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B usiness C onditions R eserve S eventh FEDERAL Volume 8, No. 7 district M O N T H L Y R E V IE W P U B LIS H E D BY T H E F E D E R A L R E S E R V E B A N K OF C H ICA GO July 1, 1925 BUSINESS CONDITIONS IN THE UNITED STATES further recession in wholesale prices. Distribution of com modities was in greater volume than at this time last year, but slightly less than in April. PRODUCTION—The Federal Reserve Board’s index of production in basic industries declined 6 per cent in May to a level of 12 per cent below the high point in January. There were further considerable decreases in the output of the iron and steel and woolen industries, and declines also .occurred in the mill consumption of cotton and in copper, iole leather, and newsprint production. The number of automobiles manufactured during May fell slightly below the record figure of April. Employment at industrial establishments was slightly less in May than in the month before, with decreases, partly seasonal, in the clothing, boot and shoe, and iron and steel industries and increases in the industries producing automobiles, tobacco products, and certain building materials. Building contracts awarded during May were smaller in value and in square feet than those for April, but were larger than for any other month on record. TRADE—Department store sales in May were smaller than in April but somewhat larger than a year ago, and mail order sales were 5 per cent larger than in May, 1924. Department store stocks declined in May and were at the same level as a year ago. Wholesale trade was in about the same volume as the month before and about 3 per cent larger than a year ago, increases over last year in sales of meats and dry goods offsetting decreases in sales of gro ceries, shoes, hardware, and drugs. Wholesale stocks of groceries in dollar values were larger than a year ago, while stocks of dry goods and shoes were substantially smaller. Car loadings of miscellaneous products and mer chandise decreased slightly during May, but were greater than a year ago. PRICES—Wholesale prices continued to decline in May, but the decrease was considerably smaller than for the preceding month. All groups of prices represented in the Bureau of Labor statistics index declined except the house- P R O D U C T I O N IN B A S IC I N D U S T R I E S W H O L E S A L E PR ICES in basic industries and factory employ P RODUCTION ment continued to decline in May and there was a Compiled June 26, 1925 furnishings and miscellaneous groups. In the first three weeks of June prices of wheat, corn, flour, cotton goods, and pig iron declined, while quotations on sheep, hogs, gasoline, hides, and rubber advanced. BANK CREDIT—Borrowing for commercial purposes at member banks in leading cities declined further between the middle of May and the middle of June to a level lower than at any time this year, while loans on securities in creased and reached a new high level in June. Investment holdings of these banks also increased, and total loans and investments at the middle of June were near the high point for the year. At the Reserve banks there was an increase in member bank borrowing between May 20 and June 24 and on tha^ date discounts for member banks were in larger volume* than at any time since the opening of the year. Further decreases in the holdings of acceptances and of United States securities brought the volume of open market hold ings in June to the lowest level since last summer. Conditions in the money market remained relatively steady during the latter part of May and first three weeks in June, notwithstanding the heavy Treasury operations in the middle of June. F E D E R A L RESERVE BAN K C R ED IT D E P A R TM E N T STORE SALES W eekly figures for 12 F ed eral R eserve banks. L a te s t figures, Ju n e 24, 1925: T otal E a rn in g A ssets, 1034 million; D iscounts, 455 million; U nited S ta te s Securities, 325 million; A cceptances, 242 million. BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT in conditions in the Middle West during C HANGES May consisted for the most part in agricultural de velopments, such as the lower wheat estimate and frost damage to fruit, corn, and potatoes, followed in June by a generally better outlook for corn. Other conditions were much the same as reported a month earlier. There was little improvement in the coal industry of Illinois and Indiana, production being abnormally low for the season. In the steel trade for this district new business arrived in fair volume, although shipments slightly exceeded current orders; pig iron buying was heavy during the month. The output of automobiles, both trucks and passenger cars, declined fr,om April, but was considerably ahead of a year ago; the sales' volume was well maintained. Sales of agri cultural equipment were slightly less than in the preceding month, with the continued increase over last year largely due to the demand for heavy machinery. Building permits issued during the month showed a drop from the record April figure; the rate of construction, however, is still high, tending to keep brick and cement plants active and to fur nish demand in the lumber industry which is otherwise quiet. In general, wholesale and retail dealers reported a smaller volume of goods distributed in May than in April, while Page 2 comparisons with a year ago vary. Commercial failures dur ing the month were strikingly fewer and of smaller liability than in the preceding month or in May, 1924. Other finan cial features of importance are the continuance of extremely easy money in Chicago and the steady investment demand at advancing prices. Savings accounts on June 1 reached new totals both in number and amount of deposits. CREDIT CONDITIONS AND MONEY RATES Credit conditions in the district show little if any change from last month. In Chicago, marked ease continues to characterize the money market, and rate quotations are sub stantially the