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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Afternoon Papers of January 30, 1942 FEDERAL RESERVE BANK OF ST. LOUIS C O U R T E S Y G R A N IT E C IT Y S T E E L C O . Eighth District Steel Plant SUMM ARY OF EIGHTH DISTR ICT I N D U S T R Y and trade in the E ighth D istrict held at very high levels during December and early January. The gain in volume of trade in December was more than seasonal. In past years industrial activity has dropped som ew hat in the holiday period, but this year it was m aintained at close to capacity in most lines. Such declines as were evidenced were due prim arily to shortages of materials. Production for war needs is being intensified. The shift to an all-out w ar effort is underw ay. This effort is already pressing hard upon m anufacture for civil ian needs and will press harder in the future. De cember arm s expenditure was at an annual rate of $24 billion. This rate will have to be stepped up trem endously to achieve the goal of $56 billion dur ing the fiscal year 1943. This means th at m ost dur able goods producers m ust either shift to production of arm am ents or essential producers goods. Produc tion of additional durable goods will be restricted to that necessary for replacem ent and repair of m achinery used in m anufacturing civilian goods es sential to our w ar effort. Industries engaged in m anufacture for direct non-essential civilian needs will thus be forced to shift over to w ar production where possible or get along w ithout replacem ent m achinery and possibly w ithout full labor forces. Em ploym ent should increase in coming months. W hile individual civilian businesses may be badly hurt in the transition period now taking place, workers in such lines are likely to be trained and absorbed quickly by w ar industries. Construction labor which was to have supplied a pool of workers when the construction program declined are now busily engaged in a new program th at may well exceed th at of 1941. The expansion of the armed services will also absorb a large portion of the avail able labor pool. Reflecting chiefly increased w ar effort the rate of industrial production in the U nited States rose to a new peak in December. The index of the Board of Governors of the Federal Reserve System, adjusted for seasonal variation, climbed to 168 per cent of the 1935-1939 average, as compared w ith 166 in Novem ber and 163 in October. The December index was 21 per cent above the level of a year ago. Several m onths ago it was thought th at industrial produc tion had reached a plateau from which further rises would be small and difficult to attain, but as more and more facilities come into being the rate continues to advance. O utput of bitum inous coal at mines in this area Page 2 in December increased 4 per cent over November and was 8 per cent over December, 1940. Produc tion during 1941 was 8 per cent greater than the previous year. Steel ingot production at mills in the district was curtailed in December due to repairs and scrap shortages. F u rth er decline may be evi denced in the future as scrap supplies dwindle. December consumption of electricity by industrial users was 2 per cent above Novem ber and 15 per cent more than a year ago. T otal industrial con sum ption during 1941 was 24 per cent greater than in 1940. Dollar value of building perm its granted in December was 42 per cent less than in November and 52 per cent less than in December, 1940. For 1941 the value exceeded th at of 1940 by 38 per cent. Sales of ordinary life insurance in E ighth D istrict states in December were 49 per cent and 37 per cent greater, respectively, than a m onth and a year ago. Revenue freight carloadings of railroads operating in the E ighth D istrict during the four weeks ending December 27 were 4 per cent less than a m onth earlier but 14 per cent above the sim ilar period last year. Load interchanges for 25 connecting lines handled by the Term inal Railroad Association of St. Louis during December were slightly less than in November and 27 per cent greater than in Decem ber, 1940. Cum ulative total of interchanges for 1941 exceeded those of 1940 by 28 per cent. Estim ated tonnage moved by the Federal Barge Lines on the M ississippi River between St. Louis and New O r leans in December was 50 per cent less than in November and 3 per cent above a year ago. Cum u lative tonnage for 1941 exceeded th at of 1940 by 29 per cent. Retail trade showed sizable gains over a month and a year ago. W holesaling was slightly below No vem ber but well above last year. December sales of departm ent stores in the principal cities of the Dis trict were 51 per cent more than in Novem ber and 20 per cent greater than a year earlier. T otal sales for 1941 were 21 per cent above those for 1940. Sales in December of all w holesaling and jobbing firms whose statistics are available to this bank were 2 per cent below the preceding m onth and 34 per cent greater than a year ago. Debits to individual accounts in December were 18 per cent above November and 31 per cent above a year ago. Gross deposits rose to a new peak as investm ents increased and loans declined slightly. The cost of living for the E ighth D istrict as m eas ured by the indexes for St. Louis and M emphis con tinued to rise