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FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REVIEW OF BUSINESS CONDITIONS IN EIGHTH DISTRICT Released for Publication On and After the Afternoon of March 31, 1926 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent H IL E some slow ing down in business as compared with the preceding tw o or three months was reflected in reports covering activities in this district during the past thirty days, the total volume was above that of the cor responding period last year. The improvement was represented almost exclusively in sales for imme diate delivery, a majority of the lines investigated reporting no betterment whatever in future busi ness. Generally order books contained a smaller volume of business for forward delivery than at any similar period in the past several years. This was true of both manufacturers and wholesalers, and to a large extent, the former are making up few goods in excess of what they are able to apply on actual orders. The recent break in the security markets, and price declines in a number of basic materials have served to accentuate the policy of distributors and ultimate consumers to buy only what they require for immediate needs. W Immediate requirements, however, are unusu ally large, as indicated by freight movement of the railroads, retail sales statistics, debits to checking accounts, and current changes in com m odity stocks. There has been no appreciable contraction in pur chasing power in consum ing channels, and the employment situation, except in a few localities, continues very satisfactory. A s a result of the con servative buying policy, keen competition and efforts to hold up sales volume, there is an increas ing number of complaints of narrowing profit mar gins. Filling and shipping numerous small orders and other added service consequent to the changed practice in distribution of merchandise have sub stantially increased costs. W eather conditions were on the whole unfavor able for the best results in the retail trade, low tem peratures extending through the middle of March having a tendency to retard the m ovement of sea sonal merchandise. This handicap, however, was in a measure offset by the early Easter date, and pur chasing to fill holiday requirements assisted materi ally in lifting the total sales volume. Sales in Febru ary of the leading department stores in the district were 11.4 per cent larger than for the same month in 1925, and small gains were recorded by retail shoe, men’s furnishing goods stores, and several other lines. Preliminary work on farms was delayed by the cold weather, and purchasing of groceries, provisions and other supplies in the South was below the usual volume at this time of year. There was a further falling-off in new orders and unfilled business in the iron and steel industry, but shipments continued heavy and operations were at about the same average rate as during the pre ceding thirty days. Further large gains were made in the distribution of automobiles as compared with the year before, and increases were reported in February sales over those of the same month in 1925 by the boot and shoe, clothing, drug and chem ical, dry goods and electrical supply industries. Decreases were reported in furniture, groceries, flour, stoves, lumber and fuel. Activities in the building industry were well sustained, the dollar value of February permits in the five largest cities of the district showing a gain of 9.9 per cent over the January total. The trend of prices was downward, the Federal Reserve Board’s index of selected commodities standing at 154.2 on March 5, against 160.2 on February 5 and 166.5 on March 6, 1925. A m ong the basic commodities registering lower levels were cotton, cereals, fuels, rubber, w ool, pig iron, nonferrous metals, and sugar. Fluctuations in grain prices were broad and erratic. Between February 15 and March 15 wheat futures in the St. Louis market moved over a range of 10c to 16c, closing figures on the latter date representing net losses of 5c to 8j4c. Cash values were relatively stronger than the options. Conditions in the coal market were distinctly unsatisfactory. W ith the approaching end of the winter demand, the number of mines in the Illi nois, Indiana, and Kentucky fields reducing opera tions was on the increase. The trend of prices was downward, though as a general rule the decline was not drastic. Operators in the principal fields were strongly resisting the downturn, claiming that low er levels would result in substantial losses. P roduc tion of bituminous coal was being curtailed to meet existing market conditions, but despite this fact difficulty was experienced in disposing of current outputs, and there was a further increase in the number of “ no bills” and loaded cars on track. The general demand for steam coal was quiet, and ton nage taken by the railroads was disappointing. In both the large cities and the country the domestic demand was slow, and centered chiefly in low grade coals. Shipments of anthracite increased somewhat, but despite the slack demand for bituminous coal, current orders for anthracite were reported no bet ter than the seasonal average. This was interpreted by dealers as meaning that hard coal substitutes used during the recent strike have gained firm foot hold. Operators, on the other hand, claim that the situation is due to desire on the