Full text of Business Conditions (Federal Reserve Bank of Chicago) : March 1, 1927, Volume 10, Number 3

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B usiness C onditions
S eventh
F ederal

Volume 10, No. 3

R eserve
DISTRICT

March 1, 1927

M O N T H L Y R E V IE W P U B LIS H E D B Y 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

BUSINESS CONDITIONS IN THE UNITED STATES

activity has been slightly larger since the
I NDUSTRIAL
turn of the year than at the close of 1926. Seasonal

liquidation of reserve bank credit has been in unusually
large volume owing chiefly to the inflow of gold from
abroad, and conditions in the money market have been
easy. Wholesale prices have continued to decline.
PRODUCTION—Output of factories was larger in Jan­
uary than in December, but smaller than in January, 1926
or 1925. Mineral production, though somewhat below the
December level, continued in unusually large volume, re­
flecting the maintenance of production of bituminous coal,
crude petroleum, and copper. Manufacture of iron and
steel, which was sharply curtailed in December, increased
in January and February. Automobile output was in­
creased considerably from the unusually low level of pro­
duction reached last December, but the number of passen­
ger cars produced since the beginning of the year has been
smaller than for the corresponding period of the past four
years. The textile industries have continued active since
December without, however, showing the usual seasonal
increase.
Building contracts awarded in thirty-seven states during
the first seven weeks of the year were smaller in value than
those for the same period of 1926. Decreases have been
largest in New York and in the New England, Southeast­
IN D U S TR IA L

ern, and Northwestern states, while increases occurred in
the Middle Atlantic and Central Western states. By types
of building, contracts awarded for residential and industrial
building in January showed large reductions as compared
with December and with January, 1926, while contracts for
commercial buildings were larger than a month or a year
ago.
TRADE—Retail trade showed more than the usual sea­
sonal decline between December and January. Sales of de­
partment stores were in about the same volume as a year
ago, while those of mail order houses were 7 per cent
smaller. Wholesale trade declined in nearly all leading
lines in January and was considerably smaller than a year
ago. Inventories of department stores were reduced less
than is customary, and at the end of the month were in
about the same volume as in January, 1926. Stocks of mer­
chandise carried by wholesale firms increased slightly,
but continued in smaller volume than in the corresponding
month of the previous year. Freight carloadings declined
by somewhat more than the usual seasonal amount between
December and January, but owing chiefly to heavier ship­
ments of coal this year, weekly loadings since the begin­
ning of the year were larger than for the same period of
1926. Shipments of merchandise in less-than-carload lots
were also slightly larger than last year, but those of most

P R O D U C TIO N

W H O L E S A L E P R IC E S

Index num ber of production of m anufacture and m inerals com ­
bined, adjusted for seasonal variations (1923-25 average = 100).
L atest figure, January, 1927: 106.



Compiled February 25, 1927

basic commodities were smaller.
PRICES—The general level of wholesale prices declined
fractionally in January, according to the index of the Bureau
of Labor Statistics, considerable advances in prices of live
stock being somewhat more than offset in the total by de­
creases in nearly all other commodity groups included in
the index. Prices of non-agricultural products, as a group,
declined to the lowest level since early in 1922. In Feb­
ruary there were decreases in the price of iron and steel,
nonferrous metals, bituminous coal, grain, and hides, while
prices of cattle, sheep, cotton, and gasoline increased.
BANK CREDIT—Commercial loans of member banks
in leading cities continued to decline during the four weeks
ending February 16, although at a less rapid rate than in
earlier weeks, and in the middle of February the volume of
these loans was about $270,000,000 below the seasonal peak

reached in the middle of November, though about $200,000,000 above last year’s level. Loans on securities also
declined during the period, while the banks’ investment
holdings increased somewhat.
The volume of reserve bank credit remained during the
four weeks ending February 23 near the low level reached
at the end of January. Liquidation of reserve bank credit
since the high point of last December has been in excess
of $500,000,000, the unusual extent of this reduction being
due chiefly to the large inflow of gold from abroad. Total
bills and securities of the reserve banks on February 23
were about $200,000,000 smaller than on the corresponding
date of last year.
Easier money conditions in February were reflected in a
decline in the rate on prime commercial paper from 4-4*4
to 4 per cent after the first week of the month.

M EM BER B A N K C R E D IT

R E S E R V E B A N K C R E D IT

M onthly averages of daily figures for tw elve F ederal Reserve
banks. L atest figures, averages of first 23 days in F ebruary,
1927: Total R eserve B ank Credit, 994 million; D iscounts for
M em ber Banks, 381 m illion; A cceptances, 306 m illion; U. S. Se­
curities, 305 million.

A

BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT

COM PARISON of the midwinter business situation
in the Seventh district this year with last indicates a
smaller volume of production and distribution at present
than in 1926, with lower inventories on hand as well as
a decline in unfilled orders.
Important exceptions are the tonnage of coal mined—
the largest for January in two years—and the continued
excess over a year ago in the value of building contracts
awarded and permits issued, seasonally less, however, than
in December. Creameries and shoe manufacturers also re­
ported gains over January, 1926. Iron output, automobile
production, and manufacture of farm machinery, castings,
stoves and furnaces, and of flour, all dropped below last
yeaV. Distribution, likewise, of most of the commodities
covered by our survey was smaller than a year ago, and
for the large majority declined seasonally from December.
Inventory statistics show holdings of meat and dairy
products at cold-storage warehouses and packing plants in
general under the 1922-26 averages. Reductions from last
year were reported by department stores, wholesale grocers
and dry goods houses, automobile and wool dealers, woolen
goods and shoe manufacturers, and by lumber distributors.
Reported unfilled orders on January 31 were below the cor­
responding date in 1926, and with the exception of depart­
ment stores and furniture manufacturers showed recessions
from the volume of outstandings at the close of the year.
The noticeable drop in check payments during January
reflects the contraction in business activity. Other financial
PageFRASER
2
Digitized for


