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MONTHLY REVIEW O f Agricultural, Industrial, Trade and Financial Conditions in the Eighth Federal Reserve District Released for Publication O n and After the Morning of July 30, 1932 JOHN S. W O O D , Chairman and Federal Reserve Agent FEDERAL RESERVE R A D E and industry in the Eighth District during the past thirty days receded somewhat below the levels obtaining during the similar period immediately preceding. The decrease, how ever, was at a slower rate than has been the case in recent months, and in a number of important lines of wholesaling and jobbing, notably hardware, groceries, drugs and chemicals and electrical sup plies, the volume of business transacted in June ex ceeded that of May, though in all lines investigated the volume remained substantially below that of the same time a year ago. Seasonal influences, such as vacations, closing down of numerous plants for inventorying and repairs, were reflected in a further decrease in activities at factories, and production in the iron and steel, bituminous coal, lumber, quarry ing and a number of other important industries reached the lowest point on the present recessionary movement. Advance orders for both raw and fin ished materials decreased further, purchasing of all descriptions of merchandise being confined largely to immediate requirements. Manufacturers are for the m ost part pursuing the policy of producing only on orders, and inventories in virtually all lines are measurably smaller than at the corresponding period in recent years. T The general trend of com m odity prices con tinued downward, and in the case of wheat, corn, oats and some other farm products, values were the lowest of the year. On the other hand cotton scored a fair advance, and there was a sharp rise in prices of hogs, cattle and sheep. Taken as a whole weather conditions during June and the first half of July were favorable for growth and development of crops. Due chiefly to smaller acreage, however, prospects are for smaller yields this year than last year of wheat, corn, oats, tobacco, rice, cotton and several of the less important crops. Results of the late spring freezes are appearing in heavily reduced fruit production as compared with last year and the fiveyear average. Harvesting of wheat and other fall planted cereals made rapid progress, though inter C. M . STEWART, Assistant Federal Reserve Agent BANK OF ST. J. VION PAPIN, Statistician LOUIS fered with in certain localities by heavy and frequent rains. Available threshing returns appear to bear out earlier estimates, both with reference to quality and quantity. W hile the movement of seasonal merchandise has been stimulated to a considerable extent by the recent warm weather, the volume is still markedly below that for the same period in late years. Since the first of July wholesalers report a fair volume of reordering of summer goods, notably of apparel and certain lines of hardware and electrical supplies. Contrary to the usual seasonal trend, distribution of automobiles in the district, according to dealers re porting to this bank, was larger in June than in May, though remaining substantially smaller than a year ago. Except in seasonal occupations, where slight improvement was noted, the general employment situation underwent no betterment. Demand for farm help was smaller than in past seasons and in all sections the supply is heavily in excess of re quirements. The volume of retail trade in June, as reflected in sales of department stores in the chief cities of the district, was 7.7 per cent less than in May and 28.1 per cent less than in June, 1931; for the first half of this year sales fell 22.1 per cent under the first six months of 1931. Combined sales o f all wholesaling and jobbing firms reporting to this bank decreased 31 per cent in June as compared with the same month in 1931, and 17 per cent as con trasted with M ay this year; the total for the first six months this year was 29 per cent smaller than for the first half of 1931. The dollar value of permits issued in the five largest cities of the district in June was 22 per cent greater than in May, but 60 per cent less than in June, 1931; for the first six months the total was 80 per cent smaller than a year ago. Con tracts let for new construction in the Eighth district in June were 34 per cent smaller than in May, and 82 per cent smaller than in June, 1931; for the first half of this year the total was 65 per cent smaller than for the same period in 1931. Debits to check ing accounts in June were slightly larger than a month earlier, and 30.6 per cent smaller than in June last year; for the first six months this year a decrease of 26 per cent was shown under the same period in 1931. The amount of savings accounts in selected banks on July 6 showed a slight decrease as compared with June 1, and on the latest date was 12.4 per cent smaller than on July 1, 1931. A ccording to officials of railroads operating in this district, there was a moderately upward trend in the volum e of freight handled during June, due principally to the seasonal movement of winter wheat and other farm products. A s contrasted with the same period in recent years, however, the v ol ume continued considerably smaller. This was true particularly of merchandise and miscellaneous freight, coal and coke. For the country as a whole, loadings o f revenue freight for the first twenty-six weeks this year, or to July 2, totaled 