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This monthly report on conditions is not to be released to the public until on and after February 2, 1919, 30 PLEASE HOLD IT CONFIDENTIAL UNTIL THE RELEASE DATE. William McC. Martin, Chairman cf the Beard and Federal Reserve Agent, Federal Reserve Bank of St. Louis. REPORT ON CONDITIONS IN FEDERAL RESERVE DISTRICT NUMBER EIGHT There has been little change in general conditions in this district during the past month. basis. Business is absorbed in adjusting itself to a peace Owing to the high prices, normal demands are being delayed, which with the expiration of war orders,is resulting in many concerns operating at reduced capacity. However, it is believed that Increased activity along normal and stable lines will shortly ensue, and many are preparing for a large volume of business. Efforts are being made in this district to develop foreign trade,and this is expected to help the situation materially. The retail dry goods trade has been stimulated by post-holiday clear ance sales,and department stores and merchants generally report a good business. Hardware dealers, also report increased activity, stating that the demand for farm implements is especially strong. Merchants themselves are said to be buying only for their immediate needs, on account cf the uncertainty of future prices. Collections as a rule are reported to be satisfactory. A downward tendency in the price of certain dry goods and other sta ples is ap:ar<;nt. A slight reduction in f^od prices is also being effected. In this connection, the fallowing statement made by a large grocery house in this district is interesting: "Phile the laboring people were drawing abnormally high wages, they undoubtedly kept stocking up on canned goods. This fact added to the unusual amount of home canning, will serve to reduce the sale cf certain standard canned goods by fully 10%. This may be counted upon to slow up the demand within the next sixty days to such an extent as to reduce some food prices materially." 2 Cotton is moving to market rather*slowly and the general opinion seems to be that its marketing will continue at this gate. There seems to be a dis position on the part cf seme to held the cotton in the hope of getting increased prices, while there is also a feeling cf caution on the part of the mills, which is preventing over buying. During the past .tenth the demand for money in this district has become easier. This is reflected in the accommodations extended member banks by the Federal Reserve Bank. On December 20, 1918, the Federal Reserve Bank held mem ber banks' paper amounting tc $71,335,000., whereas on January 20, 1919, it held only $57,575,334., shewing that $13,759,366 had been liquidated. The bank rate to customers is new about 5^% in the large centers'and in the outlying districts somewhat higher. The demand for commercial paper in this district has also been easier during the past month. cotton in the South. Brokers attribute this largely to the slew movement of The commercial paper ra',e ranges now from 5% to 5&%. Agricultural conditions in this district continue favorable. ter s.,'heat is reported to be in unusually good condition. The win It is well rooted, and there is an abundance cf moisture in the soil. As yet,it has had little covering, but the weather has not been such as to damage it. The report cf the St. Louis National Stock Yards for December shows in creases in the receipts and shipments cf cattle and hogs, but decreases in the receipts and shipments cf sheep, horses, and mules, in comparison with the corre sponding month last year. Postal receipts during December in St. Louis, Louisville, Memphis and Little Rock all show increases in .cmparison with the same month last year. comparative figures are as follows: St. Louis................ Louisville............... Memphis.................. http://fraser.stlouisfed.org/ Little Rock.............. Federal Reserve Bank of St. Louis December 1917 1918 $675,309.77....... $700,444.12 1^7,105.89....... 170,529.64 111,454.45....... 130,350.80 71,749.98....... 