is to be retroactive to the first of the year. Thm;, during ] 938, it is possible that as much as M00,000,000 of imported gold may be added to the banking credit base. Tliis would render possible a further primary credit expansion of some $2,000,000.000 (not $1,000,000,000 as reported by the press) , and at the same time relieve the Treasury of the interest burden incidental to carrying $1.00,000,000 of new gold. In view of the huge amount of member bank excess reserve balances, estimated at $1,110,000,000 on February 9, together with the current slackening in demand for com­mercial lrnnk credit, it is unlikely that this reversal of policy will have any effect on short term money rates except to lessen the rather remote possibility of any tightening of the money market in the near future. Late in January it was learned (The Wall Street Journal, January 25, 1938) that the Treasury and the Federal Reserve System had adopted a policy of attempt· ing deliberately to stabilize the prices of government bonds through the use of open market operations and the numerous Treasury "investment accounts." It is un­derstood that the Reserve Banks will shift their open market holdings of governments from long to short term maturities during periods of rising bond prices and re· verse the operation during declining bond markets. Sim­ilarly, the Treasury will at the same times sell and buy bonds through its various investment accounts. Thus, during the two weeks ending January 19 when the bond market was rising, the Reserve Banks sold $23,400,000 of bonds and bought an equal amount of short term Treasury paper; and on January 8, the Treasury sold $10,000,000 government bonds from the postal savings account. This policy, of course, amounts to a deliberate effort to "peg" artificially government bond prices, a type of security price manipulation which the Administration heartily condemns when practiced by private individuals. It involves a frank admission that the central bank dis· count and open market policies will be shaped in the future with the facilitation of Treasury deficit financing as a primary objective, a radical departure from sound central banking policy. The plain implication obviously is that the Federal Reserve System will attempt to guar· anlee indefinitely the maintenance of the present high level of government bond prices, an objective which as· ~u rcdl y it can achieve. Ou January 2·1, the Securities Exchange Commission announced a sel of trading regulations with respect to short !-lales Lo become effective on all registered ex· d1anges February 8. This is the first instance in which the Commission itself has ordered into effect a trading n~gulation. Hitherto, the Conunission has formulated regulation~ which it believed to be desirable and then rceommendcd these trading rules to the security ex· changes for voluntary adoption. The general sense of the new regulations is to forbid any short sale in full lots on a national security exchange except at a price higher than the last preceding regu.lar transaction in that stock. Since June, 1935, the New York Stock Exchange has had in effect a similar rule forbidding short sales in a stock at a price below the last preceding transaction in that stock. This latter limitation the Commission evidently believes to be in· effective in preventing short selling in a declining mar­ket such as that which obtained last September and October. Incidentally, in connection with the bear market last fall the Commission is seriously consider· ing the prosecution of certain members of the New York Stock Exchange on the ground that their short selling activities were excessive and inimical to the maintPnance of an orderly market. With respect to regulations discouringing short sales of stock, many economists believe that the resulting ad· vantages are more apparent than real. Some pressure is removed from the market at times of weakness it is true. On the other hand, the market loses proportion­ately in liquidity and continuity and sacrifices the cush· ioning effect of short sales during hull markets and of short covering during bear markets. Following the recommendations of the Serurities Ex· rhange Commission made some months ago. a special committee of the New York Stock Exchange made public on January 27 a report favoring a sweeping administra· tive reorganization of the Exchange. This report, which is expected to be approved by the exchange membership in the near future, provides among other things for full time salaried officers of the Exchange, a reduction in the size of the governing committee, and the elimination of many of the present standing committees. The general effect of the changes, if approved, apparently will be to transfer control of the Stock Exchange from members who trade for their own accounts to members acting primarily as brokers for the outside public. J.C. DOLLEY. The Oil Industry and Texas THE STAKF: JN On. In the more than a third of a century which has elapsed since the historic discovery of Spindletop, Texas has had good reason to become oil-minded. The growth of oil­mindedness in Texas, however, appears to ha\'e het>n brought about mainly by the very extensive and exceed­ingly strong impacts of the oil industry upon the eco­nomic structure of the State. There has been no conscious effort to portray in any broad inquiry either the reactions of this impact upon the economic structure of the State or the reactions of the Texas oil industry upon the economic structure of the nation. lnterrelationshi ps and interdependence from either the standpoint of regions or of industries have been, and still are, mostly taken for granted-if they are given any consideration at all. This is not the place to analyze the reasons for the occurrence of these rather broad and highly significant gaps in attempted or alleged analyses of subjects, w~ich obviously are so basic to the operation of s_o many h?es of economic endeavor both in Texas and m the nation at large. So important, however,. ar~ these gaps in the mode of operation of our economic life that they cannot be passed by; they are noted here, mainly as cha!lenges to broad-gauged leadership in Tcxas-~hether this lca~er· ship be industrial, educational, vocat10nal, or ?therw1~e. One thing, however, seems assured: that superficial studies and simple analyses premised mostly upon exchange economy have proven to be so ~adly lackmg as to have hut little positive value in l!ettmg at the fu~damentals of the broader and more significant problems 111volved: That practically everything in Texas has been dunng the past quarter of a century greatly influenced by the oil industry, there can he no doubt. Oil has rath~r thoroughly revolutionized most phases of the economic life of the State. Such features as the growth and ex­tension of highways, urban growth, the increase in buy­ing power of Texas and of the rest of the Southwest, the growth of various industries, have all been closely asso­ciated with the rise of the Texas oil industry. Un­doubtedly, too, the economic life of Texas during the next quarter of a century will be closely associated with the oil and gas industries of the State. Unquestionably, the oil industry has contributed in a significant degree to the schools of Texas-school funds, endowments, build­ings, and a market particularly for graduates of the in· stitutions of higher learning, not only of Texas hut also from adjacent states and even from universities of the Northeastern States. If The University of Texas fulfills its possibilities of being the one greater university in the Southwest or its potentialities of becoming the one outstanding school within the Cotton Belt, and at the same time the leading institution of learning in that vast area extending from the Mississippi