The University of Texas VOLUME VII, 1UMBER 7 August 28, 1933 Business men are more interested than ever before in information regarding such matters as changes in employment, payrolls, department store sales, and related facts showing current conditions of busi­ness in Texas. No other publication offers the Texas man of commercial affairs such complete information along these lines as is carried in the TEXAS BUSINESS REVIEW, the official monthly publication of The University of Texas Bureau of Business Research. If you wish to continue receiving the REVIEW regularly, please use the enclosed subscription card which requires no postage. Because of the sharp cut in Bureau appropriations, it has been necessary to make a nominal charge of $1 a year. NOTWITHSTANDING the many uncertainties which still confront all lines of Texas industry, there is evidence of much greater public confidence in the future than prevailed a year ago. Perhaps the most optimistic feature of the current business situation is the moderation of the seasonal de­cline in industrial activity which has taken place in recent weeks after the abrupt rise of the previous four months. This fact seems further to confirm the opinion that business recovery has thus far been based primarily upon fundamental factors rather than upon the novel economic experiments which are now being formulated and rapidly being put into effect. As the belief grows that resort to radical inflationary measures may not after all he found necessary, it is probable that private enter­prise will become more aggressive and direct public participation in industry less necessary. Standing in the background as great potential sources of demand, as the business outlook clears up, are the construction industries and the railroads. So far, both residential and commercial construction have lagged far behind many other lines of industry and the rail­roads only recently have given signs of placing sub­stantial orders for various types of equipment. More­over, the potential demand for the products of the motor industry is still far from exhausted and the same is doubtless true of many other industries which have so far been chiefly responsible for the rise in industrial activity which has taken place since the middle of March. The business outlook for the immediate future is clouded by the conflicting forces inherent in the National Recovery program. The basic objectives of this program &re to abruptly raise commodity prices and increase employment and pay rolls. At the same time retail prices are to he held in check so that the rank and file of citizens may have increasing command over goods and services. Necessarily such a program involves many painful readjustments and contains apparent inconsist­encies. Important features of the administration program as embodied in the codes of ethics for the various in­dustries have for years been recognized as essential to ameliorate the evils of wasteful competition. Many of these features which are being urged most strongly now in the recovery program appear to be definitely in con­flict with the anti-trust laws of both Federal and state governments. Should the administration program finally result in the removal of the shackles imposed upon industry, it may reasonably he expected that business will be able to successfully absorb those elements of the program as may prove to have been ill advised. Texas, for example, stands to gain immeasurably from the more rational control of the oil situation as contem­plated in the code of fair practices recently adopted. On the other hand there are doubtless features in the code that will work hardships upon individuals and groups within the industry. The best that can be hoped from the recovery program in all its phases is that the construc­tive features will more than offset the unfavorable ones and that there will be a net balance of gain resulting from human effort which will supplement the natural forces which art! so obviously making for industrial recovery. Both the immediate and longer time outlook for agri­culture is decidedly spotted and obscure and a number of knotty problems illustrate the composite character of this industry. The sharp rise in the price of wheat and commercial feeds while beneficial to the agri­cultural regions that have a surplus of these products has brought about a critical situation for livestock feeders, dairymen and poultrymen. Even within these smaller subdivi$ions of agriculture sharp conflicts of interest are appearing between those who produce the raw materials and those who convert them into manu­factured products. Processing taxes are further com­plicating the situation by imposing extra costs upon manufacturers which, in the present state of the public mind cannot always readily be passed on to the con­sumer. Especially will this be a hardship upon small operators with inadequate reserves and poor credit standing. These farm price maladjustments present special problems for Texas farmers, cattlemen, and the manu­facturers of Texas farm products. With the emphasis placed upon raising the price of cotton, the problem of maintaining interest in livestock and many compara­tively new manufacturing industries based upon live­stock and its products, becomes increasingly