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B usiness C onditions R eserv e qistrict S ev e n t h FEDERAL Volume 7, No. 8 MONTHY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAGO August 1, 1924 BUSINESS CONDITIONS IN THE UNITED STATES R O D U C TIO N of basic commodities and factory employment showed further large declines dur ing June. Trade, both at wholesale and retail, also decreased during the month and was in smaller volume than a year ago. P PRODUCTION —The Federal Reserve Board’s index of production in basic industries, adjusted to allow for seasonal variations, declined about 9 per cent in June to a point 22 per cent below the level of the first two m onths of the year. Iron and steel and cotton m anufacturing industries contin ued to show the m ost marked curtailm ent of activ ity, and decreases were general in other industries. Factory employment decreased 3 per cent in June, the metal, automobile, textile, and leather indus tries reporting the largest reductions in forces. Value of building contracts awarded in June was PRODUCTION FACTORY IN B A S I C I N D U S T R I E S I n d e x o f 22 b a s ic c o m m o d itie s c o r r e c t e d f o r s e a s o n a l v a r i a t i o n (1 9 1 9 = 1 0 0 ). L a t e s t fig u r e , J u n e , 1924: 94'. 8 per cent smaller than in May, though 4 per cent larger than in June of last year. Condition of the corn crop on July 1, as reported by the D epartm ent of Agriculture, was the lowest on record for th at date and indicated a probable yield about 500,000,000 bushels less than last year. Condition of the cotton crop was reported less sat isfactory than a m onth earlier, while forecasts for w heat and oats were larger than in June. TRADE —Railroad shipm ents decreased in June and were about 15 per cent less than a year ago, owing to smaller loadings of all classes of freight except grain and livestock. W holesale trade showed a further slight decline in June and was 11 per cent smaller than a year ago. Sales of hardware, drugs, shoes, and dry goods decreased, while sales of gro ceries and m eat increased slightly. Sales of departEMPLOYMENT I n d e x f o r 33 m a n u f a c t u r i n g fig u r e , J u n e , 1924: 90. Compiled July 28, 1924 in d u s trie s (1 9 1 9 = 1 0 0 ). L a te s t m ent stores and chain stores showed more than the usual seasonal decrease during June and were sm aller than last year. Mail order sales in June showed less than the usual seasonal decline and were larger than a year ago. D epart m ent stores further reduced their stocks of merchandise and slightly increased their outstanding orders. PRICES—W holesale prices, as measured by the index of the Bureau of Labor Statistics, declined more than one per cent in June to a level 5 per cent below the high point for this year. Prices of all groups of commodities, ex cept clothing, showed declines, and decreases were p ar ticularly large for building m aterials. D uring the first three weeks of July quotations on wheat, corn, and hogs advanced sharply, while prices of sugar, cotton goods, and iron and steel products were lower. BA N K C R ED IT—Commercial loans at member banks in leading cities during June and the first two weeks of July remained at a relatively constant level, considerably below the peak reached in April, while investm ent hold WHOLESALE PRICES I n d e x o f U . S. B u r e a u o f L a b o r S t a t i s t i c s (1 9 1 3 = 1 0 0 , b a s e a d o p te d b y t h e B u r e a u ) . L a t e s t fig u r e , J u n e , 1924: 145. ings and loans secured by stocks and bonds increased rapidly and carried total loans and investm ents to the high point for the year. Demand deposits, owing partly to the grow th of bankers’ balances at financial centers, advanced to a record level. At the reserve banks there was a continued decline in discounts and an increase in purchases of governm ent securities in the open m arket. As a consequence, total earning assets in the middle of July were only slightly less than at the beginning of June. M ember bank reserve balances increased rapidly, reflecting a return flow of cur rency from circulation and further im ports of gold; total deposits at the reserve banks on July 16 were larger than at any time since the organization of the system. Money rates in July w ere com paratively steady b ut con tinued to show a som ew hat easier tendency. Discount rates at the Federal Reserve banks of K ansas City and Dallas were reduced during July from 4y2 to 4 per cent. RESERVE BANK CREDIT W e e k ly f ig u r e s f o r 12 F e d e r a l R e s e r v e b a n k s . L a t e s t fig u res) J u l y 23, 1924: T o t a l E a r n i n g A s s e ts , 801 m illio n ; D is c o u n ts , 291 m illio n ; A c c e p ta n c e s a n d U n ite d S t a t e s S e c u r itie s , 509 m illio n . BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT r> Y the end of June the slackening in activity that char■“* acterized the spring m onths for the Middle W est had * spread to practically every phase of the business structure, so th at the second half of 1924 was opened with some of the industries apparently having touched bottom , and at least in tone, showing tendencies tow ard improvement. Such is the aspect in the iron and steel trade, with actual output during June registering further recession, but with prices and the general situation becom ing more stable. In the coal industry also the slightly larger production volume for June is noticeable after the drastic depression of recent months. O perations at automobile plants were further curtailed, and sales were lower than in May, but a marked reduction of cars held in storage was apparent. For other commodities, stock comparisons varied. A gricultural developments of interest were the decided advance in grain prices and the placing of July 1 crop estim ates all below the 1923 figures except for oats. The Page 2 August output of dairy products, as well as of flour, increased dur ing June, while that of packing house products changed little. Financial features of the m onth were the continued easing of money rates, the strengthening in the bond market, the seasonal increase in savings, and the decline in the volume of cancelled checks which continued until the middle of July, when reports of a m ajority of clearing houses showed an increase. Business failures in the district in creased both in number and am ount of liability over June, 1923. BA N K IN G C O N D IT IO N S A N D M O NEY RATES Credit dem and for commercial and industrial purposes remained at a com paratively low level throughout the m onth of June and the first two weeks of July. Rates have shown a slightly easing tendency, reflecting the accumu lation of money in the larger centers, where banks are encountering considerable difficulty in finding profitable em ploym ent for their funds. P resent quotations in Chi cago are: 3% to 3J4 per cent for commercial paper, 4% to 4% for collateral loans, and 4l 2 to 5 for custom ers’ over/ the-counter accom modation. C ountry banks are experiencing a generally heavier de mand for credit than a m onth earlier, and while meeting all legitim ate requirem ents, are scrutinizing applications with extrem e care, in order to eliminate any but the most necessary advances to borrow ers. Liquidation has been on a limited scale. The condition reports of all Chicago banks, made in response to the N ational and State call as of June 30, showed loans and discounts on that date as $1,531,916,000 compared with $1,484,920,000 on M arch 31, the last previous call date, a gain of $46,996,000. T otal deposits, however, moved upw ard between these dates nearly $250,000,000, standing at $2,377,063,000 on June 30. Savings deposits increased over 12 million on June 30 compared w ith the preceding call, the figure on the form er date being given as $628,636,000. Reflecting the strong position of the district banks as well as the relatively inactive business situation, loans to member banks by the Federal Reserve bank continued to contract in volume, and on July 16 were reported as $40,940,000 com pared with $43,760,000 the preceding week, and $49,554,000 on June 18. T otal earning assets followed the trend of the lessened volume of loans to mem bers; the aggregate of $108,952,000 on July 16 represented a drop of about 6J4 million from the corresponding date in June. T he volume of Federal Reserve notes in circulation de creased nearly 8 million on July 16 from the preceding week when $245,373,000 was shown, and about 14 million from June 18. Loans and discounts of reporting member banks in the district on July 16 aggregated $1,832,652,000, the highest point since May 11, 1921, with a total of $1,835,288,1)00. T his gain reflects an increase of about 17 million in Chicago, largely accounted for by increased loans on stocks and bonds. Loans on other collateral also increased in Chicago and Detroit. In other selected cities, except POSITION REPORTING MEMBER BANKS, 7TH DISTRICT B r e a k in c u r v e i n d ic a te s d a t a n o t c o m p a r a b le w i t h p r e c e d in g ’. B a s e d o n w e e k ly r e p o r t s to t h i s b a n k b y a p p r o x i m a t e l y 49 m e m b e r b a n k s in C h ic a g o , 13 in D e t r o i t , a n d 44 in o t h e r s e le c te d c itie s . L a t e s t f ig u r e s s h o w n , J u l y 16. 