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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Morning Papers of July 1, 1943 FEDERAL RESERVE BANK OF ST. LOUIS L. B . R E AD P H O T O Old Cathedral at Vincennes Indiana GENERAL IN D U STR IAL SITU A T IO N H E W ar Production Board recently announced that half the output of the United States in 1943, estimated at almost $190 billion, will be used for the prosecution of the war. The Depart ment of Commerce estimates that sales of manu factured goods during this year will reach $146 bil lion, or 20 per cent more than in 1942. Some twothirds of this volume is earmarked for war use. About 80 per cent of all durable goods manufactured will be used directly in war and much of the remain ing 20 per cent will be producers’ goods. Thus, consumers will have a very small amount of durable goods produced for them in 1943. W ar uses are expected to absorb about one-third of total non durable goods output. Government expenditures for war in May totaled $7.4 billion A vhich represents a daily rate of $284 million. Both monthly and daily expenditures were slightly above April when the W ar Production Board reported that about $5 billion, or more than two-thirds of total war expenditures in that month, went to purchase war goods. Industrial output in May, as measured by the seasonally adjusted index of the Board of Governors, remained at 203 per cent of the 1935-39 average, unchanged from the April level. Production of durable goods showed no in crease in the month, but the non-durables index rose 1 point. Compared with the pre-war level, total industrial production in May was up 22 per cent with durables output rising 44 per cent and non-durables gaining but 4 per cent. In this district production in May dipped slightly from the high level of April due in great part to the floods that were general over the region in the last half of the month. Several major war plants were T forced to close for a few days late in May because the high waters in some cases kept workers from reaching the plants, and in others prevented the delivery of material. However, war plants continue to expand their working forces, and output of war goods in the district in June should register an increase over May. Steel production in the district in May declined somewhat due to furnaces going down for necessary repairs. Output of lumber at district mills, while remaining below production in the corresponding period of 1942, was up slightly from April levels. Consumption of industrial electricity in major cities of the district showed no change from April but was up 24 per cent from a year earlier. Slight declines in St, Louis and Louisville were offset by rather pronounced rises in Memphis and Evansville. Coal output at Eighth District mines dropped 10 per cent due largely to labor difficulties, and was 1 per cent below May, 1942, production. Primary distribution in the district registered a decline in May as compared with April, but was in greater volume than in May, 1942. The decrease from a month ago is attributable primarily to in terrupted and delayed schedules because of the floods of May. Carloadings* of all railroads operating in the Eighth District in May were 1 per cent below April and were unchanged from May, 1942. Tonmiles moved, however, were probably well above last year’s level. Load interchanges at St. Louis declined 3 per cent and 5 per cent, respectively, from April, 1943, and May, 1942. At Louisville, the de crease from a year ago was 7 per cent, but inter changes rose 4 per cent from April volume. D E T A IL E D SU R V E Y OF D ISTR IC T M A N U F A C T U R IN G Steel— Production of steel ingots and castings in the St. Louis area during May w'as somewhat less than in previous months of this year, due to several furnaces going down for badly needed repairs. Un der the impact of war demand for steel, most fur naces have been worked far beyond what is regarded as normal and consequently interruptions for repairs are irregular since the open hearths are driven until repairs are absolutely necessary. In early June, the rate of operations rebounded to the high of 101.2, registered earlier this year. St. Louis mills suffered no particular discomfort from the brief coal strike in early June. Inventories of coke and coal were maintained at about their usual level. Page 2 Scrap movement in the St. Louis area continued in adequate volume during May and early June and mill and foundry inventories generally are being maintained at some fifteen days supply. Current scrap campaigns have succeeded in bringing out higher quality metal. Production of pig iron at St. Louis is in good volume and receipts of iron from outside are adequate. Production of steel ingots in the United States during May was 7,545,379 tons, some 175,000 tons greater than both a month and a year earlier. The tonnage output in May was the third highest on record. Steel plate production in the nation in May was some 7,000 tons less than in April but was 100,000 tons greater than a year earlier. Almost half of the production of 1,115,000 tons of plates in May was produced on continuous strip mills which have been converted to rolling plates. particularly in such lines as house furnishings. At furniture stores in the district, stocks were 14 per cent less than they were a year earlier. Whiskey— On May 31, 54 Kentucky distilleries