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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Morning Papers of June 30, 1941 F E D E R A L R E S E R V E b u B A N K OF ST. L O U I S u UNITED STATES DEFENSE BONDS tU U R T fiST AM ERICAN BA N K E R S A S S N . SUMMARY OF EIGHTH DI STR ICT Tune 1, 1941, comp, w ith 1940 Av. 1930-39 Agriculture: Estimated production of winter wheat . . . — 16% — 10% May, 1941, comp, w ith April, 1941 M ay, 1940 Livestock: Receipts at National Stock Yards------. . . + 11% — 11% — 43 + 39 Shipments from aforesaid Yards........ Production and Distribution: 4- 47 Sales by mfrs. and wholesalers........... — 3 — 2 + 23 Department store sales......................... + 32 Car loadings.......... ....................... ........... . . . + 8 Building and Construction: + 22 ti 1 1 v • i Number. . . . — 5 Bldg. permits, mcl. repairs J (- Qst + 30 . . . — 35 + 87 Value construction contracts awarded . . . + 10 Miscellaneous: — 23 — 8 • t failures j Liabilities J Number.......... Commercial r '1 — 44 . . . + 26 + 26 Consumption of electricity.................. . . . 4- 8 Debits to individual accounts.............. + 24 -0...+ i Life insurance sales......................... June 11/41, comp. w ith June 12/40 M ay 14/41 Member Banks (24-): Gross deposits......................................... . . . + i% Loans......................................................... . . . + i Investments............................................... . . . — 10 + 15% + 22 + io S T IM U L A T E D by steadily broadening require ments of the national defense program and extraordinarily heavy demands for merchandise of all descriptions for civilian consumption, general business activity in the E ighth D istrict during May and the early weeks of June rose to new high levels, after allowance for custom ary seasonal changes. W hile greatest gains were noted in industries and areas where defense work is highly concentrated, the upturn was widely extended, both as to geo graphical locations and the various lines of industry and trade. In a num ber of m anufacturing classifica tions, particularly those engaged in producing com mercial goods, operators are beginning to feel acutely the pinch of scarcity of supplies of raw and semi-finished m aterials, also of skilled and even com mon labor. This situation has been emphasized in the immediate past by enforcement of priorities and allocation of commodities essential for arm am ents and defense purposes. Production as a whole during the period was augm ented by additional plant facil ities completed and placed in operation. Largely as a result of increased purchasing power incident to expansion in employment and payrolls and higher farm incomes, distribution of commod ities through both retail and wholesale channels continued to rise. Sales of departm ent stores in the leading cities during May were 2 per cent less than in April and 23 per cent greater than in May, 1940. Cumulative sales for the first five m onths exceeded those of the same period a year ago by 18 per cent. The decline from April to May is seasonal in char Page 2 acter and considerably sm aller than the average of recent years. Combined sales of all wholesale and jobbing interests whose statistics are available to this bank were 3 per cent less than in April and 47 per cent larger than in May, 1940. R eports from scattered sections of the district indicate th a t wholesale m erchants are experiencing difficulty in securing certain types of goods, particularly those made entirely or largely of metals. Certain retailers are endeavoring to place orders for 1942 delivery of the more durable classes of consum er goods, such as household appliances, furniture, etc. In the St. Louis area M ay sales of new passenger automobiles were 5 per cent less than the record total of April, but 1 per cent greater than a year ago. A t steel mills in this general area, ingot produc tion as of m id-June was reported at 98 per cent of capacity, the same rate which has obtained since March, and com paring w ith an average rate of 68 in June, 1940. In face of the high rate of production and heavy volume of shipm ents, backlogs at mills, foundries and machine shops increased further, and in m any instances prospective production during the balance of this year has been sold. Sales and production of fire clay and quarry products, glass, and other building m aterials were m aintained at high levels. Production of bitum inous coal expanded rapidly following the shutdow ns incident to labor difficul ties during April. A t mines in this general area out put in M ay was more than four tim es as much as in April and 12 per cent greater than in May, 1940. For the first five m onths, however, cum ulative pro duction fell 5 per cent below th at of the same period a year ago. Reflecting pressure of demand for de fense and other purposes, zinc production in the TriState area moved upw ard during May, and both pro duction and shipm ents were appreciably larger than a year ago. U nder the same stim ulus activities at fluor-spar mines in Illinois and K entucky have heavily increased production. These two states sup ply about 70 per cent of the nation’s requirem ents for this m aterial. Consum ption of electric current by industrial users in the principal cities