The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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~n.d. a &
(IP,copy of this bulletin Is received In advance, It ,.should be understood
that It Is Intended as a special courtesy to those who have kindly assisted In
Its preparation, and that its contents are confidential.)
This Copy Shall Not Be Released for Publication Before
March 2d, 1919.
FEDERAL RESERVE BANK OF KANSAS CITY
ASA E. RAMSAY,
C. K. BOARDMAN,
CHAIRMAN. BOARD OF DIRECTORS
AND FEDERAL RESERVE AGENT.
ASSISTANT
FEDERAL RESERVE AGENT.
REPORT OF CONDITION IN DISTRICT NO. 10
for t~e Month of F~bruary, 1919.
Kansas City, February 19, 1919.
--=---
Transition from a war to a peace basis is under way in the Tenth Federal Reserve District.
Generally, and in a large way, it is making rapid progress although in some lines of industry the
change involves intricate problems that, in the present state of the business mind, are quite difficult
of solution. It is agreed that the one big problem which stands in the way of harmonious and
equitable adjustment is how to get down from high war prices to equitable peace prices without
working unnecessary hardships or entailing undue losses.
The bank clearings of seventeen clearing house cities of the district, considered a fair index to
the volume of business, exhibit a total of $1,495,332,000 in January, 1919, as compared with
$1,462,000,000 in December, 1918, and $1,389,721,000 in January, 1918, indicating a gain of about 2.6%
for January, 1919, over December and 7% .ovei:. January of .last year. While the volume of business
reflected by these figure would indicate that business is rapidly returning to normal conditions, an
analysis of the situation discloses t hat this is largely the result of the continued heavy movement of
agricultt1ral produ,ts and live st0,I. to the markets under sHrn1 1 fo5 uf prires i:Hn'. 1iii.le ;f a11y beiow
the high peak of war prices.
There crre many signs to indicate a return to former activity of those manufacturing industries
which were idle during the war or else given over to the making of war essentials, since restric1.ions as to labor, fuel and materials have been removed by the government. Most of the present
activity, however, is in filling orders that have been on the books, many of them for months. New
orders are coming slowly, due to the high cost of everything that enters into the cost of production.
vVhile it can be said that the .movement of factories to peace basis is more rapid, for the reason that
their products are generally essential, it is certain that manufacturing in this district can not reach
its wonted activity until there is a price readjustment on an equitable basis. The same condition
also exists as to building, improvements both public aµd private, road construction, railroad work,
etc., all of which are retarded by high prices of materials and labor. And this in the face of the fact
that there is an increasing demand for all kinds of manufactured products, machinery, tractors, automobiles, trucks, lumber and building materials of all kinds, such as would if unhampered, make
1919 the best year in history.
Throughout the Tenth Federal Reserve District, however, the sentiment respecting the future
is one of optimism. It has its foundation in the knowledge that as an agricultural, meat-producing,
mining and oil-producing section there is no limit to be placed on its resources, and that the United
States will be called upon to not only supply a large portion of the food for Europe but to help
with its products and manufactures in the reconstruction of the battle--rent regions, in addition to
supplying a rapidly growing trade with other countries and on other continents.
MERCANTILE
February shows a substantial improvement in most lines of mercantile trade.
Wholesalers report country buying for immediate requirements of their custom and holding back
orders for future delivery in anticipation of falHng prices. Wholesalers are making little effort ·:to
book orders for future until prices are readjusted. With few heavy orders it is the vast number .of
small orders that are making for the present volume of business.
Mail order houses, sending out "flyers," or 60-day sale books, to bring January and february
up to the same state of activity as jn November and December, are reporting surprising results.
There is this information to be gained from the reception of the sale books of the mail order concerns: The country has plenty of money and is willing to spend it if right prices are made on commodities; and sales this year are exceptionally large, in many cases increasing 100% over January
and February business last year.
Retailers report good business. Depa:tment stores are. having a s~eady run of trade since th.eir
January sales, which were generally satisfac~ory! ~xcept m ~ansas <;ity, ~here the. street car strike
interfered to some extent. Small merchants m cities are domg a fair busmess while country merchants have litle to complain of except uncertainty as to future prices.
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A n rvey of- the mei:c-a-B-tile- s#uacmTI ..,,.:;closes dry goods, shoes and millinery in good demand,
,vith indicat="' of slight reductions, especially in cotton goods; but mild winter weather has made deman · ior cloth ng and wearing apparel only fair. In the face of reports that prices are steadily slipping
re is a' go,Rd/ :d~ip~na f9r j~c5ties and food s~uffs. Drug sundries co1:tir:iue one o! the most
ac~ive comm ities·: Paints and w~H paper are exceptionally strong, though bmldmg material has not
felt the impetus which optimists have prophesied. Heavy hardware and machinery show a gc!od increase over last year. The heating and plumbing trade is reviving. Musical instruments are going
well. Carpets\- ~ries and furniture are unusually strong. In general the whole tone of trade is
strong and healthy.
