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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Morning Papers of February 28, 1942 FEDERAL RESERVE BANK OF ST. LOUIS C O U R T E S Y U N IO N E L E C T R I C C O . O F M O .. M E A D E PH O TO , , Bagnell Dam Lake of the Ozarks Missouri SUMM ARY OF EIGH TH DISTR ICT E IG H T H D istrict m anufacturing, prim ary dis tribution, and trade m aintained a high level of activity during January and early February. New plants moving into production, existing plants shifting to w ar output, and construction of addi tional w ar production facilities are the principal factors tending to raise the level of industrial activ ity. The expanding war* program is encroaching more and more on output of civilian goods, partic ularly durable consumers goods. Complete stoppage of refrigerator output early this spring may be ex pected to be followed by sharp curtailm ent in other durable goods lines for civilian use. T he D epart m ent of Commerce forecasts for 1942 a 15 per cent increase over 1941 in industrial production if the 1942 w ar production goals are attained. The entire advance will be concentrated in the w ar industries with 53 per cent of total output earm arked for war uses. Indicative of industrial gains the seasonally ad justed index of the Board of Governors of the Fed eral Reserve System reflecting the physical volume of industrial production rose to another new peak in January, standing at 170 per cent of the 19351939 average as compared w ith 167 in December and 166 in November. The January index was 21 per cent above a year earlier, w ith durable m anufac tures recording a 29 per cent gain in the year and non-durables a 16 per cent rise. W hile the seasonally adjusted index has been rising, actual physical pro duction as m easured by the unadjusted index has declined slightly from the high level of 167 reached in Septem ber and m aintained through November. The unadjusted index for December was 163 and increased to 165 in January. This figure m ay be expected to increase further as w ar production rises in coming months. Prim ary distribution in the E ighth D istrict in January recorded relatively large gains over Decem ber and a year earlier. The increases are a ttrib u t able prim arily to heavy m ovements of fuel, grains, finished and semi-finished m anufactures. Carloadings of all railroads operating in this district for the four weeks ending January 31 were 11 per cent and 16 per cent greater, respectively, than in the corres ponding periods a m onth and a year ago. Loads interchanged by the Term inal Railroad Associa tion for 25 connecting lines at St. Louis were 6 per cent above those in December and 25 per cent above January, 1941. F or the first nine days of February interchanges were 31 per cent above those of the comparable period a year ago. Tonnage moved by Page 2 the Federal Barge Lines on the M ississippi River between St. Louis and New Orleans during J a n uary was 33 per cent less than in December and 24 per cent less than in January, 1941. Retail distribution of m erchandise in January was at extraordinarily high levels. Sales at departm ent stores in the principal cities of the district were down much less than seasonally from December and were 39 per cent greater than in January, 1941. Gains from a year ago ranged from a low of 24 per cent in L ittle Rock to a high of 57 per cent in F ort Smith. Year to year comparisons for the previous three m onths have been running only about half of the January gain. This bank’s seasonally adjusted index of departm ent store trade for January stood at 138 per cent of the 1923-1925 average, the high est point for any January since the inception of the series, and only 3 points below the peak of 141 recorded in A ugust, 1941. The buying wave which accounted for these increases seems to have sub sided som ewhat in early February, as sales for the first two weeks in F ebruary exhibit smaller gains from a year earlier than in the m onth of January. Stocking up by consumers in anticipation of im pending shortages contributed heavily to the large increases of the past m onth, and buying was ex tended over a wide range of articles. This type of buying intensifies the problem of distributing cer tain products equitably and may lead to more in tervention in retail m arkets in the form of price control and rationing. W holesalers’ inventories for the past several m onths have been valued well above those held on comparable dates a year earlier, but since last sum m er have increased very little from m onth to m onth, thus reflecting some difficulty in obtaining goods, particularly durable goods. Stocks of wholesalers whose statistics are available to this bank in Ja n uary were 8 per cent above those in December and 30 per cent above a year ago. Sales in all lines were 12 per cent above December and 37 per cent greater than in January, 1941. Building in the E ighth D istrict as reflected by dollar value of perm its granted in the principal cities of the area declined 15 per cent from Decem ber to January and was 21 per cent below last Ja n uary. Dollar value of construction contracts let in the district was 32 per cent below December, but 12 per cent above a year ago. Consum ption of indus trial electric power in the m ajor cities of the district in January declined 3 per cent from the December level, but was 8 per cent