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B u sin ess C onditions R eserve S eventh F ederal Volume 9, No. 9 d istr ic t M O N T H L Y R E V I E W P U B L I S 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 September 1, 1 9 2 6 BUSINESS CONDITIONS IN THE UNITED STATES R O D U C T IO N in basic industries and factory employ m ent and pay rolls declined slightly in July, but the de crease in production was smaller than is usual at this sea son. W holesale prices, after a further decline in July, were at the lowest level in nearly two years. P P R O D U C T IO N —The Federal Reserve Board’s index of production in basic industries, which is adjusted for sea sonal variations, increased about one per cent in July. De clines in the output of iron and steel and anthracite, and in the activity of textile mills were larger than the usual sea sonal reductions, while production of flour, copper, zinc, cement, and petroleum increased. The m anufacture of au tomobiles declined further and was smaller than a year ago. Factory employment and pay rolls showed the usual sea sonal decline in July, which is due largely to closing for stock-taking and repairs and to sum m er vacations. Declines were noted in nearly all the im portant industries for which reports are received, with the exception of leather and shoes and certain food products and building materials. Build ing contracts awarded in thirty-seven states east of the Rocky M ountains, declined in July for the fourth consecu tive m onth and as in June, were smaller than a year ago. Figures for the first three weeks in A ugust were also P R O D UC T IO N The composite condition of all crops, as reported by the D epartm ent of A griculture, shows an improvement of 2 per cent in July, owing largely to the increase in the ex pected production of wheat. Cotton production, on the basis of A ugust 16 condition, is estimated at 15,248,000 bales, compared w ith an output of 16,104,000 in 1925. TRADE— Volume of trade at wholesale and retail showed a further seasonal decline in July, but continued to be large. Retail trade was larger than a year ago, while wholesale trade was slightly smaller. Sales of departm ent stores and mail order houses declined less than is usual at this season, and were 4 per cent and 13 per cent, respec tively, larger than in July of last year. Merchandise in ventories at departm ent stores continued to decline in July, and at the end of the m onth were in about the same volume as last year. Stocks of meat, dry goods, and shoes carried by wholesale firms were smaller than a year ago, but stocks of groceries, hardware, and drugs were larger. Shipments of goods by railroads were maintained at a high level during July for nearly all types of commodiW HOLESALE IN B A SIC I N D U S T R I E S Index of 22 b a sic com m od ities, a d ju sted for se a so n a l v a r ia tio n s (1 919= 100). L a te s t figure. July, 1926: 119. below those for the corresponding period of last year. The principal decreases were in the New Y ork and Atlantic districts. P R IC E S In d ex o f U. S. B u reau o f Labor S ta tistic s (1913= 100, base adopted by th e B u reau ). L a te st figure, July, 1926: 150.7. Compiled August 2 7 , 1 9 2 6 ties. Loadings of grain were larger than for any month since October, 1924, and were in record volume for July. PRICES'—The Bureau of L abor Statistics index of wholesale commodity prices declined about one per cent in July to the lowest level since September, 1924. Price declines were shown for m ost commodity groups, particu larly farm products and foods, while prices of steel and other metals advanced. In the first three weeks of Au gust the prices of grains, cotton, and rubber declined fur ther, while cattle, hog's, potatoes, coal, and coke advanced iri price. BANK CR ED IT—Between the middle of July and the middle of A ugust, total loans and investments of member banks in leading cities increased slightly, reflecting a MEMBER BANK grow th in purposes. the same vestments the seasonal demand for credit for commercial Loans on securities on A ugust 18 were in about volume as a month earlier, while the banks’ in declined. Between July 21 and A ugust 18, discounts for member banks and the holdings of acceptances increased consid erably, while U nited States security holdings were some w hat reduced, with the consequence th at the total volume of reserve bank credit increased by about $50,000,000. Money m arket conditions became firmer in A ugust. The rate on commercial paper, which was 4 per cent in June and July, increased to 4% - 4 ^ per cent, and the rate on 90-day bankers’ acceptances advanced to 3J4 per cent. The discount rate of the Federal Reserve Bank of N ew Y ork was advanced on A ugust 13 from 3J4 to 4 per cent. C R E D IT M onthly a v era g es o f w eek ly figures for b an k s in 101 lead in g cities. L a te s t figures, a v era g es for first three w eek ly report d a te s in A u gu st, 1926: All O ther L oans, 8,440 m illion; L oan s on S ecu rities, 5,643 m illion; In v estm en ts, 5,626 m illion. W eek ly ra te s in N e w Y ork m on ey m ark et—C om m ercial paper r a te s on 4 to 6 m o n th s’ paper, and accep ta n ce r a te on 90-day paper. L a te s t figures, third w eek o f A u gu st, 1926: C om m ercial P ap er R ate, 4% per cent; N. Y. R eserv e B a n k D isco u n t R ate, 4 per cen t; A ccep tan ce R ate, 3% per cen t. BUSINESS CONDITIONS IN THE SEVENTH RESERVE DISTRICT O N D IT IO N S in the Middle W est during July re flected few changes of significance other than sea sonal. As is custom ary at this time of year, interest in farm ing sections centered in grow th of crops, delayed in July by heat and drought but recovering somewhat with more favorable w eather in August. O ther agricultural developments during July were the noticeable gain over June in w heat receipts, but the smaller tonnage of oats and corn, the reduction in the movement of live stock, and the declines in the output of dairy products. In industry and trade, a midsum m er slowing down was evident. An exception occurred at the steel mills where July bookings approxim ated the June volume, and unfilled orders at the end of the m onth registered an increase. Pig iron output and steel ingot production exceeded last year’s levels, but declined from the preceding m onth and con tributed to the district drop in industrial plant payrolls. In the num ber of employees, however, these losses were offset by gains in the seasonally active industries. Building con struction also continued to absorb a large am ount of labor, w ith contracts aw arded ahead of the previous m onth and a year ago. T