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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Afternoon Papers of Nov ♦ 29, 1940 FEDERAL RESERVE BANK OF ST. LOUIS H IG H W A Y D E P T . PH OTO A u tu m n S cen c in a M is s o u r i C orn F ie ld . SUMMARY OF EIGHTH DI STR ICT Agriculture: 1939 A v. 1923-39 Estimated yield of 7 crops........................— 6.2%— 5.1% Oct., 1940 comp, w ith Livestock Sept., 1940 Oct., 1939 Receipts at National Stock Yards.......... + 19.6%+ 20.1% Shipments from aforesaid Yards............+ 6.9 + 11.7 Production and Distribution: Sales by mfrs. and wholesalers..............+ 2.6 + 5.1 Department store sales............................. + 7.1 + 8.2 Car loadings............................................... + 11.3 — 2.8 Building and Construction: • 1 . /N u m b er ... + 10.0 + 22.9 Bldg. permits, incl. repairs j Cost j__ 5 4 412 Value construction contracts awarded.. + 6.5 + 58.8 Miscellaneous: Commercial failures.-ji .LLdciu i aujM i t k s — 277 + 122.7 i i c a .......................... ./ Consumption of electricity........................+ 8.8 Debits to individual accounts..................+ 27.9 Life Insurance Sales................................. + 8.7 + 15.0 + 9.9 + 4.9 N ov. 13/4 0 comp, with Member Banks (24): Oct. 1 6 /4 0 N ov. 15/39 Gross deposits............................................. + 2.1%+ 6.4% Loans............................................................ + 3.3 + 5.1 Investments................................................. + 2.8 + 7.1 IG H T H D istrict industry and trade activity during October and the first half of November continued at an accelerated pace the expansion which marked the late spring and summ er months. W hile a very considerable part of the general increase was attributed to production and sale of commodities directly or indirectly for defense re quirements, the m ajor portion was accounted for by greater than usual advance in seasonal requirem ents for regular civilian consumption. According to both retail and wholesale m erchants, purchasing by the public is on a larger scale and includes a wider var iety and higher grade of goods than has been the case at this season in a num ber of years. The prin cipal reasons for this are notable improvement in the employment situation, generally good crop pros pects, and increased incomes from other sources. In many lines there was increasing evidence of buy ing for distant requirem ents, particularly of com modities on which m anufacturers’ deliveries are delayed or expected to be lengthened as a result of Government purchasing. Gains in October production and orders were most m arked in industries m anufacturing defense materials, notably iron and steel, textiles, chemicals, lumber, cement, glass and the general category of building materials. A num ber of establishm ents in these lines are operating at, or near capacity, and despite heavy current shipm ents, have backlogs of unfinished business sufficient to m aintain the pres ent rate well into next year. As of mid-November output of steel ingots in this area advanced to 87.5 E Page 2 per cent of capacity, the highest rate since July, 1937, and com paring w ith 82.5 per cent a month earlier and 81 per cent a year ago. Stim ulated by heavy demands and upward trend in prices, production of lead and zinc at district mines was m aintained at the recent high levels. Owing partly to the unusually mild fall which held down domestic heating requirem ents and the dis position of industrial users to draw on reserves accumulated earlier in the year in anticipation of minimum prices effective October 1, production of bitum inous coal receded sharply in October. U tilities companies in the principal manufac turing centers report consumption of electricity by industrial users in October as being 8.8 per cent greater than in September and 15.0 per cent above th at of October, 1939. Prelim inary reports indicate an increase in shoe production in the district during October of approxim ately 12 per cent over the pre ceding month. T he increase reflects in part heavy orders placed by the Government for service shoes. U nseasonably mild w eather during October mil itated against the movement of certain seasonable m erchandise through both retail and wholesale channels. W ithal, sales of departm ent stores in the principal cities in October were 7.1 per cent and 8.2 per cent larger, respectively, than a m onth and a year earlier. Cumulative total for the first ten months exceeded th at of the same interval in 1939 by 6.7 per cent. In the first week of November sales were 9.8 per cent in excess of those for the corresponding week last year. Combined sales of all wholesaling and jobbing lines in the district reporting to the Bureau of the Census were 2.6 per cent larger than in September and 5.1 per cent above the October, 1939, total. Retail sales of automobiles in the St. Louis area increased sharply in October. According to the report of the U. S. D epartm ent of A griculture, based on conditions as of November 1, Eighth D istrict crop prospects improved further in October. D ry w eather and mild tem peratures were favorable for m aturing and harvesting late crops. Production of m ost of the principal food crops appears ample, and abundant feed and forage crops are also in prospect. Commercial failures in the E ighth D istrict in October, according to Dun and B radstreet, num bered 39, with liabilities of $481,000, which com pares w ith 36 defaults in Septem ber involving lia bilities of $665,000, and 38 insolvencies for a total of $216,000 in October, 1939. D ET A I L E D S UR VE Y OF D IS TR IC T M A N U F A C T U R IN G A N D W H O L E S A L IN G L ines of Commodities N et Sales October, 1940 D ata furnished b y Bureau of Census, compared with U . S. D ept, of Commerce. Sept., ’40 O ct., ’39 Autom otive Su pplies................................ B oots and S h o es........................................ D rugs and C hem icals.............................. Dry G oods................................................... Electrical S u pplies.............................. Furniture..................................................... G roceries....................................................... H ardw are..................................................... Plum bing Su pplies.................................. Tobacco and its P ro d u cts....................... M iscellaneous.............................................. + 8.3% — 6.8 + 7.1 — 4.0 + 2 1 .0 — 3.6 + 15.1 + 13.3 + 15.7 + 6.9 -0 - —12.8% + 6.9 — |— 6.4 — 4.5 + 17.0 — 7.8 + 7.2 + 28.3 + 29.9 + 10.7 — 3.8 Stocks Oct. 31, 1940 comp, with Oct. 31, 1939 + 4.1% + 2 5 .4 — 4.8 + 1.3 — 2.0 — 0.2 + 4 6 .2 +25.9* + 3.4 Autom obiles— Combined passenger car, truck and taxicab production in the U nited States in October totaled 493,223, as against 269,108 in Septem ber and 313,377 in October, 1939. Iron and Steel Products — Reflecting the usual seasonal demands of regular consumers of steel and the heavy im pact of requirem ents for the national defense program , activities in the iron and steel industry in this area underw ent further notable expansion during October and the first half of November. T he im provem ent extended to virtually all branches of the industry, and both producers and distributors reported demands more diversified and extended than has been the case in a num ber of years. Steel mills and foundries report orders and inquiries from other sections of the country which rarely, if ever, have dealt in this m arket. Steel producers report further additions to back logs of unfilled orders, despite higher production schedules and extraordinary heavy shipm ents. Deliv ery dates on a num ber of steel items, notably shapes, plates, strip and certain descriptions of sheets, con tinue to lengthen, though at a m oderate rate. O per ations at structural steel fabricating plants, which in the past rarely exceeded 50 per cent of capacity, are now at from 70 to 75 per cent. T he rise is due to a rush of orders for defense program plants and other construction work. As of m id-Novem ber ingot production at steel mills in the area was at 87.5 per cent of capacity, the highest since July, 1937, and com paring w ith 82.5 per cent and 81 per cent a m onth and a year earlier, respectively. T he m elt and deliveries of pig iron in the district during October reached the high est totals for any m onth this year, and reports cov ering the first half of Novem ber indicate a daily average rate equal to or a shade better than in the preceding m onth. Shipm ents of iron and steel scrap also reached the highest point of the year. October sales of steel warehouse and jobbing interests were reported larger by 8 per cent and 12 per cent, respec tively, than a m onth and a year earlier. The increases were due in p art to delayed mill deliveries to con sumers in urgent need of certain steel commodities. T here is a general disposition on the part of the several steel consum ing groups to m aintain inven tories on a basis of three to four m onths require ments, and a considerable p art of current buying is for delivery in the first quarter of 1941 at prices then prevailing. So far as can be learned there has been practically no evidence of investm ent or spec ulative purchasing, and any such effort is being dis couraged by producers. T aking into consideration the unusual conditions, business in the industry is proceeding in orderly fashion. W hile prime con sideration is being given to defense requirem ents, regular custom er trade is being adequately served. October production of pig iron for the entire country, according to the m agazine “Steel,” totaled 4,384,194 tons, an all-time high record for the m onth, and com paring w ith 4,172,551 tons in Septem ber and 4,062,670 tons in October, 1939. Steel ingot out put in the U nited States also achieved a new high m onthly record in October, the total of 6,461,898 tons being nearly 10 per cent above Septem ber’s 5,895,232 tons and more than 5 per cent over the prior record of 6,147,783 tons in November, 1939. O utput in October, 1939, was 6,080,177 tons. M IN IN G A N D O IL Coal — Production of bitum inous coal receded further during October, and generally throughout the district consum ption for heating purposes was held to a minimum by the abnorm ally mild w eather. W hile industrial consum ption continued at high levels, much of the fuel burned was from inventories accum ulated earlier in the year. October output of soft coal in the U nited States totaled 