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Seventh F ederal Volume 8, No. 3 M O N T H LY R EV IEW P U B LISH ED BY T H E F E D E R A L R E S E R V E B A N K O F C H IC A G O March 1, 1925 BUSINESS CONDITIONS IN THE UNITED STATES F U R T H E R growth in production during January car ried the output of basic commodities to the highest point reached since the spring of 1923. Employment at industrial establishments increased slightly, but remained below the level of a year ago. Prices of farm products continued to advance and there were smaller increases in the wholesale prices of most of the other groups of com modities. PRODUCTION — Production in basic industries, after a rapid increase in recent months, advanced 8 per cent in Jan uary and was 34 per cent above the low point of last sum mer. The most important factor in the increase in the level of production since August has been the greater activity in the iron and steel industry, but in January the output of lumber, minerals, food products, and paper, and the mill consumption of cotton also showed considerable increases. The woolen industry was somewhat less active in January and output of automobiles, though larger than in Decem ber, was considerably smaller than a year ago. Further increases during the month in employment in the metal, textile, and leather industries were largely offset by sea sonal decline in the number employed in the building mate rials and food products industries. Building activity, as measured by contracts awarded, though less in January than during the closing months of 1924, was near the high level of a year ago. TRADE — Railroad shipments were in record volume for this time of year, and loadings of merchandise and mis cellaneous products were particularly heavy. Wholesale trade in January, however, was slightly smaller than in December. Sales of groceries, shoes, and hardware were in smaller volume, while sales of dry goods and drugs increased. Department store sales in most districts were somewhat smaller than a year ago, but sales of mail order houses were considerably larger. PRICES — Wholesale prices, as measured by the index of the Bureau of Labor Statistics rose 2 per cent during January to the highest level in four years. The increase of P R O D U C T IO N IN BA SIC IN D U S T R IE S In d ex o f 22 b a sic co m m o d itie s co rre cte d fo r season al v a ria tion (1919=100). L a te st figure, January, 1925: 126. In d ex o f U. S. B u reau o f L a b o r S ta tistics (1913=100, base ad op ted b y the B u re a u ). L a te st figure, January, 1925: 160. Compiled February 25, 1925 10 per cent in the index since last June represents an ad vance of 19 per cent in prices of agricultural commodities and 3 per. cent in other commodities. In the first half of February prices of grains, wool, coal, and lead declined, while petroleum and gasoline prices advanced sharply, and cotton, silk, and rubber showed smaller increases. BANK CREDIT — Loans and investments of member banks in leading cities, following the rapid growth during the last half of 1924, declined by about $100,000,000 be tween the middle of January and the middle of February. This decrease represents a reduction in the holdings of investments, chiefly at banks in New York, partly offset by an increase in loans. Loans on stocks and bonds in creased though less rapidly than in the latter part of 1924, while loans for commercial purposes declined slightly from the high level reached in the middle of January. Net demand deposits owing largely to decreases at New York' City banks, declined sharply from the high point reached in the middle of January. At the Federal Reserve banks the seasonal liquidation resulting from the return flow of currency from circula tion came to a close by January 21 and during the follow ing four weeks there was an increase in total earning assets. This increase reflected largely the demand for gold for export, which led member banks to increase their dis counts at the reserve banks. Reserve banks’ holdings of United States securities declined further, while acceptances showed relatively little change for the period. Money rates, after remaining comparatively steady during most of Jan uary, showed a firmer tendency during the early part of February, when rates for prime commercial paper advanced to 3J4 per cent. M E M B E R B A N K CR ED IT F E D E R A L R E S E R V E B A N K CR ED IT W e e k ly figures fo r m e m b e r ba n ks in 101 lead ing cities. L a test figures, F e b ru a ry 11, 1925: A ll O ther L oans, 8,182 m illion ; I n vestm en ts, 5,432 m illion ; L o a n s on S to ck s and B onds, 4,933 m il lion. W e e k ly figures fo r 12 F ederal R eserv e banks. L a te st figures, F eb ru a ry 18, 1925: T ota l E a rn in g A ssets, 1,046 m illion ; D iscou n ts, 342 m illion ; U n ited S tates S ecu rities an d A c ce p ta n c e s, 690 m il lion. BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT B USINESS in the Middle West during January pre sented varying aspects: for many lines of trade and manufacture, the seasonal slowing down characteristic of the month; for others, the maintenance at high levels of production and shipments, carrying momentum from the fall expansion, yet influenced by the disinclination apparent thus far in 1925 to proceed as rapidly as seemed probable at the close of the year. Thus, iron and steel output approached record totals during January, while new orders tended to slacken. Similarly, coal mining was heavy for the month, but de mand quieted with resultant accumulation of stocks and lowering of prices. Automobile production and distribu tion of cars at wholesale likewise exceeded the December rates, but are being kept below a year ago. Building ac tivity