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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication in Morning Papers of September 1, 1942 FEDERAL RESERVE BANK OF ST. LOUIS C O U R T E S Y I L L IN O IS D E V E L O P M E N T C O U N C IL I l l i n o i s A p p l e Or c h a r d s GENERAL SUMMARY I N COM M ON w ith the rest of the country, pro duction of w ar goods in the E ighth D istrict during July and the first part of A ugust was the dom inant factor in m anufacturing. Production is getting under way at certain new w ar plants and is being increased at others already in operation. Construction work on additional war facilities is proceeding rapidly. Spending for w ar purposes in the U nited States during July totaled $4.6 billion as compared writh $4.1 billion in June. On the basis of most recent reports the A ugust total will reach $5 billion. P ro duction of durable goods, a high proportion of which are designed for direct w ar uses, as m easured by the durable goods index of industrial production prepared by the Board of Governors of the Federal Reserve System, rose 8 points in July to a new high. O utput of non-durables rem ained virtually unchanged. Total industrial production, as m eas ured by the unadjusted index, also reached a new •high, advancing 4 points in the month. The index now stands at 181, 55 per cent above the level of May, 1940. The index of m unitions production pub lished by the W ar Production Board, and embracing production of planes, ships, tanks, guns, am m uni tion and equipm ent, in July was three and one half times as large as in November, 1941. In June out put of m unitions was just three times as great as before Pearl H arbor. Indicative of high levels of m anufacturing activ ity in the Eighth D istrict during July and early August, steel ingot production was m aintained at virtual capacity up to m id-August when necessary repairs to furnaces caused a tem porary curtailm ent of operations. O utput of shoes in July was 9 per cent greater than th at of June. Consumption of elec tricity by industrial users in July exceeded th at of June by 4 per cent and was 32 per cent above volume consumed a year ago. O utput of lum ber at mills in the district continued at extrem ely high levels. Prim ary distribution in the district was in heavy volume during July but was down som ew hat from June levels. Carloadings of all railroads operating in the district during the 4-week period ending July 25 were belowr those of the previous 4-week period by 4 per cent and those of the comparable period last year by 1 per cent. Loads interchanged for 25 connecting lines at St. Louis in July were 1 per cent below those of June but 31 per cent above those of July, 1941. Prelim inary indications are th at A ugust interchanges will exceed those of July. Cumulative interchanges for the first 7 m onths of 1942 were 33 per cent greater than those of the corresponding period in 1941. Inasm uch as more efficient use is being made of railroad cars and hauls are longer, the simple carloading figures tend to underem phasize the gains in rail transport, and actually, distri bution of goods in the district by rail is much heavier as compared with a year ago. Tonnage moved by the Federal Barge Lines between St. Louis and New Orleans on the Mississippi River during July was 8 per cent greater than th at moved during June but 10 per cent below th at of July, 1941. Production of bitum inous coal in E ighth D istrict states in July was 4 per cent greater than in June and 14 per cent more than in July, 1941. For the first seven m onths of this year coal production in the district was 28 per cent above th at of the com par able period last year. A t Illinois mines July output was down 7 per cent from June and only 5 per cent above th at of July, 1941, although num ber of mines operated and num ber of employees w orking in July, 1942, exceeded both those of the previous m onth and the same m onth of last year. Construction contract awards in the E ighth Dis trict in July were 5 per cent below June and 9 per cent below a year ago. Building perm its granted in the principal cities of the district declined 65 per cent in dollar