but at a lower rate than was evident in previous months. D ET A IL ED SUR VE Y OF D IST RI CT IR O N A N D S T E E L Steel output in this area during late December and early January was at a lower level than in pre ceding m onths, due prim arily to curtailm ent of scrap supplies. This is in sharp contrast to national output which was close to a record. A fter operating at close to capacity for m ost of 1941, furnaces in this district were forced to cut production sharply in the last week of December. As of m id-January the rate of operations in the St. Louis district was at 78.3 per cent of capacity. This represents a de cline of about nine points from a year ago. The scrap situation has grow n even tighter. Re cent cold w eather made collection very difficult and consequently mill inventories have declined sharply. W arm er tem peratures are expected to aid in the gathering of scrap. Also, trade sources expect the St. Louis area to be placed in a better position by recent changes announced by the Office of Price A dm inis tration with regard to steel scrap price schedules. Allocation plans have helped m aintain operations at the present levels, but unless more actual scrap is delivered here, allocation as such will not relieve the situation. Allocation of pig iron seems to be w ork ing out satisfactorily. The impact of w ar has intensified demand for all steel products. It was believed th at cancellation of sheet orders brought about by stoppage of autom o bile production would ease the sheet situation, but much sheet capacity is now being used for rolling plates for which demand has increased. In view of the greatly expanded w ar program laid down by the President further curtailm ent of civilian con sum ption of steel products appears in prospect. F or the entire country pig iron production in December broke all previous daily, m onthly, and annual records. According to the m agazine “Steel” December output was 5,014,995 tons compared with Novem ber production of 4,707,194 tons, and Decem ber, 1940 production of 4,542,864 tons. Average daily output in December was 161,774 tons. T otal 1941 production was 55,918,086 tons compared with 46,894,676 tons in 1940, and 35,310,042 tons in 1939. Steel ingot production in the U nited States in December was w ithin 1 per *cent of the best on rec ord. December output was 7,163,999 tons compared w ith 6,969,987 tons in November and 6,495,357 tons a year ago. Production in 1941 totalled 82,927,557 tons, about 25 per cent above 1940 output of 66,981,662 tons. W H IS K E Y Of the 58 distilleries in K entucky, 51 were in operation on Decem ber 31 com paring w ith 46 on November 30. Production continues at capacity levels in m ost cases. On January 8 the Office of Production M anagem ent ordered 60 per cent of the distilleries in the nation to begin the m anufacture of industrial alcohol on January 15. This order is intended to require the use of grain instead of molasses in the production of alcohol used in the m anufacture of smokeless powder. It is expected th at K entucky distilleries will be m aterially affected by this, and an annual decrease of K entucky State revenue of about $1,250,000 is estim ated because of decreased whiskey production. On A ugust 31, 1941, bourbon whiskey of various periods of production rem aining in bonded w are houses in K entucky am ounted to 4,405,473 barrels, an all-time high record. This inventory exceeds th at of April 30, 1941 by 44,058 barrels. Storage of 1941 production am ounts to 1,237,720 barrels, an am ount exceeded only during the record year 1937 when 1,592,000 barrels were produced. W ithdraw als of 1937 production in 1941 were 503,491 barrels. A G R IC U L T U R E Farm ing Conditions — D uring December, mild w eather prevailed in m ost parts of the E ighth D is trict and was generally beneficial to crops and live stock. It also perm itted completion of some late harvesting and fall farm routine which had been somewhat delayed by heavy fall rains. In southern Arkansas it was estim ated th at about 50 per cent of ground for the 1942 cotton crop in th at area was broken by late December. The severe cold w eather which spread over m any sections in early January caused some local damage, particularly to fruit orchards, but it is too early as yet to assess the results for the district as a whole. On January 15 the U. S. D epartm ent of A gricul ture announced new 1942 production goals for hogs, corn for feed, oil-bearing crops, rice, eggs, dry beans, and vegetables for canning. Rigid crop controls will be retained on cotton and wheat, and but a small increase will be allowed for tobacco, since large stocks of these crops already exist. These new pro duction schedules will put a further burden upon farm ers and farm family workers inasmuch as large num bers of potential farm laborers have been ab sorbed by the arm ed services or by non-agricultural employment. In addition new farm m achinery pro gram s call for production at about 80 per cent of 1940 production, so th at farm m echanization cannot be greatly increased during coming months. Total farm value of principal crops in E ighth D is trict states showed gains in 1941 over 1940 ranging from about 29 per cent in the case of M issouri to Page 3 about 81 per cent in the case of Mississippi. Most of this increase was due