above a year ago. D ET A I L E D S UR VE Y OF DIS TR ICT IR O N A N D ST E E L D uring the last part of January and early Feb ruary steel production in the St. Louis area was at a slightly lower level than th a t of the preceding m onthly period. Contraction was due in large m eas ure to taking furnaces out of production for repairs, and it is expected th at in the near future the rate of operations will be increased, providing th at the sup ply of scrap is adequate for production needs. As of m id-February, the rate of operations in the St. Louis district was at 82.9 per cent of capacity. This compares w ith a rate of 93.3 per cent a year ago. M ilder w eather in late January facilitated the col lection of scrap, but the snow and rain of early Feb ruary slowed down deliveries to commercial yards and the scrap situation is still stringent. Mills and foundries in this area have virtually no backlogs of scrap supplies. W hile the flow of scrap to comm er cial yards has been som ew hat increased, the supply has been ju st adequate to m aintain the current rate of mill and foundry operations. T he allocation of pig iron rem ains satisfactory. Dem and for all steel products continues strong w ith m ost production of plates and sheets going into w ar uses. Sheet schedules are in a state of con stan t revision and plate deliveries are becoming more extended. Increasing production of light plates on continuous sheet and strip mills seem to be indi cated to relieve the heavy pressure on available plate capacity. Production of pig iron for the entire country in January was 4,958,785 tons, about 1 per cent less than peak production of 5,014,995 tons in December, 1941, but 6 per cent above the 4,666,233 tons pro duced in January, 1941. Steel ingot production in the U nited States in January totalled 7,129,351 tons, a new January rec ord, and the fourth largest m onthly production in history. This compares w ith 7,163,999 tons in De cember and 6,928,085 tons in January, 1941. W H IS K E Y Of the 58 distilleries in K entucky, 53 were in oper ation on January 31, compared w ith 51 on December 31. W ith the exception of last February, when 54 distilleries were operating, this represents the largest num ber in operation in K entucky at any one time since the repeal of the E ighteenth Am endment. Production in m ost cases continues at capacity levels, although reports indicate th at lack of ade quate w arehouse space may bring about curtail m ent of operations in the future. One K entucky distillery is already producing industrial alcohol for use in the m anufacture of smokeless powder, and two others are preparing to produce alcohol for war use in the near future. According to an announce m ent of the W ar Production Board, the present stocks of grain and molasses are adequate to pro duce the am ount of alcohol required. Stocks of whiskey on hand at the end of 1941 in the U nited States were 511,211,285 gallons, com pared with 479,102,210 gallons a year earlier. Total whiskey production in December, 1941 was 13,632,281 gallons, of which 6,428,851 gallons were pro duced in Kentucky. T otal 1941 production of w his key in K entucky was 65,538,461 gallons as compared w~ith 1940 production of 46,234,033 gallons. A G R IC U L T U R E Farm ing Conditions — A fter the severe cold w eather in early January, tem peratures for the past m onth have been m ilder and better suited for the grow th and developm ent of crops and the prog ress of routine agricultural activities. Precipitation has been adequate and well distributed. P repara tion of land for planting spring crops is going for w ard writh fair progress in southern portions of the district. Cash farm income, including Government pay m ents, for the U nited States in 1941, totalled $11,700,000,000, a larger am ount than in any year since 1920. F or E ighth D istrict states, cash income plus benefit paym ents in 1941, totalled $2,434,000,000, which was 37 per cent above the $1,771,000,000 total for 1940. Mississippi registered the largest percentage increase of 66 per cent while Illinois showed the sm allest gain of 27 per cent. M arketings of crops and livestock during the early m onths of 1942 are expected to be heavy and this, coupled w ith prospective high prices, probably will sharply increase cash farm income in this period relative to 1941. The average of farm production prices on Ja n uary 15, reached 102 per cent of parity. T he index of prices received by farm ers stood at 149 per cent of the 1909-1914 base, 45 points above a year ago and the highest level since October, 1929. M ost of the m ajor groups of products showed increases from December 15, w ith grains advancing 7 points, m eat anim als 6 points, and cotton and cottonseed 5 points. Prices of farm products continued to advance dur ing late January, and then showed irregularity for the first three weeks of February. T he farm labor situation is becoming more strin gent as less than the usual seasonal gain in farm employm ent was recorded in February. On FebPage 3 ruary 1, total agricultural em ploym ent was 8,940,000 as compared w ith 8,665,000 on January 1, and 8,782,000 a year ago. Some estim ates place the farm labor supply for 1942 at 1,000,000 less than in 1941. Certain sections in this area report m arked short ages of farm labor. In view of increased production goals for 1942 crops and livestock, this shortage of