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B usiness C onditions R eserve D is t r ic t S ev en th FEDERAL M O N T H L Y R E V IE W P U B L I S H E D B Y T H E F E D E R A L RE SER VE B A N K OF CHICAGO Volume 14, No. 1 General Summary CTIVITY in most phases of Seventh district industry and trade trended downward during November— seasonally to some extent—and comparisons with a year ago remained unfavorable. Conditions in the steel indus try were practically unchanged from a month previous, while shipments and production of steel and malleable cast ing foundries declined as is usual for the month. Automo bile output reached a new low level. Shipments of furniture manufacturers declined somewhat more than seasonally, and orders booked were smaller. The building industry continued quiet, and there was little demand for building materials. Food producing industries for the most part showed recessions: production at meat packing plants de clined from October, contrary to the usual trend, and sales were less, as were production and sales of dairy products; however, the volume of butter and cheese distributed ex ceeded that of a year ago. Employment data reflected the general downward trend in industry. Department store sales declined in November, largely af fected by the fewer trading days in the month, and chain store trade was less. Wholesale distribution of commodi ties such as groceries, hardware, dry goods, drugs, shoes, and electrical supplies, fell off by more than the usual sea sonal amount in most lines. Sales of automobiles were very light. A survey of the live stock situation in the district indi cated a smaller autumn crop of pigs than in 1929. The supply of hogs for winter and spring marketing was less than a year ago, as were the number of beef cattle, lambs, and dairy herds on farms. The November grain move ment in general was small. Secured and commercial loans of reporting member A FEDERAL RESERVE BANK OF CHICAGO, SELECTED IT E M S OF CONDITION (A m ounts in millions of dollars) D e c . 10 1930 T o tal Bills and Securities...................................... $132.3 22.4 Bills D iscounted ....................................................... Bills B ought............................................................... 27.3 U. S. G overnm ent S ecurities................................ 82.6 T o tal R eserves.......................................................... 395.9 T o tal D eposits.......................................................... 347.1 Federal Reserve N otes in C ircu latio n ............... 141.9 R atio of T otal Reserves to D eposit and Federal Reserve N ote Liabilities C om bined........... ♦N um ber of Points. 8 0.9% C h a n g e F rom N o v . 12 D e c . 11 1929 1930 $ - 7 6 .5 $ + 1 3 .9 + 6 .5 - 9 7 .0 + 5 .9 - 8.5 + 1.5 + 3 0 .5 - 2 9 .2 - 8 6 .4 - 7 .5 + 5 .2 - 1 .8 - 1 6 9 .3 - 4 .4 * + 7 .1 * December 31, 1930 banks declined between the middle of November and De cember 10, while investments increased; deposits declined, though heavier than a year ago. Borrowings from the Federal Reserve Bank have continued to increase slightly. Money rates remain easy at levels practically unchanged from a month ago. Credit Conditions and Money Rates Seasonally heavier demand for currency and a loss to the district of approximately 20 million dollars through inter-district settlements for commercial and financial transactions were influential factors making for increased borrowings at the Reserve bank by member banks, between November 12 and December 10. On the other hand, as shown by the accompanying analysis, local Treasury ex penditures exceeded receipts during that period by more than 25 millions, a change making for lessened borrowing at the Reserve bank, as were a gain in reserve bank float of nearly 9 millions and a drop of about 7 millions in member bank reserve balances. These changes and others of lesser importance, however, were smaller in the aggregate than those tending to increase member bank borrowing, with the result that loans to member banks on December 10 were about 6 million dollars in excess of the November 12 figure. FACTORS IN M EM BER BANK BORROW ING AT THE FEDERAL RESERVE BANK OF CHICAGO Changes between N ovem ber 12 and D ecem ber 10, 1930 (In millions of dollars) Changes m aking for increase in m em ber bank borrowing: 1. Increase in dem and for c u rre n c y .............................................. 30.07 2. Funds lost through inter-d istrict settlem ents for com m er cial and financia' tra n s a c tio n s ................................................... 19.32 3. Increase in non-m em ber clearing balances............................ 0.37 4. Sales of gold to in d u s try .............................................................. 0.06 T o ta l................................................................................................. Changes m aking for decrease in m em ber bank borrow ing: 1. Excess of local T reasu ry expenditures over receipts.......... 2. Increase in reserve bank flo a t................................................... 3. D ecrease in m em ber bank reserve balances.......................... 4. Increase in holdings of acceptances (local tra n sa c tio n s). . . 5. D ecrease in unexpended capital fu n d s .................................... 49.82 25.10 8.67 7.22 1.83 0.49 T o ta l.................................................................................................. Excess of changes m aking for increase in m em ber ban k borrowing: A bsorption of this excess: Increase in m em ber bank borrowings (discounts for m em ber b a n k s)........................................................... M em ber 43.31 6.51 6.51 B a n k C r e d it At the bottom of page 2 will be found a table depicting changes in the condition of reporting member banks in this district. From the middle of November until December Compiled December 26, 1930 10, it will be noted that loans on securities of reporting member banks declined as did “all other” (commercial) loans, while investments moved upward. Comparison of these items with the corresponding data a year ago reveals the same trend. Net demand and time deposits decreased from November 12, and both showed an increase over last year. Borrowings from the Reserve bank increased slight ly in the monthly comparison, but on December 10 were some 70 million dollars less than on December 11, 1929. Rate levels in Chicago are practically unchanged from those obtaining November 15. Six large down-town banks reported 3^2 to 5 ^ per cent as their prevailing rate on prime commercial loans during the week