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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Afternoon Papers of July 31, 1942 FEDERAL RESERVE BANK OF ST. LOUIS YMltirpMlSeHAM»fROPCOWMtfteC Co t t o n G r o w i n g in Te n n e s s e e GENERAL SUMMARY C O N T IN U A N C E of high levels of m anufac turing characterized industrial activity in the E ighth D istrict during June and early July. W ith much of the conversion of existing m anufacturing facilities to w ar production already accomplished, it is expected th at activity will m ain tain present levels and probably exceed them in some lines in the future as more new w ar facilities now under construction come into production. Total expenditures for w ar in June were about $4.1 billion and on the basis of latest statem ents may total more than $4.5 billion in July. Despite the rapid expansion of w ar expenditures in recent months, a further rise of about one-third to a m onthly rate of approxim ately $6 billion will be necessary in order to attain the goal established for the fiscal year ending June, 1943. The unadjusted index of industrial production prepared by the Board of Governors of the Federal Reserve System, reached another new peak in June, standing at 178 per cent of the 1935-39 average as compared w ith 175 per cent in May and 171 per cent in April. M ost of the gain in the past m onth was due to increases in activity in the durable goods lines. The durable goods m anufactures index in June stood at 245, up 6 points in the month. The non durable goods index for June was 138, unchanged from the level in May. The rise in industrial production in the U nited States has been m ost pronounced since May, 1940. From the beginning of the w ar to May, 1940, the unadjusted index of industrial production actually declined 2 per cent, although the adjusted index rose 2 per cent. In the next 18 m onths up to the entry of the U nited States into the war, industrial production rose 43 per cent, and since then has increased an additional 8 per cent. M ost of the rise in m anufacturing activity has been in durable goods lines. Since September, 1939, the durable goods index has increased more than 100 per cent, rising alm ost 20 per cent since November, 1941. M eanwhile, m anufacturing of non-durable goods after the initial rise during the twelve m onths end ing June, 1941, has held fairly constant for the past year. The Board of Governors estim ated th at in June approxim ately 70 per cent of all durable goods m anufactures was for war, while about 25 per cent of non-durable goods was for w ar purposes. A ctiv ity in durable goods lines will continue?, to increase substantially, partly at the expense of present civil ian durable goods production and partly through output from new m anufacturing facilities. Changes Page 2 in non-durable goods activity on balance are likely to be very small in the future. Indicative of industrial activity in the E ighth D istrict during June, steel ingot operations were at virtual capacity with only necessary furnace re pairs holding the rate down. O utput of shoes in the district was som ew hat larger in June than in May. Mill production of hardwood and southern pine m aintained a rate of about 90 per cent of capacity for the m onth w ith orders and shipm ents exceeding production. Consum ption of electricity by indus trial concerns in the principal cities of the district during June exceeded consumption in May by 8 per cent and consumption in June, 1941, by 28 per cent. Building activity as m easured by dollar volume of perm its granted in the principal cities of the dis trict, exceeded M ay activity by 75 per cent but was 46 per cent below th at of June, 1941. As m ost civil ian building has been virtually stopped, the dollar volume of building perm its no longer is a reliable indicator of construction activity since much war construction is underw ay in places from which no perm it figures are received. A better indicator is construction contracts awarded which covers the entire district. The dollar volume of contract aw ards during June exceeded th at of May by 125 per cent and of June, 1941, by 277 per cent. P rim ary distribution in the E ighth D istrict dur ing June was in som ew hat sm aller volume than th at of M ay but appreciably exceeded th at of June, 1941. Carloadings of all railroads operating in this area during the four-week period ending June 27 ex ceeded those of the preceding four-week period by 1 per cent and those of the comparable period of a year ago by 1 per cent. Load interchanges for 25 connecting lines at St. Louis were down fraction ally from May to June but were 35 per cent above the level of June, 1941. Cum ulative load inter changes for the first six m onths of 1942 exceeded those of the comparable period in 1941 by 33 per cent. Tonnage moved by the Federal Barge Lines betw een St. Louis and New Orleans on the M issis sippi River during June was 12 per cent below that of M ay and 10 per cent below th at of June, 1941. Dollar volume of departm ent store trade in the district during June was 4 per cent below May, but 8 per cent above June, 1941. W holesale trade in June was virtually unchanged from a m onth earlier but 16 per cent above a year ago. Gains from cor responding m onths a year earlier in both wholesale and retail trade are considerably smaller at present than they were some m onths previous. D ET AI LE D SUR VEY OF D