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FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REVIEW OF BUSINESS CONDITIONS IN EIGHTH DISTRICT Released for Publication On and After the Morning of December 30, 1926 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent X C E P T for increasing unevenness in some lines and sections of the district, the busi ness situation during the past thirty days has developed no marked changes as contrasted with the similar period immediately preceding. Slowing down in activities, which began earlier in the Fall continued during November, but in most instances the recession was seasonal in character, and several lines which showed losses in October recorded moderate gains last month. Taken as a whole production and distribution of merchandise were maintained at high levels, and with the excep tion of localities, where effects of unfavorable local conditions are making themsevles felt, there is no diminution apparent in the demand for goods or purchasing pow er of the public. Debits to individual accounts in the principal cities of the district during N ovem ber showed an increase ol 0.4 per cent over the same month in 1925, but a decrease of 7.7 per cent under October. The loss in the month-tomonth comparison is accounted for largely by the fact November was a one day shorter month than its predecessor and contained three holidays. E A s is usual at this time of year, interest in mer chandising centered chiefly in the retail section. H oliday shopping, as indicated by most recent re ports, got an early start, and has been in heavy volume. An additional stimulus to retail buying has been the arrival of colder weather, which has had the effect of accelerating the movement of seasonal goods, particularly apparel, fuel and heavy footwear. Generally, however, results have been relatively much better in the large cities than in the country, and through the South there are in creasing complaints of backward buying due to the low price of cotton. N ovem ber sales of the depart ment stores in the five largest cities of the district were 8.2 per cent over the same month last year, and gains were also shown by the mail order houses and five and ten-cent stores. The trend in wholesaling was slower, with sev eral important lines reporting decreases greater than could be ascribed to seasonal influences. Gen erally advance bookings were the smallest for any similar period in the past five years, but during the past three weeks current sales have been substan tially augmented by fill-in orders of holiday goods and seasonal merchandise. A further sharp slump took place in both production and distribution of automobiles, and generally through the iron and steel industry activities were considerably below those of the preceding month, though about equal to a year ago. The general disposition to reduce stocks against the inventorying period, slowing down in building and slack buying by the railroads were factors in the smaller sales of iron and steel products. A ccording to reports of the Employment Ser vice, United States Department of Labor, em ploy ment in this district decreased during the past thirty days. The losses, however, were chiefly sea sonal, and no larger than the average at this period during the past several years. Completion of the harvests and suspension of work by highway con struction contractors have occasioned increased un employment in the country. In the South there has been a reduction of workers at quarries, lumber mills, glass plants, and in some of the minor indus tries. Fewer workers were employed in the auto mobile and railroad shops and in the iron and steel industry. Employment in department stores in creased heavily, and there were gains in paper, printing and packing establishments. W orking forces of boot and shoe and clay products manufac turers were reduced, while textile mills, oil refiner ies, furniture plants and cigar factories showed lit tle variation from the preceding month. W hile a slowing up in buying of coal has been felt in the principal mining fields of the district, there is still considerable activity and production continues at high levels. The recent heavy demand, occasioned by the strike of British miners, resulted in a general reduction of stocks, and in the imme diate past there has been extensive purchasing to build up depleted reserves. This buying, coupled with stimulation given the domestic trade by recur rent cold spells, has served to absorb the increased November was 104,000 tons against 103,960 tons (revised figures) in October, and 47,361 tons in November, 1925. Reports relative to collections during the past thirty days indicated a slow ing down as contrasted with the similar period immediately preceding, and the general average was below that of a year ago. output of the mines, and to hold prices steady at Least satisfactory results were noted in the South, the slight reductions from the peak levels of early November. In the Illinois, Indiana and W estern Kentucky fields, mine operators have a fair volume where the low prices being realized by producers of cotton, tobacco and rice have a tendency to cur of unfilled orders, and there is relatively little com tail payments. In the northern sections of the dis trict country merchants report settlements below