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Business Conditions Seventh FEDERAL 035 A?i: r DISTRICT i. - JHAb M. Stevens, Chairman of the Board and Federal Reserve Agent Clifford S. Young, Asst. Federal Reserve Agent w Eugene Volume 18, No. 4 General Summary v f> John H. Martin, Asst. Federal Reserve Agent, Detroit Branch Harris G. Pett, George MONTHLY REVIEW PUBLISHED BY THE FEDERAL RESERVE BANK OF CHICAGO A. Prugh, Asst. Federal Reserve Agent March 31, 1935 liable unofficial estimates show winter wheat in the Sev enth district to have been in much better condition on MARKED rise in industrial employment and pay March I this year than on the corresponding date of rolls during February to a level higher than in sev 1934. eral recent years, reflected a further expansion in Seventh With a few exceptions in wholesale trade, merchandis district manufacturing activity, while the majority of re ing conditions in the Seventh district were favorable dur porting merchandising groups likewise showed favorable ing February. Department store trade showed a mod trends during the period. Industries producing foodstuffs, erate increase over the preceding month, as compared however, experienced declines. with practically no change in the seasonal average for The production of automobiles in February again reFebruary. The retail shoe trade expanded counter-seasoncorded a substantial gain. The steel industry, influenced ally in the period and the furniture trade more than usual. largely by automotive requirements, had a heavier vol Chain store sales also increased during the month. In ume of business than in the first month of the year, wholesale trade, electrical supply sales rose, contrary to although steel ingot output dropped some after the mid trend for February, while wholesale hardware sales re dle of February. Shipments of furniture manufacturers corded a greater than seasonal gain; the decline in drug gained somewhat more than seasonally in February, while sales from January was about average for the month, orders booked fell off less than usual. Shoe production but that in the grocery trade was larger than usual and in increased seasonally. Building construction decreased fur dry goods was counter-seasonal. ther and was considerably below that of last February, and the movement of materials consequently remained Demand for currency in the Seventh district increased restricted. between February 13 and the same date in March. In The heavy reduction in live-stock supplies caused the this period holdings of U. S. Government direct obliga production and distribution of meat-packing commodities tions by reporting member banks rose, as did their unse to drop sharply in February, although a continued ad cured loans; net demand deposits in these banks were higher and time deposits slightly lower. Commercial vance in prices prevented the aggregate value of sales from showing other than a very slight decline. The pro paper sales by dealers in the Middle West declined sea duction and distribution of creamery butter in the Sev sonally in February, but activity in new financing by enth district were less in February than a month previ means of bankers’ acceptances expanded somewhat. ous, the latter item falling off more than seasonally for Money rates continued at low levels. the period. Although sales of Wisconsin cheese exceeded the manufacture of the commodity to a greater than usual Credit Conditions and Money Rates extent, they were considerably below those of January. Grain marketing was exceptionally light in February. ReNet transfers of funds into the Seventh district for the accounts of banks and their customers (inter-district com mercial and financial transactions) amounted to almost 10 FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS OF CONDITION million dollars during the four-week period ended March (Amounts in millions of dollars) 13. This amount, together with an increase of more Change From Mar. 14 Mar. 13 Feb. 13 than 6 millions in the amount of reserve bank credit ex 1935 1934 1935 tended locally, resulted in a gain of over 16 millions $-12.5 Total Bills and Securities................................... $ 410.4 $ —31.8 -0.1 0.0 Bills Discounted..................................................... -1.6 in the supply of banking reserves in this district. The -2.7 0.7 0 Bills Bought............................................................ -12.5 -29.0 408.3 U. S. Government Securities.............................. increase in the amount of reserve bank credit extended +37.3 + 133.8 Total Reserves........................................................ 1,109.9 locally represents entirely a gain in “float,” i.e., items in + 106.5 +20.4 700.4 Total Deposits........................................................ + 13.6 783.4 + 10.1 Federal Reserve Notes in Circulation............. process of collection, which contrasted with a decline in that Ratio of Total Reserves to Deposit and Fed+3.2* 74.7 +0.9* eral Reserve Note Liabilities Combined.. . item in the preceding period (January 16 to February 13). Demand for currency in the period increased 13 million ♦Number of Points. A ^ Manager Division of Research and Statistics '■ . ■; A iw. dollars and a gain of 16^4 millions was registered in member bank reserve balances. Treasury cash and de posits at the Federal Reserve Bank of Chicago fell off 6 millions. Changes in the sources and uses of Seventh dis;rict banking reserves are shown in detail in the accom panying tabulation. Changes between February 13 and March 13 in Factors Affecting Use of Federal Reserve Bank Funds—Seventh District (Amounts in thousands of dollars) Reserve bank credit extended (exclusive of amounts to other i districts)......................................................................................................... Commercial operations through inter-district settlements................. freasury and National bank currency..................................................... +6,124 +9,777 +720 Total supply.................................................................................... +16,621 Demand for currency..................................................................................... Member