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BUSINESS CONDITIONS Monthly Review o f Agricultural, Industrialf Trade and Financial Conditions in Eighth Federal Reserve District RELEASED FOR PUBLICATION ON THE MORNING OF JUNE 30, 1938 FEDERAL RESERVE BANK OF ST* LOUIS D ISTRICT S U M M A R Y thirty days, recessionary trends still being in evi RAD E and industry in the Eighth District dence. The increased number of workers employed during the past thirty days continued the in agriculture was more than offset by defections uninterrupted downward trends which have in industrial and other occupations. There were been in effect since early last fall. While in the case noticeable declines from a year earlier in the num of certain activities the declines were seasonal, their ber employed at district coal mines and in trans extent was too great to be entirely accounted for in portation. The production index of the Board of this way. In virtually all lines investigated by this Governors of the Federal bank, May volumes were Reserve System, adjusted June 1, 1938 comp, with substantially under those Agriculture: 1937 Av. 1927-36 for seasonal variation, of the same month a year Estimated produc. of Winter Wheat....—12.1% -j-37.6% stood at 75 per cent of the ago, and in some impor May 1938 comp, with April, 1938 May, 1937 Livestock: 1923-1935 average in May, tant classifications fell be +30.7% — 8.1% Receipts at National Stock Yards as against 77 per cent in low levels recorded at the — 16.8 +27.9 Shipments from aforesaid Yards.. most acute period of the April and 118 per cent in Production and Distribution: — 18.6 + 0.02 May, 1937. Consumption 1932 business depression. — 13.7 —12.5 of electricity by industrial The downward movement —25.1 + 6.5 extended to wholesaling, consumers in the principal Building and Construction: retailing and manufactur cities in May recorded a 9.3 —21.5 + 12.9 —45.6 slight gain over April, but ing, but was somewhat +30.0 .+20.4 more pronounced in the was more than 17 per cent Miscellaneous: less than a year ago. Out production than distribu —37.5 + 7.1 Commercial failures tion of merchandise. Ex put of bituminous coal for —30.4 + 11.0 + 2.3 — 17.4 the entire country and at cept in a very few classi Debits to individual accounts........... .+ 6.7 — 14.5 fications, affected by sea mines in this district in •m • m i /nA^ June 15,’38 comp, with Member Banks (24): May 18,’ 38 June 16,’37 sonal factors, output of May showed decreases Gross deposits......................................-f- 1.6% -f- 3.7% manufactures was smaller under a month and a year Loans.................................................... — 3.5 — 0.5 Investments......................................... .— 2.4 + 0.6 in May than April, and a earlier. The lumber situa number of lines which or tion improved slightly in dinarily increase their operations at this time of late May, both with reference to demand and prices, year, failed to show the usual expansion. Owing to reflecting reduced retail inventories and some ex pansion in building. May production, however, was lack of orders booked for future delivery, manufac turers are unwilling to make up any considerable about one-third less than a year ago. Automobile stocks of their products and inventory position sales continued to decline, and total for the first shows quite general improvement. The continued five months this year was the smallest for any simi lar period since 1932. lower drift of commodity prices served to empha size the conservative attitude of both merchants As reflected in the U. S. Department of Agri culture's report based on conditions as of June 1, and ultimate consumers in the matter of commit prospects for Eighth District crops are in the main ments for goods of all descriptions. more promising than on that date since 1929. There No marked change took place in the employ ment situation as contrasted with the preceding was some deterioration in winter wheat during May, T Page 1 , and adverse weather conditions since June 1 have resulted in’ further lowering of prospects; withal the yield will be considerably above the 10-year (1927-1936) average. Throughout the district there has been abundant spring rainfall which has had the effect of promoting growth of all vegetation and restoring depleted moisture supplies incident to re cent drouth years. In some sections preparations for and planting of spring crops was hampered by wet fields, and as a whole the season is from ten days to two weeks late. Planting of cotton has been com pleted in the southern sections and with few excep tions the plant has made excellent growth. Fruit and vegetable crops are for the most part of average pro portions. The condition of livestock is reported ex ceptionally good, and outlook for feed and forage crops is the best in recent years. The volume of retail trade in May, as reflected in sales of department stores in the principal cities, showed a decrease of 12.5 per cent as compared with April, and of 13.7 per cent as compared with May, 1937; for the first five months cumulative total was 6.8 per cent less than for the comparable period in 1937. Combined sales of all wholesaling and jobbing firms whose statistics are available to this bank in May showed practically no change from the preced ing month and were 18.6 per cent smaller than a year earlier; for the first five months cumulative total was 15.5 per cent under that of a year ago. The dollar value of building contracts issued for new construction in the principal cities in May was about one-fourth greater than in April, but 27.5 per cent less than in