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B usiness C onditions S eventh R eserve FEDERAL D is t r ic t M O N T H L Y R E V IE W P U B L IS H E D BY T H E F E D E R A L R E S E R V E B A N K OF C H IC A G O Volume 9, No. 10 October 1, 1926 BUSINESS CONDITIONS IN THE UNITED STATES T N D U S T R IA L activity and distribution of commodities continued in large volume in August at a level higher than a year ago. The general level of wholesale prices receded further in August, reflecting price declines for agricultural commodities. PRODUCTION — The index of production in basic in dustries, which is adjusted for the usual seasonal variations, declined slightly in August, but this decline is accounted for by the fact that there were five Sundays in August as against four in July. Textile mill activity and production of steel ingots, zinc, and petroleum increased, while the output of pig iron, lumber, coal, copper, cement, and sugar was smaller than the month before. Automobile produc tion increased considerably in August and was larger than in any month since April. Factory employment and pay rolls, after declining in July, increased in August, as is usual at this season of the year. Building activity, as measured by contracts awarded in thirty-seven states east of the Rocky Mountains, was in larger volume in August than in July or in any other pre vious month with the exception of August, 1925. In east ern and southeastern states the volume of building was smaller in August than a year ago, while in the Middle W est contracts awarded were larger. Contracts for resi dential structures were smaller than last year, while those for industrial buildings and for public works and public P R O D U C T IO N IN BASIC utilities were substantially larger. Crop conditions improved in August, according to a statement by the Department of Agriculture. September forecasts of yields of corn, barley, hay, tobacco, and most fruit and vegetable crops were above those made in August, while expected yields of oats and spring wheat were slightly less. A cotton crop of 15,810,000 bales was indicated on the basis of the condition of the crop at the middle of Septem ber. The crop, however, is later than last year, and ginnings up to September 16 amounted to only 2,511,000 bales, compared with 4,282,000 bales prior to September 16, 1925. TRADE — Volume of wholesale trade and of sales at de partment stores increased in August, and retail sales were larger than a year ago. Stocks of dry goods and shoes carried by wholesale firms were smaller at the end of Au gust than last year, while those of groceries and hardware were larger. Inventories of department stores increased in preparation for autumn trade, but this increase was less than is usual at this season, and at the end of the month stocks were smaller than a year ago. Freight carloadings in August continued higher than in the corresponding months of previous years, and for the weeks of August 28 and September 4 exceeded all previous weekly records. Loadings of grain continued large, and shipments of merchandise in less-than-carload lots, misW HOLESALE IN D U S T R IE S P R IC E S PER CENT 150 100 50 0 . I .1 i 1 l t i I i i i 1922 Index of 22 basic commodities, adjusted for seasonal variations (1919=100). Latest figure, August, 1926: 116. . . . . . . . . . . . . 1923 1924 1925 1926 Index of U. S. Bureau of Labor Statistics (1913=100, base adopted by the Bureau). Latest figure, August, 1926: 149.2. Compiled September 27, 1926 cellaneous commodities, ore and coke were considerably larger than in the corresponding period of previous years. PRICES — Wholesale commodity prices, according to the index of the Bureau of Labor Statistics, declined by over one per cent in August, reflecting largely price decreases for grains, live stock, and meat products. Prices of cloth ing materials, fuels, and metals increased between July and August, while prices of cotton, wool, sugar, building mate rials, and rubber showed little change. In the first half of September prices of grains, cattle, sugar, bituminous coal, and coke advanced, while prices of raw cotton, silver, and bricks declined. BANK CREDIT — Increased demand for bank credit in connection with the harvesting and marketing of crops and autumn trade, together with an increase in loans on securi ties was reflected in a considerable growth between the FACTORY EMPLOYMENT AND PAYROLL middle of August and the middle of September in loans of member banks in leading cities. The banks’ holdings of investments also increased, though there was a decrease in investments at banks in New York City, and total loans and investments on September 15 were larger than at any previous time. The volume of reserve bank credit increased by about $90,000,000 between August and September 22, partly in response to seasonal demands for currency. Discounts for member banks rose in September to the highest figure for the year, and acceptance holdings also increased, while United States securities declined by about $55,000,000. Money rates continued to rise in September. Rates on commercial paper advanced by one-fourth per cent to 4^24J4 per cent, and rates on security loans also averaged higher than in August. FEDERAL RESERVE BANK C R E D IT PER CENT P AYR O LL y £ —■ ... __\ •' ***v— * '" '- V EM PLO YM EN T Y * ■ in i ii h i n 1922 m i 1924 1925 1926 Federal Reserve Board’s Indexes of factory employment and payroll (1919=100). Latest figures, August, 1926: Employment, 94.4; Payroll, 107.7. 1926: Total Reserve Bank Credit, 1,207 million; Discounts for Member Banks, 622 million; Acceptances, 263 million; U. S. Securities, 318 million. BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT C U R R E N T conditions in the Middle West present few unusual features, in general following the trends char acteristic of the season. Crop prospects are of especial significance at this time. September 1 estimates for corn in the Seventh district were higher than a month earlier, but the yield and quality depend upon weather conditions during the maturing period. Rains have interfered with the threshing of small grains, and the forecast for oat pro duction has been reduced. The wheat crop turned out well, and farmers are planning to sow a larger acreage this fall than last. Prospects are favorable for abundant fruit crops provided frost does not come too early. Industry was fairly active during August, the aggregate volume of employment practically the same as the month before, with payrolls higher following the usual vacation and inventory period decline. Iron and steel mills con tinued to receive heavy specifications and make heavy ship ments during August; production exceeded