TEXAS BUSINESS Bureau of Business Research The University of Texas Vol. XIV, No. 2 A Monthly Summary of Business and Economic Conditions in Texas IMl.;_t}:ie South.JN!!!.ll Bureau of Business Research, The University of Texas, Austilr.~sff.ll!lldll ltinlu~ Entered 81 eecond clast matter on May 7, 1928, at the po.!t office at Austin, Texu, under Act ef U"11t ESTIMATED NUMBER OF TE.XAS CATTL[ AND SH[E.P 1920-39 Sov«.ct:. U 5 D.A E>u itt.AU or eiv ) INL:;) IU. 5 t.All..C." E>vrU.AU or AGRJCULTUR.A L [ coNOM1cs T1-1r. Uhl1vr.11..s1rY or TExA:; ONE DOLLAR PER YEAR TEN CENTS PER COPY TEXAS BUSINESS REVIEW INDEXES OF BUSINESS ACTIVITY IN TEXAS AVERAGE MONTH OF 1930=1001.;' WEIGH T IN COMPOSITE I NOEX tMPLO YM(NT ---z~Y. FREIGHT CARLOAOING.S---20Y. PAY R OLLS 2!l% CR UOt OIL RUNS ~~ DEPAR TMEN T STORE SALES-10'/. ELECTA.lC POWtR C0USU1,1PTJOIJ-I~~ , Bur' ' u ol Bustntss Rtuarth Th~ U n iv trsity of Tuu COMPOSITE INDEX OF BUSINESS ACTIVITY IN TEXAS 190 1 I 8 0+--+---l-+--t--;)(fl ~ 170~1t1n ~· 1 I 6 01--+-+---+--+< 1.so~-+--t---1--+_,,111 ' ::::t---1--t---t---t--;(/)(fl : I I01W~l-li~i----i---1111 I 60 ( I 5 O­ ~19~'1;:\::t!t!ttri11l'.-l--i---'l---l---I\ I 4 0 AJJ°ASON FMAMJ 130 "' 193 9 194~~-t--1---11---11 --~­ ~ 1 20-1---t--+--t--l---1--t--!---t--t->'~'..:__+----t--+--ll : ~: ~"'v''~l,/\........1--+---+--1-~-+---.l-1-~~ \~-+--+---1 11 90-1--i--~.,,,l -tt--+---t--+--i---!~1,--+-+--i---l--+--+--t ' . Nl : ~.:=-:~=-:=-~ :\=---tt .~-+l-;fefy./-A1kv~·vl'--'+---!--t--+--+--l-+--ll 60· . JF---+--+-+---+-+--t--l--t---!l---ll +--1--1---+~V~ 1 TEXAS BUSINESS REVIEW Business Review and Prospect GENERAL BUSINESS The sharp decline since early January in the national indexes of industrial activity (14 per cent, according to Barron's index, which allows not only for seasonal influ­ences, but also for population growth and standard of living) itself suggests a potential contributing factor to further recession if the industrial slump is not checked within the next few weeks. One well-known analyst has conveyed the idea that the precipitous drop has already gone so far that unless some unusually stimulating event occurs soon, a major business relapse may be expected. Since historical analogy appears to be the principal basis for this conclusion, too much weight should perhaps not be given to it at this time. On the other hand, a number of factors point to an early termination of the current business decline. Among these are the rising trend of new orders in relation to industrial production together with the favorable level of retail sales. TEXAS BUSINESS Were it not for the uncertain national outlook, business prospects in Texas could be viewed with considerable optimism. The established industries of the State are even now more than holding their own in spite of the sharp drop in activity for the country as a whole; and in addition:, new developments are occurring of sufficient magnitude to attract national attention. For example, the March 16 issue of the New York Journal of Commerce carries an editorial under the heading, "The Chemical Industry in the South," which reads, in part, as follows: "The rapid growth of chemical manufacturing in the South has been one of the notable trends in that rapidly growing industry in recent years. The announcement of the Dow Chemical Company's plans to erect an extensive plant at Freeport, Texas, probably to produce brominated compounds, is the latest manifestation of the movement of the chemical industry into the South. "An interesting example of how the construction of new chemical plants is encouraged by the development of other industries in the same area is furnished by the paper industry.... "A similar trend is apparent in those branches of the chemical industry that utilize natural gas as a raw material. Thus, the Union Carbide and Carbon Company is planning to erect a large plant in Texas, close to natural gas fields and refineries there, to supplement its West Virginia plants. "In the case of the chemical industry, the rapid ex­pansion of producing facilities in the South does not involve a diversion of business or employment from the North. Rather, it represents the choice of Southern loca­tions for new plants to supplement those in operation elsewhere, to serve a rapidly growing market. The fact that the market is growing more rapidly in the South than elsewhere for many chemicals makes it all the more logical to favor locations in that region." INDEXES OF BUSINESS ACTIVITY IN TEXAS Feb. Feb. Jan. 1940 1939 1940 Employment -----------------------------90.14 87.34 89.87 Pay Rolls -----------------------------93.22 89.86 92.75 Miscellaneous Freight Carload­ ings (Southwest District) ____ 67.03 58.68 62.76 Crude Runs to Stills __ _ _____________ 206.50 186.31 202.42 Department Store Sales__ _ _______ l09.28 97.62 110.12 Electric Power Consumption....138.53 119.18 128.93. COMPOSITE INDEX____________ l00.28 92.99 98.68. •Revised. FARM CASH INCOME Farm cash income in Texas during February declined less than the usual amount from the preceding month and as a result, the index rose substantially after adjust­ment for seasonal variation. There was a moderate de­cline in the index compared with February last year, however, a result primarily of the smaller marketings of cattle, lower prices for hogs, and somewhat smaller volume of fruits and vegetables. Computed farm cash income for the first two months of 1940 was about seven per cent below the corresponding period last year. In the following table are listed the indexes of farm cash income for the State and for each of the crop reporting districts and the cumulative total income as computed by this Bureau. INDEX OF AGRICULTURAL CASH INCOME IN TEXAS (000 Omitted) Cumulative Income Feb. Jan.• Feb. Jan.-Feb. Jan.-Feb. District1 1940 1940 1939 1940 1939 1-N --------------72.9 53.3 81.2 $ 3,002 $ 3,950 1-S _______________126.4 85.0 140.6 3,077 3,448 2 --------------------67.l 52.1 59.4 2,340 2,098 3 _____________________111.1 95.5 134.9 1,736 1,976 4 --------------------91.4 71.1 73.8 4,439 3,753 5 -------------------45.l 40.5 47.8 828 915 6 _____________________139.9 136.6 206.0 2,822 4,2317 _______________ ____ 136.5 144. 