ended December 15, which is the same rate as that for the corresponding period in November; ten smaller banks, located for the most part in outlying sections of the city, showed a range of 3J4 to 5Y i per cent on the same type of loans, while for the corresponding period last month they reported 3 to 6 per cent. The average rate earned on loans and discounts by six down-town Chicago banks was 4.61 for the calendar month of November, as against 4.63 in October and 6.19 in November 1929. Practically no change from a month ago was reported in this item for Detroit, the average rate earned in November being 5.63, as compared with 5.64 in October and with 6.17 a year ago. Sales of commercial paper in the Middle West declined 33 per cent in November and were below any other month on record (January 1923), being 39 per cent under November 1929, and less than half the usual volume for this season of the year. Recessions were mainly due to the limited volume of this type of financing and in a lesser degree to some diminution in the demand from banks. Selling rates for November ranged from 2% and 3 per cent for low to 3% and 3^2 per cent for high, with the cus tomary charge 3 to 3% per cent. Commercial paper out standings in the Middle West were unusually small for the end of November, though on a level with a year ago. Sales remained light during the first half of December, but slightly exceeded those of the corresponding weeks of No vember. Demand tended to recede toward the end of the year, and there was some further reduction in supply, with borrowers showing the usual tendency to reduce indebted ness at this time. Rates remained unchanged from No vember. The local supply of bills in the Chicago open bill market ranged from light to moderate during the four weeks ended December 10, despite a marked expansion in volume over the preceding period. Receipts from Eastern mar kets were much smaller than from October 16 to Novem ber 12. Demand from both local and out-of-town banks was limited during the first half of the period but fair dur ing the last two weeks, with preference shown for 90-day maturities. Sales aggregated about one-fourth less than customary for this season of the year, largely because of CONDITION OF R EPORTING MEM BER BANKS, SEVENTH D ISTR IC T (Amounts in millions of dollars) D e c . 10 1930 T o tal Loans and In v estm en ts......................... . . $3,361 Loans on Securities............................................. 1,218 All O ther L o a n s .................................................. 1,280 Investm ents.......................................................... 863 the small supply of bills. Dealers’ holdings, however, ex ceeded those of any reporting date since June 25, 1930, though remaining less than a year ago. Rates continued steady, closing on December 10 at 1y% per cent for 30-day offerings to 2J6 per cent for those of 180 days. AVERAGE WEEKLY TR ANSACTIONS OF REPO R TIN G DEALERS IN THE CHICAGO BILL M ARKET N ovem ber 13 to D ecem ber 10, 1930 P e r C e n t C h a n g e in C o m pa r is o n w it h P e r io d fr o m O ct . 16 to N ov. 12 N ov. 14 to D e c . 11 Bills pu rc h a se d ......... Bills so ld ..................... H oldings*................... 1930 + 8 8 .0 —39.6 + 121.6 1929 —54.8 —49.0 -3 8 .0 ♦At end of period. Acceptance transactions of reporting accepting banks in the Seventh district showed a sharp contraction in No vember from the high level obtaining in October. Bills were accepted in only moderate amounts during the month, and there was a corresponding trend in the volume of pur chases, reflecting a small demand for funds despite the low rate of interest. November sales totaled less than in any other month since September 1929, mainly the result of the decreased supply of acceptances and partly owing to the banks’ policy in retaining a substantial portion of the bills for their own investment. Acceptance portfolios of reporting banks attained a new peak on November 29, to taling 187 per cent larger than a year ago and 27 per cent in excess of October 31. The liability for outstanding bills declined slightly and was about on a level with last year. The total value of bills accepted by reporting banks during the first half of December was one-fifth less than for the corresponding period of the preceding month, with financing by means of acceptances reduced for sugar, to bacco, earthenware, aluminum, coffee, tea, and cotton but increased for iron and steel, coal, wool, silk, and clocks, and in general unchanged for grain. TRAN SA CTIO N S IN BANK ERS’ ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BA NK S IN THE SEVENTH D ISTR IC T T o tal value of bills acc e p te d .. . P urchases........................................ S ales................................................. H oldings*........................................ L iability for outstandings*. . . . P e r C e n t C h a n g e in N o v em b er 1930 F rom N o v em b er 1 O c t o b e r 1930 -1 5 .2 - 3 2 .1 + 1 7 .3 -4 6 .3 -2 6 .7 - 4 8 .7 + 1 8 7 .0 + 2 6 .7 - 2 .5 -0 .6 *At end of m onth. Se c u r it y M arkets Inactivity and low prices prevailed in the Chicago bond market during November. As in the earlier months of the year, the light demand favored the highest grade issues, although short-term bonds of good quality were also given preference. Institutions of various kinds, including invest ment trusts, were the heaviest purchasers of bonds in No vember. The volume of new offerings for the month was unusually light, being with one exception the smallest for the year and lower than in November of most previous VOLUME OF PAYM ENT BY CHECK, SEVENTH D ISTR IC T (Amounts in millions of dollars) C h a n g e F rom N o v . 12 D e c . 11 1930 1929 $ -2 2 $ +52 -3 2 -6 2 -1 9 -1 0 3 +29 +217 C hicago...................................................... $3,175 D etroit, M ilwaukee, and Indianapolis 1,142 N o v . 1930 P er C en t of I n crease or D e c r e a s e F rom O c t . 1930 N o v . 1929 - 3 8 .8 - 2 0 .0 - 3 2 .6 - 1 4 .4 N e t D em and D eposits....................................... Tim e D eposits...................................................... 