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BUSINESS CONDITIONS Monthly Review of Agriculturef Industry, Trade and Finance Released for Publication in Morning Papers of March 3, 1943 FEDERAL RESERVE BANK OF ST. LOUIS T O W N 8B N O G O D S B Y PH O TO B a r n y a r d S cen e GENERAL SUMMARY I N T E N S IF IC A T IO N of industrial effort w ith ever-increasing emphasis on production for w ar continues to characterize the national and re gional economies. For the U nited States, industrial activity as m easured by the adjusted index of the Board of Governors rose 3 points in Jan u ary , a gain of 1 per cent and was 20 per cent above the level of November, 1941. Expansions of industrial output are now dependent largely on increased production of new and converted w ar plants not yet at peak capacities. A num ber of such plants exist, but lim iting factors of m aterial and labor shortages may operate to retard attainm ent of peak levels. Indicative of rising war output, the durable goods production index rose 5 points in January and was 81 points above November, 1941. V irtually all dur ables are now being produced directly for war. Non durable goods production was up 2 points in the m onth but was only 6 points above the pre-war level. T reasury expenditures for war purposes am ounted to $6.2 billion in January and were but slightly be low the record high of last November. For the first seven months of the current fiscal year war expen ditures totaled $39 billion. L atest figures indicate that war disbursem ents will continue at approx imately the same daily rate in February as in Ja n uary although the total outlay will be somewhat smaller because of a shorter month. In the Eighth D istrict m anufacturing activity continued at high levels during January. O utput of war goods in this area is gaining steadily. It is esti mated that about tw o-thirds of total m anufacturing employment in the m ajor cities of the district is now engaged in direct war work or in production of food stuffs for m ilitary or lend-lease. W hile the con struction program for war plants is virtually over, several of the smaller cities in this district have re cently been awarded new industrial facilities which, when completed, will produce war goods. Steel production was held at peak levels in the Eighth D istrict throughout January and the early part of February. Lum ber output at district mills continued at an extrem ely high rate in response to a heavy demand. Production of coal at E ighth Dis trict mines in January was 1 per cent greater than in December but 2 per cent below last January. Shoe m anufacture showed some gain over De cember but was slightly below a year earlier. Con sumption of industrial electricity was fractionally greater than in December and 57 per cent higher than in January, 1942. Prim ary distribution of goods in this district con tinued heavy in January and early February. Freight carloadings of railroads operating in the E ighth Dis trict in the four-week period ending January 30 were 8 per cent greater than in the previous fourweek period but were 6 per cent below the volume of the corresponding period last year. January load interchanges for 25 railroads operating in St. Louis were 8 per cent below the preceding m onth but 19 per cent above January, 1942. Prelim inary figures for February indicate a volume per working day considerably larger than that of January. D E T A IL E D SU R V E Y OF D IS T R IC T M A N U FA C T U R IN G Iron and Steel — Production of steel in the St. Louis district in January was somewhat above D e cember volume, and averaged about 101 per cent of rated capacity for the month. L atest reports indi cate that heavy output was m aintained during the first half of February. Demand for steel plate for shipbuilding was heavy throughout January and plate production in th at month established an all-time record for the U nited States at 1,135,413 net tons. Steel output and de mand achieved better balance in the latter part of January and early February as a receding demand for structural and reinforcing types made available greater tonnage of semi-finished steel for plate, sheet, and other forms more vital to the w ar effort. Page 2 The pig iron supply improved definitely in early February and is considered sufficient to meet essen tial current needs. The scrap situation in the St. Louis district was somewhat easier at m id-February with a thirty-day supply on the average on hand at most mills. Yard preparation of scrap has been hampered to some extent, however, by the continuing labor shortage and unfavorable weather. The demand for blast fur nace grades of scrap has increased in this district as a second rebuilt stack was blown in recently. An active demand for electric furnace scrap is being met satisfactorily at the present time. Shoes — Prelim inary reports of shoe production in the E ighth D istrict during January point to a 1 per cent increase over December but a drop of 10 per cent below January, 1942. December output of 6,658,350 pairs was up 22 per cent from the previous m onth but was 5 per cent smaller than in Decem ber, 1941. Total shoe production in this district in 1942 was 83,338,000 pairs, 2 per cent short of 1941 output. Nationwide production in December was only 8 per cent above November but was fraction ally above the corresponding m onth a year earlier. Production in the U nited States for 1942 registered the same percentage decline as did district output. The seasonally adjusted index for the Eighth Dis trict rose to 125.8 per cent of the 1924-26 average in December and stood at 131.7 for the year. W hiskey — In K entucky 55 distilleries were oper ating on January 31 as compared