same as those of a month ago, with the ex ception of a slight increase on commercial paper. Collateral loans are quoted at 4 to 4J4 per cent, over-the-counter ac commodations 4 % to 4 # per cent as was the case a month ago, and commercial paper 3J4 to 4 % per cent, compared with 3J4 to 4 per cent the middle of May. Some banks in other sections of the district report a slightly heightened demand for credit, but in the main the situation presents no significant developments. Total earning assets of the Federal Reserve Bank of Chicago during the past six weeks have been on a lower) level than in the preceding period of similar length. On June 17, earning assets of $126,526,000 compared with $138,s 35,000 on May 6. Loans to member banks have shown i slightly upward trend since the middle of May, increasing from $38,112,000 on May 13, with minor weekly fluctuations, to $56,587,000 on June 17. Federal Reserve notes in actual circulation, while continuing the downward trend of recent months, have decreased in volume at a less rapid rate since May 13 than in the prior five-week period, the drop from that date to June 17 amounting to less than $3,000,000, whereas between April 8 and May 13 it was about $5,400,000. PO S ITIO N OF T H E F E D E R A L R E S E R V E B A N K OF CH ICA GO L a te s t figures, Ju n e 17, 1925, in thousands of dollars: F e d e ral R eserve N otes, 156,876; T otal E a rn in g A ssets, 126,526; L oans to M em ber B anks, 56,587. Loans and discounts of reporting member banks in Chicago and Detroit have exhibited considerable change rom week to week, with, however, a rather well defined upward trend, largely accounted for by heavier volume of loans on stocks and bonds in Chicago, partially offset by lessened accommodation on Government securities and col lateral other than stocks and bonds. In other selected cities loans on stocks and bonds have also moved upward, loans on other classes of collateral, as well as Government securi ties, showing little movement in either direction. Total in vestments of reporting member banks have shown weekly gains since May 6, for the most part in Chicago and Detroit; the aggregate for members in other selected cities has altered little from week to week since that date. Net de mand deposits on June 17, aggregating $1,770,228,000, were the highest since January 14, when $1,775,687,000 was re ported. Net demand deposits of reporting members in other selected cities have shown a declining* trend since March 4, though weekly increases have occasionally taken place; in Chicago and Detroit the trend has been distinctly upward. Time deposits have exhibited a fairly well defined upward movement, the high point of which occurred on May 27, since when the weekly aggregates have fallen somewhat below the $986,104,000 then shown, until June 17, with time deposits of reporting member banks aggregating $991,675,000, established a new high point. Sales of commercial paper during May, as well as the cutstanding volume at the close of that month, declined, the former 6.6 per cent and the latter 9.3 per cent from April for reporting Seventh district dealers. The prevailing sell ing rates in May remained unchanged from April at 3J4@4 per cent, but in both the high and low quotations a softer ,endency was shown. Paper was in fairly steady demand and supply. Paper outstanding by twenty-three dealers in the United States on May 30 aggregated $696,454,000, com pared with $723,416,000 at the close of the prior month. Dealers in the Chicago open market reporting to this bank purchased bills valued 43.4 per cent less on a weekly average basis, during the period May 21 to June 17 than in the prior five-week period. Sales on the other hand, aver aged a weekly increase of 24.8 per cent, the largest advance taking place in sales to local banks. These operations re sulted in a 50.0 per cent reduction in bills on hand June 17 as compared with May 20. There was practically no change in rates during this period, 90-day bills going at 3% bid and 3J4 per cent offered, at the close. The supply of bills was very light, demand, however, increasing sub stantially, so that the movement of bills at the offered rates was free. Packing house products, grains, iron ore, and cotton were the commodities principally involved. Notwithstanding an increase of 40.1 per cent in the volume of bills accepted by reporting banks in this district in May, the liability for bills outstanding as of May 30 declined 27.3 per cent from the close of the prior month. Purchases and aggregate month-end holdings advanced 80.8 per cent and 40.9 per cent, respectively, and sales were off 5.6 per cent. Holdings of their own acceptances by the banks advanced 17.1 per cent. In May the Federal Reserve bank purchased $25,277,453 of bankers’ acceptances, and held $39,022,560 at the close of the month, both items advancing over the prior month. Agricultural Financing—Loans outstanding in the five states including the Seventh district reported by twentytwo Joint Stock Land banks aggregated $179,822,185 on May 30, a gain of $2,719,282 over the corresponding figure at the close of April. Four Federal Land banks showed loans in the same territory of $154,170,036 at the end of May compared with $153,292,033 April 30. Four Federal Inter mediate Credit banks had aggregate loans and discounts of $922,752, which total represented a decline of $22,606 from April 30. Volume of Payment by Check—Volume of payment by check as reported for May by thirty-six clearing house cen ters in the district increased 2 per cent in the aggregate over April. The total in the four larger cities, Chicago, Detroit, Milwaukee, and Indianapolis, was 2.9 per cent greater than in the preceding; month, whereas the thirty-two smaller ci ties showed a decline of 2.6 per cent from April. Compared with May, 1924, the thirty-six cities reporting volume of payment by check showed a gain of 10.5 per cent this year, that for the four larger cities amounting to 11.4 