The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BUSINESS CONDITIONS A REVIEW OF 1942 Released for Publication in Afternoon Papers of February 1,1943 FEDERAL % v* * K& RESERVE BANK A 4 * : W in ter S cen e, U n iversity of M ississip p i OF ST. LOUIS IN D U ST R Y AND E M P L O Y M E N T T H E Y E A R 1942 witnessed profound and farreaching changes in the industrial portion of the E ighth D istrict economy. As 1943 begins industry in this section is rapidly approaching a complete w ar basis. In the district as a whole com m itm ents totaling close to $1 billion have been made for constructing and equipping new plants to produce amm unition, explosives, guns, planes, ships and m otorized vehicles. M ost of this dollar am ount has gone into am m unition and explosives m anufac turing facilities. Even such relatively industriallyundeveloped areas as northw est Tennessee, w estern K entucky, and A rkansas have received substantial new war m anufacturing facilities. V irtually all of these new plants are now in some stage of pro duction, although construction w ork on m any con tinues. W ith but one or two exceptions, however, none are as yet at peak output so th at their volume of m anufactures is expected to rise throughout the coming year. Less spectacular, but probably more significant to the district economy, has been the conversion of existing plants to w ar production. Civilian goods output in December, 1942 was considerably less than a year earlier, and will slacken further in the m onths to come. Complete curtailm ent of m anu facture of automobiles, refrigerators, w ashing m a chines, etc., freed such facilities for the production of plane accessories, shells, bombs, and com bat vehicles. Inasm uch as this action cut directly into civilian output, its impact has been more severe than the super-im position of new production facili ties upon the economy. Some indication of the general rise in m anufac turing activity in this district during 1942 is shown by the 30 per cent increase in consum ption of in dustrial electricity in m ajor industrial centers. Since this series covers an identical sample of plants each m onth, the gain does not fully reflect the increased activity arising from new w ar production facilities. A glance at four im portant E ighth D istrict in dustries shows in some degree the impact of war upon this area. D uring 1942, production of steel ingots and castings was in greater volume than ever before. T he steel industry operated at or above rated capacity for m ost of the year. Lum ber pro duction at district mills was heavy w ith orders and shipm ents exceeding production in m ost weeks. An im portant lim iting factor on lum ber output has been the difficulty encountered in securing adequate labor as many form er employees have been absorbed by w ar plants. Page 2 W hiskey production was in large volume during the first nine m onths in 1942. T he num ber of K en tucky distilleries operating in this period averaged 12 m ore per m onth than in the comparable period in 1941. Since October 7 no whiskey has been pro duced and distilleries are now m aking industrial alcohol for the w ar program . The shoe industry in this area produced less pairs in 1942 than in 1941. Prelim inary figures indicate th at the decrease was about 2 per cent. Shortage of sole leather, derived prim arily through import, was a m ajor factor contributing to the decline, although difficulties in obtaining labor and replacem ents of m achinery also accounted for part of the slackening. O utput of shoes for the arm ed forces increased sharply in 1942. E ighth D istrict employment during 1942 regis tered pronounced gains. T he latest available figures for states contained in this district cover November, 1942 when total civil non-agricultural employment was 6,324,000 as compared w ith 6,064,000 a year earlier. A steady increase was shown during the first eleven m onths of 1942 and prelim inary reports indicate a further gain in December. Over-all em ploym ent continues to rise even as construction tapers off. Labor demand increases as the new and converted facilities expand their output and as m any male w orkers are drained off from the labor pool by Selective Service. W hile the prospective decline in construction and contraction in non-essential in dustry will supply part of the requirem ents, 1943 should see an increasing num ber of women and youths not norm ally available for work, employed in industry. No E ighth D istrict industrial center is at present faced w ith an acute general labor short age, b u t the district pool grow s appreciably shorter, particularly in the smaller cities whose w orkers have m igrated to war work centers. Prim ary distribution of goods during 1942 was in appreciably greater volume than during 1941. Carloadings of all railroads operating in this district were 6 per cent greater than a year earlier. Load interchanges for 25 connecting lines at St. Louis during 1942 exceeded those of 1941 by 35 per cent. Since cars are now loaded much more heavily and as longer hauls are being made, the carloading figures tend to understate actual volume of goods moved. Ton-m ile figures are not available on a district basis, but nationally in 1942 the railroads hauled freight 630 million ton-miles, or 33 per cent m ore than the 475 million ton-m iles of 1941. Actual carloadings for the nation were up only 1 per cent. R E T A IL AND W H O L E SA L E T R A D E Reflecting the high level of consum ers’ incomes retail trade in the E ighth Federal Reserve D istrict in 1942 as m easured by dollar value of