with 56 on Decem ber 31 and 53 on the corresponding date a year earlier. All are now engaged in the m anufacture of industrial alcohol for war purposes as no whiskey has been produced since October 7, 1942. W hile more distilleries were in operation during 1942 than in the preceding year, m onthly production averaged 4 per cent less than in 1941 due to the fact that some facilities had been converted to production of industrial alcohol or high wines early in the year. Production of whiskey in Kentucky for the year through October 7 at 48,133,770 gallons was 27 per cent below 1941 total production but exceeded 1940 output by 4 per cent. Total production for the U nited States in 1942 was 76,733,018 gallons, 43 per cent below the preceding year. R E T A IL A N D W H O L E SA L E T R A D E Dollar volume of sales at Eighth D istrict depart m ent stores in January declined seasonally to 49 per cent below December and was 1 per cent less than in January, 1942. Compared with the previous year, a 10 per cent decline in sales of St. Louis stores more than offset increases in other principal cities of the district which ranged as high as 32 per cent in Evansville and 26 per cent in Little Rock. The reduction in unit volume from a year ago was some w hat greater as prices were generally higher this January. Prelim inary figures for the first two weeks of February indicate dollar sales volume to be slightly above a year earlier. Value of sales in re porting retail furniture stores in January was 42 per cent below the " preceding m onth but 8 per cent greater than last January. R etailers’ inventories gained during January but were below peak levels of the early summer of last year. D epartm ent store stocks rose 2 per cent in the m onth and were 9 per cent larger than a year ago. The physical volume of inventories was smaller than in the corresponding period of 1942, however, because of the higher price level. Inventories at retail furniture stores were up 7 per cent in the m onth and were 2 per cent above January of last year. Dollar volume of wholesale trade in this district for January was 11 per cent above that of Decem ber and 1 per cent above January, 1942. Stocks of wholesalers rose 2 per cent in the month, interrupt ing the downward movement of recent months, but were 31 per cent below January of last year. A G R IC U L TU R E General Conditions— Adverse weather conditions during the greater part of January and early Feb ruary retarded the development of w inter crops in the Eighth D istrict and interfered with routine out door work to a considerable extent. Several factors, however, point tow ard a high level of agricultural production in 1943. M oisture conditions are gen erally favorable throughout the district and pros pects for heavy crop yields this year are good. Newly planted w inter grains entered the cold season in unusually good condition. Supplies of improved types of seed for spring planting are the largest on record and stocks of feed grains on farms are like wise at record levels. M ilitary deferments of agri cultural workers were recently liberalized by the W ar M anpower Commission to relieve the farm labor shortage. Assum ing th at weather conditions this year are reasonably favorable, the volume of agricultural production in the Eighth D istrict will be determ ined by developments in the labor and m achinery supply situation. Cash farm income in Eighth D istrict states estab lished an all-time record of $3.1 billion in 1942, an increase of $834 million over the preceding year. Farm income in December was $362 million, the same as in November and was $290 million in De cember, 1941. Income from farm m arketings in the U nited States reached a record total of $15.3 billion for the year as compared w ith $11.2 billion in 1941. Farm income this year is expected to exceed th at of 1942 due to increased goals for crop and livestock production and a generally higher price level. Growing requirem ents for m ilitary and lend-lease purposes coupled with a continued rise in domestic consumer demand should m aintain the demand for farm products at high levels in future months. In creases in farm product prices were registered in all E ighth D istrict states for the month ending January 15. Total agricultural employment in the United States on February 1, according to the D epartm ent of A griculture, was 8,369,000, including 6,638,000 family workers and 1,731,000 hired hands, as com Page 3 pared with 8,171,000 on January 1 and 8,540,000 on February 1 of last year. This is the lowest Feb ruary employment level in the 19 years th at m onthly records have been kept and represents a decrease of 8 per cent in the num ber of hired w orkers over the year, with virtually no change in num bers of fam ily workers. The farm labor supply rem ains uneven in this district w ith no appreciable changes in the situation reported during the past month. Growing conditions for w inter w heat were gen erally unfavorable in this district during January and early February. Lack of snow covering and unusually low tem peratures over the central and southern portions of the district in the latter part of January were detrim ental to development, with results yet to be determined. Some heaving as a result of alternate freezing and thaw ing has been reported, but thus far the injury is not regarded as serious. The acreage of w inter w heat planted in the fall of 1942 in E ighth D istrict states was 5 per cent greater than in the preceding year and latest reports indicate the crop will be 32 per cent above th at of 1942 but 43 per cent below the ten-year (1931-40) average. Cotton — T rading was more active on the Mem phis spot m arket in the latter half