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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 Afternoon of January 29, 1926 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent E P O R T S to this bank covering business and industrial conditions during the past thirtydays reflect some irregularity. Retail trade and manufacturing as a whole made a relatively better showing than did the wholesale and jobbing lines. A t many of the chief industrial plants activi ties after the holidays and inventory period were resumed more rapidly than is ordinarily the case, and beginning the second week of this month opera tions in the iron and steel, furniture, packing, lum ber, and several lesser industries were at a rate slightly above the average during December. Manu facturers have a good volum e of advance orders on their books, sufficient in many instances to in sure the present rate of operations during the bal ance of the first quarter of the year. In addition there is a disposition in certain lines, notably boots and shoes, farm implements, and clothing, to make up stocks in anticipation of increased demand dur ing the spring and early summer. R W ith but few exceptions, reports from all sec tions of the district indicated an exceptionally large holiday trade. The turnover of merchants in the large centers was considerably above expectations, and resulted in a heavy volum e of reordering. Results in the smaller cities and in the country, while satisfactory, were relatively not as good as in the chief centers. Special sales held in early Janu ary by the department stores and retailers gener ally have met with excellent response, and resulted in a heavy m ovement o f goods into consumptive channels. The arrival of cold weather had a stimu lating effect on distribution of winter merchandise, especially apparel and fuels. Sales at the leading department stores o f the district in Decem ber were 6.7 per cent larger than for the corresponding month in 1924. W holesalers report a general disposition to hold off buying on the part of retail merchants or to take only sufficient goods to fill requirements from month to month. Advance orders for dry goods, boots and shoes, drugs and chemicals, and in some other lines are disappointing, and under those of the same time last year. W hile building permits issued in the five largest cities of the dis trict in December were under those of the preced ing month and a year earlier, construction opera tions continued active, and the total number and value of permits issued in 1925 in these cities were the largest on record. Developments in the agri cultural sections during the month were in the main favorable. Marketing of crops made good progress, and weather was auspicious for accom plishing much belated farm work. Generally through the district the employment situation continued satisfactory. There is some surplus of common labor, especially noticeable in the South, and temporary idleness was occasioned in the industrial centers by shutdowns for inventory and repairs. Resumption of manufacturing activi ties, however, has been accompanied by additions to working forces in some departments of the iron and steel industry and several other important lines. There was the usual increase in forces at the department stores during the holidays, and gains were reported in paper and printing establishments, the tobacco industry, and the coal fields. Textile plants are working full time for the most part, and heavier than the usual seasonal complement of workers is employed at quarries and cement plants. Skilled artisans in the building trades are fully employed, and follow ing the holidays full time activities have been resumed at mines and smelters in the lead and zinc belt. The fuel situation underwent distinct improve ment during the past thirty days, the principal fac tor being the low temperatures which prevailed throughout the district. Usual seasonal backward ness in buying of bituminous coal, incident to the holidays and inventory period, was largely offset by suspension of mining in the anthracite fields and the cold weather. There was a particularly active demand for dom estic coal, the sudden call from householders resulting in a rapid depletion of deal ers’ stocks, which in turn was reflected in increased orders at the mines. Accum ulations on track, which had begun to be burdensome a month earlier, were well cleared up, particularly in the Kentucky and Illinois fields. W ith inventory work completed industrial consumers are ordering more freely, and in spite of the large volum e of domestic coal being produced, prices of steam coals are holding firm. W orking time at the mines has been increased, with a number o f the active shaft mines getting four to six days per week. Railroad tonnage was reported generally satisfactory, with prices a shade better. Shipments of coke by by-product manufac turers in December, while below the high record of November, were larger than during any preceding December. Production of bituminous coal for the country as a w hole during 1925, according to the estimate of the U. S. Bureau of Mines, was 523,072,000 tons, which compares with 483,687,000 tons in 1924 and 564,565,000 tons in 1923. A ccording to officials of railroads operating in the district, freight traffic continues well above the seasonal average of recent years. T he total volume was swelled by a heavier m ovement of coal and coke, and continued gains were shown in merchan dise and miscellaneous freight. For the country as a whole loadings of revenue freight in 1925 were the largest in the history of American railroads. T he total, 51,177,962 cars, represented an increase of 2,643,529, or 5.4 per cent over 1924 and 1,365,849 cars or 2.7 per cent over 1923. T he year’s record traffic was handled with a minimum of transporta tion difficulties and virtually no car shortage. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, inter changed 217,627 loads in December, against 222,669 loads in Novem ber and 200,455 loads in D ecem ber, 1924. D uring the first nine days o f January the interchange amounted to 66,721 loads against 69,056 loads for the same time in N ovem ber and 61,411 loads in January, 1925. The total interchange for 1925 was 2,571,178 loads, a gain of 5 per cent over 1924. Passenger traffic of the reporting roads during Decem ber gained 1.5 per cent over the same month in 1924. Estimated tonnage of the Federal Barge line between St. Louis and New Orleans for Decem ber was 65,300 tons, com paring with 47,361 tons in N ovem ber and 54,229 tons in December, 1924. Reports relative to collections developed less uniform ly satisfactory conditions than obtained during the tw o or three months immediately pre ceding. Decem ber returns of retailers in the large cities were under expectation* but there has been considerable improvement since the first week of January. W holesalers report generally prompt settlements, with payments during Decem ber about on a parity with the corresponding month in 1924. There are some backward spots, however, princi pally in the coal areas and the typical grain pro ducing sections. Answers to 456 questionnaires addressed to representative interests in the various lines throughout the district showed the follow ing results: Excellent Good Fair Poor 4.3% December, 1925........... 5.7% 37.1% 52.9% November, 1925........... 4.4 49.6 40.5 5.5 December, 1924........... 7.7 33.6 50.0 10.7 Commercial failures in the Eighth Federal Reserve District during December, according to D un’s, numbered 80, involving liabilities of $1,323,752, against 74 defaults in November, with liabili ties of $5,173,004, and 100 failures for $2,133,944 in December, 1924. The per capita circulation of the United States on January 1, 1926, was $43.62, against $43.35 on Decem ber 1, 1925, and $44.03 on January 1, 1925. M AN U FA CTU R IN G A N D W H O L E S A L E Automobiles — Production of automobiles for the country as a whole during Decem ber fell 15.1 per cent below the output of November, but was 52.6 per cent larger than in December, 1924. Manu facturers reporting direct or through the National Autom obile Chamber of Commerce built 285,181 passenger cars in December, against 336,330 in N ovember and 182,007 in December, 1924. Trucks manufactured by the same companies in December numbered 33,262, which compares with 38,910 in N ovem ber and 26,603 in December, 1924. A s compared with the preceding month, Decem ber sales of automobiles exhibited the usual seasonal decrease, but the total for the month showed a heavy gain over that of December, 1924. Generally business was reported satisfactory and above expectations. The number of passenger automobiles sold for Christmas was large, and included a broad variety of makes. Since January 1 sales of new cars have been stimulated by the introduction of new models and the announcement by several important makers of substantial price reductions. Dealers report a disposition on the part of customers to postpone purchasing until after the automobile shows, generally held in late Janu ary and February. Stocks of new cars in dealers’ hands are in a large m ajority of instances light. Special efforts made to sell accessories through the holiday trade outlet met with marked success. Sales of new cars by 320 dealers scattered through the district during December were 37.5 per cent small er than in November, but 18.3 per cent larger than the Decem ber, 1924, total. Sales of accessories in Decem ber were 3.6 per cent below those of N ovem ber and 11.2 per cent larger than in December, 1924. Stocks of used cars were about the same as a month earlier. Buying of tires by both dealers and the public continues on a hand-to-mouth basis. Boots and Shoes — Decem ber sales of the 11 reporting interests were 34.5 per cent less than for the corresponding period in 1924, and 52.5 per cent below the total of November, 1925. Stocks on Janu ary 1 showed a gain of 43.3 per cent over those of Decem ber 1, and were 25.5 per cent larger than on January 1, 1925. T he sharp decline in sales from N ovem ber to Decem ber was accounted for largely by seasonal considerations, while the decrease under Decem ber, 1924, was due mainly to smaller future orders. A ccording to several of the most important firms, purchasing by their customers for spring merchandising is the smallest in recent