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BUSIN „ v A \ J CONDITIONS A REVIEW BY THE FEDERAL RESERVE BANK OF CHICAGO Volume 24 MAY 1, 1941 ~ ' STEEL FOR i » DEFENSE " t! IIow Ilefense Contract Service Aids .Maim fact n rers Industrial concerns enter into the National Defense Program in one of two ways, either through the direct sale to the Federal Government of war materials which makes them prime contractors, or by supplying materials to prime contracting establishments to aid in completing primary contracts. Manufacturers in the Seventh Federal Reserve district are serving in both capacities. The Regional Defense Contract Service, OPM, is set up with engineering and pro cedure specialists to bring prime and subcontractors together, to interpret OPM rulings, to evaluate facilities, and to effectuate procurement planning toward the general goal: expediting production for defense. For the assistance of the prime contractor, who in most instances is a large manu facturer or a highly specialized one, there are available for his guidance army and navy bulletins. Army Purchase Information Bulletin 1940, issued by the War Department, which outlines the manner in which facilities can be utilized to best advantage, contains com plete procurement planning information on all army services. It show's the procure ment areas in each case and lists the addresses of the purchasing and contracting officers and indexes, by products, the different articles purchased and at what points. The corresponding navy bulletin is “Selling to the Navy,” which outlines complete information for the guidance of those desiring business relationship with this depart ment. It contains information on Government restrictions, the general method of navy procurement, and covers the Bureau of Supplies and Accounts and the items required by the navy. In general, the navy has a centralized organization for purchasing sup plies. A limited number of these bulletins is available in the Defense Contract Office. As a means of deciding on items of interest at this time, a Priorities Critical List has been prepared. For perusal on the premises, there is a list of major defense contracts awarded by war and navy departments going back to June 1, 1940, arranged alpha betically and by Federal Reserve districts. For those concerns equipped to take on subcontracts, a partial list of prime contracts awarded is published every twm weeks. There is also open for inspection, a daily record of Federal proposals. Relationships between primary contractors and subcontractors are essentially the same as between other corporations buying and selling to each other. The concern which is interested in this outlet for its activity must take the initiative in following up good leads. In working out a solution, there will be adaptation of old equipment to new uses. Subcontracting methods of several large companies furnish a guide for methods of farming out. Looking at the picture from a community angle, the York Plan and “Organization under State Auspices” should be analyzed carefully. “In a democracy like ours.” OPM Farming Out Bulletin, Number 5, states, “we must rest our hopes of obtaining the results we desire mainly on the vigorous, volun tary action of prime contractors, potential subcontractors, and all the organizations and groups in the community to w'hich reference has been made. Full utilization of the country’s industrial facilities, through farming out, is however, dependent upon the assumption on the part of the procurement agencies themselves of a responsibility for following up the progress on orders through the prime contractors, and subcon tractors, and sub-subcontractors. To that end, it is essential that, as of any given time, the progress of all work be recorded, as it would be in a well-managed industrial establishment.” District Summary ol Business Conditions EVENTH district mobilization for national defense gained momentum during March and the first half of April. There was a marked expansion, both in primary and subcontracting in the area. Even some of the industries (such as metal stampings, stoves and furnaces, furniture, and stone) that had not as yet been fully brought into the program experienced an increase in business during March compared with February, and were operating at much higher levels than a year ago. Civilian trade also ivas exceptionally good. Industry—After the middle of April, there was a curtail ment of steel production, caused by a shortage of bitumi nous coal resulting from a stoppage of mining April 1. Prior to that time, operations in the steel industry had re mained near or above rated capacity, with practically no steel products in which the demand had not been excep tionally strong. Control over distribution of all alloy steels is being exercised. There has been an especially heavy de mand for all types of castings (including grey iron) used either directly or indirectly for national defense. The pro duction of screw machine products, machine tools, and of precision dies and gauges has been at high levels under the urgency for expansion in the airplane and airplane engine industries. Production at automobile plants con tinued at an unusually high level during March. In recent weeks this industry has agreed to curtail annual production of passenger automobiles in the amount of 1^000^000 cars in order to speed up output of engines and other materials for national defense. Employment and payrolls in both durable and non-durable goods industries showed a further expansion of 2 per cent in March. The increases over a year ago were more marked than in February. For all manu facturing groups, the rise over a year ago totaled 18 per cent in number of wage earners and 30 per cent in wage payments, even though industrial disputes continued in several large companies. The building industry has reached a post-depression high under the impetus of expansion in industrial plants and in defense housing. Petroleum refining and coal mining in creased in March, but operations in the latter industry practically ceased in April, pending negotiations of a new contract between the operators and miners. Agriculture—Much higher than normal temperatures in April 1941 promoted the growth of Seventh district crops in ground. Rains in the third week of April relieved subsoil deficiency and were beneficial generally but slightly de layed field work. However, this delay has not yet reached serious proportions; prospects for planting the spring crops remain much better than a year ago. Prices of most all agri cultural products have strengthened during recent weeks. Trade—Some measure of the extent to which defense opera tions have influenced consumer buying is reflected in current statistics of both retail and wholesale establishments. Despite a later Easter than last year, March sales at department stores were 11 per cent above a year ago. Those during the first two weeks ended April 12 showed a 24 per cent gain over 1940. Industrial areas participated heavily in these gains. Sales at reporting apparel stores of the district were only 5 per cent greater during March 1941 than in the same month of 1940. The retail shoe business declined 10 per cent in this comparison. For all lines covered, the dollar volume of goods sold at wholesale was 18 per cent greater this March than a year ago. Credit and Finance—Commercial, industrial, and agricul tural loans expanded throughout March and the first half of April; on April 16 they were more than 100 million dollars greater than at the beginning of the current year. Demand deposits (adjusted) returned close to the level of March 12. An important announcement was that the new Defense Savings Bonds will be placed on sale May 1. SEVENTH MARCH DISTRICT BUSINESS ACTIVITY 1941 COMPARED WITH 50 40 30 20 10 INDUSTRY MARCH 1940 Q 10 20 50 40 5 0 60 *70 B0 PER CENT DECREASE PER CENT INCREASE STEEL PRODUCTION1 MFG. EMPLOYMENT..... MFG. PAYROLLS BUILDING CONTRACTS.. MALLEABLE CASTING SHIPMENTS., STEEL CASTING SHIPMENTS FURNITURE SHIPMENTS.