38,300,000 tons, against 38,650,000 tons in Septem ber and 46,394,000 tons in October, 1939. Cum ulative tonnage for the first ten m onths was 372,295,000 tons, against 310,101,000 tons for the same tim e a year earlier. A t mines in this general area output during October was 0.8 per cent less than in Septem ber and 15.5 per cent less than in October, 1939. D uring the first ten m onths this year output was 3.5 per cent greater than for the like period a year ago. A t Illinois mines 3,723,842 tons were lifted in October, against 3,658,826 tons in September and 4,568,586 tons in October, 1939. There were 102 mines in operation in October, w ith 26,619 men on payrolls, as against 97 active mines and 25,290 operatives in September. Page 3 Petroleum — September output of crude oil in states of the Eighth District was 7.4 per cent less than in August and 9.2 per cent greater than in Sep tember, 1939. Cumulative total for the first nine months this year was 71.5 per cent in excess of the corresponding period in 1939. Stocks on September 30 were 2.8 per cent less and 3.1 per cent greater, respectively, than a month and a year earlier. D e tailed production and stocks by states are given in the following table: ________ P roduction (In thousands of barrels) Sept., 1940, A rkansas.............. 2,178 I llin o is ................ 10,925 Indiana................ 516 K e n tu c k y ........... 444 T o ta ls................ 14,0,63 A ug., 1940 Stocks Sept., 1939 2,222 1,874 12,075 10,443 450 141 445 423 15,192* 12,881 Cumulative s e pf. 30, Sept. 30, 1940 1939 1940 1939 19,306 14,938 115,550 62,747 3,077 794 3,893 4,217 141,826 82,696 2,048 1,884 13,869 13,881 3,453 3,312 1,596 1,257 20,966 20,334 RETAIL TRADE 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 comparative statem ent: gtocks S(ock ___________ N et Sales________ on H and October, 1940 10, mos. ’40 Oct. 31,’40 compared with to same comp, with Sept.,'40 O ct.,*39 period *39 Oct., 3 1 /3 9 Ft. Smith, A r k ... + 6.6% L ittle Rock, Ark. + 0.03 Louisville, Ky. . . + 1 2 .0 M emphis, Tenn. . + 1 7 .7 Pine Bluff, A rk.. + 4.7 Quincy, 111...............+ 1 8 .2 St. Louis, Mo. . . + 4.2 Springfield, Mo. . + 3 1 .1 A ll Other C itie s .. + 1 3 .8 8th F. R. D istrict + 7.1 + 2.9% + 7.0 + 1 4 .0 + 7.5 — 9.9 — 5.5 + 8.1 + 2 2 .8 + 3.1 + 8.2 + 1 0 .0 % + . 8.7 + 8.9 + 6.1 —- 0.1 — 0.2 + 6.1 + 1 5 .8 + 1 2 .5 + 6.7 — 4.6% — 7.6 — 6.4 + 1.5 + 1 0 .0 — 1.1 + 5.7 + 8.0 + 1 9 .6 + 2.4 Turnover Jan. 1, to Oct. 31, 1940 1939 2.38 2.88 3.60 2.79 2.08 3.23 3.67 3.00 2.65 3.40 2.24 2.59 3.35 2.82 2.42 3.19 3.74 2.53 2.67 3.37 Percentage of accounts and notes receivable outstanding O ctober 1, 1940, collected during October, by citie s: Installm ent E xcl. Instal. A ccounts A ccounts Fort Sm ith .............. % L ittle R ock. . . 12.6 L o u is v ille ___ 16.5 Memphis . . . . 24.5 40.5% 34.9 46.7 46.0 Installm ent E xcl. Instal. A ccounts A ccounts Q u i n c y ............................% S t .L o u is ............... 19.1 Other C ities------ 12.3 8th F. R. D istrict 18.5 48.9% 57.6 41.2 51.0 Specialty Stores — October results in men’s fur nishings and boot and shoe lines are shown in the following table: Stocks Stock ___________ N et Sales___________ on Hand October, 1940 10, mos. ’40 Oct. 31,’40 compared w ith to same comp, with Sept.,*40 O ct.,’39 pe rio d ’39 Oct., 3 1 /3 9 M en’s Furnishings + 7.6% — 6.4% B oots and Shoes. — 4.5 + 5.4 + + 4.5% 3.1 — 0.9% — 7.9 Turnover Jan. 1, to Oct. 31, 1940 1939 2.04 6.24 2.11 5.99 Percentage of accounts and notes receivable out standing October 1, 1940, collected during October: M en’s Fu rn ish ings...................34.7% B oots and S h o es........................38.8% TRANSPORTATION While traffic of railroads operating in this district continued at relatively high levels during October, volume was held down by the smaller movement of coal and cotton than a year ago, also by smaller loadings of grain and grain products, caused by the Page 4 large am ounts of w heat and corn going into the Governm ent loans. The St. Louis T erm inal Railw ay Association, which handles interchanges for 28 connecting lines, interchanged 91,787 loads in October, as against 82,482 loads in Septem ber and 94,454 loads in O cto ber, 1939. D uring the first nine days of Novem ber the interchange am ounted to 26,148 loads, compared w ith 25,265 loads during the corresponding period in October and 27,244 loads during the first nine days of November, 1939. In the first ten m onths this year a total of 816,105 loads was interchanged, against 810,951 loads during the corresponding period in 1939. F or the entire country, loadings of revenue freight for the first 45 weeks this year, or to Novem ber 9, totaled 31,428,394 cars, against 29,224,341 cars during the same interval in 1939 and 26,291,200 cars in 1938. Estim ated tonnage of the Federal Barge Line betw een St. Louis and New Orleans in October was 182,600 tons, against 192,076 tons in Septem ber and 181,101 tons in October, 1939. Cum ulative tonnage for the first ten m onths was 1,718,718 tons, which compares w ith 1,574,648 tons during the corres ponding period a year ago. W H IS K E Y Of the 61 distilleries in K entucky, 39 were in operation on October 31, an increase of eleven over the num ber active on Septem