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Business Conditions Seventh FEDERAL Reserve DISTRICT MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAQO Volume 15, No. 3 February 29, 1932 General Summary were seasonal in nature. The aggregate decline recorded in Seventh district department store trade was greater OLLOWING a slight acceleration in certain lines of than usual for the period, and sharp decreases were shown manufacture and seasonal gains in the merchandising in other lines of retail trade, such as shoes, furniture, and of commodities during the closing month of 1931, the chain stores. Most comparisons with a year ago in both usual expansion in production failed to materialize in the wholesale and retail trade were more unfavorable than in early part of 1932, while distribution of goods fell off some time. Distribution of automobiles at wholesale, as more than is customary for the period. well as sales to consumers, gained seasonally in January. The iron and steel industry, which was operating at Borrowing at the Reserve bank was slightly smaller on a low level the end of the year, expanded output only February 17 than five weeks previous, principally owing slightly in January, and at the middle of February no to a decrease in member bank reserve balances and an further gain in operations had taken place. Shipments excess of local Treasury expenditures over receipts, which of malleable and steel castings, which usually are heavier more than offset a considerable expansion in the demand in January, showed a decline for the month this year. Al for currency. Total loans and investments of reporting though automobile production increased slightly, the member banks, and deposits therein, continued their gain was much smaller than that recorded in recent years. downward course during the period. Money rates re The decline in shipments of furniture by reporting manu mained firm. A moderate increase took place in commer facturers was largely seasonal, but orders booked totaled cial paper sales during January over the preceding month, only one-third the usual volume for January. Building while activity in acceptance transactions of banks was construction reached a new low point during the month. limited. Except for the automobile industry, manufacturing em ployment for reporting groups declined. Credit Conditions and Money Rates Production and sales of meat-packing products were less in January than a month previous; manufacture of A decrease in member bank reserve balances of over butter totaled about the same, though distribution fell 1734 millions and an excess of local Treasury expenditures off. Output of cheese expanded over December, however, over receipts of almost IS million dollars, during the period and butter production and sales were heavier than for January 13 to February 17, were the principal factors last January. Marketing of wheat, as well as of feed making for lessened member bank recourse to the Reserve grains such as corn and oats, was restricted during the bank. Changes in other factors involved in the decrease month. in member bank borrowing were a decrease in unexpended Distribution of commodities at wholesale was smaller capital funds of 2 million dollars and a gain of funds in January, although in some lines of trade the recessions through inter-district settlements for commercial and financial transactions, which likewise amounted to about F FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions of dollars) Total Bills and Securities.................................... Bills Discounted.................................................... Bills Bought.......................................................... U. S. Government Securities.............................. Total Reserves...................................................... Total Deposits...................................................... Federal Reserve Notes in Circulation.............. Ratio of Total Reserves to Deposit and Federal Reserve Note Liabilities Combined.......... ♦Number of Points. Feb. 17 1932 $206.9 75.9 20.2 107.3 660.7 264.6 570.8 79.0 Change From Jan. 13 Feb. 18 1932 1931 $-12.3 $ +91.8 -2.4 +56.8 -9.6 +6.1 -0.3 +25.5 +26.5 +239.7 -20.6 -87.1 +37.0 +423.8 + 1.6* -5.4* CONDITION OF REPORTING MEMBER BANKS, SEVENTH DISTRICT (Amounts in millions of dollars) Feb. 17 Total Loans and Investments............................ Loans on Securities.............................................. All Other Loans.................................................... Investments........................................................... Net Demand Deposits Time Deposits............ Borrowings from Federal Reserve Bank $2,672 886 1,017 769 Change From Jan. 13 Feb. 18 1932 1931 $ -68 $ -636 -33 -251 -8 -194 -27 -191 1,426 999 -78 -17 43 -4 -414 -300 +38 2 million dollars. Chief among factors offsetting this de crease was an increase in demand for currency totaling 30l/i millions. Minor changes tending to make for an increase in borrowings, were decreases in reserve bank float and in holding of acceptances (local transactions) of slightly over 1(4 millions each, together with a small amount of gold sold to industry and a slight gain in non member clearing balances. The sum of these changes, however, totaled less than those making for decreased borrowing, so that loans to member banks were smaller by almost 2(4 million dollars on February 17 than on January 13. The accompanying table presents in detail the analysis of factors influencing the volume of member bank recourse to the Reserve bank. FACTORS IN MEMBER BANK BORROWING AT THE RESERVE BANK OF CHICAGO Changes between January 13 and February 17, 1932 (In millions of dollars) Changes making for decrease in member bank borrowing: 1. Decrease in member bank reserve balances......................... 