volume from June to July and were 82 per cent below a year ago. D E T A IL E D SU R V E Y O F D IS T R IC T M A N U FA C T U R IN G Iron and Steel — Production of steel ingots and castings in this area continued at virtual capacity during July and the first part of A ugust, but at midAugust necessary furnace repairs caused the rate of ingot operations to fall to 85.3 per cent of capacity from the rather steadily m aintained rate of 95.5 per cent of a m onth ago. L ast year at this tim e the rate was 98 per cent. Steel ingot production, according to the American Iron & Steel Institute, in the U nited Page 2 States in July broke all records for th at month, totaling 7,148,824 tons. Production in June was 7,022,155 tons and in July, 1941, was 6,812,224 tons. Scrap supply continues to be adequate to m ain tain the high rate of operations in this district with mill and foundry inventories holding at about two w~eeks supply. It is anticipated th at no curtailm ent in operations will result because of scrap shortage, at least until late this fall. Supply of pig-iron and of hot metal in the St. Louis district is in sufficient volume at present, and a second blast furnace will be in operation shortly. It is expected th at as new ingot facilities come into operation about the first of the year, the per cent of pig-iron and hot metal used in furnace charges will be increased propor tionate to the scrap used. Dem and for plates, sheets, strip and other steel products shows no sign of lessening in this area. Only the highest priority ratings are assured of delivery at any tim e in the imm ediate future and m ost of these products are going directly to the Army, Navy and M aritim e Commission. Shoes—'Prelim inary reports indicate th at shoe production in the E ighth D istrict in July was 9 per cent above June output but 3 per cent below produc tion in July, 1941. The rise was som ew hat less than usual for the month. Production in June totaled 6,778,000 pairs with E ighth D istrict output increas ing in th at m onth more than did production for the entire country. The same trend is probable for July. The unadjusted index of shoe production in the district for June was 128.6 per cent of the 1924-26 average. W hiskey — Of the 60 distilleries in K entucky 48 were in operation on July 31, down one from June 30, but 23 more than were in production on July 31, 1941. M ost distilleries are operating at capacity, although m ajor items now being produced are alco hol and high wrines instead of whiskey. M ost recent trade reports indicate th at conversion of distilleries will be complete by Novem ber 1. A num ber of recti fying columns are being installed in m any smaller distilleries so as to enable the direct production of 190 proof alcohol. The demand for bulk whiskey continues strong at firm prices, due in great m easure to efforts on the p art of distributors to build up inventories for ad vertised brands. Trade sources believe th at present warehouse inventories are sufficient for at least 5 years’ consumption. Stocks of whiskey in K entucky warehouses at the end of June totaled 233,579,000 taxgallons. U nited States stocks totaled 519,197,000 gallons. were 13 per cent above the corresponding period in 1941, although unit volume was about equal in the tw o periods. Prelim inary figures on furniture store sales in the district indicate a decline of 8 per cent from June and of 16 per cent from July, 1941. Cash sales represent a considerably larger portion of total departm ent store sales this year than has been the case in previous years. In July, 1941, cash sales accounted for 43 per cent of total departm ent store sales while in July, 1942, they accounted for 56 per cent of the total. Both open book credit and instalm ent credit sales have been declining in rela tive im portance to total sales w ith the percentage decline in instalm ent sales much more pronounced than the percentage decline in open book sales. This is due in large part to declining stocks of, and freeze orders on goods norm ally purchased on instalm ent term s. Collection ratios for E ighth D istrict stores have advanced this year as compared w ith previous years. This trend