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Business Conditions Reserve Seventh restrict FEDERAL Eugene M. Stevens, Chairman of the Board and Federal Reserve Agent Cuftobd S. Young, Asst. Federal Reserve Agent Volume 17, No. 2 George A. Prcgb, Asst. Federal Reserve Agent Harris G. Pett, Manager Division of Research and Statistics MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICA60 January 31, 1934 cheese totaled smaller in the comparison. The December movement of grains continued below average, although HE year 1933 closed with industrial and trade activ that of wheat improved over recent months. ity in the Seventh Federal Reserve district at levels Favorable trends were recorded during December in the well above those of December 1932, despite some seasonal merchandising of goods. The wholesale grocery, hard curtailment in manufacturing. In many phases the volume ware, and dry goods trades showed recessions from No of business for the year as a whole exceeded that for the vember, but the declines were less than seasonal, while the year 1932, the expansion which began in April and May gains in wholesale drugs and electrical supplies were and continued throughout the remainder of the year— greater than usual for December. Department store trade though at a somewhat slower rate in the later months—• expanded more than seasonally in the period, as did the being sufficient to offset the extreme dullness prevailing in retail shoe and furniture trades, and the increase in chain the early months of 1933. In merchandising groups, this store trade was heavy. With one exception—the whole last December was an especially favorable month, as in sale grocery trade—all reporting lines had larger Decem creased purchasing power was reflected in a greater volume ber sales than in the corresponding month of 1932. Heavier investments by reporting member banks in the of buying. Industrial groups to show some slowing-down in activity district effected a gain in their total loans and invest in December included steel casting foundries, the shoe in ments on January 17 this year over a month and a year dustry, the manufacture of furniture, and the movement previous. Demand deposits in these banks were substan of building materials. The production of steel was cur tially larger in the comparisons, though time deposits de tailed somewhat after the beginning of this year, but was clined from December 13 and about equaled those of a well maintained until the close of 1933. Although output year ago. Dealer sales of commercial paper and trans of automobiles expanded moderately in December over actions in bankers’ acceptances of reporting banks totaled the preceding month, the gain was not so large as in 1931 smaller in December than in the preceding month. and 1932. Building construction gained in December Credit Conditions and Money Rates 1933, the increase representing the fourth consecutive monthly gain. Employment and payrolls rose between the Total credit extended by the Federal Reserve Bank of middle of November and December 15, and were well Chicago decreased from $455,466,000 to $453,050,000 above a year previous at the same time. during the five weeks ended January 17. The decrease Both the production and sale of meat-packing products resulted mainly from a decline in credit extended to the declined in December. On the other hand, the volume of Seventh district, the latter effected principally through butter produced and sold increased, and the manufacture smaller discounts for member banks, together with a and distribution of Wisconsin cheese gained over the pre minor decline in reserve bank float. An outflow of more ceding month. Sales of all these commodities exceeded than 132 million dollars in commercial and private finan those of December 1932, but the production of butter and cial payments more than offset a gain of funds amounting to $98,000,000 through a continued excess of United FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS OF States Treasury disbursements over local collections. The CONDITION (Amounts in millions of dollars) withdrawal of funds from the district’s banking structure, Change From Dec. 13 Jan. 18 Jan. 17 however, was in part counteracted by lessened currency 1934 1933 1933 demand, over I6J2 millions being returned from circula Total Bills and Securities....................................... $454.8 $-1.8 $+182.7 Bills Discounted........................................................ 3.0 -3.2 -11.9 tion. Reflecting the purchase of stock in the Federal De Bills Bought................................................................ + 10.6 14.4 +1.4 U. S. Government Securities................................. 437.3 0 + 184.0 posit Insurance Corporation to the amount of $9,874,000 Total Reserves........................................................... -53.5 +3.9 890.3 (one-half of the amount subscribed for), unexpended cap Total Deposits........................................................... 520.7 -36.8 +95.1 Federal Reserve Notes in Circulation................ + 74.8 760.1 -8.5 ital funds of the Federal Reserve Bank of Chicago de Ratio of Total Reserves to Deposit and Federal Reserve Note Liabilities Combined................ -1.6* -10.3* 69.5 clined $10,035,000. Member bank reserve balances showed a decrease during the period, while non-member ♦Number of Points. General Summary T deposits registered a gain. Changes in the sources and uses of Seventh district banking reserves during the fiveweek period are presented in detail in the accompanying tabulation. Changes Between December 13, 19337and January 17, 1934 in Factors Affecting Use of Federal Reserve Bank Funds Seventh District (Amounts in thousands of dollars) Reserve bank credit extended........................................................................ —3,755 Commercial operations through inter-district settlements.................. —132,464 Treasury operations......................................................................................... +98,003 Total Supply.................................................................................... -38,216 Demand for currency...................................................................................... Member bank reserve balances.................................................................... Non-member deposits..................................................................................... Unexpended capital funds............................................................................. —16,704 —17,835 +6,358 —10,035 Total Demand................................................................................. —38,216 Member Bank Credit As shown on the table at the bottom of the page, total loans and investments of licensed reporting member banks recorded gains on January 17 over the corresponding re porting date in the preceding month and year. The tab ulation shows, further, that these increases reflect for the most part a markedly heavier volume of investments, rather than any increase in loans, with the exception of a small rise in the amount of “all other” (commercial) loans on January 17 this year as against January 18, 1933. Net demand deposits, it will be noted, increased 85 mil lions in the monthly comparison and 228 millions over January 18, 1933, while time deposits declined from a month previous and registered no change from last year. Rates on customers’ commercial loans during the week ended January 15 were reported by down-town Chicago banks as ranging from 3 to 4)4 per cent, as compared with 3 to 5 per cent in the corresponding week of December. The average rate earned on loans and discounts by banks in Chicago located in the down-town section was 3.15 per cent for the calendar month of December; in November the item had stood at 3.17 per cent, and in December 1932 an average rate of 4.21 was reported. In Detroit, customers’ commercial loans during the week ended Janu ary 15 carried rates quoted at 3)4 to 6 per cent, un changed from the week ended December 15. After having recorded a counter-to-seasonal expansion in the preceding month, dealer sales of commercial paper in the Middle West declined 40)4 per cent in December to a level 10 per cent under a year ago and 79)4 per cent below the 1923-32 average for the month. Moreover, sales for the calendar year 1933 aggregated 4)4 per cent less than in 1932. Because borrowing fell off to a slightly greater extent than did demand, selling rates firmed slightly over those of November; quotations for Decem ber ranged from 1)4 and 1)4 per cent for prime short term commercial paper to 1)4 and 2 per cent for obliga tions less well known or of longer maturity, with the bulk of transactions taking place at 1)4 per cent. The CONDITION OF LICENSED REPORTING MEMBER BANKS SEVENTH DISTRICT (Amounts in millions of dollars) Change From Dec. 13 Jan. 18 1933 1933 $+122 $+267 -54 -88 +10 -33 +209 +345 Total Loans and Investments.................. Loans on Securities..................................... All Other Loans............................................ Investments................................................... Jan. 17 1934 $1,617 342 409 866 Net Demand Deposits............................... Time Deposits.............................................. 1,310 453 +85 -8 +228 +0 Borrowings from Federal Reserve Bank 0 0 -1 Pa&e 2 lessened amount of financing likewise was reflected in a reduction in outstandings, the volume of which decreased 22)4 per cent from November 30, although it aggregated 32)4 per cent larger than on December 31, 1932. Both sales and quotations declined during the first half of Jan uary. During the four weeks ended January 10, the supply of acceptances in the Chicago bill market decreased 15)4 per cent from that of November 15 to December 13—for the most part the result of lighter receipts from Eastern cities, which more than offset a gain in local purchases. Open-market sales to out-of-town banks fell off almost 40 per cent, so that despite a small gain in sales to local banks and an increase in shipments to Eastern markets, distribution declined slightly more than supply, with the result that a small amount of bills was held in dealer port folios at the end of the period. Selling rates declined a little on the short-term maturities, and on January 10 ranged from )4 per cent for 30-day offerings to J4, per cent for those of six months. Seventh district financing by means of bankers’ accept ances instead of showing a seasonal gain, declined in De cember 1933 from November to a level 7 per cent below the 1923-32 average for the month. Purchases, however, were in about the usual volume for the last month of the year, although both the discounting of their bills at the originating banks and the purchasing of other banks’ ac ceptances recorded a contrary-to-seasonal recession from the relatively high peak of November. December sales, though 62 per cent smaller than average for the month, were in excess of any month since March and in such vol ume that there was no further increase in holdings, despite the counteracting influence of a lessened quantity of ma turities. Purchases for the calendar year 1933 aggregated approximately $100,000,000 heavier than in 1932, and most of these bills were held in bank portfolios until ma turity; sales totaled about $8,000,000 less than in the pre ceding year. New financing by means of acceptance cred its declined 43 per cent in the first half of January 1934 from the corresponding period of December. TRANSACTIONS IN BANKERS’ ACCEPTANCES AS^REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Per Cent Change in Dec. 1933 From November 1933 December 1932 Total value of bills accepted............................ —8.5 +51.3 Purchases (including own bills discounted) —15.7 +51.9 Holdings*...................................................... -11.0 +17.3 Liability for outstandings*............................... —0.8 +5.5 *At end of.’month. Security Markets A small volume of trade accompanied by only slight price fluctuations characterized the Chicago bond market during the final month of 1933. The amount of new offer ings during December continued small and well below the corresponding month a year ago. United States Govern ment obligations moved within a narrow range. The $950,000,000 of 2)4 per cent Treasury certificates offered VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT (Amounts in millions of dollars) Per Cent of Increase or Decrease From Dec. 1933 Nov. 1933 Dec. 1932 +2.9 Chicago................................................................. ... $1,997 +10.0 721 Detroit, Milwaukee, and Indianapolis. . . . ... +16.6 -12.3 . $2,718 Total four larger cities..................................... 446 33 smaller centers.............................................. ... Total 37 centers................................................. . . . $3,164 +6.2 + 13.1 +3.0 +7.1 +1.6 -6.2 early in the month was reported as quickly oversubscribed. In the second week in January, the market turned sharply upward, and prices of many obligations rose about 5 points. Prices on the Chicago Stock Exchange showed only minor fluctuations during December but moved definitely upward during the first half of January. The average price of twenty leading stocks* amounted to $29.73 on January 16, as compared with $26.81 on the corresponding date in December. •Chicago Journal of Commerce. Agricultural Products Grain Marketing The December wheat movement at primary markets was seasonally the heaviest so far in this crop year, as the de clines from the five-year average for the month, though considerable, were the smallest since June. Receipts were one per cent larger than in November and shipments fell off 32 per cent, as compared with five-year average losses of 19 and 44 per cent, respectively. Preliminary figures indicate that wheat and flour exports were nearly as heavy as the year-ago volume and almost equaled those of the preceding five months combined. Future prices netted about 3 cents loss in December and averaged 5 cents under November, but firmed considerably around the middle of January. A reduction of 11 million bushels in the U. S. visible supply during December brought the volume to the level of the five-year average. Farm stocks of wheat on January 1 were 79 million bushels under 1933 and 128 millions less than in 1932. These stocks were reduced, after October 1, by an amount 18 million bushels less than a year previous and 48 millions less than two years ago, reflecting the light marketings from this year’s short crop. The market movement of corn recorded a sizable counter-to-seasonal decline from November, as farmers availed themselves of Government loans on corn cribbed on the farm. Shipments of oats exceeded receipts for the first time in a year and a half, but both totals continued below average. Feed-grain prices were firmer than wheat in December and strengthened somewhat in the first half of January. Farm stocks of corn on January 1 were lower than either one or two years previous on the same date, VOLUME OF PAYMENT BY CHECK-SEVENTH DISTRICT frLUOMS OF d6lLars and oats stocks were the lowest in the Department of Agriculture records, going back to 1927. Movement of Live Stock Cattle, calf, and lamb marketings in the United States continued to decline about seasonally in December, but those of hogs gained less than the customary amount dur ing the month. Each class of live stock was received in much heavier volume than a year ago; however, with the exception of lambs which increased, all classes were below the 1923-32 average for the month. The movement to inspected slaughter (inclusive of animals that did not pass through public stock yards) deviated from these trends in two instances: the number of lambs increased over Novem ber, and that of calves gained in comparison with the tenyear average. Reshipments of feeder cattle and lambs remained in much less than seasonal volume, and were considerably under a year ago. Meat Packing Contrary to the usual tendency, the volume of produc tion at slaughtering establishments in the United States declined 3)4 per cent in December from November to a level 8)4 per cent below the average for the month, and was only 3 per cent heavier than a year ago. Payrolls at the close of the period continued to reflect a marked im provement over 1932 and showed a 2 )4 per cent gain in wage payments over a month earlier, but recorded a de cline from November of )4 per cent in number of employes and of 7)4 per cent in hours worked. The total value of sales billed to domestic and foreign customers declined no more than the usual amount in December—3)4 per cent from the preceding month—and was 18 per cent in excess of a year ago. The sales tonnage fell off from November, counter-to-seasonal trend, to a level 6)4 per cent below the 1923-32 average for the month, and totaled only one per cent greater than in December 1932. However, inven tories of these commodities in the United States increased less than seasonally on January 1 over the beginning of December. In the calendar year 1933, gains were shown over 1932 of 8 per cent in production, 4)4 per cent in sales tonnage, 3)4 per cent in aggregate value of sales billed, and of 46 per cent in inventories. December prices averaged higher than in the corresponding month of 1932 but were lower than in November. Shipments for export increased in the closing month of the year as compared with November. Demand for Amer ican lard averaged only fair in the United Kingdom and was relatively light on the Continent. The meat trade CHICAGO, DETRi JIT LIVE STOCK SLAUGHTER (In thousands) Yards in Seventh District. December 1933........................ . . Federally Inspected Slaughter, United States December 1933...................... . . November 1933...................... . . December 1932...................... . . Cattle 184 721 777 567 Hogs 1,056 4,530 4,501 4,584 Lambs and Sheep 348 88 1,390 1,356 1,264 402 424 327 AVERAGE PRICES OF LIVE STOCK Figures used represent checks drawn on clearing-house banks, and are esti mates for calendar months, based on weekly reports to this bank. * No data available. (Per hundred pounds at Chicago) Week Ended Months of Jan. 13 Dec. Nov. 1934 1933 1933 Native Beef Steers (average). . . $5.45 $5.20 $5.15 Fat Cows and Heifers.............. .. 4.50 4.10 4.05 Calves............................................ . . 5.50 4.95 4.80 Hogs (bulk of sales).................. .. 3.45 3.30 4.10 Yearling Sheep........................... .. 6.40 5.75 5.35 Lambs........................................... .. 7.85 7.10 6.65 Dec. 1932 $5.50 3.85 4.65 3.10 4.75 5.70 Page 3 remained on a restricted basis, m view ot a turther reduc tion in quotas. United States holdings of packing-house commodities in foreign countries (inclusive of stocks in transit) were further reduced on January 1. Continental quotations for American lard remained about on a parity with Chicago; those of the United Kingdom contin ued at a discount which was partially offset by process ing tax refunds on the lard exported from the United States. Prices of American hams in British markets re mained above the United States basis. Dairy Products Creameries experienced a moderate gain in activities during December 1933. The volume of butter production in the Seventh Federal Reserve district increased less than one per cent over November and was 6)4 per cent less than a year ago, though aggregating 1)4 per cent in ex cess of the 1923-32 average for the month. Furthermore, the sales tonnage gained 5)4 per cent in December over a month earlier—in line with the usual tendency—and was y2 per greater thanthe in the corresponding period ofand 1932. 8 cent per cent above 1923-32 seasonal average 13 United States production of the commodity showed a non-seasonal recession from November and was less than in December a year ago. In the calendar year 1933, Seventh district production of creamery butter approxi mated that for 1932, but the sales tonnage expanded 2 per cent. United States production of the commodity, on the other hand, appears to have been slightly larger than in the preceding year, though distribution lagged despite extensive Government purchases for .relief agencies. Jan uary 1 inventories of creamery butter in the United States, therefore, were about five times as great as holdings at the beginning of 1933 and were more than double the 1928-32 average for the date. Prices not only declined in December from November but were considerably under a year ago. Contrary-to-seasonal gains were recorded in the cheese industry during December. In the four weeks ended De cember 30, 1933, production of American cheese in Wis consin expanded 41 per cent over the preceding period; however, it was 23 per cent under the corresponding weeks of 1932 and 15)4 per cent below the 1923-28 av erage for the period. Distribution of the commodity from EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT Week of Dec. 15, 1933 Industrial Group Report Firms No. Wage Earners No. Metals and Products x.. . . Vehicles................................. Textiles and Products. . . . Food and Products............. Stone, Clay, and Glass.... Wood Products................... Chemical Products........... . Leather Products................ Rubber Products 2.............. Paper and Printing............. 831 187 150 413 150 289 120 82 8 339 167,580 187,098 31,293 77,780 7,393 25,547 18,569 18,322 7,100 52,445 Total Mfg., 10 Groups... . 2,569 Merchandising 8................... Public Utilities.................... Coal Mining...................... Construction........................ 283 80 18 311 Total Non-Mfg., 4 Groups. 692 Total, 14 Groups................. 3,261 ing Earnings (000 Omitted) $ Change From Nov. 15, 1933 Wage Earn Earn ers ings % % 3,142 3,789 449 1,581 133 354 387 298 131 1,112 -0.1 +15.1 -4.0 -4.2 -14.7 -7.8 +7.5 -1.9 +1.7 -0.1 +1.9 + 10.5 -9.2 +1.0 -10.3 -7.3 +5.5 +1.0 -2.8 +0.9 593,127 11,376 +3.0 +3.4 44,939 80,508 3,886 9,444 810 2,228 75 185 +8.2 -0.0 + 7.2 -11.2 +6.2 -2.4 +u.i -16.8 138,777 3,298 +1.8 -1.1 731,904 14,674 +2.8 +2.3 1 Other than Vehicles. 2 Michigan and Wisconsin. s Illinois and Wisconsin. Page 4 primary markets of the state not only increased 3 per cent over the corresponding weeks of November and 21)4 per cent in comparison with a year previous, but was 35 per cent in excess of current manufacture. Annual pro duction of the commodity in Wisconsin aggregated 4 per cent heavier in 1933 than in 1932, although sales were one per cent less. This tendency for sales to lag behind cur rent production in 1933 likewise is reflected in total stocks of cheese in the United States; January 1 inventories were approximately 23,000,000 pounds heavier than at the be ginning of the preceding year notwithstanding a reduction of more than a seasonal amount from December 1. De cember prices of the commodity were not only lower than in November but under a year ago. Industrial Employment Conditions Employment in the Seventh district at the close of 1933 was more than 20 per cent larger than a year earlier, and in about the same volume as in December 1931. A rise of 3 per cent over the preceding month was effected largely through the return to work at Michigan automobile fac tories of about 20,000 men laid off during November. Other manufacturing industries contributed to the rise in the monthly comparison, chemicals increasing employment 7)4 per cent and rubber goods industries, 1)4 per cent. Among the non-manufacturing groups, merchandising and coal mining followed the usual seasonal movement for December, with gains of 8 and 7 per cent, respectively, in their employment volumes. Practically no change in the number of workers was shown by metals, paper and print ing, and in public utility concerns. The largest losses re ported for the month—11 per cent in construction and 15 per cent