2. Excess of local Treasury expenditures over receipts.......... 3. Decrease in unexpended capital funds.................................. 4. Funds gained through inter-district settlements for com mercial and financial transactions..................................... FEDERAL 17.67 14.80 2.18 1.99 Total........................................................................................... 36.64 Changes making for increase in member bank borrowing: 1. Increase in demand for currency............................................ 30.55 2. Decrease in reserve bank float............................................... 1.69 3.' Decrease in holdings of acceptances (local transactions)... 1.55 4. Sales of gold to industry.......................................................... 0.23 5. Increase in non-member clearing balances........................... 0.22 Total.......................................................................................... 34.24 Absorption of this excess: Decrease in member bank borrowings (discounts.for member banks)....................................................... 2.40 Member Bank Credit Total loans and investments of reporting member banks in this district on February 17 amounted to $2,672,000,000—a decrease of 68 millions from the January 13 ag gregate, representing a decline of 33 millions in loans on securities, 8 millions in “all other” (commercial) loans, and 27 millions in investment holdings. As compared with February 18, 1931, the decline in total loans and in vestments on February 17 of this year was 636 millions, involving a decrease of approximately 250 million dollars in loans on securities, 194 millions in all other loans, and 191 millions in investments. Net demand deposits on February 17 fell short of the January 13 total by 78 mil lions and were 414 million dollars less than on February 18 of the preceding year, while time deposits dropped 17 and 300 millions, respectively, in the same comparisons. compared with 4.72 per cent in December 1931, and 4.49 per cent in January a year ago. In Detroit, the prevail ing rate on customers’ commercial loans during the week ended February 15 was reported as 5 to 6 per cent, un changed from the corresponding period in January. Although commercial paper sales in the Middle West increased 14 per cent in January over December and aggregated greater than for any other month since last August, they were only one-fifth of the 1923-31 average volume for January. Demand was rather light and the supply only fair. Selling rates for the month ranged from 3(4 and 4 per cent for low to 4 and 4(4 per cent for high; most business was transacted at 3J4 and 4 per cent. Sales during the first half of February aggregated considerably smaller than for the corresponding period of January and reflected a reduction in both supply and demand. Holdings on January 30 were at the lowest level on record (January 1923). Accepting banks in the Seventh Federal Reserve dis trict reported limited activity in bill transactions during January. New financing, which reflected further reduc tion in the month, totaled only slightly in excess of the low level of last October. The discounting of these bills by the accepting institutions, however, continued on a basis sufficiently liberal to absorb approximately 90 per cent of the current offerings. On the other hand, the pur chases of other banks’ acceptances aggregated less than for any other month since April 1929. Sales also declined and were considerably under the usual level for January. A slight increase in holdings was reported over December 31. New financing tended to expand during the first half of February over the corresponding weeks of January. TRANSACTIONS IN BANKERS’ ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Total value of bills accepted Purchases................................ Sales........................................ Holdings*............................... Liability for outstandings*. . Per Cent Change ii December 1931 -24.0 -29.1 -47.9 +3.8 ........... ........... ........... ........... ..... +2.8 January 1932 From January 1931 -45.9 -53.5 -46.1 -54.2 -32.4 *At end of month. The Chicago bill market was considerably more active during the four weeks ended February 10 than in the preceding period. Supplies, which averaged about twoVOLUMF. OF PAYMENT BY CHECK-Its DISTRICT 6IU1QN5 Of HOCCMg 'Ujaag.BgUAM.. The prevailing range of rates on customers’ commercial loans as reported by down-town banks in Chicago for the week ended February 15 was 4(4 to 5(4 per cent, as compared with 4(4 to 5 per cent in the corresponding week of January. The average rate earned on loans and discounts by the larger institutions in Chicago during the calendar month of January was 4.83 per cent, as VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT (Amounts in millions of dollars) Jan. 1932 •Chicago.................................... ............ $2,319 Detroit, Milwaukee, and Indianapolis 1,169 Per Cent of Increase or Decrease From Jan. 1931 Dec. 1931 -10.4 -33.0 +6.9 -11.8 Total four larger cities.......... ............ $3,488 32 smaller centers.................. ............ 