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MONTHLY REVIEW Of Agricultural, Industrial, Trade and Financial Conditions in the Eighth Federal Reserve District Released for Publication On and After the Morning of June 29,1935 JOHN S. W O O D , Chairman and Federal Reserve Agent FEDERAL WORKING CAPITAL LOANS Supplemental information (from Federal Reserve Bulletin, etc.) re garding loans and commitments under Section 13b of the Federal Reserve Act, which authorizes the Reserve banks to aid in providing working capital for established industrial or commercial businesses for periods of not ex ceeding five years: “ Under the terms of the amendment . . . the prob lem of obtaining funds for working capital has been facilitated for industry and commerce, and a safe and profitable use for funds has been provided for the b a n k s .” “ Obviously there must be a sound basis for the loans. There must be grounds for a reasonable expec tation that the enterprise will succeed if it gets the assistance for which it applies.” Businesses Assisted “ T a k i n g th e e n tir e c o u n tr y , th e f o l l o w i n g o f b u s in e s s c o n c e r n s h a v e r e c e iv e d a s s is ta n c e : typ es “Manufacturers: Aircraft; autos, trucks and acces sories; chemicals; electrical goods; food products; office and household equipment; hides and leather; jewelry and silverware; lumber and builders’ supplies; machinery and machine tools; metals; paper products; railway equipment; rubber goods; stone, clay, and glass products; textiles; wearing apparel; wood prod ucts, etc. “Wholesale and Retail Trades: Autos and acces sories; chain and department stores; clothing and dry goods; jewelry; drugs, tobacco, and liquors; florists and nurseries; food products; furniture; grain and feed; hardware and machinery; lumber and builders’ supplies; oil, etc. “Miscellaneous: Contractors and construction; hotels, apartments and restaurants; laundries, cleaners and dyers; mines and quarries; oil and gas produc tion; printing and publishing; shipbuilding; trans portation, etc.” Volume of Loans “ Industrial advances by the twelve Federal Re serve Banks and commitments to make such advances have continued to increase during 1935. By June 12, $88,110,000 of applications had been approved . . . The volume of industrial advances outstanding on June 12 was $27,282,000 and of commitments outstanding $20,008,000.” The commitments outstanding and the working capital loans held by the Federal Reserve Bank of St. Louis, as well as the rates thereon, are given on p-age 7 of this review. J Additional information will be furnished on request. C. M. STEW ART, Secretary and Ass't Federal Reserve Agent RESERVE BANK OF ST. J. VION PAPIN, Statistician LOUIS AKEN as a whole, Eighth District industrial and commercial activity during May and the first half of June developed no marked change in trends as contrasted with the like period imme diately preceding. Such changes as did occur were ascribable chiefly to seasonal influences and to pecu liar conditions arising from the late spring, extra ordinary rainfall, more or less serious floods and actual and moral reactions resulting from the United States Supreme Court’s NRA decision. Retail trade was adversely affected by the unfavorable weather, and for the first time in twenty months, with the exception of March, 1935, failed to show an increase over the corresponding period a year earlier. Con siderable spottiness and unevenness developed in wholesaling and jobbing lines, but despite the dis position to cautious and conservative buying, en gendered by price uncertainties, in a majority of classifications investigated by this bank, there were increases in May sales over those for that month in 1934, and in several instances the May totals were the highest for any single month since 1930. Ex tremely favorable exhibits were made by boots and shoes, electrical supplies, furniture and hardware. The late, wet spring militated against the usual seasonal improvement in textiles, apparel and some other lines which are particularly sensitive to weath er conditions. T Employment conditions in the district under went moderate improvement, being favorably af fected by the absorption of numerous workers in agricultural and other seasonal occupations also by the settlement of labor trouble in various localities. Distribution of automobiles in the district, accord ing to dealers reporting to this bank, was seasonally smaller in May than April, but recorded a substan tial gain over the May, 1934, total. Production of lumber increased, demand for certain descriptions being stimulated by the strike of lumber workers in Washington and Oregon. Industrial consumption of electric^ current in the chief cities increased in May, both as Compared with the preceding month and a year ago. Production of soft coal in fields of this Page 1 district during May, while slightly below that month in 1934, increased sharply over the April output, owing in large measure to a speeding up of operations in expectation of a strike of bituminous miners about mid-June. Labor difficulties in the lead and zinc sections were reflected in sharply cur tailed ore production. The Eighth District crop season, according to the U. S. Department of Agriculture, is opening under conditions that stand out sharply in contrast with those prevailing a year ago. Instead of recordbreaking high temperatures which prevailed in 1934, the weather through the central states has been abnormally cold and wet. April and May brought heavy rains, and precipitation