1924, in t h o u s a n d s o f d o l la rs : L o a n s a n d D is c o u n ts , 1,832,652; I n v e s t m e n t s , 663,609; D e m a n d D e p o s its , 1,636,427; a n d T i m e D e p o s its , 843,330. loans on U nited States securities, which gained slightly, the volume of borrow ing at m em ber banks declined one and a half million from the preceding week. Investm ents of reporting m ember banks in the district showed a consid erable increase on July 16 as compared w ith the corre sponding date in June. D em and deposits moved in a sim ilar direction, the gain in the aggregate of Chicago and D etroit banks over June 18 being 50 million, and nearly 4 million in other selected cities. Tim e deposits have changed little since the middle of June; on July 16 a slight increase from the preceding week took place in the aggregate of time deposits in Chicago and D etroit reporting m ember banks. Ten commercial paper dealers in this district had aggre gate sales 47.4 per cent larger in June than in May, and 52.1 per cent above June, 1923. P aper outstanding at the close of the m onth was valued at 2.0 per cent m ore than on May 31, and 4.1 per cent less than a year ago. W ith total sales for the six m onths ended June 30, 1924, of $214,261,571, eight of these dealers were 8.6 per cent ahead of the corresponding period in 1923. Rates in June prevailed at as low as 3$4@4 per cent, com pared with 4}4@4}4 Per cent in May, and 4J4@4J4 per cent in April. A low rate of 3J4 per cent was recorded in the June reports, but with m ost dealers it was 3y2 per cent. D em and for paper in June was good; city banks particularly were steady buyers. As rates worked low er country bank dem and became in creasingly light. W hile the supply of paper increased somewhat in June, it remains limited—insufficient, with some dealers, to meet the demand. Follow ing the extraordinarily small purchases and sales of acceptances by five district dealers in the four weeks ended June 11, purchases were increased nearly three-fold in the succeeding four-week period, ended July 9. Sales of bills, however, w ere 26.2 per cent sm aller in this latter period. W hile purchases were curtailed by investors of all classes, those of non-bank buyers declined m ost extensively; sales to local banks underw ent the least con traction, only 1.6 per cent. Portfolios on July 9 while more than double those of June 11, were held down by extensive transfers of bills to other offices. The diminu tion in rates in this period was not so great as in the prior one; 90-day bills were offered at 2 per cent on Ju ly 9 com pared with per cent on June 11, and 3J^@3J4 per cent on May 14. The supply of bills improved, but the demand was light, particularly during the last half ot the period, as a result of the very low rates at which they were offered. D ealers’ purchases in the first half year fell 13.2 per cent below those of the same period in 1923, while sales were 1.9 per cent smaller. In both those periods sales were considerably larger than purchases, giving evi dence of the transfer for sale here of an appreciable quan tity of bills by other offices of reporting dealers. Continuing the gains registered in May, eighteen ac cepting banks in this district increased their June operations over the preceding month. T he volume of* bills accepted was 15.1 per cent larger than in M ay; th at of purchases, expanding 42.3 per cent, was the largest since June, 1922; while sales were m ore than double those of the preceding month. M onth-end holdings of bills were 57.1 per cent larger than on May 31, and the banks’ liability on their Page 3 August Outstanding acceptances was augm ented 14.0 per cent. All items increased over the corresponding month in 1923 more extensively than in any other m onth this year, with the exception of bills accepted, which showed a larger ex pansion in February. Com paring the total for the first six m onths of this year with last reveals an increase of 1.7 per cent in bills accepted, more than double the volume of purchases, and sales 16.4 per cent larger. The Federal Re serve bank’s purchases of bankers’ acceptances in June am ounted to $4,847,784, a slightly larger am ount than in the prior m onth in which the volume was the smallest for some years. M onth-end holdings declined to $2,639,819, likewise an extraordinarily small amount. Agricultural Financing—Loans outstanding of tw entytw o Joint Stock Land banks in the five states including the Seventh district gained slightly over a million on June 30 in com parison with May 31. Four Federal Land banks increased the volume of outstanding loans in this territory on the same date approxim ately 2 million, while the aggre gate of direct loans and rediscounts of four Federal In te r mediate Credit banks also moved in an upw ard direction. Below is tabulated the distribution by states of these items as of June 30: J o in t S to c k L and B a n k s N um ber of b an k s.......... 22 Illinois ............................ $ 47,107,819 In d ia n a ............................ 29.935,420 Iow a ................................. 74,493,539 W isconsin ......................... 4,408,800 M ichigan ........................ 1,505,100 T otal F ederal L and B a n k s I n t e r m e d ia t e C r ed it B a n k s 4 $ 508,645 20,417 111,927 592,996 ............ $140,300,370 ........................$157,450,678 4 $ 21,273,220 30,796,800 47,810,650 23,110,100 17,309,600 $1,233,985 *Includes d ire c t loans and rediscounts. Volume of Payment By Check—Reflecting the declining trend of business activity, the aggregate volume of pay m ent by check during June in Chicago, D etroit, Milwaukee, and Indianapolis showed a reduction from May of 3.5 per cent; in com parison w ith June, 1923, the drop was 3.2 per cent for these four centers. Tw enty smaller reporting cities reduced the total of paym ent by check 2.6 per cent from May, and 8.1 per cent from June of last year, while the decline for the tw enty-four clearing house centers re porting debits to individual accounts, was 3.4 per cent from May, and 3.9 from June, 1923. The total volume of paym ent by check for the m onths of January to June, inclusive, was $28,008,689,000, repre senting a decline of 2.7 per cent from the aggregate of $28,779,838,000 for the identical tw enty-four reporting centers in the first half of 1923. Of the four larger cities, D etroit alone showed a gain in 1924 am ounting to 4.6 per cent. The tabulation below shows the percentage changes as between the current and preceding month, together with those appearing in the comparison of the six-m onth period of 1924 w ith 1923. P er c en ta g e C h a n g e s A ggregate C hange A ggregate F rom 6 M os. F rom J u n e , 1924 M ay J une 1924 6 M os. (000 O m it t e d ) 1924 1923 (000 O m it t e d ) 1923 Chicago ...............$2,927,501 664,192 D e tro it ............... M ilw aukee ........ 248,607 Indianapolis ...... 148,705 — 2.4 — 7.1 — 5.2 — 6.1 — 0.5 — 7.9 — 14.8 — 11.5 $17,484,260 4,178,660 1,581,188 911,503 — 4.2 + 4 .6 — 4.7 — 5.1 T otal ........ $3,989,005 T otal 20 cities.... 654,738 — 3.5 — 2.6 — 3.2 — 8.1 $24,155,611 3,853,078 — 2.8 — 1.6 T o tal 24 c ities....$4,643,743 — 3.4 — 3.9 $28,008,689 — 2.7 Savings—T he gains of 1.3 per cent in the am ount of savings deposits and 1.4 per cent in the average savings account between May 31 and July 1, evidenced by figures from 202 banks in this district, were reported to be largely due to the crediting of semi-annual interest on the latter date. Slackened industrial activity, particularly in the au to mobile industry, was a contributing factor to the decline in Michigan of 0.1 per cent both in the am ount of savings deposits and in the average savings account. In the re m aining four states increases in the am ount of savings de posits ranging from 0.6 per cent in W isconsin to 2.4 per cent in Illinois were reported, while gains in the average savings account ran from 0.6 per cent in W isconsin to 2.5 per cent in Illinois. In com parison w ith a year ago, the five states show ed increases in the am ount of their savings deposits, the dis trict gain aggregating 5.3 per cent. T he upw ard trend in the average savings account, however, was much less marked, the increase averaging only 0.3 per cent, w ith de clines in Indiana and Iow a am ounting to 1.3 and 1.5 per cent, respectively; Illinois and Michigan each showed an increase of 0.6 per cent while W isconsin gained 0.4 per cent. Bonds—The bond m arket has exhibited m arked strength in nearly every line, industrials, which very definitely reflect the general business situation, and real estate bonds pre dicated on inflated valuation, being the only exceptions. T he greater volume of purchases, particularly of short m a turities, has been on the part of institutions; individual in vestors, however, have