features were the large number of new bond issues brought
out, post-interest period withdrawals of savings, and in­
creased sales and reduced rates in commercial paper.
CREDIT CONDITIONS AND MONEY RATES
W ith the exception of a slight tightening the first of the
month in some of the larger cities, reflecting month-end
requirements of business, credit conditions in the Seventh
district have been easy during the past thirty days, accom­
panied by a downward trend in rates. Current quotations
in Chicago are: 4 to 4% for commercial paper, collateral
loans 4*4 to 4J^ per cent, and commercial loans 5 per cent.
The average rate earned on loans and discounts by ten of
the larger banks in Chicago during January was 5.02 per
cent, compared with 5.06 per cent in December and 5.03
per cent in January a year ago. Reports from a few manu­
facturing centers indicate an increasing volume of activity
in industry, which is finding reflection in slightly heightened
demand for bank credit. In Detroit, demand for credit dur­
ing January continued without material change from the
preceding month, with rates fairly steady. Prevailing rates
on commercial loans in that city during the week ended
February 15 ranged from 4l/ 2 to 6 per cent, as was the case
the corresponding week in the preceding month, and six of
the larger banks reported an average rate earned on loans
and discounts of 5.45 per cent in January, compared with'
5.44 in December and 5.32 per cent a year ago.
Total bills and securities of the Federal Reserve Bank
of Chicago showed a distinctly downward trend, usual at

this season, after the last reporting date of 1926, December
29, until February 16 when this item rose to $163,252,000,
compared with $158,775,000 February 9, and $178,529,000
January 19, the corresponding reporting date that month.
Loans to member banks have followed the same direction,
amounting to $69,056,000 February 9 and $78,871,000 Febru­
ary 16, as against $90,169,000 January 19. Federal Reserve
notes in circulation on February 16 were given as $210,803,000, representing a drop of over 2 million from the
prioi* week, and of about 15 million from January 19. On
February 17 a year ago Federal Reserve notes were in cir­
culation to the amount of $161,362,000.
Loans and discounts of reporting member banks in the
Seventh district declined slightly in volume during January,
especially commercial loans in Chicago; thus far in Febru­
ary the figures indicate a downward movement. On Febru­
ary 16 the aggregate was $2,139,240,000, compared with
$2,149,116,000 January 19. A rising movement in the in­
vestment holdings of reporting members has been shown
by their reports during recent weeks. On February 16 the
total stood at $751,721,000, compared with $743,035,000 the
'prior week and $727,510,000 January 19. Net demand de­
posits have moved generally upward, though fluctuating
from week to week, the $1,783,768,000 given February 16
comparing with $1,746,133,000 January 19. Time deposits
have shown no established trend; $1,058,685,000 was re­
ported February 16, as against $1,057,583,000 February 2
and $1,052,603,000 January 19.
Commercial paper sales during January, 1927, by eleven
dealers reporting to this bank exceeded the December total
by 50.2 per cent, and were 5.2 per cent larger than a year
ago; both comparisons reflect eight increases and three de­
clines. In general, houses reported a fair supply of paper
during the month and a good demand. Rates tended to
case, with low ruling at 4 compared with 4% in the last
two months of 1926; over half the dealers listed 4 for
high. Paper outstanding on January 31 for five firms ag­
gregated 5.2 per cent above the close of 1926, but 8.6 per
cent less than a year ago; for twenty-six dealers throughout
the country outstandings amounted to $551,000,006.
Aggregate purchases by six dealers in the Chicago open
bill market from January 13 to February 16, 1927, averaged
on a weekly basis 32.3 per cent heavier than during the
four weeks preceding; sales increased 38.5 per cent in the
same comparison. Transactions involved principally grain,
cotton, rubber, meat products, sugar, and canned goods.
The supply of paper was generally reported as fair, and
demand during the latter part of January good, with bills
moving freely at the offered rates; later inquiry fell off, and
paper sold less readily. Sixty- and ninety-day maturities
were in best demand. Bid and offered rates on the latter
at the close of the period were 3j£ and 3% per cent, as
compared with 3^4 and 3^4, respectively, on January 12;
rates on other classes were identical for the two dates.
The volume of bills held by February 16 had advanced to
5.4 per cent above the January 12 amount; holdings of
ninety-day maturities were heaviest.
The volume of bills accepted in January, including renew­
als of paper maturing during the month, by sixteen report­
ing banks in this district averaged 39.5 and 75.8 per cent,
respectively, above the preceding month and a year ago;
individually, in both comparisons eight banks indicated in­
creases, and five declines, while three reported no transac­
tions. Acceptances executed during the first two weeks of
February covered principally provisions, grain, cotton,
sugar, copper, coffee, tea, rubber, and rattan. January
purchases by seven banks were 27.7 per cent below De­
cember, but 7.6 per cent above the previous year; sales
in the same comparisons averaged for nine banks declines



of 45.7 and 16.6 per cent. The liability of the banks for
bills outstanding fell off 12.6 per cent during the month,
eight reporting a smaller amount on January 31 than at the
turn of the year, and five an advance; the gain of 9.5 per
cent over a year ago represents seven increases and six
declines. Total holdings were higher on January 31 than
at the close of any month last year. The Federal Reserve
Bank of Chicago bought $26,383,046 in acceptances during
January, and was holding at the end of the month $38803,448.
Agricultural Financing—An aggregate of loans outstand­
ing of nineteen Joint Stock Land banks in the five states
including the Seventh district amounting to $216,085,949
on January 31, represented a rise of $906,625 over the cor­
responding figure on December 31, 1926. Four Federal
Land banks with aggregate loans outstanding in the same
territory of $183,852,617 on January 31, exceeded the pre­
vious high point of $182,280,845 December 31 by about one
and a half million. Loans and discounts, including redis­
counts, of four Federal Intermediate Credit banks on Janu­
ary 31 aggregated $918,418 compared with $952,026
December 31. On January 31, 1926, the total of loans
outstanding for each class of banks in the five states includ­
ing the Seventh district was as follows: Joint Stock Land
banks, $195,965,235; Federal Land banks, $162,344,783; and
Federal Intermediate Credit banks, $1,599,351.
Volume of Payment by Check—Thirty-seven clearing
house centers in the Seventh district reported an aggregate
volume of payment by check in January 6.1 per cent below
December and 2.5 per cent less than the corresponding
month a year ago. The four larger cities, Chicago, Detroit,
Milwaukee, and Indianapolis, showed check payment as 6.4
per cent below December, and 2.7 less than in January, 1926,
Chicago decreasing 8.0 and 3.1 per cent, respectively, in the
two comparisons. Thirty-three smaller centers reported a
decline of 4.2 per cent in the aggregate from December,
and of 1.0 per cent from January a year ago.
VOLUM E OF PAYM EN T BY CHECK
... Che ck s D r a w n on C le a r i n g H o u s e B a n k s ,

