and the Southwest Entered 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, OCTOBER 26, 1929 No. 9 THE MONTH Favorable Factors: 1. Large bank debits 2. Few commercial failures 3. Many new charters 4. Sound financial conditions 5. Ample funds for fall expansion 6. Heavy carloadings 7. Well employed labor 8. No commodity price inflation Business and industry in Texas are moving steadily for­ward although the rate of progress has been slower in the past two months. In recent weeks many industries have barely maintained the summer schedule while a num­ber show evidence of slowing up. It appears now that the peak of the present business cycle was reached in July and a downward trend is to be expected for some time to come. In this connection, it must be remembered that business and industry are very diversified and the present momentum is great enough to prevent any sudden or drastic decline. The usual fall expansion has failed to materialize but the summer recession was almost negligible so that the volume of business continues on a large scale. Unfavorable influences are on the increase while favor­able factors are on the downward trend. Labor conditions in the State are fairly good despite the fact that wages are declining and demand for labor is falling off slightly. Now that farm labor demand is slackening and industrial expansion is small the question of unemployment is gaining in importance. There was a seasonal increase of 1.3 per cent in the number of work­ers on the payrolls of 469 comparable firms in 53 cities of Texas on September 15 compared to August 15. Aver­age weekly wages per worker declined from $27.75 in August to $27.55 in September. This compares with a gain of nearly 50 cents weekly per worker between July and August. Austin, Dallas, San Antonio, Waco, and many of the smaller towns showed gains in the number employed while Fort Worth, Galveston, and Houston re­ ported losses. Money rates continued firm all during September, but an casing tendency has been in evidence so far in October. The call rate on the New York Stock Exchange renewed early in September at 7 per cent to 8 per cent, but it was Unfavorable Influences: 1. Declining bank debits 2. Smaller department store sales 3. Lower cotton and livestock prices 4. Smaller farm crops 5. Slump in building and construction industry 6. Little fall industrial expansion 7. Continued high interest rates 8. Lower purchasing power 9 . Declining average wages per worker 10. Decreasing exports 11. Considerable stock speculation soon advanced to 10 per cent. Later in the month, the rate was back to the 7 per cent level. Time rates ad­vanced to 9 per cent for all maturities and commercial paper remained unchanged at 5'0! per cent. Bank debits show a large seasonal gain over those in August. Checks cashed in the Dallas Federal Reserve District for the four weeks ending October 2, totaled $988,000,000 against $946,000,000 for the same period of 1928. Member bank borrowings at the Dallas Federal Reserve Bank made a sharp decline while loans at member banks increased somewhat. Demand deposits gained during the month but time accounts fell off slightly. Wholesale prices generally were lower, farm products, livestock, and metals being especially weak. Trade at wholesale and retail made a rather poor showing com­pared to recent months. Sales of 75 department stores in 24 cities of the State amounted to $5,342,932 in Sep­tember compared to $5,610,282 in September, 1928, a loss of 4.8 per cent. Commercial failures were the fewest for any September in ten years, and the large number of new charters granted is an encouraging feature. Freight movement in this territory continues above that of last year, but the rate of gain is diminishing. Car loadings in the first three weeks of September were 2.6 per cent above shipments in the corresponding period last year, according to the Southwest Shippers Advisory Board. Loadings of cotton, grains, building materials, and livestock were especially heavy. Exports are run­ning substantially below foreign shipments last year but coastal trade is reported on the increase. A decline is reflected in the production of crude petroleum in the State during September. Field work also fell off. Cement plants maintained about the same rate of output but shipments decreased sharply, Stock"' of cement are at new high levels. The building industry made a very poor showing, permits in 85 cities of the State amounting to but $7,259,000 against $8,352,000 in Sep­tember last year. Little or no change was witnessed in the lumber in­dustry. Millmen are working out a better balance be­tween supply and demand factors so that the industry should show improvement as soon as demand expands. Textile mills were unusually active over the month; the large amount of unfilled orders on the books at the end of the month is particularly impressive. Agricultural conditions are a little less encouraging than they were last month. There was a further shrink­age in crops, and farm prices in most cases were lower. The cotton crop is especially disappointing. Fall planting has been slow because of dry soils, and many of the early planted crops are backward. There were only 90 cars of fruits and vegetables shipped from Texas farms in Sep­tember compared with 828 cars in August and 96 cars in September, 1928. Prices moved within narrow limits with a trend towards slightly higher levels. The livestock industry just about held its own. Ranges improved materially after the drouth was broken and animals gained in condition. On the other hand, prices of livestock and wool and mohair declined to the lowest level this year. Poultry and dairy products were in good demand over the month at higher prices. Cold storage holdings of these products are above those of last year at this time. Receipts of livestock at Fort Worth in­ creased seasonally. FINANCIAL The Federal Reserve System continued the policy which was adopted early in August-Federal Reserve Banks have materially increased their purchases of commercial paper while the total amount of Government securities owned by the System has been but slightly reduced. At the same time, rediscounting by member banks, especially at the New York Federal Reserve Bank, has fallen off sharply. The combined effect of these operations has added ample credit and furnished enough funds for the expanding fall business without causing any further credit strain. In fact, the credit situation