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FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REVIEW OF BUSINESS CONDITIONS IN EIGHTH DISTRICT Released for Publication On and After the Morning of June 30, 1926 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent I N F L U E N C E D by more seasonable weather and every decided betterment in prospects for agriculture, general business in this district developed slight improvement during the past thir ty days. In addition to increased volume of distri bution in a number of important lines, sentiment in the business community as a whole was consid erably more optimistic than during the preceding two or three months. Purchasing of seasonal mer chandise, which had been delayed by the backward spring, was in sufficiently large volume to substan tially reduce stocks of such goods, and in numerous instances reordering was necessary to fill current demands. The decline in com m odity prices, partic ularly of manufactured goods, which had been in progress since early in the year, was considerably less pronounced than heretofore, and greater confi dence was manifested in existing values. W hile in virtually all lines buying is still confined closely to a requirement basis, advance orders in some classi fications were heavier than during the preceding month. In the retail section of distribution results were relatively better than with wholesalers and jobbers, though good gains were reported by several import ant wholesale lines, notably dry goods, furniture, electrical supplies and boots and shoes. Satisfactory business was reported by mail order and chain store interests, and total May sales of the leading depart ment stores of the district were 10.1 per cent lar ger than during the corresponding period last year. There was a rather sharp decrease in sales of auto mobiles during May, both as compared with the month before and the corresponding period in 1925. Activities in the iron and steel industry receded slightly, and a further slowing down at textile mills was noted. Smaller sales were reported of clothing, drugs and chemicals, groceries and hardware, but the declines were small, both as compared with the preceding month and last year. The principal development contributing to im proved sentiment was the turn for the better in crop prospects. More seasonal weather enabled far mers to catch up on delayed work, and at the mid dle of June farm operations in all sections of the district were brought close to the average for that date, whereas in early April they were from three to five weeks behind the seasonal schedule. Excel lent progress was made in the planting and cultiva tion of spring crops, and the recent rains have sub stantially bettered prospects of all the principal agricultural products of the district. Marketing of early fruits and vegetables has proceeded satisfac torily, and yields have been in the main fully up to expectations. The situation in the principal coal fields of the district underwent no change worthy of note dur ing the past thirty days. A moderate betterment in prices in the eastern fields, due to opening of navi gation on the Great Lakes and the prolongation of the British strike, failed to affect values perceptibly in this section. Producers in Illniois and Indiana report buying of both steaming and domestic coal extremely slow, though during the past tw o weeks orders for screenings and small nut sizes have im proved slightly, and in western Kentucky small screened coal has met readier sale. Potential over production and competition of non-union coals, ac cording to operators, are accountable in greater de gree for the dull, weak market than any decline in general industrial activity. Heavy offerings by the strip pits are also mentioned as a contributing fac tor in depressing prices of shaft-mined coal. A ll the leading fields report accumulations of unbilled loads of large sizes, and generally buying by dealers and householders is backward. The demand for metal lurgical coke continues fairly active, but industrial and domestic coke is dull, with accumulations of the latter grades on yards of by-product manufac turers steadily increasing. Total production of bi tuminous coal for the country as a whole during the calendar year 1926 to June 5, approximately 132 working days, was 233,395,000 net tons, against 203,970,000 tons for the corresponding period in 1925 and 205,524,000 tons in 1924. Freight traffic of railroads operating in the dis trict continues at the high levels which have pre vailed in recent months, and for the country as a whole loadings of revenue freight for the first 22 weeks of the year, or to M ay 29, totaled 20,924,314 cars, which compares with 20,362,000 cars for the corresponding period in 1925 and 19,559,000 cars in 1924. The movement of merchandise and miscel laneous freight is holding up well, and running ahead of the same time during the past three years. Southwestern roads are making extensive prepara tions for handling the movement of winter wheat, which is expected to begin during the next three weeks. The St. Louis Terminal Railway A ssocia tion, which handles interchanges for 28 connecting lines, interchanged 224,488 loads in May, against 219,246 loads in April and 207,360 loads in May, 1925. During the first 9 days of June the inter change amounted to 62,935 loads, against 65,113 loads during the first 9 days o f April, and 61,163 loads during the corresponding period in June, 1925. Passenger traffic of the reporting roads decreased 1.5 per cent during May as compared with the same month last year. