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MONTHLY REVIEW O f Agricultural, Industrial, Trade and Financial Conditions in the Eighth Federal Reserve District Released for Publication On and After the Afternoon of July 31, 1933 JOH N S. W O O D , Chairm an and Federal R eserve A g en t FEDERAL RESERVE O N T IN U IN G the notable improvement of the two preceding months, commerce and indus try in the Eighth Federal Reserve District moved forward with increased momentum during June and the first half of July. In virtually all lines investigated by this bank, substantial gains were recorded in production and distribution of commodi ties. The increases in many important classifications reversed the ordinary seasonal trends. Despite one of the hottest Junes on record in this general region, there was no slowing down in activities at iron and steel plants, lumber mills, glass and fire clay manu factories and in some other industries which sus pend or heavily curtail operations at this time of year. A t the middle of July the rate at iron and steel working plants was at approximately 35 per cent of capacity, as compared with 30 per cent a month earlier and 25 per cent in May. Estimated melt of pig iron and steel scrap in June was 8 per cent great er than in May and 14 per cent larger than in June, 1932. Production of bituminous coal in all fields of the district increased in June over May and was in substantially larger volume than in June last year. Reflecting a sharply increased demand for staves and other descriptions of lumber, additional lumber mills in the south resumed operations, some after an idleness of more than two years. Activities in the building industry and the movement of building materials generally exhibited noticeable betterment from May to June. In practically all reporting in dustries, both employment and payrolls expanded further and were the largest since last summer. Excepting drugs and chemicals, which showed practically no change, all wholesaling and jobbing lines investigated reported substantial gains in June sales over the same month in 1932. June volume also exceeded that of the preceding month in all groups but boots and shoes, apparel and furniture. In these three lines decreases from May to June were due to unusally large sales in May, which, in turn, were partly accounted for by commitments deferred from earlier months in the year. W hile the C C. M . S T E W A R T , Secretary and Ass*t F ed eral R eserve A g en t BANK OF ST* J. V IO N PA P IN , Statistician LOUIS June hot spell had a stimulating effect in the move ment of seasonable merchandise through retail channels, wholesale trade made a relatively better showing than ultimate distribution. Except in the case of beverages, summer apparel, certain electrical supplies and other typically seasonal lines, available retail statistics for June do not reflect marked ex pansion, either as contrasted with the preceding month or the corresponding period a year ago. In the agricultural situation in this district, the principal development was the record high tempera tures and drought in June, which resulted in serious damage to growing crops. Prospects for yileds of the principal productions, except winter wheat, deteriorated sharply between June 1 and July 1, according to the U. S. Department of Agriculture’s report as of the latter date. The clear, dry weather of June was favorable for harvesting and threshing wheat, and the movement of new grain to market has been in considerable volume. Adverse effects of the short crops on farm incomes is offset by the marked appreciation in values during June and the first half of July, particularly in the case of wheat, corn, oats and cotton. During that period in the St. Louis market, No. 2 red winter wheat advanced from 74c to $1.18 per bushel; No. 2 white corn from 45c to 66J^c per bushel; No. 2 white oats from 2 8 ^ c to 48c per bushel, and middling cotton from 8.55c to 11.40c per pound. On July 16, 1932, No. 2 red winter wheat closed at 47c per bushel, No. 2 white corn at 32c per bushel, No. 2 white oats at 17c per bushel, and middling cotton at 5.35c per pound. Prices of live stock failed to advance with other farm products, and in early July were below those of a year ago. Retail trade in June, as reflected in sales of de partment stores in the principal cities of the district, showed practically no change from the same month in 1932 and a decrease of 6 per cent below the May total this year, the decline in the month-to-month comparison being of about the usual seasonal size; for the first half of 1933, the volume was 15 per cent smaller than during the comparable period in 1932. Combined sales of all wholesaling and jo b bing firms reporting were 55 per cent greater in June than a year earlier, and for the first six months this year the total was 12 per cent larger than for the first half o f 1932. T h e dollar value of building permits issued for new construction in the five largest cities of the district in June was 156 per cent greater than in May, and 57 per cent in excess of June last year; for the first half of 1933 the aggre gate was 44 per cent less than the comparable period last year. Construction contracts let in the Eighth District in June were 2.5 per cent less than in May and 40.2 per cent more than the June, 1932 aggregate; cumulative total for the first six months this year was 39.5 per cent less than in the first half of 1932. Debits to checking accounts in June were slightly smaller than a year ago, but 7.3 per cent greater than the M ay total this year; cumu lative total for the first half of 1933 showed a de crease o f 28 per cent under the first six months of 1932. A ccording to officials o f railroads operating in this district, the recent gains in the volume of freight traffic handled were carried further and at a sharply accelerated pace through June and the first half of July. For the country as a whole loadings of rev enue freight for the first 26 weeks this year, or to July 1, totaled 13,241,718 cars, against 14,107,820 cars for the corresponding period in 1932 and 19,020,485 cars in 1931. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 148,366 loads in June, the largest number since March, 1932, and comparing with 136,659 loads in M ay and 135,115 loads in June, 1932. D uring the first nine days of July the interchange amounted to 40,960 loads, against 42,852 loads during the corresponding period in June, and 33,070 loads during the first nine days of July, 1932. Passenger traffic o f the reporting roads in June decreased 16 per cent under the same month last year, the smallest decline recorded for any month in more than tw o years. Estimated ton nage of the Federal Barge Line, between St. Louis and New Orleans, in June was 109,000 tons, against 113,029 tons in May, and 108,002 tons in June, 1932. Considerable improvement as compared with earlier months this year was reflected in reports relative to collections. Jobbing and wholesaling interests in the principal distributing centers report early July settlements above expectations, with more of their customers taking advantage of cash discounts than has been the case in a number of months. Retailers in the large cities report steady betterment in collections as a whole. Questionnaires addressed to representative interests in the various lines scattered through the district showed the fol low ing results: Excellent June, 1933................... 3.7% May, 1933................... 3.5 June, 1932.................. : .0 Good Fair Poor 25.9% 14.6 18.5 59.3% 64.4 61.2 11.1% 17.5 20.3 Commercial failures in the Eighth Federal Re serve District in June, according to Dun’s, num bered 60, involving liabilities of $1,049,752, against 59 defaults in M ay with liabilities of $1,414,285 and 132 insolvencies for a total of $1,987,322 in June, 1932. M oney in circulation in the United States on July 12 was $5,667,000,000, which compares with $5,723,000,000 on June 14, and an average daily circulation of $5,530,000,000 in June, 1932. M AN U FA CTU R IN G A N D W H O L E S A L IN G Boots and Shoes — June sales of the reporting interests were more than twice as large as for the same month in 1932 and the heaviest for any June since 1929. The total showed a decrease of 47 per cent under that of the preceding month this year. Stocks on July 1 were 29 per cent greater than a month earlier, and one-fourth smaller than on July 1, 1932. The decrease in the month-to-month com parison is seasonal in character, but somewhat larger than the average in recent years, due chiefly to the exceptionally heavy volume of business done in May. A n increase in prices amounting to approxi mately 6 per cent became effective in the second week in July. Factory operations were at from 98 per cent to 100 per cent of capacity. Clothing — A s contrasted with a year ago, June sales of the reporting firms showed an increase of 3.5 per cent, and the total was approximately 79 per cent below that of M ay this year. Orders of apparel for fall delivery as of July 1 were in con siderably larger volume than a year ago. Steady improvement is reported in demand for work clothes. The trend of prices was upward in sym pathy with the upturn in cotton, w ool and other fabrics. Drugs and Chemicals — Further improvement was noted in this classification, June sales being 3 per cent larger than in May, and only slightly below the total of a year ago. Stocks on July were smaller by 2 per cent and 17 per cent, respectively, than a month and a year earlier. Moderate expansion in purchasing of heavy drugs and chemicals by the general manufacturing trade was noted, and the movement of seasonal goods was stimulated by the warm weather in June and early July. D ry Goods — Im provem ent in business in this classification, noted during the three months imme diately preceding, continued during June and the first half of July. Contrary to the seasonal trend, June sales of the reporting interests showed an increase o f 5.4 per cent as compared with M ay, and the total was 50 per cent greater than in June, 1932. Inventories increased 30 per cent from June 1 to July 1, and on the latest date were 45 per cent great er than a year ago. Retailers generally were disposed to cover their requirements in anticipation of higher prices. E lectrical Supplies — Demand for virtually all lines of electrical supplies has undergone marked betterment during the past tw o months. The ex treme hot weather o f June assisted the movement of seasonal mercahndise, resulted in a fair volume of reordering of fans and other specialties. Refriger ation, radio and autom otive requirements have ex panded, and sales of pole and line hardware were the largest in a number of months. June sales of the reporting