labor, together w ith the curtailm ent in production of new farm m achinery, places a heavy burden on agriculture. Cotton — E arly in February, the D epartm ent of A griculture announced plans to encourage grow ers to shift from the production of short staple cotton to the longer staple length in 1942 to make avail able particular types of cotton needed to m eet mili tary requirem ents. The Commodity Credit Corpora tion will increase the prem ium s to be offered on longer staple lengths under the 1942 loan program . This program will affect particularly the Delta region of Mississippi. In the past m onth, cotton prices have fluctuated considerably. D uring January prices advanced about $10.00 a bale, reaching the highest point in thirteen years. In early February prices fell some what, but have been m oving up again late this month. In the St. Louis m arket the price of 15/16 m iddling grade ranged betw een 18.80c per pound and 20.15c per pound between January 15 and Feb ruary 16, closing on the latter date at 18.91c per pound. This compares w ith a range from 9.85c per pound to 10.40c per pound for the comparable period a year ago. Spot cotton trading in m id-South m arkets was quite active during late January, but slackened somewhat in early February. Dem and for the bet ter grades continued strong, but the scarcity of these qualities in current offerings restricted busi ness to some e x te n t Due to strong dem and for the better grades, a considerable am ount th at had been held has come out into the m arket, and while there are probably still sizable lots of these better qual ities withheld, the total quantity involved now seems to be relatively small. Domestic mill activity rem ains at very high levels. W ith increased Government demand for cotton products requiring m ost mill production, it is be lieved th at this activity will be m aintained and pos sibly increased, subject to the lim iting factors of labor and m achinery supply. Dom estic cotton con sum ption for the year ending July 31, 1942 may total 11,500,000 bales, according to the U. S. De partm ent of A griculture. Fruits and Vegetables — Prelim inary acreage planted to straw berries in the early and second Page 4 early states of Mississippi, A rkansas, and Tennessee is only slightly above th at of 1941, but is alm ost one q u arter greater than the 10-year (1931-1940) aver age. Prelim inary acreage planted to early Irish potatoes in the second early states of K entucky and M issouri is 8,900 acres as compared w ith 9,700 acres in 1941, and the 10-year (1931-1940) average of 10,440 acres. The reduction in acreage is attributed prim arily to the price of seed potatoes, shortage of burlap bags, and the uncertain labor supply. Stocks of m erchantable potatoes held by grow ers and local buyers and dealers in the U nited States on January 1, were 6 per cent below a year ago, but 1 per cent above the 10-year (1931-1940) average. In E ighth D istrict states stocks were 62 per cent and 14 per cent, respectively, above last year and the 10-year average. M uch of the increased goal for canned vegetables for 1942 is due to the increase scheduled for canned tomatoes. T o aid grow ers and canners in attaining this increase, the U. S. D epartm ent of A griculture has set fair minimum prices which canners m ust offer to grow ers before they are eligible to sell to the U. S. D epartm ent of A griculture. Livestock — In this area receipts of livestock in January were slightly lower than in December. Receipts of hogs, however, were in greater volume than a m onth ago. A t the N ational Stockyards, livestock receipts for January were 1 per cent below December but 4 per cent above January, 1941. Ship m ents were 12 per cent greater and 13 per cent less, respectively, than a m onth and a year ago. Prices on livestock were uneven throughout the past m onth, but new four-year highs were recorded for hogs. T he average price on hogs at the National Stockyards betw een January 16 and F ebruary 16 ranged from $11.38 per cwt. to $12.79 per cwt., clos ing on the latter date at $12.79 per cwt. This com pares w ith a range from $7.60 per cwt. to $8.52 per cwrt. for the comparable period a year ago. The 1942 goal for egg production is 13 per cent above 1941 production. On January 1, the num ber of potential layers was 8 per cent greater than on January 1, 1941. On February 1 the num ber of eggs produced per 100 layers for the U nited States was 35.5 as compared w ith 33.9 a year ago and 27.2 for the 10-year (1931-1940) average. T he percentage increases from a year ago and the average were 5 per cent and 31 per cent, respectively. For E ighth D istrict states production per 100 layers on F eb ruary 1 was 31.4 which was 1 per cent above the rate of February 1, 1941 of 31.1 and 27 per cent above the 10-year (1931-1940) average of 24.7. Tobacco— Burley tobacco m arkets closed on Feb ruary 13, after having sold 354,313,242 pounds of tobacco at an average price of $29.35 per cwt. Qual ity and quantity of tobacco offered during the last two weeks had dropped steadily, and the average price for the closing week was $23.96 per cwt. Because of the higher prices received this season, reports indicate th at a very small part of the crop w^as delivered to the Tobacco G row ers’ Cooperative Association. Purchase of tobacco has been on such a large scale th at some of the cigarette m anufactur ing