in May was 8 per cent greater than in April and 26 per cent above a year ago. Commercial failures in the E ighth Federal Reserve D istrict in May, according to Dun and B radstreet, num bered 33, involving liabilities of $234,000, as against 36 insolvencies in April w ith liabilities of $185,000 and 43 defaults for a total of $415,000 in May, 1940. D E T A I L E D SU R VE Y OF DIS TR IC T M A N U F A C T U R IN G A N D W H O L E S A L IN G Lines of Commodities N et Sales Stocks Data furnished by Bureau o f Census, U . S. D ept, of Commerce. May, 1941 compared with A pr.,’41 M ay,’40 M ay 31, 1941 comp, with M ay 31, 1940 A utom otive Su p p lies.............................. Boots and S h oes....................................... Drug's and Chem icals........................... Dry G oods.............................................. E lectrical Supplies.................................. F urniture................................................... Groceries..................................................... H ardw are.................................................. Machinery, Equipment and Supplies Plum bing Su pplies.................................. Tobacco and its P rodu cts..................... M iscellaneous......................................... T otal all lin es.................................. .. + 14% ■ —24 + s — 3 + 31 +19 + + 5 4 + 45 + 19 + 11 __ 4 — 3 + + + + + + + + 3 7% 85 17 ....% — 13 40 49 + 15 45 + *i + 16 +41 10. 50 + 188 + 39 + + + +3i + 7 + 14 + 29 17 18 47 Autom obiles—Combined passenger car, truck and taxicab production in the U nited States in May totaled 518,736, as against 462,257 in April and 391,215 in May, 1940. Iron and Steel P ro d u c ts—P ro d u c tio n and ship m ents in the iron and steel industry in this area continued to rise throughout May and the first half of June. For a num ber of interests May established new records, particularly in the m atter of produc tion. Because of capacity or near full operations in some lines, incom ing orders were som ew hat smaller than during the sim ilar period imm ediately preced ing, but as a whole new business booked was in substantial volume and resulted in a further expan sion in backlogs and in the case of a broad variety of products, further extension of possible delivery dates. Despite reports of shortages of finished steel, pig iron and other m aterials elsewhere in the coun try, no shutdow ns or serious interference w ith operations in this district have resulted from this cause. D em ands are more diversified than at any tim e in the past, both w ith reference to custom ers and the several commodities. Efforts of consum ers to cover on future requirem ents have been on an extensive scale, but producers of both finished and raw m ate rials are more closely following the practice of rationing and as a result distribution to custom ers has not exceeded stocks sufficient for efficient oper ations. The inventory control ruling laid down by W ashington, providing for reports by June 10, has caused some confusion because of varied interpre tations, but the situation is being rapidly adjusted. Iron and steel warehouse and jobbing interests, whose business in recent m onths has been of record size, have been obliged to refuse orders for certain commodities in the recent past because of depletion of stocks. Ingot production at steel mills in this area as of m id-June was at 98 per cent of rated capacity, un changed from a m onth earlier and com paring w ith 68 per cent a year ago. Rolling schedules continue at the high rate which has obtained since early last spring. Deliveries on sheets, plates, strip and other flat rolled items are extended from eight weeks to three m onths, and capacity has been disposed of for the balance of the year. A conspicuous phase in the steel situation has been the largely increased de mands of railroad equipm ent builders. In May domestic freight car orders placed totaled 18,630 units, bringing to 62,026 units the num ber placed during the first five m onths this year, which com pares w ith 8,698 units during the same interval in 1940 and 8,208 units in 1939. Large orders are being executed at plants in this district. Production of pig iron for the entire country in May, according to the m agazine “Steel,” totaled 4,596,113 tons, the third highest m onthly total of record, and com paring w ith 4,340,555 tons in April and 3,497,157 tons in M ay 1940. Steel ingot produc tion in the U nited States in May am ounted to 7,101,759 tons, as against 6,757,728 tons in April and 4,967,782 tons in May, 1940. M IN IN G Coal — Continued heavy industrial demands for fuel and quite general response to the campaign to impress upon domestic users the im portance of pur chasing and taking delivery of their w inter supplies during the sum m er were reflected in an active m ar ket for bitum inous coal during May and June. According to retailers, orders are being placed by their custom ers much earlier than is usually the case, and extensive provisions for their future needs are being made by public institutions, hotels, ap art m ent houses and other users. Follow ing settlem ent of labor differences betw een operators and m iners which tied up operations dur ing April, production of soft coal in this general area rose rapidly during May, output for