The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
eview
OF
AGRICULTURE,
INDUSTRY,
TRADE
AND
FINANCE
AUGUST 1. 1945
Survey of Current Conditions
The economy of the Eighth District, as elsewhere
in the country, is in process of adjustment to the
conditions arising out of the transition from a two
to a one-front war. Although munitions production
schedules are being curtailed sharply, the produc
tion requirements of the Pacific war are still large.
Consumer income will decline in the months ahead,
but should remain substantially in excess of avail
able supplies of goods despite resumption of pro
duction of some durable items.
The War Production Board has announced that
munitions production in December, 1945 will be 30
per cent below March, 1945 output. Over-all muni
tions output is currently about 15 per cent below
March and thus will drop a like amount by the end
of the year. In terms of individual programs, out
put of guns and fire control equipment will drop
50 per cent from current levels by the close of 1945,
production of ships, combat and motor vehicles, and
communications and electronic equipment will de
cline by about one third each, aircraft by 20 per
cent, and miscellaneous equipment by 10 per cent.
The December schedule for ammunition output is
unchanged from July production. Cutbacks made
during the second quarter already have sharply re
duced production of aircraft, ships, guns, and
vehicles.
There is no hope of maintaining the current over
all level of industrial activity in the face of these
deep cuts in war production. W PB has lopped of?
about 150 industry control measures and is encour
aging resumption of civilian output in other ways,
but even with the abolition of all controls it is un
likely that expanding civilian manufacturing output
could replace in a short-run period the substantial
loss of war orders. Bottlenecks in labor, materials,
equipment, and transportation are certain to develop
that will retard resumption of civilian goods manu
facture.
IN D U S T R Y
In this district a downtrend in industrial activity
is now evident on the basis of current statistics.
Employment is declining and industrial power con
sumption is off. As a result of the rise early this
year, however, the level of activity remains some
what above a year ago. In June, consumption of
industrial electric power in the major cities of the
district was 2.0 per cent below May, but 10.5 per
cent above June, 1944.
Employment— Manufacturing employment in the
Eighth District is declining rather sharply at pres
ent and the decline promises to continue at least
for the next few months. From late fall on, if the
Japanese war continues, it is possible that manu
facturing employment will be relatively stable with
increases in civilian production offsetting declines
in war output.
Employment at major war plants in the Eighth
District in June was 9 per cent below January and
was off 14 per cent from the peak reached in the
late fall of 1943. Declines in war plant employ
ment are taking place in most of the major cities
of the district but are more pronounced at St. Louis
than at the other industrial centers. Elsewhere in
this Review there appears an article on cutbacks in
the St. Louis area. As a result of the decrease in
major munitions plant employment, labor supply
either exceeds or is in balance with demand in every
(Continued on Page 8)
The Meat Situation
The current tight situation in meat is perhaps the
most troublesome food problem that faces the
country today. Of all war-created civilian short
ages, the one in meat has most perturbed the average
American. There are perplexing problems in all
phases of the industry—production, processing, and
distribution— that defy easy solution.
The Eighth District has a large stake in the meat
industry since livestock production is a major agri
cultural activity throughout the region and meat
packing is an important segment of the district’s
industrial structure. In 1940 cash farm income from
livestock and livestock products represented nearly
60 per cent of the $650 million total farm income in
the district. A large part of this livestock income
came from sale of meat animals.
Meat packing is widely scattered throughout the
district in both large and small plants. The major
district cities have sizeable meat packing industries,
with St. Louis leading for the district. In 1939,
the latest year for which Census data are available,
meat packing-wholesale ranked fourth among all
industries in the St. Louis industrial area in value
added by manufacture and was third in number of
wage earners employed.
civilian meat consumption has until recently been
above the 1935-39 average of 126 pounds. In 1940
and 1941 per capita consumption amounted to about
141 pounds. It declined slightly during the next
two years but, when civilian rations were increased
in 1944, per capita civilian consumption increased
to almost 150 pounds. As the supply situation be
came tighter, the point values on meats were in
creased and consumer supplies were further re
stricted. During the second quarter of this year per
capita civilian meat consumption was reduced to an
annual rate of about 115 pounds. While some im
provement is indicated for the latter half of the year
since the Government will take a smaller percentage
of the total supply, total per capita consumption
for the year as a whole is not likely to exceed 120
pounds. On the basis of present high consumer
purchasing power it has been estimated that without
controls per capita meat consumption would be at
the rate of about 170 pounds annually.1
CHART I
MEAT CONSUMPTION PER CAPITA IN THE UNITED STATES
In Pounds
In Pounds
B A S IC C A U S E S O F M E A T S H O R T A G E
Basically the meat shortage in the United States
has been due to the fact that the increased supplies
of meat did not keep pace with the even sharper
increase in demand. Americans have always been
large consumers of meat. Demand for meat is elas
tic and as consumers’ incomes rose under the impact
of war spending, one of the early effects was to in
crease the demand for meat and meat products.
Meat rationing was instituted in April, 1943, when
it became obvious that civilian demand was out
running supply.
Between 1935 and 1939 the United States pro
duced on the average about 16.5 billion pounds of
meat annually. Production showed a steady increase
during the war years and reached a record-breaking
total of 25.2 billion pounds in 1944. This year meat
supplies will decline by about 10 per cent to a total
of 22.6 billion pounds. Output of beef and veal is
expected to rise to another new high, but pork pro
duction will be down about 20 per cent. The current
reduced meat supplies, even though still substan
tially above prewar levels, come at a time when the
needs of the armed services are still rising and when
domestic purchasing power is at its wartime peak.
As shown on the accompanying chart, per capita
Page 2
1935-39 Average
1940
1941
1942
1943
1944
1945
SOURCE: United States Department of Agriculture
In addition to quantities consumed as a result of
high civilian demand, substantial amounts of meat
have been taken by the armed services and for ex
port to our Allies. In 1944 the requirements for the
armed services, which include relief feeding,
amounted to about 4 billion pounds, while exports
including lend-lease shipments totaled about 2 bil
lion pounds. In 1944 lend-lease exports were about
6.5 per cent of total meat supply. The require
ments for the armed services are still rising and are
expected to amount to about 5.4 billion pounds this
!H . Rept. 504, 79th Cong., 1st sess., P. 5— Preliminary Report of the
Special Committee of the House of Representatives to Investigate Food
Shortages, May 1, 1945.
year, which will be offset to some extent by a drop
in exports.
P R O B L E M S O F T H E L IV E S T O C K P R O D U C E R
Prices and feed supplies are of primary concern
to the livestock farmer. In the absence of reason
able assurance that price-feed relationships will
make feeding profitable, the farmer has little incen
tive to increase production.
During the early war years feed was plentiful,
demand strong, and prices of meat animals ad
vanced rapidly. As a result livestock production
rose sharply. As shown on the accompanying chart
between 1939 and 1944 cattle numbers jumped from
66 million to 82 million. Hog numbers increased
from 50 million to 84 million. Sheep numbers also
rose temporarily but subsequently declined and in
1944 were about the same as in 1939.
