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FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REVIEW OF BUSINESS CONDITIONS IN EIGHTH DISTRICT Released for Publication On and After the Morning of February 29, 1928 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent H IL E still exhibiting considerable irregu larity, both with reference to the several lines and different localities, business in this district during the past thirty days developed moderate improvement over the preceding month and the corresponding period last year. Betterment was most noticeable in industry, and in distribu tion of merchandise of the more permanent and heavier sort. Operating schedules at a number of important manufacturing plants were increased, and additional orders booked were sufficiently large to insure continuance of the higher rate of production for several months to come. The general trend of prices was higher as contrasted with thirty days earlier, and due to this fact and a more active de mand for goods by ultimate consumers, there was a greater disposition on the part of wholesale and retail merchants to increase their commitments for future requirements. W Follow ing ten months o f almost unbroken de clines, distribution o f automobiles in January took a definite turn upwards. Dealers in virtually all sections of the district, but particularly in the lar ger centers of population, reported larger sales and improved prospects for spring and early summer business. Reflecting betterment in the automotive industry, somewhat heavier buying by the rail roads and seasonal increase in building, conditions in the iron and steel industry underwent distinct improvement. Operations at mills, foundries and machine shops averaged higher than in the closing months of last year, and certain specialty manufac turers, notably of implements and stoves and heat ing apparatus, are w orking at or close to capacity. Gains were reported in sales of wholesalers of dry goods, hardware, furniture, boots and shoes and some of the less important lines. The number of buyers at wholesale establishments in the large cities during January and early this month was larger than a year ago, but their purchasing was on a conservative scale, and mainly for immediate needs. W eather was unfavorable for the movement of seasonal merchandise, and the carryover of win ter goods in the clothing, dry goods, grocery and some other lines is heavier than the average of the past several years. Special sales conducted by re tailers have been disappointing, but withal retail stocks are generally light, and sales of department stores in the five largest cities during January were 3.2 per cent larger than in the same month last year. Gains were also recorded in sales of five and ten cent stores and mail order houses. Other favorable factors were a sharp reduction in January commercial failure liabilities as com pared with a year ago, an increase in the value of building permits issued and consumption of elec tricity in the five largest cities of the district, a gain of 34.4 per cent in the amount of building con tracts let in this district in January as compared with last year, and a further increase in savings ac counts. On the other hand car loadings showed a rather sharp decrease under those of January last year and 1926, and, according to the Em ploym ent Service, U. S. Department of Labor, declines in employment were general through the district during the past thirty days. Absence of protracted cold weather generally through this region had a tendency to hold down demand for coal for heating purposes and business in the industry continued dull and unsatisfactory. Despite the low rate of operation in the bituminous fields of Illinois and Indiana, supplies are in excess of requirements, and operators complain of increas ing numbers of loaded cars at mines for which they have received no orders. Householders are pur chasing on a hand-to-mouth basis, and reordering by retail yards is below the volume usual at this time of year. Purchasing by the railroads has in creased slightly, but is still under expectations. Stocks of steaming coal are increasing in some sec tions and prices are depressed as a result. In a num ber of important instances, industrial users are car rying liberal supplies on their storage piles, and in addition have considerable coal contracted for. Con sumers’ stocks of bituminous coal for the country as a whole were 55,500,000 tons on January 1, which is slightly larger than on the same date in 1927, and compares with 61,500,000 tons on O ctober 1, 1927, the date of the last preceding survey. All major classes of consumers and practically all regions of the country were consuming less coal than in the corresponding months a year ago. The total quantity of soft coal produced in the United States during the present coal year to February 4, approximately 261 working days, was 400,544,000 tons, against 494,751,000 tons and 454,765,000 tons a year and tw o years earlier, respectively. W hile traffic of railroads operating in this dis trict fell below that of the corresponding period last year, the decrease was due chiefly to a smaller coal movement, which was particularly heavy in 1927 because of pre-strike production. Loadings of grain, merchandise, grain and miscellaneous freight made a favorable showing as contrasted with last year. For the country as a whole loadings of revenue freight for the first four weeks of this year totaled 3,447,723 tons, against 3,576,660 tons for the corresponding period in 1927 and 2,686,696 in 1925. The St. Louis Terminal Railway Associa tion, which handles interchanges for 28 connecting lines, interchanged 209,792 loads in January, against 199,342 loads in December, and 216,573 loads in January, 1927. During the first 9 days of February the interchange amounted to 66,439 loads, against 58,120 loads during the corresponding period in January, and 67,409 loads during the first 9 days of February, 1927. Passenger traffic of the reporting lines in January decreased 8 per cent as compared with the same month in 1927. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans for January was 104,800 tons, the highest for any January on record, and comparing with 114,063 in Decem ber and 89,608 in January, 1927. In virtually all sections of the district collec tions during the past thirty days maintained the high levels of recent months. Some backward spots were reported in the country, but these were ac counted for by peculiar local conditions or incle ment weather which interfered with communica tions. W holesalers and jobbers in the large centers reported February settlements satisfactory, and many customers taking advantage of discounts for cash. Retailers generally reported better collec tions than a month earlier, with results in the large cities particularly good. Liquidation in the rice and tobacco sections has been on an extensive scale as marketing of these crops progresses. Answers to questionnaires addressed to representative interests in the several lines scattered through the district showed the follow ing results: E xcellent G ood Fair P oor 5.0% January, 1928............... 3.3% 37.7% 54.0% December, 1927........... 4.0 36.0 54.1 5.3 25.9 52.1 20.8 January, 1927............... 1.2 Commercial failures in the Eighth Federal R e serve District during January, according to Dun’s, numbered 148, involving liabilities of $3,858,852, against 84 defaults in Decem ber with indebtedness of $2,923,187, and 145 failures for $6,728,951 in Janu ary, 1927. The per capita circulation of the United States on January 31, 1928 was $39.73, against $42.50 on December 31, 1927, and $41.65 on January 31, 1927. M A N U F A C T U R IN G A N D W H O L E S A L E Autom obiles — Combined passenger car and truck production in the United States in January totaled 231,547, which compares with 133,178 in December and 238,926 in January, 1927. After almost unbroken declines for ten months, distribution of automobiles in this district turned definitely upward in January, sales during that month showing good gains over the preceding month and the corresponding period last year. The improvement extended fairly well through all makes of cars, but was proportionally greater in medium priced and the more expensive vehicles. Due to smaller sales by one leading producer of low priced cars, the showing in that classification was less fav orable than in others. Business in the large centers was relatively better than in the country, which is usual at this time of year, as farmers ordi narily postpone filling their requirements until spring or early summer. A ccording to produc ers and dealers, the recent price reductions and presentation of new models have met with good response, though there is still a disposition on the part of prospective buyers to await further developments along these lines. Generally sen timent is more optimistic than at any time since last spring. Inquiries have increased and more interest is being shown by the public. The St. Louis A u to mobile Show, held in the second week of this month, was the most successful in point of attendance, sales made and prospects booked, of any ever conducted in this city. Demand for trucks was reported more active, with sales of light vehicles for delivery pur poses in the large cities particularly satisfactory. January sales of new passenger cars by 320 dealers scattered through the district were 57.7 per cent larger than in Decem ber and 23.7 per cent larger than in January, 1927. A ccessory sales in December showed a gain of 15.3 per cent over the preceding month and 9.4 per cent over the January, 1927, total. The used car situation is generally satisfac tory. There were decreases in sales during January, both as compared with the preceding month and a year ago, but a further reduction in stocks was re corded, and total investment represented was con siderably smaller than a year ago. Stocks of new cars in dealers’ hands showed no notable change as compared with the preceding thirty days, and were slightly larger than a year earlier. O f the new cars sold, approximately 54.2 per cent were on the time payment plan, against 47.4 per cent in Decem ber and 68.3 per cent in January, 1927. B oots and Shoes — January sales of the five re porting interests were 2.0 per cent smaller than for the corresponding month last year, but 72.3 per cent larger than the December, 1927 total. Stocks on February 1 were 13.3 per cent larger than a month earlier, and 2.8 per cent less than on February 1, 1927. The large increase in the monthly sales com parison is accounted for by seasonal influences. D e mand generally through the line is active, and orders booked since the first of this month are in satis factory volume. There was a further advance in prices of finished goods, and as compared with a year ago price increases range from 5 to 25 per cent, with the heaviest rise being in heavy work shoes. The upturn in prices was in sympathy with the re cent advance in leather and hides. Factory