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FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REVIEW OF BUSINESS CONDITIONS IN EIGHTH DISTRICT Released for Publication On and After the Afternoon of November 30, 1926 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent B U SIN E SS in this district during the past thirty days developed considerable irregu larity, with reports covering a m ajority of lines indicating reduced activity, both as contrasted with the similar period immediately preceding and the corresponding time last year. The general de mand for merchandise continues good, and distribu tion as indicated by car loadings and sales statistics is still on a large scale, but purchasing by merchants and the public is being conducted on an extremely conservative basis, and almost exclusively for im mediate requirements. Through the South effects of the decline in cotton prices are being reflected in curtailed buying of commodities and in the north ern tiers of the district purchasing power in many sections has been lowered by crop losses incident to the floods in September and early October, and unsatisfactory conditions attending marketing of corn, live stock and other farm products. Until the second week of this month, weather was distinctly unfavorable for distribution of late fall and winter goods, particularly wearing apparel. In virtually all lines investigated, O ctober sales fell below those of the corresponding period last year. It will be recalled, however, that weather at this time a year ago was unusually auspicious for the movement of all varieties of seasonal goods and that trade was exceptionally active, so that the com parison is less significant than would be the case had existing conditions been more nearly alike. In dustry during the period under review made a rela tively favorable showing. W hile operations in sev eral important industries were curtailed, production in others was well sustained. Activities in the iron and steel industry continued at an unusually high rate for this time of year, and at a number of im portant plants unfilled orders are sufficiently large to assure maintenance of present production sched ules through the remainder of 1926. Debits to individual accounts fell 3.3 per cent below October, 1925, but were 12.9 per cent greater than in September this year. Sales of de partment stores in the five largest cities of the dis trict during October were 9.1 per cent smaller than a year ago, and a decrease was also shown by mail order houses. A ccording to reports of the E m ploy ment Service of the U. S. Department of Labor the employment situation continued generally satisfac tory, with no marked changes as compared with the preceding thirty days. Reductions in working forces were reported by certain industries, but these were mainly seasonal in character. In the building trades both skilled artisans and common labor are well employed, and further expansion in activities at Southern textile mills was reported. Active demand, rapidly rising prices and heavi ly increased production featured the coal situation in this district during the past thirty days. In all the principal fields, but particularly Illinois, a large number of idle mines resumed operations, and working time was increased at active pits. In many instances output was limited only by labor supply and transportation facilities. Competition for min ers was keen, and the surplus which had existed for many months, has virtually disappeared. N o general increase in the wage scale has taken place, but individual operators have offered special induce ments to miners in order to augment their forces. The demand comes from all classes of consumers, and the upturn in prices has extended to all grades and varieties of coal. Dom estic coal, which earlier in the season was dull and weak, is in urgent de mand, bids of both country and city dealers being responsible for sharp advances in prices. Steaming fuel is also unusually active, and users w ho failed to anticipate their requirements are experiencing difficulty in obtaining all they need even at the high er price levels. Purchasing by the railroads has increased markedly, a number o f roads having doubled their quotas and placed new orders besides. Demand from abroad for fuel, due to the strike of British miners, has gained in volume. A n nouncement that a substantial tonnage of Illinois coal has been sold for export to Europe, a thing unique in the history of the field, served to stimu late buying am ong domestic consumers. Cumu lative production of soft coal during 1926 to November 6, (approximately 262 w orking days) amounted to 474,014,000 net tons, against 472,364,000 tons for the corresponding period in 1920 and 486,078,000 tons in 1923, other recent years of high production. tions as contrasted with the past several months. Replies to 438 questionnaires addressed to represen tative interests in the several lines throughout the district showed the follow ing results: Railroads operating in the district continued to exceed all seasonal records in the matter of freight handled. Increases extended to most classi fications, but were especially marked in fuel and merchandise. For the entire country loadings of revenue freight for the first 44 weeks of the year, or to October 30, totaled 45,257,913 cars, against 43,430,103 cars for the corresponding period last year and 41,157,374 cars in 1924. The St. Louis Terminal Railway Association, which handles inter changes for 28 connecting lines, interchanged 241,339 loads in October, the largest number on record, and comparing with 228,822 loads in Sept ember, and 235,938 loads in October, 1925. During the first 9 days of Novem ber the interchange amounted to 68,350 loads, against 71,490 loads dur ing the same period in O ctober and 69,056 during the first 9 days of November, 1925. Passenger traf fic of the reporting roads showed no change in October as compared with the same month last year. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans during October was 104,000 tons, against 110,690 tons (revised fig ures) in September and 67,627 tons in October, 1925. The per capita circulation of the United States on November 1 was $42.53, against $42.34 on O cto ber 1, and $42.77 on N ovember 1, 1925. Reports relative to collections show a rather marked slowing down, both as compared with the preceding month arid the same period last year. Generally through the South payments were small er, and results in many sections of the corn produc ing areas were also disappointing. W holesalers in the large centers reported collections in October below those of a year ago, and this was true particu larly of the boot and shoe and one or tw o other industries with which O ctober is an important set tlement month. A m ong retailers results in the large centers of population were relatively better than in the rural districts. Rains and resultant heavy roads have interfered with communications in many sec tions. Generally in the coal fields merchants and bankers report decided improvement in their collec Excellent October, 1926............... 1.4% September, 1926......... 1.4 October, 1925............... 4.4 Good 26.4% 32.4 49.6 Fair 62.5% 58.1 40.5 Poor 9.7% 8.1 5.5 Commercial failures in the Eighth Federal R e serve District during October, according to D un’s, numbered 67, involving liabilities of $801,234, against 48 defaults in September with liabilities of $548,162, and 80 failures for $1,756,347 in October, 1925. M AN U FACTU RIN G AND W H O L E S A L E Automobiles — Production of passenger auto mobiles by American manufacturers during O cto ber totaled 288,848, which compares with 350,811 in September, and 394,096 in October, 1925. The total output of trucks in October was 42,890, against 46,312 in September, and 44,323 in October last year. Sales of automobiles in the district showed a further decline during the period under review, and were the smallest since last January; the number and value of cars sold were also smaller than dur ing the corresponding period last year. The de crease in business is seasonal in character, but in the South, and in many sections of the grain areas, is more pronounced than has been the case during the past four years. L ow prices of raw cotton, and disappointing crop yields were mentioned as causes contributing to the reduced sales volume. Dealers in the large cities report heavier stocks of new cars than either a month earlier or a year ago, but no greater than the usual average at this season. Gen erally through the district the number of used cars in dealers' hands increased further, but sales of secondhand vehicles were reported relatively sat isfactory. W hile there has been no general m ove ment in the direction of lowering prices of new cars, several manufacturers have reduced their quotations on certain models in an effort to stimulate business. O ctober sales of new cars by 320 dealers scattered through the district were 5.2 per cent smaller than in September, and 30.5 per cent below the October total last year. Sales of parts and accessories were 8.4 per cent smaller than in September, and 14.2 per cent less than in O ctober last year. O f the sales of dealers reporting, 58.3 per cent were made on the deferred payment plan, as compared with 48.9 per cent in September and 69.3 per cent in October, 1925. Boots and Shoes — O ctober sales of the 7 re porting interests were 7.7 per cent smaller than dur ing the same month in 1925 and 5.9 per cent below the September total this year. Stocks on N ovem ber 1 showed a decrease of 12.5 per cent below those on the same date last year, but were 5.8 per cent larger than on October 1 this year. Shipments in October were exceptionally heavy, tw o firms reporting the heaviest total for any single month on record. Fac tory operations decreased in O ctober as compared with the preceding month, and have been further curtailed since the first of the month. Prices were unchanged during the month, and averaged about the same as at the same peroid last year. Clothing — Sales of both men’s and w om en’s heavyweight clothing have been disappointing. Weather, until the second week in November, was unfavorable for the distribution of winter goods, and price uncertainty was reported as another fac tor contributing to hold down business. Retail stocks are for the most part light, but retailers are preceding with caution in the matter of future commitments. Manufacturers