14,112,144 cars, against 19,020,485 cars for the corresponding period in 1931 and 23,216,874 cars in 1930. T he St. Louis Terminal Railway Association, which handles inter changes for twenty-eight connecting lines, handled 135,115 loads in June, against 131,695 loads in May and 188,872 loads in June, 1931. During the first nine days of July the interchange amounted to 33,070 loads, which compares with 38,507 loads dur ing the same period in June and 48,951 loads during the first nine days of July, 1931. Passenger traffic of the reporting lines decreased 40 per cent in June as compared with the same month a year ago. Esti mated tonnage o f the Federal Barge Line between St. Louis and New Orleans in June was 108,000 tons, against 112,313 tons in M ay and 86,016 tons in June, 1931. Reports relative to collections reflected the same general trends as noted during the past several months. In sections m ost affected by recession in industrial activities, settlements continued back ward, and there were more requests for extensions. A ccording to retailers in the large centers, fewer actual losses from weak accounts occurred during June than in some earlier months this year. This was attributed partly to the fact that credit is being more cautiously extended, also, to the practice of customers to purchase small lots for immediate re quirements and settling as the goods are turned over from month to month. Marketing o f early fruits and vegetables has resulted in improvement in collections where these products are important crops. Questionnaires addressed to representative interests in the several lines scattered through the district showed the follow in g results: Excellent June, 1932........ ........... 0% May, 1932......... ......... 1.8 June, 1931................... 0 Good Fair Poor 18.5% 11.5 16.5 61.2% 59.9 69.0 20.3% 26.8 14.5 Commercial failures in the Eighth Federal R e serve District in June, according to Dun’s num bered 132, involving liabilities of $1,987,322, against 128 failures in May with liabilities of $8,062,615, and 133 defaults for a total of $2,615,417 in June, 1931. The average daily circulation in the United States in June was $5,530,000,000, against $5,456,000,000 in May, and $4,750,000,000 in June, 1931. M AN U FACTU RIN G AN D W H O L E S A L IN G Boots and Shoes — June sales of the reporting firms were 41 per cent smaller than for the same month in 1931, and approximately one-third less than the May total this year. Stocks bn July 1 were 28.5 per cent smaller than for the same date in 1931, but 21 per cent larger than on June 1 this year. The increase in inventories from May to June is seasonal in character, and due to accumulation of goods for fall distribution. Salesmen who departed for their s.everal territories around July 1 report a more optimistic feeling, and orders sent in by them during the first half of the month have for the most part exceeded expectations. Demand for w om en’s nov elty wear is reported more active than other lines. In late June there was a reduction in prices of ap proximately 3 per cent, which brings the average close to 17 per cent below the corresponding period a year ago. Factory operations were stepped up slightly to about 75 per cent of capacity. Contin uance of this rate will be contingent upon orders booked during the next few weeks. Clothing — Ordering of apparel for distribu tion next fall has been unusually backward, the v o l ume of future business on books of the reporting firms being the smallest for any similar period in a number of years. Demand for summer clothing, however, has been stimulated by the arrival of more seasonable weather, and since June 1 a fair volume of reordering of men’s suits is reported. There has been no change in the dull conditions obtaining for a number of months in work clothes of all descrip tions. June sales of the reporting clothiers were only about one-half as large as for the same month in 1931, and the total was also substantially smaller than in M ay this year. Drugs and Chemicals — Due mainly to a notice able pickup in demand for seasonal merchandise, June sales of the reporting firms recorded an in crease of 7.8 per cent over the preceding month, but the total was 19.6 per cent smaller than in June, 1931. Stocks on July 1 were 1.6 per cent larger than a month earlier, and 3.4 per cent less than on July 1, 1931. Moderate betterment in the movem ent of fer tilizers and insecticides as compared with earlier in the year was noted. Demand for heavy drugs and chemicals from the general manufacturing trade remains slow. The trend of prices showed little change, though advances on a number of com m odi ties affected by the recent tax law were noted. D ry Goods— Business in this classification con tinued the steady declines which marked previous months this year, and represented the lowest dollar volum e for any single month in more than a decade. A s compared with a year ago, June sales of the reporting firms showed a decline of 29 per cent, and the total was 19 per cent less than in M ay this year. In the annual comparison a considerable part of the decrease is accounted for by the heavy decline in prices which has taken place in all lines during the past twelve months. Stocks on July 1 were slightly larger than a month earlier, but 30 per cent smaller than on July 1, 1931. Buying is almost entirely for immediate shipment. Prices during early June continued downward, but recently a firm er tone is noted, due chiefly