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans during May was 95,000 tons, which compares with 72,682 tons (revised figures) in April, and 97,349 tons in May, 1925. W hile collections as a whole are satisfactory, reports covering the past thirty days developed some unevenness, both as to localities and indus tries. In the rural sections farmers were preoccu pied with intensive work, and unable to come to town. Backwardness was also complained of in the coal fields where there is considerable unemploy ment among miners. W holesalers in the large cen ters reported June 1 settlements heavy, though slightly below the same period last year. Generally through the South country merchants report results fair to good. Reports of retailers in the large cities reflect irregularity, some lines showing high effi ciency, while backwardness characterizes others. Questionnaires addressed to 450 representative in terests in the various lines throughout the district showed the follow ing results: Excellent May, 1926..................... 2.5% April, 1926................... 2.3 May, 1925..................... 5.5 Good 37.2% 30.3 36.0 Fair 46.8% 56.2 50.7 Poor 13.5% 11.2 7.8 Commercial failures in the Eighth Federal Reserve District during May, according to Dun’s, numbered 54, involving liabilities of $234,034, against 84 defaults in April with liabilities of $1,656,577, and 89 failures for $1,369,633 in May, 1925. The per capita circulation of the United States on June 1 was $42.21, against $42.11 on M ay 1 and $41.89 on June 1, 1925. M A N U F A C T U R IN G A N D W H O L E S A L E Autom obiles — Production of automobiles for the entire country during May was smaller by 1.9 per cent than in April, but was 3.7 per cent in excess of the May, 1925, total. Manufacturers reporting direct or through the National Autom obile Chamber of Commerce built 394,781 passenger cars in May, which compares with 402,574 in April and 384,548 in May, 1925. The output of trucks in M ay totaled 51,374 against 53,268 in April and 45,718 in May, 1925. A s compared with the same period a year ago and the thirty days immediately preceding, sales of automobiles in this district during M ay showed declines. The decrease from April to M ay was most marked, and too large to be accounted for fully by seasonal considerations, though normally distribu tion in April is greater than in May due to stimula tion of automobile shows and the putting out of new spring models. Sales of country dealers were less satisfactory than heretofore, which condition is attributed in part to the fact that agriculturists are too busily engaged with farm work to consider their automobile requirements. Stocks of new cars in dealers’ hands increased slightly, and are som e what larger than a year ago, though a, shortage of certain models, particularly closed cars, still exists. Due to heavy sales of new passenger cars earlier in the year, there was also a gain in the number of second hand vehicles. T he movement of used cars, however, was reported quite satisfactory. The re cently adopted policy of a large group of dealers to more thoroughly service and repair used cars before marketing them has met with good response. The trend away from cheap cars to medium and high priced makes continues to feature the business in this district. Sales of new cars during May by 320 dealers scattered through the district were 9.0 per cent smaller than during the same month in 1925, and 49.3 per cent under the April total this year. Sales of accessories and parts in M ay declined 11.2 per cent under April and 14.5 per cent below May, 1925. Purchasing of tires, both by dealers and ulti mate consumers, continues on a hand-to-mouth basis. Stocks, however, were reported in a better condition than at any time in a number of months, and current sales were fully up to expectations. B oots and Shoes — Sales of the 8 reporting in terests during May were 6.9 per cent larger than in the same period last year, and 11.9 per cent in excess of the April total this year. Stocks on June 1 were 11.5 per cent smaller than thirty days earlier and 0.7 per cent below those on the same date in 1925. Orders received during the first half of June were in satisfactory volume, and indicate a gain for the present month over the same period last year about equal to the increase in May over May, 1925. Improvement extended generally through the entire line, but was most pronounced in seasonal merchan dise, such as sport goods and w om en’s and chil dren’s novelties. Factory operation was at a slight ly higher rate than during the preceding thirty days. Prices of finished goods were unchanged dur ing the month, and averaged close to levels prevail ing at the same time last year. Clothing — Since the middle of May more sea sonable weather has served to stimulate retail buy ing, and sales of all summer lines developed marked improvement. Manufacturers and jobbers report a fair volum e of reordering since June 1. These or