of w om en’s suits and cloaks report that the demand for their goods has been stimulated by the strike of garment workers in New York, and they are being pressed for deliv eries. Advance sales o f men’s clothing for spring, 1927, have been fairly good, with prices firm at the levels established earlier in the season. Sales of the 8 reporting clothiers in O ctober were 15.4 per cent smaller than for the same period in 1925, but 32.5 per cent larger than the September total this year. Drugs and Chemicals— Sales in this classifica tion showed good gains over both the preceding month and a year ago, the O ctober total of the 7 reporting interests being 12.3 per cent larger than the preceding month and 10.1 per cent above the October, 1925, total. Seasonal goods were reported m oving in good volume, and advance orders for holiday merchandise were satisfactory. Prices were generally firmer, with a number of advances recorded on certain drugs. D ry Goods — Low er prices for raw cotton, un favorable weather and uncertainty relative to prices were mentioned as the principal influences in caus ing a decline in O ctober sales of the 8 reporting in terests of 18.4 per cent under the same month in 1925 and 23.4 per cent under the September total this year. Stocks on N ovem ber 1 were 8.0 per cent smaller than a month earlier and 9.7 per cent below those on Novem ber 1, 1925. Staples in the cotton goods line, and silks and rayon are m oving less ac tively than heretofore, but the demand for special ties, novelities and notions is being maintained at the recent levels. During the past three weeks im provement has taken place in ordering of under wear, hosiery, sweaters and knitted goods gene rally. Electrical Supplies — For the first time in many months, business in this classification showed a de crease, O ctober sales of the 5 reporting interests being 6.7 per cent smaller than during the same month in 1925, and 5.2 per cent below the Septem ber total this year. Demand for holiday goods was reported satisfactory, but there was a rather sharp falling off in buying by the building industry. Except for slightly lower quotations on copper wire, prices showed little change worthy of note as compared with the preceding thirty days. Flour — Production by the 12 leading mills of the district in October was 411,049 barrels, the smallest since July, and comparing with 436,876 barrels in September and 393,111 barrels in October, 1925. Stocks of flour in St. Louis on N ovember 1 were 9.3 per cent above those of a month earlier, but 4.7 per cent below the total on Novem ber 1, 1925. Continued dull conditions were reported in the flour trade. Dom estic demand was slow, and confined to immediate requirements and aside from routine sales to Latin-American countries, export business was at a standstill. M illing operations have steadily decreased, and in the second week o f October had dropped to about a third of capacity. Prices were lower, being depressed by the decline in cash wheat values. Shipping directions on flour under contract were reported slow. Furniture — October sales of the 16 reporting interests fell 8.0 per cent below those of the same month in 1925, and 11.4 per cent below the Sep tember total this year. Stocks on November 1 were 2.6 per cent smaller than a month earlier, but 33.7 per cent larger than those on N ovember 1, 1925. Dealers continue to purchase closely to a necessity basis, and large stock orders are reported scarce. Some improvement was reported in household fur niture and furnishing, and sales of holiday goods were for the most part well up to expectations. Groceries — A further slowing down in this classification, both as compared with the preceding month and a year ago, was noted. Losses were particularly heavy in the South, and there were complaints of decreased sales and backward collec tions in sections of the grain areas which were af fected by floods. Ordering of holiday goods was in good volume, and generally sales of specialties and luxuries were relatively better than the staple lines. October sales of the 11 reporting interests were 17.7 per cent smaller than in the same month in 1925, and 7.2 per cent below the September total this year. Stocks on Novem ber 1 were 22.0 per cent larger than a month earlier and 26.8 per cent smaller than a year ago. Hardware — Aside from holiday goods, which are m oving in heavy volume, business generally through this line showed declining tendencies. Heaviest losses were in the staple lines and building hardware, particularly paints and painters’ supplies. Sales of sporting goods and winter merchandise were in smaller volume than a year ago. October sales of the 9 reporting interests dropped 13.0 per cent below those o f the same month in 1925, and 6.1 per cent below the September total this year. Stocks on N ovem ber 1 were 2.0 per cent larger than thirty days earlier and 1.9 per cent in excess of those on the same date in 1925. Iron and Steel Products — Generally through the iron and steel industry there was a slight reces sion in business as compared with the preceding month, but the volum e continues ahead of a year ago. New bookings for iron and steel products in this district during October fell below those of