has persisted into the third week of June. As a result of the excessive moisture, preparations for and planting of spring grains, cotton, Jobacco and other crops are consid erably behind the usual seasonal schedule. Consid erable replanting and abandonment of acreage is indicated. Floods of major proportions of acreage is indicated. Floods of major proportions prevailed along the Mississippi River and its tributaries, waters of the Missouri River reaching the highest stage since 1903. Thousands of acres of rich farm lands were inundated, and because of the lateness of the season, much of this land will probably be un workable this year. Retail trade in May, as indicated by sales of department stores in the principal cities, was 2.7 per cent more than in April and 7.8 per cent below the May, 1934, total; cumulative total for the first 5 months was 2.0 per cent smaller than for the comparable period a year ago. Combined sales of all wholesaling and jobbing firms reporting to this bank in May were larger by 28 per cent and 19 per cent, respectively, than a month and a year earlier; for the first five months cumulative sales of these firms fell 3 per cent below the like period in 1934. The dollar value of permits for new construction in the five largest cities in May was 5.5 per cent smaller than in April, and 77 per cent more than in May, 1934; for the year to May 31, the aggregate was 50.4 per cent greater than for the like period a year ago. Debits to individual accounts in May were 8.7 per cent and 14.6 per cent larger, respectively, than a month and a year earlier, and for the first five months the total exceeded that of the like period last year by 8.8 per ,cent. Freight traffic of railroads operating in this dis trict was stimulated during the past several weeks by increased loadings of coal and coke, caused by the threatened strike of bituminous miners. Total Page 2 volume continued below the same period a year earlier but was substantially greater than in 1933. The late spring is reflected in a smaller than usual movement of early fruits and vegetables. The sharp decrease noted in the livestock classification as con trasted with a year ago is accounted for by the transfer of livestock from the drouth areas in the earlier period. For the country as a whole, loadings of revenue freight for the first 23 weeks this year, or to June 8, totaled 13,337,082 cars, against 13,548,417 cars for the corresponding period in 1934 and 11,500,184 cars in 1933. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 73,378 loads in May, which compares with 75,298 loads in April and 77,849 loads in May, 1934. During the first nine days of June the interchange amounted to 22,336 loads, against 20,954 loads during the corresponding period in May, and 23,780 loads during the first 9 days of June, 1934. Passenger traffic of the report ing lines decreased 4 per cent in May as compared with the same month in 1934. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in May was 151,300 tons, against 154,070 tons in April, and 105,954 tons in May, 1934. Reports relative to collections in the district during the past thirty days reflect the same general trends as during the preceding several months. Questionnaires addressed to representative interests in the several lines scattered through the district show the following results: Excellent May, 1935................. 6.3% April, 1935................. 2.3 May, 1934................. 4.3 Good Fair 41.0% 36.8 47.2 44.4% 55.2 43.2 Poor 8.3% 5.7 5.3 Commercial failures in the Eighth Federal Re serve District in May, according to Dun and Bradstreet, numbered 45, with liabilities of $272,085, which compares with 42 defaults in April, with liabilities of $460,527, and 22 failures for a total of $217,670 in May, 1934. MANUFACTURING AND WHOLESALING STOCKS ON H AN D 5 months ending M ay 31, 1935 M ay, 1935 com pared to M ay 31, 1935 compared to M ay 31, 1934 com p, to 1934 M ay ’ 34 A pr. ’ 35 + 76.1% Boots and Shoes.......... + 4 2 .7 % + 6 1 .8 % — 1.4% + 4 0 .1 — 5.7 Drugs and Chemicals.. — 3.7 + 0.7 — 18.7 — 14.9 — 13.2 — 2.3 + 14.0 + 17.3 Electrical Supplies...... + 2 9 .3 + 13.4 + 2 3 .2 — 9.3 + 0.5 + 32.6 + 10.0 + 6.2 + 6.7 + 9.5 — 8.7 + 6.8 + 8.0 + 11.3 N E T S A L E S C O M P A R IS O N C O M M O D IT Y + 19.4 + 2 7 .9 — 2.8 + 0.2 Boots and Shoes — May sales of the reporting firms increased from April, following the usual sonal trend. The extent of the increase, how ever/ was considerably greater than the average during the past several years, and the total with the excep tion of May, 1933, was the largest for any single month since the fall of 1929. There was no change in prices during the period, but generally levels were from 5 to 8 per cent higher than a year ago. Clothing — Adverse effects of the unfavorable weather, which has prevailed generally through the district since early spring were reflected in reports of the firms supplying their statistics to this bank. May sales of the reporting group of clothiers were 2 per cent greater than a year ago, but about onefourth smaller than the April total this year. Stocks increased 10 per cent between May 1 and June 1, and on the latest date were 4 per cent less than at the same time in 1934. Drugs and Chemicals — A lessened demand for heavy drugs and chemicals from the general manu facturing trade was partly responsible for the slight decline in sales of the reporting interests in May as contrasted with the same month last year. The wet and backward spring has resulted in an unusually heavy call for