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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication on Morning of August 30, 1939 FEDERAL RESERVE State Capitol, Indianapolis, Ind. BANK OF ST* LOUIS SU M M AR Y OF EIGH TH D ISTRICT Aug. 1, 1939, comp, with 1938 Av. 1923-38 Agriculture: Estimated yield of 7 crops.................... — 2.4%— 6.0% July, 1939, comp, with Live Stock: Jun e» 1939 Ju l? > 1938 Receipts at National Stock Yards— + 2.4% + 2.3% Shipments from aforesaid Yards........+ 3 . 6 + 4.5 Production and Distribution: Sales by mfrs. and wholesalers..............+14.9 Department store sales..........................—20.9 Car loadings........................................... + 5.6 + 5.8 + 5.9 + 5.9 Building and Construction: -Du • 1 / Number —13.5 Bldg. permits, incl. repairs < Cogt +56.7 Value construction contracts awarded.. +22.1 + 18.1 + 93.9 + 47.5 Miscellaneous: ~ . i( f Number...........+ Commercial failures | Liabilities....... _ Consumption of electricity...................+ Debits to individual accounts..............— Life Insurance Sales............................. — 39.3 — 7.1 1 7 _ 32.o 2.0 + 12.6 6.6 + 8.2 12.2 — 1.4 Aug. 16, ’39, comp, with 1> 9 Member Banks (24): Ju* y ’39 Aus-1 >’38 7 Gross deposits........................................ + 0 .7%+ 9 7% Loans...................................................... — 2.5 + 8.2 Investments............................................— 0.6 + 1.3 EN ERAL business activity in the Eighth District during July and the first half of August maintained, and in several impor tant lines bettered, the rate of the similar period immediately preceding, which earlier period marked the high point of the improvement beginning last May. While a number of manufacturing classifica tions and retail trade in July showed the usual mid summer slump, the extent of the recession was much less pronounced than is ordinarily the case, and in certain lines, notably iron and steel, lumber and petroleum, contraseasonal gains were recorded. Industrial production as a whole in the area was substantially greater in volume than a year ago. G The larger business volumes, coupled with welldefined improvement in sentiment among business men and the general public, were reflected in freer buying for future requirements by both retail and wholesale merchants. While manufacturers are still for the most part disposed to purchase raw materials only as needed, declining inventories have necessitated heavier current acquisitions in order to accommodate customers’ orders. In a majority of manufacturing lines investigated by this bank, advances in unfilled orders were re ported. Aside from a decline in farm products beginning in late May, prices as a whole developed only minor changes during the past thirty days, with the average measurably below a year and two years earlier. Output of bituminous coal in fields of this dis trict in July increased 14.6 per cent over the month Page 2 before and was 8.5 per cent greater than the ton nage lifted in July, 1938. Production of crude oil in June increased 3.3 per cent over May, and was 185.6 per cent larger than in June last year. Cumu lative production for the first half of this year was 46,663,000 barrels, as against 19,260,000 barrels for the comparable period in 1938, the increase being caused almost entirely by output of the newly developed fields in Illinois. July production of lumber increased about 4.5 per cent over June, and district mills continue to report current orders and shipments in excess of output. Consumption of electric power by indus trial users in the principal cities in July was 2.0 per cent and 12.6 per cent greater, respectively, than a month and a year earlier. At mills in this area, output of steel ingots advanced to 57 per cent of capacity at mid-August, the best rate since the week of March 21, and comparing with 36 per cent a year ago. The volume of retail trade in the district in July, as gauged by sales of department stores in the prin cipal cities, was about one-fifth less than in June, but 5.9 per cent greater than in July, 1938; cumu lative total for the first seven months was 5.5 per cent in excess of the same interval last year. Inventories as of August 1 were smaller by 1.9 per cent than on the same date a year earlier. Taken as a whole, the employment situation underwent little change from June to July. Fac tory employment increased slightly, contrary to the usual seasonal experience, while completion of the wheat harvest and other seasonal agricultural ac tivities resulted in a moderate decrease in the number of workers employed on farms. Employ ment in the building trades and transportation held about steady. Eighth District agricultural prospects showed little change during July, the U. S. Department of Agriculture’s report based on August 1 conditions tending to confirm earlier estimates for the prin cipal crops. Indications are for abundant feed and forage crops, and fruit and vegetable yields are mainly above average, though somewhat below a year ago. Indicated yields of tobacco and hay are somewhat larger than last year, with moderate declines for corn, cotton, wheat and oats. Commercial failures in the Eighth Federal Re serve District in July, according to Dun and Bradstreet, numbered 39, involving liabilities of $463,000, as against 28 defaults with liabilities of $471,000 in June and 42 failures for a total of $681,000 in July, 1938. DETAILED SURVEY OF D ISTRICT M A N U F A C T U R IN G AND Lines of Commodities Data furnished by Bureau of Census, U. S. Dept, of Commerce. Boots and Shoes........................................ ......................................... Dry Goods Electrical Supplies.................................... Furniture................................................... Groceries................................................... Hardware.................................................. Tobacco and its Products........................ W H O L E S A L IN G Net Sales July, 1939 compared with June, ’39 July, '38 +112.0% — 1.0 — 12.9 — 15.4 — 8.2 + 14.2 — 3.1 — 0.8 - 3.6% b 7.8 -21.0 -44.3 - 2.0 -15.5 b 4.4 -11.2 Stocks July 31, 1939 comp, with July 31,1938 —14.6% — 1.7 +12.4 —11.5 — 0.7 + 0.2 + 8.4 + 2.5 Upward trends in the wholesaling and jobbing trade in this area, noted in the two months imme diately preceding, persisted during July, and re ports covering the first half of August indicate a continuance of the betterment. With the exception of boots and shoes, all lines whose statistics are available to this bank, recorded gains over July a year ago. Decreases reported from June to July were seasonal in character, and in the case of dry goods, electrical supplies and groceries, were smaller than average during the past decade. Inventories in a number of important classifica tions continued the steady decline of recent months. However, the rate of shrinkage was more gradual, and for all lines combined stocks as of July 31 were slightly larger than a year earlier, for the first time since January, 1938. The increase in sales of boots and shoes from June to July, shown in the above table, was seasonal, but materially larger than the usual experience. Automobiles— Combined passenger car, truck and taxicab production in the United States in July totaled 186,265, as against 309,720 in June and 141,437 in July, 1938. Iron and Steel Products— Improvement in the iron and steel industry in this district, noted in late May and throughout June, continued during July and the first half of August. Strong resistance was opposed to the usual summer recession and resump tion of activities following the lull incident to vacations, inventory taking, repairs, etc., was more rapid than has been the case in a number of sea sons. Production of steel ingots in this area as of mid-August was at 57 per cent of capacity, the highest since the week of March 21, and comparing with 45 per cent at the middle of July and 36 per cent in the week of August 15, 1938. Rolling mill schedules have been geared to about absorb current ingot output in order to meet specifications on sheet and strip sold during the short period of lower prices last spring. Generally steel prices have maintained the stronger tone which replaced weak ness earlier in the year. With the exception of a rather sharp advance in scrap, prices of raw mate rials were unchanged from a month earlier. Shipments of pig iron to users in the district and the total melt during July were approximately 12 per cent and 8.5 per cent greater, respectively, than in the preceding month. The movement dur ing the first half of August indicates a gain of about 10 per cent over the corresponding period in July. The increase in the melt from June to July was accounted for largely by steel mills, jobbing foun dries and manufacturers of machinery and other specialties. Business of warehouse and jobbing interests in July showed a small contraseasonal increase over June. These interests report a marked pickup in purchasing by the general manufacturing trade, also heavier ordering by the railroads of shop and repair materials. Outlet through the building in dustry continues good, though the trend of new lettings of structural steel was downward. July production of pig iron for the entire country, according to the magazine “ Steel” , was 2,356,036 tons, the largest since March, and comparing with 2,119,422 tons in June and 1,213,076 tons in July, 1938. Steel ingot production in the United States in July totaled 3,288,949 tons, against 3,125,288 tons in June and 1,974,317 tons in July, 1938. MINING AND OIL Coal— Moderate improvement in demand for bi tuminous coal was noted during July, and the bet terment was carried farther forward in the first half of August. Demand from industrial users has ex panded, and there is a disposition on the part of certain interests to build up inventories, partly occasioned by anticipation of higher prices to be set by the National Bituminous Coal Commission. In fields of this district, production of soft coal in July was 14.6 per cent greater than in June and 8.5 per cent more than in July, 1938. Output for the entire country in July, according to the Bitumi nous Coal Division