years. Orders for prompt delivery are holding up well, and initial orders from salesmen w ho started on their trips early this month are satisfactory. Fac tory operation continues at high levels, and con siderable stock for late spring and summer is being made up. Except in the case of rubber footwear, prices showed no change w orthy o f note as com pared with the preceding thirty days. Clothing— Ordering of spring goods is reported fairly satisfactory, with the total of future business in excess of a year ago. Manufacturers and jobbers report reordering of heavyweight apparel below’ expectations, except in the case of men’s overcoats, which m oved in large volum e during the last half of Decem ber and the first weeks of this month. Special sales of retailers since January 1 have met with generally satisfactory response. Producers of overalls and the general line of work clothes report backwardness in ordering for forward shipment. Decem ber sales of the 10 reporting interests were 87.2 per cent larger than for the same month in 1924, but 44.1 per cent under the November, 1925, total. Drugs and Chemicals — No change worthy of note developed in this classification during the past thirty days. Jobbers report future orders relatively light, but the demand for seasonal goods for prompt delivery is somewhat larger than at the same time last year. Prices averaged about steady, advances closely balancing declines. The general manufac turing demand for heavy chemicals continues strong. Sales of the 11 reporting interests during Decem ber were 0.7 per cent larger than for the preceding month and 6.7 per cent in excess of the total for Decem ber, 1924. Stocks on January 1 were 0.9 per cent larger than on the same date in 1925. Dry Goods — Purchasing for prompt delivery is reported in good volume, but advance orders are disappointing and slightly below the corresponding time a year ago. The decline in raw cotton prices has caused hesitation in buying of cotton goods, and some price declines were reported in the goods market. The demand for silk and rayon fabrics was active, with the trend of prices upward. Generally specialties and fancy goods are m oving in better volume than staples. Decem ber sales of the 11 reporting interests were 4.8 per cent smaller than for the corresponding month in 1924, and 29.7 per cent under the November, 1925, total. Stocks on January 1 were 5.1 per cent larger than on the same date in 1925, and 34.5 per cent in excess of those of Decem ber 1, 1925. Electrical Supplies — December sales of the 12 reporting interests were 24.8 per cent larger than for the same month in 1924 and 13.4 per cent in excess of the November, 1925, total. Stocks on January 1 were 15.6 per cent smaller than a year earlier, but 13.4 per cent larger than on D ecem ber 1, 1925. Improvement was general through all sections of the line, but as compared with last year gains were especially marked in radio goods and household appliances. Manufacturers of small motors report heavy advance orders. T he m ove ment of pole hardware and supplies generally for public utility companies was in larger than the usual seasonal volume. Flour— Production at the 11 leading mills of the district during December was 312,731 barrels, against 324,214 barrels in November and 306,586 barrels in December, 1924. Stocks of flour in St. Louis on January 1 were 1.7 per cent less than a month earlier, but 14.0 per cent larger than on Janu ary 1, 1925. The usual holiday dullness in the flour trade was emphasized by the unsettled condi tion of the wheat market. A ll classes of buyers apparently lacked confidence in values, and were disposed to hold off, or take only such quantities as they were obliged to have. Higher prices were asked by millers on account of the advance in cash wheat, but little business was done at the higher levels. Shipping directions on flour previously pur chased were good, particularly from the South. The export demand continues quiet. Mill operation was at from 55 to 62 per cent of capacity. Furniture — Improvement in this classification which began last fall was continued during the past thirty days. Decem ber sales of the 25 reporting interests were 41.2 per cent larger than for the cor responding month in 1924, and 21.9 per cent in ex cess of the November, 1925, total. Stocks on Janu ary 1 were 77.4 per cent larger than a month earlier and 5.7 per cent below those on January 1, 1925. The demand for household furniture, floor cover ings and office equipment was reported active. H oliday business was generally satisfactory, with a fair volum e of reordering by manufacturers and jobbers. Retail buying is still on a necessity basis, with stock orders scarce. Groceries — Decem ber sales of the 22 report ing interests were 2.6 per cent less than for the same month in 1924, and 6.0 per cent below the November, 1925, total. Stocks on January 1 were 10.9 per cent smaller than a month earlier, and 19.5 per cent under those of January 1 last year. The movement of holiday goods was fully up to expectations, but purchasing of staple lines is re ported backward. Retail stocks are for the most part of moderate proportions, but there was a gen eral disposition