spraying materials of all descriptions, due to the extraordinary infestation of fungus and insect pests. Inventories continue substantially larg er than a year earlier. Prices showed little change during the period, but as of June 8, according to the Bureau of Labor Statistics, were 7 per cent higher than on the comparable date a year earlier. Dry Goods — Excessive rainfall, accompanied by more or less serious flood conditions, tended to hold down the volume of May and early June busi ness in this classification. Seasonal merchandise moved in relatively smaller volume than a year and two years earlier. The decrease in May sales of the reporting firms was contraseasonal. Price uncertain ties had a retarding influence on forward buying. Electrical Supplies — Despite the cool weather, which has held down the movement of fans, refrig eration units and other seasonal items, business of the reporting firms continued the steady betterment of recent months. May sales of the reporting group increased from April by considerably more than the calculated seasonal amount, and were the largest for any single month since December, 1929. Flour — Production at the twelve leading mills of the district in May totaled 185,589 barrels, against 200,569 barrels in April and 224,648 barrels in May, 1934. Stocks showed about the usual seasonal de crease from April to May. Business during the past thirty days continued quiet and featureless. Pur chasing by the domestic trade was almost exclu sively on a necessity basis, though some improve ment was reported in shipping directions on flour previously acquired. Export business was confined chiefly to routine transactions with the LatinAmerican countries. Mill operations were at from 45 to 50 per cent of capacity. Prices declined slight ly in mid-June in sympathy with the downturn in cash wheat. Furniture — Sales of practically all lines during May, according to the reporting interests, extended the generally upward trends which began during the opening months of the year. Advance buying is re ported in larger volume than at the corresponding period a year ago. Inventories expanded moderately from April to May, but continued substantially smaller than last year. Groceries — Handicaps of unseasonably cold, wet weather and serious flood conditions failed to retard business in this classification; May volume, according to the reporting firms, showed an increase from the preceding month of greater than average proportions. While increases over both a month and a year earlier were general in all lines, relatively the best showing was made by staples. The movement of early fruits and vegetables had a stimulating effect on trade in many localities. Hardware — As during each preceding month this year, with the exception of March, May sales of the reporting firms showed an increase over the cor responding period a year earlier, and the total was the largest for the month since 1930. Sales of paints, builders' hardware and tools, and kindred lines con tinued the moderate improvement of the preceding month. Iron and Steel Products — Activities in the iron and steel industry in this district during the closing weeks of May and the first half of June developed little change as a whole as contrasted with the simi lar period immediate preceding. In certain lines some slowing down was noted, due to seasonal influ ences and hesitancy on the part of consumers. Else where, however, operations were well sustained, and in the immediate past purchasing of a variety of commodities has broadened, owing mainly to market stability and the announced policy of numer ous producers to maintain prices, wage scales and other practices which were in effect under the code. For the most part consumer stocks are low, and while it has been the policy in many quarters to use up inventories before making new commitments, necessity buying has accounted for the movemeiit of substantial tonnages of both finished and raw materials. Moderate betterment was noted in de mand for galvanized materials, and purchasing of tin plate continued in considerable volume. Manu Page 3 facturers of farm implements reported some slowing down in operations, but the rate continued consid erably higher than at the same period in a number of years. Operations at stove and range plants showed less than the usual seasonal recession, and May shipments were reported the highest for the month since 1930. Operations at the steel mills at mid-June were slightly below the rate obtain ing a month earlier. Shipments of pig iron to melters in the district in May fell below the April total. Aside from changes in certain grades of scrap, mainly in the nature of adjustments, there has been practically no change in iron and steel prices since the emergence of the industry from code control. For the country as a whole, production of pig iron in May, according to the Magazine “ Steel,” totaled 1,735,577 tons, against 1,671,556 tons in April and 2,057,471 tons in May, 1934. Steel ingot production in the United States in May amounted to 2,602,054 tons, which compares with 2,606,311 tons in April and 3,352,788 tons in May, 1934. RETAIL TRADE The condition of retail trade is reflected in the following comparative statements showing activi ties in the leading cities of the district: Department Stores F ort Smith, Ark.. Louisville, K y ...... M emphis, Tenn.... St. Louis, M o ...... Springfield, M o.... A ll Other Cities.. Stocks ______ N et Sales Comparison on H and 5 mo. ended M ay, 1935 M ay 31/35 M ay 3 1 /3 5 compared to to same com p, to M ay 1934 A pr. 1935 period ’ 34 M ay 3 1 /3 4 + 17.8% + 6.5% + 5.0% .. + 0.8% — 11.0 . — 22.3 — 17.6 — 45.4 — 7.0 . + 0.2 + 1.2 — 6.0 — 3.6 + 11.8 — 4.7 — 7.5 — 5.0 — 3.6 + 2.7 + 4.7 — 9.0 + 9.6 — 2.4 + 9.6 — 8.8 + 1.1 — 2.6 — 4.3 + 16.3 + 0.6 — 19.6 . . + 1.9 2.5 — 0.9 + 3.9 + 2.7 + 2.7 — 2.0 — .2.5 ..