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Business Conditions R Seventh FEDERAL eserve MICH jj I STRICT IOWA _ yT. MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAGO Volume 14, No. 3 Wn ‘ ■'-fa V* E •* February 28, 1931 i J fa a y General Summary TT'URTHER expansion was noted during January in several phases of Seventh district industrial activity, although distribution of commodities declined seasonally, following the usual gains in December. With one or two exceptions, manufacturing and trade remained below the level of a year ago, but declines from last January were small in some instances. Automobile production again increased in January, though less than seasonally following the large gain in December, and operations at steel mills have been grad ually expanding. Steel and malleable casting foundries reported heavier shipments and production than in the preceding month. Furniture manufacturers booked a heavier volume of orders, as is customary for January, though failing to show quite so large a gain as usual for the month; their shipments fell off seasonally. Total building contracts awarded in the Seventh district re corded further decline, despite a gain in residential build ing for the month; materials continued to be in poor demand. The recession in industrial employment was largely affected by first-of-the-year influences. Food-production industries in general showed gains in January over December. Meat, butter, and cheese pro duction increased, and sales of the last commodity also were larger. Both manufacture and sales of butter ex ceeded those of a year ago, and production of meat gained in the comparison. Merchandising lines, wholesale and retail, for the most part recorded seasonal recessions in January from the pre ceding month; in wholesale trade, drug sales furnished an exception. Department store sales totaled less than 10 per cent below last January, and declines from a year ago were FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions of dollars) 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. Feb. 11 1931 $114.5 18.8 13.9 81.8 404.9 334.7 148.1 83.8 Change From Jan. 14 Feb. 11 1931 1930 $-31.0 $-51.9 -7.3 -47.2 -22.8 -14.2 0 + 11.0 +35.1 -97.7 -1.0 +2.6 +4.5 -149.4 +6.7* +4.0* smaller than for some tfnfe' in the retail shoe and retail \ furniture trade. Aggregate sales of reporting chains were about the same as in January 1930, though average sales per store continued to be somewhat less. Wholesale and retail distribution of automobiles expanded over a month previous, and retail sales showed an increase in aggregate value over a year ago, due to increased sales of higher priced cars. Loans of reporting member banks in the district de clined further between the middle of January and Feb ruary Tl, while their investments again increased; net demand deposits fell off during the period, but time de posits gained. No changes of importance took place in money rates. Credit Conditions and Money Rates Borrowings of member banks at the Reserve bank de clined approximately 7 million dollars between January 14 and February 11. Chiefly accountable for the less ened borrowing during that period were an excess of local Treasury expenditures over receipts amounting to more than 22 million dollars, and lessened demand for currency, combined with minor changes in other factors making for decreased borrowing, as set forth in the accompanying tabulation. Partially offsetting the foregoing factors, will be noted a decrease in holdings of acceptances (local trans actions) of about 14 millions, a small loss of funds through inter-district settlements for commercial and financial transactions, and slight changes in other elements also making for increased member bank borrowing. FACTORS IN MEMBER BANK BORROWING AT THE RESERVE BANK OF CHICAGO Changes between January 14 and February 11, 1931 (In millions of dollars) Changes making for decrease in member bank borrowing: 1. Excess of local Treasury expenditures over receipts........... 2. Decrease ift demand for currency.............................................. 3. Increase in reserve bank float..................................................... 4. Decrease in unexpended capital funds..................................... 5. Decrease in member bank reserve balances........................... 6. Decrease in non-member clearing balances............................ FEDERAL 22.27 1.38 0.55 0.29 0.14 0.12 Total. 24.75 Changes making for increase in member bank borrowing: 1. Decrease in holdings of acceptances (local transactions)... 14.38 2. Funds lost through inter-district settlements for com mercial and financial transactions............................................. 2.06 3. Decrease in holdings of other securities................................... 1.00 4. Sales of gold to industry............................................................. 0.04 Total.................................................................................................... 17.48 Excess of changes making for decrease in member bank borrowing: Absorption of this excess: Decrease in member bank borrowings (discounts for member banks).......... *............................................... 