~-..... . ,.::..;;•"\\"-l l vf.'i;i::::.-:-., TEXAS Bud':::::~~sR1EVIEW A Monthly Summary of Business a~.?>~~~ ··. ''f/kiJi. t1 ..i ons 1n Texas and the South' est .~J-:-,~--'""~,q_f~T ··,~..!{ S '""-m•~e~~~«' ... ~. 1 ~-~'/' Bureau of~ss Research The University of Texas Ent.ered as second-class matter on May 7, 1928, at the postoffice at Austin, Texas, under the Act of August 24, 1912. VOL.III AUSTIN, TEXAS, FEBRUARY 26, Hl2U No. 1 THE MONTH , Trade and industrial reports indicate that general During the month, 336 new corporations capitalized at ' business conditions in Texas were generally encouraging $101,000,000 were organized, by far the largest number during ·the first month of the year. WhiJ.e there are a on record. On the other hand, commercial failures were few unfavorable features, notably some credit strain and the fewest for any January since 1920. overproduction of oil, the outlook is rather promising for Freight car loadings are running 1 p.er cent above those the next few months at least. Industrial curtailment this of last year at this time and foreign trade is holding up winter has been less than usual so that most industri-es unusually well. The lumber industry reflects further are operating on a little higher level than they were a improvement, but the petroleum situation weakened as year ago at thi,;;i time. Moreover, bank debits show a the result of overproduction and increased stocks of large increase ·~md trad.e at wholesale and retail is in crude. Cement plants curtailed production less than good volume. Lab or conditions in the State for the most part con­tinue favorable. There was an increase of 2 per cent in ) the number of workers em­ployed by 469 firms in 9 of the larger cities reporting to the Bureau of Business Re­search on February 15 as compared to January 15. The gain is about in line with the usual seasonal increase. The clerical force was increased by 1.3 per cent whereas there was a gain of 2.4 per cent in the number of workers com­pared to last month. T,he gain in workers reflects the expansion taking place in in­)dustry. Even though the credit sit- usual so that stocks on hand show a gain. Textile mills General business and industrial conditions in Texas and the Southwest are encouraging. Curtailment in most industries was less than usual this year and spring expansion is al­ready under way. Possibly the declining trend in building and over-production of pe­troleum are the least hopeful influences in the pres·ent outlook. Aside from the rather severe credit situation, the underlying finan­cial conditions are sound. Speculation con­tinues in the stock market but inflation has not yet taken hold of commodities. Agricul­tural conditions are fairly good and prospects for the livestock industry are bright. So far as can he determined at this time, signs of a depression are still lacking. experienced a f a i r 1y good month, although the large de­cline in unfilled orders may indicate curtailment within a short time. Building permits show a large decline while contemplated engineering and construction projects w er c relatively small. Livestock in most sections of the State are wintering well and losses so far have been small. Shipments to Fort Worth fell off season­ally. Conditions in agricul­ture are fairly good. Winter grains are growing well in most districts but farm work has been delayed somewhat by wet weather. Shipments of fruits and vegetables are uation is tight, financial conditions remain sound. Higher much heavier than those of last year. money costs have already checked building operations WHOLESALE PRICES and it is but a question of time until other industries will feel the effects, provided the prevailing high rates Wholesale pri<:es wer.e mostly higher. All grains, flour, continue. Bank debits for the four weeks ending Janu­rubber, metals and hogs advanced, while sugar, hides, ary 30 in the D a 11 a s Federal Reserve District were cattle, petroleum, and leather products declined. The $924,000,000 compared to $797,000,000 for the same index of the National Bank of Commerce in New York period of 1928. Loans and discounts at member banks City increased from 87.6 in December to 88.9 in Janu­were considerably increased and borrowings at the Dallas ary, and Dun's averaged 194.2 on February 1 against Federal Reserve Bank were nearly six times those of 192.4 the month previous. Professor Fisher's w.eekly last year in January. Interest rates generally were index gained .7 of a point in the month, and the Annalist )higher. Speculation was renewed in the stock market, index went up .3 of a point. The Bureau of Labor )many issues being carried to new highs for all time. Statistics all-commodit~· index based on 1!)26 as equal Some little speculation has already entered the commod­to 100 stood at 97.