bank reserve balances................................................................... rreasury cash and deposits at Federal Reserve Bank of Chicago. . Special and “all other” deposits.................................................................. Dther Federal Reserve accounts................................................................. +12,998 +16,612 —6,062 —7,599 +672 Total demand................................................................................. +16,621 Member Bank Credit Reporting member banks in the Seventh district, as shown on the accompanying table, reported an increase of 53 million dollars in total loans and investments on March 13 as compared with February 13. This gain reflected, 'or the most part, a somewhat larger volume of “other oans,” a rise of 22 millions in holdings of U. S. Govern ment direct obligations, and a small increase in loans on securities; holdings of “other securities,” on the other land, decreased 10 million dollars, and other items com prising total loans and investments recorded small de fines. Net demand deposits increased 39 million dollars, is against a rise of 10 millions in the period January 16 to February 13, and time deposits which in the last named period increased 5 millions, between February 13 and March 13 declined 3 million dollars. On March 13 of this year, total loans and investments were 324 million dol lars in excess of the aggregate shown on March 14, 1934, pet demand deposits were higher by 387 millions, and :ime deposits by 42 millions. A prevailing rate of 1J4 to 5 per cent on customers’ commercial loans was reported by down-town Chicago banks for the week ended March 15, unchanged from the range given for the corresponding week in February. De troit banks reported 3l/2 to 6 per cent for this item, also unchanged from the preceding month. The average rate earned by Chicago banks located in the down-town area during the calendar month of February was 2.92 per cent, CONDITION OF LICENSED REPORTING MEMBER BANKS SEVENTH DISTRICT as against 2.95 per cent in January and 3.38 per cent in February 1934. Commercial paper sales in the Middle West showed a seasonal recession of 14per cent in February from January, although in the comparison with the correspond ing month of last year they totaled 40y2 per cent larger. A slight increase in outstandings took place during the period, but the volume remained considerably below the 1925-34 average for February. Selling rates continued at a low level, ranging from J4 to Y Per cent for prime short-term obligations to 1 and \y2 per cent for longer maturities or less well-known paper; the bulk of sales was at per cent. Demand was in excess of supply dur ing the first two weeks of March; sales in the period, however, about equaled those in the first half of February. Rates in the early part of March remained unchanged. Dealer transactions in the Chicago bill market totaled considerably smaller from February 14 to March 13 than either in the preceding period or a year ago. Supplies fell off 54 per cent from those of January 17 to February 13 and were in the smallest volume since August 16 to Sep tember 12 of last year. A heavy decline in receipts from Eastern cities more than offset a slight gain in purchases from local acceptors. Sales to Chicago and out-of-town banks declined as did shipments to other markets, and as a result total distribution equaled supply. Rates were un changed during the period, ranging from % to 3/16 per cent. The value of new bills accepted and total purchases of bankers’ bills by Seventh district accepting banks ex panded somewhat during February over the first month of 1935, although they remained considerably below a year ago and the 1925-34 average for the month. Sales also increased during February and were the heaviest since last November. Maturities were greatly in excess of current purchases and, as a result, holdings in bank portfolios were reduced to the lowest point since March 1933, though remaining 5iy2 per cent above the 1925-34 average. The liability for outstanding bills at the end of February approximated that of January 31. TRANSACTIONS IN BANKERS’ ACCEPTANCES AS REPORTED BY A SELECTED LIST OF ACCEPTING BANKS IN THE SEVENTH DISTRICT Per Cent Change in February 1935 From January 1935 February 1934 Total value of bills accepted................. Purchases (including own bills discounted) Sales............................................................. Holdings*.................................................... Liability for outstandings*............................. +17.0 +10.4 ** -28.0 —0.0 —35.8 —46.5 +240.3 -38.2 —43.6 *At end of month. **Sales almost nil in January but amounted to 5 million dollars in February. Security Markets (Amounts in millions of dollars) Total loans and investments............................ Total loans on securities............................... To brokers and dealers In New York........................................... Outside New York................................. To others........................................................ Acceptances and commercial paper bought Loans on real estate.......................................... Other loans......................................................... U. S. Government direct obligations........... Obligations fully guaranteed by U. S. Government.................................................... Other securities.................................................. Net demand deposits........................................... Time deposits......................................................... Borrowings from Federal Reserve Bank......... Mar. 13 1935 $2,040 278 Change From Feb. 13 Mar. 14 1935 1934 $+33 $+324 -58 +6 0 + 14 +8 -2 -6 -66 28 34 216 60 32 303 1,021 + 16 +22 -102* +374 90 256 1,799 522 -10 +39 -3 _72** +387 +42 0 0 -1 -1 VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT (Amounts in millions of dollars) 0 ♦Represents total acceptances, commercial paper, loans on real estate and ather loans. Segregated figures not available. **Represents obligations fully guaranteed by U. S. Government and other lecurities. Segregated figures not available. Page 2 Activity in the Chicago bond market during February showed no appreciable change as compared with recent months. Fligh grade bonds continued outstanding in the demand with interest principally in municipal issues. Price trends in the high grade group were generally some- Feb. 1935 Chicago......................................................... $2,002 Detroit, Milwaukee, and Indianapolis. 