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Business Conditions
Seventh
FEDERAL
Reserve
C
Chairman of. the Board and
Federal Reserve Agent
Clifford S. Young, Asst. Federal Reserve Agent
DISTRICT
Eugene M. Stevens,
Volume 17, No. 11
MONTHLY REVIEW PUBLISHED BY THE
FEDERAL RESERVE BANK OF CHICAGO
General Summary
EVENTH district industry continued during Septem
S ber to follow, for-the most part, the declining trend
of recent months. Furthermore, the majority of reporting
merchandising groups showed less than seasonal gains in
trade for the month, and certain of them experienced
counter-to-seasonal declines in business. Despite the re
cessions recorded, data covering the first three quarters
of 1934 indicate a volume of manufacture and trade
aggregating well above that for the nine months of 1933.
In manufacturing phases, the iron and steel and auto
mobile industries, of the major groups, further reduced
activity in September, and operations at steel and malle
able casting foundries were lower than a month previous.
Building construction, on the other hand, showed some
improvement over the August volume, the increase being
the first since March. The movement of building mate
rials was slower, in accordance with seasonal trend. New
business and shipments of furniture manufacturers in
creased, as is usual for September. Further recessions
were recorded during the month in industrial employment
and payrolls, the decline in number of men employed
being greater than average for the period.
Commercial as well as total production of packing
house commodities gained in September over August as
did the aggregate value of sales. The manufacture and
distribution of butter and of Wisconsin cheese, however,
were smaller than a month previous. In general, the out
put of all these commodities exceeded that of the corre
sponding month last year. As in August, the September
movement of wheat and oats totaled less than average;
while that of corn was normal, though less than in the
preceding month. On October 1, little change was evident
in the crop situation, ample rains in September being of
doubtful benefit to this year’s crops.
Less than seasonal expansion was shown during Sep
tember by reporting groups of wholesale trade, and three
lines—groceries, drugs, and electrical supplies—experi
enced counter-to-seasonal recessions in business. Depart
ment store sales likewise recorded a smaller than average
gain over the preceding month, as did the retail furni
ture trade. The increase over August in the retail shoe
trade, however, was greater than usual for the month.
Chain store sales gained only slightly over a month pre
vious. In all phases mentioned, except chain store trade,
Asst. Federal Reserve Agent,
Detroit Branch
George A. Prugh, Asst. Federal Reserve Agent
John H. Martin,
Manager
Division of Research and Statistics
Harris G. Pitt,
October 31, 1934
the dollar volume of sales remained moderately heavier
than in the corresponding month of 1933.
Investment holdings and commercial loans of reporting
member banks in the Seventh district increased between
September 12 and October 17, while loans on securities
declined. Demand deposits in these banks rose and time
deposits fell off in this period. Credit extended by the
Federal Reserve Bank to the district decreased somewhat
in the five weeks. A further recession was recorded dur
ing September in new financing by means of bankers’
acceptances and in dealer sales of commercial paper.
Credit Conditions and Money Rates
A net outflow of more than 24million dollars to
other areas because of commercial and financial payments
reduced Seventh Federal Reserve district banking re
serves during the five-week period ended October 17.
Reserve bank credit extended within the Seventh district
also decreased 2million dollars. United States Treas
ury collections again exceeded local disbursements; the
excess, amounting to 17 millions, offset part of the de
crease in funds available to banks. Member bank reserve
balances showed a heavy decline—over 49 million dollars
—between September 12 and October 17, and demand
for currency increased 5% millions. Total credit ex
tended by this bank (total bills and securities and “float”)
amounted to $426,792,000 on October 17, as compared
with $429,293,000 on September 12. Changes in the
sources and uses of Seventh district banking reserves are
given in detail in the accompanying tabulation.
Changes between September 12 and October 17 in Factors Affecting
Use of Federal Reserve Bank Funds—Seventh District
(Amounts in thousands of dollars)
Reserve bank credit extended......................................................................
Commercial operations through inter-district settlements.................
Treasury and National bank currency......................................................
—2,667
—24,656
+718
Total supply......................................................................................
—26,605
Demand for currency......................................................................................
Member bank reserve balances....................................................................
Treasury cash and deposits at Federal Reserve Bank of Chicago...
Special and “all other” deposits..................................................................
Other Federal Reserve accounts..................................................................
+5,257
—49,610
+17,029
—167
+886
Total demand...................................................................................
—26,605
Member Bank Credit
Total loans and investments of reporting member banks
in the Seventh Federal Reserve district increased 68
million dollars on October 17 as compared with the ag-
gregate reported on September 12. The accompanying
tabulation shows that this increase represented a rise of
67 millions in investment holdings, 7 millions in “all
other” (commercial) loans, and a decline of 6 millions
in loans on securities. Net demand deposits of reporting
member banks rose by 41 million dollars, as against an
increase of 32 millions in the August 15-September 12
period, whereas the decline of 12 millions shown in time
deposits as of October 17 compared with September 12,
to a considerable extent offset the gain of 15 million dol
lars recorded on September 12 over August 15. Invest
ments as well as net demand deposits on October 17 this
year showed large increases over the corresponding aggre
gates a year ago; time deposits were also in somewhat
greater volume. Loans on securities, however, on October
17 were 117 millions less than on October 18, 1933, and
“all other” (commercial) loans fell short of the total on
the latter date by 46 millions.
The prevailing rate on customers’ commercial loans
reported by down-town Chicago banks for the week ended
October 15 was 1)4 to 5 per cent, compared with a range
of 1)4 to 6 per cent for the corresponding week in Sep
tember. The average rate earned on loans and discounts
during the calendar month of September by down-town
Chicago banks was 2.99 per cent—a slight rise from the
2.94 per cent in August; for September 1933, this item
was 3.30 per cent. Customers’ commercial loans in De
troit carried a prevailing rate of 3)4 to 6 per cent in the
week ended October 15, unchanged from the correspond
ing week in September.