sales showed a considerable gain over the preceding year. The year ended w ith relatively large but declining in ventories in the hands of retailers. D ollar volume of departm ent store sales for the year increased 11 per cent over 1941. Price ceilings established in May stabilized retail prices in m ost lines at M arch levels. T hereafter, m onth to m onth fluctuations in dollar value of sales closely corresponded to changes in the physical volume of sales but increases over the corresponding m onth in the preceding year partly reflected higher retail prices. T he year 1942 opened w ith a less than seasonal decline in departm ent store sales and the adjusted index for January rose to 138 per cent of the 1923-25 average, highest for the m onth in m any years. T he sizable volume of trade early in the year was largely attributed to heavy consum er buying in anticipation of shortages. Follow ing a more than seasonal drop in value of sales for February a sharp gain was recorded in M arch. April was the first m onth in the year in which unit volume of trade fell below th at of the corresponding m onth in 1941. Slightly m ore than seasonal declines in the value of sales were registered during the following three m onths. An even g reater decline in physical volume during th at period reflected m erchandise shortages, tightening of credit term s under Regulation W , and freezing of stocks of certain types of consum er goods. F or the seven m onths of the year through July, dollar value of sales was 13 per cent g reater than in the corresponding period of 1941 but unit volume was about equal in the tw o periods. D epartm ent store sales rose sharply in A ugust and continued to gain seasonally during the next two m onths. D uring the last quarter the physical volume of sales exceeded th at of the corresponding period a year earlier. Sales in October were up 19 per cent for the year. T he trend of purchases was tow ard soft lines as stocks of durables became m ore and more limited. A small contra-seasonal decline in sales in Novem ber partly reflected the earlier Christm as shopping season in order to mail pack ages to the arm ed services abroad. December sales showed a more than seasonal upturn. Cash sales gained relative to credit sales during the year. Collection ratios were higher, especially during the latter half of the year after institution of increased restrictions on instalm ent credit and new regulations governing charge accounts. D ollar value of retail furniture sales in the first four m onths of 1942 increased over the correspond ing period in 1941 but fell below the levels of the preceding year during the subsequent six-m onth period. Small gains as com pared w ith a year earlier, were reported for Novem ber and December. Deple tion of irreplaceable inventories, price ceilings ef fective at M arch levels, and imposition of stricter instalm ent credit term s in M ay largely accounted for the gradual decline in dollar value of sales. U nit volume of retail furniture sales in the first quarter of 1942 averaged som ew hat higher than a year earl ier but ran consistently below the corresponding levels of 1941 during the balance of the year. Due to the instalm ent credit regulations, collection ratios of retail furniture stores rose steadily during the second half of the year. Cum ulative sales of retail shoe stores in this district in 1942 were 29 per cent greater than in the preceding year. This involved draw ing appreciably on stocks which were large but difficult to replenish in the face of declining produc tion of shoes for civilian use. Sales of reporting m en's furnishing stores exceeded 1941 volume by 16 per cent. Inventories of departm ent stores at retail prices as of December 31 were 9 per cent above the lev els of a year ago w ith virtually all of the increase due to higher prices. Stocks rose steadily during the early p art of 1942 to peak levels in May and de clined each m onth thereafter during the rest of the year. R etail furniture inventories were up 1 per cent in the year, while stocks of m en’s furnishing stores and shoe stores rose 25 per cent and 18 per cent respectively. Since retail prices were generally higher, the physical volume of civilian goods inven tories at the end of 1942, was som ew hat below th at of a year earlier. Successive reductions in output of civilian goods to m eet the rising needs of w ar production together w ith a strong consumer de mand, accounted for this m oderate decline. D ollar value of wholesale trade in the E ighth D is trict during 1942 was 15 per cent above th at of 1941, due in large m easure to the higher levels of whole sale prices. Compared w ith the corresponding periods in the preceding year, dollar volume of sales in 1942 was higher during the first seven m onths and slightly lower in the period A ugust through October, w ith small gains reported for the last two months. Inventories of wholesalers and jobbers de clined 25 per cent during the year from the peak volume of January, 1942. Declines occurred in every m onth except July. Page 3 B A N K I N G AND FINANCE Eighth D istrict banking in 1942 followed a p at tern sim ilar to th at of the nation which was char acterized by sharply rising deposits, greatly ex panded Governm ent security holdings and declin ing loans. T he peak level of loans at 24 weekly re porting banks in the principal cities of this district was reached late in December, 1941. T hereafter, outstanding loans dropped steadily. D uring the first seven m onths of the year loan levels rem ained above the coresponding periods in 1941, but