The University of Texas Entered ·as second-class matter on May 7, 1928, at the postoffice at Austin, Texas, under the Act of August 24, 1912 VOL. II AUSTIN, TEXAS, DECEMBER 22, 1928 No. 11 THE MONTH The business situation in Texas continued on the rather high level whch has obtained over the past few months. Some few changes were noted but they were not of sufficient importanec to change the generally fav­orable outlook. While it is true that interest rates are high and considerable speculation is taking place, financial conditions remain sound so that a financial crisis is un­likely at this time. Industry is showing some seasonal curtailment. Agriculture for the most part is favorable but the livestock situation is not as encouraging as might be. Employment conditions in Texas are f~irly good, al­though there is some unemployment, especially among the unskilled groups. A decrease of 1.6 per cent is shown in the number of workers employed by 511 firms in nine large centers of the State on November 15, as compared with October 15. The decline is due to seasonal Southwest Shippers Advisory Board. Shipments of agri­cultural produce and forest products are especially heavy. E~xports of cotton are ahead of shipments a year ago, but foreign loadings of grain are less. Coastal trade is sat­isfactory. Agricultural conditions are encouraging. Crops in many cases are larger this year than last, but prices for i;ome products have been lower. As a result, total farm income should be about the same. Harvesting of the major crops is about completed, and early planting of truck crops is nearly over. The decline in cattle prices and the deterioriation of ranges were rather discour­aging features of the livestock industry. Animals lost flesh and considerable feeding was necessary. Recent rains have materially improved ranges and animals are doing better. T h e petroleum industry changed very little from con­ ditions obtaining in October.factors. Wages were mostly General business conditions continue sound. Daily average flow remainedunchang!!d. The slight hesitancy in evidence before the about the same, and field workPossibly the most important election has been dispelled and holiday trade is was extended. Building wasdevelopment in the financial going forward in large volume. While it is rather active and many con­ situation during the month true that some industries are stil1 having dif­struction and engineering pro­was the advance in call money ficulty, most lines have made satisfactory jects were let. Production andrates to 12 per cent, or the progress. Even though interest rates are high shipments of cement fell offhighest rate since July, 1920. and credit is somewhat extended, financial con­ This unusual rate indicates that credit conditions are none too favorable. Bank debits in the District, according to the Dallas Federal Reserve Bank for the four weeks end­ing November 28 totaled $909,000,000, compared to $829,000,000 for the same ditions in the country are sound and ample funds are available for aU business needs. Agricultural conditions are rather promising and the outlook for the livestock industry is fair. Labor is fairly weU employed at good wages. Business expansion this fall has been greater than that of last year and the pros­pects for the first part of 1929 are promising. seasonally and stocks in­creased. The cotton textile industry had a good month and spinners margin advanced. Lumber mills curtailed some­what. Spinners margin advanced 4 points during November. This brings the ratio back to period of 1927. Loans and the September figure and to a discounts at member banks level only about 8 points be­ fell otr seasonally and boi:rowings at the Reserve Bank low normal. The rather sharp gain in the margin indi­were reduced. Interest rates hardened a little but there cates that the spinning industry is improving and that was no change in the rediscount rate of the Dallas tht: demand side of cotton is gaining strength. District. FINANCIAL The stock market experienced one of the wildest bull movements in history; trading was in record volume and A rate of 12 per cent for call money was possibly the prices soared. There were a large number of new cor­most important development in the financial situation porations organized and commercial failures were the during November. This is the highest rate for call fewest in eight years. noney since July, 1920, and it was caused by a shortage Freight car movement in this district is running about of available funds for the December 1 payments. The 4 per cent over last year's loadings, according to the high rate attracted money to New York City which quickly ================::.:==================================================================~ relieved the stress. As a result, much lower rates were quoted a few days later. The gold movement is now siightly in favor of imports but no shipments large enough to cause price inflation are expected. The increased de­mand for holiday credit is likely to be taken care of by the Federal Reserve System through purchases of accept­ances and Governments. If this proves to be the case, the credit strain should be slight. Checks cashed in this district show a seasonal decline from October but were above those in November, 1927. Debits for the four weeks