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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 July 31, 1928 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent A K E N as a whole,com m ercial and industrial activity in this district during the past thirty days developed recessionary tendencies. W ith but few exceptions, June sales of the lines investigated showed decreases both under the pre ceding month and the corresponding period last year. In many important instances the declines in the month-to-m onth comparison were too marked to be entirely accounted for by seasonal considerations, and were ascribed to unfavorable weather, extreme caution on the part of consumers and uncertainty relative to prices and the outcom e of crops. In manufacturing and distributing lines there were increasing comments of keen competition and nar row ing profit margins. Due to the backward season, clearance of merchandise has not been as thorough as at the same time in recent years, but due to the policy of close buying, mid-year inventories are not burdensome or of unusual size. T On the other hand the situation showed a num ber of favorable developments. W hile a slowing down in production in the iron and steel industry occurred, distribution of automobiles recorded a good gain, and certain specialty makers, notably of farm implements, tractors, heating apparatus, cer tain types of engines and architectural items were operating at or close to capacity. The packing in dustry reported increases over a month and a year earlier, and in some localities the general tone of business was more optimistic. Retail trade in June, as reflected by department store statistics, gained slightly over a year ago, and heavier volum e of sales was reported by mail order houses and five and ten cent stores. Since the first of this month there has been excellent response, especially in retail channels, to the warm weather, and the marketing of early crops, grain harvests, and extensive vacation re quirements have had a stimulating effect on buying by the public. D ebits to individual accounts in this district in June were larger by 4.2 per cent and 12.1 per cent, respectively, than in M ay and June, 1927, and the total for the first six months of the year was 7.0 per cent larger than for the corresponding period in 1927. Due to withdrawals for vacation expendi tures, savings accounts decreased slightly under May, but the total on July 6 was 7 per cent larger than a year ago. The employment situation devel oped no marked change as compared with the pre ceding thirty days reductions of forces in industrial plants, mines and offices being largely counterbal anced by heavier labor requirements in outdoor occupations. June as a whole was unfavorable for agriculture in the district, but since the last week of that month weather conditions have been ideal for farm work, and much of the lost ground has been recovered, though the season is still backward with most crops. The general industrial demand for coal was weak, and dullness prevailed in the market for domestic grades. W hile mines in Indiana and Illi nois were averaging hardly half-time, and many pits in W estern Kentucky averaged only two days work per week, there were complaints from operators in all fields of the district of an accumulation of unsold loaded cars on track at the mines. T he usual sea sonal recession in activities at certain industrial plants was in evidence, and purchasing was further reduced by the practice of major consumers to draw from their storage piles. Retail distributors in the large cities have shown little disposition to increase their yard stocks, and with numerous householders away on vacations, ordering and deliveries for fall and winter consumption were light. T he use of coke and oil for domestic heating purposes is in creasing, and competition of natural and by-product gas is grow ing as a factor in the trade. Conditions considered, however, the market held fairly steady, prices fluctuating within a narrow range. Except in relatively few cases, where need of m oving ton nage was urgent, there was little cutting under cir cular quotations. F or the country as a w hole production during the present calendar year to July 7, approximately 159 w orking days, amounted to 241,126,000 net tons, against 282,987,000 tons for the corresponding period last year and 273,701,000 tons in 1926. Traffic of railroads operating in this district was in smaller volume than during the same period last year and in 1926. Decreases were general in all classifications, but especially marked in grain and grain products, which is partly accounted for by lateness of the winter wheat harvests. For the country as a whole, loadings of revenue freight for the first 27 weeks of the year, or to July 7, totaled 25,307,710 cars against 26,360,125 cars for the cor responding period in 1927, and 26,230,788 cars in 1926. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 216,072 loads in June, against 222.333 loads in May and 201,792 loads in June, 1927. Dur ing the first 9 days of July the interchange amounted to 63,669 loads, which compares with 63,569 loads during the corresponding period in June, and 56,253 loads during the first 9 days o f July, 1927. Passen ger traffic of the reporting roads decreased 8 per cent in June as compared with the same month in 1927. