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__________________________________ ______________________ ______________________
~
February, 1939
Number 2
Prepared by the
Research and Statistics Department
of the
Federal Reserve Bank of Chicago
Monthly Review of Business Conditions in the Seventh Federal Reserve District
DISTRICT SUMMARY
AS COMPARED with a year ago when the level of business
activity was declining, current conditions in the Seventh
district are considerably improved. However, there was some
recession during January from the rising trend prevailing in
the later months of 1938. Industrial production for the most
part was down in January, the merchandising of commodities
fell off in accordance with seasonal expectation, and em
ployment and payroll volumes decreased.
Industry
A LTHOUGH the steel industry was operating at a slightly
-lA higher rate in the middle of February than a month
previous and production was well above a year earlier, there
has been no decided expansion in the volume of incoming
business. Output of automobiles was smaller in January than
in December but much heavier than in the month last year.
Building construction, though considerably exceeding that of
January 1938, fell off more than seasonally, and the move
ment of materials was slow. Shipments from stove and
furnace factories were sharply lower in January than a
month previous, as is usual; those of furniture declined
more than seasonally, with new orders showing less than
the customary expansion for the period. On the other hand,
activity at steel and malleable casting foundries recorded im
provement in January, and that of paper mills increased fol
lowing recent declines. All of the major manufacturing
groups represented in employment data registered losses in
wage payments during January and most of them had lower
employment volumes.
Agricultural Products
PRODUCTION of packing-house commodities declined in
A- January from the preceding month and was below
that of last January and the 1929-38 average for the month;
however, sales increased and inventories accumulated less
than seasonally. The manufacture of creamery butter in the
district totaled above that of December and a year ago; dis
tribution of the commodity declined from the preceding
period and approximated the year-earlier volume. The vol
ume of Wisconsin cheese produced in January showed a
small nonseasonal recession from a month previous but was
above that of last January; sales gained in both comparisons.
Inventories of butter diminished less than is usual from the
end of December, while those of cheese declined more than
seasonally. The movement of wheat and com at interior pri
mary markets was lighter in January than a month earlier,
and that of corn was much below last year and the 1929-38
January average.
Trade
iyf ERCHANDISING phases followed seasonal trends dur
ing January, as both wholesale and retail trade fell off
from the preceding month. The decline in department store
trade was greater than in the 1929-38 average for January
and, owing to a decrease in Chicago, totaled below a year
ago. However, sales of shoes and furniture and housefurnishings at retail exceeded those of last January, and
wholesale trade groups sold heavier dollar volumes than in
the same 1938 month.
Credit
t) ECAUSE of heavy buying of Government securities, re
" serve balances of member banks in the Seventh district
were reduced 82 millions in the four weeks ended February
15. Both loans and investments of weekly reporting member
banks increased in this period; demand deposits in these
banks were smaller in mid-February than four weeks pre
vious, but time deposits showed a small gain.
Manufacturing
pansion in shipments and production, they lagged con
siderably behind the amount of incoming orders.
Iron and Steel Products
T^J 0 DECIDED improvement has been noted during recent
-1 ' weeks in business of steel mills in the Chicago district.
Buying of rails by the railroads has been active, and demand
for construction materials has been fair; but a sizable vol
ume of orders from the automobile industry and its suppliers
has not as yet developed and demand from other sources has
been rather inactive, although specifications from agricultural
implement and tractor manufacturers have been increasing.
Steel ingot production in the middle of February averaged
53 per cent of capacity for Chicago district mills, as com
pared with a rate of 49 per cent four weeks earlier and one
of only 25 per cent a year ago. Pig iron production in the
Illinois and Indiana district continued to decline in January
from the peak month of 1938 last November; it was, how
ever, much above the low volume of last January.
STEEL AND MALLEABLE CASTINGS
January 1939
SEVENTH DISTRICT
Per Cent Change
from
Dec.
Jan.
Steel Castings:
1938
1938
New orders booked (tons)...
+25.5
+12.2
New orders booked (dollars).
+30.1
+18.0
Shipments (tons).....................
+5.2
+39.3
Shipments (dollars)................
+5.2
+21.1
Production (tons).....................
+4.8
+60.7
Malleable Castings:
New orders booked (tons)...
+38.2 +108.6
New orders booked (dollars).
+35.4
+89.5
Shipments (tons).....................
+12.1
+34.0
Shipments (dollars)................
+10.0
+22.7
Production (tons)....................
+1.0
+61.3
*
*
*
Activity at steel and malleable casting foundries of the
Seventh district showed expansion during January over the
preceding month and was considerably greater than in the
corresponding period of 1938, shipments recording the first
gains over year-earlier volumes since the fall of 1937. New
business booked by both types of foundries increased in
January for the third successive month. Despite the ex
At stove and furnace factories of the district, shipments,
production, and new orders received continued in January
well above the levels of a year earlier, the increases amount
ing to 27, 32, and 54 per cent, respectively. In the com
parison with the preceding month, shipments were off about
28 per cent, or much less than in other recent years; pro
duction declined 25 per cent; while new business gained 48
per cent. Inventories diminished slightly between the end of
December and January 31 and were moderately under those
of a year ago.
The Automobile Industry
ALTHOUGH the production of automobiles in January
-i*- was moderately lighter than that of December—the peak
month of 1938 in the industry—it exceeded by a wide margin
the output of last January which showed a sharp decline in
the period. Passenger automobiles manufactured in the
United States numbered 280,040 this January, or 14 per
cent less than in December but 80 per cent greater than a
year ago, while truck production of 59,112 units was 5 per
cent below the preceding period and 9 per cent above the
corresponding month last year. Manufacturers reduced
schedules somewhat further in February, but preliminary
data indicate that output for the month will total substan
tially heavier than for the same 1938 period.
