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Volume 22
mum
-^VVS-\ xV^l
April, 1939
Number 4
Prepared by the
Research and Statistics Department
of the
Federal Reserve Bank of Chicago
Monthly Review of Business Conditions in the Seventh Federal Reserve District
DISTRICT SUMMARY
NDUSTRIAL and trade activity in the Seventh district preceding month. Partly because of the earlier date of Easter
followed a rising trend during March, as is usual for the this year, the rise in department store trade was much larger
period. In many instances, the expansion was considerable than usual, as was that in the retail shoe trade. Sales of fur
and, especially in merchandising groups, more than seasonal niture and housefurnishings at retail expanded about season
after the less favorable than customary trends recorded in ally. In all three of these retail trade phases, sales in the
February. In most production groups output exceeded that current period exceeded those of last March, whereas in Feb
of last March by a wide margin, and the distribution of com ruary slight declines had been recorded in the yearly com
modities likewise was greater than at that time. First-quarter parison. Wholesale trade volumes, as is usual, rose substan
volumes produced and sold in the majority of phases were tially in March and were heavier than a year ago. Inventories
above those of the same 1938 period when a low level of in both retail and wholesale trade groups for the most part
activity prevailed.
continued to be lighter than a year earlier, but margins of
decline were small.
Industry
I
PERATIONS of Chicago district steel mills during
O March were at the best level of the year so far; how
ever, in consequence of some slackening in demand, they
were averaging somewhat lower in the middle of April,
though still well above a year ago. Output of automobiles
in March rose substantially, as was expected, and in the first
quarter of 1939 almost 65 per cent more passenger cars and
trucks were produced in the United States than in the cor
responding 1938 period. Steel and malleable casting foun
dries in the district had heavier production and shipments in
March than a month earlier; new business booked for steel
castings also was larger, but that for malleable castings de
clined. Activity at stove and furnace factories expanded con
siderably during the period. At furniture factories, ship
ments recorded a greater than seasonal increase, although
new orders gained less than is usual. Output from paper and
pulp mills advanced in March, following a decline in Febru
ary, and incoming business showed sizable gains over both a
month and a year earlier. As evidenced by contracts awarded,
building construction in the district expanded, as is usual in
March, and activity in this industry during the first quarter
of 1939 was approximately 70 per cent greater than in the
1938 period. Demand for building materials accelerated
seasonally in March.
A slightly more than seasonal increase was recorded
during March in Seventh district industrial employment and
payrolls; it was insufficient, however, to compensate for the
less than seasonal rise in February. The level of employ
ment and wage payments continued above that of a year
earlier, but was considerably under that of the 1937 period.
Trade
ERCHANDISING phases in the Seventh district showed
greater than seasonal increases during March over the
M
Manufacturing
Iron
and
Steel Products
PERATIONS of steel mills in the Chicago district were
O at the highest level of the year to date in March, out
put of steel ingots reaching 58 per cent of capacity in the
first week of the month and averaging around 56 per cent
in the following two weeks. However, a hesitant buying
period developed thereafter, and some decline took place in
the rate of production. In the third week of April, ingot
output was averaging 531/2 per cent of capacity, but this
rate compared with one of only 30 per cent a year ago at
the same time. The railroads, the construction industries, and
Agricultural Products
HERE was a sharp expansion during March in the pro
duction of packing-house commodities, and the volume
was heavier than either a year ago or in the 1929-38 average
for the period. The sales tonnage likewise increased in these
comparisons and continued to exceed production. Production
and sales of creamery butter and of Wisconsin cheese totaled
larger in March than a month previous. The manufacture
of butter was greater than for last March, but distribution
of the commodity was smaller than at that time, while cheese
production and sales showed the reverse trend. The move
ment of wheat at interior primary markets accelerated
sharply in March and was the heaviest for the month since
1931; the movement of com remained relatively light but
was likewise considerably larger than in February. Winter
wheat, hay, pastures, and rye came through the winter in
better than average condition; but because of damp soil and
subnormal temperatures, most vegetation was relatively dor
mant through mid-April, and plowing and other farm work
were behind schedule.
T
Credit
TTRIBUTABLE largely to Treasury operations, there
was a 158-million dollar rise in reserve balances of
ALSeventh
district member banks between March 15 and April
19, redemptions of Treasury obligations considerably ex
ceeding factors tending to reduce reserve balances. Total
loans and investments of weekly reporting member banks in
the district declined 164 millions in the five weeks ended
April 19, because of the sale of Treasury bills by the banks
to their customers. Total loans of these banks increased
slightly in the period, and holdings of Treasury notes and
of securities other than Government obligations also gained.
miscellaneous buying have been the most important sources
of demand; orders from the automotive industry have re
mained small in volume. March production of pig iron in
the Illinois and Indiana district rose moderately in the daily
average over February and was almost 70 per cent greater
than in the 1938 month. There has been little change in the
price situation, although scrap iron and steel prices showed
weakness in April.
*
*
*
Activity at steel casting foundries of the Seventh district
increased in March over February. As compared with a
year ago, new business booked was substantially heavier,
with output showing only a small increase over that time.
Orders received by malleable casting foundries fell off in
March, for the second successive month, though continuing
well above the 1938 level; shipments and production from
these foundries were much heavier than either a month or a
year previous. At steel casting foundries, volumes produced
and shipped remained smaller than the amount of incom
ing business, but output and production of malleable castings
were noticeably heavier during March than orders booked.
STEEL AND MALLEABLE CASTINGS
SEVENTH DISTRICT
Steel Castings:
New orders booked (tons). ..
New orders booked (dollars)
Shipments (tons).....................
Shipments (dollars)................
Production (tons)....................
Malleable Castings:
New orders booked (tons). ..
New orders booked (dollars)
Shipments (tons).....................
Shipments (dollars)................
Production (tons)....................
March 1939
Per Cent Change
from
Feb.
Mar.