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in June was 90,500 tons, against 117,929 tons in M ay and 94,092 tons in June, 1927. Collections were hardly up to those of the pre ceding thirty days, though about on a parity with a year ago. Inclement weather throughout June affected settlements, particularly in the country, where rains and heavy roads interfered with com munications. Generally collections of the important wholesale and jobbin g interests were less satisfac tory than earlier in the year. Answers to question naires addressed to leading interests in the several lines scattered through the district showed the fol low ing results: E xcellent June, 1928..................... 1.3% May, 1928......................1.4 June, 1927......................1.3 G ood 26.3% 25.7 28.7 Fair 59.2% 63.5 58.8 P oor 13.2% 9.4 11.2 Commercial failures in the Eighth Federal R e serve District in June, according to Dun’s num bered 105, involving liabilities o f $962,860, against 138 defaults in M ay with indebtedness of $1,663,143, and 98 failures for $1,897,022 in June, 1927. T h e per capita circulation o f the United States on June 30, 1928, was $40.50, against $40.12 on M ay 31, 1928, and $41.48 on June 30, 1927. M AN U FA CTU R IN G AN D W H O L E S A L E Automobiles — Combined passenger car and truck production in the United States in June totaled 396,714, against 425,981 in May and 321,959 in June, 1927. Distribution of automobiles made an excellent showing during the past thirty days, heavy gains being recorded over the preceding month and the corresponding period a year ago. Virtually all varieties and makes of vehicles shared in the im provement, but, as was the case a month earlier, relatively the most marked gains were reported by dealers in the large centers of population. Country dealers, however, reported increased inquiries and improved prospects. Preoccupation of farmers with harvest and other seasonal operations had a tenden cy to cause them to postpone filling their require ments. Since the first of this month new models brought out by several manufacturers have met with satisfactory response. W ith the exception of May, sales o f cars in the low priced category were the largest for any month since March, 1927. Im provement was also noted in the demand for trucks, particularly of the lighter varieties used for city deliveries. June sales of new passenger cars by 320 dealers scattered through the district were 14.6 per cent larger than in May, and 52.4 per cent great er than the June, 1927, total. Sales of parts and ac cessories in June showed a small increase over the preceding month, and were 4.8 per cent larger than in June, 1927. Stocks of passenger cars in dealers’ hands on July 1 were 5.9 per cent larger than a month earlier, and 3.4 per cent smaller than on July 1, 1927. Conditions in the used car market continue generally satisfactory. W hile the number taken in was larger than in May, sales were also heavier, with the result that stocks at the end of June were only about 2.5 per cent greater than on M ay 31. Both in number and value represented, used car stocks on July 1 were below those on the same date a year ago. Further improvement in the movement of tires at retail took place during June, and since the first of this month more seasonable weather has materially helped both the retail and wholesale tire trade. Sales of new automobiles made on the deferred payment plan in June by dealers reporting this item were 51.2 per cent of their total sales, against 46.1 per cent in May and 52.0 per cent in June, 1927. Boots and Shoes — June sales of the five report ing interests were the smallest for any month this year, falling 11.5 per cent below those for the same month in 1927, and 48.4 per cent below the M ay total this year. The heavy decrease in the m onth-tomonth comparison is seasonal in character, though somewhat more marked than in recent years. Stocks on July 1 were 13.7 per cent larger than a month earlier, and 27.3 per cent larger than on July 1, 1927. Road orders from salesmen, w ho departed for their territories about July 5, are reported somewhat below expectations. Prices on finished goods were again marked up on July 1, and the trend of raw materials was upward. Factory operations were at a slightly higher rate than a year ago, averaging from 96 to 100 per cent of capacity. Clothing — Sales o f the reporting clothiers in June fell 11.8 per cent below those for the same month in 1927, and 36.0 per cent under the May total this year. Unfavorable weather generally through the district in June held down purchasing o f seasonable apparel, and the clearance of these lines on July 1 was disappointing. Since that date, however, the arrival of warm weather has stimulated business at retail, which in turn is reflected in more activity through wholesale and jobbing channels. Sales of heavyweight clothing for men’s wear have been backward, and considerable buying for fall and winter is still to be done. Quietness is com plained of in work clothing lines. Drugs and Chemicals — Unfavorable weather and reduced industrial activity were mentioned as the chief causes for a decline in June sales of the six reporting interests of 6.7 per cent as compared with the same month in 1927, and of 7.1 per cent as compared with the M ay total this year. Stocks on July 1 