of January and early February, and sales during the four weeks ending February 13 totaled 250,300 bales as com pared with 186,500 bales in the preceding four-week period. Interest centered chiefly in the higher white grades throughout the period and while small lots of lower qualities were purchased against definite mill orders m ost offerings of low grade cotton were placed in the loan. Prices of 15/16 m iddling spot cotton at Memphis remained steady in the m onth ending February 15, fluctuating in a narrow range between 20.20c per pound and 20.55c per pound and closing at 20.45c per pound. Average prices for cottonseed in January were slightly below both a m onth and a year earlier. Domestic mill activity was m aintained at the high levels prevailing in recent m onths and for the entire country consumption in the six-m onth period, A u gust through January, was indicated to be 5,600,000 bales, or 4 per cent greater than in the correspond ing period of the previous season. If the current rate of mill activity is m aintained through July, 1943, total consumption of cotton for the 1942-43 season will approxim ate 11,300,000 bales, exceeding by 100,000 bales the record established in the pre ceding season. Average consumption for the tenyear period ending w ith the 1940-41 season was 6,650,000 bales. Despite high consum ption levels continuation of hand to rfiouth buying caused mill Page 4 inquiries to become less num erous in the past month with limited buying of a fill-in nature noted on a fairly wide range of grades and staples. Livestock — The num ber of cattle on feed in Corn Belt states in early January was 8 per cent above a year earlier, setting a new record for th at time of the season. The increase is attributed prim arily to the greater num ber of farms feeding cattle this sea son rather than to increased activity on the part of regular cattle feeders. The carry-over of long-fed cattle in early 1943 is indicated to be considerably smaller than last year. Sheep and lambs on feed in early January in Corn Belt states were nearly 9 per cent above the record established a year ago. Stocks of principal feed grains on farms in Eighth D istrict states on January 1 were 5 per cent greater than on January 1, 1942 and 38 per cent above the ten-year (1931-40) average. Stocks of corn for grain in Ja n uary as compared with a year earlier were suffi ciently larger to more than offset declines in w heat and oats feed stocks. Feed grain stocks on farms in the country as a whole on January 1 reached an all-time high, approxim ately 17 per cent above Ja n uary 1 of last year and 60 per cent above the tenyear average, despite the record feeding of live stock for m arket during 1942. Feed ratios for live stock, including poultry and dairy cows, remained favorable throughout January and early February. The W ar Production Board is com pleting arrange m ents for substantial imports of high protein animal concentrates and plans are under way to improve the distribution of oilseed cakes and meals among feeders of livestock. Milk productivity per cow as of February 1 in Eighth D istrict states was 4 per cent under a year earlier but 8 per cent greater than the ten-year (1932-41) average. Increases reported for the south ern portion of the district, favored by normal tem peratures, were not sufficient to offset losses in the rem aining states where snow and generally cold w eather kept dairy herds indoors m ost of the time. T he relative scarcity of high protein feeds was like wise a factor in reducing production of milk. In the U nited States, milk produced per cow on February 1 was 2 per cent less than a year ago but 8 per cent above the ten-year average. Tobacco — M ost burley m arkets were closed by the middle of February, with closing sales for the big Lexington m arket tentatively scheduled for Feb ruary 19. Q uality of offerings declined steadily dur ing late January and early February, as increased proportions of lower quality grades were offered for sale. W hile prices by grades rem ained at ceiling levels heavier m arketings of lower grades of burley tended to reduce the general average of prices and for the season through February 12 a total of 351,874,435 pounds was sold at an average price of $42.06 per cwt. This compares w ith 354,313,242 pounds sold at an average price of $29.35 per cwt. in the corresponding period last season. The volume of sales and general average price of Eastern D istrict fire-cured tobacco rose sharply in early February and sales of 19,005,417 pounds were made at an average of $17.52 per cwt. through Feb ruary 11. A general im provem ent in the quality of offerings accounted for the price increase. Through February 10 less than 13 per cent of total m arket ings had been pooled w ith the Tobacco Growers’ Association. W estern D istrict fire-cured tobacco brought higher prices in early February and gross sales through February 12 totaled 6,783,300 pounds at an average of $14.27 per cwt. Average prices were higher for nearly all grades with the quality of m arketings generally higher than in the early weeks of the m arketing season. As of February 10 about 17 per cent of this type of tobacco had been deliv ered to the Growers’ Association. Sales of dark-fired tobacco were tem porarily suspended on some floors in January because of severe cold weather, and on January 23 certain m arkets were closed under a war necessity ruling in order to divert nicotine to the m anufacture of insecticides and vitam in compounds. Follow ing declines during the last half of Jan uary, volume of sales on Green River tobacco m ar kets increased considerably in early February and for the season through February 8 a total of 14,147,288 