981 Per Cent of Increase or Decrease From Jan. 1935 Feb. 1934 +11.9 -17.8 +26.1 -6.2 Total four larger cities............................. $2,983 489 35 smaller centers...................................... -14.3 -10.1 +16.2 +22.7 $3,4-72 -13.8 + 17.1 Total 39 centers......................................... what higher; rail issues, however, were an exception and losses were recorded among bonds in this classification. New financing remained light in volume during February, over half of which volume represented municipal and State issues. Demand continued to come largely from institutional buyers, although sales to individual custom ers were reported to be increasing. Prices on the Chicago Stock Exchange trended slightly downward during Feb ruary and the first half of March. The average price of twenty leading stocks* amounted to $28.25 on March 16 which compares with $30.00 on February 16. * Chicago Journal of Commerce. Agricultural Products Grain Marketing Receipts of wheat at terminal markets in the United States decreased 25)4 per cent in February from the ex ceptionally limited volume of January, and were only one-fifth normal for the month and less than half as great as a year ago. Reshipments declined more than seasonally from January to a level 12 >4 per cent under last February and 42J4 per cent below the 1925-34 Feb ruary average, but were 7)4 per cent above the low recorded in April 1934. Exports remained negligible dur ing the entire month. The total supply of wheat in all United States positions was one-third smaller on March 1, 1935, than on the corresponding date of 1934. Fur thermore, visible supplies of this grain in the United States continued to decline and on March 16 were 50 per cent below the 1925-34 average for that date. Prices averaged lower in February than in January. After evi dencing considerable strength early in the month, quota tions showed considerable weakness at the middle of March. Terminal receipts of corn aggregated less in February than for any month since June 1932, and were about onefourth the usual volume for this time of year. Reship ments of the grain were 16 per cent greater than last February but 14)4 per cent below January and 28 per cent under the 1925-34 seasonal average. Visible supplies of corn in the United States were one-third smaller on March 16 than in the ten-year average for the date. Moreover, farm stocks were much lower than a year ago. Prices of this grain showed marked weakness during the middle part of March. Receipts and reshipments of oats at terminal markets gained somewhat over January but remained considerably less than a year ago and were much below the 1925-34 February average. Visible supplies of this grain likewise were much smaller on March 16 than either a year ago or in the ten-year average. average. Furthermore, receipts of calves were under those of any month since March 1933. The movement to inspected slaughter—inclusive of ani mals that did not pass through public stock yards— showed some deviation from the trend of market receipts the supply of cattle declined 10 per cent from last Febru ary to a level below any previous month since April 1933 but was 4)4 per cent greater than the 1925-34 seasona average; that of lambs decreased 2 per cent from a year ago and was under any month since December 1929, but totaled 2y2 per cent above the ten-year February aver age; the supply of calves, on the other hand, though show ing the same downward trend from January as did re ceipts, was 8 per cent greater than usual for the month. Reshipments to feed lots fell off less than a seasonal amount in February from January, and were not only much larger than a year ago but considerably in excess of the 1930-34 average for the month. Meat Packing Owing to a marked reduction in live-stock supplies, the production and distribution of packing-house commodi ties by slaughtering establishments in the United States aggregated smaller in February 1935 than for any pre vious month in this bank’s records (January 1921). Commercial production declined 19)4 per cent from Jan uary to a level 30)4 per cent under the 1925-34 seasonal average and was 26 per cent under a year ago. Further more, total production—inclusive of Government tonnage —decreased 23)4, 29, and 24 per cent in these respective comparisons. The sales tonnage likewise was exception ally light in February, being 20)4 per cent less than in January, 23 per cent under last year, and 20 per cent below the 1925-34 February average. Prices advanced further during the month and were considerably above those of 1934. The total value of sales billed to domestic and foreign customers, therefore, decreased only y2 per cent from January, was 2 6)4 per cent in excess of a year ago, and within 9 per cent of the 1925-34 average for the month. Inventories of these commodities in the United States showed a non-seasonal decline of 35,005,000 pounds on March 1 from the beginning of February to a level 57,238,000 pounds below the corresponding date of 1934 and 15,245,000 pounds under the 1930-34 average for March 1. Payrolls for the closing week of February remained under a year ago and showed a recession from January of 9 per cent in number of employes, 7)4 per cent in hours worked, and of 8 per cent in wage pay ments. LIVE STOCK SLAUGHTER (In thousands) Movement of Live Stock Live-stock marketings in the United States aggregated less in February 1935 than for any other month in this bank’s records (January 1921). Hog receipts at public stock yards in the United States declined to a level 50)4 per cent below the 1925-34 seasonal average, and those of cattle were not only the smallest since December 1933 and one per cent under a year ago but only )4 per cent in excess of the average volume for February. Though totaling 4)4 per cent greater than last February, lamb marketings were less than for any month subsequent thereto and 8)4 per cent below the 1925-34 February Yards in Seventh District, February 1935.............................. Federally Inspected Slaughter, United States February 1935............................... January 1935.............................. February 1934...................... Cattle Hogs Lambs and Sheep Calves .. 