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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, T rade and Finance Released for Publication on Morning of February 29, 1940 FEDERAL RESERVE BANK Recent scene from southern Illinois oil field OF ST. LOUIS SUMMARY OF EIGHTH D IST RI CT Live Stock: Receipts at National Stock Yards -------Shipments from aforesaid Yards-------Production and Distribution: Sales by mfrs. and wholesalers.......... Department store sales.......................... Jan., 1940 comp, with D ec., 1939 Jan., 1939 + 7.8%+ 31.5% , + 18.5 + 30.1 . . , + 17.9 — 54.2 . + 1.7 , . . + + + 5.6 3.9 7.1 Building and Construction: « . . . f Number. . . . — 27.9 ___ 36.0 Bldg. permits, mcl. repairs | — 21.1 .— 20.2 Value construction contracts awarded. . . . — 90.2 — 2.5 Miscellaneous: r• t r -1 f Number............ . . . - 0 - + 21.9 Commercial failures \ Liabiiities + 21.6 — 6.7 Consumption of electricity.................... — 5.3 + 17.6 — 14.1 + 9.9 Debits to individual accounts.............. — 12.0 — 35.2 Life Insurance Sales............................ Member Banks (24): Gross deposits....................................... Loans....................................................... Investments............................................. Feb. 14,’40 comp, w ith Jan. 17, ’40. Feb. 15, ’39 + 0.8%+ 13.2% — 1.2 + 7.7 + 0.5 — 7.6 U S IN E S S activity in the E ighth Federal Re serve D istrict during January and early Feb ruary continued ahead of the corresponding period a year ago, but slackened som ew hat during the period under review. A composite survey of data supplied by commercial and industrial inter ests, taking into consideration seasonal adjustm ents from December to January, revealed activity during January equal to, if not slightly better than, Decem ber in lines of distribution, while production was retarded. The increase in distribution, notw ith standing the sub-norm al tem peratures during m ost of the period, was evidenced in alm ost all of the reporting centers. Retail trade, as reflected by sales of departm ent stores in the principal cities, during January was 3.9 per cent more than in January, 1939, and 54.2 per cent less than during December, 1939. M erchandise inventories on F ebruary 1 were 7.4 per cent more than on the corresponding date in 1939. D istribu tion through wholesale channels during January was 17.9 per cent and 5.6 per cent more, respec tively, than a m onth and a year earlier. Inventories of the various wholesalers and jobbers at the end of January continued well ahead of the corresponding date last year and increased slightly since the end of 1939. Retail sales of passenger autom obiles in the St. Louis area in January were 25.0 per cent more and 4.1 per cent less, respectively, than in December and January a year ago. B Operations at iron and steel plants decreased dur ing the latter p art of January and eajly February, production at m id-February being at 68 per cent of Page 2 capacity. Because of the extrem ely low tem per atures output of bitum inous coal at mines in this area in January exceeded th at of the preceding m onth by 33.2 per cent and was 32.8 per cent greater than January, 1939. Production of oil in fields of the district continued to increase during the m onth. O utput at Illinois fields for the year 1939 was the largest during the history of the state. The value of construction contracts let in the dis trict was 2.5 per cent less than during January of last year, and considerably under the December, 1939, figure, which included a project under con struction by the Tennessee Valley A uthority. T he value of perm its issued in the larger cities of the district for new construction and repairs declined during January as compared w ith a m onth and a year earlier. Consum ption of electric power by industrial users in the principal centers in January was 5.3 per cent less than in December and 17.6 per cent more than in January last year. Freight traffic of railroads operating in this district was som ew hat greater in January and the first tw o weeks of F ebruary than in the sim ilar period a year ago. Debits to individual accounts by banks in the reporting centers were 14.1 per cent less than in December, but 9.9 per cent more than during January, 1939. According to the U. S. Bureau of A gricultural Economics, farm ers of the E ighth D istrict received approxim ately 2.5 per cent more cash income during 1939 compared w ith cash income during 1938. W eather conditions during January were below average, w ith considerable snow and ice covering m ost parts of the district. Activities on farm s were reduced to a minimum. M arketing of the tobacco crop was practically completed during the period and the average price was lower than the average received last year and the year before. M ovement of livestock to m arkets during January was in larger quantities than last m onth and last year. Condition of w inter w heat as a result of the heavy snows and freezes cannot be determ ined until a thaw occurs. Early truck crops in the southern tiers of the district also felt the effects of the w eather. Because of the fall drouth in A rkansas acreage of straw berries is less than average. Commercial failures in the E ighth Federal Re serve D istrict in January, according to Dun and B radstreet, num ber 39, involving liabilities of $500,000, against 39 defaults w ith liabilities of $392,000 in December and 32 insolvencies for a total of $536,000 in January, 1939. D E T A I L E D S U R V E Y OF D IS TR IC T M A N U F A C T U R IN G A N D W H O L E S A L IN G Lines of Commodities N et Sales Stocks D ata furnished by Bureau of Census, U . S. Dept, of Commerce. January, 1940 compared w ith D ec., ’39 Jan., ’39 Jan. 31, 1940 comp, w ith Jan. 31, 1939 Autom otive Su p p lies......... Boots and S h o es................... D ry G oods.............................. Electrical S u pplies.............. Furniture................................ G roceries................................ Hat d w are.............................. Tobacco and its Products. M iscellaneous....................... + 12.4% — 91.7 — 31.5 — 38.7 — 41.6 + 1-3 — 13.5 — 19.1 — 6.0 — 61.3% + 1.0 + 1.8 — 7.9 — 10.8 + 6.1 + 0.8 + 7.2 + 28.9 + 11.1 + 25.2 — 2 3 .4 — 0.8 + 2 4 .4 + 2 6 .4 + ii* 3 In a m ajority of lines investigated, January sales of wholesalers and jobbers were higher than a year earlier. Exceptions were electrical supplies and fur niture. Boots and shoes and dry goods registered substantial gains, which were seasonal in character, over the preceding m onth. The increase in sales of groceries and the decrease recorded by furniture and hardw are compared w ith December sales, were contra-seasonal. Inventories as of February 1 were 21.4 per cent larger than on the same date in 1939, and 1.3 per cent more than on January 1 this year. D istrict shoe production, as indicated by prelim inary figures, increased 18.4 per cent during January. Autom obiles—Com bined passenger car, truck and taxicab production in the U nited States in January totaled 432,101, as against 452,024 in December and 339,152 in January, 1939. Iron and Steel P roducts — Activities in the iron and steel industry in this area since the beginning of the year have been rather sluggish. H ow ever, it is expected th at m arked im provem ent will be shown during the second quarter. In view of the stable price situation, consumers have been proceeding with caution, buying only to round out inventories or for actual requirem ents for specific jobs. Ingot production reflected this situation by a decrease during the period from 83 per cent at m id-January to 68 per cent at m id-February. Shipm ents of pig iron have been off approxim ately 20 per cent since the first of this year due to the falling off of the melt. They have not kept pace w ith the m elt because of heavy takings in the last quarter of 1939. T here have been no cancellations, b ut some shipm ents scheduled for January and F eb ruary have been held up. Inventories are up and sufficient for present needs. T here has been a pickup in m elt by grey iron foundries, but not large enough to offset decreases elsewhere. The cold w eather retarded sales at warehouses of galvanized sheets, but w ith the rise in tem perature jobbers report more business in this line. Before m aking new com m itm ents they desire a further liquidation of their stocks. In order to round out inventories, there has been a slight pickup in the demand for strip steel. There have been fairly heavy sales of scrap iron at lower prices. The m ovem ent has been much freer since the m oderation of the w eather in early Feb ruary. Inventories as a whole are in good shape. For the entire country, total output of pig iron in January, according to the m agazine “Steel”, am ounted to 3,595,467 tons, which compares with 3,767,605 tons in December, a decrease of 172,138 tons, or 4.5 per cent. In January, a year ago, output totaled only 2,175,423 tons. R elating production to capacity, operations in January averaged 87.1 per cent. This compares w ith 88.5 per cent in December, 90.3 in November, 85.2 in October, and 51.0 per cent in January, 1939. Steel ingot production in the U nited States in January totaled 5,017,588 tons, against 5,164,420 tons in December and 3,174,352 tons in January, 1939. R E T A IL T R A D E D epartm ent Stores — The trend of retail trade in the E ighth D istrict, as reflected in statistics of departm ent stores in the principal cities which report to this bank, is shown in the following comN et Sales January, 1940 compared with D ec., 1939 Jan., 1939 Ft. Smith, A r k .. . . L ittle Rock, Ark. L ouisville, K y .. . . Memphis, T e n n ... Pine Bluff, A r k ... Quincy, 111............. St. Louis, M o .. . . Springfield, M o .. . A ll Other C itie s.. 8th F . R. D istrict — 61.8% — 60.9 — 64.0 — 59.4 — 65.8 — 65.2 — 48.9 — 62.2 — 62.0 — 54.2 + 10.1% + 6.9 + 6.6 + 2.6 — 0.2 — 2.5 + 3.5 — 1.4 + 16.2 + 3.9 Stocks on Hand Jan. 31/40 comp, with Jan. 31/39 + 7.2% + 2.8 + 10.0 + 12.6 + 4.2 — 2.9 + 6.7 + 7.7 + 4.3 + 7.4 Stock Turnover Jan. 1, to Jan. 31, 1940 1939 .19 .23 .28 .27 .18 .24 .35 .20 .26 .31 .19 .23 .28 .29 .19 .24 .36 .22 .22 .32 Percentage of accounts and notes receivable out standing January 1, 1940, collected during January, by cities : Installm ent E xcl. Instal. A ccounts A ccounts Fort S m ith ............... c, L ittle R o c k .. . . 13.7 L o u isv ille ......... 14.9 M em phis............25.3 34.8® 30.6 49.4 43.3 Installm ent E xcl. Instal. A ccounts Accounts Q uincy...........................