plaint o f cancellations. In the immediate past, h ow expectations due principally to inclement weather, ever, Eastern mines have increased their offerings which has interfered with communications and the movement of farm products to market. Reports in the Middle W est, and the tone of the market is weaker, particularly on steaming grades. There is a disposition am ong railroads and certain industrial interests to store coal against a possible strike in the bituminous fields next spring. For the most part shaft mines were active from four to five days per week, with some of the larger collieries and a majority of the strip pits w orking close to full time. Since the second week of December, however, a number of Illinois and Indiana operators have cur tailed their activities in order to lessen overproduc tion. For the country as a whole, production of bituminous coal during the present calendar year to Decem ber 4, approximately 286 w orking days, amounted to 530,232,000 tons, against 478,653,000 tons during the corresponding period in 1925, and 442,361,000 tons in 1924. A ccording to officials o f railroads operating in this district, the movement o f freight continues at unusually high levels for this time of year. Open weather and heavy loadings of coal and merchan dise were largely responsible for the gains shown over the corresponding period in 1925. For the en tire country loadings of revenue freight for the first 48 weeks this year, or to N ovem ber 27, totaled 49,529,613 cars, against 47,523,818 cars for the same period in 1925, and 45,059,546 cars in 1924. The St. Louis Terminal Railway Association, which han dles interchanges for 28 connecting lines, inter changed 215,290 loads in November, against 241,339 loads in October, and 222,669 loads in November, 1925. During the first 9 days of Decem ber the inter change amounted to 61,719 loads, against 66,721 loads during the same period in 1925, and 68,350 loads during the first 9 days of November. Passen ger traffic of the reporting roads in N ovem ber de creased 2 per cent as compared with the same month last year. Estimated tonnage of the Federal Barge line between St. Louis and New Orleans for from wholesalers in the large centers reflect irregu lar conditions, some showing a high rate, while others complain of backward payments and an un usually large number of requests for extensions. For the most part retailers in the cities are getting in their money promptly, and in the coal fields col lections are better than has been the case since last winter. Questionnaires addressed to 463 represen tative interests in the various lines throughout the district showed the follow ing results: Excellent November, 1926......... 1.4% October, 1926............... 1.4 November, 1925......... 5.5 Good 29.7% 26.4 34.1 Fair 59.5% 62.5 52.7 Poor 9.4% 9.7 7.7 Commercial failures in the Eighth Federal R e serve District during November, according to Dun’s, numbered 69, involving liabilities of $806,848, against 67 defaults in October with liabilities of $801,234, and 74 failures for $5,173,004 in N ovem ber, 1925. The per capita circulation of the United States on December 1, 1926, was $42.62, against $42.53 on November 1, and $43.35 on Decem ber 1, 1925. M A N U F A C T U R IN G A N D W H O L E S A L E Autom obiles — Production of passenger auto mobiles by American manufacturers during N ovem ber totaled 219,479, which compares with 288,848 in October, and 328,694 in November, 1925. The total output of trucks in Novem ber was 36,334, against 42,890 in October, and 37,811 in November last year. Distribution of automobiles also decreased dur ing the past thirty days, sales of dealers in the dis trict being sharply below those of the preceding month and of the corresponding period last year. Losses were general through the entire line, but were most pronounced in the lower priced classifi cation. Distributors of high priced cars report a general tendency to wait until after the first of the year before making commitments. There was less stimulation to buying as a result of the Christmas season than has been the case for a number o f years. Country dealers report that replacement purchasing during the late Fall was unusually light, particu larly in the South. Agriculturists, in conform ity with the general policy o f econom y, are to a large extent repairing their automobiles and endeavoring to make them serviceable as long as possible. This fact, coupled with an intensive campaign for holi day business in accessories, is accountable for a relatively better showing in sales of parts and ac cessories than of automobiles. Stocks of new cars in hands of dealers showed a moderate increase over the preceding month and the total was larger than at the same time last year, but except in few instances inventories are no larger than the sea sonal average of the past several years. Sales of passenger automobiles during N ovem ber by 320 dealers scattered through the district were 33.8 per cent smaller than in the same month last year, and 12.3 per cent below the O ctober total this year. Sales of parts and accessories were 9.5 per cent be low a year ago, and 1.5 per cent less than in O cto ber this year. O f the sales of reporting dealers, 61.4 per cent were made on the deferred payment plan, as compared with 58.3 per cent in October