Sales of commercial paper by dealers in the Middle
West fell off more than seasonally in September from
the preceding period and were below those of any other
month this year since February, being 19)4 per cent
smaller than in August and 51)4 per cent under the
1924-33 September average, though totaling 87)4 per
cent greater than a year ago. Borrowing by means of
commercial paper remained at the August level, but de
mand for this class of investment decreased from both
city and country banks. September selling rates ranged
from M per cent for prime short-term obligations to 1
and 1)4 per cent for paper less well known or of longer
maturity; the bulk of transactions continued to take
place at )4 to 1 per cent. Commercial paper outstandings
in the Middle West increased further during the month.
In spite of the unattractive yields still prevailing, sales
in the first half of October expanded 48)4 per cent over
the corresponding weeks of September and rates remained
within a range of J4 to 1)4 per cent.
Dealer purchases of local acceptances in the Chicago
bill market, though increasing very slightly over the
preceding period, were extremely limited in quantity from
September 13 to October 17, but receipts from Eastern
cities increased substantially, and in total volume were
the largest since the first of this year—January 10 to
FEDERAL RESERVE BANK OF CHICAGO, SELECTED ITEMS OF
CONDITION
(Amounts in millions of dollars)
Bills Discounted.
Bills Bought........
Oct. 17
1934
. *429.5
.
0
.
0.7
. 428.3
.1,062.9
. 686.0
. 775.0
Ratio of Total Reserves to Deposit and Fed
eral Reserve Note Liabilities Combined.. .
♦Number of Points.
Pagefor1 FRASER
Digitized
72.7%
Change
Sept. 12
1934
* -0.0
-0.5
+0.1
0
-69.9
-76.2
+2.7
-1.1'
From
Oct. 18
1933
$ -8.7
-5.8
-0.1
-3.3
+ 101,8
+ 111.8
+22.2
+0.3*
February 14—resulting in a large gain in total bill sup
plies during the five-week period. Open-market sales to
local banks expanded considerably in the five weeks and
were in the heaviest volume during the past year, while
those to out-of-town banks were the largest since the
four-week period of March 15 to April 11. Despite the
fact that shipments to Eastern markets were almost nil,
total distribution registered a heavy gain over that of a
month earlier. Holdings on October 17 were practically
negligible. Selling rates ranged from % to 3/16 per cent
during the period.
The utilization of bankers’ acceptance credits for new
financing decreased further during September in the Sev
enth Federal Reserve district, and was not only smaller
than for any preceding period since June 1927 but 58)4
per cent under the 1924-33 September average. The
direct discounting of these bills at the originating banks
also declined sharply from August. However, the expan
sion in buying of other banks’ bills over the extremely
limited volume of the preceding month was so marked
that total purchases rose to a level within 8 per cent of
the ten-year average for September. Sales were nil. More
over, purchases aggregated 60 per cent in excess of cur
rent maturities. Acceptance holdings of these banks,
therefore, showed a counter-to-seasonal accumulation on
September 30 over the end of August and were 118)4
per cent larger than the 1924-33 average for that date.
On the other hand, the liability of Seventh district banks
for outstanding acceptances was reduced to a point lower
than for any other corresponding date since July 30, 1927.
In the first half of October, new financing by means of
bankers’ acceptances declined 31)4 per cent from the
corresponding weeks of September.
„
*
TRANSACTIONS IN BANKERS’ ACCEPTANCES AS REPORTED BY
A SELECTED LIST OF ACCEPTING BANKS IN THE
SEVENTH DISTRICT
Per Cent Change in September 1934 From
August 1934
September 1933
Total value of bills accepted.................
Purchases (including own bills discounted)
Sales..............................................................
Holdings*............................................................
Liability for outstandings*............................
—41.6
+93.2
-100.0
+24.1
—14.4
—63.2
—34.7
-100.0
—42.5
—42.0
♦At end of month.
Security Markets
Activity remained at reduced levels during September
in the Chicago bond market, with demand continuing to
favor the higher grade issues. Prices declined in the early
part of the month and in some instances touched a low
point since February; toward the latter part of Septem
ber, however, prices in both the municipal and corpora
tion fields recovered substantially. The trend in United
States Government obligations was similar to that shown
by domestic bonds: after remaining soft during most of
the month, prices firmed considerably and registered
slight increases in the early part of October. Institutions
continued to be the heavy purchasers of bonds during
September, although individual inquiries were reported
as increasing. Prices on the Chicago Stock Exchange have
shown a gradual upward trend since the middle of SepCONDITION OF LICENSED REPORTING MEMBER BANKS
SEVENTH DISTRICT
(Amounts in millions of dollars)
Oct. 17
Change From
Sept. 12
Oct. 18
.
1,220
1934
* +68
-6
+7
+67
Net'Demand Deposits.................................... .
Time Deposits................................................... .
1,733
490
+41
-12
+518
+26
Borrowings trom Federal Reserve Bank. . .
0
0
0
Total Loans and Investments......................
Loans on Securities..........................................
All Other Loans................................................
Investments........................................................
.
.
.
1934
*1,929
287
422
1933
*+419
-117
-46
+582
*
,
tember. The average price of twenty leading stocks*
amounted to $27.44 on October IS, as compared with
$25.68 on September 15.
•Chicago Journal of Commerce.
Agricultural Products
The general situation as regards crop production in
this district, as well as for the country as a whole, con
tinued in September to be similar to that reported in the
preceding two months. Expectations regarding serious
drouth damage were confirmed and even intensified in
some cases, as revealed in the Government’s October 1
crop report. The estimate for corn recorded the third
successive monthly reduction, and represented a decline
of more than 30 per cent since the July 1 estimate, both
for the district and for the United States. In addition,
the portion of the total corn crop which will be husked
for grain is extremely low, being estimated at barely half
the quantity husked last year, as distinguished from the
total production which includes the grain equivalent of
corn used as silage and forage. The low grain return is
due to the poor condition of the crop and to insect pests
and ear-mold. White potatoes again improved, and the
district estimate is 16 million bushels larger than last
year and even slightly above the five-year average. White
and sweet potatoes are the only major crops which prom
ise normal production in this district.