To some extent the basis of the livestock farmer’s
preoccupation with prices and feed supplies lies in
the length of the livestock production process. For
hogs the average period from breeding time to mar
keting is ten to twelve months. For cattle it runs
from twenty-four to thirty months. For lambs pro
duced in this area the time required is about the
same as for hogs.
Because of this situation, livestock production is
a hazardous occupation. Feed surpluses and good
prices at breeding time may disappear by feeding
and marketing time. While the producer’s position
is hazardous enough, that of the feeder is even more
so, for his profit depends almost entirely upon
maintenance of prices during his feeding operation.
The hog farmer, and to a large extent the sheep
farmer, raise, feed, and market for slaughter their
CHART U
NUMBER OF CATTLE ON FARMS IN THE UNITED STATES
Millions of
January 1 of Each Year
Millions of
Head
Head
own production. Many cattle, however, are pro
duced on the western ranges, fed on grass up to
certain weights, and then sold to feeders for finish
ing. A feeder who buys western cattle usually
places them on intensive pasture and grain feeding
programs which may run from three to twelve
months depending upon the size of the cattle pur
chased. Feeding operations are very important in
the Corn Belt states and are quite extensive in the
Eighth District.
In 1944 the livestock producers and feeders came
face to face with the conditions which they tradi
tionally fear. Animal numbers were high, feed
became scarce, and prices broke. The strain on the
available feed supply became so heavy that animal
numbers had to be reduced. Since grain feed re
quirements are greatest for hogs, and since the hog
production cycle is relatively short, emphasis went
on curtailment of hog numbers. The War Food
Administration recommended a 15 per cent reduc
tion in the pig crop and to that end announced a
reduction in future support prices on hogs. Record
marketings had already broken the hog market to
the then current support prices.
As a result of these factors, hog producers cut
last year’s spring pig crop by 30 per cent instead of
the 15 per cent recommended. This action largely
accounts for the present meat shortage. At the be
ginning of 1945 hog numbers totaled 61 million, or
23 million less than a year earlier.
To promote greater hog production (the goal for
the 1945 fall pig crop is 37 million animals), the
W ar Food Administration has announced a hog
support program that will not be changed prior to
September 1, 1946. All weight limits have been
abolished and the support price set at $13 per cwt.
(Chicago basis) for good and choice butcher hogs.
This action, together with the present favorable
corn-hog ratio, should go far to increase output
unless this year’s corn prospects should deteriorate
further.
The main problem with respect to beef produc
tion relates to feeding operations. The bulk of sup
plies of beef cattle now reaching the market con
sists of lower grade animals with the percentage of
choice beef and veal practically cut in half from its
prewar level because of the decrease in heavy grain
feeding. No minimum prices for cattle have been
established and there is the large total of some 81
million cattle on farms. In view of the price uncer
tainties inherent in this situation, there is consider
able reluctance to start intensive and prolonged
feeding programs.
Page 3
The Government has recently established a sub
sidy of 50 cents per cwt. payable to sellers of choice
and good grade cattle weighing 800 pounds or more
when marketed for slaughter, which have been
owned by the seller for at least thirty days. Not
withstanding the subsidy there is considerable doubt
in the minds of cattlemen as to whether the present
spread between the cost of feeders and the price of
finished cattle offers a sufficient margin of profit to
justify assuming the many risks incident to a cattle
feeding operation. The current relatively narrow
spread between feeders and finished cattle is due
largely to the increased butcher demand for unfin
ished cattle to satisfy the high consumer demand
for meat regardless of grade.
The average price of choice fed cattle weighing
from 900 to 1,100 pounds at National Stockyards,
East St. Louis, for the week of July 7 was $17.34
per cwt. During the same week choice feeder cattle
weighing from 500 to 800 pounds cost the feeder an
average of $15 per cwt. Using gains based on Mis
souri University feeding tests, the feeder’s prospects
can be illustrated by the following example: A
1,046 pound steer at $17.34 per cwt. would bring a
total of $181. Present subsidy allowance would add
an additional $5 to the value of the steer, making a
total to the farmer of $186.
A 768 pound feeder at a cost of $15 per cwt. would
represent a total outlay of $115. The necessary feed
to put on 278 pounds of gain in a dry lot operation
would cost at present prices a total of $46. The
average shrinkage from the feed lot to market, plus
the costs of transportation, commission, insurance,
etc., represents an additional cost of $12, making
the total cost of the steer $173. This would leave a
profit of $13 to the farmer which is a narrow mar
gin to cover his labor and the risks involved in the
operation. A decline of only $1.25 per cwt. in the
market price of the finished product would com
pletely eliminate his profit. Moreover, the above
figures use estimates based upon much better feed
ing conditions than exist on the average farm, allow
for no death losses, and assume that all steers in a
given operation will finish out to a uniform choice
grade.
PROBLEM S OF T H E M E A T PACKER
The American meat packing industry has been
concentrated in the middle west since the advent of
modern transportation and the invention of the re
frigerated railroad car in the 1880’s. The country’s
livestock market and meat packing centers such as
Chicago, St. Louis, Omaha, Kansas City, and St.
Paul form a bridge between the great meat pro
Page 4
ducing areas of the west and mid-west and the
heavily populated industrial regions of the northeast
and east.
The meat packing industry may be divided in two
ways. On the basis of size the packers break into
two groups: the Big Four (Swift, Armour, Wilson,
and Cudahy who control about half of the business)
and the rest of the industry made up of the medium
sized and small packers. On the basis of inspection
they may be separated into Federally inspected
plants on the one hand and locally inspected plants
on the other.
For the mosjt part the large and medium-sized
packers are Federally inspected, while the smaller
units have local inspection. Only the former are
allowed to ship interstate, a situation that in normal
times causes no particular difficulties since supply
is abundant, but which at present has aggravated
local meat shortages through the maldistribution of
supplies. All military supplies are required to come
from Federally inspected plants which thus have
less meat than usual for their civilian trade. Local
packers even when they have large supplies on hand
cannot ship interstate to relieve temporary maldis
tribution. The Department of Agriculture is now
attempting to have the inspection laws modified so
that meat from local packing houses that are proper
ly certified as meeting required sanitary standards
could be shipped interstate and accepted for Gov
ernment purchase.
In the main, the large packers which operate
nationally have distinct competitive advantages.
They handle multiple lines of goods such as dairy
products and other perishable commodities. They
process by-products such as glue, hides, and vitamin
preparations. They are better organized to buy in
public markets and to sell in the most profitable
localities. Consequently the large packers can handle
profitably animals which have a low ratio of dressed
meat to live animal weight. In the case of steers
and lambs, for example, 40 to 60 per cent of live
weight is not meat. The small packer has difficulty
in making a profit on such animals and tends to
concentrate upon hog slaughter since the average
hog is 70 to 75 per cent meat.
General Government policy of strict price control
on meat at wholesale and retail levels coupled with
high livestock prices has tended to narrow packers’
margins. The squeeze has been more pronounced
on the small packers than on the large ones because
of the advantages enjoyed by the large operators
particularly in by-product utilization.