appears to be easier than it has been for some time although the easing tend­ ency may prove to be only temporary. Bank debits show a large seasonal gain over those in August and were somewhat above the_volume in Septem­ ber last year. Checks cashed in the District for the four weeks ending October 2 according to the DaUu Federal Reserve Bank amounted to $988,000,(100 agaillllt $946,­000,000 for the same period of 1928, or a !fain of 4.4%. In this connection it is interesting to note that debits in September were but 4.4% above those in September 1928, whereas in previous months the gains have been running from 12% to 16% above those in the same months of last year. The peak in the demand for fall credit has possibly been passed, and the volume of check transactions should decline from now on. Money rates were firm during most of September and remained at the high levels which have obtained over tM past year. Call rates on the New York Stock Exeha}lte declined to 7% and 8% soon after the first of September. The lower rates were in effect but a short time when the demand for funds caused banks to call a large volume of loans, resulting in an advance to 10%. The rate then renewed from 8% to 10% for the rest of the month. In the past week or two, the rate has declineCI to around 6%. Time money advanced slightly to 9% for all maturities, but commercial paper remained at 5%%. It appears, therefore, that the Federal Reserve policy is functioning about as expected. Recently time rates have also de­clined. Member bank borrowings at the Dallas Federal Reserve Bank are now showing the usual seasonal decline. On October 2, borrowings amounted to $24,000,000, or a decline of $10,000,000 from the total reported a month earlier. Further declines are likely over the next few months. Demand deposits at the beginning of October were reported at $287,000,000 against $279,000,000 a month ago and $304,000,000 on October 3, 1928. Time deposits were reduced $2,000,000 and stood at $141,­000,000 on October 2. Last year on that date, this type of deposits totaled $131,000,000. Loans at member banks gained from ~357 000 000 on v • ,September 1 to $375,000,000 on October 2, an increase about in line with seasonal influences. On the correspond­ing date last year, these loans amounted to $352,000,000. Member banks in this District reduced their holdings of Government securities considerably over the month. At the beginning of October, member banks held $77 000 000 in Government bonds, or a decrease of $2,000,000 from. the month previous and $5,000,000 under the amount reported on the same date of 1928. The trend has been downward for several months. No change was made in the 5% rediscount rate at the Dallas Federal Reserve Bank. · FINANCIAL STATISTICS FOR THE DALLAS FEDERAL RESERVE DISTRICT* September 1929 August 1929 September 1928 .Bank Debits (four weeks) ---------------------------­----­-----$Government securities owned, end of month______________________ Member bank borrowings, end of month___________________ Demand deposits, end of month ________________________________ Time deposits, end of month_____________________________________ 988,000,000 77,000,000 24,000,000 287 ,000,000 141,000,000 $ 792,000,000 79,000,000 34,000,000 279,000,000 143,000,000 $ 946,000,000 82,000,000 21,000,000 304,000,000 131,000,000 •From the Federal Reserve System. cially weak. All grains, cotton, wool, livestock, iron and WHOLESALE PRICES steel, hides, and many fuel products declined. On the Wholesale prices continued the downward trend which other hand, poultry and dairy products, sugar and a few began late in July; farm products and metals were espe-food products were higher. The Annalist index fell from 147.2 in the first week of September to 146.1 in the cor­responding week of October and Fisher's index declined from 96.9 to 94.7 in the same period, or to the lowest point so far this year. Dun's stood at 192.2, about the same as last month, and Bradstreet's remained practically unchanged at 12.70. The Bureau of Labor Statistics all commodity index, based on 1926 as equal to 100 averaged 97.5 against 97.7 in August and 100.l in September, 1928. TEXAS CHARTERS Very little change from August was recorded in the number of new corporations organized. This is rather 5jgnificant when it is noted that a normal seasonal loss is to be expected in September. However, it is quite evi­dent from the third quarter data that a downward trend in the number of new enterprises is definitely under way. In the first half, new corporations organized showed a gain of nearly 100 over those in the first six months of 1928, whereas there is a decline in the third quarter com­rared with the same period last year. One hundred and seventy-three new companies capital­ ized at $6,210,000 were granted charters by the Secretary of State in September, compared to 162 new enterprises with capitalization of $10,431,000 in September, 1928. Most of the companies were small again, the majority being capitalized at less than $10,000. The large number of new manufacturing concerns is an encouraging feature. In the third quarter, a total of 578 new companies, having capitalization of $25,281,000 was chartered. This compares with 583 new enterprises capitalized at $51,600,000 in the same three months last year. It is interesting to note, that compared to the third quarter last year, capitaliza­tion of the new companies was 50'/c smaller while the number was reduced but 5. There were 20 new oil companies organized in Septem­ber making 63 for the quarter; last year in the third quarter, 43 were chartered. But two public service cor­porations were formed in September, bringing the total for the quarter to !) against 13 for the same three months last year. New manufacturing enterprises numbered 30 in September and 85 for the quarter. This compares with 14 in September and 55 in the third quarter of 1928. Nine banking and financial institutions were chartered in September, which brings the total for the quarter to 29­10 under the third quarter of 1928. The 18 new real estate and building firms bring the total for the quarter to 54; a year ago, there were 10 real estate firms chart­ered in September and 40 in the quarter. This sharp gain reflects the increased activity in real estate and building over the past few months. The trend in the number of new enterprises should be 'vatched rather carefully over the next few months be­cause business usually