The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Morning Papers of December 31, 1941 F E D E R A L R E S E R V E B A N K OF ST. L O U I S B A N K S AND WAR B y C h e s t e r C. D a v i s President, Federal Reserve Bank of St. Louis The year 1942 opens with our country at war. Already the months before December 7 seem a long way off. W e have only one concern now: W hat is our part, and how can we best perform it ? Bankers, therefore, at New Y ear’s time are con sidering how their insti tutions can best contrib ute to the successful prosecution of the war. The speed and scope of modern war are so trem endous that it is im possible to foresee what this struggle will even tually mean to us, either as individuals or as bankers. Nevertheless, it is well to take stock of our strength and deficiencies at the beginning of the new year in order that we may attem pt to chart a course for the difficult days that lie ahead. Fortunately, the banks of the country are in a better position to meet an emergency than they have ever before been. Banking resources are at an all-time high. This fact is striking evidence that the public’s confidence in banks, which was at a low ebb in the early 1930’s, has been fully restored. The various measures adopted in recent years for strengthening the banking structure, including the formation of a Federal deposit insurance system, should help preserve this public tru st and confi dence. The assets of banks generally are sounder than at any time in our history. Most im portant of all, there has been a grow ing realization, both on the part of the banks and of the general public, of the fact that in a modern economy the bulk of money settlem ents is made through the use of the checking facilities provided by commercial banks and, consequently, that the conduct of banks and banking is affected with the public interest. As a result, the Government can call upon the banks to assist in the financing of the war effort with the knowledge th at the banks will accept and carry out their responsibility intelligently and efficiently. A nother im portant factor contributing to the underlying strong position of the banking system is the Federal Reserve System. A t the beginning of the last war the Federal Reserve System had just been organized. It had to meet the numerous problems of the war on the basis of a very limited Page 2 background, both of theory and practice. Today, the Federal Reserve System has been in existence for more than twenty-five years and has built up a rich background of experience in central banking practice under a wide variety of conditions. The Board of Governors of the Federal Reserve System announced on December 8, imm ediately after the outbreak of war, th at the System is prepared to use its powers to assure th at an ample supply of funds is available at all times for financing the w ar effort and is prepared to exert its influence tow ard m ain taining satisfactory conditions in the Government security market. T he m anner in which the Government security m arket withstood the shock of the sudden outbreak of war dem onstrates the fundam entally strong position of the financial and banking mechanism of the country. Now that the initial shock of w ar is past, there are num erous ways in which banks may contribute in the transform ation necessary for a sustained war program. First, the banking system can be depended upon to continue to handle with speed and efficiency the increased volume of transactions which will be in volved in an all-out victory drive. Second, the assistance of the banks will be vital to the Government in the financing of war. This financing program is directed tow ard obtaining as much of the necessary funds through taxation as is feasible and to borrow the rem ainder as largely as possible from savings rather than through expan sion of bank credit. To the successful achievement of the latter objective, the T reasury’s savings bond program m ust be greatly intensified. Bankers have accepted a real responsibility in this field; they have become issuing agents for these bonds, and are encouraging their sale among bank customers. The success of the savings bond program will depend to an im portant extent upon the efforts of the banks. Third, the banking resources of the country m ust be available for the financing of w ar production. Those companies whose plants and organizations are capable of turning out essential w ar m aterials should not be prevented from doing so through in ability to obtain the necessary financing. Bankers also can assist m anufacturers among their custom ers to convert their plants, w herever possible, into de fense production. All available plant facilities and labor m ust be used if our arm am ent program is to go forward with maximum speed. Fourth, some continued Governm ent borrow ing from banks will be necessary notw ithstanding th at the Governm ent’s financial requirem ents will be met to the largest extent possible w ithout credit expan sion. The supply of bank reserves, together with the Federal Reserve powers to add to reserves, should this be necessary, are fully adequate to meet all present and prospective needs, both of the Gov ernm ent and of private activity. Fifth, for the m ost successful prosecution of the war, it is desirable th at borrow ing for non-defense purposes should be