pounds was sold at an average of $13.70 per cwt. A strong demand in early February for the better grades of this type of tobacco was met by a substantial increase in the offerings of heavy bodied leaf. Average prices of one-sucker tobacco declined during the second week of February. M ar ketings were slightly inferior to those of the preced ing week and nearly all grades sold at lower average prices. A total of 17,475,254 pounds of this tobacco was m arketed at an average of $15.70 per cwt. dur ing the season through February 16. COST O F L IV IN G A N D PR IC ES Continuing the upward movement which was re tarded som ew hat but not stopped by price regula tory measures, the cost of living in large cities of the U nited States rose 0.2 per cent between Decem ber 15 and January 15, and on the latter date was 20.0 per cent higher than at the outbreak of war in Europe. Since March, 1942 living costs have ad vanced 5.5 per cent, as contrasted with a rise of 11.1 per cent in the preceding ten months. Since the sta bilization of prices of m any goods at March, 1942 levels, the m ajor factor accounting for the rising cost of living has been grow ing food costs. H ow ever, the cost of food rose only 0.2 per cent betw een December 15 and January 12, to register the sm all est m onthly gain in the past year. The constant pressure upon price ceilings of ex panding consumer income has resulted in various amendments to the price control program which have tended to increase living costs. This rising cost of living is now being felt more strongly and is resulting in demands by labor for abandonm ent of the so-called “Little Steel form ula” for adjusting wages and by agriculture for inclusion of farm wage rates in the parity formula. These demands plus insistence on upw ard price revisions by various other groups, if granted, will undoubtedly cause the rising cost of living to gain momentum. In St. Louis, the only E ighth D istrict city covered by the Bureau of Labor Statistics m onthly index of living costs, the rise in cost of living from Septem ber, 1939 was 18.8 per cent, but living costs dropped 0.4 per cent between December 15 and January 15 due prim arily to a 1 per cent decline in cost of food. Little Rock registered a 0.4 per cent decrease in cost of food in the m onth, while Memphis food costs rose 0.1 per cent, and those of Louisville gained 0.7 per cent. As m easured against a year ago food costs in Memphis were up 19 per cent to lead all E ighth D istrict cities in percentage increase. EM PLOYM ENT Civil non-agricultural employment in the U nited States rose to a new record peak of 38,956,000 in December, an increase of 423,000 over November and 2,868,000 above the December, 1941 total, ac cording to the D epartm ent of Labor. M anufactur ing employment was up 235,000 in the m onth and was 2,103,000 greater than in December, 1941. Em ploym ent in civil non-agricultural lines in Eighth D istrict states rose to 6,397,000 on Decem ber 15, an increase of 43,000 in the m onth and 317,000 in the year. Gains over the preceding m onth were reported for all states except Arkansas. M an ufacturing employment in this area totaled 2,516,400 at mid-December, 34,500 more than a m onth earlier and 240,000 above the December, 1941 level. M an ufacturing accounted for approxim ately four-fifths of the net gain in total employment in the m onth and three-fourths of the increase during the year. Increases for the m onthly interval in m anufacturing lines were registered in all district states. The gain in m anufacturing em ployment in the E ighth Dis trict is prim arily attributed to the expanding opera tions of large war plants, m any of which represent new industrial facilities. According to the W ar ManPage 5 power Commission the num ber of employees at 33 m ajor war plants located in four industrial areas of this district rose from 171,900 in December to 177,100 in January, an increase of 5,200 in the month, and a further gain of 41,200 is forecast for these plants by the end of June. A recent release of the W ar Manpower Commis sion classified 237 cities on the basis of present or expected labor shortage. In this district Louisville, K entucky, Evansville, Indiana, and Pine BlufE, A r kansas are expected to develop over-all labor short ages within six months. St. Louis, Missouri, Mem phis, Tennessee, Paducah, Kentucky, Texarkana, A rkansas-Texas, and Aberdeen, Mississippi expect shortages to m aterialize after six months. Labor surplus areas in the district include Little Rock, Arkansas, Springfield and Cape Girardeau, Mis souri, F ort Smith, Arkansas, Owensboro, Kentucky, and Quincy, Illinois. B A N K IN G A N D F IN A N C E The decline in demand for bank credit in the Eighth D istrict continued during January and the early part of February as the volume of loans outstand ing fell below the levels of both a month and a year earlier. Reports from bankers throughout the dis trict attribute the decline chiefly to the strong cash position of farm ers and to the liquidation of loans carrying irreplaceable inventories now heavily de pleted or exhausted. Total loan volume of reporting member banks in this district decreased 3 per cent in the four-week period ending February 17 and was 18 per cent below th at of a year ago. Commercial, agricultural and industrial loans were down 3 per cent in the m onth and were 20 per cent below the volume of the corresponding period last year. Total invest ments of reporting member banks rose 2 per cent in the four-week period of January 20 to February 17 and were 101 per cent above the level of a year ago. The rise in investm ents will continue in future m onths as T reasury requirem ents for war financing remain heavy. Gross deposits of reporting mem ber banks increased by $1,222,000 in the four-week period ending February 17, and totaled $1,804,522,000 as compared with $1,442,818,000 on the cor responding date last year. Total reserves declined 1 per cent in the m onth but were 12 per cent above a year ago. Since the last issue of this review the Peoples State Bank of Gillespie, Illinois, and the Farmers N ational Bank of Griggsville, Illinois, have become members of the Federal Reserve System. Page 6 C A SH FA R M IN C O M E December Cumulative for 12 months 1942 1942 1941 1941 1940 $31,228 $27,516 $302,747 $223,047 $138,113 952,522 75,673 707,452 84,764 543,753 36,745 539,871 276,587 49,910 387,198 54,028 257,796 148,918 K entucky . . . 