he m ajority of reporting retailers indicated a falling off in sales and collections, and a reduction in inventories, although continuing a volume of business larger than last year. W holesalers likewise showed recessions from the preceding month, while comparisons with July, 1925, vary. D istribution of automobiles, both at wholesale and retail, C DigitizedPage 2 for FRASER declined during July, w ith the form er below last year as well. Sales of agricultural machinery, exceeding those of July, 1925, declined in the aggregate from June. T he lum ber m arket showed less activity. In the financial situation a broadened demand for credit was noted, with slight change of rates. T he volume of paym ents by check increased; savings deposits dropped; and the bond m arket was seasonally quiet. CR ED IT C O N D IT IO N S A N D M O NEY RATES Demand for credit accommodation during recent weeks in the Seventh district has undergone a general expansion, met w ith sufficient funds, however, to hold rates at previous levels, except th at individual institutions in some sections, especially Chicago, report a fractional increase. In the latter city, the present range of rates is as follows: Com mercial paper 4% to 4>2 per cent, custom ers’ over-thecounter loans 4J4 to 5 ^ . and collateral loans 4 to 5J^ per cent. The average rate earned on loans and discounts by ten of the larger banks in Chicago during July was 4.86 per cent, compared w ith 4.88 per cent in June, and 4.71 per cent in July, 1925. The prevailing rate in D etroit during the week ending A ugust 15 on custom ers’ prime commercial loans was 4J4-6 per cent which was unchanged from the corresponding period of the preceding m 6nth. T he average rate earned by six D etroit banks in July was 5.30 per cent, compared w ith 5.29 in June and 5.18 per cent in July a year ago. T he volume of reserve bank credit employed in the dis trict has changed little in recent weeks; total bills dis counted by the Federal Reserve Bank of Chicago on A ugust 18 am ounted to $57,169,000 as against $56,250,000 on July 21. Total bills and securities on A ugust 18 were $150,093,000 compared w ith $148,559,000 on the corresponding reporting date in July. Federal Reserve notes have shown a down ward trend since the high point on July 14 when $194,618,000 was reported, until A ugust 11 when they stood at $189,311,000, rising, however, to $192,670,000 on A ugust 18. Loans and discounts of reporting member banks on A u gust 11 aggregated $2,194,832,000, the largest am ount re ported since this bank has received these data, dropping about five million on A ugust 18. The increase over July 14 on A ugust 11 approxim ated sixty million, and over the figure on December 30, 1925, the last reporting date in that year, more t h a n one hundred million. In creases in Chicago and D etroit in commercial loans, and to a lesser extent in loans secured by stocks and bonds, ac count for the rise. Investm ents of reporting members in the district on A ugust 18 stood at substantially the same figure as a month previous, the current am ount being $760,281.000. N et demand deposits on A ugust 11 totaled $1,854,643,000, attaining a new high point and exceeding the previous peak ($1,811,538,000 on July 14) by over forty million. On A ugust 18 the figure was reported as $1,845,465.000. Time deposits were at substantially the same level on A ugust 18 as a m onth before, the $1,055,948,000 on the form er date com paring with $1,056,145,000 July 21. D uring July commercial paper rates firmed about onequarter of one per cent, the m ajority of reporting dealers indicating 4J4 for high and 3J4-4 for low, with prime paper moving for the m ost part at 4j£, although demand for the choicest was strong at 4. A fter A ugust 1, some paper sold at 4, but the prevailing range was from 4% to 4J 2. The / supply of paper during July was considered good for the season, while demand fell off. A ggregate sales of eleven dealers in this district were within 0.8 per cent of the June volume, four firms show ing gains and seven declines, while the decrease of 13.8 per cent from July, 1925, reflects eight declines and two increases. T he volume of paper outstand ing at the end of July, as reported by five dealers, was 4.7 per cent higher than on June 30; in comparison with a year ago, three firms registered declines and one an increase, averaging for the group a drop of 2.9 per cent. O utstand ings for tw enty-six dealers throughout the country advanced from $652,432,000 on June 30 to $654,944,000 by July 31. Six reports covering operations in the Chicago open bill m arket from July 15 to A ugust 18 indicate on an average weekly basis an increase in purchases of 50 per cent as compared with the preceding period. Sales in the same comparison averaged an increase of 57.7 per cent. The bills were drawn principally for grain, meats, canned goods, tobacco, coffee, lard, leather, sugar, and petroleum. N inetyday m aturities were listed as in best demand, the offered rate of 3 ^ on these at the close of the period comparing w ith 3 on July 14 and the middle of June. Total bills held on A ugust 18 were 47.5 per' cent of the July 14 hold ings, transactions with the reporting dealers’ other offices affecting comparison of the two dates. M arked increases during July over the previous month in the volume of bills accepted by a few of the reporting banks in this district more than offset other declines, so that the aggregate advanced 29.7 per cent, and to within 19.9 per cent of the April peak; comparisons with the corresponding m onth of 1925 continue to average declines from last year. Transactions in the first two weeks of A ugust, as reported by three Chicago houses, covered principally grain, lard and m eat exports, coffee, provisions, and pig iron. V ery heavy buying during July by one bank advanced purchases for the group to the largest volume since M arch, and increased the am ount of bills held to the highest level since A ugust 31, 1925. Sales were 33.5 per cent smaller than in June, and slightly over half the volume of a year ago. The am ount of the banks’ liability for acceptances outstanding dropped at the close of July 4.9 per cent below the June 30 amount; in comparison w ith a year ago, declines at five banks and increases at nine averaged a drop of 2.2 per cent from July 31, 1925. Purchases of bankers’ acceptances by the Federal Reserve bank during July am ounted to $28,585,834, and holdings at the close of the m onth were $32,052,227. Agricultural Financing—Loans outstanding of nineteen Joint Stock Land banks in the five states including the Seventh district, on July 31 