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BUSINE CONDITIONS A REVIEW BY THE FEDERAL RESERVE BANK OF CHICAGO^ 3 m Q Volume 24 JUNE 1 Number 5 19 4 1 V '*>-■ ■■ Fuel for Seventh District Industries NK 05 DIRECTORS AND OFFICERS Federal Reserve Bank of Chicago DIRECTORS Frank J. Lewis, Chicago, 111.. Clifford V. Gregory, Des Moines, la............Deputy Chairman Simeon E. Leland.................... .......... Chicago, 111. Max W. Babb .... Nicholas H. Noyes............... .Indianapolis. Ind. Walter J. Cummings........................... Chicago. III. E. R. Estberg.... ......................... Waukesha, Wis. Charles B. Van Dusen. . .. .... Detroit, Mich. Frank D. Williams.................... MEMBER OF FEDERAL ADVISORY COUNCIL Edward E. Brown......................... OFFICERS C. S. Young................................... H. P. Preston................................. J. H. Dillard................................. C. B. Dunn........................................ W. C. Bachman.. A. M. Black.......... N. B. Dawes.......... ..........Assistant, Vice President W. R. Diercks. .. ..........Assistant Vice President 0. J. Netterstrom. .. .Assistant Vice President A. L. Olson.......... A. T. SlHLER.... J. J. Endres............. P. C. Hodge................................. W. A. Hopkins......................... Mark A. Lies........................... F. A. Lindsten............................ L. F. .1. C. .Assistant Counsel . .Assistant Cashier . . G. Meyer................................ . L. PURRINGTON.................... . G. Roberts.......... ............. . M. Saltnes............................ . .Assistant .Assistant .Assistant .Assistant Cashier Cashier Cashier Cashier .Assistant Cashier .Assistant Cashier DETROIT BRANCH DIRECTORS Clarence W. Avery......................... Detroit, Mich. H. j. Chalfont... .............................. Detroit, Mich. James E. Davidson ............................Bay City, Mich. L. Whitney Watkins. Joseph M. Dodge.................... Walter S. McLucas............... Harry L. Pierson.................... .... Detroit, Mich. ... .Manchester, Mich. OFFICERS H. J. Chalfont. ..................Managing Director W. T. Cameron .. ......................... Assistant Cashier H. L. Diehl................................. . .Assistant Cashier A. J. Wiegandt......................... . .Assistant, Cashier District Summary of Business Conditions NDUSTRIAL activity in the Seventh district continues to show marked expansion, with the several major indus tries which had been hampered by labor disputes during April recovering rapidly in May. Further gains have been made in primary and subcontracting of national defense items in the district. Retail and wholesale trade continues at high levels, and income of farmers is being augmented by the substantially increased level of farm commodity prices. Industry—Operations in the iron and steel industry in the Seventh district made a quick recovery during the early part of May, after their operations had been reduced to 96 per cent of rated capacity April 26 because of the coal shortage. Mills were able to bring production up to the 102 per cent level by the week ended May 17. An inventory control plan, covering sixteen metals, was announced May 1 by the Priorities Division of the 0PM. Under this plan, supplies of these metals will be withheld from customers whose stocks exceed requirements for efficient operation. Maximum pride schedules issued in April were revised May 7 to eliminatelinequalities that were considered detrimental to marketing.Tncreased purchasing power and the fear that there might be delays in delivery have caused retail sales of automobiles to exceed usual seasonal expectations. Notwith standing the fact that the production of passenger cars and trucks during the first twenty-one weeks of 1941 exceeded any period in the past eleven years, dealers’ stocks of new cars are now estimated to be below those of a year ago. The trend in both employment and payrolls was upward during the month of April and, with the exception of coal mining, every reporting industry showed some increase in the number of workers employed. Wage increases would have raised payrolls more rapidly than employment had it not been for labor disputes during April in the coal mining and automobile industries. Both the durable and non durable goods showed a wide margin of gain over the 1940 level in employment and payrolls. Manufacturing industries as a whole showed a marked year-to-year increase, with employment up 24 per cent and payrolls up 34 per cent. There have been substantial gains in the building mate rials industries, notwithstanding the fact that construction contracts awarded in April returned to a more normal vol ume, following the March peak caused by letting of large contracts for the defense program. Construction of onefamily dwellings continued in good volume, contributing largely to increases over 1940 contract volumes. Agriculture—Conditions in the Seventh Federal Reserve district have been generally favorable to agriculture, with plantings throughout the corn belt making good progress. Development of wheat, oats, and other grain crops has been satisfactory. With the exception of lambs and cattle, prices of most farm products advanced sharply in May, influenced by legislation raising loan rates, sustained consumer de mand, and heavy Government buying of certain commodi ties. Production of dairy products has continued excep tionally heavy. Trade—Continued increase in consumer purchasing power is evidenced by the gain in retail trade throughout the dis trict. While it was expected that the April volume would be higher than that of a year ago, due to the fact that Easter sales were included in the April figures, there has also been a substantial gain throughout the first four months of the year. The largest increase was recorded in the Indianapolis trading area. Milwaukee and Detroit sales were also sub stantially larger. All lines of wholesale trade reporting to the Bureau of the Census recorded increases over April a year ago. Most of the gains were substantial, and the in crease for the district as a whole was 27 per cent. Credit and Finance—There has been a sustained demand for commercial loans throughout the district, reflecting the increase in industrial activity. Deposits of weekly reporting member banks followed the pattern throughout the country and showed an increase of $126,000,000 from April' 16 to May 14. A substantial increase in member bank reserves was accounted for principally by a gain through commercial transactions with other districts. SEVENTH DISTRICT BUSINESS APRIL 1941 COMPARED WITH SO 40 30 20 to INDUSTRY STEEL PRODUCTION.' MFG. EMPLOYMENT._ _ _ _ _ _ _ _ MFG. PAYROLLS BUILDING CONTRACTS._ _ _ _ MALLEABLE CASTING SHIPMENTS STEEL CASTING SHIPMENTS.__ FURNITURE SHIPMENTS PAPER SHIPMENTS____ AUTOMOBILE PR0D..U.S. BIT. COAL PROD..................... . ACTIVITY APRIL 1940 10 20 50 40 50 BO TO BO PER CENT DECREASE PER CENT INCREASE MINES IDLE-FIGURES NOT YET AVAILABLE AGRICULTURE FARM CASH INCOME?........... MEAT-PACKING PR0D.,U.S... CHEESE PR0D..WIS BUTTER PRODUCTION.... CATTLE RECEIPTS._ _ _ _ HOG RECEIPTS......... B ■ ■ ■ TRADE DEPT. STORE SALES DEPT. STORE STOCKS........... RET. SHOE SALES.___ RET. FURNITURE SALES WHOLESALE TRADE... ■ FINANCE MEMBER BANK RESERVES!.. REP. MEMB. BK. DEMAND DEPOSITS, AOJ.i.... REP. MEMB. BK. LOANS.?.... BANK DEBITS.................... , *?got rate> Chicago district, week ending May 17. 