to postpone replenishing until after the inventory period. Prices showed little change w orthy of note during the past thirty days. Hardware — A s compared with the correspond ing month a year earlier, sales of the 12 reporting interests during Decem ber showed a gain of 4.6 per cent. T he improvement was reported as ex tending generally through the line, but with build ers’ hardware making an especially favorable show ing. Ordering for spring delivery o f hand imple ments, wire netting, field fence, garden hose and other typical goods for distribution in the country was in large volume. The movement of stable goods was reported relatively slow. Save for high er quotations on rubber goods, and an upward trend on certain iron and steel wares, prices were un changed from levels of the preceding month. Iron and Steel — Follow ing the holidays and inventory period activities at mills, foundries and machine shops have been resumed at a rate slightly above the average during December. T he place ment of new business, which receded during the latter part of December, has improved since the first week in January, and a m ajority of the report ing interests have unfilled orders sufficient to insure the present rate of operation through the first quarter of the year. Commitments o f steel buyers on future requirements are being made more freely than heretofore. Purchasing by the railroads of materials for their general needs shows im prove ment as compared with the closing weeks of last year. Inquiries for track supplies and repair materials are heavy. Foundries specializing in gray iron castings report unfilled orders well in excess of the corresponding period in 1925. The demand for plates and sheets is active and comes from quite general sources, but with the manufac turing trade making relatively the best showing. The leading producer of sheets in the district con tinues to operate at capacity, and reports shipments in excess of current output. Farm implement manu facturers are operating at, or close to full time and are adding to their stocks of finished goods in anti cipation of a heavy demand during the next few months. Leading stove manufacturers of the dis trict, w ho usually suspend operations through Janu ary for repairs and inventory, resumed production during the second week of the month. W arehouse men report a better than seasonal demand for their general line, with prices firm and tending upward on a number of important items. Purchasing of tubular goods, and general oil country supplies has improved, and there is a better demand from the coal fields for iron and steel products. Purchasing of pig iron during the past thirty days was quiet, due to the fact that most melters have covered their requirements for the first quarter. Lum ber — There was a good volum e of fill-in orders in all the woods, and some increase in buy ing of yellow pine by yards in the large cities, par ticularly St. Louis. In the soft w oods, especially southern pine, there has been relatively little buy ing for stock purposes by the yards. T h e sharp advance in hardwood prices, notably in gum, dur ing November, is being well sustained, due chiefly to a recurrence of unfavorable weather in the South follow ing the holidays. The log supply is very low, and that part of it in the w oods is inac cessible because of miry ground. T h e price advance was so rapid and strong, however, that buyers have not been disposed to meet it except for urgent requirements. T h e cypress market is still dull, both in the red and yellow varieties. R E T A IL T R A D E The condition of retail trade is reflected in the follow ing comparative statement showing the activ ity of department stores in leading cities of the district: Net sales comparisons Stocks on hand Stock turnover bee. 1925 12 months ending Dec. 31, 1925' January 1, comp, to Dec. 31, 1925, to comp, to to Dec. 31, Dec. 1924 same period, 1924 Dec. 31, 1924 1925 1924 Evansville ... 3.8% 5227T - 2.1% — 9.8% 206.5 Little Rock. 0.7 280.3 261.3 h 5.4 — 0.6 Louisville ....-f 4.9 + 13.2 355.8 i- 2.6 319.6 .+ 8.5 + 6.8 261.6 b 9.2 246.5 .+ 2.5 - 0.8 — 1.0 258.5 247.6 - 6.7 + 6.8 341.2 328.8 .+ 8.1 2.0 - 0.9 Springfield . — 10.8 170.5 140.8 - 6.1 + 6.6 321.7 304.2 8th District.. + 6.7 C O N S U M P T IO N O F E L E C T R IC IT Y W hile showing a decrease of 7.4 per cent as compared with the month before, consumption of electric power by industrial customers o f public utilities companies in the five largest cities of the district during December recorded a gain of 17.2 per cent over the total for Decem ber, 1924. The loss in the irionth-to-month comparison was due to the holidays, and reduced loads at the refrigerating and ice plants. Virtually all classes of consumers shared in the gain over Decem ber, 1924. Detailed figures fo llo w : No. of Dec. Nov. Dec. 1925 Dec. Dec. 1925 custom- 1925 1925 comp, to 1924 comp, to ers *K.W.H. *K.W.H. Nov. 1925 *K.W.H. Dec. 1924 1,089 1,035 ' ' + t> % .2 943 + 1J>.4% Evansville .....40 1,136 + 7.9 885 +38.5 1,226 Little Rock....35 4,771 4,937 — 3.4 4,086 +16.8 Louisville ..... 