discouraged, particularly if it would add to the purchasing power th at will be generated by the huge expenditures of the greatly increased and speeded-up arm am ent program . The rise in purchasing power, plus the necessary curtail m ent of m any types of consum ers’ goods, could lead to run-aw ay price inflation which would not only greatly increase the cost of the arm am ent program but would work hardships and underm ine morale of m any groups of our population. Exercise of careful D bank lending judgm ent is only one aspect of a wellrounded and coordinated program to keep inflation ary forces from getting out of hand. Regardless of the m easures eventually adopted by the Govern ment, a successful attack on inflation also calls for self-discipline on the part of the general public in the expenditure of its income. Bankers can aid by encouraging their custom ers to use their larger in comes to retire indebtedness, to purchase defense savings bonds, or to build up deposits which can be channelled into financing the war. Bankers, be cause they are frequently consulted for financial advice, are peculiarly well situated for this job. The program outlined above only focuses atten tion on some of the most direct ways in which banks can contribute to the w ar effort. C arrying out the program involves much additional work and ex pense to the banks of the country. In this respect it involves sacrifices which all of us m ust make to a greater or lesser degree if victory is to be won. SUM M ARY O F E IG H T H D IS T R IC T goods to a level about 25 per cent above a year ago. A ccording to prelim inary reports, November shoe production in the E ighth D istrict is estim ated at 26 per cent below October. Sales of ordinary life in surance in E ighth D istrict states in November were 10 per cent less than in October and 14 per cent above November, 1940. Revenue freight carloadings of railroads operating in the E ighth D istrict during the four weeks ending November 29 were 6 per cent less and 15 per cent greater, respectively, than in the sim ilar periods a m onth and a year ago. Estim ated tonnage moved by the Federal Barge Lines on the Mississippi River between St. Louis and New Orleans in Novem ber was 6 per cent below October but 67 per cent above November, 1940. Cum ulative tonnage for the first eleven m onths of this year exceeded th at of the comparable period last year by 16 per cent. Debits to individual accounts in November were 13 per cent less than October and 24 per cent greater than in November, 1940. Gross deposits reached a new peak as loans and investm ents rose. Em ploym ent continued to gain in E ighth D istrict states during October and was considerably above a year ago. Cost of living in the E ighth D istrict as m easured by the November index for St. Louis con tinued to rise, but the rate of increase was smaller than th at of the preceding month. Since the last issue of this Review, the F irst State Bank of Dongola, Dongola, Illinois, became a mem ber of the Federal Reserve System. U R IN G Novem ber and early December E ighth D istrict industry and trade were m aintained at about the high levels of recent m onths. However, due to a shorter m onth in No vember, the physical volume of goods produced and distributed declined generally from October totals. New highs may be expected in the future w ith ad ditional plants coming into operation as our econ omy moves into all-out war production. T he impact of w ar on industry, agriculture, and trade in the E ighth D istrict is alm ost certain to bring about a reallocation of effort more striking than th at called forth by the defense program to date. Em ploym ent in the construction industry may be stepped up instead of tapering ofif, as additional new plants or expansions are needed for the war effort. Em ploym ent in w ar industries, such as air craft, ordnance, steel, etc., will increase in coming months. On the other hand, industries producing non-essential goods will probably be forced to curtail operations sharply. An example of this is already seen in the further cuts in autom obile pro duction announced by the Office of Production M anagem ent. In the U nited States during Novem ber the rate of industrial production continued to increase. The index of the Board of Governors of the Federal Reserve System, adjusted for seasonal variation, rose to 167 per cent of the 1935-1939 average, as compared with 163 in October and 161 in September. These increases have raised the total output of Page 3 D E T A I L E D S U R V E Y OF D IS TR IC T IR O N A N D ST E E L Production of iron and steel in this area was at a som ew hat lower level during late Novem ber and early December. Curtailm ent was due prim arily to taking furnaces out for repairs. As of m id-Decem ber the rate of operations in this area was at 88.7 per cent of capacity. Scrap continues very tight. T here is some varia tion in volume of mill stocks but the longest inven tory in this area seems to be about one m onth’s supply, while m ost mills are considerably shorter than this. Colder w eather is m aking collection of scrap more difficult. Allocation of m aterial has aided some mills to keep up operations at high levels. Unless actual scrap supplies can be increased, how ever, allocation, while providing some relief, is not likely to keep production at near capacity, and the industry