in stone, clay, and glass industries—were of a seasonal character. Aggregate payrolls in December exceeded those of No vember by 2)4 per cent; all groups that showed a rise in employment, except rubber products, contributed to this gain. Four—metals, foods, leather, and paper and print ing—advanced wage payments without a corresponding gain in men employed, increases in wage rates as well as longer working hours being responsible for these advances. While total payrolls were more than 25 per cent higher than in December 1932, they were below those of Decem ber 1931 by about 15 per cent. Manufacturing Automobile Production and Distribution Owing to delays occurring in the production of new mod els, activity in the automobile industry expanded only moderately in volume during December, whereas in the two preceding years output had increased substantially during the period. Production of passenger automobiles this last December numbered 52,601, or 23 per cent above the low point for the year in November but 39 per cent under the volume of December 1932. Truck pro duction aggregated 30,145 vehicles in December, a gain of 55 per cent over the preceding month and of 42 per cent over a year ago. For the entire year of 1933, the manufacture of passenger automobiles in the United States totaled 1,602,332, which number is more than 40 per cent above that for the year 1932, while output of trucks, numbering 352,498, exceeded that of a year pre vious by 50 per cent. Lack of new models likewise accounted for the heavy recessions from November shown during December in mid west distribution of automobiles. Sales at retail and wholesale moderately exceeded in aggregate number those for December 1932, but the number of used cars sold gained more markedly in the comparison. It will be noted in the table that both wholesale and retail distribution for the year as a whole were considerably in excess of the year 1932, while stocks carried averaged much lighter than in that year. December deferred payment sales of dealers reporting the item, amounted to S3 per cent of their total sales for the month, representing a rather sharp rise from the 44 per cent reported by the same dealers for Novem ber and comparing with only 47 per cent for December of 1932. Iron and Steel Products With Chicago district steel production in the last weeks of 1933 at a level considerably above the low point of the same period in 1932, there was closed a year of marked improvement in the industry over the unfavorable condi tions prevailing a year previous. Sharp acceleration in activity during May, June, and July of 1933 effected a sufficient gain in production volume that notwithstanding some later slowing-down, the aggregate for the entire year was substantially larger than in 1932. At the beginning of this year, some decline in output took place, steel ingot production dropping from 40 per cent of capacity at the close of December to only 29 per cent in the middle of January. However, producers report a greatly improved outlook for the early months of this year in contrast to the unfavorable situation at the same time last year. Fin ished steel prices have remained firm, and those of scrap iron and steel have advanced steadily in recent weeks. Activity of steel casting foundries of the Seventh district showed a sharp decline in December, orders booked amounting to slightly more than one-half of the Novem ber volume, shipments falling off 8 per cent, and produc tion being lower by 20 per cent. Despite these curtail ments, the general level of activity in the closing month of 1933 was substantially higher than at the end of 1932, the excess as measured in tonnage units totaling 29 per cent in orders booked, 85 per cent in shipments, and 75 per cent in production. At malleable casting foundries, the volume of orders booked was 10 per cent and the ton nage shipped one per cent larger in December than in No vember. Production, however, slowed down, dropping 12 per cent below the figure of the preceding month. As MIDWEST DISTRIBUTION OF AUTOMOBILES Dec. 1933 Per Cent Change From Nov. 1933 Dec. 1932 Calendar Year 1933 Change From Year 1932 Nov. 1933 Dec. 1932 Shoe Manufacturing, Tanning, and Hides Shoe manufacturers of the Seventh district reported a somewhat greater than seasonal decline in production dur ing December, a loss of 16per cent from November com paring with a decrease of 11 per cent in the 1923-32 av erage for the period. Production throughout the greater part of 1933 was heavier than in 1932, although it showed wide variations from a favorable margin of 25 per cent at Year 1932 Dec. 1933: Per Cent Change From Nov. 1933 Dec. 1932 Number of Firms or Yards -22.1 -33.7 -10.3 +61.5 +27.3 +50.6 13 11 12 Wholesale Lumber: +10.1 + 11.1 +51.8 +23.1 16 16 11 11 11 11 -52.4 -48.0 On Hand End of Mon th— +9.0 -11.0 +37.3 57 36 36 36 36 36 36 36 36 -41.6 -54.3 Used Cars Number Sold......... Salable on Hand— Although the 6 per cent recession from November in December orders booked by furniture manufacturers re porting to this bank continued a decline in the month-tomonth comparison unbroken since July, the current vol ume, nevertheless, was greater than in December a year ago, the gain amounting to 23 per cent. Shipments also were considerably in excess of those a year ago—by 37 per cent—despite a drop of 14 per cent from the pre ceding month. Unfilled orders outstanding on December 30 amounted to 71 per cent of current orders, a decline of 7 points from the ratio of a month previous—recession in this item haying been continuous beginning with Sep tember as shipments have exceeded each month current orders. The rate of operations during December averaged 47 per cent of capacity, 8 points under that of November and 5 points above the December 1932 ratio. For the entire year 1933, orders booked showed an increase over 1932 of 19 per cent, and shipments one of 13 per cent. These gains were effected despite the continuance through April 1933 of the declining trend in the yearly comparison operative since November 1929. Beginning with May, with a single exception in the volume of orders booked! the comparison with a year previous has shown each month a marked gain. As compared with the six-year average, 1927-1932, orders booked in 1933 were 61 per cent and shipments 63 per cent lower. Class of Trade -24.9 -25.7 Retail— Number Sold......... Furniture LUMBER AND BUILDING MATERIALS TRADE Companies Included New Cars Wholesale— Number Sold. . compared with the tonnage figures for December 1932, malleable castings showed gains of 79 per cent in orders! 