opera tion was at from 88 to 97 per cent of capacity. Clothing — Due to generally mild weather, clothiers have experienced difficulty in disposing of heavy winter apparel, and the carryover of this class of goods is expected to be somewhat above the average of the past several years. Clearance sales of retailers in the principal cities have met with disappointing response, even though sharp price reductions were featured. Ordering of both men’s and w om en’s clothing for spring is reported in good volume, with several important interests reporting totals in excess of a year ago. Purchasing is on a conservative basis, however, with price play ing an important part in a m ajority of transactions. Demand for children’s clothes is reported brisk, both for prompt and future delivery. Distributors of work clothes complain of quietness in their line. Sales of the reporting clothiers in January were 26.8 per cent smaller than during the preceding month, and 11.7 per cent below the January total last year. Drugs and Chemicals — Unfavorable weather conditions and a slow ing down in certain specialty lines were mentioned as the chief causes for a de cline in January sales of the six reporting interests of 7.6 per cent as compared with the preceding month and of 3.3 per cent as contrasted with Janu ary, 1927. Retail trade was less active than during the two preceding months, and retail stocks are larger than at this time last year. Some improve ment was reported in demand for heavy drugs and chemicals from the manufacturing trade, notably the iron and steel industry. The movement of sea sonal goods was slow. D ry Goods — W hile a decrease in orders has taken place since the first of this month business in this line during the past thirty days continued its recent gains. Purchasing in the South was reported generally satisfactory, and gains were shown in other sections of the trade territory. The number of buyers arriving at the chief centers in January and early February was slightly larger than a year earlier, and their reports relative to prospects for spring trade have been generally optimistic. The recent decline in raw cotton has resulted in some hesitation in ordering of goods based on that staple. January sales of the eight reporting firms were 43.7 per cent larger than during the preceding month and 18.5 per cent greater than the January, 1927, total. Stocks on February 1 were 3.9 per cent small er than thirty days earlier, and 16.9 per cent larger than on February 1, 1927. Electrical Supplies — A recession in business as compared with the preceding month and a year ago was indicated in reports of cooperating interests in this classification. Purchasing of electrical ap pliances and specialties is being conducted on con servative lines, and the volume of installations in new structure and demand from public utilities companies are in smaller volume than a year ago. Heavier sales to the automotive industry were more than offset by curtailed purchases by other groups of consumers. January sales of the five re porting firms were 17.1 per cent smaller than in December, and 16.3 per cent below the January, 1927, total. Stocks on February 1 were 3.7 per cent smaller than thirty days earlier, and 18.9 per cent in excess of those on February 1, 1927. Flour — Production at the 12 leading mills of the district in January totaled 347,657 barrels, against 345,793 barrels in December, and 298,151 barrels in January, 1927. Stocks of flour at St. Louis on February 1 were 8.3 per cent smaller than on January 1, and 1.4 per cent larger than on February 1, 1927. Except for a slight quickening during the second week this month, business in the flour trade continued quiet. Purchasing by the domestic trade was reported only fair, and shipping directions were in the main below expectations. Some sales were made to Europe, but for the most part bids from that continent were too far out of line to result in workings. Slightly firmer prices on soft flours were noted this month, but quotations on hard wheat varieties were unchanged. Mill operation was at 54 to 58 per cent of capacity. Furniture — Sales of the 14 reporting interests in January were 73.4 per cent larger than during the preceding month and 30.6 per cent above the Janu ary, 1927, total. Stocks on February 1 were 5.6 per cent larger than a month earlier and 5.9 per cent in excess o f those on February 1, 1927. Advance sales account for a considerable part of the gain over last year, while the heavy increase in the monthly comparison is accounted for by seasonal considerations. Demand for household furniture shows improvement over recent months, and better ment was also shown in ordering of office equip ment and supplies. Retail stocks are of moderate size and ordering from producers and jobbers for fill-in purposes are frequent, and in fair aggregate volume. Groceries — January sales o f the twelve report ing firms were 10.2 per cent smaller than for D e cember, and 3.3 per cent larger than the January, 1927 total. Stocks on February 1 were 1.6 per cent smaller than thirty days earlier and 10.8 per cent less than on February 1, 1927. Business was re ported unusually spotted, some localities showing good results, while elsewhere sales were decidedly disappointing. Demand for canned goods was ad versely affected by the arrival in market of fresh fruits and vegetables from the south. Prices on certain staples, notably evaporated fruits, rice and beans were higher, but the general level showed little change as compared with