per cent, and for the thirty-two smaller clearing house centers 6.1 per cent. Savings—Both in number of accounts and in amount of deposits, aggregate savings on June 1 for 196 reporting banks in this district exceeded previous records. The gain in amount over a year ago averaged 3.8 per cent, individual increases by states ranging from 1.6 per cent in Illinois to 7.7 per cent in Iowa; while the increase of 1.2 per cent over the May 1 total reflected gains in Illinois, Michigan, and Wisconsin, and declines of less than one per cent in the other two states. The average size of account the first of June was 1.2 per cent larger than a year ago, and 0.9 per cent above the pre ceding month; Illinois showed slight declines in both com parisons, with the Wisconsin average falling 0.1 per cent below June 1, 1934, and Indiana 0.3 per cent below May 1, 1925. Page 3 Bonds—The last two weeks in May and the first two weeks in June have seen a continuation of the steady in vestment demand and price advancement. Public utilities, high-grade rails, and municipals are still in high favor. First mortgage banking houses reporting direct to this bank state that in keeping with the record volume of building permits being issued, the demand for building loans has been very heavy as well as that for bonds, with their sales running far ahead of last year. The United States Treasury offering of $125,000,000 of Certificates of Indebtedness, dated June 15, 1925, maturing June 15, 1926, was over-subscribed for the country and for the district. The quota for the latter was $17,500,000; sub scriptions, $56,408,500; and allotments, $25,675,000. AGRICULTURAL PRODUCTION AND FOODSTUFFS Unfavorable weather conditions until late in May ma terially retarded plant growth, and killing frosts took toll in some sections of the district where corn and potatoes planted unusually early were above ground; replanting, how ever, appears to have been necessary on a much lesser scale than expected. Stands are now fairly even, with condition of the crops greatly improved, because of better weather in June. Blooms and sets of small fruit and peaches suffered extensive frost damage, so that the present outlook for these crops is rather discouraging, and the apple yield is es timated as only fair. Truck gardens shared also in the frost injury. Lack of moisture and continued cool weather this spring, combined with the unusual heat in June, have pre vented hay, straw, and oats from reaching their normal de velopment, and a low average yield per acre for 1925 is anticipated. The reports from agents in 143 counties reflecting condi tions on 217,708 farms in the Seventh district indicate June 1 holdings of lambs and sheep 5 to 10 per cent greater than a year ago. The amount of oats remaining on farms is only slightly larger than at this time last year. CROP PRODUCTION Estimated by the Bureau of A gricultural Economics as of June 1 (In thousands of bushels). S eventh F orecast 1925 Oats .................... ...487,224 W inter W heat .... 54,430 Spring W heat .... 3,451 Barley ................. .... 30,807* All Hay** ........ .... 14,944 Rye .......................... 14,337* D istrict U nited S tates F inal F orecast F inal 5 Y r A ve . 1920-1924 1924 1924 1925 608,284 1,295,456 1,541,900 1,327,642 591,957 65,262 590,037 407,156 245,159 2,718 253,729 282,636 182,382 31,570* 204,687 187,875 22,352 107,207 95,837 112,450 18,589* 53,317 63,446 70,410 *Five States including Seventh Federal Reserve district. **In thousands of tons. Grain Marketing—Receipts of grain were seasonally greater than in April, although a smaller quantity of oats and corn arrived at the principal interior markets of the United States during May than in the corresponding month last year. Forwardings of corn from primary terminals were also smaller than in April; for wheat and oats the quantity was greater. Visible supplies of grain in the United States showed a further recession in June while stocks of corn and barley were somewhat heavier than those of a year ago. Commercial holdings of oats totaled about six times the amount of those for the corresponding period in 1924, but the supply of wheat and rye declined in volume. Con tracting on the Chicago Board of Trade for grain in for ward positions lessened somewhat from April. Preliminary reports show that the United States exportations of barley, wheat, and oats increased in May over the prior month; those of corn and rye declined. Flour—Mills in this district operated at a little over half of capacity during May; the ratio of 51.1 per cent for thirtysix firms represented a slight increase over April, however, while total production declined 2.8 per cent because of the one less working day in May. The movement of flour through Chicago, as reported by the Chicago Board of Trade, was lighter than in either the preceding month or May a year ago. Page 4 CHANGES IN MAY, 192S, FROM PREVIOUS MONTHS P er cent A pril Production (bbls.) ............ Stocks of flour at end of month (bbls.) ................. Stocks of wheat at end of month (bu.) ..................... Sales (volume) ................... Sales (value) ....................... 1925 —• 2.8 + 1-3 — 29.7 + 2.8 + 3.0 change from M ay 1924 — 6.7 +5.5 — 23.8 + 8.9 +52.2 C om panies included A pril M ay 1925 36 31 31 14 14 1924 36 29 29 13 13 Production includes wheat and other flours. Balance of items refer to wheat flour only. Movement of Live Stock—Although the receipts of hogs and lambs were greater in May than in the preceding month, the slaughter of all classes of live stock showed a recession from April. Compared with a year ago, the ar rivals of cattle and hogs declined, but those of lambs and calves increased. Marketing of early crop lambs from sheds on northwestern ranges has begun, as has that of grass-fed cattle from pastures and ranges. Receipts of corn-fed lambs and cattle have been seasonally small so that the aggregate arrivals of live animals at twenty markets in the United States during the first half of June have failed to equal fig ures for the corresponding period last year. LIVE STOCK SLAUGHTER C attle Yards in Seventh District May, 1925............................... ..230,650 Public Stocks Yards in U. S. May, 1925.............................. ...666,600 April, 1925.............................. ...670,602 May, 1924..................................693,686 H ogs 633,022 1,930,964 2.039,024 2,734,644 L ambs and S heep 269,922 829,791 833,059 723,263 C alvel 153,949 456,591 492,408 447,014 Reshipments of cattle to feed lots were less than in April or a year ago, but those of calves and lambs were greater. AVERAGE PRICES OF LIVE STOCK Per Hundred Pounds at Chicago. W eek ended M onth op J un e 20, M ay A pril 1925 1925 1925 ....