The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Business Conditions Seventh FEDERAL Reserve District M. Stevens, Chairman of the Board and Federal Reserve Agent Cldeoed S. Young, Asst. Federal Reserve Agent Eugene George MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAGO Volume 17, No. 1 A. Asst. Federal Reserve Agent Harris G. Pett, Manager Division of Research and Statistics Pruch, December 31, 1933 . General Summary movement of wheat through primary markets remained steady through November, but the volume represented a LTHOUGH the slowing-down in industrial and low record for the month; the movement of oats con trade activity usual for November was evident in tinued below normal; while that of corn was in greater the month this year, the production and sale of com than average volume. Reports from agricultural agents modities in the Seventh district continued to exceed that indicate that the number of pork, beef, and dairy animals of a year ago despite counter-to-seasonal expansion re on farms in the district was almost as great on December corded last November in certain groups. 1 this year as last. Building activity furnished an important exception to As in November 1932, the wholesale distribution of the general declining trend this November, contracts commodities in the district showed smaller than usual awarded in the district attaining the heaviest volume so recessions in the month this year. Department store far this year. Other major manufacturing groups, howtrade, on the other hand, experienced a somewhat greater ever, such as steel and automobiles, registered a seasonal than seasonal decline from the preceding month, while reduction in output. Activity of casting foundries, of that in the retail furniture trade was about average. stove manufacturers, and at furniture factories was less, Chain store trade was smaller in the month, but the retail and shoe production showed a decline. The movement of shoe trade recorded a gain that equaled the average for building materials likewise was seasonally smaller. A the period. Distribution of automobiles, at wholesale somewhat greater recession than usual for November was and retail, followed the seasonal trend in production by recorded in industrial employment and payrolls. In most showing a sharp drop from the preceding month. As in phases mentioned, however, levels were well above those manufacturing phases, however, trade activity in report of November last year. ing groups continued to exceed that of a year ago. Industries producing foodstuffs recorded various trends To be noted in credit conditions is the slight gain be in November. Production at slaughtering establishments tween mid-November and December 13 in the volume of gained considerably more than seasonally, but sales of reserve bank credit extended in the district. Total loans meat-packing products dropped in dollar value, partly and investments of reporting member banks in the district owing to lower price levels prevailing in the period; both declined in the period, as did their demand deposits, with production and sales exceeded the year-ago volume. The time deposits recording a small increase. Commercial manufacture of butter declined as is usual for November; paper sales by dealers and new financing by means of distribution expanded, contrary to trend, but a small de bankers’ acceptances expanded in volume during Novem cline was registered in the item from last November. ber as compared with the preceding month and totaled Production and sales of Wisconsin cheese fell off in the larger than for last November. comparison with the preceding month and were smaller Credit Conditions and Money Rates than a year ago, though sales decreased to a much lesser extent than did manufacture of the commodity. The The amount of reserve bank credit in use in the A , K . e- r FEDERAL RESERVE BANK OFJCHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions of dollars) Change From Dec. 13 Nov. 15 Dec. 14 Total Bills and Securities........................................ Bills Discounted......................................................... Bills Bought................................................................. U. S. Government Securities................................. Total Reserves............................................................ Total Deposits............................................................ Federal Reserve Notes in Circulation................ Ratio of Total Reserves to Deposit and Federal Reserve Note Liabilities Combined............ *Number of Points. 1933 $456.6 6.3 13.0 437.3 943.8 557.5 768.6 71.1 1933 1932 $+11.8 *+172.3 +0.4 -11.9 +11.4 +9.1 0 +175.1 -5.4 +106.2 -19.1 +158.2 +24.8 +94.8 -0.7* -7.0* Seventh Federal Reserve district increased very slightly during the period November IS to December 13. Total credit extended by the Chicago Reserve bank, however, increased from $444,035,000 to $455,466,000 during the four weeks. Banking reserves were lessened by a net out flow of more than 16 millions to other districts in pay ment for commercial transactions, and by an increased local demand for currency totaling almost 25 million dollars. Partially offsetting these demands, the United States Treasury paid into this district through its various Down-town banks in Chicago reported a range of 3 to 5 per cent as the prevailing rate on customers’ commercial loans during the week ended December IS, unchanged from the corresponding weeks of November and October. The average rate earned on loans and discounts by Chi cago banks located in the down-town business area was 3.17 per cent during the calendar month of November, as against 3.30 per cent in October and 4.10 per cent in November 1932. The prevailing rate on customers’ com mercial loans in Detroit during the week ended December IS was 3)4 to 6 per cent, or the same as in the corre sponding week of November. Commercial paper sales of reporting dealers in