ders, however, are mainly for small lots, and spe cify immediate shipment. The demand for sport clothes, both men’s and w om en’s, is reported larger than at the same time last year. Manufacturers of men’s heavyweight clothing have increased their activities, and report buying for fall and early win ter above expectations. Current buying of wom en’s dresses and suits is generally fair to good, with stocks in jobbers and manufacturers’ hands low. May sales of the 8 reporting interests were 6.7 per cent below the same month in 1925, and 10.9 per cent under the April total this year. The late sea son has retarded sales of men’s straw hats, and total business in this line to date is considerably below that of the past several years. Drugs and Chemicals — A s compared with the same month in 1925, May sales of the 7 reporting interests showed a loss of 0.4 per cent, and the total was 6.1 per cent below that of April this year. The decline from April to May is accounted for by the usual seasonal influences, and was no greater than the average for the past five years. The movement of seasonal goods is reported active, and sales of cosmetics and toilet preparations were the largest ever recorded at this time of year. M ay sales of soda fountain supplies and equipment were smaller than a year ago, but this department has developed marked improvement since June 1. Prices showed no change worthy of note during the month, and were approximately the same as a year ago. D ry Goods — May sales of the 8 reporting in terests were 1.5 per cent larger than for the same month in 1925, and 28.9 per cent in excess of the April total this year. Stocks on June 1 were 1.7 per cent larger than a month earlier, but 20.1 per cent below the total on June 1, 1925. Improvement was noted generally through the entire line, but was particularly large in the case of seasonal mer chandise, movement of which had been delayed by the backward spring. Retail stocks continue light, and buying by retailers is on an immediate require ment basis. Outings, and the general line of hosiery and knit goods were reported active, and the de mand for w om en’s ready-to-wear garments has im proved substantially since the middle of May. Electrical Supplies — The recent gains in this classification were continued during the period un der review, sales of the 8 reporting interests during May showing a gain of 31.2 per cent over the same month in 1925. The total, however, was 0.1 per cent under that of April this year. Stocks on June 1 were 5.2 per cent less than on the same date in 1925, and 2.1 per cent below those on May 1 this year. A slight decrease in building installations has been more than offset by larger sales of materials for public utility companies. The demand for small motors of all descriptions continues active, and household appliances are m oving well. Flour — Production at the twelve leading mills of the district during May was 294,007 barrels, which compares with 277,339 barrels in April and 223,964 barrels in May, 1925. Stocks of flour in St. Louis on June 1 were 12.1 per cent less than thirty days earlier, and 2.2 per cent larger than on June 1, 1925. There was no change from the quiet condi tions prevailing in the flour trade during the past several months. Both consumers and dealers were disposed to await the arrival of new wheat before committing themselves, and sales were largely on a hand-to-mouth basis. Prices were sharply lower in sympathy with the break in cash wheat. Aside from the usual routine transactions with LatinAmerican countries, export trade was virtually at a standstill. Mill operation was at 55 to 65 per cent of capacity. Furniture — The past thirty days were marked by a fair revival of buying in most sections of the furniture industry, with the movement of iron and steel furniture and office equipment making a par ticularly favorable showing. Retail stocks are light, and there was more of a disposition to replenish and fill out assortments than has been the case in a num ber of months. May sales of the 18 reporting inter ests were 1.5 per cent larger than during the same month in 1925, and 4.6 per cent in excess of the April total this year. Stocks on June 1 were 25.4 per cent larger than on the same date in 1925, and 15.9 per cent smaller than on May 1 this year. Groceries — A s compared with the preceding thirty days changes in this classification were of minor significance. Purchasing of staples by coun try merchants developed some improvement, but this was offset by a falling off in sales in the large cities. Heavier receipts of fresh fruits and vegeta bles were accountable for a decrease in the demand for canned goods. Small gains in advance orders were reported by several large firms. M ay sales of the 13 reporting interests were 1.5 per cent under those of the same month in 1925, and 1.0 per cent below the April total this year. Stocks on June 1 were 25.4 per cent smaller than on the same date last year and 0.6 per cent under the total on M ay 1 this year. Hardware — A s compared with the same month last year, M ay sales of the 10 reporting in terests showed a decrease o f 1.0 per cent, but the total was 2.2 per cent larger than in April this year. Heavy buying of seasonal merchandise, which had been held in check by the late