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BUSINESS CONDITIONS Monthly Review of Agricultural, Industrial, Trade and Financial Conditions in Eighth Federal Reserve District RELEASED FOR PUBLICATION ON THE AFTERNOON OF MAY 31, 1938 FEDERAL RESERVE BANK OF ST. LOUIS DISTRICT SUMMARY USINESS in the Eighth District failed to mately 11 per cent. The momentum of decline in improve during April, and save in a very retail distribution is also less precipitous than in the earlier period. limited number of lines which were directly affected by seasonal influences, the volume was There has been no deviation from the policy of under that of the preceding month and the smallest extreme conservatism which has obtained in pur of the present depression. Since May 1 the same chasing of merchandise of all descriptions during the past several months. In all lines investigated, general trends have been in effect and about the buying is for immediate same rate as during the requirements only, and preceding sixty days. The M ay 1, 1938 com p, w ith Agriculture: 1937 A v. 1927-36 with the lower trend in angle of decline, however, Estimated produc. of Winter Wheat....— 7.8% + 44.3% prices there is no incen was nothing like as acute April 1938 com p, with Livestock: Mar. 1938 A pril 1937 tive for future buying, as that which reflected Receipts at National Stock Yards.....-f- 3.0% — 18.5% either of finished goods or conditions during the final Shipments from aforesaid Yards...... — 1.2 — 11.2 quarter of 1937, and in raw materials. This situa Production and Distribution: Sales by mfrs. and wholesalers.......... —12.8 — 20.8 certain branches of indus tion is reflected in the Department store sales.......................-f- 5.8 — 4.2 try and distribution of smallest volume of ad Car loadings......................................... —13.8 — 30.3 commodities indicated rel vance orders on books of Building and Construction: ative stability. As an in producers and distribu a •. • 1 f Number....— 2.0 — 19.3 Bldg. permits, incl. repairs | Cost _16.1 _ 41.8 stance, steel ingot produc tors recorded at this time Value construc. contracts awarded....-}-14.3 — 10.4 tion in this area declined in a number of years. Miscellaneous: only about three points There is also a reluctance n . 1 r *i ( Number.......... -j- 2.1 +128.6 Commercial failures \ Liabilities....... ^52.2 +138.2 from mid-April to the to expend capital in new 0.8 — 15.3 Consumption of electricity..................+ third week in May, where enterprise or in expan Debits to individual accounts............ — 4.8 — 18.4 as the decline from Octo sions and improvements TI_ _ / . M ay 11/3 8 com p, with Member Banks ( 2 4 ) : Apr. 13,’ 38 May 12/37 ber to December, 1937, of existing plants and Gross deposits..................................... -f 0.3% -f- 1.3% was approximately 45 per facilities. As contrasted Loans.................................................... — 2.4 -f 0.1 Investments..........................................-f 4.8 — 2.2 cent. Similar flattening with earlier this year, tendencies were noted in however, there has been glass, lumber, cement and the general run of build a substantial reduction in inventories, a considerable ing materials in the area. Withal production as a portion of which represents goods acquired early whole so far this year is markedly below that of a last year, when expanding business and expected year earlier; the production index of the Board of higher prices were stimulating buying. The employ Governors, adjusted for seasonal variation, stood ment situation as a whole continued unfavorable, at 77 per cent of the 1923-1925 average in April, as the number of idle workers increasing and payrolls against 118 per cent in April, 1937. The total vol declining. Wage reductions and proposals for reduc ume of distribution of commodities through whole tions were more numerous. April construction con sale and jobbing channels, as measured by statistics tracts in the district were 14 per cent above March, of firms reporting to this bank, decreased 35 per but 10 per cent under last year. Permits issued for cent from October to December last year, while the new construction in the principal cities were lower in both comparisons. loss from January to April this year was approxi B Page 1 As reflected in sales of department stores in the principal cities, the volume of retail trade in April was 5.8 per cent larger than in March and 4.2 per cent less than in April, 1937; for the first four months the cumulative total was 4.9 per cent smaller than that for the corresponding period a year ago. Combined sales of all wholesaling and jobbing firms whose statistics are available to this bank were 12.8 per cent and 20.8 per cent smaller, respec tively, than a month and a year earlier, and cumula tive total for the year to May 1 was 14.9 per cent under that of the like interval in 1937. The dollar value of new building permits issued for new con struction in the princpal cities in April was about one-fourth less than a month earlier and 45.7 per cent below April, 1937; cumulative total for the first four months was smaller by one-third than in the same period a year earlier. Construction con tracts let in the Eighth District in April exceeded those of the preceding month by 14.3 per cent, but were 10.4 per cent below a year ago, and for the first four months this year the cumulative total was 22.8 per cent under that of comparable interval in 1937. Agricultural conditions throughout the district underwent no marked change between mid-April and the third week in May. Outlook generally is for large