has been accentuated in the past three m onths due to further restrictions in instalm ent credit term s and to the recent tightening of charge account credit term s. Paym ents on charge accounts now m ust be made by the tenth of the second month following the m onth of purchase or the account will be frozen and no more credit will be extended on listed articles until the account is paid up or con verted to an instalm ent account. The ratio of col lections during July to instalm ent receivables out standing on July 1 was 24 per cent as compared w ith 18 per cent last year. Collections on open book accounts in July accounted for 63 per cent of out standings as compared w ith 49 per cent in July, 1941. W holesale trade in the district in July rose 9 per cent from June and was 17 per cent above the level of last year. Much of the increase from a year ago is attributable to higher prices. Dollar volume of w holesaler’s stocks in July was 4 per cent greater than in June and 14 per cent greater than in July, 1941. U nit volume of stocks was probably not much greater than last year’s level. R E T A IL A N D W H O L E S A L E T R A D E General Conditions — According to the U. S. De partm ent of A griculture report of A ugust 1, indi cated production of 7 m ajor E ighth D istrict crops for 1942 will be 4 per cent less than production in 1941, but 2 per cent more than average production during the ten-year period 1931-40. The decline as compared w ith last year is due to a 50 per cent de crease in w heat production in the district and to a slight decrease in corn production. D epartm ent store trade in the E ighth D istrict as m easured by dollar volume of sales of reporting stores in the principal cities in July was 12 per cent below June but 3 per cent above July, 1941. Since departm ent store prices have been stabilized at about 16 per cent above the level of the correspond ing period of last year, the physical volume of de partm ent store trade is appreciably below th at of last year. For the first 7 m onths of 1942 dollar sales A G R IC U L T U R E Page 3 W eather conditions throughout the E ighth Dis trict during July and the first p art of A ugust were spotted. Rainfall was light in the m ore southern sections of the district during the last p art of July but precipitation after A ugust 1 helped conditions in many areas. Cash farm income in the U nited States in June totaled $1,059 million as compared w ith $993 mil lion in M ay and $773 million in June, 1941. The increase from May to June was about normal. For the first half of 1942 cash farm income totaled $5,773 million as opposed to $4,012 million for the com par able period in 1941. Incom e from crops was up 36 per cent and from livestock up 48 per cent. Recent estim ates indicate th at 1942 cash income m ay ex ceed $14 billion. Cash farm income in E ighth D is trict states during June was $203 million as com pared w ith $205 million in May and $143 million in June, 1941. Incom e for the first half of 1942 totaled $1,181 million as compared w ith $791 million for the first half of 1941. The index of farm prices in the U nited States on July 15 stood at 154 per cent of the 1909-14 average, equivalent to 101 per cent of parity. A 2 per cent advance in the general index took place betw een June 15 and July 15 and on the latter date farm prices were 23 per cent higher than a year earlier. Farm prices on July 15 in m ost E ighth D istrict states registered small declines as compared wT ith June 15 due prim arily to drops in prices of grains and fruits and vegetables, but were well above levels prevailing on July 15, 1941. Prices in the southern portions of the district as compared w ith a year earlier were appreciably higher than those for the rest of the district and for the country as a whole. A gricultural employment as estim ated by the U. S. D epartm ent of A griculture on A ugust 1 totaled 11,249,000 as compared w ith 12,009,000 on July 1 and 11,138,000 on A ugust 1 1941. T he farm labor situation in this district rem ains som ew hat confused w ith certain sections reporting real or anticipated shortages and others w ith a seem ing sufficiency of farm workers. More