BUREAU OF BUSINESS RESEARCH The Univeraity of Texu A. B. Cox__________________________________________________________________.I)ifrector F. A. BUECHEL_______________________________________..Assistant Director ELMER H. JOHNSON_____________________________ Jndustrial Geographer RUDOLPH GROSSMANN_____________________________J ndustrial Engineer HERSCHEL wALLING___________________________Research Accountant ARTHUR HE&T_________________________..Assistant in M arket Research l. B. WILLIAMSON____________________Editor, Texas Business Review R. V. SHIRLEY__________________________ Assistant in Finance Research MARTHA ANN ZIVLEY______----------___________ _______________________ Secretary MILDRED DISCH_____________________________________________________stenographer Entered as second-class matter on May 7, 1928, at the postoffice at Austin, Texas, under the Act of August 24, 1912. Those wishing the Texas Business Review regularly will receive it without charge upon application The University of Texas VOLUME V, NUMBER 7 August 26, 1931 BUSINESS on the whole continues dull and is mark­ing time awaiting seasonal fall expansion. Trade publi­cations feel that trade news over· the near future will be inclined to continue to be unfavorable, but there are a few f actors which seem to be moving toward better conditions. Notable among these factors are the increase in consumption o/ cotton and wool, a slight gain in steel output during August, and a check to the declining wholesale price levels. In Texas, the situation is spotty. The condition of the petroleum industry has held the center of the stage in Texas for sorne time, and the most important recent developments are the approximate physical delineation of the areal extent of the new East Texas oil field and the establishment of martial law in that same field to stop production there until the proration law passed by the Legislature comes into effect. Gasoline consump­tion has been holding up during the summer. While the price of cotton has dropped to levels lower than have existed since 1914 and is considerably below bulk line cost of production, cotton is, on the long run, a good investment. The cotton textile industry in Texas and in the United States too is looking somewhat better, with the index of spinners margin at the highest level since October, 1926, and unfilled orders considerably higher than they have been for sorne time. The condition of both crops and ranges is unusually good, the August 1 crop report of the United States Department of Agriculture indicating that production for 1931 will be considerably higher than in 1930. With wholesale prices at levels lower than have obtained for more than fifteen years, and retail prices down considerably from last year, it is not surprising that measures of business act1v1ty in terms of actual dollars should be so low. In terms of deflated values, July sales of Texas department stores compared quite favorably with those for the corresponding month of last year, and building permits are 25 per cent below those for July, 1930 instead of the 37 per cent drop in actual dollar volume of permits. Stocks of Portland cementare the highest for any July on record, and unfilled orders at the end of July of the lumber milis reporting to the Southern Pine Association are 24 per cent less than on August 2, 1930. Industrial power consumed in Texas during July was 7.8 per cent less than in the corresponding month of 1930 and 8.2 per cent higher than in June, 1931. The number of commercial failures increased slightly as compared with that in July last year, but the liabilities of the failing concerns are lower than they have been in any other July sirice 1925. Oil companies made up about one-fourth of the total number of corporations granted charters by the Secretary of State during July, but at 169, the number of new corporations is about 6 per cent lower than it was either in June, or in July of 1930; the number of foreign permits granted is the highest on record for July. Automobile registrations continued on the downward trend during July, total registrations for the year so far being 26 per cent less than in the first seven ~onths of 1930. July average weekly wages per worker of the 640 firms reporting to the Bureau of Business Research in coi:iperation with the United States Bureau of Labor Statistics remained about the same as in }une, while the number of workers dropped 2 per cent to 76, 786 as com­pared with 78,365 in June. FINANCIAL Checks cashed during July in the Dallas Federal Reserve District amounted to $534,000,000 as compared with $584,000,000 in June, or a decline of 8.6 per cent. Bank debits are 20 per cent lower than in July of last year. Demand deposits, at $268,000,000, are the same as at the end of July last year and slightly above those reported at the end of June, 1931. Time deposits, on the other hand, are clown $10,000,000 as compared with July, 1930, and $7,000,000 as compared with June, 1931. Government securities owned declined $7,000,000 from the June figures to $72,000,000 at the end of July, but were 16 per cent higher than for the corresponding period last year. The following data are taken from the Federal Reserve Board's Report on the Condition of Reporting Member Banks and weekly statements on Bank Debts: (In Millions of Dollars) July, Ju ne, Jul y, 1931 1931 1930 Debits -------------------------------------------­·· $ 534 584 672 Deposits (Total) -------------------------------­Time ---------------------­--­--------­------------­ 409 141 412 148 419 151 Demand ----------­----------------------------­ 268 264 268 Borrowings from Federal Reserve ____ 2 1 3 Government Securi ties Owned_____________ 72 79 62 CaII loans for the week ended August 1 were quoted al l llz per cent as against 2 per cent for the correspond­ing period in 1930, while the rate for 60-90 day time Ioans stood at l llz to 114 as compared with 2% to 214 Iast year. Four to six months paper was quoted at 2 to lllz as compared with 31,4 to 2% on August 2, 1930. COMMODITY PRICES Bradstreet's index of wholesale commodity pric~s was the only one of the five listed below which went up from June to July, though the increase from $8.78 in June to $8.79 for July is so slight that it is significan! only in that it represented the second consecutive month in which this index has shown an increase. The United States Bureau of Labor Statistics alI-commod'ty whole­sale price index remained the same as in June, while Dun's dropped from $146.60 in June to $145.60 in July. All three of these indexes for July are at the lowest levels for more than fifteen years. The index of prices farmers receive stood at 79 in July as against 80 in }une and 111 in July, 1930, but the index of prices farmers pay did not experience so larg~ a relative decline as did the index of prices farmers rece1ve. July, Ju ne, Jul y. 1931 1931 1930 Bureau of Labor Statistics --------------70 70 84 Dun's ---------------------------·-----------145.60 146.60 169.30 Bradstreet's ---------------------------------·-8.79 8.78 $ 10.45 Fann Price Index * .. ---------------·--------79 80 111 Prices Farrners Pay*-------------------·--129 130 148 •t.Jnited ~tates Burcau of Agricultura] Economic~. COMMERCIAL FAILURES While it is true that the number of commercial failures recorded in Texas in July was greater than it was Iast year, there was a drop of 17 per cent in the total liabili­ties of the failing concerns as compared with 1930. Even though the number of failures in July increased from 41 in 1930 to 45 this year, total liabilities for July were $725,000 as compared with $872,000 in July, 1930, and were the lowest for any July since 1925. Average liabilities per failure, at $16,000, were 24 per cent below those for the corresponding period Iast year. The increase of 12 per cent in the number of failures as compared with June is significant because usually there is a seasonal drop of about 4 per cent between June and July. Commercial failures, as reported weekly to the Bureau by R. G. Dun and Company, were: Jul y, June, July, 1931 1931 1930 Nurnber -----------­----------------­45 Liabilities ________________________$725,000 Assets __________________________________ $365,000 40 $458,000 $242,000 41 $872,000 $317,000 No bank failures were reported. In the United States, the condition as reported by Dun' s Review was exactly the reverse from that in Texas, the number of failures decreasing 2.3 per cent as com­pared with last July, while the total liabilities increased 53 per cent fom $39,926,000 to $60,998,000. TEXAS CHARTERS Oil corporations, most of which were organized to operate in the East Texas field, made up practically one-fourth of the total number of Texas companies granted charters by the Secretary of State during July. At 169, the number of new corporations organized is 5.6 per cent less than it was in either June, 1931 or July of last year, and is the lowest for any July since 1924. Total capitalization amounted to $8,409,000 in July, or 15 per cent less than in June, and 47 per cent smaller than in July of Iast year. The number of oil corporations increased 300 per cent from July of Iast year, while one-third more manufac­turing concerns were chartered in July this year than in the corresponding month of 1930. Charters granted by the Secretary of State were as follows: July, Ju ne, July, 1931 1931 1930 Capitalization (In Thousands of Dollars) __________$ 8,4,()9 $ 9,867 $ 5,703 umber -----------------------------------169 179 179 Classification of New Corporations : Oil ---------------------------------------40 37 10 Public Service ---------------------4 4 1 Manufacturing -------------------21 14 16 Banking-Finance ---------------------9 10 3 Real Estate-Building ____________ 12 13 16 General ------------------------------83 101 133 Foreign Permits ---------------------44 33 34 Of the total number of corporations chartered 12 or 7.1 per cent, had capital stock amounting to ~or~ than $100,000. There were 31 charters granted to corp­orations with capital stock of less than $5,000. Forty-four out-of-state corporations were given permits to operate in the State; this number is the largest for any July for which the Bureau has records. Activitv in the petroleum industry in Texas is further evidenced by the fact that 24, or 54 per cent, of the total number of permits granted were to corporations engaged in various phases of the petroleum industry. STOCK PRICES The Bureau's index of railroad stock prices made up the loss of 1 point experienced in June and rose to 112 for July, while the index of industrial