68,318 188,700 28,932 105,102 M ississippi . , . . , . 34,068 293,910 201,087 274,425 37,724 540,571 397,257 55,544 T e n n e ss e e .. . ___ 37,722 29,60.5 243,326 192,570 126,216 T otals, . 290,223 . . . 3 6 1,554 3,130,743 2,297,311 1,613,114 ( I n thousands of dollars) R E C E IP T S A N D S H IP M E N T S A T N A T IO N A L ST O C K Y A R D S R eceipts Shipm ents J an ., D ec., Jan ., Jan ., Jan., D ec., 1943 1942 1942 1942 1942 1943 46,145 49,711 32,732 C attle and C alves. . , . . 98,963 110,236 104,249 H o g s .............................., . .274,476 296,285 299,512 96,932 79,856 10.5,982 1,606 1,710, 3,457 H orses and M u le s. . , 3,478 1,680 1,708 . . . 51,990 63,392 39,220 4,351 6,615 1,657 . .428,907 471,519 444,691 150,885 137,890 142,051 W H O L E S A L E P R IC E S IN T H E U N IT E D ST A T E S B ureau of L a b o r S tatistics Feb. Feb. Jan . Feb. Feb. 13/43i comp, w ith (1 9 2 6 = 1 0 0 ) 13,’43 6,’43 16,’43 14.’42 J a n . 16/43 Feb. 14/42 A ll C om m odities. F arm P ro d u cts F o o d s................ 102.1 118.6 105.5 96.4 B ureau of L ab o r S tatistics (1935-39= 100) Jan . 15, 1943 U nited S tates . . . . St. L o u i s ......... . B ureau of L abor S tatistics (1 9 3 5 -3 9 = 100) 102.0 118.2 105.1 96.4 U . S. (51 cities) . . . St. L o u is ........... L ittle R ock. . . . L o u is v ille ......... M em phis............ 96.2 100,.7 94.0 94.9 COST O F L IV IN G Dec. 15, Sept. 15, 1942 1939 120,6 119.3 Jan . 12, 1943 101.6 116.6 104.8 96.3 120.4 119.8 100.6 100.4 C O ST O F F O O D Dec. 15, Jan . 13, 1942 1942 133.0 133.1 130.6 128.9 137.2 132.7 134.4 131.1 128.0 137.1 116.2 119.8 117.9 116.8 115.3 + + + + 0.5% 1.7 0.7 0.1 + 6.1% + 17.8 + 12.2 + 1.6 Jan . 15/43 < comp, w ith Dec. 15/42 Sept. 15/39 + 0.2% — 0.4 + + 20.0% 18.8 J a n . 12/43 comp, w ith Dec. 15/42 Jan . 13/42 + — — + + 0.2% 1.0 0.4 0.7 0.1 + + + + + 14.5% 11.1 10.8 10..4 19.0 I N D E X E S O F E M P L O Y M E N T I N M A N U F A C T U R IN G IN D U S T R I E S B Y M E T R O P O L IT A N A R E A S B u reau of L a b o r S tatistics N ov., O ct., N ov., N o v .,’42 comp, w ith (1937=10.0) 1942 1942 1941 O ct. ,’42 N o v .,’41 E v a n s v ille .................. 156.9 156.9 L o u isv ille .................. 115. 115.8 M e m p h is .................. ... 151.3 151.3 St. L o u i s .................. ...143.1 143.1 (C ost in tho u san d s) E v a n sv ille . . . . L ittle R o c k . . . L ouisville . . . . Jan . T o tals . .. D ec. “ ... 129.1 111.7 142.8 141.4 79.8 112.4 114.3 119.7 + 2 1 .5 % + 3.7 + 6.0 + 1.2 + 9 6 .6 % + 3.0 4-32.4 + 19.5 B U I L D I N G P E R M IT S N ew C onstruction R epairs, etc. N um ber C ost N u m b er Cost 1942 1943 1942 1943 1943 1942 1943 1942 5 3 112 44 32 196 15 21 26 313 117 492 137 $ 2 1 235 14 92 344 $ 43 40 23 444 353 903 449 162 54 29 170 70 "485 42 47 16 137 118 *360 317 $61 10 32 67 45 215 $ 16 21 10 309 157 513 178 V A L U E C O N S T R U C T IO N C O N T R A C T S L E T ( I n thousands J a n .,’43 comp, w ith D e c.,’42 J a n ./4 2 of dollars) J a n .,’43 D e c./4 2 J a n .,’42 T o tal 8th D is t.. $ 33,652 $ 84,967* $ 25,177 S o u rc e : F . W . D odge C orporation. ^Revised. (K .W .H . in th o u s.) - 60% + 34% C O N S U M P T IO N O F E L E C T R IC IT Y Jan ., Jan u a ry , 1943 N o. of Jan ., D ec., 1942 com pared w ith C ustom - 1943 1942 ers* K .W .H . K .W .H . K .W .H , D ec., 1942 Jan ., 1942 Evansville . . . . 40 9,065 L ittle R ock . . . 35 2,977 L o u isv ille ......... 82 15,377 M e m p h is ......... 31 5,847 P ine B l u f f ___ 20 4,247 St. L o u i s ............133 86,729 T o ta ls ..............341 124,242 *Selected ind u strial custom ers. 7,541 3,0,32 16,175 5,534 2,574 87,964 122,820 4,846 2,378 12,211 4,759 1,226 53,766 79,186 + 20% —2 + 6 +65 —1 + 1" — 5 + 87% + 25 + 26 4- 23 + 246 + 61 + 57 L O A D S IN T E R C H A N G E D F O R 25 R A IL R O A D S AT ST. L O U IS F irst nine days Ja n .,’43 D ec.,’42 J a n .,’42 F e b .,’43 F eb .,’42 139,357' 152,234 117,385 43,839 35,135 S o u rce: T erm inal R ailroad A ssociation of St. Louis. W H O L E S A L IN G N et Sales Lines of Com m odities D ata furnished by B u reau of Census, U . S. D ept, of Commerce. A utom otive S u p p lie s ............................ D ry G o o d s.................................................. E lectrical S u p p lies.................................. F u r n itu r e .................................................... Groceries .................................................... H a r d w a r e .................................................... P lum bing S u p p lies.................................. Tobacco and its P r o d u c ts .................. M iscellaneous............................................. . T o tal all lin es* ......................................... *Includes certain lines n o t listed above. S tocks J an u a ry , 1943 com pared w ith D ec.,’42 J a n .,’42 — 1% + 32' — 23 +307 — 5 — 11 — 19 — 24 + 2 + 11 + + — + + — — + + + J a n . 31, 1943 comp, w ith Jan . 