The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY REVIEW O f Agricultural, Industrial, Trade and Financial Conditions in the Eighth Federal Reserve District RELEASED FOR PUBLICATION ON THE AFTERNOON OF NOVEMBER 30, 1937 FEDERAL RESERVE District Summary Nov. 1, 1937, comp, with Agriculture: Yield 1935 1923-36 Av. Estimated yield of 7 crops................. +63.4% + 9.4% Oct. 1937, comp, with Livestock: Sept. 1937 Oct. 1936 Receipts at National Stock Yards.....— 3.0% — 6.5% Shipments from aforesaid Yards...... — 7.3 + 1.0 Production and Distribution: Sales by mfrs. and wholesalers.......... —14.8 Department store sales.......................+ 2.6 Car loadings......................................... + 5.1 Building and Construction: . ., . 1 f Number...— 5.2 Bldg.permits, incl. repairs j Cogt _25.0 Value construc. contracts awarded....— 8.2 Miscellaneous: n • 1 { *i S Number.......... + 18.8 Commercial failures } Liabilities...... I 68.5 Consumption of electricity................. — 7.2 Debits to individual accounts............ + 14.8 —20.3 — 2.0 — 0.9 —11.3 —71.1 — 17.2 —26.9 -5 4 .4 — 1.6 + 0.1 Nov. 10/37 comp, with Member Banks (24): O ct.i3,’ 37 N o v .il/3 6 Gross deposits......................................— 1.7% — 7.8% Loans.................................................... + 2.0 — 16.5 Investments......................................... .— 2.5 — 13.9 ECESSIO N ARY trends in general business in the Eighth District, which began in the ' late summer, continued at an accelerated pace during October and the first half of November. Distribution of merchandise and activities at manu facturing establishments underwent sharp contrac tion from the recently high levels, and in a majority of instances, fell below the rate prevailing at the corresponding period a year ago. In contrast with the first half of the year, purchasing by merchants and the public was on a conservative and cautious scale, and there was a general disposition in all quar ters to await developments before expanding com mitments. This attitude was emphasized by the de cline in commodity prices on both spot and future markets and continued weakness in the security markets. Of the wholesaling and jobbing lines in vestigated by this bank a large majority showed de creased in volume of October sales as compared with the same month in 1936, also as contrasted with the preceding month this year. Among those record ing declines in both comparisons were boots and shoes, dry goods, drugs and chemicals, groceries R BANK OF ST. LOUIS and hardware. A relatively much more favorable showing was made in retail trade than in wholesale distribution, both in the large urban centers and the country. October sales of department stores in the principal cities were slightly greater than in September, and only 2.0 per cent below the high total of October a year ago. Retail sales of automo biles, while about one-fourth smaller than in Sep tember, were slightly larger than in October, 1936. Activities in the iron and steel industry declined sharply, reflecting curtailment of new orders being placed with mills, foundries and machine shops. Backlogs are being rapidly reduced, and manufac turers are adjusting their output accordingly. Pro duction of steel ingots at mills in this general area recorded a new low for the year at mid-November. Producers and distributors of building materials, in cluding lumber, glass, fire clay products, cement and quarry products, reported demand for their goods at the lowest ebb since the recovery period. Con sumption of electric power by industrial users in the principal cities during October fell slightly be low the preceding month and a year ago. Production of bituminous coal at mines of the district was 10.9 per cent larger than in September, but about 2 per cent belowTthat of October, 1936. Contraction in the industrial field wras reflected in a decline in employ ment and payrolls from September to October. As reflected in the dollar value of building permits issued in the leading cities, and contracts let, con struction in October showed declines, both as com pared with the preceding month and a year earlier. As a result of ideal fall conditions generally throughout the district, crop prospects improved further during October and the first half of Novem ber. Yields of all the major productions, according to the U. S. Department of Agriculture’s report based on November 1 conditions, exceeded those of a year ago, and in most instances are larger than the five-year (1928-1932) average. The estimate for cot ton for the E ighth, District on November 1 was 4,681,000 bales, an increase of 267,000 bales over the October 1 forecast and comparing with 3,404,000 bales produced in 1936. Corn is also a bumper crop, Page 1 with per acre yields in Indiana and Illinois the high est since crop reporting began in 1866. The season was especially auspicious for fruits and vegetables, and final harvest returns indicate above average pro duction for virtually all species. Harvesting of tobacco has been completed, and reports from a majority of the chief producing sections indicate a crop above average, both in point of size and quality. Gauged by sales of department stores in the principal cities, the volume of retail trade in October was 2.6 per cent greater than in September and 2.0 per cent less than in October, 1936; cumulative total for the first ten months this year was 8.9 per cent in excess of that for the comparable period in 1936. Combined sales of all wholesaling and jobbing interests reporting to this bank in October were 14.8 per cent and 20.3 per cent smaller, respectively, than a month and a year earlier; for the first ten months the aggregate was 9.1 per cent