VOL.III AUSTIN, TEXAS, MARCH 27, 1929 No. 2 THE Business and industrial conditions during February were conparatively good. In some industries, expansion has not been as great as it was last year, but considera­tion must be given to the facts that winter curtailment was small and present operating schedules are on a high level. Weather conditions retarded farm work in some districts and many of the winter crops were damaged by low temperatures. However, better growing weather over the past two or three weeks has largely overcome the set­back. The financial situation is fundamentally sound despite unfavorable credit conditions. Bank debits con­ tinue above those of last year, but wholesale and retail trade fell off somewhat. While there are some retarding in­fiuenees in the business pic­ture at the present time, the outlook for the next month or two is bright. Increased industrial activity is reflected by the gain in the number of workers employed :luring the month. There were 2 per cent more employees on the payrolls of 469 firms lo­cated in 9 industrial centers of the State on February 15 than on January 15. The number of workers increased 2.5 per cent while the clerical February witnessed some further seasonal expansion indicating that business and in­dustrial conditions in Texas are generally fa­vorable. Although some developments, nota­bly lower building permits and smaller de­partment tore sales, are discouraging, greater activity in other lines largely offsets the loss. Better weather in the latter part of the month improved agricultural conditions and per­mitted farmers to do considerable work. Cold weather and dry ranges caused livestock to lose flesh but actual losses have been small. The credit situation is still strained and spec­ulation continues in the stock market. Finan­cial conditions remain sound. force was increased by 1.3 per cent. Very few com­plaints of unemployment are heard. The outstanding development in the financial situation during the month was the increase in· interest rates. Moreover, rates are expected to continue firm and ~ven higher quotations are likely before summer. Bank debits in the Dallas Federal Reserve District for the four weeks ending February 27 were $856,641,000 c o m p are d to $752,894,000 for the same period of 1928, an increase of 13.8 per cent. Loans and discounts at member banks de­creased seasonally but borrowings at the Dallas Federal Reserve Bank were more than 12 times those of last year in February. Speculation continues unabated in the stock market and some evidence of commodity inflation waa witnessed-an undesirable feature. New corporations organized reflect a sharp decline. During the month, 231 corporations c a p i ta 1 i z e d at fl6,000,000 were chartered, against 238 companies with MONTH capital of $101,000,000 in February a year ago. The num­ber of commercial failures was the fewest for any Febru­ary since 1920 and liabilities were the smallest on record. Car loadings in the southwest are running consistently above those of last year and the second quarter require­ments are expected to show an increase. The volume of foreign trade is above foreign business a year ago but coastal trade is a little less active. Lumber mills are slowly expanding output. On the other hand, cement plants.were less active and the building industry showed definite signs of curtailment; engineering and construc­ tion projects fell off. The pe­troleum industry continues to lag. Textile mills operated on full time, but yarn and cloth markets remain rather poor. Trade at wholesale and re­tail was rather slow, sales of 80 dpartment stores located in 26 cities of the State show­ing a decline of 4.1 per cent compared to sales in Febru­ary, 1928. Wholesale prices remained about unchanged. Agricultural prospects are generally encouraging. Prices for many farm products are above last year's levels and an upward trend is likely over the spring months. Fall grains are making fairly good growth and winter truck crops are moving to market rapidly. Until the past week or two, most of the early planted cotton had not germinated due to dry soils. Farm work generally is late. Livestock deteriorated sharply druing the month due to dry ranges and cold weather. As a result, con­siderable feeding was necessary. However, losses have been small and prices advanced so that the outlook is rather bright. WHOLESALE PRICES Wholesale prices fluctuated between narrow margins with a trend towards slightly higher levels. Cotton, grains, hogs, metals, coal, cotton textiles, and rubber were higher. On the other hand, poultry products, wool, sheep, petroleum products, meats, leather, and hides declined. The Annalist index advanced from 144.8 in the first week of February to 146.7 in the first week of March, and Fishers index gained .7 of ~ point to reach 98.4. Dun's remained practically unchanged on March 1, at 194.3 while Bradstreet's increased fractionally to 13.00. The Bureau of Labor Statistics all commodity index based on 1[)26 as equal to 100 