totaled $211,352,022, as against $209,610,906 at the close of the preceding month, and $183,517,821 July 31, 1925. Four Federal Land banks, with loans outstanding in the same territory of $174,327,881 on July 31, exceeded the June 30 aggregate by approxim ately $1,300,000 and the figure on July 31 a year ago by over $18,000,000. Loans and discounts (including rediscounts) of four Fed eral Interm ediate Credit banks on July 31 this year am ounted to $1,287,355, compared with $1,428,119 on June 30 and $1,312,826 a year ago. Volume of Payment by Check—Thirty-seven clearing house centers in the Seventh district totaled $6,082,832,000 in paym ents by check during July, representing an increase of 1.2 per cent over June and of 5.9 per cent over July, 1925. The four larger cities in July gained 0.8 per cent over June and 6.1 per cent over the corresponding m onth a year ago, while thirty-three sm aller cities gained 3.3 per cent and 4.9 per cent, respectively, in the two comparisons. V O L U M E OF P A Y M E N T BY C H E C K Checks D ra w n on Clearing House iBanks, 7th D istrict F ig u re s used are e stim a te s for calen d ar m onth, b ased on w eek ly rep orts to th is bank. L a te s t figures, July, 1926, in th ou san d s o f dollars: C hicago, D etroit, M ilw aukee, and In d ian apolis, 5,089,960; 31 other C learin g H ou se C enters, 965,723. Savings—F or nearly tw o-thirds of the reporting banks in this district and by groups for each of the five states, sav ings deposits on July 31 were below the mid-year levels. Post-interest period withdraw als exceeded new deposits, although the num ber of accounts increased at over half the banks and for all states except Illinois. As compared with a year ago, 109 out of 186 banks showed gains in am ount of deposits, averaging for the district 2.6 per cent, with a corresponding increase of 2.9 per cent in num ber of accounts; all five states registered gains in the latter com parison, while in the former, Illinois averaged the one decline. Bonds—The Chicago bond m arket during the past few weeks has been characterized in general by seasonal dull ness. The public, however, absorbs attractive issues readily, although at present the am ount of new securities offered for sale is not large, with few issues of importance. Two Page 3 dealers in real estate bonds report abundance of capital seeking this form of investment, w ith July sales in excess of previous records. Prices remain fairly firm; bonds of the highest grade have been steady, with instances of appreciating; municipals are strong; foreign issues have fluctuated with political developments. AGRICULTURAL PRODUCTION AND FOODSTUFFS H eat and drought delayed the growth of corn, potatoes, pasturage, and lesser crops in sections of the Seventh district during July and caused the oats to head rather short, which accounted for the smaller A ugust 1 produc tion estim ates as compared with July 1 for both corn and oats in Iow a and for the latter grain in Illinois, W iscon sin, and Michigan. Recent reports indicate that crops have made progress with more favorable w eather conditions in August. The Bureau of A gricultural Economics on the basis of A ugust 1 condition estim ated the 1926 production of onions in Indiana, Michigan, Iowa (exclusive of the Pleasant Val ley d istrict), W isconsin, and Illinois at 5,344,000 bushels, the M ichigan-W isconsin sugar beets at 1,041,000 tons, the Michigan, Illinois, and Indiana grapes at 70,545 tons, and the Illinois broom corn at 10,500 tons, com pared with the 1925 harvests of 4,115,000 bushels, 1,132,000 tons, 27,910 tons, and 8,800 tons, respectively. CROP PRODUCTION Estimated by the Bureau of Agricultural Economics as of August 1 (In thousands of bushels) S e v e n t h D is t r ic t F orecast F in a l 1926 1925 Corn ................... 841,652 1,092,525 Oats ................... 529,510 588,113 Winter Wheat .... 65,280 53,673 3,079 2,287 Spring Wheat ..... Barley .................. 36,9131 34,962f Rye ...................... 11,107 f 10,049t Potatoes (white).... 56,819 50,852 Tobacco* ............ 35,904 45,210 All H ay**............... 15,943 16,118 U n it e d S ta tes F orecast F in a l 1926 2,576,936 1,311,159 626,482 212,719 191,088 41,870 345,569 1,202,884 88,072 1925 2,905,053 1,511,888 395,610 270,875 217,497 48,612 325,902 1,374,400 99,515 5-Y ear A verage 1921-25 2,849,188 1,326,916 548,843 252,959 186,105 68,153 396,469 1,289,699 .............. *In thousands of pounds. **In thousands of tons. tFive states including the Seventh Federal Reserve district. Grain Marketing—The receipts of wheat at interior pri m ary m arkets in the U nited States showed more than the custom ary gain in volume over June and exceeded the 1921-25 average for July by 73.1 per cent. A smaller ton nage of oats and corn was handled at these term inals dur ing July than in the previous m onth or a year ago, but reshipm ents of w heat increased. Visible supplies in the U nited States on A ugust 7 exceeded those for the corre sponding week last year, while w heat stocks showed a gain and holdings of other grain a decline from July 10. Chi cago prices of w heat averaged lower and those of corn, oats, and rye higher for July than for the preceding month. Quotations tended to ease somewhat during the early part of August. Members of the Chicago Board of T rade con tracted for greater quantities of future delivery grain during July than in June, but the tonnage fell slightly under that of July, 1925. Flour—A t Chicago, receipts and shipments of flour dur ing July, according to figures furnished by the Chicago Board of T rade, were heavier than in either the preceding m onth or July, 1925, and exceeded those of any previous m onth this year. A decline from a year ago was reported for July in sales and production of flour by mills in the Seventh district, although gains in volume were registered in the comparison w ith the preceding month. CHANGES IN JULY, 1926, FROM PREVIOUS MONTHS P er c e n t J une 1926 Production (bbls.) ....... + 5.3 Stock of flour at end of month (bbls.) ............ + 0.7 Stocks of wheat at end of month (bu.)........... + 168.1 Sales (volume) .............. + 8.9 Sales (value) ................ — 0.7 C o m p a n ie s J une in c l u d e d J uly + 6.6 31 31 — 7.7 — 6.8 — 15.0 31 16 16 31 15 15 c h a n g e fr o m J uly 1925 — 0.4 1926 34 1925 34 Production includes wheat and other flours. Balance of items refer to wheat flour only. DigitizedPace 4 for FRASER Movement of Live Stock—Public stock yards in the U nited States received a greater num ber of hogs and lambs and a smaller quantity of other kinds of live stock during July than a year ago; all receipts, however, were under June. Corn-fed steers constituted the bulk of the cattle run, although there was a seasonal gain in the m arketing of grassers from the ranges and a limited offering of cows and heifers. Demand remained rather draggy for heavy weight steers during the greater part of the month. E arly lambs continued to arrive in liberal volume from the n orth western states, and a fair movement began from some of the late sections. H og receipts contained a fairly large per centage of heavy packing sows, but preference remained centered on the lighter weight animals. LIVE STOCK SLAUGHTER Yards in Seventh District, July, 1926 ...................... Public Stock Yards in U. S. July, 1926......................... Tune, 1926......................... July, 1925......................... L a m b s and S heep C a t t le H ogs 262,592 720,864 251,271 C alves 105,486 771,559 782,757 800,221 1,873,148 2,087,040 1,803,835 912,456 998,463 938,584 396,137 434,150 452,065 T he reshipm ents of cattle and lambs to feed lots increased over those in June, while the movement of lambs was larger and that of cattle smaller than for the corresponding period of 1925. AVERAGE PRICES OF LIVE STOCK (Per hundred pounds at Chicago) W e e k en d ed A u g u s t 14, J u ly 1926 Native Beef Steers (average)... ........? 9.65 Fat Cows and Heifers....................... 6.85 Hogs (bulk of sales)................. ........ 11.60 Yearling Sheep......................... ........ 10.75 Lambs (average)....................... ....... 13.75 1926 $ 9.40 6.75 12.65 11.30 14.15 M on th s J une of 1926 $ 9.65 7.50 14.05 13.20 16.00 J uly 1925 $12.05 6.90 13.40 12.00 15.00 Meat Packing—U nited States production of m eat totaled slightly less for July than for the preceding month. E m ploym ent for the last payroll in the period, however, in creased 0.7 per cent in number, 2.6 per cent in hours worked, and 1.5 per cent in total value over the correspond ing week in June. Domestic dem and was active for smoked and a num ber of prepared m eats but rather draggy for other edible products, owing to the decline in consumption of the latter commodities during the hot w eather in July. The total value of sales billed during the m onth to domestic and foreign customers bv fifty-six slaughtering establish ments in the U nited States showed recessions of 6.6 per cent from June and of 1.1 per cent from a year ago. Trade improved somewhat early in A ugust. Q uotations for pork, lard, lamb, and for m ost m utton declined in July from the previous month; m utton legs, light-w eight m utton fore quarters, smoked meat, and com mon-to-good veal averaged a trifle higher, and choice veal a little lower than in June; beef prices held steady to slightly firm er at the beginning of the period but showed an easier tendency later. A ugust quotations strengthened for veal, rem ained steady for lamb, and declined slightly for beef, pork and lard. Packing plants and cold-storage warehouses in the U nited States reported larger inventories of lard, pork, and miscellaneous meat, and smaller tonnages of beef and m utton on A ugust 1 than at the beginning of July. Stocks of beef, pickled pork, and miscellaneous m eat were slightly smaller than a year ago, while holdings of other items increased. W ith the exception of stocks of cured beef, inventories were under the 1921-25 average for A ugust. American packers forwarded a smaller quantity of m eat and lard in July for export than in June, owing to a slow foreign demand. Consignment stocks already abroad had changed little on A ugust 1 from a m onth previous. European quotations were nearer parity with our domestic m arkets because of the decline in prices in the U nited States. Dairy Products—B utter productioa in July receded 10.8 per cent from the June level but gained 7.4 per cent over July, 1925, according to reports from sixty-four creameries in the Seventh district. Statistics for the four weeks ended July 31, compiled by the American Association of Cream ery B utter M anufacturers, indicate declines from both the pre ceding period and a year ago for the country as a whole. The tonnage of butter billed to customers by sixty-six creameries in the Seventh district totaled 10.1 per cent less for July than for June but 1.8 per cent over the correspond- c Previous to price advances on A ugust 1, demand for domestic coal in this district picked up somewhat during July. Production of bitum inous coal in Illinois during the m onth aggregated 4,268,197 tons, an increase of 224,062 tons over the June tonnage, but 0.2 per cent under the corresponding m onth of last year and 5.9 per cent below July, 1924. Screenings prices for the m ost part showed firmness, although quotations on southern Illinois screen ings weakened slightly after A ugust 1. U nited States output of bitum inous coal for July increased over June and was heavier than in the same month of 1925 or 1924; anthracite production was somewhat less ing month last year. Factories in W isconsin supplied the prim ary centers of th at state w ith a 12.8 per cent smaller quantity of American cheese during the four weeks ended July 31 than in the preceding period, and the volume was 9.4 per cent under a year ago; redistribution from those m arkets declined 12.3 per cent and 20.2 per cent, respectively, in the two comparisons. A larger tonnage of cheese and smaller quantities of both butter and eggs arrived at Chicago during the m onth than in June. Inventories in the United States showed a seasonal increase in dairy products on A ugust 1 over the beginning of July and were in excess of the five-year average for the date. Ju ly prices at Chi cago averaged somewhat under June; quotations stren g th ened slightly, however, at the beginning of August. - than in the preceding month but above the tonnage mined in July of the two previous years. The am ount of bitum i nous coal distributed from Lake Erie ports to American lake ports during July declined from the June am ount, though increasing in the yearly comparison with 1925 as well as with 1924. A ccording to statistics compiled by the D epart ment of Commerce, Bureau of Mines, stocks of bituminous coal in the hands of consumers on July 1 had gained 3,000,000 tons over supplies held May 1, exceeded the ton nage of June 1 last year by 1,000,000 tons, but were 12,000,000 tons under June 1, 1924. INDUSTRIAL EMPLOYMENT CONDITIONS Introduction of part-tim e schedules in m any industries, vacations, and some reductions in working forces were reflected in payrolls for July, reporting firms with an aggre gate em ploym ent of about 380,000 w orkers