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Business Conditions Seventh Federal Reserve District MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAGO Volume 14, No. 5 General Summary EASONAL factors stimulated activity during March S in Seventh district manufacture and merchandising of commodities, but with the exception of one or two foodproducing lines, conditions have not as yet shown better ment over the early months of 1930, although differences are becoming smaller in some instances. Department store sales and chain store trade recorded seasonal improvement in March over the preceding month, as did various phases of wholesale distribution. Manu facturing lines showing increased output included auto mobiles, iron and steel, steel and malleable castings, fur niture, and leather and shoes. Building contracts awarded in the district recorded an unusually large gain for the month, and the decline from a year ago in both residen tial and other building was small; distribution of build ing materials likewise reflected seasonal expansion. Fur ther improvement took place in employment in reporting manufacturing groups. Weather conditions in recent weeks have given a more favorable aspect to agricultural conditions in the Seventh district. The winter wheat crop is in very good condi tion, though smaller than a year ago, while farm work is progressing satisfactorily and seeding is nearing comple tion. The marketing of wheat through primary centers was heavy during March, but that of corn and oats con tinued small. Production of butter and Wisconsin cheese expanded in March over February and that of meat de clined, while as compared with March last year, butter and meat production showed a gain and cheese manufac ture decreased; distribution of these commodities totaled larger than a month previous but with the exception of butter was smaller than a year ago. Reporting member banks of the district recorded gains FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions of dollars) Change From April 15 March 18 April 16 ^ „ Total Bills and Securities........................................ Bills Discounted.......... .............................................. Bills Bought................................................................ U. S. Government Securities................................. T.otal Reserves............................................................ Total Deposits............................................................ Federal Reserve Notes in Circulation.................. Ratio of Total Reserves to Deposit and Federal Reserve Note Liabilities Combined............ ♦Number of points. 1931 $116.0 12.4 22.6 81.1 468.2 334.1 212.5 85.6 1931 $+1.4 —1.2 +2.7 0 +53.1 +3.2 +52.3 ' 1930 $—5.3 —12 5 —3A +10 6 -71.6 —22.7 —54.8 +1.1* —0.9* April 30, 1931 in total loans and in investments between the middle of March and the middle of April, with a moderate increase in demand deposits and a substantial expansion in time deposits. Borrowings of member banks from the Federal Reserve Bank remained light. Changes in loan rates of Chicago banks have been negligible during recent weeks. Credit Conditions and Money Rates The principal changes in factors affecting member bank borrowing at the Reserve bank during the period March 18—April IS were a substantial growth in demand for currency reflecting for the most part banking dis turbances in some portions of the district, an excess of 25 million dollars in local Treasury expenditures over receipts, and a gain of about 23 millions in funds through inter-district settlements for commercial and financial transactions. The two factors last mentioned, coupled with a small increase in reserve bank float, were of suffi cient magnitude to offset by a slight amount those making for increased borrowing—currency demand, and minor changes in other factors—so that member bank borrow ing at the Reserve bank declined slightly more than one million dollars on April IS as compared with March 18. The table below presents in detail the analysis of factors influencing the volume of member bank recourse to the Reserve bank. FACTORS IN MEMBER BANK BORROWING AT THE RESERVE BANK OF CHICAGO Changes between March 18 and April 15, 1931 (In millions of dollars) hanges making for decrease in member bank borrowing: 1. Excess of local Treasury expenditures over receipts........... 2. Funds gained through inter-district settlements for com mercial and financial transactions............................................. 3. Increase in reserve bank float................................................ FEDERAL 25.19 23.15 1.51 Total. ................................................................................................. 49.85 Changes making for increase in member bank borrowing: 1. Increase in demand for currency............................................... 46.23 2. Increase in member bank reserve balances............................ 0.92 3. Decrease in holdings of acceptances (local transactions). . 0.83 4. Increase in unexpended capital funds...................................... 0.38 5. Increase in non-member clearing balances............................. 0.19 6. Sales of gold to industry............................................................... 0.O6 Total................................................................................................... Absorption of this excess: Decrease in member bank borrowings (discounts for member banks)............................................................ 