2. March data. 3. As of May 21. Page 1 Banks Report on Their Defense Loans RATE OF STEEL CHICAGO INGOT PRODUCTION DISTRICT PER CENT OF CAPACITY The extent to which banks in the Seventh Federal Reserve PER CENT OF CAPACITY district are being called upon to finance the defense pro gram is indicated in a study just completed by the Federal Reserve Bank of Chicago. The weekly reporting member banks in thirteen leading cities of the district reported a total of $211,146,000 in loans and commitments for na tional defense as of April 30. Actual loans outstanding on that date totaled $83,109,000, and the remainder of $128, 037,000 represented commitments for future loans. While the banks did not know exactly how many of their borrowing customers are actually engaged in manufacturing defense materials and therefore do not know what portion of their regular lines of credit are going into this effort, they did have definite records covering 617 commitments which were known to be for defense purposes. Of these com mitments, 483 had been converted into loans, and 134 were By weeks. Source: Iron age. unused lines of credit. That many of the borrowers were in need of additional plant facilities to complete their contracts is shown by the the effects of the impending coal shortage which was assum fact that 128 of the commitments were for construction, and ing serious proportions at the close of April. Steel mills in that there were 22 additional commitments for both con the Chicago area, which had reduced their ingot output from 102 to 96 per cent of rated capacity in the week of struction and supplies. The spreading of the defense program to subcontractors April 26, had pushed operations up to the 102 per cent level was revealed by the fact that loans and commitments were by the week of May 17. Blast furnaces which had been blown fairly well divided between prime contractors and subcon out or banked in April were restored to full operating capac tractors. The banks reported 342 commitments to prime ity as soon as possible after May 1, when it became evident contractors, 197 to subcontractors, 65 to firms acting as both that the coal mines would reopen shortly. While production was increasing, there was some evidence of prime and subcontractors, and 13 unclassified. The campaign to bring the small manufacturing plants a slowing down in the placement of orders, but despite this, into the defense program seems to have been carried out to volume of new business continued to be larger than ship considerable extent in the Seventh Federal Reserve district. ments, and backlogs of unfilled orders at mills continued Dollar amounts going to the firms rated at more than $1, to mount steadily. The lengthening of deliveries has reached 000,000 in assets are naturally larger than those going to a point where some mills are not able to accept orders on firms in the $100,000 to $1,000,000 class and, of course, many products. The necessity for rationing and preference much larger than those to firms with ratings of less than rating is becoming more insistent. Steel warehouses, at which $100,000. The number of loans and commitments for each business has hit new record levels for the past several group was divided as follows: to the smallest size group months, are now turning down orders from all but their 127, to the medium size group 238, and to the largest size regular customers because their own stocks are being de pleted. May 1, the Priorities Division of the OPM announced group 252. Maturities of the loans follow closely the pattern of other a plan for inventory control of sixteen metals, including commercial loans which the banks have on their books. The rolled, drawn, and forged steel, castings, and pig iron. Sup fact that the loans were for defense has not been the gov plies of these metals will be withheld from customers whose erning factor in determining the repayment date. Some 27 stocks exceed requirements for efficient operation. The sched per cent of the loans had a maturity of three months, 23 per ule of maximum prices on iron and steel scrap issued in cent were for one year, 10 per cent were for six months, and April by the Office of Price Administration and Civilian approximately 5 per cent were on demand. The shortest Supply was revised May 7, in order to eliminate inequalities loan was for two weeks and the longest had a maturity of eight and one half years with prepayments each six months. PRODUCTION OF PASSENGER CARS AND TRUCKS A list of items being financed would read like a census of goods manufactured in the entire country. They covered almost every conceivable item that could be used by the army, navy, or air corps. Grouped under the five major classifications used by the National Defense Advisory Com mission in tabulating defense contracts awarded, the totals are as follows: “Airplanes, engines, parts, and equipment” $35,299,000; “Ship construction and equipment” $7,543, 1939* 000; “Ordnance and ammunition” $74,050,000; “Construc tion other than ship” $24,993,000; and “All other equip ment, supplies and material” $69,261,000. Thirteen of the banks surveyed reported no loans for de fense purposes. THOUSANDS OF UNITS Industrial Activity Steel—In the early weeks of May, the iron and steel in dustry in the Seventh district staged a rapid recovery from Page 3 JAN. FEB. MAR. APR. MAY JUNE Data furnished by Ward’s Reports, Inc. JULY AUG. SEPT. OCT. NOV. DEC. that were considered detrimental to the marketing of this material. Automobile Industry—Retail sales of automobiles con tinued to mount during April and perhaps exceeded the record established in April 1929. Due to the industry’s par ticipation in defense activities and the possibility of in creased prices and taxes in the future, dealers continued to warn customers of delayed deliveries and have been booking sales now that would usually be deferred until the showing of the 1942 models. Increased purchasing power, due to em ployment in defense industries, is also contributing to heavy new and used-car sales. Manufacturers will probably con tinue the production of 1941 models well into July before considering a shutdown for changeover. Dealers’ stocks of new cars are now estimated to have dropped below those of a year ago for the first time this year, as a result of current trends in the industry. Production of passenger cars and trucks for the week ending May 24 was 134,000, about 6,000 more than the previous week, and the highest on record since May 15,1937. During the first twenty-one weeks of 1941, about 2,500,000 automobiles were produced, this amount exceeding the pro duction of any similar period in the past eleven years. Passenger car assemblies in the United States totaled 374, 979 in April, a decrease of 9 per cent from March, but an increase of 4 per cent over April 1940; 87,278 trucks were produced, showing a decrease of 11 per cent from March and a gain of 24 per cent over a year ago. Present estimates of 1942 model year production, accord ing to the Office of Production Management, will be a per centage of 1941 model actual output. Major producers such as Chrysler, Ford, and General Motors will turn out 78.5 per cent of their total 1941 model production, while mediumsize passenger car manufacturers or “independents” will produce 85 per cent, and truck producers will have a quota of 90 and 95 per cent according to the volume of their busi ness. Producers whose volume is less than 2,000 cars or trucks per year will not be curtailed. The OPM has warned that these quotas may be subject to downward revision. The OPM further has asked that the greatest possible econ omy be exercised in the use of such critical materials as neoprene, nickel, chromium, magnesium, ferrotungsten, nickel steel, zinc, copper, and aluminum. The bombing plane factory being constructed by the Ford Motor Company near Ypsilanti, Michigan, to produce parts, sub-assemblies, and complete B-24 Consolidated bombers, is one of the most recent armament projects of importance! Production estimates for this plant range from 100 to 270 bombers per month. Miscellaneous Manufactures—Demand