to higher prices since acre age increases were very small. The pronounced rise in the price of cotton and cottonseed accounted for the very large increases in farm value of crops in the cotton producing states of the D istrict. As of December 15 the U nited States index of prices received by farm ers stood at 143 per cent of the A ugust, 1909-July, 1913 average, up 6 per cent from the Novem ber index of 135, and 42 per cent above the December, 1940 index, which was 101. Prices received by farm ers in E ighth D istrict states were appreciably higher than a m onth ago. The m ost pronounced rise in the past year occurred in Arkansas where the index was 67 per cent above December, 1940. Cotton — The 1941 E ighth D istrict cotton crop was larger than th at of 1940 and considerably larger than the average crop for the past eighteen years. The price of cotton is alm ost twice as high as at the beginning of the war. M ost of the rise has come in the past year. In the St. Louis m arket 15/16 m iddling ranged between 17.55c per pound and 18.90c per pound between December 16, 1941 and Jan u ary 15, 1942, closing on the latter date at 18.90c per pound. A year ago the range was from 9.55c to 10.00c, with the close at 9.90c. W hile the total current domestic supply of cotton is about double prospective domes tic consumption plus exports, a substantial portion of the stocks is Government-owned. The am ount of free cotton is about 150 per cent of prospective con sumption plus exports, as compared to about 125 per cent in the 1916-1917 period. Despite this fact the price rise has been relatively larger during the past two years than during the corresponding period in the first W orld W ar. United States cotton consum ption may increase during coming m onths due to w ar demands, substi tution of cotton for certain im port fibers, and in creased civilian demand. The extent of further expansion in mill output, however, is dependent largely upon the ability to obtain new and replace m ent equipm ent, and upon the available supply of mill labor. In recent weeks domestic mill activity has increased to an unusually high level with many additional mills going into a seven-day week. Spot cotton m arket activity in the m id-south is increasing, with demand strong for most qualities of white grades. Offerings of such grades are a little more free but are still not sufficient for the demand. Offerings of the lower grades are sufficient however. The holding m ovem ent of the higher grade cotton in this area seems to be continuing w ith very little of the crop from E ighth D istrict states going into Page 4 Government loan. As of January 2 about 6 per cent of E ighth D istrict cotton was in Government loan as compared w ith alm ost 17 per cent for the country as a whole. Domestic state allotm ents of cotton acreage are about the same as last year. For the cotton produc ing areas of E ighth D istrict states the prelim inary allotm ent is 99.8 per cent of 1941 prelim inary allot ment. Livestock — The production and m arket supply of hogs in 1942 will be m aterially greater than th at of any previous year. T he 1941 pig crop for the U nited States is 18 per cent larger than the fall crop of 1940 and is the largest of record. The indicated num ber of sows to farrow in the spring season of 1942 is 28 per cent above the num ber farrowed in the spring of 1941 and is also the largest on record. For states in the E ighth D istrict the fall pig crop is 14 per cent over th at of 1940 and 39 per cent over the ten-year (1930-1939) average. The combined spring and fall crops of E ighth D istrict states for 1941 is 6 per cent above 1940 production and 27 per cent above the ten-year average. There were 3 per cent less cattle on feed in Corn Belt states on January 1, 1942 than a year ago, ac cording to the U. S. D epartm ent of A griculture. Present indications are th at the net increase in num bers of livestock in 1942 will be even greater than the increase of about 6 per cent shown in 1941. Present stocks of feed grains on farm s appear to be from 5 to 8 million tons larger than for the past three years. Feeding ratios continue to favor utili zation of corn and other feed grains. Recent cold w eather has brought about heavier feeding require ments. Tobacco — W hen the burley m arkets closed for the holidays on December 19 a total of 207,000,000 pounds had been sold at an average price of $29.26 per cwt. Auction sales reopened January 5 with sales for the week at all burley m arkets am ounting to 67,293,676 pounds at an average price of $30.81 per cwt. T hrough January 9 the season average price at K entucky m arkets has been $29.57, at T en nessee m arkets, $31.20, and at all others, $27.45. The highest average price of the season to date at K entucky m arkets w as-registered on January 12 at $31.27. Subsequently, prices have tapered off with State-wide average on January 20 at $26.86 per cwt., $4.41 below the season’s high. Despite the heavy snow and cold w eather during the early part of January, large quantities of burley were sold with demand strong for all grades. By January 10 it was estim ated th at 70 per cent of the crop had been sold w ith very little delivered to the Burley Growers Co-operative Association. To date K entucky burley grow ers have received nearly $57,000,000 for tobacco