1938
1939
+48.3
+10.7
+17.1
+51.0
+10.4
+ 7.0
+11.2
+ 7.1
+ 5.8
+ 5.4
— 7.5
— 6.2
+27.1
+29.6
+14.6
*
+31.6
+28.7
+77.7
+66.0
+60.4
*
Following a nonseasonal decline in February, new orders
accepted by Seventh district stove and furnace manufacturers
recorded greater expansion during March than in the same
month of other recent years, the volume of new business ris
ing 47 per cent over that of the preceding month. It was 4
per cent heavier than for last March, whereas February
orders had shown a decrease from the corresponding 1938
month. Shipments were 36 and production 27 per cent
larger in March than a month previous, and they were 9 and
34 per cent, respectively, above the volumes of a year ago.
Other Manufacturing
Furniture
EW orders booked during March by reporting furniture
manufacturers in the Seventh district increased only
2 per cent over the preceding month, whereas the 1929-38
March average shows a gain of 13 per cent. They were, how
ever, 15 per cent in excess of those booked in the month a
year ago and 4 per cent above the ten-year average. Ship
ments expanded 26 per cent in the current period, which is
considerably more than seasonally, totaled 13 per cent
greater than last March, and were 14 per cent above the
1929-38 average for the month. The accompanying chart
shows that they were the highest since the fall of 1937. As
shipments substantially exceeded the volume of incoming
business, unfilled orders on hand were reduced 16 per cent
between the end of February and March 31, but were 36
per cent heavier than at the close of March 1938. The rate
of production continued to rise in March, averaging 73 per
cent of capacity during the period, which represents an
increase of 4 points over the February rate and one of 17
points over a year ago.
N
FURNITURE
SHIPMENTS
The Automobile Industry
ARCH production of automobiles recorded consider
able expansion over February, as was expected, and
Mcontinued
to be much heavier than a year ago, so that total
first-quarter output of passenger cars and trucks in the
United States was almost 65 per cent greater than the volume
produced in the same period last year. Production of pas
senger cars totaled 299,703 in number this March, which
represents increases of 25 and 72 per cent over a month
and year earlier, respectively. Truck output numbered
72,237, or 25 and 51 per cent greater than in the preceding
period and for last March. In the first quarter of 1939,
there were 819,726 passenger cars and 189,207 trucks pro
duced in the nation, the former gaining 75 and the latter 27
per cent over the corresponding 1938 volumes. Indications
are that output in April will be at about the same weekly
rate as in March and will continue to be much heavier than
in the corresponding month last year.
Sharp gains took place during March over February and
a year ago in the distribution of automobiles in this district.
Sales of new cars at retail rose 130 per cent over a month
previous and exceeded those of last March by 35 per cent,
while the number of cars distributed at wholesale was greater
by 73 per cent and 129 per cent in the respective monthly
and yearly comparisons. Stocks of new cars in dealers’ hands
declined hy about 15 per cent between the end of February
and March 31 and numbered less than 10 per cent heavier
than on the same 1938 date. Used-car sales likewise expanded
considerably in March over February—by 75 per cent—
and were close to 10 per cent larger than for last March.
Although stocks of used cars increased 5 per cent in number
during the current period, they were 6 per cent smaller than
a year ago.
Page 2
'30 '32 '54 '35 '38
1936
1336
1339
Index of furniture shipments by reporting manufacturers in the Seventh district,
1923-1925 average =100. By years, 1929 through 1938; by months, January 1936
through March 1939.
Paper and Pulp
OLLOWING some decline in activity during February,
output of paper and pulp by Seventh district mills ad
vanced in March. Substantial gains over a month and year
previous were recorded in orders for paper in the district.
F
PAPER AND PULP INDUSTRY
SEVENTH DISTRICT
Paper:
New orders booked (tons).....................
New orders booked (dollars)................
Total shipments (tons)...........................
Total shipments (dollars)......................
Total production (tons)..........................
Stocks on hand at end of month (tons)
Pulp:
Pulp produced (tons)...............................
Stock on hand at end of month (tons).
March 1939
Per Cent Change
Feb.
Mar.
1938
1939
+31.6
+33.4
+31.8
+27.8
+10.9
+ 16.6
+ 9.2
+11.3
+16.3
+12.4
+ 6.1
— 5.6
+10.1
— 4.1
+ 3.6
—22.6
The Building Industry
ESIDENTIAL building contracts awarded increased as
sharply in March over February this year as is custo
Rmary
for the season; in contrast, other construction lagged
behind the usual expectation, mainly owing to a 2-million
dollar decline in awards for public works. Public financing
totaled less than in the preceding month; the decrease in
funds from this source amounted to iy2 million dollars for
public works and utilities and to about 2 million dollars for
residential and non-residential building. However, private
funds utilized for residential and non-residential activities
rose in the amount of 11 million dollars during the current
period.
BUILDING CONTRACTS AWARDED*
SEVENTH FEDERAL RESERVE DISTRICT
Period
March 1939.........................
Change from February 1939....................
Change from March 1938....................
First three months of 1939..........
Change from same period of 1938....................
Total
Contracts
Residential
Contracts
*44,054,000
+15.5%
+30.8%
8118,313,000
+69.2%
$18,093,000
+75.3%
+84.0%
*40,400,000
+123.7%
•Data furnished by F. W. Dodge Corporation.
Permits issued during March in 100 cities of the Seventh
district totaled 97 per cent larger in number and 41 per cent
greater in estimated cost of proposed construction than a
month earlier. The aggregate increase for 95 smaller cities
was sharper than that recorded for the five larger cities of
the area; the gain in this latter group was moderated by a
decrease in total estimated cost in Des Moines and Chicago.
For the district, the year-to-year comparison showed only a
slight expansion in number of contemplated projects but a
rise of 80 per cent in their total valuation, with the smaller
cities leading in the percentage of gain.
