TEXAS BUSINESS REVIEW Bureau of Business Research The University of Texas Vol. XII, No. 12 A Monthly Summary of Business and Economic Conditions in Texas and the Southwest Bureau of Business Research, The University of Texas, Austin, Texas Entered u eecoud clue matter oa May 7, 1928, at the p~t ol&o• at A••tl•, Teu1, vader Aot ef Aup1t 2•. 1'11: MILK lQUIVALtNT or C1tc.AMlP..Y &uTTlll. CUlt..Sl, ICl CR..tAM. AND [VAPOP..ATlD MILi'.. PllODUClD IN T'-.XA.S­1927-19~7 ll12'i! Cl.E.AMU..Y · eiuTH.l. ~ CUU.Sl !7Zl IC[·CUAM900 l.D lVAPOP..AH.D · MILI<.. 5 · If) z 0700-l----------~~­_, _, 4 C) 6 00-+-------Y. ,r/;r,+--~Ail1i.t--­ u. 0 500 II) Z400 0 _,300 _, ~200 ~ z ... J. J. "' u 0 roo 0 -.., ONE DOLLAR PER YEAR TEN CENTS PER COPY TEXAS BUSINESS REVIEW INDEXES Of BUSINESS ACTIVITY IN TEXAS AVERAGE MONT H OF 1930: 100 % WEIGH T COM P OSI T E •INOEX. t MPLOY MEN T ---25 "• f"RE1GHT CARLOAOINGS---20% PAV ROLLS 25~ CRUDE OIL RUNS St'e OtPARTMtNT STORE SALES-10 "• t LtCTRIC POWER CONSUMPTION-I'"• T h• uni va rs ity ot 'reu s e u re au of eusiness Research Business Review and Prospect Barron's index of physical production and trade in the United States registered 76.8 the first week in Janu­ary compared with 58.0 during the corresponding period last year, an increase of 32 per cent. It is the consensus of opinion among business analysts that the wide margin of business improvement which now prevails in com­parison with a year ago will be maintained during the first six months of the current year at least. The more venturesome forecasters even predict that this wide mar­gin of gain will continue during the second half of 1939, though comparisons will then be made with a rate of business activity substantially above that which prevailed during the first half of last year. The optimists have much on their side so far as concerns the elements which could make for a long period of prosperity. Whether these elements can be brought to function constructively is the great question. "We have had," says one analyst, "nearly a decade of generally lean times-nearly a decade of under-building, of under-expansion, of under-maintenance; nearly a decade of psychological inhibitions and frustrations; nearly a decade of repression of the normal American spirit of venture for gain. On the demand side we need an investment of many billions in construction and additional billions for the modernization, or expansion of industrial, railroad, and utility facilities. On the supply side we have abundance of raw materials, intelli­gent labor, technical knowledge ; more idle cash in the commercial banks than ever hefore, and a record high total of private savings." A new philosophy has, moreover, recently come to the forefront with reference to Federal expenditures in rela­tion to national income. Under this philosophy the national budget will automatically become balanced when the annual national income reaches eighty to ninety billion dollars, but not before. Only in 1929 has the national income reached the lower of these two figures, and since that year it has never quite reached the seventy billion mark, although the population of the country has increased by about eight million since that time. Some reputable authorities state that the foregoing objective as to national income readily could be reached but that it would require important changes in point of view toward profits in industry and would involve a constructive, long-time policy toward such fundamental industries as agriculture, the railroads, and public utilities. TEXAS BUSINESS Industry and trade in Texas seem definitely to be pointing upward. In contrast with the business situation in the country as a whole, however, the Texas composite index is ~till moderatelv belo"· that of a year ago whereas that of the United Stat~s has risen sharply above that of last year. The December Texas index adjusted for seasonal varia­tion, for all factors comhinerl, is 95.3 compared with 93.4 in November and 97.8 for December, 1937. The gain from November to December is the result of im­provement in employment, pay rolls, miscellaneous freight carloadings, and departmrnt ston~ salrs. There was a moderate decline in run~ of C'rude oil to stills and in electric power consumption. Should improvement occur in year-to-Year comparisons during coming months in farm cash income and income from oil as now seems probablr. in conjunction with the rising trend of pay rolls which is already in eYi­dence, the business index of Texas may soon be expected to surpass that of last year. Thi,-situation 'rnuld soon be reflected in retail sales and a rising tempo of business generally. The following table p-i\CS the detailed figures for the various factors separatch-and combined. INDEXES OF BUSINESS ACTIVITY I TEXAS Dec. Dec. Nov. 1938 1937 1938 Employment ---­---------------­91.17 Pay Rolls -------­----------­--­___ 92.85 Miscellaneous Freight Car-loadings (S.W. District}_ ______ 66.56 93.58 94.58 74.99 88.25* 90.91 * 62.17 Crude Runs to Stills ---------____ 179.54 169.43 181.13* Department Store Sales ___________102.60 106.36 99.05 Electrict Power ConsumptioIL .... 111.87 110.93 114.63* Composite Index -------­ -----­ 95.33 97.78 93.38* •Revised. FARM CASH I NCOME Texas farm cash income during December, as com­puted by this Bureau, totalled $22,932,000 exclusi\'e of Federal subsidies. The comparable figure in December, 1937, was $27,941,000. The index of farm cash income rose from 73.3 in November to 36.3 in December. In December last year the index was 105.2. The December index in each case represents the percentage which the December income in 1938 and 1937 was of the a\'erage December income during the fiye years from 1928 to 1932, inclusive. For the entire year 1933 the com puled farm cash income in Texas was $403,675,000 compared with $536,528,000 in 1937. Government payments to Texas farmers amounted to $68,814,000 in 1938 and 836,010,000 in 1937. The following table gives detailed figures on Texas farm cash income for the State as a whole and for sub­divisions of the State. INDEX OF AGRICULTURAL CASH INCOME IN TEXAS Cumulative Income Dec. ov. Dec. Jaa.