th at m onth being m ore than four tim es greater than in April and 12 per cent above the same m onth a year ago. F or the entire country output of bitum inous coal in May, according to the Bitum inous Coal Division, U. S. D epartm ent of the Interior, totaled 43,400,000 tons, as against 5,975,000 tons in April and 34,896,000 tons in May, 1940. D uring the first five m onths of the year 145,965,000 tons were produced, com par ing w ith 187,183,000 tons during the sim ilar interval a year ago. A t Illinois mines 3,602,536 tons were lifted in May, against 740,450 tons in April and 2,724,533 tons in May, 1940. T here were 94 mines in operation in May, w ith 24,925 men on payrolls, com paring w ith 58 active mines and 9,638 operatives in April. Page 3 R E T A IL T R A D E D epartm ent Stores — The trend of retail trade in the E ighth D istrict, as reflected in statistics of de partm ent stores in the principal cities which report to this bank, is shown in the following com parative statem ent: Stocks Stock ____________ N et Sales_________ on Hand May, 1941 5 mos. ’41 M ay 31,’41 compared with to same comp, w ith A pr.,’41 M ay,,40. period *40 M ay 31,*40 Turnover Jan. 1, to May 31, 1941 1940 Ft. Smith, A r k . . •21% + 12 % + 9% — 3% 1.37 1.14 --2 3 L ittle Rock, Ark. + 8 + 23 1.70 1.38 + 4 +21 --3 0 --3 5 Pine Bluff, A rk.. — 1 1.32 1.03 - - 22 --3 0 E. St. Louis, 111. + 14 21 --1 3 + 10 — Quincy, 111............. 1.73 1.61 + ‘i — 13 Evansville, I n d .. . 23 + 8 --3 6 --3 5 Louisville, K y .. . . — 4 2.08 1.72 — 9 21 St. Louis, Mo. . . --1 3 1.86 1.80 --4 3 49 1.38 1.40 Springfield, M o .. . Jackson, Tenn. . . •56 —41 + 15 Memphis, Tenn. . + 15 — 16 V.44 1.38 +n *A11 other c itie s. . — 35 — 18 - o1.28 1.25 + 4 1.78 1.66 8th F. R. D istrict — 2 + 23 +10 + 18 *E1 Dorado, Fayetteville, A rk; Alton, Harrisburg, Mt. Vernon, 1 11; V incennes, I n d .; Danville, Hopkinsville, K y .; Chillicothe, Mo. Trading D a y s: May, 1941— 26; A pr., 1941— 26; M ay, 1940— 26. O utstanding orders of reporting stores at the end of May, 1941, were 179 per cent greater than on the corresponding date a year ago. Percentage of accounts and notes receivable out standing May 1, 1941, collected during May, by c itie s: Installm ent E xcl. Instal. Accounts Accounts Installm ent E xcl. Instal. Accounts Accounts Fort S m ith .. L ittle R o c k .. L ouisville . . . Memphis . . . . ..95 13 17 24 41% 37 48 44 Q u in cy............. 18% St. L o u is .. . . 19 Other c itie s .. 15 8th F. R .D ist. 19 Apr., 1941 Mar., 1941 97 105 111 105 105 107 69 79 77 78 76 75 Trading D a y s: M ay, 1941— 2 6; A pr., 1941— 2 6 ; M ay, 1940— 26. Sales (daily average), U n a d ju s te d ..,............. Sales (daily average), Seasonally adjusted. May, 1940 88 88 70 79 Specialty Stores — May results in m en’s furnishings and boot and shoe lines are shown in the following table: Stocks Stock N et Sales May, 1941 5 mos. *41 compared with to same A p r./4 1 M ay/40, period ’40 M,en’s F u rn ish ings. Hoots and S h o e s .. . +9% — 1 4-49% +31 on Hand M ay 31/41 comp, with M ay 3 1 /4 0 +28% +21 '— 19% T urnover Jan. 1, to M ay 31, 1941 1940 1.33 1.01 -03.60, 2.86 Percentage of accounts and notes receivable out standing May 1, 1941, collected during M ay: M en’s F u rn ish ings.......................38% B oots and. S h o es.............................42% T R A N SP O R T A T IO N Freight traffic of railroads operating in this dis trict rose sharply in M ay and early June, w ith total volume m easurably greater than in the correspond ing periods during the preceding several years. In creases were general but m ost m arked in miscellan eous freight, which reflects the m ovem ent of gen eral merchandise. In M ay there was a notable contraseasonal gain in loadings of grain, attributable to the moving by the Commodity Credit Corporation Page 4 The Term inal Railroad Association of St. Louis, which handles interchanges for 25 connecting lines, interchanged 105,108 loads in May, as against 97,271 loads in April and 79,639 loads in May, 1940. D uring the first nine days of June the interchange am ounted to 30,081 loads, com paring w ith 29,394 loads during the same interval in M ay and 23,286 loads during the first nine days of June, 1940. F or the entire country, loadings of revenue freight dur ing the first 23 weeks this year, or to June 7, totaled 17,189,231 cars, against 14,720,474 cars for the cor responding period in 1940 and 13,329,907 cars in 1939. E stim ated tonnage of the Federal Barge Line betw een St. Louis and New Orleans in M ay was 214,100 tons, which compares w ith 159,474 tons in April and 245,728 tons in May, 1940. Cum ulative tonnage for the first five m onths this year was 706,089 tons, against 729,856 tons during the same period in 1940. W H IS K E Y 53% 58 48 51 Indexes of departm ent store sales and stocks, 8th F. R. D istrict (1923-1925 average = 100): M ay, 1941 of 15,000 to 20,000 cars of w heat from the South w est in order to make room for storage of the 1941 crop. This transfer resulted in one of the largest w heat m ovem ents for M ay in the history of this region. Follow ing the usual seasonal pattern, production of whiskey declined from April to May, however, output for the m onth was considerably larger than a year ago. Of the 61 distilleries in K entucky, 38 were in