anticipates some curtailm ent of operations due to scrap deficiencies in 1942. Dem and for all steel products rem ains strong, and w ith intensified w ar effort, is expected to grow. If production is not increased, or even declines some w hat as expected by the steel industry, and w ar demand for steel increases, it is evident th at civilian consumption will suffer even more than has been anticipated. F or the entire country production of pig iron in November, according to the m agazine “Steel,” was 4,707,194 tons, com paring w ith 4,860,033 tons in O ctober and 4,397,656 tons in November, 1940. T he decrease from October was due entirely to a shorter work-m onth, as average daily output in November was the second highest of record. Tonnage of pig iron produced in the first eleven m onths of 1941 was 50,903,091 tons compared w ith 46,894,676 tons pro duced in the whole of 1940. Steel ingot production in Novem ber was 6,929,987 tons as compared w ith 7,242,683 tons in October and 6,469,107 tons a year ago. T he rate of opera tions for the U nited States was 98.3 per cent, which represented a decline of 0.7 per cent from October but a gain of 1.7 per cent over November, 1940. P ro duction of steel ingots for the first eleven m onths of 1941 am ounted to 75,763,558 tons, com paring with 66,981,662 tons produced in the entire year 1940. W H IS K E Y Of the 58 distilleries in K entucky, 46 were in operation on Novem ber 30, as compared w ith 42 on October 31. Due to anticipated increased consum p tion and possible future restriction of production, schedules call for continued operation at near-capacity levels. No definite sales trend of whiskey has Page 4 been indicated rec e n tly ; prim arily because stocks of individuals and retailers were augm ented consider ably prior to Septem ber 1, the effective date of the increased whiskey tax. H ow ever, sale of revenue stam ps in K entucky during November, 1941 shows some increase in consum ption as compared w ith the same m onth in the past three years. A G R IC U L T U R E Farming Conditions—Final estim ates of the prin cipal crops in the E ighth D istrict given by the U. S. D epartm ent of A griculture in its report based on December 1 conditions, show no m arked changes from forecasts made a m onth previous. Novem ber w eather was generally favorable for harvesting late crops. Farm employm ent in the U nited States declined less than usual during Novem ber and the total num ber of persons employed in agriculture on December 1 was 9,349,000, according to the U. S. D epartm ent of A griculture. This compares w ith 10,420,000 esti m ated for Novem ber 1 and 9,320,000 a year ago. T he num ber of hired farm w orkers on December 1 was the largest for this date since 1935 and showed a much less than usual decline from Novem ber 1 totals. A factor accounting for this m ay be a tend ency to retain hired help through the slack season to be sure of having them next spring. Also evident on December 1 was a shift of family w orkers from an unpaid to a paid status. Cash income from farm m arketings and Govern m ent paym ents for E ighth D istrict states in O cto ber was 35 per cent above Septem ber and 53 per cent above October, 1940. All groups of farm pro ducts shared in the increase, w ith returns from wheat, soybeans, and truck crops recording the greatest percentage gains. M ost of the increase from a year ago is accounted for by higher agricul tural prices. Corn — E ighth D istrict corn production for all purposes in 1941 is estim ated at 348,402,000 bushels against 1940 production of 328,495,000 bushels and the 18-year (1923-1940) average of 330,578,000 bushels. A lthough considerably behind schedule, especially in parts of M issouri and Illinois, as of mid-December, husking and cribbing of corn was m aking progress. A considerable am ount of corn still rem ained in the fields of the northern sections of the Corn Belt. Q uality of new corn m arketed showed im provem ent, which was unexpected on the basis of previous reports. Cotton—An E ighth D istrict cotton crop of 3,539,000 bales is forecast by the U. S. D epartm ent of A griculture as of December 1. This is a decrease of about 1 per cent from the Novem ber 1 forecast, and compares w ith production of 3,277,000 bales in 1940 and the 18-year (1923-1940) average of 2,972,000 bales. Indicated yields-per-acre are recordbreaking in M issouri, Tennessee and Mississippi, and only slightly below the peak of 1940 in A rkan sas. T he crop is fully two weeks early this year. By December 1 about 95 per cent had been ginned. Only rem nants rem ained in the fields. T he tendency to hold cotton rather than place it under Government loan continues, particularly in the case of larger producers. It is believed th at most of this will not be sold until after January. Much of this cotton is eligible for the loan so th at owners are in a fairly independent position.. As indicating both a holding m ovem ent and higher prices in re lation to loan values, the Commodity Credit Cor poration through December 13 had made loans on 1,494,878 bales as compared w ith loans on about 2,500,000 bales at the same tim e last year. T he per centage of the crop placed under loan has been less for the cotton producing areas of the E ighth Dis trict than for the country as a whole. The supply of good grades of cotton in the Central Belt is