September rainfall averaged above normal in all states
of the Seventh district—for the second month in Illinois
and Indiana—and while important for pastures and soil
preparation for next season, was of doubtful benefit to
this year’s production. Grass and growing crops were
remarkably improved, but maturing crops suffered. Cut
hay was damaged and much hay could not be cut at the
proper time. Considerable areas are still awaiting relief
from the drouth, such as southwest Iowa where pastures
are still dormant or dead and the soil is too dry for culti
vation. Elsewhere field work progressed well in Septem
ber and considerable fall wheat and rye was up by the
end of the month.
Despite the low condition of pastures and shortage of
feed, shipments of Stocker and feeder cattle into corn
belt states during the summer (July through September)
were estimated by the Government to be 18 per cent
greater than the five-year average movement for the
period. As the shipments were concentrated in areas
least affected by the drouth, considerable congestion has
resulted and pastures are reported overtaxed, despite
marked improvement from the September rains.
Grain Marketing
The September movement of grains at primary markets
was normal in the case of corn, but below average for
wheat and oats. Receipts of all grains declined from the
preceding month and were lower than a year earlier,
while reshipments of wheat and oats made counter-toseasonal gains over the low quantities of August. Corn
shipments, however, receded from the previous high level.
VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT
(Amounts in millions of dollars)
Sept. 1934
. $2,078
i.
779
Per Cent op Increase
or Decrease From
Aug. 1934
Sept. 1933
-4.3
+2.5
-10.2
+13.8
.
.
$2,857
476
-5.9
-5.7
+ 15.2
Total 38 centers..........................................
$3,333
-5.9
+6.6
34 smaller centers.
+5.3
Visible supplies changed only moderately in September
and early October: wheat and oats declined somewhat,
while barley recorded an increase and corn and rye re
mained practically unchanged. On October 13, declines
from a year previous ranged between 2 per cent for corn
and 53 per cent in the case of oats. Farm stocks of grains
on October 1, as estimated by the Department of Agri
culture, were also lower than a year ago—by 24 per cent
for wheat, 16 per cent for corn, and 23 per cent for oats.
Wheat future quotations continued above one dollar a
bushel during September, and after sagging in early Octo
ber recorded some strength around the middle of the
month; cash prices maintained a considerable premium
over futures throughout the period. Corn and oats prices
were somewhat stronger than those of wheat and averaged
higher than in August.
Movement
of
Live Stock
Though declining somewhat from the peak attained in
the preceding month, September marketings of cattle and
calves in the United States aggregated approximately 80
per cent heavier than the 1924-33 September average and
were more than double those of a year ago. Activities of
the Federal Surplus Relief Corporation were extended
during the month to the lamb industry. However, re
ceipts of lambs at public stock yards in the United States
showed no more than a seasonal expansion over August
and had been exceeded in a number of months since
January 1931. Hog marketings rose V/2 per cent in Sep
tember over the record low level which obtained a month
earlier. The movement of animals to inspected slaughter
(inclusive of those that did not pass through public stock
yards) diverged from the trend of market receipts in sev
eral instances: the supply of cattle and calves was more
than 115 per cent in excess of the 1924-33 September
average, that of cattle was the largest in this bank’s rec
ords (January 1921), and the number of hogs decreased
\y2 per cent from August but remained in excess of the
supply shown in several other low months during the
past twelve years.
Reshipments of both cattle and calves to feed lots
CROP PRODUCTION
Estimated by the United States Bureau of Agricultural Economics on the basis
of October 1 condition.
(In thousands of bushels unless otherwise specified)
Seventh District
Forecast
Final
Forecast
1934
1933
1934
Corn.................... 505,200
835,127
1,416,772
Oats..................... 198,213
314,089
545,938
Winter Wheat.. 46,973
44,426
400,522
Spring Wheat...
1,734
2,316
96,460
Barley....... 29.850(a)
35.401(a) 122,240
Rye............
5.842(a)
5.629(a)
17,261
Buckwheat.........
810(a)
803(a)
7.452
Flaxseed...
219(b)
236(b)
5,228
Potatoes (White) 56,135
39,752
362,391
Potatoes (Sweet)
1.215(c)
1.070(c)
65,632
Sugar Beets1----1.225(d)
1.203(d)
7,551
Apples....... 11.518(a)
15.033(a) 115,260
Peaches.....
1.196(e)
1.965(e)
45,404
Pears..........
1.582(e)
1.010(e)
23,321
Cranberries*___
58(f)
47(f)
467
Grapes1......
74(a)
74(a)
1,699
Dry Beans*____ 2.602(d)
3.539(d)
9,449
Tobacco4............ 14,592
17,814
1,091,764
All Tame Hay*.
9,627
13,289
52,441
Wild Hay1...........
445(a)
575(a)
5,287
Broom Com1...
12(g)
6(g)
30
Onions.......
4.818(a)
4.860(a)
22,763
Celery5.......
1.491(h)
1.726(h)
8,210
Cucumbers........
92 (i)
65(i)
3,252
Cabbage1 ...........
270(a)
131(a)
1,196
Canning Crops:
Sweet Corn1..
Tomatoes1.. .
226(a)
400(e)
166(a)
268(e)
482
1,403
United States
Final
1933
2,343,883
731,524
351,608
176,370
156,988
21,236
7,832
6,806
320,353
65,073
11,030
142,981
44,692
21,192
705
1,910
12,280
1,385,107
65,983
8,633
32
21,553
8,624
2,894
724
396
1,078
Average
1927-31
2,516,307
1,186,956
632,061
254,298
270,444
40,950
9,496
18,664
365,556
62,386
7,854
156,303
56,282
22,334
563
2,277
11,594
1,470,556
72,250
11,368
47
*23,789
*9,345
*4,607
*1,010
*625
*1,293
*In thousands of tons. *In thousands of barrels. *In thousands of 100-lb.
bags. 4In thousands of pounds. 5In thousands of crates, (a) Five states
Including the Seventh Federal Reserve district, (b) Iowa and Wisconsin,
(c) Illinois, Indiana, and Iowa, (d) Michigan and Wisconsin, (e) Illinois
Indiana, Iowa, and Michigan, (f) Wisconsin, (g) Illinois, (h) Indiana and
Michigan, (i) Illinois and Michigan. *1928-32 average.