from July on the volume of loans fell below th at of the comparable weeks a year earlier and continued to lose ground relative to 1941 for the rest of the year. A t the close of 1942 outstanding loans at the weekly reporting banks in this district were $61 million less than at the end of 1941. Several factors accounted for the pronounced drop in loans. In the first place there was a decrease due to liquidation of inventories and the consequent re tirem ent of credit used to build up stocks of goods. T he general upw ard trend in inventory volume be ginning w ith the defense era in the spring of 1940 had resulted in large loans from banks to finance the grow ing stocks of all types of m anufacturers’, w holesalers’, and retailers’ goods. Intensive con sum er buying this year, however, has resulted in the liquidation of irreplaceable stocks. Intensifying the decline in inventory loans has been the higher col lection ratios and stronger cash position of the m an ufacturer, wholesaler and retailer. T he curtailm ent of m anufacturing, sales stoppages, and stricter credit term s to consumers, brought about a strong decline in the volume of consum er credit at banks. In agriculture, high prices and strong m arkets have created a strong cash position for the farm er. These funds have been employed in norm al farm production activities, resulting in less borrow ing from banks, and in actual repaym ent of outstanding loans, particularly on farm land and equipm ent. Also a sm aller portion of crops have gone into gov ernm ent loan, thus lessening the volume of Com m odity Credit Corporation loans held by banks. F u n d s fr o m n o n - b a n k in g s o u r c e s : In m arked contrast to declining loan volume bank investm ents have increased sharply. F or the 24 re porting banks in this district total investm ents at th e close of 1942 were $420 million g reater than at the close of 1941, alm ost doubling in the year. V ir tually all of this increase was in Governm ent securi ties. A lthough the retu rn on investm ent in Govern m ent securities is considerably below th at on loans the great increase in dollar volume of securities held should offset any loss in bank earnings resulting from declining loans. In general, earnings in city banks probably have not suffered as much as earnings in rural banks in asm uch as m ost m etropolitan banks keep their funds m ore fully invested. C ountry banks on the other hand have been slower to invest funds arising from increased deposits and since loan rates in rural com m unities are generally higher than in the cities they have suffered a greater loss of income through shrinking loan volume than have city banks. As of January 19 W ar Loan Deposit Accounts at banks in this district totaled $136 million reflecting a m ovem ent tow ard greater utilization of book credit paym ents for G overnm ent securities. H ow ever, of the 1500 banks in this district only 258 have qualified as special depositories and m any of those qualified are not a t present using their w ar loan accounts. Investm ents of banks increased much more rap idly in the later m onths of 1942 due to the fact th at Governm ent financing requirem ents became much heavier as the arm am ent program sw ung into ex tensive production. T he m ajor financing undertaken by the T reasury in December brought forth a total of alm ost $13 billion and was the largest m onthly financing operation in the history of this or any other country. T his cam paign was conducted by the V ictory F und Com m ittees, and involved the sale of T reasury bonds, certificates, and bills, tax savings notes and w ar savings bonds. The table below shows a breakdow n of the financing operation for the U nited States and the E ighth D istrict. D E C E M B E R W A R F IN A N C IN G ( I n m illio n s o f d o lla r s ) U n ite d S ta te s .$ . . . . E ig h t h D is t r ic t P ercen ta f o f to ta l 2,830 1,003 1,681 1,312 1,014 $ 28.5 13.9 23.2 36.0 45.5 1.0% 1.4 1.4 2.7 4.5 $ 7,840 $147.1 1.9 .$ 2,058 . 2,117 897 $ 84.2 100.3 12.1 4.1 4.7 1.3 $ 5,072 $12,912 $196.6 $343.7 3.9 2.7 F u n d s fr o m c o m m e r c ia l b a n k in g s o u r c e s : T r e a s u r y B i l l s ( n e w m o n e y )-. F u n d s fr o m a ll so u r c e s .. Page 4 A G R IC U LT U R E A gricultural production in the E ighth D istrict reached an all-time high in 1942, surpassing by 2 per cent the previous record output of the preceding year. Increases were reported for all of the d istrict’s principal crops except tobacco, w heat, and fruit. The decreases in production of w inter w heat and fruit were due to extrem ely adverse w eather conditions in the late w inter and early spring, while excessive m oisture during the grow ing season reduced the tobacco yield. A lthough acreage of some crops was increased in 1942 the high level of total production was prim arily accounted for by g reater crop yields per acre. Spring planting of m any E ighth D istrict crops was delayed by frequent rains and m uch replanting was necessary. Continued rainfall in June and early July handicapped cultivation and was adverse for harvesting small grains and hay, but proved bene ficial to pastures. Flood dam age was also heavy in certain localities. M ore favorable w eather during A ugust and Septem ber, however, aided rapid m atur ing of m ost crops. H arvesting proceeded at a satis factory pace throughout m ost of October but rains at the end of the m onth and in early Novem ber de layed gathering of late crops to some extent. The latter p art of Novem ber saw a return of favorable harvesting w eather. December