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MONTHLY REVIEW Of Agricultural, Industrial, Trade and Financial Conditions in the Eighth Federal Reserve District RELEASED FOR PUBLICATION ON THE MORNING OF FEBRUARY 28, 1938 FEDERAL RESERVE District Summary Agriculture: Winter wheat acreage sown.. Fall 1937 comp, with 1936 (1927-31 Av.) ..—13.7% +33.2% Jan. 1938 comp, with Dec. 1937 Jan. 1937 Livestock: Receipts at National Stock Yards.....+ 8.9% Shipments from aforesaid Yards...... + 4.9 Production and Distribution: Sales by mfrs. and wholesalers...... ....+34.4 Department store sales.......................—52.8 Car loadings......................................... + 4.4 — 2.9% + 5.2 — 9.3 + 4.0 — 17.3 Building and Construction: Bldg. permits, incl. repairs j C o ^ ^ ef —38 5 Value construc. contracts awarded_— 5.4 Miscellaneous: Commercial failures j L;Xilitires^”l ' i 76!o Consumption of electricity................. — 9.7 Debits to individual accounts............ —11.8 ,, , T» 1 24 —27.2 +ll'l — 19.5 — 1.6 Feb- l6 >*38 comp, with Member Banks (24) : Jan. 19/38 Feb. 17/37 Gross deposits......................................+ 0.2% — 5.7% Loans.................................................... — 2.8 +10.7 Investments....................................... .— 0.02 — 18.8 H ILE general business in the Eighth Dis trict during January and the first weeks of February continued the downward trends which marked the closing quarter of 1937, and were present throughout the country, available statistics and information reflect more gradual declines and in some instances stabilization at the lower levels, both with reference to volume of business transacted and prices. During the first half of January the rate of operations in some industries was moderately in creased from depressed levels in late December and distribution of merchandise through retail channels also turned slightly upward. Through the entire area retail trade was handicapped by unseasonably warm weather, accompanied by rains in many sec tions, and these conditions extended well into Feb ruary. The effect was particularly marked in the movement of heavy apparel, fuels, certain drugs and chemicals and other winter goods. Decreases in sales volume extended as well to wholesaling and jobbing lines investigated by this bank, all of which, with the exception of electrical supplies, reported a re duced volume of sales in January as compared with a year and two years earlier. W BANK OF S T. LOUIS Inventories of merchandise in the hands of dis tributors are as a rule of moderate proportions, which fact has been emphasized in the immediate past by numerous orders specifying prompt ship ment. This is true particularly of nondurable goods, notably dry goods, shoes, groceries, apparel and drugs. There is a general disposition, however, to purchase only sufficient goods to fill immediate or definite prospective requirements. With an insignifi cant number of exceptions, the volume of advance orders on books of wholesalers reporting to this bank as of February 1 was measurably below that of a year ago, and the average for the date during the past several years. In turn this attitude of hesitancy has ramified to manufacturers, who are making up only limited quantities of their products for which they have not actual orders. Commitments for raw and semi-finished materials are universally reported on an extremely conservative scale. Activities in the iron and steel industry in this area developed moderate betterment during January as contrasted with December, but as a whole were considerably below the average in other recent months. Unfilled orders were further reduced, de spite small shipments, and new business is being sparingly placed. Miscellaneous demands predom inate in current orders, revival of purchasing by the chief consuming groups having failed to appear. At mid-February steel ingot production was at 27 per cent of capacity, which compares with 21 per cent during January and 15 per cent in the late December. Demand for building materials continues dull. Reflecting reduced industrial activities and smaller demands for heating purposes incident to the mild winter, production of bituminous coal at district mines in January was smaller by 22 per cent and 18 per cent, respectively, than a month and a year earlier. Employment and payrolls receded fur ther, with decreases extending to virtually all in dustries. Taken as a whole the agricultural situation in the district during the past thirty days underwent no changes of moment as contrasted with the simi lar period immediately preceding. Weather condi Pagel tions during the winter have been in the main fav orable for growth and development of fall sown crops. Precipitation has been abundant and well distributed, with the result that soil conditions are more favorable than has been the case in a number of years. Considerable progress has been made in preparing for planting spring crops, but acreage in tentions and farm plans generally are more uncer tain than is usual for this season, owing to the de cline in prices of farm products and a disposition of farmers to await action on the Government’s agri cultural program. As reflected in sales of department stores in the principal cities, the volume of retail trade in January was 52.8 per cent less than in December and 4.0 per cent greater than in January, 1937. Combined sales of all reporting wholesaling and jobbing firms in January were 34.4 per cent greater than in De cember and 9.3 per cent less than in January a year ago. The dollar value of construction contracts let in the Eighth District in January was 5.4 per cent smaller than in December and 27.2 per cent below that in January, 1937. The dollar value of permits issued for new buildings in the chief