a year ago. Illinois coal output increased for the third consecutive month. Building operations are still on a high level, and absorb a large amount of labor. Merchandising reports for August indicate expansion over the preceding month and a year ago in sales by mail order houses and department stores, while comparisons for whole sale trade vary. Automobile sales at retail were less than in July but above August, 1925; agricultural machinery sales made gains in both comparisons. Page 2 August statistics covering financial operations show a decline from July in commercial paper sales, in the volume of bankers’ acceptances executed, and in check payments, with a slight advance in savings deposits. CREDIT CONDITIONS AND MONEY RATES Credit conditions in the Seventh district are little changed from those reported a month ago. Demand has been well maintained, certain banks being called upon for heavier requirements than last year, and a few smaller, but reports on the whole indicating about the same volume. Current rates in Chicago are as follows: Commercial paper 4J4 to 4^2 per cent, customers’ over-the-counter loans 424 to 5J4 per cent, and collateral loans 4j£ to 5 per cent. The average rate earned by ten o f the larger banks in Chicago during August was 4.86 per cent, approximately the July rate, and compared with 4.77 per cent in the cor responding month of 1925. In Detroit the prevailing rate on commercial loans during the week ending September 15 was unchanged at 4J£ to 6 per cent from the same period in August. The average rate earned by six Detroit institu tions during August was 5.34 per cent, as against 5.30 per cent in July, and 5.13 in August a year ago. Total reserves of the Federal Reserve Bank of Chi cago on September 8 reached $419,986,000, the peak point in nearly two years, falling off, however, to $397,112,000 by September 22.: Total bills and securities on the fif- teenth aggregated $163,830,000, the highest level since the close of June, but dropped to $158,718,000 the following week. On September 22, the volume of bills discounted amounted to $70,934,000, having touched $73,604,000 on August 25, but declining steadily thereafter to $53,538,000 on September 15. Federal Reserve notes in circulation exceeded $200,000,000 on each reporting date during the month, the highest level being $210,533,000 on Septem ber 8. P O S IT IO N O F T H E F E D E R A L R E S E R V E B A N K O F C H IC A G O Latest figures, September 22, 1926, in thousands of dollars: Federal Reserve Notes, 208,892; Total Bills and Securities, 158,718; Bills Discounted, 70,934. Loans and discounts of reporting member banks dropped to $2,171,098,000 on August 25, but had advanced to $2,199,300,000 by September 15. The increase from August 11 to September 15 approximated five million dollars, and the volume for the latter date was $132,133,000 greater than for the corresponding week a year ago, standing at the highest level since these data have been collected. Investments of reporting member banks in Chicago and Detroit totaled $662,622,000 on September 15 compared with $635,861,000 on August 11, while those in other selected cities changed only slightly, the September 15 figure for the last mentioned being $118,599,000. Net demand deposits of reporting mem ber banks declined about thirty-seven million between August 11 and 25, and then increased eighty million to the high point of $1,897,464,000 on September 15. Time deposits were slightly lower than a month previous, aggregating $1,050,273,000 on September 15. Commercial paper rates strengthened during August, reporting dealers in this district averaging 4 to 4J4 for low and 4J4 for high, with the customary rate ruling at 4J4 to 4y2. After September 1, most bills sold at 4j£. There was a moderate supply during August, but demand was light. Total sales by eleven dealers fell off 10.8 per cent from the July volume, although individually five showed gains; in comparison with August, 1925, declines by all but two amounted to a net drop of 16.0 per cent. Five houses aver aged at the end of August 3.0 per cent less paper outstand ing than on July 31, two registering increases and three declines; the reduction of 16.1 per cent from a year ago like wise reflects two gains and three decreases. Outstandings for twenty-six dealers throughout the country totaled $638,110,000, the smallest amount this year. Total purchases by six reporting dealers in the open bill market from August 19 to September 15 amounted on an average weekly basis to only 48.8 per cent of the volume bought during the preceding period; one house had no transactions, and four registered declines. Sales to local banks increased, but those to the Federal Reserve bank, to out-of-fown banks, and to others fell off, the total averaging a drop of 53.0 per cent, which reflects individual declines for each of the dealers. Holdings on September 15 were 34.9 per cent higher than in the middle of August. The transactions covered principally grain, packing-house prod ucts, tobacco, sugar, canned goods, pig iron, cotton, tur pentine, and oil. The supply of paper was reported small, and demand fair. Ninety-day maturities moved best, their offered rate advancing from 3-Hi at the beginning of the period to 3£fj by September 15. The volume of bills accepted during August by sixteen reporting banks in this district was 12.1 per cent less than the July acceptances, and 15.5 per cent below a year ago. Transactions reported for the first two weeks of September covered principally lard and meats for export, tea, coffee, grain, pig iron, and sugar. August purchases in general exceeded those of July, while sales fell off; totals in both items, however, were affected by special dealings at two banks, so that the aggregate volume of bills bought was only half as large as in July, and sales were over 70 per cent heavier. The banks’ liability as acceptors for bills out standing declined for the fourth successive month, dropping 18.2 per cent below the July 31 amount, and 20.0 per cent under August 31, 1925. Total bills held at the close of August, as well as holdings of the banks’ own acceptances, registered declines from July 31 and from last year. Hold ings by the Federal Reserve Bank of Chicago advanced to $36,029,219; purchases during the month amounted to $27,505,413. Agricultural Financing— Nineteen Joint Stock Land banks report loans outstanding on August 31 in the five states including the Seventh district, as $211,757,382, com pared with $210,852,022 (revised figure) at the end of July, and $185,763,211 on August 31, 1925. Loans outstanding in the same territory of four Federal Land banks totaled $175,878,817 at the close of August; on