show n considerable interest in municipals. Real estate bonds on conservatively valued property have met with a m oderate dem and from individ uals. Foreign offerings during the period from June 15 to July 15 have been well received, in contrast to the attitude several m onths ago when purchasers of this class of se curities were difficult to find. The consistently stro n g de mand has resulted in a strengthening of prices, and reports indicate that the supply of offerings is not fully adequate to meet the prevailing requirem ents of the investing public. AGRICULTURAL PRODUCTION AND FOODSTUFFS A ccording to reports from 154 county agents represent ing 189,722 farm ers in the Seventh Federal Reserve dis trict, the 1924 crop of w inter wheat was slower than usual in maturing, and although conditions improved materially after June 1, the harvest now under way is expected to total 26 per cent smaller than the district production in 1923. T his reduction is due largely to a lower acreage. Aside from scab in a few counties of northw estern Illinois and south central Indiana, the quality of the crop is fairly Page 4 August good. Cool w eather in June continued to be a retarding factor in the growth of corn and excessive m oisture pre vented sufficient cultivation to keep fields free from weeds, but was favorable to the grow th of oats, wheat, and pota toes. Good grow ing w eather during the rem ainder of the season is necessary to make and m ature the corn ear, as the crop is now two to four weeks late. W eather condi tions have been conducive to an unusual spread of worm and insect pests, and the natural agencies ordinarily suffi- cient to control them have been only partially effective this year. A rm y worms have dam aged corn and forage crops to some extent in counties of northw estern Illinois, eastern Iowa, and southeastern Michigan. CROP PRODUCTION E stim a te d by th e B u re au of A g ric u ltu ral Econom ics as o f Ju ly 1 ( I n th o u san d s o f bushels) S e v e n t h D is t r ic t F orecast F in a l 1924 C o m ......................771,224 O ats ......................534,773 T otal W h eat ...... 61,401 W in te r W h eat 58,856 S p rin g W h ea t 2,545 P otatoes 58,850 ♦Tobacco ............... 47,279 **H ay (T am e) ..................... 1923 976,124 490,254 82,965 79,815 3,150 70,752 50,354 18,003 F orecast 1924 2,515,385 1,356,338 740,012 542,551 197,461 372,968 1,294,150 90,076 U n it e d S tates F in a l 1918-22 1923 3,046,277 1,299,823 785,741 572,340 213,401 412,392 1,491,066 89,098 5-Y r. Av. 2,899,428 1,302,516 880,989 624,653 256,336 390,616 1,361,000 85,800 ♦In tho u san d s of pounds. **In th o u san d s of to n s— d istric t figures fo r 1924 n o t yet available. The U nited States Bureau of A gricultural Econom ics on July 11 estim ated that, because of a \ y 2\ per cent reduction in acreage and the lateness of the spring season, the wheat harvest in the northern hem isphere would probably total 10 per cent less this year than in 1923. The spring crop of pigs in the U nited States was 19.8 per cent sm aller in 1924 than in 1923, while the lamb crop is estim ated as 5 to 10 per cent greater than a year ago. A report from the Cheyenne, W yom ing, office of the above-mentioned organization shows the 1924 estim ates of the sugar beet crop in the U nited States at 7,344,000 tons and the bean production at 13,629,000 bushels, compared with 6,565,000 tons and 15,743,000 bushels, respectively, in 1923. GRAIN M ARKETING Grain prices at interior prim ary m arkets showed a de cided advance in June. Receipts of oats declined, while corn and w heat arrived in slightly larger quantities than in May. Com parison with June, 1923, shows that more corn was received at these m arkets in June this year but a sm aller volume of w heat and oats. Reshipm ents were less than in M ay and those of w heat and oats lower than in June of 1922 or 1923. E xportations of wheat, rye, oats and barley were greater in June than in May, but corn showed recession. Domestic demand for all grains is som ew hat slow and exports also tend to lag at present. Visible w heat supplies in the U nited States, Canada, and the U nited K ingdom were 141,298,000 bushels on July 12, 1924, compared w ith 166,132,000 bushels on June 14, 1924, and 95,613,000 bushels on July 14, 1923. The Bureau of A gricultural Econom ics estim ated that 30,696,000 bushels of w heat still rem ained on farm s in the U nited States on July , 1924, this being a reduction of 14.5 per cent from holdings a year ago. district which operated at an average of 58.9 per cent of capacity com pared w ith 52.4 per cent in May. A ggregate output during June showed a gain of 8.1 per cent over the May volume, in contrast w ith the marked curtailm ent dur ing June, 1923; w heat flour increased 8.0 per cent and other flour 10.1 per cent. T otal production exceeded that of a year ago by 44.6 per cent, w heat flour show ing a gain of 47.8 per cent, while other flour decreased 8.6 per cent. O perations at the thirty-six mills during June, 1923, were m aintained at an average of 39.2 per cent of capacity. Stocks of flour on hand June 30 were 6.3 per cent larger than at the beginning of the month, and 8.1 per cent heavier than on the corresponding date last year. W heat stocks, on the other hand, declined 25.8 per cent from the M ay 31 level, but increased 26.9 per cent over a year ago. Sales during June increased 3.5 per cent in volume and 4.1 per cent in value over May and, in com parison w ith the same month last year, gains of 16.3 per cent in volume and 8.2 per cent in value were in evidence. Receipts and shipm ents at Chicago were the same as in May, according to figures from the Chicago Board of Trade, but compared w ith June, 1923, both receipts and shipm ents increased, the form er by 146,000 barrels and the latter by 39,000 barrels. M O VEM ENT OF L IV E STOCK The aggregate of animals received at public stock yards in the U nited States during June was g reater than in the corresponding m onth of 1923. The upw ard movement of corn prices in recent m onths to a point above the profitable feeding level resulted in greater liquidation of live stock, so th at slaughter of sheep and hogs increased in volume over the preceding m onth. Receipts of bovine stock, how ever, receded from the high point attained in May, reflect ing lessened dem and for fresh beef, partly seasonal, but aggravated by increasing unem ploym ent. Cattle, calf, and hog slaughter exceeded the 1919-23 average for June, while sheep and lamb receipts fell below this five-year level. LIVE STOCK SLAUGHTER S heep Y ards in S eventh d istric t C a ttle H ogs an d L a m b s C alves J u n e , 1924 ........................................ 214,705 1,030,465 259,381 114,534 P u b lic Stock Y ards in U . S. J u n e , 1924 ..............................- ............637,657 2,851,895 903,356 392,337 M ay, 1924 ........................................ .693,686 2,734,644 723,263 447,014 J u n e , 1923 .....................- .....................627,190 2,814,760 816,515 368,743 The movement of live stock back to feed lots was under the five-year average for June. A greater volume of sheep and lambs was shipped back to farm s than in the preced ing month, but the feeder m ovem ent of hogs, cattle, and calves receded slightly from that in May. 1 AVERAGE PRICES OF LIVE STOCK P e r h u n d re d pounds a t C hicago VISIBLE SUPPLY OF GRAIN IN THE UNITED STATES S to ck s in p u b lic and p riv a te w a re h o u se s, a t p rin c ip a l p o in ts of a c cum ulation, a t lake an d seaboard points, and in tra n s it by w ater in the U n ite d S tates. F ig u res supplied by th e Chicago B oard o f T rad e. ( I n th o u san d s of bushels) R ye B arley W heat C orn O ats J u ly 19, 1924 310 3,771 3,951 15,415 W areho u ses a n d A float....... ......... 34,175 128 142 2,153 B onded ............................................ 4,210 J u n e 16, 1924 589 5,630 16,946 W areho u ses and A float....... ......... 38,788 11,150 298 223 1,044 B onded ............................................ 6,286 Ju ly 21, 1923 945 1,847 5,930 13,330 W areho u ses an d A float....... ......... 24,800 159 74 1,054 B onded .............................................. 1,097 Flour—Flour milling during June displayed an upward trend, according to reports from thirty-six mills in this W e e k ended J u l y 12 1924 N ative B eef S teers (average)...........$ 9.15 F a t Cows and H e ife rs ............... ........ 6.30 C anners a nd C u tte rs ................... ........ 3.00 Calves ................................................ ......... 10.50 Stockers and F e e d e rs................. ........ 6.25 H ogs (b u lk of s a le s )................ ......... 7.10 S heep .......................«................................. 5.25 Y earling S heep ........................... ......... 11.00 Lam bs ............................................. ......... 