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·~~ TEXAS Bua·~~~,~~~!> s R1EVllEW A Monthly Summa' y of Busin ess ~<{f1f/Jf,, , .~ ..! ions in Texas and the Somh west \~.PC'/~- / ;:;~'+!'/ ···::.:;:{ s """'~;;..<s ~ .. Bureau o f~{s Research The University of Texas Ent.ered 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, OCTOBER 25, 1928 No. 9 Favorable Factors: Unfavorable Influences: 1. Sound financial conditions 1. High interest rates 2. ·Increasing car loadings 2. Declining livestock prices 3, Industrial expansion 4. Labor well employed at good wages 3. Decreasing building permits 5. Relatively few commercial failures 4 . Low grain prices 6. Excellent livestock ranges S. Low spinners margin 7. Many new business organizations 6. Stock speculation 8. Expanding retail trade 7. Weaker petroleum situation 9. Increasing exports 8. Light truck crop movement 10. Rising cotton prices 9. Shrinking construction projects 11. Larger savings accounts 10. Falling bond prices THE MONTH Business and industrial conditions in Texas during rediscount rate at the Dallas Bank remained unchanged September were generally favorable. The upward trend at 41h per cent. of business which began last spring and continued Bulls were in control of the stock market. New, high throughout the summer is showing further gains this levels were established almost daily, both rails and in fall. With the possible expection of building and textiles, dustrials sharing in the advance. Trading continued in industrial operations were expanded and fall activity is record volum~. More new corporations were chartered expected to be considerably above that of a year ago. than in August but the commercial failure record for the The rather high level at which business has been sus month is less encouraging. tained over the past few months has resulted in a grow That the distribution of all commodities is above the ing feeling of confidence regarding the remainder of the volume of a year ago at this time is indicated by in year. creased freight tonnage; weekly loadings are now run Rains during the early part of the month were bene ning above those of a year ago. The Southwest Shippers ficial to crops and greatly facilitated fall plowing and Advisory Board estimates a 12.1 per cent increase in planting. Moreover, livestock ranges show marked im car loadings for the fourth quarter over those in the provement and the abundance of winter feed is an en same quarter of 1927 in this district. Exports gained couraging feature. Even though interest rates are high in volume during September but imports continued small. and credit is rather tight, financial conditions are sound Coastal trade is holding up fairly well. and no serious undermining influences are in sight at The agricultural outlook generally is encouraging. this time which might cause a financial depression. Specu Crops in most cases are good but prices are rather low. lation in the stock market is still excessive, but, for Fall plowing and planting is making good progress- tunately, inflation has not taken hold of the commodity early-planted wheat and oats are coming up to a good markets. Labor is well-employed · and wages are ad stand. The cotton crop promises a larger outturn than vancing. Right now, considerable labor is finding em last year's harvest. Shipments of fruits and vegetables ployment in the cotton fields. from Texas farms declined to but one or two cars a day. The large volume of bank debts each week indicates From now on, loadings should show large increases. The that more business is being done this year than last. livestock industry is very promising even though prices Checks cashed in the Dallas Federal Reserve district for declined shaply during September. Ranges are good and the four weeks ending September 26 totaled $870,000,000 winter feed is abundant. Wool and mohair prices fell cempared to $805,000,000 for the same four weeks of off but eastern markets show improvement over the past 1927, an increase of 8 per cent. Loans and discounts at two weeks. member banks increased seasonally while borrowings at Allowing for seasonal influences, the petroleum indus the Dallas Federal Reserve Bank show a large gain. Both try is a little less promising. Production of crude con time and demand deposits increased. Interest rates were tinues at high levels and field work is very active. A higher; time loans reached a rate of 7% per cent. The slowing up movement was witnessed in the building in- 2 TEXAS BUSINESS REVIEW ===================================================================================:::===-'--- dustry. Building permits fell eonsidcrably below those Interest rates continue hi~h. Moreover, any hope of in September of last year while constrnction and engi lower rates during the final quarter