stocks declined 8 points to 168. This decline is in line with the sub­stantial drop in earnings for the first half year. INDEX OF INDUSTRIAL STOCKS Average High 1923-24-25 =100 1931 1930 1929 1928 1927 January -------------------195 225 264 245 167 February -····-········---·-211 236 265 233 174 March -····-···-·····--··-···· 211 252 255 239 184 April ----------191 264 256 255 194 May ····----···--·-----·175 254 245 260 199 June 176 239 242 243 203 July ----··--·-·-···-····-168 237 253 246 208 August --------------------236 256 247 210 September --··----___ 242 255 259 224 October ----------------------220 247 257 225 November -------------­ 206 213 262 226 December ---------------217 238 192 255 INDEX OF RAILROAD STOCKS Average High 1923-24-25 =100 1931 1930 1929 1928 1927 216 145 February -·--· ----143 199 218 178 157 March 201 216 183 164 January -··-·------··--· 134 195 183 -·-·-----137 April -······--··-··----117 206 209 191 175 May ······---····-----111 199 217 199 179 J une -···-···--·-··----110 185 218 193 190 July --···-······--·--··-112 180 238 197 192 August -···-----·-__ 178 239 203 190 September --··--··---___ 184 238 215 189 October -------------230 186 157 215 November ---------------144 197 221 182 December -----------197 183 131 212 DEPARTMENT STORE SALES July retail sales as reported by 86 Texas department ~tores were $3,255,0~0, or 17 per cent less this year than m 1930. In comparmg sales with a year ago, allowance ~hould be made for declines in retail prices; it is felt m the trade that prices in department stores are about 20 per cent below last year's, and on this basis, the July volume of business was greater in 1931 than in 1930. Tyler was the only city in the State which showed an increase in the dollar value of sales in July as com­pared with last year. . Collect_ions in Texas have been slowing up slightly smce sprmg. In the United States, sales both for July and for the year-to_-date were 8 per cent less in 1931 than in 1930, accordmg to the Federal Reserve Board. Percentage changes in sales as reported by 86 stores are as follows: TEXAS DEPARTMENT STORE SALES P crcentage Change in Sales Number Jul y, Jul y, Year-lo-date o! 1931 1931 1931 Stores from from from Report- July, Ju ne, Yea r-to-date ing 1930 1931 1930 Abilene -···········-··················· 3 -33.4 -23.9 -20.3 Austin ······-···-····-····-···-····­ 6 -13.6 -23.9 -11.2 Beaumont ·····-·-····-···-·········· 5 -29.4 -22.4 -23.9 Corpus Christi ···-················· Dallas -···-···-····-·········-······· 3 6 -0.1 -12.9 -5.6 -25.0 + 8.8 -14.4° El Paso -···-·-···············--···· 3 -24.7 -24.7 -17.9 Fort Worth --····-····-···-····-· 7 -11.1 -24.7 - 5.7 Galveston -···-····-····-···-······ 4 -13.9 -16.6 - 6.8 Houston ·····-·····-···-·····-········ 8 -14.6 -25.9 -11.4 Port A11hur -····-···············-·­ 4 -13.0 -16.4 -12.3 San Angelo ·····-····-···-····-·· San Antonio -···-················­ 3 9 -24.8 -21.7 -8.6 -30.9 -21.4 -2.7 Tyler Waco -···-···-····-···-····-········· -······-·-····-··········-········ 3 4 + 19.6 -4.1 -35.2 -25.7 -- 7.5 8.0 Yoakum ···-·····-··········-····-····· 3 -22.6 -31.5 -16.8 STATE -···-····-···-···-···-·····86 -17.1 -25.l -12.0 Sales of 86 Comparable Stores : 1931 1930 J uly -····-·-·-····-···················-···-·····-· 3,255,000 $ 3,925,000 June ···-····-····-···-····-···-··-··········-··· 4,374,000 Year-to-date ···-····-··········-··--·········· 30,780,000 34,839,000 CAR LOADINGS Revenue freight loadings for the five weeks ending August 1 in the Southwestern District as reported by the American Railway Associat'.on, totaled 317,780 cars, or 6.7 per cent less than the 340,456 cars reported for the corresponding five weeks in 1930. The decrease in the Southwestern District was not nearly so heavy as that in the United States, however, total loadings for the country as a whole totaling 3,688,­060 cars in the five weeks ending August 1 as compared with 4,475,391 cars in the corresponding period of 1930. The decline amounted to 17.6 per cent. AUTOMOBILE REGISTRATIONS Automobile registrations in Texas during July con­tinued on a downward trend as compared with last year, total registrations of new passenger cars in nine of the leading counties of the State dropping to 2,892 as com­pared with 3,873 in the corresponding month last year. The decline in registrations for the year to date is 26 per cent. Approximately 85 per cent of the total decline in registrations from last July was due to the drop in Group I, which includes the lower-priced cars. Group I this July makes up only 70 per cent of the total number of registrations, as compared with 74 per cent last July. Registrations of new passenger cars in the nine leading counties of the State were: July, July, Year-to-date 1931 1930 1931 1930 Group 1 ____________________________________.2,017 2,847 15,012 20,489 Group II ________:______________ ________ 170 188 1,187 2,005 730 4,823 5,798 Group III ----------------------------------627 108 591 825 Group IV ---------------------------------78 Total ____________________________________ 2,892 3,873 21,613 29,117 Registrations of 47 makes of cars in Bexar, Dallas, El Paso, Galveston, Harris, McClcnnan, Nueces, Ta rrant, and Travis Counties are included in this summary. These makes have been grouped into four classes