more difficult. And yet the livestock industries in Texas must be expanded since the nationalistic agricultural policy upon which the country appears to be launched calls for severe restriction of the acreage of Texas cotton and wheat and correspondingly greater emphasis upon feed crops for livestock. Assuming that this nationalistic policy will be carried to its logical conclusion, stupend­ous efforts will need to be put forth by the leaders of Texas agriculture and industry in reducing costs of production and in securing profitable markets for the greatly increased supply of animal products which this policy impries. Livestock feeding and packing, dairy manufacturing and enterprises based upon poultry pro­duction will need to be greatly expanded. Evidence of business improvement is reflected in the July employment figures covering 926 establishments which were 3 per cent above those for June and more than 8 per cent larger than for July 1932; in merchan­dise retail sales figures showed an increase of 9.5 over July last year and a considerably smaller seasonal de­cline from June than in any of the preceding three years; and new passenger car registrations were 109 per cent greater than in July, 1932, while total sales for the first seven months were 47 per cent above those for the corresponding period last year. FINANCIAL During the past month, the attention of the Admin­istration has been concentrated almost wholly upon the gigantic task of organizing and putting into operation the nn~ion-wide N.R.A. program. It is becoming increasingly evident that this program is to constitute the major attack upon the depression and that drastic inflationary steps will he attempted only as a last resort to bolster up a thre.aten~d failure of this offensive. There is a growing feelmg m some quarters, however, that a rapid expan­sion of hank credit will he required in the near future in order to tide over distressed business concerns. The e~sence of the N.R.A. program is that employers are asked voluntarily to increase their labor costs without immediately raising prices. For many thousands of concerns, this increased operating expense spells disaster unless they can borrow funds with which to carry on until busine1Ss recovery increases their sales volume sufficiently to permit a profit margin. It is not unlikely, therefore, that the government will shortly attempt some artificial expansion of bank credit. Such expansion would be expected to take the form of substantial open market purchasing by the Reserve Banks, but it is entirely possible that more drastic steps will be taken. Perhaps the government may go so far as to endorse the short term notes of "deserving" busi-· ness borrowers. Thus far (August 16) at least, reserve hank open market purchasing has been negligible in amount and has done little more than offset the repay­ment of borrowings by member banks. The condition of the reporting member banks has changed but little during the past month. Net demand · deposits decreased from $10,709,000,000 on July 12 to $10,495,000,000 on August 9, the decline of $214,000,000 evidently representing a further utilization of funds by depositors since the Glass Bill forbade banks to pay interest on demand deposit balances. During the same period, borrowings from the Reserve Banks increased from $21,000,000 to $28,000,000; total loans declined from $8,642,000,000 to $8,538,000,000; total investment holdings dropped from $8,082,000,000 to $7,986,000,000. Not only was there no expansion of bank credit during the month, but the velocity of circulation, as indicated by debits to individual accounts, declined considerably. Banking statistics for the Eleventh District show the same general trends for the month as do figures for the country as a whole. Demand deposits declined slightly, as did the total volume of bank credit in use. However; the decline in total loans outstanding and in government securities owned was almost negligible. Borrowing from the Reserve Bank remained constant at $1,000,000. Debits t 1 individual accounts, alth9ugh somewhat lower than in June, were substantially ahead of July 1932. (In Millions of Dollars) July June July 1933 1933 1932 Debits ·-------·-----------------·-·---------------·-·----------·$554* $421 $402 Cond ition of reporting banks as of Aug. 2 June 28 July 27 Deposits (total) ---------------------------------------335 337 350 Time -------------------------------------------------------127 125 125 Demand ---------------------------------------------------208 212 225 Borrowings from Federal Reserve ._____ _____ 1 1 6 Loans (total) ---------------------------------------------205 207 237 On Securities -----------------------------------------60 64 74 All Other ----------------------------------------------145 143 163 Government Securities Owned ________________ 106 108 83 *Five weeks. WHOLESALE AND RETAIL PRICES The July record of commodity prices was marked by the increase in farm prices. The farm prices group in­cluded in the United States Bureau of Labor Statistics all-commodity index rose practically 7 points during July, and was 12 points higher than it was in July a year ago. Retail prices of food also showed unusually large increases. During the early weeks of August, the dollar