1 123.2 2,204 1,8558 __________________ 106.2 97.7 114.3 2,158 2,3349 ___________________l 12.3 107.1 92.6 2,575 2,174 10 -------------------86.0 136.6 105.6 906 1,157 10-A _______________ l 70.9 139.1 194.7 5,488 6,112 STATE ___________ 89.6 72.1 93.5 31,575 34,003 •Revised. Two charts, one on the cover page of the REVIEW, and the other accompanying this article, show the trends of livestock production in Texas during the past twenty years. The data given refer to livestock on farms and ranches on January 1 of each year as estimated by the United States Departi:uent of Agriculture. The charts and the data require only one word of explanation, viz.­figures on cattle and calves include dairy animals. It will be noted that there has been a downward trend in numbers of cattle and calves for some years. Since the number of dairy cattle has gradually been increasing, it follows that the number of beef animals has been de­clining even more rapidly than the total figures on cattle and calves indicate. F. A. BUECHEL. For Other Texas Data, See Statistical Tables at the End of This Publication TEXAS BUSINESS REVIEW TEXAS BUSINESS REVIEW Some Implications of Technologic Progress (Continued from last month) Reasons for the extensive quotations from Karl Brandt have been given. Brandt's article in general is a protest against certain strong tendencies of mental attitudes that underlie much of "contemporary economic thought." As applied to an interpretation of the prolonged depres· sion and its consequences, these tendencies of thought assume that the present economic system has reached a plane of ultimate saturation. This assumption is based primarily upon three groups of facts, which are (1) The rate of growth of the world's population is declining, and in many instances, particu­larly in the Western World, the growth of population has approached or is approaching a level of stagnation; (2) The economic impulses associated with the extension of the railway and the steamship have run their course; and ( 3) The discovery of new territory and the conse­quent development of new natural resources on the scale of that exemplified in North America during the nineteenth century is not likely to happen in the future. Obviously, such a philosophy which is necessarily pessimistic, which is negative by implication, becomes interwoven with the entire warp and woof of appraisals of and diagnoses for remedying the present economic situation and all its ramifications, including such prob­lems as unemployment, the farm problem, foreign trade, and so on. It is as if economic thinking has pretty well absorbed the thesis of Spengler's "The Decline of the West." Both attitudes are based upon the assumption that a civilization inherently becomes aged, that it reaches a stage of maturity, and after that its vitality diminishes. It has been, of course, readily easy for many American writers to accept the general thesis of saturation owing to "The Passing of the American Frontier," and the train of consequences resulting therefrom or closely associated therewith. Also, there has come about a strong adherence to "trends" as bases of economic thinking, as guide posts projecting into the near future. Professor Brandt calls further attention to these prob­lems, stressing on the one hand the new frontiers of technology and the correlative factor of geographic dis­persion of industry on the other. In order to present a thoroughgoing analysis of the mutualities concerned in the advance of technology and the spread of industry it would be necessary to outline the major developments in science and industry for a century prior to the Indus­trial Revolution and then to show how science and in­dustry have proceeded mutually since the inception of the Industrial Revolution in the middle of the eighteenth century. "In these very days of ours a most startling and over­whelming process is evolving, a process which changes almo1t every aspect of so-called economic trends. This process consists of nothing less than the decline of ultra­urbanism and the shaping of new forms of human and industrial settlement. The pyramid of the super-cities is flattening out. The great decentralizing forces in power supply, transportation, and communication are some of the material foundations for this new evolution, while psychic forces originate from hygiene, aesthetics, and other motives and set new social standards. Electricity, motor cars, telephones, and radios are great decentraliz­ing influences that bring the conveniences of the city to the country. In strictly economic terms the validity of my observation on the return from ultra-urbanism can be measured in dollars and cents of city and suburban real estate values. My point against the thesis of Professor Hansen is that his reversal of the trend toward concen­tration of industries and dwelling is not yet in full swing in all industrial countries and that it opens entirely new fields for investment on an immense scale." The colonial problem appears in many phases; that it has played, both economically and politically, a great part in the world's history in the past 400 years cannot be denied. That the colonial outlook played a highly important part in the inception of the Industrial Revo­lution is a factor generally overlooked; that it played a tremendous part in the growth of democracy in the American colonies has hardly been given the attention the problem merits. The economic aspects of colonies from the standpoint of the economics of the market has been given but little attention. And since the Great War the problem of colonies has taken on new aspects, as it becomes involved more and more with power economics. Concerning the geographic limits not yet conquered by our economic development of today, Dr. Brandt dis­ cusses his point of view as follows: "Professor Hansen is most skeptical about the end of colonial settlement. It was Rosa Luxemburg who added to Marxian prophecies the indeed brilliant thought that the decay of private capitalism could be postponed by the expansion under imperialism. Professor Hansen seems to conclude that the era of imperialism is at an end and that hence colonial development does not open many opportunities for paying investments. However, if the world were finally distributed between imperialistic powers, why should the prospects for investment be exhausted exactly in these years of our immediate present and future? The South and the East of Europe are in an early colonial state. Asia Minor, all of Russia, South and Central America, not to speak of