greater than for the like interval in 1936. The dollar value of per mits issued for new buildings in the principal cities in October was 7.4 per cent smaller than in Septem ber and about two-thirds less than in October, 1936; cumulative total for the first ten months was 11 per cent smaller than for the same period last year. Dollar value of construction contracts let in the Eighth District in October was 17.2 per cent and 8.2 per cent smaller than last year and last month, respectively; cumulative total for the year was 14 per cent less than last year. Freight traffic of railroads operating in this dis trict, according to officials of the reporting roads, declined in more than the expected seasonal amount during October and the first week of November. The volume was slightly less than during the same period in 1936, but still measurably greater than in all other preceding years since 1930. Passenger traf fic of the reporting lines again showed a substantial increase in October over the corresponding month a year earlier. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in October was 13 per cent less than in September, but more than 9 per cent greater than in October, 1936; for the first ten months this year the cumulative tonnage show’s an increase of 4 per cent over the same interval a year ago. Reports relative to collections during October and early November reflected less satisfactorily re sults than during preceding months this year. Re tailers in the rural areas, particularly in the south, reported some slowing down in payments, ascribed to the decline in prices of cotton. Wholesalers and jobbers in the chief distributing centers reported November 1 settlements somewhat below a year Page 2 ago. Fewer customers were taking advantage of cash discounts than heretofore. Questionnaires ad dressed to representative interests in the several lines scattered through the district showed the fol lowing results: Excellent Good Fair Poor October, 1937......7~2A% 35.1% 52.0% 10.5% September, 1937....... 4.2 50.0 40.0 5.8 October, 1936....... 9.8 52.8 36.0 1.4 Commercial failures in the Eighth Federal Re serve District in October, according to Dun and Bradstreet, numbered 19, involving liabilities of $173,000, which compares with 16 insolvencies in September with liabilities of $550,000, and 26 de faults for a total of $379,000 in October, 1936. Detailed Survey MANUFACTURING AND W H O LESALIN G Net Sales 10 months 1937 Oct. 1937 comp, with same compared with period 1936 Sept. ’ 37 Oct. ’ 36 Boots and Shoes......... — 20.3% — 22.0% + 12.0% Drugs and Chemicals.. — 7.2 + 5.9 — 5.3 — 15.0 — 24.5 + 1.4 + 32.4 Electrical Supplies...... — 14.0 + 0.2 — 18.4 + 9.9 + 18.1 + 1.5 — 6.4 — 1^.5 — 20.2 — 12.2 + 14.7 Lines of Commodities All above lines......... — 14.8 — 20.3 + 9.1 Stocks Oct. 31, 1937 comp, with Oct. 31, 1936 - 5.5% h 7.8 -32.5 -27.0 -13.2 - 8.5 -24.4 + 19.8 Automobiles — Combined passenger car, truck and taxicab production in the United States in Octo ber was 329,876 against 171,203 in September and 224,688 in October, 1936. Boots and Shoes — The decrease in sales of the reporting firms from September to October, as shown in the above table, was seasonal in character, but considerably greater than the average during the past several years. The decrease as compared with a year ago is accounted for chiefly in the smaller volume of advance ordering. Prices of finished materials were practically unchanged, and contin ued measurably higher than a year earlier. Produc tion during October and early November showed somewhat more than the usual seasonal decline. Clothing — October sales of the reporting inter ests were 7 per cent smaller than during the pre ceding month and 2.5 per cent in excess of the Octo ber, 1936, total. Inventories continued to decrease during October, stocks on hand as of November 1 being approximately 15 per cent smaller than a month earlier, but 17 per cent in excess of those on the same date in 1936. Purchasing of apparel for spring distribution is reported generally disappoint ing, due to both price and style uncertainties. The general price trend was downward in sympathy with cotton and other raw materials. Drugs and Chemicals — The general decline in industrial activities since the late summer was re fleeted in a noticeable curtailment in demand for heavy drugs and chemicals from the manufacturing trade and was partly responsible for the smaller volume in business of the reporting firms in Octo ber as contrasted with a month and a year earlier. The unusually mild fall has held down the move ment of all descriptions of cold weather goods. Dry Goods — A general slowing down in busi ness during October, both as compared with a month and a year earlier, was reflected in reports of firms in virtually all sections of the district. Un seasonably warm weather has militated against the movement of seasonal items, and due to the sharp decline in raw materials, notably cotton, advance ordering has been reduced to relatively small pro portions. Demand for ready-to-wrear clothing and some other specialties continues active, and equal in volume to a year ago. Electrical Supplies— For the sixteenth consecu tive month sales in this classification during October exceeded those of the corresponding month a year earlier, and the October total was the largest for the month since 1929. Ordering of holiday goods was reported in substantial volume and the movemement of household specialties and radio material was maintained at, or near the high levels of recent months. Outlet through the building industry showed further narrowing tendencies. Furniture — The increase from September to October in sales of the reporting firms was contraseasonal in