below normal, due principally to insect dam age, particularly from leaf worms. T rading in recent weeks has not been so active due to curtailed offer ings of the better qualities. H igher grades were readily absorbed and fair interest was shown in low grades. Inquiries from domestic mills showed a slight slackening imm ediately after the outbreak of war, but trade reports indicate th at domestic mills m ay come into the m arket more strongly after Janu ary, 1942. Livestock—T here was an increased m ovem ent of stocker and feeder cattle into the Corn Belt states during November, and for the first tim e in the past five m onths such shipm ents were larger than in the corresponding m onth of last year. Shipm ents in spected at stockyards were about 30 per cent larger than last Novem ber and were large relative to the previous m onths of this year, although cumulative shipm ents from stockyards for the past five months were about 17 per cent sm aller than for the same period in 1940. D irect shipm ents in November show little change from a year ago, but for the fivem onth period were down in about the same propor tion as shipm ents from m arkets. Recent sharp advances in prices of fat cattle are expected to improve demand for stocker and feeder cattle and thus bring about a rather heavy move m ent of shortfeds back to Corn Belt feedlots during December and the early m onths of 1942. This would tend to reduce the slaughter supply of fed cattle during the w inter m onths and to increase it during the spring and summer. Even w ith this expected movement the total of cattle fed in 1942 is likely to be below the record num ber of 1941, although large in comparison with m ost years in the past ten-year period. The num ber of lambs fed in the U nited States during the 1941-1942 feeding season will be larger than the record num ber fed in the 1940-1941 season. Shipments into Corn Belt states inspected at stock yards during November were about 25 per cent greater than a year ago, and direct shipm ents also showed an increase from last year. Tobacco — Production of all types of tobacco in the Eighth D istrict is estim ated by the U. S. D epart m ent of A griculture in the December 1 report at 249,835,000 pounds, which compares w ith 277,830,000 pounds harvested in 1940, and the 18-year (19231940) average of 285,064,000 pounds. D uring the latter p art of November, deliveries of the burley crop to m arket were unusually heavy. Large quantities were reported at warehouses on opening dates. Generally, burley is thinner than a year ago, w ith a consequent larger percentage of grades suitable for cigarette and smoking types. Sales in the first tw o weeks at K entucky m arkets totaled 94,366,641 pounds. Opening week prices in K entucky averaged $27.89 per cwt., more than $10 per cwt. above opening week last year, and have advanced substantially since then. Green River and stem m ing district tobacco auc tions opened at Owensboro on November 27. The 1941 crop of this type of tobacco is reported as one of the best quality crops in years. Volume of sales to mid-December was light due to lack of suitable weather for stripping. A verage price for the first two weeks of the season was $11.60 per cwt., com pared with last season’s average of $7.64. Auction m arkets for one-sucker tobacco opened November 25 w ith the crop moving slowly to m ar ket due to unfavorable w eather. Offerings indicate a very good quality crop, much superior to last year. Average price for the first two weeks of auctions was $11.25 per cwt., compared w ith last season’s average of $8.04 per cwt. Dark-fired auctions open early in January, 1942. W arm , damp w eather in November was quite help ful to grow ers in fire-curing the crop and this work is largely completed. Reports indicate presence of houseburn in some cuttings, but the seriousness of this cannot yet be determined. It is believed, how ever, that color and quality will be better than earlier expected. Page 5 COST OF L IV IN G A N D PRICES For the larger cities in the United States, the cost of living rose 0.7 per cent between October 15 and November 15 and 9.5 per cent since the outbreak of w ar in 1939. The rate of increase during the past month was sm aller than that of the preceding month. Living costs in St. Louis advanced 0.9 per cent and 9.4 per cent, respectively, in the same periods. Food and clothing have paced the rise this past month. Between October 14 and November 18, food costs in the U nited States rose 1.3 per cent. All Eighth D istrict cities showed increases from a month earlier with L ittle Rock reporting the greatest gain, 2.8 per cent, and Memphis reporting the least, 0.9 per cent. Compared with a year ago, food costs in Little Rock were up 22.4 per cent, for the largest increase, and those in Louisville were up 21.0 per cent for the smallest. W holesale prices of commodities were virtually unchanged during the first three weeks of the past month, but coincident w ith the Japanese attack moved up in the week ending December 13 when the index for all commodities stood 0.9 per cent above a m onth ago and 16.8 per cent more than a year ago. EM PLOYM ENT Total civil non-agricultural employment in the U nited States in October amounted to 40,749,000, according to the U. S. D epartm ent of Labor. In each m onth since February of this year, non-agri cultural em ploym