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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 Morning of October 31, 1927 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent E P O R T S relative to business in this district during the past thirty days reflect rather marked contrasts between different locali ties and the several lines. Taken as a whole neither trade nor industry have picked up to the extent which has marked this season during the past sever al years. Weather conditions have been inimical to heavy distribution of fall and winter merchandise, and there is a general disposition on the part of merchants and the public to hold down their buying to immediate requirements. In a large majority of the lines investigated declines in September sales under those of the corresponding month last year were noted. In slightly more than half these lines, however, sales were larger than in August this year, and in a number of instances improvement in de mand for merchandise has taken place since the final week of September. A s was the case during the preceding thirty days, goods for ordinary con sumption are relatively more active than those of a more permanent sort. The general trend of com modity prices was slightly upward, though some rather sharp declines were recorded in corn, fuel and some other materials. R Conditions generally through the South devel oped improvement, and the outlook for fall and winter trade in that section is considerably more favorable than was the case earlier in the season. W eather for cotton picking has been ideal, and full advantage of it has been taken by planters. Prices of cotton and cottonseed are considerably higher than at the same time last year, and the crop was made on a cheap basis and yields a substantial re turn. Prospects for corn improved during Septem ber, and relatively little damage from frost was re ported. Retail trade in the agricultural sections was reported better than during the preceding thirty days, but department store sales in the principal cities of the district were 6.9 per cent smaller than JpU September, 1926. Mail order houses and five and ten-cent stores showed a gain in September sales over last year, and total debits to individual ac counts were 1.7 per cent larger than last year. Employment conditions underwent no marked change as compared with the preceding month, but the number of idle workers was greater than during the same period in 1926. Smaller forces were em ployed at iron and steel plants, and conditions in that industry are adversely affected by failure of the railroads and automotive industry to purchase in quantity. Textile mills in the South were for the most part on full time schedules, and increased employment was reported at paper and printing es tablishments, food and kindred products plants. Building operations decreased, and considerable un employment was reported among both skilled and unskilled workers in that industry. The principal development in the fuel situation during the past thirty days was the settlement of the strike of Illinois coal miners, which Had been in effect since last April 1. The agreement between operators and the union was in the nature of a truce, during which negotiations will be carried on for a permanent agreement to become effective April 1, 1928. Being entirely unexpected, the resumption of production at Illinois mines exerted a generally weakening tendency in bituminous coal prices. This, however, was in a measure offset by cooler weather, and at the middle of October confusion incident to termination of the strike had disap peared, though the market still showed weakness. Demand for domestic coal is quiet, many house holders and dealers having provided for their late fall and winter requirements during August and September. The steam coal situation showed weak ness, due both to lack of demand and abundant sup plies. Operators in the Kentucky fields report numerous cancellations of contracts, and since the first of this month have experienced difficulty in disposing of coal shipped on consignment to points ordinarily supplied by Illinois and Indiana coal. Price levels generally are below those of a year ago, when export buying was stimulated by sus pended production in England. For the country as a whole production of bituminous coal for the calendar year to O ctober 8, approximately 238 working days, amounted to 405,314,000 net tons, against 420,494,000 tons for the corresponding period in 1926, and 376,896,000 tons in 1925. Railroads operating in the district report a further decline in volume of freight traffic as com pared with the corresponding Iperiod last year, with losses general through all classifications. The total, however, continues to run ahead of all years previous to 1926. For the country as a whole during the first 40 weeks this year, or to O ctober 1, load ings of revenue freight totaled 39,997,894 cars, against 40,314,189 cars for the corresponding period last year and 39,006,227 cars in 1925. The St. Louis Terminal Railway Association, which handles inter changes for 28 connecting lines, interchanged 211,615 loads in September, against 221,065 loads in August, and 228,822 loads in September, 1926. During the first nine days of O ctober the inter change amounted to 63,678 loads, against 62,121 loads during the same period in September and 71,490 loads during the first nine days of October, 1926. Passenger traffic of the reporting roads de creased 9.0 per cent in September as compared with the same month last year. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans for September was 89,000 tons, against 123,122 tons (revised figures) in A ugust and 110,690 tons in September, 1926. Reports relative to collections reflect a slight slowing down as compared with the preceding thir ty days, though taken as a w hole results were sat isfactory and equal to those at the same period a year ago. Retail merchants in the large centers reported improvement in September over August, and this betterment was continued in early October payments. Reports of country retailers reflect spotted conditions, some localities making a good showing, while elsewhere backwardness is com plained of. Generally wholesalers report good liqui dation, and unusually few requests for extensions. Results in the boot and shoe, dry goods and hard ware lines are especially good. In the cotton, tobac co and rice areas improvement over the preceding month was noted. Answers to questionnaires ad dressed to representative interests in the several lines throughout the district showed the follow ing results : Excellent September, 1927......... 1.4% August, 1927............... 2.7 September, 1926......... 1.4 Good 31.5% 28.8 32.4 Fair 54.8% 54.8 58.1 Poor 12.3% 13.7 8.1 Commercial failures in the Eighth Federal R e serve District in September, according to Dun’s, numbered 53, involving liabilities of $184,910, against 103 defaults in August with liabilities of $705,216 and 48 failures for $548,162 in September, 1926. The per capita circulation of the United States on O ctober 1, 1927, was $41.35, against $40.54 on September 1, 1927, and $42.34 on O ctober 1, 1926. M A N U F A C T U R IN G A N D W H O L E S A L E Autom obiles — Combined passenger car and truck production in the United States in Septem ber totaled 257,580, which compares with 303,040 in August, and 397,309 in September, 1926. Distribution of automobiles in this district de clined in September under the preceding month, and was also considerably smaller than in Septem ber, 1926. A s has been the case for the past several months, the heaviest losses occurred in the lower priced cars, also in sales of dealers in the country. Agriculturists were preoccupied with fall work and were disposed to await final results of crops before filling their requirements. Unfavorable weathe1was another factor tending to hold down sales M the rural areas. Universally dealers report that prospective customers are still awaiting the appear ance of new models before purchasing, and due to the lateness of the season, buying in many instances will be deferred until the spring. Owners are re pairing and conditioning their cars to a greater ex tent than usual at this season in order to make them serviceable through the winter. This condition is reflected in business in parts and accessories, which was relatively more active than in new vehicles. Demand for trucks, particularly of the light variety for delivery purposes in the large cities, was good. August sales of new passenger automobiles by 320 dealers scattered through the district showed a de crease of 13.5 per cent under the corresponding month in 1926, and 30.9 per cent under the August total this year. A ccessory sales of the reporting dealers in September were 9.6 per cent smaller than a year earlier and 1.7 per cent larger than in August this year. Stocks of new cars on October 1 were considerably larger than on the same date in 1926, but showed little variation from those on Septem ber 1 this year. The used car situation was reported satisfactory, the demand being active and stocks showing a reduction as compared with the preced ing thirty days. O f the new cars sold 52.2 per cent were on the deferred payment plan, against 58.3 per cent in August and 48.9 per cent in September, 1926. Boots and Shoes — September sales of the 5 reporting interests were 0.6 per cent larger than for the same month in 1926, and 1.1 per cent below the August total this year. Stocks on O ctober 1 were 7.8 per cent smaller than a month earlier, and 3.5 per cent below those on October 1, 1926. Business in all sections of the industry is reported holding up well, with early O ctober orders indicating a con tinuance of the gains of recent months. Production decreased slightly as compared with the preceding thirty days, but is still at higher levels than in any recent year. The trend of prices of finished goods is still upward. Clothing — Unseasonably hot weather in Sep tember held down sales of heavyweight clothing, but on the other hand resulted in an exceptionally thorough clearance at retail of summer and early fall goods. Since the middle of September, however, there has been a marked revival of purchasing of both w om en’s and men’s apparel, and stocks in hands of manufacturers and jobbers have been sub stantially reduced. Advance sales of men’s suits and overcoats are about equal to those at the same period last year, but slight declines are reported by makers of w om en’s cloaks and suits. Demand for work