operation during May, compared w ith 52 in April and 26 in May, 1940. According to trade re ports, demand continues active for both bulk and case goods. T he cooperage situation (barrels and barrel staves) developed m oderate im provem ent, but is still reported tight. T here continues some apprehension in the industry of possibility of reg ulatory curtailm ent in the m anufacture of distilled spirits. T his attitude, however, reflects conserva tive anticipation on the p art of certain distillers rather than specific action by legislative groups. A G R IC U L T U R E Combined receipts from the sale of principal farm products and Governm ent benefit paym ents to farm ers in states including the E ighth D istrict during the period January-A pril, 1939, 1940 and 1941, and during April, 1940 and 1941, are given in the fol lowing table: fTn thousands of dollars) April 1941 I n d ia n a ................... $27,028 49,402 I llin o is..................... M issouri.................. 22,477 K en tu ck y ................ 8,131 T e n n e s s e e ............ 8,326 M ississip pi.............. 7,963 A r k a n sa s................ 10,921 T o ta ls................... 134,248 1940 $23,801 39,133 19,639 6,438 9,681 5,889 6,009 110,590 Cumulative for 4 months 1941 1940 1939 $100,977 $ 91,759 187,543 186,214 91,0,50 79,625 60,254 60,224 46,716 42,062 38,017 40,157 43,214 ____ 35,195 567,771 535,236 $ 80,583 168,151 70,446 53,632 40,432 42,528 27,472 ~483,244 Farming Conditions — W eather conditions in the E ighth D istrict during M ay and the first weeks of June were unusually varied in their effects on crops and agricultural operations generally. T he drouth, which adversely affected m any sections of the coun try, was considerably less severe in this area, many sections having received adequate m oisture, with lim ited localities reporting excessive rainfall. Ac cording to reports of the U. S. D epartm ent of A gri culture, agricultural departm ents of the several states and other informed sources, prospects for the leading productions held their own during May, and have improved under quite widespread rains since the third week of th at m onth. Taken as a whole, outlook is for ample food, feed and forage crops, ultim ate results, however, being dependent on con ditions betw een now and completion of harvests. As has been the case since early spring, avail able supplies of farm labor were below those of sim ilar periods during the past decade, w ith wages paid well above a year ago. Prices of farm products advanced further, being affected by augm ented pur chasing power and Governm ent action on loan rates on im portant crops. As of June 7, the farm products group of the Bureau of Labor Statistics index stood at 79.6 per cent of the 1926 average, the highest point reached this year, and com paring w ith 75.1 per cent on M ay 10 and 66.7 per cent on June 8,1940. Corn — Ow ing to the fact th at there was less than the average am ount of rainfall in a num ber of the im portant grow ing areas, planting of corn was slightly earlier than usual. Except where dry soil hindered germ ination, stands are good. Some tran s planting was reported necessary because of cut worm damage. F or the m ost part fields are well cultivated. Indications are th at the percentage of the total area planted to hybrids was increased again this year. In states of this district, corn loans under the 1940 loan program on May 31 totaled 16,981 on 17,308,738 bushels valued at $10,556,233. Cotton — W hile unfavorable w eather conditions in the early spring were responsible for a poor and late start for farm work in the cotton areas of the district, there has been little delay since the initial stages. Taken as a whole the crop has made fair to good progress and as of m id-June in m ost sections was as far advanced as at the same time last year. E arlier planted cotton is generally up to good stands and well worked out. Germination has been aided by precipitation since the third week in May, and scattered reports indicate th at the crop is free of insect and fungus pests. Q uite generally through the area, farm ers have good feed crops on hand and growing. Much significance is attached to the wide spread interest in securing improved varieties of seed for planting. Due to increased purchasing of equipment and fertilizers, together w ith higher wage scales, cost of m aking the crop this year is expected to be relatively high. A ccording to the National Fertilizer Association, sales of fertilizer tags in states of the E ighth D istrict for the fivem onth period, January-M ay, were 12 per cent and 24 per cent greater, respectively, than for the sim ilar periods a year and tw o years earlier. W hile there was som ew hat less activity in the spot m arkets in late M ay and early June, prices con tinued to advance and in the third week of June reached the highest point since the sum m er of 1937. Domestic mills continued to operate during the first two weeks of June at a daily rate about equal to the average in M ay and alm ost 50 per cent higher than in June, 1940. Mill sales of unfinished cloth, which had receded som ew hat in May, turned upw ard in early June. Y arn sales have apparently been small since establishm ent of a maximum price by the Government. In the St. Louis m arket the middling