Page 3
slowed down from August but were at least 40 per cent
above the 1929-33 average for September.
Meat Packing
The commercial production of packing-house com
modities at slaughtering establishments in the United
States increased 3 per cent in September over August to
a level 4y2 per cent above the 1924-33 average for the
month and within 2l/2 per cent of a year ago. Further
more, total production—which includes the beef, veal,
and lamb processed by the Government, in addition to
the regular market tonnage—exceeded this ten-year av
erage by 31J4 per cent, having expanded 4per cent
over August and 14J/2 per cent over last September.
Despite a downward trend since early September, prices
averaged higher than a month earlier and continued
above last year, though considerably below the seasonal
level. The total value of sales billed to domestic and for
eign customers rose 2 per cent in September over August,
and was 23 per cent greater than in September 1933 but
24 per cent smaller than the 1924-33 average for the
period. The tonnage sold, however, declined Al/2 per
cent from the preceding month, 19 per cent from last
September, 9 per cent from the 1924-33 September aver
age, and also failed to show as large an excess over cur
rent production as is customary at this season. Commer
cial inventories, therefore, fell off less than the usual
amount from September 1 and were 101,000,000 pounds
heavier than the 1929-33 October 1 average. It is esti
mated that the Federal Surplus Relief holdings were very
large and that total inventories of packing-house com
modities in the United States considerably exceeded both
the 1929-33 average for September and a year ago. Pay
rolls for the close of September continued to reflect a
marked improvement over last year and showed a gain
over August of approximately 6y2 per cent each in em
ployes, hours worked, and wage payments.
Shipments for export decreased moderately in Septem
ber from August and consisted largely of lard forwarded
to the United Kingdom. No resumption of importations
from the United States had been permitted by Germany.
Furthermore, the demand for American lard remained
negligible on the Continent and showed some decline in
the United Kingdom. The bulk of the meat trade was
still confined to moderate purchases of hams by British
importers. Quotations for United States lard were held
near to Chicago parity in the United Kingdom and con
tinued at a premium on the Continent. Prices of Ameri
can hams eased in English markets. Inventories abroad
(inclusive of the stocks in transit) were somewhat heavier
on October 1 than at the beginning of September.
Dairy Products
Creamery butter production in the Seventh Federal
Reserve district decreased 12 per cent in September from
a month earlier but aggregated 13 per cent heavier than
a year ago and \2l/2 per cent in excess of the 1924-33
early autumn average. The sales tonnage declined 14y2
per cent from August, although it remained 2 per cent
above the seasonal level and was 4 per cent larger than
last September. Manufacture of the commodity in the
United States also fell off less than seasonally from the
preceding month but was 7 per cent under a year ago.
Moreover, demand failed to prevent a non-seasonal ac
cumulation in holdings, though prices were lowered 5]/2
per cent from August. Total inventories of creamery but
ter in the United States, therefore, rose to a point on
October 1 only 2,063,000 pounds below the 1929-33
average for that date.
The manufacture of American cheese in Wisconsin
was reduced 10 per cent in the four weeks ended Septem
ber 29 from the preceding period, although it remained
10y2 per cent above the 1924-33 seasonal level and ex
ceeded that of a year ago by 12 per cent. Distribution
of the commodity from primary markets of that state
not only decreased more than the usual amount from
August and was 9 per cent below the ten-year average,
but aggregated 19J4 per cent less than current produc
tion. Despite some easing in prices, total inventories of
cheese in the United States showed a further rise of
4,981,000 pounds on October 1 to a level 27,536,000
pounds above the 1929-33 October 1 average.
(In thousands)
Cattle
Yards in Seventh District,
September 1934......................... ...
Federally Inspected Slaughter,
United States
September 1934......................... . . .
.. .
September 1933......................... ...
359
1,786
1,576
821
Hogs
Decreases of 1J4 per cent in employment and 3 >4 per
cent in payrolls were reported by Seventh district industries for the period August 15 to September 15. Industries
included in the reports were represented by 5,799 estab
lishments with an employment of nearly one million
workers and 20 million dollars in weekly wage payments.
The recessions were larger than seasonal in employment
but only slightly in excess of the 1925-33 average decline
in payrolls for the period. This average, however, was
affected by the August to September losses in 1931 and
1932, which greatly exceeded the corresponding decline
in any other year on record.
The current trend was the effect mainly of reductions
in the metals and vehicles groups, which amounted, re
spectively, to 2>y2 and &l/> per cent in employment and
EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE
DISTRICT
Industrial Group
Firms
No.
Lambs and
Calves
Sheep
407
1,734
1,523
1,609
2,601
2,641
3,038*
148
831
970
405
(Per hundred pounds at Chicago)
Native Beef Steers (average) . .
Fat Cows and Heifers................
Hogs (bulk of sales)....................
Yearling Sheep.............................
Lambs.............................................
Page 4
Sept.
1934
$8.00
5.35
7.10
6.85
5.50
6.15
Months op
Aug.
1934
$7.20
4.95
6.10
5.85
5.75
6.50
Sept.
1933
$5.70
4.30
6.65
4.25
5.35
6.65
Sept. 15, 1934
Wage
Earners
No.
Earnings
(000
Omitted)
Change From
Aug. 15, 1934
Wage
Earn Earn
ers
ings
%
%
-3.6
-7.3
-9.3
+3.8
+5.7
-3.7
+2.6
3,993
5,474
735
2,370
198
448
471
346
97
1,479
+3.0
+8.7
-0.7
+2.0
+1.3
—4.5
-0.8
-0.8
-9.0
-27.0
-0.5
Paper and Printing.............
561
Total Mfg., 10 Groups----
3,773
754,331
15,611
-2.6
-4.8
Merchandising*....................
Public Utilities....................
82,403
83,175
3,807
11,699
1,634
2,400
78
234
+6.5
-0.3
+6.0
—0.6
+4.5
—2.6
Construction........................
1,627
77
15
305
+2/. 6
—3.8
Total Non-Mfg,, 4 Groups.
2,024
181,084
4,346
+2.8
+0.4
5,799
935,415
19,957
-1.6
-3.7
Stone, Clay, and Glass---Chemical Products.............
