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BUSINESS CONDITIONS Monthly Review of Agricultural, Industrial, Trade and Financial Conditions in Eighth Federal Reserve District RELEASED FOR PUBLICATION ON THE AFTERNOON OF JULY 29, 1938 FEDERAL RESERVE BANK OF S T. LOUIS DISTRICT S U M M A R Y ues, the favorable crop outlook, evidences of stabili HE downward trends in Eighth District zation in commodity prices and heavy Government trade and industry which have prevailed in spending. greater or lesser degree since last fall, con Production of bituminous coal at mines in this tinued through June and the first half of July. In a general area showed little change in June from May, number of important classifications the rate of de but was about one-fifth smaller than the June, 1937, cline was somewhat more rapid than during the output. Output of lead and zinc at district mines similar period immediately preceding, but this was in June was about 15 per accounted for in large part cent smaller than in May, by the usual seasonal in , July 1, 1938 comp, with A g ric u ltu r e : Yield 1937 Av.1923-37 and 40 per cent less than fluences. V acations and Estimated yield of 6 crops............... — 6.3% + 0.9% a year ago. Production of the closing down of many June, 1938, comp, with Livestock: May, 1938 June, 1937 lumber declined slightly plants for inventorying, Receipts at National Stock Yards.....-j- 1.6% + 5.8% at district mills in June, repairs, etc., resulted in a Shipments from aforesaid Yards...... +10.5 +16.3 but new orders and ship further reduction in fac Production and Distribution: —23.3 Sales by mfrs. and wholesalers.......... — 4.3 ments were reported heav tory employment and pro Department store sales.......................— 6.3 — 12.0 ier than current output, duction fell to the lowest Car loadings......................................... — 1.1 —21.3 resulting in a further re levels recorded so far this Building and Construction: duction in inventories. year. While the inventory f Number— 5.6 —23.2 Bldg. permits, incl. repairs j Cogt ^157 —41.4 Reflecting shutdowns in position as a whole con Value construc. contracts awarded....— 6.6 — 11.5 cident to the Indepen tinued the steady improve Miscellaneous: dence Day holiday and exment of recent months, n • 1 r -i f Number..........+40.0 +90.9 Commercial failures j LiabiHties....... \ XJ2 ^ 61 4 tre m e ly high te m p e ra purchasing of commodi Consumption of electricity................+ 5.2 — 18.1 tures, steel ingot produc ties by both manufactur Debits to individual accounts............— 0.04 — 16.2 ers and merchants con tion at district mills de R a nKt cs v A ) • July ’ 38 comp, m e m o e r isan . June 13* 15 ,38 July 14with *37 clined sharply. Consump tinued chiefly on a neces Gross deposits..................................... + 2.7% + 4.4% tion of electricity by in sity basis. In virtually all Loans.................................................... — 1.8 — 2.9 Investments.......................................... + 0.02 — 2.0 lines investigated distri dustrial users in the prin cipal cities was 5.2 per bution and production of merchandise in June fell measurably below a year cent greater in June than May, but 18 per cent less than in June, 1937. ago. Relatively the decline was more pronounced in production than distribution. In manufacturing, The favorable prospects for crops in this dis trict which marked earlier months this season, con heaviest curtailment was in the durable goods in dustries, particularly iron and steel, quarry prod tinued through June and early July. In its report ucts, lumber and the general category of building based on conditions as of July 1, the U. S. Depart materials. While results reflected in statistics of ment of Agriculture forecasts ample supplies of both merchants and manufacturers and other business food and feed crops, with per acre yields of most of barometers were disappointing, there was a very the principal productions above their average prior marked improvement in sentiment in the business to the drouth period. Wheat prospects declined community. This attitude was the result of a num slightly from May to June, but the yield will be con ber of causes, among them the rise in security val siderably above the 15-year (1923-1937) average. T Page 1 The acreage planted to cotton this year is smaller than in 1937 and the average, but the condition of the crop is generally good. The tobacco crop has made a favorable start on a substantial reduction from the 10-year average. As reflected in sales of department stores in the principal cities, the volume of retail trade in June was 6.3 per cent and 12.0 per cent smaller, respectively, than a month and a year earlier, and for the first half of 1938 the cumulative total was 7.7 per cent less than for the comparable period last year. Combined sales of all wholesaling and jobbing firms whose statistics are available to this bank were 4.3 per cent smaller than in May and 23.3 per cent less than in June, 1937; for the first six months aggregate sales were 16.6 per cent smaller than dur ing the first half of 1937. The dollar value of build ing permits isued for new construction in the prin cipal cities in June were 28.8 per cent greater than in May, but 41.8 per cent less than in June, 1937; for the first six months cumulative volume was 35.0 per cent smaller than that of the same interval last year. Construction contracts let in the Eighth Dis trict during June were 6.6 per cent smaller than in May and 11.5 per cent less than in June, 1937; for the first six months the cumulative total was 12.8 per cent below that for the first half of 1937. Mercantile and industrial interests report col lections during the past thirty days as being some what less satisfactory than in the similar period immediately preceding and generally measurably below a year ago. Questionnaires addressed to repre sentative interests in the several lines scattered through the district show the following results: Excellent June, 1938.................. 