In line with seasonal expectations, sales of new automo
biles in the Seventh district fell off in January from a month
previous, the number of cars sold at wholesale by report
ing distributors being about 20 per cent smaller and dealer
sales to users declining one third. However, as compared
with a year ago, wholesale distribution was 125 per cent
heavier this January and retail sales numbered 30 per cent
larger. Although stocks of new cars were increased close to
70 per cent further during the current period, they totaled
one fourth lighter than at the end of January 1938; at the
end of December they were less than one half those of a year
earlier. Sales of used cars in January rose fractionally in
the aggregate over the preceding month but numbered 5 per
cent smaller than for last January with, however, the ma
jority of reporting firms showing decreases in the monthly
comparison and increases over a year ago. Stocks of used
cars expanded only 2 per cent between the end of December
and January 31 and were almost 20 per cent lighter than at
the same time a year previous.
and the currently favorable trend in both production and
sales is expected to continue into the autumn buying season
which begins late in March. Prices are now showing some
firming tendency in line with recent advances in piece goods.
Seventh district sales of men’s clothing at retail exceeded
those of a year earlier during December for the first time in
many months; January sales were off sharply from a month
previous and showed a small decline from a year ago. In
ventories of men’s clothing at retail are currently about
one fourth lighter than at the close of January 1938.
Furniture
S IS usual in January when the furniture marts are held,
-new business booked in the month this year by furniture
manufacturers in the Seventh district expanded sharply over
that of the preceding period. The increase, however, was
smaller than in the 1929-38 average for January, amounting
to only 65 per cent as against almost 100 per cent in the
average. As compared with a year earlier, new orders totaled
20 per cent heavier this January; in December they were 30
per cent larger than a year previous. The volume of new
business exceeded the ten-year average by 3 per cent, whereas
December orders totaled almost 25 per cent above it. Ship
ments of furniture showed a much greater than seasonal
recession during January from the preceding month—30 per
cent as against a decrease of only 12 per cent in the 1929-38
January average. They aggregated 24 per cent above those of
a year ago and 3 per cent above the average. Unfilled orders
on hand January 31 recorded a rise of 82 per cent over the
end of December and a gain of 25 per cent over the same
date last year; their ratio to incoming orders increased from
Other Manufacturing
85 per cent in the preceding month to 94 per cent, which
Men’s Clothing
latter compared with 91 per cent in January 1938. There was
ACTORY production and sales of men’s clothing in the a further decline of 8 points in production during January
Chicago area lagged sharply behind 1937 during most to 61 per cent of capacity, the current rate, however, being
of 1938. Late in the year, however, a decided improvement11 points higher than a year ago.
took place and this trend has extended into 1939; sales dur
ing the 1939 spring season, which is now nearing its close, Paper and Pulp
OLLOWING recent declines in orders and production,
show an expansion of at least one fifth in unit volume over
activity at Seventh district paper mills showed a sizable
the 1938 spring season. Owing to the decline in prices from
a year earlier, dollar sales recorded a somewhat smaller
gain during January over December and continued much
gain over 1938 than did the number of units sold. Inventories above the year-earlier level. Pulp mills operated at about 89
of both raw materials and finished merchandise at factories per cent of potential capacity, or almost 12 points higher
are down 25 to 50 per cent from the beginning of 1938. than a year ago, while paper mill production was at 85 per
Since October, production has evidenced improvement cent of capacity, or 5 points above January 1938.
over a year ago in about the same degree as has sales volume,
PAPER AND PULP INDUSTRY
A
F
F
SEVENTH DISTRICT
—------------------------------
MFNS
II
1
INDUSTRY — ILLINOIS
CLOTHING
FACTORY
EMPLOYH ENT
ANO
PAYROLL s
•
TK
\'—" \
'*svsEMF LOYMENT
- \T\
A
I
\
*«
\^
•
/•.../-rv
v\ + / T7
v
payrolls’:
v
_____________ 1/
t
\
V
■J
------
-----YEARLY ------*
,
,
,
,
i
,
.
•
.
'50 '32 '54 '36 '38
1936
___
MON HLY -----*■
.....................
Index numbers of factory employment and payrolls in the men’s clothing industry
of Illinois, 1926-1927 average = 100. By years, 1929 through 1938; by months, January
1936 through January 1939.
Page 2
Paper:
New orders booked (tons).....................
New orders booked (dollars)................
Total shipments (tons)............................
Total shipments (dollars).......................
Total production (tons)..........................
Stocks on hand at end of month (tons)
Pulp:
Pulp produced (tons)...............................
Stock on hand at end of month (tons).
January 1939
Per Cent Change
from
December January
1938
1938
+12.5
+32.1
+8.0
+10.7
+12.9
+18.6
+9.2
+9.0
+7.1
+18.4
—19.7
—23.6
+8.7
+4.4
+12.0
—12.1
The Building Industry
HE F. W. Dodge Corporation reports on building con
awarded in the Seventh district during the first
Ttracts
month of 1939 reflected a sharper recession in activity from
the relatively high level of the preceding month than has
been recorded for this period since early 1930. All of the
various types of construction work for which contracts were
awarded shared in the curtailment, residential building fall
ing off by the smallest percentage amount, with non-residential building and public works declining more than 50
per cent. The losses in these last two classifications prac
tically equaled the reduction in the volume of public funds
to be expended for such projects. Public funds have been an
important factor in the non-residential classification, mainly
through the assistance extended in the erection of schools and
other educational buildings. Despite the losses in January,
total awards for the month were still almost twice as large
as the year-ago volume, with privately-financed contracts
constituting 47 per cent of the aggregate, or slightly more
than the 45 per cent shown for January 1938.
BUILDING CONTRACTS AWARDED*
SEVENTH FEDERAL RESERVE DISTRICT
Period
January 1939....................
Change from December 1938__
Change from January 1938............