— 7.8 Stock Turnover Jan. 1, to M ay 31, 1935 1934 1.12 1.08 .90 .78 .95 .93 .95 .97 1.53 1.49 1.26 1.36 1.57 1.52 .94 .78 1.23 1.16 1.41 1.39 Percentage of collections in May to accounts and notes receivable first day of May, 1935. PERCENTAGE OF COLLECTIONS BY CITIES E l D orado, A rk ....................... 57.6% M em phis, T en n ......................... 44.1% F ort Smith,. A rk ........... ...... ,....36.8 Springfield, M o .........................24.5 Little R ock , A rk .....................37.0 St. Louis, M o ...... t,.................... 53.4 Louisville, K y ............................51.9 A ll Other Cities........................ 35.8 8th F. R . D istrict......................... 49.0% Retail Stores Stock Stocks N et Sales Comparison on Hand T urnover 5 m o. ended M ay, 1935 M ay 31/3 5 M ay 3 1 /3 5 Jan. 1, to com pared to to same com p, to M ay 31, M ay 1934 A pr. 1935 period *34 M ay 3 1 /3 4 1935 1934 Men’s Furnishings ............ — 12.3% B oots and Shoes ....................... — 10.1 — 15.4% — 0.7% — 3.2% 1.03 .99 — 16.4 + + 1 7 .2 1.76 2.08 4.3 AUTOMOBILES Combined passenger car, truck and taxicab pro duction in the United States in May, was 364,721 against 477,746 (revised figure) in April, and 331,652 (revised figure) in May, 1934. May distribution in the Eighth District, accord ing to dealers reporting to this bank, decreased as Page 4 compared with the preceding month, but was sub stantially greater than for the corresponding period last year and the largest for the month since 1930. The decrease in the month-to-month comparison was seasonal in character, though somewhat heavier than the average during the past decade. Relatively the best results were achieved by dealers in the large cities, the continuous rains tending to hold down purchasing in the rural areas. While fairly diversified, demand still centers chiefly in the low price field, more than 50 per cent of the total sales being accounted for by dealers handling vehicles of the two leading producers in that category. Demand for trucks of all descriptions was less active than heretofore, May sales being 23 and 38 per cent smaller, respectively, than a month and a year earlier. Advent of the touring season had a moder ately stimulating effect on the trade in parts, acces sories and tires. Sales of new passenger cars by the reporting dealers in May were 14 per cent smaller than in April and 30 per cent greater than in May, 1934. Stocks on June 1 were slightly smaller than thirty days earlier and 8 per cent less than a year ago. Reversing the trend in inventories of new cars, stocks of salable secondhand vehicles increased 12 per cent between May 1 and June 1, and on the latest date were approximately 60 per cent larger than at the same time a year ago. May sales of used cars wrere 6 per cent and 18 per cent larger respec tively, than a month and a year earlier. Generally, selections of secondhand cars were more complete and of higher quality than has been the case in a number of years. According to dealers reporting on that item, the ratio of deferred payment sales to total sales in May was 43 per cent, against 46 per cent in April, and 46 per cent in May, 1934. CONSUMPTION OF ELECTRICITY Public utilities companies in the five largest cities of the district report consumption of electric current by selected industrial customers in May as being 6.7 per cent larger than in April, and 8.2 per cent more than in May, 1934. Detailed figures follow : A p r., M ay, 1935 M ay, N o. of 1935 1935 com p, to Custom ers * K .W .H . * K .W .H . A p r., 1935 2,673 + 10.7% 2,958 Evansville .... 40 1,710 + 12.3 1,523 L ittle R ock.. 35 7,679 7,745 Louisville .... 82 + -9 1,549 1,728 — 10.4 19,451 17,702** + 9.9 T otals......382 ^ 33,413 * In thousands (000 om itted). **R evised figures. 31,305** + 6.7 M ay, M ay, 1935 1934 com p, to * K .W .H . M ay, 1934 2,686** + 10.1% 1,627 + 5.1 6,988** + 10.8 1,758 — 11.9 17,828** + 9.1 30,887** + 8.2 LIFE INSURANCE Sales of new, paid-for, ordinary life insurance including the Eighth District during May, the pre ceding month, and a year ago, together with the cumulative totals for the first five months this year and the comparable period in 1934 are shown in the following table: ( I n thousands M ay, of dollars) 1935 Arkansas.......... $2,57^ $ Illinois.............. 40,539 11,003 Indiana............. K en tu cky......... 5,455 M ississippi....... 2,188 15,396 M issouri........... T ennessee........ 5,627 A pr., 1935 3,022 $ 44,255 12,561 6,390 2,228 14,949 5,526 M ay, 1934 3,018 48,695 12,057 5,537 2,792 20,960 6,490 T otals........... m a ] U nited O i. i. y ^ States.. C A A ^ OA 88,931 540,280 f? OOA O1 O 82,781 500,380 CA A OOA Jan.