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Business Conditions Seventh FEDERAL Volume 19, No. 5 Reserve DISTRICT MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAGO April 30, 1936 GENERAL SUMMARY RISING trend, greater than seasonal in degree i Field work made fair to good progress after the in some instances, featured Seventh district middle of April. business activity during March, and first-quarter Sales gains were recorded in March over Febru data with few exceptions showed volumes produced ary in all reporting wholesale trade groups, which and sold in excess of those for the first three months include groceries, hardware, drugs, and electrical of 1935. supplies, although the increase in the grocery trade Practically all reporting manufacturing groups was less than seasonal. All showed increases over recorded improvement in March over the preceding a year ago that were higher than in similar com month. These groups include the automobile, iron parisons for January and February. Groceries were and steel, malleable and steel casting foundry, stove the only group to experience a decline in first-quarter and furnace, building construction, building mate business from the same period last year. Retail rials, and furniture industries. The automobile and trade data recorded favorable trends in March, the building construction industries experienced excep increase in sales of department stores being seasonal tionally sharp rises in March, while steel mills had a in extent and the gain in the retail shoe and furniture satisfactory month owing to increased demand from trades better than average. Chain store sales showed the railroads and from automobile plants. Employ some increase in March but totaled slightly under ment followed the general trend of business in ex the year-ago volume. panding over a month earlier. Total loans and investments of reporting member Although production of foodstuffs, such as pack banks in the Seventh district were more than 100 ing-house commodities and dairy products, increased million dollars smaller on April 15 than four weeks in March over February, distribution of the latter previous, due to a decline in the banks’ holdings of group declined, while that of the former gained in Government securities (direct), as loans and hold tonnage but was less in value due to lower prices ings of other securities increased in the period. De prevailing. However, both production and sales of mand deposits in these banks showed some decline these products were heavier than a year ago. Grain and time deposits a substantial increase between the marketings rose sharply in March to the highest two dates. Sales of commercial paper in the Middle level since last autumn. Farm work in mid-April West increased in March over February and new was a week to ten days behind normal schedule in financing by means of bankers’ acceptances de this district because of the frozen and damp con dition of the soil in March and early April; midcreased, following opposite trends to those which April prospects for fruit likewise were unfavorable. had obtained in the preceding month. A Credit Conditions and Money Rates Member bank reserve balances at this bank increased more than 115)4 million dollars during the four-week period March 18 to April 15, reflecting almost entirely an excess of U. S. Treasury disbursements over col lections in the period amounting to approximately 127 million dollars, offset only in small part by a seasonal increase in demand for currency of about 8 millions. Detailed changes in factors affecting the use of Seventh district banking reserves are given in the accompanying table. Changes between March 18 and April 15 in Factors Affecting Use of Federal Reserve Bank Funds—Seventh District. (Amounts in thousands of dollars) Reserve bank credit extended (exclusive of amounts to other districts). Commercial operations through inter-district settlements........................ Treasury and National bank currency............................................................ Total supply................................................................................................... —327 —1,243 4-2,106 4-536 Deman d for currency........................................................................................... 4-8,094 Member bank reserve balances......................................................................... 4-115,735 Treasury cash and deposits at Federal Reserve Bank of Chicago........... —124,934 Special and “all other” deposits....................................................................... 4-2,007 Other Federal Reserve accounts...................................................................... —366 Total demand................................................................................................ 4-536 Money rates continue at low levels. Down-town Chicago banks reported to 5 per cent as the range prevailing on customers’ commercial loans during the week ended April 15, unchanged from quotations dur ing the corresponding week in March. In Detroit a range of to per cent was reported for this class of loan in that week. The average rate earned on loans and discounts during the calendar month of March by down-town Chicago banks was 2.81 per cent, compared with 2.73 per cent in February and with 2.93 per cent in March 1935. An increase of 65 per cent took place during March as compared with February in dealer sales of com mercial paper in the Middle West. The March aggre gate, while representing a gain over February of greater than seasonal proportions, was 9 per cent below the total a year ago and 53 per cent less than the tenyear average for the month. Borrowings showed a moderate increase during March, and demand from both city and country banks likewise was heavier than in February. Commercial paper outstanding at the end of March exceeded the volume of a month earlier by 10 per cent and that of March 1935 by 3J4 per cent, but was 44J4 per cent below the 1926-1935 March average. Selling rates recorded no changes in March, to per cent, and