Certain problems are common to both large and
small packers. Meat is a perishable product and
either must be sold fresh or stored or processed.
Since supply and demand fluctuate considerably and
price changes may be both rapid and severe, the
value of inventories may rise or fall substantially,
resulting in either unexpected profits or heavy losses
for the industry.
Packers’ facilities must be large enough to handle
seasonal peaks in livestock receipts. This means
excess capacity and high overhead costs for slack
periods of the year, expenses that are normally
made up on a full year’s operations.
The industry generally believes that these factors
of inventory vulnerability and seasonal operating
losses are inadequately recognized by Government
price regulation and strong efforts are constantly
being exerted to obtain relief. Relief could come
from either higher retail prices or lower farm prices.
Since Government policy is directed toward holding
retail prices down the packers’ margins have been
provided to an increasing extent by higher Gov
ernment subsidies.
OUTLOOK
F O R T H E M E A T IN D U S T R Y
The short-run outlook for civilian meat supplies
is for a continuation of the present tight situation,
modified slightly by anticipated increases in cattle
marketings this fall, but with little prospect for
appreciable relief before next year when hog sup
plies should be higher than in 1945. Hope for in
creased meat for civilians during the balance of 1945
rests mainly upon the effort to improve methods of
distributing the available supply and to curtail black
market operations. Neither is likely to add very
much meat to the civilian larder.
The industry, therefore, has a very favorable
short-run domestic, demand situation. In addition
the European export market will be strong for per
haps two more years, until European livestock can
be increased in number. The immediate problem
thus is mainly one of supply rather than of demand.
Over the longer run the prospects for the indus
try depend largely upon maintenance of high income
levels in this country which would assure high per
capita meat consumption. After W orld W ar I
domestic unemployment and loss of wartime export
markets broke meat prices in 1921 and left both
producer and packer with heavy losses arising from
the large stocks of live animals and processed meats
held.
Meat producers and packers face no technical re
conversion problems. There will be continued need
to diminish seasonal fluctuations in supply and de
mand. Increased livestock production in the south
with its longer pasture seasons, may be expected to
result in longer and more balanced marketing
periods for meat animals. Research in better by
products should continue and the industry plans to
offer new products in the form of frozen and partly
precooked meat dishes. While efforts in these di
rections have had only limited success in past years,
modern refrigeration equipment with deep-freezing
compartments should make it possible in the future
for many American householders to enjoy fresh
meats of equal quality the year ’round.
H . S. M a as
Effect of Contract Cancellation In St. Louis
In the period since the end of the European war
the St. Louis area1, in common with other large in
dustrial regions in the United States, has exper
ienced many cancellations of large war contracts.
These cancellations are leading to a sharp decline in
employment and payrolls at major war plants. This
article attempts to appraise the magnitude of the
prospective employment decline during the next
few months and to call attention to some of the
ways in which the loss of income of displaced
workers will be partially offset.
Major war plant layoffs in the St. Louis area
announced since the end of the war in Europe total
some 45,000 workers. About 12,000 of these were
*St. Louis City and County, and St. Charles County, M issouri; Madison
and St. Clair Counties, Illinois.
laid off by the close of June while most of the re
mainder will be dismissed during July, August, and
September. The St. Louis Ordnance Plant, largest
small arms ammunition plant in the world, is
scheduled to shut down completely by September 1.
Curtiss-Wright’s big aircraft factory, which has
recently been producing large two-motor transport
planes, will close its doors at about the same time.
Amertorp, producer of torpedoes, will stop opera
tions by November 1. All three plants are currently
laying off workers. National Carbon’s battery plant
has already closed. Employment has decreased or
is declining at General M otor’s Chevrolet Division
plant (artillery shells), McQuay-Norris (bullet
cores), Busch-Sulzer (marine engines), Emerson
Page 5
Electric (aircraft gun turrets), AtlaS Powder
(T N T ), and several other major war plants.
T H E ST . L O U IS W A R P R O D U C T I O N R E C O R D
In 1939 total manufacturing employment in the
St. Louis area averaged 162,000 and the value of
manufactured goods produced was $1.1 billion. In
1943 the number of industrial workers employed
averaged about 300,000 with a peak of 320,000 in
the late fall. Although manufacturing employment
declined subsequently, it appears that actual physi
cal production until very recently ran almost as
high as in late 1943 because of greater productivity
and longer hours. For the past 30 months the phy
sical output averaged about 2.5 times the 1939 rate
and as a result of price increases the value of pro
duction probably averaged 3 times that of 1939. The
total value of output in the St. Louis area since
Pearl Harbor is estimated to have exceeded $10
billion.
The net value of all major prime war contracts
(those of $50,000 or more each, excluding food con
tracts) placed in the region through the present
time is slightly less than $3 billion. Most of the
subcontract work under these prime contracts went
to St. Louis manufacturers. In addition the area
received a substantial volume of subcontracts orig
inating from prime contracts placed outside St.
Louis. No accurate data on such subcontract vol
ume are available, but it undoubtedly has run into
a very large figure, perhaps as much as $1.5 or $2.0
billion. These estimates place the total volume of
the major prime contracts and the subcontracts for
war production in the St. Louis area at from $4.5
to $5.0 billion.
About half of the war contracts placed in the St.
Louis region have been listed as completed by the
War Production Board. In addition deliveries have
been made equivalent to perhaps half of the volume
called for under the open contracts. The foregoing
figures indicate that approximately one-third of the
total manufactured output in the area over the past
42 months was war goods. Almost two-thirds, how
ever, was civilian production (including military
food orders which were large because of the import
ance of the food processing industry in the area).
T H E IM M E D IA T E O U T L O O K F O R M A N
U F A C T U R IN G E M P L O Y M E N T
These rough figures serve to indicate the outside
limits of the effect which war production cut backs
could have on employment. If all war contracts
were cancelled and not replaced with any civilian
manufacture, St. Louis might expect to lose em
Page 6
ployment for about one-third of its manufacturing
workers. Actually, of course, a substantial volume
of war orders remains on St. Louis industry’s books,
and part of the loss in war orders will be offset by
rising civilian output.
The chart shows total manufacturing employ
ment and employment at 36 major war plants in
the St. Louis area from August, 1942 to date. Dotted
lines represent projected employment through Octo
ber, 1945. As can be seen, manufacturing employ
ment dropped sharply in late 1943 and early 1944
when a series of munitions cutbacks hit the St.
Louis area. Employment, however, began to rise
again late in 1944. June employment of 260,000
workers marked the first appreciable drop since the
secondary peak was reached earlier in the year.
Total manufacturing employment followed war
plant employment very closely throughout the entire
period. W ar plant employment by November 1, as
projected, will be 35,000 less than in June, while
total manufacturing employment is expected to be
off 20,000 to 25,000 from the June level since there
will be some increase in workers in the so-called
less essential manufacturing lines.2
T H E E F F E C T O F E M P L O Y M E N T R E D U C T IO N S
O N W O R K E R IN C O M E
An employment decline of the magnitude indi
cated (from 260,000 to 235,000) would lead to a
substantial decrease in worker income if it were
not offset in part either by wages from jobs in non
manufacturing lines or by unemployment benefits.
