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F E D E R A L R E S E R V E B A N K O F C H IC A G O
REPO RT O F BUSINESS C O N D IT IO N S
IN T H E S E VE N TH FEDER AL RESERVE D IS T R IC T
N O VE M B ER 25, 1919
Compiled November 22, 1919

While business continues active in most lines of production throughout the Seventh Federal Reserve District,
there is reflected here and there, especially in the metal trades, the effect of the interference with the steel industry by
the strike. Many manufacturers either report that their supply of steel is running low, thus restricting operation, or
is so depleted as to bring plant operations to a standstill. In the basic industry, however, the steel mills are gradually
increasing operation notwithstanding the strike, until in some instances they are approaching capacity.
Another factor which is causing apprehension is the coal strike. While this has been officially called off, the miners
are not yet working to any appreciable extent in the Middle West. This has made a serious inroad in the fuel
supply. The available supply of coal is only sufficient to meet the requirements of a very few weeks.
Money is in Strong Demand

Money is in strong demand in all parts of the Middle West. This is reflected clearly in the volume of rediscounts
and borrowings by the member banks of the Federal Reserve Bank. Assurances from bankers point to the liquidation
of these loans the first of the new year when the cattle now being fed and grain still being held on the farms can be moved
conveniently. This applies more especially to Iowa which is the heaviest of the cattle feeding States in the Seventh
District. Wisconsin is expected to clean up its produce around January 1.
The general outlook in the district, therefore, is for an easing up in money as soon as the seasonal demand is cared
for, especially if the pressure from the Federal Reserve Board has the desired effect of releasing money employed in
speculation. Rates on prime bankers’ acceptances recently advanced slightly both as to rediscount and brokers’
purchases.
High Living Cost Still Troublesome Factor

Living costs continue to be the embarrassing feature in the industrial situation, and the recession in certain prices
which is still moderate is already finding its reflection in the situation in the agricultural districts. Farmers seem to
be somewhat worried over the fact that what they have for sale must be disposed of at lower prices while what they
have to buy must be obtained at higher prices, the latter condition being attributed by them to the persistent demand
of labor for shorter hours, curtailing production, and for higher wages. Even labor on the farms is demanding a much
higher wage and shorter hours and necessarily this, if persisted in, means a cut in the plan of production to a point where
it can be cared for by the farmer without the employment of outside labor.
Land Activity Halts but Financing Problem Remains

High prices obtained for farm lands in Iowa and in sections of Illinois are resulting in the curtailment of activity
in the movement of land and in some instances there has been a slight reaction in values. The problem of financing
this land activity and speculation continues, as the settlement under land contracts already in existence falls around
the first of March next year.
The enhancement in rentals in Iowa has also been a factor in checking the rise in farm lands, many farmers in­
sisting upon a rental basis approximately 100 per cent greater than in previous years. Even at the present range of
produce prices it is held impossible to show a farm income justifying some of the extravagant prices which purchasers
have contracted to pay for farm acres. Correspondents generally are inclined to condemn land speculation as a source
of public peril.




Wage Earners Continue to Spend Lavishly
■Wage earners continue to be lavish in their expenditures and this is spreading to the clerical forces as well as those
employed in factories, according to advices from merchants. The demand from these classes is for the more expensive
fabrics and the desire for pretty things is so insistent as to result in the sacrifice of savings and even Liberty Bond in­
vestments in many instances. The tendency away from thrift is indicated further by the fact that the highest priced
merchandise is not always the most serviceable, as for instance hosiery, waists and goods of that character.

Retail Price Recession is Stubborn
Careful surveys of food prices by official and private investigators reveal little change in the cost of subsistence
compared with previous months. Heavy receipts of cattle and hogs have brought down the prices of meat rations for
careful buyers who are shrewd enough to take advantage of the wide range for different grades and qualities of indentical
food value. Beef quotations at the Union Stock Yards range from $5.50 to $21.00 at the present writing. This “ spread”
indicates the difference between lean and ill-favored starvelings at the $5.50 end and the corn-fed aristocrat of the herd
at the other.
Translated into local prices at the butcher shop, this “ range” means pot roasts quoted all the way from 15 to 28
cents a pound, rib roasts from 11 to 38 cents a pound and porterhouse steaks from 22
cents to 60 cents a pound,
according to the neighborhood served and the number of slow accounts carried on the butcher’s books. The taste is
the same.