186 420 286 82 . . .. . . 659 977 733 2,409 3,047 3,433 1,137 1,345 1,159 390 512 437 AVERAGE PRICES OF LIVE STOCK (Per hundred pounds at Chicago) Week Ended March 16 Native Beef Steers (average)........... $11.00 Fat Cows and Heifers......................... 7.75 Calves....................................................... 8.00 Hogs (bulk of sales)............................. 9.35 Lambs....................................................... 7.90 Feb. Months of Jan. $10 45 7 00 7.20 8.55 8.40 1935 $9.15 6.35 7.15 7.70 8.65 Feb. 1934 $5.55 4.40 6.00 4.35 9.20 Page 3 Shipments for export fell off in February from Jan uary and consisted principally of lard forwarded to the United Kingdom. Demand for American lard was only fair in that country and continued negligible on the Con tinent. British trade in hams was moderate and Cuban demand for packing-house commodities from the United States approximated that in January. English quota tions for American lard moved a little closer to Chicago parity during the month, but those of hams eased some what, although they continued above the United States basis. Prices of bacon were weak in the United Kingdom. Inventories of United States packing-house commodities in foreign markets—inclusive of stocks in transit—were reduced slightly on March 1 from the beginning of February. Dairy Products The production of creamery butter in the Seventh Fed eral Reserve district declined 5 per cent in February from January to a level 4 per cent under a year ago and 6J4 per cent below the 1925-34 average for the month. On the other hand, the sales tonnage fell off considerably more than seasonally from a month earlier, being 25}4 per cent less than in January, 28 per cent smaller than last February, and 24j4 per cent below this ten-year aver age. Production of the commodity in the United States decreased 10per cent from January and likewise was less than that of February 1934. Though showing a smaller than seasonal recession from February 1, inven tories of creamery butter in the United States aggre gated only 7,981,000 pounds on March 1 and were not only lower than for any other reporting date since May 1, 1929, but 20,195,000 pounds below the 1930-34 aver age for the date. Prices averaged approximately V/2 per cent higher in February than in January. However, the trend of quotations has been steadily downward since the middle of February. American cheese manufacture in Wisconsin expanded 9 per cent in the four weeks ended March 2 over the preceding period, but was 15 per cent smaller than a year ago and 19T /2 per cent less than average at this season. Sales of the commodity from primary markets of that state exceeded current production by more than a normal amount during February but were 31per cent below the corresponding weeks of January, 16per cent under a year ago, and 13 per cent smaller than the 1930-34 average for the period. Total inventories of cheese in the United States were reduced more than usual on March 1 from the beginning of February to a level only 2,325,000 pounds above a year ago and 6,550,000 pounds in excess of the 1930-34 average for that date. Prices rose approxi mately 8 per cent in February over January. Quotations eased in March. Industrial Employment Conditions February reports on employment conditions in the Seventh district again indicate a marked expansion in in dustrial activity, the number of men employed rising 4J4 per cent and payrolls 8j4 per cent above the correspond ing figures of a month earlier. While employment and payrolls generally show gains between January and Feb ruary, the increases in the past ten years have averaged only 1 and 3 per cent in these respective items, or con siderably less than those of the current period. The sub stantial gains of the past three months have brought em Page 4 ployment to the highest volume since October 1930, and payrolls to a level above any since May 1931. Despite this advance, current volumes are only slightly larger than last May which month constituted the high point for the year 1934. All major manufacturing groups with the exception of the food industries contributed to the rise in payrolls from January to February, while all groups except food and rubber products showed a gain in employment. Metal products recorded the heaviest expansion for this group in the month-to-month comparison since the summer of 1933, while the vehicles group continued to show substan tial increases but of lesser proportions than in the two preceding months. Textiles, wood, stone-clay-and-glass, and the leather industries experienced a greater-thanseasonal gain; the paper and printing industries ex panded contrary to the normal seasonal trend; while gains reported for the chemicals group were somewhat smaller than is usual at this season. In food products, which group furnished the main exception to the general manufacturing trend, decreases have been continuous since last September, the aggregate decline from the high point of that month amounting to 24 per cent in employ ment and 22 per cent in payrolls. Employment and pay rolls in the non-manufacturing industry groups as a whole registered decreases in February for the second consecu tive month, losses in the merchandising and public utility groups somewhat more than offsetting the gains reported for the coal mining and construction industries. Manufacturing Automobile Production and Distribution The increase over January in February production of passenger automobiles amounted to 21 per cent, as com puted from Department of Commerce data, which ap proximates the gain in the 1925-34 average for February. Output numbering 278,150 vehicles in the month this year recorded an increase of 48 per cent over the volume produced last February, exceeding that of the same month in any of the four preceding years and almost equaling that of February 1930. Trucks produced in February numbered 62,394, or 2 per cent less than in the preceding month but 42 per cent in excess of a year ago. EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT Industrial Group Week Report ing Firms Feb. 15, 1935 Earnings Wage (000 Earners Omitted) of Change From Jan. 15, 1935 Wage Earn Earn ers ings % % 5,610 8,104 827 1,717 163 442 480 401 196 1,480 +7.5 +9.0 +6.0 -1.7 + 10.2 +6.1 +0.8 +4.0 -3.5 + 1.3 + 14.1 + 15.6 + 10.6 +i.i 804,113 19,420 +6.0 +11.3 85,306 81,024 4,223 7,865 1,766 2,439 95 159 -3.3 -0.4 +3.8 +5.1 +7.9 + 15.7 178,418 4,459 -1.5 -18 No. No. Metals and Products1........ Vehicles.................................. Textiles and Products.... Food and Products............. Stone, Clay, and Glass---Wood Products.................... Chemical Products............. Leather Products................ Rubber Products2............... Paper and Printing............. 1,173 214 286 560 150 337 152 99 8 487 239,279 291,674 45,974 80,993 8,621 27,492 20,321 21,362 7,806 60,591 Total Mfg., 10 Groups... . 3,466 Merchandising*.................... Public Utilities.................... Coal Mining......................... Construction........................ 1,763 78 14 314 Total Non-Mfg., 4 Groups. 2,169 $ + 14.3 -2.4 + 10.5 + 10.7 + 1-7 +7.0 -3.6 -1.8 +8.6 23.879 +4.6 982.531 Total, 14 Groups................. 5,635 1Other than Vehicles. ^Michigan and Wisconsin. Illinois and Wisconsin. In accordance with seasonal trend, sales of new auto nobiles to users in the Middle West rose sharply in Febuary over a month previous, while distribution at whole sale showed a more moderate though likewise substantial ;ain in the period. Although February last year recorded exceptionally large expansion following delays in produc:ion of new models, the volume sold in the month this /ear greatly exceeded sales at that time. Used car sales ikewise gained considerably in February over the precedng month, but the percentage increase was little more :han half that in new car sales at retail, and the number ;old was only 8 per cent greater than a year ago. Stocks }f both new and used cars increased substantially in the monthly and yearly comparisons. The ratio of sales made on the deferred payment plan to total retail sales of deal ers reporting the item, amounted to 43 per cent in Feb ruary, or practically the same as a month previous or a year ago. falling 12 per cent under that of the preceding month and also being 4 per cent below the corresponding volume of a year ago. Shipments, also, declined 4 per cent from January but were 29 per cent heavier than last February, while production showed gains of one and 35 per cent, respectively, in these comparisons. In the manufacture of stoves and furnaces, shipments increased 44 per cent from January to February, thus off setting an equivalent decline in the month preceding. Orders accepted gained 20 per cent, molding-room opera tions 37 per cent, and inventories accumulated by 10 per cent. In the comparison with a year ago, all items were on a higher level: shipments increased 3 5 per cent, orders 28 per cent, production 17 per cent, and inventories 28 per cent. Iron and Steel Products For the fifth successive month, operations of Seventh district furniture manufacturers reporting to this bank were maintained at levels well above those of a year earlier, gains in February amounting to 52 per cent in orders booked and 28 per cent in shipments. Moreover, in the comparison with January—in which month new orders attained the highest level since July 1933—cur rent orders were only 11 per cent smaller, whereas the seasonal average decline for the period approximates 29 per cent. The expansion in shipments in February was greater than seasonal, amounting to 45 per cent in com parison with a 33 per cent increase in the 8-year average for the month; despite the acceleration in shipments, a sharp rise took place in the ratio of unfilled orders to current orders, which stood at the close of February at 108 per cent, 25 points higher than that obtaining a month earlier. The rate of operations averaged 59 per cent of capacity, three points above the preceding month and 16 points higher than in February 1934. Requirements of the automobile industry have been largely responsible for fluctuations in the rate of steel production during recent weeks in the Chicago dis trict. In addition to this tonnage, however, gradually in creasing needs of agricultural implement manufacturers and a slightly greater use of structural steel have contrib uted to the maintenance of production schedules, while railroad buying has remained quiet. Steel ingot output which had been around 67 per cent of capacity in the early part of February, dropped sharply to 54 per cent in the middle of the month and continued at about that rate until the second week of March when there was a further decline to 51 per cent, followed by a drop to 47 per cent in the third week. Aggregate business of steel pro ducers in February, nevertheless, exceeded that of Jan uary and was well above that of a year ago. Despite the shorter month, production of pig iron in the Illinois and Indiana district rose above that of January and was con siderably heavier than in the same month of the past three years. The sharp acceleration in activity reported by Seventh district steel casting foundries for January was partially lost during the succeeding month, orders booked in Feb ruary showing a decline of 29 per cent in tonnage units ind 20 per cent in dollar value, while shipments fell off l per cent in each unit of measurement and the tonnage oroduced remained unchanged. All items were heavier :han in February last year, the added tonnage amounting :o 22 per cent for production, 43 per cent for shipments, md 7 per cent for orders. Malleable casting foundries reoorted a decline in orders for February, the volume booked Furniture Shoe Manufacturing, Tanning, and Hides The manufacture of boots and shoes in the Seventh district showed a continued increase in volume during Feb ruary, preliminary figures rising 7l/2 per cent above those of a month earlier, as against an average seasonal gain of 8J4 per cent for the ten preceding