-Dcc. Jan.-Dec. Districts 1938 1938 1937 1938 1937 (000 Omitted) 1-N --·· ....120.3 %.0 119.2 38,132 50,974 1-S ----­ -------­88.8 105.8 168.2 35,191 54,069 2 ---­--­ ----­--­37.2 46.1 59.8 47,298 59,150 3 ----------­ -------­80.6 71.2 90.1 21,608 27,276 4 ----­ ------­65.2 48.2 86.9 77,127 104,467 5 -----·---­6 ---­-­ -47.0 __ J 47.7 22.4 114.2 70.l 123.2 31,450 21,693 44,172 19.279 7 ------------­ --­64.9 86.7 71.5 31,161 46,077 8 ----------­ . 114.2 79.4 115.9 39,698 53,758 9 -­- 117.8 108.4 108.8 22,232 28,434 10 --------­_____187.5 113.6 86.2 12,318 15.368 10-A -­ ----301.6 277.4 338.7 25,767 33,504 STATE -­-­---­ 86.3 73.3 105.2 $4{)3,675 536,528 F. A. BCECHEL. For Other Texa.J Data, See Statistical Table3 at the End of This Publication Financial Among the more strikin~ financial developments of the month have been the dramatic replenishment of the British exchange stabilization fund's depleted gold hold­ings and President Roosevelt's national bulget message of January 5. Of considerable interest also is the grow­ing possibility that the Administration's unfortunate sil­ver buying policy may be moderated. It is probably too much to hope that this particular folly will be abandoned in toto. On Jannary 6 the Bank of England transferred £200,000,000 of gold, having a market value of some £350,000,000, to the British Exchange Equalization Fund. The withdrawal of this gold, which had been serving as partial collateral behind bank note issues, left a note coverage of £127,000,000 in gold and £400,000,000 in government bonds. The transfer of this huge amount of gold was made nPcessary because of the depleted condition of the Fund's gold holdings. It will be recalled that the Exchange Equalization Fund was established following England's departure from the gold standard in 1931 in order to >;teady the sterling exchange rate and protect it from speculative attacks. Since the debasement of the dollar in 1934, the pound has been over-valued in terms of dollars which has subjested the sterling exchange rate to continuing pres,,ure. More recently the European war scares h:wc stimulated heavy capital movements from England which have added materially to the pressure. Under the so-called Tripartite Monetary Agreement the Arnrican Exchange Stabilization Fund has assisted in supporting the s'.erling exchange rate by purchases of sterling in l'\ew York. The sterling exchange thus bought has been converted into gold in London from the British Fund at the ofllcial gold price for the day. This gold has been either earmarked in London or imported to New York. At the same time the British Fund has supported the sterling rate by Eelling dollars in London, which dollars probably have been borrowed from the American Fund and promptly paid for by earmarking gold in London. Both procc%CS result in losses of gold by the British Fund. According to The Wall Street Journal, the British Fund's holdings of gold had been reduced to approximate! y £25,000.000 on January 6, which figure compares with £151,7138,0()0 held on September 30, 1938, and with £297,fWO,OOO held on March 30, 1938. The lran~for of this p;old, of course, greatly increases the abihy of the Brilic:h Fund to support the sterling exchan~c rate. That it ha::; se:·vetl lo check speculation against the pound is evide:wed hy the sharp rise in the ~•erlin~ rate following announcement of the gold trans­for. There is 'ome question, howe\·cr, as to the ultimate ability of the Fund to defend the pound. Should pres­F1rc on ~teriin'! continue. and there is reason to belieYe th::I it 'sill, tl1;! present , gold holdings will be further d,..plctu l. Once this gold is gone, there is only some £127,00D,OUO of gold remaining in the Bank of England rt'.sencs from which to obtain replenishment plus what­eYcr metal may meanwhile he bought in the open market. rate to seek its natural level, or else to impose rigid control on the foreign exchange market similar to that employed by Germany and Italy. There is, of course, the posisbility that the pound will be stabilized in terms of gold before such a dilemma is faced. The heavy gold losses of the p;ist six months render the prospect of stabilization increasingly remote. Preddent Roosevelt's budget message, delivered to the Congress January 5, indicated rather conclusively that the Chief Executive had adopted the so-called theory of "compensatory government spending," of which Mr. Marriner Eccles is a leading exponent. The recom­mended federal budget for the fiscal year ending June 30, 1940, called for expenditures of approximately $9,000,000,000 with receipts estimated at $5,700,000,000 leaving a deficit of some $3,300,000,000. For the current fiscal year, expenditures are estimated at $9,500,000,000, income at $5,500,000,000, with a deficit of approximately $4.,000,000,000. In his message, the President strongly opposed any violent contraction in relief spending at the p;·esent stage of business recovery. Likewise he opposed any material increase in federal taxation which might op­erate to reduce purchasing power. Prospective budget balance at some definite future time was not mentioned. Instead, the President implied that such balance could not be expected until such time as the national income should