character and occasioned by settlement of strikes which had existed at plants of important firms during the earlier month. A considerable vol ume of business accumulated during the shutdowns was released in October. Advance ordering of holiday goods was reported only slightly below the same time in 1936. Groceries — Decreases in sales of the reporting firms in October as compared with a month and a year earlier were quite generally distributed through all lines, but most marked in canned goods and other preserved foods. This was accounted for partly by the unusually large quantities of fruits and vege tables which farm and other families were able to put up because of large crops and relatively low prices of these products. Hardware — According to the reporting inter ests in this classification there was a rather marked decline in demand for staple goods during October, particularly in builders’ hardware and kindred lines. The late fall has adversely affected the movement of all descriptions of seasonal merchandise. Sales of hunters' supplies, sporting goods and holiday spe cialties were reported in substantial volume. Iron and Steel Products — In virtually all sec tions of the iron and steel industry in this district, the rate of activities during October and the first half of November declined sharply from the similar period immediately preceding and for the first time in a number of months fell below that of the corre sponding time a year earlier. General purchasing of finished steel was at a minimum, there being a gen eral disposition on the part of consumers to use up inventories acquired earlier in the year. Schedules at mills have been considerably reduced, despite which fact the volume of unfinished orders has re ceded markedly. This is true particularly of makers of sheets, plates, strip and other flat rolled materials. Manufacturers of specialties, such as stoves, heating apparatus, household appliances, etc., have also cut their production in adjustment with smaller volume of incoming orders. An exception was in the case of farm implement and tractor makers who maintained operations during October at, or about the high rate which had marked the preceding several months; however, since November 1 there has been some slowing down even in this industry. Placement of automotive castings has been disappointing, and with miscellaneous work also declining, the rate of operations at jobbing foundries averaged only three to four days per week, as against five to six days earlier in the year. Iron and steel jobbing and warehouse interests reported October volume about on a parity with September, but approximately 8 per cent below the October, 1936, total. Demand for all descriptions of oil country goods continues heavy and has served to partly offset lessened require ments elsewhere. Steel ingot production at mills in this general area underwent a further sharp decline, the rate at mid-November being 15.1 per cent of capacity, which compares with 60 per cent a month earlier and the peak of 94 per cent at the middle of May. Pig iron producers serving melters in this dis trict have reaffirmed current prices for first quarter of 1938 delivery and most prices of finished steel were unchanged. Iron and steel scrap, however, sus tained a further decline, heavy melting steel and some other important items reaching the lowest point in many months. For the entire country, ac cording to the magazine “ Steel” , production of pig iron in October totaled 2,891,026 tons, the lowest since September, 1936, and comparing with 3,417,960 tons in September and 2,991,794 tons in October, 1936. Production of steel ingots in the United States in October amounted to 3,203,447 tons against 4,029,921 tons in September and 4,216,536 tons in October, 1936. Page 3 R E TA IL TR A D E Department Stores — The trend of retail trade in the Eighth District, as reflected in statistics of department stores in the principal cities which re port to this bank, is shown in the following compar ative statement: Stocks ___________ Net Sales_____________ on Hand Oct. 1937 10 mos. 1937 Oct.31,’37 compared with to same comp, with Sept. 1937 Oct. 1936 period ’ 36 Oct.31/36 El Dorado, Ark.... .....+ 20.6 % + 3.2% + 9.0% h 4.2% Ft. Smith, Ark.... .....+22.1 — 4.0 + 6.4 - 8.0 Little Rock, Ark... .... + 7.4 — 8.6 + 4.9 -12.9 Louisville, K y...... — 2.0 + 8.8 -12.0 Memphis, Tenn.... ....+ 19.6 — 6.6 -21.2 + 8.0 Pine Bluff, Ark.... ....+ 16.6 — 13.1 + 2.4 -14.9 St. Louis, M o...... .... — 4.3 + 0.3 -12.1 + 9.8 Springfield, M o.... . , +13.0 + 0.4 + 10.3 - 3.1 — 6.2 All Other Cities.... .... + 18.7 + 3.0 -19.1 8th F. R. District. ....+ 2.6 — 2.0 + 8.9 -13.5 Stock Turnover Jan. 1, to Oct. 31, 1937 1936 2.37 2.25 2.17 2.21 2.21 2.48 3.32 3.52 2.55 3.74 2.02 2.33 3.20 3.41 2.09 2.18 2.46 2.62 2.98 3.18 Percentage of accounts and notes receivable outstanding October 1, 1937, collected during Octo ber, by cities: Installment Excl. Instal. Accounts Accounts El Dorado... ............. % ..... ...... 51.3% Fort Smith.. .......43.6 Little Rock. ...... 14.5 .... .......43.4 Louisville ......... 10.4 ..... ......46.4 Memphis .... .......44.7 Installment Excl. Instal. Accounts Accounts Pine Bluff............... %. ...........32.9% Springfield .............. . ..........30.3 St. Louis........... 19.1 ............54.9 Other Cities...... 15.1 ............48.1 8th F. R. Dist.,17.3 ,............50.3 Specialty Stores — October results in men’s furnishings and boot and shoe lines are shown in the following table: Stocks ___________ Net Sales_____________ on Hand Oct. 1937 10 mos. 1937 Oct.31,’ 37 compared with to same comp, with Sept. 1937 Oct. 1936 period ’36 Oct.31,’ 36 Men’ s Furnishings....