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F E D E R A L R E S E R V E BANK O F ST- L O U I S MONTHLY REPORT ON GENERAL BUSINESS AND AGRICULTURAL CONDITIONS IN FEDERAL RESERVE DISTRICT No. 8 RELEASED FOR P U B L IC A T IO N ON AN D AFTER T H E M O R N IN G OF MAY 2 9 , 1919 W IL L IA M MCC. M A R T IN C H A IR M A N OF T H E B O A R D A N D F E D E R A L R E S E R V E A G E N T The prevailing business sentiment in this district is one of increasing optimism. The exceptionally good outlook for winter wheat, the greatly improved cotton situation in the South, coupled with the pros pect of a growing foreign and domestic trade for the Mississippi Valley through waterways development, have tended to make business men more hopeful for the future. Reports received from the various industries of the district indicate that business generally is improv ing. The spirit of hesitation has to a great extent disappeared, and merchants are now buying for the future, as well as for their immediate needs. While a few lines report decreases in business during April, the majority report substantial increases over April of last year and also over March of this year. Practically all are expecting a large amount of business during the coming months. Collections, as a rule, are reported to be good. Prices, in some lines, show a gradual downward trend, but in other lines the increasing vol ume of business has tended to stabilize them at higher levels. MANUFACTURING— Manufacturers of boots and shoes report increases in their sales during April of from 20% to 67% over April of last year and from 10% to 35% over March of this year. Domestic business is said to be nearly on a normal basis. Manufacturers say they have a large volume of orders on hand for future delivery. Clothing manufacturers report an active business, but state that they are being affected by the scarcity of woolens. Reports from manufacturers of primary metal products show that their business is still below normal. Manufacturers of miners’ tools report a dull business on account of the inactivity of coal mines. A manufacturer of threshing machinery, however, reports that he has all the orders he can fill up to July 1st. A stove manufacturer reports a gain in his April business over the same month last year, and states that he has a good volume of orders for future delivery. A large wire rope manufacturer states that he has sufficient orders on hand to keep him busy for 90 days and that the demand for his product is 75% of normal. The demand for hardware has nearly resumed i1s normal basis. Lumber is feeling the effect of the increased building activity. A large firm reports that during April its business increased 20% over March. In the South stocks of lumber are low and the woods are said to be so wet that sawing has been impossible. Cement, brick and clay pipe manufacturers, as a rule, report that business is improving, though the de mand for their products is still below normal. Increased road building, the demand for apartment and office buildings and the prospect of public improvements lend encouragement for this line. In the electrical line, business is improving. Increases in the volume of business are reported over both April of last year and March of this year. Heavier orders are being placed for future delivery. A large chemical company reports an increase of oyer 50% in its April business as compared with the same month last year. Owing to the fact that there was practically no natural ice harvested in the coun try this year, firms anticipate a large demand for chemicals from ice manufacturers. A large candy manufacturer says so many firms and individuals are going into the candy business, in anticipation of a growing demand for sweets, that there is overproduction. Considerable improvement is noted in the cotton situation in this district. Cotton mills are now spin ning freely, and the demand for cotton is fast approaching normal. It is reported that the stock of cot ton in Memphis is less than it was at this time last year or thr year before. Some advance in price has recently occurred. W H O L E SA L E AND JOBBING—Wholesale dealers report a good demand for all lines. Dry goods houses report substantial increases in business over last year and state that the demand is practically nor mal. Silks and woolens are particularly active. A large millinery house reports that its spring business is 20% beyond the pre-war basis. Wholesale grocery houses report gains during April of from 20% to 36% over April last year and from 8% to 11% over March of this year. Some firms report a strong demand for fancy groceries. During the past month the price of coffee has reached higher levels than ever before, with a prospect of still further advances, due to the limited supply and to the prospect of heavy European demands. During the first part of May another fur sale was held in St. Louis and was well attended by represen tatives from all over the world. The