$10.50 Native Beef Steers (average).... $10.05 $10.20 7.35 Fat Cows and H eifers.................... ..... 6.80 7.40 12.10 Hogs (bulk of sales)...................... ..... 12.65 12.60 Yearling Sheep ............................. ..... 12.85 10.65 9.75 Lambs (average) ........................... ..... 15.45 13.60 14.15 M ay 1924 $ 9.65 6.80 7.35 12.15 15.10 Meat Packing—The production of meat and fat during May at slaughtering establishments in the United States aggregated less than the total for the preceding month. Employment, however, showed an increase of 3.1 in num bers, 6.1 per cent in hours worked, and 6.0 per cent in total value for the last payroll in the month compared with cor responding figures for the prior period, a gain in which increased receipts toward the close of the month have been cited as a factor. Statistics compiled from data sent direct to this bank by sixty-one packers in the United States show sales in dollars increased 10.3 per cent over those for April and were 20.0 per cent greater than in May, 1924. June 1 inventories were lower than those at the beginning of the preceding month. Stocks of meat in cold storage warehouses in the United States continued under the 1920-24 average for this season, but lard holdings showed a gain from last year and were slightly greater than the five-yeat average for June 1. After declining at Chicago to rather low levels during the early part of May, prices of pork and lard advanced until a new high point for the year was reached in June. Quo tations for lamb remained moderately firm, but those for veal strengthened after the first week in May. Prices for beef averaged somewhat lower than in April. Demand from the United Kingdom has improved in the last month, partly in anticipation of a revision of import regulations on lard which became effective on June 1, and which are temporarily at least diminishing competition from Holland. Continental importers continue to confine pur chases of packing house products to their immediate needs. The quantity of meat and lard forwarded in May for export increased materially over the small April volume. Prices abroad have improved in the last month, but competition has remained so keen that quotations for a number of the products are still under Chicago parity. Spot and consigned stocks in European markets on June 1 were estimated as a little smaller than at the beginning of May. Dairy Products and Poultry—'Butter production in the Seventh district showed a seasonal increase of 48.5 per cent over April but was 2.1 per cent less than a year ago, ac cording to reports sent this bank by sixty-one creameries. Statistics compiled weekly by the American Association of Creamery Butter Manufacturers indicate a considerably heavier production in the United States during May than in the prior month and slightly in excess of that for the corresponding period last year. The total volume of butter sold by sixty-three firms in the Seventh district showed a rise of 33.1 per cent above the sales in April but was 2.8 per cent smaller than in May, 1924. Wisconsin factories manufactured 27.6 per cent more cheese during the five weeks ended June 6, 1925, than in the prior period, the out put being 2.8 larger than that for the corresponding month a year ago. i Net receipts of butter, cheese, and poultry increased at Chicago during May, but a slightly smaller total number of eggs arrived than in April. Storage holdings of dairy products in the United States were seasonally greater on June 1 than at the beginning of the preceding month, but inventories of poultry showed some recession. Prices of cheese and eggs advanced while those of the other dairy and poultry commodities averaged lower at Chicago during May than in April. Early in June, the prices of most products trended slightly upward; quotations for eggs held moderately firm. COAL Illinois coal production for May of 3,561,140 tons, al though 9.1 per cent heavier than in April, represented an unusually low amount for this season of the year. No im provement took place in conditions in Indiana. Domestic demand was revived occasionally by some cool weather, but remained very light in general. Low-priced coal from Ken tucky and W est Virginia, among other factors, has pre vented Illinois and Indiana steam coals from showing any strength, although the supply of the latter continues limited. Contracts have not been closed rapidly, but over a period of several months the cumulative amount has reached fair INDUSTRIAL EMPI For th e m o n th ended M a y 15, four of th e ten large g ro u p s into which the reporting industries of the district have been classified, registered increases in employment. Two of these, vehicles and rubber products, indicated an increasing activ ity in the automobile industry, although the change in vehicles ,was almost negligible on account of the decline in the manufacture of railroad equipment and in repair shops. The effect of the growing demands of the automobile indus try was evidenced clearly by the gains registered for rubber products and by the reports received from the Employers’ Association of Detroit which showed an increase of 5.3 per cent from the previous month in