+ 20.6 % — 3.7% + 5.6% + 1 7 .8 % Boots and Shoes....... — 13.8 + 5.4 + 15.6 + 22.8 Stock Turnover Jan. 1, to Oct. 31, 1937 1936 2.08 2.19 5.48 5.76 Percentage of accounts and notes receivable out standing October 1, 1937, collected during October: Men’s Furnishings............... 32.3% Boots and Shoes........................39.1% MINING Stocks of bituminous coal continued to increase during September, total reserve in the hands of in dustrial users and retailers on October 1 amounting to 46,036,000 tons, an increase of 2,185,000 tons over September 1 and comparing with 34,604,000 tons on October 1, 1936. An increase in consumers’ stocks usually occurs during the fa ll; in the present in stance the increase is superimposed on the relatively large carryover from the first quarter of 1937, when buying was heavy in anticipation of a strike on April 1. Estimated production of soft coal for the entire country in October was 40,040,000 tons, against 39,055,000 tons in September and 43,321,000 tons in October, 1936; for the first ten months this year cumulative tonnage amounted to 367,102,000 tons as against 346,435,000 tons for the comparable period in 1936. At mines in this general area October out put was 11 per cent smaller than in September and 2.1 per cent greater than in October, 1936; for the first ten months tonnage lifted was greater by 3.6 per cent than during the like interval in 1936. Illi nois mines produced 4,651,359 tons in October Page 4 against 4,087,467 tons in September and 4,799,164 tons in October, 1936. There were 147 mines in operation in October and 35,695 men on payrolls, which compares with 138 active mines and 33,172 operatives in September. AGRICULTURE Combined receipts from the sale of principal farm products and Government payments to farmers in states including the Eighth District during the periods January-September, 1935, 1936, 1937, and during September, 1936 and 1937, are given in the following table: _____ January-September (In thousands of dollars) 1935 1936 1937 Indiana................... $180,236 $197,483$223,754 Illinois.................... 281,954 331,589 367,653 Missouri.................. 169,536 180,063 200,249 Kentucky................ 95,422 78,435 117,230 70,623 65,767 86,693 Tennessee............... Mississippi.............. 68,263 68,109 92,419 60,993 52,566 74,477 Arkansas................. Totals.................. 927,027 974,012 1,162,475 September 1936 1937 $ 23,455 $ 25,589 32,305 35,628 23,437 27,706 7,963 8,804 9,544 9,895 27,564 26,072 15,366 17,128 139,634 150,822 Quite generally through the district October and early November weather was mild and very favorable for maturing and harvesting fall crops. According to the U. S. Department of Agriculture and the agricultural departments of the several states, indicated yields as of November 1 for the principal productions were considerably above a year ago; in many instances greater than average. Killing frosts were late and in only a limited number of localities precipitation was sufficiently heavy to hamper harvesting operations. Among the crops especially benefitted by the auspicious weather con ditions were cotton, corn, tobacco, rice, soybeans and a number of fruits and vegetables. In addition to improving the status of crops, the auspicious weather permitted of good progress of fall farm work of all kinds, though in some areas plowing was delayed by hard soil early in the autumn and interruptions from rains during the first three weeks of October. Generally, however, farm schedules are well up to the seasonal average. For the entire country, excluding cotton, crop yields are expected to average about 5.1 per cent higher than the 1923-1932 average, but they will be about one-fourth above the very low average of the last four years. As an offset to the high production in the mat ter of returns to farmers has been the sharp decline in prices of many important products, new low levels for the season being recorded during the period covered by this review. As of November 6, the farm products group of the Bureau of Labor Statistics Price Index stood at 77.7 per cent of the 1926 aver age, which compares with 82.7 per cent on October 9, 84.2 per cent on November 7, 1936, 77.5 per cent on November 9, 1935 and 55.6 per cent on Novem ber 11, 1933. Corn — Based on the November 1 condition, the yield of corn in this district is estimated at 371,275,000 bushels, an increase of 14,157,000 bushels over the October 1 forecast and comparing with 202,726,000 bushels harvested in 1936 and the 14-year (19231936) average of 327,361,000 bushels. In Illinois, the principal corn producing state of the district, the yield of 46 bushels per acre is the highest since crop estimating records began in 1866. Average yield in Indiana of 45 bushels per acre is also the highest of record for that state. Husking returns indicate gen erally high quality, with less than the usual mois ture content. Damage from frost was negligible. C otton— Further improvement in cotton pros pects during October and early November practical ly insure the largest yield of record in this district. The season from planting time has been generally favorable, and with few interruptions weather con ditions have been auspicious for harvesting the crop and getting it to the gins. On October 23 heavy to killing frost and freezing temperatures occurred, stopping further growth. Most of the unpicked cot ton as of November 1 was open and subject to weather damage, but conditions during the first half of November favored getting out this part of the crop. Prices receded further, reaching a new low for the season in the first week of November. In the St. Louis market the middling grade ranged from 7.19c to 8.15c per pound