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BUSINESS CONDITIONS
Monthly Review of Agriculture, Industry, Trade and Finance
Released for Publication on Afternoon of July 30th, 1940
FEDERAL
RESERVE
BANK
The Iberville Memorial Bridge at Biloxi, Mississippi
OF
ST.
LOUIS
SUMMARY OF EIGHTH DISTR ICT
Agriculture:
Estimated yield of 6 crops...................
July 1, 1940, comp, w ith
1939
Av. 1923-39
— 7.6%—
6.5%
June, 1940, comp, with
May, 1940 June, 1939
Livestock
0.3%+ 18.2%
Receipts at National Stock Yards........ . +
Shipments from aforesaid Yards........, . — 1.0 + *40.1
Production and Distribution:
Sales by mfrs. and wholesalers........... -- 11.8 — 5.2
Department store sales......................... , . — 10.7 + 4.7
4.8
1.8 +
Building and Construction:
,
. . .
f Number.. _ 18.1 — 4.6
Bldg. permits, mcl. repairs j
— 10.5 + 19.0
10.7 — 1.7
Value construction contracts awarded
Miscellaneous:
Commercial failures { Liabilities
Consumption of electricity.................
Debits to individual accounts.............
Life Insurance Sales.............................
Member Banks (24):
Loans........................................................
Investments...............................................
. —
-—
16.3
28.0
3.2
7.5
6.3
+
—
+
+
+
28.6
36.5
5.7
2.2
3.8
July 1 0 /4 0 comp, with
June 12/40 July 12/39
_
—
0 .1 % +
1.2 +
8.0%
2.4
6.3 — 5.4
IG H T H D istrict industry and trade through
June and the first half of July carried further
forward the improvement which has been in
effect since the closing weeks of April. In addition,
most indicators used to measure business volume
recorded substantial advances over a year ago. The
usual slowing down at m anufacturing plants for
vacations, inventorying and other seasonal causes
was less in evidence than is ordinarily the case and
in many instances was entirely absent. M aintenance
of the high rate of activities was in the main to
supply routine domestic requirem ents. Certain lines
were stim ulated to some degree by needs in con
nection w ith the European war and the Govern
ment's arm am ent program, but volume of orders in
these classifications has been less felt than in some
other sections of the country.
The rise in production of m anufactured goods ex
tended to a m ajority of lines investigated but was
outstanding in the durable goods industries. Steel
ingot production at mills in this general area ad
vanced to 70.5 per cent of capacity in the final week
of June, the highest rate since last January. Follow
ing a sharp upturn in the melt and shipments of pig
iron from April to May, there was a further increase
in June.
Demand for coal continued active, and production
at district mines during June was maintained at
higher than seasonal levels, output for the m onth
being approxim ately 27 per cent greater than a year
ago. In states of the district production of crude
petroleum continued the upward trend of recent
E
Page 2
months, reflecting chiefly increased output in the
new Illinois fields. O utput of zinc at district mines
receded slightly from May to June, but was more
than half again as large as in June, 1939. Lum ber
production was well above May and a year ago.
T he value of construction contracts let in the
E ighth D istrict in June, according to figures com
piled by the F. W . Dodge Corporation, was 10.7 per
cent less than in May and showed little change from
a year ago. Dollar value of perm its for new build
ings in the principal cities was 16 per cent greater
than in June, 1939. Public utilities companies in six
large cities of the district report consumption of
electricity by industrial customers as being greater
by 3.2 per cent and 5.7 per cent, respectively, than
a m onth and a year earlier.
D istribution of commodities felt the effects of
advancing general business activity in June. D epart
m ent store sales for that m onth in the principal
cities showed considerably less than the expected
seasonal decline from May and a gain of 4.7 per cent
over June, 1939. More seasonable w eather during
the past thirty days has resulted in a marked pickup
in the movement of summer merchandise, both in
the large cities and country. For the week ended
July 13, departm ent store sales were larger by 17.4
per cent than in the corresponding week a year ago.
Stim ulated by the early w inter wheat movement
and heavy loadings of miscellaneous freight, traffic
of railroads operating in the district continued well
above a year and two years earlier.
W hile w eather conditions were unusually varied
and in some sections adverse to the grow th and
development of crops, prospects as a whole for agri
cultural production in the Eighth D istrict are above
average, according to the U. S. D epartm ent of A gri
culture. H arvesting of w inter w heat was accomp
lished under mainly ideal conditions and output will
be about 2.6 per cent greater than the average dur
ing the preceding 17 years. The corn crop is forecast
at slightly below average, while output of potatoes
will exceed that of last year and the average. De
spite a late start, the tobacco crop as of mid-July was
in the main making good progress. Cotton is also
late and considerable damage was done by excessive
precipitation in the southern tiers of the district.
Commercial failures in the Eighth Federal Re
serve D istrict in June, according to Dun and Bradstreet, numbered 36, involving liabilities of $299,000,
as against 43 insolvencies with liabilities of $415,000
in May and 28 defaults for a total of $471,000 in
June, 1939.
DE T A I L E D S UR VEY OF DIS TR IC T
M A N U F A C T U R IN G A N D W H O L E S A L IN G
L ines of C om m odities
N et Sales
Stocks
D ata furn ish ed by B u re au of Census,
U . S. D ept, of Com m erce.
Ju n e, 1940
com pared w ith
M ay, ’40 Ju n e , ’39
Ju n e 30, 1940
comp, w ith
Ju n e 30, 1939
Vutomotive S u p p lie s...............................