7.27 7.27 Member Bank Credit Reporting member banks in the Seventh district on February 11 showed a decrease from January 14 of more than 30 million dollars in loans on securities, as well as in “all other” loans, while investment holdings rose in excess of 20 millions. Reflecting the lessened volume of loans, net demand deposits declined nearly 45 millions during the period. Time deposits gained approximately 23 mil lion dollars. As against February 11, 1930, total loans and investments on that date in 1931 registered an in crease of 166 million dollars, investments alone increasing nearly 250 millions, whereas loans on securities and “all other” (commercial) loans declined 36 and 46 millions, respectively. In the year-to-year comparison, as shown in the tabulation at the bottom of the page, deposits regis tered a considerable increase, amounting in the case of net demand deposits to 78 million dollars and for time deposits to 118 millions. low to 3 and 3)4 per cent for high, with most paper going at 2)4 and 3 per cent. Chicago bill market operations remained moderate dur ing the five weeks ended February 11, chiefly owing to a light supply of bills from local banks. Dealer purchases, however, were augmented to some extent by a fairly liberal movement of acceptances from the East to Chicago. Demand on the part of local banks ranged between mod erate and good; weekly sales to out-of-town banks aver aged somewhat less than from December 11 to January 14; and shipments to eastern markets declined in the com parison with the earlier period. Portfolios of dealers re mained at a very low level on February 11. Rates closed on February 11 at )4 per cent less than those of January 14, being 1)4 per cent for 30-day offerings and 1)4 per cent for those of 180 days. AVERAGE WEEKLY TRANSACTIONS OF REPORTING DEALERS IN THE CHICAGO BILL MARKET January 15, 1931 to February 11, 1931 Per Cent Change The average rate earned on loans and discounts by six down-town Chicago banks during the calendar month of January was 4.57 per cent, a rise of one point from the 4.56 reported for December. The prevailing rate of 3)4 y2 to 5 per six on customers’ prime commercial loans, as reported bycent large down-town banks in Chicago for the week ending January 15, was reduced to 3 to 5)4 for the week ending February 15, reflecting a drop of )4 per cent reported by one bank of moderate size. In Detroit, an average rate earned during January of 5.48 per cent was reported, as compared with 5.52 in December; the pre vailing rate on customers’ prime commercial loans in that city for the week ended February 15 was 4)4 to 5 )4, un changed from the range given for the corresponding week in the preceding month. Sales of commercial paper in the Middle West increased 37 per cent in January over the low level of the two pre ceding months, although they declined 45 per cent from the same month of 1930 and continued in approximately half the customary volume for this season of the year. Financing by means of commercial paper remained in moderate proportions during the month, despite a slight improvement in the demand for this class of investment. Selling rates in January ranged from 2)4 and 2% per cent for low to 3*4 and 3)4 per cent for high, with a pre ponderance of the names moving at 2)4 to 3 per cent. With the exception of May, June, and July 1929, com mercial paper outstandings in the Middle West were at a lower level on January 31, 1931, than for any correspond ing date on record (January 1923). During the first half of February, sales exceeded those for the corresponding period of January by more than 35 per cent, largely owing to a somewhat better supply of paper; demand was good. Rates closed on February 14 at 2)4 and 2% per cent for Change From Jan. 14 Feb. 11 1930 1931 $ —46 $+166 —32 -36 —35 -46 +21 +248 Total Loans and Investments............................... Loans on Securities............................................... All Other Loans......................................................... Investments................................................................ 1931 $3,298 1,183 1,220 895 Net Demand Deposits............................................. Time Deposits............................................................ 1,844 1,296 —44 +23 +118 Borrowings from Federal Reserve Bank............ 5 —4 -31 —50.4 —9.3 -87.5 *At end of period. The aggregate value of bills accepted in January by the reporting group of accepting banks in the Seventh Federal Reserve district was unusually large for the opening month of the year, though less than in December or the corre sponding period of 1930. Purchases continued on a lib eral basis but remained considerably below the peak of last October, the latter decline being mainly due to a re duction in the supply of bills. Sales resumed moderate proportions in January, following the marked expansion a month earlier. Accepting banks’ holdings of bankers’ bills increased on January 31 to within 25 per cent of the high point of November 30, despite profit-taking in De cember and a large volume of maturities in the preceding 60 days. Liability for outstanding acceptances declined in January to the lowest level of any month since last June. Bills accepted during the first half of February aggregated 11)4 per cent less in value than for the cor responding period of January and represented a smaller amount of financing by means of acceptance credits in a majority of the industries; noteworthy increases, however, were reported for tobacco, hides, and aluminum, while gains also were shown for packing-house products, textiles, raw furs, sugar, coffee, and surgical goods. TRANSACTIONS IN BANKERS’ ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Per Cent Change December 1930 Total value of bills accepted Purchases................................... Sales........................................... Holdings*................................... Liability for outstandings*.. in January 1931 From January 1930 -7.6 +3.0 -43.0 +24.0 +6.2 +181.2 -6.6 -19.7 -15.3 +40.9 Security Markets (Amounts in millions of dollars) Page 2 Comparison With Period From Jan. 16 to Feb. 11,1930 *At end of month. CONDITION OF REPORTING MEMBER BANKS, SEVENTH DISTRICT Feb. 11 in Dec. 11,1930 to Jan. 14, 1931 Bills purchased............................... —9.4 Bills sold........................................... +10.8 Holdings*......................................... —37.8 +78 Increased demand, slightly higher price