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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication on Afternoon of M ay 31, 1939 FEDERAL RESERVE BANK S te Cp l, F n fo K tu y ta aito ra k rt, en ck OF ST. LOUIS SU M M AR Y OF EIGH TH D ISTRICT May 1, 1939, comp, with 1938 Av. 1928-37 Agriculture: Estimated produc. of winter wheat.......—23.5%— 4.7% Apr., 1939, comp, with Live Stock: Mar., 1939 Apr., 1938 Receipts at National Stock Yards...... .— 3.9%— 1.7% Shipments from aforesaid Yards...........— 8.2 + 1.9 Production and Distribution: Sales by mfrs. and wholesalers............. —11.4 — 0.2 Department store sales..........................+ 0.8 + 0.5 Car loadings........................................... — 4.4 +- 14.6 Building and Construction: Bldg. permits, incl. repairs j Q^™ber + 43J Value construction contracts awarded.. +12.7 + 46.5 Miscellaneous: ~ / Number............ —27.3 — 36.0 Commercial failures j Liabilities.......+311.4 +150.0 Consumption of electricity.................... + 2.5 + 1 4 . 0 Debits to individual accounts............... — 6.0 + 3.3 Member Banks (24): May 10, ’39, comp, with Apr. 1 2 , ’39 May 1 1 , ’38 Gross deposits........................................— 1.6%+- 8.8% Loans...................................................... + 1.3 + 6.2 Investments........................................... +- 1.5 + 10.3 OMMERCE and industry in the Eighth Dis trict in April and the first half of May under went no marked changes as contrasted with the similar period immediately preceding. Such variations as occurred were traceable in large meas ure to seasonal influences, and as a whole activities were measurably above levels obtaining at the same time a year ago. Production receded slightly in April from March, but decreases were by no means universal, some lines continuing the upward trends which began last winter. Distribution of merchan dise, as indicated by car loadings of railroads oper ating in the district and statistics of manufacturers and merchants available to this bank, was well sus tained, despite the handicap of a late spring which restricted the movement through retail channels of certain seasonal goods, notably apparel, boots and shoes and groceries. C While conservative buying of both manufactured goods and raw materials continues the rule, there was more of a disposition in many quarters to pro vide for future needs, and throughout the business community there were evidences of greater confi dence than at any time since the upward swing in business began in the late summer of last year. In ventories continued the downward trend of earlier months this year, and in numerous instances are at levels where replenishment cannot much longer be delayed. This is true particularly of raw materials held by durable goods industries, which have sub stantially reduced stocks acquired last year. April production of bituminous coal in this area decreased sharply from March, and was also much Page 2 smaller than a year ago. In both comparisons the decline in output was attributable to the closing of mines incident to the labor dispute in the Appalach ian region. In all fields of this district reopening of mines became general at mid-May and produc tion by the end of the month is expected to be close to normal. Included in favorable developments during April wras a notable increase in building activities, as re flected in permits issued and actual construction contracts let, the latter reaching the highest point since last January. In line with the improved build ing situation, production and shipments of building materials expanded in more than the seasonal amount. Output of lumber increased from March to April and was measurably greater than a year ago. In states of this district production of Port land cement in March, the latest available figures, was 20 per cent greater than for the same month in 1938. Increased activities were reported at glass, fire clay, and paint factories. April sales of plumb ing and heating supplies and accessories were 8 per cent and 9 per cent greater, respectively, than a month and a year earlier. Retail trade in April, as reflected by department store sales in the chief cities, was moderately higher than in March and a year ago, and cumula tive total for the first four months was larger by 2 per cent than in the comparable period in 1938. Stimulated by spring farm operations and the sub stantial volume of Government benefit payments to farmers, rural retail sales in April, as reported by the U. S. Department of Commerce, were 5 per cent and 11 per cent greater, respectively, than a month and a year earlier. Owing to the late spring, preparations for and planting of crops are generally from two to three weeks in arrears of the seasonal schedule. Frequent rains during April and early May made fields un workable, while low temperatures retarded develop ment of all vegetation. Withal agricultural pros pects as a w'hole in this district are the most prom ising in a number of years. Prices of farm prod ucts fluctuated in minor degree only during April, but at mid-May