ber 30. According to trade reports there have been no notable changes in the whiskey industry during the past sixty days. These sources see no decline in sales this year under last. A factor to be considered in any comparison in sales is the abnorm al purchase of whiskey in June by jobbers and retailers in anticipation of the addi tional State tax which became effective July 1. A ccording to the K entucky State Revenue D epart m ent, consum ption of legal whiskey is decreasing, owing to increased prices. C ontributing to the advance in prices are higher Federal taxes, an increase in the State tax from $1.04 to $1.20 a gal lon, and the Fair T rade State Law which advanced the retail price of legal whiskey from 15c to 20c per pint. A representative of the D epartm ent expresses the opinion th at the production and consum ption of m oonshine whiskey is on the increase. H e bases his opinion on the sm aller revenues received from con sum ption taxes and the larger num ber of illicit stills uncovered in K entucky in recent m onths. A G R IC U L T U R E Combined receipts from the sale of principal farm products and Governm ent benefit ^payments to farm ers in states including the E ighth D istrict dur ing the period January-Septem ber, 1938, 1939 and 1940, and during September, 1939 and 1940, are given in the following ta b le : (In thousands of dollars) I n d ia n a .................. Illin o is..................... M issouri................... K entu ck y................ T e n n e ss e e .............. M ississip pi.............. A r k a n s a s ................ T o ta ls................ _____ September 1940 1939 $27,878 45,775 27,911 9,517 9,693 15,679 16,836 153,289 $28,047 42,250 30,875 10,767 12,451 26,866 27,710 178,966 Cumulative for 9 months 1940 1939 1938 $220,526 412,179 204,922 109,098 84,752 75,368 75,600 1,182,445 $197,635 371,555 190,375 103,468 87,0,17 88,369 84,015 1,122,434 $201,813 373,784 178,733 120,186 89,315 88,090 79,822 1,131,743 F arm ing C onditions— W eather generally through out the district during late Septem ber and October was extrem ely auspicious for agricultural activities. Good progress was made in the harvesting of corn, cotton, legumes, late vegetables and fruits and other fall crops. Much headway was also made in fall plowing and planting of w inter w heat and other grain crops. Except where retarded by the autum n drouth fall sown grains have made good grow th. T he above-normal tem peratures were especially favorable for m aturing corn, and as of mid-Novem b e r, an appreciable am ount of the crop had been husked and cribbed. Reports from the tobacco grow ing areas indicate th at crop will be som ewhat sm aller than a year ago, but of good quality. According to the report of the U. S. D epartm ent of A griculture, based on conditions as of Novem ber 1, also reports of the agricultural departm ents of the several states, E ighth D istrict crop prospects as a wdiole underw ent no notable changes during October. Outlook for cotton, corn, tobacco, white potatoes and some lesser productions improved m oderately during the m onth. F ru it prospects were virtually unchanged, and the same was true of late truck crops. Indications point to adequate yields of feed and forage crops, also of food products for hum an consumption. Price trend of a num ber of im portant farm products was upward, though show ing no m aterial changes from a year ago. As of Novem ber 9, the farm products group of the U. S. Bureau of Labor Statistics Index stood at 67.2 per cent of the 1926 average, which compares w ith 66.1 per cent a m onth earlier and 67.8 per cent a year ago. Em ploym ent on farm s decreased less than usual during October, owing m ainly to lateness of the cotton picking season, and the belated potato and fruit harvest. Corn — The E ighth D istrict corn crop this year will be som ew hat below th at of 1939, and the aver age during the preceding 17 years. T he decrease under a year ago is attributed to sm aller acreage, as per-acre yields are higher in m ost states. W ith the large carryover, this year’s production will fur nish ample supplies for all purposes, and leave a good margin of reserves. T he U. S. D epartm ent of A griculture in its Novem ber 1 report estim ates the district yield at 318,024,000 bushels, an increase of 8,687,000 bushels over the October 1 forecast, and comparing w ith 342,860,000 bushels harvested in 1939, and the 17-year average of 331,104,000 bushels. Cotton — In its report based on conditions as of November 1, the U. S. D epartm ent of A griculture estimates the E ighth D istrict cotton yield at 3,379,000 bales, an increase of 34,000 bales over the Octo ber 1 forecast, and com paring w ith 3,429,000 bales produced in 1939 and the 17-year (1923-1939) aver age of 2,954,000 bales. Generally the indicated peracre production is heavy, in some sections recording an all-time high. W hile the fall season has been very favorable for picking and ginning, the crop is still much later than usual. V ery little rainfall occurred during October prior to the last few days and the dry w eather together w ith mild tem peratures favored m aturing of the crop and bolls opened rapidly. W ithal, in A rkansas, M issouri and elsewhere, a con siderable part of the crop still rem ained