prime short-term paper carrying less well known paper selling at to i per cent. The bulk of sales ranged from % to Per cent. During the first half of April, sales of commercial paper de clined somewhat as compared with the corresponding period of March; rates were unchanged. Chicago bill dealers reported operations during the five-week period March 12 to April 15 in lesser volume than during the preceding four-week period—February 13 to March 11. Purchases from local acceptors as well as receipts from Eastern cities showed recessions in the current period, effecting a reduction of slightly less than 50 per cent in total supply. Sales to local banks again recorded a decline, though of lesser extent than in the preceding period, and sales to out-of-town banks showed a downward trend. Distribution equaled the supply, so that holdings on April 15 were nil. Rates again ranged from J4 to ^ per cent. During the calendar month of March, contrary to the usual movement in that month, new financing by means of bankers’ acceptances in this district declined 22 per cent from February, was 3 per cent below the aggregate shown in March of last year, and fell short of the ten-year average for the month by 66 per cent. Direct discounting of acceptances at originating banks likewise declined from February, which trend was slightly offset by a small gain in purchases of bills of other banks; total purchases in March were 23 per cent under the February volume, 28J4 per cent less FEDERAL RESERVE BANE OF CHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions of dollars) Total Bills and Securities.............................. Bills Discounted.............................................. Bills Bought..................................................... U. S. Government Securities........................ Federal Reserve Notes in Circulation........ Ratio of Total Reserves to Deposit and Federal Reserve Note Liabilities Combined............................................................... •Number of Points. Pac« 2 April 15, 1936 $ 323.9 0.0 0.6 321.2 1,449.1 868.5 867.5 83.4 Change From March April 18, 1936 17, 1935 $ -5.1 $ —68.8 —0.0 +0.0 —0.0 0 —68.7 —5.0 +269.7 +24.2 +127.2 +11.4 +75.0 +7.9 +0.4* +6.6* than in March 1935, and 78 per cent below the 1926 1935 March average for this item. As had been the case in the preceding month, sales in March were nil, and maturities from portfolios again exceeded pur chases, resulting in a decrease of 2 per cent in holdings at the end of the month as compared with the close of February. Liability for outstandings at the end of March was less than at the end of the preceding month by 2 per cent and 16 per cent below March of last year. In the first half of April, financing by means of accept ance credits was 33j4 per cent less than in the first half of March. TRANSACTIONS IN BANKERS' ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Per Cent Change in March 1936 From February 1936 March 1936 Total value of bills accepted................................. —22.3 —2.7 Purchases (including own bills discounted)----—22.9 —28.6 Sales.................................................................................. 0 —100.0 Holdings*....................................................................... —1.9 —41.8 Liability for outstandings*.................................... —2.2 —15.7 *At end of month. Security Markets Conditions in the Chicago bond market in March continued to reflect the improvement evident for several months. New issues, the bulk of them for refunding purposes, were in relatively large volume and generally well received. Institutional investors continued to pre dominate, showing preference in the main for highgrade issues, although the problem of replacing called issues as well as of finding investments for an increas ing volume of available funds, is reported as tending to extend demand to bonds of slightly less than the highest grade. The trend of bond prices during March was downward. Prices on the Chicago Stock Exchange as measured by the average of twenty leading stocks* de clined the first half of March, subsequently recovering much of the loss, the upward trend continuing until April 8, since which date a downward movement has been operative. On April 17 the average stood at $53.21 as compared with $53.44 on March 17. * Chicago Journal of Commerce. Agricultural Products Frozen and damp condition of the soil in March and early April resulted in farm work of the Seventh Federal Reserve district being a week to ten days be hind normal schedule by mid-April. The seeding and germination of oats made slow progress, and plowing for corn was similarly delayed. After having gone CONDITION OF LICENSED REPORTING MEMBER BANKS SEVENTH DISTRICT (Amounts in millions of dollars) Change From March April April 17, 1936 18, 1936 15,1936 $+466 $—105 52,835 Total loans and investments......................... —30 +7 256 Total loans on securities............................. To brokers and dealers: —15 +2 4 In New York......................................... +10 43 +4 Outside New York.............................. —25 +1 209 To others (except banks)........................ Acceptances and commercial paper —18 33 +3 bought........................................................ —2 0 66 Loans on real estate..................................... +1 —3 10 Loans to banks............................................. +69 +16 411 Other loans.................................................... —150 +374 1,524 U. S. Government direct obligations. ... Obligations fully guaranteed by U. S. +11 +2 146 Government.............................................. +65 +16 389 Other securities............................................ —27 +297 1,980 Demand deposits—adjusted......................... +84 +45 810 Time deposits................................................... Borrowings......................................................... i +i 0 through the early winter in good condition, winter ^ wheat was damaged to some extent by the ice crust which obtained in February, and growth was subse quently retarded by abnormally cold weather to such an extent that condition of the crop fell below a year earlier. Mid-April prospects for fruit were unfavor able ; many peach trees had been winter-killed, and the outlook was further reduced in the first week of April by frost damage to peaches, apples, and cherries. Tests in early April showed an unusually low germination ratio for seed corn from the 1935 crop. Field work made fair to good progress after the middle of April, * but abundant sunshine, seasonable temperatures, and warm rains were needed to promote germination and plant growth. Losses of early pigs, lambs, and calves were indicated as somewhat greater this spring than normal, a development generally ascribed to lack of exercise during the excessively cold winter months and the consequent somewhat lower vitality of dams. On the basis of April 1 condition, the United States Department of Agriculture forecasts the 1936 produc tion of winter wheat in the five states including the ~ Seventh district at 80,104,000 bushels, as compared with a harvest of 78,972,000 bushels in 1935 and the 1928-32 average of 78,999,000 bushels. It also esti mated United States production of this grain at 493.166.000 bushels, as against 433,447,000 bushels harvested a year ago and the 1928-32 average of 618.186.000 bushels. Grain Marketing After totaling unusually light in February, grain marketings in the United States rose sharply in March to a higher level than at any time since last autumn. Receipts of wheat at interior primary markets in creased counter-seasonally and reshipments, though falling below current receipts, showed more than an average gain over a month earlier. Imports were greater than a year ago but were practically unchanged from the preceding period. Prices of wheat declined in March and the first half of April from February. Stocks of wheat on farms and at principal points of accumulation in the United States aggregated 1per ■* cent greater on April 1 than a year earlier but were 48 per cent under the 1928-32 average level for the date. Corn receipts at primary centers expanded in March, contrary to the usual seasonal tendency, while reship ments gained less than normally. Prices declined. April 1 farm stocks and supplies of corn at accumula tion points in the United States totaled 71*4 per cent heavier than on the corresponding date of 1935 and were about on a level with the 1928-32 April 1 average. f Receipts and reshipments of oats showed more than an average gain in March 1936 over February. Aggre gate stocks of this grain on farms and at interior marVOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT (Amounts in millions of dollars) Per Cent of Increase or Decrease From Feb. 1936 Mar. 1935 +28.7 +20.6 +18.2 +18.1 +16.4 +14.5 +11.3 +9.4 ................................ .................................. .................................. .................................. Mar. 1936 $3,282 893 281 159 Total four larger cities. .................................. 37 smaller cities............ .................................. $4,615 680 +25.0 +14.8 +19.4 +16.4 Total 41 centers............ .................................. $5,301 +23.6 +19.0 Chicago........................... Detroit............................ Milwaukee...................... Indianapolis................... keting centers of the United States were 141 y2 per cent larger on April 1 than at the beginning of April 1935 and exceeded the 1928-32 average for the date by 31*4 per cent. Prices trended downward in March and early April from February. MOVEMENT OF GRAIN AT INTERIOR PRIMARY MARKETS IN THE UNITED STATES Per Cent Change in March 1936 From March February March 1926-35 Av. 1935 1936 Wheat: . +82.0 +117.0 —42.3 Receipts... Shipments. . +30.3 +42.0 —24.9 Corn: Receipts... . +31.9 +138.7 +0.2 Shipments —17.1 —28.4 . +3.0 Oats: +17.1 +295.7 Receipts .. . +98.1 Shipments . +110.7 +88.3 —3.6 Movement of Livestock An increased movement of livestock took place in March, following the greater than normal contraction a month earlier. At public stockyards in the United States, hog receipts increased contrary to trend, those of cattle expanded more than seasonally, and the mar keting of lambs and calves gained to a smaller than usual extent over February. Receipts of cattle and hogs considerably exceeded those of a year ago, and calves recorded a slight gain in this comparison, but the marketing of lambs decreased. The movement to inspected slaughter—inclusive of animals that did not pass through public stockyards—showed trends similar to those of market receipts, except that the supply of cattle gained less than seasonally over February and that of lambs remained above the 1926-35 average for the month. Subsequent to the curtailment in February, reship ments of cattle and calves to feed lots rose sharply in March to a level considerably above the 1931-35 aver age for the month; those of cattle, however, were under last March. The movement of feeder lambs in creased counter-seasonally but was decidedly below this five-year average and only half as great as a year ago. Meat Packing The production of packing-house commodities at inspected slaughtering establishments in the United States rose counter-seasonally by 12 per cent in March over February to a level 21 per cent above a year ago and within 11 per cent of the 1926-35 average for the month. The sales tonnage expanded over the preceding period, totaled 13 per cent greater than in March 1935, and was 10 per cent lighter than the average. Despite little change in lamb quotations, an advance in those LIVESTOCK SLAUGHTER (In thousands) Cattle Yards in Seventh District, March 1936................................ Federally Inspected Slaughter, United States: March 1936............................ February 1936....................... March 1935............................ ............. ........... ............. 