clothing is disappointing, with production still somewhat larger than current distribution. Septem ber sales of the 5 reporting clothiers were 84.5 per cent larger than for the same month in 1926, and 27.4 per cent less than the August total this year. Drugs and Chemicals — The steady im prove ment in this classification noted in recent months, was continued in September, sales of the reporting firms during that month being 4.2 per cent over the corresponding period a year ago and 14.4 per cent over the August total this year. T w o of the leading firms reported the best September business since 1922. A ll sections of the line are showing satisfac tory results, with sales o f remedial drugs, cosmetics and miscellaneous items especially active. Prices developed no change w orthy of note, advances about counterbalance declines. D ry Goods — September sales of the 8 report ing interests fell 7.9 per cent below those of the same month in 1926, and 20.8 per cent under the August total this year. Stocks on O ctober 1 were 6.0 per cent smaller than thirty days earlier, but 13.6 per cent larger than on O ctober 1, 1926. In the Jtearly comparison the loss consists principally of advance business. Purchasing generally is described as hesitant and irregular. Staples, holiday goods and knitted goods are quiet, while ready-to-wear garments continue in excellent demand. Electrical Supplies — Seasonal considerations and a falling off in building activity were mentioned as the chief reasons for a decrease in September sales of the 5 reporting interests of 5.5 per cent as compared with the same month in 1926, and of 2.3 per cent under the August total this year. D e mand for radio material was brisk, and advance purchasing of holiday goods was generally satisfac tory. The tornado in St. Louis and severe storms elsewhere through the district resulted in a heavy call for emergency repair materials from the public utility interests. Flour — Production of flour at the 12 leading mills of the district in September was 370,450 bar rels, against 385,028 barrels in August and 436,876 barrels in September, 1926. Stocks of flour in St. Louis on October 1 were 6.3 per cent less than thirty days earlier and 5.4 per cent larger than on October 1, 1926. Business during the past thirty days was quiet and featureless. Demand from the domestic trade was of a routine sort, and sales were chiefly in small quantities for prompt shipment. Shipping directions on flour previously bought were good, and mills were largely engaged in grinding on old orders. Sales for export were assisted by freer offerings of clears and low grade flours, which varieties had been scarce during the preceding month. Mill operations were at from 55 to 60 per cent of capacity. Furniture — Sales of the 15 reporting firms in September were 5.2 per cent larger than during the same month in 1926, and 22.5 per cent larger than in August this year. Stocks on October 1 were 1.2 per cent smaller than a month earlier and 24.4 per cent less than on October 1 last year. Demand for household furniture in the country is reported bet ter than for many months, and some betterment in sales of office equipment was noted. Production was smaller than a year ago, particularly in St. Louis, where considerable damage was done to plants by the cyclone, one reporting factory being completely demolished. Groceries — September sales of the 9 reporting grocery firms were 16.5 per cent smaller than in the same month last year, but 17.1 per cent greater than the August, 1927 total. Stocks on October 1 were 4.1 per cent larger than a month earlier and 2.8 per cent less than on October 1, 1926. The im prove ment in the month to month comparison was ascribed to the usual seasonal purchasing and more favorable weather conditions. Demand for canned goods was brisk, with an upward price tendency in a number of lines. Sales of preserving and can ning materials throughout the season have been small, due to the short fruit and vegetable crops. Hardware — A s compared with a year ago, Sep tember sales of the 11 reporting interests showed a decrease of 1.0 per cent, but the total was 6.2 per cent larger than in A ugust this year. Stocks on October 1 were 5.6 per cent smaller than a month earlier and 20.9 per cent less than on October 1, 1926. The m ovement of seasonal hardware has picked up markedly since the middle of September, with sales in the South making a particularly good showing. Some improvement is noted in demand for shelf hardware and the general run of merchand ise consumed mainly in the rural sections. Prices were generally steady with the preceding month, but the average is below that of a year ago. Iron and Steel P ro d u cts— Business in this classification shows less than the usual seasonal im provement and purchasing of raw, finished and semi finished materials is under expectations. Despite the fact that shipments have declined slightly as compared with recent months, the fourth quarter of the year opened with unfilled orders substantially reduced in many instances, and with the average below that of the corresponding period a year ago. Autom obile interests and the railroads are not spe cifying or purchasing in quantities anticipated, and the outlet through the building