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FEDERAL. R E SE R V E BANK OF ST. LOUIS M O N TH LY R EPO R T ON G E N E R A L B U S IN E S S A N D A G R IC U L T U R A L C O N D IT IO N S IN F E D E R A L R E S E R V E D IS T R IC T N o. g RELEASED FOR PUBLICATION ON AND AFTER THE MORNING OF MAY 26, 1020 WILLIAM MCC. MARTIN, CHAIRMAN OF T H E BOARD AND Transportation difficulties and an extremely tense credit situation figured conspicuously in general business results during the past month. To these factors may be added an unusually backward spring and unfavorable weather for agricultural development In face of these handicaps, however, the volume of business in this district has been enormous, totals in both manufacturing and distributing lines showing further broad gains over the corresponding period last year. To maintain this showing greater effort has been necessary, and there are numerous signs and evidences that the peak of the upward move ment has been reached or is close at hand. In many instances decreases in volume were recorded under the preceding month. The same is true in the matter of prices for commodities, some reduc tions being reported. However, prices on many articles, including necessities, have undergone further advances. In the food category there have been few declines, and such important staples as sugar, flour and cereals have advanced. On May / No. 2 red winter wheat in St. Louis touched $3.12, against $2.88 on April 17. The flour mar ket advanced to $15.60 for soft patents on May 11, a rise of more than $1 a barrel in less than a month’s time. May corn touched $2.03I on May 15, and May oats made a new high record of $1.15 /£ on May 12 . Sugar advanced to 20j4c for bulk granulated on May 17. Hardware and other goods manufactured from iron and steel are scarce and higher. Retail selling prices of shoes, clothing and cer tain dry goods and miscellaneous articles have been reduced in some cases. Retailers are advertising more ‘‘sales’* and otherwise seeking to speed up a lagging business. Slowing down in purchasing by the public is attributed to reaction against high prices, a dawning dis position to economize after months.of unrestrained spending, and to the first signs of unemployment in the big industrial centers. Hiis unemployment is due directly to the switchmen's strike, which has necessitated curtailed or suspended operations at manufacturing plants because of inability to secure raw materials and fuel. Manufacturers’ books are crowdcd with orders, and the demand for goods continues on a large scale. Resumption by the railroads of adequate transportation service should quickly restore manufac turing and building to the point of activity attained before the con gestion set in. Collections are in the main good, the backward spots being con fined to sections where adverse weather or delay in marketing cotton and tobacco has caused delayed settlements. Observers of economic and business developments discern in present symptoms the first real steps toward readjustment and deflation. Measures taken by the Federal Reserve Banks and other financial institutions are expected to bring about a readjustment with out serious disturbance to business. Automobile registration in states of the Eighth Federal Reserve District up to May 1 this year indicates heavy gains over the three preceding years. M AN U FACTU RIN G Effects of the switchmen’s strike have fallen heavily upon manu facturers. In numerous instances supplies of raw materials have been cut off or greatly curtailed, and quite as serious as this phase has been the inability to ship out finished products. Lessened or sus pended operations have released operatives, and by certain author ities it is estimated about 5 to 10 per cent fewer persons are employed in strictly manufacturing industries than when the strike began, April 8, and the normal output of the plants has diminished in approximately the same proportion. As contrasted with a year ago the month's totals in many lines develop big gains. Compared with the preceding month this year the showing is not so favorable. Boots and Shoes— Business continues active, with orders on hand about on a parity with the preceding month. Heavy gains over total sales for the corresponding period last year are shown by most of the important companies. There has been a slight shading in prices on some goods, but, as a rule, a steady average is maintained. Con sensus of opinion is that no further advances will be made. Makers of raw* materials going into footwear have caught up to a large extent, so that the industry is on a more stable basis. W oodenw —The demand for all glasses of goods is strong, and are in excess of supplies. Labor troubles have had a tendency to cut down outputs, as has scarcity of raw materials. Recent impressive gains over a year ago were maintained during the past month. Prices show little variation, and, barring influences of a detrimental char acter working in general business, the outlook for the balance of this year is excellent. FEDERAL RESERVE AGENT Candy— Prices hold about steady at the recent advances, but there is an easier tendency noted. Business has been restricted to some extent by the condition of the sugar market and the railroad strike. Manufactured goods are accumulating at points of production, but most of this accumulation will be taken care of by shipments on booked orders when transportation reopens. A canvass of leading manufacturers indicates that business during the past month fell about 10% under last year, and* held about steady with the preceding month this year. Drugs and Chemicals— Due to continued urgent demand and light supplies, the tendency of prices is still upward, there being