~ in January <:ompared to !16.7 in ity markets, a most undesirable development at this December. Brad~trcet's r·emaincd practically un<:hanged 011 Fcbrnary 1 at 12.98. time. FINANCIAL Credit rnnditinns (' o n tin u e rather unfavorable. Despite the fact that time loans eased a little during the early part of January, the declin.e in rates was consid­erably h'ss than nonnal. Call rates also were slightly lowe!' for the first three weeks of the m o nth . The slightly lower rates were due to the return of currency from tirtulation and the payment of year-end loans. Call rnte:-; fell to G per cent in the first part of January, but the n'1wwal rnte advanced to 8 per cent and 9 p.er cent at ihP close of the month. Bankers acceptances were qunL<'d at 5 per cent or the same as the r·ediscount rate at Ow New York Federal Reserve Bank. ThiH Hituation usually foreshadows an advan<:e in the rc<. The outlook over the spring months is for firm lo higher interest mies. The inerease in the ratp at the Bank of England to 5 % ppr cent early in Febrnary immediately eaused gold to return to Lon­ don. No change in the 4 % per cent rediscount rate was made at the Dallas Federal Reserve Bank. Bank debits show an unusually large gain. Checks cashed in the district for the four weeks ending January 30, according to the Federal Reserve Bank at Dallas, totaled $924,000,000, compared to $7!)7,000,000 for the same four weeks of 1928, a gain of 16 per cent. Member bank borrowings increased from $13,4!l2,000 in December to $1!),000,00 in January. This compar.es with only $3,445,000 at the end of January a year ago. Govern­ment securities h<'ld by member banks amounted to $!)3,000,000 against $72,000,000 at this time last year. Demand deposits were the same as those in January, 1!)28, but wer.e $4,000,000 under the amount reported in December. On the other "hand, time deposits increased from $140,000,000 in December to $14:!,000,000 in Jan­uary, a new high record for the distriet. Loans and dis­counts at memher banks totaled $:W4,000,000 compared to $342,000,000 in January, 1!l28. It looks, therefore, as if debts have not been liquidated to the extent that had genernlly been supposed. The eontinu.ed upward trend in time deposits is a favorable feature. FINANCIAL STATISTICS FOR THE DALLAS FEDERAL RESERVE DISTRICT~ J anuary December January 1929 1928 1928 Bank Debits (four weeks> ------------­--­--------------------­---------------$ Government securities owned, end of month______________________ 924,000,000 93,000,000 909,545,000 94,714,000 $797,000,000 72,000,000 Member bank borrowings, end of month............................ Demand deposits, end of month____________________ _____________________ 19,000,000 313,000,000 13,492,000 317,000,000 3,445,000 313,000,000 Time deposits, end of month.................................::............. 143,000,000 140,000,000 115,000,000 •From the Federal Resene S79tem. DEPARTMENT STORE SALES 'l'rncle at retail reflects a large seasonal decrease from that of Deeember but a small increase over sales in Jan­uary last year. Sales of 74 department stores located in 24 eitit'i; of the State r.cporting to the Bureau of Busi- JANUARY TENDENCIES IN TEXAS DEPART­ MENT STORE SALES Number Percentage Change from of January December Stores 1928 1928 Abilene 3 + 2.9 -50.7 Austin 3 + 7.0 -55.9 Beaumont 5 -1.9 -56.7 Dallas 6 -1.0 -51.1 El Paso 3 + 4.2 -49.8 Fort Worth _ 8 + 2.9 -60.7 Galveston ... 4 + 19.7 -55.7 Houston 8 + 0.6 -50.4 an Antonio . 10 + 0.1 -47.0 Tyler _________ . 3 -9.3 -46.4 All others 22 4.0 -50.0 State ___ 74 + 0.7 -52.2 Sales of 74 comparable stores 1929 1928 January ... . .. ... ---$4,690,000 $4,657,000 December . 