73,262.57 The Due to the high cost of materials and labor, and the presence of win ter, the building industry is si 111 considerably below normal. However, roofing manufacturers and building contractors are looking forward fc a revival with the opening of spring. Reports from St. Louis and Memphis, for December, show de creases in both the number of building permits issued and the estimated cost of construction, in comparison with the corresponding month last sear. from Louisville shows an increase. Tne report The comparative figures for these cities are as follows: December 1917 Permits Cost St. Louis .......... 277 §424,678 Louisville ..... . 28 42,130 Memphis 49 65,625 Little Rock ........ 1918 Permits Cost 253 $347,481 46 113,305 25 28,035 32 11,700 The labor supply is becoming mjre plentiful, with the release of soldiers. Many are returning to their old positions, while others are entering new fields. Federal and State agencies are rendering great assistance in placing them in positions for which the;. are best suited. Munition workers, who have been released, are being gradually absorbed by other industries. There are practically no labor disturbances in this district at the present time. 'S ", , '. f. February 26, 1919. ... - ' Hr. J. A. Broderick, Secretary, Federal Reserve Board, u&shington* Dear Sir: Herewith I send you monthly report on conditions in . this district# . - ' , .t-' *' I also enclose a separate report giving the informa''^ tion in regard to the readjustment of business which vras roqnest- ^ * ed in your telagram of the 17th instant. Yours very truly. - " Federal Reserve Agent. - - .H.4^- -* ^ Fobruapy D6§ -M l O w* *' . - . . . - REPORT ON CONDITIONS IN FEDERAL RESERVE DISTRICT NUMBER EIGHT -^ There has been some iciprovement in general business conditions in this district during the past month. Declines in the prices of certain commodities have stimulated buying and many concerns report increased activity. However, the defla tion of prices has not yet gone far enough to induce vigorous operations generally. In many lines merchants are still buying only for their immediate needs. Neverthe less, reports indicate that business is gradually resuming a normal basis and with further readjustments of prices, a marked revival is anticipated. Business men, as a rule, continue optimistic regarding the future. Iron and steel manufacturers report that normal deraands are gradually fill ing the gap creatia Lrr the cancellation of war contracts. prices of metals have taken place. Slight declines in the basic Manufacturers of boots and shoes report an active business but state that it is not quite up to nhis time l^st year. has remained firm. The price of leathei Hiere has been a marked revision downward in the price of cotton goods and wholesalers 3.ad jobbers of dry goods state that this is having a deterrent , effect on their business, as merchants are buying cautiously, anticipating further reductions. Reports indicate that the flour milling industry is improving, but that it is itill considerably below normal. Business in the electrical line is becoming more normal, with some lowering in the prices of raw materials. Considerable improve ment in the wholesale grocery trade is noted, many concerns reporting substantial in creases in the volume of business over this time last year. increased activity. The drug line also shows Wholesale millinery houses report that customers are buying freely 2. business is being transacted. During the past month man^,7 buyers have been in the centers obtaining (roods for the spring trade. . t Some of the lar^ department stores and other retail houses iiave begun to revise their prices to a peace basis so as to attract consumers. The mild wea ther has retarded the sale of seasonable raerchandise and riany sales are being held to dispose of winter goods. at this time last year. Ratail merchants generally report a better business tlian The d&iand for spring merchandise is already apparent, end merc)iants are looking forward to a good spring business. Cotton continues tc move slowly in the southern portions cf and this is having a deterrent effect on business. district Reports