7th District

Figures used are estim ates for calendar m onth, based on w eek­
ly reports to this bank. L atest figures, January, 1927, in thou­
sands of dollars: Chicago, D etroit, M ilwaukee, and Indianapolis,
5,020,168; 31 O ther C learing H ouse C enters, 933,890.

Savings—The January reduction in savings deposits, re­
flecting largely post-interest period withdrawals, amounted
to 1.4 per cent for the 215 reporting banks in this district;
individually 149 of the group indicated lower balances on
February 1 than at the close of 1926, with state declines
ranging from 0.1 per cent in Michigan to 3.5 per cent in
Wisconsin. For over two-thirds of the banks, however,
and for each of the five states, the number of new accounts
opened offset those closed, the district increase averaging 0.4
per cent. In comparison with a year ago, the gain of 0.7 per
Page 3

cent in deposits represents state increases for Indiana,
Michigan, and Wisconsin, and for 108 of the 184 banks for
which comparable 1926 data are available; all states con­
tributed to the advance of 2.9 per cent in number of ac­
counts.
Bonds—The bond market was very active during the
latter half of January and first part of February. A large
volume of issues was brought out which sold readily, the
abundant funds available for reinvestment, and the lack of
bond accumulation from 1926, contributing to a rapid

absorption. Demand covered various types of bonds: both
domestic and foreign securities were popular, the latter be­
coming increasingly difficult to obtain with the improved
condition of foreign investors; January business in real
estate bonds was fully up to expectations; institutional in­
quiry for municipals was reported as increasing. Prices
advanced until the second week in February when signs
appeared of a slight reaction, traceable in part to the new
offerings reaching a volume too heavy to move quickly.
Inventories, on the whole, remained comparatively low.

AGRICULTURAL PRODUCTION AND FOODSTUFFS
The number and gross valuation of live stock on farms
in the five states including the Seventh district and in the
United States on January 1, 1926 and 1927, are estimated
by the Bureau of Agricultural Economics as follows:

(I n T housands)
F ive S tates I ncluding
S eventh D istrict
U nited S tates
1927
N umber V alue N umber
V alue
Swine, including pigs............19,079
$329,483
52,536
$ 838,420
Cattle and calves......................... 11,766
623,472
57,521
2,430,593
Lambs and sheep...................... 4,351
44,312
41,909
406,531
Horses and colts........................ 3,596
288,614
15,279
974,886
Mules and mule colts............... 372
31,480
5,734
426,175
1926
Swine, including pigs................19,282
320,661
52,055
791,632
Cattle and calves.........................12,199
601,092
59,148
2,290,615
Lambs and sheep......................... 3,844
44,722
39,864
418,965
Horses and colts ....................... 3,725
295,453
15,840
1,036,896
Mules and mule colts.............. 376
32,079
5,733
466,988

Farm holdings of milk cows and heifers, two years of
age and over, in the five states including the Seventh Fed­
eral Reserve district declined 2.6 per cent on January 1
from the corresponding date of 1926, while the number of
heifers, one to two years of age, increased 5.2 per cent;
the aggregate for both classes was 1.5 per cent under Janu­
ary 1, 1926.
Grain Marketing—Interior primary markets in the United
States received a slightly heavier tonnage of corn and oats
and a smaller quantity of wheat during January than in the
preceding month; reshipments declined. Wheat receipts
showed the only gain over a year ago; all items fell con­
siderably under the 1922-26 average for January 1. Visible
supplies of corn and rye in the United States increased on
February 12 over a month previous; other grain holdings
declined. Wheat and corn inventories exceeded a year ago,
but stocks of oats, rye, and barley were smaller. Members
of the Chicago Board of Trade contracted for a consider­
ably smaller tonnage of future delivery grain during Janu­
ary than in December or the corresponding month last
year. Chicago quotations advanced for rye, and ranged
from barely steady to slightly firmer for oats, corn, and
wheat during January as compared with December.
Flour—The movement of flour through Chicago and pro­
duction by mills in the Seventh district were less in Janu­
ary than in the preceding month. As compared with Janu­
ary a year ago, receipts at Chicago were somewhat smaller
and shipments heavier, while production by reporting mills
declined.
CHANGES IN JANUARY, 1927, FROM PREVIOUS MONTHS

P er cent change from
D ecember
J anuary
Companies
1926
1926
INCLUDED
Production (bbls.)
............ — 9.6
— 4.6
34
Stocks of flour at end of month
(bbls.) ......................... ..............+ 6.2
-f- 2.4
30
Stocks of wheat at end of month
(bu.) ............................ .............. — 15.0
-f*28.6
30
Sales (volume) ............ .............. + 1-6
+ 6.3
15
— 12.6
Sales (value) ................. .............. — 2.9
15
Production includes wheat and other flours. Balance of items refer
to wheat flour only.