has over­come some of the sharp decline in terms of gold ex­perienced during July; the Annalist all-commodity index based on gold had risen from an average of 74.2 for July to 76.3 for the week ending August 15·; July June July 1933 1933 1932 Wholesale Prices: U. S. Bureau of Labor Statis­tics (1926 =100) _________________ _ 68.9 65.0 64.5 95.4 92.l The Annalist (1913 =100) ________ } 1~!:i• 77.2* Dun's --------------------------------------156.13 $149.18 $128.76 Bradstreet's ----------------------------$ 9.01 s 8.34 6.80 Farm Prices: U. S. Department of Agricul­ture (1910-1914 =100 ) ____________ 76.0 64.0 57.0 U. S. Bureau of Labor Statis­tics (1926 =100) -----------------60.l 53.2 47.9 Retail Prices: Food (U. S. Bureau of Labor Statistics) (1913 =100) ________ 104.8 96.7 101.0 •On gold basis based on exchange quotations for France, Switzerland, Holland, and Belgium. COMMERCIAL FAILURES The record of commercial failures so far in 1933 com­ pares favorably with that for more "normal" years. The record for July is certainly noteworthy, .for th~re _~~ve been only three cases since 1920 when either hab1hties or the number of failures for July were smaller than they have been this year. . According to weekly reports to the Bureau of Busmess Research from Dun and Bradstreet, there were only 41 commercial failures during the five weeks of July, or an average of about 8 a week; last year during the five weeks in July, 70 failures were reported. Liabilities reported during July amounted to $732,000, with two firms having liabilities of over $100,000. Last year in July, total liabilities reported by _the. 7? bank­ ruptcies were $2,595,000, and 7 firms had hab1hties over $100,000. Average liabilities per failure amounted to $17,844 during July, only 6 per cent greater than the average of $16,888 for June, and less than half t_!ie aver­ age liabilities reported for July a year ago, $37,~ll. There was available to creditors on the basis of the book value of assets of the bankrupt firms, an average of 53 cents on the dollar, as compared with 41 cents in June and 45 cents in July last year. Of the total failures reported, 7 were groceries and meat markets, six were drug stores, five were wome:i's specialty shops, and two each of men's shops, dry goods stores, general stores, manufacturers, and produce mer­ chants. July June July 1933 1933 1932 Number -----------------­41 27 70 Average Weekly Number 8.3 6.7 14 Liabilities ---------------------S 731,596 s 456,000 $2,595,000 Assets -------------'----------386,988 189,000 1,171,000 Average Liabilities per Failure ------------16,888 37,071 ERS New corporations nu 150 received charters from the Secretary of ng the month of July. These new corporations orized capital stock of $3,256, 700, the highest ny one month since last December, and subs tan ve the total for the 145 new firms incorporated ' $2,723,000. Eight of the companies had authorized capital stock of $100,000 or more, the highest total since January. while 59 were capitalized at less than S5,000. Merchandising firms accounted for 31 of the new corporations, 34 were oil companies, and 33 were manu­facturers. The number of manufacturing concerns re­ctiving charters was unusually high. Permits to operate in Texas were granted to 26 out­of-State corporations, as compared with 24 in June and 22 in July a year ago. July June July 1933 1933 1932 Capitalization ----------· 3,256,700 2,732,000 2,72.3,000 umber --------------150 187 145 Foreign Permits 26 24 22 Classification of ew Corporations: Oil ---------------34 49 32 Public Service _____ 2 Manufacturing 33 29 23 Banking-Finance 6 11 ---- 5 Real Estate-Building -11 18 19 Transportation 2 5 4 Merchandising 37 ------ 44 38 General ---27 24 -------- 29 umber Capitalized at less than 59 66 52 5,000_____ umber Capitalized at $100,000 or more______ 6 8 4 EMPLOYMENT Apparently, many Texas firms began waging the President's campaign against the depression eYen before "NRA" signs became the accepted symbol for "open for business". Reports from 926 employers to the Bureau of Business Research of The University of Texas and the United States Bureau of Labor Statistics showed increases in the number of workers on payrolls as of the 15th of July. As of July 15, there were 69,981 workers on payrolls, 8.2 per cent more than on the corresponding date a year earlier. The increase as compared with June 15, a month earlier, was 2.9 per cent-the only increase between these two months since 1929. The general level of wages, however, continued slightly downward, the average for the 69,981 workers on payrolls on July 15 being $21.46, as compared with $21.69 for the 67,986 workers on payrolls of the cor­responding firms a month earlier. Because of the in­cre~se in the number of workers, however, there was a gain in the total income to all workers from an aver­age per week of $1,474,616 in June to 81,501,792 for July. There were eight employment groups, affecting more than 11,000 workers, in which both the average weekly wages and the number of workers were increa:;:ed: bakeries, men's clothing manufacturing plants, brick plants, foundries, structural iron works, lumber mills, cotton textile mills, and wholesale stores. A total of 43,000 workers was included in the fourteen groups in which