reach a level of $80,000,000,000 or more­roughly the 1929 level. In reaching a national income of this magnitude, federal spending, again by implica­tion, was expected to assist materially. The accumulated federal deficit from 1931 to 194.0 (the last two years estimated) of $27,279,000,000 was referred to as govern­ment "investment" either in "durable improvements and recoverable loans" or in "conservation of our human resources," and the President stated that in his opinion not a penny of this sum had been wasted. The message affords increasing evidence that the fed­eral budget is out of control. Congressional reaction to the situation is as yet uncertain. There is undoubtedly strong sentiment for economy in the present Congress, but whether this sentiment will be translated into legis­lative action remains to be seen. For the first time since the original enactment of the law in June, 1934, there appears to be some possibility of revising, perhaps even abandoning, the Administra­tion's silver purchase program. It will be recalled that the Silver Purchase Act of 1934 made it the policy of the Government to acquire silver at home and abroad until such time as the value of the silver monetary stock should equal one-third the value of the gold monetary stock. At the time the law was enacted, approximately 1,333,000,000 ounces of silver (valued at $1.29 an ounce) were needed to achieve this objective. Through December, 1938, a grand total of 1,870,000,000 ounces had been purchased, largely from foreign sources. As of the first of this year, approximately 1,170,000,000 ounces were still needed in order to reach the desired In the e\·cnt of exhaustion of the Fund's gold defenses, one to three ratio. The relative lack of progress, of the Briti>h Co\ cnrn:cnt will be forced either to abandon course, has resulted from the heavy importation of gold artificial support of the pound permitting the exchange throughout the period, It has been evident for a long time that the silver buying program has failed to accomplish any of the advantages originally claimed for it by its sponsors. Instead it has resulted in forcing China off the silver standard, decreased the world monetary use of silver in fractional coin, and made the Federal Treasury the largest speculator in silver in history. The program, however, has not involved the Treasury in direct cost because the metal purchased has been paid for by issuing new silver certificates. A total of $913,000,000 of these certificates had been issued up to November 30, 1938. There is reason to believe that this new currency is to a considerable extent responsible for the strady increase of currency in circulation which has taken place since July, 1934. In this respect it is perhaps i1H.'tructive to remember that the Bland.Allison and Sherman Act silver buying program terminated in the panic of 1893. JAMES c. DOLLEY. The Economic Problems and the Texas of Tomorrow Economic problems, whether State or National, have to be seen in their wider perspective and in the light of inclusive, long-time trends, if a substantial solution is sought rather than some palliative which may hinder rather than aid. Economic problems of Texas have to be seen in the perspective of a National integration of the economic life of unlike regions or sections. In the same way the primary problem of Texas industrialization has to be seen in the long-time currents dominant in the United States and which in themselves represent adjustments of wide scope to the American scene. Much of the past economic development belongs to that inclusive series of wave after wave of settlement and colonization involved in taking up the lands of the country with their rich and varied natural resources and which in the main were there for the taking from the roving tribesmen of the Western Plains; this conquest of the frontier, followed by the greatest colonization in modern history, has been aptly designated as the West· ward Movement-it was the march of Anglo-American civilization across the North American continent. Currently we are witnessing in Texas what appears to be another inclusive movement and which itself bids fair to transform the economic life of the State perhaps even as much as the preceding Anglo-American migra· tion. This movement has to do with industrialization; it rellects the operation of new forces, it renders neces· sary new appraisals of the State's natural endowment; and above all it brings new and broader challenges to the State's leadership whether in education or politics or industry. It is the challenge of Texas in this middle period of the 20th century. It is a challenge which cannot be disregarded, for the roots of the challenge are social in nature and upon the way the challenge is met will depend the Texas of ten or twenty-five years hence. THE WESTWARD MOVEMENT Of the significance of the Westward Movement it has been aptly said: "Probably no other factor has had broader ramification or greater importance in shaping our political, our economic, and our social history. Cer· tainly in our economic history from the earliest settle· ment down to the close of the 19th century, nothing exercised a more predominant influence than this vast supply of relatively free and undeve.loped l~nd, the essential economic significance of which consisted of cheap natural resources." Essentially the Westward Move~ent wa11 ai:i expres· sion of the impact of the Mechamcal Revolution upon the American scene--upon a scene dominated by a large continental area possessing extraordinarily rich and varied resources generally readily available. This impact required huge amounts of capital largely sup· plied from Western