ending November 28, according to the Dallas Federal Reserve Bank, totaled $909,000,000, compared to $829,000,000 for the same four weeks last year. Loans and discounts at member banks fell from $363,000,000 in October to $336,000,000 in November, or about in line with the usual seasonal drop. The amount oi' Governments owned by member banks decreased $1,000,000 to $82,000,000; last month, banks reduced their holdings by $6,000,000. Demand deposits increased $4,000,000 to $317,000,000 and time deposits gained from $131,000,000 in October to $132,000,000 in November. Interest rates were slightly firmer. Call rates renewed mostly at 7 to 7% per cent until the month-end when a rate of 12 per cent was witnessed. Rates on bankers ac. ceptances were mostly unchanged while time rates wert advanced to 7% per cent compared to 7 per cent a month earlier. A downward trend in interest rates is expected after the first of the year. The rediscount rate of 4% per cent remained in effect at the Dallas Federal Reserve hank. FINANCIAL STATISTICS FOR THE DALLAS FEDERAL RESERVE DISTRICT~ Bank Debits (four weeks)----------------------------------------------------$ GoVf~rnment securities owned, end of month______________________ Member bank borrowings, end of month __________________ ______ _ Demand deposits, end of month__________________________________________ Time deposits, end of month________________________________________________ •From the Federal Resene System. WHOLESALE PRICES Wholesale price movements were mixed. Farm prod­t:cts, textiles, and metals advanced, while food products, fue's, and livestock declined. The Annalist weekly index fell from 149 for the first week of November to 148.1 for the first week of December, and Professor Fisher's index declined .3 of a point to 97.3 in the same period. The index of the National Bank of Commerce of New York City declined from 88.7 in October to 87.7 on November 15. On the other hand, Dun's gained from 192.9 on November 1 to 193.5 on December 1, and Bradstreet's advanced from 13.01 to 13.15 in the 30-day period. TEXAS CHARTERS The number of new corporations organized during November declined about in line with the usual seasonal trend. A total of 176 companies capitalized at $16,040,000 received charters from the Secretary of State, compared to 1!)2 enterprises having capitalization of $24,386,000 TEXAS CHARTERS November Octobeir November 1928 1928 1927 Number 176 192 153 Capitahation $16,040,000 $24,386,000 $ 7,574 000 Foreign permits _ 36 31 ' 30 Classification of new corporations : Oil -· 17 24 14 Public service _ 3 8 4 Manufacturing Banking -Fi­ 18 8 4 nance 17 12 8 R e a I estate- Building _ ___ 16 15 27 General --------·­ 105 125 96 November October November 1928 1928 1927 909,000,000 82,000,000 15,602,000 317,000,000 132,000,000 $938,000,000 83,000,000 16,797,000 313,000.000 131,000,000 829,000,000 68,000,000 5,877,000 306,000,000 113,000,000 in October. Last year in November, 153 corpo~ with capital tf $7,574,000 were organized. With the ex­ception of two building and loan associations capitalized at $5,000,000 each and a third at $1,000,000, most of the companies were small again this month. The tendency to organize small corporations has been in evidence for several months. Twenty-one companies increased their capital by $589,000 and permits were granted to 36 outside enterprises. There were 17 oil companies chartered against 24 in October, and only three public service corporations were formed. New manufacturing concerns increased from eight in October to 18 in November, while financial insti· tutions gained from 12 to 17. Sixteen real estate firma were organized compared to. 15 in October and 27 in November, 1927. The large number of new manufactur· ing companies being chartered reflects the industrial im· provement which has taken place over the past year. COMMERCIAL FAILURES That the past year has been a profitable one for most commercial enterprises is indicated by the small number of bankruptcies. During November, only 24 insolvencies with liabilities of $281,000 were reported in Texas, the smallest number for any November on record. This com· pares with 39 failures having liabilities of $407,000 in October, and 58 defaults with liabilities involving $944,000 in November, 1927. The large decrease in the number cf failures from October to November this year is most encouraging when it is noted that an increase is the normal trend. Normally, August or September is the low month and January the high month. Defaulting companies were a little larger The average failure in November had liabilities amounting to $11,700( compared to $10,500 in October and $16,300 in Novembe'f: '~ a. year ago. No bank failures were reported for the nionth. COMMERCIAL FAILURES* November October November 1928 1928 1927 Number --------------24 39 58 Liabilities -----------$ 701,000 $ 407,000 $ 944,000 Assets -----------------$ 281,000 $ 177,000 l_ •From R. G. Dun & Co. DEPARTMENT STORE SALES Trade at wholesale-and retail was good. The volume of wholesale sales fell off somewhat from that of October, as is to be expected. On the other hand, retail trade shows a seasonal expansion. Sales of 77 department stores located in 25 cities of the State totaled $6,572,119 in November, compared to $6,211,455 in November, 