99 per cent in shipments, and 78 per cent in production.’ In the manufacture of stoves and furnaces further de creases of 53 per cent in the volume of orders accepted, 28 per cent in shipments and 32 per cent in mouldingroom operations, were in line with the usual seasonal cur tailment at the close of the year. However, operations were almost twice as large as those of a year ago, while shipments were about 70 per cent and orders 30 per cent heavier in the same comparison. -26.7 Value...................... -11.1 ’“Average end of month. +27.3 +23.8 + 11.0 +10.6 57 36 36 —34.6* 57 57 36 36 36 36 Retail Building Materials: Lumber Sales in Board Feet.... Accounts Outstanding 1................ Wholesale Trade............. Retail Trade................... 1 End of Month. -13.1 +14.3 110 -18.3 +48.8 34 -21.9 +22.7 27 -8.2 -2.7 106 Ratio of Accounts Outstanding * to Dollar Sales during month Dec. 1933 Nov. 1933 Dec. 1932 247.2 377.4 265.2 358.0 436 1 ---------------- -------- Page 5 the beginning of the year to a loss of 7 per cent at the close. For the year as a whole, output exceeded that of 1932 by approximately 25 per cent. In the tanning in dustry, production and sales of leather registered slight declines in December from the preceding month and prices were less firm. The movement of packer green hides m the Chicago market during the month approximated that of November, with prices at the close of the month about one cent lower than at the beginning. In the early weeks of January, however, sales were made at quotations onehalf cent above those prevailing at the close of December. Building Materials, Construction Work Favorable levels relative to a year ago were maintained in most Seventh district building materials lines during December, despite sizable declines from a month previous. Wholesale lumber sales in dollars suffered a sharp loss from November, which, however, about equaled the dedine in December 1932, and consequently did not greatly alter the improvement shown in the year-ago comparison for November. The expansion in the value of sales—due to increases both in volume of distribution and in prices— which began early in 1933, resulted in a more than 40 per cent gain for the full year over the preceding twelve months and in an increase of 70 per cent for the last six months against the second half of 1932. Aggregate sales of reporting retail yards for December also remained above a year previous, as was the case in most of the last half year, with dollar sales of lumber showing the largest gain in any recent month. Declines from No vember were somewhat less than in the same period of 1932. While a fair improvement was recorded in the last six months of 1933 over the corresponding months of 1932, it was insufficient to offset the deficiency of the first half year, with a resultant decline for the year of less than 5 per cent. , . j . , Distribution of both cement and clay products varied locally with the progress of federal and other construction projects, but generally equaled or exceeded the volume of a year ago. Prices of these products and of lumber at both wholesale and retail continued firm in December at considerably above the low levels of last winter. Building Construction December marked the fourth consecutive month to show a gain in building activity of the Seventh Federal Reserve district. The total volume of contracts awarded, amount ing to over 33 million dollars, was the largest for any month since September 1931. Residential contracts con tinued to decline and comprised less than 3 per cent of the total. The increase in building activity during the final months of 1933 was in part a result of contracts # awarded under the Public Works Administration. The estimated cost of proposed construction, according WHOLESALE TRADE IN DECEMBER 1933 Commodity Electrical Supplies.......... Per Cent Change From Same Month Last Year Accts. Collec to building permits issued in 97 cities of the Seventh dis trict, also registered an upward trend in December, in creasing 77 per cent over November and 36 per cent over a year ago. The number of permits issued during the month totaled 1,249, a decline of 38 per cent from the preceding month, although they registered a 20 per cent increase over December 1932. Chicago and Des Moines were two of the larger cities which, in the monthly com parison, differed from the district trend in the estimated cost of proposed construction, the former showing a de cline of 41 per cent and the latter one of 6 per cent. As compared with a year ago, Indianapolis recorded a de crease of 67 per cent in estimated cost. BUILDING CONTRACTS AWARDED* cc\n?MTri4 PPnPRAI RFSFRVE DISTRICT $33,013,870 +42% +255% $180,691,078 -12% Change from year 1932........................... ♦Data furnished by F. W. Dodge Corporation. Change from November 1933............... DEPARTMENT STORE TRADE IN DECEMBER 1933 Locality Ratio of Accts. OUTSTANDING TO Net Sales Per Cent Change December 1933 From December 1932 Per Cent Change Year 1933 From Year 1932 Net Sales Stocks End of Month Net Sales 1933 1932 +28.6 -10.5 +49.9 +33.0 +0.0 +5.2 -13.5 -1.0 -3.5 —1.9 28.6 38.0 42.0 36.2 30.9 25.0 29.6 40.8 33.0 27.6 + 17.7 -1.3 33.9 29.3 Stocks +17.8 +4.1 +35.9 +0.6 -7.1 +7.6 -5.5 -3.9 +1.2 +23.0 + 16.0 +2.0 120.8 246.5 282.4 199.7 Other Cities......... +15.8 +8.5 +10.9 +10.5 +21.0 +15.8 +24.3 +24.2 157.0 7th