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FE D E R A L R ESER VE B ANK O F ST. LO UIS. 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 A F T E R N O O N O F D E C E M B E R 2 6 , 1 9 1 9 W IL L IA M C H A IR M A N OF THE BOARD MCC. AND M A R T IN , FEDERAL RESERVE AGENT The resumption of soft coal mining operations has relieved the tension caused by the nation-wide strike of the organized miners. W hile the shortage of coal and the measures to offset it necessitated certain tempo rary econom ic readjustments, the effects on business generally were less disturbing than had been antici pated. Some firms had sufficient stocks of coal on hand, some supplemented their use of coal with fuel oil, and other were fortunately situated in parts of the District where natural gas is obtainable. Labor difficulties are less noticeable within this District than they have been for several months past. The strike appears to have cleared the atmosphere by emphasizing the fact, which has been increasingly apparent to the more conservative and enlightened elements of capital and labor, that the interests of each are bound up with the interests of all and that any breakdown in the production-consumption cycle will be felt by all the community. Iligh prices are exerting a restraining influence on buying. Stores which report increases in their sales as compared with last year say, in many cases, that these increases are in the value of their transactions rather than in the volume of merchandise sold. A ccording to the Government’s estimate as of December 1st, the acreage of winter wheat planted in the seven States in this District is approximately 35% less than last year. M oreover, the condition of the wheat, due largely to the ravages of Hessian fly, is estimated to be from 3% to 22% below the condition on December 1, 1918. As a result of heavy rains in the southern part of the District much cotton still remains unpicked, hence settlements with tenants have been postponed and normal spending has been deferred. The spot cotton market is quiet— a not unusual condition at this season, when spinners are taking inventory of their stocks. Collections continue to be good, though the extremely wet weather in the South and curtailment of* buy ing in mining districts have delayed payments somewhat. A comparison of the statements of the Federal Reserve Bank of St. Louis for November 14th and D e cember 12th shows a decrease of about $7,000,000 in discounts secured by war obligations and an increase of about $10,000,000 in discounts otherwise secured. There is a good demand for money, and deposits in the banks are increasing. Tim e and demand depos its show an aggregate increase since November 14th of approximately $12,000,000 for the 35 reporting banks in this District. M A N U F A C T U R IN G — A few plants, such as those manufacturing glass and clay products, were com pelled to shut down on account of the fuel shortage. These are exceptional cases, however, and most factories managed in one way or another to meet the difficulty. Restricted train schedules, which resulted in some freight congestion, were perhaps the most serious element in the situation. Manufacturers of boots and shoes say their business is steady. A s has been the case for the past several months, they have larger orders on hand for future delivery than they have ever had before. The demand is still strong for certain classes of goods, though many dealers are pretty well stocked up. Clothing manufacturers say their orders are very large, some stating that the demand for futures ex ceeds normal. N ovem ber business was about on a par with that in October. Firms anticipate a good business in 1920. There are still complaints of a shortage of skilled labor. Due to building activity and to the accumulated demand resulting from curtailed production during the coal strike, manufacturers of clay products say they have orders on hand to run them from sixty to ninety days. Manufacturers of electrical supplies say their business was in some cases as much as 100% beyond that in Novem ber last year and 50% ahead of last month’s. There is an exceptionally good demand for all kinds of electrical specialties. Production is hampered in a measure by inability to get raw materials. Saw mills have been handicapped by a shortage o f logs, due to transportation difficulties, but now their needs are being supplied in large measure. W H O L E S A L E A N D JO B B IN G — The wholesale trade situation is considerably mixed. Some dealers report large increases in the value of their sales as compared with N ovember last year, in some cases over 200% ; others engaged in the same line of business report decreases up to 33%. Orders on hand for future delivery in most lines are reported to be larger than usual. The unfavorable wreather conditions in parts o f the District, which have increased the stocks held by retailers, have naturally decreased the demand from wholesalers. Business generally, however, is good and was not seriously affected by the coal strike. Some wholesale dry goods houses report very large increases in the value o f their sales as compared with last year, which is due in great measure to the desire on the part of buyers to avoid advancing