1,267
222
288
615
163
394
153
104
8
AVERAGE PRICES OF LIVE STOCK
of
206,218
237,779
43,412
115,460
10,473
29,944
20,938
20,469
6,319
63,319
Metals and Products1. . . .
♦Exclusive of 5,321,475 slaughtered for the A. A. A.
Week Ended
Oct. 20
1934
.... $7.65
___
5.10
....
6.00
___
5.55
___
5.25
___
6.00
Report
ing
531
«
>
Industrial Employment Conditions
Week
LIVE STOCK SLAUGHTER
^
Total, 14 Groups.................
Other than Vehicles. ’Michigan and Wisconsin.
-8.6
+0.5
’Illinois and W itLonsin.
'
<
•
7 and 9 per cent in payrolls. Other industrial groups,
however, contributed a considerable share of the decline,
especially in payrolls. Rubber products, represented by
a small number of firms, showed a decrease in this item
of 27 per cent, leather products 9 per cent, stone, clay
and glass 3)4 per cent, and paper and printing one-half
per cent. A substantial amount of these losses in manu
facturing industries was offset by continued increases in
the textiles and food products groups, employment in the
latter showing the effects of the Federal Surplus Relief
operations. Wood products and chemical industries also
recorded further gains over the preceding month both in
employment and payrolls.
Non-manufacturing groups, combined, showed gains of
3 per cent in employment and one-half per cent in pay
rolls, to some extent counteracting the losses in the
manufacturing groups. Merchandising concerns increased
employment 6)4 and payrolls 4)4 per cent, which gains
were considerably in excess of seasonal expectations. Coal
mining recorded a further expansion, usual at this sea
son. The construction and public utility industry groups
had only minor losses in employment but reduced pay
rolls 4 and 2)4 per cent, respectively.
Manufacturing
Automobile Production
,
'
and
Distribution
September output of passenger automobiles by Ameri
can manufacturers numbered 123,909, representing a
drop of 32)4 per cent from August and comparing with
157,367 in September a year ago. Truck production
amounted to 44,963 vehicles in September, or 12 per
cent less than a month previous but 31 per cent above
the volume of last September. Despite a steadily declin
ing rate of output since April, passenger car production
in the first three quarters of 1934 exceeded the annual
total for either of the years 1932 or 1933 and almost
equaled that for 1931. Truck manufacture in the nine
months this year was greater than annual production in
any of these years.
Distribution of automobiles in this district continued
to diminish in September, sales to dealers and to users
falling considerably below those of August. Although
sales at retail were moderately under those of a year ago,
the decline was not so great as shown in the yearly com
parison for August, while the number of cars sold by
distributors this September was only fractionally smaller
than in the same month of 1933 and the aggregate value
of these sales increased. For the fourth successive month
dealers’ stocks of new cars were reduced; consequently,
they exceeded those of a year ago by only 18 per cent in
number, whereas at the beginning of the decline in June,
they were almost double those of last year. Used car
sales decreased from the preceding month to a somewhat
lesser extent than did new car sales at retail, while the
decline from September 1933 was the same; stocks again
expanded over a month previous. Deferred payment sales
in September amounted to 47 per cent of the total retail
sales of dealers reporting the item, as compared with a
ratio of 51 per cent in August and of 47)4 per cent for
last September.
Iron
and
Steel Products
Activity in the Chicago district steel industry was even
less in September than in August, but the early part of
October showed some improvement in new business. Steel
ingot output which averaged only 22 per cent of capacity
in the middle of September, rose thereafter and for the
following three weeks was maintained at around 26 per
cent of capacity, though dropping to 24 per cent in the
second week of October. Despite a lower rate of opera
tions in recent months than last year at the same time,
total business for the year to date is well above that for
the corresponding period of 1933. Pig iron production
for September in the Illinois and Indiana district was
smaller in the daily average than for any other month
this year. Following a steady decline in iron and steel
scrap prices beginning the last of August, quotations rose
in the first part of October. No other price changes of
note have occurred.
Steel casting foundries of the Seventh district con
tinued to experience diminishing business in September,
orders falling 8 per cent, production 29 per cent, and
shipments 35 per cent below the volumes reported for
August. Orders booked were under the level of a year
ago for the first time since February 1933, while pro
duction and shipments continued larger in this compari
son by 31 and 58 per cent, respectively. Activity at
malleable casting foundries, after marked expansion dur
ing August, again showed a contraction in September,
decreases amounting to 17 per cent in orders, 12 per cent
in shipments, and 11 per cent in production. All of these
items were slightly below the corresponding volumes of a
year ago.
The manufacture of stoves and furnaces continued sea
sonally active in September, molding-room operations
showing a further expansion of 52 per cent, while the
value of orders accepted and shipments increased 55 and
41 per cent, respectively, over August. Operations were
still slightly below those of last year, orders were practi
cally the same, and shipments larger. Inventories in
creased 13 per cent during the month and totaled 44 per
cent heavier than at the same time in 1933.
lumber and building materials trade
MIDWEST
distribution of automobiles
Changes In September 1934 From Previous Months
Class
of
Trade
Percent Change From
Aug. 1934
Sept. 1933
Included
Wholesale—
Number Sold................................
Value..............................................
Retail—
Number Sold...............................
Value..............................................
On Hand September 29—
Number.........................................
Value..............................................
Used Cars
Number Sold...............................
Salable on Hand—
Number.........................................
Value..............................................
-21.7
-28.8
-0.1
22
22
-19.5
-10.7
-15.3
-7.7
58
58
-14.6
-18.4
+ 18.0
+27.8
58
58
-14.8
-15.3
58
+6.7
+5.7
+6.8
+24.3
58
58
+13.8
Aug. 1934
Sept. 1933
-2.8
-11.4
+3.6
+16.3
+7.0
+8.3
-0.2
-4.2
-13.6
-0.3
+20.5
+25.2
-0.9
-3.7
Number of
Firms or
Yards
Wholesale Lumber:
Sales in Dollars...............................
Sales in Board Feet........................
Accounts Outstanding1............... .