ent has reached a new peak. The October estim ate represents a gain of 34,000 workers since Septem ber and 3,374,000 since October, 1940. M anufacturing employm ent declined by 0.1 per cent with increases in durable goods industries, particu larly shipbuilding and aircraft, being slightly more than offset by sharp seasonal declines in canning and preserving industries. Construction employ m ent increased in October, due largely to increased building activity at defense plants financed by the Government. N on-agricultural employment in Eighth D istrict states in October was 5,748,000 com pared w ith 5,745,000 in Septem ber and 5,115,000 a year ago. In the past m onth, of all Eighth District states M issouri showed the greatest gain, 3.0 per cent, while Indiana showed the greatest loss, 2.9 per cent, due largely to declines in canning employ ment. Illinois, Tennessee, and Arkansas showed small positive changes while K entucky and Missis sippi showed slightly larger negative changes. In the past year M issouri has shown the greatest gain, 16.0 per cent while A rkansas has shown the small est increase, 8.0 per cent. Page 6 FA R M IN C O M E IN C L U D IN G G O V E R N M E N T B E N E F IT PA Y M E N T S Cumulative for 10 months October (In thousands 1939 1941 1940 1940 1941 of dollars) $114,982 $45,638 $184,095 $121,238 $68,075 464,150 426,811 51,971 569,150 81,610 227,133 27,642 30.8,700 248,168 39,405 113,424 9,997 138,205 12,438 119,095 124,357 34,440 109,808 58,146 166,830 M ississippi. . . 222,607 37,397 319,193 . . 53,240 242,319 103,150 20,064 ___ 34,0,62 144,886 104,816 Tennessee 1,831,059 1,409,594 1,332,464 227,149 . . . . 346,976 R E C E IP T S A N D S H IP M E N T S A T Receipts N ov., O ct., 1941 1941 118,950 154,277 C attle and C a lv e s ... ,224,570 228,449 2,171 H orses and M ules . . . . 2,292 . . 52,144 87,634 N A T IO N A L ST O C K Y A R D S Shipments N ov., N ov., N ov., O ct., 1940 1941 1940 1941 112,665 45,721 67,311 44,729 330,211 42,146 53,424 70,939 1,346 1,422 2,252 1,506 50,662 6,039 19,158 8,20.6 397,956 472,531 494,960 96,158 141,399 125,220. W H O L E S A L E P R IC E S IN T H E U N IT E D ST A T E S B ureau of L a b o r Dec. N ov. Dec. Dec. S tatistics Dec. 13/41 comp, w ith (1 9 2 6 = 1 0 0 ) 13,’41 6,’41 15,’41 14/40 N ov. 15/41 D ec. 14/40 92.2 90.8 88.7 93.7 A ll C om m odities. . 93.1 F a rm P ro d u c ts . 92.8 90.4 93.8 79.7 68.8 73.5 84.4 92.3 90.7 89.6 93.6 + +* + + 0.9% 2.3 0.9 0.2 + + + + 16.8% 34.9 23.0, 11.1 COST O F L IV IN G B u re au of L a b o r S ta tistic s (1 9 3 5 -3 9 = 1 0 0 ) N ov. 15, 1941 U n ite d S ta te s ......... St. L o u is .................. B u re au of L ab o r S ta tistic s (193 5 -3 9 = 1 0 0 ) O ct. 15, 1941 Sept. 15, 1939 110.2 109.8 109.4 100.6 100.4 N ov. 18, 1941 U . S. (51 cities) . . . St. L o u is .............. L ittle R o c k ......... L o u is v ille ............ M em p h is.............. 10, .8 8 C O ST O F F O O D O ct. 14, N ov. 12, 1941 1940 113.1 117.0 114.4 114.1 112.3 95.9 96.3 93.5 94.3 92.0 111.6 114.6 111.3 111.6 111.3 N ov. 15,’41 com p, w ith O ct. 15,’41 Sept. 15,’39 + 0.7% + 0.9 + + 9.5? 9.4 N ov. 18/41 comp, w ith O ct. 14,’41 N ov. 12,’40 + 1.3 + 2.1 + 2.8 2.2 + 0.9 + + 1 7 .9 % + 2 1 .5 + 2 2 .4 21.0 + 2 2 .1 + I N 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 I N D U S T R I E S B Y M E T R O P O L IT A N A R E A S B u re au of L a b o r Sept., Sept., A ug., S e p t., ’41 comp, w ith S tatistics 1941 1941 1940 (1 9 3 7 = 1 0 0 ) A u g .,’41 S e p t.,’40 92.0. + 11.5% 92.3* 82.5 — 0.3% 114.4 101.5 2.6 117.4 + 15.7 96.1 106.7 115.2* — 7.4 11.0 + 1.4 120.8 119.1 97.5 + 2 3 .9 ^R evised + + B U I L D I N G P E R M IT S N ew Construction Repairs, etc. N um ber C ost N um ber C ost 1941 1940 1941 1940 1941 1940 1941 1940 (C ost in th o u san d s) 20 20 59 39 130 127 406 380 172 257 N ov. T o ta ls . . . . 787 823 O ct. T o tals . . . . 1,194 1,081 L ittle R o c k . . . $ 72 145 254 1,392 386 2,249 3,749 $ 66 153 363 561 862 2,005 1,851 82 129 25 163 129 528 909 92 66 43 138 135 474 664 $ 21 35 7 132 86 281 877 $ 47 22 19 156 311 555 783 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 ( I n th ousands N o v .,’41 comp, w ith of d ollars) N e v .,’41 O c t.,’41 N o v .,’40 O c t.,’41 N ov.,’40 T o ta l 8 th D is t.. . $23,743 $24,640 S o u rc e : F . W . D odge C orporation. (K .W .H . in thous.) $31,697 25% — 4% C O N S U M P T IO N O F E L E C T R IC IT Y N o. of N ov., O ct., N ov., N ovem ber, 1941 C ustom • 1941 1941 1940 com pared w ith ers* K .W .H . K .W .H . K .W .H , O ct., 1941 N ov., 1940 E vansville . . . . L ittle R ock . . . 40 4,127 35 2,637 82 13,60.5 . 31 4,522 P in e B luff . . . . 20 1,487 . 125 53,779 333 80,157 * Selected ind u strial custom ers. 4,845 2,898 15,177 4,792 1,477 59,648 88,837 4,600 2,365 11,157 3,371 864 48,099 70,456 — 15% — 9 — 10 — 6 + 1 — 10 — 10 + b b + 10% 12 22 34 72 12 14 P R O D U C T IO N O F B IT U M IN O U S C O A L ( I n thousands N o v ./4 1 comp, w ith of tons) N ov., 41 O c t.,’41 N o v .,’40 O c t.,’41 N o v .,’40 U n ited S ta te s ,___ 42,865 4,366 49,800 4,446 40,012 4,234 — 14% — 2 + + 7% 2 L O A D S IN T E R C H A N G E D F O R 25 R A IL R O A D S A T ST. L O U IS First nine days N o v .,’41 O ct.,’41 N o v .,’40 D ec.,’41 D ec.,’40 11 m os.’41 11 m os.’40 1,158,681 902,706 111,100 118,188 86,601 32,261 26,627 Source: Terminal Railroad A ssociation of St. Louis. W H O L E S A L IN G Lines of Commodities N et Sales Data furnished by Bureau of Census, T T e -r. 4 t n . U . S. D ept, of Commerce. Stocks November, 1941 compared with O ct.,’41 N o v ..’40 N ov. 30, 1941 comp, with N ov. 30, 1940, Autom otive Su pplies................................ — 2% +91% D rugs and C hem icals.............................. — 17 +22 Dry G oods"................................................. — 24 + 13 +53 Electrical Su pplies.................................... — 6 F u rn itu re....................................................... — 30 + 12 G roceries...................................................... — 8 +17 + 25 Hardw are...................................................... — 23 Machinery, Equipment and Supplies. — 26 +10 Tobacco and its P rodu cts.................... —■ 1 +22 M iscella n eo u s........... ................................. — 36 — 8 T otal all lin e s ................................................— 28 + 1 7 ....% .... +30 +43 +35 +40 +26 +36 +21 +32 +31 D E P A R T M E N T ST O R E S November, 1941 compared with O ct.,’41 N o v .,’40 Stock T urnover Stocks on Hand N et Sales 11 m os.’41 N ov. 30,’41 to same comp, with period ’40. N ov. 3 0 /4 0 Jan. 1, to N ov. 30, 1941 1940 + 4% + 1 5 % + 17% Ft. Smith, A r k ... + 33% 16 +26 + 32 L ittle Rock, Ark. + 10 21 +30 Pine Bluff, A rk .. + 20 + 5 E. St. Louis, 111. — 18 + 13 +23 4 - 023 3.64 3.62 Quincy, 111............... + 14 — 5 + 14 Evansville, I n d .. . 8 Louisville, K y .. . . + 35 4.45 4.04 31 + 6 + 21 St. Louis, M o .. . . — 5 33 3.86 4.00 + 14 +17 2 +1 Springfield, M o .. . —1 42 + 34 2.68 3.21 2 Jackson, Tenn. . . — 21 + 57 +47 Memphis, T en n .. . V.ii 3* 12 30 +21 + 1 + 19 *A11 other citie s. . — 6 + 10' 2.83 2.79 + 18 * 32 8th F. R. District — 2 3.73 3.75 + 15 21 + 32 *E1 Dorado, Fayetteville, A rk.; Alton, Harrisburg, M t. Vernon, 111.; Vincennes, I n d .; D anville, Hopkinsville, K y .; Chillicothe, Mo. Trading days: N ov., 1941— 24; Oct., 1941— 27; N ov., 1940— 25. O utstanding orders of reporting stores at the end of November, 1941, were 62 per cent greater than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding November 1, 1941, collected during November, by cities: Installm ent E xcl. Instal. Installm ent Excl. Instal. A ccounts A ccounts Accounts A ccounts + Fort S m ith .. L ittle R o c k .. L ouisville . . . Memphis . . . . ..% 14 17 27 44% 39 48 48 Q uincy............ St. L o u is. . . . Other cities. . 8th F. R. D ist. 20% 29 16 20 52% 51 47 53 IN D E X E S O F D E P A R T M E N T ST O R E SA L E S A N D STO C K S 8th Federal Reserve D istrict (1923-1925 average = 100): N ov., Oct., Sept., N ov., 1941 1941 1940. 1941 Sales (daily average), U nadjusted......... 13 3 119 128 112 Sales (daily average), Seasonally adjus 114 10.5 120 96 Stocks, U nadjusted....................................... 108 105 97 79 Stocks, Seasonally adjusted....................... 92 71 96 94 Trading days: N ov., 1941— 24; O ct., 1941— 27; N ov., 1940— 25. SP E C IA L T Y ST O R E S Stocks N et Sales on Hand November, 1941 11 m os.’41 N ov. 30/41 compared with to same comp, with O ct./41 N o v .,’40 period ’40. N ov. 3 0 /4 0 Stock Turnover Jan. 1, to N ov. 30, 1941 1940 + 12% + 2 5 % +28% + 40.% 2.66 2.35 M en’s Furnishings — 9 +19 +21 + 43 7.50 6.87 B oots and S h o e s .. Percentage of accounts and notes receivable outstanding November 1, 1941, collected during N ovem ber: M en’s F u rn ish ings.......................38% B oots and S h o es............................ 39% C H A N G E S I N P R IN C IP A L A S S E T S A N D L I A B I L I T I E 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 Change from Dec. 17, N ov. 19, Dec. 18, (I n thousands of dollars) 1940 1941 1941 Industrial advances under Sec. 13b........... > 5o.o 55 Other advances and rediscounts.................. 112,818 U . S. securities.................................................... Total earning a s s e t s ..................................... 113,373 495 438 T otal reserv es....................................................... 631,204 Total d e p o sits....................................................... 428,605 F. R. N otes in circulation.............................. 314,425 -021 + + 1,704 + 1,725 __ 16 .—.12,952 + 17,346 + 126,154 + 50,489 + 94,835 In d u s tria l com m itm ents un d er Sec. 1 3 b .. — + 1,202 47 774 F E D E R A L R E S E R V E O P E R A T IO N S D U R IN G N O V E M B E R , 1941 (Incl. Louisville, Memphis, L ittle Rock branches) Pieces Amounts Checks (cash items) handled................................ 5,466,196 $1,720,891,303 Collections (non-cash items) h a n d l e d . . . . . . . . 10,1,441 38,999,568 Transfers of funds....................................................... 4,875 456,818,877 Currency received and counted........................... 11,488,264 40,132,754 1,165,529 Coin received and counted....................................... 10,370,055 Rediscounts, advances and com m itm ents......... 20 2,862,000 New issues, redemptions, and exchanges of securities as fiscal agent of U . S. Govt., etc. 52,660 44,504,951 Bills and securities in custody— coupons clipped 10,688 ............................... R A T E S OF T H IS B A N K F O R A C C O M M O D A T IO N S U N D E R T H E F E D E R A L R E S E R V E ACT Advances to banks, secured by direct obligations of _ ) per annum the United States, under paragraph 13 of section 1 3 .. 