48.61 124 Member Bank Credit On April IS total loans and investments of reporting member banks were 90 million dollars in excess of April 16, 1930, and since March 18 of this year had gained but slightly. Loans on securities on April IS declined about 120 millions from mid-April a year ago, and all other (commercial) loans by approximately the same amount. Investments showed a gain in the yearly com parison of more than 325 million dollars. Time deposit aggregates of reporting members increased over 140 mil lion dollars from April 16, 1930, and net demand deposits totaled less by approximately 85 millions. Both types of deposits registered increases over March 18 this year. A range of 3 to 5 J4 per cent was reported by six down town Chicago banks as the prevailing rate April 15 on customers’ prime commercial loans, whereas a month pre vious 3 to 6 per cent was given. The average rate earned on loans and discounts during the calendar month of March, as reported by these six banks, was 4.51 per cent, against 4.60 for February and 5.45 per cent in March a year ago. The prevailing rate on customers’ prime com mercial loans in Detroit on April 15 was 4J4 to 5 per cent, as compared with 4J4 to 5J4 per cent in March, while the average rate earned during the month of March was 5*36 per cent, a decline of 7 points from the 5.43 reported in February; a year ago the item stood at 5.93 per cent. Dealers’ sales of commercial paper in the Middle West continued during March to aggregate less than half the customary volume for the month, being 2 per cent smaller than in February and 58 per cent under a year ago. Financing by means of commercial paper was in only moderate proportions during the period, but demand for this class of investment was fair to good. March sell ing rates ranged from 2% and 2J4 per cent for low to 2% and 3J4 per cent for high; the greater portion of the sales was transacted at 2J4 and 2 J4 per cent. Outstand ings of commercial paper in the Middle West declined to a new low level on March 31, being 11J4 per cent less than at the end of February and 50 per cent below the corresponding date of 1930. Sales in the first half of April totaled approximately the same as for the corre sponding period of March; there was little change re corded in either supply or demand. Rates closed on April 15 at 2% per cent for low and 2J4 to 3J4 per cent for high, with a preponderance of the paper moving at 2J4 to 2 J4 per cent. Local purchases of bills by dealers in the Chicago bill market declined to a low level during the five weeks ended April 15, but the total supply expanded and was in mod erate volume, local purchases being greatly augmented by rather liberal receipts of acceptances from Eastern mar kets. Average weekly sales increased over the preceding period, owing to an exceptionally active demand from local banks during the first half of April and to a fair inquiry from out-of-town banks. Shipments to Eastern markets aggregated less than from February 12 to March 11. Rates remained steady, closing on April 15 at 1J4 per cent for 30-day offerings to 1J4 per cent for those of CONDITION OF REPORTING MEMBER BANKS, SEVENTH DISTRICT (Amounts in millions of dollars) 180 days. Holdings were at an unusually low level on April 15. AVERAGE WEEKLY TRANSACTIONS OF REPORTING DEALERS IN THE CHICAGO BILL MARKET March 12. 1931 to April IS, 1931 Per Cent Change in Comparison with Period From Feb. 12 to Mar. 11 Mar. 13 to April 9 Bills purchased.............. Bills sold......................... Holdings*........................ 1931 —31.8 +119.9 —92.6 1930 —79.7 -36.1 —98.7 *At end of period. Bills in very substantial volume were executed by Seventh district accepting banks during March, aggregat ing, however, almost one-fourth less than a year ago. Purchases in March, following a sharp recession in Feb ruary, rose to the level of January, and were heavy for this time of year, though below the corresponding period of 1930. Sales, nearly 70 per cent of which were bills of other banks, attained die highest level on record (January 1923) reflecting in part reinvestment by cus tomers of funds derived during the month from maturing acceptances previously held by them; a tendency on the part of the accepdng banks to improve their cash position was also a factor. Portfolios of the accepting institutions, accordingly, declined to the lowest level since September, and the liability of the banks for outstanding bills was less than for any other reporting date since June 30,1930. These banks executed acceptances in 11J4 per cent greater value during the first half of April than in the correspond ing weeks of March. Increased financing by means of acceptance credits was reported for packing-house prod ucts, sugar, iron and steel, iron ore, raw furs, and seven teen other commodities, while borrowing declined for grain, coal, machinery, coffee, canned goods, and ten other lines. TRANSACTIONS IN BANKERS’ ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Per Cent Change February 1931 Total value of bills accepted............... Purchases.................................................. Sales......................................................... Holdings*.................................................. Liability for outstandings*.................. in March 1931 From March 1930 +21.3 +25.3 +128.8 -54.5 —4.6 —24.1 —26.7 +11.8 -28.8 —16.3 ♦At end of month. Security Markets Moderate activity prevailed in the Chicago bond mar ket during March, with deliveries to banks and institu tions in about the same volume as last year, although a falling-off in deliveries to individual investors was noted. Demand has continued to favor issues of the highest grade, with some preference shown for utilities, indus trials, and rails. Bond prices were firm during most of the month, and on several of the outstanding securities advanced somewhat. In the latter part of the month, however, and the first two weeks of April, prices began to drop from previous levels, the result in large measure of uncertainty in the speculative market. The volume of new issues offered in March, though not quite so large as in previous months, was reported as being favorably . Change From April IS March 18 April 16 Total Loans and Investments........................... . . Loans on Securities.............................................. . . All Other Loans..................................................... Investments............................................................ 1931 $3,347 1,183 VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT (Amounts in millions of dollars) Per Cent of Increase or Decrease From Mar. 1931 Feb. 1931 Mar. 1930 1931 * +9 +18 -16 +7 1930 $ +90 -121 -117 +328 Chicago............................................................... . . Detroit, Milwaukee, and Indianapolis. . . . . $3,152 1,328 +16.4 +24.6 -27.6 -15.2 Net Demand Deposits........................................ .. Time. Deposits....................................................... . . 