part of dealers to dispose of their stocks of substitutes before press ing sales of anthracite. T he movement of coke con tinued active, with the cold weather in late Febru ary and early this month serving to maintain the demand for domestic sizes. Total output of bitu minous coal for the country as a whole during February was estimated at 46,582,000 tons, with a daily average of 1,949,000 tons. Compared with the daily rate in January, which was 2,121,000 tons, February showed a decrease of about 8 per cent. Railroads operating in the district reported freight traffic handled during the period under re view as being slightly below the same time last year, but considerably in excess of the seasonal average during the past several years. The m ove ment of merchandise and miscellaneous freight continued the steady gains of recent months. For the country as a whole loadings of revenue freight during the first nine weeks of the current year were 8,108,459 cars, against 8,079,996 cars for the corres ponding period last year and 7,926,089 cars in 1924. Ample motive pow er and equipment were supplied to accommodate all offerings, there being practical ly no car shortage reported. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 205,015 loads in February, against 217,952 loads in January and 194,089 loads in February, 1925. During the first nine days of March the interchange amounted to 67,672 cars, which compares with 63,989 loads dur ing the first nine days of February, and 65,232 loads during the corresponding period last year. Passen ger traffic of the reporting roads decreased 0.7 per cent in February as compared with the same month in 1925. Estimated tonnage of the Federal B arge line between St. Louis and New Orleans for Febru ary was 50,500 tons, against 57,996 tons (revised figures) in January and 95,907 tons in February, 1925. Reports relative to collections during the past thirty days showed more irregularity than during the preceding month. In the country heavy roads and inclement weather had a tendency to retard settlements, and backwardness was reported in the coal fields and some sections of the cotton areas. In the tobacco and rice districts efficiency was high, good liquidation being reported by both merchants and banks. W holesalers in the large centers re ported February settlements well up to expecta tions, and about on a parity with a year ago. Collec tions of retail accounts in the large cities were in the main satisfactory, though merchants specializ ing in installment business reported results slightly less satisfactory than during the tw o preceding months. Questionnaires addressed to 456 represen tative interests in the various lines throughout the district showed the follow ing results: Excellent Good Fair Poor 8.2% February, 1926........... 3.5% 27.1% 61.2% January, 1926............ .2.6 36.9 54.1 6.4 February, 1925........... 6.0 32.0 54.0 8.0 Commercial failures in the Eighth Federal R e serve District during February, according to Dun’s, numbered 100, involving liabilities of $3,186,884, against 136 defaults in January with liabilities of $2,116,266, and 107 failures for $3,343,246 in Febru ary, 1925. T he per capita circulation on March 1, 1926, was $41.84, against $41.24 on February 1, 1926, and $42.28 on March 1, 1925. M A N U F A C T U R IN G A N D W H O L E S A L E A utom obiles — Production of automobiles for the country as a whole during February turned sharply upward, and was the highest since last November. The total showed a gain of 18.8 per cent over January, and 30.6 per cent over February, 1925. Manufacturers reporting direct or through the National Autom obile Chamber of Commerce built 334,502 passenger cars in February, against 283,245 in January and 252,520 in February, 1925. The output of trucks by the same companies in February was 39,763, against 31,734 in January, and 33,492 in February last year. Distribution of automobiles continues on a large scale and for the thirteenth successive month sales of new cars in this district showed gains as compared with the corresponding month in the pre ceding year. The demand extends fairly evenly through all lines of machines, but with the cheap and tnedium-price makes show ing relatively the largest gains. Sales of trucks developed marked improvement, particularly the lighter vehicles for delivery service in the large cities. A utom obile shows held in St. Louis and other centers were re ported unusually successful, and resulted in a large number of sales for cash, which fact accounts for a slight reduction in the percentage of cars sold on time payment as compared with the past several months. There was the usual seasonal increase in cars in dealers' hands, but the number held is not excessive and is somewhat smaller than the average for the corresponding period during the preceding three years. H eavy transactions on new cars re sulted in an appreciable increase in stocks of used cars, and sales o f secondhand vehicles are reported increasingly difficult to effect. Sales of new cars in February by 320 dealers scattered through the district were 24.7 per cent larger than for the same month in 1925, and 117.1 per cent in excess of the January total this year. The accessory trade is reported satisfactory, sales showing a gain of 18.2 per cent over the corresponding period in 1925. No change w orthy of note occurred in the tire situation, purchasing