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Monthiy Review o/ AgTicMtt
Trade and Finance
Re!ea$ed /ot PMbtication in A/fprh^)n Papers o/ December 3,1943
FEDERAL
RESERVE
BANK
OF
ST.
LOUIS
G E N E R A L 7JVDt/STRA4Z, S iT C /^ T Z O N
E L A T IV E stability in the over-all volume of
industrial production, which has character^ iz e d the district econom y in recent months, con
tinued in October. The future course of industrial
activity appears to depend largely upon schedules
set for military production which are now being
revised more frequently, and upon available supplies
of raw materials and adequately-trained labor.
Some new additions to the district productive
plant were made in early November, notably in the
steel industry. Increased output from these may
well be offset by cutbacks in production schedules
at munitions plants, primarily in the small arms
ammunition and explosives lines. It was announced
recently that production curtailment at the large
ammunition plant in St. Louis and affiliated com
panies would reduce employment by about 10,000
workers. Reduction will be gradual, however, and
most of the displaced workers can be utilized in
other plants. Construction on a major non-ferrous
plant in Memphis was stopped by the W ar Produc
tion Board at mid-November.
Reflecting the stabilization of industrial activity
in this district at a high level, consumption of in
dustrial electricity at major district cities in October
was 1 per cent below September, but 16 per cent
above October, 1942. Output of steel, alcohol, shoes,
and lumber was in about the same or slightly less
volume in October than in the previous month and
DLSTRiCT
M A N U F A C T U R IN G
Iron and Steel — October output of steel in the
St. Louis area was down slightly from both Septem
ber and October, 1942, in contrast to nation-wide
production which broke all records. In this district,
overdue furnace repairs, work stoppages, and in
dustrial disputes all contributed to the interruption
of production schedules in October. The rate of
ingot operations in October averaged about 99 per
cent of capacity as compared with 100 per cent dur
ing September and 103 per cent in October, 1942.
In early November, about 250,000 tons of steel
ingot capacity came into production in this district,
and an additional 100,000 tons will be in production
before the end of the month. Several new open
hearths for steel castings will also be in operation
soon. These additions will raise total capacity in
the area by a substantial amount.
Although collections under the current drive for
scrap have been lagging, mill and foundry inven
tories in the district have shown no appreciable
Page 2
was appreciably below the level of October, 1942.
More than offsetting the decline from a year ago in
these major lines, chemicals and munitions output
was up considerably over last year to raise the level
of total industrial activity to a point substantially
above that of October, 1942. Gains in these lines
for the month, however, were not sufficient to in
crease the level of total industrial activity appreci
ably above September.
The volume of primary distribution in the dis
trict in October was up seasonally from September
due primarily to heavy movement of crops and live
stock to market, and it is anticipated that November
tonnage moved will be substantially heavier. Carloadings of all railroads operating in the Eighth
District in the five weeks ending October 30 were
up 3 per cent from the previous Ave weeks, but were
5 per cent below the comparable period in 1942. The
decline in number of cars from a year ago results
primarily from more efficient utilization of cars.
Ton-m ile figures are appreciably higher than a year
earlier. Load interchanges of freight at St. Louis in
October were 5 per cent above September and 9 per
cent more than October, 1942. In Louisville, inter
changes were up 2 per cent in the month but were
5 per cent below October, 1942. Despite increased
utilization of barges on district waterways recently,
river tonnage moved so far in 1943 is well below
that transported in the comparable period of 1942.
sty R v g y
change as deliveries from dealers have been in suf
ficient volume to maintain current operations with
out dipping into reserves. Supply of iron in the area
is adequate, with capacity operations at district
blast furnaces plus outside shipments.
Shoes — W ith cattle slaughter so far in 1943 run
ning appreciably below last year, supply of leather
for shoe manufacture has been short. This raw
material situation coupled with difficulties in obtain
ing adequate labor and replacement parts for ma
chinery has resulted in output of shoes below 1942
volume. These conditions are expected to continue
during the next few months.
A ccording to preliminary estimates, Eighth Dis
trict shoe production in October was down slightly
from September and was 3 per cent below October,
1942. For the first ten months of 1943, shoe output
was 4 per cent below the corresponding period a
year earlier. Final production figures for Septem
ber totaled 6,699,000 pairs, 3 per cent less than
August production.
Whiskey — At the end of October, 49 distilleries
were producing industrial alcohol in Kentucky, the
same number that were in operation the previous
month, but ten less than in October, 1942. Kentucky
distilleries are now^ producing almost one-half of the
total alcohol output, or some 250 million gallons per
year. Reports indicate that demands upon available
grain supplies for feed, foodstuffs, and more import
ant industrial uses have removed any possibility of
an increase in whiskey production even for a short
period of time.
In an effort to maintain advertised brands of
whiskey on the market, distributors continue to
ration their products. Tax paid withdrawals in
September were about half the volume of a year
earlier.
Miscellaneous Manufacturing — A ctivity at food
processing plants, particularly in meat packing es
tablishments, in the district was at a high level in
October and early November. The greatly increased
volume of livestock marketings has taxed slaughter
houses to capacity, and cold storage space in this
area is virtually Riled. In the important chemical
manufacturing held, production in October con
tinued to move up and was well above the level of
a year earlier.
Output of munitions at district
plants increased during October with aircraft pro
duction gaining substantially. Output of lumber at
district mills continues to run well below that of
the comparable period in 1942, due almost entirely
to labor shortages.
O IL A N D M IN IN G
Production of crude oil in Eighth District states
for the first nine months of 1943 was approxi
mately 17 per cent below^ the comparable period in
1942. Preliminary figures indicate that production
in O ctober increased somewhat over the summer
average but was still below established quotas. Oil
held activity in the district increased during Sep
tember with 288 oil well completions reported in
the four major oil-producing states in the district.
Of total wells drilled in September, 46 per cent
were dry compared with 53 per cent in August.
Preliminary figures indicate that drilling activity in
O ctober will be appreciably above that in Septem
ber, and also that the proportion of oil-producing
wells will show an increase.
Coal production in Eighth District states declined
10 per cent in October compared to the previous
month and was 9 per cent under production for
October, 1942 . The decrease in coal production last
month was primarily a result of work stoppages in
coal mines arising from labor difficulties. In the
early part of November, however, these difficulties
were provisionally settled, and production should
be restored to normal.