production, both of the major and minor crops. The season to date, barring the cold spell in early April, has been favorable for vegetation and livestock. Farm work, except where interfered with by rains, is mainly up to the seasonal schedule. Wheat prospects improved moderately from March to April, and the condition of all winter cereals is high. Planting of corn has progressed rapidly dur ing the past three weeks. As of May 15 about half of the crop had been planted as against only 25 per DETAILED SI MANUFACTURING AND W HOLESALIN G Lines of Commodities Boots and Shoes.......... Drugs and Chemicals.. Dry Goods................... Electrical Supplies..... Furniture.... ................. Groceries..................... Hardware..................... Net Sales __________ Stocks April, 1938 4 months 1938 April 30, 1938 compared with comp, with same comp, with Mar. ’ 38 Apr. ’ 37 period 1937 April 30, 1937 — 18.4% — 24.2% — 10.1% — 21.1% — 10.3 — 11.3 — 15.1 — 11.8 — 21.5 — 22.9 — 25.5 — 20.5 + 3.0 + 11.8 — 19.4 — 15.3 + 1.8 — 20.0 — 22.9 — 20.5 — 4.5 — 20.3 — 14.1 — 17.6 — 19.9 — 14.7 — 12.6 — 9.7 All above lines......... — 12.8 — 20.8 — 14.9 i — 19.9 Automobiles — Combined passenger car, truck and taxicab production in the United States in April totaled 219,314 against 221,951 in March and 536,334 in April, 1937. Boots and Shoes — The decline in sales in April from March, shown in the above table, was contraseasonal in character, and the April total was the smallest for the month, with the exception of 1936 Page 2 cent on the same date last year. As an offset to the favorable outlook for production has been the sharp downward trend in prices of farm products. This fact, coupled with heavy carryover of many produc tions and a disposition to await final decisions on quotas and other features connected with the Gov ernment’s agricultural program, has made for much uncertainty relative to ultimate acreages to be planted. The status of collections in the district during the past thirty days developed no marked change from the trends which have been in evidence during the past several months, and general conditions con sidered, results made a fairly favorable exhibit as contrasted with a year ago. Payments to wholesal ers in the principal distributing centers in April and the first half of May were on the whole about up to expectations. This fact, however, was attributable to much reduced volume of outstanding indebted ness and the general policy of hand-to-mouth pur chasing by retail merchants. Considerable spottiness was noted in city retail collections, and in the coun try settlements were interfered with somewhat by preoccupation of farmers with spring planting oper ations. Inquiries made in the large urban centers indicate increasing delinquency and backwardness in domestic housing rental payments. Time payment houses report a very noticeable slowing down in collections in recent weeks. Questionnaires ad dressed to representative interests in the several lines scattered through the district show the follow ing results: Excellent April, 1938............... 1.8% March, 1938............... 1.2 April, 1937............... 4.5 Good 30.2% 34.8 44.5 Fair 40.5% 44.5 44.0 Poor 27.5% 19.5 7.0 EY OF DISTRICT and 1932, since these records began in 1924. Produc tion slowed down materially in April and early May, following the more than seasonal gain in April. The trend of prices was lowTer, with specific reductions in certain lines announced by several interests. Clothing — Decreases in April sales under a month and a year earlier affected all lines, but most pronounced in outing and sports clothes and work clothes. Clearance of heavy weight apparel through retail channels was universally disappointing, and carryover of goods in this category was reported the heaviest in a number of years. Drugs and Chemicals — April sales were the smallest for the month since 1935, and reports cov ering the first half of May reflect a continuance of the recessionary trend. Sales of certain stable lines, including insecticides, were in considerable volume, but sharp decreases were reported in miscellaneous items and the general run of luxury goods. In con trast with a year ago, demand for heavy drugs and chemicals from the general manufacturing trade was light. Dry Goods — The decline in April sales of the reporting firms of about one-fifth as contrasted with a year ago was accounted for largely by heavily reduced volume of future business. Advance orders on books of the reporting firms as of May 1 ranged from 30 per cent to as much as 75 per cent below those on the same date in 1937. Electrical Supplies — A noticeable pick-up in demand for seasonal merchandise, especially electric fans and refrigeration materials, was responsible for the larger than usual seasonal increase in April sales over the preceding month. The status of busi ness generally, however, is reported slow, with out let through the building industry and public utili ties narrower than at this season in more than a decade. Furniture — The decrease in sales in this classi fication from March to April was much smaller than the usual experience, which fact is attributed to the very small volume in March rather than improve ment in demand. In the comparison with a year ago, a large part of the decline was occasioned by light advance business and almost entire absence of stock orders. Groceries — Business in the rural areas was re ported relatively better than in the large cities, re flecting largely the low ebb of industrial employ ment. Retail stocks are in the main below normal for this season, but there is a general disposition