July 31, they were $174,327,881, and on the corresponding date a year ago $156,853,151. Four Federal Intermediate Credit banks had loans and discounts (including rediscounts) on August 31 of $1,336,419, as against $1,287,355 a month previous, and $1,619,248 last year on this date. Volume of Payment by Check— The volume of payment by check during August in thirty-seven clearing house cen ters of the Seventh district totaled $5,696,254,000, a decline of 6.4 per cent from July but an increase over August, 1925, of 9.6 per cent. The decrease in the four larger cities— Chicago, Detroit, Milwaukee, and Indianapolis— averaged 5.9 per cent, and in thirty-three smaller centers, 9.1 per cent. In the comparison with a year ago, the four cities named showed a gain of 11.1 per cent, while the smaller cities reported only a 2.9 per cent increase. Savings— The number of savings accounts reported as of September 1 by 219 banks inthis district was0.7 per cent greater than on July 31. Deposits, however, declined 0.2 per cent, decreases in Illinois and Michigan offsetting gains in the other three states; individually 120 banks reported heavier deposits. In comparison with a year ago increases at 109 banks and declines at 77 raised the state totals except for Illinois, and averaged a net advance for the district of 1.8 per cent; the gain of 3.2 per cent in number of accounts reflected increases in each of the five states. Bonds— The bond market has been relatively quiet dur ing the past few weeks, with prices generally holding firm. The principal retardment to more active business is the scarcity of new offerings, as buyers are in a receptive mood, with money for investment plentiful. It was expected that after Labor Day, bringing the vacation period more or less to a close, the market would be supplied with consid erable new financing. The number o f issues appearing, however, was small, so that those offered met with ready reception. Investors continue especially interested in pubPatc 3 lie utilities, although good industrials also are in excellent demand. First mortgage bonds are exceptionally active, August sales exceeding a year ago; the fewer issues now being offered reflect the decline in construction. There has been a marked trend in favor of foreign government bonds, accompanied by advancing prices. AGRICULTURAL PRODUCTION AND FOODSTUFFS September 1 estimates for the corn crop in the Seventh Federal Reserve district showed a gain over the previous month; the growth of the plant was late, however, with a large portion of the grain dented and some still in the milk stage the middle of September; the weather continued unsettled and cloudy, and more sunshine and warm dry weather were needed to bring the crop to full maturity before early frosts. September floods caused serious dam age to crops on river bottom lands in the Indiana, Illinois, and Iowa corn belt. The wheat crop turned out well, but there was still some wheat and considerable oats unthreshed September 15, which have been damaged by the rains. Esti mates of oat production were reduced on September 1 from the beginning of August. Farmers are planning to sow a larger acreage to winter wheat this fall than last; their intentions may be interfered with, however, by the tangled condition of the corn in the fields to be put in wheat, and by unfavorable weather conditions. The crop of sweet corn was smaller than last year. and barley declined in the latter comparison. Grain prices trended downward at Chicago after the first week in August, with the quotations for wheat, oats, and rye aver aging a little lower and those for corn a trifle higher for the month as a whole than for July. Quotations tended to firm by the middle of September. Smaller amounts of wheat, corn, and rye and greater quantities of oats were contracted for future delivery by members of the Chicago Board of Trade during August than in July; the aggregate, however, declined from the corresponding month of 1925, although the tonnage of corn showed a slight increase. Flour— Figures furnished by the Chicago Board of Trade show that receipts of flour in the city during August aggre gated 1,258,000 barrels, and shipments from there 869,000 barrels, representing gains in both items over the preced ing month and a year ago; net receipts were 389,000 barrels, as compared with 327,000 barrels in July and 343,000 in August last year. Data on production, stocks, and sales of mills in the Seventh district are indicated below. Prospects for fruits are favorable: the grapes are a little late, but are ripening, and the yield is large; the harvesting of peaches had begun by Labor Day, and the crop is abun dant; the picking of pears is also under way, with produc tion larger than a year ago. The 1926 acreage of cucum bers raised for pickles, totaled less than that for 1925. Esti mates of the Indiana onion crop have been reduced since August 1. On the basis of September 1 condition, the Bureau of Agricultural Economics forecasts the commercial produc tion of Danish cabbage in Wisconsin, Michigan, and Indiana at 65,300 tons, the Indiana, Illinois, Iowa, and Michigan crop of tomatoes for manufacture at 227,200 tons, the Michigan celery at 632,000 crates, and the Illinois-Michigan apples at 2.974.000 barrels for 1926, compared with the respective harvests of 63,200 tons, 381,200 tons, 780,000 crates, and 2 . 8 6 4 .0 0 0 barrels last year. CHANGES IN AUGUST, 1926, FROM PREVIOUS MONTHS CROP PRODUCTION Estimated by the Bureau of Agricultural Economics as of September 1. (In thousands of bushels) S e ven th D istr ict F orecast F in a l . 1926 Corn ....... 909,277 Oats ............ 497,833 Winter Wheat ...... 65,280 Spring Wheat ........ 3,062 Barley ....................... 38,506t Rye ...... ............... —. ll,10 7t Potatoes (white)........ 59,789 Tobacco* _____ ___ - 37,376 *Irt thousands of pounds. Reserve district. U nited S tates F orecast F in a l 5 -Y r . A v . 1925 1926 1,096,997 2,697,872 593,459 1,263,619 53,673 626,482 2,287 212,109 34.962J 195,204 10,049t 41,870 50,852 351,558 45,210 1,306,494 1925 1921-25 2,905,053 2,849,189 1,511,888 1,326,916 395,558 548,843 270,875 252,959 217,497 186,105 48,612 68,153 325,902 396.469 1,374,400 1,289,699 tFive states including the Seventh Federal Grain Marketing-—The movement of wheat to interior primary markets in the United States continued in large volume during August, although it was not quite so great as in the preceding month; arrivals of corn also declined, but those of oats gained Over July. Receipts of oats and corn showed a recession and those of wheat an expansion from a year ago and from the five-year average for August. Re shipments of grain from the above terminals were lower for corn and oats, and increased for wheat in comparison with July and the Corresponding month of last year, but all were under the 1921-25 August average. Visible supplies of all grain in the United States, with the exception of corn, showed a seasonal gain on September 11 over the preced ing month, ahd those of wheat, Corn, and rye were in excess of the corresponding week of 1925, while holdings of oats Pace 4 P er cent ch ange from Ju l y A ugust 1926 Production (bbls.) ........... + 7.2 Stocks of flour at end of month (bbls.)