New Cars
Sept. 1934: Per Cent
Change From
Retail Building Materials:
Total Sales in Dollars...................
Lumber Sales in Dollars...............
Lumber Sales in Board Feet....
Accounts Outstanding1.................
12
10
12
*i
171
56
168
Ratio of Accounts Outstanding1
to total dollar sales during month
Wholesale Trade.................................
Retail Trade.........................................
'End of Month.
Sept. 1934
Aug. 1934
Sept. 1933
192.1
304.0
180.2
303.4
206.2
381.5
Page 5
Furniture
In line with seasonal trend, orders booked by furniture
manufacturers reporting to this bank gained 5 per cent
in September over August, and shipments were 14 per
cent heavier in the comparison. Owing to the greater in
crease in shipments than in orders, the slight advantage
of August orders over shipments was reversed in the cur
rent month, shipments exceeding new orders for the first
time since June. A large increase in cancellations—40
per cent—further contributed to a decline in unfilled
orders, the volume outstanding at the close of September
showing a drop of 10 per cent from a month previous
and falling 12 points in the ratio to current orders. As
compared with a year ago, orders booked and shipments
registered declines for the fifth and the fourth successive
months, respectively, that in orders amounting to 8 per
cent in the current month and in shipments to 2 per cent.
The rate of operations approximated 63 per cent of
capacity in September, a gain over August of 8 points,
though 4 points under the ratio maintained in Septem
ber 1933.
Shoe Manufacturing, Tanning,
and
Hides
Preliminary reports for September on shoe manufactur
ing in the Seventh district indicate a counter-seasonal loss
in activity, operations decreasing 16 per cent from the pre
ceding month. Production in August, according to the
latest available figures, exceeded that of July by 25 per
cent and came within 4 per cent of the August 1933 vol
ume which was the highest on record since 1929. Despite
a lag in production for several months past in the yearago comparison, output from January 1 to September 1
this year shows an increase of 8 per cent over the same
months of 1933. In the tanning industry, production
and sales of leather fell below those of August, as did
tanners’ purchases of green hides. Trading in packer
green hides in the Chicago market was less extensive than
a month earlier, while price quotations increased one-half
cent on a majority of items and as much as \l/2 cents on
certain selections.
Building Materials, Construction Work
The September trend of operations was moderately
downward in all lines of building materials covered by
this survey, although in most of them the recession was
seasonal. However, reporting retailers experienced a frac
tional loss from August in dollar sales of all materials,
which compares favorably with the 9 per cent decline
recorded in September 1933 but contrasts with a 10 per
cent gain for the period in the average of the preceding
five years. The increase from a year earlier, on the other
hand, was the highest recorded since May. Lumber sales
at these yards declined more sharply than the aggregate
of all items sold. Accounts outstanding were lowered
only fractionally and the accounts-to-dollar sales ratio
remained constant at practically the end of August level.
Wholesale lumber dealers also reported lower sales than
in August, the decline, however, being less than the fiveyear average loss for the month. Gains over a year ago
compared favorably with those recorded in August. Ship
ments of cement from midwest mills during the third
quarter of 1934 fell below the corresponding period of
last year, after having recorded a gain in this comparison
in each of the first six months of this year.
Building Construction
Building activity during September in the Seventh
Federal Reserve district showed the first monthly increase
since March. Total contracts awarded in the month
amounted to over 20 million dollars as compared with
only 15^4 millions for August. The highest dollar vol
ume for any month this year was 27J4 million dollars
recorded in January. Residential awards increased mod
erately in September over the preceding period, though
amounting to only 12 per cent of the total volume.
Period
September 1934................................................
Change from August 1934......................
Change from September 1933...............
Groceries..............
Hardware.............
Dry Goods..........
Drugs....................
Electrical
Supplies............
Stocks
Collec
tions
ing to
Net Sales
+8.3
+18.8
+23.3
+7.7
+5.9
+ 15.4
+31.3
+5.7
-5.1
+0.7
-6.8
-12.4
+13.2
+20.5
+11.9
+2.7
97.5
209.7
212.3
181.8
+9.0
+6.8
-0.8
+15.4
195.2
DigitizedPage
for FRASER
6
Residential
Contracts
S 20.098,176
+28%
+3%
$191,127,031
+85%
$ 2,333,589
+20%
-35%
$21,084,541
+20%
Building permits issued during September in 102 cities
of the Seventh district registered declines of 11 and 8
per cent, respectively, from the preceding month and
September 1933. The decrease in the comparison with a
year ago in the estimated cost of proposed construction
is the first to be recorded since November last year. The
number of permits issued in these cities increased 2 per
cent over the preceding month and 21 per cent over a
year ago. The estimated cost of proposed work in
Chicago gained 24 per cent over August, while the other
four large cities—Detroit, Milwaukee, Indianapolis, and
Des Moines—followed the district trend. As compared
with a year ago, Detroit recorded an increase of 5 per
cent in dollar volume of permits and Milwaukee one of
42 per cent, the other three cities registering declines.
“
Merchandising
Reporting groups of wholesale trade in the Seventh
district experienced less than seasonal expansion in busi- *
ness during September or contrary-to-seasonal declines.
Hardware sales increased only 3 per cent over the pre
ceding month and dry goods 4 per cent, as against gains
shown in the 1924-33 September average of 10 and 21
per cent, respectively. Grocery sales totaled 3 per cent
less than in August, drug sales 2 per cent, and electrical
supply sales 4 per cent smaller, whereas in the September
average, increases of 5, 4, and 3 per cent were recorded.
All lines had heavier sales this September than a year
ago when trends for the month likewise were unfavorable, ,
although for the majority the gains were smaller than in
DEPARTMENT STORE TRADE IN SEPTEMBER 1934
Ratio of
Accts.
Outstand
Accts.
OUTSTAND.
Total
Contracts
Change from same period 1933.............
♦Data furnished by F. W. Dodge Corporation.
Locality
Net
Sales
„
BUILDING CONTRACTS AWARDED*
SEVENTH FEDERAL RESERVE DISTRICT
WHOLESALE TRADE IN SEPTEMBER 1934
Per Cent Change
From Same Month Last Year
*
Per Cent
Change
Sept. 1934 From
Sept. 1933
Net
Sales
Stocks
End of
Month
Chicago................