several specific increases and no decreases during the past month. The volume of business done ranged from steady to 3% under a year ago, and, as contrasted with the preceding month this year, losses were from 5% to 20%, but March was an unusually heavy month in this line. Clothing— Many manufacturers of clothing report a decided slump from the recent activity. While sales during the past month show increases of 40 to 70 per cent over a year ago, there were many decreases both in volume and value under the preceding month this year. The outlook is described as unsettled, with buying much more cautiously conducted. The demand is somewhat under normal for this season. Electrical Supplies— Figures of reporting companies indicate gains in sales as high as 100% over the same period a year ago, but decreases of 10% under the preceding month this year. The declining business is ascribed chiefly to freight embargoes and shortage of material. Goods on hand are smaller than last month, but well over last year. There were a few complaints of collections. Iron and Steel Products— Manufacturers in this category have suffered probably more than any others from the railroad strike. The shortage of raw materials, chiefly coke, has completely disarranged programs, and necessitated sharp curtailment of activities. There is an overwhelming demand for all kinds of goods, which will take months of capacity production to supply. Prices are very strong, with no indications of declines. The leading pig iron manufacturer in the district has had his furnaces ready to blow in for some time, after an idleness of several months for repairs and enlargements, hut has been obliged to postpone lighting fires because of uncertainty relative to raw materials. Flour—The volume of sales during the past month is reported unchanged to 75% less than the corresponding time last year, and steady to 50% lower as compared with the preceding month this year. The selling price of flour has advanced further, due to the rise in wheat quotations. The tendency is toward higher prices and4 unsettled conditions, with the main influences being dubious crop prospects and relinquishment of control of the wheat market by the Government. Lumber—'There has been a decline in Southern pine prices, with yards well stocked, and a slowing down in buying caused by inter ruption of building operations by the railroad strike and its ramifi cations. For the first time in many months some of the mills are seeking business. There are some good inquiries out, however, and an improvement is looked for in June. Hardwoods are quiet, with little new buying, but prices are strong and tending upward, due to rains having interfered with cutting. Embargoes have caused short stocks at great concentrating centers. Fur Auction— Pelts aggregating in value approximately $25,000,000 were disposed of in brisk bidding at the spring auction of the Inter national Fur Exchange in St. Lottis. Buying was by manufacturers, and indicated an expected business for next fall and winter of large proportions. Prices averaged 20 to 25 per cent under those realized at the February sale, the decline being ascribed almost wholly to the tight money market. Attendance at the auction was large, and probably the most representative thus far assembled at these safest Miscellaneous— In other miscellaneous lines, such as farm imple ments, paper bags, rope, furniture, and cooperage, production ha* been hampered by the strike, and distribution is backward. There atr wide variations in prices, but purchasing is being done with coasiferable more circumspection, and the peak in most cases seems lo have been reached. W H O LE SA LE A N D JOBBING v u. 11 , , , l. t • j . ... . r t• Pretty generally through the wholesale and jobbing strata of distnbution a note of conservatism is being sounded. In certain lines purchasing hasslowed down, or is being pursued on a more discrmunating basis. The unusually late season hai give* rise to apprehension among country merchants relative to the outcome of crops. Readyto-wear clothing, hats, and some specialties handled by wholesole dry goods houses, dsiplay recessionary tendencies. As a general proposition, the wholesale dry goods trade is described as steady, but with a tendency to slow down, due to the credit situation and uncertainty of the agricultural outlook. Pretty much the same status obtains in boots and shoes with many houses stating that retailers are not so disposed to stock heavily. Among wholesale grocers and hardware people there are no indications of letting down in the demand. These lines are lively as ever, with goods scarce, prices strong to higher, and the demand unabated. Drugs and chemicals, also, continue in urgent demand, with no downward scaling in the recent extravagant prices. Collections up to now have been in the main fair to good. There are some backward spots and less general alacrity to settle than heretofore, but specific complaints are not numerous RE TA IL . , . ,. * ,, . r t. • While there has been no great decline in the volume of business, greater effort and some concessions in the matter of prices have bi*en. re?K,redK the Pau°r *° ma,n‘ am th.e pace\ 9 U t ’te clearly the public is curbing its bidding for goods, and reports from many quarters indicate that there is less disposition to pay any price aske.d- . T 5 e late, sp.rlng and unseasonably cold and wet weather have worked adversely m many hnes, notably wearing apparel. In the rural communities uncertainty as to the crop outlook has inspired conservatism, and everywhere effects of antagonism against high prices are felt more or less. A canvass of retailers in various lines elicits the information that conditions are less uniformly optimistic than earlier in the year. It is believed that in a majority of cases the zenith of the upward movement in prices has been reached. How- ever, this statement mus* bear qualification. 