The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
v l o n November, 1953 U i l y m Volume XXXV m Number 11 The Money Market and District Banking MONEY MARKET CONDITIONS influence district bank reserve positions and lending policies. By illustration, during the first nine-and-a-half months of 1953, there were important shifts in the money market and parallel shifts in district bank reserve positions. From December to mid-May, working balances of district banks were below normal and bor rowings were high. But by mid-July their reserve positions had eased, reflecting a net inflow of funds and a reduction in reserve requirements. Then, following moderate drains from routine factors, reserve positions eased again after mid-September, largely because of an inflow of funds from other areas. Reserve positions, influenced by market conditions, helped shape district bank policies which contributed to business stability and growth. Feder Bank St. L o u is M o n ey m a rk et c o n d itio n s in flu e n c e d is tr ict bank r e s e r v e p o s itio n s . . . T ^ H E R E IS A C O N T IN U A L F L O W of checks A and other items between the 14,000 commercial banks of the country as banks and their customers conduct their business. In both number of items and in dollar volume the flow is tremendous. Each month the average bank cashes more checks, in dol lar amount, than it has total deposits. These outpay ments are, of course, offset by an inflow of funds of approximately the same amount. So that, while turn ing over at a rapid rate, the level of a bank’s deposits at the close of business one day is surprisingly little changed from the level on the preceding or on the following day, except in unusual circumstances. And for groups of banks, such as all member banks in the Eighth Federal Reserve District, the percentage variation one day as against the next is even smaller. Not all checks cashed result in an outflow of pay ments to other banks, as the charge to one cus tomer’s account may be matched by a credit to an other customer’s account in the same bank. Never theless, large sums move between banks. The move ment of bank money in and out of the Eighth Dis trict by way of the Interdistrict Settlement Fund each year amounts to several times the resources of all district member banks. Although these flows are influenced by numerous factors, they fall into a rough pattern. Normally rural areas lose funds on balance, year in and year out, to a local financial center. This local financial center, in turn, is drained of funds by the money market centers. Completing the circle, the money market banks have an “unfavorable” balance of transactions with certain rural area banks. Thus, there is a circular geographic pattern of movement and the inflows of funds and the outflows of funds are roughly in balance at each stage. One example of this circular pattern is the persistent movement of checks, on balance, from banks in western Ten nessee, northern Mississippi, and eastern Arkansas to St. Louis; from St. Louis to New Y o rk ; and from New York back to banks in the Memphis re gion. This circular movement of funds from area to area is a movement of “ net” balances— the net of much larger gross flows in both directions between any two points. For instance, there is a persistent net flow of funds from the Memphis region to banks in the St. Louis zone, but so far in 1953 this net flow ($129 million) amounted to only 12 per cent of total transactions between the two regions in the Inter1 In turn, these Settlement Fund transactions are in m any cases net balances o f larger gross transactions. C f., Bank Reserves and the Flow o f Funds, M o n t h l y R e v ie w , N ovem ber, 1952. Page 158 district Settlement Fund.1 Likewise, the Eighth District continuously loses funds to the New York district, but during the first three quarters of 1953 the net flow ($517 million) was only 3 per cent of total transactions in the Fund between the two dis tricts. Although these “ net” flows are small per centagewise, they are significant. Superimposed on this circular movement of bank money from place to place are other recognizable patterns. For instance, the Eighth District banks tend to pick up funds through these flows in the fall but to lose more funds to other areas than they get in return during the spring. This seasonal pattern reflects the high relative importance of agriculture in the district, including both farmers and businesses that process and distribute agricultural products. Then too, banks in some areas (such as those in the Louisville zone) persistently gain funds, on balance, from other areas, at least for many years at a time. These continuous inflows appear to reflect growth factors, such as net investment in the area by outsiders, or operations of the Treasury con ducted so as to cause a drain in its account with an offsetting inflow of funds in private accounts. In addition to seasonal and growth factors, this circular movement of money is subject to numerous irregular influences. A s business activity expands, the volume of checks usually increases, many times influencing the net flow of funds between areas. Over time, as the patterns of doing business change, the direction and size of net flows change. Strikes, weather, and many other factors can temporarily dis rupt this stream of checks. Two important, and largely irregular, influences on the circular flow of payments are market factors and System actions. Money market factors (such as currency and gold movements or Treasury opera tions) and System actions affect the flow of money and add to or subtract from bank reserves or other cash balances. By absorbing or contributing funds, they influence the flow of funds directly. They also affect the flow indirectly. For when these factors persistently absorb a part of one bank’s reserve funds, the bank tends to become more conservative in its credit policy. In other words, it is apt to be more selective in its new loans or investments or it may even sell securities. These actions tend to cause the outflow of funds from this bank, in turn, to de cline relative to the inflow. And pressure is thereby passed to other banks, which, likewise, in their turn, may be forced to become more conservative. In this manner, the tightness of bank reserve positions in one area caused by money market factors or System actions is usually transmitted to and influ ences all banks. Largely through changes in the inter-district movement of funds . An addition of funds to a bank's reserves by these market, or “ routine/’ factors or by System actions works in just the opposite direction. A bank per sistently receiving additional reserve funds usually becomes more lenient in its lending or investing poli cies. Thus, the outflow of funds from this bank tends to grow relative to the inflow. Other banks, in turn, tend to gain funds and become more lenient in their lending and investing and so the effect fans out to most banks in the nation. Since the net flow of funds between two areas is only the small difference between total inflows and total outflows, a seemingly insignificant change in total flows becomes a substantial change in the net. For example, if through a tightening of the money market (resulting from, say, an outflow of gold) one per cent of the total flows between the St. Louis district and the New York district is affected, it is estimated that the net outflow from St. Louis to the money market center would double. Some money market factors influence the stream of monetary payments at