of the U. S. Department of the Interior, was 29,490,000 tons, which compares with 27.900.000 tons in June and 23,367,000 tons in July, 1938; cumulative tonnage to the end of July was 190.747.000 tons, as against 174,001,000 tons dur ing the first seven months of 1938. At Illinois mines July output totaled 2,167,579 tons, against 1,739,719 tons in June and 2,192,384 tons in July a year ago. There were 77 mines in operation in July, with 22,263 men on payrolls, as against 74 active mines and 20,123 operatives in June. Page 3 Petroleum— June output of crude oil in states of the Eighth District was 3.3 per cent more than in May and 185.6 per cent greater than in June, 1938. Cumulative total for the first six months this year was 142.1 per cent in excess of the corresponding period in 1938. Stocks on July 1 were 2.4 per cent and 9.8 per cent greater, respectively, than a month and a year earlier. Detailed production and stocks by states are given in the following table: ,, , Production of barrels? S June* May» Junear ' 1939 19391938 Arkansas................... 1,764 1,7191,272 Illinois....................... 7,083 6,849 1,462 Indiana............................ 90 7784 Kentucky.................. 503 494i 487 9,1393,305 Totals.................... 9,440 Cumulative 1939 1938 9,764 8,308 33,715 7,856 402 444 2,752 2,652 46,633 19,260 Stocks June, June, 1939 1938 2,099 2,310 13,303 11,511 3,156 3,018 1,270 1,219 19,828 18,058 RETAIL TRADE Department Stores—The trend of retail trade in the Eighth District, as reflected in statistics of de partment stores in the principal cities which report to this bank, is shown in the following comparative statement: Stocks on Hand ____________Net Sales Ft. Smith, A rk .... Little Rock, Ark... Louisville, K y ....... Memphis, T enn.... Pine Bluff, A rk .... Quincy, 111............. St. Louis, Mo........ Springfield, M o .... All Other Cities.... 8thF. R. District.. July, 1939 compared with June, 1939 July, 1938 —14.4% — 2.4% —16.7 +10.6 —23.1 + 5.8 —19.3 + 7 .7 —10.2 +29.9 —32.0 + 5.7 —21.4 + 4.9 —15.7 + 8 .6 —20.4 + 7.9 —20.9 + 5.9 Stock Turnover Installment Excl. Instal. Accounts Accounts 38.0% 37.6 49.6 40.2 Quincy....................% St. Louis........ 20.7 Other Cities.. 13.4 8th F.R. Dist. 18.9 __________ Net Sales__________ 45.3% 55.4 47.3 49.6 Stocks on Hand Stock Turnover July, 1939 7 mos. 1939 July 31,1939 Jan. 1, to compared with to same comp, with July 31, June, 1939 July, 1938 period 1938 July 31,1938 1939 1938 —40.9% —36.3 + 1 .5 % + 2.0 + 5 .5 % + 1.5 — 3.0% + 0.8 1.53 1.31 4.26 4.13 Percentage of accounts and notes receivable out standing July 1, 1939, collected during July: Men’s Furnishings................... 37.1% Boots and Shoes..........................37.9% TRANSPORTATION According to officials of railroads operating in this district, the volume of freight traffic handled in July and the first half of August sharply ex tended the gains over 1938 recorded during earlier months this year. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, Page 4 fell slightly below that of the same periods in 1938. This represents the first unfavorable comparison of consumption in 1939 with 1938. Installment Excl. Instal. Accounts Accounts Specialty Stores—July results in men’s furnish ings and boot and shoe lines are shown in the fol lowing table: Men’s Furnishings... Boots and Shoes.... For the entire country, loadings of revenue freight for the first 31 weeks this year, or to August 5, totaled 18,553,284 cars, against 17,087,635 cars for the comparable period in 1938 and 22,798,260 cars in 1937. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in July was 177,300 tons, against 144,974 tons in June and 228,937 tons in July, 1938; cumulative tonnage for the first seven months this year was smaller by 345,080 tons, or 25.6 per cent, than for the same period in 1938. W H ISK EY 7 mos. 1939 July 31,1939Jan. 1, to to same comp, withJuly 31, period 1938 July 31,193819391938 Five out of Kentucky’s 60 distilleries are in — 1.0% — 0.2% 1.53 1.55 operation, the same number as a month ago. A + 7 .8 + 2 .0 1.80 1.59 + 5.0 — 3.5 2.34 2.10 temporary strengthening in the price of three and + 8 .3 + 3 .1 1.97 1.72 +21.1 + 0.7 1.65 1.26 four year inspections has occurred, owing to a + 7.0 —14.0 2.21 1.71 + 4.5 — 3.5 2.54 2.25 shortage of these grades by two leading producers. + 6 .2 + 6 .2 1.83 1.62 +14.0 + 2.4 1.89 1.62 It is reported that consumption in May and June + 5.5 — 1.9 2.32 2.05 Percentage of accounts and notes receivable out standing July 1, 1939, collected during July, by cities: Fort Smith...............% Little R ock.... 14.2 Louisville........ 13.5 Memphis......... 23.1 interchanged 81,694 loads in July, as against 77,383 loads in June and 77,141 loads in July, 1938. Dur ing the first nine days of August the interchange amounted to 21,995 loads, which compares with 22,125 loads during the corresponding period in July and 21,392 loads during the first nine days of August, 1938. Passenger traffic of the reporting lines in July was 2.5 per cent less in number of passengers carried and 3,6 per cent more in revenue than during the same month a year ago. AGRICULTURE Combined receipts from the sale of principal farm products and Government benefit payments to farmers in states including the Eighth District during the period January-June, .1937, 1938 and 1939, and during June, 1938 and 1939, are given in the following table: (In thousands of dollars) 1939 Indiana........ $ 17,792 Illinois......... 31,795 Missouri....... 18,171 Kentucky_ _ 8,606 Tennessee.... 9,755 Mississippi... 4,847 Arkansas. . . . 7,327 Totals.......$ 98,293 J n_____ ue 1938 $ 20,030 37,513 20,187 8,324 7,677 6,466 5,007 $105,204 Cumulative for 6months 1937 1939 1938 $116,100 $122,062 $141,135 232,641 219,894 233,446 106,060 103,650 110,160 84,495 85,889 69,013 59,902 56,989 62,558 48,052 56,583 47,469 38,865 48,176 41,656 $737,947 $667,720 $679,128 General Farming Conditions— According to the U. S. Department of Agriculture, agricultural de partments of the several states and other informed sources, crop prospects in the Eighth District underwent no marked changes during July, some products showing moderate declines, while indi cated yields of others increased slightly. All crops considered, production will be somewhat smaller than a year ago, owing principally to smaller acre ages planted under the Government’s agricultural program. The season from planting to mid-August has been in the main favorable for growth and develop ment of both field crops and fruits and vegetables. Precipitation in July wT scattered, ranging from as excessive in some areas to inadequate elsewhere. In the principal winter wheat producing sections, frequent rains delayed harvesting and resulted in some damage to grain in the shock. Indications are for ample feed and fodder crops to support the generally increased numbers of livestock through out the district. Quite generally the oat crop was short, but prospects for corn are the best in a num ber of years. In Illinois, the largest corn produc ing state, the August 1 condition was the highest in 34 years, and of soy beans, the highest in 7 years. During July and early August, prices of farm products tended downward and the average con tinued measurably below that of the similar period in late years. As of the week ended August 5, the farm products group of the U. S. Department of Labor Statistics index stood at 62.5 per cent of the 1926 average, which compares with 61.4 per cent a week earlier; 64.1 per cent on July 8; 68.7 per cent on August 6, 1938; 86.9 per cent on August 7, 1937; 83.2 per cent on August 8, 1936, and 79.7 per cent on August 10, 1935. Corn— Based on the August 1 condition, the U. S. Department of Agriculture estimates the Eighth District corn crop at 324,780,000 bushels, a decrease of 2,664,000 bushels from the July 1 fore cast and comparing with 332,179,000 bushels har vested in 1938 and the 16-year (1923-1938) average of 330,136,000 bushels. The carryover of corn is one of the largest in recent years, and in states of this district about 172,000,000 bushels above the 10-year (1928-1937) average. Cotton— In its first production estimate of the season, the U. S. Department of Agriculture places the Eighth District crop at 3,223,000 bales. This represents a decrease of 163,000 bales, or 4.8 per cent, under the preceding year, and compares with 2,924,000 bales for the 16-year (1923-1938) average. The indicated decrease in output under the 16-year average is attributable entirely to smaller acreage planted. The condition of the crop as of August 1 was generally high, and since that date further betterment has taken place. Demand though in high point cotton has stock than for raw cotton has continued good, early August prices declined from the attained in July. Considerably more been sold from the Government loan was anticipated two or three months back. In the St. Louis market the middling grade ranged from 8.55$ to 9$ per pound between July 15 and August 15, closing at 8.55$ on the latter date, which compares with 8.80$ on July 15 and 7.25$ on August 15, 1938. Combined receipts at Arkan sas and Missouri compresses from August 1 to August 18 totaled 7,401 bales as against 11,784 bales for the corresponding period a year earlier. Total shipments during the same period amounted to 37,831 bales, as against 13,810 bales a year ago. Stocks on hand as of August 18, however, were 546,705 bales larger than on the same date in 1938. The Census Bureau reports that the cotton carry over at the beginning of the cotton year of 19391940, on August 1, was 13,032,611 running bales— the largest quantity held at this time of the year in the history of Government statistics. There was a carryover of 11,533,439 bales a year ago and 4,498,848 bales two years ago. The average carry over in the 10 years, 1929-38, was 6.744,800 bales. Fruits and Vegetables— In states including the Eighth District the apple crop is estimated at 8.400.000 bushels, against 3,275,000 bushels last year and the 10-year (1928-1937) average of 6.975.000 bushels; peaches, 9,406,000 bushels, against 6,214,000 bushels in 1938 and 10-year aver age of 7,195,000 bushels; pears, 2,643,000 