Europe; it was centered primarily in obtaining foodstuffs and raw materials for the rapidly growing industrial areas first of Great Britain and later on the Continent, as well as in northeastern United States. Because the agricultural advances took place largely in the interior of the United States inland trans· portation was a necessity. Solving the problems of transportation brought the widespread building of rail­roads after the middle of the century, and in the wake of railway extension came the large-scale growth of commercial centers. Scarcity of labor in the new regions and the conquest of new types of regional environments brought about the unprecedented expansion of farm machinery, which in the past century was largely horse-drawn. Wave upon wave the Westward Movement swept across the rolling Prairies and the wide expan~es of the sub. humid Western Plains. Zone by zone the frontier was pushed westward; its progress can be pretty accurately gauged by subsequent trends in real estate values. One outstanding reflection of the Westward Move· ment was the widespread distribution of population particularly with the extension of the railroads; another was the rise of specialized production of staple com· modities in great demand by growing manufacturing operations in the East and in Western Europe. This specialized production for distant markets in turn rep· resented occupational adjustments in the vast zone-wise western advance to the various regional environments as they were brought under Anglo-American influence and control. At the same time, paralleling the growth of internal commerce to large proportions, there arose a highly centralized manufacturing industry in North­eastern United States. Prior to the advance of the Westward Movement across the trans-Appalachian country and beyond, the trade and economic interests of the ribbon of population along the Atlantic Seaboard were predominantly with overseas markets. The rise of internal commerce with the occupation of the Ohio Valley, the Old South, and the Great Lakes country, brought out the significance of the domestic market-a factor which grew to National importance long before the great growth of manufac­turing in the Eastern industrial areas; it was the un­exampled growth of this home market which provided the impetus for that industrialization which other cir· cumstances helped to make a reality. ---------------·-­ By 1900 the larger aspects of the American major regions \\-ere well in eYidence; by that period the habitat features of these regions were generaII y expressed by the occupational distribution of the population. Prior to the turn of the century American development, both agricultural and industrial, had been largely financed from abroad: no small proportion of our tech­nical deYelopments had been initiated in Western Europe althou~h their rapid application to the American scene often made the industries which grew out of them typically American. Even much of our technical and educational training was brought oYer from Europe either by immigrants or by the hordes of American stu­dents who went abroad in the 1830's and 90's, even up to the Great War, for graduate studies. THE PASSI:'\G OF THE FRO:"iTIER The closing of the American agricultural frontier did not take place all at once; but as a great historical movement the \Veslward :Movement was coming to a close by the turn of the century. The larger effects of the ce~!'ation of this mO\ er:~cnt or of the features that immediately followed were not particularly apparent at the lime; in fuel, the larger aspects of the closing of the frontier were not brought home to the American people until in the recent Depression -following the destruction of European wealth, that is, the European market as a consequence of the Great \\1ar. There had heen the widespread interest engendered in Consen at ion early in the century; there had been a slowing down in the trekking westward, and the millions of immigrants ('Oming in from Southern and Central Europe in the two decades from 1390 to 1910 were scttlinrr clown in the EaC'tcrn industrial districts and cornm;~-cial crnlcrs rather than going West as had the \Vest European immigrants before them; there had been a perceptible slowing up in new railway mileage; and some of the big packers in the first decade of the century were operating large branch plants in Argentina and Cruguay. American interests were getting into the Pacific and en~n the Far East but this, as was true of some of the other reactions to the closing of the era of free lands, was considered as the result of local or indi\·idual circumstances. These trends, which we now see in a much wider perspecli\·c, were more or less obscured by the Great War with the accentuated demands upon America for food"tufTs and raw materials. There was brought about the greatly increa~ed production from American agri­culture h:· the applii:ation of large power machinery whir:h enabled agrir·ulture to push into the dry plains liith<~rto u~ccl for ranching, a dcrelopment ably seconded by the arnilaliilitr of drouth-resistant crops and varieties 1•hich greall1 exll'ndcd the area of the arable lands. During the 2(fs the gaps in the new frontier were prdt\· efTc:ctualh· dosed: po11er farming continued to adrnncc, thus enabling the Nation's farm work to be done with lc~s power and 1\·ith le~s li\cslock. The con­tinuali'1n of tlw"c trr'nds is perceptibly changing the farm market and reducing the need for feed crops which ]Jre1 ioush· had required a considerable proportion of the acreage in crops. Parallel changes and new deYelopments were taking place elsewhere-in the European countries, in the new lands of the