between October 15 and November 15, closing at 7.80c on the latter date, which compares wTith 8.05c on October 15 and 13.20c on November 16, 1936. In its report as of November 1 the U. S. De partment of Agriculture estimates Eighth District production of cotton at 4,681,000 bales, an increase of 267,000 bales over the October 1 forecast and comparing with 3,404,000 bales harvested in 1936 and the 14-year (1923-1936) average of 2,763,000 bales. As indicating the rapidity with which the crop is moving, receipts at Arkansas compresses from August 1 to November 12 totaled 1,237,065 bales against 1,030,369 bales during the correspond ing period a year ago. Stocks on hand as of Novem ber 12 totaled 885,502 bales against 667,365 bales on the corresponding date in 1936. Fruits and Vegetables — Latest harvesting re turns tend to better estimates of yields of fruits and vegetables made earlier in the season. Harvest ing of apples was about completed in the third week of October, and the movement to market has been in considerable volume, despite less favorable prices. In states including the Eighth District, the apple crop is estimated by the U. S. Department of Agri culture in its report as of November 1, at 26,669,000 bushels, against 5,590,000 bushels in 1936 and the 5-year average (1928-1932) of 15,199,000 bushels. In these states the peach yield is estimated at 10,238,000 bushels, against 3,422,000 bushels in 1936 and the 5-year average of 7,265,000 bushels; grapes 44,300 tons, against 25,060 tons in 1936 and the 5year average of 33,010 tons; sweet potatoes, 19,813,000 bushels, against 15,031,000 bushels in 1936 and the 5-year average of 17,483,000 bushels. Production of white potatoes in the district proper is estimated at 12,694,000 bushels, as against 8,333,000 bushels in 1936 and the 14-year average of 13,562,000 bushels. Livestock—Universally throughout the district the condition of livestock was reported in better condition than in any similar period during the past several years. Favorable fall weather and abundant supplies of feed and forage have contributed materi ally to the wellbeing of herds. While most animal prices declined during October, the average was still considerably higher than a year ago. Poultry and dairy products were slightly higher than a year ago. Developments in the cattle feeding situation during October continued to point to a considerable increase in feeding in the Corn Belt States in the winter and spring of 1937-1938 over a year earlier. The number of lambs fed this winter probably will be larger than a year ago in the Corn Belt States, owing to larger and lower-priced feed supplies. Receipts and shipments at St. Louis as reported by the National Stock Yards were as follows: _________ Receipts_______ Oct., Sept., Oct., 1937 1937 1936 Cattle and Calves..... 161,253 181,185 154,266 Hogs ......................... 186,406 141,084 232,203 Horses and Mules..... 3,820 4,451 6,673 Sheep ........................ 67,134 104,832 54,408 Totals................... 418,613 431,552 447,550 ______ Shipments________ Oct., Sept., Oct., 1937 1937 1936 111,123 122,151 83,278 115,086 91,383 149,062 3,374 4,273 5,963 21,421 52,849 10,219 251,004 270,656 248,522 Rice — Harvesting and threshing of rice in Ar kansas were somewhat retarded by rains in the first and third weeks of October. Prospective yield on November 1 remained the same as was indicated on October 1, or 54 bushels per acre. The yield is esti mated at 8,640,000 bushels as compared with 7,950,000 bushels in 1936 and the 5-year average (19281932) of 8,502,000 bushels. Tobacco— Based on November 1 conditions the U. S. Department of Agriculture estimates the Eighth District tobacco yield at 278,916,000 pounds an increase of 3,072,000 pounds over the October 1 forecast and comparing with 176,784,000 pounds harvested in 1936 and the 14-year (1923-1936) aver age of 287,796,000 pounds. Reports as of midNovember indicate that there has been only a partial Page 5 season for handling of tobacco, preventing taking down any great quantity; however, farmers are watching closely and taking down all the tobacco that is at all in condition and stripping of burley is being done in a limited way. The early and middle cuttings of burley are practically cured and will be stripped on the very first season, but late burley is reported not faring so well. Some progress has been made in the air-cured dark districts toward bulking and stripping the crop. It appears that quality, color and length of the leaf are coming up to earlier expectations. In the eastern fired districts, some of the early tobacco has been taken down, is practically cured and shows high quality. The second cutting is not thoroughly cured, and will acquire an additional week or ten days to complete the process. In all districts farmers are making extraordinary efforts to have their tobacco ready for the opening of the markets early in December. COM M ODITY PRICES Wheat *Dec................. *May ............. *July ............. *No. 2 red wit *No. 2 hard Corn *Dec................. *May ............. *July ............. *No. 2 mixed *No. 2 white Oats *Dec................. *May ............. *July ............. *No. 2 white Flour Soft Patent.... Spring “ .... Low ..per bu..$l.0 0 /2 $ .8 5 ^ “ 1.0034 .8 6^4 “ .985$ .824 sr “ 1.03^4 .93 ... ... 