Total
Contracts
Residential
Contracts
$36,121,000
—47.6%
+90.7%
- 25.2%
+222.1%
Coal
T>RODUCTION of bituminous coal in Illinois and Indiana
was P Per cent heavier during January than in the cor
responding month of 1938. With the exception of last spring
when production exceeded the year-ago level due to several
large mines being shut down for the month of April 1937,
this represented the first such favorable year-to-year com
parison since September 1937. Industrial inventories have
been running about 6 per cent below a year previous, and
present stocks are considered ample. Further reductions,
however, are considered unlikely in the immediate future,
as the period for negotiations for a new wage scale is close
at hand. Although current statistics are not available, it is
estimated that distribution from Middle Western mines last
fall ran about 10 per cent lower than in 1937.
’Data furnished by F. W. Dodge Corporation.
January building permits reported by 100 cities through
out the district totaled 14 per cent fewer in number and 17
per cent less in valuation than a month earlier. The main
exceptions to the decreases recorded were furnished by In
dianapolis and Milwaukee where the estimated cost of the
contemplated projects was considerably higher than in De
cember. All of the five States of the district as well as the
larger cities within them showed increases over a year ago,
both in the number and valuation of permits issued. Aggre
gate gains for the district as a whole amounted to 35 per
cent in number and 90 per cent in estimated cost, Wisconsin
registering the heaviest and Illinois the lightest increase in
the latter item.
Demand for building materials continued inactive during
January, with sales in general below those of a month earlier
but higher than at the same time a year ago. The decreases in
sales of lumber were somewhat larger than are customary at
this season, both in the wholesale and retail divisions. In
creases over last January were especially marked in ship
ments of brick and cement, the gain in the former being
reported as about 80 per cent and in the latter as 65 per
cent. Although there has been a slight tendency during recent
months toward firmer materials prices, the Bureau of Labor
Statistics wholesale price index has changed little since last
November and currently is still about 2y2 per cent lower
than a year previous.
Fuel Industries
Petroleum Refining
TAAILY average runs of crude petroleum to stills in the
Indiana, Illinois, and Kentucky district averaged during
January about 4 per cent higher than in December and con
tinued above the year-earlier level, as they have since last
September. Earlier in 1938 refinery operations were some
what curtailed as unwieldy stocks of crude and finished
products had been built up, so that runs as well as gasoline
production for the year were below the 1937 aggregate for
the area. Crude runs for the United States this January
approximated the average for last January after running
below year-earlier levels since March 1938. Since mid-1938
there has been considerable tendency to shade retail gasoline
prices, and crude prices also have declined rather sharply
in recent months. Refineries in 1938 were under pressure to
diminish stocks of petroleum products, and by last Novem
ber stocks of gasoline in the Indiana, Illinois, and Kentucky
area were well reduced from earlier peaks; since then they
have tended to accumulate.
BITUMINOUS
1929
1930
1931
1932
1933
COAL
1934
PRODUCTION
1935
1936
1937
1938
1939
Index numbers of bituminous coal production in Illinois and Indiana, with and
without adjustment, 1923-1925 average = 100. Adjustment: 12-month moving aver
ages. By months, January 1929 through January 1939.
Industrial Employment Conditions
ALL of the major manufacturing groups represented in the
-d. employment and payroll figures of the Seventh district
showed decreases in amount of wages paid in January com
pared with a month previous, and all but one registered a
lower volume of employment. The exception to the downward
trend in the latter was furnished by the vehicles group. Dur
able goods industries generally reported larger losses in wage
payments than in number of workers employed, mainly be
cause of a prevailing tendency toward shorter working-hours.
Within the non-durable goods groups, declines in wage pay
ments were approximately in line with those in employment.
The largest percentage decreases for the month among the
manufacturing groups were furnished by the food and the
stone-clay-and-glass industries. Of the non-manufacturing
groups, merchandising and construction showed, as is custom
ary, a sharp seasonal curtailment, the losses in the former
being slightly larger than the increases recorded for Decem
ber. In the construction industry a seasonal recession has
been in progress since last October. Although the declines
during the current period for all of the reporting industries
combined were of considerable proportions, they were much
smaller than took place in January 1938. Consequently, the
comparison with a year ago showed improvement, employ
ment increasing 2 per cent over that time, while wage pay
ments were as much as 13 per cent higher. These favorable
margins over year-earlier volumes were the first recorded
since November 1937.
Page 3
EMPLOYMENT AND EAKNINGS—SEVENTH FEDERAL
RESERVE DISTRICT
Change from
December 15,1938
Week of January 15, 1939
Industrial Group
Report
ing
Firms
Wage
Earn
ers
Earn
ings
(000
Omitted)
Wage
Earn
ers
Earn
ings
No.
No.
1
%
%
— 0.8
— 3.9
Durable Goods:
Metals and Products1...........
Vehicles...................................
Stone, Clay, and Glass........
Wood Products......................
Total........................................
1,784
423
279
493
2,979
370,935
339,105
20,150
42,566
772,756
10,090
10,831
458
857
22,236
Textiles and Products..........
Food and Products...............
Chemical Products...............
Leather Products..................
Rubber Products...................
Paper and Printing..............
Total........................................
406
1,042
299
176
34
748
2,705
63,536
97,360
36,255
30,136
17,009
76,194
320,490
1,166
2,543
1,068
608
461
2,183
8,029
Total Mfg., 10 Groups..............
5,684
1,093,246
Merchandising*..........................
Public Utilities..........................
Coal Mining................................
Construction...............................
5,518
1,118
78
757
131,371
95,798
18,515
7,842
Total Non-Mfg., 4 Groups.......
7,471
Total, 14 Groups........................
