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B usiness C onditions R eserve S even th FEDERAL Volume 8, No. 11 D is t r ic t M O N T H L Y R E V IE W P UB LISH E D BY T H E F E D E R A L R ESER VE B AN K OF CHICAGO November 1, 1925 BUSINESS CONDITIONS IN THE UNITED STATES P R O D U C T IO N in basic industries and factory em ployment increased in September. Distribution of com modities, both at wholesale and at retail, continued in large volume, and the level of prices remained practically unchanged. PRODUCTION— The Federal Reserve Board’s index of production advanced 2 per cent in September, notwith standing the suspension of anthracite mining. The volume of output increased considerably in the iron and steel, bitu minous coal, and textile industries, while the decreases which occurred in some other industries were relatively small. Automobile production was larger than in August, but con tinued to reflect the effects of curtailment incidental to changes in models. Number of employees on factory pay rolls in September was larger than in August in nearly all reporting industries. Building contracts awarded during September did not equal the record level of August, but continued large as compared with earlier months. Total contracts awarded during the first nine months of this year were nearly as large as for the entire year 1924. Crop conditions, as reported by the Department o f Agri culture, showed considerable improvement in September, and the indicated yields of cotton, corn, oats, barley, and hay were larger than a month earlier, while forecasts of wheat PRODUCTION and tobacco production were slightly smaller. Marketing of crops increased further in September, but was smaller than last year. TRADE— Wholesale trade was 9 per cent larger in Sep tember than in August, and sales in all lines except dry goods were larger than a year ago. Sales of department stores and mail order houses showed considerably more than the usual increase in September and were larger than a year ago. Stocks of merchandise at department stores also increased in September more than usual and at the end of the month were 4 per cent greater than a year ago. Wholesale firms in all leading lines except groceries reported smaller stocks on September 30 than a month earlier. Total and merchandise freight car loadings in September were larger than during the same month of any previous year. Coal shipments were smaller than in August, owing to the anthracite strike, and shipments of coal and of grain products were smaller than in September of last year. PRICES— The level of wholesale prices, as measured by the index of the Bureau of Labor Statistics, declined slightly in September. Among groups of commodities, grains, woolen goods, and furniture showed price declines, while prices of coal and building materials advanced. In the IN B A S I C I N D U S T R I E S WHOLESALE PRICES Index of 22 basic commodities corrected for seasonal variation (1919=100). Latest figure, September, 1925: 111. Compiled October 27, 1925 Page 1 first half of October prices of grains, wool, and rubber in creased, while prices of sheep, hogs, sugar, and cotton de clined. BANK CREDIT— At member banks in leading cities the volume of loans, both for commercial purposes and on securities, increased further between September 16 and October 14, and the middle o f October total loans of these banks were nearly $650,000,000 larger than at the end of July. During the same period demand deposits of these banks increased by about $360,000,000 but were below the level of the beginning of the year, while the volume of their borrowings at the reserve banks increased by about $200,000,000 to the highest point of the year. Total volume of reserve bank credit outstanding was larger in October than at any other time during 1925, re flecting increases during the two preceding months both in discounts for member banks and in acceptances bought in open market. This growth has been due primarily to the seasonal increase during the period of about $100,000,000 in currency in circulation and there has also been a con siderable increase in member bank reserve balances, accom panying a growth in their deposits. In October the rates on prime commercial paper were firmer and the renewal rate on call loans averaged higher than in September. FEDER AL RESERVE BANK CREDIT MEMBER BANK CREDIT BILLIONS DF DOLLARS BILLIONS OF DOLLARS ALL OTHE R LOANS (LARGELY T O TAL B IL L S and 5 ECURITIES j Uy/ y\J BILLS m BCOUNTETUV V/ JU S S E C . BILLS VJ V 1922 Weekly figures October 21, 1925: Discounted, 603 States Securities, / W ROUGHT / > - V S _____J 1923 ■1,1.1.1 1,1 1 1 1,11 fey 1924 L . ¥ l CO M M E R C IA L ) r^ JN V E ST M Y 1925 1 -1.1 1-1 1 1 1 1 I J L for 12 Federal Reserve banks. Latest figures, Total Bills and Securities, 1,230 million; Bills million; Bills Bought, 293 million; United 324 million. iNTS^ LO ANS 0N5ECU R T IE S 1922 ■ i i ■ i i t i t i 1923 i- 1 I 1 I 1 t 1 1 t I_ l_ 1924 ' ■ ■ ■ < < ■ ■ ' ■ »- 1925 Weekly figures for member banks in 101 leading cities. Latesl figures, October 14, 1925: All Other Loans, 8,488 million; Invest ments, 5,462 million; Loans on Stocks and Bonds, 5,376 million. BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT H E last quarter of the year has opened with business activity in the Middle West broadening definitely. The movement is largely in response to seasonal develop ments, and is sufficiently moderate to avoid inventory ac cumulation. Furthermore, plentiful funds make possible an expansion without abnormal effect on money rates. O f the separate industries extending operations during September may be noted the gain over August in auto mobile output, the steady increase in iron and steel pro duction, and the larger volume of building contracts award ed. Smaller increases took place in the manufacture of farm machinery, slaughter house products, shoes, and fur niture. Employment statistics confirm this general up ward trend in industry. In agricultural districts also fav orable factors are evident, good crops and their full ma turity before frost giving indication of profitable returns. Both industrial and farming sections contribute to the increased demand for consumers’ goods, as reflected by the larger volume of distribution both at wholesale and retail. Comparisons with last year vary, the majority showing increases over September, 1924, but with important excep tions. Such are the smaller output of dairy products, the slower movement of live stock and corn, oats, and wheat, the reduced