the preceding thirty days. Hardware — Business in this classification con tinued the steady gains of the past several months, January sales o f the 11 reporting interests being 7.3 per cent larger than for the preceding month, and 12.7 per cent in excess of the January, 1927, total. Stocks on February 1 were 9.8 per cent and 23.1 per cent smaller than a month and a year ear lier, respectively. Demand for spring and summer hardware is active, particularly for items used chiefly in the agricultural sections, and there is a good volum e o f fill-in orders for winter goods and staples. A dvance ordering of sporting goods is in satisfactory volume, though generally retailers are disposed to purchase for immediate requirements. Sales of builders hardware are show ing the usual seasonal increase. W hile prices as a w hole show firmer tendencies, there are some exceptions, nota bly materials in which lead and zinc form an im port ant ingredient. Iron and Steel Products — Improvement in the iron and steel industry, noted in the preceding issue of this report, was carried further during the past thirty days. The volume of current buying showed preceptible gain, and specification on goods pre viously engaged were more satisfactory than has been the case in several months. In a number of important instances, order books of producers of finished steel and iron goods showed gains in ton nage despite heavy shipments, and purchasing of raw materials was on a more liberal scale. W hile actual quotations underwent no notable changes, the trend of prices was stronger. Operations at the steel mills were at a higher rate than during the preceding thirty days, and additions to their w ork ing forces were made by a number of interests specializing in gray castings. The change for the better in the autom otive industry is reflected in expanding specifications and buying of materials entering largely into the manufacture of autom o biles and trucks. Slightly more interest is being shown by the railroads in equipment and supplies, and a fair volum e of orders has been booked by car builders and plants specializing in railroad castings and bridge and track materials. Manufacturers of specialties, notably stoves, implements and heating apparatus, report improvement in their business. The call for goods consumed chiefly in the rural areas is active, advance sales for spring delivery being in excess of those at the corresponding period last year. Seasonal improvement is noted in iron and steel building materials, particularly in the South. Fabricators of structural steel have booked a large volume of small orders, and a number of large pending projects are expected to be closed during the next few weeks. T he sheet situation is better than for some months, and advance sales of galvanized material and tin plate are fully up to expectations. Tank plates and the general run of oil country goods continue dull. Jobbers report steady improvement in sales since the first week of January, and are replenishing and filling out their stocks in anticipation of heavy demands in the spring. For the country as a whole total production of pig iron in January was 2,855,515 gross tons, compared with 2,698,208 tons, in Decem ber and 3,101,346 tons in January, 1927. A verage daily pro duction was 92,113, against 87,039 tons per day in December, the increase being 5,074 tons, or 5.75 per cent. The January increase was the first im prove ment after eight months of continuous losses. Steel ingot production in the United States in January made one of the largest increases in ten years, the total o f 3,959,904 tons com paring with 3,150,345 tons in Decem ber and 3,759,877 tons in January, 1927. Lum ber — M oderate improvement took place in the lumber trade during the past thirty days. W hile there were no developments o f a marked character, seasonal demand and a picking up in general industrial activity was reflected in a firmer tone and heavier sales in lumber. For the first time in a number o f months, orders were slightly in ex cess of production, and generally shipments were in satisfactory volume. Purchasing by retail yards for spring and early summer distributions was freer, and steady broadening of the outlet through the building industry was noted. T h e automotive in dustry has increased its buying and specifying by the car builders is more active than heretofore. Price changes have been narrow, with the exception of flooring oak, which has advanced during the past several weeks. R E T A IL T R A D E T h e condition of retail trade in reflected in the follow ing comparative statement showing activity at department stores in leading cities of the district: N et sales Comparison January, 1928 com p, to January, 1927 Evansville ........— 7.5% L ittle R o ck ........+ 3.8 Louisville ......... — 6.7 M em phis .......... + 14.1 Q uincy .............. -f-15.5 St. L ouis.— .......+ 2.2 Springfield, M o.— 4.0 8th D istrict.......+ 3.2 Stocks on hand January 31, 1928 com p, to January 31, 1927 + 1.7% + 6.7 — 4.7 — 6.8 — 12.5 — 7.9 — 3.4 — 6.0 N et sales com parison Jan. 1928, com pared to Jan. 1927 M en’s furnishings............ — 6.8 % B oots and shoes................+ 3.4 D ec. 1927 — 54.8% — 43.8 Stock turnover January 1927 1928 .18 .17 .23 .24 .20 .27 .09 .25 .21 .18 .23 .20 .15 .25 .10 .23 Stocks on hand Jan. 1928, com pared to Jan. 1927 D ec. 1927 — 4.0 % — 0.6% — 13.2 — 15.5 Department Store Sales by Departments — As reported by the principal department stores in Lit tle Rock, Louisville, Memphis and St. Louis. Percentage increase or decrease January 1928, com pared to January, 1927 N et sales Stocks on hand for m onth at end o f month P iece good s.................................................... . + 5.7% ' + 6.8% Ready-to-w ear accessories......................... + 3.1 +1-5 W om en ’ s and misses’ ready-to-w ear......