763 742 691 Hogs Lambs and Sheep ( 415 290 106 2,617 2,319 2,158 1,374 1,314 1,374 483 405 473 AVERAGE PRICES OF LIVESTOCK (Per hundred pounds at Chicago) Months of Week Ended March February March April 1936 1935 18,1936 1936 $8.45 $10.80 $8.70 Native Beef Steers (average)----- ........... $ 8.65 7.60 6.75 6.85 Fats Cows and Heifers.................. 7.90 ........... 8.00 9.15 8.00 10.40 9.15 10.60 10.25 Hogs (bulk of sales)....................... ........... 8.10 10.10 9.95 Lambs................................................ Page 3 of hams, picnics, cured bellies, and smoked hog-meats, and some closing strength in lard, the general price level of packing-house commodities was somewhat lower in March than a month earlier. The total value of sales billed to domestic and foreign customers decreased 2 per cent from February and Al/2 per cent from the 1926-35 March average but was A]/2 per cent larger than a year ago. Payrolls at the close of the period showed an increase over February of 4 per cent each in hours and wage payments and little change in number of employes. Hours worked and wage payments slightly exceeded those of March 1935, and a 5y per cent decline in employment was smaller than had been evidenced in either January or February. Though recording less than a seasonal de crease from March 1, total inventories of these com modities on April 1 in the United States were 261.964.000 pounds under the 1931-35 average for that date and 236,600,000 pounds lighter than on April 1, 1935. Shipments for export increased in March over Feb ruary, largely reflecting a tendency to enlarge consign ment stocks of United States lard in the United King dom. A reduction in offerings by South American and Continental producers was reported as one of the causes contributing to an improvement in British demand which brought quotations for United States lard up to Chicago parity. Following a recent advance in prices, however, sales of the product have slackened a little. British trade in United States meats gained in March and prices rose to a level approaching replacement costs. Furthermore, some tonnage was booked for future shipment. Demand for fats and meats from the United States remained negligible in continental Europe and showed little change in Cuba or Porto Rico. Inventories of United States packing-house com modities in foreign markets—inclusive of stocks in transit—were reported as slightly heavier on April 1 than at the beginning of March. Imports of animal products into the United States expanded in March over February and were in excess of a year ago. 23 per cent above the corresponding month of 1935, but was 4y2 per cent under the 1926-35 average for the period. In contrast, distribution of the commodity from primary markets of that State exceeded this tenyear average by 8 per cent and the year-ago volume by 32 per cent, though showing a non-seasonal decline of 9 per cent from February. Prices were reduced about 2 per cent in March from a month earlier. Total in ventories of cheese in the United States, however, fell off less than an average amount on April 1 from the beginning of March and were 16,797,000 pounds above the 1931-35 average for that date. Industrial Employment Conditions Expanding activity was recorded for March by prac tically all reporting Seventh district industries, an ag gregate rise of one per cent in employment and 6 per cent in payrolls more than offsetting the non-seasonal contraction experienced a month earlier. All reporting groups except the manufacture of leather and its products and coal mining contributed to the gain in payrolls and the two most important industries, metals and vehicles, showed increases of 6 and 13 per cent, respectively. Seasonal activity in stone-clay-and-glass industries and in construction work brought payrolls in these groups to levels 11 and 27 per cent above those reported a month earlier. These two industries also furnished the most substantial of the gains recorded in employment, 6l/2 and Al/2 per cent more men, re spectively, being added to their working forces during the month. Merchandising concerns added slightly more than 3 per cent to their employment volume, while in most of the groups for which increases were recorded the gains ranged from 1 to ll/2 per cent. Decreases in employment recorded for the month ranged from less than one-half per cent in vehicles and rubber products to one per cent in paper and printing and in leather goods. Employment this March in all of the reporting industries, as computed from the month-to-month percentage changes, was y2 per cent higher than in March 1935, while payrolls were about 7j/2 per cent higher. Dairy Products March 1936 production of dairy products in the Seventh Federal Reserve district exceeded that of any month since last October. The district manufacture of creamery butter expanded 6l/2 per cent over February and totaled 4j4 per cent above a year ago but was 9J/2 per cent under the 1926-35 March average. On the other hand, the sales tonnage declined 1 per cent from February to a level 14J4 per cent below the 1926 35 average for the month and only 1 y2 per cent above the relatively low volume of the corresponding period of 1935. Manufacture of the commodity in the United States increased over both a month and a year earlier and was about average for the month. Though showing less than a normal reduction from March 1, inventories of creamery butter in the United States aggregated 50.000 pounds smaller on April 1 than a year ago and were only half as great as the 1931-35 average for that date. Prices trended upward in the first half of April, after having declined \2x/2 per cent in March from February. The production of American cheese in Wisconsin rose 17 per cent in March over February and totaled Digitized Pagefor 4 FRASER EMPLOYMENT AND EARNINGS-SEVENTH FEDERAL RESERVE DISTRICT Week of Mar. 15, 1936 Industrial Groups ReportING Firms No. Wage Earners No. Change From Feb. 15, 1936 EarnWage EarnINGS (000 ers Omitted) % 5 EarnINGS % Metals and Products*............... Vehicles....................................... Textiles and Products.............. Food and Products................... Stone, Clay, and Glass............ Wood Products.......................... Chemical Products................... Leather Products...................... Rubber Products...................... Paper and Printing................... 1,443 272 308 708 250 432 220 132 34 601 354,994 325,110 59,518 89,670 18,923 39,779 27,681 26,840 13,116 67,336 8,972 9,169 1,083 2,060 395 738 713 501 304 1,749 Total Mfg., 10 Groups.............. 4,400 1,022,967 25,684 +0.8 +7.3 Merchandisings.......................... Public Utilities.......................... Coal Mining................................ Construction............................... 2,502 154 25 315 107,251 86,166 5,289 10,877 2,229 2,780 125 222 +3.3 +0.2 +1.1 +4.6 +1.6 +2.6 —21.5 +27.0 Total Non-Mfg., 4 Groups....... 2,996 209,583 5,356 +2.0 +2.2 Total, 14 Groups........................ 7,396 1,232,550 31,040 +1.0 +6.4 lOther than Vehicles. +1.6 +6.2 —0.2 +13.0 +1.6 +3.2 +1.2 +3.5 +6.7 +11.4 +0.3 7f+0.9 +1.2 $+2.5 -1.1 —2.2 —0.5 +1.4 —1.0 +0.1 ^Illinois, Indiana, and Wisconsin. Manufacturing Automobile Production and Distribution Although factory schedules of automobile manufac turers were advanced more than normally in March, output of new cars totaled a little under the volume of March last year when manufacturers were busy pro ducing new models. However, total production—pas senger cars and trucks—in the first quarter of 1936 slightly exceeded that of the same period in 1935. Pas senger cars produced in the United States during March numbered 345,167, or 52 per cent greater than a month previous and 5 per cent under a year ago, while truck output of 79,404 expanded 23 per cent over February and was 17 per cent above that of last March. Data covering the first three months of 1936 show pas senger car production of 871,545 vehicles and truck output of 211,242, as compared with 866,672 and 191,573, respectively, in the first quarter of 1935. Distribution of new automobiles in the Middle West rose notably in March over February, although sales at wholesale were somewhat smaller in number than last March. The number of cars sold to consumers, however, was greater than a year ago. Stocks of new cars dropped off slightly in March, and though re maining considerably larger than a year earlier, did not record the heavy excess in the comparison that they have since last November. Trends in used car sales were rather similar to those in new cars at retail, except that a noticeably greater gain was shown over last March and stocks rose further between the end of February and the close of March. Following a noticeable increase in February, the proportion of de ferred payment sales to total retail sales declined in March, a ratio of 45 per cent in the current period comparing with one of 50 per cent for identical dealers a month previous; the year-ago ratio was 43 per cent. Iron Steel Products and An exceptionally good month was experienced dur ing March by steel mills of the Chicago district. Sales and shipments continued to rise, and both showed a substantial increase over the corresponding volumes of a year earlier. Railroad purchases improved notably in the period, and demand from the automobile industry expanded, but buying by other lines of industry like wise was active. In the middle of April, steel ingot operations averaged 68 per cent of capacity, which compares with 63 per cent a month previous, 50 per cent a year ago, and 54 per cent at the same time in 1934. Pig iron production in the Illinois and Indiana district rose 7 per cent in the daily average for March over February and was 30 per cent above the average for last March. Finished steel prices are firmer; those of scrap iron and steel weakened somewhat in the early part of April but strengthened again toward the middle of the month. Orders booked during March by Seventh district foundries exceeded those of a month earlier by a sub stantial tonnage—94 per cent in steel and 33 per cent in malleable castings. Production and shipments also were rather sharply accelerated, the former 18 and 14 per cent and the latter 10 and 20 per cent, in the re spective types of castings. Current activity was con siderably in excess of that prevailing at the same time a year ago, especially at steel casting foundries where orders totaled higher by 267 per cent, shipments by 60 per cent, and production by 58 per cent. At malle able casting foundries, the gains in these items were, respectively, 43, 28, and 23 per cent. Seasonal activity in the manufacture of stoves and furnaces continued to rise in March, operations in creasing 22 per cent, orders 29 per cent, and shipments 32 per cent over the preceding month. Current orders were 25 per cent in excess of those reported for March 1935, shipments 41, and production 10 per cent larger. Stocks showed a cumulation of 19 per cent during the month and were 28 per cent larger than a year ago. Furniture Following a larger than seasonal decline in February, orders booked during March by Seventh district fur niture manufacturers increased to a much greater ex tent than usual. The aggregate dollar volume booked rose 39 per cent over the preceding month, as against an increase of but 9 per cent in the 1927-35 average for March. The gain of 15 per cent over February in shipments was seasonal for the period. As a result of a heavier amount of shipments than new orders and a moderate volume of cancellations, unfilled orders at the close of March totaled 7 per cent smaller than a month previous and their ratio to orders booked not only dropped from 117 per cent for February to 78 per cent but compared with 94 per cent a year ago. Compari sons with last March show gains in the current period of 28, 26J4, and 6per cent in orders, shipments, and unfilled orders, respectively. Operations averaged 70 per cent of capacity in March, the same as a month previous and about 5 points higher than in March 1935. LUMBER AND BUILDING MATERIALS TRADE Class of Trade . February 1936 MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in March 1936 From Previous Months Per Cent Change From Feb. 1936 New Cera: Wholesale— Retail— On Hand March 31— Used Cars: Salable on Hand— March 