and 70.0 per cent in November, 1925. The used car situation was reported less satisfactory than a month earlier. Stocks were slightly larger, due, however, to reduced sales rather than an increase in the number of cars taken in. There was no change w orthy of note in prices of new autom o biles as compared with the preceding thirty days. T he tire trade continues slow, purchasing by deal ers and the public being almost exclusively on an immediate requirement basis. Boots and Shoes — Novem ber sales of the 11 reporting interests were 2.7 per cent larger than during the same month in 1925, and 3.4 per cent below the O ctober total this year. Stocks on D e cember 1 were 3.0 per cent larger than a month earlier, but 13.3 per cent smaller than on December 1, 1925. A s usual at this season manufacturers were concerned chiefly with the shipment o f goods previously purchased, it being a between-season period, with salesmen mainly in from the road. A fair volum e of reordering was reported, and busi ness generally was satisfactory. Prices were un changed as compared with the preceding thirty days. A further reduction in factory operations was reported. Clothing — Colder weather has had a stimulat ing effect upon distribution of heavyweight cloth ing and the past three weeks have witnessed a sub stantial reduction in stocks of these goods. Reports reflect considerable irregularity in the trade, results in the South being generally disappointing, while in the large cities business is satisfactory. Sales for delivery next spring have improved during the past thirty days, the volume with a majority of the re porting interests being slightly ahead of the same time last year. November sales of the 8 reporting firms were 13.3 per cent below those of the corres ponding month in 1925, and 7.5 per cent below the October total this year. Dry Goods — The past three weeks have been marked by a falling off in current orders and ad vance business of the reporting firms is about 37.6 per cent below the volume at this time last year. Shipments in November were unusually large, due to special efforts of wholesalers to forward holi day goods prior to the inventory period. Despite the decline in raw cotton, the movement o f cotton goods has been quite satisfactory, and prices have held relatively steady, with slight advances in some items for spring delivery. H eavyweight underwear, sweaters and other knit goods are in active demand, and sales of notions and miscellaneous goods are holding up well. The 8 reporting interests report Novem ber sales 10 per cent larger than in the same month last year, and 3.6 per cent greater than the October total this year. Stocks on December 1 were 17.3 per cent less than thirty days earlier and 3.6 per cent below those of a year ago. Drugs and Chemicals — Sales of holiday goods were reported generally up to expectations, and there was the usual seasonal increase in the m ove ment of remedial drugs. Some falling off in ordering of heavy chemicals by the manufacturing trade was noted. T otal sales of the 7 reporting firms in N ovember were 1.8 per cent larger than during the same month in 1925, but 12.4 per cent below the October total this year. Electrical — Large sales of holiday goods, radio material and household appliances were the chief factor in an increase in N ovember sales of the 5 reporting interests of 5.9 per cent over the corres ponding month in 1925 and of 4.4 per cent over the October total this year. Stocks on December 1 were 33.5 per cent larger than a year ago, and 5.9 per cent in excess of those on N ovem ber 1 this year. Flour — Production by the 12 leading mills of the district during N ovember was 375,575 barrels, the smallest since last July, and comparing with 411,049 in O ctober and 324,314 in November, 1925. Stocks of flour in St. Louis on Decem ber 1 were 20 per cent less than on the same date in 1925, and 8.3 per cent below the N ovem ber 1 total this year. The mills report continued dullness in the matter of new orders, though shipping directions on flour previously purchased were fair. During the latter part o f N ovem ber prices eased slightly in sympathy with the decline in cash wheat. Later a firmer price range developed with the upturn in wheat about Decem ber 1, but this has been follow ed in the im mediate past by a lower trend. E xport demand was slow, offers abroad receiving scant response. Mill operations averaged about 45 per cent of capacity. Furniture — Business in this classification showed considerable improvement over conditions at the corresponding time last year, November sales of the 16 reporting interests being 15.1 per cent larger than during November, 1925. H owever, a decrease of 3.3 per cent in the Novem ber total under that of October was reported. Stocks on Decem ber 1 were 3.3 per cent smaller than a month earlier and 21.7 per cent larger than a year ago. Ordering of holiday goods was exceptionally good, and improvement was noted in demand for metal furniture and office equipment. Groceries — Novem ber sales of the 11 report ing interests fell 11.4 per cent below those of the same month in 1925, and 14.6 per cent below the October total this year. Stocks on December 1 were 3.5 per cent smaller than on the same date last year, and 2.3 per cent larger than on November 1 this year. Purchasing by