Movement of Live Stock—Receipts of live stock in Janu­
ary at public stock yards in the United States increased

4
Digitized Page
for FRASER


slightly in volume over December, with hogs, fat lambs,
and short-fed beeves from the corn belt and adjacent states
comprising the bulk of the offerings.
LIVE STOCK SLAUGHTER

Cattle
Yards in Seventh District,
January, 1927 ............ 268,622
Federally Inspected Slaugh­
ter U. S.
January, 1927 ................. 786,373
December, 1926 .......... 886,805
January, 1926 ............... 819,179

H ogs
983,232

L ambs and
S heet
363,240

Calves
117,806

4,513,543
4,393,602
4,500,631

1,114,889
1,171,829
1,039,270

396,652
410,046
409,526

January reshipments to feed lots declined for cattle and
increased for lambs in comparison with a year ago; both
items showed the customary recession from December.
AVERAGE PRICES OF LIVE STOCK

(Per hundred pounds at Chicago)
W eek ended
M onths of
F eb. 12
J an.
D ec.
J an .
1927
19271
1926
1926
Native Beef Steers (average) $10.50
$10.20
$10.25
$ 9.65
Fat Cows and Heifers............ 6.75
6.40
6.40
6.65
11.95
Hogs (bulk of sales)........... ......... 12.00
11.95
11.65
Yearling Sheep .................... ......... 10.75
9.20
12.70
10.25
Lambs (average) ......................... 12.80
12.55
12.40
15.25

The index numbers compiled by the International Live
Stock Exhibition show the volume of inspected slaughter
in the United States as 96, the price of all live stock as
123, and the total value of the slaughter 118 for January,
compared with similar indices of 101, of 127, and 128, re­
spectively, for December.
Meat Packing—Slaughtering establishments in the United
States produced a slightly smaller tonnage of meat and
fat during January than in the preceding month. Largely
because of an additional working day in the current com­
parison, employment for the last payroll in January in­
creased 1.8 per cent in number, 17.2 per cent in hours
worked, and 15.1 per cent in total value over the corre­
sponding period in December. Domestic demand continued
moderate. The total value of sales billed to domestic
and foreign customers by fifty-six meat packing concerns
in the United States increased 6.9 per cent over December,
but was 4.1 per cent under a year ago. Sales figures for
the calendar year 1926 were 2.1 per cent greater than for
1925. Chicago quotations advanced in January over the
December average for veal, cows, and common quality
steers, and firmed slightly for fresh and pickled hams, dry
salt meat, fresh bellies,, and a majority of beef cuts. Prices
eased somewhat for lard, pork loins, pickled picnics, and
smoked meat, but showed practically no change for lamb
and most carcass beef. During the early part of February
quotations ranged from steady to slightly easier.
February 1 inventories at packing plants and cold-stor­
age warehouses in the United States exceeded those for
January 1, although some recession was shown in beef,
lamb, and miscellaneous meat stocks. Dry salt pork hold­
ings declined from a year ago; the volume of other prod­
ucts increased. All items, with the exception of pickled

beef, frozen pork, and lamb, fell below the 1922-26 average
for February 1. Foreign demand for packing-house prod­
ucts remained practically unchanged in January from the
preceding month; a majority of firms reported shipments
for export slightly greater for lard and oleo oil and smaller
for meat than in December. Consignment inventories
abroad were indicated a little heavier for lard and lighter
for meat on February 1 than at the beginning of January.
European quotations remained slightly below the Chicago
parity.
Dairy Products—The quantity of butter manufactured
by sixty-four creameries in the Seventh district totaled 10.0
per cent greater for January than for December, and was
7.3 per cent in excess of a year ago. Statistics issued by
the American Association of Creamery Butter Manufactur­
ers indicate an increase for the country over December,
but a recession from the corresponding period last year.
Sales of creamery butter billed to customers by sixty-six com­
panies in the district declined 2.9 per cent from December and
increased 4.8 per cent over January, 1926. Butter producc

The storing of coal by railroads and large industrial con­
sumers, against a possible suspension of operations on April
1 in the union fields, was the chief feature of the bituminous
coal market in this district during January. Demand for
domestic sizes expanded and contracted in consonance with
weather conditions. The prices of screenings have been
very firm, while those of the prepared sizes were reduced
somewhat after the first week in February.
Production in this district during January remained on
about the December level. Output of mines in Illinois to­
taled 8,391,428 tons for the month, a decline of only 63,000
tons from December, and larger than in January, 1926 or

tion figures reported to this bank showed a gain of 5.3 per
cent for the calendar year 1926 over 1925, while sales in­
creased by 1.6 per cent. Receipts of American cheese at
Wisconsin primary markets from factories within that state
during the four weeks ended January 29, exceeded those for
the previous period by 19.9 per cent, but declined 13.9 per
cent from a year ago; redistribution from these centers
receded 0.4 per cent and 29.7 per cent, respectively, in the
two comparisons. Inventories of dairy products at coldstorage warehouses and packing plants in the United
States were lower for February 1 than at the beginning of
January or a year ago. Butter and egg holdings fell below
the 1922-26 average for February; the stock of cheese in­
creased. January receipts of butter and eggs declined at
Chicago from the previous month and the corresponding
period last year; those for eggs showed the customary gain
over December and were slightly greater than in January,
1926. Quotations at Chicago averaged lower in January
for butter and eggs, and higher for cheese than in De­
cember.

L

1925. There were 226 mines in operation during the month
(one less than in December), for an average of 20 2/10 days
as compared with 20 days in the preceding month, and
employing 72,259 men or 454 more than a month previous.
Output of bituminous coal in the United States for Janu­
ary was somewhat less than in December, but heavier than
in any other January of which this bank has record (1915).
At the current rate of consumption in the United States,
stocks in the hands of commercial consumers on January
1 were sufficient to last thirty-seven days, as compared with
thirty days a year ago.