0.8% May, 1938................... 1.0 June, 1937................... 3.7 Good 25.0% 28.2 51.3 Fair 40.2% 42.8 23.5 Poor 34.0% 28.0 11.5 Commercial failures in the Eighth Federal Re serve District in June, according to Dun and Bradstreet, numbered 42, involving liabilities of $402,000, which compares with 30 failures in May with liabili ties of $343,000 and 22 defaults for a total of $249,000 in June, 1937. DETAILED SURVEY O F DISTRICT MANUFACTURING AND W HOLESALING Stocks Net Sales 6 months 1938 June 30, 1938 Lines of June, 1938 comp, with same comp, with Commodities i compared with period 1937 June 30, 1937 1 May ’ 38 June ’37 Boots and Shoes......... j— 6.7% — 30.2% — 13.8% ....... % — 10.1 — 9.8 Drugs and Chemicals..! + 5.5 — 6.8 — 28.7 Dry Goods................... !— 10.2 — 22.7 — 21.0 — 24.0 — 21.0 — 34.7 Electrical Supplies......*— 6.7 — 24.8 — 42.5 Furniture..................... !— 16.4 — 28.7 — 20.1 — 13.9 — 14.4 Groceries...................... ! -j- 2.7 — 18.3 — 17.2 — 21.1 Hardware..................... j— 1.9 | All above lines......... ' — 4.3 — 23.3 — 16.6 1 — 24.2 Automobiles — Combined passenger car, truck and taxicab production in the United States in June totaled 174,667, as against 192,068 in May and 497,298 in June, 1937. Boots and Shoes — In both the sales compari sons shown in the above table, decreases were gen eral, both with reference to the several lines and territories. Since the last week in June there has been a moderate pickup in sales and, according to two important firms, advance buying has shown de cided improvement. There has been about the usual seasonal increase in production since mid-June. Clothing — June sales of the reporting clothiers were 16.7 per cent smaller than in May and only about half as large as in June, 1937. While the move ment of summer apparel during the early season was backward, owing to cool weather, there has been marked betterment since the third week in June. Ordering of heavyweight apparel for winter distri bution is reported in smaller volume than at any similar time since 1932. Page 2 Drugs and Chemicals — Sales of chemicals for the general manufacturing trade continued at a low ebb, volume for the second quarter averaging about the same as for the March quarter. Fertilizer and in secticide sales, also sales of typical summer goods, made a relatively good showing in June, and largely accounted for the increase of 5.5 per cent shown over the May volume. Dry Goods — Purchasing in this classification continues on a hand-to-mouth basis, being affected by price uncertainties and the general business de pression. There was a further substantial decrease in inventories, and sentiment in the trade was more hopeful than in a number of months. Electrical Supplies—The movement of fans and other seasonal merchandise was much below expec tations. Outlet through the building industry con tinued narrow. Moderate improvement was noted in sales of household appliances and radio goods. Furniture — Advance buying for fall and winter distribution is reported negligible. Retail stocks are in the main low, but there is a disposition to await general business improvement before replenishing. Groceries — Increased purchasing by country retailers, mainly seasonal in character, was account able for the increase in sales of the reporting firms from May to June, shown in the above table. There has been a heavy call for sugar and preserving sup plies and equipment, incident to the large vegetable and fruit crops. Carryover of canned goods from last season’s pack is reported the largest in recent years. Hardware — The downward trend in business, which has been in effect since last fall, was some what more marked in June than May. Since July 1 there has been moderate expansion in demand for builders hardware and kindred lines, also certain seasonal items, Iron and Steel Products — Mixed conditions prevailed in the several divisions of the iron and steel industry during the past thirty days, but taken as a whole the situation developed moderate im provement, particularly from the viewpoint of sen timent. The outstanding influence was the drastic reduction in prices and recasting of the industry’s basing point system. Effective July 1, the price of pig iron was reduced $4 per ton and leading produ cers of steel announced reductions of from $3 to $8 per ton on their products. The immediate effect of these changes in the case of steel was to cause hesi tation in purchasing pending clarification of the various competive features involved. Users were disposed to continue the recent policy of covering only immediate requirements until they are able to figure what the lower prices will mean in their pro grams. The reduction in pig iron, however, has been followed by the heaviest buying movement experi enced since the spring of 1937. At mills and foun dries activities have shown about the usual seasonal contraction, a number of plants being completely down or on reduced schedules for inventorying, vacations, repairs, etc. Steel ingot production in this general area, which was at 39.3 per cent of capacity at mid-June,declined to 33.3 per cent in the last week of June and to 18.2 per cent in the week of July 11. Distribution of iron and steel from warehouses in June was about on a parity with May, but about one-fourth smaller than in June, 1937. June con sumption of pig iron by district melters showed lit tle change from the