MILLIONS OF DOLLARS
CONSTRUCTION
I
CONTRACTS
AWARDED
SEVENTH DISTRICT*
QUARTERLY
CUD PUBLICLY FINANCED CONSTRUCTION
rasa PRIVATELY FINANCED CONSTRUCTION
------
Petroleum Refining
T^kAILY average runs of crude petroleum to stills in the
Indiana, Illinois, and Kentucky district advanced
slightly during March over February and averaged approxi
mately 18 per cent greater than in March 1938. Average
runs in the United States also rose in March but exceeded
the year-ago level by only about 4 per cent. In recent
months refining operations in this Midwestern area have
improved relatively much more than in the United States
as a whole; the crude runs in the Indiana, Illinois, and Ken
tucky area for the first quarter were about 11 per cent
heavier than in the 1938 period, while United States runs
only approximated the year-earlier average. Likewise, gaso
line production for January and February in this district
ran 10 per cent greater than in the 1938 months, whereas
that in the United States gained only 4 per cent. Consump
tion has been aided somewhat by the fact that retail gasoline
prices have weakened; recently, average quotations for
metropolitan Midwestern cities have been off more than 2
cents per gallon from last year.
Industrial Employment Conditions
TNDUSTRIAL employment and payrolls in the Seventh
A Federal Reserve district showed a further expansion from
February 15 to March 15, rising slightly more than has
been the average experience for the past ten years, though
not sufficiently so to make up entirely for the smaller than
seasonal improvement recorded a month earlier. The aggre
gate volume of industrial employment was about 7 per cent
greater and wage disbursements approximately 16 per cent
larger this March than in the 1938 month; in comparison
with the same period in 1937, however, current volumes were
smaller by 15 per cent in employment and 20 per cent in
wage payments. As was the case in the preceding month, all
of the States including the district, except Michigan, con
tributed to the March gains. Payrolls and employment in
the automobile industry continued to show a downward
trend; wood products registered a substantial decrease not
EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL
RESERVE DISTRICT
Week of March 15, 1939
Industrial Group
1939
i93a
*Data furnished by F. W. Dodge Corporation for the Chicago and Southern
Michigan territories which closely approximate the Seventh district area.
By quarter-yearly periods, 1937 through first quarter of 1939.
Demand for building materials recorded general expan
sion during March, the gain over February in both ship
ments and sales being of about seasonal proportions. Lumber
sales increased 20 per cent at wholesale and a little more
than that at retail, while total sales at retail yards rose
about 35 per cent. Cement shipments totaled almost twice
the volume of a month earlier, which gain was somewhat
more than customary for the season, and brick deliveries
also expanded slightly more than normally. Receipts of
lumber at Chicago and shipments from this area were about
17 per cent heavier in March than in February, an increase
which was equal to that in the March average for the preced
ing ten years. Building materials prices were firm during the
month and practically on a level with a year ago.
Report
ing
Firms
Wage
Earn
ers
No.
No.
Change from
February 15, 1939
Earn
ings
(000
Omitted)
$
Wage
Earn
ers
Earn
ings
%
%
Durable Goods:
Metals and Products1...........
Vehicles...................................
Stone, Clay, and Glass........
Wood Products......................
Total........................................
1,789
385
285
493
2,952
387,674
324,107
21,447
43,382
776,610
10,938
10,089
509
898
22,434
+1.5
—0.7
+5.9
—0.9
+0.5
+ 2.8
— 0.4
+11.1
— 3.4
+ 1.2
Textiles and Products...........
Food and Products...............
Chemical Products...............
Leather Products...................
Rubber Products...................
Paper and Printing................
Total........................................
398
1,038
305
174
35
748
2,698
67,492
97,528
32,285
32,489
18,366
75,000
323,160
1,319
2,522
1,018
654
492
2,171
8,176
+1.3
+0.5
-0.9
+1.9
+1.3
—1.3
+0.3
+
+
+
+
+
+
+
Total Mfg., 10 Groups..............
5,650
1,099,770
30,610
+0.5
+ 1.3
Merchandising* ........................
Public Utilities..........................
Coal Mining................................
Construction...............................
5,636
1,160
80
757
136,311
99,779
17,593
8,047
3,002
3,294
439
225
+2.8
—0.1
—0.9
+1-0
+ 1.5
— 0.5
—10.4
+ 3.8
Total Non-Mfg., 4 Groups.......
7,633
261,730
6,960
+1.4
— 0.2
13,283
1,361,500
37,570
iQther than Vehicles. Illinois, Indiana, and Wisconsin.
+0.6
+ 1.0
Non-Durable Goods:
Total, 14 Groups........................
4.2
1.4
1.5
0.0
1.6
0.2
1.4
Page 3
only in Michigan but in other States of the district as well,
offsetting in considerable degree the gains recorded by this
industrial group a month earlier. However, a further seasonal
expansion within the metals industries and the beginning
of customary activity in stone-clay-and-glass products, raised
the levels for durable goods as a whole above those of
February. Non-durable goods groups showed some advance
in wage payments during the current period but two of
them—chemicals and paper and printing—registered a loss
in number of workers employed; aggregate percentage in
creases were practically the same as for durable goods. For
non-manufacturing industries, there was an expansion in
employment and a slight decrease in payrolls. Increased
activity in construction and merchandising more than offset
a decline in employment in coal mining and public utilities;
so far as wage payments are concerned, losses in the two
last-mentioned industries were nearly offset by gains in mer
chandising and construction.
quarter by 6 per cent. Stocks on hand at the end of March
totaled 6 per cent heavier than on February 28 and were
2 per cent larger than at the same time last year.