'Certain articles continue very scarce and in grRat demand, and on these, prices ho y l K ' wjth further advances recorded and in prospect _ The larger depar^ ent stores in the district report continued activity, and a f f bu8inesg weH is excess of a year ago, and steady to about 15% t than the preceding mo„th this year, 4 5 F AGRICULTURE . . . .. f m0st unusual Tlie season to date in this dis rict a ooerations has on record. ^The progress of crops and been delayed in an abnormal d g > . c sunshjne have J r/ v/ n/ ed e k atesoiP ° repa""t ^ fading and development of that which prevented son preparation, s" “ ms * “ w -nt frnm «ratl-w has been planted Of the specific reports ^ tered sections of the district ,56 5% are fair 43 5'% poor and none good. Nearly all accounts re at g crenerallv in fair cotton is backward and not flour s 'pnharro ^enerallv in shape, and hay and pastures are doi % w' t tin S.: oroduct *air condition, but last season s experience lI* ^ ^g P some was discouraging to planters, and t^e ac g y_ , / , i « reduction. Late advices indicate that the frost in early April aid less damage to apples and other fruits than at first believed. Total destruction was confined to a relatively small area, and from a half to two-thirds of a crop is indicated elsewhere. Vegetables and small f ; h suffered from deluges of rain, and marketing of Southern duce is hampered by shortage of cars and the switchmen’s strike. In all sections tabor is scarce, costly and inefficient, which fact will | 1;lve serjous bearing on acreages. Farmers are turning to crops wj,ich can be handled with a minimum of laborers, and labor-saving machinery ;s being employed wherever possible to offset the shortage f h d y Frcm f omePsections of the district, especially those most affected by the switchmen’s strike, there are complaints of scarcity ♦, ■h * f f . & The U. S. Department of Agriculture, in its report as of May 1, gives the condition of winter wheat in the seven states of this district as follows: W IN T E R Acreage Condition Acres May 1 Per cent remaining 1920 1919 10 yr! abanto be av. doned harvested % % % Arkansas ................................................................................................................. 6.0 147,000 83 98 9l Illinois......................................................................................................................... 18.0 1,971,000 69 100 82 Indiana ....................................................................................................................... 13.0 1,705,000 65 100 84 Kentucky ...................................................................... ............................................ 14.0 618,000 71 102 88 Mississippi................................................... ..............................................................10.0 13,000 80 90 87 Missouri ..................................................................................................................... 9,0 2,348,000 75 101 85 Tennessee ..................................................................................................................14.0 424,000 73 97 88 Cotton— Wet weather has caused backwardness in the crop, but the plant has made fair progress in some localities. Reports relative to acreages in this district are slow coming in. The movement continues slow, and the demand for all grades less active than heretofore. There has been some inquiry from Liverpool, and cotton merchants feel that as soon as a few leading spinners begin to consume lowgrade cotton, they will be followed by others who have until now confined their requirements to the longer staples. LABOR Some symptoms of unemployment are manifest in the chief centers of population in the district. These are traceable directly to the March, 1920 Flour, barrels .................................................................................. ^410,970 Wheat, bushels ...............................................................................1,394,748 Corn, bushels .................................................................................. 3,414,050 Oats, bushels ........ .......................................................................... 3,180,000 Lead, pigs ........................................................................................ 248,190 Zinc and spelter, slabs................................................................... 510,920 Lumber, cars ........................... ...................................................... 13,096 Meats, pounds .................................................................................6,225,900 Fresh beef, pounds....... ................................................................ 1,443,800 Lard, pounds .................................................................................. 3,749,100 Hides, pounds .................................................................................1,096,800 W HEAT Forecast 1920, from Final May 1 Estimate condition 1919 Bu. Bu. 1,586,000 3,230,000 27,880,000 57,800,000 21,611,000 45,792,000 6,143,000 12,029,000 185,000 504,000 29,937,000 57,699,000 3,900,000 7,290,000 Price May 1 1920— 1919 Cents 228 212 250 233 254 230 260 220 271 ... 