averaged 96.7 in February against 97.2 in January and 96.4 in February last year. Price trends, especially in the farm group, are expected to be upward over the next few months. FINANCIAL Possibly the outstanding development in the financial situation during February was the increase in interest rates. Shortly after the beginning of the month, call rates in New York City fell to around 7 per cent. This rate was in effect only a day or two when banks began calling loans resulting in h'gher rates. The trend was steadily upward until the month-end when the rate reached the unusual level of 12 per cent. This rate was reached once or twice last fall; previous to that time, the 12 per cent level had not obtained si11ce 1920. Bankers acceptances were quoted at 514 per cent to 51/2 per cent, or half of 1 per cent above the New York Federal Reserve Bank rediscount rate. If this situation continues, the re­discount rate is likely to be advanced. In this connection, the Dallas Federal Reserve Bank advanced its rate from 41h per cent to 5 per cent on March 1 and the remaining three districts are expected to follow soon. Time money was marked up to 7%, a gain of 14 for the month. The March 15 United States Treasury short term notes carry a rate of 4 % per cent, the highest rate the United States Treasury has been forced to pay in many years. The out­look is for continued firm rates over the spring months. Checks cashed in the district are running considerably above those of a year ago at this time. Debits for the four weeks ending February 27, according to the Dallas Federal Reserve Bank, amounted to $856,641,000 com­pared to $752,894,000 for the same four weeks of last year, a gain of 13.8 per cent. Member bank borrowings totaled $15,000,000 at the end of February against only $1,159,000 on the same date last year. Government secu­rities held by member banks were reduced from $93,000,000 in January to $92,000,000 in February; in February last year, member banks held $71,000,000 of Governments. Demand deposits declined again to $312,000,000, which compares with $306,000,000 for the same period of 1928. On the other hand, time deposits i n c re as e d from $143,000,000 to $144,00,000 in the 30-day period, a new high record for the Dallas district. Loans and discounts at member banks fell off seasonally, amounting to $335,000,000 for the last week of February. On the cor­responding date last year, loans and discounts were re­ported at $336,000,000. A seasonal increase in these Joans is to be expected over the next few months as spring ex­pansion gets under way. Fundamentally, financial con­ditions in the country are sound and definite signs of a depression are still lacking. FINANCIAL STATISTICS FOR THE DALLAS FEDERAL RESERVE DISTRICT>!< February J anuary February 1929 1929 1928 Bank Debits (four weeks> ------------------­--------------­------------------$GovP.rnment securities owned, end of month_________________ __ _ 856,641,000 92,000,000 924,000,000 93,000,000 $752,894,000 71,000,000 Member bank borrowings, end of month_________ _________________ Demand deposits, end of month________________________________________ Time deposits, end of month_______________________________________________ 15,000,000 312,000,000 144,000,000 19,000,000 313,000,000 143,000,000 1,159,000 306,000,000 117,000,000 *From the Federal Reserve System . TEXAS CH:ARTERS A sharp decrease is reflected in the number of new corporations organized in February; while a decline from January to February is to be expected, the loss this year is much greater than normal. During the month, 231 new corporations received charters from the Secretary of State compared to 336 in January and 238 in February, 1928. The decline of 150 new charters from January to TEXAS CHARTERS February January February 1929 1929 1928 Number ------------231 336 238 Capitalization _$15,985,000 $101,063,000 $75 691 000 Foreign permits 36 46 ' ' 36 Classification of new corporations: Oil ----------------­ 17 21 12 Public service 4 9 11 Manufactur'g 41 50 20 Banking- Finance ____ 15 22 12 Real estate- Building ___ 27 39 35 General ________ 127 195 148 February compares with a decrease of 21 last year and a gain of 46 for the same period in 1927. Thirty-six per­mits were granted to outside companies. Capitalization of the new companies totaled only $15,985,000 again st $101,063,000 in January and $75,691,000 in February, 1928. The average company was capitalized at $7,000, or the smallest in several years. Three building and loan associations with capitalization of $1,000,000, $5,000,000, and $8,000,000 were among the larger concerns organized. Seventeen oil companies were chartered, compared to 21 ih January, and public service corporations fell from 9 in January to 4 in February. There were 41 manufac· turing concerns organized against 50 in January. New banking and financial institutions declined from 22 in January to 15 in February, and new real estate firms fell from 39 to 27. The general list also shows a large decline. COMMERCIAL