September, but shipments during the month were slightly above those of the September total. In a majority o f instances, the reporting interests showed a slight decrease in unfilled tonnage on N ovem ber 1, as compared with thirty days earlier. Buying, while being pursued more cautiously than hereto fore, was broad and well diversified. The general manufacturing trade continues to account for heavy tonnages, and some specialty makers, notably of stoves, heating apparatus and farm implements, have been receiving a satisfactory volum e of orders. There has been the usual seasonal recession in the demand for building materials, but some com m odi ties in this classification, such as reinforcing con crete bars and standard structural shapes, are m ov ing in undiminished volume. Purchasing by the railroads as a w hole has developed no improvement to speak of as compared with the preceding several months, except that some fair rail orders have been placed and mills in this district have gotten a good share of orders for track accessories. W arehouse men report some improvement in the demand for wire fencing, roofing materials, nails and other re pair materials from the country. There is also a better call for iron and steel goods from the coal mines and lumber and cement mills. Prices of fin ished and semi-finished materials showed no change worthy of note as compared with the preceding thirty days. Production of pig iron for the country as a whole in October totaled 3,321,177 tons, and was the largest for any October since 1918. Buying of pig iron was more active than in several months, sales for first quarter of 1927 having been stimu lated by prospective higher prices due to the sharp advance in foundry coke. A fter receding in Sep tember, production of steel ingots for the entire country recorded a sharp gain in O ctober and went to the highest level since April. Both in point of total output and daily average rate, production was the highest for any October on record. Dull con ditions continued in the scrap iron and steel market, but since the first week of O ctober prices have steadied, and on several important items, quotations advanced slightly. Lum ber — A rather marked recession in de mand from the building industry and generally unfavorable weather were the principal contrib uting factors to a decrease in retail distribution during the past thirty days. The usual Autumn im provement in distribution at wholesale has been entirely missing, a circumstance as peculiar as ab sence of any preceding Summer dullness. A s a result prices have failed to follow the usual sea sonal trend, and have been slightly downward on softw ood lumber since early Fall. In the immediate past, certain items in the Southern hardwood group have declined, follow ing an active trade at strong values up to the middle of October. Lack of Fall activity is due partly to stock retrenchment on the part of distributors, a fact which is emphasized by the urgent call for quick delivery on a large pro portion of orders placed. The relative strength in softw oods is attributable to high production costs and reductions in output. W eather in the South continued unfavorable for logging and mill opera tions. R E T A IL T R A D E Conditions in the retail trade are reflected in the follow ing comparative tables showing activities at department stores and shoe and men’s furnishing stores in leading cities of the district: N e t sales comparisons O ct. 1926 comp, to O ct. 1925 Evansville ...... .. . + Little R ock...... ...— Louisville ......... ..— ..— ..— ..— Springfield, M o ..— 8th D istrict...... ...— 5 .1 % 16.7 10.7 12.7 5.7 8.1 20.1 9.1 8 months ending O ct. 31, 1926 to same period 1925 Stocks on hand Stock turnover O ct. 31, 1926 comp, to O ct. 31, 1925 — 5 .4 % — 2.5 — 1.6 + 7.5 — 1.2 + 1.2 — 1.6 + 1.5 N e t sales comparisons O ct. 1926 compared to O ct. 1925 M en 's furnishings..............— 1 1 .7 % Boots and shoes................ + 0.5 Sept. 1926 + 3 0 .7 % + 2 0 .5 — + + — — + — + 1 .0 % 0.8 1.5 2.5 4.1 7.1 1.4 3.8 January 1 to O ct. 31, 1926 1925 173.5 205.4 272.8 223.5 203.1 273.2 138.7 253.6 165.9 210.9 283.6 198.9 199.1 278.6 131.8 252.2 Stocks on hand O ct. 1926 compared to O ct. 1925 + 7 .1 % + 5.7 Sept. 1926 — 0 .5 % + 1.0 CONSUMPTION OF E L E C T R IC IT Y Public utilities companies in the five largest cities of the district reported O ctober consumption of electric current by selected industrial customers 0.1 per cent larger than in September, and 1.8 per cent greater than in October, 1925. Increases were general with all clases of consumers in the yearly comparison, while in the month-to-month compari son the seasonal decreases in requirements of cold storage and refrigeration plants was counterbal anced by heavier loads at coal mines and by-product coke plants and packing houses. Detailed figures fo llo w : N o. of O ct. Sept. Custom 1926 1926 ers * K .W .H . * K .W . H . Evansville ..... 40 L ittle R ock...3 5 Louisville ..... .80 M em phis ...... 31 St. Louis.........94 1,290 1,553 5,632 1,554 16,539 O ct. 1926 comp, to Sept. 1926 Oct. 1925 * K .W . H . O ct. 1926 comp, to O ct. 1925 + 6 .< + 18 .7 % - -5 8 .8 + — 5.6 2.7 1,087 978 5,691 1,553 16,798 - - 1.0 0.1 — 1.5 + 0.1 26,107 + 1.8 1,210 1,534 5,315 1,471 17,000 26,568 T otals...... 