retailers is on a hand-tomouth basis, advance business on Decem ber 1 be ing the smallest for any similar period in five years. The movement of holiday goods was disappointing, particularly in the S ou th ; sales o f canned goods are below expectations. Prices averaged about steady with the preceding thirty days, advances about equalizing declines. Hardware — W hile the lighter lines of hard ware, including holiday merchandise, sporting goods, and some shelf lines, were in active demand, there was a sharp decrease in the movement of staple goods, builders’ tools and hardware and pain ters’ supplies, with the result that N ovem ber sales of the 12 reporting interests were 12.8 per cent smaller than during the same month in 1925, and 16.7 per cent below the O ctober total this year. Stocks on December 1 were 1.7 per cent smaller than thirty days earlier, but 3.5 per cent larger than on Decem ber 1, 1925. Retail stocks are small, but there is a disposition to postpone replenishing until after inventory period. Iron and Steel Products — Mills, foundries and machine shops report a rather marked slowing down in the volume of new orders for their pro ducts. Users of finished and semi-finished iron and steel goods are for the most part holding down their purchases to bare necessities in the effort to show small inventories at the end of the year. D e mand from the building industry shows somewhat more than the usual seasonal decline. Fabrica tors of steel structural materials have reduced their working forces, and new orders being placed with them are in smaller volume than ship ments, with the result that unfinished business shows a further decrease. The movement of rein forcing bars and standard structural shapes was smaller than during the preceding thirty days, but about equal to that of the corresponding period last year. Makers and distributors of sheets and tank plates report a recession in demand for their goods, and the leading producer of this material has reduced operations from 85 per cent to 70 per cent capacity. Manufacturers of stoves and heating apparatus, particularly the latter, continued to operate at the rate of the month be fore, and their N ovem ber shipments showed a small gain over the same month in 1925. Farm implement interests are experiencing a satisfactory business, but sales are below what was expected for the period. A utom obile producers are buying on a hand-to-mouth basis, but during the past three weeks there has been some improvement in specifi cations from this industry. Im proved buying by the railroads is noted, chiefly in the form of place ment of orders for cars and track supplies. Busi ness in semi-finished iron and steel has been cir cumscribed by limited specifications on materials for fourth quarter shipment and inquiry for tonnage to be delivered during the first quarter of 1927. W arehouse interests report a slowing down in de mand from the general manufacturing trade, but this has been in a measure offset by a heavier call from the coal industry, and heavier buying by Southern lumber and cotton oil mills. Demand for oil country goods continues quiet. Production of pig iron for the entire country in N ovem ber totaled 3,238,000 tons, a decrease of 96,200 tons under the October output. Buying of pig iron has receded sharply since the movement in early November, but shipments continue on a large scale. Prices were nominally unchanged, but the trend was lower. Steel ingot production for the country in November reached the lowest level for both output and daily average rate since July. Lum ber — Unfavorable weather for building in N ovem ber and a reduced volum e o f construction work on which contractors have been asked to bid, held down business during the period under review. Inventorying and influence of the holidays were additional factors adversely affecting the trade. Planing mills have to a large extent worked off their accumulated orders, and are actively seeking new business. Despite these unfavorable factors, with attendant drooping prices since early.fall, pro ducers and distributors of lumber are optimistic in their views of the situation. Light buying and pro duction during the past several months has resulted in small stocks in both jobbin g and retail yards, and reserve supplies in consumers’ hands are also of moderate proportions. In the immediate past there has been some improvement in demand from car builders, and better current buying by the gen eral manufacturing trade is in evidence. R E T A IL T R A D E Conditions in the retail trade are reflected in the follow ing comparative tables showing activities at department stores and shoe and men’s furnishing stores in leading cities of the district. N o t sales comparisons Stocks on hand Stock turnover N ov. 1926 11 months ending comp, to N ov. 30, 1926 to N ov. 1925 same period 1925 Evansville .........+ 1 5 . 2 % — 3 .1 % Little R ock.........+ 7.0 — 1.3 Louisville ........... + 11.8 — 0.05 M em phis ..............+ 3.8 + 7.1 Quincy ................ + 2.9 — 0.7 St. Louis............. + 9.1 + 2.0 Springfield, M o ..— 2.3 — 1.6 8th D istrict.........+ 8.2 + 2.2 N o v . 30, 1926 comp, to N o v . 30, 1925 — 5 .8 % — 2.2 — 5.3 — 6.2 — 1.3 + 0.8 — 3.1 — 1.6 N e t sales comparisons N ov. 1926 compared to* N ov. 1925 O ct. 1926 — 7 .1 % M en’ s furnishings............ . + 1 5 . 5 % ’ Boots and shoes................ + 3 4 . 8 — 0.2 January 1 to N ov. 30, 1926 1925 197.5 185.2 234.5 237.5 307.0 312.0 246.8 220.1 226.6 221.4 304.1 306.9 154.0 147.0 282.8 278.5 Stocks on hand N o v . 1926 compared to N ov. 1925 O ct. 192 d + 5 .8 % — 0 .6 % + 6.8 — 8.4 CONSUM PTION OF E L E C T R IC IT Y Public utilities companies in the five largest cities of the district reported N ovem ber consump tion of electricity by selected industrial customers 6.8 per cent less than during the same month in 1925, but 4.9 per cent larger than in O ctober this year. Decreases in the yearly comparison were con fined chiefly to steel, cement, and furniture plants. The usual seasonal decrease in the district as a w hole from October to N ovem ber was offset by large gains shown by the Memphis company. De tailed figures fo llo w : N o . of N ov. O ct. Custom 1926 1926 ers * K .W . H . * K .W . H . Evansville ..... 40 1,147 1,290 L ittle R ock...35 1,132 1,553 Louisville ...... 80 5,020 5,632 Mem phis ........31 1,945 1,554 St. L o u is.........94 15,508 16,539 T o ta ls...... 280 24,752 * I n thousands (000 om itted). m 26,568 N o v . 1926 comp, to O ct. 1926 — 1 1 .1 % — 2 0.7 — 10,9 + 2 5 .2 ' — 6.2 — 6.8 N ov. 1925 * K .W .H . 1,035 1,147 4,945 1,543 14,923 23,593 N ov. 1926 comp, to N ov. 1925 + 1 0 .8 % — 1.3 + 1.5 + 2 6 .1 + 3.9 + 4.9 T h e follow ing figures, compiled by the Depart ment of the Interior, show kilowatt production both for lighting and industrial purposes for the country as a whole. B y water power October, 1926....................... 2 ,159,276,000 September, 1926.................. 2,055,673,000 October, 1925....................... 1 ,795,906,000 B y fuels 4,399,920,000 4,120,573,000 4,135,690,000 Totals 6 ,559,196,000 6,176,246,000 5,931,596,000 BU ILD IN G The dollar value of permits issued for new buildings in the five largest cities of this district during November fell 16.3 per cent below the same month in 1925, and 3.6 per cent below the October total this year. A ccording to statistics compiled by the F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District during November amounted to $30,585,898 which compared with $40,981,236 in O ctober and $34,932,000 in November, 1925. Production of portland cement for the entire country in N ovem ber totaled 14,193,000 barrels, against 16,596,000 barrels in October, and 13,656,000 barrels in November, 1925. Build ing figures for N ovem ber follow : N ew Construction *Cost Permits Evansville , Little Rock: Louisville .., M emphis ..., St. Louis.... 1926 1925 300 53 163 137 600 131 83 220 299 758 1926 $ 174 1,039 752 1,078 2,173 Permits 1925 $ ________Repairs, etc. 215 241 1,011 930 3,893 1,253 1,491 $5,216 $6,290 Oct. totals 2,025 2,103 5,405 7,327 Sept. totals 1,885 1,901 6,716 8,555 * I n thousands of dollars (000 om itted). Cost 1926 62 88 67 201 337 1925 53 82 50 145 371 $ 755 785 887 701 954 894 1926 1925 19 31 117 142 1 855 $ 14 26 82 113 233 $1,164 677 956 $468 616 646 A G R IC U LT U R E Throughout the district weather conditions during the past thirty days were mainly unfavora ble for outdoor activities, and farm work is from a week to two weeks behind the usual schedule for this time o f year. Frequent rains prevented far mers from entering their fields, and Fall plowing was only about 80 per cent completed on December 1. The excessive moisture also interfered with late harvesting and the movement of crops to market. The low prices o f cereals also tended to restrict marketing of corn, wheat and rice. Except in a limited number of Southern counties, farm labor has been adequate to all requirements, and in the immediate past some surplus has developed in the Northern tiers of the district. W age scales being paid to farm help are at approximately the same levels obtaining at the corresponding time last year. Winter Wheat — Seeding of winter wheat con tinued where weather and soil conditions permitted up to the last week of November, follow ing which time cold weather and snow brought these opera tions to a close. In m ost sections acreage is about equal to that of last Fall, but below what had been planned last summer. Early seeded wheat is up to a good stand, and in favorable condition for en tering the cold weather. The fields planted late, however, are not doing so well though the recent rains and snow are expected to improve the condi tions of this portion of the growing crop. Corn — In spite of delays occasioned by wet fields, husking and cribbing of corn has made good progress. A s a whole, however, the harvest is con siderably later than the average at this particular period during the past five years. Latest returns tend to bear out early estimates relative to yield, but are bringing to light an unusually large amount of low grade corn. Moisture content is high in many sections, due to excessive rains during the Fall, and there are numerous complaints of rot and mould to corn both in shock and in the field. A s a result of drought during the early grow ing season, there are more than the ordinary number of small, unde veloped ears in the crop. L ow prices have discour aged marketing o f corn, and the movement from farms continues light. Live Stock — Some improvement in the condi tion of live stock developed during the past thirty days. Outbreaks of h og cholera, noted in the two preceding issues of this report, have been well controlled, and losses from that cause were con siderably reduced. T h e movement of cattle and hogs to market increased slightly, and prices were fairly well maintained. The number of sheep and lambs on feed for the market in this district is lar ger in virtually all sections than was the case at the corresponding period last year. Due to the low price of corn, farmers are endeavoring to increase the number of hogs on feed. Receipts and shipments at St. Louis, as re ported by the National Stock Yards, were as fol lows : ________ Receipts________ N ov. 1926 O ct. 1926 N ov. 1925 Cattle and Calves...... 