FAlLURES Measured by commercial failures, business conditions in Texas during February were except'.onally good. Bankruptcies were the fewest for that month since 1920 when 31 were reported, while liabilities were the smallest for any February on record. However, it must be remem­bered that current failures are a better index of what has taken place over the past year rather than what is likely to happen in a business way over the next few months. There were but 35 insolvencies having liabilities of $673,000 in Texas during February, according to R. G. Dun and Company, compared to 52 failures with liabili­ties of $1,776,000 in February last year. In January, 61 defaults with liabilities involving $1,181,000 were re­ported. While a decrease in the number of failures from January to February is to be expected, the drop this year is much larger than usual. Aver age liabilitie3 per failure were $17,800 in February compared to an average of about $20,000 over the past few months. It appears, therefore, that the smaller companies are ex­periencing considerable difficulty in making profits. COMMERCIAL FAILURES* Febr uar y J anuary February 1929 1929 1928 Number ________ 35 61 52 Liabilities ----$ 573,000 $ 1,181,000 $ 1,776,000 Assets --------$ 285,000 $ 665,000 $ 814,000 •From D. G. Dun & Co. DEPARTMENT STORE SALES Retail trade was less active than it 4as been in recent months. Sales of 79 department stores located in 26 cities of the State amounted to $4,511,000 compared to· $4,706,000 in February, 1928, a decline of 4.1 per cent. The showing is actually better than the figures indicate because of the fact that February, 1928, had one more business day than February, 1929. If allowance is made for the extra day, the volume of sales would be greater than those of a year ago. Nineteen cities report losses FEBRUARY TENDENCIES IN TEXAS DEPART­MENT STORE SALES Number Percentage Change from of February January Stores 1928 1929 Abilene --------------------3 -25.0 + 0.1 Austin ____________:_________ 4 + 15.8 + 7.5 Beaumont ____________ 6 -11.6 +24.6 Dallas ----------------------6 -2.4 + 0.3 El Paso -------------------4 -4.6 -16.5 Fort Worth ____________ 8 -6.0 + 8.7 Galveston ----------------3 +22.3 -3.7 Houston _________________ 7 -2.2 -6.0 Laredo ----------------------3 + 7.7 + 15.0 San Antonio ------------9 + 0.4 -10.5 Tyler ------------------------3 -4.5 -3.2 All others* ------------23 -18.5 -12.3 State ----------------79 -4.1 -2.6 Sales of 79 comparable stores : 1929 1928 February ----------·------------· 4,511,000 $4,705,000 Year to date__________________ 9,201,000 9,362,000 *All others include : Amarillo, Ilrownwood, Cleburne, Corpua Christi, Corsicana, Del Rio, Denison, Marshall, Paris, Port Arthur, San Angelo, Temple, Waco, and Wichita Falls. against gains in the other seven. Gains and losses were not confined to any particular section of the State. Department store sales in the United States during February were greater by .2 per cent than those in Feb­ruary, 1928, according to the Federal Reserve System. Eight districts reported losses but gains in the other four were large enough to more than make up the decline. Chicago showed the largest gain, 7 per cent, while Min­neapolis recorded the greatest loss, 6.5 per cent. BUILDING A further decline was witnessed in the building in­dustry in sympathy with a similar movement over the entire country. It has been suggested in the REVIEW several times over the past few months that conditions were not favorable for the building industry and that a decline from the high level obtaining last year was to be expected. Factors contributing to the decrease are high interest rates and the sharp decline in security offer­ings in recent months. Building permits in the 33 cities reporting to the Bu­reau of Business Research for February amounted to only $7,852,000 c o mpar e d to $7,982,000 in January and $10,135,000 in February a year ago. Twenty-one cities BUILDING PERMITS February January February 1929 1929 1928 Abilene ----------------$ 85,000 $ 127,000 $ 128,000 Amarillo ______________ 262,000 115,000 344,000 Austin ------------------166,000 190,000 153,000 Beaumont ___________ 397,000 238,000 256,000 Brownsville Brownwood ________ ______ 47,000 140,000 46,000 167,000 33,000 175,000 Cleburne --------------Cor pus Christi____ 7,000 123,000 365,000 214,000 25,000 1,371,000 Corsicana ----------­ 16,000 45,000 13,000 Dallas -----------------­Del _Ri_o ------­--------Demson ------------­El Paso ---------------­Fort Wor th ________ Galveston _________ Houston ____________ 467 ,000 70,000 1,000 286,000585,000 179,000 2,122,000 883,000 45,000 13,000 149,000 611,000 166,000 2,003,000 585,000 63,000 115,000 1,234,000 180,000 2,581,000 Laredo ---------------­Lubbock ______________ 10,000520,000 14,000 453,000 4 ,000 111,000 McAllen _____________ -----------------­ 28,000 56,000 Marshall -------------· Paris -----------------­P lainview ___________ Port Arthur________ 6,000 15,000 152,000 407,000 54,000 4,000 126,000 64,000 2,000 ,000 