cities in Janu ary was 42.7 per cent smaller than in December and 2.9 per cent larger than in January, 1937. According to officials of railroads operating in this district, freight traffic during January declined somewhat more than seasonally and total loadings were measurably smaller than for that month a year and two years earlier. The downward trend con tinued in the first half of February, with heaviest declines in the miscellaneous freight, merchandise L. C. L. and coal classifications. In only grain, grain products and livestock were increases recorded over a year ago. The increase in the movement of grain was accounted for partly by heavy forwardings of corn. After unbroken increases since October, 1935, passenger traffic of the reporting roads for the month of January showed a decrease as compared with a year earlier. The decrease is attributed to depression in general business. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in January was 10 per cent greater than in December and 12 per cent larger than in January, 1937. The heavy increase in the comparison with a year ago was caused by flood conditions ex isting during the earlier period. Quite generally through the district, reports relative to collections during the past thirty days reflect less favorable conditions than have obtained in recent months. Wholesale merchants report more numerous requests for extensions, and fewer cus tomers taking advantage of discounts. In the tobac Page 2 co districts, where marketing of the crop is nearing completion, liquidation with both merchants and country banks was in considerable volume. Retail ers in the large urban centers report payments spot ty, particularly with reference to goods purchased on installment. Reports of closer credit policies and more intensive collection efforts are received from a number of localities. Questionnaires addressed to representative interests in the several lines scat tered through the district show the following re sults : Excellent January, 1938......... 0.8% December, 1937........ . 2.0 January, 1937......... 2.5 Good 34.8% 33.8 46.4 Fair Poor 48.7% 44.0 40.6 15.7% 20.2 10.5 Commercial failures in the Eighth Federal Re serve District in January, according to Dun and Bradstreet, numbered 50, involving liabilities of $454,000, which compares with 28 defaults in De cember with liabilities of $483,000 and 26 insol vencies for a total of $238,000 in January, 1937. ______Detailed Survey_____ MANUFACTURING AND WHOLESALING Lines of Commodities Boots and Shoes.................................. Drugs and Chemicals......................... Electrical Supplies.............................. Furniture.............................................. All Above Lines.............................. Net Sales January, 1938 comp, with Dec. 1937 Jan. 1937 + 89.6 % — 1.5% — 8.7 — 4.6 — 25.2 +25.5 + 8.5 — 28.4 — 31.4 — 28.3 — 11.2 — 15.7 — 7.4 +24.3 + 34.4 — 9.3 Stocks Jan. 31, 1938 comp, with Jan. 31, 1937 + 21.8 % — 1.9 — 12.3 +24.1 + 64.0 — 14.8 — 7.2 + 8.7 Automobiles — Combined passenger car, truck and taxicab production in the United States in Janu ary totaled 210,450 against 498,721 in December and 380,055 in January, 1937. Boots and Shoes — The increase in sales from December to January, shown in the above table, was seasonal, but about one-third greater than has been the experience in recent years. The volume of orders for prompt delivery has increased somewhat since February 1, but advance purchasing for late spring and summer distribution is backward. While no specific changes in prices of finished goods were announced, the trend was lower in sympathy with raw materials. Clothing — Sales volume declined noticeably during the closing months of 1937, and while sea sonal factors helped to hold up trade in January the total for that month was about two-thirds smaller than a year earlier. Price and style uncertainties, together with the recession in general business, have adversely affected advance buying. Drugs and Chemicals — As has been the case since the early fall, decreases in sales in this classifi cation during January as compared with a year earli er were accounted for to a large extent by a reduc tion in demand for heavy drugs and chemicals by the general manufacturing trade. Movement of sea sonal merchandise was adversely affected by the unusually mild winter. Dry Goods— Sales of the reporting interests showed less than the usual seasonal betterment from December to January, and the total for the month was the smallest since 1933. Reports covering the first half of February reflect a moderate pickup in spot orders. Price trends were lower. Electrical Supplies — The decreases from De cember to January was generally distributed through the entire line, but most pronounced in radio materials, building installations and house hold appliances. Furniture — Production, which receded sharply in December, continued to decline in January. Pur chasing by retailers is mainly on an immediate re quirement basis, with large stock orders almost entirely absent. Groceries— January sales of the reporting firms were the smallest for the month since 1933. Slack purchasing is attributed to uncertainty relative to prices and the general business recession. Invento ries of certain lines, notably canned goods, are re ported in considerably larger volume than a year ago. ' Hardware — The movement of seasonal mer chandise of all descriptions has been adversely af fected by the unusually high temperatures which have prevailed through most of the winter. Build ers’ tools and hardware, paints, varnishes and kin dred lines continued quiet, and demand for com modities used chiefly in the rural areas was reported the smallest for this particular season in a number of years. Iron and Steel Products — In contrast