623 -5.3 -5.9 -27.1 -29.2 Total 36 centers..................... -5.4 -27.4 Pafl»2 iioaninB conus Figures U9ed represent checks drawn on clearing-house banks, and are esti mates for calendar months based on weekly reports to this bank. Latest figures, January 1932. thirds greater than from December 10 to January 13, re flected an increase of more than 130 per cent in purchases from local banks and a reduction of 16 per cent in re ceipts from Eastern offices. Decreased demand from outof-town banks and others was practically offset by heavier buying on the part of Chicago banks. In addition, there was a marked gain in shipments to Eastern markets. Both supply and demand, however, remained considerably less than last year. Dealer holdings of bankers’ accept ances declined approximately 27 per cent from January 13, but totaled 60 per cent larger than on the correspond ing date of 1931. Rates remained practically unchanged from a month earlier, the closing quotations for February 10 being 2V$ per cent for 30-day offerings and 3% per cent for maturities of 180 days. AVERAGE WEEKLY TRANSACTIONS OF REPORTING DEALERS IN THE CHICAGO BILL MARKET January 14, 1932 to February 10, 1932 Per Cent Change in U D5C- 10' 1931 +131.6 7° jAN- 14Bills purchased... Comparison With Period From 1932 JAN- 1S. 1931 -13 TO F9eb. 11, 1931 Bills sold............... -3.7 -820 Holdings*.......... —26.9 +59i6 *At end of period. recovery, the average price of twenty leading stocks* amounted to $34.99, approximately only 3 dollars below the corresponding day in January. * Chicago Journal of Commerce. Agricultural Products The following tabulation shows more live stock on farms at the beginning of 1932 than a year previous. In the Seventh Federal Reserve district, however, a compila tion of the December 1 reports sent to this bank by county agents, reflected a reduction in the supply of hogs and beef cattle from the preceding year. LIVE STOCK ON FARMS—JANUARY 1 Estimates of the United States Bureau of Agricultural Economics (In thousands) 1932 Swine, including Pigs.......... Milk Cows and Heifers*.. . Other Cattle and Calves... Lambs and Sheep................ Horses and Colts................. Mules and Mule Colts....... Five States Including Seventh District Number Value 21,509 $140,525 6,306 261,475 6,282 128,190 4,854 17,710 3,101 210,571 306 21,505 United States Number Value 59,511 $365,133 24,379 965,758 38,028 696,464 53,912 183,255 12,679 676,698 5,082 308,440 1931 Security Markets An uncertain tone, marked by considerable fluctuations in both prices and demand, has been the prevailing feature of the Chicago bond market since the first of the year. Demand for investment securities, though relatively low in both seasoned and new issues, seemingly ran in two directions during the past month; a fair amount of in quiries was recorded for extremely high grade public utility, municipal, railroad, and railroad equipment obli gations, while considerable new interest of a more specula tive character was evidenced in medium and low grade bonds, particularly in the railroad field. The strengthen ing of prices which began in December continued during the first part of January, but by the middle of the month the upward trend was reversed; however, there has been some tendency to eliminate the wide difference existing between the prices of high grade and medium grade bonds. New offerings during January were limited to certain utili ties and rails of the better qualities. The market still lacks any outstanding source of demand, although some individual investors are reported as taking advantage of the present low prices. Prices on the Chicago Stock Exchange fluctuated moderately during January. The first ten days in February witnessed a rather steady down ward trend, but by the middle of the month, after a slight LIVE STOCK SLAUGHTER (In thousands) Yards in Seventh District, January 1932.................................... Federally Inspected Slaughter, United States January 1932.................................... December 1931............................... January 1931.................................... Lambs and Shei Cattle Hogs 182 1,106 394 93 653 686 651 5,027 5,387 5,362 1,679 1,581 1,426 347 388 379 Calves AVERAGE PRICES OF LIVE STOCK >unds at Chicago) Week Ended Months Feb. 20 Jan. Dec. 1932 1932 1931 . . . $6.35 *6.35 Native Beef Steers (average)..................... *6.80 *7.25 Fat Cows and Heifers.................................... 4.45 4.65 4.30 Calves............................................................... 6.85 6.95 5.80 Hogs (bulk of sales)....................................... 3.90 4.00 4.25 Yearling Sheep................................................ 4.85 4.25 4.10 Lambs............................................................... 6.05 5.95 5.10 of Jan. 1931 ;$9.60 6.40 9.30 7.65 6.85 8.05 Swine, including Pigs.......... Milk Cows and Heifers*. . . Other Cattle and Calves.. . Lambs and Sneep................ Horses and Colts................. Mules and Mule Colts........ 