bushels, against 1,784,000 bushels in 1938 and 10-year average of 2,112,000 bushels; grapes, 39,940 tons, against 23,730 tons in 1938 and 10-year average of 34,768 tons; sweet potatoes, 20,205,000 bushels, against 20,720,000 bushels in 1938 and 10-year average of 18,413,000 bushels; peanuts, 34,700,000 pounds, against 32,490,000 pounds in 1938 and 10-year average of 31,481,000 pounds. In the dis trict proper the white potato crop is estimated at 12.212.000 bushels, against 13,978,000 bushels in 1938 and 16-year (1923-1938) average of 13,535,000 bushels. Livestock— Reports from all sections of the dis trict indicate that the condition of livestock has maintained the high average which marked pre vious months this year. Marketings of cattle and hogs, while falling below June, were measurably higher than a year ago. H og prices in the second week of August declined to the lowest level since 1934. The number of cattle on feed for market in the Corn Belt States as of August 1 is estimated by the U. S. Department of Agriculture as 16 per cent larger than on the same date a year ago. The in crease was general over the entire area, with a larger number on feed in all but one state. In states of this district the lamb crop this year is estimated Page 5 to be 0.4 per cent greater than a year ago, and 10 per cent larger than the 10-year (1928-1937) average. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: Cattle and Calves......... Hogs.............................. Horses and Mules.......... Sheep............................. Totals......................... _______ Receipts_______ ___ _______ Shipments______ July, June, July, July, June, July, 1939 19391938 1939 1939 1938 120,726 97,587 133,615 78,974 59,111 87,653 195,554 209,012 174,500 129,773 138,045 109,996 1,087 1,8891,391 958 1,732 1,157 110,568 109,342 108,697 36,472 38,739 36,828 427,935 417,830 418,203 246,177 237,627 235,634 Tobacco— The U. S. Government report based on conditions as of August 1, indicates a slight deterioration in the Eighth District tobacco crop during July. Total yield is estimated at 254,467,000 pounds, a decrease of 2,176,000 pounds from the July 1 forecast, and comparing with 241,254,000 pounds harvested in 1938 and the 16-year (19231938) average of 285,704,000 pounds. Ultimate results will depend largely upon weather conditions from this time to harvest. Recent rains have im proved the crop as a whole, but have caused some damage in the lowlands and considerable destruc tion has been wrought by local hail storms. Open ing sales in the South, the Carolinas and Georgia, have caused pessimistic predictions as to prices to be paid for the 1938 crop in this district. Stocks of leaf tobacco owned by dealers and manufacturers in the United States and Puerto Rico as of July 1, amounted to 2,135,856,000 pounds, compared with 2,178,500,000 pounds on that date in 1938 and 2,367,193,000 pounds on April 1, 1939. In the April 1 to July 1 period stocks decreased 24,000,000 pounds less than in the similar period a year earlier. COMMODITY PRICES Range of prices in the St. Louis market between July 15, 1939, and August 15, 1939, with closing quotations on the latter date and on August 15, 1938, follows: Winter Wheat— The Eighth District crop is turning out better than anticipated, and despite delays to harvest occasioned by frequent rains, threshing of the crop is rapidly nearing completion. The U. S. Department of Agriculture in its August 1 report places the district yield at 55,903,000 bushels, an increase of 3,860,000 bushels over the July 1 forecast, and comparing with 66,081,000 bushels harvested in 1938 and the 16-year (19231938) average of 53,752,000 bushels. BUILDING The dollar value of permits issued for new con struction in the five largest cities of the district in July was 72.5 per cent more than in June and 104.2 per cent greater than in July, 1938. According to statistics compiled by the F. W . Dodge Corpora tion, construction contracts let in the Eighth Dis trict in July amounted to $20,961,000, which com pares with $17,171,000 in June and $14,214,000 in July, 1938. Building figures for July follow: New Construction Permits Cost 1939 1938 1939 1938 $ 134 24 $ 185 26 35 15 95 38 206 83 80 309 Louisville. 421 1,530 265 239 561 215 658 259 1,360 July Totals. . 668 573 2,777 1,610 1,738 June “ 638 758 1,454 1,349 May “ 784 624 (Cost in Repairs, etc. Permits Cost 1939 1938 1939 1938 $ 29 120 77 $ 64 27 112 33 68 41 56 33 29 101 98 180 156 104 172 186 181 287 417 634 529 311 580 428 748 427 503 816 666 CONSUMPTION OF ELECTRICITY Public utilities companies in six large cities of the district report consumption of electric current by selected industrial customers in July as being 2.0 per cent greater than in June and 12.6 per cent more than in July, 1938. Detailed figures follow : No. of July, (K.W.H. Custom 1939 K.W.H. in thous.) ers 3,444 Evansville . 40 Little Rock. ... 34 2,319 . . 82 9,175 Memphis 31 2,249 Pine Bluff 20 519 St. Louis 214 28,788 Totals. , . 