to defer replenishing. The unusually early movement of fresh fruits and vegetables has adversely affected ordering of canned products. Hardware — All lines of hardware shared in the decline in April sales under those for the same month last year. Most marked decreases were in the gen eral classification of builders’ hardware and tools, including paints, varnishes and kindred lines. Ad vance sales of sporting, outing and tourist goods and supplies were reported in the smallest volume since 1932. Iron and Steel Products — The usual seasonal influences which make for improvement in the iron and steel industry in this area have failed to stimu late purchasing; April and the first half of May were marked by a further decline in activities, which in some lines receded to the lowest point so far reached on the present recessionary movement. Miscella neous demands for manufactured goods, which earlier in the year offered the principal support to the market, have diminished in volume, and no expansion has been noted in purchasing by the major consuming groups. Lettings of structural steel, including reinforcing concrete bars, are run ning measurably below a year ago, and such busi ness as has been placed represents almost exclusive ly public works. Operations at structural steel fabri cating plants were from 25 to 30 per cent of capacity, which contrasts with 60 per cent a year ago. Tin plate sales so far this year reflect a sharp decline in demands from can manufacturers and the build ing industry. Production at farm implement plants, beginning in early April, turned downward, in con formity with the usual seasonal trend. Sales of ware house and jobbing interests in April was about on a parity with the preceding month, but approxi mately one-fourth below the April volume in 1937. At mid-May operations at mills producing steel ingots were at 33.3 per cent of capacity, which com pares with 42.4 per cent a month earlier and 94 per cent on May 14, 1937. Shipments of pig iron to dis trict melters in April were slightly below the March total and a further decrease in the movement has taken place since May 1. With the exception of scrap iron and steel, which dropped to a new low for the year, prices showed no change worthy of note dur ing the past thirty days. For the entire country, pro duction of pig iron in April, according to the maga zine “ Steel,” totaled 1,388,008 tons, the smallest for the month since 1933, and comparing with 1,470,211 tons in March and 3,400,636 tons in April, 1937. Steel ingot production in the United States in April amounted to 1,925,166 tons against 2,011,840 tons in March and 5,070,445 tons in April, 1937. TR AN SPO RTATIO N Freight traffic of railroads operating in this district during April and early May, according to officials of the reporting lines, continued below a year ago, and for the first four months this year, total volume was the smallest for any similar period in more than a decade. Decreases occurred in all classifications, but were most pronounced and sig nificant in miscellaneous freight and fuels. The St. Louis Terminal Railway Association, which handles interchanges for 28 lines, interchanged 67,958 loads in April, against 78,850 loads in March and 97,454 loads in April, 1937. During the first nine days of May the interchange amounted to 21,102 loads, which compares with 20,436 loads during the same interval in April and 27,068 loads during the first nine days of May, 1937. Passenger traffic of the Page 3 reporting lines in April fell 2 per cent in number of passengers carried and 6 per cent in revenue as com pared with the same month a year earlier. For the entire country, loadings of revenue freight for the first 18 weeks this year, or to May 7, totaled 9,820,772 cars, against 12,940,473 cars in the corresponding period in 1937 and 11,243,416 cars in 1936. Esti mated tonnage of the Federal Barge Line between St. Louis and New Orleans in April was 187,000 tons, against 186,621 tons in March and 179,180 tons in April, 1937; for the first four months this year, cumulative tonnage was 705,589 tons, against 470,580 tons during the same period a year earlier. R E TA IL TR A D E Department Stores — The trend of retail trade in the Eighth District, as reflected in statistics of department stores in the principal cities which re port to this bank, is shown in the following compar ative statement: Stocks Net Sales______________on Hand April, 1938 4 mos. 1938 Apr. 30/38 compared with to same comp, with Mar. 1938 Apr. 1937 period ’ 37 Apr. 30/37 Ft. Smith, Ark.......... — 5.2% + 8 - 2 % — 1.3% — 17.1% Little Rock, Ark....... +16.3 + 3.6 — 5.8 — 15.8 Louisville, K y........... +11.1 — 16.5 — 5.2 — 8.4 Memphis, Tenn........ + 7.3 + 1.3 — 4.5 — 4.2 Pine Bluff, Ark......... + 12.6 — 12.7 — 20.4 — 14.9 Quincy, 111................. — 4.9 — 1.3 — 3.3 — 6.9 — 4.3 — 4.9 — 12.0 St. Louis, M o........... + 3.6 Springfield, M o......... +25.5 + 17.0 + 0.6 — 17.8 All Other Cities........ + 23.2 + 0.7 — 7.0 — 19.2 8th F. R. District..... + 5 . 8 — 4.2 — 4.9 — 11.0 Stock Turnover Jan. 1, to Apr. 30, 1938 1937 .87 .77 .89 .85 1.25 1.26 .95 1.00 .72 .80 .96 1.04 1.34 1.31 .86 .76 .88 .85 1.20 1.19 Percentage of account and notes receivable out standing April 1, 1938, collected during* April, by cities: Installment Accounts Fort Smith.............. % Little Rock...... 16.5 Louisville........ 12.8 Memphis..........24.5 Pine Bluff............... Excl. Instal. Accounts 42.6% 36.9 46.6 40.9 32.3 Installment Accounts Quincy..................... % St. Louis.......... 