1,922 1,300 -1 5 -1 8 +47 +92 T o tal four larger cities.......................... $4,317 808 34 sm aller cen ters................................... - 1 8 .6 -1 3 .7 - 3 7 .3 Borrowings from Federal Reserve B a n k ___ 5 +2 -7 2 T otal 38 c en ters...................................... $5,125 -1 7 .8 - 3 5 .4 P age 2 - 3.4 years, though higher than the limited volume of Novem ber 1929. Reports indicate that bond houses are ap proaching the beginning of the new year with moderate in ventories. Prices on the Chicago Stock Exchange during the month fluctuated considerably; through the first two weeks in December, however, an almost uninterrupted downward trend prevailed. The average price of twenty leading stocks (*) by December 15 had dropped to $77.23, and at that point was the lowest in three years. * Chicago Jo u rn al of Commerce. Agricultural Products December 1 reports from county agricultural agents representing 300,870 farmers in 186 counties show the 1930 autumn crop of pigs in the Seventh Federal Reserve district as being 4 per cent smaller than in 1929; farrowings decreased 5 per cent, while the number of pigs saved per litter increased one per cent. The decline was rather general throughout the district with the exception of re porting counties in Wisconsin. The district supply of hogs available for winter and spring marketing was reported as Al/ 2 per cent under that of last December 1. Farmers have shown a hesitancy to maintain feeding operations at last year’s level, so that there likewise has been a reduction of 11^2 per cent in the number of beef cattle on farms and of 7y2 per cent in lamb flocks. Dairy herds also aggregated less than in 1929, the decrease of 1^2 per cent being the first decline in holdings of this class of live stock evidenced in this territory for a number of years, and definitely re flects the current feed situation and the low prices received for dairy products during recent months of 1930. Most of the corn in the Seventh district had been husked and cribbed by early December; the corn in cribs was reported as having satisfactory keeping qualities and as being in good condition. Growing grain has gone into the winter months in fair to good condition; the soil in many coun ties, however, has been rather dry for the best development of the plants. CROP PRODUCTION E stim ated b y th e U nited S tates B ureau of A gricultural Economics as of December 1 ( I n th o u s a n d s of b u sh els unless o th e rw ise specified) S e v e n t h D is t r ic t 1930 1929 C o rn ....................730,306 O a ts .................... 571,158 All W h e a t......... 69,718 Potatoes (white) 38,637 Tam e H ay*. . . . 16,726 Tobacco**........ 52,685 879,380 501,169 62,550 46,151 23,180 49,167 U n it e d S t a t es 1930 2,081,048 1,402,026 850,965 361.090 82,656 1,510,308 1929 2,614,132 1,228,369 809,176 359,048 100,893 1,524,677 1924-28 Av. 2,699,809 1,371,786 833,164 392,605 93,630 1,302,463 * In thousands of tons. ** In thousands of pounds. G r a in M a r k e t in g Wheat moved in smaller than average volume at interior primary markets during November, with receipts decreas ing more than shipments, partly owing to diversion of the bread grain to live-stock feeding. Requirements for this purpose in the 1930-31 season have been variously esti mated as between two and one-half and four and one-half times the amount of the previous season. Additional de mand during the month came from domestic millers, and although exports fell off sharply, there has been some re duction in the United States visible supply in recent weeks. December futures under the influence of declines abroad set a new low on November 10, but in the following week prices at Chicago reversed the trend of world markets on the strength of support buying and established a premium over Liverpool. Considerable liquidation was reflected in a reduction of 15 per cent in future contracts on the Chi cago Board of Trade, between November 3 when the larg est aggregate since February was recorded, and November 29 which was the low for the month. Cash prices also averaged lower than in October. The movement of corn and oats was likewise below the five-year average for November, although corn receipts and oats shipments exceeded the October 1930 figure. The volume of future contracts outstanding in corn de clined in the last half of the month to slightly below the end of October, but the average for November exceeded any previous month in 1930. December and March quo tations regained the losses registered in the first half of the month, but averaged lower than in October. Cash corn and oats also showed moderate recovery in the latter part of November. M ov em en t of L iv e S t o c k Cattle marketings were unusually small in volume for November and recorded the largest decline from last year and the 1925-29 average of any month thus far in 1930, having decreased more than a seasonal amount from Oc tober. The recessions were ascribed to a light movement from the ranges this season, a smaller number of animals in the corn belt feed lots than last autumn, a slow demand, and the withholding of cows for a better market or for breeding purposes because of the low prices prevailing dur ing the month. Hog receipts failed to show a normal ex pansion over October and were considerably less than in 1929, as prices were not conducive to early marketing and quotations for feed were sufficiently low to encourage longer feeding to secure a normal gain in weight. The movement of lambs again resumed a lead over 1929 during November and was at a high level for so late in the year, despite heavy marketing during earlier months of 1930. Reshipments to feed lots declined during the month, with the movement of cattle remaining less than a year ago and with that of lambs much greater than last November. M eat P a c k in g Production at slaughtering establishments in the United States declined 7 per cent in November rather than show ing the usual expansion over October; the volume aggre gated 13 per cent less than in November 1929, and repre sented the largest decrease in the year-to-year comparison of any month thus far in 1930. The recession from Oc tober was principally due to a limited supply of cattle avail able during the month, while a reduction in the marketing LIVE STOCK SLAUGHTER (In thousands) C attle Y ards in Seventh D istrict, N ovem ber 1 9 3 0 ........................... Federally Inspected Slaughter, U nited States Novem ber 1 9 3 0 ........................... O ctober 1 9 3 0 ................................ N ovem ber 1929 ......................... H ogs L am bs Sh e e p an d Calves 169 930 361 84 605 836 731 4,024 3,492 4,499 05 1,727 1,159 324 438 358 AVERAGE PRIC ES OF LIVE STOCK (Per hundred pounds a t Chicago) N ative Beef Steers (average). . . F a t Cows and H eifers.................. C alves................................................ H ogs (bulk of sales)...................... Y earling S heep............................... L am b s............................................... W e e k E n d ed M o n th o f D e c . 