13.65 J une 1924 $ 9.35 6.20 3.00 8.85 6.75 7.05 5.30 12.00 14.65 M o n t h s of M ay 1924 $ 9.65 6.80 3.25 9.15 7.45 7.35 7.50 12.15 15.10 J une 1923 $ 9.65 6.20 2.95 10.65 5.85 7.20 5.95 10.85 14.20 Meat Packing—Sales of fresh m eat tended to diminish somewhat during June because of general unem ploym ent and w eather conditions, and the total for packing house products, as reported by fifty-seven establishm ents in the Page 5 August U nited States, was 0.2 per cent less than in May, 1924, but 1.3 per cent above June, 1923. Em ploym ent in packing plants increased 1.3 per cent in number, 14.9 per cent in hours w orked, and 10.8 per cent in total payrolls during the period covered by the last pay-date in June, compared with the corresponding period in the preceding m onth. Lard holdings w ere greater, but stocks of meat low er in the U nited States on July 1 than at the begin ning of June. T otal inventories were som ewhat smaller than for the corresponding date in June, 1924, July, 1923, or the 1919-23 average for July, but were slightly greater than the July 1 average for the years 1921-23. The price of pork loins declined rather sharply, while th at of lamb and som e of the common grades of beef eased som ew hat; lard advanced, but prices of the m ajority of other edible products did not change m aterially from those prevailing in May. English im porters purchased both hog meats and lard in larger quantities than during the past few m onths, and better conditions in G ermany following the severe crisis of the last four m onths were conducive to fair purchases of lard by that country; so that the total volume of m eats and lard forw arded in June for export nearly equaled that in May. Prices in the U nited Kingdom have shown a decided im provem ent and, although many of the products, especially lard and bacon, are not yet on a replacem ent basis, they are nearer a parity w ith those in American m arkets than a m onth ago. Continental prices for lard are about in line w ith those in the U nited States, but those of hog meats are below parity w ith our m arkets. Con signm ent stocks already abroad were indicated lower on July 1 than at the beginning of June. FUEL AND O w ing to a continuation of seasonal influences, the pro duction of cream ery butter again m oved sharply upw ard in June. O utput in the Seventh district was 12.3 per cent over th at in M ay and 3.3 per cent more than in the corre sponding period in 1923, the peak m onth last year. W eekly statistics indicate th at the am ount of b u tter m anufactured by creameries in the U nited States during June was also larger than in either the preceding m onth or June, 1923. W isconsin factories made 25.3 per cent m ore cheese d u r ing the five weeks ended July 5 than in the prior period, the production being 7.2 per cent above th at between cor responding dates a year ago. A ggregate sales of cream ery butter in June rose 17.8 per cent above those in May and were 4.5 per cent g reater than in June, 1923, according to reports sent direct to this bank by representative com pa nies in the Seventh district. More bu tter and cheese but a smaller quantity of eggs and poultry were received at the Chicago m arket during June than a m onth ago. In the year-to-year com parisons receipts of butter were on a higher level but those of cheese, eggs, and poultry were less. Seasonal accum ula tion brought cold storage holdings of dairy products in the U nited States to a point on July 1 higher than the five-year average for that date; poultry inventories were reduced. Butter in storage on July 18 in tw enty-six cities in the U nited States gained nearly 33 per cent from July 5, 1924, according to reports from the D epartm ent of A gri culture. Prices of cheese show ed little change, those of poultry declined, while the averages for eggs and bu tter rose above those in May. POWER PRODUCTION COAL L ittle change has developed in the Middle W est coal situation during the past m onth. Demand for Illinois and Indiana coal continued very dull, as mines in these states, w ith the exception of strip mines, were unable to com pete with the low prices charged by W estern K entucky operators. The only changes in the prices of bituminous coal between June 16 and July 15 were in W estern K en tucky and Indiana coals. A m ong the form er, gains were reported in domestic egg and nut, while domestic lump, steam lump, steam egg, and screenings, showed decreases; Indiana fourth and fifth vein screenings also evidenced de clines. I t is reported that some of the Illinois mines which were closed down have re-opened, and although production in the state rem ained very light during June, the volume w as slightly larger than in either of the two preceding m onths. A ccording to figures furnished by the Illinois Coal O perators Association, 3,978,560 tons of coal were mined during June com pared w ith 3,754,650 tons in May and 3,812,500 tons in April. A lthough the gain in June output was very small, it is w orthy of note inasmuch as production during previous m onths of 1924 showed a steady dow nw ard trend from the peak of 9,113,280 tons mined in January. D uring June, 1923, Illinois production totaled 5,404,440 tons. Page 6 August DA IRY P R O D U C T S A N D PO U LT R Y A bout sixty per cent of the Indiana mines are reported idle, and according to the chief mine inspector of Indiana, 12,289,296 tons of coal were produced in the state during the first half of the present fiscal year compared w ith 14,772,347 tons in the corresponding period of 1923. In contrast w ith the slightly increased production in Illi nois during June, bitum inous coal output for the U nited States, according to prelim inary estim ate of the Geologi cal Survey, aggregated 30,447,000 net tons com pared with 31,236,000 tons in May and 45,490,000 to n s during June, 1923. A verage daily output, however, was greater in June than in May. A lthough lake trade in bitum inous coal continued in smaller volume than, in 1923, June show ed an im provem ent over May, according to figures furnished by the O re and Coal Exchange. The loadings of bitum inous coal at Lake Erie ports in June, 1924, May, 1924, and June, 1923, together with the relative volume of cargo and fuel included in the loading figures, are shown below: J u n e , 1924 C argo ............... .............................................. 2,747,125 F uel ...................................................... .......... 185,668 T otal ............................................................... 2,932,793 M ay, 1924 2,433,862 175,731 2,609,593 J 1923 4,696,061 245,782 une, 4,941,843 D istribution of bitum inous coal to American ports on Lake Superior during June totaled 1,125,525 net tons, and on Lake M ichigan 780,115 tons, compared w ith 2,279,757 tons and 1,159,467 tons, respectively, the same m onth last year. A nthracite production in the U nited States during June followed a similar trend to that of bituminous. O utput for the m onth totaled approxim ately 7,704,000 net tons com pared w ith 7,745,000 tons in May and 8,665,000 tons in June, 1923. It is reported that, although anthracite prices throughout the Middle W est were raised about ten cents at the beginning of July, demand showed practically no improvement. cept th at in the latter m onth the average daily industrial sales also receded. Increased production facilities in June brought plant capacity of the nine companies reporting in that m onth 2.4 per cent above May and 15.0 per cent over the same m onth in 192 ,3 . F or the six m onths ended June 30 the total production of energy was 8.1 per cent ahead of the same period in 1923, while sales to industrial users were 8.3 per cent larger. ELECTRIC ENERGY Compiled fro m dire c t re p o rts to this ban k from n in e com panies CHANGES IN JUNE, 1924, FROM PREVIOUS MONTHS P er CENT CHANGE J une M ay 1924 1924 .496,131,370 — 6.5 16,537,712 — 3.4 . 1,240,874 — 3.8 — 3.5 .211,664,840 A condition unusual in the operations of electric energy producers in this district was show n in the reports for June, which, for the first time since September, 1921, regis tered recessions in the year-to-year com parisons of all items except average daily industrial sales and peakload demand. Declines in the June com parisons w ith the pre ceding month were sim ilar to those occurring in May, ex FROM J une 1923 — 0.3 — 0.3 + 0 .2 — 3.2 In d u s tria l sales (w orking day average . 8,466,594 J une 1924 t y .........65.2 ............. 