IST RI CT M A N U F A C T U R IN G Iron and Steel — Production of iron and steel in the E ighth D istrict during June and the first part of July was m aintained at high levels. T he rate of ingot operations in this area as of m id-July was at 95.5 per cent of capacity, the same as a m onth earlier but slightly lower than a year ago. The m ovem ent of scrap into the St. Louis area has been som ew hat diminished in recent weeks due in p art to excessively w et w eather, but scrap supply continues to be sufficient to m aintain a high rate of production. Mill and foundry inventories are being held at about a ten-day to two-week supply. Allo cation of pig iron in the district continues to be satisfactory. Dem and for all steel products is still very strong but the allocation program has taken some of the pressure off mill schedules. Probably more than 80 per cent of the steel tonnage is now covered by allo cations and directives w ith 75 per cent of plate pro duction for direct w ar usage. P late tonnage pro duced continues to break all records as a result of further conversion of continuous strip mills to plate production. D uring June m ore plates were turned out by strip mills than by sheared mills. Steel ingot production in the U nited States ac cording to the Am erican Iron and Steel Institute, was 7,022,155 tons in June as compared w ith 7,386,890 tons in May and 6,792,751 tons in June, 1941. Production for the first half of 1942 exceeded that of the comparable period in 1941 by 4 per cent. Shoes— Prelim inary estim ates of shoe production in the E ighth D istrict during June indicate an in crease over M ay output of about 3 per cent which is som ew hat less than the norm al seasonal increase. D uring May, shoe production in the district totaled 6,533,247 pairs or slig*htly more than 16 per cent of total U nited States production. The seasonally ad justed index of shoe output in this district in May was at 148 per cent of the 1924-26 average. W hiskey— Of the 60 distilleries in K entucky, 49 were in operation on June 30, a decline of 6 from the previous m onth but 21 more than were in pro duction on the comparable date a year earlier. The increased num ber of distilleries in operation this year, contrary to the usual seasonal trend, is a ttrib uted to the fact th at an effort is being made to pro duce the m aximum am ount of whiskey before plants are completely converted to the production of alco hol for the w ar program . M ost distilleries are now producing some alcohol for use in the m anufacture of explosives and it is anticipated th at maximum production of alcohol by K entucky distilleries will be reached by October 1. M any distilleries whose facilities are not suitable for production of 190 proof alcohol are producing high wines which m ust be further distilled into high-proof alcohol. Dem and for bulk whiskey continues strong at higher prices due in p art to efforts of large distrib utors to obtain adequate stocks to meet the demand for nationally advertised brands. The cooperage situation has eased som ew hat recently due to the decreased production of whiskey at some plants. Stocks of whiskey in K entucky warehouses at the end of M ay totaled 232,594,336 tax gallons as com pared w ith 230,897,487 gallons a m onth earlier. A G R IC U L T U R E General Conditions — Excessive rainfall in late June and early July did extensive damage to crops in certain sections of the E ighth D istrict. Flood conditions were reported in several areas. Yields of corn, hay, and certain small grains are expected to be considerably reduced by the unfavorable w eather conditions. The w et w eather, however, has benefited pastures which are now in generally good condi tion throughout the district. Production in 1942 of principal feed and grain crops in the E ighth D istrict, as indicated by the U. S. D epartm ent of A griculture on July 1, was as follows: corn, 331,107,000 bushels as compared w ith 1941 production of 348,402,000 bushels; w inter wheat, 29,736,000 bushels as compared w ith the 1941 crop of 51,228,000 bushels; oats, 84,254,000 bushels as compared w ith last year's harvest of 71,149,000 bushels; tam e hay, 8,591,000 tons as compared w ith 1941 production of 8,232,000 tons. Cash farm income in the U nited States for May totaled $988 million which was only fractionally above the $982 million reported for April but was 32 per cent above cash income in May, 1941. The less than normal increase from April to M ay was due to the contra-seasonal decline in cattle m arket ings and the less than seasonal increase in poultry and dairy products m arketings. Cash income from fruits was up sharply in May but the lateness of truck crops held back the usual increase in income from th at source. For the first 5 m onths of 1942 income from crops was up 39 per cent over the comparable period in 1941, while income from live stock was up 48 per cent. Cash farm income in E ighth D istrict States in May totaled $204,855,000 as com pared w ith $191,404,000 in April, and $149,123,000 in May, 1941. The percentage increase in income in these states over a year ago continues to run higher than the increase for the country as a whole. As of June 15 farm prices in the U nited States Page 3 stood at 99 per cent of parity. The index of prices received by farm ers in the U nited States declined one point from M ay 15 to June 15, but was 33 points above the level of June 15, 1941. In