showing a drop of 3.1 per cent from the preceding month in their total wages. In the m etals and metal products group where employment was reduced less than one per cent, payrolls showed a decline of about 6 per cent. For “vehicles” the loss in payrolls was alm ost 9 per cent, w ith the num ber of men laid off totaling 2.2 per cent. T his was the heaviest cur tailm ent in forces shown by any of the reporting industrial groups with the exception of “chemicals,” where the declines were 5.3 per cent in the num ber of employees and 7.5 per cent in payrolls. Reductions in w orking forces in the above industries, however, were more than offset by additions made in others, so th at the aggregate employment of all the reporting groups registered a 1.3 per cent increase for the month, the first since last March. T he largest of these gains took place in food products, the em ploym ent in this group expanding by over 10 per cent. T his was alm ost entirely due to the seasonal rush in canning and preserving factories which more than doubled their forces. The m eat packing industry also added to its employment, as did m anufacturers of ice, ice cream, and of bakery goods. A definite expansion was apparent in the leather group, both em ployment and pay rolls increasing 4 per cent over the corresponding week a month earlier. The demand for labor, outside of industrial plants, con tinues good. Construction work is being well maintained, road work is at its peak, and the demand for farm help increasing. A t the free em ployment offices of Indiana there was a reduction in the ratio of applicants to positions from 130 per cent the first week in July to 92 per cent early in August. A t Illinois offices the ratio showed a slight rise from 138 per cent to 139. EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL RESERVE DISTRICT N u m b e r o f W age E a rn ers WEEK ENDED J u l y 15, J u n e 15, I n d u s t r ia l G r o u ps All groups (1 0 )................................................................. Metals and metal products (other than vehicles).......... Vehicles -........................................................................... Textiles and textile products............................................ Food and related products................................................ Stone, clay, and glass products........................................ Lumber and its products.................................................. Chemical products ........................................................... Leather products .............................................................. Rubber products .............. -.............................................. Paoer and printing ........................................................... 1926 380,449 149,305 42,673 25,449 54,064 14,648 34,465 10,316 17,405 3,068 29,056 1926 375,411 150,184 43,649 25,119 48,997 14,679 33,542 10,890 16,813 2,997 28,541 T otal E a r n in g s WEEK ENDED J u n e 15, J u l y 15, P er c e n t C hange 1926 $9,700,246 3,514,740 1,262,633 589,280 1,444,428 424,728 793,736 282,289 388,271 74,294 925.847 41-3 —0.6 —2.2 41-3 4 1 0 .3 —0.2 4 2 .8 — 5.3 4 3 .5 4 2 .4 4 1 .8 1926 $10,006,541 3,733,518 1,386,726 586,816 1,358,729 441,449 828,897 305,233 373,500 76,628 915,045 P er c e n t C hange — 3.1 — 5.9 —8.9 4 0 .4 4 6 .3 — 3.8 —4.2 —7.5 4 4 .0 —3.0 4 L2 MANUFACTURING ACTIVITIES AND OUTPUT Agricultural Machinery and Equipment—The aggregate value of the sales of agricultural machinery and equipment billed during July to domestic and foreign customers by ninety-seven m anufacturers in the United States declined 22.7 per cent from June for the tractor, thresher, and com bined harvester group, 1.7 per cent for lighter machinery, 10.2 per cent for barn equipment, and 15.2 per cent for agricultural pumps. In comparison with July, 1925, in creases of 16.8, 10.8, and 10.0 per cent were shown for the first three groups, respectively, while agricultural pump sales declined 5.1 per cent. PRODUCTION AND SALES OF FARM EQUIPMENT IN THE UNITED STATES Changes in July, 1926, from previous months P er c e n t J une Domestic sales billed...... Sales billed for export.... Total sales billed............ Production ....................... 1926 —14.6 — 3.6 — 13.4 — 2.3 c h a n g e fr o m J uly 1925 4-15.2 -j- 1.3 -f-13.4 -j-18.6 C o m p a n ie s J une 1926 97 53 97 94 in c l u d e d J u ly 1925 97 53 97 94 Sales based on value. Production computed from employment. Pace 5 Automobile Production and Distribution—U nited States output of passenger cars during July aggregated 315,861, from the D epartm ent of Commerce report, a decrease of 23,681 from the preceding m onth and of 33,123 from July a year ago. A total of 39,585 trucks was produced in July in the U nited States, representing a decline from June and from the corresponding m onth of 1925. Both wholesale and retail distribution of new cars in the Middle W est continued to decline during July, according to reports furnished this bank by representative dealers ana distributors. Sales at retail showed a gain over July, 1925, b ut other com parisons with the preceding m onth and a year ago revealed declines. Sales made on the deferred paym ent plan aggregated 49.5 per cent of total retail sales during July, according to the reports of thirty-seven dealers, and this ratio com pares with 46.6 per cent in the prior m onth and 42.0 per cent in July, 192$ MIDWEST DISTRIBUTION OF AUTOMOBILES Changes in July, i926, from previous months P er c e n t J une C o m p a n ie s J une in c l u d e d J u ly — 17.2 — 19.1 39 39 38 38 — 12.4 — 18.7 + 2.9 + 1.8 59 59 59 59 — 19.8 — 18.5 + 7.0 + 14.5 61 61 61 61 — 9.3 + 14.8 61 61 — 8.0 — 8.2 + 46.7 + 20.7 61 61 61 61 c h a n g e fro m J uly 1926 New cars Wholesale— Number sold ........... Value ........................ Retail— Number sold .......... Value ........................ On hand July 31— Number ............... Value ........................ Used cars Number sold .......... Salable on hand— Number ............... Value ........................ 