Ignore Opportunities for Buying Cheaper
One striking feature in the investigation of the trend in living costs is the disposition on the part of buyers to ignore
opportunities to curtail living costs and to demand increased service and the choicest food rations. The investigation
clearly indicates that the spread between maximum and minimum quotations at the present time is about 6 per cent
greater than that of a year ago, whereas the maximum price on most of those commodities is approximately the same
or only slightly lower. This is the price the public is paying for convenience and service.
Food specialists agree that the persistent high cost of subsistence is mainly due to the refusal of the public to buy
merchandise on a net basis, without “ ornamental packages” and expensive “ service.” Rolled oats are obtainable in
bulk at 6 cents a pound but only boarding house keepers will buy them. The housewife insists on a decorated carton
and a familiar name, paying a high premium for equivalent food value. Store costs and “ overhead” formerly figured
at 20 to 22 per cent have gone up with the rise in rents and wages and the decline in efficiency. Stocks are broken and
supplies hard to replace, hence retailers try to protect themselves by “ taking all the traffic will bear” regardless of the
wholesale market fluctuations favoring the consumer.

How Live Stock Receipts and Prices Compare
The receipts of cattle during the month of October at the principal markets, compared with the corresponding
months of the previous year, show an increase of 6 per cent, calves an increase of 19 per cent and sheep an increase of
7 per cent, while for the first ten months of 1919 receipts of cattle decreased 7 per cent compared with the corresponding
period of the previous year. Calves increased 2 per cent and sheep increased 24 per cent. The average price for choice
cattle for October, 1919, wTas $19.05 per hundredweight, against $19.58 the previous October, while common cattle
brought $16.15 in October, compared with $14.48 the corresponding month of 1918. The average price for sheep and
lambs in October last was $8.06 and $15.06 per hundredweight respectively, compared with $10.46 and $15.38 the
corresponding month of the previous year. The average price for beef and mutton in October was $14.70 per hundred­
weight for beef, $10.21 per hundredweight for mutton and $23.13 for lambs, compared with $16.60 for beef, $13.49 for
mutton and $21.46 for lambs in the corresponding month of 1918.
The receipts of hogs in October at the principal markets of the Middle West show a sharp falling off compared
with a year ago, the total for last October being 1,357,585 head, compared with 1,694,609 in October 1918. The trend
of prices in October in live hogs and their products for Chicago only shows an average of $14.80 compared with $17.76
a year ago. Cash lard ranged from $26.75 to $27.50 in October, compared with $25.00 to $27,123^ a year ago. Cash
ribs ranged from $18.50 to $19.50 in October, 1919, compared with $20.25 to $23.70 a year ago.




How Prices Vary in the Same Neighborhood

There is a wide difference between the wholesale price, or the price at which the retailer buys, and the price at
which the consumer purchases his rations, both in meats and groceries. Investigations show that bacon is quoted
between 28 and 50 cents, according to where you buy and the brand you specify. Lamb chops bring 38 cents at one
shop and another nearby offers the same specifications at 20 cents. One large packer reports $13.87 per hundred as
the average price of all beef carcasses sold for the week ending November 15. The price wTas $20.91 for the same item
April 28, to May 3, 1919. This is a decline of 33 per cent. The decline is not translated into correspondingly cheaper
stews and steaks for the people. Waste added and the “ percentage on” prorated over the various cuts, the prices
charged over the counter for choice domestic pieces remain very high.
Beans are very much cheaper, canned and dry alike being quoted a fifth lower than during the war. The pork
that goes with beans is lower by the difference between $22.50 and $25.50 a year ago, and $16 and $22 now. But this
advantage is only for the few who are willing to buy provisions with discretion. New pack canned goods are in. The
quality is high and prices are yielding. Only in the fruit department is the price level being maintained or advanced.
High sugar and the great drought last summer virtually stopped domestic canning operations. The “ preserve shelf”
is empty and more housekeepers will have to buy tinned peaches, at 55 cents a can, or higher, for what they bought
two years ago at 28 cents. Big city jobbers agree that canned foods are on the edge of a drop, with fruit and tomatoes
excepted.
What Quoted Market Prices Reveal

Based on bona fide sales daily in the open market at Chicago, the following table represents the actual change in
“ high” and “ low” prices for standard qualities in jobbing and dealers’ original packages:
OFFICIAL PRICES TO RETAILERS— N O V. 12
1918
$10.50
$11.35
10.00
Pea beans, 100 Lbs..... .......... . 9.50
13.50
Kidney beans.......................... . 13.00
.33
Cheese (Domestic varieties).. .
.35
.47
.46
Cheese, Swiss No. 1............... .
.37
.38
Cheese. Swiss No. 2___ ...____ .
25.50
Dressed hogs........................... . 22.50
.53
.56
Eggs (ordinary first) D o z ..... .