Southern Hemisphere and in the Tropics-­and it became apparent that the great capacity of agri­cultural production was getting quite out of bounds from the standpoint of what the market was absorbing. What was happening was that the world's commercial agricul­ture was being so effectively brought under the aegis of modern industry that a new agricultural re\'Olution was upon us; the ready markets of industrialized regions of Western Europe whose appetites seemed insatiable during the 19th century were gone; for the United States they seem to be gone beyond reco1·ery in anything like the near future. At long last we are beginning to consider the poten­tialities of the American market as a means of absorbing a much larger proportion of our agricultural produc­tion of the staple commodities-but that is quite another story. In summing up this phase of the present article I can do no better than to quote from an address delil'ered by the late Professor F. J. Turner nearly 30 years ago: "... it is with a shock that the people of the United States are coming to realize that the fundamental forces which have shaped their society up the present are disappearing.... Ob1·iously in attempting to indicate e\-en a portion of the significant features of our recent history we have been obliged to take note of a complex of forces. The times are so close at hand that the rela­tions between e1·cnts and tendencies force themselves upon our attention. \\'e have had to deal with the con­nections of geography, industrial growth, politics, and government. With these we must take into consideration the changing social composition, the inherited beliefs and habitual attitude of the masses of the people, the psychology of the nation and of the separate sections, as well as of the leaders. We must see how these leaders are shaped partly by their time and section, and how they are in part original, creati1-e, by virtue of their own genius and initiati1-e. We cannot neglect the moral tendencies and the ideals. All are related parts of the same subject and can no more be properly understood in isolation than the movement as a whole can be understood by neglecting some of these important fac­tors, or by the use of a single method of investigation Whatever be the truth regarding the European history, American histon is chiefly concerned with social forces shaping and reshaping under the conditions of the natio~ changing as it adj us ts to its environment. And this em·ironment progressi1·ely reveals new aspects of itself, exerts new influences. and calls out new social oro-ans and functions." . b hDUSTRIALIZATIO:\' A:\'D THE GEOGRAPHIC DISPERSION OF hDt:STRY Industrialization has come to be recognized as the basic economic problem not only in Texas but in Ala­bama, even in Florida, as well as in such far-off coun­tries as Japan or India or Italy, to mention only a few where industrialization has been going on for relatively only a short time. Industrialization is inherently dynamic; it is based primarily upon the large use of inanimate energy. So inclusive are the ramifications of industrialization that it weaves into its own design the static features of economic life. Industrialized countries are activating regions in modern economy; they arc regarded as hav­ing superior advantages, and generaily they do, as con­trasted to the inherent disadvantages that characterize raw material or colonial economics. Industry in the age of steam was necessarily central­ized; the age of steam, particularly the 19th century, was marked by the rise of vast concentration of economic control, and the control always resided in the then industrialized countries. There occurred, too, the parallel growth of vast agglomerations of population-of urbani­zation in the railway era, which was but another expres­sion of the age of steam. During the first quarter of the 20th century, and despite the tremendous havoc wrought by the Great War, there arose a growing realization of momentous changes in our economic life. Great technical changes in the wide fields of electrical progress and in industrial chemistry were opening up wide vistas in a new world of industry, rendering necessary new appraisals of the economics of natural resources, a11d indicating new trends as new forces and new factors entered the industrial picture. The Depression forced anew the challenge of a rapidly changing America-a challenge of such broad magnitude, the currents of which fiow so deep, that the future course of America will necessarily be determined to a large degree by the manner in which the challenge is met. These challenges are not only national problems of vast import; they are challenges that have to be met by the various major sections of the country, by the States within these sections or major regions, and by individual communities within the States. These chal­lenges were envisioned by F. J. Turner more than a quarter of a century ago when he said: "It is necessary next to notice that in the midst of all this national energy, and contemporaneous with the tendency to turn to the national government for protection to democracy, there is a clear evidence of the persistence and the development of sectionalism. Whether we observe the grouping of the votes in Congress and in general elec­tions, or the organization and utterances of business leaders, or the association of scholars, churches, or other representatives of the things of the spirit, we find that American life is not only increasing in its national intensity but that it is integrating by sections. In part this is due to the factor of great spaces which make sectional rather than national organization the line of least resistance; but, in part, it is also the expression of the separate economic, politi<"al, and social interests and the separate spiritual life of the various geographic provinces or sections. The votes on the tarilT, and in general the location of the strongholds of the Progres­sive Republican movement, illustrate this fact. The difii­culty of a national adj ustrnent of railway rates to the diverse interests of different occtions is another example. Without attempting to enter upon a more extens~ve dis­cussion of sectionalism, I desire to simply pomt oul that there are evidences that now, as formerly, the separate geographical intere:"ts ~1ave thei.r le~der~ and spokesmen that much Co11g.