industry, except on a limited number of commodities, has developed a narrowing tendency. Demand for oil country goods also continues backward, and is considerably less than is ordinarily the case at this time of year. Some specialty makers, notably of heating appara tus, farm implements and certain varieties of machinery, report activity in their lines, with sales volume larger than at the corresponding period last year. Producers of sheets have had a fair business, but their sales have been to miscellaneous users rather than the usual consumers of large tonnage. Fabricators of structural steel report a slowing down in new business, and decrease in unfilled orders. Standard structural shapes and the general run of building materials are quiet, but there continues an excellent demand for reinforcing concrete bars, and producers of this material have been operating on full time schedules. Tin plate and galvanized roof ing have been in active demand, particularly through the South. Competition is unusually keen in all sec tions of the industry, and the trend of prices is lower. Iron and steel scrap sustained a further decline, with heavy melting steel touching the lowest point in recent years during early October. For the sixth consecutive month, production of pig iron for the country as a whole declined in September, the 2,781,594 ton output of that month comparing with 2,950,674 tons in August and 3,163,269 tons in September, 1926. Purchasing of pig iron was in light volume and confined mainly to immediate requirements, production of steel ingots in the United States in September totaled 3,232,108 tons, against 3,470,903 tons in August and 3,913,383 tons in September, 1926. Lumber — Business generally in the lumber in dustry in this district during the past thirty days was quiet and unsatisfactory. All groups of dom es tic consumers are purchasing for immediate require ments only, and in the hardwood division production is running ahead of demand, with the result that stocks are accumulating and the trend of prices is lower. Consumption of hardwoods is on a liberal scale, and the present depression is partly explained by the fact that numerous users stocked up heavily prior to the floods, and are still working off their surplus. Demand for Southern pine and other soft w oods by the building industry shows the usual seasonal contraction, and purchasing by the rail roads and equipment builders is quiet. In the im mediate past, however, some improvement has been noted in demand for timbers for bridge and trestle work. Prices on the better grades of yellow pine were lower, but flooring and drop siding in this w ood showed a firmer tendency. R E T A IL T R A D E The condition of retail trade is reflected in the follow ing comparative statement showing activity at department stores in leading cities of the district: * Stock Net sales comparison Stock on hand turnover Sept. 1927 9 months ending Sept. 30, 1927 January 1 to comp, to September 30, Sept. 30, 1927 to comp, to Sept. 1926 same period 1926 Sept. 30, '1926 1927 1926 ... + 17.0% + 17.3% +24.6% 1.66 1.56 ...— 3.9 Little Ro< — 4.4 1.73 1.74 — 1.0 ...— 4.2 Louisville — 0.5 — 9.7 2.35 2.17 ...— 1.3 2.01 — 5.1 — 11.0 1.99 ...— 14.3 — 4.5 1.52 — 8.1 1.60 9.0 — 2.8 — 1.9 2.40 2.40 St. Louis.. Springfield, o.— 2.3 + 4.9 — 9.8 1.15 1.23 8th Distric ...— 6.9 — 2.9 2.23 2.20 — 3.7 *The new method of release for stock turnover figures shows the actual number of times stock has been turned over during a given period. The figure for the Eighth District during the first nine months of 1927 is 2.23. This means that the average amount of stocks of all reporting stores had been turned over two and twenty-three one-hundredths times between January 1 and September 30. Net sales comparison &ept. 1927 compared to Sept. 1926 Aug. 1927 Men’s furnishings...........— 13.5%™" +29,8% Boots and shoes.............. — 8.9 4-6.7 Stocks on hand Sept. 1927 compared to Sept. 1926 Aug. 1927 + 8.9% +33.2T —26.7 — 18.3 CONSUMPTION OF ELECTRICITY Public utilities companies in the five largest cities of the district reported consumption of elec tricity by selected industrial customers in Septem ber as being 1.3 per cent smaller than during the preceding month, but 4.3 per cent greater than in September, 1926. In both the yearly and month-tomonth comparison changes were irregular. Smaller loads were taken by ice and electric refrigeration plants, also some iron and steel interests. Gains were shown by flour mills, railroad shops, furniture plants and some miscellaneous industries. The clos ing down of important automobile assembly plants was responsible for the major part of the loss in tw o cities. Detailed figures fo llo w : No. of Sept. Aug. Sept. 1927 Sept. Custom’1927 1927 comp, to 1926 ers »K,W.H. *K.W.H. Aug. 1927 *K.W.H. Evansville .....40 1,272 1,260 +0.9% 1,210 Little Rock.... 35 1,843 1,997 — 7.8 1,631 Louisville .....83 6,127 6,020 + 1.8 5,372 1,459 1,034 +41.1 1,471 Memphis .......31 St. Louis.....109 17,797 18,534 — 4.0 17,632 Totals.....298 28,498 *In thousands (000 omitted). 28,845 — 1.3 27,316 Sept. 1927 comp, to Sept. 1926 +5.1% +13.0 +14.1 — 0.9 + 0.9 + 4.3 The follow ing figures compiled by the Depart ment of the Interior, show kilowatt production for lighting and industrial purposes for the country as 8, w h o l e l By water power By fuels Totals August, 1927.................... 