corn and cotton prices advanced sharply to the highest levels of the season. Commercial failures in the Eighth Federal Re serve District in April, according to Dun and Bradstreet, numbered 32, involving liabilities of $1,659,000, which compares with 44 defaults with liabilities of $412,000 in March and 50 insolvencies for a total of $678,000 in April, 1938. DETAILED SURVEY OF DISTRICT M A N U F A C T U R IN G AND Lines of Commodities Data furnished b y Bureau of Census, U. S. Dept, of Commerce. Boots and Shoes........................................... Drugs and Chem icals................................. D ry G ood s.................................................... Electrical Supplies....................................... Furniture........................................................ Groceries....................................................... Hardware...................................................... Plumbing Supplies........................................ Tobacco and its Products.......................... Miscellaneous................................................ W H O L E S A L IN G Net Sales April, 1939 compared with Mar., ’39 Apr. ’38 — 12.7% —14.5 —21.1 — 6.3 — 2.6 —11.4 — 9.6 + 9.3 — 1.4 — 2.9 -1 6 .0 % + 3.0 — 1.4 +13.7 + 5.2 — 2.8 + 5.4 + 8.0 + 4.4 +32.5 Stocks Apr. 30, 1939 comp, with Apr. 30, 1938 % — — — — — — — — 6.9 7.1 1.6 1.4 9.8 6.3 1.7 0.1 Decreases from March to April shown in the above table were in the main seasonal in character, but in the case of dry goods, boots and shoes and groceries, were somewhat greater than average. This was accounted for in part by the early Easter date, which had the effect of abnormally swelling March sales. Unseasonably cool weather through out April also tended to hold down volume in cer tain lines. Since the first of May there has been a noticeable pickup in ordering of drugs and chem icals, groceries, dry goods and some other lines, reflecting more seasonable weather and improve ment in general business conditions. Collections in April were reported considerably better than a year ago, and compared favorably with March. Automobiles— Combined passenger car, truck and taxicab production in the United States in April totaled 337,372 against 371,940 in March and 219,314 in April, 1938. Iron and Steel Products— Tapering off in certain seasonal requirements, together with lessened new demands from some important consuming groups, were reflected in a further moderate recession in activities in the iron and steel industry in this area as contrasted with the year’s high levels of Febru ary and early March. The slowing down, however, was by no means general, operations in some branches having maintained or slightly bettered the rate attained earlier in the year. In all lines investi gated new orders placed were on an immediate re quirement basis, there being no disposition any where to provide against future needs. Shipments and the melt of pig iron in April were about on a parity with March, and have shown little change during the first half of May. New ordering of pig iron and purchasing of scrap, however, have receded quite noticeably since the last week of April. Shipments of metallurgical coke have made a better showing than in the case of other raw mate rials, owing principally to the desire on the part of melters to provide against possible interference with the movement later on. Steel ingot production at mills in this area at mid-May was at 39 per cent of capacity, as against 41.4 per cent a month earlier and 33.3 per cent a year ago. Operations at stove foundries increased season ally in late April and continued upward through the first half of May. Steady operations were reported at farm implement plants, with the exception of one, which has closed down until mid-June for remodeling and repairs. Generally bars, sheet, plates, strip and other flat rolled materials were reported moving slowly, an exception being tin plate and reinforcing concrete bars, which continue relatively active. Gains in building construction were reflected in a broadening in demand for a variety of steel products. Jobbing and warehouse interests report April volume slightly below March. Pig iron production for the entire country in April, according to the magazine “ Steer’, totaled 2,063,080 tons, as against 2,393,255 tons in March and 1,388,008 tons in April, 1938. The daily average output in April was the smallest since October last year. Steel ingot production in the United States in April amounted to 2,986,985 tons, against 3,396,021 tons in March and 1,919,042 tons in April, 1938. MINING AND OIL Production of bituminous coal for the entire country during April was less than one-third as large as in March, and about one-half smaller than in April, 1938. The sharp decreases in both com parisons were attributable to cessation of production in the Appalachian region. In this general area output was relatively high, especially during the final week of April, when there was a sudden spurt of activity at all operating mines. According to the National Bituminous Coal Commission, out