follows a similar course a little later. TEXAS CHARTERS September August September Third Quarter 1929 1929 1928 1929 1928 Number --------------------------­ 173 170 162 578 583 Capitalization -------------------$6,210,000 $8,173,000 $10,431,000 $25,281,000 $51,600,000 Foreign permits_____________________ 19 25 33 71 116 Classification of new corporations: Oil ----­---------------------------­Public service_________________ 202 22 2 23 3 63 9 43 13 Manufacturing ______________ 30 18 14 85 55 Banking-Finance __________ 9 9 12 29 39 Real estate-building______ 18 15 10 54 40 General ---------------------------­ 94 104 100 338 393 COMMERCIAL .FAILURES That business conditions in Texas over the past year ·have been satisfactory is indicated by the small number of commercial failures each month. Not only were bank­ruptcies during September the fewest for any September in the past ten years, but the amount of liabilities in­ volved is the smallest on record. In ·this connection, it must be remembered that the number of failures is a result of business conditions over the past year or two rather than an indication of what is likely to happen in the coming year. There were but 29 insolvencies reported in the State during September compared to 38 in August and 38 in September last year. The decline from August is about in line with seasonal influences. Liabilities of defaulting companies amounted to $128,000 compared to $602,000 in August, and $607,000 in September, 1928. Most of the failures were small companies, liabilities of the aver­age bankruptcy amounting to $5,100, whereas liabilities per failure in September last year averaged $16,000. A total of 108 insolvencies having liabilities of $1,649,­000 was reported in the third quarter compared with 11 7 failures with liabilities of $1,613,000 in the third quarter of 1928. While failures for the third quarter are the fewest on record for that quarter, liabilities are the larg­est since 1926. Liabilities per failure in the third quar­ter amounted to $15,100, compared to $13,800 in the same months last year. This situation indicates that competition among commercial firms has been rather keen in the past year. COMMERCIAL FAILURES* September 1929 Number --­------------------------------­29 Liabilities --------------------------------$128,000 Assets ------------------------------------------­64,000 ~mR. G. Dun & Co. August 1929 38 $602,000 362,000 September 1928 38 $ 607,000 512,000 Third Quarter 1929 1928 108 117 $1,649,000 $1,613,000 938,000 472,000 No bank failures were reported during the past three months, whereas there was one bank default in the third quarter last year. STOCK PRICES Stock prices generally were downward during Septem­ber. After reaching new highs in the final week of August, quotations averaged lower each week in Septem­ber and closed the month at the lowest levels since last March. A number of unfavorable influences have been developing over the past few months which have shaken the confidence in the business outlook for the coming year. It appears now that business reached a peak in July and the trend is likely to continue slowly downward f•)r some months to come. The stock market decline is already discounting such a trend. Tight credit coupled with the less optimistic business trend is more than off­setting bullish factors in the market. Compared to August, three of the issues comprising the indust.rial index of the Bureau of Business Research 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 -----------------------216 183 164 125 123 April ------------------------209 191 175 126 118 May --------------------------217 199 179 127 122 June -----------------------218 193 190 133 117 July ------------------------238 197 192 136 119 August ------------------------239 203 190 140 125 September ------------------238 215 189 144 126 October ----------------------215 186 138 124 November ------------------221 182 139 126 December ------------------------212 183 143 133 declined and four averaged slightly higher in September, resul'\;ing in a decline of 1 point in the index. The index ~tood at 269 in September against 270 in August and 259 in September, 1928. In the past year, this index has ad­vanced but 10 points whereas there was a gain of 85 points in the year previous. The rail index also declined 1 point, or from 239 in August to 238 in September. Last year in September, the rail index averaged 215. The gain over the past year amounts to 23 points, indicating that rails have advanced relatively more than industrials. Five of the rails in­cluded in the index were lower .in September than in August, while four were higher. Trading was moderately heavy in most sessions but it appears that the public is not following advances as was the case a few months back. In constructing this index of rail and industrial stock prices, ·the Bureau of Business Research aimed to select companies which ~ representative of conditions in Texas and other Southern States and at the same time listed on the New T'11rk Stock Exchanse when quotations are avaflable for a number of :rears back. The aTer-.. weekl:v hish for the years 1928-24-1-5 Is the base equal to 100. Included in the industrial stock inde1 are Coca Cola, Freeport-Tau, Gulf States Steel, Tennessee Coppet And Chemical, Texas Compan7; Texas Pacific Coal and Oil, and Texas Gulf Sulphur. The railroad* used in the Index are the Atchison, Topeka & Santa Fe ; Chicasc>, Rock Island & Pacific: Gulf, Mobile & Northern; Missouri, .Kansu & Texas; Missouri Pacific; New Orleans, Texas & Mexico; St. Louie & Southwestern ; Southern Pacific ; and Texas Pacific. INDEX OF INDUSTRIAL STOCKS Average High 1923-24-25=100 1929 1928 1927 1926 1925 January ---------------------264 245 167 142 108 February 265 233 174 146 112 March 269 239 184 136 110 April 271 255 194 135 106 May ------------------------263 260 199 137 116 June ---------------------256 243 203 146 120 July --------------------------267 246 208 151 124 August ------------------------270 247 210 154 127 September ------------------269 259 224 153 126 October ---------------------------257 225 154 135 November ------------------262 226 159 144 December ------------------------255 238 164 139 1 9 2 5 1 g ?. G l 9 :2 7 l s ~ 8 l 9 2 9 CEMENT Practically no change was made in the rate of produc­tion of cement in Texas mills during September. Output, however, was considerably ahead of that in September last year, due to