snowfall coupled w ith abnorm ally low tem peratures found harvest ing, except for soybeans, about completed in this district, but curtailed routine outdoor work. Livestock production in the E ighth D istrict es tablished new records in 1942. T he pig crop was nearly one-third larger than th at of the preceding year, and the num ber of sows to farrow in the spring of 1943 is indicated to be about one-fourth greater than last spring. T otal receipts of livestock at Na tional Stock Y ards during 1942 were 9 per cent greater than last year. Receipts of cattle were 19 per cent, sheep 14 per cent and hogs 4 per cent above respective totals for 1941. Inspected slaughter at St. Louis for 1942 exceeded th at of 1941 by 14 per cent. Production of corn in the E ighth D istrict was 13 per cent above 1941 output and 28 per cent higher than the ten-year (1931-40) average. T he oats crop was 7 per cent greater than in the preceding year and 65 per cent above the ten-year average. W heat production was 54 per cent below th at of 1941 and 59 per cent under the ten-year average. T he 1942 cotton crop in this district was 12 per cent larger than in 1941 and was of generally higher quality. T he rice crop was 24 per cent above 1941 produc tion and 61 per cent above the ten-year (1930-39) average. O utput of tam e hay exceeded 1941 tonage by 13 per cent and was 57 p e r cent above the ten-year (1931-40) average. W hite potato pro duction in 1942 was 13 per cent above the previous year and 14 per cent higher than the ten-year average. The fruit crop in E ighth D istrict states fell con siderably short of 1941 record production. The com mercial apple crop is placed at 6,586,000 bushels compared w ith 9,473,000 bushels in 1941; peaches at 5.509.000 bushels compared w ith 12,479,000 bushels in 1941; pears at 2,494,000 bushels compared with 2.650.000 bushels in 1941; and grapes at 27,590 tons against 31,170 tons in the preceding year. The pecan crop was indicated to be 9,900,000 pounds as com pared with 1941 production of 13,777,000 pounds. Prices of farm products rose steadily throughout 1942, and sharp advances at the end of the year raised prices to the highest levels since October, 1920. The index of prices received stood at 178 per cent of the 1909-14 average on December 15, an in crease of 24 per cent during the year. A gain of 9 points, or 5 per cent, was recorded for the month. The index of prices paid by farm ers, including inter est and taxes, was unchanged in the m onth but rose 8 per cent during 1942. T he parity ratio was 115 at mid-December compared w ith 109 a m onth earlier and 100 at the beginning of the year. T he average index of prices received for the entire year was 157, the index of prices paid, including interest and taxes, was 152 and the parity ratio 103. P rin cipal price increases for the year were registered by truck crops, followed by fruit, m eat animals, poultry and eggs, dairy products and grains, in th at order. Prices of livestock at St. Louis moved upw ard during the year 1942 w ith average hogs at N ational Stock Yards selling at levels above $14 per cwt. in the last half of Decem ber and top beef ranging be tween $16.00 and $16.50 per cwt. during the m onth. Price gains for livestock were sufficiently greater than for grains and favorable feed ratios were m ain tained throughout the year. Price increases during the current m arketing season for all types of E ighth D istrict tobacco more than offset a 3 per cent de crease in output. Consequently, the 1942 crop had a considerably greater cash value than the 1941 crop. M arket prices of burley tobacco for the season through Jan u ary 15, 1943 averaged $42.29 per cwt., an increase of $12.65 over the correspond ing period last season. Green River and stem m ing district tobacco sold at an average of $13.42 per cwt. through January 11, as com pared w ith $11.92 per cwt. for the same period a year ago. O ne-sucker sales through January 11, were made a t an average Page 5 price of $4.34 per cwt. above the corresponding period last year. Dark-fired m arkets opened be tween January 5 and 9. Prices for the season through January 15 averaged $2.73 per cwt. higher in the E astern D istrict and $1.42 higher in the W estern D istrict than in the corresponding period of last season. M iddling 15/16 cotton sold on the M emphis spot m arket in December in a range be tween 19.25c per pound and 20.00c per pound, aver aging slightly higher than at the beginning of the year. Cash farm income in E ighth D istrict states for the year 1942 is indicated to be in excess of $3 billion, approxim ately one-third greater than in 1941. Income from farm m arketings in district states in the first ten m onths of the year nearly equaled 1941 total income. Farm income in Novem ber was $362 million compared with $258 million in November, 1941 and for the first eleven months of the year totaled $2,763 million compared with $1,998 million in the corresponding period of 1941. The increase in cash farm income in 1942 is largely due to the substantial price gains for nearly all of the district's crops. Total agricultural employment in the United States at the end of 1942, according to the U. S. D epartm ent of A griculture, was 8,861,000, virtually unchanged from a year earlier. The farm labor situation continues unsettled in the district with shortages evident in certain areas and contemplated in others. D espite rising farm wage rates, which in this district at the close of 1942 averaged 31 per cent over a year earlier, the constant flow of farm labor into w ar industry and m ilitary