INDUSTRIAL EMPLOYMENT CONDITIONS

The downward trend in manufacturing activity that has
continued since last September, persisted through the early
weeks of 1927, and by the middle of January had brought
employment 1.3 per cent below the volume of a month earlier.
With the exception of the textiles group, all of the report­
ing industries registered declines either in the number of
employes, in the amount of payrolls, or, as was most often
the case, in both of these items. The gains reported for
the textile industry were the result of increased activity in
the manufacture of men’s and women’s clothing, an increase
which is lagging behind the usual requirements of the sea­
son. A sharp drop in construction operations, as well as
in the automobile industry, was accompanied by dullness
in many other lines, as in the output of iron and steel, of
lumber, and stone, brick, and cement. Under the “metals
and metal products” group, an aggregate decline was reg­
istered for the third consecutive month; the losses for elec­
trical apparatus, and agricultural implements were espe­
cially heavy. Declines were general for the industries in­

cluded under food products, although returns available for
the latter half of the month indicate a substantial improve­
ment in the meat packing industry.
Reports received from the Employers’ Association of
Detroit and covering employment at that city, show a steady
gain since the low point that was reached the latter part
of December. Early in February, the reported volume of
employment was 4.1 per cent higher than at the beginning
of the year and about on a level with last October; the
comparison with a year ago still shows a reduction of about
17 per cent. While there were other indications of an up­
ward trend in manufacturing activity since the middle of
January, the reports from the free employment offices
continue unfavorable, the number of applicants increasing
steadily in ratio to available positions. In Illinois this ratio
was 214 per cent at the close of January, as compared with
155 for December, and was the highest since January,
1922. For Indiana the ratio rose from 202 early in January
to 213 the first week in February.

EMPLOYMENT AND EARNINGS— SEVENTH FEDERAL RESERVE DISTRICT
I ndustrial G roups

All' groups (10)................................................................
Metals and metal products (other than vehicles)
Vehicles ..............................................................................
Textiles and textile products........................................ .
Food and related products...........................................
Stone, clay, and glass products...................................
Lumber and its products................................................
Chemical products .............. ..........................................
Leather products .............................................................
Rubber products .............................................................
Paper and printing..........................................................



N umber of W age E arners
W eek ended
J anuary I s D ecembf.r 15 P er C ent
1927
1926
C hange
354,318
358,831
— 1.3
150,120
151,754
— 1.1
32,089
32,339
— 0.8
26,477
26,180
+ 1.1
45,964
— 2.8
44,690
12,769
13,878
— 8.0
29,657
— 1.8
30,197
8,645
8,384
+ 3.1
16,750
16,974
— 1.3
3,066
3,026
+ 1.3
30,055
— 0.3
30,135

T otal E arnings
W eek ended
J anuary 15 D ecember 15
1927
1926
C hange
$8,938,597
$9,217,106
— 3.0
3,587,315
3,709,571
— 3.3
869,059
899,762
— 3.4
659,138
619,933
+ 6.3
1,158,351
1,167,661
— 0.8
363,188
400,667'
— 9.4
695,710
767,094
— 9.3
216,914
225,846
— 4.0^
__4
353,892
369,781
75,765
79,491
— 4.7
959,265
977,300
— 1.8

Page 5

MANUFACTURING ACTIVITIES AND OUTPUT
Automobile Production and Distribution—A rise over
December was recorded in automobile production for Janu­
ary, passenger cars manufactured in the United States ag­
gregating 196,973, an increase of 43.4 per cent, while truck
output totaled 37,157, a gain of 30.6 per cent. In the com­
parison with January a year ago, passenger car production
was less by 27.2 per cent, but trucks showed an increase
of 24.6 per cent.
Wholesale distribution of automobiles in the Middle
W est increased seasonally in January over the preceding
month, but sales remained below the corresponding month
of last year; retail sales declined in both comparisons.
Although stocks of new cars in the hands of dealers in­
creased over those held at the end of the year, the gain
was smaller than usual for January 31 over December 31,
and they were less in the yearly comparison for the first
time since September, 1925. Sales made on the deferred
payment plan during January by thirty-two dealers averaged
40.4 per cent of their total retail sales for the month, which
compares with a ratio of 44.1 for December and with
47.3 in January, 1926.
MIDWEST DISTRIBUTION OF AUTOMOBILES
Changes in January, 1927, from previous months

P er cent change from Companies INCLUDED
J anuary D ecember J anuary
D ecember

New cars
Wholesale —
Number sold ....... .......
Value ...................... .......
Retail—
Number sold ................
Value ...................... .......
On hand January 31
Number .................. ......
Value ...................... .......
Used cars
Number sold ....... .......
Salable on hand—
Number .................. ......
Value .............................

1926

1926

1926

1926

+32.2
4-31.4
— 20.0
—23.7
+12.1
+ 9.S
— 12.4
+ 1.2
— 9.4

— 23.1
—27.3
— 30.7
— 22.4
— 7.0
— 3.8

36
36
84
84
55
55
85
55
55

33
33
81
81

— 3.4
— 2.5
+ 8.7

52

52
82
52

52

Agricultural Machinery and Equipment—January billings
of agricultural machinery and equipment to domestic and
foreign customers by eighty-one manufacturers in the
U n ite d S ta tes re p o rtin g to this b an k, receded 5.5 per cent
in total value for the tractor-thresher-combined harvester
group, 48.9 per cent for barn equipment, and gained 63.9
per cent for all other in comparison with those for Decem­
ber. An increase of 6.1 per cent, and declines of 11.3 and
20.1 per cent, respectively, were shown from January a year
ago. The sales billed to domestic customers aggregated
12.9 per cent greater for the calendar year 1926 than for
1925, while those billed for export increased by 16.0 per
cent, with the combined total showing a gain of 13.4 per
cent, according to a compilation from the monthly reports
of ninety companies in the United States.
PRODUCTION AND SALES OF FARM EQUIPMENT IN THE
UNITED STATES

Changes in January, 1927, from previous months
P er cent change from
D ecember
J anuary
Companies
1926
included
1926
—12.6
81
Domestic sales billed................... +37.8
— 16.4
46
Sales billed for export.............. — S.5
— 13.2
81
Total' sales billed........................ +29.9
— 2.8
80
Production ...................................... + 9.8
Sales based on value. Production computed from average employ­
ment during the month.