spring, was account able for the gain from April to May. Sales o f sport ing goods and tourists’ supplies and equipment were heavy, and the general run of goods consumed in the country m oved in larger volume than at the same time last year. Iron and Steel Products — Activities at foun dries and steel works declined slightly during the past thirty days, and there was some curtailment by certain specialty makers, notably of stoves, ar chitectural iron and heavy hardware. Machinery and engine builders, however, continued busy and the same was true of manufacturers of farm imple ments and electrical supplies. Consumers of fin ished and semi-finished goods displayed greater con fidence in prices and were more disposed to cover their third quarter requirements in addition to spe cifying in heavier volum e on expiring second quar ter contracts. Foundries specializing in gray cast ings reported no change in conditions as compared with the preceding month, though since June 1 new orders booked were slightly larger than dur ing the first half o f May. The demand for bars and shapes was moderately active, and further im prove ment was noted in tin plate as canners make their requirements known. No improvement has taken place in sheets, galzanized material being reported especially quiet. W arehouse interests experienced a steady demand for their general line, but the movement of standard structural shapes and rein forcing materials was less active than heretofore. Fencing materials and the general run of wire and wire products moved in slightly larger volum e than during the preceding month, and the total was above that of the same time last year. Early in quiries for bands and hoops and general materials from the South indicate a heavy prospective demand for this class of goods. Production of pig iron for the country as a whole during May was at a smaller average daily rate than in April, but the total was slightly larger than that of the earlier month and considerably above the May, 1925, output. T h e rate of steel ingot production was also smaller in M ay than in April, and was the lowest since October, though with the exception of May, 1923, the total was the largest for any May on record. T he price of northern pig iron declined during May, and quo tations on the southern product were lowered $1 per ton during the second week of June. After re maining quiet throughout May, there was a revival in buying of pig iron in early June, with both steel makers and foundries participating in the m ove ment. The steady decline in scrap iron and steel, which had been in progress for the past several months, was halted during the first week of June, and a slight upward reaction on certain grades was noted. Lumber — N o change of consequence took place in the lumber situation as contrasted with the preceding thirty days. W ith the usual seasonal recession in activity in both hard and soft woods, buyers have been endeavoring to force price con cessions. W ith production light, and stocks of moderate proportions, however, prices were gen erally well maintained. W ith the end of the logging season near, mills in the southern hardwood sec tions are preparing to further curtail their outputs. Demand from the building industry has fallen off, but buying by the general manufacturing trade holds up well. R E T A IL T R A D E Conditions in the retail trade are reflected in the follow ing comparative tables showing activities at department stores and shoe and men’s furnishing stores in leading cities of the district: Stocks on hand Net sales comparisons May, 1926 5 months ending May 31, 1926 comp, to comp, to May 31, 1926, to May, 1925 same period 1925 May 31, 1925 — 10.3% — 4.1% Evansville ....... ....+12.4% + 1.2 + 0.3 Little Rock...... ....4- 6.5 + 2.7 + 0.9 Louisville ....... ....+ 5.9 — 5.9 + 12.5 Memphis ....... ....+20.3 + 1.0 — 3.7 ....+ 7.1 + 0.4 ,,,,+ 8.8 + 2.6 Springfield, Mo....+ 1.2 + 4.4 — 7.8 — 0.6 8th District..... , ,+ 10.1 + 3.7 Net sales comparisons May, 1926 compared to May, 1925 April, 1926 Men’s Furnishing...........+18.4% +18.8% Boots and Shoes............ +-1J5.5 + 2.3 Stock Jan to IV 1926 89.4 109.8 141.2 111.2 102.0 138.8 66.7 131.0 1925 81.4 108.5 145.9 97.2 98.6 138.9 59.2 129.0 Stocks on hand May, 1926 compared to May, 1925 April, 1926 — 3.5% — 5.9% — 1.8 — 6.9 C O N S U M P T IO N O F E L E C T R IC IT Y Electric power consumed by selected industrial customers of public utilities companies in the five largest cities of the district during May showed an increase of 7.4 per cent over the corresponding month in 1925, and of 7.4 per cent over the April total this year. In both comparisons the increases were spread pretty generally am ong all classes of consumers, but were particularly marked with automobile manufacturers, electrical equipment makers, steel fabricators and glass producers. D e tailed figures follow : No. of May, April, May, 1926 May, May, 1926 custom1926 1926 comp, to 1925 comp, to ers *K.W.H. *K.W.H. Apr. 1926 *K.W.H. May, 1925 Evansville ....40 1,253 1,266 — 1.0% 1,040 +20.5% Little Rock...35 1,494 1,184 +26.2 1,241 +20.4 5,262 4,909 + 7.2 5,323 — 1.1 Louisville .... 