service together with the possibility of adverse weather, create the most im portant threats to achievem ent of the 1943 agri cultural production goals in this district. T he U. S. D epartm ent of A griculture recently announced th at farm ers failing to plant within 90 per cent of their 1943 crop allotm ents would be subject to penalties in the form of reductions in federal crop subsidies at a rate five times the rate of paym ent. T hus a farm er who plants only 70 per cent of his allotm ent would forfeit the entire sub sidy paym ent. T he regulation applies specifically to w heat, corn, tobacco, cotton, rice and peanuts, although provision is made for substitution of certain other w ar crops in some instances. As a stim ulus to the production of additional feed grain to m eet the increased needs of livestock in 1943 farm ers are perm itted to overplant corn allotm ents w ithout penalty, provided their quotas of other war crops are planted. Page 6 Since the last issue of this review the Farmers’ State Bank of Camp Point, Illinois, has become a member of the Federal Reserve System. C A SH FA R M IN C O M E (I n thousands Novem ber Cum ulative for 11 m onths of dollars) 1942 1941 1942 1941 1940 A r k a n sa s................ $64,238 $42,374 $270,385 $208,521 $128,521 I llin o is ..................... 86,189 64,279 855,673 618,540 484,828 Indiana..................... 50,547 37,995 491,428 337,494 258,215 K en tu ck y ................ 16,075 12,304 191,995 140,382 116,996 56,955 34,391 261,203 183,800 102,112 M ississip p i.............. M isso u ri.................. 54,235 41,737 481,798 348,720 253,415 T en nessee................ 34,0,05 25,300 210,338 160,644 107,945 T o ta ls................... 362,244 258,380 2,762,820 1,998,101 1,452,032 R E C E IP T S A N D S H IP M E N T S A T N A T I O N A L ST O C K Y A R D S Receipts Shipments D ec., N ov., D ec., D ec., N ov., D ec., 1942 1942 1941 1942 1942 1941 Cattle and C alves......... 110,236 153,937 105,076 49,711 81,814 39,852 H o g s ...................................296,285 273,301 297,985 79,856 54,859 80,456 H orses and M u les......... 1,606 3,220 2,014 1,708 3,120 1,970 S h e e p ................................ .. 63,392 62,557 44,493 6,615 5,719 4,568 T o ta ls..............................471,519 493,0,15 449,568 137,890 145,512 126,846 W H O L E S A L E P R IC E S I N T H E U N IT E D ST A T E S Bureau of Labor Statistics Jan. Jan. Dec. Jan. Jan. 16/43 comp, with (1926=100,) 16/43 9 /4 3 19 /4 2 17/4 2 D ec. 19/42 Jan. 17/42 A ll Commodities. Farm Products F o o d s................ O th er ................ 101.6 116.6 104.8 96.3 101.4 116.1 104.4 96.2 100.7 113.3 10,4.2 96.2 95.6 100.8 94.1 94.4 + + + + 0.9% 2.9 0.6 0.1 + 6.3% + 1 5 .7 + 1 1 .4 + 2.0 Bureau of Labor Statistics (1 9 3 5 -3 9 = 1 0 0 ) C O ST O F L IV I N G D ec. 15, N ov. 15, Sept. 15, D ec. 15/42 comp, with 1942 1942 1939 N ov. 15/42 Sept. 15/3S + 19.6% 119.8 100.6 + 0.5% U nited States. . . . . 120,.4 + 19.3 118.4 100.4 St. L o u is............ , 119.8 + LI ■* 100.4 + 2 1 .8 122.3 M em phis............ *N ot Available. Bureau of Labor Statistics (1 9 3 5 -3 9 = 1 0 0 ) Dec. 15, 1942 U . S. (51 c i t i e s ) . ,. . St. L o u is............ , L ittle Rock . . . L o u is v ille ......... , . M em p h is......... . , (C ost in thousands) CO ST O F F O O D N ov. 17, D ec. 16, 1942 1941 132.7 134.4 131.1 128.0 137.1 113.1 117.5 115.5 113.7 113.1 + 1.2% + 2.7 + 0.6 + 1.1 + 2.0 + 17.3% + 14.3 + 13.5 + 12.5 + 2 1 .2 B U I L D I N G P E R M IT S N ew Construction Repairs, etc. Number Cost N um ber Cost 1942 1941 1942 1941 1942 1941 1942 1941 27 23 9 54 34 109 33 364 38 149 703 D ec. T o ta ls .. . "l37 N ov. “ . 200 787 Year “ . 5,503 12,493 E van sville. . . L ittle R ock . . L ouisville . . . 131.1 130.8 130.3 126.5 134.4 D ec. 15/42 comp, with N ov. 17/4 2 D ec. 16/41 $ 74 1 65 260 49 449 2,080 18,393 $ 10.4 109 206 586 293 1,298 2,249 36,253 16 37 28 150 86 67 $ 11 $ 60 87 11 35 26 16 42 163 86 102 148 54 133 317 491 178 372 406 528 200, 281 6,740 8,326 4,582 7,625 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 thousands D ec., ’42 comp, with of dollars) D e c./4 2 N o v ./4 2 D e c./4 1 N o v ./4 2 D e c./4 1 T otal 8th D is t.. $ 86,766 $ 59,695* $ 35,271 S o u rce: F . W . D odge Corporation. * R evised. (K .W .H . in th o u s .) 45% +146% C O N S U M P T IO N O F E L E C T R IC IT Y N o. of D ec., N o v ., D ec., December, 1942 Custom- 1942 1942 1941 compared w ith ers* K .W .H . K .W .H . K .W .H . N ov., 1942 D ec., 1941 E v a n s v ille ----- 40 7,541 6,521 4,336 L ittle Rock . . . 35 3,032 3,170 2,426 L o u isv ille ......... 82 16,175 16,089 15,112 M e m p h is .......... 31 5,534 5,275 4,497 Pine B lu f f ___ 20 2,574 2,076 1,355 St. L o u is______133 87,964 87,896 60,,122r T o ta ls..............341 122,820 121,027 87,848r *— Selected industrial customers, r— Revised. D e c ./4 2 + +16% — 4 + 1 + 5 +24 -0 + 1 + + + + + + + 74% 25 7 23 90 46 40 L O A D S I N 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 ./4 2 D e c./4 1 J a n ./4 3 Jan ./4 2 12 m os.’42 12 m os.’41 152,234 154,5541 110,959" 38,143 29,379 Source: Terminal Railroad A ssociation of St. L ouis. 1,713,982 1,269,640 W H O L E S A L IN G L ines of Commodities N et Sales D ata furnished by Bureau of Census, U . S. D ept, of Commerce. December, 1942 compared with N o v .,’42 D ec.,’41 A utom otive Supplies................................ ..+ E lectrical Supplies......................................+ F u rn itu re....................................................... .— G r o c er ie s ....................................................... .