45,000 114,000 Ranger --------------­San Angelo ________ San Antonio ______ 3,000227,000 1,069,000 2,000 96,000 1,058,000 411,000 1,222,000 Sherman -----------­Snyder ---------------Sweetwater ________ 3,000 4,000 39,000 15,000 33,000 84,000 40,000 25,000 84,000 Temple -------------­Tyler ----------------­Waco -------­----------­Wichita Falls______ 35,000 56,000 236,000117 ,000 213,000 86,000 128,000 147,000 56,000 56,000 443,000 152,000 Total ---------------$ 7,852,000 $ 7,9 2,000 $10,135,000 Year to date.... 15,834,000 ------------$19,607,000 show losses, one shows no change, and 10 reported gains. Decreases were well distributed over the State. Corpus Christi, Fort Worth, Laredo, Marshall, San Angelo, and Sherman recorded losses, while Beaumont, El Paso, Lub­bock, Port Arthur, and Plainview made large gains. Engineering and construction projects awarded in the State totaled $22,000,000 according to the F. W. Dodge Corporation, a gain of 1 per cent over awards in Febru­ary, 1928. Contemplated projects were reported at $37,000,000 which is a decline of 14 per cent in comparison to proposed projects for the same month a year earlier. Building costs remained about unchanged. STOCK PRICES During February, the stock market experienced one of the most erratic months in stock exchange history. In the first week, many issues were bid up to new highs for all time, only to drop back to the previous levels in the second week. The market was rather quiet during the third week but a new bullish demonstration in the last week of the month carried quotations to the peaks reached in the first week. As a result of this sharp churning about, the average price of most issues for the month was higher. Trading on some days was ex­ceptionally heavy while on others sales were the small­est for a long time. It appears that the public continue3 ready to purchase on recessions but is hesitant about fol­lowing advances. Four of the issues comprising the Bureau's industrial index advanced in February and three declined resulting INDEX OF INDUSTRIAL STOCKS Average High 1923-24-25=100 1929 1928 1927 1926 1925 January ...................... 264 245 167 142 108 February .................. 265 233 17 4 146 112 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 SOU'l'll1fiS:I'ERN STOCK PRICE INDEX or .lTerage Monthly Hiehs Average Month 1923-24-25 =100 in a gain of but one point. The index averaged 265 for the month, compared to 264 in January and 233 in Feb­ruary last year. The rail index advanced 2 points, or from 216 in January to 218 in February. This compares with 178 in February, 1928. Seven of the rails were higher while only 2 were lower. The market is very sensitive to money rates and the credit situation, advanc­ing rapidly with easy money and breaking sharply as rates are marked up. 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 Statea and at the same time listed on the New 1"1>rk Stock Exchanse where quotations are available for a number of years back. The a•er11t weekly high for the years 1928-24-1-i Is the base equal to 100, Included in the industrial stock inde1 are Coca Cola, Freeport-Tau, Gulf States Steel, Tennessee Coppe1 .md Chemical, Texas Compan7, Texas Pacific Coal and Oil, and Texas Gulf Sulphur. The railroadJ used in the index are the Atchison, Topeka & Santa Fe; Chicaio, Rock Island & Pacific; Gulf, Mobile & Northern; Missouri, Kanau & Texas; Missouri Pacific; New Orleans, Texas & Mexico; St. Louil & Southwestern ; Southern Pacific; and Texas Pacific. - INDEX OF RAILROAD STOCKS Average High 1923-24-25=100 1929 1928 1927 1926 1925 January 216 183 145 136 118 February ------···········-218 178 157 133 123 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 PETROLEUM Definite elements of improvement are still lacking in the petroleum industry. Production in both Texas and the United States established a new high record in the it is quite likely that the situation will be improved in the not-distant future. . Daily average fl.ow in Texas increased from 763,000 barrels in January to 789,000 barrels in February, com­pared to 653,000 barrels in February, 1928. Total pro­duction for the month was 22,092,000 barrels against 23,671,000 barrels in January and 18,937 ,000 barrels in February last year. THE PETROLEUM SITUATION* (Production in Thousands of Barrels) February January February 1929 1929 1928 Production- Total -----------------­22,092 23,671 18,937 Daily average____ 789 763 653 Wells completed____ 556 624 653 Producers -------------­ 300 352 300 •From the Oil. Weekl11. An important development is the decline in field work. During the month, 556 new wells were completed, com­pared to 653 completions in February a year ago. Three hundred of the new wells were producers, or the same as in February, 1928. It is interesting to note that the per­centage of successful wells is very much higher this year than las.t. Crude prices were about unchanged, but gaso­line prices declined. The decline is due largely to the rate war on the Pacific Coast between some of the large distributors. CEMENT Production of Portland cement in Texas fell off sharply in February, reflecting a similar curtailment over the en­tire country. The trend in production from January to February is not definite; in the past eight years, output declined 4 times and increased 4 times between the two months; however, the decline this year is unusually large. During the month, Texas mills turned out 399,000 bar­rels compared to 466,000 barrels in January and 460,000 barrels in February, 1928. Shipments decreased from 459,000 barrels in January to 416,000 barrels in Feb­ruary and compare with 423,000 barrels in Februay last THE CEMENT SITUATION* (In Thousands of Barrels) February J anuary February 1929 1929 . 