interests were 47 per cent larger than in June, 1932, and 39 per cent greater than in May this year. Stocks on July 1 were 3 per cent larger than a month earlier, and 19 per cent less than a year ago. F lo u r — Production at the twelve leading mills of the district in June totaled 261,346 barrels, against 287,567 barrels in May and 234,864 barrels in June, 1932. Greater activity in the flour industry as a whole was noted during the past thirty days than for more than tw o years. In anticipation of higher prices incident to the processing tax, retailers were endeavoring to get in supplies; purchasing by wholesalers and jobbers was also on a large scale. Prices were sharply higher, due both to the short wheat crop and the processing tax. This tax, which went into effect on July 8, amounts to approximate ly $1.35 per barrel on flour for domestic consump tion. F u rn itu re — Sales of the reporting firms in June were 89 per cent larger than for the same month in 1932, and showed a slight decline, seasonal in char acter, under the May aggregate this year. Stocks on July 1 were 20 and 18 per cent smaller, respec tively than a month and a year earlier. For the first time in many months, retailers were ordering to build up depleted stocks and assortments. T he trend of prices was upward. G roceries — Reversing the seasonal trend, sales of the reporting firms in June increased 8 per cent over the M ay total, and were 15 per cent greater than in June, 1932. Inventories continued to recede, stocks on July 1 being 1 per cent smaller than a month earlier and 12 per cent smaller than a year ago. In both the month-to-month and yearly sales comparisons increases were relatively greater in the rural areas and small towns than in the large centers of population. The trend o f prices was upward, with specific advances recorded on flour, sugar, potatoes and several other important commodities. H ard w are — June sales of the reporting firms showed an increase of 14 per cent over May, and of 21 per cent over the June, 1932, total. Stocks on July 1 were 9 per cent larger than a month earlier and 2 per cent smaller than on July 1, 1932. Im provement was noted in practically all lines, with builders' tools and hardware m oving in larger vol ume than for many months. Prices were very firm, with advances recorded on some lines. Iron and S tee l P roducts — In practically all sec tions of the iron and steel industry further expan sion in activities took place during the past thirty days. A s have been the case in the present recov ery started, miscellaneous requirements accounted for the major portion of tonnage placed, but there was also well defined betterment in purchasing by the principal consuming industries. In the imme diate past there has been som e slowing down in new ordering, but this was expected because of seasonal influences and the fact that requirements were large ly covered in the heavy buying movement of May and June. A t the first of June, backlogs of a m ajor ity of the reporting interests were the largest this year, and in some instances greater than at any time since 1931. Specifications against contracts made previous to the recent price advances are in large volume, and in the case of a number of impor tant mills and foundries, will assure the present rate of operations through August and part of Septem ber. W arehouse and jobbin g interests report June business the largest so far this year, and slightly in excess of the same month in 1932. Stove and heat ing apparatus manufacturers expanded their opera tions, both in response to actual orders for their products and for the purpose of making up stock. Releases by the automotive industry during June were in excess o f the preceding month. Makers of sheets, plates and other flat rolled materials report a substantial gain in new orders and specifications on material previously acquired. In the case of heavy materials, specifications were accelerated by the fact that August 1 was set by producers as the deadline on preferential prices. The general trend of prices continued upward, with specific ad vances recorded on a number of important com m odi ties, notably pig iron, wire products, steel pipe, heavy melting steel and other grades of iron and steel scrap. Purchasing of pig iron continued at the high rate of the preceding thirty days, and several blast furnace interests purveying to this district report sales during the first six months this year considerably in excess of the entire 1932 total. For the country as a whole, production of pig iron in June, according to the magazine “ Steel” , totaled 1,264,953 tons, the largest since August, 1931, and comparing with 892,326 tons in May and 626,015 tons in June, 1932. Steel ingot production in the United States in June was 2,597,517 tons, against 2,001,991 tons in May and 912,757 tons in June, 1932. AU T O M O B IL E S Combined passenger car, truck and taxicab production in the United States in June was 253,322 against 218,171 in May, and 183,092 in June, 1932. Distribution of automobiles in the Eighth D is trict during June, according to dealers reporting to this bank, showed a substantial increase over the preceding month, also over the total of June, 1932. In both comparisons increases were general through all classes of makes, but most pronounced in the field of cheap-priced vehicles. For the first time in many