^oots an d S h o e s.......................................
Dry G o o d s...................................................
E lectrical S u p p lies..................................
F u r n itu re .....................................................
(rro ce rie s.....................................................
T ardw are.....................................................
Tobacco and its P r o d u c ts .......................
M iscellaneous............................................
— 6.3%
— 17.2
— 3.1
— 5.2
— 17.5
— 7.6
— 10.3
+ 4.2
— 5.9
— 2.3%
— 16.7
— 16.0
+ 9.4
— 0.2
— 7.0
+ 8.5
+ 8.7
+ 4.1
+ 2 7 .4 %
+ 17.0
+ 34.4
+ 3 0 .9
+ 14.5
+ 21.1
+ 17.9
+ 8.0
Automobiles — Combined passenger car, truck
and taxicab production in the U nited States in June
totaled 344,636, as against 391,215 in May and 309,720 in June, 1939.
Iron and Steel Products — Save as influenced by
the Independence H oliday and other seasonal fac
tors, activities in the iron and steel industry in this
area through June and the first half of July were
m aintained at, or about, the improved rate noted in
the sim ilar period imm ediately preceding. New
orders at certain mills, foundries, machine shops
and other ferrous m etal w orking plants continued
the upw ard trend which began in April. In addi
tion, considerable pressure upon producers for deliv
ery of m aterials previously acquired is in evidence.
In a num ber of instances users of steel are endeav
oring to build up inventories to insure adequate
supplies of m aterials which may be given priority
later on in connection w ith the Governm ent's defense
program . Already deliveries on some products,
notably bars, strip and certain descriptions of plates
and sheets, are reported several weeks behind.
W hile there has been further expansion in require
m ents of im portant buying groups, miscellaneous
demands continue to account for the bulk of current
business. Purchasing by the general m anufacturing
trade has shown less than the usual seasonal reces
sion. O utlet through the building industry is on a
considerably broader scale than a year ago.
June sales of warehouse and jobbing interests
were approxim ately 14 per cent greater than in May
and about one-fourth greater than a year ago. P u r
chasing by the warehouses, which heretofore had
been chiefly on a necessity basis, has increased in
the imm ediate past, and includes a considerable vol
ume of steel for future delivery. O perations at
structural steel fabricating yards declined slightly,
owning m ainly to the holiday interruption. Steel
ingot production at mills in this general area ad
vanced to 70.5 per cent of capacity in the final week
of June, the highest rate since last January. The
rate declined 5.5 points to 65 per cent in the second
week of July.
U nited States steel production in June totaled
5,532,910 net tons, compared with 4,841,403 net tons
in May and 3,523,880 net tons in June, 1939. In the
first half of 1940 output at 28,678,124 net tons was
37 per cent greater than in the first six m onths of
1939. P ig iron production in June, according to the
m agazine “Steel,” totaled 3,813,092 net tons, the
highest since January, and com paring w ith 3,497,157
net tons in May and 2,373,753 net tons in June, 1939.
R E T A IL T R A D E
Department Stores — The trend of retail trade in
the E ighth D istrict, as reflected in statistics of
departm ent stores in the principal cities which re
port to this bank, is shown in the following comparative sta te m e n t:
S tocks
S tock
N e t Sales
T urnover
on H a n d
Ju n e, 1940
6 mos. ’40 Ju n e 30,’40,
J a n . 1, to
com pared w ith
to same
comp, w ith
Ju n e 30,
M ay ,’40 J u n e ,’39 period ’39 Ju n e 3 0 /3 9 1940 1939
F t. Sm ith, A r k .. . — 16.2%
L ittle Rock, A rk. — 21.9
Louisville, K y. . . — 8.2
M em phis, T enn. . .— 26.8
P ine B luff, A rk .. — 20.5
Q uincy, 111............. — 9.8
St. L ouis, M o ... — 5.3
Springfield, Mo. . + 4.2
A ll O th e r C ities. — 1.1
8th F . R . D istric t — 10.7
+ 9.4%
+ 0.1
+ 8.0
— 1.7
— 5.5
+ 0.7
+ 5.5
+ 2 7 .5
+ 18.4
+ 4.7
+ 9.0%
+ 8.9
+ 6.7
+ 5.4
b 2.7
- 0..1
- 5.0
-13.0
-12.1
- 5.7
+ 4.5%
— 2.5
+ 3.4
+ 8.7
+ 2 3 .3
+ 0.3
+ 7.5
— 12.8
+ 13.7
+ 6.1
1.37
1.66
2.10
1.64
1.24
1.97
2.17
1.81
1.66
2.00
1.33
1.56
2.04
1.72
1.43
1.94
2.24
1.55
1.65
2.04
Percentage of accounts and notes receivable out
standing June 1, 1940, collected during June, by
c itie s:
In s ta llm e n t E xcl. In sta l.
A ccounts
A ccounts
F o rt S m ith .............. %
L ittle R o c k . .. 12.3
L ouisville . . . . 16.7
M em phis . . . . 22.4
37.4%
35.2
56.8
41.0
In sta llm e n t E xcl. In s ta l.