73 Memphis .....31 1,902 1,769 + 7.5 1,475 +28.9 St. Louis.......92 16,024 15,025 + 6.6 15,066 + 6.3 Totals.....271 25,935 24,153 *In thousands (000 omitted). + 7.4 24,145 + 7.4 A G R IC U L T U R E Taken as a whole weather conditions during the past thirty days were more auspicious for agri culture than in any similar period since last sum mer. Temperatures were seasonable and scattered precipitation afforded moisture in sections where it was most needed. Intensive effort on the part of farmers in virtually all areas of important produc tion enabled them to overcom e the handicap of cold weather and the late spring, and the total amount of work performed was brought much nearer to the seasonal average than was the case in March and April. Good, soaking rains, beginning about D ecor ation Day, broke a drought of from tw o to three weeks duration and substantially assisted vegeta tion, particularly spring sown cereals, vegetables, ground fruits and cotton and tobacco. W inter W heat — In the five chief wheat pro ducing states o f the district the condition of the crop improved between M ay 1 and June 1. H ow ever, the indicated combined yield of these states, Indiana, Illinois, Missouri, Kentucky, and Tennes see, based on the June 1 condition, was only 76,270,000 bushels. This compares with a prospect for 72,929,000 bushels on M ay 1, and 90,777,000 bushels harvested last year. Since June 1 grow ing condi tions have bettered, and heads are reported to be filling well, with indications for a considerably higher condition on July 1 than at the beginning of the present month. There were scattered reports of damage from hail storms, chinch bugs and other causes, but nothing of a serious character. For the country as a whole the condition o f winter wheat on June 1 was 76.5 per cent, which indicates a yield of 543,000,000- bushels, against 398,000,000 bushels harvested in 1925. Corn — The outlook for this crop, the most im portant in the Eighth District, was materially im proved by the rains the last of May and the first days of June. Stands generally are better than ex pected, but some replanting has been necessary be cause of poor seed and unfavorable soil conditions during the initial seeding period. In the northern counties planting has been completed, and cultiva tion was general throughout the district, much of the acreage having been plowed the second and third times. A bout the usual amount of damage is reported, but fields are unusually clean, and despite the lateness of the spring the crop has an early enough start to minimize possible injury from frost. Fruits and Vegetables — Prospects for fruits in the district have improved materially during the past six weeks and indications point to heavy yields of all the more important descriptions. The peach outlook is particularly good, the June 1 condition in five leading states indicating a total output of 8,345,000 bushels, against 5,465,000 bushels har vested last year. On June 1 the condition of apples in Illinois was 72 per cent against 59 per cent last year, in Missouri 65 per cent against 61 per cent last year, and in Arkansas 62 per cent against 68 per cent last year. In the commercial areas somewhat spotted conditions are reported, due to varied weather conditions. In Missouri and Arkansas the bloom was heavy, but the set disappointing in many commercial orchards. The outlook for pears is the most promising in recent years. Strawberries were injured by cold weather and drought in May, but final results were above expectations and prices satisfactory. Cherries were a heavier crop than last year, and prospects for grapes, plums and black berries and raspberries are excellent. Planting of potatoes made good progress, and the same was true of other vegetables. Gardens at the middle of June were about equal to the five-year average at that date. T he commercial tomato acreage in the Ozark region shows a sharp decrease under that planted last year. Live Stock — Reports from all sections of the district indicate that live stock are in good health, but owing to poor condition of pastures, animals are not taking on weight at the rate they should. The upturn in hog prices, noted in the preceding issue of this report, continued during the past thir ty days, prices in the St. Louis market reaching the highest point since 1920. Lambs responded to light receipts and a good demand and advanced to the highest levels of the season. H ay crops suffered severely from lack of moisture in May, and the condition on June 1 was considerably lower than on the same date in 1925 and the 10-year average. Prospects for timothy and clover are particularly poor. Pastures were also adversely affected by the dry spell and are generally in poor condition, those in Missouri being 66 per cent of normal as compared with 85 per cent in 1925, and this situation is fairly typical of the entire district. Receipts and shipments at St. Louis, reported by the National Stock Yards, were as follow s: _______ Receipts______ May, April, May, 1926 1926 1925 Cattle and Calves.....109,978 86,439 103,024 Hogs ........................303,373 311,011 293,479 Horses and Mules.... 1,519 1,471 661 Sheep ....................... 