months, country dealers reported a decided improvement in business,both with respect to actual sales and prospects. Appreciation in values of farm products, notably cereals and cotton, has served to improve sentiment and purchasing power in the rural areas. Due to depressed conditions in agricul ture during the past three years, farmers have been obliged to make their old automobiles serve, with the result that extensive replacement requirements have developed, particularly in the cotton and grain areas. Demand for trucks of all descriptions also showed betterment in June as contrasted w ith a month and a year earlier. June sales of new passenger cars by the report ing dealers were 11 per cent larger than for the same month in 1932, and 39 per cent greater than the May total this year. Truck sales in June were 7 per cent and 10 per cent larger, respectively than a month and a year earlier. Purchasing by dealers from factories was on a larger scale than earlier in the year, as indi cated by an increase in stocks on hand of 6 per cent between June 1 and July 1. The total on the latest date, however, was still 12 per cent smaller than a year ago. Used car sales continued to expand, the June total being 12 per cent greater than in M ay and only about 7 per cent smaller than a year ago. Stocks of salable secondhand cars on July 1, were 12 per cent larger than a month earlier, and 15 per cent less than on July 1, 1932. A ccording to dealers re porting on that item, deferred payment sales in June constituted 44 per cent of their total sales, against 49 per cent in May and 49 per cent in June, 1932. 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 Net sales comparison Stocks on hand June, 1933 6 months ended June 30, 1933 comp, to comp, to June 30, 1933 to June, 1932 same period 1932 June 30, 1932 — 21.1% Evansville ..,.+ 3 1 .3 % — 11.1% Little Rock 7.5 — 14.1 — 19.3 Louisville .....— 6.3 — 17.4 — 35.5 — 19.2 Memphis ......— 1.8 — 15.8 ...+ 7.5 — 20.3 — 17.7 St. Louis...,,..+ 0.6 — 14.0 — 9.4 Springfield ..— 2.9 — 25.2 — 22.7 8th District. 0.8 — 15.0 — 15.6 Stock turnover Jan. 1, to June 30, 1933 1932 .63 .55 1.05 1.04 1.47 1.22 1.43 1.41 1.13 1.11 1.75 1.74 .63 .65 1.57 1.52 Retail Stores Net sales comparison Stocks on hand June, 1933 6 months ended June 30, 1933 comp, to June 30, 1933 to comp, to June, 1932 same period 1932 June 30, 1932 Men's Fur nishings ..,..— 12.2% Boots and ...— 5.3 Stock turnover Jan. :I, to June 30, 19 33 1932 — 14.3% — 16.3% 1.54 1.37 — 16.7 — 29.5 1.56 1.39 PO STAL RECEIPTS Returns from the five largest cities of the dis trict show an increase in combined postal receipts for the second quarter of the year, of 6.5 per cent as compared with the corresponding period in 1932 and an increase of 3 per cent as compared with the first three months this year. Detailed figures fo llo w : June 30, 1933 Evansville .....$ 136,219 Little Rock.... 148,486 Louisville ..... 586,831 Memphis ...... 447,551 St. Louis....... 2,396,873 Totals ........$3,715,960 For Quarter Ended __________ June 1933 Mar. 31, Dec. 31, June 30, comp, to 1932 1932 June, 1932 1933 $ 130,563 $ 139,826 $ 126,021 + 8.1% 179,505 142,472 4- 4.2 162,088 644,721 530,379 + 10.7 547,544 463,886 543,380 396,273 + 12.9 2,294,185 + 4.5 2,302,362 2,818,143 $3,606,443 $4,325,575 $3,489,330 + 6.5% BU ILD IN G The dollar value of permits isued for new con struction in the five largest cities of the district in June was 156.3 per cent more than in May, and 57.5 per cent more than the June, 1932 total. A ccording to statistics compiled by the F. W . D odge Corpor ation, construction contracts let in the Eighth Fed eral Reserve District in June amounted to $8,084,927, which compares with $8,296,191 in May and $5,768,424 in June, 1932. Production of portland cement for the country as a whole in June totaled 7,804,000 barrels against 6,262,000 barrels (revised figures) in May, and 7,921,000 barrels in June, 1932. Building figures for June follow : New Construction Permits *Cost 1933 1932 1932 1933 137 $ 19 $ 48 Evansville .. 103 12 3 8 12 Little Roc k 160 41 63 47 Louisville .. 125 111 67 86 Memphis .. 167 499 339 St. Louis, ... 172 $ 792 $ 503 !.. 420 504 309 411 .. 431 533 May 570 277 493 __ April .. 399*In thousands of dollars (000 omitted). Repairs, etc. *Cost Permits 1933 1932 1932 1933 $ 17 $ 23 50 87 10 23 56 57 84 36 30 48 28 64 123 124 192 118 123 211 526 664 780 452 513 707 $ 257 321 428 $269 204 305 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 10.6 per cent greater than in May and 8.3 per cent less than in June, 1932. Detailed figures fo llo w : No. of June, May, June, 1933 Custom1933 1933 comp, to ers * K .W .H . * K .W .H . May, 1933 2,101 + 14.2% 2,400 Evansville .... 40 + 17.2 1,586 1,858 Little Rock. .. 35 + 9.0 7,603 6,974 Louisville .... 85 — 0.3 1,511 1,516 Memphis .... ,, 31 14,741** + 11.3 St. Louis.... 194** 16,412 29,784 Totals ........ ..385 *In thousands (000 omitted). **Revised figures. 