virtually every point. Every commercial bank in the nation pays out cur rency on demand to its customers and every com mercial bank accepts currency for deposit. Thus the net movement of currency in and out of banks (a routine market factor) may affect the circular movement of funds at all stages. Many Treasury operations (such as taxing, spending, and sales and redemptions of securities) are also conducted in all regions of the country. . . . the reserve positions of district banks . . . . . . parallel those for all banks .. In addition to these two money market factors, some Federal Reserve System operations directly affect the circular movement of funds at virtually all points. Federal Reserve “ float” (credit given on checks in advance of collection, usually classed as a routine market factor) usually adds to or reduces the reserves of a great many member banks. Re serve requirement changes, likewise, influence di rectly the amount of free funds held by each member bank. Also member banks in all areas may tem porarily add to their supply of reserves by borrow ing from their Federal Reserve Bank. These market and System actions, although de centralized, may not, usually do not, directly af fect the reserve positions of all banks proportion ately. The actions may be easing bank reserve posi tions in one area, but absorbing funds in another. Nevertheless, through the flow of payments the net impact of these factors tends to bear upon the re serve positions of all banks. In contrast to the above factors that directly affect banks in all areas, there are other influences on bank reserves that have their direct effect concen trated in the principal money markets. The major ones are: (1) monetary gold movements, (2) de posits of foreign governments or central banks in the Federal Reserve Banks, (3) a few Treasury operations, and (4) System open market purchases or sales. These factors, however, by constricting or enlarging the stream of payments at the money markets, tend to decrease or increase it at all points. • • • and lending policies. Whether or not a bank will expand its loans de pends on many factors, important among which are the supply of funds and the availability and cost of obtaining more.2 Money market conditions affect the supply, availability, and cost of funds. As pointed out, tightness or ease in the money market influences the supply of loanable funds at individual banks by altering the flow of payments between banks. In addition, money market condi tions can affect the cost and availability of funds to banks in many ways without initially and directly altering the flow. Since most banks make at least a part of their reserve position adjustments by buying or selling Treasury bills, tightness in the money market (by increasing yields on Treasury bills) di rectly increases the cost of obtaining more reserves. Tightness or ease in the market can also influence the cost and availability of additional reserves for district banks through changes in attitudes concern ing, and cost of obtaining, interbank loans. * Som e o f the other principal factors a re: ( 1 ) the extent o f creditworthy denvmd, (2 ) liquidity position o f the bank, (3 ) local bank policies, (4 ) diversification o f the loan p ortfolio, (5 ) business prospects, ( 6 ) expe rience o f lending officers, and ( 7 ) earnings considerations. Page 160 By illustration, during the first nine-and*a-half months of 1953 there were important shifts in the money market . . . From the end of December through mid-May the money market was tight. Total borrowings of banks were at near-peak levels and working balances were relatively low. Interest rates, both short and long term, were working up. The situation reflected: (1) the tightness of funds as the year began, (2) the strong demand for credit, (3) a gold outflow, (4) System sales of securities early in the year, and 5) an increase in the discount rate. Partial offsets were provided by a seasonal currency movement into banks and a continued high level of individual saving. From the middle of May to the middle of July, the money market went through a transition from tightness to ease. Although bank reserve positions began improving around mid-May, the market was still tight until early June. Interest rates on most issues rose to a peak around the first week in June, but drifted lower thereafter. Early in the period banks gained funds from Treasury opera tions. System open market purchases added about $1.2 billion over the two months and a lowering of reserve requirements freed a like amount in early July. The easing in those two months was also partly brought about by a slackening in credit de mand, especially in the capital market, reflecting both the higher interest rates and more conservative policies by financial institutions. From mid-July to just after Labor Day, there was a digestion of funds by the market. Banks expanded credit substantially (largely by purchasing Treasury tax-anticipation Certificates) and met a seasonal currency outflow together with a drain from an ex port of gold. Late in the period, net System pur chases provided a partial offset to these losses. M em ber bank borrowings from the Reserve Banks rose somewhat in the period, but were still low com pared with early 1953. Most interest rates remained fairly steady. In the week after Labor Day, the market eased substantially and remained easy through October 14. A t first the additional supply of funds reflected a return flow of currency after Labor Day and an unusually high mid-month expansion in float; sub sequently there were sizable System purchases in the open market. In addition there was a less-than- seasonal demand for bank credit. • . . and parallel shifts in district bank reserve positions• From December to mid-May, working balances of district banks were below nornud and borrowings were high. Thus far in 1953, shifts in the reserve position of district member banks as a whole have reflected the shifts in the money market. District bank reserves were in tight supply through mid-May. Three prin cipal direct causes w ere: (1) the fully invested posi tion of banks as the year commenced, (2) drains of funds as a consequence of Treasury operations, and (3) a net outflow of money to other areas of the country through commercial and financial transac tions. This tightness was relieved somewhat by a seasonal return flow of currency into banks and a contraction in bank credit. First, at the beginning of January, district bank reserve positions, reflecting the customary peaks in credit and currency demands, were under consid erable strain. Last December the pressure on bank reserve positions became unusually heavy. Daily av erage borrowing from the Federal Reserve Bank of St. Louis during the month amounted to $89 mil lion. By comparison average borrowings were $19 million in December of the previous year. Borrow ing from other banks was also sizable.3 In addition, district member banks had relatively low levels of working balances. Daily average excess reserves were $4 million less than in December a year earlier. Deposits in other banks on a daily average basis were $9 million lower in the month than in the corresponding period of 1951. Second, district banks were drained of $96 mil lion by Treasury operations during the first fourand-a-half months of the year. This was more than normal for the period and occurred despite a rela tively high level of direct Government expenditure in the district which tends to increase reserves. This drain reflected a large volume of income tax