Full text of Review (Federal Reserve Bank of St. Louis) : December 31, 1941

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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.