flour production and sales, and the lower esti mates for several vegetable and fruit crops. Other de creases from last year are in the orders and shipments of stoves and in shoe production. The volume of coal mined in the district is decidedly below a year ago. Among financial changes during September were the T Page 2 continued increase in savings deposits, the larger volume of canceled checks, and the reduction in the amount of business failures. CREDIT CONDITIONS AND M ON EY RATES Conditions in the Chicago money market during the past month have reflected rather definite expansion in busi ness and industry, and rates have moved moderately up ward. Other sections of the district report a generally heightened demand for credit, with little change, however, in interest rates. Seasonal influences are largely respon sible for the heavier credit requirements, though reports indicate that accommodation is being extended to many lines which do not necessarily need credit at this time of year. Current rates in Chicago are: Commercial paper 4J4 to 4J^ per cent compared with 4 to 4J^ a month ago; collateral loans 4y2 to 5% per cent as against 4y2 per cent in September; and customers’ over-the-counter loans 5 to 5J<2, whereas last month this class of accommodation carried 4J^ per cent. Total bills and securities held by the Federal Reserve Bank of Chicago have been in a distinctly larger volume since the middle of September. The aggregate o f $162f,139,000 shown on October 7 was the highest figure since November 28, 1923, when $162,147,000 was recorded. Since October 7 a downward movement has been operative, $148,312,000 being reported on October 21. Total bills dis counted rose steadily in amount each week from September 16 until October 14, when a decline of approximately nine million from the preceding week took place, followed by a gain of $1,300,000 on October 21. Federal Reserve notes in actual circulation, contrary to the declining trend of nearly two years’ duration, have shown weekly increases since the middle of last month, amounting to $147,323,000 ^on October 21, compared with $145,182,000 September 23. Loans and discounts of reporting member banks in the Seventh district have been on an expanding scale since early September, and the $2,107,013,000 on October 7 es tablished a new high point since 1921, when this bank began receiving member bank statistics on loans and dis counts. A recession of about 9 million took place on October 14. All classes of loans have shared in the up ward movement, those on stocks and bonds in Chicago, comprising the largest element in the week-to-week fluctu ations, though accommodation for commercial purposes in Detroit as well as in Chicago has increased steadily in re cent weeks. Investments of reporting members have ex hibited rather extensive weekly changes, with no established trend; the figure of $742,803,000 on October 14 compared with $753,789,000 on September 9, the corresponding report ing date in that month. Net demand deposits during the month were without any definite movement; on October 14 they aggregated $1,808,739,000, about 18 million in excess of the total on September 9. Time deposits, on the other hand, have expanded, the $992,950,000 on October 14 ex ceeding by $1,275,000 the previous high point on June 17 when $991,675,000 was reported. POSITION REPORTING MEMBER BANKS— 7TH DISTRICT the period aggregated 41.8 per cent more1than on Septem ber 16, five weeks previous. This apparent disproportion between decreased purchases and heavier sales and hold ings arises from large inter-office transactions not treated as book sales or purchases. Rates on prime bills of the longer maturities were slightly higher during the latest period, reaching 4 per cent bid for 180-day bills, compared with 324@374 per cent! on September 16. Ninety-day bills were unchanged at 3§^ per cent bid. The supply of bills, as well as demand for them, was light, and movement of bills at offered rates was fair. Ninety-day bills were in best demand. Commodities involved were packing house prod ucts, cotton, canned goods, and grain. The aggregate volume of acceptances executed by re porting accepting banks in this district was less by 15.5 per cent in September than in the month previous, although gains were shown by a few larger institutions as a result of an increased volume of grain and cotton bills, particu larly the former. Purchases advanced 19.2 per cent, and sales were 25.7 per cent larger than in August. Acceptors held bills 34.4 per cent less in the aggregate than in the prior month, but bills of their own origination increased 4.3 per cent in amount. The liability of the banks for out standing acceptances declined 10.8 per cent between Au gust 31 and September 30.. During September the Federal Reserve bank purchased $20,173,328 of bankers’ accep tances, compared with $20,679,033 in August, and on Sep tember 30 held $35,373,738; a month previous holdings ag gregated $26,709,473. Agricultural Financing— Loans outstanding of twentytwo Joint Stock Land banks in the five states including the Seventh district on September 30 aggregated $184,740,535, approximately one million under the corresponding figure at the end of August. Four Federal Land banks with out standing loans in the same territory on September 30 of $157,658,342, exceeded the August 31 aggregate by about $1,200,000, while four Federal Intermediate Credit banks increased their total loans and discounts to $1,898,025, com pared with $1,619,248. ♦Break in curve indicates data not comparable with preceding. Based on weekly reports to this bank by approximately 49 mem ber banks in Chicago, 13 in Detroit, and 44 in other selected cities. Latest figures, October 14, 1925, in thousands of dollars: Loans and Discounts, 2,098,125; Demand Deposits, 1,808,789; Time De posits, 992,950; and Investments, 742,803. Seventh district commercial paper brokers sold 17.5 per cent more paper during September than in August, al though their outstandings at the month-end were 0.6 per cent less than on August 31. Some hardening in rates was evidenced by the movement of the customary selling quotation from 4@4*4 per cent in August to 4J£@4J^ per cent in September. Demand for paper in September was fair to good, the larger city banks, however, tending to remain out of the market. The supply of prime paper has been good. Paper outstanding throughout the coun try by twenty-six dealers aggregated $708,374,009 on Sep tember 30, as compared with $721,816,812 on August 31. Returns from five reporting