O wing to favorable mining conditions in, Arkan
sas, manganese ore production in the BatesvilleCushman held amounted to 780 tons in October.
Movement of bauxite ore from Arkansas has aver
aged from 1200 to 1500 cars per month. New dis
coveries of bauxite deposits in the central region of
Arkansas have added materially to the reserves for
this type of ore.
EM PLOYM ENT
There was little change in the over-all level of
employment in the district in October. Shifts from
some non-essential lines of activity to more essen
tial industry w^ere largely offset by continued with
drawals for the armed services and decline in agri
cultural employment. There were no changes in W ar
M anpower Commission classifications of Eighth
District labor market areas in the past month.
Evansville and Pine Bluff continue in Group I,
while Louisville remains in Group II. However,
W M C has announced that a 48-hour work-week will
go into effect in the Louisville area as of December
1, in view of anticipated demand for labor and rela
tively short supply. In all three areas, acute hous
ing shortages make in-migration difficult.
Forecasts indicate that St. Louis, Louisville,
Memphis, and Evansville will add a considerable
number of employees by January 1. This increase,
which includes the holiday seasonal increase in
trade employment, will be largely offset by a decline
in the number of agricultural workers, so that total
employment in the district is not likely to change
much in November and December.
In general,
there has been sufficient farm labor in the district to
harvest crops without any appreciable loss.
R E T A IL T R A D E
Retail trade, as measured by sales of department,
apparel, and furniture stores in the Eighth District,
moved up seasonally in October and was above
the level of a year earlier, although the increase
from October, 1942, was relatively small. Since
the sales volume of October, 1942, was extremely
high, however, any increase over it is noteworthy.
For the first ten months of 1943 department store
sales in St. Louis and the miscellaneous cities of the
district were only slightly larger than a year earlier,
while the gain in other district cities ranged from
14 per cent to 33 per cent indicating that the in
creased purchasing power generated by the war
program has been spread rather proportionately
throughout the district cities.
For the first ten months of 1943, department
store sales in the district were 14 per cent over the
Page 3
comparable period in 1942. The gain for the entire
year will probably be about 15 per cent, which
represents a dollar increase of about $30 million.
Much of this increase has come as a result of price
rise. The B L S indexes of clothing and house fur
nishings in 1943 have averaged 4 per cent and 3
per cent, respectively, higher in 1943 than in 1942.
In addition to outright price increases, there have
been tendencies on the part of consumers to pur
chase higher priced lines, both because of increased
purchasing pow er and because some of the cheaper
lines of merchandise have been dropped by stores.
Sales of virtually all lines handled by depart
ment stores have shown sizable gains in 1943 as
compared with 1942. Notable exceptions to this
are the durable goods lines, which include such
items as household appliances, cameras, etc., manu
facture of which has been stopped or curtailed, and
men's clothing, which reAects the large withdrawals
of men for the armed services. For the year to date,
sales of house furnishings at department stores are
in about the same volume as in the comparable
period in 1942. A t district furniture stores the
cumulative gain from 1942 is 9 per cent. In the past
month, furniture store sales rose 10 per cent over
September, but were 0.8 per cent below October,
1942. W om en's apparel sales at department stores
in October were up 9 per cent from a year ago and
at apparel stores in St. Louis, the gain from last
October was 10 per cent.
A G R IC U L T U R E
General Conditions— Indicated production of eight
major district held crops as of N ovem ber 1, in
creased only slightly from the October 1 forecast
as upward revisions in corn, tobacco, and potato
estimates offset a decline in the indicated produc
tion of cotton in Missouri and Tennessee as a result
of killing frosts in mid-October. The indicated 1943
production of these crops is 10 per cent below 1942
production, but 9 per cent above the ten-year aver
age. Yield per acre throughout virtually the entire
district is strikingly lower in 1943 than a year earlier.
Harvesting of corn in the Eighth District got
under way during October, but proceeded rather
slowly. In the first tw o weeks of November, about
half of the Illinois corn crop was gathered. H ar
vesting operations in Missouri began late because of
rains and labor scarcity. Soybean harvest made
rapid progress in Indiana and Illinois during O cto
ber, and was 90 per cent complete in the latter state
on November 1. Cool, dry weather and lack of rain
fall during the early part of Novem ber interrupted
the stripping of burley tobacco, but the harvesting
of most other types is near completion. The rice
Page 4
harvest in Arkansas made good progress and is
nearly over. W inter wheat is four inches high in
Illinois and up to a good stand in other sections of
the district.
Cash farm income in Eighth District states in
creased 17 per cent in September compared to
August, and was 7 per cent greater than for Sep
tember, 1942. For the first nine months, cash farm
income for district states amounted to $2,482 mil
lion, or 28 per cent more than income in the com
parable period in 1942. Assum ing that fourth quar
ter, 1943 income is about equal to fourth quarter,
1942 return, since lower crop income may offset in
creased livestock earnings, cash farm income in dis
trict states this year may reach $3,700 million, or 18
per cent above last year. This compares with esti
mated cash income of $19.9 billion for the entire
country, a gain of 29 per cent over last year.
In Eighth District states, changes in prices re
ceived by farmers in the past month were uneven.
In the central portion of the district, prices declined
approximately 1 point and were mostly steady to
slightly lower in the extreme northern and southern
portions. In Arkansas, however, the price index
advanced 2 points. Prices of meat animals and corn
were generally lower throughout the district as a
result of increased marketings, but prices of dairy
products and eggs were up seasonally. The price of
wheat continued to be dominated by the feed situa
tion, all Eighth District wheat producing states re
porting advances of from 1 to 7 cents per bushel.
Cotton — Estimated production of cotton in the
Eighth District declined 26,000 bales during the
month of October, according to the U. S. Depart
ment of Agriculture. Indicated production on N o
vember 1 was placed at 3,193,000 bales, a decrease
of 729,000 bales, or 19 per cent from last year's
harvest. A killing frost in the middle of October
reduced production in Missouri and Tennessee. No
change was reported for the Arkansas crop, but
production estimates in Mississippi were increased
slightly over the October 1 forecast.