concerns are reported to be seeking financing to help carry the larger and higher-priced inventories. Green River tobacco m arkets were closed on Feb ruary 13. The season’s average price on this tobacco through F ebruary 10 was $11.73 per cwt. on a total of 14,185,184 pounds. D uring the closing weeks the lower quality of offerings reduced the average price. A bout 12 per cent of tobacco sold w ent to the Grow ers’ Cooperative Association this year. T he dark-fired tobacco crop, in general, is of nor mal quality w ith good length and body. T he m arket rem ained strong during early F ebruary w ith prices showing an upw ard trend, but recently has weak ened slightly due to lowered quality of offerings. Season averages through the week of February 12 for Eastern and W estern districts were, respec tively, $14.54 per cwt. and $12.35 per cwt. Since the opening week the tobacco Grow ers’ Cooperative As sociation receipts of dark-fired tobacco have declined from 40 per cent of total sales to about 20 per cent. Sales of one sucker tobacco through February 11, totalled 15,160,212 pounds at a season average price of $11.63 per cwt. Prices have fallen steadily throughout the past m onth as quality of offerings declined. V ery little of this type of tobacco remains to be m arketed. A t m id-January, the D epartm ent of A griculture revised its 1942 goals for all types of tobacco restor ing allotm ents to the 1941 level for burley, firecured, dark air-cured and cigar leaf tobacco. The 1942 allotm ents will, w ith average yields, m aintain stocks at present high levels. W inter W heat — Prospects for w inter w heat dur ing January and early F ebruary rem ained generally favorable. A lthough m ost of the area south of the Ohio River was bare of snow, the ground was rela tively dry and little heaving is apparent. Some in stances of heaving in certain sections of the district are reported as a result of warm days and relatively cold nights. The Commodity Credit Corporation is prepared to sell w heat in place of corn for the production of ethyl alcohol, butyl alcohol and acetone. The deliv ered price to processors is to be 91c per bushel. This plan, coupled w ith the program to release 100,000,000 bushels of w heat for feed, will make available additional storage space for the 1942 crop, will conserve corn for other uses, and will insure adequate feed supplies to attain the increased goals for livestock, dairy and poultry products. Loans made by the Commodity Credit Corporation on the 1941 wheat crop through F ebruary 7, 1942, in E ighth Dis trict states totalled $27,522,289 on 25,080,479 bushels. COST OF L IV IN G A N D PR IC ES The cost of living in the U nited States continued to rise from December 15 to January 15. T he rate of increase for the past m onth was 1.3 per cent as compared with a rise of 0.3 per cent for the previous period. Since the beginning of the w ar in 1939 liv ing costs in the U nited States have advanced 11.2 per cent, with m ost of the rise coming in the past year. In St. Louis, living costs rose 1.1 per cent and 11.4 per cent, respectively, in the past m onth and since September, 1939. Strongly influencing advances in the total cost of living for St. Louis were gains since December 15 in the cost of food and clothing. For the U nited States the average of all food costs rose 2.7 per cent betw een December 16 and January 13 and was 18.8 per cent above the average of January 14, 1941. Increases in cost of food in Eighth D istrict cities during the m onth ranged from 1.9 per cent in St. Louis and M emphis to 2.7 per cent in Louisville. In the past year, the greatest rise in food costs in the district was in L ittle Rock where prices advanced 23.3 per cent. The sm allest increase was 20.8 per cent, for St. Louis. Prim ary factors in rising food prices the past m onth have been gains in the prices of potatoes, meats, and sugar, which were partially offset by declines in prices of oranges and eggs. W holesale prices advanced sharply throughout January and then declined som ew hat during the first week in February. On January 31 the index stood at 95.9 the highest point since September, 1929. On February 7 the index was 95.7. Changes in prices of farm products and foods continue to influence the index strongly. EM PLOYM ENT Total civilian non-agricultural employment in December reached a new all-time peak of 40,940,000, as compared w ith 40,749,000 in November and 38,161,000 in December, 1940. The gain resulted largely from the seasonal rise of 357,000 in trade employ ment. M anufacturing showed a less than seasonal decline of 53,000. C urtailm ent of autom obile pro duction caused considerable unem ploym ent, but rises in volume of employment in w ar industry and Page 5 in meat packing offset the total decline in manu facturing employment. N on-agricultural employment in Eighth District states in December was 5,781,000 as compared with 5,762,000 in November and 5,235,000 in December, 1940. Arkansas showed the greatest gains from a month and a year ago, of 5.5 per cent and 17.1 per cent, respectively. M issouri employment declined 1.5 per cent from the November level, but was 13.2 per cent above a year ago. Fragm entary reports from E ighth D istrict centers of m anufacturing indi cate some rise during January from December em ployment levels. B A N K IN G A N D FIN A N C E General demand for credit in the Eighth District