E ighth D istrict States price declines in the m onth were som ew hat larger than those for the U nited States as a whole due prim arily to decreases in the prices of cotton and certain fruits and vegetables. On July 1 farm employm ent in the U nited States totaled 12,009,000 which was 80,000 more than on J u n e l. R eports continue to indicate labor shortages in various sections of the district but to date they have not resulted in appreciable hardships. Cotton — Cotton made generally good progress throughout the district during late June and early July but wet fields, particularly in A rkansas, made chopping difficult and fields have become grassy. In the w et sections weevils have made their appear ance earlier than usual. T he infestation is quite extensive in the southw estern p art of the district and hot, dry w eather is needed to hold back further damage. Poison has been som ew hat short to date but reports indicate th at there will be approxim ately as much arsenate this year as last. According to the U. S. D epartm ent of A gricul ture, cotton acreage in cultivation on July 1 is esti m ated at 24,005,000 or about 4 per cent more than in 1941. If the abandonm ent is about the same per centage-wise as in 1941, there will be about 23,525,000 acres for harvest which is larger than acre age harvested in 1941, but sm aller than in any other year since 1896. F or cotton raising states in the Eighth D istrict 1942 acreage in cultivation as of July 1 is estim ated at 5,839,000 or 3 per cent more than in 1941. A m ong E ighth D istrict States, T en nessee shows the g reatest percentage increase in cotton acreage as compared w ith a year ago. A lthough sales of cotton on the M emphis m arket are relatively small they have been increasing in volume in recent weeks indicating a som ew hat stronger demand from domestic mills. D uring the m onth from June 16 to July 15 the price of 15/16 middling cotton on the M emphis m arket ranged be tween 18.70c per pound and 20.10c per pound, clos ing on the latter date at 19.95c per pound. In gen eral, the loan prem ium s on longer staples have been running above the m arket prem ium s while the loan discounts are not so great as the m arket discounts. However, demand for certain of the longer staple lengths, notably 1-1/16 and 1-3/32, have brought the m arket prem ium s above the loan premiums. Livestock — Receipts of livestock at the N ational Stock Y ards during June were in considerably greater volume than in May and in June, 1941. Page 4 Increases over a m onth ago were general in all lines, and over a year ago, in all lines except sheep and lambs. Livestock prices betw een June 16 and July 15 showed mixed trends. Prices of cattle in general were lower on the latter date while hog prices were som ew hat higher than a m onth earlier. T he average price on hogs at the National Stock Yards ranged betw een $13.69 per cwt. and $14.85 per cwt., closing on July 15 at $14.85 per cwt. The beef top ranged from $14.25 per cwt. to $14.75 per cwt., closing on July 15 at the form er figure. A spring pig crop of 62,000,000 head or 25 per cent more than the crop of a year ago, is estim ated by the U. S. D epartm ent of A griculture. A 1942 fall pig crop of 42,500,000 head is indicated by farm ers’ reports of breeding intentions. This would make a combined crop of 105,500,000 head as compared w ith 85,000,000 head in 1941. T he 1942 crop will be the first on record to exceed 100,000,000 head. In E ighth D istrict States the num ber of spring pigs saved this year totaled 17,575,000 head, or slightly more than 24 per cent above the 14,125,000 head saved last year. The increase over a year ago for E ighth D is trict States is slightly less than th at for the country as a whole. Sows bred to farrow for the fall pig crop in E ighth D istrict States total 2,424,000 or 25 per cent above the 1941 figure of 1,945,000. Tobacco— Excessive rainfall in the burley tobacco district during late June and early July retarded cultivation and caused the spread of foreign vegeta tion in the fields. W hile a small portion of the crop has been lost because of the flooding of low places, a uniform stand of burley is reported w ith plants very well developed for this season of the year and in good grow ing condition. By m id-July the early plants had advanced in size to the point w here cul tivation was about ended. The prelim inary esti m ates of burley production for 1942 indicate pro duction this year will be about 3 per cent more than in 1941. T ransplanting in the Green River and stem m ing district was completed under favorable conditions and norm al grow th is reported. Some damage due to rainfall is indicated but the crop as a whole is reported in good condition. In both eastern and w estern dark-fired districts rainfall during the past m onth was som ew hat scat tered, and in general, was beneficial. Soil condition perm itted proper cultivation and present prospects are good. T he dark-fired crop in both districts is considered rath er early this year. Topping is gen eral throughout the area. R E T A IL T R A D E D ollar volume of departm ent store trade in the E ighth D istrict during June was 4 per cent less than in May, but 8 per cent more than in June, 1941. T he physical volume of departm ent store trade in June was actually less than th at of a year ago inasm uch as departm ent store prices have risen approxim ately 16 per cent in