-rcs,;1011al leg1slalwn is de­ ' I . termined by the contests, tr i lllll p 1s, or 1'0111 promises between the rival section~. and that the real federal relations of the United States are shaped by the inter­play of sectional with national forces rather than by the relation of State and \"ation. As time got's on and the Nation adjusts itsdf more durahly to the conditions of the difTering geographi<' ,;cction" which make it up, they are cominrr lo a new $clf-l'o11sl'inus11c:.6 per uniL. 54,847 203,177 306,306 32 Rails -------------28.8 40 Utilities ---------­77.9 31.2 78.8 30.0 80.9 Average Unfilled Orders per Unit, End of Montb.____615,612 611,772 637,088 NoTI: from Standard• Stathtlc1 Co., Ino. Non: FrGm Southern Pine Auociation. DECEMBER RETAIL SALES OF INDEPENDENT STORES IN TEXAS December, 1938 Year 1938 Number Percentaa:e Chance Number Percenta1e of in Dollar Salea of Cbanre in Firmt from from Firm• Dollar Salee Re· Dec. Nov. Re· from Year •ortiaa: Dollar Sales 1937 1938 )tOrtin1 Dollar Sales 1937 TOTAL TEXAS....-----------------------------------1,171 $22,321,654 + 0.3 +34.8 1,117 $177,579,994 -6.6 TEXAS STORES GROUPED BY PRODUCJNG AREAS: DISTRICT 1-N________________________________ 69 643,616 7.2 +2.7.5 67 6,063,838 -17.4 Amarillo....-------------------15 275,436 1.4 +48.4 15 2,133,456 -14.3 Pampa...-------------------------12 195,607 -20.7 + 7.2 12 2,157,864 -25.8 Plainview------------------------·-----------13 65,881 -11.7 + 16.9 13 701,272 -8.4 All Others______________________ 29 106,692 + 11.5 +33.0 27 1,071,246 -9.1 DISTRICT 1-S_________________________________________ 20 572,723 -23.7 + 18.8 19 4,794,907 -9.3 Big Spring _______________________________________ 7 114,000 -13.2 +25.4 7 1,060,134 -13.8 Lubbock..-..---------------------------------------10 432,993 -27.4 + 18.6 9 3,520,504 -7.5 All Others ---·········--------------------------------3 25,730 + 8.5 -0.7 3 214,269 -15.5 DISTRICT 2_________________________ 103 927,552 -3.7 + 15.6 97 8,428,488 -5.4 Abilene...--------------------------------------17 289,157 + 1.4 +38.4 16 2,296,430 -10.6 Childress...----------------------------------······ 3 15,035 + 0.3 -10.6 3 192,140 +10.9 Vernon ------------------------------····-··········----7 48,503 -12.2 + 15.7 7 438,915 + 1.9 Wichita Falls_________________________________________ 17 246,695 + 0.6 +10.5 15 2,298,226 + 1.0 All Others___________________________________ 59 328,162 -9.6 + 5.4 56 3,202,777 -7.4 DISTRICT 3 -----------------·-····-··--------------------39 373,600 + 9.3 +16.0 38 3,424,705 -11.4 Brown wood_____________ ----····-··---------------8 64,823 + 17.5 + 17.9 7 440,813 -17.7 Eastland______________________________________________ 7 23,712 +27.3 +28.0 7 217,537 + 7.2 Stephenville____________________________________ 6 53,712 + 7.4 +28.2 6 450,315 -12.1 All Others .·-------------·····----------------------18 231,353 + 6.0 + 12.0 18 2,316,040 -11.3 DISTRICT 4 -----------------------------------------------287 7,939.893 + 2.6 +44.1 274 58,321,294 5.7 Cl eburne______________________________________ 9 56,686 + 2.6 +52.6 8 399,763 9.1 Corsicana...---------------------------------9 94,412 + 0.3 +51.9 9 676,994 -9.9 Dallas ----------------------------------------52 4,436,614 + 0.2 +46.7 46 31,987,850 -5.3 Denison___________________________________ 8 52,105 +28.3 +35.8 8 465,987 -0.1 Ennis -----------------------------------------· 7 29,874 -13.6 +17.9 6 290,321 -17.6 Fort Worth --------------------------~------------55 1,988,107 + 4-.5 +51.7 52 13,383,156 -3.4 Sherman___________________________________________________ 7 46,848 -11.3 +27.1 7 486,523 -12.1 Taylor_____________________________________ 7 57,631 +22.8 + 0.8 7 540,928 -2.0 Temple...·--------------------------···-··--···-------11 76,078 + 1.8 +31.8 11 627,730 -6.3 Waco ---····----------------------------------· 29 555,535 + 5.2 +51.2 28 4,101,346 6.1 - All Others ----------------------------···-·---93 546,003 +13.6 +10.7 92 5,360,696 -12.2DISTRICT 5 _________ -------.. ---------------------118 1,236.588 -2.2 +22.5 114 10,838,656 -12.0 Bryan ----------------------···-------···-···········-···-9 85,976 + 9.3 +25.3 9 755,676 + 4.5 Henderson.·---------------------------·-··········----·------5 90,461 -19.6 + 17.8 4 740,618 -24.6 Longview____ -------------------------------------------······ 8 68,127 -13.8 +19.0 8 653,876 -16.0 Marshall .... -----------------------------------· 11 95,425 -4.1 +56.2 11 665,004 -7.8Nacogdoches.._________________ ---------·-------------------­ 5 76,567 +22.4 + 6.5 4 613,090 -3.5 Tyler ---···-·· -------------------.. _________ .. __ 19 315,365 2.5 +45.0 19 2,753,519 -13.6All Others ·--------------·-··---------------------­ 61 504,667 0.9 +10.7 59 4,656,873 -11.9 DISTRICT 6 . -------··-····-····-····---------------­ 41 1,401,999 9.0 +30.6 38 11,614,591 -9.4 El Paso ··-----------------------------------­ 29 1,301,581 9.1 +32.5 28 10,651,959 -9.2 All Others -------------------------------12 100,418 DISTRICT 7__________________________________ 8.7 +10.2 10 962,632 -11.4 56 466,281 + 2.8 +28.4 56 4,133,954 5.7 Brady.... ------------------------------------------------6 25,425 +12.9 +12.0 San Angelo_________________________________________ 6 272,643 + 2.7 14 234,398 -0.7 +41.5 14 1,921,969 3.4 All Oth ers -------···· ····-····-··········· _____ ......... 