District......... +14.0 +56.3 Pane 6 $906,912 -33% “6% $21,375,064 -15% December trends in the merchandising of commodities, both at wholesale and retail, were decidedly favorable, gains over November in the various reporting groups of retail trade being heavier than usual for the month, while in wholesale lines declines were less than seasonal and in creases greater than average for the period. In the wholesale grocery, hardware, and dry goods trades respective declines in December from the preceding month of 3, >4, and 15 per cent compared with reces sions in the 1923-32 average of 7, 11, and 22 per cent, respectively. Drug sales gained 17 per cent in the monthly comparison, as against a seasonal expansion of only one per cent; and electrical supply sales expanded 23per cent, as compared with an average gain of 8 per cent. In creases over December 1932 were much larger in hard ware, dry goods, drugs, and electrical supplies than in the year-ago comparison for November; but the decrease shown in grocery sales totaled larger than a month pre vious, although the majority of firms reported heavier sales than a year ago. In the calendar year 1933, grocery sales failed to equal those of the preceding year by 5 per cent, the months of July, August, and October alone recording a gain in the yearly comparison; and drug sales likewise totaled smaller, by 10 per cent, with only four months of the year showing increases over 1932. Dry goods, hard ware, and electrical supply sales, however, had aggregate gains for the year 1933 over 1932 of 2, 5, and 23 per cent, respectively, as increases in the yearly comparison -6.2 +53.0 +14.0 +15.0 tions Residential Contracts Merchandising Net Sales OUTSTAND. Total Contracts Period Indianapolis........ Ratio of December Collections to Accounts Outstand. End of November were recorded in every month subsequent to April. Stocks in all groups totaled larger at the end of 1933 than at the close of the preceding year. The expansion in Seventh district department store trade for December over a month previous amounted to 62J4 per cent in 1933, representing, with one exception (1931), the largest increase in December business on our records (from 1923) and comparing with a gain of SO per cent in the 1923-32 average for the month. Of the larger cities, Detroit showed the heaviest increase in this comparison—74 per cent—Indianapolis trade gaining 70 per cent, Chicago 62 per cent, Milwaukee 45 per cent, and the total for stores in smaller cities 60 per cent. It will be noted in the table that Chicago business alone recorded a gain for the year 1933 over 1932, but that December gains over the same month a year ago brought the yearly total for the district to within one per cent of the 1932 volume. Al though the rate of stock turnover in the last four months of the year was slightly slower than in the corresponding months a year previous, turnover for the year 1933 of 3.83 times compared with 3.63 times for 1932. Retail shoe dealers and the shoe departments of de partment stores sold a dollar volume in December that was 47 per cent in excess of November sales and 11 per cent heavier than in the same month of 1932. The 1925-32 gain for December over November averaged 37 per cent. With eight months of 1933 failing to show as large sales as in corresponding months a year previous, total sales for the year were 4 per cent less than in 1932. Year-end stocks were 5 per cent heavier than on Decem ber 31, 1932. The retail furniture trade expanded considerably more than seasonally in December, sales of reporting dealers and department stores aggregating 30 per cent larger than in the preceding month, as against an increase of but 18 per cent in the 1927-32 average for December. Further more, a gain of 16 per cent over December a year ago brought sales for the year to 2 per cent above those for 1932. Stocks on December 30 totaled 12 per cent in excess of those held at the close of the preceding year. Aggregate December sales of fourteen reporting chains, operating 2,550 stores in the month, increased 60 per cent over those of the preceding month and were 10 per cent greater than for December a year previous. All groups, which included grocery, drug, five-and-ten-cent stores, cigar, musical instrument, shoe, and men’s clothing chains, shared in the gain over November, and all except grocery and cigar chains had heavier sales than a year ago. Sales for the calendar year 1933 totaled larger in drugs, musical instruments, and five-and-ten-cent stores than for 1932, but in other groups were less. Aggregate 1933 sales of the fourteen chains exceeded those of 1932 by one per cent, while average sales per store were 3 per cent heavier. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the months indicated, using the monthly average for 1923otherwise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions 1924-1925 as a base, unless will be given the following month. Data refer to the Seventh Federal Reserve district unless otherwise noted. No. of Dec. Nov. Oct. Sept. Aug. July Dec. Nov. Oct. Sept. Aug. July .. . » . . „ Firms 1933 1933 1933 1933 1933 1933 1932 1932 1932 1932 1932 1932 Meat Packing—(U. S.)— 62 54 56 Sales (in dollars)................................. 67 62 58 60 46 49 58 57 53 52 Casting Foundries— Shipments: Steel—In Dollars............................ 13 In Tons.................................... 13 Malleable—In Dollars....................... 21 In Tons....................... 21 Stoves and Furnaces— Shipments (in dollars)........................... 10 Furniture— Orders (in dollars).................................. 17 Shipments (in dollars)........................... 17 Flour— Production (in bbls.)............................. 22 Output of Butter by Creameries— Production............................................... 67 atar............................................. 69 Wholesale Trade— Net Sales (in dollars): Groceries.............................................. 