Full text of Review (Federal Reserve Bank of St. Louis) : November 25, 1919

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F E D E R A L R ESER VE B A N K O F ST. LO U IS

MONTHLY REPORT ON
GENERAL BUSINESS AND AGRICULTURAL CONDITIONS
IN FEDERAL RESERVE DISTRICT No. 8
R E L E A S E D FOR P U B L IC A T IO N O N A N D A F T E R T H E M O R N IN G O F N O V E M B E R 2 5 , 1 9 1 9
W IL L IA M
C H A IR M A N

OF

T H E * BOARD

MCC.
AND

M A R T IN ,
FEDERAL

RESERVE

AGENT

Retail and wholesale trade continue very active in the larger distributing centers in this District, in
some instances showing substantial increases over last month, in spite of high prices, the difficulty in
obtaining goods, and the strike of soft coal miners.
Continued rains have damaged crops in some sections. Considerable corn has been destroyed by the
flooding of river-bottom lands, unpicked cotton has been damaged and much cotton seed has spoiled
through sprouting. The rains have also interfered with the planting of winter wheat and the harvesting
of corn and cotton. This naturally has had a restraining influence on the buying activity in agricultural
sections.
A s yet, barring the closing of some glass and clay product factories, the effects of the coal strike have
not been of an alarming nature. Manufacturers, for the most part, have supplies on hand to last them for
from ten days to tw o weeks and the more provident and wealthier classes in the community have laid up
stores for winter use in the home. H ow ever, practically all coal mines in the District are still idle and
unless they soon resume operations a serious disorganization of industry and much suffering among the
hand-to-mouth element of the community may result. Efforts are being made to save coal through restricted
use of electric lights, skip-stop street car schedules and a more economical use of heat in offices and homes.
Collections throughout the District have been excellent, but the recent unfavorable crop conditions are
beginning to delay payments.
Bank deposits show a marked increase from day to day, a normal condition at this season of the year.
The demand for m oney is stronger than last month and rates are somewhat higher.
M A N U F A C T U R IN G — Shoe manufacturers report their business steady and that their supplies of
raw material are sufficient to last for several months. They have more orders on file than they ever had
before and the percentage of collections to accounts outstanding is at the highest level in the history of the
business. W hile there have been increases in some grades of leather the tendency is to hold firm around the
present figures.
Manufacturers of electrical supplies report increases as high as 17% over last month. Their prosperity
is due to new building, public utility extensions and to the large demand for electrical specialties, such as
heating devices, washing machines, vacuum cleaners, etc. Prices are steady. Business is beyond its normal
footing and one manufacturer sa y s: “ Our business is grow ing in leaps and bounds and we expect an extra­
ordinary business for several months.”
Some manufacturers o f iron and steel report increases in their business during October as high as 125%
over September. This is due in great measure to the building of* new industrial plants and to the im prove­
ment o f the equipment of plants already in operation. Firms hold a considerable number of orders for de­
livery into the early part of 1920. O w ing to the steel strike and to other causes basic prices tend to be high.
Clothing manufacturers still say there is a shortage of merchandise and that it is difficult to obtain
skilled labor. Business continues beyond the normal footing.
Candy manufacturers say business is improving. The advance in prices and the uncertainty of the
sugar supply, they say, stimulate buying. The}" hold large orders for delivery during the Christmas season.
Flour mills report that their business is steady and that their orders on hand for future delivery are
normal for this season o f the year.
The operators o f cotton oil mills are having difficulty in securing enough cotton seed to press, and it
is likely that a shortage of the products of this industry will be felt.
In some sections of the District the lumber trade is hampered by the lack of transportation facilities.
One railroad executive states that his road alone needs at least four hundred more freight cars to move the
accumulation of lumber, logs and poles from its right-of-way.