preceding months, while ship ments reflected an increase of 4 per cent. Demand for structural steel developed moderate betterment, mainly because of the placement of an increased volume of public works contracts. Generally throughout the industry the inventory position showed further betterment, both with reference to raw, semi-finished and finished materials. Scarcity of offerings, coupled with a rather extensive dealer short interest, caused prices of scrap iron and steel to advance sharply, certain important grades recov ering a large part of the decline sustained in the late spring and early summer downward movement. For the country as a whole, production of pig iron, ac cording to the magazine “ Steel,” totaled 1,055,597 tons, the smallest since December, 1934, and com paring with 1,260,937 tons in May and 3,115,302 tons in June, 1937. Steel ingot production in the United States in June amounted to 1,638,277 tons, against 1,806,805 tons in May and 4,184,723 tons in June, 1937. R E TA IL TRADE Department Stores — The trend of retail trade in the Eighth District, as reflected in statistics of department stores in the principal cities which re port to this bank, is shown in the following compar ative statement: Stocks Net S a l e s ____________on Hand June, 1938 6 mos. 1938 June 30/38 compared with to same comp, with May, 1938 June, 1937 period *37 June 30/37 Ft. Smith, Ark.......... — 19.2% + 4.8% + 1.4% — 13.3% — 3.8 — 7.1 — 15.8 Little Rock, Ark....... — 13.2 Louisville, K v ........... — 4.0 — 22.1 — 12.8 — 8.6 Memphis, Tenn........ — 22.0 — 14.3 — 6.3 — 9.7 Pine Bluff, Ark......... — 21.1 — 5.4 — 17.9 — 0.5 Quincy, 111................. — 2.4 — 11.4 — 7.5 — 6.3 St. Louis, M o............ — 0.9 — 11.0 — 7.4 — 12.2 Springfield, M o......... — 10.3 — 7.3 — 3.1 — 17.9 All Other Cities........ — 1.9 — 7.4 — 7.5 — 17.5 — 12.0 — 7.7 — 11.8 8th F. R. District..... — 6.3 Stock Turnover Jan. 1, to June 30, 1938 1937 1.34 1.18 1.37 1.32 1.87 2.03 1.49 1.55 1.12 1.25 1.50 1.66 1.97 1.95 1.38 1.24 1.39 1.33 1.80 1.80 Percentage of accounts and notes receivable outstanding June 1, 1938, collected during June, by cities: Installment Accounts Fort Smith.. ........ % Little Rock. .....14.4 ..... 11.7 .....25.9 Installment Excl. Instal. Accounts Accounts Quincy.....................% 36.7% 36.0 50.1 40.0 8th F. R. Dist.. 17.0 31.0 Excl. Instal. Accounts 47.4% 54.9 25.9 55.3 48.6 Specialty Stores — June results in men’s fur nishings and boot and shoe lines are shown in the following table: vStocks ___________ Net Sales______________on Hand June, 1938 6 mos. 1938 June 30/38 compared with to same comp, with May, 1938 June, 1937 period ’ 37 June 30/37 Men’s Furnishings.... -f- 4.2% — 22.6% — 16.6% — 15.2% Boots and Shoes....... 4" 0-3 — 1-5 -j- 1.0 — 0.3 Stock Turnover Jan. 1, to June 30, 1938 1937 1.15 1.36 3.59 3.52 Percentage of accounts and notes receivable outstanding June 1, 1938, collected during June: Men’s Furnishings............... 32.4% Boots and Shoes........................47.2% MINING AND OIL Coal — As was the case for the country as a whole, daily average production of bituminous coal in the Eighth District in June declined sharply as compared with the June, 1937, average. Demand from industrial and other consumers continued slow, but inventories were reduced further, and there was about the average seasonal advance in prices. Pro duction of bituminous coal in the United States in June was estimated by the National Bituminous Coal Commission at 22,850,000 tons, against 21,266,000 tons in May and 31,776,000 tons in June, 1937; for the first six months this year output totaled 151,534,000 tons against 222,917,000 tons in the first half of 1937. At mines in this general area June pro Page 3 duction was 0.9 per cent and 20.3 per cent smaller, respectively, than a month and a year earlier, and for the first half of the year the cumulative total was 25.4 per cent below that of the comparable period in 1937. Illinois mines produced 2,112,508 tons in June, which compares with 1,874,332 tons in May and 2,492,189 tons in June, 1937. There were 88 mines in operation in June and 22,654 men on payrolls, as against 81 active mines and 11,020 operatives in May. Petroleum — May output of crude oil in states of the Eighth District was 6.2 per cent less than in April and 79.4 per cent above that of May, 1937. Cumulative total for the first five months this year exceeded that of the like period in 1937 by 87.7 per cent. Stocks on June 1 were 0.1 per cent and 1.1 per cent smaller, respectively, than a month and a year earlier. Detailed production and stock figures by states are given in the following table: _____ Production (In thousands May, Apr., May,Cumulative of barrels) 1938 1938 1937 1938 Arkansas............. 1,277 1,576 837 7,036 Illinois................. 1,440 1,388 416 6,394 78 73 70 360 Indiana................ Kentucky............ 459 432 491 2,165 Totals.............. 3,254 3,469 1,814 15,955 1937 3,981 1,923 328 2,270 8,502 Stocks May, 1938 2,557 11,501 3,048 1,221 18,327 May, 1937 3,190 11,313 3,042 994 18,539 TRA N SPO R TA TIO N Officials of railroads operating in this district report volume of freight traffic handled during the first six months this year the smallest for any like period since 1932. With the exception of grain and grain products, decreases as compared with a year ago were shown in all classifications. The St. Louis Terminal Railway Association, which handles inter changes for 28 connecting lines, interchanged 71,597 loads in June, against 72,388 loads in May and 90,918 loads in June, 1937. During the first nine days of July the interchange amounted to 21,001 loads, which compares with 21,474 loads during the cor responding period in June and 26,322 loads during the first nine days of July, 1937. Passenger traffic of the reporting roads in June decreased 6 per cent in number of passengers carried and 8 per cent in revenue as compared with the same month last year, reflecting chiefly sharply reduced vacation travel. For the entire country, loadings of revenue freight for the first 26 weeks this year, or to July 2, totaled 14,230,302 cars, against 19,040,175 cars for the cor responding period in 1937 and 16,691,671 cars in 1936. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in June was 197,600 tons, against 217,800 tons in May and 155,335 tons in June, 1937; cumulative tonnage for the first half of 1938 was 1,120,484 tons, as against 802,780 tons for the like period last year. Page 4 W H ISK E Y There has been no change during the past thirty days in the depressed conditions which obtained in the whiskey industry in this district during the pre ceding several months. Excessively large invento ries, slack demand and summer curtailment in pro duction have resulted in all but three of the sixty odd distilleries in Kentucky being closed down. There has been a slight advance in the 1935 product, but otherwise prices remain unchanged. A survey of stocks discloses that there are approximately 1,700,000 barrels of whiskey in bonded warehouses which was produced in 1937. This whiskey will not mature until 1941 and until that year distillers do not anticipate any substantial improvement. AGRICULTU RE Combined receipts from the sale of principal farm products and Government payments to farm ers in states including the Eighth District during the period January-May, 1936, 1937, 1938 and dur ing May, 1937, and 1938 are given in the following table: (In thousands of dollars) May 1938 1937 Indiana................... $22,389 $ 22,872 Illinois.................... 41,177 37,838 Missouri................. 19,933 19,987 Kentucky............... 8,686 7,226 Tennessee............... 8,378 7,024 Mississippi............. 5,169 5,832 Arkansas................ 4,914 7,679 Totals.................. 110,646 108,458 Cumulative for 5 months 1938 1937 1936 $102,032 182,381 83,463 76,171 52,225 41,003 36,649 $118,900 194,767 89,387 75,708 53,492 49,094 41,924 $ 98,789 166,614 86,365 42,742 34,940 26,606 22,851 573,924 623,272 478,907 Farming Conditions— Taken as a whole weath er in the Eighth District during the past thirty days was seasonable and auspicious for most agricultural operations. The 1938 crops, according to the U. S. Department of Agriculture, agricultural depart ments of the several states and unofficial sources, have made a remarkably good start, and favorable prospects are general throughout the area. June rains, while excessive in a number of localities, materially helped commercial vegetable crops and gardens, which at mid-July gave promise of large yields. With the exception of wheat and several fruits, and the possible exception of cotton, sor ghums and other late crops not yet estimated, prac tically all important crops show prospects for yields per acre above the generally excellent results se cured last season. With crop losses as light as now estimated, the total acreage of crops finally har vested may equal the 10-year average, despite small er plantings this year. Ample supplies of most food crops are indicated. On July 9 the farm products group of the Bureau of Labor Statistics stood at 69.4 per cent of the 1926 average, a gain of .9 per cent over the preceding week, and comparing with 68.3 per cent on June 11; 90.5 per cent on July 10, 1937; 82.5 on July 11, 1936, and 58.5 per cent on July 8, 1933. There was about the average seasonal increase in the number of laborers on farms from May to June, but as has been the case during recent months, the number employed was reported smaller than a year earlier. Com — In its report based on conditions as of July 1, the U. S. Department of Agriculture esti mates production of corn in the Eighth District at 320,476,000 bushels, which compares with 363,227,000 bushels harvested in 1937 and the 15-year (19231937) average of 329,752,000 bushels. Stocks of corn on farms as of July 1 totaled 282,095,000 bushels, against 65,334,000 bushels a year earlier and the 10-year average of 151,573,000 bushels for that date. Hot weather since July 1 has favored rapid develop ment of the crop, but growth varies sharply owing to the prolonged planting season, damage from water in lowlands and much necessary replanting. Cotton — The U. S. Department of Agriculture in its report as of July 1 estimates the combined area of cotton under cultivation in states including the Eighth District at 6,419,000 acres which is 21.3 per cent less than the 8,158,000 acres on July 1, 1937, and 19.8 per cent smaller than the 10-year (19271936) average of 8,001,000 acres. Applying the 10year (1928-1937) average abandonment to this year’s planted acreage would indicate the smallest acreage for harvest since 1900. The decrease extends to all states of the district and is ascribed to a num ber of causes, among them the Agricultural Adjust ment Program, relatively low prices received for last year’s cotton crop and difficulties in securing stands because of unfavorable weather. Weather conditions have been mixed, but on the whole favor able for growth and development of the crop. Owing to the smaller acreage the crop has been unusually well cultivated, and is mainly free from grass and weeds. According to the National Fertilizer Associa tion, sales of fertilizer tags for the 12-month period July-June was 7 per cent less than a year earlier but 28 per cent greater than two years ago. Mainly in sympathy with the upturn in other commodities, prices of raw cotton have advanced moderately since