by dealers and the public continuing on a hand-to-mouth basis. Boots and Shoes — February sales of the 11 reporting interests were 38.7 per cent larger than in the corresponding period in 1925, and 14.0 per cent under the January total this year. Stocks on March 1 were 2.6 per cent larger than on February 1 and 15.2 per cent larger than the total on March 1, 1925. T he volum e of current orders is holding up well, but sales for future shipment are consider ably under the same period last year. Great stress is still being laid upon styles, particularly in the case of wom en's and children's wear. Some im provement was noted in the demand for men's work shoes. Prices of finished goods showed no change during the past thirty days, and the average was about the same as at this time last year. Raw materials showed a further downward trend. Oper ating schedules were reduced by several o f the lead ing interests, and the average was about 82 per cent of capacity, against 95 the month before. Clothing — Purchasing of spring merchandise during the latter part of February was slow, both on men's and wom en's wear. W eather was against a heavy movem ent of seasonal goods, and uncer tainty relative to style and fabric trends and prices were contributing factors to the hesitancy on the part of buyers. D uring the past tw o weeks, h ow ever, more favorable weather and the necessity for providing for Easter requirements have stimulated ordering, and there have been numerous requests for expedited shipments of goods previously pur chased. Manufacturers were pushing production to meet the current demand, but making up very little stock for which orders had not been booked. Sales of the 10 reporting interests in February were 54.4 per cent larger than during the same month in 1925, and 27.8 per cent under the January total this year. February sales of men’s hats were 8.4 per cent larger than during the same month in 1925. Drugs and Chemicals— Advance sales of insect icides, spraying materials and kindred lines showed a fair increase over a year ago, and further im prove ment was noted in the demand for heavy chemicals from the manufacturing trade. There was also a broadening in the demand for remedial drugs and proprietary preparations, but generally purchasing by the retail trade continues along conservative lines and covers only immediate requirements. O r dering of Easter holiday goods was in satisfactory volume, but sales of soda fountain supplies were below those of the corresponding month last year. Collections were reported less satisfactory than during the preceding two or three months. Febru ary sales of the 11 reporting interests were 1.9 per cent larger than in the same month last year, and 4.8 per cent under the January total this year. D ry Goods — Sales of the 11 reporting inter ests during February were 13.7 per cent larger than in January, and 1.1 per cent in excess of the Febru ary, 1925, total. Stocks on March 1 were 11.9 per cent smaller than thirty days earlier and 6.4 per cent under the corresponding date in 1925. The recent break in the raw cotton market, coupled with price declines in cotton fabrics, has caused hesita tion in purchasing, particularly for forward require ments. Retail stocks, however, are generally light, and the volume of current ordering is large and indi cative of a heavy movement of goods into consump tive channels. Since the first of this month there has been substantial improvement in the demand for dress goods of all descriptions, except woolens, and ordering of knitted garments and hosiery is more satisfactory. Unseasonably cold weather mili tated against the distribution of spring lines. Electrical Supplies — T he steady improvement noted in this classification in recent months was continued during the past thirty days. Sales of the 12 reporting interests during February showed a gain of 10.1 per cent over the preceding month and of 11.8 per cent over the same month in 1925. There was a rather sharp falling off in sales of radio goods, but this was counterbalanced by a heavier demand for all varieties of materials used in the building trades. Steady growth is reported in the movement of household appliances, and sales of small motors with tw o of the leading producers were the largest ever recorded at this season. Prices on certain radio materials were lower, and the sharp decline on pig lead was reflected in an easier trend in goods based on that metal. Stocks on March 1 were 3.2 per cent larger than on February 1, and 17.8 per cent smaller than on March 1 last year. Flour — Production at the 11 largest mills of the district during February was 266,960 barrels, against 293,724 barrels in January and 283,300 bar rels in February, 1925. Stocks of flour in St. Louis on March 1 were 12.2 per cent less than on Febru ary 1, and 8.3 per cent below the March 1, 1925, total. T he broad fluctuations in cash wheat made for irregularity in the flour trade. In sympathy with the decline in the grain market, flour prices receded rather sharply in late February and early this month, and at the lower levels there was fair buying by the large bakery interests, and jobbers. A better demand from the southern domestic trade was reported, and generally retailers were more disposed to replenish their stocks. In the imme diate past prices have developed a firmer tendency, and ordering has decreased. Shipping directions on old