total sales aggregated over $10,000,000. R E T A IL — Cool, rainy weather has materially delayed the demand for straw hats, light summer cloth ing and similar seasonable merchandise, but, on the whole, department stores and retail merchants generally report a satisfactory business. The April sales of ready-to-wear clothing were unusually large. A demand tor the better classes of merchandise is noticeable. A G RICU LTU RE— The condition of winter wheat in the seven States in this district continues very satisfactory, as is disclosed by the following table compiled by the U. S. Department of Agriculture as of May 1, 1919: Condition May 1 1919 1918 P. Ct. P. Ct. Arkansas.......................................... Illinois.............................................. Indiana ............................................ Kentucky ........................................ Mississippi ...................................... Missouri .......................................... Tennessee ....................................... 98 100 100 102 90 101 97 Ten year average P. Ct. 93 92 96 101 90 95 96 90 80 81 86 87 83 87 Estimated yield from May 1,1919 Condition Bushels 4,596,000 65,990,000 55,809,000 15,257,000 641,000 72,423,000 9,883,000 Final estimated yield 1918 Bushels 3,048,000 54,266,000 49,266,000 12,129,000 495,000 52,873,000 7,500,000 Estimated Price May 1 1919 1918 $2.12 2.33 2.30 2,20 $2.06 2.05 2.07 2.16 2.33 2.35 1.99 2.18 Corn planting has been much delayed by wet, cool weather. The cotton crop also has been delayed by climatic conditions. Tobacco plants are ready to set out, but the weather has delayed planting them. Fruits throughout the district were materially damaged by frost during the latter part of April. The joint State and Government report on crop damage in Missouri may be taken as an index to conditions throughout the district. It lists the following percentages of damage to fruit crops: Cherries, 28% ; Pears, 27% ; Plums, 25% ; Apples and Peaches, 23%, and Strawberries, 10%. L IV E STOCK—The report of the St. Louis National Stock Yards for April, 1919, shows increases in the receipts and shipments of hogs and sheep over the corresponding month last year; a decrease in the receipts of cattle, but an increase in shipments; a decrease in the shipments of horses and mules, but an increase in receipts. The comparative figures showing the number of head received and shipped, are as follow s: Cattle April 1919 Receipts ........................................................ 90,168 Shipments .................................................... 26,754 Hogs 1918 1919 97,723 19,443 340,332 128,487 Sheep 1918 275,155 99,257 Horses and Mules 1919 1918 1919 1918 27,290 1,598 13,780 1,009 11,066 10,493 7,120 15,693 The hog market was particularly active. A new high price for hogs in this locality was established at the St. Louis National Stock Yards on May 8th, when a top price of $21.15 per 100 pounds was reached. Since that date the price has fluctuated considerably. L A B O R — There has been a marked improvement in the labor situation in this district during the past month. Reports indicate that there is a good demand for high-class salesmen and executives, and for various kinds of skilled labor, particularly painters, high-grade machinists and industrial workers, and printers. The returning soldier, through his desire to stay in the cities, has helped cause a shortage of farm labor, but he is creating no serious problem, as the greater industrial activity, partly due to the increased buying consequent on his return, is making larger demands for his services. Most of the returned soldiers are finding employment and there is an increasing demand for them. There are no marked labor troubles in the district at the present time. T R A N S P O R T A T IO N — Transfer companies assert that their business has picked up considerably dur ing the first two weeks of May. The facilities of the barge line operating between St. Louis and New Orleans are being greatly increased and it is expected that, with differential rates making water and water-rail ship ments profitable, river traffic will develop rapidly. Efforts are being made to secure rates from river points to the South to equalize Eastern rates to Southern distributing points. With these advantages inter-state commerce in this district and shipments to Mexico, South America and Europe will be materially increased. BU ILDIN G— Marked increases over April last year and over March this year are shown in reports on building operations from St. Louis and Memphis. The comparative figures for April are as follows: 1919 April 1918 Permits Cost Permits 744 260 162 106 $1,019,470 202,160 725,000 174*992 648 178 112 St. Louis .............................................................................................. Louisville .............................................................................................. Memphis................................................................................................ Little