-fH ard w are.........................................................— Plum bing Su pplies......................................— Tobacco and its P rodu cts......................+ M iscellaneous.............................................. ..+ T otal all lin es*................ .............................+ *Includes certain lines not listed above. 6% 8 43 8 1 4 10 13 5 D ec. 31, 1942 comp, with D ec. 31, 1941 +26% — 55 — 57 -f- 14 — 31 — 20, +17 + 26 — 8 D E P A R T M E N T ST O R E S 12 m o s/4 2 to same period ’41 - 4 -19 -48 - 4 -25 Stocks on Hand Stock Turnover D ec. 31,’42 comp, w ith Dec. 31,*41 Jan. 1, to Dec. 31, 1942 1941 N et Sales December, 1942 compared with N o v .,’42 D ec.,’41 Stocks 3.60 3.57 19% Ft. Smith, A rk .. . -54% + 1 9 % +33% 4.15 4.19 +30 +26 7 Little Rock, Ark. + 45 7 — 9 E. St. Louis, III.. —47 3.78 4.24 + 2 Quincy, 111............... —39 + 7 + 7 --3 2 +23 Evansville, In d .. . — 37 5.28 3.98 8 Louisville, K y .. . . - 5 0 + 3 + 4.38 3.50 7 St. Louis, M o .. . . —48 + 10. + 16 3.25 — 4 — 11 2.93 4 Springfield, M o .. . - 4 5 —6 Jackson, T e n n .... - 4 7 — 3 3.73 3.74 + 19 Memphis, Tenn. . . + 3 5 t 10 12 4.00 3.45 — 5 + *A11 other c itie s. . + 4 2 3.66 4.31 8th F. R. D istrict. + 4 5 + 9 + 10 *E1 Dorado, Fayetteville, Pine Bluff, A r k .; Alton, Harrisburg, M t. Vernon, 111.; Vincennes, I n d .; D anville, Hopkinsville, M ayfield, K y . ; Chillicothe, Mo. Trading days: D ec., 1942— 26; N ov., 1942— 24; D ec., 1941— 26. Outstanding orders of reporting stores at the end of December, 1942, were 51 per cent greater than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding December 1, 1942, collected during December, by cities: Instalm ent E xcl. Instal. Instalm ent E xcl. Instal. Accounts Accounts A ccounts A ccounts i 3 tit Fort Sm ith............ Little Rock . . 27 L o u is v ille .... 30 Memphis . . . . 46 69% 60 66 67 82% 75 75 71 Q u in c y ..............26% St. L ouis . . . . 37 Other cities . . 24 8th F. R. D ist. 35 IN D E X E S O F D E P A R T M E N T S T O R E S A L E S A N D ST O C K S 8th Federal Reserve D istrict (1923-1925 average = 100) D ec., N ov., Oct., D ec., 1942 1942 1942 1941 Sales (daily average), U n ad ju sted .................. Sales (daily average), Seasonally a d ju sted .. Stocks, U nadjusted................................................... Stocks, Seasonally adjusted................................ 212 158 129 94 101 S P E C IA L T Y S T O R E S N et Sales December, 1942 12 m os.’42 compared w ith to same N o v .,’42 D ec.,’41 period *41 145 135 108 96 _ . Stocks on H and D ec. 3 1 /4 2 comp, w ith D ec. 31/4 1 129 105 94 190 115 86 92 f Stock Turnover Jan. 1, to D ec. 31, 1942 1941 M en’s Furnishings. .+ 5 1 % + 9% +16% + 25% 2.87 3.19 Boots and S h o e s .. . + 2 7 +16 +29 + 18 7.84 8.46 Percentage of accounts and notes receivable outstanding December 1, 1942, collected during D ecem ber: M en’s F urnishings......................... 61% B oots and S h o es.............................50% C H A N G E S I N P R I N C IP A L A S S E T S A N D L I A B I L I T I E S K O F ST. L O U IS Change from Jan. 20, D ec. 23, Jan. 21, (I n thousands of dollars) 1943 1942 1942 Industrial advances under Sec. 13b. Other advances and r e d is c o u n ts .... Total reserves . Industrial commitments under Sec. 1 3 b .. 7 90 284,780 284,877 — 54 — 105 + 1 6 ,1 0 4 + 15,945 — 93 + 90 + 178,494 + 178,491 720,842 515,511 511,190 + 17,123 + 2 5 ,2 7 0 + 936 + 74,676 + 86,993 + 188,614 — + ? 1,633 54 493 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 D E C E M B E R , 1942 (In cl. Louisville, Memphis, L ittle R ock branches) Pieces Am ounts Checks (cash items) han dled................................ 6,30.3,538 $2,376,599,433 Collections (non-cash item s) handled................ 152,710 45,275,678 Transfers of fu nds....................................................... 5,134 605,737,624 Currency received and counted.............................. 15,329,935 60,403,898 Coin received and c o u n t e d . . . . . ............................ 13,088,178 1,203,717 Rediscounts, advances and com m itm en ts.......... 2 24,000 N ew issues, redemptions, and exchanges of securities as fiscal agent of U . S. Govt., etc. 680*,969 389,684,700 Bills and securities in custody — coupons clipped 28,891 ..................... R A TE S O F 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 A CT Advances to member banks, secured by direct obliga tions of the U nited States or by such Government guaranteed obligations as are eligible for collateral, which have one year or less to run to call date or to maturity if no call date, under paragraphs 8 and 13 of section 1 3 .............................................................................. per annum Advances to member banks, secured by direct obliga tions of the U nited States or by such Government guaranteed obligations as are eligible for collateral, which have more than one year to run to call date or to maturity if no call date, under paragraphs 8 and 13 of section 13.................................................................... 1 % per annum Advances to non-member banks, secured by direct ob ligations of the U nited States, under paragraph 13 of section 1 3 ....................................................................................1 % per annum Rediscounts and other advances to member banks un der sections 13 and 13a......... .................................................... 1 % per annum Advances to member banks under section 1 0 (b )................ 