Iron and Steel Products—Demand for products of Chi­
cago district steel mills continued quite active through Jan­
uary; specifications were general from all lines of industry.
The unfilled tonnage of the United States Steel Corporation
on January 31, amounting to 3,800,177 tons, showed a decline
of 160,792 tons from the end of 1926, and compared with
4,882,739 tons on January 31, 1926. Average daily steel in­
6
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got production for January in the United States was almost
10 per cent greater than in the preceding month, but fell
below January of the two previous years. Pig iron output
for the country likewise was less than in the corresponding
month of 1926 or 1925, and increased very slightly over
December; in the Illinois and Indiana district the daily
average was the lowest in fifteen months.
Prices proceeded to soften further through January and
the first half of February; the composite average of four­
teen iron and steel products, on February 16 (compiled by
Iron Trade Review) stood at $36.91, representing the
twelfth weekly decline and comparing with $38.90 on Feb­
ruary 17 last year. Chicago pig iron prices weakened
toward the end of January, and scrap iron and steel prices
which strengthened the first of February, declined again in
the second week.
The value of shipments during January by twenty-seven
iron and steel casting foundries in the Seventh district in­
creased 1.9 per cent over the preceding month and declined
13.2 per cent from January, 1926. Production, as measured
by metal consumption, increased in the month-to-month
comparison but was lower than a year ago. The majority
of stove and furnace manufacturers reporting to this bank
shipped a smaller amount in January than in December or
the corresponding month of 1926; orders booked increased
in the former, and declined in the latter comparison; stocks
have gained, as well as production.
Shoe Manufacturing, Tanning, and Hides—January ship­
ments of shoes by thirty factories in the Seventh district
exceeded current production by 6.7 per cent; both items in­
creased in volume over a year ago. For the calendar j^ear
1926, production and shipment figures reported to this bank
gained 0.9 per cent and 2.1 per cent, respectively, over 1925.
The number of stock shoes reported on hand February 1
by twenty-seven of the companies was equivalent in the
aggregate to 76.9 per cent of the quantity distributed by
them during January. Unfilled orders on the books of
twenty-one concerns provided for approximately six weeks’
future business at the current forwarding rate.
CHANGES IN THE SHOE MANUFACTURING INDUSTRY IN
JANUARY, 1927, FROM PREVIOUS MONTHS

P er cent
D ecember
1926
Production ........................... — 12.4
Shipments .............................. + 3.4
Stock shoes on hand........... — 5.9
Unfilled orders .........,........ — 8.6

change from
J anuary

1926
+ 6.6
+10.0
— 16.2
— 10.4

Companies
included
30
30
27
21

Leather production showed little change in January from
the previous month, and the total value of sales billed to
customers failed to equal that for December, according to
reports from representative tanners in the Seventh district.
Quotations ranged from steady to slightly firmer.
The sales of packer green hides and calf skins at Chicago
declined in quantity from December. Prices strengthened
somewhat in January and then tended to ease early in
February.
Furniture—A large increase—103.8 per cent—was re­
ported over December in the amount of orders booked dur­
ing January by twenty-four furniture manufacturers in the
Seventh district, a reflection of the marts held during the
month and the usual heavy seasonal buying. In compari­
son with the two preceding years, however, the volume of
new business was smaller, orders booked by seventeen firms
averaging a decline of 18.2 per cent from a year ago and
of 5.5 per cent from January, 1925. Shipments declined
11.7 per cent from the preceding month, 10.4 per cent from

January last year, and were 1.2 per cent less than in the
corresponding month of 1925. Unfilled orders on hand
January 31, gained 44.3 per cent over a month previous,
but aggregated 5.7 per cent below January 31, 1926. The
rate of operations for January averaged about the same
as in December and was slightly under last year.
Raw Wool and Finished Woolens—Demand for raw wool
through January was moderate, but sales for the most
part were reported higher than a year ago. Prices remained
decidedly firm, with an upward tendency in a few grades.

Stocks in the hands of both dealers and manufacturers are
lower than a year ago, the decline in manufacturers’ stocks
of raw material, however, being greater than the reduction
in dealer’s supplies. Contracting for the 1927 clip in the
west has begun, but activity so far has been confined to a
comparatively small number of dealers. Foreign primary
markets display considerable strength. Manufacturers of
finished materials report that January activity consisted
principally in the completing of orders for the spring sea­
son and the final preparation of samples for fall.

BUILDING MATERIAL AND CONSTRUCTION ACTIVITIES

Unfavorable weather conditions, together with unwilling­
ness on the part of buyers to purchase more than enough
for immediate needs, in view of a declining market, have
retarded orders for lumber so that sales of twenty-one re­
porting wholesale dealers in the Seventh district declined
7.8 per cent from December and were 11.4 per cent smaller
than in January a year ago. Two hundred thirty-two
retail yards had decreases aggregating 12.5 and 5.4 per cent
in the same comparisons. Stocks of both wholesale and
retail dealers were somewhat larger than in December and
approximately the same as last year. The ratio of out­
standing accounts to sales for wholesale dealers was 139 in
January, as compared with 129 in December and 135 a year
ago; similar comparisons for retail dealers were 412, 470,
and 410 per cent.
Cement manufacturers generally reported January busi­
ness as seasonally smaller in volume, and falling somewhat
below January, 1926. Production was considerably cur­
tailed, but stocks still remain high. In the brick industry
weather conditions have interfered with both shipments
and production, and stocks have been reduced somewhat.