Rock .......................................................................................... Cost $530,028 238,128 271,635 There is a big demand for apartments and for office buildings. The demand for business premises is attributed in great measure to the reopening of branch offices bv firms which closed them at the outbreak of the war. BANKING— During the past month two important bank mergers have taken place in this district. In St. Louis three large institutions consolidated, with a capital of $10,000,000, surplus of $5,000,000, and total resources of approximately $160,000,000. This will be the largest institution of its character west of the Mississippi River. In Little Rock three banks also consolidated with a capital of $750,000, surplus of $150,000, and total resources of approximately $12,000,000. Important consolidations have also previously taken place in Louisville. Bankers are looking forward to an era of great commercial activity in the Mis sissippi Valley and are preparing to transact business on a larger scale. For the third time in succession, this district was the first to subscribe its quota for Government bonds. In selling the Victory Bonds, banks were urged to make every effort to place them with individuals and firms, thereby preserving their own credit for business development. Their co-operation in this matter was largely responsible for the success attained. Following the conclusion of the Victory Liberty Loan campaign, the market for commercial paper is becoming more active. Large city banks are beginning to buy as well as those in the country districts. The high, low and customary discount and interest rates prevailing in St. Louis, Louisville, Memphis and Little Rock from April 16th to May 15th, as reported by banks located in those cities, were as follows: St. Louis H L Customers* prime commercial paper: 5 30 to 90 days......................................... 6 4 to 6 months....................................... 6 5J4 Prime commercial paper purchased in open market 5 30 to 90 days......................................... 554 4 to 6 months........................................5J4 554 5 Loans to other banks................................6 Bankers’ acceptances of 60 to 90 days: Endorsed___ : ....................................... 6 454 Unendorsed ......................................... 6 4J4 Loans secured by prime stock exchange collateral Demand ............................................... 6 4H 5 3 m onths............................................... 6 3 to 6 months........................................6 554 6 Cattle Loans ............................................... 6 Commodity paper secured by warehouse receipts, etc........................................... 6 5^ Loans secured by Liberty Bonds and Certificates........................................... 6 454 Louisville Memphis Little Rock L C H L C H 5^ 5/2 6 6 5/2 5/ 6 6 6 6 5 5 6 6 8 8 5/2 5/2 6 6 554 S'A 5J4 5/2 5/2 5 5 5 5 554 5J4 5 6 5 5 4^4 6 6 554 5 5/2 6 6 5/2 6 6 6 ... ... ... ... ... ... 6 6 6 5a 5J4 6 6 6 8 8 8 8 6 6 6 6 6/2 7 7 6J4 6 4H 4'A 454 4% 4J4 4J4 or other current collateral: 6 5 6 5 /2 6 5 6 6 5 6 6 6 6 5 6 6 L C H C 6 6 6 6 6 4 54 . 5 5/2 6 8 7 654 6 4H 5 8 5 6 The condition of the banks in this district at the present time and the changes during the past month are reflected in the following comparative statement showing the principal resources and liabilities of mem ber banks in St. Louis, Louisville, Memphis, Little Rock and Evansville: May 9,1919 Number of banks reporting.............................................................. April 11,1919 36 36 United States bonds to secure circulation........................................................ .......... Other United States bonds, including Liberty bonds.......... ....................... .......... United States certificates of indebtedness........................ ............................. .......... $ 16,956,000 19,219,000 75,996,000 $ 16,908,000 18,609,000 73,463,000 Total United States securities owned........................................................ .......... 112,171,000 108,980,000 .......... 25,489,000 385,533,000 26,509,000 388,035,000 Total loans and investments.......................................................................... .......... 523,193,000 523,524,000 Cash in vault........................................................................................................... Net demand deposits on which reserve is computed.................................... ............ ............ ............ 37,468,000 10,382,000 304,914,000 98,390,000 20,145,000 39,710,000 10,265,000 298,380,000 99,954,000 23,444,000 The volume of banking business transacted in this district during the past month is indicated by the following comparative table compiled from information received from the Clearing Houses in the cities show n: Debits to Bank Accounts, weeks ending: Little Rock April 23 April 30 May 7 May 14 $126,023,000 , 34,527,000 . 