1928 Production -----------------­399 466 460 Shipments -----------------­416 459 423 Stocks -------------------------513 530 460 •From the United States Department of Commerce. year. Sharp curtailment in production coupled with fairly large shipments resulted in a slight reduction of stocks. On March 1, stocks totaled 513,000 barrels compared to 630,000 barrels a month earlier and 460,000 barrels on March 1 a year ago. Demand slackened somewhat during the month but the eicess of shipments over output is maintaining a rela­tively strong statistical position in the industry. More­over, spring industrial expansion, which will require addi­tional cement, will soon be under way. Prices were un­changed, the basic price on March 1 being $2.25• per barrel in Dallas and $2.35• in Houston. Ten cents a bar­rel is allowed for cash and 40c for cloth sacks where re­turnable. •Prices quoted through the courtesy of the Lone Star Cement Com­pany Texas. LUMBER Lumber mills were operating at about the same rate in February as they were in January but the average output per mill declined due to fewer working days in the month. Thirty-four mills in the State reporting to the Southern Pine Association p rod u c e d a total of 61,906,000 feet in February compared to a cut of 59,852,000 feet by 29 mills in January. Production per mill aver­aged 1,821,000 feet in February against 1,928,000 feet in January, or a decline of 5.5 per cent. Average shipments fell off 5.7 per cent, or from 1,890,000 feet in January to 1,738,000 feet in February. It is interesting to note that mill men are adjusting output to shipments in order tu maintain a better balance in the industry. Average THE LUMBER SITUATION• (In Thousands of Feet) Per cent Change from Feb. Jan. Jan. 1929 1929 1929 Preliminary report of 151 132 Mills mills in the Southwest-­ Av. production __________ Av. shipments ____________ 1,488 1,510 1,497 1,531 -- .6 1.4 Av. unfilled orders____ 1,490 1,343 + 10.9 Final report of 34 Texas 29 Mills Mills- Av. production Av. shipments __________ __________ 1,821 1,783 1,928 1,890 - 5.5 5.7 Av. stocks --------­-------­ 4,808 4,497 + 6.9 Av. unfilled orders____ 1,221 1,145 + 6.6 •From the Southern Pine Association. stocks per mill gained 6.9 per cent in the month, or from 4,497,000 feet to 4,808,000 feet. Unfilled orders were greater by 6.6 than those in January, indicating that de­mand is somewhat better. Markets were fair to good. Prices were unchanged to slightly higher over the month. While building operations were curtailed, other large wood-consuming industries were more active so that de­mand for lumber is likely to increase over the next few months. COTTON MANUFACTURING From the point of view of operations, the textile in­dustry experienced a very successful month but judged by profits the results were not so satisfactory. Most mills maintained full schedules and some were operating night shifts for part of the time. During February, 21 mills in the State used 7,898 bales of cotton and produced 5,779,000 yards of cloth compared to the consumption of 7,842 bales of cotton and an output of 6,985,000 yards of goods in February, 1928. Cotton goods sales amounted to 4,251,000 yards whereas sales in February last year were 3,498,000 yards. Unfilled orders showed an unusually large gain, the total on March 1 being 9,348,000 yards compared to 5,187,000 yards a year earlier. At the present rate of production, bookings are equal to nearly seven weeks run. The most discouraging feature in tb.e situation is the continued slow markets for yarn and cloth. TEXAS COTTON MANUFACTURERS REPORT February January February Mills reporting___, Bales of cotton used -----------------­ Yards of cloth-Produced ---------­Sales --------------­ Unfilled orders (end of period) Active spindles ___ 1929 1929 1928 21 21 19 7,898 9,188,000 7,842 5,779,000 6,957,000 6,985,000 4,251,000 4,250,000 3,498,000 9,348,000 6,397,000 5,187,000 205,000 206,000 191,000 Spindle hours. ___ 60,801,000 72,817,000 55,028,000 SPINNERS MARGIN A decline of 1 point in the spinners ratio during Feb­ruary indicates the rather unfavorable position of the spinning section of the cotton textile industry. The ratio has been below normal (160) for eighteen months and it is likely to be some time yet before the spinners are back on a