sold, w ith estim ates for final total income ranging from $70,000,000 to $75,000,000. For the entire 1940 crop, grow ers received but $46,698,784. Green River and stem m ing district m arkets re opened on January 5 w ith a heavy volume of offer ings. Prices weakened som ew hat at opening but have strengthened recently. T hrough January 13 total sales for the season were 8,375,266 pounds at an average price of $11.92 per cwt. This represents a rise of about 4c per cwt. from the pre-holiday sea son average. A pproxim ately ten per cent of total m arketings of the crop have been taken by the F arm ers Co-operative Association. Dark-fired m arkets opened in the eastern and w estern districts betw een January 5 and 7. Sales were light because of cold and snow which made it difficult to strip and deliver tobacco. Prices were considerably above last season’s opening week, being from $2.00 to $5.00 per cwt. higher on heavy leaf grades. Dom estic snuff dealers are buying strongly w ith trade reports indicating an increased demand for tobacco for the m anufacture of snuff and chew ing tobacco. Increased use of these products is re ported in defense plants and the arm y where sm ok ing is restricted at certain times. Reopening of one-sucker m arkets on January 2 brought a price rise of from 25c to $2.00 per cwt. T hrough January 7 total sales for the season were 8,749,394 pounds at an average price of $11.50. W in ter W heat — Acreage seeded to w inter w heat in E ighth D istrict states according to the U. S. D epartm ent of A griculture totals 4,869,000, which is 19 per cent less than the 6,040,000 acres seeded in 1940, and 29 per cent less than the ten-year (19301939) average of 6,878,000 acres. U nfavorable autum n w eather and heavy rainfall curtailed planting in cer tain areas. December 1 condition varied from 66 per cent in M issouri to 90 per cent in Kentucky. Con dition in Illinois and M issouri was below th at of the same date in 1940, in Indiana and Tennessee it was the same, while K entucky and A rkansas showed im provem ent from a year ago. Indicated 1942 pro duction is 68,342,000 bushels, or 32 per cent less than 1941 production of 100,736,000 bushels, and 36 per cent less than the ten-year (1931-1940) average of 106,516,300 bushels. W arm w eather in late December brought some grow th to w inter wheat, but low January tem per atures may have damaged some of the crop, espe cially in M issouri and central Illinois where there was little snow to give adequate protection to fields. Stocks of w heat on farms in E ighth D istrict states on January 1 were 23,362,000 bushels as compared with 24,328,000 a year earlier and the 1931-1940 average of 23,790,000. F or the U nited States wheat stocks were considerably in excess of both a year ago and the ten-year average. COST OF L IV IN G A N D PR IC ES For the larger cities in the U nited States, the cost of living rose 0.3 per cent betw een Novem ber 15 and December 15 and 9.8 per cent since the beginning of the war in 1939. The rate of increase again declined during the past m onth. Living costs in St. Louis rose 0.7 per cent in the past m onth and 10.2 per cent since September, 1939. In Memphis the rise was 10.7 per cent since the outbreak of war. A prim ary factor in lowering the rate of increase in cost of living this past m onth has been the very small change in the cost of food. Food expenditures account roughly for one-third of total expenditures for living. For the U nited States the average of all food costs was unchanged from Novem ber 18 to December 16. Seasonal declines for pork, eggs, and oranges, and lower b u tter prices offset m oderate increases in other food prices. E ighth D istrict cities, however, did not follow the average. Food prices in Louisville declined 0.4 per cent. Those in St. Louis advanced 0.4 per c e n t; in Memphis, 0.7 per c e n t; and in Little Rock, 1.0 per cent. W holesale prices of commodities have moved up rapidly in recent weeks, w ith farm product prices leading the advance. For the week ending January 10, the index for all commodities stood at 95 per cent of the 1926 base, the highest point in 12 years, representing a rise of 2.0 per cent in the past month, and 18.5 per cent in the past year. EM PLOYM ENT Total civil non-agricultural employment in No vember was 40,693,000, a decrease of 83,000 from the October level, but an increase of 3,165,000 from a year ago. A drop of 70,000 in m anufacturing em ployment accounted for much of the m onth’s net decline, although this decrease was less than sea sonal. Mining, transportation and public utilities, and finance and service employment were less than October totals while trade and construction employ ment showed gains. The rise in construction employ ment was due entirely to Federal building as a sea sonal decrease occurred in non-Federal construction N on-agricultural employment in E ighth D istrict states in Novem ber was 5,753,000 as compared with 5,764,000 in October and 5,119,000 a year earlier. Only M issouri and A rkansas in this district showed gains from October of 1.0 per cent and 3.5 Page 5 per cent, respectively. T he greatest decline was registered by M ississippi with 1.8 per cent. K en tucky showed no change from a month ago. In the past year all E ighth D istrict states have shown large increases in em ploym ent with Missouri exhib iting the greatest, 17.9 per cent, and Mississippi the smallest, 7.2 per cent. B A N K IN G A N D FIN A N C E POSTAL RECEIPTS Page 6 Sept. 30, 1941 $ 195,654 252,924 772,398 745,576 2,775,132 4,741,684 Dec. 31, 1940 $ 215,665 257,192 877,376 901,182 3,267,824 5,519,239 November 1940 1941 $23,148 $45,021 50,230 . . , 72,551 . 