A ccounts
A ccounts
Q uincy ............................%
St. L o u is .............. 18.1
O th e r C i t i e s . .. . 21.5
8th F . R. D istric t 17.9
50.7%
56.4
46.2
50.7
Specialty Stores — June results in m en’s furnish
ings and boot and shoe lines are shown in the
following ta b le :
Stocks
Stock
___________ N et Sales___________ on H a n d
Ju n e, 1940
6 mos. ’40 Ju n e 30.,’40
com pared w ith
to sam e
comp, w ith
M ay ,’40 J u n e ,’39 p eriod *39 June 3 0 /3 9
M en ’s F u rn ish in g s + 1 0 .0 % + 1 1 .9 %
B oots and S hoes. — 5.0
+ 5.9
+
+
5.2%
2.2
+ 6.7%
— 4.6
T u rn o v er
Jan . 1, to
Ju n e 30,
1940 1939
1.28
3.70
1.37
3.72
Percentage of accounts and notes receivable out
standing June 1, 1940, collected during Ju n e:
M en ’s F u r n is h in g s ................ 35.7 %
B oots a n d S h o es........................40.5%
M IN IN G A N D O IL
Coal — Stim ulated by the high rate of industrial
activity and a disposition on the part of m any con
sumer groups to build up inventories, production of
bitum inous coal in the U nited States in June de
clined in considerably less than the seasonal amount
from May, and was m easurably greater than a year
ago. A t mines in this general area, June output was
8.7 per cent less than in May and 27.4 per cent in
excess of the June, 1939, tonnage. For the first six
Page 3
m onths this year cum ulative tonnage was larger by
23.9 per cent than in the first half of 1939. Accord
ing to the Bitum inous Coal Division of the U. S.
D epartm ent of the Interior, soft coal production in
the U nited States in June totaled 32,640,000 tons,
as against 35,468,000 tons in M ay and 27,959,00 tons
in June, 1939. In the first half of 1940 output was
220,325,000 tons, compared w ith 160,835,000 tons in
the same period a year earlier.
A t Illinois mines 2,583,448 tons were lifted in
June, as against 2,724,533 tons in M ay and 1,739,719
tons in June, 1939. T here were 84 mines in opera
tion in June, w ith 22,331 men on payrolls, com
paring w ith 86 active mines and 22,815 operatives
in May.
Petroleum — May output of crude oil in states of
the E ighth D istrict was 6.5 per cent more than in
April and 83.8 per cent greater than in May, 1939.
Cum ulative total for the first five m onths this year
was 108.7 per cent in excess of the corresponding
period in 1939. Stocks on M ay 31 were 1.2 per cent
and 12.2 per cent greater, respectively, than a m onth
and a year earlier. Detailed production and stocks
by states are given in the following ta b le :
________ Production
(I n thousands
of barrels)
M ay,
1940
A rkansas.............. 2,198
I llin o is ................ 13,833
In d ian a................
325
K e n tu c k y ............
445
T o ta ls................ 16,80.1
A pr., M ay,
19401939
Stocks
Cumulative
M ay 31, M ay 31,
1940 1939 1940
1939
2,114
1,719 10,545 8,00.0
12,911
6,849 63,551 26,632
30377
1,385
312
446 494
2,131 2,249
15,774
9,139 77,612 37,193
2,080 2,332
14,187 12,720
4,088 3,105
1,377 1,213
21,732 19,370
T R A N SP O R T A T IO N
Bolstered by an extraordinarily rapid movem ent
of the w inter w heat crop and continued heavy load
ings of miscellaneous freight and coal, volume of
freight traffic handled by railroads operating in this
district was well sustained during June and the first
half of July. The St. Louis T erm inal Railw ay Asso
ciation, which handles interchanges for 28 connect
ing lines, interchanged 81,103 loads in June, against
78,639 loads in M ay and 77,383 loads in June, 1939.
D uring the first nine days of Ju ly the interchange
am ounted to 20,957 loads, com paring w ith 23,286
loads during the like interval in June and 22,125
loads during the first nine days of July, 1939. In the
first half of 1940 a total of 484,618 loads was inter
changed, an increase of 2.9 per cent over the first
six m onths of 1939.
For the entire country loadings of revenue freight
for the first 27 weeks this year, or to July 6, totaled
17,543,296 cars, as against 15,818,952 cars for the
corresponding period in 1939 and 14,731,613 cars in
1938. Estim ated tonnage of the Federal Barge Line
betw een St. Louis and New O rleans in June was
207,000 tons, which compares w ith 245,728 tons in
Page4
M ay and 144,974 tons in June, 1939. Cum ulative
tonnage for the first six m onths this year was 936,856 tons, against 824,786 tons in the first half of 1939.
A G R IC U L T U R E
Combined receipts from the sale of principal farm
products and Government benefit paym ents to farm
ers in states including the E ighth D istrict during the
period January-M ay, 1938, 1939 and 1940, and dur
ing May, 1939 and 1940, are given in the following
ta b le :
(Tn
o ?d o U a * )
M ay
194Q~---------1939*
I n d ia n a ................... $24,011
Illin o is.....................
46,212
M issouri...................
21,089
K entu ck y................
7,968
T e n n e ss e e ..............
9,067
M ississip p i..............
5,705
A r k a n s a s ..............