280 * I n thousands (000 om itted). 26,536 + 1-2 - f 6.0 - - The follow ing figures, compiled by the Depart ment of the Interior, show kilowatt production both for lighting and industrial purposes for the country as a w h ole: B y water power September, 1926.................. 2,074,147,000 A u gust, 1926......................... 2,085,055,000 September, 1925.................. 1,582,180,000 B y fuels 4,092,444,000 4,049,896,000 3,803,574,000 Totals 6,166,591,000 6,134,951,000 5,385,754,000 BU ILD IN G In point of dollar value, permits for new build ings in the five largest cities o f the district issued in October fell 26.2 per cent below the same month in 1925, and 19.5 per cent below the September total this year. A ccording to statistics compiled by the F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District during O cto ber amounted to $40,981,236, which compares with $35,187,306 in September and $30,994,000 in O cto ber, 1925. Aside from minor advances in lumber, building material prices were unchanged from the month before. Production of portland cement for the country as a whole during O ctober totaled 16,596,000 barrels, against 16,571,000 barrels in September and 15,992,000 barrels in October, 1925. Building figures for O ctober fo llo w : Repairs, etc. N ew Construction *C ost Permits 1926 1925 463 52 264 446 800 173 76 339 553 962 $1,205 86 1,671 803 1,640 $ O ct. totals 2,025 Sept. totals 1,885 A u g. totals 1,965 2,103 1,901 2,188 $5,405 6,716 5,835 Evansville .. L ittle Rock Louisville .. M em phis ... St. Louis.... 1925 1926 1925 193 191 2,205 1,686 3,052 98 92 71 110 414 82 114 91 161 506 $7,327 8,555 8,659 785 887 1,148 954 894 979 1926 *C ost Permits 1926 1925 $ 27 28 84 70 468 $ 31 39 143 47 356 $ 677 956 1,244 $616 646 827 A G R IC U L T U R E For the district as a whole, weather during October was somewhat m ore favorable than during the preceding month, and as a result indicated yields on November 1 of corn, tobacco, potatoes, cotton, sweet potatoes and some of the less important crops were slightly larger than a month earlier. Quality, however, is showing the effects of unfavorable con ditions during the grow ing and harvesting seasons, and yields vary very materially in different locali ties. In Illinois, Missouri, Arkansas and to a lesser degree in other States of the district, heavy damage was brought by floods and the excessive rainfall. In addition, farm w ork is backward, and in many important grow ing localities seeding of winter wheat was so seriously interfered with that farmers have been unable to carry out planting programs formed in the summer. Withal crop yields in the district are abundant, and to a greater extent than ever before, farmers are realizing the benefits of diversification and rota tion. Farm incomes have been augmented by larger returns from dairying and poultry raising, and pro ceeds from fruit and truck culture are larger than in former years. Prices obtained for the principal crops have not been uniform ly satisfactory, but the average is sufficiently high to assure fair re turns to a large proportion of the producers. Com bining the yields of all crops in States of the dis trict in proportion to their relative importance, the composite of yields per acre this season was 110.5 per cent, which compares with 103.5 per cent in 1925. Corn — Based on the N ovem ber 1 condition the yield of corn in this district is estimated at 400,830,000 bushels, which compares with an indicated yield of 399,749,000 bushels on October 1 and 404,167,000 bushels (revised figures) harvested in 1925. W et weather caused corn to sprout and rot in the shock, and an unusual amount of chaffy corn is reported, so that careful sorting and handling is required to salvage the crop. Shucking is univers ally backward, and due to the wet weather, rela tively little corn was in condition to house on November 1. Less corn was cut for fodder and fewer silos filled than ordinarily. From present indica tions good seed corn will be scarce. It is estimated that upwards of 40,000 acres in Missouri and 50,000 acres in Illinois were totally destroyed by floods in September and early October. Winter Wheat — W eather during the early stages of the planting season was unfavorable, and generally planting is backward, but fair progress has been made since the middle of O ctober under impetus of a few days of sunshine. Acreage, how ever, is below earlier expectations, considerable wheat having been seeded under poor soil condi tions, and stands are disappointing. The total out put of all wheat in the district is estimated at 52, 236,000 bushels, against 49,277,000 bushels raised in 1925. Fruits and Vegetables — The apple crop in the three principal producing states of the district is considerably above that of the preceding year and the five-year average. Due to the heavy drop occa sioned by drought conditions in the summer and damage from other causes, commercial shipments will fall short of earlier expectations. In the three states the crop is estimated at 17,340,000 bushels of which 2,796,000 barrels comprise the commercial crop. This compares with 15,170,000 bushels total and 2,501,000 barrels commercial crop