1 Advances to member banks, secured by direct obliga tions of the United States or by such Government guaranteed obligations as are eligible for collateral, under paragraph 8 of section 1 3 ..............................................1 Rediscounts and other advances to member banks un der sections 13 and 13a.................. ................................. . . . . 1J^ % per annum Advances to member banks under section 1 0 ( b ) ................ 2 % per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the >per annum United States, under paragraph 13 of section 1 3 ........... 4 Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 13b: f 1) 2 % tO (a) On portion for which such institution is obligated \ 2 % per annum (b) On remaining portion — N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. 33/2 % to Advances to established industrial or commercial 5 ^2 % per annum businesses under section 13b................................................ Commitments to member banks, nonmember banks, and other financing institutions, under section 1 3 b . . . . l % per annum P rovided: that on commitments issued for periods of 90 days or less the minimum charge shall be of 1% flat; and further provided, that on commitments for loans secured by assignment of “ Em ergency Plant Facil ities Contract” with the U nited States Government, the rate may be as low as 1% of 1% per annum. . P R IN C IP A L R E SO U R C E A N D L IA B IL IT 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 Change from Dec. 17, Nc “ ~ N ov. 19, D ec. 18, D ec. 17. 1941 (In thousands of dollars) 1941 1940 $292,479 + 5,370 + 73,323 22,099 — 96 + 11,866 45 + 5,169 + 886 272 2,143 10,729 80 + 1,912 60,181 — 2,804 574 — . 510 338 + 11,052 79,361 — 15,865 + 8,340 + 24 5,963 Treasury n o t e s ....................................................... 43,000 + 177 + U . S. bonds.............................................................. 231,205 + 8,506 + 86,976 3,352 2,738 + Obligations guaranteed by U .S . Government 67,303 1,087 Other sec u r ities......................... .................... 113,453 + 1,549 9,978 Balances with domestic banks......................... 200,866 + 2,20,2 + 617,092 9,915 + 81,417 Demand deposits — adjusted *..................... 188,661 — 3,549 2,253 27,810 + 7,258 + 16,289 Interbank deposits..................................... 480,881 + 8,647 + 85,395 300 B orrow ings.................................................... * Other than interbank and Government deposits, less cash items on hand or in process of collection. Above figures are for 24 member banks in St. Louis, Louisville, M em phis, Little Rock and Evansville. Their resources comprise approximately 75% of the resources of all member banks in this district. Open market paper.............................................. Loans to brokers and dealers.................. .. Other loans to purchase and carry securities. Real estate lo a n s ................................................ Loans to banks........................... ........................... D E B IT S TO I N D I V I D U A L A C C O U N T S N ov., Oct., N ov., N ov ./4 1 comp. with N o v ./4 0 1941 1941 1940 Oct.,/41 5,739 __ 22% Ark.$ 7,449 $ 8,435 $ + 30% El Dorado, “ 18,546 20,,266 14,436 — 8 Fort Smith, + 28 “ 2,267 — 40 2,964 4,940 H e le n a ,............. + 31 “ 48,745 — 20 9 53,156 66,839 Little Rock, . . . + “ 12,694 18,149 10,299 — . 30 Pine Bluff, + 23 8,278 —. 1 + 104 Texarkana, Ark.-Tex. 16,858 16,973 43,872 — 14 E. St. L .-N at. S. Y ., 111. 64,987 + 27 55,734 “ 10,056 — 1 11,295 11,408 Q uincy,.............. + 12 41,343 E vansville,......... ’ Ind. 46,074 35,101 — 10. + 18 260,113 183,849 — 1 Louisville, . . . . ..K y . 257,149 + 40 8,026 6,939 —. 5 Owensboro, . . . 7,641 + 10 6,619 — 30 Miss. 9,878 14,143 + 49 — 9 Mo. 759,406 627,970 832,429 + 21 “ 2,407 2,652 2,216 — 9 9 + “ 19,450 21,90.9 16,018 — 11 Springfield, + 21 .Tenn. 254,157 355,807 213,841 — 29 + 25 . . , 1,530,127 1,753,150 1,236,245 — 13 + 24 (In thousands of dollars) C O M M E R C IA L F A I L U R E S IN E IG H T H F. R. D IS T R IC T N o v .,’41 comp, with N o v ./4 1 O ct.,’41 N o v .,’40, O ct.,’41 N o v .,’40 N u m b er ................ 34 L iabilities.............. $426,000 Sou rce: D un and Bradstreet. (Completed December 24, 1941) 29 $252,000 44 $534,000. +17% +69 — 23% — 20 Page 7 N A TIO N A L SUM M ARY O F CO N D ITIO N S INDUSTRIAL PRODUCTION B Y B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average == 100. B y months, January, 1935 to November, 1941. Latest figure 167. WHOLESALE PRICES OF BASIC COMMODITIES Bureau of Labor Statistics’ indexes based on 12 foodstuffs and 16 industrial materials, August, 1939 == 100. Thursday figures, January 3, 1935 to December 11, 1941. MEMBER BANK RESERVES AND RELATED ITEMS BILLIO S O D LLA N F O RS IU MEM BER BANK / v ' RESERVE BALANCES#* V j ry f ^ J M NEY IN O CIRCULATION , ______4 - " " ' TREASURY C S AH AND DEPOSITS NO EM NM BER DEPOSITS 1939 1940 194! 