1925 — 16.4 — 18.3 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 at Retail— 52 Firms the country declined in July from the preceding month, though showing increases over the two preceding years, and in the Illinois and Indiana district followed the same trend. Beginning with July 28, the composite average price of fourteen leading iron and steel products, compiled by Iron Trade Review, remained stable for four succeeding weeks at $37.61; at about the same time a year ago this price level was $37.45. Follow ing a decline in prices of iron and steel scrap at Chicago the latter p art of July, quotations have held firm through the middle of August. The third m onthly decline in shipm ents by iron and steel casting foundries in the Seventh district took place during July, although forw ardings were slightly larger than in the corresponding m onth of last year; production showed a decrease in the m onth-to-m onth com parison and was also heavier than in July, 1925. The m ajority of stove and furnace m anufacturers reporting to this bank shipped a smaller volume in July than in June or the same m onth last year; orders booked were less in both comparisons; while production was considerably heavier. Shoe Manufacturing, Tanning, and Hides— Shoe factories in the Seventh district lowered their m anufacturing opera tions during July, principally to perm it the taking of annual vacations and inventories. Shipments exceeded current pro duction, however, but declined slightly in volume from June. Twenty-five companies reported stocks on hand A ugust 1 equivalent in the aggregate to 89.5 per cent of the quantity forwarded to customers during the preceding month. U n filled orders held by tw enty-one of the m anufacturers gave assurance of approxim ately eleven weeks’ future business at the present rate of distribution. CHANGES IN THE SHOE MANUFACTURING INDUSTRY JULY, 1926, COMPARED WITH PREVIOUS MONTHS P er '-"'k t J une Production ...................... Shipments ...................... Inventories ...................... Unfilledorders .................. M onthly a v era g e 1923-1924-1925= 100. L a te st figures, July, 1926: V alue, 101.1; N um ber, 114.0. Iron and Steel Products—The customary midsummer slackening in the steel industry did not take place in July this year. Reports from mills in the Chicago district indi cate that bookings were maintained at approxim ately the same volume as in June, with specifications in some instances ahead of shipm ents. F or the first seven m onths of this year, the steel tonnage consumed by industries served by Chicago mills has averaged about 12 per cent greater than in the corresponding period of 1925. For the first time since December 31 last year, a gain was shown in the am ount of unfilled orders held by the U nited States Steel Corporation over those on hand at the end of the preceding m onth, the increase on July 31 aggregating 123,880 tons; the am ount is also higher than on July 31 last year when a decline was shown in the m onth-to-m onth comparison. Steel ingot pro duction in the U nited States averaged less during July in the daily am ount than in June, but was unusually high for the season, of the year. Average daily pig iron output for Digitized Page 6 for FRASER — — + + 1926 1.7 0.2 4.3 9.0 ch a n g e fro m J uly 1925 + 5.5 -j- 1.5 + 1 7 .9 + 33.1 C o m p a n ie s J une 1926 30 30 25 20 IN in c l u d e s J uly 1925 30 30 25 20 A greater quantity of leather was tanned in the Seventh district during July than in the preceding m onth. Sales billed to custom ers by reporting tanners showed a slight recession, in the aggregate from June, although nearly half the concerns recorded a gain. D emand for harness in creased over the previous month, but was som ew hat under that of a year ago. The belting business experienced a sea sonal decline. Sole leather prices for July eased, while those of m ost other tannages ranged from barely steady to slightly firmer. Nearly all quotations strengthened during the early p art of August. Sales of packer green hides and calf skins increased at Chicago over June. A greater volume of shipm ents of hides and skins moved from the city during Ju ly than dur ing the previous month, despite a slight decline in receipts, according to a compilation made by the local Board of T rade. Quotations for July averaged higher than those for June. Raw W ool and Finished W oolens—The general m arket in raw wool was rather quiet during July, w ith m anufac turers buying in only moderate quantities, although the volume of sales is reported variously by firms in this dis trict as equal to or in excess of th at of July a year ago. Prices have remained quite stable since the first of July, and a few slight advances in certain grades have been recorded. M anufacturers of finished m aterials report that sales and production remained about the same in July as in the preceding month. On A ugust 11, the American W oolen Company opened its lines of fancy woolens and w orsteds for spring, 1927, at reductions from a year ago averaging approxim ately the same as on staples. Furniture—As is custom ary during July because of sea sonal buying and the furniture m art held during that month, a large increase was shown this year over June in the am ount of orders booked by furniture m anufacturers in the Seventh district, the aggregate gain for seventeen firms being 68.6 per cent. In comparison with July last year and 1924, new business increased 9.0 and 40.1 per cent, respectively. The volume was about 14 per cent less than in January this year, however, when the last furniture m art was held. Shipments also increased, although the m ajority of firms showed declines, the gain over June averaging 9.4 per cent; they were 6.0 per cent above July last year and 48.3 per cent heavier than in the corresponding m onth of 1924. Ow ing to the large volume of new orders and the proportionately smaller forw ardings, unfilled orders on hand at the end of July increased 46.5 per cent over June 30, and in comparison w ith the same date of 1925 the am ount held was 1.2 per cent greater. O perations expanded slightly but were at a lower rate than last year. BUILDING MATERIAL AND CONSTRUCTION ACTIVITIES .D uring the greater part of July, the lumber m arket showed a decline in activity, retail yards and factory con sumers buying for immediate needs only, and building lum ber also moving in smaller volume from the yards. There was an improvement, however, tow ards the close of the m onth as well as in early August, with furniture and floor ing interests covering more freely on their requirem ents and prices becoming firmer both at mills and the retail yards. Sales for the month, as reported by tw enty-tw o wholesale and m anufacturing concerns, were 9.1 per cent less than in June and 5.5 per cent below those of July, 1925. One hundred tw enty retail yards reported total sales as 7.6 per cent below the preceding month and 0.9 per cent ahead of the same month a year ago. O utstanding accounts of these yards increased during the month, registering 275 per cent of sales, as compared with 253 at the close of June and 291 per cent a year ago. F o r m anufacturing and whole sale concerns, outstandings were