brokers operating in the open bill market in this district show an average weekly reduction of 21.1 per cent in volume of bills purchased dur ing the five-week period ended October 21, as compared with the preceding four-week period. Their sales, however, were 30.4 per cent larger for this comparison, increases be ing shown in the purchases of all classes of customers ex cept the Federal Reserve bank. Bills held at the close of Volume of Payment by Check—Thirty-six clearing house centers in this district reported volume of payment by check in September as $5,355,319,000, representing an in crease of 3.4 per cent over August, and an aggregate 15.3 per cent greater than in September a year ago. The total of the four larger cities in the district, Chicago, Detroit, Milwaukee, and Indianapolis, showed an increase of 4.2 above August and 16.6 per cent above September, 1924. In thirty-two smaller centers, September volume of check payment fell short of August by 0.3 per cent, but gained over the corresponding month a year ago by 8.8 per cent. Savings— Aggregate savings deposits of 194 banks re ported as of October 1, were 0.2 per cent heavier than at the beginning of September. Individually, 104 banks regis tered gains compared with September 1, and 90 declines; while by states Illinois and Iowa averaged the only de creases from the preceding month— 0.2 per cent—and In diana and Michigan set new records. In comparison with a year ago, the district gain of 4.4 per cent reflects in creases in each of the five states and individual gains at 137 banks. With nearly two-thirds of the banks reporting more ac counts than on September 1, the total number for the dis trict reached a new level, 0.3 per cent higher than the peak the month before, and 3.6 per cent above last year. The average size of account was reduced 0.1 per cent from September 1, though 0.8 per cent in excess of a year ago; in both comparisons, Illinois and Iowa showed declines, and in the former Indiana as well. Page 3 AGRICULTURAL PRODUCTION AND FOODSTUFFS Fall crops reached full maturity before the arrival of killing frosts this autumn and harvesting is now in prog ress under fairly favorable weather conditions. Estimates of production continue to reflect some damage from drought in August but show little change from the calculations as of September 1. The quantity and quality of corn is better than a year ago but the yield of potatoes shows a decline. Orchards in Michigan, Illinois, and Iowa are estimated as bearing 19,961,000 bushels of apples compared with 16.533.000 bushels last autumn; of this yield, 3,105,000 bushels is designated as the probable size of the so-called commercial crop— that portion of the total which is avail able for market purposes— compared with only 2,297,000 a year ago. Michigan, Illinois, and Indiana have grown ap proximately 1,115,000 bushels of pears compared with 1.400.000 bushels for 1924. Truck gardeners in Indiana, Michigan, Wisconsin, and Illinois are gathering about 2.479.000 bushels of commercial onions, a decline of 438,000 bushels from last year. An increase in winter wheat acre age is expected in the Seventh district this fall. CROP PRODUCTION Estimated by the Bureau of Agricultural Economics as of October 1. (In thousands of bushels.) S e v e n t h D i s t r ic t F orecast F in a l 1925 1924 Corn ____ ______1,070,331 721,019 Oats ................... 566,695 608,284 Wheat ______ ___ 63779 67,980 Potatoes _______ 55,478 81,801 Barley ............... 37,811* 31,570* Hay** .................... 15,832 22,352 Tobacco*** ____ 46,256 39,248 U n it e d S t ates F orecast F in a l 5 -Y r . A v . 1925 1924 2,917,836 2,436,513 1,470,384 1,541,900 697,272 872,673 344,227 454,784 226,786 187,875 98,135 112,450 1,228,972 1,240,513 1920-24 2,934,649 1,327,642 837,116 417,848 182,382 107,207 1,330,876 *Five states including Seventh Federal Reserve District. **In thousands o f tons. ***In thousands of pounds. Flour— Because of a declining wheat market, buyers of flour were conservative in their purchases during September and sales by mills in this district were much smaller than in August and the corresponding month of 1924. Produc tion increased slightly in these comparisons, while the average rate of operations for thirty-four firms rose from 68.1 in August to 72.1 in September. At Chicago, re ceipts and shipments of flour increased in the month-tomonth comparison, but were smaller than in Septem ber, 1924. CHANGES IN SEPTEMBER, 1925, FROM PREVIOUS MONTHS P er cen t CHANGE FROM Septem ber A u gu st Production (bbls.)...... .... Stocks of flour at end of month (bbls.) ............... Stocks of wheat at end of month (bu.) ____ __ .... Sales (volume) .......... .... Sales (value) .............. .... C o m p a n ie s in c l u d e d A u gu st S e pt e m b e r 1925 + 17 1924 — 12.8 1925 34 1924 34 —’10.8 — 12.0 30 29 +11.8 — 10.6 — 10.5 — 12.6 — 19.3 — 1.9 30 15 15 30 15 15 Production includes wheat and other flours. to wheat flour only. Balance of item s r e fe r Grain Marketing— Interior primary markets in the United States received a greater quantity of wheat but lesser amounts of oats and corn during September than in August. Arrivals aggregated less than a year ago, al though receipts of wheat and oats were greater than in September, 1923. The last named commodities moved out of terminals more rapidly than in August but reshipments of corn were a trifle slower. Visible supplies in the United States of all grains, excepting corn, have gained during the past month. Stocks of wheat, rye, and corn at the principal markets are below a year ago but oats and barley show a gain in holdings over last autumn. Slightly smaller quantities of wheat and oats than in August but laiger amounts of corn and rye for future delivery were placed under contract during September by members of the Chicago Board of Trade. Preliminary figures issued by the United States Department of Commerce show that September grain exports increased over the preceding month. Although there were periods of slight strength, http://fraser.stlouisfed.org/ Page 4 Federal Reserve Bank of St. Louis the trend of grain prices, generally, was distinctly down ward from August levels. Quotations tended to firm some what early in October. Movement of Live Stock— Range cattle in large numbers continued to arrive at slaughtering establishments during September and early October but the supply of well fin ished corn fed steers diminished. Liquidation of hogs has been on a somewhat larger scale since August and the mar keting of range lambs has been seasonally heavy. Re ceipts, however, show a decided reduction from last year. LIVE STOCK SLAUGHTER C a tt l e Yards in Seventh District, September, 1925 ................. ..2387 77 Public Stock Yards in U. S. September, 1925 ................... ..828,645 August, 1925 ..........................831,346 September, 1924 ................ ...876,548 H ogs L a m b s a nd S heep C alves 572,118 327,517 92,880 1,645,136 1,586,277 1,959,044 980,814 977,824 1,097,165 397,821 449,601 435,161 The demand for feeder cattle, calves, and lambs increased in September although reshipments to feed lots were less than for the corresponding period in 1924. AVERAGE PRICES OF LIVE STOCK Per Hundred Pounds at Chicago. W e e k ended M o n t h s of O c t . 17, S e p t e m b e r A u g u st S e pt e m b e r 1925 Native Beef Steers (average)....... $11.35 Fat Cows and Heifers..................... 5.50 Hogs (bulk of sales).... ................... 11.20 Yearling Sheep ............. ......... ......... 10.85 Lambs (average) ......... ................... 15.20 1925 $11.70 5.90 12.40 11.50 15.10 1925 $12.10 6.20 13.15 11.25 14.80 1924 $ 9.70 5.40 9.50 9.40 13.30 Meat Packing—-Slaughtering establishments in the United States produced a slightly greater quantity of meat during September than in August, an increase in the volume from the pork and mutton departments more than offsetting a decline in the beef section. Figures for the last payroll in September show a gain of 0.2 per cent in number, 0.7 per cent in hours worked, and 1.2 per cent in value over the previous month. Domestic demand for nearly all the edible products has tended to improve with cooler weather. Sales billed in dollar amounts to custom ers totaled 4.6 per cent above August and 14.1 per cent over September last year, according to statistics based on the figures reported direct to this bank by sixty-two meat packing companies in the United States. Beef, pork, lamb, and lard inventories in the United States declined during September and continued under a year ago and the 1920-24 average for this season. Average prices for picnics, clear bellies, pork loins, dry salt fat backs, steer loins, and the commoner grades of beef and lamb advanced; smoked meats and most cuts of beef and lamb held moderately firm; lard, dry salt bellies, fresh and sweet pickled hams declined slightly in September compared with August. Quotations for pork, lamb, and veal have trended toward somewhat lower levels in October. Foreign demand and prices for meats tended to improve during the past thirty days with only a fair supply of ex port cuts available from our current stocks and slaughter. Continental importers purchased moderately large quanti ties of lard at satisfactory prices, from stocks already landed. Quotations for lard in France and England, however, are still somewhat under United States parity because of rather limited trading in those countries. American pack ers forwarded approximately the same quantity of meat and fat to European markets during September as in the preceding month. Preliminary figures show that clear ances from United States ports increased slightly in Sep tember, the volume of lard and bacon being greater and that for hams and shoulders less than in August. Con signed stocks in European markets seem to have been re duced slightly from a month ago. Dairy Products and Poultry— The volume of butter manufactured by sixty creameries in the Seventh district totaled 24.9 per cent less for September than for August and declined 11.8 per cent from a year ago. September figures of the American Association of Creamery Butter Manufacturers indicate that production in the United States has been receding to seasonal levels with the make at the present time slightly under that for the corresponding period in 1924. The quantity of creamery butter billed to customers by sixty producers in the Seventh district showed a contraction of 16.6 per cent in September sales from those in August and of 4.3 per cent from a year ago. Receipts of cheese at Wisconsin markets indicate that pro duction in the state for the four weeks ended October 3, 1925, declined 14.7 per cent from the prior period and was 1.3 per cent smaller than in 1924; sales output, however, showed increases of 3.4 per cent over August and 2.9 per cent above last year. Cold storage warehouses and packing c Contrary to the usual trend of the season, production of coal in this district was somewhat lighter in September than in August; output of Illinois mines was estimated as 5,555,000 tons for the month, a decrease of 2.1 per cent from the preceding month and of 22.7 per cent from Sep tember, 1924— last year a gain of 35.4 per cent was shewn in the month-to-month comparison. The decline this year may be attributed mainly to the unduly stimulated demand during August in anticipation of the approaching strike in the anthracite fields and the possibility of a suspension also plants in the United States inventoried greater quantities of cheese but smaller amounts of butter, eggs, and poultry on October 1, 1925, than at the beginning of the preced ing month. Egg, poultry, and cheese stocks exceeded those for October 1, 1924; holdings of butter declined. Net receipts of butter, cheese, and eggs at Chicago failed to equal those in August but September arrivals of dressed poultry were heavier. Quotations for dairy products have shown a seasonal advance this autumn; poultry prices strengthened some what early in September, followed by a decline. Early October quotations for butter, cheese, eggs, live ducks, and geese were higher than those prevailing in September; prices of butter, fowls, and chickens trended slightly down ward after October 1. L in the bituminous districts, so that after the first of Sep tember sufficient supplies were on hand for all current needs. Since October 1 and the advent of cool weather, however, demand for domestic sizes of coal has again in creased and prices in some sections have been advanced. Smokeless coals are moving well and prices are up. The screenings situation shows little change; although indus trial concerns are buying more freely, they appear to con trol conditions and prices are firm or decline slightly ac cording to the making or withholding of purchases by these firms. INDUSTRIAL EMPLOYMENT CONDITIONS Reports from representative industrial plants of the dis trict indicate an expansion in manufacturing activity, the volume of employment at plants with an aggregate of about 380,000 men registering an increase of 1.6 per