26,918 + 10.6 June, June, 1933 1932 comp, to * K .W .H . June, 1932 + 16.1% 2,068 1,742** + 6.7 5,960** + 2 7 .6 + 4 4 .5 1,046 21,679** — 24.3 32,495 — 8.3 A G RIC U LTU R E A s has been the case generally throughout the United States, the first half of 1933 has been less auspicious for crop production in the Eighth Dis trict than the corresponding portion of any crop season in late years. A creage planted has been re duced and unusually low yields are indicated, with quality much below average in the case of a number of important productions. The reduction in acreage and low prospective yields are due to a number of causes, including financial difficutlies and low mar ket prices at the time of planting, the loss of a con siderable part of the acreage of winter wheat seeded last fall, heavy rains which interfered with planting and cultivation during M ay and an almost unprece dented June drouth. Generally through this district rainfall in June was less than one-third of normal, and in some sections not even showers fell during that month. F ollow ing as it did the unusually wet May, the June drouth and record heat had the effect of packing and hardening the soil to an extent which made it extremely difficult to work. Due to these conditions many crops suffered severely during June, and according to the July 1 report of the D e partment of Agriculture, new low condition records as of that date were shown by oats, barley, rye, potatoes, sweet potatoes, tobacco, peanuts and cer tain vegetable crops. Since July 1 the drouth has been partly relieved by fairly general rains throughout the district. The precipitation was beneficial to pastures and hay crops, and in many sections saved the grow ing corn crop, which was in an extremely critical condition. How ever, at the middle of July more moisture was badly needed and the issue in large areas was still in doubt and dependent on favorable weather condi tions until harvest. The effect of reduced yields and unfavorable conditions was offset to a large extent in the matter of farm incomes by the further sharp advance in prices o f agricultural products, notably grains and cotton. W heat and oats prices soared to the highest levels since the spring of 1930 and corn was higher than at any time since the summer of 1931. In the second week of July the price of cotton was more than twice as high as the corresponding period a year ago. There was also a substantial appreciation in values of rice, tobacco and a number of other important district productions. Winter Wheat — Prospects for winter wheat in this district are relatively much better than in other sections of the belt, for while the indicated yield is about one-fourth below the 10-year (1923-1932) average, it is larger than a year ago. In its July 1 report the U. S. Department of Agriculture forecasts a yield in the Eighth District, of 36,189,000 bushels, against 33,885,000 bushels harvested in 1932, and a 10-year average of 50,163,000 bushels. Threshing has made rapid progress, and had been about com pleted in the third week of July. The movement to market was of considerable size, farmers being anxious to take advantage of the high prices. Quali ty varies broadly, and much light shriveled grain is showing as a result of the June drouth. Stocks of old wheat on farms in states of the Eighth District as of July 1 totaled 4,957,000 bushels, against 11.171.000 bushels a year earlier and a 5-year aver age of 2,685,000 bushels. Corn — Indicated corn production in the Eighth District as of July 1 was 283,157,000 bushels, which compares with 380,505,000 bushels harvested last year and a 10-year average of 351,832,000 bushels. The situation varies widely, due to the unusually poor season for planting and early growth. Effects of the drouth and high temperatures are in evidence, and the crop not only needs abundant rains, but an ideal season and delayed frost to produce even a fair yield. Stocks of corn on farms in states of the dis trict as of July 1 totaled 251,153,000 bushels against 240.493.000 bushels a year ago, and a 5-year average of 87,674,000 bushels. Oats — A ccording to the U. S. Department of Agriculture’s July 1 report the indicated yield of oats in the Eighth District is 30,904,000 bushels, the smallest in recent years, and comparing with 47,062,000 bushels harvested in 1932, and a 10-year average of 55,269,000 bushels. Fruits and Vegetables — T he outlook for fruits and vegetables in the Eighth District is unusually poor. The results of unfavorable conditions earlier in the season were accentuated by the record high temperatures and drouth in June. Tree fruits have not filled as they should have, and the drop of apples, particularly late varieties, has been heavy. Recent rains have benefited such commercial vege table crops and home gardens as were not irrepara bly injured by the June drouth. In states partly or entirely within the Eighth District, production of sweet potatoes is estimated by the U. S. Department of Agriculture in its July 1 report at 15,600,000 bush els, against 21,435,000 bushels in 1932 and a 5-year average of 15,951,000 bushels; apples 12,793,000 bushels, against 7,174,00 bushels in 1932 and a 5-year average of 17,985,000 bushels; peaches, 4,057,000 bushels, against virtual failure of 1,259,000 bushels in 1932, and a 5-year average of 7,262,000 bushels; grapes, 31,019 tons, against 33,979 tons in 1932, and a 5-year average o f 30,649 tons. In the district prop er the white potato crop is estimated at 8,921,000 bushels against 13,164,000 bushels harvested in 1932 and a 10-year average of 14,453,000 bushels. Pros pects for all cane fruits deteriorated sharply during June. Live Stock — The condition of livestock gener ally through the district in early July was somewhat less favorable than a month earlier, due chiefly to the extremely hot weather and lack of moisture. Heavy mortality am ong farm horses as a result of the June heat wave was reported in many localities. The condition of pastures deteriorated, and in cer tain areas there was a scarcity of stock water. Based on the July 1 condition, the U. S. Department of Agriculture estimates production of tame hay in the Eighth District at 4,936,000 tons, against 4,964,000 tons in 1932 and a 10-year average of 6,991,000 tons. Receipts and shipments at St. Louis as reported by the National Stock Yards, were as follow s: Receipts June, May, June, 1933 1933 1932 June, May, June, Cattle and Calves..... 