___ PAPER SHIPMENTS AUTOMOBILE PR0D..U.S_ _ BIT. COAL PROD...................... AGRICULTURE FARM CASH INCOME.2.............. MEAT-PACKING PR0D..U.S. CHEESE PROD..WIS. BUTTER PRODUCTION....... . CATTLE RECEIPTS........ HOG RECEIPTS................... ■ i ■ l TRADE 0EPT. STORE SALES............... DEPT. STORE STOCKS............ RET. SHOE SALES..... RET. FURNITURE SALES.___ WHOLESALE TRADE......... . ■ ■HBB FINANCE MEMBER BANK RESERVES.?... REP. NEMB.BK. DEMAND DEPOSITS, AOJ.?..... REP. MEMB. BK. LOANS.3.......... BANK DEBITS........................ . ■ 1. Ingot rate, Chicago district, week ending April 26. 2. February data. 3. As of April 16. Page 1 $189,000,000. As of June 12, 1940, the total was $579,000, 000, but April 16 it was $768,000,000, an increase of 32.6 per Mobilization of the defense program is being rapidly cent. Just what proportion of this increase in loans has been accelerated. Contracts awarded by the army and navy for for direct defense purposes is not known. Lending by com defense purposes since June 13, 1940, when the defense mercial banks for defense purposes was facilitated last program got under way, through March 31, 1941, have November by the passage of the Assignment of Claims Act, totaled more than $12,000,000,000. This amount will be which permits borrowers to assign their Government con expanded to more than $40,000,000,000, if all of the author tracts as collateral. In such cases, the loans are made to the ized and proposed expenditures reach the contract stage. contractor, and the claim against the Government is assigned This larger figure includes the cost of our own defense to the bank. program, estimated at $32,000,000,000; the $7,000,000,000 New capital obtained through the flotation of securities, authorized under the lend-lease act; and the British orders however, has continued at a low level. Slightly more than in excess of $3,000,000,000. $86,000,000 was raised in the open market during March What such a program means in terms of business condi 1941. This was the largest absorption of new securities in a tions is, of course, difficult to comprehend. It is about 90 single month since November 1940. A compilation made by per cent of our current national debt; more than 60 per cent the Commercial and Financial Chronicle shows that the total of the value of all goods manufactured in the United States of such issues since last June is only $640,000,000. Direct in 1937, a peak year; and more than half the national income awards for new plants and expansion of existing facilities in 1940. The National Defense Advisory Commission has and RFC loans, including those of the Defense Plant Cor estimated that it will require seventeen billion man-hours poration, have totaled more than twice that sum. of labor to complete the work. According to the same author There has also been a continued growth in the demand ity, it took only eighteen billion man-hours of labor to do for money which has not diminished during February and all manufacturing, mining, and steam railroading in 1939. March when the amount in circulation usually falls off. In Actual expenditures of funds for defense will be spread the Seventh district, the excess of payments over receipts has over a period of several years, but the full impact should totaled $243,000,000 from June 12 through April 2. be felt shortly. Defense spending by the Treasury has been on a rapidly ascending scale. It amounted to only $153, Industrial Activity 000,000 in June 1940; had reached $200,000,000 in August; Steel—The picture of steel business in the Seventh district, passed $400,000,000 in December; approximated $600, as in the rest of the country, has been one of continued pres 000,000 in February 1941; and is expected to exceed sure and practically capacity operations. In the Chicago $1,000,000,000 monthly by the end of the year. area, operations dropped to 96 per cent, April 26, after Projected against this national background, contracts having remained above rated capacity for five consecutive awarded to firms in the Seventh Federal Reserve district weeks. Orders poured into steel mills without much diminassume an added significance. Of the $12,185,000,000 ishment, although it is reported by the trade that total orders awarded by the army and navy to the end of March, about at Chicago in early April were somewhat lower than in pre 11 per cent, or close to $1,296,000,000 has been placed in vious weeks. Some companies are accepting only such orders the Seventh district. The stimulation to employment, with as can be included in 1941 schedules and those only in rela its consequent increase in consumer purchasing power, will tion to previous sales. The situation was alleviated slightly be felt in many lines of industry not directly participating in early April by suspension for about two months of orders in the defense program. If this 11 per cent ratio holds by the British for all carbon steel; however, this was ex throughout the program, monthly disbursements for defense pected to have little effect on domestic production. Such by the Treasury to this district alone should approach the declines as were shown in operations of Seventh district entire amount spent last June for defense purposes through steel mills during April were mainly due to shortages of out the country. coke and temporary shutdowns for repairs; activity in the Already this increased business activity is being reflected Detroit area declined because of an industrial labor dispute. in banking statistics. According to a recent survey by the There have been practically no steel products for which American Bankers Association, 195 of the country’s largest demand has not been unusually strong; national defense banks had about $573,000,000 of commitments for defense requirements for screw machine products and for high pre loans on their books at the close of 1940. Loans for sup cision machine tools and gauges have been especially great. plies and equipment totaled nearly $284,000,000, or 50 per Activity in shell steel has become increasingly important cent of the total; loans for plant facilities and other con throughout the area. Automobile concerns have exerted pres struction amounted to $197,000,000, or 34 per cent; and sure for deliveries of both sheet and strip steel and urged $92,000,000, or 16 per cent, represented open lines of credit acceptance of orders for large tonnages of both flat and advanced for capital purposes and capital requirements in rolled steel. There has been a strong export demand for tin connection with increased operations of customers contribut plate at Chicago and, with mills operating at close to 100 ing indirectly to defense. per cent of capacity, some of them are out of the market There has been a rapid rise in commercial loans through for the time being. Supplies of tin have been restricted out the nation. At the beginning of the defense program last because of ocean transportation difficulties. Highest preference ratings for defense and controlled summer, the volume of commercial, industrial, and agricul tural loans at reporting member banks in 101 leading cities rationings for civilian use were established in the priorities totaled $4,377,000,000. From June 12 through April 16, division of the OPM for machine tools and for aluminum, the increase amounted to $1,153,000,000, or 26 per cent. nickel, nickel steel, magnesium, tungsten, and certain other Seventh district reporting member banks have increased minerals and metals closely allied with the steel industry; their loans of this classification more rapidly than the aver however, civilian allotments of scrap aluminum were in age for the 101 cities. During