were in operation producing alcohol for the war program. A month earlier all 60 distilleries had been in production. As previously mentioned in this review, trade sources generally believe that no whiskey production will be authorized at distilleries in the very near future. Most distilleries prefer to produce alcohol rather than whiskey for as long a period as alcohol production is needed for the prose cution of the war. It is felt that the shortage of grain available for alcohol production might be in tensified if whiskey production were authorized. Sales of all district wholesalers and jobbers whose statistics are available to this bank declined 8 per cent in dollar volume between April and M a y , but in the latter month were 2 per cent greater than in May, 1942. W holesalers’ stocks dropped 2 per cent in the month and were 31 per cent less than a year earlier. Most of the agitation for the resumption of whiskey production seems to come from retailers and dispensers who are faced with a shortage of whiskey for sale. However, despite complaints of such shortage, current stocks of whiskey in ware houses should last from two and one-half to four years at the present rate of withdrawal. R E T A IL A N D W H O L E S A L E T R A D E Sales of reporting department stores in the Eighth District during May declined 7 per cent from April levels but were 19 per cent above May, 1942. The decrease from a month ago was largely seasonal, as April volume was inflated due to the lateness of the Easter shopping season this year. Also, May was a shorter shopping month. As compared with a year ago, department store sales in Evansville, Little Rock and Memphis lead all other cities in the district in percentage increase. The major factors accounting for the sizable in creases in sales from May, 1942, are higher prices and increased consumer purchasing power. The latter is focusing sharply upon department and ap parel store merchandise, partly because of fears of rationing of apparel items in addition to shoes. Sales of wom en’s wear and men’s clothing in May were approxim ately 25 per cent ahead of last year at department stores, and at w om en’s apparel stores the increase was about the same. Sales of house furnishings were up appreciably compared with May, 1942, at department stores. A t furniture stores in the district sales increased 5 per cent and 21 per cent, respectively, from a month and a year ago. Department store stocks at the close of May were at virtually the same level as in April, but were one-quarter less in dollar volume than a year ago. The decline in stocks is attributable largely to difficulties encountered in securing merchandise, A G R IC U L T U R E General Conditions— During May heavy rainfall throughout most of the month culminated in exten sive floods throughout the Eighth District and seri ously curtailed district crop prospects, in June a recurrence of the floods again put many acres of farm land under water, primarily in the northern sections of the district. W hile no particular addi tional damage has been reported because of the June high waters, nevertheless, the continued inundation of crop lands has further delayed spring planting, probably to a point where agricultural production in the region will be considerably less than in 1942. Flood losses in the Eighth District will probably run close to $90 million. Some 4 million acres of land were covered by water, with approximately half of this in crop lands. In addition to damage done directly by inundation, the very severe rains badly washed higher ground and seriously hurt early fruit and vegetable crops. Some sections in the district report complete crop failures this year with insufficient time left for planting or replanting. In general, however, most farmers seem to be will ing to try for a crop if the water leaves the ground soon enough for it to be reworked. Probably there will be a shift in planting intentions as considerable cotton land is expected to be planted to feed crops rather than cotton. It is reported that every effort will be made by the W ar Food Administration, government credit agencies, banks, and the Red Cross to help the agri cultural population of the district make its crop year as successful as possible. It seems likely that there will be sufficient farm labor to work the fields, as with a few isolated exceptions, most sections report an adequate supply of such workers. The normal agricultural labor force is being supplemented by boy and girl workers, and in at least one region by soldiers. The W ar Food Administration has assured farmers of a plentiful supply of seed, and the W ar Production Board recently released a number of items necessary for farm production, notably small hand tools and equipment. In addition, W . P. B. Page 3 lias allocated 300,000 tons of carbon steel with other materials in proportion to the farm machinery pro gram for the quarter beginning July 1. W ith the outlook for crop production depressed this year, 1943 cash farm income in the Eighth D is trict may not be greatly expanded over last year’s level despite higher farm prices. In Eighth District states cash farm income for the first four months of 1943 totaled about $1 billion or approximately 32 per cent more than in 1942. Agricultural prices in M ay were up 1 per cent in the nation as a whole and were 23 per cent above a year earlier. In Eighth