13,155
+
—
—
—
0.2
5.6
2.8
0.6
— 4.2
—11.3
— 7.4
— 4.3
Non-Durable Goods:
4.4
4.9
0.3
3.6
6.3
2.0
— 3.5
—
—
—
—
—
—
3.2
6.1
0.9
1.2
8.3
0.6
— 3.4
—
—
—
—
—
—
30,265
— 1.4
— 4.1
2,903
3,166
473
223
—18.4
— 0.3
0.0
—18.9
—14.0
— 0.7
+ 4.0
—21.7
253,526
6,765
—11.1
- 7.4
1,346,772
37,030
— 3.4
— 4.7
■Other than Vehicles. Illinois, Indiana, and Wisconsin.
Merchandising
Retail Trade
ECAUSE of a decline in the City of Chicago, Seventh
district department store trade showed a small loss in
the aggregate for January from the same month a year ago.
Furthermore, the recession from December of 57 per cent was
somewhat greater than seasonal for the period, comparing
with one of 53 per cent in the 1929-38 average for January.
In the three weeks ending February 18, district department
store sales were 4 per cent less than in the corresponding
weeks of 1938; unfavorable weather effected a decrease of
10 per cent in Chicago department store trade, but sales of
Detroit, Milwaukee, and Indianapolis stores recorded in
creases over the three-week period of a year earlier. Stocks,
though declining 4 per cent in January from the end of
December in accordance with seasonal trend, totaled under
those of January 31, 1938 by only 8 per cent, which repre
sents a further narrowing of the margin of decrease in the
yearly comparison.
DEPARTMENT STORE TRADE IN JANUARY 1939
Per Cent Change
January 1939
from
January 1938
Locality
Ratio of January
Outstanding
End of December
Stocks End
of Month
1939
1938
—8.4
—8.3
50.5
44.9
50.3
41.7
heavier in the yearly comparison. Department .store sales of
shoes showed an 8 per cent increase over last January, while
dealer sales recorded a 4 per cent decline. The level of inven
tories at the close of January was 2 per cent above that of
a year ago and that percentage above the preceding month.
*
*
*
Sales of furniture and housefurnishings at retail by dealers
and department stores fell off 42 per cent in January from a
month previous, or somewhat more than is usual. They were,
however, 6 per cent in excess of the dollar volume sold a
year ago, which is about the same percentage increase shown
in December over a year earlier. Dealer sales recorded a
heavier decrease from December and a smaller gain over last
January than did those of department stores, increasing only
4 per cent in the latter comparison, while department stores
sold 7 per cent more furniture and housefurnishings. Al
though stocks declined 6 per cent between December 31 and
the end of January, they were but 10 per cent smaller than
on the same 1938 date, whereas four months earlier the
margin of difference was as much as 20 per cent.
Wholesale Trade
S IS usual in January, the volume of wholesale trade in
■ the Seventh district declined in the month this year
from the preceding period. Electrical goods sales were off
33 per cent, hardware sales 25 per cent, those of tobacco
and its products 23 per cent, and sales in the miscellaneous
group 23 per cent from the December volumes. Exceptions
to the downward trend were noted in the grocery trade which
increased 7 per cent, in sales of paper and its products which
rose 6 per cent, and in the drug trade in which business
gained 2 per cent over a month previous. Sales volumes in
general exceeded those of January 1938, as may be seen in
the accompanying table; last year, however, greater than
seasonal recessions had been recorded in the month. Stocks
totaled 3 per cent heavier on January 31, for all reporting
groups, than at the end of December but were 12 per cent
lighter than on the same 1938 date.
A
WHOLESALE TRADE IN JANUARY 1939*
Per Cent Change from Same Month Last Year
Commodity
Net Sales
*
+ 6.5
Groceries and Foods—
+ 5.9
Hardware........................
+ 5.4
Drugs & Drug Sundries.
+ 7.4
Electrical Goods............
+ 3.8
Paper & Its Products...
+10.8
Tobacco & Its Products.
+ 7.8
Miscellaneous..................
•Data furnished by Bureau of Foreign
Department of Commerce.
Stocks
Accounts
Outstanding
— 8.6
—14.0
—10.8
—15.8
—16.8
+ 6.7
—13.7
and Domestic
Collections
+ 7.3
+ 4.2
— 1.3
— 4.8
+ 3.7
+ 4.7
— 3.8
— 5.4
+ 2.3
— 2.0
+ 8.7
+ 5.1
— 4.0
— 8.5
Commerce, United States
Agricultural Products
Grain Marketing
Wheat
HE movement of wheat at interior primary markets in
41.8
40.9
—13.9
40.1
41.4
—3.7
the United States declined more than is usual in Janu
35.7
36.9
—6.6
ary, and reshipments of the grain dropped to below the yearearlier level. Wheat exports were in considerably better
43.5
44.8
—1.8
-8.0
7th District.....................
volume than in December and about the same as last Janu
•Include Fort Wayne and Peoria.
*
*
*
ary. Displaying a generally softening tendency from late
A seasonal recession of 54 per cent took place during Janu January through mid-February, quotations for No. 2 hard
ary in the retail shoe trade. Sales of reporting dealers and winter wheat in cash positions at Chicago stood at $.70%
department stores totaled 6 per cent larger than in January and $.7214 on February 15. Chief factors in these price de
1938, whereas in December they were only one per cent clines were weakness in surrounding securities markets, a
Net Sales
Chicago............................
Detroit.............................
Fort Wayne.....................
Indianapolis....................
Milwaukee.......................
Peoria...............................
Other Cities*..................
Page 4
—4.6
+0.6
—3.5
+2.5
+0.7
—5.0
+1.9
T
lessening of .the European political tension, and weakness
in com prices. In the following week prices recovered
slightly. Visible supplies of wheat, as of February 18, had
declined 10 per cent from a month earlier, but remained
well above the level of a year previous.