39,864 29,561 9,922 13,677 31,466 34,520 M ississippi. . . 43,680 32,177 26,522 18,121 Tennessee . . . ___ Cumulative for 11 months 1941 1940 1939 $132,956 $229,116 $147,752 641,701 514,380 475,802 277,729 348,564 254,574 151,882 129,017 122,003 135,845 201,350 152,704 362,873 274,496 251,252 116,862 171,408 122,937 2,106,894 1,604,219 1,504,090 (In thousands of dollars) 275,835 194,625 RECEIPTS A ND SH IP M E N T S AT N A T IO N A L STOCK YARDS A som ew hat smaller demand for credit seems to have prevailed in the E ighth D istrict during the past month. The im petus to credit demand given by the extended program of forward buying in earlier m onths has apparently slowed down. Con ditions brought about by the war have tended to freeze certain lines of credit, notably with respect to borrow ers dealing in automobiles and metal prod ucts. Also, until m anufacturing plants engaged in civilian production are able to shift over to war production, at least in part, there may be a lessened demand from such sources due to inability to obtain raw m aterials and machinery. However, banks lo cated in some agricultural communities and certain areas where war production or construction of new plants is going on report th at credit demand is still rising., The enlarged farm program coupled with higher farm prices may increase demand for agri cultural credit. Member Banks — Total loans and investments of reporting m ember banks in the principal cities of the district on January 14,1942 were virtually unchanged from December 17, 1941, but were 23 per cent above a year ago. Investm ents rose 2 per cent in the month, reflecting chiefly increased purchases of T reasury notes and bills. Loans declined 2 per cent during the period. Both loans and investments were 23 per cent over the corresponding date a year ago. Gross deposits reached another new peak on Jan uary 14, standing at $1,449,511,000, up 18 per cent in the year. Total reserve balances increased 12 per cent in the four-week period and were three per cent above the comparable date last year. A ggre gate am ount of savings deposits on January 7 was 1.1 per cent and 1.5 per cent, respectively, below a m onth and a year ago. Since the last issue of this review, the Maries County Bank, Vienna, Mo., and the M ontrose Sav ings Bank, M ontrose, Mo., became members of the Federal Reserve System. Quarter ending : Dec. 31, 1941 E van sv ille......... $226,800 301,798 L ittle Rock L o u is v ille ......... 961,015 M em phis............ 1,006,659 St. L o u is............ 3,510,343 T o ta ls............ 6,006,615 FARM INCOM E IN C L U D IN G GOVERNM ENT B E N E F IT PAYM ENTS Comp. 4th 1941 and : h 5% - -17 -10 -12 - 7 + 9 R eceipts D ec., N ov., D ec., 1941 1941 1940 Cattle and C a lv e s ... . .10,5,076 118,950 99,484 H o g s .............................. ..2 9 7 ,9 8 5 224,570 337,069 2,292 H orses and M ules . . . . 2,014 1,210 . . 44,493 52,144 37,188 Shipments D ec., N ov., D ec., 1940 1941 1941 39,852 45,721 32,689 80,456 42,146 87,646 1,970 2,252 1,182 4,568 6,039 4,519 449,568 397,956 474,951 126,846 96,158 126,036 W H O LE SA LE PRICES IN TH E U N IT E D STATES Bureau of Labor Statistics (1 9 2 6 = 1 0 0 ) Jan. 10,,’42 A ll C om m odities. . 95.0 Farm Products . 98.8 92.5 94.3 Jan. 3 /4 2 Dec. 13/41 Jan. 11/41 94.3 96.9 91.9 94.1 93.1 92.8 90.4 93.8 80.2 71.0 73.0 84.4 Jan. 10/42 comp, with Dec. 13/41 Jan. 11/41 + + + + COST OF LIV IN G Bureau of Labor Statistics (1935-39= 100) Dec. 15, 1941 N ov. 15, Sept. 15, 1941 1939 U nited S ta te s......... 110.5 110.2 109.8 St. L o u is.............. 110.6 * 111.1 M em phis.............. *M onthly statistics not available. 2.0.% 6.5 2.3 0.5 f-18.5% -39.2 -26.7 -11.7 D ec. 15/41 comp, with N ov. 15/41 Sept. 15/39 100.6 10.0.4 100.4 + + 0.3% 0.7 + 9.8% + 10.2 + 1 0 .7 COST OF FOOD Bureau of Labor Statistics (1935-39= 100) Dec. 16, 1941 U . S. (51 cities) . . . St. L o u is.............. Little R ock......... L o u is v ille ............ M em phis.............. N ov. 18 , 1941 113.1 117.5 115.5 113.7 113.1 Dec. 17, 1940 Dec. 16/41 comp, with N ov. 18/41 Dec. 17/40 97.3 99.3 96.0 95.9 95.6 113.1 117.0 114.4 114.1 112.3 -0 .- % + 0.4 + 1.0 — 0.4 + 0.7 + 16.2% + 18.3 H[-20.3 (-18.6 + 18.3 IN D E X E S OF EM PLO YM ENT IN M ANUFACTURIN G IN D U S T R IE S BY M ETRO PO LITAN AREAS Bureau of Labor Statistics Oct., (1937=10.0) _____ 1941 E van sville.................. 90.9 L ou isville.................. 119.2 M em phis..................... 118.0, St. L o u i s .................. 121.8 * Revised Oct., _____ 1940 77.3 106.0 104.9 100.8 Sept., _____ 1941 92.0 116.6* 106.6* 120.8 O ct./41 comp, with S ep t./4 1 Q c t./4 0 — 1.2% + 2.2 + 1 0 .7 + 0.8 + 1 7 .6 9 + 1 2 .5 + 12.5 +20.8 B U IL D IN G PERM ITS N ew Construction N umber Cost 1941 1940 1941 1940 ( Cost in thousands) E v a n s v ille .. . L ittle R ock . . L o u is v ille __ 27 11 54 24 109 49 366 364 149 177 Dec. T o ta ls. . 703 627 Nov. “ 787 823 Year “ . 