normal basis. Even though present yarn prices are above those of six weeks ago, the rise in cotton prices has more than offset the gain. An encouraging feature is that spinners have considerable raw cotton on hand which has increased in value about 2 cents per pound since February 1. In February, American middling spot cotton in Live1. pool averaged 10.48d and 32-twist cotton yarn in Man­chester averaged 15.81d against 10.54d for cotton and 15.97d for yarn in January. Yarn declined relatively more than cotton, resulting in a decrease of 1 point in the spinners margin. Standing at 151 in February, the ratio compares with 152 in January and 151 in February last year. At present quotations, yarn is relatively cheaper than cotton. Spinners Margin refers to the ratio between the price of American 82-twist cotton yarn in Manchester and the LiTerpool price of mfddJIDS American cotton. Normally, the price of 32-twist should be 603 abo" the spot price of American middling cotton. If prices change so that the ratio Increases, the spinners· margin of profit is increased aDd thereby the demand for cotton is strengthened. On the other hand, when the ratio decreases, the spinners margin is also relatin!y de­creased, and then the demand for cotton falls. SPINNERS MARGIN 1929 January 152 February ______ 151 March -------------­ April _______________ -----­ May __________________ June --------------­July -----------------­ August ____________ September ______ October --------·--­ November ______________ December _____________ Normal=160. 1928 1927 1926 149 174 150 151 179 160 150 173 156 149 168 155 149 165 153 148 172 157 147 167 158 154 164 160 152 156 166 148 156 194 152 148 187 151 147 186 21cr~r-~T""~-,.-.-~r-~T""~-,.~~r-~..,-~...,.~~r-~...,-~--r~~,...~..,..~.....,~~..-~.......~......~~..---. 130,.---------t---------t---------+----------+----------1 i10..........--:i"9'2"";;--'-~......~~i...--;-~-;;-...L~~'--~..J--;-~;-;:-~L-~..l..~...J.~~1=-~..J...~....L~~l...~..L~...L~..J 192 6 1926 1927 1928 192 9 COTTON The final ginnings report issued by the Census Bureau on March 20 showing a total of 14,269,000 running bales was about in line with expectations. Ordinarily running bales average a little over 500 pounds per bale so that final ginnings should approximate very closely the De­cember Government estimate of 14,373,000 500-lb. bales. This situation eliminates all doubt as to the size of last year's crop and materially strengthens the statistical position of raw coton. Consumption continues at record rates and exports are just about equal to those of a year ago. It looks therefore as if the carryover at the end of the season will be considerably reduced. Weather conditions in February were rather unfavor­able to the preparation of land for planting. In the eastern belt, excessive rains delayed plowing, while in the western part, many areas were too dry for seed to germi­nate. However, rains were quite general in western dis­tricts during hte latter part of the month and consider­able clear weather prevailed in the eastern belt. As a result, the early outlook is a little more favorable but farm work generally is behind schedule. A total of 598,000 bales was used in the United States in February compared to 668,000 bales in January and 572,000 bales in February, 1928. Prices declined late in February but the loss was just about recovered in the early part of March. May New York futures closed on March 15 at 20 cents, compared to 20.22 cents on Feb­ruary 15. ., TEXAS BUSINE~ REVIEW COTTON BALANCE SHEET On March 1, the indicated supply of cotton in thu United States amounted to 6,922,000 bales,* compared to 7,429,000 bales on March 1, 1928, and a seven-year aver­age on that date of 7,041,000 bales. Due to heavy con­sumption and large exports, stocks of American cotton are disappearing at a very rapid rate. Although exports have been falling off over the past six weeks it must be noted that the present supply is the smallest since 1925 and stocks are likely to be reduced to dangerously low levels before a new crop is produced. Exports for the month totaled 613,000 bales compared to 789,000 bales in Janu­ary and 622,000 bales in February a year ago. United States consumption in February was 598,000 bales, or a total disappearance for the month of 1,211,000 bales. This rate cannot continue without practically exhausting stocks by next August. The indicated supply on March 1, in the United States was 507,000 bales below that on March 1, 1928. Over the last seven years, changes in the supply on March 1, have totaled 15,293,000 bales and price changes have amounted to 3,755 points, or a change of 24.6 points for each change of 100,000 bales in the supply. At the same ratio, with a decrease of 507,000 bales there should be an increase of 125 points in the price over that of last year. Based on supplies in the United States alone, New Orleans •This balance is obtained by adding the sum of the Census carry­over on August 1 and the imports since that time to the final rlnnlnga aa