1,821 1,352 +19 +44 -85 +142 Total four larger cities................................... . . 34 smaller centers.............................................. . . $4,480 804 +18.7 +14.1 -24.3 -20.6 Borrowings from Federal Reserve Bank. ... .. 2 -1 -6 Total 38 centers............................................... . . $5,284 +18.0 -23.8 Page 2 received. Some strength was shown in foreign bonds dur ing the month. Prices on the Chicago Stock Exchange continued to move within a narrow range during most of March; in the latter part of the month and the first half of April, however, a slight downward tendency devel oped. The average price of twenty leading stocks * on April 17 amounted to $85.71, representing a drop of more than eight dollars from the corresponding day a month previous. * Chicago Journal of Commerce. Agricultural Products Winter wheat production in the five states including the Seventh Federal Reserve district is estimated by the United States Department of Agriculture as 87,000,000 bushels, based on the April 1, 1931 condition, as com pared with the 95,077,000 bushels harvested in 1930. The decline is due entirely to a reduction in acreage from the preceding year, as the abandonment has been very light this spring and the crop is in exceptionally fine con dition. March 1 intentions of farmers indicated some increase in 1931 over last year in the acreage planted to potatoes, barley, and corn, and a slight reduction for hay, sweet corn, and dry beans. The oats acreage remains about the same as in 1930, but a gain of 30 per cent is shown for soy beans and a decrease of 25 per cent for spring wheat. Surface soil is reported as having been greatly improved in moisture content by recent rains, but there is a decided deficiency of moisture in the subsoil; the latter condition is not regarded as serious, however, providing that normal rainfall is received during the re maining spring months. Plowing and other farm work have made excellent progress because of the favorable weather; the seeding of oats and barley is nearing com pletion throughout the five states of the district. Re ports of the Department of Agriculture show a reduction in cattle feeding operations in this area as compared with a year ago. The Government figures place the 1931 crop of winter wheat in the United States at 643,920,000 bushels, or nearly 100 million bushels more than the five-year aver age and 40 million bushels greater than the 1930 harvest. Grain Marketing Receipts of wheat at primary markets in March ex ceeded the volume for that month during the previous ten years, and contrary to the usual trend, were slightly larger than in February. March shipments showed the usual increase over February, totaling larger than last March and the five-year average for the month. An nouncement that stabilization operations would cease with the coming of the new crop, which it is estimated will be exceptionally large, encouraged marketing of large quan tities of wheat earlier than usual. The increase in the United States visible supply of wheat continued during March, the figure for the end of the month being the largest on record with the exception of the period between September 15 and October 15, 1930; a decline followed during the first two weeks of April. Exports improved in March over the extremely low February figure, but totaled only half the volume for the same four weeks of 1930. Marketing of corn and oats continued small in March, although shipments increased somewhat over February. Grain future transactions at Chicago reflected the size of available supplies, wheat sales being larger than in either January or February, while com trading was less than in recent months. Cash wheat prices were steady during March and gained about 3 cents a bushel in the first half of April; corn and oats averaged a little lower than in February. Movement of Live Stock The volume of live-stock receipts at public stock yards in the United States reflected seasonal marketing tenden cies during March, with the number of cattle, calves, and lambs greater and that of hogs smaller than in the pre ceding month. Cattle and hog receipts were reduced approximately 2J4 per cent from last March; the reces sion in these marketings from the five-year average was less marked for cattle but larger for hogs than had been evidenced in either previous month of 1931. Lamb re ceipts fell below the corresponding period of 1930 for the first time this year, though exceeding the 1926-30 average for the month by 25 per cent. Reshipments of cattle to feed lots continued to be at a low level during March; those of lambs remained larger than in 1930, but totaled a little smaller than the usual volume for the month. Meat Packing ' March production at slaughtering establishments in the United States aggregated Sl 2 per cent less than in the / preceding month but 7 per cent heavier than a year ago. Payrolls at the close of March also reflected a reduction from February of 4 per cent in number of employes, 3 per cent in hours worked, and of 3J4 per cent in wage payments. Sales billed to domestic and foreign customers totaled one per cent greater in value than in February, but were 23 per cent under last March, the latter decline being principally due to lower prices than in 1930. Do mestic demand for a number of the commodities showed some improvement in March over the earlier month. Prices of most pork products averaged higher than in Feb ruary, beef and veal in general tended slightly downward, and there was a decline in quotations for sweet pickled pork and smoked meats; lamb prices remained practically unchanged. Inventories of packing-house commodifies in the United States decreased slightly on April 1 and were below the 1926-30 average for that date, though con tinuing somewhat in excess of a year ago. A fair trade was reported in domestic markets early in April. Shipments for export declined in March from Febru ary, owing to a reduction in European demand for lard following rather liberal purchases of that commodity dur ing the earlier month when prices were at a low level. A fair tonnage of lard was moved to Europe on consign, live stock slaughter (In thousands) Cattle Yards in Seventh District, March 1931............................... . Federally Inspected Slaughter, United States March 1931............................... . February 1931......................... . March 1930............................... . Hogs Lambs and Sheep . 