1919
$12.00
$13.60
7.50
'8.00
11.00
11.50
.30
.33
.47
.48
.35
.36
16 00
22.00
.58
.56

1918— -N O V . 12, 1919.

191S
. $0.22
Sweet potatoes (Bbls.)______ . '4.50
Baldwin apples (Bbls.).......... . 5.00
Oranges (California) Box........ 9.50
Cabbage (100 Lbs.)................ . 1.00
Green and wax beans_______ . 1.00
Onions (100 Lbs.). ................ . 2.50
Butter, 90 score.................... .
.55

$0.23
'4.75
5.25
12.00
1.25
3.50
2.75
.58

1919
$0.28
4.25
8.50
5.00
2.00
1.00
4.25
.59

4.50
9.00
6.00
2.25
4.00
5.00
.62

On this selection of staples averaging the “ price range” at each date without arbitrary “ weighting” for quantities
consumed, it appears that retailers have been buying at a saving of 6.6 per cent compared with a year ago. Small
consumers have not enjoyed a corresponding decrease in prices at the store counter.
How Retail Prices Compare Over the District

From a questionnaire sent to the retail grocery trade of the Seventh District, comparing prices of forty-three staple
food items as of September 15, October 15 and November 5, 1919, we deduce a decline of 7 3^ per cent for the months
September 15—October 15. But for the period from October 15 to November 5, the advance was 10.8 per cent.
Actual retail prices for standard qualities and brands show an advance of 34 per cent between the week of May
3-10, 1917 and the week ending November 14, 1919. Following is the price comparison for a selected list of common
necessaries of the larder:
ACTUAL RETAIL PRICES
1917
May 3-9

1919
November 14
$0.13
$0.17
.22
.28
.14
.30
.60
.70

.14
.14
.49
Flour (Minneapolis brands)
Bbl............................................ 3.69
.95
.43
.25
.23
1.39
.059
.29
Onions, lb. ................................
.25
Standard brand soaps, per bar... .04
Pot roast, lb.
......................... .18
Rib roast, lb................................ .21




1.10

.05

___

3.40
1.48
.76
.30
.25
2.05
.04
.60
.075
.35
.075
.15
.15

3.70
1.50

.08
.28
.28

1917
May 3-9
. $0.24
.24
.20
.22
Red and Lima beans, can....... .. .125
Prunes............ ...........................
.10
.12
.. .25
Corn flakes__*...........................
.10
.09
_ .28
.08
Bitter chocolate
.32
Salmon......................................
.28
Evaporated m ilk .....................
.13
.15
Fresh trout................... ........... .. .18
Cheese.......................................
.29

1919
November 14
$0.26
$0.32
.38
.25
.30
.15
.20
.25
.35
.45
.14
.18
.55
.12
.50
.38
.15
.17
.25
.60




Potatoes Prove to be a Troublesome Factor

One of the most troublesome items in the pantry list of the average housewife is potatoes. Retail prices range
from 3 to 4 cents a pound against V /i to 2 cents a pound at wholesale. The official price range to retailers, Chicago
Produce Exchange record, follows:
POTATO RANGE PER 100 LBS.
January 1
1919..... ....................................... $1.75
$1.85
2.15
1918............................................. 1.85

November 15
$2.25
$2.45
1.60
1.85

January 1
1917................ ................................$1.60
$1.95
1916.............. ...................................... 80
1.00

November 15
$1.70
$2.40
1.40
1.85

The advance this year to date is 30 per cent. Cabbage prices, also, are very obstinate, causing much discomfort
to those of humble incomes. Apples, the one fruit necessity, become an unobtainable luxury to the ordinary wage
earner at $10 a barrel wholesale for Jonathans and $8.50 to $9.00 for the plebeian Baldwins.
How Bank Investments and Loans Compare