wages were slightly cut but more men were put back to work: auto and body works, ice cream factories, beverage plantc, ice factories, railroad car shops, petroleum refineries, saw mills, furniture man­ufacturers, paper box manufacturers, cement plants, commercial printing shops, quarries, public utilities, and the miscellaneous group. Increased wages but fewer workers were reported at laundries, cotton oil mills, cotton compresses, news­papers and hotels, while cuts both in the number of workers and in wages paid were reported at confec­tioneries, pure foods plants, flour mills, meat packing plants, women's clothing manufacturers, electric rail­way car shops, and retail stores. No. of Workers Percentage C1;ange Estab-from from lish-July June July June July ments 1933 1933 1932 1933 1932 Amarillo ____________ 12 384 378 396 + 1.6 -3.0 Austin -------------28 668 664 606 + 0.6 + 10.2 Beaumont __________ 21 2,676 2,575 2,486 + 3.9 + 7.6 ______________ ____107 Dallas 9,115 9,536 8,883 -4.4 + 2.6 El Paso -40 1,773 1,856 1,982 -4.5 -10.5 Fort Worth -----46 5,361 4,994 4,451 + 7.3 + 20.4 Galveston -----------27 1,272 1,532 1,556 -17.0 -18.3 Houston --------------78 16,882 16,217 14,178 + 4.1 + 17.7 Port Arthur ·-----12 5,413 5,395 4,954 + 0.3 + 9.3 San Angelo ----·-·· 7 166 157 159 + 5.7 + 4.4 San Antonio ------72 4,258 4,157 4,214 + 2.4 + LO Waco ____________ -·----23 967 923 9'30 + 4.8 + 4.0 Wichita Falls ----29 826 726 765 + 13.8 + 8.0 ___ 424 Miscellaneous 20,220 18,876 19,102 + 7.1 + 5.9 STATE ___________ ·--· 926 69,981 67,986 64,662 + 2.9 + 8.2 DEPARTMENT STORE SALES Department and clothing stores are apparently reap­ing the benefits from increased purchasing power made available with increasing employment, for the 92 stores reporting sales to the Bureau of Business Research made a record for July which has not been duplicated in terms of percentage improvement since the Bureau's records began in 1927. Number Percentage Change in Dollar Sales of July July Year-to-date Stores 1933 from 1933 from 1933 from Report-J uly Ju ne Year-to -date in&' 1932 1933 1932 Abilene ------------------------------3 + 11.4 -15.1 + 2.7 Austin ------------------------------6 -4.6 + 9.0 -5.2 Beaumont ------------------------6 -9.9 -18.7 -11.9 Corsicana ----------------------------3 -6.7 -18.3 -17.5 Dallas ----------------------------------8 + 20.3 -16.1 -8.2 El Paso ----------------------------3 -1.4 -31.2 -13.8 Fort Worth --------------------------5 + 22.0 -9.5 -8.4 Galveston -------------------------5 -25.7 -29.9 -22.6 Houston _______________________________ 10 + 14.0· -18.7 + 0.6 Lubbock --------------------------------3 + 18.8 + 16.5 -2.8 l.?ort Arthur ------------------------4 + 37.0 -11.8 + 13.1 San Angelo -----------------------3 + 38.5 -11.8 + 3.2 San Antonio -----------------------5 + 3.2 -21.5 -15.3 Tyler -------------------------------3 + 5.1 -20.6 -15.6 Waco -------------------------------4 + 4.8 -23.l -15.8 Wichita Falls -----------------------3 -4.0 -13.2 + 0.2 All Others __________________________18 -14.8 + 1.2 -21.9 STATE _____________________________92 + 9.5 -17.l 9.1 Department Stores (Annual Volume over 500,000) ____ l 7 + 13.8 -18.5 8.1 Department Stores (A~nual · Volume under $500,000) _37 -2.5 -11.9 -10.6 Dry Goods and Apparel , Stores ---------------------------~12 -24.3 -0.7 -25.1 Women's Specialty Shops ___13 + 17.0 -17.7 -10.3 Men's Clothing Stores. ________13. + 2.9 -19.4 -5.0 Whereas there is no case on record when sales in July were less than 20 per cent under those in June, this year July sales were only 17 per cent less than those for the preceding month. Furthermore, total sales for the month of July were greater by 9.5 per cent than were those for July a year ago-the first time in several years that sales have shown an increase when compared with the cor­responding month a year earlier. For the year-to-date, sales in 1933 were only 9.1 per cent under those for 1932-a decided improvement over the situation in earlier months. Abilene, Houston, Port Arthur, San Angelo, and Wichita Falls all showed greater sales for the first seven months of 1933 than for the corresponding months in 1932-an accomplishment worthy of note. In Austin, Dallas, Fort Worth, and Lubbock, the declines were smaller than the average decline for the entire 92 stores. All factors considered, the group including the large department stores, that is, including only department stores with an annual volume of $500,000 or more, made the best showing, with the specialty shops, both men's and women's, also showing up well. The ratio of collections to outstandings at 28.5 was higher than it was a year ago in July, only 26.2, and relatively more goods were sold on charge accounts this year than last. The fact that collections are being main­tained with increased sales is a very favorable develop­ment. CEMENT Production at Portland cement mills in Texas totalled 274,000 barrels during July, a decline of 21 per cent from the total for the preceding month, 34 7,000 barrels. July output compared quite favorably with that a year ago, 278,000 barrels. Shipments did not quite come up to production, so that there was an addition of 37,000 barrels to stocks at mills. At the close of July, stocks totalled 765,000 barrels, an increase of 5.1 per