grade ranged from 12.60c to 14.10c per pound be tween May 15 and June 16, closing at 14.05c on the latter date, which compares with 12.50c on May 15, and 11.20c on June 15, 1940. Combined receipts at A rkansas and M issouri com presses from A ugust 1, 1940, to June 13, 1941, totaled 2,009,098 bales, as against 1,824,403 bales during the corresponding period a year earlier; shipments, 2,047,289 bales, against 2,154,991 bales. Stocks on hand as of June 13 am ounted to 840,164 bales, comparing w ith 1,025,002 bales a year earlier. Loans made by the Commodity Credit Corpora tion on 1940-1941 crop cotton through June 14, in states of the E ighth D istrict, and repaym ents on loans are shown in the following ta b le : (Amounts in thous.) T otal Loans Bales A m ount A r k a n sa s............ 128,458 M ississippi......... 77,199 M issouri.............. 12,738 T ennessee........... 15,136 T otals.................. 233,531 U . S. T otals. . .3,178,400 Repayments Bales A m ount Loans Outstanding Bales Amount $ 6,087 119,471 $5,663 8,987 $ 424 3,546 69,731 3,172 7,468 375 592 10,484 487 2,254 105 734 15,136 734 ..................................... 10,,959 214,822 10,056 18,709 904 153,056 2,135,778 102,546 1,042,622 50,510 Fruits and Vegetables — Except for dry w eather, which retarded developm ent som ew hat in certain sections, grow ing conditions for m ost fruit and vegetable crops were auspicious during May, and have improved noticeably in early June. Outlook for tree fruits is especially good. The set of peaches is abnormally large, and in certain localities orchardists have been put to considerable expense to thin out the fruit. In states including the E ighth D is trict, the U. S. D epartm ent of A griculture, in its June 1 report, estim ates peach production at 11,Page 5 773.000 bushels, as against the virtual failure of 3.768.000 bushels in 1940 and the 10-year (19301939) average of 6,965,000 bu sh els; pears, 3,384,000 bushels, against 2,871,000 bushels in 1940 and aver age of 2,135,000 bushels. Acreages planted to truck crops, both for processing and market, are expected to be som ew hat larger than last season. Livestock — The m ovem ent of livestock to m ar ket increased in about the usual amount from April to May, but in this area was somewhat smaller than a year ago. The high average condition of herds generally through the district, which has ob tained since last fall, continued during the past th irty days. Dem and for meat, particularly pork, improved and the trend of prices was upward. In early June lambs rose to the highest levels in four years and hog prices were maintained at a threeyear peak. Milk production per cow in states of this district on June 1 averaged 2 per cent higher than a year earlier and 4 per cent more than the 10-year (19301939) June 1 average. Eggs produced per 100 layers on June 1 in these states was unchanged from a year ago, but 7 per cent above the 10-year average. Receipts and shipm ents at St. Louis as reported by the National Stock Y ards were as follows: ________Receipts_______ May, April, May, 1941 1941 1940 Cattle and C alves......... 102,793 89,548 99,891 H o g s .................................. 259,235 262,060 282,500 Horses and M ules . . . . 712 779 1,333 S h eep......................... .. 73,055 39,036 10,8,593 T o ta ls............................435,795 391,423 492,317 _______Shipments_______ May, April, May, 1941 1941 1940 40,513 44,925 631 24,161 110,230 29,864 41,934 44,024 91,100 635 1,259 4,502 57,573 79,025 191,866 Tobacco — Hot, dry w eather through May retarded developm ent of plants and delayed transplanting of the burley tobacco crop. A general shortage of m oisture was reported through most of the tobacco belt until the first week in June, when practically all tobacco grow ing districts of Kentucky and Ten nessee received rains, ranging from one to three inches. The precipitation proved extremely bene ficial to all types of tobacco. As of mid-June prac tically all of the burley acreage had been trans planted, and more seasonal weather perm itted of replacing m issing plants. Some shortage of plants was reported in the one sucker, dark fired and Green River and stem m ing districts. Stocks of leaf tobacco owned by dealers and man ufacturers in the U nited States and Puerto Rico on April 1 totaled 3,111,788,000 pounds, compared with 2.899.884.000 pounds on the same date in 1940. Total stocks were 122,752,000 pounds higher than on Jan uary 1, 1941, and 211,904,000 pounds more than on April 1, 1940. Winter Wheat — Based on June 1 condition, the U. S. D epartm ent of A griculture estimates output Page 6 of w inter w heat in states including the E ighth Dis trict at 94,197,000 bushels, an increase of 3,041,000 bushels over the May 1 forecast, and com paring w ith 112,368,000 bushels harvested in 1940 and the 10-year (1930-1939) average of 104,203,000 bushels. Greatest im provem ent took place in Indiana, Illinois and Missouri. H arvesting has made considerable progress in the lower tiers of the district and is moving rapidly northw ard. E arly returns are dis closing varied results. C O M M O D ITY PR IC ES Range of prices in the St. Louis m arket between May 15 and June 16, 1941, w ith closing quotations on the latter date and on June 15, 1940, follow s: Close June 16, 1941 June 15, 1940 H igh Low $1.05*4 1.04J4 1.06 1.03^2 1.01 $ .9 3 ^ .9 5 H .97/8 .93% .9 S / 2 ■ /2 7A .76 .775/ 8 .8154 .7234 ■ 737/s .7454 .80 .73Vs .7 sy& .7 7 H .80/2 .6 1 * .60 H •5754 .3 6 /s .3 7 /s .3 8 H .3554 .35 .3 6 /2 .36 .36*4 .38 .3253 .3054 .31 6.45 5.55 .1410 9.89 5.25 4.70 .1260 8.96 5.45@ 6.35 4.90@5.45 .1405 9.89 4.85@ 5.55 4.75@ 4.95 .1120, 5.08 W heat .per bu. *Sept. * D e c.. r “ N o. 2 hard Corn *T uly............ *Sept............ *Dec............. ti Oats *July . *Sept. * D e c.. Flour .per b b l. Spring per l b . .per cwt. * Chicago quotations. l $ $ 1.00H 1.0254 1.0453 1.02 1.0.1 .80 .80*4 .81/2 .8 6 / 2 B U IL D IN G The dollar value of perm its issued for new con struction in the five largest cities of the district in May was 38 per cent less than in April and 27 per cent greater than in May, 1940. A ccording to sta tistics compiled by the F. W . Dodge Corporation, construction contracts let in the E ighth D istrict in May am ounted to $38,137,000, which compares w ith $34,532,000 in April and $20,379,000 in May, 1940. Building figures for May follow: N ew Construction Permits C ost 1940 1941 1941 1940 ( Cost in thousands) 22 49 66 67 145 30,7 654 360 400 352 M ay T otals . . . 1,402 1,020 April “ . 1,496 1,129 Evansville L ittle R ock . .. L ouisville $ 74 296 532 1,063 963 2,928 4,722 $ 140 243 311 650 963 2,307 2,111 Repairs, etc. Permits Cost 1941 1940 1941 1940 120 97 48 287 187 739 755 125 104 54 234 217 734 786 $ 95 99 58 131 236 619 710 $ 47 45 22 127 162 403 507 C O N SU M P T IO N OF EL E C T R IC IT Y Public utilities companies in six large cities of the district report consum ption of electric current by selected industrial custom ers in M ay as being 8 per cent more than in April and 26 per cent g reater than in May, 1940. Detailed figures follow: (K .W .H . in thous.) M ay, April, N o. of 1941 • Custom 1941 K .W .H . K .W .H . ers E vansville . . L ittle R ock. . . . L ouisville . . , , Pine B luff. . . 40, 35 82 31 20 125 333 5,669 2,537 13,478 4,048 1,099 53,684 80,515 5,384 2,488 12,951 4,005 1,239 48,228 74,295 May, M ay, 1941 1940 compared with K .W .H . Apr., 1941 M ay, 1940 4,775 1,877 10,189 2,899 399 43,904 64,043 + 5% + 2 + 4 + 1 — 11 + H + 8 b 19% - 35 - 32 - 40 -175 - 22 + 26 A f B A N K IN G A N D F IN A N C E Dem and for credit in the E ighth D istrict during the past th irty days expanded m oderately, being stim ulated by seasonal factors, requirem ents for financing defense production and needs of m ercan tile and industrial interests incident to improvement in general business. In m any localities bankers re port requests from small business concerns for an increase in credit lines to handle their additional volume. On the other hand num erous large com panies have been able to reduce their comm itm ents because of the fact th at routine collections have been good and Government paym ents to contractors prom pt. Dem ands to finance crops, particularly the movem ent of w inter wheat, are reported m ainly in less than expected volume. As has been the case in recent m onths, demands for financing livestock, par ticularly cattle for m arket, was reported in sub stantial volume. Interest rates rem ained virtually stationary at the low levels which have obtained for m any months. Bankers dollar acceptances outstand ing in this district on May 31 totaled $552,000, against $495,000 and $318,000 a m onth and a year earlier, respectively. M ember Banks — Between May 14 and June 11, total loans and investm ents of reporting member banks in the principal cities declined 19 per cent, but at the end of the four-week period were still 15 per cent larger than a year ago. T he decrease was confined to investm ents, m ainly T reasury bills, loans show ing an increase of 1 per cent. Gross deposits continued to soar and on the first report date in June recorded an all tim e high. T otal reserves in creased sharply, and on June 11 were 58 per cent above the low point of the year, reached in early April. Statem ent of the principal resource and liability items of the reporting member banks follows : (I n thousands of dollars) June 11, 1941 Change from M ay 14, June 12, 1941 1940 +41,281 602 Commercial, industrial, agricultural lo a n s .$223,430 — + 9,227 438 Open market paper........................ .................. 18,487 + + 626 429 Loans to brokers and dealers..............•.*.*•• 4,084 — + 218 Other loans to purchase and carry securities. 13,0.32 + 1,791 + 6,306 284 Real estate lo a n s ........................................... .... . 60,005 — — 109 40 L oans to b an ks................................ ...................... 900, — + 12,814 Other lo a n s .............................................................. 74,486 + 2,995 — 20,045 Treasury b i l l s ......................................................... 991 — 60,857 + 4,229 Treasury n o t e s ....................................................... 37,006 — 43,963 U . S. b on ds.............................................................. 196,830 + 12,066 — 2,006 991 Obligations guaranteed by U . S. Government 70,226 — — 8,501 Other securities....................................................... 116,677 + 1,900 - - 9,314 Balances w ith domestic banks......................... 194,824 - - 9,066 — 76,963 Demand deposits — adjusted*........................ 