collec tions, cash subscriptions to the Treasury’s issue of 3% per cent long-term bonds, and increased sales of Savings Bonds in the district. Third, during the same four-and-a-half months banks lost, on balance, $17 million to banks in other districts through check clearings and wire transfers in the Interdistrict Settlement Fund (payments of $11,277 million and receipts of $11,260 million). These interdistrict movements of funds are the re sult of commercial and financial transactions of both banks and their customers. It was largely through this flow of checks and other cash items that pres sure on bank reserves in the district was equalized with pressure on reserve positions of other banks. • T he exact amount o f this indebtedness is not available, but an indi cation o f the trend can be obtained from averaging the interbank loans reported w eekly b y the larger (w eekly rep ortin g) banks. T h e average o f these loans during D ecem ber, 1952, was $28 m illion. In D ecem ber, 1951, the average was $3 m illion. The money market (as noted above) was tight from the end of December through mid-May, as System sales of securities and a movement of gold out of the country, on balance, directly absorbed re serves of money market banks. Reflecting this tightness, there was a $17 million net outflow of funds from district member banks through the In terdistrict Settlement Fund. Taking into consid eration all factors other than interdistrict flows and even allowing for the fact that district banks were drained of proportionately more funds through Treasury operations than banks in other sections, district bank reserve positions were somewhat easier than the reserve positions of other banks. Thus the $17 million net outflow through the inter bank flow of funds tended to balance the two situa tions, as individuals, businesses, and banks sought to put their funds to the most profitable use. The $17 million net movement of money from the Eighth District was the result of heavy drains to the money markets and gains of funds from other regions. Eighth District banks lost $168 million to the New York district. By comparison the drains to this center in the like period a year ago were greater, but in that period the money market, al though relatively easier, was tightening (compared with little change in the current year) and Treasury operations were adding funds to district banks rather than absorbing them. Largely as a result of the tightness in district bank reserve positions in early 1953 and a slight increase in the cost of obtaining additional reserves (as both the discount rate was increased and prices of se curities declined) credit in the district became less readily available. Lenders reportedly became more selective in making loans, terms became tighter, and commitments for future loans became more difficult to obtain. Furthermore, the increased cost of credit discouraged some potential borrowers. The rate on loans to “ prime” borrowers rose from 3.00 to 3.25 per cent. And, according to reports, the average rate on advances for financing real estate increased between a quarter and a half of one per cent. Most other rates were marked up a similar amount. But by mid-July their reserve positions had eased, reflecting a net inflow of funds and a reduction in reserve requirements. In the two months ended July 15, district member banks received a sizable amount of reserves. Thus the heavy pressure on their reserve positions was largely lifted. Banks received a substantial ($58 million) net inflow of funds from other districts through clearings resulting from commercial and financial transactions. In addition, reserve require ments for member banks were reduced, freeing an Page 161 Factors Affecting Eighth District Member Bank Reserve Positions B y Selected Periods from D ecem ber 31, 1952, through Septem ber 30, 1953 Sign Indicates E ffect on R eserve Positions (Millions of Dollars) Currency movements................................ Treasury operations......... - ...................... . Interdistrict flow of funds.................... . Boston...................................................... New York...................... ....................... Philadelphia............................. ................ Cleveland................................................. . Richmond................................................. Atlanta.................................................... Chicago.................................................... . Minneapolis............................................. Kansas City............................ ...... ......... Dallas....................................................... . San Francisco........................................... Federal Reserve float1............................... Borrowings................................. .................. Miscellaneous factors2............................... Change in total reserves................ Estimated change in required reserves3........................ Estimated change in excess reserves.............................. D ec. 31, 1952 through M ay 13, 1953 M a y 13, 1953 through July 15, 1953 +45 -9 6 + 8 +33 + 6 -2 1 September 9, 1953 through September 30, 1953 “ 8 + 1 + 7 -2 7 -1 4 +58 -17 + 16 — 168 — 2 — 44 + 157 + 192 — 581 + 29 + 152 + 206 + 26 July 15, 1953 through September 9, 1953 + 4 — 144 * — 30 + 47 + 124 — 203 + 19 + 108 + 101 + 32 + — — + — + + — + + + + - 9 -3 1 - 8 -1 0 -5 3 -1 2 +32 + 2 7 148 + — + — + + — + + + + 36 101 169 13 107 79 16 + 45 -162 + 59 -2 5 7 1 22 Cumulative Decem ber 31, 1952 through September 30, 1953 + 14 — 518 + 2 — 105 + 273 + 439 — 1009 + 67 + 393 + 412 + 91 1 58 3 9 33 22 56 6 26 26 17 + + -1 6 +15 - 4 - 3 - 5 - 4 52 -1 4 + 8 - 71 -1 3 + 19 - 6 + 4 + 1 8 2 * I^ess than $500,000. 1 Checks and other transit items credited to the reserve accounts o f depositing banks prior to actual collection b y the Federal Reserve Bank. 2 Shifts o f funds between m ember and nonmember banks and certain incom e and expenditure transactions o f the Federal Reserve Bank. 3 Primarily due to changes in amount and type o f deposits in m ember banks, but early in July reserve requirement ratios were lowered freeing an estimated $37 m illion for district m ember banks. estimated $37 million, and customers deposited $7 million more currency and coin than they withdrew.4 The substantial net inflow of funds from other districts reflected the transition to a condition of ease in the money market generated in part by net System purchases of Government securities. Dis trict banks received funds directly, when they or their customers sold securities in the money market; and indirectly, when other banks, after obtaining more reserves through security sales to the System, extended their loans or investments. From May 13 through July 15 district banks lost $144 million net to banks in the New York district. By contrast, in the like period a year earlier (when the money market was tightening) district banks were drained of $174 million, on balance, by the money market. The easing of pressure on banks in the period also affected the flows of funds at other points. District banks gained $333 million net from the Atlanta, Kansas City, and Dallas districts (dis tricts from which the Eighth District normally gains the most funds on balance). In the corresponding two months in 1952, the Eighth District gained $274 million from these three districts. 