6,461
T o ta ls................ 120,513
$21,262
39,984
20,886
9,067
9,319
5,665
7,792
113,975
Cum ulative for 5 m onths
" l9 4 0 " -------- 1939---------- 1938
$115,770
232,426
100,714
68,192
51,129
45,862
41,656
655,749
$101,845
208,135
91,332
62,699
49,751
48,193
35,264
597,219
$102,168
198,557
83,895
78,721
54,265
48,659
39,267
605,532
F arm ing Conditions — E ighth D istrict w eather
conditions during June and the first half of July
were unusually erratic. In the north there was a
general deficiency of m oisture, while in the south
ern tiers of the district, notably in M ississippi and
A rkansas, precipitation was excessive and tem per
atures unseasonably low, resulting in heavy damage
to grow ing crops. Taken as a whole, however, crop
prospects in the area, as reflected in the July 1 re
ports of the U. S. D epartm ent of A griculture and
the agricultural departm ents of the several states,
are good, w ith estim ated yields of m any im portant
productions above a year ago and average. Feed
and food crops will be abundant, and the same is
true of cotton, tobacco and other crops, particularly
when taken in conjunction w ith liberal carryovers
from the preceding season. Present indications are
th a t output of the various crops will give a well
balanced total and perm it of utilization of the re
serves on hand and add a little to farm stocks, other
than hay.
The supply of labor in rural areas was reported by
the Governm ent as 88.4 per cent of norm al on July
1, compared w ith 92.0 per cent in A pril and 89.6 per
cent a year ago. T he w age index as of Ju ly 1 was
three points above a year earlier. Prices of farm
products declined m oderately in m id-June, but re
covered som ew hat in the first week of July. The
farm products group of the Bureau of Labor Statis
tics' index stood at 66.7 per cent of the 1926 average
on July 6, an increase of 2 points over the preceding
week and com paring w ith 64.1 per cent on July 8
last year.
Corn — Production of corn in the E ighth D istrict
this year, according to the July 1 forecast of the
U. S. D epartm ent of A griculture, is placed at 320,565,000 bushels, as against 342,860,000 bushels har-
vested in 1939 and the 17-year (1923-1939) average
of 331,104,000 bushels. As of July 1 condition of the
crop was generally high, but since th at tim e pros
pects as a whole have deteriorated, due in some
sections to lack of rains and elsewhere because of
excessive precipitation. Stocks of old corn on farm s
are am ong the largest of record, the estim ate for
states of this district on July 1 being 297,233,000
bushels, against 315,780,000 bushels in 1939 and the
10-year (1929-1938) average of 158,093,000 bushels.
Cotton— In its report as of July 1, the U. S. De
partm ent of A griculture estim ates the combined
area of cotton under cultivation in states including
the E ighth D istrict at 5,992,000 acres, practically the
same as the acreage under cultivation on the same
date a year earlier, bu t 22.2 per cent below the
7,704,000 acre average of the 10-year (1929-1938)
period. T here were slight increases over last year in
Tennessee and M issouri, while A rkansas and M issis
sippi, the m ost im portant producing states, showed
no variation from the July 1, 1939, estimate.
W eather conditions have been unusually mixed
.over the territory, w ith the result th a t reports rela
tive to the condition of the grow ing crop vary
widely. H eavy rains in the M ississippi D elta and
over the southern tiers of counties arrested cultiva
tion and w rought substantial damage in the low
lands. M any fertile farm s were flooded and cotton,
corn and other crops destroyed. Elsewhere, how
ever, the crop is reported m aking excellent progress,
w ith stands good and fields well cultivated. Quite
generally, as of m id-July, the crop was from ten
days to two weeks late.
Prices of raw cotton declined in late June and
early July from the high point reached in the second
week of June, but throughout the period averaged
considerably higher than a year ago. In the St.
Louis m arket the m iddling grade ranged from 10.50c
to 10.85c per pound betw een June 15 and July 15,
closing at 10.50c on the latter date, which compares
w ith 11.20c on June 15 and 8.80c on July 15, 1939.
Combined receipts at A rkansas and M issouri com
presses from A ugust 1,1939, to July 12, 1940, totaled
1,830,416 bales, as against 1,580,102 bales for the
same period a year earlier. Shipm ents during the
same interval were 2,229,678 bales against 954,067
bales a year ago. Stocks as of July 12 am ounted to
956,262 bales, com pared w ith 1,455,217 bales on the
corresponding date in 1939.
Fruits and V egetables— In states including the
E ighth D istrict the peach crop is estim ated by the
U. S. D epartm ent of A griculture in its July 1 report
at only 3,667,000 bushels, as against 8,999,000
bushels in 1939 and the 10-year (1929-1938) average
of 6,985,000 b u sh e ls;p e a rs,2,393,000bushels,against
2.630.000 bushels last year and 10-year average of
2.093.000 b u sh els; grapes, 35,830 tons, against 39,580
tons in 1939 and 10-year average of 33,816 to n s ;
sweetpotatoes, 18,325,000 bushels, against 16,451,000
bushels in 1939 and 10-year average of 19,050,000
bushels. Despite injury to tom atoes from floods in
the south, production is estim ated to be about 10 per
cent greater than a year ago and 25 per cent above
average. In the district proper production of white
potatoes is estim ated at 13,845,000 bushels, against
12.048.000 bushels harvested last year and the 17year (1923-1939) average of 13,446,000 bushels.
Livestock — U nder generally favorable w eather,
abundant feed and forage and adequate w ater sup
plies, the condition of livestock generally through
out the district underw ent further im provem ent
during the late spring and early summer. The move
m ent of meat anim als to m arket was well sustained,
combined receipts of cattle, sheep and hogs in June
being slightly larger than in May, and m easurably
higher than in June, 1939. H og prices moved sharply
upward in the first week of July, reaching the high
est levels since last fall. H eavy receipts, occasioned
by the upturn, resulted in a w eakening of the m ar
ket later in the m onth.