during January and early February varied consider ably with respect to area and type, and total loans rose slightly from the level obtaining a month earlier. Liquidation of loans at rural banks in tobacco pro ducing regions has been heavy, due to the greatly increased income received by farmers from sale of the crop. In most other agricultural districts the demand for credit for this year's program is not yet m aking itself evident, although many banks in such areas are anticipating increased loan volume this year due to the 1942 farm goals and to rising costs of production of farm products. Urban banks report a slight increase in demand since the beginning of February and expect some demand from industrial concerns for the paym ent of income taxes. Indus trial and commercial inventory shrinkage accounts for part of the lessened need for credit, although food processing and allied industries should be ex pected to increase their dollar inventory holdings due to much higher agricultural prices and increased farm production. M ember Banks — Total loans and investments of reporting m em ber banks in the principal cities of the district on F ebruary 18 were virtually unchanged from January 21, but were 29 per cent above a year ago. Loans increased about 1 per cent in the fourweek period and were up 21 per cent from a year ago. W hile total investm ents showed no change in the m onth, holdings of T reasury bonds increased appreciably but were offset by declines in holdings of T reasury notes and bills, and other securities. A ggregate am ount of savings deposits on February 4 was 1.5 per cent and 2.9 per cent, respectively, below a m onth and a year earlier. Gross deposits receded som ew hat from the peak of $1,450,293,000 reached January 21. Since the last issue of this review, the O ’Bannon Banking Company of Buffalo, Mo., became a mem ber of the Federal Reserve System. Page 6 FARM INCOM E IN C L U D IN G GOVERNM ENT B E N E F IT PAYM ENTS December Cumulative for 12 months (I n thousands of dollars) A r k a n sa s......... I llin o is .............. I n d ia n a ............ K e n tu ck y ......... M ississippi. . . . M issouri............ Tennessee 1941 $30,187 85,434 40,200 56,361 30,974 40,353 _______ 31,265 1940 $18,045 55,030 30,692 30,326 17,960 29,413 18,957 1941 $259,117 736,355 393,989 207,051 230,446 404,102 203,403 1940 $160,729 578,951 294,569 160,376 139,039 295,787 141,755 1939 $164,559 532,454 276,889 147,943 170,896 279,676 133,378 T o ta ls............ 314,774 200,,423 2,434,463 1,771,206 1,705,795 RECEIPTS AND SH IPM EN T S AT N A T IO N A L STOCK YARDS Receipts Jan., D ec., Jan., 19^2 1941 1941 Cattle and C alves. . . 104,249 105,076 93,167 H o g s ............................... . .299,512 297,985 296,872 Horses and M ules. , , . . 1,710 2,014 1,530 , . . 39,220 44,493 34,080 Shipments Jan., Jan., D ec., 1942 1941 1941 32,732 39,852 31,575 105,982 80,456 125,263 1,970 1,611 1,680 1,657 4,568 4,330 . .444,691 449,568 425,649 142,051 126,846 162,779 W H O L E SA L E PRICES IN TH E U N IT E D STATES Bureau of Labor Statistics (1 9 2 6 = 1 0 0 ) Feb. 7,’42 A ll Commodities. . 95.7 Farm Products .100.1 F o o d s ................... 93.7 O th e r .................. 94.5 Jan. 31,’42 Jan. 10,’42 Feb. 8 ,’41 95.9 101.3 93.9 94.7 95.0 98.8 92.5 94.3 80.5 70.7 73.2 84.6 Feb. 7,’42 comp, with Jan. 10,’42 Feb. 8,’41 + -j-f+ COST OF LIV IN G Bureau of Labor Jan. 15, Dec. 15, Sept. 15, Statistics (1935-39=10,0) 1942 1941 1939 111.9 110.5 U nited S ta te s......... 100.6 St. L o u is............ 111.8 110.6 100.4 0.7% 1.3 1.3 0.2 + 18.9% + 4 1 .6 + 2 8 .0 + 11.7 Jan. 15/42 comp, w ith Dec. 15,’41 Sept. 15,’39 + 11.2% + 1.3% + 11.4 + 1.1 COST OF FOOD Bureau of Labor Statistics (1935-39=10.0) Jan. 13, 1942 D ec. 16, 1941 116.2 119.8 117.9 116.8 115.3 113.1 117.5 115.5 113.7 113.1 U . S. (51 cities) . . . St. L o u is ............ L ittle Rock . . . . L o u is v ille ......... M em p h is............ Jan. 14, Jan. 13,’42 comp, w ith 1941 Dec. 16,’41 Jan. 14,’41 97.8 99.2 95.6 95.5 94.2 + + + + + 2.7% 1.9 2.1 2.7 1.9 + 18.8% + 2 0 .8 + 2 3 .3 + 22.3 + 2 2 .4 IN D E X E S OF EM PLOYM ENT IN M ANUFACTURING IN D U ST R IE S BY M ETROPOLITAN AREAS Bureau of Labor Statistics (1937=10.0) N ov., 1941 Oct., 1941 N ov., 1940 N o v .,’41 comp, with O ct.,’41 N o v .,’40 E vansville.............. L o u isv ille .............. M em phis................ St. L o u is .............. *Revised. 79.8 120.0 115.2 120.0 90.9 119.1* 118.0 121.7* 87.3 104.2 107.3 100.4 — 12.2% + 0.8 — 2.4 — 1.4 — 8.6% + 15.2 + 7.4 + 19.5 B U IL D IN G PERM ITS N ew Construction Number Cost 1942 1941 1942 1941 (C ost in thousands) E vansville. . . . L ittle R ock. . . Louisville Jan. T o t a ls .. . D ec. “ 15 21 26 313 117 492 15 30 93 504 186 828 703 $ 43 40 23 444 353 903 $ Repairs, etc. Number Cost 1942 1941 1942 1941 39 63 184 676 411 1,373 1,298 42 47 16 137 118 360 39 63 36 166 105 409 491 $ 16 21 10 309 157 513 $ 20 26 41 131 199 417 372 V A L U E CO NSTRUCTION CONTRACTS LET (I n thousands of dollars) D ec.,’41 Jan.,’41 Jan.,’42 comp . with D ec.,’41 Jan. ,’41 Total 8th D ist. . . $23,950 $35,153* S ou rce: F . W . D odge Corporation. * Revised. $21,367 — 32% Jan.,’42 + 12% CO NSUM PTIO N OF ELECTRICITY (K .W .H . in thous.) N o. of Jan., D ec., Custom- 1942 1941 ers* K .W .H . K .W .H . E vansville . . . . 40 4,846 L ittle Rock . . . 