On the basis of the indicated employment drop
factory payrolls in St. Louis would decline by
some $40 to $45 million on an annual basis.
Some of the laid-off workers will wish to leave
the labor market. This is particularly true among
the group of over-age workers and married women
who are now working in war plants. The number
who will leave voluntarily cannot be estimated with
any accuracy. In the previous period of layoffs at
major war plants from September, 1943 to about
May, 1944 it is estimated that over 85 per cent of
the displaced workers filed initial claims for unem
ployment insurance benefits indicating that a sur
prisingly high proportion of the workers wished to
continue in the labor market.
It is also difficult to estimate how many jobs will
be available for those workers who are unable to
find jobs in manufacturing but who wish to stay in
the labor market. There is an unfilled demand for
2The St. Louis district office of the U. S. Employment Service
has on file orders for some 14,0,00 workers. Perhaps 11,000
represent orders for factory employees.
Assuming that all
factory jobs will be filled, a somewhat optimistic assumption,
turing employment would still fall to about 235,000.
currently
of these
of these
manufac
workers in nonmanufacturing fields but these lines
are unlikely to be able to take up all the employ
ment slack during the period of heavy layoffs at
war plants. Also, many of the war plant workers
will not be qualified for the types of jobs that will
be open in other lines. For example, the War De
partment has announced that part of the St. Louis
Ordnance Plant will be utilized as a records office
which will provide substantial employment. Most
of the employees will, however, be in the clerical
group. T o some extent seasonal expansion in non
manufacturing lines will tend to absorb workers
during the later months of the year.
The displaced manufacturing workers who can
not find employment in nonmanufac.turing lines will
in most cases fall back on unemployment insurance
for current income. Virtually all laid-off workers are
covered by unemployment compensation; perhaps
less than 10,000 manufacturing workers in the entire
area are excluded from coverage. In the Missouri
portion of the area employers of eight or more
workers and in the Illinois portion employers of six
or more workers in twenty weeks of any year come
under unemployment compensation law.
In general the provisions of the Illinois law are
somewhat more liberal than those of Missouri, but
since four-fifths of all manufacturing workers in the
area come under Missouri coverage and most lay
offs so far announced are in Missouri establish
ments, the provisions of the Missouri law will have
most effect upon worker income. The maximum
weekly benefit in Missouri is $18 and the maximum
duration of benefit payments is 16 weeks. There is
pending in the Legislature a bill to raise the benefit
EMPLOYMENT IN MANUFACTURING PLANTS AND MAJOR W A R PLANTS
S t Louis Area
Thousands o f Employees
Thousands o f Employees
to $24 and the duration to 26 weeks, but it seems
improbable that this will be enacted in time to be
of benefit to workers currently being displaced.
Most of the laid-off workers will be eligible for
maximum benefit payments over a 16 week period.
The Missouri law provides that the amount of the
weekly benefit for total unemployment shall not
exceed 4 per cent of the worker’s earnings in the
highest quarter-year of the base period and that
total benefits shall not exceed one-fifth of the earn
ings in the base period. The base period consists
of the first eight quarters of the nine quarters preceeding the benefit year. A worker must have
earned income in at least three different quarters of
the base period to be eligible for unemployment
benefits. These provisions mean that a worker must
have earned at least $450 in a three-month period
during the base period to be eligible for maximum
compensation and that his total earnings during the
base period must have been at least $1,440. Most
of the currently laid off workers and those whose
dismissal is in prospect appear to meet the condi
tions of eligibility for maximum benefits.
Until late in July the volume of compensation
claims filed by displaced workers was not very
great. During the first six months of this year
total claims of all types (including those filed by
returning servicemen) averaged from 300 to 600 per
week at the St. Louis office, which handles St. Louis
City and County. By mid-July they were running
about 3,000 and by the close of the month over
5,000 per week.
In Missouri there is a one-week waiting period
between the initial filing date for a claim and the
time when a claimant becomes eligible for unem
ployment insurance. As the law is administered,
claimants are generally allowed three or four weeks
to find a new job at comparable wage rates and
under working conditions roughly comparable to
those of the job last held. If such a job is not
found in that time, however, the claimant is ex
pected to accept other suitable employment, which
usually means employment at lower wage rates. Up
to the present time employment at comparable wage
rates or other suitable employment has generally
been available, but it is doubtful whether this situ
ation will continue for much longer. Unemploy
ment compensation payments are likely, therefore,
to rise fairly rapidly over the next few months. They
may be expected to provide the equivalent of about
half the prospective loss in factory payrolls.
On balance, the cutbacks announced to date in the
St. Louis area should not produce an over-all decline
Page 7
in income from wages and salaries in the next six
months of more than $10 million. Total manufac
turing payrolls during the last six months amounted
to over $300 million. The loss in income would, of
course, be increased should the Japanese war end
suddenly. Moreover, unless non-manufacturing lines
are able to absorb the workers laid off by manufac
turing, a further decline in income will occur when
unemployment insurance benefits cease.
CU RREN T CONDITIONS
(Continued from Page 1)
important district city except Louisville and Pine
Bluff. There are still shortages of male workers in
Pine Bluff and of both male and female workers in
Louisville.
Munitions Output — Production at district war
plants is dropping just about as rapidly as war
plant employment. The major items being cut back
at present in the district are ammunition and ship
building. In general district output of communica
tions and electronic equipment and miscellaneous
war items is continuing in good volume. Rocket
production at the new district establishments is
expanding sharply. Nationally, rocket output is
scheduled to increase to 250 per cent of the present
production rate by the end of the year.
Other Manufacturing— In addition to the marked
drop in war production in June other district manu
facturing in the aggregate was somewhat below
May, although it was in slightly greater volume
than in June, 1944.
Most district whiskey distilleries produced bever
age spirits or whiskey instead of industrial alcohol
in July. A few, however, exercised the option of
continuing to produce alcohol primarily because
corn was not available for whiskey making. At the
end of June, 53 Kentucky distilleries were in oper
ation, one less than a month earlier but 3 more than
on the same day of 1944. For the first half of this
year distillery operations have averaged a some
what higher rate than in the comparable period last
year.
A G R IC U L T U R E
P R IC E S
(In thousands
CASH F A R M IN C O M E
________ May______
Cumulative for 5 months
o f dollars)
1945
1944
1945
Arkansas................ $ 15,014$ 16,509 $
Illinois.................... ....96,725
102,622
Indiana.................. .....53,833
54,947
18,739
Kentucky.............. ..... 17,974
Mississippi............ .....12,207
13,794
54,295
M issouri................ .....53,470
Tennessee.............. .....16,548
21,513
T otals................