were 5.7 per cent smaller than on the same date in 1927, and unchanged from those on M ay 31 this year. Sales of soda fountain supplies in June were sharply under the average of recent years, but since the first of the month a marked im prove ment has taken place in the m ovement of this and other seasonal lines. There was no change in prices worthy of note as compared with the preceding thirty days. Dry Goods — W eather conditions were unfav orable for distribution of dry goods, and June sales of the eight reporting firms were 10.6 per cent smaller than during the same month in 1927, and 4.4 per cent smaller than the M ay total this year. Stocks on July 1 were 6.3 per cent larger than thirty days earlier, but 2.2 per cent smaller than those on July 1, 1927. Since the first o f this month business has picked up substantially, particularly on season able merchandise. V isiting merchants at the chief centers were in larger numbers than a year ago, but their purchasing is conservative and chiefly for im mediate needs. Uncertainty relative to the future of cotton had a tendency to hold down buying of goods based on that staple. A dvance business of the reporting stores continues well ahead of a year ago. Electrical Supplies — June sales of the six re porting firms fell 0.2 per cent below those of the same month in 1927, but were 16.7 per cent larger than in M ay this year. Stocks on July 1 were 20.8 per cent smaller than thirty days earlier and 6.4 per cent larger than on July 1, 1927. L ow temperatures prevailing in June held down sales of fans and other hot weather goods. Radio material was less active than heretofore, but there continues an excellent demand for motors for a wide variety of uses. Flour — Production at the 12 leading mills of the district in June totaled 314,474 barrels, the small est since the same month in 1927, and comparing with 345,670 barrels in May and 298,151 in June, 1927. Stocks of flour in St. Louis on July 1 were 2.1 per cent larger than thirty days earlier, but 10.7 per cent smaller than on July 1, 1927. During late June business was virtually at a standstill, buyers holding off for the new wheat crop. Since the second week of this month, however, there has been an active demand from the domestic trade, with heavy sales, particularly through the South. Negotiations for considerable flour for export were under way, but agreement on prices was not reached, and little busi ness actually closed. Prices declined rather sharply during the past thirty days. Mill operation was at about 45 to 50 per cent of capacity. Furniture — June sales of the 14 reporting firms showed a decrease of 1.8 per cent under those of the same month in 1927, and of 3.1 per cent under the M ay total this year. Stocks on July 1 were larger by 23.9 per cent and 4.8 per cent than thirty days and a year earlier, respectively. Manufacturers and jobbers report a general disposition on the part of retailers to purchase cautiously, and mainly for immediate requirements. Large stock orders are scarce. Demand for theater seating and hotel and apartment furniture are relatively more active than other lines. Office furniture is quiet, and the sea sonal dullness in demand for household furniture and furnishings is somewhat more pronounced than during the past several years. Groceries — Unfavorable weather, lateness of crops, and competition from chain stores were men tioned as factors making for reduced business activ ity in this classification. June sales of the 12 report ing interests were 9.1 per cent smaller than for the same month in 1927, and 9.7 per cent below the May total this year. Stocks on July 1 were 7.5 per cent larger than on the same date in 1927, and 3.1 per cent greater than those on June 30 this year. Prices of flour, potatoes, and certain canned goods declined, but generally prices showed little varia tion from the preceding thirty days. Hardware — June sales of the 12 reporting firms were 2.2 per cent larger than for the same month in 1927, but 1.7 per cent under the M ay total this year. Stocks on July 1 were 30.2 per cent and 2.8 per cent larger than thirty days and a year ear lier, respectively. The movement of seasonal goods, which was backward during the preceding month, picked up substantially, and the arrival o f harvests had a stimulating effect on purchasing of goods for consumption in the rural areas. Vacation and travel supplies, sporting goods and automobile ac cessories were in much better demand than earlier in the year. Iron and Steel Products — Consumers of both finished and semi-finished iron and steel goods con tinue to proceed with caution in the matter of new commitments. This attitude has had the effect of slowing down activities at mills, foundries and machine shops and rendered somewhat more em phatic than ordinary the seasonal curtailment due to hot weather, vacations and suspension for m id year inventorying and repairs. Another factor ad versely affecting the iron and steel trade has been uncertainty relative to third-quarter prices, particu larly among the m ore important consum ing inter ests. Taken as a whole new orders placed were below current shipments, and backlogs in many in stances sustained further reductions. B uying by the more important users has been held down largely to immediate needs, with total sales to the general manufacturing trade making