cent over the 728,000 barrels on hand al the end of June, and greater by 15 per cent that the 667,000 reported at the close of July a year ago. On Barrels ) July June July 1933 1933 1932 Production ______________________________274,000 347,000 278,000 Shi pm en ts ---------------------------------· 237,000 298,000 307,000 Stocks -----------------------------------------765,000 728,000 667,000 The Portland cement industry in the United States operated during July at 27.6 per cent of capacity, an increase over the percentage of 26.0 operated in the pre­ceding month. Last year in July, 34.2 per cent of capacity was in operation. All of these data are taken from reports to the Bureau of Business Research e United States Bureau of Mines. Southern pine mill' duction schedules on the rncrease, average wee tion per unit having in­creased from 236,234 June to an average of 256, 786 feet during J average production per week was higher by 6 t than it was last year. Although shipments did not keep pace with those a month· ago, average weekly shipments per unit during July, at 265,808 feet, were 51 per cent greater than those for the corresponding weeks a year ago, 176,137 feet. Even so, shipments exceeded production during July by an average per unit of about 10,000 feet a week. The Southern Pine Association makes the following report regarding the southern pine lumber industry: Un Board Feet ) July June Jul y 1933 1933 1932 Average Weekly Production per Unit.____________ 256,786 236,234 153,920 Average Weekly Shipments per Unit.______________265,808 310,593 176,137 Average Unfilled Orders per Unit, End of Month _____717,088 827,867 427,327 For the first time in several months, unfilled orders showed a decline. Average unfilled orders per unit at the close of July were 717,088 feet as against 827,867 -feet four weeks earlier, a decline of 13.4 per cent. Last year at the close of July, average unfilled orders per unit were only 427,327 feet. BUILDING PERMITS The building industry in Texas showed unusual vigor for the mid-summer month of July by showing a gain over June of 32 per cent in building permits awarded as against a "normal" seasonal decline (based on experience since 1926) of 1.7 per cent. Reports to the Bureau of July J une Jul y 1933 1933 1932 Abilene _________________________$ 16,615 $ 1,975 $ 1,325 Amarillo --------------------------35,233 5,972 10,932 Austin ------------------------------138,514 157,684 91,392 Beaumont ------------------------­40,269 11,984 12,135 Brownsville ---------------------­ 975 784 2,920 Brownwood --------------------­1,468 1,467 2,000 Cleburne -------------------------­ 450 2,570 Corpus Christi ----------------11,633 17,299 11,026 Corsicana ----------------------------9,200 15,000 21,975 Dallas ------------------------------267,242 247,244 201,831 Del Rio -----------------------------2,620 1,045 4,215 Denison ------------------------------5,000 20,600 1,940 El Paso ----------------------------22,944 10,580 19,906 Fort Worth --------------------473,140 796,110 158,245 Galveston ------------------------54,940 39,443 41,089 Harlingen ------------------------20,170 2,319 4,250 Houston -----------------------------1,032,329 273,420 135,088 Jacksonville ------------------1,838 2,400 2,050 Laredo ------------------------------1,500 700 400 Longview -------------------52,000 22,526 166,658 Lubbock -----------------------82,055 9,020 1,400' McAllen -----------------------1,115 2,500 185 Marshall ----------------------12,500 10,726 6,052 Paris -------------------------5,375 10,685 10,798 Plainview -------------------15,000 6,500 152,000 Port Arthur ---------------7,299 9,227 5,696 San Angelo ----------------15,920 3,165 3,840 San Antonio ------------------78,165 117,214 120,516 Sherman -------------------4,274 4,817 32,170 Snyder -------------------------1,950 100 Sweetwater -----------------600 1,587 4,800 Temple ------------------------------14,000 10,500 9,425 Texarkana --------------------------2,290 2,125 2,090 33,505 21,548Ą~~~ ::~~:==:::=::=:::=::::=::: ~:~n 35,772 16,887 Wichita Falls ----------------7,652 11,102 4,953 TOTAL __________________ _ ___$2,507,909 1,897,447 $1,284,407 Business Research from 38 chambers of commerce showed that building permits totalling 82,507,909 were awarded during July as against Sl,897,447 during the preceding month. It was the first time since April 1932 that build­ing permits exceeded $2,000,000. Encouraging as is the seasonal increase in building permits, the comparison with a year ago is still more favorable. The total value of the building permits awarded in July is practically double that for July a year ago--a new experience since the slump in the build­ing industry started. Three-fourths of the cities showed increases as compared with a year ago. Much of the improved showing in the building record of the State is due to the increase in Houston, where building permits totalling ~H,032,329 were awarded; however, Fort Worth with a total of S473,14-0, Dallas with $267,242 and Austin with $138,514, also made excel­lent records. PETROLEUM Trade reports indicate that sentiment in the oil indus­try is generally more optimistic than it has been for months. Trade reports indicate also expectations for a rise in price of crude oiL While the oil