was less than last year, contracts awarded during January being unusually light, and demand for construc tion materials diminishing; permits awarded, however, were considerably above the January, 1924, figures. De creases in output and the number of men employed at meat packing plants reflected the slower movement of live stock. In grain, prices reached a spectacular peak during the month. Page 2 March Distribution of goods at retail, though seasonally low, compared favorably with a year ago, mail order and chain store sales gaining decidedly and department stores aver aging a slight increase. Wholesale trade trended down ward from December to levels in general lower than last year. O f outstanding importance in the money situation were the better demand for commercial paper, and the tremend ous buying of bonds with advancing prices. Other features were the heavy savings deposits and the increase in the volume of cancelled checks over the preceding month and a year ago. The rise in business failures during January is customary for the first month of the year. BANKING CONDITIONS AND MONEY RATES Credit conditions throughout the district are in the main unaltered from a month ago. The same spirit of optimism which has prevailed for several months is still operative, though tempered to a degree by the failure of marked changes for the better to put in their appearance as rapidly as expected in some quarters. Rates in Chicago are as follows: Commercial paper, 3J4 to 4 per cent, over-thecounter loans to 5 with occasional transactions at 5 ^ , rnd collateral loans to 5. Bankers in some sections of :he district report a considerable diminution in credit de mand, v/hile others report the situation in this respect un changed from January. Total earning assets of the Federal Reserve Bank of Chicago have shown a downward trend during January and thus far in February, with the exception of a slight gain from the preceding week on February 11. On Febru ary 18 they were $7,500,000 below the figure shown on the corresponding reporting date in January, and $16,000,000 greater than on February 20, 1924. Loans to member banks amounted to $23,635,000 on February 18 compared with $32,333,000 on January 21, and $55,813,000 a year ago. Federal Reserve notes in circulation continued to decline in volume. Loans and discounts of reporting member banks in creased during January and thus far in February, represent ing for the most part heavier loans on stocks and bonds and “ other” collateral, the $1,949,789,000 shown on February 11 being the highest figure shown since October 15. In vestments exhibited a similar trend, and on February 11 touched a new high point, $788,544,000, exceeding the pre vious high on December 17 by nearly $2,000,000. Net de mand deposits fluctuated from week to week, the figure on February 11, of $1,767,508,000 falling short of the aggregate on January 14 by $8,000,000. Time deposits, however, moved upward without interruption after January 14 gain ing approximately $13,800,000 between that date and February 11. POSITION R EP O R TIN G M EM BER B A N K S — 7TH D IS T R IC T Mill 0NS CFOOUAMS 22W two 180C “ "V, L0SN3 AHD 06OM/T5 • i a v l ' f " 14OO w . . demand e ra s u r e A <2tG IUUU --------- hon ---------- TIPE ----------- DEPOSITS— *' — ---- - - M l WVE5THE NTS ■KO _____ 2CC 1919 1920 1921 1922 1523 rasa 1 Break In curve indicates data not comparable w ith preceding. B ased on w e e k ly re p o rts to the ba n k b y ap p ro x im a te ly 49 m em ber ba n k s in C h icago, 13 in D etroit, and 44 in o th e r selected cities. L a te st figures sh ow n, F e b ru a ry 11, 1925, in th ou san d s o f d ollars: L oa n s an d D iscou n ts, 1,949,789; D em an d D ep osits, 1,767,508; T im e D ep osits, 930,133; In vestm en ts, 788,544. Stronger demand for commercial paper by the large city banks resulted in an increase of 80.9 per cent in the volume of sales by eight dealers in the Seventh district in January, 1925, compared with December, 1924, and were 34.6 per cent larger than a year ago. Paper outstanding at the close of January increased 7.1 per cent over December 31, 1924, and was 10.8 per cent above January 31, 1924. Rates re mained practically unchanged, prevailing at 3J^@3J4 per cent; 4 per cent was high, and 3$4@3j£ per cent low. Paper outstanding in the United States by twenty-three dealers on January 31, 1925, totaled $738,521,000 compared with $721*724,000 at the close of December, 1924. Although operations in the open market for acceptances in this district were quieter than a month ago, factors influ encing the market showed an upward trend. The bid and offered rates on 90-day bills, advancing one-quarter of one per cent, were respectively 3 % per cent and 3 % per cent on February 18. Paper was available in greater volume than a month previous, and buyers’ demands improved, although this was not reflected in the month’s transactions due to the lateness of the stimulus. The shorter maturities continued in best demand, and commodities involved were grain, pro visions, sugar, and fruit. Average weekly sales in the four weeks ended February 18 declined 18.8 per cent from the prior six-week period, and purchases by the brokers were 37.2 per cent smaller. Holdings on February 18 were some what larger than on January 21. The volume of bills accepted in January by reporting banks in this district declined 23.3 per cent from the pre ceding month, although purchases were nearly doubled in this comparison. Sales were reduced 6.2 per cent and total holdings of bills on January 31, 1925, exceeded those of December by 8.9 per cent, banks’ holdings of their own acceptances declining, however, 15.5 per cent. The liabil ity of the acceptors for outstandings as of the close