on a price and horse powet basis : Group 1 includes cars in the lowest price range; Group 11, light sixes; Group llI, thc medium priced cars; and Group IV, the high priced cars. EMPLOYMENT The number of workers on the payrolls of 640 Texas firms reporting to the Bureau of Business Research and thc United States Bureau of Labor Statistics declined 2 per cent from 78,365 in June to 76,786 in July. Aver­age weekly wage per worker at $26.27 in July compared with $26.39 for June. The number of workers as of July 15 of the firms reporting was as follows: Num -P er Cent Change her Workers from from of July, Ju ne, July, June, July, Firros 1931 1931 1930 1931 1930 - Austin --------------31 1,358 1,309 1,411 + 3.7 3.8 Beaumont -----37 5,454 5,661 6,625 3.7 -17.7 ________________131 -12.2 Dallas 15,562 16,054 17,723 -3.1 El P aso ----------44 2,273 2,395 3,178 -5.1 -28.5 Fort Worth ______ 45 5,165 5,314 5,762 -2.8 -10.4 Galveston ________ 16 940 1,049 1.102 -10.4 -14.7 23,938 24,087 28,868 0.6 -17.1 Houston -----------83 San Antonio ---79 7,732 8,397 _9,306 7.9 -16.9 Waco -------------29 959 1,006 1,092 4.7 -12.2 Wichita Falls ____ 41 1,038 997 1,452 + 4.1 -28.5 Miscellaneous Towns _________ 104 12,367 12,096 16,774 + 2.2 -26.3 ____________________ 640 State 76,786 78,365 93,293 2.0 -17.7 BUILDING Demand for residential building, anticipated earlier in the year, has failed to materialize so that July building permits in the 35 Texas cities reporting to the Bureau of Business Research at $3,728,000 were 5.8 per cent below the June figures and 37 per cent under July of last year. At no time since the Bureau has records have total permits for July gone so low. Only in Eastland, Fort Worth, Galveston, Lubbock, Marshall, San Angelo, Tyler, and Wichita Falls were there recorded increases in the dollar value of building permits as compared with last year. The decline from June to July of 5.8 per cent is in line with the average for the three years 1927-1928­1929. Building permits as reported to the Bureau of Business Research were as follows: (In Thousands of Dollars) July, Junc, July, 1931 1931 1930 Abilene ---------------------------------------------$ 11 $ 9 $ 62 Amarillo ------------------------------------------162 148 186 Austin ---------------------------------------------218 146 295 Beaumo.nt --------------------------------------72 45 151 Brownsville ---------------------------------------31 117 44 Brownwood -------------------------------------8 285 18 Cleburne ------------------------------------2 1 25 Corpus Cluisti ----------------------------34 93 40 Corsicana ---------------------------------------26 4 188 Dallas ----------------------------------------------274 339 1,315 Del Rio ---------------------------------------4 29 8 Denison --------------------------------------------3 1 52 Eastland -------------------------------------------1 1 El Paso ------------------------------------------69 74 175 Fort Worth ------------------------------------354 310 229 Galveston ---------------------------------------83 879 60 Houston -----------------------------------------1,300 1,055 1,841 Jacksonville --------------------------------------5 1 8 La.redo ---------------------------------------------23 1 3 Lubbock ------------------------------------------46 4 42 McAllen ----------------------·-----------------4 2 7 l\f.arshall ------------------------------------------11 13 4 Paris ----------------------------------------------2 6 4 Plainview ----------------·-------------------6 5 Port Arthur ------------------------------------274 31 371 Ranger ------------------------------------------1 San Angelo --------------------------------151 15 . 67 San Antonio ------------------------------238 131 415 Sherman ------------------------------------1 5 49 Snyder --------------------------------------1 15 Sweetwater --------------------------------3 84 22 Temple -------------------------------------------35 28 78 Tyler -----------------------------------------179 30 59 Waco -------------------------------------------34 59 74 Wichita Falls -------------------------------64 9 9 Total -------------------------------------------$3,728 $3,956 $5,922 Total contemplated construction in Texas as reported by the F. W. Dodge Corporation was $10,917,000 for July, as compared with $18,668,000 in June, and $17,­758,000 in July of 1930. In the 37 Eastern States, July construction contracts were 22 per cent less than in 1930, according to Dodge, with the residential, non-residential, and public works and utilities groups all sharing in the general loss. LUMBER Decreased demand in the building industry as com· pared with 1930 is reflected in curtailment of activity in the lumber mills reporting to the Southern Pine Associa· tion. Not only was July average weekly production per unit substantially below that for last year, but mills also entered the month of August with average unfilled orders amounting to 24 per cent less than they had on August 2, 1930. As compared with the previous month, July makes a better showing. A decline of 9.9 per cent in production as compared with June was accompanied by an increase of 3.6 per cent in shipments. For the first week in July, average shipments of the 124 units reporting were 235,­000 feet, and rose to an average of 