421 46,494 June, 1939 K.W.H. 3,532 2,309 8,887 2,288 487 28,088 45,591 July, 1938 K.W.H. 2,559 2,264 7,994 1,805 597 25,975 41,194 July,1939 compared with June,1939 July, 1938 +34.6% - 2.5% + 0.4 + 2.4 + 3.2 +14.8 — 1.7 +24.6 —13.1 + 6.6 + 2.5 +10.8 + 2.0 +12.6 LIFE INSURANCE High Wheat *Sept................... . per bu.. .$ .63% “ .64% *Dec................... “ *May.................. .64 “ .71 No. 2 red winter “ No. 2 hard “ .69% Corn “ .42% *Sept................... .42% *Dec................... “ *May.................. .43 “ .46 No. 2 mixed___ “ No. 2 white...... .56 Oats u *Sept................... .28 “ .28% *Dec......... .......... “ *May................. .28% “ .32 No. 2 white...... . Flour Soft patent....... .per bbl.... 5.00 * Spring “ ....... 5.55 Middling Cotton. .per lb ... . .0900 Hogs on H oof___ per cw t. . 6.63 Page 6 Low $ .57% .58% • 60% .65% .64 Close Aug. 15, 1939 Aug. 15,1938 $ .61% .61% • 61% .68 .67 $ .62 .64% .67 .63% .63 .35% .36% .39% .40 • 51% .40 .39 • 42% .44 .55 • 50% .47 .49% .49 • 51% .24 .25% .26% .27% .27% • 27% • 27% • 31% .23 .23% .25% • 25% 4.00 5.25 .0855 5.49 4.50 @ 5.00 5.25 @ 5.55 .0855 5.64 3.25 @ 3.55 5.15 @ 5.45 .0725 8.48 Sales of new, paid-for, ordinary life insurance in states including the Eighth District during July, the preceding month, and a year ago, together with the cumulative totals for the first seven months this year and the comparable period in 1938 are shown in the following table: June, Cumulative July, July, 1939 1939 1938 1939 1938 $ 2,899 $ 2,821 $ 3,029 $ 23,673 $ 22,700 36,937 42,680 37,603 316,992 285,424 10,887 11,913 10,996 80,572 89,809 4,675 5,937 4,962 42,150 42,062 2,729 3,395 2,610 21,957 21,146 15,086 16,405 15,483 114,021 126,025 6,605 7,774 6,287 47,844 52,385 . $ 79,818 $ 90,925 $ 80,970 $ 672,991 $ 613,769 United States... $462,423 $524,925 $457,224 $3,853,088 $3,501,117 (In thousands of dollars) Cumul. change + 4.3% +11.1 +11.5 + 0.2 + 3.8 +10.5 + 9.5 + 9.6 +10.1 BANKING AND FINANCE While continuing well above the similar period a year ago, demand for credit in the Eighth District during the past thirty days was generally quiet. Requirements of merchants and manufacturers for financing fall and early winter inventories increased seasonally over the similar period immediately pre ceding, but, as has been the case for a number of months, liquidation of loans was in considerable volume, with the result that the total loans item at commercial banks recorded a small decrease. A number of banks reported expansion in demand for funds from financing companies, also a steady in crease in business of their small loan departments. Commitments of grain handling and flour milling interests increased in less than expected volume, owing partly to the policy of farmers to hold their wheat stocks for higher prices, or place them in the Government loan. Bankers’ dollar acceptances outstanding in the Eighth District as of July 31 were 1.4 per cent less than a month earlier, but 36.6 per cent in excess of the total on July 31, 1938. Member Banks— In the four-week period ended August 16, total loans and investments of report ing member banks in the principal cities decreased 1.5 per cent, but at its end were still 4.3 per cent higher than a year ago. There was a decline of 5.0 per cent in commercial, industrial and agricul tural loans during the period, occasioned in part by the Commodity Credit Corporation taking over cotton loans that were approaching maturity. Gross deposits declined in late July, but turned sharply upward in the second week of August, and in that week excess reserves reached the highest point of record. Statement of the principal resource and liability items of the reporting member banks follows: Change from Aug. 16, Jul. 19, Aug. 17, 1939 1939 1938 $178,118 — 9,282 + 3,506 4,750 + 941 — 108 5,440 + 762 + 603 13,748 + 394 + 1,043 50,842 + 467 + 2,890 2,363 — 1,168 - 4,057 52,151 + 147 +19,530 2,462 — 4,213 ) 49,345 + 593 V — 3,083 155,026 + 1,215 ) Obligations guaranteed by U. S. Government... 67,308 + 1,053 4- 4,191 101,188 — 1,078 + 3,618 165,915 +17,999 +34,991 Demand deposits—adjusted*....................... 459,940 + 3,808 +46,096 Time deposits................................................ 189,920 — 230 + 4,124 U. S. Government deposits.......................... 21,839 — 152 + 6,896 Inter-bank deposits....................................... 299,116 + 2,577 +26,535 Borrowings.............................................................................................. (In thousands of dollars) Commercial, industrial, and agricultural loans. Open market paper............................................ Loans to brokers and dealers............................. Other loans to purchase and carry securities. . . Real estate loans................................................ Loans to banks................................................... Other loans......................................................... Treasury bills..................................................... *Other than inter-bank and Government deposits, less cash items on hand or in process of collection. Above figures are for 24 member banks in St. Louis, Louisville, Memphis, Little Rock and Evansville. Their resources comprise approximately 62.0% of the resources of all member banks in this district. No change worthy of note occurred in interest rates, and at downtown St. Louis banks as of the week ended August 15, rates were as follow s: Cus tomers’ prime commercial paper, 1% to 5% per cent; collateral loans, 2 to 5% per cent; loans se cured by warehouse receipts, 2 to 5% per cent, and interbank loans, 2 ^ to per cent. The aggregate amount of savings deposits held by selected member banks on August 2 was 0.2 per cent less than on July 5, but 2.7 per cent greater than on August 3, 1938. Federal Reserve Operations— The volume of the major operations of the Federal Reserve Bank of St. Louis, during July, 1939, is indicated below: Amounts (Incl. Louisville, Memphis, Little Rock branches) Pieces Checks (cash items) handled...................................... 5,247,557 $1,141,584,161 90,642 Collections (non-cash items) handled......................... 37,859,668 Transfers of funds......................................................... 4,637 291,003,588 Currency received and counted................................... 7,966,057 25,175,616 1,100,854 Coin received and counted................. ........................ 10,420,285 Rediscounts, advances and commitments.................. 7 297,387 New issues, redemptions, and exchanges of securi ties as fiscal agent of U. S. Gov’t., etc.................... 14,200 16,320,228 Bills and securities in custody—coupons clipped......... 11,468 Changes in the principal assets and liabilities of this bank appear in the following table: . 112,581 Change from July 19, Aug. 19, 1939 — 1 — 132 — 10 — 21 -0-0 — 2,727 — 1,969 — 2,122 — 2,738 395,882 323,725 . 180,511 +16,465 +14,127 + 1,282 Aug. 19, 1939 .$ 18 119 2 . 112,442 (In thousands of dollars) Industrial advances under Sec. 13b. . . . Other advances and rediscounts.......... Bills bought (including participations). U. S. securities...................................... Total earning assets. F. R. Notes in circulation........................ Industrial commitments under Sec. 13b. Ratio of reserve to deposit 430 . 78.5% — - 6 0.9% +68,672 +60,253 + 8,745 — 155 -3 .3 % Following are the rates of this bank for accom modations under the Federal Reserve A c t : (1) Rediscounts and advances to member banks, under Sections 13 and 13a.........................................................................1 ^ % per annum (2) Advances to m ember banks, under Section 10b.........................2 % per annum (3) Rediscounts, purchases, and advances to m ember banks, nonmember banks and other financing institutions under Section 13b: (a) On portion for which such institution is obligated........... 3 ^ % per annum (b) On remaining portion..............................................................4 % per annum (4) Commitments not exceeding six months to member banks, nonmember banks and other financing institu tions, to rediscount, purchase, or make advances, under Section 13b ................................................................ ........... flat (5) Advances to established industrial or commercial J 4 % to businesses, under Section 13b................................................ \5M% per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured b y direct obliga tions of United States under Section 13..................................... 4 % per annum Debits to Individual Accounts—The following comparative table of debits to individual accounts reflects spending trends in this district: (In thousands of dollars) East St. Louis and N at’l L Stock Yards, 111. .. $ El Dorado, A rk ........ Evansville, Ind....... . Fort Smith, A rk ___ Greenville, Miss. Helena, A rk ............. Little Rock, Ark. . . . Louisville, K y ......... Memphis, Tenn....... Owensboro, K y ....... . Pine Bluff, A rk ......... Quincy, 111................. St. Louis, M o............ Sedalia, M o............... Springfield, M o......... Texarkana, Ark.-Tex (Completed August 23,1939) July, 1939 June, 1939 July, 1938 Jul., 1939 comp.with Jun., 1939 Jul., 1938 35,301 $ 38,274 $ 34,492 - 7.8% 5,177 — 7.6 5,025 5,438 28,975 + 4.8 32,004 30,536 10,060 10,386 + 5.9 10,658 3,761 + 0.2 4,054 4,044 1,294 — 5.7 1,401 1,486 30,822 + 3.3 42,641 41,291 142,067 — 1.1 156,947 158,624 93,305 —25.8 123,379 166,281 7,900 7,065 5,379 +11.8 7,302 6,801 6,647 + 7.4 7,179 — 4.6 7,884 8,261 547,020 — 4.9 558,027 586,740 1,755 — 5.8 2,035 1,916 13,467 — 0.2 14,545 14,576 6,904 + 4.5 6,624 6,340 $1,015,608 $1,087,852 $ 938,630 — 6.6 + 2.3% — 2.9 +10.5 + 2.6 + 7.8 + 8.3 +38.3 +10.5 +32.2 +46.9 + 9.9 + 9.8 + 2.0 + 9.2 + 8.0 — 4.1 + 8.2 Page 7 NATIONAL SUM M ARY OF BUSINESS CONDITIONS B Y BOARD OF GOVERNORS OF F E D E RA L R ESERVE SYSTEM IN D U S T R IA L P R O D U C T IO N PERCENT PERCENT Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average = 100. By months, January, 1934, to July, 1939, Latest figure 102. F R E IG H T - C A R L O A D IN G S Index of total loadings of revenue freight, adjusted for seasonal variation, 1923-1925 average = 100. By months, January, 1934, to July, 1939. Latest