°/ 51.1% St. L o u is.............. 21 .4 57.5 Other C ities......... 15.0 49.1 8th F. R. D istrict 20..2 50.7 Specialty Stores — January results in m en’s fur nishings and boot and shoe lines are shown in the following ta b le : Stocks Stock N et Sales January, 1940 compared with D ec., *39 Jan., ’39 M en’s Furnishings. — 54.1% B oots and S h o e s ... — 52.9 + 13.6% i— 3.4 on Hand Jan. 31/40 comp, with Jan. 31,’39 + 15.4% + 14.3 T um over Jan. 1, to Jan. 31, 1940 1939 .21 .41 .21 .47 Percentage of accounts and notes receivable out standing January 1, 1940, collected during Jan u ary : M en’s F u rn ish ings.....................36.0% Boots and S h oes........................40.3% Page 3 M IN IN G A N D O IL Coal — D uring the last quarter of 1939, stocks of bitum inous coal in the hands of industrial con sumers and retail dealers increased 20.2 per cent. On January 1 these stocks am ounted to 44,402,000 tons, an increase of 3,682,000 tons, or 9 per cent, over the total for January 1, 1939. T he advance in bitum inous coal reserves during the OctoberDecember period was more than m atched by the concurrent rise in industrial consum ption and retail deliveries. January production of soft coal in the U nited States, according to the Bitum inous Coal Division of the U. S. D epartm ent of the Interior, totaled 46,155,000 tons, as against 37,283,000 tons in Decem ber and 35,750,000 tons in January, 1939. Produc tion at mines in this general area during January was 33.2 per cent greater than in December, and 32.8 per cent more than in January last year. A t Illinois mines 5,522,343 tons were lifted in January, as against 4,318,953 tons in December and 4,423,376 tons in January, 1939. T here were 116 mines in operation in January w ith 30,358 men on payrolls, against 108 active mines and 27,345 oper atives in December. Petroleum — December output of crude oil in states of the E ighth D istrict was 4.5 per cent greater than in Novem ber and 89.5 per cent more than in December, 1938. T otal production in 1939 exceeded th a t of 1938 by 149.6 per cent. This increase reflects extensive developm ents during the year in the new Illinois fields, output during 1939 being the greatest in the state's 35-year history. Stocks on December 31 were 2.0 per cent and 7.8 per cent greater, respectively, than a m onth and a year earlier. Detailed production and stocks by states are given in the following ta b le : _____ Production_____ (I n thousands of barrels) D ec., 1939 Stocks N ov., 1939 D ec., 1938 _ C umulative 1939 1938 D ec. 31, D ec. 31, 1939 1938 Arkansas................ 2,141 2,071 Illin o is....................... 10,732 10,222 Indian a..................... 247 222 K entucky................ 449 472 T o ta ls.................. 13,569 12,987 1,556 3,992 90, 523 7,161 21,143 18,180 94,302 24,0,75 1,443 995 5,581 5,821 122,469 49,071 1,907 2,447 12,983 11,752 3,698 3,190 1,389 1,144 19,977 18,533 T R A N SP O R T A T IO N Freight traffic handled during January and the early p art of February, according to officials of rail roads operating in this area, was larger than during the corresponding period last year. T he St. Louis Term inal Railway Association, which handles inter changes for 28 connecting lines, interchanged 85,725 loads in January, compared w ith 84,309 loads in December and 80,046 loads in January, 1939. D uring the first nine days of February the interchange am ounted to 25,097 loads, which compares w ith Page 4 23,321 loads during the corresponding period in Ja n uary and 24,477 loads during the first nine days of F ebruary last year. Passenger traffic of the report ing lines in January increased 3 per cent in num ber of passengers carried and 5 per cent in revenue as compared w ith the same m onth in 1939. F or the entire country, loadings of revenue freight during the first five weeks this year, or to F ebruary 3, totaled 3,212,419 cars, against 2,861,857 cars for the sim ilar period in 1939, and 2,821,457 cars in 1938. E stim ated tonnage of the Federal Barge Line be tween St. Louis and New O rleans in January was 83,600 tons, against 127,833 tons in December and 183,449 tons in January, 1939. T he decrease in ton nage handled during January was caused by ice gorges in the river which obstructed navigation. W H IS K E Y T here were 36 distilleries out of 60 in operation in K entucky at m id-February, an increase of eight active plants since the preceding m onth. T here have been no m aterial changes or developm ents reported in prices or in the industry during the past th irty days. Consum ption of bottled-in-bond whiskey reached a peak during December, 1939. A pprox im ately one-fourth of all whiskey consumed in 1939 was bonded whiskey. D uring January there was a surprisingly favorable but unseasonal reaction in a heavy demand for four-year-old whiskies. Consum ption of all whiskies in the country as a whole increased slightly over 8 per cent during 1939 compared w ith 1938, 75,000,000 gallons being con sumed during 1939, against 69,000,000 gallons in 1938. A G R IC U L T U R E Farming Conditions—W eather conditions during the greater p art of January were such as to ad versely affect the advancem ent of fall sown grains and the various types of farm operations. Condi tioning