for steel and malleable castings showed continued expansion in April, and the volume of new orders booked by Seventh district foundries greatly exceeded shipments, although these ship ments were stepped up appreciably and were especially heavy compared with the corresponding volumes of a year ago. Output was held in line with shipments and showed approximately the same upward trend. Defense work and increased railroad car building programs have contributed to the greatly increased demand for all types of castings. Stove and furnace manufacturers reported little further change in the rate of production and only a 10 per cent increase in shipments, despite the fact that the volume of accepted orders in April was 35 per cent larger than in March. The increase in this latter item was limited to a relatively small number of the reporting manufacturers, some of whose bookings of new business are practically con STEEL AND MALLEABLE CASTINGS _________SEVENTH DISTRICT Steel Castings: Orders booked (tons)__ Orders booked (dollars). Shipments (tons)............. Shipments (dollars)......... Production (tons)............. April 1941 Per Cent Change from March April 1941 1940 . +23 +386 . +16 +401 . +10 + 69 . + r + 90 . +9 + 80 Malleable Castings: Orders booked (tons)__ Orders booked (dollars). Shipments (tons)............. Shipments (dollars)......... Production (tons)............. +14 +14 +14 +15 +20 +168 +173 + 78 + 80 +103 fined to a few months of the year. Molding-room operations were maintained at a level almost 30 per cent above that of a year ago and shipments for the year to date have been 40 per cent larger than last year. Furniture manufacturers continued to maintain operations at the same level as in recent months, but with the increases over a year ago becoming steadily larger. Orders received during April were still somewhat heavier than shipments, but this was practically offset by cancellations of orders, so that the volume of unfilled orders remained unchanged. The backlog of unfilled orders at the end of April was more than twice as large as in 1940. Operations were at 85 per cent of capacity, 8 points above the rate reported last year. Building—-Construction contracts awarded in the Seventh district during April returned to a more normal volume, fol lowing the peak reported in March when construction inci dental to the defense program raised that month’s total to a level about as high as that prevailing in the active months of 1929. The April volume, while little more than one half as large as in March, was still unusually high, exceeding any other month since June 1930. Residential awards expanded seasonally, with most of the gain in the construction of onefamily dwellings for direct ownership rather than for the speculative purpose of rent or sale. While awards for build ing of this latter type showed a relatively minor increase during the month, the actual volume of such awards continues important, constituting about 40 per cent of all residential building. Non-residential awards declined by the greatest amount, as it was in this field that the defense projects had constituted the main portion of the contracts a month earlier. Publicly-financed heavy engineering projects also registered a sharp decline in April from the previous month but totaled about 10 per cent larger than April 1940. Building permits issued during the month reflected sub stantial increases in building activity. In 102 cities reporting for the district, the number of projects totaled 59 per cent and estimated cost 13 per cent higher than in March. Com pared with a year ago, the gains amounted to 19 and 28 per cent, respectively. Michigan cities alone did not follow the rising trend in estimated cost over the preceding month, and Iowa cities showed no increase over last year’s permit volume. Further substantial gains in volume of business were gen erally reported by building material industries in the district. BUILDING CONTRACTS AWARDED SEVENTH FEDERAL RESERVE DISTRICT Period Total Contracts Residential Contracts April 1941............................................................. Change from March 1941.................... Change from April 1940........................................... First four months of 1941.............................................. Change from same period of 1940............................ $71,266,000 -46% +17% *298,399,000 +85% $33,658,000 +15% +31% *100,464,000 +49% Data furnished by the F. W. Dodge Corporation. Page 3 tylLLIOMS of dollars CONSTRUCTION CONTRACTS By months, January 1934 through April 1941. Corporation. AWARDED Data furnished by F. W. Dodge Lumber sales totaled about 20 per cent higher at wholesale and 40 per cent more at retail than in March. Shipments of brick, according to one of the largest manufacturers within the district, rose 50 per cent above March and exceeded in volume any single month’s deliveries in the past ten years. The construction of small homes constituted the source of the greater part of this demand. Cement shipments registered a similar substantial increase over the previous month but showed a somewhat less marked gain over a year ago, at which time the requirements for the construction of public works and utilities were in almost as large a volume as in April 1941. Sales and shipments of other building materials continued well in excess of the corresponding period a year ago. Bituminous Coal Production—Coal mines in the Sev enth district area were generally idle throughout the month of April, although the shutdown was not so complete as in the Appalachian region. The United States Department of In terior reports an approximate production of only 6 million net tons of bituminous coal in the country as a whole, as against 48 millions in March and 33 millions in April a year ago. District figures as to the tonnage mined are not yet available, but payrolls at mines reporting for this district were only 16 per cent as large as those recorded a month earlier. Stocks were sharply depleted during the month and industries faced curtailment when a temporary agreement was finally reached on May 3 that enabled the mines to reopen. Petroleum Refining—Runs of crude oil to stills in the Ulinois-Indiana-Kentucky area decreased slightly in April from the preceding month—about 4 per cent on a daily average basis—while gasoline production continued at al most the same high rate as previously. Consumption of gaso line increased sharply in April, compared with both the previous month and a year ago, and stocks showed an ap preciable curtailment. This decline in stocks was the first recorded since last September and brings down the volume approximately to the level of a year ago. The demand for petroleum products was increasingly stronger in May and prices were firm. Employment and Payrolls Trends in employment and payrolls at Seventh district in dustries for April reflected both continuation of industrial Page 4 expansion and the effect of the unsettled labor situation and disputes in several important industries. Settlement of a number of such disputes had been reached in the interval between the mid-March and mid-April payroll reporting periods, bringing about a substantial increase in employ ment and payrolls over the previously reported figures. This accounted for a considerable portion of the gains shown in the accompanying table for the metals and products group, where the increase was the most pronounced for any monthto-month comparison since the fall of 1938. In several in dustries, plants had been closed pending a settlement of various disputes, and employment and payroll figures were sharply lower. The situation at the two large Ford Motor Company plants was responsible for the lack of any appre ciable expansion in employment and a marked decline in