19,639 6,114 6,100 4,583 3,205 314 249,588 374,634 193,843 25,128 246,804 24,990 54,374 23,558 37,357 52,745 13,165 5,215 617,668 1,345,479 1,048,932 282,352 795,541 360,736 *Two years old and over. Grain Marketing The movement of wheat at primary centers continued small in January as compared with previous years, al though receipts exceeded those in December and were considerably larger than shipments, following two months in which withdrawals were the heavier. From last July 1 to the end of January total receipts at these markets were 54 million bushels lower than in the same period a year earlier. During this period exports of wheat and flour totaled about the same as in the corresponding seven months a year ago, and during the period the visible supply has been reduced from an excess over the same dates of the previous season of about 78 million bushels on July 1 to only 13 millions at the end of January. This indicates some increase in domestic consumption in the present season. Wheat futures averaged about the same during Janu ary as in December, but before the middle of February higher prices prevailed in response to reports of larger requirements for foreign wheat on the Continent, and the possibility that credit expansion might have an inflation ary effect on domestic price levels. Marketing of feed grains was also restricted in Janu ary, and total receipts of corn since November 1 and of oats since August 1 amounted to somewhat over half the volume in the preceding year. This, however, reflects the depressed condition of markets rather than available sup plies, and the Department of Agriculture reports that on January 1 the stocks of corn held on farms were 420 million bushels larger than at the beginning of 1931. Both cash and future prices of feed grains held steady during January with no improvement over December. Movement of Live Stock As was the case in November and December, hog mar ketings in the United States again failed in January to Pafle 3 show a normal rate of increase over the preceding month. Also, receipts of cattle at public stock yards decreased more than the usual amount from December, and the mar keting of calves declined to a level lower than for any other month since February 1929. Lamb receipts, on the other hand, gained more than the usual amount over the preceding period. All live stock, with the exception of lambs, was received in much smaller numbers during Jan uary than a year ago or than shown in the 1922-31 av erage for the month. Reshipments to feed lots were at a low level during January. Meat Packing Production at slaughtering establishments in the United States showed a decline—contrary to seasonal trend—of 4 per cent in January from December. Furthermore, the volume totaled 7 per cent smaller than a year ago and 4 per cent less than the 1922-31 average for the month. Payrolls at the close of the period reflected a reduction from December of 2 per cent in number of employes, but showed an increase of 12)^ per cent in hours worked and of 9J4 per cent in wage payments. The total value of sales billed to domestic and foreign customers was onehalf per cent less in January than a month earlier and declined 31^ per cent from the corresponding month of 1931. These recessions, however, were mainly due to low prices in the current year. Quotations for fresh hams, lamb, veal, and the cheaper cuts of beef advanced over the preceding month, but the prices of most packing house commodities were lower than in December. Inven tories increased seasonally on February 1 over the begin ning of January, though remaining below last year and the average. Shipments for export fell off from December. Foreign demand for lard continued fair to good. Trade in meats, on the other hand, remained on a restricted basis. Inven tories of American products in European countries (in cluding the stocks in transit) were slightly reduced on February 1 from the beginning of January. Foreign mar ket quotations for American lard were fully up to the United States parity; meat prices remained at a discount. EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT Week Report Industrial Group of January IS, 1932 ing Wage Earn Firms ers No. No. Earn ings (000 Omitted) * Changes From December 15 Wage Earn Earn ings ers % % 748 150 161 350 145 295 101 75 8 316 142,735 183,866 28,851 51,771 7,850 24,452 13,863 14,975 5,866 42,630 2,814 4,497 474 1,200 153 345 338 217 142 1,121 -4.1 +7.4 -2.5 -5.0 -2.7 -5.7 -1.3 -1.5 -1.4 -0.3 -5.0 +0.8 -4.8 -5.1 -8.9 -15.1 -4.0 +3.0 -4.7 -3.8 Groups---- 2,349 516,859 11,301 +0.2 -2.9 Merchandising*.................. Public Utilities................... Coal Mining....................... Construction...................... 109 68 17 163 20.981 79,834 5,207 5,766 539 2,542 98 138 -6.3 -0.9 +1.5 -15.7 -5.9 -3.0 +1.5 -17.0 Vehicles.............................. Textiles and Products.... Food and Products........... Stone, Clay, and Glass---Wood Products.................. Chemical Products............ Leather Products.............. Rubber Products*.............. Paper and Printing........... Total Mfg., 10 Total Non-Mfg., 4 Groups. 357 111,788 3,317 -2.7 -4.0 Total, 14 Groups................ 2,706 628,647 14.618 -0.4 -3.1 1 Other than Vehicles. * Michigan and Wisconsin. Page 4 • Illinois and Wisconsin. Dairy Products Creamery butter manufacturing in the Seventh Federal Reserve district showed little change in volume during January from December, but aggregated 11)4 per cent greater than a year ago, while the sales tonnage decreased 12)4 per cent from a month earlier but increased 2)4 per cent over the corresponding month of 1931. United States production of the commodity appears to have de clined in January from the preceding month, although it remained in excess of last year. Inventories were at a low level on February 1. Prices declined from December. The production of American cheese in Wisconsin in creased 13)4 per cent during the four weeks ended Janu ary 30 over the preceding period, and was on a level with a year previous. Merchandising of the commodity from primary centers of that state exceeded current manufac ture by 40 per cent, but was 9 per cent less than in the same period of 1931. February 1 inventories of cheese in the United States were seasonally reduced from the be ginning of January, and