the year. T he period of large increases in departm ent store trade appears to have halted for the tim e being at least despite the heavy volume of income paym ents engendered by the w ar program . T he pressure to buy goods appears to be currently lessened due in great m easure to anticipatory buying in preceding m onths and in p art to the imposition of retail price ceilings. W hile departm ent store inventories con tinue to hold levels considerably higher than in cor responding m onths of 1940 and 1941, much of the increase is accounted for by price rises and stores are now experiencing difficulty in obtaining certain replacem ent goods. A nother factor operating to keep the level of de partm ent store trade from gaining appreciably is the am endm ents to R egulation W instituting stricter instalm ent credit term s and control over charge account credit. On the basis of a limited survey made by this bank, about 20 per cent of all regular charge accounts in departm ent, m en’s and wom en's clothing, furniture, and jew elry stores were frozen as of July 10 because outstanding bal ances contained charges for purchases of goods prior to June 1. COST O F L IV IN G A N D PR IC ES T he index of cost of living in large cities in the U nited States on June 15 was 116.4 as compared w ith 116.0 on M ay 15, and 115.9 on June 2. On June 15, 1941, the index stood at 104.6. In St. Louis the index on June 15 was 116.6 as compared w ith 115.7 on both M ay 15 and June 2 and 104.1 a year earlier. In Memphis, cost of living advanced 13.4 per cent in the year. The recent stabilization of the cost of liv ing reflects the wholesale and retail price ceilings imposed on May 11 and M ay 18. Since ceilings on various services w~ere not effective until July 1 the full effect of the General M aximum Price Regula tion has not yet been reflected in the cost of living index but since prices of such services are fairly rigid, it is unlikely th at the imposition of ceilings in th at field wTill tend to reduce the level of the index. Ceilings on services will operate, however, to strengthen the forces holding back future rises in the cost of living. Prices of farm products and certain foods not subject to price control are still operating to raise the cost of living. T he Office of Price A dm inistra tion has had to allow price advances in excess of the ceiling for certain canned foods because of price rises in the farm products used. M ost farm product prices are still below the level at which the Em er gency Price Control Act authorizes price controls to be instituted. Consequently, no effective ceilings can be imposed on them. The m ost notable excep tions are prices of m eat animals. Indicative of rises in the uncontrolled food prices the index of food costs for the U nited States rose 1.3 per cent betw een M ay 12 and June 16. In E ighth D istrict cities covered by the index the m ajor rise in the month was recorded in St. Louis where food prices rose 1.7 per cent. As compared w ith a year earlier food costs in L ittle Rock were up 21.0 per cent to lead all E ighth D istrict cities in gain. W holesale prices have been very steady since the imposition of price ceilings. The Bureau of Labor Statistics index stood at 98.6 per cent of the 1926 average on M ay 9 and on July 11 was at 98.5. The range of variation in the past two m onths has been only 0.7 point. Farm product prices have ranged between 104.0 and 106.0 in the period and foods from 98.2 to 99.7. W holesale prices of commodities other than farm products and foods have been vir tually constant in the last 60 days ranging between 95.8 and 96.1. EM PLOYM ENT Total non-agricultural employment in the U nited States as reported by the U. S. D epartm ent of Labor, reached another new peak in M ay w ith 41,201,000 employed, an increase of 0.8 per cent over April and of 5.9 per cent over May, 1941. M ost lines showed gains from April levels w ith m anufacturing regis tering a contra-seasonal rise of 76,000 persons. In the past year m anufacturing employment has in creased by 1,135,000 persons. In E ighth D istrict States non-agricultural em ploym ent in May totaled 5.829.000 as compared w ith 5,783,000 in April and 5.424.000 in May, 1941. As compared w ith April the percentage increase in these states was the same as that for the U nited States as a whole, but the gain from a year ago in E ighth D istrict States exceeded th at for the country. The total labor force in June was estim ated by the W .P.A. at 56,100,000 w ith 53,300,000 employed and 2,800,000 unemployed. The W ar M an-Pow er Commission estim ated th at on June 1 there were 12.500.00 persons employed in direct w ar w ork and indicated th a t an additional 5,000,000 would be shifted to w ar work by the end of this year. Some of these w orkers will be added by conversion of their plants to w ar production but m any will be brought from curtailed consum ers' goods industries. Definite labor shortages are occurring in certain Page 6 lines at the present time and it is anticipated that these shortages will increase in the future. B A N K IN G A N D FIN A N C E Demand for credit in the Eighth D istrict during June and the first part of July continued to show the declining trend th at has been in evidence since the first of the year. Reports from various sections of the district indicate th at almost w ithout excep tion borrow ing of all types from banks is in smaller volume