1936: Per Cent Change From Wholesale Lumber: Companies Included Mar. 1935 +145.1 +149.4 -3.5 +4.9 19 19 +116.4 +114.8 + 7.0 +22.0 36 36 —2.0 —5.7 +56.0 +52.7 36 36 +72.2 +30.5 36 +4.3 +5.2 +29.9 +20.7 36 36 Sales in Board Feet............... Accounts Outstanding!......... Retail Building Materials: Total Sales in Dollars.......... Lumber Sales in Dollars.... Lumber Sales in Board Feet Accounts Outstanding1......... to March 1935 +31.7 +33.7 +14.0 +26.3 +20.9 +21.7 11 9 11 —3.0 +58.1 +80.0 +2.8 +16.3 +13.3 +36.8 + 9.8 167 60 73 164 Ratio of Accounts Outstanding1 Total Dollar Sales During Month March 1936 Retail Trade............................... Number of Firms or Yards 134.0 299.3 February 1936 154.8 281.0 March 1935 139.0 317.3 lEnd of Month. Page S Shoe Manufacturing, Tanning, and Hides Preliminary figures on March shoe production in the Seventh district indicate an absence of the expansion customary in this month, following the slight gain re corded in the preceding month. This latter, according to final reports, totaled only one per cent as against an average January to February rise of close to 10 per cent. In the tanning industry, demand for leather was affected by the closing of a number of eastern shoe factories during the prevailing flood conditions, and dollar sales of reporting Seventh district firms were 19 per cent below those of a month earlier and 14 per cent under the March 1935 volume. Production of leather showed little change in the month and prices remained steady. In the packer hide market, prices on most items advanced about a quarter of a cent during March from those quoted at the close of February, but were generally below the prevailing range throughout that month; the volume sold was substantially larger than in the preceding month. Building Materials, Construction Work Building materials moved in considerably larger volume in March than in February, partly as a result of the inactivity prevailing a month earlier. Shipments of cement and brick during the month greatly exceeded those of February, and sales of lumber showed a greater than average seasonal increase at both whole sale and retail. A slight decline in total dollar sales at reporting retail yards, contrary to the normal trend at this season, was caused by a sharp drop in sales of coal which -had been unusually heavy during the pre ceding month. Collections were good during March and outstanding accounts increased less than did sales of lumber at wholesale; at retail, however, they showed an increase of 3 per cent as against a 3 per cent loss in total dollar sales. Comparisons with year-ago volumes continue to show substantial gains: wholesale lumber sales in board-foot volume were 21 per cent larger than in March last year, and retail sales in this comparison were 37 per cent heavier. Building Construction Residential building in the Seventh Federal Reserve district recorded an unusually sharp rise in March, according to data on contracts awarded, expanding 145 per cent over the February volume and being al most three times that of March last year. Other building showed somewhat smaller though likewise substantial increases in the two comparisons. Resi dential contracts comprised 19 per cent of total con tracts in March, as against only 13 per cent in the preceding month and 12 per cent a year ago. The estimated cost of building permits issued during March in 101 cities of the Seventh district amounted to almost four times that of the preceding month and WHOLESALE TRADE IN MARCH 1936 was more than double the figure for March 1935, the gains aggregating 290 and 123 per cent, respectively, in the two comparisons. The number of permits issued was 240 per cent greater than in February and ex ceeded that of a year ago by 51 per cent. Exceptions to these rising trends were a 28 per cent decline from a month previous in the total estimated cost of proposed construction in thirteen smaller cities of Wisconsin and a decrease from last March of 60 per cent in the value of permits issued in Des Moines. BUILDING CONTRACTS AWARDED* SEVENTH FEDERAL RESERVE DISTRICT Period March 1936................................ Change from February 1936............................ Change from March 1935.................. First three months of 1936.......... Change from same period 1935......................... Groceries... Hardware.. Drugs......... Electrical Supplies.. Residential Contracts $38,323,326 +63% +75% $102,178,394 +117% +145% +187% $14,558,095 +161% •Data furnished by F. W. Dodge Corporation. Merchandising Data covering March sales of reporting wholesale trade groups show much heavier than seasonal gains in hardware and in electrical supplies, a slightly greater than usual expansion in drug sales, and a less than average increase in the grocery trade. The dollar volume sold during the month by hardware firms ex ceeded that of the preceding month by 70 per cent, that sold by electrical supply firms rose 26 per cent, drug sales increased 14y2 per cent and grocery sales 5 per cent, as compared with average March gains of 36, 9, 12, and 12 per cent, respectively. Increases over a year ago, shown in the table, were higher in all groups than in similar comparisons for either January or February, the gain in drug sales contrasting with declines in the two preceding months. The aggregate volume sold in the first quarter of 1936 exceeded that of the same period in 1935 by \7y2 per cent in hard ware, 17 per cent in electrical supplies, and by only one per cent in drugs, while the grocery trade recorded a decline of one per cent. All groups had lower ratios of accounts outstanding to sales during March than a month previous, but groceries and hardware had higher ratios than a year ago. A seasonal increase took place during March in Seventh district department store trade, sales of report ing stores expanding 21 per cent in the aggregate over the preceding month. Sales of Indianapolis stores gained 41 per cent in the comparison, those of Mil waukee firms 28 per cent, of Detroit stores 17 and DEPARTMENT STORE TRADE IN MARCH 1936 Locality Per