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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, 1927 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent E P O R T S relative to business and industry in this district during the past thirty days re flect moderately decreased activity, both as compared with the month before and the corres ponding period a year earlier. A t many industrial plants operations have not been resumed at a rate as high as prevailed prior to the seasonal slowing down incident to inventorying and the holidays. W holesalers and jobbers in a number of important lines, notably dry goods, hardware, groceries and chemicals, complain of light and backward buying, though since the first week in January the drop in temperature has stimulated the movement of win ter merchandise and brought out a good volume of fill in orders. Alm ost universally, purchasing of commodities is on an immediate requirement basis, future business on the books of manufacturers and wholesalers being at a lower ebb than at any similar period in more than a decade. Except in few in stances, manufacturers are making up very small quantities of goods for which they have not actual orders. R W hile accounting for the movement into con sumptive channels of a large volume and variety of merchandise the holiday trade on the whole was below expectations. Sales of department stores in the five largest cities of the district during Decem ber were 2,8 per cent less than the same month in 1925, and turnover of retailers generally both in the large centefs of population and in the country was relatively light. A decrease under a year ago was also reported in the Decem ber business of mail order houses and chain stores, but a gain in sales of the five and ten cent stores. T he recent downward trend in production and distribution of automobiles continued in December, sales of passenger cars being the smallest for any month since January, 1925. Generally through the iron and steel industry declining tendencies were in evidence. A s indicated by permits issued and contracts let, building activi ty in December was below that of the same month in 1925. Debits to individual accounts in the prin cipal cities of the district in December showed a decrease of 5.9 per cent under the same month in 1925, and an increase of 6.0 per cent over the N o vember, 1926, total. Reports of the Employment Service of the D e partment of Labor indicate a rather general decrease in employment and gain in surplus labor through out the district. Fewer workers were engaged in the coal mining, lumber, iron and steel and pack ing industries, and small reductions were reported at oil refineries, chemical plants, glass factories and quarries. W hile textile mills in the South were for the most part operating on full schedules, a slight decrease took place among textile workers. U n favorable weather for outdoor activities of all sorts was reflected in curtailed building and highway construction, and resulted in a rather sharp accre tion to the ranks of idle common labor. Fair to good gains in employment were noted at tobacco products plants, and activities at tobacco ware houses in Kentucky and Tennessee absorbed a heavy quota of unskilled workers. Follow ing the holidays, there have been heavy releases of clerks and general help by department stores and other retail establishments in the large cities. There was no marked change in conditions in the fuel situation as compared with the preceding thirty days. Interruption in demand from industrial sources during the inventory and holiday period was offset by a heavier call for coal from domestic consumers, with the result that operations at mines in the chief fields of the district averaged about the same as during the month before. In the Indiana and Illinois fields shaft mines were working from tw o to five days per week, those showing the great est activity being favored with increased patronage from the railroads. Strip pits were for the m ost part operating at, or close to capacity. There were further complaints of “ no bills” in all districts, but in the case of steaming coal the number of loaded cars on track has been substantially reduced since the first o f this month. Operators report that the disposition to store coal against possible strike of bituminous miners in the spring is much less in evidence than thirty days ago. Since settlement of the strike o f British coal miners the export trade, which was the principal contributing factor to activ ity in the general coal market during the last half of 1926, has fallen off heavily in volume. Total production of bituminous coal for the entire coun try during 1926 is estimated by the U. S. Bureau of Mines at 578,290,000 tons, the largest on record with the exception of 1918, when 578,386,000 tons were mined. In spite of the falling off in freight traffic dur ing the closing weeks o f December, railroads operat ing in this district handled the largest volume of freight in 1926 ever recorded. Throughout the year operation of the roads was characterized by unusually high efficiency. Gains over the pre ceding year were reported in virtually all classifi cations with merchandise and miscellaneous freight making an especially favorable showing. For the entire country loadings of revenue freight in 1926 totaled 53,309,644 cars, a new high record, and com paring with 51,224,152 cars in 1925 and 48,534,433 cars in 1924. T he St. Louis Terminal Railway A sso ciation, which handles interchanges for 28 connect ing lines, interchanged 202,625 loads in December, against 215,290 loads in November, and 217,627 loads in December, 1925. The total interchange in 1926 amounted to 2,648,143 loads, against 2,571,178 loads in 1925. Passenger traffic of the reporting roads decreased 1 per cent as compared with D e cember, 1925. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans for December was 80,900 tons, against 104,450 tons (re vised figures) in November, and 65,593 tons in D e cember, 1925. The total tonnage in 1926, 1,044,648 tons, was the largest on record, and compares with 911,484 tons in 1925 and 849,494 tons in 1924. Collections during the past thirty days were somewhat irregular, both with reference to the diff erent lines and localities. W holesalers report D e cember settlements about up to expectations, but slightly below the average of the corresponding month in 1925. In sections where cotton is the chief crop some backwardness is noted, but improved payments as compared with a month ago and a year earlier were reported in the tobacco and rice areas. Country retailers generally report collections in December as showing somewhat more than the seasonal decrease, but some improvement since the first of this month. In the coal fields there was a slight recession in Decem ber as compared with November, but marked betterment as contrasted with December, 1925. Answers to 471 question naires addressed to representative interests in the several lines throughout the district showed the follow ing results. Excellent December, 1926........... 1.4% November, 1926........... 1.4 December, 1925........... 5.7 Good 30.1% 29.7 37.1 Fair 57.5% 59.5 52.9 Poor 11.0% 9.4 4.3 Commercial failures in the Eighth Federal Re serve District during December, according to D un’s, numbered 86, involving liabilities of $1,331,361, against 69 defaults in N ovember with liabilities of $806,848, and 80 failures for $1,323,752 in D ecem ber, 1925. The per capita circulation in the United States on January 1, 1927, was $43.03, against $42.62 on December 1, 1926, and $43.62 on January 1, 1926. 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 — Production of passenger cars and trucks in the United States during December fell sharply below the preceding month and the corresponding period a year earlier. T he total, 165,000, compares with 219,479 in Novem ber and 309,296 in December, 1925. There was a further sharp decline in distribu tion of automobiles in this district, both as com pared with the preceding month and the corres ponding period in 1925. The decreases, however, did not extend to all makes of cars, some showing substantial gains in both comparisons, with the major part of the total being accounted for by a relatively small group. Such interests as showed gains attributed them to intensive selling campaigns and in one important instance to a reduction in price. Relatively the heaviest falling off in sales was in the country, where for various reasons buy ers are postponing filling their requirements. City dealers report a general disposition to await new models and designs before making commitments. This same attitude is noted among distributors, with the result that stocks of new cars showed only a moderate increase, though this is the season during which it is customary to accumulate stocks to sell in the spring. The used car market was dull and unsatisfactory, with stocks about 15 per cent larger than in November and 10 per cent larger than in December, 1925. The gain in stocks was due to slack sales rather than the taking in of additional cars. Sales o f passenger automobiles during D e cember by 320 dealers scattered through the district were 16.4 per cent smaller than in the same month in 1925, and 21.8 per cent below the N ovem ber total. Sales of parts and accessories made a relatively bet ter showing, the declines from a month and a year earlier being 12.2 per cent and 8.5 per cent, respect ively. O f the sales of reporting dealers, 62.5 per cent were made on the deferred payment plan, against 61.4 per cent in November, and 78.9 per cent in December, 1925. Price reductions were made in tw o important makes of low priced cars. The tire trade was reported quiet, with purchasing by deal ers and the public on a hand-to-mouth basis. B oots and Shoes — Decem ber sales o f the 10 reporting interests were 1.2 per cent larger than for the same month in 1925, and 53.5 per cent below the November, 1926 total. Stocks on January 1 were 25.5 per cent larger than thirty days earlier and 7.9 per cent less than on January 1, 1926. The decrease in sales shown in the month to month comparison is accounted for entirely by seasonal considerations. Road sales since the first of this month are reported satisfactory, and well ahead of the corresponding period last year. N o change in prices of finished goods was reported, but the raw material market was firmer, with specific advances recorded on sev eral important items of leather. Factory operation has been increased, and ranges from 95 to 100 per cent of capacity. Clothing — Reports relative to ordering of clothing for spring distribution indicate considera ble uneveness, with results through the South rela tively less satisfactory than in other sections of the district. There has been marked improvement in the movement of men’s heavy