the Orient, can easily stand a century of construction with all the possible aid from the industrialized parts of the world. "Who could say whether in 1939 we are not on the eve of a large-scale application of a collection of many ripening inventions that call for an amount of capital investment that puts all the people to work!" Brandt's article deals with a perspective; it endeavors to point out certain aspects which used in interpreting economic development, all too often, it is apparent now, have been adjudged wanting. He endeavors to point out that change is the law of life, economic or otherwise. TEXAS BUSINESS REVIEW And in the broader interpretation Brandt is careful to point that the modern world is beset with difficulties and problems which are the result of vast movements, the impingements of tremendous forces. Of the causes of these difficulties Brandt concisely summarizes as follows: "An analogy may be permitted to be inserted. The earnest argumentation of the imminent danger of food scarcity in the world still reverberates in my ears. For two decades up to 1928 the supposedly imminent effects of the Malthusion law of population was the scare of a majority of economists. Since then we have been bored by the talk about food surpluses. It is neither an in­herent defect of our competitive price economy nor a process of aging that has created the temporary stop gap that some economists consider as a permanent condition. If we try to discover the causes exclusively in the economic sphere or in the technical apparatus of the economic system, we are like engineers who try to dis­cover within a factory the stoppage of all machines while the lightning has struck the electric power plant a hundred miles away. In the complex of causes one of the most prominent reasons for the unsatisfactory em­ ployment of all our productive resources, human and physical ones, lies in the political disintegration of the world. We are living amidst the gigantic conflict of power economics versus welfare economics. If and when the present game of power politics and aggression arrives at a point where it does not pay any more, and if a rearrangement establishes a state of peace, it is quite imaginable to me that an era of worldwide prosperity as never experienced before may begin. If the fetters can be taken off international capital movement, if a certain psychology of political stablity induces capital to go to steady work, which means investment, all the arguments advanced in behalf of sophisticated pessimism shrink to insignificance. "If I try to interpret the present prolonged business recession with all its social and economic discomfort correctly, it seems most logical to me that the time is used for the political preparation to bring about that condition which will ,permit the nations in the world to produce for civilian consumption. . . ." "As long as the total volume of production is too small to employ the capacity to work, it is only natural that economic research is pushed into the subject of a more equal and socially just distribution. It seems to me that the much greater margin for raising the standard of Financial Since January 1934, when a devalued gold dollar became the monetary unit of the United States, this country's gold stock has increased from $6,829,000,000 to $17,931,000,000 at the end of January 1940. At the time of dollar devaluation, the United States held 35 per cent of the known monetary gold of the world· in January 1940, 69 per cent. As a result of increas'­ing the price of gold from $20.67 per ounce to $35.00 per ounce the production of new gold has been greatly l!timulated, with the result that annual gold production, living of the masses lies in taking off the brakes from production. "What prevents us from attaining the technically avail­able level of consumption is not essentially the mal­distribution of wealth and income but the idleness of our present resources. All economists of any creed agree today that it is the flow of long term investment that controls the volume of production and thereby the income of the people. It appears to me as the result of misled and misleading economics that a great nation permits a large proportion of its productive forces to lie idle simply because the fallacy of calculating a laborer's income in a high hourly wage rate instead of an annual wage income stops investments. Wage rates and truces together can destroy the presupposition of a normal flow of investment and thereby a satisfactory income. "None of the reforms and adjustments aiming at a better distribution of income and wealth can achieve anything toward the general welfare as long as the real issue of a well-balanced utilization of all our produc­tive resources is dodged. "If the science of political economics becomes too sophisticated and neglects putting the necessary empha­sis on the axiom that it is the physical volume of an output intelligently adjusted to the needs which creates wealth, it will eventually be pushed aside by people who do not understand a world of our refined and skeptical theories, but who have the willpower and the brutality to make the machine go, probably for non-economic purposes." The purpose of presenting the extended quotations from Karl Brandt in this and the preceding article is to direct attention toward a realistic concept of economics. There should be at this stage no need to consider the shortcomings of either the so-called orthodox economists of classical bent or the Marxian influence with its multi· tudinous ramifications. Every age has its own problems to solve. The concept that history repeats itself is little more than sheer nonsense when taken at face value; even the concept of historical parallels has to be used discriminately and with caution. No one can deny our age has its full share of problems. To attack those problems realistically-the raw materials problem, the institutional factor of science and technology, the broader investment problem, the political control of natural re­sources or of markets or trade--calls for constructive thinking on the basis of the facts, for creative research dealing with the mainsprings of economic action. ELMER H. JOHNSON. Situation which during the 1920's averaged around $400,000,000, has now come to exceed a billion dollars a year. From 1934 to 1939, inclusive, the estimated world production