The condition of pastures improved and pros
pects for hay crops are prom ising. Indicated pro
duction of tam e hay in the E ighth D istrict as of
July 1 was 7,867,000 tons, against 7,643,000 tons
harvested in 1939 and the 17-year (1923-1939) aver
age of 6,585,000 tons.
Receipts and shipm ents at St. Louis as reported
by the National Stock Yards were as follows:
_________ Receipts________
June,
1940
M ay,
1940
June,
1939
Cattle and C alves......... 105,047 99,891 97,587
H ogs ................................265,043 282,500 20,9,012
Horses and M u le s ....
1,679
1,333
1,889
Sheep ................................122,160 108,593 109,342
______ Shipments*______
June,
1940
M ay,
1940
June,
1939
47,352
87,504
1,196
53,812
41,934 37,991
91,100 59,309
1,259
1,732
57,573 36,473
T o ta ls........................... 493,929 492,317 417,830 189,864 191,866 135,505
^Includes only stock shipped from yards for slaughter in other market*
or to farms for feeding purposes.
Oats — This year's oats crop in the E ighth Dis
trict is estim ated by the U. S. D epartm ent of A gri
culture at 49,654,000 bushels, which compares with
46.847.000 bushels harvested in 1939 and the 17-year
(1923-1939) average of 49,868,000 bushels. In states
including this district stocks of old oats on farms
as of July 1 totaled 18,748,000 bushels, as against
29.368.000 bushels a year earlier, and the 10-year
(1929-1938) July average of 27,110,000 bushels.
Tobacco — In both the eastern and w estern dark
fired districts, acreage of tobacco is about the same
as a year ago. T h at part of the crop which was
transplanted early is reported well advanced, but
Page 5
iate set fields are less favorably conditioned owing to
unseasonable w eather and plant insects. Intended
acreage in the Green River and stem ming district
had been set by July 10, and the crop is developing
well. Reports relative to the one sucker crop are in
the main favorable, with acreage somewhat reduced
from a year ago.
W inter W heat — Prospects for w inter wheat im
proved substantially from May to June. The U. S.
D epartm ent of A griculture’s estimate as of July 1
places E ighth D istrict production at 55,380,000
bushels, which compares w ith 57,927,000 bushels
harvested in 1939 and the 17-year (1923-1939) aver
age of 53,968,000 bushels. U nder favorable weather
conditions harvesting and threshing have progres
sed rapidly. E arly threshing returns tend to confirm
the official estim ate as to quantity and indicate a
considerable portion of high quality grain in the
total crop. R eports generally from the principal
w heat grow ing sections indicate that farmers will
place a large part of their grain in the Government
71-cent loan. Reserve stocks of wheat on farms in
states of the district on July 1 totaled 3,642,000
bushels, against 6,228,000 bushels a year ago, and
the 10-year (1929-1938) average of 5,552,000 bushels.
COM M O D ITY PRICES
M id dling C otton p er lb.
H ogs on H oof . .p e rc w t.
♦N om inal q uotations.
Close
J u ly 15, 1940
Ju ly 15, 1939
H ig h
L ow
$ .7 6 l/ 2
.767/8
•77 H
.87
.7554
$ .69y2
.70,54
.71H
.7654
.74
.eoy4
.58
.5 5 ^
.5 7*4
.5434
.51J4
.593/8
.56
.51*4
.403/4
.42
A27/g
.3154
.29
.29V2
.2 8 ^
.2 6 ^
.27*4
.2954
.26 7/s
-27 *4
.26*4
.2 6 H
.28
5.55
4.95
.1085
6.92
4.60
4.50.
.1050
5.03
4.60 @ 5.30
4.50@ 4.70
.1050
6.37
4.00@ 4.5a
5.25@5.55
.0880
6.85
$
B U IL D IN G
The dollar value of perm its issued for new con
struction in the five largest cities of the district in
June was 19.1 per cent less than in May and 15.9
per cent greater than in June, 1939. According to
statistics compiled by the F. W. Dodge Corporation,
construction contracts let in the E ighth D istrict in
June am ounted to $18,202,000, which compares with
revised figures of $20,379,000 in May and $18,509,000
in June, 1939. Building figures for June follow:
______N ew C o n struction
(C ost in
th o u san d s)
P erm its
1940 1939
18
33
94
376
287
St. L o u is ............
Ju n e T o ta ls . . . .
808
M ay
“
. . . . 1,020
A pril “
. . . . 1,129
E v a n s v ille .. . .
L ittle R o c k . . .
Louisville . . . .
Range of prices in the St. Louis m arket between
June 15 and July 15, 1940, w ith closing quotations
on the latter date and on July 15, 1939, follow s:
W heat
♦ J u ly .....................per bu.
*S ep t....................... “
♦D ec.......................
“
N o. 2 red w in ter “
N o. 2 h a rd “
“
C orn
* J u ly ....................... “
♦ S ep t....................... “
♦D ec.......................
“
O ats
* J u ly ....................... “
♦ S ep t....................... “
♦D ec.......................
“
F lo u r
Soft p a t e n t . . . . p erb b l.
per gallon to their product to partly counterbalance
increased costs of handling under present condi
tions. This increase by distillers, coupled w ith the
additional tax of 75c per gallon, is expected to result
in a substantial increase in retail prices.
Distilled spirits of various periods of production
in K entucky bonded warehouses as of April 30,
1940, the latest date for which complete statistics
are available, totaled 4,071,353 barrels, an increase
of 83,135 barrels over the 3,988,218 barrels in these
warehouses on A ugust 31, 1939, the end of the
fiscal year.