District states the average price increase between April and May was slightly less than for the entire United States. Cotton— No official report on cotton acreage has yet been issued, but with much cotton land in M is souri and Arkansas and some in Tennessee badly flooded in May, it seems likely that the 1943 crop in this district will be short. There was still time for planting cotton after the floods but water was slow to leave the land, and in many sections the soil was badly gullied. Reports indicate that a considerable portion of Missouri and Arkansas cotton land will be planted to other crops. Some northwestern Ten nessee cotton territory was badly flooded, and indi cations are that the total crop in these counties was ruined. Despite losses, Arkansas reports that its present grow in g crop is in good condition and is very clean. H ow ever, the damp weather generally resulted in a rather high rate of boll weevil survival which is an additional source of danger to the new district crop. Hot, dry weather throughout June and July would do much to relieve this threatened damage. A ctivity in the Memphis spot market throughout late May and early June was light. Virtually no interest was shown in low grades with mill inquiries being in slight volume. Prices continued strong. Between May 16 and June 15, the price of 15/16 middling grade at Memphis ranged from 20.60c per pound to 21.05c per pound, closing on the latter date at 21.05c per pound. A year ago the range was from 18.30c per pound to 20.20c per pound. Dom estic mill activity in May was slightly lower than in April. Consumption of cotton in the United States for the ten-month period from August, 1942, through May, 1943, was 9,350,000 bales as compared with 9,208,000 bales in the corresponding period a year earlier. Annual consumption for this season should be only slightly higher than the 11,170,000 bales used in the 1941-42 season. It is estimated that the August 1 carry-over will be some 10,500,000 Page 4 bales, with supplies of higher grade cottons rela tively low. Through June 5, Commodity Credit Corporation loans in Eighth District states had been made on 555,000 bales of 1942 cotton. Repayments through the same date had redeemed 126,000 bales. The per centage of repayments to total loans for Eighth D is trict states was slightly larger than that for the nation as a whole. Fruits and Vegetables— The heavy floods of May caused considerable damage to fruit and vegetable crops in the Eighth District. However, due to the fact that acreages of most important vegetable crops in the region were considerably greater than a year ago, production should not be much below 1942. Acreage planted to snap beans in three Eighth D is trict states in 1943 was 25 per cent greater than in 1942, and production is estimated at 482,000 bushels as compared with 371,000 a year earlier. Picking of snap beans became more general in the southern part of the district in late May. Reports from Mis sissippi and Tennessee indicate that insects are causing some losses, and in Arkansas and Illinois considerable snap bean acreage was flooded out. The white potato crop in the district is expected to be greater than in 1942, although considerable acre age planted in potatoes in the Arkansas River V a l ley was ruined by the May floods. Tennessee pota toes are reported late. Tom ato production may be short this year as acreage in Eighth District states was not much greater than in 1942 and much of this land was inundated by the flood waters. At the first of June most tomato fields were still too wet to work and transplanting of the crop was quite late. The district fruit crop is considerably worse than in 1942. Severe freezes earlier in the year, plus the abnormally heavy rainfall in May and early June, cut estimated production considerably. The straw berry crop suffered heavy losses of water-soaked ripe berries in Arkansas and Missouri and much of the southern Indiana crop was washed out. W ith acreage considerably curtailed as compared with a year earlier, the district strawberry output is much less than in 1942. A ccording to the Department of Agriculture, the peach crop in the district will be very short, about two-thirds as large as in 1942. Indiana and Kentucky are the only district states that expect increased output. Production of pears is expected to be about one-half of last year’s harvest. Grains— Small grains and corn throughout the district suffered serious damage from the heavy rains and intensive floods of the past month. In most sections expected y i e l d s were cut sharply and production is likely to be below 1942. Reports in dicate that considerable acreage that had been, or was intended to be, planted to small grains will now be planted to corn and soy beans if the land can be worked at all. Also, some southern cotton land is expected to be planted to feed crops. The rice crop in Arkansas has all been planted and farmers are beginning to irrigate. Reports in dicate a very even stand of rice and the general outlook for the crop is good. On June 9 the 1943 crop wheat loan program was announced. The loan rate will average $1.22 per bushel. A t St. Louis the basic rate on No. 2 red Avinter wheat is $1.41 per bushel. Livestock— Receipts of cattle and calves at Na tional Stock Yards in May were 24 per cent less than a year earlier. H og receipts, however, were up 7 per cent as