of gold-excluding Russia-amounted to $6,058,000,000. The increase in the gold stocks of the United States ha9 exceeded the production of new gold by approximately 73 per cent, the excess having been drawn from the central banks of other nations and-indirectly-from the hoardi of the 10-called backward peoplea of the world. . In the early stages of our gold accumulation, although it was realized that even the then existing mal-distribu­tion of gold was economically unsound, a certain sense of security was engendered by the fact that the dollar was so strongly buttressed by the precious yellow metal. Gradually, however, this feeling of security has given way to uncertainty as to whether America's power to attract the world's gold will ultimately serve any more useful purpose than did the alchemic Midas-touch that was bestowed upon that Phrygian ruler centuries ago. But such increasing concern is confined largely to a comparatively small group, for, in the public mind, gold-at least in its monetary aspects-generally is held to be beyond the ken of the average citizen. Prob­ably public complacency is to be expected on a matter so technical and complex as the monetary use of gold, but it in no way makes the issue less important. In view of the fact that the gold problem in its entirety must be solved as soon as some semblance of order has been restored to world conditions, and perhaps, in part, much sooner in the United States, a non-technical discus­ sion of the problem may be of interest. A logical first question might be "What has caused this enormous flow of gold to the United States?" In spite of the fact that the gold standard has been suspended by most countries for several years now, gold still serves as the principal means of payment between nations. As nations trade with each other in merchandise and other services, debit or credit balances are accumulated. As a result of its merchandise and service trade with other nations, the United States has enjoyed a credit balance on current account and, consequently, has been entitled consistently to receipts in excess of required payments. In other words, the demand for dollars by foreigners has been greater than the supply of dollars created by Americans who have been required to make payment abroad. Obviously, under such circumstances the price of dollars would rise in terms of foreign currencies. In order to equate the dollar demand and supply with­ out a rise in the price of dollars, under the conditions outlined in the preceding paragraph, American foreign lending-which would have supplied dollars to foreign­ ers--should have approximated the amount of the coun­ try's credit balance on current account referred to above. But capital funds move to those countries ( 1) where they are safe and (2) where they can earn a profitable in­ come. Due to the familiar combination of political and economic disturbances which have characterized recent years, the United States has offered the safest haven for capital, and European refugee funds have accumu­ lated in our banks and have been invested in our securities. Again, as explained above in connection with trade in merchandise or services, the effect of this enormous influx of foreign capital has been greatly to increase the demand for dollars by foreigners. In brief, the flow of capital, instead of being of such nature as to equate the dollar demand and supply, has actually had a disequilibrating effect. As foreigners continued to press their demand for dollars, foreign bankers purchased gold, shipped it to America thus creating deposit credits in our banks (at $35 less ~of 1 per cent per ounce) again1t which they simultaneously sold dollars to their customers. Even more important, at times, in the effect upon gold move­ments to the United States have been the operations of the various stabilization funds in their efforts to prevent an uncontrolled increase in the price of dollars in terms of their own currencies. To cite only one illustration, during the Sudeten German crisis the fear of war induced holders of sterling balances to convert to dollars. The desire for safety of capital created an enormous demand for dollars which was met by the English Equalization Account selling large amounts of dollars which it ob­tained by selling gold to the American stabilization fund, the latter subsequently importing the gold. The net balance on current account resulting from trade in merchandise and services with foreign countries and inward capital movements have been responsible for the bulk of gold imports to this country during recent years. Furthermore, we may expect that as long as con­ditions prevail which are conducive to a continuation of these two factors ,and gold is accepted as an international medium of exchange, it will continue to move toward this country. In certain years during the period the net balance on current account has been the more impor­tant factor, e.g., in 1938 when the net balance amounted to $1,026,000,000 and the capital influx to $330,000,000. In other years capital movements have dominated, e.g., in 1939 when the net balance amounted to $727,000,000 and the capital influx $1,232,000,000. A second question might be, "What effect has this enormous gold influx had upon our banking system?" To answer this question let us trace the course of a single shipment of the yellow metal, say $10,000,000, from a foreign banking institution to a New York commercial bank. The latter, upon receipt of the gold enters a deposit credit to the foreign shipper and for­wards the gold to the New York Federal Reserve Bank where it receives a deposit credit for the amount of the shipment. The New York Federal Reserve Bank, in turn, transfers title to the gold to the United States Treasury, receiving in return gold certificates. The foreign banking institution having initiated the gold export because of an actiTe demand for dollars probably sells its dollar balance to its customers who may either invest the funds so acquired in this country or allow the deposit to lie idle. In any event, the New York commercial bank is required to keep a reserve of 22.75 per cent against the $10,000,000 deposit. But, since the commercial bank received a deposit credit with its Federal Reserve bank for the full amount of the gold import, 77.25 per cent, or $7,725,000, represents excess reserves-or loanable