weight apparel, particularly overcoats and sweaters. W om en ’s cloaks and suits for winter wear also show im prove ment over the preceding thirty days, with a fair volum e of reordering. Special sales o f retail cloth iers since January 1 have been successful, and re sulted in the movem ent of a heavy volume of mer chandise into consumptive channels. Decem ber sales of the 8 reporting interests were 3.1 per cent below the same month in 1925, and 54.9 per cent below the Novem ber, 1926, total. Drugs and Chemicals — Decem ber sales of the 7 reporting interests were 0.2 per cent larger than during the same month in 1925, and 1.4 per cent below the Novem ber, 1926, total. W hile advance bookings are light, the volume of current orders holds up well, and some improvement in demand for heavy chemicals from the general manufacturing trade was reported. D uring the past few weeks there has been a heavy call for remedial drugs, occa sioned by illness incident to the inclement weather. Retail stocks are for the most part light, and since the close of the inventory period there has been a general disposition to replenish and fill out assort ments. D ry Goods — Rather sharp decreases as com pared with the preceding month and a year earlier were shown in December statistics in this classifi cation. Early January business continued the dow n ward trend, and losses were particularly marked in orders for future delivery. Stocks in wholesalers hands are generally light, and there is a disposition to hold down commitments as close as possible to actual requirements. A s compared with the preced ing thirty days there was no notable change in prices. The 11 reporting firms showed December sales 22.2 per cent less than the same month in 1925 and 50.4 per cent less than the November 1926 total. Stocks on January 1 were 14.5 per cent larger than thirty days earlier, but 19.8 per cent below those of a year ago. Electrical Supplies — Business in this classifi cation continued the gains of recent months, D e cember sales o f the 5 reporting interests being 6.9 per cent larger than during the same month a year earlier and 16.0 per cent in excess of the November, 1926, total. Stocks on January 1 were 36.9 per cent larger than on the same date last year, and 4.2 per cent in excess o f those on Decem ber 1, 1926. Sales of holiday goods, particularly radio material and household appliances were above expectations, and the demand for installations for new buildings was somewhat better than the average for this season. Prices on some items were lower, though little change in the general price trend, as compared with the preceding month, was in evidence. Flour — Production by the 12 leading mills of the district in Decem ber was 364,612 barrels, against 375,575 barrels in N ovem ber and 312,731 barrels in December, 1925. Stocks of flour in St. Louis on January 1 were 17.2 per cent larger than a month earlier and 6.7 per cent larger than on January 1, 1926. Business during the past thirty days was quiet and uneventful. Buyer’s generally were hold ing off until after inventory period, and were not disposed to follow the slight upturn incident to the advance in cash wheat. In the immediate past sales to the domestic trade in the South have improved, and shipping directions generally reflect greater interest in supplies. Demand from abroad was slow, with bids too far out of line to result in w ork ings. Mill operation was at from 45 to 55 per cent of capacity. Furniture — Decem ber sales of the 16 report ing interests were 25.3 per cent larger than during the same month in 1925, and 20.5 per cent below the November, 1926, total. Stocks on January 1 were 4.0 per cent smaller than thirty days earlier, and 8.0 per cent larger than on January 1, 1926. Holiday trade was reported generally satisfactory, and the receipt of replacement orders for this class of goods helped materially in raising the December sales total. The m ovement o f floor coverings was large, and improvement was noted in the general demand for household furniture. Groceries — Decem ber sales o f the 10 reporting interests were .15.8 per cent smaller than during the same month in 1925, and 5.8 per cent under the November, 1926, total. Stocks on January 1 were smaller by 10.7 and 13.5 per cent, respectively, than a year and a month earlier. T he m ovement of holi day goods was reported disappointing, and slightly below the year before. Demand for staple goods continues slow, particularly in the rural districts, and buying by retailers is confined exclusively to an immediate requirement basis. Hardware — Due to the holidays and inven torying period, business o f wholesale hardware dealers was quiet during Decem ber and early Janu ary. Orders received were mainly for small lots for fill-in purposes. Orders for merchandise for spring and early summer distribution are generally below the average of this period during the past several years. In the immediate past there has been some improvement in replacement buying of winter goods, and the movem ent o f seasonal sporting goods has also picked up. Decem ber sales of the 12 reporting interests were 24.7 per cent below those of the same month in 1925, and 8.5 per cent under the November, 1926, total. Stocks on January 1 were 1.3 per cent larger than thirty days earlier and 1.6 per cent larger than on January 1, 1926. Iron and Steel Products — Activities at mills, foundries and machine