of fields has been ham pered during the period, but w ith improved w eather conditions gen erally, w ork will soon get under way in parts of the district. T he snow covering in states of this district will tend to supply an added beneficial m oisture. A ccording to estim ates of the U. S. D epartm ent of A griculture, em ploym ent on farm s as of F eb ruary 1 was about 2 per cent larger than th at reported a m onth earlier and 1.5 per cent sm aller than on February 1 last year. N otw ithstanding the increase from January 1 to February 1, this was the lowest total for the latter date in the past fifteen years. Prices during the latter part of Jan u ary and early F ebruary rem ained fairly close to the levels of the same period a m onth earlier, except in the case of livestock which decreased slightly. As of February 10 the farm products group of the U. S. Bureau of Labor Statistics index stood at 68.9 per cent of the 1926 average, as against 69.6 per cent on February 3 and 66.7 per cent on February 11, 1939. Farm ers in states partly or entirely w ithin the E ighth D istrict received a total cash farm income, including Governm ent benefit paym ents, of $1,690,357,000 in 1939, according to estim ates of the U. S. Bureau of A gricultural Economics. This represents an increase of 2.5 per cent, or $40,942,000, compared w ith the cash income received in 1938. In Illinois and Indiana larger income from crops and Govern m ent paym ents more than offset declines in income from livestock. Cash farm income and Government paym ents increased in M issouri. K entucky income decreased largely because of the m arked reduction in prices received for tobacco. In Tennessee income from both cotton and tobacco was som ew hat smaller than last year, while in M ississippi and Arkansas the decline was largely the result of lower returns on the cotton crop. Detailed figures by states are given in the follow ing table: (I n thousands of dollars) ______________________1939_______________________ Incom e from Cash InIncom e L ivestock Cash Govt, come and from and its Farm PayGovt. Crops Products Incom e m ents Paym ents In d ia n a......... $ Illin o is......... M issouri___ K e n tu c k y ... T en n essee..,. M ississip p i.. A r k a n s a s... 1938 Cash Income and Govt, Paym ents 64,155 $195,778 $ 259,933 $ 20,885 $ 280,818 $ 272,075 188,818 296,124 484,942 46,454 531,396 496,306 62,611 185,793 248,404 28,132 276,536 248,876 66,762 72,467 139,229 10,995 150,224 165,709 58,470, 56,611 115,081 15,713 130,794 138,857 102,196 30,435 132,631 34,330 166,961 173,293 91,628 34,093 125,721 27,907 153,628 154,299 634,640 871,301 1,505,941 184,416 1,690,357 1,649,415 Cotton — In states of this district, cotton ginned from the 1939 crop prior to January 16, 1940, was 3,765,044 bales, which compares w ith 3,770,034 bales for the same period a year earlier and 5,125,823 bales in 1938. Adverse w eather conditions have tended to hinder preparation for planting the new crop. According to statistics compiled by the National F ertilizer Association, total fertilizer consum ption in states of the E ighth D istrict in 1939, as indicated by the sale of tax tags, was 3.9 per cent larger than in 1938, but about 3.7 per cent less than in 1937. In the St. Louis m arket the m iddling grade ranged from 9.90c to 10.65c betw een January 15 and Feb ruary 15, closing at 10.60c on the latter date, which compares w ith 10.50c on Jan u ary 15 and 7.85c on F ebruary 15, 1939. Combined receipts at A rkansas and M issouri compresses from A ugust 1, 1939, to F ebruary 16, 1940, totaled 1,761,724 bales, as against 1,539,821 bales during the corresponding period a year earlier. Shipm ents during the period am ounted to 1,718,329 bales, against 739,718 bales m the previous season. Stocks on hand as of February 16 were 1,399,480 bales, compared w ith 1,616,786 bales on the corres ponding date in 1939. Fruits and Vegetables — According to the U. S. D epartm ent of A griculture, intended acreage of early Irish potatoes to be planted in M issouri and Kentucky is approxim ately 3.4 per cent less than last year’s acreage and 20 per cent less than the 10year (1929-1938) average. T he acreage of straw berries for harvest in 1940 in Mississippi, A rkansas and Tennessee is 7.6 per cent sm aller than the acre age planted a year earlier and 10.2 per cent less than the 10-year average. These decreases are due m ainly to the drouth last fall in A rkansas. Stands of straw berries may have been thinned by the killing of the weaker crowns, due to the cold weather, but no great loss is expected. Total commercial acreage of 22 truck crops in the United States during 1939 was 8.6 per cent and 12.4 per cent less, respectively, than acreage planted in 1938 and 1937. Livestock — T he num ber of cattle on farm s in states including this district on January 1, 1940, was approxim ately 6 per cent larger than a year earlier and about 12 per cent above the 10-year (1929-1938) average. D uring the past year the num ber of hogs on farms increased approxim ately 18 per cent, which represents one of the largest num erical in creases on record. T he value per head during 1939 of $7.79 was considerably below the 1938 average of $ 11.21 . Operations in a good p art of the district were curtailed during the past m onth due to the extrem e weather. Prices of m ost grades of livestock declined during January and early February. A t the N ational Stock Yards receipts during January increased approxim ately 32 per cent over last January and 8 per cent over the previous m onth. Milk production as of February 1 was about 9.7 per cent over the corresponding date in 1939, and about equal to the 10-year (1929-1938) average. Receipts and shipm ents at St. Louis as reported by the National Stock Y ards were as follow s: _________ Receipts________ Jan., 1940 Cattle and C alves......... H o g s ................................ H orses and M ules___ Sheep................................ T o ta ls........................... D ec., 1939 Jan., 1939 90,614 84,372 82,919 325,511 292,512 223,276 1,598 2,735 5,601 42,006 46,959 37,939 459,729 426,578 349,735 ______ Shipments_______ Jan., 1940 D ec., 1939 Jan., 1939 50,380 51,630 50,438 201,991 159,269 135,528 2,20.5 1,570 5,867 5,455 6,926 8,027 260,031 219,395 199,860 Tobacco — A t m id-February over half of the burley m arkets in K entucky were closed, representing all but the end of the burley m arketing season. Sales reported to date show th at 292,575,000 pounds Page 5 of tobacco have been sold at an average of $17.87 per cwt., compared w ith total sales last year a little over 350,000,000 pounds at $19.10 per cwt., and 419,000,000 pounds in 1937 at $20.09 per cwt. The quality of tobacco sold during the last week of the m arketing season was not quite as good as th at sold earlier, as sales contained a larger percentage of lower quality grades and a smaller percentage of the better quality grades. In the Green River and stem m ing districts about 50 per cent of the crop has been moved, with approx imately 10,000,000 pounds reported sold at a gen eral average price of $7.80 per cwt. The average price on the Owensboro m arket was $7.48 per cwt., Henderson, $8.32, and Madisonville, $6.91. Finer grades of tobacco are reported at a higher price than earlier in the season, w ith a slight advance also reported in medium grades. W eather conditions have prevented a large vol ume of tobacco reaching the dark fired markets. All grades of tobacco are reported in strong demand, particularly cigar w rappers and all classes of leaf, seconds and lugs for cutting purposes. The quality of offerings generally appears only fair, containing a large percentage of light brown to light colored tobacco. A uction sales w ith m oderate offerings thus far in the E astern D istrict show an average price around $10.70 per cwt., with limited sales also reported in the W estern D istrict at an average price of $7.50 per cwt. I t is believed that adverse foreign exchange conditions will affect the dark fired tobacco m arket, but will have no effect on the burley market. All grades of the one sucker type were reported in active demand, w ith prices showing slight ad vances on recent sales. It is reported th at the aver age price has been about $7.35 per cwt., w ith sales of approxim ately 10,000,000 pounds. On January 1, 1940, stocks of leaf tobacco owned by dealers and m anufacturers in the United States and Puerto Rico am ounted to 2,718,586,000 pounds, compared w ith 2,342,875,000 pounds on the first day of 1939. Winter W heat — Effects of the sub-zero weather during January on the crop cannot be determined until a period of thaw ing or grow ing weather occurs. F or a good part of the m onth a quite heavy layer of snow rem ained over a large section of the winter w heat belt. W arm er w eather during the early part of February reduced the snow covering in some sections, and the alternate freezing and thaw ing was unfavorable to the crop. According to a report of the Commodity Credit Corporation, in states included in this district, as Page 6 of F ebruary 1, there were under federal loan 394,014 bushels of w heat on farm s and 13,877,831 bushels in warehouses, for a total loan stock in the E ighth D istrict of 14,271,845 bushels. C O M M O D ITY PR IC ES Range of prices in the St. Louis m arket betw een January 15 and F ebruary 15, 1940, w ith closing quotations on the latter date and on February 15, 1939, follow s: Close Low H igh W heat *M ay..................... per bu. $ .9 8 ^ “ .9 6 ^ *July..................... “ .9 5 ^ *Sept.................... 1.04y2 N o. 2 red wintett “ 1.04 No. 2 hard “ “ Corn “ .5 6 ^ *M ay................ “ *July................ .5 6 K “ .567/8 *Sept................ “ .6 s y 2 N o. 2 m ix e d .. .. .64 H N o. 2 w hite. . . . Oats “ *M ay ..................... .3934 “ .3434 *July..................... “ .325/8 *Sept.................... .45 N o. 2 w h ite . . . . Flour Soft paten t. . . . per bbl. . .6.70 “ 6.10 Spring “ ......... .1065 M iddling C otton.. per lb. cwt. 5.58 H ogs on H oof. . .per ._ ^Nominal quotations. Feb. 15, 1940 $ .9224 .90 •89J4 1.02 1.00^4 .9 6 ^ •94J4 .9 3 ^ 1 .0 4 ^ 1.04 $ $ .64 H .64 H .6 5 H .73 .:72Yt .5 33/4 .5 4 ^ .54 3/4 .6 3 /2 .6 4 /2 •45J4 A6H .4 7 /s .48*4 •5024 •393/4 .34U .32H .45 .2 7 ^ .2 5 ^ •25*6 .31 5.90,@6.60 5.75 @ 6.00 .1060 5.38 3.90@ 5.25 5.25@ 5.55 .0785 7.83 .52*4 .52 .S25/8 .58 .63 .3724 .32^4 .30^4 .43^2 5.90 5.75 .0990 5.23 Feb. 15, 1939 B U IL D IN G The dollar value of perm its issued for new con struction in the five largest cities of the district in January was 18.2 per cent less than in December, and 20.5 per cent less than in January, 1939. Accord ing to statistics compiled by the F. W . Dodge Cor poration, construction contracts let in the E ighth D istrict in January am ounted to $12,923,000, which compares w ith $132,164,000 in December and $13,261,000 in January, 1939. T he December figure includes $117,000,000 for a dam under construction by the T.V.A. Building figures for January follow: N ew Construction Permits 1940 1939 (C ost in thousands) E v a n s v ille .. L ittle R ock . L o u isville. . . Memphis S t .L o u is .. . . Jan. T o ta ls. . 