reported by the Census Bureau, and subtracting the exports plus consumptioa. Linters are not included. spots should be about 19.90 cents, or practically at cur­rent quotat~ons (March 18). In calculating present prices, European stocks of American cotton should be considered also. Stocks in and cotton afloat to Europe on March 1 were 2,173,000 bales against 2,061,000 bales on March 1, 1928, or a gain of 112,000 bales. If the ratio of 24.6 points is applied to this increase, the New Orleans spot price should be reduced 28 points from last year's quotations at this time. Based on world supplies, there­fore, New Orleans spots should be about 19.80 cents. At present prices, yarn is too low in comparison to raw cot­ton, the spinners ratio averaging 151 in February, whereas 160 is normal. On a replacement basis, there­fore, New Orleans spots should be about 19.50 cents rel­ative to the present yarn prices. In this connection, it should be noted that at this season of the year, the weather is possibly the most important market factor and prices are likely to fluctuate widely from the calculated price based on the cotton supply balance sheet alone, for it does not take into account the possibilities of the new crop, and the market is trying to discount it. The February report of the Cotton Textile Merchants of New York City was very optimistic. Sales for the month totaled 341,000,000 yards or 116.3 per cent of pro­duction and shipments were 309,000,000 yards, or 5.5 per cent greater. Stocks on March 1 were 373,000,000 yards, a decline of 4.2 per cent from the month previous, and unfilled orders increased from 441,000,000 yards to 472,­000,000 yards. At the current rate of output, bookings are equal to more than six weeks run. COTTON BALANCE SHEET AS OF MARCH 1 IN THE UNITED STATES (In Thousands of Running Bales) Year Carry-over Imports December Total Consumption Exports Total Balance August 1 since Estimate since since August 1* August 1 August 1 1922-1923 2,832 337 9,964 13,133 3,839 3,717 7,556 5,577 1923-1924 2,325 167 10,081 l~,573 3,605 4,301 7,906 4,667 1924--<1925 1,556 214 13,153 14,923 3,503 6,137 9,640 5,283 1925-1926 1,610 197 15,603 17,410 3,743 5,928 9,671 7,739 1926-1927 3,543 231 18,618 22,392 4,025 7,576 11,601 10,791 1927-1928 3,762 224 12,789 16,775 4,200 5,146 9,346 7,429 1928-1929 2,532 246 14,373 17,151 4,049 6,180 10,229 6,922 *In 600-pound bales. The cotton year begins on August 1. AGRICULTURE The outlook for agr:culture is generally optimistic. Prices for many of the important farm crops are above those obtaining last year at this time and the trend is expected to be upward over the next few months. Some damage was done by the cold spell e3.rly in February, but the more favorable weather conditions in the past few weeks have largely overcome the setback. Winter crops in the southern part of the State are maturing rapidly and quality this year is excellent in most cases. The citrus movement is about over and shipments of spinach and cabbage are declining. Considerable cotton has been planted in southern counties but the soil has been too dry for rapid growth. Recent heavy rains have relieved this situation and the next crop report is likely to be more cheerful. Farm work is somewhat behind schedule due to un­favorable weather and dry soils in some areas. However, it ii!! early in the season and farmers can easily catch up with their work under favorable weather conditions. Fall grains have come through the winter with little killing but the young plants are small in many districts. Farm labor appears to be adequate for spring work. FRUIT AND VEGETA>BLE SHIPMENTS The effects of the cold spell which obtained early in February over the winter truck farming sections of Texas are reflected in a sharp decline of shipments in compari­son with those of last year. During the month, 5,843 cars of fruits and vegetables were loaded, whereas there were 6,545 cars sent out in February, 1928. In January, shipments totaled 5,417 cars. Normally, loadings in Feb­ruary should be considerably above those in January. It is interesting to note, therefore, that although killing frosts were confined to small areas, the actual damage assumed large proportions. In the past two weeks, crops have overcome the setback in most producing sections. Mixed vegetables again accounted for a large part of the loadings. Shipments of spinach and cabbage were heavy, but the movement was not as large as that of February last year. The peak of the citrus movement is over-shipments are dwindling to a few cars per week. The cauliflower deal is pretty well over and sweet potato shipments are falling off. On the other hand, lettuce and carrots arc going out in larger volume. TEXAS FRUIT AND VEGETABLE SHIPMENTS* (In Carloads) February January February 1929 1929 1928 Mixed vegetables 1,702 1,903 1,811 Spinach -------------­1,493 1,743 1,795 Cabbage -------------­1,932 1,068 2,369 Grapefruit __________ 252 313 110 Sweet potatoes____ 83 78 114 Cauliflower -------­20 107 31 Onions ---------------­1 