lower than a m onth earlier but their ratio to sales was higher, 133 per cent as com pared with 127; at the close of July, 1925, the ratio was 145 per cent. Receipts of lumber at Chicago aggregated 7.1 per cent less than during June but were 1.3 per cent higher than a year ago. Shipments out of Chicago declined l l . l per cent from the preceding m onth and 28.1 per cent from the cor responding m onth of 1925. In the cement industry there was a marked tendency on the part of cement buyers to make purchases for current needs only, and shipm ents showed some decline from the preceding month. Production continued to gain, the out put slightly exceeding that of June. Stocks were reduced further but are considerably larger than a year ago. Brick also showed some decline in activity, although production was well maintained and the volume of stock remained prac tically unchanged. Building Construction—The building contracts awarded during July in the Seventh Federal Reserve district am ounted to $106,660,500, bringing the total awards so far this year to 0.4 per cent above the total for the first seven months of 1925. July aw ards exceeded those of June by 4.8 per cent and those of July a year ago by 54.1 per cent. Perm its issued during the month, however, showed a de cline both in the m onthly and yearly comparison. In the form er there was a loss of 5.9 per cent in the number of perm its issued in fifty cities in the district, and of 15.6 per cent in their estim ated cost. In the comparison with July, 1925, the num ber of perm its issued was practically the same but the cost 2.7 per cent less. MERCHANDISING CONDITIONS rThoIesale Trade—W holesale trade in this district during Ju ly reflected the custom ary summ er slowing down. Over sixty per cent of the reporting dealers sold less goods than in June, and by commodities the dry goods group averaged the one increase, gains by eight firms barely offsetting de clines by the other six. In comparison with July, 1925, fiftythree out of ninety-four dealers registered decreases this year, g r o c e r y and s h o e firm s a v e r a g in g s lig h t in c r e a s e s, but drug, hardw are, and dry goods declines of 0.3, 5.0, and 7.6 per cent, respectively; cumulative sales since January 1 are ahead of last year for thirty-eight firms and below for fiftythree. T hirteen reports containing data on advance sales indicate w ith five exceptions declines from the previous m onth and a year ago. F or all the shoe and dry goods dealers and for the m a jority of others, July collections were under the June re ceipts, group declines ranging from over 2 per cent for groceries and drugs to 23.0 per cent for shoes; accounts receivable as of July 31 were lower than at the end of June for three-fifths of the firms, declines am ounting to less than one per cent for drugs, and around 2 per cent for the other four groups. As compared with a year ago, the ma jority of firms reported smaller collections and nearly half smaller outstandings on their books; hardw are firms aver aged a gain in the former comparison, and grocery firms in both. Comparisons of July 31 inventories with those held June 30 and a year ago vary, increases and decreases being about evenly divided in both instances: changes during the month ranged from a 3.9 per cent drop for groceries to about one per cent gain for hardw are and drugs, and 7 per cent for dry goods and shoes; in hardw are the gain of 2.6 per cent over July 31, 1925, is the first this year. Of fifteen houses reporting advance purchases, nine showed reductions from June and ten from a year ago. Department Store Trade—The usual midsum m er trends in departm ent store trade were apparent in the July returns for this district: sales dropped to the lowest level of the year, collections fell off, accounts outstanding were reduced, and inventories lowered. W ith ten exceptions,' eighty-three stores reported a smaller volume of goods sold than in June, declining as a group 20.7 per cent. T he drop of 10.6 per cent in collec tions represented individual increases at fifteen stores and decreases at forty-five, while outstandings for the same sixty firms by July 31 were 7.8 per cent below receivables on the books at the end of June, only seven firms indicating advances. A ggregate inventories for fifty-six stores on July 31 were 7.5 per cent less than holdings June 30, nearly ninety per cent reporting net reductions during the month. Unfilled orders, am ounting at the close of June to 9.0 per cent of total 1925 purchases, had advanced to 10.0 per cent by July 31. Comparisons w ith a year ago reflect the broader scale of business this year. M onthly sales show an increase of 8.0 per cent and total sales for the seven m onths’ period, of 7.4 per cent, the form er gain representing individual increases by three-fourths of the firms, and the latter by three-fifths. Collections for fifty-seven stores were 11.2 per cent heavier, and accounts outstanding 13.1 per cent. In stocks the decline of 2.4 per cent from July 31, 1925, reflects nineteen increases and thirty-five declines; for fortyP«*e 7 one houses July sales were 27.4 per cent of average stocks compared with 2~).2 per cent last year, and cumulative sales since January 1 am ounted to 217.0 per cent of average goods held, as against 207.9 per cent during the first seven m onths of 1925. Retail F urniture T rade—July statistics from reporting retail dealers in furniture, furnishings, and equipm ent indi cate a falling off from the preceding month in sales and collections, as well as a reduction in inventories. Total ^goods sold during the m onth by fifty-one firms were 12.2 per cent below the June volume, and installm ent sales, as shown on tw enty-tw o reports, declined 14.1 per cent; de creases in collections am ounted to over 15 per cent in both comparisons. A ggregate stocks held at the close of July at thirty-three stores were 3.9 per cent under the June 30 inventories, but 3.5 per cent larger than a year ago for thirty-five. Sales and collection comparisons with July, 1925, reflect increases this year, fifty-nine dealers averaging a 9.6 per cent gain in total sales and twenty-nine an increase M O N TH LY B U SIN E SS IN D IC ES C OM PUTED of 16.7 per cent in installm ent sales, with total collections for twenty-five dealers 10.0 per cent ahead, and partial pay m ents for tw enty-four 11.4 per cent heavier. Accounts o ut standing reported by tw enty firms were within 1.1 per cent of the June 30 receivables, and for tw enty-six were 19.3 per cent above a year ago. Retail Shoe Trade—Forty-eight reporting retailers in this district averaged during July a decrease from the preceding month of 22.1 per cent in the dollar volume of shoes sold; individually eleven stores registered increases, and thirtyseven declines. F or nineteen of these, the sales decline from June am ounted to 11.2 per cent, compared w ith a drop of 13.1 per cent in aggregate accounts outstanding at the end of the month. T otal collections by seventeen firms were 7.0 per cent below the June receipts. T hree-fourths of the dealers made net reductions in their stocks during the m onth, goods held on July 31 by thirty-seven averaging 7.2 per cent less than inventories at the close of June. BY F E D E R A L R ESER V E BA N K OF CHICAGO (Index numbers express a comparison of unit or dollar volume for the month indicated, using the monthly average for 1919 as a base, unless other wise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following month. Data refer to the Seventh Federal Reserve district unless otherwise noted.) No. of Firms Meat Packing— (U. S.)