35 2,377 82 12,211 31 4,759 Pine Bluff . . . . 19 1,226 . 125 5 3,766 . 332 79,185 *Selected industrial customers. 4,336 2,426 15,112 4,497 1,355 54,348 82,074 Jan., 1941 K .W .H . 5,266 2,373 11,668 3,642 899 49,327 73,175 January, 1942 compared with D ec., 1941 Jan., 1941 + 12% — 2 — 19 + 6 — 10 — 1 — 3 — 8% - 0.+ 5 + 31 + 36 + 9 + 8 PRO D U C TIO N OF B IT U M IN O U S COAL (I n thousands of tons) Jan.,’42 U nited States. . . . 48,540 . . . . 5,320 D ec.,’41 Jan.,’41 Jan.,’42 comp, with D ec.,’41 Jan.,’41 46,667 5,00.6 44,070 4,853 + + 4% 6 + 10% + 10 L O A D S IN T E R C H A N G E D F O R 25 R A IL R O A D S A T ST. L O U IS First nine days F eb .,’42 F eb.,’41 Jan.,’42 D ec.,’41 Jan.,’41 26,864 117,385 110,959 93,671 35,135 Source: Terminal Railroad A ssociation of St. Louis. W H O L E S A L IN G Lines of Commodities N et Sales D ata furnished by Bureau of Census, U . S. Dept, of Commerce. Stocks January, 1942 compared with D ec.,’41 Jan.,’41 A utom otive Su pplies................................ ..+ 2% B oots and S h o es.........................................-f-137 Drugs and C hem icals................................+ 7 Dry G o o d s ......... ........................................ ..-j- 36 Electrical Supplies.......................................+ 7 1 Furniture.........................................................+ 13 G roceries.................................. ............. .........+ 10 Hardw are....................................................... ..+ 2 Machinery, Equipment and Supplies. + 6 Plum bing S u p p lie s ....................................— 20 Tobacco and its P rod u cts.....................— 18 M iscella n eo u s......................................... .. . + 20 T otal all lin es*...................... ......................+ 12 *Includes certain lines not listed above. + + Jan. 31, 1942 comp, with Jan. 31, 1941 40% 13 15 37 21 66 45 51 31 61 40 22 37 + 38 + 38 + 30 +25 +22 + 48 + 13 +30 D E P A R T M E N T ST O R E S Stocks N et Sales on Hand Stock T urnover Jan. 1., to January, 1942 Jan. 31,’42 comp, with Jan. 31, compared with 1941 D ec.,’41 Jan.,’41 Jan. 31,’41 1942 ~~/2A — 52% Ft. Smith, A r k ... + 57% + 15% ’ .31 + 24 +37 .29 .23 — 51 L ittle Rock, Ark. — 42 .34 .23 +56 Pine Bluff, Ark. . + 10 — 56 +46 E. St. Louis, 111. '.26 — 50 +20 ’.31 Quincy, 111............. + 47 — 56 +46 Evansville, I n d .. . ’.35 '.35 — 53 + 28 Louisville, K y .. . . +4i .36 .38 — 37 + 43 +42 St. Louis, Mo. . . .21 .18 — 52 + 30 Springfield, Mo. . + 31 Jackson, T en n .. . . — 55 +56 '.32 ’.30 — 51 + 38 +30 M emphis, T en n .. . .23 + 39 .26 — 52 +33 A ll other cities* . . .34 .35 + 38 — 44 + 39 Vernon, 111.; ille, A rk.; A lton, Harrisburg, M t. *E1 Dorado, Fay V incennes, I n d .; Danville, H opkinsville, M ayfield, K y .; Chillicothe, Mo. Trading days: Jan., 1942— 26; D ec., 1941— 26; Jan., 1941— 26. O utstanding orders of reporting stores at the end of January, 1942, were 84 per cent greater than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding January 1, 1942, collected during January, by cities: Installm ent E xcl. Instal. Installm ent E xcl. Instal. A ccounts A ccounts A ccounts A ccounts 57% Q u in cy........... 22% 33% Fort S m ith . . . . 58 St. L o u is. . . . 21 38 L ittle R o ck . . 15 52 Other cities. . 12 45 L ouisville . . . 17 52 8th F. R. D ist. 20 48 M emphis . . . . 26 I N 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) : Jan., Dec., N ov., Jan., 1941 1942 1941 1941 110 190 133 80 Sales (daily average), U n a d j u s t e d ............ 115 114 100 138 Sales (daily average), Seasonally adjusted 62 87 86 108 Stocks, U nadjusted.............................................. 100 92 96 71 Stocks, Seasonally adjusted.............................. Trading days: Jan., 1942— 26; D ec., 1941 -2 6 ; Jan., 1941— 26. 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 JA N U A R Y , 1942 (Incl. Louisville, Memphis, L ittle Rock branches) Pieces Amounts Checks (cash items) handled................................ 5,868,169 $1,799,134,184 Collections (non-cash item s) handled................ 106,727 43,869,102 Transfers of fu nds....................................................... 5,053 491,099,305 Currency received and counted.............................. 13,487,782 49,735,325 Coin received and co u n ted ..................................... 14,042,640 1,220,642 Rediscounts, advances and com m itm ents......... -0-0N ew issues, redemptions, and exchanges of securities as fiscal agent of U . S. Govt., etc. 275,254 10.8,177,087 B ills and securities in custody— coupons clipped 9,237 ............................... 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 AC T Advances to banks, secured by direct obligations of the United States, under paragraph 13 of section 1 3 ..1 % per annum Advances to member banks, secured by direct obliga tions o-f the U nited States or by such Government guaranteed obligations as are eligible for collateral, under paragraph 8 of section 1 3 ............................................1 % per annum Rediscounts and other advances to member banks un der sections 13 and 1 3 a . . ......................................................... 1/4% per annum Advances to member banks under section 1 0 (b )................ 