with the very low rate of activities in December, moderate improvement in the iron and steel industry in this district developed during January and the first half of February. The volume of business in virtually all branches of the industry, however, was substan tially less than during the corresponding period a year ago. Orders placed for new products, including iron and steel castings, were small in the aggre gate, and represented almost exclusively materials needed for immediate use. In numerous instances rush specifications accompanied new business placed, indicating depleted consumer inventories. In the case of the most important consuming groups, including railroads, automobiles and the farm im plement industry, purchasing policies continue ultra conservative. Takings by the carriers consisted chiefly of shop and repair items, orders for equip ment being practically nil. This development was felt keenly by steel casting plants in the area, which are largely dependent on the railroads for business. Outlet through the building industry continues nar row, which fact was reflected in an operating rate at fabricating yards of only 20 to 30 per cent of capacity. Despite reduced schedules and relatively light shipments, backlogs were further reduced. January business of warehouse and jobbing interests was reported in slightly larger volume than during the preceding month, but approximately one-fourth smaller than in January, 1937. Individual orders, while fairly numerous, are small in size, resulting in reduced profit margins. Since the closing week of January, the sheet situation has improved slightly, due to freer specifications. Activities in the stove industry continue at a low ebb, consisting mainly of repair work and preparation of patterns for new models. Relatively the highest rate of operations is at farm implement and tractor plants. Purchasing of tin plate is in considerably smaller volume than a year ago, packers of food being disposed to await developments before making commitments. Opera tions at steel mills producing ingots were at 27 per cent of capacity at mid-February, against 21 per cent in January and 15 per cent at the close of 1937. January deliveries of pig iron to district melters were somewhat larger than in December, but the movement represented chiefly tonnage carried over from last year, new buying being confined to occa sional small lots for prompt shipment. Scrap iron prices eased in early February, under lack of de mand and requests of mills and foundries to hold back deliveries on outstanding contracts. Produc tion of pig iron for the entire country in January, according to the magazine “ Steel” , totaled 1,439,191 tons, the smallest for any month since December, 1934, and comparing with 1,503,474 tons in Decem ber, and 3,219,741 tons in January, 1937. Steel ingot production in the United States in January amounted to 1,732,266 tons, against 1.472,241 tons in December, and 4,724,894 tons in January, 1937. TR A N SPO R TA TIO N The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 78,568 loads in January, against 75,273 loads in December and 94,928 loads in January, 1937. During the first nine days of February the inter change amounted to 22,682 loads, which compares with 20,832 loads during the corresponding period in January and 30,361 loads during the first nine days of February, 1937. Passenger traffic of the Page 3 reporting roads in January fell 6 per cent in number of passengers carried and 4 per cent in revenue as compared with the corresponding month a year ago. For the entire country loadings of revenue freight for the first five weeks this year, or to February 5, totaled 2,821,163 cars, against 3,385,676 cars for the like period in 1937 and 3,054,413 cars in 1936. Esti mated tonnage of the Federal Barge Line between St. Louis and New Orleans in January was 176,000 tons, against 159,680 tons in December and 79,418 tons in January, 1937. The large increase in January over a year ago was accounted for largely by flood conditions during the earlier period which seriously hampered navigation. R E TA IL TRAD E Department Stores — The trend of retail trade in the Eighth District, as reflected in statistics of department stores in the principal cities which re port to this bank, is shown in the following compar ative statement: _______Net Sales_____ January, 1938 comp, with Dec. 1937 Jan. 1937 El Dorado, Ark........... — 55.2% + 6.3% Ft. Smith, Ark............. — 61.7 — 2.6 Little Rock, Ark........... — 62.0 — 3.4 Louisville, K y............... — 58.2 + 51.4 Memphis, Tenn............ — 57.5 + 3.6 Pine Bluff, Ark........... — 61.9 — 12.2 Quincy, 111..................... — 64.3 + 6.2 St. Louis, M o............... — 48.2 + 0.2 Springfield, M o............. — 56.6 — 0.8 All Other Cities........... — 67.9 — 12.1 8th F. R. District........ — 52.8 + 4.0 Stocks on Hand Jan. 31, 1938 comp, with Jan. 31, 1937 + 5.7% + 0.5 — 5.5 — 14.0 + 1.2 — 0.7 + 16.4 — 7.2 — 6.8 — 3.8 — 5.8 Stock Turnover Jan. 1, to Jan. 31, 1938 1937 .22 .21 .19 .19 .19 .19 .31 .19 .25 .25 .16 .16 .18 .20 .31 .30 .17 .17 .17 .22 .28 .27 Percentage of accounts and notes receivable outstanding January 1, 1938, collected during January, by cities: Installment Excl. Instal. Accounts Accounts El Dorado................ % ............71.7% Fort Smith............................... 34.9 Little Rock....... 14.1 ............34.2 Louisville ........ 11.2 ............50.9 Memphis .......... 22.6 ............43.0 Installment Excl. Instal. Accounts Accounts Pine Bluff.................%............36.6 Quincy ..................................... 50.5 St. Louis............18.6 ............55.2 Springfield ............................... 25.6 Other Cities.......12.2 ............37.5 8th F. R. Dist..l7.0 ........... 