MERCHANDISING CONDITIONS

Wholesale Trade—January business in all five lines of
wholesale trade reporting to this bank declined from De­
cember with the exception of drugs, sales of which in­
creased somewhat. Collections and accounts outstanding
were smaller in the monthly comparisons, but as against
January, 1926, shoes showed increased accounts outstanding
and groceries, hardware, and shoes reported better collec­
tions. Stocks, as compared with December, were larger for
all lines; in the yearly comparison increases were indicated
only in hardware and shoes.
Groceries—Heavy snows generally interfered with trade,
resulting in a sales decline of 11.1 per cent from December,
though a gain of 1.3 per cent was recorded over January a
year ago, according to reports received from' thirty-seven
wholesale grocers in this district; individually, only six
firms showed larger sales than in December. Collections,
seasonally slow, dropped 18.2 per cent from December,
but increased 3.0 per cent over January, 1926. Outstand­
ings were smaller in both comparisons, and stocks, while
declining 11.3 per cent from a year ago, increased 1.6 per
cent over the end of December.
Hardware—Business of wholesale hardware dealers was
likewise retarded by weather conditions in most sections of
the district. Total sales of sixteen reporting firms declined
22.0 per cent from December and 8.4 per cent from a year
ago; receivables were smaller in both comparisons; stocks
increased 8.6 and 7.0 per cent, respectively; and collections,
while 34.1 per cent under those of December, were 3.0 per
cent larger than in January, 1926.
Dry Goods—According to reports received from fourteen
wholesale dry goods dealers, sales, outstanding accounts,



In some sections of Iowa, however, shipments were mark­
edly increased over both December and a year ago.
Building Construction—Contracts awarded in the Seventh
district during January aggregated $56,372,121, of which
$24,775,593 was for residential building. The total repre­
sented a decline of 38.8 per cent from December and an
increase of 10.3 per cent over a year ago; residential build­
ing declined in both comparisons, the percentages of de­
crease being 34.6 and 8.2, respectively. For fifty cities re­
porting to this bank, the number of permits issued averaged
a decline of 18 per cent from December and of 12.6 per
cent from January last year, while the estimated cost of
construction declined 29.1 in the first and increased 9.4 per
cent in the second comparison. Des Moines, Milwaukee,
and several smaller cities reported increases in both number
and amount of permits over a year ago. Five of the larger
cities of the district showed aggregate declines of 14.2 per
cent in number and 19.8 per cent in cost in the comparison
with the preceding month; as against January, 1926, these
same cities issued 13.8 per cent fewer permits with an in­
crease of 6.6 per cent in estimated construction cost.

and collections all declined as compared with December and
a year ago. Decreases amounted to 8.8 and 12.8 per cent,
respectively, in sales, 3.4 and 2.6 per cent in outstandings,
and 37.7 and 9.2 per cent in collections. Stocks increased
16.2 per cent over December with only two firms showing
decreased inventories, but were 17.2 per cent smaller than
a year ago, all firms but one contributing to the decline.
Drugs—Sales of ten wholesale drug firms increased 4.7
per cent in January over the previous month, but fell 3.3
per cent below those of a year ago. Stocks, 6.9 per cent
larger than in December, were approximately the same as
in January, 1926; outstanding accounts decreased by 4.6 and
12.2 per cent in the two comparisons; and collections
dropped 25.3 per cent and 6.6 per cent, respectively. Indi­
vidually, all firms showed declines in the last item as com­
pared with December.
Shoes—Eight reporting dealers showed average declines
in sales of 13.1 per cent from December and of 1.8 per cent
from a year ago, although four firms reported increases in
the monthly and five in the yearly comparison. Stocks were
larger than for either the previous month or a year ago.
Both outstanding accounts and collections decreased frord
the December figures, the percentage declines being 12.7
and 39.1, but increased by 1.2 and 5.1 per cent, respectively,
over the figures of January, 1926.
Department Store Trade—According to reports received
from eighty-four firms, the usual post-holiday trends were
evident in department store trade for the month of Janu­
ary. Sales decreased 53.7 per cent from December, with
all stores registering declines; collections were 19.3 per
cent larger, seven-eighths of the firms reporting increases;
receivables declined 17.0 per cent; and stocks were reduced
Page 7

by 4.5 per cent. Sales represented 26.0 per cent of average
stocks for the month as compared with 27.5 per cent a year
ago. Orders for new goods at the end of the month
amounted to 7.0 per cent of total 1926 purchases.
January sales decreased 3.2 per cent from a year ago. *
Only three other declines have occurred in this comparison
over a period of two years. Stocks were 1.2 per cent smaller
than on January 31, 1926; collections and outstanding ac­
counts were larger by 6.0 and 12.3 per cent, respectively.
Retail Furniture Trade—Total furniture sales during
January, as reported by twenty-three department stores and
twenty-nine retail furniture dealers, declined 37.6 per cent
from December and 0.9 per cent from January a year ago.
Stocks on January 31 were 5.0 per cent below the end of
the year, but 4.3 per cent ahead of January 31, 1926. Ac­
cording to the reports of furniture stores, outstanding ac­

counts decreased 4.5 per cent from the previous month and
increased 20.8 per cent over a year ago. Collections were
8.1 per cent smaller than in December but gained 7.0 per
cent over January, 1926. Installment sales fell off 38.1 per
cent from December and 0.3 from January last year, while
collections on these sales increased 1.4 and 11.1 per cent,
respectively.
Retail Shoe Trade—Retail shoe sales of thirty-five stores
declined 49.1 per cent from December, and 1.6 per cent
from January, 1926. Individually, only two firms showed
larger sales than in the preceding month, and about onehalf reported increases over a year ago. The ratio of ac­
counts outstanding to sales stood at 103.8 for January, as
compared with 84.3 for December and 102.4 for the correponding month of last year. Stocks and collections de­
creased in both the month-to-month and yearly compari­
sons.