the Middle West showed a counter-to-seasonal increase of 20 per cent in November over October and were at a level higher than for any month since July, and 88 per cent above a year ago but only one-third of the 1923-32 average for the month. With the country banks evidenc ing slightly more interest in these investments than in the preceding period and with a continuation of fair inquiry from local banks, demand was sufficiently strong to absorb a somewhat larger supply than a month previous at higher ■ rates than obtained in October. Selling rates for Novem ber, therefore, ranged from )4 and one per cent for prime short-term obligations to 1)4 and 2 per cent for those less well known or of longer maturity, with most trans actions taking place within a range of 1)4 to 1)4 per cent. Furthermore, the expansion in sales was reflected in outstandings of commercial paper in the Middle West, which were greater on November 29 than for any report ing date in two years and showed a less marked recession from the 1923-32 average than during earlier months of 1933. Under the influence of a contraction in borrowing in anticipation of preparing year-end statements and be cause demand became more localized, commercial paper sales for the first half of December declined 16)4 per cent from the corresponding weeks of November. Selling rates on December IS ranged from 1)4 to 1)4 per cent, with most paper moving at 1)4 per cent. Considerable expansion in receipts from Eastern mar kets during the period November IS to December 13 re sulted in some improvement in dealer operations in the Chicago bill market. Purchases locally were very small , and totaled slightly less than the low volume of the pre ceding period. Practically all offerings were quickly ab sorbed through a heavy demand from out-of-town banks, sales through that outlet being in the second largest volume this year and the heaviest since the period June 15 to July 12. This demand, however, together with a small movement to local banks and Eastern centers did not entirely equal the total supply, and as a consequence a negligible amount of holdings was accumulated in dealer portfolios on December 13. A range of per cent for 30-day offerings to % per cent for those of 180 days covered the selling rates quoted at the close of the period, quotations averaging slightly higher on the shorter term maturities than in the preceding four weeks. Following the recession in October, new financing by means of bankers’ acceptances in the Seventh district not only expanded in November but was larger than for any month since July this year and 6)4 per cent in excess of the 1923-32 average for the month. With a larger per centage of the new offerings being discounted at the originating banks and with a marked expansion in the buying of other banks’ bills, total purchases of this class ' of investments by accepting institutions in the district aggregated 37 per cent heavier than the 1923-32 Novem ber average and were 52 per cent greater than last Novem ber. On the other hand, sales were almost negligible; therefore, holdings of bankers’ acceptances by these in stitutions increased 4)4 per cent on November 29 over the end of October, despite the counteracting influence of a slight gain in the volume of maturities. The liability for. outstanding bills also was somewhat greater than a month earlier. In the first half of December, new financ ing by means of acceptance credits increased 30)4 per cent over the corresponding weeks of November. CONDITION OF LICENSED REPORTING MEMBER BANKS SEVENTH DISTRICT (Amounts in millions of dollars) Change From Dec. 14 Dec. 13 Nov. 15 1933 1932 1933 $-20 $+94 Total Loans and Investments........................ ... $1,495 396 -3 -37 Loans on Securities............................................ ... 443 -13 +31 All Other Loans................................................... ... 656 -4 +100 Investments.......................................................... ... VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT (Amounts in millions of dollars) Per Cent of Increase or Decrease From Nov. 1933 Oct. 1933 Nov. 1932 Chicago............................................................... ___ $1,942 -8.2 +23.1 Detroit, Milwaukee, and Indianapolis. . . .... 618 -9.5 +0.4 Net Demand Deposits...................................... . . . Time Deposits..................................................... . . . 1,225 461 -8 +4 +184 +5 Total four larger cities................................... ___ 33 smaller centers............................................ ___ !) rrowings fro m Federal Reserve Bank. .. .. . 0 0 0 disbursing agencies over 6 million dollars more than it collected, thus replenishing banking reserves to that ex tent. Member bank reserve balances and non-member deposits both registered declines. The accompanying tabulation presents in detail the changes in the uses and sources of Seventh district banking reserves. Changes Between November 15 and December 13 in Factors Affecting Use of Federal Reserve Bank Funds Seventh District (Amounts in thousands of dollars) Reserve bank credit extended........................................................................... +46 Commercial operations through inter-district settlements........................ —16,168 Treasury operations.............................................................................................. +6,067 Total Supply................................................................................................—10,055 Demand for currency............................................................................................ +24,778 Member bank reserve balances...........................................................................—23,380 Non-member deposits............................................................................................ —11,894 Unexpended capital funds................................................................................... +441 Total Demand...........................................................................................—10,055 Member Bank Credit A decrease from November IS of 20 million dollars in aggregate loans and investments of licensed reporting member banks in the Seventh district was recorded on December 13, more than half of which decline took place in “all other” (commercial) loans. Net demand deposits moved downward 8 millions between these dates, and time deposits increased by 4 millions. Total loans and investments on December 13 were 94 million dollars in excess of the aggregate on December 14, 1932, reflecting a gain of 100 millions in investments, a rise of more than 30 millions in “all other” (commercial) loans, and a de crease of 37 million dollars in loans on securities. Net demand and time deposits on December 13 were in greater volume than a year ago, the former by 184 mil lions and the latter by 5 millions. $2,560 394 -8.5 -7.2 +16.7 -6.3 Total 37 centers............................................... . . . . $2,954 -8.3 +13.0 TRANSACTIONS IN BANKERS’ ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Per Cent Change in Nov. 1933 From October 1933 November 1932 Total value of bills accepted................... +28.8 +0.4 Purchases (Including own bills discounted) +68.7 +51.8 Sales................................................................ -86.4 -88.0 Holdings*....................................................... +4.4 +38.8 Liability for outstandings*...................... +6.1 +3.1 *At end of month. Security Markets Through most of November the Chicago bond market continued dull and prices worked steadily downward. Toward the latter part of the month, however, rising prices were recorded in all classifications. Underwriting houses continued hesitant regarding the immediate out look, the volume of new issues during the month remain ing negligible. Foreign issues reached new high price levels for the year during the middle of November. Only minor fluctuations were apparent in prices on the Chicago Stock Exchange during November and the first half of Decem ber. The average price of twenty leading stocks* amounted to $26.81 on December 16, as compared with $26.34 on the corresponding date in November. •Chicago Journal of Commerce. Agricultural Products Reports regarding the supply of live stock in the Seventh district, received by this bank direct from agri cultural agents in 143 counties, indicate that the total number of animals on farms was very nearly as great on December 1 as a year ago. Despite Government pur chases during August and September, the number of hogs available for winter and spring marketing remained practically the same as last year, as a result of large pro duction last spring. The autumn crop of pigs in the dis trict was shown to be very little, if any, smaller than in the fall of 1932. An improvement over last year in the number of pigs saved per litter offset a reduction in the number of sows farrowing. The supply of beef cattle was not more than 5 per cent below a year ago; and dairy herds had increased approximately 3 per cent over 1932, but probably will be culled upon any favorable change in the market for the older animals. Crop conditions were fairly good on December 1. About 90 per cent of the corn crop was husked and cribbed on that date, and averaged good in quality, though total production was exceedingly small. Fall seedings of wheat and rye were generally in good shape for wintering, with some localities affected by a shortage of moisture. CROP PRODUCTION Estimated by the United States Bureau of Agricultural Economics as of December 1 (In thousands of bushels unless otherwise specified) Seventh District United States 1926-30 1933 1932 1933 1932 Average Corn............................. 824,006 1,078,160 2,330,237 2,906,873 2,511,991 Oats.............................. 304,487 530,029 722,485 1,246,658 1,189,693 All Wheat................... 46,291 50,308 527,413 744,076 861,168 Potatoes (white)___ 39,752 59,382 317,143 358,009 355,438 All Tame Hay*......... 13,149 14,210 65,852 70,268 72,678 Tobacco**.................. 17,335 36,624 1,396,174 1,022,558 1,411,697 *In thousands of tons. **In thousands of pounds. Grain Marketing Grain markets in November were characterized by somewhat greater stability than in any month since mid year, as reflected in the narrower range of price fluctua tions. Future quotations of wheat, corn, and oats averaged slightly higher than in the preceding month, despite a small net decline in wheat and oats between October 31 and November 29. Cash prices followed a similar trend, and all prices continued on a fairly stable level during the first half of December. During Novem ber the dollar price of gold was increased about 5)4 per cent, and continued unchanged through December 16. The movement of wheat at primary centers was well maintained in November, with a less-than-seasonal de cline in receipts and a counter-to-seasonal gain in ship ments as compared with October, the total volume, however, being the smallest for any November in our records. U. S. visible supplies were further reduced by about five million bushels, as against practically no change in the ten-year average. Preliminary figures indicated some increase in exports after the middle of November. No significant change from October occurred in the move ment of feed grains, as com continued to move in excess of the five-year average volume, while the quantity of oats was below average. Movement of Live Stock Cattle, calf, and lamb marketings in the United States decreased about as usual in November from October, but those of hogs increased more than seasonally. Though each class of live stock was received at public yards in considerably smaller volume than shown in the 1923-32 average for November, hog and cattle receipts were 15)4 per cent greater than a year ago. The movement to in spected