of the month advanced 6.2 per cent compared with the pre ceding reporting date. In January, 1925, the Federal Reserve bank purchased $14,489,537 of acceptances, and month-end holdings were $31,834,350, compared with $33,882,605 on December 31, 1924. Volume o f Payment by Check— Thirty-five clearing house centers reported an aggregate gain of 3.3 per cent over December in volume of payment by check in January. An advance of 2.5 per cent was shown by the total of the four larger cities, Chicago, Detroit, Milwaukee, and Indianapolis, and one of 8.1 in the aggregate of thirty-one smaller cities. Volume of check payment in January this year exceeded that in the corresponding month a year ago by 16.5 per cent in the four larger cities, and 16.8 in the aggregate of the thirty-five reporting centers. Agricultural Financing—Aggregate loans outstanding of twenty-two Joint Stock Land banks in the five states in cluding the Seventh district on January 31 were reported as $165,470,684, or $591,465 above the total as o f December 31. A gain of $309,252 took place in the corresponding fig ure for four Federal Land banks on the same date, and to tal loans and rediscounts of four Federal Intermediate Credit banks on January 31 were $1,118,577, approximately $30,000 less than at the close of the preceding month. Savings— Total savings deposits of 197 reporting banks in this district on February 1, 1925, were within 0.8 per cent of the peak volume reached January 1, notwithstand ing post-interest period withdrawals, while by states, Indiana, Iowa, and Michigan exceeded all previous records for which comparable figures are available (1920). Gains over a year ago were general, being most marked for Iowa as during the four immediately preceding months, and amounting for the district to 3.6 per cent, as compared with '6.6 per cent, the average 1924 gain over 1923. In the average account comparisons, decreases from January by Michigan, Illinois, and Wisconsin, and gains by Iowa and Indiana resulted in 1.1 per cent decrease for the district. Compared with the preceding year, however, Iowa registered the only decline, the increase for the five Page 3 March, states averaging 1.6 per cent, as compared with 1.5 per cent the month before. Bonds— Investment demand has been very active for the last thirty days with a substantial price rise in practically all classes of securities from municipals to secondary rails, public utilities, and industrials, possibly most pro nounced in the municipals. Originating houses report dif ficulty in securing a sufficient volume of offerings to satisfy their retail customers without attempting to care for needs of dealers, this situation being occasioned by the extraordinary demand on the part of investors seek ing to place their surplus funds. Customary to this type of market, a number of lower-grade offerings have been launched and were readily absorbed. Foreign loans con tinue in favor, although many investors still hold aloof from them, especially foreign industrials. AGRICULTURAL PRODUCTION AND FOODSTUFFS Dairy herds for five states including the Seventh Fed eral Reserve district showed an aggregate increase on January 1 of 2.6 per cent over a year ago but holdings of other cattle decreased 4.4 per cent; sheep flocks declined about one-half of one per cent while hog droves totaled 17.6 per cent less than at the beginning of January, 1924, according to statistics recently issued by the Bureau of Agricultural Economics. Grain Marketing— Influenced by rising prices, grain in larger quantity moved to interior primary markets in the United States during January than in the corresponding month of last year but, on account of the early marketing of wheat last fall and the necessity of holding on farms most of the present supply of corn for feed and seed, the aggregate arrivals fell below the January, 1923, level. Compared with December, the receipts and shipments of corn and oats increased at points of accumulation, but those of wheat declined. In the United States, the visible supply of grain is considerably larger than in February, 1924, although stocks of wheat and barley at terminal warehouses show some recession from holdings a month ago. Supplies in this country are far from burdensome because of the need of bread grains in other parts of the world. January exports were slightly less than those for December. Partly due to active buying of wheat in Janu ary by small speculative interests, the volume of trading in grain futures on the Chicago Board of Trade exceeded that in December. Grain prices m o v e d s h a r p ly d o w n w a r d at Chicago, after a sensational rise which culminated in peak levels the latter part of January, so that by the mid dle of February they were nearly back to the levels pre vailing at the close of December. Flour—The prevailing high prices of flour during Janu ary restricted buying to a great extent, but sales by mil lers in this district improved over December and were considerably larger than a year ago. An operating ratio of 68.4 per cent for January reflected a higher rate of production than ip either the preceding month or January, 1924, the ratio for these months being 60.3 and 59.4 per cent, respectively. The following table indicates conditions as reported by mills in the Seventh district: CHANGES IN JANUARY, 1925, FROM PRECEDING MONTHS P er c e n t c h a n g e fro m D e ce m b e r Janu ary 1924 Production (bbls.)._........ - +13.4 Stocks of flour at end o f month (bbls.)................ _ — 20.5 Stocks of wheat at end of month (bu.) ......... ...... .. — 6.9 Sales (volum e)........... . .. +11.6 Sales (value).