Except in Missouri, average staple length of dis
trict cotton this year is somewhat shorter than last
with Arkansas reporting 1.2/32 inch less on the
average and Tennessee reporting 0.7/32 less on ginnings through October 17. Arkansas and Mississippi
cotton for the season through m id-October graded
higher than last year, but since O ctober 1, ginnings
have been consistently lower in grade on the aver
age than in the comparable period in 1942.
Spot market activity at Memphis during October
was low, reflecting to a large extent the decline in
mill demand attributable by trade sources to favor
able war news and peace rumors. Price of 15/16
middling* cotton was steady in early October but
declined from 20.30c on O ctober 15 to 19.90c on
Novem ber 15, the second lowest level since D e
cember, 1942. An increasing amount of cotton is
going into the loan, or otherwise held off the market
pending more favorable prices. Through November
6, the CCC reported loans on 1,319,000 bales of 1943
cotton as contrasted with 686,000 bales of the 1942
crop pledged through November 7, 1942.
Dairying — Although there are 2 per cent more
milk cow s on farms now than at this time last year,
total milk production in the United States during
the three months ending October, 1943, ran 2 per
cent less than in the comparable period last year.
The decrease in production is attributable to a drop
in production per cow and to a decline in the per
centage of milk cows in production. The decline in
the average production per cow results primarily
from the scarcity of concentrated and high protein
feeds, high hay prices, and labor shortage for milk
ing.
For these reasons, many cow s have been
calved or allowed to go dry. The percentage of pro
ducing milk cows in major producing regions on
November 1 is the smallest in nine years.
Output of milk in Eighth District states is run
ning substantially below production of last year.
Every state except Mississippi and Arkansas re
ported on N ovem ber 1 reductions ranging up to 7
per cent per cow. Mississippi and Arkansas re
ported an increase in production per cow of 7 and 1
per cent, respectively, compared to 1942.
Effective for the last quarter of this year, W F A
announced a payment program to help dairy far
mers absorb increases in feed costs since Septem
ber, 1942. Payments range between 30 and 50 cents
per 100 pounds of whole milk, depending on the
relative increases in feed costs and milk prices
since our entry into the war. Butterfat payments
vary from 4 to 6 cents per pound where cream is
sold.
Grain and Feed Crops — The available supply of
grains for feed and other uses during the remainder
of the crop year will continue at a level appreciably
below the amount necessary to meet the unusually
strong demand resulting from increased livestock
numbers on farms. Indicated production of corn
on N ovem ber 1 in the district was 367,016,000
bushels, up 4 per cent from the O ctober 1 estimate,
and 21 per cent above the ten-year average, but 7
per cent below 1942 production. Oat and wheat
forecasts were unchanged from a month earlier at
65,861,000 and 28,711,000 bushels, respectively. Es
timated oats production was down 14 per cent from
1942 production but 40 per cent greater than the tenyear average annual production, while wheat output
on November 1 was indicated at 23 per cent greater
than last year, although 48 per cent under the tenyear average. Rice production in the district was
placed at 12,690,000 bushels, unchanged from a
month earlier, but 6 per cent less than last year's
production. The estimate for soybeans was revised
slightly upward as a result of a production increase
in Missouri.
Indicated production of tame hay in the district
underwent no change during October and stands
at 7,901,000 tons, 27 per cent above average harvest
but 1,426,000 tons oi? from 1942. Pastures in the
district have deteriorated rather rapidly this fall, es
pecially in Kentucky, western Tennessee, northern
Mississippi, and much of Arkansas.
The feed outlook for next year is not bright. Farm
disappearance of corn and oats between July 1 and
October 1 of this year was 17 per cent greater than
for the same period last year. W ith livestock pro
duction 12 per cent greater than 1942 and with
available feed supplies less than last year, an adjust
ment of livestock numbers and rates of feeding will
probably be necessary in order to stretch feed sup
plies over the winter and spring months.
Tobacco — Indicated production of tobacco on
November 1 in the district is estimated at 268,184,000 pounds, slightly above the October 1 estimate
and 11 and 9 per cent, respectively, above 1942 and
the ten-year average. There was some stripping of
burley during the latter part of October, but cool,
dry weather and lack of rainfall in the district in
early November prevented handling of this type of
tobacco.
In the dark-fired region, favorable weather con
ditions made it possible for growers to handle well
cured tobacco, part of which has been taken down
and placed in bulk. The early tobacco is very well
cured, but the late tobacco has a dull finish and will
require careful attention and firing. Harvesting of
Green River type of tobacco was completed before
killing frosts occurred, and late crops reached ma
turity without apparent damage. Although the leaf
will have a lighter body than the 1942 crop, it will
be sound and suitable for the trade. Curing of this
type of tobacco is progressing satisfactorily. R e
ports indicate that about 15 million pounds of Green
River and One Sucker tobacco will be used for nico
tine manufacture for the Government. Most of this
will be lower quality grades.
In late October, burley tobacco growers voted in
favor of marketing quptas for the next three years,
and as a result, W F A will authorize a 20 per cent
Page 5
increase in 1944 acreage. Tobacco will be the only
agricultural product under crop control next year.
Despite the increase in allotment, it is expected that
labor shortage will prevent planting to full allotted
acreages.
CASH F A R M IN C O M E
1943
T o ta ls . . .
1941
$147,636
641,049
374,298
157,737
129,730
353,459
141,538
$100,041
474,170
261,572
116,152
91,371
254,545
101,749
324,0,55
2,482,289
1,945,447
1,399,600
O ct.,
1943
Sept.,
1943
O ct.,
1942
O ct.,
1943
Cattle and C a lv e s ... . 195,218 187,654 204,907
H o g s ................................... 257,425 232,290 231,529
Horses and M u le s.........
3,641
3,450
2,209
S heep................................. 87,444 109,468 99,995
T o ta ls ........................
543,728
W H OLESALE
Statistics
(1 9 2 6 = 1 0 0 )
103.0
O ct. 15,
1943
0935^39=100)
O ct. 15,
1943
Banking developments in the Eighth District dur
ing the last month were characterized by declining
United States Government deposits and rising pri
vate demand deposits as the Treasury drew down
balances held in war loan accounts, and the return
Row of funds built up deposits of partnerships, indi
viduals, and corporations. Required reserves at dis
trict banks increased as deposits under war loan
accounts were replaced by deposits subject to re
serve.