levels, and a larger volume of new offerings characterized the Chicago bond market during January and the first two weeks in February. The improved tone which became evident during the latter part of December continued through most of January. In the closing part of the month, how ever, bond prices declined. Following this short period of unsettlement, the market appears to have again strengthened. New offerings during January were the largest since the spring of 1930, and showed a decided increase over recent months. Demand was heavy not only for new offerings but also for general market issues, largely representing reinvestment on the part of institu tions and banks which had liquidated prior to the turn of the year. An encouraging factor during January was the appearance of some individual buying, although stdl not in large volume as compared with institutional demand. Prices on the Chicago Stock Exchange, while fluctuating considerably during the past six weeks, trended slightly upward. The average price of twenty leading stocks * on February 14 amounted to $94.69. * Chicago Journal of Commerce. Agricultural Products The following table shows more cattle and hogs on farms on January 1, 1931, than a year ago. In the Sev enth Federal Reserve district, however, a compilation of the December 1 reports direct to this bank from county agricultural agents reflected reduced operations in all classes of live stock from the preceding year, the result, in part, of the feed situation and of the prevailing low prices for live-stock products. wheat entered this country for milling in bond than in the same period of the preceding year. Price changes dur ing recent weeks have not been significant, cash wheat averaging slightly higher in January than in December but declining somewhat after the middle of the month. Continuance of unfavorable crop news based on undeter mined damage to the Argentine crop and reported short age of moisture in the North American belt had a strengthening influence on futures in most world markets, though to a less extent on those in the United States than elsewhere. The volume of trading in wheat futures at Chicago totaled about one-fourth of that in January 1930, and the average of contracts outstanding amount ing to 11 per cent less than for December, was smaller than for any month since July. The movement of corn at interior markets was small, and receipts and shipments of oats were moderate. Cash corn averaged slightly less in January than in December, a sharp rise at the first of the year having been followed by decline during the remainder of the month. Oats quota tions varied little from December. Corn futures followed a similar trend to cash transactions. The volume of corn future transactions was three times that of January a year ago, and unfulfilled contracts averaged 64 per cent higher. Movement LIVE STOCK ON FARMS—JANUARY 1 Estimates by the United States Bureau of Agricultural Economics (In thousands) Five States Including Seventh District Number Value , Swine, including Pigs..................19,190 Milk Cows and Heifers*........... 6,129 Other Cattle and Calves.......... 5,942 Lambs and Sheep........................ 4,386 Horses and Colts...................... * 3,’i83 Mules and Mule Colts.............. 318 1930 Swine, including Pigs................. 18,873 Milk Cows and Heifers*........... 5,957 Other Cattle and Calves.......... 5,901 Lambs and Sheep........................ 4,438 Horses and Colts........................ 3,266 Mules and Mule Colts............... 329 United States Number Value $243,830 375,516 190,031 24,001 245,806 24,972 52,323 22,975 35,980 51,911 12,803 5,131 $ 610,200 1,322,666 1,018,255 277,708 785,624 351,994 $281,577 546,212 276,011 44,304 285,576 28,959 53,238 22,443 35,535 50,503 13,364 5,279 $732,560 1,872,358 1,449,634 450,684 944,709 438,019 *Two years old and over. Grain Marketing Increased concentration of wheat at primary centers in January resulted from the combined effect of receipts larger than for any January since 1923—also exceeding any month since last September—and a volume of re shipments smaller than usual. This concentration was reflected in an increase during January in the total United States visible supply, the amount of which on February 7 was larger by over 3 million bushels than on January 3 and about 30 million bushels greater than on February 7, 1930. Exports in January were only about one-sixth of the January 1930 volume, and the total for the season to January 31 was almost 20 per cent below the corre sponding aggregate for the 1929-30 season. In the seven months ended January 31, over twice as much Canadian VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT Chicago....................................................... Detroit, Milwaukee and Indianapolis. $3,459 1,325 Per Cent of Increase or Decrease From Dec. 1930 Jan. 1930 -8.1 -18.5 -8.9 -16.4 Total four larger cities.......................... 34 smaller centers................................... $4,784 909 +2.0 - Total 38 centers. $5,693 -6.8 -17.2 Live Stock Meat Packing January production at slaughtering establishments in the United States was somewhat in excess of the average for the month, totaling 12 per cent heavier than in De per cent above a year ago. Payrolls at cember and the close of January reflected an increase of one per cent LIVE STOCK SLAUGHTER (In thousands) Yards in Seventh District, January 1931................................. Federally Inspected Slaughter, United States January 1931................................. December 1930........................ January 1930................................. Cattle Hogs Lambs and Sheep Calves 189 1,209 353 101 651 692 713 5,362 4,647 5,001 1,426 1+26 1+25 379 398 374 AVERAGE PRICES OF LIVE STOCK (Amounts in millions of dollars) Jan. 1931 of Hog receipts at public stock yards in the United States continued in January to total slightly less than in the pre ceding year or the five-year average for the month, though increasing somewhat more than the customary amount over December. Cattle marketings decreased from a month earlier and remained decidedly below the seasonal average, as prices failed to show the usual improvement in January over December and there was fairly definite evi dence of a smaller supply of the animals available in corn belt feed lots than in 1930. Lamb receipts continued in exceptionally large volume for mid-winter. Reshipments to feed lots declined sharply from December; the move ment of feeder cattle decreased from the five-year aver age, and feeder purchases of lambs showed a smaller gain in this comparison than had been evidenced in any other month since last September. -8.3 -18.0 12.8 (Per hundred pounds at Chicago) Week Ended Feb. 14 Native Beef Steers (average). .. Fat Cows and Heifers.... 5.85 Calves ............................................. Hogs (bulk of sales).... . . . Yearling Sheep................. 7.35 Lambs................................. 8.30 $8.35 9.25 7.25 Jan. Month Dec. $9.60 6 40 9.30 7.65 6.85 8.05 1930 $10.50 7.05 8.55 7.95 6.15 7.65 of Jan. 1930 $12.75 9.25 13.95 9.75 10.85 13.00 Page 3 in number of employes, of 16 per cent in hours worked, and of per cent in wage payments over the preceding period. Sales billed to domestic and foreign customers totaled one per cent less in value than for December and were 25 per cent below those of last January. Reduced buying power of the consumer as compared with a year ago, together with the low prices of packing-house prod ucts in recent months, remained chiefly responsible for the latter recession, while mild weather has continued an un favorable influence in so far as domestic sales are con cerned. A decline in quotations for pork, lard, and smoked meats dining January accounted for the major portion of the decrease in sales from the preceding month; beef and veal prices remained steady, while those of lamb, clear bellies, and light-weight hams advanced. Inventories of packing-house commodities in the United States increased more than the seasonal amount on February 1 over the beginning of January, and were a little in excess of the five-year average, though less than a year ago. Trade in domestic markets remained fair at the beginning of Feb ruary. Shipments for export appear to have been somewhat larger in January than a month earlier, principally owing to the delivery of lard for which commitments had been made in October, November, and December. Despite a slight expansion during the month in the forwarding of commodities on consignment terms, a further decline was evident on February 1 in the American holdings of pack ing-house products abroad (inclusive of stocks in transit). Foreign purchases of lard for future delivery were only in fair volume in January, but trade in stocks already landed was rather good; the demand for meats remained quiet. European prices averaged slightly under the Chicago parity. Dairy Products The manufacture of creamery butter in the Seventh Federal Reserve district continued in January at a higher level than is customary for the month, being 2 per cent greater than in December and 11 per cent above a year ago. These increases were chiefly due to the mild weather which was conducive to a greater production of milk than is usual in mid-winter. Consumption continued heavy for this season of the year, because of low prices of the com modity, and January sales tonnage of firms in this district was 2 per cent heavier than in the corresponding month of 1930, despite a 3)4 per cent decline from a month earlier. Inventories of the commodity in cold-storage warehouses and packing plants in the United States showed a decrease, as is customary, of 17,000,000 pounds on February 1 from the beginning of January and aggre gated less than on February 1, 1930, though remaining 12,000,000 pounds in excess of the five-year average. Prices declined further during January and the first half of February. The production of American cheese in Wisconsin in creased 11 per cent during the four weeks ended January 31 over the preceding period, which gain is somewhat less than seasonal, and totaled 10 per cent smaller than in the corresponding weeks of 1930. Reshipments of the com modity from primary centers of that state expanded 52 per cent over those of December 8 to January 3, and were 6)4 million pounds in excess of current production and only 4 per cent less than in the same period of a year pre vious. A decline in cheese inventories in the United States Page 4 was shown as is usual on February 1 from the beginning of January; stocks were on a level with a year ago but continued to exceed the five-year average by nearly 4,000,000 pounds. Prices had declined to a very low level by the beginning of February. Industrial Employment Conditions The usual first-of-the-year fluctuations in industrial operations resulted in a further moderate decline in em ployment and payrolls, as reported for January by firms in this district. The downward trend was evident in practi cally all lines, as ten of the fourteen groups in the classi fication had fewer employes than were reported for De cember, and only one group, food products, showed any expansion in wage totals. Whether continued cyclical contraction was operative during the period covered can hardly be determined, as conditions vary in different in dustries and localities. Some plants lengthened their working hours and others employed more workers after the first of the year; on the other hand, such changes were offset by the seasonal closing of plants and reduction of forces for inventory and repairs. The length of the period of shut-down seems to average longer than in years of normal demand, as certain