of the year must be neering projects were sharply lower. Cement plants abandoned. That this view is justified is indicated by experienced one of the best months on record, especially the continued high rates on times loans and the fact that from the standpoint of produdion and shipments. Fur the Treasury Department was obliged to pay 4~ per cent ther improvement is reflected in the lumber business. for the October short term issue of $300,000,000. This Production is being held down while shipments are gain is the highest rate the Government has been forced to ing. As a result, unwieldy stocks are being eliminated. pay for this type of financing in many years. The Sep. Little improvement was registered in the cotton textile tember issue carried a rate of 4 % per cent while the industry, although a better sentiment is developing in August rate was but 3 % per cent. Call rates on the the trade. Most mills were operating on t he summer cur New York Stock Exchange reached the unusual level of tailed schedule. Ilowevet', yarn and cloth markets look 10 per cent at the beginning of the month when banks somewhat brighlc1· and unfilled orders show an upward called large sums to meet the quarterly and month-end trend. Spinners marg in declined in September, in con payments. As funds were returned to the banks, the call trast to a large gain in August. Wholesale and r eta il rate declined to around 7 per cent to 7 % per cent and trade increased in volume; sales of 88 department stores held steady around that figure for most of the month. totaled $6,081,000 compared with $5,658,000 in Septem Rates on bankers acceptances gained slightly while time ber, 1927, an increase of 7.5 per cent. loans reached 7 % per: cent, or the highest rate in seven Wholesale prices generally moved to higher levels, but years. A slight easing tendency has been in evidence the various commodities displayed a very erratic t en for time loans over the past week or two. No change was dency. Livestock, hides and leather, wool and worsted made in the 4 % per cent rediscount rate at the Dallas goods were lower, while poultry products, meats, fuels, Federal Reserve Bank. metals and building materials advanced. Bradstreet's, Checks cashed in the Eleventh Federal Reserve District Fisher's, and the A mmlist weekly index all declined. On during September were 8.2 per cent above those in Sep the other hand, gains were recorded by Dun's, the Na t ember last year. For the four weeks ending September tional Bank of Commerce, and the Bureau of Labor 26, debits in the di strict, according to the Dallas Federal Statisties index. The latter index, based on 1926 as Reserve Bank, amounted to $870,000,000 compared to equal to 100, advanced from 98. 9 to 100.1 in September. $805,000,000 for the same four weeks of 1927. Loans The farm price index also gained more than a point and discounts at member banks increased seasonally from during the m onth. $335,000,000 at the end of August to $353,000,000 at The first three quarters of the year turned out to be the beginning of October. Additional loans are likely even better than was hoped for last January. At the before the harvest season is over. Member banks in· beginning of the final quarter, the outlook is favorable creased their holdings of Government securities by for further business and industrial expansion. While $!), 000,000 bringing the total to $89,000,000. Last year there are so:n e unfavorable influences in evidence, there in September, member banks held $65,000,000 of these are no signs pointing to a depression over the next few securities. Demand deposits increased for the first time months at least. in several months. At the end of the month, these deposits totaled $304,000,000 against $283,000,000 in FINANCIAL August and $287 ,000,000 in September a year ago. Time deposits increased from $128,000,000 in August The financial situation during September changed very to $131,000,000 in September, indicating that part of little from conditions in August. Demand for funds in this year's income is going into savings accounts. the agricultural sections of the country for the move Borrowings at the Dallas Federal Reserve Bank went ment of crops is rather heavy, but ample credit appears up from $20,076,000 in August to $22,281,000 in Sep· to be available for all needs. The Fc.deral Reserve tember, as was to he expected. Additional borrowing System is making most of this ercdit available by its is likely before the peak of credit demand is passed. purchases of acceptances and bills. Too, a small amount Some little gold was imported during the month, but of gold was imported, whereas there was an export bal the inward flow is not expected to be in sufficient quan ance in previous months.

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