67 1,543 + 2.7 1,176 +34.8 1,585 Memphis .......31 14,595 — 11.1 11,379 +12.2 12,971 St. Louis.......89 Totals.....262 21,642 23,246 *In thousands (000 omitted). — 7.4 18,469 +17.2 AG R IC U LTU R E During the past thirty days more seasonable weather has prevailed through the district, and far mers were able to accomplish a considerable amount of belated work. The im proved condition of wagon roads has permitted of hauling grain and other products to railroad terminals. The higher prices for wheat and corn were an added incentive to an increased m ovement of those cereals. Marketing of cotton and tobacco continued on a large scale, and deliveries of rice to mills were heavy. In virtually all sections o f the district sentiment among the agriculturists is more optimistic than at any similar season during the past three years. Winter Wheat — W ith the exception of Ten nessee, where a small increase is shown, the area sown in winter wheat last fall is smaller than dur ing the fall o f 1924 in all states o f the district. The reduced acreage is accounted for by unfavorable weather for plow ing and seeding, farmers having been unable to sow as much wheat as they intended. In some sections the drought which ended in Sep tember prevented planting in the earlier part of the season. T he heaviest loss was recorded in M is souri, where the area seeded is 1,261,000 acres, com pared to 1,752,000 planted in 1924. This is the smallest acreage sown during the last twenty-seven years, and the condition— 63 per cent— is the lowest in fifty years. T he condition is considerably below the 10-year average in all states of the district, with Illinois, the chief wheat state, showing 67 per cent on Decem ber 1, against 87 per cent on the same date in 1924 and a 10-year average of 89 per cent. Growth of the plant has been arrested by the recent extreme cold weather, and there are complaints of lack of snow protection over a large area. Corn — Gathering of corn generally through the district was late, due to unfavorable weather in Novem ber and Decem ber. The dry, cold weather of the past several weeks, however, has been bene ficial for husking and cribbing operations, and the crop is all housed. There are complaints of mould e r g of early cribbed corn, and generally the quality is low, and prospects for high germinating seed cofn are poor. Marketing of corn has increased in the surplus states, and unusually large shipments are being made from Missouri and Illinois to the South. Some improvement in quality of recent arrivals at primary points is shown, due chiefly to the more favorable weather for curing. Live Stock — A ccording to the U. S. Depart ment of Agriculture there were about 3 per cent less cattle on feed for market in the Corn Belt States on Decem ber 1 than on the corresponding date in 1924. The loss was due to smaller numbers on feed in the states west of the Mississippi River, where the indicated decrease was 6 per cent. In states east of the river, there was an indicated increase of over 7 per cent. Reports of feeders as to the kinds of cattle on feed indicated a considera ble decrease in the percentage of heavy animals, over 1,000 pounds, and an increase in the lighter weights and calves. These reports support the view that the large crop and low price of corn have caused feeders to buy light cattle for longer feed than in the preceding year. The number of sheep and lambs on feed for market in the Corn Belt States and western feeding areas on December 1 was about 250,000 head less than on the same date in 1924. The decrease in the Corn Belt States was about 210,000 head, and was chiefly in states west of the Mississippi River. A m ong the causes for the decrease were the small shipments of western lambs to central markets and the fact that feeding lamb prices were the highest since the war, being above fat lamb prices most of the season. A decrease in the supply of hogs available for market nekt summer and little change in the supply of hogs for\ h e late fall and winter of 1926-27 com pared to thiss^fall and winter, is indicated in the preliminary tabulation of the December pig survey of the Department. Receipts and shipments at St. Louis, reported by the National Stock Yards, were as follow s: _______ Receipts_______ Dec. Nov. Dec.' 1925 1925 1924 Cattle and Calves.....132,463 137,753 119,866 Hogs ........................344,057 309,415 448,520 Horses and Mules.... 5,891 5,410 6,365 Sheep ........................ 46,270 37,755 30,071 Shipments______ Dec. Nov. Dec. 1925 1925 1924 81,466 83,787 69,914 218,147 207,721 263,540 6,316 5,578 6,546 25,719 11,751 11,057 Tobacco — F ollow ing suspension for the holi days, activities were resumed at the several tobacco markets on January 4, and with more favorable weather for effecting deliveries, sales were large in all districts. The markets for fired dark and air cured tobacco opened decidedly higher than at the close before Christmas. T he better prices affected all grades of lugs, and com m on and medium leaf, with high quality leaf in good demand at as high prices as have been paid this season. Offerings in the green river district were large, but poor in quality, resulting in a low average of prices and heavy rejections. Burley tobacco is moving in fair volum e, with the market active