contracts were good. The export demand from Latin-Am erica was well up to the seasonal average, but business with European countries continued at a low level. Mill operation was 60 to 64 per cent of capacity. Furniture — February sales of the 25 reporting interests were 10.9 per cent under those of the same month last year, and 17.6 per cent larger than in January this year. Stocks on March 1 declined 1.8 per cent as compared with February 1, and were 3.1 per cent larger than those on March 1, 1925. Retail distribution during February was below ex pectations, and manufacturers and jobbers report a falling off in their business as a consequence. There has been virtually no deviation from the recent policy of purchasing for immediate require ments only, and stock orders are scarce. Some special lines, notably iron and steel furniture, chairs and office equipment, continued active, but the gen eral run of household furniture, including floor co v erings and draperies, was relatively quiet. Groceries — W hile some improvement in the demand for staples developed, purchasing generally through the line was disappointing, and February sales of the 22 reporting interests were 0.9 per cent smaller than in the same month last year, though 3.3 per cent larger than the January total this year. The delayed agricultural work in the South, occa sioned by cold weather, was reflected in decreased sales in that general region. Results generally in the country were below expectations, and relatively less satisfactory than in the large centers. Retail stocks are of about the proportions usual at this time of year, and retailers are buying on a strictly necessity basis. The movement in quantity of early vegetables and fruits from the South has had a tendency to hold down sales of canned goods. Hardware — Sales of the 12 reporting interests during February were 0.2 per cent larger than in the corresponding month in 1925, and 8.8 per cent in excess of the January total this year. Stocks in hands of the reporting stores on March 1 were 3.6 per cent less than on the same date in 1925, but 11.4 per cent larger than on February 1 this year. W hile the movement of staples continues to hold up well, ordering of spring and early summer goods has been retarded by unfavorable weather. There was some recession in the demand for builders’ hardware and tools, but the general run of shelf hardware was active. Galvanized and granite ware were in better than the usual seasonal demand. Sales of sprayers, sprays, pruning instruments, hand implements, and garden and poultry supplies were satisfactory, and larger than during the correspond ing periods in the tw o preceding years. Iron and Steel Products — In most respects the situation in iron and steel during the past thirty days bore close similarity to the preceding month. A t most mills and foundries activities were main tained at the recent high rate, but shipments were larger than new business placed, and there was a further shrinkage in unfilled orders. Consumers are continuing the policy of purchasing only what they require from month to month, and in turn manu facturers are proceeding cautiously in the matter of raw material commitments. Specifications on goods previously ordered are disappointing, particularly in the case of the railroads. Plants specializing in gray castings report a falling off in new business, and have planned to curtail operations unless im provement develops. Implement makers are still working at close to capacity, and report sales for spring delivery in excess of a year ago. Stove manu facturers have experienced a decline in business, and a number of the more important interests have cut down their operations to only three days per week. Some improvement was noted in the demand for standard structural shapes and reinforcing con crete bars, and in the immediate past fabricators of structural steel have received a fair volume of or ders, mainly, however, for small tonnages. Prices of finished and semi-finished materials showed no important changes. There is strong resistance by consumers to higher prices, and recent efforts of producers of plates, shapes and bars to advance their quotations have met with indifferent success. The movement of wire and wire products has been slow, but a better demand has developed for tubular goods, especially those used in the oil fields. Sheets and~ tin plates continue firm, with a fair volume of ordering for second quarter delivery. Production of pig iron in February reflected interruptions grow ing out of the coal strike, and on a daily basis dropped 2.57 per cent under January and was the lowest February rate since 1922. The total output, 2,921,449 tons, compared with 3,319,789 tons in January and 3,214,067 tons in February, 1925. Steel ingot production in February fell 1 per cent below January, but reached the highest February daily rate on record. For the first tw o months of the year, ingot production is ahead of 1925 by 1.9 per cent. The market for pig iron was dull, with pur chasing on a necessity basis and little interest being exhibited in second quarter needs. Prices were quotably unchanged, but the trend was lower. Prices of scrap iron and steel sustained a further decline, and touched new low points on the down ward movement. Lum ber — The wholesale demand for lumber was less active than during the preceding thirty days, but in the immediate past