265,771282,419
1944
90,547
450,360
244,155
212,612
92,715
242,607
119,135
1,452,131
1943
$ 83,342
493,842
267,199
165,837
71,583
257,278
120,450
$ 88,925
438,628
248,579
135,869
70,807
222,832
103,80.1
1,459,531
1,309,441
R E C E IP T S A N D S H IP M E N T S A T N A T IO N A L STOCK Y A R D S
________ Receipts_______
Shipments
June, May,
June,
June,
May,
June,
1945
1945
1944
1945
1945
1944
|Cattle and Calves.......... 136,384 126,479 137,756
; H o g s.................................147,507 167,842 282,025
j Horses and M ules.......... 3,964 3,089 2,224
i Sheep............................... 172,172 168,517 148,745
j
In the district steel industry the operating rate
at ingot producing mills averaged 75 per cent in
June as compared with 78 per cent a month earlier
and 79 per cent in June, 1944. Foundry production
was also off. The supply situation for finished
steel items is still fairly tight and orders are backlogged for some months into the future. Allocation
of steel for civilian goods manufacture is not yet
particularly large, but civilian orders should be in
creased in the near future since steel is basic to most
civilian durable goods.
90,872 86,437
46,409 53,174
3,964
3,069
94,563 101,919
71,680
50,821
2,221
81,184
Totals.......................... 460,027 465,927 570,750235,808 244,599 205,906
i.
Page 8
Shoe production at district factories in June was
slightly higher than in May and was 9 per cent
above a year earlier. Factory labor is somewhat
easier to procure and leather supply is apparently
in greater volume than at this time last year. Meat
packing activity in June was below the high level
of the first part of this year. Lumber output at
district mills moved up slightly. The rise in pro
duction of lumber is due to increased hardwood
W H O L E S A L E P R IC E S IN T H E U N IT E D STATE S
Bureau of Labor
Statistics
June,
May,
June,
June,’45 comp, with
(1926=10.0)
1945
1945
1944
May,'45
June,'44
AH Comm odities.. 10.6.1
Farm P rod u cts., 130.4
Foods................... 107.5
Other...................
99.6
Bureau of Labor
Statistics
(1935-39— 100)
May 15,
1945
106.0
129.9
107.0
99.4
+ 0 .1 %
+ 0 .4
+ 0 .5
+ 0 .2
-j- 1.7%
-j- 4.3
+ 0.9
+ 1.1
COST OF L IV IN G
Apr. 15, Sept. 15,
May 15,'45 comp, with
1945
1942
Apr. 15/45
Sept. 15/42
United States........ .... 128.0,
St. Louis................. 126.3
Memphis.............
*
*Not available.
• Bureau of Labor
Statistics
(1935-39=100)
104.3
125.0
106.5
98.5
May 15,
1945
U. S. (51 cities). . .
138.8
St. L ouis..................141.7
Little R ock ..............138.0
Louisville.......... ..... 131.9
Memphis..................146.9
127.1
125.2
*
117.8
116.6
119.3
COST OF F O O D
Apr. 15, Sept. 15,
1945
1942
136.6
139.0
137.6
130.6
145.2
126.6
126.7
129.2
124.2
129.7
+ 0.7%
+
8.7%
+ 0.9
+
8.3
................................
May 15/45 comp, with
Apr. 15/45
Sept. 15/42
+ 1.6%
+ 1.9
+ 0.3
+ 1.0
+ 1.2
+ 9 .6 %
+ 1 1 .8
+ 6.8
4- 6.2
+13.3
production as southern pine output in June was
slightly lower than in May.
Mining and Oil— Production of coal at district
mines in June totaled 15.5 million tons as compared
with 15.0 million tons in May and 14.7 million tons
in June, 1944. This increase in coal output comes
as somewhat of a surprise in view of the difficult
labor situation and the apparent decline in employ
ment. Activity in light metals mining—zinc, lead,
and aluminum— continues at well below wartime
peak operations. Current supply of these metals is
fairly easy. The daily average production rate at
district oil wells in June was up slightly from both
a month and a year earlier.
Construction— For the past few months con
struction activity in this district has been expand
ing and is running considerably ahead of the like
period in 1944. Construction contract awards in
June in the Eighth District (F. W . Dodge figures)
totaled $29 million as compared with $9 million in
June, 1944. Building permits granted for new con
struction and repairs in the major cities of the dis
trict in June were 19 per cent above a year earlier.
TRADE
Despite the incidence of war contract cancella
tions and prospective layoffs at major war plants,
the sales volume of retail trade lines reporting to
this bank in June was substantially higher than a
year earlier and in the aggregate showed no appre
ciable change from May, although a normal sea
sonal decline might be expected at this time of
IN D U S T R Y
June,’45
May,’45
June,*44
6,079
Illinois....................
Indiana..................
2,196
Kentucky................ 5,820
Other dist. states..
1,454
Totals.................. 15,549
5,590
2,178
5,790
1,484
15,0,42
5,956
2,104
5,064
1,534
14,658
(K .W .H .
inthous.)
June,’45 comp, with
May,’45
June,’ 44
+ 9%
+ 1
+ 1
— 2
+ 3
+ 2%
+ 4
+15
— 5
+ 6
C O N S U M P T IO N OF E L E C T R IC IT Y
No. of June,
May,
June,
June, 1945
Custom- 1945
1945
1944
compared with
ers* K.W.H,. K .W .H . K .W .H . May, 1945 June, 1944
Evansville........
40
10,0,10
Little R ock ___
35
3,384
Louisville........
82
18,146
Memphis..........
31
6,815
Pine B luff........
19
7,558
St. L ouis.......... 141
102,658
Totals.......... 348
148,571
*Selected industrial customers.
10,259
3,045
18,084
6,947
6,572
106,620,
151,527
7,890
3,286
17,409
6,184
7,546
92,151
134,466
— 2.4%
+11.1
+ 0.3
— 1.9
+15.0
— 3.7
— 2.0
+ 26.9 %
+ 3.0
+ 4.2
+10.2
+ 0.2
+ 11.4
+10.5
L O A D S IN T E R C H A N G E D F O R 25 R A IL R O A D S
A T ST. L O U IS
First nine days
June,’ 45 May,’45 June,’44
July,’45
July,’44
6 mos.’ 45
6 mos.'44
156,800
173,952 160,734 '
40,647
44,747
Source: Terminal Railroad Association of St. Louis.
In general the rise in department store sales over
last year has been fairly evenly distributed over the
district, with only Fort Smith, Arkansas, Evans
ville, Indiana and a few smaller cities lagging ap
preciably behind the district average gain. In St.
Louis, where heavy contract cancellation has taken
place and where layoffs of war workers are expected
to total 45,000 by this fall, June sales at department
stores were 20 per cent higher than a year ago and
were up 3 per cent from May. For the year to date
the sales gain in St. Louis over the comparable
period in 1944 was 15 per cent.