years. Final data on shoe production in January recorded an expansion of 21 per cent over the closing month of 1934, a gain of 20 LUMBER AND BUILDING MATERIALS TRADE Class of Trade Feb. 1935: Per Cent Change From Jan. 1935 MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in February 1935 From Previous Months Per Cent Change From Jan. 1935 'Jew Cars Wholesale— Number Sold............................... Value.............................................. Retail— Number Sold............................... Value.............................................. On Hand Feb. 28— Number.......................................... Value.............................................. Jsed Cars Number Sold............................... Salable on Hand— Number.......................................... Value.............................................. Feb. 1934 Companies Included +17.7 +21.1 +29.4 +31.4 22 22 +51.9 +39.8 +38.0 +33.1 50 50 +23.9 +26.9 +29.2 +38.1 50 50 +27.1 +8.0 + 13.5 + 19.3 +45.7 +64.7 so so 50 Wholesale Lumber: Sales in Dollars............................... Sales in Board Feet........................ Accounts Outstanding1................. Retail Building Materials: Total Sales in Dollars................... Lumber Sales in Dollars............... Lumber Sales in Board Feet.... Accounts Outstanding1................. Number of Firms or Yards Feb. 1934 + 12.5 +5.4 +4.8 +3.8 -3.5 -4.7 11 9 It -17.7 -2.9 -10.0 -3.7 +2.1 -9.4 -26.0 -12.9 173 59 69 165 Ratio of Accounts Outstanding1 to Dollar Sales during Month Wholesale Trade.................................. Retail Trade......................................... Feb. 1935 Jan. 1935 Feb. 1934 159.8 363.7 171.5 309.7 174.1 429.6 JEnd of Month. Page 5 r per cent over the corresponding period a year ago, and an increase of 23 per cent over the January seasonal average. In the tanning industry, production showed a decline from January to February, but remained considerably larger than in the corresponding period last year. Sales, while maintaining the volume of a month earlier, totaled below those of a year ago, registering the first decline in this comparison since last October. Prices of leather were less firm than a month earlier. In the Chicago market the movement of packer green hides was in slightly smaller volume during February than in January, while trading in calf and kip skins was somewhat more active. Price quo tations which eased slightly in the first week of February, held fairly steady until the middle of March when a fur ther decline, ranging from one-half to one cent, was estab lished for practically all items. Building Materials, Construction Work Owing to the fact that most construction projects in this district remained closed down, distribution of build ing materials continued restricted in February. Shipments of cement in five midwest states were 22 per cent heavier than a month previous, however, and 7 per cent greater than a year ago. Shipments of brick and tile showed but small variation as compared with the preceding month and with February 1934, but some firms report orders booked for spring tonnage greatly increased over the vol ume of the corresponding period a year earlier. Sales of lumber at wholesale continued to gain in Feb ruary, though less markedly as compared with the Jan uary expansion: increases amounted to 13 per cent in dollar sales and 5 per cent in board feet, and exceeded seasonal expectations. At retail yards, sales contracted sharply: total dollar sales of all materials declined 18 per cent from January, in comparison with a decline in the seasonal average of only one per cent; lumber sales as measured in board feet and in dollars declined in less than seasonal proportions, however, losses amounting to 10 per cent and 3 per cent, respectively. Little change was re corded from January in accounts outstanding, the sharp rise in the accounts-to-sales ratio shown in the table for the retail trade being accounted for by a drop of similar proportions in total sales during the month; actually, accounts outstanding in the retail business declined slightly from the close of January. Building Construction Contract awards in the Seventh district continued to decline in February, the value thereof falling off 19 per cent from that of the preceding month and continuing for the fourth successive month substantially lower than in the corresponding period a year earlier. Residential con tracts declined considerably more sharply than did total awards in the comparison with January, but in reaction to a substantial increase in that month over December. BUILDING CONTRACTS AWARDED* SEVENTH FEDERAL RESERVE DISTRICT Period Ratio of Accounts Commodity Net Sales Stocks Accounts Out standing Groceries.............. Hardware............. Dry Goods......... Drugs.................... Electrical Supplies........... Page 6 Col lections standing to Net Sales +4.3 +8.9 + 11.9 +3.2 + 16.0 +6.1 + 1.4 +0.8 -7.8 -8.9 +3.3 -6.3 + 15.8 +8.2 + 10.5 -1.2 95.6 232.0 222.6 179.5 +28.5 +2.4 +5.4 +23.9 153.2 Residential Contracts February 1935......................... $11,350,231 Change from January 1935................ -18.8% Change from February 1934... -29.4% First two months of 1935............ $25,333,061 Change from same period 1934. . . -42.1% ♦Data furnished by F. W. Dodge Corporation. -29.7% -27.4% $2,996,707 -0.4% The valuation of permits issued in 100 cities of the dis trict, however, was 6 per cent greater than in January, and 67 per cent higher than in February 1934. The number of permits also increased, by 17 per cent and 27 per cent, respectively. Among the larger cities of the dis trict Chicago and Indianapolis as well as Des Moines showed recessions from January in estimated cost of per mits. In the year-ago comparison, Des Moines and In dianapolis recorded declines in both number and valve. Merchandising Trends varied during February in wholesale trade con ditions of the Seventh district. A decline of 6 per cent for the month in the wholesale drug trade was normal for the season. Grocery sales, however, falling off 10 per cent in the period, recorded a greater than usual decline for February, and a decrease of 8 per cent in dry goods sales compared with a 