in 1925, and a five-year average (1921-1925) of 14,369,000 bush els total and 2,296,000 barrel commercial crop. A feature of the year's horticultural activities was the heavy gain in production of grapes, the increase being due to a favorable season and numerous new vineyards being brought into production. In the four chief States of the district, Indiana, Illinois, Missouri and Arkansas, 38,018 tons were produced in 1926, against 15,570 tons in 1925, and a five-year average of 17,035 tons. W hite potatoes were a smaller crop than the average, and quality in many sections was the poorest in more than a decade. Sweet potatoes, on the other hand, yielded heavily, the combined crop in Tennessee, Mississippi and Arkansas being 15,871,000 bushels, against 12,192,000 bushels last year and a five-year average of 15,080,000 bushels. Live Stock — Reports from scattered sections of the district indicate no change of consequence in the condition of farm animals as compared with the preceding thirty days. Considerable loss of hogs from disease has occurred in Illinois and Mis souri. Prices for all classes of livestock declined during late O ctober and early this month. The cat tle market weakened under pressure of heavy re ceipts, while hog prices were adversely affected both by increased supplies of new crop offerings, the decline in corn and lower dressed pork values. Receipts and shipments at St. Louis, as reported by the National Stock Yards, were as follow s: Receipts O ct. 1926 Cattle H ogs H orses Sheep and Calves...... 163,112 ..............................286,357 and M u les...... 4,631 .............................. 67,303 Sept. 1926 Shipments O ct. 1925 185,144 159,429 296,144 307,365 5,747 8,923 91,465 59,825 O ct. 1926 Sept. 1926 O ct. 1925 109,530 130,980 102,490 213,262 209,939 217,917 4,569 6,111 8,064 40,902 67,287 34,359 Cotton — The indicated yield of cotton in this district, based on the Novem ber 1 condition, was estimated at 3,339,000 bales, an increase of 433,000 bales over the October 1 estimate, and comparing with 3,456,000 bales harvested in 1925. W eather has been generally favorable for gathering the crop and the movement to market continues heavy. D e mand has been good, particularly from domestic spinners, and prices have held fairly steady. Be tween October 15 and Novem ber 15 the middling grade in St. Louis ranged from 1 2 ^ to 12j4c. Stocks in Arkansas warehouses on November 12 amounted to 575,437 bales, against 407,253 bales on the same date in 1925. Rice — The crop in Arkansas and Missouri, based on the Novem ber 1 condition, is estimated at 10,276,000 bushels, against 8,339,000 bushels pro duced last year. Threshing is rapidly nearing com pletion, and quality is generally high. The demand for both clean and rough rice was reported quiet, and prices were lower than thirty days earlier, also under levels prevailing at the same time last year. T obacco — Production of tobacco in this dis trict in 1926 is estimated at 300,882,000 pounds, against 314,690,000 pounds harvested last year. Stripping and preparing tobacco for the market is in progress in all districts, and a considerable amount will be ready for delivery when the market opens about December 1. W eather has been un favorable for curing the leaf, and considerable dam age is reported to crops in both barns and fields. The Burley T obacco Growers Cooperative Associa tion reports sales of the 1923 crop during October totaling 28,000,000 pounds. This organization has announced it will dispose of this year's crop both at auction over the floors of its own houses and by private sale. Com m odity Prices — Range of prices in the St. Louis market between October 15, 1926 and N ovem ber 15, 1926, with closing quotations on the latter date and on November 15, 1925, follow : Close W h ea t H ig h L ow N ov. 15, 1926 N ov. 15, 1925 D ecem ber ........... per bu.$1.46*4 $1.34^4 $1.35*6 M a y ....................... " 1.50J4 1 - 4 0 1 . 4 1 N o . 2 red winter “ 1.44 1 .3 4 % $ 1 .3 4 % @ 1.35 1.74 N o . 2 hard.......................... L 4 8 1.37 1.37 @ 1.38 1.68 Com J Decem ber ........... “ .7 8 % .6 7 54 .68*6 M a y ....................... “ .8554 .77 .7 8 % N o . 2 ....................... “ .7 7 y 2 .67 .68 .85 N o . 2 white......... ** .80 .68 .68 @ .69 .87 O ats N o . 2 white......... " .4 7 % .45 .4 5 ^ Flour Soft patent........per bbl. 7.75 6.75 6.75 @ 7.50 8.50 Spring patent...... “ 8.00 6.90 6.90 @ 7.10 8.25 M iddling cotton....per lb. .1254 -12J4 .12J4 H o g s on hoof...... per cw t.14.00 10.00 10.50 @ 1 2 .0 5 10.35 $1.60*g 1.5354 1.75 1.69 * ,7 6 % .80 @ .87 @ .8 7 % @ @ A \% @ @ 8.75 8.35 .205^ @ 1 2 .0 0 F IN A N C IA L The general demand for credit in this district during the past thirty days developed declining ten dencies, and this fact, coupled with good liquidation by borrowers in both city and country, resulted in a rather marked recession in loans of the reporting member banks from the high point of the year, reached at the middle of October. Proceeds of the recent heavy marketing of crops have been largely applied to reducing loans at country banks, and these institutions have in turn, substantially cut down their commitments with city correspondents. Demand for financing the cotton