92,315 92,448 85,530 Hogs .............................322,562 301,011 212,815 Horses and Mules...... 3,056 3,492 917 Sheep ............................121,940 57,760 123,475 Shipments June, May, June, 1933 1933 1932 June, May, June, 43,938 31,411 51,804 160,735 172,029 159,111 2,677 3,830 1,138 35,584 6,916 33,121 Cotton — In its initial cotton report for the sea son, as of July 1, the U. S. Department of Agricul ture estimates the area under cultivation in states including the Eighth District at 9,196,000 acres against 8,824,000 acres on July 1, 1932. This esti mate does not take into account any reduction of acreage that may be made by farmers under the cotton program of the Agricultural Adjustment Administration. A ny such reduction will be an nounced in the future. The condition of the growing crop in this district is generally high, particularly early planted cotton. The plant is healthy, with excellent tap root and fields are mainly clean. D e mand for cotton was active, prices continued sharply upward. In the second week of July reached the highest point since June, 1930. In the St. Louis market the middling grade ranged from 8.55c to 11.40c between June 16 and July 17, closing at 11.40c on the latter date, which compares with 8.75c on June 16, and 5.35c on July 15, 1932. Receipts of cotton at Arkansas warehouses from August 1, 1932 to July 14, 1933, totaled 1,294,564 bales, against 1,506,654 bales during the comparable period a year ago. Stocks on hand on July 14 were 276,041 bales, against 314,143 bales on June 16, and 358,015 bales on the corresponding date in 1932. Tobacco — Based on the July 1 condition, the U. S. Department of Agriculture estimates the Eighth District tobacco crop at 278,685,000 pounds, against 261,257,000 pounds secured in 1932, and a 10-year average of 308,565,000 pounds. The planting season was unfavorable and the crop was held back by the hot, dry June. Rains since July 1 have greatly benefited the crop, especially the early planting which had made some headway before the June drought. Cultivation has been generally thorough, and at the middle of July fields were in better con dition than at any time since planting. Considerable resetting of plants followed the recent rains, but apprehension is felt that the late setting may not attain full size and ripen before frost. C O M M O D IT Y P R IC E S Range of prices in the St. Louis market between June 15, 1933 and July 17, 1933, with closing quota tions on the latter date, and July 15, 1932, follo w : High Close Low July 17, 1933 July 15, 1932 Wheat July ..................... per bu..$1.15 $ .72% $1,15 $ .45% Sept......................... “ 1.19H .74f£ 1.18J4 .47*4 Dec.......................... “ 1 .2 2 ^ .8254 1.21 % .51 No. 2 red winter " 1.18 .74 $1.16 @ 1.18 $ .4 6 ^ @ .47 N o, 2 hard “ “ 1 .1 5 ^ .74 1.15 @ 1.15% .47 @ .48 Corn July ..................... " .66% .44% .66 % .29 No. 2 mixed ....... “ .6 3 ^ .41 .63 @ .6 3 ^ -31 @ .31*/* No. 2 white ....... “ .66 % .45 .66 @ .66% .3 1 % @ .32 Oats No. 2 white ....... “ .48 .28*4 .47 % @ .48 .17 Flour Soft patent........per bbl. 8.25 5.00 5.00 @ 8.25 2.90 @ 3.25 Spring “ ........ “ 8.80 7.00 7.00 @ 8.80 3.85 @ 4.10 Middling Cotton....per lb. .1140 .0855 .1140 .0535 Hogs on hoof.......per cwt. 5.00 2.25 2.75 @ 4.75 3.50 @ 4.95 F IN A N C IA L The banking situation in the Eighth District during the past thirty days was marked by notice able expansion in demand for credit from com m er cial and industrial sources, also, by a heavier call for funds to finance agricultural operations. Reflect ing the improvement in general business, merchants and manufacturers augmented their borrowings to take care of purchases of goods for fall distribution. Banks in the large centers reported a heavy volume of routine liquidation by mercantile customers, but the amount of new loans and renewals was consider ably in excess of loans paid. These banks consider ably reduced their balances with eastern correspon dents, both as a result of the provision of the Bank ing A ct of 1933, which prohibits payment of interest on demand deposits, and to accommodate demands in their own territory. The seasonal increase in demand for funds to finance the winter wheat crop was more in evidence than has been the case in recent years, due to the sharp rise in grain values during June and the first half o f July. Borrowings of grain elevator and flour milling interests were in considerably larger volume than at this time last year or in 1931. In the cotton areas there has been a substantial volume of liqui dation with both banks and merchants. Between June 19 and July 19, there were 21 additional banks open for business in this district, bringing the total to 1,754. Just prior to the