a relatively much bet ter showing than in the case of industries usually accounting for heavy tonnage. Certain specialty makers report demand for their products holding up well. Manufacturers of farm implements, tractors, heating apparatus, some varieties o f stoves and architectural iron have been operating at, or close to capacity. Demand for tin plate is brisk. W hile the structural outlook is good, fabricators complain of lack of new lettings, and specifications for struct ural shapes, plates and kindred materials are con siderably below capacity. Requirements of the automotive industry continue large, and the outlet for reinforcing concrete bars and other materials used in highway construction and river im prove ment work is broad. Except for full finished varie ties for the automobile makers, demand for sheets was quiet. Purchasing of tubular goods, except boiler tubes, and the general run of wire and wire products was reported backward, while the disturbed price condition of the hoop and band mar ket has had an adverse effect on buying of that material. In the immediate past some improvement in demand for track accessories has developed, but buying generally by the railroads is in disappoint ing volume, and confined to absolute necessities. The reduction in pig iron prices by Eastern and Southern blast furnaces disturbed the psychology of buyers in this district, and while there are con siderable quantities still to be bought for the third and fourth quarters, users are slow to cover their requirements. Scrap iron and steel continued dull, with the trend of prices downward. Production of pig iron for the country as a w hole in June totaled 3,088,882 tons, which compares with 3,292,790 tons in May, and 3,089,726 tons in June, 1927. Steel ingot production in the United States in June totaled 3,742,964 tons, against 4,203,190 tons in May, and 3,495,609 tons in June, 1927. R E T A IL T R A D E T he condition of retail trade is reflected in the follow ing comparative statement showing activity at department stores in leading cities of the district: N et sales com parison com p, to June, 1927 Evansville ...„ . . + 2 .0 % ' L ittle Rock..,....— 5.7 Louisville .... ....— 3.7 6.6 .... + 13.3 ,...+ 4.2 Springfield, M o . + 3.5 8th District...,...+ 0.9 Stocks on hand Stock turnover June 30, 1928 to same period 1927 + 0.2% + '2 . 1 — 4.3 + 7.0 + 15.1 + 1.7 — 1.9 + 1-9 com p, to June 30, 1927 — 0.9 % ' + 7.7 — 0.2 — 7.1 — 3.8 — 8.1 — 7.0 — 5.5 N et sales com parison June, 1928 com p, to June, 1927 M ay, 1928 M en’s furnishings............ -f- 2 .8 % + 5.8% B oots and Shoes...............+ H*5 — 1.7 June 1928 1.18 1.12 1.53 1.51 1.27 1.83 .80 1.64 30, 1927 1.18 1.19 1.62 1.33 1.05 1.67 .80 1.54 Stocks on hand June, 1928 com p, to June, 1927 M ay, 1928 + 2 .0 % — 9.4% + 5.4 — 13.8 Department Store Sales by Departments — A s reported by the principal department stores in L it tle Rock, Louisville, Memphis, and St. Louis. Percentage increase or decrease June, 1928 com pared to June, 1927 N et sales Stocks on hand for m onth at end o f m onth P iece g o o d s.......................................— 12.2% — 3.1% — 8.4 R eady-to-w ear accessories............ — 0.5 W om en and misses' ready-to-w ear............................+ 2 0 .3 — 10.4 M en’ s and boys’ wear...................+ 0.2 — 6.0 H om e furnishings............................+ 1.7 — 9.5 CONSUM PTION OF ELEC TR IC ITY Public utilities companies in the five largest cities of the district reported consumption of elec tricity in June as being 0.8 per cent larger than in May, and 13.0 per cent in excess of June, 1927. D e tailed figures fo llow : N o. of June, M ay, June, 1928 Custom1928 1928 com p, to ers * K .W .H . * K .W .H . M ay, 1928 Evansville ... 40 1,495 1,497 + 0 . 1% Little R ock.. 35 1,912 1,530 + 2 4 .9 Louisville .... 82 6,111 5,706 + 7.0 Memphis ..... 31 1,142 10.0 1,038 St. L o u is......121 20,281 19,629 — 3.3 T ota ls......309 30,291 30,050 * In thousands (000 om itted ). + + 0.8 June, June, 1928 1927 com p, to ♦ K .W .H . June, 1927 1,249 + 19.9% 1,470 + 3 0 .0 5,604 + 9.0 1,199 — 4.8 17,277 + 13.6 26,799 + 1 3 .0 The follow ing figures compiled by the Depart ment of the Interior, show kilowatt production both for lighting and industrial purposes for the country as a w h ole: .By water pow er M ay, 1928..............................3,178,749,000 ' A pril, 1928............................2,949,218,000 M ay, 1927..............................2,632,373,000 B y fuels 3,942,266,000’ 3,903,655,000 3,883,197,000 Totals 7,121,015,000 6,852,873,000 6,515,570,000 POSTAL RECEIPTS Returns from the five largest cities of the dis trict show a decrease in combined postal receipts for the second quarter o f 1928 of 1.1 per cent as compared with the corresponding period in 1927, and of 5.6 per cent as compared with the first quar ter of this year. Detailed figures fo llo w : June 30, 1928 Evansville ........ .... $ 173,000' 220,000 L ittle R o ck ...... ..... 715.000 Louisville .......... 620.000 M em phis .......... St. L ouis .......... ...... 3,082,000 T o ta l............ $4,810,000 For Quarter E nding June 30, Mar. 31, 1927 1928 $ 167,000 $ 174,000 199.000 242.000 733.000 742.000 512.000 668.000 3,251,000 3,271,000 $5,097,000 $4,862,000 June 30, 1928 com p, to June 30, 1927 + 3.6% + 10.5 — 2.5 + 2 1 .0 — 5.2 — 1.1 B U IL D IN G In point of dollar value, permits issued for new construction in the five largest cities o f the district in June showed an increase of 16.2 per cent over the same month in 1927, and of 14.6 per cent over the M ay total this year. A ccording to statistics com piled by the F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District in June totaled, $44,224,793, against $36,360,248 in May and $44,170,814 in June, 1927. There was no change in the cost of building as compared with the tw o preceding months, and present levels show only slight variation as contrasted with a year ago. Pro duction of portland cement for the country as a whole in June totaled 17,469,000 barrels, against 17,280,000 barrels in M ay and 17,078,000 barrels in June, 1927. Building figures for June fo llow : N ew Construction *C ost Perm its 1927 1928 1927 1928 $ 357 $ 202 "2 l8 Evansville .. 538 785 218 85 Little R ock 64 1,814 924 199 Louisville .. 183 287 1,103 972 M em phis ... 298 3,633 4,300 St. Louis.... 694 1,011 ________Repairs, etc. *Cost Perm its 1927 1928 1927 1928 92 $ 46 $ 29 95 44 64 96 137 135 138 86 90 89 132 218 117 390 445 426 464 $7,692 $6,616 June totals 1,777 1,800 6,712 6,837 M ay totals 2,040 1,677 1,690 7,725 7,315 A pril totals 1,996 * In thousands of dollars (000 om itted ). 832 1,051 991 903 1,050 888 $ 853 1,010 839 $745 801 749 A G R IC U L T U R E Excessive rainfall was general in this district during June, precipitation in Missouri and Northern Arkansas being the heaviest for any June on record. Streams in many sections went out of their banks, destroying or doing serious damage to bottomland crops. In some localities flood conditions approxi mated those prevailing during the great overflow of the Mississippi River and its tributaries last year. Field w ork was badly interfered with, particularly the cultivation of row crops and cutting of wheat in Southern counties. Conditions were unfavorable for cotton and corn, in both of which crops weeds made considerable headway. Prospects for hay were reduced, and some winter wheat was lost be cause of inability of farmers to get into the fields at the proper time to harvest. Since July 1, however, a considerable part of the June losses have been retrieved ow ing to the arrival of clear, hot weather. Delayed wheat har vest has been pushed forward rapidly, and numerous corn, tobacco and cotton fields, except in the flooded areas, have been cleaned up. Oats have improved, and in many important grow ing areas the crop made good heads. Pastures generally were benefitted by the wet weather, and are in excellent condition. The condition of rice in Arkansas and Missouri is reported good. Reports relative to tobacco vary rather widely, but general improvement has been the rule since the first of this month. The potatoe crop in Arkansas and Missouri promises to be one of the largest ever produced, but prices are low. Supplies of farm labor are universally adequate, with no change w orthy of note in wage scales as compared with last year. W inter W heat — Prospects for this crop im proved slightly between June 1 and July 1, but the yield in all states of the district will be largely be low a year ago and the 10 year average. In M is souri, particularly the western counties, quality is good and yields will be fair, but in Illinois, Indiana, Kentucky and Tennessee approximately two-thirds of the sown acreage was lost from winter-killing, and on part of the area remaining, the stand is so thin that it is difficult to estimate the number of bushels that will be threshed. W et weather in June interfered with harvesting, but since July 1 condi tions have been ideal for field work and cutting and threshing have made good progress. Corn — The outlook for corn varies rather broadly in states of this district. In Mississippi, Kentucky, Tennessee and Arkansas small yields are indicated, prospects in Mississippi being for the smallest output in twenty-five years. In the north ern states, particularly Illinois, Indiana, and M is souri, the July 1 condition indicated yields above the 5-year average, and since that date much delayed cultivation has been accomplished and marked im provement in condition has taken place. Due to sub stitution of corn in sections where winter wheat was a failure, the acreage is considerably larger than a year ago. Oats — Production of oats in the Eighth D is trict, based on the July 1 condition, is estimated at 61,740,000 bushels, against 40,547,000 bushels har vested in 1927. For the United States the forecast is for 1,320,097,000 bushels, against 1,184,146,000 bushels in 1927, and a 5-year average of 1,347,563,000 bushels. Fruits and Vegetables— Prospects are for one of the largest crops of potatoes ever produced in this district, but the large yield has adversely affected prices, and there are already indications that a large part of the crop may not be dug. In the chief pro ducing states, Illinois, Missouri, Kentucky, Tennes see, Mississippi and Arkansas, the combined yield of sweet potatoes is estimated at 16,545,000 bushels, against 20,702,000 bushels harvested in 1927, and a 5-year average of 17,733,000 bushels. The acreage and indicated yield of tomatoes, particularly in the commercial areas, is above that of a year ago. Re ports relative to tree fruits vary, but generally the outlook is for larger production than a year ago. In