continued below last year and the 1927-31 average. Prices eased. Industrial Employment Conditions Reduced employment and payrolls were reported by most groups of industry in the Seventh district for Janu ary IS as compared with a month earlier. Declines were partly seasonal and somewhat less than in recent years. Manufacturing industry cancelled most of the Decem ber gain in total wage payments, but added fractionally to the number of employes. The automobile industry again proved an exception to the trend, causing the third successive monthly increase in employment in the vehicles group, accompanied by a slightly larger payroll. One other group, leather products, increased wage payments, owing to longer hours at Illinois and Michigan plants, but fewer men were employed than in December. The remaining eight groups declined in both employment and payrolls. Losses in employment ranged from less than one per cent to nearly 6 per cent, and payroll reductions were somewhat larger. The sharpest losses occurred in wood products, as furniture manufacturing and millwork were curtailed. Most industries of the food, metal, and stone-clay-glass products groups were less active, and de clines in the textiles group were effected largely by the clothing industry, and in paper and printing by newspa pers and periodicals. Non-manufacturing activity continued to contract sea sonally, as three groups showed smaller employment and payrolls than in December. All types of construction were less active; department stores and wholesale estab lishments reduced their forces after Christmas; and the utilities lost moderately. Coal mining gained slightly in both number of men and their earnings. The Department of Agriculture reports a sharp increase in the surplus of farm labor and an accompanying decline in wage rates. For the entire country the index of wages on January 1 was slightly below the 1910-14 average, and the supply of labor, in per cent of demand, was the high est in the records going back to 1918. In the North Central states wage rates have declined more than IS per cent since October and about 25 per cent from a year earlier, while the ratio of supply to demand rose to 214 on January 1 from 187 last October and 170 at the be ginning of 1931. Manufacturing Automobile Production and Distribution Automobile production in January, though increasing slightly over the preceding month, failed to show the seasonal expansion of recent years. Passenger car output for the month of 98,706, represented a gain of only 2 per cent over December, which compares with an increase of 76 per cent in the average for the preceding five years. The total was 28 per cent below January a year ago. Trucks produced numbered 20,541 in January, or 13 per cent smaller than a month previous and 39 per cent under January last year. New cars sold by representative wholesale distributors in the Middle West increased moderately in number dur ing January over December, although the aggregate value declined. Sales by retail dealers likewise expanded, as is usual during the period, but both wholesale and retail dis tribution were considerably below the level of a year ago. Used car sales totaled about the same as a month pre vious and were much smaller than in January last year. Stocks of both new and used cars were heavier at the end of January than at the close of 1931, though remaining at a low level. Deferred payment sales constituted 51 per cent of the total retail sales by twenty-seven dealers in January, which compares with 57 per cent in December and with 48 per cent for January 1931. Iron and Steel Products Little acceleration was noted between the middle of January and the fifteenth of February in steel mill opera tions of the Chicago district, ingot output averaging 25 or 26 pier cent of capacity during the period, as against a rate of 50 per cent a year ago. Sales increased some what in the first month of the year, but specifications did not expand noticeably. Pig iron output, following two months of slight gain, again declined a little in January. Price levels, which have been to some extent on a nominal basis in recent weeks, have remained fairly stable. Steel and malleable casting shipments, which usually expand in the first month of the year, failed to do so this January, those of steel castings falling off 19 per cent in tonnage from December, while those of malleable cast ings totaled 6 per cent below a month previous. Produc tion was reduced in both types of foundries, and orders booked declined considerably. As compared with last Jan uary, activity was decidedly less this year. New orders booked during January by reporting stove and furnace manufacturers declined slightly from the preceding month, MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in January 1932 from Previous Months January 1931 1931 Furniture The January volume of orders booked by Seventh dis trict furniture manufacturers reporting to this bank ex panded 55 per cent over December, which increase was about two-thirds the average gain for the month in the five-year period, 1927-1931. The current aggregate was a little less than one-third the average January volume during the five-year period. A decline of 26 per cent in shipments from the preceding month was for the most part seasonal, and constituted a factor in the 71 per cent increase in unfilled orders outstanding, which at the close of January equaled 84 per cent of current orders—ap proximately 8 points higher than the month previous. There was considerable let-down in the rate of opera tions maintained