A G R IC U L T U R E
Despite one of the most backward seasons ever
experienced, the outlook for Eighth District crops,
with the exception of corn, tobacco, and cotton, is
fairly good. Cool weather during June and early
July slowed plant development and delayed matur
ity with corn in particular being affected unfavor
ably. Small grains, which had reached the filling
stage, and hay and pasture growth, however, were
benefited by the unusual temperatures. Reduced
rainfall in July afforded Eighth District farmers the
season’s best field working conditions. By mid-July
D E B IT S T O
C O A L P R O D U C T IO N
(In thousands
of tons)
year. As compared with June, 1944, sales volume
at department stores was up 18 per cent, at men’s
furnishings stores 22 per cent, at women’s apparel
stores 39 per cent, and at retail shoe stores 26 per
cent. Furniture stores also registered a consider
able increase in sales with June volume 14 per cent
over that of the comparable month last year.
971,741
959,706f
fRevised.
(In thousands
of dollars)
D E P O S IT A C C O U N T S
June,
1945
May,
1945
June,
1944
El Dorado, Ark.......... . $ 11,337
25,060
Fort Smith, Ark........ .
Helena, A rk...............
3,865
.
91,717
,
16,649
Texarkana, Ark.-Tex. .
11,269
Alton, 111.................... .
18,0.64
E.St.L.-N at.S.Y.,Ill..
80,679
Quincy, 111..................
18,775
Evansville, Ind.......... , 108,618
Louisville, K y............ , 518,962
Owensboro, Ky.
21,378
Paducah, K y.............. .
10,,357
Greenville, Miss.........
8,113
Cape Girardeau, M o..
5,452
Hannibal, M o.............
5,319
Jefferson City, M o ... .
22,138
St. Louis, M o............. 1,242,904
Sedalia, M o................
6,713
Springfield, M o.. . . . .
36,067
Jackson, Tenn............ .
10,171
Memphis, Tenn..........
290,037
$ 10,0,37
22,983
4,242
90,420
15,001
11,855
14,812
68,059
18,400
104,129
373,520
16,872
9,080
9,060
5,789
5,163
20,277
1,235,956
6,935
35,276
9,527
275,954
$ 10,816
25,648
3,791
70,677
15,972
11,160
16,953
82,377
18,990
110,219
428,571
17,829
10,666
10,471
5,457
5,163
22,518
1,208,519
6,876
33,568
8,930,
249,804
+ 13%
+ 9
— 9
+ 1
+ 11
— 5
+22
+ 19
+ 2
+ 4
+39
+27
+ 14
— 10
— 6
+ 3
+ 9
+ 1
— 3
+ 2
+ 7
+ 5
+ 5%
— 2
+ 2
+30
+ 4
+ 1
+ 7
— 2
— 1
— 1
+21
+20
— 3
— 23
-0+ 3
— 2
+ 3
— 2
+ 7
+ 14
+16
2,563,644
2,363,347
2,374,975
+
+ 8
June,’45 comp, with
M ay,*45 June/44
8
Page 9
R E T A IL T R A D E
D E P A R T M E N T STORES
Net Sales
June, 1945
6 mos.’ 45
compj
with
to same
May,’45
me,’44 period ’44
Stocks
on Hand
June 30/45
comp. with
June 30,’44
Stock
Turnover
Jan. 1 to
June 30,
1945 1944
Ft. Smith, Ark.. — 10%
+ 9%
+ 10%
2.13 2.19
+ 16%
Little Rock, Ark. — 7
+16
+ 19
9
2.71 2.41
+
Quincy, 111........ - { - 3
+ 22
+ 13
2.50.
6
3.01
+
Evansville, Ind.. + 8
+ 8
+ 3
Louisville, K y ... +
+ 20f
+ 14f
' 2f
3.20f 2.68t
St. Louis A real, + 3
+20
+ 14
2.44 2.24
+ 17
St. Louis, M o .. . + 3
+20
+ 15
2.44 2.24
+ 17
E. St. Louis, 111. + 1 0
+ 12
+ 8
Springfield, M o.. — 3
+ 23
+ 21
2.55 2.03
+ ' ii
Memphis, Tenn.. — 11
+ 13
+ 13
2.74 2.49
+ 12
*A11 other cities. + 5
+ 10
8
+ 9
2.56 2.25
+
8th F. R. D ist.. - 0 -t
+ 18t
+ 1412.59f 2.34f
+ 14t
*E1 Dorado, Fayetteville, Pine Bluff, A rk .; Alton, Harrisburg, Jack
sonville, Mt. Vernon, 111. ; New Albany, Vincennes, In d .; Danville,
Hopkinsville, Mayfield, Paducah, K y .; Chillicothe, M o .; and Jackson,
Tenn.
ilncludes St. Louis, Mo., East St. Louis and Belleville, 111.
t Preliminary.
Trading days: June, 1945— 26; May, 1945— 25; June, 1944— 26.
Outstanding orders of reporting stores at the end of June, 1945, were
21 per cent greater than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding June 1, 1945,
collected during June by cities:
Instalment Excl. Instal.
Instalment Excl. Instal.
Accounts
Accounts
Accounts
Accounts
Fort Sm ith.. .
Little Rock . 34
Louisville.. .. 36
Memphis . . . . 45
64%
61
63
60,
Q u in cy ........
St. Louis. . . .
Other cities. .
8th F.R. Dist.
45%
44
30
41
75%
73
64
68
IN D E X E S O F D E P A R T M E N T STORE SALES AN D STOCKS
8th Federal Reserve District
June, May, Apr., June,
1945
1945
1945
1944
Sales (daily average), Unadjusted1.
, 198
Sales (daily average), Seasonally adjusted1..220
220
Stocks, Unadjusted2................................
.118
Stocks, Seasonally adjusted2..................
.123
1Daily Average 1935-39=100..
2Monthly Average 1923-25=100.
209
209
114
113
192
188
109
106
170
189
105
109
S P E C IA L T Y STORES
Net Sales
June, 1945
compared with
May,’ 45 June,’ 44
6 mos.’ 45
to same
period ’44
Stocks
on Hand
June 30,’45
comp, with
June 30,’44
Stock
Turnover
J a n .1 to
June 30,
1945 1944
Men’s Furnishings +2 2 % + 2 2 %
+ 9%
Boots and Shoes
+ 14
+ 10 + 2 6
Percentage of accounts and notes receivable outstanding June 1, 1945,
collected during June:
Men’s Furnishings.................. 66%
Boots and Shoes...........................55%
Trading days: June, 1945— 26; May, 1945— 25; June, 1944— 26.
R E T A IL F U R N IT U R E STORES
Net Sales
Inventories
Ratio
of
June, 1945
June 30, 1945
Collections
compared with
compared with
________ ________
May,’45 June,’ 44 May 31,’45 June 30,’44 June,’45 June,’44
St. Louis Area1. . — 5% + 17%
47%
47%
— 1%
+ 1%
— 6
St. Louis........
+20
— 1
49
48
+ 1
Louisville Area2. — 7
+ 13
— 13
34
33
+ 4
Louisville........, — 4
+ 9
32
33
— 14
+ 4
Memphis............