River to California­if these things come to be, it will he primarily because of Texas oil. Every citizen in Texas has a stake in Texas oil; the life of every citizen in Texas during the coming quarter of a century will be vitally concerned with the oil industry of the State. Moreover, due to the position Texas has attained in the oil indm:•try of the nation, every citizen of Texas has al stake a vital interest in what the oil industry is, and upon what it is based. !h~ oil i~dustry as the most important item in the States mdustnes and as the hi(Tgest businrss enterprise in the State merits a f!rt~at ss than the total amount produced in these states to date. To sum up-Texas reserYes are thus placed at 2.7 times those of California and nearly seven times those of Oklahoma. These attempts to get at reserves have to be considered with care; but there are no reasonable doubts but that the proportions to the various states mav be considered as generally dependable. And, it .is po;sible that further exploration will open up still laraer reserves in Texas; it is also very probable that 0 the percentage of reserves in Texas in relation to na· tional reserves will increase for some time in the imme­diate future. Thus, so far as the relation of proven reserves to the total output to date is concerned, both California and Oklahoma have produced more oil than they have left in reserve; but, it is to be emphasized, reserves in Texas, on the other hand, are much greater in volume than the amount thus far produced. . In connection with the vast reserves of oil in Texas, it may not be amiss to note some of the cautions empha~~ by the Secretary of the Interior, in an address on 011 and the World We Live In." The Secretary stated among other things: "The more studious technicians of the industry have watched the drill penetrate ever deeper until formations more than two miles below the earth's surface have been tapped for oil. They have noted the bringing of nelf territory into production and the acceleration of dis­covery through the development and use of more efficient methods. Although not prone to be doubtful of con­tinued success in finding new fields, they realize that the extent to which new production may be found is limited and that the discovery of each new zone or area of pro· duction subtracts one from those which may be discov­ered at a later date. "The present disparity in oil resources between our country and the rest of the wor Id can be corrected to some extent. American research, engineering and man­agement can make certain that our remaining oil reserves will be developed more efficiently and with a higher re­covery factor than is common in other oil-producing countries. Supplementing this, serious consideration can be given to the quantity and character of foreign oils which might be permitted to augment our domestic sup­ply without affecting adversely our own oil indu~try. "The States and the oil industry have to their credit many accomplishments which fit the pattern of this con­ servation policy. Outstanding among these is the con­ trol of production in the East Texas field, which makes possible an ultimate recovery of oil from that prolific source materially greater than could be achieved by the methods employed less than a decade ago. Equally note­ worthy is the manner in which the former wastage of billions of cubic feet of natural gas in the Texas Pan­ handle has been virtually eliminated. There are many other instances, equally worthwhile but less spectacular. "This record is worthy of praise but there is another one of which little is said publicly which indicates that many things which would have been helpful have re­ mained undone or, if done, could have been done better or sooner. I need not call the roll of these. Those of you who have seen excessive flares burning in oil fields, have watched subsurface pressures drop sharply so that energy has been dissipated without doing useful work, who know of fictitious well-potentials, or are familiar with the practice of crediting to dead-wells oil produced in other wells in order to establish an apparent con­ formance with State orders, are aware of some of the items in this record." There remains one other important point to be noted in this connection: The total reserves for the whole Southwest-Texas, Oklahoma, Louisiana, Kansas, New Mexico, and Arkansas-are placed at 11.5 billion bar­ rels, or nearly three-fourths of the national reserves. Texas with somewhat more than half the reserves of the nation is obviously the major item in the Southwest; but Texas and the other Southwestern States with nearly 75 per cent of the proven reserves of the country­ with reserves that are more than half the total output of the United States to date-easily take the dominant position in furnishing the supplies for the nation's oil industry. Supplying as it does some 40 per cent of the nation's oil output and refining nearly a third of the nation's crude oil, it is no wonder that the oil industry in Texas is the major item in the State's busi­ ness. Moreover, the oil industry in Texas is one of the biggest industries of the nation; furthermore, with its vast production, its huge proven reserves, and with large areas yet to be explored by deeper drilling, the oil indus­try of Texas will undoubtedly expand throughout all of its various phases. And, in the near future this ex­pansion of the oil industry in Texas bids fair to outrun not only the oil industry of other states, but also most other industries for the nation as a whole. Is it any wonder that the spotlight of the nation's oil industry 1s directly centered upon Texas? GEOGRAPHIC ASPECTS OF OIL REFINING During 1937 crude oil receipts and consumption at refineries amount to 1,183,444,000 barrels, according to the Federal Bureau of Mines. Of this total Texas re­fineries accounted for more than 30 per cent; Texas and the other southwestern states accounted for 46 per cent. California had 17 per cent of the total. These figures demonstrate in unmistakable terms the fact that in the United States oil refining is oriented primarily by the raw materials factor. More detailed studies show that the secondary factor concerned in this orientation is asso­ciated with the transportation factor. Refineries oriented primarily by the market factor are those of the Eastern Seaboard and the Mid-West, each of which in 1937 had 14 per cent of crude oil receipts and consumption. The economic pull of these various factors is still further shown in the changes in refinery operations dur­ing the period from 1932 to 1937, inclusive. The sig­nificant changes during this period occurred in the re­finery operations on the Texas Gulf Coast where a very marked increase occurred. There was in this period a marked relative decrease of refinery operations in the Eastern Seaboard and in California, whereas refineries in the interior of the country as a whole just about held their own. Current operations in expansion of refining plant activity are particularly marked in the Texas Gulf Coast and especially in the district extending from Houston to Port Arthur and in the Corpus Christi area. The esti­mated cost of refining plants completed in 1937, of plants now under construction, or definitely planned for immediate construction, has been placed at $77,000,000. It is estimated that nearly 29 per cent of this total will go to the Texas Gulf Coast and that the rest of Texas will get nearly 8 per cent. The share of the whole South­west is estimated at nearly 50 per cent; that of California nearly 20 per cent; and the Eastern Seaboard, 12.3 per cent. The fact that more than a third of this expansion will belong to Texas reflects from another angle the posi­tion of Texas in the nation's oil industry. In conclusion, the