indicate that it is being held by the producer in the hope of getting increased prices, and that cotton mills are not buying as they have large finished stocks on hand. During the past month a movement.has developed in the southern States to induce planters to reduce their cot ton aoreage. This will not only result in the south raising more food, but will also doubtless help in maintaining the price of cotton. The demand for money in this district has improved somewhat during the past month, This is reflected in the accomodations extended member barks by the Federal Reserve ?r?4* On January 20, 1319, the Federal Reserve 3ank of St. Louis held member banks' paper amounting to $57,575,634. and on February 20, 1919, it held §53,602,356., showing that only .^3,973,298. was liquidated. thirty day period, $13,759,366. was liquidated. During the previous The bank rate co customers has be come a little firmer, it now being from 5-l/2% to 6% in the large centers and some what higher in the outlying districts. There has also been a slight revival in the commercial paper market dur ing the past month. Brokers report an increased demand from some of the country districts, though very few of the large city banks are buying. The commercial pa^er rate now ranges from 5-l/4% to 5-l/2%. The winter wheat in this district oontinues to develop satisfactorily, though in soLie sections it has suffered froa the freezing aul thawing due to the lack i.S Of snow coveiing. Live stock is reported to he in f^odd condition. 3S3S report of the .St* Louie Nation.il stock for Jamary shows increases in the receipts of cattle an^: hogs but docre-ses in tl^o roeoipts of sheep, horses f imlespin comparison with the sujae month last year. It :Iso chows increases in tho ship ments of cattle. Logs ^nd sheep ^but a decrease in the shipments of horses and mles, In comparison with the corresponiin* i^onth last year. She coapar&tive fi bres shoeing the number of head received and shipped, are as follows: RECEIPTS DURING JANUARY ---- -— 1919 144,115 — 1916 107,127 -^.-gSgs__ ___ 1919 1918 395,140 ____ She op 1919 1918 26,439 291,606 Heroes and cnles 1919 1910 35,25,471 33,746 SHIPMENTS DURING JANUARY — — ---- Cattia---------- Bsxx------1919 1916 1919 1918 20,623 12,760 93,111 ,---- __________ - RerscH and Hales 1919 1918 H 3 l 9 1918 75,832 1,142 785 26,100 32,002 Postal receipts during January in St. Leuis, Lo-.isvillo and Hexphis all show increases in comparison %?ith tl\e same rx<nth last ye.'.r. decrer.ee is shcxni. In Little ^ock a sli^t The c<xnp .r^tive fibres ^ro as folla.?s: Jcmary ----------------- i St. Louis . . . . . . ............ Louisville....... Memphis ................... . Little Rock ...................... 3 1 9 ________________ __________________________ I $630,008.56 162,244.53 111,410.63 69,247.90 9 1 S - $590,974+07 145,249.72 * 83,454.50 72,179.91 Reports fren St. Louis, Louisville, MoEphis^^HHar Little Rock -Tv: Evansville % for the month of Janury indicate sor^c inprovomont in building operations in com parison with tho sumo month lust ye tr. Hovevor, duo to the high cost of materials and labor, tho building industry is still considerably below normal. The comparative figures for these cities are ^s follows: .'' * . . . ... * . ' . ' .* January . 1919 Permits St# Louis **************************** Louisville *************************** Menphis ****************************** Little Rook ************************** Evansville ******* *****.+******.*..*** Muoh 166 31 43 19 7 319 $507,015.00 66 95,001.00 46 122,760*00 ' 41 129,459.00 26, 14,480.00 s Coat #167,319.00 35,000.00 79,450.00 37,545.00 11,600.00 rogress has been made in this district in famishing suitable ea- ployment to soldiers and s ilors who h^vo been reloi-oed. with the slogm Pora Cost A CLja aign has been st rted a Job for Every Fighter" and this is resulting in many ^ H ^ i v i n g preference to them* itniitions workers being gr^ dually absorbed by otlier ii^dustries. ecpioyers have boon released^are also Howovor, there is a surplus of labor in 3t* Louis and some of the other largo citios in thiE district* There re practically no labor disturbances in this district at t?