shops declined rather markedly during the period under review. Speci fications on goods previously purchased were held down by the inventory period and holidays, and new orders were being sparingly placed. W eather conditions were unfavorable for outdoor work, and demand for building materials showed somewhat more than the usual seasonal decline. Purchasing by the automobile industry continues in small v ol ume, which fact was reflected in considerably re duced sales of sheets, rods, plates and other goods used largely in the manufacture of m otor cars. D e mand for fencing and roofing materials in the coun try is reported slack, and a sharp falling off in tank plates, tubular goods and other com modities to the oil fields was noted. Average prices were lower than thirty days earlier, the principal reduction be ing $2 per ton on Southern pig iron. Purchasing by the railroads has shown greater activity and in cludes fairly large orders for cars and locom otives and rails and general track materials. Production o f pig iron for the country as a whole during D e cember was at the lowest rate in 14 months, the daily average being 99,826 tons, compared with 107,933 tons in Novem ber and 104,808 in December, 1925. The total production for 1926, 39,106,395 tons, however, was second only to the record output of 40,025,850 tons in 1923. Steel ingot production in Decem ber dropped to 3,472,000 tons and a daily average of 133,538 tons, the lowest for both figures since last August. Decem ber sales of the 6 report ing stove manufacturers were 11.3 per cent smaller than in the same month in 1925, and 59.5 per cent below the November, 1926, total. Their stocks on January 1 were 4.9 per cent larger than a month earlier, but 21.8 per cent below the total on January 1, 1926. Sales of the reporting job foundries in D e cember were 16.5 per cent larger than for the same month in 1925, and 21.5 per cent below the N ovem ber, 1926, total. L u m ber— F ollow ing the inventory period there has been a fair volum e of fill-in orders for most descriptions of lumber, both in the large cities and the country. Uncertainty relative to prices of soft woods, particularly southern pine, is tending to hold down purchasing for future delivery. U n favorable weather in the South, which has resulted in rather sharp curtailment of logging operations, has had a strengthening effect on hardwood prices, and several specific advances are recorded. Pur chasing by the automobile and furniture industries continues slow, but in the immediate past there has been an increased volume of inquiries and actual buying by builders of railroad equipment. Condi tions in the cypress market show no change w orthy of mention as compared with the preceding tw o or three months. R E T A IL T R A D E Conditions in the retail trade are reflected in the follow ing comparative tables showing activities at department stores and shoe and men’s furnish ings stores in leading cities of the district. N e t sales comparisons Stocks on hand Stock turnover D ec. 1926 12 months ending D ec. 31, 1926 January 1 comp, to D ec. 31, 1926 to comp, to to D ec. 31, D ec. 1925 same period 1925 D ec. 31, 1925 1926 1925 Evansville .........- f 1 1 .7 % Little Rock.........+ 5.3 Louisville ........... — 3.1 M em phis ..............— 5.4 Quincy ................. — 3.1 St. L ouis............. — 3.2 Springfield, M o . .+ 3.2 8th D istrict........ — 2.8 — — — + — + — + 0 .9 % 0.4 0.5 5.2 1-1 1.3 1.0 1.5 + — — — — + — — N e t sales comparisons D ec. 1926 compared to D ec. 1925 N o v . 1926 M en ’s furnishings............. — 2 .6 % + 3 1 .8 % Boots and shoes............... + 1.1 4 " 5.8 0 .8 % 3.2 2.9 9.2 4.2 0.3 5.5 2.3 240.4 277.0 363.8 280.0 265.6 352.8 179.8 329.8 222.1 277.4 370.3 261.6 261.6 357.2 170.5 325.9 Stocks on hand D ec. 1926 compared to D ec. 1925 N o v . 1926 — 3 .8 % — 1 6 .9 % -f* 2.5 — 11.0 CONSUMPTION OF ELECTRICITY POSTAL RECEIPTS Public utilities companies in the five largest cities of the district reported consumption of elec tricity by selected industrial consumers during D e cember as 14.4 per cent less than in the preceding month, and 5.0 per cent smaller than in December, 1925. The decrease in the month-to-month compari son is seasonal in character, but somewhat more marked than the average in recent years. The loss as compared with a year earlier is due to smaller consumption at cement, iron and steel, automobile assembly and brick manufacturing plants. D e tailed figures fo llo w : Returns from the five largest cities in the dis trict show an increase in postal receipts for the last quarter of 1926 over the same period in 1925 of 5.7 per cent, and over the third quarter of 1926 of 22.1 per cent. Detailed figures fo llo w : N o . of D ec. N ov. D ec. 1926 D ec. D ec. 1926 Custom1926 1926 comp, to 1925 comp, to ers * K .W . H . * K .W .H . N o v . 1926 * K .W .H . D ec. 1925 Evansville ..... 40 1,034 1,147 — 9 .8 % 1,090 — 5 .1 % Little R ock...35 1,196 1,134 + 5.5 1,227 — 2.5 Louisville ...... 80 4,338 5,020 — 13.6 4,982 — 12.9 M em phis ........ 