cent for the period August 15 to September 15. While the increases for firms located within the state of Illinois alone aver aged a slightly higher gain, the trend was fairly uniform throughout the district as well as for a majority of the industries represented. Metals and metal products, which group comprises over a third of the total volume of em ployment reported for all the industrial groups, added 1.3 per cent to its forces during the month. Food products, chemicals, leather and leather products showed marked expansion. The work at stone quarries, brick yards, and cement plants, on the other hand, declined slightly, and paper mills and rubber products made definite curtailments in their employment. Because the work at the industrial plants is generally on an hourly basis, payroll figures were greatly affected by the inclusion of Labor Day in the period for which many of the returns were made. Consequently, only one of the industrial groups records a gain in the earnings for this period, the seasonal expansion in certain food prod ucts more than offsetting the shorter number of working hours. For firms whose reports did not include this holi day the change in payrolls corresponded closely to that shown by the volume of employment. Reports issued by the Employers’ Association of De troit show that employment in that city the second week in October was 7 per cent larger than for the same week in September. The effect of the general though moderate expansion in manufacturing activity, coupled with weather conditions favorable for outdoor work, was apparent at the free employment offices of Illinois where the number of applicants for each 100 places available de creased from 139 to 120 during September. EMPLOYMENT AND EARNINGS— SEVENTH FEDERAL RESERVE DISTRICT N u m b e r of w a ge earners WEEK ENDED I n d u s t r ia l G rout S e p t e m b e r 15 All groups ( 1 0 ) ............................................................................... Metals and metal products (other than vehicles)................. Vehicles ....................................................................... - ................. Textiles and textile products........................................ ............. Food and related products.................................... - .................... Stone, clay, and glass products................................................... Lumber and its products................................................... .......... Chemical products........................................................................... Leather products....... ..................................................................... Rubber products........................ — ................. - ........................... Paper and printing......................................................................... 378,955 144,884 42,932 29,062 52,695 13,424 34,509 10,667 17,412 3,260 30,110 A u g u st 15 372,825 143,026 42,330 28,809 49,820 13,472 34,419 10,435 16,747 3,553 30,214 T o t a l E a r n in g s WEEK ENDED P er C e n t C hange + 1.6 + 1.3 + 1.4 + 0.9 + 5.8 — 0.4 + 0 .3 + 2 .2 + 4.0 — 8.2 — 0.3 S e p t e m b e r 15 $9,461,219 3,378,992 1,243,650 636,511 1,358,996 384,058 846,293 271,756 367,945 82,772 890,246 A u g u st 15 $9,701,064 3,479,602 1,248,270 722,575 1,337,895 396,465 850,417 272,519 390,011 93,730 909,580 P er C e n t C hange — 2.5 — 2.9 — 0.4 — 11.9 + 1.6 — 3.1 — 0.5 — 0.3 — 5.7 — 11.7 — 2.1 MANUFACTURING ACTIVITIES AND OUTPUT Automobile Production and Distribution—Gains over both the preceding month and a year ago were recorded in auto mobile production statistics for the month of September. Total output of passenger cars by identical manufacturers in the United States was 262,000, an increase of 22.3 per cent over August— a month of unusually low production— and of 2.0 per cent over September, 1924. Canadian produc tion by these American firms also exceeded figures for the prior month and a year ago. Output of 56,794 trucks in September by firms manufacturing 35,261 cars in August, represented a gain of 61.1 per cent in the month-to-month and of 90.1 per cent in the yearly comparison, establishing a record. Page 5 That manufacturers are beginning to stock up their deal ers with new cars is evidenced in data furnished by firms producing 52.7 per cent of total September output. Ship ments by these concerns to their dealers increased 60.8 per cent over August, while sales by these dealers to users de clined 28.5 per cent; the ratio of retail sales to receipts from manufacturers receded from 196.3 in August to 87.3 for September. In the comparisons with a year ago, shipments to dealers decreased 24.7 per cent and sales to consumers fell off 31.6 per cent. Reports received by this bank from sixty-five dealers and distributors in the Middle W est indicate that distribution at both wholesale and retail was less during September than in the prior month, while the sales data show gains in both over a year ago. Of the retail sales by forty firms report ing the item, 48.7 per cent were made on the deferred payment plan. The used car situation appears not to be so favorable as in earlier months. MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in September, 1925, from previous months. P er c e n t CHANGE FROM S e pt em be r A u g u st New cars Wholesale— Number sold ..... ....... Value ................. ....... Retail— Number sold ...... ....... Value ..... .......... ....... On hand Sept. 3 0 Number ..................... Value .................. ....... Used cars Number sold ............. Salable on hand— Number ..................... Value .................. ....... C o m p a n ie s INCLUDED A u g u st S e pt e m b e r 1925 1924 1925 1924 — 10.8 — 20.6 + 117.0 + 74.7 40 40 39 39 — 9.2 — 3.4 + 11.8 + 36.0 62 62 61 61 +16.5 +17.9 — 7.6 — 12.0 65 65 64 64 — 11.1 + 13.6 63 62 + 5.7 + 8.5 + + 7.4 0.9 63 63 62 62 I r o n a n d S te e l P r o d u c t s —-F u r t h e r p r o g r e s s t o w a r d b et- tered conditions was made in the iron and steel industry during September and even greater activity has been appar ent since October 1. Both production and orders have been steadily increasing. Buying of rails and track fastenings has been especially prominent, maintenance of building ac tivity has extended later than usual, bar and tin plate book ings have been heavy, and in recent weeks sheets have strengthened. A greater number of mills report that in coming orders are larger than shipments and a reflection of this may be seen in the unfilled orders of