1 28 22 224 45 320 8 20 55 244 127 454 Repairs, etc. Cost 1939 1940 $ 2 206 335 374 481 1,398 Permits 1940 1939 $ 22 83 888 389 376 1,758 41 47 8 94 64 254 59 96 38 132 118 443 1940 Cost 1939 $ 29 29 44 58 109 269 $ 44 17 26 143 101 331 C O N SU M P T IO N O F E L E C T R IC IT Y Public utilities companies in six large cities of the district report consum ption of electric current by selected industrial custom ers in January as being 5.3 per cent less than in December and 17.6 per cent g reater than in January, 1939. Detailed figures follow : (K . W . H . in thous.) N o. of Jan., D ec., C ustom 1940 1939 ers K .W .H . K .W .H . E vansville. . . . . . 40 L ittle R ock .., , 35 82 , , . , 31 Pine B luff. .. . . . 20 . . . .217 . 425 3,765 2,006 9,897 2,528 1,183 21,946 41,325 3,778 2,055 9,285 2,369 1,268 24,904 43,659 Jan., January, 1940, 1939 compared with K .W .H . D ec., 1939 Jan., 1939 2,937 1,810, 8,227 2,113 848 19,208 35,143 — 0.3% — 2.4 + 6.6 + 6.7 — 6.7 — 11.9 — 5.3 + 28.2% + 10.8 + 2 0 .3 + 1 9 .6 + 3 9 .5 + 1 4 .3 + 17.6 BA N K IN G A N D F IN A N C E T here has been a slackening in the demand for credit during the latter part of January and early February. In the rural areas it is anticipated th a t there will be more of a demand for credit for crop raising purposes a little later. T here has been in the main a fairly heavy liquidation of loans of the var ious types. Tobacco warehousem en are rapidly liquidating their loans, and at this tim e some have already become free of debt. This is due to the fact th at the tobacco loose-leaf sales season this year was the shortest of record. T here was practically no change in loans to grain handlers and flour milling interests. M ember Banks — T otal loans and investm ents of reporting m em ber banks in the principal cities as of February 14 were at about the same figure as a m onth earlier. T otal loans decreased slightly under the m onth previous, and investm ents recorded a small increase during the same period. Commercial loans accounted for approxim ately 3 per cent of the decrease in the loan item, w ith loans of other types increasing 1.2 per cent. T otal loans were still about 7 per cent larger than on the same report date a year earlier. Gross deposits increased to a new all tim e high on F ebruary 14, and on th at date were 0.8 per cent and 13.2 per cent larger, respectively, than a m onth and a year earlier. Reserve balances held by these banks also attained a new all time high on the same report date, being 58 per cent above the corresponding date last year and 11 per cent more than a m onth earlier. Statem ent of the principal resource and liability items of the reporting m ember banks follow s: Change from Feb. 14, Jan. 17, Feb. 15, (I n thousands of dollars) 1940 1940, 1939 C om m ercial,industrial,agricultural lo a n s .. . $194,370 — 5,561 + 1 6 ,8 5 4 Open market paper.............................................. 11,041 + 1,499 4* 7,257 Loans to brokers and dealers.............. 4,516 — 737 — 1,595 Other loans to purchase and c a n y securities. 12,261 — 110 + 418 Real E state loans................................................... 51,702 -f215 4 3,470 Loans to banks..................................................... 1,350 — 227 — 5,427 Other lo a n s.............................................................. 57,928 + 952 + 2,859 Treasury b ills......................................................... 16,029 + 1 3 ,1 8 9 + 1 2 ,7 5 9 Tieasury n o tes....................................................... 34,371 — 1 9,912 — 41,606 U . S. bonds.............................................................. 139,386 — 571 — 10,191 Obligations guaranteed by U .S . Government 70,550 + 190 + 7,478 Other securities....................................................... 102,895 — 1,268 4 1,652 Balances with domestic b an ks......................... 194,050 — 5,465 4 4 9 ,6 4 8 Demand deposits— adjusted*............................ 486,973 + 9,866 + 44*697 Time deposits......................................................... 189,610 — 239 — 29 U. S. Government deposits.............................. 17,666 — 350 — 643 Inter-bank d e p o s its .............................................. 