May, 1937; for the first five months this year cumulative total was smaller by 32 per cent than during the same interval last year. Dollar value of construction contracts let in the Eighth District in May was larger by 20.4 per cent and 30 per cent, respectively, than a month and a year earlier; for the first five months the cumulative was 13 per cent less than for the same period in 1937. Reports relative to collections in the district during the past thirty days reflect a further slight slowing down, both in the large urban centers and the country. June 1 settlements with wholesalers and jobbers were somewhat spotty, with the strong er accounts paying promptly, and quite a number taking advantage of discounts. Questionnaires ad dressed to representative interests in the several lines scattered through the district showed the fol lowing results: Excellent May, April, May, 1938................. 1.0% 1938................. 1.8 1937................. 5.5 Good 28.2% 30.2 50.0 Fair 42.8% 40.5 36.5 Poor 28.0% 27.5 8.0 Commercial failures in the Eighth Federal Re serve District in May, according to Dun and Bradstreet, numbered 30, involving liabilities of $343,000, which compares with 48 defaults in April with lia bilities of $493,000, and 28 insolvencies for a total of $309,000 in May, 1937. DETAILED SURVEY OF DISTRICT MANUFACTURING AND W H O LESALIN G Lines of Commodities Boots and Shoes.......... Drugs and Chemicals.. Dry Goods................... Electrical Supplies..... . Furniture..................... Groceries..................... Hardware.............. ...... Net Sales May, 1938 5 months 1938 comp, with same compared with period 1937 April ’ 38 May ’ 37 — 4.8% — 25.1% — 11.8 % — 10.5 + 2.1 — 7.0 — 20.9 + 6.0 — 10.6 0 — 17.4 — 22.4 — 24.0 — 3.3 — 27.4 — 13.8 — 0.3 — 12.8 — 0.2 — 16.3 — 23.9 All above lines......... + 0.02 — 18.6 — 15.5 Stocks May 31, 1938 comp, with May 31, 1937 — 11.9% — 14.0 — 28.8 — 12.1 — 19.6 — 17.4 — 28.4 — 24.0 Automobiles — Combined passenger car, truck and taxicab production in the United States in May totaled 192,068, as against 219,314 in April and 516,899 in May, 1937. Boots and Shoes — Production in this area dur ing May showed little change from the preceding month, factories operating on an average of from three days to four days per week. A slight upward trend, seasonal in character, has been noted since June 1. As has been the case for a number of months, advance buying is in negligible volume. Retail in ventories are light, but there is a general disposi tion to postpone replenishment as long as possible. Page 2 Clothing — According to the reporting clothi ers, interest in merchandise for fall and winter dis tribution is less in evidence than at this particular time during the past several years. The movement of summer apparel through retail channels has been below expectations, owing chiefly to lateness of the season and generally reduced purchasing power. The trend of prices was lower in sympathy with de clines in raw materials. May sales of the reporting clothiers were 31.1 per cent less than in April and 2.4 per cent greater than May, 1937. Drugs and Chemicals — Continued slack de mand for heavy drugs and chemicals from the gen eral manufacturing trade was the outstanding influ ence in the unfavorable showing made by May sales in this classification as contrasted with a year ago. Reordering of insecticides and spraying materials since the end of April was reported in considerable volume. The movement of luxury goods, including cosmetics, perfumes and soda fountain supplies, con tinued in limited volume. Dry Goods — Extreme dullness was reported in ordering of staple lines, especially blankets, sweaters, underwear, etc. Declines in the prices of raw materials, coupled with uncertainty relative to fall and winter business, is holding advance business at a minimum. In the immediate past, slight better ment has taken place in women’s ready-to-wear gar ments and work clothes. Electrical Supplies — May sales in this classifi cation were unchanged from April, whereas a slight increase is the usual seasonal experience. There were noticeable declines in electrical installations in new buildings as contrasted with recent seasons, also in the volume of goods taken by public utilities companies. Price trends continued downward. Furniture — Declines indicated in the above table extended to virtually all lines of furniture. Office equipment wras reported moving in the small est volume in late years, and considerably more than the usual seasonal contraction was noted in house hold furniture and furnishings. Ordering for fall and winter distribution wras negligible. Groceries — Price changes during the past thir ty days were seasonal in character and affected mainly by the movement of country produce and fluctuations in values of farm products. The aver age was approximately 12 per cent below a year ago, according to the reporting firms. Hardware — With the exception of 1935, May sales of the reporting firms were the smallest for the month since 1931. Demand for seasonal mer chandise, including sporting and outing goods, was considerably below a year and two years earlier. Builders’ tools and hardware were reported quiet, but slight betterment has taken place in the imme diate past for paints, varnishes and the general run of building items. Iron and Steel Products — According to inter ests reporting to this bank, activities in the iron and steel industry in the district during May and the first half of June receded to the lowest point of the year. The usual slowing down, incident to seasonal factors, was accentuated by