improved building weather has increased the volum e of inquiries and generally more interest is being shown. Prices of southern pine declined slightly, especially on dimension and flat grain flooring. This weakness developed in spite of low mill stocks, and so little dry lumber that comparatively few transit ship ment are com ing out. Commission interests are experiencing difficulty in placing tendered orders, both on account of stock conditions and prices wanted by prospective purchasers. The decline in hardwood prices was considerably less marked than heretofore, and consumers are placing orders for second quarter delivery more freely. Furniture manufacturers have curtailed their buying but the demand from automobile and car builders has broadened. R E T A IL T R A D E The condition of retail trade is reflected in the follow ing comparative statement showing the ac tivity of department stores in leading cities of the d istrict: Net sales comparison Stocks on hand, Stock turnover Feb. 1926 2 months ending Feb. 28, 1926 Januarjr 1, comp, to Feb. 28, 1926, to comp, to to Feb. 28, Feb. 1925 same period 1925 Feb. 28, 1925 1926 1925 Evansville ....— 16.5%"' — 12.5% — 12.7% 31.2 31.0 Little Rock....+ 2.8 — 3.9 — 2.2 38.5 39.8 Louisville .... + 1.9 + 2.5 +20.4 50.9 43.8 Memphis .....-j-20.5 + 13.1 39.4 — 7.5 35.9 Quincy .........— 5.3 — 1.9 — 3.2 39.3 37.3 St. Louis.......+ 13.2 8.0 6.2 53.1 52.7 Springfield —-j-14.6 — 5.8 18.1 — 5.0 20.5 8th District....-j-11.4 — 6.7 47.3 47.5 + 4.3 + + C O N S U M P T IO N O F E L E C T R IC IT Y During February consumption of electricity by selected industrial customers of public utilities com panies in the five largest cities of the district in creased 2.7 per cent over the same month in 1925, but was 0.6 per cent under January this year. The loss in the m onth-to-month comparison was due to the smaller number of w orking days in February than January. Gains over February last year were distributed generally through all groups of con sumers. Detailed figures fo llo w : No. of Feb. custom 1926 *K.W.H. ers Evansville ....40 ' 1,033 1,110 Little Rock...35 4,495 Louisville ....67 1,416 Memphis ..... 31 12,391 St. Louis.,..... 88 Jan. 1926 *K.W.H. 995 1,124 4,583 1,718 12,140 20,560 20,445 Totals..... 261 *In thousands (000 omitted). Feb. 1926 Feb. comp, to 1925 Jan. 1926 *K.W.H. + 3.8% 924 — 1.2 1,145 4,440 — 1.9 1,481 — 17.6 11,916 + 2.1 — 0.6 19,906 Feb. 1926 comp, to Feb. 1925 + 11.8% — 3.1 + 1.2 — 4.4 + 4.0 + 2.7 A G R IC U L T U R E In spite of unfavorable weather, fair progress was made in preparing the soil for spring crops, and the amount of work completed is only slightly below the average for this season. Plow ing in the South is well advanced, and seeding of oats is near ing completion. Generally through the district or chards and vineyards have been pruned, but weath er has been inauspicious for initial spraying opera tions. Reports from many sections indicate that fruit growers will spray and cultivate more inten sively this year than ever before. There are scat tering reports of damage to apples from the cold weather, most numerous from the Ozark region, but generally at the middle of March orchards were in better condition than at any similar date in recent years. W heat — U nfavorable conditions during the planting season last fall considered, winter wheat has come through the cold weather in good shape. W hile root grow th is not as strong as might be desired, the plant is healthy, and less than the usual amount of winter killing is believed to have been suffered. During late February and early March there was abundant moisture, and soil conditions are excellent. In the South fields are greening up, and in some counties are being pastured. There are the usual complaints of damage from freezing and thawing and insect pests, but nothing of a serious character has com e to light. On March 1 stocks of wheat on farms in the five principal pro ducing States of the district totaled 14,127,000 bushels, which compares with 10,431,000 bushels on the same date in 1925 and the five-year average (1921-1925) of 19,512,000 bushels. For the country as a whole farm stocks of wheat on March 1 totaled 99,279,000 bushels, against 112,042,000 on March 1, 1925, and a 5-year average of 151,428,000 bushels. Corn — In all States of the district stocks in farmers’ hands on March 1 were larger than on the same date in 1925, and with the exception of T en nessee, exceeded the 5-year average. T he total on March 1 was 502,150,000 bushels, which contrasts with 280,913,000 bushels on March 1, 1925, and the 5-year average (1921-1925) of 375,923,000 bushels. Stocks on farms in the United States on March 1 aggregated 1,318,793,000 bushels, against 759,471,000 bushels on the corresponding date in 1925, and a 5-year average of 1,175,403,000 bushels. Consider able planting of the new crop has been accomplished in the South, and except in the extreme northern counties plow ing and disking has made good pro gress. Generally there is a shortage of good seed corn. Live Stock — N o change worthy of note has taken place in the condition of live stock during the past thirty days, as compared with the similar period immediately preceding. Prices have fluc tuated in sympathy with supply figures, and were in the main satisfactory. T op hogs in the St. Louis market sold at the highest figure since last August. Stocker and feeder cattle were in active demand at the highest prices of the season. Receipts and shipments at St. Louis, reported by the National Stock Yards, were as follow s: Receipts Shipments Feb. Jan. Feb. Feb. Jan. I^eb. 1926 1926 1925 1926 1926 1925 52,462 63,307 44,678 Cattle and Calves..... 