Merchandising
1936
1937
1938
1839
Index of sales of shoes at retail by dealers and department stores in the Seventh
district, 1936 monthly average = 100. By months, January 1936 through March 1939
RETAIL
SHOE
SALES
Retail Trade
About a seasonal increase over the preceding month was
ARTLY because of the earlier date of Easter this year,
Seventh district department store trade showed a much recorded during March in sales of furniture and housefurgreater than usual rise in March over the preceding monthnishings by dealers and department stores. The dollar volume
and exceeded that of the corresponding 1938 month. Aggre sold at retail by reporting firms showed a gain of 9 per
gate sales of reporting stores expanded 38 per cent in the cent over February and one of 3 per cent over March a year
current period over February, as against a rise of only 22 per ago, the increase over a month earlier comparing with one
cent in the 1929-38 March average, the increase being greater of 7 per cent in the 1929-38 March average and that over
than in any of those ten years. As compared with last March, last March being in contrast to a fractional decline in the
sales totaled 6l/2 per cent heavier in the month this year. The yearly comparison for February. Although inventories were
latter gain brought sales for the first quarter to 2 per cent 5 per cent heavier on March 31 than a month previous, they
above the same 1938 quarter. In the two weeks ending totaled 3 per cent lighter than on the same 1938 date.
*
*
*
April 15, sales were 2 per cent larger than in the corre
March sales of independent retail stores reporting to the
sponding two weeks last year. At the end of March inventories
were 5 per cent heavier than a month previous but totaled United States Department of Commerce exceeded those of a
6 per cent lighter than a year ago. Stock turnover in the year ago by 5 per cent in the State of Illinois, 12 per cent
first quarter of 1939 was 1.05 times, whereas in the period in Indiana, 41/2 per cent in Iowa, and by only one per cent
in Wisconsin. Gains over February this year aggregated 39
last year it was only .95 times.
per cent for Illinois, 36l/2 per cent for Indiana, 25 per cent
DEPARTMENT STORE TRADE IN MARCH 1939
for Iowa, and 34 per cent for Wisconsin. Among the major
groups included in these independent stores are food stores,
Per Cent
Ratio of March
Change
Per Cent Change
Collections to
general stores, department stores, apparel stores, motor
First Three
March 1939
Accounts
Locality
vehicle dealers, furniture and appliance stores, lumber and
Months 1939
from
Outstanding
from Same
March 1938
End of February
building materials dealers, hardware stores, and drug stores.
Period 1938
P
Net Sales
Milwaukee................
Peoria........................
Other Cities*...........
+ 3.6
+16.4
- 0.2
+ 9.4
+ 4.5
— 1.2
+ 4.9
-9.5
—1.9
-6.9'
-0.7
—2.4
+ 6.6
-5.8
7th District.............
♦Include Fort Wayne and Peoria.
Net Sales
1+1++1+
Chicago.....................
Detroit......................
Fort Wayne..............
Stocks End
of Month
+1.7
1939
1938
44.9
45.2
42.0
38.7
38.6
37.9
38.4
37.1
36. i
32.5
42.2
38.8
Sales of shoes at retail by reporting dealers and depart
ment stores rose 83 per cent during March over February,
the increase comparing with one of 52 per cent in the 1929
38 average for the period. Furthermore, the dollar volume
sold totaled 12 per cent greater than in March last year,
whereas in the yearly comparison for February a small
decline had been shown. Sales by dealers recorded a notice
ably larger percentage increase over last March than did
those of department stores. In the first quarter of this year
retail shoe sales exceeded the volume sold in the same 1938
Page 4
Wholesale Trade
S IS usual in March, wholesale trade volumes in the
L Seventh district rose markedly in the month this year
Aover
February, sales of groups reporting to the United
States Department of Commerce totaling 16 per cent larger
in the comparison. Increases in the various groups amounted
to 36 per cent in hardware, 19 per cent in electrical goods,
WHOLESALE TRADE IN MARCH 1939*
Per Cent Change from Same Month Last Year
Commodity
Groceries and Foods—
Drugs & Drug Sundries.
Electrical Goods............
Miscellaneous..................
♦Data furnished by
merce.
Net Sales
Stocks
Accounts
Outstanding
Collections
+ 2.2
— 0.8
— 5.3
— 0.5
— 4.4
— 3.1
— 6.3
+ 17
+11.2
+ 0.3
+12.5
— 4.6
+ 7.8
— 0.8
+19.8
+19.7
— 7.0
+ 6.6
+ 2.8
— 0.4
+ 6.1
+ 4.4
+ 3.3
+ 5.4
+ 6.7
+24.8
—10.2
+ 9.7
Bureau of the Census, United States Department of Com
16 per cent in paper and its products, 14 per cent in gro
ceries, 12 per cent each in drugs and tobacco, and to 13 per
cent in the total for miscellaneous groups. It will be noted
in the table that with the exception of groceries, sales ex
ceeded those of last March, the aggregate for all groups
being 6 per cent larger in the comparison. Total stocks on
March 31 were fractionally lower than a month previous
and 6 per cent smaller than a year ago on the date.
Agricultural Products
ment loans progressed rapidly. Exports continued low and
sharply under 1938 levels; sales of the grain for export were
similarly disappointing until the latter part of the month.
Cash corn prices held steady over most of March and ruled
firmer during the first three weeks of April. April 1 stocks
of corn on farms in the United States were estimated at
1,204 million bushels; these stocks were the highest on
record for the date and over 60 per cent above average April
1 holdings for the period 1928-37. The Department of Agri
culture points out that over 20 per cent of total farm stocks
in the corn belt States are currently covered by Government
loans. It may be added that in the five States which include
the Seventh Federal Reserve district the Government has
advanced funds covering about one fourth of all farm
corn; in the State of Iowa more than one third of total
stocks are represented in the Government loan. Disappear
ance of farm com since January 1 was better than average
but less than in 1938.
The March oats movement also expanded over February;
oats prices displayed an independent steadiness and ruled
strong in the first three weeks of April. Stocks of oats on
farms and in visible positions as of April 1 indicated a good
consumption during the preceding quarter and were 5 per
cent lower than last year.