funds-to the New York commercial bank. In other words, this bank is in a position to make loans to its customers, if requested, to an amount approximately equal to its excess reserves. Furthermore, since the reserves lost as a result of the loans made by the initiating bank are gained by other banks in the system, the total potential credit expansion is a multiple (about 4 times) of the original excess reserves. In February 1940, excess reserves of the bank­ing system amounted to $5, 700,000,000, a very large part of which are the result of gold imports during the paat 1everal years. The effect, to date, upon our banking system has been to increase deposits of the large commercial banks and swell the excess reserves of the banking system. Due to the prevailing attitude of caution among American busi­nessmen, however, the actual effect upon our economic system has been slight, for the turnover of deposits and the demand for bank credit remain at very low levels. We have not made use of the tremendous credit power inherent in the financial system. But in view of the fact that the European war may cause a strong demand for American goods, thus providing a sharp stimulus to our industries, it is feared in some quarters that ex­plosive powers exist that are beyond the effective control of our monetary authorities. Therefore, there are two principal problems to be considered in connection with gold: ( 1) How can the American monetary authorities protect our economic sys­tem against the dangerous inflationary potentialities of our present gold stock? (2) How can the gold influx be checked, or reversed, in order that other nations, find­ing themselves without adequate gold supplies, will not be forced to demonetize gold? WATROUS H. IRONS. (To be continued) Current Industrial Developments Reports covering new manufacturing industries in Texas for the first two months of the present year reveal that at least forty-three new plants have been added since the beginning of this year. This number includes only factories which have actually begun operation since January first and does not include a number of important plants now under construction. Significant for the year so far are the numbers of expansions and reorganizations which have taken place and the addi­tion of several large concerns already under construction or which have announced plans for establishing factories in Texas during 1940. Among new plants reported during January and Feb­ruary is, the Sandahl Bottling Company of Austin. Dallas plants for the month of January, only, include: A-V Screen Company, Ace Manufacturing Company, card tables; Acme Manufacturing and Sales Company; American Chenille Products Company, chenille spreads; Bowman and Company, Inc., egg processing plant, divi­sion of Standard Brands; Brownie New Method Potato Chip Company; Checkers Clothing Company, sports­wear; Chip Steak Company of Dallas, affiliated with National Chip Steak Company of Los Angeles; Classic Sportwear Company, sportswear; Dallas Belt Company, ladies' belts; Golden Krisp Donut Company; Industrial Adhesive Company; Judith Hat Manufacturing Corp., millinery; Lone Star Foods Company; Longhorn Roof­ing Products, Inc., asphalt roofing; Sound Recording Studios, electrical transcription records; Texas Milli­nery Company; and Williamson Printing Company. The following plants are reported established in Fort Worth during January: Latimer and Mathis Artificial Limb Company; McManus Candy Company, manufac­turer and wholesaler of candy; Miller's Ezy Shave Man­ufacturing Corp., shaving lotion and hand lotion; and Poultry Profit Manufacturing Company, batteries de­signed for confined poultry raising. Although some of the following Houston firms were mentioned in the 1939 resume, they are reported as having begun actual operation since the first of the year: Geophysical Machine Works; National Bedding Company; Southern Plastic Company; Thos. G. Meeks Company, drugs; Specialty Manufacturing Company; and Standard Minerals Company, admixture for concrete. Other new industries include the following: Texas Shade Company, Venetian blinds, Lockhart; Mineral Wells Chair Factory, upholstered chairs, Mineral Wells; Nacogdoches Cresote Works, Nacogdoches; and Nacog­cloches Lumber Company, yellow pine lumber; Hansen Dress Manufacturing Company, ladies' dresses, New Braunfels; and Orange Consolidated Steel Corporation of Texas, structural steel, Orange. The Nacogdoches Lumber Company employs an average of llO wage­earners and the Orange Consolidated Steel Corporation an average of 100 workers. In San Antonio the Lone Star Breweries, formerly the Sabinas Brewery and later known as the Champion Brew­ing Company, has installed new and modern machinery. The Cen-Tex Wool and Mohair Company now in op­eration at San Marcos is an important new industry for Texas, and is the only plant of this type now existing in the State. Developments in Waco during the latter part of 1939, but not previously reported, include the Smith Furniture Manufacturing Company; the Delaware Punch Bottling Company; and the new plant of the Coca-Cola Bottling Company. The following list of wholesale firms includes new firms reported for 1940 and others which were not re­ceived in time to include in the Directory of Texas Wholes8---------------------------------------------------------· 30 AUTOMOTIVE....------------------------------------------------------­113 Filling Stations.--------------------------------------------------------· 37 Motor Vehicle Dealers-----------------------------······---·----------------·-·····--· 76 COUNTRY GENERAL AND FARMERS' SUPPLIES___________________ 94 DEPARTMENT STORES...------------------------------------------------------56 DRUG STORES----------------------------------------------------------------------------124 DRY GOODS AND GENERAL MERCHANDISE..·---------------------------· 20 FLORISTS-----------------------------------------------------------------------­31 FOOD------------------------------------------------------------------179 Grocery Stores.·-----------------------------------------------------------------67 Grocery and Meat Stores.-----------------------------------------------------· 112 FURNITURE AND HOUSEHOLD---------------------------------------------58 Furniture________________________________________________________________ 44 Household Appliance Storee----------------------------------------------9 Radio Stores...