313,000 feet for the 132 units reporting for the week ending August 1, the average shipments for the month exceeding production by 25 per cent. But this increase in shipments con­tributed to the decrease in unfilled orders so that at the end of July, unfilled orders were 4.4 per cent behind those at the end of the previous month. Reports from milis in the southern pine area as reported to the Southern Pine Association may be sum­marized as followed: (In Thousands of Feet) July, June, July, 1931 1931 1930 Average Weekly Production per Unit -----------­--­--------­Average Weekly Shipments per Unit ····­····-···----------------···­Average Weekly Unfilled Orders at End of 1onth ____________________ 209 261 6~0 232 252 659 300 277 826 PETROLEUM The East Texas situation continues to hold the cen:er of attention of the oil industry. During the period from November 5, 1930, to July 29, 1931, the East Texas field has produced a total of slightly more than 45,500,000 barreis of oil-which is approximately 5 per cent of the total production of the entire United States for the year 1930. lt may be noted that the 1,000,000 barre} mark for the East Texas field was first passed for the week ending April 1, 1931. The production of this field for the week ending July 29, 1931 was 4,183,088 barreis. According to the Pipe Line News, 17 trunk lines, with 1,845 miles of trunk oil lines have been completed, are under construction, or planned for the immediate future to serve as outlets of this field. These will have an aggregate capacity when ali are completed of 706,500 barreis daily. In addition, there are 45 short lines to loading racks by which 100,000 barreis are being shipped out daily by tank cars. Also there are 7 local refineries in the area which can take care of 45,000 barreis daily, and when severa} plants now under con­ struction are completed, this capacity will be about 75,000 barreis daily. A most important factor in the immediate oil situation in Texas and probably for the nation as a whole has been the approximate physical delineation of the areal extent of the East Texas oil field. This field is authorita­tively reported as including an area of about 180 square miles whose reserve has been variously estimated at from l,000,000,000 to 2,000,000,000 barreis. The major portion of this field occurs in Gregg and Rusk counties, with extensions into Upshur and Smith counties. By way of contrast, the great areal extent of the East Texas field with its more than 120,000 acres may be compared with the area of the Yates field of 15,000 acres, with the Kettleman Hills (California) field of 15,000 acres, or the Oklahoma City field of 8,000 acres. Another factor which may have considerable impor­tance in the oil industry is the passage recently of the new oil conservation law by the Texas Legislature. The recent shutting down of a very large share of Oklahoma production by a decree of the Governor of Oklahoma furnishes still another factor of the many-sided problems in the production of oil and gas as essential raw ma­ terials. Daily average production in the various fields as reported by the American Petroleum lnstitute was as follows: (Barreis) July, June, J uly, 1931 1931 1930 Panhandle ------------------58,640 59,062 101,488 North Texas ------------------58,920 57,462 76,512 West Central Texas._________ 26,770 27,962 56,600 West Texas -------------·-···· 202,660 211,875 297,925 East Texas ---------------504,631 412,237 39,750 Southwest Texas --·-········ 57,460 59,012 73,300 Coasta1 Texas --·-··········-135,349 145,437 183,075 State -····-···-··········-·····--1,044,430 973,047 828,650 United States -----------·2,466,600 2,465,587 2,525,275 lmports --···-······--------214,542 199,919 302,321 Retail sales of gasoline in Texas, as indicated by the State Comptroller's tax reports were 77,272,000 gallons in June, as compared with 73,090,000 gallons in May, and 73,008,000 gallons in June, 1930. New field developments in the State, according to the Oil Weekly were: July, Ju ne, July,1931 1931 1930 Permits for ew Wells............________ 427 531 436 Wells Completed --------···--········-···· 562 683 750 Producers -···-----------------------······ 378 431 397 lnitial Production Un Thousands of Ban-els) ······-···· 2,614 2,727 248 CEMENT In line with the usual seasonal tendency, production of Portland cement in Texas increased from 634,000 barreis in June to 646,000 barreis in July; but this increase of 1.9 per cent is rather small in comparison with the increase of 13 per cent between these two months in the Bureau's index of cement production. July pro­duction this year is 10 per cent greater than it was in 1930. Shipinents, too, increased slightly, reaching 696,000 barreis in July, as compared with 693,000 barreis in June, but were 1.8 per cent smaller than in July, 1930. The usual seasonal increase is 10 per cent. Although stocks of Portland cement in Texas mills at the end of July were 7.3 per cent less than in June, they are 11 per cent greater than in July of 1930 and are the highest for any July on record. Activity in cement mills as indicated by reports of the United States Bureau of the Census was as follows: On Thousands of Barreis) July, June, July,1931 1931 1930 Production --------------------646 634 585 Shipments -------------------------------696 693 709 Stocks -----------····-···--------------626 675 564 In the United States, July cement production was 19 per cent under that for last year, with July shipments and stocks 23 per cent and 1.3 per cent respectively smaller than in the corresponding month of 1930. Plants were operating at 62 per cent of capacity as compared with 77.8 per cent in July, 1930 and 66 per cent in June, 1931. COTTON MANUFACTURING Perhaps the most encouraging feature of the co:ton mill situation in Texas is the large number of unfi.lled orders with which the mills began the month of August. At 6,321,000 yards, unfilled orders at the end of July were 19 per cent greater than those at the end of June and 43 per cent greater than at the end of July last year. At the present rate of production, unfilled orders are almost two months' run. With July production 1.3 per cent less than in }une and 20 per cent less than in July last year, shipments showing substantial increases over both last month and July, 1930, and a good supply of unfilled orders, the statistical position of the industry made considerable improvement during July. While it is true that four of the Texas mills are closed down and that another six of them operated for only about half of the month, the other 11 mills operated on an average of approximately 22 days, with shifts of ten hours a day. Reports to the Bureau of Business Research from the 21 Texas mills are as follows: July, June , Ju ly, 1931 1931 1930 Bales of Cotton Used_________ 4,261 3,834 5,088 Yards of Cloth: Produced -----------­-------------­ 3,463,000 3,510,000 4,323,000 Sold -------------------------------­4,736,000 4,020,000 3,616,000 Unfilled OrdeI"S ---------------­ 6,321,000 5,328,000 4,432,000 Active Spindles ------------------­ 148,574 149,678 179,883 Spindle Hours _____________________41,570,000 29,764,000 37,290,000 COTTON TEXTILE SITUATION According to figures released by the Asso~iation of Cotton Textile Merchants of New York, produ~tion of cotton cloth in the United States was 192,545,000 yards, or a little over 48,000,000 yards per week, whereas total sales during the same four weeks were only 158,353,000 yards. During July last year production was only 166,­000,000 yards and sales were 180,000,000 yards. It should be noted, however, that stocks now are only 269,­449,000 yards compared with 456,000,000 yards last year. Moreover, unfilled orders last year amounted to only 222,000,000 yards, and on July 31 this year they were 277,597,000 yards. As a rule, August and Sep­tember are months of increasing sales of textiles. These facts coupled with the favorable spinners margin indi­cate increased activity in the textile business. SPINNERS MARGIN Spinners margin for July averaged 180, two points better than in June and the highest since October, 1926. Both cotton and yarn declined during the month but cotton declined more than yarn. During the last week in July the margin reached 186. Moreover the actual cents margin improved. The price of spot middling cotton in Liverpool for the first week in July averaged 5.50 d and 4.93 d for the last week. Yarn declined from an average of 9.50 d in the first week to 9.12 d in the last week of July. The decline which carne as a result of the Government estímate on August 8 served to further widen the ratio margin to 203 with the price of Liverpool spots August 14 at 3.80 d and Manchester 32-twist yarn averaging 7.75 d. The actual pence margin held nearly the same. 1 1 .SPINN( ll:S l.IAAGIN 1 1 ~IAL,.~1 1 1 'P\ ­ u ~ V\ A "º ", I/\ 7 ~ \ o V V vy " ­ '-' v o o o ·~l1 "' COTTON Cotton is once again on the hargain counter. The price might go a little lower under pressure, but it is considerahly helow bulk line cost of production and, in the long run, a good investment. A numher of factors have contributed to the deplorable situation. The most important of these have been (1) the very had business conditions which have prevailed for nearly two years, (2) the unprecedented supply which is the result of the coincidence of a record world carryover of American cotton of 9,000,000 hales and the very large crop of 15,584,000 bales estimated for this year, and (3) finall y the uncertainty prevailing in the cotton market itself due to many causes such as the Farm Board and its policy in disposing of its already large holdings, uncertainty as to the extent Congress may attempt to limit the free operation of markets, and uncertain political conditions in a large part of the world. The United States Government's estimate of 15 584 000 bales of 500-pound gross for the United St;tes 'was perhaps 1,500,000 bales more than was expected. That many traders were of the opinion that the estimate was too high is attested by the fact that the decline in price was not _in propo~tion to the indicated increase in supply over pnvate estlmates. The Government estimate of production for Texas was 5,018,000 hales, the third larg­est crop on record for Texas. COTTON BALANCE SHEET lndicated supply of cotton in the United States plus current production on August l, 1931 was 21 953 000 bales, approximately 2,000,000 more than on A~gu~t 1, 1926, the previous high record, and ahout 3,000,000 bales more than on August 1, last year. Ga~side's preli~inary estimate of world carryover of