2,385,790,000 July, 1927..........................2,434,639,000 August, 1926.................... 2,089,743,000 4,246,612,000 4,021,328,000 4,030,489,000 6,632,402,000 6,455,967,000 6,120,232,000 B U IL D IN G In point o f dollar value, building permits for xiew construction in the five largest cities of the district during September showed a decrease of 25.4 per cent as compared with the preceding month, and of 6.9 per cent as compared with September, 1926. A ccording to figures compiled by the F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District in September totaled $32,572,662, which compares with $34,133,834 in August and $35,187,306 in September, 1926. A slight decline in building costs was noted in the month, due to lower prices of certain materials. Production of portland cement for the country as a whole during September totaled 17,492,000 barrels, against 18,315,000 barrels in August, and 16,571,000 barrels in September, 1926. Building figures for September fo llo w : New Construction *Cost Permits 1927 1926 1927 1926 399 $ 302 $ 335 Evansville .. 352 Little Rock 34 64 163 1,581 263 1,976 1,105 Louisville ... 180 290 863 Memphis ..v 262 1,490 869 2,949 2,205 St. Louis.... 674 Sept. totals 1,502 1,885 $6,253 $6,716 8,381 Aug. totals 1,800 1,965 5,835 July totals 1,547 1,798 8,818 5,844 *In thousands of dollars (000 omitted). Repairs, etc. *Cost Permits 1927 1926 1927 1926 26 $ 18 63 87 40 108 137 124 98 132 87 87 165 150 149 79 559 302 426 450 873 862 796 887 1,148 828 $ 571 $956 763 1,244 871 1,266 P O S T A L R E C E IP T S Returns from the five largest cities of the dis.^ rict show a decrease in postal receipts for the third quarter of 1927 of 4.8 per cent under the preceding three months, and of 0.5 per cent under the third quarter of 1926. Detailed figures follow : For Quarter Ending___________ Sept 1927 Sept. 30, June 30, Mar. 31, Sept. 30, comp, to 1927 1927 1927 1926 Sept. 1926 Evansville ...... $ 166,000$ 167,000 $ 162,000 $ 150,000 +10.6% Little Rock....... 224,000 199,000 237,000 268,000 — 16.5 733,000 739,000 678,000 + 6.0 Louisville ........ 719,000 Memphis ......... 562,000 512,000 517,000 514,000 + 9.3 St. Louis.......... 2,942,000 3,251,000 3,536,000 3,023,000 — 2.7 Totals.......... $4,613,000 $4,862,000 $5,191,000 $4,633,000 — 0.5 A G R IC U L T U R E W hile agricultural conditions were not entirely favorable during the past thirty days, improvement in prospects took place in this district as compared with the similar period immediately preceding. A s contrasted with earlier months this year, there was very decided betterment, though results in a majori ty of crops will be short of those last year and the five-year average. A ccording to the U. S. Depart ment of Agriculture, the com posite condition of all crops in states entirely or partly within the Eighth Federal Reserve District was 91.8 per cent on O cto ber 1, as against 88.9 per cent on September 1, and 105.4 per cent on October 1, 1926. This indicates that props were 8.2 per cent below their average con dition on October 1. The improvement was due to results of the spell of warm, clear weather in September, which materially helped corn, cotton, tobacco and some less important crops. The dry spell, however, was follow ed by excess ive rains, which did more or less damage, particular ly in sections where it was accompanied by high winds. Flood conditions again developed along some tributaries of the Mississippi River, and late planted corn and other crops were damaged. Such damage, however, was localized, and not great in extent. Recent frosts were not sufficiently severe to result in much injury, and in some localities were beneficial. The trend of prices of a number of agri cultural products was lower, with declines being noted in corn, cotton, oats, and some fruits and vege tables from the high point of the season. The gen eral average, even with the recessions, continues considerably above that at the corresponding period a year ago. Corn — The indicated yield of corn in this dis trict, based on the October 1 condition, is 316,160,000 bushels, an increase of 14,600,000 bushels over the September 1 estimate, and comparing with 393,007,000 bushels harvested last year. W hile con siderable progress toward maturity took place dur ing the favorable spell of weather in September, the crop is still unusually late. Much corn was pre maturely ripened, and excessive rains in late Sep tember and early this month gave a setback to ma turing, the cool weather materially slowing down development. In many important producing coun ties corn was blown down badly by the recent storms and due to lack of curing weather much chaffy and light corn will be included in the crop. W ith the improved prospects since mid-summer, a rather sharp decline in prices took place, the December option in St. Louis dropping from $I.16J4 on August 18, to 85c on October 15. For the coun try as a whole the corn crop is estimated at 2,603,437,000 bushels, against 2,646,853,000 bushels in 1926, and a five-year average of 2,766,561,000 bushels. W inter W heat — W hile seeding of winter wheat has been delayed in certain sections by ex cessive