4 District banks, however, had to meet some drains o f fun ds in the twomonth period. These offset, in part, the net gains from interdistrict transactions and cu rrency inflows and the freed funds resulting from reduction in reserve requirements. Greatest drain resulted from T reas ury operations ($27 m illio n ); other routine factors absorbed $17 m illion. The drain from Treasury operations was occasioned by the Treasury’ s building up its account at the Federal Reserve Bank. T his was made possible, despite large expenditures from this account, by sizable tax collections and large purchases b y district residents o f G overnm ent secu rities. There w ere $3 billion worth additional Treasury bills and $ 6 billion o f Treasury tax-anticipation certificates sold nationally in the period. Page 162 The gain of funds from the middle of May to the middle of July permitted district banks to improve their reserve positions substantially. Daily average borrowings from the Federal Reserve dropped to $4 million in the first half of July from $72 million in the first half of May. Also, these banks increased their working balances. Their daily average excess reserves rose $20 million and their daily average deposits due from other banks jumped $41 million from the first half of May to the first half of July. The improvement in bank reserve positions halted the tightening of credit. Interest rates generally leveled off and some more sensitive rates moved down slightly in early July. But, for many bor rowers, credit was still considered tight. T h en , fo llo w in g m o d e r a te d r a in s f r o m fa c t o r s 9 . . . r o u tin e Eighth District banks were drained of a moderate amount of funds between July 15 and September 9. Bank customers withdrew currency on balance, largely in anticipation of the Labor Day weekend. Both Treasury operations and Federal Reserve “float” absorbed moderate amounts of reserves. A partial offset to these losses was provided by a net inflow of funds from other districts. T o meet the reserve drains, district banks in creased their borrowings from the Federal Reserve Bank from $3 million to a peak of $39 million (on September 6 ). However, most bank reserve posi tions were considerably easier than in April when daily average borrowings were about $70 million. Partly as a result of this loss of reserves* credit in the district continued tight, despite some slack ening in *the demand. Lenders, with limited funds, continued to be selective. Interest rates remained on the relatively high plateau reached in early June. • . . r e s e r v e p o s itio n s e a s e d a ga in a ft e r m id -S ep t e m b e r 5 la r g e ly b e c a u s e o f a n in flo w o f fu n d s fr o m o t h e r a r ea s . In the two weeks after Labor Day, district resi dents deposited more cash than they withdrew. Also, banks in the area gained funds from a sharp expansion in Federal Reserve “float” around midSeptember reflecting a temporary pick-up in the volume of checks handled. For a time, these fac tors eased the pressure on bank reserve positions. But later in September and in early October cur rency again began flowing into circulation and “float” contracted to normal levels. However, bank reserve positions remained fairly easy largely as a result of a “ favorable” balance of interdistrict clearings of checks. In addition, the expansion in loans, being less than expected, failed to absorb fully the reserves which became available in each individual bank for this purpose. From Sep tember 9 through October 14, district banks gained $36 million through interdistrict transactions. The net inflow of funds was largely the result of a smaller-than-usual drain to the Chicago and New York areas being more than offset by net gains from most other regions, especially the immediately adjacent districts to the South and W est. This gain of funds by district banks through interdistrict clearings was partly seasonal but also reflected the somewhat easier money market conditions. W ith the easing in bank reserve positions some relaxation developed in bank credit policies. R e s e r v e p o s itio n s , in flu e n c e d b y m a rk et c o n d i tio n s h e lp e d s h a p e d is tr ict bank p o li c i e s w h ich c o n tr ib u te d to b u s in ess sta b ility a n d g r o w t h . District bank lending thus far in 1953 has reflected the change in bank reserve positions. The reserve positions of district banks, in turn, have shown the influence of shifts in the money market. Over the first half of the year, when the money market was tight and bank reserves were under pressure most of the time, district banks became more restrictive in making loans and interest rates were increased. But due to a strong credit demand bank lending was at a high level. A large share of the funds was ob tained by selling Government securities to nonbank investors and by borrowing. Reporting district banks made over a billion dol lars of new loans to businesses in the first half of 1953. This was 10 per cent more than in the like period a year ago. Reflecting the large volume of new credit extended, outstanding loans to commerce and industry declined only 11 per cent at district member banks. Normally these advances contract about 20 per cent in the first half-year (and expand roughly the same amount in the last half). The con traction centered in a seasonal decline in advances to food processors and commodity dealers; most other types of businesses increased their borrowings. Not only did district member banks finance busi ness to a greater extent, but they also extended more credit to other borrowers. Consumer loans rose sharply (an estimated 20 per cent) in the first half-year. The largest increase was in automobile paper, but all other categories also increased. Loans to farmers (other than CCC) were up 11 per cent and advances for the purpose of purchasing or carry ing securities rose 5 per cent. New loans made for the purpose of financing real estate roughly matched repayments, a decline in outstanding advances se cured by residences being counterbalanced by an ex pansion of loans secured by commercial, farm and other properties. In addition, these banks increased their holdings of municipal securities by $22 mil lion. Since mid-year, the demand for credit has de clined. Thus, despite the easing of bank reserve positions which helped relax bank credit policies, loans have tended to level off. Business loans have only maintained their seasonal pattern and in re cent weeks a further weakening has been indicated. Consumer loans, which had been rising sharply in the first half of 1953, rose about 2 per cent in July, but declined moderately in August and September. Real estate loans have continued their sidewise movement. And indications are that both loans to farmers and those to finance the purchasing or carry ing of securities have contracted moderately. In conclusion, district banks so far in 1953 have contributed substantially to the financial needs of the expanding economy. This contribution was made not only by increasing loans to provide for growth but also by following credit policies that have con tributed to business stability. Early in the year when underlying pressures were inflationary and the demand for credit strong, banks contributed to stability by becoming more restrictive in their lend ing policies. Tighter credit policies by district banks in this period reflected, in part, the tighter money market conditions generally. In recent months as the excessive demand for credit has disappeared, dis trict banks have relaxed the restrictions on their lending somewhat (again reflecting money market conditions) and thus have provided a