2 % per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the United States, under paragraph 13 of section 13............4 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 13b: r i y 2 % to (a) On portion for which such institution is obligated 12 % per annum (b) On remaining portion — N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial f 3^2% to businesses under section 13b................................................ I 5}4% per annum Commitments to member banks, nonmember banks, and other financing institutions, under section 1 3 b . . . . l % per annum Provided: that on commitments issued for periods of 90 days or less the minimum charge shall be x/\ of 1 % fla t; and further provided, that on commitments for loans secured by assignment of “ Emergency Plant Facil ities Contract” with the U nited States Government, the rate may be as low as 54 of 1% per annum. P R IN C IP A L R E S O U R C E A N D L IA B IL 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 Feb. 18, Jan. 21, Feb. 19, (In thousands of dollars) 1942 1942 1941 Commercial, industrial, agricultural lo a n s.$287,620 + 3,295 + 64,032 Open market p ap er.............................................. 24,20.0 + 113 + 11,684 Loans to brokers and dealers......................... 4,279 + 44 — 311 Other loans to purchase and carry securities. 10,538 + 68 — 1,911 Real estate lo a n s .................................................. 58,685 — 580 — 552 Loans to banks....................................................... 1,297 + 504 — 1,113 Other le a n s ............................................................. 75,692 — 1,012 + 7,261 10,871 — 6,492 — 2,455 Treasury b il ls ......................................................... Treasury n o t e s ....................................................... 42,031 — 270. — 3,726 U. S. bonds............................................................. 258,275 + 1 4 ,9 1 2 + 89,719 Obligations guaranteed by U . S. Government 56,804 — 7,228 — 8,389 Other sec u r ities..................................................... 111,775 — 372 — 1,135 Balances with domestic ban k s......................... 221,281 — 273 + 13,096 Demand deposits — adjusted*......................... 642,498 + 1 2 ,5 8 7 + 91,812 Time d e p o sits........... ............................................. 183,871 — 2,073 — 8,626 U . S. Government dep osits.............................. 18,788 — 8,764 + 7,380 559 + 82,535 Interbank deposits.................................. ............. 514,992 — *Other than interbank and Government deposits, less cash items on hand or in process of collection. Above figures are for 24 member banks in St. Louis, Louisville, M em phis, Little Rock and E vansville. Their resources comprise approximately 75% of the resources of all member banks in this district. S P E C IA L T Y ST O R E S N et Sales Stocks on Hand Stock Turnover Jan. 31,’42 Jan. 1, to January, 1942 comp, with compared with Jan. 31, 1941 D ec.,’41 Jan.,’41 Jan. 31,’41 1942 M en’s Fu rn ish ings........... — 45% +44% +29% .26 .23 Boots and S h o es................ — 39 +46 +47 .52 .53 Percentage of accounts and notes receivable outstanding January 1, 1942, collected during January: M en’s F u rn ish ings....................... 38% B oots and S h o es............................ 44% C H A N G E S IN 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 F E D E R A L R E S E R V E B A N K O F ST. L O U IS (In thousands of dollars) Feb. 18, 1942 Jan. 14, 1942 Feb. 19, 1941 6 Industrial advances under Sec. 13b............ ; Other advances and red iscoun ts.................. U . S. securities..................................................... 106,284 Total earning a sse ts....................................... 106,290 — 194 + 4 — ’ ‘201 — 395 + + 3,145 3,149 Total reserves....................................................... 647,712 T otal d eposits....................................................... 418,371 F. R. Notes in circulation.............................. 331,746 — 13,651 — 24,493 + 10,380 + 133,917 + 30,291 + 108,098 Industrial commitments under Sec. 13b.. — + 1,130 640. 902 (In thousands of dollars) D E B IT S TO I N D I V I D U A L A C C O U N T S Jan., Jan., Jan.,’42 comp, with D ec., 1942 1941 1941 D ec.,’41 Jan.,’41 E l D orado,. . , Fort Sm ith,. . . Ark.$ 8,101 “ 20,636 “ 3,062 “ Little Rock, .. 62,236 “ Pine Bluff, . . . 13,423 T exarkana, -Ark. -T ex. 22,304 E .S t.L .-N at.S .Y .,Ill. 64,215 “ 11,813 E vansville,. . . . . Ind. 45,445 Louisville, . . . . . . K y . 277,907 Owensboro, . . 11,295 10,427 . . .M o. 801,420 “ 2,870 “ Springfield, . . 20,502 274,019 ..............1,649,675 $ 9,076 22,909 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 $ 6,400 15,918 2,091 55,424 9,792 10,002 47,626 9,404 40,196 218,712 8,045 6,675 644,933 2,196 17,449 207,555 1,302,418 — 11% — 10. — 1 -0— 12 — 12 — 2 — 9 — 7 — 11 + 1 + 15 — 14 — 6 — 6 + 2 — 9 + 27% + 30 + 46 - 12 - 37 -123 - 35 - 26 + 13 b 27 - 40 - 56 - 24 - 31 - 17 - 32 + 27 C O M M E R C IA L F A I L U R E S IN E IG H T H F. R. D IS T R IC T Jan.,’42 comp, with Jan.,*42 D ec.,’41 Jan.,’41 D ec.,’41 Jan.,’41 N u m b er................ 32 L iabilities.............. $375,000 Sou rce: Dun and Bradstreet. (Completed February 24, 1942) 25 $224,000. 33 $458,000 +28% +67 - 3% -18 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 Industrial activity rose further in January and the first half of February, reflecting- continued sharp advances in output of military products. Retail trade was unusually active and prices, particularly of unregulated commod ities, advanced. 