55.5 Load + 0 .4 M ay 1924 69.3 55.3 + 0 .6 J une 1923 74.8 55.8 INDUSTRIAL EMPLOYMENT CONDITIONS Industrial employment in the Seventh Federal Reserve district experienced a further decline during the m onth ended June 15. An aggregate em ployment of 370,000 w orkers on that date registered a decrease of 3.7 per cent in men and 5.6 per cent in earnings. This brought the percentage of curtailm ent reported since March 15, or for a period of three m onths, up to 9 and 12 per cent, respec tively, for men and payrolls. W hile the reduction shown by the June reports was as heavy as that of the m onth before, there was evident a readjustm ent am ong the industries affected. M etal indus tries and the m anufacture of vehicles, the two groups which were the last to yield to the present depression, are now ahowing the greatest percentage decline. Iron and steel mills laid off over 10 per cent of their men in addition to shortening the time schedule, whereas in May the reduc tion at these mills am ounted to about 3 per cent. The m anufacture of vehicles, reflecting mainly the downward trend in autom obile production, reduced em ployment 8 per cent as against 3 per cent during the earlier month. F o r the other industries included in the district report, the aggregate change was a slight increase, in contrast to con ditions during both A pril and May when declines were re corded exceeding those of the other two groups. T he ac tual gains during the last reporting m onth, however, were m ainly confined to the food products and the m en’s cloth ing industries, in both of which the renewed activity is seasonal. The boot and shoe industry showed signs of im provem ent, b ut the em ploym ent reports cover the m id dle of the m onth, and later production figures indicate that the gains have not been maintained. The m ost m arked de clines for the m onth, outside of metals and vehicles, were experienced in knit goods, women’s clothing, tanning, and chemicals. EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT N um ber of W W EEK age J u n e 15 A ll groups (1 0 )......................................................................... M etals a n d m etal p ro d u cts (o th e r th a n v eh icles).......... V ehicles ....... —..... ......................... ............................................... Food a nd re la te d p ro d u cts...................................................... Stone, clay, a n d glass p ro d ucts........ ...................................... L um ber an d its p ro d u cts........................................................ C hem ical p ro d u c ts........................................................................ L e a th e r p ro d u cts....... - ................................................................. R ubber p ro d u c ts............................................................................ P a p e r an d p rin tin g ..................................................................... 370,909 150,139 41,559 27' 824 49,059 12,913 34,097 9,116 15,884 2,512 27,806 E a rn ers T otal E a r n in g s ENDED I n d u s t r ia l G ro u p M ay 15 385,299 160,978 45,029 25.836 49,093 13,125 34.837 9,970 15,831 2,463 28,137 W EEK P er C e n t C hange — 3.7 — 6.7 — 7.7 + 7 .7 — 0.1 — 1.6 — 2.1 — 8.6 + 0 .3 + 2 .0 — 1.2 ENDED J u n e 15 M ay 15 $8,927,913 3,103,201 1,166,965 $9,453,204 3,534,064 1,310,624 579,249 1,270,422 391,413 854,624 256,328 342,707 64,192 849,581 1,319,426 383,189 805,917 233,678 346,843 65,184 830,548 P er C e n t C hange — 5.6 — 12.2 — 11.0 + 16.2 + 3.9 — 2.1 — 5.7 — 8.8 + 1.2 + 1.5 — 2.2 MANUFACTURING ACTIVITIES AND OUTPUT A U TO M O BIL E PR O D U C T IO N A N D D IST R IB U T IO N F urther curtailm ent of activity in the automobile indus try is revealed in the June production statistics received by this bank. Passenger cars were produced in the sm all est volume since December, 1922, while the output of trucks reached the lowest level since February, 1923. The num ber of passenger cars built by identical m anufacturers representing practically complete production, am ounted to 217,845, a recession of 22.0 per cent from May and 35.4 per cent from June, 1923. T rucks manufactured by firms whose May output am ounted to 32,326 totaled 27,040 in June, a decrease of 16.4 per cent from the previous month and 32.3 per cent from a year ago. Passenger cars and trucks built during the first six Page 7 August m onths of 1924 num bered 1,992,030 com pared with 2,026,968 during the corresponding period of 1923, a drop of 1.7 per cent. Passenger cars produced during the current period totaled 1,805,980 or 1.5 per cent under a year ago, while the output of trucks aggregating 186,050 showed a shrinkage of 3.8 per cent. Sales of new automobiles and m otorcycles at wholesale and retail reported June 30, 1924, am ounted to $141,984,333 in the five states including the Seventh Federal Reserve district. T his figure is 28.0 per cent under that of May 31, and 26.9 per cent below a year ago. Automobile truck and m otor wagon sales were $17,884,656, a loss of 26.0 per cent from the preceding m onth and 28.9 per cent from last year. Sales of automobile parts and accessories totaled $12,085,555, or 55.9 per cent less than those of the previous m onth, and 41.5 per cent less than June 30, 1923. These figures are not com parable with the June production or factory shipm ent figures. R eports received by this bank from warehouses in Chi cago, the distributing point for a large portion of the Mid dle W est, indicate a further reduction in the num ber of cars in storage and a considerable falling off in replace ments, although one warehouse reported very little change from a m onth ago in the number of cars on hand and rather large replacements. The distribution of automobiles during June by seventynine dealers and distributors in the Middle W est was again less active than in the preceding m onth and year at both wholesale and retail, although retail sales declined less ex tensively than wholesale transactions. A further reduc tion was noted in the stocks of new cars on hand June 30, as com pared w ith the preceding month, although the yearto-year com parison shows stocks greatly in excess of June 30, 1923. Sales of used cars were below the previous month and year. The num ber of used cars on hand at the end of June was below that on May 31, but the volume was greater than a year ago. DISTRIBUTION OF AUTOMOBILES C hanges in J u n e, 1924, fro m previous m onths P er CENT CHANGE FROM J une M ay 1924 N um ber of new cars sold W holesale ........................ — 36.3 R etail .............................. — 25.0 V alue of new cars sold W holesale .......................... — 29.6 R etail ................................. — 24.1 N ew cars on h an d a t end of m onth N u m b er ............................ — 23.9 V alue ................................. — 18.3 Used cars sold d u rin g m onth — 6.9 Salable used cars on hand a t end of m onth N u m b er ............................ — 7.2 V alue ................................ — 6.8 C o m p a n ie s M ay in c l u d e d J une 1923 1924 1923 — 33.1 — 19.9 48 74 46 65 — 28.7 — 21.6 48 74 46 65 + 68.1 + 46.3 — 3.0 79 79 75 63 63 65 + 2 5 .9 + 11.3 75 75 54 54 E xports of passenger cars from the United States during May, while m aintaining a high level, were below those of April. The num ber exported during the month was 14,363, a decline of 9.1 per cent from April and a gain of 14.9 per cent over M ay last year. The value of these cars was placed at $10,581,617, or 5.5 per cent below the previous m onth and 24.0 above a year ago. Trucks exported num bered 2,739 w ith a value of $1,593,832, showing losses of 0.9 per cent and 8.7 per cent, respectively, from April, and increases of 5.1 per cent and 28.9 per cent, respectively, over a year ago. Page 8 August AG R IC ULTU R A L M A C H IN ERY A N D E Q U IP M E N T Conforming to the m ovem ents usual at this time of year, thresher sales increased in June, while those in the tillage group showed a further recession. E xports expanded over June last year but failed to keep pace w ith those in May, 1924. The total of domestic and export sales was under the preceding m onth as well as the corresponding period in 1923. Production moved downward, reaching 51.9 per cent of the theoretical rate for June. T hirteen firms re ported th at dealers’ stocks were moving more rapidly into farm ers’ hands, but thirty-one companies found conditions unchanged from a m onth ago. Collections continue slow. PRODUCTION AND SALES OF FARM EQUIPMENT IN THE U. S. C hanges in J u n e , 1924, from previous m onths P er CENT CHANGE FROM J une M ay Dom estic sales ........ .................. Sales billed fo r e x p o rt.......... T o tal dom estic an d export sales ..................................... P ro d u ctio n ................................. C o m p a n ie s M ay in c l u d e d J une 1924 — 3.7 — 14.3 1923 — 14.9 + 2.5 1924 106 106 1923 106 106 — 5.4 — 8.4 — 12.7 — 16.8 106 101 106 101 Sales based on dollar am ounts. P ro d u ctio n com puted from em ploym ent. IR O N A N D STEE L Actual new business in the iron and steel industry throughout the country in June was no better than in the preceding two m onths, but there were evidences neverthe less of an improved undertone, increasing in degree tow ard the end of the month, when price recessions became less frequent and the general situation more stable. T his im provem ent was partly due to the belief am ong producers th at low stocks in the hands of consum ing m anufacturers would soon force the latter into the m arket for replenish ments. The tone was also influenced for the better by a nearer approach to an equilibrium between production and shipm ents than has been the case since output began to fall in April. On the whole, production was carried fo r w ard at about 45 to 50 per cent of ingot capacity in June. Steel prices were fairly stable during the m onth, although some concessions were obtainable on attractive business, and the close of the m onth was m arked by indications of new weaknesses in bar, plate, and shape prices. A general buying m ovem ent in pig iron was begun in June; consum ing industries were in the m arket for good sized tonnages for the third quarter, and in m any instances for orders to the year-end. The volume of sales m ounted steadily until the close of the m onth, when a perceptible slowing down took place. H eavy buying was done by radiator and sanitary ware m anufacturers, indicating con tinued activity in building. A lthough the price recessions were carried into June, the reductions became less pro nounced tow ard the close of the m onth and the general level was better maintained. At Chicago steel buying was extrem ely light and prices were shaded conspicuously throughout m ost of the m onth, although tow ard the close fewer unusual concessions were made. Ingot production in this district dropped steadily. Building construction and oil tank aw ards were the main sources of business, w ith orders in general confined to m aterial for imm ediate shipment, inasmuch as consum ers’ stocks are at a low ebb. Chicago participation in the pig iron movement was notable, but in spite of this activity, prices receded about $2.00 per ton during the m onth and producers continued the curtailm ent of their operations. June production of steel ingots in the U nited States aggregated 2,056,466 tons, a decline, on the daily average basis, of 15.5 per cent from May. Pig iron output was 2,026,221 tons for the country, a recession in the daily average of 19.9 per cent from May. In the Illinois and Indiana district the contraction averaged 23.8 per cent. The volume of unfilled orders of the U nited States Steel Corporation, declining 10.1 per cent to 3,262,505 tons, was the smallest since November, 1914. The composite average of iron and steel prices compiled by Iron Trade dropped from $41.14 on May 28 to $40.13 on July 2, owing princi pally to pig iron weaknesses. Zinc—Production of slab zinc in the tri-state district in June declined 8.9 per cent to 43,442 tons, while shipments were reduced 5.1 per cent. Stocks increased to 49,684 tons, the largest since April, 1922. Casting Foundries—The decline in metal consumption of reporting casting foundries from the preceding m onth was larger in June than in any other month this year, and the recession from the corresponding m onth in 1923 was exceeded only in January. Tw enty-seven foundries in this district operated at an average of 60.9 per cent of capacity in June as com pared with 71.3 per cent in May. In the former month the average value per ton of castings shipped was $147.97, as com pared w ith $145.75 in May, and $146.17 in June, 1923. The aggregate shipm ents of castings in the first half of 1924 were 13.2 per cent smaller in value and 19.4 per cent less in tonnage than in the corresponding six m onths of 1923, while the total of metal consumed was reduced 21.1 per cent. T here was very little change in the collection situation in June, any noticeable slowness being in the Middle W est and the South. CHANGES IN JUNE, 1924, FROM PREVIOUS MONTHS P er CENT CHANGE FROM M ay J une P ig iron consum ed................. Iro n scrap co nsum ed............. S teel scrap consum ed ...... T otal ton n ag e co n su m ed ...... C astings shipped (to n n ag e) C astings shipped (d o llars).... 1924 --2 1 .3 - - 9.3 - -1 1 .8 - -1 3 .6 - -1 5 .4 --1 3 .7 1923 — 42.2 — 30.5 — 24.9 — 29.3 — 28.7 — 27.8 C o m p a n ie s INCLUDED M ay J une 1924 29 29 29 29 28 28 1923 29 29 29 29 28 28 Stoves and Furnaces—Reports from stove and furnace m anufacturers in this district give no evidence of any distinct change in trends during June as com pared with the two preceding months, except th at orders were above a year ago. W ith the first of the year shipm ents began a rise which reached its peak in March, in April they were off 7.4 per cent, rem aining stationary in May, and in June shrunk 7.9 per cent. A com parison of the aggregates for the first half of this year w ith the corresponding period in 1923 discloses a reduction of 2.4 per cent in the volume of shipm ents and of 26.4 per cent in orders accepted. Collections continue slow with m any firms, reports in dicating that the condition is spread over a rather wide territory, although m ost difficulty is encountered in the agricultural districts of the Central W est. CHANGES IN JUNE, 1924, FROM PREVIOUS MONTHS P er S hipm ents .................... ............... O rd ers accepted ....... ............... In v e n to rie s ................ ............... O perations (m oulding room ) cent M ay 1924 — 7.9 — 14.0 + 1.6 — 3.6 CHANGE FROM J une 1923 — 18.1 + 5.5 + 10.1 — 11.4 C o m p a n ie s INCLUDED M ay J une 1924 1923 18 18 13 13 13 13 17 16 SH O E M ANUFACTURING, T A N N IN G , A N D H ID E S A gradual slow ing down of activity at shoe factories, in anticipation of the July inventory and the annual vacation period, was evidenced by lower production during June and a dropping off in shipm ents to a point 16.4 per cent below June, 1923, and approxim ately to the level in the cor responding month of 1922. Production was about equal to forw ardings, so th at inventories changed little from the preceding m onth, those reported by tw enty-four companies as of July 1 being 108.3 per cent of their shipm ents during June. Tw enty-one firms had unfilled orders sufficient for nearly eight weeks’ business at the June rate. Collections continue to lag. CHANGES IN THE SHOE MANUFACTURING INDUSTRY JUNE, 1924, COMPARED WITH PREVIOUS MONTHS P er c e n t c h a n g e fr o m J une M ay P ro d u ctio n ................................. S hipm ents ................................... In v e n to ries ................................. U nfilled orders .......................... 1924 — 6.7 — 7.8 — 2.7 + 2 .5 1923 — 13.6 — 16.4 + 1.2 — 32.2 C o m p a n ie s M ay 1924 33 33 25 23 IN in c l u d e d J une 1923 33 33 25 23 L eather production was m aintained at about the May level, but was under th at in June last year. Sales in dol lars rose slightly above the total for the preceding month, although they showed a considerable recession from the corresponding m onth in 1923. Belting and harness sales dropped to a point much lower than in May. Leather prices remained about the same as those prevailing a month ago. The m ajority of tanners restricted purchases of raw ma terial to actual needs, so that the packer green hide m ar kets were less active and only approxim ately the same num ber of calf skins were moved at Chicago in June as in the preceding month. More active trading for hides took place at Chicago during the early part of July. Ship m ents of green hides and skins from Chicago expanded slightly. L ittle change in prices occurred from those of a month ago, although there are some indications of a firm ing tendency. RAW W O O L A N D F IN IS H E D W O O L EN S Despite the continued light dem and for woolens and worsteds, considerable im provem ent in the undertone of the wool m arket was noticeable during the last few days of June and the first two weeks of July, and slightly firm er prices ruled. Estim ates by members of the trade as to the am ount of this year’s clip sold by grow ers to dealers range from about sixty to eighty per cent. A ccording to figures from the Bureau of Foreign and Domestic Commerce, im ports of wool into the U nited States during the first five m onths of 1924 aggregated only about half the volume in the corresponding period of the previous year, while large quantities of foreign wools held in bond in this country have been re-exported. It is re ported that a total of approxim ately 9,586,000 pounds of greasy and scoured wools were cleared for export from the port of Boston during the first six m onths of this year. T he decrease in wool im ports, as well as the increase in the re-exports of foreign wools, has been a contributing factor to the decline in stocks of wool, tops, and noils held by dealers and m anufacturers in the U nited States, to a lower level on April 1 this year than at any time since the same m onth in 1919. Furtherm ore, this scarcity of Page 9 August wool stocks is reported to exist not only in the United States but throughout the world as well, and figures fur nished by the D epartm ent of A griculture show a decrease from pre-w ar estim ates in the num ber of sheep in seven countries that produce m ore than half the w orld supply of wool, indicating little probability of an increase in world wool production in the immediate future. The goods m arket remains slow, but interest is now di rected to the opening of the lightweight season which is expected in August, as m anufacturers look forw ard to at least some additional business at that time. F U R N IT U R E Both orders booked and