1^4% per annum Advances to individuals, partnerships, and corporations other than banks, secured by direct obligations of the United States, under paragraph 13 of section 1 3 .. .2 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 1 3 b : ^ _ fl % to (a) On portion for which such institution is obligated I 1 % per annum (b) On remaining p o rtio n — 'N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial (2^2% to businesses under section 13b................................................ ( 5 % per annum Commitments to established industrial or commercial businesses under section 13b.....................................................10% to 25% of the loan rate charged borrower with a minimum rate of % per annum. Commitments to member banks, nonmember banks, and other financing institutions, under section 13b................ 10% to 25% of the loan rate charged borrower with minimum rate of % per annum provided: that no commitment w ill be given on loan on which bor rower is charged over 5% per annum. P R IN C IP A L R E S O U R C E A N D L IA B I L I T Y IT E M S O F R E P O R T IN G M E M B E R B A N K S Change from Jan. 20, Dec. 23, Jan. 21, (In thousands of dollars) 1943 1942 1942 Total loans and investm ents......................... $1,336,494 + 7 0 ,3 1 7 -j-397,409 Commercial, industrial, agricultural loans 238,276 — 10,379 ■ — 46,049 Open market paper............................................ 9,768 — 627 — 14,319 Loans to brokers and dealers in securities 3,303 ■— 372 <— 932 Other loans to purchase and carry securities 9,322 — 1,735 — 1,148 Real estate loans....... ......................................... 64,322 — 851 + 5,057 Loans to b a n k s .................................................. 325 — 1,014 — 468 Other loans........................................................... 65,908 — 2,452 ~ 10,796 Total lo a n s ....................................................... 391,224 — 17,430 — 68,655 Treasury bills....................................................... 119,956 + 2 1 ,6 9 0 +10,2,593 Certificates of indebtedness............................ 186,965 + 4 9 ,2 7 2 + 186,965 Treasury notes..................................................... 107,173 — 1,204 + 64,872 U. S. bonds......................................................... 372,957 + 1 6 ,2 1 7 + 1 2 9 ,5 9 4 Obligations guaranteed by U . S. G o v t... 35,214 — 469 — 28,818 Other securities................................................... 123,005 + 2,241 + 10,858 Total in v estm en ts......................................... 945,270 + 8 7 ,7 4 7 + 4 6 6 ,0 6 4 Balances with domestic ban ks..................... 135,947 ■— 15,223 .— 85,607 Demand deposits — adjusted*....................... 847,816 + 3 4 ,7 9 6 + 2 1 7 ’,905 Time deposits....................................................... 193,403 + 3,288 + 7,459 U . S. Government d ep osits........................... 93,563 + 2,149 + 66,011 Interbank d e p o sits............................................ 570,193 + 1 3 ,8 8 2 + 54,642 * Other than interbank and Government deposits, less cash item s on hand or in process of collection. Above figures are for 24 member banks in St. Louis, Louisville, M em phis, Little Rock and E vansville. Their resources comprise approximately 75% of the resources of all member banks in this district. (In thousands of dollars) D E B IT S T O I N D I V I D U A L A C C O U N T S D ec., N ov., D ec., D ec.,’42, comp. with 1942 1942 1941 N o v ./4 2 D e c./4 1 E l D orado,......... Ark.$ 12,936 Fort Sm ith,......... “ 21,627 H e le n a ,................ “ 3,340 L ittle Rock, . . . . “ 80,565 Pine B lu f f ,......... “ 20,434 Texarkana, -Ark. -Tex. 17,264 E .S t.L .-N a t.S .Y .,Ill. 76,528 Q u in c y ,................ “ 13,588 E vansville,............Ind. 68,626 L o u is v ille ,........... K y. 328,855 O w en sb oro,......... “ 12,470 Greenville,......... Miss. 12,414 St. L o u is,..............Mo. 1 ,026,146 S ed alia,................ “ 3,241 Springfield,......... “ 24,982 M em phis,............Tenn. 267,949 T o ta ls......................... 1,990,965 A lto n ,.......................111. 13,076 P a d u c a h ,..............Ky. 9,195 Cape Girardeau, . Mo. 4,776 H ann ibal,.............. “ 4,277 Jefferson C ity,. . . “ 26,445 J a c k so n ,........... Tenn. 9,515 10,354 20,905 3,826 75,102 22,337 14,778 71,950 12,441 62,814 267,194 10,,089 10,873 842,813 2,932 29,989 281,785 1,740,182 9,960 8,084 4,036 4,046 17,561 9,760 $ 9,076 22,90,9 3,096 62,208 15,291 25,362 65,640 12,967 48,786 313,091 11,221 9,057 926,502 3,068 21,737 267,765 1,817,776 + + + b b + b h — - + + + + + 25% 3 13 7 9 17 6 9 9 23 24 14 22 11 17 5 + 14 14 18 6 + 10 + + + + + + + + + + + + 43% 6 8 30 34 32 17 5 41 5 11 37 11 6 15 0- 31 + 51 — 3 C O M M E R C IA L F A I L U R E S I N E IG H T H F . R. D IS T R IC T D e c ./4 2 comp, with D e c./4 2 N o v ./4 2 D e c./4 1 N o v ./4 2 D e c./4 1 N u m b e r ................ 12 13 25 — 8% — 52% L iabilities.............. $122,000 $132,00 $224,000 — 8 — 36 Sou rce: Dun and Bradstreet. (Completed January 25, 1943) Page 7 INDUSTRIAL PRODUCTION N A TIO N A L SUM M ARY O F CO N D ITIO N S 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 m onthly index of physical volume of pro duction adjusted for seasonal variation, 1935-39 average = 100. L atest figures shown are for December, 1942. WHOLESALE PRICES Bureau of Labor Statistics’ weekly indexes, 1926 average — 100. L atest figures shown are for week ending January 16, 1943. MEMBER BANK RESERVES AND RELATED ITEMS SILUONS OF DOLLARS FACTORS USING RESERVE FUNDS 0 ^ N ON// W ednesday figures. 13, 1943. 