than it was a year ago. Particularly note w orthy has been the decrease in consumer instal m ent credit granted by banks. In this district out standing consumer instalm ent loans of commercial banks in the m onth from May 31 to June 30 de clined 7.6 per cent while the volume of loans made in June was 13.6 per cent below those made in May, 1942. The m ajor decline is attributable to lack of retail autom obile paper for purchase and the de crease in direct autom otive instalm ent loans. It is possible th at bank loans to carry inventories, par ticularly of those goods frozen and being rationed, will decline sharply if plans similar to that insti tuted for autom obile dealers are extended to cover other lines. Between June 17 and July 15 commercial, indus trial, and agricultural loans at 24 reporting member banks in the E ighth D istrict declined 2 per cent and on July 15 were 2 per cent below the level of a year ago. T otal loan volume of the banks was down 3 per cent as compared w ith mid-July, 1941. Reflecting increased Government financing, partic ularly increases in issue of T reasury bills, total in vestm ents of the reporting member banks increased 15 per cent in the m onth ending July 15 and were 40 per cent above the level a year ago. Treasury bill holdings have risen from $675,000 to more than $65 million in the year ending July 15. Treasury note holdings increased 88 per cent in the year and T reasury bonds rose 38 per cent in the year. Since the last issue of this review the Old Capitol Bank and T ru st Company, Corydon, Ind., the Tip ton Farm ers Bank, Tipton, Mo., and the Union Bank, Loogootee, Ind., have become members of the Federal Reserve System. C O M M E R C IA L F A I L U R E S IN E IG H T H F. R. D IS T R IC T June/42 comp, with J u n e/42 M ay,’42 Jun e/41 M ay/42 June/41 —29% N u m b e r ................ 20 22 28 — 2% — 29 L iabilities.............. $166,000, $129,000 $233,000 +29 Source : D un and Bradstreet. Quarter e n d in g : June 30, 1942 E van sville......... $206,973 Little Hock. . . . 260,180 790,940 L o u is v ille ......... M em phis............ 711,713 St. L o u is ............ 2,825,049 T o ta ls .............. 4,794,855 Page 6 P O S T A L R E C E IP T S March 31, June 30, 1942 1941 $ 192,20,6 $ 203,185 288,913 259,990 798,098 811,519 727,484 746,559 2,945,928 2,884,492 4,952,629 4,905,745 Comp. 2nd 1942 and + 2% -0— 3 — 5 — 2 — 2 C A SH FA R M IN C O M E Cumulative for 5 months M ay 1942 1940 1941 1941 1942 of dollars) $ 41,18 0. $ 26,467 $11,435 $ 74,004 $19,700 220,789 230,003 72,505 54,442 344,309 121,787 105,335 186,755 41,091 27,0.49 59,862 62,933 9,111 88,421 13,397 26,104 46,568 32,0,53 8,890 9,318 M ississippi......... 89,584 . . 35,870 27,688 164,354 109,688 42,617 73,399 50,144 T e n n e ss e e ........... . 13,402 10,080 647,788 570,758 . 20.4,855 977,810 149,123 R E C E IP T S A N D S H I P M E N T S A T Receipts June, M ay, 1942 1942 Cattle and Calves. . . . .123,403 105,069 H o g s ............................. . . .271,147 268,013 H orses and M ules. . . . . 1,706 789 . . . 97,872 55,629 N A T IO N A L ST O C K Y A R D S Shipments June, June, M ay, June, 1942 1941 1941 1942 36,898 98,762 44,930 51,680 237,048 53,592 48,505 45,336 434 473 1,478 771 118,805 30,629 21,607 49,456 494,128 429,500, 455,088 137,379 115,813 132,124 W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S Bureau of Labor Statistics June July July 11/42 comp, with July July 11/42 4 /4 2 13/42 12/41 June 13/42 July 12/41 (1 9 2 6 = 1 0 0 ) A ll Commodities. . 98.5 Farm Products .105.5 98.7 96.0 98.5 104.9 99.3 96.1 88.1 85.0 84.1 89.5 98.4 104.3 99.5 95.9 + + + 0.1% 1.2 0.8 0,1 + 11.8% + 24.1 + 17.4 + 7.3 CO ST O F L IV IN G Bureau of Labor June, IS, M ay 15, June 15, Statistics (1935 -3 9 = 1 0 0 ) 1942 1942 1941 United States 116.0 116.4 104.6 St. L o u is............ , 116.6 115.7 104.1 * M em phis............ 117.4 103.5 *N ot available. June 15/42 comp, with M ay 15/42 June 15/41 + 0.3% + 11.3% + 0.8 + 12.0 + 13.4 Bureau of Labor Statistics (1935 -3 9 = 1 0 0 ) June 16/42 comp, with May 12/42 June 17/41 June 16, 1942 U . S. (51 cities) . . . St. L o u is ........... L ittle Rock L o u is v ille ......... . M em p h is........... . CO ST O F F O O D May 12, June 17, 1942 1941 123.2 125.9 123.3 123.2 124.1 121.6 123.8 123.2 122.6 123.5 10.5.9 107.2 101.9 107.2 103.3 + + + + + 1.3% 1-7 0.1 0.5 0.5 + 16.3% + 17.4 + 2 1 .0 + 14.9 + 20.1 I N D E X E S O F E M P L O Y M E N T IN M A N U F A C T U R IN G I N D U S T R I E S B Y M E T R O P O L IT A N A R E A S Bureau of Labor Statistics April, Mar., April, A p ril/42 comp, with 1942 1942 (1937=1Q 0) 1941 M ar.,’42 A pril/41 81.7 102.5 114.8 116.9 82.0, 103.1 110.2 117.1 94.5 114.1 113.5 10,9.5 — — + — 0.4% 0.6 4.2 0.2 — 13.5% — 10.2 + 1.1 + 6.8 (C ost in thousands) B U I L D I N G P E R M IT S N ew Construction Repairs, etc. N um ber C ost N um ber C ost 1942 1941 1942 1941 1942 1941 1942 1941 E van sville. .. Little R ock. . Louisville . . . M em phis. . . . St. Louis June T otals. May “ 3 10 58 142 182 395 413 38 82 278 361 273 1,032 1,402 $ 5 9 122 129 1,538 1,80,3 950 $ 131 277 518 831 621 2,378 2,928 112 96 41 177 192 618 763 120 138 44 399 157 858 739 $ 45 $ 78 30 57 218 33 82 210 152 734 527 l,T l2 384 619 V A L U E C O N S T R U C T IO N C O N T R A C T S L E T (I n thousands June,’42 comp, with of dollars) J u n e/42 M ay,’42 Jun e/41 M ay/42 Jun e/41 T otal 8th D is t.. $101,615 $45,147 S ou rce: F. W . D odge Corporation. (K .W .H . in thous.) +125% +277% C O N S U M P T IO N O F E L E C T R IC IT Y June, N o. of May, June, June, 1942 1942 Custom - 1942 1941 compared with ers* K .W .H . K .W .H . K .W .H , M ay, 1942 June, 194: 3,807 Evansville . . . . 