The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK OF CHICAGO R E P O R T O F B U S IN E S S C O N D IT IO N S IN T H E S E V E N T H F E D E R A L R E S E R V E D IS T R IC T JULY 25, 1919 Compiled July 19, 1919 There is in evidence in some of the principal industrial centers of the Seventh Federal Reserve District a rather pronounced feeling of labor unrest; nor is this confined to skilled labor, but apparently involves all classes. In some instances it has resulted in strikes involving several thousand wage earners, or in cessation of plant activity because of a refusal to meet the labor demands for a higher wage scale. Chicago is just now in the center of this unrest, which appears to be an outcropping of the effect of the continued high cost of living. Disappointment over the absence of a general decline in prices of articles en tering into the household budget, and the actual advances in retail prices in some instances are contribut ing to a decidedly disturbed labor situation. In the industrial districts this unrest has manifested itself in the usual form. Some of the largest plants in Chicago have ceased operation because of labor troubles. One plant in which there had not been a labor strike in nearly three decades closed down, while demands for increased wages are pending in other indus trial plants. Traction Demands at Chicago. Demands were made by the employes of the Chicago elevated and surface street railway lines for a sharp increase in the wage scale. This met with opposition on the part of the employers, who did not oppose the increase in wages but took the position that such an increase in wages without a corresponding increase in fares spells bankruptcy for the elevated and the street railway companies which, because of the high costs of operation, have been showing earning3 insufficient to meet the usual normal time fixed and dividend charges. The State Utilities Commission had refused an increase in fare for the surface lines, although an increase of one cent (to a six-cent fare) was granted the elevated companies about a year ago. Failure to appease the street railway employes necessarily would seriously menance Chicago’s industries, because so large an element of the population is dependent upon this class of transportation to reach their places of business or employment. This led to bringing to bear every possible effort to avoid an interrup tion in Intra-mural transportation at this time. Building Operations Hampered. The building industry, which has been progressing since the Armistice, although in a hesitating manner, has been interfered with by the labor situation. The high cost of materials and high wages have been re tarding factors since the Government restrictions were removed from building operations, but despite this, these operations continue to show substantial gains from month to month over the corresponding period of the previous year, until in June Chicago’s building permits showed an increase of 180 per cent, over June of 1918. The requirements for housing, in consequence of the long period of limited building, were sufficient to insure active construction throughout the year, weather conditions permitting. The same situation prevails in nearly all of the important cities throughout the district. During the last fortnight the building trades in Chicago demanded an increase in wages varying in percentages. The demand of $1 an hour by the carpenters and the offer of the employers of 92% cents an hour caused unrest elsewhere in the building trades it is claimed by throwing wage scales out of line with each other, consequently certain trades became more insistent in their demands for further increases, running from 25 to 50 cents an hour. Furthermore, lumber has advanced in price, and the building situation, therefore, was very much disturbed. Carpenter contractors, upon the failure of the carpenters’ union to accept the 92% cents an hour minimum wage, locked out the carpenters, forcing out upwards of 100,000. The carpenters and other building trades, however, have asked for a conference with the building employers. Miners Want Big Pay. There is another feature in the labor situation which has a bearing on the future industrial activities of the district. Miners in the Indiana coal fields are demanding $7.00 a day minimum for a six-hour day and five-day week, with price and a aalf for overtime and double price for Saturdays, Sundays and holidays. It is reported that a similar demand will be made in the Illinois coal fields. The campaign to induce the early purchase of next winter’s supply of coal, to relieve the congestion at the mines and thus stimulate production for a time, is finding a better response; all classes of consumers new seem to realize the danger of a coal shortage thi3 winter. There has been an unusually heavy summer movement of the better grades for domestic purposes. Large users of steam coal who have been withholding the placing of contracts in the hope of securing lower prices now have abandoned that policy and are making arrangements for their year’s supply. Strong Demand for Packing House Products. Packing house stocks are heavier than a year ago but are being heavily drawn upon, consequently are diminishing somewhat. The domestic demand in all lines of packing house products shows a steady in crease, while the foreign demand is also stimulated and the movement to the interior countries and Central Powers of Europe is now on. Arrangements for financing seem to be progressing satisfactorily. The packers agreed to continue the war-time wages for a period of one year subsequent to the signing of the Peace Treaty, but there is some agitation for a demand by labor