to the upturn in raw cotton. Electrical Supplies— June sales of the reporting firms reversed the usual seasonal trend, showing a gain of 6 per cent over the preceding month, but the total was slightly more than 61 per cent smaller than in June, 1931. Inventories continue to decline, stocks on July 1 being 8.5 per cent and 41 per cent smaller, respectively, than thirty days and a year earlier. Since the end of June there has been a de cided improvement in demand for electric fans and other seasonal goods. The trend of prices was lower, particularly on com m odities based largely on cop per, lead and zinc. Flour — Production at the twelve leading mills o f the district in June totaled 234,864 barrels, against 262,230 barrels in May and 210,563 barrels in June, 1931. The past thirty days constituted a betweenseason period, and business was on a relatively small scale, and mainly on a necessity basis. Large buyers were holding off until flour ground from the new wheat crop was available. Prices were easier in sympathy with the decline in cash wheat, and touched the lowest levels recorded in recent years. Offerings of new flour were relatively light. Mill operations were at from 40 to 45 per cent of capacity. Furniture — June sales of the reporting firms were 36 per cent smaller than for the same month in 1931, and about one-fifth less than the M ay total this year. Stocks on July 1 were 39 per cent and 3.6 per cent smaller, respectively, than a year and a month earlier. Purchasing continues on a hand-to- mouth basis, with interest centering in clieap-piiccd goods. Large stock orders are almost completely lacking. Groceries — Contrary to the usual seasonal trend, sales of the reporting interests in June showed a gain of 8 per cent over the previous month. A s compared with June last year, however, there was a decrease of 22 per cent. Stocks increased 10 per cent between June 1 and July 1, and on the latter date were 12 per cent smaller than a year ago. Some improvement in business in the rural areas was noted, particularly in sections where the winter wheat harvest was in progress. Except on com m odi ties affected by seasonal causes, there was no nota ble change in prices. Hardware — June sales of the reporting firms were 4.6 per cent larger than in May, and 10.6 per cent smaller than in June, 1931. This was the most favorable showing made in this classification for a number of months. The increase in the month-tomonth comparison is not seasonal in character, and the decrease as compared with a year ago was con siderably smaller than the average in recent months. Stocks on July 1 were about 2 per cent smaller than a month earlier, and 6.4 per cent less than on July 1, 1931. Iron and Steel Products — Production and pur chasing of iron and steel commodities in this dis trict during the past thirty days showed consider ably more than the usual seasonal contraction. A c tivities as a whole fell measurably below the low levels reached a month earlier, with the recession affecting practically all sections of the industry. A number of plants which ordinarily close on July 4, for repairs, inventorying and vacation, suspended operations on June 30. A limited number of these establishments have resumed, some will await the accumulation of orders, while others have no defi nite plans for reopening. Purchasing by the railroads continues on a very limited scale, and is confined to only absolute necessities. New business placed by the automotive industry has failed to expand, and specifications on castings and other goods under contract are much below expectations. The new quarter opened with little business on order books of steel mills, and users of plates, sheets, strip and other flat rolled products are not disposed to cover their needs further ahead than a month to six weeks. The general demand for machinery and equipment continues quiet, particularly from industrial sources. Advanced business of most firms is not in sufficient volume to warrant interest in new tools. As has been the case for a number of months, demand for wire fencing, repair materials, implements and other Commodities used chiefly in the rural areas is slug gish, due to the continued low prices of all varieties of farm products. Except for materials used in high way construction, river and levee improvement work and other outdoor engineering projects, the outlet through the building industry remains narrow. There was a further reduction in w orking forces of fabricators of structural steel. For the country as a whole, production of pig iron in June totaled 626,651 tons, which compares with 783,769 tons in May and 1,637,998 tons in June, 1931. Steel ingot production in the United States in June was at the lowest rate since 1900, the total output of 897,275 tons comparing with 1,106,030 tons in May and 2,127,762 tons in June, 1931. A U T O M O B IL ES Combined passenger car, truck and taxicab pro duction in the United States in June was 183,092 against 185,149 in May, and 249,462 in June, 1931. Contrary to the seasonal trend in recent years, June sales of automobiles by dealers reporting to this bank exceeded those o f the preceding month by a substantial margin. The increase was due in part to active purchasing of cars in the cheap-priced category, also to the new Federal tax law, which had the effect of advancing many transactions which ordinarily would have been postponed until July and August. Interest centered chiefly in the low price field, both