closing words of the Secretary of the Interior in the address previously referred to may be quoted. The Secretary stated: "I have talked principally about the functions of the State and Federal agencies which are concerned with the conservation of our oil resources. These agencies must follow in the technological wake of the oil industry itself. "You cannot expect legislatures to enact adequate laws, regulatory commissions to issue suitable orders, courts to render proper decisions, or the public to support what you are doing unless you agree on the fundamental prin­ciples which govern the efficient production and wise use of oil. In addition to continuous research, there is neetl for a dissemination of knowledge by which the industry will train itself and prepare the way for an adequate understanding among those who regulate its affairs and hy those who consume its products. "Standing firmly upon its own feet and with its prin· ciples clearly established and announced, a program of oil conservation, which is that and nothing else, is cer· tain to win the support of a fair-minded public and its representatives in the halls of legislation. I urge that you proceed promptly to this task, as we cannot await the day of scarcity before correcting methods that cry out for correction. ''The responsibility for the future of oil in our nation rests mainly in the hands of the oil industry. With this responsibility will go crrdit for arcompli!lhment or hlame for nrglect of opportunity." ELMER H. JOHNSON. Selection of a Variety of Cotton* Selection of a variety of cotton to grow is closely tied up with the problem of whether or not to grow cotton at all. Whether a farmer should devote his time, capital, and land to cotton production in whole, in part, or not at all, depends on alternative opportunities; and these are determined by the relative advantages of the regional environment in terms of production and accessibility to markets, and in terms of human characteristics and abilities. These are vital problems in the cotton situa­tion but will be discussed in a later issue, because of the immediate interest in the selection of varieties neces· sary to improve the yield and quality of Texas cotton. The cotton industry of Texas is a tremendous thing and is intimately interwoven with the economic life of the State. During the three calendar years prior to the depression, 1927, '28, and '29, the cash income to farm­ers from the sale of cotton and cottonseed averaged over $467,000,000 per year. During the depression, the farm cash income from these products dropped to a low of $154,000,000; and during the past three calendar years, 1934 through 1936, it has averaged only a little over $192,000,000, not including Government subsidies. What has caused this tremendous loss in income from cotton and cottonseed to Texas farmers? It has been due to three things: (1) decline in price, (2) decline in volume of production, and ( 3) decline in quality of the product. During the three calendar years, 1927, '28, and '29, the farm price of cotton in Texas averaged 17.21 cents, and the price of cottonseed averaged $32.36 per ton. During the last three years the farm price of cotton has averaged only about 11.60 cents, and cottonseed about $30.30 per ton. Prices of both are now much be· low the average of the past three years. The decline in production, except for 1937-38, has been almost as great as the decline in price. During the three cotton years, 1926--27 through 1928--29, Texas farmers produced an average of 5,028,000 bales of cotton per year. During the past three years, not in­cluding 1937-38, production averaged only 2,766,000 bales. During 1928--29 and 1929-30, 66.7 per cent of Texas cotton wa~ middling white or better; and 43.7 per cent 15/ 16 inch or longer. During the three years, 1934-35 through 1936--37, only 56 per cent of Texas cotton has been middling white or better and 37.l per cent 15/ 16 inch or longer. •Thi• i1 the b('g:inning of a seric1 of articles oo the world supply of cotton parlJcularly u it i9 related to Texu aod Texa1' problema. The data given above show that the major reasons for the decline in the cash income from cotton and cotton· seed in Texas since the beginning of the depression in 1929 have been the decline in price and reduced produc· tion and not alone the decline in the quality of Texas cotton, important as that has been. The above figures are given here to avoid raising false hopes in the minds of some in regard to the solution of the cotton problem in Texas. Cotton improvement is tremendously impor· tant but it alone cannot restore cotton income of farm· ers to pre·depression levels. WnAT Is Gooo VARIETY? The first question to be decided in launching a cotton improvement program is to come to a decision as to the characteristics of a desirable variety or strain of cotton. Farmers grow cotton for what money they get from the sale of it and the seed. The best variety of cotton then from the standpoint of farmers is the one that yields the greatest net income. The major factors which determine the profitableness of a variety of cotton are: ( 1) average yield of lint cotton and cottonseed per acre, (2) staple length, grade, and character of the cotton, (3) quick maturity, (4) char· acteristics which facilitate harvesting, such as large bolls and compact fruiting, and (5) storm-proofness. It will be noted that I have not included lint turn·out (lint percentage) as one of the desirable characters of a variety of cotton. I have not done so because it is of minor importance; provided each variety of cotton is made to stand on its own merits. It may be a factor of importance to the cottonseed breeder in building up varieties, but the farmer is interested in yields themselves. The first task in this discussion will be to devise a means of expressing the major factors determining value in terms of a single factor such as yield. Yield per acre of lint and the quality of the lint are the factors of major importance in choosing a variety; but since high yields and best qualities are usually not found in the same variety, the problem is to work out the best value by converting combinations, quality premiums, and discounts into yield equivalents. Average yield of lint and seed per acre are the factors of major importance in determining the farmer's correct choice of the variety of cotton to grow; and lint is more important than seed. Lint yield per acre is more impor· tant than per acre yield of seed, because, during the past ten years, the prices of one pound of lint has been worth about ten pounds of seed. During the past ten years, 1925-26 through 1934.