the United States Steel Corporation, which on September 30 totaled 3,717,297 tons, an increase of 5.8 per cent over August 31. September steel operations averaged 77.5 per cent for the United States and between 80 and 85 per cent for the Chi cago district. Daily average ingot output in the country in creased 2.0 per cent over the preceding month and was 23.5 per cent above a year ago; the average was about the same as that of September, 1923. A net gain of eight was made in the number of blast furnaces blown in during September. Pig iron production in the United States averaged 90,873 tons daily, or 4.2 per cent more than in August; last year the increase in September over the preceding month was 12.4 per cent. In the Illinois and Indiana district daily average iron output was greater by 3.2 per cent than in August, but the total volume declined slightly in this com parison. Although prices are not yet satisfactory they are firmer on the present basis and recently there has been some slight improvement. Price advances have been announced in sheets, hoops, bands, and strip. Scrap iron continues low in price though the week ended October 20 saw a few in creases. Pig iron prices are stronger. The average price o f fourteen iron and steel products as reported by Iron Trade Review was $37.61 on October 21, compared with $37.40 on September 23, and $38.65 on October 22, 1924. Iron and steel casting foundry operations in this district 6 Digitized Page for FRASER continued to contract during September but remained bet ter than a year ago, the total amount of metal consumed by twenty-eight firms declining 6.6 per cent from August and increasing 1.4 per cent over September, 1924; ship ments likewise were less than in the preceding month and smaller also in the comparison with last year. Reports from fifteen stove and furnace manufacturers indicate a heavier volume of shipments and orders than in August with dimin ishing stocks, but declines were shown in the comparisons of the first two items with a year ago; production was greater than in the preceding month or September last year. Agricultural Machinery and Equipment— Preliminary re ports indicate a decrease in September from August of 28.7 per cent in total sales value of threshers, tractors, and com bined harvesters billed to customers by manufacturers in the United States. Other kinds of farm machinery and equipment (exclusive of pumps and barn supplies) increased 7.9 per cent; pumps and barn equipment declined 2.0 and 5.7 per cent, respectively. More complete reports for July and August show that sales of heavy machinery have been receding slightly since June. September production was equivalent to 70.5 per cent of the estimated normal rate for that month and there has been a small increase in the num ber employed since August. PRODUCTION AND SALES OF FARM EQUIPMENT IN UNITED STATES Changes in September, 1925, from previous months. P er c e n t c h a n g e f r o m A u g u st S eptem ber Domestic sales billed.......... Sales billed for export.... Total sales billed................ Production ......................... Sales based ployment. 1925 — 10.2 — 4.0 — 8.9 + 1.8 on dollar amounts. 1924 + 27.9 +117.4 + 41.2 + 43.2 Production THE C o m p a n ie s in c l u d e d A u g u st S e p t e m b e r 1925 102 ' 102 102 95 computed 1924 99 99 99 93 from em SALES AND PRODUCTION OF A G R IC U L TU R A L M ACHINER Y A N D E Q U I P M E N T IN T H E U N I T E D S T A T E S Monthly Average 1923=100. is based on the number of persons employed by 112 manufactur ers. Latest figures, September, 1925: Sales Billed, 131.5; Pro duction, 110.2. Shoe Manufacturing, Tanning, and Hides— Production of shoes showed a slight gain during September, and a con siderably larger volume was shipped by factories in the Seventh district than in August. Shipments rose 13.9 per cent above current output, while the quantity of unfilled orders assured the companies of nearly six weeks’ business at the September rate. Manufacturers held 69.0 per cent as many shoes for inventory on October 1 as were for warded to their customers during September. CHANGES IN THE SHOE MANUFACTURING INDUSTRY IN SEPTEMBER, 1925, COMPARED WITH PREVIOUS MONTHS P er c e n t c h a n g e fro m A u g u st Septem ber Production ...................... ..... Shipments .......... ................... Inventories ........................... Unfilled orders ..................... 1925 +0.04 + 7.1 + 2 .0 + 7.1 1924 — 3.1 — 1.8 — 1.6 — 9.1 C o m p a n ie s in c l u d e d A u g u st S e p t e m b e r 1925 30 30 25 22 1924 30 30 25 23 Tanneries in the Seventh district operated at a higher rate during September than in the prior month and their sales output also increased. Sales of harness continue to expand, while there has been a slight improvement in the demand for sole and upper leather; shipments of belting were about on a level with those in August. Prices remain firm. S T O C K S A N D S H I P M E N T S O F S H O E S IN T H E S E V E N TH DISTRICT Furniture— Manufacturers of furniture in the Seventh dis trict reported continued activity through September; the majority of companies booked a larger volume of business than in the preceding month, and the total amount of orders received by nineteen firms increased 4.0 per cent over Aug ust. Comparisons with last year and September, 1923, were very favorable, orders booked gaining 17.9 per cent in the first comparison and 28.6 per cent in the latter. Gains in shipments were recorded over the prior month, September a year ago, and the corresponding month of 1923, the in creases being 10.5, 16.6, and 27.0 per cent, respectively. Be cause September forwardings were slightly less than orders booked, the volume of unfilled orders increased 0.3 per cent between August 31 and September 30; orders still on hand exceeded those of the same date in 1924 by 39.2 per cent. Production continues to expand; the average operating rate for September of sixteen firms was 87.9 per cent of capacity compared with 84.9 in August and 76.9 a year ago. Raw Wool and Finished Woolens— The majority of re ports received by this bank indicate that demand for raw wool expanded somewhat during September and that the improvement has continued in greater degree through the early weeks of October. Buying of worsted wools by man ufacturers for rush shipment has been fairly active. Prices, although irregular the first part of September, became more or less stabilized later in the month and now tend to slightly higher levels; this is especially noticeable in the medium grades