rainfall, and acreage in many instances is less than intended, good progress has been made, and early reports indicate that the total area in this district will be slightly greater than was planted last fall. Early seeded wheat is showing up favora bly, and soil conditions are almost universally ex cellent. The 1926-1927 crop in this district is esti mated at 41,038,000 bushels against 54,574,000 bush els the year before. Oats — Production of oats in this distriqt is estimated at 44,301,000 bushels, against 59,031,000 bushels harvested in 1296. Fruits and Vegetables — The apple crop in this district, which was already short, suffered further deterioration during September. The drop in all sections was unusually heavy, and the unfavorable grow ing season is being reflected in poor quality. In states entirely or partly within the Eighth Dis trict the crop is estimated at 11,590,000 bushels, of which 1,575,000 barrels represent commercial crop, against 33,604,000 bushels in 1926, of which 2,949,000 barrels were commercial crop. The final estimate for peaches in these states is 4,484,000 bushels against 11,203,000 bushels harvested in 1926, and a five-year average of 8,153,000 bushels. The grape yield is only about half as large as last year, and 3,348 tons less than the five-year average. Based on the October 1 condition, the white potato crop in this district is estimated at 13,239,000 bushels, against 13,003,000 bushels last year. Except where moisture was over-abundant, the condition of gar dens improved somewhat, and the late commercial tomato crop is turning out better than expected. There was little change in prospects for sweet pota toes, and the crop will be slightly larger than last year’s or the five-year average. Live Stock — No change worthy of note took place in the live stock situation as compared with the preceding thirty days. Pastures are in excellent condition, and feeds plentiful. The improved corn prospects have created a strong demand for hogs to fatten. Cattle continue scarce with prices the highest since 1920. Milk and egg production de clined during the period under review. Receipts and shipments at St. Louis as reported by the National Stock Yards, were as follow s: Receipts Sept. Aug. Sept. 1927 '1927 1926 Cattle and Calves.....152,045* 180,017 185,144 Hogs ........................243,684 313,683 296,144 Horses and Mules.... 7,231 3,347 5,747 Sheep ........................ 53,320 74,063 91,465 Shipments______________ Sept. Aug. Sept. 1927 1927 1926 109,988 115,656 130,980 186,967 231,366 209,939 7,174 2,617 6,111 23,085 18,942 67,287 Cotton — Based on the October 1 condition the yield of cotton in this district is estimated at 2,224,000 bales, which compares with 3,349,000 bales produced in 1926. For the entire country a crop of 12,678,000 bales is estimated, against 17,977,000 bales in 1926. In Arkansas, Missouri and T en nessee the crop improved somewhat during Septem ber in response to more favorable weather. H ar vesting conditions have been good, but the m ove ment to market is late. In the overflowed areas where planting was delayed there are still many green bolls, and in these sections the yield is still dependent on weather conditions. Prices receded from the season's high point, reached in the first week of September, but the average continues well above the corresponding period last year. Stocks of cotton in Arkansas warehouses on October 14 were 212,414 bales, against 475,713 bales on the corresponding date last year. T obacco — Cutting and housing of the tobacco crop in all districts is practically completed. Con ditions were not favorable for late tobacco, which made poor progress and at the time of cutting was green and poorly developed and is expected to show a heavy proportion of low grade leaf. This is true of both the burley and dark tobacco sections. Early tobacco is in generally good condition in the barns. Under seasonable weather, with sufficient moisture to permit the tobacco to come in good order, curing has properly developed. Buying of the new fired dark crop has commenced in the Clarksville and Springfield, Tennessee districts, with most of the leading interests participating. Prices for the bet ter grades are higher than at the opening of the market last year or in 1925. Rice — V ery little change in prospects for the rice crop in this district took place during the past thirty days. Cutting of the early varieties is prac-* tically completed, and considerable progress has been made with threshing. W ith favorable weather most of the mills have commenced operating. D e mand for clean rice has improved in the immediate past, but initial prices have been slightly below those at the corresponding period last year. Com m odity Prices — Range of prices in the St. Louis market between September 15, 1927 and^ October 15, 1927, with closing quotations on the latter date and on October 15, 1926. clofe house receipts, Ay2 to 5 per cent, and cattle loans, 5 y to 6 per cent. Federal Reserve Operations — During Septem ber the Federal Reserve Bank of St. Louis dis counted for 198 member banks, against 198 in August and 222 in September, 1926. The discount rate remained unchanged at 3 y2 per cent. Changes in the principal assets and liabilities of this institu tion as compared with the preceding month and a year ago appear in the follow ing ta b le: Wheat High Low Oct. 15, 1927 Oct. 15, 1926 Dec..................... per bu.