family w orkers seem to be em ployed on farm s than has been the case in recent years. C otton— T he E ighth D istrict cotton crop accord ing to the A ugust 1 estim ate of the U. S. D epart m ent of A griculture, will total 3,614,000 bales which is 3 per cent more than 1941 production and 11 per cent more than the ten-year (1931-40) average pro duction. Cotton production for the country as a whole for 1942 is estim ated at alm ost 22 per cent greater than in 1941. Production of longer staple cotton is expected to be considerably heavier this Page 4 year than last. A pproxim ately 85 per cent of the U. S. production of this type of cotton is being grow n in E ighth D istrict states. W eather condi tions in the cotton-raising sections of the district during July and early A ugust were generally favor able for the developm ent of the crop. W eevil infes tation, while general throughout the area, seems to be relatively light except in the southw estern sec tion of the district. Spot cotton m arket activity during late July and early A ugust was very light w ith sales appreciably below the volume of the corresponding period last year. Inquiries from mills were not in great vol ume and there are some indications, according to trade sources, of a slackening from the high level of domestic mill activity. Spot cotton price of 15/16 m iddling grade on the M emphis m arket between July 16 and A ugust J5 ranged betw een 18.35c per pound and 19.65c per pound, closing on the latter date at 18.60c per pound. Grains — According to the A ugust 1 estim ate of the U. S. D epartm ent of A griculture, 1942 corn pro duction in the E ighth D istrict will total 336,793,000 bushels or 3 per cent less than the 1941 harvest of 348.402.000 bushels. Production of oats in the dis trict for 1942 will be 79,391,000 bushels or 12 per cent greater than 1941 production of 71,149,000 bushels. Tam e hay output for 1942 is estim ated at 8.650.000 tons or 5 per cent more than the 1941 yield of 8,232,000 tons. Both corn and hay estim ates were revised upw ard in the past m onth but the estim ate for oat production is appreciably lower than th at of July 1. A lthough total w heat production for the country in 1942 will probably be the second highest on rec ord, an abnorm ally small w inter w heat crop for the E ighth D istrict was forecast on A ugust 1 by the U. S. D epartm ent of A griculture. Indicated 1942 production is 25,396,000 bushels, 50 per cent below last year’s harvest and 55 per cent below the tenyear (1931-40) average production. W heat p ro s pects in this district declined 15 per cent betw een July 1 and A ugust 1. All portions of the E ighth D istrict show decreases in w heat production from a year ago b ut the m ost pronounced declines are in Illinois and Missouri. Livestock — Receipts of livestock at the National Stockyards in July were 9 per cent below those of June, but 3 per cent above those of July, 1941. R e ceipts of hogs were sharply reduced in the m onth while receipts of sheep and lambs were appreciably higher than in June. Shipm ents of cattle, hogs and sheep in July were all higher than in June. T he num ber of cattle on feed for m arket in corn- belt states on A ugust 1, was 19 per cent less than on A ugust 1, 1941, but was little changed from the total of A ugust 1, 1940, and was greater than num ber on feed in any other year since 1933. Missouri, w ith only 10 per cent less cattle on feed than at the same tim e last year, registered the sm allest decrease of all corn-belt states. Tobacco — In the burley tobacco region plentiful rainfall and hot w eather were conducive to rapid grow th and development of the crop. T here have been scattered reports of field fire due to excessive m oisture but it is believed that relatively little dam age has resulted from th at cause as yet. However, if excessive m oisture continues, crop prospects may decline. In upland regions of the burley area more rainfall is needed. Plans to cut the early planting of burley tobacco in the first p art of A ugust were retarded by rainfall which m ight possibly start a second grow th. The late portion of the crop is reported later than usual and promises to yield