376,067 + 7,719 + 8 6 ,6 8 2 B o r r o w in g s ..................................................................................................... .............. * Other than inter-bank and Government deposits, less cash items on hand or in process of collection. A bove figutes are for 24 member banks in St. Louis, Louisville, M em phis, L ittle Rock and E vansville. Their resources comprise approximately 62.0% of the resources of all member banks in this district. T he aggregate am ount of savings deposits held by selected m em ber banks on F ebruary 7 was slightly less than on January 3 and 2.4 per cent larger than the total on February 1, 1939. Interest rates rem ained unchanged. A t down town St. Louis banks as of the week ended Feb ruary 15, rates charged were as follows: Custom ers’ prime commercial paper, IH to 5H per cent; col lateral loans, 2V2. to 6 per c e n t; loans secured by warehouse receipts, 1H to 5H per cent and inter bank loans, 2 V2 to 5H per cent. Federal Reserve Operations — The volume of the m ajor operations of the Federal Reserve Bank of St. Louis, during January, 1940, is indicated below: (Incl. Louisville, Memphis, L ittle Rock branches) Pieces Checks (cash item s) handled................................ 5,360,329 Collections (non-cash item s) han dled................ 102,950 Transfers of fu nds....................................................... 4,443 Currency received and counted............................ 10.,720,744 Coin received and counted....................................... 12,668,647 Rediscounts, advances and com m itm ents......... 11 N ew issues, redemptions, and exchanges of securities as liscal agent of U . S. G ov’t., e tc .. 12,403 B ills and securities in custody— coupons clipp ed. 10,534 Amounts $1,044,849,064 32,723,425 319,650,197 35,186,183 1,315,428 238,884 31,246,895 Changes in the principal assets and liabilities of this bank appear in the following ta b le : Feb. 17, 1940. (In thousands of dollars) 15 Industrial advances under Sec. 13b......... $ Other advances and rediscounts................ 188 Bills bought (including participations) . . U . S. securities.................................................. .’ I l l ’0 9 i Total earning a sse ts.................................. . 111,294 Change from Jan. 17, Feb. 17, 1939 1940 8 — 11 — 98 — 48 + — 2 — 8,732 — 59 — 8,644 Total reserves..................................................... . 449,184 Total deposits..................................................... 367,420 . 190,912 + 2 7 ,1 1 4 + 30,332 + 181 + 121,810 + 104,576 + 11,595 — 1 — 267 0.5% + 6.5% Industrial commitments under Sec. 13b. Ratio of reserve to deposit and F. R. N ote liab ilities......................... 151 80.5% + Following are the rates of this bank for accom modations under the Federal Reserve A ct: Advances to banks, secured by direct obligations of the United States, under paragraph 13 of Section 13. .1 Advances to member banks, under paragraph 8 of Sec tion 13, secured by direct obligations of the U nited States or by such Government guaranteed obliga >per annum tions as are eligible for collateial thereunder.................. Rediscounts and other advances to member banks i per annum under Sections 13 and 13a..................................................... Advances to member banks under Section 10b.................. ,2 < i per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the United States, under paragraph 13 of Section 1 3 . . . . .4 Rediscounts, purchases, and advances to member banks, nonmember banks, and other financing insti tutions, under Section 13b: (a) On portion for which such institution is obligated 354% per annum (b) On remaining portion.................................................. .4 % per annum Commitments, not exceeding 6 months, to member banks, nonmember banks, and other financing insti tutions, to rediscount, purchase, or make advances, under Section 13b....................................................................... flat Advances to established industrial or commercial f 4 % to businesses under Section 13b........................................... <5^% per annum .iy2( y2% The Bank of Keytesville, Keytesville, Mo., be came a member of the System on F ebruary 15. Debits to Individual Accounts — T he following comparative table of debits to individual accounts reflects spending trends in this district: (In thousands of dollars) Jan., 1940 a.t’1 Stock Yards, 111.. $ 35,0,70 El Dorado, Ark......... 6,315 Evansville, Ind.......... 35,551 Fort Smith, A rk . . . . 11,881 Greenville, M iss......... 5,707 1,921 Helena, Ark................. Little Rock, A rk .. . . 39,894 Louisville, K y ............. , 179,475 Memphis, T enn.......... , 151,601 Owensboro, K y .......... 7,475 6,826 Pine Bluff, Ark......... Quincy, 111.................. 8,282 595.060 St. Louis, M o.. . . 2,045 Sedalia, Mo.................. 13,672 Springfield, Mo. 7,272 Texarkana, Ark.-Tex. T otals....................... 