in the fields at mid-November, and owing to heavy rains and frosts much of this cotton will grade below low middling, hence not eligible for the Commodity Credit Corporation loan. T hrough November 12 only 98,359 bales of the 1940 crop in states of this district, valued at $4,654,963, had been placed in the Government loan. A large part of the long staple cotton produced in the M ississippi D elta has been sold. As indicating the general lateness of the crop, combined receipts at A rkansas and M issouri com presses from A ugust 1 to Novem ber 15 totaled only 1,259,916 bales, as against 1,478,787 bales during the similar period a year earlier. Shipm ents during the period totaled 628,706 bales compared w ith 779,514 bales a year ago. Stocks on hand as of November 15 amounted to 1,539,006 bales, against 2,056,348 bales on the same date in 1939. Reflecting heavy demand for finished fabrics, demand for raw cotton during O ctober and early November continued active, and prices were well maintained. Purchasing in m id-South m arkets cen tered chiefly in grades strict low m iddling and midd ling with staples from 1 inch to VA inches. E xport interest remained slack. In the St. Louis m arket the middling grade ranged from 9.05c to 9.30c per pound between October 15 and Novem ber 15, clos ing at 9.10c on the latter date, which compares w ith 9.15c on October 15 and 9.30c on Novem ber 15,1939. Livestock— The late sum m er and autum n drouth, Page 5 which extended over broad areas of the district, reduced serviceableness of pastures, necessitating supplem entary feeding of hay and roughage on num erous farms. Farm ers in many localities were obliged to haul w ater for livestock, and even for domestic use. Rains since the last week in October have largely corrected this condition. W ithal, the general condition of farm animals continues high, owing chiefly to the mild, open season, abundant feed and forage and improved technique of raisers. Receipts and shipm ents at St. Louis as reported by the National Stock Yards were as follows: _________ R eceipts_______ O ct., 1940 Sept., 1940 Oct., 1939 ______ Shipments*______ Oct., 1940 Sept., 1940 Oct., 1939 Cattle and C alves......... 162,285 148,874 151,946 74,021 70,617 71,489 H o g s .................................. 298,906 225,048 216,555 78,609 62,853 60,448 H orses and M ules . . . . 1,60.0 1,063 1,728 1,484 978 1,736 Sheep ................................ 91,672 88,620 91,608 25,989 34,092 27,636 T o ta ls..............................554,463 463,605 461,837 180,103 168,540 161,309 ^Includes only stock shipped from yards for slaughter in other markets or to farms for feeding purposes. Rice — Production in Arkansas is indicated at 10.047.000 bushels, compared w ith 8,721,000 bushels last year and 8,320,000 bushels, the 1929-1938 aver age. H arvesting made excellent progress during October under near ideal w eather conditions. Cut ting and threshing had been completed at midNovember, w ith yields for the most part satisfactory. L ate varieties — blue rose and nira — are showing disappointing yields because of injury from fungus diseases. Tobacco — E ighth D istrict tobacco prospects im proved further in October, the U. S. D epartm ent of A griculture in its Novem ber 1 report estim ating the yield of all types at 239,623,000 pounds, an increase of 6,896,000 pounds over the October 1 forecast, and com paring w ith 282,074,000 pounds produced a year earlier and the 17-year (1923-1939) average of 285,401.000 pounds. W eather during the early fall favored curing of the burley crop, and present indications are for a wide variety of grades, from common to fine qual ity, w ith some localities having a high percentage of red leaf. As of mid-Novem ber some burley had been bulked preparatory to stripping. Total burley crop will be about 73,500,000 pounds less than in 1939. In the K entucky m arkets 294,395,350 pounds were sold in the 1939-1940 season, for a total of $52,143,269. W hile curing of the dark fired crop is somewhat backward, grow ers are giving unusual care to this work, and a good quality crop is in prospect. In the Green River and stem m ing district some tobacco has been placed in bulk, but precipitation is required before a sizeable portion of the crop can be handled. Reports indicate this crop will be about 10 per cent less than in 1939, w ith quality as a whole below normal. The one sucker crop is reported curing satisfactorily, w ith quality norm al and yield slightly under a year ago. COMMODITY PRICES Range of prices in the St. Louis m arket between October 15 and Novem ber 15, 1940, w ith closing quotations on the latter date and on November 15, 1939, follow s: Close H igh W heat . per bu. $ .86*6 *D ec........... *M ay. . . . . .86 “ *Ju ly....................... .817/s N o. 2 red winter “ .95 .93 N o. 2 hard “ “ Corn .607/s *D ec....................... “ .62 *M ay..................... .6 2 /4 *Ju ly....................... “ .6 7 / N o. 2 m ixed. . . . “ N o. 2 w hite. . . . “ .73/2 Oats *D ec....................... “ .37% .365/g *M ay..................... “ *July....................... “ .33/2 Flour Soft p a t e n t.. . . perbbl. 6.05 Spring “ -----“ 5.50 M iddling Cotton per lb. .0930 H ogs on H oof . .percw t. 6.40 *Nom inal quotations. L ow N ov. 15, 1940 N ov. 15, 1939 $ .80.