stimulus to continued business stability. N o r m a n N . B o w sh er Page 163 Survey of Current Conditions U S IN E S S A C T I V I T Y in the Eighth District declined slightly during September and early October. Nevertheless, activity was still at a higher level than a year earlier and only slightly below the peak level reached in the spring of this year. Employment in the major centers of the district followed diversified trends with little net change from August, but was somewhat below the level in the earlier months of the year. Industrial and construction activities declined. Department store sales, seasonally adjusted, fell below August levels and, for the second consecutive month, failed to equal the rate of a year earlier. Reflecting a decrease in prices of farm products and, to some extent, the damaging effects of the drouth, farm income in the district continued below 1952. W ith the easing in the general business activity and reduced inven tory accumulation, loans to businesses expanded less than seasonally in September and the first half of October. B Economic activity in the nation also slowed slightly during September. Industrial output de clined. The drop in national employment was primarily seasonal, but for the first time this year there was virtually no margin of gain over com parable months of 1952. Department store sales rose less than seasonally. Construction activity, which had increased less than normally in recent months, remained practically unchanged from August to September. Bank loans expanded substantially less than in the same period a year ago. Average whole sale prices declined about one per cent from midSeptember through mid-October, and prices of basic raw materials eased further. CONSUM ER PRICE INDEX B nreau o f L a b or Statistics (1 9 4 7 -4 9 = 1 0 0 ) S ep t./5 3 115.2 U nited States.............. St. L ou is.................. 117.1 June,’ 53 114.5 115.8 Sept.,*52 114.1 115.5 Sept., 1953 compared with June,’ 53 Sept.,*52 + 1% + 1% + 1 + 1 RETAIL. FOOD Bureau o f L a b or Statistics (1 9 4 7 -4 9 = 1 0 0 ) Sept.,*53 U . S. (51 c itie s)------113.8 St. L ou is— ............. 115.7 A u g .,*53 114.1 117.2 Sept.,*52 115.4 116.7 Sept., 1953 compared with A u g .,’ 53 Sept.,*52 -0 -% — 1% — 1 — 1 W H O LE SA LE PRICES IN THE UNITED STATES Bureau of L a b or Statistics (1 9 4 7 -4 9 = 1 0 0 ) Sept.,’ 53 A ll C om m odities........ 111.0 Farm P rod u cts...... 97.9 F ood s....................... 106.5 O ther................... 114.8 Page 164 A u g . / 53 110.6 96.4 104.8 114.9 Sept.,*52 111.8 106.6 110.3 113.2 Sept., 1953 compared with A u g .,*53 Sept.,*52 -0 -% — 1% + 2 — 8 + 2 — 4 -0 + 1 The total value of goods and services produced in the nation during the third quarter decreased slightly from the peak level reached in the second quarter. Decreases in the rate of business inventory accumulation and Government expenditures for national security programs more than offset an increase in consumer expenditures. Business inven tories had been expanded at an annual rate of $8.8 billion during the second quarter, but during the third quarter additions were at a rate of $5.5 billion. Investment in private residential construction also declined slightly from the second to the third quarter but other forms of private domestic invest ment increased slightly. Expansion in consumer spending in the third quarter reflected largely fur ther growth in expenditures for services, with pur chases of durable goods showing little change and outlays for nondurable goods rising only slightly. The declining rate of Government outlays, the prospective reductions in new plant and equipment expenditures and the record level of inventories, were among the chief factors in the current business outlook. Business inventories at the end of August were at a record level of nearly $79 billion, almost $6 billion higher than a year earlier, while sales have increased to a lesser extent. A s a result of the high levels of stocks, businessmen have become cautious and reduced their orders. There has also been a decline in military orders. laploynent The opening of schools in September called away from shop, store, and farm thousands of teen agers who had swelled employment to an all-time high in August. W ithout the students, an estimated 62.3 million people remained at work in the nation, about a million less than were employed in August, and about the same as in September, 1952. Unemploy ment, estimated at 1.2 million in early September, remained practically unchanged from August. Through September and October signs of a slackening in demand for labor appeared in both nation and district. There were layoffs in a variety of industries, with the greatest number occurring in durable goods manufacturing, and there were some increases in initial claims for unemployment compensation. Employment declined from August to September in the two largest labor markets of the Eighth Dis trict, St. Louis and Louisville, but increased in Evansville and Little Rock. The St. Louis area declines resulted from layoffs in plants producing aircraft, tank parts, railroad castings, and auto parts. In Louisville, construction completions were the largest factor in the 1.2 per cent decline in total employment. However, Louisville employment was 6 per cent higher this September than a year earlier. Evansville recovered somewhat in September from an August employment low of 78,200. The 4 per cent increase was accounted for largely by recalls of auto workers following a shutdown for inventory adjustment. In Little Rock, settlement of a labor dispute which had affected 1,050 workers in August, and a seasonal increase in cottonseed oil milling helped raise manufacturing employment 1,350 from Au gust. Total nonagricultural employment increased by 1,600 to 71,550, which is 1,550 above a year ago. Industry Industrial production in the district tapered off slightly in September and early October. But many indicators were well above 1952 levels. Manufacturing— Of the fourteen lines of manu facturing activity for which reports were obtained, only three (rubber, fabricated metals, and electrical machinery) showed an increase in use of electric power in September over that used in August. All others showed declines. However, all except two lines (primary metals and shoes) showed an in crease in power use over September a year ago, showing that production still remained strong. Particularly strong, among other indicators, was the steel ingot rate in the St. Louis area where operations were held at 99 per cent of capacity throughout September and early October. Southern hardwood production in the district also continued in good volume, although orders were reportedly below production and stocks thus were rising. Livestock slaughter remained heavy as the drouth continued to force marketings, and hog marketing increased seasonally. Whiskey output improved, with five more distilleries in Kentucky in operation at the end of the month than at the end of August and eight more than on September 30, 1952. Some activity lagged, however. Southern pine mills continued production at a reduced rate from a month and a year ago in September and early October. And shoe production in September and October was estimated to be running 5 to 10 per cent below last year, according to results of a survey made by the National Shoe Manufacturers Association. September orders were running 10 to 20 per cent below those of 1952, the survey also showed. Production of slab zinc at St. Louis was cut back at the end of September and