................. +19.1 Stocks of wheat at end of +88.2 month (bu.) .......... Sales (volume) _________ — 0.9 Sales (value) _________ — 1.4 C o m pa n ies included Ju l y A ugust 1925 +11.9 1926 34 1925 34 +22.3 30 30 +36.4 + 6.0 — 9.5 30 15 15 30 14 14 Production includes wheat and other flours. to wheat flour only. Balance of items refer Movement of Live Stock— Liberal quantities of cornfed steers and a number of grasser cows and heifers were marketed during August, but owing to the price level for westerns, fewer range cattle were offered during the month than in August, 1925, so that bovine receipts at public stock yards in the United States failed to show as large an increase over July as usual. The movement of lambs con tinued to expand during August, but a slightly smaller voljnme of hogs arrived than in the preceding month. Arrivals of both cattle and lambs tended to increase during the early part of September. LIVE STOCK SLAUGHTER C attle Yards in Seventh District, August, 1926 ................ Public Stock Yards in U. S. August, 1926................... July, 1926 ...... August, 1925 ______ H ogs L am bs and S h eep C alves 255,086 648,931 304,366 92,756 792,165 771,559 831,346 1,710,467 1,873,148 1,586,277 1,057,595 912,456 977,824 397,074 396,137 449,601 Reshipments of cattle and lambs to feed lots increased over August, with the movement for feeder lambs 34.6 per cent greater and that for feeder cattle and calves 30.0 per cent smaller than during the corresponding month of 1925. AVERAGE PRICES OF LIVE STOCK (Per hundred pounds at Chicago) W eek E nded A ugust S ept . 11 1926 1926 $9.50 Native Beef Steers (average) $10.30 6.80 Fat Cows and Heifers............. 6.35 11.55 Hogs (bulk of sales)------------- 11.75 Yearling Sheep ............. 11.00 10.80 14.10 Lambs (average) _________ 14.35 M o n th s of Ju l y 1926 $9.40 6.75 12.65 11.30 14.15 A ugust 1925 $12.10 6.20 13.15 11.25 14.80 Meat Packing— Slaughtering establishments in the United States produced a slightly smaller quantity of meat and fat d,uring August than in the preceding month. Employment for the last payroll in the period increased 0.9 per cent in number, 1.0 per cent in value, but declined 0.3 per cent in hours worked from the corresponding week of July. Domes- tic demand continued a little draggy at the beginning of August, though broadening later. The total value of sales billed during the period to domestic and foreign customers by fifty-eight packers in the United States increased 3.8 per cent over July but declined 0.2 per cent from a year ago. Chicago prices for beef and smoked meat eased slight ly in August, and those for lard and most pork declined; quotations remained about steady for lamb, strengthened somewhat for dry salt fat backs, while those for veal ad vanced over the July level. Prices for pork and lamb eased slightly; those for beef and veal showed little change dur ing the early part of September. Inventories on September 1 reported for cold-storage warehouses and packing plants in the United States showed a recession in volume from the preceding month and from the five-year average for the date; stocks of beef, pickled pork, and miscellaneous meats declined from September, 1925, but holdings of lambs and dry salt pork increased; lard and frozen pork stocks were somewhat greater than a year ago or the 1921-25 average for September 1. Demand from England improved for hams, bellies, and a few other cuts; lard trade was moder ately active at the beginning of the period, but declined during the last two weeks of the month. Continental trade increased for fat backs and short clear backs; inquiry for lard was rather quiet from that quarter during the first two weeks but improved later. The total tonnage of meat and lard forwarded in August b}' American packers for export gained slightly over July, owing largely to a tendency to build up consignment stocks for fall trade; clearances from United States ports also increased. European prices c Illinois output of bituminous coal increased in August for the third consecutive month, totaling 4,778,413 tons, as compared with 4,268,197 tons in July and 5,293,423' tons in August, 1925. There were 166 mines in operation in the state during the month, averaging 14.9 days’ working time, while in the preceding month only 152 mines worked for an average of 14.5 days. Demand for domestic sizes of coal has continued to improve moderately since the latter part of August, although deliveries have been interfered with in for lard were a little under the Chicago basis, while those for meat continued about on a parity with our domestic market. Dairy Products— The tonnage of butter manufactured in August by sixty-six creameries in the Seventh district declined 18.9 per cent from the previous month and in creased 1.1 per cent over a year ago. A recession in both comparisons was indicated for the country as a whole in statistics issued weekly by the American Association of Creamery Butter Manufacturers. Sales of creamery butter billed to customers by sixty-eight companies in the district showed a decline of 14.7 per cent in quantity from July and an increase of 2.6 per cent over August, 1925. Receipts of American cheese at primary markets in Wisconsin, from factories within that state, aggregated 16.7 per cent less for the four weeks ended August 28 than for the preceding period, and were 19.1 per cent under a year ago; redistri bution from those centers totaled 2.4 per cent and 1.1 per cent greater, respectively, in the two comparisons. A greater tonnage of cheese and seasonally smaller quantities of but ter and eggs were received at Chicago during August than in July. Larger stocks of butter and cheese but a smaller volume of eggs were in cold-storage warehouses and pack ing plants in the United States on September 1 than at the beginning of August or a year ago; holdings exceeded the 1921-25 average for the date. Prices of dairy products averaged higher at Chicago during August than in July, and tended to strengthen during the early part of Septem ber. L certain sections by the heavy rains. Data for August show that production of bituminous coal in the