19.8 Springfield............... Other Cities.....15.0 8th F. R. Dist... 18.4 Excl. Instal. Accounts 49.8% 55.0 30.2 62.3 48.9 ovens, where inventories fell off 10.2 per cent. Mild weather and sluggish industrial demand were re flected in reduced consumption during the past thir ty days and the lower trend in prices. At mines in this district there was a sharp decrease in employ ment from March to April. For the entire country, estimated production of soft coal in April was 22.195.000 tons, against 26,745,000 tons in March and 26.041.000 tons in April, 1937; cumulative output for the first four months was 107,233,000 tons which compares with 161,064,000 tons during the comparable period in 1937. At mines in this general area production in April was 13 per cent less than in March and 5 per cent below a year a g o; for the first four months a decrease of 28.5 per cent under the like interval in 1937. Illinois mines produced 2,167,039 tons in April, against 2,718,782 tons in March and 1,967,339 tons in April, 1937. There were 95 mines in operation in April and 25,226 men on pay rolls, which compares with 118 active mines and 32,588 operatives in March. Petroleum — March output in states of the Eighth District was 17 per cent greater than in February and 92 per cent above March, 1937. Cumu lative total for the first four months this year ex ceeded that of the like period in 1937 by 86.5 per cent. Stocks on March 31 were 1 per cent and 2.1 per cent smaller, respectively, than a month and a year earlier. Detailed production and stock figures by states are given in the following table: _____ Production_____ (In thousands Mar., Feb., Mar., of barrels) 1938 1938 1937 Arkansas............. 1,562 1,335 809 1,108 410 Illinois................. 1,330 Indiana................ 73 70 67 Kentucky............ 457 406 494 Totals.............. 3,422 2,919 1,780 Cumulative 1938 1937 4,183 2,337 3,566 1,121 209 190 1,274 1,303 9,232 4,951 _____ Stocks Mar., Mar., 1938 1937 2,659 3,340 10,998 11,176 3,271 2,959 998 988 18,126 18,463 AGRICULTU RE Specialty Stores — April results in men’s fur nishings and boot and shoe lines are shown in the following table: Stocks ___________ Net Sales______________on Hand April, 1938 4 mos. 1938 Apr. 30/38 compared with to same comp, with Mar. 1938 Apr. 1937 period ’ 37 Apr. 30/37 Men’s Furnishings.... + 37.6 % + 2 3 .9 % — 10.6% — 9. 3% Boots and Shoes....... + 37.4 +43.5 + 7.6 — 0.9 Stock Turnover Jan. 1, to Apr. 30, 1938 1937 .74 .86 2.21 2.01 Percentage of accounts and notes receivable outstanding April 1, 1938, collected during April: Men’s Furnishings............... 33.1% Boots and Shoes......................35.5% MINING AND OIL Coal — Stocks of bituminous coal held by in dustrial consumers have declined steadily since last December, and on April 30, the latest available fig ure, stood at 30,280,000 tons, a decrease of 6.2 per cent from March 1. Decreases were general among all industries, but most marked at byproduct coke Page 4 Combined receipts from the sale of principal farm products and Government payments to farmers in states including the Eighth District during the period January-March, 1936, 1937, 1938 and during March, 1937 and 1938 are given in the following table: (In thousands March of dollars) ____1938 1937 Indiana................... $19,070 $ 26,845 Illinois.................... 33,018 40,125 Missouri................. 15,074 17,853 Kentucky............... 15,861 12,894 Tennessee............... 11,965 11,625 Mississippi............. 7,047 13,539 Arkansas................. 7,537 8,495 Totals.......... . 109,572 131,376 Cumulative for 3 months 1938 1937 1936 $ 56,821$ 69,311 $ 54,897 102,770 116,149 95,182 46,767 50,233 47,696 60,376 61,008 30,653 35,992 38,721 22,399 29,253 36,468 15,928 25,095 26,108 13,563 357,074 397,998 280,318 Farming Conditions — Eighth District crop prospects as a whole are somewhat spotty, both with reference to the various species and several localities, but latest available advices from the U. S. Department of Agriculture, state agricultural de partments and other sources indicate that they are better than at this season during any of the last several years. High temperatures in March and the latter part of April gave the winter wheat crop, grass and pastures an early start and abundant rains have stimulated growth of all vegetation. Weather has also permitted farmers to make good progress in spring work. Rainfall has been above average and in some localities rains delayed operations, and serious to light damage was done by freezes in early April. At mid-May, however,the condition of ground fruit and vegetable crops was unusually high. Injury from insect pests of various descriptions is reported extensive, and because of the mild winter and other conditions favorable for propagating,x visitations during the summer and fall are expected to be of considerable severity. As an offset to the promising outlook for crops in promoting optimism in the farming community has been the decline in prices of farm products. Pro ducers fear that with heavy yields this season, the market, under conditions incident to the business depression, will be unable to absorb the output and that prices may recede to still lower levels. This attitude has been reflected in a disposition to curtail acreage in certain localities, and to liquidate sur plus carryover stocks of grain. At mid-May wheat prices declined to the lowest point in four years, due partly to favorable crop reports and slack ex port demand. As of May 7, the farm products group of the Bureau of Labor Statistics Index stood at 67.4 per cent of the 1926 average, which compares with 68.1 per cent on April 9; 91.0 per cent on May 8, 1937; 72.2 per