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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 ants
July 13* 38 comp,14 *37
’
m e m o e r isan K c v A ) •
.
June 15 ,38 July with
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 •
*Sept...................... “
72Ys
*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 V
s
■
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
199
$ ""28 $' 47
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.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102