^} present tine* An interesting deveStopBMnt during the past month was tl.e offering to of banks in this district, by a New York Syndicate,/participations in a 350,000,000 Con*mercial Export Credit^th^ proceeds of which are to bo used in providing funds in America to purchase American supplies for reestablishing industrial operations in Bel-^*^Hc?*^Hany of the banks subocricod to this fund, which, it is beliovod, will assist in the development of foreign trade. :.'cl <-rary L7, 1912. nav FAR LABOR M S ER.':S* RLL1IPL0YED IK PEACE Repoi'ts from various lines of industries indicate that a largs percent^-^e cf e*yic*ars ^r-a co-ocoratin^ in fumishin,; emlo rment to soldiers aiid sailors wno have joen released. Liany eij:lcyers are takthen back, ^ tccll as rotrininy tl*eir present .oj co. A c<^ _irl,jn has been started in 3t. Louis rith the slogan "Hake a Job for Dvery Filter," and t Ms ic resulting in wcnloyers 'iviny pref^rc^ca to the soldiers and sailers. Munition workers, m o nave jecn i-eie-sed, are radually being Absorbed by ct.bsr industries. however, ioncral busies: ] s not as yet resmced such proiortioiis as fully to absorb the nrcscrt cup ly of labor. It is ostixx-.tod t ^ t tr^ere are reriMtcly 15,Wf tmct!ployod rorkers in St* Louis. In the other centers in titis hhe nusbor 3eec3S to be very a;.all. Those out of eminent seem to nostly unrkillod workisen, as there is a c-oI defend for 3 :illed vorhurs in many lines. For .nrrrral reeks past ths ?t. Louis of .'icc of the "States Bnplovi^ent Seryio^ baa been placing ^ average of about COO men in jobs each Txn'** The labor situation seenc to be ixirovisg it f' istrict# and with tlie revival of business activity, it is believed thrt t^ie surplus supp? * of labor rill ic largely absorbed. Eg? Ran TH3 i:U^7?Tl-IS8 or TIT. DI3TPIC5 H . n rjl/DJUSTLD EEEMSBLVES Reports from the different industries in tM c district indicate thxt business is gradually resinin^ a normal basis, but thnt it ha3 not ?s yet been fully accosnli3hed* h*ices in nany lines have r<-' nt decl ined far enough to induce vigorous operations. Hov.?over, doc ir.es in the prices of certain'commodities have tayon placo, riiich I^.s str-?al: ted buying. In other lines^ Raranants are still bur^in^ Cnly for tboir iryediate needs. With further r^- djusti3ents of prices, a oaried i-evlv^l in :usi?^0Ln Is f^nticipated. iron and steel oanufaoturors report t.r t ucna*l dsrvrnds &rs gradually fillin g the (^&p created by the cmccJ. n.ton or i?rr contr'-its. G^ae report tLat t ^ y are now doin, practically a nonir.l business. Ths demaiid for ?utci90Piies, ^rs^^es, ctc., is helping tiie i^on fnd steel in dustry. Shoo nanufacturors arc loin^ an activo o^sinerc, though it is not quite un to this tifae ^'st year. V.holesalcrc and io rs of dry t?ood3 state tiiat ti^eir business is declining, as :.:ercbants arc buying cautiously, anticiaatirj further reductions in thp prices of cotton yoo^n. A large clothing manufacturer states th^t he is drariny in his linos a littlo. The flour milling industry is still considorarly holor nor:^-3. Business in the electrical line is becosiinyiaore nor?cJ*d. Oo;:iio.^r jyorovoi^cnt in tiie -wholesale groccr^/ trade is 3±sz aniaront, 1? r 'n^ rx ^ * rrse'XK in the di'ug and mi .linery lines. Readjustment of t:;te candy inuvst in titling place sionly. This is also true of the luK er industry. One of our lar^e iaanuf:^cturers ventures the st^te:nc:it tliat tiie indYistrion i.i tliis district l^ave readjusted thcitselves to the extent of about 75 %. \7KAT CHANCES IN ^ I G PRICES RAV3 OCCUlL^TD * * . . Manufacturers of iron and steel products renort slight reductions in the basic prices of metals have ts^cen plrce, aver in^_ a*bout 10%. The price of leather remains fim* Dealers in dry ^code revert that there have been reductions in their line of from 10^ to 5C,i,. -^e^^ricRl su^-ly houses report s(xae lowering in the prices of copier wire and other raw naterlale. Wholesale grocery houses state tliere hue been a sii^t reduction in same cf their articles. Drug manufacturers report that declines vC^jired in articles used in