cent on May 9, 1936 and 60.5 per cent on May 12, 1934. Farm employment showed more than the usual seasonal increase during April, mainly as a result of the early spring and conditions generally favor able for early season work. The May 1 average, however, was somewhat lower than a year earlier. This situation apparently is the result of declining farm incomes. The drop in income also is reflected in the increased use of family labor. In part this indicates, according to the U. S. Department of Agriculture, a shift in the status of some members of the family from a cash-wage worker to that of an unpaid worker. It likewise reflects the scarcity of off-the-farm jobs. Corn — Preparations for and planting of corn has made generally good progress. Considerable un certainty in regard to acreage exists, however, main ly because numerous farmers, particularly in Illi nois, Indiana and Missouri are refusing to sign agreements with the Government owing to dissatis faction with tentative allotments for the present year. The heaviest carryover in recent years and low prices are also factors in making for acreage uncertainty. Cotton — Planting of the new crop has been virtually completed, except in the extreme northern counties and where rains and standing water have held back work. Indications at this time point to less replanting than in recent seasons. Less fertilizer is being used this year than last, and farmers are endeavoring to hold expenses to a minimum. A c cording to the National Fertilizer Association, sales of fertilizer tags in states of the district in April were 11.5 per cent less than for the same month in 1937 and for the January-April period the total was 9.4 per cent below that of the like interval a year ago. In the St. Louis market the middling grade ranged from 7.9c to 8.10c per pound between April 15 and May 16, closing at 8c on the latest date, which compares with 8.0c on April 15 and 13c on May 13, 1937. Receipts at Arkansas compresses be tween August 1, 1937, and May 20, 1938, totaled 1,771,624 bales against 1,297,267 bales during the same period a year earlier. Stocks on hand as of May 20 totaled 770,188 bales, against 185,221 bales on the corresponding date last year. Fruits and Vegetables — Early April freezes caused considerable damage to fruit and certain vegetable crops, but May 1 prospects are reported generally favorable in most of the important pro ducing sections of the district. Frost injury was most pronounced in the case of peaches and early apples. While a large portion of the apple crop had set early in May, a heavier than usual drop is ex pected because of the weakening effect of low tem peratures and faulty pollination resulting from cold, wet weather at blossom time, also heavy infestation of worms. All varieties of berries promise large yields, and the early outlook for grapes is favorable. Production of strawberries in the chief producing states is estimated at 1,130,000 crates, or about 73 per cent greater than the very small crop last year, but 8 per cent less than the 10-year (1927-1936) average. The peach crop in Mississippi and Arkan sas is estimated at 3,340,000 bushels, which com pares with 2,762,000 bushels harvested in 1937 and the 10-year average of 2,334,000 bushels. Livestock — The general condition of livestock throughout the district in April and early May main tained the high average which has marked earlier months this year. The month was particularly ausPage 5 picious for dairying operations, and milk produc tion was reported 10.6 per cent greater than a year ago and 6.6 per cent in excess of the 10-year (19271936) average. Fattening of livestock for market continued on a large scale, but in many sections farmers complained of scant profits and even losses from conditioning cattle, present market prices being below those originally paid for the feeders. Condition of hay crops and pastures is mainly high, and in all states of the district, above a year ago. Stocks of hay on farms in these states on May 1 are estimated at 2,882,000 tons, against 1,232,000 tons a year ago and 1,939,000 tons for the 10-year average. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: Cattle and Calves..... Hogs.......................... Horses and Mules.... Sheep......................... ______ R eceipts_______ _________Shipments______ April, Mar., April, April, Mar., April, 1938 1938 1937 1938 1938 1937 87,000 90,539 94,383 53,254 54,333 49,771 188,121 186,092 221,027 107,764 113,012 122,088 2,409 4,469 3,813 2,412 5,207 3,884 52,014 38,836 85,051 14,984 8,035 25,084 Totals..................... 329,544 319,936 404,274 178,414 180,587 200,827 Tobacco— As a consequence of the early spring, tobacco plants have developed rapidly, but growth has been uneven and there are complaints of blue mold, field fire and insect damage to plants in cer tain localities. In the burley and fired districts trans planting in a small way is reported, but farmers lack definite understanding as to the limitation of acre age to be planted under the agricultural control measure, which limits the quantity of tobacco to be sold at 350,000,000 pounds; however, they are pro ceeding to prepare the soil for full-sized planting, awaiting full details of the Government quota limi tation plan. Winter Wheat — Based on the May 1 condition the U. S. Department of Agriculture estimates pro duction of winter wheat in Eighth District states at 128,029,000 bushels, an increase of 1,183,000 bush els over the April 1 forecast and comparing with 138,851,000 bushels harvested in 1937 and the 10year (1927-1936) average of 88,721,000 bushels. Acreage abandonment is unusually light in all states. BUILDING The dollar value of permits issued for new con struction in the five largest cities of the district in April was 24.8 per cent smaller than in March and 45.7 per cent less than in April, 1937. According to statistics compiled by the F. W. Dodge Corporation, construction contracts let in the Eighth Federal Reserve District in April amounted to $14,384,000 which compares with $12,587,000 in March and Page 6 $16,054,600 in April, 1937. Building figures for April follow : (Cost i n ________ New Construction thousands) Permits Cost" __JJ938 _1937 1938 1937 Evansville.... 