88,116 104,917 74,332 Hogs ................... ,....265,058310,464 283,783183,150 189,628 172,164 Horses and Mules..... 10,743 10,011 10,952 11,384 10,028 10,036 Sheep ....................... 29,570 32,781 22,542 13,367 14,292 14,736 Cotton — Rains and low temperatures have in terfered with field work, and preparations for the new crop are not as far advanced as at this time last year. It is too early to form any judgment of acreage, but reports thus far received reflect no evi dence o f intention to reduce, and seed supply and weather will constitute important factors in the area ultimately sown. There was a rather sharp break in cotton prices during the past thirty days, the middling grade in the St. Louis market on March 5 declining to 1 8 ^ c per pound, the lowest since 1922, and com paring with 20c on February 5, and with 25^4c on March 5 last year. Supplies con tinue large, stocks in Arkansas warehouses on March 12 being 491,867 bales, against 139,267 bales on the same date in 1925. The proportion of low grade cotton in last year’s crop was unusually heavy, and the inferior grades are selling at a sharp discount under the better varieties. T obacco — The marketing season in the burley tobacco district is rapidly drawing to a close. Re ceipts have fallen off and quality of late marketed leaf has been inferior. Approxim ately 95 per cent of the crop has been marketed. In the dark tobacco, aircured and one sucker districts delivery to market has been about completed, and most of the houses are closed for the season. In the dark fired districts approximately 70 per cent of the crop has been moved to market. The recent poor quality of offer ings has resulted in a lowering of average prices. Through the season high prices were realized on desirable grades. Plant beds for the 1926 crop have been prepared, and seeding will commence with favorable weather. There is a tendency to curtail the acreage of dark tobacco and increase planting of burley. Market results of the last crop tend to emphasize the importance of grow ing good tobacco and striving for high quality rather than quantity production. Com m odity Prices — Range of prices in the St. Louis market between February 15, 1926, and March 15, 1926, with closing quotations on the lat ter date and on March 14,7 1925. Close Wheat July ........................... September ..... No. 2 red winter No. 2 hard...... Corn July ............... High Low March 15, 1926 March 14, 1925 bu.$1.71 %$1.55*6 $1.68 $1.6324 1.49% 1.35 1.41J* 1.47*6 1.43*4 1.33^ 1.36 1.87 1.70 $1.77 @ 1.79 1.82 1.78 1.64 1.70 $1.6354 @ l.66V2 ‘ .79^ .82^ .74^ .76 .76H .75/8 .78^ .68^ .72 No. 2 white.... Oats No. 2 white.... .44^2 Aoy2 .41 Flour Soft patent..... ..per bbl. 9.50 8.25 8.75 Spring patent. 8.90 7.75 8.10 Middling cotton....per lb. .20 .18 K Hogs on hoof.....per cwt.14.00 9.75 11.00 .80 K .71 .73 @ .41H 1.18*4 1.14 1.23/2 @ I.I41/2 1.16 .50 ^ 9.00 @ 9.50 9.00 8.40 8.50 @ 8.80 .26 • 18^ @ 14.00 10.50 @ 14.25 @ @ B U IL D IN G W hile outdoor work was held in check to some extent by the inclement weather in late February and the first half of March, building activity as a whole gained momentum during the past thirty days. In the smaller towns and in the country a considerable volume of new construction was initi ated, and a feature of the activities was the con tinued heavy residential building in suburban com munities of the larger centers of population. Plans for municipal construction during the com ing spring and summer are on a large scale, and in all States of the district highway construction work is being resumed. In the five largest cities of the district the dollar value of building permits issued during February was 9.9 per cent greater than in January, but fell 35.1 per cent below the total of the corres ponding month last year. The average price of building materials underwent no change w orthy of note during the past thirty days, advances about counterbalancing declines. Production of portland cement for the country as a whole during February totaled 7,731,000 barrels, against 7,887,000 barrels in January, and 8,255,000 barrels in February, 1925. Building figures for February fo llo w : New Construction *dost Permits 1926 1925 1926 1925 204 Evansville 151 $ 134 $ 321 Little Rock 95 99 263 343 Louisville .. 187 411 1,059 3,134 419 1,300 Memphis ... 400 1,241 St. Louis.... 654 712 2,819 3,550 Feb. totals. 1,487 1,845 $5,575 $8,589 Jan. totals..1,166 1,195 5,070 5,163 Dec. totals. 