In the four weeks ending November 17, there was
a decline in volum e of every type of loan at report
ing member banks in this district. Total loans
dropped $7.3 million with most of the decline com
ing in "oth er" loans. As compared with a year
earlier, loan volum e at m id-November at the report
ing banks was up $11.9 million. Total investments
declined slightly in the four-week period but were
about 50 per cent higher than a year earlier. H old
ing of certificates of indebtedness at the reporting
banks increased $23 million between October 20 and
November 17. Treasury bill holdings dropped $16.5
million as a number of banks used bills to adjust
their reserve positions.
Since the last issue of this review, the Bank of
Cairo, Cairo, Missouri and the Commerce-Warren
County Bank, W arrenton, Missouri, have become
members of the Federal Reserve System.
L ittle R o ck . . . .
U N IT E D
S T A TE S
O ct.,
1942
Sept.,''43 ^
1 0 0 . 0.
— 0.1%
109.0
103.4
95.5
123.9
— 0.7
0.1
+
+ 0.1
122.6
-
0
137.4
139.1
135.0
134.9
148.2
3.0%
+
1.9
+ 12.1
+ 1.6
S e ^ !l5 ^ 2
+
CO ST O F F O O D
Sept, 15,
Sept. 15,
1943
1942
Sept. 15,'43
138.2
139.1
133.4
135.0.
O ct.,'42
+
0.4%
117.8
116.6
+ 0.6%
126.6
126.7
129.2
124.2
129.7
—
+
—
O ct.,
1942
105,931 113,850
78,875 40,922
3,412
2,193
22,987 20,243
211,205 177,208
CO ST O F L IV IN G
Sept. 15.
Sept. 15,
1943
1942
Sept. 15/43
124.4
122.6
U. S. (51 cities) . .
THE
103.1
123.1*
105.0.
97.2
105^1
97.3
O t h e r ...
IN
Sept.,
1943
Sept.,
1943
104,285
82,732
3,587
12,034
202,638
532,862 538,640
P R IC E S
O ct.,
1943
B A N K IN G A N D F IN A N C E
1942
$165,30.7
808,334
477,173
225,737
173,328
449,230
183,180
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 ST O C K Y A R D S
0 9 3 5 -3 9 = 1 0 0 )
Page 6
1943
$43,261
68,764
56,196
17,948
55,789
56,293
25,804
346,790
C O ST O F L IV IN G
Cost of living in major cities in the United States
appears to have resumed its upward movement, as
the index in October stood at 124.4 per cent of the
1935-39 average, up 0.4 per cent in the month and
5.6 per cent over the September, 1942, level. In
creasing food, clothing, and miscellaneous costs
account for most of the rise from a month earlier,
while the major portion of the gain from September,
1942, is the result of rising food prices. The index
of cost of food in the United States was up 0.6 per
cent in the month and 9.2 per cent from September,
1942.
In St. Louis, the cost of living index on October
15 was unchanged from September 15, but was 5.1
per cent above September, 1942. Cost of food
changes in the past month in four Eighth District
cities ranged from — 2.6 per cent to -[-0.1 per cent.
Measured against September, 1942, the range in
food price rises was from 3.3 per cent in Little Rock
to 11.3 per cent in Memphis.
1942
$35,023
85,591
66,974
21,901
53,643
59,835
23,823
0-
1.2
0.1
2.6
5.6%
5.1
Sept. 15,'42
+ 9.2%
+ 9.8
+ 3.3
+ 8.7
+ 11.3
IN D E X E S O F E M P L O Y M E N T IN M A N U F A C T U R IN G
IN D U S T R IE S B Y M E T R O P O L IT A N A R E A S
Sept.,
1943*
Evansville
L ouisville. .
A u g.,
1943
Sept.,
1942
A u g .,'4 3
S ept.,'42
295.1
132.4
168.1
159.3
0937=100)
292.7
131.8
165.5
160.7
143.9
107.2
137.1
138.6
+ 0.8%
+ 0.5
+ 1.6
— 0.9
+ 10.5.1%
+ 23.5
+ 22.6
+ 14.9
^Preliminary.
B U I L D IN G
( Cost in
thousands)
N umber
1943 1942
P E R M IT S
Cost
1943
1942
E vansville
. . 254
L ittle R o c k . . . . 13
60
76
63
33
19
140
46
82
$ 238
7
111
15
268
O ctober Totalsi . . 466
Sept. T o t a l s .. . . 204
320
392
639
370
$
N um ber
1943 1942
Cost
1943 1942
184
4
207
17
53
125
122
33
474
146
70
92
36
195
138
$ 92
28
83
194
76
$ 37
42
27
65
97
465
1,631
900
996
531
623
473
465
268
221
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 L E T
O c t.,'43 com p, with
(I n thousands
O c t.,'42
Sept.,'43
O c t.,'42
o f dollars)
O c t.,'43
Sept.,'43
$ 10,976
T otal 8th Dist. . . $ 8,588
S o u rce : F . W . D o d g e Corporation.
$ 43,506
— 80%
C O N S U M P T IO N O F E L E C T R IC IT Y
Sept.,
O ct.,
O ctober, 1943
N o. of O ct.,
1942
1943
1943
K .W .H . Sept., 1943 O ct., 1942
ers* K .W .H . K .W .H .
(K .W .H .
in thous.)
10„472
2,807
17,197
6,457
7,302
94,920
10,864
3,269
17,558
5,901
7,200
95,089
5,805
3,188
16,196
5,764
1,919
87,148
139,155
344
^Selected industrial custom ers.
139,881
120,020.
Evansville.
L ittle R o c k . . .
.
Pine B l u f f . . . .
— 22%
40
35
82
31
19
137
— 4%
— 14
* 2
—
+ 9
+ 1
- 0-
+ 80%
— 12
+ 6
+ 12
+281
+ 9
— 1
+16
D E P A R T M E N T STO RES
Stocks
onH and
Net Sales
O ctober, 1943
10 mos.'43
O ct. 31,'43
J a n .l ,t o
S e p t!/4 3 ^ 0 c :t.,'4 2
pericxr42
Oct^31,'42
1943^*1942
Ft. Smith, A rk .. + 14%
Little R ock, Ark. + 3
Evansville,
In d ..