0
27
28
+ 5
+ 4
+ 2
+ 12
-0Little R ock........
— 2
31
28
+ *1
*
+ 20.
+20
38
32
Pine B luff..........
*
*
*
*
+ 39
+20
Fort Smith........
— 3
38
37
—
|—14
8th Dist.Totals3. — 2
+ 1
*Not shown separately due to insufficient coverage,, but included in
Eighth District totals.
ilncludes St. Louis, Missouri; East St. Louis, and Alton, Illinois.
2Includes Louisville, Kentucky ; and New Albany, Indiana.
3In addition to above cities, includes stores in Blytheville, Arkansas;
Evansville, Indiana; Henderson, Hopkinsville, Owensboro, Kentucky;
Columbus, Greenville, Greenwood, Starkville, Mississippi; Hannibal,
Springfield, and Cape Girardeau, Missouri.
P E R C E N T A G E D IS T R IB U T IO N OF F U R N IT U R E SALES
June,’45
May,’45
June,’44
Cash Sales.............................................
22%
Credit Sales............................................. 78
Total Sales........................................... 100
Page 10
" 22%
78
100
’
20.%
80
100
planting and replanting of crops was nearing com
pletion.
Corn— For the United States the July 1 estimate of
the U. S. Department of Agriculture points to a corn
crop of 2.7 billion bushels on an acreage 5 per cent
below that of 1944. Indicated production this year
is well below the 3.2 billion bushel crop of last year
but is about 10 per cent larger than the 10-year
(1934-43) average crop. This period includes two
extreme drouth years. For the Eighth District the
indicated crop on July 1 was 306 million bushels in
contrast to 367 million bushels produced in 1944.
Production decreases are particularly marked in
Illinois and Missouri with fairly substantial de
clines in all other Eighth District states except
Indiana and Mississippi.
Hay and Oats— July 1 indications point to a dis
trict oat crop of 61 million bushels this year as
compared with 54 million bushels harvested in 1944.
Indicated production in 1945 is higher than in any
year since 1920. With the exception of Missouri,
where production is likely to be somewhat below
average, anticipated net yields exceed those realized
in 1944. The tame hay crop in the district in 1945
is expected to be 8.7 million tons, almost 1 million
tons more than in 1944.
Rice—Total United States rice acreage in 1945 is
estimated at 1.5 million acres, 23 per cent above har
vested acreage last year. A crop of nearly 75 mil
lion bushels, some 6 per cent above the bumper 1945
crop, is in prospect. The Arkansas rice crop is
expected to be 13 million bushels, about 1.2 million
bushels below the 1944 harvest. Seedings were very
late this year, but conditions are improving at pres
ent and irrigation is now in full force.
Wheat— On July 1 the Department of Agricul
ture estimated the Eighth District winter wheat
crop at 54 million bushels as compared with 49
million bushels harvested last year. The district
harvest is well underway. Yields promise to be
above average even though rust and lodging have
damaged the crop in some areas.
For the United States an all-time record wheat
crop totaling an estimated 1,129 million bushels is
in prospect for 1945. The carryover of wheat on
farms on July 1 was estimated at 90 million bushels.
The wheat supply situation is the bright spot in the
over-all food and feed outlook.
Cotton— Progress of the cotton crop in the Eighth
District is reported as fairly good with condition
ranging downward from good to poor. The crop
is particularly late this year. Among district states,
1945 cotton acreage in Missouri is off 34 per cent
from a year earlier, in Arkansas and Tennessee off
9 per cent, and in Mississippi down 2 per cent. The
very unfavorable weather in the early planting sea
son, considerable flooding, and labor shortages have
brought about less plantings.
T o b a c c o — The largest United States acreage of
tobacco since 1939 was planted this year. On 1.8
million acres, 4 per cent more than in 1944, total
production for 1945 is forecast at 1.9 billion pounds
or 3 per cent less than the very high output of 1944,
but 36 per cent above 10-year average production.
The district crop is expected to amount to 352 mil
lion pounds in 1945 as compared with 384 million
pounds in 1944.
W H O L E S A L IN G
Data furnished by Bureau of Census,
U. S. Dept, of Commerce*
NEW
MEMBER
BANKS
Since the last issue of this Review, Peoples
Bank and Loan Company, Lewisville, Arkan
sas, The Cynthiana State Bank, Cynthiana,
Indiana, Bank of Ripley, Ripley, and The
Bank of Sharon, Sharon, Tennessee, have
become members of the Federal Reserve
System.
Stocks
June, 1945
Compared with
M ay,’45 June,’44
Automotive Supplies............................ . +
Boots and Shoes.................................... . —
•+
•+
Electrical Supplies................................ . +
. +
. —
. +
Plumbing Supplies................................ . —
Tobacco and its Products.................... • +
Miscellaneous........................................ . —
Total all l i n e s * * . ................................ —
*Preliminary.
**Includes certain lines not listed above.
3%
15
2
2
10
22
7
3
17
9
8
1
+
+
—
—
+
—
—
+
+
—
—
—
June 30, 1945
Compared with
June 30, 1944
18%
1
1
9
39
2
1
18
1
11
6
2
....%
— 35
+ 10
*—24
+ 5
— io
— 6
— 19
C O N S T R U C T IO N
(Cost in
thousands)
B U IL D IN G P E R M IT S
New Construction
Number
Cost
Number
1945
1944
1945
1944
1945
Evansville..........
Little R ock........
Louisville............
Memphis............
St. Louis............
June Totals........
May Totals........
3617
27
90
355
101
609
617
B A N K IN G A N D F IN A N C E
A seasonal upward movement in loan volume at
Eighth District banks has been raising loan totals
for the past several weeks. This rise was accentuated
during the Seventh War Loan drive by a rather
substantial increase in borrowing for the purpose of
purchasing or carrying Government securities. On
July 3, loans for this purpose at weekly reporting
member banks totaled $54 million as compared with
a pre-drive level of $22 million. Commercial, in
dustrial and agricultural loans at the reporting
banks were about $20 million higher at mid-July
than a month earlier with virtually all of the gain
concentrated at St. Louis and Memphis.
Bank investment portfolios expanded during and
shortly after the Seventh War Loan drive. Regu
lar bank subscriptions against their time and sav
ings deposits totaled about $75 million for all dis
trict banks. At weekly reporting banks total in
vestments rose about $100 million over the twomonth period from mid-May to mid-July. About
half of this increase was in bonds. Certificate hold
ings were lower on the latter date and note holdings
higher, due primarily to an exchange of certificates
for notes on June 1. There was, however, some ad
ditional bank buying of notes during the past two
months. Treasury bill totals fluctuated as banks
utilized these securities to adjust reserve positions.
Net Sales
Lines of Commodities
$
95
26
87
27
217
227
651
76
222
373
1,272
545
1,550
$
40
51
74
312
173
650
720
Repairs, etc.
Cost
1944 1945 1944
149156 $ 81
180
216
79
41
49
11
248
239
176
242
199
388
860.