the employment of that city. Later reports would indicate that this gain has been maintained, the volume on June 9 being only 0.5 per cent lower than for the middle of May. Seasonal increases were apparent in the food and related products group in which a steady decline had been in progress since last December. Under stone, clay, and glass products, the fourth group that showed an increase in em- proportions. Estimated output of bituminous coal for the United States increased in May over the preceding month as well as over a year ago, while anthracite production also gained in both comparisons. The condition of the lake trade in bituminous coal is reflected in the table below, figures for which were furnished by the Ore and Coal Exchange of Cleveland. LOADINGS OF BITUMINOUS COAL AT LAKE ERIE PORTS (In net tons.) M ay, 1925 Cargo ....................................................2,799,833 Fuel ...................................................... 194,210 Total ................. 2,994,043 M ay, 1924 2,433,862 175,731 2,609,593 M ay, 1923 3,829,971 175,030 4,005.001 MENT CONDITIONS p lo y m e n t, th e e x p a n s io n has been c o n tin u o u s sin c e la st February. Losses in the remaining six groups, however, slightly more than offset these gains, and the change for the aggre gate of all groups, with an employment of about 370,000 men, was a loss of 0.8 per cent in number and of 0.3 per cent in payrolls. The heaviest decline took place in textiles and textile products and was of a seasonal nature. The changes of the metals and metal products group were simi lar to those shown above for the total of all groups. While this is the third consecutive month that the metal industries have reduced employment, the cumulative decline barely exceeds 2 per cent. Building and road construction are requiring a steadily increasing number of men, but there has been no further improvement in the ratio of applicants to places available at the free state employment offices. For Indiana, this ratio in per cent rose from 108 to 119 during the month of May, while for Illinois there was a very slight increase from 143 to 145. Page 5 EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT N umber I ndustrial G roup M ay 15 368,671 147,209 43,528 25,840 46,852 14,117 33,551 8,463 17,716 3,290 28,105 All groups (1 0 )............................................................................ Metals and metal products (other than vehicles) .... Vehicles ..................................................................................... Textiles and textile products.............................................. Food and related products.................................................... Stone, clay, and glass products......................... ................ Lumber and its products...................................................... Chemical products.................................................................. Leather products........................................................................ Rubber products........................................................................ Paper and printing................................................................ of W age E arners WEEK ENDEr P er cent C hange A pril 15 371,674 — 0.8 148,327 — 0.8 43,289 + 0 .6 27,832 — 7.2 + 2 .9 45,527 + 2 .7 13,745 34,769 — 3.5 8,727 — 3.0 17,748 — 0.2 3,161 + 4.1 — 1.6 28,549 M ay 15 $9,582,374 3,646,737 1,360,032 529,186 1,238,542 424,205 819,390 222,491 384,362 87,612 869,817 T otal E arnings W eek ended A pril 15 $9,607,563 3,657,696 1,351,460 593,757 1,183,211 402,388 835,487 226,621 380,538 84,346 892,059 P er cent C hange — 0.3 —0.3 + 0 .6 — 10.9 + 4 .7 + 5 .4 — 1.9 — 1.8 + 1.0 + 3 .9 — 2.5 MANUFACTURING ACTIVITIES AND OUTPUT Automobile Production and Distribution—A slight reces sion took place in automobile production during May; out put by identical American manufacturers from their plants in the United States and Canada aggregated 382,972 pas senger cars, a decrease of only 2.4 per cent from the preced ing month while last year the decline was 16.7 per cent in the same comparison. Production this year increased 33.6 per cent over May, 1924. Manufacturers who produced 40,765 trucks in April, reduced their May output to 42,322, a decrease of 9.5 per cent, but a gain over last year of 26.0 per cent. Dealers in the United States continue to sell cars to users at a higher rate than they receive them, as indicated in a ratio of 104.9 per cent for May of dealers’ sales to receipts from manufacturers whose output was 62.7 per cent of total May production; this ratio is somewhat lower, however, than in the preceding month and considerably less than in May last year when dealers were rapidly reducing their stocks. Distribution in the Middle W est appears to be holding up well, although some slight declines from April were re ported. In comparison with a year ago both wholesale and retail sales gained in number and value. Fifty-three per cent of the aggregate sales of forty-eight retailers were made on the deferred payment plan. MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in May, 1925, from previous months. P er cent chance from M ay A pr il 1925 New car* Wholesale— Number sold.. ... — Value ........................ ... — Retail— Num ber sold ........... ... + Value ........................ ... — On hand May 31— Number .................... ... — Value ........................ ... + Used cars Number sold..................... — Salable on hand— Number .................... ... — Value ........................ ... — 5.7 1.3 3.2 1.0 0.6 1.2 8.3 8.8 6.5 1924 +47.5 +42.3 + 6.0 + 12.3 —48.7 — 38.4 +22.8 + 6.2 — 4.6 C om panies included M ay A pril 1925 1924 44 44 71 71 74 74 71 71 71 40 40 69 69 73 73 70 70 70 Agricultural Machinery and Equipment—The sales of ag ricultural machinery and equipment billed to customers by manufacturers in the United States totaled slightly less for May than for April. Demand for heavy machinery appears to have continued the dominating factor in causing sales for the current year to show such marked improvement over corresponding figures for 1923 or 1924. Of the total ship ments in May approximately 77 per cent were billed to dealers, 3 per cent to jobbers, 7 per cent direct, and 13 per cent for export. Employment remained at a higher level than last year and was equivalent to 69.8 per cent of the estimated normal rate for May. Page 6 PRODUCTION AND SALES OF FARM EQUIPMENT IN THE UNITED STATES Changes in May, 1925, from previous months. P er cent A pril 1925 Domestic sales ................... — 9.3 Sales billed for export.. .. — 9.4 Total sales ....................... .. — 9.3 Production ....................... .. + 2.9 change from M ay 1924 +26.0 — 4.1 +20.9 + 18.1 C om panies included M ay A pril 1925 102 102 102 96 1924 102 102 102 96 Sales based on dollar amounts. Production computed from employ ment. Iron and1 Steel Products—A generally steadier situation prevails in the iron and steel industry; most steel purchases during May were for current needs only, but the volume was fair; May pig iron buying was heavy; prices of most fin ished steel products changed little; and ingot production was maintained at a moderate rate. Structural steel orders have been large, the automobile industry continues active, while oil needs have increased. Railroad buying remains cautious. Unfilled orders of the United States Steel Corporation to taled 4,049,800 tons at the end of May, a decrease of 8.9 per cent from April, but an increase over a year ago of 11.6 per cent. In the Chicago district some mills reported a moder ate gain in sales over the preceding month, although ship ments continued greater than incoming business. Ingot production during May averaged about 76.5 per cent of capacity for the c o u n try in comparison with 79.5 in April, and the decline in the daily average output was only 3.6 per cent while last year the loss was 24.1 per cent in the same comparison. A considerable decline took place in May pig iron production; daily average output for the United States fell off 13.0 per cent and in the Indiana and Illinois district 9.4 per cent; twenty-four fewer furnaces were in operation than in the preceding month. Sheet prices have continued to weaken and are now at a very low point, but with this exception price declines have been small. On June 17 the Iron Trade Review composite average of fourteen leading iron and steel products was re ported as $37.43, compared with $38.21 on May 20 and $40.55 on June 18, 1924. Scrap iron prices strengthened in May but have softened recently, while there have been fur ther reductions in pig iron. Operations of iron and steel casting foundries in the Seventh district were curtailed somewhat during May, as reflected ih a decline of 8.0 per cent in the amount of metal consumed by twenty-nine foundries reporting to this bank; shipments decreased 6.3 per cent in tonnage, but gained 7.3 per cent over a year ago. Increases were recorded by stove and furnace manufacturers in both shipments and produc tion; orders booked continued to decline. Shoe Manufacturing, Tanning, and Hides—The total number of shoes manufactured and shipped in May by factories in the Seventh district was less than in April. June 1 inventories showed an increase compared with those at the beginning of the prior month, owing to for wardings lagging 3.3 per cent behind current production. Unfilled orders on the books of twenty-six companies gave assurance of nearly eight weeks’ business at the May rate. CHANGES IN THE SHOE MANUFACTURING INDUSTRY IN MAY, 1925, COMPARED WITH PREVIOUS MONTHS P er cent change from A pril M ay Production ........................... Shipments ............................ Inventories ......................... Unfilled orders ................... 1925 — 4.5 — 14.4 + 2.0 +35.2 1924 + 7.2 + 0.4 — 9.0 + 0.9 C om panies included A pril M ay 1925 35 35 29 27 1924 34 34 26 26 Tanneries report that the May production showed a decline from the preceding month but was greater than for the corresponding period last year. Although half of the reporting companies showed a recession in sales billed, the total was slightly higher than in April, 1925, or May, 1924. Sales of belting and harness increased during May. Prices of most kinds of leather were somewhat easier than in April. Because of a less active market than in the preceding month for packer green hides and calf skins, the ship ments from Chicago declined. May prices continued prac tically at the same level as those in April. Furniture—New business received during May by twenty- one furniture manufacturers in the Seventh district gained 10.4 per cent over the preceding month. Shipments con tinued to decline but exceeded orders, so that there was a reduction from April of 7.4 per cent in the amount of business still on hand. Order books indicate a much larger volume of unfilled orders at the end of May than a year ago, gaining 99.6 per cent. Other comparisons with May last year show that shipments increased 19.4 per cent and orders booked 27.4 per cent, while in comparison with May, 1923, shipments decreased 9.6 per cent and orders booked 6.7 per cent. Production schedules were reduced slightly further during May, but remained in advance of a year ago. Raw Wool and Finished Woolens—Toward the end of May a better tone appeared in the wool market; prices firmed and even advanced slightly, while the volume of sales increased and was heavier than last year at this time. Manufacturers bought more freely of bright wools especi ally, prices on these advancing about 10 per cent. Buy ing of western territory wools remains quiet, with growers inclined to hold or consign their wool rather than sell at unsatisfactory prices. Very little change has taken place in the goods market the past month; reports as to activi ties continue to vary, some indicating increased demand and duplicate orders for staples with capacity