+
+
+ 12
+ 10
+ 10
+
+
+
+
+
+
+
+
+
+
+
+
7%
12
6
5
2
1
28%
28
15
33
14
7
27
27
+
4%
19
3.19
3.46
2.67
3.01
4.37 2.89
3.48 2.66
St. Louis, M o.. .
3.22 2.16
+ 15
-10,
+ 14
Springfield, Mo.
3.77 2.61
— 4
10
3.33 2.84
— 9
+ 1
4
+ 6
3 .6 0 f2 .7 2
—
6f
+ 14
F ,^ Di^t! + ^
8
+ 4
*E1 D orado, Fayetteville, Pine Bluff, A r k .; A lton, East St. L ouis,
Harrisburg, Mt. Vernon, 111.; Vincennes, Ind. ; Danville, Hopkinsville,
M ayheld, Paducah, K y . ; Chillicothe, M o .; Jackson, Tenn.
{'Preliminary.
T rading d ays: October, 1943— 2 6 ; September, 1943— 2 5 ; O ctober,
1942— 27.
Outstanding orders of reporting stores at the end of O ctober, 1943,
were 111 per cent greater than on the corresponding date a year ago.
+
77% t
74
69
70f
M en's Furnishings + 2 1 %
B o o tsa n d S h o e s.. + 3
O ct.,'42
+ 3%
— 9
F U R N IT U R E
O ctober, 1943
145
129
121
112
O ct. 31,'41
^O
ct.^31°
1943
1942
— 23%
— 10
2.67
7.05
2.17
6.28
STORES
Ratio
of
O ctob er3 1 ,1 9 4 3
+ 6.1% —
—
+ 8.4
— 15.3
— 13.9
— 11.4
+
— 8.4
—
— 1.8
+ 3.0
— 26.8
— 0.8
—
9.3%
9.8
— 22.2%
— 21.6
1.5
0.4
3.2
5.0
— 37.2
— 37.3
— 46.0
— 22.6
6.1
— 25.9
31.4%
30.2
42.5
27.3
27.1
26.4
28.6
31.2
34.4
30.6
27.5%
26.8
31.9
2t).9
20.4
20.8
28.5
24.5
35.3
26.7
C a s h S a les ................................................... 19%
Credit Sales................................................. 81
T o t a lS a le s .............................................. 100
17%
83
100
'42
16%
84
100
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
O c t.,'43
Sept.,'43 O ct.,'42
10 mos.'43
10 m os.'42
166,389
158,392 163,905
47,862
46,116
1,497,910
S ource: Terminal Railroad Association o f St. Louis.
1,407,194
N o v ./4 3
N o v .,'42
21%
4
2
2
2
43
7
8
30
20
16
4
— 44
— 10
— 8
'-'6
— 17
E IG H T H F. R. D IS T R IC T
O c t.,'4 3 co m p .w ith
Sept.,'43
O c t.,'42
13
$ 86,0.00
$ 1 1 ,0 0 0
+400%
+ 173
—<62%
— 65
C H A N G ES IN P R IN C IP A L A S SE T S A N D L IA B I L I T IE S
F E D E R A L R E S E R V E B A N K O F ST. L O U IS
N o v .1 7 ,
1943
Industrial advances under Sec. 13b.
Other advances and r e d is c o u n t s ....
U . S . securities........................................
O c t . 2 0 ,^ N o v . l 8 ,
1943
1942
.
.
.$
reserves...............
F. R. Notes in circulation.............
3,850
. 446,327
+
+
3,850
34,924
—
61
+
3,655
+ 21 5 ,1 9 2
. 450,177
Total earning assets
Total
+
38,774
+ 21 8 ,7 8 6
+
+
6,818
9,681
23,331
+
5,904
+ 29,656
+ 20 1 ,4 3 7
-0 -
—
. 721,551
. 499,898
. 683,049
Industrial commitments under Sec. 1 3 b ..
337
660.
P R IN C IP A L R E S O U R C E A N D L I A B I L I T Y IT E M S
O F R E P O R T IN G M E M B E R B A N K S
N ov. 17,
1943
Oct. 20,
1943
N ov. 18,
1942
.$1,594,892
7,732 + 367,879
;* 258,067
1,420
1,666
6,488
476 + 3,377
s
10,132
777
643
64,185
507
292
Loans to banks.
3,983
22 + 3,093
Other loans.........
75,620.
4,112 + 6,708
.
418,475
7,314 + 11,863
.
101,682
16,463 —
10
.
263,794 + 23,143 + 128,583
.
149,078
1,264 + 44,927
U . S . bond s..........................................
.
516,479
4,034 + 192,894
Obligations guaranteed by U . S. G ovt..
34,331
519 +
513
.
111,053
1,281 — 10,891
. 1,176,417
418 + 35 6 ,0 1 6
.
119,067 +
3,551 — 31,321
.
906,495 + 46,558 + 83,331
214,867 +
2,617 + 23,481
.
265,145
64,183 + 22 7 ,0 1 6
526,265 + 25,138 — 13,219
3,850 +
3,850. +
3,850
^Includes open market paper.
Other than interbank and Government deposits, less cash items on
hand or in process of collection.
A bove figures are for 24 member banks in St. Louis, Louisville, MemRock and Evansville. Their resources comprise approxim ately
75% of the resources o f all member banks in this district.
(I
P E R C E N T A G E D IS T R IB U T IO N OF SAL ES
O c t . , '43
S e p t .,'43
Oct
+
—
—
—
—
—
+
—
—
+
+
—
O c t.,'42
S tock
Sept.,'43 O c t.,'42 Sept.30,'43 O c t.31,'42 O c t.,'43 O c t.,'42
St. Louis A re a l. + 8.4%
St. L o u is ......... + 8.0
A lt o n ............... + 16.1
+ 16.9
+ 18.2
+ 2.3
Little R o c k . . . . + 19.8
— 7.3
Pine B lu ff........... + 0.8
8 th D ist.T otals3. + 10.0
C O M M E R C IA L F A IL U R E S IN
^
^
O c t . ,43
S ept.,'43
108
O ct^ 3 1/4 2
— 5%
— 22
R E T A IL
in
106
Sent.,'43
122
163
112
STO RE S
+
^
^
(in th o u s a n d s o fd o lla r s )
151
M2
Net Sales
O ctober, 1943
10m os.'43
+
H ardw are.............................