wage payments in the vehicle group. There was a complete shutdown at these plants for ten days in early April, and the workers were still in the process of returning to work at the time of the current reports. At coal mines, which were generally closed throughout April, employment and payrolls were only a small fraction of what they had been a month earlier. Aside from these unfavorable factors, the trend in both employment and payrolls was upward. Except for coal min ing, every reporting industry group showed some increase in the number of workers employed. Wage-rate increases were frequent and would have raised payrolls more rapidly than employment except for the loss in wages at the two plants noted above. The non-durable goods classification advanced to a level 7 per cent higher than a year ago in number of workers and 12 per cent higher in wage payments. Durable goods also widened the margin of gain over 1940 levels, showing a year-to-year increase of 30 per cent in employment and 40 per cent in payrolls. Number of wage earners and wage payments at manufacturing industries as a whole were 24 and 34 per cent, respectively, ahead of a year ago. Employment and payrolls at non-manufacturing industries continued to expand despite the losses due to the closing of the coal mines. The construction industries, merchandising, and public utilities reported substantial increases, and the EMPLOYMENT AND PAYROLLS—SEVENTH FEDERAL RESERVE DISTRICT Week of April 15, 1941 Industrial Group Per Cent Change from Mar. 15,1941 Wage No. of No. of Payments No. of Wage Reporting Employes (000 Employes Payments Firms Omitted) Durable Goods: Metals and Products1............ Vehicles................................... Stone, Clay, and Glass........ Wood Products...................... Total......................................... 1,723 382 249 435 2,789 532,634 432,881 18,597 53,077 1,037,189 $18,234 16,005 515 1,270 36,024 + + -f + + 6.8 0.4 3.8 0.9 3.7 + — + — — 9.0 9.1 9.1 0.5 0.2 Textiles and Products........... Food and Products............... Chemical Products............... Leather Products.................. Rubber Products................... Paper and Printing................ Total........................................ 370 1,021 295 166 31 687 2,570 68,887 108,499 38,353 29,347 17,737 79,816 342,639 1,414 2,959 1,234 692 490 2,464 9,253 + + + + + + + 13 3.3 3.0 0.7 4.4 1.4 2.2 — + + + + + + 0.0 4.9 3.3 0.5 0.6 0.9 2.3 Total Mfg., 10 Groups.............. 5,359 1,379,828 45,277 + 3.3 + 0.3 Merchandising............................ Public Utilities.......................... Coal Mining................................ Construction............................... 5,327 1,001 50 694 151,582 106,232 2,131 11,522 3,472 3,680 42 419 + 4.6 + 2.1 —72.6 +14.8 + 5.6 + 3.5 —82.6 +24.7 Non-durable Goods— Total Non-Mfg., 4 Groups....... 7,072 271,467 7,613 + 1.8 + 2.6 Total, 14 Groups....................... 12,431 1,651,295 $52,890 + 3.1 + 0.6 1Other than vehicles. Data furnished by State agencies of Illinois, Indiana, Michigan, and Wisconsin. aggregate rise over March for the non-manufacturing classi fication amounted to slightly more than usual at this season. Trade Trends Department Stores—The substantial gain of 20 per cent shown for April 1941 in Seventh district department store sales over the corresponding month of 1940 was partially due to the late date of Easter. A large part of the Easter trade was included in the first two weeks of April 1941, whereas in 1940 all of it was included in March. Among the larger cities, Indianapolis, with a gain of 29 per cent, showed the largest increase; Milwaukee and Detroit sales were about 20 per cent above those of April 1940; and sales in Chicago gained 14 per cent in the same comparison. Cities located in the industrial areas of Michigan and Indiana continued to show large sales volumes. Cumulative sales for the first four months of 1941, compared with the same period of 1940, indicated an increase of 19 per cent at Detroit; 17 and 16 per cent, respectively, at Indianapolis and Milwaukee; and 7 per cent at Chicago. For the district as a whole, sales, gained 13 per cent. Department store in ventories on April 30, 1941 were approximately 5 per cent above a year ago, but only one per cent greater than March SALES OF INDEPENDENT RETAIL STORES (As compiled by the Bureau of the Census) April 1941 Compared with April 1940 (Per Cent Change) Indiana Iowa Michigan Wisconsin +30 +15 +21 +21 +49 +33 +28 +42 +10 + 8 +17 +10 + 9 + 9 +12 +10 +12 + 3 +10 +8 +28 + 9 +20 +31 +24 + 9 +28 +28 +44 +21 +29 +37 +17 +17 +35 +21 +61 +15 +23 +50 Illinois Total All Groups*................................. +17 Apparel Group....................................... +34 Drug Stores........................................... +9 Eating and Drinking Places............... +5 Food Group........................................... + 5 Furniture-Household-Radio Group. +15 Hardware Stores.................................. +15 Jewelry Stores........................................ +23 Lumber and Building Materials........ + 7 Motor Vehicle Dealers........................ +20 •Includes classifications other than those listed. WHOLESALE TRADE IN APRIL 1941 April 1941 Compared with April 1940 ________ (Per Cent Change)________ Accounts Net Sales Stocks Outstanding Collections Commodity Drugs and Sundries...................... Electrical Goods........................... Groceries......................................... Hardware...................................... Jewelry............................................ Meats and Meat Products......... Paper and Its Products............... Tobacco and Its Products........... Miscellaneous.................................. +12 +62 +12 +35 +47 +46 +22 + 5 +35 + 4 +29 +12 +15 +17 +14 + 2 — 1 +11 +n +65 +14 +18 +22 +40 +10 + 1 +24 + 2 +65 +14 +30 +37 +67 +14 + 3 +33 7th District.................................... +27 +13 +21 +27 Data furnished by Bureau of the Census, United States Department of Commerce. DEPARTMENT STORE TRADE IN APRIL 1941 Locality April 1941 Compared with April 1940 (Per Cent Change) Net Sales Chicago........................ Fort Wayne.................. Des Moines.................. Grand Rapids............. Milwaukee.................... Other Cities................. +14 +18 +40 +29 +10 +13 +20 +31 +20 +39 +21 +30 +20 Stocks End of Month + 7 +12 +4 +9 + 7 +i +'6 + 4 First Four Months 1941 Compared With Four Months 1940 (Per Cent Change) Net Sales + 7 +11 +24 +17 + 5 + 7 +19 +29 +12 +25 +16 +18 +13 Sales for the three-week period ended May 17, 1941, as reported by the larger stores in the district, indicate an in crease of 14 per cent over the corresponding period of 1940. The larger gains by cities were shown by Detroit and Mil waukee. those of 1940. Stocks, as reported by dealers, rose 3 per cent over March, but were 9 per cent below April 30, 1940. After three months of unusually good business, furniture sales by district dealers and department stores for April totaled only 11 per cent above the corresponding month of 1940. The increase shown in each of the first three months of the year had been greater than 22 per cent. Dealer sales showed a larger gain than those of department stores. Cumu lative sales for the four months of the year were 23 per cent greater than total sales for the corresponding 1940 period. Wholesale Trade—All wholesale trade lines in the Sev enth Federal Reserve district reporting to the Bureau of the Census recorded increases over April 1940. Most of these gains were substantial, and for all reporting lines as a whole, a year-to-year gain of 27 per cent was shown. This was the largest increase in this comparison recorded so far in 1941. For the fourth consecutive month, increases in the electrical goods trade surpassed the one shown