Detroit..................
Indianapolis........
Milwaukee...........
Other Cities.........
+8.2
+8.7
+ 14.6
+4.7
+ 11.8
7th District.........
+8.9
Per Cent Change
First Nine
Months 1934
From Same
Period 1933
Ratio of Sept.
Collections to
Accounts
Outstanding
End of Aug.
Net Sales
1934
1933
-9.8
-2.2
-5.8
-3.8
-3.3
+12.2
+32.7
+15.4
+ 12.4
+26.8
32.7
41.2
36.7
34.5
29.3
29.1
33.3
34.0
30.0
26.7
-6.5
+ 18.5
34.5
30.1
a similar comparison for August. Data covering the first
three quarters of 1934 show sales gains over the same
nine months of 1933 of IS per cent in groceries, 20 per
cent in drugs, 27 per cent in dry goods, 33 per cent in
hardware, and 46 per cent in electrical supplies. Ratios
of accounts outstanding to net sales for September were
higher than for August in groceries, hardware, and dry
goods, lower for drugs, and about the same for electrical
supplies; in all groups except the last-named they re
mained below those of a year ago.
Although Seventh district department store trade
gained somewhat less than seasonally in September over
a month previous, the increase equaled that for the month
last year, and the gain of 9 per cent shown over last Sep
tember compared with one of but 6 per cent in the yearly
comparison for August. Furthermore, daily average sales,
based on the number of trading days in the period, in
creased 35 per cent in the monthly and 13 per cent in
the year-ago comparison. Among the larger cities, De
troit, Indianapolis, and Milwaukee stores, with respective
gains of 42, 36, and 21 per cent, showed better expansion
in sales oyer the preceding month than did Chicago firms
with an increase of 14^2 per cent; aggregate sales of
reporting stores in smaller centers were 9 per cent above
those in August. With the exception of Detroit, the larger
cities as well as smaller centers recorded a wider margin
of gain in trade over a year ago than was shown in
August. Although stocks expanded during September, in
accordance with seasonal trend, they totaled 6T
/2 per cent
smaller at the end of September than on the same date
in 1933, the decline being the first shown from a year
ago since July 1933.
For the second successive month, the expansion in the
retail shoe trade was much greater than usual for the
period. September sales of reporting dealers and depart
ment stores exceeded those of the preceding month by
60V*. per cent, whereas the 1925-33 average for Septem
ber shows a gain of 49 per cent. However, sales totaled
only 5 per cent larger than for last September when an
even heavier increase was recorded in sales. In the nine
months of this year, the dollar volume sold was 17 per
cent in excess of the first three quarters of 1933.
The retail furniture trade in September increased by
less than the average percentage over August, sales of
dealers and department stores being 35 per cent larger
than a month previous as against an average expansion
of 39 per cent. A gain of 15J4 per cent was shown over
last September, as compared with an increase of less than
one per cent in the yearly comparison for August. In
stallment sales by dealers declined one per cent from the
preceding month and were but 6 per cent greater than a
year ago.
■Aggregate September sales of thirteen reporting chains
exceeded those of August by \l/2 per cent, though de
clining 2 per cent from the corresponding month of 1933.
Five-and-ten-cent store, grocery, cigar, shoe, and musical
instrument chains were responsible for the gain over the
preceding month, sales of drug and men’s clothing chains
being less than a month previous, while in the yearly
comparison, five-and-ten-cent stores, grocery, men’s cloth
ing, and musical instrument chains effected the decline
recorded, drug, cigar, and shoe chains reporting increases.
MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO
otherwise indicated? 'where figure^for°ateLUmonthdshown0arepartly esthnat«1
{“"I8 the mon.th,J average (or 1923-1924-1925 as a base, unless
month. Data refer to the Seventh Federal Reserve district unless otherwise noted ) baSIS °f returns r«ehred to date, revisions will be given the following
__
_
.
Meat Packing—(U. S.)—
No. of
Firms
Sept.
1934
Aug.
1934
July
1934
June
1934
May
1934
Apr.
1934
62
Sept.
1933
Aug.
1933
July
1933
June
1933
May
1933
77
75
68
69
68
62
63
58
60
56
56
48
12
12
21
21
29
31
24
35
42
46
27
40
40
44
25
36
41
44
32
48
44
47
41
62
31
31
38
58
19
19
24
38
21
23
24
41
21
25
21
36
18
19
21
37
12
13
16
29
10
10
12
22
10
120
85
64
84
102
78
108
91
63
58
54
14
14
44
39
45
37
37
41
27
20
25
29
33
25
23
42
47
47
43
62
30
30
28
32
27
24
23
Sales (in dollars)......................................
Casting Foundries—
Shipments:
Steel—In Dollars.................................
In Tons.....................................
Malleable—In Dollars.......................
In Tons............................
Stoves and Furnaces—
Shipments (in dollars)............................
Furniture—
Orders (in dollars)...................................
Shipments (In dollars)............................
Flour—
Production (in bbls.)...............................
21
113
109
86
98
101
92
93
93
98
120
108
67
69
114
112
100
127
116
126
110
128
113
120
114
85
90
99
96
122
116
123
106
139
132
135
113
94
87
28
11
9
13
76
58
50
65
78
57
48
66
67
53
31
56
83
60
38
61
76
70
44
66
64
60
40
64
70
50
41
61
68
49
34
61
67
47
44
52
70
61
39
58
63
54
34
54
55
39
26
49
25
5
4
5
43
82
82
74
98
96
76
67
79
76
65
69
70
63
62
65
82
51
50
51
52
45
50
69
71
85
71
68
64
72
73
72
93
81
74
75
77
76
64
91
78
82
65
72
72
68
87
83
73
60
72
70
64
57
69
65
57
62
78
48
41
49
52
40
46
64
66
66
65
63
58
64
66
64
74
73
68
60
66
65
58
65
70
70
57
61
58
42
119
63
136
77
113
90
123
94
154
99
174
54
91
65
110
65
101
71
112
62
90
51
71
8
29
7
23
7
28
9
30
13
32
10
36
12
29
7
22
9
27
8
19
10
15
5
10
34
31
38
42
35
38
45
40
44
66
66
87
68
67
93
54
59
87
42
52
66
52
60
80
59
59
95
45
43
74
31
29
55
18
21
40
Output of Butter by Creameries—
Production.................................................
