~ TEXAS But~~~~~ s REVIEW A Monthly' Summary of Business ~d)lfc 1: , •. .,-••, ~tions in Texas and the Southwest ··. ~ !J:..~ , ,..;,<'4. .~. • '<:-. '.) ~ ~ - - -~~:~ ;,f'I v.!f. S -..;'~"-~ ~ ·~/.. Bureau o f~ss Research 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, SEPTEMBER 28, 1928 No. 8 THE MONTH Business and industrial conditions in Texas during cotton and all grains declined. Shipments of fruits and August were generally favorable. Industrial activity in vegetables made an excellent showing for this season of many lines has been greater this summer than usual and the year. The livestock industry is favorable. Ranges from present indications fall expansion should be greater improved after the recent general rains and most animals than was the case last year. Weather conditions favored look good. Prices for beef and hogs are the highest in agriculture in most cases but the recent decline in the several years. Wool and mohair markets weakened a prices of grains and cotton is very discouraging to pro­ little. ducers. The livestock industry has the brightest pros­ The petroleum situation is still faced with the problem pects in many years; ranges are good and winter feed is of overproduction. Daily average flow reached a new abundant. Financial conditions are sound but the stock high level and the peak of the season for gasoline con­ market is displaying another outburst of wild speculation. sumption has possibly been passed. Crude prices were The prospects of large crops and increased industrial unchanged but gasoline dropped 14 cent a gallon. Build­ activity are struggling against the unfavorable influence ing permits made a good showing although construction of high interest rates for supremacy of the business and engineering projects let were smaller. Cement plants situation. enjoyed a good month; shipments were large and stocks Bank debits declined seasonally from the July volume were reduced. The lumber industry is working into a but were greater by 3.4 per stronger statistical position. cent than those in August a Demand for lumber is improv­ year ago. Checks in the Dis­ ing and production is expand­ trict for four weeks in August Prospects of large crops and the indications ing slowly. were $710,000,000 against of industrial expansion this fall are the most Cotton textile mills curtailed $687,000,000 in August, 1927. important influences in the business situation further during the month. Loans and discounts at mem­ at the present time. The least hopeful factor The yarn and cloth markets ber banks remained about un­ and the one which is likely to work against show very little improvement changed while borrowings at business expansion over the next six months but it looks as though bed the Dallas Federal Reserve or year, is the high interest rate coupled with rock prices have been reached Bank increased sharply. Both the credit strain. However, no serious check for the present. Unfilled time and demand deposits con­ to business is in evidence so far and changes orders were sharply lower and tinued the decline which began may occur which will relieve the credit strain cotton goods sales fell ofl'. On before depression sets in. Weather conditions earlier in the summer. the other hand spinners mar­ in the State during August were generally The stock market was gin advanced 7 points indicat­ sharply higher; many stocks favorable and most crops improved. The out­ look for the livestock industry is brighter than ing that improvement is ahead. were advanced to new highs Wholesale and retail trade de­ for all time. Trading was in it has been for many years. Bank debits are above those of a year ago but the volume of clined; sales of 84 department very large volume. Many new retail trade declined somewhat. Labor seems stores totaled $4,544,836 corporations were chartered to be well employed at high wages. and the number of commercial against $4,676,040 in August, failures was •the smallest for 1927, a decline of 2.8 per a long time. cent. Freight tonnage is increasing. Car loadings in ·the In most cases, wholesale prices were higher. Live­ southwest during August were 1.2 per cent above those stock, dairy products, fuels, metals, and petroleum show of a year ago. Shipments of grain and livestock are run­ gains against losses in the animal feed groups, hides, and ning especially heavy. Export and import trade is falling grains. The Annalist weekly index advanced from 149.8 oft this summer and coastal traffic is a little less active. during the first week of August to 152.6 for the same Agficultural conditions are fair. Favorable prospects