+ 16.6 — 2.6 M e n ’ s and B oys’ wear................................+ 1 1 .6 — 10.1 H om e Furnishings........................................ + 8.9 — 10.6 B U IL D IN G The dollar value of building permits issued in the five largest cities of the district in January was 53.6 per cent larger than during the preceding month, and 2.6 per cent greater than in January, 1927. A ccording to figures compiled by the F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District in January totaled $29,187,05, which compares with $33,352,300 in De cember, and $21,495,642 in January, 1927. There was a small increase in the cost of building as com pared with the preceding thirty days, caused by stiffer steel and glass markets and a slight falling off in the price of spruce lumber. Labor rates and conditions of employment remained unchanged. Production of portland cement for the country as a whole in January was 9,782,000 barrels, against 11,999,000 barrels in December, and 8,258,000 bar rels in January, 1927. Building figures for Janu ary fo llo w : Evansville .. Little R ock Louisville ... Memphis .... St. Louis.... N ew Construction Perm its *C ost 1928 1927 1928 1927 343 $ 122 $ 250 243 47 54 135 36 110 138 1,068 2,833 298 253 754 1,477 364 266 755 1,936 Jan. totals 1,161 954 $4,738 $4,628 D ec. totals 1,231 1,003 3,084 5,625 N ov. totals 1,487 1,253 7,389 5,216' *In thousands o f dollars (000 om itted ). _______ Repairs, etc. Perm its *C ost 1928 1927 1928 1927 36 25 9 $ 10 89 70 37 26 38 48 48 94 87 89 101 71 217 482 368 185 599 738 1,330 468 364 755 $ 647 837 1,571 $416 327 1,164 C O N S U M P T IO N O F E L E C T R IC IT Y Public utilities companies in the five largest cities of the district reported consumption of elec tricity by selected industrial customers in January as being 0.2 per cent less than in December, but 22.3 per cent greater than in January, 1927. In creases as compared with a year ago were fairly well distributed am ong all classes of manufacturers. The unusually large gain in St. Louis was due partly to the fact that one large cement plant was closed in January last year. Detailed figures follow : N o. of Evansville . . n r Little R ock... 35 Louisville .... 80 Memphis ..... 31 St. L ou is......113 Jan. D ec. 1928 1928 ’K .W .H . * K .W .H . 1 ,0 3 / 944 1,260 1,223 5,047 5,162 1,943 1,770 16,171 16,227 25,365 25,419 Jan. 1928 com p, to D ec. 1927 -T W o + 3.0 —- 2.3 + 9.8 — 0.4 — 0.2 Jan. 1927 * K .W .H . ™ i;o ^ 4 " 1,164 4,316 1,942 12,232 20,748 Jan. 1928 com p, to Jan. 1927 — i.8 % + 8.2 + 16.9 + .05 + 3 2 .2 + 2 2 .3 A G R IC U L T U R E During the past thirty days activities on farms in the northern portion of the district have consited chiefly in feeding stock, dairying, planning for spring planting, shipping o f seasonal products to market and routine repairs and improvements. In the South weather was favorable for plow ing and soil preparation, and at the middle of February somewhat more than the usual amount of this work had been accomplished. There has been ample moisture generally through the district, and soil conditions are excellent. Snow covering has been lacking, however, and in some sections apprehen sion is felt relative to fall sown grains. In all states farm labor is reported adequate to all requirements, with wages showing little variation as compared with the corresponding time last year. W inter W heat — Reports relative to the grow ing crop for the most part indicate good prospects in this district. W hile snow fall has been scanty, ample rain has fallen to supply needed moisture, and except for short periods, temperatures have been mild enough to preclude serious damage from winter killing. In much of the territory within this district the crop has a healthy appearance and good root growth. This is true particularly of prairie land and river bottoms. There are scattered reports of damage from alternate freezing and thawing, and hessian fly and green bug infestation is present in fields in scattered localities. These manifestations, however, are no greater than ordinary, and are not thought to have wrought serious injury. Corn — The crop has been completely gathered and housed, and in the south some preparation of land for spring planting has been done. There has been an active demand for corn, and under stimula tion of higher prices during the past several weeks, the movement to market has been heavy. Heavy shipments from farms to feeders at interior points, where the local crop was short, have been made, and prices paid in these transactions have averaged high. Demand for export was reported the best on the crop, and large quantities have been absorbed by domestic industries. There are some scattered reports of damage to corn in cribs from the warm, damp weather, but arrivals at primary points con tain some fairly high quality grain. Live Stock — The annual survey of the U. S. Department of Agriculture disclosed small gains in the total number and value of all live stock on farms in states w holly or partly within the Eighth Federal Reserve District, between January 1, 1927, and January 1, 1928. The aggregate number of cat tle, horses and mules, sheep and swine on the first day o f this