will be further reduced in November. Imports of this metal have increased sharply in recent months. In a number of instances, producers of durables, such as defense goods and autos, made further cutbacks. Mineral Production— Coal output at the end of September and in the first weeks of October ex perienced a slight seasonal pickup. Oil production remained at about the same level, although for the month of October allowable output in Arkansas was reduced 15 per cent by state authorities. Stocks were high throughout the country. Construction There was no apparent slackening in total con struction activity in the nation from August to September, although the number of new housing starts declined. Expenditures for new construction in September, totaling $3.3 billion, were about the same as in August and were 5 per cent above Sep tember, 1952. Private expenditures of $2.2 billion were 8 per cent above those of a year ago, while public expenditures were practically unchanged from last year. September’s 92,000 housing starts were 2,000 under those of August and 8,800 under those of September, 1952. CONSUMPTION OF ELECTRICITY DAILY A V E R A G E * Sept., A u g ., ( K .W .H . 1953 1953 in th o u s .) K .W .H . K .W .H . Evansville............ 912 910 L ittle Rock.......... 181 138 Louisville............. 4,485 4,590 M em phis.............. 1,603 1,454 Pine B luff............ 516 476 St. L ouis.............. 5,340 5,464 T otals................ 13,037 13,032 * Selected M anufacturing Firm s. Sept., 1952 K .W .H . 853 169 3,860 1,346 280 5,132 11,640 LOADS INTERCHANGED FOR 2 5 AT ST. LOUIS Sept., 1953 compared with A u g ., *53 Sept., '52 -0 -% + 7% +31 + 7 — 2 +16 +10 +19 + 8 +84 — 2 + 4 -0 -% +12% RAILROADS First N ine Days Sept.,*53 A u g .,*53 Sept.,’ 52 O c t.,’ 53 O ct., 52 9 m os. *53 9 m oe. '52 110,795 111,934 98,767 33,227 29,061 907,980 873,059 S o u rce : Terminal Railroad A ssociation o f St. Louis. CRUDE OIL PRODUCTION— DAILY AVERAGE (I n thousands Sept., o f bbls.) 1953 Arkansas...................... 77.8 Illinois_____________ 165.3 Indiana........................ 34.6 K entucky..................... 31.5 Total........................ 309.2 A u g ., 1953 77.0 161.5 34.9 31.3 304.7 Sept., 1952 75.1 166.9 33.7 32.2 307*9 CO AL PRODUCTION Sept., 1953 com pared with A u g .,’ 53 Sept.,’ 52 + 1% + 4% + 2 — 1 — 1 + 3 + 1 — 2 + 1% -0 -% INDEX 193 5 -3 9= 1 0 0 ___________Unadjusted Sept., '53 A u g ., '53 144.8* 132.2* p Preliminary. Sept., *52 194.2 Sept., ’ 53 137.9* A djusted_____________ A u g ., ’ 53 Sept., ’ 52 1333*" 185.0 Page 165 INDEX OF CONSTRUCTION CONTRACTS AWARDED EIGHTH FEDERAL RESERVE DISTRICT* (1947-1949 = 100) U nadjusted A u g ., 1953 T ota l.............. ............................................ 188.3P Residential.......... ...... — .......................... 176.2* A ll O ther....................... ......................... 193.9* Seasonally adjusted T otal...............................................................154.2* Residential.......... - ....... - ..............................146.8* A ll Other....*........ ....... .................................157.6* July, 1953 183.9 167.8 191.3 A ug., 1952 457.9** 174.8 589.3** 142.2 143.3 141.7 373.4** 145.7 479.1** * Based on three-m onth m oving average o f value of awards, as reported b y F . W . D od g e Corporation. ** Includes $459,000,000 A tom ic E nergy Commission project. * Preliminary. In the Eighth District, construction employment declined in several areas, and remained the same or increased slightly in others. Louisville had the largest decline; completion of major projects re duced construction employment by 18 per cent from August to September. A gradual reduction con tinued at the Atomic Energy Commission project near Paducah. Work on the Joppa, Illinois, power plant of Electric Energy, Inc., was stalled through the last two weeks of September and the first part of October by an ironworkers strike. In Little Rock, a small increase in construction employment was reported. In St. Louis, construction employ ment in September recovered the loss caused by the prolonged strike. Construction contracts awarded, as reported by the F. W . Dodge Corporation, during September in 37 eastern states increased 23 per cent from August, but were still substantially below those of a year ago. Awards in the 8th district went down in stead of up from August to September, but were higher than a year ago. If the value of a $459 million AEC Contract reported last year is excluded. The Eighth District appears to be lagging con siderably behind the nation in the value of con struction contracts awarded in the first 8 months of 1953. While total awards in the nation were 4 per cent higher in the first 8 months of this year than in 1952, total awards in this district were down 13 per cent. Similar differences can be seen for the other classifications in the table below. The most noticeable drop was in contracts for factory con struction in the district— down 55 per cent from 1952. CONSTRUCTION CONTRACT A W A R D S m onths *53 compared with 8 months *52 Eighth D istrict United States T otal C onstruction.—.......................................... — 1 3% * + 4% Residential— ...................................................... — 16* — 4 Comm ercial............. ........................................... +17 +61 M anufacturing..................... ............................. — 55 + 4 P ublic W ork s and Public U tilities.............................................. — 8 + 4 8 * Preliminary. S ou rce: F . W . D od g e Corporation. Page 166 Trade The level of district retail sales in September and through mid-October was somewhat lower than in the comparable period of 1952. Sales volume dur ing September wras larger than in August in some lines— but the increase was less than usual. Con tinued unseasonally warm weather limited the effectiveness of traditional promotions at district DEPARTMENT STO RES Stock Stocks Turnover N et Sales on H and Sept., 1953 9 m os. Sept. 3 0 /5 3 com pared with 1953 com p, with Jan. 1 to A u g ., Sept., to same Sept., Sept. 30, 1953 1952 period ’ 52 30,’ 52 1953 1952 8 th F .R . D istrict Total.. . . + 4 % — 5% + 3% + 7% 2.54 2.70 ..+ 8 — 11 — 2 2.44 2.58 + 11% — 6 .. + 11 — 1 + 9 2.42 2.71 — 2 3 + 5 + 1 2.47 2.72 + 11 .. + 5 + 8 **•••• + ‘*3 !.+ 2 — 10 + 1 2.72 2.83 .. + 5 — 3 + 4 + 7 2.55 2.69 + 1 — 9 — 1 + 3 2.27 2.48 — 6 + 2 + 10 2.78 2.98 0 — 12 2.07 2.4 4 + 1 + 5 1 In order to permit publication o f figures for this city (o r area), a special sample has been constructed which is not confined exclusively to department stores. Figures for any such nondepartm ent stores, however, are not used in com puting the district percentage changes or in com puting department store indexes. 2 T he sample fo r these areas is unchanged from the sample previously reported for the principal cities in these areas. 8 Fayetteville, Pine B luff, A rkansas; H arrisburg, M t. V ernon , Illin o is; Vincennes, Ind ia n a ; Danville, H opkinsville, M ayfield, K en tu ck y ; Chillicothe, M issou ri; Greenville, M ississippi; and Jackson, Tennessee. O utstanding orders o f reporting stores at the end o f Septem ber, 1953, were 27 per cent smaller than on the corresponding date a year ago. P E R C E N T A G E O F A C C O U N T S A N D N O T E S R E C E IV A B L E Outstanding September 1 , 1953, collected during September. Instalm ent E xcl. Instal. A ccoun ts A ccoun ts F ort S m it h ........ % 41% Little R o c k ........14 45 L ouisville .......... 21 47 M e m p h is ............ 