3 Lettuce ---------------­33 17 47 Tomatoes ----------­-----­---­3 Oranges -------------­3 7 4 Potatoes -------------­30 45 7 String beans________ 1 Mixed citrus________ 19 42 6 Carrots ---------------· 275 87 251 Total --------------­5,843 5,417 6,545 Year to date________ 11,260 10,205 *From the United States Department of Agriculture. Prices generally were higher. Potatoes advanced over $1 per 100 pound sack and cabbage quotations were marked up. The spinach and sweet potato markets were strong most of the month. Citrus fruit prices were some­what lower. This was due to unusually large shipments from California during the month. LIVESTOCK Conditions in the livestock industry are less encourag­ing than was the case a month or two ago. Drouthy conditions obtained over large areas of the State all during the month and ranges deteriorated rapidly. More­over, temperatures have been rather low so that growth of weeds and grasses has been extremely slow. As a re­sult, extensive feeding has been necessary and animals in many cases are unusually thin. In some districts, pro­ducers have resorted to the burn'ng of thorns from cactus in order to furnish feed for cattle and sheep. However, winter losses have been small so far and the recent rains have brought an end to the drouth. With the more fa­vorable weather over the past week or two, ranges have improved and animals arc doing better, but it will be several months before they regain the loss in flesh. The condition of cattle ranges on March 1 was rated at 7() per cent of normal by the United States Department of Agriculture compared to 82 per cent on February 1 and 81 per cent on March 1, 1928. Ranges in practically all parts of the State were poor and water tanks were low. Last week's rain rel'eved the situation over most of the State except in the far west and southwest. Cattle were rated at 80 per cent, down 4 points from the month previous and 2 points below the condition on March 1, Hl28. Sheep were placed at 83 per cent compared to 87 'per cent last month and 83 per cent on March 1 a year ago. Goats declined 6 points, or from 89 per cent on February 1 to 83 per cent on March 1, against a five-year 'average of 89 per cent. Sheep and goat ranges dete­'riorated rapidly, the condition on March 1 being placed at 79 per cent compared to 85 per cent last month and a five-year agerage of 86 per cent. It has been necessary to feed large numbers of sheep, especially the ewes. Early lambs are coming in large numbers in South Texas but it will be another week before Jamb:ng becomes gen­eral. Losses of both sheep and goats have been small. Goat clipping is well advanced in southern counties and ·a few sheep have been sheared. Very little wool and mohair has been contracted this year to date; but the small amount which has been sold brought prices from 3 cents to 5 cents below last year's quotations. A few 1929 Jambs have been contracted for fall delivery at prices from $6 to $7 a head. Receipts at Fort Worth fell 20 per cent below those of last year in February. Oattle shipments declined 42 per cent while hogs fell off 16 per cent. On the other hand, calf receipts gained 2 per cent and sheep unload­'ings increased 15 per cent. During the month, a total of 108,290 head of all classes of livestock were shipped to Fort Worth, according to the Fort Worth Stockyards Company, compared to 125,916 head in January and 136,094 head in February, 1928. The poor condition of livestock generally indicates that the movement of grass 'fat cattle will be later than usual this year. The dairy industry did rather well during the month. 1While conside';rable feeding was necessary, producers were able to dispose of their products at fairly good prices. Butter and milk prices are holding up and the market outlook is for sustained firmness over the next few months. Both poultry and egg prices declined sea­sonally but cold storage holdings of these products are not burdensome so that further price declines should be moderate. Considerable beef and pork is going into storage in the large packing centers. Prices were higher on practically all classes of animals, gains ranging from % a cent per pound for muttons to an advance of 1% cents a pound for calves. Prime beef steers on the Fort Worth market for the week ending March 16 brought 11 cents to 1114 cents compared to 10 cents a month earlier and best calves cleared at 12 'cents to 13 cents, up 11h cents in the 30 days. Handy­weight hogs went mostly at lOllz cents against 9¥.i cents to 10 cents during the same week in February. Top lambs were about unchanged at 15 cents to 16 cents while muttons were marked up 1h a cent and sold around 10 cents for the better grades. LIVESTOCK RECEIPTS AT FORT WORTH* February 1929 J anuary 1929 February 1928 Cattle Calves ________ Hogs __________ Sheep -------­ 32,511 9,553 39,929 26,297 46,070 17,057 40,381 20,455 56,226 9,374 47,551 22,943 Total 108,290 125,916 136,094 Year to date 234,206 -------------­ 282,456 *From the Fort Worth Stock Yards Company.