12,493 10,465 $ 104 109 206 586 293 1,298 2,249 36,253 $ 47 106 126 1,870 629 2,778 2,005 26,254 Repairs, etc. Number Cost 1941 1940 1941 1940 54 $ 60 $ 20. 67 87 60 35 21 28 42 58 26 109 163 136 102 92 257 148 133 491 370 372 465 555 528 474 281 8,326 6,974 7,625 6,565 V A L U E CONSTRU CTIO N CONTRACTS LET (In thousands of dollars) D e c./4 1 N o v ./4 1 T otal 8th D is t.. . $35,271 $23,394 S ou rce: F . W . D odge Corporation. *Revised. D e c./4 0 $30,952 D e c./4 1 comp, with N o v ./4 1 D e c./4 0 + 53% + 14% C O NSUM PTION OF ELECTRICITY (K .W .H . in thous.) N ov., N o. of D ec., Custom 1941 1941 ers* K .W .H . K .W .H . E vansville . . . . L ittle Rock . . . L o u is v ille .. . . . ., Pine Bluff . . . . 4,336 2,426 15,112 4,497 1,355 54,348 . , 333 82,074 ^Selected industrial customers. (In thousands of tons) 40 35 82 31 20 4,127 2,637 13,605 4,522 1,487 53,779 80,157 December, 1941 D ec., 1940 compared with K .W .H , N ov., 1941 D ec., 1940 4,851 2,309 11,572 3,306 927 48,30,5 71,270 + 5% — 8 + 11 — 1 — 9 + 1 + 2 — 11% + 5 + 31 36 + 46 + 13 + 15 PR O D U C TIO N OF B IT U M IN O U S COAL U nited States. . . . I l l i n o i s .................. D e c./4 1 46,667 5,006 N o v ./4 1 D e c./4 0 42,865 4,366 41,400 4,942 D e c./4 1 comp, with N o v ./4 1 D e c ./4 0 + 9% + 15 +13% + 1 L O A D S IN T E R C H A N G E D F O R 25 R A IL R O A D S A T ST . L 9 U IS First nine days D ec.,’41 N o v .,’41 D ec.,’40 Jan.,’42 Jan.,’41 12 m os.*41 12 mos.MO 1,269,640 989,987 110,,959 111,100 87,281 29,379 25,187 Source : Terminal Railroad A ssociation of St. Louis. W H O L E S A L IN G Lines of Commodities N et Sales D ata furnished by Bureau of Census, U . S'. D ept, of Commerce. Stocks December, 1941 compared with N o v .,’41 D ec.,’40 Dec. 31, 1941 comp, with Dec. 31, 1940 + 92% — 4 15 34 64 22 50 34 120 + 42 33 + 43 + 34 Autom otive Su pplies................................ ... — 3% B oots and S h o e s ........................................ — 10 D rugs and C hem icals......... ....................... - 0 D ry G o o d s ...................................................... — 25 Electrical Su pplies................ .................... ... + 2 4 Furniture....................................................... ... <— 7 G roceries....................................................... ... + 1 5 H ardw are................................................ ..........+ 7 M achinery, Equipment and Supplies. + 2 Plum bing S u p p lie s .................................. ... + 1 Tobacco and its P rodu cts........................ + 9 M iscella n eo u s.............................................. ...+ 1 5 T otal all lin es.............................................. ...— 2 + 34 +46 + 30 +24 +47 +34 + 32 D E PA R T M E N T STO R ES Stocks on H and Stock Turnover D ec. 31/41 comp, with D ec. 31,’40 Jan. 1 , to Dec. 31, 1941 1940 N et Sales December, 1941 12 m os.’41 compared w ith to same N o v .,’41 D ec.,’40 period ’40 + 20% + 59% + 3 6 % Ft. Smith, A r k ... —24 +41 + 18 L ittle Rock, Ark. — 29 +23 +61 Pine Bluff, A rk.. —24 + 53 + 33 E. St. Louis, 111. 4.26 4.24 + 23 + 19 — 14 + 57 Quincy, 111............ --1 4 48 16 Evansville, I n d .. . 4.87 28 5.23 — 31 15 — 51 L ouisville, K y .. . . 4.65 32 4.47 --1 7 52 20 St. Louis, M o .. . . 3.12 3.71 49 53 +26 -3 3 Springfield, M o .. . t 40. —43 —46 Jackson, Tenn. . . V.7 3 3*75 —21 + 28 + 56 23 M emphis, T e n n ... 3.29 3.38 + 23 + 42 22 *A 11 other cities. . — 18 4.40 4.35 —21 + 31 8th F. R. D istrict +51 —20 *E1 Dorado, Fayetteville, A r k .; A lton, Harrisburg, M t. Vernon, 111.; Vincennes, I n d .; D anville, H opkinsville, K y .; Chillicothe, Mo. Trading days: D ec., 1941— 26; N ov., 1941— 2 4 ; D ec., 1940— 25. Outstanding orders of reporting stores at the end of December, 1941, were 63 per cent greater than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding December 1 , 1941, collected during December, by cities: Installm ent E xcl. Instal. Installm ent E xcl. Instal. Accounts A ccounts A ccounts A ccounts + Fort S m ith .. L ittle R o c k .. Louisville . . . Memphis . . . . . . °/ 15 18 30 44% 38 49 47 Q uincy............ St. L ouis. . . . Other c itie s .. 8 th F. R. D ist. 55% 60 48 53 20% 20 14 20 I N D E X E S O F D E P A R T M E N T S T O R E S A L E S A N D ST O C K S 8th Federal Reserve D istrict (1923-1925 average = 100) : O ct., N ov., D ec., D ec., 1940 1941 1941 1941 167 119 133 10,6 101 114 64 108 105 69 92 96 94 41— 24; Dec., 1 9 4 0 --25. 190 115 86 FEDERAL RESERVE O PERATIO NS D U R IN G DECEM BER, 1941 (Incl. Louisville, Memphis, L ittle Rock branches) Stock T urnover Jan. 1 , to D ec. 31, 1941 1940 Stocks on Hand D ec. 31/41 comp, with D ec. 31,’40 +33% +25% +28% + 30% 3.14 2.81 M en’s Furnishings + 42 +28 +21 + 49 8.46 7.86 Boots and S h o es. . Percentage of accounts and notes receivable outstanding December 1, 1941, collected during D ecem ber: M en’s F u rn ish ings....................... 35% B oots and S h o es.......... ..................35% C H A N G E S I N P R I N C IP A L A S S E T S A N D L IA B I L I T I E S F E D E R A L R E S E R V E B A N K O F ST. L O U IS Change from Jan. 14, Dec. 17, Jan. 15, 1941 1942 1941 (I n thousands of dollars) 200 20.0 Industrial advances under Sec. 13b. .........$ Other advances and rediscounts 106,485 U . S. securities......................................... T otal earning a sse ts......................... ......... 