31 1,903 1,945 — 2.2 1,585 + 2 0 .1 St. Louis.........93 12,717 15,508 — 18.0 13,425 — 5.3 T o ta l.........279 21,188 24,754 * I n thousands (000 om itted). — 14.4 22,309 — 5.0 The follow ing figures compiled by the Depart ment o f the Interior, show kilowatt production both for lighting and industrial purposes for the country as a w h o le : B y water power N ovem ber, 1926.....................2,241,004,000 October, 1926..........................2 ,159,334,000 Novem ber, 1925....................1,946,985,000 B y fuels 4,204,933,000 4,394,257,000 3,839,635,000 Totals 6,445,937,000 6,553,591,000 5,786,620,000 B U IL D IN G The dollar value of building permits issued for new buildings in the five largest cities of the district during Decem ber was 7.8 per cent larger than in November, but 8.7 per cent less than in December, 1925. The total for 1926 fell 22.2 per cent below 1925 and 8.8 per cent under the 1924 total. A ccord ing to figures compiled by the F. W . D odge Corpor ation, building contracts let in the Eighth Federal Reserve District during Decem ber amounted to $22,504,037, which compared with $30,585,898 in November and $25,557,000 in December, 1925. There was a slight decline in building costs dur ing December, due to seasonal opportunities for advantageous purchases of materials, rather than a definite drop in price. Production of portland ce ment for the entire country in December amounted to 10,744,000 barrels, against 14,193,000 barrels in November and 10,809,000 barrels in December, 1925. Detailed figures fo llo w : N ew Construction Permits 1926 1925 Evansville . . 2 8 7 Little Rock 43 Louisville .. 135 Memphis ... 181 St. Louis.... 357 118 *68 187 193 522 *C ost 1926 $ 126 86 1,196 2,400 1,817 D ec. totals 1,003 1,088 $5,625 N o v . totals 1,253 1,491 5,216 O ct. totals 2,025 2,103 5,405 * I n thousands (000 om itted). _______Repairs, etc. Permits *Cost 1925 1926 1925 186 183 1,058 2,644 2,114 21 40 48 30 225 39 59 37 112 256 $ $6,185 6,290 7,327 364 755 785 503 701 954 $"327 $M 45 1,164 468 677 616 $ 1926 1925 8 10 142 50 117 $ 33 24 71 55 962 For quarter ending D ec. 1926 D ec. 31, 1926 Evansville ........... $ 167,000 Little Rock........... 238,000 813,000 Louisville ............. Memphis ............. 589,000 St. Louis................ 3,851,000 Sept. 30, 1926 '$ 150,000 268,000 678,000 514,000 3,023,000 June 30, 1926 $ 158,000 211,000 702,000 518,000 3,091,000 Dec. 31, comp, to 1925 D ec. 1925 $ 171,000 — 2 .3 % 237,000 + 0 .4 779,000 + 4 .4 592,000 — 0.5 3,574,000 + 7 .8 Totals................$ 5,658,000 $4,633,000 $4,680,000 $5,353,000 + 5 .7 A G R IC U L T U R E More seasonable weather during the past thirty days has enabled farmers to make good progress with work which had been delayed by unfavorable conditions prevailing during late N ovem ber and through December. Im proved wagon roads per mitted hauling of grain and other products to the railroad terminals, and the movement of cereals from the country to primary markets made a fair showing, though the average continued below a year earlier. Marketing operations were interfered with somewhat by the holidays, but the upturn in prices, particularly of corn, had a stimulating effect on the movement. The demand for wheat both for export and from millers has been quiet. Reports from all sections indicate supplies of farm labor fully adequate to demands, with wages showing only slight variation as compared with the corres ponding period last year. W inter W heat — A ccording to the preliminary estimate of the U. S. Department of Agriculture, the area of winter wheat seeded last fall in states situ ated wholly or partly within this district, amounts to 6,510,000 acres, which compares with 6,203,000 acres seeded in the fall of 1925. All states show a larger acreage except Illinois and Mississippi, each of which show the identical area planted in 1925. In all the principal states actual plantings last fall were below indicated intentions during the summer, farmers being unable to carry out their formulated programs because of the unusually unfavorable con ditions through the planting season. For the entire country the estimated acreage is 41,807,000 acres, against 39,799,000 acres seeded in the fall of 1925. W heat seeding was continued late because of rains and heavy soil, with some grain planted after the middle of November. W hile reports relative to the condition of the grow ing crop reflect very uneven conditions, the plant is generally in good shape, and entered cold weather in strong position. Snow cov ering is generally deficient, but there has been abun dant moisture, and soil conditions are good. Corn — H usking and housing of corn, which due to unfavorable weather was carried much later into the season than usual, has been about com pleted. The freezing temperatures of the past sev eral weeks have facilitated this work, and in addi tion have proved beneficial in the direction of cur ing and conditioning the crop. Recent arrivals at primary markets show quite decided improvement in quality over corn previously shipped. There are still, however, numerous complaints of poor quality, due to excessive moisture and moulding of early cribbed corn. Farmers in the surplus states are feeding large quantities o f corn to live stock, and until the immediate past prices have been too low to encourage heavy shipments to market. The de mand for feeding in the South is below the average for this time of year, due to heavier production of corn and other feed crops locally in that section. Live Stock — An increase in all States of the Corn Belt of about 4 per cent in the fall pig crop of 1926, an increase of less than 1 per cent in the combined spring and fall crops of 1926, no indicated increase in the spring crop of 1927 for these States and a probable decrease in the hog slaughter during the marketing year 1926-1927, are shown in the re port issued by the Department of Agriculture. The number o f sows bred or to be bred to farrow in the spring of 1927 is shown as about 9 per cent larger than the number actually farrowed in the spring of 1926. Previous surveys showed that the number of sows reported in June as farrowed in the spring has been from 8 to 10 per cent less than the num ber reported in Decem ber as bred or to be bred. Receipts and shipments at St. Louis, as re ported by the National Stock Yards, were as fol lows : ________ Receipts D ec. 1926 N ov. 1926 Shipments D ec. 1925 Cattle and Calves...... 