the general business depression and the policy of consumers to refrain from making commitments beyond immediate or well defined requirements. This was true particu larly, of the more important consuming groups, including the railroad, automotive and building industries. Absence of buying by these interests has had the effect of removing large tonnage demand by collateral industries depending upon them. Manufacturers of railroad accessories, auto mobile parts and building materials report a dearth of new orders, except for replacements and repairs. Fabricators of structural steel report a fur ther shrinkage in backlogs of unfinished orders and as of the first week in June operations at the prin cipal yards averaged below 25 per cent of capacity, as against about 55 per cent a year ago. Shipments of pig iron to district melters during May were slightly below the April total and less than one-half as large as in May, 1937. The melt, however, showed little change from April to May, owing principally to an increase at stove and heating apparatus plants and some jobbing foundries, which served to offset decreases elsewhere. Production of steel ingots in this general area increased slightly between May 15 and June 15, being at 39.3 per cent of capacity on the latter date, which compares with 33.3 per cent a month earlier and 93 per cent on June 15, 1937. Distribution of iron and steel from ware houses and by jobbers in May was about on a parity with April, but approximately 38 per cent less than in May, 1937. Demand for farm implements, wire fencing and other commodities used chiefly in the country continued the steady recession of recent months. Prices of finished and raw materials under went no notable changes as compared with the pre ceding thirty days, an exception being scrap iron and steel, which declined further to the lowest levels of the present downward movement. Reaffirmation of current prices on most finished steel commodities and on pig iron for third quarter were announced in early June by leading producers. For the entire country, pig iron production in May fell sharply to a point near the 1934 levels. The total, according to the magazine “ Steel/’ was 1,260,937 tons, against 1,388,008 tons in April and 3,545,180 tons in May, 1937. Steel ingot production in the United States in May amounted to 1,806,805 tons, against 1,925,166 tons in April and 5,151,909 tons in May, 1937. TR AN SPO RTATIO N According to officials of railroads operating in this district, freight traffic in May and early June showed considerably less than the ordinary seasonal increase, and volume continued below that during the like period during all years since 1932. With the exception of grain and grain products, the move ment of all classes of freight was smaller than a year ago, with heaviest declines in miscellaneous freight, coal, ore and merchandise L. C. L. Extensive prep arations have been made by all roads for handling the bumper winter wheat crop. The St. Louis Ter minal Railway Association, which handles inter changes for 28 connecting lines, interchanged 72,388 loads in May, against 67,958 loads in April and 96,646 loads in May, 1937. During the first nine days Page 3 of June the interchange amounted to 21,474 loads, which compares with 21,102 loads during the same interval in May and 25,526 loads during the first nine days of June, 1937. Passenger traffic of the re porting lines in May decreased 7.85 per cent in the number of passengers carried and 8.35 per cent in revenue as compared with the same month last year. Estimated tonnage of the Federal Barge Line be tween St. Louis and New Orleans in May was 217,800 tons, as against 186,495 tons in April and 178,858 tons in May, 1937; cumulative tonnage for the first five months exceeded that of the compara ble period in 1937 by 42.5 per cent. For the entire country, loadings of revenue freight for the first 22 weeks this year, or to June 4, totaled 11,973,078 cars, against 15,964,597 cars for the same period last year and 13,951,070 cars in 1936. R E TA IL TR A D E Department Stores — The trend of retail trade in the Eighth District, as reflected in statistics of department stores in the principal cities which re port to this bank, is shown in the following compar ative statement: Stocks ___________ Net Sales______________on Hand May, 1938 5 mos. 1938 May 31,*38 compared with to same comp, with . A P ^ i l 938 May 1937 period ’ 37 May 3 1 /37 Ft. Smith, Ark...........+ 1 6 .2 % + 7.4% + 0.7% — 13.1% Little Rock, Ark........— 4.9 — 13.9 — 7.7 — 12.5 Louisville, K y........... .— 16.0 — 27.3 — 10.7 — 4.9 — 5.3 — 4.7 — 5.5 Memphis, Tenn..........+14.0 Pine Bluff, Ark......... .+ 5.3 — 18.6 — 20.0 — 0.7 — 16.8 — 6.7 — 2.6 Quincy, III................. .— 2.0 St. Louis,-Mo........... ..— 19.2 — 13.6 — 6.7 — 12.2 Springfield, M o..........— 13.2 — 10.5 — 2.2 — 18.9 — 9.0 — 7.5 — 14.9 All Other Cities........ .— 6.8 8th F. R. District..... .— 12.5 — 13.7 — 6.8 — 10.4 Stock T umover Jan. 1, to May 31, 1938 1937 1.14 .99 1.14 1.11 1.56 1.66 1.24 1.29 v .95 1.06 1.22 1.36 1.64 1.63 1.13 1.01 1.13 1.09 1.50 1.50 Percentage of account and notes receivable out standing May 1, 1938, collected during May, by cities: Installment Accounts Fort Smith...... ..... % Little Rock......15.4 Louisville........ 11.9 Memphis..........26.5 Pine Bluff................ Excl. Instal. Installment Accounts Accounts 41.7% Quincy..................... % 35.1 St. Louis........... 21.5 51.1 Springfield................ 