compared with a year ago. The increased marketings of hogs resulted largely from the high waters of May which forced farmers to send animals to market since many lots were flooded and con siderable feed was destroyed. Although cattle marketings wTere well below the previous year’s level, cattle receipts may increase in the next two or three months as reports from various sections of the district indicate that farmers fear a feed shortage and that many animals which normally would have been fed to heavier weights will be sent to market. Slaughter of all classes of livestock under federal inspection at St. Louis in M ay was 9 per cent less than in May, 1942. Reasons given for the decline in such slaughter are the withholding of sows and gelts for breeding, higher death losses, larger farm and local slaughter, and wholesale slaughter at plants not under federal inspection. Undoubtedly, a considerable volume of meat is finding its way into the black market. W ith average yields this year on intended acre ages, the 1943-44 supply of feed grains, including feed wheat and rye, for the nation will be about 10 per cent smaller than the 1942-43 supply, accord ing to the U. S. Department of Agriculture. D e mand will be stronger as livestock numbers are increasing and returns to producers, despite in creased prices of feedstuffs, are still favorable. The Department of Agriculture expects increased use of supplementary forages and winter pasture, feed ing to lighter weights, and a minimum carry-over of feed grains at the close of the 1943-44 season. Tobacco— In the burley tobacco grow in g region very irregular conditions were reported at midJune with some localities having com pleted trans planting of the new crop while others had just started. On the average, work was some two wrecks later than usual with approximately half the entire crop set out by June 10. There has been some complaint of mold and rust brought about by excessive rainfall in the seed beds. About 50 per cent of transplanting in the darkfired district has been completed. In general, con ditions are reported as better in the western region than in the eastern region. Excessive rainfall re tarded work and prevented early cultivation of that part of the crop already set out, and vegetation has already spread rapidly in the fields. The stand of the crop is reported to be very good. In the Green River section approximately threefourths of the crop had been transplanted by June 10. This type of tobacco appeared to have obtained a good start with plants reported as plentiful in number. However, reports from the area indicate that 1943 acreage will not be as great as 1942. Burley market activity has been light since very small stocks of the 1942 crop are available for resale. Despite limited stocks of dark-fired tobacco, there has been a fair volume of trading with demand con centrated in better leaf grades. C O ST O F L IV IN G Despite all efforts to halt the general inflationary trend in the United States, cost of living continues to advance. The tremendous pressure of increased purchasing power, plus determined efforts of various blocs and groups to puncture the ceilings, has made it virtually impossible to hold prices stable. O ver all governmental policy has been, however, rela tively successful, as there seems to be little doubt that prices would have risen considerably further and faster had controls not been invoked and sup plemented by the general program of bond sales and heavier taxes. As of May, 1943, cost of living in large cities in the United States was up 24.4 per cent as compared with September, 1939. Since Jan uary, 1941, living costs in the United States have advanced 24.2 per cent. In the first five months of this year the cost of living index rose 3.9 per cent which represents a rate of almost 9 per cent per year. Most of the increase in living costs is directly attributable to increased food costs. Food prices in the United States at m id-M ay had risen 45.3 per cent from the September, 1939, level and were up 7.8 per cent as compared with December, 1942. The rise in the past month was 1.7 per cent. If the rollback program on meats and some other products which went into effect late in June is maintained, it PagcS seems likely that food costs in July will be slightly under the May 15 level. In St. Louis, the only district city covered by the Bureau of Labor Statistics monthly index, cost of living on May 15 was up 0.7 per cent as compared with a month earlier and was 3.6 per cent over the December, 1942, level. Food cost in St. Louis rose 1.6 per cent in the month and was up 7.7 per cent as compared w'ith December, 1942. In other Eighth District cities, food cost increases ranged from 0.3 per cent in Memphis to 2.2 per cent in Louisville in the past month. As compared with December, 1942, the rise of 10.5 per cent in Louisville represented the greatest increase. B A N K IN G A N D F IN A N C E Credit demand throughout the Eighth Federal Reserve District continues to i decline. Reports from bankers in virtually every section indicate that most types of loans are decreasing rather rapidly in volume. Declining inventories, increased collection volume, and the strong cash position of the farmer are given as the three major reasons for the de crease. There is some expectation that the extension of bank agricultural credit may be increased some what in