32,255,000 7,363,000 . 3,994,000 Debits to Individual Accounts, weeks ending: $123,950,000 32.195.000 24.640.000 6,542,000 5,711,000. $122,549,000 33.575.000 27.089.000 8,902,000 . .5,285,000 $120,255,000 35.353.000 26.314.000 7,953,000 .4,746,000 April 23 April 30 . " May 14 May 7 $118,692,000.. , .. .$117,926,000. - . 34.324.000 24,422,000 25.741.000 6,000,000 4.274.000 . 2,596,000 1.704.000 $130,986,000- 39.434.000 21.425.000 5.952.000 1.960.000 $124,683,000 33.683.000 23.325.000 7,013,000 ,2,817,000 In April the Federal Reserve Bank of St. Louis discounted a total of $197,127,063.39 of paper for 190 different member banks, which is an increase of $12,000,123.39 over the amount of paper discounted dur ing March and an increase of' 19 in the number of banks accommodated. The discount rates of the Fed eral Reserve Bank have remained unchanged. Those now in effect are as follows: 15 days 16 to 60 and less days MEMBER BANKS* CO LLATERAL NOTES: 61 to 90 days 91 days to 6 months 4% Secured by Liberty Bonds or Treasury Certificates........................................................... 4# 5% Secured by War Finance Corporation Bonds..................................................................... Secured by Bills Receivable........ ...........................*.............................................................. 47* REDISCOUNTS: 4% *4% ft *4]/4% Secured by Liberty Bonds or Treasury Certificates............................................. ........... 5H% 5% Secured by War Finance Corporation Bonds................................................................... 5-H% 4H% Commercial Paper , ...................................................................................................................... 4% ------4H% 4H % 4 fi% Agricultural or Livestock Paper.............................................................................................. 4% 4f$% 4$4% S G y& fc 4 y2% 4% 4 y2% Trade Acceptances...... ............................ ...................................................... ........................ Bankers' Acceptances purchased at the market rate, subject to agreement. * A special rate of 4% is made for paper with 16 to 90 days’ maturity, secured by Fourth Liberty Loan Bonds', provided such paper has been taken by the member bank at a rate not in excess of the Fourth Liberty Loan coupon rate. The resources and liabilities of the Federal Reserve Bank of St. Louis on May 16, 1919, as compared to a month ago and a year ago, are shown in the following statement: RESOURCES: April 18,1919 Gold settlement fund Gold redemption fund. May 16, 1919 May 17, 1918 $ 3,900,000 22,361,000 4,937,000 $ 3,973,000 ,34.975.000 . 4,465,p O O $ 2 ,212,000 32,421 000 1,722,000 31,198,000 43,413,000 Gold with foreign agencies. Gold with Fed. Res. Ageni 42,564,666 58*270,000 36.355.000 2 , 100,000 42.003.000 Total Gold Reserve.............. Legal Tender, Notes, Silver, etc. 73,762,000 2,278,000 101,683,000 2,264,000 80,458,0)00 1,692,000 76,040,000 103^947,000 82,150,000 80,645,000 8,476,000 64;625,000 3,668,000 29,150,000 7,697,000 Total discounts .............................................................................................. 89,121,000 68,293,000 36,847,000 U. S. Government bonds....................................................................................... Certificates of Indebtedness to secure F. R. Bank note circulation . . . . 1,153,000 12,068,000 U 53,000 14,682,000 2,744,000 Total U. S. securities. 13,221,000 15,835,000 2,744,000 Total earning assets. 102,342,000 84,120,000 39,591,000 45,072,000 1,356,000 48,067,000 1,576,000 42,668,000 685,000 224.810,000 237,718,000 165,094,000 $ 3,826,000 $ 3,838,000 $ 3,523,000 7.304.000 8.953.000 61.415.000 337,000 33.413.000 12.184.000 12.540.000 63.175.000 401,000 24.136.000 4,369^000 *49,3$,000 462,000 42,356,600 101,422,000 112,436,000 96,064,000 10.521.000 106,357,000 2.684.000 13,094,000 105.491,000 2,859,000 64,446,000 599.000 224,810,000 237,71*000 Total Reserves Bills discounted— Members Bills purchased in open market........ Uncollected items . *. All other Resources. T O T A L RESOURCES LIA B ILITIE S: Capital paid in. U. S. Government Deposits................................................................................. Gold Settlement Fund— Suspense ...................................................................... Due to Member Banks— Reserve Account....................................................... Due to Non-Member Banks— Clearing Acct., Cashier's checks, drafts, etc. Collection ite m s.................................. ......................................... ........................... Gross Deposits F. R. Bdnk Notes in actual circulation. F. R. Notes in actual circulation............ A ll other lia b ilitie s.............. ................... T O T A L L IA B IL IT IE S m jm m