the end of June. In the St. Louis market the mid dling grade ranged from 7.40c to 8.20c per pound between June 15 and July 15, closing at 7.75c on the latest date, which compares with 7.40c on June 15 and 12.50c on July 15, 1937. As is usual at this sea son, the movement of cotton into and out of store is negligible. Of interest in this connection is an analysis of the stock on hand. In Arkansas ware houses as of June 24 there were 745,529 bales, com pared with 163,554 bales at the same time in 1937. The large increase is explained by the fact that there have been received this year in the 9-cent loan 567,342 bales, and this cotton still remains in stock. To this may reasonably be added about 100,000 bales of Government controlled cotton carried over from previous seasons in loans, which would leave on hand, subject to market, 78,187 bales. Fruits and Vegetables — Considerable diversity exists in prospects for fruits and vegetables. Owing to faulty pollination, insect damage and injury from spring frosts, the apple and peach crops in this dis trict will be much below the relatively large crops of last year. Outlook for vegetable crops, however, is mainly promising, particularly for early varieties. The U, S. Department of Agriculture in its report as of July 1, estimates the apple crop in states en tirely or partly within the Eighth District at 7,815,000 bushels, against 26,669,000 bushels in 1937 and the 10-year (1927-1936) average of 13,257,000 bush els ; peaches, 6,639,000 bushels, against 10,238,000 bushels in 1937 and the 10-year average of 6,552,000 bushels; grapes, 27,110 tons, against 44,930 tons in 1937 and 10-year average of 31,930 tons; sweetpotatoes, 21,760,000 bushels, against 21,029,000 bushels in 1937 and 10-year average of 18,163,000 bushels. In the district proper, the white potato crop is esti mated at 13,784,000 bushels, against 12,716,000 bush els harvested in 1937 and the 15-year (1923-1937) average of 13,506,000 bushels. Prospects for the tomato crop are exceptionally fine. Livestock— Under generally favorable weather, ample water and abundant feed and forage, the con dition of livestock in June and early July maintained the high average which has obtained since last fall. The movement to market has been well sustained, influenced by the upturn in prices and betterment in the demand for dressed meats. The condition of pastures, while somewhat low er than a month earlier, is still high. Hay prospects are exceptionally good, the U. S. Department fore casting the yield of tame hay in the Eighth District at 6,669,000 tons, against 6,162,000 tons in 1937 and the 15-year (1923-1937) average of 6,486,000 tons. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: ___ June, 1938 Cattle and Calves..... 118,450 Hogs............... ........... 177,032 Horsse and Mules.... 2,260 Sheep......................... 139,845 Receipts_______ __________ Shipments________ May, June, June, May, June, 1938 1937 1938 1938 1937 104,385 135,395 75,613 62,074 8~6,738 201,684 134,141 112,575 124,670 80,292 2,572 2,618 1,916 2,430 2,842 122,233 141,554 61,944 39,020 46,854 Totals..................... 437,587 430,874 413,708 252,048 228,194 216,726 Tobacco — Reports from all sections of the dis trict indicate that the tobacco crop has made a fav Page 5 orable start on a slightly reduced acreage from last year, and a substantial reduction from the 10-year average. Based on conditions as of July 1, the U. S. Department of Agriculture estimates production of all types in the Eighth District at 289,797,000 pounds, which compares with 301,156,000 pounds harvested in 1937 and the 15-year (1923-1937) aver age of 287,280,000 pounds. Reports as of mid-July indicate tobacco has made good growth and cultiva tion is generally thorough. As a whole, the crop presents an unusually fine appearance. Winter Wheat — Prospects for winter wheat in states of this district declined slightly from May to June. The U. S. Department of Agriculture’s esti mate as of July 1 was for 67,789,000 bushels as against 78,966,000 bushels harvested in 1937 and the 15-year (1923-1937) average of 52,858,000 bushels. Harvesting has progressed rapidly during the past three weeks, following early delays occasioned by rains. Almost universally threshing returns are showing a crop of high quality, much of the grain testing No. 1 and No. 2. Incident to a heavy move ment of the new wheat to market, prices declined sharply in the early part of July. Reports generally from the principal wheat sections indicate that farm ers will place a considerable part of their stocks in the Government 60-cent loan. Stocks of wheat on farms in states of the district on July 1 totaled 8,686,000 bushels, the largest in recent years, and comparing with 2,911,000 bushels a year earlier and the 10-year average for the date of 4,885,000 bushels. COM M ODITY PRICES Range of prices in the St. Louis market between June 15, 1938 and July 15, 1938, with closing quota tions on the latter date and on July 15, 1937, follow s: C lose High Low Wheat *July ....... ............per bu..$ .80^4$ .71^4 .81VS •72Ys *Sept...................... “ *Dec....................... “ .83 ■73H *No. 2 red winter “ .8 2 / .7oy2 *No. 2 hard “ “ .8 3 / .7034 Corn *July ................... “ .6 0 ^ .57 *Sept...................... “ .62 .58*6 *Dec....................... “ .62 .,57 / *No. 2 mixed ..... “ .5 8 / .55 *No. 2 white ..... “ .59 .57 Oats .2 5 / *July ................... “ .28*4 .25 * Sept...................... “ .2 7 / *D ec............ ........... “ .28 $4 .26 / *No. 2 white ..... “ .30 .28 54 Flour Soft patent....... per bbl. 4.40 3.60 5.40 Spring “ ....... “ 6.15 Middling Cotton...per lb. .,0820 .0745 6.60 Hogs on H oof..... per cwt.10.10 *Nominal quotations. Julv ]i5. 