-----------·····------------------------------------------------------------·· 5 JEWELRY-----------------------------------------------------------------­ 43 LUMBER, BUILDING, AND HARDWARE.___________________________ 231 Farm Implement Dealers.------------------------------------------------­13 Hardware Stores...--------·-----------·--·------··--···---------------·--71 Lumber and Building Materials Dealers_____________________________________ _ 147 RESTAURANTS------------··----·-------------------------------------­ 24 ALL OTHER STORES..----------------------·---------····----------------­16 TEXAS STORES GROUPED ACCORDING TO POPULATION OF CITY: All Stores in Cities of-Over 100,000 Population·----··--------·-···---·------·-------·-··---220 50,000-100,000 Population._________________________________________________ _ 1092,500-50,000 Population._____ _ _______________________________________________ 477 l.eM than 2,500 Population.________·-··---·--·----------------302 February, 1940 Percontai:e Change Feb. 1940 from Feb. 1939 + 9.8 + 6.3 + 1.2 + 13.6 + 16.7 -12.4 +19.9 + 12.2 + 5.4 +10.4 + 8.8 + 7.9 + 2.2 + 4.6 + 1.4 + 11.2 + 8.4 +33.0 -0.1 0.7 4.0 + 1.1 + 9.9 +27.8 +30.2 + 2.8 + 7.2 + 9.0 + 14.2 +15.5 2.2 6.8 Feb. 1940 from Jan. 1940 + 2.1 4.9 --' 14.5 -24.2 + 13.6 + 8.0 + 3.5 + 3.9 + 6.7 8.8 0.9 1.6 3.2 + 15.8 3.0 2.1 3.3 + 3.8 0.6 +27.8 +16.9 -14.6 +21.7 -1.6 + 12.8 +27.5 3.2 -4.8 + 0.1 + 6.3 + 4.5 + 4.6 Numbor of Firm1 Reporting 1,074 117 27 43 18 29 111 36 75 92 56 117 20 31 168 62 106 58 44 9 5 43 223 13 69 141 23 15 213 107 462 292 Percentage Chango Year-to-Data 1940 from Year-to-Date 1939 + 6.9 + 3.3 + 2.0 + 0.3 + 6.8 + 17.5 1.7 -7.2 +18.4 + 6.1 + 4.6 + 8.3 + 12.1 + 3.9 + 1.8 + 5.5 + 0.4 + 8.2 + 5.9 +31.2 -7.7 -0.1 -2.6 +21.5 + 21.0 -11.0 3.9 -5.4 + 5.3 + 3.9 + 11.4 +10.0 NoTll: Prepared from report• of independent r•tail etor« te TEXA~ CHARTERS Feb. Feb. 1940 1939 Domeetic Corporatione: Capitalization• ·­----------------­---­$3,010 Number -·--·-----·-----------·-·-··-­126 $1,000 101 Classification of new corporations: Banking-Finance ---------­---­-·­ 3 3 Manufacturing ----------------­·· 26 14 Merchandising --·-----·-·-------··­ 50 30 Oil -----·------­---·­·--------·-·-­ 14 17 Public Service ---------·--­-------­ 0 0 Real Estate-Building___ _ ______ 9 11 Transportation ------·--------·--·­ 3 2 All Others ·--·-··--·-----·--·--·-·­ 21 24 Number capitalized at less than $5,000Number --­------···----·------------­capitalized at $100,000 47 35 or more --·-·-----------­--­----····----· Foreign Corporations (Number) ______ __ 1 15 0 24 •In thout0nd1. Non:: Compiled from r..orda of the locutary of itate, the Bure.au Jaa. 19"° $2,055 143 4 26 35 23 2 9 9 35 62 3 27 of Bu1inen Research, coi:iperating with the United Statea Department of Commerce. FEBRUARY CARLOAD MOVEMENT OF POULTRY AND EGGS Shipments from Texas Stations Cars of Poultry Li•e Dressed Cars of Eggst Destination• Chickens Turkeys Chickens Turkeya Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. Feb. 1940 1939 1940 1939 1940 1939 1940 1939 1940 1939 TOTAL --·-····-···-5 1 34 55 6 7 37.5 25.0 Intrastate ---·······-·-·-1 ---· 3.0 7.0 Interstate -·--·---·---5 1 33 55 6 7 34.5 18.0 Origin Receipts at Texas Stations TOTAL -------------___ 1 2 6.0 9.0 Intrastate --·-··-·-----··· l 1 3.0 6.5 Interstate -···--------·-·-1 3.0 2.5 *The destination above is the first de1Hination as shown by the original waybill. Changes in destination brought about by diversion orders are not shown. tPowdered eggs and canned frozen eggs ore converted to a shell egg equivalent. NoTK: These data are furnished the United States Department of Agriculture by railroad officialt throu~h agenta at all stations which ori ginate and receive carload shipments of poultry and eggs. The data aro compiled by the Bureau of Bu1ine11 Research. 14. TEXAS BUSINESS REVIEW POSTAL RECEIPTS BUILDING PERMITS Feb. Feb. Jan. 1940 1939 1940 Feb. Feb. Jan. 1940 1939 1940 Abilene ------········--·$ 17,158 $ 14,882 $ 18,374 Amarillo --------------45,825 28,243 32,401 Abilene ·········-·······$ 26,160 $ 11,990 $ 64,935 Austin ------------····· 64,725 64,587 66,252 Amarillo ------------137,791 109,178 132,747 Beaumont -···-····--25,261 24,661 27,637 Austin ·····-·····-----750,229 698,922 483,268 Big Spring_ _________ 5,200 5,002 6,386 Beaumont ----------122,488 102,662 78,700 Big Spring________ __ _ 6,600• Brownsville ·-·-·-····· 5,805 5,739 6,536 48,900 36,320 Brownwood ............ 5,348 5,209 6,136 Corpus Christi........ 1,405,942 161,525° 1,311,810 Childress ····--·-----··· 2,272 2,238 3,004 Corsicana ------------13,632 16,425 10,825 Corpus Christi........ 26,096 23,351 28,081 Dallas --------------1,129,982 1,272,984 872,378 Corsicana ·········-··· 5,220 5,013 5,916 Del Rio ···············-· 8,250 9,025 4,075 Dallas ···-···········-··· 363,063 328,345 378,901 Denton --------····-··· 5,800 20,400 13,010 3,319 5,624 Paso.........________ 173,722 Del Rio..·-······-·····-4,147 El _ 140,725 135,717 Denison -·--·····-···-· 5,381 4,882 6,223 Fort Worth__________ 494,902 1,139,205 283,113 7,477 6,264 Gladewater _______ 524 12,141 5,500 Denton -·--····-·····-· 7,817 El Paso ········-----·---40,956 39,433 46,100 Graham --------------4,450 3,690 7,730 Fort Worth -·······-143,497 138,930 142,478 Harlingen ------·-----29,335 12,276 20,190 Gladewater ····-··-·-2,535 2,520 3,499 Houston ·······---------1,322,470° 1,814,155 3,665,705 Graham ·············-·-2,245 2,149 2,548 Jacksonville .......... 1,700 20,000 23,550 Harlingen ···-····-·· 6,364 5,388 6,483 Kenedy --------------2,500 2,150 0 Houston ···-····-··-··· 254,170 230,169 253,482 Lubbock -------------312,469 209,999 595,630 Jacksonville .......... 3,104 2,874 3,477 McAllen ·········-····· 51,962 22,250 41,780Kenedy ···-·····-···---1,238 1,205 1,495 Marshall -----------11,725• 7,441 12,483°Lubbock ·······-······ 18,012 16,532 20,091 4,036 5,146 New Braunfels__ ___ 9,285t 20,385t Lufkin ·······-·--------4,665 + McAllen ····-····-······· 4,834 9,981 5,884 Odessa --------------58,768t + 35,788t Marshall ·········-····-5,952 5,711 6,452 Palestine ········-----11,956 4,035 18,996 Odessa ···-····-·---··· 5,178 4,580 7,133 Pampa -----------------20,300 13,395 23,975 Palestine ···-····-····· 5,254 7,595 6,663 Plainview -----------2,215 2,100 5,350 Pampa ·········-··------6,909 5,560 7,580 Port Arthur...