1,088 1,239 6,161 8,092 *In thousands of dollars (000) omitted). Repairs, etc. Permits *Cost 1926 1925 1926 1925 79 61 $ 41 $ 34 70 91 53 47 37 91 70 295 147 91 54 36 372 367 311 1,322 726 499 503 680 607 554 $ 529 $1,734 773 541 1,145 515 F IN A N C IA L Changes in the banking and financial situation in this district during the past thirty days reflected largely the usual seasonal trends. T h e general com mercial and industrial demand for credits was some what more active as a whole, but spotted in charac ter. Spring needs of wholesalers in the larger cities have resulted in slightly increased commitments, and borrow ing by the retail trade also showed the usual increase. Country banks have materially re duced their loans with city correspondents, and ex cept in the extreme southern sections the demand for financing spring planting and other farm opera tions has not as yet been felt to any appreciable ex tent. There is a continued good demand for funds to finance live stock operations, the recent high prices for cattle and hogs having resulted in heavier purchases of animals to fatten for market. Packers and fertilizer manufacturers increased their com m it ments, and there was a somewhat better demand from the lumber trade and building material inter ests generally. Grain handlers and flour millers sub stantially reduced their commitments and due to present conditions in the cash grain markets, total borrow ings of these interests are considerably below the'corresponding period a year ago. Further liqui dation was reported in the tobacco and rice areas. W hile there was a slight decrease in deposits at the commercial banks, loanable funds are still in excess of current demand, and in numerous in stances financial institutions are seeking investment for tlieir surplus resources. T he decline in loans on stock exchange collateral, which com m enced at the end of Januaiy, was continued during the period under review. Interest rates at the commercial banks averaged slightly lower than during the pre ceding thirty days. This district’s quota of the recent issue of per cent Treasury bonds was oversubscribed by approximately 10 per cent. Commercial Paper— Both country and city banks were in the market for good amounts of com mercial paper, but offerings were moderate and sales of the reporting brokers in February were 19.8 per cent below the same month in 1925 and 17.4 per cent under the January total this year. Sales during the first tw o weeks of March were about on a parity with those of the same period last year. The quotable range, 4% to 4 y2 per cent, was the same as during the preceding thirty days, but the trend was lower, and some particularly choice names sold at 4 per cent. A steady increase is noted in the volum e of offerings by concerns specializing in financing installment payment sales. Debits to Individual Accounts — The follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, cer tificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Govern ment in the leading cities of the district. Charges to accounts of banks are not included. E. St. Louis and Fort Smith, Ark. Greenville, Miss.. Louisville, Memphis, Owensboro, Ky.. Quincy, I] 1...... St. Louis, Mo.... *Feb. 1926 *Jan. 1926 *Feb. 1925 5 41,337 11,979 32,216 12,513 5,248 4,824 75,620 1921,594 142,456 6,221 10,865 680,700 3,817 13,939 $ 47,846 13,353 39,989 14,864 5,374 5,296 88,338 205,654 179,777 7,460 12,230 828,940 5,753 17,742 $ 36,745 6,877 32,705 12,391 5,128 4,526 63,050 177,588 138,674 6,377 10,546 662,525 3,705 12,108 Totals.................. $1,234,329 $1,472,616 $1,172,945 *In thousands (000 omitted). Feb. 1926, comp, to Jan. 1926 Feb. 1925 — 13.6% — 10.3 — 19.4 — 15.8 — 2.3 — 8.9 — 14.4 — 6.4 —20.8 — 16.6 — 11.2 — 17.9 — 33.7 —21.4 -16.3 + 12.5% + 72.7 — 1.5 + 1.0 + 2.3 + 6.6 + 19.9 + 8.5 + 2.7 — 2.4 + 3.0 + 2.9 + 3.0 + 13.1 +13.7 Federal Reserve Operations — During Febru ary the Federal Reserve Bank of St. Louis dis counted for 171 member banks, against 179 accom modated in January and 172 in February, 1925. The discount rate remained unchanged at 4 per cent. Changes in the principal assets and liabili ties of this institution as compared with the preced ing month and a year ago are shown in the follow ing table: *Mar. 16, *Feb. 16, *Mar. 16, 1926 1925 1926 $15,780 Bills discounted............................................ .$26,537 ' $20,971 16,000 13,162 Bills bought..................................................... 13,316 24,483 7,985 U. S. Securities............................................. 16,901 322 Foreign loans on gold.................................... 331 525 Total bills and securities...................... $57,085 F. R. Notes in circulation............................ 37,251 Total deposits................................................. 85,650 Ratio of reserves to deposit and F. R. Note liabilities.................. 56.8% *In thousands (000 omitted). $61,776 37,258 85,146 $37,452 51,515 81,423 55.3% 77.5 V The follow ing statement shows principal re sources and liabilities of reporting member banks in Evansville, Little Rock, Louisville, Memphis and St. L o u is : *Mar. 17, *Feb. 17, *Mar. 18, 1926 1926 1925 Number of banks reporting.......................... 33 33 33 Loans and discounts (incl. rediscounts) Secured by U. S. Gov’t, obligations.......$ 13,083 $ 11,980 $ 13,060 Secured by other stocks and bonds....... 198,441 209,054 174,996 All other loans and discounts.................. 318,056 319,282 313,296 Total loans and discounts..............................$529,580 Investments U. S. Pre-war bonds.................................. 13,157 Liberty bonds............................................ . 22,960 Treasury bonds............................................. 22,487 Victory and Treasury notes...................... 5,166 Certificates of Indebtedness...................... 3,047 Other securities........................................... 