1927, a gain of 5.8 per cent. Sales of these same stores in October were $6,413,874. Seventeen cities showed gains, six reported losses, and one remained un­changed in comparison with November last year. Retail trade in the United States in November fell .3 per cent below trade in November a year ago, according to the Federal Reserve System. Eight of the districts recorded losses, whereas only four reported gains. NOVEMBER TENDENCIES I N DEPART MENT STORE SALES .Percentage change from October November 1928 1927 Abilene ---------------------------------------+ 4.2 + 3.5 Austin ----------------------------------------+ 10.4 + 17.9 Beaumont ----------------------------------+10.5 + 1.7 Cleburne -----------------------------------9.7 +11.0 Dallas ----------------------------------------4.5 + 5.9 Del Rio --------------------------------------+ 4.3 3.8 El Paso ---------------------------------------+ 5.0 + 5.5 Fort Worth --------------------------------0.5 + 2.3 Galveston ----------------------------------+ 6.3 + 7.1 Houston --------------------------------------+ 15.8 + 11.1 ~I Marshall -------------------------------------+ 4.9 -17.1 1i Paris --------------------------------------------16.2 + 2.8 San Angelo ____,___________________________ -8.9 No change 1 · San Antonio ----------------------------4.1 + 5.1 Tyler ------------------------------------------+ 2.5 -12.1 Wichita Falls --------------------------+ 4.7 7.8 & Others* --------------------------------------6.2 + 7.5 State -------------------------------------+ 2.5 + 5.8 November October November 1928 1928 1927 ~! Sales of 77 com­ fll parable stores_.$ 6,572,119 $ 6,413,874 $ 6,211,455 ~I •Others include Amarillo, Corpus Christi, Corsicana, Deni­;b:'" son, Laredo, Port Arthur, Sherman, and Waco. ·-i BUILDING On the whole, the building industry in Texas made a tisfactory showing during November. However, most . the activity was in the larger centers. Many of the 1aller cities show sharp decline, whereas only a few corded gains as compared with last year. Although the :nar value increased over that in October, the total r the month fell slightly below the volume reported in >vember last year. The 33 cities of the State reporting to the Bureau of Business Research granted building permits amounting tu lji9,496,060 in November, compared to $8,323,271 in Octo­ber and $9,660,293 in November, 1927. Seventeen cities show gains compared to November last year, while 16 BUILDING PERMITS November October November 1928 1928 1927 Abilene --------------$Amarillo ____________ 222,370 $ 101,922 126,511 $ 96,546 148,037 68U,ti63 Austin ---------------­Beaumont __________ 126,749 198,315 216,480 313,800 254,076 30" y<'ar is greater than usual. Last year output dropped cnly 1,000 barrels between the two months, and in 1926 the decline amounted to 26,000 barrels. Shipments were also greatly reduced. In November, 451,000 barrels were 9 2 6 1 9 2 7 I 9 2 8 loaded against 543,000 barrels in November a year ago. ~tocks increased from 346,000 barrels in October to '124,000 in November. This large increase is more than th~ seasonal gain. Last year in November, stocks were hut 252,000 barrels. Markets remained rather firm during the month but demand slackened somewhat as reflected by the decline in shipments. Prices were unchanged. The basic price on December 1 was $2.25* per barrel in Dallas and $2.35* at •Prices quoted through the courtesy of the Texas Portland Cement Company. Houston, 10 cents a barrel being allowed for cash and 40 cents for cloth sacks where returnable. THE CEMENT SITUATION* (In Thousands of Barrels) November October November 1928 1928 1927 Production -------------­529 617 525 Shipments -------------­451 552 543 Stocks ----------·----------424 346 252 *From the United States Department of Commerce. LUMBER Production of lumber declined seasonally in November. In this connection, it is interesting to note that millmen are maintaining a better balance between production and consumption. Average output per mill declined 6.6 per cent which more than offset the decrease of 3.9 per cent in shipments. At the same time, stocks fell .2 per cent and unfilled orders show a gain of .8 per cent. THE LUMBER SITUATION* (In Thousands of Feet) Nov. Oct. Per Cent 1928 1928 Change Preliminary report of 147 148 Mills mills in the Southwest- Av. production _____ _ 1,421 1,464 -2.9 % Av. shipments ------­ 1,529 1,677 - .8 % Av. unfilled orders__ 1,254 1,338 - .6 % Final report of 30 Texas Mills 34 Mills Av. production ________ 2,002 2,144 -6.6 % Av. shipments -------­ 2,196 2,285 -3.9 o/o Av. stocks ­--------------­ 5,011 5,020 -0.2 o/o Av. unfilled orders__ 1,387 1,376 + o.8 % *From the Southern Pine Association. Thirty mills reporting to the Southern Pine Association produced an average of 2,002,000 feet of lumber in No­vember, compared to an output of 2,144,000 feet in Octo­ber. Shipments were 2,196,000 feet, against 2,285,000 feet the month previous. Average stocks fell from 5,020,000 feet in October to 5,011,000 feet in November, while unfilled orders went up from 1,376,000 feet in October to 1,387,000 feet in November. Prices were unchanged to slightly higher. Markets are holding up fairly well in sympathy with the large volume of building and construction work going on. PETROLEUM There were few