American cotton is 9,000,000 hales, and the indicated world supply of American cotton for this year is 24,584,­000 hales, also a new record. Due hoth to a large carryover and a large prospective crop, the supply of cotton in the United States is ahout 3,000,000 bales more than on August 1 last year. The total change in supply on August 1 for the seven preced­ing years was 9,725,000 hales and the corresponding change in the index price was 2,373 points or 24.4 points change in index price per 100,000 hales change in supply. When this ratio of 24.4 points per 100,000 hales is applied to the 3,061,000 hales increase in supply over last year, the indicated price should he about 7 cents. When this price is adjusted by the Bureau of Labor Statistics index of wholesale prices, which is now 70, an actual price of ahout 5 cents hased on supplies in this country alone is indicated. The portion of the supply of American cotton known as European port stocks and stocks afloat to Europe is 284,000 hales more than on the same date last year. If the same point ratio is applied to this portion of the supply as used ahove the indicated price of New Orleans middling spot cotton should he 4.50 cents hased on supply only. When the ahove price of 4.50 cents is adjusted for the spinners margin of 180, the indicated price is 5.16 cents for New Orleans middling spot cotton hased on the arithmetic method of calculation. lt has heen pointed out in previous issues that the cotton supply-price curve is not a straight line, that supplies larger than the average caused less than aver­age points change in the price, and that supplies less than average caused more than average change in price. On August 1 when the indicated supply is more than 17,000,000 bales, the average points change in price per 100,000 bales change in supply is only 14. If this ratio, which under the circumstances seems more nearly cor­rect, is applied rather than the average of 24.4 points actually used above, the indicated price for New Orleans middling spot cotton is 7.86 cents. COTTON BALANCE SHEET IN THE llNITED STATES AS OF AUGUST 1 (In Thousands of Running Bales) Carry· Imporu over since Year Aug. l Aug. 1* 1,556 1925-1926 ---------------·---------­1924-1925 ------·····---------------·------­ 1.610 1926-1927 -------------------­ 3,543 1927-1928 -----------------------· 3,762 1928-1929 ----------------2,536 1929-1930 ----------------------­ 2.313 1930--1931 ------4,530 1931-1932 ---------------------------------­ 6,369 *In 500-pound bales. AGRICULTURE Favorable weather generally and precipitation sligh~ly above the average contrihuted to the improvement wh1ch was made by practically all crops in Texas during July. There are a few sections where rainfall was scant durin~ July, hut over the State as a whole hoth crops and pastures averaged fair to good in condition. The August 1 crop report as prepared by the United States Bureau of Agricultura! Economcis shows that ali Texas crops promise larger production than a year ago. FRUIT ANO VEGETABLE SHIPMENTS Fruit and vegetahle shipments from Texas in July dropped 7.5 per cent from those in July, 1930, mostly because of smaller loadings of watermelons. Although the Government estímate of waterinelon production indicated a crop 4 per cent greater than that for last year, actual loadings for the season so far are 29 per cent under those in the corresponding period of 1930. This situation may he dueto the very slow demand for watermelons and the dull market tone at the leading markets. Cantaloupe shipments for July numhered 389 car loads, or 139 per cent more than were shipped in July Consumption Exporta August l sinee since Estimate* Total Aug. l Aug. l Total Balance 12,351 13,566 15,621 13,492 14,291 15,543 14,362 15,584 The cotton year begins on Auguat l. last year, and exceeded by 21 for the season in 1930. 13,907 15,176 19,164 17,254 16,827 17,856 18,892 21,953 cars the total shipments Loadings of peaches, though large in comparison with those for last year, are 78 per cent and 48 per cent less than those for the corresponding month in 1929 and 1928 respective!y. Fruit and vegetahle shipments as compiled from daily reports of the United States Department of Agriculture were: (In Carloads) July, 1931 1ixed Vegetables -------------------------­Ca b bage ---------------------------------------­Onions ······-·---------------------------------99 Toma toes ------------------------------------345 Potatoes ------------------------------------96 Green Peas ---·-···-------------------······ String Beans -----------------------------2 Cucumbers -------------------------------1 Watermelons ------------------------2,290 Can talo u pes ---------------------------389 Peaches -----------------------------------118 Grapes --------------------------6 Pears --------------------------45 Carrots ---------------------------3 Green Corn ----------------------------21 Sweet Potatoes ---------------------------­ Total ----------·-------------------------3,415 ]une, J u ly, 1931 1930 33 12 12 896 95 5,316 372 1,856 1 1 43 1,305 2,950 7 163 13 20 22 54 27 4 9,509 3,693 With the season for the late spring and early summer crops just about over, shipments of fruits and vegetables should decline considerably over the next two months. The index of prices received