18 43 Instalm ent E xcl. Instal. A ccou n ts A ccoun ts Q uincy ................ 18% 56% St. L o u i s ..............18 53 O ther Cities ...... 9 44 8 th F .R . D ist...... 18 49 IN D E X E S O F D E P A R T M E N T S T O R E S A L E S A N D S T O C K S 8 th Federal Reserve D istrict Sept., A u g., 1953 1953 109 100 102 110 138 129 130 134 4 D aily average 1947-49= 100. 5 End o f M onth average 1947-49 = 100. T rading d a ys: September, 1953— 2 5 ; A ugu st, 1953— 2 6 ; Septem ber, 1952— 25. July, Sept., 1953 1952 86 116 107 108 122 129 131 121 RETAIL. FURNITURE STO RES N et Sales Inventories R atio Sept., 1953 Sept., 1953 of com pared with com pared with Collections A u g ., Sept., A u g ., Sept., Sept., Sept., 1953 1952 1953 1952 1953 1952 8 th D ist. T otal*...... — 9 % — 8% — 1% — 1% 18% 19% St. L o u is .................. — 5 — 11 — 1 — 4 26 27 L ouisville A rea 2 ..... — 16 + 8 + 7 — 4 14 13 L ouisville............ . — 16 + 7 + 7 — 5 13 12 M em phis................... — 31 — 21 * * 10 13 L ittle R o c k .............. + 1 4 — 12 — 6 -0 14 18 Springfield............... — 6 — 20 + 1 + 9 15 16 F ort Sm ith.............. — 7 — 10 * * * * * N ot shown separately due to insufficient coverage, but included in Eighth D istrict totals. 1 In addition to follow ing cities, includes stores in Blytheville, Pine Bluff, A rkansas; H opkinsville, O w ensboro, K e n tu ck y ; G reenw ood, M is sissippi; and Evansville, Indiana. 2 Includes Louisville, K e n tu ck y ; and N ew A lb a n y , Indiana. P E R C E N T A G E D IS T R IB U T IO N O F F U R N IT U R E SA L E S Cash Sales.................................. ........................ Credit Sales................... ..................................... T otal Sales...................................................... Sept., *53 A u g ., *53 14% 16% 86 84 100% 100% Sept., *52 15% 85 100% department stores and apparel stores. On the auto mobile market, used car sales were substantially lower than a year ago and selling prices continued to decline. Furniture and appliance store volume also was lower than in the comparable period of 1952. On a seasonally adjusted basis, daily average department store sales during September were 102 per cent of the 1947-1949 base period. In compari son, they were 110 per cent in August and 108 per cent in September, 1952. In the third quarter, sales declined (on a seasonally adjusted basis) from the peak level reached in the previous quarter, and were below those in the third quarter of 1952. In the first two weeks of October, sales were down 7 per cent from those last year. For the first nine months of 1953, sales were 3 per cent larger than in 1952, down somewhat from the 5 per cent cumula tive gain at mid-year. At district specialty stores, sales experience dur ing September was somewhat better at women’s than at men’s wear stores. Women’s specialty store sales were substantially larger than in August and equaled those a year ago. Men’s wear store volume, while larger than a month earlier, was below that in September, 1952. Furniture store sales for the district as a whole during September were lower than in both August and in September, 1952. This marked the third consecutive month that sales have declined in com parison to those in 1952. With consumer buying lagging, retail inventories climbed to relatively high levels. At district de partment stores the retail value of inventories held on September 30 was 7 per cent above that a month earlier and 9 per cent larger than on September 30, 1952. On a seasonally adjusted basis, end-of-month stocks were 129 per cent of the 1947-1949 average down slightly from the near peak level a month earlier. At other reporting retail lines, inventories were generally larger than a year ago. Banking and Finance The period from mid-September to mid-October saw a general easing of the money market. Interest rates declined, and reserve positions of district banks eased. Nevertheless, loans did not expand seasonally. Deposit turnover, while higher in September than August, remained below the average of the first seven months of the year. Interest Rates— Between mid-September and midOctober interest rates generally worked down (prices up). The decrease in yields was fairly sharp for Treasury bills. The decline reflected: (1) easier money market conditions, (2) a slackening in the demand for credit, and (3) a continued high rate of savings. The following table compares yields for selected issues on September 14, 1953, with October 19, 1953 : W H O LE SA LE TRADE Line of Comm odities________ ______Net Sales Data furnished by Sept., 1953 Bureau of Census, com pared with U .S . D ept, o f Comm erce* A u g .,*53 Sept.,*52 A utom otive Supplies........................ - f 2 % — 11% D rugs and Chem icals....................... + 1 8 + 4 D ry G ood s..................................... ......— 7 — 15 G roceries........................................ ...... + 6 - 0— H ardw are.............................................+ 4 — 10 T ob a cco and its P roducts......... ...... + 1 1 -0 M iscellaneous............................... ...... + 7 + 2 Stocks Sept. 30, 1953 com pared with Sept. 30, 1952 4- 7% +21 +22 — 2 + 1 + 6 + 7 * Preliminary. EIGHTH DISTRICT MEMBER BANK A SSE TS AND LIABILITIES BY SELECTED GROUPS ( I n Millions of D ollars) Assets 1 . Loans and Investm ents........................................ a. L oa n s................................................................... b. U . S. Government Obligations.................... c. Other Securities................................................ 2 . Reserves and O ther Cash Balances.................. a. Reserves with the F . R . B ank...................... b. Other Cash Balances 3 .................................... 3. Other A ssets............................................................ T otal A ssets............................................................. Liabilities and Capital Gross Dem and D eposits....................................... a. Deposits of B anks............................................ b. Other Dem and D eposits................................ Tim e D eposits........................................................ B orrow ings and Other Liabilities..................... Total Capital A ccou n ts........................................ T otal Liabilities and Capital A ccou n ts........... Sept. ,*5 3 $4,505 2,089 1,996 420 1,440 676 764 55 $6 ,0 0 0 $4,446 731 3,715 1,086 58 410 $6,000 A ll M em ber________ Change fr o m : A u g .,’ 5 3 Sept.,*52 to to Sept.,’ 53 Sept.,*53 $+161 $ + 23 + 29 + 93 — 1 + 49 + 19 — 5 — 24 + 84 — 66 14 + 42 98 1 + 3 $ + 140 $ + 108 $+130 + 95 + 35 + 5 — 29 + 2 $ + 108 $ + 112 + + + — + $+ 9 103 54 54 28 140 L arge City Banks 1 Change fr o m : Sept.,*52 A u g .,’ 53 to to Sept.,’ 53 Sept.,*53 Sept.,’ 53 $2,599 $ + 10 $ + 81 1,377 + 19 + 60 1 ,0 2 0 — 6 + 14 _ 3 202 + 7 — 37 890 + 48 — 63 428 — 20 462 + 68 + 26 35 + 1 + 3 $3,524 $ + 47 $ + 59 $2,729 691 2,038 513 49 233 $3,524 $+ + — + — + $+ 87 90 3 2 31 1 59 $+ + + + — + $+ 66 12 54 20 53 14 47 Smaller Banks 2 Change fro m : A u g .,*53 Sept.,*52 to to Sept.,*53 Sept.,*53 Sept.,*53 $1^906 $ + 80 $ + 13 712 + 10 + 33 976 + 5 + 35 — 2 218 + 12 550 + 36 + 13 — 3 248 + 6 302 + 30 + 16 - 0 20 -0 $2,476 $ + 49 $ + 93 $1,717 40 1,677 573 9 177 $2,476 $ + 43 + 5 + 38 + 3 + 2 + 1 $ + 49 $+ — + + — + $+ 46 3 49 34 1 14 93 1 Includes 12 St. Louis, 6 Louisville, 3 M emphis, 3 Evansville, 4 Little R o ck , and 4 East St. L ouis-N ational Stock Y ards Illinois, banks. 