com ing months as many farmers may be forced to borrow because of losses suffered in the recent floods. At twenty-four reporting member banks in this district, loans declined $5.5 million between May 12 and June 16, a decrease of 2 per cent. Invest ments fell off some $15 million primarily because St. Louis bank holdings of Treasury bills which matured June 2 were not fully replaced after being used over the June 1 tax date in Missouri. Treasury bill holdings dropped about $21 million in the five weeks. On June 1 demand deposits at the reporting banks dropped to a temporary low since the begin ning of the year due primarily to withdrawals for investment in bills to escape tax assessment in Mis souri. Deposits subsequently rebounded to above their former level as funds flowed back into Mis souri banks after the bills matured. W ar Loan accounts, built up during the April financing to un precedented levels in this district, have been drop ping steadily in the past five weeks as a result of withdrawals by the Government. H owever, the re turn flow of deposits, engendered by tremendous Government expenditures, causes the level of gross deposits to exhibit a steady upward movement. Member bank required reserves increased over the period from May 12 to June 16 because of the shift of funds from W ar Loan accounts to other types of deposits which require reserves. Page 6 C A S H F A R M IN C O M E Cumulati ve for 4 months Ap ril 1942 1941 1943 1942 1943 ( In thousands of dollars) $15,148 87,354 54,772 , 15,903 11,706 44.710 ___ 17,531 $15,637 69.871 40,893 11,509 8,033 33,887 11,524 $ 67,387 341,065 191,145 116,133 52,115 170,485 82,844 $ 54,304 271,80.4 145,664 75,024 37,678 128,484 59,997 $ 29,745 175,561 94,738 53,822 22.735 82.000 40,0.64 . . . . 247,124 191,404 1,021,174 772,955 498,665 R E C E IP T S A N D S H IP M E N T S A T N A T I O N A L S T O C K Y A R D S Receipts Shipments M ay, 1943 Apr., 1943 M ay, 1942 84,286 91,353 105,069 Cattle and C alves. . . H ogs ............................ . .293,250 259,0,02 268,013 Horses and Mules .. . . 2,042 3,680 789 . . 46,263 29,091 55,629 May, 1943 A pr., 1943 M ay, 1942 48,951 64,331 2,014 13,212 49,471 89,850 3,677 3,573 44,930 48,505 771 21,607 128,508 146,571 115,813 , 425,841 383,126 429,500 W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S Bureau of L abor Statistics May, A pr., May, M ay/43 com p, with (1 9 2 6 = 1 0 0 ) 1943 1943 1942 A p r./4 3 M a y,’ 42 A ll C om m odities. . 104.1 Farm Products. 125.7 P o o d s .................. 110.5 O th e r .................. 96./ 98.8 104.4 98.9 95.7 + 0.4% + 1.5 + 1.9 + 0.1 + 5.4% +20.. 4 +11.7 + 1.0 C O ST O F L IV IN G May 15, Apr. 15, Sept. 15, M ay 15,’43 com p, with 1943 1943 1939 A pr, 15/43 Sept. 15,'39 Bureau of Labor Statistics (1935-39 = 100) 125.1 124.1 United States......... St, Louis Bureau c*f Labor Statistics (1935-39 = 100) 103.7 123.9 108.4 96.6 M av 11, 1943 124.1 123.2 + 0 .8 % 100.6 100.4 + COST OF FO O D A pr. 20, M ay 12, 1943 1942 U. S. (51 cities) . . 143.0 St. L o u is ............. ...144.7 Little R o c k .. . . . 141.8 L ou isv ille........... ...141.5 M em phis............. ...150.1 140.6 142.4 140.8 138.4 149.6 + 24.4% 23.6 0.7 May 11/43 com p, with A pr. 2 0/4 3 M ay 12/42 121.6 123.8 123.2 122.6 123.5 + + + + + 1.7% 1.6 0.7 2.2 0.3 + 1 7 .6 % + 1 6 .9 + 1 5 .1 + 1 5 .4 + 2 1 .5 IN D E X E S O F E M P L O Y M E N T IN M A N U F A C T U R IN G I N D U S T R I E S B Y M E T R O P O L IT A N A R E A S is ureau of Labor Statistics Apr., Mar., A pr., A p r./4 3 com p, with (1 9 3 7 = 1 0 0 ) 1943 1943 1942 M a r./4 3 A p r./4 2 Evansville . . . Louisville. .. . Memphis . . . . St. Louis . . . 242.5 127.6 150.4 151.9 238.2 126.4 150.9 147.8 + 1*89 81.8 102.6 115.5 128.7 + — + 2.8 B U I L D I N G P E R M IT S New Construction (C ost in thousands) Number 1943 1942 E va n sville .. . Little R o c k .. Louisville . . . Memphis St. Louis 38 29 81 112 67 34 31 81 110 157 May T o t a ls .. April “ 327 432 413 641 Cost 1943 1942 $ 129 4 290 169 151 $ 743 993 V A L U E C O N S T R U C T IO N (I n thousands of dollars) M a y /4 3 A p ril/4 3 Repairs, etc. N um ber 1943 1942 Evansville . Little R ock L ouisville. . Memphis . . , Pine Bluff . St. Louis . ., Cost 1943 1942 91 34 183 33 609 535 151 38 287 149 120 142 52 228 221 $ 64 23 12 77 104 $159 22 17 103 S3 950 1,518 1,160 632 763 848 280 214 184 458 CONTRACTS LET M a y /4 3 com p, with M a y /4 2 A p ril/4 3 M a y /4 2 Total 8th Dist. $ 12,862 $ 36,411* $ 44,994 S ou rce: F . W . D od ge Corporation. “.Revised. (K .W .H . in thous.) + 196.5% + 24.4 + 30,2 + 18.0 .9 .3 — 6S<; 71% C O N S U M P T IO N O F E L E C T R I C I T Y N o. o f M ay, A pr., M ay, M ay, 1943 Custom- 1943 1943 1942 com pared with ers* K .W .H . K .W .H . K .W .H . A p r., 1943 M ay, 1942 . 40 35 , 82 31 20 134 10,281 2,122 15,549 6,381 6,477 85,977 9,626 2,119 15,678 5,834 7,110 86,989 3,484 2,523 15,642 4,931 742 74,698** + T o t a ls .. . , 342 126,787 127,356 102,020** •Selected industrial customers.- -**R evised. 7% + 195% — 16 — 1 + 29 + 773 + 15 - 0* —1 + 9 — 9 —1 - 0- + 24 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 O U IS \r M ay, 43 A p r./4 3 ™ . M a y /4 2 First nine days J une/43 J une/42 141,279 145,251 148,503 42,233 43,748 S ou rce: Terminal Railroad Association o f St. Louis. 