in the large cities and in the smaller towns and country. O f the cars sold in June, 76 per cent were in that classification, against 66 per cent in May and 63 per cent in June, 1931. For the sixth consecutive month this year, June sales fell below the total of the corresponding period in 1931. A c cording to the reporting dealers, considerably less than the usual stimulation in business resulted from the touring season. Virtually all sales were for re placement, very few persons not previously owning cars having com e into the market. A s had been the case earlier in the year, business in repair parts and accessories was in large volume, the June total com paring favorably with that of a year ago. Quite generally, but more particularly in the rural areas, owners are repairing their cars in order to lengthen their period of service. June sales of new passenger cars by the reporting dealers were 19 per cent greater than in May, and 31 per cent less than in June, 1931. Dealers are universally purchasing cautiously, and only enough to fill immediate re quirements, with the result that inventories continue low. Stocks of new passenger cars on dealers’ floors on July 1 were 3 per cent larger than a month earlier, and about 28 per cent smaller than on July 1 last year. Demand for used cars was again active, June sales exceeding those of M ay by 12 per cent and showing only slight change as compared with the same month in 1931. Salable secondhand cars in stock on July 1 were 6 per cent larger than a month earlier, and 4 per cent less than a year ago. Demand for trucks of all descriptions showed a slowing down, both as compared with the preceding month and a year ago. Sales in June fell 13 per cent below the May total and 42 per cent below the same month in 1931. A ccording to dealers reporting on that detail, deferred payment sales constituted 49 per cent o f their total sales, which contrasts with 51.5 per cent in May and 44 per cent in June, 1931. R E T A IL T R A D E The condition of retail trade is reflected in the follow ing comparative statements showing activities in the leading cities of the district: Department Stores N et sales comparison Stocks on hand Stock turnover June, 1932 6 months ended June 30, 1932 Jan. 1, to comp, to June 30, 1932 to comp, to June 30, June, 1931 same period 1931 June 30, 1931 1932 1931 Evansville .........— 37.1% — 29.5% — 23.1% .87 .94 Little Rock.. ....— 33.3 — 28.1 — 8.6 1.04 1.36 Louisville .... ....— 27.7 — 20.2 — 5.1 1.23 1.35 Memphis ...... ....— 29.8 — 23.2 — 12.6 1.41 1.51 ....— 31.8 — 24.3 — 9.8 1.11 1.31 St. Louis...... ....— 27.1 — 21.4 — 16.2 1.74 1.91 Springfield .......— 38.7 — 27.5 — 12.4 .63 .80 8th District.. ....— 28.1 — 22.1 — 13.7 1.53 1.69 Retail Stores Net sales comparison Stocks on hand Stock turnover June, 1932 6 months ended June 30, 1932 Jan. 1, to comp, to June 30, 1932 to comp, to June 30, June, 1931 same period 1931 June 30, 1931 1932 1931 Men’s Furnishings — 32.0% Boots and Shoes.. ....— 32.4 — 30.9% — 11.3% 1.38 1.74 — 23.9 — 21.6 1.39 1.51 BU ILD IN G The dollar value of permits issued for new con struction in the five largest cities of the district in June was 22.4 per cent greater than in May, and 60 per cent less than in June, 1931. A ccordin g to sta tistics compiled by the F. W . D odge Corp., con struction contracts let in the Eighth Federal R e serve District in June amounted to $5,768,424 which compares with $8,788,497 in May, and $32,553,934 in June, 1931. Production of portland cement for the country as a whole in June totaled 7,921,000 barrels, against 6,913,000 barrels in May, and 14,118,000 barrels in June, 1931. Building fig ures for June fo llo w : Evansville .. Little Rock Louisville .. Memphis .... St. Louis.... New Construction Permits *Cost 1932 1931 1932 1931 137 190 $ 48 $ 95 12 23 8 20 51 63 41 145 125 132 67 136 167 367 339 853 June totals.. 504 763 $ May totals.. 533 863 April totals.. 570 904 *In thousands of dollars (000 503 $1,249 411 1,717 493 5,454 omitted). ________ Repairs, etc.________ Permits *Cost 1932 1931 1932 1931 51 $ 23 $ 25 -T 5 57 57 23 16 30 54 36 71 123 179 64 107 192 315 123 116 452 513 707 656 726 817 $ 269 204 305 $335 413 433 PO STAL RECEIPTS Returns from the five largest cities of the dis trict show a decrease in combined postal receipts for the second quarter of the year, of 20.2 per cent as compared with the corresponding period in 1931, and of 6.9 per cent as compared with the first three months this year. Detailed figures fo llo w : June 30, 1932 Evansville .................$ 126,021 Little Rock................ 142,472 530,379 Louisville ................... Memphis ................... 396,273 St. Louis..................... 2,294,185 Totals .................... $3,489,330 For Quarter Ended Mar. 31, Dec. 31, 1932 1931 $ 131,608 $ 142,000 168,130 182,000 562,491 659,000 418,576 551,000 2,466,366 2,993,000 $3,747,171 $4,527,000 June 30, 1931 $ 163,000 179,000 615,000 491,000 2,926,000 $4,374,000 CONSUM PTION OF E LEC T R IC ITY Public utilities companies in the five largest cities of the district report consumption of electric current by selected industrial customers in June as being 12.4 per cent greater than in May and 6.8 per cent less than in June, 1931. Detailed figures fo llo w : No. of June, May, June, 1932 Custom1932 1932 comp, to ers * K .W .H . * K .W .H . May, 1932 Evansville .... 40 2,068 2,004 + 3.2% Little Rock.... 35 1,714 1,351 + 2 6 .9 Louisville .... 85 5,873 5,613 + 4.6 Memphis ...... 