151,301 163,112 137,753 H o g s .............................. 289,015 286,357 309,415 H orses and M ules.... 3,906 4,631 5,410 Sheep .............................. 35,457 67,303 37,755 Shipments________ N ov. 1926 O ct. 1926 N ov. 1925 90,917 109,530 83,787 207,568 213,262 207,721 2,996 4,569 5,578 12,069 40,902 11,751 Cotton — T h e total crop for 1926 is estimated by the Department of Agriculture at 18,618,000 bales, the largest ever recorded, and an increase of 2,515,000 bales over the country's output in 1925. W ith the exception of Arkansas, however, yields in all the chief cotton states of this district were smal ler than last year. W eather during the period under review was unfavorable for harvesting the crop, and a large quantity still remains to be picked, par ticularly west o f the Mississippi River. Movement to market continue in large volume, ginnings to December 1 being 14,644,000 bales, the largest ever reported to that date. Stocks in Arkansas ware houses on Decem ber 10, amounted to 583,113 bales, against 490,068 bales on the corresponding date last year. The demand from both domestic consumers and for export was reported good, but the trend of prices was lower, the middling grade in the St. Louis market on Decem ber 15, closing at l l j ^ c per pound, against 12j^c on November 15, and 19j^c on Decem ber 15, 1925. Rice — Farmers have about completed their threshing, and due to favorable weather during the harvesting season, condition of the grain is high. The crop is m oving rapidly to the mills, but the demand is sluggish, and farmers are not able to dispose of their stocks as rapidly as they would like to. There has been a slight decline in prices on bulk of the crop, but despite this fact the rough rice position is strong, and in the immediate past some independent mills buying non-association rice have been paying a slight advance. Tobacco — New crop burley tobacco has been m oving to the loose-leaf markets in large volume in all burley districts, with average prices about 4c per pound below last year’s levels. Much of the burley crop is of large size, but rather poor quality, representing that part of the crop known as “ wet weather tobacco.” Virtually all loose-leaf markets in the dark tobacco districts have opened except in the dark-fired districts, where relatively little tobacco has been stripped and openings have been postponed until after January 1. Sales of the new Green River aircured and one sucker tobacco over the loose-leaf floors have been heavy, but the tobac co offered has not been of desirable quality. The Burley T obacco Growers Cooperative Association reports additional sales of the 1923, 1924 and 1925 crops, bringing the total during the past tw o months to about 55,000,000 pounds. Commodity Prices — Range of prices in the St. Louis market between N ovember 15, 1926 and December 15, 1926, with closing quotations on the latter date and on Decem ber 15, 1925, fo llo w : Low H ig h W h ea t Decem ber ...... ..per b u .$ l .3954 $ 1 .3 0 ^ 1.43 M a y .................... ... " 1.3754 1.34 N o . 2 red winter “ 1.42 N o . 2 hard...... ... “ 1.4354 1.36 C om .74 Decem ber ........ .6854 , “ .85 .7854 .69 N o . 2.................. .69 N o . 2 white..... O ats .46 N o . 2 white..... ... “ .51J4 Flour 6.75 Soft patent...... per bbl. 7.50 6.80 8.00 Spring patent. ... “ Middling cotton... .per lb. .n y 2 .12J4 10.00 H osts on hoof....... /oer cw t.12.20 Close D ec. 15, 1925 D ec. 15, 1926 $ 1 .3 8 @ $1.38 1.39*6 1.39 .83*6 .74 .75 $ 1 .8 0 @ 1 .7 1 @ $1.7154 1.69*6 1.83 1.7254 .7 6 ® .7 7 ® .7654 .83*6 .77 .78 .43 6.75 @ 7.00 @ 7.25 7.25 .1154 1 0 .5 0 @ 1 1 .7 5 8 .5 5 @ 9.00 8.55 .1954 9 .2 5 @ 1 1 .3 5 F IN A N C IA L Seasonal routine factors controlled financial and banking activities in this district during the past thirty days, and nothing developed to change trends noted a month earlier. Credit demands for general industrial and commercial purposes were somewhat irregular, and averaged only fair. There was con siderable liquidation among major mercantile and manufacturing interests in the large cities, but also good volume of borrow ing from the same sources, with the result that the level of this class of loans showed little variation as contrasted with the pre ceding thirty days. Country banks in the Northern section of the district report further liquidation, and in turn these institutions have reduced com m it ments with their city correspondents and the Fede ral Reserve Bank. In the South settlements were relatively less satisfactory, due principally to the record cotton crop and depressed prices of that staple. Markets have opened in the tobacco