40 2,944 L ittle Rock . . . 35 82 16,037 5,052 31 811 Pine Bluff . . . . 19 81,472 . . 131 110,123 338 ^Selected industrial customers. (I n thousands of tens) $26,926 3,484 2,523 15,642 4,931 742 74,696 102,018 5,831 2,725 13,799 4,328 692 58,461 85,836 + 9% hi 7 r 3 - 2 - 9 - 9 + 8 — + + + + + + 35% 8 16 17 17 39 28 P R O D U C T IO N O F B IT U M IN O U S C O A L June,’42 comp, with Ju n e/42 M ay,’42 Jun e/41 M ay /4 2 Jun e/41 U nited S ta tes. . . . 48,410 I l l i n o i s .................. 4,656 48,250 4,530 43,319 3,472 -0,- % + 12% + 3 + 34 FEDERAL RESERVE O PERATIO NS DU R IN G JU N E , 1942 LOADS IN TERC HA NG ED FOR 25 RAILRO ADS AT ST. LO U IS First nine days July,’42 July,’41 June,’42 M ay,’42 June,’41 147,736 148,503 109,316 41,802 30,813 S ou rce: Terminal Railroad A ssociation of St. Louis. 6 m os.’42 797,365 W H O L E S A L IN G Lines of Commodities N et Sales D ata furnished by Bureau of Census, t t o' t» 4. c r' U . S. D ept, of Commerce. Stocks +100% + 1 + 9 +22 ■ — 7 + 10 + 7 + 19 + 3 + 30 — 24 — 30 + 6 —20 + 24 +32 +35 + 28 + 3 + 4 + 3 +16 DEPARTM ENT STORES Stocks on Hand Stock T urnover June 30,’42 comp, w ith June 30/41 Jan. 1, to June 30, 1942 1941 N et Sales June, 1942 6 m os.’42 compared with to same M ay,’42 June,’41 ( period ’41 6 m os.’41 599,444 June 30, 1942 comp, w ith June 30, 1941 June, 1942 compared with M ay,’42 June,’41 A utom otive Su pplies................................ ..+ 9% B oots and S h o e s .......................................— 68 D rugs and Chem icals................................+ 1 D ry G o o d s .................................................. ..+ 1 Electrical Su pplies......................................+ 11 F u rn itu re.........................................................— 4 G roceries........................................................- 0 H ardw are.........................................................+ 16 M achinery, Equipment and Supplies. + 8 Plum bing S u p p lie s .................................. .+ 2 Tobacco and its P rodu cts.......................+ 10. M iscella n eo u s..............................................— 8 Total all lin es*......... .................................. - 0 *Includes certain lines not listed abcrve. (Incl. Louisville, Memphis, L ittle Rock branches) Ft. Smith, A r k .. . —12% + 4 2 % +41% 1.60 1.63 + 71% L ittle Rock, Ark. —10 + 27 1.99 1.71 +21 + 52 E. St. Louis, 111.. + 2 —12 — 4 Quincy, 111............. — 8 — 2 1.71 2.0.5 '+ 3 1 + 7 Evansville, I n d .. . + 1 + 9 11 Louisville, K y .. .. — 1 — 2 + 80 2.50 1.78 + 4 St. Louis, M o .. . . — 1 + 10 - - 65 1.63 2.15 + 17 Springfield, M o .. . —11 —22 —8 — 61 1.64 1.26 Jackson, Tenn. . . — 19 — 13 —2 Memphis, T en n .. . —11 10 1*72 1.50 + 18 + 41 *A11 other c itie s. . — 5 1.63 + 54 1.64 + 4 + 5 Sth F. R. D istrict — 4 + 14 + 61 1.63 2.08 + *E1 Dorado, Fayetteville, Pine Bluff, A r k .; Alton, Harrisburg, Mt. Vernon, 111.; Vincennes, I n d .; Danville, H opkinsville, M ayfield, K y.; Chillicothe, Mo. Trading days: June, 1942— 26; M ay, 1942— 25; June, 1941— 26. Outstanding orders of reporting stores at the end of June, 1942, were 15 per cent smaller than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding June, 1, 1942, collected during June, by c itie s : Installm ent E xcl. Instal. Installm ent Excl. Instal. Accounts Accounts A ccounts Accounts Fort Sm ith. . •— ^ 39% Q u in cy ..............22% 57% L ittle R o ck . . 17 46 St. L o u is. . . . 26 68 58 Other cities. . 14 L ouisville . . . 22 59 55 M emphis . . . . 31 Sth F. R. D ist. 24 61 + + IN D E X E S OF DEPARTM ENT STORE SALES AND STOCKS 8th Federal Reserve District (1923-1925 average = 100) June, 1942 May, 1942 April, 1942 June, 1941 Sales (daily average), U nadjusted................... . . 99 108 120 92 Sales (daily average), Seasonally adjusted. . . 108 108 120 10.0 Stocks, U nadjusted................................................ 131 125 76 . . 132 122 130 80 Trading days: June, 1942— 26; May, 1942— -25; June. 1941— 26. SPECIALTY STORES N et Sales June, 1942 6 m os.’42 compared with to same M ay,’42 June,’41 period ’41 Stocks on Hand June 30,’42 comp, with June 30,’41 Stock Turnover Jan. 1, to June 30, 1942 1941 M en’s Furnishings . + 5% + 2 1 % +33% + 52% 1.52 1.62 Boots and Shoes. 4 +35 +27 + 93 3.78 4.49 Percentage of accounts and notes receivable outstanding June 1, 1942, collected during J u n e : M en’s Furnishings.......................49% B oots and S h o es............................ 45% CHANGES IN PR IN C IPA L ASSETS AND L IA B IL IT IE S FED ERA L RESERVE BANK OF ST. LO U IS (I n thousands of dollars) Industrial advances under Sec. 13b. Other advances and rediscounts. . . . T ii lv 15, 15. July 1942 8 390 156,521 156,919 — 5 + 35,996 + 3 5 ,9 9 1 + + + + Total reserves.................................................... T otal d e p o s its .................................................. F. R. N otes in circulation............................ 656,119 436,575 374,287 — 5,249 + 17,050 + 1 3 ,1 8 1 + 86,717 + 18,159 + 122,489 Industrial commitments under Sec. 13b. 2,197 + + $ Change from T ii - - 16, June 17, July 1942 1941 -0- 169 8 390 51,004 51,402 1,850 Pieces A m ounts Checks (cash items) handled................................ 