106,685 — 300 — 55 — 6,333 — 6,688 + — + + T otal reserv es............................................ ......... 661,363 Total deposits ............................................ . . . . 442,864 F. R. N otes in circulation.................. ......... 321,366 + 30,159 + 1 4 ,2 5 9 + 6,491 + 153,727 + 57,171 + 101,687 Industrial commitments under Sec. 1 3 b .. — 1,194 8 + 19 3,346 3,527 896 Am ounts RATES OF TH IS BAN K FOR ACCOM M ODATIONS U N D E R T H E FED ER A L RESERVE ACT Advances to banks, secured by direct obligations of the U nited States, under paragraph 13 of section 1 3 ..1 % per annum A dvances to member banks, secured by direct obliga tions o-f the U nited States or by such Government guaranteed obligations as are eligible for collateral, under paragraph 8 of section 1 3 ............................................1 % per annum Rediscounts and other advances to member banks un der sections 13 and 1 3 a ............................................................ 1 ^ % per annum Advances to member banks under section 1 0 (b )................ 2 % per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the U nited States, under paragraph 13 of section 13............4 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 13b: ( \ y2 % to (a) On portion for which such institution is obligated 12 % per annum (b) On remaining portion — N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial < 3 /x 2 % to businesses under section 13b................................ ................I 5J^% per annum Commitments to member banks, nonmember banks, and other financing institutions, under section 1 3 b . . . . l % per annum Provided: that on commitments issued for periods of 90 days or less the minimum charge shall be 54 of 1% flat; and further provided, that on commitments for loans secured by assignment of “ Emergency Plant F acil ities Contract” with the U nited States Government, the rate may be as low as of 1% per annum. PRINCIPAL RESOURCE AND L IA B IL IT Y ITEM S OF REPORTING M EM BER BANKS Ian. 14, 14. Jan. 1942 (In thousands of dollars) Change from D ' Dec. 17, Jan. 15, 1941 1941 $284,888 — 7,591 + 64,562 23,557 + 1,458 + 13,626 4,303 — 866 + 316 10,282 — 447 2,506 59,338 — 843 + 712 756 + 182 2,049 77,209 — 2,152 + 9,220 17,363 + 1,498 + 3,225 44,529 + 1,529 + 8,669 U. 231,793 + 588 + 70,234 t 72,239 + 4,936 + 8,818 , 112,706 — 747 1,190 210,894 + 10,028 + 14,222 Demand 631,853 + 14,761 + 89,782 , 187,100 — 1,561 5,036 30,112 + 2,302 + 19,881 Interbank d ep o sits..,................................ 502,877 + 2 1 ,9 9 6 + 89,044 B o r r o w in g s ............................................................................... ......... ............ *Other than interbank and Government deposits, less cash item s on hand or in process of collection. Above figures are for 24 member banks in St. Louis, L ouisville, M em phis, L ittle Rock and Evansville. Their resources comprise approximately 75% of the resources of all member banks in this district. Loans to brokers and dealers......................... Other loans to purchase and carry securities. Real estate loans................................................... Loans to banks....................................................... S P E C IA L T Y ST O R E S N et Sales December, 1941 12 m os.’41 compared with to same N o v .,’41 D ec.,’40 period ’40 Pieces Checks (cash item s) han dled ................................ 6,3,12,696 $2,048,090,525 Collections (non-cash item s) handled................ 155,140 41,555,675 Transfers of funds....................................................... 5,457 552,583,568 Currency received and cou n ted .............................. 12,856,074 44,827,172 Coin received and c o u n t e d ..................................... 12,268,676 1,202,4*6 Rediscounts, advances and com m itm ents......... 19 1,019,000. N ew issues, redemptions, and exchanges of securities as fiscal agent of U . S. Govt., etc. 185,794 70,622,137 Bills and securities in custody— coupons clipped 20,745 ............................... (In thousands of dollars) D E B IT S T O I N D I V I D U A L A C C O U N T S D ec., N ov., D ec., D ec .,*41 comp, w ith 1941 1941 1940 N o v .,*41 D ec. ,*40 El Dorado, Ark.$ 9,076 “ Fort Sm ith,. , . . 22,909 “ 3,096 “ L ittle Rock, . . . 62,208 “ Pine Bluff, 15,291 Texarkana, Ark. -Tex. 25,362 E .S t.L .-N a t.S .Y .,111. 65,640, Q uincy,.............. .. “ 12,967 Evansville, . . Ind. 48,786 L o u isv ille ,___ ..K y . 313,091 Owensboro, . . . 11,2 21 Greenville,......... Miss. 9,057 , .M o. 926,502 “ 3,068 “ Springfield, 21,737 .Tenn. 267,765 ...........1,817,776 $ 7,449 18,546 2,964 53,156 12,694 16,858 55,734 11,295 41,343 257,149 7,641 9,878 759,406 2,407 19,450 254,157 1,530,127 5,807 16,285 2,069 56,162 22 % 10 ,112 20 9,951 44,707 9,648 38,943 214,516 7,354 5,853 729,650 2,396 16,651 207,849 1,377,953 50 18 15 18 $ 24 4 17 22 47 8 + 22 + 27 + 12 5 + + 19 + + + + + + + + + + + + + + + + + 56% 41 50 11 51 155 47 34 25 46 53 55 27 28 31 29 32 C O M M E R C IA L F A I L U R E S I N E IG H T H F. R. D IS T R IC T D ec.,’41 comp, with D ec.,’41 N o v .,’41 D e c.,’40 N o v .,*41 D ec.,’40 N u m b e r ................ 