49.5 Specialty Stores — January results in men's furnishings and boot and shoe lines are shown in the following table: Stocks Stock _______Net Sales_____ on Hand Turnover January, 1938 Jan. 31, 1938 Jan. 1, to comp, with comp, with Jan. 31, Dec. 1937 Jan. 1937 Jan. 31, 1937 1938 1937 Men’s Furnishings....... — 56.1.% + 5.6% — 1.4% .18 * .18 Boots and Shoes........... — 52.2 + 4.9 + 4.8 .38 .39 Percentage of accounts and notes receivable outstanding January 1, 1938, collected during January: Men Furnishings....................... 33.9% Boots and Shoes....................41.1% MINERALS Coal — Effects of the depression, which began last autumn, became increasingly apparent in the record of bituminous coal distribution during Janu ary and the first half of February, most of the major movements turning downward during that period. Reduced industrial demand in its effect on produc tion in this area was accentuated by smaller con Page 4 sumption for heating purposes occasioned by the unusually mild winter. Estimated production of soft coal in the United States in January was only 30,173,000 tons, as against 36,226,000 tons in Decem ber and 40,940,000 tons in January, 1937. Output at mines in this general area in January fell 22 per cent and 18 per cent, respectively, below a month and a year earlier. Illinois mines produced 4,230,976 tons in January, which compares with 5,221,852 tons in December and 5,279,062 tons in January, 1937. There were 140 mines in operation in January and 35,754 men on payrolls, against 152 active mines and 37,006 operatives in December. Petroleum— In 1937 thirteen new oil pools were opened in the Central Coal Basin area of Illinois. In the course of the year 157 wells were completed, of which 59 were dry wells. Total oil production in Illinois for the year, according to the U. S. Bureau of Mines, was 7,426,000 barrels, against 4,475,000 barrels in 1936. Drilling and exploitation continues on a considerable scale in the new Illinois fields. In states including the Eighth District produc tion of crude petroleum in December was 4.5 per cent and 63 per cent greater, respectively, than a month and a year earlier; total output for 1937 was larger by 19 per cent than in 1936. Detailed figures by states are given in the following table: (In thous. Production of bbls. ‘ Dec.’ 37 Nov.’ 37 Dec.’ 36 1937 Arkansas ....1,309 ’ 1,286 828 11,681 Illinois ..... 1,085 990 392 7,426 Indiana ..... 73 66 71 826 Kentucky ... 437 436 493 5,484 Totals....2,904 2,778 1,784 25,417 1936 10,469 4,470 820 5,633 Stocks Dec.’ 37 Dec.’ 36 2,541 3,514 10,913 11,260 2,962 2,447 953 823 21,392 15,369 18,044 AGRICULTURE Total cash income from the sale of farm prod ucts and from Government payments in states in cluding the Eighth District in 1937 is estimated by the U. S. Bureau of Agricultural Economics at $1,713,014,000, an increase of $92,949,000, or 5.7 per cent over the preceding year. The greater part of the increase over 1936 was due to income from crops. While prices of virtually all farm products declined drastically during the closing months of the year, the largely increased production of all the principal crops more than counterbalanced the smaller returns per unit received. The estimates of cash income from agriculture indicate the amount of money available to farmers for paying taxes and interest and for purchasing commodities and services used in operating their farms and in supporting their families. The value of products produced and consumed on the farm as food or fuel is an addition to the cash income, and the total from these is included in grass income. The analysis of income, however, is not complete until expenses of production are subtracted from gross income, to obtain the farmer's net income. Detailed figures by states are given in the following table: 1937 _________ Cash in Income from come and (In thousands Income livestock Cash Govt. farm Govt. and its dollars) from income payments payments crops products Indiana ....... ,$ 81,325 $209,525 $290,850 $ 9,712 $300,562 522,001 302,300 506,600 15,401 Illinois ......... , 204,300 284,601 13,376 Missouri ......... 74,100 197,125 271,225 162,197 11,347 67,500 150,850 Kentucky .... , 83,350 137,104 8,404 128,700 Tennessee ...., 70,850 57,850 168,036 11,611 26,275 156,425 Mississippi ..... 130,150 138,513 11,463 26,750 127,050 Arkansas ....., 100,300 Totals..... 744,375 887,325 1,631,700 1936 Cash income and Govt. payments $279,209 488,869 270,564 129,708 120,365 189,014 142,336 81,314 1,713,014 1,620,065 General Conditions— Weather conditions through out the district during the late fall and to mid-Feb ruary have been variable, but in the main favorable for growth of fall planted crops and progress of all descriptions of agricultural operations, including feeding of livestock for market and dairying. Precip itation has been abundant and well distributed, and soil conditions are the best at this particular season in many years. Loss of moisture incident to succes sive years of drouth has been largely made up, and handicaps which have beset farmers in recent sea sons should be to a considerable extent eliminated at the time of spring planting. In the northern sections preparation of the soil for planting spring crops has made considerable progress, and except where rains interfered with field work, these operations are well abreast of the seasonal schedule. In the cotton sections prepara tions are not so far advanced, there having been a general disposition on the part of planters to await definite announcement of the Government farm pro gram before proceeding with their work. Generally the supply of farm labor is in excess of requirements, with wage scales lower than those prevailing at this time a year ago. Corn — Due to the heavy production, more corn has been