Com and Oats
TP HERE was a further decline during January in the move
-*- ment of corn at interior centers of accumulation, both
receipts and shipments being the lowest for any month since
the fall of 1937. Country marketings of corn were likewise
small, roads at many points being impassable. After relief
of the Argentine drought in the second week of January,
corn prices declined irregularly through mid-February,
influenced by long liquidation, lack of substantial export
sales, and continued favorable weather conditions in Argen
tina, as well as by competition from low-grade wheat as a
feed grain in Europe. Quotations for No. 2 yellow corn for
immediate delivery at Chicago at $.48% to $.49% on Feb
ruary 15 were about 4 cents lower than a month earlier but
made some recovery in the following week. Little change
was noted in United States visible supplies on February 18
as compared with a month previous; these stocks continued
about one fourth heavier than in the corresponding 1938
period. Receipts of oats increased somewhat in January,
but reshipments from primary points declined seasonally
in the period. Some weakness in oats prices was shown in
late January and the first half of February.
MOVEMENT OF OBA1N AT INTEBIOB PRIMARY MARKETS IN THE
UNITED STATES
(In thousands of bushels)
t
Jan.
Dec.
Jan.
1929-38
1939
1938
Wheat:
1938
Av.
Receipts................................. ...................
12,146
14,809
10,625
13,924
Shipments..............................
18,228
13,156
10,975
Receipts...................................
Shipments............................... ...................
Oats:
Receipts................................... .................
Shipments...............................
8.963
20,314
10,514
33,069
21,179
19,322
10,835
5,794
6,034
5,461
4,739
5,267
5,012
6,269
Livestock
HOUGH continuing below year-earlier levels, receipts
A of hogs, lambs, and calves at public stock yards in the
United States rose seasonally during January over December.
Cattle receipts showed a greater increase than is usual and
exceeded slightly the 1929-38 January average. The move
ment to inspected slaughter diverged from the trend of
market receipts in that hog slaughter declined 7 per cent
from December and that of cattle increased only fractionally.
Shipments of livestock to feed lots declined roughly in line
with seasonal expectations but remained well above the yearago movement.
The extent of changes in number of livestock on farms as
of January 1, 1939 from a year earlier is shown in the fol
lowing tabulation:
Number:
Hogs and Pigs...................................
Cows and Heifers, kept for milk* .
Other Cattle and Calves.................
Lambs and Sheep.............................
Horses and Colts..............................
Mules and Mule Colts......................
(In thousands)
Five States Including
United States
Seventh District
1939
1938
1939
1938
Total Farm Value:
Hogs and Pigs................................... $
Cows and Heifers, kept for milk*.
Other Cattle and Calves................
Lambs and Sheep.............................
Horses and Colts..............................
Mules and Mule Colts......................
•Two years old and over.
18,174
6,466
7,345
5,392
2,714
241
16,784
6,415
7,213
5,447
2,820
245
49,011
25,093
41,728
53,762
10,800
4,382
44,218
24,834
41,249
52,682
11,128
4,428
243,229
409,411
234,794
34,114
267,817
25,746
$ 224,859
400,468
214,215
36,549
296,618
27,955
$ 547,461
1,397,280
1,172,513
309,180
911,572
515,869
S 498,070
1,352,014
1,065,221
322,525
1,012,217
543,092
Meat Packing
OLLOWING less than seasonal expansion in December,
the production of packing-house commodities in the
United States aggregated smaller for January than in that
month. Lard, barreled pork, and most dry salt meats de
clined in price from December, but quotations for beef,
veal, lamb, and a majority of pork cuts advanced. Sales to
domestic and foreign customers increased in January over
December, and there was a less than seasonal accumulation
of inventories. Production and sales did not show quite so
favorable a comparison with the ten-year average, however,
as during the preceding period. Furthermore, payrolls at the
close of January recorded declines from a year ago of 4 per
cent each in employes and hours and 5 per cent in wage
payments; there was, on the other hand, a gain over Decem
ber of one per cent in employes, of 7 per cent in wage pay
ments, and of 9 per cent in hours worked. Production con
tinued under last year during the first half of February.
F
MEAT PACKING-UNITED STATES
Per Cent Change
in January 1939
from
December
January
January
1938
1938
1929-38 Av.
Tonnage produced................................................... — 1.9
—4.4
—5.3
Tonnagesold............................................................ +4.4
+3.9
—4.7
Dollarsales............................................................... +2.7
—0.8
+6.4
Inventories................................................................ +17.6
— 1.0
—16.9
Foreign Trade
ANUARY shipments of packing-house commodities for
export exceeded those of a month earlier, owing princi
pally to fair bookings of lard and pickled meats by the
United Kingdom. British trade in United States lard was
good in the first half of January but slackened somewhat
after mid-month; the demand for pork was relatively good
over the entire period. Though showing improvement over
a month earlier, continental European demand for packing
house products from the United States continued on a very
restricted basis, centered principally in a small tonnage of
lard and dry salt meats. Cuba purchased fair quantities of
lard during the period, Porto Rican demand for lard and
smoked meats improved, and there was moderate business
with Latin America. Realizations on lard and hams in the
United Kingdom were equal to or slightly above Chicago
parity during the first half of January and only a little below
it during the remainder of the month; prices in most other
foreign markets were on a United States basis. With a consid
erable portion of January forwardings either on a straight
sales basis or absorbed promptly upon arrival, United States
holdings of packing-house commodities in foreign markets
—inclusive of stocks in transit—recorded very little if any
J
LIVESTOCK SLAUGHTER
(In thousands)
Yards in Seventh District,
January 1939 .........................................................
Federally Inspected Slaughter,
United States:
January 1939 ......................................................
December 1938 .................................................
January 1938 ......................................................
December 1929-38 average.............................
Cattle
189
Hogs
663
761
758
830
778
4,043
4,346
4,201
4,541
Lambs and
Sheep
Calves
277
80
1,456
1,347
1,552
1,435
AVERAGE PRICES OF LIVESTOCK
(Per hundred pounds at Chicago)
Week Ended
Months of
Feb. 18
Jan.