__vr..... ..... .. +16.3 C o m p a n ie s in c l u d e d D e cem ber J a n u a r y 1924 +15.1 1924 38 1924 38 — 27.1 32 32 + 16.9 +20.4 + 69.0 33 17' 17 33 16 16 According to figures from the Chicago Board of Trade, shipments of flour from Chicago during January aggre gated 814,000 barrels, compared with 674,000 barrels for December and 657,000 barrels for January, 1924; while Page 4 March receipts totaled 1,349,000 barrels, compared with 1,116,000 barrels in the preceding month and 960,000 barrels a year ago. Movement of Live Stock— Coming principally from feed lots in the corn belt at this time of the year, receipts of cattle and lambs receded to seasonally low levels in January. H og receipts were greater than the 1920-24 aver age for January but the lowering from record marketings of December probably marked the beginning of a seasonal decline which usually begins in February and extends through September. LIVE STOCK SLAUGHTER Ca ttle Yards in Seventh District, January, 1925................. 265,133 Public Stock Yards in U. S. January, 1925................... 778.812 December, 1924................... 876,755 January, 1924.....................787,333 January, 1923......... 743,071 H ogs L a m bs and S heep 1,426,492 270,045 117,564 3,909,140 4,335,237 4,016,024 3,395,278 786,367 853,790 919,506 897,439 370,258 388,266 367,951 342,438 C alves January reshipments of stocker and feeder cattle, calves, sheep, and lambs to feed lots were smaller than in De cember and less than a year ago. AVERAGE PRICES OF LIVE STOCK P er H u nd red P o u n d s a t C h ic a g o W eek e n d e d F eb . 14, Ja n . 1925 1925 $ 9.10 Native Beef Steers (average)....... ...... $ 9.05 5.25 Fat Cows and Heifers................. ....... 5.25 10.40 Hogs (bulk of sales)....................... ...... 10.90 Yearling Sheep..................................... ....... 14.00 15.00 18.10 Lambs .............. _ ................................ ...... 17.65 M onth o r Ja n . D ec. 1924 1924 $ 9.45 $ 9.20 5.50 4.50 7.10 9.35 11.25 12.25 13.35 15.75 Meat Packing— Smaller January receipts of live stock resulted in lower production at slaughtering establish ments than in December. Employment declined 4.9 per cent in number but, owing to the lull between holiday dates for the prior month, increases of 13.2 per cent in hours worked and 4.3 per cent in total payrolls were shown for the period covered by the last pay-date in January over similar figures for December. Sales in dol lars reported by forty-nine packers in the United States aggregated 3.4 per cent greater in January than in the preceding month and rose 7.5 per cent over the level for the corresponding month a year ago. For the calendar year 1924, the sales totaled 2.2 per cent more in value than for 1923. Fresh pork accumulated in the freezers during January. This increase together with a slight gain in cured stocks brought aggregate storage holdings of edible product in ^he United States to a higher level than at the beginning of the present year or the 1920-24 average for February 1. Although Chicago quotations for the majority of perk products strengthened during January and th e. early part of February, those of picnics, pork loins, fat backs, and lard declined so that the margin between live Costs and sales values continued rather narrow. After reaching strong positions early in January, the prices of veal and lamb reacted to some extent but continued on a higher level than in December. Quotations for beef remained practically unchanged from the prior month. English importers took a fair amount of hams and shoulders the first half of January after which time de mand for pork and lard lagged on the Continent as well as in the United Kingdom, this condition resulting in smaller forwardings for export than in December. Indifferent de-mand caused weakening of foreign mar kets to such an extent that quotations for lard and a few other pork products fell slightly below Chicago parity. Consigned and spot stocks in European markets were in dicated as somewhat heavier on February 1 than at the beginning of January. Dairy Products and Poultry— Creamery butter produc tion in this district increased 6.0 per cent in January com pared with the preceding month and was 0.5 per cent above a year ago. Reports issued weekly by the Ameri can Association of Creamery Butter Manufacturers indicate that production in the United States gained slightly over that for December but showed a recession from January, 1924. Sales of butter reported by representative compa nies in the Seventh district rose 1.0 per cent above figures for the prior month and were 8.6 per cent greater than in January a year ago. Seasonal recession in cheese pro duction continued; the total output from Wisconsin fac tories for five weeks ended February 11 being 5.3 per cent lower than in the preceding period, although nearly equal to totals for the corresponding, weeks of 1924. Receipts of butter and eggs were slightly greater at Chicago during January than in December but showed some recession from a year ago. A smaller quantity of cheese and poultry arrived than in the prior month, re ceipts of the latter commodity being less than half the volume in January last year. Although withdrawals from storage have been seasonally large, stocks of butter con tinued rather burdensome. Inventories of eggs were at a minimum and those of other dairy products in ware houses in the United States were seasonally lower on February 1 than at the beginning of January; poultry holdings increased slightly. Prices of poultry, cheese, and eggs strengthened in January but eased during the early part of February. Chicago quotations for butter continued to decline. COAL Heavy production of coal continued in the Indiana and Illinois districts during January. For Illinois the output of 8,121,147 tons was higher than in any month