of wool, where some advances have already been recorded. The strength displayed at the London sales has been partly responsible for the growing feeling of confi dence in the domestic wool market; a considerable amount of buying took place at the openings, with France the heav iest purchaser. BUILDING M ATERIAL AND CONSTRUCTION ACTIVITIES Lumber sales as reported for the month of September by eighty-nine manufacturers and dealers of the district aggre gated $3,640,170, or 0.5 per cent more than for August and 5.4 per cent in advance of the September, 1924, volume. Sixty-four retail concerns reporting for 178 yards showed gains of 3.4 per cent and 4.2 per cent in the same com parisons. Sales in board feet for the forty-one firtns who reported on this item, both manufacturing and dealers, totaled 3.4 per cent over the previous month and 4.0 per cent more than for September a year ago. Stocks have been replenished and remain practically the same as a month earlier. The outstanding accounts increased 3.7 per cent during the month according to the reports of fifty-four retail firms, while thirteen manufacturers and wholesalers showed a decline of 5.7 per cent for this item. A t Chicago, receipts and shipments of lumber decreased slightly, but the net receipts, while 9 per cent below the August volume, were larger than for any other month of the year. Prices showed little variation until the latter part of the month when a slightly downward trend became apparent. Brick yards generally are still being operated at capacity and, although demand shows a definite falling-off from the spring and earlier summer months, the volume of business for September was reported as about normal. Manufac turers and dealers in Iowa, however, state that the month was below expectations and the demand less than that of September, 1924. In the cement industry, production and shipments are slowing up; stocks have been considerably reduced. The decreases in September, as reported for the United States, were 2.9 per cent in production, 3.7 per cent in shipments, and 14.6 per cent in stocks as compared with the previous month; in the yearly comparison, these items show increases of 10, 8, and 21 per cent, respectively. Building Construction— Building contracts awarded in the Seventh district during September aggregated $116,917,424. an increase of 47.9 per cent over the August total, and 114 per cent larger than the volume recorded for September a year ago; residential construction alone registered approxi mately the same percentage increases. O f the states including the district, only Michigan did not share in the heavy expansion shown, while in the state of Iowa residential building showed a decline, more than off set, however, by the unusually large amount of other con struction work for which contracts were awarded. The number of permits as reported for fifty cities of the district increased 6.4 per cent over August and 5.4 per cent in com parison with September, 1924. The estimated cost of these permits was 8.8 per cent below the August figure, but 6.5 per cent larger than that of a year ago. Chicago declined over 33 per cent in its estimated cost for the month, greatly affecting the total figures. MERCHANDISING CONDITIONS Wholesale Trade— Distribution of goods at wholesale in this district during September was seasonally larger than the August volume. For the second time this year all five commodity groups covered by the bank’s survey registered expansion over the preceding month, and of the separate firms only seventeen reported declines. With the excep tion of groceries, however, the group increases were not so pronounced as last year. For nearly half of the firms September sales were smaller than in the corresponding month of 1924, drugs alone aver aging a gain. By the end of the third quarter of 1925 cumulative sales were 5 per cent larger for drugs, and slightly ahead of a year ago for hardware, but 4 per cent lower for dry goods, 5 per cent for groceries, and 13 per cent smaller for shoes. As in 1924, the upward movement in trade increased the accounts outstanding so that, despite heavier collections, all groups reported amounts on their books at the close of Page 7 September in excess of the August 31 balances. Com parisons with a year ago show declines in collections for the grocery and dry goods groups and in accounts receiv able for the shoe group as well. Reporting dry goods houses with one exception, the ma jority of hardware, and about half the shoe and drug deal ers reduced their stocks during the month, so that as in 1924 grocery firms were the one group in which invento ries were generally higher on September 30 than at the beginning of the month. For twenty-six out of fifty-four firms, stocks were heavier than a year ago. Department Store Trade— Department September reflect the usual seasonal marked gain in sales compared with the general additions to stocks, and heavier store reports for developments— a preceding month, collections. O f the total number of firms reporting to this bank for both August and September, sixty-two indicated a larger volume of trade during the second month, while twentyeight showed declines. In comparison with September last year slightly less than half registered gains. Cumulative sales for the first nine months of 1925 for seventy-nine stores are 4.7 per cent ahead of a year ago. With two exceptions reporting stores made net additions to inventories during September, aggregate stocks for sixtythree firms at the end of the month exceeding the August 31 balance by 7.3 per cent. For forty-eight firms invento ries were 0.2 per cent below a year ago, twenty-one show ing declines; in proportion to sales, also, goods on hand this September are lower, the month’s business represent ing 31.8 per cent of average stocks as compared with 28.4 last year. For over sixty per cent of the firms collections during September exceeded the August receipts, the district gain amounting to 5.4 per cent; accounts outstanding by the end of the month had increased 12.9 per cent, with only twelve stores reporting reductions. Forty-seven firms fur nishing both 1924 and 1925 data collected in September this year 40.5 per cent of accounts outstanding at the beginning of the month, or one-half of one per cent below the cor responding ratio last year; for two-thirds o f these stores collections were larger than in 1924, and for a larger pro portion accounts on the books were heavier. Retail Shoe Trade—Twenty-two firms furnishing data on retail shoe sales during September averaged a gain of 11.9 per cent over August. For twelve of these firms collec tions totaled 11.5 per cent larger than receipts in the pre ceding month, although individually the majority showed decreases. Accounts outstanding rose 9.2 per cent during the month, only two out of thirteen firms reporting reduc tions. In stocks the increase of 2.6 per cent reflects gains at ten stores and declines at four. M O N TH LY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the month indicated, using the monthly average for 1919 as a base, unless other wise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following month. Data refer to the Seventh Federal Reserve district unless otherwise noted.) Meat Packing— (U. S .)Sales (in dollars)1________ Casting Foundries— No. of Sept. Firms 1925 Aug. 1925 Sept. 1924 Aug. 1924 ... 