during the month, the ratio of 35 per cent of capacity comparing with 44 per cent during De cember and 50 per cent in January 1931. Orders booked and unfilled orders outstanding, as compared with Janu ary a year ago, were less by 47 and 45 per cent, respec tively, and shipments by 36 per cent. Shoe Manufacturing, Tanning, On Hand January 30— Number................................. Used Cars Salable on Hand— + 11.7 -2.9 Building Material, Construction Work Though favorable weather prevailed generally during January, the demand for building materials was unsatis factory, as most dealers reported no improvement in local credit and financial conditions conducive to construction and repair work. Retail building material sales were 17 per cent under December, as compared with a 19 per cent decline last January and a 9per cent average January loss in the past five years. Relative to a year ago, January sales were 21 per cent lower, which compares with an average recession in 1931 of 30 per cent from 1930. Again, lumber sales figured largely in the decline, and the total Class of Trade Companies Included Lumber Sales in Board Feet.... - 31.8 -49.2 -40.1 -25.3 13 11 11 -17.4 -22.9 -8.8 -20.5 -33.1 -13.6 -11.8 209 83 86 202 -9.6 Ratio of accounts outstanding1 to dollar sales during month +0.4 -7.3 Number of Firms or Yards -13.8 -13.1 -10.3 Retail Building Materials: -31.0 -35.9 Jan. 1931 Wholesale Lumber: 25.3 +17.5 +9.0 +3.5 +1.0 Jan. 1932; Per Cent Change From Dec. 1931 - +22.9 +10.7 Hides Shoe manufacturing operations in the Seventh Federal Reserve district decreased 2 per cent in January from December and were one-third less than the 1923-31 aver age for the month, though totaling 2 per cent greater than a year ago. Tanneries reported leather production and sales as less than in either the preceding month or last January.. Prices showed little change from December. At Chicago, the hide and calf skin markets remained inactive until early in February when trading was re sumed in fairly large volume. Prices declined. New Cars W holesale— Retail— and LUMBER AND BUILDING MATERIALS TRADE Per Cent Change From December while shipments were, seasonally, greatly reduced; both items totaled well below a year ago. Wholesale Trade........................ Jan. 1932 Dec. 1931 Jan. 1931 222.4 223.9 145.2 488.9 JEnd of Month. Page 5 was sustained somewhat by sales of coal which are in cluded in some reports. Prices were generally stable, at a somewhat lower level than in December, with declines reported from only a few localities. Collections were un satisfactory, the ratio of accounts to dollar sales record ing the third consecutive monthly increase. Stocks re mained practically unchanged from the end of December. A similar decline occurred in wholesale lumber busi ness, dollar sales falling off 14 per cent from December, which compares with smaller January declines in each of the previous five years except 1930 when a considerable gain was recorded. The decline in board feet was smaller than in dollar sales for identical firms, indicating that further concessions were made in prices. A slight improvement in the accounts-sales ratio follows rises in the two preceding months. Stocks were reduced from the end of December, and totaled no greater than a year ago. Cement production in the Middle West declined 33 per cent in 1931 from 1930, and shipments, which ex ceeded production by 8 per cent, were 24 per cent smaller, so that stocks at the end of December were 26 per cent lower than a year previous. Distribution for the year in the five states including this district was 30 per cent under 1930. In January, the usual increase in stocks occurred, as shipments declined more sharply than did production from the volume of December. Building Construction The first month of 1932 witnessed further declines in building contracts awarded in the Seventh Federal Re serve district. Total contracts, dropping 2J4 million dol lars in volume from a month previous, reached a new low point on our records (1919). Residential contracts dur ing January amounted to only 12 per cent of the total volume and likewise dropped to a new low mark. BUILDING CONTRACTS AWARDED* SEVENTH FEDERAL RESERVE DISTRICT Total Total Contracts Residential Contracts *12,628,295 -17% -60% $1,466,537 —44|£ Change from January 1931......................... ♦Data furnished by F. W. Dodge Corporation. Building permits issued in 104 cities of the Seventh district during January registered declines in estimated cost of proposed work amounting to 70 per cent from De cember and 86 per cent from January 1931. The number of permits issued in these same cities showed declines in the above comparisons of 11 and 30 per cent, respectively. The downward trend exhibited by the district in the esti mated cost of proposed construction, prevailed individ ually in a large majority of the cities, including all the larger ones with one exception—Des Moines, which re corded a gain of one per cent over a year ago. Merchandising Following the improvement noted during December in wholesale distribution of commodities, trade again fell off in January—seasonally, to some extent. The declines recorded in all reporting lines of wholesale trade in this district were larger than usual, however, and in some in stances compared with an increase in the average for the previous nine years. The wholesale grocery trade de clined 11 per cent from the preceding month, drugs 8 per cent, electrical supplies 37 per cent, dry goods 23 per cent, and shoes 32 per cent. Comparisons with a year ago were more unfavorable