Plum bing Supplies.............
T obacco and its P roducts.
M iscellaneous......................
Total all lines*....................
O ct. 31, 1943
com p, with
O ct. 31, 1942
O ct.,'42
2%
6
6
5
8
26
3
11
5
6
3
2
+
+
+
Instalment E xcl. Iiistal.
A ccounts
A ccounts
I N D E X E S OF D E P A R T M E N T ST O R E SA L E S A N D STO CK S
8th Federal Reserve District (1923-1925 average = 100)
O ct.,
Sept., A ug.,
O ct
1943
1943
1943
1942
S P E C IA L T Y
Sept.,'43
Autom otive S u p p lies..
Boots and Shoes.........
Drugs and Chem icals.
L iabilities........... $ 30,000
S ource: D u n a n d B ra dstreet.
Stocks
October, 1943
12
O u in cy .........
43% t
S t .L o u is .. . . 4 3
O thercities
40
8 t h F R .D is t .4 0 i
71%
61
66
67
Data furnished by Bureau o f Census,
U. S. Dept, of Commerce.
— 15
—
1943, collected during O ctober, by cities :
Instalment E xcl. Instal.
A ccoun ts
A ccounts
Fort S m ith........... %
L ittle R o ck
28
W H O L E S A L IN G
Lines of Commodities
N et Sales
Stock
Turnover
th
d
TO IN D IV ID U A L ACCOUNTS
Oct.,
Sept.,
O ct.,
O ct. '43 com p. with
1943
1943
1942
Sept.,'43 Oct:.,'42
El Dorado, A rk ........... $
9,053 $ 12,147
Fort Smith, A rk.........
20,382 '
24,851
6,127
5,728
Little Rock, A rk ........
81,253
78,787
Pine Bluff, A rk...........
20,204
21,820
18,789
19,416
Alton, 1 11 ..'....'.
,
12,328
14,159
E .St.L .N at.S.Y .,111..
84,731
84,123
15,550
15,977
102,560
104,933
446,935
345,227
14,024
14,438
7,405
7,453
11,052
12,80,6
5,066
5,854
4,232
Hannibal, M o ...............
4,825
19,338
25,063
Jefferson City, M o .. . .
St. Louis, M o ............... 956,489 1,090,860
5,739
S e d a lia ,M o.................
5,510
29,840,
Springfield, M o ..........
31,314
J ackson ,T enn.............
12,520
10,949
M em p his,T enn ..........
311,573
291,119
T o ta ls ........................ 2,194,961
(Completed November 26, 1943)
2,227,588
$
11,231
25,306
7,585
89,992
29,255
15,590
11,447
87,722
14,775
70,539
293,693
13,726
9,329
11,981
5,036
4,144
18,058
955,028
4,746
26,996
14,177
379,452
2,099,808
+
+
+
+
+
+
—
25%
18
7
3
7
3
13
1
3
2
29
3
1
14
13
12
23
12
4
5
14
7
1
—
19%
19
19
.10,
31
21
8
3
5
45
52
2
21
8
1
2
7
016
11
12
18
+
5
+
+
+
+
+
+
+
+
+
+
+
Page 7
!NDUSTR!AL PRODUCT!ON
M47YOM4L
OF COND7TZONS
B Y B O A R D OF G O V E R N O R S OF F E D E R A L R E SE R V E SYSTEM
Federal Reserve index.
for October, 1943.
Monthly figures, latest shown is
DEPARTMENT STORE SALES AND STOCKS
are for October, 1943.
COST OF LWNG
r-^r 140
)30
)20
after.
MRd month figures, latest shown are for October,
MEMBER BANK RESERVES AND RELATED HEMS
Wednesday figures, latest shown are for November
Page 8
Industrial activity was maintained in record volume in October and the
early part of November. Value o f department store sales continued at an
exceptionally high level.
Industrial production — The total volume of industrial production con
tinued to increase slightly in October and the Board's seasonally adjusted
index was at 245 per cent of the 1935-39 average, as compared with 240 in
July and 227 in January. W ar production in the machinery and transporta
tion equipment industries showed a further rise, reflecting largely a new
high level of production of aircraft, aircraft engines, and parts. The total
number of planes accepted during the month was 8,362, or 11 per cent more
than the average in the third quarter. Deliveries of cargo vessels from mer
chant shipyards continued at an annual rate of 20,000,000 deadweight tons.
Steel mills operated during October at the highest monthly rate during
the war period. Production o f nonferrous metals also continued to rise.
Announcement of permission to use aluminum in additional types of war
products and some essential industrial products followed rapidly increasing
output of this metal. Lumber production declined somewhat more than
usual at this season and the prospective supply situation remains critical
notwithstanding reduced demand for lumber for building purposes. Output
of stone, clay, and glass products as a whole showed little change and was
at about the level of a year ago. Cement production in October was down
40 per cent from last year but production of other stone, clay, and glass
products, like glass containers and asbestos and abrasive products, was con
siderably higher than last year.
Output of most nondurable goods showed little change from September
to October. Food manufacturing as a whole continued in large volume,
allowing for seasonal changes, although butter and cheese production de
clined. Output of butter was 11 per cent below last year in October and
declined further in the early part o f November. Meatpacking, however, was
at an exceptionally high level in October and continued to increase sharply
in the first three weeks of November. There was also a rise in production
of wheat Hour and other manufactured foods in October. Output o f textile
and leather products remained at the somewhat reduced rate o f recent
months, while production of rubber products and industrial chemicals in
creased. Coal poduction declined 6 per cent in October and dropped sharply
further during the first week o f November, but increased in the middle of
November.
The value o f construction contracts awarded in October, according to
reports of the F. W . Dodge Corporation, continued at the low level of other
recent months. Total awards this year have been 60 per cent smaller than
in the corresponding period o f 1942, when they were at the highest level of
the war period.