16 66 55 $ 91 Little Rock... 24 39 173 66 Louisville..... 99 99 215 306 Memphis....... 209 327 313 973 St. Louis...... 284 330 624 474 _„ Repairs, etc. Permits Cost 1938 .1937 1938 _1_937 _ 128 $ 37 $ 83 92 127 17 67 69 82 34 31 291 87 244 147 210 240 215 266 April Totals.. 632 Mar. “ ... 706 Feb. “ ... 372 790 745 519 861 789 334 2,167 1,519 951 1,123 1,494 785 900 873 618 450 380 364 534 551 371 COM M ODITY PRICES Range of prices in the St. Louis market between April 15, 1938 and May 16, 1938, with closing quota tions on the latter date and on May 15, 1937, follow s: Close High Low May Mar. 16, 19 38 15, 19 37 Wheat ............... *July “ No. *No. Corn red winter hard “ 2 2 *Tuly ............... “ .$ . 8 3 ^ $ .7 8 3 * •8 H * .77/ .78/2 .8 2 # .88 y2 .81 .8 7 .81 “ “ “ “ “ .6 0 *4 .6 m .6 2 3 4 .5 7 .5 7 3 4 .5 8 3 4 .60.y2 .345* -81 / $ .8 2 .83 1 .2 7 % 1 .1 7 } * 1.163/* 1.3 3 5 4 1.31 .5 8 .S9/& 1 .3 0 7 * 1 .2 0 .7 7 / .7 8 / $ .60/s 1.10 34 .5 6 / .56/2 .58 .59 1.35 1.31 .27/8 .26/4 .26 .2 8 / .26% ** *No. 2 white .. •29/2 Flour Soft patent..... 4.50 4.15 Spring “ ...... 5.70 6.25 Middling Cotton. ..per lb. .0790 .0810 Hogs on Hoof.,.....per cwt. 8.44 7.72 ^Nominal quotations. 4.15 @4.40 5.75@6.15 .0800 8.07 *No. *No. Oats 2 2 mixed .. white .. .60 “ •3 2 & .33 .34 .5 0 / •445* .26 ,31 .39** .57 6.70 7.70@ 8.10 .1300 9.60@ 11.00 6 .2 0 @ CONSUMPTION OF ELECTRICITY Public utilities companies in six large cities of the district report consumption of electric current by selected industrial customers in April as being slightly greater than in March and 15.3 per cent less than in April, 1937. Detailed figures follow : (K .W .H . in thous.) No. of April, Custom 1938 K .W .H . ers Evansville.. . 40 2,195 Little Rock... 35 1,880 ... 82 7,453 ... 31 1,958 Pine Bluff.. ... 20 678 196 20,846 * Revised. ....404 35,010 Mar., 1938 K .W .H . 2,568 1,807 7,462 2,665 810 19,429 April, 1937 K .W .H . 3,648 1,787 9,335* 2,448 1.103 23,022 34,741 41,343 April, 1938 compared with Mar. 1938 April, 1937 — 14.5% — 39.8% + 5.2 - f 4.0 — 0.1 — 20.2 — 20.0 — 26.5 — 38.5 — 16.3 — 9.5 + 7.3 - f 0.8 — 15.3 LIFE INSURANCE Sales of new, paid-for, ordinary life insurance in states including the Eighth District during April, the preceding month, and a year ago, togeth er with the cumulative totals for the first four months this year and the comparable period in 1937 are shown in the following table: April, Cumulative Totals Mar., April, 1937 1938 1937 1938 1938 $ 3,159 $ 4,270 $ 4,287 $ 13,149 $ 15,535 54,282 170,496 208,622 46,922 . 39,552 15,900 46,805 57,849 13,206 11,477 7,339 25,893 2 3,736 7,300 6,225 4,082 11,946 14,351 3,605 3,158 Mississippi...... 21,654 66,692 18,193 77,971 15,701 9,332 27,205 7,901 34,473 7,055 (In thousands of dollars) . 86,327 United States.. . 499,656 101,397 568,473 Cumul. change — 15.4% — 18.3 — 19.1 + 9.1 — 16.8 — 14.5 — 21.1 116,876 362,186 432,537 — 16.3 692,062 2,050,647 2,539,666 — 19.3 BANKING AND FINANCE The principal developments in Eighth District banking and finance during the past thirty days have been a continued decline in loans and a rather sharp upturn in deposits of commercial banks. Reflecting the depressed status of general business, demand for credit from commercial and industrial interests receded to the lowest levels experienced in many months. Interest rates remained unchanged at or around the record low levels which have obtained since the beginning of this year. Calls on the banks for funds for agricultural financing were less in evi dence than is ordinarily the case at this season, partly because farmers are endeavoring to raise this year’s crops as cheaply as possible and for the rea son that their requirements are being met by Gov ernmental and other agencies. Liquidation generally has been in considerable volume. It is reported that tobacco jobbers have paid off their loans somewhat in advance of the season, which is taken to indicate that tobacco stocks have largely been sold. Member Banks — Reflecting scant demand for credit, total loans of weekly reporting banks in the principal cities declined 2.4 per cent between April 13 and May 11, and on the latter date were about even with a year earlier. Investments increased 4.8 per cent to a new high for the year, but on May 11 were still 2.2 per cent below the corresponding re port date in 1937. Gross deposits fluctuated uneven ly during the four-week period, showing only a slight net change at its close. Total reserve balances increased 2 per cent and continued moderately high er than a year ago. Statement of the principal resource and liability items of the reporting member banks follow s: (In thousands of dollars) May 11, 1938 Loans— total.............................................................. $293,387 Commercial, industrial, and agricultural: On securities................................................ . 43,530 Otherwise secured and unsecured............. 129,492 Open market paper.......................................... 9,399 Loans to brokers and dealers......................... 