There has been a general decrease in the holdings of government securities owned by representative banks in the
district. The 44 selected member banks in Chicago show a decrease of $63,451,000 between August 22 and November
7, while the 12 selected Detroit banks show a decrease of $4,377,000, and the 44 selected banks in other clearing house
cities show a slight decrease. Total loans secured by government securities decreased $4,189,000 in the 44 selected
Chicago banks, $953,000 in the 12 selected Detroit banks, and $429,000 in the 44 selected banks in other large cities.
Loans secured by stocks and bonds other than government securities increased $22,708,000 in the 44 Chicago selected
banks between August 22 and November 7, while this item increased $15,126,000 in the 12 selected Detroit banks.
There was a decrease of $5,807,000 in the selected banks in other clearing house cities.
Bank exchanges at the Chicago Clearing House for the first eighteen days of November aggregate $1,614,649,000,
an increase of $378,317,000 compared with a year ago, while exchanges at twenty-two of the leading clearing houses of
the Seventh Federal Reserve District aggregated $485,554,600, an increase of $147,817,000 compared with a year ago

SELECTED M E M B E R BANK STATISTICS— SEVEN TH DISTRICT

(000’s omitted)
Chicago
------ 44 Member Banks-----Jan. 3
Oct. 10
Nov. 7

Loans—
Secured by U. S. war obligations..$61,160
Loans secured by stocks and bonds
other than U. S. securities......
All other loans and investments... .846,008
Reserve Balance with Federal
Reserve Banks.......................... . ..108,825
Cash in Vault................................... .. 44,555
Deposits—
Net demand.... ............................. 794,398
Time.............................................. „149,859
Government..... ........................... .. 13,962
Bills Payable and Rediscounts—
Collateral Notes.......................... .. 37,735
Bills Rediscounted....................... .. 10,186

Detroit
------ 12 Member Banks-----Jan. 3
Oct. 10
Nov. 7

Other
------ 44 Member Banks-----Jan. 3
Oct. 10
Nov. 7

$75,786

$66,542

$ 8,720

$10,529

$11,372

$13,420

$14,668

$14,258

248,423
698,206

278,031
714,002

*244,085

41,407
273,522

42,105
276,058

280,939

38,334
295,492

37,111
300,061

119,616
39,619

122,921
39,270

21,886
13,821

27,919
14,723

27,607
15,879

25,241
15,811

27,893
13,927

27,150
14,642

862,499
172,051
29,353

904,086
176,238
18,042

162,048
155,896
13,964

211,892
183,525
6,141

211,330
187,616
3,140

209,707
89,211
6,189

231,043
106,490
7.519

231,453
104,857
4.809

37,852
23,769

40,252
22,974

12,154
412

17,590
4,016

30,825
2,252

18,380
16,191

21,419 1
9,754

29,103
11,562

includes Loans secured by stocks and bonds other than U. S. securities.

CROP ESTIM A T E S FOR FEDERAL RESERVE D ISTRICT N O . 7 (CHICAGO)

Government estimates on the principal crops in the States of Illinois, Indiana, Iowa, Michigan and Wisconsin,
excluding those counties which are not in the Seventh Federal Reserve District, compare as follows:
Crop
Corn




Acreage
1919
Acres
.24,178,000

Forecast
of Production
Based on Condition
November 1, 1919
Bushels
921,410,000

Acreage
1918

Production
1918

Acres
35,345,000

Bushels
695,130,000

NOTE— No new estimates were made in November for wheat, oats, rye and barley.

RECEIPTS AN D SH IP M E N T S OF IM P O R T A N T C O M M O D IT IE S AT CH ICAGO

(000’s omitted)

Flour, barrels.............................................
Wheat, bushels..........................................
Corn, bushels..... .......................................
Oats, bushels..............................................
Cured Meats, pounds...............................
Fresh Meats, pounds................................
Lard, pounds..............................................
Cheese, pounds..........................................
Butter, pounds..... .....................................
Eggs, cases.. ............................................
Potatoes, bushels.......................................
Hides, pounds............................................
Lumber, thousand feet.............................