25 L iabilities.............. $224,000 Source: Dun and Brad street. (Completed January 24, 1942) 34 $426,000 40 $443,000 — 26% — 47 — 37% — 49 Page 7 INDUSTRIAL N A TIO N A L SUM M ARY O F C O N D ITIO N S PRODUCTION BY B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M Industrial activity declined less than seasonally in December and the first half of January, retail trade continued in large volume, and prices of many commodities rose further. Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average = 1 0 0 . By months, January, 1935 to December, 1941. Latest figure 168. FREIGHT-CAR LOADINGS Production— In December total volume of industrial output declined less than is usual at this season and the Board’s adjusted index rose further to 168 per cent of the 1935-1939 average. In the armament industries output continued to advance and at machinery plants activity rose sharply, follow ing little change in November. Output of materials, such as iron and steel and nonferrous metals, continued at peak levels and lumber production showed less than the usual seasonal decrease. Automobile production declined sharply in the latter half of December, following announcement of sharp reductions in passenger car quotas, but early in January quotas for that month were increased and output rose considerably. Sales of new automobiles to civilians were halted at the beginning of January pending the establishment of a rationing system. Textile production declined somewhat in December owing to a reduction in activity at cotton mills from the record level reached in November. Out put of wool and rayon textiles was sustained at about capacity. Output of manufactured food products and shoe production showed about the customary seasonal declines. Coal output decreased somewhat in December, while petro leum production and mining of nonferrous metals were maintained at the high November rate. Federal Reserve index of total loadings of revenue freight, adjusted for seasonal variation. 1935-39 average = 100. Subgroups shown are expressed in terms of points in the total index. B y months, January, 1935 to December, 1941. WHOLESALE PRICES Value of construction contracts awarded in December declined less than is usual at this time of year, according to figures of the F. W. Dodge Corpora tion. Awards for public projects showed little change, while those for resi dential construction declined less than seasonally following a considerable reduction in November. Distribution — Volume of retail trade, which had been large during most of the autumn, increased less than seasonally in December. This reflected to some extent a temporary slackening in sales around the middle of the month following this country’s entry into the war. In the first half of January sales at department stores showed less than the customary sharp reduction from the Christmas buying peak and were at a level substantially higher in comparison with a year ago than that prevailing in other recent months. Freight-car loadings of most products decreased by less than the customary seasonal amount in December. Coal shipments declined considerably in the latter part of the month but then increased sharply in the first half of Jan uary. Shipments of miscellaneous freight, which includes most manufactured products, were maintained in large volume for this season of the year. Commodity Prices — Wholesale commodity prices increased sharply when this country entered the war early in December and then showed little change during the latter half of the month. In the first half of January prices again advanced, the principal increases being in agricultural commodities and chemicals. Bureau of Labor Statistics’ indexes, 1926 = 100. “ Other” includes commodities other than farm products and foods. B y weeks, January 5, 1935 to week ending January 17, 1942. Federal action to impose maximum prices was accelerated with the out break of war and applied on a wider scale to industrial products. Ceilings were extended to products in later stages of production and distribution and in most instances covered consumers’ goods. Certain of the actions, like those relating to rubber and wool products, were associated with new Federal pro duction restrictions. In this period also there were advances in a number of price ceilings established earlier. Bank Credit — Total loans and investments of banks in leading cities, which had advanced sharply during the first half of December, have subse quently shown little further change. 1935 1936 1937 1938 1939 1940 1941 W eekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds callable after 12 years, and average discount on new issues of Treasury bills offered within week. For weeks ending January 5, 1935 to Jan uary 17, 1942. Page 8 Treasury financing in the middle of December and heavy currency with drawals during the holiday season absorbed close to 700 million dollars of excess reserves during the month. About 500 million of this was recovered in the first half of January, as the result of a decline in Treasury deposits at the Reserve Banks and a return of currency from circulation. Recent changes in excess reserves have been almost entirely at banks outside of New York City. United States Government Security Prices — Prices of Government securities were steady in the first half of January, following a decline in December after the entry of the United States into the war.