105,097 115,301 119,866 H ogs ................................309,117 289,015 448,520 H orses and M ules..,. 3,421 3,906 6,365 Sheep ............................ 37,021 35,457 30,071 D ec. 1926 N ov. 1926 D ec. 1925 ’ 68,879 90,917 132,463 225,085 207,568 344,057 3,103 2,996 5,891 13,596 12,069 46,270 Cotton — A ccordin g to the final estimate of the Department of Agriculture, the total production of cotton in this district is 1926 was 3,476,000 bales, the largest on record, and comparing with 3,345,000 bales in 1925. T he current movement of the staple during the past thirty days decreased rather sharply and receipts at Arkansas warehouses from August 1, 1926, to January 11, 1927, were 164,147 bales belowT the corresponding period a year earlier. There is still considerable cotton remaining in the fields, especially east of the Mississippi River, and weather has not been favorable for gathering it. Because of heavy rains the grade has been lowered to such an extent in certain localities as to make it scarcely worth picking. The spot price on January 18, m id dling basis was 12% per pound in the St. Louis market and represented an advance of ^ c during the period under review. Stocks in Arkansas ware houses on January 14 amounted to 512,540 bales, against 562,207 bales on the corresponding date last year. T obacco — Markets in all the tobacco districts were opened, and a large total volume of sales was reported. Offerings of new crop burley tobacco, while containing a considerable quantity of poor grades, also include some very desirable types of both red leaf and bright grades. The market on com m on leaf was $1 to $2 per hundred pounds high er than before Christmas, medium grades were irregular, and good and fine tobacco as high as at any time since the 1926 crop started to move. Large sales were held at the aircured markets, and the green river and steaming crops are m oving rapidly. Quality in these markets has improved and recent prices have averaged $1.50 per hundred pounds over the opening sales. Loose leaf markets in the dark fired district opened early this month, but weather conditions were unfavorable and prices disappoint ing, except on choice grades. A large quantity of tobacco is stripped in all sections and demand from both domestic manufacturers and exporters is re ported more active. Rice — Threshing of the rice crop has been completed, and due to auspicious weather condi tions through the harvesting season, the grain is in exceptionally good condition. The demand for both rough and polished rice has strengthened dur ing the past few weeks, and farmers are rapidly disposing of their stocks to the mills. Prices were slightly below those thirty days earlier, the high for No. 1 fancy grades being $1.05, with an average price of approximately 95c per bushel on all grades. Com m odity Prices — Range of prices in the St. Louis market between Decem ber 15, 1926 and Janu ary 15, 1927, with closing quotations on the latter date and on January 15, 1926, follow : Close W h ea t H ig h Low Jan. 15, 1927 Jan. 15, 1926 _ M a y ....................... per b u .$ 1 .4 2 ^ $1.35$4 $ 1 .3 8 ^ $1.77 N o . 2 red winter “ 1.40J4 1.36 $1.39 @ 1.40 $1.95 @ 1.96 N o . 2 hard.............. * 1.44J4 1.39 1.43 1.84 @ 1.86 C °M ay ....................... ... " N o . 2 ....................... ... " N o . 2 white........ “ Oats N o . 2 white............ “ .8 4 ^ .80 .80 .79*4 .70 .70 .77 .78 .53 .49 .4 9 ^ @ F1Soft patent........ per bbl. 7.50 6.75 7.00 Spring patent.... “ 7.35 6.95 6.95 Middling cotton....per lb. .1 2 % .11 x2 / H ogs on hoof...... percw t.12.45 10.10 10.75 @ @ @ @ .82J4 .79 .80 .76 .50 AA'A @ 7.50 9.50 7.25 8.80 .1 2 % @ 1 2 .4 5 10.50 @ .845^ .78 .80 .4 4 H @ 1 0 .0 0 @ 9.10 @ 1 3 .0 0 F IN A N C IA L Changes in the banking and financial situation during the past thirty days were of minor signifi cance, and reflected the usual seasonal influences. Demand for funds incident to January 1 interest and dividend requirements created a temporary strengthening in rates, but in their ultimate effect these disbursements were negative, amounting simply to a shifting of credits. Supplies of loanable funds continue abundant for all commercial and industrial requirements, and demand for banking accommodation from those sources vyas reported only moderately active. January 1 settlements with wholesalers in the large centers were generally sat isfactory, and resulted in a fair volume of liquida tion at the banks. Liquidation in the district as a whole, however, was somewhat spotted, with irreg ularity being especially noted in the South. In the tobacco areas liquidation with their correspond ents by country banks has been disappointing, due in large measure to the lower prices of tobacco and unfavorable weather which has