.6954
.7054
.713/4
.7654
.7454
$
.625/s
.6 3 #
.64*4
.69/2
.68
36
35
116
330
241
758
784
714
R epairs, etc.
Cost
1940
1939
$ 122
89
306
509
840
1,866
2,307
2,111
P erm its
1940 1939
$
98
131
306
482
593
1,610,
1,454
1,782
108
65
53
207
195
628
734
786
126
153
42
209
218
748
816
704
1940
C ost
1939
$ 43
22
52
180
263
560
403
507
$ 30
49
18
164
167
428
503
481
C O N SU M PT IO N OF EL EC TR IC IT Y
Public utilities companies in six large cities of the
district report consumption of electric current by
selected industrial custom ers in June as being 3.2
per cent more than in May and 5.7 per cent greater
than in June, 1939. Detailed figures follow:
(K .W .H .
in tho u s.)
M ay,
No. of J u n e,
C usto m 1940
1940
ers
K .W .H . K .W .H .
...
L ittle R o ck . ,. . .
40
35
. . . 31
P in e B luff , . . 20
. . 227
. . 435
4,817
2,182
10,259
2,905
5 77
28,915
49,655
Ju n e,
June, 1940
1939
com pared w ith
K .W .H ,. M ay, 1940 Ju n e, 1939
4,769
1,958
10,189
2,899
399
27,906
48,120
4,570
2,309
8,871
2,288
487
28,455
46,980
+ 5.4%
— 5.5
+ 15.6
+ 2 7 .0
+ 18.5
+ 1.6
+ 5.7
b 1.0%
-11.4
- 0.7
+ 0.2
+ 44.6
+ 3.6
+ 3.2
W H ISK E Y
P O ST A L R EC EIPT S
Reflecting the usual seasonal trend, only 12 of the 60
distilleries in Kentucky are in operation, compared
with 26 a m onth earlier. T he principal recent devel
opment in the industry was the heavily increased
purchasing by wholesaling and jobbing interests in
anticipation of added tax of 75c per gallon effective
July 1. U nder the law, retailers are allowed an
exemption of 100 gallons, which was a further incen
tive for buying. According to trade reports several
large distillers have added a charge of 50c to 75c
R eturns from the five largest cities of the district
show an increase of 1.5 per cent in combined postal
receipts for the second quarter this year over the
same period in 1939, and of 0.04 per cent over the
first quarter of 1940. Detailed figures follow :
Page 6
Q u a rte r ending : Ju n e 30,
1940
M arch 31,
1940
$ 188,789
221,839
739,890
681,467
2,746,015
4,578,000
$ 186,430
239,748
728,273
695,287
2,726,300
4,576,038
Ju n e 30, Comp. 2nd Q trs.
1939
1940 and 1939
$
178,941
244,701
720,030
676,685
2,687,797
4,508,154
+
—
+
+
+
+
5.5%
9.3
2.8
0.7
2.2
1.5
B A N K IN G A N D F IN A N C E
As indicated by reports of banks in both the large'
cities and country, demand for credit in the E ighth
D istrict declined m oderately during the past th irty
days as contrasted w ith the sim ilar period imme
diately preceding. Ow ing to lateness of crops gen
erally, requirem ents to finance agricultural opera
tions, other than the m ovem ent of w inter wheat,
are less in evidence than is usually the case at this
tim e of year. Borrow ing by m ercantile and m anu
facturing interests is on a conservative basis, and
with but few exceptions com m itm ents to finance fall
inventories are below seasonal expectations. Cur
rent liquidation in the large urban centers is re
ported in larger volume than new loans and renew
als. In the principal w inter w heat sections farm ers
are placing a large part of their grain in the Govern
m ent loan. Bankers dollar acceptances outstanding
as of June 29 in this district totaled $318,000, un
changed from a m onth earlier and com paring with
$462,000 on June 30, 1939. In terest rates rem ained
at, or about the low levels which have prevailed in
recent months.
Member Banks — Between June 12 and July 10,
total loans of weekly reporting m em ber banks in the
principal cities declined 1.2 per cent, but at the end
of the period were still 2.4 per cent greater than a
year ago. T otal investm ents continued the steady
decline which began in late May, and as of July 10
recorded a new low for the year and were 5.4 per
cent less than on the corresponding date in 1939.
Gross deposits receded sharply in early June, but
recovered m ost of the loss in the first days of July.
Reserve balances at $249,285,000 on July 10 were at
an all tim e high.
Statem ent of the principal resource and liability
items of the reporting member banks follow s:
Change from
10.
Tui 12, July 12,
July 10,
June
1940
1940
1939
(I n thousands of dollars)
$178,245
- 3,904
— 7,884
8,613
647
+ 4,998
Open market paper................................................
3,402
56
— 1,900
Loans to brokers and dealers..............................
—
628
65
Other loans to purchase and carry securities. 12,749
54,312
+ 4,428
b
613
— 1,477
1,158
149
Loans to banks.
61,840
168
+ 9,888
Other loans
10,899
-10,137
+ 3,034
38,300 + 5,523
— 10,250,
Treasury n o tes.........................................................
— 19,035
-18,137
U . S. b on ds................ ............................................... 134,730
+ 1,529
Obligations guaranteed by U . S. Governm ent. 68,301 +
81
- 1,563
+ 4,380
Other securities......... ...................... ...................... 106,613
25
+ 3 5 ,2 5 0
Balances with dom estic ban ks........................... 185,485
482,632
+ 2 8 ,6 8 4
+
4,416
Demand deposits— adjusted*..............................