FINANCIAL
There is little change in the financial situation in this district. Bankers are lending hearty co-operation in an effort to bring about an adjustment to normal conditions as speedily
as possible. Money is in good demand for agricultural, commercial and industrial requirements.
Immediate requirements of the Government will cause interest rates to remain firm.
AGRICULTURE
Western farmers are exhibiting no apparent uneasiness over the mater of readjustment. They realize that demands on America for food will be heavy, at least until European
agriculture is restored, and that they will receive fair prices for all the products their acres produce. \tVith rain or snow falling this month in generous quantities over the district to maintain
ample reserve moisture in the soil for spring operations, and the early return of the soldiers and
sailors to relieve them of a big part of their burdens, farmers are planning operations on a more
extensive scale than usual.
While the wheat acreage is considerably larger than in any previous year, there is no indication
that other crops are to be neglected. Dry weather experiences of last year may cause some farmers
to reduce their acreage of corn, but with good soil conditions in prospect at seeding time and good
prices for corn, it is not believed there will be any material reduction of corn acreage. U ncertainty
in potato growing is causing some growers to reduce their potato acreage and plant potato ground
to other crops from which returns are more satisfactory. In the sugar beet regions the grm...ers.
having made good profits last year, are contracting to sell the produm<_'i of -i lt the acres 6 ey can
handle, and it is predicted the sugar beet industry will att".i:1 unprecedented proportions- this year.
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An encouraging sign for. agriculture is. the re r •:rt from '\,Vyoming, Colo~ado and New Mexico
that large areas of lands available for farming ·· re to be planted to crops this year, as the returns
f~g;,,
operations in those regions in th e Pu.St two years are influencing many people to turn
,nr,-- farming
.
t?uf1.gnculture .
Movement of grain to the markets continues in heavy volume. Receipts of wheat at the _principal markets of this district since January 1st have been about 80% larger than for the correspond·
ing six weeb at the beginning of last year. Receipts of corn are 15% larger and oats 27% larger.
t.
r:~~ A
firmer tone has been given the flour mar ket by the maintenance of high prices for casJ,
wh~at in the face of continued slack demand for fl our for both domestic and foreign trade. The mills
h{'ife been. operating at about 57% capacity since January 1st, the output . of flour for the first six
wJeks of 1919 being 1,782,935 barrels, as compared with 1,731,061 barrels in the same period of
1918; the increase for this year amounting to 2.9%.
'"
LIVE STOCK
Large supplies of meat animals are coming to the markets of this district. Although the figures are slightly below those of the last six weeks of 1918, they are considerably higher
than the receipts for the corresponding SL'C weeks of 1918. Receipts for January, 1919, are here
g-iven, with those of December and January, 1918, for comparison:
Dec., 1918
.trr'.:l
Jan., 1919
Jan., 191
11':) Cattle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
650,273
696,189
550.856
.ilu Hogs ........................ . ......... 1,598,851
1,320,172
1,064,427
.t.sr! Sheep ............................... : . . 471,543
486,490
534,427
;::~; The receipts of cattle a~e unusualiy heavy for this season. Fat steers ranged up to $18.40 per
h1J dred pounds compared with $13.50 a year ago, and Colorado beet pulp fed steers sold up to $17
a~·;t ~mpared with $13 a year ago.
-ui; The markets were taxed to capacity in January with hogs and only the guaranteed minimum
pFibe kept them at $17.10 and above. The increase of 534,460 head, or a fraction better than 50%,
above the receipts for January, 1918, is said to have .been largely the result of last year's short cor;1
crop, or else a disposition on the part of the farm er to sell his high priced corn in November and
Deoember rather than feed it to hogs at a fixed minimum price. The average weight of hogs for
t}wtsix markets in January was 206 pounds as against 215 pounds in January, 1918.
ht Packers maintained slaughtering operations on a high scale in January. Their purchases for
sf&ughter were 349,926 cattle, 1,255,935 hogs and 273,610 sheep, an increase of 14% on cattle, 40.5%
orP hogs and--9% on sheep over the slaugh ter reco rd for January, 1918.
.
PETROLEUM
Notwithstanding there is a threatened slump in the price of crude oil, operators
see ,no good reason w hy peace demands should not be as large as were war demands, and whatever
slump may come they believe it will not materially affect production. As evidence of their fait h in
the stability of the oil business, ex.tensive preparations are going forward for an unprecedented
v~lume of business during the months to come.