of 1924 except January, at which time an unusually large amount was mined; while in both Indiana and Illinois the percent age of full-time hours actually worked increased percep tibly over December. As a result of the heavy output and of a diminishing demand, an excess supply of coal was created and the market definitely softened at the end of the month. Production has been curtailed to some ex tent since February 1, however, and the price o f screen ings has in consequence increased; prices of domestic coals average about twenty-five cents below those of January. The 51,900,000 tons of bituminous coal mined in the United States during January represented a gain o f 12.3 per cent over December and a decline of only 1.1 per cent from January, 1924; this amount compares favorably with other years also. Anthracite production increased slightly in the comparison with the preceding month. INDUSTRIAL EMPLOYMENT CONDITIONS Employment at industrial plants of the Seventh district experienced another slight advance during the month end ed January 15, the reports for plants employing close to 380,000 men showing an expansion of 1.1 per cent from the previous month. This expansion, however, was not reflected in payrolls which, affected by layoffs for repairs and inventory, showed a contraction of 0.5 per cent. Of the industries represented in the reports, metals and metal products continued to make the most definite gains. Other groups to show increases in both men and payrolls were textiles and textile products and leather products. While the manufacturers of chemicals, drugs, and paints made substantial additions to their working forces, the changes were not yet apparent in the payrolls. Decreases in pay rolls as well as employment were experienced in vehicles, rubber products, meat packing and other food products, and in most of the building materials. Outside of the industries represented in the accompany ing table, the trend in employment was generally down ward. Thus in building and construction work further curtailments were made, reports showing 25 per cent out of a total of 15,000 men being laid off during the month. Distributive industries, department stores and mail order houses, also suffered heavy reductions after the holiday season. In the coal mining industry, however, the situa tion improved, and a large number of miners were enabled to return to work. At state employment offices, the num ber of applicants to places available shows an increase. For Illinois, the ratio increased from 149 at the close of December to 188 at the close of January. In Indiana dur ing the same period, the ratio changed from 132 to 139. EMPLOYMENT AND EARNINGS-SEVENTH FEDERAL RESERVE DISTRICT I ndustrial Groups All groups (10)—............. ....... — ....................................... Metals and metal products (other than vehicles)......... _ V ehicles...... ..................... ..............„ .................. ..... 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................................................................. N umber of W age Earners W eek ended January 15 D ecember 15 P er cent Change 378,045 373,914 + 1.1 146,895 142,865 + 2.8 43,211 43,341 '■'■-0.3 30,060 28,974 + 3 .7 50,134 51,745 — 3.1 11,272 11.730 — 3.9 36,098 35,448 + 1 .8 10,267 9,954 +3.1 17,297 + 0 .4 17,362 3,115 3,153 — 1.2 29,631 29,407 + 0 .8 T otal E arnings W eek E nded January 15 $9,534,959 3,439,417 1,222,280 716,505 1,361,623 319,237 833,758 265,580 389,134 81,258 906,167 D ecember 15 $9,586,278 3,323,956 1,321,941 660,032 1,424,975 333,885 863,496 269,448 381.737 85.321 921,487 P er cent Change + 3 .5 — 7.6 + 8.6 — 4.4 — 3.4 — 1.4 + 1.9 - —4.8 — 1.7 Page 5 March MANUFACTURING ACTIVITIES AND OUTPUT Automobile Production and Distribution— More automo biles were manufactured in the United States during January than in the preceding month, but the number was considerably below January, 1924. Firms representing practically complete production report an output of 203,757 passenger cars, compared with 178,570 in December and 287,211 in the corresponding month a year ago. Trucks manufactured by companies whose December output was 25,333, totaled 25,650 in January, an increase of 1.3 per cent over the preceding month and a decrease of 9.2 per cent from January, 1924. Manufacturers producing 63.2 per cent of the January output sold 15.8 per cent more cars to dealers than in December, but 36.9 per cent less than in January last year; sales by these dealers to consumers declined 20.3 and 19.7 per cent, respectively, in the same comparisons. The num ber of cars sold to users was 79.1 per cent of the sales by manufacturers to dealers; in the preceding month the ratio was 114.4 and in January, 1924, only 62.2 per cent. Automobiles sold at wholesale by distributors in the Middle W est registered decided gains in January, while sales by retailers were less than in December but larger than a year ago. Inventories of new cars held by these reporting firms are considerably lower than at the end ot January, 1924. The number of cars stored at present in Chicago warehouses is also much smaller than a year ago. DISTRIBUTION OF AUTOMOBILES Changes in January, 1925, from previous months P er c e n t c h a n g e fro m D e c e m be r Janu ary New cars Wholesale— Number sold......... Value ...............— Retail— Number sold....... Value ................... On hand Jan. 31— N um ber................ Value ...... Used cars— Sold......... Salable on hand— Number ______ ___ Value ___________ C o m p a n ie s in c l u d e d January D e cem ber 1924 1924 1924 1924 +63.2 +55.5 + 16.7 +23.5 42 42 39 39 — 2.5 — 11.5 + 10.2 +33.1 67 67 64 64 +18.2 +14.1 +11.8 — 47.1 — 36.4 +27.9 74 74 70 71 71 67 + 5.0 — 0.4 + 8.6 + 0.3 70 70 66 66 Iron and Steel Products -Near-record production fea tured the steel situation during January. Output of steel ingots in that month aggregated 4,179,498 tons for the United States, a gain of 17.7 per cent over December and of 15.0 per cent over January, 1924, and only 0.2 per cent below the record production of March, 1924; the daily average for January was 3.9 per cent under that of last March. Operations averaged 89 per cent of capacity for the country, while in the Chicago district they are being maintained at a maximum rate. Demand has been rather quiet, although the unfilled orders of the United States Steel Corporation registered another gain, totaling 5,037,323 tons on January 31, compared with 4,816,756 tons at the end of the preceding month. Purchases by automo bile manufacturers so far have been more conservative than a year ago; railroad buying has lagged, but is again improving; while the structural steel industry is season ally quiet. Steel mills in the Chicago territory report the volume of new business as satisfactory and as coming from all lines of industry; orders received are heavier than in January last year, with those passed to the mill about 30 per cent greater. The pig iron market has been unusually dull, but ship ments are large and output continues to expand. During January twenty-three more furnaces were blown in, and Page 6 March the daily average production for the month of 108,621 tons represented an increase of 13.7 per cent over December; in the Illinois and Indiana district the gain was 23.3 per cent. Foreign competition is being felt to some extent in the eastern markets. The Iron Trade Review composite average price of four teen leading iron and steel products was $41.22 on February 11, compared with $40.92 on January 7, and $43.53 on February 13, 1924. Pig iron prices remain stationary, but those of finished steel products continue to follow an up ward trend. Prices of scrap iron have been steadily de clining for several weeks. Both output and shipments of iron and steel castings by twenty-seven foundries in this district increased in January for the second successive month, production ex panding 5.4 per cent over December, while shipments gained 2.4 per cent in tonnage and 2.9 per cent in value; increases over January, 1924, also were reported in these items. Sixteen stove and furnace manufacturers in the district booked during January almost double the Decem ber amount of business, and a larger volume than in the corresponding month last year; although production w'as 30.1 per cent heavier than in the preceding month, ship ments declined 23.3 per cent. Agricultural Machinery and Equipment.— Exports rose slightly while domestic sales of agricultural machinery and equipment showed the customary increase in January over December and were greater than in the correspond ing month of either 1923 or 1924. The production rate rose to 64.1 per cent of the estimated normal for January. For the calendar year 1924 domestic sales aggregated 3.0 per cent less than for the prior year, and exports increased 13.7 per cent, but the combined total fell 0.5 per cent below figures for 1923. Reports for January indicate that col lections in some localities continued rather difficult. PRODUCTION AND SALES OF FARM EQUIPMENT IN THE UNITED STATES Changes in January, 1925, from previous months P er c e n t c h a n g e f r o m D ecem ber Ja n u ary Domestic sales.............. Sales billed for export Total sales ................. Production .......... ...... 1924 + 30.8 + 5.0 +25.7 + 6.3 1924 +22.5 — 12.2 +15.1 — 1.5 C o m p a n ie s in c l u d e d D ece m be r J anuary 1924 104 104 104 97 1924 104 104 104 96 IN D IC ES O F P R O D U C T IO N A N D S A L E S O F A G R I C U L T U R A L M A C H I N E R Y & E Q U I P M E N T IN T H E U N I T E D S T A T E S Shoe Manufacturing, Tanning, and Hides—Shoe produc tion in the Seventh district receded in January compared with the prior month but exceeded the output in Novem ber. The quantity of shipments increased slightly over December but fell 3.6 per cent below current production On February 1 unfilled orders on the books of twenty-two concerns gave assurance of nearly seven and one-half weeks’ future business at the January rate of output. In ventories reported by twenty-six manufacturers were equivalent in the aggregate to 68.6 per cent of the volume of their shipments for January. Most companies continue to experience a little difficulty in collections. CHANGES IN THE SHOE MANUFACTURING INDUSTRY JANUARY, 1925, COMPARED WITH PREVIOUS MONTHS P er c e n t c h a n g e f r o m D e ce m b e r January Production ................. Shipments .................... Inventories ......... ........ Unfilled orders....... ...... 1924 — 7.4 + 0.8 + 6.3 — 14.3 1924 + 9.8 +21.1 — 10.1 + 9.3 IN C o m p a n ie s in c l u d e d D ece m be r January 1924 31 31 25 23 1924 31 31 24 23 Sales reported in dollar amounts by representative tan ners in the district totaled less than in December but were more than a year ago. Demand for harness tended to improve after the first of the year. Leather produc tion increased slightly during January. Prices continue steady. Although calf skin and packer green hide markets were less active at Chicago than in December, prices recovered somewhat from the temporary slump prevailing at the close of 1924. Quotations have lowered slightly since the latter part of January. Furniture—The results of the January furniture marts were reflected in orders received by manufacturers in the Seventh district; for nineteen firms these increased in the aggregate 122.0 per cent over December and 1.0 per cent over January last year, although the volume of new busi ness received was 17.1 per cent less