5,101 Other loans to purchase or carry securities... 12,471 Real Estate loans............................................. 46,980 Loans to banks................................................. 7,289 Other loans: On securities................................................. 10,977 Otherwise secured and unsecured............. 28,148 Investm ents— total.................................................. April 13, 1938 $300,"472 May 12, 1937 $293,172 46,395 1 179 Q7A 136,060 f 9,767 10,735 5,007 6,237 12*588 13,844 47,051 45,379 5,758 8,526 10,458 1 27,388 \ d77 • 367,155 350,216 375,349 U. S. Gov’t obligations................................... 218,855 Obligations guaranteed by U. S. Gov’ t........ 54,608 Other securities................................................ 93,692 204,601 49,843 95,772 219,249 50,650 105,450 Gross deposits............................................................ 897.606 894,550 885,991 Demand deposits.............................................. 710,279 705,514 699,015 Time deposits................................................... 187,327 189,036 186,976 Borrowings................................................................................................................. Above figures are for 24 member banks in St. Louis, Louisville, Memphis, Little Rock and Evansville. Their resources comprise approxi mately 62.0 per cent of the resources of all member banks in this district. Aggregate amount of savings deposits held by selected banks on May 4 was 0.4 per cent larger than on April 6 and 2.3 per cent more than on May 5, 1937. At St. Louis downtown banks, as of the week ended May IS, interest rates charged were as fol lows: Customers’ prime commercial paper, 1^2 to $y2 per cent; collateral loans, 2 to 6 per cent; loans secured by warehouse receipts, 1^4 to 5*4 per cent; interbank loans, 3 to 5 per cent and cattle loans, Ay2 to Sy2 per cent. Federal Reserve Operations — The volume of the major operations of the Federal Reserve Bank of St. Louis (including its Louisville, Memphis and Little Rock branches) during April, 1938, is indi cated by the following figures: Pieces 5,008,482 Checks (cash items) handled............................... 128,286 Collections (non-cash items) handled............... 4,657 Transfers of funds................................................. 20,602,175 Currency and coin received and counted........... 12 Rediscounts, advances and commitments....... New issues, redemptions, and exchanges of 12,153 securities as fiscal agent of U. S. Govt., etc. 12,454 Bills and securities in custody— coupons clipped Totals.................................................................... Amounts $ 964,213,208 30,090,747 284,494,304 34,336,785 524,650 15,496,490 25,768,219 1,293,156,184 Changes in the principal assets and liabilities of this bank appear in the following table: May 19, 1938 (In thousands of dollars) 205 Industrial advances under Sec. 13b....., $ Other advances and rediscounts........... 2 Bills bought (including participations) U. S. securities......................................... , 119,220 April 19, 1938 $ 207 151 2 119,173 May 19, 1937 $ 336 625 86 111,385 119,427 119,533 112,432 Total reserves........... ................................ 317,005 Total deposits............................................ . 255,941 F. R. Notes in circulation........................ 175,307 508 Industrial commitments under Sec. 13b> Ratio of reserve to deposit . 73.5% and F. R. Note liabilities......... 324,095 259,198 177,615 283,427 211,921 178,247 Total earning assets............................. . 489 1,201 74.2% 72.6% Following are the rates of this bank for accom modations under the Federal Reserve A ct: (1) Rediscounts and advances to member banks, under Sections 13 and 13a....................................................... 1 ^ % per annum (2) Advances to member banks, under Section 10b........... 2 % per annum (3) Rediscounts, purchases, and advances to member banks, nonmember banks and other financing in stitutions, under Section 13b: (a) On portion for which such institution obligated....3J^ % per annum (b) On remaining portion...............................................4 % per annum (4) Commitments not exceeding six months to member banks,nonmember banks and other financing in stitutions, to rediscount, purchase, or make ad A % flat vances, under Section 13b....................... ................... X (5) Advances to established industrial or commercial ( 4 % to businesses, under Section 13b................................. ( 5 ^ % per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured by direct obligations of United States under Section 13....... 4 % per annum Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: Mar., 1938 April, 1937 (In thousands April, of dollars) 1938 East St. Louis and Natl. Stock Yards, 111.. $ 28,916 El Dorado, Ark..... 5,805 Evansville, Ind...... 26,620 Fort Smith, Ark.... 10,480 Greenville, Miss.... 4,131 Helena, Ark.......... . 1,435 Little Rock, Ark.... 32,237 Louisville, K y....... . 