42.1 Other Cities......12.9 41.2 8th F. R. Dist.. 19.0 Excl. Instal. Accounts 47.4% 57.0 28.4 57.1 50.6 Specialty Stores — May results in men’s fur nishings and boot and shoe lines are shown in the following table: N et Sales___________ May, 1938 5 mos. 1938 compared with to same April 1938 May 1937 period *37 Men’s Furnishings.... — 18.6% — 28.4% — 15.1% Boots and Shoes....... — 25.1 — 14.7 + 1.6 Stocks on Hand May 31/38 comp, with May 3 1 /3 7 — 1 2 . 1 %' + 6.4 Stock T urnover Jan. 1, to May 31, 1938 1937 .94 1.11 2.84 2.77 Percentage of accounts and notes receivable outstanding May 1, 1938, collected during May: Men’s Furnishings............... 31.4% Boots and Shoes........................39.1% MINING AND OIL Coal — Except for a further fairly substantial decrease in inventories from April to May, condi tions generally in the coal industry developed no. Page 4 signs of betterment. Production declined in April, demand from all consuming groups is slow and fail ure of costs to decrease with production has nar rowed profit margins, according to mine operators. In April stocks of soft coal held by industrial con sumers declined from 30,259,000 tons to 28,943,000 tons on May 1, with all classes of users sharing in the decrease. Consumption as a whole also declined sharply in April when compared with the preced ing month and a year ago. Output of soft coal in the United States during May was estimated by the National Bituminous Coal Commission at 21,995,000 tons, against 22,380,000 tons in April and 30,077,000 tons in May, 1937; cumulative total for the first five months this year was 129,413,000 tons, which compares with 191,141,000 tons during the same period in 1937. At mines in this general area production in May was 3.9 per cent and 19.5 per cent smaller, respectively, than a month and a year earlier, and cumulative output for the year to June 1 was 27.2 per cent less than for the comparable interval in 1937. Illinois mines produced 1,874,332 tons in May, against 2,167,039 tons in April and 2,067,090 tons in May, 1937. There were 81 mines in operation in May and 22,020 men on payrolls, which compares with 95 active mines and 25,226 operatives in April. Petroleum — April output of crude oil in states of the Eighth District was 1.4 per cent greater than in March and 99.7 per cent above that of April, 1937. Cumulative total for the first four months this year exceeded that of the like period in 1937 by 89.9 per cent. Stocks on May 1 wrere 1.2 per cent greater and 2.8 per cent smaller, respectively, than a month and a year earlier. Detailed production and stock figures by states are given in the following table: _____ Production_____ (In thousands Apr., Mar., Apr., of barrels) 1938 1938 1937 Arkansas............. 1,576 1,562 807 Illinois................. 1,388 1,330 386 Indiana................ 73 73 68 Kentucky........ . 432 457 476 Totals.............. 3,469 3,422 1,737 Cumulative 1938 1937 5,759 3,144 4,954 1,507 282 258 1,706 1,779 12,701 6,688 _____ Stocks Apr., Apr., 1938 1937 2,673 3,355 11,357 11,336 3,198 3,144 1,116 1,034 18,344 18,869 AGRICULTU RE Combined receipts from the sale of principal farm products and Government payments to farm ers in states including the Eighth District during the period January-April, 1936, 1937, 1938 and dur ing April, 1937, and 1938 are given in the following table : (In thousands of dollars) 1938 April 1937 Indiana................... $22,822 $ 26,717 Illinois.................... 38,434 40,780 Missouri................. 16,763 19,167 Kentucky............... 7,109 7,474 Tennessee.............. 7,855 7,747 Mississippi............. 6,581 6,794 Arkansas................ 6,640 8,137 Totals.......... . 106,204 116,816 Cumulative for 4 months 19Jg ^937 1936 $ 79,643 141,204 63,530 67,485 43,847 35,834 31,735 $ 96,028 156,929 69,400 68,482 46,468 43,262 34,245 $ 75,889 129,422 65,502 36,050 28,095 21,039 17,594 463,278 514,814 373,591 Farming Conditions — Viewing the situation as a whole, growing conditions in the Eighth Dis trict and prospective yields for early crops appeared better on June 1 this year than on the same date in any year since 1929, according to reports of the United States Agricultural Department, agricultu ral departments of the several states and unofficial advices received by this bank. Following a succes sion of dry seasons which adversely affected sec tions of the area, a wet spring has made up defici encies of moisture and promoted growth of all de scriptions of vegetation. Throughout the area sub soil conditions are reported the most favorable in a number of years. In the lowlands, however, exces sive rains in late May and early June have resulted in broad areas being covered with standing water and a certain amount of damage to growing crops. Considerable transplanting of corn, cotton and other field crops will be necessary, but the extent of these operations is no greater than has been ex perienced in many past years. The wet weather, particularly in the first half of June, hampered farm work, and in the northern tiers of the district such work is from a week to ten days behind the usual seasonal schedule. Proper cultivation of row crops has been hampered, and quite generally in the rich river and creek bottoms, weeds and grass have gained headway. At mid-June sunshine and higher temperatures wrere much needed to obtain best results. Employment on farms during early June showed somewhat greater than the usual seasonal increase, owing to the relative early maturity of a large wheat crop. The number employed, however, is reported smaller than a year ago. Prices of farm products continued to decline during May, but since June 1 there has been a rather sharp recovery in a number of commodities, notably wheat. As of