3 per cent increase in the 192S-34 aver age for the month. On the other hand, the wholesale hardware trade showed a S per cent expansion in Feb ruary over the preceding month, whereas the average gain for the period amounts to but 3y2 per cent; and sales of wholesale electrical supplies rose 13 per cent, as against a usual decline for February averaging 4 per cent. In all these reporting groups the dollar volume of sales con tinued to exceed that of the corresponding month a year earlier—in dry goods to about the same extent as a month previous, in hardware, drugs, and electrical supplies to a greater degree, and in groceries to a lesser one. Ratios of accounts outstanding at the end of February to net sales during the month were higher in the majority of groups than a month earlier, but for all lines were below those of a year ago. A gain of 4 per cent for February over January in Seventh district department store trade compared with practically no change in the 1925-34 average for the DEPARTMENT STORE TRADE IN FEBRUARY 1935 WHOLESALE TRADE IN FEBRUARY 1935 Per Cent Change From Same Month Last Year Total Contracts Locality Per Cent Change February 1935 From February 1934 Net Sales Stocks End of Month Chicago................. Detroit................. Indianapolis........ Milwaukee........... Other Cities......... +7.2 + 15.6 + 14.8 +4.6 +8.5 -16.6 + 1.7 7th District......... +9.5 -2.9 -3.2 +5.2 -5.3 Per Cent Change Two Months 1935 From Same Period 1934 Ratio of February Collections to Accounts Outstanding End of January Net Sales 1935 1934 +6.7 + 17.6 + 13.5 +2.6 +6.7 33.8 45.1 41.6 37.9 32.1 27.7 39.8 39.1 33.2 29.8 +9.2 37.9 33.5 , department stores expanded considerably more than sea sonally in February over January, the gain totaling 40 per cent as against an increase of but 18 per cent in the 1927-34 average for February. As a consequence, the dollar volume sold in the current period exceeded that of February 1934 by 19 per cent, whereas the gain in the yearly comparison for January was only 12 per cent. In stallment sales by dealers increased more substantially in the monthly comparison than did total sales, rising 52 per cent over January. A gain of 5 per cent took place in stocks over the end of January, but they totaled 3 percent smaller than at the end of February a year ago. Reporting grocery, five-and-ten-cent store, and men’s clothing chains had heavier sales in February than in the first month of the year, while sales by drug, shoe, cigar, and musical instrument chains were less in the compari son, aggregate sales of all groups increasing 4 per cent over January. As compared with last February, cigar, men’s clothing, and musical instrument chains recorded smaller sales this year, but the other and heavier groups showed increases, so that total sales amounted to 6 per cent more than a year earlier. month—in only four of these ten preceding years had an expansion been shown in the period. Sales by Detroit stores, increasing 10 per cent over January, recorded the heaviest gain among the larger cities of the district; Chicago trade expanded 2 per cent and that in Milwaukee 4 per cent; while the dollar volume sold by Indianapolis firms recorded a loss of 5 per cent. Stores in smaller centers had sales aggregating 6 per cent more than a month previous. The increase of ()/i per cent for the district over a year ago was slightly larger than in a simi lar comparison for January. Stocks expanded seasonally 6 per cent in February over a month earlier and were 3 per cent smaller than at the close of the month in 1934. The retail shoe trade increased 3J4 per cent in Feb ruary over the preceding month, whereas the 1926-34 average for the month shows a loss of 7 per cent. An increase of 12 per cent was recorded in sales over Feb ruary last year, which was somewhat larger than the Jan uary gain in the yearly comparison. Stocks rose 13 per cent at the close of February over a month previous and aggregated 5 per cent larger than a year ago. Sales of furniture and house furnishings by dealers and MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the months 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 following month. Data refer to the Seventh Federal Reserve district unless otherwise noted.) No. of Firms Meat Packine—(U. S.)— Sales (in dollars)........................................ Casting Foundries— Shipments: Steel—In Dollars................................... In Tons....................................... Malleable—In Dollars......................... In Tons.............................. Stoves and Furnaces— Shipments (in dollars).............................. Furniture— Orders (in dollars)...................................... Shipments (in dollars).............................. Flour— Production (in bbls.)................................. Output of Butter by CreameriesProduction.................................................... Wholesale Trade— Net Sales (in dollars): Groceries................................................... Hardware................................................. Dry Goods............................................... Drugs......................................................... Retail Trade (Dept. Stores)— Net Sales (in dollars): Chicago..................................................... Detroit....................................................... Indianapolis............................................. Milwaukee............................................... Other Cities............................................. Seventh District—Unadjusted.......... Adjusted............... Automobile Production—(U. S.)Passenger Cars............................................... Trucks................................................................ Building Construction— Contracts Awarded (in dollars): Residential.................................................. Total.............................................................. Iron and Steel— Pig Iron Production:* Illinois and Indiana............................... United States............................................ Steel Ingot Production—(U. S.)