-35, the discount of 13/ 16 inch cotton under middling % in the ten designated markets has averaged 70 points. This means that if the farmers took all of this discount, varieties with a staple length of 13/ 16 should produce about 5.2 per cent more pounds of lint per acre to pro· duce the same dollar value per acre of lint as %·inch cotton, for 70 points is 5.2 per cent of 13.40 cents, the average price of middling %. During the above years the premium in central markets for 15/ 16 over %-inch staple has averaged about 39 points, or 2.9 per cent more than the value of %-inch; so that varieties which pro· duce 15/16-inch can have an average yield of 2.9 per cent less than varieties yielding %-inch and still produce the equivalent value per acre, not including the saving in picking and ginning. Varieties producing inch staple can have an average yield per acre of 6.2 per cent less than %-inch varieties and produce the equivalent money value, because the average premium for inch over %-inch staples is about 83 points. Varieties which produce 11/16 and ll/8 -inch staples can produce 10.7. per cent and 16.2 per cent less pounds per acre, respecl!vely, and still yield the equivalent in dollar values. . . If two varieties of cotton produce the same lme yield per acre, but one has a higher lint percent~ge than the other, the one with the low lint percentage 1s the better variety, other things being equal, because the va~ue_ of the extra seed produced exceeds the extra cost of gmm~g and picking. If one variety, e.g., has 40 per cent hnt and another 33 1/ 3, but produce equal quantities of the staple length and character of lint, the variety with the low lint percentage will yield the greatest number of net dollars per acre. In the case of the varie~y with the 40 per cent lint the farmer would need to pick only L250 pounds of s~ed cotton to get a 500-pound hale. His picking costs at 60 cents per .hu~dred pounds of seed cotton would be $7.50, and gmnmg at $1.25 per hun­ dred of lint would make a total cost of $13.75. There would be approximately 750 pounds of seed, which at the average price of 1.2 cents per lound woul.d be ~orth $9.00, leaving a net cost of $4.7;:,. The vanety with a lint per cent of 33 1/ 3 would require 1,500 pounds of seed cotton to make a 500-pound bale. The picking costs would be $9.00 and ginning $6.25, or a total cost . of $15.25. There will be about 1,000 pounds of seed, which at a price of 1.2 cents per pound equals $12 or a net cost of $3.25. Quick maturity is listed as one of t~e important facto.rs to be considered in selecting a vanety because of its relation to grades of cotton produced. This is especially important in the northern part of the cotton belt where the season is short. Stained and badly spotted cotton due to frost carries heavy price discounts. The discounts during 1927-28 through 1936-37 for low m.iddling. as compared with middling has average 108.5 pomts, which equals 8 per cent of the price of middling during that time. · h f b ll · Size of boll, which really mean~ we1g t o o 1~ te:ms of seed cotton, is a factor afiectmg the cost of p1ckmg, primarily, and is often over-emphasized. because the na­ture of the burr and position of bolls on the plant are also important considerations in this respect. . . Storm-proofness is a factor affecting grade pnmanly. Its relative importance will depend on whether th~ farmer lives in an area subject to high winds :rnd ramstor~s about the time cotton opens. There are no figure" arnd­able which show the causal relations hrtween lack of storm-proofness and the number of low grades. REGIO;\".\L E"IVIRO;\"~!E;\"T Within temperature limits the cotton plant has, to a high degree, the ability to adapt itself to many combina­tions of environmental conditions: but this does not mean to say that environmental conditions are of secondary importance, for they influence tremendously the amount and quality of cotton produced. It is true also that these environmental conditions expressed in terms of natural regions have indicated in a general \\:a)> throug~ t_he process of trial and error, the charactenst1cs of vaneties of cotton most suited to each region. Within the climatic zones the environmental factors of most importance are the kind, nature, depth, and water­holding capacity of the soil, which when coupled with rainfall and humidity determine the natural capacity for cotton production. · Climate, including the length of growing season, atmospheric conditions, and tempera­tures, not only sets the northern limits of cotton produc­tion, but, because of important link relatives in cotton, it indicates largely the varietal characteristics of cotton best adapted to each region. The fact is then, that it is the complex of combination of the regional environmental factors, including the various combinations of climatic factors, soil types and conditiom, length of growing season, rainfall, altitude, and nature of the terrain, which determine the character­istics of varieties best adapted to each region, rather than a single factor such as soil or climate alone. The importance of regional environment in the selec­tion of a variety of cotton to grow is shown by its effects on yield per acre, staple length, and grade of cotton. At Lubbock, for example, short ~taple varieties are the most profitable cottons to grow because of their higher average yields per acre. Half.and-half is the highest yielder there; but at Temple, in a very different environment, it ranks seventeenth out of twenty-one in yield per acre in a seven-year test, and ranks lowest in terms of value per acre. Rogers Acala with a staple of 1 l / 32·inch ranks second in yield at Temple in an eight-year test, but is twenty-fourth at Chillicothe. Rogers Acala has a staple length of 1 3/ 32-inch at Angleton, 1 1/ 16 at Greenville, l inch at Denton, 3_1 1~2 inch at Spur, and 15/ 16 inch at Lubbock. Other vanet1es also show wide fluctuations in staple lengths produrrd under different regional environment:-. Cnfortunately, the experiment station data do not give figures which permit comparis.ons of gr~des produced b_y a variety under different reg10nal ennronment;-. It 1s certain, however, that slow maturing varieties result in lower grades in regions with short growing seasons. If what has been said relative to the causal relation between regional environment and the varieties or strains of cotton best adapted to them is correct, the selection of varieties of cotton to be planted in each region really becomes a matter to be determined by a scientific analysis of regional environment on the one hand and a care­fully planned program of experimental testing of varie­ties in the major regional environments on the other. The first step then in launching a scientific cotton im­provement program for Texas is to come to a correct appreciation of the major natural environmental com­binations in Texas, as expressed in terms of natural regions, and to an understanding of the relations of different varieties of cotton to these regions because of varietal characteristics and link relatives. The major link relatives are: extreme earliness and small bolls, high lint per cent and short staple, high lint per cent and small seed, extreme earliness and short lint, long lint and small bolls, and log lint and late maturity. It is true also that there are causal relations between deep rich soil and large yield and long lint, and between poor, drouthy soil and short lint and low yields. The second step in a cotton improvement program is to make the most scientific analysis of experiment sta­tion and other data to determine the rnrieties best adapted to each individual region. The experiment stations may not always be most advantageously located for the pur­pose in hand, but they have the most scientific data avail­able on the behavior of different varieties of cotton in the different regions of the State. The wise thing then in selecting varieties for different regions is to use their records of performance of varieties in the calculations. The records of Angleton, Beaumont, and Beeville sta­tions give unmistakable proof that varieties which pro­duce inch to 1 1/ 16-inch staple produce more pounds of lint per acre and, therefore, very much greater value than shorter stapled varieties on the alluvial land and the black coastal prairies in South Texas and in the Corpus Christi area. The experiment stations at Temple and Greenville are on good black land. Their records indicate that rnrieties producing 15/ 16-inch to 1 1/ 32-inch staple, yield the most lint per acre and the greatest net value per acre in the black and other good lands in central and north central Texas. Records of the Spur station indicate that varieties producing 15/ 16 are the most profitable in that region on the good lands. The records of the Lubbock station show that varieties producing ~'8-inch staple are the best moneymakers on the high plains. Facts presented so far show that the determination of the relative merits of varieties of cotton to be produced in different regions had better be left to experiment sta­tions. The farmers' choice of a variety for a given regional environment is then logically narrowed down to the choice as between two or more varieties, which the records show are about equally profitable. 