United States totaled 46,352,000 tons, representing a gain over July and over the corresponding month of the two preceding years; anthracite output was less in the com parison with the prior month and a year ago, but heavier than in 1924. Bituminous coal loaded into vessels at Lake Erie ports during August declined from the same month of 1925, though showing an increase over August, 1924. INDUSTRIAL EMPLOYMENT CONDITIONS Reports from industrial plants for August indicate that while there has been considerable readjustment in various industries in volume of employment, the aggregate remains practically the same as a month earlier. Increases in metals and metal products, chemicals, and rubber products were balanced by corresponding decreases for vehicles, food, and leather products. Tanning as well as the manufacture of boots and shoes showed an upward trend, but recessions in various other leather products resulted in an aggregate decline, for the group. Gains and losses under building ma terials practically offset one another. Additional employ ment in the manufacture of machinery, electrical apparatus, and agricultural implements contributed to the one per cent increase in the metals and metal products group, the first gain in five months. EMPLOYMENT AND The apparent increase in payrolls over July reflects a return to normal business after the usual seasonal vacation and inventory period, rather than an expansion in industrial activity. Exceptions are the gains in textiles and in leather products, where there were no corresponding losses the month before. The heavy decline noted in the vehicles group for July continued during August. The . volume of employment outside of factories also remained fairly constant; Thus, while distributive"indus tries, retail, gild wholesale, showed, som e, recession, public utilities and coal mining reported increases, and building activity continued undiminished. The ratio of applicants to positions at the Illinois free employment offices declined from 139 per cent to 131, while for Indiana the ratio was 83 per cent as against 92 the previous month. EARNINGS— SEVENTH FEDERAL RESERVE DISTRICT N um ber of W age E arners I n d u s t r ia l G roup All groups (10)..... .............................. .......................................... Metals and metal products (other than vehicles)......... ......... Vehicles .......................................................................................... Textiles and textile products..... ................................................. Food and related products.................................. ....................... Stone, clay, and glass products...................... ............................ Lumber and its products.— ............................. ................. .......... Chemical products ........................................................................ Leather products - ..... .................... .................................. — -----Rubber products ........... ......................... .............................. ......... Paper and printing.... ..............— ...—........... ........................ .— A ugust 15 W E E K ENDED J u l y 15 1926 1926 371,198 148,821 38,023 26,417 50,720 14,474 32,018 10,626 17,238 3,200 29,661 371,649 147,297 39,471 26,570 51,768 14,714 31,618 10,195 17,560 . 3,068 29,388 T otal E arn ings P er C ent C h ange . —0.1 + 1.0 — 3.7 — 0.6 — 2.0 — 1.6 + 1.3 + 4 .2 — 1.8 . + 4.3 + 0.9 W E E K ENDED Ju l y A ugust 15 1926 $9,665,431 3,627,539 1,115,470 669,502 1,339,895 432,788 784,776 281,376 402,080 82,933 929,072 15 1926 $9,398,949 3,430,571 1,174,669 613,877 1,377,088 421,428 719,348 264,985 393,157 74,294 929,532 , P er C e n t C h an ge + 2.8 + 5.7 — 5.0 + 9.1 — 2.7 + 2.7 + 9.1 + 6.2 + 2.3 + 11.8 . — 0.0 Page S MANUFACTURING ACTIVITIES AND OUTPUT Automobile Production and Distribution— The number of passenger automobiles manufactured in the United States during August totaled 379,111, representing an increase of 20.0 per cent over the preceding month and of 75.4 per cent over August, 1925. Output of trucks aggregated 45,283, as compared with 39,592 in July and 36,364 in the corre sponding month a year ago. Retail sales of new cars in the Middle W est declined in August for the third successive month, while wholesale distribution showed an increase in the month-to-month com parison for the first time since April, according to reports furnished this bank by representative dealers and distrib utors. Decreases in the number and value of cars sold at wholesale were recorded in the comparison with August, 1925, and the number and value of retail sales was higher. Stocks gained over the preceding month and a year ago. Deferred payment sales of thirty-six firms averaged 38.8 per cent of their total retail sales in August, as compared with 49.0 per cent in July and 45.8 per cent in the corresponding month of 1925. MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in August, 1926, from previous months P er cent ch an ge from A u gust J uly New cars Wholesale— Number sold ........... Value ................ ........ Retail— Number sold ... ........ Value ................ ........ On hand August 31— Number .............. ........ Value ................ ........ Used cars Number sold .............. Salable on hand— Number .... ...... ......... Value ................. ....... C o m p a n ie s in c l u d e d J uly A u gust 1925 1926 1.8 4.0 — 15.0 — 19.9 40 40 39 39 — 13.4 — 0.8 + 10.2 + 2.2 88 88 57 57 + 6.1 + 5.2 + 15.8 + 18.8 60 60 59 59 — 15.0 + 13.6 90 59 — 3.3 + 3.5 +40.4 +43.6 60 60 59 59 1926 + + 1925 M ID W E S T A U T O M O B IL E D IS T R IB U T IO N Sales a t W h o l e s a l e — 34 F i r m s Monthly average 1923-1924-1925=100. 1926: Value, 130; Number, 150.0. Latest figures, August, Agricultural Machinery and Equipment— As compared with July, the aggregate value of agricultural machinery and equipment billed in August to domestic and foreign customers by one hundred two manufacturers in the United States increased 6.9 per cent for the tractor, thresher, and combined harvester group, 1.7 per cent for all other (ex clusive of barn supplies and pumps), and 12.4 per cent for barn equipment, but declined 5.4 per cent for agricultural pumps. Gains of 4.5 per cent for the light group, 13.4 per cent for heavy machinery, 24.6 per cent for barn equipment, and 0.6 per cent for pumps were shown in the cbmparis’on with a year ago. DigitizedPage for FRASER 6 PRODUCTION AND SALES OF FARM EQUIPMENT IN THE UNITED STATES Changes in August, 1926, from previous months P er cent ch ange from Ju ly A ugust 1926 Domestic sales billed....... — 3.9 Sales billed for export.... +63.3 Total sales billed............. + 4.0 Production ......................... , + 2.2 Sales based on value. ment during the month. 