the same period of time, creased after mid-April. April 16, the newly created Office of Price Administration Seventh district reporting banks have increased their loans for commercial, industrial, and agricultural purposes by and Civilian Supply announced the setting, for the time Some Aspects of the Defense Program Page 2 r ’ * r * being at least, of steel prices at the levels prevailing in the first quarter of the year. This followed price fixing orders covering other major products of interest in steel and allied industries. In late March, prices of aluminum scrap and secondary aluminum were fixed, an exception being made for those smelters and dealers who had acquired inventories at prices above the new ceilings set. Later price schedules were established by the Government for various grades of iron and steel scrap. These prices were to be binding for buyers as well as sellers. All schedules were based on the price of $20 per ton at Pittsburgh for No. 1 heavy melting steel scrap, with differentials fixed for various consuming points and for different grades. In the Chicago area, this particular grade was set at $18.75. There were reports from the trade indicating considerable indecision over those items not covered in the price differentials, and brokers sought an extension of time for the completion of all con tracts. Automobiles—Production at automobile plants continued at an unusually high level during March, although the normal expansion over February is considerable. This was not unexpected, as first quarter production had been at record levels. For the month, there were 410,258 passenger cars and 97,610 trucks manufactured in the United States; this represented an increase of 16 per cent and 38 per cent, respectively, over last year. Production was held up some what by momentary shortages of parts during March, and in April the weekly output figures were curtailed rather . sharply because of an industrial dispute at one large pro ducer. For the week ending April 12, output of cars and trucks declined to about 99,000. Retail sales have con tinued excellent, with buyers anticipating the possibility of advancing prices. Most of the automobile concerns are by now heavily engaged in defense work. It is believed that model changeovers this year may be much earlier than had been previ ously contemplated. This belief reflects shortages of certain basic materials for which substitutes are being found, as well as the increasing use of the automobile industry’s plant and man-power facilities for defense output. It has been estimated from one source that domestic, British, and Cana dian defense contracts already placed with the automobile industry may be as high as 2y2 billion dollars and that the total of the whole program may be substantially higher. An amount of work of this size undoubtedly necessitates consid erable diversion of both labor and materials from car manu facture. In fact, a closer estimate of the extent of diversion of men and materials from the automobile industry is indi cated in an announcement by the Office of Production ManPASSENGER AUTOMOBILES Number of new passenger automobiles produced and registered each month in the United States: Sources: Production, United States Department of Commerce; Registrations, R. L. Polk & Company. agement that the industry has agreed to an initial cut of 20 per cent in its 1942 output. According to the 0PM, the reduction would amount to about one million cars. Miscellaneous Manufactures—Seventh district found ries reported moderate gains in production and shipments of steel and malleable castings during March, with orders for steel castings rising sharply after a lag in the two pre vious months. Bookings for both types of castings were several times the volume of a year ago, and shipments and production also registered substantial increases in this com parison. There has been a heavy demand for all types of castings (including grey iron) used directly or indirectly in national defense, especially those for machine tool beds. STEEL AND MALLEABLE CASTINGS SEVENTH DISTRICT Steel Castings: Orders booked (tons)... Orders booked (dollars) Shipments (tons)............ Shipments (dollars)....... Production (tons)........... March 1941 Per Cent Change from February March 1941 1940 . +39 +431 . +36 +439 . +5 + 44 . +9 + 67 . + a + 58 Malleable Castings: Orders booked (tons)... Orders booked (dollars) Shipments (tons)............ Shipments (dollars)....... Production (tons)........... . . . . . + i +5 + 8 + 8 + 2 +222 +227 + 52 + 55 + 55 Manufacturers of stoves and furnaces stepped up mold ing-room operations another 20 per cent in March to meet a 40 per cent rise in shipments and an 18 per cent increase in inventories. Incoming orders were 30 per cent larger than in February and more than twice the volume recorded a year ago. Production exceeded last year’s figure by 32 per cent, whereas stocks showed a 15 per cent decline in this comparison. Furniture manufacturers of the district recorded minor changes in March after sharp fluctuations that characterized this industry during the two preceding months. There was a further increase in shipments of about 11 per cent, while the volume of orders booked, cancellations, and unfilled order files remained practically unchanged from a month earlier. The increases over a year ago were about the same as in February, except that the gain in unfilled orders was 90 per cent in March as compared with 70 per cent a month earlier. Building—The $131,000,000 worth of building contracts awarded during March in the Seventh district area consti tuted a peak in building activity, the awards being the largest recorded for any one month since May 1929. Expan sion of industrial plant facilities, made necessary by the present defense program, accounted for a large portion of the current contracts. Some of the larger awards for this purpose in March included a plane engine plant at South Bend, Indiana, valued at $24,000,000; an ammunition plant at Des Moines, Iowa, valued at $19,000,000; and a Chicago plant for the manufacture of plane engine parts, valued at close to $12,000,000. While exact figures are not yet avail able as to the valuation of total contracts awarded for de fense construction within the district, such contracts in the 37 States covered by the F. W. Dodge Corporation survey amounted to $139,000,000 during the month of March. It is evident that a considerable portion of this total was con centrated within the Seventh district. There was also a con siderable increase during March in the volume of contracts awarded for public works and utilities, practically all of which represented public ownership. Residential building Page 3 increased substantially but less than the customary seasonal amount and, as is usual, most of this building consisted of one-family and two-family dwellings. Building permits issued during March in 104 cities of the district reflected the usual sharp increase in building activity. The number of projects and estimated cost rose 60 per cent over the previous month. Compared with a year ago, the number of projects and estimated cost showed in creases of 28 and 53 per cent, respectively. Building materials industries in general reported increas ing demand for their products. Lumber sales rose about 20 per cent, and shipments of brick and cement expanded somewhat more sharply, particularly where affected by the defense program. Lumber yards reported some difficulty in keeping well balanced inventories, and brick yards are mak ing an earlier than seasonal expansion in operations to build up stocks. Building materials prices at wholesale in creased by a fraction of one per cent during the month and continued close to 7 per cent higher than a year ago. BUILDING! CONTRACTS AWARDED SEVENTH FEDERAL RESERVE DISTRICT Period Total Contracts 8131.178.000 March 1941........................................................................ +203% Change from February 1941..................................... +202% Change from March 1940........................................... 8225.920.000 First three months of 1941............................................ +126% Change from same period of 1940............................ Data furnished by the F. W. Dodge Corporation. Residential Contracts 829.380.000 +43% +44% 866.806.000 +59% Bituminous Coal Production—Bituminous coal produc tion in the Seventh district area rose steadily during March, as it became increasingly evident that coal operators and the United Mine Workers would be unable to reach an agree ment before the expiration of their contract on April 1. Daily production rate was close to 10 per cent higher than in February and at least 35 per cent above March 1940. As of April 21, coal mines had been idle for three weeks and supplies in several important industries, especially in the steel mills, were running low. In the Southern section of Illinois, however, some of the mines operated by the Pro gressive Mine Workers union, an affiliate of the American Federation of Labor, reopened in mid-April. Petroleum Refining—Operations within the Illinois-Indiana-Kentucky refining area showed considerable expansion during March. Daily runs of crude oil to stills increased 2 per cent over February and were 8 per cent in excess of the rate prevailing in March last year. Production of gasoline registered a gain of similar proportions; sales rose even more sharply, being 11 per cent greater than a month pre vious and 14 per cent ahead of a year ago. Despite the sea sonal rise in consumption, gasoline stocks showed some further accumulation and exceeded last year’s volume by about 7 per cent. For the year to date, output of gasoline has been about 6 per cent greater and sales 12 per cent heavier than in the same period of 1940. Employment and Payrolls Despite industrial disputes still prevailing in the period covered by the March reports, employment and payrolls in Seventh district industries showed a continued expansion over the previous month. Gains aggregated slightly more than 2 per cent in wage payments and a little less than that in number of workers employed. The difference between the two percentages was partly due to wage increases granted during the month and partly to longer hours. Payrolls inPage 4 POINTS IN TOTAL I NOE* MANUFACTURING SEVENTH PAYROLLS DISTRICT Index of manufacturing payrolls by major divisions, without adjustment for seasonal variation, 1935-1939 average for total == 100. Durable manufactures, non durable manufactures, and unclassified expressed in terms of points in the total index. Data adjusted to Census of Manufactures for Illinois, Indiana, Iowa, Michigan, and Wisconsin through 1937. creased in each of the major industry groups listed in the accompanying table. Gains in the metals and metal products group were the most substantial recorded since last Decem ber. The vehicles industries, still affected by industrial dis putes at the time reports were made, showed only minor changes from the previous month. Contrary to experience in recent months, non-durable or consumers’ goods industries experienced as marked an expansion as did the durable goods. The lag in the former group of industries may be seen from the fact that whereas payrolls in durable goods are now 37 per cent higher than they were a year ago, those in non-durable goods are up only 12 per cent. Leather and rubber products have contributed the greater part of this latter expansion, while food products—the most stable of the industries—registered a gain of 7 per cent. Non-manufacturing industries within the district expanded over the previous month by as large a percentage as did the manufacturing groups. The heaviest percentage gain in wage payments was reported for the coal mines where operations EMPLOYMENT AND PAYROLLS—SEVENTH FEDERAL RESERVE DISTRICT Week of March 15,1941 Industrial Group Per Cent Change from Feb. 15, 1941 Wage No. of Payments No. of Wage No. of (000 Employes Payments Reporting Employes Omitted) Firms Durable Goods: 1,726 378 262 435 2,801 517,511 424,357 22,451 51,503 1,015,822 $17,414 17,054 602 1,252 36,322 +2.3 +0.6 +6.4 +1.7 +1.7 +3.6 +0.5 +8.3 +3-1 +2.2 367 1,027 303 163 33 684 2,577 68,357 105,622 42,376 29,107 23,044 79,515 348,021 1,420 2,850 1,382 684 738 2,460 9,534 +3.4 +2.1 +1.2 +1.4 +2.3 —0.7 +1.6 +2.3 +2.6 +3.0 +2.3 +4.6 +1.3 +2.4 Total Mfg., 10 Groups.............. 5,378 1,363,843 45,856 +1.6 +2.2 Merchandising............................ Public Utilities.......................... Coal Mining................................ Construction............................... 5,282 1,129 51 694 143,300 104,663 8,962 10,051 3,253 3,556 275 337 +1.9 +1.0 —0.6 +3.3 +1.5 +1.1 +4.8 +0.7 Metals and Products1........... Vehicles................................... Stone, Clay, and Glass......... Wood Products....................... Total......................................... Non-Durable Goods: Textiles and Products........... Food and Products............... Chemical Products............... Leather Products.................. Rubber Products................... Paper and Printing................ Total........................................ Total Non-Mfg., 4 Groups....... 7,156 266,976 7,421 +1.5 +1.4 Total, 14 Groups........................ 12,534 1,630,819 [$53,277 +1.6 +2.1 1Other than vehicles. . . Data furnished by State agencies of Illinois, Indiana, Michigan, and Wisconsin. were stepped up pending the outcome of negotiations for a new contract. Employment and payrolls in merchandising industries experienced the usual spring expansion. In the construction industries, employment and payroll figures have not as yet reflected the expansion in building contracts. For all of the non-manufacturing groups, the rise over a year ago in number of wage earners and wage payments amounted to 18 per cent; corresponding gains in manufac turing industries were 18 per cent in men and 30 per cent in wage payments. Trade Trends DEPARTMENT STORE TRADE IN MARCH 1941 March 1941 Compared with March 1940 (Per Cent Change) Locality Stocks End of Month Chicago......................... Peoria............................ Fort Wayne.................. Indianapolis................. Des Moines.................. Sioux City.................... Detroit.......................... Flint.............................. Grand Rapids............. Lansing......................... Milwaukee................... Other Cities................. + 4 + 2 +18 +10 + 6 + 5 +20 +37 +10 +29 +17 +14 + + — + 7th District................. +11 + 3 8 4 2 7 + 3 + 1 — 2 + 5 First Three Months 1941 Compared with First Three Months 1940 (Per Cent Change) Net Sales H- 4 -r 8 - -18 - -12 - 4 - 4 -19 -28 - 8 -19 -13 (-13 +10 pansion during March and the first half of April of 17 per cent over a year earlier. Iowa cities lagged in the expan sion movement. Cumulative sales of the Seventh district for the first quarter of 1941 were 10 per cent heavier than dur ing the same period of 1940. Stocks, however, after having increased about seasonally over February, were only 3 per cent above last year. Miscellaneous Retail Trade—Sales at reporting apparel stores in the district reflected lateness of Easter buying, be ing only 5 per cent greater during March 1941 than the same month of 1940. March 30 stocks of these stores were approximately 5 per cent above the month and the year previous. Retail sales of shoes declined 10 per cent com pared with March 1940. Dealer sales of this merchandise were down 29 per cent, whereas those reported by depart ment stores showed a decrease of only one per cent. The average gain of 7 per cent recorded in the first two months of 1941 was nullified by the fact that Easter came April 