255 233 270 235 switchmen's strike, which has caused curtailment and suspension of work in factories because of inability to secure raw materials. State commissioners and labor agencies report a continued shortage in all lines, which, in some skilled trades and on the farm, is acute. Outside of the railroads, actual strikes have been few during the past month, but unrest is noted in many quarters. The trend of wages is upward, farmers reporting the increases about in proportion to those in industrial labor. COMMODITY MOVEMENT Receipts and Shipments of Important Commodities at St. Louis during April, 1920 and 1919, and March, 1920, as reported by the Merchants' Exchange, were as follows Receipts Aprill920 149,640 774,994 1,837,550 1,804,000 120,660 255,420 6,803 7,449,200 674,000 3,098,000 739,200 April, 1919 325,700 1,336,883 2,214,855 3,324,000 92,550 326,800 10,444 4,701,400 1,477,200 748,400 1,800,700 March. 1920 505,340 1,085,740 2,304,510 2,759,180 167,480 1,073,730 10,524 26,072,300 24,753,500 8,623,000 7,199,200 Shipments April. 1920 148,100 458,450 713,070 1,095,630 67,320 370,210 4,875 17,690,600 16,962,900 5,991,900 1,729,000 ApnM919 385,585 565,490 1,473,505 2,602,290 127,025 721,560 8,034 29,640,700 20,213,300 4,424,600 4,461,000 BUILDING Permits for building issued during April in the four principal cities of this district show a large gain numerically and in dollars as compared with the same month last year, but quite a sharp decrease as contrasted with the preceding month this year. A severe setback in this department of activity has been occasioned by the switchmen’s strike. Certain building materials are almost impossible to obtain, especially in the country and small towns. Housing needs are more urgent than ever, and numerous building projects are awaiting more auspicious material and labor markets to get under way. Comparative figures for April are as follows: _______________ 1920__________________________ April _ New Construction Repairs, Ktc. New Construction _ Permits Cost Permits Cost Permits Cost St. L o u is.................................................................................. 503 $1,469,525 520 $421,425 323 $749,900 LouisviHe ................................................................................. 93 925,550 201 84,550 59 108,425 Memphis .................................................................................. 199 923,590 50 129,770 107 465,000 Little Rock ............................................................................. 61 260,250 118 50,759 21 139,925 1919 Repairs, Permits 421 201 55 85 Etc. Cost $269,570 93,735 260,000 35067 AU TO M O B ILE LICENSES to 1919, Automobile registration in reporting states included in the EighthFederal Reserve District for the years from 1917 and for 1920, up to May 1, is as follows; 1917 Arkansas....................................................................................................................................................... 2 9 $ 2 Illinois .......................................................................................................................................................... 340,292 Indiana ..........................................................................................................................................................192,192 Missouri ...................................................................................................................................................... 151,027 1918 __________1919 41,453 4^,456 389,761 478,438 277,160 277,255 188,040 244,636 inclusive, Jan. 1 to May 1,1920 -------- 357TS 448,526 277,180 238,132 LIV E STOCK credits and the high cost of feeds, coupled with dubious transpor tation service, are having a detrimental effect on stock fattening at the moment. As reported by the St. Louis National Stock Yards, receipts and shipment of live stock at St. Louis in April with com parison of the April, 1919, movement, were as follows: The movement of live stock showed an astounding shrinkage in April as compared with the same month in 1919 and last March. The decrease was caused by the switchmen’s strike and car shortage. Raisers and feeders have sustained material losses through inability to ship their stock to market. Farmers are not buying stocker and feeder cattle as heavily as usual at this season. Scarce and expensive Hogs Cattle and Calves 1525----- m----- 155 340,322----- m 2----- m .............................................................................. 54.919 90.168 228,721 20,388 Receipts Shipments .......................................................................... 26,381 26,754 142,642 128,487 Horses and Mules Sheep m-----isar 27,290 8,524 6,155 1,598 im 11,066 10,493 10,719 FINANCIAL business as high as 60% under^ the peak period this year. Country banks are purchasing more sparingly than heretofore, and the big city institutions are not in a position to take on much paper. Rates have advanced to 7*4 and 7J4 per cent, with some very choice names being offered at the latter figure. The demand for money continues strong in this district. However, financial institutions are endeavoring to discourage all but absolutely essential borrowing, and are casting about for the best means of effecting curtailment of loans and credit deflation. The situation has been considerably aggravated by the partial paralysis in transpor tation, which has tied up enormous credits that might be doing service in the regular conduct of business. Between April 15 and May 15 the high, low and customary interest rates prevailing in St. Louis, Louisville, Memphis and Little Rock, as reported by banks in those cities, were as follows: A further slowing down in the market for commercial paper was noted during the past month. Brokers report decreases in volume of St. Louis H L C Customer’s prime commercial paper: 30 to 90 days........................................................................................ 4 to 6 months.................................................................................... Prime commercial paper purchased in open market: 30 to 90 days........................................................................................ 4 to 6 months....................... -........................r . ; ............... Loans to other banks.............................................................................. Bankers’ acceptances of 60 to 90 days: Endorsed .............. .............................................................................. Unendorsed ........................................................................................ Loans secured by prime stock exchange collateral or other collateral: Demand .............................................................................................. 3 months ............................................................................................ Louisville_______ Memphis_______ Little Rock C C H L H H C L L oy2 6 K > 6y, 6 y2 ;.7 ..7 The condition of banks in this district at the present time, and changes during the past month, are reflected in the following com parative statement, showing the principal resources and liabilities of 6 6 6 6 6 6 6 6 6 6 'A 6 6 6 6X 6 6 6 6 6 6 6 6 6 6 6 'A 6 6'4 6J4 6V2 6V* 634 7 6 y2 m 6 6/2 6 6 0 6 6 6 6 6 6 6 6 7 7 8 8 6 54 6J4 7 7 7 7 7 7 6 6 ’ 7 7 6J4 6 6 ... ... ... ... 8 8 8 6 6 6 7 7 7 8 6 6 ' 6 6 8 8 8 8 8 8 7 7 7 7 7 7 8 8 6 6 6 it ..7 .7 ,.7 6 6 6 6 . 6# ,.6 6 6 7 7 .7 .7 . .. 7" » 7 member banks of St. Louis, Louisville, Memphis, Little Rock and Evansville: May 7th, 1920 Number of banks reporting................................................................................. 35 United States Bonds to secure circulation....................................................................................................................................$ 16,925,000 Other United States Bonds, including Liberty Bonds.............................................................................................................. 12,949,000 United States Victory Notes........................................................................................................................................................... 3,034,000 United States Certificates of Indebtedness.................................................................................................................................. 13,579,000 Total United States Securities owned.................................................................................................................... 46,487,000 Loans and investments including bills rediscounted with F. R. Bank: Loans secured by United States War Obligations.............................................................................................................. 39,030,000 Loans secured by stocks and bonds other than U. S. Securities..................................................................................... 156,433,000 All other loans and investments............................................................................................................................................. .. 393,780,000 Total loans and investments, including rediscounts with F. R. Bank............................................................................. 635,730,000 Reserve with the Federal Reserve Bank........................................................................................................................................ 43,945,000 Cash in vault................................................................... ........................................................................................................................ 10,433,000 Net demand depoats on which reserve is computed.................................................................................................................. 333,930,000 Time d ep o sits....................................................................................................................................................................................... 123,748,000 ...................................................................................................................................................................... 3,214,000 7 7 7 7 7 / April 9th 1920 5T $ 17,176,000 14.242.000 3,641,000. 13.253.000 48.312.000 40.434.000 155.844.000 402,656^)00 - m & sm 44,534,52 352,144*0 The votamc of individual chcck transactions in this district H i p u t month it indicated (or the following comparative tabk com- piled frominformation received from tWfr'*ff£aring houses in the cities shown: i M t o to individual accounts: Week ended—April 14 Louis .................................................................................................................. $155350,000 U « ............ . .................................................................................................. 37,596,000 .................................................................................................................. 37,263,000 tie R o c k ................................................................................... ......................... 10,611,000 rille ............................................................................................................... 6,023,000 In April the Federal Rerserve Bank of St. Louis discounted a total of $262,604,976 of paper for 271 different member banks, which is an :rease of $3,208,667 over the amount of paper discounted in March, d an increase of 32 in the number of banks accommodated. C RESOURCES: April 21 $166,406,000 38,792,000 38,771,000 9,247,000 5,536,000 April 28 $137,877,000 31.756.000 31.988.000 8.614.000 5.712.000 May 5 $153,615,000 36.560.000 30.983.000 10.902.000 5,568,000 The resources and liabilities of the Federal Reserve Bank of St. Louis on May 14, 1920, as compared to a month ago and a year ago, are shown in the following statements: April 16, 1920 _________ May 14, 1920_________ May 16, 1919 Bald coin «nd certificates......................................................................................................