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 January, 1942. DEPARTMENT STORE SALES AND STOCKS Production — Volume of industrial production increased in January, although usually there is some decline at this season, and the Board’s ad justed index rose further to 170 per cent of the 1935-39 average. Continued rapid increases in activity were reported in the machinery and armament industries and production o f chemicals likewise rose sharply. Activity at cotton textile mills reached a new high level, following some decline in December. In the meatpacking industry, where activity had risen to record levels in December, there was a further advance in January and output of most other manufactured food products was maintained in large volume for this time of year. Production of steel and nonferrous metals continued near capacity in January and lumber production, which usually declines at this season, was sustained. In the automobile industry output of passenger cars and light trucks continued at about the December rate; in February, however, produc tion of cars and trucks for civilian use was halted and the plants were shut down for conversion to armament production. Coal production increased in January, following a decline in December when demand was curtailed some what by unusually warm weather, and output of crude petroleum was main tained at record levels. Federal Reserve m onthly indexes of value of sales and stocks, adjusted for seasonal variation, 1923-25 average == 100. L atest figures shown for sales are January, 1942; for stocks, December, 1941. COST OF LIVING Value of construction contracts awarded in January was some two-fifths below the level of the last quarter of 1941, according to figures of the F. W. Dodge Corporation. Declines were reported in all classes of construction; the decrease in residential building being usual at this season. Total awards in January were slightly larger than last year, but public projects accounted for a much larger proportion of the total than a year ago. Distribution — In January retail trade was stimulated considerably by widespread anticipatory buying of many products resulting from announce ments that distribution of new tires and tubes, new automobiles, and sugar would henceforth be rationed and that the amount of materials available for use in various other goods would be restricted. Sales at department stores, variety stores, and general merchandise stores declined much less than is usual after the Christmas season, while sales of tires and tubes were restricted to essential uses and sales of automobiles ceased pending the establishment of a rationing system. In the first half of February department store sales decreased somewhat from the high level reached in mid-January. Bureau of Labor Statistics’ indexes, 1935-39 a v era g e = 1 0 0 . Fifteenth of month figures. L ast month in each calendar quarter through September, 1940, m onthly thereafter. Latest figures shown are for January, 1942. MEMBER BANKS IN 101 LEADING CITIES Total carloadings of revenue freight, which usually decline in January, showed little change this year and the Board’s seasonally adjusted index advanced from 137 to 140 per cent of the 1935-39 average. Loadings of grain and forest products rose to unusually high levels for this time of year and coal shipments also increased, following a decline in December. Ship ments of miscellaneous freight, which include most manufactured products, declined less than seasonally. Commodity P rices— Prices of commodities and services continued to advance sharply in January and the first half of February. The Emergency Price Control Act of 1942 became a law on January 30 and former Federal maximum price schedules — approximately 100 in number — remained in effect under its terms. About one-half of these schedules were issued fol lowing the United States’ entry into the war. In this period, price controls were extended to a number of finished consumers’ goods and covered mainly items for which output for civilian use had been sharply curtailed or pro hibited by Federal order. Retail prices of foods and textile products, which are not subject to direct control, showed exceptionally large increases from December 15 to January 15 and, according to preliminary indications, have continued to advance since that time. Bank Credit— Since the beginning of the year loans and investments at banks in leading cities have increased, reflecting purchases of Government securities by city banks outside New York and increases in commercial loans by banks in New York. Demand deposits and currency in circulation have risen sharply. Member bank reserves have shown little change in recent weeks, and excess reserves have continued close to 3y2 billion dollars. 1936 1937 1938 1939 1940 1941 1942 W ednesday figures. Commercial loans, which include in dustrial and agricultural loans, represent prior to May 19, 1937, so-called “ Other loans'” as then reported. Latest fig ures shown are for February 11, 1942. Page 8 United States Government Security Prices — Prices of United States Government bonds declined somewhat in the first half of February, follow ing little change during the previous month, while prices of short-term secur ities, which had risen in January, were steady.
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