—
316
275
Time dep osits........................................................... 189,872
- 2,245
— 7,427
U . S. Government dep osits................................., 14,509
+ 59,567
361,426
378
B orrow ings....................... .............................
*Other than inter-bank and Government deposits, less cash items on
hand or in process of collection.
Above figures are for 24 member banks in St. Louis, Louisville, M em
phis, L ittle R ock and Evansville. Their resources comprise approximately
63.3% of the resources o*f all member banks in this district.
A ggregate am ount of savings deposits held by
selected m ember banks on July 3 was slightly less
than a m onth earlier and 1.0 per cent greater than
on the corresponding date last year.
Federal Reserve Operations — The volume of the
m ajor operations of the Federal Reserve Bank of St.
Louis, during June, 1940, is indicated below :
(Incl. Louisville, Memphis, L ittle Rock branches)
Checks (cash item s) handled................ ................
Collections (non-cash item s) handled................
Transfers of funds.................................. ....................
Currency received and counted..............................
Coin received and counted.......................................
Rediscounts, advances and com m itm ents.........
N ew issues, redemptions, and exchanges of
securities as fiscal agent of U . S. Govt., etc.
Bills and securities in custody— coupons clipped
Pieces
A mounts
5,197,125 $1,249,299,911
26,760,638
150,790
366,20.1,265
4,393
8,195,512
27,898,948
961,142
9,393,725
19
1,554,000
48,419
22,960
147,269,160
Changes in the principal assets and liabilities of
this bank appear in the following table :
Change from
1940
(I n thousands of dollars)
Industrial advances under Sec. 13b............$»
20
Others advances and rediscounts.........
330
Bills bought (including participations)
U . S. securities.............................................
113,363
T otal earning a sse ts..............................
113,713
1940
—
55
+
144
455,718
368,959
197,570
+ 3 3 ,8 7 4
+ 30,933
+ 4,030
Industrial commitments under Sec. 1 3 b ..
Ratio of reserve to deposit
and F. R. N ote liabilities............................
+
+
64
153
350
+
180
80.4%
+
1.1%
1939
Hh
h
1
260
2
1,806
1,606
-
- 66,520
- 49,038
- 18,455
86
+
2.4%
Following are the rates of this bank for accom
modations under the Federal Reserve A ct:
Advances to banks, secured by direct obligations of
the United States, under paragraph 13 of Section 1 3 ..1
% per annum
Advances to member banks, under paragraph 8 of Sec
tion 13, secured by direct obligations of the U nited
States or by such Government guaranteed obliga
tions as are eligible for collateral thereunder................ 1 % per annum
Rediscounts and other advances to member banks
under Sections 13 and 13a....................................................... 154 % per annum
Advances to member banks under Section 10b................ 2 % per annum
Advances to individuals, firms, and corporations, other
than banks, secured by direct obligations of the
U nited States, under paragraph 13 of Section 1 3 .........
Rediscounts, purchases, and advances to member
banks, nonmember banks, and other financing insti
tutions, under Section 13b :
(a) On portion for which such institution is obligated 3J4% per annum
(b) On remaining portion...............................................
4 % per annum
Commitments, not exceeding 6 months, to member
banks, nonmember banks, and other financing insti
tutions, to rediscount, purchase, or make advances,
under Section 13b......................................................................... V i% flat
Advances to established industrial or commercial ( 4 % to
businesses under Section 13b................................................I 5 y2 % per annum
Since the last issue of this Review the following
banks have become members of the S ystem : The
Lake State Bank, Richland, I n d .; the Sandborn
Banking Company, Sandborn, Ind., and the Bank
of Orleans, Orleans, Ind.
Debits to Individual Accounts — The following
comparative table of debits to individual accounts
reflects spending trends in this d istric t:
June,
1940
(In thousands
of dollars)
5,592
10,684
1,332
37,351
6,944
6,982
41,801
9,749
32,339
170,715
5,983
O w ensboro,.. . .
4,272
M iss.
Mo. 632,912
“
2,151
“
16,357
Springfield,. . . .
Tenn. 126,888
El D orado,. . . .
Fort Smith, . . .
“
L ittle R ock,. . . . “
“
Pine Bluff,
Texarkana, Ark. -Tex.
E .St.L .-N at.S.Y .,.111.
Q uincy,.............
E vansville,.........
(Completed July 23, 1940)
..... 1, ,112,052
May,
1940
$
5,575
11,506
1,412
41,083
6,547
7,164
39,569
9,353
34,622
163,959
5,874
4,829
722,603
2,249
17,338
128,509
1,202,192
June,
1939
$
5,438
10,060
1,486
41,291
6,801
6,340
38,274
8,261
30,536
158,624
7,065
4,044
586,740
2,0.35
14,576
166,281
1,087,852
June,’40 comp, with
M ay,’40 June,*39
+ 0.3%
— 7.1
— 5.7
— 9.1
+ 6.1
— 2.5
+ 5.6
+ 4.2
— 6.6
+ 4.1
+ 1.9
— 11.5
— 12.4
— 4.4
— 5.7
— 1.3
+ 2.8%
+ 6.2
— 10.4
— 9.5
+ 2.1
+ 10.1
+ 9.2
+ 1 8 .0
+ 5.9
+ 7.6
— 15.3
+ 5.6
+ 7.9
+ 5.7
+ 12.2
— 23.7
— 7.5
+
2.2
Page 7
N A TIO N A L SUMMARY O F B U S IN E S S CO ND ITIO NS
B Y B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M
INDUSTRIAL
Volume of industrial production increased rapidly during June and rose
somewhat further in the first half of July. Distribution of commodities
through retail and wholesale markets and by rail continued active.