29 Hardware............................................. 12 Dry Goods....................................... 9 Drugs................................................... 13 Retail Trade (Dept. Stores)— Net Sales (in dollars): Chicago................................................ 23 Detroit.................................................. 5 Indianapolis........................................ 5 Milwaukee........................................... 5 Other Cities........................................ 44 Seventh District................................. 82 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.)*. .. 18 20 23 36 21 22 23 36 23 25 25 39 19 19 24 38 21 23 24 41 21 25 21 36 78 111 128 108 91 19 24 20 28 24 37 40 45 46 42 104 109 108 93 82 101 80 95 93 92 99 96 63 65 50 37 61 70 49 39 61 74 67 80 83 64 72 62 45 45 10 10 11 18 11 11 10 16 11 10 9 16 12 12 8 14 11 10 8 13 63 45 70 100 80 46 29 61 29 15 17 19 24 29 32 31 30 25 22 22 13 93 98 108 112 119 118 130 114 122 116 123 106 86 89 77 97 92 87 92 89 111 102 118 106 68 47 34 61 67 46 44 52 65 30 25 60 64 36 32 56 65 43 35 58 70 42 38 61 65 36 28 59 59 35 22 52 69 87 80 73 59 72 64 57 65 65 56 62 47 41 48 52 40 45 93 108 104 101 83 96 61 70 66 74 57 64 66 73 77 78 60 68 61 87 76 66 56 66 45 54 50 53 46 48 39 51 44 48 38 42 10 9 7 12 28 67 33 57 106 114 115 m 102 108 66 67 68 18 15 52 37 81 55 93 67 110 67 101 29 56 16 32 12 36 22 52 26 38 32 38 48 3 5 34 5 31 12 29 7 22 9 27 3 14 5 20 7 17 7 32 7 32 7 24 31 34 37 45 45 61 42 52 67 52 60 81 59 59 96 19 18 25 19 21 30 20 21 31 20 20 29 22 17 24 26 19 24 80 39 55 77 64 67 45 ♦Average daily production. Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS. PER CEHT PERCENT INDUSTRIAL PRODUCTION (By the Federal Reserve Board) NDUSTRIAL activity, as measured by the Federal Reserve Board’s seasonally adjusted index, showed an increase in December, following upon four months of decline. Factory employment declined somewhat, while employment by public I agencies showed a considerable increase. Production and Employment The Board’s index of industrial production, which is adjusted, to allow for sea sonal variation, advanced from 73 per cent of the 1923-1925 average in November to 74 per cent in December. For the fourth quarter of 1933 as a whole, the volume of industrial output was 13 per cent larger than for the corresponding period of 1932. Activity in the steel industry, contrary to seasonal tendency, increased con siderably in December and there was also an increase in the output of automobiles. Shoe production declined by an amount smaller than is usual in December. At textile mills, activity declined further by considerably more than the usual seasonal amount to about the low level of last spring. The number of employes at factories declined between the middle of November and the middle of December by somewhat more than the usual seasonal amount, reflecting chiefly reductions in working forces at cotton, woolen, and silk mills and at clothing factories. At automobile factories there was a substantial increase in Index number of industrial production, adjusted for seasonal variation (1923-25 average = 100). FACTORY EMPLOYMENT 60-------_ 50 Federal Reserve Board's index of factory employ ment with adjustment for seasonal variation (1923-25 average = 100). MILLIONS OF DOLLARS CONSTRUCTION CONTRACTS AWARDED -------600 employment. Value of construction contracts awarded, as reported by the F. W. Dodge Cor poration, increased further in December and the first half of January. There was a large increase in contracts awarded for public works, and private construction also increased. In the fourth quarter of 1933 as a whole, construction contracts in 37 states totaled $500,000,000 as compared with $300,000,000 in the last quarter of 1932. Distribution Freight carloadings, particularly of miscellaneous freight, declined in December as compared with November by less than the usual seasonal amount. Dollar value of sales by department stores showed an increase slightly larger than is usual for December. Dollar Exchange The foreign exchange value of the dollar which had fluctuated around 64 per cent of parity from the end of November to January 13, declined to 62 per cent on January 17, and subsequently advanced to a range of from 62 to 63 per cent. Prices Three-month moving averages of F. W. Dodge data for 37 Eastern States, adjusted for seasonal variation. Latest figure based on data for November and Decem ber 1933 and estimate for January 1934. Yi HOLESAL E PRICES 100 Bank Credit — X 90 60 — \i 80 Commodities 70 70 XL 60 60 k. 50 Farm 1 AO roducts „ 50 v/ .. 40 30 50 1930 1933 1934 Indexes of the United States Bureau of Labor Statistics. By months 1929 to 1931 ; by weeks 1932 to date (1926 = 100). Page 8 Wholesale commodity prices, which had shown a slight decline between the mid dle of November and the third week of December, advanced in the following month, reflecting chiefly increases in the prices of farm products and foods. Cotton and grains showed marked increases and livestock prices also advanced somewhat. At the Reserve banks the seasonal return of currency from circulation after the holiday demand amounted to about $250,000,000 from the high point on December 22 to January 17. A large part of the funds arising from this inflow of currency to the Reserve banks was added to the reserve balances of member banks, with the consequence that these balances increased by January 17 to $900,000,000 in excess of legal requirements. The return flow of currency from circulation and the reduction of balances held by commercial banks for the United States Government were reflected in an in crease of demand deposits at reporting member banks. Loans of the banks de clined between December 13 and January 17, while holdings of United States Gov ernment and other securities increased. Short-term money rates in the open market, which had shown a slight advance in December, declined in January to the previous level.
@FedFRASER