-M ay, In c., 1935 1934 $ 14,729 $ 14,650 234,060 230,585 59,798 55,272 28,658 26,771 11,404 11,995 83,479 91,935 30,246 30,164 99,549 462,374 461,372 C OOZ A O A Ol 588,421 2,765,226T 2,683,981 Cumul. change -j- 0 ^ % + 1.5 -f- 8.2 - f 7.0 — 4.9 — 9.2 + 0.3 - f 0.2 A -f- ^ 3.0 I BUILDING The dollar value of permits issued for new con struction in the five largest cities of the district in May was 5.5 per cent smaller than in April, and 76.6 per cent more than in May, 1934. As in other sec tions of the country residential construction in the Eighth Federal Reserve District continues to show moderate improvement over the correspond ing periods a year and two years earlier. Produc tion of portland cement for the country as a whole in May, totaled 8,222,000 barrels, against 6,136,000 barrels in April, and 8,554,000 barrels in May, 1934. Building figures follow : E vansville .. L ittle R ock Louisville .. M emphis ... St. Louis.... N ew construction______ Permits *C ost ' 1935 1934 1935 1934 34 21 $ 48 $ 6 10 16 2 15 54 13 251 88 90 149 63 87 331 163 540 316 M ay Totals A pril “ Mar. *In thousands 519 362 904 529 378 957 506 353 1,365 (000 om itted). 512 1,585 338 _______ Repairs, etc. Permits *C ost 1935 1935 1934 1934 109 190 $ 20 $ 41 98 52 25 98 80 90 42 140 196 162 126 74 250 242 100 106 725 745 734 790 761 557 340 317 352 386 323 222 AGRICULTURE Throughout May and the first half of June, Eighth District weather conditions continued unfav orable for farm operations and the growth and development of crops. Unseasonably low tempera tures and excessive precipitation were the rule, whereas sunshine and warm days were greatly needed for preparing the soil and planting corn, cot ton, tobacco and other spring crops. The unusually heavy rainfall affected rivers and streams, causing major floods which have resulted in distress and heavy losses to farmers in the areas bordering on them. Even in the uplands, low lying fields and all land with inadequate drainage were covered with standing water, and the soil rendered unworkable. The most acute flood conditions were along the Missouri River, which stream in early June reached the highest stage since 1903. At mid-June, accord ing to reports of State agricultural departments, heavy abandonment of crops was indicated,, and more replanting will be required than has been the case in a number of years. All descriptions of farm work are from two to four weeks in arrears of the usual seasonal schedule. The continuous cloudy, wet weather seriously hin dered spraying of fruit trees and other vegetation, and in apple orchards considerable scab has devel oped. However, fruit prospects are generally fav orable and much better than a year ago. The mois ture has greatly benefited pastures, which have made excellent growth, many fields which were be lieved killed by last year’s drouth having been re vived. Tame and wild hay have also been greatly benefited, the June 1 condition in all states of the district being well above the 10-year (1923-1932) average. With more stable feed conditions prevail ing, milk and egg production have been gradually returning towards normal levels. The farm labor situation showed no change worthy of note as con trasted with the preceding thirty days. Corn — In all sections of the district rains have seriously delayed planting of corn. Typical of con ditions in other states are those described in the Illinois Crop Report as of June .1, which stated that field work in May was nearly at a standstill due to heavy rainfall. In the southern two-thirds of the state rainy days ranged from 21 to 25 in the central, and from 14 to 19 in the southern counties. By June 1 only 41 per cent of the state corn acreage had been planted as compared with 93 per cent usually planted on that date. Northern counties had planted about 80 per cent of their corn, but elsewhere plant ings ranged from 4 to 53 per cent. Fields plowed up hard and cloddy, requiring extra work to prepare for planting. Where the plant has come up, stands are irregular and germination poor; much replant ing will be necessary, and in many sections farmers are doing this work by hand. Quite generally grow ers are using early maturing varieties to offset de layed seeding, but even where this has been done, the backward season is still a handicap which can be overcome only by unusually favorable weather until harvest. Attention is called to lesser yields possible with 90-day corn as compared with other varieties. Cotton — In the Eighth District, according to county agents, marketing associations, and other sources of information available to this bank, the cotton crop averages the poorest start since 1927. Over the northern stretches of the area, planting at the middle of June was far from complete, and due to the heavy rains and floods, much replanting will be essential. Many fields are infested with grass and weeds, and this condition may become acute unless a turn in the weather affords an opportunity to cultivate them. A rainy May is usually adverse for cotton, and that month this year was unusually wet, rains have persisted through early June. Sta tistics compiled by the National Fertilizer AssociaFage 5 lion indicate that tag sales in states including the Eighth District in May were slightly smaller than for the same month a year and two years earlier, but for the period January-May this year total sales were 15 and 19 per cent greater, respectively, than during the comparative periods in 1934 and 1933. The trend of raw cotton prices was downward. In the St. Louis market the middling grade ranged from 11.00c to 12.10c per pound between May 16 and June 15, clos ing at 11.65c on the latest date, which compares with 12.00c on May 16, and 11.75c on June 15, 1934. Fruits and Vegetables — Latest information issued by the U. S. Department of Agriculture and the agricultural departments of the several states, growers associations, etc., indicate that tree fruit prospects are considerably better than in recent years. Outlook for cane fruits is also favorable, and the condition of grapes in the principal producing sections is