31 1,046 764 + 3 6 .9 St. Louis......183 21,365 18,793 + 1 3 .7 Totals .......... 374 32,066 *In thousands (000 omitted). 28,525 + 1 2 .4 June, June, 1932 1931 comp, to * K .W .H . June, 1931 2,066 + 0 .1% 1,934 — 11.4 6,199 — 5.3 1,858 — 43.7 22,333 — 4.3 34,390 — 6.8 AG RICU LTU R E Taken as a whole weather conditions during the past thirty days were seasonable and auspicious for agriculture in the Eighth District. Prospects on July 1 were somewhat more favorable than a month ear lier, and since that date further betterment has taken place in corn, rice, tobacco, cotton, legumes, pota toes and some other less important products. June rains substantially helped commercial vegetable crops and gardens, which at the middle of July gave promise of generally heavy yields. Excessive moist ure in some sections, mainly in the south, wrought damage to crops in lowlands and river bottoms. The extent of this injury, however, was not great, and was more than counterbalanced by benefits derived from the rains by crops as a whole. Some delay was occasioned to the wheat harvest by frequent and heavy precipitation, and in some sections harvesting and threshing with combines has been impracticable, resulting in a return to reaper and binder, and reg ular threshing equipment. The oat harvest was practically completed at the middle of July, and scattered reports indicate that an unusually large amount of this crop will be used for hay to avoid threshing costs. Harvesting o f hay made good progress, and due to the shortness o f this crop, a considerable substitute acreage will be planted to soy beans, cowpeas and sorghums. An important development during the past several weeks has been the sharp advance in prices of hogs. In the second week of July the price at the St. Louis market was approximately two-thirds higher than the low point reached in mid-May. Cattle values also advanced, and cotton sold higher than at any time since last April. Grains, on the other hand, receded further, scoring new low records on the present downward movement. The outlook for fruits varies considerably, both with reference to the general species and localities. The supply of farm labor continues to be about double the demand, and wages show a heavy reduction as compared with last year. Winter Wheat — Effects of the March freezes and other unfavorable conditions since planting last fall were reflected in further deterioration in winter wheat prospects in this district during June. Based on the U. S. Department of Agriculture’ s July 1 condition, total yield of winter wheat in the Eighth District is estimated at 33,476,000 bushels, which compares with 66,260,000 bushels harvested in 1931, and an 8-year average (1923-1930) of 49,921,000 bushels. Harvesting of the crop made rapid progress during the past four weeks, despite interference in certain sections by frequent and heavy rains. Due to the low price, much grain is being stacked, and will not be threshed until later in the season. Scat tered reports indicate damage from chinch bugs, hessian fly and other insect pests somewhat greater than in average years. New wheat has begun to arrive at markets. Quality varies rather broadly, but the general average is high. Available threshing returns seem to bear out the most recent official estimates of quantity. A larger percentage of the 1931 wheat crop was fed to livestock than in any previous year. Corn — Generally throughout the district the corn crop is in good condition. Rains in June and early July supplied abundant moisture, and almost universally fields have received necesary cultivation and free of grass and weeds. The U. S. Department of Agriculture’s July report places the yield of corn in the Eighth District at 381,668,000 bushels, which compares with 383,052,000 bushels harvested in 1931, and an 8-year average of 342,534,000 bush els. For the country as a whole the 1932 crop is estimated at 2,995,850,000 bushels, which com pares with 2,563,271,000 bushels harvested in 1931 and a 5-year average of 2,625,000,000 bushels. The price of corn declined to a new low point for the year during the last week o f June. Since that time, how ever, a slight recovery has taken place, mainly in sympathy with the upturn in hog prices. Fruits and Vegetables — The outlook for fruits and vegetables in the Eighth District is unusually spotted. The recent rains have materially assisted gardens and commercial vegetable crops, which at the middle of July were in a considerably stronger position than a month or six weeks earlier. Ground fruits are mainly large crops, but tree fruits are short, particularly peaches, which were severely damaged by the late spring freezes. O f the impor tant vegetable crops, prospects for sweet potatoes are the most promising, the U. S. Department of Agriculture in its July 1 report estimating the yield at 21,446,000 bushels, against 18,851,000 bushels last year and a 5-year average of 14,864,000 bushels. The peach crop in states of the district is estimated at only 1,132,000 bushels, against the record crop of 15.470.000 bushels in 1931, and a 5-year average of 8.175.000 bushels. The output of apples in these states is forecast at 6,786,000 bushels, against 28,642,000 bushels harvested in 1931, and a 5-year average of 23,967,000 bushels. The pear crop is small, the estimate being for 443,000 bushels, against 2,639,000 bushels in 1931, and a 5-year average of 1,681,000 bushels. The July 1 condition of grapes was excep