64 114.3 109.1 99.9 97.3 ... 28 67.5 73.1 71.9 74.4 ... 16 136.3 90.5 141.3 92.6 ... ... .. ... 117 117 117 112 125.6 172.4 131.5 110.2 136.9 179.6 144.3 108.3 101.1 96.1 100.2 76.6 108.5 115.0 109.6 76.3 ... 19 129.6 132.2 92.2 97.8 ... 21 Shipments (in dollars)........................... ... 21 Shoes4— Production (in pairs)------------------------- ... 35 Shipments (in pairs)________________ ... 35 Electric Energy— 9 Output of Plants (K W H )_____ ____ ... 9 Industrial Sales (K W H ).............. _ .... ... Flour Production— (In bbls.) ...................................... ........ ... 39 Output of Butter by Creameries2— ... 81 Sales ____________________________ ... 81 Freight Carloadings— (U . S .)— Grain and Grain Products---- --------------Live Stock ... .................................. .... Coal _____________________ ______ Coke ___________ __________________ Forest Products __________________ Ore ......... ........................... ................. . . . Merchandise and Miscellaneous........ Total ................................................ Iron and Steel— Pig Iron Production :5 Illinois and Indiana......... ....... ...... United States __________________ _ Steel Ingot Production— (U. S .)5.... Unfilled orders U. S. Steel Corp___ Automobiles— (U. S .)— Production: Passenger C a r s .......... Trucks _____________ Shipments :* Carloads ___________ Driveaways ......... ...... Boat7 ______________ Excise Tax Collections*— New Automobiles ______________ New Automobile Trucks.......... „... Parts and Accessories............... .... Stamp Tax Collections9— Sales or Transfers of Capital Stock. es 151.2 163.1 145.7 147.6 134.8 148.0 108.7 118.6 158.6 180.4 158.5 168.4 160.2 181.1 133.2 162.2 175.3 221.0 171.8 222.7 151.8 171.3 148.3 170.2 110.3 108.4 125.9 120.7 102.3 99.2 136.2 118.9 111.4 104.2 134.9 119.2 137.3 106.2 109.5 129.6 127.2 159.0 152.3 139.3 139.8 91.5 121.0 107.6 125.7 168.5 140.2 134.2 179.9 116.7 115.7 97.8 123.0 132.1 142.0 135.2 157.8 94.6 95.5 78.1 120.5 134.6 128.1 120.7 127.3 108.5 119.1 62.0 123.4 104.1 116.8 58.6 75.8 81.7 96.5 57.9 65.9 72.7 87.1 54.9 194.0 219.7 158.7 136.4 232.3 109.8 433.4 190.2 115.6 156.6 71.7 210.8 184.0 102.5 144.0 72.0 222.2 211.1 23.3 50.7 185.9 22.4 45.8 168.7 20.1 51.8 103.7 27.7 41.3 250.9 62.9 124.6 59.0 137.3 56.5 87.2 45.1 Stoves and Furnaces— Shipments (in dollars)_________ Agricultural Machinery & Equipment— (U. S .)2— Domestic Sales (in dollars)____ Exports (in dollars)............. ........ Total Sales (in dollars).............. Production ____ __________ __ __ Agricultural Pumps— (U . S .)2 Furniture3— No. of Firms Wholesale Trade— Net Sales (in dollars) : Groceries .......... 43 Hardware ................................. - ........... 21 14 Dry Goods .......................... Drugs ........... 14 Shoes _____________ 7 Retail Trade (Dept. Stores)— Net Sales (in dollars) : Chicago ... ..................................... 9 Detroit .... .... _.......................... ............ 4 Des Moines _______ 3 Indianapolis ___________________ 5 Milwaukee ...... S Outside ................................ 39 Seventh District ..... 65 Retail Trade— (U. S .)— Department Stores ___________________ 359 Mail Order Houses----- ----------------4 Chain Stores: Grocery ................... ........ ............. .......... 27 9 6 Shoe ______ ________________________ 5 Five and Ten Cent--- ---------------------5 4 Music .......................... ......... .................. Cigar ..................... ......... .......... ............. 3 U. S. Primary Markets10— Grain Receipts: Oats ....................................................... Com ........... ............................................ Wheat ______________________________ Grain Shipments : Oats -----------------------------------------------Corn ..................................................... .. Wheat ......................... - ......... ............... Building Construction— Contracts Awarded (in dollars) : Residential _____ __ _____________ ___ Permits : Chicago .................................... Number Cost---..Number Indianapolis ______ Cost_________ Number Des Moines . Cost..... _________ Number Detroit ---- ---Cost___ ___ Number Milwaukee _ Cost..... — ............Number Others (45) . Cost— Fifty Cities . ................. Number Cost---- Sept. 1925 Aug. 1925 Sept. 1924 Aug. 1924 78.8 105.3 107.3 110.9 53.8 69.5 96.7 96.2 103.7 46.9 81.6 106.1 115.2 101.9 55.7 74.1 93.2 91.2 93.0 47.2 130.9 204.0 127.2 125.0 141.8 94.4 146.3 119.6 115.7 130.6 160.8 106.4 124.2 106.6 132.3 114.2 136.6 96.2 95.1 113.8 131.6 135.9 118.6 99.1 98.8 113.3 86.1 107.3 122 113 98 89 119 106 93 74 243 170 134 191 202 136 142 241 171 120 195 202 128 142 210 145 124 169 189 110 137 201 152 108 172 180 91 138 149.0 86.9 186.4 258.2 117.9 139.6 291.0 147.8 263.5 150.4 126.3 296.1 104.4 56.9 89.3 100.2 62.2 85.3 87.9 78.3 184.6 51.8 75.7 171.0 309.4 212.7 206.3 143.8 139.1 99.3 165.2 113.4 280.7 236.7 231.6 124.7 173.5 84.6 226.2 215.6 237.6 251.9 235.8 212.9 236.0 218.3 258.5 243.9 223.3 357.7 233.0 252.7 262.3 283.3 249.6 154.4 244.6 301.8 172.5 200.0 188.2 73.0 96.1 139.5 206.4 209.6 204.4 223.6 181.1 172.2 208.3 205.1 208.7 160.0 365.7 224.5 225.0 227.7 204.0 164.9 157.5 185.4 221.7 223.9 210.0 239.4 205.1 210.3 1. Monthly average 1920-1921 — 100; 2. Monthly average 1923 = 100; 3. Monthly average 1919-1920-1921 = 100; 4. Monthly average of mean of production and shipments in 1919 = 100; 5. Average daily production; 6. Monthly average 1920 = 100; 7. Base figures (1920) partly estimated; 8. 7th F. R. District; 9. First Illinois internal revenue district; 10. Monthly average receipts 1919 = 100. Digitized for Page FRASER 8
@FedFRASER