31, 1942 10 % . . . . 22 44 42 3 41 15 8 18 1 % — 40 — 27 — 27 — 32 — 16 — 31 D EPA R T M E N T STO RES Stocks _____ N et Sales on H a n d Stock T u rnover Jan u a ry , 1943 Jan . 31/43 Jan . 1, to com pared w ith comp, w ith Jan . 31, D ec.,’42 J a n ./4 2 Jan . 31/42 1943 1942 F t. Sm ith, A rk ..................— 49% '+ 2 5 % ‘+ 2 7 % ' .32 .31 L ittle Rock, A rk ...............— 53 +26 +24 .32 .28 Q uincy, 111........................... — 51 — 1 — 4 .27 .28 Evansville, I n d .................. — 55 +32 .... ... ... + 8 + 2 .39 .35 Louisville, K y .................... — 47 St. L ouis, M o.................... — 46 — 9 +13 .30 .37 Springfield, M o.................— 51 + 7 — 6 .26 .20 M em phis, T e n n .................. — 52 + 8 — 3 .36 .32 *A11 o th er c itie s ................— 14 +13 -0 .45 .34 Sth F . R. D is tric t........... — 49 -0+ 9 .32 .35 *E1 D orado, Fayetteville, Pine Bluff, A rk ; A lton, E a st St. L ouis, H a rrisb u rg , M t. V ernon, 111.; V incennes, I n d .; D anville, H opkinsville, M ayfield, P ad u cah , K y .; Chillicothe, M o .; Jackson, Tenn. T rad in g d a y s: Ja n ., 1943— 2 5 ; D ec., 1942— 26; Jan ., 1942— 26. O u tstan d in g orders of rep o rtin g stores a t the end of J an u a ry , 1943, were 40 per cent g re a te r th a n on th e corresponding date a year ago. P e rc e n ta g e of accounts and notes receivable o u tsta n d in g J a n u a ry 1, 1943, collected d u rin g Ja n u a ry , by cities : In sta lm e n t Excl. In sta l. In sta lm e n t E xcl. In sta l. A ccounts A ccounts A ccounts A ccounts F o rt S m ith ........... % L ittle Rock . . 13 L o u i s v ille .... 30 M em phis . . . . 31 62% 58 62 61 Q u in c y ............. 19% St. L ouis . . . . 30 O th e r cities . . 2 4 8th F . R. D ist. 27 75% 72 54 66 IN D E X E S O F D E P A R T M E N T ST O R E SA L ES A N D ST O C K S 8th F ed eral Reserve D istric t (1923-1925 average — 100) Jan ., D ec., N ov., Jan ,. 1943 1942 1942 1942 Sales (daily av erag e), U n a d ju s te d .................... ...114 Sales (daily av erag e), Seasonally a d ju s t e d ... 142 Stocks, U n a d ju s te d .................................................... .. 95 Stocks, Seasonally a d ju s te d .................................... ..110, 212 129 94 10196 S P E C IA L T Y ST O R E S 110 138 87 Stock T u rn o v er Stocks on H a n d N e t Sales 158 135 108 100 Jan . 1, to Jan . 31/43 J an u a ry , 1943 Jan . 31, comp, w ith com pared w ith Jan . 31/42 1943 1942 D ec.,’42 J a n ./4 2 — 19% +18% .20 .27 M en’s F u rn ish in g s ........... — 55% + 31 — 22 .71 .52 B oots and S h o e s................ — 32 P e rc e n ta g e of acco un ts and notes receivable o u tsta n d in g J a n u a ry 1, 1943, collected d u rin g J a n u a ry : M en’s F u rn ish in g s .....................69% B oots an d S h o e s...............................54% T rad in g d a y s: J a n ., 1943— 25 ; D ec., 1942— 2 6 ; Jan ., 1942— 26. C H A N G E S IN P R I N C IP A L A S S E T S A N D L IA B I L I T I E S F E D E R A L R E S E R V E B A N K O F ST. L O U IS C hange from Feb. 17, J a n . 20, Feb. 18, 17. Ta] 1942 1943 1943 ( I n th o u san d s of dollars) In d u s tria l advances un der Sec. 1 O th e r advances and red isco u n ts. U . S. sec u rities .................................. T o tal earn in g a s s e ts .................. T o tal re s e rv e s ..................................... $ 7 120 252,957 -0+ 30 — 31,823 + 1 + 120 + 146,673 253,084 — 30,793 + 146,794 757,397 496,215 523,417 + 3 6 ,5 5 5 — 19,296 + 12,227 + 109,685 + 77,844 + 191,671 + + In d u s tria l com m itm ents u n d er Sec. 1 3 b .. 1,702 69 572 F E D E R A L R E S E R V E O P E R A T IO N S D U R IN G J A N U A R Y , 1943 (In cl. Louisville, M em phis, L ittle R ock b ran ch es) Pieces A m ounts Checks (cash item s) h a n d le d ................................ 5,867,209 $2,191,905,410 C ollections (non-cash item s) h a n d le d ................ 107,246 49,818,744 T ran sfers of fu n d s ....................................................... 4,533 504,230.,317 C urrency received an d c o u n te d .............................. 13,532,512 55,762,277 Coin received and c o u n te d ........... ........................... 16,411,344 1,450,322 R ediscounts, advances and c o m m itm e n ts ......... — — N ew issues, redem ptions, and exchanges of securities as fiscal ag en t of U . S. G ovt., etc. 676,750 259,891,258 Bills and securities in custo d y — coupons clipped 11,468 R A TE S O F T H IS B A N K F O R A C C O M M O D A T IO N S U N D E R T H E F E D E R A L R E S E R V E AC T A dvances to m em ber banks, secured by direct obliga tions of the U n ited S tates o r by such G overnm ent g uaranteed obligations as are eligible for collateral, which have one y ear o r less to ru n to call date or to m a tu rity if no call date, u n d e r p a ra g ra p h s 8 and 13 of section 13.............................................................................. ^2 % per annum A dvances to m em ber banks, secured by direct o bliga tions of the U nited S tates or by such G overnm ent guaranteed obligations as are eligible for collateral, w hich have m ore th a n one year to ru n to call da te or to m a turity if no call date, u nder p a ra g ra p h s 8 and 13 of section 13.................................................................... 1 % per annum A dvances to nonm em ber banks, secured by direct ob ligations of the U n ited S tates, under p arag rap h 13 of section 13.................................................................................... 1 % per annum Rediscounts and o th e r advances to m em ber banks u n der sections 13 and 13a............................................................. 1 % per annum Advances to m em ber banks u n d er section 1 0 ( b ) ................ 