code, recently signed by the President, and which goes into effect Sep­tember 2, does not fix retail prices, trade reports show that a sharp rise in gasoline prices may be expected. Total oil production in May, June and July was con­siderably greater than the average of a year ago. In June, 1933, domestic production amounted to 85,636,000 barrels as against 67,728,000 barrels for June 1932. Oil exports are somewhat less than they were a year ago; crude oil exports were considerably greater in June 1933 than they were in June 1932, but exports of refined products have fallen off considerably. This means of course a loss to the American refining industry. National consumption of refined products is appar­ently somewhat greater than that of a year ago. During the current year Texas production of oil has averaged around 42';;~ of the national output-a per­centage increase over the 40'/c. of recorded production for 1932. Production in East Texas, and Conroe is con­siderably greater than that of a year ago; other sections of the State register declines. It should be noted, how­ever, that Oklahoma's production is considerably greater than it was a year ago, and that there have been recent rather large increases in drilling permits. According to the American Petroleum Institute, daily average production was: (In Barrels) July June July1933 1933 Panhandle __ 52,100 44,650 55,350 North Texas 50,750 47,300 49,950 West Central Texas____ 21,800 18,950 24,300 West Texas 158,850 157,350 178,650 East Central Texas -----58,350 58,450 57,550 East Texas _______ 565,500 683,500 329,300 Southwest Texas ------52,550 50,750 55,900 Coastal Texas ------207,150 180,700 123,800 STATE _______l ,167,050 1,241,650 874,800 U ITED STATES ______---2,670,900 2,609,200 2,171,900 Imports -------146,678 87,000 77,750 New developments m Texas, according to the Oil 1fi'eekly, were: July June July 1933 1933 1932 487 870 Wells Completed -----------------------­404 310 828 Oil Wells ----------------------------------263 213 721 Gas Wells ---------------------------------·-· Permits for New Wells -···-----··· 1,106 10 4 16 Initial Production (In Thousands of Barrels) ----------960 742 4,874 Gasoline sales, as reported by the State Comptroller, on the basis of taxes collected, amounted to 71,666,000 gallons in June, as compared with 63,058,000 gallons in May and 68,926,000 gallons in June a year ago. COTTON American cotton is in the strongest pos1t10n it has occupied for three years; due to a reduction of the carry· over in the United States of about 1,500,000 bales as of August 1. This drastic reduction in carryover was offset to a considerable extent by a crop estimate as of August 1 o! 12,314,000 bales, or 1,008,000 bales more than the estimate on this date last year. The net supply of cotton in the United States for the year 1933-1934 including carry-over plus the estimated crop is 20,490,000 bales. This compares with 20,958,000 bales last year and 21,­950,000 bales two years ago. The plan of the Federal Government to reduce the supply of cotton by leasing growing crops on condition that the farmers destroy the cotton was successful in that it is estimated that about 10,304,000 acres of cotton were destroyed. This represents about 25.3 per cent of the acreage under cultivation as of July 1, 1933, as reported by the Crop Reporting Board. According to these figures, the supply of cotton indicated for the United States August 1 would have been a record had not the Govern­ment intervened with its program of crop reduction. World cotton conditions as a whole have improved largely as a result of the increased consumption of all cotton during the past year. According to Garside of the New York Cotton Exchange Service, the world carry­ over of all cotton on August 1 was 15,530,000 bales com­ pared with 17,412,000 bales last year. While it is too early to make reliable forecasts of foreign production it is known that there has been an increase in acreage. World consumption of all cotton during 1932-1933 was 24,725,000 bales, according to Garside, compared with 23,007,000 bales a year ago. According to the trend of world cotton consumption, normal consumption is now above 25,500,000 bales. If world economic condi­tions continue to improve, there seems every reason to expect that the present rate of consumption will be main­tained. SPINNERS MARGIN Spinners ratio margin declined to 155 for July as compared with 160 during the preceding month. The decline was due to an increase in the price of middling spot cotton in Liverpool to 6.37 d coupled with a decline in the price of 32-twist cotton yarn at Manchester to 9.90 d, as compared with 6.22 d and 9.97 d respectively for the preceding month. The actual pence margin was reduced from 3.75 d for June to 3.53 d in July. Last year the ratio margin was 1 78, and the actual pence margin was 3.72 d. 230 220 SPINNERS MARGIN I l 21 NORMAL•l~7 " I r \ 200 \ 190 \ 7\ •a I I/ \ /""f'-. 