developments in the petroleum industry during November which materially changed the situation from that obtaining over the past two or three months. Daily production in the United States appears to be stabi­lized around the 21h million-barrel mark, or just about enough to offset consumption. In this connection, it is interesting to note that the decline in old fields is made up by the output in new ones. During November 21,619,000 barrels were gathered in Texas, compared to 22,600,000 barrels in October and 18,726,000 barrels in November last year. Daily average fl11w ·fell from 729,000 barrels in October to 721,000 in November. The decrease in daily flow and the fact that November has but 30 days accounts for the decline in total output for the month. Field work fell off somewhat. Of the 489 new wells completed in November, 257 were producers, whereas there were 351 successful wells among the 587 completions during October. Last year in November, 407 wells were completed, of which 213 were successful. Crude prices in most cases were about unchanged, but gasoline prices were reduced, as is usual at this season of the year. THE PETROLEUM SITUATION* (Production in Thousands of Barrels) November October November 1928 • 1928 1927 Production- Total --------------------21,619 22,600 18,726 Daily average______ 721 729 624 Wells completed_____ 489 587 407 Producers --------------­ 257 351 213 *From the Oil Weekly. COTTON MANUFACTURING The cotton textile industry of the State reflects further improvement during November; most mills were operating <'n about the same schedule as was maintained in Octo­ber. While the manufacturing margin is not entirely satisfactory, mills are doing better than they were a few months ago. A total of 8,129 bales of cotton were manufactured into 6,985,000 yards of goods in November, compared to the consumption of 8,706 bales of cotton and an output of 7,626,000 yards of cloth in November, 1927. Cotton goods sales amounted to 3,903,000 yards in November, compared to 6,645,000 yards in October. While unfilled orders fell from 10,375,000 yards in October to 7,582,000 yards in November, last year in November, forward busi­ness totaled 9,695,000 yards. At the present rate of production, unfilled orders are equal to about five weeks run. TEXAS COTTON MANUFACTURERS REPORT November October November 1928 1928 1927 Mills reporting__ 21 21 18 Bales of cotton used __________________ 8,129 8,144 8,706 Yards of cloth- Produced __________ 6,985,000 6,942,000 7,626,000 ·-­ Sales --------------3,903,000 6,645,000 2,699,000 UnfiJed orders (end of period) 7,582,000 10,375,000 9,695,000 Active spindles____ 201,000 197,000 176,000 Spindle hours_____ 96,136,000 102,205,000 69,953,000 SPINNERS MARGIN Spinners margin advanced 4 points during November. This brings the ratio back to the September figure and to a level only about 8 points below normal. The rather . sharp gain in the margin indicates that the spinning industry is improving and that the demand side of cotton is gaining strength. TEXAS BUSINESS REVIEW American middling cotton in Liverpool av·eraged 10.56d in November and 32-twist cotton yarn in Manchester averaged 16.08d, compared to 10.82d for cotton and 16.05d for yarn in October. The decline in cotton and the slight gain in yarn resulted in a gain of the ratio. The margin averaged 152 in Nov·ember against 148 in October and 148 in November last year. Yarn markets showed considerable improvement during November both in the United States and in Europe. Moreover, the gain in the spinners margin of profit as reflected in the higher ratio is an encouraging feature. At present quotations, yarn is still a little low in com­parison to raw cotton. Spinners Margin refero to the ratio between the price of American 12-twiet cotton yarn in Manchester and the Liverpool price of middling American cotton. Normally, the price of 32-twiet should be 60% above the spot price of American middling cotton. If prices change eo that the ratio increases, the spi~nere· margin of profit is increased and thereby the demand for cotton is strengthened. On the other hand, when the ratio decreases, the spinners margin la also relati•eb' -. creased, and then the demand for cotton falla. SPINNERS MARGIN 1928 1927 1926 1925 J anuary .......... 149 174 150 174 February 151 179 160 168 March......----····· 150 173 156 165 April ·······--······ 149 168 155 166 May ··-·-·········-· 149 165 153 163 June 148 172 157 ----------------152 July -·--······---· 147 167 158 147 August ······----154 164 160 153 September ------152 156 166 153 October ________ ___ 148 156 194 157 ovember _______ 152 148 187 163December ________ 147 186 162 Normal=160. ~ior-~-r~-..,~~.-~...,.~~r-~..,-~--,~~-r-~-,-~~r-~..,...~....,.~~,-~--r~~.--~...,...~--.~~..-~~­ SPINNERS llARGIN Normal = 160 A cotton crop of 14,373,000 bales is indicated foi: the United States by the United States Department 0£ Agriculture in its final report for the season, compared to a production of 12,955,000 500-pound bales last year. The Texas crop is estimated at 5,150,000 bales against a harvest of 4,352,000 bales in 1927. The larger crop this year is just about offset by the decrease in carry-over and the increased exports so that the total supply is but slightly larger than that of a year ago. Most of the T