the operation of an additional plant. For that reason, comparisons with last year have little value. Ordinarily, there is a small seasonal decline from August to September so that the industry in the State is ,till on an upward trend whereas ~ decline is reflected for the entire United States. In September, 707,000 barrels were produced by Texas mills, the same as in August, but considerably above the 544,000 barrels turned out in September last year. Ship­nents declined from 786,000 barrels in August to 680,000 barrels in September and compare with 520,000 barrels in September, 1928. Stocks on hand show a seasonal gain of 27,000 barrels, or from 466,000 barrels at the end of August to 493,000 barrels at the end of Septem­ber. This is a new high record for September. Last year in September stocks were but 281,000 barrels. The un­usually heavy stocks coupled with a declining demand has materially weakened the statistical position of the indus­try. During the third quarter, a total of 2,115,000 bar­rels was turned out and 2,132,000 barrels were shipped, compared to an output of 1,614,000 barrelr and loadings of 1,750,000 barrels in the same three months of 1928. Demand was rather poor over the month, but no further price reductions were made after the August cut of lOc per barrel. The basic price on that date was $2.15 * per barrel in Dallas and $2.25 * per barrel in Houston. Ten cents per barrel discount is allowed for cash and 40 cents for cloth sacks where returnable. •Prices quoted through the courtesy of the Lone Star Cement Com­ pany Texas. THE CEMENT SITUATION* Production ----------­-------------------------­-----­Shipments -----------­-------------------------------­Stocks ------------­--------------------------­----------­- (In Thousands of Barrels) September 1929 707 680 493 August 1929 707 786 466 September 1928 544 520 281 , Third Quarter 1929 1928 2,115 1,614 2,132 1,750 •From. the United States Department of Commerce. DEPARTMENT STORE SALES The volume of wholesale and retail trade made a sea­sonal gain over that in August but fell short of the amount reported in September last year. September is the first month so far this year in which sales have fallen below those in the corresponding month of 1928. Sales of 75 department stores located in 24 cities of the State SEPTEMBER TENDENCIES IN TEXAS DEPARTMENT STORE SALES Percentage change Year­ ta-date Sept., Sept., 1929 1929 1929 from from from Year­ No. of Sept., Aug., to-date Stores 1928 1929 1928 Abilene 3 -3.9 +73.5 -4.2 Austin ___________ 4 3.2 +42.6 +11.6 Beaumont ______ 6 + 1.3 +31.1 + 6.4 Dallas ------------6 + 9.6 +41.0 + 6.8 El Paso____________ 3 -21.1 -6.6 -9.8 Fort Worth____ 8 -7 .3 +25.8 1.1 Galveston _______ 3 · -1.2 -3.5 + 8.0 Houston __________ 8 -9.3 +30.7 + 1.4 San Antonio____ 11 -15.4 +26.7 -4.3 + 1.2 Tyler ----------------3 -10.8 +32.8 All others*------20 9.5 +23.7 -7.6 State ____________ 75 -4.8 +38.5 + 1.1 Sales of 75 comparable Stores-1929 1928 September -----------------$ 5,342,932 $ 5,610,282 August -------------------------3,859,065 Year-to-date ----------------42,363,262 41,899,792 *All others. includes: Amarillo._ Brownwood, Cleburne, Corpus Christi, Corsicana, Del Rio, Denison, !da!shall, Paris, San An· gelo, Sherman, Temple, Waco, and W1ch1ta Falls. amounted to $5,343,000 in September against $5,610,000 in September a year ago, or a decline of 4.8 per cent. Losses occurred in all of the cities except three. For the year to date, however, the volume of sales is 1.1 per cent above the total for the first nine months of 1928. Retail trade in the entire United States during Septem­ber shows a gain of 1.9 per cent over that in September last year, according to the Federal Reserve System. Seven of the districts reported gains while five showed losses. The Kansas City District made the largest gain, 5.5 per cent; and the Minneapolis District, with a decline of 5.2 per cent, recorded the greatest loss. PETROLEUM A decline was witnessed in the output of crude petro­leum in Texas during September. While the decrease was fmall, it is rather significant because production has been mounting steadily for more than a year. l\foreover, it came at a time when storage facilities were taxed and crude markets were weak. Production was sharply cur­tailed in Oklahoma, and California also shows some fall­ing off. As a result, the outlook for the industry is a little brighter than it was a month or two ago. A total of 26,970,000 barrels of petroleum was gathered in the State during September, compared to 28,082,000 barrels in August and 21,979,000 barre:s in September last year. Daily average flow decreased from 906,000 barrels in August to 899,000 barrels in September. In the third quarter, 81,960,000 barrels were produced, a new high record for the quarter. Last year in the same ihree months, 67 ,395,000 barrels were gathered. Field work was less active, especially in the latter part of the month. New wells completed numbered 662 in September against 717 in August and 534 in September, 1928. There were 343 producers among the new wells in September, compared with 301 in September last year. In the third quarter, 2,185 new wells were drilled, of which 1,219 were producers. This compares with 1,671 completions and 961 successful wells in the corresponding three months of 1928. Field work is expected to show a further seasonal decline over the next few months. Crude prices remained about unchanged over the month largely as a result of the decline in production. It will take continued reduction in output to sustain present q!lotations because the season of curtailment in the con­i:umption of gasoline is beginning. Cuts in gasoline prices were extended to mid-continent territory as was to be ex-. pected after the decline in eastern markets. THE PETROLEUM SITUATION* (Production in Thousands of Barrels) September August September Third Quarter 1929 1929 1928 1929 1928 Production.:__ TotalDaily -----------­--------------------­average_____________________ 26,970 899 28,082 906 21,979 733 81,960 891 67,395 733 Wells completed·---------------------­ 662 717 534 2,185 1,671 Producers ----------------------------------­ 343 394 301 1,219 961 *From the Oil W eekl11. <;:OTTON MANUFACTURING The textile industry of the State was less active than in August but most mills were operating at about the same rate as they were last year at this time. Night shifts were worked in a few cases. Large gains in unfilled or­ders