Distribution — Department store sales in October and the first half of
November were 10 per cent larger in dollar volume than in the same period
last year, and, allowing for seasonal changes, sales were somewhat higher
than in the third quarter o f this year. Total consumer expenditures for
commodities and services in the third quarter were at about the peak level
prevailing in the first half of this year and were substantially larger than a
year ago.
Carloadings of railway freight in October were slightly less than in
September, reflecting chiefly declines in shipments of coal and ore. Load
ings o f grain increased sharply to a level 20 per cent greater than in October,
1942, and livestock shipments were the highest in recent years.
Commodity prices — Grain prices advanced in the early part o f Novem
ber, while prices o f livestock declined as livestock marketings expanded
sharply. Prices of certain industrial raw materials, such as cotton, wool,
and nonferrous metal scrap, have also declined somewhat since the middle of
October reflecting larger supplies and uncertainties as to the extent o f de
mands for these materials in war production.
The total cost of living which had declined 1.4 per cent during the sum
mer, according to the Bureau o f Labor Statistics, rose 0.8 per cent from
mid-August to mid-October. There were increases in prices o f food, cloth
ing, and a number of miscellaneous items.
Bank credit — The average level of excess reserves at all member banks
was around 1.1 billion dollars in mid-November rejecting some decline from
the comparable October period. During the four weeks ending November
17 reserve funds were supplied to member banks by an increase o f over 900
million dollars in the Government security portfolio of the Reserve Banks;
increased holdings consisted largely of bills purchased under option and in
part o f certificates. The effect of these security purchases on excess reserves
was more than offset, however, by a currency demand of 540 million dollars
and a continued increase in required reserves as Treasury disbursements
transferred funds from reserve-exempt war loan accounts to private deposits.
FEDERAL RESERVE BAN K OF ST. LOU!S
DECEM BER
1. 1 9 4 3
BEEF CATTLE SITUATION
The article on the follow ing pages was prepared by R. M. Evans, Member
of the Board of Governors of the Federal Reserve System, and former A dm in
istrator of the Agricultural Adjustm ent Administration. It has been reviewed
by various agencies that are in a position to know the beef cattle situation and
merits consideration by all bankers who have dealings with livestock interests.
As shown in the table below, about one-sixth of all beef cattle in the
nation is in states contained in whole or in part in the Eighth Federal R e
serve District. Between 1939 and 1943 the increase in cattle numbers in
Eighth District states was about the same, relatively, as during the First
W orld W ar period and thus the district situation closely parallels that of the
nation. The number of beef cattle on farms in Eighth District states during
the present war period, however, is substantially greater than during the
years 1914-18. In 1918 about 15.3 per cent of all beef cattle in the United
States were in Eighth District states. In 1943 the ratio was about 16.6 per
cent.
BEEF C A T T L E ON FARM S
Eighth District States
1939
6.7
Number ( M illio n s )..........................
Average Value (Dollars per head). . 27.46
Total Value (Millions of dollars) . .183.3
1943
1914
8.5
51.74
437.7
6.2
29.74
184.4
Percentage Change
1918
7.9
40.43
319.4
1939-1943
1914-1918
+ 27
+ 88
+ 139
+28
+36
+ 73
Feed is short in this district and the spread between feeder and finished
cattle prices is not sufficient to justify heavy feeding. Consequently, larger
marketings of cattle seem to be in prospect at this time, especially since con
sumer demand for beef is high at present and consumer purchasing power is
large. On the other hand, slaughter facilities are taxed to capacity now and
in St. Louis virtually all cold storage space is reported Riled. Instances have
been reported where slaughterers went com pletely out of the market for a
time because they were unable to handle any additional purchases. An
extremely heavy How of cattle to market during the peak hog slaughter
period might well jam the markets, adversely aftect prices, and lead to
the establishment of formal marketing quotas.
W e are interested in obtaining any comments you may care to make con
cerning the beef cattle situation in your community. W e have a limited
number of additional copies of this article available for distribution.
BEEF CATTLE SITUATION
by
R. M. Evans, Member, Board of Governors of the Federal Reserve System
The outstanding features of the current beef cattle
situation are: (1) a continuing increase in the num
ber of cattle on farms and ranches to record heights,
notwithstanding some decline from last year in the
number in feed lo t s ; (2) a prevailing level of beef
cattle prices generally at least 50 per cent above
1939; (3) a volum e of slaughter higher than in 1939,
but below that of last year; (4) a potential con
sumer demand for beef greatly in excess of current
supplies in the market, with rationing of limited
supplies left after military needs are m et; (5) a
grow ing shortage of feeds brought about by a gen
eral rapid expansion in livestock numbers without
a corresponding increase in feed supplies; (6) a total
value of beef cattle on farms probably above $2.8
billion, as compared with $1.2 billion an 1939 and an
earlier peak of $2.3 billion in 1919; (7) sharply ris
ing land values in the range country.
Examination of the current position and also of
past developments indicates a need for consideration
by cattle growers and others of possible action to
increase slaughter, thereby meeting more fully the
current demand for beef and at the same time im
proving the basic position of the cattle industry.
Adjustment in cattle numbers is necessarily a slow
process and it appears that unless special wartime
demands are to be replaced by special peacetime
demands there should be some downward adjust
ment in cattle numbers, beginning in the near future.
Increased marketings, within limits set by available
transport and packing facilities, would certainly
help to meet the food requirements of the war period
and would not reduce numbers on farms enough to
jeopardize meat supplies after the war. A t a later
date new developments could be taken into account
in deciding how far the readjustment should go for
the long-tim e good of the industry and of the con
suming public.
The total number of cattle on farms has risen
from 66.0 million in 1939 to 78 million in January
this year and, according to a Department of A g ri
culture estimate, may show a further increase to
80.8 million by the beginning of next year. For
cattle other than milk cow s the number on farms
last January was 51.2 million head, an increase of
10 million, or 24 per cent, over 1939. This increase
was nearly as large as the expansion from 1914 to
1918, as indicated in the Table and in Chart 1. Since
January there has been further growth in numbers
in contrast with 1918 when there was some decline.
The number in feed lots August 1, however, was 11
per cent smaller than a year earlier, as feed condi
tions and price relationships have became less favor
able for feeding operations.