1,108,047 (Completed February 24, 1940) Dec., 1939 $ 38,640 6,060 36,825 13,849 7,610 3,196 46,747 196,738 197,290 8,054 11,307 9,169 688.373 2,510 14,039 9,328 1,289,735 Jan., 1939 $ 31,820 5,849 30,193 12,244 4,938 1,626 35,321 164,564 134,027 8,10.4 7,494 7,461 541,570 1,895 13,831 7,160 1,008,097 Jan.,’40, comp, with D ec.,’39 Jan.,’39 — 9.2% + 4.2 — 3.5 — 14.2 — 25.0 — 39.9 — 14.7 — 8.8 — 23.2 — 7.2 — 39.6 — 9.7 — 13.6 — 18.5 — 2.6 — 22.0 — 14.1 + 10.2% + 8.0 + 17.7 — 3.0 + 15.6 + 1 8 .1 + 12.9 + 9.1 + 13.1 — 7.8 — 8.9 + 11.0 4- 9.9 4- 7.9 — 1.1 + 1.6 + 9.9 Page 7 N A TIO N A L SUMMARY O F B U S IN E S S 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 PRODUCTION PER CENT P ER CENT In January and the first half of February industrial activity declined from the high level reached in the latter part of 1939. Retail trade, which had been in large volume, decreased more than seasonally, while merchandise exports were maintained. Production — Volume of industrial production declined somewhat from December to January, and consequently the Board’s index, which allows for a considerable seasonal increase, dropped sharply from the high level of 128 reached in December to 120 in January. Data available for the first half of February indicate a further sharp reduction in the index. Index of physical volum e of production, adjusted for sea sonal variation, 1923-1925 average = 100. B y months, January, 1934, to January, 1940. L atest figure 120. FACTORY EMPLOYMENT Steel ingot production, wThich had been above 90 per cent of capacity during most of the fourth quarter of 1939, has declined steadily since the turn of the year and by the middle of February was at about 69 per cent of capacity. Plate glass production, which also reached high levels in the latter part of 1939, was reduced in January and lumber production showed a con siderable decrease owing in part to unusually cold weather in the Southern regions. Automobile production in January was larger than is usual at this season. In the later part of the month, however, and in the first half of February, as retail sales of new cars declined seasonally and dealers’ stocks, which had been lower than usual at the beginning of the year, rose rapidly, the output of cars declined. In the machinery industries activity was gen erally sustained at the advanced levels reached in December. Output of cotton textiles in January continued at about the high rate of other recent months, but production of woolen textiles declined further from the peak levels of October and November, and output of silk products remained in small volume. Activity at meat-packing establishments was maintained in January at the high level prevailing for several months. Coal production rose sharply, following a marked reduction in December, and was at about the high level reached last October. Output of crude petroleum continued in large volume. Index of number employed, adjusted for seasonal variation, 1923-1925 average = 100. B y months, January, 1934, to January, 1940. L atest figure 104. FREIGHT CAR LOADINGS Value of contracts awarded for both public and private construction declined considerably in January, according to reports of the F. W. Dodge Corporation. Awards for private residential building showed a greater than seasonal reduction and were lower than the level prevailing a year ago. Contracts for other private work declined somewhat but remained in larger volume than in the corresponding period last year. Employment — Factory employment and pay rolls, which had risen sharply during the latter half of 1939, declined by somewhat more than the usual seasonal amount from the middle of December to the middle of Jan uary, according to reports from leading industrial States. Distribution — Sales at department stores, variety stores, and mail-order houses in January declined more than seasonally from the high level of December. Total freight-car loadings showed a seasonal decline; shipments of miscellaneous freight and grain decreased, while coal loadings increased considerably. Index of total loadings of revenue freight, adjusted for seasonal variation, 1923-1925 average = 100. Miscellan eous, coal, and all other expressed in terms of points in the total index. B y months, January, 1934, to January, 1940. MEMBER BANKS IN 101 LEADING CITIES Foreign Trade — Exports of United States merchandise, which usually decline in January, were maintained this year at the high level reached in December. Shipments of cotton, which have been large in recent months, rose further, while exports of many industrial products declined. Exports to the United Kingdom increased sharply, owing mainly to larger cotton shipments. Reflecting principally acquisitions of foreign gold, the country’s monetary gold stock increased by $287,000,000 during January and by $132,000,000 in the first two weeks of February. Commodity Prices — Prices of copper, lead, and silk showed marked declines from the middle of January to the middle of February and there were smaller decreases in prices of some other basic industrial materials, such as steel scrap, wool, and textile yarns. Prices of foodstuffs, on the other hand, showed little change in this period. Government Security Market — Prices of United States Government securities declined slightly during the latter half of January from the recov ery peak reached early in the month, but regained part of these losses during the first half of February. W ednesday figures, September 5, 1934, to February 7, 1940. Commercial loans based on new classification begin ning M ay 19, 1937. Page 8 Bank Credit — Total loans and investments at reporting member banks in 101 leading cities rose during the five weeks ending February 7 as a result of increases in holdings of Government securities at New York City banks. Loans to security brokers and dealers and commercial loans declined. Demand deposits continued to increase during the period.
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