areas, and sales of the new crop have been fairly heavy, with proceeds being extensively used to liquidate loans. Similar conditions obtain in the rice pro ducing sections. Liquidation in the tobacco dis tricts has been accelerated by sales of large amounts of the 1923, 1924 and 1925 crops. Grain interests slightly increased their commitments during late November, the peak o f their borrow ing having been reached early this month. Flour millers, on the other hand, have reduced their obligations, and in lesser degree the same is true of packers and manufacturers of some other food products. Com mercial paper brokers still complain of dull busi ness. Offerings are plentiful, but competition of local banks and the New Y ork call market make sales difficult to effect. Loans and discounts of the reporting member banks have declined irregu larly since the middle of October, and over the same period there was a steady decrease in their borrow ings from this bank. Since the middle of N ovem ber, deposits of the reporting member banks moved upward. Interest rates during the period under review were steady, current quotations at St. Louis banks being as fo llo w s : Commercial paper, Al/2 to 5 per cent; custom er’s over the counter loans, 5 to $y2 per cent; collateral loans 5 to 5^4 per cent and brokers’ loans 5 to 5y2 per cent. Federal Reserve Operations — During N ovem ber the Federal Reserve Bank of St. Louis dis counted for 229 of its member banks, against 232 in October, and 201 in November, 1925. The dis count rate of this bank remained unchanged at 4 per cent. bilities of preceding following Changes in the principal assets and lia this institution as compared with the month and a year ago are shown in the table: *D ec. 16, 1926 *N o v . 16, *D ec. 16, 1925 1926 $36,215’ $22,584 32,408 9,981 17,791 19,645 405 Bills discounted.......................................................... $41,029 Bills bought.................................................... U . S. Securities........................................... Foreign loans on gold............................. Total bills and securities.............. F . R. N otes in circulation...................... Total deposits................................................ Ratio and reserves to deposit and F . R . N ote liabilities............ ............ 4 5 .7 % *In thousands (000 om itted). $65,841 46,396 82,927 $73,188 39,140 83,479 5 4 .4 % 4 6 .0 % Debits to Individual Accounts — The follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, cer tificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Govern ment in leading cities of the district. Charges to accounts of banks are not included. *N o v . 1926 E . St. Louis and Nat. Stock Yards, 111....$ 45,355 Eldorado, A r k .......................... 10.383 39,695 Evansville, In d....................... Fort Smith, A r k ..................... 15,576 Greenville, M iss..................... 5,195 Helena, A rk .............................. 4,764 Little Rock, A rk .......... .......... 89,450 Louisville, K y ......................... 187,432 Memphis, Tenn...................... 163,009 Owensboro, K y ....................... 4,478 Pine Bluff, A rk ....................... 14,797 Quincy, 111................................. 12,300 St. Louis, M o ......................... 750,257 4,645 Sedalia, M o ............................... Springfield, M o ....................... 14,725 Totals.................................$1,362,061 *N ov. 1925 * Eleven months 1926 1925 $ 43,648 10,727 36,745 18,087 5,532 7,598 86,721 178,647 180,337 4,532 13,922 11,352 741,060 3,832 13,773 $1,356,513 $536,917 132,400 445,393 149,082 50,454 53,702 894,910 2,160,487 1,659,359 58,903 $487,967 113,082 430,854 153,990 49,522 60,311 784,822 2,055,155 1,634,161 62,721 139,140 8,273,843 52,415 176,105 133,209 8,093,753 49,758 154,798 $14,783,110 $14,264,103 Condition of Banks — Loans and discounts of the reporting member banks on December 15 showed a gain of 0.4 per cent as compared with a month earlier but were 0.8 per cent below the total on December 16, 1925. Deposits showed a gain of 2.2 per cent from N ovem ber 17 to December 15, but were 1.6 per cent smaller than on December 16, 1926. Composite statement follow s: *D ec. 15, * N o v . 17, 1926 1926 N um ber of banks reporting.................................. . |31 Loans and discounts (incl. rediscounts) Secured by U . S. G ov’ t, obligations.........$ 6,441 Secured by other stocks and bonds........... 195,663 A ll other loans and discounts.......................... 315,762 *D ec. 16, 1925 1*31 33 $ 6,791 194,842 313,980 $ 10,620 207,431 303,953 Total loans and discounts......................................$517,866 Investments U . S. Gov’ t, securities........................................ 61,889 Other securities........................................................ 120,006 $515,613 $522,004 62,170 117,874 59,876 109,981 Total investments........................................................ $181,895 Reserve balance with F. R . bank....................... 48,823 Cash in vault................................................................ 9,215 Deposits N et demand deposits............................................. 417,153 Tim e deposits............................................................ 211,434 Government deposits............................................. 