above that at the corresponding period a year ago. Based on June 1 conditions, the yield of peaches in states including the Eighth District is estimated at 9,935,000 bushels, as against 6,578,000 bushels harvested last year and the 5-year average, 1928-1932, of 7,056,000 bushels. Apple prospects are somewhat above average, though spotty, and reports of scab infestation and blight are causing considerable concern. The codling moth flight has been heavy this season, but has been under control as emergence has been uniform and intensive spray ing has been practiced in all commercial orchards. The condition of the early potato crop in southern states is reported slightly above average, despite some deterioration during May. In the north the potato outlook is less favorable, and in the lowlands much replanting will be necessary because of rotting of seed in the ground. Live Stock — The condition of live stock gener ally through the district underwent considerable improvement during May, due mainly to the further betterment in pastures. The spring lamb crop in virtually all states of the district made considerable progress during the past thirty days, and quality is generally high. According to the U. S. Department of Agriculture, stocks of old hay are much below average, but indications are that hay-consuming animals on farms will be no greater numerically than last winter, and 3 to 4 per cent less than the average number wintered during the past decade. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: M ay, 1935 Cattle and Calves......110,911 H o g s ..............................165,903 H orses and M ules...... 4,265 Sheep ........................... 71,985 Page 6 R eceipts Shipments________________ A pril, M ay, M ay, April, M ay, 1935 1934 1935 1935 1934 100,804 108,869 67,831 58,976 51,848 187,207 278,305 116,300 117,875 161,264 6,295 3,315 4,198 6,877 3,454 61,935 55,853 13,906 17,798 5,788 Tobacco — Reports received as of June 14 from county agents, marketing associations and other sources indicate that rains have retarded transplant ing of the burley crop, and it is estimated that fully 10 per cent of the intended acreage had not been planted, the greatest backwardness being in low lands. There are scattered reports of cut worm and insect damage. Farmers have devoted their atten tion to cultivation and replanting, and in many sections the stand is exceptionally good. In the one sucker, air cured and Green River districts planting had been about completed at mid-June. Acreage in these districts is somewhat less than last year. Intended acreage had also been planted in the Clarksville, Hopkinsville and western dark fired districts. Hot, dry wreather is much needed, as fields are weedy and intensive cultivation is needed to produce best results. Winter Wheat — While for the country as a whole, winter wheat prospects improved slightly during May, there was a decrease of 4.7 per cent in the June 1 indicated yield in States of the Eighth District. In its report as of June 1, the U. S. Depart ment of Agriculture estimates the yield in these states at 91,563,000 bushels, against 90,493,000 bush els harvested in 1934, and a 5-year average (19281932) of 82,742,000 bushels. The deterioration dur ing May was caused by unfavorable weather, the crop being badly in need of sunshine. Generally throughout the district, excessive moisture caused rank growth, yellowing and lodging. Leaf rust is prevalent, and there were reports of local damage from hail. Flood damage along the Mississippi and Missouri rivers and many smaller streams has caused a considerable amount of abandonment. COMMODITY PRICES Range of prices in the St. Louis market between May 15, 1935, and June 15, 1935, with closing quo tations on the latter date and on June 15, 1934, f ° ll0 W : Close H igh W heat July ......................per bu..$ .92 * D e c...................... ... N o. 2 red winter N o. 2 hard “ Corn July ................. .... “ “ .9 2 ^ .95 1 .0 5 ^ L ow $ .76H -77'A .79% .83 .92 .7854 " .84M .79 .7 1 ^ * D e c...................... .61V4 .90 .83 *N o. 2 m ixed ... .9 5 ^ .8 7 ^ *N o. 2 white ....... “ Oats .39V2 N o. 2 white ... ... “ .47^2 Flour 5.40 Soft patent..........per bbl. 6.45 7.70 6.85 Spring “ .... .1210 .1100 M iddling Cotton. ..per lb. 5.50 H o g s o n hoof....,..per cwt.10.15 •Nominal quotations, June 15, 1935 $ .77 .77*A .79H .83 ^ .92 .8 0 ^ .74y2 .62 U .86 .90*4 June 15, 1934 $ .94 .5 7 y @ .5 9 H @ .40 5^ 5 .40@ 5.90 6.85 @ 7 .7 0 .1165 8 .40@ 9.80 .92 ?£ .93 y2 .94 A @ .9 4 ^ .96 H .575/6 .59 H .6 oy2 .60 .64 .45 6.40 6.65 2.50 @ 6.80 @ 7 .0 0 .1175 @ 4 .8 0 FINANCIAL Except for a slightly more active demand for funds to finance agricultural operations, seasonal in character, there was little variation in the gener al trend of banking and financial conditions in the Eighth District as contrasted with the preceding several months. tomers’ prime commercial paper, 1 per cent to Sy2 per cent; collateral loans, 3 to 6 per cent; loans secured by warehouse receipts, 1J4 to Sy2 per cent and cattle loans, 5 to 6 per cent. Loanable resources of the commercial banks continue at high levels, and rates on all classes of loans hovered about the low mark of the present year. Requirements of commercial and industrial interests remained in relatively small volume, and liquidation at both city and country banks was in considerable volume. Borrowings of country banks from their city correspondents were negligible, and a further broadening in demand on the part of country financial institutions for commercial