movement was on a large scale, due to the record size of the crop and the desire to prevent unloading of excessive stocks on the depressed market. This demand, however, has been adequately taken care of, and in the imme diate past there has been a fair volum e of liquida tion, particularly from points in the Delta. The low price of corn has had a tendency to hold down mar keting of that staple, and settlements in certain sections where corn is the chief crop are below ex pectations. A further result of the low corn prices has been an expansion in demand for funds to carry live stock, farmers preferring to feed their grain to shipping it to market. W holesalers in the large cen ters report October settlements in large volume, and about equal to a year ago. Flour milling and lumber interests increased their commitments slightly, and somewhat less than the usual seasonal liquidation was reported by the packing and can ning industry. In the tobacco areas country and city banks are experiencing an active call for funds to finance that crop, and an increase in loans for handling the rice crop was also reported. There was a slight increase in loans based on stock exchange collateral, the total of such loans held by the report ing member banks at the middle of O ctober being at about the same level as at the end of June. D epos its of the reporting member banks and their borrow ings from this bank declined steadily during the period under review. Quotably interest rates showed no notable change, but the trend was easier, particularly since the second week of this month. A t the St. Louis banks, current quotations were as follow s: Commercial paper, 4y2 to 5 per cent; cus tom ers’ over the counter loans, 5 to 5y2 per cent; collateral loans, 5 to 5^4 per cent and brokers’ loans, 5 to 5y2 per cent. Federal Reserve Operations — During October the Federal Reserve Bank of St. Louis discounted for 232 of its member banks, against 222 in Septem ber and 226 in October, 1925. The discount rate remained unchanged at 4 per cent. Changes in the principal assets and liabilities of this institution as compared with the preceding month and a year ago are shown in the follow ing ta b le: *O ct. 16, 1926 ♦N ov. 16, 1926 *O ct. 16, 1925 Bills discounted......................................................... $36,215 Bills bought................................................................. 9,981 U . S. Securities......................................................... 19,645 Foreign loans on gold............................................................. $37,792 2,873 19,532 $32,699 21,092 20,487 262 Total bills and securities............................ $65,841 F . R . Notes in circulation................................. 46,396 Total deposits.............................................................. 82,927 Ratio and reserves to deposit and F. R . N o te liabilities.......................... 5 4 .4 % *In thousands (000 om itted). $60,197 46,652 85,054 $74,540 40,097 81,100 5 9 .6 % 4 3 .6 % Debits to Individual Accounts — The follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, cer tificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Govern ment in the leading cities of the district. Charges to accounts of banks are not included: *O ct. 1925 *O ct. 1926 E . St. Louis and N at. Stock Yards, 111....$ 50,924 El Dorado, A rk ........... ........... 11,807 Evansville, In d........... ........... 43,671 Fort Smith, A rk ......... ........... 16,031 Greenville, M iss........... ........... 5,681 Helena, A rk .................. ........... 6,306 Little Rock, A rk......... ........... 102,616 Louisville, K y .............. ........... 199,840 Memphis, Tenn............ ........... 182,049 Owensboro, K y ........... ........... 4,801 Pine Bluff, A r k ........... ........... 17,050 Quincy, 111.................... ........... 12,834 St. Louis, M o .............. ........... 801,380 Sedalia, M o .................. Springfield, M o ........... ........... 15,862 Totals.............................. $1,476,036 *T e n Months 1926 1925 $ 51,008 11,825 41,500 21,129 6,599 8,600 101,925 193,135 212,511 4,996 17,496 13,220 822,300 4,498 15,850 $491,562 122,017 405,698 133,506 45,259 48,938 805,460 1,973,055 1,496,350 54,425 $444,319 102t3SS 394,109 135,903 43,990 52,713 698,101 1,876,508 1,453,824 58,189 126,840 7,523,586 47,770 161,380 121,857 7,352,693 45,926 141,025 $1,526,592 $13,435,846 $12,921,512 *In thousands (000 om itted). Condition of B ank s- - Loans and discounts of the reporting member banks on November 17 de clined 3.6 per cent as compared with October 13, but were 1.3 per cent larger than on November 18, 1925. Deposits showed a decline of 3.3 per cent under the preceding month, but were slightly larger than on N ovem ber 18, 1925. Composite statement fo llo w s: *N o v . 17, *O ct. 13, ♦N ov. 18, 1926 1926 1925 .. f31 Loans and discounts (incl. rediscounts) Secured by U . S. G ov’ t, obligations...........$ 6,791 Secured by other stocks and bonds.......... ... 194,842 A ll other loans and discounts...................... ... 313,980 Total loans and discounts.................................. ...