% . 79/8 .747/s .8 7 / 2 .87 $ $ .85 M .84% •81J4 .9 3 / .9 1 / .8 33/4 .82 .80 .93 .90*4 .5 6 /2 .5 7 /s .5 7 /s .6 0 U .63/2 .607/s .6U/4 .62 .6 4 / .70 .4 7/4 .49% .49% .4 8 ^ .59/2 .32% .32% .30% .36% .355/s .3 2 /2 .3 5 / . 3 4 V4 .31*4 5.15 5.15 .0,905 5.92 5.35(g)6.05 5-35 © 5.50 .0910 6.00 5.95 @ 6.25 6.35 @ 6.65 .0930 6.20, BUILDING T he dollar value of perm its issued for new con struction in the five largest cities of the district in October was 8.5 per cent less than in Septem ber and 54.0 per cent less than in October, 1939. Accord ing to statistics compiled by the F. W . Dodge Cor poration, construction contracts let in the E ighth D istrict in O ctober am ounted to $27,121,000, which compares w ith revised figures of $25,467,000 in Sep tem ber and $17,082,000 in October, 1939. Building figures for October follow : N ew Construction (C ost in thousands) Permits 1940 1939 E van sville......... 34 29 L ittle Rock 37 46 L o u is v ille ......... 147 124 M em phis............ 489 297 St. L o u is............ 365 265 Oct. Totals 752 1,081 Sept. “ 964 719 Aug. “ ----- 1,129 757 >using projects. Repairs, etc. Cost 1940 1939 $ 120 191 251 546 743 1,851 2,023 3,327 $ 131 334 412 2,461* 684 4,022 1,645 3,451 Permits 1940 1939 112 122 108 90 41 31 213 207 190 218 664 668 623 590 631 709 1940 Cost 1939 $ 37 58 83 115 490. 783 762 507 $ 50 30 57 68 252 457 521 886 CONSUMPTION OF ELECTRICITY Public utilities companies in six large cities of the district report consum ption of electric current by selected industrial custom ers in October as being 8.8 per cent more than in Septem ber and 15.0 per cent greater than in October, 1939. Detailed figures follow : (K .W .H . in thous.) Oct., N o. of Sept., C ustom 1940 1940 K .W .H . K .W .H . ers 40 35 82 31 20 , . . 125 333 T o ta ls----- L ittle R ock. . . . Louisville . . , 4,022 2,386 11,462 3,148 863 50,637 72,518 3,657 2,488 11,106 2,679 583 46,167 66,680. O ct., 1939 K.W .Hu 3,632 2,252 10,317 2,544 980 43,358 63,083 October, 1940 compared with + 1 0 .0 % — 4.1 + 3.2 + 17.5 + 4 8 .0 + 9.7 +10.. 7% + 6.0 + 1 1 .1 + 2 3 .7 — 11.9 + 1 6 .8 + + 1 5 .0 8.8 BANKING AND FINANCE Dem and for bank credit in the E ighth D istrict during the past th irty days developed further im provem ent, w ith virtually all of the principal bor row ing groups participating in the upward trend. R equirem ents of m ercantile and m anufacturing interests, as reflected in loans and discounts of mem ber banks, reached the highest levels in more than eight years. W hile still in substantial volume, liqui dation at commercial banks was m easurably below new borrow ings and renewals. Dem ands for funds to move the cotton and tobacco crops were in con siderable volume. O w ing to lateness of the cotton crop, repaym ents of production loans based on th at staple were relatively sm aller in the aggregate than during the past several seasons. Country banks in the tobacco sections have increased their borrow ings from city correspondents in anticipation of needs incident to opening of tobacco m arkets in early December. Dem and for currency continued to rise sharply, circulation of this bank in the third week of Novem ber reaching an all-time high record. Member Banks — In the four-week period ended Novem ber 13, total loans and investm ents of weekly reporting m em ber banks in the principal cities in creased 3.0 per cent and at the end of the period were 6.1 per cent greater than on the corresponding report date a year ago. Gross deposits also moved sharply upward, total at mid-Novem ber reaching the highest point of record. A fter recording a new high for the year on October 23, reserve balances declined, and as of Novem ber 13 were about on a parity w ith a m onth earlier, but still 7.0 per cent larger than a year ago. Statem ent of the principal resource and liability items of the reporting m em ber banks follow s: Change from Oct. 0< 16, N ov. 15, 1940 1939 (I n thousands of dollars) — 707 + 9,656 424 + 2,164 + 152 — 33 + + 794 103 + 657 + 6,206 + 79 — 1,018 Loans to b a n k s. + 11,482 268 + 391 + 7,404 + — 20,103 + 2,339 +24,60.8 + 4,852 + 2,650 + 1,095 + 11,280 + 1,979 + 1,402 7,895 + + 4 4 ,9 1 3 + 6,796 629 + 1,503 Tim e deposits.............................................. + 41 U . S. Government deposits..................... — 3,887 Inter-bank deposits....................... ........... + 11,841 + 2 1 ,9 5 4 B orrow ings......... . ...................................... ............ *Other than inter-bank and Government deposits, less cash item s on hand or in process of collection. Above figures are for 24 member banks in St. Louis, Louisville, M em phis, L ittle Rock and E vansville. Their resources comprise approximately 63.3% of the resources of all member banks in this district. N ov. 13, 1940 ,.$203,142 9,985 4,215 3. 12,443 57,698 1,740 65,161 10,500 34,778 162,452 . 72,864 111,495 191,317 523,498 192,067 15,111 . 384,203 T he aggregate am ount of savings deposits held by selected m em ber banks on Novem ber 6 was 0.9 per cent g reater than on October 2 and 0.3 per cent larger than on Novem ber 1, 1939. Federal Reserve Operations — T he volume of the m ajor operations of the Federal Reserve Bank of St. Louis, during October, 1940, is indicated below : (Incl. Louisville, M emphis, L ittle Rock branches) Pieces Am ounts 5,975,132 $1,442,511,003 Checks (cash item s) handled................................ Collections (non-cash item s) handled................ 123,814 34,644,290 Transfers of f u n d s . . . . .............................................. 5,260 393,494,030 Currency received and counted.............................. 9,719,976 30,735,896 Coin received and counted....................................... 8,646,366 1,282,685 Rediscounts, advances and com m itm ents......... 13 390,100 N ew issues, redemptions, and exchanges of 42,366,475 securities as fiscal agent of U . S. Govt., etc. 17,683 B ills and securities in custody— coupons clipped 9,821 ............................... Changes in the principal assets and liabilities of this bank appear in the following table: N ov. 19, 1940 (In thousands of dollars) 20 Industrial advances under Sec. 13b........... $ 130 Other advances and red iscou n ts..,.............. B ills bought (including participations) . . . U . S. securities.................................................. >.. 96*204 Total earning a sse ts...................................... 96,354 C hange from Oct. 19, N ov. 19, 1939 1940, _ 2 -0— 111 + 37 - 0-07,629 —- 3,769 + 7,516 — 3,732 + T otal reserves....................................................... 508,427 Total deposits................................ ...................... 389,343 . 211,992 + 18,257 + 7,746 + 5,254 Industrial commitments under Sec. 13b. Ratio of reserve to deposit 405 84.5% — + 11 1.2% + 66,102 + 50,319 + _ 22,323 5 — 0.8% + Following are the rates of this bank for accom modations under the Federal Reserve A ct: Advances to banks, secured by direct obligations of >per annum the U nited States, under paragraph 13 of Section 13. Advances to member banks, under paragraph 8 of Sec tion 13, secured by direct obligations of the U nited States or by such Government guaranteed obliga tions as are eligible for collateral thereunder................ , 1 % per annum Rediscounts and other advances to member banks 1 % per annum under Sections 13 and 13a.................................................. Advances to member banks under Section 10b................ 2 % per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the U nited States, under paragraph 13 of Section 1 3 ......... Rediscounts, purchases, and advances to ^member banks, nonmember banks, and other financing insti tutions, under Section 13b: (a) On portion for which such institution is obligated 3 % per annum 4 % per annum (b) On remaining portion.............................................. Commitments, not exceeding 6 months, to # member banks, nonmember banks, and other financing insti tutions, to rediscount, purchase, or make advances, under Section 13b ......................... . ............................................. V*% flat Advances to established industrial or commercial J 4 % to businesses under Section 13b................................................ < 5 y2 % per annum Since the Septem ber issue of this review the fol lowing banks have become m em bers of the Federal Reserve S y stem : The Gallatin County Bank, Ridgway, 111.; State Bank of K eyesport, K eyesport, 111.; Oaktown Bank, Oaktown, Ind., and Farm ers and M erchants Bank, Fenton, Mo. Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this d istric t: (In thousands of dollars) El Dorado, Fort Smith, . . . Oct., 1940 Ark.$ “ 6,033 16,074 2,622 “ L ittle R ock,. . . 51,102 “ Pine Bluff, 11,613 Texarkana, A rk.-Tex. 9,0,64 E.St.L.-N at.S.Y .,111. 49,177 Q uincy,.............. .. . “ 9,510 E vansville,......... Ind. 36,971 ..K y . 180,120, “ Owensboro, 6,476 Miss. 7,726 St. L ou is,........... ..M o . 638,446 “ 2,185 “ Springfield,----17,545 Tenn. 233,758 (Completed November 23, 1940) 1,278,422 Sept., 1940 $ Oct., 1939 5,234 14,020, 1,247 38,450 8,605 7,603 43,761 8,459 31,261 157,184 6,047 4,518 532,254 2,090 15,967 122,722 $ 5,812 13,494 3,446 46,892 10,617 8,531 41,629 9,075 32,587 159,869 6,402 7,043 600,917 2,081 15,30,7 199,689 999,422 1,163,391 O ct.,’40 comp, w ith Sept., ’40 O ct.,’39 + 15.3% + 14.7 + 110.3 + 32.9 + 35.0 + 19.2 + 12.4 + 12.4 + 18.3 + 14.6 + 7.1 + 71.0 + 20.0 + 4.5 + 9.9 + 90.5 + 3.8% + 1 9 .1 -2 3 .9 + 9.0 b 9.4 b 6.2 + 18.1 + 4.8 + 1 3 .5 + 12.7 + 1.2 + 9.7 b 6.2 - 5.0 -14.6 + 17.1 + + 27.9 9.9 Page 7 N A TIO N A L SUMMARY O F B U S IN E S S CO N D ITIO N S B Y B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M INDUSTRIAL PRODUCTION Industrial output rose sharply in October and the first half of November and prices of basic commodities advanced further. New orders both for defense purposes and for civilian needs continued in large volume. Production — Volume of industrial production, as measured by the Board’s seasonally adjusted index, rose further in October to about 128 per cent of the 1935-1939 average as compared with 125 in September and 126 at the peak reached last December. Index of physical volum e of production, adjusted for sea sonal variation, 1935-1939 average = 100. B y months, January, 1934, to October, 1940. Latest figure 128. FACTORY EMPLOYMENT AND PAYROLLS •Indexes of number employed and payrolls, without adjust ment for seasonal variation, 1923-1925 average = 100. B y months, January, 1934, to