and sales in excess of production were impressive developments during the month. In September, 21 mills manufactured 7,454 bales of cot­ton into 6,425,000 yards of cloth compared to the con­sumption of 7 ,030 bales of cotton and an output of 6,037,000 yards of cloth in September, 1928. For the third quarter these mills used 22,714 bales and produced 18,023,000 yards of cloth; last year in the three months,' the same mills took 20,056 bales and turned out 16,481,000' yards of cloth. Cotton goods sales amounted to 7,495,000 yards in September and totaled 18,220,000 yards in the quarter. In September, a year ago, sales were 5,217,000: yards and 13,730,000 yards in the third quarter. It ap-i pears, therefore, that stocks on hand have been materiallyi reduced over the year. .J Unfilled orders at the beginning of October -totaled 9,747,000 yards compared with 7,801,000 yards last month and 5,343,000 yards on October 1, 1928. At the present rate of output, bookings are equal to about six weeks' run. Mills reporting____________ Bales of cotton used ___ Yards of cloth- Produced ------------·--­Sales ---------------------­ Unfilled orders (end period) _____________ of spindles _________Active Spindle Hours______________ TEXAS COTTON MANUFACTURERS September August 1929 1929 21 21 7,454 8,248 6,425,000 6,672,000 7,495,000 6,057,000 9,747,000 7,801,000 200,000 192,000 44,815,000 52,922,000 BUILDING The building industry approached a slump during Sep­tember. Permits fell sharply below those in August and in September last year, and, except for last June, were the smallest in any month since the latter part of 1926. Moreover, construction projects declined, and the amount of contemplated work decreased further. High interest rates coupled with increased building costs and the clouded business outlook are possibly the chief causes for the decline. A similar decrease in building is taking place over the entire United States. Building permits in 34 cities of the State reporting to the Bureau of Business Research amounted to $7,251,000 in September, compared with $9,824,000 in August and $8,351,000 in September, 1928. Losses occurred in 23 September 1928 21 7,030 6,037,000 5,217,000 5,343,000 197,000 67,159,000 REPORT Third Quarter Third Quarter 1929 1928 22,714 20,056 18,023,000 16,481,900 18,220,000 13,730,000 141,467,000 185,256,000 cities against gains in the other 11. Corsicana, Eastland, El Paso, and Marshall reported unusually large relative gains over permits in September last year. Losses were widely distributed over the State. For the third quarter, permits in the above mentioned cities totaled $24,819,000, or a decrease of 9% from the amount reported in that: <1uarter a year ago. Construction and engineering projects let in Texas dur­ing September had a dollar value of $15,000,000 accord·: ing to the F. W. Dodge Corporation. This is a decline of· 16% from the preceding month and 1 % under the amount reported in September last year. Contemplated work fell 22% below that in August. These large decrea:ses are particularly impressive at this time because the sea8on of winter curtailment is approaching. ,,, ,,,.. ' BUILDING PERMITS Third Third September August September Quarter Quarter 1929 1929 1928 1929 1928 Abilene -----------------------------$ 43,000 $ 766,000 $ 213,000 $ 1,007,000 $ 527,000 Amarillo -------------------------------­ 69,000 154,000 125,000 369,000 379,000 Austin ------------------------------­ 220,000 205,000 211,000 893,000 445,000 Beaumont ---------------------------­ 186,000 219,000 253,000 683,000 1,419,000 Brownsville ---------------------­ 50,000 17,000 131,000 87,000 313,000 Brownwood ------------------------­ 85,000 83,000 221,000 216,000 686,000 Cleburne -------------------------­Corpus Christi__________ ,__________ 9,000 282,000 22,000 99,000 18,000 224,000 101,000 564,000 56,000 967,000 Corsicana ----------------------------­ 27,000 12,000 4,000 89,000 54,000 Dallas -------------------------------­Del Rio_ ___________________________ _ 768,000 71,000 501,000 71,000 835,000 45,000 1,686,000 180,000 464,000 340,000 Denison -------------------------­-­ 2,000 22,000 12,000 27,000 37,000 Eastland ----------------------------­El Paso__________ __ _____________________ Fort Worth___________________________ 73,000 265,000 1,411,000 12,000 629,000 428,000 26,000 97,000 922,000 1,211,000 2,525,000 412,000 2,186,000 Galveston ---------------------------­ 99,000 1,671,000 145,000 2,330,000 556,000 Houston ------------------------------­ 1,624,000 2,369,000 2,191,000 5,627,000 7,425,000 Jacksonville --------­----------------­ 19,000 8,000 1,000 54,000 20,000 Laredo ----­-------------------------­ 18,000 29,000 50,000 61,000 195,000 Lubbock ---­-----------------------­ 167,000 202,000 311,000 531,000 986,000 McAllen ---------­-­------------------­ 50,000 67,000 85,000 138,000 147,000 Marshall --------------­--------------­Paris __ :_____________________________ 158,000 13,000 15,000 21,000 13,000 11,000 414,000 50,000 25,000 41,000 Plainview ---------------------------­Port Arthur______________~---------­ 44,000 214,000 69,000 490,000 110,000 121,000 204,000 781,000 285,000 1,122,000 Ranger ----------~-------------------­San Angelo________________________ 8,000 74,000 3,000 114,000 6,000 454,000 25,000 378,0bO 23,000 1,202,000 San Antonio_____________.L__________ 806,000 950,000 859,000 2,589,000 3,363,000 Sherman -----------------~--------~-­ 31,000 39,000 78,000 91,000 127,000 Snyder __________ -------------------Sweetwater _____________:___________ 10,000 25,000 22,000 55,000 12,000 49,000 51,000 137,000 54,000 251,000 Temple ---------------------------­Tyler _________________________!___________ 119,000 22,000 119,000 61,000 , 230,000 55,000 527,000 152,000 593,000 142,000 Waco ----------------------,----------­Wichita Falls______:____:___________ 119,000 89,000 103,000 185,000 143,000 91,000 754,000 341,000 372,000 309,000 Total______________________$ 7,259,000 $ 9,832,000 $ 8,352,000 $24,873,000 $27,238,000 LUMBER Changes in the lumber industry from August to Sep­tember were not of sufficient importance to alter the situation one way or the other. The industry has been rather quiet for some time past, and last month was no exception. Texas mills made a little better showing than other mills serving the Southwest. Markets for lumber THE LUMBER SITUATION* (In Thousands -of Feet) Per cent change from September August August 1929 1929 1929 Preliminary ~eport of . 