37,147 15,859 37,870 ______Shipments_____ May, April, May, 1926 1926 1925 71,383 55,627 58,689 213,822 227,800 229,627 1,457 1,969 895 9,790 7,741 9,588 Cotton — Through the period under review weather conditions were favorable for growth and development in all states of the district, and the crop achieved distinct improvement. Cultivation is for the most part excellent, and free use of fertiliz ers has been the rule, particularly in Arkansas and Mississippi. Growth was checked by low tempera tures follow ing recent rains, but the duration of the cool weather was short, and probably no harm was done. Scattered reports indicate the emergence of boll weevil to June 1 small. In the raw cotton market sentiment favored the selling position, due to betterment in crop prospects, and prices fell to the lowest point for the season. A slightly better demand was noted for cheap, low grade cotton, but the better grades continued slow. Export demand was slow, buying being chiefly for account of south ern textile mills. Supplies continue liberal, stocks on hand at Arkansas warehouses on June 11 amounting to 334,527 bales, against 26,796 bales on the corresponding date in 1925. Rice — Planting of the rice crop has been com pleted, although much replanting was necessary, and the general situation is favorable, save that the average maturity will be possibly ten days to three weeks later than ordinary. Unofficial reports indicate total aceage in the district will vary only in minor degree from that last year. The majority of planters are pushing the irrigation of their crops. The mills report more activity in clean rice, with the outlet through the Porto Rican market especial ly good. Prices were steady with those prevailing a month earlier. Tobacco — W eather in all the tobacco districts was ideal for transplanting this year's crop, and this work is rapidly nearing completion. Stands are generally good, and plants are making good growth and are being cultivated. The burley tobacco sec tion is not as far advanced as the dark districts, but work is being pushed forward, and with contin uance of favorable weather the acreage will be approximately the same as last year. Deliveries of last year's crop were light, and with small stocks in dealers' hands and only small purchases being redried for the summer market, indications are for small sales through the balance of the season. Prices for tobacco marketed continue firm on all grades. Com m odity Prices — Range of prices in the St. Louis market between May 15, 1926, and June 15, 1926, with closing quotations on the latter date and on June 15, 1925. __________ ^ose_________ Wheat High Low June 15, 1926 June 15, 1925 $1.5024 July ............... ...per bu.$1.40^'$1.33*4 $1.37*6 September ..... .... “ 1.50 1.40% 1.31/& 1.34*4 December ..... .... “ 1.33 1.38 1.37 1.52J4 No. 2 red winter “ 1.67 $1.86 @ 1.96 1.47 $1.48 @ 1750 No. 2 hard.... .... “ 1.64 1.52 1.58 @ 1.60 1.64 @ 1.68 Corn July .............. .... “ .74?/8 .697/8 1-0754 .7 2 V s September ..... .... “ 1.09 *| .76/s .78^ .74 December ..... .... “ .89 .76Vs .79 .7554 No. 2.............. .... “ 1.10 .70/ .74 .69 No. 2 white.... .... “ .74 1.09 @ 1.09^ .76/2 .72 Oats .52 No. 2 white.... .... “ .42 @ .42^ .44*4 .41*4 Flour Soft patent.... ...perbbl. 8.75 8.75 i 9.25 7.50 @ 8.00 7.50 7.85 ( 8.25 Spring patent.. .... “ 8.30 7.90 8.00 @ 8.25 Middling cotton....per lb. .24 .17yA .17/4 .17*4 Hogs on hoof.... ..per cwt.15.25 12.40 10.00 @ 12.90 12.75 @ 14.75 Note: May wheat closed at $1.50. B U IL D IN G In the point of value, permits issued for new buildings in the five largest cities of the district during May showed a decrease of 7.7 per cent under the preceding month and of 8.3 per cent under the May, 1925, total. A ccording to statistics compiled by F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District during May amounted to $34,211,687, which compares with $30,369,870 in April, and $35,041,000 in May, 1925. W ork on buildings in course of construction pro ceeded without interruption during the past thirty days. No labor troubles of consequence were re ported, and generally the supply of skilled crafts men was adequate. No change w orthy of note took place in the cost of building materials or wage scales. Production of portland cement for the country as a whole during May totaled 16,467,000 barrels, the highest on record, and comparing with 12,401,000 barrels in April and 15,503,000 barrels in May, 1925. Building figures for May follow : New Construction Permits 1925 1926 1926 1925 $ 198 $ 274 Evansville .. 346 219 541 310 Little Rock 92 80 2,404 1,673 Louisville .. 355 439 1,246 1,555 Memphis ... 620 404 4,138 4,150 St. Louis....1,089 1,100 May totals.,2,502 Apr. totals 2,208 Mar. totals 2,266 *In thousands of $7,886 $8,603 2,242 8,548 15,672 2,410 9,625 10,537 2,352 (000 omitted). dollars Repairs, etc. *Cost Permits 1926 1925 1926 1925 $ 54 $ 62 "145 98 49 48 171 96 173 314 128 135 12 150 266 121 643 595 318 552 1,124 986 905 1,067 1,068 1,037 $1,000 953 1,049 $939 855 848 F IN A N C IA L W ith a further slight recession in demand for credit accommodation from commercial and indus trial borrowers, and abundant funds in both city and country banks, the trend of interest rates was a shade lower than during the preceding thirty days. Heavy June settlements with wholesalers resulted in a fair volume of liquidation of mercantile loans. Inquiries for funds from country banks for financ ing agricultural operations have begun to appear, but due to the