tionally high, and indicated a yield of 32,464 tons, about 13 per cent greater than the 5-year average. The white potato crop in this district will be a large one, the estimated yield of 12,856,000 bushels com paring with 12,472,000 bushels in 1931 and an 8-year average of 15,050,000 bushels. Live Stock — There was no change worthy of note in the condition o f livestock generally through the district as compared with the two or three months immediately preceding. The season has been in the main auspicious for herds, and the recent sharp advance in hog and cattle prices has served to considerably raise the morale of livestock raisers. Demand for feeder cattle has improved markedly in recent weeks, as has also demand for hogs for fattening in the country. The condition of pastures on July 1 was still below average, though having benefited considera bly by the June rains. Production of tame hay in the Eighth District is estimated by the U. S. Depart ment of Agriculture at 4,551,000 tons, against 5,458,000 tons harvested in 1931, and an 8-year average of 7,616,000 tons. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follow s: Receipts June, May, June, 1932 1932 1931 Cattle and Calves...... 85,530 87,350 94,782 Hogs .............................212,815 258,880 219,549 Horses and Mules...... 917 1,935 1,627 Sheep ............................123,475 73,000 124,170 Shipments________ June, May, June, 1932 1932 1931 51,714 44,941 55,911 159,111 156,807 172,895 1,138 1,907 1,577 33,121 18,845 53,261 Cotton — A ccording to the report of the U. S. Department of Agriculture, the area of cotton in all states of this district under cultivation on July 1 was smaller by 5.4 per cent than on the same date in 1931. Combined acreage in Missouri, Tennessee, Mississippi and Arkansas is placed at 8,650,000 acres, against 9,140,000 acres in 1931. Aside from too much rain in Arkansas and other sections of the district, climate conditions have favored growth o f cotton. Generally stands are good, and for the most part fields are clean, though in some localities grass is beginning to threaten on account of recent preci pitation. Conditions since last winter have been favorable for boll weevil survival, and infestation of this pest is the worst since 1923, and actual dam age has been done in many localities. Due to the low price, farmers are making relatively little effort to check the ravages of these insects. Less fertilizer is being used this season than in a number of years. Inquiries for spot cotton increased quite markedly, due chiefly to the upturn in future prices, but actual transactions were still in limited volume. In the St. Louis market the middling grade ranged from 4.75c per pound to 5.60c per pound between June 16 and July 15, closing at 5.35c per pound on the latter date, which compared with 4.50c on June 16, and 6.60c on June 15, 1931. Receipts at Arkansas ware houses from August 1, 1931 to July 8, 1932, totaled 1,505,981 bales against 825,113 bales for the corres ponding period in 1931. Stocks on hand on July 8 totaled 366,692 bales, against 383,958 bales on June 17, and 103,584 bales on July 8, 1931. Tobacco — The U. S. Department of A gricul ture in its report as of July 1 estimates the tobacco crop in the Eighth District at 285,670,000 pounds, against 395,016,000 pounds harvested in 1931 and an 8-year average (1923-1930) of 295,534,000 pounds. Good rains and seasonable temperatures permitted completion of planting all types of tobacco. There is a noticeable reduction in acreage as compared with last year; from 15 to 20 per cent in the burley district; 15 to 20 per cent in the Clarksville, Spring field and Hopkinsville dark fired section s; 25 per cent in the air-cured Green River district; and 35 to 40 per cent in the western Paducah district. CO M M O D ITY PRICES Range of prices in St. Louis market between June 15, 1932 and July 15, 1932, with closing quota tions on the latter date and July 15, 1931, fo llo w : Close Wheat High Low July 15, 1932 July 15, 1931 July ..................... per bu..$ .$ .503^$ .5 0 ^ $ .45 .45y2 $ .48 $ AS'A Sept......................... .53 .4 7 ^ .50 A7'A Dec......................... .5 z y 2 .5 0 ^ .51 .5454 No. 2 red winter .50 . 4e y 2 $ . 4 6 ^ @ .47 $ .4 8 ^ @ .49 No. 2 hard “ .51 .47 .48 @ .48^2 .47 @ .48 Corn July ..................... .25 .31 .29 .56 @ .57 Sept........................ .31 .2 8 ^ .50 @ .50*6 .3054 No. 2 mixed ..... .32 .30 .61 @ .6UA .31 @ .31^2 No. 2 white ....... .6 2 y2 @ .63 .32 .30 . n y 2 @ .32 Oats No. 2 white ....... .22 .17 .27 @ .2 7 ^ .17 Flour 4.25 @ 4.75 Soft patent........pe 3.50 2.90 (5)3.25 2.90 Spring patent...... 3.85 @ 4.10 4.25 @ 4.40 4.50 3.85 .0535 .0860 .0560 .0475 4.50 @ 7.90 3.50 @ 4.95 5.40 2.50 F IN A N C IA L a decrease of 2.0 per cent as contrasted with June 15, 1932. Deposits decreased 3.4 per cent between June 15, 1932 and July 13, 1932 and on the latter date were 20.0 per cent smaller than on July 15, 1931. Composite statement follow s: There was a further recession in demand for credit from commercial and industrial sources in the Eighth District during the past thirty days, accom panied by a moderate easing in interest rates at the *June 15, *July 15, *July 13, commercial banks. Commitments of merchants and 1932 1931 1932 25 24 Number of banks reporting............ 24 manufacturers for purchasing and preparing goods Loans and discounts (incl. rediscounts) Secured by U. S. Govt, obligations and for fall and winter distribution were measurably $164,820 $123,273 other stocks and bonds........... .