5 m os./4 3 5 m os./4 2 705,227 649,629 W H O L E S A L IN G Lines of Commodities Net Sales S tocks Data furnished by Bureau of Census. U . S. Dept, of Commerce. May, 1943 compared with A p r./4 3 M a y,’ 42 A utom otive S upplies............................... D rugs and C hem icals............................ D ry G o o d s ................................................ Electrical Supplies ............................... F urn itu re..................................................... G r o c e r ie s .................................................... I-lardware............................................ * Plum bing Supplies................................... T obacco and its P rod u cts.................... Miscellaneous . . . . . . . . . . . .................... Total all lin e s * ................. . ............... ^Includes certain lines not listed above. + 10% — 7 — 7 - 0— 9 __ 2 — 14 + 2 — 4 — 18 — 8 + + + — — + — — + — + D E PA R TM E N T STORES 5 m os.’ 43 to same period ’42 27 % 16 is 30 41 22 16 31 11 1 2 - —28 •—20 — 27 — 46 — 31 Stocks on Hand Stock Turnover M ay 31,’43 com p, with M ay 31/42 Jan. 1, to Maji 31, 1943 1942 Net Sales May, 1943 compared with A p r.,'43 M a y/4 2 M ay 31, 1943 com p, with M ay 31, 1942 1.38 1.68 5% +29% Ft. Smith, Ark. — 16% + 10 % 1.44 1.93 + 12 + 40 + 35 Little R ock, “ + 3 2.39P 2.03P 12 P + 13P Q uincy, 111. . . . — 9P + 2 3 P + 47 + 4 3 Evansville, Ind. — 30 2.29 1.56 + 16 +20 Louisville, K y ., —12 — 32 1.77 1.41 +11 + 4 St. Louis, M o.. —11 — 34 1.72 1.06 Springfield, M o. + 33 +30 — 20 1.97 1.25 + 34 - 0 Memphis, Term. + 11 — 5 1.90 1.44 10 *A ll other cities — 5 + 14P — 26P 1.88P 1.41P + 19P 8th F. R. Dist. *E1 D orado, Fayetteville, Pine Bluff, A r k ; A lton. East St. Louis, H arrisburg, Mt. V ernon, 111.; Vincennes, I n d .; Danville, Hopkinsville, M ayfield, Paducah, Ky. ; Chillicothe. M o. ; Jackson, Tenn. T rading d a ys: M ay, 1943— 2 5; April, 1943— 26; M ay, 1942— 25. Outstanding orders of reporting stores at the end of M ay, 1943, were 229 per cent greater than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding M ay 1, 1943, collected during M ay, by cities : + Instalment E xcl. Instal. Accounts A ccounts Instalment E xcl. Instal. A ccounts A ccounts Fort S m ith. . . % Little R ock . . 22 Louisville. . . 32 Mem phis . . . . 38 74% 68 68 P St. Louis . . . 35% Other cities . 30 8th F. R. Dist. 32 6 4% 62 63 60 IN D E X E S O F D E P A R T M E N T STO R E SA LE S A N D STO C K S 8th Federal Reserve District (1923-1925 average = 100) M ay, April* March, M ay. 1942 1943 1943 1943 S P E C IA L T Y STO R E S Stocks on Hand S tock Turnover M ay 31/43 com p, with M ay 31/42 Jan. 1, to May 31, 1943 1942 Net Sales M ay, 1943 compared with A p r./4 3 M a y /4 2 5 m os.’43 to same period *42 108 108 131 130 124 138 94 92 136 129 92 90 Sales (daily average), U n a d ju ste d ,................. 129 Sales (daily average), Seasonally adjusted . 129 Stocks, Unadjusted . ............................................ 95 Stocks, Seasonally adjusted .. ........ 94 1.32 M en’s Furnishings — 18% + 9% + 2% ■ 06% 1.40 3.12 Boots and S hoes. . -—27 — 25 — 3 25 3.71 Percentage o f accounts and notes receivable outstanding M ay 1, 1943 collected during M ay ; M en’s F urnishings....................50% Boots and S hoes................................54 n P — Prelim inary figures. C H A N G E S IN P R I N C I P A L A S S E T S A N D L I A 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 I S Change from May 12, June 17, June 16, 1942 1943 1943 ( I n thousands of dollars) — 8 Industrial advances under Sec. 13b......... $ 295 50 ~ 100 + Other advances and rediscounts................ 21,844 + 269,082 389,607 U . S. securities................................................ 389,707 — 21,794 + 26 8 ,7 7 9 Total earning a s s e t s ............................... ..... Total reserves................. * .............................. . 625,814 449,490 T otal d ep osits.................................................. 573,522 F. R. N otes in circulation.......................... Industrial commitments under Sec. l ob. 1,819 + 9,481 30,537 16,464 — 45 + — 35,554 + 29,965 + 212,416 — 209 F E D E R A L R E S E R V E O P E R A T I O N S D U R I N G M A Y , 1943 Am ounts (In cl. Louisville, Memphis, Little R ock branches) Pieces 5,992,651 $2,282,499,776 C hecks (cash item s) handled . . . . . . . . 55,740,040 124,433 Collections (non-cash items) handled. . . . . . . . 1,784,377,369 5,214 Transfers of fu n d s...................... .............................. 58.778.000 14,021.032 Currency received and cou n ted ........................... 1,209,367 Coin received and cou n ted ..................................... 13,632,108 34.705.000 20 Rediscounts, advances and commitments . . . . . N ew issues, redemptions, and exchanges of 678,483,043 938,170 securities as fiscal agent o f U. S. Govt., etc. 10,850 Coupons clipped from securities in cu stod y. . . RATES OF T H IS B A N K F O R A C C O M M O D A T IO N S U N D E R T H E F E D E R A L R E SE R V E ACT Advances to member banks, secured by direct obliga tions of the United States or by such Government guaranteed obligations as are eligible for collateral, which have one year or less to run to call date or to maturity if no call date, under paragraphs 8 and 13 of section 13.......................................................................... l/i % per annum Advances to member banks, secured by direct obliga tions of the United States or by such Government guaranteed obligations as are eligible for collateral, which have more than one year to run to call date or to maturity if no call date, under paragraphs 8 and 13 of section 13................................................................. 