859
735
822
858
596
$ 68
44
42
88
139
381
355
V A L U E C O N S T R U C T IO N C O N T R A C T S LE T
(In thousands
June,’45 comp, with
of dollars)
June,*45
May,’45
June,’44
May,’45 June,*44
$ 58,787
Total 8th Dist-----$11,174
Source: F. W. Dodge Corporation.
$ 9,466
— 81.0%
+ 18.0 %
B A N K IN G
CHANGES IN P R IN C IP A L A SSE TS AND> L IA B IL IT IE S
F E D E R A L R E S E R V E B A N K OF ST. L O U IS
Change from
June 20,
July 19,
July 18,
(In thousands of dollars)
1945
1945
1944
Industrial advances under Sec. 1 3 b .... $
........
Other advances and rediscounts............
3,630
U. S. securities.......................................... .1,022,0.45
— *19,320
+ 189,229
— ’ 2,570
+412,845
Total earning assets............................... .1,025,675
+ 169,909
+410,275
Total reserves............................................
544,143
Total deposits.......................................... .. . 618,840
F. R. notes in circulation........................ . 977,698
— 13,531
— 2,561
+ 14,445
+ 106,521
+ 105,991
+ 174,757
Industrial commitments under Sec. 13b
50.
-0-
+
2
P R IN C IP A L R E SO U R CE A N D L I A B I L I T Y IT E M S
OF R E P O R T IN G M E M B E R B A N K S
Change from
July 18,
June 20,
July 19,
(In thousands of dollars)
1945
1944
1945
Total loans and investments.................... $1,963,345 + 20,316 +268,902
Commercial, industrial, agricultural loans * 241,358 +
6,677 + 22,305
1,692 +
Loans to brokers and dealers in securities.
9,399 +
2,502
58,699 +
3,883 + 20.,094
Other loans to purchase and carry securities;
65,968 +
Real estate loans........................................
334 +
1,917
3,165 +
1,120 +
1,770
Loans to banks..........................................
88,942 +
2,313 +
8,615
Total loans................................................
467,531 + 16,019 + 57,203
58,111 — 2,245 — 11,283
Treasury bills..............................................
267,687 — 10,478 — 60,018
Certificates of indebtedness......................
Treasury notes............................................ . 318,891 — 8,725 + 89,213
724,793 + 28,481 +196,217
U. S. B on d s............. ..................................
502 —
I l l — 20,40,8
Obligations guaranteed by U. S. Govt.
, 125,830 — 2,625 + 17,978
4,297 +211,699
Total investments.................................... > 1,495,814 +
9,814 +
3,898
124,472 +
Balances with domestic banks................
Demand deposits — adjusted**................ . 1,028,716 — 5,655 + 150,103
6,041 + 67,560
Time deposits.............................................. . 312,612 +
375,316 + 32,855 + 15,394
U. S. Government deposits......................
6,935 + 88,879
. 596,926 +
1,600 — 21,40,0 — 4,400
*Includes open market paper.
**Other than interbank and Government deposits, less cash items on
hand or in process of collection.
Above figures are for selected member banks in St. Louis, Louisville,
Memphis, Little Rock and Evansville.
Page 11
National Summary of Conditions
BY BOARD OF GOTERNORS OF FEDERAL RESERVE SYSTEM
Production and employment at factories declined
somewhat further in June reflecting mainly reduced
output of munitions. Value of department store
sales in June and the early part of July was con
siderably above year-ago levels.
Industrial productionproduction de-
_Industrial
clined about 2 per cent in June and the Board’s
seasonally adjusted index was 222 per cent of the
1935-39 average as compared with 226 in May and
235 in March of this year.
Reduced activity in munitions industries accounted
for most of the decrease. Aircraft production in
June was at a daily average rate 5 per cent below
May.
Steel production in June and the first three weeks
of July was down 7 per cent from the May level,
and was 5 per cent below the corresponding period
a year ago. Output in the nonferrous metal indus
tries also declined, particularly at fabricating plants,
due primarily to the large drop in military demand
for most aluminum and copper products.
Production of most goods showed little change
in June. Civilian supplies of some of these goods
such as butter and tobacco products have increased
in July as a result of reduced military purchases.
Distilleries have been permitted to produce bever
age alcohol in July. Production of shoes and textile
products for civilians is expected to increase by
autumn.
Output of minerals rose 5 per cent in June, re
flecting mainly a large rise in coal production to the
highest rate since last November. Crude petroleum
production continued to increase, reflecting even
greater military demand for some petroleum prod
ucts for the Pacific War than for the two-front war
prior to V E day.
Contracts awarded for most types of privatelyowned construction increased considerably in June.
The total value of private awards was three times
as large as the very low level prevailing in 1944,
while awards for Federal construction were gener
ally smaller than last year.
D istrib u tio n — Department store sales, which
usually decline from May to June, increased this
year and the Board’s seasonally adjusted index rose
from 187 to 201 per cent of the 1935-39 average.
Sales in June were 15 per cent larger than a year
ago and in the first half of July were 23 per cent
larger than in the corresponding period last year.
Page 12
Commodity prices— Prices of wheat and of fruits
and vegetables declined somewhat from the middle
of June to the third week of July reflecting chiefly
seasonal increases in supplies. Prices of most other
farm products showed little change after reaching
a new peak for the wartime period on June 15.
Steel scrap prices, which had declined somewhat
in May, increased to ceiling levels in the latter part
of June and prices of most other industrial materials
were maintained at ceiling levels.
Agriculture*— Production prospects for most major
crops were generally favorable on July 1. Cotton
acreage reported in cultivation, however, was 10 per
cent smaller than last year, and prospective corn
production this year was indicated on July 1 to be
17 per cent smaller than last season’s large harvest.
Milk production continued at a record level in
June. The number of young chickens on farms has
increased rapidly this spring and on July 1 was 11
per cent greater than on the same date in 1944.
Marketings of cattle and sheep were larger in June
than in the same period last year, while the number
of hogs marketed continued to be much less than
in 1944.
Bank credit — Reporting member banks in 101
leading cities increased their holdings of U. S. Gov
ernment securities by 4.5 billions of dollars in the
eight weeks ending July 11, which period included
the major portion of the Seventh War Loan drive.
This amount corresponds closely to increases for
comparable periods of the two previous drives. Dur
ing the Seventh Loan banks added substantially to
their holdings of bills, certificates, and notes, and
they have also continued to increase their holdings
of bonds.
Loans for purchasing and carrying Government
securities extended to customers other than brokers
and dealers by weekly reporting banks increased 1.6
billions during the four weeks ended June 27, in
contrast to 1.1 billions during the comparable period
of the Sixth drive, and 1.3 billions in the Fifth.
Loans to brokers and dealers for purchasing or
carrying Government securities started increasing
somewhat earlier and expanded more than in pre
ceding drives. Both categories of these loans at
their peaks were above high points reached in pre
vious drives. Declines in these loans began in July.
Excess reserves expanded more and reached a
higher level than in any drive since the Third War
Loan drive in September, 1943.
@FedFRASER