$ 5 ^ ,0 0 0 £ o U Settlement Fund— Federal Reserve Board................................................................ 10,187,000 Cold with Foreign Agencics........................................................................................................ Total gold held by bank........................................................................................................ Gold with Federal Reserve Agent............................................................................................... Gold Redemption Fund.................................................................................................................. Total Gold Reserve................................... .............................................................................. tender notes, silver, etc................................................... .................................................. Total reserves ....................................................................................... ............................... .. $ 3,692,000 13,209,000 $ 3,973,00a 34.97S.000 5,301,000 5,301,000 20,846,000 46,089,000 7,638,000 74,573^)00 4,973,000 79,546,000 45,789,000 6,262,000 74,253,000 7,164,000 81,417,000 ................ .. 38,94*000 58,270,000 4,465,000 101,683,000 2,264,000 103,947,000 Bills discounted— secured by Government War Obligations............................................. 50,319,000 Bills discounted— all other........................................................................................................... 58,357,000 Bills bought in open market............................................................. ............................................. 1,919,000 Total bills on hand..........................................................................................., . ..................... 110,595,000 U. S. Government Bonds............................................................................................................... 1,153,000 & Certificates of Indetrtedness................................................................................................ 17,242,000 Total earning assets............................................................................................................... 128,990,000 56,816,000 55,519,000 2,296,000 114,631,000 1,153,000 17,205,000 132,989,000 54,640,000 9,984,000 3,66&000 68,292,000 1,153,000 14,682,000 84,127,000 tank Premises ............................................................................................................................. 866,000 Uncollected items and other deductions from gross deposits........ . ................................... 60,758,000 5% Redemption Fund against F. R. Bank Notes................................................................... 623,000 M l other resources........................................................................................................................... 430,000 TO T A L RESOURCES ....................................................................................................... 271,213,000 866,000 51.103,000 523,000 428,000 267,326,000 54M)00 48,066*000 571,000 463,000 237,715,000 LIA B IL IT IE S' Capital paid i n ....’.......................................................................................................................... 4,164,000 3,724,000 Surplus ............................................................................................................................................ ... Government deposits....................................................................................................................... 2,531,000 Doe to Members— Reserve Account........................................................................................... 69,499,000 Inferred availability items............................................................................................................. 40,421,000 Other deposits, including foreign Government credits................ ........................................ 3,834,000 Total gross deposits................................................................................................................ 116,285,000 F. R. Notes in actual circulation................................................................................................... 134,211,000 F. R. Bank Notes in actual circulation— net liability............................................................. 10,686,000 AH other liabilities......................................................................................................................... 2,143,000 T O T A L LIA BILITIE S ............................................................................. ..................... .. 271,213,000 4,170,000 3,724,000 3,099,000 67,172,000 43,447,000 3,830,000 117,548,000 129,996,000 9,204,000 2,684,000 267,326,000 3,838,000 1,603,000 12,184,000 63,460,000 36,791,000 .................. 1 12,435,000 105,491,000 13,093,000 1,255,000 237,715^00 Contingent liability as endorser on paper rediscounted with or sold to other Federal Reserve Banks................................................................................................................................. 46,858,000 (Compiled May 18, 1920.) 32,139,000 22 ,202,000 ........................