the ^mufsct^ure of coalitions, such as Glycerine, Carbolic Acid, and their derivatives* Candy Manufacturers say tiiat material in their lino is practically as high new as li^t ^ar. Seme slir%t reduction in the price of paper is reported. little chan<^e in the price of lumber* < HCW FAR TIE DETIAIB HAS RE^mLUD ITS IK2RIAL FOOTING In the Iron and Steel line, leading x^anufacturcrs estimate ti^at the demand lias realised frcct 6 CJi tc 35/; of its normal footi^. Koyyever, one large boiler manuiacttirer states: "The demand is far from its normal footing there are mCHy e:.eellcnt inquiries for prices, hut aft^r trices ci*e fur nished there is a tendency to hold back placing-* cr^rs, ija^is^ it difficult to obtain business.** A lr^?e rsnuf acturer aljdtaz estimates that the demmd is only about o^ ne^n&^l, and another states tlK t he expects it to be nor r ^ f t!iin sirty cays* Hardware dealers report th'^ r^ir business is practically normal. A large depart^^nt store also states, tlv t tte decand is A lar^e 7^10lesale? of dir-- t*oods states ^ ^ the deexand for his groods has resumed its serial footing to tlie e tent cf fron .60% to 70%* Another cry ^oods house states tliat the voi^-aae of business la its consmnity is above ncra^l ci prt-^/ar average, althou^i soa^e^i t lees than for the cor responding period of 1918. A Irr^e electrical mruiuf^LOcuring canpany states that the denxmd is non^s.1. The millinery demQ^d iv-r ^een favorably affected by the termination of the war* A lar^e wholesale di i^ comerTi states that its sales during January t?ere the largest In its history* The demand for lumber is reported to be much below normal, and tha de^ar'i -r paper is said to be about 80% of noraial. ^VH'T SOCIAL DIF ICULTIB3 ARE 3 K i m E l i C O ^ K ^ Reports froas the various lines of industries in this district indicate that the following the sain difficulties beir en.?oun*L.ered: (1) Tendency on the part of buyers to wait for reducel prices: (2) i?i h cost of labor and the more or less unsettled labor conditions: (3) ^ir<-.ed decli'te in Y^rice of cotton; (4) lack of building and coDstrnctior -70rh, (S) sltrr transportation A large aCHR flour ?d.ll states that prefc-reY<ce is for* the esport of wheat instead of flojr, and tjiis control of the e xport flcar trr^Le is its special difficulty. ViUS IS THE OUTLOOK FCH 3U )I^13C 3C.:H DQl^^TIC AJ3 31 PORT Reports from practically all lines of ind^-at^iec in t^ir rictrict ex press the oe^ief taat doo^estic business Trill show a healthy increase in the near future* but that its full development will he gradual* A lar-ps iron and steol manufacturer states that domestic business gill he ^ o d after pri ces have declines to normal. A lar^e paper company states: "We anticipate good demand lor both domestic ay^d ^Q^ort trade, because in both cases orders have been held up for several months, thus accumulating a demand." Efforts - are being; made in this district to develop foreign trade, and reports indicate that the outlook is favorable. 3RHP 13 THU KREVAILINGT3H3 OF 4., ^ 5he present prevailing tone of business sentiment in this district is one of conservative optimism. Business men, as a. r le, ^re looH?^ to the future in ccnfidenoe. An iron -nd steel manufacturer states that /' / "After a general readjustment in price of rsur materials and labor, business will ce ^ uOilej' ^Hwfaether strtes? "The prevailing tone /' 0^ business sentiment is an clen^ent of doubt as to wix*t the future holdsg 4&1 manufacturers are Pfroid of the hi^h cost cf laiior Mid 3re tlierefore reluctant to place an order for mtcrial, bein^ unable to determine whether / is going to be sa imDrover^nt cr not, and are therefore operating } conservatively." A di*y ^oo&s ccm?)any reports: "Buiiinesc sentiment in our district slinws utmost corfidenoe. OTercoedn^ prevailinj timidity only ob stacle to assumption of a good vclume of business." saw The # --^iae^President of a layge hardx^re coc^ny,^o is f ^ i l i w with trade, eon% dltions in this district states^ ^.Satae condi tiens ^sill continue for 3 0 to ^ 60 dnys^' ^ ' '"s. -- -
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