$1.31 $1.27 $1.30$1.39% May .................. “ 1.36 1.34# 1.35& 1.47% No. 2 red winter “ 1.54 1.39 $1.44@ 1.45 $1.41 @ 1.42 No. 2 hard..„..... “ 1.32 11.27 1.31 @ 1.32 1.42%@ 1,43 Com Dec...................... “ 1.02 .85 .85%.76 May .................. “ 1.02% ,90% .90^ •84H No. 2 mixed....... “ .96% .86% .86% No. 2 white....... “ .99 .87 .87@ .88 .79 @ .79% Oats No. 2 white....... “ .53 .49 .50@ .51 .45 @ .46 Flour Soft patent.......per bbl. 7.50 7.00 7.00@ 7.50 7.00 @ 7.50 6.75 6.60 6.65 @ 6.75 7.20 @ 7.40 Spring patent..... “ Middling cotton....per lb. .20# -1954 *1-3 Hogs on hoof.......percwt.12.15 9.25 10.50@11.85 11.00 @14.15 F IN A N C IA L The lower trend in interest rates, noted in the preceding issue of this report, continued during the past thirty days. W hile the general demand foi credit accommodation from commercial and indus trial sources wras greater than a month earlier, avail able supply of money was more than sufficient to meet all requirements and many banks were seeking investment for surplus funds. Borrow ing by mer cantile interests in the chief centers of population showed little change in average volume from the month before, new commitments being counterbal anced by settlement of previous loans. October payments to wholesale and jobbing interests, notably boots and shoes and dry goods, were satisfactory and resulted in a reduction of their banking commitments, though the total continues slightly above that at the same time last year. In creased demands for agricultural financing in the south to handle cotton, tobacco, rice, cottonseed and other seasonal commodities has been in a meas ure offset by liquidation in the typical grain areas. Some improvement in the demand for cattle loans was noted, due mainly to betterment in corn pros pects and abundant hay and fodder crops. Require ments of manufacturers and distributors of building materials are still at a high level, though somewhat under the same period last year. Beginning the first week of September, loans based on stocks and bonds decreased, and early this month were at the lowest point since July. Loans and discounts of the report ing member banks increased steadily during the period under review, and in the second week of O ctober touched a new high point for the year. Deposits of these banks also moved upward and ' reached a record high for the year on October 12. Discounts o f this bank fluctuated irregularly dur ing the past thirty days, but without any definite trend, and throughout the period were uniformly below those at the corresponding time in 1926. A t the St. Louis banks current interest rates were as follow s: Prime commercial loans, 4 to 5 per cent; interbank loans, Ay2 to 5j4 per cent; collateral loans, Ay2 to 5 per cent; loans secured by ware- c o m p ile d *Oct. 22, 1927 .$25,948 . 3,965 . 36,900 Ratio of reserves to deposits and *In thousands (000 omitted). *Sept. 22, *Oct. 22, 1927 1926 $31,255 $48,648 4,182 4,796 19,610 35,537 .$66,813 , 52,214 . 83,077 $71,588 43,905 79,278 $72,440 46,074 82,702 . 57.7% 49.9% 50.6% Debits to Individual Accounts — The follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, cer tificates of deposit accounts, and trust accounts of individuals, firms, corporations and U. S. Govern ment in leading cities of the district. Charges to accounts of banks are not included. *Sept. 1927 *Aug. 1927 *Sept. 1926 E. St. Louis & Nat’l. Stock Yards, 111..$ 50,267 El Dorado, Ark.... 9,285 Evansville, Ind..... 47,857 Fort Smith, Ark.... 14,022 Greenville, Miss.... 3,670 Helena, Ark.......... 5,083 Little Rock, Ark.. 82,316 Louisville, Ky....... 185,510 Memphis, Tenn.... 180,208 Owensboro, Ky.... 5,366 Pine Bluff, Ark.... 13,119 Quincy, 111.......... 12,600 St. Louis, Mo....... 700,930 Sedalia, Mo.......... 4,825 Springfield, Mo.... 14,922 $ 54,122 8,412 48,165 12,176 3,071 3,145 71,474 177,753 127,390 5,452 '10,927 12,869 689,763 4,244 14,327 $ 56,434 11,903 43,032 14,045 4,319 4,982 88,897 180,109 151,474 4,785 12,779 12,353 702,417 4,685 15,431 Totals.......... $1,329,980 $1,243,290 $1,307,645 *In thousands (000 omitted). Sept. 1927 comp, to Aug. 1927 Sept. 1926 — 7.1% + 10.4 — 0.6 + 15.2 + 19.5 +61.6 + 15.2 + 4.4 +41.5 — 1.6 + 20.1 — 2.1 + 1.6 — 10.9% — 22.0 — 0.2 + 11.2 — 15.0 + 2.0 — 7.4 + 3.0 + 19.0 + 12.1 + 2.6 + 0.2 2.0 — + 13.7 + 4.2 + 3.0 — 3.3 + 7.0 + 1-7 Condition of Banks — Loans and discounts of reporting member banks on October 19 showed an increase of 2.1 per cent compared with September 14, and a decrease of 3.9 per cent as contrasted with October 13, 1926. Deposits increased 2.4 per cent between September 14 and October 19, and on the latter date were 1.8 per cent larger than on O cto*Oct. 19, *Sept. 14, *Oct. 13, 1927 1926 1927 31 31 31 Number of banks reporting...................... Loans and discounts (incl. rediscounts) Secured by U. S. Gov’t obligations..... ...$ 4,233 Secured by other stocks and bonds...... ... 207,656 Total loans and discounts.... Investments U. S. Gov’t securities........ Other securities................. Total investments................... Reserve balance with F. R. Cash in vault.......................... Deposits , Time deposits................................. Government deposits...................... Total deposits..................................... Bills payable and rediscounts with Federal Reserve Bank Secured by U. S. Gov’t obliga All other...................................... *In thousands (000 omitted). Oct. 22, 1927) ...$514,319 ... 75,585 ...$201,634 ... 48,613 ... 15,700 $ 4,447 202,803 296,285 $503,535 $ 6,887 188,221 339,873 $534,981 70,942 123,933 $194,875 46,195 7,224 62,391 116,100 $178,491 48,067 8,642 398,333 236,385 620 $635,338 415,569 218,319 5,176 $639,064 7,771 6,685 6,842 14,940 B U SIN E SS C O N D IT IO N S IN T H E U N IT E D S T A T E S PRODUCTION — The Federal Reserve Board's in dex of both manufacturing and mineral production, in which allowance is made for usual seasonal variations, de creased between August and September. Production of iron and steel was in smaller volume in September than in any month since 1925. There were also decreases from August to September in the output of nonferrous metals, automo biles, and rubber tires, while the textile and shoe and leather industries continued active. Production of bituminous coal showed about the usual seasonal increase in September and October, but continued smaller than during the same period of other recent years. Index number of production of manufactures and minerals combined, adjusted for seasonal variations (1923-25 average =100). Latest figure September, 105. increased slightly more than usual in September and at the end of the month were somewhat larger than a year ago. Freight carloadings were smaller during September and the first week of October than in the corresponding period of last year for all groups of commodities except grain and grain products, of which loadings were larger than in the same period of any previous year since 1924. PRICES — Wholesale commodities prices advanced iii September for the fourth consecutive month, and the Bureau of Labor Statistics all commodities index rose to the highest level since last January. There were larger increases between August and September in the prices of Index of United States Bureau of Labor Statistics (1926=100 base adopted by bureau). Latest figure, September 96.5. The output of anthracite was considerably reduced during September and the first half of October, following an in crease in August, and the weekly output of crude petroleum has decreased slightly since the early part of August. The value of building contracts awarded continued somewhat smaller during September and the first three weeks of October than during the corresponding period of 1925 or 1926. Declines occurred in contracts for residential, com mercial, industrial, and educational buildings, while con tracts for public works and public utilities were larger in September than in the corresponding month of any previous year. Crop conditions improved in September and the Depart ment of Agriculture’s estimates for October 1 indicate larger yields of most grain crops than were expected a month earlier. livestock, meats and cotton and smaller advances in leather, coal, and chemicals, while grains, building materials, and rubber declined. During the first three weeks in October prices of spring wheat, corn, cotton, coal, and iron and steel declined while prices of livestock, raw wool and rubber ad vanced. BANK CREDITS — Total loans and investments of member banks in leading cities showed a further increase for the four weeks ending October 19 and on that date were about $660,000,000 larger than in midsummer. Of this growth in member bank credit about $325,000,000 repre sented an increase in commercial loans, considerably small er than for the same period last year, and about $335,000,000 increase in investments and loans on securities. At the Reserve banks total bills and securities increased during the four weeks ending October 19, as usual at this Monthly averages of daily figures for 12 Federal Reserve Banks. Latest figures are averages of first 23 days in October. Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for first three weekly report dates in October. DISTRIBU TIO N — Trade of wholesale and retail firms increased in September by somewhat less than the usual seasonal amount. Compared with a year ago sales of wholesale firms in nearly all lines, except shoes and drugs, wrere smaller. Sales of department stores were in about the same volume and those of mail order houses and chain stores were somewhat larger. Inventories of mer chandise carried by reporting wholesale firms in leading lines were reduced in September and continued smaller than last year. Stocks of department stores, on the other hand season, but were on the average about $60,000,000 below the level of the corresponding period last year. The in crease, which was largely in the form of additions to the banks’ holdings of acceptances, reflected chiefly an increase in member banks reserve requirements and an export de mand for gold. Some seasonal firmness in the money market in Oct ber was reflected in an increase from 3% to 3% per cen in rates on 90-day bankers’ acceptances; the rate on com mercial paper remained unchanged at 4 per cent.
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