555,179 — 1,998 — 1,435 Time d e p o s its ......................................................... 191,582 — 1,111 — 2,509 U . S. Government deposits........................... 19,263 + 4,099 —74,492 Inter-bank d e p o s its .............................................. 436,296 4-19,672 * Other than interbank and Government deposits, less cash items on hand or in process of collection. A bove figures are for 24 member banks in St. Louis, Louisville, M em phis, L ittle Rock and Evansville. Their resources comprise approximately 75% of the resources of all member banks in this district. T he aggregate am ount of savings deposits held by selected m ember banks on June 4 was 0.7 per cent less than a m onth earlier and 0.6 per cent smaller than on the corresponding date a year ago. Federal Reserve Operations — The volume of the major operations of the Federal Reserve Bank of St. Louis, during May, 1941, is indicated below : (Incl. Louisville, Memphis, L ittle Rock branches) Pieces Amounts Checks (cash item s) handled................................ 6,143,608 $1,664,489,761 Collections (non-cash item s) han dled................ 112,059 33,801,731 Transfers of fu nds....................................................... 5,197 528,441,565 Currency received and counted.............................. 9,646,563 34,873,393 Coin received and counted....................................... 9,963,484 877,029 Rediscounts, advances and com m itm ents......... 30 6,352,715 New issues, redemptions, and exchanges of securities as fiscal agent of U . S. Govt., etc. 40,612 56,441,795 Bills and securities in custody— coupons clipped 9,080 ............................... Changes in the principal assets and liabilities of this bank appear in the following ta b le : June 18, 1941 Industrial advances under Sec. 13b............ $ ............ Other advances and rediscounts.................. 35 Bills bought (including participations) . . . U . S. securities................................................... , 101,346 Total earning a sse ts....................................... , 101,381 (In thousands of dollars) Change from May 14, June 19, 1941 1940 -0- — — 60 151 -0-0- — 11,953 — 12,164 Total reserves....................................................... 566,960 417,442 244,537 + 8 5 ,7 6 6 + 79,100 + 5,447 + 141,792 + 76,544 + 50,796 Industrial commitments under Sec. 1 3 b .. + + 363 41 193 Following are the rates of this bank for accom modations under the Federal Reserve A ct: Advances to banks, secured by direct obligations of the U nited States, under paragraph 13 of section 1 3 .. 1 % per annum Advances to member banks, secured by direct obliga tions of the U nited States or by such Government guaranteed -obligations as are eligible for collateral, under paragraph 8 of section 1 3 ..............................................1 % per annum Rediscounts and other advances to member banks un der sections 13 and 13a...................................................... . . . \ y 2 % per annum Advances to.m em ber banks under section 1 0 ( b ) ................ 2 % per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the U nited States, under paragraph 13 of section 13............4 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 13b : f \ y 2 % to (a) On portion for which such institution is obligated I 2 % per annum (b) On remaining p ortion — N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial [ 3 % to businesses under section 13b.................................. . i Sy 2 % per annum Commitments to member banks, nonmember banks, and other financing institutions, under section 1 3 b . . . . l % per annum Provided: that on commitments issued for periods of 90 days or less the minimum charge shall be 54 of 1% flat; and further provided, that on commitments for loans secured by assignm ent of “ Emergency Plant F acil ities Contract” with the U nited States Government, the rate may be as low as 54 of 1% per annum. y 2 Since the preceding issue of this report the Bank of Middletown, M iddletown, Ky., became a member of the Federal Reserve System. Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: (In thousands of dollars) May, 1941 Ark.$ 6,314 “ 12,923 “ 1,627 “ 47,011 Little Rock, . . . “ 7,858 Pine Bluff, 8,922 Texarkana, Ark. -Tex. E .S t.L .-N a t.S ,Y .,Ill. 52,566 “ 11,107 Q uincy,.............. 41,917 , , Ind. Louisville, . . . . ..K y . 244,0,98 6,465 Owensboro, . .. 5,743 M iss. .M o. 839,620 “ 2,568 “ 21,069 Springfield,----Tenn. 184,567 1,494,375 El Dorado, Fort Smith, (Completed June 24, 1941) April, 1941 $ 6,237 13,370 1,753 58,210 9,462 9,834 47,973 10,141 41,464 218,494 6,675 5,156 672,433 2,451 17,783 177,548 1,298,984 May, 1940 $ 5,575 11,50.6 1,412 41,083 6,547 7,164 39,569 9,353 34,622 163,959 5,874 4,829 722,603 2,249 17,338 128,509 1,202,192 M ay,’41 comp, with A pril,’41 M ay,’40 + h b + + b b 1% 3 7 19 17 9 10 io 1 12 3 11 25 5 18 4 15 b 13 % -12 -15 -14 -20 -25 -33 -19 -21 -49 -10 -1 9 b 16 -14 -22 -44 +24 Page 7 N A TIO N A L SUM M ARY O F CO N D ITIO N S INDUSTRIAL PRODUCTION B Y B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M After a slight decline in April industrial activity increased sharply in May and the first half of June. Wholesale commodity prices showed a fur ther considerable advance