13 this year, whereas it fell on March 24 in 1940, so that cumu lative sales in the first quarter this year were no greater than in the corresponding period of 1940. Retail inventories of shoe dealers were 13 per cent smaller on March 31 than a year earlier, but aggregated 11 per cent greater at the close of February. Retail furniture sales in March gained •Includes classifications other than those listed. WHOLESALE TRADE IN MARCH 1941 Department Stores—Easter business at department stores in the Seventh Federal Reserve district was considerably larger in 1941 than during 1940. Sales in March totaled 11 per cent above a year previous, and those during the twoweek period ended April 12 were 24 per cent greater. Gains in the industrial area of Michigan were especially heavy, and there was also a substantial rise in Indiana cities. Sales at Chicago stores, after having been only 4 per cent larger in March than a year earlier, recorded an increase of 18 per cent in the first i2 days of April over the year-ago period. Retail department store trade in Milwaukee showed an ex- Net Sales SALES OF INDEPENDENT RETAIL STORES (As compiled by the Bureau of the Census) Per Cent Change March 1941 from March 1940 Illinois Indiana Iowa Michigan Wisconsin Total All Groups*................................ . + 9 +14 +18 +12 + 9 Apparel Group........................................ — 3 —5 + 3 + 2 + 9 + 7 +10 Drug Stores........................................... . + 5 + 6 + 5 Eating and Drinking Places............. . + 5 +11 +12 + 6 + 4 Food Group........................................... +10 + 7 + 3 + 2 Furniture-Household-Radio Group,. +17 +13 +43 +24 +21 +20 +26 +23 Hardware Stores.................................. . +12 +13 Jewelry Stores..................................... . + 7 +38 +16 +34 + 9 Lumber and Building Materials...... +20 +25 +25 +38 +39 Motor Vehicle Dealers...................... . +29 +33 +43 +42 +29 Commodity Drugs and Drug Sundries.............................. Electrical Goods.............................................. Groceries............................................................ Hardware.......................................................... Jewelry............................................................... Meats and Meat Products.............................. Paper and Its Products.................................. Tobacco and Its Products.............................. Miscellaneous..................................................... Total for District............................................. March 1941 Compared with March 1940 (Per Cent Change) Stocks End Net Sales of Month + S +50 +10 +26 +28 +27 + 4 + 2 +27 +18 + 2 +20 + 9 +11 +17 +51 — 3 + 3 + 7 +11 Data furnished by Bureau of the Census, United States Department of Commerce. 29 per cent over March 1940, the largest increase in the year-to-year comparison since April 1937. Cumulative sales for the first quarter of 1941 totaled 26 per cent over the same period of 1940. Wholesale Trade—Dollar volume of goods sold at whole sale in the Seventh Federal Reserve district, reported to the Bureau of the Census for March 1941, was 18 per cent above that for March 1940. As was the case in February, electrical goods, with an increase of 50 per cent, showed the largest gain. Jewelry, hardware, meat and meat products, and the miscellaneous groups increased around 27 per cent. Stocks continued to accumulate in most wholesale lines and, among the larger groups, paper and its products was the only one to show a decline in the year-to-year comparison. For the district as a whole, the increase over the previous year was 11 per cent. The Agricultural Situation Of major interest to Seventh district farmers during the past month was the April 3 announcement by the Depart ment of Agriculture for an expansion of the Ever Normal Granary Program into a food-producing program designed to insure ample supplies of food for this country and other nations which the United States may wish to aid. The pro gram has several major features. It contemplates stimula tion of the production of pork and dairy products over the next two years at levels remunerative to producers. The com loan program for 1941 and 1942 is to be continued, but there will be no corn marketing quotas for the 1941 crop. Also to be continued is the policy of making corn available to producers for their feeding requirements at the loan rate, plus certain carrying charges. Furthermore, farm produc ers in the commercial areas will be permitted to increase corn acreages to normal, although these producers would not be eligible to receive corn payments. An important feature of the program is the plan of the Government to make purchases in the open market to sup port long-term prices of certain farm commodities. The dominating influence in recent price trends of lard, meats, dairy, and poultry products has been Government purPage 5 MOVEMENT OF GRAIN AT INTERIOR PRIMARY MARKETS IN THE UNITED STATES (In thousands of bushels) March March February March 1931-40 1941 1941 1940 Avg. Wheat: Receipts.............................................. 12,993 8,145 21,984 13,478 Shipments........................................... 9,376 8,148 8,639 9,906 Corn: Receipts.............................................. 18,811 13,945 11,923 13,427 Shipments........................................... 9,269 7,070 6,029 8,011 Oats: Receipts.............................................. 4,661 3,096 4,781 4,946 Shipments........................................... 3,825 3,112 4,450 5,860 chases, regular trade news receiving scant attention. Hog prices showed a particularly sharp advance in early April, the average at Chicago increasing $1 per hundredweight over the first two weeks of the month. Cattle prices, though generally firm, did not advance to the same extent as those of hogs. Prices for cash wheat advanced about 6 cents in March, reflecting a broad increase in speculation, and they maintained their gains rather closely over the first half of April, though showing some fairly wide fluctuations in dayto-day trading. Com prices also showed rather substantial gains in March, but little change in the first half of April. Apparently the depressing effect of unfavorable war news on these products was balanced by expectation of legisla tion to increase farm income. The Government forecast as of April 1 indicated a domes tic winter wheat crop of 616 million bushels, which com pares with the near-average crop of 569 million bushels last year. The excellent earlier prospects for winter wheat apparently have not been fully maintained, and there have been complaints from the Southwest as to crop conditions. Stocks of grain on farms of the nation are generally large. Corn stocks at 1,180 million bushels on April 1 were lower than the record level reached last year, though continuing substantially above average. Wheat and oats stocks at 196 and 470 million bushels, respectively, on April 1, were sub stantially greater than last year. In the Seventh district, PRICES OF FARM PRODUCTS AT CHICAGO DOLLARS PER IDO POUNDS wheat stocks on farms on April 1 were about one third larger than last year, while corn stocks for the five States which include the district were 17 per cent smaller. Domestic carryover of wheat this year was expected to be around 380 million bushels. Production and consumption of dairy products have con tinued particularly heavy for the season. In March milk production was close to 4 per cent higher than last year, and that of manufactured dairy products in the United States as a whole about 7 per cent greater. Estimates of output for major dairy products showed similar increases, that of American cheese in the country being up 8 per cent with creamery butter 7 per cent higher. Storage stocks of butter were only slightly greater than a year ago, and those of LIVESTOCK SLAUGHTER (In thousands) Lambs and Calves Sheep Cattle Yards in Seventh District: March 1941............................ March 1940............................ Hogs 199 169 648 691 245 213 75 74 Federally Inspected Slaughter, United States: March 1941............................ February 1941...................... March 1940............................ 766 717 721 3,904 3,725 3,981 1,408 1,391 1,266 444 384 440 AVERAGE PRICES OF LIVESTOCK (Per hundred pounds at Chicago) Native Beef Steers (average).............. Fat Cows and Heifers........................... Calves....................................................... Hogs (bulk of sales)............................... Lambs....................................................... Week Ended Months of April 19, March February March 1941 1941 1941 1940 $ 9.30 $10.80 $11.35 ........... $10.60 7.70 ........... 9.40 9.00 8.75 10.00 ........... 10.00 9.75 11.00 7.65 7.75 5.10 ........... 8.55 10.10 10.60 ........... 10.85 10.90 cheese were sharply higher at the end of March. There was evidence that heavy production continued into April, as the weekly level of butter output remained high and the weather continued remarkably mild for the country as a whole. In the Seventh district, creamery butter output showed an increase of 9 per cent during March. Sales of butter by reporting creameries were up as much as 14 per cent. As of the first of April, milk production per cow in herds kept by crop correspondents was unusually heavy and well over last year’s showing in all States of the district. Notwithstanding the fact that receipts and movement of all livestock were greater in March than in the preceding month, hog marketings were under a year ago. Reshipments of cattle and calves to feed-lots showed a somewhat smaller than seasonal expansion during March, but there was an exceptionally large gain in the movement of feeder lambs during the month. Meat Packing—Meat-packing production during March By weeks, 1937 through April 19, 1941. Page 6 rose less than seasonally over February, but was 3 per cent greater than a year earlier. Tonnage sold also showed a smaller than seasonal rise; it was, however, contraseasonally 11 per cent greater than current production so that there was a 2 per cent decrease in inventories from a month earlier. Due to expanding volume of sales tonnage and to substantially better prices than a year ago, dollar sales exceeded those for the corresponding period of 1940 by 26 per cent. Payrolls in this industry increased about 4y2 per cent over February and a year ago. Export shipments expanded in March over February, but trade with the United Kingdom and Continental Europe remained negligible. The Surplus Commodity Corporation, however, purchased a sub stantial tonnage of lard and other pork products that eventually may be shipped to the United Kingdom. Cuban and Puerto Rican demand was considerably heavier during March than in February; animal products exported to other parts of Latin America declined in volume. MEAT PACKING—UNITED STATES Per Cent Change in March 1941 from March February March 1931-40 1941 Avg. 1940 Tonnage produced.................................... ..................... +5.4 + 3.0 +18.9 Tonnage sold............................................. ..................... +13.0 + 6.0 +17.6 Dollar sales................................................ ..................... +7.3 +25.6 +42.7 -1-38.7 Inventories, end of month...................... ..................... —2.1 +16.7 Credit and Finance Security Markets—Two factors have been dominating the bond market: the international situation and Treasury financing. The former has been a depressing influence, while the deferring of market issues in favor of the proposed new Defense Savings Bond campaign has given strength to the Government issues. The more speculative section of the corporate bond market, particularly the low-grade rails which have been enjoying a sharp rise, has lost ground recently. These fluctuations in the Baa railroad bonds very probably reflect speculative short-term sentiment. Highgrade rail bonds have declined fractionally, while the medium grades have remained firm or have fluctuated within narrow limits. Public utility bonds of all grades have eased off, with the more speculative issues under pressure. Treasury bonds, which have remained firm despite the inevitable large-scale financing that will result from the defense program, rose sharply during the week of April 19, when the Treasury announced its program for raising revenue. The plan to finance a substantial portion of the Government’s outlays through taxation during the next fiscal year was well received in investment circles. The new Treasury 2% per cent taxable bonds issued March 19 have been bid up to a new peak, gaining more than three points. The $300,000,000 offering of Reconstruction Finance Corporation % per cent notes of Series U, due October 1942, and an offering of equal amount of Series V 1% per cent notes, due July 15, 1943, were well received. Both issues have since commanded a slight premium. Weekly Reporting Member Banks—Demand deposits of weekly reporting member banks in Chicago increased $374,000,000 in the two-week period ended April 16, as MILLIONS OF DOLLARS MILLIONS OF DOLLARS funds returned to the city following the usual flight to avoid the April 1 State property tax filing date. Demand deposits adjusted to exclude interbank and U. S. Govern ment deposits and checks in process of collection totaled $2,034,000,000 April 16. This gain almost wiped out the loss of $387,000,000 in Chicago demand deposits during the three weeks ended April 2. Treasury bill holdings of these banks declined $186,000,000 during the same period of time. Commercial, industrial, and agricultural loans increased $26,000,000 from March 19 through April 16. Continuing the uninterrupted advance which began Sep tember 25, commercial, industrial, and agricultural loans of banks in 101 leading cities of the United States increased for the twenty-ninth consecutive week, reaching the total of $5,530,000,000, April 16, 1941, which represented a gain of $1,153,000,000, or 26 per cent. Reserves of member banks in the nation increased $238, 000,000 from March 19 to April 16. A drop of $379,000,000 in Treasury deposits with the Federal Reserve banks was the principal factor in the recent gain, while an increase of $163,000,000 in money in circulation was the principal offsetting factor. Current Events Bankers Meet to Discuss Defense Bonds Representatives of banks in the principal cities of the Seventh Federal Reserve district met with officials of the Federal Reserve Bank of Chicago, April 15, to discuss steps to be taken in the issuance of the Defense Savings Bonds which will go on sale May 1. They were informed of Treasury plans to accept an offer of commercial banks to assist without compensation in the placing of these bonds with the public. Officials of banks in Des Moines, Detroit, Indianapolis, and Milwaukee, as well as in Chicago, attended the meeting. Young Addresses Banking Conference Clifford S. Young, President of the Federal Reserve Bank of Chicago, was a faculty member of the third annual Indiana Banking Conference held on the campus of Indiana University from April 2 through April 4. He spoke on the subject of “Banks and Defense Financing.” WEEKLY REPORTING HEK8ER BANKS Wisconsin Defense Council Launched W. Homer Hartz, District Coordinator, and T. S. McEwan, District Manager, of the Defense Contract Service for the Seventh Federal Reserve district, attended a meeting of Wisconsin manufacturers at Milwaukee, April 10, to present information regarding the operation of this agency in con nection with procurement planning. The meeting was for the purpose of launching the Wis consin Council of National Defense. Black Elected Assistant Vice President 