October, 1940. Indexes com piled by the United States Bureau of Labor Statistics. WHOLESALE PRICES OF BASIC COMMODITIES PER CENT 100 PER CENT » A - ...... k ' , > 1 FOODSTUFFS ''‘■''Vv 60 NDUSTR1AL MATERIALS V ■ " V - 1 40 1934 1935 40 1937 1936 1938 1939 1940 Federal Reserve groupings of Bureau of Labor Statistics’ data. Thursday figures, January 4, 1934, to November 7, 1940. MONEY RATES IN NEW YORK CITY PER CENT PER CENT \ AV*' \ r — kA Vv, s it'\\ 1 TREASUIRY NOTES (3 -5 YEARS) \A 1934 TREAJ5URY BILLS (NELW ISSUES) A T “v / ►V* \ V 1935 1936 1937 1938 1939 1940 For weeks ending January 6, 1934, to November 9, 1940. Page 8 In the steel and machinery industries activity continued at a high rate in October. In the first half of November steel ingot production advanced slightly further and was at about 96 per cent of capacity. This high rate of output is expected to be maintained for some time to come, according to trade reports, as new orders for steel have continued large. Lumber production, which had risen sharply since midsummer, declined less than seasonally in October. New orders for lumber were somewhat below the high rate of August and September but remained above production, reflecting in part continued Government demands. Bituminous coal production declined sharply in October but in the first half of November showed some increase. In this industry output had been maintained in large volume during the summer owing in part to considerable stocking of coal in anticipation of higher prices. Anthracite production also declined in the first half of October but rose sharply in the latter part of the month owing in part to seasonal influences. Crude petroleum production, which had been curtailed during most of the summer, increased further in October. Value of construction contract awards increased in October, following a decline in the previous month, according to figures of the F. W. Dodge Cor poration and the Federal Reserve Bank of San Francisco. Changes in the amount of contract awards in recent months have reflected principally fluctua tions in contracts for public projects. Awards for private construction have shown about the usual seasonal changes, following a sharp rise in July and August. Distribution — In October department store sales declined considerably from the advanced level of the two preceding months, while sales at variety stores, which also had been large in August and September, increased season ally. In the early part of November department store sales increased somewhat. Total loadings of revenue freight in October were maintained at about the level reached in September. Shipments of miscellaneous merchandise increased further, while loadings of coal showed a sharp decrease. In the first week of November freight-car loadings declined by less than the usual seasonal amount. W holesale Commodity Prices — Prices of basic commodities continued to advance from the middle of October to the middle of November, with the chief increases in industrial materials, particularly lead, hides, wool, and tex tile yarns. The general index of wholesale commodity prices rose further by about 1 per cent in this period, reflecting increases in prices of some finished goods as well as of materials. Bank Credit — Total loans and investments at reporting member banks in 101 leading cities have increased substantially since the end of September. Commercial loans showed sizeable increases both in New York City and in other leading cities. Following reductions during August and September, holdings of United States Government obligations at these banks also in creased. Federal Reserve System holdings of Government obligations were reduced by $180,000,000 between September 25 and November 13. TREASIJRY BONDS (IZ YEAI*S AND OVER) RE!SERVE BANK COUNT RATE . Increases in output were marked in the automobile and textile industries. In the rayon industry, where production in September had been curtailed by a strike, activity increased considerably and cotton textile mills were also more active. Mill sales of cotton goods have been large since the middle of August, reflecting increased civilian and military demand, and have been in excess of production during most of this period. At wool textile mills, where activity had risen sharply in September, there was a further increase in Octo ber. Backlogs of orders in this industry are now of considerable size owing to a large volume of orders received during the past two months, particularly from the Government. Automobile production rose to about 500,000 cars and trucks, the largest monthly total since the spring of 1937, and retail sales of both new and used automobiles were reported to be large for this time of year. United States Government Security Prices — After rising moderately during the latter part of October prices of United States Government secur ities advanced sharply in the early part of November. The quotation on the 1960-65 bonds reached a new high level at about 110^4, and the yield on this issue declined to 2.12 per cent compared with 2.25 per cent in October and 2.26 per cent in June, 1939 and again in April, 1940. The average yield on 3 to 5 year Treasury notes declined to less than ^ of 1 per cent.
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