attended market ing of that crop. Backwardness is also reported in many sections of the cotton producing sections, producers being unwilling to sell at prevailing prices. Grain shippers and the elevator interests, have slightly reduced their commitments, but de mand from flour millers continues good, owing to increased stocks and the advance in premiums on cash wheat. Loans to customers of the reporting member banks increased slightly during the period under review, but there was a heavy decrease in their borrowings from this bank. Deposits of the reporting member banks have shown the usual seasonal upturn since January 1, and at the middle o f the month were at the highest point since early in October. Loans based on stock exchange col lateral have increased steadily since the last week in December. The market for commercial paper was quiet, with no change in conditions obtaining dur ing the preceding thirty days. Interest rates moved in a narrow range, current quotations at St. Louis being as follow s: Commercial paper 4 y2 to 5% per cent; customers’ over the counter loans, 5 to Sy2 per cent; collateral loans, 5 to 5% per cent and brokers' loans 5 to 5 y2 per cent. Federal Reserve Operations — During D ecem ber the Federal Reserve Bank of St. Louis dis counted for 218 member banks, against 229 in November, and 195 in December, 1925. The dis count 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 table: ♦Jan. 17, 1926 *Jan. 17, 1927 Bills discounted.......................................................... $17,706 Bills bought................................................................... 9,966 U . S. Securities......................................................... 20,515 Foreign loans on gold............................................................ *D ec. 17, 1926 $44,606 ‘ 12,973 20,710 Total bills and securities............................ $48,187 F. R . Notes in circulation................................. 47,156 Total deposits.............................................................. 80,915 Ratio of reserves to deposit and F . R . N ote liabilities............................ 6 4 .9 % *In thousands (000 omitted). $78,289 47,764 79,196 $68,042 38,454 87,723 4 5 .4 % 4 8 .2 % ’ $19,704 23,026 25,022 290 Debits to Individual Accounts — The follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, certificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Govern ment in leading cities of the district. Charges to accounts of banks are not included. *D ec. 1926 E . St. Louis and N at. Stock Yards, 111....$ 47,135 E l Dorado, A r k ........... ........... 10,485 Evansville, In d ........... ........... 46,934 Fort Smith, A rk ......... ........... 15,276 Greenville, M iss......... ........... 4,892 Helena, A r k .................. ........... 4,632 Little Rock, A rk ......... ........... 84,343 Louisville, K y .............. .......... 197,677 Memphis, T enn....................... 161,301 Owensboro, K y ........... ........... 6,318 Pine Bluff, A r k ........... ........... 12,841 Quincy, 111..................... ........... 12,961 St. Louis, M o .............. ........... 816,280 Sedalia, M o .................... ........... 5,*495 Springfield, M o ........... ........... 16,991 T otals.................................$1,443,561 *In thousands (000 om itted). *D ec. 1925 *Tw elve months 1925 1926 $ 48,375 12,649 41,038 18,934 5,950 6,273 99,623 206,517 188,946 6,755 13,807 12,565 850,600 4,827 16,640 $584,052 142,885 492,327 164,358 55,346 58,334 979,253 2,358,164 1,820,660 65,221 $536,342 125,731 471,892 172,924 55,472 66,584 884,445 2,261,672 1,823,107 69,476 ‘ 152,101 9,090,123 57,910 193,096 *1457774 8,944,353 54,585 171,438 $1,533,499 $16,213,830 $15,783,795 Condition of Banks — Loans and discounts of the reporting member banks on January 19 showed a decrease of 2.6 per cent as compared with a month earlier, and of 4.8 per cent compared with January 20, 1926. Deposits gained 1.0 per cent between D e cember 15, 1926, and January 19, 1927, but were 2.0 per cent smaller than on January 20, 1926. Com posite statement fo llo w s : ♦Jan. 19, 1927 Num ber of banks reporting................................. t31 ... Loans and discounts (incl. rediscounts) ..,$ .5,922 5,922 Secured by U . S. G ov’ t obligations..............$ Secured by other stocks and bonds......... 189,449 ... A ll other loans and discounts.......................... 309,171 *D ec. 15, *Jan. 20, 1926 1926 33 t31 $ 6,441 195,663 315,762 $ 10,956 212,790 306,464 Total loans and discounts......................................$504,542 ...$504,542 Investments U . S. Gov’ t securities........................................... 65,723 ... Other securities....................................................... 121,916 $517,866 $530,210 61,889 120,006 62,198 109,012 Total investments......................................................... $187,639 ...$187,639 Reserve balance with F . R. bank.................. 47,087 Cash in vault................................................................... 7,750 Deposits N et demand deposits............................................. 409,161 Tim e deposits............................................................ 226,375 Government deposits............................................. 3,082 $181,895 48,823 9,215 $171,210 48,780 8,273 417,153 211,434 3,884 428,131 217,669 5,864 $632,471 $651,664 Total deposits.................................................................