year was 34,193,000 head, with total value of $990,445,000, which compares with 33,108,000 head, worth $952,000,000 on January 1, 1927. There were losses in number of all animals except swine, which showed a fair gain. Due to depressed prices, however, the total value of swine was lower, $168,534,000 on January 1, 1928, against $234,327,000 a year earlier. The aggregate value of all cattle and sheep was approximately $82,000,000 greater this January 1 than last, though numerically a decrease of 131,000 head was shown. The number of horses declined 129,000 during the year and the higher price per head failed to offset the numerical loss, total value on January 1 being $179,090,000, against $180,575,000 the year before. Mules decreased 4,800 in numbers, but gained $5,856,000 in total value. The decrease in numbers of horses and mules is due to increased use of automobiles and tractors, also to smaller acreage cropped and losses in the floods. Receipts and shipments at St. Louis, as reported by the National Stock Yards, were as follow s: Shipments R eceipts________ Jan. D ec. Jan. Jan. D ec. Jan. 1928 1927 1927 1928 1927 1927 Cattle and Calves...... 96,180 92,520 104,267 62,655 62,554' 62,293 H o g s ............................. 426,169 305,676 341,681285,776 213,924 225,676 H orses and Mules.... 16,847 7,424 7,968 15,049 7,941 7,946 Sheep ............................ 22,913 35,191 37,154 9,134 17,669 11,239 Cotton — Weather has been favorable for new crop preparations, which have progressed at a rate somewhat above the average at this season during the past several years. Scattered reports of an un official nature indicate intentions to plant contem plate acreages slightly larger than a year ago, how ever, carrying out of ideas in this regard will de pend on the weather. Soil conditions are favorable, the financial position of farmers is better than has been the case for several years, seed and labor sup plies are adequate and to date more than the usual amount of plowing has been done. Campaigns to reduce acreage have been started in a number of sections, but the effect of these on ultimate plant ings is problematical. Slack buying by mills, exten sive liquidation of speculative holdings and quiet ness in the goods market resulted in a decline in raw cotton prices to the lowest point since last August. Average prices, however, continued well above the corresponding period last year. Stocks of cotton in Arkansas warehouses on February 10 were 245,928 bales, against 412,203 bales on the cor responding date in 1927. T obacco — W eather during the past thirty days has been favorable for handling tobacco and sales in the loose leaf markets in both the burley and dark tobacco districts have been large. W ith continuance of these conditions, practically the entire crop will have been moved by the second week in March. This year’s market opened considerably higher than a year ago and prices for burley have steadily in creased until the general average to the middle of January was about $2.50 per hundred pounds higher than the opening quotations. This advance is not due entirely to increased quantity of fine tobacco, but as well to good prices paid for medium grades. In the one-sucker or air-cured dark district there remains only a small quantity in hands of farmers. Recent deliveries have been of ordinary quality, with prices higher on leaf and lugs. Manufacturing leaf has advanced sharply during the past few weeks. In the green river and stemming district the crop is m oving fast, with advancing prices on everything offered. Com m odity Prices — Range of prices in the St. Louis market between January 15, 1928 and Febru ary 15, 1928, with closing quotations on the latter date and on February 15, 1927. H igh , ,per bu. $1.33^2 1.27 y2 N o. 2 red winter ‘ 1.58 1.36 N o. 2 hard...... Corn .98M 1.00 July .................. .94 N o. 2 mixed.... .94 N o. 2 white.... Oats .60 N o. 2 white.... F lour bbl. 7.50 Soft patent...... 6.90 Spring patent. M iddling cotton.. ..per lb. .18 H H o g s on h o o f...... ..per cw t. 8.85 W heat Close Low Feb. 15, 1928 Feb. 15, 1927 $ 1 .2 9 ^ $1.31 $1.38 1.25% 1-27^4 1.51 1.56 $1.36 @ 1.38 1.30 $ 1 .3 1 K @ 1 .3 2 1.39 ,9 o y 2 .91 u .86 .86 .93^2@ .94 .94 .56 .57 6.90 6.65 .17'A 6.85 7.00 6.65 .82*4 .98^4 1.00 6.90 @ .58 @ 7 .5 0 @ 6 .8 0 .][7V* @ 8 .5 0 •7 6 @ .78 .49 6 .5 0 @ 7.00 7 .1 0 @ 7.15 .12*4 10.50@ 12.05 F IN A N C IA L Demand for credit for commercial and indus trial purposes during the past thirty days has been moderately active only. Throughout the district the supply of m oney has been considerably more than sufficient to take care o f all current needs, and, as has been the case for many months, financial institu tions in both city and country are seeking invest ment for their surplus funds. Liquidation has been on an extensive scale and widespread. February settlements with wholesalers and jobbers in the main centers of population were heavy, and these interests have been able to substantially reduce their bank commitments. Retail collections, usually heavy in February, have been particularly large this year, and as a result retailers’ credit needs have been reduced. Throughout the south, but particularly in the tobacco and rice sections liquidation at the banks has been on a large scale. Louisville banks report an active demand from their country cor respondents for commercial paper and other in vestments, and generally few country banks are finding it necessary to borrow from their city con nections. Through the