20 N ov. O ct. 1930 1930 1930 ___ $10.40 $10.55 $10.75 ___ 7.10 7.75 8.10 ___ 8.25 9.00 10.90 ___ 7.80 8.55 9.35 ----6.15 6.50 6.10 ___ 7.55 7.45 7.70 N ov. 1929 $12.60 8.40 13.70 9.15 9.70 12.40 P age 3 of live hogs and cattle accounted for most of the decline from last year. Payrolls at the end of November showed an increase of one per cent in number of employes over the preceding period, but working hours decreased 9l/ 2 per cent, and there was a corresponding decline of 8 per cent in the amount of wage payments. Domestic demand in November averaged slow for beef, lamb, veal, and fresh pork and was moderate for lard, smoked meat, and dry salt pork. The total value of sales billed to domestic and foreign customers was 14y2 per cent less during the month than in October and 19y 2 per cent under a year ago. The decline from October was due partly to the holiday con sumption of poultry and partly to weather conditions which were not conducive to a strong demand for meats; the low level of export trade continued to influence the recession from 1929, as did a small supply of products, lessened in come of the consuming public, and reduced prices. Quo tations for pork products and veal declined from October, while prices of beef and lamb held barely steady and those of mutton remained practically unchanged. United States inventories of packing-house products remained at a low level on December 1, although a moderate increase was recorded over the beginning of November; lard stocks were reduced. A moderate domestic demand for commodities from slaughtering establishments was reported early in December. Shipments for export remained in small volume during November and were confined largely to actual sales, inas much as domestic consumption in the United States was sufficient to absorb most of the current production and there was very little inducement to forward commodities to foreign countries on a consignment basis. The demand for lard was fair in the United Kingdom but slow on the Continent; the meat trade remained quiet. Most pur chases were made from stocks abroad or available for im mediate delivery; some lard, however, was reported as hav ing been purchased for shipment in December and Janu ary. Inventories of American products in European coun tries (including stocks in transit) were further reduced during the month. Prices of lard in the United Kingdom averaged on a parity with Chicago, but otherwise quota tions in Europe ruled under the United States basis. D a ir y P roducts Creamery butter production in the Seventh district de creased by 1 6 ^ per cent in November from October, a decline of only seasonal proportions, and the recession of 3 per cent from a year ago was about the same as evi denced in the preceding month. The sales tonnage was in substantial volume for the month and exceeded that of last November by 7 per cent, though decreasing 2 per cent from October. Statistics of the American Association of Creamery Butter Manufacturers indicate that production in the United States followed a trend similar to that in the Seventh district. Consumption of the commodity in the country as a whole appears to have remained somewhat above current manufacture, inasmuch as inventories of creamery butter in cold-storage warehouses and packing plants in the United States showed a further decrease of 22 million pounds on December 1. Stocks continued be low last year, but for the first time in two months slightly exceeded the 1925-29 average. Prices declined sharply and by the end of November had dropped to June levels. American cheese production in Wisconsin, as evidenced by receipts at primary markets in that state, declined P age 4 per cent during the four weeks ended November 29 from the preceding period but aggregated only 4y 2 per cent less than in the corresponding period of 1929. Reshipments from these centers exceeded current production by 3 mil lion pounds and were 9 per cent heavier than a year ago, though 9 per cent below those of October 6 to November 1. Storage holdings of cheese in the United States showed a further decline of 10 million pounds on December 1 and about equaled the volume of last year, but continued, by 4 million pounds, to exceed the five-year average. Prices trended downward during the month, closing at the lowest level since early August. Industrial Employment Conditions Industrial employment for reporting lines in this district declined in the aggregate and in almost all groups during November compared with the preceding month. Seasonal recessions in canning and most food producing lines except meat packing, in furniture and other wood products, brick, tile and cement, boot and shoe manufacturing, and wom en’s clothing contributed to the declines which in most groups were similar in extent to changes in the same period of 1929. The shrinkage in aggregate payrolls was much greater than in November 1929, and in all groups except food products exceeded the loss in number of employes, in dicating further reduction in working hours as an adjust ment to continued poor demand for manufactured prod ucts. The vehicles group recorded the only increase in number of men among the ten manufacturing groups, but their earnings were much lower than in October. In non manufacturing lines, some pre-holiday expansion took place in merchandising, and more men were employed in coal mining but with reduced payroll total; however, the four groups combined showed a loss from last month, as the utilities reported a slight contraction and construction employment and payrolls fell off more than seasonally. In three of the four states reporting the data, employ ment offices had a greater surplus of applicants than in October, reflecting further lay-offs in industry and the re lease of men from farm work, and in addition increased activity on the part of those unemployed to make connec tions before the beginning of severe winter weather. In Iowa the usual November demand for com huskers ab sorbed sufficient workers to reduce the ratio considerably. EM PLOYM ENT AND EA RN IN G S— SEVENTH FEDERAL RESERVE D ISTR IC T W eek I n d u s t r ia l G r o u p N o v e m b e r IS , 1930 of C h a n g e s F rom O c t o b e r 15 W age E a r n er s E a r n in g s (000 O m it t e d ) W age E arn E arn F ir m s ers in g s N o. No. % % % M etals and P roducts1........ V ehicles.................................. Textiles and P ro d u cts. . . . Food and P ro d u c ts............. Stone, Clay, and G lass.. . L um ber and P ro d u c ts. . . . Chemical P ro d u c ts............. L eather P ro d u c ts ................ R ubber Products’ ............... P aper and P rin tin g ............ 541 68 137 329 114 237 72 70 8 254 152,195 26,955 26,492 45,602 11,653 24,327 10,521 14,880 3,113 32,808 3,846 617 492 1,153 290 485 266 251 45 979 - 2 .9 + 1.1 -2 .9 - 4 .7 - 5 .5 -2 .6 - 0 .2 - 6 .5 - 7 .9 - 0 .5 - 8 .4 - 1 2 .2 - 9 .2 -3 .6 - 1 2 .7 - 8 .2 - 4 .3 - 1 4 .6 - 1 7 .6 - 1 .4 T otal M fg., 10 G ro u p s___ M erchandising*.................... Public U tilities.................... Coal M ining......................... C on stru ctio n ........................ T o tal Non-M fg., 4 G roups. 1,830 178 76 30 191 475 348,546 31,993 91,403 8,785 11,653 143,834 8,424 783 3,060 229 346 4,418 - 2 .8 + 2 .6 - 1 .5 + 1 .8 - 1 3 .3 - 1 .5 - 7 .6 + 0 .8 - 1 .8 -0 .7 -1 3 .0 - 2 .3 T otal, 14 G ro u p s................. 2,305 492,380 12,842 - 2 .4 - 5 .9 R eport in g ‘O ther th a n Vehicles. ’W isconsin only. ’Illinois and Wisconsin. REG ISTR A TIO N S PER 100 PO SIT IO N S AVAILABLE AT FREE EMPLOYM ENT OFFICES M ONTH I l l in o is I n d ia n a I ow a W isc o n sin 1930 N ovem ber..................... 280 O c to b er......................... 251 278 181 147 202 281 331 207 216 210 178 160 128 1929 N ov em b er.................... O ctober......................... 141 107 Manufacturing A u t o m o b il e P r o d u c t io n and D i s t r i b u t io n Automobile output in November dropped to a new low level, although the percentage reduction was smaller than usual for the month. Manufacturers in the United States produced 97,528 passenger cars, which number represents a decrease of 13 per cent from October. Last year the drop for the period was exceptionally heavy—47 per cent —while the eight-year average decline for the month is about 25 per cent. Truck output totaled 31,300, or 16 per cent under October. As compared with the corre sponding month of 1929, passenger car production was 42 per cent smaller and that of trucks 35 per cent less. Distribution of automobiles in the Middle West declined sharply as is usual between October and November, and comparisons with a year ago showed no betterment. Stocks of new cars in dealers’ hands remained very light, while those of used cars gained slightly for the second suc cessive month, though continuing to be smaller than a year ago. Deferred payment sales of twenty-seven dealers averaged 49 per cent of their total retail sales for the month, which compares with 48 per cent in October and 60 per cent for last November. Iron and Steel P roducts Conditions in the steel industry of the Chicago district showed little change in November from the preceding month. Railroad car orders, and rail and pipe line re leases were the principal stimulants to activity. Steel ingot production ranged between 40 and 45 per cent of capacity during the period, as compared with a rate of 70 to 75 per cent for November last year. Future buying of pig iron has been in substantial volume in recent weeks. No vember production of pig iron in the Illinois and Indiana district declined further in the daily average for November to the lowest point since that month in 1924. Prices of finished steel and of pig iron have been holding firm in this district during the past two months. Chicago scrap iron and steel prices have shown little change since the early part of November, but the market has been quiet. M IDW EST D IST R IB U T IO N OF AUTOM OBILES Changes in N ovem ber 1930 from Previous M onths P e r C e n t C h a n g e F rom O ctober 1930 N ew cars W holesale— N um ber S o ld ........... P i V alue.......................... R etail— N um ber S o ld ........... V alue.......................... On H and N ov. 29— N u m b e r..................... V alue......................... U sed cars N um ber S o ld ........... Salable on H an d — N u m b e r.................... V alue......................... N o v em b er 1929 - 4 6 .7 - 4 9 .3 - 4 5 .5 - 5 1 .1 25 25 24 24 - 2 6 .6 - 3 1 .7 - 5 3 .3 - 5 1 .9 50 50 49 49 - 3 .8 - 2 .7 - 4 7 .9 - 4 1 .0 50 50 49 49 + 0 .9 + 0 .5 - 2 8 .0 - 3 9 .2 Shoe M a n u f a c t u r in g , 50 50 50 T a n n in g , and H id e s Shoe manufacturing in the Seventh Federal Reserve dis trict during November was at the lowest level on record (January 1923), showing a recession of 25^2 per cent from October. Tanning and sales of leather fell off rather sharply from the preceding month and were less than in the corresponding period of 1929. Quotations weakened. Slightly greater activity than in October was displayed in the Chicago market for packer green hides, with the greater part of the trading taking place during the last week of November. Demand was exceptionally light for calf and kip skins during the month. Shipments of hides WHOLESALE AND RETAIL LU M BER TRADE O cto ber 1930 - 2 5 .5 F u r n it u r e Furniture production in the Seventh district fell off eight points during the month of November, reaching June levels of around 50 per cent of capacity, according to firms reporting to this bank. New orders declined further dur ing the month, totaling 16 per cent less than in October, which compares with a contraction of 24 per cent in the same comparison for 1929, and with slight increases in 1928 and 1927. Shipments receded 34 per cent, or some what more than seasonally following the small volume of new orders of the preceding month, and were slightly under total orders booked during November. Accordingly, in asmuch as cancellations fell off moderately, unfilled orders dropped only slightly from the low volume obtaining Oc tober 31, and amounted to 54 per cent of orders booked during the month, as compared with 48 per cent a month previous. Orders and shipments for the month were 44 and 51 per cent, respectively, under 1929 levels, while totals from the first of the year through November aggre gate 40 per cent below the corresponding 1929 volume. C o m pa n ies I n c l u d ed N o v em b er 1929 - 1 0 .8 The tonnage of new orders booked by reporting steel casting foundries in the Seventh district totaled slightly heavier in November than in October, but the aggregate value declined a little. Malleable casting foundries re corded gains in both tonnage and value. As is customary during November, shipments and production of steel and malleable castings declined from the preceding month. Comparisons with the corresponding month a year ago fail to show improvement, activity in steel castings averaging between 60 and 70 per cent under last November, and close to 60 per cent less for malleable castings except for new orders which totaled about 40 per cent smaller. New orders and shipments of stove and furnace manufacturers reporting to this bank were more than 50 and 40 per cent, respectively, below a month previous and between 30 and 40 per cent under the corresponding month last year; pro duction averaged 40 per cent less than in October and 25 per cent under a year ago. C la ss of T ra d e W h olesale T ra d e : Sales in D ollars............................... Sales in Board F e e t........................ A ccounts O u tstanding1 ............... R e ta il Trade: Sales in D ollars............................... Accounts O utstanding1................ O ct . 1930 N o v . 1929 N u m b er o f F ir m s or Y ards - 2 2 .0 - 2 0 .7 - 9 .5 -4 5 .3 - 3 8 .0 -3 5 .1 15 15 16 -2 8 .8 - 5 .3 - 3 1 .3 - 4 .8 202 192 R atio of accounts o u tstanding1 to dollar sales during m onth 49 49 49 N o v . 1930: P e r C e n t C h a n g e F rom W holesale T r a d e ................................. R etail T r a d e ........................................ lEnd of m onth. N o v . 1930 O c t . 1930 N o v . 1929 156.1 399.8 166.7 297.1 156.7 289.5 P age 5 and skins from Chicago aggregated less than in October, Prices declined. R a w W ool and F in is h e d W oolens Trading in the raw wool market since the middle of the year has been quiet for the most part, with demand spotty and purchases for immediate needs only. Prices during the period, while well under a year ago, remained fairly firm through July, August, and September; however, dur ing October and November prices weakened slightly in the half-blood, three-eighths, and quarter-blood qualities. Activity increased somewhat during September with fine wools in fair demand. Openings in various foreign mar kets throughout the past five months have shown irregular trends; in the recent London sales which opened the latter part of November, prices were par to 5 per cent lower on the best fine merinos, 7 to 10 per cent lower on fine cross breds, and 12 to 15 per cent lower on the coarse cross breds, as compared with the closing of the last series. Building Material, Construction Work Seasonal or slightly more than seasonal declines took place during November in the distribution of building ma terials, and a continuation of the very low level of activity, relative to the corresponding period of recent years, was indicated. Lumber sales at both retail and wholesale showed somewhat larger declines from last year than were reported for October in the same comparison. Restriction continued in the building industry; with continued uncer tainty regarding both demand and price changes, more over, retail lumber yards have shown little tendency to en large their stocks which have been maintained at lower levels than usual through most of the past year. Whole salers, who began a similar reduction about four months ago, reported stocks still in excess of a year ago. Collec tions of wholesale firms were fairly good as reflected in the ratio of accounts outstanding to dollar sales which was the same as a year previous. Retailers, however, reported out standings of four times their sales, which is greatly in ex cess of last year. Changes in prices indicated no definite trend. Cement and brick producers reported severe contraction in shipments, except in localities where prolonged good weather encouraged construction. Total shipments from cement mills in the Middle West declined 56 per cent in November from the preceding month. This decline was approximately twice as large as the reduction in produc tion ; hence, stocks at the end of the month expanded con siderably and totaled 60 per cent more than a year ago. B u i l d i n g C o n s t r u c t io n November building contracts awarded in the Seventh Federal Reserve district, totaling slightly more than 39 million dollars, were below all previous months this year, with the exception of February when a volume of approxi- mately 38 millions was reported. About one-fourth of the current total covered residential building which likewise was very low and under most previous months of 1930; the decline from October this year, however, was only onehalf that shown in the same comparison for 1929. BUILD IN G CONTRACTS AW ARDED* SEVENTH FEDERAL RESERVE D ISTR IC T F irst eleven m onths of 1930....................... Change from sam e period 1929............ C o m m o d ity E le c tric a l S u p p lie s ............ R a t io o f A ccts . O u t st a n d N e t Sales S tocks A c c ts . OUTSTAND. C o l l ec - 1 3 .7 - 3 0 .9 - 2 8 .6 - 1 6 .7 - 1 7 .5 - 5 .0 - 1 6 .1 - 2 8 .3 -1 2 .4 - 2 2 .9 - 1 0 .6 - 1 9 .9 - 2 5 .9 - 9 .2 - 1 8 .3 - 1 0 .7 - 2 8 .6 - 3 1 .7 - 1 6 .5 - 3 2 .6 102.9 259.3 392.2 156.2 425.9 - 3 8 .3 - 2 3 .1 - 2 9 .5 - 3 4 .9 173.3 P age 6 t io n s $39,443,460 -2 5 % -3 2 % $678,570,609 -3 8 % $10,693,691 -1 3 % -4 5 % $150,484,205 -6 0 % ♦D ata furnished by F. W . Dodge C orporation. Permits issued during November in 103 cities of the dis trict declined 34 per cent in number and 28 per cent in esti mated valuation from the preceding month, and were 48 and 59 per cent, respectively, below figures reported for November last year. The eleven reporting cities in Iowa showed an aggregate increase of 74 per cent over October and of 91 per cent over the November 1929 figure in esti mated cost of proposed work, representing the only group of cities in the five states of the district that differed from the general trend. Merchandising Greater than seasonal declines were recorded for No vember in reporting lines of wholesale trade. Grocery sales fell off 17 per cent from October, hardware 28 per cent, dry goods 22 per cent, drugs 1 6 ^ per cent, and shoes 26 per cent, against declines of 7, 15, 14, 9J4, and 19 per cent, respectively, in the seven-year average for the period. The recession of 12 per cent in electrical supply sales was smaller than for the same period of 1929, and the decline from the corresponding month a year ago was less for this line than in the same comparison for October but was more unfavorable in the other groups. For the year through November, grocery sales totaled 4 per cent smaller than in the eleven months of 1929, hardware 24 per cent, dry goods 29 per cent, drugs 12 per cent, shoes 34 per cent, and electrical supplies 2 6 per cent less. Ratios of accounts outstanding at the end of November to net sales during the month averaged higher than a month previous or a year ago, except for shoes with a slightly lower ratio than for last November. The smaller number of trading days in November checked the upward trend evidenced during recent months in Seventh district department store sales, the aggregate dollar volume sold by reporting firms declining 6 per cent D EPARTM ENT STORE TRADE IN NOVEMBER 1930 WHOLESALE TRADE IN NOVEMBER 1930 P er C e n t C hange F rom S a m e M o n th L a st Y ear R e s id e n t ia l C o n tr a c ts T otal C o n tr a c ts P e r io d L o c a lity P er C en t C ha nge N o v em b e r 1930 F rom N o v e m b e r 1929 P er C e n t C h a nge E lev en M onths 1930 FROM C o r r e s p o n d in g P e r io d 1929 N e t S a les S t o c k s E nd o f M o n th C hicago........ D e tro it......... Indianapolis. M ilw aukee. . O ther C ities. - 2 1 .6 -2 4 .3 -1 8 .9 - 1 8 .8 - 1 5 .9 -1 4 .4 - 2 2 .0 - 1 7 .8 - 3 .6 -1 2 .3 - 1 2 .4 -2 0 .3 -1 0 .8 - 8 .6 - 9 .6 7th D istric t. - 2 0 .9 - 1 5 .0 -1 3 .3 in g to N e t Sa l e s N e t Sales R a t io o f N o v . C ol l e c t io n s to ACCOUNTS O u t st a n d in g O ct . 31 1930 1929 33.0 35.2 41.4 34.9 40.5 41.5 35.5 38.3 36.2 39.3 furnishings at retail declined less than seasonally in No vember, the recession for reporting dealers and department stores being only 8 per cent, whereas the decline in the same comparison for 1927, 1928, and 1929 averaged 14 per cent. Department stores were responsible for the small decrease recorded, as sales by dealers were considerably less than in October and their installment sales fell off 23 per cent. Sales of dealers and department stores to taled 24 per cent below the volume of last November, while installment sales by dealers declined 32 per cent in the comparison. Declines from the preceding month and from a year ago of 5 and 10^4 per cent, respectively, were shown in ag gregate November sales of twenty-two chains reporting to this bank. With the number of units operated recording little change from October, average sales per store fell off in the same proportion as total sales, but the number of stores was per cent greater than a year ago, so that average sales per store declined 16 per cent in this com parison. Practically all reporting groups, which include groceries, drugs, five-and-ten-cent stores, shoes, furniture, cigars, musical instruments, and men’s and women’s cloth ing, experienced declines in the monthly and yearly com parisons. from October. Daily average sales, however, gained 4 per cent in the comparison. Of the larger cities, Detroit alone recorded an increase in total sales over the preceding month— 2 per cent; sales of Chicago stores declined 10 per cent in the aggregate, those of Indianapolis stores 1 per cent, Milwaukee 4 per cent, and stores in other cities showed a 7 per cent recession. Comparisons with the cor responding month of 1929 were more unfavorable than in October partly because of the one less trading day in No vember this year; total sales for reporting stores were 21 per cent smaller than last November, while daily average sales were 18 per cent less. A further slight increase in stocks took place between the end of October and the close of November, but inventories averaged about 15 per cent under those of a year ago. The rate of stock turnover for 1930 through November of 3.18 times compares with 3.49 for the eleven months of 1929. Sales of shoes by retail dealers and department stores in the district increased as is customary between October and November. The gain of 4 per cent, however, was not so large as usual for the period, that of the previous four years averaging almost 8 per cent. As compared with last November, sales totaled 12 per cent smaller and for the year through November were 11 per cent below the cor responding period of 1929. Sales of furniture and house MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index num bers express a com parison of u n it or dollar volume for th e m onth indicated, using the m onthly average for 1923-1924-1925 as a base, unless otherw ise indicated. W here figures for la test m onth shown are p a rtly estim ated on basis of re tu rn s received to date, revisions will be given the following m onth. D a ta refer to th e Seventh Federal Reserve D istrict unless otherw ise noted.) No. of Firm s M eat P a ck in g — (U . S .)— Sales (in d o llars)............................. ......... 64 C astin g F o u n d ries— Shipm ents: Steel— In D o llars....................... ......... 15 In T o n s ............................ ......... 15 M alleable— In D o llars.............. ......... 23 In T o n s .................. ......... 23 Stoves a nd F u rn a ces— Shipm ents (in d o lla rs)................... ......... 11 F u rn itu r e — O rders (in d o llars).......................... ......... 26 Shipm ents (in d o llars)................... ......... 26 F lou r— Production (in b b ls .)................................ 27 O u tp u t o f B u tter by C ream eries— P ro d u ctio n ........................................ ......... 72 S ales.................................................... ......... 74 W holesale T rade—N et Sales (in dollars): G roceries....................................... ......... 31 H a rd w are ...................................... ......... 14 D ry G oods.................................... ......... 9 D ru g s ............................................. ......... 14 S hoes.............................................. ......... 8 R etail T rade (D ep t. Stores)N et Sales (in d o lla rs): C hicago.......................................... ......... 30 D e tro it........................................... ......... 4 In d ian ap o lis................................. ......... 5 M ilw au k ee.................................... ......... 5 O ther C itie s .................................. ......... 51 Seventh D is tric t......................... ......... 95 A u to m o b ile P ro d u ctio n (U. S .)— Passenger C a rs ................................ T ru c k s ................................................ B u ild in g C o n str u c tio n — C ontracts Awarded (in d o llars): R esid en tial................................... T o ta l.............................................. Iron and S te e l— Pig Iron Production:* Illinois and In d ia n a ................... U nited S ta te s ............................... Steel Ingot Production— (U. S.)* Unfilled O rders U. S. Steel C orp. Nov. 1930 Oct. 1930 Sept. 1930 Aug. 1930 July 1930 June 1930 Nov. 1929 Oct. 1929 Sept. 1929 Aug. 1929 Ju ly 1929 June 1929 90 105 102 98 97 103 111 129 126 119 121 120 32 30 25 36 42 42 31 44 46 48 33 48 57 62 32 46 61 65 35 49 68 71 50 71 79 86 60 81 87 92 73 99 85 88 78 105 94 100 89 124 101 111 . 