9,820,000 •All others include: Amarillo, Brownwood, Cleburne, Cors i~ cana, Del Rio, Denison, Laredo, Marshall, Paris, Pot·t Arthur, San Angelo, Temple, Waco, Wichita Falls. ness Research totaled $4,690,000 in January compared to $4,657,000 in January, 1928, a gain of .7 per cent. Thir­teen of the cities show gains against losses in the other 1L In estimating sales as compared with those of last y.ear, it must be remembered that chain stores and mail order houses a i· e establishing branches in all of the larger cities. In most cases, sales of those stores do not appear in the Bureau's figures. Retail sales in the entire United States in January were 5 per cent above those in January a year ago, according to the Federal Reserve System. The Chicago district with an increase of 1l.2 per cent showed the largest gain, while the Minneapolis district with a de· 1 dine of 5. rt>porting to tlw Bureau of Business Research grantPd building-permits amounting to $7,ll82,000 compared to $!1.(ifi:!,000 in .Janu­ary, 1928, a decline of 17.:! per cent. Fif"t<'t'n l'i!il's shnw ksses, three were unchanged, and fourtt'l'n r('eordL•d g-ain,. the gains and losses being fairly well distributed. It ap­pears, therefore, that building in the ::Hatt' during 1\12!! is likely to he somewhat below the volume in 1!128. How­ever, the outlook for engineering projeets and road work ;s a little more encouraging. Abilene, Cleburne, Dallas, Temple and Tyler show larg·e gains while losses were re­corded in AmariHo, Austin, Del Rio, Fort Worth, Houston, Paris, and San Angelo. Engineering and construction projects Jet in Texas dur­ing January, according to the F. W. Dodge Corporation. t:italed $16,000,000, or a decline of 4 per cent from the amount reported in January 1as t year. Contemplated projects were also smaller. Building costs were slightly higher again due to increases in the price's for some build­ing mater·ials, notably fabricated stel'l. BUILDING PERMITS January December January 1929 1928 1928 Abilene ___________ $ 127,000 $ 62,000 $ 80,000 Amarillo ------·--­Austin ______________ 115,000 190,000 46,000 1,811,000 308,000 592,000 Beaumont -----­ 238,000 918,000 204,000 Brownsville ---­ 46,000 34,000 59,000 Brownwood ______ 167,000 121,000 142,000 Cleburne __________ 365,000 7,000 14,000 Corpus Christi 214,000 97,000 390,000 Cor sicana ________ 45,000 25,000 26,000 Dallas -------------­Del Rio ____________ 883,000 45,000 447,000 26,000 620,000 206,000 ec · 'so 13,000 4,000 -­ -------------­ E l Paso ---------­ 149,000 363,000 101,000 Fort Worth______ 611,000 499,000 1,099,000 Galveston ________ 166,000 251,000 166,000 Houston ----­----­ 2,003,000 4,266,000 2,676,000 Laredo ----------­ 14,000 116,000 14,000 Lubbock ---------­ 453,000 109,000 230,000 McAllen ---------­ 28,000 58,000 28,000 Marshall -------­ 54,000 7,000 33,000 Paris _______________ 4,000 26,000 62,000 ElainYi 126,000 154,000 180,000 Port Arthur ____ 64,000 58,000 60,000 Ranger -----------­ 2,000 41,000 20,000 San Angelo ____ 96,000 400,000 397,000 San Antonio -­ 1,058,000 645,000 1,137,000 Sherman -------­ 15,000 7,000 160,000 RyG 33,000 9,000 8,000 SweetwaterTemple ______ ---­_____ 84,000 213,000 40,000 71,000 53,000 108,000 Tyler 86,000 36,000 25,000 Waco 128,000 224,000 233,000 Wichita Falls__ 147,000 131,000 222,000 Total -----------$ 7,982,000 $11,109,000 $ 9,653,000 STOCK PRICES Shortly after the beginning of the ne\1· year, the stock market experienced anothl'l' period of bullish enthusiasm which has continued almost without intenuption up to the present time. Buying was based largely on the easier credit situation caused by the return of funds to the banks after the large year-end payments were made. Then, too, industrial curtailment was less than expected and practically all the business forecasts were unusually optimistic for the first half of the year at least. As a result, praetirally all g-rnups of stocks were elevated to new highs, the oils and sugars being the exc.eptions. Trading all during th e• month was unusually heavy. The Bureau's indu,:;trial index advanced from 255 in DeC'ember to 2fi-t in .fanuary compa1·pcl to 245 in Janu­ary, I ~128. F'ivP o[ the i:-;sue,.; comprising the index went up while two, Tl•xas CorporaLio11s and Texas Pacific Coal and Oil, dPC'li1wd. The rails index averaged 216 in .January against 