1937 July 15, 1938 $ .7 m .72/8 .73 Vs ■70M .71 $ 1.24 1.24 1.26 1.27 1.26 .59 .60 / .60/8 .58 .58 1.2834 1 .1 3 / .8 0 / 1 .2 7 / 1 .3 0 / .2 7 / ■26% .27 7/s .2 8 / .42 ^ .37^4 .3 9 / .4 8 / 3.60(®3.90 5.40@5.70 .0775 7.25@ 9.90 5,90@ 6.40 7.35@ 8.70 .1250 9.50@ 12.65 PO STAL RECEIPTS Returns from the five largest cities of the dis trict show a decrease of 2.4 per cent in combined postal receipts for the second quarter this year un Page 6 der the corresponding period in 1937, and of 1.1 per cent under the first quarter of 1938. Detailed figures follow : Quarter Ending June 30, 1938 Evansville........... $167,923 Little Rock......... 207,494 Louisville............ 688,331 623,617 Memphis............. St. Louis............. 2,584,483 Totals.............. 4,271,848 Mar. 31, 1938 $160,399 216,832 698,355 661,509 2,585,285 June 30, 1937 $177,118 196,200 739,066 645,187 2,621,121 4,322,380 Comp.2nd Qrs. 1938 and 1937 — 7.2% + 5.8 — 6.9 — 3.3 — 1.4 4,378,692 — 2.4 BUILDING The dollar value of permits issued for new con struction in the five largest cities of the district in June was 28.8 per cent greater than in May and 41.8 per cent less than in June, 1937. According to statis tics compiled by the F. W . Dodge Corporation, construction contracts let in the Eighth Federal Reserve District in June amounted to $16,178,000, which compares with $17,318,000 in May and $18,275,100 in June, 1937. Building figures for June follow : New Construction Permits Cost 1937 1938 1937 1938 20 43 $ 200 $ 364 Little Rock... 15 21 22 78 589 129 235 99 247 1,254 591 Memphis...... 230 St. Louis...... 274 330 690 702 thousands) June Totals.,. 638 May “ . 624 April “ ... 632 770 681 861 1,738 1,349 1,123 2,987 1,861 2,167 ________Repairs, etc. Cost Permits 1938 1937 1938 1937 $' 47 199 $ ""28 93 43 92 114 63 61 57 79 57 107 201 78 157 291 222 108 181 580 666 790 815 962 900 549 334 427 1,403 450 534 CONSUMPTION OF ELECTRICITY Public utilities companies in six large cities of the district report consumption of electric current by selected industrial customers in June as being 5.2 per cent greater than in May and 18.1 per cent less than in June, 1937. Detailed figures follow : (K .W .H . in thous.) No. of June, Custom1938 ers K .W .H . Evansville.... 40 2,620 Little Rock... 35 2,157 Louisville..... 82 8,051 Memphis....... 31 1,841 529 Pine Bluff.... 20 St. Louis...... 202 22,851 Totals....... 410 38,049 May, 1938 K .W .H . 2,185 1,904 7,370 1,912 604 22,206 June, 1937 K .W .H . 3,648 2,341 10,462 2,136 659 27,185 36,181 46,431 June, 1938 compared with May, 1938 June, 1937 + 19.9 % — 28.2% +13.3 — 7.9 + 9.2 — 23.0 — 3.7 — 13.8 — 12.4 — 19.7 + 2.9 — 15.9 + 5.2 — 18.1 LIFE INSURANCE Sales of new, paid-for, ordinary life insurance in states including the Eighth District during June, the preceding month, and a year ago, together with the cumulative totals for the first six months this year and the comparable period in 1937 are shown in the following table : (In thousands June, May, June, Cumulative Totals 1937 1938 __ 1937 of dollars) _ 1938______ 1938 Arkansas.......... $ 3,164 $ 3,358 $ 4,361 $ 19,671 $ 24,071 Illinois.............. 39,181 38,144 49,945 247,821 307,432 Indiana............. 11,775 10,996 15,558 69,576 88,758 Kentucky......... 5,742 5,465 7,159 37,100 37,829 Mississippi....... 3,158 3,432 3,746 18,536 22,178 Missouri... ....... 16,360 15,486 22,716 98,538 120,185 Tennessee........ 7,414 6,938 8,483 41,557 51,503 Totals........... 86,794 United States... 502,588 83,819 490,658 Cumul. change — 18.3% — 19.4 — 21.6 — 1.9 — 16.4 — 18.0 — 19.3 111,968 532,799 651,956 — 18.3 645,995 3,043,893 3,816,351 — 20.2 BANKING AND FINANCE Eighth District banking and finance underwent no changes worthy of note during the past thirty days as compared with earlier months this year. Loanable resources of the commercial banks con tinue in abundant supply at very low rates, and de mand for credit from all the principal borrowing groups is quiet. Reports from member banks indi cate that liquidation of prior loans exceeds the rate of new commitments and renewals with the result that their total loans have receded to the lowest levels since the winter of 1936. Borrowing by mer cantile and manufacturing interests for purchasing and making up inventories of goods for late fall and winter distribution was in measurably smaller vol ume than a year ago. Demands for financing agri cultural operations were also in smaller than aver age volume. Farmers in the principal wheat pro ducing sections are disposed to hold back their stocks for higher prices. Slight improvement in de mand for building loans was reported in some sec tions. Member Banks — Between June 15 and July 13 gross deposits of reporting member banks in the principal cities moved sharply upward, and at $930,307,000 on the latest date recorded a new high for the year and an increase of 4.4 per cent over the total on the corresponding report date in 1937. Reserves also established a new high mark for the year in the course of the four-week period. Total loans declined and on July 13 were 1.8 per cent and 2.9 per cent smaller, respectively, than a month and a year earlier. Investment portfolios showed prac tically no change during the period. Statement of the principal resource and liability items of the reporting member banks follow s: July 13, 1938 June IS, 1938 July 14, 1937 Loans—total...................................................... $276,744 $281,778 $285,135 * Commercial, industrial, and agricultural...... 163,721 Open market paper........................................... 5,403 Loans to brokers and dealers...... ................... 4,890 Other loans to purchase or carry securities... 