and firm on every thing offered. T he Burley T obacco Growers Co operative Association is selling and delivering a considerable proportion of its receipts. Weather was auspicious for stripping and preparing tobacco for market. Rice — Latest reports indicate that the rice crop has been all threshed, and about 75 per cent delivered to the mills, the balance being in storage on farms and local elevators. W hile much of the rice raised in Arkansas was damaged in harvesting and threshing, m ost of the damaged grain has been disposed of, and that in the hands of the marketing associations is largely of sound quality. The de mand for rice continues very good and prices are sufficiently high to offset the extraordinarily high cost of raising the crop and still leave a good mar gin of profit to producers. Cotton — During the past thirty days cotton continued to com e in from a number of sections, and in eastern and northeastern Arkansas and Mis souri there was still considerable cotton in the fields. W eather was unfavorable for field work, and picking progressed slowly. Recent receipts con tinue to show a large quantity of low grade staple. The m ovement to market has been unusually heavy, receipts at Arkansas compresses from August 1 to January 15 being 1,499,068 bales, against 1,194,039 for the corresponding period last season. The de mand for cotton receded slightly as compared with the preceding thirty days and prices were lower, the middling grade at St. Louis ranging from 19 to 1 9 ^ c per pound as compared with 1 9 to 20j4c the month before. Commodity Prices — Range of prices in the St. Louis market between Decem ber 15, 1925, and January 15, 1926, with closing quotations on the latter date and on January 15, 1925: Close Wheat High Low Jan. 15,, 1926 Jan. 15., 1925 May .................. per bu. $1.83^4 $1.66*4 $1.77 $1.82 *£ 1.555^ 1.39 1.55 July .................. ‘ l.S s IV September ....... ‘ 1.44 1.46 1.4554 1.4554 No. 2 red winter ‘ 1.98 1.78 $1.95 @ 1.96 $2.07 @ 2.08 No. 2 hard......... ‘ 1.88 1.69 1.84 @ 1.86 1.85*4 Corn May .................. ‘ - .88 J4 .79 1.32*3 .84*2 .90 .81 July .................. ‘ 1.33 .8654 .81 No. 2.................. ‘ .66*4 .7 6 @ .78 1.25*4 .81 .71 No. 2 white....... ‘ .80 1.27 Oats No. 2 white....... ‘ .45*2 .42 .44*£ @ .63 •4454 Flour 8.75 Soft patent.......per bbl. 10.00 9.50 @ 10.00 9.25 @ 10.25 10.00 8.40 Spring patent.... 8.80 @ 9.10 9.50 .19*^ .19 Middling cotton....per lb. .19*4 .54*4 Hogs on hoof.....percwt.13.00 9.15 10.50 @ 13.00 6.50 @ 10.90 Note: December wheat closed at $1.83*4 and December corn at 78c. BU ILD IN G In spite of the cold weather building operations during the past thirty days were active, and main tained at close to the level of the similar period immediately preceding. W ork on large structures in the chief cities proceeded with practically no interruption. There was, however, the usual sea sonal decrease in building permits issued during December. The value of permits issued for new construction in the five largest cities of the district in December was 2.06 per cent under November, and 23.8 per cent below the total of December, 1924. In both point of number of permits and value represented, 1925, was the largest year on record for these cities. T he value in 1925, $100,911,000, represented a gain of 17.4 per cent over the $85,948,000 total of 1924, and 30.7 per cent over the $77,182,000 of 1923. In 1925 a total of 23,404 permits was issued, which compares with 21,774, in 1924 and 20,302 in 1923. The average cost of building materi als advanced slightly during the month, due to higher prices on certain hardwoods and iron and steel materials. Production of portland cement for the country as a whole during Decem ber was 10,809,000 barrels, against 13,656,000 barrels in November and 10,435,000 barrels in December, 1924. Building figures for Decem ber fo llo w : New Construction *Cost Permits 1925 1924 1925 1924 251 $ 186 $ 92 Evansville 118 458 183 65 Little Rock: 68 1.058 1,378 226 Louisville . 187 311 2,644 4,411 Memphis . 193 1,753 2,114 386 St. Louis..... 522 Repairs, etc. *Cost Permits 1925 1924 1925 1924 $ 33 $ 11 39 28 38 59 60 24 71 103 37 49 55 47 112 109 962 316 256 308 $6,161 $8,092 1,088 1,239 6,290 5,335 1,491 1,598 7,327 13,032 2,103 2,125 *In thousands of dollars (000 omitted). 503 701 954 554 848 1,163 $1,145 468 616 $515 518 755 PO STAL RECEIPTS Returns from the five largest cities of the dis trict show an increase in postal receipts for the fourth quarter of 1925 of 23.6 per cent over the third quarter and of 6.3 per cent over the last quar ter of 1924. Detailed figures fo llo w : * For quarter ending Dec. 31 , Sept. 30, June 30, 1925 1925 1925 $ 145 $ 151 ...$ 171 201 211 ... 237 664 651 ... 779 493 474 3,021 2,850 ... 3,574 ...