June 4, the farm products group of the Bureau of Labor Statis tics Index stood at 67.2 per cent of the 1926 average, a decline of 2.3 per cent under the preceding week, and comparing with 67.4 per cent on May 7; 89.3 per cent on June 5, 1937; 76.5 per cent on June 6, 1936 and 60.7 per cent on June 9, 1934. Corn — Despite the handicap of wet w^eather, planting of corn had been about completed at midJune, except in lowlands where soil preparation and seeding was held up by high water. Typical of con ditions in other important corn producing states of the district were reported in Illinois, where planting started early this season and was about half com pleted by May 15 and 80 per cent by June 1. Field work has been hampered part of the time in some areas and all the time in others. Considerable re planting has been necessitated by cutworm damage, flooding of lowlands and washing of upland farms. Cotton — Reports from scattered sections of Arkansas and Mississippi indicated that planting of the cotton crop had been about completed by June 1, with more than one-half the acreage chopped and plowed. Stands, generally speaking, are some what above average; the color is good and the plant healthy. Owing to favorable weather during plant ing time, germination has been good, and plant pests have not been in sufficient numbers to cause apprehension. In the immediate past, that is since the first week in June, there has been too much rainfall, and most nights were cool. From what can be learned, acreage in all states of the district will be just about equal to the Government allotment. The crop as a whole is ten days to two weeks late. Reflecting slack demand, both for domestic con sumption and export, and effects of the business depression, prices of raw cotton in late May de clined to a new low for the season. In the St. Louis market the middling grade ranged from 7.15c to 8c per pound between May 16 and June 15, closing at 7.4c on the latest date, which compares with 8c on May 16 and 12c on June 15, 1937. Receipts at Arkan sas compresses from August 1, 1937, to May 30, 1938, totaled 1,779,655 bales, against 1,300,011 bales during the same period a year earlier. Stocks on hand as of May 1 amounted to 671,006 bales, against 176,504 bales on the corresponding date in 1937. Fruits and Vegetables — Eighth District pros pects for fruits and vegetables underwent no change worthy of note from April to May, and outlook as of mid-June was for about average crops for most species. Early reports indicate that acreages of cer tain vegetables for manufacturing purposes will be under last year, due to intentions of packers to cur tail production this season. Apple prospects in some commercial districts were lowered during May and early June by heavy drop incident to excessive moisture and poor pollination. In its report based on conditions as of June 1, the U. S. Department of Agriculture estimates the peach crop in states of the district at 6,258,000 bushels, against 10,238,000 bushels harvested in 1937 and the 10-year (19271936) average of 6,552,000 bushels; pears, 1,717,000 bushels, against 3,379,000 bushels last year and 10-year average of 1,900,000 bushels. Livestock — The movement of livestock to market in May increased in about the usual seasonal amount but in this area was smaller than in May a year ago. The high average condition of herds generally through the district, which has obtained since last fall, continued during the past thirty days. Page 5 Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: ______ Receipts_______ __________Shipments May, April, May, May, April, May, 1938 1938 1937 1938 1938 1937 104,385 87,000 131,894 62,074 53,254 83,580 201,684 188,121 145,880 124,670 107,764 89,944 2,572 2,409 3,077 2,430 2,412 2,868 122,233 52,014 187,937 39,020 14,984 97,882 Cattle and Calves..... H ogs.......................... Horses and Mules.... Sheep......................... Totals..................... 430,874 329,544 468,788 228,194 178,414 274,274 Tobacco — Aside from too much rain in sec tions of the burley district, weather has been favor able for transplanting, and about three-fourths of the burley acreage had been set at mid-June, with relatively little replanting necessary. Rains were also heavy in the dark air-cured district, but plant ing there has been completed, except in lowlands where the ground was too wet to work. In the east ern fired district the crop has been planted and stands are reported fine. There have been scattered reports of cutworm damage, however, there are sufficient plants to supply all missing hills and com plete allotted acreage. Good stands are reported general in the western district. COM M ODITY PRICES Range of prices in the St. Louis market between May 16, 1938 and June 15, 1938, with closing quota tions on the latter date and on June 15,1937,follows : turns are disclosing rather spotty quality, and from some sections, less than expected yields. Wheat prices, which had declined to the lowest levels in more than four years during May, recovered a con siderable part of the loss during the second week in June. The rise was ascribed to disappointing thresh ing returns, and less favorable crop reports in ‘this country and abroad. BUILDING The dollar value of permits issued for new con struction in the five largest cities of the district in May was 20.1 per cent greater than in April and 27.5 per cent less than in May, 1937. According to statistics compiled by the F. W. Dodge Corpora tion, construction contracts let in the Eighth Fed eral Reserve District in May amounted to $17,318,000 which compares with $14,384,000 in April and $13,332,900 in May, 1937. Building figures for May follow : (Cost in thousands) New Construction____ Permits Cost 1938 1937 1938 1937 20 35 $ 50 $ 136 Little Rock... 16 35 51 18 94 79 428 380 . 