fed to livestock this season than during the preceding several years. In all the principal pro ducing sections there is an abundance of choice seed corn for spring planting. Stocks of corn on farms as of January 1 in Eighth District states totaled 708,909,000 bushels, against 327,344,000 bushels on the same date in 1937 and the 5-year average (19281932) of 479,513,000 bushels. Cotton — Owing to unfavorable weather, uncer tainty relative to acreage intentions and a disposi tion to await action on the Government’s 1938 farm program, preparations for the new crop at midFebruary were generally behind those at the same time a year ago. Quite generally in the cotton areas supplies of feed and forage are in liberal volume, and reports from many sections indicate intentions of farmers to plant large acreages of corn, beans and other feed and forage crops this season. In states of this district ginnings of the 1937 crop to January 16 totaled 5,108,996 bales, as compared with 3,834,772 bales a year earlier. Of the quantity ginned this season, 1,352,104 bales were received by the Commodity Credit Corporation, through Janu ary 27, through loans averaging 8.38c per pound. Despite a continued quiet demand and decline in prices of other commodities, prices of raw cotton were well sustained. In the St. Louis market the middling grade ranged from 7.92c to 8.75c per pound between January 15 and February 15, closing at 8.75c on the latter date, which compares with 8.65c on January 15 and 11.45c on February 15, 1937. Re ceipts at Arkansas compresses between August 1, 1937, and February 4, 1938, totaled 1,673,962 bales against 1,250,502 bales for the same period a year earlier. Stocks on hand as of February 1 totaled 943,417 bales, against 949,708 bales on January 7, and 532,360 bales on the corresponding date in 1937. Of the cotton on hand as of February 4, 418,264 bales were in the 9-cent loan. Livestock—The unusually mild winter has been beneficial to the livestock industry in this general area and reports indicate that the condition of herds is universally high, with a minimum of losses from disease. Despite the sharp break in prices the move ment to market was about the expected seasonal proportions. Demand for stocker and feeder cattle continued active. According to the annual survey of the U. S. Department of Agriculture, the aggregate number of livestock on farms in states including the Eighth District on January 1 was approximately 1.8 per cent larger than at the beginning of 1937. Owing, however, to the smaller average prices the estimated value of these animals on January 1 was .6 per cent smaller than a year earlier. The total of cattle, sheep, swine, horses and mules at the opening of the year was 34,505,000 head, having an estimated value of $960,821,000, which compares with 33,898,000 head, with value of $996,362,000, on January 1, 1937. There were slight decreases in the number of horses and mules, and increases in the other three species. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: Receipts_______ Jan., Jan., Dec., 1938 1937 1937 Cattle and Calves...... 99,078 104,406 119,050 ...251,480 223,373 271,063 7,576 2,160 Horses and Mules... 7,445 62,143 42,020 ______ Shipments Jan., Dec., Jan., 1937 1937 1938 59,911 71,630 60,508 153,215 136,512 146,706 7,317 2,304 7,200 5,302 11,027 10,162 Totals..................... 426,938 392,082 439,578 231,353 220,608 219,833 Fruits and Vegetables — Available reports from scattered sections of the district indicate that fruit trees came through the winter to mid-February in excellent condition; however, the mild temperatures Page 5 of late January and early February caused prema ture development of buds and foliage generally, and some apprehension was felt for the safety of peaches and other fruits should extreme low temperatures follow. Indicated acreage of strawberries in states including the Eighth District in 1938 is 54,060 acres, which compares with 41,200 acres in 1937 and the 5-year (1933-1937) average of 59,880 acres. Farmers in the chief producing sections have taken good care of their fields, and beds are in much better condition than at the same time last year. Intentions to plant white potatoes indicate that in the early states, Mis sissippi, Arkansas, Kentucky and Missouri, acreage will be 17,600 acres or 11.6 per cent less than in 1937, but 7.3 per cent larger than the 5-year (1928-1932) average. Tobacco — The 1937 burley crop has been prac tically all sold; as of mid-February only three mar kets remained open, and these were expected to close before the end of the month. Prices were very irregular and sales were mainly of left-over and in ferior grades. Notwithstanding the sharp recession in prices since the first of the year, gross cash re ceipts are expected to equal, if not exceed the total for the 1936 crop, due to the fact that the 1937 crop turned out larger than anticipated. For the 1936 crop the average price for burley reached a high average of $35.50 per cwt. The average price for the 1937 crop was $22.00 per cwt. or $13.50 below that of the preceding year. The one sucker and air cured markets are also terminating their activities for the season. Recent prices were irregular and tending downward, with an average about $8.01 per cwt. In the western dark fired districts sales have been heavy, with prices holding firm at an average around $8.10 per cwt. COM M ODITY PRICES Range of prices in the St. Louis market between January 15, 1938 and February 15, 1938, with clos ing quotations on the latter date and on February 15. 1937, follows: Close H igh W heat *M ay ................. ...per bu..$ .98 *Tuly ................ ■93'A *S ept.................... .93 *N o. 2 red winter “ 1.05 *N o. 2 hard 1.06 C om .60^4 * J uly ................. , , “ .62 *S ept.................... .62 “ *N o. 2 mixed .. .63 *N o. 2 white .. .64 Oats “ 343^ *M ay ................. *July ................. .3 2 ^ *S ept.................... .33 s/8 “ *N o. 2 white .. .36 Flour Soft patent...... ...per bbl. 5.25 “ Spring “ ....... 6.80 M iddling Cotton. ..per lb. .0875 H ogs on H o o f..... ..per cw t. 9.20 • ^Nominal quotations. Page 6 L ow $ .93*4 .88 .88 Feb. 15, 1938 $ .9314 .88 .88 Feb. 15, 1937 $ 1.02 .8 8 ^ .8 7 ^ 1 .0 8 ^ 1.10 ■9 8 A .99 A .98 A ■99'A •58^2 .59 .595/6 .58 .59 .59 .60 .6 0 ^ .58 .59 .33'A •30^ .3 0 ^ .3 0 ^ .3354 .31 ^2 .31A .35 4.80 6.10 .0792 4.80@ 5.05 6.10@6.45 .0875 5.30@ 6.00 6.90@ 7.05 .1145 6.15 6.75 @ 8.75 9.15@11.10 .6 1 A .6 2 H .62M .66 A ■69 A .33 Winter Wheat — Stocks of wheat on farms in states including the Eighth District on January 1 totaled 28,265,000 bushels, against 14,383,000 bushels on the same date in 1937 and the 5-year average (1928-1932) of 22,814,000 bushels. CONSUMPTION OF ELECTRICITY Public utilities companies in six large cities of the district report consumption of electric current by selected industrial customers in January as being 9.7 per cent less than in December and 19.5 per cent smaller than in January, 1937. Detailed figures for January follow : (K .W .H . inthous.) No. of Jan., Custom1938 ers K .W .H . Evansville .... 40 2,071 Little Rock. . 35 1,749 6,748 Louisville ... , 82 , 31 2,336 Pine Bluff.... 20 844 194 17,396 402 31,144 Dec., 1937 K .W .H . 3,049 1,931 7,967 2,338 974 18,248 Jan., 1937 K .W .H . 2,883 1,903 7,624 2,623 1,026 22,649 34,507 38,708 January, 1938 compared with Jan. 1937 Dec. 1937 — 32.1% — 28.2% — 8.1 — 9.4 — 11.5 — 15.3 — 0.1 — 10.9 — 13.3 — 17.7 — 4.7 — 23.2 — 9.7 — 19.5 The following figures compiled by the Federal Power Commission show kilowatt production for lighting and industrial purposes for the country as a w hole: By water power December, 1937............... 3,556,872,000 November, 1937............... 3,629,595,000 December, 1936............... 3,618,422,000 By fuels 6,172,855,000* 5,922,145,000 6,859,245,000 Totals 9,729,727,000 9,551,740,000 10,477,667,000 BUILDING The dollar value of building permits issued for new construction in the five largest cities of the dis trict in January was 42.7 per cent smaller than in December and 2.9 per cent larger than in January, 1937. According to statistics compiled by the F. W . Dodge Corporation, construction contracts let in the Eighth Federal Reserve District in January amounted to $11,986,000 which compares with $12,676,300 in December and $16,458,600 (revised figure) in January, 1937. Building figures for Janu ary follow : (Cost in thousands) New Construction Permits Cost 1938 1938 1937 Evansville.... 6 17 $ 28 $ 16 10 25 Little Rock 205 38 54 Louisville.... 150 124 106 110 122 260 Jan. Totals.. 276 353 1937 109 44 150 132 189 642 624 Repairs, etc. Permits Cost 1938 1937 1938 1937 44 $ 33 $ 35 60 22 20 40 56 50 52 25 55 117 104 226 111 114 272 67 117 405 280 445 490 LIFE INSURANCE Sales of new, paid-for, ordinary life insurance in states including the Eighth District during January, the preceding month, and a year ago, are shown in the following table: (In thousands of Jan., doHars) 1938 Arkansas ............................. $2,939 $ Illinois ................................. 42,417 Indiana ................................ 11,570 Kentucky ............................ 6,543 Mississippi ........................... 2,524 Missouri ............................... 16,414 6,191 Tennessee ............................ Dec., 1937 4,321 $ 51,329 15,209 7,109 4,106 19,565 8,524 Jan. 1938 Jam, comp, with 1937 Jan. 1937 3,918 — 25.0% 45,583 — 6.9 12,232 — 5.4 4,918 + 33.0 3,250 — 22.3 16,802 — 2.3 7,232 — 14.4 Totals ................................ 88,598 United States....................... 493,815 110,163 634,470 93,935 547,883 — 5.7 — 9.9 MONEY AND BANKING During the past thirty days liquidation of loans at commercial banks continued in considerable vol ume. Settlements were well diversified, both with reference to geographic location and the several borrowing groups. Demand for credit from mercan tile and industrial sources, while showing a sharp recession from the peak levels last fall, was still in measurably larger volume than at the corresponding period in 1937. Quite generally through the district, but more particularly in the tobacco areas, country banks further reduced their indebtedness with city correspondents and many of these banks were seek ing investment for surplus funds. There was about the expected seasonal reduction of loans based on livestock. Reflecting large supplies of corn and other feed crops, however, demand for funds to condition cattle and hogs for market continues active. In some sections of the district there has been a moderate quickening in inquiries for building and real estate loans in anticipation of early spring requirements. Interest rates remained practically unchanged. Member Banks — Total loans and investments of reporting member banks in the leading cities de creased 1.4 per cent in the four-week period ended February 16. The decrease was accounted for almost entirely in the loans item, there being only a small fractional recession in investments. As compared with a year earlier, the volume of loans at the end of the period was 10.7 per cent greater and invest ments 18.8 per cent smaller. Gross deposits declined sharply during the second week in February, as compared with a year earlier, but on February 16 were about the same level as a month earlier. Re serve balances were 3.6 per cent higher. Statement of the principal resource and liability items of the reporting member banks follows : (In thousands of dollars) Feb. 16, 1938 Loans— total ............................................................ $311,199 Commercial, industrial, and agricultural: On securities............... ................................ 48,726 Otherwise secured and unsecured........... 143,566 Open market paper...,.................................... 10,484 Loans to brokers and dealers....................... 4,274 Other loans to purchase or carry securities 12,719 Real estate loans............................................. 46,905 Loans to banks................... ............................ 6,556 Other loans: On securities............................................... 11,233 Otherwise secured and unsecured........... 26,736 Investm ents— total Jan. 19, 1938 Feb. 17, 1937 $320,073 $281,113 50,469 148,101 10,566 4,398 12,538 46,763 7,267 * * * 5,401 * 43,690 5,368 11,393 28,578 * * ............................................... 334,092 334,149 411,489 U. S. Govt, obligations................................. 190,810 Obligations guaranteed by U. S. Govt...... 47,957 Other securities............................................. 95,325 192,458 47,441 94,250 239,842 59,171 112,476 906,012 963,552 Gross deposits......................................................... 908,191 Demand deposits............................................. 718,002 715,679 775,717 Time deposits................................................. 190,189 190,333 187,835 Borrowings ............................................................................................................... Above figures are for 24 member banks in St. Louis, Louisville, Memphis, Little Rock and Evansville. Their resources comprise approxi mately 61.6% of the resources of all member banks in this district. "Comparable figures not available. Aggregate amount of savings deposits held in selected banks on February 2 was 0.1 per cent small er than on January 5 and 3 per cent greater than on February 3, 1937. At downtown St. Louis banks interest rates charged as of the week ended February 15 were as follows: Customers’ prime commercial paper, \y2 to 5 ^ per cent; collateral loans, 2 to 6 per cent, loans secured by warehouse receipts, l]/2 to Sy2 per cent; interbank loans 3y2 to 4 per cent and cattle loans, 4 to 6 per cent. Federal Reserve Operations — The volume of the major operations of the Federal Reserve Bank of St. Louis (including its Louisville, Memphis and Little Rock branches) during January, 1938, is indicated by the following figures: Checks (cash items) handled.............................. Collections (non-cash items) handled............... Transfers of funds.................................................. Currency and coin received and counted......... Rediscounts, advances and commitments......... New issues, redemptions, and exchanges of securities as fiscal agent of U. S. Govt., etc. Bills and securities in custody— coupons clipped Pieces Amounts 4,584,079 $1,021,805,024 104,081 31,134,509 5,338 290,263,669 25,192,588 39,613,931 33 2,187,230 12,466 16,072,324 14,131 ............................ Changes in the principal assets and liabilities of this bank are shown b elow : Feb. 18, (In thousands of dollars) 1938 Industrial advances under Sec. 13b..... $ 202 Other advances and rediscounts........... 409 2 Bills bought (including participations) U. S. securities......................................... 114,478 Total earning assets................... Total reserves.................................... Total deposits................................... F. R. Notes in circulation............ Jan. 18, 1938 $ 235 57 2 114,445 Feb. 18, 1937 $ 351 63 86 116,054 . 115,091 114,739 116,554 , 291,918 224,298 178,074 302,715 232,270 178,475 267,850 203,518 178,0.59 485 326 1,295 72.5% 73.7% 70.2% Industrial commitments under Sec. 13b1 Ratio of reserve to deposit and F. R. Note liabilities.......... Following are the rates of this bank for accom modations under the Federal Reserve A ct: (1) Rediscounts and advances to member banks, under Section 13 and 13a......................................................... 1*4% per annum (2) Advances to member banks, under Section 10b........... 2 % per annum (3) Rediscounts, purchases, and advances to member banks, nonmember banks and other financing in stitutions, under Section 13b: (a) On portion for which such institution obligated....3 *2% per annum (b) On remaining portion...............................................4 % per annum (4) Commitments not exceeding six months to member banks, nonmember banks and other financing in stitutions, to rediscount, purchase, or make ad vances, under Section 13b........................................... *4% flat (5) Advances to established industrial or commercial f 4 % to businesses, under Section 13b................................. 1 5 % per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured by direct obligations of United States under Section 13.......4 % per annum Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: (In thousands Jan., of dollars) 1938 East St. Louis and Natl. Stock Yards, 111..$ 30,604 El Dorado, Ark.... 4,950 Evansville, Ind.... . 28,633 Fort Smith, Ark... . 12,654 Greenville, Miss... 5,341 Helena, Ark.......... . 1,831 Little Rock, Ark... . 32,297 Louisville, K y .... . . 168,585 Memphis, Tenn.... . 128,600 Owensboro, Ky.... 6,698 Pine Bluff, Ark.... 8,499 Quincy, 111............ 7,469 St. Louis, M o...... . 543,700 Sedalia, M o.......... 1,910 Springfield, M o.... . 13,458 Texarkana,Ark.