W H O L E S A L E A N D JO B B IN G — W holesale dry goods houses report some increases in O ctober over
September, though, normally, September is a much larger month. On the other hand, many firms report
decreases. The difficulty of obtaining merchandise, the high prices and the bad weather are given as
unfavorable factors affecting the trade. One firm reports that its business is 25% in excess of norm al;
another says its orders on hand for future delivery are the largest in its history. There is a tendency toward
softening of the merchandise market.
W holesale grocers say their business is .steady or slightly less than in September. Concerns appear to
have no orders or very few of them for future delivery. One company reports high prices as an unfavor­
able factor affecting its* business.
W holesale dealers in boots and shoes say business is improving. Some have more orders than they
can fill in ninety days, others say their orders for future delivery have increased two-thirds beyond normal.
There is still a shortage of merchandise and dealers’ stocks are apparently light.
A large wholesale paper company says its business was larger in O ctober than in September. There is
a good demand for its products but there is a shortage of production, due to labor disturbances. It sa y s:
‘ ‘ Skilled labor is hard to get— unskilled labor hard to hold.”
Cotton factors says there is a good demand from the mills, but a great scarcity of white cotton. Prices
are high and subject to sudden variations.
%
W holesale hardware concerns report increases in O ctober over September. Some say their orders on
hand for future delivery are about normal, others that there is a tendency on the part of merchants to be
more cautious.
R E T A IL — The condition of the retail trade varies widely in different parts of the District. Smaller
distributing centers have felt the effects of the bad weather but in some o f the larger cities department
stores report increases as high as 100% in O ctober ov er September. In the South, this gain is partly
accounted for by the cold weather in September which delayed the demand for seasonable merchandise
until the follow ing month. The gain is. also partly due to the high price of cotton. There is still a marked
shortage of merchandise. This is not only due to labor conditions and to slow deliveries, but also to the
fact that some concerns are making articles, such as toys, on which they can make a large and quick profit,
and are curtailing their output of standard articles. Practically no toys are being imported from Europe and
the burden of their manufacture is being borne to a considerable extent by companies heretofore engaged
in other lines of manufacture.
A G R IC U L T U R E — The planting of winter wheat, which was delayed by the dryness o f the soil, was
further hampered by the continued rains follow ing the drouth. Reports indicate ttyat the acreage has been
materially reduced from that of last year. The wheat that has been planted is doing well except in some
parts of the District where it is infected with Hessian fly. Pastures are in excellent condition throughout
the District. The harvesting of corn has been delayed to such an extent that even now much of it is in the
shock. The Government's estimate of the corn yield for this District as of November 1st, was 382,113,000
bushels. This is about 575,000 bushels less than the O ctober 1st estimate, but 9,000,000 bushels more than
the estimated production in 1918. The cotton crop has been materially damaged by the rain through color­
ing and through the sprouting of the seed. The Government's preliminary estimate of tobacco in Kentucky
and Tennessee for 1919 places the production of these states at 543,250,000 pounds, an increase of about
54,000,000 pounds over last year and of 95,000,000 pounds over the 1913-1917 average. The apple crop for
Arkansas, Illinois, Indiana, Kentucky, Missouri and Tennessee, according to the Government's estimate on
December 1, 1918, was 17,637,000 bushels, as against the O ctober 1, 1919, estimate of 21,437,000 bushels, an
increase of nearly 4,000,000 bushels.
The Government's price index of all crops on Novem ber 1st was 3.7% higher than a year ago and
69.1% higher than the average of the preceding five years.
L IV E S T O C K — The report of the St. Louis Stock Yards for October, 1919, shows increases in all
receipts and shipments, except in the receipts of cattle and hogs, as compared with the corresponding
month last year. The comparative figures are as follow s:
Cattle.
1919
Receipts. . .......................................177,856
Shipments......................................... 66,850

1918
181,612
53,193

Hogs.
1919
235,456
236,365

Sheep.

1918
263,783
58,065

’

1919
62,040
11.258

Horses and Mules.

1918
51,713
7,821

1919
33,433
34,604

1918
30,183
31,295

Good pasturage has been of benefit to live stock throughout the District.
L A B O R — The soft coal strike is the paramount issue in the District. Little progress has been made in
meeting the situation at particular mines, and its solution seems to depend on some sort of a nation-wide
compromise between the miners and operators. No other serious labor troubles are in evidence in the
District. Labor is well employed. There is still a shortage of skilled labor in some lines.
B U IL D IN G — During October building activity continued in excess of last year but decreased consider­
ably from last month. Comparative figures for October are as follow s:
1919
Permits
St. Louis......................................................................................... ..............
Louisville.......................................................................................................
Memphis.........................................................................................................
Little Rock..................................................................................................