and retail prices also increased. Distribution of commodities to consumers was maintained in large volume. Federal Reserve index of physical volum e of production, adjusted for seasonal variation, 1935-39 average = 100. Subgroups shown are expressed in terms of points in the total index. B y months, January, 1935 to May, 1941. WHOLESALE Production — Volume of industrial output increased sharply in May, following a decline in April, and the Board’s seasonally adjusted index rose to 149 per cent of the 1935-1939 average, as compared with 140 in April and 143 in March. The decline in April had reflected mainly reduced output of bituminous coal and automobiles occasioned by shutdowns accompanying industrial disputes. These were settled during the month and in May and the first half of June output in these industries rose to the high levels prevailing earlier. In a number of other lines activity increased steadily throughout the spring months, particularly in the machinery, aircraft, and shipbuilding industries. Steel production was maintained at 99 per cent of capacity, except for a short period during late April and early May when output was reduced somewhat owing to a shortage of coal. Output of nonferrous metals also continued near capacity; deliveries of foreign copper in May increased to 49,000 tons, amounting to about one-third of total deliveries to domestic consumers. Toward the end of the month, as it became apparent that com bined military and civilian need for these metals would soon greatly exceed available supplies, a General Preference Order covering all iron and steel products was issued by the Priorities Division of the Office of Production Management and in June mandatory priority controls were established for copper and zinc. PRICES Bureau of Labor Statistics’ indexes, 1926 = 100. “ Others’* includes commodities other than farm products and foods. B y weeks, January 5, 1935 to week ending June 14, 1941. DEPARTMENT STORE SALES AND STOCKS Textile production rose further in May, reflecting increased activity at cotton, wool, and rayon mills. A continued rise in output of manufactured food products was likewise reported and activity in the chemical and shoe industries was maintained at earlier high levels, although usually there is a considerable decline at this season. Petroleum production increased, and out put of anthracite also advanced following some curtailment in April. Iron ore shipments amounted to 11,000,000 tons in May, a new record level and near the shipping capacity of the present Lake fleet. Value of construction contract awards rose sharply in May, reflecting increases in both public and private construction, according to F. W. Dodge reports. Awards for private residential and nonresidential building increased more than seasonally, and contracts for defense projects continued in large volume. Distribution — Distribution of commodities to consumers was sustained at a high level in May. Department store sales showed a further rise, while sales at variety stores declined by slightly more than the usual seasonal amount. Retail sales of new automobiles continued at the high April level and sales of used cars rose further. Federal Reserve indexes of value of sales and stocks, ad justed for seasonal variation, 1923-25 average = 100. B y months, January, 1935 to May, 1941. Commodity Prices — Wholesale prices of a number of agricultural and industrial commodities showed further increases from the middle of May to the middle of June and the general index of the Bureau of Labor Statistics advanced two points to 87 per cent of the 1926 average. Federal action to limit price increases was extended to some consumer goods, principally new automobiles, hides, and certain cotton yarns. In retail markets prices of most groups of commodities have advanced, reflecting in part increases in whole sale prices earlier this year. MONEY RATES IN NEW YORK CITY ..... TR:e a s u r y bo 'NDS 1 YASUOOI 2 ER N V TREASURY NOTES R> S | w u TREASlJRY BILLS L 1935 . r \ \A J \ _____ 1936 1937 1938, 1939 ■K Bank Credit — Commercial loans at reporting banks in 101 cities con tinued to rise during the four weeks ending June 11. Bank holdings of United States Government securities increased further, chiefly through the purchase of bills by New York City banks and of bonds by banks in other leading cities. As a result of the expansion in loans and investments bank deposits continued to increase. __ A------ JW ... J940 1941 W eekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds callable after 12 years, and average discount on new issues of Treasury bills offered within week. For weeks ending January 5, 1935 to June 14, 1941. Page 8 Freight-car loadings increased sharply in May, reflecting a marked rise in coal shipments and a further expansion in loadings of miscellaneous freight. In the first half of June total loadings were maintained at the advanced level of other recent weeks. United States Government Security Prices — Following a rise in the latter part of May Treasury bond prices declined slightly in the first half of June. On June 14 the 1960-65 bonds were % of a point below the all-time peak in prices of December 10. Yields on both taxable and tax-exempt 3- to 5-year notes declined slightly from the middle of May to the middle of June.