ON THE basis of April 1 condition, the United States
^ Department of Agriculture forecasts that the 1939
crop of winter wheat in the five States including the Seventh
Federal Reserve district will aggregate only 82 million
bushels. That the expectation is 20 million bushels short of
the 1938 harvest and 2 million bushels under the 1928-37
average is due almost entirely to acreage reduction in con
formance with AAA allotments; losses from winter killing
were less than usual and, while growth was somewhat be
hind normal schedule with the best only 6 to 8 inches,
condition on April 18 ranged from fair to good. Hay, pas
tures, and rye also came through the winter in better than
average condition. Most vegetation remained relatively dor
mant, however, through mid-April. Moreover, plowing and
INTERIOR PRIMARY MARKETS IN THE
other farm work were behind normal schedule, as a conse MOVEMENT OP GRAIN ATUNITED
STATES
(In thousands of bushels)
quence of damp soil and the continuance of subnormal
Mar.
temperatures. Though nearing completion in southern coun
Mar.
Feb.
Mar.
1929-38
Wheat:
1939
1939
1938
Avg.
ties, oats seeding was just beginning in the north; also, cold
Receipts__
13,755
9,365
10,388
14,230
Shipments..
weather retarded germination. Government reports indicate
11,081
9,148
10,655
10,793
Corn:
that the number of cattle on feed in the five States of the ^Receipts__
12,939
10,731
23,516
15,397
Shipments..
8,658
5,129
Seventh district was greater on April 1 than a year ago and Oats:
13,330
9,109
Receipts__
that the gain in the corn belt amounted to 13 per cent.
5,710
4,263
4,643
5,622
Shipments..
6,402
3,838
6,345
6.592
Estimates by the United States Department of Agriculture
point to a 549-million bushel crop of winter wheat in the
Meat Packing
United States as against 687 million bushels in 1938 and
r
11
HE
production
of
packing-house commodities
________ „„ in „„„
the
560 million bushels in the 1928-37 average.
-■- United States rose rather sharply in March over Febru
ary and, for the first time in 1939, was above the corre
Grain Marketing
Wheat
sponding month of a year ago and of the 1929-38 average.
AFTER running at generally low levels for several months, Moreover, the tonnage sold remained in excess of current
the movement of wheat at interior primary markets in production and there was a close to seasonal decline in in
the United States accelerated sharply during March; both ventories. Stocks of lard expanded further, however, and
receipts and shipments of the grain were the highest for the continued greater than a year earlier. Reflecting the price
month since 1931. Exports of wheat were maintained in decline from February in most pork products, veal, and
fair volume and by April 1 the Government’s goal of 100 mutton, and notwithstanding some advance in quotations of
million bushels to be sold for export during the 1938-39 cured hams, smoked picnics, and most beef, the general
marketing season was reached. There was a softening in price level of packing-house commodities was lower in March
wheat prices when winter wheat crop prospects improved than during the preceding period. Dollar sales billed to
in March; but quotations firmed during the first three weeks domestic and foreign customers totaled about the same as
of April, coincident with a strong domestic milling demand
LIVESTOCK SLAUGHTER
and the improvement in export sales. On April 22 prices of
(In thousands)
No. 2 hard winter wheat in cash positions at Chicago ranged
Lambs and
Yards in Seventh District,
Cattle
Hogs
Sheep
Calves
from 3.721/g to $.73%, or about 2 cents higher than at the
March 1939............................................................
191
501
300
92
close of March. Stocks of wheat on farms plus those in Federally Inspected Slaughter,
United States:
visible positions totaled 264 million bushels on April 1;
March 1939........................................................
774
3,229
1,473
478
February 1939...................................................
653
2,890
1,361
385
they were 52 per cent greater than a year earlier and 15
March 1938.........................................................
809
2,610
1,428
506
March 1929-1938 average................................
699
3,128
1,326
per cent larger than in the 1928-37 average, but reflected
462
better than an average disappearance since the turn of
AVERAGE PRICES OF LIVESTOCK
the year.
(Per hundred pounds at Chicago)
Corn and Oats
TAURING March the marketing of corn remained rela7^ tively light, although it was considerably higher than
in February; the sealing of corn on farms under Govern
Week Ended
Months (
Apr. 22
Mar.
Feb.
1939
1939
1939
Native Beef Steers (average).............. ............... $10.15
$10.40
$10.30
Fat Cows and Heifers...........................
8.30
8.20
Calves...............................................
9.75
10.75
Hogs (bulk of sales)............................... ...............
6.95
7.45
7.80
Lambs...................................................
9.25
9.00
Mar.
1938
$ 8.45
7.10
8.50
9.15
8.80
Page 5
in February. Payrolls at the close of March reflected little
change in number of employes but an increase of 2 per
cent in hours and 3 per cent in wage payments as compared
with February; also, each item gained 21/2 per cent over a
year ago. In the first half of April, production continued
in excess of the corresponding 1938 period.
MEAT PACKING—UNITED STATES
Per Cent Change
in March 1939
from
February
March
March
1939
1938 1929-38 Avg.
Tonnage produced....................................................... +J5'*4
j" J-J
t
Tonnage Bold................................................................ +«-•
+
t {■
MONTHLY BUSINESS INDEXES
Data refer to Seventh district and are not
adjusted for seasonal variation unless other Mar.
1939
wise indicated.
1923-25 average = 100
Manufacturing Industries:
Pig Iron Production:
Automobile Production—(U.S.):
Casting Foundries Shipments:
Mar. Feb.
1938 1938
Jan.
1938
Feb.
1939
Jan.