-Tex. 7,822 (Completed February 23, 1938) ..1,003,051 Dec., 1937 Jan., 1937 Jan. 1938 comp, with Dec. 1937 Jan. 1937 $ 34,285 5,820 32,862 13,682 6,258 2,533 38,364 176,187 140,385 7,021 10,613 8,366 636,440 2,337 13,740 8,422 $ 34,026 4,438 31,013 12,634 6,249 1,734 36,117 154,486 138,361 7,003 8,085 7,464 549,520 2,544 16,056 9,163 — 10.7% — 14.9 — 12.9 — 7.5 — 14.7 — 27.7 — 15.8 — 4.3 — 8.2 — 4.6 — 19.9 — 10.7 — 14.6 — 18.3 — 2.1 — 7.1 — 10.1% + 11.5 — 7.7 + 0.2 — 14.5 + 5.6 — 10.6 + 9.1 — 7.1 — 4.2 + 5.1 + 0.1 — 1.1 — 24.9 — 16.2 — 14.6 1,137,315 1,018,893 — 11.8 — 1.6 Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS BY BO ARD O F G O VERNO RS O F FE D E R A L RESE RV E SYSTEM The decline in business activity, which had been rapid during the last quarter of 1937, continued in January, but at a slower rate. IN D U S T R IA L PRODUCTION Production — Volume of industrial production, as measured by the Board’s seasonally adjusted index, was at 81 per cent of the 1923-1925 average in January as compared with 84 per cent in December. Output of durable goods continued to decline, reflecting chiefly considerable decreases in production of automobiles and plate glass and a further decline in output of lumber. Steel ingot production increased somewhat, the output for January averaging 30 per cent of capacity. In the first three weeks of February, activity at steel mills showed little change at about 31 per cent of capacity, while production of automobiles was at a lower rate than in January. Index of physical volum e of production, adjusted for sea sonal variation, 1923-25 average = 100. B y months, Janu ary, 1934, through January, 1938. Latest figure January, 1938, 81. FACTORY EM PLO YM EN T AND PAYROLLS Indexes of num ber em ployed and payrolls, without adjust m ent for seasonal variation, 1923-25 average = 100. B y m onths, January, 1934 through January, 1938. Latest fig ures, January, 1938, em ploym ent 82.5, payrolls 71.1. In dexes com piled b y the U nited States Bureau of Labor Statistics. W H O LESALE P R IC ES Index com piled b y the U nited States Bureau of Labor Statistics, 1926 = 100. B y weeks, 1934 through week end ing February 19, 1938. Latest figure, all com m odities 79.4. MEM BER BANKS IN 101 LEADING C IT IE S BILLIONS OF DOLLARS u s gov't obligatk)NS (DIRECT AND GUARANTIEED) * COMMERCIAL LOA _ OTHER £SECURITIES — AND DEALERS ’34 1935 1936 1937 1938 W ednesday figures for reporting m ember banks in 101 leading cities. Septem ber 5, 1934, through February 16, 1938. Comm ercial loans, w hich include industrial and agri cultural loans, represent prior to M ay 19, 1937, so-called “ Other loans” as then reported. Page 8 In the textile industries, activity at silk and rayon mills in January showed a sharp rise from the low levels reached in December. At cotton mills, however, there was less than the usual seasonal increase and output of woolen products continued in small volume. Shoe production, which also had been at a low rate in December, increased considerably in January, and activity at meat-packing establishments rose somewhat further. Output of tobacco products remained at a high level, while sugar meltings declined. At mines, bituminous coal production was con siderably smaller than in December, and there was also a reduction in output of nonferrous metals. Petroleum production continued at the high level of other recent months. Value of construction contracts awarded in January was smaller than in December and somewhat below the level maintained during the last four months of 1937, according to figures of the F. W. Dodge Cor poration. Contracts awarded for public projects increased somewhat further, while awards for private work continued to decline, reflecting a further decrease in residential building and a sharp reduction in awards for factory construction. In the first half of February awards for private projects were at about the same rate as in January, while those for public work showed a sharp decline. Employment — Factory employment and payrolls declined substan tially further between the middle of December and the middle of Janu ary. In the durable goods industries, decreases in employment were general and were particularly large at factories producing automobiles, steel, and machinery. Employment in nondurable goods industries showed a somewhat smaller decline than in previous months. There was some increase in the number employed at shoe factories and little change in the food industries as a group, but in other nondurable goods industries employment continued to decrease. Employment on the rail roads, in mining, and in the construction industry also declined. Distribution — Department store sales showed a seasonal decrease from December to January, while sales at variety stores and mail order sales declined by more than the usual seasonal amount. Freight-car loadings continued to decline in January, reflecting prin cipally a reduction in shipments of coal. Commodity Prices — Prices of steel scrap and nonferrous metals declined from the middle of January to the third week of February, following some advance in December and the early part of January. There were further decreases in some other basic commodities, while prices of cotton and silk advanced. Livestock products continued down ward and a number of finished industrial products declined further. Prices of pig iron and most finished steel products have been reaffirmed for second quarter delivery. Bank Credit — During the first three weeks of February excess reserves of member banks were little changed from the level of $1,400,000,000 reached at the end of January, following the post-holiday return of currency from circulation. During January there were substantial reductions in commercial loans and brokers’ loans and moderate increases in investments at reporting member banks in 101 leading cities. In the first three weeks of February loans and investments of these banks showed little change. Money Rates — Rates on Treasury bills and yields on Treasury notes and bonds continued in February at the low levels reached in the latter part of January.
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