194 750 296 123 . . . 635 559 615 3,523 4,142 3,392 1,324 1,223 1,358 416 353 388 AVERAGE PRICES of live stock (Per hundred pounds at Chicago) Native Beef Steers (average). Fat Cows and Heifers............... Calves............................................... Hogs (bulk of sales)................... Yearling Sheep............................. Lambs.............................................. Week Ended April 18 March 1931 1931 $8.35 . . $7.60 . 6.10 6.20 . . 7.50 7.20 . . 7.30 7.45 . . 7.35 7.40 8.30 . . 9.00 Month of February 1931 $8.35 5.70 8.50 7.10 7.10 8.15 March 1930 $12.35 8.75 11.20 10.20 8.40 10.20 Page 3 ment terms, in anticipation of the advance in freight rates from Chicago to New York, effective April 1. Foreign trade for current-delivery meats remained light through out the month, although in the United Kingdom a fair demand was reported for certain cuts. British importers have entered into a number of contracts with United States firms for hams to be delivered during the summer. Consignment inventories of packing-house commodities already abroad or in transit from the United States were reported as moderate on April 1. Prices in Europe ruled somewhat under the Chicago parity. Dairy Products Creamery butter production in the Seventh Federal Reserve district continued during March at slightly above the usual level for the month, recording a seasonal ex pansion of 15 per cent over February and an increase of 16^2 per cent over the corresponding period of 1930. The sales tonnage of the district exceeded that of February by 1 Yi per cent, which is a smaller gain than is usual for March, and was 3J4 per cent above a year ago. Produc tion of the commodity in the United States as a whole exceeded that of last March, and consumption was main tained at a high level. Inventories were lower; storage holdings of creamery butter in the United States decreased more than a seasonal amount on April 1 from a month earlier, and the S]A million pound gain over the five-year average was smaller than evidenced on any other report ing date thus far in 1931. March prices averaged higher than those of February, but quotations again eased dur ing the early part of April. American cheese manufacturing in Wisconsin expanded 16 per cent during the four weeks ended March 28 over the preceding period, while distribution from primary centers of the state increased 14 per cent and exceeded current cheese production by 2 million pounds. The de crease of 2j/£ per cent from a year ago in each of these items was less than evidenced during either earlier period of 1931, and the gain over February was more than sea sonal, low prices having tended to stimulate consumer demand. Total inventories of cheese in the United States were reduced by approximately 7*4 million pounds on April 1 from the beginning of March, and were only 3 million pounds in excess of the 1926-30 average, as com pared with an increase of 4 million pounds shown in this comparison during January and February. Quotations declined to the lowest level of any month in years. Industrial Employment Conditions Further improvement occurred during March in em ployment and earnings of reporting manufacturing estab lishments in this district. The gain in the total for ten groups was about the same as that shown in February, and sufficient to offset slight declines in the non-manufac turing totals, giving rise to the first gain in aggregate employment of all groups since September 1929. Seven manufacturing groups and construction work contributed to the aggregate gain. Six of these groups were included in the February increases, namely, rubber, leather, vehicles, textiles, metals, and lumber, while sea sonal expansion in stone, clay, and glass products added this group to those showing increases. Construction work, which has contributed heavily to the falling-off in non manufacturing aggregates, recovered moderately after having declined continuously for seven months in both number of men and pay rolls. Page 4 Further recessions took place in paper and printing, food products, merchandising, and public utilities. The chemicals group lost some of the increase shown in Feb ruary in both employment and total wages; coal mining reduced the number of men employed, although pay rolls increased as a result of fuller operating schedules. Improvement in the farm labor situation was registered on April 1 in comparison with January 1 by the report of the Department of Agriculture, which shows increased demand and smaller supply in all states of this district. Reduction in the ratios of applicants to jobs available at free employment offices in all states except Iowa probably is indicative of the spring migration of casual labor from the industrial towns which predominate in the figures for the eastern states of this district. REGISTRATIONS PER 100 POSITIONS AVAILABLE AT FREE EMPLOYMENT OFFICES Month Illinois Indiana Iowa Wisconsin 1931 March.............................. 228 250 116 123 513 471 197 250 209 246 136 181 329 471 177 186 February ........................ 1930 March............................. February ........................ Manufacturing Automobile Production and Distribution March output of passenger automobiles in the United States, numbering 230,837, totaled the heaviest since last June and showed the fourth successive monthly increase with a gain of 28 per cent over February. The total was 30 per cent below last March, however, and 55 per cent under the same month of 1929, representing the lowest figure for any March since 1922. Truck production fol lowed the trend of passenger cars, the aggregate of 45,096 increasing 14 per cent over the preceding month, but de clining 28 and 37 per cent from March 1930 and 1929, respectively. A further gain took place during March in Midwest dis tribution of automobiles, although the expansion in sales was less than usual for the season and both retail and wholesale distribution totaled considerably below last March which in turn compared unfavorably with March 1929. Stocks of new cars at the end of the month were heavier than a month previous but much smaller than a EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT Week Industrial Group of March 15, 1931 Report Firms Wage Earners No. No. ing Earnings (000 Omitted) $ Changes From February 15 Wage Earn Earn ers ings % % Metals and Products1........ Vehicles.................................. Textiles and Products.... Food and Products............. Stone, Clay, and Glass___ Lumber and Products.... Chemical Products............. Leather Products................ Rubber Products2............... Paper and Printing............. 677 134 159 389 145 316 90 73 9 304 187,495 211,604 31,577 56,366 11,135 33,442 17,325 15,882 6,229 39,682 4,649 6,023 652 1,380 267 640 477 299 183 1,173 +0.5 +2.6 + 1.5 -2.2 +4.0 +0.5 -1.9 +3.2 +6.8 -3.0 +i.i +10.4 +4.4 -4.8 +2.7 +0.3 -0.8 +5.1 +24.7 -3.3 Total Mfg., 10 Groups---Merchandising8.................... Public Utilities..................... Coal Mining.......................... Construction........................ Total Non-Mfg., 4 Groups. 2,296 184 76 32 188 480 610,737 15,743 2,887 806 251 176 +0.9 -0.3 -0.2 -1.6 +5.8 Total, 14 Groups................ 2,776 748,251 1Other than Vehicles. 31,196 90,043 9,485 6,790 137,514 2Michigan and Wisconsin. 4,120 -0.1 +4.0 -4.2 -0.4 +10.3 +32.4 -1.5 19,863 +0.7 +2.8 ’Illinois and Wisconsin. year ago. Used car sales increased to a greater degree than did those of new cars at retail, though likewise de clining from March 1930; salable used cars on hand were reduced somewhat from those held at the end of Feb ruary and were considerably less than on the same date last year. Deferred payment sales in March constituted 48 per cent of the total retail sales of thirty-one dealers reporting the item, which compares with a ratio of 44 per cent in February and 52 per cent a year ago. Iron and Steel Products Further seasonal improvement took place during March in the steel business of the Chicago district, and mill operations the middle of the month were averaging 62 per cent of capacity. The establishment of higher prices on bars, plates, and shapes, effective April 1, stimulated buy ing for the second quarter toward the latter part of the month, but specifications and operations were declining slightly by that time, and at the middle of April the rate of steel ingot output had receded to 55 per cent of capac ity. Greater activity in the automobile industry and some improvement in building construction have been encour aging factors in the market. Pig iron production in the Illinois and Indiana district again expanded in March, the daily average of 14,621 tons being the largest of any month since last August, though only about two-thirds that of March last year. The Chicago scrap iron and steel market has been dull, with prices showing little change. Shipments and production of steel and malleable cast ings by reporting foundries in the Seventh Federal Reserve district expanded in March for the fourth successive month, in conformity to the usual seasonal trend. The tonnage shipped by malleable foundries was the heaviest since last June and that by steel foundries the largest since September. Despite this continued improvement operations were in only about half the volume of March 1930. Orders booked for steel castings fell off slightly during the month and totaled 75 per cent less than a year ago, while those for malleable castings increased some what over the preceding month but were almost 50 per cent smaller than those booked last March. Shipments of stoves and furnaces by reporting firms increased as is usual in March, though totaling 16 per cent under a year ago; orders booked gained in both comparisons, the increase over last March, however, being due to large orders received by one or two companies; production showed little change during the month and was about onefourth less than in the corresponding month of 1930. excess of those in February and shipped a volume 11 per cent greater. These increases were seasonal, comparing with average increases for the period of 2 per cent and 12 per cent, respectively. The volume of unfilled orders out standing at the close of the month dropped, however, standing at only 75 per cent of orders booked during the month as compared with 95 per cent a month previous; partly responsible was a heavy volume of cancellations during March. As compared with a year ago, orders were 14 per cent smaller, shipments 24 per cent, and unfilled orders 11 per cent. Cancellations alone totaled heavier —61 per cent. The rate of operations maintained during the month averaged 53 per cent of capacity as compared with 51 per cent in February and 62 per cent a year ago. Shoe Manufacturing, Tanning, and Hides The manufacturing operations of shoe factories in the Seventh Federal Reserve district continued to expand in March over the exceptionally low level of January, but were 25 per cent below the usual average for the month, and the gain of 13 per cent in production over February was seasonal. Leather tanning continued to trend up ward and remained above a year ago. The total value of sales of leather billed to customers also increased over February but failed to equal that of last March, owing to lower prices in 1931 than in 1930. March quotations re mained steady in comparison with those of a month earlier. Chicago trading in packer green hides and calf skins declined in March from the preceding period, but ship ments from the city and purchases by district tanneries were greater than in February. Prices advanced. Building Material, Construction Work Furniture The expansion over recent months, which occurred dur ing March in practically all lines of building materials in the Seventh district, was seasonal in character and not indicative of a recovery. Demand continued small, the increase in sales being stimulated by favorable weather in most sections. Farmers' requirements for lumber, brick, and tile were restricted by uncertainty with regard to farm income; general construction work was limited to some residential building and repair and government proj ects, including road work; and industrial consumption of hardwoods was only fair. Dollar value of sales by reporting wholesalers of lum ber showed practically no change from