slaughter (inclusive of animals that did not pass through public stock yards) differed from the trend of market receipts in that the number of hogs, lambs, and calves increased over the 10-year average and that of calves was in excess of last November; furthermore, the movement of cattle to inspected slaughter was only )4 per cent below seasonal levels. Reshipments to feed lots showed the usual decline from October and remained in much less than seasonal volume. However, those of cattle were 4)4 per cent greater than in the corresponding month of 1932. Meat Packing The volume of production at slaughtering establish ments in the United States expanded 15 per cent in November over the preceding month, in contrast to an average gain for the period of but 2)4 per cent, and was not only 17 per cent heavier than a year ago but 7)4 per cent greater than the 1923-32 November average. Payrolls continued to reflect a marked improvement over the corresponding month of 1932, and increased over October by 1)4 per cent in number of employes, 4)4 per cent in hours worked, and by 5 per cent in amount of wage payments. Distribution declined. The total value of sales billed to domestic and foreign customers dropped LIVE STOCK SLAUGHTER (In thousands) Lambs and Sheep Cattle YardB in Seventh District, November 1933......................... Federally Inspected Slaughter, United States November 1933........................ October 1933............................ . . November 1932......................... Hogs} 210 939 321 91 861 627 4,501 3,058 3,778 1,356 1,668 1,388 424 455 376 AVERAGE PRICES OF LIVE STOCK (Per hundred pounds at Chicago) ) Week Ended Months of Nov. Dec. 16 Oct. 1933 1933 1933 Native Beef Steers (average). .. $5.15 $5.15 $5.55 Fat Cows and Heifers.............. .. 3.95 4.05 4.25 Calves............................................ .. 4.65 4.80 6.00 Hogs (bulk of sales).................. .. 3.25 4.10 4.50 Yearling Sheep........................... .. 5.75 5.35 5.35 Lambs............................................ .. 7.05 6.65 6.70 Calves Nov. 1932 $6.25 4.55 4.50 3.35 4.15 5.45 Page 3 15}4 per cent from a month earlier, though aggregating 15)4 per cent above a year ago. Part of the recession from October, however, was due to a lowering of the general price level of packing-house commodities, which took place despite higher quotations for the majority of pork products. Although the heavy consumption of poultry during Thanksgiving week usually effects a de cline averaging 10 per cent in demand for packing-house products, the sales tonnage of those commodities dropped only 5 per cent this November from a month previous and, as a consequence, totaled 11)4 per cent in excess of a year ago and 8 per cent greater than the 1923-32 November average. December 1 inventories increased slightly more than the usual amount over the beginning of November to a level 154,164,000 pounds above the 1928-32 average for that date. Shipments for export remained in November at about the same volume as during October. Foreign demand for American lard continued to improve both in the United Kingdom and on the Continent, but the trade in meats was still confined principally to British purchases of hams for Christmas. Practically all sales were made from stocks already landed in foreign ports. Continental quo tations for American lard were about on a parity with Chicago, but British quotations for that commodity re mained at a discount; hams continued to command a slight premium in the United Kingdom. United States holdings of packing-house commodities in foreign coun tries (inclusive of stocks in transit) declined on December 1 from the beginning of November. Daisy Products Creamery butter production in the Seventh Federal Reserve district declined 14 per cent from the preceding month but was 3)4 per cent greater than a year ago and 5J4 per cent in excess of the 1923-32 seasonal average. Partly a reflection of United States Government buying for relief agencies, the sales tonnage expanded 3 per cent in October—contrary to the usual tendency—and was 9 per cent above the 10-year average for November; how ever, it aggregated 2 per cent less than in the correspond ing period of 1932. Though recording a seasonal recession in November from a month earlier, production of the commodity in the United States continued considerably above a year ago. Moreover, with consumption failing to show as great an excess over current production as is EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE Week c f November IS, 1933 Efff&lNDUSTRIAL GROUP Report Change From Oct. 15, 1933 Firms No. Wage Earners No. Earnings (000 Omitted) $ Wage Earn Earn ers ings Metals and Products1........ Vehicles.................................. Textiles and Products. . . . Food and Products............. Stone, Clay, and Glass___ Wood Products.................... Chemical Products............. Leather Products................ Rubber Products2............... Paper and Printing............. 817 187 152 410 151 282 121 82 8 333 162,477 164,706 32,630 78,972 8,326 27,039 17,234 19,455 6,984 51,606 2,964 3,510 495 1,551 149 374 366 308 135 1,085 -3.9 -9.2 -5.7 —3 4 -5.6 —4 1 -1.2 -6.8 -5.5 -1.4 Total Mfg., 10 Groups___ 2,543 569,429 10,937 -5.4 -6.1 Merchandising8................... Public Utilities..................... Coal Mining.......................... Construction......................... 281 80 20 330 41,503 81,185 3,794 11,354 762 2,300 71 235 +3.4 -0.0 +8.0 -4.6 + 1.1 +0.6 +2.2 +11.3 Total Non-Mfg., 4 Groups. 711 137,836 3,368 +0.8 +1.S Total, 14 Groups................. 