1*4% per annum A dvances to individuals, pa rtn e rsh ip s, an d corporations other th an banks, secured by direct obligations of the U nited S tates, u n d e r p a ra g ra p h 13 of section 1 3 . . . 2 % p er annum In d u stria l advances to m em ber banks, nonm em ber banks, and other financing in stitu tio n s un d er sec % to tion 13b: (a) O n portion for w hich such in stitu tio n is obligated a % per a nnum (b) O n rem aining portion — No charge to financ ing institu tio n . F ederal R eserve B ank w ill retain in te re st collected from borrow er. A dvances to established ind u strial or com m ercial ( 2 % to % per an n u m businesses under section 13b..................................................I 5 C om m itm ents to established in d u stria l or com m ercial businesses under section 13b.................................................... 10% to 25% of the loan rate charged borrow er w ith a m inim um ra te of ^ % per annum . C om m itm ents to m em ber banks, nonm em ber banks, and other financing institu tio n s, under section 13b ................ 10% to 25% of the loan rate charged borrow er w ith m inim um ra te of % per annum p ro v id e d : th a t no com m itm ent will be given on loan on w hich b o r row er is charged over 5% per annum . H P R IN C IP A L R E S O U R C E A N D L IA B IL I T Y IT E M S O F R E P O R T IN G M E M B E R B A N K S C hange from Jan . 20, F eb. 17, " “ ' Feb. 18, ( I n thousands of dollars) 1943 1943 1942 T o tal loans and in v e stm e n ts......................... $1,346,187 + 9,693 + 4 0 4,120 Commercial, in dustrial, a g ric u ltu ra l loans 230,110 — 8,166 — 57,510 9,120 — O pen m arket p a p e r........................................... 648 — 15,080 L oans to brokers and dealers in securities 3,168 — 135 — 1,111 O ther loans to purchase and carry securities 9,014 30.8 — 1,524 R eal estate lo a n s................................................ 65,082 + 760 + 6,397 L oans to b a n k s.................................................. 295 30 — 1,002 O ther lo a n s........................................................... 63,900 — 2,008 — 11,792 T o tal loans . . . ................................................ 380,689 — 10,535 — 81,622 T reasury b ills....................................................... 130,171 + 10,215 — 119,300 C ertificates of in d eb ted n ess........................... 176,224 — 10,741 176,224 T reasury notes. 112,119 + 4,946 70,088 U . S. b o n d s......................................................... 389,608 + 16,651 131,333 O bligations g u aran teed by U . S. G o v t.. . 36,332 + 1,118 — 20.472 O ther secu rities.................................................. 121,044 — 1,961 + 9,269 T o tal in v e s tm e n ts ......................................... 965,498 + 2 0 ,2 2 8 + 485,742 Balances w ith dom estic b a n k s ..................... 132,933 — 3,014 — 88,348 D em and deposits—'a d ju ste d * ....................... 880,307 + 32,491 + 237,809 Tim e d e p o sits....................................................... 195,190 + 1,787 + 11,319 U . S. G overnm ent d e p o sits ......................... 69,889 — 23,674 + 51,101 In te rb a n k d e p o sits.............................................. 562,467 — 7,726 + 47,475 *O ther th a n in te rb a n k and G overnm ent deposits, less cash item s on hand or in process of collection. Above figures are for 24 m em ber banks in St. Louis, L ouisville, M em phis, L ittle Rock and E vansville. T h e ir resources com prise approxim ately 75% of the resources of all m em ber banks in this d istric t. ( I n thousands of dollars) D E B I T S TO I N D I V I D U A L A C C O U N T S Jan ., D ec., Jan ., J a n .,’43 comp. w ith 1943 1942 1942 D e c./4 2 J a n ./4 2 E l D o ra d o ,......... A rk.$ 10,445 $ 12,936 F o rt S m ith ,......... “ 21,338 21,627 H e le n a ,................ “ 2,632 3,340 L ittle Rock, . . . . “ 66,072 80,565 P ine B lu f f ,......... “ 18,323 20,434 T exarkana,-A rk. -Tex. 15,070, 17,264 E .S t.L .-N a t.S .Y .,U l. 72,267 76,528 11,906 13,588 Q u in c y ,................ “ E v an sv ille,........... In d . 68,626 69,823 328,855 L o u is v ille ,........... K y. 306,664 O w e n s b o ro ,......... “ 12,509 12,470 G reenville,......... M iss. 8,186 12,414 St. L o u is,..............Mo. 817,503 1,026,146 S e d a lia ,................ “ 3,241 3,229 Springfield,......... “ 22,775 24,982 267,949 M em p h is,........... T enn. 252,667 T o ta ls .........................1,711,409 1,990,965 A lto n ,.......................111. 10,509 13,076 Paducah, ..............K y. 7,601 9,195 Cape G irardeau, .M o. 4,470 4,776 H a n n ib a l,. . . . . . . “ 3,961 4,277 Jefferson C ity ,. . . “ 12,054 26,445 J a c k s o n ,........... T enn. 7,650, 9,515 $ 8,101 20,636 3,062 62,236 13,423 22,304 64,215 11,813 45,445 277,907 11,295 10,427 801,420 2,870 20,502 274,01.9 1,649,675 — 19% — 1 — 21 — 18 — 10 — 13 — 6 — 12 + 2 — 7 -0— 34 — 20, -0— 9 — 6 — 14 — 20 — 17 — 6 29% 3 14 6 + + 37 32 + 13 1 + + 54 + 10 + 11 21 2 + + 13 + 11 8 4 + + + — 7 — 54 — 20 C O M M E R C IA L F A I L U R E S IN E IG H T H F . R. D IS T R IC T J a n ./4 3 comp, w ith J a n ./4 3 D e c./4 2 J a n ./4 2 D e c./4 2 J a n ./4 2 N u m b e r ................ 9 12 32 — 25 % — 72.