84 120 101 109 92 128 102 180 134 102 82 81 147 232 191 137 108 98 47 47 56 72 70 73 56 60 69 48 43 50 86 98 112 149 117 133 104 119 126 91 92 95 103 117 121 116 105 96 97 122 106 113 92 91 78 94 94 96 97 95 115 111 131 120 155 135 81 88 96 92 106 98 133 119 162 139 178 147 86 63 55 84 63 104 88 71 101 83 103 75 71 95 78 99 66 58 88 77 99 70 46 89 48 95 74 61 92 61 101 92 78 100 69 113 112 97 113 98 107 106 115 108 112 104 102 96 112 118 104 103 76 103 72 103 104 85 97 93 100 130 97 111 97 105 111 127 98 116 103 112 93 165 114 107 86 108 79 104 74 80 82 84 67 87 70 75 69 72 95 124 87 95 88 98 128 171 120 137 115 134 129 163 113 131 108 130 113 211 131 120 98 130 94 136 88 94 94 101 80 120 83 88 79 88 115 162 101 114 97 119 33 83 38 99 60 109 64 95 76 105 99 122 57 128 109 161 124 137 151 151 145 199 154 247 36 58 42 77 44 88 37 86 42 80 45 147 66 85 89 122 104 150 105 147 125 155 201 197 76 63 67 76 79 71 76 73 82 77 83 72 91 83 89 75 95 87 85 84 119 100 103 83 124 108 102 86 132 118 126 86 135 119 136 82 144 123 137 77 144 124 140 86 148 126 147 89 . *Average daily production. P age 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS (B y the Federal Reserve Board) OLUME of industrial production and factory employment decreased further in November, and wholesale commodity prices continued to decline. Distribution of commodities by department, stores increased less than is usual for November. V P rod u c t io n a n d E m p l o y m e n t In d e x n u m b e r of p ro d u c tio n of m a n u fa c tu re s an d m in e ra ls com bined, a d ju sted fo r seaso n al v a riatio n s (1923-25 a v erag e = 100). PER CIKT PERCENT In d e x n u m b e rs of fa c to ry em p lo y m en t a n d p ay rolls, w ith o u t a d ju stm e n t fo r seasonal v a ria tio n s (192325 average = 100). Industrial production declined about 4 per cent in November, according to the Federal Reserve Board’s seasonally adjusted index. Output of iron and steel de creased further, while the number of automobiles produced per working day con tinued at a low level. Daily average cotton consumption increased further by some what more than the usual seasonal amount, and activity at silk mills continued to increase, while wool consumption decreased by an amount substantially larger than is usual in November. Production at cement mills was reduced considerably, daily output at meat packing establishments increased less than the usual seasonal amount, and output of minerals declined. Factory employment and payrolls showed decreases in November, reflecting in part changes of a seasonal character. The number em ployed in the clothing and shoe industries decreased by more than the usual amount, while employment at silk mills showed an increase contrary to the ordinary seasonal movement. In the industries producing building materials including lumber, cement, and brick, declines in employment exceeded the usual seasonal proportions. In the automobile industry employment declined further but by an amount considerably smaller than is usual in November. Value of contracts awarded for residential building and for public works and utilities, as reported by the F. W. Dodge Corporation, declined in November and contracts for commercial and industrial building continued at the low levels of other recent months. In the first two weeks of December the daily average of total con tracts awarded was somewhat smaller than in November. According to the Decem ber crop report of the Department of Agriculture, output of corn in 1930 was 2,081 million bushels, about 500 million less than last year, and 600 million less than the five-year average, while the total wheat crop of 851 million bushels was about equal to the 1924-1928 average. The cotton crop of 14,243,000 bales was slightly smaller than in the two previous seasons. Total crop production was about 5 per cent smaller than a year ago. D is t r ib u t io n Freight carloadings decreased further in November by more than the ordinary sea sonal amount. Expansion of department store sales from October to November was smaller than usual, following a growth in October that was larger than usual. W h o le sa l e P rices The general level of wholesale commodity prices declined further in November, according to the Bureau of Labor Statistics, and there were additional price declines in the first half of December when several commodities, including silver and cotton, reached new low levels. From the end of October to the middle of December there were substantial decreases in prices of many other commodities, including corn, hogs, pork, hides, tin, and coffee, while prices of copper and rubber fluctuated widely, declining at the end of the period. B a n k C redit In d e x of U . S. B u re au of L a b o r S ta tistic s (1926 = 100 ). C ars of rev en u e freig h t loaded, as rep o rted b y the A m e ric a n R ailw ay A ssn. In d e x n u m b ers a d ju sted for seasonal v a ria tio n s (1923-25 a v erag e — 100). P age 8 Loans and investments of reporting member banks in leading cities declined by about $250,000,000 during the three-week period ending December 10, reflecting a further reduction of $69,000,000 in loans on securities, and a decline of $196,000,000 in all other loans, offset in part by a further small increase in investments. There was also a decline in time deposits, reflecting in large part withdrawal of Christmas funds. In the following week, December 10 to December 17, changes in the figures for reporting banks reflected in part the closing of a large reporting bank in New York City. This resulted in a decline in the reported assets and liabilities of New York City banks. Reserve bank credit outstanding increased by about $294,000,000 during the four weeks ending December 17, and there was also an addition of $30,000,000 to the country’s stock of gold. Discounts for member banks increased by $126,000,000, acceptance holdings of the reserve banks by $74,000,000, and their holdings of United States securities, including one-day Treasury certificates issued in connection with December 15 fiscal operations, by $96,000,000. The increase in reserve bank credit outstanding reflected a large growth in the demand for currency by the public and by banks, resulting in part from the currency requirements for the holiday trade, and in part from demand for cash from banks and from the public in regions where important bank failures occurred during the period. During November and the first two weeks of December money rates continued fairly steady at extremely low levels, with prime commercial paper at a range of 2^4 to 3 per cent and bankers’ acceptances at 1% per cent. In the third week of December there was a slight increase in rates for call and time loans on the New York Stock Exchange. The yields on high grade bonds increased during the latter part of the period.
@FedFRASER