3,254 707,265 14,305 -4.2 -4.5 ing % % —6 0 —7 6 — 14 9 —9 6 —8.2 —3 1 -2.0 1 Other than Vehicle,. ‘Michigan and Wisconsin. * Illinois and Wisconsin. Page 4 usual, inventories of creamery butter in the United States declined somewhat less than is customary on December 1 from the beginning of November, and the gain over the 1928-32 average was increased to 68,071,000 pounds. These figures, however, continue to include Government holdings as well as commercial stocks. The manufacture of American cheese in Wisconsin fell off approximately 40 per cent in the four weeks ended December 2 from the preceding period, a year ago, and the 1928-32 seasonal average. Distribution of the com modity from principal markets of that state, in declining only about 16 per cent in these comparisons, recorded double the usual excess over current production. With similar trends prevailing in the United States as a whole, total inventories of cheese in the country decreased more than seasonally on December 1 from the beginning of November and were only 11,945,000 pounds greater than the 1928-32 average for December 1. Prices advanced in November over a month previous. Industrial Employment Conditions Reports from Seventh district industries for the payroll period ending November 15 indicate that employment and payrolls, despite a greater than average seasonal decline from the preceding month, were approximately 20 and 22 per cent, respectively, above the corresponding volumes of a year ago. The expansion during the past year has been especially marked in industries that were most severely affected by the contraction during the preceding years. Thus, an employment index of 61 in the manu facturing industries for the current period denotes a rise of 24 per cent since last November, whereas the relatively high index of 81 for the non-manufacturing industries reflects an expansion of but 9 per cent in this comparison. Several industrial groups—rubber, lumber, and food prod ucts—reported payrolls that were more than one-third again as large as those of a year ago, and one—the metals group—showed an increase of over 50 per cent. Declines recorded for November in the comparison with the preceding month totaled 4 per cent in employment and 4)4 per cent in payrolls. The decreases were not con fined to certain industries as was the case in October, but affected practically every reporting manufacturing group. In two of the ten groups in this classification, the loss in employment amounted to less than 2 per cent; in seven groups, it ranged from 3)4 to 7 per cent; and in the tenth, the vehicles group, it aggregated 9 per cent. In payrolls, one group-chemicals—remained practically stationary, while the others showed decreases ranging from 2 per cent in paper and printing to 15 per cent in textiles. Non-manufacturing aggregates, on the other hand, showed increases in employment and payrolls of one and 1)4 per cent, respectively, thus continuing the upward movement which started last July in this classifi cation. A loss in employment within the construction industry was more than offset by increases in the mer chandising and coal-mining groups, and all groups re ported higher payroll amounts. Manufacturing __ Automobile Production and Distribution Further seasonal slowing-down took place during November in United States production of automobiles. Total output continued, however, to exceed that of the corresponding month of 1932, although some expansion took place in the month last year following the low level of activity reached in October. Production of passenger automobiles in November this year totaled 42,818 in number, a reduction of 60 per cent from the preceding month and 9^2 per cent under November 1932. Truck output numbered 19,475, or 36 per cent less than a month previous but 62 per cent in excess of a year ago. The latter gain together with a sharp increase in the number of taxicabs produced brought total output in the industry to a higher figure than for last November. Seasonal factors likewise were largely responsible for wholesale and retail distribution of automobiles in the Middle West showing a heavy drop from the preceding month, although sales remained considerably larger than in 1932. Stocks of new cars, for the second successive month, were reduced sharply, so that their number ag gregated about 30 per cent below that of a year ago at the end of November. Used car stocks, on the other hand, though slightly lower than a month previous, were almost half again as large as last year on the same date. Details of these changes may be noted in the table. Twenty-seven identical firms reporting deferred payment sales in both the monthly and yearly comparison, showed a ratio in the aggregate of their November sales to such sales of 41 per cent, as against 43 per cent in October and 51 per cent last year. Iron and Steel Products Steel production in the Chicago district held at a fairly even level through November, though under that of the preceding month, ingot output averaging between 26 and 27 per cent of capacity. In the first week of December it dropped to 24 per cent, but reacted to a rate of 26 per cent in the following week, and in the third week of the month rose to 40 per cent as a result of increased contract releases. Some forward contracting is now taking place, and mills are reported to anticipate further gains after the beginning of the year. In December last year de mand was at a minimum with few prospects of expan sion, and ingot output in the middle of the month had fallen to only 10 per cent of capacity. Average daily production of pig iron in Illinois and Indiana dropped almost 25 per cent in November from the preceding month. However, forward contracting in pig iron has been heavy in recent weeks. Scrap iron and steel prices have shown a slight strengthening since the end of November; quotations for finished steel at Chicago have remained unchanged. Seventh district foundries booked a heavier volume of orders in November, the rise over the preceding month amounting to 9 per cent in steel and 8 per cent in malle able foundries. Shipments followed the customary trend of the season with decreases of 11 and 7 per cent, respec tively, in the two types of foundries. While the production of steel castings was at a slightly lower