the month previous. This group registered the largest gain in the disDEPARTMENT Miscellaneous Retail Trade—Business of reporting ap parel stores in this district followed the trend shown by department stores. April sales were 23 per cent better than a year ago. Sales for the first four months of the year totaled 11 per cent above the same period of 1940. At the close of the month, apparel store stocks were 3 per cent higher than April 1940, but 2 per cent below the previous month. Following the unfavorable showing made in March, retail shoe sales, as reported by dealers and department stores in this area, were 36 per cent larger in April than a year ago, and 30 per cent above March 1941. As was the case in de partment store trade, the lateness of Easter was an important factor in these sharp gains. Sales of shoes by both dealers and department stores showed about the same year-to-year increase, but compared with March, dealer sales were 67 per cent greater, whereas those of department stores showed an increase of only 20 per cent. Cumulative sales of shoes for the four months of this year totaled 11 per cent above 1935 1936 193"7 STORE 1938 SALES 1939 1940 1941 Indexes of daily average sales of department stores in the Seventh district, with and without adjustment for seasonal variation, 1935-1939 average=100. By months, January 1934 through April 1941. Page 5 trict, as April sales were 62 per cent over those of April 1940. Meat and its products, hardware, and jewelry groups also continued to show substantial gains. With the exception of tobacco and its products, all important groups carried inventories above the corresponding month a year ago. The aggregate for all groups showed an increase of 13 per cent. Compared with March 1941, however, a slight decline was recorded. The Agricultural Situation By the middle of May, most Seventh district crops were progressing rapidly. In the Southern sections, corn planting by May 18 was practically completed, while in the Northern areas, seeding of corn was getting well under way. Condition of the growing corn varied from fair to unusually good. Progress of winter wheat, oats, and other grain crops was generally good. Grain Marketing—Following numerous wide swings but little net change in April, domestic wheat prices advanced sharply in the first half of May, until by mid-month prices were at about the highest level in a year. The early May advance of close to 10 cents per bushel was largely asso ciated with progress and passage by Congress of legislation providing for mandatory loans at 85 per cent of parity on wheat, corn, cotton, tobacco, and rice. As of mid-April, par ity prices for wheat were $1.14 and about 83 cents for corn; these levels would call for loan prices of approximately 97 cents per bushel for wheat and 70 cents for corn. MOVEMENT OF GRAIN AT INTERIOR PRIMARY MARKETS IN THE UNITED STATES (In thousands of bushels) Wheat* Receipts.............................................. Shipments........................................... Com: Receipts.............................................. Shipments........................................... Oats: Receipts.............................................. Shipments.......................................... April 1941 March 1941 April 1940 April 1931-40 Avg. 17,100 11,685 12,903 9,376 29,424 8,890 13,772 11,034 16,930 14,229 18,811 9,269 11,058 10,019 14,210 10,569 4,381 3,264 4,661 3,825 4,257 4,430 4,857 6,377 There was considerable buying of futures by mills to cover heavy purchases of flour by bakers and distributors, but volume of open contracts was reduced slightly over the first half of May. The referendum to be held May 31, at which time wheat farmers will be called to vote on the question of whether marketing quotas shall be set for the 1941 crop, was a further complicating factor. Corn prices generally followed the action of wheat, and fluctuation was largely motivated by the same factors. By mid-May, prices were the highest since 1937. Planting throughout the corn belt made generally good progress, though interrupted by general rains in mid-May. So far this season, rainfall in the Western part of the belt has been excessive, in the Eastern part deficient. As prices of corn advanced, sales by the Commodity Credit Corporation in creased, and the offering basis was reduced. The amount of corn redeemed or placed under loan has been small, and marketings by farm holders were restricted by farm activity. The 1941 winter wheat crop was estimated by the Depart ment of Agriculture at 653 million bushels on the basis of May 1 condition. This is 37 million bushels higher than the month-earlier indication, and the trade news suggests that the outlook improved after May 1. If the spring wheat yield should be about average on the basis of indicated acreage, the total 1941 wheat crop would approximate 850 million bushels. This would compare with a crop of 817 million bushels last year, and with an anticipated July 1 carryover Page 6 CROP PRODUCTION Estimated by the United States Department of Agriculture on May 1 Condition (In thousands of bushels) Five States Including Seventh District United States Final Average Forecast Final Average Forecast 1941 1940 1930-39 1941 1940 1930-39 Winter Wheat.................. 82,349 95,667 90,957 653,105 589,151 569,417 Rye................................... 5,970 7,120 8,464 45,623 40,601 38,472 of about 400 million bushels; total supplies would be about 1,250 million bushels. The total supply in the 1940-41 crop year was 1,099 million bushels. Dairy Products—New records in the United States are being set this spring for the production of milk and dairy products. This reflects a combination of factors, among them excellent early pastures, relatively low prices for feeds, and the best prices for dairy products in more than a decade. Milk production increased more than seasonally during April and continued heavy during May. April production of milk in the United States was about 12 per cent above the five-year (1935-39) average for the month and 6 per cent higher than last year. Output of creamery butter for the country as a whole during April showed an increase of 8 per cent over last year, and weekly reports for early May indicate even greater year-to-year gains. American cheese production for April was almost 10 per cent higher than a year ago. Large quantities of cheese, evaporated milk, and dry skim milk have been purchased by the Department of Agriculture under the program announced in early April. This has also been a substantial factor in increased prices. Cheese prices strengthened considerably in April and the first half of May, and by mid-May were at the best levels for the season since 1930. Butter prices declined slightly in mid-April but then were steadily strong, wholesale quotations for 92-score butter at Chicago advancing about 3 cents from mid-April to mid May. Retail milk prices have moved upward in many cities, and milk sold for city use has not shown the usual seasonal decline. As of May 1, pastures in the Seventh district were gen erally in excellent condition, and record milk production per cow was reported from Wisconsin, Iowa, Illinois, and Michigan. Reports from district creameries indicated an out put of creamery butter during April about 6 per cent higher than last year, while production of American cheese in Wisconsin, as estimated from receipts at primary markets in that State, was also up about 6 per cent over last year. Livestock and Meat Packing—Following the sharp ad vance in early April, hog prices weakened a little, but in the first three weeks of May, hog prices advanced strongly; the LIVESTOCK SLAUGHTER (In thousands) Cattle Yards in Seventh District: April 1941............................................. ....... April 1940............................................. ......... Hogs Lambs and Sheep 203 221 666 635 224 261 87 93 Federally Inspected Slaughter, United States: April 1941....................................................... March 1041........................................... ........ April 1940............................................. ........ 792 766 774 3,807 3,904 3,610 1,436 1,408 1,355 507 444 480 AVERAGE PRICES OF LIVESTOCK (Per hundred pounds at Chicago) Week Ended May 24, 1941 Native Beef Steers (average)........................... $10.00 Fat Cows and Heifers........................................ 9.20 Calves.................................................................... 10.50 Hogs (bulk of sales)............................ ............... 9.30 Lambs.................................................... ............... 9.75 April 1941 $10.60 9.20 10.00 8.35 10.80 Months of March 1941 $10.80 9.00 9.75 7.65 10.90 April 1940 $9.40 7.90 9.25 5.40 10.15 average for the week ended May 24 was $9.30 per hundred of the Government’s expenditures by taxation and one third weight, and on several days the average reached $9.40. This by borrowing has been well received in investment circles. was about $3.75 higher than the average for May of last Moreover, the decision to do as much as possible of this bor year. Heavy purchases of pork and lard by the Department rowing by placing defense savings bonds with the public of Agriculture, as well as continued strong consumer de rather than with the commercial banks has been encouraging mand, have been chief factors supporting hog prices in the to bond holders. past two months. Prices of slaughter cattle, particularly of Governments which had risen sharply during the the better grades, have been weak, while calves and feeder second and third weeks of April have declined through the cattle have strengthened considerably. Hog marketings de middle of May, marking time in anticipation of an offering creased slightly in April, while those of cattle and calves of Government securities. The new 2y2 per cent Treasury increased seasonally. bonds of 1952-54 series, brought out at par March 18 of Production of packing-house commodities in the United this year, sold at a high of 104.6, May 14. The income from States showed little change from March to April, while the this series is subject to all Federal taxes. tonnage sold declined slightly. Reflecting continued higher After a four-week rise, railroad bonds in the more specu prices, dollar sales by major packing concerns increased lative group turned weak and sold at their levels prevailing slightly in April, and were as much as 43 per cent higher in mid-April. The utility bond market has shown little ac than last year. Foreign trade in meat products continued tivity and price changes have been small. greatly reduced, although a substantial portion of the Gov ernment purchases may go to England. Latin American Treasury Financing—May 22, the Treasury announced trade in April was generally quiet, although sales to Cuban for cash subscription at par the offering of $600,000,000 buyers expanded considerably. of 2y2 per cent bonds due 1956-58. The Treasury also of fered holders of $834,000,000 of 3% per cent Treasury bonds due August 1 the privilege of exchanging them MEAT PACKING—UNITED STATES for additional amounts of the bonds now being offered for Per Cent Change in April 1941 cash subscription, or for an additional issue of the % per from April cent Treasury notes of Series D 1943, dated March 15, March April 1931-40 1941 1940 Avg. 1941, and maturing March 15, 1943. The cash subscription Tonnage produced............................................................... —0.3 +7.0 +20.6 books were closed the same day they opened, with a heavy Tonnage sold........................................................................ —3.4 +3.8 +16.8 Dollar sales.......................................................................... +1.8 +24.6 +43.5 over-subscription. Inventories, end of month................................................. +0.8 +25.3 +43.4 Credit and Finance Weekly Reporting Member Banks—Demand for bank credit continued to expand throughout the four-week period from April 16 to May 14. Commercial, industrial, and agricultural loans of weekly reporting member banks in the Seventh Federal Reserve district registered a gain of $29, 000,000 during the period and were $223,000,000 higher than one year ago. The increase resulted from a higher volume of business and from the activity of the defense program. This is significant as other loans, particularly those to brokers and dealers in securities, fell $14,000,000, making the net gain in total loans only $15,000,000 for the four weeks. Total investments declined $32,000,000. Holdings of United States bonds and obligations guaranteed by the United States Government were increased $63,000,000, but this increase was more than offset by a decline of $64,000, 000 in Treasury bills, $29,000,000 in Treasury notes, and $2,000,000 in other securities. Demand deposits have been following the pattern throughout the country; the increase during the period was $126,000,000. The entire district had a net increase in member bank reserves of $97,720,000, which was accounted for prin cipally by a gain of $157,000,000 through commercial transactions with other districts. The largest single offsetting factor was an increase of $56,000,000 in demand for cur rency. Security Markets—The care with which a comprehensive plan for financing the defense program is being worked out has had a stabilizing effect on high-grade bond prices. The prospect of financing such a large-scale effort as the defense program would normally disturb the market, but a series of announcements have been reassuring to bond buyers. Among other things, the Treasury’s plan to cover two thirds MONTHLY BUSINESS INDEXES Data refer to Seventh District and are not adjusted for seasonal variation unless other Apr. wise indicated. 1941 1935-39 average = 100 Manufacturing Industries: Durable Goode: Employment................................................. Payrolls................................................... ’ Non-Durable Goods: Employment................................................. Payrolls.................................................... ’. ’ Total: Employment................................................. Payrolls............................................... Pig Iron Production:* Illinois and Indiana......................................... Automobile Production—(U. S.): Passenger Cars................................................. Trucks................................................................ Casting Foundries Shipments: Steel—In Dollars............................................. In Tons.................................................. Malleable—In Dollars.................................... In Tons.................................. Stoves and Furnaces: Shipments.......................................................... Furniture Manufacturing: Orders in Dollars............................................. Shipments in Dollars...................................... Paper Manufacturing:* Tonnage Production........................................ Petroleum Refining—(Indiana, Illinois, Kentucky Area): * Crude Runs to Stills........................................ Gasoline Production...................................... Bituminous Coal Production:* Dlinois, Indiana, Iowa, and Michigan......... Building Contracts Awarded: Residential........................................................ Total................................................................... Meat Packing—(U. S.): Production......................................................... Sales Tonnage................................................... Sales in Dollars................................................ Department Store Net Sales:* Chicago.............................................................. Detroit............................................................... Indianapolis....................................................... Milwaukee......................................................... Other Cities...................................................... Seventh District—Unadjusted..................... Adjusted.......................... Mar. 1941 Feb. 1941 Apr. 1940 Mar. 1940 Feb. 1940 140 167 135 163 132 159 108 119 110 119 110 120 106 118 103 115 102 113 96 101 97 102 96 103 129 152 124 148 122 145 104 113 105 114 106 115 188 196 193 117 118 141 143 147 157 164 151 153 138 119 135 119 129 111 228 184 202 182 213 168 176 159 195 160 162 148 120 109 113 103 128 116 114 105 160 156 129 123 149 132 94 107 84 73 168 163 157 160 160 142 95 111 98 118 97 110 129 120 120 107 103 107 140 133 146 135 147 135 135 128 138 129 139 127 _i 150 136 85 109 130 292 181 254 333 178 110 222 155 177 110 104 83 121 119 122 121 124 120 114 108 112 113 119 98 116 115 95 121 109 93 113 125 140 128 128 120 118 103 118 124 115 109 109 116 92 101 97 89 93 94 112 100 105 109 107 104 103 104 97 100 113 98 101 99 101 85 83 83 78 84 84 100 •Daily average basis. lMines mostly idle. Figures not yet available. Page 7 Savings Bonds—A total of $257,646,000 from the first seventeen days’ sale of savings bonds has been turned into the Treasury by post offices and banks. These sales, covering the period from the opening of the defense savings pro gram, May 1, to the close of business May 17, are made up of the following items: Series E bonds $61,658,000; Series F bonds $28,221,000; and Series G bonds $167, 767,000. Current Events Charles B. Dunn, General Counsel to the Federal Reserve Bank of Chicago, spoke before the American Corn Millers’ Federation at the Chicago Towers Club, May 14, on the subject, “The Federal Reserve System and the Present Monetary Situation.” Mr. Dunn also spoke before the Michigan Bankers Association, Group 9, at Ann Arbor, Michigan, May 19. A. L. Olson, Assistant Vice President of the Bank, was invited to speak before the Chicago Association of Com merce, May 14, on the subject, “Defense Loans,” and before the Chamber of Commerce of Kalamazoo, Michigan, May 13, on the subject, “Defense Contracts.” A. T. Sihler, Assistant Vice President in charge of the Fiscal Agency Department of the Federal Reserve Bank of Chicago, spoke on “The Savings Bond Program” before Group 8 of the Michigan Bankers Association at St. Joseph, Michigan, May 9, and before the bankers of the Southeast ern section of Chicago at the Saddle and Sirloin Club, May 12. He also spoke on “Defense Financing” at a meeting of the Chamber of Commerce of Kalamazoo, Michigan, May 13. Edward J. Pentis, Supervisor of the Registered Bond Divi sion, spoke before the Czechoslovak Building and Loan League on the subject, “The Savings Bond Program.” Selected Seventh District Banking Data * • • FEDERAL RESERVE BANE OF CHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions) Change from fay 21, April 16, May 22, 1941 1941 1940 Total bills and securities................................................. $251 $ 0 $—20 U. S. Government securities direct and guaranteed: 0 —29 94 Notes............................................................................... +9 157 0 Bonds............................................................................... Total Government securities.................................. 251 0 —20 3,208 +187 +523 Total Reserves.................................................................. +123 Member bank reserve deposits...................................... 1,849 +110 All other deposits............................................................. 181 +2 +82 1,386 +56 +290 Federal Reserve notes in circulation............................ Ratio of total reserves to deposit and +2.1* Federal Reserve note liability combined............... 93.9% +0.9* ♦Number of points. CONDITION OF REPORTING MEMBER BANES SEVENTH DISTRICT (Amounts in millions) Change from May 21, April 16, May 22, 1941 1940 1941 Assets . Loans—total.......................................................................... . Commercial, industrial, and agricultural loans............. . Open-market paper.............................................................. . Loans to brokers and dealers in securities...................... . Other loans for purchasing or carrying securities.......... . Real estate loans.................................................................. . Loans to banks..................................................................... . Other loans............................................................................ . IT. S. Treasury bills............................................................. . U. S. Treasury notes........................................................... . U. S. Treasury bonds................................................ ........ . Obligations fully guaranteed by U. S. Government... . Other securities..................................................................... . . New Member Banks Five State banks in the Seventh Federal Reserve district were admitted to the System in the period from April 15 to May 15, 1941. One primary organization, the Northwest National Bank of Chicago, was authorized, making a total of six new members. The entire number of Seventh district members is 879. Those recently admitted are: Northwest National Bank of Chicago, Chicago, Illinois The State Bank of Andrews, Andrews, Indiana The Garrett State Bank, Garrett, Indiana The Hope State Bank, Hope, Indiana Commonwealth Bank, Detroit, Michigan Denmark State Bank, Denmark, Wisconsin Page 8 $+3 +31 +35 —1 —14 0 +1 0 +10 —37 —35 +25 +20 —1 +130 $+624 +296 +234 +7 —2 —7 +15 0 +49 +54 —69 +206 +53 +84 +114 3,314 1,006 1,382 126 May 1-21, 1941 . 18.55 +182 —1 —46 -5 April 1941 19.39 +555 +39 +122 —9 May 1940 19.63 Liabilities . . . . U. S. Government deposits. Official Appointments During May The Board of Directors of the Federal Reserve Bank of Chicago, at its meeting May 22, approved the following changes in official titles and appointments to the official staff at the Federal Reserve Bank of Chicago, effective May 23: Neil B. Dawes, Assistant Cashier, was appointed Assist ant Vice President. Mark A. Lies, Chief of Service Departments, was ap pointed Assistant Cashier. W. R. Diercks, Chief Examiner, was given the addi tional title of Assistant Vice President. New appointments at the Detroit Branch were: W. T. Cameron, Supervisor of Audits, was appointed Assistant Cashier. A. J. Wiegandt, Chief, Check Department, was ap pointed Assistant Cashier. $3,957 1,243 803 46 35 67 133 0 159 315 220 1,242 320 617 2,239 BANE DEBITS, SEVENTH DISTRICT (Amounts in millions) Chicago............................ .... Dos Moines...................... .... Detroit............................. .... Fort Wayne..................... .... Grand Rapids................. .... Indianapolis..................... .... Milwaukee....................... ....... Peoria............................... .... South Bend..................... ....... 32 smaller cities.............. .... Total 41 cities................. .... Per Cent April Change from April 1940 1941 $3,553 +13 113 +8 +29 1,293 +23 41 67 +13 +32 279 +17 306 +17 74 63 +17 +21 628 8,407 +18 * • First Four Months of 1941 $13,866 423 5,039 149 259 1,019 1,248 270 210 2,373 24,858 Per Cent Change from Same Period 1940 +12 +8 +27 +17 +12 +21 +15 +17 +26 +17 +16 * VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS FEDERAL RESERVE BANE OF CHICAGO Average for Each Banking Day during Items Handled April 1941 April 1940 Commercial checks............................................. 