2 Includes all other E ighth D istrict m ember banks. Some o f these banks are located in smaller urban centers, but the m ajority are rural area banks. 3 Includes vault cash, balances with other banks in the U nited States, and cash items reported in process o f collection. Page 167 YIELDS ON SELECTED ISSU ES Governm ent Securities Short-term (three m on th s)............................................. Intermediate-term (five yea rs)....................................... L ong-term (thirty yea rs)................................................ Commercial Paper.................................................................. Corporate Bonds H ighest grade.................................................................... M edium grade..................................................................... C om m on Stocks (A verage yield — 2 0 0 Stocks, estim ated)........................................................... . Sept. 14 Oct. 19 1,96 2.74 3.22 2.75 1.38 2.36 3.06 2.50 3.31 3.88 3.15 3.82 5.75 5.50 District Banking— From September 16 through October 14, earning assets of weekly reporting banks rose $55 million. Most of the gain, $43 million, was in loans, primarily to businesses. H ow ever, business loan growth fell short of “normal” for the period, reflecting smaller-than-usual bor rowings by processors and distributors of agricul tural products. Loans secured by real estate were up moderately, but all other loan categories showed slight declines over the four weeks. The increase in investment portfolios centered in Treasury notes. Reflecting both a net inflow of funds and the bank credit expansion, individuals and businesses in creased their deposits, demand and time. Banks used a part of the inflowing funds to build up cash assets. Agriculture Crop Production— During September, estimates of production of corn, soybeans, hay, and tobacco in the Eighth District were reduced further. Cotton and rice production, however, increased in the month. W hile the drouth has been felt severely in some areas, this year’s total production compares closely to that of 1952. Wheat, oats, and rice pro duction were estimated as well above, cotton and hay production as about the same as, and soybeans, burley tobacco, and corn as considerably below 1952 production. Hay supplies were sharply below last season on many farms. ESTIMATED PRODUCTION FOR MAJOR CROPS EIGHTH DISTRICT Per cent Estim ated Per cent change from (I n Thousands production change 1942-1951 of U nits) O ctober 1, 1953 from 1952 average___ Corn ( b u .) .............................. 318,164 — 8% — 10% W heat ( b u .) ........................... 70,015 +38 +84 Oats ( b u .) .............................. 52,487 +21 — 13 C otton (b a le s )...................... 3,928 + 1 +10 Soybeans ( b u .) ..................... 64,472 — 26 +17 R ice (b a g s )...............- ........... 11,778 +12 +62 H ay (to n s )............................. 7,525 — 3 — 22 T obacco, burley (lb s .)........ 196,630 — 10 + 9 D ark, air-cured (lb s .) ..... 21,331 — 17 — 28 Dark, fire-cured (lb s.).... 19,110 — 7 — 34 S o u rce i A dapted from Crop Production, U S D A , October 1 , 1953. Prices— Tobacco and hog prices increased, but all other major district agricultural product prices have declined ranging from 8 per cent for wheat and rice to 32 per cent for beef cattle during the year prior to September 15, 1953. Primarily as a result of the general agricultural price decline, Page 168 DEPOSIT ACTIVITY Sept., 1953 (In m illions) Six Largest Centers : East St. L ou is-N a tional Stock Yards, 111.................................. Evansville, In d .............. Little R ock, A rk ........... Louisville, K y ................ M emphis, T enn............. St. Louis, M o ................. Total— Six Largest Centers........................... Other R eporting C enters: A lton, 111.......................... Cape Girardeau, M o ..... E l Dorado, A rk .............. Fort Smith, A rk ............ Greenville, M iss............ H annibal, M o ................. Helena, A rk .................... Jackson, T enn................ Jefferson City, M o ........ Ow ensboro, K y .............. Paducah, K y .................. Pine Bluff, A rk .............. Q uincy, 111...................... Sedalia, M o .................... . Springfield, M o .............. Texarkana, A rk ............ Total— O th er Centers........................ Total— 2 2 Centers....... 132.6 157.6 151.5 Debits 1 Percent Change from A u g., Sept., 19522 1953 — + — + 658.0 2,008.2 + 14% — 2 + 7 — 3 +24 + 8 3,794.7 + + 6 8 6 .8 35.6 14.2 25.7 43.8 23.6 9.6 9.6 23.5 76.9 41.7 36.6 40.6 34.9 1 2 .8 68.7 21.4 519.2 4,313.9 ................. 8% T urnover Sept., Year 1953 Ended (A nnu al Sept. 30, 19532 R ate) 24.3 16.4 15.1 23.5 25.7 2% 10 8 4 — 10 + 6 2 % + 3% + 5 + 4 — 4 + 28 + 5 + 41 + 20 + 46 + 13 __ 9 + 40 + 4 + 6 + 3 - 0 - + 16% + 14 — 2 — 19 + 5 — 13 + 4 + 37 - 0 — 16 — 16 + 6 + 11 + 2 + 9 + 12% ............ + 8% + 2% ............ + 12% 2 1 .1 26.6 17.1 15,5 24.3 25.1 20.7 21.7 21.5 12.5 1 2 .2 1 1 .8 1 2 .6 10.9 12.4 14.8 8.7 15.8 __ 7 10.9 13.2 14.4 8.7 1 2 .6 1 2 .6 1 1 .2 14.0 13.7 14.3 16.0 14.8 10.4 12.4 14.7 11.7 14.7 14.2 13.8 14.3 9.9 13.7 13.7 13.2 ................ 2 0 .1 1 2 .8 ................ 2 0 .0 1 Debits to demand deposit accounts o f individuals, partnerships and corporations and states and political subdivisions. 2 Estimated. district cash farm income during the first eight months of 1953 was 9 per cent below the correspond ing period in 1952. The decline in agricultural prices, coupled with a relatively high level of prices paid, continued to place district farmers in a costprice squeeze. For the nation, the parity ratio on September 15 was 92, compared with 101 a year earlier. PRICE C H A N G E S FOR SELECTED EIGHTH DISTRICT A G RICU LTU RAL PRODUCTS E ighth D istrict 1 Per cent change price from September 15, 1953 Septem ber 15, 1952 Corn (per b u .)............ .............................. $ 1.60 — 13% Soybeans ( p e r b u .) ................................... 2.35 — 17 W heat (per b u .)........................................ 1.81 — 14 Oats (per b u .)............................................ .83 — 19 R ice (per c w t .).......................................... 4.70 — 11 H ay, baled (per t o n )................................ 25.06 — 15 C otton, Am . Upland (per lb .) .............. .3435 — 15 .5762 T ob a cco, types 11-37 (per l b .) .............. + 13 Beef cattle (per c w t .) .............................. 14.33 — 37 H ogs (per c w t.)........................................ 23.51 + 24 A ll milk, whole (per c w t .)..................... . 4.17 — 17 A ll chickens, live (per l b .) ..................... . .2356 — 10 E ggs ( p e r d o z .) ......................................... .4656 + 4 1 Average price for district states. 2 U . S. average. S ource: Agricultural Prices, U S D A , September 30, 1953. CASH FARM INCOME (I n thousands A u g., o f dollars) 1953 Arkansas.............. $ 22,636 Illin ois................... 146,735 Indiana................. 102,350 K entucky............. 31,694 M ississippi........... 22,117 M issouri............... 72,225 Tennessee............ 26,994 7 State T otals...,$424,751 8 th Dist. Totals.. $173,220 A ugust, 1953 com pared with July, A u g ., 1953 1952 — 16% — 5 % — 23 + 1 — 8 + 8 — 9 — 19 + 17 — 32 — 18 — 17 — 17 — 14 — 17% — 7 % — 18% — 13% 8 m onth total Jan. thru A u g. 1953 1953 184,169 1,198,584 666,968 312,212 179,062 564,714 231,763 $3,337,472 $1,403,332 $ 1952 — 24% — — — — — — — — 2 2 3 6 9 9 5% 9% 1951 — 13% — 3 — 5 — 2 + 5 — 16 — 11 — 6% — 8%
@FedFRASER