Reports on new work are that 629 ·rigs were up and 1,723 wells were drilling on February 1, in
the oil regions of this district. Besides, there is great activity in prospecting all through these regi'11o'!fs,
particula.rly
in \tVyoming, Colorado and New Mexico, with prospects of new fields being det, r
·
ve1dped.
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-LI(!
rmSevere winter weather and unpreparedness to meet it proved a serious handicap to both prodt1.ctfon and new development in January. W ells completed in Kansas, Oklahoma and \,Vyoming in
that month were 743, which is 243 less than in December. The fact that there were fewer wells de veloped, however, was more than offset by new production which was 51,749 barrels daily, or 20,912
bijr::.rtls more than the initial daily production in December. Oklahoma supplied the increase that
m~de January the best month for new daily production in two years, excepting October, 1917, and
Mao/,, 1918. The first half of February finds Oklahoma with ·an average daily production amounting
to 213,300 barrels, with the total for Kansas 80,400 barrels daily. Kansas has been lagging in ·development on account of work being interferred with by cold weather and heavy snows, but promises
a rapid rise of production with good weather.
MINING
A reduction in the price of lead and zinc.- n · a sla f ening p of the demand for coal,
coupled with inability of operators to work out a corres o ding reduction ,i o . erating expen e.'-~
has seriously affected the mining industry and made it ex11cmely d"fficult t o readjust itse f
after-the-war conditions. The fields are now filling up with xperiPt1.cl"d min rs returned 11-om n, itary or naval service and but for the depressing conditions describe e ·ery hing would be i good
shape for a year of great activity.
Production of metals in Colorado continued to decline through January owing chiefly to the
urop in market prices of lead and zinc. The largest lead producer in that state pulled its pumps
and ceased operations at depth. Smaller producers stopped shipments and one of the two concern,;
which has a normal production of 25,000,000 pounds annually has already stopped shipping and is
preparing to close down unless better conditions in the zinc market obtain soon.
In the Missouri-Kansas-Oklahoma or Tri-state district the situation is about the same, although
operators there are more optimistic. During January the Joplin District shipped 26,636 tons of
zinc blende with an average value of $43.44 per ton, 466 tons of calamine at an average price of $36.01,
and 6,906 tons of lead at an average price of $60.00. In the case of blende ores this shipment was
an increase of 647 tons over January, 1918, while calamine showed a decrease of 304 tons. There
was also an increase of 1,604 tons of lead ore over January, 1918.
The year opened with a considerable surplus stock and it was noted by the end of the month
that shut downs of mines and fairly heavy shipments was rapidly eating into the surplus stocks,
which at the month's close registered 22,000 tons of zinc and 200 tons of lead.
The market showed decided weakness at the month end both for lead and zinc, the general
c1verage basr .ing $40.00 for zinc and $50.00 for lead.
·-Qlier<!'fut, , a v~ been perfecting a local zinc chapter of The American Mining Congress, which
will 10ol('.af.~~r· ·:Jpe'<lfote.re&t,r of the mine operators of Miss_ouri, Kansas, Oklahoma and Arkansas .
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Some · Rfovem,~nt is reported in the gold mining industry. Both the Crippfe Creek lode mines
and placer mines
reparing for increased activity during the coming summer.
The mild weather has slowed up the demand for coal, held the retailers at a standstill with
enough coal to finish the season, and at the same time has increased operating expenses at the
mines. Operators are cutting down their output accordingly. They say they cannot change the cost
of production, as the miners' wages must stand as they are until peace is declared. The only solution, they say, is to increase prices or sit tight and wait to see what is going to happen.
CONSTRUCTION
Waiting for an adjustment of prices of materials and wage schedules is the
explanation for the hesitancy of building and public improvements to get back to a normal or prewar basis. While January made a good start toward getting back, as ·building permits indicate, the
gain only brought that month's volume up to about one-fourth the usual volume of building operations for the usually dullest month of the year. In no manner did it reflect the large business that
is waiting for action looking to a settling down on a more equitable or at least a more satisfacj:ory
basis. Permits for the erection of buildings in cities of the district, reported fo the Federal Reserve
Bulletin by the building superintendents are given for January, 1919, with comparisons for December and January, 1918:
No. Permits
Estimated Cost
Average Cost
Issued
of Buildings
per Building
573
1919 ......................... .
$1,334,392
January,
$2,328.78
260
481,342
1,851.31
- - - - - - - - . JD
~ -cember, 1918 ... . ..................... .
1918 ................ . . . . ·..... .
367
January,
3,310.64
1,215,007
It is estimated that, . with the entire district nearly two years behind in building, there is enough
work in sight to furnish employment to every mem.ber of the building trades for many months to
come. But under present prices a large part of the construction work, particularly the building of
homes, will be held back until the situation becomes easier.