1925 + 9 .0 + 6.6 + 8.6 + 9.5 C o m pa n ies included A ugust Ju ly 1926 102 54 102 98 1925 102 54 102 98 Production computed from average employ- Iron and Steel Products— As reflected in shipments, spec ifications, and new orders, activity in the steel industry of this district during August was maintained at approxi mately the July rate, and continued better than usual for the season; in certain instances shipments were the largest of any month this year. Unfilled orders of the United States Steel Corporation on August 31 totaled 3,542,335 tons, a decline of 60,187 tons from those on the books at the close of July, but a slightly larger amount than a year ago. Steel ingot production in the United States for August was the largest since April, the daily output averaging 154,022 tons, compared with 140,425 tons in July and 131,577 in the cor responding month of 1925. Pig iron output declined in the daily average for the fourth successive month, but was heavier than in August, 1925 or 1924. Following a slight decline on September 1 from $37.61 to $37.58 in the composite average price of fourteen iron and steel products ( Iron Trade Review) gains were recorded in the three succeeding weeks; the figure on September 22 stood at $37.86, which compares with $37.40 on Septem ber 23 a year ago. There has been little change in scrap metal prices at Chicago during the past month. The majority of twenty-six iron and steel casting foun dries sending August reports to this bank, showed heavier shipments than in the preceding month, but the aggregate value and tonnage declined; gains were recorded in the comparison with a year ago. Production was less than in July but higher than in August, 1925. Shipments of stove and furnace manufacturers were much heavier than in either July or the corresponding month of last year, and produc tion increased; orders booked were larger than in the pre ceding month but below August last year. Shoe Manufacturing, Tanning, and Hides— Operations at shoe factories in the Seventh district showed the custom ary increase in volume during August over July, and were at a higher level than a year ago, according to a compila tion made from the reports of thirty-two companies. Ship ments slightly exceeded current production. Inventories reported for September l by twenty-eight of the manufac turers were equivalent to 64.9 per cent of the quantity of shoes forwarded by those firms to customers during the previous month. Unfilled orders reported by twenty-three companies were equivalent to approximately five and onehalf weeks’ business at the current rate of distribution. CHANGES IN THE SHOE MANUFACTURING INDUSTRY IN AUGUST, 1926, COMPARED WITH PREVIOUS MONTHS P er cent change from Ju l y A ug ust Production ....................... Shipments ...................... Inventories ....................... Unfilled orders ............... 1926 +27.1 +25.9 — 5.5 — 18.6 1925 + 10.0 + 10.4 + 1.0 + 27.2 C o m pa n ies included Ju l y A ugust 1926 32 32 28 23 1925 32 32 28 23 A majority of the reporting tanneries in the Seventh dis trict showed a gain in the production of leather over July and a year ago; the total value of sales billed to customers also increased in both comparisons. Demand for belting was greater than in July but under that for the correspond ing month of 1925; sales of harness continued about on a level with July. Quotations for leather held steady. A smaller number of packer green hides and calf skins was sold at Chicago during August than in the previous month; the volume of receipts and shipments also showed a recession. Hide prices ranged from steady to slightly firmer. Furniture— In comparison with July, orders booked dur ing August by nineteen furniture manufacturers in the Seventh district declined 24.1 per cent; they also totaled 7.6 per cent below the volume of August a year ago, but were 27.9 per cent heavier than in the corresponding month of 1924. Shipments showed a seasonal gain, totaling 13.3 per cent more than in the preceding month. The amount forwarded averaged 0.8 per cent below August, 1925, and 24.7 per cent above the same month of 1924. Shipments aggregated slightly less than new orders booked, but the cancellations received brought unfilled orders on hand at the end of August to 3.3 per cent less than the amount held on July 31; a decline of 4.7 per cent was recorded from August, 1925. As was the case in July, operations increased in the month-to-month comparison and showed a reduction from the corresponding month of a year ago. Raw Wool and Finished Woolens— Through the greater part of August, demand for wool remained dull, although dealers in this district report sales in excess of August, 1925. During the last week in the month and since the first of September, the situation has shown more activity, with a larger number of mills in the market and these buying in greater quantities. Prices were maintained on a fairly even basis during August, with a few cases of slight easing, but have shown signs of renewed strengthening since Sep tember 1. The Australian and London sales opened firm; foreign markets are still on a higher level than domestic. Makers of finished materials have been booking a conserva tive amount of advance business since the spring openings in August, which were on a price basis approximately 10 per cent below last year. BUILDING M ATERIAL AND CONSTRUCTION ACTIVITIES The demand for lumber continued in fair volume during August, with sales by both manufacturers and wholesalers averaging somewhat higher than for July. A marked de cline from a year ago, however, has been reflected in the sales of manufacturing and wholesale concerns for several months past. For twenty-one reporting wholesalers and manufacturers, aggregate sales were 2.2 per cent over the previous month and 12.1 per cent below last year’s figures. Collections were good, and the ratio of outstanding ac counts to sales fell to 117 per cent in comparison with 122 the month before and a year ago. Stocks on hand were about as large as at the close of July, but were below last year’s volume. At retail yards, sales were on a lower level than in either July or a year ago. Reports for two hundred twenty-one yards showed a decrease of 2.3 per cent in the month-tomonth comparison, and of 6.5 per cent from August, 1925. Outstanding accounts at these yards showed some increase, registering 313 per cent o f sales, as against 295 the previous month and 305 at the close of August, 1925. Stocks regis tered little change during the month, but were slightly lower than a year ago. Reports for the