210 362 296 256 St. Louis...... 284 474 998 293 ___Repairs, etc. Cost Permits 1938 1937 1938 1937 Fl 8 ' 220 $ 59 ” $ 8 1 20 39 80 148 65 61 18 50 137 193 256 115 210 277 215 1,096 May Totals.. 624 April “ .. 632 March “ .. 706 666 790 745 681 861 789 1,349 1,123 1,494 1,861 2,167 1,519 962 900 873 427 1,403 534 450 551 380 C lose H ig h L o w Tune 15, 1938 Middling Cotton...per lb. .0715 .08 Hogs on H oof.....per cwt. 9.15 7.10 *Nominal quotations. .074 7.50@9.05 1.0974 l.lO ^ g 1.12 1.23 *A 1 .2 2 ' 1 .16*/2 1 .0 6 §* .7 4 fg 1.19 1.25 .39 *4 .353/6 .37 .49 6.1 5 7.75 .12 8.75@11.50 Winter Wheat — In its report of June 1 the U. v . Department of Agriculture estimates output S of winter wheat in states of the Eighth District at 122,116,000 bushels, a decrease of about 6,000,000 bushels from the May 1 forecast, and comparing with 138,851,000 bushels harvested in 1937, and the 10 year (1927-1936) average of 88,721,000 bushels. The decrease from the preceding month was attrib uted to a number of causes, among them excessive moisture, more apparent effects of the early April frost and damage.from insects and rust. Harvesting of the crop is under way, but has been delayed in many sections by heavy rains. Early threshing re Page 6 CONSUMPTION OF E LECTRICITY June 15, 1937 W h eat *J u ly ..........................per b u ..$ . 8 1 ^ $ .7 0 $8 1 ^ $ * S e p t ..................................“ .8 2 * 6 .7 1 5 4 .82 3^ * D e c ............................... .... " .8 3 ^ .7 3 * 4 .835/s * N o . 2 red w in ter “ .8 6 .6 8 1 4 .86 * N o . 2 hard “ “ .8 7 .69 *A .8 7 C om *J u ly ................... ...........“ .60 54 .5 4 ^ .5 7 ^ .61 .54*/2 .583/6 * S e p t .................................. “ * D e c . ...............................“ .5 9 H .5 2 5 4 .5 7 .5 8 . 5 3*4 .56 * N o . 2 m ix e d ............“ * N o . 2 w hite ............“ .59 H . 5 4 . 5 7 O a ts •July ................... ... “ .2 6 5 4 .23 3/8 .2 5 ^ * S e p t ...................................“ .2 6 5 4 .2 3 .25 3^ * D e c ............................... .....“ .2 7*4 .26*A .26 U * N o . 2 w h ite ............“ .31 54 .2 8 .2 9 *4 F lo u r 3 .7 5 4 . 1 0 @ 4 . 4 0 5 .6 5 @ S o ft p a te n t........... p e r b b l. 4 .4 0 S p rin g “ ........... ...... “ 6 .1 5 5 .4 5 5.7 5 @ 6.1 5 7.35 @ Public utilities companies in six large cities of the district report consumption of electric current by selected industrial customers in May as being slightly greater than in April and 17.4 per cent less than in May, 1937. Detailed figures follow : (K .W .H . in thous.) No. of May, April, May, Custom1938 1938 1937 ers K:W .H . K .W .H. K .W .H . Evansville.... 40 2,1852,195 3,612 Little Rock... 35 1.9041,880 1,890 Louisville..... 82 7,370 7,453 10,080* Memphis....... 31 1,9121,958 2,254 Pine Bluff..... 20 604678 932 St. Louis....... 199 22,036 21,030 24,833 Totals........407 *Revised. 36,011 35,194 43,601 May, 1938 compared with April, 1938 May, 1937 — 0.5% — 39.5% + 1.3 + 0.7 — 1.9 — 26.9 — 2.3 — 15.2 — 10.9 — 35.2 + 4.8 — 11.3 -f 2.3 — 17.4 LIFE INSURANCE Sales of new, paid-for, ordinary life insurance in states including the Eighth District during May, the preceding month, and a year ago, together with the cumulative totals for the first five months this year and the comparable period in 1937 are shown in the following table: (In thousands May, April, May, Cumulative Totals Cumul. of dollars) 1938 ____ 1938__ 1937 1938 _ 1937_ change _ Arkansas.......... $3,358 $ 3,159 $ 4,175 $ 16,507 $ 19,710 — 16.3% Illinois.............. 38,144 39,552 48,865 208,640 257,487 — 19.0 Indiana............ 10,996 11,477 15,351 57,801 73,200 — 21.0 Kentucky........ 5,465 6,225 6,934 31,358 30,670 + 2.2 Mississippi....... 3,432 3,158 4,081 15,378 18,432 — 16.6 Missouri........... 15,486 15,701 19,498 82,178 97,469 — 15.7 Tennessee........ 6,938 7,055 8,547 34,143 43,020 — 20.6 Totals........... 83,819 United States... 490,658 86,327 499,656 107,451 446,005 539,988 — 17.4 630,690 2,541,305 3,170,356 — 19.8 BANKING AND FINANCE Demand for credit from all the borrowing groups in the Eighth District continued to decline, and at mid-June reached the lowest levels so far re corded in the present depression. Inquiries for funds to finance agricultural operations, notably the har vest of winter wheat and movement of early fruits and vegetables, while showing the usual seasonal expansion, were in smaller aggregate volume than at the same time in any recent year. At commercial banks routine liquidation of mercantile and indus trial loans was in considerable volume, and more than counterbalanced new commitments and renew als, so that total loans and discounts of these insti tutions fell below the month before, and were meas urably smaller than a year ago. Reflecting scant demand for credit and the overplus of loanable resources of the banks, interest rates remained at or about the record low levels which have obtained in recent months. Member Banks— Between May 18 and June 15, total loans of the reporting member banks in the principal cities decreased sharply, reaching a new low point for the year. Gross deposits also dropped to a new low for the year during the first part of the period, but turned as rapidly upward during the final week, and on June 15 were slightly higher than a month earlier. There were broad fluctuations in holdings of Government securities, which, with variations in deposits, reflected large shifts in St. Louis around June 1, the date on which personalproperty tax assessments are made. Reserve bal ances moved upward and at $160,636,000 on June 8 were the largest of record. Statement of the principal resource and liability items of the reporting member banks follow s: May 18, 1938 J.une 16, 1937 Loans—total...................................................... $281,778 129*17949 $283,321 42,999 128,183 8,903 5,204 12,564 47,659 7,252 42,571 120,646 10,909 6,064 12,551 44,938 8,393 (In thousands of dollars) June 15, 1938 Commercial, industrial, and agricultural: On securities................................................. 