Illinois, Missouri and Arkansas, the chief apple states of the district, the combined yield this year is estimated at 10,587,000 bushels, of which 2,018,000 barrels represent commercial crop, against 7,569,000 bushels, with 1,200,000 barrels commercial crop, harvested in 1927. T he outlook for peaches is good, the indicated combined crop in Indiana, Illinois, Kentucky, Tennessee and Arkansas being 7,545,000 bushels, against 3,810,000 bushels in 1927, and a 5-year average of 5,645,000 bushels. Due to numer ous new vineyards com ing into bearing, and a fav orable season, the grape crop will be the largest on record in this district, combined output in Illinois, Missouri and Arkansas being estimated at 24,222 tons, against 13,020 tons in 1927, and a 5-year aver age of 15,911 tons. Gardens generally underwent improvement during the past thirty days, and aver age condition is above that of a year ago. Live Stock — The general condition of live stock in this district underwent no marked change during the past thirty days as contrasted with the similar period immediately preceding. Pastures im proved further, due to ample rains in June, but the precipitations interfered with haying, and prospects for that crop are less favorable. A decrease of 7 per cent in the spring pig crop of 1928 from that of 1927 for the corn belt states is shown in the June survey of the Department of Agriculture. H og prices advanced sharply, reaching the highest point in mid-July since October, 1927. Receipts and shipments at St. Louis, as re ported by the National Stock Yards, were as fol low s : R eceipts June, M ay, June, 1928 1928 1927 Cattle and Calves........ 95,417 95,727 121,984 H ogs ............................280,737 332,162 375,398 H orses and M ules...... 2,455 2,099 2,615 Sheep ............................ 86,585 38,473 93,158 Shipments June, M ay, June, 1928 1928 1927 65,644 62,224 87,633 206,633 249,505 255,798 1,559 2,230 1,678 22,555 12,991 21,118 Cotton — A ccording to the U. S. Department of A griculture’s July 1 report, acreage planted to cotton in all states of this district is larger than that of 1927. Combined acreage of Missouri, Ten nessee, Mississippi and Arkansas is placed at 8,529,000 acres, against 7,830,000 acres for these states last year. Allow ance was made in the 1928 estimate for about 150,000 acres of cotton flooded out in Arkansas in late June and for a smaller area similarly flooded in Missouri. Through June weath er was unfavorable for growth and development of the crop, excessive precipitation preventing needed cultivation. Generally since July 1, weather has improved, and many fields have been cleared of weeds. Demand for old crop cotton was quiet, with prices fluctuating in an irregular range. In the St. Louis market the middling grade moved from 20%c per pound on June 16 to 22y2c on June 30, and closed at 21 on July 16. Stocks in Arkansas warehouses on July 13 totaled 58,133 bales, against 87,125 bales on the corresponding date last year. Rice — The estimated area planted to rice in Arkansas this year is 159,000 acres, a reduction of 9 per cent as compared with a year ago. The esti mated yield in that state, based on the July 1 condi tion, is 7,066,000 bushels, against 7,438,000 bushels in 1927 and a 5-year average of 7,546,000 bushels. Missouri, which had 3,000 acres of rice in 1927, re ports 10,000 acres planted this season. W ith the warm weather prevailing since the last week in June, the crop has made good progress and a high condition is the rule. Tobacco — The area planted to tobacco in the chief producing states of this district is considerably larger than a year ago, and a substantially heavier yield is indicated. Based on the July 1 condition, the U. S. Department of Agriculture, forecasts the combined yield in Indiana, Missouri, Kentucky and Tennessee at 389,805,000 pounds, against 281,537,000 pounds harvested in 1927, and a 5-year average of 494,044,000 pounds. H eavy rains in June interfered with cultivation, and clearing the crop proceeded slow ly and required more time and labor than usual. Relatively conditions in the burley districts are most favorable. Considerable damage from over flows was wrought in the dark tobacco areas. The warm, dry weather prevailing since the first of this month has permitted of intensive cultivation, and generally the condition of the crop has improved. Commodity Prices — Range of prices in the St. Louis market between June 15, 1928 and July 16, 1928, with closing quotations on the later date and on July 15, 1927. Wheat N o. 2 red winter N o. 2 hard.......... Corn July ..................... 1 A 2H 1 .4 6 ^ 1.79 1.55 Close July 16, 1928 July 15, 1927 $1.30 $1.3814 1.30*6 1.31 1.38J4 1.34H 1.42 yA 1.34J* 1.49 $1.49 @ 1.50 $1.43@ 1.44 1.33 1.33 @ 1.34 1.38@ 1.40 1.07 1.03 .88 1.10 1.10 1.00% 1.04 @ .95 .8 0 ^ 1.01 1.03 1 .0 7 ^ @ H igh “ “ “ N o. 2 m ixed ...... “ N o. 2 w hite........ “ Oats N o. 2 w hite........ “ .73 Flour Soft patent........per bbl. 9.00 Spring patent.... “ .. 