February. With prices unstable or declining, retailers and large purchasers were not buying for future needs; hence, wholesalers’ Seventh district furniture manufacturers booked orders during the month of March aggregating 5 per cent in wholesale and retail lumber trade midwest distribution of automobiles Changes in March 1931 from previous months Class of Trade Feb. 1931 Per Cent Change From February 1931 New Cars Wholesale— Number Sold..................................... Value................................................... Retail— Number Sold..................................... Value................................................... On Hand March 31— Number.............................................. Value................................................... Used Cars Number Sold..................................... Salable on Hand— Number.............................................. Value...................................................... March 1931 : Per Cent Changi From March 1930 Included + 16.3 + 19.0 -37.5 -40.5 25 25 +9.5 +6.1 -41.4 -38.1 51 51 +14.5 +9.6 -29.2 -28.7 52 52 Wholesale Trade: Sales in Dollars............................... Sales in Board Feet........................ Accounts Outstanding1............... Retail Trade: Sales in Dollars........................... Sales in Board Feet........................ Accounts Outstanding1................. March 1930 Number of Firms or Yards +0.2 -6.6 +0.0 -35.8 -33.6 -15.5 13 11 10 +27.4 +23.3 +2.8 -28.6 -16.0 -2.8 198 34 190 Ratio of accounts outstanding1 to dollar sales during month +16.4 -19.9 52 . Wholesale Trade................................. Retail Trade......................................... -4.6 -3.2 -34.3 -40.7 52 52 March 1931 Feb. 1931 March 1930 lEnd of Month. 187.7 404.5 180.9 471.8 138.3 305.6 Page 5 stocks continued higher than a year ago. The lumber movement at Chicago in March was about one-half the five-year average for the month and considerably under the small volume of March 1930. For the first quarter of 1931, compared with the same period of 1930, an even greater loss was shown. Retail building materials moved in much larger volume than in February, which was the lowest month on our records. Prices at retail suffered further declines at points in this district, and many lumber yards, in view of the uncertain demand, were carrying from 10 to 30 per cent smaller stocks than a year earlier. Midwestern cement production in the first quarter of 1931 was about half the average for the same period in the past five years, but shipments have held up somewhat better, so that stocks at the end of March did not greatly exceed the average for that date and were even smaller than a year previous. February distribution in the five states including the Seventh district totaled about 65 per cent of the large volume in February 1930. Clay-prod ucts manufacturers at the end of March were carrying large stocks relative to current demand, and many plants were shut down, while others operated at 50 to 80 per cent of capacity. Prices for cement and brick have continued low, but have shown more stability than materials in general. of the district gained 41 per cent over the preceding month, but totaled 48 per cent below March 1930. BUILDING CONTRACTS AWARDED IN THE SEVENTH DISTRICT L3ZJ038J34 ] TOTAL 1289331834 ■RESIDENTIAL 065^29,058 , 1 152,550224 713,751,083 Building Construction Seasonal expansion in building activity was reflected in contracts awarded in the Seventh Federal Reserve dis trict during March, both residential and total contracts recording decidedly larger gains than usual for the month. The current volume, though remaining below the level of a year ago, showed the smallest declines in the compari son since the end of 1929. BUILDING CONTRACTS AWARDED* SEVENTH FEDERAL RESERVE DISTRICT Total Contracts Period March 1931........................................................ Change from February 1931.................. Change from March 1930........................ Change from same period 1930............ Residential Contracts *69,099,402 +138% -6% $129,876,568 -14% *15,139,296 + 126% -8% *28,287,221 -22% ♦Data furnished by F. W. Dodge Corporation. A total of 5,171 permits was issued during March in 103 cities of the Seventh district, representing an esti mated cost of proposed work of about 28 million dollars. This rather large volume of estimated valuation, while showing a seasonal increase of 68 per cent over the Feb ruary figure, also registered a gain of 20 per cent over a year ago, the permit issued for a large office building in the city of Chicago being responsible for this latter in crease. The number of permits issued in reporting cities 3 MCE. YEAR 3H0S. 1931 Commodity Net Sales Hardware............. Dry Goods........... Drugs.................... Shoes..................... Electrical Supplies............ Stocks Accts. Outstand. Collec tions Ratio of Accts. Outstand YEAR 3M05. YEAR 3M0S 1928 1921 1926 The gains shown during March over February in re porting lines of wholesale trade were seasonal in charac ter, and those in most groups failed to equal the eightyear average for the month, with electrical supplies re cording a slight decline instead of the usual expansion in sales. Dry goods furnished an exception with a 26 per cent increase over February, and the 13 per cent gain in the wholesale grocery trade was. a little better than aver age for this season, but the increases of 33 per cent in hardware, of 5 per cent in drugs, and of 49 per cent in shoes were smaller than usual. Declines from a year ago, which may be noted in the table, totaled less than in a similar comparison for February in the dry goods and shoe trades, while those in groceries, hardware, drugs, and electrical supplies were larger than a month previous. First-quarter sales in the various groups showed declines from the corresponding period of 1930 as follows: gro ceries, 10^2 per cent; hardware, 31 per cent; dry goods, DEPARTMENT STORE TRADE IN MARCH 1931 Locality Per Cent Change March 1931 From March 1930 Ratio of Per Cent Change Mar. Col First Quarter 1931 lections to From Accounts Same Period 1930 Outstanding Feb. 28 Net Sales ing to Net Sales Stocks End of Month Net Sales 1931 1930 -13.1 -16.7 -23.1 -6.5 -16.9 -9.2 -10.0 -4.4 -7.7 -8.5 30.1 35.3 41.5 30.3 37.6 39.2 34.1 35.6 -14.6 -8.8 35.0 36.1 —8.5 -14.2 -34.5 -13.5 -27.2 —8.2 -18.3 -«9.5 -7.4 -8.1 —8.1 -30.0 -22.6 -15.6 -30.2 96.3 260.6 309.4 149.7 412.2 Chicago........ Detroit......... Indianapolis. Other Cities. -8.5 -7.4 -1.8 -2.5 -12.7 -38.9 -15.4 -31.5 -33.5 165.8 7th District. -7.9 YEAR 3N0S. Merchandising —9.4 -32.7 -22.6 -15.4 -21.0 Page 6 3M0S. 1929 Data furnished by F. W. Dodge Corporation. WHOLESALE TRADE IN MARCH 1931 Per Cent Change From Same Month Last Year YEAR 1930 25 per cent; drugs, 12 per cent; shoes, 18 per cent; and electrical supplies, 35 per cent. Seventh district department store trade in March re flected seasonal factors and the larger number of trading days than a month previous. The gain of 17 per cent over February in aggregate sales of 109 stores was greater than the 11 per cent expansion shown for the same month last year when Easter came at a later date with the pre ponderance of Spring buying falling in April, but was somewhat smaller than the average for the month. The volume of trade varied considerably among the larger cities of the district, sales by reporting stores in Indianapolis gaining 29 per cent over February and those in Milwaukee 25 per cent, while Chicago and Detroit stores recorded increases of only 13 and 18 per cent, re spectively; stores in smaller cities showed an aggregate expansion of 17 per cent. About 15 per cent of the re porting firms sold a larger dollar volume of merchandise in March this year than a year ago; totals for Chicago and Detroit continued to show greater declines in this comparison than did those for Milwaukee and Indianapo lis where decreases were small. District sales declined 8 per cent from a year ago and for the first quarter of 1931 totaled 9 per cent less than in the corresponding three months of 1930. Stocks increased in about the usual sea sonal amount over the end of February but were much smaller than on March 31 last year. Sales of shoes at retail, though expanding 30 per cent in March over February, showed a smaller increase for the month than in any of the past five years except 1930, and the aggregate for reporting dealers and department stores declined 2 per cent from March last year, despite gains recorded by a large number of department stores. The dollar volume sold in the first quarter of 1931 totaled 3 per cent below the same period a year ago, which is a smaller decline, however, than shown in most other re porting merchandising lines. Stocks on hand the end of March exceeded those of a month previous by 10 per cent, but were 8 per cent smaller than on the correspond ing date last year. A gain of 12 per cent over the preceding month was recorded during March in sales of furniture and house furnishings by reporting dealers and department stores of the district, but the volume aggregated 13 per cent under a year ago; installment sales by dealers totaled 6 and 23 per cent smaller in the respective comparisons. An in crease of 4 per cent was shown in stocks on hand March 31 over the end of February; they remained considerably lighter than in 1930. Most reporting groups of chain store trade, which in clude groceries, drugs, five-and-ten-cent stores, furniture, cigars, musical instruments, and men’s and women’s clothing, had larger sales in March than a month previous, both aggregate and average sales per store increasing 10 per cent over February. With the exception of a small gain in the total of drug sales, continued declines from a year ago were general; aggregate sales were less by 6 per cent in this comparison and average sales per store 8 per cent smaller. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the month indicated. using the monthly average for 1923-1924-1925 as a base, unless otnerwise[indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following month. Data refer to the Seventh Federal Reserve District unless otherwise noted.) No. of m _ Firms Meat Packing—(U. S.)— bales (in dollars)........................... 63 Casting Foundries— Shipments: Steel—In Dollars........................ IS In Tons............................... 15 Malleable—In Dollars .... 23 In Tons......................... 23 Stoves and Furnaces— Shipments (in dollars).......................... 11 Furniture— Orders (in dollars)................................. 25 Shipments (in dollars).......................... 25 Flour— Production (in bbls.)............... 26 Output of Butter by CreameriesProduction........................................... 67 Sales.............................................. 69 Wholesale Trade—Net Sales (in dollars): Groceries...................................... 31 Hardware................................ 14 Dry Goods........................................... 9 Drugs............................................ 14 Shoes............................. 8 Retail Trade (Dept. Stores)— Net Sales (in dollars): Chicago.......................................... 26 Detroit....................................... 5 Indianapolis........................................ 5 Milwaukee....................... 5 Other Cities........................................ 50 Seventh District................................ 91 Automobile Production (U. S.)—• Passenger Cars........................................ Trucks.................................................. Building Construction—• Contracts Awarded (in dollars): Residential........................................... Total................................................. Iron and Steel— Pig Iron Production:* Illinois and Indiana.......................... United States..................................... Steel Ingot Production—(U. S.)