0NE-VARIETY·COMMUNITY PRODUCTION Much has been said about the merits of one-variety­community production, and it will suffice to list only the major advantages here. (1) It tends to preserve and increase a uniform seed supply. (2) It tends to preserve a high quality of lint if the variety selected has .high quality. (3) It tends to promote better ginning. (4) It prevents "plating" of bales so far as staple length jg concerned. ( 5) It facilitates marketing in that a com. munity may become known for a particular quality, and it makes easier the formation of "even-running lots" of cotton. ( 6) It enables farmers to become cotton quality conscious and to learn values in terms of varieties. (7) It lowers the cost of maintaining a good seed supply. The above advantages may be changed somewhat if later experimental data should show that hybridization increases yields without destroying quality in properly selected varieties. HINDRANCES TO COTTON IMPROVEMENT 1. Inadequate premiums paid for superior grades and staples in many local markets and inadequate discounts for poor quality, especially on staple length. 2. Too many highly advertised varieties of cotton which have no better qualities of lint and per acre yield records than gin-run seed. 3. A large per cent of the gins ln Texas charge for ginning on the basis of pounds of seed cotton delivered rather than on the pounds of lint. This practice gives the advantage to varieties of high lint percentage, which on the average are the shorter staples. 4. Lack of an adequate seed supply of the better varieties at prices attractive lo the average farmer. A. B. Cox. COTTON BALANCE SHEET Indicated supplies of cotton in the United States on February 1, 1938, were 16,373,000 bales compared with 10,593,000 bales, February 1, 1937, and a previous all· time high of 15,749,000 bales, February, 1932. Stocks of American cotton in European ports and afloat to Europe this February compared with last year have increased 532,000 bales from 1,140,000 bales. The total increase of supplies in the United States, and of American in European ports and afloat to Europe, from February 1 last year was 6,312,000 bales. This is by far the greatest increase during any year on record. Price calculations based on the above changes in supply, the changes in index prices, and the spinners margin indicate a New Orleans spot price of between nine and ten cents. SPINNERS MARGIN Spinners ratio margin on 32's twist yarn in Manchester to middling % inch American cotton in Liverpool aver· aged 223 during January, compared with 233 during December and 181, January, 1937. The pence margin during January averaged 6.07d compared with 6.40d in December and 5.62d in January, 1937. Current Manufacturing Developments in Texas Increases in manufacturing in Texas during January, 1938, are represented by the expansion of several plants already established and the reopening of others which have been temporarily closd, as well as by the location in the State of certain new factories. Included in these groups are the Devine Creamery and Cheese Factory at Devine, and the Del Mar Cannery at Odem, recently rebuilt and enlarged. A report from the Denison Cotton Mill Company, Denison, states that this will has been reopened. The mill manufactures duck and other heavy textile materials which have a nation­wide distribution. It is operating on full time and em­ploys an average of 225 workers. The State Department of Agriculture lists 38 canning plants operating in the Rio Grande Valley this season. Included in the list are 14 new plants which have begun operation during the present season. One of the most recent additions is the L. Maxey Texas Corporation plant equipped to produce 5,000 cases of grapefruit juice daily. The amount paid to produceri5 by 21 canning plants in the Rio Grande Valley for citrus fruits and vegetables during the month of January, 1938, totaled $255,000, according to reports received from these factories by the Bureau of Business Research. Of this amount, $231,000 represents the total spent for citrus fruits. While approximately 25 per cent of the total crop of grapefruit was used in canning plants last year, the recent rulings curtailing shipment of fresh fruit from the Valley are expected to result in more than a normal increase in the percentage of the citrus fruit crop used in canning plants this season. Citrus products are also being used in the manufac­ture of wine, and the charter granted the Lindsay-Brania Citrus Winery at Mission makes a total of 20 wineries chartered in the State at present. Other new manufactures which have begun operation since the first of the year includes three new woodwork­ing establishments, which use both domestic and imported products. A new distributor recently located in Houston is importing mahogany and other tropical woods for cabinetmaking and the manufacture of furniture in Texas. Among the new plants manufacturing metal products are the Rogers Galvanizing Company of Houston, Oceanic Engineering Works of Houston, and the J. H. Hubbard and Son Company of Dallas. Factories under construction in the State together with a total of 26 charters granted for the building of manu­facturing industries during the month of January, 1938, indicate that a considerable increase in the number of plants operating will be shown within the next few months. In the group of manufacturers receiving charters in January to locate plants in Texas, seven are listed as out­of-State corpoartions and include the following: Dolly Dimple Laboratories, Atlanta, Georgia; Kerotest Manu­facturing Company, Pittsburgh, Pennsylvania; Reda Pump Company, Bartlesville, Oklahoma; The Cowles Detergent Company, Cleveland, Ohio; Louis Coppedge, Inc., Delaware; Timken Roller Bearing Company, Can­ton, Ohio; and Ferodo and Asbestos, Inc., New Bruns­wick, N.J. An analysis of Texas charters for the month of Jan­uary is shown on page -of the TEXAS BUSINESS REVIEW. CLARA H. LEWIS. CORRECTIONS In the January issue of the REVIEW an error was made in the building permits table, page 14. The first column of figures should have the caption, December, 1937, and the second column, December, 1936. Our attention has been called to some omissions on the chart, page 10, in the December issue of the REVIEW. The following companies were specifically mentioned as having been omitted: The Cudahy Packing Company (cheese factory) in Mercedes; Golden Jersey Creamery · (evaporated skim milk) in Edinburg; Tyler Milk Prod­ucts Company (concentrated milk) in Tyler; Lubbock Cheese Factory and Lubbock Condensed Buttermilk Plant in Lubbock; and Plainview Cheese Factory in Plainview. In this connection it should be stated that additional changes in the list of dairy manufacturing concerns in Texas are in process, and the revised list will appear in a publication soon to be issued on the dairy manufactur­ing industry in Texas, also in the directory of all Texas manufacturers. COTTON BALANCE SHEET FOR THE UNITED STATES AS OF FEBRUARY 1 (In Thousands of Running Bales Except as Noted) 192&--1929_______________________________________ 1929-1930________ _____________________________ 1930-1931______________________________________________ 1931-1932______________________________________________ 1932-1933_______ ___________________________________ 1933-1934 ----------------·----------------------·-­ 1934-1935_____________________________________ _ 7,7461935-1936____________________________________ 7,138 1936-1937 --·----------------------------------------5,397 1937-1938_________________________ 4,498 The cotton year hea:in1 Aup1t I. tin SOO-pound bale1. lln Non: The &.ruree ha•e been ro.i.ted iu accordance with the Government Carryover Imports Estimate ae Consumption Export• Balance Au1. l 2,536 2,313 4,530 6,369 9,682 8,176 to Feb. l~ of Dec. 1§ Total to Feb. I§ to Feb. 1§ Total Feb. l 206 14,373 17,115 3,448 5,577 9,025 8,090 192 14,919 17,424 3,314 4,891 8,205 9,219 30 14,243 18,803 2,460 4,479 6,945 11,864 47 16,918 23,334 2,626 4,957 7,583 15,751 59 12,727 22,468 2,812 5,040 7,852 14,616 68 13,177 21,421 2,923 4,919 7,842 13,579 56 9,731 17,533 2,685 2,865 5,550 11,983 56 10,734 17,928 3,014 4,004 7,018 10,910 72 12,407 17,876 3,435 3,848 7,283 10,593 46 18,746 23,290 3,085 3,832 6,917_ 16,373 runnin1 I.alee, countinc round balee H half bale1. redli.001 made by the United Statee Bureau of the Cen1U1. TEXAS CHARTERS COMMODITY PRICES Jan. Jan. Dec. Jan. Jan. Dec. 1938 1937 1937 1938 1937 19371 Domestic Corporations- WHOLESALE PRICES: U.S. Bureau of Labor Capitalizationl ---·-·---·--····-·····-·-----·--···-$2.,266 $2,010 $2,805 Statistics (1926 = 100) __ -· --·-· 80.9 85.9 81.7 umber ·-·-····-·----····------·-·--···-···--···-· 139 133 98 The Annalist (1926 = 100) ___ -. 84.2 91.9 85.fi Classification of new corporoations: FARM PRICES: Banking-Finance ····-··--·----·--·-··-·····--···--5 5 2 U. S. Department of Agricul-Manufacturing ----··------·--·----·------·---···· 19 28 20 ture (1910-14 =100) _____ ·---·--·· 102.0· 131.0 104.0 Merchandising ·---------------···--------··--42 29 29 U. S. Bureau of Labor Oil ·--------·--·-·---··-------·--··---···----· 41 31 18 Statistics (1926 =100 ) ____ -·-----71.6 91.3 72.8 Public Service ---····-----··-----·-·-­Real Estate-Building ·--------·----·--·-·--IO IO 5 RETAIL PruCES: Transportation -··-····---··-·-·-·----------2 4 3 Food (U. S. Burea u of Labor Statistics, 1923-25 =100) -----_ 80.3* 84.6 82.6 All Others -·-------------------·-------·--20 26 21 Department Stores (Fairchild's Number capitalized at less than $5,000__ 47 ~ 30 Publications, Jan. 1931 = 100) 92.4 93.0 93.2 Number capitalized at $100,000 or more 6 3 6 Foreign Corporations (Number )________ ______ 38 42 29 •PrC'limi nary. t Revised . llln thouNnda. Non: CompiJed from record1 of the Secretary of State. JANUARY RETAIL SALES OF INDEPENDENT STORES IN TEXAS Number of Percentace Cbao1e Firms ia Dollar Salee Re-from from por tinc Dollar Sales Ian. 1937 Dec. 1937 1,345 14,146,262 + 1.9 -37.9 TEXAS_···-·-----····---------------------·---···--·--·····-·-··-······------···-----·-·-------···--·--·------·····----·-···­STORE.S GROUPED BY LINE OF GOODS CARRIED: APPAREL·------·-·-----···-----·-----·---··-·--------····--·····--·--··-·-·-··--···--·----··-··-----·-·------------­ 150 2,198,981 + 9.0 -43.5 Family Oothing Stores·-·----·--------------·-·--·-··--· ··--·--·---------------·------·------------------------35 216,609 + 10.5 -59.8 Men's and Boys' Clothing Stores _ ·-····---··-----···-·-·--··-·------··-------··-·-·····--·----···------···-59 828,555 + 11.l -44.4 Shoe Stores __ ··--· ··-----·····------···-·-·-·-----······-··---··-··--··----··---------··----------·--······-···------------20 98,261 + 3.9 -49.2 Women's Specialty Shops_·-------·-·----··-··---------··--·--·----·---····--·-----·------·--·--·--------·····---·-·· 36 1,055,556 + 7.6 -36.9 AUTOMOTIVE.______________________ _________________________________________________________________________________ _ 162 3,655,071 7.5 -17.4 Filling Stations_.·--------·--·---···--·------------·-·----··---··--------··----------------··-·-------·---··-··-··--­ 53 147,478 + 7.1 -5.7 Motor Vehicle Dealers--------·--··-----------------··-------·-·---···---·-·-·-·-·---·---_____ -··---·---------····---109 3.507,593 8.0 -17.8 COUNTRY GENERAL.·--·---···------·-·-·----··-·----·---·-------·---------------·-···------·-----------·--­ 114 596,021 0.4 -21.0 DEPARTMENT STORES _------·----·--··-·--------·-···------·------------·--·--·-··----·----------------­ 66 3,472,095 + 9.6 -56.8 DRUG STORES______·----·--··-·-···-----····--··-··-------·····-----·----·-----·--··--··-------·-··--··----------··· 178 573,358 + 7.8 -21.6 FLORISTS·---·---·----------····--···---·---·-·---------·-···----·-··-----··--···--------···----------···---··------·· 42 61,290 + 7.4 -38.0 FOOD_______ ---·-----·--···--·---··--·---··------··----·--·----·-··--·----------··--·-·------·----··----·--·-··-191 1,077,957 0.1 -9.5 Grocery Stores---·· --·-·----·---···------·-·--···---··--···-····--··-·-----------·-·------·----··--------·--··-·-­ 58 226,254 2.2 -10.3 Grocery and Meat Stores --··----··-·---·-·--·-·---·--·-----------···--------···-·-----------------··--·--133 851,703 + 0.5 -9.3 FURNITURE AND HOUSEHOLD -··-·---. __ -------··---·-·--··-------·------·-··-·----------------··· 70 700,891 -3.2 -4.M Furniture Stores..----··-··------··-··-··----·-----·---------·-··-----··-------··---------·-·---------·------···· 56 608,087 -1.9 -44.4 Hou.sehold Appliance Stores _______ ------------·----·------·----·-------------··--·-·-·--·----------···---9 61,038 -14.4 -35.9 Other Home Furnishings Stores.__________ .-_____________ ---·-------------·--·-···--····--·-·----·------· 5 31,766 -3.2 -35.0 JEWELRY____ ··-·--·-----·-·-·--· ···----------·---------·-·---------------------···-··-····--···---··-··-----------· 52 166,875 +18.0 -7"-0 LUMBER, BUILDING, AND HARDWARE __________ ---· --·---·-·--···------····-----···--271 1,412,186 + 1.3 -5.7 Hardware Stores..·----·-···-----------------·-··--------···-----·-----·---····---·-·--·····-----·--·---·-------------· 96 353,ti09 7.8 -28.2 Lumber and Building Material Dealers---·----···--·--------···--·-----------·----·-··-----··--·--------175 1,058,577 + 4.7 + 5.4 RESTAURANTS ---·-·------·-------------·····--··-··--------------·-··-···-·-·------·--·--------··--27 119,296 + 7.4 + 2.5 ALL OTHER STORES ____________ ----··-----·-··------------·····-·-----·---------·----------··-·-------22 112,241 + l.7 -18.3 TEXAS STORES GROUPED ACCORDING TO POPU­LATION OF CITY: All Stores in Citi es of-Over 100,000 Population._________ -···-----____ -----··---------·-----------··----------····--------309 7,120,025 0.8 -42.3 50,000-100,000 Population______________ --·-·----------·--·---···----··--·----·--------------------132 1,428,357 + 1.5 -44.4 2,500-50,000 Population ·---·-·----···------------·····-----···-·-----··-------·-··---------------·· 557 4,187,351 + 7.1 -32.3 Less than 2,500 Population.. ---------------··-··-·····------------······--·--·-----·-----·--·--··---347 1,410,529 + 2.1 -16.2 'oTE: P rrpared from report~ from independent re tail store~ to the Bureau of Bu!iness Research, coOperatiog with the United States Department of Commcrc~. JANUARY SHIPMENTS OF LIVE STOCK CONVERTED TO A RAIL-CAR BASIS§ Cattle Calves Hog1 Sheep Total 1938 1937 1938 1937 1938 1937 1938 1937 1938 1937 Total Interstate Plus Fort WorthU-----··--··---·-·-3,516 3.41 9 702 776 548 736 446 370 5,212 5,301 Total Intrastate Omitting Fort Worth____________ 416 529 n9 208 38 69 87 65 680 871 TOTAL SHIPMENTS__________________ 3,932 3,948 841 984 586 805 533 435 5,892 6,172 §Rail-car Bu is: Cattle, 30 head per car; calves, 60; hogs, 80; and sheep, 250. Fort Worth 11hipments are combined with interstate forwardings in order that the bulk of market disappearance for the month may be abowu. No~: Theae .da~a are. fu:nished the United States Bureau of Agricultural Economics by railway officials throucb more than 1,500 station acenu, repretentil& every h•cetoclt 1h1ppme pomt in the State. The data are compiled by the Bureau of Business Research. CEMENT On Thousands of Barrels) Jan. Jau. Dec. 1938 1937 1937 Texas Plants Production ---------------___ 334 552 502 Shipments ---------------------530 372 420 Stocks ---------------------------752 909 948 United States Production ------------------4,.534 6,633 7,044 Shipments ---------------------4,390 4,678 4,780 Stocks ____________________ ____25,022 24,396 24,879 Capacity Operated __ __ ___ 20.7% 3M% 32.2% NOTE: From U. S. Department of Interior, Bureau of Mines. PETROLEUM Daily Average Production On Barrels) Jan. Jan. Dec. 1938 1937 1937 Gulf CoastU... _________ --------------194,300 180,950 193,740 East Central Texas___________________ 85,400 105,950 91,900 East Texas -------------------------------475,150 449,350 446,810 North Texas ----------------------------70,300 65,600 72,l!