41,463 Otherwise secured and unsecured............. 125,064 Open market paper............................... .......... 6,994 5,098 Loans to brokers and dealers......................... Other loans to purchase or carry securities... 12,577 Real Estate loans.............................................. 47,870 Loans to banks.................. ............................... 6,757 Other loans: On securities................................................. 10,059 25,896 Otherwise secured and unsecured............. 11,000 28,185 12,276 24,973 Investments—total............................................ 359,345 368,106 357,154 U. S. Gov't obligations.................................... 204,401 Obligations guaranteed by U. S. Gov't........ 60,294 Other securities................................................ 94,650 220,300 56,385 91,421 205,388 48,826 102,940 Demand deposits.............................................. 718,344 Time deposits.............................. ..................... 187,202 703,730 187,569 688,896 184,176 Gross deposits.................................................... 905,546 891,299 Borrowings.......................................................................................... 873,072 1,000 Above figures are for 24 member banks in St. Louis, Louisville, Memphis, Little Rock and Evansville. Their resources comprise approxi mately 62.0 per cent of the resources of all member banks in this district. Aggregate amount of savings deposits held by selected banks on June 1 was 0.2 per cent smaller than on May 4, and 2.2 per cent greater than on June 2, 1937. At downtown St. Louis banks, as of the week ended June 15, interest rates charged were as fol lows: Customers’ prime commercial paper, \y2 to 5 per cent; collateral loans, 2 to 5y2 per cent; loans secured by warehouse receipts, \y2 to 5% per cent; interbank loans, 2% to 5 per cent and cattle loans, Ay2 to Sy2 per cent. Federal Reserve Operations — The volume of the major operations of the Federal Reserve Bank of St. Louis (including its Louisville, Memphis and Little Rock branches) during May, 1938, is indi cated by the following figures: Pieces Checks (cash items) handled............................... 4,927,440 Collections (non-cash items) handled............... 131,849 Transfers of funds................ ................................. 4,703 Currency and coin received and counted........... 19,276,805 Rediscounts, advances and commitments....... 11 New issues, redemptions, and exchanges of securities as fiscal agent of U. S. Govt., etc. 12,493 Bills and securities in custody— coupons clipped 11,737 Amounts $ 981,634,696 28,655,540 287,451,298 31,358,548 377,000 Totals........................................ ............................ 24,365,038 1,363,965,752 34,488,670 ....................... Changes in the principal assets and liabilities of this bank appear in the following table: June 18, 1938 (In thousands of dollars) 204 Industrial advances under Sec. 13b..... $ 30 Other advances and rediscounts........... 2 Bills bought (including participations) 118,568 U. S. securities......................................... May 18, 1938 $ 205 40 2 119,220 June 18, 1937 $ 328 151 86 111,385 Total earning assets............................. 118,804 119,467 111,950 Total deposits.... ........................................ 347,609 286,687 174,019 310,997 249,225 175,797 312,072 239,983 178,119 569 508 1,143 73.2% 74.6% Industrial commitments under Sec. 13b Ratio of reserve to deposit and F. R. Note liabilities................... 75.5% Following are the rates of this bank for accom modations under the Federal Reserve A ct: (1) Rediscounts and advances to member banks, under Sections 13 and 13a.............................. .........................l l 2% per annum / (2) Advances to member banks, under Section 10b........... 2 % per annum (3) Rediscounts, purchases, and advances to member banks, nonmember banks and other financing in stitutions, under Section 13b: (a) On portion for which such institution obligated....3 yi % per annum (b) On remaining portion...............................................4 % per annum (4) Commitments not exceeding six months to member banks,nonmember banks and other financing in stitutions, to rediscount, purchase, or make ad vances, under Section 13b........................... ............... ^2% flat (5) Advances to established industrial or commercial^ 4 % to businesses, under Section 13b......................... ....... \ 5 % per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured by direct obligations of United States under Section 13....... 4 % per annum Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: May, (In thousands of dollars) 1938 East St. Louis and Natl. Stock Yards, 111.. $ 30,758 El Dorado, Ark..... 4,907 Evansville, Ind...... 24,237 Fort Smith, Ark.... 10,268 3,823 Greenville, Miss.... 1,477 Helena, Ark........... 31,888 Little Rock, Ark.... Louisville, K y....... . 