Dec.
1939
1939
1938
Native Beef Steers (average).............. ............... S10.20
$10.45
$10.25
Fat Cows and Heifers...........................
7.95
7.50
Calves.......................................................
9.75
8.75
Hogs (bulk of sales)...............................
7.35
7.25
Lambs.......................... :.......................
8.90
9.00
415
417
420
416
Jan.
1938
$ 8.30
6.95
10.00
7.95
8.35
Pag* 5
increase on February 1 over the beginning of January.
Importations of animal products into the United States
decreased in January from December.
Credit and Finance
Condition of All Member Banks
RELIMINARY data for December 31, 1938 show that
Dairy Products
deposits and investments of all Seventh district member
banks increased during 1938, while loans declined. How
ANUARY production of creamery butter by Seventh dis
trict firms increased about 2 per cent over December ever, these general trends were not common to each of the
and continued 3 per cent over January 1938. Manufacture different groups of banks. During the first half of the year,
of the commodity in the United States remained well above loans of all classes of banks declined, but those of country
the year-earlier level. January sales by district butter firms banks recovered during the last half of 1938 to the extent
approximated the year-ago amount, but were 4 per cent that a net increase was shown for the year, while loans of
below the preceding month. After declining in December banks in large cities other than Chicago were at the same
and early January, butter prices were maintained steady level on December 31 as a year earlier; only in Chicago was
through the first three weeks of February, largely by sizable a marked decrease in the volume of loans recorded during
market purchases of the Federal Surplus Commodities Cor 1938. Investments of large city banks showed steadier and
poration. United States cold-storage holdings of creamery more marked increases than did those of the rural institu
butter on February 1 showed a somewhat less than seasonal tions, where holdings of securities actually declined during
reduction from January 1. Of 111% million pounds in the first six months of 1938 and were only slightly higher
storage on February 1, about four fifths were held by Gov at the end of the year than on December 31, 1937. Total
deposits of all classes of banks increased during 1938, but
ernment agencies.
a steadier rise took place in Chicago than elsewhere, deposits
American cheese production in Wisconsin recorded a outside the metropolis recording a large portion of their
slight nonseasonal decline during January from December, increases in the last quarter of the year.
but totaled 6 per cent greater than a year ago and 10 per
cent higher than the 1929-38 January average. Sales of
cheese from Wisconsin primary markets aggregated 7 per BILLIONS OF DOLLARS
cent larger than in December and 13 per cent above January
ALL MEMBER BANKS SEVENTH DISTRICT
1938. United States stocks of all varieties of cheese declined
somewhat more than seasonally from January 1 to February
1, and though still at record levels for the date, exceeded by
only about one fifth the 1933-38 average for February 1.
Cheese prices softened in the first half of January but held
firm thereafter through the first three weeks of February.
P
J
LLIQNS OF DOLLARS
MONTHLY BUSINESS INDEXES
Data refer to Seventh district and are not
adjusted for seasonal variation unless other Jan.
1939
wise indicated.
1923-25 average=100
Manufacturing Industries:
Pig Iron Production:
Automobile Production—(U. S.):
Casting Foundries Shipments:
Stoves and Furnaces:
Furniture Manufacturing:
82
79
Dec. Nov.
1938 1938
Creamery Butter Output:
Department Store Net Sales:
Adjusted..........................
Pag* G
Dec. Nov.
1937 1937
1934
83
S3
81
80
79
68
91
84
100
101
75
80
83
49
53
68
96
157
111
165
109
138
53
143
83
217
101
172
35
29
47
61
33
27
43
55
34
30
44
58
33
25
38
46
47
37
49
60
58
47
55
67
85
129
168
60
132
177
80
45
49
63
62
64
66
37
37
51
53
68
41
53
55
101
59
84
13
28
16
38
26
41
102
91
88
104
88
86
99
93
85
106
88
89
101
89
83
88
83
86
81
100
80
105
78
109
78
101
78
98
75
101
66
74
85
74
64
69
86
148
181
182
160
148
157
94
90
111
112
99
92
96
88
69
74
84
74
62
70
88
148
180
172
161
144
156
93
95
117
109
104
93
100
92
Building Contracts Awarded:
Meat Packing—(U. S.):
Jan.
1938
1935
1935
1937
1938
1939
Selected items of condition by call dates from March 27, 1929, through December
31, 1938.
Member Bank Reserves
ONTINUED heavy buying of Government securities dur
ing the four weeks ended February 15 reduced Seventh
C
district member bank reserves to the lowest level since last
April. Sales of bills and guaranteed notes by the Treasury
amounted to 120 millions, and other miscellaneous items
further augmented Treasury receipts for the period to a
level over $140 million in excess of disbursements. Com
mercial and financial funds continued to flow into the
Seventh district from other districts to the net extent of 71
millions, but increased currency circulation and declining
Reserve bank credit extended, reduced reserves by 11 mil
lions, with the result that they were off 91 millions in Chi
cago during the four weeks and only 9 millions higher in
other sectors of the district, the latter gain being mainly
due to increased balances of Wisconsin banks in the last
week of the period.
Interest Rates
T NTEREST rates charged by reporting member banks
showed practically no change between January 15 and
the middle of February. However, the average rate earned
on total loans and discounts by the larger banks of the
district’s two main cities—Chicago and Detroit—-recorded
the third successive month-to-month decline, prior to which
time the average had moved steadily higher during most of
1938.
Open Market Paper
1VI IDDLE Western dealer sales of commercial paper failed
during January to show full seasonal improvement
over December, while new financing through bankers’ accept
ances in the Seventh district fell off in close accordance with
the normal trend. Outstandings of the former on January 31
recorded a slight increase over the same month-earlier date,
while liability for acceptances fell off by 7 per cent during
the period. Acceptances made and commercial paper sales
both declined during the first fifteen days of February from
the corresponding January period.