__ ___ 87,535 47,159 65,258Plainview -----------3,769 3,708 4,931 San Angelo___________ 38,246 20,070 44,254 Port Arthur............ 12,782 11,130 13,671 San Antonio.........-432,371 338,949 437,082 San Angelo....---·····-11,156 10,114 12,384 San Antonio__________ 122,887 110,396 128,084 Sherman ------------23,795 36,699 15,434 San Benito__________ 2,563• t 2,690° Sweetwater --------8,385 7,805 9,805 Sherman ···-····-····· 7,249 7,111 7,802 Tyler ···-····----------45,346 739,972 38,459 Snyder -------------·-· 1,456 1,231 1,831 Waco ···-····-··········-81,413 97,253 152,943 Sweetwater ···-······· 4,505 4,519 5,357 Wichita Falls________ 42,987 61,040 88,630 Tyler ····-····-····-···· . 15,421 16,000 16,047 TOTAL ______________ $6,813,182 $7,204,520 $8,699,652Waco ----················· 30,787 31,254 32,233 Wichita Falls_______ 21,481 20,563 23,561 NoTE : Compiled from reports from Texas chambers of commerce to the Bureau TOTAL ______________ $1,319,724 $1,215,637 $1,362,147 of BusineH Research. •Does not include public works. NoTE: Compiled from reports from Texas chambers of commerce to the Bureau tNot included in total. of Business Research. • Not iricluded in total. tNot available. tNot available. FEBRUARY SHIPMENTS OF LIVE STOCK CONVERTED TO A RAIL-CAR BASIS§ Ca ttle Calves Hoga Sheep Total 19•10 1939 1940 1939 1940 1939 1940 1939 1940 1939 Total Interstate Plus Fort WorthU..--­-----------­Total Intrastate Omitting Fort Worth______________ 2,028 298 2,691 579 628 123 600 124 591 25 699 49 400 20 331 18 3,647 466 4,321 770 TOTAL SHIPMENTS....------·········--­----­-····­······ 2,326 3,270 751 724 616 748 420 349 ·1,113 5,091 TEXAS CAR-LOT§ SHIPMENTS OF LIVE STOCK, JANUARY I-MARCH 1 Cattle Calves Hogs Sheep Total 1940 1939 1940 1939 1940 1939 194-0 1939 1940 1939 Total Interstate Plus Fort Worthfi_ ________________ 4,791 7,196 1,476 1,576 1,260 1,338 810 853 8,337 10,963 Total Intrastate Omitting Fort Worth_______________ 639 1,394 194 302 47 94 41 92 921 1,882 TOTAL SHIPMENTS...·-····-········--··················· 5,430 8,590 l ,670 1,878 1,307 1,432 851 945 9,258 12,845 §Rail-car Basia: Cattle, 30 head per car; calves, 60; hoG'e, 80; and sheep, 250. 1JFort Worth shipments are combined with interstate fonvardings in order that the bulk of market disapp.earance for the month may be shown. Non : These do.ta are furnished the United Sta tea Bureau of Ae-ricultural Economics .by railway officia1s throur:h more than 1,500 station agente, repreaenting every live stock shipping point in ·the State. The' data are compiled by the Bureau of BusineH R.esearch. ,. FEBRUARY CREDIT RATIOS IN TEXAS RETAIL STORES (Expressed in Per Cent) Ratio of Ratio of Ratio of Number of Credit Sale• Collections to Credit Salari.. Storea to Net Saleo Outfltandinga to Credit Sales Reporting 1940 . 1939 1940 1939 1940 1939 All Storee..·-·····--··-····-·-·-·······-··-···-·-------·-·---·--····-····-----·--······--·-·-···-··-------·-69 67.8 67.4 37.7 37.6 1.2 1.4 Stores Grouped by Cities: Abilene....-----·····----··--····--··-·····--·-····-·--·---··--·····-·--·-··-·--··--·-·-···-············· 3 65.2 64.3 31.1 27.7 2.3 2.7 Austin....----·-·--···-···············-·---·-···----··----·--·-...................--·-·-··---·--·······-··--·----6 60.1 59.l 44.8 44.2 1.5 1.3 Beaumont...---·---·-·-·-------·--·------··-·-··---·-----···-·····--····--·-···-··-·····-··-·-·· -~ 73.2 67.9 37.5 36.5 1.5 1.8 Dallas....---·-···········-······--·-·-····-···-·-····-··-·-···--··· ........... .......---··.......................... 11 73.6 73.8 37.3 39.6 0.8 1.3 Fort Worth..·-·-···--·-·-·------·--·----------·····-·-·--···--····--·-···-····--·-··-·····-···--·····... 6 66.6 66.3 35.8 31.8 1.3 1.4 Houston............·-·--·-··---·-··-··---··---------··-·-···-··-····-----·-·-------··--···----· 8 66.7 64.8 39.5 39.7 1.8 1.7 San Antonio.....................................................----···----·-·······----·----··-····__ _ .·-· ---6 63.6 61.l 44.9 44.3 1.1 1.0 Waco...---···-··-··----·-·---·--···-·····--··---·-·-····-···--····-····--····--······-··-··-····----··----4 63.9 63.8 27.6 27.1 1.8 1.8 All Others.........................-..·-··------·--··-··-------·-·--·-·-··-···-··.....-·-···--·-·-·-·-·------·· 22 59.3 61.7 36.2 .35.0 1.9 2.0 Stores Grouped According to Type of Store: Department Stores (Annual Volume Over $500,000) ··-····----·-··-··-·····---··­21 67.5 67.3 .U.7 38.6 1.2 1.4 Department Stores (Annual Volume Under $500,000) ··----···-····--····-····· 13 62.8 63.7 31.6 30.6 2.4 2.4 Dry Goods-Apparel Stores·--------····-·-·------···-----·-·------·--·----·--·-··--···· 6 64.4 62.2 39.4 35.8 2.2 2.0 Women's Specialty Shops..·-·····-···-·······················--···-·-·············--·-·····-··-14· 69.2 68.1 35.6 35.4 0.7 1.1 Men's Clothing Stores........... -·····-···-·······-·····---··-·-·-··--····-·--···-····-·-·······-·· ...... 16 69.8 68.8 39.3 39.0 2.0 2.1 Stores Grouped According to Volume of Net Sales During 1939: Over $2,500,000........._.................................._.._____________ ....................__ _____ 10 71.5 68.8 38.7 41.4 l.l 1.2 $2,500,000 down to $1,000,000.........__.......................... ..... ···--------------·-..... 11 62.3 62.2 40.4 37.7 1.4 1.5 $1,000,000 down to $500,000...-..---·--··---··--··--·-----··-----········-···-·-----··· 9 62.4 60.5 39.5 40.3 1.9 1.8 $500,000 down to $100,000..........---·---·--·-------·--·····--·-····---··-·-·-·-----··-29 62.5 61.5 37.3 36.5 2.4 2.6 Less than $100,000...............................................................................____...... 10 63.3 63.8 33.9 32.5 4.7 4.6 NoTE: The ratiofl ehown for each year, in the order in which they appear from left to right, are obtained by the following computalions: (1 ) Credit aa1ct divided by net sales. (2) Collections during the month divided by the total accounts unpaid on the first of the month. (3) Salaries of the credit depart­ment divided by credit sales. The data. are reported to the Bureau of Business Research by Texas retail •tores. PURCHASES OF SAVINGS BONDS COMMODITY PRICES Feb. Feb. Jan , 1-Mar. l Jan. 1-Mar. 1 1940 1939 1940 1939 Feb. Feb. Ja_n . Abilene -············--··-$ 24,375 $ 5,531 $ 88,481 $ 38,492 1940 1939 1940 Amarillo ····----·----34,369* t 115,069* t WHOLESALE PRICES : Austin -··-··-·-----··-53,119 5,850 166,238 80,550 U.S. Bureau of LaborBeaumont 59,860 31,519 193,623 105,582 Statistics (1936 = 100) ····--·----·-······ 78.7 76.9 79.4 Big Spring ····--·-·--24,225 4,125 52,650 25,763 The Annalist (1926 = 100)................ 