170 v 1..7 \ 16­ A \ r\ / o'--­ 1s -v v 'V' = 140 1930 1931 1932 19331929 COTTON BALANCE SHEET Indicated supplies of cotton in the United States August 1 were 20,490,000 bales, compared with 20,­988,000 bales a year ago and 21,950,000 bales two years ago. According to the average of the past seven years, a change of 100,000 bales in the indicated supply in the United States as of August 1 causes a change of 14.33 points in the price. Based on the supplies in the United States alone, the gold price of cotton should be about 7.60 cents. The supply-price chart . of the Bureau indi­cates a gold price of 8.12 cents. In terms of the gold franc, the dollar is now worth about 73 cents so that the dollar price of cotton should be about 10.50 cents per pound. COTTON BALANCE SHEET IN THE UNITED STATES Year 1925-1926 -------------------------------------------------------­1926-1927 ------------------·-------------------------------------­1927-1928 ----------------------------------------------------------­1928--1929 -------------------------------------------------------· 1929--1930 -----------------------------------------------------­1930-19·31 --------------------------------------------------------­1931-19'32 ----------------------------------------------------------­1932-1933 --------------------------------------------------------­1933-1934 ---------------------------------------------------------­ •Jn 500-pound bales. AS OF AUGUST 1 (In Thousands of Running Bales) Carry- Final over Imports• Glnnln11 Total 1,610 13,566 3,543 15,621 3,762 13,492 2,536 14,291 2,313 15,543 4,530 14,362 6,369 15,581 9,682 11,306 8,176 12,314 The cotton year becin1 Aup1t 1. Consumption Ei:porta Total Balance 15,176 19,164 17,254 16,827 17,856 18,892 21,950 20,988 20,490 COTTON MANUFACTURING IN TEXAS Although activity at Texas cotton mills is quieting down from the early summer high now that processing taxes are in effect, all phases of cotton mill work are substantially ahead of last year for July. Reports to the Bureau of Business Research from Texas cotton mills show that 7,048 cotton bales were consumed in the Texas cotton industry in July, more than double the number for July a year ago, 3,234. A total of 6,951,000 yards of cotton goods were produced as compared with 7,375,000 yards in June and 2,485,000 yards in July a year ago. July June July 1933 1933 1932 Bales of Cotton Used __________ 7,048 7;2,76 3,234 Yards of Cloth : Produced -----------------------6,951,00Q. 7,375,000 2,485,000 Sold -------------------------------5,926,000 8,218,000 3,141,000 Unfilled Orders _ _______ 9,632,000 13,112,000 3,265,000 Active Spindles ------------------161,827 150,194 128,718 Spindle Hours --------------------53,089,000 58,360,000 29,523,000 Shipments experienced the largest declines as com­pared with the previous month, with only 5,926,000 yards having been sold; however, this total was almost twice that for July a year ago, 3,141,000 yards. Sales were slightly more than 1,000,000 yards under produc­tion. Unfilled orders at the close of July totaled 9,632,000 yards, one-fourth less than the total at the close of June, 13,112,000 yards. Last year at the close of July, Texas cotton mills had unfilled orders for only 3,265.000 yards of goods. POULTRY AND EGGS Interstate rail shipments of poultry and eggs during July totalled 108 cars compared with 96 cars in July, 1932, an increase of nearly 13 per cent. Of this to'.al poultry shipments amounted to 68 cars and egg ship­ments 40 cars compared with 56 and 38 cars respectively in July 1932. Last July, 13 cars of dressed turkeys were shipped to eastern markets while in July of the current year only two cars were shipped--0ne to California and the other to New York. Reports from commercial hatcheries received by the U. S. Bureau of Agricultural Economics indicate an increase of 9 per cent over the corresponding period last year in the number of salable chicks hatched in the season January to June and an 8 per cent increase in deliveries for July or later. There-is a strong possibility that unless prices are favorable for the sale of chickens, the laying flocks this winter will be larger than last. Cold storage holdings of case eggs on August 1 were 9,503,000 cases compared with 6,400,000 cases a year ago and a 5-year average of 9,300,000 cases. Storage stocks at this time of the year greatly affect prices during the next six months. The relatively high prices in the fall of 1932 were largely due to the low storage stocks while the comparatively low prices of the preceding two autumns were due to the large storage stocks. J LY CARLOAD MOVEYIENT OF PO LTRY A 10 EGG * Shipments from Texa Stations Cars of Poultry Live Dressed Can of Eg_g! Chickens Turkeys Chickens Tu_rkeys 1933 1932 1933 1932 1933 1932 1933 1932 1933 1932 TOTAL ----------------8 3 1 62 42 2 13 46 39 Intrastate 5 6 1 Interstate _________ 8 3 57 42 2 13 40 38 ew York -----7 3 33 20 1 6 6 Illinois 2 2 8 ---------------5 1 Massachusetts _____ 1 1 1 ew Jersey ______ 2 2 Pennsylvania 11 11 3 Louisiana _____ 1 1 13 13 Connecticut 1 1 5 Missouri ______ 1 2 Georgia -----------1 3 8 California 2 1 1 3 Alabama -------3 Florida 1 Rhode Island -------1 Ohio ------------5 Tennessee -------2 Maryland 2 Mississippi 2 2 South Carolina _____ 1 D. of Columbia ____ 1 Receipts at Texas Stations TOTAL ______ 4 8 5 Intrastate ______ 4 4 1 Interstate ____ _ 4 4 Kansas ___________ 3 1 Missouri _____ _ 1 Oklahoma ___ _ 1 2 *These data are furnished the U. S. Department of Agriculture, DivUion of Crop and Livestock Estimates, by railway officials through agents at all station• which originate and receive carload shipments of poultry and eg:C"!