plants which closed in the latter part of 1930 were reported as still inactive on Jan uary 15. Some firms have reported wage reductions, which have combined with reduced working hours to cur tail total wage payments; in addition, re-hiring at reduced rates and promotion of lower paid workers to fill the place of those previously earning more have no doubt con tributed to the reduction in payroll aggregates. Income of farm workers has also continued downward, as indicated by the Department of Agriculture report for January 1, which showed that a smaller demand for farm labor combined with a greatly increased supply forced the index of farm wages to the lowest level on record (1923-31) for that date, the net decline from October 1 being 21 points, as compared with an average seasonal decline of 14 points for the corresponding period in the last five years. At free employment offices the ratio of applicants to jobs available in January was higher for three states than EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT Week Industrial Group of Report January 15, 1931 Earnings Firms Wage Earners No. No. ing (000 Omitted) $ Changes From Dec. 15, 1930 Wage Earn Earn ers ings % % -1.8 -3.6 -4.1 -7.4 +0.3 -13.9 —7.3 -3.2 —6.4 -3.9 -4.2 3,847 640 456 1,304 236 68 68 7 247 158,646 29,307 25,700 50,414 9,349 24,288 10,288 14,266 2,732 32,216 357,206 31,164 89,577 9,827 7,606 138,174 8,337 775 2,974 240 199 4,188 -1.9 -13.3 Coal Mining......................... Construction........................ Total Non-Mfg., 4 Groups. 1,802 175 78 29 193 475 -18.4 -5.5 -3.9 -9.6 -0.3 —6.2 -20.7 -3.7 Total, 14 Groups................. 2,277 495,380 12,525 -2.9 -3.8 Metals and Products1........ Textiles and Products.... Food and Products............. Stone, Clay, and Glass.... Chemical Products............. Leather Products................ Rubber Products5............... Paper and Printing............ Total Mfg., 10 Groups---Merchandising*.................... 534 70 137 323 112 212 424 249 238 43 924 -3.5 -4.9 -1.3 -9.6 -fO.8 +0.7 +0.1 -4.9 -0.2 -1.8 +1.0 lOther than Vehicles. •Wisconsin only. Illinois and Wisconsin. in December, Indiana alone showing any reduction in the excess of workers applying for jobs. REGISTRATIONS PER 100 POSITIONS AVAILABLE AT FREE EMPLOYMENT OFFICES Iowa Wisconsin 1931 January........................... 1930 December........................ 331 270 156 172 497 451 230 192 1930 January........................... 1929 December........................ 257 177 164 119 315 278 196 163 Month Illinois Indiana Manufacturing Automobile Production and Distribution Manufacturers of passenger automobiles in the United States accelerated production less than is customary dur ing January, following the unusually large increase in December; output of 139,814 cars represented a gain of 14 per cent over the last month of 1930 and compared with production of 236,145 in January of that year. Truck output totaled 31,577 in January, or about the same as in the preceding month, and declined 18 per cent from the corresponding month a year ago. Wholesale distribution of automobiles by representa tive firms in the Middle West increased seasonally in Jan uary, and retail sales also gained. As compared with the corresponding month a year ago, wholesale distribution was less by almost 30 per cent, and the number of cars sold at retail was 9 per cent smaller but the value 3)4 per cent larger, this difference in trend being largely due to increased sales in the higher priced cars over that period. Used cars sold gained noticeably in number over both a month and a year previous. Stocks of new and used cars remained much lighter than a year ago, though expanding as is usual in the first month of the year. The value of cars sold on the deferred payment plan averaged 40 per cent of the total retail sales during January of thirty-two dealers, and compared with a ratio of 37 per cent in December and with 50 per cent a year ago. very quiet month. As compared with the high rate of activity maintained in the corresponding month of 1930, the level in January this year was decidedly lower. Jan uary pig iron production in the Illinois and Indiana dis trict averaged slightly less in the daily average than a month previous and much smaller than for any January on our records (1923). An attempt was made the end of January to establish slightly higher prices on steel plates, shapes, and bars in this district, but early in February they again returned to previous levels. Pig iron has re mained steady, while scrap iron and steel prices weakened somewhat at the end of January. Casting foundries of the Seventh district experienced increased activity during January for the second succes sive month, shipments and production of both steel and malleable castings gaining over the preceding month. Or ders booked by malleable foundries were one-third larger in the comparison, but those booked by steel foundries fell off. All items were in considerably lower volume than in the corresponding month a year ago. Seasonal trends were operative with manufacturers of stoves and furnaces, shipments declining and orders booked increasing as com pared with the closing month of 1930. Shipments to taled about one-third less than last January, while orders booked were one-fourth smaller. Production expanded considerably during the month, following several shut downs in operations in December. Furniture Gradual expansion took place during January and the early weeks of February in activity of steel mills in the Chicago district, operations increasing from around 40 per cent of capacity the middle of the former month to almost 50 per cent by the fifteenth of February. Reports vary, however, as to volume of new business and ship ments, certain of them indicating a noticeable improve ment in January over December, and others recording a The