1939
83
81
83
80
82
79
77
68
78
68
79
68
85
76
75
51
47
49
53
143
33
25
38
46
102
192
82
154
96
157
59
127
48
125
41
32
61
79
39
31
47
63
38
33
47
60
42
34
37
45
30
22
36
43
Foreign Trade
Stoves and Furnaces:
60
83
120
70
96
130
ARCH shipments of animal products for export de Furniture Manufacturing:
66
53
56
80
63
64
creased from those of February, owing in considerable
37
52
68
45
60
76
degree to a reduction in lard forwardings to the United
Building Contracts Awarded:
13
15
34
41
35
62
28
25
Kingdom. Moreover, there was some hesitancy on the part
49
53
56
64
of buyers in making commitments for prompt and future Meat Packing— (U.S.):
106
80
81
101
78
89
76
85
90
79
91
delivery because of the unsettlement in exchange. British
89
84
83
89
85
85
trade in United States lard already landed was fair and Creamery Butter Output:
78
76
87
81
77
92
that in hams quite active. Demand from the European con
101
100
110
100
100
105
tinent remained very moderate during the entire period. Department Store Net Sales:
69
67
86
66
64
89
74
71
87
74
74
Cuban and Porto Rican trade was practically the same as in
102
84
75
97
85
75
105
February; however, some lessening in demand from the
74
71
95
74
68
97
62
62
79
64
63
83
last-mentioned area took place during the closing week of
70
68
86
69
67
92
88
85
95
86
84
98
the month. Prices of United States lard and most meats in
Adjusted........................
the United Kingdom ruled below Chicago parity; on the
other hand, Easter demand kept ham quotations equal to Credit and Finance
or slightly above the United States basis.
_
Member Bank Reserves
The importation of packing-house products into the United
States expanded further during March.
ESERVES carried by member banks at the Federal Re• serve Bank of Chicago rose 158 million dollars be
Dairy Products
tween March 15 and April 19 to the highest level of the
RODUCTION of creamery butter in the Seventh Federal
Reserve district advanced 20 per cent, or more than current year. The increase can be attributed largely to
seasonally, during March over a month earlier and totaledTreasury operations, as Government redemptions since March
6 per cent in excess of March 1938, while sales by district 15 in the Seventh district aggregated 240 millions. This
creameries rose only 6 per cent over February and were amount included about 230 millions of Treasury bills held
4 per cent under last year. The butter make in the United over the Illinois April 1 personal property tax assessment
States expanded more than is usual for March and was date, which subsequently matured and were redeemed. Rou
tine governmental expenditures approximating 63 millions
about 10 per cent heavier than a year ago—as a conse likewise added to reserves. Sale of Treasury bills totaling
quence of exceptionally heavy milk production in the
country as a whole. The Department of Agriculture reported $83 million and income tax collections aggregating $58
milk production as of April 1 to be the highest on record million were factors effecting a reduction in reserve bal
for the date from the standpoint of total production, produc ances, as well as an 8-million dollar increase in currency
tion per cow, and production per unit of population. Cold- circulation for the period, due to a sharp seasonal rise in
storage supplies of butter in the nation declined more than the week preceding Easter. While total balances of Federal
seasonally in March, but remained relatively heavy; about Reserve members were rising 158 millions, estimated excess
92 per cent of the total stocks on April 1 were held by reserves in the Seventh district increased by about the same
Government agencies. Butter prices declined sharply after amount to a level of approximately 510 millions.
the withdrawal of Government support on March 8; subse
Interest Rates
quently, the market made a brief show of recovery in the
HE
average
rate
earned on total loans and discounts by
third week of the month, but softened again in late March
banks
in
Chicago and Detroit showed practi
selected
and the first three weeks of April.
_
_
cally
no
change
during
March from February; this average
American cheese production in Wisconsin during March
totaled 29 per cent greater than in February but was 4 for banks in Chicago had previously recorded four succes
_
per cent under the 1938 month; sales of the commodity sive month-to-month declines.
A study of interest rates charged by the larger banks in
from primary markets in the State aggregated 3 per cent
above the preceding month and 5 per cent heavier than in the two cities has recently been completed. The data cover
March 1938. United States stocks of cheese declined more commercial and industrial loans, into which classification
than seasonally on April 1 from a month previous. Prices fall over one half of the total loans of these banks, made in
of the commodity weakened, in sympathy with the butter the period from March 16-31, inclusive. Analysis shows
market, during the middle of March; following later firm that a small fraction of the total number of such loans,
made at rates between ll/2 and 2 per cent, accounted for
ness, they again softened in April.
M
R
P
T
Pag* 6
about two fifths of the total volume, this concentration being
more marked in Detroit than in Chicago. When a somewhat
similar study was made last fall, this same concentration
existed but was heavier in Chicago than in Detroit. Most
borrowers of commercial and industrial funds were ac
commodated at rates of 5 and 6 per cent. Only a few scattered
loans in Chicago had maturities of over one year.
Open Market Paper
T> ANKERS’ acceptances made during March in the
Seventh district were noticeably greater than in Feb
ruary, and commercial paper dealers in this area also re
ported a sharp sales increase over the period. However,
preliminary reports indicate a reduced sales volume in the
latter type of paper during the first half of April. Total
liability for outstanding acceptances continued to decline
during March, in accordance with the trend prevailing over
the past few years ; commercial paper outstandings on March
31 remained practically unchanged from the end of February.
Securities Markets
O RICES of all grades of corporate bonds, particularly
lh°se °f medium- and lower-grade obligations, declined
through mid-April from the high levels reached early in
March; rails showed much more pronounced weakness than
did either utilities or industrials. High grades stood up
reasonably well in face of marked deterioration in the price
of stocks.and the more speculative bonds, the latter two
classifications continuing to be depressed by European
political developments. Another noteworthy consideration is
the fact that lower-grade bonds have not declined as notice
ably in relation to the stock market as was the case in the
spring of 1938 when somewhat similar conditions obtained
abroad. Total new issues of long-term corporate bonds in
March were not so large as in the preceding month, but the
portion representing new capital was the greatest since last
October. Moreover, the percentage of the national total or
iginating in the Seventh district was higher than has been
the case for the past few months. Municipals were offered
in heavier volume during March than a month earlier. New
issues of both corporates and municipals were well received,
with institutional buyers continuing to absorb the bulk of
such offerings. Chicago bond dealers report business with
banks, especially those outside the largest cities, as being
seasonally restricted; individual investors, except for a
few scattered bargain hunters, have been almost completely
out of the market since the outbreak of the latest European
crisis.