158 Mills 149 mills in the Southwest-­ Av. production _______ 1,491 1,536 -2.9 Av. shipments _________ 1,426 1,503 -5.1 Av. unfilled orders____ 1,055 1,078 -2.1 Final report of 30 Texas 32 Mills Mills- Av. production ---------­1,858 1,904 -2.4 Av. shipments --------­1,747 1,700 + 2.8 Av. stocks -----------------5,772 5,338 + 8.1 Av. unfilled orders__ _ 940 951 -1.2 - •From the Southern Pine Association. continued weak, and demand is likely to fall off further over the next few months rather than gain. Prices re­mained -about unchanged to slightly lower. Production of 30 Texas mills reporting to the Southern l'ine Association totaled 56,000,000 feet in September against a cut of 63,000,000 feet by 33 mills in August. Out­put per mill declined 2.4%, or from an average of 1,904,­000 feet in August to 1,858,000 feet in September. Ship­ments averaged 1,747,000 feet per mill, a gain of 2.8% from the month previous, while stocks averaged 5,772,000 feet, up 8.1 % from average stocks in August. Unfilled orders were smaller by 1.2% than those in August and averaged 940,000 feet per mill. This is the smallest amount of unfilled orders since December, 1927. At the present rate of production, bookings are equal to but iwo weeks run. SPINNERS MARGIN Spinners margin declined 3 points during September. This wipes out the gain made in the month previous and leaves the ratio within 1 point of the lowest level in the past five yez.rs. A decrease in the ratio at this time is a Yery unfavorable development because it will react as a bearish influence on raw cotton prices. It must be re­called that spinners have been operating on an unfavor­able basis for more than two years and the further decline in manufacturing profits is certainly not con­ducive to additional purchases of raw cotton, especially in the face of probable losses. Spinners are buying as little cotton as possible, and until manufacturing margins are improved, they are most unlikely to increase their purchases beyond immediate needs. This situation is possibly the chief weakening influence in the present cot­ ton market. American middling cotton in Liverpool averaged 10.40d and 32 twist cotton yarn averaged 15.42d in September against 10.38d for cotton and 15.69d for yarn in August. The slight gain in the price of cotton and the lower yarn quotations caused the ratio to decline 3 points to 148 compared to 151 in August and 152 in September last yP-ar. Yarn prices are far too low relative to raw cotton prices. Until recently, normal for the spinners ratio was 160. About the middle of September, wages were reduced from 8% to 10% in most of the manufacturing centres throughout England. Since labor costs amount to ap­proximately 40% of the manufacturing process, the normal (yarn price divided by raw cotton price) must be reduced accordingly. After allowing for the 8% wage reduction, the new normal should be about 157. In other ·words, normally the price of cotton yarn ought to be a.bout 57% above the price of raw cotton. Spinners Margin refers to the ratio between the price of American 32-twist cotton yarn in Manchester and the Liverpool price of mid­dling American cotton. Normally, the price of 82-twist ahould be 60 per cent above the spot price of American middling cotton. If prices change so that the ratio increases, the spinners margin of profit is increased and thereby the demand for cotton la strength­ened. On the other hand, when the ratio decreases, the aplnnen margin is also relatively decreased, and then the demand for eotton falls. SPINNERS MARGIN 1929 1928 1927 1926 January 152 149 174 150 February ~-----151 151 179 160 March -----------148 150 173 156 April _______ 150 149 168 155 May --------152 149 165 163 June ----------------151 148 172 157 July ---------------148 147 167 168 August ___________ 151 154 164 160 September _____ 148 152 156 166 October _____ ______ 148 156 194 November _______ ____ 152 148 187 December _____ ____ 151 147 186 Normal = 157. COTTON BALANCE SHEET The indicated supply of cotton in the United States on October 1 was 15,221,000* bales compared to 14,448,000 bales on October 1, 1928, and a seven-year average on that date of 14,305,000 bales. During September, 546,­000 bales were used in the United States and 726,000 bales were exported, making a total disappearance of 1,272,000 bales for the month. The prospective supply is larger this year because the October estimate was above the September estimate, whereas in 1928 the October r-:iport was materially under the September report. On October 1, the indicated supply of cotton in the United States was 733,000 bales larger than that on October 1, 1928. In the past seven years, changes in the supply on October 1 have totaled 13,629,000 bales and ihe price changes have totaled 3, 702 points, or a change of 27.2 points for each change of 100,000 bales in the •This balance is obtained by adding the sum of the Census carry­oyer on August 1 .and the imports since that time to the latest es­timate of the United States Department of Agriculture and au.il­tracting the exports plus consumption. Linters are not 'included. impply. At the same ratio, an increase of 733,000 bales should be accompanied by a decrease of about 2()0 points from last year's price. On this basis and allowing for price changes, New Orleans spots should have been ,1G.55c per pound on October 1. This price is not adjusted for the low spinners margin. On a replacement basis and based on last year's prices, New Orleans spots should be about 15.75c. However, the price last year was about 150 points below the calculated price, a difference which was later made up. When the 150 points are added to the ab~ve calculated price, New Orlean_s spots, adjusted for price changes and based on United States supplies alone, should be 1 7 .80c or less than 20 points under present quotations (October 17). When European stocks of American cotton are in­ cluded, the price should be somewhat higher. At the beginning of October, stocks in and cotton afloat to Europe were 923,000 bales against 1 119 000 bales at .. . . ' ' ~his time last year, or a decline of 196,000 bales. Apply­;ng the ratio of 27.2 points to this decrease and allowing for price changes and the low spinners margin, ·New Orleans spots on a world basis should be 18.25c or about 14c above current prices. The recent decline has gone far enough in relation to indicated supplies and any lower prices are likely to meet considerable