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 1923-1924-1925 as a base, unless
otherwise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the follow­
ing month. Data refer to the Seventh Federal Reserve District unless otherwise noted.)
No. of Jan.
Firms 1927
Meat Packing— (U. S.)—
Sales (in dollars)........................................... 62 111.9
Casting Foundries—
Shipments (in dollars).............................. 27 71.6
Stoves and Furnaces—
Shipments (in dollars).................................. 13 55.9
Agricultural Machinery
& Equipment— (U. S.)—
Domestic Sales (in dollars)..................... . 90 107.5
Exports (in dollars)..................................... 60 94.1
Total Sales (in dollars)............................. 90 105.4
Production ...................................................... 88 129.8
Furniture—
Orders (in dollars)..................................... . 19 131.3
Shipments (in dollars).............................. . 19 101.0
Shoes—1
Production (in pairs).................................. 34 93.2
Shipments (in pairs)................................. 34 100.4
Electric Energy—
Output of Plants (K W H )...................... 8 140.2
Industrial Sales (K W H )....................... . 8 131.9
Flour—
Production (in bbls.)................................ 34 89.7
Output of Butter by Creameries—
Production ............................._..................... . 77 91.0
Sales ....................... ......................................... 77 96.2
Automobiles—
Distribution in Middle W est:
New cars— Wholesale— Number sold. . 28 86.0
Value .......... 28 68.3
New cars—Retail — Number sold.. 48 44.3
Value .......... 48 47.1
New oars— On hand — Number_____ 42 104.5
Value .......... 42 104.0
Used cars
— Number sold. . 41 79.7
Used cars— On hand — Number____ 41 131.6
Value .......... 41 111.3
Production (U. S.) : Passenger cars......
68.1
Trucks .................
110.3
Freight Carloadings— (U. S.)—
Grain and Grain Products.........................
100.8
Live Stock ............................................ ......
97.6
Coal ...................................................................
129.4
Coke ....................... ........................................
102.4
Forest Products ..........................................
90.4
Ore ..................................................................
24.7
Merchandise and Miscellaneous..............
95.6
Total ............................................................
98.8
Iron and Steel—
Pig Iron Production :s
Illinois and Indiana...............................
102.9
United States ..........................................
101.9
Steel Ingot Production— (U. S.)—2........
109.9
Unfilled Orders U. S. Steel Corp..........
79.6

Dec. Jan. Dec.
1926 1926 1925
104.5 116.8 104.7
70.6 83.9 79.7
84.0 61.3 92.9
80.4
95.8
82.8
124.8

119.4 95.4
116.9 147.9
119.0 103.8
141.3 133.7

80.2 167.6 66.5
106.0 102.4 101.5
106.4 87.4 102.6
96.7 91.7 97.4
139.4 126.6 126.9
126.7 117.9 117.6
99.3
81.1
103.8

94.1 103.2
86.5 81.0
80.9 100.3

63.1
50.7
58.1
63.6
95.5
94.9
94.7
129.3
112.8
47.5
84.5

113.5 99.0
97.1 80.4
67.0 70.9
63.0 70.7
114.4 91.9
106.7 84.2
81.1 83.4
156.8 149.2
120.0 114.2
94.4 96.4
88.5 97.2

120.1
93.4
139.9
137.4
101.4
27.6
123.4
119.5

102.6
100.8
108.4
151.0
93.9
25.5
95.6
96.1

131.8
103.1
111.8
187.4
112.5
31.0
125.7
117.6

103.7
101.5
100.2
82.9

108.8
108.9
119.8
102.3

108.0
106.8
114.6
105.4

Dec.
1925

59.5
75.3
64.8
94.9
27.2

70.7
95.9
64.7
99.4
30.9

103.2
138.5
100.1
121.6
143.3
85.1
118.8

242.0
302.3
189.6
231.6
252.6
179.9
242.9

114
116
286
178
108
166
167
101
127
170.1
165.4

226
168
332
225
188
427
280
214
212
158.8
94.4

Wholesale Trade—3
Net Sales (in dollars) :
39 60.2 39 67.4
Groceries ...................................
19 69.0 88.3
Hardware ........................................
Dry Goods ................................................ 13 56.6 62.8
13 93.5 92.0
Drugs ...............................................
10 26.5 31.3
Shoes .................................................
Retail Trade (Dept. Stores)—8
Net Sales (in dollars) :
Chicago .......................................................... 7 7 106.8 251.9
4 138.1 317.2
Detroit ...........................................
4 106.8 190.0
Des Moines ...................................
. 5 123.0 238.2
Indianapolis ...................................
5 116.2 257.6
Milwaukee ......................................
Outside ...................................................... 39 80.8 178.2
Seventh District ......................................... 6464 113.9 249.6
Retail Trade—(U. S.)—s
Department Stores...................................... 359 114 234
4 107 165
Mail Order Houses............................
Chain Stores :
27 343 373
Grocery ................. ...........................
D rug...................................................
9 209 261
6 106 215
Shoe .................... ..............................
Five and Ten Cent..........................
5 177 466
Candy ___________
5 178 303
4 94 223
Music ........................................ _........
Cigar ...................................................
3 134 222
Stamp Tax Collections—4
119.6 64.2
Sales or Transfers of Capital Stock
Sales of Produce on Exchange— Futures
73.1 80.8
U. S. Primary Markets—5
Grain Receipts :
Oats ..................................................
58.6 49.6
Corn ..................................................
109.8 104.9
Wheat ..................... ........................
60.8 61.9
Grain Shipments:
Oats ......:................................... ........
33.3 49.2
Corn .................................................
36.6 40.3
Wheat ..............................................
33.4 47.6
Building Construction—
Contracts awarded (in dollars) :
Residential .....................................
83.8 136.9
Total .................................................
86.3 132.0
Permits:
Chicago ........................................Number
48.4 56.1
Cost.
79.8 94.7
Indianapolis ............................... Number
33.1 48.3
Cost
27.5 25.1
Des Moines ............................... Number
30.4 20.6
Cost
30.6 70.7
Detroit ........................................Number
34.8 41.2
Cost
58.5 97.2
Milwaukee ................................. Number
56.2 61.6
Cost
97.8 67.9
Others (45) ................................Number
32.8 43.8
Cost
55.2 116.9
Fifty Cities ............................... Number
39.4 48.0
Cost
68.2 96.0

76.0 116.7
94.0 145.2
52.2 73.1
67.5 70.3
39.7 56.9
46.2 73.8
28.4 35.1
27.1 44.5
52.2 65.5
80.4 108.7
54.4 75.9
40.8 51.9
36.6 45.7
44.6 76.2
45.2 59.6
62.3 78.Jg
Tj-

thly average 1919=

72.0 78.2
132.1 152.6
57.9 100.4
55.4 65.5
45.3 57.7
34.4 61.2

oo

Illinois internal revenue district; 5. Monthly average receipts 1923-24-25=100.

8
Digitized Page
for FRASER


No. of Jan. Dec. Jan.
Firms 1927 1926 1926

First