*......... Jan. Dec. Nov. Oct. Sept. Feb. Jan. Dec. Nor. Oct. Sept. 1935 1935 1934 1934 1934 1934 1934 1934 1933 1933 1933 1933 47 80 81 73 71 79 77 63 60 54 56 67 63 12 12 21 21 31 29 37 57 31 30 37 59 20 19 28 42 24 25 29 43 27 26 26 38 29 31 24 34 22 21 28 44 21 21 23 38 18 20 23 36 21 22 23 36 23 25 25 39 19 19 24 38 10 85 59 101 144 192 140 63 45 7* 109 128 108 14 14 43 36 49 25 25 30 34 36 40 42 40 39 28 29 35 21 18 23 21 28 24 38 42 47 Feb. 19 90 103 93 101 117 106 104 117 100 106 104 90 59 81 86 88 98 125 133 85 92 94 93 109 115 28 11 9 13 64 43 38 66 72 41 42 73 57 42 66 77 65 43 73 76 58 50 65 62 39 34 64 38 37 70 63 46 28 68 70 52 35 64 64 46 33 57 66 51 38 61 70 50 41 61 27 5 4 5 40 81 81 60 59 69 70 58 54 61 76 124 139 140 125 116 126 75 77 81 83 83 74 78 71 78 76 85 89 75 79 72 76 98 96 76 68 80 78 56 67 56 54 58 73 56 58 62 58 52 56 70 10* 65 60 58 62 79 104 109 65 67 67 70 77 65 68 61 74 67 83 83 65 73 66 70 87 83 73 61 73 71 95 166 78 169 44 146 16 87 29 127 42 119 64 117 39 115 17 79 15 49 36 79 54 91 4 17 6 20 5 26 6 22 8 34 S 29 6 24 4 40 3 48 5 34 5 31 12 29 63 59 86 51 49 79 38 34 58 34 33 31 41 34 31 38 39 46 34 40 68 55 31 39 54 34 37 44 45 45 60 42 33 76 50 64 58 67 114 119 111 52 66 •Average daily production. *4 Page 7 PER CENT HO NATIONAL SUMMARY OF BUSINESS CONDITIONS INDUSTRIAL PRODUCTION (By the Federal Reserve Board) TN February industrial production increased by less than the usua seasonal amount, following sharp advances in December and Janu ary. Wholesale prices of many leading commodities showed little changi in February and declined in the early part of March; prices of livi stock and meats, however, advanced further in February and continue* at relatively high levels during the first three weeks of March. Production and Employment Index number of industrial production, adjusted for sea sonal variation (1923-1925 average = 100). ] 120 'ACTOR Y EMPLOYMEN r 1 110 ] H1 110 j 100 100 ___| 1 90 90 80 I 70 60 50 1929 1930 1932 1933 1934 1935 Index of factory employment, adjusted for seasonal varia tion (1923-1925 average = 100). CONSTRUCTION CONTRACTS AWARDED Daily average output of basic industrial commodities increased ii February by an amount smaller than is usual at this season, and th> Federal Reserve Board’s index, which makes allowance for seasons variations, declined from 91 per cent of the 1923-25 average in Januan to 89 per cent in February. At steel mills, activity increased furthe during the early part of February; later in the month and in the firs three weeks of March, however, activity declined, contrary to seasons tendency. In the automobile industry, production continued to increas* and the output indicated for the first quarter is larger than in the corre sponding period of any other year since 1929. Lumber production re mained at a low level. At textile mills, activity in February decline! somewhat from the relatively high rate of the preceding month. In tht meat-packing industry output continued to decline. Factory employment increased between the middle of January anc the middle of February by more than the usual seasonal amount, re fleeting substantial increases in working forces in the automobile, ma chinery, iron and steel, and wearing apparel industries, and smallei increases in many other lines. At meat-packing establishments, employ ment continued to decline, and at tobacco factories it showed less thar the usual seasonal growth. Payrolls at manufacturing establishment: also increased considerably in February. In non-manufacturing indus tries employment and payrolls showed little change. Total value of construction contracts awarded in the period froir January 1 tp March 15, as reported by the F. W. Dodge Corporation was smaller than in the corresponding period last year, reflecting a reduction in the volume of public projects. The value of contracts awarded for residential building during this period showed a slight in crease over the low level of a year ago. Distribution Daily average volume of revenue freight-car loadings showed a sea sonal increase in February and little change in the first half of March. Department store sales increased in February, a month when there is usually little change, and the combined total for the first two months oi the year was larger than a year ago by 5 per cent. Wholesale Commodity Prices Three-month moving averages of F. W. Dodge data for 37 Eastern States, adjusted for seasonal variation. Latest figure based on data for January and February, and estimate for March 1935. During the period from the beginning of February to the middle of March, there were wide movements in prices of many individual com modities, while the general level of wholesale prices, as measured by the Bureau of Labor Statistics index, showed little change. In the third week of March prices of cotton and other textiles, grains other than wheat, coffee, rubber and tires, scrap steel, and tin were considerably lower than at the beginning of February, while prices of live stock, meats, and sugar were higher. Bank Credit MEMBER BANK CREDIT All Oth«r 1934 Wednesday figures for reporting member banks in 91 lead ing cities. Latest figures are for March 13, 1935. During the four weeks ended March 20, member bank reserve bal ances declined by $280,000,000, principally in consequence of an in crease in Treasury deposits with Federal Reserve banks built up in con nection with March 15 fiscal operations. Excess reserves of member banks declined to about $1,950,000,000. Demand deposits (net) of weekly reporting member banks in lead ing cities increased further by $380,000,000 during the four weeks ended March 13. The balances of other banks with reporting banks increased by $100,000,000, while Government deposits declined, reflecting the withdrawal of funds from depository banks. Loans and investments of reporting banks increased by $275,000,000. There was a further growth of $85,000,000 in holdings of direct obligations of the United States Government and a smaller increase in obligations guaranteed by the Government. Loans to brokers and dealers in securities increased by $130,000,000, while other loans showed little change. Yields on United States Government obligations declined slightly further, and open-market money rates continued at a low level.
@FedFRASER