shipments, according to reports from tw enty-one furniture m anufacturers in this district, were smaller in June than in the preceding m onth, the form er by 11.1 per cent and the latter by 16.4 per cent. All except one of the reporting firms in Illinois, Indiana, Iowa, and W isconsin showed decreases, while aggregate figures of Michigan m anufacturers indicated increases both in orders and shipm ents. Cancellations, based on figures from sixteen plants in the district, were 47.0 per cent less than in May. Nineteen firms reported a decline of 6.4 per cent in unfilled orders, leaving approxim ately five w eeks’ business on hand at the end of the m onth. O perations of fifteen plants averaged 73.9 per cent of capacity in Ju n e com pared with 76.7 per cent in the preceding m onth. Com parison with a year ago showed declines of 30.0 per cent in orders booked, 29.9 per cent in shipm ents, and 75.3 per cent in cancellations. Unfilled orders w ere 54.5 per cent sm aller on June 30 than on the corresponding date last year. BUILDING MATERIALS AND CONSTRUCTION ACTIVITIES Reductions in both cut and shipments, with prices still at a low ebb, characterized the lumber industry during June. A lthough producers reported some stim ulation in demand, sales of thirty-one dealers and m anufacturers in this district receded 9.6 per cent from the May figure, in com parison with a decline of 8.6 per cent for the same period last year. Sales were about 20 per cent under June, 1923, while the aggregate for the first six m onths of this year, as reported by fifteen firms, shows a decrease of 13.9 per cent from the corresponding period last year. Lum ber receipts and shipm ents at Chicago also re flect the curtailed m ovem ent; June receipts were 26,488,000 feet under those for May, and shipm ents less by 27,964,000 feet. Buying has been alm ost exclusively for cur rent needs and orders received have been for small am ounts. The few large orders placed are coming from the building trade, but industrial requirem ents remain light. As a result of this lack of future buying and of cancellations by large m anufacturing interests, stocks in the hands of producers continue to increase and unfilled orders to diminish. Conditions in the cement and brick industries during June were similar to those existing in May. The demand for common brick in the Chicago district is still greater than the supply and production has been m aintained at full capacity, w ith wet w eather causing some interference w ith m anufacture. Business in the rural sections of the district continues restricted, with little prospect of much activity before fall. Stocks of cement in the U nited States were 62.6 per cent in excess of those held last June, although 9 per cent less than in May, 1924, and represented a total decline of 18.1 per cent from the peak in March. June production declined slightly, but shipments were the largest on record and increased 3.3 per cent over May. B U IL D IN G C O N STRU C TIO N In contrast to a 14.5 per cent decline in residential con struction during June, the value of all other contracts aw arded in this district increased to such an extent that the total for all contracts was 14.5 per cent in excess of th at for May. Comparison w ith a year ago shows the op posite trend, residential w ork gaining 13.9 per cent, while the total for the district dropped 6.2| per cent. C ontracts let in the first half of this year aggregated $367,875,019, which is 2.7 per cent under the figure for the same period in 1923 and, com pared w ith the 1.8 per cent decline reported for the cumulative period in May, reveals the present down ward trend in building from the level of a year ago. Con sidering in its entirety each of the five states in this dis trict, Iowa alone showed a decrease from May in the to tal am ount of .contracts awarded. The gains in the oth er f o u r states—Indiana, Illinois, Michigan, and W isconsin— were large, ranging from 19.2 per cent for Illinois to 82.8 per cent for W isconsin. The latter was the only state, however, to report any increase in residential building. Changes were varied in the comparison w ith June, 1923; Michigan, Illinois, and W isconsin building expanding, while that in Indiana and Iow a was below last year. Building in prospect continues to display signs of a gradual recession. P erm its granted in forty-nine cities of this district decreased 19.4 per cent in num ber and 9.3 per cent in value from May, and were 2 per cent under last June in number, but were 29.5 per cent g reater in value than in th at m onth. This latter gain was caused, however, by the large am ount of perm its issued in the cities of Chicago and D etroit; excluding the figures for these two cities, a considerable decline was shown. MERCHANDISING CONDITIONS Wholesale Trade—W holesale trade during June was characterized by a continuation of the trends which had been apparent in May. F or the five commodities covered by returns to this bank, sales again fell below the 1923 volume, while in com parison with the previous m onth gro Page 10 August cery dealers for the second time were the only group to show an increase—and this less m arked than in 1922 and 1923 when June was the peak sales m onth for the year. Com pared w ith two years ago, sales were smaller this June for all groups, the decrease for hardw are and drugs being the first unfavorable com parison to be made with the corresponding m onth of 1922. For the m ajority of firms in the latter group, as well as for dry goods and shoes, sales were below the 1921 level also; in groceries and hardw are, on the other hand, gains over June, 1921, were shown of 4 and 18 per cent, respectively, or practi cally the same as those for May. Cumulative sales figures for the first six m onths of 1924 indicate larger differences from 1923 than were noted at the end of the first quarter for groceries, hardw are, and dry goods, aggregate declines being 4, 6, and 12 per cent, respectively. The 5 per cent decrease for drug sales con tinued, while the shoe decrease, although still larger than th at for the other commodities, was less than for the first three m onths. Inventory reductions during June ranged from 3 per cent each for drugs and hardw are to 6 per cent for g ro ceries, with the dry goods group averaging about the same as on May 31. Comparisons with 1923 continued to vary for individual firms, the m ajority in each group except hardware, however, being inventoried lower on June 30, 1924, than a year ago. A study of the relation of average stocks held during the first half of 1924 to average sales shows reporting dry goods, hardw are, and shoe firms gen erally carrying a larger proportion of stocks than in 1923; for about half the dealers in both groceries and drugs, the m argin was narrow er. June collection figures for thirty-seven firms out of sixty were smaller than in May, w ith all groups except groceries averaging declines, which were not, however, out of line with the May sales contraction. F or nearly tw o-thirds of the dealers, accounts outstanding June 30 were lower than at the end of May or a year ago. Delinquent accounts* reported for June to the Electrical Credit A ssociation by m ember m anufacturers and jobbers in the Central Divi sion am ounted to $108,723.48, which is an increase of 14.3 per cent over a year ago, but a decline from May, 1924, of 1.3 per cent. Department Store Trade—D epartm ent store sales dur ing June for all but nine of the firms reporting to this bank w ere sm aller than in May. T his decline, although in contrast to the slight expansion which took place in June, 1923, conform s to the downward trend expected at this time, and is p art of the sum m er dullness regularly cul m inating in July. The June contraction this year, however, was more pro nounced than usual and, combined with the May decrease, resulted in sales for all but five stores com paring unfavor ably w ith June, 1923, and in the reduction thereby of the cumulative gain for the first six m onths of 1924 to 2.4 per cent. In comparison with sales two years ago the excess of 8 per cent for June is the smallest noted this year, and is a drop of over th irty points from the striking gain in Febru ary. Likewise, the gain over June, 1921, of 13 per cent is less m arked than the average for the earlier m onths. Collections during June slowed down to about the same extent as sales—a recession at variance, however, with the collection trend in 1922 and 1923 (the two years for which com parable data are available for thirty-seven stores). In both these years, collections fell off during February and March, m ounting again the next three months, to be fol lowed by a second drop and recovery the latter half of the year. A similar difference is reflected in the figures for out standing accounts. T hrough April, 1924, the m onthly changes resem bled those of 1922 and 1923, but on May 31, the drop of 0.1 per cent from the previous m onth was in contrast to the two preceding years, when the increases begun in M arch continued through