than for some time in the grocery, drug, and shoe groups and in the other lines were more so than a month previous. Stocks of hard ware, dry goods, and drugs expanded slightly between the close of 1931 and the end of January. Ratios of accounts outstanding to net sales during the month rose over those for December and were higher than a year ago in all groups except shoes. The recession of 56 per cent from December in Janu ary department store sales was somewhat greater than seasonal, comparing with 50 per cent in the ten-year av erage for the period. As against last January, a decline of 23J'2 per cent was shown in the total for reporting stores, which is larger than has been previously recorded in the year-ago comparison, although the one less trading day in January this year had some effect upon the size of the decrease, daily average sales being 20y2 per cent smaller. In the larger cities of the district, such as Chi cago, Detroit, Indianapolis, and Milwaukee, declines in both the monthly and yearly comparisons followed rather closely those for the district as a whole. Stocks were re duced 9 per cent between December 31 and the end of January, and totaled 16 per cent less than on January 31 last year. In other phases of retail trade, also, January sales de clined sharply in conformance to seasonal trends. The dollar volume of shoes sold by reporting dealers and de partment stores was 53 per cent less than a month pre vious and totaled 20 per cent below that of January 1931. Sales of furniture and house furnishings by dealers and department stores declined 36 per cent in January from December and were 27 per cent below a year ago; install ment sales by dealers fell off 33 per cent in the monthly comparison and declined 27 per cent from last January. The decrease in sales of seventeen chains covering such lines as groceries, drugs, five-and-ten-cent stores, shoes, furniture, cigars, musical instruments, and men’s clothing, totaled 45 per cent in January as compared with Decem ber, with the aggregate 11 per cent smaller than a year ago; practically all lines shared in these declines. DEPARTMENT STORE TRADE IN JANUARY 1932 WHOLESALE TRADE IN JANUARY 1932 Commodity Groceries............. Hardware............ Dry Goods.......... Drugs.................. Shoes................... Electrical Supplies.......... Net Sales Stocks Accts. OUTSTAND. tions Ratio of Accts. OutstandING TO Net Sales -26.6 -31.2 -28.9 -23.0 -39.8 -26.2 -13.4 -23.9 -11.7 -23.9 -12.0 -8.2 -25.0 +4.6 -37.5 -27.9 -32.9 -28.3 -19.4 -25.0 112.0 455.3 393.1 214.3 383.5 -41.4 -26.7 -29.6 -36.3 210.8 Per Cent Change From Same Month Last Year Page 6 Collec Locality Per Cent Change January 1932 From January 1931 Ratio of January Collections to Accounts Outstanding December 31 Net Sales Stocks End of Month 1932 1931 Chicago....... Detroit........ Indianapolis . Milwaukee. . Other Cities. -25.0 -22.4 -21.0 -20.6 -26.9 -17.1 -25.7 -3.1 -9.1 -11.5 31.1 35.2 41.2 44.4 34.3 38.3 37.5 43.5 46.5 38.5 7 th District.. -23.5 -15.7 36.1 39.6 MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the month indicated, othermse indicated. Where figures for latest month shown are partly estimated on basis month.. Data refer to the Seventh Federal Reserve district unless otherwise noted.) No. of Jan. Dec. Nov. Oct. Sept. Meat Packing—(U. S.)— 1932 1931 1931 1931 1931 Sales (in dollars).................................. 63 58 58 65 79 74 Casting? Foundries— Shipments: Steel—In Dollars............................ 15 17 19 18 20 21 ns 11 iPTOTnSN„........................ 15 16 20 19 20 19 Malleable—In Dollars................... 22 16 16 14 16 17 „„ In Tons....................... 22 27 29 22 25 28 dtoves and Furnaces— Shipments (in dollars).... ................... 11 32 58 87 143 111 Furniture— Orders’(in dollars).............................. 22 36 23 33 37 43 Shipments (in dollars)........................ 22 23 30 35 42 45 Flour— Production (in bbls.).......................... 25 98 98 105 125 123 Output of Butter by Creameries— Production........................................... 67 92 91 88 100 95 iSL’l i * a............................ 69 91 104 90 102 104 Wholesale Trade— Net Sales (in dollars): Groceries.......................................... 31 62 69 69 78 87 Hardware......................................... 14 29 45 47 57 55 Dry Goods....................................... 9 30 39 43 49 53 gfugs................................................ 13 66 72 70 79 78 Retail Trade (Dept. Stores)—■ ' 2 39 44 58 60 Net Sales (in dollars): Chicago............................................. 26 59 127 74 84 73 Detroit........................................... 5 65 149 92 95 123 Indianapolis..................................... 5 62 134 80 90 89 Milwaukee....................................... 5 68 141 92 102 89 Other Cities..................................... 50 52 119 77 86 72 Seventh District.............................. 91 60 131 80 89 85 Automobile Production (U. S.)— Passenger Cars.................................... 34 33 17 20 37 Tr»clt?y.- V................ ;................... 55 63 52 58 83 Building Construction— Contracts Awarded (in dollars): Residential....................................... 5 9 12 17 18 Total................................................. 18 22 31 27 49 Iron and Steel—■ Pig Iron Production:* Illinois and Indiana........................ 41 41 41 41 43 United States.................................. 32 32 38 39 40 Steel Ingot Production—(U. S,)*. . . 