paper and other investments for surplus funds was noted. Federal Reserve Operations — Deposits of the Federal Reserve Bank increased between May 13 and June 18, reflecting the sharp rise in member banks’ reserve accounts. As of the latest date, the volume of reserve credit outstanding was virtually unchanged from a month earlier, but throughout the period remained measurably greater than a year ago. Member Banks — Investments of reporting member banks in leading cities, which had moved sharply upward to a new high for the year at midMay, receded as rapidly thereafter and on June 12, had fallen to the approximate level obtaining late March. Total loans of these banks continued the downward trend, and on June 12 were slightly be low a month earlier and 3.4 per cent less than on the corresponding date in 1934. Deposits decreased during the four week period, but continued substan tially higher than a year ago. At $92,550,000, reserve balances on June 12, were 44 per cent and 31 per cent larger, respectively, than a month and a year earlier. A composite statement of the principal resource and liability items of the reporting member banks is given in the following comparative table: June 12, (I n thousands of dollars) 1935 Loans and discounts (incl. rediscounts) Secured by U . S. Govt, obligations and other stocks and bonds....$ 56,954 All other loans and discounts.... 150,432 M ay 15, 1935 June 13, 1934 $ 58,908 148,763 $ 71,007 129,547 Total loans and discounts.............. .. 207,386 207,671 200,554 Investm ents ' U . S. G ov’ t securities................. .. 214,159 Other securities............................. .. 126,840 251,500 127,536 200,519 100,054 T otal investments.............................. .. 340,999 379,036 __300,573 Reserve balance with F. R. Bank.. 92,550 Cash in vault........................................ 9,018 Deposits N et demand deposits..................... 419,080 T im e deposits.................................. 167,706 Government deposits..................... 15,159 64,227 8,572 70,766 7,955 425,641 167,524 17,369 334,090 163,562 21,943 Total 610,534 519,595 deposits.. 601,945 Bills payable and rediscounts with Federal Reserve Bank..................... Num ber of banks reporting.. 19 19 19 T h e total resources of these banks com prise approximately 60.0% of all member, banks in this district. The amount of savings deposits held by selected banks on June 5, was 1.3 per cent greater than on May 1, and 13.7 per cent in excess of the total on June 6, 1934. At downtown St. Louis banks as of the week ended June 15, interest rates were as follows: Cus Changes in the principal assets and liabilities of this bank.appear in the following table: June 18, (I n thousands of dollars) 1935 518 Industrial advances under Sec. 13b.........$ Other advances and rediscounts.............. 64 Bills bought (including participations).. 81 U . S. Securities............................................. 108,200 M ay 18, 1935 $ 558 14 81 108,200 $............. 178 121 93,200 108,863 108,853 93,499 , 186,804 150,481 138,985 162,391 126,063 138,683 182,097 135,897 132,879 409 T otal earning assets.. T otal Reserves T otal Deposits F. R. Bank N otes liability> industrial commitments under Sec. 13b 1,794 1,650 64.5% 61.3% Ratio of reserves to deposit and , June 18, 1934 67.8% Rates charged by the Federal Reserve Bank of St. Louis remain unchanged as follow s: 2 per cent on advances to m em ber banks on eligible paper and/or collateral, whether rediscounts or member bank prom is sory notes, under Sections 13 and 13a. 4 Yz per cent on advances to banks and other financing insti tutions on obligations of established industrial or com m ercial businesses, for w orking capital, under Section 13b. y2 per cent flat for commitments not exceeding six months on obligations o f established industrial or com m ercial businesses, for working capital, under Section 13b. SV2 per cent on direct advances to established industrial or commercial businesses, for w orking capital, under Section 13b. 4 per cent on direct advances to individuals, firms or co r porations (including nonm em ber ban ks), secured by direct obli gations o f the U nited States, under Section 13. 5y2 per cent on direct advances to individuals, partnerships and corporations (exclu din g nonmem ber banks) on eligible paper, under Section 13. Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: April, 1935 M ay, 1934 M ay, 1935 Natl. ,.$ 26,529 3,718 El Dorado, Ark.... Evansville, Ind.... . 20,638 8,058 Fort Smith, Ark..... 3,162 Greenville, Miss.., 1,341 H elena, A rk.......... 31,818 Little R ock, Ark., Louisville, K y ..... . 138,844 87,803 Memphis, Tenn.... 4,207 O wensboro, Ky.... 5,608 Pine Bluff, Ark...„ 6,377 Q uincy, 111............. St. Louis, M o...... 547,852 1,897 Sedalia, M o ........... 13,887 Springfield, Mo.... 4,809 *Texarkana, Ark.,. $ 24,712 3,962 19,594 8,287 3,489 1,531 27,901 140,802 94,187 3,929 5,023 6,676 474,828 1,808 12,235 5,252 $ 20,490 3,239 17,412 7,009 2,658 1,410 21,226 123,811 81,605 3,382 4,008 6,406 480,227 1,652 11,611 4,712 .. 