prices. One dealer in commenting on this situation sa y s: “ Our spring lines have been sold up and withdrawn from sale. W e are offering certain lines of fall merchandise, such as blankets, underwear, hosiery, knit goods and napped goods for delivery in the spring months and they are being taken freely. This shows the inclination of the merchant to buy his merchandise ahead of time with a view of heading off any advance rather than buying these goods when he actually needs them.” Another concern states that the prices that have been made for fall are higher than those for spring. W holesale drug houses generally report increases in value of their sales as compared with 1918. One concern, however, reports a 10% decrease, due to the shortage of a certain product which forms a large part of its business. N o basic changes in raw materials or in patented compounds are reported. Orders on hand for future delivery are beyond normal in some cases. Dealers in electrical supplies say their business is slightly less active than it has been. One concern says the coal strike cut down its sales 25% . Cotton factors complain of the exchange situation wrhich is unfavorable to exports. The high price o f cotton is a favorable factor affecting them. W holesale grocer companies for the most part report increases over October. During the coal strike, however, buying was somewhat checked in mining towrns. Orders on hand for future delivery are still below normal, one company reporting that it has none. R E T A IL — Shorter store hours, part of the regulations to conserve coal, do not appear to have materially interfered with retail purchases. H owever, in the rural districts, extremely wet weather, which caused bad roads, has hampered buying. A s a result of this condition, stores catering to this class of trade have built up their stocks considerably. O w ing to the realization on the part of the public that there was a strong demand for merchandise, holiday buying began earlier than usual this season. Some firms say their November sales increased over O ctober as much as 11%. Department stores report increases in their sales of from 25% to 30% over Novem ber last year, but this is largely accounted for by the higher prices. In most lines the volume of sales is not materially larger than last year, in some it is less. In ready-to-wear clothing and in some other lines buying is retarded by the high prices, but dealers believe that purchases will be made later on when the needs become more pressing. They anticipate a good business in 1920. A G R IC U L T U R E — A s was previously mentioned in this bulletin, the area sown to winter wheat has been materially reduced from last year’s ow ing to the unfavorable weather which has interfered with seed ing. The acreage sown in 1919 and 1918, according to the Government’s Decem ber 1st estimate for the several States in this District, and the condition o f the crop on December 1st, 1919 and 1918, are shown in --- — _ .. ing 0 ta ble: the follow Autumn 1919 (Preliminary) Acres ............................................. 156,000 Arkansas.............................. .. Illinois...................................................... ............................................ 2,404,000 Tennessee............................................... Autumn 1918 (Revised) Acres 346,000 3,434,000 2,882,000 1,057,000 38,000 4,300,000 822,000 T O T A L ................................................ 12,879,000 ............................................. 719,000 ............................................ 2,580,000 Autumn 1919 Compared to Autumn 1918 45% 70% 68% 68% 40% 60% 60% Condition Dec. 1 1919 1918 Ten Year Average 81% 99% 82% 100% 79% 101% 80% 98% 88% 91% 84% 103% 75% 94% 90% 91% 90% 90% 90% 90% 90% The acreage for the seven States in this District has been reduced 4,552,000 from that of last year, or about 35%. The condition of the wheat is much below last year and even below the ten-year average. The poor condition is largely due to the ravages of Hessian fly, which is said to be worse this year in some parts of the District than it has ever been. Husking and cribbing of corn has been going on rapidly and many yields are better than had been ex pected. There has been considerable trouble in securing huskers, and in some sections they are being paid as high as $7.50 a day with board and lodging. The movement of corn is slow. Farmers appear to be hold ing for better prices. Heavy rains in the South have interfered with the picking of cotton and have lowered the quality o f cotton still unpicked. In the higher sections of the District as much as 90% of the crop is already picked, while in the valleys from two-thirds to three-fourths has been gathered. The Government’s estimate, as of December 1st, places the yield of cotton in 1919 for the States of Arkansas, Mississippi, Missouri and Ten nessee at 2,134,000 bales, which is 471,250 bales less than 1918 and 316,027 less than the 1913-1917 average. The price per pound of lint cotton to producers December 1, 1919, was 35.7 cents, compared with the D e cember, 1918, price of 27.6 cents. Although the yield o f tobacco is large, the quality is reported as variable. Prices are high. B U IL D IN G — During November, permits issued for new buildings were considerably in excess of the preceding month and much larger than for the corresponding month last yeari Comparative figures for November are as follow s: St. Louis............................... ............................................................................................................ Louisville.............................................................................................. ........................................... Memphis................... ................ ........................................................................................................ Little Rock............................................................................................................................... .. 1919 Permits Cost 590 $2,834,670 146 373,650 129 495,000 I ll 214,773 November 1918 Permits Cost 265 $261,595 61 149,575 33 337,120 43 60,435 L IV E ST O C K — The report of the St. Louis National Stock Yards for November, 1919, shows increases in all receipts and shipments as compared with the corresponding month last year. The comparative figures are as follow s: Cattle November: 1919 191b Receipts....................................... ........... 155,575 144,674 59,070 Shipments....................... . 40,703 Hogs __________ Sheep 1919 1918 1919 1918 311,761 305,388 56,409 45,499 138,141 72,848 10,272 3,730 Horses and 1919 31,204 27,726 Mules 1918 24,819 24,242 W ith the exception o f a few scattered cases of disease, live stock is in good condition throughout this District. It is expected that farmers will do considerable slaughtering this year. R E C E IP T S A N D S H IP M E N T S O F IM P O R T A N T C O M M O D IT IE S A T ST. L O U IS as reported by the M erchants’ E xch an ge: NOVEM BER ________ Receipts_______________ ___________ Shipments_______ 1919 1919 1918 1918 459,890 221,680 573,920 225,530 1,440,590 3,389,478 1,968,893 3,165,780 1,068,220 1,335,267 676,470 1,957,331 1,659,460 2,898,000 2,282,060 2,026,070 249,500 268,oOO 191,240 188,520 629,140 354,300 367,810 617,840 4,813 12,316 7,677 10,006 23,164,600 5,271,300 27,606,000 5,587,000 24,200,700 2,098,200 29,608,200 3,005,900 2,256,900 194,000 8,962,500 3,029,900 2,616,300 7,896,200 3,888,500 2,733,600 Lumber, cars. L A B O R — M ost of the soft coal miners in this District have returned to work and production is rapidly returning to normal. Labor is well employed and at high wages. Many firms have paid bonuses to offset the effect of the high cost of living on those \yhose salaries have not kept pace with prices. There does not appear to be as much unrest as during the preceding months. There are no serious strikes in this District at the present time. The outlook seems to augur well for the beginning of a new year. B A N K IN G — There is still a good demand for money. Banks report that due to the fact that cotton is m oving many cotton loans are being paid off. The coal strike did not make itself seriously felt in financial circles in this District. Rates in some instances are higher than in October. The high, low and customary interest rates pre vailing in St. Louis, Louisville, Memphis and Little Rock, from November 16th to December 15th, as re ported by banks in those cities, were as fo llo w s ; H. St. Louis L. C. H. L. Louisville H* L. c . H. Customers’ prime commercial paper: 4 to 6 months......................................... Prime commercial paper purchased in open market: 5 Memphis Little Rock H. C. H* C. L. 6 6 5. 5 5y2 6 6 6 Si4 sy2 6 6 6 6 6 $l/2 sy2 6 6 534 6 6 5*4 5 5H 5 5 5 5 4 y2 434 4H 4 U 5H m 5“ 6 6 6^2 6 5% 6 5*4 6 5U 6 sy2 5H 6 6 6 6 6 5/2 6 6 6 6 6 6 6 6 6 6 6 6 5r /4 6 6 6 6 4H 5*4 6 5 sy2 6 4H . 6 Bankers’ acceptances of 60 to 90 days: 5/2 .s y 2 6 Loans secured by prime stock exchange collateral or other current collateral: Commodity paper secured by warehouse receipts, etc........................................................ Loans secured by Liberty Bonds and L. C. 5/2 5t/4 6 6 6 7 ?y2 6 6 6'/2 7 6 sy4 5y4 6 6 6** 6 6 6 6 6 6 5# 6 sy2 6 6 6 6 6 8 7y2 7y2 yy2 6 6 6 7 6 7'A 6y2 7 7 6 6^2 6 5 6 6 6“ 6-7 7 7 7y2 Commercial paper dealers say their business was particularly good during the first tw o weeks of Decem ber, but that it is somewhat quieter now. The prevailing rate is 6% with a few choice offerings, at 5j4% . The demand is mostly from country banks. City banks, which have not been heavy buyers, are purchasing still less, since the call upon them for m oney to pay taxes. IN N O V E M B E R the Federal Reserve Bank of St. Louis discounted a total of $180,110,763.78 of paper for 211 different member banks, which is a decrease of $40,175,255.93 from the amount of paper discounted during O ctober and a decrease o f twelve in the number of banks accommodated. On December 19, 1919, the Federal Reserve Bank of St. Louis established the follow ing discount rates: M EM BER BANKS’ COLLATERAL NOTES: Secured by Certificates of Indebtedness................................... .................... Secured by Liberty Loan Bonds or Victory N otes................................... Secured by W ar Finance Corporation Bonds............................................. Secured by Bills Receivable....................... ....................................................... R E D IS C O U N T S : Secured by Certificates of Indebtedness........................................................ Secured by Liberty Loan Bonds or Victory N otes................................... Secured by W ar Finance Corporation Bonds........................................... . Commercial Paper..................... ............ . . .......................................................... ’ Agricultural or Livestock Paper........................................................................ Trade Acceptances*................................................................................................ 15 days and less * . . . . . . . 16 to 60 days 61 to 90 days 4 y2% 434% 5 34% 434% 434% 4y2% 4y2% 434% 5 34% 434% 4y4% 4y2% 91 days to 6 months 4*4% 4^% 534% 434% 4y2% 434% 5 34% 434% 434% 4y2% 5^% The condition of the banks in this District at the present time, and the changes during the past month, are reflected in the follow ing comparative statement, showing* the principal resources and liabilities of mem ber banks in St. Louis, Louisville, Memphis, Little R ock and E vansville: Dec. 5, 1919 Nov. 7, 1919 35 $ 17,154,000 14,068,000 5,550,000 13,779,000 35 $ 17,154,000 14,935,000 7,105,000 19,097,000 50,551,000 58,291,000 30,644,000 151,300,000 303,613,000 28,187,000 144,605,000 293,983,000 Total loans and investments...... ........................,........................................ . ................................. 536,608,000 525,066,000 44,420,000 12,502,000 337,534,000 111,664,000 13,037,000 41,822,000 11,205,000 330,490,000 106,615,000 6,501,000 Number of Banks reporting. Total United States securities owned.......... ...................... ................................................... .. All other loans and Cash in vauli Net Demand Time Deposi Government The volume of individual check transactions in this District during the past month is indicated by the following comparative table, compiled from information received from the clearing houses in the cities sh ow n : Nov. 19 $168,099,000 38.625.000 53.091.000 11.734.000 5,526,000 Weeks ended— Nov. 12 St. Louis................................................................................................ $152,494,000 Louisville............................................................................ .................... 36,888,000 Memphis......................................... . . . . . .............................................. 39,505,000 Little Rock............................................................................................ 10,008,000 Evansville............................................................................................... 5,745,000 Nov. 26 $152,713,000 28.432.000 44.478.000 10.406.000 4,409,000 Dec. 3 $145,924,000 40.477.000 40.709.000 11.381.000 4,415,000 St. Louis on December 13, 1919, as com statement: R E SO U R C E S: Nov. 14,1919 . $ 6,495,000 . 12,700,000 Dec. 13,1918 $ •$ 2,970,000 16,340,000 2,249,000 26,328,000 19,195,000 6,870,000 75,135,000 4,737,000 19.310.000 6.623.000 74.195.000 5.971.000 28.577.000 233,000 52.983.000 3,306,000 105,937,000 4,844,000 106,099,000 3,367,000 85,099.000 2,632,000 Total Reserves................................................•.............................................................. 110,781,000 109,466,000 87,731,000 . . . 43,055,000 21.192,000 28;581,000 36.126.000 31.270.000 31.971.000 54.494.000 23.991.000 6,926,000 . 92,828,000 1,153,000 17,076,000 99.367.000 1,153,000 17.138.000 85,411,000 1.153.000 5.568.000 . 111,057,000 117,658,000 92,132,000 691.000 69,108,000 531.000 247.000 691.000 68,236,000 576.000 290.000 42,ii2,666 268,000 1,480,000 292,415,000 296,917,000 223,723,000 4.038.000 2.589.000 2.158.000 68,575,000 54,926,000 3.944.000 4.060.000 2.589.000 5.676.000 67.280.000 53.137.000 3.855.000 3.798.000 7,663*000 56.432.000 30.098.000 2.496.000 129.603.000 138.282.000 16.256,000 1,647,000 129.948.000 142.710.000 15,692,000 1,918,000 96,689,000 115,110,000 5.217.000 2.909.000 T O T A L L I A B I L I T I E S ............................................................................................$292,415,000 $292,415,000 $296,917,000 $223,723,000 Gold with foreign agencies. Gold with Federal Reserve Gold Redemption Fund----- . . . Dec. 12,1919 Legal tender notes, silver, etc.................................................................................. Bills discounted— Secu Bills discounted— All U. S. Government Bonds. . Total earning assets. Bank Premises....................................... . ........................ .................. Uncollected items and other deductions from gross deposits. 5% Redemption Fund against F. R. Bank notes......................... All other resources........................... ..................................................... . T O T A L R E S O U R C E S ............................................................................................ . L IA B IL IT IE S : Government deposits........................... .. Due to members— Reserve Account. Other credits. F. R. Bank Notes in actual circulationAll other liabilities....................... ................ .
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