$117,241 241,579 193,216 All other loans and discounts.... 192,860 smaller than at the same period in late years. The $406,399 $316,489 Total loans and discounts................ .$310,101 demand for financing agricultural operations was Investments 77,920 90,126 U . S. Government securities.... . 88,408 also less pronounced than in past seasons, due partly 129,770 145,876 Other securities.............................. . 128,369 to the low prices of farm products and to the fact $223,796 $219,896 Total investments............................... .$216,777 42,346 37,780 Reserve balance with F. R. Bank 36,073 that this year’s crops are being produced with great 6,292 6,860 6,336 Cash in vault....................................... . Deposits econom y and a minimum of cash outlay. A bout the 361,282 288,711 Net demand deposits.................... . 279,865 236,697 200,983 Time deposits.................................,. 199,451 only seasonal increase noted was on the part of flour 4,635 Government deposits.................... . 3,011 9,542 milling and grain handling interests. Even here $602,614 $499,236 Total deposits..................................... ,.$482,327 Bills payable and rediscounts with demand was below average, ow ing partly to the 1,500 2,289 2,453 Federal Reserve Bank.................. . *In thousands (000 omitted). general disposition am ong producers to hold back These 24 banks are located in St. Louis, Louisville, Memphis, Little Rock, and Evansville, and their total resources comprise approximately their wheat for more favorable markets. Loans to 52.6 per cent of all member banks in this district. country banks by their city correspondents were in Debits to Individual Accounts — The follow ing considerably smaller volum e than a year ago, and table gives the total debits charged by banks to the average during the past decade. checking acounts, savings accounts, certificates of Largely as a result of these conditions, total deposit accounts and trust accounts of individuals, loans of the reporting member banks in the principal firms, corporations and U. S. Government in leading cities of the district continued to contract, and on cities of the district. Charges to accounts of banks July 13 were 2 per cent smaller than on June 15, and are not included. 23.7 per cent less than the total on July 15, 1931. June, 1932 comp, to *June, *May, *June, May, 1932 June, 1931 1932 1932 1931 Investments of these banks declined 1.4 per cent in tl. — 33.7% ; 20,266 $ 19,844 $ 30,570 + 2.1% the four-week period ending July 13, on which date — 26.3 3,422 4,641 El Dorado, Ark..... 3,298 + 3.8 16,059 22,608 — 4.0 — 31.8 15,422 Evansville, Ind.... the aggregate was smaller by 3.1 per cent than a Fort Smith, Ark.... 6,749 6,812 8,917 — 0.9 — 24.3 — 1.2 2,289 2,592 — 12.8 Greenville, Miss.... 2,261 year ago. Deposits also moved downward, and at — 8.5 — 53.0 1,136 1,242 2,419 Helena, Ark........... 18,096 19,532 28,405 — 7.4 — 36.3 482 millions on July 13 represented a decrease of — 22.1 105,319 135,178 + 2.8 102,433 — 26.7 70,513 70,328 96,261 + 0.3 3.4 per cent and 20 per cent, respectively, as con — 38.5 4,739 + 16.6 2,915 2,501 4,051 — 42.8 4,562 7,076 — 11.2 trasted with a month and a year earlier. 6,230 8,985 — 3.3 — 32.9 6,027 487,071 484,620 714,075 + 0.5 — 31.8 B orrow ings o f all member banks from the Fed 1,560 1,410 3,395 + 10.6 — 54.1 Sedalia, Mo.., eral reserve bank fluctuated only in minor degree, 10,402 15,807 — 2.3 — 35.7 Springfield, ! 10,161 **Texarkana, but were uniform ly substantially larger than during ... 5,410 5,073 9,330 — 42.0 + 6.6 the corresponding period last year. The total v ol Totals .....................$760,379 $756,635 $1,094,998 + 0.5 — 30.6 *In thousands (000 omitted.) ume of reserve bank credit expanded further, but **Includes one bank in Texarkana, Texas not in Eighth District. at a more moderate rate. On July 15 the total out Federal Reserve Operations — During June, the standing was $7,412,000 greater than a month ear Federal Reserve Bank of St. Louis discounted for lier, the increase being entirely due to larger hold 215 member banks, against 226 in May and 159 in ings of Government securities. Reflecting a som e June, 1931. The discount rate remained unchanged what greater than seasonal expansion in demand at 3y2 per cent. Changes in the principal assets and for currency, the note circulation of this bank was liabilities of this institution appear in the follow ing increased $8,097,000 between June 15 and July 15. table: *June 15, *July 15, ♦July 15, A t St. Louis banks prevailing interest rates 1932 1931 1932 were as fo llo w s : Prime commercial loans, 3y2 to Sy2 $ 9,189 $13,039 ..$13,653 1,232 1,772 485 Bills bought .......................................... per cent; collateral loans, 4J4 to 6 per cent; loans 57,480 30,349 .. 64,030 U . S. Securities.................................... 200 Federal Inter. Cr. Bk. Debentures.. secured by warehouse receipts, 4^4 to 5% per cent; 1,033 1,004 Toos Participation in Inv. Foreign Bank interbank loans, 4 y2 to 5% per cent and cattle loans, $42,543 $72,756 ..$79,172 86,572 108,970 .. 85,213 Total reserves............................ 5 to 6 per cent. 73,093 90,519 F. R. Notes in circulation.... ,, 98,616 60,692 70,596 Total deposits............................ .. 58,073 Condition of Banks — Loans and discounts of Ratio of reserve to deposits 75.8% 57.3% and F. R. Note Liabilitie .. 