906,548 834,216 790,858 (I n thousands of dollars) M ay, 1935 com p, to Apr. 1935 M ay 1934 + 7.4% — 6.2 + 5.3 — 2.8 — 9.4 — 12.4 + 14.0 — 1.4 — 6.8 + 7.1 + 11.6 — 4.5 + 15.4 + 4.9 + 13.5 — 8.4 + 2 9 .3 % + 14.8 + 18.5 + 15.0 + 19.0 — 5.0 + 4 9 .9 + 12.1 + 7.6 + 2 4 .4 + 39.9 — 0.5 + 14.1 + 14.8 + 19.6 + 2.1 + + 14.6 8.7 ^Includes one bank in Texarkana, Texas, not in Eighth District. N ote — A bove figures include total debits charged by banks to checking accounts, savings accounts, certificate of deposit accounts, and trust accounts, of individuals, firms, corporations and U . S. Government. Charges to accounts of banks, debits in settlement of clearing house balances, payments o f cashiers’ checks, charges to expense and m iscel laneous accounts, corrections and similar charges, are not included. (Com pleted June 22, 1935) Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS BY F E D E R A L R E SE RV E B O A R D PRODUCTION AND EMPLOYMENT — Volume of in dustrial production, as measured by the Board’s seasonally ad justed index, declined from 86 per cent of the 1923-25 average in April to 85 per cent in May, which was the fourth consecutive month of gradual decline from the recent high level of 90 in Jan uary. At steel mills output declined somewhat in May and the first three weeks of June, as is usual at this season. In the auto mobile industry, where output this spring has been at a level substantially higher than in other recent years, production showed els. Domestic stocks of wheat have been materially reduced this season. DISTRIBUTION — Total volume of freight-car loadings increased in May by about the usual seasonal amount. Coal ship ments showed a marked increase, while loading of miscellaneous freight declined. Department store sales, as measured by the Board’s seasonally adjusted index, increased from 73 per cent of the 1923-25 average in April, to 76 per cent in May and were at approximately the same level as a year ago. Index number of industrial production, adjusted for seasonal variation. (1923-25 average = 100.) Latest figure, May, preliminary 85. Indexes of the United States Bureau of Labor Statistics. (1926=100.) By months 1929 to 1931; by weeks 1932 to date. Latest figures for week ended June 15, farm products 79.9; foods 83.4; other commodities 77.9. a marked decline in May, reflecting in part the effects of a strike. At cotton mills there was little change in activity, while at woolen mills production increased further, contrary to seasonal tendency. Production of shoes declined seasonally. Output of coal which has fluctuated widely in recent months, reflecting partly develop ments in the labor situation, showed a marked increase during May and the early part of June. Factory employment and payrolls declined between the middle of April and the middle of May. Decreases in employment were reported for the automobile, radio, lumber, clothing, cotton, silk, and shoe industries, while at woolen mills employment increased and in many other lines little change was reported. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, was about the same in May as in April. COMMODITY PRICES — The general level of wholesale prices, which was 80.3 per cent of the 1926 average at the end of April and also in the week ending May 25, had declined to 79.8 per cent by the week ending June 15, according to the index of the Bureau of Labor Statistics. Grain prices decreased consider ably during May and the first half of June. Cotton prices, after a sharp decline at the end of May and a subsequent increase, also were lower in the middle of June than at the beginning of May. Prices of commodities other than farm products and foods as a I group advanced slightly during this period. BANK CREDIT — During the five weeks ending June 19, reserve balances of member banks increased by $175,000,000 as a result of gold imports, offset in part by an increase in Treasury MILLIONS OF DOLLARS 600 500 400 MILLIONS OF DOLLARS CONST RUCTICiN CONT'RACTS AWARD!ED 600 500 A 400 T o ta l \ / VY ' 300 200 \ A ll O th er ^ 100 300 ' S. s 1 R e s id e n tia l 1 Y \ v'** * *■ '■'* *' i 200 too 0 0 1929 Index of factory employment, adjusted for seasonal variation. (1923-1925 average= 100.) Latest figure, May, 81.3. Residential work continued in excess of a year ago, while the vol ume of contracts for public projects was smaller than in the cor responding month of 1934. Department of Agriculture estimates based on June 1 reports indicate that conditions for wheat, oats, barley, rye, hay, and pastures were at the ten-year average for 1923-32, in contrast with conditions a year ago, which wrere unusually poor as a con sequence of a prolonged drought. The winter wheat crop this year is estimated to be somewhat larger than last year and, with a considerable increase indicated for spring wheat, present con ditions, according to the Department of Agriculture, suggest a total crop of about 670,000,000 bushels as compared with 496,000,000 bushels last season and a ten-year average of 828,000,000 bush Page 8 1930 1931 1932 1933 1934 1935 Three-month moving averages of F. W . Dodge data for 37 Eastern States, adjusted for seasonal variation. Latest figures, May, preliminary total 102.5; residential 35.9; all other 66.6. cash, and deposits with the Reserve banks. Excess reserves of member banks on June 12, were above $2,500,000,000 for the first time, but declined somewhat in the following week. At reporting member banks in leading cities there was an increase of $540,000,000 in net demand deposits in the four weeks ending June 12, due in part to gold imports. Time deposits de clined by $150,000,000, of which $70,000,000 represented a decline at New York City banks consequent upon a ruling of the New York Clearing House in May prohibiting the payment of interest* on New time deposits maturing in less than six months. Total loans and investments of reporting banks showed no important changes. Short-term open-market interest rates continued at low levels in May and the first half of June.