*.. . Unfilled Orders U. S. Steel Corp___ Mar. 1931 Feb. 1931 Jan. 1931 Dec. 1930 Nov. 1930 Oct. 1930 Mar. 1930 Feb. 1930 Jan. 1930 Dec. 1929 Nov. 1929 Oct. 1929 79 78 84 85 89 105 103 109 113 104 111 129 44 43 35 54 40 41 31 16 34 34 30 45 31 30 27 40 32 30 25 36 42 42 31 44 86 92 72 102 77 78 73 103 80 84 69 98 84 93 60 83 79 86 60 81 87 92 73 99 81 69 50 86 118 200 96 86 78 125 167 256 58 62 55 57 68 38 41 43 51 52 61 81 68 82 68 81 103 62 55 80 86 98 112 149 93 94 101 100 103 118 97 97 108 92 97 123 102 95 89 94 93 95 91 99 78 94 94 96 88 92 81 81 84 94 82 86 81 88 96 92 85 55 51 86 58 76 41 41 82 39 83 42 42 88 34 87 59 51 84 45 86 63 55 83 63 104 88 71 101 83 94 82 67 100 73 84 61 58 91 51 94 58 55 97 35 91 76 66 96 57 101 92 78 100 6Q 113 112 97 113 08 82 109 88 93 79 88 73 95 68 75 68 76 79 87 80 85 72 80 165 184 154 167 146 165 99 121 97 111 96 104 110 118 98 116 103 110 90 119 90 95 90 96 82 104 77 84 74 85 87 101 83 94 73 88 188 222 172 184 160 188 126 161 120 137 114 131 126 152 113 131 110 128 79 120 62 105 47 89 42 84 35 90 40 102 114 167 96 129 80 08 31 73 57 1 28 109 161 52 101 23 42 22 46 20 51 36 58 42 77 56 108 33 56 34 58 38 110 66 *s 89 122 84 67 87 84 78 62 79 83 72 56 69 87 72 55 58 83 76 63 67 76 79 71 76 73 129 107 124 96 127 103 128 94 109 93 106 94 113 93 87 93 124 108 102 86 132 118 126 86 ♦Average daily production. Page 7 PERCENT INDUSTRIAL PRODUCTION NATIONAL SUMMARY OF BUSINESS CONDITIONS (By the Federal Reserve Board) URTHER increase in industrial activity was reported for the month of March change from February. Factory and Fwhich usually shows little usual seasonal amount between the employmentFebruary pay rolls increased by the middle of and the middle of March. The volume of building contracts awarded in March showed considerable growth, largely of a seasonal nature. The general level of wholesale prices continued to decline. Production Index number of industrial production, adjusted for seasonal variation. (1923-1925 average = 100.) Percent PERCENT 120 -- FACTORY EMPLOYMENT Federal Reserve Board’s index of factory employ ment, with adjustment for seasonal variation. (1923 1925 average = 100.) PER GENT WHOLESALE PRICES farm Products and Employment Industrial production increased 2 per cent further in March, and the Federal Reserve Board’s seasonally adjusted index stood at 88 per cent of the 1923-1925 average, compared with 104 per cent in March 1930. There was a considerable increase in daily average output of steel, which ordinarily shows little change from February to March, while production of automobiles increased by about the usual seasonal percentage, activity at cotton mills increased slightly contrary to the ordi nary seasonal movement, and there was a substantial increase in output of shoes. In the first half of April steel mill activity declined. The number of men employed at factories increased between the middle of Feb ruary and the middle of March by about the usual seasonal amount. In the iron and steel and automobile industries somewhat larger than usual increases were shown and at textile mills and shoe factories, where the number employed ordinarily declines in March, substantial increases in employment were reported. In the agri cultural machinery and petroleum refining industries and at carbuilding shops employment declined contrary to the usual seasonal trend, and in the automobile tire and fertilizer industries employment increased less than usual. Volume of building contracts awarded in March increased considerably from February, according to the F. W. Dodge Corporation, reflecting in large part devel opments of a seasonal character. Contracts for residential building increased sea sonally and were in about the same volume as a year ago, while contracts foT public works and utilities rose to the high level of March 1930. Agriculture Definite improvement in moisture conditions in the drought area was an impor tant development in March and the first week of April; supplies of moisture in the topsoil have been replenished, but the subsoil continued to be dry in certain areas, particularly in the spring wheat belt. Department of Agriculture estimates, based on April 1 conditions, indicate a winter wheat crop of 644,000,000 bushels, about 100,000,000 bushels larger than the five-year average and 40,000,000 more than last year. Intentions to plant, as reported March 1, indicate a considerable reduction in spring wheat acreage and an increase in acreage to be planted to corn. Distribution Volume of freight carloadings increased seasonally in March and department stare sales increased during the Easter season by about the usual amount. Prices Indexes of the United States Bureau of Labor Statistics (1926 = 100). The general level of wholesale commodity prices continued to decline in March, according to the Bureau of Labor Statistics, reflecting chiefly reductions in the prices of petroleum products, bituminous coal, and textile products. Prices of farm products increased slightly, and there was a substantial advance in the price of hides. In the first half of April, prices of many commodities including cattle, cot ton, rubber, and coffee declined, while the price of wheat advanced. Bank Credit BILLIONS OF DOLLARS BILLIONS OF DOLLARS MEMBER BANK CREDIT All Other Loans Loans cm Securities. Investments Monthly averages of weekly figures for reporting member banks in leading cities. Latest figures, aver ages of first 3 weeks in April 1931. Page 8 Loans and investments of member banks in leading cities, which had increased in the middle of March as the result of Treasury operations, showed a decline for every week between March 18 and April 8, but on the latter date were still $270,000,000 larger than four weeks earlier. Investment holdings of these banks were at a new high figure on April 8, owing largely to an increase in their holdings of United States Government obligations, while loans on securities as well as all other loans showed a decline for the four-week period. Volume of reserve bank credit has fluctuated since the middle of February around a level of $925,000,000. Continued imports of gold, deposited by member banks with the reserve banks, have provided the member banks with sufficient funds to meet an increase in the demand for currency. United States Government security holdings of the reserve banks have remained at the level of $600,000,000 established last summer, while discounts for member banks have continued to decline and holdings of purchased acceptances have fluctuated in response to temporary changes in the demand for reserve bank credit. Money rates showed little change from the middle of March to the middle of April. Rates on commercial paper declined further from a prevailing rate of 2 per cent to a range of 2J4-2J4 per cent, while bond yields increased slightly.
@FedFRASER