south country banks have been relieved to a considerable extent of loans of long standing. The revival of activity in certain lines since the middle of January, notably the automotive and steel industries, has served to somewhat increase borrow ing in the large cities, and total loans of the report ing member banks advanced to a new high point for the year in the second week of February. D e posits of these banks also increased, and on the date mentioned were considerably higher than at the corresponding period last year. Loans on stocks and bonds decreased slightly during the period under review. B orrow ing by member banks from this institution averaged higher during the past thirty days than in the similar period immediately preceding. Reduced currency requirements follow ing the holidays were reflected in a decrease in note circulation o f this bank to the lowest point of the year. A slightly firmer trend in interest rates was noted this month, but actual quotations were un changed. A t the St. Louis banks the current rates of interest were as fo llo w s : Prime commercial loans 4 to 5% per cen t; collateral loans, A y to 5 y per cent; loans secured by warehouse receipts, 4 y to 5y2 per cent; interbank loans, to S y per cent, and cattle loans 5 y to 6 per cent. Federal Reserve Operations — During January the Federal Reserve Bank of St. Louis discounted for 158 member banks, against 166 in December, and 203 in January, 1927. Effective February 21, the discount rate of this bank was advanced from 3y2 to 4 per cent. *F eb. 21, 1928 Bills discounted..................................................... $29,251 Bills bought............................................................ 14,222 U. S. Securities.................................................... 31,918 *Jan. 21, 1928 $21,644 9,774 34,273 *Feb. 21, 1927 $20,491 9,491 22,004 Total bills and securities......................... $75,391 F. R . N otes in circulation................................ 52,674 Total deposits........................................................ 86,420 Ratio of reserves to deposits and F. R. N ote liabilities............................ 51.8% *In thousands (000 om itted). $65,691 54,293 87,441 $51,986 45,140 85,236 58.3% 64.8% Debits to Individual Accounts — The follow ing table gives the total debits charged by banks to checking accounts, savings accounts, certificates of deposit accounts, and trust accounts of individ uals, firms, corporations and U. S. Government in leading cities of the district. Charges to accounts of banks are not included. *Jan. 1928 E. St. Louis & N at’ l, Stock Yards, 111..$; 66,992 El Dorado, A rk ...... 10,301 Evansville, In d ..... 48,482 F ort Smith, Ark... 13,649 Greenville, Miss.... 3,868 3,719 Helena, A rk ........... Little R ock, Ark.. 81,610 Louisville, K y ........ 201,653 Memphis, T en n ...... 168.168 O w ensboro, K y ...... 7,644 Pine Bluff, A rk ..... 12,360 Q uincy, 111............. 12,348 St. Louis, M o....... 807,119 4,758 Sedalia, M o ............ Springfield, M o ..... 17,375 *D ec. 1927 *Jan. 1927 $ 65,772 8,586 52,663 14,995 4,358 4,979 92,524 201,523 195,466 6,671 16,342 13,769 858,340 4,911 16,093 $ 46,875 11,147 41,024 14,605 4,991 4,231 78,944 204,510 156,180 7,197 12,217 12,580 783,226 5,466 15,119 T otals............ $1, 460,046 $1,556,992 *In thousands (000 om itted). $1,398,312 Jan. 1928 com p, to D ec. 1927 J a n .1927 4- 1.9% + 2 0 .0 — 7.9 — 9.0 — 11.2 — 25.3 — 11.8 + 0.1 — 14.0 + 14.6 — 24.4 — 10.3 — 6.0 — 3.1 + 8.0 + 4 2 .9 % — 7.6 + 18.2 — 6.5 — 22.5 — 12.1 + 3.4 — 1.4 + 7.7 + 6.2 + 1.2 — 1.8 + 3.1 — 13.0 + 14.9 — 6.2 + 4.4 Condition of Banks — Loans and discounts of the reporting member banks on February 15, 1928 showed a decrease of 0.9 per cent as contrasted with January 18, 1928, and an increase of 2.9 per cent as compared with February 16, 1927. Deposits de creased 0.3 per cent between January 18 and Febru ary 15, and on the latter date were 4.5 per cent larger than on February 16, 1927. Composite statement fo llo w s: *F eb. 15, 1928 N um ber o f banks reporting................................ f3 0 Loans and discounts (incl. rediscounts) Secured by U . S. G o v’ t obligations............ $ 4,307 Secured by other stocks and b onds.......... 209,519 A ll other loans and discounts............ ........... 300,688 *Jan. 18, *F eb. 16, 1928 1927 t30 31 $ 4,198 212,215 302,743 $ 4,712 186,709 308,403 Total loans and discounts.................................. $514,514 Investments U . S. G ov’ t securities....................................... 83,790 Other securities................................................... 135,519 $519,156 $499,824 85,129 129,462 72,392 121,994 Total investments................................................... $219,309 Reserve balances with F. R . bank................ 50,983 Cash in vault............................................................. 6,958 Deposits N et demand deposits......................................... 429,215 Tim e deposits...................................................... 246,485 Government deposits......................................... 648 $214,591 50,627 7,517 $194,386 49,890 7,239 430,509 245,935 1,665 411,872 232,415 2,763 Total deposits...........................................................$676,348 $678,109 $647,050 Bills payable and rediscounts with F. R. bank Secured by U . S. G ov’ t obligations............ 9,369 3,935 4,150 A ll others........................................................... 