United States on production and ship ments of cement indicate a slight recession in activity in this industry, although operations are still considerably greater in volume than a year ago. Stocks, which were reduced 9 per cent during the month, are about 30 per cent larger than at the end of August last year. In the brick industry, also, operations showed some decline, both in the comparison with July and with the corresponding month a year ago. Production is still high, however, and stocks have greatly increased. Building Construction— Contracts awarded during August in the Seventh Federal Reserve district were 20.2 per cent in excess of the July valuation and 62.2 per cent larger than the August, 1925, figure. The awards totaled $128,213,256, of which amount $40,621,180, or about 32 per cent, was for residential construction. The permits issued in fifty cities of the district also reflected a gain in both the monthly and yearly comparison, the estimated valuation gaining 11.5 per cent over July and 16.0 per cent over August, 1925. The number of permits issued was very slightly below the pre vious month and practically the same as last year. In the five larger of the reporting cities, the gain in estimated cost over a year ago was proportionately less than in the smaller cities. MERCHANDISING CONDITIONS Wholesale Trade— Reporting shoe dealers in this district, and with three exceptions dry goods houses, sold a larger volume during August than in July, the sales index of the latter reaching a high point for 1926, and of the former within 10.0 per cent of the March peak. In the hardware and grocery groups, two-thirds of the firms registered declines from July, averaging, however, nominal decreases as compared with more marked reductions last year. In drugs the declines by all but one dealer reflect the first JulyAugust drop in the six years (since 1921) of the index series. In comparison with August, 1925, half the grocery group and the majority of drug, dry goods, and hardware firms indicated smaller trade this year; in shoe sales gains by six dealers were offset by three declines. Collection comparisons show declines from July for all groups, and for all except groceries from a year ago. The volume of outstandings advanced during the month for forty-six firms and declined for thirty, group increases ranging from 0.2 per cent in drugs to 14.1 per cent in shoes; hardware accounts aggregated the same as last year, grocery 3:5 per cent higher, and the.others lower. Stocks held by shoe dealers at the end of August equaled July 31 totals, were 5.0 per cent higher for grocery firms, and showed declines of 2 per cent in hardware and drugs, and 3 per cent in dry goods. All except one dealer in the last-named group and the majority of hardware firms were inventoried lower than a year ago, while two-thirds of the grocery and half the drug firms were carrying heavier stocks this year. Department Store Trade— Over half the department stores reporting August sales to this bank registered declines from July, and nearly as many showed decreases from a year ago; the total group, however, averaged a gain of 6.3 per cent in the former comparison and 6.9 in the latter. Cumulative sales since January 1 are larger than for the corresponding eight months of 1925 for forty-eight and smaller for thirty-three stores, and aggregate 7.5 per cent higher. With four exceptions August collections fell below the July receipts, sixty-five stores averaging a drop of -16.4 per cent; accounts outstanding for the same group, neverthe less, totaled practically the same on August 31 as at the P afe 7 beginning of the month. In comparison with collections & year ago, forty-one increases and twenty declines averaged a gain of 8.7 per cent, while their ratio of 35.0 per cent to receivables on the books July 31 compares with 36.5 per cent last year. Three-fourths of the firms made net additions to their stocks during August, inventories for sixty-two at the end of the month averaging 11.6 per cent higher than on July 31; outstanding orders in the same comparison advanced from 10.0 per cent of 1925 purchases to 11.3 per cent. The gain of 3.7 per cent over August 31, 1925, reflects pro nounced increases in one of the large cities, as three-fifths of the firms were inventoried lower. Retail Furniture Trade— For forty-one retail dealers in this district, sales of furniture, furnishings, and equipment during August approximated the same aggregate volume as a year ago, while installment sales reported by eighteen fell off 8.2 per cent. Gains over July amounted to 0.3 per cent for installment sales at fifteen houses, and 9.1 per cent for total sales at thirty-seven. Total collections gained 6.6 per cent over July for thirteen stores, and receipts on installment accounts for eight firms 0.3 per cent; declines from last year amounted to 1.3 per cent in the former com parison, and 2.4 per cent in the latter. Accounts on the books of fourteen firms on August 31 were 1.8 per cent higher than on July 31 or a year ago. General reductions in stocks during August were offset by marked increases at a few stores, raising the total held on August 31 by twenty-three to 7.2 per cent above the July 31 inventories, and 5.4 per cent over a year ago. Retail Shoe Trade— The dollar volume of shoes sold during August by forty-four reporting retailers in this dis trict was within 4.3 per cent of the July sales, twenty deal ers registering gains and twenty-four declines. The increase of 7.0 per cent over August, 19'25, for forty-one dealers reflects individual gains for about half. Aggregate stocks held at thirty-four stores on August 31 were 7.7 per cent higher than at the close of July, only five firms making net reductions during the month. Accounts outstanding for nineteen firms on August 31 amounted to 82.9 per cent of the month’s sales, compared with 82.0, the corresponding July ratio. August collections were smaller than those of the preceding month. MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the month indicated, using the monthly average for 1919 as a base, unless othervvise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following month. Data refer to the Seventh Federal Reserve district unless otherwise noted.) No. of Aug. July Firms 1926 1926 Meat Packing— (U. S .)— Sales (in dollars)1........................ —........... 62 114.6 110.5 Casting Foundries— Shipments (in dollars)......................... .. 27 73.2 76.5 Stoves and Furnaces— Shipments (in dollars)............................. .. 14 99.3 68.5 Agricultural Machinery & Equipment— (U. S .)— 1 Domestic Sales (in dollars).................... .. 113 146.5 156.8 Exports (in dollars)............................... ... 