put of soft coal for the entire country in April totaled 10,747,000 tons, as against 35,290,000 tons in March and 21,671,000 tons in April, 1938. The series previously published in this Review, showing per centage changes in production in Eighth District fields, was interrupted by absence of statistics cov ering the month of April. April output of Illinois mines was 3,427,278 tons, which compares with 4,022,967 tons in March and 2,167,039 tons in April, 1938. There were 106 mines in operation during April, with 29,098 men on pay rolls, as against 116 active mines and 31,373 opera tives in March. Petroleum— March output of crude oil in states of the Eighth District was 16.9 per cent more than in February and 120.8 per cent greater than in Page 3 March, 1938. Cumulative total for the first three months this year was 123.5 per cent in excess of the corresponding period in 1938. Stocks on April 1 were 0.9 per cent and 3.4 per cent greater, respec tively, than a month and a year earlier. Detailed production and stocks by states are given in the following table: Production ------------------------------Mar., Feb., Mar., 1939 1939 1938 (In thousands of barrels) Arkansas................. Illinois..................... Indiana.................... Kentucky................ Stocks C u m u l a t i v e ------------------------------------Mar., Mar., 1939 1938 1939 1938 1,679 5,380 59 437 1,562 1,330 73 457 7,555 Totals.................. 1,483 4,542 59 380 6,464 3,422 4,755 14,368 175 1,337 4,183 3,566 209 1,274 9,232 20,635 2,279 2,659 11,918 10,998 3,192 3,271 1,138 998 18,527 17,926 R E TA IL TRADE Department Stores—The trend of retail trade in the Eighth District, as reflected in statistics of de partment stores in the principal cities which report to this bank, is shown in the following comparative statement: Stocks on Hand Net Sales Stock Turnover April, 1939 4 mos. 1939 Apr. 30,1939 Jan. 1, to compared with to same comp, with Apr. 30, Mar., 1939 Apr., 19M period 1938 Apr. 30,1938 1939 1938 — 9.2% + 1-4% + 2.1% Ft. Smith, Ark. ... Little Rock, Ark... + 1.7 + 4.7 + 9.1 Louisville, K y ....... — 0.1 — 1.5 + 4.7 Memphis, Tenn. . .. + 4.2 + 5.4 + 1.9 Pine Bluff, Ark. ... +13.0 +17.2 + 2.4 — 2.9 Quincy, 111............. + 8.2 + 3.8 — 0.7 St. Louis, Mo........ — 0.3 + 1.0 Springfield, Mo. . .. —10.9* — 0.6 + 5.3 All Other Cities__ 6.8 + 5.1 +13.3 + 8th F. R. District.. + 2.0 + 0.5 + 0.8 *The decrease shown under a year ago was due to a tended to raise sales volume in the earlier period. + 3.8% — 1.6 .8 6 1 .00 .85 1.27 1.20 — 7.9 .95 — 4.7 1.08 .86 + 0.4 —17.3 1.19 1.48 1.34 — 5.9 .97 —58 1.03 —14.6 1.32 — 5.6 special situation which Percentage of accounts and notes receivable outstanding April 1, 1939, collected during April, by cities: Installment Accounts Forth Smith... Little Rock__ Louisville_____ Memphis......... % 17.6 14.8 27.9 Excl. Instal. Accounts 39.4 36.7 48.3 41.8 Installment Accounts Quincy...................... % St. Louis......... 21.4 Other Cities... 15.6 8th F. R. Dist. 20.6 Excl. Instal. Accounts 49.5 57.8 44.7 50.8 Specialty Stores— April results in men’s furnish ings and boot and shoe lines are shown in the following table: Stocks on Hand Net Sales Stock Turnover 4 mos. 1939 Apr. 30,1939 Jan. 1, to April, 1939 compared with to same comp, with Apr. 30, Mar., 1939 Apr., 1938 period 1938 Apr. 30,1938 1939 1938 Men’s Furnishings... Boots and Shoes. . . . +14.5 % +13.5 - 4 .1 % -10.9 — 0.03% — 0.1 - 8.7% — 3.7 .85 .74 2.25 2.22 Percentage of accounts and notes receivable outstanding April 1, 1939, collected during A p ril: Men’s Furnishings....................36.8% Boots and Shoes......................39.1% TR AN SPO RTATIO N Freight traffic of railroads operating in this dis trict, according to officials of the reporting lines, continued during April and the first week in May to run well above the volume recorded during the cor Page 4 responding period a year ago. The movement of coal was in relatively greater volume than on east ern railroads, as production at bituminous mines in this area not affected by the labor dispute was mate rially increased. In recent weeks loadings of mis cellaneous freight— the most significant class with regard to the general freight movement— have av eraged well above a year ago. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 77,911 loads in April, which compares with 81,497 loads in March and 67,958 loads in April, 1938. During the first nine days of May the interchange amounted to 23,759 loads, as against 22,370 loads during the corresponding period in April and 21,102 loads during the first nine days of May, 1938. Passenger traffic of the reporting roads in April was unchanged in number of passengers carried and 2.5 per cent greater in revenue as com pared with the same month a year ago. For the entire country loadings of revenue freight for the first 17 weeks this year, or to April 29, totaled 9,822,512 cars, as against 9,285,152 cars for the corresponding period in 1938 and 12,176,978 cars in 1937. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in April was 169,400 tons, against 136,450 tons in March and 186,495 tons in April, 1938; cumulative tonnage for the first four months this year was 613,467 tons, against 705,084 tons for the corre sponding period in 1938. AGRICULTURE Combined receipts from the sale of principal farm products and Government benefit payments to farmers in states including the Eighth District dur ing the period January-March, 1937, 1938 and 1939, and during March, 1938 and 1939, are given in the following table: Cumulative for 3 months March 1938 1939 1938 1937 $20,051 44,815 17,348 . . . 7,490 7,871 ... 9,541 ... 5,866 $19,070 33,018 15,074 15,861 11,965 7,047 7,537 $ 59,025 127,256 50,893 44,718 28,422 30,398 15,460 $ 56,821 102,770 46,767 60,376 35,992 29,253 25,095 $ 69,311 116,149 50,233 61,008 38,721 36,468 26,108 . $112,982 of dollars) $109,572 $356,172 $357,074 $397,998 1939 General Farming Conditions— Taken as a whole, the season to mid-May in the Eighth Federal Re serve District has been adverse to progress of agri cultural operations, preparations for and planting of spring crops being from two to three weeks behind the usual seasonal schedule. During April and the first half of May excessive rains delayed field work and low temperatures militated against growth and development of all descriptions of vege- tation. In addition to bolding back work, the wet weather accounted for considerable actual damage, particularly in the lowlands along rivers and creeks, where overflows necessitated replanting of cotton, potatoes, corn and certain other crops. On the other hand, the abundant moisture proved very beneficial to pastures and fall planted grains, the condition of which has undergone notable improve ment since the late winter. In all states of the dis trict the condition of pastures as of May 1, accord ing to the U. S. Department of Agriculture, was above the 10-year (1928-1937) average. Notwithstanding the handicap of a late spring, crop prospects generally through the district are the most promising in a number of years, with indi cations for yields adequate for all requirements. Ample time remains for completing the intended planting of corn, cotton and other productions where such operations have been delayed. The farm labor situation developed no change worthy of note as contrasted with the preceding thirty days. The general level of farm products prices showed little variation between April 8 and May 6, but con tinued measurably below the corresponding periods in recent years. As of the week ended May 6, the farm products group of the U. S. Bureau of Labor Statistics index stood at 63.6 per cent of the 1926 average, which compares with 63.8 per cent on April 8; 67.4 per cent on May 8, 1938; 91.0 per cent on May 8, 1937; 76.2 per cent on May 9, 1936, and 80.8 per cent on May 11, 1935. Cotton—Taken as a whole, weather conditions have been less favorable this season than last for planting the new cotton crop, and this work is from ten days to two weeks in arrears of the usual sea sonal schedule. Rains have delayed field work, and temperatures were too low to permit rapid advance ment of the crop. Some replanting has been neces sitated by flood conditions in river and creek bot tom lands. According to the National Fertilizer Association, sales of fertilizer tags in states includ ing the Eighth District during the first four months this year were 2.2 per cent and 12.6 per cent smaller, respectively, than in the corresponding periods a year and two years earlier. Reflecting a more active demand for spot cotton from domestic mills, prices turned upward, advanc ing during the second week in May to the highest levels of the season. Trading was limited by scant offerings, for while stocks are of record size, “ free” cotton is reported to be the second smallest in vol ume at this particular time in fifteen years, the bal ance being in Government loans. In the St. Louis market the middling grade ranged from 7.90^ to 8.70$ per pound between April 15 and May 15, closing at 8.60$ on the latter date, which compares with 7.70$ on April 15 and 8$ on May 16, 1938. Fruits and Vegetables— Prospects for fruit in this district are above average. Frosts in early April caused spotted damage to tree fruits, particu larly to peaches, early apples and cherries. Gen erally speaking, however, the frost damage has been found to be much less severe than anticipated. In Arkansas and Mississippi, the only states for which an official estimate has been made, the combined peach crop is placed at 3,920,000 bushels, against 3,512,000 bushels last year and the 10-year (19281937) average of 2,451,000 bushels. Tree fruits came through the winter wich a minimum of dam age. Acreages of commercial vegetable crops this year are expected to be smaller than last, because of the heavy carryover of canned products. The con dition of early potatoes in the south as of May 1 was slightly below a year earlier but about a point higher than the average for that date. Livestock— Through April and early May the general condition of livestock maintained the high levels which marked the preceding eight or ten months. Abundant feed and forage crops, coupled with improvement in pasturage, tended to make for an unusually healthy condition among herds. Stocks of tame hay on farms as of May 1 were about the largest of record, being 23 per cent greater than a year ago and 87 per cent above the 10-year average. Weather conditions were fairly favorable for early lambs in Missouri and other early lambing areas in the Corn Belt states. Marketings of new crop lambs are expected to be at least as early as last year. In states of the Eighth District milk production per cow on May 1 was 4.8 per cent less than in 1938 but 2.8 per cent above the 10-year average. • Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: Receipts A p r. 1939 C attle and C a lv e s............ H o g s ........................................ Horses and M ules.............. Sheep....................................... T o ta ls ................................. 84,253 198,806 2,339 38,500 323,898 M ar., 1939 84,943 218,725 3,0 69 30,288 337,025 Shipments A p r., 1938 A p r., 1939 87 ,000 188,121 2,409 52,014 49,297 49,361 53,254 120,121 138,511 107,764 1,891 3,118 2,412 10,510 7,168 14,984 329,544 181,819 M ar., 1939 198,158 A p r., 1938 178,414 Tobacco—As of mid-May tobacco plants were re ported to be smaller than usual at that time owing to retarded growth caused by cold weather. The plants, however, are healthy but in need of hot weather for further satisfactory development. Planting intentions are still uncertain, but generally Government quotas will be observed. Page 5 According to the final report of the U. S. Depart ment of Agriculture, gross sales of burley tobacco from the 1938 crop totaled approximately 351,500.000 pounds at an average of $19.01 per cwt. Total gross sales from the 1937 crop reached slight ly more than 419,000,000 pounds at an average of $20.28 per cwt. First hand sales of dark air-cured tobacco in the 1938-1939 season totaled about 32,000,000 pounds at an average of $7.99 per cwt., against 46,500,000 pounds last season at an average of $8.16 per cwt. In the one sucker area, total first hand sales in the 1938-1939 season approximated 15,500,000 pounds at an average of $5.83 per cwt., as against 24.750.000 pounds at an average of $7.38 per cwt. in the preceding season. On the three type Green River markets, first hand sales totaled about 14,500,000 pounds at an average of $9.60 per cwt., compared with about 19,000,000 pounds at an average of $9.04 per cwt. in the 19371938 season. Stocks of leaf tobacco owned by dealers and manufacturers in the United States and Puerto Rico on April 1, 1939, amounted to 2,362,890,000 pounds, compared with 2,433,592,000 pounds on April 1, 1938. Total stocks increased only about 20,000,000 pounds between January 1 and April 1 this year, whereas total stocks increased over 211,000,000 pounds during the same period last year. Winter Wheat— In its report based on conditions as of May 1, the U. S. Department of Agriculture estimated production of winter wheat in states of the Eighth District at 90,189,000 bushels, which compares with 117,879,000 bushels raised in 1938 and the 10-year (1928-1937) average of 94,640,000 bushels. Generally the crop is in good condition, though there are scattered reports of rank growth caused by excessive moisture, with consequent weakening of stems. In the second week in May wheat prices advanced to the highest point since last June. WHISKEY There are at present 27 distilleries in operation out of 59 in Kentucky, as compared with 33 in production a month earlier. This reduction is sea sonal in character and reflects completion of ‘‘spring runs” of whiskey. It is reported through trade sources that bulk whiskey still commands an uncertain and cheap market. On the other hand, the market is more stable and less price cutting is practiced in quality product case goods three and four years old. Whis Page 6 key firms selling established brands are reported doing increased business at smaller margins of profit. In the main distillers hold top-heavy inven tories of cheap blends and young whiskies. COMMODITY PRICES Range of prices in the St. Louis market between April 15, 1939, and May 15, 1939, with closing quo tations on the latter date and on May 16, 1938, fol lows : Close H ig h L ow W h eat * M a y .................... . per b u .. . . .$ .7 6 ^ *J uly..................... •71M “ *S ep t.................... •71H N o . 2 red winter “ •8 4 ^ N o . 2 hard “ •78 H Corn “ * M a y .................... ■ 47Vs *J u ly..................... ASVs “ *S ep t.................... ASVs “ N o . 2 m ix e d . . ,55M “ N o . 2 w h it e ... .59 O ats “ * M a y .................... •34^8 *J u ly..................... •32^8 “ *S ep t.................... • 30M u N o . 2 w h it e ... .37 Flour Soft patent per b b l . . . . 5.6 5 “ Spring “ 5.8 5 M iddling C otton , .per l b . .. . .0870 H ogs on H oof . . per c w t . . 7.11 *N om in al quotations. M ay 15, 1939 $ M a y 16, 1938 .6 4 % •763^ .73 .75 ■71 H ■71% .83 .78 A sy2 .45 .45M .48 MV2 ■ 6K 4 .48 A8% .51 .59 .58 .5 9 % .6 0 y 8 .58 .59 .29 .2 6 % •26M .33 ■ H 32 •31M .2 9 % .36 • 8^ 2 •26M .26 .31 3 .9 0 5.2 5 .0790 6.6 7 4 .5 0 @ 5 . 