135,577 91,026 Memphis, Tenn..... 5,052 Owensboro, K y..... 6,551 Pine Bluff, Ark..... 6,958 St. Louis, M o........ 590,250 1,797 Sedalia, M o......... ... 13,638 Springfield, M o..... Texarkana, Ark-Tex. 5,889 (Completed June 22, 1938) 964,096 April, 1938 May, 1937 $ 28,916 $ 32,829 5,805 4,579 26,620 32,515 10,480 11,321 4,131 4,672 1,435 1,689 32,237 35,792 137,035 170,158 102,579 • 112,333 5,652 5,074 7,647 7,847 7,353 8,704 513,450 672,940 2,024 1,783 16,789 12,636 6,476 8,056 903,657 1,127,900 May, 1938 comp, with April, 1938 May, 1937 4- 6.4% — 15.5 — 9.0 — 2.0 — 7.5 + 2.9 — 1.1 — 1.1 — 11.3 — 0.4 — 14.3 — 5.4 + 15.0 + 0.8 + 7.9 — 9.1 — 6.3% + 7.2 — 25.5 — 9.3 — 18.2 — 12.6 — 10.9 — 20.3 — 19.0 — 10.6 — 16.5 — 20.1 — 12.3 — 11.2 — 18.8 — 26.9 + 6.7 — 14.5 Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS B Y BOA R D O F GOV E R N O R S OF F E D E R A L R E SE R V E SYSTEM In May and the first three weeks of June, industrial activity showed little change from the April level. Wholesale commodity prices gener ally declined further, but in June wheat and cotton prices advanced and at the end of the period some other staple commodities showed increases. Index of physical volume of production, adjusted for sea sonal variation, 1923 1925 average = 100. By months, January, 1934, through May, 1938. Latest figure, May, 1938, 76. Production— In May the Board’s seasonally adjusted index of in dustrial production was at 76 per cent of the 1923-1925 average, as com pared with 77 in April and an average of 79 in the first quarter of the year. Steel ingot production, which in March and April had been at a rate of 33 per cent of capacity, averaged about 31 per cent in May, and automobile output also showed a decrease. Textile production increased in May. Activity at woolen mills rose sharply and there was some in crease at cotton mills, while silk mills showed a decline. Changes in output in most other manufacturing industries were largely seasonal in character. Output of crude petroleum was curtailed sharply in May, and bituminous coal production declined somewhat, while anthracite pro duction increased considerably. Lake shipments of iron ore were in very small volume, reflecting both the low rate of activity in the iron and steel industry and the large supply of ore remaining from the pre vious season. In the first three weeks of June output of steel and petroleum in creased somewhat, but the rate of activity in these industries remained below the average for May. Automobile production showed a further decline and continued below sales, so that stocks of new cars were fur ther reduced. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a substantial increase in May, reflecting chiefly a marked rise in awards for publicly-financed projects. Contracts for residential building increased moderately and were in about the same amount as in May a year ago. Other privately financed work remained in small volume. Index of total loadings of revenue freight, adjusted for seasonal variation, 1923-1925 average = 100. By months, January, 1934, through May, 1938. Latest figure, May, 1938, 58. W H O LE S A LE P R IC E S FARM PRODUC ;tsA LVr FO0DS \ , i - V ' v . A j u j S V a - - ........... u HHER S COM!MODI TIES I v\/V / V t934 1935 1936 1937 1938 Indexes compiled by the United States Bureau of Labor Statistics, 1926 = 100. B y weeks, 1934 through week end ing June 18, 1938. Latest figure, farm prices, 69.7; foods, 73.5; other commodities, 81.5. MEMBER BANK R E S E R V E S AND RELATED ITEMS Employment.— Factory employment and payrolls continued to de cline from the middle of April to the middle of May. There were fur ther decreases in employment in the machinery, steel, and automobile industries and a sharp decrease in the number employed in the men’s clothing industry. In most other manufacturing lines changes in employ ment were small in amount. The number employed at mines and on the railroads continued to decline. Distribution — Department store sales declined considerably in May and the Board’s seasonally adjusted index was at 79 per cent of the 1923-1925 average, as compared with 83 in April. Sales at variety stores and by mail order houses also decreased from April to May. Reports for the first half of June indicate about the usual seasonal decline in depart ment store sales. The volume of railroad freight traffic showed little change in May following sharp declines in previous months. Commodity Prices — Prices of both agricultural and industrial com modities decreased in the latter part of May. In the first three weeks of June wheat and cotton prices advanced, while prices of industrial products generally continued to decline. Bank Credit — Reserves of member banks continued to increase in May and June, largely as the result of Treasury disbursements from its deposits with the reserve banks. Excess reserves increased chiefly at city banks, reflecting retirement of treasury bills and further expan sion of bankers’ balances. Demand deposits at reporting member banks in 101 leading cities increased further during the first half of June, and total loans and in vestments, which had declined in May, also increased, reflecting sub stantial purchases of Uunited States Government obligations by New York City banks. 1934 1935 1936 1937 1938 Wednesday figures, January 3, 1934, through June 15, 1938. Page 8 Money Rates — Yields on Treasury bonds declined further in the four weeks ending June 18, and those on Treasury notes reached new low levels. Rates on open-market commercial paper declined somewhat about the middle of June.
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