$5,353 *In thousands (000 omitted). $4,331 $4,530 Dec. 31, 1924 $ 160 224 714 509 3,427 Dec. 1925 comp, to Dec. 1924 + 6.9% + 5.8 + 9.1 + 16.3 + 4.0 $5,034 + 6.3 F IN A N C IA L The demand for credit from general mercantile and industrial sources during the past thirty days showed a slight slow ing down as compared with the similar period immediately preceding. Loan able funds in hands of the commercial banks con tinue abundant in all sections of the district, but particularly in the large cities. Deposits of the re porting member banks increased further and in early January were larger than at any time last year. Total loans of the reporting banks also ad vanced in early January to a higher level than was recorded at any time in 1925. Loans secured by stock exchange collateral were maintained at ,or around the peak levels attained during the closing weeks of last year. A s has been the case during the past several months, borrow ings at the banks do not fully reflect the volum e of current business inasmuch as mercantile and manufacturing con cerns are well supplied with cash of their own, and are financing their operations with their own re sources to a greater extent than usual in former years. General liquidations throughout the district continued on an extensive scale and country banks heavily cut down their indebtness to correspond ents in the larger cities. Settlements in the South, where cotton, tobacco, and rice are being marketed, were heavy, and in some sections deposits of coun try banks are the highest in more than five years. W holesalers in large centers report early January settlements above expectations, and generally larg er than a year ago. There is a good demand for funds for financing live stock feeding operations, and the advance in premiums on cash wheat has re sulted in somewhat heavier commitments by mil lers and elevator interests. Commercial banks in the district are still lending heavily to eastern finan cial institutions. Rates charged by the commercial banks were quotably about steady with the preced ing month, but since the second week in January the trend has been slightly lower. Commercial Paper— Brokerage interests report continued quiet and unsatisfactory conditions in the commercial paper market. Competition from the local banks and the eastern call money market is unusually keen and offerings are limited, espe cially of prime paper. Decem ber sales of the report ing brokerage firms were smaller than for the same month in 1924, also under the November, 1925, total. Rates were unchanged at 4% to 4 y2 per cent. Federal Reserve Operations — During D ecem ber the Federal Reserve Bank o f St. Louis dis counted for 195 member banks, against 201 accom modated in Novem ber and 236 in December, 1924. The discount rate remained unchanged at 4 per cent. Changes in the principal assets and liabilities of this institution as compared with the preceding month and a year earlier are shown in the follow ing ta b le: Bills ( Bills 1 U. S. .Ratio of reserves to deposit and F. R. Note liabilities.., •In thousands (000 omitted). •Jan. 16, 1926 .$19,704 . 23,026 . 25,022 290 •Dec. 16, •Jan. 16, 1925 1925 $22,584* $ 7,887 32,408 20,758 17,791 12,608 405 519 .$68,042 . 38,454 . 87,723 $73,188 39,140 83,479 $41,772 55,699 85,151 . 48.2% 46.0% 75.6% Debits to Individual Accounts — T he follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, certificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Gov ernment in the leading cities of this district. Charges to accounts of banks are not included: *Four weeks ending Jan. 1926 J,an. 1926 Jan. 20, Dec. 16, Jan. 21, comp, to comp, to 1926 1925 1925 Dec. 1925 Jan. 1925 E. St. Louis and Nat. Stock Yards, 111..$ 42.518 El Dorado, Ark.... ...... 12,225 Evansville, Ind.... ...... 37,678 Fort Smith, Ark... ...... 14,114 Greenville, Miss.... ...... 4,404 Helena, Ark.......... Little Rock, Ark......... 79,662 Louisville, Ky...... Memphis, Tenn..... ...... 164,754 Owensboro, Ky.... ...... 6,651 Quincy, 111............ St. Louis, Mo........ ...... 767,800 Sedalia, Mo.......... Springfield, Mo.......... 15,136 - 3.7% + 11.3 + 8.7 -22.6 -17.0 -29.1 - 7.3 - 1.3 - 7.0 +21.0 - 2.2 b 2.0 -61.0 - 6.4 + 8.4% +87.6 + 9.7 + 7.1 — 9.4 —20.3 + 10.6 + 4.4 + 1.5 — 11.0 + 13.2 + 6.6 + 17.0 +32.8 + 0.1 $ 44,159 $ 39,225 10,982 6,517 34,610 34,359 18,243 13,182 5,303 4,862 6,750 6,012 85,926 72,019 184,728 174,678 177,072 162,327 5,497 7,471 11,290 9,748 745,700 720,243 3,576 4,922 14,232 11,336 + 6.5 *In thousands (000 omitted). Condition of Banks — Loans and discounts of the reporting member banks continued to increase during the period under review, the total on Janu ary 13 being $527,712,000, against $522,004,000 on December 16, 1925, and $501,090,000 on January 14, 1925. Deposits also continued their recent gains, the total of $651,734,000 on January 13 being $8,893,000 larger than a month earlier and $12,114, 000 in excess of the total on January 14, 1925. Total investments on January 13 were $171,293,000, comparing with $169,857,000 on December 16 and $165,450,000 on January 14, 1925: The follow ing statement shows principal re sources and liabilities of reporting member banks in Evansville, Little Rock, Louisville, Memphis, and St. L o u is : •Jan. 13, *Dec. 16, •Jan. 14* 1926 1925 1925 Other Deposits Net demand deposits....................... Time deposits.................................... Government deposits......................... 33 $ 10,620 207,431 303,953 $ 10,802 181,210 309,078 $522,004 $501,090 .. 12,957 .. 25,504 .. 10,798 .. 6,945 .. 5,780 .. 