In spite of the slowness of building to recover, the. lumber trade is reported as gaining strength
every day, with no indications that prices will come down . In fact well informed dealers say the
high prices will prevail unfil the mills and logging camps recover from the effects of the labor
shortage of last year which caused a curtailment of production for civilian needs. Trade in other
materials, which are generally 15% to 50% above pre-war prices, is only fair, although the demand
for cement is growing stronger as spring with its improvement operations approaches.
LABOR
The labor situation has assumed a more cheerful aspect in the last two weeks. While
there have been some revisions of wage scales, there has be.en no marked reductions out of harmony
with present commodity prices. No general revision of wages downward has been undertaken, although there are indications of a tendency toward a setling down on a higher level than pre-war
wage levels. Manufacturers and large industries are meeting the situation by eliminating extra time
or overtime. In some instances there have been increases, as in the case of the meat packers who
have agreed to a 10% advance of. wages to employees.
Nearly all of the industries report abundant 1-i.bor now available and operators are greatly improving the efficiency of their forces. Labor is also more plentiful in the oil industry and an easier
situation now prevails after the acute shortage of labor last year. Assurat1;ce that the farm labor
situation this year will be greatly relieved is now given by an announcement of the early return
of the American fighting forces in France. Mor~ than 25% of the men from the Western States in
the services came from farms and are expected to go back to the farms .
Indications now point to a settlement of the dispute between the building trades unions and the
Kansas City Builders Association .
. Aside from the usual number of unemployed in the cities and towns at this season of inactivity
in out-door work there is little unemployment in this district except some miners in the lead and
zinc fields who have been thrown into enforced idleness by shut-downs, and men of the building
trades who are holding out for increased wages. Generally, the number of unemployed is considered negligible, and it is the concensus of opinion that by early spring practically all of the men returned from service will have been absorbed in their usual occupations.
Statement of Condition of the
FEDERAL RESERVE BANK OF KANSAS CITY
INCLUDING BRANCHES
At close of business February 20th, 1919.
RESOURCES
Gold with Federal Reserve Agent. .. .. . ..... . .... ........ $ 47,784,750.<::::'
Gold Coin and Certificates & Redemption Fund. . . . . . . . . . .
6,744,059.70
Gold Held with Foreign Agencies. . . . . . . . . . . . . . . . . . . . . . . .
291,443.73
Credit Balances, Gold Settlement Fund ... ...... ........ ·. . 36,945.,533..03
Legal Tender Notes, Silver Certificates and Subsidiary Coin. .
265,638.00
Total Reserve Cash ............ . . .. ... . . ..... ... ... $
Total Non-reserve Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Paper Rediscounts. . . . . . . . . . . . . . . . . . . . . . . . . .
Member Banks Collateral Notes. . . . . . . . . . . . . . . . . . . . . . . . .
Acceptances . . . ........... ~ . . . . . . . . . .. . . . . . . . . . . . . . . . . .
U . S. Bonds to Secure Circulation. . . . . . . . . . . . . . . . . . . . . . . .
Other U. S. Bonds..................... ....... .. ...... .
U. S. Certificates of Indebtedness to Secure Circulation. . . . . .
U. S. Certificates of Indebtedness. . . . . . . . . . . . . . . . . . . . . . . .
B,tnk Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from other Federal Reserve Banks. . . . . . . . . . . . . . . . . . .
Due from Depository Banks & Tru__g_ CQ_mpanies. . . . . . . . . . .
:Qt1t__fr.om- Bt=-anc-hes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,031,424.46
8,780,812.78
29,887,832.60
40,426,383.26
10,863,560.88
8,000,000.00
867,700.00
5,320,000.00
96,000.00
400,000.00
10,11 7,864.84
18,960,702.37
3,418,366.12
1,254,405.99
Total Resources . . . .............. .. ...... . . .. ..... $230,425,053.30
LIABILITIES
Capital Paid In .. ... .. .. ...... ........ .. ...... ......... $ 3,711,900.00
1,210,713.35
Surplus . . . ... ....... ..... .......................... .
Reserve Deposits, Net .......... .... .... ....... ...... .. . 66,930,335.58
U. S. Government Deposits, General Account ... ..... .. .. . . 14,411,125.49
U . S. Government Deposits, Special Account .. .. .. . ... . . . . 18,960,702.37
Federal Reserve Notes ........... . ... . ................ . 109,551,165.00
Federal Reserve Bank Notes ........... : ............... . 13,252,000.00
2,397,111.51
All Other Liabilities ............... .... ......... .... .. .
Total Liabilities .. ... . ...... ......... .... ...... .. . . $230,425,053.30
· CLEARINGS
Total Clearings for ,Week .. ........ : ............. . ... ... $127,223,741.12
Total Number of Items Handled. . . . . . . . . . . . . . . . . . . . . . . . .
343,439
@FedFRASER