resistance unless crop prospects improve. Statistics for September released by the Cotton Textile Merchants of New York City were rather encouraging from the point of view of operations. Production of cloth totaled 254,000,000 yards while sales were 387,­000,000 yards, or 152.6% of output. Shipments were 9.6% above production for the month and stocks were reduced 5.5% to 417,000,000 yards. Despite the reduc­tion, stocks are considerably over those of last year at this time when they were reported at 345,000,000 yards. l:nfilled orders on October 1 amounted to 398,000,000 yards, or a gain of 37.7% over the month previous, but somewhat be!ow the 439,000,000 yards reported on the rnme date a year ago. I COTTON BALANCE SHEET AS OF OCTOBER 1 IN THE UNITED STATES (In Thousands of Running Bales) Year 1923-1924 1924-1925 1925-1926 1926-1927 1927-1928 1928-1929 1929-1930 Carry-over August 1 2,325 1,556 1,610 3,543 3,762 2,532 2,313 Imports since August 1 11 14 24 25 56 44 49 Estimate Oct. 1 11,015 12,596 14,759 16,627 12,678 13,993 14,915 Total 13,351 14,166 16,393 20,195 16,496 16,569 17,277 Consumption since August 1 978 795 931 1,072 1,261 1,019 1,104 Exports since August 1 927 1,006 1,064 1,172 971 1,062 952 Total 1,905 1,801 1,995 2,244 2,232 2,081 2,056 Balance 11,446 12,365 14,398 17,951 14,264 14,488 15,221 The cotton year begins on August 1. Impor ts in 500-pound bales. AGRICULTURE plants in many sections of the State were too far gone Agricultural conditions are a little less encouraging than they were last month. There was a further shrink­age in crop prospects and farm prices in many cases were lower. The cotton crop is especially disappointing, although some slight improvement may have occurred during the past few weeks in the northern districts of the State. Dry soils have materially retarded fall planting OCTOBER 1 REPORT OF TEXAS CROPS* (In thousands) Indicated Production Harvested 1929 1928 Corn, bushels·-------------------------86,796 99,162 Oats, bushels_________________________ 43,732 35,751 Barley, bushels________________________ 5,075 3,276 Grain Sorghums, bushels______ 39,148 69,000 Tame Hay, tons______________________ 733 836 Apples, bushels________________________ 240 216 Peaches, bushels___________________ 1,953 1,612 Pears, bushels____________________ 457 390 Grapes, tons________________________:___ 1,495 1,440 Figs, boxes__________________________ _ 6,338 Potatoes, bushels___________________ 2,524 2,691 Sweet Potatoes, bushels________ 6,136 8,284 Bro.omcorn, tons______________________ 2 1 Cotton, bales_______ _ _______________ 3,950 5,106 •From U. S. Department of Agriculture. in the truck crops areas, and growth is very slow in those fields which have already been planted. Smaller crrps, coupled with falling farm prices will lower the purchasing power of the State. Interest from now on will be directed towards the truck crops and the citrus fruit deal. COTTON September proved to be another unfavorable month for the cotton crop in Texas. While it is true that rains were general during the early part of the month, the to be materially improved. Moreover, insects have con­tinued to damage the crop and plant diseases have been unusually abundant for a dry year. As a result, the crc•p shows further deterioration and the recent estimate was reduced. The Texas crop is estimated at 3,950,000 500-pound bales by the United States Department of Agriculture based on conditions obtaining October 1. This compares with a harvest of 5,106,000 500-pound bales last yea? and is the smallest crop for the State since 1922. In September, 546,000 bales were used in the United States against 558,000 bales in August and 492,000 bales in September, 1928. Prices were steady throughout most of the month; the trend was slightly upward towards the end but a reaction set in when the October report show­ing a small gain in production was issued. October Xew York futures closed on October 14 at 18.13c compared to 18.54c a month earlier. FRUIT AND VEGETABLE SHIPMENTS Ordinarily, September is the dullest month of the year for the fruit and vegetable industries of Texas. The past month was no exception, and, in fact, it was one of the poorest months on record. Shipments were unusuallv small and markets lacked interest. Possibh-the chief cause for the small shipments is the long dr~uth during the summer. It appears, therefore, that the damage from ~his source to the State is even greater than \\·as antici­pated. Rains during the past month were beneficial, but farmers are still experiencing some difficulty in fall plant­ing because of the dry soils. There were but 90 cars of fruits and vegetables shipped from Texas farms during September. This compares with 828 cars in August and 96 cars in September last year. A total of 3,365 cars went out in the third quarter against 5,630 cars in the same period of 1928. The sharp reduc­tion in the three months just passed eliminates the gain during the first half and brings total shipments for the year to date slightly under those for the first three quar­iers last year. Most of the decline is accounted for by the smaller shipments of onions and watermelons. There was but one car of onions loaded in September making 55 for the third quarter, compared to 34 in Septemlier and 502 in the third quarter last year. Thirty-four cars of water­melons went out in September and 2,036 in the quarter, whereas 4,156 cars were loaded last year in the third quarter. Shipments of tomatoes, potatoes, cucumbers, cantaloupes, and carrots were also under those in the third quarter of 1928. On the other hand, 551 cars ~f peaches were shipped in the quarter against 266 cars in that quarter last year; and 213 cars of pears were loaded against only 20 in the same three months of 1928. Price movements were rather narrow and very much mixed. Potatoes advanced sharply after the last report indicating a crop materially under last year's harvest Peaches and pears were also higher. Many of the smalle1 vegetables remained about unchanged. ' TEXAS FRUIT AND VEGETABLE SHIPMENTS* (In Carloads) September 1929 Mixed vegetables________________________________________ 1 Cabbage -----------------------------------------­ Sweet potatoes__ ______________________________________ 40 Onions ------------------------------------------------------­ 1 1 Tomatoes ------------------------------------------­ 1 Potatoes --------------------------------------------------­Cucumbers ------------------------------------­Watermelons ---------------------------­ 34 Cantaloupes ---------------------------------2 Peaches -----------------------------------­Peppers --------------------------------------------­Grapes ---------------------------------------------­Pears --------------------------------------------------­ 3 Apples ----------------------------------------7 Deciduous fruits___________________________ Carrots ------------------------------­Total_______________________________ 90 •From the United States Department of Agriculture. LIVESTOCK The livestock industry reflects a two-sided picture, the favorable developments about offsetting the unfavorable influences. On the one hand, ranges improved consid­erably after the drouth ended, and animals gained in flesh. Then, too, actual loss was small and there is sufficient hay i11 most producing areas to insure feed for winter. Against these favorable factors should be placed the decline in prices of all classes of meat animals and many livestock l roducts, notably wool and hides. The outlook for the in­dustry over the next few months is rather obscure, but any improvement of consequence is likely to be slow. Ranges improved rapidly after the rains early in Sep­tember, but additional moisture is needed in many of the areas that were extremely dry. The new growth of grass a:ld weeds has been checked and it will take considerably more moisture to furnish sufficient feed for winter graz­ing-. Cattle ranges on October 1 were rated at 81 % of normal by the United States Department of Agriculture. This compares with 76% a month ago and 89% on Octo­ber 1, 1928. Cattle were placed at 83%, the same as last month, but 6 points under the condition a year ago on that date. Range trading has been very quiet over the past two months indicating that re-stocking is not general. The fall movement is likely to be rather small this year because grass fat cattle are scarce. Cattle feed­ing this year is expected to be on a smaller scale than it •vas last year. August 1929 16 10 539 88 9 163 3 828 September 1928 1 29 34 1 2 14 15 96 Third Quarter 1929 25 56 55 228 29 1 2,036 134 551 1 25 213 10 3,365 1928 3 5 52 502 296 87 9­ 4,156 214 266 5 3 20 3 11 5,630 Sheep and goat ranges gained 5 points during the month and were placed at 79% of normal against 98% on October 1 last year. Ranges are getting dry again and the growth of weeds and other fall feeds is very slow. Rains are badly needed in many districts. The condition of sheep was rated at 84%, up two points from last month; and goats were placed at 87%, also up 2 points in the thirty days. Despite the improvement, sheep and goati are far below normal at this season of the year. Fall shearing is about over and most of the wool and mohair has been sold or stored. Movement of sheep to market hai been heavy but local trading is almost negligible. Present prospects are that sheep feeding will be expanded over that of 1928. Poultry and egg markets were steady most of the month. Eggs were especially strong with prices. several cents above those in September last year. Receipts are now on the increase, however, and markets are beginning to weaken. Cold storage holdings of poultry are consid­erably in excess of last year's supplies at this time. The amount of butter in storage is very large, and demand is not increasing in proportion. As a result, prices de­clined slightly towards the end of the month. Total receipts of livestock at Fort Worth show a season­al increase over those in August and were practically the same as shipments in September la~t year. During the month, 184,327 head were unloaded in Fort Worth, ac­cording to the Fort Worth Stock Yards Company, com­ pared to 184,939 in September, 1928. Receipts for the third quarter totaled 505,503 head against 556, 199 head in the third quarter a year ago. Shipments of calves, cattle, and hogs declined sharply while sheep receipts gained more than 30%. Prices on all classes of animals except top lambs de­clined and reached the lowest levels so far this year. Prime beef steers on the Fort Worth market for the WP.ek ending October 12 were bringing 12 %c for tops but the bulk went mostly at 8 %c, or a decline of le from the month previous. Best calves sold for 10 1h c, campared to 11 %c on September 15, whi'e the handy-weight class of hogs lost 1h c and went largely at 1Oc. Muttons brought 6%c against 7c last month, and top lambs were bringing llc to 11 1hc against 10 1/~c to llc a month <'arlier. LIVESTOCK RECEIPTS AT FORT WORTH* Cattle ------­-----------------------------­· Calves -------------------------------­Hogs ----------------------------------­­Sheep ----------­--------------------­September 1929 67,824 44,281 25,914 46,308 August 1929 60,707 32,359 27,351 35,391 September 1928 87,415 37,536 27,960 32,028 Third Quarter 1929 1928 197,126 266,645 102,383 112,956 77,426 79,020 128,568 97,578 TotaL________________________ 184,327 155,808 184,939 505,503 556,199 •From the Fort Worth Stock Yards Company. Those wishing the Texas Buaineu Review regularly will receive it without charge upon application Publications of the Bureau of Business Research No. 2. "A Market Analysis of the Cattle Industr11 of Research Monographs published by the Bureau of Texas," by George M. Lewis. Price, $1.00. Business Research of the University of Texas now avail­ No. 3. "What Place Has the Advertising Agency in able are: Market Research," by William J. Reilly, PH.D. Price, No. 1. "The Possibilities of Cotton Manufacturing in $1.00. Texas," by Rudolph Grossmann. Price, 50 cents. BUREAU OF BUSINESS RESEARCH The University of Texas A. B. Cox_______ _____ ________________________________________________________ Director F. A. BUECHEL________________________________________________Assistant Director GEORGE M. LEWIS______________________________________ Livestock Specialist ELMER H. JOHNSON______________________________ Jndustrial Geographer RUDOLPH GROSSMANN______________________________] ndustrial Engineer BERVARD NICHOLS___________________ Editor Texas Business Review HERSCHEL wALLING________________ ______ ~______Research Accountant ARTHUR HERT____________________________Assistant in Market Research MARTHA ANN ZrVLEY_________ __________________________________________ secretary MILDRED DISCH_____________________________________________________stenographer STUDENT ASSISTANTS Esther Lynn Dan Perry Charles Zivley R. V. Shirley Wade Bartlett Seth Lowther