1.05 ... ... ... ... ... ... ... ... ... .5934 .61 “ “ “ .33H .33H .32H .325/8 .284 .305/8 “ .34^2 .32 ..per bbl. 5.85 .. “ 6.95 .5334 .5 7 4 .5354 .5 7 # .5 7 ^ .5254 .5 4 ^ .5 7 y .52*4 .54 4.65 6.05 .per lb. .0815 .0719 .per cwt.11.15 7.75 *Nominal quotations. .8 9 ^ .9054 .8 4 ^ .99 1.00 .94 “ “ “ “ “ .66 .68 .69V2 Close Nov. 15, 1937 Nov. 16, 1936 $ $ 1.1824 1.155/8 1.027/s 1.23 y 1.23 4 1.05 H .98/g ■94H 1.12 1.09 .3234 .32/s .305/8 .3 4 / 2 .4 7 y 4.80@ 5.40 6.25 @ 6.60 .0780 7.75@ 9.00 5.45@5.90 7.25@7.35 .1320 7.50@9.60 TRAN SPORTATION The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 92,268 loads in October, as against 87,820 loads in September and 93,067 loads in Octo ber, 1936. During the first nine days of November the interchange amounted to 25,769 loads against 27,233 loads during the corresponding period in October and 25,726 loads during the first nine days of November, 1936. Passenger traffic of the report ing roads in October increased 14 per cent in num ber of passengers handled and the same amount in revenues as compared with the corresponding month last year. For the entire country, loadings of revenue freight for the first 45 weeks this year, or to Novem Page 6 BUILDING The dollar value of building permits issued for new construction in the five largest cities of the dis trict in October was 7.4 per cent smaller than in September and 75.2 per cent less than in October, 1936. According to statistics compiled by the F. W . Dodge Corporation, construction contracts let in the Eighth Federal Reserve District in October amounted to $12,687,900 which compares with $13,818,600 in September and $15,327,500 in October, 1936. Building figures for October follow : (Cost in thousands) Range of prices in the St. Louis market be tween October 15, 1937, and November 15, 1937, with closing quotations on the latter date and on November 16, 1936, follows: High ber 6, totaled 33,788,309 cars, against 31,030,606 cars for the corresponding period in 1936 and 27,332,082 cars in 1935. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in October was 140,600 tons, against 162,198 tons in September and 128,931 tons in October, 1936; cumu lative tonnage for the first ten months this year was 1,475,624 tons, against 1,419,825 tons for the like period in 1936. Evansville.... Little Rock Louisville.... St. Louis.... New Construction Permits Cost 1936 1937 1936 1937 16 49 $ 46 $ 115 21 32 109 36 124 104 277 525 289 298 400 3,306 248 309 436 756 Oct. Totals 678 Sept. “ 691 Aug. “ 668 812 795 620 1,195 1,290 1,704 4,811 1,590 2,571 Repairs, etc Cost Permits 1937 1936 1937 1936 153 124 $ 103 $ 48 110 103 28 37 54 63 45 98 156 146 61 69 178 206 113 340 642 702 711 677 639 615 359 782 570 567 466 557 • CONSUMPTION OF ELE C TR IC ITY Public utilities companies in six large cities of the district report consumption of electric current by selected industrial customers in October as being 7.2 per cent smaller than in September, and 1.6 per cent less than in October, 1936. Detailed figures follow : Oct., (K .W .H . No. of in thous.) Custom 1937 ers K .W .H . Evansville..... 40 2,984 Little Rock.. 35 2,064 9,164 2,483 1,198 Pine Bluff.... 20 22,982 Totals..... 388 *Revised figures. 40,875 Sept., 1937 K .W .H . 2,172 2,488 9,931 2,500 865 26,100 44,056 Oct. 1937 comp, with Sept. 1937 + 37.4% — 17.0 — 7.7 — 0.7 +38.5 — 11.1 — 7.2 Oct., Oct. 1937 1936 comp, with K .W .H . Oct. 1936 2,970 + 0.5% 2,076 — 0.6 8,810* + 4.0 — 4.1 2,590 1,089 + 10.0 24,017 — 4.3 41,552 — 1.6 LIFE INSURANCE Sales of new, paid-for, ordinary life insurance in states including the Eighth District during Octo ber, the preceding month, and a year ago, together with the cumulative totals for the first ten months this year and the comparable period in 1936 are shown in the following table: (In thousands of dollars) Arkansas.......... Illinois............. Indiana............ Kentucky......... Mississippi....... Missouri........... Tennessee........ Cumulative Totals Oct., Sept., Oct., 1937 1936 1937 1936 19 37 3,567 $ 3,430 $ 4,067 $ 38,630 $ 37,875 44,373 481,804 451,657 45,142 38,721 141,361 134,303 12,942 13,387 11,981 64,220 7,451 6,642 6,678 65,888 3,310 4,108 35,496 32,069 3,426 188,331 177,821 14,890 16,324 16,986 83,102 76,263 7,354 7,578 7,557 97,313 Totals........... United States... 579,704 86,552 500,434 Cumul. change + 2.0% + 6.7 + 5.3 + 2.6 + 10.7 + 5.9 + 9.0 96,049 1,034,612 974,208 + 576,873 6,031,079 5,771,758 + 6.2 4.5 MONEY AND BANKING During the past thirty days demand for bank credit from virtually all the principal borrowing groups continued the upward trend which has been in evidence since the end of last July. Requirements of mercantile and manufacturing interests were in considerably larger volume than at any similar period during the past four years. While still in large volume, liquidation at commercial banks in both the large centers and the country was measur ably below new borrowings and extensions. Demand for funds to finance the cotton and tobacco crops was substantially greater than a year ago, and in the case of loans based on tobacco, no material volume of liquidation is looked for before well into Decem ber, when the crop begins to move through district markets. In the cotton areas country banks gener ally have in their portfolios all the Commodity Cred it Corporation paper they can handle and are pass ing the overplus to their city correspondents. Com mitments of flour milling and grain handling inter ests were reduced in somewhat greater than the usual seasonal amount. Member Banks — Between October 13 and November 10, total loans of reporting member banks in the principal cities increased 2.0 per cent and on the latter date were 16.5 per cent greater than on the corresponding date in 1936, incidentally the highest in more than four years. Total investments of these banks during the four-week period declined 2.5 per cent and 13.9 per cent, respectively, as con trasted with a month and a year earlier. Gross de posits receded 1.7 per cent and on November 10 were 7.8 per cent less than on the corresponding report date in 1936. Reserve balances receded slight ly, but were still measurably larger than a year ago. Statement of the principal resource and liability items of the reporting member banks follow s: (In thousands of dollars) Loans— total .................................................. Commercial, industrial, and agricultural: On securities........................................... . Otherwise secured and unsecured........ Open market paper.................................... Loans to brokers and dealers................. . Loans to banks..................................... Other loans: On securities..................................... Otherwise secured and unsecured.. Investments—total ............................... U. S. Gov’t obligations..................... Obligations guaranteed by U. S. G< Other securities..................................... Gross deposits......................................... Demand deposits................................. Time deposits....................................... Borrowings ............................................. Nov. 10, Oct. 13, 1937 1937 .$322,088 $315,921 Nov. 11, 1936 $276,555 . 51,734 . 146,139 . 10,026 . 4,887 s 12,973 . 45,962 . 8,554 53,676 142,338 11,599 5,697 12,894 45,881 5,821 * * * 5,877 * 43,623 7,772 . , . . . . , . . 10,713 27,302 345,214 197,669 45,726 101,819 896,756 706,402 190,354 * * 390,903 224,226 58,552 108,125 944,960 758,958 186,002 11,935 29,878 336,532 192,941 46,812 96,779 881,482 691,604 189,878 Above figures are for 24 membe. _____ nks ... in St. ......... Louis,................... Louisville, Memphis, Little Rock and Evansville. Their resources comprise approxi mately 61.6% of the resources of all member banks in this district. * Comparable figures not available. The aggregate amount of savings deposits held by selected member bank on November 3 was 0.3 per cent smaller than on October 6, but 4.1 per cent greater than on November 4, 1936. Changes in interest rates were negligible. At St. Louis downtown banks, as of the week ending November 15, prevailing rates were as follow s: Cus tomers' prime commercial paper, \y2 to Sy2 per cent; collateral loans, 2y2 to 6 per cent; interbank loans, Zy> per cent; loans secured by warehouse receipts, 2 to 5y2 per cent and cattle loans, 4 to 6 per cent. Federal Reserve Operations — The volume of the major operations of the Federal Reserve Bank of St. Louis (including its Louisville, Memphis and Little Rock branches), during October, 1937, is indicated by the following figures: Pieces Checks (cash items) handled............................... 4,937,764 Collections (non-cash items) handled................. 146,764 Transfers of funds.................................................... 5,967 Currency and coin received and counted........... 21,242,673 Rediscounts, advances and commitments........... 30 New issues, redemptions, and exchanges of securities as fiscal agent of U. S. Govt., etc.. 14,321 Bills and securities in custody— coupons clipped 16,137 Amount $1,165,774,000 33,912,000 351,824,000 38,886,000 3,008,000 11,253,000 ........................ Changes in the principal assets and liabilities of this bank are shown below : Nov. 19, 1937 (In thousands of dollars) 242 Industrial advances under Sec. 13b...... $ 85 Other advances and rediscounts............ 78 Bills bought (including participations). U. S. securities........................................... 112,212 Total earning assets.............................. . Total reserves .......................................... . Total deposits .......................................... . F. R. Notes in circulation..................... . . Industrial commitments under Sec. 13b. Ratio of reserve to deposit and F. R. Note liabilities.................... . Oct. 19, 1937 $ 247 222 78 111,385 Nov. 19, 1936 $ 488 146 87 115,809 112,617 111,932 116,530 286,338 211,944 180,778 296,449 221,075 182,126 270,097 197,388 181,602 183 1,035 1,287 72.9% 73.5% 71.3% Following are the rates of this bank for accom modations under the Federal Reserve A ct: (1) Rediscounts and advances to member banks, under Section 13 and 13a....................................................... 1 ^ % per annum (2) Advances to member banks, under Section 10b........... 2 % per annum (3) Rediscounts, purchases, and advances to member banks, nonmember banks and other financing in stitutions, under Section 13b: (a) On portion for which such institution obligated....3 % per annum (b) On remaining portion............................................... 4 % per annum (4) Commitments not exceeding six months to member banks, nonmember banks and other financing in stitutions, to rediscount, purchase, or make ad vances, under Section 13b........................................... flat (5) Advances to established industrial or commercial j 4 % to businesses, under Section 13b................................. I 5}4% per annum (6) Advances to individuals, firms and corporations, including nonmember banks, secured by direct obligations of United States under Section 13....... 4 % per annum Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this district: Oct., (In thousands 1937 of dollars) East St. Louis and Natl. Stock Yards, 111..$ 40,533 El Dorado, Ark.... 5,229 Evansville, Ind.... 31,580 Fort Smith, Ark.... 14,109 Greenville, Miss.... 8,260 Helena, Ark........... 3,267 Little Rock, Ark.... 42,848 Louisville, K y....... 163,666 Memphis, Tenn.... 180,626 Owensboro, K y.... 5,867 Pine Bluff, Ark.... 13,769 Quincy, 111....... . 8,779 St. Louis, M o....... 656,633 Sedalia, M o........... 2,231 Springfield, M o..... 15,573 Texarkana, Ark.-Tex. 8,597 Totals............... 