5,780,089 $2,083,838,843 Collections (non-cash item s) handled................ 146,597 37,704,894 Transfers of fu nds....................................................... 4,864 601,660,183 Currency received and counted.............................. 11,610,,970 42,740,823 Coin received and counted....................................... 11,590,754 993,610 Rediscounts, advances and com m itm ents......... 11 1,720,000 N ew issues, redemptions, and exchanges of securities as fiscal agent of U . S. Govt., etc. 243,269 301,203,951 ............................... Bills and securities in custody — coupons clipped 23,028 RATES OF T H IS BANK FOR ACCOMMODATIONS U N D E R TH E FEDERA L RESERVE ACT 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, secured by direct obliga tions of the U nited States or by such Government guaranteed obligations as are eligible for collateral, under paragraph 8 of section 13............................................1 % per annum Rediscounts and other advances to member banks un der sections 13 and 13a..............................................................1 % per annum Advances to member banks under section 1 0 (b )................ 1^4% per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the United States, under paragraph 13 cf section 1 3 ........... 3 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 13b: ( 1 % to (a) On portion for which such institution is obligated I I 1/ % per annum (b) On remaining portion — N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial (2 J ^ % to businesses under section 13b................................ ............... (5 % per annum Commitments to established industrial or commercial businesses under section 13b.....................................................10% to 25% of the loan rate charged borrower with a minimum rate of % per annum. Commitments to member banks, nonmember banks, and other financing institutions, under section 13b................ 10% to 25% of the loan rate charged borrower with minimum rate of % per annum provided: that no commitment will be given on loan on which bor rower is charged over 5% per annum. P R IN C IPA L RESOURCE A ND L IA B IL IT Y ITEM S OF REPORTING M EM BER BANKS Change from Tn ~ ' June 17, July 16, 1942 1941 ,$230,672 - 5,490 ___ 3,935 Commercial, industrial, a - 1,007 — 1,831 18,203 3,698 14 — 728 Loans to brokers and dealers. . . . * . . Other loans to purchase and carry securities. 9,781 163 .— 2,921 1,066 Real estate loans....................................... . 60,730 + 1,219 + 87 34 661 Loans to banks........................................... Other loans ................................................... . 70,,120 - 1,768 .— 4,220 3 69,556 + 40,440 + 69,556 65,579 [-21,225 + 64,904 - 3,889 + 30,089 64,353 , 295,620 -19,235 + 82,012 U. t 33,824 + 1,316 42,535 Other sec u r ities.............................. 118,628 8,529 - 2,577 + -62,070 57,625 Balances with dom estic banks. . 149,618 . 695,827 + 2 6 ,3 0 6 + 116,243 . 184,251 + 114 .— 6,813 48,253 + 35,836 + 27,00,7 U . S. Government dep osits.................. Interbank deposits..................................... . 442,457 — 66,478 + 13,919 *Other than interbank and Government deposits, less cash items on hand or in process of collection. Above figures are for 24 member banks in St. L ouis, Louisville, M em phis, L ittle Rock and E vansville. Their resources comprise approximately 75% of the resources of all member banks in this district. T ii lv 15, 15. July 1942 (In thousands of dollars) D E B IT S TO IN D IV ID U A L ACCOUNTS (I n thousands of dollars) 8,062 , Ark.$ “ 17,527 “ 1,741 “ 61,211 L ittle Rock, . .. “ 20,679 Pine Bluff, .. Texarkana, -Ark. -Tex. 22,189 E .S t.L .-N at.S .Y '.,111. 76,234 “ 13,904 E vansville,......... Ind. 54,754 L o u isv ille ,......... .K y . 275,181 Owensboro, . . . 8,014 5,610 M iss. .M o. 876,519 “ 3,213 “ Springfield, 23,832 Tenn. 189,951 . ... . .1,658,621 *A lton ,................ . , 111. 13,411 * P a d u c a h ,...........K y . 9,158 *Cape Girardeau, Mo. 4,251 “ *Hannibal, 3,870 “ *Jefferson City, 16,135 *Jackson, . . . . .Tenn. 7,137 Fort Sm ith,. . . . . *New reporting centers. (Completed July 24, 1942) May, 1942 June, 1942 $ 7,325 16,711 1,851 71,278 18,880 23,476 70,351 12,50,6 46,181 247,562 7,589 5,555 1,030,126 3,069 23,553 191,0.86 1,777,099 11,067 7,818 3,946 3,651 20,766 6,566 June, 1941 $ 6,827 13,047 1,692 49,224 8,0,97 8,422 54,082 11,652 42,260 256,645 6,282 5,331 831,580 2,466 21,191 191,856 1,510,654 .. t.. June,’42, comp, with M ay,’42 June,’41 + + — + + + + + + + + + — + + + + + 10% 5 6 14 10 5 8 11 19 11 6 1 15 5 1 1 7 21 17 8 6 22 9 - 18% - 34 - 3 - 24 -155 -163 - 41 - 19 - 30 - 7 - 28 - 5 - 5 - 30 - 12 1 + io Page 7 INDUSTRIAL PRODUCTION N A TIO N A L SUM M ARY O F C O N D ITIO N S 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 Federal Reserve m onthly index of physical volume of pro duction, adjusted for seasonal variation, 1935-39 average= 100. L atest figures shown are for June, 1942. Latest figure, 177. COST OF LIVING Bureau of Labor Statistics’ indexes, 1935-39 average = 1 0 0 . Fifteenth of month figures. L atest month in each calendar quarter through September, 1940, m onthly thereafter. Latest figures shown are for June, 1942. W ednesday figures. Commercial loans, which