7.25 M iddling cotton....per lb. .20*4 H ogs on h o o f........per cw t.l 1.75 L ow .62 .64 7.50 7.50 6.75 6.70 .2 2 ^ 9.75 7.25 @ 1.06 .9 6 X .80H 1.05 1.08 .66 @ 8.00 @ 6.85 ■21'A @ 11.60 1.05 1.07J4 1.07H 1.01@ 1.03 1.04 H .50 7.00 @ 7.50 7 .00@ 7.25 .17 8 .0 0 @ 10.85 latter date were 1.8 per cent smaller than on July F IN A N C IA L The banking and financial situation in this dis *July 18, 1928 trict during th* past thirty days has been marked by a moderate expansion in demand for credit for Loans and discounts (incl. rediscounts) Secured b y U . S. Govt, obligations... commercial and industrial purposes, also for agri cultural financing and carrying investments. Loans of the reporting member banks in mid-July ad vanced to the highest point since the 4,723 $ form ly higher than at the same time last year. have reacted moderately upward since that date. Country banks in some localities have reduced balances with city correspondents in order to take care of the requirements of their agricultural cus tomers. In sections of the South where planting and replanting o f cotton was necessitated by over flows, demand for funds has been particularly active. Demand from grain handlers and the milling inter ests was in smaller volum e than at the same time last year, due to lateness of the winter wheat crop and generally small inventories. In the immediate past, however, the call from this source has aug mented substantially, with indications of total re quirements being larger than in 1927. There has been good liquidation o f bank loans in areas where early fruits and vegetables are the chief crops, also in sections where live stock raising is an important pursuit. Demand for funds for conditioning live stock for market, however, continues active. T h e trend of interest rates has been sharply higher, due both to the seasonal increase in local requirements and firmer m oney conditions generally throughout the country. Commercial paper brokers report greater activity in their line than in many months, with rates firm at 5 to 5 y 2 per cent for prime names. A t the St. Louis banks current rates of interest were as fo llo w s : Prime commercial loans, 5 to 5$4 per cen t; collateral loans, 5% to 6 per cent; interbank loans, 5 to 6 per cent; loans secured by warehouse receipts 5 to 6 per c e n t; cattle loans to 6 per cent. Condition of Banks — Loans and discounts of the reporting member banks on July 18, 1928 showed an increase o f 2.2 per cent as contrasted with June 13, 1928 and an increase of 2.4 per cent as compared with July 20, 1927. Deposits decreased 4,605 202,797 292,710 4,441 212,353 284,126 ...$511,978 $500,920 $500,112 ... 75,617 ... 139,282 79,347 142,114 76,398 124,702 $221,461 46,328 7,792 $201,100 48,328 7,354 392,864 243,055 400,360 231,459 1,465 $635,919 $633,284 Investments Cash in vault.. Deposits ... 7,179 ... 375,476 ... 242,664 .. 3,546 Deposits of these banks declined to the low point of the year in the first week of this month, but $ ... 288,593 middle of April, and were throughout the period uni Bills payable and rediscounts with Federal Reserve Bank 20,435 12,275 ... 27,401 14,609 9,968 *In thousands (000 om itted). tD ecrease due to consolidation. T hese 29 banks are located in St. L ouis, Louisville, Mem phis, L ittle R ock , and Evansville, and their total resources comprise approxim ately 55.5 per cent o f all m em ber banks in this district. Federal Reserve Operations — D uring June the Federal Reserve Bank of St. Louis discounted for 193 member banks, against 186 in M ay and 182 in June, 1927. The discount rate remained at Ay2 per cent until July 19, on which date it was advanced to 5 per cent on all classes and maturities of paper. Changes in the principal assets and liabilities of this institution as compared with the preceding month and a year ago appear in the follow ing table : Bills bought.. R atio of reserve to deposits and F. R . N ote Liabilities.......... *In thousands (000 om itted ). *July 20, 1928 .$57,584 1 147 . 7,125 *June 20, 1928 $54,286 ' 415 7,125 *July 20, 1927 $32,662 9,758 26,360 ,$64,856 . 57,480 . 83,250 $61,826 55,453 81,856 $68,780 39,112 84,073 . 59.5% 60.3% 49.7% Debits to Individual Accounts — The follow ing table gives the total debits charged by banks to checking accounts, savings accounts, certificates of deposit accounts and trust accounts o f individ uals, firms, corporations and U. S. Government in leading cities of the district. Charges to accounts of banks are not included. *June, 1928 East St. Louis & N atl. S tock Yards, 111..$ 69,625 E l D orado, Ark... . 10,659 Evansville, Ind..... 52,815 Fort Smith, Ark.. . 12,720 Greenville, Miss... . 3,355 Helena, A rk ......... . 3,171 Little R ock, Ark. . 73,129 Louisville, K y ..... . 226,894 Memphis, T e n ..... . 140,486 O w ensboro, K y... . 5,854 Pine Bluff, Ark... . 9,595 Quincy, 111........... . 13,768 St. Louis, M o ....... . 898,011 Sedalia, M o ........... . 4,713 Springfield, Mo...,. 17,383 **Texarkana, . 15,084 *M ay, 1928 *June, 1927 $ 64,802 9,658 53,135 13,125 3,479 3,521 80,161 210,514 140,400 5,528 10,495 12,319 849,315 5,189 18,748 $ 54,521 8,114 57,880 14,479 1,912 3,801 70,929 197,915 145,696 4,769 10,265 13,339 770,137 4,582 16,598 + + — — — — — + + + — + + — — 7.4% 10.4 0.6 3.1 3.6 9.9 9.8 7.8 0.1 5.9 8.6 11.8 5.7 9.2 7.3 14,533 14,754 + 3.8 June, 1928 com p, to M ay, 1928 June, 1927 + 2 7 .7 % + 3 1 .4 — 8.8 — 12.1 + 75.5 — 16.6 + 3.1 + 14.6 — 3.6 + 2 2 .8 — 6.5 + 3.2 + 16.6 + 2.9 + 4.7 + 2.2 T otals............ $1,557,262 $1,494,922 $1,389,691 + 4.2 + 1 2 .1 (000 om itted ). bank in Texarkana, T exa s n ot in E ighth D istrict. * In thousands 2.2 per cent between June 13 and July 18 and on the ** Includes one (Compiled July 21, 1927) ...