54.4% the reporting member banks on July 13,1932 showed *In thousands (000 omitted). (Compiled July 22, 1932) BUSINESS CONDITIONS IN T H E U N ITE D STATES Industrial activity decreased further from May to June by somewhat more than the usual seasonal amount and there was a considerable reduction in factory employment and payrolls. The general level of commodity prices advanced between the middle of June and the middle of July, reflecting chiefly a rise in the prices of livestock and meats. PRODUCTION AND EM PLOYM ENT — Volume of in dustrial production, as measured by the Board’s seasonally ad- W H O L E S A L E PRICES — The level of prices in wholesale markets, after declining steadily during May, was relatively stable early in June, and after the middle of the month there was an advance which continued through the second week in July. Prices of several leading commodities, including livestock, meats, cotton and sugar, increased considerably during June and the first half of July but later showed some recession. Prices of wheat declined to unusually low levels and markets for copper and lead continued weak. PER CEHT PER CENT 120 120 R A IL R C DAD F R EIG H T-C AR L0 i A D IN G S V v W 100 Merchandise 5 " \j Tot, 90 " 'N 60 \ V 70 60 1928 1927 1930 1929 1931 \9 3 2 Index number of industrial production, adjusted for seasonal variation. (1923-1925 averages 100). Latest figure, June, 59. Indexes of daily average number of cars loaded; adjusted for seasonal variation. (1923-1925 average=100). Latest figures June, total 53, miscellaneous 71. justed index, declined from 60 per cent of the 1923-1925 average in May to 59 per cent in June. There were large decreases in out put in the steel, coal, and meat-packing industries, while at auto mobile factories daily average production showed a smaller decline than is usual at this season, and at woolen mills activity increased, contrary to seasonal tendency. Consumption of cotton by domestic mills showed the usual seasonal decline. At manufacturing estab lishments there was a further reduction of 3.6 per cent in number of employees and of 7.8 per cent in earnings between the middle of May and the middle of June. Decreases in employment were general, with the exception of the automobile and tobacco indus tries, and of seasonally active industries, such as vegetable and fruit canning and the manufacture of ice cream; the largest de creases were in the steel, textile, chemical and machinery indus tries and at railway repair shops. Daily average value of building contracts awarded, as reported by the F. W . Dodge Corporation, declined in June but increased in the first half of July. Depart ment of Agriculture estimates as of July 1 indicate a corn crop of BANK CREDIT — Volume of reserve bank credit continued to increase between the middle of June and the middle of July, reflecting principally further purchases of United States Govern ment securities by the reserve banks. In addition, member banks obtained reserve bank funds through an increase in the monetary stock of gold and a decline in deposits held with the reserve banks by foreign central banks. Funds released from these sources were absorbed by an increase in the demand for currency which also caused the member banks to draw on their balances with the reserve banks and to increase their discounts somewhat. The demand for currency which for the period amounted to $270,000,000 was caused by banking disturbance largely in the Chicago dis trict. By seasonal requirements at the turn of the month and the Fourth of July holiday, and by increased use of cash to avoid the tax on checks. Loans and investments of reporting member banks after fluctuating widely during June declined in the first two weeks of July, and on July 13 totaled $18,475,000,000, about $540,000,000 less than on June 1. There was a further decline in loans, while the banks' investments in United States Government securities, after increasing substantially during the period of Treasury financM IU IO N S OF D O LLAR S MILLIONS OF DOLLARS 6000------------------ R eser v e ba YK C R E D IT AN D FACTOR S IN CHANGE - ^ Gold Stock,— *. i ▲ 1500 w / L— V k f r\ S \ ^— - 4000 2500 2000 1500 Reserve Bank Credit 500 Monthly averages of daily figures. 4500 V / Member Bank Reserve Balances 2000 of 432,000,000 bushels, 45 per cent smaller than last year and 21 per cent less than the five-year average; a spring wheat crop of 305,000,000 bushels, three times as large as last year and slightly larger than the average; and a tobacco crop one-fifth smaller than usual. DISTRIBU TO N — Volume of railroad freight traffic declined somewhat further in June and value of merchandise sold by de partment stores decreased by more than the usual seasonal amount. 5000 y/' \ S ------------------- 4000 2500 1000 5500 Money in Circulation 5000 4500 s | 5500 u 1000 500 Latest figures are averages of first 20 days in July. ing in mid-June, declined gradually, but on July 13 were still $90,000,000 larger than six weeks earlier. Money rates in the open market declined further during June and the first half of July; at the Federal Reserve Bank of New York buying rates for bankers’ acceptances maturing within 90 days were reduced from 2 Yz to 1 per cent on June 24. On the same day the bank lowered its dis count rate from 3 per cent to 2 ^ per cent, and on the following day the rate at the Chicago bank was reduced from 3 /1 2 per cent to 2y2 per cent.
@FedFRASER