tobacco of good quality although the total yield is indicated as smaller than last year. T here are indi cations th at the pronounced labor shortage in the burley district may make it difficult to harvest the crop as rapidly as it m atures. H ot, dry w eather in Green River and stem ming district fields caused some damage during July but heavy rain in early A ugust should benefit crops which are well cultivated and topped. In the darkfired area topping of tobacco was practically com plete by A ugust 1 and additional m oisture was needed to aid in developing the size of leaf. Rain fall in early A ugust followed by extrem ely hot days resulted in some top leaf blistering. EM PLOYM ENT T otal civil non-agricultural em ploym ent in the U nited States in June was 41,415,000, up 0.4 per cent in the m onth and 4.9 per cent above the total for June, 1941. In E ighth D istrict states non-agricultural em ployment for June was virtually un changed from the May level but was 6 per cent above th at of June, 1941. M ost E ighth D istrict states registered very small increases as compared w ith a m onth ago. The m ajor factor in the gain in em ploym ent as compared w ith May was the increase in m anufacturing employment. A survey of the labor m arket made by the Bureau of Em ploym ent Security in May, 1942, indicates th at there were no serious labor shortages in impor tan t labor m arkets in the E ighth D istrict. There are, however, anticipated shortages in St. Louis, Evans ville, Pine Bluff and Texarkana although the supply in these centers as of May was adequate. More re cent fragm entary reports tend to indicate th at labor shortages in m anufacturing areas of the district are still in the future although as new plants are com pleted and production for war expands and as men are called for arm ed service, the problem of m ain taining an adequate labor supply here is likely to be increasingly difficult. COST OF L IV IN G A N D PR IC ES The cost of living in large cities in the U nited States, according to the U. S. D epartm ent of Labor, continued to advance from June 15 to July 15 de spite the fact th at ceilings were imposed upon a num ber of services entering into the cost of living budget on July 1. The increase in the m onth was 0.4 per cent, and since the outbreak of w ar in 1939 has been 16.2 per cent. In St. Louis, the only E ighth D istrict city covered by the m onthly index, cost of living declined 0.3 per cent in the m onth and was 15.7 per cent above the level of September, 1939. The advance in cost of living in the country in the past month was due alm ost entirely to rises in the cost of uncontrolled food items. Prices of controlled foods rose only 0.3 per cent in the month while un controlled items rose 2.5 per cent. Food costs in major cities in the U nited States on July 14 were 1.1 per cent above a m onth earlier and 16.8 per cent above the comparable date last year. Of E ighth Dis trict cities covered by the index L ittle Rock and Memphis registered the greatest advance in the month, 1.1 per cent, while food prices in Louisville declined 0.6 per cent. M easured against a year ago, food costs in Little Rock showed the largest increase in the district. Price control appears to be w orking well so far. Prior to May 11 and 18 when general wholesale and retail price ceilings were put into effect, price con trol was selective. A recent Office of Price A dm in istration study indicated a high degree of correlation between the percentage of items controlled within a certain classification and the am ount of price rise since August, 1939, as m easured by the Bureau of Labor Statistics index of wholesale prices. Thus, metal and metal products w ith more than 90 per cent control at mid-April, 1942, rose only 11 per cent from A ugust, 1939, to April, 1942, while farm product prices w ith only 3 per cent under control rose 71 per cent in the same period. Prices of m an ufactured items and sem i-m anufactured items with 52 and 94 per cent, respectively, under control in April, 1942, had registered a 25 per cent gain in price since the outbreak of war, while raw m aterial prices, only 40 per cent controlled, had risen more than 50 