109,309 12,957 23,238 10,651 6,894 6,136 109,981 14,341 27,455 6,284 12,098 1,872 103,400 ..$171,293 .. 51,168 .. 8,494 Investments U. S. Pre Liberty be 33 ..$ 10,912 .. 210,782 .. 306,018 ..$527,712 Loans and discounts (incl. rediscounts) .. 33 $169,857 49,621 8,965 $165,450 49,730 8,663 .. 434,813 .. 211,057 .. 5,864 431,663 203,877 7,301 410,464 211,870 7,286 ..$651,734 $642,841 $629,620 Total deposits............... ...............• ....... Bills payable and rediscounts with Federal reserve bank Secured by U. S. Gov’t, obligations.... 2,384 4,168 575 All other....................... ......................... ... 6,024 7,593 *In thousands (000 omitted). Total resources of these 33 banks comprise approximately 54 per cent of the resources of all member banks in the district. (Compiled January 21, 1926) BUSINESS CONDITIONS IN TH E UNITED STATES P R O D U C T IO N — The Federal Reserve Board’s in dex of production in basic industries advanced 6 per cent in December to the highest level in ten months. The rise in this index has been nearly continuous since last August, when the volume of production was at the low point for 1925. In December the production of iron and steel and bituminous coal, and factory consumption of cotton in variation. Latest figure, December=122. creased considerably, and the production of lumber, cement, and copper was maintained at relatively high levels. The volume of factory employment and payrolls, after increas ing during the late summer and autumn months, continued practically unchanged in November and December with increases in some industrials offsetting seasonal declines in others. Building contracts awarded during December were the largest recorded for that month and exceeded in value those awarded in November, although a seasonal decrease in building activity usually occurs at that time of the year. TRADE*— Sales at department stores, chain stores, and mail order houses in December indicated the largest volume of Christmas trade on record. Trade at wholesale declined seasonally, but continued larger than last year. Stocks at department stores showed less than the usual de cline in December and were 4 per cent larger at the end of 1925 than a year earlier. Freight car loadings continued larger during December, with shipments of merchandise and miscellaneous commodities, coke, and coal particularly heavy. declined in December, while grain prices advanced. Among non-agricultural commodities the principal declines were in the prices of cotton goods, paper, and rubber, while somewhat higher prices were shown for silk, coal, and lumber. In the first three weeks of January, quotations on hogs, coke and hardwood lumber advanced, while prices of corn, cattle, and rubber declined. Latest figure, December=156. B A N K C R E D IT — Changes in the demand for cur rency have been the principal factor influencing the volume of reserve bank credit in use since the middle of Novem ber. During the five weeks between November 16 and December 23 the reserve banks paid out into domestic cir culation a net amount of about $320,000,000 of currency in the form of gold and gold certificates, Federal reserve notes, and other kinds of money, and during the following four weeks, the return flow of currency from circulation amounted to about $430,000,000. These currency move ments were reflected in corresponding changes in the vol ume of reserve bank discounts for member banks. At member banks in leading cities total loans and in -' vestments, which had increased almost continuously during^ 1925, reached the highest level on record at the end of December, but declined by about $200,000,000 during the first two weeks of the new year. Both the increase in bank loans in the latter part of December and the decline after the turn of the year were largely in loans on securities, particularly at member banks at New York City. These CURVE 1 MILLIONS OF DOLLARS CURVE 2 5500 10 1 0C ReserveBank Credit u V J W VJ / / 900 f $000 MoneyIn Oroulation ru M w a IRRENCYAMID RESEFtVE BANK CREDIT I o 1922 Index sales of 333 stores in 117 cities Latest figures, December, 1925. P RICES — The general level of prices, as measured by the wholesale price index of the Bureau of Labor Statis tics, declined* by about 1 per cent in December and was at the end of the year somewhat lower than a year earlier. The average of wholesale prices for the year 1925 as a whole, however, was the highest in five years, and the changes in the price level during the year were smaller than in any year in more than a decade. Among agricul tural commodities, the prices of live stock and dairy products -I 1 92 3 4ono 192* 1 92 5 1926 Above data are averages. Latest figures, January, partly estimated. changes in the demand for loans at member banks were related both to the changes in customers* currency requiremebts and to end of year disbursements by many industrial and financial institutions. # Conditions in the money market, which had become , firmer in the last half of December, were easier in January^ Rates on bankers’ acceptances increased following fEe vance in the buying rate of the New York Federal Reserve Bank, effective January 8, while rates on commercial paper showed little change during the period.