12,390 Real Estate loans............................................. 47,999 Loans to banks.................................................. 6,467 * Other loans....................................................... 35,874 166,527 6,994 5,098 12,577 47,870 6,757 35,955 164,274 10,797 6,212 12,640 45,411 8,184 37,617 U. S. Gov’t obligations................................... . 199,148 62,727 Obligations guaranteed by U. S. Gov’t........ Other securities............................................... 97,535 204,401 60,294 94,650 212,695 50,882 103,061 (In thousands of dollars) Investments— total............................................ 359,410 359,345 Gross deposits.................................................... 930,307 905,546 Demand deposits.............................................. 738,382 Time deposits............................. ...................... 191,925 718,344 187,202 366,638 891,502 701,615 189,887 Borrowings............................................................................................................ *Including both loans “ on securities” and “ otherwise secured and unse cured” . Above figures are for 24 member banks in St. Louis, Louisville, Memphis, Little Rock and Evansville. Their resources comprise approxi mately 62.0 per cent of the resources of all member banks in this district. The aggregate amount of savings deposits held by selected member banks on July 6 was 0.4 per cent less than on June 1, but 0.9 per cent greater than on July 7, 1937. At downtown St. Louis banks as of the week ended July 15, interest rates charged were as fol lows: Customers’ prime commercial paper, \y2 to 5 per cent; collateral loans, 2 to 5y2 per cent; loans secured by warehouse receipts, \y2 to 5y2 per cent; interbank loans, Zy2 to 5 per cent, and cattle loans, Ay2 to Sy2 per cent. Federal Reserve Operations — The volume of the major operations of the Federal Reserve Bank of St. Louis (including its Louisville, Memphis and Little Rock branches) during June, 1938, is indi cated by the following figures: Pieces Checks (cash items) handled......... ........................ 5,110,343 146,330 Collections (non-cash items) handled........... ....... Transfers of funds........... ........................................ 4,978 Currency and coin received and counted............. 20,457,165 Rediscounts,advances and commitments............. 18 New issues, redemptions, and exchanges of securities as fiscal agent of U. S. Govt., etc.... 39,175 Bills and securities in custody— coupons clipped. 22,003 Amounts $1,081,346,313 34,139,952 306,666,603 37,557,923 574,500 157,728,036 ................... .... Changes in the principal assets and liabilities of this bank appear in the follow ing ta b le : July 20, (In thousands of dollars) 1938 150 Industrial advances under Sec. 13b......... $ 100 Other advances and rediscounts.............. 2 Bills bought (including participations)... 114,411 U. S. securities........................................... June 20, 1938 $ 204 30 2 118,708 July 20, 1937 $ 323 191 86 111,385 Total earning assets................................ 114,663 118,944 111,985 Total reserves............................................. Total deposits.............................................. F. R. Notes in circulation......................... 337,292 267,720 172,608 349,362 288,676 173,992 295^095 221,241 179,184 Industrial commitments under Sec. 13b.. Ratio of reserve to deposit and F. R. Note liabilities....................... 605 569 1,045 76.6% 75.5% 73.7% Following are the rates of this bank for accom modations under the Federal Reserve A ct: (1) Rediscounts and advances to member banks, under Sections 13 and 13a........... ............................................1 ^ % per annum (2) Advances to member banks, under Section 10b........... 2 % per annum (3) Rediscounts, purchases, and advances to member banks, nonmember banks and other financing in stitutions under Section 13b: (a) On portion for which such institution obligated.... 3 % per annum (b) On remaining portion............................................... 4 % per annum (4) Commitments not exceeding six months to member banks, nonmember banks and other financing in stitutions, to rediscount, purchase, or make ad vances, under Section 13b............................................ Yi% flat. (5 ) Advances to established industrial or commercial^ 4 % to businesses, under Section 13b................................. 1 5 ^ % per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured by direct obligations of United States under Section 13....... 4 % per annum Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: June, 1937 June, 1938 comp, with May, 1938 June, 1937 June, (In thousands of dollars) 1938 East St. Louis and Natl. Stock Yards, 111..$ 35,583 El Dorado, Ark..... 5,701 Evansville, Ind...... 25,605 Fort Smith, Ark.... 10,759 3,705 Greenville. Miss.... 1,401 Helena, Ark........... Little Rock, Ark.... 32,844 Louisville, K y....... .. 148,154 92,719 Memphis, Tenn..... 5,157 Owensboro, K y ..... 7,294 Pine Bluff, Ark..... . 