for a 30 to 50 per cent, increase. High Eecord Prices for Hogs Prevailing. Record prices on hogs are prevailing, while the market for cattle holds strong. There are some in the packing industry who look forward to a further 10 per cent, increase in hogs this fall, and 8 to 10 per cent, increase in cattle prices. Receipts during June at the principal markets compared with the corresponding month of the previous year showed a decrease of 21 per cent, in cattle, 9 per cent, in calves, and an increase of 20 per cent, in sheep. Prices for cattle in June, compared with a year ago, showed a decline of 9 per cent, for choice and 14 per cent, for common cattle. Prices for sheep showed a decilne of 30 per cent, and for lambs 16 per cent, com pared with the previous June. What Six Months Has Brought About. Receipts for the six months ended July 1 compared with the corresponding period of the previous year showed a decrease of 7 per cent, in cattle, an increase o f l per cent, in calves and an increase of 18 per cent, in sheep. Prices for cattle for the first six months of 1919 showed an increase of 20 per cent, for choice and 11 per cent, for common cattle, while the prices for sheep and lambs in the first six months showed a de cline of 12 per cent, and 4 per cent, respectively. The average price of beef and mutton for .the month of June compared with the corresponding month of 1918 showed a decline of 14 per cent, in beef, 28 per cent, in mutton and 11 per cent in lambs. This decline in live meat animals and the result in produce is attributed to the decreased prices in the local market, caused by cessation of demand to feed the armies of our Government and its Allies and the decrease in the domestic demand, due to the widespread desire to conserve inculcated in the previous months. The demand for pork, however, is very heavy. The receipts of hogs in June, compared with a year previous, at Chicago, Omaha, St. Joe, Milwaukee, St. Louis and East St. Louis, were 1,967,091; 1,451,028 in the previous June. Receipts of live stock at Chicago for the four weeks ended July 12, compared with the corresponding period of 1918, are as follows: Hogs Sheep 1919 ............................................................................. 1918 .................................................................................................................. Cattle 229,179 245,286 49.318 55,618 648,312 568.068 328,042 285,473 Increase .................................................................................................. *16,107 *6,300 80,244 42,564 •Decrease. Calves The trend of prices of live hogs and their products compared with a year ago for Chicago alone follows: Average price of live hogs June, 1918, $16.60; June, 1919, $20.40. Cash lard, June, 1918, ranged from $23.87% to $25.35, while in June, 1919, the range was from $35.67% to $38.85. Cash ribs in June, 1918, ranged from $21.35 to $23.50, while in June, 1919, the range was from $28.12% to $30. Merchandising and Manufacturing Conditions Active. Stocks of merchandise are comparatively low, being moved from merchants’ shelves about as rapidly as they can produce them. There is a shortage especially in the finer quality of materials and goods, for which there is an immense demand. This demand reflects itself in the rapid movement of inferior goods, “seconds,” and in substitutes which can be used to fill the gap. The public continues to buy heavily, regardless o f price, and the demand seems to be for quality, not withstanding that in many instances prices have trebled compared with 1912 and 1913. Raw materials are on hand in many plants, manufacturers being compelled to provide themselves with large stocks during the war, but apparently there is not much over-stocking and there is a healthy demand for manufactured pro ducts, which is rapidly assuming a pre-war basis. General business conditions are good in this district and there is a marked activity in all lines. Adverse Weather Conditions Affect Crop Yield. Reports of agricultural conditions throughout the district Indicate that the expected yield of some grains will not be entirely realized, due to rust and adverse weather conditions. The winter wheat crop is somewhat disappointing, averaging about 20 bushels per acre on threshings at date of report, while the spring wheat crop in this district is far from satisfactory. The acreage of both is very large, and this in part will offset the decline in yield. The corn crop is reported in good condition, and the promise is for a large production, while hay and forage crops have been exceptionally good. Foreigners Withdrawing Savings. There is a distinct movement on the part of the foreign element to withdraw and remit it to their native countries. Ordinarily this would be regarded as an when consideration is given to the enormous requirements of those countries, in funds as are sent abroad by aliens from this country tend to reduce the amount covered by credits later on. savings from the banks unfavorable feature, but the way of lr.ahs, such which may have to be Bank deposits as a whole, however, are increasing, and while the withdrawals by aliens have tended to hold down savings deposits, they are still making a satisfactory showing in the aggregate compared with a year ago. Activity in the farm land movement continues, with acre prices in all sections of the district steadily advancing as farmers reinvest the proceeds of previous sales, and necessarily this demand is attended by some participation by land speculators. There is a good and steady demand for money. The credit situation is regarded as generally good and collections are prompt. Investment bankers report a much better