PRODUCTION
Index of physical volum e of production, adjusted for sea
sonal variation, 1923-1925 average = 100. B y months,
January, 1934, to June, 1940. L atest figure 114.
DEPARTMENT STORE SALES AND STOCKS
Production — The Board’s seasonally adjusted index of industrial pro
duction advanced from, 106 in May to 114 in June. In that month, as in May,
increases in activity were most marked in the iron and steel and textile
industries where declines earlier in the year had been greatest. Steel ingot
‘production rose from 60 per cent of capacity at the beginning of May to 87
per cent in the latter part of June and was maintained at about that level in
the first three weeks of July. Production of coke and pig iron showed sim
ilar sharp increases and iron ore shipments down the Lakes were at near
capacity levels. Demand for steel was general as most domestic steel-con
suming industries wrere operating at high rates. Exports of steel, which had
declined in April, rose to earlier high levels in May and June, amounting to
about 10 per cent of steel-producing capacity. Automobile production, which
had begun to decline in May, continued to decrease in June and the first half
of July reflecting in large part seasonal influences. Retail sales of automo
biles were in large volume and dealers’ stocks of new and used cars declined
from the high levels prevailing earlier.
In the textile industry there was a further sharp advance in activity at
woolen mills, and at cotton mills output was reduced less than seasonally.
Rayon production was maintained at earlier high levels while at silk mills
activity remained near the unusually low rate reached in May. Coal produc
tion continued in large volume during June, but output of crude petroleum
declined in the latter part of the month, owing to reduced production in
Texas fields.
Value of construction contract awards showed little change from May to
June, according to F. W. Dodge Corporation figures for 37 eastern States.
Awards for private residential building decreased more than seasonally, fol
lowing a sharp rise in May, and contracts for private non-residential building
also declined. Contracts for public construction increased further in June,
owing in part to expansion in the construction of Army and Navy air bases.
Indexes of value of sales and stocks, adjusted for seasonal
variation, 1923-1925 average = 100. B y months, January,
1934, to June, 1940.
W H O LESALE PRICES
Commodity Prices — Prices of a number of industrial materials, partic
ularly steel scrap, copper, rubber, and silk, declined from the middle of June
to the middle of July. Wheat prices also showed decreases in this period,
while prices of livestock and products advanced owing partly to seasonal
influences.
FOOC
^ ---------- .
THER
L
MODITIES
k
\
$
far»
PRODU iDTS
s
w
1934
1935
1936
1937
1938
1939
1940
Federal Reserve groupings of Bureau of Labor Statistics’
data. Thursday figures, January 4, 1934, to July 11, 1940.
M O NEY
RATES
IN
NEW
YORK
CITY
PER CENT
PER CENT
~
i V
\
j y
...
“
TREAS,URY BONDS
( 12 YEiiRS AND OVER )
>
■ ~V vO U
\
ft
k A
\ t * \ .
1
RESERVE BANK
DISCOUNT RATE .
»
'X
1 A
A
A ■
V V *J ^
IDV MOTC C
(3-5 YEARS)
\
1
f\A T
TREAJJURY B IL L S
issues) i t
- w
1934
1935
'W
1936
f
v
_
k
V
s
u
A
-/s_____
V
1937
1938
1939
1940
For weeks ending January 6, 1934, to July 13, 1940.
Page 8
Distribution — Department store sales in June were maintained at the
May level, although usually there is a considerable decline, and the Board’s
seasonally adjusted index advanced to 93 as compared with 87 in May and a
level of about 89 earlier in the year. Sales at variety stores showed little
change from May to June, continuing at the advanced level that has prevailed
since the beginning of the year. In the early part of July department store
sales declined seasonally from the June level. Freight-car loadings increased
further in June. Shipments of coal and miscellaneous merchandise continued
to expand and loadings of coke, which usually decline at this season, showed
a substantial rise.
4
Agriculture — Production of major crops this season, according to the
July 1 report of the Department of Agriculture, may be slightly lower than
last season. Tobacco production will be sharply reduced from last year,
when the crop was unusually large. Domestic supplies of wheat and other
field crops as well as of vegetables and fruit are expected to show little
change from last season. Indicated hog production this year will be about
10 per cent smaller than last year.
Bank Credit — Total loans and investments at reporting member banks
in 101 leading cities increased during the five weeks ending July 10, chiefly
as a result of increases in holdings of short-term United States Government
obligations and in commercial loans. Holdings of United States Government
bonds and loans to security brokers and dealers declined.
The monetary gold stock increased by $885,000,000 in this five-week period,
the largest gold acquisition for any corresponding period on record. This
inflow of gold was reflected in a growth of $310,000,000 in foreign bank bal
ances with the Federal Reserve Banks and in increased deposits and reserves
of member banks. On July 10, excess reserves of member banks amounted
to $6,833,000,000.
Government Security Market — Prices of Government securities, which
had advanced sharply in June, showed further increases after July 8 when
the Treasury announced a new bond issue for cash subscription. Between
June 10 and July 15 the price of the 1960-65 bonds rose about 3 points, and
the yield on this issue declined from 2.52 per cent to 2.34 per cent as com
pared with 2.26 per cent at the year’s peak in prices on April 2.
@FedFRASER