137,035 Memphis, Tenn..... 102,579 Owensboro, K y..... 5,074 Pine Bluff, Ark..... 7,647 7,353 St. Louis, M o........ 513,450 Sedalia, M o........... 1,783 Springfield, M o..... 12,636 Texarkana, Ark-Tex. 6,476 $ 29,901 5,833 25,672 11,733 5,103 1,806 36,009 142,098 119,319 6,112 9,358 7,429 523,933 1,779 13,264 9,778 $ 34,604 5,310 33,132 12,146 4,868 1,766 39,031 175,986 130,987 5,395 10,726 9,343 616,200 2,081 16,003 9,357 — 3.3% — 0.5 + 3.7 — 10.7 — 19.0 — 20.5 — 10.5 — 3.6 — 14.0 — 17.0 — 18.3 — 1.0 — 2.0 + 0.2 — 4.7 — 33.8 — 16.4% - f 9.3 — 19.7 — 13.7 — 15,1 — 18.7 — 17.4 — 22.1 — 21.7 — 5.9 — 28.7 — 21.3 — 16.7 — 14.3 — 21.0 — 30.8 903,657 949,127 1,106,935 — 4.8 — 18.4 (Completed May 23, 193S) April 1938 comp, with Mar. 1938 Apr. 1937 Page 7 N A T IO N A L SU M M ARY OF BUSINESS CO N D ITIO N S BY B OARD OF GOVERN ORS OF F E D E R A L R E SE RV E SYSTEM Index of physical volume of production, adjusted for sea sonal variation, 1923-1925 average = 100. By months Jan uary, 1934, through April, 1938. Latest figure, April, 1938, 77. Indexes of number employed and payrolls, without adjust ment for seasonal variation, 1923-1925 average = 100. By months, January, 1934, through April, 1938. Latest figures, April, 1938, employment 79.6, payrolls 70.5. DEPARTMENT STORE SALES Indexes of value of sales, 1923-1925 average = 100. By months, January, 1934, through April, 1938. Latest figures, April, 1938, adjusted 83, unadjusted 86. ’ 34 1935 <936 1937 1938 Wednesday figures for reporting member banks in 101 leading cities. September 5, 1934, through May 18, 1938. Page 8 Industrial production declined in April, reflecting chiefly reduced activity in the cotton textile and lumber industries. Distribution of com modities increased less than seasonally but continued to be somewhat in excess of production. Commodity prices showed a further decrease. Production— In April, volume of industrial production, as measured by the Board’s seasonally adjusted index, was at 77 per cent of the 1923-1925 average as compared with the level of about 79 per cent main tained during the first quarter of the year. The decline reflected, chiefly, considerable reductions in output at cotton textile mills and lumber mills, where there had been moderate increases in production in March. In most other manufacturing industries changes in activity were largely seasonal in character. Output at steel mills continued around 33 per cent of capacity and in the automobile industry showed little change, amount ing in April to about 40 per cent of the volume of a year ago. In the first three weeks of May production of steel and automobiles was at a lower rate than in April. At mines there was a considerable decline in output of anthracite in April, while bituminous coal production showed somewhat less than the usual seasonal decrease. Crude petroleum pro duction continued in large volume. Value of construction contracts awarded, which had increased considerably in March, showed little change in April, according to figures of the F. W. Dodge Corporation. Awards usually increase somewhat further in April. In the first four months of this year private residential building was about one-fourth less than in the corresponding period last year, while other private work, particularly industrial and utility construction was only about one-half as large as a year ago. Awards for public projects were some what larger than last year. Employment — Factory employment and payrolls declined from the middle of March to the middle of April, and the Board’s seasonally adjusted index of employment was at 79 per cent of the 1923-1925 aver age as compared with 82 per cent in March and 84 per cent at the begin ning of the year. The number employed at automobile factories declined sharply and there were further substantial decreases in the steel and machinery industries and at railroad repair shops. Smaller declines were reported in most other manufacturing industries. Employment at mines and on the railroads also decreased, while in trade there was some in crease in the number employed, reflecting partly increased business at the Easter season. Distribution — Distribution of commodities to consumers showed less than the usual seasonal rise in April. The Board’s adjusted index of department store sales was 83 in April compared with 86 in March and 90 at the beginning of the year, and figures for the first half of May indicate a further decrease. Freight-car loadings also declined from March to April, reflecting largely reduced shipments of miscellaneous freight, and were about 30 per cent less than in April, 1937. Commodity Prices — Wholesale prices of industrial commodities continued to decline from the middle of April to the third week of May and prices of agricultural products also decreased somewhat further. Steel scrap, copper, and raypn showed considerable declines and there were reductions in prices of some finished industrial products. It was announced that prices of most finished steel products would be un changed for third quarter delivery. Bank Credit — Total loans and investments of reporting member banks in 101 leading cities showed little change during April and the first half of May. Holdings of United States Government obligations increased somewhat, while holdings of other securities and loans declined. Adjusted demand deposits in leading cities increased during the period as a result of expenditures by the Treasury from its balances wTith the reserve banks. Interbank deposits also increased substantially. Mem ber bank reserves increased further, reflecting principally Treasury dis bursements from its deposits at the reserve banks, including retirement of $50,000,000 of Treasury bills each week. Money Rates and Bond Yields — Yields on Government securities declined slightly further in the four weeks ending May 21 to an average of longer-term Treasury Bonds of 2.28 per cent. The average yield on 3- to 5-year Treasury notes declined to a new low of 0.73 per cent. The rate on three-month Treasury bills continued at record low levels, and other open-market money rates remained unchanged.
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