$638,618 Bills payable and rediscounts with Federal Reserve Bank, 3,797 9,416 Secured by U . S. G ov’ t obligations........ ... 2,969 7,363 14,419 A ll others............................................................... 3,347 * In thousands (000 om itted). f Decreases due to consolidation. These 31 banks are located in St. Louis, Louisville, Memphis, Little Rock and Evansville, and their total re sources comprise approximately 53.5 per cent of the resources of all member banks in the district. (Compiled January 22, 1927) BU 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 P R O D U C T IO N — In December, for the third con secutive month, there was a decrease in industrial produc tion, and the Board’s new index, with adjustment for sea sonal variations, was on the basis of the average for 1923, 1924 and 1925 as 100. This compares with 113 in Septem ber, the high point of the year, and with 108 a year ago. The decline since the recent high point has been entirely in the manufacturing industries as the output of minerals was at a record high level in November and showed only on the other hand, declined in December and were smaller than a year ago in practically all leading lines, except shoes. Merchandise stocks carried by department stores were reduced slightly more than is usual in December and were somewhat smaller at the end of the month than in 1925, and wholesale stocks were also slightly smaller than a year ago. P RICES — Wholesale prices declined further in De cember and the Bureau of Labor Statistics index at 147 PERCENT PER c o n - ZUU 200 Vs 150 J A 150 \ WHOLESALE PRICES • AMCommodities • • • Agricufturaf Non-Agricufturof 100 i ....... 1924 1923 1925 1926 1927 100 Indexes of United States Bureau of Labor Statistics, (1913 = 100). Latest figures, December, all commodities 147, non-agricultural 151.5, agricultural 142.2. a slight decline in December. By far the greatest recession of recent months has been in the automobile industry, out put of passenger cars and trucks in the United States de creasing from 425,000 in August to 165,000 in December. Reduction in the manufacture of automobiles is usual at the end of the year, when plants close for inventory and repairs, but in December, 1926, the decline was considerably larger than usual. Production of iron and steel has also been sharply reduced since the middle of August and activity in the woolen and worsted and silk industries has been somewhat curtailed. Production of lumber, cement and other building material has reflected the usual winter de crease in demand. Cotton consumption, on the other hand, was larger than in any previous December. Factory employment and payrolls declined further in December, reflecting decreases in nearly all industries except cotton goods, clothing, foundries, machine shops and printing and publishing. The value of building contracts awarded in December, as in November was larger than in the corresponding period a year earlier, but for the first three weeks of January con tracts were in smaller volume than during the same weeks of 1926. for that month was at the lowest level since the middle of 1924. Prices of agricultural products, which declined considerably in October and November, increased slightly in December, owing to advances in prices of grains and cattle. In January iron and steel prices were slightly re duced and there were further declines in bituminous coal and nonferrous metals, while prices of cotton goods and coke advanced. B A N K C R E D IT — At the Reserve banks during the four weeks following the peak of the seasonal currency de mand, there was a return flow of Federal reserve notes and other cash from circulation amounting in the aggregate to about $400,000,000. This return flow of currency was in about the same volume as a year ago, and together with substantial gold imports, was reflected in a reduction of the volume of Reserve bank credit in use to a level on January 19 lower than at any time since the summer of 1925. Loans and investments of member banks in leading cities, after increasing to a record level at the end of the year, declined sharply in January. Commercial loans, which had reached their seasonal peak in November, were in the middle of January about $200,000,000 below the maximum figure, but still more than $300,000,000 above the level of a year ago. Loans on securities of the reporting banks also BILLIONS OF DOLLARS 2 BILLIONS OF DOLLARS ■ ...............I 2 1 RESEIRVE BANK CREDIT 1 .... ......... Total , k Fteserve Bank / Credit J I L L fcsfo in r Memb r Banks L USSectirities ---"" V / Acceptances x ~ 1923 i 1924 1925 1926 1927 Monthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages for first 23 days in January. T R A D E — Retail sales during the holiday trade in December exceeded all previous records. Sales of depart ment stores were approximately four per cent larger than in December, 1925, and sales of mail-order houses, while slightly smaller than in 1925, were larger than in the cor responding month of any other year. Sales at wholesale, declined after the turn of the year, following a large increase in December and were slightly smaller than in January, 1926. Easier conditions prevailed in the money market in January and rates of prime commercial paper declined from 4l 2 to 4^4 per cent and those on bankers’ acceptances from / 3% to a range of 3§4-3$i per cent.
@FedFRASER