1 X' ■ L atest figures shown are for January MEMBER BANK RESERVES ilLUONSOFDOLLARS TO TAL REQ U IREDRESERVES rS/— ~ vSf ' / " r \ V - > f EXCESSRESERVES tl -J-1 I M __.l ¥ A ^ Vr'i -Jr i H \ m Wednesday figures. Required and excess reserves, but not the total, are partly estimated. Latest figures shown are for January 13, 1943. Page 8 Production — Industrial production in December showed less than the usual decline from November and the Board’s seasonally adjusted index rose two points further to 196 per cent of the 1935-39 average. Munitions output continued to increase, raising total durable goods production to a level 33 per cent higher than in December a year ago, while for the same period pro duction of nondurable goods was only 4 per cent larger and mineral output was somewhat lower. Steel production in December and the first half of January averaged 97 per cent of capacity, down slightly from the October and November levels. Total steel production for the year showed a 4 per cent increase over 1941 while the output of steel plate, important in shipbuilding and tank produc tion, rose 90 per cent over the previous year. This increase over a year ago was largely obtained by conversion of existing facilities. Output of lumber, and stone, clay and glass production in December showed larger declines than are usual at this time of year. The value of construction was 3.2 billion dollars in the fourth quarter of 1942, according to preliminary estimates of the Department of Commerce. This was about 25 per cent lower than the peak of 4.3 billion reached in the previous quarter, but slightly higher than that of the fourth quarter of 1941. Installations for direct military use and industrial facilities accounted for almost three-quarters of the total, and residential building contributed some what less than half of the remainder. For the year as a whole, construction is valued at 13.6 billion dollars — of which almost four-fifths was publicly financed — an increase of one-fifth over 1941. The increase took place en tirely in military and industrial projects, which rose 4.4 billion dollars. All other types of construction declined. Distribution— Distribution of commodities to consumers was maintained at a high level in December and the first half of January, after allowance for the sharp fluctuations that are customary at this time of year. The 1942 Christmas buying season exceeded that of any previous year, value of sales at department stores, for example, being about 15 per cent larger in Novem ber and December than in the corresponding period of 1941. The increase over the year period reflected in part price advances but there was also an increase in the volume of goods sold. Freight car loadings declined about the usual seasonal amount in Decem ber, and the Board’s adjusted index remained at 134 per cent of the 1935-39 average. Grain, livestock, and miscellaneous loadings rose somewhat on a seasonally adjusted basis, while coal and other products declined slightly. Commodity prices—Prices of agricultural commodities advanced sharply from the early part of December to the middle of January. Maximum prices designed to restrict further increases were issued for some of these com modities, including corn and mixed feeds. For certain other products, how ever, like potatoes and truck crops, Federal price supports were increased. Wholesale prices of most other commodities continued to show little change. From mid-November to mid-December retail food prices advanced 1.6 points to about 133 per cent of the 1935-39 average. Further increases in these prices are indicated in January as a result of advances permitted re cently in maximum levels for such items as flour, milk, and poultry. Bank credit — Excess reserves of member banks declined sharply in the last week of December, and during the first half of January they averaged about 2.2 billion dollars, as compared with 2.5 billion for most of December. Large payments to the Treasury for new securities, some increase in cur rency, and other end-of-year requirements were responsible for drains on reserves during the last week of December. There were, however, substan tial sales of Treasury bills to Federal Reserve Banks under options to repur chase. In the early part of January, reduction in Treasury balances at the Reserve Banks and a return flow of currency supplied banks with additional reserves, and some of the bills sold to the Reserve Banks were repurchased. During this period Reserve Bank holdings of Government securities, which had increased to 6.2 billion dollars by December 31, declined to below 6 billion. Reflecting largely purchases of the* per cent certificates of indebtedness delivered in the week of December 30, holdings of direct and guaranteed Government obligations at reporting member banks in 101 cities increased by 1.8 billion dollars to 28 billion over the four weeks ending January 13. New York City banks took 640 million of the 1.5 billion dollars of certifi cates sold to reporting banks. Commercial loans in New York City declined by 90 million dollars; outside New York there was little change. Loans to brokers and dealers rose sharply in December during the Victory Fund campaign, but declined correspondingly in the following weeks. Other loans continued to decline. United States Government security prices — Subsequent to the close of the Victory Fund drive in December prices of United States Government securities increased. Long-term taxable bonds are yielding 2.32 per cent on the average, and long-term partially tax-exempt bonds 2.06 per cent.
@FedFRASER