include in dustrial and agricultural loans, represent prior to May 19, 1937 so-called “ Other loans” as then reported. Latest fig ures shown are for July 15, 1942. EXCESS RESERVES OF MEMBER BANKS 1936 1937 1938 1939 1940 1941 1942 Wednesday figures, partly estimated. Latest figures shown are for July 15, 1942. Page 8 Industrial activity continued to advance during June and the first half of July. Volume of goods distributed to consumers continued substantially below a year ago and commodity prices generally showed little change. Production— Industrial output increased further in June and the Board’s seasonally adjusted index rose from 174 to 177 per cent of the 1935-39 aver age. Production in the machinery, transportation equipment, and other arma ment industries continued to advance, reflecting further progress toward meeting the requirements of the war production program. Steel production declined somewhat in June but increased to earlier high levels in the first three weeks of July. Lumber production increased seasonally in June, while in the furniture industry, where activity usually rises at this time of year, there was a decline, reflecting in part the fact that a number of plants in the industry are being converted to the manufacture of war products. In industries manufacturing non-durable goods, output as a whole showed little change from May to June. Textile production declined somewhat, reflecting a reduction in activity at cotton mills from earlier peak levels. Paperboard production decreased sharply further and there was also a de cline in activity in the printing industry. On the other hand, output of man ufactured food products increased and shoe production showed less than the customary seasonal decline. Mineral production continued large in June. Coal production was main tained at peak levels; output of crude petroleum showed little change, fol lowing the sharp decline that occurred during March and April. Lake ship ments of iron ore in June amounted to 12,600,000 gross tons and at the month end stocks at lower Lake ports totaled 31,000,000 tons as compared with 26,600,000 tons a year ago. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, continued to increase in June and was 57 per cent above the previous record high month of August, 1941. The sharp rise in June reflected a continued increase in awards for public projects, which accounted for about 93 per cent of all contracts let during the month. Distribution— Distribution of commodities to consumers declined some what further in June. Smaller sales were reported by both department stores and mail-order houses, while sales at variety stores were maintained at about the May rate. In the first half of July department store sales showed less than the customary sharp seasonal decline. Volume of railroad freight traffic was maintained in large volume during June and the first half of July. The number of cars loaded was below the level that prevailed a year ago, however, reflecting a sharp reduction in carloadings in less-than-carload lots as a result of orders by the Coordinator of Transportation which raised the minimum permissible weights for such load ings and thereby effected a fuller utilization of existing equipment. Commodity Prices — Prices of most commodities both at wholesale and retail continued to show little change from the middle of June to the middle of July. Prices of cotton, wool, and some other agricultural commodities, which had declined in the early part of June, advanced in this period. About twenty additional maximum price schedules were announced cover ing a wide variety of products and in some cases requiring price reductions. On the other hand, Federal approval was given for higher prices on various processed fruits and vegetables, textile products, petroleum products sold on the East Coast, and services supplied to consumers. Retail prices of uncontrolled foods advanced sharply from May to June and the Bureau of Labor Statistics’ price index for all foods rose 1 ^ points to 123 per cent of the 1935-39 average — an increase of one-fourth since the beginning of the current advance in March, 1941. Bank Credit— Member banks in leading cities increased their holdings of Government securities sharply during the first half of July. Purchases in cluded portions of increased Treasury bill issues and of the new 2 per cent 7- to 9-year bond. This followed a substantial growth in the second quarter of the year wThen member banks absorbed about $3.3 billion, or more than half of the increase in Treasury open-market issues. All classes of banks showed large increases, the largest percentage increases being in Chicago and at reserve city banks. Excess reserves of member banks have been at a lower level in July than in June, because of increased need for reserves arising out of deposit growth, the continued currency drain, and a large temporary increase in Treasury deposits at Reserve Banks. Substantial system open-market operations par tially offset the loss of reserves from these sources. The decrease in excess reserves was concentrated in New York and Chicago, reducing excess funds in those cities to low levels. Adjusted demand deposits continued to rise at reporting banks in leading cities except in New York. Yields on United States Government securities and other money rates have shown little change in recent weeks.
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