than in January, 1923. Unfilled orders were 39.6 per cent greater at the end of January than on December 31, and 38.6 per cent above a year ago. At the rate of the January shipments, which gained 4.2 per cent over December, about ten weeks’ busi ness now remains on the books of the reporting firms. Production during January was slightly lower, the operat ing ratio of fifteen firms being 82.9 per cent, in comparison with 84.4 for December, and 83.2 for the corresponding month a year ago. Raw W ool and Finished W oolens— Trading in wool con tinued quiet throughout January and early February, with lines suitable for woolen manufacture moving a little bet ter than others. Stocks remain light, so that the market is still considered strong despite a very slight easing in prices and a decline in foreign markets. At the opening in London, cross-breds were in better demand than pure merinos, and in domestic markets the lower grades are showing more strength than the finer wools. On February 4, the American W oolen Company opened their lines of men’s wear goods for Fall, 1925. The ad vances announced on fifty staple numbers averaged 6.6 per cent, which was a smaller increase than had been an ticipated by the majority of the trade. So far new busi ness has not sufficiently developed from this opening to determine the effect o f the new prices. BUILDING MATERIALS AND CONSTRUCTION ACTIVITIES The demand for lumber remained quiet during January; prices which had shown a firming tendency at the begin ning of the year weakened again in early February. As reported by manufacturers and dealers of the district, January sales were 5 per cent less than in December and about the same in volume as a year ago. At Chicago, the receipts of lumber fell 11 per cent from those of the preceding month, with shipments showing a proportionate decline. Both receipts and shipments, however, were con siderably heavier than during January a year ago. The use of cement has continued very light and stocks are rapidly accumulating although production is showing a marked decline. Reports for the United States show de creases of respectively 15 and 7 per cent in production and shipments, accompanied by an increase of 29 per cent in stocks during the month. In comparison with these items a year ago, production is 1.5 per cent larger, shipments 2 per cent smaller, and stocks heavier by 25 per cent. In the brick industry, there were developments pointing toward an increase in activity; shipments were heavier than during the preceding month. Price quotations re mained steady. Building Construction— A contraction in the amount of building work still being carried on was reflected in a heavy reduction during the month in the number of men employed in this industry. The contracts awarded during January, both total and residential, were also unusually light, the former showing a valuation of $36,835,486, or 28.1 per cent below that of December and 25.3 per cent less than in January, 1924. Permits for forty-nine cities numbered 7,391 with an estimated cost of $41,509,550. This was respectively 21 and 11 per cent below the number and cost of permits issued in December, the smaller cities showing, proportionately, the greater decline. In compari son with figures of a year ago, however, the January per mits showed heavy increases, 13 per cent in number and 38 per cent in estimated cost. MERCHANDISING CONDITIONS Wholesale Trade— Two-thirds of the wholesalers report ing to this bank showed a smaller volume of goods sold during January than in the closing month of 1924, whereas a year ago, with only a third of the dealers reporting de clines from December, the five commodity groups included in this survey averaged gains. For about half the drug firms and for the majority of grocery, hardware, dry goods, and shoe dealers, sales comparisons with January, 1924, were unfavorable, while grocery firms were the one group to exceed January, 192(3. Higher inventories were reported on January 31 than at. ..he beginning of the year for all groups except groceries, which averaged a reduction of 1.6 per cent, decreases at eight stores more than offsetting increases at thirteen. This group, nevertheless, maintained its excess over the preceding year; dry goods and shoe stocks continued be low ; while for the two other commodities, trends were varied. For most of the stores January collections were smaller than during December, and for thirty-seven out of fiftynine were under a year ago. Department Store Trade— January returns from report ing department stores in this district showed the usual seasonal characteristics— a decided drop in sales from De cember, an increase in collections, and the resultant low ering of accounts outstanding. For the majority of stores, collections were likewise heavier than a year ago and accounts outstanding smaller. Page 7 March Sales comparisons, however, are less uniform, half the stores reporting increases over January, 1924, and half declines. Similarly, the gain of nearly 8 per cent over January, 1923, reflects individual gains by only half the stores. Aggregate stocks on January 31 for thirty-six firms aver aged 3 per cent less than at the beginning of the year, only twelve stores showing increases. The gain over January 31, 1924, was 2.2 per cent. Unfilled orders at the end of the month for twenty-two1 stores amounted to 8.4 per cent of the total purchases dur ing 1924. Chain Store Trade— For chain store systems reporting to this bank, the volume of business during January was relatively large, sales except in musical instruments mak ing new records for the opening month of the year. The declines from December, 1924, noted by all but one firm, were seasonal and less sharp than the January, 1924, de creases from the preceding month. 