bank ing holiday in March there were 1,875 member and nonmember banks operating in the district. Total loans for the reporting member banks in the principal cities increased 6.3 per cent between June 14 and July 12, but on the latter date were about one-fifth smaller than a year earlier. Invest ments increased 6.2 per cent during the four-week period, and at its close were 18.6 per cent larger than a year ago. Both demand and time deposits increased moderately, and for the first time since June, 1931, total deposits showed an increase over the corresponding period a year earlier. There was a further recession in borrowing of all member banks from the reserve bank bills dis counted being reduced from $3,038,000 on June 19 to $2,108,000 on July 19, the total on the latest date comparing with $13,575,000 a year earlier. The vol ume of reserve bank credit outstanding on July 19 was approximately 3.5 per cent larger than on the same date in June, the increase being accounted for by additions to this bank’s holdings of Government securities. Federal reserve notes in circulation con tinued to decline. A t St. Louis banks, as of the week ending July 15, current rates were as fo llo w s : Customers’ prime commercial paper, 4 to 5y2 per cent; collateral loans 4 to 6 per ce n t; interbank loans, AT / 2 to SJ / 2 per ce n t; loans secured by warehouse receipts, AJ / 2 to 6 per cent, and cattle loans 5 to 6 per cent. Condition of Banks — Loans and discounts of the reporting member banks on July 12, 1933 showed an increase of 6.3 per cent as contrasted with June 14, 1933. Deposits increased 5.4 per cent between June 14, 1933 and July 12, 1933 and on the latter date were 1.1 per cent greater than on July 13, 1932. Composite statement fo llo w s : *July 12, 1933 Number of banks reporting............ 19 Loans and discounts (incl. rediscounts) Secured by U . S. Govt, obligations and other stocks and bonds....$ 91,894 All other loans and discounts.... 136,686 *June 14, 1933 19 *July 13, 1932 19 $ 87,671 127,277 $112,190 174,602 Total loans and discounts.................$228,580 Investments U. S. Government securities...... 140,057 Other securities............................. . 101,428 $214,948 $286,792 126,159 101,308 85,750 117,851 Total invesmtents................................ $241,485 Reserve balance with F. R. Bank 45,384 Cash in vault........................................ 6,714 Deposits Net demand deposits..................... 279,690 Time deposits.................................... 160,568 Government deposits........... ......... 11,730 $227,467 39,151 7,996 $203,601 33,443 6,193 271,058 156,769 1,206 262,938 181,335 2,867 Total deposits........................................$451,988 $429,033 $447,140 Bills payable and rediscounts with Federal Reserve Bank................... 200 325 1,739 *In thousands (000 omitted). This report covers 19 licensed reporting banks in four leading cities, instead of 24 banks in 5 leading cities, as heretofore. Debits to Individual Accounts — The follow ing table gives the total debits charged by banks to checking accounts, savings accounts, certificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Government in leading cities of the district. Charges to accounts of banks are not included. *June, 1933 East St. Louis & Natl. Stock Yards, 111..$ 20,569 El Dorado, Ark... . 2,612 Evansville, Ind....„ 15,765 Fort Smith, Ark... . 6,673 2,608 Greenville, Miss... . Helena, Ark...........„ 1,116 Little Rock, Ark..„ 16,477 Louisville, K y...... „ 117,556 Memphis, Tenn.... „ 76,969 Owesnboro, Ky.... . 2,171 Pine Bluff, Ark... . 4,747 Quincy, 111............ . 5,225 St. Louis, M o...... . 469,203 1,410 Sedalia, M o........... Springfield, M o.... . 9,900 **Texarkana, Ark.-Tex........ ..... 6,056 *May, 1933 *June, 1932 $ 19,800 2,622 14,201 6,157 2,567 1,181 18,357 98,669 73,411 2,034 4,535 5,324 442,800 1,393 9,671 $ 20,266 3,422 15,422 6,749 2,261 1,136 18,096 105,319 70,513 2*915 4,051 6,027 487,071 1,560 10,161 5,023 5,410 June, 19331 comp, to May, 1933 June, 1932 + — + + + — — + + + + — + + + 3.9% 0.4 11.0 8.4 1.6 5.5 10.2 19.1 4.8 6.7 4.7 1.9 6.0 1.2 2.4 + 2 0 .6 .$759,057 $707,745 $760,379 + 7.3% *In thousands (000 omitted). **Includes one bank in Texarkana, Texas not in Eighth District. + 1.5% — 23.7 + 2.2 — 1.1 + 15.3 — 1.8 — 8.9 + 11.6 + 9.2 — 25.5 + 17.2 — 13.3 — 3.7 — 9.6 — 2.6 + 11.9 — 0.2% Federal Reserve Operations — During June, the Federal Reserve Bank of St. Louis discounted for 127 member banks against 150 in May and 215 in June, 1932. The discount rate remained unchanged at 3 per cent. Changes in the principal assets and liabilities of this institution appear in the follow ing table: *July 14, 1933 2,219 .$ Bills bought ................................................ U . S. Securities......................................... Federal Inter. Cr. Bk. Debentures.... Participation in Inv. Foreign Banks.. Total Ratio of reserve to deposits and F. R. Note Liabilities. *In thousands (000 omitted). (Compiled July 20, 1933) . *June 14, 1933 2,719 $ •July 14, 1932 $ 13,222 485 64,030 74,557 70,730 207 ........ 203 .....i;004 .$ 76,983 $ 73,734 $ 78,741 .$167,466 . 92,791 . 