— Sales (in dollars)1................................... 62 Casting Foundries— Shipments (in dollars)........................... 27 Stoves and Furnaces— Shipments (in dollars)........................... 14 Agricultural Machinery & Equipment— (U. S.)—1 Domestic Sales (in dollars).................. 113 Exports (in dollars)..................... ....... 72 Total Sales (in dollars).......................... 113 Production ............................................. 109 Agricultural Pumps— (U. S.)—1 Shipments (in dollars)............................ 19 Furniture—2 Orders (in dollars)................................. 20 Shipments (in dollars)............................ 20 Shoes—* Production (in pairs)............................. 34 Shipments (in pairs)............................... 34 Electric Energy— 8 Output of Plants (K W H )...................... 8 Industrial Sales (K W H )__________ _ Flour— Production (in bbls.)............................. 35 Output of Butter by Creameries— 1 Production ............................................... 77 Sales ................. ,........................-............. 77 Automobiles— Distribution in Middle W est:1 New cars— Wholesale— Number sold.. 34 Value ........... 34 New cars—Retail— Number sold.. 52 Value ........... 52 New cars— On hand— Number ....... 45 Value ........... 45 Used cars— Number sold 43 Used cars—On hand—Number ....... 43 Value .......... 43 Production (U. S.): Passenger cars— Trucks .............. July 1926 June 1926 July 1925 June 1925 111.8 118.6 114.1 115.7 76.4 87.7 73.7 84.4 67.9 70.9 69.5 69.3 162.0 124.5 158.6 131.3 189.6 125.0 178.5 139.5 140.7 136.8 139.9 106.6 144.7 108.0 137.7 108.2 109.2 126.8 117.0 122.8 187.5 126.3 111.9 117.1 168.2 121.6 110.7 121.6 93.2 92.8 97.6 93.1 85.7 91.3 90.0 88.4 187.2 242.7 186.0 242.9 167.8 212.7 162.8 211.2 110.1 104.5 110.5 101.2 149.3 133.0 162.7 142.0 142.9 132.9 152.0 128.4 138.7 117.4 114.0 101.1 74.1 69.9 149.5 118.2 91.7 233.9 153.1 165.7 143.7 130.6 126.6 96.1 87.2 161.5 129.5 105.1 251.4 170.6 172.7 149.8 109.4 98.5 68.2 59.8 131.1 79.1 72.3 258.4 154.8 153.9 138.4 142.1 134.9 55.8 54.3 142.7 89.2 81.0 260.9 140.6 Freight Carloadings— (U. S.)— Grain and Grain Products...................... Live Stock ............................................... Coal ........................ ................................ Coke ..........-.............................................. Forest Products -................................... Ore .................................................. ......... Merchandise and Miscellaneous.............. Total .......... ........................................... 149.3 84.5 112.8 127.3 121.2 203.6 141.6 135.0 110.1 84.1 109.7 130.9 134.0 191.0 142.3 133.3 117.3 84.4 108.1 103.8 121.9 177.7 138.6 129.4 95.9 82.4 98.7 103.6 130.8 173.4 137.5 126.1 Iron and Steel— Pig Iron Production:4 Illinois and Indiana.... ............... United States .............................. Steel Ingot Production— (U. S .)4. Unfilled Orders U. S. Steel Corp. 162.4 124.1 124.5 60.1 166.1 128.7 127.9 58.0 126.4 102.6 105.3 59.0 136.4 106.4 109.4 61.9 No. of Firms Wholesale T rad eNet Sales (in dollars): Groceries ............................................... 41 19 — Hardware ...... Dry Goods .................................... 13 14 Drugs .................................................. Shoes ............ 11 Retail Trade (Dept. Stores)— Net Sales (in dollars): - Chicago ............ Detroit .................................................. Des Moines ......................................... Indianapolis ......... Milwaukee .... Outside .............. Seventh District ................................. 7 4 4 5 5 39 64 July 1926 June 1926 July 1925 June 1926 77.0 102.0 72.1 98.4 33.7 78.4 109.0 71.7 101.9 37.5 75.5 107.3 78.0 95.8 33.0 71.5 114.6 115.0 136.3 98.9 105.3 118.1 87.4 113.3 140.7 184.6 118.4 131.3 148.5 104.0 144.2 116.0 114.2 89.4 107.7 117.2 82.1 104.9 84.2 101.3 37.6 145.2 167.9 114.7 137.9 145.2 100.8 138.8 Retail Trade— (U. S .)— Department Stores ............................... 359 99 Mail Order Houses................................ 4 98 Chain Stores: Grocery ......................... 27 333 Drug ......................................... 9 198 S h o e ... .......................... 6 145 Five and Ten Cent............................ 5 206 Candy .................. .................. .’ ........ ... 5 210 4 108 Music .................................................. Cigar ................................................. 3 155 130 107 95 126 102 300 187 153 204 204 118 152 259 166 122 183 181 104 136 254 167 152 187 184 99 134 Stamp Tax Collections—5 Sales or Transfers of Capital Stock....... Sales of Produce on Exchange— Futures 261.9 48.6 136.6 83.6 158.2 64.4 U. S. Primary Markets—* 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..... 201.7 48.6 47.9 89.4 70.7 160.8 59.2 61.0 68.9 75.4 91.0 52.5 217.0 87 85.6 88.4 65.1 117.8 248.0 73.4 132.8 72.3 95.4 70.2 74.3 92.2 92.1 55.4 240.3 168.8 254.1 194.1185.1126.0 231.8 291.1 230.8 280.7 292.3 361.3 328.2 235.4 284.7 257.5 232.2 198.1 214.0 103.9 129.4 199.0 146.8 48.1 121.3 227.9 252.9 226.0 235.1 251.2 271.1 198.7 222.7 202.5 238.8 186.7 180.9 224.0 233.3 225.9 219.0 307.4 198.4 223.6 238.3 227.0 247.4 293.2 256.7 276.5 381.0 225.6 374.2 206.9 117.1 219.0 247.5 203.4 175.6 235.9 194.5 226.6 272.3 1. Monthly average 1923-24-25 = 100; 2. Monthly average 1919-20-21 = 100; 3. Monthly average of mean of production and shipments in 1923-24-25=100; 4. Average daily production; 5. First Illinois internal revenue district; 6. Monthly average receipts 1919—100. Digitized Pag* 8 for FRASER
@FedFRASER