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. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following month. Data refer to the Seventh Federal Reserve district unless otherwise noted.) No. of Firms Meat Packing—(U. S.)— Sales (in dollars)1.............. Casting Foundries— Shipments (in dollars)....... Stoves and Furnaces— Shipments (in dollars)....... Jan., Dec., 1925 1924 Jan., Dec., 1924 1923 64 99.2 96.0 95.2 88.0 28 83.4 81.0 71.9 85.0 17 55.2 69.7 62.3 76.1 Agricultural Machinery & Equipment—(U. S.)2Domestic Sales (in dollars) Exports (in dollars)........... Total Sales (in dollars)..... Production ............................ Furniture3— Orders (in dollars)............. Shipments (in dollars)......... Shoes4— Production (in pairs)........... Shipments (in pairs)............. Electric Energy— Output of Plants (K W H ).. Industrial Sales (K W H ).... 130 130 130 124 85.4 106.1 88.9 97.2 65.3 101.1 70.7 89.7 69.9 109.8 75.9 97.8 58.7 110.7 66.4 94.5 21 21 189.9 120.9 91.6 118.7 185.2 115.7 74.0 102,5 36 36 163.5 162.4 176.6 161.1 145.2 128.8 132.5 137.9 9 9 177.0 171.1 180.5 167.9 169.5 160.7 161.7 157.8 Freight Carloadings—(U. S.)— Grain and Grain Products.... Live Stock .......................... Coal ..................................... Coke .................................... Forest Products ............... Orej ...................................... Merchandise and Miscellaneous ............................ Total ................................ Iron and Steel— Pig Iron Production:5 Illinois and Indiana....... United States ................ Steel Ingot Production — (U. S.)5 ............................ Unfilled Orders U. S. Steel Corp........................ 129.9 111.0 126.3 148.7 126.1 27.0 122.3 115.1 112.6 130.9 112.0 26.9 121.8 110.9 125.1 133.8 124.7 23.3 116.4 111.2 102,7 125.0 105.0 28.4 114.1 114.5 114.6 110.5 110.0 111.0 110.0 105.0 150.5 129.6 122.1 114.0 12:7.7 116.2 127.0 112.5 137.3 121.2 119.4 100.9 84.0 80.4 80.0 74.2 Automobiles—(U. S.)— Production: Passenger Cars .............. Trucks ............................. Shipments:® Carloads .......................... Driveaways .................... Boat7 ................................ Automobile Excise Tax Collections (7th F. R. District)— New Automobiles ......... New Automobile Trucks Parts and Accessories.... 147.5 99.2 129.3 98.0 207.9 109.3 199.3 104.7 153.4 50.7 10.7 152.2 53.0 26.5 222.0 105.7 30.2 172.6 77.3 117.5 116.0 28.4 50.3 153.3 18.2 43.2 208.2 113.0 87.3 168.7 63.8 62.9 200.4 211.1 220.6 148.4 75.4 69.2 31.1 39.2 Stamp Tax Collections8— Sales or Transfers of Capital Stock ............. Sales of Produce on Exchange— Futures .... No. of Firms Wholesale Trade— Net Sales (in dollars): Groceries .......................... 43 Hardware .......................... 21 Dry Goods ...................... 14 Drugs ................................ 14 Shoes .................................. 7 Retail Trade (Depart ment Stores)— Net Sales (in dollars): Chicago .............................. 9 Detroit ................................ 4 Des Moines ............... 3 Indianapolis ....... 5 Milwaukee ........................ 5 Outside .............................. 39 Seventh District .... 65 Retail Trade— (U . S.)— Department Stores ............. 359 4 Mail Order Houses.......... Chain Stores: Grocery ...................... 28 Drug .................................... 9 Shoe .................................... 6 Five and Ten Cent............ 5 Music ................................ 4 Candy ................ ............... 4 3 Cigar .................................. Flour Production— (In barrels) .......................... 39 U. S. Primary Markets9— Grain Receipts: Oats .................................. Corn ................................ Wheat ............................. Grain Shipments: Oats .................................. Corn .................................. Wheat .............................. Jan., Dec., 1925 1924 Jan., Dec., 1924 1923 69.1 79.0 78.9 71.5 90.1 70.5 91.2 48.4 68.5 83.3 98.7 96.6 43.3 65.4 81.6 58.2 87.5 40.4 120.6 225.5 234.1 186.7 130.8 221.0 106.0 125.1 97.8 129.8 85.5 112.3 235.8 121.1 165.8 82.4 212.9 111.7 206.1 218.6 181.0 226.4 230.3 174.8 208.2 29.9 119.0 109 108 210 109 98 202 148 245 155 107 151 92) 162 203 141 99 126 84 154 119 201 122 250 186 187 366 184 276 192 125.6 111.0 108.0 94.6 118.2 242.0 76.5 106.5 196.8 108.4 87.3 204.2 49.4 108.3 253.1 91.5 77.7 92.8 61.3 67.6 66.5 97.8 78.4 125.6 36.6 75.6 131.1 51.9 100.4 67.2 193.6 93.2 173.4 130.0 89.7 , 73.6 128.1 202.0 241.9 254.7 124.2 120.9 90.5 109.9 91.2 152.9 64.4 259.1 108.7 124.5 136.7 143.9 119.3 145.3 101.0 117.3 94.7 66.3 99.5 128.9 97.7 123.4 153.8 173.5 145.2 218.4 162.6 250.4 102.1 128.0 94.9 173.9 75.5 161.8 88.5 53.8 82,7 117.4 103.0 151.0 108.3 143.1 82.0 122.7 63.1 121.4 76.1 136.9 186.8 129.1 111.5 176.5 Building Construction— Contracts Awarded (in dollars): Residential ...................... Total ................................ Permits: Chicago ....... ....Number Cost..... Indianapolis .... ....Number Cost..... Des Moines ......Number Cost..... Detroit ........... ....Number Cost..... Milwaukee .... ....Number Cost..... Others (45) .....Number Cost..... Fifty Cities .......Number Cost..... 118 185 171 331 214 261 193 1. Monthly average 1920-1921=100; 2. Monthly average 1923=100; 3. Monthly average 1919-1920-1921=100; 4. Monthly average of mean of production and shipments in 1919=100;_5. Average daily production; 6. Monthly average 1920=100; 7. Base figures (1920) partly estimated; 8. First Illinois internal revenue district; 9. Monthly average receipts 1919=100. Page 8 March
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