Securities Markets
1VTEW corporate financing in January was in the lowest
1 ” volume of any month since January 1935, and only a
small fraction of the limited total originated in the Seventh
district. Of interest, however, was an issue of equipment
trust certificates by an aviation transport company to finance
the purchase of new airships. This type of financing has here
tofore been confined almost exclusively to railroads. A large
issue of 10-20 year debentures appearing on February 1 was
enthusiastically received and participated in extensively by
banks. Though continuing to purchase only high-grade
bonds, the banks are, nevertheless, showing a tendency to
buy somewhat longer maturities than heretofore. Prices of
high-grade bonds were firm during January and early Feb
ruary, and the lower grades, especially the more speculative
utilities, moved irregularly upward. This tended to narrow
the spread that has persisted between prices of the different
quality bonds. A similar narrowing of spread was witnessed
in municipal quotations, while new issues of these securities
were in moderately small volume.
The Treasury continued to dominate the new issue market,
offering two issues of Government-guaranteed notes for the
U. S. Housing Authority and for the Reconstruction Finance
Corporation, in the volume of about $114 million and $300
million, respectively. The former, five-year notes dated Feb
ruary 1, bore the rate of 1% per cent and established a new
record, for issues publicly offered by the Treasury in that
subscriptions were about 27 times in excess of allotments.
The % per cent R. F. C. notes, dated February 15 and ma
turing January 15, 1942, sold at $1001,4 and elicited applica
tions of $2,566 million. The $100,000,000 weekly issues of
Treasury bills in the five weeks ended February 23 all sold
at average discounts to yield less than .010 per cent.
The Chicago Journal of Commerce average of 20 Chicago
stocks fluctuated between about $43.00 and $47.00 over the
period from January 21 to February 21, which range com
pares with an average of $39.34 on the latter date in 1938.
Selected Seventh District Banking Data
*
*
•
FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS
OF CONDITION
(Amounts in millions)
Total bills and securities...............................................
Bills discounted...............................................................
Bills bought......................................................................
U. S. Government securities........................................
Total reserves..................................................................
Member bank reserve deposits....................................
All other deposits............................................................
Federal Reserve notes in circulation..........................
Ratio of total reserves to deposit and
Federal Reserve note liabilities combined........
February 15
1939
$281
0
0
281
2,123
1,090
294
984
89.6%
Change from
Jan. 18 Feb. 16
1939
1938
$0
$—2
0
0
0
0
0
—1
—5
+326
—82
+73
+71
+232
+2
+18
+0.1*
+1.8*
•Number of Points.
*
*
*
CONDITION OF REPORTING MEMBER BANKS
SEVENTH DISTRICT
(Amounts in millions)
February 15
Assets
1939
Loans and investments—total......................................
Loan*—total.....................................................................
Commercial, industrial, and agricultural loans.......
Open-market paper.........................................................
Loans to brokers and dealers in securities................
Other loans for purchasing or carrying securities...
Real estate loans.............................................................
Loans to banks................................................................
Other loans.......................................................................
U. S. Government direct obligations.........................
Obligations fully guaranteed by U. 8. Government
Other securities...............................................................
Change from
Jan. 18 Feb. 16
1939
1938
37
78
98
4
118
1,642
246
466
$+51
+3
+7
—2
0
0
+1
0
—3
+22
+18
+8
$+224
—105
—92
—19
—10
—7
+11
0
+12
+199
+58
+72
2,276
892
0
—53
+3
0
+121
+8
0
$3,202
848
483
30
Liabilities
Demand deposits—adjusted*.......................................
Time deposits..................................................................
Borrowings........................................................................
The annual velocity of demand deposits (unadjusted) in the four weeks ended
February 15 was 19.12 times, as compared with 25.25 times in the preceding five weeks
and with 19.78 times in the corresponding period of 1938.
*
Chicago.............
Des Moines___
Detroit..............
Fort Wayne....
Grand Rapids.,
Indianapolis.......
Milwaukee.........
Peoria................
South Bend.......
32 smaller cities.
Total 41 cities...
*
*
BANK DEBITS, SEVENTH DISTRICT
(Amounts in millions)
Per Cent of Increase
or Decrease from
January December January
1939
1938
1938
$2,823
—20.5
+ 3.2
108
— 2.4
+15.5
878
—11.5
+ 6.7
30
—12.5
— 6.5
50
—14.9
+ 7.2
210
— 1.1
+ 9.7
254
—10.9
+ 2.8
52
—15.7
- 8.8
35
—10.1
— 1.8
464
—12.1
+ 3.0
4,904
—16.5
+ 4.1
*
*
*
TRANSIT OPERATIONS OF THE FEDERAL RESERVE BANK
OF CHICAGO AND DETROIT BRANCH
(Exclusive of Treasury checks and of non-transit items drawn on own bank)
Total country and city check clearings:
Pieces.....................................................
Amount.................................................
Daily average clearings:
Total items cleared—
Pieces.....................................................
Amount.................................................
Items drawn on Chicago—
Pieces.....................................................
Amount.................................................
Items drawn on Detroit—
Pioces.....................................................
Amount.................................................
January1939
11,725,318
$2,062,050,102
January 1938
10,378,971
$1,856,101,089
469,013
$82,482,004
415,159
$74,244,044
75,925
$43,911,000
69,465
$39,662,000
19,217
$7,972,812
17,808
$7,979,744
Pag* 7
National Summary of Business Conditions
«
(By the Board of Governors of the Federal Reserve System)
INDUSTRIAL PRODUCTION
PERCENT
PERCENT
— MO
NDUSTRIAL production increased less than seasonally in January and the first
three weeks of February, following a rapid advance in the latter half of 1938.
IWholesale
commodity prices continued to show little change.