$ *June 13, *July 20, 1927 1928 31 t29 BUSINESS CONDITIONS IN T H E U N ITED STATES P R O D U C T IO N — Activity of manufacturing indusries declined slightly in June and there was a decrease of about six per cent in the output of minerals, owing to smal ler production of coal. The manufacture of iron and steel decreased in June by somewhat more than the usual sea sonal amount, but there are indications of no further de clines in July, and the industry was somewhat more active than a year ago. Production of floor and activity of cotton and wool mills also declined in June. Automobile produc tion showed considerably less than the usual seasonal decline in June, and weekly employment figures for Detroit firms were in about the same volume at the end of June as a year ago and those of department stores were smaller. Freight carloading for practically all classes of com modities declined in June and continued in smaller volume than a year ago. During the first two weeks of July, how ever, owing to increases in loadings of grain and miscel laneous commodities, total loadings were larger than in the corresponding period of 1927, but continued below the high level of 1926. P R IC E S — The general level of wholesale commodity prices declined in June and Bureau of Labor Statistics index, Index numbers of production of manufactures and minerals, adjusted for seasonal variations (1923-25 average= 1 0 0 ). Latest figures, J u n e: M anufactures, 109; Minerals, 100. Index o f United States Bureau o f L abor Statistics (1 9 2 6 = 1 0 0 . Latest figures, J une: Farm products, 106.7; non-agricultural com m o dities 95.2. indicate that operations of automobile plants were well maintained during the first three weeks of July. The manufacture of agricultural implements and machine tools continued in June at the high level reached last spring. Production of lumber, copper and shoes and activity of silk mills increased in June. Contracts awarded for new buildings continued large in June and total awards for the first half of the year ex ceeded those for any previous corresponding period. There were increases over last year in contracts for residential, industrial, public and educational buildings. Awards dur ing the first three weeks in July were in somewhat smaller volume than for the corresponding period last year. The July estimates of the Department of Agriculture indicate a yield of wheat of 800,000,000 bushels, a decrease of 8 per cent from the harvested yield of 1927, and a yield of corn of 2,736,000,000 bushels, a reduction of 2 per cent. The Pro- which had advanced from 96 per cent of 1926 average in March, the low point for the year, to 98.6 per cent in May, declined in June to 97.6 per cent. The decline in the all commodities index reflected decreases in those groups which had advanced most rapidly in previous months, farm pro ducts, foods, and hides and leather products. Prices of live stock and meats, which are included in these groups, however, showed further advances in June, and there was also an increase in prices of building materials, while prices of silk and rayon, fertilizer materials, house furnishings, and automobile tires declined. During the first three weeks in July there were declines in the prices of wheat and cot ton, and advances in cattle and hogs. B A N K C R E D IT — Member bank credit, after rising to a record volume early in July, declined somewhat during the two following weeks and on July 18 total loans and in vestments of reporting banks in leading cities were about $160,000,000 smaller than four weeks earlier. The decrease was largely the result of reduction by about $125,000,000 in W eek ly rates in N ew Y ork m oney m arket: Commercial paper rate on 4-to-6 m onths paper and acceptance rate on 90-day paper, M onthly averages o f daily figures fo r 12 Federal R eserve banks. Latest figures are averages of first 23 days in July, duction of oats, barley, white potatoes, and tobacco is expected to be larger than last year. The acreage of cotton in cultivation on July 1 was estimated at 46,695,000 acres, an increase of 11 per cent as compared with that of a year ago. T R A D E — Merchandise distribution at retail and wholesale was seasonally smaller in June than in May. Sales of department stores declined by about the usual seasonal amount, while declines in sales of chain stores were smal ler. Sales of wholesale firms in most lines showed a more than usual seasonal decline. Compared with a year ago sales of department stores and chain stores were larger and those of wholesale firms were smaller. Stocks of wholesale the banks’ investment holding, but reflected also a decline in the volume of loans on securities, following a temporary increase over the mid-year. Contrary to the usual seasonal trend, loans largely for commercial purposes were in record volume during the period. Member bank borrowing at the reserve banks showed a decline following the mid-year settlement period, but the volume on July 25, at slightly more than $1,000,000,000, was somewhat larger than five weeks earlier, Holdings of ac ceptances and United States securities declined. In July there were further advances in open market rates for com mercial paper and bills, and discount rates at seven of the Federal reserve banks were raised from 4% to 5 per cent.
@FedFRASER