by producers for fruits and vegetables, as calculated by the United States Bureau of Agricultural Economics on the basis of 1909-1914 es equal to 100, stood at llO in July as compared with ll4 in June, and 173 in July of 1930. POULTRY AND EGGS Total rail shipments of Texas poultry and eggs during July amounted to 124 cars compared with 172 cars for June, or a decline of 28 per cent. All classes of poultry shared in the decline. However, the shipment of eggs presented the most significant decline, from 76 cars in June to 42 cars in July. JULY CARLOAD MOVEMENT OF POULTRY AND EGGS* Shipments from Texas Stations Cars of Poultry Cars Li"e Dressed of Chickens Turkcys Chickens Turkeys Eggs TOTAL ----------------------------11 693.h 2 42 Intrastate ----------------------_____ 1 8 Interstate ------------------------11 683.h 2 343.h INTERSTATE SHIPMENTS CLASSIFIED State Shipped to State Shown in Margin New York ---------------------7 23 1Vz 23.h New Jerseyt -----------------------14 Massachusetts -----------------5 Louisiana ----------------------4 4 22 Illinois ------------------------8 Pennsylvania -------------------1 1 California --------------------3 Rhode lsland ---------------­1 Connecticut ---------------------------10 Missom-i -------------------------------31/z 1 Oklahoma ----------------------------1 Alabama ----------------------------2 Mississippi -------------------______ 1 *These data are furnished the U. S. Department of Agriculture, Divisi1m of Crop and Livestock Estimates, by railway officials thrnugh agen1s at ali stat:.Ons which originate aod receive car1oad shipments of poultry and cggs. tThe New York terminals of the Erie, Pennsylvania, and Lackawanna Railroads are in New Jersey. Total rail receipts of eggs for July were only 15 cars and showed a decline of 66 -per cent when compared with the 44 cars received during June. Both intrastate and interstate receipts shared about equally in the decline. lt is interesting to note that Kansas, which has been accounting for the majority of interstate receipts of eggs, only shipped 3 cars to Texas points during July. LIVESTOCK CONDITION AND MOVEMENTS The condition of Texas cattle ranges on August 1 was rated at 82 per cent of normal according to reports of the United States Bureau of Agricultura} Economics; cattle ranges remained unchanged from a month ago, while sheep and goat ranges improved one point to 88 and compared with a condition of 76 on August 1, 1930. The condition of range animals remained the same as on July 1, with cattle at 87 per cent of normal and sheep and goats at 88 per cent. The United States Bureau of Agricultura} Economics reported condition of Texas ranges and range animals as follows: Range Condition Livestock Condition Per Cent oí Normal Per Cent of Normal Cattle Sheep·Goats Cattle Sheep Goate August 1, 1931..______________ 82 88 87 88 88 One Month Ago ___ _____ 82 87 87 88 88 One Year Ago ---------------76 76 82 81 86 Five-year Average _ _____ 85 87 88 89 91 Texas shipments of ali classes of livestock for July 1931 show an increase of one per cent over shipments for the same month in 1930. Cattle increased 15 per cent due to a gain in interstate shipments. Calves, how· ever, decreased 29 per cent and swine decreased 39 per cent; both of these declines were largly due to lack of interstate shipments. Sheep increased 20 per cent. Compared with June, 1931, total July shipments of all classes of livestock decreased 19 per cent. Cattle decreased 13 per cent; calves, 25 per cent; swine, 46 per cent; and sheep, 28 JULY CAR-LOTt SHIPMENTS OF LIVESTOCK* Cattle Calves Swine 1931 1930 1931 1930 1931 1930 Total lnterstate Plus Fort Worth:t: ----------------1,935 1,593 242 401 72 132 Total lntrastate Omitting Fort Worth --------------565 584 175 187 39 52 Total Shipments ----------------------------------------------2,500 2,177 417 588 111 184 *Thc; e data ar~ furnishrd hy railway officillls through more tban 1,500 station agents, representing every livestock shipping point in t Rail·car basis: cattle, 30 head per car; calves, 60 ; swiae, 80 ; and sheep, 250. tFort Worth shipments are combined with intcrstate forwardings in order that tbe bulk oí market disappearance for the month JULY CAR-LOTt RECEIPTS OF LIVESTOCK* Total lnterstate Plus Fort Worth! -----------------­ Total lntrastate Omitting Fort Worth§ -------­ Total Receipts ---------------------------------------­ •These data are furnishPd hy railwdy oíficials through more tRail-car basis: cattle, 30 head per car; calves, 60; swine, Cattle Calves 1931 1930 1931 1930 124 141 57 8 537 511 175 209 661 652 232 217 than 1,500 station agents, representing 80 ; and sheep, 250. Swin e 1931 1930 132 127 33 51 165 178 e,·ery liv('stock shipping per cent. Sheep Total 1931 245 76 321 193& 159 108 267 1931 2,494 855 3,349 1930 2,285 931 3,216 the State. may be shown. Sheep 1931 1930 1931 6 8 319 77 59 822 83 67 1,141 point in the State. Total 1930 284 830 1,114 tincludes receipts at "other" Texas points from Fort Worth. §Represents all intrastate receipts, except tbose received at Fort Worth. Those wishing the Texas Business Review regularly will receive it without charire upon application Entered as second-class matter on May 7, 1928, at the postoffice at Austin, Texas, under the Act of August 24, 1912.