81.6 Brownsville --········--9,975 10,200 23,963 14,775 79.l 82.0 Brownwood ·-·--·-·--6,731 4,013 27,787 18,488 FARM PRICES: Childress -·--··-····-·-· 6,375 525 t t U.S. Bureau of Labor Corpus Christi........ 55,631 31,913 t 59,194* Statistics (1926 = 100) _________________ 68.7 67.2 69.1 Dallas ···---··--···---258,769 162,881 821,363 585,544 Del Rio -···--·-··---···-2,306 131 9,900 919 RETAIL PRICES: Denison ···--···---·--14,663 8,175 50,232 44,850 Food (U. S. Bureau of Labor 825 12,777 10,519 Denton ···--··--·-··-·· 983 Statistics, 1923-25 =100) ···---·-···----78.l 76.8 77.l El Paso ···-·---·-··--· 92,100 106,387 306,469 281,006 Department Stores (Fairchild's Gladewater ·--·---·-·-· 6,469 7,313 57,882 43,257 Publications, Jan. 1931 = 100) ·-----92.6 89.1 92.3 Harlingen --··-····--··· 4,181 3,694 17,081 18,807 Kenedy ·-----------···-881 131 8,381 2,062 Marshall -·--·······-·-58,106 2,719 102,937 11,457 ELECTRIC POWER CONSUMPTIONMcAllen ··----·····-··· 10,781 8,344 22,312 13,500 Odessa --·-·-·----------2,644 9,506 21,525* t (In Thousands of K.W.H.)Palestine -··-----·-6,900 18,506 34,219 30,712 Pampa -··--------·-·--1,425 956 9,338 2,100 Percentage Change Plainview 900 1,275 19,931 20,438 Feb. 1940 Feb. 1940 Port Arthur --·--·---21,244 12,469 80,775 42,225 Feb. Feb. Jan. from from San Angelo__________ 8,569 1,931 54,619 39,112 1940 1939 1940 Feb. 1939 Jan. 1940 · San Antonio -··-···· 174,919 102,600 644,194 315,994 Commercial .... 40,292 36,549 40,613 + 10.2 -0.8 San Benito -·------···-488 1,744 9,994 9,732 Industrial -··--·--86,006 85,246 87,003 + 0.9 -1.2 17,306 33,544 27,469 Sherman ·-·--·-····-··--9,544 Residential .... 30,833 28,818 35,382 + 7.0 -12.9 Tyler ···--··-·-·----··----23,006 12,244 152,231 142,425 All Others.______ 24,482 20,237 24,046 + 21.0 + 1.8 Waco ·-·---------·--··-168,544 16,181 290,044 58,931 TOTAL ..........181,613 170,850 187,044 + 6.3 -2.9 Wichita Fallas -··---94,463 5,505 216,301 144,274 TOTAL ..................$1,202,176 s 594,499 $3,507,266 $2,128,983 Prepared from reports from 15 electric power companies to the Bureau of Business Research. •Not included in total. t Not available. BANKING STATISTICS (In Millions of Dollars) DEBITS to individual accounts-------------------------------·--------------------------------­Condition of reporting member banks on- AssErs: Loans and investments-totaL-------------------·------------------­Loans-totaL..------------------------------------------------------------------------­ Commercial, industrial, and agricultural loans___________________ _ Open market paper_____________________________________________________ _______ Loans to brokers and dealers in securities_________________________ Other loans for purchasing or carrying securities_________ ________ Real estate loans______________________________________________________:___________ Loans to banks----------------------------------------------------------------­Other loans.------------------------------------------------------------------------------------­Treasury Bills-------------------------------------------------------------· Treasury Notes.--------------------------------------------------------------------------­ U.S. Bonds------------------------------------------------------------------ Ohligations fully guaranteed by U.S. Gov't________:______ ______________ _ Other securities.--------------------------------------------------------------------------­ Reserve with Federal Reserve Bank_________ _ ________________________ _ Cash in vault.-----------------------------------------------------------------------------­ Balances with domestic banks___________________________________________ Other assets-net______ ____________________________________________________________ LIABILITIES: Demand deposits-adjusted__________________________________ __________ Time deposits.----------------------------------------------------------------------------­ U.S. Government deposits________________________________________________ Inter-bank deposits: Domestic banks.--------------------------------------------------------------· Foreign banks---------------------------------------------------------------------­ g~h:~lI~~ij;-ti-;;_-_-:-_-_-_-_::::_-_-_-_-=_-_-_-_~_-_-~_-=:_-_-_-_-_-_-_-_-_-=_-:·_~=--------=-------=----~---------~-=--_-_-_::::_-_-_-_-=: Capital account_________________________________________________________________ _ NoTE: From Federal Rceerve Board. February, 1940 Dalla• United District State& $809 $30,698 February 28, 1940 535 23,268 271 8,528 180 4,324 2 332 3 609 14 478 22 1,185 52 50 1,548 19 647 41 1,735 92 6,469 51 2,421 58 3,468 131 10,390 12 480 292 3,104 29 1,261 472 19,414 135 5,290 31 571 269 8,085 l 732 4 692 87 3,719 February, 1939 Dalla• United January, 1940 Dalla• United District States Dietrict States $ 764 $29,989 $ 832 $33,555 March 1, 1939 January 31, 1940 506 21,594 540 23,174 247 8,186 277 8,499 163 3,773 184 4,295 1 313 2 321 3 799 3 614 14 523 14 485 20 1,136 22 1,183 92 54 46 1,550 52 1,547 11 416 16 648 74 2,531 44 1,747 78 5,196 93 6,482 42 2,019 53 2,414 54 3,246 57 3,384 111 7,368 136 10,258 9 389 11 458 236 2,558 277 3,067 29 1,276 29 1,247 429 15,965 .m 19,199 137 5,202 136 5,257 34 634 31 573 203 6,414 265 8,029 1 566 1 738 2 1 4 715 3 690 83 3,687 86 3,717 CONTENTS PAGE Business Review and Prospect, F. A. Buechel__________________________________ _______________________________________________________________________________ 3 g~~:e:tsf~~~;~,.~~/v!·e~~:;~~~~-,--Cl~-;~-Ii:-i~~i-~:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::=:::::::::::::::::::::::::::::::::::::::::::::: ~ Financial Situation, Watrous H. Irons______________________________________________________________________________________________________________________________ 6 Some Implications of Technologic Progress, Elmer H. Johnson___________________________________ _________________________________________________ 5 LIST OF CHARTS Estimated Number of Texas Cattle and Sheep, 1920-1939___ _________________________________________ 1 ;:~i~:!e~f N;u:i~:rss0~~~:::y ~~g~e::~--~~~~~-~~~::~:-~~-~~~2~~~:::::::::=:::::::::::::::=::::=:::::=:::=:::::=::=::=::==::==:::=:::====:==:=:::::==::==::= i LIST OF TABLES