6,040 5,836 1,218 *In thousands (000 om itted). fD ecreases due to consolidation. T hese 30 banks are located in St. Louis, Louisville, Memphis, L ittle R ock and Evansville, and their total resources com prise approxim ately 55.5 per cent o f the resources of all m ember banks in the district. (Compiled February 21, 1928) B U SIN E SS C O N D IT IO N S IN T H E U N IT E D S T A T E S Industrial production and shipments of commodities by railroads increased considerably in January from the low point reached at the end o f 1927. The general level o f wholesale com m odity prices show ed a slight decline. P R O D U C T I O N — T he increase o f 6 per cent in indus trial production from D ecem ber to January reflected a larger output o f manufactures, particularly of iron and steel and automobiles. Daily average production o f steel ingots in- the increase being particularly large for miscellaneous com modities. Com pared with January o f last year, however, loadings o f all classes o f com m odities, except livestock, were smaller. P R IC E S — T h e Bureau o f L abor statistics’ index num ber o f wholesale com m odity prices declined from 96.8 per cent o f the 1926 average in D ecem ber to 96.3 per cent in January. Prices o f farm and hide and leather products inpercen t percen t Miscellaneous K r \ r S / Total r V f RAILROAD 1FREIGHT CAI? LOADINGS ----------------1 1924 1925 1926 1927 1928 Ind ex number o f production of manufactures and minerals combined adjusted for seasonal variations (1923-25^ :100). Latest figure, January, 105. Cars of revenue freight loaded as reported b y the American Railway Association. Index numbers adjusted for seasonal variations, (1923-25 average =: 100). Latest figures, January, 100, miscellaneous 106. creased by over 25 per cent in January the largest monthly increase since 1924. Buying o f steel products by the rail roads and by the autom obile and construction industries was also active in January, and notwithstanding the large volum e o f production and shipments, unfilled orders showed an increase during the month. Since the first o f February production o f steel products has continued active. A utom obile production, which in D ecem ber was in smaller volum e than since 1922, increased considerably in January and wras only slightly smaller than in the same m onth in 1927. Cotton consum ption showed about the usual seasonal increase in January, follow in g substantial curtail ment in D ecem ber, and the w oolen and silk industries were som ewhat m ore active than in D ecem ber. Production of minerals, after adjustm ent for customary seasonal changes was in practically the same volum e in January as in D ecem ber. Building contracts awarded in January exceeded those for the corresponding month o f last year, and awards during the first half o f February w ere in practically the same vol ume as a year ago. T R A D E — Sales o f department stores showed more than the usual seasonal decline in January from the high creased, wThile prices o f meats and dairy products, textiles, fuels, nonferrous metals, and rubber declined. D uring the first tw o weeks o f February prices of grains, cotton, silk, and w ool advanced, while those o f cattle, sugar, and rubber declined. B A N K C R E D I T — F or the four weeks ending Febru ary 15, total loans and investments o f mem ber banks in leading cities showed a decline o f m ore than $200,000,000, the decline being almost entirely in loans on securities. From the peak at the turn o f the year this class o f loans decreased by nearly $460,000,000. Loans for com m ercial purposes, after a further decline in January, show ed a seasonal increase in the first tw o weeks o f February. The decline in volume o f loans since the first o f the year has been accom panied by a corresponding decline in net de mand deposits, while time deposits have continued to in crease. At the reserve banks the total volum e o f member bank borrow in g declined seasonally during the opening week o f the year and reached a low point on January 25, but increased by about $70,000,000 between that date and February 21. This increase in discounts accompanied sm all er reductions in the reserve banks holdings o f United States 1924- 1925 1926 1927 1928 Latest W eek ly rates in N ew Y ork m oney m arket: Commercial paper rate on 4-to-6 months paper and acceptance rate on 90-day paper. levels reached in D ecem ber, and averaged slightly smaller than in January o f last year. Sales o f mail order houses, on the other hand, were about 6 per cent larger than a year ago. W h olesale trade in nine leading lines averaged larger than in January o f last year. Stocks o f groceries and hardware carried by wholesale firms were smaller than a year ago, but reports in other lines indicated that stocks w ere som ewhat larger. Freight car loadings for all groups o f commodities were larger in January than in Decem ber, securities and acceptances, and the total volum e o f reserve bank credit in use show ed an increase for the four weeks. D uring the four weeks ending February 21, a firmer tendency in the m oney market was indicated by increased rates on call and time loans and b y a further increase from 3H Per cent to 3lA per cent in the rate on 90 day bankers’ acceptances. Between January 25 and February 21 discount rates at eleven Federal reserve banks were advanced from 3t/2 per cent to four per cent. M onthly averages o f daily figures for 12 Federal reserve banks. figures are averages o f first 22 days in February.
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