figure 69. W HOLESALE P R IC E S Indexes compiled by the United States Bureau of Labor Statistics, 1926 = 100. By weeks, 1934 to week ending August 12, 1939. MEMBER BANK R E S E R V E S Wednesday figures of total member bank reserve balances at Federal Reserve banks, with estimates of required and excess reserves, January 3, 1934, to August 16, 1939. Page 8 In July industrial activity, seasonally adjusted, rose sharply and was close to the level reached last December. Prices of some indus trial materials increased in recent weeks while those for agricultural products continued to decline. Production—The Board’s index of industrial production, according t > preliminary returns, advanced to 102 per cent of the 1923-1925 < average in July as compared with 98 in June and 92 in April and ]\Jjay. The advance in July reflected chiefly a considerable further increase in output of iron and steel, which usually declines at this season. Steel ingot production rose from an average rate of 52 per cent of capacity in June to 57 per cent in July, and in the first three weeks of August was maintained around 60 per cent, about the usual seasonal increase. Lumber production showed little change in July, although a decline is usual. In the automobile industry output showed a sharp seasonal cur tailment during July and the first half of August, reflecting prepara tions for the shift to new model production which will be made about a month earlier this year than in other recent years. Retail sales of new cars continued in excess of production and dealers’ stocks were greatly reduced. Plate glass production declined sharply in July, following a substantial increase in June. Changes in output of nondurable manufactures in July were largely of a seasonal nature. At cotton textile mills and meat-packing estab lishments activity showed somewhat less than the usual declines and at sugar refineries output increased from the low level reached in June. Flour production continued in substantial volume. Min eral production expanded further in July, as output of bitumi nous coal continued to increase and petroleum production, which had been reduced in June, rose sharply. On August 14 the Texas Rail road Commission ordered a shutdown of Texas oil wells for 15 days, beginning August 15, and subsequently similar shutdowns were ordered in several other important oil producing states. Value of construction contracts, as reported by the F. W. Dodge Corporation, increased somewhat in July, owing principally to a small rise in contracts for public projects. Awards for residential work, both public and private, were practically unchanged from the June total. Employment—Factory employment, which usually declines in July, was maintained this year at about the June level and payrolls showed a less than seasonal decrease, according to reports from a number of leading industrial states. Distribution—Sales at department and variety stores in July showed about the customary seasonal decline. In the first half of August department store sales increased. Freight-car loadings in creased further from June to July. Loadings of coal continued to expand and shipments of miscellaneous freight, which usually decline at this season, showed little change. Commodity Prices—Prices of most farm products and foods de clined from the beginning of July to the middle of August. Some industrial materials, principally steel scrap, nonferrous metals, and textile fabrics, showed advances in this period, while crude petroleum prices were reduced. Agriculture—On August 1 prospects for major crops were about the same as a month earlier, according to the Department of Agri culture. The first official estimate on cotton indicated a crop of 11,400,000 bales, somewhat smaller than last year's crop and 2,400,000 bales less than the 1928-37 average. World carryover of American cotton, however, was estimated to have been somewhat larger on August 1 than the record volume of a year ago. Bank Credit—Total loans and investments of member banks in 101 leading cities increased substantially during the four weeks end ing August 9, reflecting chiefly increases in holdings of United States Government obligations and the purchase by New York banks of a large share of a new issue of New York State short-term notes. Commercial loans continued to increase at New York banks, but declined at banks in 100 other leading cities as corn and cotton loans that were approaching maturity were taken over by the Commodity Credit Corporation in accordance with a standing agreement. De posits at reporting banks remained at high levels. Excess reserves of member banks increased further to new high levels in the latter part of July and the first half of August, owing principally to gold imports and net Treasury disbursements, partly offset by a reduction in Federal Reserve bank holdings of Treasury bills. Money Rates—The average rate on new issues of 90-day Treasury bills has increased slightly in recent weeks and on August 16 was 0.032 per cent. Prices of Treasury bonds showed little change from the middle of July to the middle of August.