1,201,567 (Completed November 23, 1937) Sept., 1937 Oct., 1936 $ 39,206 5,241 29,276 12,578 $ 34,649 4,473 29,155 12,465 6,110 10,122 2,183 42,432 152,251 140,420 5,749 11,728 8,490 566,500 2,093 14,199 8,591 3,869 44,176 167,845 232,294 5,587 16,110 8,098 604,803 2,017 15,903 9,055 1,047,047 1,200,621 Oct. 1937 comp, with Sept. 1937 Oct. 1936 3.4% 0.2 7.9 + 12.2 35.2 49.7 1.0 7.5 +28.6 + 17.0% + 16.9 + 8.3 + 13.2 — 18.4 — 15.6 — 3.0 — 2.5 — 22.2 - - 6.6 + 5.0 — 14.5 + 8.4 8.6 10.6 - 9.7 — - - 0.1 — 5.1 +14.8 + 0.1 2.1 17.4 + 3.4 --15.9 + + 2.1 Page 7 NATIONAL SUMMARY OF BUSINESS CONDITIONS BY B O ARD OF GOV E R N O R S O F F E D E R A L R E SE RV E SYSTEM INDUSTRIAL PRODUCTION Index of physical volume of production, adjusted for sea sonal variation, 1923-1925 average = 100. By months, Jan uary, 1929, through October, 1937. Latest figure 103. FACTORY EMPLOYMENT Index of number employed, adjusted for seasonal variation, 1923-1925 average = 100. By months, January, 1929, through October, 1937. Latest figure 98.3. WHOLESALE PRICES Indexes compiled by the United States Bureau of Labor Statistics, 1926 = 100. By weeks, 1932 to date. Latest fig ures, farm 75.9, food 83.2, other commodities 84.2, are for week ending November 20, 1937. MEMBER BANK CREDIT '3 4 1035 1933 1S37 ’3 4 1935 1936 1937 Wednesday figures for reporting member banks in 101 leading cities. September 5, 1934, through November 17, 1937. Page 8 Volume of industrial production showed a further sharp decrease in October and the first three weeks of November, and there was a reduc tion in employment. Commodity prices continued to decline. Distribu tion of commodities to consumers was maintained at the level of other recent months. Production and Employment — In October the Board’s seasonally adjusted index of industrial production was 103 per cent of the 1923-1925 average as compared with 111 per cent in September and an average of 116 per cent in the first eight months of this year. There was a marked curtailment of activity in the durable goods industries. Output of steel ingots, which had shown a steady decline since August, was at an aver age rate of 59 per cent of capacity in October and by the third week in November the rate had declined to 36 per cent. Automobile production increased considerably in October as most manufacturers began assem bly of 1938 model cars. In the first three weeks of November output of automobiles showed little change from the level reached at the end of October, with assemblies by one leading manufacturer continuing in exceptionally small volume. Production of lumber and of plate glass de clined further in October. In the non-durable goods industries, where output had been declining since the spring of this year, there was a further decrease in October. Cotton consumption showed a sharp reduc tion and activity at woolen mills and shoe factories continued to decline. There was an increase in output at sugar refineries, where activity had been at a low level in September. In most other lines changes in output were largely seasonal. Mineral production continued at about the level reached at the close of 1936 and maintained throughout this year. Value of construction contracts awarded in October and the first half of November was smaller than in the preceding six weeks, accord ing to figures of the F. W. Dodge Corporation. The decline was chiefly in private nonresidential construction. Factory employment declined substantially in October and payrolls showed little change, although an increase is usual at this season. Decline in the number employed were reported by factories producing steel, machinery, lumber, and tex tiles, and in many smaller industries. There was a seasonal increase in employment at automobile factories. Employment and payrolls increased seasonally at mines and at establishments engaged in wholesale and retail trade. Distribution— Sales at department stores and mail order sales in creased seasonally in October. Throughout the year sales at department stores have been sustained, with seasonal fluctuations, and the Board’s adjusted index of these sales has shown little change. Freight-car load ings declined in October and the first half of November, reflecting smaller shipments of forest products, ore, and miscellaneous freight. Commodity Prices — Prices of industrial materials, particularly nonferrous metals, steel scrap, rubber, and hides, declined further from the middle of October to the third week of November, and there were some decreases in the prices of finished industrial products, livestock and meat prices declined substantially and coffee prices dropped sharply following the announcement by Brazil of modification of its control policy. Bank Credit — During the first half of November the Federal Re serve banks purchased $28,525,000 of United States Government securi ties, in accordance with the policy adopted in September to provide additional reserves for meeting seasonal currency and other require ments. From the middle of October to November 17, excess reserves of member banks increased from about $1,000,000,000 to $1,100,000,000, reflecting the Federal Reserve security purchases and a considerable decline in required reserves at member banks in New York City, caused partly by a reduction in demand deposits arising from a liquidation of brokers’ loans. Loans to brokers and dealers reported by banks in leading cities declined by $250,000,000 during the four weeks ending November 17. Commercial loans, following a steady increase for several months, de clined after the middle of October. Member banks in New York City increased their holdings of United States Government securities by over $150,000,000 while banks outside New York City showed a further reduction. Deposits continued to show moderate reductions.