$515,613 Investments U . S. Gov’ t, securites....................................... Other securities.................................................... Reserve balance with F . R. bank............... ... ... 48,510 7,750 Deposits N et demand deposits......................................... ... 399,221 Government deposits......................................... Bills payable and rediscounts with Federal Reserve Bank, Secured by U . S. G ov’ t, obligations... 9,932 1-31 $ 6,887 188,221 339,873 33 $ 7,039 192,838 308,598 $534,981 $508,475 62,391 116,100 55,808 112,019 $178,491 48,067 8,642 $167,827 51,107 8,254 415,569 218,319 5,176 399,465 213,854 1,298 $639,064 $614,617 6,842 14,940 3,720 16,117 *In thousands (000 om itted). tDecrease due to consolidation. These 31 banks are located in St. Louis, Louisville, Mem phis, Little Rock and Evansville, and their total re sources comprise approximately 53.5 per cent of the resources of all member banks in the district. (Compiled Nov. 23, 1926) B U SIN E SS CONDITIONS IN T H E U N ITED S T A T E S Industrial activity continued in large volume in Octo ber, while the general level of prices declined slightly. Notwithstanding the seasonal increase in borrowing for commercial purposes, the volume of bank credit outstand ing declined in recent weeks reflecting the continued liqui dation of loans on securities. P R O D U C T IO N — Production in basic industries, as measured by the Federal Reserve Board’s index, which makes allowance for the usual seasonal variations, showed while department store stocks increased more than is usual in September and October and at the end of October were larger than in 1925. Freight car loadings were in record volume in October and November, due to unusually large shipments of coal and ore and a continued heavy move ment of other commodities. P RICES — Wholesale prices of nearly all groups of commodities declined in October and November. Prices of bituminous coal, however, advanced sharply as the result Index of 22 basic commodities adjusted for seasonal variations. Latest figure, O c t o b e r s 122. Latest figure, O c t o b e r s 149.7. little change in October as compared with September. Tex tile mill activity and the daily average output of iron and steel was maintained during October, but in November there was a decrease in steel production. The output of bituminous coal was stimulated by export and bunker de mand and attained new high records in October and November and petroleum production was also large. There was a sharp decline in automobile production and the output of cars was smaller in October than in any month since January. The volume of building activity as indicated by the value of contracts awarded, has declined for the past three months, as is usual at this season of the year, and has been throughout the period at a slightly lower level than during the exceptionally active autumn season of 1925. Residential contracts during the same period have been smaller than a year ago, while those for engineering pro jects and public works have been larger. T R A D E — Distribution of commodities at wholesale declined in October contrary to the usual trend for that of foreign demand caused by the British coal strike, but recently there has been some decline in coal prices. The price of raw cotton, after falling rapidly in September and early October, has been steady in recent weeks. Prices of non-agricultural commodities, as classified in the Bureau of Labor Statistics price indexes, declined slightly between September and October, while those of agricultural pro ducts declined about 2 per cent to the lowest level since the summer of 1924. B A N K C R E D IT — Seasonal growth in loans for com mercial and agricultural purposes at member banks in lead ing cities has been accompanied by continued liquidation of loans on securities, with the consequence that the total volume of loans and investments of these banks in the middle of November was considerably smaller than a month earlier. At the Reserve banks the decline in the volume of member bank credit has been reflected in a reduction of M onthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages of first 22 days in November, M onthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for first three weeks in Novem ber. month, and was in smaller volume than in October of any year since 1922. Sales of department stores showed the usual seasonal growth in October, but owing partly to less favorable weather conditions and to a smaller number of trading days, were at a somewhat lower level than in the same month of last year. Sales of mail order houses were also smaller than a year ago. Stocks of merchandise carried by wholesale firms were slightly smaller than a year ago, the total bills and securities to a level $37,000,000 below the corresponding date in 1925. Discounts for member banks were in about the same volume as a year ago, while holdings of acceptances and of United States securities were smaller. Easier conditions prevailed in the money market in November; rates on prime commercial paper declined from 4^ -424 Per cent in October to 4>4 per cent in November and there was also a reduction of % per cent in the rates on bankers acceptances. 1922 1923 192* 1925 1926
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