Sales.............................................................
Wholesale Trade—
Net Sales (in dollars):
Groceries.................................................
Hardware...............................................
Dry Goods..........................................."
Drugs.......................................................
Retail Trade (Dept. Stores)—
Net Sales (in dollars):
Chicago...................................................
Detroit....................................................
Indianapolis...........................................
Milwaukee.............................................
Other Cities...........................................
Seventh District—Unadjusted ... 1
Adjusted.............
Automobile Production—(U. S.)—
Passenger Cars..........................................
Trucks.........................................................
Building Construction—
Contracts Awarded (in dollars):
Residential.............................................
Total.......................................................
Iron and Steel—
Pig Iron Production:*
Illinois and Indiana............................
United States........................................
Steel Ingot Production—(U. S.)*. .. .
♦Average daily production.
Apr.
1933
Page 7
NATIONAL SUMMARY OF BUSINESS CONDITIONS
INDUSTRIAL PRODUCTION
(By the Federal Reserve Board)
OLUME of industrial production remained unchanged in September when
there is usually a seasonal increase, and factory employment and payrolls
declined An important factor in the decrease was the strike in the textile industry.
Retail trade in rural districts showed a large increase, and sales at department
stores in cities also increased, though somewhat less than seasonally. Deposits at
banks and commercial loans continued to increase.
V
Production and Employment
Index number of industrial production, adjusted for
seasonal variation (1923-1925 average — 100).
120
FACT0RY EMPL0YN ENT AND PAYROLL s
110
100
90
00
70
60
-N
A
Employment
---------- V /V\
V
\
Ay
fbyrolls
\a
50
VN
’j± / ^
J
V
40
30
1933
1934
Indexes of United States Bureau of. Labor Statistics;
without adjustment for seasonal variation (1923-19/! 3
average = 100).
WHOLESALE PRICES
Volume of industrial production, as measured by the Board’s seasonally ad
justed index, declined from 73 per cent of the 1923-1925 average in August to 71
per cent in September. There were substantial declines in activity at cotton and
woolen mills, reflecting the influence of the textile strike, and in the output of
shoes, automobiles, and lumber. After the termination of the strike, textile pro
duction increased. Steel mill operations, which had declined sharply during the
summer, have been at a higher level in recent weeks than in the early part of
September Production of beef and lamb increased further in September, reflecting
in part the disposal of animals bought in the drouth areas by the Federal Govern
ment. Wheat flour production and sugar meltings also were larger in September.
Output of anthracite and bituminous coal showed a larger than seasonal increase.
Factory employment and payrolls declined considerably in September, largely
as a result of the textile strike. The number of workers employed was substantially
reduced in the automobile, iron and steel, and shoe industries, as well as in the
basic textile industries. There was a larger than seasonal increase in employment
in clothing industries, while in the nonferrous metals, building materials, food
products, and paper and printing industries employment was sustained. Among A
non-manufacturing lines, employment increased seasonally from August to Septem
ber at coal mines and in retail trade. There was also a substantial increase in
number of persons provided with work by the emergency work program of the
Federal Relief Administration, while employment on public works decreased
somewhat.
The value of construction contracts awarded, as reported by the F. W. Dodge
Corporation, continued in about the same volume during September as in other
recent months.
Department of Agriculture crop reports for October 1 indicated a cotton crop
of 9 443,000 bales as compared with a yield of 13,047,000 bales last year. The com
crop, which averaged 2,516,000,000 bushels from 1927 to 1931, is .estimated at
1 417 000,000 bushels this year. Hay and pasture conditions improved in September,
and weather in the first half of October was generally favorable for forage crops.
The yield of white potatoes is estimated at 362,000,000 bushels, about equal to
the average for 1927-1931.
Distribution
Daily average railroad freight carloadings increased from August to September
by about the usual seasonal amount, but declined slightly in the first half of
October. Sales at department stores increased from August to September by some
what less than the estimated seasonal amount, while retail sales of general mer
chandise in rural districts, as shown by reports of mail order houses and chain
stores to the Department of Commerce, increased considerably.
Commodity Prices
Indexes of United States Bureau of Labor Statistics. By
months 1929 to 1931; by weeks 1932 to date (1926 =
100).
Wholesale prices of farm products and foods, which had advanced sharply in
August and the first week of September, subsequently declined somewhat. The
weekly index of wholesale prices of the Bureau of Labor Statistics, which had
advanced from 74 per cent of the 1926 average at the beginning of June to 78
per cent early in September, stood at 76 per cent in the second week of October.
Recent declines occurred principally in those products which had increased most
rapidly in preceding weeks, such as wheat, cotton, live stock, and meats. Prices
of commodities other than farm products and foods have in general shown little
change since last January, but within recent weeks prices of textile products and
scrap steel declined slightly and gasoline prices showed a considerable decrease.
The open market price of silver advanced sharply in the first half of October.
Bank Credit
MEMBER BANK CREDIT
U 5 Govt Securities
Wednesday figures for reporting member banks in 91
leading cities. Latest figures are for October 17, 1934.
Page
8
Excess reserves of member banks have shown no material change during the
past month and on October 17 amounted to about $1,750,000,000. A reduction in
Treasury cash and deposits with the Federal Reserve banks somewhat more than
offset a seasonal growth of $57,000,000 in the volume of money in circulation and
a continued growth in required reserves arising from a growth in deposits. Volume
of reserve bank credit outstanding showed little change.
At reporting member banks in leading cities there was a further growth in
deposits and in loans and investments. Between September 19 and October 17
total deposits of the banks increased by about $500,000,000. Commercial loans to
customers and member banks’ holdings of United States Government securities
increased further, while security loans declined.
Short-term money rates continued at low levels during September and the
first three weeks of October. Yields on Government securities declined in October,
following an increase in August and September.
@FedFRASER