Beef Cattle on Farms, First and Second
World Wars
1939
Number (millions ) . .41.4
Average Value
(dollars per h e a d ).28.18
Total Value
. (billions of dollars). 1.2
1943
1914
1918
51.2
39.6
51.5
1939-43 1914-18
+ 24
+30
53.90
31.50
41.39
+ 91
+ 31
2.8
1.2
2.1
+136
+71
N O T E : To make later data comparable with 1914 figures, dairy
heifers and calves are included. From 1939 to 1943 the number
o f beef cattle, excluding dairy heifers and calves, rose by 26
per cent, from 30.4 million head to 38.4 million head.
CATTLE NUMBERS AND VALUES
CATTLE OTHER THAN MtLK COWS ON FARMS
The volume of inspected cattle slaughter so far
this year has been small, considering the number of
beef cattle on farms and the strong demand for
beef. In June it was sharply lower and in recent
months, despite some increase, has continued below
a year ago. Total slaughter is estimated to be at a
level which will permit an increase this year of 2.7
million head in number of all cattle on farms. Cur
rently prices of most classes of cattle are somewhat
under the peak reached in the spring but are 50 per
cent or more above those of 1939.
cluding the peak year 1919. The increase from 1939
to 1943 was $1.6 billion, nearly twice as much as
from 1914 to 1918.
Supplies of grain available in the com ing year
will be about 7 to 10 per cent less the amount avail
able for feeding last year, while the number of ani
mal units (including hogs, chickens, sheep, horses
and dairy cattle, as well as beef cattle) will be about
10 per cent larger. Cattle grow ers will be more
dependent than this year on pastures to maintain
their herds.
These higher values, together with higher current
incomes, have contributed greatly to a rise in land
values, which recently has been rapid in many areas.
For the Mountain States as a group, farm land
values in July averaged 10 per cent higher than a
year earlier and a fourth higher than in 1939. In
the Southwest, values have gone up 10 per cent
during the past year and 20 per cent since 1939.
These increases have been similar, in percentage
terms, to those in the 1914 to 1918 period.
CHART t
CATTLE
NUMBERS AND SLAUGHTER
In view of these developments in recent years,
what is the prospect for the cattle industry in the
years ahead? H ow long will demand be sustained
at current levels ? H ow will numbers on farms
change and what will the volume of slaughter be?
W hat is the probable course of cattle prices and
values? H ow much will farm land in the range
country be worth in the market?
These important questions cannot be answered
with any precision, but it is possible to review what
has happened after previous periods of expansion in
cattle numbers and values, and to consider how new
conditions may lead to different developments —
and what it all means for current marketing deci
sions. The hrst conclusion from such a review is
that the situation of the cattle industry will depend
in considerable part on demand conditions largely
beyond the control of cattle growers. The biggest
decline in prices after the last war came in the
C AT *
WE
Demand for beef, as for other meats, in the cur
rent period is much higher than ever before. The
armed forces are taking large amounts of beef — 30
per cent in Federally inspected plants — and civilian
demand is exceptionally stron g; incomes are much
higher than usual, even after allowance for increased
personal taxes, and people generally are working
harder.
Consumers are eating considerably less
beef than they would if larger supplies were avail
able on the market and if, as a result, the number
of ration points required for the purchase of beef
could be reduced.
W ith a rise of one-fourth in beef cattle numbers
from January, 1939 to January this year and a
doubling of average value per head in this same
period, total value was up from $1.2 billion to $2.8
billion. This level, as indicated in Chart 1, was sub
stantially above that of any previous January, in
PRICES OF CATTLE AND HOGS AT CHICAGO
t9!3
!9)4
!9!5
)9)6
!9t7
!9t8
)9)9
)920
!92!
!922
!923
!924
autumn and winter of 1920-21, when demand was
sharply curtailed, and while slaughter was substan
tially below the wartime peak. The other important,
although temporary, decline occurred in late 1919,
follow ing a break of $7 a hundred in hog prices
when export demand for pork products was cut in
half. The record clearly suggests the desirability,
from the point of view of cattle growers, of market
ing substantial numbers in a period of strong de
mand such as the present.
Another conclusion is that expansion in numbers
and values beyond levels that can be reasonably
maintained greatly intensifies the e je cts of any
slackening of demand. The collapse in the industry
in 1920-21 reflected not only reduced urban incomes,
but large herds on farms and high valuations pre
viously placed on cattle and on land.
Price declines at that time were drastic and their
e je c ts spread throughout the range country, result
ing in heavy losses to growers, lending institutions
and the com m unity generally. Value per head de
clined 50 per cent, from $44 to $22, between January,
1919 and January, 1922. W ith a 7 per cent decline
in cattle numbers in this period total value was
down from $2.3 billion to $1.0 billion, a level lower
than in 1914. Land values in the Mountain States
and the Southwest declined a fourth from January,
1920 to January, 1923.
Current receipts from sale of cattle were sharply
reduced and cattle growers generally were hard
pressed to meet payments due on debts incurred
when prices were much higher. Many old loans
were extended and new loans were made to help
growers through this period. But even so the im
mediate and ultimate losses were large and condi
tions were depressed in the range country for years.
Bank failures, which had been few during the
period of rising cattle and land prices, increased
sharply. In a group of eight states, including the
Mountain States, Texas, Nebraska and Oklahoma,
the rate of bank suspensions was more than twice
that for the United States as a whole from 1921
through 1923 and continued at a high level for
years afterward. The widespread effects of the
rapid lowering of values extended through the
whole decade— and beyond. The housewife at the
meat counter as well as the cattle grow er would
have benefited by more orderly developments in the
cattle industry.
In considering what this experience means for
present planning, it is important to note that there
has been real improvement in the banking situation
in the cattle country. Assets are now more diver
sified, and a larger proportion of them in Govern
ment securities. Loans are more adequately secured
and supervision is generally on a higher plane. In
addition, whereas at the end of the last war banks
were heavily in debt, they now hold reserves in
excess of their needs.
Furthermore, the greater liquidity which the Fed
eral Reserve System now gives to Government
securities and other assets in the portfolios of banks
would help to prevent unreasonable and untimely
pressure on borrowers for repayment of loans.
Improvement in the banking situation, however,
does not alter the basic facts with respect to cattle
numbers, demand for beef, cattle prices and land
values or their implications for cattle growers, lend
ing institutions and the community generally in the
years ahead.