1 % per annum Advances to nonmember banks, secured by direct o b ligations of the United States, under paragraph 13 of section 13........................................... ............................ .1 7o per annum Rediscounts and other advances to member banks un i per annum der sections 13 and 13a........................................................... 1 Advances to member banks under section 1 0 ( b ) ............... 1 lA % per annum Advances to individuals, partnerships, and corporations other than banks, secured by direct obligations of the United States, under paragraph 13 of section 1 3 . . . 2 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 1 3b : f 1 % to (a ) On portion for which such institution is obligated \ 1 Vi c, * per annum (b ) On remaining p ortion— N o charge to financ^ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial ( 2 T A % to businesses under section 13b................................... * tf 7e> per annum Commitments to established industrial or commercial businesses under section 13b............................................ .1 0 % to 25% of the loan rate charged borrow er with a minimum rate o f Vi % per annum. Commitments to member banks, nonmember banks, and other financing institutions, under section 13b............... 10% to 25% o f the loan rate charged borrow er with minimum rate of J4 % per annum provided : that no commitment will be given on loan on which borrower is charged over 5% per annum. P R I N C I P A L R E S O U R C E A N D L I A B I L I T Y IT E M S O F R E P O R T IN G M E M B E R B A N K S Change from Tune 16, May 12. June 17, (I n thousands o f dollars) 1943 1943 1942 Total loans and Investm ents. . . . .........$1 ,421,804 , 20.719 + 457.224 Commercial, industrial, agricultural loans* 205.490 3,670 49,882 Loans to brokers and dealers in securities 3.989 426 + 277 Other loans to purchase and carry securities 8.678 662 1,266 Real estate lo a n s ,.......................................... 66,215 220 + 6.704 + Loans to banks.............................................. 325 5 + 204 Other loans................................. . . . 59,042 975 12,846 343,739 5,518 56.809 Treasury b ills. . .......................................... 148,820 20,863 + 104,466 Certificates of indebtedness...................... 2,641 217,746 + :188,630 Treasury notes............................................ 109,591 290 49.127 447,350 10,449 + 170,965 O bligations guaranteed by S. G ovt.. 33,988 1,389 1.480 Other securities.............................................. 120,570 467 635 Total investments....................................... 1.078,065 15,201 + 514,033 Balances with domestic ban ks.................. 119.681 9.070 92,007 Demand deposits'— ad justed **.................. 24,492 + 179.930 849.451 201,131 2,328 16,994 U. S. Government deposits........................ 159.351 61,452 146.934 Interbank deposits ........................................ 2,691 518,444 9,509 *Tnc1udes open market paper. **Other than interbank and Government deposits, less cash items on hand or in process of collection. A bove figures are for 24 member banks in St. Louis, Louisville, M em phis, Little Rock and Evansville. Their resources comprise approximately 75% of the resources of all member banks in this district. _ _ _ — — .— — — + — ,_ — + + + U. (I n thousands of dollars) $ St. Louis, . . Sedalia, Springfield, Jackson. .. M em phis,. . T o ta ls . . . ...........2,031,678 2,066,419 Quincy, . . . . E vansville.. . L ouisville,. . . Owensboro. . Paducah........ Greenville, . _ + + ,— .— +l_ _ + 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 M ay, A pr., May, M a y /4 3 comp, with 1943 1943 1942 A p r./4 3 M a y/4 2 11.709 18,218 3,358 65,140 “ 15,7S4 .-Tex. 14,006 10,961 ...111. 70,718 Y. “ 14,225 82,356 . . Ind. . . Ky . 294,555 11,881 “ 7,310 .M iss. 7,367 3,942 ,. . Mo. 3,655 “ 19,125 “ “ 1.118,965 “ 5,310 “ 28,696 7,648 .Tenn. 216,749 El D o r a d o ,. . Fort Sm ith,. . Helena, . . . . Little Rock. . Pine Bluff, . . _ . Ark.$ “ 12.386 21,757 4.233 78.458 16.578 19,235 12,463 75,994 15,146 84,437 330,488 13,738 8.487 8,511 5,022 4,771 24,469 1,040,413 5,892 26,960 8,820 248,161 $ 7.325 — 5% 16,711 — 16 2,919 — 21 71.278 — 17 18,880 — 5 23,476 — 27 11,067 — 12 ; 70,3 51 12.506 — 6 — 2 46,181. 247,562 — 11 9,622 — 14 7.818 — 14 5,555 — 13 3,946 __, 22 3,651 — 23 20,766 __22 1,030., 126 + ~8 4,301 — 10 23,553 + 6 6,566 — 13 191.086 — 13 1,835,246 __ 2 + — -4_ — — + + + + 60% 9 15 9 16 40 1 1 14 78 19 — ~6 + 13 -0*0 — 8 + 9 + 23 + 22 + 16 + 13 + 11 C O M M E R C IA L F A I L U R E S IN E I G H T H F. R. D I S T R I C T M a y /4 3 com p, with A p r./4 3 M a y/4 2 M a y/4 3 A p r./4 3 M a y /4 2 Number . . . . . . . 