Production
N January volume of industrial production, as measured by the Board’s season
ally adjusted index, was at 101 per cent of the 1923-1925 average as compared
with 104 in December. At steel mills, where activity usually increases considerably
at this season, output in January and the first three weeks of February was at
about the same rate as in December. Automobile production declined seasonally
in the first two months of the year as retail sales showed about the usual decrease
and dealers’ stocks reached adequate levels. Output of cement declined in January,
and there was also some reduction in output of lumber and plate glass. In the
non-durable goods industries, where production had been at a high level in
December, activity increased less than seasonally. Increases at cotton, silk, and
tobacco factories were smaller than usual and at woolen mills there was a decline.
Shoe production and sugar refining continued in substantial volume, and activity
at meat-packing establishments showed little change, following a decline in
December. Mineral production increased somewhat in January, reflecting an
increase in output of crude petroleum.
Value of construction contracts awarded declined in January, according to
F. W. Dodge Corporation figures, owing principally to a reduction in awards for
publicly-financed projects, which had been in large volume in December. Contracts
for privately-financed residential building continued at the recent advanced level,
while awards for private non-residential building remained in small volume.
I
Index of physical volume of production, adjusted for
seasonal variation, 1923-1925 average — 100. By months,
January 1934 to January 1939.
FACTORY EMPLOYMENT
Employment
ACTORY employment and payrolls showed the usual decline between the
middle of December and the middle of January. In most individual industries,
as well as in the total, changes in the number of employes were of approximately
seasonal proportions. In trade, employment declined somewhat more than is usual
after Christmas.
F
Index of number employed, adjusted for seasonal vari
ation, 1923-1925 average = 100. By months, January 1934
to January 1939.
MEMBER BANK RESERVES AND RELATED ITEMS
Distribution
at department and variety stores and by mail order houses showed the
usual sharp seasonal decline from December to January. In the first two weeks
SALES
of February department store sales continued at the January level.
Volume of freight-car loadings in January and the first half of February was
at about the same rate as in December.
Commodity Prices
HOLESALE commodity prices generally continued to show little change in
January and the first three weeks of February. Grain prices declined some
Wwhat,
following a rise in December, while prices of hogs increased seasonally.
Changes in prices of industrial materials were small.
Bank Credit
Wednesday figures, January 3,1934, to February 21,1939
MONEY RATES IN NEW YORK CITY
DISCOUNT RATE
XCESS reserves of member banks, which reached a record high level of
$3,600,000,000 on January 25, declined somewhat in February. This decline
resulted chiefly from a temporary increase in Treasury balances with the Reserve
banks representing cash receipts from the sale of the new United States Housing
Authority and Reconstruction Finance Corporation notes. Purchases of these notes
were also responsible for an increase in total loans and investments of reporting
member banks in 101 leading cities, following a decline during January.
E
A
Money Rates
yields on United States Government securities declined further during
the first three weeks of February to about the lowest levels ever reached. New
AVERAGE
issues of 91-day Treasury bills, after selling at par or at a slight premium in late
For weeks ending January 6, 1934, to February 18, 1939.
Page 8
December and early January, were again on a slight discount basis during
February. Other open-market rates continued unchanged.
I
DIRECTORS AND OFFICERS
Federal Reserve Bank of Chicago
DIRECTORS
W. J. Cummings............................Chicago, 111.
E. R. foxBERC...........................Waukesha, Wia.
F. D. Williams...
C. B. Van Dusen............................ Detroit Mich
M. W. Babb............................... Milwaukee w£'
V.......Chi^lS:
.
Iowa City, Iowa
F. J. Lewis.........................
N. H. Noyes....................................................... Indianapolis, Ind.
MEMBER OF FEDERAL ADVISORY COUNCIL
E. E. Brown..............................................................Chicago, 111.
OFFICERS
h d Schaller..............................................................President
it ^RESTON..............................................First Vice President
J. IL Duxard........................................................ Vice President
n' o’ ~.NYDER....................................Vice President and Cashier
d ' I0™.................................................. * • • • Fice President
C. B. Dunn................. ......................................... General Counsel
W. C. Bachman............ Assistant Vice President
0. J. Netterstrom. .. .Assistant Vice President
A. L. Olson.................... Assistant Vice President
A. T. Sihler.................. Assistant Vice President
A. M. Black ... Manager, Planning Department
J. L. Sweet............................................................
Manager, Research and Statistics Department
J. J. Endres..............................................Auditor
J. C. Callahan.....................................AssistantCashier
N. B. Dawes........................................... AssistantCashier
F. A. Lindsten...................................... AssistantCashier
L. G. Meyer.......................................... AssistantCashier
F. L. Purrington.......................Assistant Cashier
J. G. Roberts.......................................... AssistantCashier
C. M. Saltnes........................................AssistantCashier
P. C. Hodge............................................. AssistantCounsel
INDUSTRIAL ADVISORY COMMITTEE
w „
Max Epstein, Chicago, III............................................ Chairman
R
‘SCHFEGER.................... Milwaukee, Wis.
G. B. Moxley........................... Indianapolis Ind
R. R. Monroe.................................. Chicago, 111.
G. W. Young....................................... cCgo, 111.'
DETROIT BRANCH
DIRECTORS
^ARSHALL............................... Detroit, Mich.
J. E. Davidson.............................Bay City, Mich
J. M. Dodge................................. Detroit M ch
H. L. Pierson................................ Detroit, Mich.
L. W. Watkins. ...
. .Manchester, Mich.
W. S. McLucas.............................. Detroit,’ Mich!
KBuss..............................................................Detroit, Mich.
H
i"
H. T. Chat font
OFFICERS
R‘ H' BUSS.................. Al.V/...........TV V
-Managing Director
'' ‘ ............................ .. • •Cashier
H. L. Diehl.............................. Assistant Cashier
SEVENTH FEDERAL
IOWA
ILL 1INO
RESERVE DISTRICT
@FedFRASER