% L iabilities.............. $51,000 $122,000 $375,000 — 58 — 86 Source: D u n and B rad street. (Completed February 26, 1943) Page 7 IN DUSTRIAL PRODUCTION N A TIO N A L SUM M ARY O F CO NDITIO NS B Y B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M Federal Reserve monthly index of physical volume of pro duction, adjusted for seasonal variation, 1935-39 average == 100. L atest figures shown are for January, 1943. DEPARTMENT STORE SALES AND STOCKS Federal Reserve m onthly indexes of value of sales and stocks, adjusted for seasonal variation, 1923-25 average s= 100. L atest figures shown are for January, 1943. MEMBER BANK RESERVES AND RELATED ITEMS O RS LLA B N O D LLA S ILLIO S F O R F C R U IN R A TO S S G ESER FU D VE N S W ednesday figures. Latest figures shown are for February 17, 1943. EXCESS RESERVES OF MEMBER BANKS Wednesday figures, partly estimated. Latest figures shown are for February 17, 1943. PageS Industrial activity rose further in January and the first half of February. Retail sales continued in large volume in January and were at an exception ally high level early in February. Production — Volume of industrial production showed another marked gain in January reaching a level of 200 per cent of the 1935-1939 average, according to the Board’s adjusted index, compared with 197 in December. The increase reflected largely a growth in activity in the munitions indus tries, including production of chemicals for war purposes. Activity at shipyards and in aircraft and machinery plants continued to expand sharply. Deliveries of completed merchant ships in January were somewhat less than in December but were still at the high level of over 1 million deadweight tons. Total iron and steel production rose to the level of last November, but was still slightly below the October peak, and electric steel output, important for munitions manufacturing, reached a record level Sy2 times as large as in the 1935-1939 period. Operations at steel mills were near capacity during the first three weeks of February. Nondurable manufactures, as a group, continued to show little change. Production of meats under Federal inspection, except beef, declined sharply from the high level in December. Output of most other foods was main tained ; production for military and lend-lease needs, particularly of highly processed foods, rose further and there was a corresponding decline in out put of these products for civilians. Newsprint consumption declined in Jan uary as a result partly of a Federal order restricting newsprint use. Mineral production declined slightly in January, reflecting a small reduc tion in output of crude petroleum. Output at coal and metal mines showed little change. Anthracite production in the first half of January was reduced by an industrial dispute, but for the month of January as a whole, output was only 3 per cent lower than in December. Value of construction contracts awarded, according to figures of the F. W. Dodge Corporation, was much smaller in January than in other recent months, but was still slightly higher than a year ago. Reductions occurred in all types of public awards, which now account for most of the total. A decline has been indicated for some time as a result of actions of the War Production Board designed to limit construction activity to projects that are essential. On October 23, 1942, it had established a committee to review pro posals for new construction; through February 12, work on projects esti mated to cost 1.3 billion dollars stopped either by the War Production Board or by the Government agencies initiating them. Distribution — Distribution of commodities to consumers was in large volume in January and the first half of February. Retail sales of merchan dise declined less than seasonally in January and rose sharply in the first half of February when a buying wave developed, particularly in clothing. At department stores, sales increased considerably in the first week of February and then reached an exceptionally high level during the second week, stim ulated partly by the announcement of shoe rationing. Freight carloadings declined somewhat less than seasonally in January and the adjusted index increased 1 per cent. Miscellaneous loadings ac counted for most of the rise. Substantial increases in loadings of most types of commodities occurred in the first two weeks of February. Commodity Prices — The average level of wholesale commodity prices continued to advance in January and the early part of February. Prices of most farm products showed further increases. Maximum wholesale and re tail prices were raised for a number of miscellaneous commodities including coal, while reductions were effected in maximum prices for some items like rayon tops and waste. Retail prices of foods continued to rise from mid-December to midJanuary with increases largely in meats, dairy products, and processed fruits and vegetables. Bank Credit — Excess reserves of member banks declined from an aver age level of about 2.2 billion dollars in the last half of January to 1.6 billion early in February, but increased somewhat around the middle of the month. Increases in currency in circulation continued to be the major factor respon sible for the decline, although substantial fluctuations occurred in Treasury balances and Reserve Bank credit. Most of the decline in excess funds was at banks in New York City and Chicago, where reserves have recently been close to legal minimum requirements. Over the five-week period ending Feb ruary 17, the currency drain amounted to 520 million dollars, bringing total currency in circulation to 15.8 billion on February 17. Holdings of Government obligations at reporting banks in leading cities outside New York and Chicago increased by 640 million dollars over the five-week period ending February 17. At banks in New York and Chicago, holdings of Government securities declined by 360 million, principally through sales to the Reserve Banks for the purpose of restoring reserves. Govern ment deposits at banks were reduced in the period, while other deposits increased.