761
204
. I ll
95

October

1918

Cost

Permits

Cost

$1,986,160
755,745
335.715
150,558

383
85
40
46

$306,045
96,658
75,365
20,745

B A N K IN G — The demand for money continued to increase during the past month, due largely to the
increased m oney value of transactions involved in crop movements. Rates are somewhat higher on account
of the increased demand and because of the tightness of money in the East.
The high, low and customary discount and interest rates prevailing in St. Louis, Louisville, Memphis
and Little Rock, from O ctober 16th to November 15th, as reported by banks located in those cities, were
as follow s:
St. Louis
Louisville
Memphis_________ Little Rock
H.
L. C.
H.
L. C.
II.
L.
H. . L.
C.
C.
Customers' prime commercial paper:
6
6 .5
6
6
7
30 to 90 days...................................... 6
5J/ 2 5/2
5^ 6
6^2
6
6
5
6
7 . .6
4 to 6 months.................................... 6
Sy2 5/2
5/2 6
fr/2
Prime commercial paper purchased
in open market:
30 to 90 days........................... . . . . . . $y2 5^4 5/2
5/2 554 5 /
5'J4 5*4 5J4
4 to 6 months.......... ........................... 5^2 5% S'A
sy 2 5/4 5 /
5
5
5
6 *’
6 ** 5
6 ” 6 ** 6 *’
Loans to other banks.................................... 6
SJ/ 2 6
Bankers' acceptances of 60 to 90 days:
4 i7rr 5
5
6
6
6
6
6
Endorsed............................................. 5
47
/± 4'Ml
6
6
6
6
...
Unendorsed.......................................... 5
4*4 5
Loans secured by prime stock exchange
collateral or other current collateral:
6
5
6
6
7
6
Demand................................................ 6
5*4 6
5J4 6
■6J4
6
5
6
6
5
6
7
6
7
3 months ............................................ 6
S]/2 6
6
6
6
5
6
7
6
5
ey2
3 to 6 months...................................... 6
Sy2 6
6
5
6
...
...
Cattle loans......................................... ............. 6
5)4 6
7y2 6
7'A
Commodity paper secured by warehouse
6
6
6
5
6
/
2
5/2 6
7
receipts, etc..................... , ............. ........... 6
6 * 6 ■
7V2
Loans secured by Liberty Bonds
6
6
7
6
6 .
7
4^4 6
and Certificates.................’........................ 6
434 5^
Commercial paper dealers report a strong demand with rates at 5 /% for the best grades of paper and a few offerings
at 524%.
The bond market is very dull. There are practically no new corporation issues and even tax-exempt
municipals are being sold at rates to yield the investor higher returns than last month.
In O ctober the Federal Reserve Bank of St. Louis discounted a total o f $220,286,019.71 of paper for
223 different member banks, which is an increase of $11,921,319.57 over the amount of paper discounted dur­
ing September, and an increase o f eighteen in the number of banks accommodated.
Oh Novem ber 7th the Federal Reserve Bank increased its rates on all fifteen-day paper and on paper
o f longer maturity when secured by Liberty Bonds, Victory Notes or 4 y2% Certificates of Indebtedness.
The rates in effect on N ovem ber 19, 1919, were as follow s:
MEMBER BANKS' COLLATERAL NOTES:
..
Secured by Liberty Bonds, Victory Notes, or 4^2% Certify
cates of Indebtedness..........................................................................
...
Secured by W ar Finance Corporation B onds., i ............................................
..
..
R E D IS C O U N T S :
..
Secured by Liberty Loan Bonds, Victory Notes, or 4 ^ %
Certificates of Indebtedness........................... ..............................
..
..
Commercial Paper.
..

15 days
and less
4\i%

16 to 60

61 to 90

days
........

days
.........

4/ %
5/>
5/>% ”
4 t/,%

.....
.....
.

4^4%

4y4%

4]>4%

f / 2%
5*4%
434%

4^%
53/4%
. ' 4Va%
4^4%
4 y2%

4y2%
5 y2%
4 / 2%

Trade Acceptances.........................................................................................
..
4 / 2%
Bankers' Acceptances purchased at the market rate, subject to agreement.

...

.