109,393 $534,330 $507,338 12,957 22,786 13,079 7,333 4,253 107,750 13,257 31,473 19,005 13,517 3,391 99,289 Total investments............................................. $176,210 Reserve balance with F. R. bank................ 47,861 Cash in vault................................................... 7,507 Deposits Net demand deposits.................................. 413,083 Time deposits............................................... 219,550 Government deposits................................. 12,700 $168,158 47,006 7,581 $179,932 51,427 7,425 423,354 221,662 5,864 422,661 202,896 18,898 Total deposits...................................................$645,333 $650,880 $644,455 Bills payable and rediscounts with Federal reserve bank Secured by U. S. Gov’ t, obligations..... 5,953 6,120 940 All other.................................................... 8,375 8,673 6,289 *In thousands (000 omitted). Total resources of these 33 banks comprise approximately 54 per cent of the resources of all member banks in the district. (Compiled March 20, 1926) B U SIN E SS C O N D IT IO N S IN T H E U N IT E D S T A T E S PRODUCTION — The Federal Reserve Board’s index of production in basic industries, which is adjusted for seasonal variations, indicated a continuation of productive activity during February in about the same volume as in the preceding tw o months. Mill consum ption of cotton and the output o f flour and anthracite, copper, and newsprint showred increases in February, when allowances is made for usual seasonal changes, and the output of iron and steel Index of 22 basic commodities adjusted for seasonal variations. Latest figure, February =120. and lumber remained practically unchanged. Activity in the wroolen industry and the production of cement declined. A utom obile production wras in considerably greater volume in February and was larger than a 3 rear ago, although smaller than in the corresponding month of 1924. Em ploym ent and earnings of factory workers increased, after the seasonal recession of January, and were in Febru ary at practically the same levels as during the latter part o f 1925. The volum e o f building contracts awarded de clined both in January and in February, but remained larger than in the corresponding months of last year. Reports by farmers to the Departm ent o f Agriculture on intentions to plant in 1926 indicate that the acreage of spring wheat and tobacco will be slightly smaller, the acreage of corn will be about the same, and that o f oats, barley, hay and potatoes larger than that in 1925. TRADE — W h olesale trade in February was in about the same volum e as a year ago. A smaller volume of sales was reported for groceries and dry goods, and hardware, while sales of meats, shoes, and drugs were larger. Inven- Federal Reserve Board’s indexes of factory employment and payrolls. Latest figures, February, employment=97.0 payrolls= 111.5. tories o f wholesale firms dealing in groceries, dry goods, shoes, and hardware were smaller at the end of February than a year ago. Trade at department stores and at maii order houses wras larger than in February of last year and department store stocks w ere about 5 per cent greater than on the corresponding date in 1925. Freight car loadings con tinued at about the same daily rate in February as in the preceding tw o months. Shipments o f merchandise in less- than-car-load-lots and of miscellaneous com m odities were particularly larger. PRICES — The general level of w holesale prices as measured by the Bureau o f L abor Statistics index, after remaining unchanged for tw o months, declined in Febru ary to a point slightly below the low figure o f 1925, re ported for last May. The greater part o f the decline since Index of U. S. Bureau of Labor Statistics. Latest figure, February=155. last autumn has been in prices of agricultural com m odities. In February prices of all m ajor groups o f com m odities except fuels, declined and particularly large reductions occurred in the prices of grains, cotton, w ool, silk, and rubber. Price advances in February were shown for petro leum, coke, and paper. During the first three weeks of M arch prices of grains, cotton, w ool, and silk continued to decline and recessions were also reported in the prices of sugar and hardwood lumber. BANK CREDIT — A t mem ber banks in leading cities demand for loans, chiefly for com m ercial purposes, show ed an increase — partly seasonal in character — between the middle of February and the middle o f March, and on March 17 total volume was close to the high point reached last autumn. A further decline of loans on securities, which accom panied the sharp recession in securities prices in M arch, carried the total to a point nearly $430,000,000 below that reached at the end o f the year. F ollow in g a grow th during February in the volum e o f Reserve bank credit outstanding, there wTas a sharp decline early in Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for first weekly report dates in March. M arch to about the same level as a year ago. Factors con tributing to the decline have been continued imports of gold and som e reductions in m em ber bank reserve require ments, as well as the tem porary abundance of funds result ing from the excess o f Treasury disbursements over re ceipts around M arch 15. Open market rates on prime com m ercial paper, after a slight decline in February, advanced in M arch to 434-4/4 per cent, the level which has prevailed since last O ctober.
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