production, others showing little or no improvement in conditions and curtailed operations. BUILDING MATERIALS AND CONSTRUCTION ACTIVITIES While retail lumber yards experienced some increase in activity, the lumber business generally was quiet during May. Twenty-two manufacturers and dealers of the dis trict reported their sales in dollars as 8.6 per cent less than for the previous month and as 3.0 per cent below those of the same month a year ago. Factories are mak ing very limited purchases and the building industry con tinues as the main source of demand. The majority of dealers reporting show a slight accumulation of stocks. At Chicago, the receipts of lumber were slightly larger and the shipments somewhat less than those of the previous month. Both items were approximately 10 per cent be low the volume of a year ago. The trend of prices was distinctly downward during the month. The shipments of cement from mills during May were in substantial excess over April and also ahead of May a year ago. Although the production of cement is increas ing the stocks are being slowly reduced. The Geological Survey reports production for the United States as 12 per cent and shipments 16 per cent larger than for April, with stocks showing a reduction of 6 per cent. In comparison MERCHANDISING CONDITIONS Wholesale Trade—Wholesale trade during May in the Seventh district as reflected by sales of reporting dealers followed much the same trends as a year ago. As then, comparisons with the preceding month indicate general expansion only among grocery firms; in other commodi ties, all but seven dealers registered declines, the decreases by groups being as in 1924 most marked for shoes, 30 per cent, next for dry goods and hardware, respectively, and about 5 per cent for drugs. Comparisons with May, 1924, were affected by the one less trading day this year and by the weather conditions with these items of a year ago, there were increases of respectively 12, 15, and 14 per cent. The demand for brick owing to the extensive building operations was also very strong and most plants were kept in continuous operation. Shipments compared well with those of a month ago and stocks were reduced consider ably. Conditions, however, are not entirely uniform; re ports from Iowa, for example, state that in many sections the demand for clay products is again very quiet. Prices remain unchanged. Building Construction—The contracts awarded in the district during May totaled $97,707,406, a decline of 12.3 per cent from the April valuation, but still 43.7 per cent higher than for May, 1924. For residential construction alone, the contracts were 28.9 per cent below the previous month, but 31.4 per cent ahead of a year ago. Permit figures also failed to maintain the heavy increases that were recorded for April, the total number issued in fifty cities showing a decline of 11.8 per cent while the esti mated cost decreased 6.4 per cent. In comparison with a year ago, the number of permits was 8.0 per cent lower, but the valuation 16.5 per cent' higher. jprevailinig during the month. Individually, over twothirds of the dealers showed declines from a year ago. Cumulative sales during the first five months of 1925 are below last year for half the drug and hardware firms and for the large majority of other firms, with changes by groups ranging from 0.7 per cent increase for drugs to 13.2 per cent decrease for shoes. Aggregate collections were smaller than in April ex cept for hardware, and for all groups were below a year ago, the latter comparisons in general being the most un favorable for the year. Of eighty-two firms reporting Page 7 In collections more than two-thirds of the firms reported accounts outstanding at the beginning of June, fifty had larger amounts received during May than in April, fol smaller amounts on their books than on May 1, and nearly lowing the trend of the three preceding years for which two-thirds were below a year ago. Stocks of hardware and groceries were generally re comparable data are available. For twenty-seven out of fortyduced during the month, while in drugs and dry goods five firms collections were heavier than a year ago. By the half the stores reported net additions. In comparison with end of May accounts on the books for sixty-six stores had a year ago, stocks for twenty-five grocery dealers were increased 1.8 per cent, and for forty-five were 10.1 heavier about 12 per cent heavier this year; with few exceptions, than last year. Mail Order Trade—Mail order trade during May re all dealers in the other groups were carrying lighter in flected a fairly liberal buying of seasonable goods, with ventories. one house reporting sales in nearly all lines in excess of Department Store Trade—Of eighty-seven department a year ago. For Chicago’s two largest firms the gain over stores reporting in this district, fifty indicated a smaller volume of business during May than in the corresponding May, 1924, amounted to 7.8 per cent, which somewhat ex ceeds the rate of increase noted in April, but is smaller month a year ago. Increases by the others, however, more than the first quarter gains over last year. For the sec than offset the declines so that the entire group averaged an increase of 3.5 per cent, and cumulative sales for the ond successive month, combined sales were ahead of the corresponding volume in 1920, previously the peak year. five months are 1.8 per cent in excess of last year. The In comparison with the preceding month, both houses decline in May of this year of 5.8 per cent from the pre ceding month reflects decreases by fifty-two firms and in showed declines, averaging 18.6 per cent, or about the same creases by thirty-seven. decline as took place in 1924. As is customary during May, stocks were generally re Chain Store Trade—Of seven chain store systems re porting to this bank all but one showed a gain during May duced, all but eleven stores being inventoried lower on May 31 than at the beginning of the month, and the group aver in the value of total sales over a year ago, and four set aging a drop of 1.5 per cent. Over half the stores are new records for the month. For three firms, May sales carrying lower stocks than a year ago. exceeded the April, 1925, amounts. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the month indicated, using the monthly average for 1919 as a base, unless other wise indicated. W here figures for latest m onth shown are partly estim ated on basis of returns received to date, revisions will be given the following month. D ata refer to the Seventh Federal Reserve district unless otherwise noted.) No. of May April May April No. of May April May April Firm s 1925 1925 1924 1924 Firm s 1925 1925 1924 1924 Meat Packing— (U. S.)— Wholesale Trade— Sales (in dollars)1*...................................... .. 64 107.1 97.2 89.2 85.0 Net Sales (in dollars) : Casting Foundries— Groceries ..................................... 43 67.7 64.9 72.3 71.4 28 90.9 94.3 93.4 97.6 21 106.9 115.5 108.0 117.8 Stoves and Furnaces— Dry Goods ............................... 14 72.6 81.9 71.1 81.8 Shipments (in dollars)............................. ... 17 71.0 71.0 90.6 90.5 Drugs .......................................... 14 98.3 103.5 97.2 100.7 A gricultural Machinery Shoes ............................................ 7 37.3 53.5 42.4 57.6 & Equipment— (U. S.)®— Retail Trade (Dept. Stores)Domestic Sales (in dollars).................. ... 121 142.0 156.6 112.8 114.3 Net Sales (in dollars) : Exports (in dollars).................................. .. 121 121.3 133.8 125.0 177.1 Chicago ....................................... 9 133.1 143.2 137.3 141.8 .. 121 138.9 153.1 114.7 123.7 4 159.0 181.0 147.0 163.9 3 131.6 128.9 109.0 119.2 _ 116 107.1 104.1 91.0 95.1 Agricultural Pumps— (U. S.)a 5 136.5 141.6 135.8 149.6 Indianapolis ............................... 5 150.1 ... 19 124.9 125.6 99.7 98.8 150.3 150.5 Furniture3— Outside ....................................... 39 111.8 113.1 109.5 117.8 ._ 21 121.9 110.1 95.5 92.3 65 139.6 148.8 134.4 144.5 Retail Trade— (U. S.)— Shipments (in dollars)............. ........... ... 21 137.0 148.2 114.7 132.0 Shoes*— Department Stores ....................... .......... — 359 128 135 127 133 Production (in pairs).................................. 35 136.1 142.5 127.9 144.2 4 94 117 90 114 Shipments (in pairs)________________ ... 35 133.7 155.7 133.5 156.3 Electric Energy— 210 254 264 214 27 O utput of Plants (K W H )....................... .. 9 163.8 165.0 150.7 156.0 9 163 159 150 145 Industrial Sales (K W H )............................ 9 195.0 192.1 167.6 173.0 178 147 150 6 177 Flour Production— 5 191 195 174 178 (In bbls.) ..................................................... ... 39 88.3 90.8 95.3 93.7 Candy ........................................... 5 195 210 205 186 O utput of B utter by Creameries®— 4 96 107 88 82 Production .................................................. ... 81 141.9 96.6 143.5 96.9 3 143 134 143 130 Sales .............................................................. .... 81 122.2 96.4 119.5 97.4 Freight Carloadings— (U. S.)— 97.5 84.5 102.4 96.9 Grain and Grain Products............. - ...... 64.5 60.5 71.3 73.2 84.1 85.4 96.1 90.0 Live Stock ................................................— 81.0 66.1 106.7 119.6 97.3 86.0 84.5 76.1 Coal ......... ...................................................... 58.7 32.6 51.1 32.9 106.9 271.7 99.7 119.8 Grain Shipments: 137.3 137.0 132.6 133.9 Oats ............................................ 105.5 103.7 80.2 80.2 174.7 78.1 146.3 59.0 Corn ............................................ 68.4 96.1 116.6 107.0 135.3 132.9 124.2 124.5 Merchandise and Miscellaneous............. . W heat ......................................... 67.4 45.7 52.9 39.0 Total ... ................... 125.3 116.7 115.3 109.5 Building Construction— Contracts Awarded (in dollars) Residential ................................. 253.5 356.6 192.9 182.0 144.6 159.5 107.0 147.2 Total ............................................ 177.8 202.8 123.7 121.1 112.8 129.7 100.7 128.6 United States ........................................ 118.0 122.4 86.3 113.7 P erm its: Steel Ingot Production— (U. S )5------67.6 74.2 60.5 70.2 Chicago ....................................... .Number 303.6 404.7 325.9 343.9 Unfilled Orders U. S. Steel Corp....... Cost...... 484.3 512.4 376.1 385.7 Automobiles— (U. S.)— 271.2 278.6 202.3 243.9 Indianapolis ............................... .Number 251.2 277.6 282.4 339.8 Production : Passenger Cars.................. _ 158.4 176.1 125.0 135.3 Cost...... 193.3 264.2 184.4 233.7 Trucks ................................. 236.6 268.7 169.7 229.7 Des Moines ................................Number 206.9 284.3 271.6 305.9 145.5 145.6 83.5 96.3 Cost...... 166.7 168.1 156.5 223.6 Driveaways ...................... 398.0 257.7 245.8 122.5 261.2 285.1 268.9 275.2 Cost...... 247.0 252.9 242.8 291.0 166.6 185.1 195.6 166.0 Milwaukee ................................. .Number 197.3 206.5 234.6 224.6 New Automobiles ................................. 28.4 24.6 93.6 70.9 218.7 221.6 216.8 256.7 Cost...... New Automobile Trucks....................... 267.0 305.8 285.0 311.7 48.6 44.9 116.4 74.9 238.4 265.4 210.6 228.5 Cost...... Stamp Tax Collections®— 251.0 283.9 272.8 288.7 151.9 125.1 101.6 140.8 Fifty Cities ................................. .Number Sales or Transfers of Capital Stock..... Cost___ 315.0 336.6 270.4 297.0 99.6 108.8 30.1 39.4 Sales of Produce on Exchange—Futures 1. M onthly average 1920-1921=100; 2. Monthly average 1923=100; 3. M onthly average 1919-1920-1921=100; 4. M onthly average of mean of production and shipments in 1919=100; 5. Average daily production; 6. Monthly average 1920=100; 7. Base figures (1920) partly estim ated; 8. 7th F. R. D istrict; 9. F irst Illinois internal revenue district; 10. M onthly average receipts 1919=100. Page 8
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