1939 j 1940 1941 W ednesday figures, January 4, 1939 to December 10, 1941. MONEY RATES IN NEW YORK CITY > > TPlhASURY BONDS rV ' V ' v * l i TREASURY NOTES i \ TREASl JRY B ILLS -v/v-\v/ ' S ! r, !i V » j P v - ' _ ■ K ' _A._ A. _ / K /f / W v'^V/ W eekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds callable after 12 years, and average discount on new issues of Treasury bills offered w ithin week. For w eeks ending January 5, 1935 to Decem ber 13, 1941. Page 8 Production — Volume of industrial output was sustained in November at the high rate of the previous two months, although a decline is usual at this season. The Board’s adjusted index advanced from 163 to 167 per cent of the 1935-39 average. In industries engaged in production of armament and munitions activity continued to increase and in most other lines volume of output was maintained or declined less than seasonally. Output of materials, such as steel and nonferrous metals, was maintained at about capacity. In the automobile industry activity increased, reflecting larger output of both military and civilian products, and at lumber mills and furniture factories activity declined less than seasonally. At cotton and rayon textile mills activity rose to new record levels, and at woolen mills the high production rate of other recent months was maintained. Less than seasonal declines in output were indicated for shoes and manufactured food products. Crude petroleum production increased further in November. Bituminous coal production declined somewhat owing to temporary shutdowns at some mines during November, and anthracite production w&s curtailed as a result of unusually warm weather in some areas and the existence of considerable stocks of coal accumulated in earlier months. Iron ore shipments continued in large volume until the shipping season closed early in December; during 1941 about 80 million tons of ore were brought down the Lakes as compared with the previous record of 65 million tons in 1929. Stocks of ore at lower Lake ports on November 30 amounted to about a seven months’ supply at the current consumption rate of around 6.5 million tons a month. Following a declaration of war by this country in early December further steps were taken to curtail output of nondefense goods using critical mate rials. Output quotas for passenger cars and household appliances were greatly reduced and cessation of output of some other products was ordered as of the end of January. Also, the production and sale of new automobile tires and tubes for civilian use were halted temporarily, pending establish ment of a system for controlling their distribution. Value of construction contracts awarded in November declined sharply from the high level of other recent months, according to figures of the F. W. Dodge Corporation. Awards for privately-financed construction decreased more than seasonally and contracts for publicly-financed projects also de clined following a continued large volume of awards since last spring. Total awards in November were about a fifth larger than a year ago, while for the first ten months of the year they were three-fifths larger. Distribution — Volume of retail trade increased in November following some decline in the previous month. Department store sales, as measured by the Board’s seasonally adjusted index, advanced to 115 per cent of the 192325 average as compared with 105 in October and 116 in September. Larger sales in November were also reported by variety stores. Sales of automo biles increased somewhat, according to trade reports, but, as in other recent months, new car sales were smaller than output and dealers’ stocks rose further. In the second week of December sales at department stores rose less than seasonally, particularly in the coastal regions. Freight traffic on the railroads continued in large volume in November and the first half of December. Grain shipments increased considerably and loadings of miscellaneous merchandise, which includes most manufactured products, were maintained at the high level reached several months earlier. Coal loadings declined somewhat, owing in part to temporary shutdowns at some mines. Shipments of most other classes of freight decreased less than is usual at this season. Commodity Prices — Following the entry of the United States into the war, prices of grains, livestock, and foods rose sharply. Prices of most industrial materials traded in the organized markets, being limited by Fed eral regulation, showed little change. Additional measures to prevent ad vances in wholesale prices were soon announced for wool and shellac and for such imported foods as cocoa, coffee, pepper, and fats and oils. Retail food prices, as compared by the Bureau of Labor Statistics’ index, increased 1^ per cent further from the middle of October to the middle of November to a level 18 per cent above a year ago. Indications are that retail prices of both foods and other commodities continued to rise in December. Bank Credit — Total loans and investments at banks in leading cities con tinued to advance during November and the first two weeks of December, owing mostly to increased holdings of Government securities at banks out side New York City. Commercial loans, after showing little net change in November, again increased sharply in the first two weeks of December. Excess reserves increased through most of the period as a result of Treas ury expenditures from Reserve Bank balances, but declined sharply on De cember 15 when these balances were replenished in connection with the issue of 1.6 billion dollars of new Government securities. Money in circulation has continued to show a marked increase.