week of September, and Bradstreet's went up from 13.19 of larger crops are partly offset by lower prices. Cotton to 13.28. Professor Fisher's index stood at 99.9 at the plants held up very well during the month; bolls are beginning of September, or the same as a month earlier opening rapidly and harvesting is . general, Prices of and the indflx of the National Bank of Commerce in 2 TEXAS BUSINESS REVIEW New York City increased .3 of a point to 87.6. The were higher and time rates were advanced to 6% per Bureau of Labor Statistics all-commodity index based on cent against 6 ~4 per cent in July. 1926 as equal to 100 went up from 98.3 in July to 98.9 Bank debits declined seasonally from July but were in August. above those of August, 1927. Checks cashed in the Dis.. trict for the four weeks ending J\ugust 29 according to FINANCIAL the Dallas Bank amounted to $710,000,000, compared to The underlying influences in the financial situation $687 ,000,000 in August a year ago, or an increase of 3.4 continued to work toward firmness in the money market. per cent. Loans and discounts at member banks re­ It was pointed out in the July REVIEW and again in the mained about unchanged at $335,000,000. Last year in August number that the outlook was for firm money August, these loans totaled $320,000,00.0. Member banks markets and higher interest rates. There is no basis held $80,000,000 in Government securities at the end of for changing that view at this time. Fall expansion August, a decrease of $2,000,000 from the month pre­ and the movement of the large grains and cotton crops vious. This compares with $61,000,000 at the end of are expected to create a greater demand for funds over August, 1927. the next month or six weeks. Moreover, the bull move­ Demand deposits continued the decline which began ment in the stock market is not over and there is very in the late spring. · These deposits decreased from $287,- little likelihood of gold being import!!d in sufficient quan­ 000,000 in July to $283,000,000 in August. Time de­ tities to relieve the credit stran. posits also declined sharply in contrast to steady in­ Eight of the twelve Federal Reserve Banks are now on creases over the past ten or twelve months. Borrowings the 5 per cent rediscount basis, the Dallas Bank being at the Dallas Bank increased from $15,730,000 in July one of the four still on the 4 % per cent rate. Call rates on the New York Stock Exchange prevailed at 7 per cent to $20,076,000 in August. These loans were reported at to 7 % per cent during the last two weeks of August. over $23,000,000 during the second week of the month; That they were not higher is due to the fact that cor­ since that time, member banks have been liquidating part porations and individuals sent large sums into the mar­ of their borrowings. However, borrowings are likely to ket because of the attractive rates. Bankers acceptances be heavy until after the harvest period. FINANCIAL STATISTICS FOR THE DALLAS FEDERAL RESERVE DISTRICT* August, 1928 July, 1928 Angust, 1927 Bank Debits (four weeks) .................................................... $ 710,000 ,000 $ 742,000,000 $ 687 ,000,000 Government securities owned, end of month...................... 80,000,000 82,000,000 61,000,000 Member bank borrowings, end of month............................ 20,076,000 15,730,000 7,788,000 Demand deposits, end of month.......................................... 283,000,000 287 ,000,000 273,000,000 Time deposits, end of month................................................ 128,000,000 132,000,000 111,000,000 •From the Federal Resene System. TEXAS CHARTERS capitalized at $25,000,000, and a new Portland cement A new high record was established for August when company at $2,000,000. Thirty-six enterprises increased charters were granted to 207 corporations by the Secre­ their capitalization by $3,156,000 and permits were tary of State. This compares with 214 in July and 109 granted to 41 outside companies. in August a year ago. Most of the companies were Twelve oil companies were chartered, compared to 8 small again, many being capitalized at but $1,000. in July i and 5 public service corporations were organ­ Total capitalization of the 207 companies was $32,084,- ized, the same as in the previous month. Banking and 000 against $9,085,000 in July and $36,059,000 in financial institutions increased from 10 in July to 17 in August, 1927. One building and loan association was August, and 21 manufacturing concerns were chartered. New real estate firms decreased from 19 to 11 during the TEXAS CHART ERS month and the general list shows a loss.