42 38 48 44 45 Unfilled Orders U. S. Steel Corp___ 56 57 61 65 66 using the monthly average for 1923-1924-1925 as a base, unless of returns received to date, revisions will be given the following Aug. 1931 Jan. 1931 Dec. 1930 Nov. 1930 84 85 89 35 34 34 31 46 31 30 28 41 32 30 25 37 42 42 32 46 46 48 33 49 79 50 42 37 68 23 22 21 Oct. 1930 Sept. 1930 Aug. 1930 98 57 62 32 47 118 200 150 36 41 43 47 49 61 81 77 79 130 102 101 105 119 123 114 117 85 91 83 94 78 94 94 96 97 95 115 85 50 41 76 55 84 42 42 86 63 55 84 72 104 103 75 71 95 84 99 38 87 59 51 83 53 61 78 67 73 70 67 79 87 80 85 72 80 165 184 154 167 146 165 53 84 47 89 41 89 27 64 22 20 46 51 44 42 50 72 56 72 55 57 83 66 88 68 87 99 88 71 102 93 110 94 150 114 107 61 67 111 66 58 88 81 110 105 77 97 74 80 81 81 34 95 39 108 60 117 63 107 36 58 42 77 88 44 37 76 63 79 71 75 73 82 77 82 72 91 83 121 97 111 96 104 66 76 118 98 116 103 86 86 88 75 ♦Average daily production. Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS INDUSTRIAL PRODUCTION (By the Federal Reserve Board) IN January, production of manufactures increased by about the usual seasonal amount, while output of minerals and value of building contracts awarded con tinued to decline. Wholesale prices declined further during January and early February, but more recently prices of certain leading commodities showed an advance. Production Index number of industrial production, adjusted for seasonal variation (1923-25 average =100). BUIL DING CONTf'(ACTS AWA RDED -— Total __\ \ K (evidential S'— \ Indexes based on 3-month moving averages of F. W. Dodge data for 37 Eastern States, adjusted for seasonal variation (1923-25 average =100). and Employment Volume of industrial production, which includes both manufactures and minerals, increased from December to January by an amount somewhat smaller than is usual at this time of year, and the Board’s seasonally adjusted index declined from 71 per cent of the 1923-1925 average to 70 per cent. In the steel industry, there was a seasonal increase in activity during January, followed by a slight decline during the first three weeks of February. Production of automobiles, which usually increases considerably at this season, showed little change in January, following an increase in December. Activity at textile mills increased by more than the usual seasonal amount, and at shoe factories there was a seasonal increase in production. Output of coal and petroleum was substantially reduced. Volume of factory employment declined by more than the usual seasonal amount between the middle of December and the middle of January. Number employed at foundries, carbuilding shops, clothing factories, and establishments producing building materials declined substantially, while employment in the tobacco industry decreased less than is usual at this season, and employment in the woolen goods industry increased, contrary to seasonal tendency. Total value of building contracts awarded in 37 Eastern states, as reported by the F. W. Dodge Corporation, declined sharply in January, and for the three months’ period ending in that month was about one-half of the amount awarded in the corresponding period a year ago. Approximately one-fourth of the decrease was in residential building, and three-fourths in other types of construction. Distribution DEPARTMENT STORE SALES Total freight carloadings decreased in January, contrary to seasonal tendency, reflecting chiefly smaller shipments of merchandise, miscellaneous freight, and coal. Department store sales declined by about the usual seasonal amount. Wholesale Prices The general level of wholesale commodity prices, as measured by the index of the Bureau of Labor Statistics, declined 2 per cent further from December to January, although prices of some important commodities, such as wheat, showed little change and the price of cotton advanced. During early February, prices of certain leading commodities including grains and cotton declined, but later in the month there was some advance in the prices of these commodities. mam With Seasonal Adjustment ----- Without Seasonal Adjustment Indexes of daily average value of sales, with adjustment for seasonal variation and without adjustment for seasonal variation (1923-25 average =100). MEMBER BANK CREDIT All Other Monthly averages of weekly figures for reporting member banks in leading cities. Latest figures, averages of first three weeks in February 1932. Page 8 Bank Credit Volume of reserve bank credit outstanding declined in January and the first half of February. This decrease has reflected a return flow of currency from circulation, which has been smaller than usual this year, together with a continued reduction in member bank reserve balances, offset in part by a demand for reserve bank credit caused by an outward movement of gold amounting to $100,000,000 since the turn of the year. A decline in money in circulation after the first few days in February reflected some return of hoarded currency accom panying a decrease in bank failures. At member banks in leading cities volume of credit continued to decline during January and the first half of February. Between January 13 and February 17, total loans and investments decreased by $550,000,000, representing declines in loans on securities, in other loans, and in investments. Deposits of these banks also declined substantially during this period. Money rates in the open market showed little change. On February 26, the discount rate of the Federal Reserve Bank of New York was reduced from 354 to 3 per cent, and buying rates on bankers’ acceptances of short maturities were reduced from 254 to 254 per cent.
@FedFRASER