-· The data ~ne compiled by the Bureau of Business Research. LIVESTOCK SHIPMENTS Total shipments of livestock to Fort Worth and inter­state poirits of 3,341 cars were practically the same a!' the 3,457 cars in July, 1932. For the different classes of livestock in July compared with the same month last year shipments were: cattle, 1942 and 1994 cars; calves 473 and 616 cars; swine 595 arid 266 cars: and sheep 331 and 581 cars. During the first seven months of the year a total of 39,351 cars of Texas livestock was shipped to Texas and interstate points compared with 36,289 cars during the corresponding period in 1932, an iricrease of 11 per cent. Shipments from the high plains region of :'.\orthwest Texas continued during July at the high rate noted in the previous report for June. From the northern half of the Panhandle, the number of head shipped out in July in comparison with a year ago was as follows: cattle 10,855 arid 6,952; calves 3,002 and 2,191; hogs 15,542 and 1,003. From the southern half: cattle 6,021 and 1,593; calves 919 and 1,998; hogs 10,783 and 3,812: and sheep 544 and 3,440. Relatively heavy shipments of cattle and calves also continued in the Trans-Pecos country. The abnormally large shipments were doubtless due Kansas City and Oklahoma City received a smaller to the prolonged drouth which caused marked deteriora­number of each class of Texas livestock in July than a tion in ranges and reduced the supply of feed. year ago. On the other hand larger shipments especially Los APgeles continued its large takings of Texas live­of sheep were made to Colorado, Chicago and other stock. Compared with July, 1932, more than three times Illinois points, Kansas, St. Joseph and other Missouri a!' many cattle and over twice as many calves and hogs were shipped from Texas to this market. points. TEXAS CAR-LOTt RECEIPTS OF LIVESTOCK IN JULY Cattle Calves Hog• Sheep Total 1933 1932 1933 1932 1933 1932 1933 1932 1933 1932 Total Interstate Plus Fort Worth:!: ----------------274 252 32 41 92 45 18 18 416 356 Total Intrastate Omitting Fort Worth§ ______ _____ 4;41 461 121 162 47 31 43 35 652 689 TOTAL RECEIPTS ----------------------------------------715 713 153 203 139 76 61 53 1,068 1,045 TEXAS CAR-LOT SHIPMENTS OF LIVESTOCK IN JULY Cattle Calves Hogs Sheep Total 1933 1932 1933 1932 1933 1932 1933 1932 1933 1932 Total Interstate Plus Fort WorthL .. ___________ ___ 1,942 1,994 473 616 595 266 331 581 3,341 3,467 Total Intrastate Omitting Fort Worth -------------620 522 128 188 22 32 48 38 818 780 TOT AL SHIPMENTS ---------------------------------------2,562 2,516 601 804 617 298 379 619 4,159 4,237 TEXAS CAR-LOTt SHIPMENTS OF LIVESTOCK JANUARY 1 TO AUGUST 1 Cattle Calves Hogs Sheep Total 1933 1932 1933 1932 1933 1932 1933 1932 1933 1932 Total Interstate Plus Fort Worth IT __________________ 20,653 20,210 4,161 3,458 4,344 1,986 4,092 4,883 33,250 30,537 Total Intrastate Omitting Fort Worth. _____________ 4,125 3,543 1,250 1,376 261 213 465 620 6,101 5,752 TOT AL SHIPMENTS ----------------------------------------24,778 23,753 5,411 4·,834 4,605 2,199 4,557 5,503 39,351 36,289 •These data are furnished the United States Bureau of Agricultural Economics by railway officials through more than 1,500 :.'ltation agents, representing every live· stock shipping point in the State; the data are compiled by the Bureau of Business Research. Data on truck shipments to Fort Worth are made po11ible by. the coOperation of the Fort Worth Stock Yards Company. tRail-car basis : cattle, 30 head per car; calves, 60; swine, 80; and sheep, 250. tlncludcs receipts at other Texas points from Fort Worth. §Represents all intrastate receipts, except those billed. from Fort Worth. ifFort Worth shipments are combined with interstate forwardings in order that the bulk of market disappearance for the month may be shown. Entered as second-class matter on May 7, 1928, at the postoffice at Austin, Texas, under the Act of August 24. 1912. A nnonncing-THE BASIS OF THE COMMERCIAL AND INDUSTRIAL DEVELOPMENT OF TEXAS A Stndy of the Regional Development of Texas Resources By ELMER H. JOHNSON Almost daily we receive letters in acclaim of this comprehensive report. Some excerpts follow: " I believe that rio State has anything to even remotely compare with this study." "­a monumental piece of work and full of valuable information to anyone interested in the development of Texas." "­an excellent piece of work, and I am sure it will be appreciated not only throughout your State, but by all students of land utilization and industrial development in our country." " It certainly is a comprehensive piece of work and is an essential step in planned economy." "It should be valuable as a source of basic in­formation for the various trade industries making their future plans for doing business in this section. One of the mistakes we have made in the past is that we have proceeded with our marketing plans with­out a thorough knowledge of the facts on the indus­trial, commercial, and agricultural structure of the State, but various trade groups could well afford to study this publication." This study can be obtained at $2.00 a copy. Order from B UREAU OF B USINESS RESEARCH The University of Texas, Austin, Texas