4 y2%

91 days to
6 months

.....
'

"
' '

____

5y2%

T h e condition o f the banks in this D istrict at the present tim e, and the changes during the past m onth,
are reflected in the fo llo w in g com parative statem ent, sh ow in g the principal resources and liabilities o f m em ­
ber banks in St. L o u is, L o u isv ille, M em p h is, L ittle R ock and E v a n s v ille :
Nov. 7,1919__________ Oct. 3,1919
Number of Banks reporting..........................................................................................................................
35
^5
United States Bonds to secure circulation............................................................................................... $ 17,154,000
$ 17.154,000
Other United States Bonds, including Liberty Bonds........................................................................
14,935,000
15,813,000
United States Victory N otes..........................................................................................................................
7,105,000
8,933,000
United States Certificates of Indebtedness...............................................................................................
19,097,000
24,129,000
Total United States securities owned.......................................................................... .......................

58,291,000

66,029,000

Loans secured by United States Bonds and Certificates...................................................................... 28,187,000
Loans secured by stock and bonds, other than United States securities....................................... 144,605,000
All other loans and investments.................................................................................................................... 293,983,000

29,847,000
135,101,000
283,454,000

Total loans and investments.................................................................................................................... 525,066,000

514,431,000

Reserve with the Federal Reserve Bank................................................................................................... 41,822,000
Cash in vault........................... .............................................................................................................................. 11,205,000
Net Demand deposits on which reserve is computed.......................................................................... 330,490,000
Time deposits.......................................................................................................................................................... 106,615,000
Government deposits...........................................................................................................................................
6,501,000

40,435 000
10,608*000
312,086^000
102,338,000
8,537,000




The volum e o f individual check transactions in this District during the past month is indicated by
the follow ing comparative table, compiled from information received from the clearing houses in the cities
sh ow n :
Weeks ended— Oct. 15
St. Louis.............................................................................................. $155,773,000
Louisville................. ............................................................................
32,708,000
Memphis...........................................................................................
42.099,000
Little Rock..........................................................................................
13,097,000
Evansville.............................................................................................
4,647,000

Oct. 22
$166,686,000
34.653,000
42,007,000
11,762,000
4,620,000

Oct. 29
$135,102,000
30,651,000
40,280,000
9,897,000
4,053,000

Nov. 5
$145,991,000
34,861,000
43,558,000
10,335,000
4,416,000

The resources and liabilities of the Federal Reserve Bank of St. Louis on N ovem ber 14, 1919, as com pared to a month ago, and a year ago, are shown in the follow ing statement:
R E SO U R C E S:

Oct. 10,1919
.$ 3,256,000
. 16,409,000

Nov. 14,1919
$ 6,495,000
12,700,000

Nov. 15,1918
$ 2,111,000
29,236,000

.
.
.
.

19,665,000
5,081,000
54,434,000
5,640,000

19.195.000
6.870.000
75.135.000
4.737.000

31.347.000
233,000
46.173.000
3,338,000

.
.

84,820,000
5,954,000

105,937,000
4,844,000

81,091,000
2,127,000

.

90,774,000

110,781,000

83,218,000

.
.

58,095,000
32,189,000
7,343,000

43.055.000
21.192.000
28.581.000

51.910.000
29.613.000
3,102,000

.
.
.

97,627,000
1.153,000
17,068,000

92.828.000
1.153,000
17.076.000

84,625,000
1.153.000
5.070.000

. 115.848,000

111,057,000

90,848,000

691.000
74,952,000
811.000
589,000

691.000
69,108,000
531.000
247.000

49,038,000
241,000
1,421,000

R E S O U R C E S ...................................

.$283,665,000

$292,415,000

$224,766,000

L IA B IL IT IE S :
Capital paid in............................................................
Surplus.................... .........................................................
Government deposits...................................................
Due to members— Reserve Account.....................
Deferred availability items.....................................
Other credits..................................................................

4,030,000
2,589,000
3.128.000
67,050,000
■ 58,648,000
3.851.000

$

$

Gold with Federal Reserve
Gold Redemption Fund. . . .
Total gold reserve.

Bills discountedBills discounted- -All

Total earning assets.........................................
Bank premises.......................................... ....................
Uncollected items and other deductions from £
5% redemption fund against F. R. Bank notes.
All other resources....................................................
TOTAL

F. R. Ban
All other
T O T A L L IA B IL IT IE S .




.

$

,

4,038,000
2.589.000
2.158.000
68.575.000
54.926.000
3.944.000

3,785,000
17,458,666
51.615.000
33.102.000
217,000

132.677.000
126.438.000
16,666,000
1,265,000

129.603.000
138.282.000
16,256,000
1,647,000

102.392.000
111.636.000
4.292.000
2.661.000

$283,665,000

$292,415,000

$224,766,000