212 in lkc<•mber and 183 in .January INDEX OF INDUSTRIAL STOCKS Average High 1923-24-25=100 1929 1928 1927 1926 1925 January ----------------------264 245 167 142 108 February -----------------·--233 174 146 112 March ------------------------239 184 136 110 April --------------------------255 194 135 106 May --------------------------260 199 137 116 June --------------------------243 203 146 120 July ---------------------------246 208 151 124 August -----------------------247 210 154 127 September 259 224 153 126 October 257 225 154 135 November 262 226 159 144 December -----------------255 238 164 139 a year ago. Six of the 9 stocks making up this index were h i g h e r than in December and 3 were slightly lower. In constructing this index of rail and industrial stock prices, the Bureau of Business Research aimed to select companies which are representative of conditions in Texas and other Southern States and at the same time listed on the New "l"9rk Stock Exchanire where quotations are available for a number of years back. The anrqe weekly high for the years 1923-24-l"li is the base equal to 100. Included in the industrial stock inde1 •re Coca Cola, Freeport-Texu, Gulf States Steel, Tennessee Coppe1 ~nd Ch<·mical, Texas Company, Texas Pacific Coal and Oil, and Texas Gulf Sulphur-The railroad1 used in the index nre the Atchison, •ropeka & Santa Fe; Chicaao, Rock Island & Pacific; Gulf, Mobile & Northern; Missouri, Kanau & Texas; Missouri Pacific; New Orleans, Texas & Mexico; St. Louie & :Southwestern ; Southern Pacific; and Texas Pacific. INDEX OF RAILROAD STOCKS Average High 1923-24-25=100 1929 1928 1927 1926 1925 J anuary --------------------216 183 145 136 118 February --------------------178 157 133 123 March -------------------------183 164 125 123 April 191 175 126 118 May 199 179 127 122 June 193 190 133 117 July 197 192 136 119 August ------------------------203 190 140 125 September ---·--------------215 189 144 126 October 215 186 138 124 November 221 182 139 126 December ------------------212 183 143 133 SO~NSTOCK PRI CE INDEX or ATerage Monthly HiGhs Average Month 1923-24-25 ~ 100 2801-----t __,,__~--!~~~~~~~~,r~~; -- ;,-t-~~~~~~~~---i I ,/ /;-...,.,,,;' 190,l-~~~~~~~~~-1-~~~~~~~~~~l--~~../-~,,-~-=~~--1~~~~~-=-~~~~-+~~~~--~~~~--1 1 ----........_ 1 9 2 5 1 fl ~ G 1 9 CEMENT Cement plants WPr<' operating at about the same rate in January as the:-' \\'<'re in lk !'cmher and .January last year. Normally, th<' <'<'nienl i11dustr:--begins curtailing output in Septcmh<•r and t•xpansion gets under way again in MarC'h and ,\ pril. Shipnll'nts also fall of"[ during these months, resulting· in an atTt1111ulation ol" stocks. The sit­uation this year is ahout in line with l'Xpeetations. A total of 4GG,OOO barrels was manufactured by Texas mills in January comparer! to 472,000 barrels in Decem­ber anrl 4Gil,OOO barrels in January, 19~8. Shipments in­ 2 7 l s 2 8 J 9 2 9 creased from :375,000 barrels in December to 459,000 in .fanuary. Loadings in January a year ago were reported at 447,000 barrels. Stocks on hand amounted to 530,000 barrels and were 8,000 barrels above those a month earlier. The gain is a little l<'ss than normal. Stocks increased lG,000 barrels last year and 17,000 barrels 2 years ago from December to January. Markets weakened a little as is to be expected at this season of the year. Demand is also lagging somewhat as n result of the slowing up in building operations. Spring expansion is likely to show some improvement. No changes were made in prices. The basic price on February 1 was $2.25* per barrel in Dallas and $2.35• in Houston, 10 cents a barrel being allowed for cash and 40 cents for cloth sacks where returnable.. *Prices quoted through the courtesy of the Lone• Hlai· Ct•mf'nt Com· pany Texas. THE CEMENT SITUATION* (In Thousands of Barrels) Production -----------------­Shipments ----------------­Stocks --------------­----------­J anuary 1929 466 459 530 December 1928 472 375 522 J anual'y 192 463 447 423 •From the United States Department of Commerce. LUMBER The lumber industry reflects a seasonal expansion dur­ir.g January. One of the most important developments in this industry over the past year has been the very close adjustment of production to demand. Moreover, stocks have been sharply reduced and mill men are cautious about expanding production until unfilled orders and stronger markets indicate the need of increased output. THE LUMBER SITUATION* (In Thousands of Feet) Per cent Change from Jan. Dec. Dec . . 