(j() Panhandle --------------------------------70,200 74,800 71,010 Southweet Texas --------------------231,650 187,550 244,6'W West Central Texas_________________ 32,000 32.,700 32,960 West Texas -----------------------------193,200 171,200 191,820 STATE ___________________________________ l,352,200 1,268,100 1,345,740 UNITED STATES _________________ 3,444,450 3,194,050 3,434,100 Imports ____ ----------------------------------128,929 147,536 156,657 ''JncJude8 Conroe. '\oTE: From American Petroleum Institute. See accompanying map showing oil producing districts of Texas. Gasoline sales as indicated by taxes collected by the State Comptroller were: December 1937, 96,982,000 gallons; December 1936, 95,358,000 gallons; November 1937, 100,842,000 gallons. TEXAS COMMERCIAL FAILURES Jan. Jan. Dec. 1938 1937 1937t Number ----------------------------------------14 13 20 Liabilities/I --------------------------------------392 56 282 Assetsll ----------------------------------------S46 $19 $145 Average Liabilities per Failure ll --------S 7 $ 5 14 fRui1ed. Il la tbou1and1. I\crz: From Dun and Brad1treet, lac. LUMBER (In Board Feet) Southern Pine Mills: Jan. 1938 Jan. 1937 Dec. 1937 Average Weekly Production per Unit -------­____________ 260,241 Avllrage Weekly Shipments per Unit ------------­___ 276,284 Average Unfilled Orders per Unit, End of Month _____ 659,781 291,979 336,607 1,209,892 233,364 203,177 611,772 on: From Southern Pine A11ociati•n. POSTAL RECEIPTS ]an. Jan. Dec. 1938 1937 1937 _________________$ Abilene 18,720 $ 16,680 22,851 Amarillo -----·-·--···-28,317 27,182 40,883 Austin -··-------------67,578 54,781 63,672 Beaumont ---25,588 33,677 -···----23,160 Big Spring 6,277 5,248 9,204 --··-----· Brownsville 5,886 6,094 9,129 Brownwood __________ 6,012 5,894 7,976 Corpus Christi________ 23,389 19,558 30,881 Corsicana 5,259 5,150 8,871 Dallas -------------_____ 331,074 332,817 481,862 Del Rio ---------------5,721 5,718 6,539 Denison 4,939 7,080 ---·-------· 4,444 El Paso 37,139 44,216 81,957 -------··------­Fort Worth ------------128,850 131,783 193,735 Galveston 24,8% 24,860 44,226 -·------- Harlingen ---------5,868 5,065 9,452 Houston 217,285 212,022 310,187 Jacksonville -----------3,413 3,184 3,678 Longview 11,312 13,780 --------·----10,055 Lubbock 16,718 22,661 --·-----------13,053 McAllen 5,846 3,989 6,023 --·----·--·-­ Marshall 5,877 5,444 8,370 Palestine 8,474 5,247 5,779 -----------·-- Pampa 6,993 6,923 ----------------10,575 Paris -----·------------5,575 5,462 8,1()9 Plainview 4,303 4,024 6,006 Arthur__________ Port 13,368 11,097 21,472 A ngeJo__________ an 11,577 10,992 16,413San Antonio ______ .. 118,964 108,610 167,867 Sherman 7,102 6,930 10,313 Snyder 1,560 1,406 1,887 Sweetwater --4,576 5,208 6,316 Waco 35,425 31,100 42,797Wichita Falls __ 25,065 22,356 30,515 TOTAL -----.$1,228,946 1,179,752 1.744,743 !'ion: Co:npiled from reJ>orts from Teno cbambcu of commerce to th• Bureau of BuafoeM Reiearcb. JANUARY CREDIT RATIOS IN TEXAS RETAIL STORES (Expressed in Per Cent) Ratio of Ratio of Ratio of Number of Credit Sales C0Ilection11 to Credit Salaries Stores to Net Sales Outstanding• to Credit Sales Reporting 1938 1937 1938 1937 1938 1937 71 6.U 63.8 39.7 40.7 ;+-­ All Stores...------------------------------------------------------------------------------------------­Stores Grouped by Cities: 4 55.4 57.1 33.9 39.0 2.4 2.3 Abilene....--------------------------------------------------------------------------------------­ 7 60.2 59.l 40.8 37.4 1.8 1.7 Austin --------------------------------------------------------------------------------------­8 73.9 75.3 38.0 41.6 1.5 1.6 Dallas -------------------------------------------------------------------------------------­Fort Worth________________ --------------------------------------------------------------------­ 8 64.5 62.3 37.3 33.8 1.6 1.6 Galveston____________________________________________________________________________ 3 72.2 76.5 41.8 47.4 2.7 4.1 Houston_________________________________________________________________________,___ 9 65.1 64.4 43.2 44.1 2.0 1.6 6 35.1 46.4 44.4 46.4 1.1 0.7 San Antonio___________ -------------------------------------------------------------­ Waco_________________________________ -------------------------------------------3 65.1 60.7 35.0 37.7 2.5 2.5 All Others__________________ -------------------------------------------------------------------­ 23 56.4 56.1 40.5 42.4 1.9 2.1 Stores Grouped According to Ty.pe of Store: Department Stores (Annual Volume Over $500,000) ------------------·-----· 15 64.4 63.2 42.. 1 42.7 1.8 1.8 Department Stores (Annual Volume Under $500,000) ____________________ ----12 58.7 58.9 35.3 37.4 2.4 2.5 Dry Goods-Apparel Stores._____________ --__ ----------------------------------------6 59.5 60.7 33.5 32.7 3.2 3.1 Women's Specialty Shops_____ --------------------------------------------------------­ 16 61.7 62..6 36.7 39.6 1.0 1.0 22 63.9 69.4 37.2 36.7 2.0 1.8 Men's Clothing Stores --------------------------------------------------------------------------­ Stores Grouped According to Volume of Net Sales During 1937: Over $2,500,0QO____________________________ ----------------------------------__ ··-8 69.7 67.2 42.9 45.2 1.5 1.4 $2,500,000 down to $1,000,000..___ ....... -·-··--··--------····----···----·-··········----8 60.4 59.3 39.9 41.6 1.7 1.7 Sl,000,000 down to $500,000___________ ··------------·-···-----·-··----------... 9 56.6 55.9 43.3 42.2 1.4 1.5 $500,000 down to $100,000___________________ -----------··-····--------·-·-·-----·-33 59.3 58.2 38.6 38.4 2.4 2.6 Less than $100,000....... ___ ---------··--·----------------------·-·--·-·--·-····­ 11 61.7 57.5 33.7 34.7 4.,2 4.2 Non : The ratios shown for each year, in tl'e order in which they appear from left to right, are obtained by the following computations: (1) Credit H)e1 divided by net sales. (2) Co1lcctions during the month divided by the total accounts unpaid on the first of the month. (3) Salaries of the credit deparl· nw nt divided by credit sales. The data arc reported to the Bureau of Business Research by Texas retail stores. BANKING STATISTICS (In Millions of Dollars) Jan. 1938 Jan. 1937 Dec. !937 Dallao United Dallao United Dallao United District States District Statee District States DEBITS to individual accounts______________________________________________________________ _ 1,050* 41,538* 1,048 49,906 843 36,772 Condition of reporting member banks on-Jan. 26, 1938 Feb. 3, 1937 Dec. 29, 1937 AssETs: Loans and investments--total.. ·--------------··-··-··----··-···-----···-···------·-490 21,225 497 22,579 509 21,402 Loans-total_____________________________________________________________ _________________ _ 236 9,038 708 31,520 253 9,387 Commercial, ~n.dustrial, and agricultural loans: On secuntles ___________ .... ·-·-·-·-·----···--------···-·-··-···---------· 10 563 11 579 + + Otherwise secured and unsecured.._______________________________________ 140 3,832 :t: 150 4,022 + Open market paper_·---····-····--·--------·-··-·--------------------···---------3 459 + + 3 461 Loans to brokers and dealers in securities..