6 5 5 55 @ 5 . 8 5 .0860 6.7 6 4 .1 5 @ 4 . 4 0 5.7 5 @ 6.15 .0800 8 .1 4 $ .65^8 $ .8 1 H ■ 77V2 •78 Yt .82 .83 BUILDING The dollar value of permits issued for new con struction in the five largest cities of the district in April was 3.4 per cent less than in March and 58.7 per cent greater than in April, 1938. According to statistics compiled by the F. W. Dodge Corpora tion, construction contracts let in the Eighth Dis trict in April amounted to $21,069,000 which com pares with $18,696,000 in March and $14,384,000 in April, 1938. Building figures for April follo w : N e w Construction (C ost in thousands) P erm its 1939 1938 Repairs, etc. C ost 1939 1938 E v a n sv ille . . . . 23 L ittle R o c k .. . 25 Louisville 104 M em phis 297 S t. Louis 265 16 24 99 209 284 A p r. T o t a ls . . . 714 M ar. “ . . . 918 F eb. “ . . . 571 632 706 372 $ 71 67 221 516 907 1,782 1,845 2,582 -& 1 P erm its 1939 1938 C ost 1939 1938 55 66 215 313 474 136 92 60 196 220 128 92 69 291 210 S 62 43 31 110 235 $ 37 17 34 147 215 1,123 1,494 785 704 668 365 790 745 519 481 540 256 450 380 364 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 2.5 per cent greater than in March and 14.0 per cent more than in April, 1938. Detailed figures fo llo w : (K . W . H . in th o u s.) N o . of A p r., C u stom 1939 ers K .W . H . E v a n sv ille ............. L ittle R o c k .......... L o u isv ille............... M e m p h is................ Pine B lu f f .............. S t. L o u is................. 40 33 82 31 20 209 T o t a ls .................. 415 3,303 1,861 8,1 26 2,2 96 899 24,259 40,744 M a r., 1939 K .W .H . A p r., 1938 K . W .H . 3,261 2,0 16 8 ,3 90 2,2 34 796 2 3 ,050 21,712 39,747 A pril, 1939 com pared w ith M a r., 1939 A p r., 1938 2,195 + 1 .3 % 1,773 — 7 .7 7,413 — 3 .1 1,958 + 2 .8 678 + 1 2 .9 + 5 .2 35,729 + 2 .5 + 5 0 .5 % + 5 .0 + 9 .6 + 1 7 .3 + 3 2 .6 + 1 1 .7 + 1 4 .0 BANKING AND FINANCE The banking- and financial situation in the Eighth District during the past thirty days has been marked by a moderate expansion in demand for credit, noticeable at both city and country banks, but more pronounced at the latter. Otherwise trends which had been in effect during the preced ing several months remained virtually unchanged. Reflecting generally good collections by mercantile and manufacturing interests, liquidation of current loans was in considerable volume, but new commit ments and renewals at the large city banks exceeded settlements by a fair margin. Despite lateness of the spring, there was a notice able increase in demand for funds to finance sea sonal agricultural operations, particularly in the south. As has been the case since last winter, in quiries for loans to purchase and condition live stock for market are still in considerable volume. The amount of bankers’ dollar acceptances out standing in this district continued to recede, and as of May 1 were 10 per cent and 36 per cent smaller, respectively, than a month and a year earlier. rates charged were as follow s: Customers prime commercial paper, 1% to 5 ^ per cent; collateral loans, 2 to 5% per cent; loans secured by warehouse receipts, 2 to 5 per cent, and interbank loans, 2 to 5 per cent. Federal Reserve Operations— The volume of the major operations of the Federal Reserve Bank of St. Louis, during April, 1939, is indicated below: Pieces (Incl. Louisville, M em phis, L ittle R o ck branches) Collections (non-cash item s) h andled. Transfers of funds........................................... Rediscounts, advances and c o m m itm e n ts.................... N ew issues, redemptions, and exchan es of secur ities as fiscal agent of U . S. G o v ’t ., e t c .................... B ills and securities in custody— coupons clipped. . . . A m ounts 5,4 53,8 27 118,436 4,3 20 8,2 56,7 12 7,4 31,5 00 6 $ 1 ,042 ,67 0,40 0 23 ,853,148 256,667,789 27 ,588 ,77 8 822,138 196,100 11,480 11,180 15,137,897 Changes in the principal assets and liabilities of this bank appear in the following table: M a y 19, 1939 Apr. 19, 1939 M a y 19, 1938 $ (In thousands of dollars) $ $ Other advances and rediscounts.............. B ills bought (including participations). U . S . securities.................................................. 20 85 2 124,174 205 2 119,220 Statement of the principal resource and liability items of the reporting member banks follows: (In thousands of dollars) May 10, 1939 Apr. 12, 1939 May 11, 1938 $293,387 Loans—total............................................................... $3U,556 $307,476 Commercial, industrial, and agricultural........... 187,731 184,270 173,022 Open market paper............................................... 2,747 2,817 9,399 Loans to brokers and dealers.............................. 4,978 4,790 5,101 Other loans to purchase or carry securities........ 13,163 11,719 12,471 Real Estate loans................................................. 49,050 49,540 46,980 Loans to banks..................................................... 3,784 3,600 7,289 Other loans........................................................... 