rate than in October, that of malleable castings increased one per cent. Both operations and the volume of orders accepted showed a gain of considerably more than 100 per cent over November a year ago. In shipments, increases totaled 78 per cent for steel and 129 per cent for malleable cast ings. The manufacture of stoves and furnaces recorded a seasonal curtailment in November, orders falling off 33 per cent, shipments 12 per cent, and moulding-room operations 18 per cent from the preceding month. Com parisons with November a year ago show increases of 37, 56, and 7 per cent, respectively, in these items. Inven tories were slightly higher than a month earlier and ex ceeded those of a year ago by 63 per cent. Furniture A decline of 15 per cent from October took place in November orders booked by Seventh district furniture manufacturers reporting to this bank, and although ship ments were 25 per cent under the month-ago volume, both items showed gains over the November 1932 figures, that in orders amounting to 6 per cent and in ship ments to 16 per cent. Current shipments, despite their relatively sharp decline, were 34 per cent in excess of new orders booked so that the volume of unfilled orders outstanding was materially reduced during the month, and stood at the close of November at only 84 per cent of current orders as compared with a ratio of 103 per cent a month previous. The rate of November operations averaged 49 per cent of capacity, 9 points under that of October and 10 points above a year ago. Shoe Manufacturing, Tanning, and Hides Shoe production in the Seventh district registered a greater than seasonal decline in November, output for the month totaling 32 per cent less than in October. The volume produced was 16 per cent smaller than in the corresponding month of 1932, and 18 per cent below the 1923-32 average for the month. In the tanning industry, slight decreases were reported in the production and sales of leather, while prices remained at approximately the level of a month previous. Sales of packer green hides in the Chicago market showed a decline from the sub stantial volume reported for October, but prices were firmer, quotations on a large number of items rising onehalf cent about the third week in November. LUMBER AND BUILDING MATERIALS TRADE MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in November 1933 from Previous Months Per Cent Change From Oct. 1933 New Cars Wholesale— Number Sold............. Value........................... Retail— Number Sold............. Value........................... On Hand Nov. 29— Number...................... Value............................ Used Cars Number Sold............ Salable on Hand— Number...................... Value........................... Nov. 1932 Companies Included Oct. 1933 Nov. 1932 -32.8 -31.9 +52.7 +74.3 17 17 12 12 -22.6 -25.3 +147.0 +88.3 62 62 36 36 -45.6 -41.9 -29.6 -47.1 62 62 +68.0 62 36 -5.8 -3.1 +46.6 +17.8 62 62 36 36 Wholesale Lumber: Sales in Dollars............................... Sales in Board Feet........................ Accounts Outstanding1................. Retail Building Materials: Total Sales in Dollars.................... Lumber Sales in Dollars............... Lumber Sales in Board Feet.... Accounts Outstanding1.................. 36 36 -6.2 Nov. 1933: Per Cent Change From Oct. 1933 Class of Trade Wholesale Trade.................................. Retail Trade......................................... Nov. 1932 Number of Firms or Yards +2.0 +13.3 -2.5 +73.4 +88.3 +60.1 12 10 11 -21.0 +13.6 137 +21.2 -26.6 60 -22.5 +0.1 30 -4.7 -2.4 128 Ratio of Accounts Outstanding1 to dollar sales during month Nov. 1933 Oct. 1933 Nov. 1932 208.1 411.5 217.7 340.5 225.5 476.2 ‘End of month. Page 5 Building Materials, Construction Work Merchandising November operations in Seventh district building ma terials lines compared favorably with a year ago, though registering seasonal declines from October. Wholesale lumber sales furnished an exception to the downward trend, for although their dollar value was only slightly higher, the board-foot volume increased 13 per cent over the preceding month, probably owing to demand for ma terials on civil works projects. In November 1932, de clines from October amounting to 15 per cent in dollars and 18 per cent in board feet were recorded in sales, which accounts for the sharp improvement shown this Novem ber in the yearly comparison. Sales of retail yards were seasonally lower than in October, both for lumber and for the aggregate of all materials, but were considerably higher than a year ago. Midwest cement operations suffered the usual decline from October, but shipments equaled those of a year ago for the first month in nearly three years. Stocks were higher than in the preceding month, as production ex ceeded shipments. Federal projects were practically the only sustaining factor in demand. Prices of all materials remained firm, with some further upward tendency. Building Construction Building activity in the Seventh Federal Reserve dis trict continued to expand during November. Total con tracts awarded amounted to over 23 millions, the highest volume recorded this year, and represented the third consecutive monthly increase and the second over a year ago. Residential contracts, amounting to only 6 per cent of the total, declined to the lowest volume since February. BUILDING CONTRACTS AWARDED* SEVENTH FEDERAL RESERVE DISTRICT Total Contracts Period Residential Contracts $23,254,818 +10% +73% $147,677,208 Change from same period 1932............ —25% ♦Data furnished by F. W. Dodge Corporation. $1,355,425 -9% +1% $20,468,152 -15% Proposed construction, as reflected by the estimated cost of building permits issued in 101 cities of the Seventh district, declined 58 per cent during November from a month previous and was 20 per cent below a year ago. The number of permits issued during the period, though gaining 7 per cent over the corresponding month last year, fell 40 per cent below October. Among the larger cities of the district, Chicago, Detroit, and Des Moines provided an exception to the trend of estimated cost in the yearly comparison, each recording a gain. Des Moines also reported a small gain in the monthly com parison. The declines recorded during November from the pre ceding month for reporting lines of wholesale trade in the Seventh district were less than seasonal, and an in crease of 3 per cent in the electrical supply trade was counter to trend for the period. Grocery sales declined 3 per cent in the month, hardware &/2 per cent, dry goods 12 per cent, and drugs 8 per cent, as against recessions in die 1923-32 November average of 8, 17, 14, and 10 per cent, respectively. The gains of 27 per cent in hard ware and of 37 per cent in electrical supplies over the same month of 1932 were substantially larger than in the yearly comparison for either September or October; but in the other groups, trends in this comparison were less favorable than a month previous. For 1933 through November, sales in the wholesale hardware and dry goods trades totaled one per cent heavier than in the eleven months of 1932 and in electrical supplies were 8 per cent larger, while groceries showed a 5 per cent decline and drugs one of 11 per cent for the cumulative period. A somewhat greater than seasonal recession was re- ' corded for November in Seventh district department store trade, sales declining 7 per cent in the aggregate, as against a decrease of only 2 per cent in the 1923-32 av erage for the month. Of the larger cities, Indianapolis showed the heaviest decline from the preceding month15 per cent—and Detroit with less than one per cent, the smallest, trade at Chicago stores falling off 10 per cent and in Milwaukee 7 per cent. Stores in smaller cities had sales totaling about the same as a month previous. The accompanying table shows that, as in October, Detroit alone had smaller sales than in the corresponding ’ month of 1932, though with the exception of the total for stores in smaller cities, gains were less than shown a month previous in the yearly comparison. Following in creases in each month this year since January, stocks recorded a slight decline between October 31 and the end of November. For the third successive month, stock turnover was a little less than a year ago in the same month. The retail shoe trade in November, as shown by the reports of both dealers and department stores, increased . 2 per cent over the preceding month, or the same as in the 1925-32 average for the month. In the comparison with the corresponding month a year ago, sales were fractionally larger, and in the eleven months of 1933 ag gregated 4y2 per cent smaller than in the same period of 1932. Stocks, which declined 2J4 per cent in the month, were 8 per cent heavier than at the end of Novem ber last year. DEPARTMENT STORE TRADE IN NOVEMBER 1933 WHOLESALE TRADE IN NOVEMBER 1933 Per Cent Change From Same Month Last Year Commodity Net Sales Groceries............... Hardware............. Dry Goods............ Drugs.................... Electrical Supplies............ Stocks Accts. OUTSTAND. Collec tions Ratio of Accts. OutstandING TO Net Sales Locality -1.2 +26.7 +1.0 +2.6 +9.9 -6.1 +3.9 -9.9 -7.8 -0.6 -1.5 -5.1 +0.9 +17.7 +15.6 -7.6 119.7 250.0 310.4 245.6 +37.0 +3.0 +3.4 +27.0 185.8 7th District. Per Cent Change Ratio of Nov. Col Eleven Months lections to 1933 From Same Period Accounts Outstanding 1932 End of Oct. Net Sales Chicago........ Detroit......... Indianapolis. Milwaukee.. Other Cities. Page 6 Per Cent Change November 1933 From November 1932 Stocks End of Month Net Sales 1933 1932 +9.4 -2.8 +2.5 +3.7 +12.1 +27.2 -5.8 +27.1 +26.3 +4.1 +3.7 -16.4 -2.7 -5.4 -4.5 30.6 36.6 39.8 33.5 30.0 24.4 30.4 38.7 32.4 28.0 +6.2 +17.4 -3.3 33.3 29.3 Fourteen chains operating 2,550 stores in November had sales totaling 4 per cent smaller than in October, most groups sharing in the decline. In the comparison with November last year, aggregate sales increased 7 per cent and average sales per store 9 per cent, with the number of units operated 2 per cent less than at that time. Groups showing gains in the yearly comparison included five-and-ten-cent stores, groceries, drugs, men’s clothing, shoes, and musical instruments, cigars recording a decline. Sales of furniture and house furnishings by reporting dealers and department stores declined seasonally in November, falling 14 per cent below those of the pre ceding month; they exceeded those of November last year by 9 per cent or to a slightly lesser extent than in the corresponding comparison for October. An increase of less than one per cent was shown in stocks on hand at the end of the month, but they were 18 per cent above those held at the close of November 1932. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the months indicated, using the monthly average for 1923-1924-1925 as a base, unless otherwise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following month. Data refer to the Seventh Federal Reserve district unless otherwise noted.) No. of Firms Nov. 1933 Oct. 1933 Sept. 1933 Aug. 1933 July 1933 June 1933 Nov. 1932 Oct. 1932 Sept. 1932 Aug. 1932 July 1932 June 1932 62 56 67 62 58 60 56 49 58 57 53 52 50 21 22 23 37 23 25 25 39 19 19 24 38 21 23 24 41 21 25 21 36 18 19 21 37 11 11 10 16 11 10 9 16 12 12 8 14 11 10 8 13 10 9 7 12 12 11 11 19 in 128 108 91 63 58 70 100 80 46 29 39 20 28 24 37 40 45 46 42 61 29 30 27 19 24 29 32 31 30 25 22 22 13 14 15 109 107 93 93 98 121 112 119 118 130 114 120 93 92 99 96 122 116 123 106 139 132 77 97 92 87 92 89 111 102 118 106 141 130 Meat Packing—(U. S.)— Sales (in dollars).................................... Casting Foundries— Shipments: In Tons................................... 13 Malleable—In Dollars..................... 21 In Tons......................... 21 Stoves and Furnaces— Shipments (in dollars).......................... 