June. A com parison of June collections with accounts outstanding May 31 indi cates a lower ratio this year than last, as has been the case for all m onths except February. As is usual during June, reporting stores w ith few ex ceptions reduced their stocks in preparation for July 1 inventory-taking, the aggregate decline for the district am ounting to 6.4 per cent, and representing on the basis of June sales three and one-half m o n th s’ stock of goods on hand. F or the first six months, the turnover rate has averaged 3.4 times a year. Chain Store Trade—All chain store system s reporting June sales to this bank registered reductions from May, and over half the firms showed declines also from a year ago. Total sales during the first six m onths of 1924 were in excess of the corresponding 1923 volume for all com modities except musical instrum ents, although on an aver age sales-per-store basis, only three individual increases were indicated. Mail Order Trade—June mail order trade according to a Chicago firm gave indication of a revival in buying, as evidenced by the steady and slightly increasing demand during the latter part of the m onth for m erchandise in all lines. Both of the two leading houses in Chicago reported larger sales for June than in the corresponding m onth for any of the three preceding years, while total sales for the first six m onths of 1924 were 5.5 per cent in excess of the first half of 1923, and over 401 per cent ahead of 1922 and 1921. TR A N SP O R T A T IO N In comparison with a year ago a decline of approxim ately $30,000,000 in the net operating income of the railroads was shown by the May, 1924, figure of $60,595,197. The ex tra ordinary expenditures in 1923 for rolling stock placed the railroads in a position to handle a much larger traffic vol ume than is now being placed before them . T his condi tion, combined with the current reduction in business activity, has so affected the carriers’ earning power that in May eighteen eastern and tw enty-tw o w estern roads oper ated at a loss, and the roads which were able to show a profit did so only by the exercise of extensive economies. T he average weekly volume of carloadings in June was slightly less than in May, owing principally to smaller shipm ents of m erchandise and miscellaneous freight, al though coal movements reversed the trend which they had evidenced since the first of the year and increased some what. The aggregate of loadings for the first six m onths of this year was approxim ately 800,000 cars behind the same period in 1923. The first eleven weeks of 1924 found the cumulative volume substantially increased over th at of a year ago, but this expansion was nullified by the extensive declines in the following six weeks; thereafter a constantly increasing spread between this year’s loadings and last took place. Page 11 August MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (In d ex n u m b e rs e x p re ss a co m p ariso n of u n it or d o llar volum e for th e m o n th in d ic a ted , u s in g th e m o n th ly a v e ra g e fo r 1919 as a base, u n le s s o th e r w ise in d ic a ted . W h ere fig u res for la te s t m o n th show n a re p a rtly e stim ate d on b a sis of re tu rn s received to d a te , re v isio n s w ill be g iven th e follow ing m o n th . D a ta re fe r to th e S ev en th F e d e ra l R eserve d is tric t u n le ss o th e rw ise n oted.) No. of June Firm s 1924 Meat Packing— (U. S.)— 89.1 Sales (in dollars)1 .............. 64 May 1924 June 1923 May 1923 89.2 87.8 91.9 Casting Foundries— Shipments (in d ollars)....... 29 80.6 93.4 111.6 114.5 Stoves and Furnaces— Shipments (in dollars)....... 19 84.3 90.6 103.1 99.7 108.6 107.1 108.5 112.8 125.0 114.7 130.3 108.7 127.1 129.8 118.3 128.1 85.2 95.6 95.8 114.4 114.4 134.3 127.8 149.8 119.3 122.4 127.9 133.5 152.2 158.7 160.8 160.2 97.3 90.7 86.9 81.0 119.2 159.4 103.0 96.4 84.3 100.2 132.0 145.1 89.2 89.7 114.5 162.4 135.7 214.7 88.9 95.3 114.6 169.2 138.0 179.3 120.6 112.7 124.3 115.2 126.4 125.8 128.8 126.1 Agricultural Machinery & Equipment—(U. S .)2 — Domestic Sales (in dollars) 130 E xports (in dollars)............. 130 T otal Sales (in dollars)....... 130 Furniture3 — O rders (in dollars)............... 23 Shipments (in dollars)....... 23 Shoes4 — Production (in pairs)......... 36 Shipments (in p airs)........... 36 Freight Carloadings— (U . S . ) Grain and Grain Products.... Live Stock .............................. Coal .......................................... Coke ....................................... F orest Products ................... O re ............................................ M erchandise and Miscellaneous ................... T otal ....................................... Iro n and Steel— Pig Iro n P roduction:5 Illinois and Indiana......... U nited States ................... Steel Ingot Production— (U. S.)5..... ........................ Unfilled O rders U. S. Steel Corp.................................... Automobiles— (U. S.)— Production: Passenger Cars .................. T rucks ......... ........................ Shipments:® Carloads .............................. Driveaways ....................... Boat7 .................................... Sales (7th D istrict)— New Automobiles ........... New Automobile Trucks.. P arts and Accessories..... Stam p T ax Collections8 — Sales or T ransfers of Cap ital Stock ........................... Sales of Produce on Exchange—F utures ......... E lectric E nergy— O utput of P lants (K W H ).... Industrial Sales (K W H )— 81.6 80.6 155.7 146.3 157.1 148.9 73.0 86.3 127.9 137.8 54.4 60.5 106.5 116.5 157.7 202.3 104.6 125.0 244.0 154.5 253.4 163.9 124.2 64.1 215.2 169.7 83.5 245.8 192.5 150.6 397.8 217.0 158.9 377.7 140.7 69.3 51.3 195.6 93.6 116.4 192.6 97.5 87.8 210.0 99.2 101.6 117.5 224.5 25.0 10 10 107.0 100.7 30.1 68.2 77.5 140.7 161.3 150.4 167.1 142.3 168.7 145.5 164.1 98.2 85.8 No. of June F irm s 1924 Wholesale Trade— N et Sales (in dollars): Groceries ....... .................... H ardw are ........................... Shoes ............. ,.............. ...... D rugs .................................. D ry Goods ......................... 40 81.8 21 100.5 7 34.5 14 92.1 13 71.3 Retail Trade (Department Stores)— N et Sales (in dollars): Chicago ...... 9 4 D etroit ... .............. Des Moines ....................... 3 Indianapolis ........................ 4 Milwaukee .......................... 5 Outside ................................ 40 Seventh D istrict ............. 65 Retail Trade— (U. S .)— D epartm ent Stores ......... 333 Mail O rder H ouses........... 4 Chain Stores: Grocery ...... 29 D rug ....................... 10 Shoe .................................. 6 5 Five and Ten Cent....... 4 Music ............................... Candy ............................... 4 Cigar .................................. 3 U. S. Primary Markets9 Grain Receipts: O ats ......................... ......... Corn ................ ................ W heat ........................... ,.. Grain Shipm ents: O ats .......... ...................... Corn ..................... ............. W heat .............................. Flour Production— (In b arrels)............. ........... Building Construction— Contracts Awarded (in d o lla rs): Residential ..................... . Total Perm its: Chicago .......... ....N um ber C o s t..... Indianapolis ........Number C o s t..... Des Moines.... ....N um ber C o s t..... D etroit ........... . .... N um ber C o s t..... Milwaukee .... ....Num ber C o s t..... O thers (45).........N umber C o s t..... Fifty Cities...........Num ber C o s t..... May 1924 June 1923 May 1923 72.9 91.6 75.8 108.0 123.7 128.1 60.1 41.7 72.7 97.2 101.6 102.5 86.0 71.8 80.6 130.7 133.6 144.2 135.3 136.8 147.0 144.0 141.5 104.3 109.0 128.4 118.3 134.3 143.0 152.1 150.2 137.6 149.3 153.3 154.6 96.0 109.5 112.9 116.3 124.4 134.7 138.1 137.0 120 89 126 90 127 86 128 98 196 143 146 162 75 176 131 212 150 150 174 82 189 143 183 149 144 154 97 176 136 189 142 143 154 100 170 137 69.5 115.8 54.0 71.3 106.7 51.1 74.4 97.5 58.2 67.7 72.3 55.8 69.9 96.8 46.3 80.2 116.6 52.9 78.5 75.9 52.8 81.4 102.8 64.2 102.4 94.7 71.5 80.5 164.9 141.6 192.9 123.7 144.8 151.0 168.8 127.8 274.3 394.9 255.9 164.6 236.3 142.8 194.9 205.2 211.0 174.0 219.0 149.6 218.8 244.6 325.9 376.1 282.4 184.4 271.6 156.5 268.9 242.8 234.6 216.8 283.6 210.5 272.3 270.3 220.9 203.7 224.8 178.7 224.5 155.8 202.4 140.7 231.6 169.5 233.2 225.4 223.9 189.8 271.4 370.8 291.3 263.8 284.3 237.2 247.7 187.6 265.9 242.1 308.0 210.4 280.3 260.8 1. M o n th ly a v e ra g e 1920-1921 = 100 ; 2. M o n th ly a v e ra g e 1923=100 ; 3. M o n th ly a v e ra g e 1919-1920-1921=100. 4. M o n th ly a v e ra g e of m e a n of p ro d u c tio n an d sh ip m e n ts in 1919=100; 5. A v erag e d aily p ro d u c tio n ; 6. M onthy average 1920=100; 7. Base figures (1920) p a rtly e stim ate d ; 8. F ir s t Illin o is in te rn a l re v e n u e d is tric t; 9. M o n th ly a v e ra g e re c eip ts 1919=100. Page 12 August
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