50,103 50,740 39,125 Investments—total.................................................... 4114,902 398,856 367,155 Treasury bills....................................................... 41,830 26,999 ) Treasury notes..................................................... 47,871 54,113 [• 218,855 U. S. bonds.......................................................... 151,972 156,096 ) Obligations guaranteed by U. S. Gov’t .............. 64,641 62,448 54,608 Other securities.................................................... 98,588 99,200 93,692 Gross deposits......................................................... 976,510 992,410 897,606 Demand deposits................................................. 785,226 802,223 710,279 Time deposits...................................................... 191,284 190,187 187,327 Borrowings................................................................................................................... Above figures are for 24 member banks in St. Louis, Louisville, Memphis, Little Rock and Evansville. Their resources comprise approximately 62.0% of the resources of all member banks in this district. The aggregate amount of savings deposits held by selected member banks on May 3 was 0.6 per cent larger than on April 5 and 3.1 per cent in ex cess of the total on May 4, 1938. Interest rates remained unchanged at or about the record low levels of recent months. At down town St. Louis banks as of the week ended May 15, 124,252 124,281 119,427 336,091 275,154 180,758 329,228 268,362 179,221 317,005 255,941 175,307 Industrial com m itm ents under Sec. 13b. Member Banks— Between April 12 and May 10, total loans and investments of reporting member banks in the principal cities increased 1.4 per cent and on the latter date were 8.5 per cent higher than a year ago. Gross deposits fluctuated rather broad ly during the four-week period and at its close were 1.6 per cent lower, but still about 8.8 per cent greater than a year ago. T o ta l earnings assets............................................... 20 56 2 124,174 599 599 508 R a tio of reserve to deposit and F . R . N o te liab ilities........................... 7 3 .7 % 7 3 .6 % 7 3 .5 % 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 institutions under Section 13b: (a) On portion for which such institution is obligated.......... 3H % per annum (b) On remaining porticai............................................................ 4 % per annum (4) Commitments not exceeding six months to member banks, nonmember banks and other financing institu tions, to rediscount, purchase, or make advances, under Section 13b........................................................................... K % flat (5) Advances to established industrial or commercial (4 % to businesses, under Section 13b................................................ \ 5}4% per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured b y direct obliga tions of United States under Section 13......................................4 % per annum On May 1 the Chemical Bank, Sweet Springs, Mo., became a member of the System, making three admissions of State banks since March 16 this year. Debits to Individual Accounts—The following comparative table of debits to individual accounts reflects spending trends in this district: (In thousands of dollars) A p r., 1939 E ast S t. Louis and N a t ’l Stock Y a rd s, 111.. $ 31,747 E l Dorado, A r k ........ 5,149 29,406 E vansville, I n d ......... Fort S m ith , A r k ___ 10,499 4,8 53 Greenville, M iss. . .. Helena, A r k ................ 1,489 L ittle R o ck , A r k ___ 34,891 137,502 Louisville, K y ........... 107,452 M em phis, T e n n ......... 7,285 Owensboro, K y ........ Pine B luff, A r k ......... 6,806 8,335 526,483 S t. Louis, M o ............. Sedalia, M o ................. 1,889 12,796 Springfield, M o ......... Texarkana, A rk .-Tex. 7,079 T o t a ls ........................ (Completed May 24, 1939) $933,661 A p r., 1938 M ar., 1939 A p r., 1939 com p, w ith M ar., 1939 A p r .,1938 $ 33,447 5,542 28,555 11,147 5,1 77 1,735 38,583 152,577 112,486 7,069 9,608 8,125 555,334 2,093 13,377 8,219 $ 28,916 5,805 26,620 10,480 4,131 1,435 32,237 137,035 102,579 5,074 7,647 7,353 513,450 1,783 12,636 6,476 - 5 .1 % — 7.1 3 .0 — 5 .8 — 6 .3 — 14.2 — 9 .6 — 9 .9 — 4 .5 + 3 .1 — 29 .2 + 2 .6 — 5 .2 — 9 .7 — 4 .3 — 13.9 + 9 .8 % — 11.3 + 1 0 .5 + 0 .2 + 1 7 .5 + 3 .8 + 8 .2 + 0 .3 + 4 .8 + 4 3 .6 — 11.0 + 1 3 .4 + 2 .5 + 5 .9 + 1.3 + 9 .3 $ 993,074 $ 903,657 — 6 .0 + 3 .3 Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS B Y BOARD OF GOVERNORS OF F E D E R A L R ESER VE SY S TE M IN D U S T R IA L P R O D U C T IO N Index of physical volume of production, adjusted for seasonal vari ation, 1923-1925 average = 100. By months, January, 1934, to April, 1939. Latest figure, 92. FACTO RY E M P L O Y M E N T A N D PA Y R O LL S Indexes of number employed and payrolls, without adjustment for seasonal variation, 1923-1925 average = 100. By months, January, 1934, to April, 1939. Latest figures, employment 