lateness o f the season actual borrow ing in the country is below the average for this time of year. In the immediate past country banks in the cotton areas report some improvement in the demand for funds, but as yet this has not been felt in any appreciable degree in the large centers. In the wheat sections preparations are being made for financing the harvest and movement of the crop, and there is the usual augmented demand for cur rency. Deposits of the reporting member banks declined rather sharply from the first week in May until the first week this month, since which time a slight upwTard movement has taken place. Total loans and discounts of these banks also decreased during May, and reached the lowest point of the year. Commercial failures in the district showed a radical decrease, both in number and amount of liabilities, as compared with the preceding month and the corresponding period a year ago. Commercial Paper — Decreased requirements of mercantile and industrial interests were reflected in unusually small offerings of commercial paper during the period under review. This fact, coupled with the low rates, resulted in smaller sales by the reporting brokerage firms. T otal sales during May were 18.3 per cent under the same month last year and 20.1 per cent below April this year. During the first tw o weeks of June sales were approximate ly 9.4 per cent less than for the corresponding period in 1925. Rates were unchanged at 4 to 4% per cent. Debits to Individual Accounts — The following comparative table gives the total debits charged by banks to checking accounts, savings accounts, cer tificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Govern ment in the leading cities of the district. Charges to accounts of banks are not included. *May, 1926 E. St. Louis and Nat. Stock Yards, 111..$ 49,950 El Dorado, Ark.......... 12,146 Evansville, Ind........... 42,234 Fort Smith, Ark.......... 12,147 Greenville, Miss.......... 4,470 Helena, Ark................ 4,075 Little Rock, Ark......... 73,219 Louisville, Ky.............. 185,759 Memphis, Tenn............ 138,361 Owensboro, Ky........... 4,954 Quincy, 111................... 13,406 St. Louis, Mo.............. 770,346 Sedalia, Mo................. 4,817 Springfield, Mo.......... 16,989 *April, 1926 $ 45,229 12,755 38,681 13,564 4,517 5,303 76,789 202,313 142,808 5,374 13,725 760,357 4,694 16,241 *May, Five months 1925 1926 1925 $ 43,558 $228,773 $206,427 10,954 62,483 43,071 43,149 189,700 190,110 12,495 66,613 65,229 3,308 24,348 22,481 3,864 24,592 25,286 60,544 395,240 327,001 174,701 995,576 937,230 124,601 761,503 720,797 4,881 29,759 32,001 12,099 63,694 61,485 738,410 3,814,243 3,685,453 4,401 23,736 22,593 14,034 80,501 65,998 Totals................. $1,332,873 $1,342,350 $1,250,999 $6,760,761 $6,405,162 *In thousands (000 omitted). Condition of Banks — Loans and discounts of the reporting member banks continued to decline, the total on June 16 being $503,788,000 against $516,451,000 on May 19, and $474,786,000 on June 17, 1925. Deposits decreased from $628,741,000 on May 19 to $625,746,000 on June 16, which latter figure compares with $601,387,000 on June 17, 1925. Comparative statement follow s: *June 16, *May 19, *June 17, 1925 1926 1926 33 33 33 Number of banks reporting................... Loans and discounts (incl. rediscounts) Secured by U. S. Gov’t, obligations__ ...$T 10,909 Secured by other stocks and bonds......... ... 188,951 All other loans and discounts.................... 303,928 $ 10,372 195,918 310,161 $ 10,181 168,031 296,574 Total loans and discounts.................. Investments U. S. Gov’t securities................................ ... 63,184 Other securities........................................... 115,670 $516,451 $474,786 77,949 110,065 59,716 113,027 Total investments........................................... $178,854 Reserve balance with F. R. bank................ 47,336 Cash in vault....................................... Deposits Net demand deposits................................... 405,009 Time deposits............................................... 214,498 6,249 Government deposits................................... $188,014 47,323 7,791 $172,743 45,118 7,285 404,758 217,481 6,502 207,037 390,690 3,660 Total deposits...................................................$625,756 $628,741 $601,387 Bills payable and rediscounts with Federal reserve bank Secured by U. S. Gov’ t obligations..... 4,301 4,846 500 All other..................................................... 