Cent Change March 1936 From March 1935 Peb Cent Change Fbom Same Month Last Year Commodity Total Contracts Ratio op Accounts Outstanding Per Cent Change First Three Months 1936 From Same Period 1935 Ratio of March Collections to Accounts Outstanding End of February Net Sales Stocks End of Month Net Sales 1936 1935 Net Sales Stocks Accounts Outstanding +2.2 +23.0 +6.6 —3.2 +16.5 —1.3 -5.5 +9.1 +2.0 +2.7 +8.7 +3.5 95 3 187 9 157.9 Chicago — Detroit....... Indianapolis Milwaukee. Other Cities +15.0 —3.4 +9.1 +8.2 +9.4 +3.6 +2.3 +4.4 +5.3 +6.1 +11.6 +0.9 +5.3 +8.9 +9.7 34.3 45.9 45.0 39.4 34.7 35.6 47.1 46.3 39.0 34.5 +25.7 +42.6 +u.i +1.4 139.4 7th District +8.6 +3.9 +8.2 39.0 39.8 Pagefor 6 FRASER Digitized Col lections to Net Sales Chicago stores 17 per cent, while sales by stores in smaller cities were 31 per cent larger. Chicago made "* by far the best showing over last March with a gain of 15 per cent; Detroit, on the other hand, recorded a small decline from that month. Total sales were 9 per cent heavier in March this year and daily average sales 10 per cent greater, inasmuch as there was one more Saturday in the month last year, although the number of trading days was the same. First-quarter sales totaled 8 per cent larger this year than last. Stocks rose 7 per cent in March and were 4 per cent above a year ago; stock turnover for the year through March recorded little change from the same period in 1935. The retail shoe trade continued to show a favorable trend in March, sales of reporting dealers and depart ment stores expanding SSl/2 per cent over the preced ing month, as compared with a gain in the 1926-35 average for the period of but 48 per cent. Sales totaled 6 per cent heavier than in March last year, and in the first quarter of 1936 were 8j4 per cent above those in the same period of 1935. An 8 per cent increase took .* place in stocks between the close of February and March 31, and they were liy2 per cent larger than on the corresponding date last year. The 11 per cent gain recorded for March over February in sales of furniture and house furnishings by reporting dealers and department stores was better than average for the period, and a like increase over March 1935 was the heaviest shown in the yearly com parison so far in 1936. Sales by dealers rose 38 per cent in March over the preceding month and exceeded those of last March by 24 per cent, sales by depart ment stores increasing less than 5 per cent in the monthly and only 8 per cent in the yearly comparison. Gains in stocks over a month and a year previous amounted to 7 and 6 per cent, respectively. Although sales of 12 reporting chains operating 2,729 stores in the period, expanded 4 per cent in the aggre gate for March over February, they totaled one per cent smaller than a year ago, the result of declines in sales of grocery, men’s clothing, and five-and-ten-cent store chains. Drug, cigar, and musical instrument chains recorded gains over last March. In the com parison with the preceding month, all but musical in strument and men’s clothing chains showed increases. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the months indicated, using the monthly average for 1923-1924-1925 as a base, unless other wise 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 Firms Meat Packing— (U. S.)— Sales (in dollars).................................................. 47 Casting Foundries— Shipments: Steel—In Dollars................................................ 12 In Tons..................................................... 12 Malleable—In Dollars....................................... 21 In Tons.......................................... 21 Mar. 1936 Feb. 1936 Jan. 1936 Dec. 1935 Nov. 1935 Oct. 1935 Mar. 1935 Feb. 1935 Jan. 1935 Dec. 1934 Nov. 1934 Oct. 1934 81 83 85 83 88 94 77 80 81 73 71 79 51 50 59 88 46 46 49 73 42 42 52 78 41 41 49 73 42 41 42 62 47 47 45 66 35 33 45 69 31 29 37 57 31 30 37 59 20 19 28 42 24 25 29 43 27 26 26 38 Stoves and Furnaces— Shipments (in dollars).......................................... 10 152 115 94 172 205 258 108 85 59 101 144 192 FurnitureOrders (in dollars).................................................. Shipments (in dollars).......................................... 12 12 63 65 45 57 73 41 43 53 56 54 62 68 48 51 44 37 52 27 26 31 35 38 41 43 FlourProduction (in bbls.)............................................. 19 88 90 102 77 86 122 89 90 103 93 101 117 Output of Butter by Creameries— Production............................................................... Sales.......................................................................... 59 61 87 88 82 89 82 94 79 102 74 98 94 121 83 87 81 79 86 107 88 116 98 130 125 127 Wholesale TradeNet Sales (in dollars): Groceries............................................................... Hardware............................................................. Drugs..................................................................... 28 11 12 63 80 78 60 49 67 64 48 73 60 65 74 65 75 72 77 86 81 62 64 73 60 43 69 69 41 74 65 52 67 69 57 69 73 65 77 Retail Trade (Dept. Stores)— Net Sales (in dollars): Chicago................................................................. Detroit................................................................ Indianapolis........................................................... Milwaukee.......................................................... Other Cities..................................................... Seventh District—Unadjusted....................... Adjusted............................ 27 5 4 5 40 81 81 78 89 96 83 79 82 90 69 78 66 67 64 69 88 64 72 67 63 59 65 81 133 153 143 135 127 137 81 85 101 93 94 88 90 81 81 92 101 95 85 86 78 69 92 89 77 71 76 83 60 76 65 58 56 62 79 60 69 70 58 54 61 77 123 139 140 125 116 126 75 77 81 83 83 74 78 71 79 76 85 89 75 79 72 118 211 77 171 102 179 118 168 116 158 73 160 124 180 94 159 78 169 38 113 17 92 29 127 Building ConstructionContracts Awarded (in dollars): Residential......................................................... Total.................................................................... 