inquiry for municipal securities and wide selling of good bonds at attractive prices, with a prospect of improvement in the buying demand. How Banking Statistics Compare. Gross deposits of the twelve leading member banks in Chicago aggregated $1,027,900,000 on July 17, com pared with $991,000,000 on June 17 last, an increase of $36,900,000. Loans, exclusive of bonds, aggregated $635,300,000 on July 17, compared with $634,200,000 a month previous, an increase of $1,100,000. Chicago bank clearings for the first eighteen days of July (comprising fourteen business days), aggre gated $1,500,300,000, an increase of $173,443,000 compared with a year ago, while the exchanges at the nine teen leading clearing houses, outside of Chicago, for the first fifteen days of July aggregated $2,010,695,000, an increase of $11,415,000 compared with a year ago. SELECTED MEMBER BANK STATISTICS— SEVENTH DISTRICT (OOO’s Omitted) Chicago ------ 44 Member Banks Jan. 3. July 11. June 6. Loans— $74 950 $76,399 Secured by U. S. war obligations.$61,160 887,760 895,200 A ll other loans and investments. .846,008 Reserve Balance with Federal.......... 113,957 118,061 Reserve Banks .................................... 108,825 40,011 43,268 Cash in vault .......................................... 44,555 Deposits— 830,932 865,443 Net demand ........................................ 794,396 164,762 166,357 Time ........................................................ 149,859 98,499 50,262 Government ............................................ 13,962 Bills Payable and Rediscounts— 37,348 55,630 Collateral Notes ................................ 37,735 5,215 12,215 Bills Rediscounted .............................. 10,186 Detroit -12 Member BanksJan. 3. June 6. July 11. $ 8,720 $10,620 $12,517 244,085 261,098 281,407 Other 14 Member BanksJan. 3. June 6. July 11. $13,420 $16,369 $15,608 280,939 293,074 291,708 21,886 13,821 23,303 12,425 25,004 14,513 25,241 15,811 26,584 14,567 29,434 14,705 162,048 155,896 13,964 174,849 173,487 15,204 187,922 175,580 11,213 • 209,707 89,211 6,189 228,232 97,573 15,298 243,232 97,800 10,642 12,154 412 22 980 811 31,317 407 18,380 16,191 20,974 3 355 10,086 1,904 RECEIPTS AND SHIPMESTS OF IMPOKTAST COMMODITIES AT CHICAGO (OOO’s Omitted) -Receipts— May— — June— 1919 1918 1919 1918 Flour, barrels .............................................. 901 659 747 487 W heat, bushels ............................................ 1,727 190 856 126 Corn, bushels ................................................ 3 334 5,894 8.077 7,656 Oats, b u s h e ls ................................................... 5,838 9,030 10,113 8,208 27,301 16,764 29,835 Cured Meats, pounds.................................. 19,081 Fresh Meats, pounds................................... 107.948 100,527 125,734 96,826 10,057 23,355 9,753 Lard pounds . .................................. 24,142 Cheese, pounds ............................................ 18,961 12,028 22,807 17,411 Butter pounds .............................................. 29,266 20,780 46,331 36,173 Eggs, ’cases .................................................... 1.212 926 1,080 732 Hides p o u n d s................................................ 20,897 14,495 18,420 14,883 Lumber, 1.000 feet........................................ 162 252 184 230 Potatoes, bushels ........................................ 1,505 1,102 1,191 935 ■May— 1919 497 7,760 2,964 7,032 96,561 190,121 51,322 11,252 31,692 404 21,153 66 592 ■Shipments 1918 376 356 3,203 7,436 63,612 139,341 22,404 7,410 18,992 194 14,984 121 369 —June— 1919 501 1,040 2,228 6,211 118 564 256,126 58,736 16,186 33,700 243 16,021 80 454 1918 280 211 2,370 3,162 80,983 107,112 12,660 5,598 20,519 215 14,088 111 314 BUILDING PERMITS OF SEVENTH FEDERAL RESERVE DISTRICT CITIES ------ June, 1919------ No. of Buildings. ................... 52 ................... 900 ................... 110 ................... 84 ................... 143 ...................2,411 City. ................... ................... ................... ................... ................... ................... ................... ................... ................... ................... ................... 97 225 804 97 159 495 I ll 233 118 168 88 Terre Haute, Ind........................ Estimated Cost. $ 190.000 11,415 600 245,750 230,925 532.140 6,649.045 285,695 245,143 637,010 1,044,260 149,315 234,260 1,407,640 1,127,765 246 235 820,475 961,878 173,390 80,545 ------ June, 1918------ No. of Buildings. 25 277 67 33 66 899 4 42 108 420 59 20 301 26 22 35 91 49 75 Estimated Cost. 5 153,000 4,062 500 69,887 54,960 143,099 3,012,975 2,680 123,155 91,580 541,651 58,916 20,470 635,898 103 430 22,309 139.150 63,148 63,285 77,745 Per Cent. Per Cent. Gain. Loss. 24 180 251 320 271 120 10560 99 595 92 153 1044 121 990 1003 489 1421 174 3 COMPARATIVE STATISTICS OF BUILDING AND ENGINEERING OPERATIONS Contracts awarded in States north of the Ohio and east of the Missouri Rivers, from January 1 to July 1, 1919. $989,904,000 911.714.000 831.402.000 1919 1918 1917 1916 1915 1914 $596,583,586 413,532,600 382,532,000 1913 1912 1911 $472,372,500 406,011,000 416,227,813 Contracts awarded in Seventh Federal Reserve District States—Illinois, Indiana, Iowa, Michigan and Wisconsin—also Northern Missouri and Eastern Kansas. $401,195 000 188.343.000 344.419.000 1919 1918 1917 Note: 1916................................................ $219,237,086 1915................................................. 119 020,600 1914................................................. 104,656,000 1913 1912 1911 Building and Construction statistics compiled by the F. W. Dodge Company. $106,531,000 59.402,000 80,822,313
@FedFRASER