3,884 $180,044 48,510 7,750 $169,857 49,621 8,965 399,221 218,019 1,480 431,663 203,877 7,301 Total deposits............................................................... $632,471 $618,720 $642,841 Bills payable and rediscounts with Federal Reserve Bank, Secured by U . S. Gov’ t, obligations...... 9,416 9,932 4,168 A ll others.................................................... ............ 14,419 14,852 7,593 *In thousands (000 om itted). fDecreases due to consolidation. These 31 banks are located in St. Louis, Louisville, Memphis, Little Rock and Evansville, and their total re sources comprise approximately 53.5 per cent of the resources of all member banks in the district. (Compiled December 23, 1926) B U SIN E SS C O N D IT IO N S IN T H E U N IT E D S T A T E S P R O D U C T IO N — Factory employment and payrolls declined in November, reflecting decreased activity in many important industries, but owing to the large output of min erals the Federal Reserve Board’s index of production in basic industries advanced somewhat during the month. Production of bituminous coal and petroleum in recent weeks has exceeded all previous records, and output of ever, increased slightly more than is usual in November. Freight car loadings declined considerably in November and December from the record high levels of October, al though the movement of coal continued heavy. P RICES — The general level of wholesale prices de clined in November and prices of many important basic commodities decreased further in the first half of Decem- Federal Reserve Board’ s indexes of factory employment and payrolls Latest figures, N ovem ber, em p loy m e n t=9 5.2 p a yrolls= 107.7. Index of U . S. Bureau of Labor Statistics. Latest figure, N o v e m b e r s 148.1. copper and zinc during November was in unusually large volumes. Pig iron production also increased slightly in November, but steel mill operations in that month and in December were considerably reduced. Automobile pro duction, which is not included in the index of production in basic industries, declined sharply in November for the sec ond consecutive month and was smaller than in any month since August, 1925. Textile mill activity was main tained at approximately the same rate as in October. The value of building contracts awarded showed less than the usual seasonal decline in November and was slightly larger than in November, 1925. Awards for the first half of December exceeded those of the corresponding period of last year. A G R IC U L T U R E — The Department of Agriculture estimates the value of 55 principal crops raised in 1926, on the basis of December 1 farm prices, at $7,802,000,000, com pared with $8,950,000,000 in 1925. O f the decrease the de cline in the value of the cotton crop accounts for $580,000,000, and that of corn for about $260,000,000. T R A D E — In November distribution of merchandise at wholesale and retail showed the usual decline from the activity earlier in the autumn. Compared with a year ago, ber. The Bureau of Labor Statistics index of wholesale commodity prices for November was 148, the lowest since July, 1924. Bituminous coal prices increased sharply dur ing October and early November, but in recent weeks have declined by about two-thirds of the previous rise. Petro leum prices have been reduced since early in November, and there have also been declines in pig iron, copper, zinc, lead and silver. The fall in prices of agricultural commo dities, which has lasted with few interruptions for over a year, continued in November. Grains, however, have risen somewhat since the later part of that month. The cloth ing materials and house furnishings groups have declined steadily in price during recent months to the lowest levels of the post war period. B A N K C R E D IT — Loans and investments of mem ber banks in leading cities increased by over $100,000,000 during the four weeks ending December 15, reflecting in part the growth in the demand for credit and currency that usually occurs in December. The increase was in loans on securities, while commercial loans declined some what from their seasonal high point in November. The volume of Reserve bank credits held the usual seasonal increase after the middle of November, but was lower than in the corresponding period of 1925 partly because there Index of building contracts awarded as reported by F. W . Dodge Corp. Latest figure, N ovem ber = 1 8 8 . M onthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages of first 21 days in December. however, wholesale trade was in about the same volume and retail trade larger. Sales of department stores were about 7 per cent larger than last year, and those of lead ing mail order houses were 6 per cent larger. Stocks of merchandise carried by wholesale firms declined further in November and were smaller at the end of the month than a year ago. Inventories of department stores, how- was a smaller increase this year in the amount of money in circulation. Money market conditions became slightly firmer in December than at the end of November, commer cial paper rates were unchanged, but open market rates on bankers’ acceptances advanced by one-eighth of one per cent and call rates on security loans averaged higher for the month.
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