25 56 10 34 14 59 21 78 17 43 22 53 9 32 4 17 6 20 5 26 6 22 8 34 Iron and SteelPig Iron Production:* Illinois and Indiana.......................................... United States.................................................... Steel Ingot Production—(U. S.)*..................... 81 67 97 75 64 89 77 67 85 79 69 93 79 70 91 71 65 87 63 58 83 63 59 87 51 49 80 38 34 59 34 33 47 33 31 41 Automobile Production—(U. S.)— Passenger Cars............................................ Trucks........................................................... •Average daily production. Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS INDUSTRIAL PRODUCTION (By the Board of Governors of the Federal Reserve System) RODUCTION and employment at factories increased from February to March, while output of minerals declined. There was considerable expan sion in retail trade. P Production and Employment Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average = 100. By months, January 1929 to March 1936. FACTORY EMPLOYMENT AND PAYROLLS 110 100 90 Employment 80 70 60 Payrolls 50 40 30 1929 1930 1931 1932 1933 1934 1935 1936 Indexes of number employed and payrolls, without adjustment for seasonal variation, 1923-1925 average = 100. By months, January 1929 to March 1936. Indexes compiled by the United States Bureau of Labor Statistics. D EPARTMENT STORE SALE-S 1 Distribution Retail trade, which had been reduced in January and February by unusually severe weather, increased considerably in March. Sales at department and variety stores and by mail order houses serving rural areas showed a more than seasonal increase. The number of new automobiles sold was also larger than in February. Freight-car loadings of most classes of commodities increased from February to March by more than the usual seasonal amount. Total loadings declined somewhat from the relatively high level of the three preceding months, how ever, reflecting a sharp reduction in shipments of coal. i Jyy 1 1 PY rfrr jy _ Adjus ted for seasonal var atIon — Withe it seasonal adjustmer 1929 1930 1931 1932 1933 1934 The Board’s combined index of industrial production, which includes both manufacturing and mining and makes allowance for seasonal changes, remained unchanged in March at the February figure of 94 per cent of the 1923-1925 average. Production of automobiles rose sharply in March to a total of 425,000 passenger cars and trucks and continued to increase during April. There was a seasonal increase in output of steel in March, followed in the first three weeks of April by a rapid rise in activity. Estimates of the rate of production in that period averaged around 67 per cent of capacity as compared with the rate of 59 per cent reported for March. Production of cement and lumber increased more than seasonally from February to March, and activity at meat-packing establishments and at silk mills also increased, although a decline is usual in these industries at this time of the year. There was little change in output at cotton textile mills, while at woolen mills activity de creased by more than the usual amount. Production of anthracite and bituminous coal showed a substantial reduction from the relatively high level of February and this decrease accounted for the decline in total output at mines. Factory employment increased by more than the usual seasonal amount from the middle of February to the middle of March, and payrolls showed a larger increase. Employment increased in the machinery industries, at saw mills, and at establishments producing wearing apparel. There was a decrease in the number of workers at plants producing rubber tires and tubes, where a strike was in progress in the middle of March. At automobile factories the number employed declined slightly, while payrolls showed a considerable increase. The value of construction contracts awarded, according to figures of the F. W. Dodge Corporation, showed a seasonal increase from February to March. Awards for residential building increased seasonally and contracts for other private construction advanced to the highest point since 1931. Value of awards for publicly-owned projects continued considerably smaller than in December and January, when the dollar volume of such contracts was relatively high. 1935 1936 Commodity Prices Indexes of value of sales, 1923-1925 average = 100. By months, January 1929 to March 1936. The general level of wholesale commodity prices, which had declined some what between the third week of February and the middle of March, showed relatively little change in the following four weeks. Retail prices of foods declined during March. Bank Credit BILLIONS Of DOLLARS MEMBER BANK RESERVE BALANCES TOTAL EXCELS RESERVES 1934 1936 Wednesday figures of total member bank reserve balances at Federal Reserve banks, with estimates of required and excess reserves, January 6, 1932, to April 15, 1936. Page for 8 FRASER Digitized Excess reserves of member banks, after declining sharply in the last half of March, increased by about $300,000,000 in the first three weeks of April to a total of $2,640,000,000. This increase, like the preceding decline, was due chiefly to operations of the Treasury. After the middle of March, Treasury balances at the Federal Reserve banks were built up through the collection of taxes and receipts from the sale of new securities, and in April these balances were drawn upon to meet expenditures. Partly as a result of these expenditures, deposits at reporting member banks in leading cities, which had declined in March, increased in the first half of April, when total loans and investments of these banks also increased. From February 26 to April 15, total loans and investments of reporting member banks showed an increase of about $800,000,000, reflecting increases of $380,000,000 in investments, of $180,000,000 in loans to brokers and dealers in securities, and of $240,000,000 in so-called “other” loans, which include loans for com mercial, industrial, and agricultural purposes.
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