1929 ·1923 1928 Preliminary report of 132 130 Mills mills in the Southwest- Av. production __________ 1,497 1,346 + 11.2 Av. shipments __________ 1,531 1,285 + 19.1 Av. stocks ---------------­ 1,343 1,386 .3 Final report of 29 Texas 33 Mills Mills- Av. production __ _______ 1,928 1,814 + 6.3 Av. shipments __________ 1,890 1,831 + 3.2 Av. stocks ------------------4,497 4,933 -8.8 Av. unfilled orders ___ 1,145 1,149 No change •From the Southern Pine Association. Total production in January of 29 Texas mills reporting to the Southern Pine Association was 55,916,0000 feet of lumber, compared to 59,852,000 feet in December by 33 mills. Average production per mill amounted to 1,928,000 feet against 1,814,00 feet in December, a gain of 6.3 per cent. Average shipments increased 3.2 per cent, or from 1,832,000 feet in December to 1,890,000 foet in January. Average stocks show a further decline of 8.8 per cent while average unfilled orders remained practically un­changed at 1,145,000 feet. Lumber prices were about unchanged to higher during the month. Markets have been steady over the past few months and price changes have been rather small. Quota­tions on yellow pine are slightly above those obtaining a year ago at this time. PETROLEUM Little or no improYcment was rc>cnrdc>. Mon•­over, the market for ful'I oi l <'ontinm•s poor ancl the slack season for gasoline consumption is not nn•r. ])pspitP th<> fact that output has bec>n curtailed in many of tlw larger fields, production reaehl'd a 1ww hiµ:h l"l'l'Ol'1· and 20.0xx,OOO banc•b in .January, 1\128. Dail~· averagP flow inerPa!'ed from 7:!H,OOO barrel;; in Deel:'mber to 7G:l,OOO barn•ls in .January, by far the highi>;;t on record. THE PETROLEUM SITUATION* (Production in Thousands of Barrels) J anuary December J anuary 1929 192 1928 Production- Total -------------------­ 23,671 22,909 20,088 Daily average______ 763 739 648 Wells completed .... _ 624 568 517 Producers _____________ 352 349 2 2 •From the Oi.l W eekly. Field work was also more active. A total of 624 wells was drilled in the State in January against 517 in Janu­ary a year ago. Three hundred and fifty-two of the com­pletions were successful, whereas only 282 wells were pro­ducers in January, 1928. Mid-continent crude prices were reduced from 5 cents to 30 cents per barrel on January 8. Gasoline prices were also reduced seasonally, but quota­tions are still more than 1 cent a gallon above those obtain­ing a year ago. COTTON MANUFACTURING The cotton textile industry of the State was unusually active during January. Practically all mills were operat­ing full time and a number operated night shifts in order to fill orders that were pressing for immediate delivery. However, some unfavorable developments were noted dur­ing the month, which may cause some curtailment later on. The decline in unfilled orders and the falling· off in sales are not encouraging features. TEXAS COTTON MANUFACTURERS REPORT January December January 1929 1928 1928 Mills reporting... 21 21 20 Bales of cotton used ------------------9,188 7,277 8,882 Y:ards of cloth- Produced ___ -­ 6,957,000 6,136,000 7,166,000 ales -·---­ _________ 4,250,000 3,961,000 3,799,000 Unfilled orders (end of period) 6,397,000 10,032,000 8,030,000 Active spindles 206,000 196,000 201,000 Spindle hours __ 72,817,000 85,680,000 57,719,000 During the month, 21 Tr xas mills u;;ed ~1,118 bale;; of cot­ton and procluced G,H!i7,000 yards <•f cloth. Last year in .Januar~·. t\10 sanw mills manufactured 8,882 bales of cotton into 7,166,000 yards of cloth. Sales totaled 4,250,000 yards against 3,961,000 yards in December and 3,79fl,OOO yards in January, 1928. Unfilled orders d·eclined sharply for the first time since last summer. Bookings decreased from 10,032,000 yards in December to 6,397,000 yards in January, a decline of more than one-third. At the present rate of production, unfilled orders are less than one month's run. Current prices for doth anw York Ciiy for Fcbrnary was less bullbh than gencrall.v expected. Produ('tion of doth amountl'