36 206,458 + 5.8 +18.1 36 1,939,342 8.8 DISTRICT 8 ___ ·····-----------· ............. -------------­ 219 3,656,082 + 5.8 +33.l 207 30,184,347 -4.9 Austin ·-···········------------------·---------------23 732,099 + 10.3 +38.8 23 5,655,848 + 2.7 Commerce...____________________________________________________ 5 17,999 + 14.0 +14.2 4 132,975 + 4.4 Corpus Christi...________ ---------·····-------·-·· 11 85,544 -11.5 + 9.8 10 896,154 -18.7 Cuero ____ . ---------------·········----------------8 46,041 + 8.8 +25.2 8 401,485 + 3.7 Lockhart ----------------------------------_________ 8 74.287 +18.9 +21.3 8 653,560 -16.2 San Antonio..·-···------------------------------·-·· 77 2,119~385 + 3.8 +37.7 72 16,939,673 -5.1 San Marcos_________ -----------------------------------­ 6 28,727 -16.0 + 17.8 6 326,512 -16.9 All Others ·------·-····· ······--·-············-------------81 552,000 + 11.2 + 18.8 76 5,178,140 7.4 DISTRICT 9------------------------·-·······-----------162 4,654,523 + 2.3 +37.0 154 35,482,816 2.6 Beaumont____________________ ······---------------------­ 19 488,039 + 2. 5 +54.9 19 3,410,831 6.1 Galvestoit..........------------· -··------------------19 363,913 0.6 +18.8 16 2,864,804 8.7 Houston ________ ------------------------------------­ 55 3,118,147 + 3.7 +42.1 53 22,603,355 0.6 Port Arthur.........._______________ .. --------·-···-----­ 19 322,323 6.2 +32.l 18 2,778,516 7.5 Victoria...---------------------------------------­9 67,536 +39.0 +26.l 8 602,139 + 1.2 All Others...-----------------------------------------41 294,565 -3.9 + 3.1 40 3,223,171 2.9 DISTRICT 10_____________ -----------------·-----­ 57 448,797 -11.5 +27.9 54 4,292,398 -16.3 Brownsville_________________ ········---------···-··­ 10 80,914 -19.6 +61.9 10 749,361 -19.7 Harlingen -------------------------------------------9 71,498 -11.4 +39.1 9 698.658 -23.0 Laredo.._ ___________ ---·····-------·-···-·····---­ 5 122,431 -18.9 +32.6 5 973,824 -23.9 All Others________________________________ 33 173,954 -0.5 + 10.7 30 1,870,555 -6.9 See map on page ll, December 24. 1938, issue, showing crop reporting districts of Texaa. NoTE: Prepared from reports from independent retail stores to the Bureau of Business Research, coOperating with the United Sta tee Department of Commerce. EMPLOYMENT AND PAY ROLLS IN TEXAS ESTIMATED EMPLOYMENT AND PAY ROLLS IN MANUFACTURING INDUSTRIES, DECE IBER, 1938 COMPARED WITH NOVEMBER, 1938, AND DECEMBER, 1937 Estimated Number Estimated Amount of Workers Employed of Weekly Pay Roll December November December December November December 1938* 1938t 1937 1938° 1938t 1937 All Manufacturing Industries_ __________________~---------113,710 113,290 120,930 $2,539,116 2,506,060 $2,621,474 Food Products Baking__________ __________________________ ______________________ 6,304 6,288 6,338 138,5% 140,389 134,738Beverages, Carbonated ___________________________ 1,614 1,655 1,379 26,491 27,272 21,005 Confectionery_______________________________________________ 1,144 1,120 1,081 14,472 13,103 13,126Flour Milling ______________________ __________________ 1,676 1,671 1,993 34,064 34,529 45,816Ice Cream ________________________________________________ 402 441 481 9,161 9,586 9,971Meat Packing________________________________ 3,736 4,035 4,243 94,762 %,062 107,334 Textiles Cotton Textile Mills_ _____________________________________ 3,827 3,948 3,874 49,512 51,047 50,933 Men's Work Clothing ___:____________________________________ 3,215 3,274 2,764 25,091 28,062 18,695 Forest Products Furniture____________________________ -------------------------1,639 1,681 1,586 28,477 26,820 26,596 Planing Mills___________________________________________ 2,257 2,277 1,886 33,157 33,640 29,986 Saw Mills -----------------------------------------------------10,518 10,550 10,187 124,570 124,458 123,501 Paper Products_________________________________________________ 644 634 577 11,002 10,500 9,817 Printing and Publishing Commercial Printing______________________________ 1,851 1,797 1,872 49,493 49,682 53,518 Newspaper Publishing _____________________________________________ 4,204 4,062 4,191 127,2% 117,388 123,271 Chemical and Allied Products Cottonseed Oil Products __________________________________________ 2,239 2,0% 2,822 28,304 27,021 39,610 Petroleum Refining _____________________________________ 18,820 18,771 18,904 686,290 687,115 673,310 Stone and Clay Products Brick and Tile _______________________________________________ 883 703 707 -12,4% 9,8% 8,518Cement. _______________________________________________ 1,146 1,159 1,402 23,607 24,836 27,780 Iron and Steel Products Foundries, Machine Shops __________________________________ 9,481 9,424 10,838 257,932 244,462 288,118 Steam Railroad Repair Shops ----------------------------------4,792 4,555 6,082 133,191 127,188 164,223 Structural and Ornamental Iron_ _____________________________ 1,408 1,351 1,187 28,026 27,675 28,061 CHANGES IN EMPLOYMENT AND PAY ROLLS IN CHANGES IN EMPLOYMENT AND PAY ROLLS IN NONMANUFACTURING INDUSTRIES, SELECTED CITIES AND FOR THE STATE, DECEMBER, 1938 DECEMBER, 1938 Employment Pay Rolls Employment Pay Rolts Percentage Change Percentage Change Percentage Change Percentage Change from from from from from from from from Nov. Dec. Nov. Dec. Nov. Dec. Nov. Dec. 1938 1937 1938 1937 1938 1937 1938 1937 Crude Petroleum Production -2.6 -9.4 -2.7 4.4 Abilene ----------------------­3.2 + 5.5 + 0.1 -1.3 Quarrying ----------------------­-0.9 -15.3 -0.7 7.3 Amarillo ----------------------§ -24.9 + 2.7 -30.8 Public Utilities --------------­+ 1.1 -3.6 + 0.6 1.3 Austin --------------------------+ 2.2 + 4.1 + 1.3 + 4.4 Retail Trade ----------------­+20.l -0.1 + 13.9 1.8 Beaumont -------------------1.1 7.8 3.1 -7.6 Wholesale Trade -----------­t -1.7 + 0.5 2.9 Dallas ------------------------+ 6.1 1.5 + 4.4 -5.3 Cotton Compresses -----------3.5 -31.5 3.5 -32.9 El Paso _ -------------------+ 3.5 3.1 + 3.9 -11.0 Dyeing and Cleaning__________ _ 2.5 + 5.9 2.3 + 8.6 Fort Worth ____ ------------_ 2.6 3.9 0.1 -0.7 Hotels ------------------------------+ 0.2 2.7 0.2 3.4 Galveston _ _____ ------------+ 0.6 -16.5 + 1.7 -12.7 Houston __________________ _ Laundries ---------------------------0.2 0.5 0.8 2.9 + 2.0 + 4.9 + 1.9 + 8.2 Port Arthur ---------------__ _ + 1.2 -9.3 + 3.1 -4.8 San Antonio -------------------+ 9.9 + 1.9 + 6.6 + 2.6 Sherman _____ --------------____ _ § -10.8 1.6 -7.5 Waco _________ ------------------+ 4.9 + 6.1 + 6.8 + 11.1 Wichita Falls ----------------­8.7 -25.0 -10.0 -19.1 STATE -----------------------+ 3.3 -4.2 + 2.1 -3.4 •Preliminary. ht~vised. !Lese than 1/ 10 of on e per cent. §No change. Prepared from reports from representative Texae f'etabliehmente to the Bureau of Business Research, coOperatin~ wit h the United States Bureau of Labor Statietics. BANKING STATISTICS On Millions of Dollars) December, 1938 December, 1937 Dallas United Dallu United Di1trict State• Di1trlct St1ttea DEBITS to individual accounts_______________ 827 36,867 843 36,772 Condition of reporting member banks on-December 28, 1938 December 29, 1937 AssETs: Loans and investments--totaL_________________ 536 21,649 509 21,402 Loans-totaL ___________________________ 247 8,430 253 9,387 Commercial, industrial, and agricultural loans___________ 162 3,843 161 4,601 Open market paper_____________________________ 1 328 3 461 Loans to brokers and dealers in securities______________ 3 848 3 894 Other loans for purchasing or carrying securities_________ 14 560 15 635 Real estate loans_________________________,___ _ 21 1,169 2.1 1,165 Loa ns to banks--------------------------------------115 66 Other loans.---------------------------·-----------------------------· 46 1,567 50 1,565 U.S. Government obligations ·-·----------------------------189 8,266 178 8,018 Obligations fully guaranteed by U.S. Government_________ 44 1,732 28 1,116 Other securities________________________________________________ 56 3,221 50 2,881 Reserve with Federal Reserve Bank________________________ 109 7,057 113 5,427Cash in vaul t..___________________________________________ 12 489 12 355 Balances with domestic banks.·------------------------------· 205 2,410 158 1,886 Other assets--net________________________________________ 27 1,279 28 1,267 LrAJJILITIES: Demand deposits--adjusted____________________________ 416 15,986 391 14,431Time deposits__________________________________________ 134 5,160 128 5,205 U.S. Government deposits____________________________________ 38 637 22 691 Inter-bank deposits: Domestic banks.--------------------------------------­210 6,061 191 5,090 Foreign banks·---------------·-··-··-----------------· 1 519 442 Borrowin gs ---------------------------------------------1 9 Other liabilities ___________________________________ 6 834 6 843Capital account__ _________________________________ 84 3,686 82 3,626 NoTE: From Federal Rc1erve Board. Debits for tl-e Dallas Federal Reserve District during the year 1938 were $9,830,343,000, LUI compared with 810,391,740,000 during all Federal Reserve Districts during the year 1938 were $403,353,419,000, u compared with $467,199,815,000 during the year 1937. November, 1938 Dallao United District Statee 749 29,061 November 30, 1938 528 21,325 242 8,317 159 3,866 1 338 2 712 14 572 21 1,169 117 45 1,543 193 8,106 37 1,682 56 3,220 106 7,337 10 443 218 2,460 27 1,306 419 16,013 133 5,124 31 534 216 6,212 508 1 7 795 83 3,684 the year 1937. Deblta for CONTENTS PAGE Announcements: The Directory of Texas Manufacturers _. ----------------··--------------·-······-·-·····-··--···················--···················· 9 Business Review and Prospect, F. A. BuecheL_________________________________________________________________________________________................. 3 Cotton, A. B. Cox·---------·----------·-···-···------------------.. -----·-·····--············-········· ----··------------------·············-··-·······--··········--·--·········· 8 Financial, Jan1es C. Dolley ··-···---------·--···-------···-··-······-·--············--··-·····----·---·--------------······-····-··-···-··-···-······················-4 The Economic Problems and the Texas of Tomorrow, Elmer H. Johnson _________ ·----------------·-·--·----------------·-·----------······ 5 LIST OF CHARTS Indexes of Business Activity in Texao ·------····----·---·----------·---·-·---·-----·-··------------------------···-··--·-··-··· -----------------· -·------------------·---·-·-·--·-2 Milk Ecpiivalcnt of Crramery Butter ...... .. ·-··-· -····-..... ·-----·------·-··------------------·--·--------·-------···--·-----··-··-.. -·-·-·-··-----··---· 1 UST OF TABLES ~[~\!,i~~E:~;;~~1.~j~J E;,;::~:::~~~:L=:~~~=-:;~~=~~~~= ~;;-;;~~:;;=~;;-;~~: ll Commercial Failures._______ _ __ ___ ........ ________ --------·-------------------------------------------------------------_ __ ______ _ __________________-----------------13 Commodity Prices ·---....... ····-·-·--·-· ___________ ----------------·-------------_________ -------------------------------------·------·-------------13 Cons11mption of Electric Power __ --------------------------------------_ ---------­