. Prices of Treasury bonds have continued extremely firm
in the face of external developments. Largely because of
cessation in special demands after April 1, yields on the
three most recent $100,000,000 weekly issues of Treasury
bills averaged higher than those which had prevailed over
the course of the past few months. Since March 15, nearly
one half of the redemptions of these obligations and only 17
per cent of the total sales have been in this district, with
the consequent effect of materially reducing the amount of
such outstandings in the area.
Chicago stock prices, for much the same reasons previ
ously mentioned in connection with the decline in lowergrade bond prices, have receded almost continuously from
the high point established early in March. The Chicago
Journal of Commerce average of 20 stocks fell to a new
1939 low of $38.19 on April 8 and stood at $40.29 on the
twenty-second of the month.
Selected Seventh District Banking Data
FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS
OF CONDITION
(Amounts in thousands)
Change from
April 19, March 15, April 20,
1939
1939
1938
$ 287,760
$+6,356
$+9,556
104
+29
-111
71
+1
+3
53,395
—2,201
—23,052
131,705
+6,280
+4,205
102,027
+2,248
+28,735
287,127
+6,327
+9,888
2,169,320
—5,429 +147,710
1,297,551 +158,415 +223,493
137,698 —162,275 —88,689
987,567
+6,350
+24,765
Total bills and securities................................
Bills discounted...............................................
Bills bought.....................................
U. S. Treasury bills........................................
U. S. Treasury notes...........................
TJ. S. Treasury bonds.....................................
Total Government securities...................'
Total reserves...................................................
Member bank reserve deposits...................!
All other deposits........................................
Federal Reserve notes in circulation...........
Ratio of total reserves to deposit and
Federal Reserve note liability combined
89.5%
—0.3*
+0.2*
*Number of Points.
CONDITION OF REPORTING MEMBER BANKS
SEVENTH DISTRICT
(Amounts in millions)
Assets
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...............................
U. S. Treasury bills..................................
U. S. Treasury notes................................................ .
U. S. Treasury bonds.................................
Obligations fully guaranteed by U. S. Government
Other securities........................................................
April 19
1939
$3,042
861
508
28
33
79
99
3
111
76
372
986
253
494
Change from
March 15 April 20
1939
1938
$—164
$+128
+ 3
—34
+13
—32
— 1
—13
— 7
+ 1
+ 2
— 1
0
+11
0
— 2
— 4
+ 2
—208)
+29
+ 1
-15
0
+79
+27
+82
Liabilities
Demand deposits—adjusted*...................................
Time deposits........................................................
Borrowings...............................................
2,285
899
0
+11
+ 3
0
+220
+26
0
a
•. ,7 ann ™ velocity of demand deposits (unadjusted) in the five weeks ended
April 19 was 22.95 times, as compared with 19.92 times in the preceding four weeks
ana with 22.32 times in the corresponding period of 1938.
BANK DEBITS, SEVENTH DISTRICT
(Amounts in millions)
March
1939
Chicago...................
Des Moines.............
Detroit.......................
Fort Wayne............
Grand Rapids.......
Indianapolis.....................
Milwaukee...................
Peoria................
South Bend............
Per Cent of Increase
or Decrease from
February
March
1939
1938
+39.5
+ 4.4
+14.5
+17.1
+18.2
— 2.8
+12.0
+ 7.4
+30.5
+ 6.9
32 smaller cities...................
Total 41 cities...............
*
*
*
TRANSIT OPERATIONS OP THE FEDERAL RESERVE BANE
OF CHICAGO AND DETROIT BRANCH
(Exclusive of Treasury checks and of non-transit items drawn on own bank)
Total country and city check clearings:
Pieces..........................
Amount.................
Daily average clearings:
Total items cleared—
Pieces..........................
Amount.................
Items drawn on Chicago—
Pieces...................
Amount.............
Items drawn on Detroit—
Pieces..........................
Amount.................
March 1939
March 1938
69,411
$7,339,254
Page 7
National Summary of Business Conditions
(By the Board of Governors of the Federal Reserve System)
TN APRIL manufacturing production was maintained at about the same rate asm
1 March but mineral production declined, reflecting a sharp reduction in output
of bituminous coal pending settlement of negotiations between operators and miners
In the first quarter of this year industrial output, after a rapid rise in the latter h
of 1938, increased less than is usual at this season.
— MANUFACTURES
Production
VOLUME of industrial production showed little change in Man* ,000,095
V
Index ol physical volume of production, adjimted for
seasonal variation, 1923-1925 average = 100. Durable ana
nondurable series expressed int*™ <* {”&!?<, ,n th6 tota'
index. By months, January 1934 to March 1939.
WHOLESALE PRICES
PERCENT
-------------- ----- --------------- ---- -------------------- --------
110 P
PERCENT
110
T
1934
1935
1936
1937
1938
Board’s
remained
at 99,
98 compared
per cent °f
‘H101
n192f'19?3
average
Theseasonally
index foradjusted
the firstindex
quarter
averaged
with
in the
final quarter of last year. Activity at steel mills in March was at 54 per cent of
capacity a slightly higher level than in January and February. Automobile producrion increased6 less than seasonally: retail sales of cars continuedI to fluctuate
around a level considerably higher than last year but lower than in 1936 and 1937.
Dealers’ stocks of new cars began to decline in March, following a” increase to a
seasonally high level. Activity in the machinery industries increased further
March, continuing the rise that began last summer. Lumber production increased
less than seasonally from the relatively low level of other recent months.
Production of nondurable goods in March continued at about the level that
has prevailed since last autumn. In the woolen textile industry activity showed a
decrease from the high level of recent months, while at cotton mills and shoe fac
tories output was maintained in large volume. At meat-packing establishments and
sugar refineries increases in activity were reported, following earlier declines.
Value of construction contract awards increased in March, according to F. W.
Dodge Corporation figures, reflecting a seasonal rise in residential and other private
building. Awards for public projects showed little change.