seasonal expansion in orders booked which takes place in January was realized this year by reporting fur niture manufacturers in only slightly less than the usual degree, the increase over orders booked in December being 64 per cent as compared with an average increase in other years of 87 per cent. Shipments, though only 11 per cent under those of the preceding month as compared with an average decline for the month of 14 per cent, aggre gated little more than half the total of new orders, and cancellations were very low. Consequently, unfilled or ders increased 112 per cent over a month previous and stood at the close of January at 73 per cent of orders booked during the month, an increase of 16 points over the 57 per cent obtaining at the close of December. As compared with a year ago, orders booked, shipments, and unfilled orders were 34, 38, and 36 per cent lower, respec tively. The rate of operations maintained during January was 49 per cent of capacity, the same as in December and comparing with a ratio of 70 a year ago. MIDWEST DISTRIBUTION OF AUTOMOBILES WHOLESALE AND RETAIL LUMBER TRADE Iron and Steel Products Changes in January 1931 from previous months Per Cent Change From December 1930 New Cars Wholesale— Number Sold.................................... Value................................................... Retail— Number Sold..................................... Value................................................... On Hand January 31— Number.............................................. Value................................................... Used Cars Number Sold..................................... Salable on Hand— Number.............................................. Value................................................... +42.3 +37.1 January 1930 -29.2 -26.6 Class of Trade January 1931: Per Cent Change From Dec. 1930 Companies Included Wholesale Trades Jan. 1930 Number of Firms or Yards +13.4 +15.4 +2.9 26 26 +25.6 + 13.7 -9.0 +3.5 50 50 +20.5 +15.1 -40.6 -36.2 +15.4 52 +4.0 -0.6 -28.1 -37.1 52 52 Accounts Outstanding1.................. 52 52 +26.1 Retail Trade: -38.4 -23.7 -19.9 12 10 10 -21.0 -24.1 -12.4 -20.9 -27.8 +2.0 216 45 208 Ratio of accounts outstanding1 to dollar sales during month Jan. 1931 Retail Trade......................................... 180.3 530.6 Dec. 1930 200.0 483.6 Jan. 1930 133.6 414.7 lEnd of Month. Page 5 Shoe Manufacturing, Tanning, and Hides Seventh district shoe production in January remained near the exceptionally low level of the two preceding months. Leather production and sales decreased from December and the corresponding month of 1930. Quota tions for leather held barely steady. Chicago trading in packer green hides was less active in January than a month earlier, but more calf and kip skins were sold; total shipments of hides and skins from the city increased. Prices declined. Building Material, Construction Work Reporting wholesalers in this district showed improved lumber business in January, the substantial increase re corded in sales being contrary to the usual decline at the beginning of the year. Relative to a year previous the decline was about as large as during recent months in similar comparisons. Better demand from railroads and industry contributed to this improvement, while sales to retailers continued small. Stocks were reduced, fol lowing the expansion shown in December, but the ma jority of firms were carrying a larger volume than at the end of January 1930. A fair improvement in collections was indicated by a lower ratio than for December of ac counts to dollar sales. Further reduction in demand for lumber and other ma terials was reported by retailers, whose sales were much smaller in January than in December. Residential and farm building and miscellaneous repair work, which are the main sources of retail demand, failed to expand de spite the generally favorable weather during the month. A survey by .the National Lumber Manufacturers Asso ciation shows a continuation of large numbers of vacan cies in most classes of buildings, making new construction and reconditioning unattractive. Reports of retail dealers to the same organization indicate that yard stocks in the five states including this district on January 1 totaled about 10 per cent less than at the beginning of 1930 and IS per cent smaller than on January 1, 1929. Firms re porting to this bank effected a further slight reduction in stocks during January. The downward movement of prices continued during the first month of the year. Quotations have weakened for lumber, brick, and cement at wholesale, and lower prices for nearly all building materials were in effect in eight cities of this district on January 1 than a month earlier.* * Division of Building and Housing of Bureau of Standards, Washington. Building Construction Total construction activities in the Chicago territory, according to contracts awarded during January, showed a decline from December and a year ago. Residential contracts though less than for January last year, were somewhat larger in volume than in the preceding month. BUILDING CONTRACTS AWARDED* SEVENTH FEDERAL RESERVE DISTRICT Period Total Contracts Residential Contracts January 1931..................................... Change from December 1930 ................... Change from January 1930....................... $31,766,500 -10% -20% $6,458,943 The estimated cost of building permits issued by 100 cities in the Seventh Federal Reserve district increased 16 per cent in January over the closing month of 1930, al though the number of permits fell off 7 per cent. In the comparison with a year ago, declines of 16 and 40 per cent, respectively, were shown. The value of permits issued in Chicago and Detroit displayed noticeable gains over December 1930, while in Milwaukee, Indianapolis, and Des Moines declines were recorded in the