5,739 9,696 2,789 *In thousands (000 omitted). These 33 banks are located in St. Louis, Louisville, Memphis, Little Kock and Evansville, and their total resources comprise approximately 54 per cent of the resources of all member banks in the district. Earnings of Member Banks — Analysis pre pared by the Federal Reserve Board and published in the June issue of the Federal Reserve Bulletin, shows member banks in the Eighth District to have had net earnings in 1925 of $23,498,000, which repre sented $1.86 per $100 of earning assets. This com pares with $21,367,000 net earnings, and $1.80 per $100 of earning assets in 1924. After deducting losses but before declaring dividends, the net addi tion to profits in 1925 was $16,901,000, or $1.34 per $100 of earning assets, against $10,772,000, or $0.91 per $100 of earning assets, in 1924. For 1925 the profit per $100 of capital, surplus and undivided profit was $8.45, as compared with $5.48 in 1924. Federal Reserve Operations — During May the Federal Reserve Bank of St. Louis discounted for 216 member banks, against 212 in April and 204 in May, 1925. The discount rate remained unchanged at 4 per cent. Changes in the principal assets and liabilities of this institution as compared with the preceding month and a year ago are shown in th-e following table: *June 16, 1926 Bills Foreign loans on gold.. Total deposits........................... Ratio of reserves to deposit and F. R. Note liabilities...., *In thousands (000 omitted). (Compiled June 23, 1926) 323 *May 16, •June 16, 1925 1926 $24,174 $18,002 11,347 8,057 27,342 27,450 483 318 ...$53,520 $59,891 38,401 85,769 $57,282 45,250 84,456 ... 61.3% 54.6% 59.7% B U SIN E SS C O N D IT IO N S IN T H E U N IT E D S T A T E S PRODUCTION — A ctivity in most lines of industry was smaller in M ay than in April. The reduction was re flected in a decreased volum e o f output as well as in a decline in the number o f factory workers and in total wage pajnments. T h e largest declines occurred in the textile, leather and shoe, and iron and steel industries. Production of autom obiles continued large in May. In the lumber, cement, brick and glass industries activity was maintained Shipments o f m iscellaneous com m odities were especially large. PRICES — T he general level of wholesale com m odity prices, according to the index o f the Bureau o f Labor Sta tistics, rose slightly in M ay for the first time since last August. Price advances w ere shown both for agricultural and non-agricultural com m odities. A m on g the principal advances were those in the prices o f gasoline, live stock Latest figure, May=151.7. and there w ere seasonal increases in the output o f certain food products. The volum e o f building contracts awarded declined further in May, but was larger than in M ay last year. Fgures for the first three weeks o f June indicate further decreases and the volum e of contracts awarded was smaller in that period than in the corresponding weeks o f 1925. Recent declines in contracts as compared with last year have been particularly large in middlewestern and southeastern districts. Reports by the Department of Agriculture indicate that the com posite condition of crops on June 1 was 8 per cent below the average condition on that date for the past ten years, and somewhat lower than the average condition a year ago. TRADE — W ith m ore favorable weather in M ay than the preceding month, the volum e o f wholesale and retail trade increased and was larger than in May o f last year. Departm ent store sales exceeded those of earlier months o f this year and total sales for the first five months were and meat, while prices o f grains and cotton declined. In the first three weeks o f June prices o f grains, live stock, silk and non-ferrous metals advanced, while those o f sugar, cotton, cotton goods, and pig iron declined. BANK CREDIT — Growth in loans on securities and commercial loans carried total loans and investments of reporting m em ber banks in leading cities in the middle of June to a new high point above the total reached at the close o f last year. T h e large reduction in volum e o f loans on securities by N ew Y ork City banks since the beginning of the year has been m ore than offset in the total o f loans and investments o f all reporting banks, by increases in com mercial loans and in investments o f banks both in N ew Y ork City and outside. A t the Reserve banks changes in the volum e o f credit outstanding during the month ending June 23 reflected chiefly the financial operations o f the U. S. Treasury around the middle o f June. T he tem porary abundance o f funds caused by the redemption o f maturing United States obligations on June 15 caused a sharp de- Weekly rates in New York money market: commercial paper rate on 4-6 months paper and acceptance rate on 90 day paper. Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for first weekly report dates in June. larger than for the corresponding period of any preceding year. M erchandise stocks carried by wholesale firms were slightly smaller at the end o f M ay than a month earlier. Stocks of groceries, hardware and drugs were larger than a year ago, but those o f meats, dry goods, and shoes were smaller. Stocks at department stores declined m ore than usual in M ay and were only slightly larger at the end o f the month than a year ago. Railroad freight shipments increased and in M ay and in the first tw o weeks o f June were above those o f the same weeks o f previous years. cline in borrow ings o f m em ber banks, particularly in N ew Y ork City. As checks in payment o f incom e taxes w ere cleared and collected, however, borrow ings at the Reserve banks rose to their previous level. M oney rates in general show ed little change during the month. Rates on call and time loans w ere slightly low er around the middle o f June, but in the third week were higher than in the latter part o f May. Rates on ac ceptances and on com m ercial paper remained practically unchanged.
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