In the first three weeks of April bituminous coal production declined to a low
level as most mines were closed, pending the settlement of biennial contract nego
tiations between mine operators and workers. Steel ingot production w*s re^ed
somewhat, averaging about 52 per cent of capacity and automobile production
showed little change from the rate reached in the latter part of March.
1939
Distribution
Indexes compiled by the United States Bureau of Labor
StatSTl92» = 100. By weeks, 1934 to week ending
S
MEMBER BANKS IN 101 LEADING CITIES
BILLIONS OF DOLLARS
ALES at department stores and mail order houses increased somewhat more
than seasonally in March, while variety store sales showed about the usual rise.
For the first quarter as a whole retail sales were in about the same volume as in
the final quarter of 1938, after allowance for seasonal changes.
Freight-car loadings showed less than the customary advance from February to
March as loadings of coal declined and shipments of miscellaneous freight increased
less than seasonally. In the first half of April there was a marked decrease in freight
traffic, reflecting in large part a sharp decline in coal shipments.
_____________________________BILLIONS OF DOLLARS
U.S.G0VT OBLIGATIONS
SN0 GUARANTEED )
Commodity Prices
COMMERCIAL LOANS
RICES of steel scrap, copper, hides, and some other industrial raw materials
P
declined from the middle of March to the third week of April, and there were
decreases also in prices of livestock and dairy products. Silk prices rose consider
OTHER SECURITIES
LOANS TO BROKERS
AND DEALERS
1936
1937
1938
1939
Wednesday figures for reporting member banks in 101
leading cities, September 5, 1934, to April 19, 1939. Com
mercial loans, which include industrial and agricultural lewis,
represent prior to May 19, 1937, so-called Other loans as
then reported.
EXCESS RESERVES OF MEMBER BANKS
. ,
BILLIONS OP DOLLARS
BILLIONS OP DOLLARS
------------------- ------
5
ably The general level of wholesale prices, as measured by the index of the Bureau
of Labor Statistics, declined to 76 per cent of the 1926 average as compared with
77 in the middle of March and at the beginning of the year.
Bank Credit
EFLECTING continued heavy gold imports and Treasury disbursements from
its balances at the Reserve banks, member bank reserves and deposits increased
sharply during the four weeks ending April 19. Excess reserves rose to a record high
level of $4,000,000,000. Total loans and investments at banks m 101 leading cities,
which had shown little change during March, increased
J* TWdStates
three weeks of April, reflecting principally continued purchases of United states
Government obligations by New York City banks. Loans to brokers and dealers in
securities declined.
R
OUTSIDE
N. Y CITY
Money Rates
P
NEW YORK
1934
1935
1936
1937
1936
1939
Wednesday figures of estimated excess reserves for all
member banks and for selected New York City banks, Janu
ary 3, 1934, to April 19, 1939.
Page 8
and
Security Prices
RICES of Government bonds and of other bonds of highest grades continued
firm at high levels during March and the first three weeks of April, whdepnees
of the lower-grade corporate bonds and of corporate stocks declined. The average
discountTatego„ new issues of 91-day Treasury bills continued at a low level and
other open-market rates remained unchanged.
DIRECTORS AND OFFICERS
Federal Reserve Bank of Chicago
W. J. Cummings
E. R. Estberg.
F. D. Williams
DIRECTORS
R. E. Wood, Chicago, 111,................................ Deputy Chairman
---- Chicago, 111.
C. B. Van Dusen................................ Detroit, Mich.
Waukesha, Wis.
M. W. Babb.......................................Milwaukee, Wis.
Iowa City, Iowa
F. J. Lewis................................................ Chicago, 111.
N. H. Noyes...................................... ....................... Indianapolis, Ind.
MEMBER OF FEDERAL ADVISORY COUNCIL
E. E. Brown..........................................................................Chicago, 111.
OFFICERS
G. J. Schaller..................................................................... President
H. P. Preston..............................................First Vice President
J. H. Dillard......................................................................... VicePresident
W. H. Snyder. .................................. Vice President and Cashier
C. S. Young.............. .. ............................................ Vice President
C. B. Dunn.........................................................................GeneralCounsel
W. C. Bachman............ Assistant Vice President
0, J. NetterstrOm. .. .Assistant Vice President
A. L. Olson.................... Assistant Vice President
A. T. Sihler..................Assistant Vice President
A. M. Black. . .Manager, Planning Department
J. L. Sweet...................................................................
Manager, Research and Statistics Department
J. J. Endres.............................................. Auditor
J. C. Callahan. .
N. B. Dawes..........
F. A. Lindsten. ..
L. G. Meyer..........
F. L. Purrington .
J. G. Roberts___
C. M. Saltnes. ..
P. C. Hodge___
. Assistant Cashier
. Assistant Cashier
. Assistant Cashier
, Assistant Cashier
.Assistant Cashier
. Assistant Cashier
.Assistant Cashier
Assistant Counsel
INDUSTRIAL ADVISORY COMMITTEE
Max Epstein, Chicago, 111............................................ Chairman
W. Harnischfeger........................ Milwaukee, Wis.
G. B. Moxley................................ Indianapolis, Ind.
R. R. Monroe......................................... Chicago, III.
G. W. Young............................................ Chicago, 111.
DETROIT BRANCH
DIRECTORS
A. C. Marshall............................ Detroit, Mich.
J. E. Davidson.............................Bay City, Mich.
H. L. Pierson................................ Detroit, Mich.
J. M. Dodge.....................................Detroit, Mich.
L. W. Watkins....................... Manchester, Mich.
W. S. McLucas............................... Detroit, Mich.
R. H. Buss............................................................. Detroit, Mich.
OFFICERS
R. H. Buss...................................................... Managing Director
H. J. Chalfont................................................ Cashier
H. L. Diehl..................................... Assistant Cashier
SEVENTH FEDERAL
OWA
RESERVE DISTRICT
@FedFRASER