comparison. Detroit was the only one of these five cities also to show an increase in estimated cost over a year ago. Merchandising Declines were reported in January from the preceding month in all reporting lines of wholesale trade except drugs which experienced a 2 per cent increase in sales. Hardware sales fell off 27 per cent in the comparison, shoes 25 per cent, electrical supplies 23 per cent, dry goods 17 per cent, and groceries 3 per cent. With the exception of groceries, declines were more than seasonal. Decreases continued to be recorded in business from a year ago. In most groups, ratios of accounts outstanding to sales increased in January over the preceding month, while the majority showed smaller ratios than a year ago. The recession from December of 52 per cent in Jan uary department store sales was about average for the season, according to reports of representative stores in this district, while the decline of 9 per cent from a year ago approximated that between January 1930 and 1929. In the comparison of this January with last, Detroit expe rienced the heaviest recession of the larger cities in the district, with 14 per cent, and that of only 2J4 per cent recorded for the aggregate of cities other than Chicago, Indianapolis, Detroit, and Milwaukee, was largely affected by gains shown by more than one-third of the individual stores included. Stocks continued to decline and remained lighter than a year ago. Retail shoe sales by department stores and dealers de clined less than is usual between December and January, and the decrease of only 2 per cent from last January DEPARTMENT STORE TRADE IN JANUARY 1931 WHOLESALE TRADE IN JANUARY 1931 From Per Cent Change Same Month Last Year Commodity KAc£s?F Net Sales Stocks -10.2 -26.3 -23.2 -10.7 — 1.1 -28.4 Pafie 6 -6.0 -15.5 -39.1 -12.8 -18.8 -9.0 Outstand Collec ing Groceries.............. Hardware............. Dry Goods........... Drugs.................... Shoes..................... Electrical Supplies............ tions -10.0 -16.8 -28.7 -5.2 -5.9 -24.0 Locality Per Cent Change January 1931 From January 1930 Outstand Accts. -29.2 Net Sales Stocks End of Month Ratio of January Collections to Accounts Outstanding December 31 1931 1930 Chicago....................... Detroit......................... Indianapolis............... Milwaukee.................. Other Cities............... -8.5 -13.7 -3.7 -9.7 -2.5 -11.5 -16.2 -23.0 36.5 38.0 44.1 38.4 41.5 40.6 -12.8 39.3 40.1 7th District............... -8.8 -13.2 39.5 41.4 ing to Net Sales ----------------9.1 -24.9 -21.3 -12.0 -20.8 isa ♦Data furnished by F. W. Dodge Corporation. 88.5 312.0 372.7 149.4 635.2 149.3 represented the smallest decline in the year-to-year com parison since May 1930. Stocks on hand the end of the month decreased from a month previous and from the corresponding date of 1930. Sales of furniture and house furnishings at retail likewise fell off seasonally in Jan uary, while the decline of 10 per cent in the year ago com parison was the smallest since last March. Stocks at the end of January averaged almost one-fourth less than on January 31, 1930. Along with other lines of retail trade, aggregate sales during January of twenty chains operating 2,635 units, declined seasonally from the preceding month. Sales to taled about the same as those of last January, but average sales per store were 5 per cent smaller in this comparison. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO othemfeefndTcSd*WterefiffuS^rT»?P« ?ollar volu“'. for.t.he month indicated, using the monthly average for 1923-1924-1925 as a base, unless Data refer to the Seventh°nba“°f retUrn'receiVedtodateire,1,,on,wiI1 be given the foll°wing monthNo. of m_ . Firms Meat Packing—(U. S.)-— Sales (in dollars).................................... 63 Casting Foundries— Shipments: Steel—In Dollars............................... 15 In Tons................................... 15 Malleable—In Dollars..................... 23 In Tons......................... 23 Stoves and Furnaces— Shipments (in dollars).......................... 11 Furniture— Orders (in dollars)................................. 26 Shipments (in dollars).......................... 26 Flour— Production (in bbls.)............................ 27 Output of Butter by Creameries— Production............................................... 67 Sales........................................................... 69 Wholesale Trade— Net Sales (in dollars): Groceries............................................... 31 Hardware............................................. 14 Dry Goods.................................... ’. ’ 9 Drugs..................................................... 14 Shoes..................................................... 8 Retail Trade (Dept. Stores)— Net Sales (in dollars): Chicago................................................. 26 Detroit.................................................. 4 Indianapolis........................................ 5 Milwaukee........................................... 5 Other Cities......................................... 50 Seventh District................................. 90 Automobile Production (U. S.)— Passenger Cars....................................... Trucks....................................................... Building Construction— Contracts Awarded (in dollars): Residential........................................... Total...................................................... Iron and Steel— Pig Iron Production: Illinois and Indiana.......................... United States...................................... Steel Ingot Production—(U. S.)