10 Furniture— Orders (in dollars)................................. 17 Shipments (in dollars).......................... 17 Flour— Production (in bbls.)............................ 22 Output of Butter by Creameries— Sales........................................................... Wholesale Trade— Net Sales (in dollars): 69 80 95 Drugs.................................................... Retail Trade (Dept. Stores)— Net Sales (in dollars): 13 63 45 33 57 65 50 37 61 70 49 39 61 68 47 34 61 67 46 44 52 71 60 39 58 64 36 32 56 65 43 35 58 70 42 38 61 65 36 28 59 59 35 22 52 71 54 29 66 66 67 68 77 64 67 74 67 80 83 64 72 69 87 80 73 59 72 64 57 65 65 56 62 47 41 48 52 40 45 66 66 63 63 57 64 61 70 66 74 57 64 66 73 77 78 60 68 61 87 76 66 56 66 45 54 50 53 46 48 39 51 44 48 38 42 59 78 67 67 56 63 15 52 37 81 55 93 67 110 67 101 72 in 16 32 12 36 22 52 26 38 32 38 55 60 5 34 5 31 12 29 7 22 9 27 8 19 5 20 7 17 7 32 7 32 7 24 10 27 34 37 45 45 45 61 42 52 67 52 60 81 59 59 96 45 43 75 19 21 30 20 21 31 20 20 29 22 17 24 26 19 24 29 21 26 Seventh District................................ 82 Automobile Production—(U. S.)— Trucks....................................................... Building Construction— Contracts Awarded (in dollars): Iron and Steel— Pig Iron Production:* Steel Ingot Production—(U. S.)*... ♦Average daily production. Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS INDUSTRIAL PRODUCTION (By the Federal Reserve Board) ' | ' OTAL volume of industrial production, after declining further during October, A showed little change during November and the first half of December. The amount of construction undertaken continued to increase, reflecting an expansion of public works. Production Index number of industrial production, adjusted for seasonal variation (1923-1925 average = 100). ■ F \CTORY E UPLOYME NT T Federal Reserve Board’s index of factory employ ment, with adjustment for seasonal variation (1923 1925 average = 100). and Employment Output of basic commodities, as measured by the Federal Reserve Board’s sea sonally adjusted index, was 73 for November, on the basis of the 1923-1925 average as 100, compared with 77 for October. This total for the month reflects the maintenance during November, with allowance for usual seasonal changes, of the level reached at the end of October after a continuous decline during the preceding three months. Activity at steel mills, after declining from 44 per cent of capacity in the early part of October to 25 per cent in the early part of November, sub sequently increased to a rate of 34 per cent in the third week of December. Output of automobiles, which was curtailed sharply in November in preparation for new models, also increased somewhat in the early part of December. Consumption of cotton by domestic mills was in somewhat smaller volume in November than in the preceding month, and activity at woolen mills decreased. At shoe factories, production showed a decline larger than is usual at this season. Volume of factory employment and payrolls declined from the middle of October to the middle of November by somewhat more than the usual seasonal amount. The Board’s seasonally adjusted index of factory employment for November was 72, as compared with 74 in October and 57 at the low point in March. Value of construction contracts awarded, as reported by the F. W. Dodge Cor poration, showed a further substantial increase in November. This increase, at a season when construction contracts usually decline, reflects a growth in the volume of public works. Distribution Shipments of commodities by rail decreased in November as compared with October by an amount somewhat smaller than is usual at this season. Sales of merchandise at department stores declined, contrary to seasonal tendency, while sales by variety stores showed little change. CON5TRL CTION CC NTRACTS AWARDED iw 120 Wholesale Prices too r V 80 60 HO >lTot<al Wholesale commodity prices, as measured by the weekly index of the Bureau of Labor Statistics, advanced from 70.9 per cent of the 1926 average in the first week of November to 71.7 per cent in the third week, and then declined to 70.9 per cent in the week ending December 9. These movements reflected chiefly changes in the prices of farm products and foods. Prices of hogs declined considerably after the middle of November, owing partly to seasonal factors. VV\ -V \ 20 0 - 1920 Indexes based on three-month moving averages of F. W. Dodge data for 37 Eastern states, adjusted for seasonal variation (1923-1925 average = 100). Foreign Exchange The value of the dollar in the foreign exchange market advanced from a low point of 59 per cent of its gold parity on November 16 to about 64 per cent for the period from November 27 to December 20. Bank Credit WHOLESALE PRICE 5 no too <50 60 70 60 — arm Product Foods Other Commodities s —^ "XT’ 50 — r Jr_ » i 40 SO Indexes of the United States Bureau of Labor Sta tistics (1926 = 100). Page 8 Between November 15 and December 20, there was the usual seasonal increase, about $195,000,000, in the demand for currency by the public. This currency de mand was met largely through the purchase of $100,000,000 of acceptances by the Federal Reserve banks and the issuance of additional bank notes by the national banks. Reserve balances of member banks showed little change for the period and continued to be at a level about $800,000,000 above legal requirements. Total loans and investments of reporting member banks in leading cities declined by $160,000,000 between November 15 and December 13, reflecting chiefly sales of acceptances to the reserve banks and a reduction in holdings of investments other than United States Government securities. Loans on securities, chiefly to brokers in New York City, increased by $40,000,000, while all other loans, which include holdings of acceptances, declined by $125,000,000. Short-term money rates advanced slightly during the period.
@FedFRASER