91.3, payrolls 85. D EPARTM ENT STO RE SALES AND STOCKS Indexes of value of sales and stocks, adjusted for seasonal vari ation, 1923-1925 average = 100. By months, January, 1934, to April, 1939. Latest figures, sales 88, stocks 66. M O N E Y R A T E S IN N E W Y O R K C IT Y Volume of industrial production declined sharply in April reflecting chiefly shutdowns at bituminous coal mines and reduction in activity at textile mills. Retail purchases by consumers were maintained. Production—In April the Board’s seasonally adjusted index of out put at factories and mines was at 92 per cent of the 1923-1925 average, compared with 98 in March and 77 a year ago. In the steel industry production declined in April and the first three weeks of May but in the fourth week ingot output increased to 48% per cent of capacity, about the rate prevailing a month earlier. Around the middle of May substantial concessions were made in prices of some types of steel and it is reported that a considerable volume of orders for steel was placed during this period. Automobile production in April was at about the same rate as in March, although there usually is some increase, and in May output declined owing in part to the fact that stocks of new cars were larger than is usual at this time of the year. Plate glass production decreased sharply in April following smaller declines earlier in the year. In the lumber industry output increased somewhat in April, while cement production, which had risen sharply in February and March, showed less than the usual increase. Textile production declined sharply in April, particularly at woolen mills, where output had been at a high level, and in the silk goods industry where further curtailment reflected in part recent high prices for raw silk. Output of shoes showed a de crease from the high level maintained during the first quarter of this year. At flour mills and sugar refineries activity increased further, while in most other non-durable goods lines changes in output were largely seasonal in character. Bituminous coal production was in small volume during April and the first half of May as most mines were closed pending settlement of contract negotiations between mine operators and workers. After the middle of M!ay agreements were reached at most mines and output began to increase rapidly. Production of anthracite, which had been reduced in March, increased sharply in April and crude petroleum pro duction rose further. In the first half of May anthracite production was maintained but petroleum output declined somewhat. Value of construction contracts awarded, according to the F. W. Dodge Corporation, was larger in April than in March, owing chiefly to a rise in awards for public projects. Contracts for private con struction showed little change in the aggregate as private residential contracts declined, contrary to seasonal tendency, while contracts for commercial, factory, and other private construction increased. In the first half of May awards for private work increased somewhat while the volume of public contracts declined. Employment— Employment in nonagricultural pursuits declined somewhat from the middle of March to the middle of April reflecting a sharp drop at bituminous coal mines offset in part by seasonal in creases in construction and trade. At factories the number employed showed little change while payrolls declined considerably because of fewer hours of work. Distribution—In April, distribution of commodities to consumers showed about the usual seasonal increase. The Board’s adjusted index of department store sales remained at 88 per cent of the 1923-1925 average, about the level that has prevailed since last autumn. Railroad freight-car loadings declined sharply owing mainly to a reduction in shipments of coal. Loadings of miscellaneous freight showed less than the usual seasonal rise. Commodity Prices—Prices of grains and cotton advanced from the middle of April to the third week of May and there were also increases in prices of silk, hides, and bituminous coal. Prices of copper and steel scrap, on the other hand, were reduced and substantial concessions were granted in prices of several leading steel products. Bank Credit—Total loans and investments at reporting member banks in 101 leading cities, which had increased in April, declined dur ing the first half of May. The decline was at New York City banks and reflected a reduction in loans to security brokers and dealers and redemption of obligations of New York state and city governments. After increasing substantially in April, demand deposits at banks in leading cities showed little change in the first half of May. Bank reserves increased further in May to a new high level. For weeks ending January 6, 1934, to May 20, 1939. Page 8 Money Rates—Prices of United States Government bonds and notes increased sharply during the last half of April and the first three weeks of May to new high levels. The average yield on long-term Treasury bonds declined from 2.34 per cent on April 11 to 2.13 per cent on May 22. Other money rates showed little change.