·---·-·········-----------------·--··-·­3 806 3 1,204 3 894 Other loans for purchasing or carrying securities-----·---·····-·-··-·····-·-·---14 617 :t: 15 635 + Real estate loans..·-······-·····---··········-····-·--------···-----··-·----·-··------··········­21 1,162 23 1,151 2.1 1,165 Loans to banks---····--··-·----------··-·-··-·----··--·-··----------------------··-67 60 66 Other loans: On securities.------····-------------···-··--------···----------·-···-·-10 718 11 737 + + Otherwise secured and unsecured..____________________________________ 35 814 39 828 + + U.S. Government obligations ·----··------------··-------------------------173 8,167 zoo 9,149 178 8,018 Obligations fully guaranteed by U.S. Government__________________________ 30 1,139 30 1,214 28 l,ll6 Other securities.·--·-··-··-------··-·-------------------------------------·-···· 51 2,922 56 3,275 50 2,881 Reserve with Federal Reserve Banks _------···-··· no 5,735 108 5,330 113 5,427 11 305 9 375 12 355 188 2,046 178 2,249 158 1,886 g;!:i~~~~~~~~~~-~~~~~:~:::~~:~~~~~~~~:~:~~~~~~~~~~;~;~~~~ 27 1,283 28 1,349 28 1,267 LIABILITIES: Demand deposits--adjusted ··--·-··········-·-----------402 14,583 384 15,493 391 14,431 i~s.eGdoe:e:~~t--dey~;i;~-· ...... ···:=::=-~:::::.~:~~~-=:~-=:-.:~~--=:.-.:·:__'_~-~:.:::-.-.~.-=:-~_:-.·: 128 5,213 121 5,077 128 5,205 Inter-bank deposits: -----------·--------------·----------­ 21 653 31 476 22 691 Domestic banks _ ___ -------·--··---·--·--·-··· 187 5,322 201 5,988 191 5,090 1 425 417 442 g~rl~~~t~;~~~~--~:::-_:::::::::·=::::=::::=:=::::~-=:===:..:·.-.:~~~~~=~~=~== 1 9 6 821 5 867 6 843 Capital account . ------~:::::_:::::::::::::=::::::::=====~=:=-~:===·--­ 81 3,626 78 3,564 82 3,626 *Five weeks. lNot available. Ton: From FC"deral Reserve Board. JANUARY CARLOAD MOVEMENT OF POULTRY CONSUMPTION OF ELECfRIC POWER IN TEXAS AND EGGS Power Consumed Cars of Poultry Live Dressed Can of E1p(In Thousands of K.W.H.) Chickens Turkeys Chickens Turkeys 1938 1937 1938 1937 1938 1937 1938 1937 1938 1937 Percentage Change Jan. 1938 Jan. 1938 Shipments from Texas Stations Jan. Jan. Dec. from from 1938 1937 1937 Jan. 1937 Dec. 1937 TOTAL 6 11 1 3 80 45 12 35 18 23 Commercial ----···-----39,413 34,011 38,552 + 15.9 + 2.2 Intrastate 1 1 3 4 Industrial ---------------· 76,867 78,001 82,126 -1.6 6.4 Interstate -----------5 10 1 3 80 45 12 35 15 19 Residential _________ 29,845 25,912 27,512 + 15.2 + 8.5 Receipts at Texas Stations All Other ----------------23,615 26,221 24,454 9.9 3.4 TOTAL ------------____ 5 4 TOTAL ________________ 169,740 164,225 172,644 + 3.4 1.7 Intrastate ___________ ___ _ 3 4 Interstate ----------___ _ 2 NoTE: Prepared from r eports from 15 electric power companies to the Bureau of Busines1 Research. NOTE: These data are furnished the U. S. Department of Agriculture, Division of Crop and Livestock Estimates, by railway officials through agents at all stations which originate ancl receive carload shipments of poultry and eggs. The data are compiled by the Bureau of Bueiness Research. JANUARY RETAIL SALES OF INDEPENDENT STORES IN TEXAS Total Total Number Percentage Change Number Percentage Change of in Dollar Sales of in Do11ar Sales Fiime Jan. 1938 Jan. 1938 Firms Jan. 1938 Jan. 1938 Re­from from Re-from from porting Jan. 1937 Dec. 1937 porting: Jan. 1937 Dec. 1937 TOTAL TEXAS -----------------------1,345 + 1.9 -37.9 Eastland -----------------------------8 + 8.0 -19.1 TEXAS STORES GROUPED Stephenville --------------------5 + 12.2 -34.8 BY PRODUCING AREAS: All Others --------------------22 + 11.1 -12.5 DISTRICT 4______________________ 334 + 3.1 -43.3 DISTRICT 1-N______________________ 75 + 4.4 -32.6 Cleburne -----------------------------l} -7.3 -36.0 Amarillo ---------------------13 + 9.4 -41.6 Corsicana -----------------------10 -3.6 -53.2 Pampa -------------------·------------14 5.4 -28.9 Dallas ------------------------------54 + 0.5 -44.3 Plainview ------------------------11 + 6.6 -32.5 Denison --------------------------9 + 15.6 -13.3 All Others ---------------------37 + 10.2 -19.1 + 8.0 -48.5 DISTRICT 1-S__________________ 28 Fort Worth ---------------------72 + 7.7 -39.7 Sherman -------------------------7 + 8.3 -19.1 Big Spring ----------------------9 -1.1 -40.3 Taylor -------------------------7 + 32.7 -7.0 Lubbock ----------------------------15 +19.6 -41.3 Temple -------------------------12 + 2.5 -29.3 All Others -----------------------4 + 3.8 -53.4 + 0.8 -49.0 Waco ------------------------------34 DISTRICT 2---------------------------123 +14.3 -30.0 All Others ------------------------116 + 4.3 -19.2 Abilene -------------------------------16 -2.8 -42.1 DISTRICT 5_________________________ 131 + 2.2 -33.1 Snyder -------------------------------7 + 8.6 -25.8 Bryan ---------------------------11 + 29.3 -29.2 V i;rnon ------------------------------7 + 8.2 -38.6 Longview --------------------------8 + 24.2 -27.7 Wichita Falls ---------------------21 +30.4 -24.2 Marshall ----------------------------13 + 12.2 -47.7 All Others --------------------------72 + 14.9 -25.4 Nacogdoches ---------------------5 + 3.1 -31.0 DISTRICT 3_______________________ 48 -25.4 + 0.7 Tyler ------------------------------20 + 4.3 -32.3 Breckenridge ----------------6 -8.6 -28.2 All Others ---------------------------74 -5.0 -32.6 DISTRICT 6________________________ 48 Brownwood ----------------------7 -20.4 -39.9 -10.5 -40.3 El Paso ---------------------------34 -11.5 -42.9 All Others -----------------------14 -2.2 -9.9 DISTRICT 7______________________ 73 -3.2 -36.1 Brady ----------------------------10 -1(}.9 -12.9 San Angelo ----------------------17 + 10.8 -43.3 All Others ---------------------4-0 -11.1 -33.2 DISTRICT 8_________________________ 224 3.8 -30.0 Austin ------------------------25 + 3.6 -49.6 Corpus Christi ----------------14 + 9.0 -14.3 Cuero ------------------------------10 + 4.0 -41.2 Lockhart ---------------------------8 + 8.2 + 13.1 San Antonio -----------------------82 -10.5 -27.5 San Marcos --------------------7 + 6.0 -24.3 All 0th~ ------------~---------7!! + 3.1 -17.9 DISTRICT 9___________________________ 190 + 5.5 -39.3 Beaumont -----------------------_ 26 + 8.7 -50.9 Galveston -----·--------.. --______ 26 0.4 -32.9 Houston ----------------------------67 + 4.6 -41.4 Port Arthur ---------------------21 4.1 -34_7 Victoria ----------------------------__ 6 + 13.8 -26.5 All Others ------------------------44 +29.1 -20.0 Brownsville --------------------14 + 12.7 -34.8 Harlingen -------------------14 + 4.7 -30.6 Laredo -----------------------------6 + 4.4 -38.4 All Others ---------------------37 + 1.5 -7.8 Non : Prepared from reports from independent retail stores to the Bureau of BusinelSS Research, coOperating with the United States Departm ent of Commerce. BUILDING PERMITS Jan . 1938 Abilene ----------·-·----$ 27,150 Amarillo ·-·-------·--··-51,518 Austin -·--··-----··-----277,723 Beaumont _. _ ··-··--81,079 Big Spring ··--__ ___ 12,330TI Brownsville ____ .. .. 9,385 Brownwood ........ __ 175 Cleburne _ ___ ·------9,235 Corpus Christi --·--204,085 Corsicana ---·-------·---5,781 Dallas ______ --··--__ 96.5,643 Del Rio -·------··-------13,335TI Denison --·--··--·····--7,254 El Paso ------·---... ·---50,039 Fort Worth ····-------720,289 Galveston --·····-·-· _ 121,548 Harlingen ---·------------8,702 Houston ____ -··-·-·---1,167,795 Jacksonville .... ·---· 5,000 Laredo -····---···----_ 7,095 Longview 49,300TI Lubbock .. .... . . 117,666 McAlien 28,545 Marshall .... .... ____ 23,595 Palestine 3,790 Pampa ·······--·-_______ 21,000 Paris -----·····-·-·--·.... 9,733 Plainview 2,250 Port Arthur __ ·-82,328 San Angelo --··---·-29,375 San Antonio . -·-·-· 244,222 Sherman 19,091 Snydoc ... 700 Sweetwater ··----··-. 21,265 Waco __ 40,llO Wichita Falls _ . _ 37,811 TOTAL _ . .... $4,475,942 ~Do