530,000 487,000 Non-cash collections (Bills, notes, bonds, coupons, etc.) 2,009 2,005 Paper currency received and counted............. 1,449,000 1,039,000 Coins received and counted............... 556,000 430,000 Wire and other transfers of funds*(Inter- and intra district) ....................................... 522 473 Securities in and out of safekeeping.................. 1,258 1,057 Coupons cut from securities in safekeeping... 1,965 1,773 Dollar Amounts Commercial checks............................................. 119,102,000 Non-cash collections (Bills, notes, bonds, coupons, etc.) 3,261,000 Paper currency received and counted.............. 5,536,000 Coins received and counted............................... 72,682 Wire and other transfers of funds (Inter- and intra district).............................................................. 91,485,000 Securities in and out of safekeeping................. 26,666,000 Value of securities held in safekeeping at end of month 909,118,000 94,870,000 2,852,000 4,372,000 56,175 71,711,000 23,230,000 964,182,000 INDUSTRIAL PRODUCTION National Summary of Business Conditions (By the Board of Governors of the Federal Reserve System) WHOLESALE TOTAL NONDURABLE MANUFACTURES .✓"DURABLE MANUFACTURES MINERALS Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average = 100. Sub groups shown are expressed in terms of points in the total index. By months, January 1935 to April 1941. WHOLESALE PRICES OF BASIC COMMODITIES Bureau of Labor Statistics’ indexes based on 12 foodstuffs and 16 industrial materials, August 1939 = 100. Thursday figures, January 3, 1935 to May 8, 1941. MEMBER BANKS IN 101 LEADING CITIES J0 Wednesday figures, January 2, 1935 to May 7, 1941. Com mercial loans, which include industrial and agricultural loans, represent prior to May 19, 1937 so-called “Other loans” as then reported. EXCESS RESERVES OF MEMBER BANKS NEW YORK CITY Wednesday figures partly estimated, January 2, 1935 to May 7, 1941. commodity prices advanced sharply of in metals April and the first half of May, with the exception principally for which maximum prices had been established. Industrial production declined in April, owing to re duced output of coal and automobiles, but increased rapidly in the first half of May as operations in these industries were resumed. Production—In April the Board’s seasonally adjusted index of industrial pro duction declined to 139 per cent of the 1935-1939 average, a drop of 4 points from March. The decline reflected chiefly a sharp reduction in output of bituminous coal, as most mines were closed during the entire month. The mines were reopened on April 30, and in the first half of May coal output increased rapidly. Automobile production also declined in April, owing to stoppage of work at plants of the Ford Motor Company during an industrial dispute. This was settled about the middle of the month, and domestic output has since advanced to a high monthly rate of over 500,000 cars and trucks. Announcement by the Office of Production Management that output in the twelve months ending July 31 would approximate 5,290,000 units indicates that a rate close to that now prevailing should be maintained through July, although there is usually a considerable de cline in this period. Steel production was curtailed somewhat in the latter half of April by short ages of coal and coke and output declined from a level of 100 per cent of capacity to 94 per cent at the month end. Subsequently output increased, reaching S9 per cent by the middle of May. In most other lines activity continued to increase during April and the first half of May. Machinery production rose further and activity in the aircraft and ship building industries continued to expand rapidly. Consumption of nonferrous metals also advanced, and, as in March, domestic sources of copper were supplemented by large supplies from Latin America. Textile production rose further from the high rate prevailing in March. Consumption of raw cotton in April amounted to 920,000 bales, a new record level, and rayon deliveries also rose to a new peak. At wool textile mills, activity was maintained near the high March rate. Continued advances were reported in the chemical, paper, and food industries. Anthracite production declined considerably in April, owing to a delay by dealers in placing usual spring orders, but increased in the first half of May. Output of crude petroleum showed little change from the March rate, following some increase from the reduced level of the winter months. Iron ore shipments in April amounted to about 7,000,000 tons, an exceptionally large amount for this time of year, and mine output of nonferrous metals continued at near capacity rates. Value of construction contract awards in April declined somewhat from the high March total, owing principally to a smaller volume of defense plant contracts, according to F. W. Dodge Corporation reports. There was an increase in contracts for publicly-financed defense housing, and awards for private residential building rose by about the usual seasonal amount. Distribution—Sales of general merchandise at department and variety stores showed about the usual seasonal rise from March to April, making allowance for the changing date of Easter. Retail sales of new automobiles, which had amounted to 526,000 cars and trucks in March, rose further in April and sales of used cars were at peak levels. Freight-car loadings declined sharply in April, reflecting a reduction in ship ments of coal and coke, but increased in the first half of May when coal mines were reopened. By the middle of the month total loadings had risen to a weekly rate one-fourth higher than in the corresponding period last year and about the same as the seasonal peak reached in the autumn of 1940. Commodity Prices—Prices of most basic commodities, both domestic and im ported, advanced sharply further in the first half of May following a short period of little change during the latter part of April. Price increases were most pro nounced for agricultural commodities, reflecting, in part, the prospect of legislation raising Federal loan rates for basic farm crops. Prices of a number of semi manufactured industrial products, including petroleum products, coke, leather, textile yams and fabrics, and building materials, also advanced. Metal prices, now for the most part subject to Federal control, remained at the maximum levels estab lished earlier. Bank Credit—Bank loans and investments have shown a marked rise since last summer, the increase at reporting banks in 101 leading cities amounting to $4,000,000,000. In April and early May holdings of investments by these banks increased considerably, mostly at New York City banks, reflecting substantial pur chases of newly issued Reconstruction Finance Corporation notes. Increases in commercial loans in this period were somewhat smaller than during the preceding two months. Excess reserves of member banks were $5,700,000,000 on May 14. Since January they have declined by about $1,100,000,000, owing largely to increases in Treasury deposits with the Reserve banks and in currency in circulation. The decrease has occurred entirely at New York City banks. United States Government Security Prices—Prices of United States Govern ment securities, which had risen sharply from April 9 to April 21, subsequently declined irregularly through May 15. On that date the 1960-65 bonds were % of a point lower than on April 21 and about 1 % points below the all-time peak reached on December 10, 1940. The yield on this issue is currently about 2.09 per cent, compared with 2.03 per cent on December 10. SEVENTH FEDERAL IDWA ILL • IND RESERVE DISTRICT
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