72 181.3 126.0 Total Sales (in dollars).......................... . 113 154.1 153.6 Production ................................................ .. 109 137.0 136.5 Agricultural Pumps— (U. S .)— 1 Shipments (in dollars)........................... ... 19 125.0 120.2 Furniture— 2 Orders (in dollars).................................... 20 135.8 179.6 Shipments (in dollars)....... .................... .. 20 146.9 130.4 Shoes— 3 Production (in pairs)..... _...................... .. 34 113.2 89.0 Shipments (in pairs)......................... .... . 34 121.5 96.1 Electric Energy— Output of Plants (K W H ).................... .. 8 201.0 187.2 Industrial Sales (K W H ).......................... 8 269.2 242.7 Flour— Production (in bbls.)................................ 35 118.0 110.1 Output of Butter by Creameries— * Production ..... .................. ..................... .. 77 123.5 145.8 Sales ..................... ...................................... . 77 113.7 132.2 Automobiles— Distribution in Middle West— 1 New cars— Wholesale— Number sold..... 34 150.0 138.9 Value .............. 34 130.0 118.0 New cars— Retail— Number sold.. .. 52 99.4 112.9 Value .............. 52 105.0 99.1 New cars— On hand— Number ....... .. 45 79.1 73.6 Value ........... .. 45 73.2 69.7 Used cars— Number sold..... 43 133.3 150.7 Used cars— On hand— Number ........ . 43 112.7 116.9 Value ................ 43 94.8 89.6 Production (U. S.) : Passenger cars.... 280.7 233.9 Trucks ................ 175.2 153.1 Freight Carloadings— (U. S.)— Grain and Grain Products...................... 145.5 149.3 Live Stock ............... ................................ 89.4 84.5 Coal ......... .................................................. 117.5 112.8 Coke ............................................................ 126.7 127.3 Forest Products ..................................... 123.9 121.2 Ore ............. ............................................... 208.0 203.6 143.8 141.6 Merchandise and Miscellaneous.............. Total ................................................... .... 137.7 135.0 Iron and Steel— Pig Iron Production :4 156.6 162.4 Illinois and Indiana.............................. 123.2 124.1 United States ...................................... 136.6 124.5 Steel Ingot Production— (U. S .)4.......... 60.1 59.1 Unfilled Orders U. S. Steel Corp......... Aug. 1925 July 1925 113.2 114.1 72.7 73.7 90.1 69.5 127.2 147.2 131.1 109.7 140.7 136.8 139.9 106.6 124.5 117.0 146.1 148.6 168.2 121.6 103.1 110.0 85.7 91.3 171.8 222.9 167.8 212.7 110.7 110.5 127.3 111.7 142.9 132.9 191.0 185.2 95.9 107.1 69.6 63.1 110.7 86.6 79.7 160.0 140.7 172.7 149.8 109.4 98.5 68.2 59.8 131.1 79.1 72.3 258.4 154.8 140.9 92.0 121.0 108.0 125.1 167.6 140.7 134.5 117.3 84.4 108.1 103.8 121.9 177.7 138.6 129.4 123.4 104.1 116.8 58.6 126.4 102.6 105.3 59.0 No. of Aug. Firms 1926 Wholesale Trade— Net Sales (in dollars) : Groceries ................................................. 41 Hardware ... ........................................... 19 Dry Goods ............................................. 13 Drugs ..... ................................................. 14 Shoes ............... -...................................... 11 Retail Trade (Dept. Stores)— Net Sales (in dollars) : 7 Chicago ..... ......................... .................... 4 Detroit ..................................................... 4 Des Moines ........................................... 5 Indianapolis ........................................... 5 Milwaukee ............................................... 39 Outside ..................................................... Seventh District ................................... 64 Retail Trade— (U. S .)— Department Stores..................................... 359 4 Mail Order Houses................................... Chain Stores : Grocery ................................................... 27 9 Drug ....................................................... 6 Shoe ..................... - ................................. 5 Five and Ten Cent................................. 5 Candy ..................................................... 4 Music ....................................................... 5 Cigar ...... _............................................— Stamp Tax Collections— 5 Sales or Transfers of Capital Stock....... Sales of Produce on Exchange— Futures U. S. Primary Markets— 6 Grain Receipts : Oats ......................................................... Corn ......................................................... Wheat ..................................................... Grain Shipments : Oats ......................................................... Corn ......................................................... Wheat ..................................................... Building Construction— Contracts Awarded (in dollars) : Residential ............................................ Total ......................................................... Permits: Chicago - ...................................Number Cost..... Indianapolis ________ _______ Number Cost..... Des Moines ........................... Number Cost..... Detroit ..................................... Number Cost..... Milwaukee ............................... Number Cost..... Others (45) ........................... Number Cost..... Fifty Cities ............................. Number Cost..... July 1926 Aug. 1925 July 1925 76.3 101.7 84.5 95.1 44.9 77.1 102.0 72.1 97.0 33.7 69.9 100.5 95.9 103.7 45.8 75.5 107.3 78.0 95.8 33.0 107.9 151.6 103.1 109.6 120.0 95.4 120.3 115.0 136.3 98.9 105.3 118.1 87.5 113.3 111.1 130.6 100.0 106.6 114.2 95.1 112.5 116.0 114.2 89.4 107.7 117.2 82.1 104.9 105 98 99 98 98 89 95 87 295 195 122 204 194 121 148 333 198 145 206 210 108 155 243 171 120 195 202 128 142 259 166 122 183 181 104 136 254.9 57.3 201.7 48.6 124.6 59.0 136.6 83.6 126.0 77.0 224.9 47.9 89.4 248.0 263.4 117.9 139.6 85.6 65.1 132.8 49.5 60.0 110.8 59.2 68.9 91.0 100.2 62.2 85.3 95.4 70.2 74.3 252.7 233.3 217.0 194.1 206.3 143.8 168.8 126.0 223.0 391.8 258.3 242.9 115.7 134.2 216.3 208.5 199.6 186.0 234.6 248.6 221.5 277.7 291.1 292.3 235.4 232.2 103.9 146.8 227.9 235.1 198.7 238.8 224.0 219.0 223.6 247.4 258.5 357.7 262.3 154.4 172.5 73.0 206.4 223.6 208.3 160.0 225.0 164.9 221.7 239.4 280.7 328.2 257.5 214.0 199.0 121.3 226.0 271.1 202.5 180.9 225.9 198.4 227.0 256.7 3. Monthly average of mean of production and shipments in 1. Monthly average 1923-24-25 = 100; 2. Monthly average 1919-20-1 1=100; 1923-24-25=100; 4. Average daily production; 5. First Illinois interi il revenue district; 6. Monthly average receipts 1919=100. Page S
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