8,311 St. Louis, M o........ 564,300 1,778 Sedalia, M o............ 13,384 Springfield, M o...... Texarkana, Ark-Tex. 7,023 $ 30,758 4,907 24,237 10,268 3,823 1,477 31,888 135,577 91,026 5,052 6,551 6,958 590,250 1,797 13,638 5,889 $ 36,012 5,163 34,698 10,637 4,261 1,677 37,509 187,279 113,073 5,691 8,628 9,277 670,660 2,043 16,187 7,339 + 15.7% + 16.2 + 5.6 + 4.8 — 3.1 — 5.1 + 3.0 + 9.3 + 1.9 + 2.1 + 11.3 + 19.4 — 4.4 — 1.1 — 1.9 + 19.3 — 1.2% + 10.4 — 26.2 + 1.1 — 13.0 — 16.5 — 12.4 — 20.9 — 18.0 — 9.4 — 15.5 — 10.4 — 15.9 — 13.0 — 17.3 — 4.3 963,718 964,096 1,150,134 — 0.04 — 16.2 (Completed July 22, 1938 ) May, 1938 Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS B Y B O ARD O F GOVERN ORS OF F E D E R A L R E SE R V E SYSTEM Index of physical volume of production, adjusted for sea sonal variation, 1923-25 average = 100. By months, Janu ary, 1934, through June, 1938. Latest figure 77. D E P A R TM EN T STORE SALES 1934 1935 1936 1937 1938 Indexes of value of sales, 1923-25 average = 100. By months, January, 1934, through June, 1938. Latest figures adjusted 82, unadjusted 79. W HOLESALE P R IC E S Index compiled by the U. S. Bureau of Labor Statistics, 1926 = 100. By weeks, 1934 through week ending July 16, 1938. Latest figures 78.9. E X C E S S R E S E R V E S O F M E M B E R BANKS January 3, 1934, through July 20, 1938. Page 8 Industrial activity showed little change in June and increased in the first three weeks of July, although there is usually a considerable decline at this season. Prices of most staple commodities advanced sharply in the latter part of June and early July and there were substantial increases in prices of stocks and lower grade bonds. Production — Volume of industrial production, as measured by the Board’s seasonally adjusted index, was at 77 per cent of the 1923-1925 average in June as compared with 76 in May and an average of 79 in the first quarter of the year. Available data indicate that in July the index will show a considerable rise. In June activity in the textile indus try increased, reflecting chiefly a further rise at woolen mills. Output at cotton and silk mills, which usually declines at this season, showed little change. Shoe production declined, following a considerable increase earlier in the year. Automobile output decreased further in June. Sales of new cars continued in excess of production, however, and stocks were further reduced. Steel production declined seasonally in June, and lum ber production showed little change, although some increase is usual. Output of plate glass rose sharply from an exceptionally low level. Coal production remained in small volume in June, while output of crude petroleum, which had been sharply reduced in May, declined somewhat further. In the first three weeks of July activity at steel mills increased, although there is usually a decline in that period, and in the third week of the month ingot production was estimated at 36 per cent of capacity as compared with an average rate of 28 per cent in June. Crude petrole um output also rose sharply, reflecting chiefly a return to production on a 6-day week basis in Texas. Automobile output declined seasonally. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a decline in June, following' a considerable increase in May. Changes in both months reflected chiefly fluctuations in awards for publicly-financed construction. Awards for private residen tial building were maintained in June at about the same daily rate as in May, although there is usually some decline at this season, and were in slightly larger volume than a year ago. Other private construction work remained at recent low levels. Employment— Factory employment and payrolls decreased fur ther from the middle of May to the middle of June. Employment in the automobile, steel, machinery, and clothing industries continued to decline, while at woolen mills there was an increase and in most other manufacturing lines changes were small. In trade, employment was reduced, while in other nonmanufacturing industries changes in the number employed were largely seasonal. Agriculture — A total wheat crop of 967,000,000 bushels was indi cated by July 1 conditions, according to the Department of Agriculture. A crop of this size would be considerably larger than average and a Government program was announced for loans at close to current market prices. Cotton acreage on July 1 was estimated at 26,900,000 acres as compared with 34,500,000 acres last year when, with excep tionally high yield per acre, a record crop was harvested. Production estimates for most other major crops were slightly under the large harvests of last season. Distribution — Distribution of commodities to consumers was main tained in June at about the May level, although a decline is usual at this season. Sales at department and variety stores showed little change and mail order sales increased. In the first half of July department store sales decreased less than seasonally. Freight-car loadings showed little change from May to June and were slightly above the low April level. Commodity Prices — Prices of industrial materials, particularly rubber, hides, nonferrous metals, and steel scrap, showed advances from the middle of June to the third week of July, and there were also in creases in prices of livestock and products. Wheat prices declined, fol lowing a rise early in June. Prices of iron and steel were reduced and there were also declines in some other industrial products. Bank Credit— Excess reserves of member banks increased substan tially in June and the first half of July, rising to above $3,000,000,000, as compared with $1,730,000,000 just prior to the reduction in reserve requirements the middle of April. The largest gain in excess reserves occurred at city banks through the retirement of Treasury bills and the continued growth of bankers balances. Total loans and investments of reporting member banks in 101 leading cities, which had increased sharply in the first week of June, declined during the remainder of June, reflecting largely redemption of Treasury bills held by New York City banks and a decrease in loans to security brokers and dealers. Money Rates — Rates on Treasury bills and notes were slightly firmer in July but continued at exceedingly low levels. Yields on Treas ury bonds showed little change.
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