*. . Unfilled Orders U. S. Steel Corp___ ♦Average daily production. Jan. 1931 Dec. 1930 Nov. 1930 Oct. 1930 Sept. 1930 Aug. 1930 Jan. 1930 Dec. 1929 Nov. 1929 Oct. 1929 Sept. 1929 Aug. 1929 84 85 89 105 102 98 113 104 111 129 126 119 34 34 31 45 31 30 27 40 32 30 25 36 42 42 31 44 46 48 33 48 57 62 32 46 80 84 69 98 84 93 60 83 79 86 60 81 87 92 73 99 85 88 78 105 100 50 86 118 200 150 110 78 125 167 256 213 151 64 37 38 39 47 47 56 72 70 73 56 60 102 61 55 80 86 98 112 149 117 133 104 119 98 99 103 117 121 116 107 92 97 122 106 113 93 96 91 99 78 94 94 96 97 95 115 111 84 94 82 86 81 88 96 92 106 98 133 119 85 42 42 86 34 87 59 51 84 45 86 63 55 83 63 104 88 71 101 83 103 75 71 95 78 99 66 58 88 77 94 58 55 97 35 91 76 66 96 57 101 92 78 100 69 113 112 97 113 98 107 106 115 108 112 104 80 95 80 85 72 82 165 201 154 167 146 167 99 130 97 111 96 105 no 127 98 116 103 111 94 165 114 107 86 107 77 104 74 80 81 82 87 109 83 94 73 89 188 240 172 184 160 190 126 171 120 137 114 132 126 163 113 131 no 129 no 211 131 120 98 127 90 136 48 84 42 84 35 87 38 99 60 109 64 95 81 103 31 73 57 128 109 161 124 137 151 151 22 46 20 51 36 58 42 77 44 88 37 86 34 58 38 no 66 85 89 122 104 150 105 147 72 56 69 87 72 55 58 83 76 63 67 76 79 71 76 73 82 77 83 72 91 83 89 75 109 93 106 94 113 93 87 93 124 108 102 86 132 118 126 86 135 119 136 82 144 123 137 77 * 94 89 124 102 96 112 118 88 94 94 98 PERCENT NATIONAL SUMMARY OF BUSINESS CONDITIONS PERCENT INDUSTRIAL PRODUCTION (By the Federal Reserve Board) NDUSTRIAL activity increased in January by slightly less than the usual sea sonal amount, and factory employment and payrolls declined. Money rates in the open market declined further from the middle of January to the middle of February. I Production and Employment Index number of industrial production, adjusted for seasonal variation. (1923-25 average = 100). PERCEVT PERCENT 120 FACTORY EMPLOYMENT AND PAYROLLS \ Payrolls Employment The Board’s index of industrial production, which is adjusted for seasonal varia tion, showed a decrease of less than one per cent in January, compared with declines of 3 per cent in November and in December. Activity in the steel industry, which was at a low level in December, increased during the following month by con siderably more than the usual seasonal amount; output of automobiles, which had shown an unusual increase in December, increased less in January than in the cor responding month of other recent years. The cotton and wool textile industries were more active in January, while the output of copper, petroleum, and coal declined. The number of wage earners employed at factories was smaller in the payroll period ending nearest the fifteenth of January than in the preceding month, reflect ing in part extended year-end shut-downs. There were large declines in employment at foundries and at establishments producing hosiery, women’s clothing, lumber, brick, cement, and tobacco products. Employment in the men’s clothing, leather, and agricultural implement industries increased somewhat more than usual for the season. Factory payrolls were considerably reduced in January. Value of contracts awarded for residential building continued to decline in Janu ary, according to the F. W. Dodge Corporation, while contracts for public works and utilities increased. In the first half of February the daily average of contracts awarded for residential building increased. Distribution Indexes of factory employment and payrolls, without adjustment for seasonal variation. (1923-25 average = 100). BILLIONS OF DOLLARS BILLIONS OF DOLLARS MEMBER BANK CREDIT Volume of freight carloadings was reduced further in January, contrary to the usual seasonal tendency, reflecting decreases in shipments of coal, merchandise, and miscellaneous freight. Department store sales, which always show a sharp reduction from December to January, declined by less than the estimated seasonal amount. All Other Loans Wholesale Prices The general level of wholesale commodity prices declined further by 2 per cent in January, according to the Bureau of Labor Statistics. Prices of many leading agricultural products, and of copper and silver decreased substantially, while prices of cotton and silk advanced. In the first half of February the price of cotton continued to rise, and in the middle of the month copper also advanced, while the price of silver declined to new low levels and prices of live stock continued to decrease. Monthly averages of weekly figures for reporting member banks in leading cities. Latest figures, averages of first two weeks in February 1931. PER CENT PERCENT MONEY RATES IH NEW YORK — Commercial Paper Rate ------ Reserve Bank Discount Rate —— Acceptance Rate i 1927 1928 1929 Volume of credit at member banks in leading cities showed little change from January 14 to February 11, further declines of $200,000,000 in loans on securities and of $115,000,000 in all other loans being largely offset by an increase of $310, 000,000 in the banks’ holdings of investments. In the first three weeks of February, bank suspensions declined sharply and a number of banks, previously suspended, resumed operations. Volume of reserve bank credit outstanding decreased by $175,000,000 between the weeks ending January 17 and February 14, reflecting a reduction of $70,000,000 in member bank balances and $80,000,000 in money in circulation, together with an increase of $25,000,000 in the stock of monetary gold. The principal reduction has been in acceptance holdings of the reserve banks. Money Rates 1930 1931 Monthly rates in the open market in New York: commercial paper rate on 4- to 6-month paper; accept ance rate on 90-day bankers’ acceptances. Latest figures, averages of first 19 days in February 1931. Page 8 Bank Credit Money rates in the open market continued to decline after the middle of January, and by the middle of February were at new low levels. The prevailing rate on prime commercial paper declined to a range of 2J4-2J4 per cent, and the rate on bankers’ acceptances was reduced to 1% per cent but subsequently advanced to 1J4 per cent.
@FedFRASER