----------------Shipments-----------— September—
—October—
1919
1918
1919
1918
652
597
790
553
15,440
10,228
5,507
3,484
2,857
2,603
3,076
5,084
6,506
8,730
7,863
6,914
100,097
66,371
104,012
94,557
175,611
171,870
113,058
153,490
55,980
50,636
22,137
55,686
41,025
5,368
24,333
6,361
40,540
16,981
25,126
20,486
219
284
379
369
680
446
1,432
1,854
33,839
27,939
16,502
8,906
93
68
95
70

----------------Receipts---------------—September—
— October—
1919
1918
1919
1918
1,074
1,190
995
919
4,872
9,191
6,279
20,218
4,802
11,550
7,554
9,530
10,942
8,940
11,417
9,385
10,160
16,895
11,413
22,439
67,095
77,829
128,424
101,389
6,230
7,260
7,232
8,320
20,523
17,156
22,384
18,399
24,497
21,916
22,731
21,134
320
240
337
236
1,877
3,600
2,889
1,611
14,309
10,874
11,115
16,863
171
208
130
205

Receipts of live stock at the Chicago market during the four weeks ended November 15, compared with the cor­
responding period of 1918, are as follows:
1919_______ ______________________ ___________________________________
1918......................................................................._............................................
Increase
*Decrease

Cattle
389,086
363,258

Calves
61,952
38,285

Hogs
656,115
750,563

Sheep
647,251
518,089

25,828

23,285

*94,448

129,162

CO M PARATIVE STATISTICS OF BUILDING AND EN GINEERIN G OPERATION S

Contracts awarded in States north of the Ohio and east of the Missouri Rivers, from January 1, to November
1, 1919.
1919........
$2,111,452,000
1918_________________________ 1,501,596,000
1917__________________
1,433,092,000

1916.......................
$1,121,616,397
1915................................................ 769,173,100
1914................................................ 632,462,200

1913............................................ $743,758,000
1912.............
743,331,500
1911............................................ 667,433,813
1910.......................................... 694,007,066

Contracts awarded in Seventh Federal Reserve District States—Illinois, Indiana, Iowa, Michigan and Wisconsin
— also Northern Missouri and Eastern Kansas.
1919____
1918.......
1917.......

$749,120,000
389,965,000
548,787,000

1916.................
$381,021,897
1915.................................................. 249,414,600
1914.................................................. 182,120,700

1913________________________ $158,373,000
1912.......................................... 152,748,000
1911_________________
117,557,313
1910............................................ 170,497,066
NOTE— Building areconstruction statistics compiled by the P. W. Dodge Co.

BUILDING PER M ITS OF SEVEN TH FEDERAL RESERVE DISTRICT CITIES

Illinois

— October, 1919—
No. of
Estimated
Buildings
Cost

Aurora_____________________________________________________
17
Chicago.....................................
758
Danville..... ........................................................................................
7
86
Decatur.___________________
Peoria______________________________________________________
69
Springfield.............................................................
68
Indiana
Fort WayneL..............
76
Indianapolis.............
711
Richmond.... ...................................................................................... 25
South BentL— .... ............................................................................ 295
Terre Haute................................................................
68

$

— October, 1918—
No. of
Estimated
Buildings
Cost

31,625
16,948,050
25,400
318,650
498,220
673,050

19
119
1
17
31
20

330,042
1,576,890
84,700
507,281
149,615

9

Per Cent
Gain

PerCent
Loss

19.016
1,312,200
3,400
58,875
38,970
6,240

66
1191
647
441
1181
10686

.......
.......
.......
.......
.......
.......

34
395
18
80
59

37,150
191,902
60,000
23,126
26,840

788
721
41
2093
457

____
.......
.......
.......

14
19
38

18,000
16,950
127,600

866
4336
339

.......
.......

8

25,900

1480

.......

Iowa
Cedar Rapids....................................................................................
Davenport.........................
Des Moines.........................

84
95
126

Sioux City.......................................

173

174,000
751,915
559,960
45,009
409,250

Michigan
Bay City_________
61
Detroit____________________________________________________ 2,561
Grand Rapids.______________________________________________ 179
Jackson.___________
104
Lansing_______________________
217
Saginaw________________________
217

338,450
9,448,585
425,082
194,630
396,535
1,181,214

13
509
69
32
19
77

21,065
1,431,080
28,374
18,398
7,635
38,768

1506
560
1398
959
5095
2947

.......
.......
.......
.......
.......
____

Wisconsin
Madison...........................................................................................
Milwaukee.......................

228,440
3,470,083

4
106

4,500
268,468

4976
1192

.......
____




49
479