1941 Weekly figures for reporting member banks in leading cities of the Seventh district, January 5, 1938 to April 16, 1941. The election of Allan M. Black as an Assistant Vice President of the Federal Reserve Bank of Chicago, effective April 1, was announced by the Board of Directors, follow ing their meeting held March 27. Mr. Black has been with the Bank since 1918 when he Page 7 was employed as an accountant in the Bond Department. Later he served in the Auditing and Planning Departments. His first official position was that of Manager of Planning to which he was elected in 1934. He is a member of the board of trustees of the Retirement System of the Federal Reserve banks. Statistical Adviser Talks on Subcontracting “Relation of Small Business to the Defense Program” was the subject of a talk given before the Waukegan Chamber of Commerce, April 17, by John L. Sweet, Statistical Adviser to the Federal Reserve Bank of Chicago. Mr. Sweet laid particular stress upon the importance of subcontracting to speed up production for national defense. Selected Seventh District Banking Data FEDERAL RESERVE BANE OF CHICAGO, SELECTED ITEMS OF CONDITION (Amounts in millions) Change from April 16, March 19, April 17, 1940 1941 1941 $+6 8—19 $251 Total bills and securities...................................................... U. S. Government securities direct and guaranteed: —1 —29 94 +7 +10 157 Bonds.................................................................................... —19 251 +6 Total Government securities........................................ +453 3,021 +89 Total reserves......................................................................... +156 +149 1,739 Member bank reserve deposits........................................... —88 +49 179 All other deposits................................................................... +246 +29 1,330 Federal Reserve notes in circulation.................................. Ratio of total reserves to deposit and O’ +2’ 93.0% Federal Reserve note liability combined..................... ♦Number of points. New Member Banks Six banks, including three mutual savings banks, were added to the member bank list in the Seventh Federal Re serve district during the first half of April. The new members are: Fowler State Bank, Fowler, Indiana. The Garrett State Bank, Garrett, Indiana. LaFayette Savings Bank, LaFayette, Indiana. Beloit Savings Bank, Beloit, Wisconsin. The Commonwealth Mutual Savings Bank, Milwaukee, Wisconsin. Teutonia Avenue State Bank, Milwaukee, Wisconsin. Manufacturing Industries: Durable Goods: Employment................................................. Payrolls.......................................................... Non-Durable Goods: Employment................................................. Payrolls.......................................................... Total: Employment................................................. Payrolls.......................................................... Pig Iron Production: * Illinois and Indiana......................................... Automobile Production—(U. S.): Passenger Cars................................................. Trucks................................................................ Casting Foundries Shipments: Steel—In Dollars............................................. In Tons.................................................. Malleable—In Dollars.................................... In Tons......................................... Stoves and Furnaces: Shipments.......................................................... Furniture Manufacturing: Orders in Dollars............................................. Shipments in Dollars...................................... Paper Manufacturing:’ Tonnage Production........................................ Petroleum Refining—(Indiana, Illinois, Kentucky Area):* Crude Runs to Stills....................................... Gasoline Production........................................ Bituminous Coal Production:* Illinois, Indiana, Iowa, and Michigan......... Building Contracts Awarded: Residential........................................................ Total................................................................... Meat Packing—(IT. S.): Production........................................................ Sales Tonnage................................................... Sales in Dollars................................................ Department Store Net Sales:* Chicago.............................................................. Detroit............................................................... Indianapolis...................................................... Milwaukee......................................................... Other Cities...................................................... Seventh District—Unadjusted..................... Adjusted.......................... ♦Daily average basis. Page 8 Assets .. Loans and investments—total.................................. . Loans—total............................................................... .. Commercial, industrial, and agricultural loans... . Open-market paper..................................................... . Loans to brokers and dealers in securities........ .. Other loans for purchasing or carrying securities. . Real estate loans......................................................... Loans to banks............................................................ .. Other loans................................................................... U. S. Treasury bills................................................... U. S. Treasury notes.................................................. U. S. Treasury bonds............................................................ Obligations fully guaranteed by U. S. Government---Other securities.................................................. .......... Cash reserves, other than items in process of collection. $-45 +56 +39 $3,964 1,212 768 47 49 67 132 Feb. 1941 Jan. 1941 Mar. 1940 Feb. 1940 Jan. 1940 135 163 132 159 131 152 110 119 110 120 +2 +8 +14 —1 0 0 +4 —8 +18 0 —4 +124 0 +38 +52 —35 +170 +24 +98 +180 +48 Demand deposits—adjusted................................................ 3,132 —3 Time deposits......................................................................... +25 Interbank deposits.................................................................. 1 iqi +7 U. S. Government deposits................................................. .. April 1-16, March 1941 1941 $22.85 Turnover velocity of demand deposits (annual rate)... $19.80 +523 +43 +174 —4 April 1940 $20.07 0 149 352 265 —163 —5 +71 300 618 2,109 in 120 103 115 102 113 102 in 97 102 96 103 96 104 124 148 122 145 121 140 105 114 106 115 $+585 +276 +206 +12 Liabilities MONTHLY BUSINESS INDEXES Data refer to Seventh District and are not adjusted for seasonal variation unless other Mar. 1941 wise indicated. 1935-39 average = 100 CONDITION OF REPORTING MEMBER BANKS SEVENTH DISTRICT (Amounts in millions) Change from April 16, March 19, April 17, 1941 1941 1940 106 116 196 193 187 118 141 165 157 164 151 153 157 151 135 119 129 111 139 117 213 168 176 159 195 160 162 148 196 169 164 150 128 116 114 105 160 156 129 123 172 171 142 132 130 94 75 84 73 64 159 157 160 142 192 107 98 118 97 110 120 115 103 107 106 149 137 147 135 141 134 138 129 139 127 127 122 151 134 136 109 130 150 254 333 178 110 146 130 177 110 104 83 82 61 120 122 120 114 108 112 135 125 117 116 115 95 121 109 93 148 130 101 103 118 124 114 109 109 116 92 101 97 89 93 94 112 88 91 98 90 84 89 113 97 100 113 98 101 99 100 85 83 83 78 84 84 100 84 77 84 79 79 81 103 Chicago............................ .... .... .... Fort Wayne................... .... Grand Rapids............... .... Indianapolis................... .... .... Total 41 cities............... .... March 1941 83,999 121 1,360 37 68 253 342 70 56 621 6,927 Per Cent First Three Change from Per Cent Change from Months of Same Period 1940 March 1940 1941 +12 810,314 1-20 311 -16 +8 +27 3,746 -36 +15 108 -22 +11 -19 +17 739 -21 +14 942 -18 +16 197 -18 156 -39 +16 1,744 -19 +15 18,450 1-22 131 91 121 BANK DEBITS, SEVENTH DISTRICT (Amounts in millions) VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS Items Handled Commercial checks............................................................ Non-cash collections (Bills, notes, bonds, coupons, etc.) Paper currency received and counted............................ Coins received and counted................................ . •......... Wire and other transfers of funds (Inter- and intra district) ............................................................................ Securities in and out of safekeeping............................... Coupons cut from securities in safekeeping................... Average for Each Banking Day during March 1940 March 1941 486,000 551,000 1,900 2,000 1,165,000 1,209,000 419,000 342,000 514 1,352 1,926 472 960 1,733 128,000,000 2,657,000 5,343,000 67,000 95,000,000 2,356,000 4,596,000 51,000 87,000,000 24,501,000 939,000,000 68,000,000 27,856,000 947,000,000 Dollab Amounts Commercial checks............................................................ Non-cash collections (Bills, notes, bonds, coupons, etc.) Paper currency received and counted............................ Coins received and counted............................... Wire and other transfers of funds (Inter- and mtradistriot)........................................................................... Securities in and out of safekeeping............. ............ • ■ Value of securities held in safekeeping at end of month INDUSTRIAL PRODUCTION National Summary of Business Conditions (By the Board of Governors of the Federal Reserve System) INDUSTRIAL aotiv'ty increased furtherto temporary reductions in output of bitu first half of April owing in March but declined somewhat in the minous coal and automobiles. Wholesale prices of many commodities advanced considerably and the Government took steps to limit price advances of some addi tional industrial materials. Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average — 100. By months, January 1935 to March 1941. DEPARTMENT STORE SALES AND STOCKS SALES STOCKS 1935 1936 1937 1938 1939 1940 1941 Federal Reserve indexes of value of sales and stocks, adjusted for seasonal variation, 1923-25 average = 100. By months, January 1935 to March 1941. WHOLESALE PRICES Production—Volume of industrial output continued to increase in March and the Board’s seasonally adjusted index rose from 141 to 143 per cent of the 1935-39 average. Activity increased further in most durable goods industries, particularly in those producing machinery, aircraft, ships, and armament. Steel production increased to about 100 per cent of rated capacity. Automobile production, which usually increases considerably in March, showed little change from the high rate reached in February. In the first half of April output was reduced considerably, owing to a shutdown at plants of the Ford Motor Company during an industrial dispute which was settled about the middle of the month. Retail sales of new and used cars advanced to new peak levels in March, and dealers’ stocks at the beginning of April amounted to about a month’s supply at the current rate of sales. Output of lumber, which had been sustained at unusu ally high levels during the winter months, rose less than seasonally. Activity in the textile and shoe industries increased further in March. Cotton consumption rose to a record level of 854,000 bales and there was also an increase in rayon deliveries. At wool textile mills activity was sustained at the peak rate reached in February, not showing the usual large seasonal decline, and in the chemical and rubber industries further advances were reported. Bituminous coal production rose considerably, while output of crude petroleum was maintained in March at about the rate that had prevailed in the four pre ceding months. In the first half of April coal production declined sharply, however, as most mines were closed, pending conclusion of contract negotiations between mine operators and the miners’ union. 1’roduction of nonferrous metals continued in large volume in March, and deliveries of refined copper showed a sharp rise as domestic production was supplemented by supplies received from South America. Construction contract awards rose sharply in March and were larger than in any month since the middle of 1930, according to the F. W. Dodge Corporation data. The rise was chiefly in awards for publicly-financed work, which had been reduced considerably in January and February, and in private nonresidential projects, par ticularly factory construction. Awards for private residential building, which had been unusually large during the winter months, showed less than the customary seasonal rise in March. Distribution—In March distribution of commodities to consumers was sustained at the high level reached in February. Sales at mail-order houses and department stores increased seasonally and variety store sales showed more than the usual seasonal rise. Freight-car loadings increased by about the usual seasonal amount. Loadings of coal and grain rose considerably, while shipments of miscellaneous freight, which in previous months had risen steadily, on a seasonally adjusted basis, showed a smaller increase than is usual at this time of year. Bureau of Labor Statistics’ indexes, 1926 — 100. “Other” includes commodities other than farm products and foods. By weeks, January 5, 1935 to week ending April 12, 1941. MEMBER BANKS IN 101 LEADING CITIES U. S. GOVT OBLIGATIONS < DIRECT AND 8UARANTEE0) Bank Credit—Total loans and investments at reporting member banks in 101 cities increased during March and the first two weeks of April. Commercial loans con tinued to rise substantially, and holdings of United States Government securities increased further, reflecting purchases of new Treasury offerings. COMMERCIAL LOANS OTHER SECURITIES LOANS TO BROKE AND DEALERS 1935 1936 1937 1938 1939 1940 1941 O Wednesday figures, January 2, 1935 to April 9, 1941. Commercial loans, which include industrial and agricultural loans, represent prior to May 19, 1937 so-called “Other loans” as then reported. Commodity Prices—Prices of basic commodities continued to advance sharply from the middle of March to the middle of April. There were substantial increases in prices of domestic foodstuffs and further advances in burlap, cotton, rubber, and lead. Increases were also reported in wholesale prices of a number of manufactured products, and the general index of the Bureau of Labor Statistics rose two points to 83 per cent of the 1926 average. Informal action was taken by the Government to discourage price increases of some additional industrial materials, and maximum price schedules were estab lished for steel, bituminous coal, secondary and scrap aluminum and zinc, and iron and steel scrap. Sharp reductions in prices of some kinds of nonferrous metal scrap resulted. Announcement of an expanded Federal purchase program for hog, dairy, and poultry products was followed by price increases for these and related products. United States Government Security Prices—Prices of United States Govern ment securities declined irregularly from March 15 to April 9 but subsequently rose slightly. The 1960-65 bonds showed a net loss of about % of 1 point on April 15, following a rise of about 3% points in the previous month. The yield on this issue on April 15 was 2.14 per cent, compared with 2.03 per cent at the all-time peak in prices on December 10, and 2.30 per cent at the recent low in prices on February 15. SEVENTH FEDERAL IOWA RESERVE DISTRICT
@FedFRASER