10 L iabilities........... $ 62,000 S o u rce : Dun and Bradstreet. (Completed June 25, 1943) 8 $ 56,0.00 22 $129,000 + + 25% 11 —45% — 52 Page 7 INDUSTRIAL PRODUCTION N A T IO N A L S U M M A R Y OF CONDITIONS B Y B O A R D O P 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 S TE M Federal Reserve indexes. Groups are expressed in terms of points in the total index. Monthly figures, latest shown are for May. 1938 1939 1940 1941 1942 1943 Bureau of Labor Statistics* indexes. Weekly figures, latest shown are for week ending June 12. MEMBER BANKS IN LEADING CITIES Demand deposits (adjusted) exclude U. S. Government and interbank deposits and collection items. Government secur ities include direct and guaranteed issues. Wednesday fig ures, latest shown are for June 16. YIELDS ON U. S. GOVERNMENT SECURITIES Averages of daily yields on notes and bonds and average discount on bills offered. Bills are tax-exempt prior to March, 1941, taxable thereafter. Weekly figures, latest shown are for week ending June 19. Page 8 Industrial activity and retail trade were maintained in large volume during May and the early part o f June. Retail prices, particularly foods, increased further in May. P roduction—Total volume o f industrial production, as measured by the Board’s seasonally adjusted index, remained in May at the level reached in April. Activity in munitions industries continued to rise, while production o f some industrial materials and foods declined slightly. Aircraft factories established a new record in producing 7,000 planes in May. In most nondurable goods industries there were small increases or little change in activity. Meat production, however, reached a record high level for May reflecting a sharp advance in hog slaughtering. Seasonally adjusted output o f other manufactured foods continued to decline. News print consumption showed little change, and publishers’ stocks declined further to a 50-day supply on May 31. Consumption for the first five months o f 1943 was only 5 per cent below the same period in 1941, where as a reduction o f 10 per cent had been planned. The temporary stoppage o f work in the coal mines at the beginning of May brought production o f bituminous coal and anthracite down some what for the month. Iron ore shipments on the Great Lakes continued to lag in May behind the corresponding month o f 1942. The value o f contracts awarded for construction continued to decline in May, according to reports o f the F. W . Dodge Corporation. Total awards were about 65 per cent smaller than in May a year ago. Distribution—During May the value o f sales at department stores de creased more than seasonally, and the Board’s adjusted index declined 5 per cent. Sales, however, were about 15 per cent above a year ago, and during the first five months o f this year showed an increase o f 13 per cent over last year. In general, the greatest percentage increases in sales have occurred in the Western and Southern sections o f the country where increases in income payments have been sharper than elsewhere. Freight-car loadings advanced seasonally in May but declined sharply in the first week in June, as coal shipments dropped 75 per cent from their previous level, and then recovered in the second week of June as coal production was resumed. C om m odity prices— Prices o f farm products, particularly fruits and vegetables, advanced during May and the early part o f June, while whole sale prices o f most other commodities showed little change. Retail food prices showed further advances from the middle o f April to the middle o f May. On June 10 maximum prices for butter were reduced by 10 per cent and on the 21st o f the month retail prices o f meats were similarly reduced, with Federal subsidy payments being made to processors. Agriculture— Prospects for major crops, according to the Department o f Agriculture, declined during May while output o f livestock products continued in large volume, as compared with earlier years. Indications are that acreage o f crops may not be much below last year but that yields per acre will be reduced from the unusually high level o f last season. Bank Credit— Excess reserves at all member banks declined from 2 billion dollars in early May to 1.5 billion in the latter part o f the month and remained at that general level through the first half o f June. As the Treasury expended funds out of war loan accounts which require no reserves, the volume o f deposits subject to reserve requirements increased and the level o f required reserves rose by 600 million dollars in the four weeks ending June 16, while continued growth o f money in circulation resulted in a drain on bank reserves o f 400 million dollars. These reserve needs were met in part by Treasury expenditures from balances at the Reserve Banks and in part by Federal Reserve purchases o f Treasury bills. Reserve Banks continued to reduce their holdings o f Treasury bonds and notes in response to a market demand for these issues. During the four weeks ending June 16, Treasury bill holdings at mem ber banks in 101 leading cities fluctuated widely, reflecting primarily sales and repurchases on option account by New York City banks in adjusting their reserve positions. Holding o f bonds and notes declined somewhat while certificate holdings increased. Loans to brokers and dealers in securities declined sharply during the period, as repayments were made on funds advanced for purchasing or carrying Government securities during the April W ar Loan Drive. Commercial loans con tinued to decline. Government security prices advanced during May following the close o f the Second W ar Loan Drive, but in the early part o f June there were small declines.
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