139,294 $161,070 79,609 142,465 $ 86,750 56,567 97,824 72.2% 72.5% 56.2% BUSINESS CONDITIONS IN T H E U N ITED STATES In June, as in the two preceding months, industrial activity increased rapidly and in the first half of July there was some fur ther advance. Factory employment and payrolls showed a consid erable increase. Wholesale commodity prices rose rapidly until the third week of July when prices of leading raw materials showed a sharp decline. PRODUCTION AND EM PLO YM ENT — Volume of in dustrial production, as measured by the Board’s seasonally ad justed index, advanced from 77 per cent of the 1923-1925 average in May to 89 per cent in June, as compared with 60 per cent in March. Activity in the steel industry continued to increase during June and, according to trade reports, during the first two weeks W H O L E S A L E PRICES — Wholesale prices of commodities advanced from 64 per cent of the 1926 average in the first week of June to 69 per cent in the middle of July, according to the index of the Bureau of Labor Statistics. This marked upward movement reflected large increases in the prices of most basic raw materials, including grains, cotton, hides, nonferrous metals, steel scrap, petroleum, and rubber; most of these commodities are traded in on organized exchanges and enter into world trade. The prices of many manufactured products, particularly textiles, leath er, and gasoline, also advanced substantially. On July 19, 20 and 21, following rapid advances in the preceding period, prices of leading raw materials declined sharply. 1928 Index number of industrial production, adjusted for seasonal variation. (1923-1925 averages 100.) Latest figure June, preliminary 89. 192°) 1930 1931 1932 1933 Indexes of the United States Bureau of Labor Statistics (1925 = 100.) Latest figures June, farm products 53.2, foods 61.2, other commodities 68.9. of July; in the third week of the month it showed little change. Demand for steel from the railroads and the construction industry continued at a low level. Output of automobiles, which usually declines at this season, increased in June and showed little change in July. Consumption of cotton by domestic mills was larger in June than in any previous month, and continued at a high rate during the first half of July. At woolen mills and shoe factories activity increased further in June to unusually high levels. W ork ing forces at factories increased substantially between May and June and the Board’s seasonally adjusted index of factory employ ment advanced from 61 per cent of the 1923-1925 average to 65 per cent. Factory payrolls also increased by a reasonable amount to 46 per cent of the 1923-1925 averages. Value of construction contracts awarded, as reported by the F. W . Dodge Corporation, showed an increase in May and June, contrary to the usual sea sonal movement. BANK CREDIT — During the four weeks following the enactment on June 16 of the Banking Act of 1933, which prohib its the payment of interest on demand deposits, net demand deposits of weekly reporting member banks in 90 cities declined by $500,000,000, reflecting the withdrawal of $300,000,000 in bank ers’ balances from banks in New York City and elsewhere, and the transfer of funds from demand to time accounts. Time deposits increased by $260,000,000. The banks’ holdings of United States Government securities increased during the four weeks ending July 12, and there was a further rapid growth in open market Indexes of factory employment and payrolls, without adjustment for seasonal variation. (1923-1925 averages 100.) Latest figures June, employment 64.1, payrolls 45.9. Indexes based on three month moving averages of F. W . Dodge data for 37 Eastern States, adjusted for seasonal variation. (1923-1925 averages 100.) Latest figures June, preliminary total 19, residential 14. Department of Agriculture estimates as of July 1 indicated a wheat crop of about 500,000,000 bushels, 350,000,000 bushels below the average of 1926-1930 reflecting chiefly adverse weather conditions. Feed crops have also been seriously damaged, cotton acreage on July 1 was estimated at about 41,000,000 acres, an increase of 4,000,000 acres over last year, but is proposed as a part of the program of the Agricultural Adjustment Administra tion to reduce the area by about 10,000,000 acres. D ISTRIBU TIO N — Freight traffic continued to increase dur ing June, reflecting in large part heavier shipments of coal, mis cellaneous freight, and lumber products. Distribution of comm o dities through department stores showed about the usual seasonal decline in June. FOREIGN EXCHANGES — In the exchange market the value of the dollar in terms of the French franc declined to 69 per cent of its gold parity on July 18 and then advanced to 72 per cent on July 21. brokers’ loans, while loans to customers declined. Return flow of currency amounted to $90,000,000 during the five weeks ending July 19. During the same period the Federal reserve banks pur chased $85,000,000 of United States Government obligations and member banks reduced their indebtedness to the reserve banks by $90,000,000. The withdrawal of bankers’ balances from New York City reduced excess reserves of member banks in that city, while surplus reserves of member banks outside New York increased substantially. Money rates in the open market generally contin ued at low levels, although recently slight increases have occurred in acceptance rates, time money against stock exchange collateral, and yields on short term United States government securities.
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