per cent in the same length of time. Since April 18 wholesale price increases have been very small in Page 5 all classes. The all-commodity index on August 15 was only 0.6 per cent higher, farm products only 0.8 per cent higher, but foods were up 1.9 per cent. Raw m aterial prices gained about twice as much as did prices of m anufactured items, and semi-man ufactured items declined by 0.1 per cent. Since the institution of general retail price ceil ings the cost of living has shown only a very small increase. Generally speaking, there are no marked shortages of goods going into the cost of living budget other than durable consumer goods and there have been no buying waves comparable to those of last summ er and early this year which would create added pressure on established price ceilings. B A N K IN G A N D F IN A N C E Loan volume throughout the Eighth D istrict con tinued to decline from m id-July to mid-August. M ajor factors contributing to the decline are the difficulty of increasing inventories due to shortages resulting from the curtailm ent of consumer goods m anufacture, the decline in volume of consumer in stalm ent loan paper, and higher individual and busi ness incomes which are being used for loan liquida tion. This latter factor is particularly strong in rural sections where farm ers have not only curtailed their borrow ing from banks but are liquidating their loans much more quickly than in past years. Total loans at reporting m em ber banks in this district dropped $9 million, or 2 per cent, between July 15 and August 12, and on the latter date were 6 per cent below a year earlier. Real estate loans was the only classi fication th at was higher than on the comparable date in 1941. Consum er instalm ent loans at banks in the district declined 8 per cent during July. Total investm ents at reporting member banks on A ugust 12 were $21 million or 3 per cent greater than a m onth earlier and $225 million or 51 per cent above the level of a year ago. The m ajor increase in the past m onth has been due to increased hold ings of T reasury bills. As compared with a year ago the rise in holdings of T reasury bills, bonds and cer tificates of indebtedness has been most marked. On A ugust 18 the Board of Governors of the Fed eral Reserve System, acting under recent amend m ents to the Federal Reserve Act, reduced reserve requirem ents on demand deposits of central reserve city member banks from 26 to 24 per cent. The re duction became effective A ugust 20 and created about $400 million additional in excess reserves in the central reserve cities of New York and Chicago. Since the last issue of this review the State Bank & T ru st Company, Quincy, 111., and the State Bank of H ardinsburg, H ardinsburg, Ind., have become members of the Federal Reserve System. Page 6 C A SH FA R M IN C O M E Cumulative for 6 months June 1941 1940 1942 1941 1942 $ 49,594 $ 31,232 $ 83,997 $ 9,993 $ 8,414 255,691 417,455 281,495 51,492 73,146 125,237 227,836 147,244 25,457 41,081 68,137 74,440 103,802 15,381 11,507 30,429 55,658 39,757 7,704 9,090 109,890 136,992 20,5,000 40,646 27,304 61,453 48,957 87,307 ... 13,908 11,309 669,573 790,975 1,181,055 , 203,245 143,187 of dollars) M ississippi R E C E IP T S A N D S H IP M E N T S A T Receipts June, July, 1942 1942 117,581 123,403 Cattle and C alves. . , H o g s .............................. , . .201,706 271,147 1,334 1,706 H orses and M u les. ., ...1 2 9 ,3 9 9 97,872 N A T IO N A L ST O C K Y A R D S Shipments June, July, July, July, 1942 1942 1941 1941 114,019 52,210 51,680, 41,859 204,338 60,436 53,592 72,404 74 149 1,293 1,478 51,440, 30,629 37,812 119,538 ,450,020 494,128 438,044 165,379 137,379 152,149 W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S Bureau of Labor Aug. A ug. A ug . 15/42 comp, with Statistics Aug. July 15/42 8 /4 2 18/42 16/41 July 18/42 A ug. 16/41 (1926=10,0) 98.9 106.0 10,0.5 95.8 All Commodities. Farm Products 98.3 104.9 98.3 95.9 98.6 105.4 99.7 95.7 89.6 86.4 86.7 90.7 C O ST O F L IV I N G July 15, June 15, Sept. 15, 1942 1939 1942 100.6 116.9 116.4 116.6 116.2 100.4 Bureau of Labor Statistics (1 9 3 5 -3 9 = 1 0 0 ) United States. . . . St. L o u is............ Bureau of Labor Statistics (1935 -3 9 = 1 0 0 ) July 14, 1942 U . S. (51 cities) . . . St. L o u is............ , L ittle R ock . . . . L o u is v ille ......... , M em p h is............ C O ST O F F O O D June 16, July 15, 1942 1941 124.6 126.0 124.7 122.4 125.5 123.2 125.9 123.3 123.2 124.1 106.7 108.5 104.9 107.9 105.7 0.6% 1.0 2.2 0.1 + + + + 10.4% + 22.7 + 15.9 + 5.6 July 15/42 comp, with June 15/42 Sept. 15/39 0.4% 0.3 + + 16.2% + 15.7 July 14/42 comp, with June 16/42 July 15/41 1.1% 0.1 1.1 0.6 1.1 + + + + + + + + + 16.8% 16.1 18.9 13.4 18.7 IN D E X E S O F E M P L O Y M E N T IN M A N U F A C T U R IN G IN D U S T R I E S B Y M E T R O P O L IT A N A R E A S Bureau of Labor May, April, May, M ay,’42 comp, with Statistics 1942 1942 A pril,’42 M ay,’41 (1937=10.0) 1941 E vansville................... L o u isv ille .................. M em phis..................... St. L o u is..................... 78.1 100.9 120..2 118.0 81.7 102.6 115.5 117.0 97.2 115.1 114.2 112.1 — — + + 4.4% 1.7 4.1 0.9 — 19.7% — 12.3 + 5.3 + 5.3 B U IL D IN G P E R M IT S N ew Construction Repairs, etc. N umber Cost N umber Cost 1942 1941 1942 1941 1942 1941 1942 1941 (C ost in thousands) E vansville. . . . L ittle R o ck . . . Louisville 2 22 22 88 122 256 395 July T o ta ls. . . June “ 35 71 238 604 312 1,260 1,032 $ 4 21 188 171 133 517 1,803 $ 353 233 480, 2,249 576 3,891 2,378 83 71 53 81 162 450 618 143 118 72 412 159 904 858 $ 57 $ 64 19 59 18 39 121 138 74 290 289 590 527 1,112 V A L U E C O N S T R U C T IO N C O N T R A C T S L E T (In thousands July,’42 comp, with of dollars) July,’42 June,’42 Ju ly,’41 June,’42 July,’41 Total 8th D is t.. $ 96,754 $101,615 S ou rce: F. W . D odge Corporation. — 5% — 9% C O N S U M P T IO N O F E L E C T R IC IT Y July, 1942 N o. cf July, June, July, Custom- 1942 compared with 1942 1941 ers* K .W .H . K .W .H . K .W .H , June, 1942 July, 1941 (K .W .H . in thous.) Evansville . . . . Little Rock . . . , 40 4,741 35 2,991 82 15,969 31 5,165 946 Pine Bluff . . . . 19 . 132 84,762 . 339 114,574 ^Selected industrial customers. (In thousands of tons) $106,509 3,807 2,944 16,0.37 5,052 811 81,472 110,123 5,483 2,884 14,344 4,153 949 63,696 91,509 +25% + 2 -0+ 2 + 17 + 4 + 4 — 14% + 4 + 11 + 24 -0+ 33 + 25 P R O D U C T IO N O F B IT U M IN O U S C O A L J u ly /4 2 comp, with J uly /4 2 Jun e/42 J u ly /4 1 Jun e/42 July/41 United States. . . . 47,700 4,335 48,412 4,656 44,080 4,118 — 1% — 7 + + 8% 5 FEDERAL RESERVE O PERATIO NS DUR IN G JULY , 1942 Pieces Amounts LOADS IN TERC HA NG ED FOR 25 RAILROADS AT ST. LO U IS July,’42 June,’42 J u ly ,’41 First nine days A u g .,’42 A u g .,’41 7 m os.’42 943,295 145,930 147,736" 111,641^ 42,570 31,219 Source: Terminal Railroad A ssociation of St. Louis. W H O LE SA LIN G Lines of Commodities A utom otive Su pplies............................ . . D rugs and C hem icals......................... • • Dry Goods . • . . ..................................... .. Electrical Supplies................................ F u rn itu re................................................... G roceries.................................................. .. H ardw are................................................ .. M achinery, Equipment and Supplie :S. Plum bing S u p p lie s .............................. . . Tobacco and its P ro d u cts................ . . M iscella n eo u s......................................... . . T otal all lin es* ......... ............................. . . *Includes certain lines not listed above. July, 1942 compared with June,’42 July,’41 July 31, 1942 comp, w ith July 31, 1941 + 60% + 18 + 18 — 32 + 3 + 24 — 10 + 3 + 12 — 32 (— + 24 + 17 — 1% + 8 + 16 — 27 — 32 + 17 — 9 + 1 — 16 + 6 +33 + 9 DEPARTM ENT STORES 7 m os.’42 to same period ’41 +25 + 43 — 9 — 28 + 2 + 8 + 14 Stocks on Hand Stock Turnover July 31/4 2 comp, with July 31,’41 Jan. 1, to July 31, 1942 1941 N et Sales July, 1942 compared with June,’42 July,’41 7 m os.’41 711,085 Stocks N et Sales Data furnished by Bureau of Census, U . S. D ept, of Commerce. (Incl. Louisville, M emphis, L ittle Rock branches) 1.78 1.87 + 40% + 69% Ft. Smith, A rk .. . — 11% + 3 4 % 1.96 2.26 + 44 +25 21 L ittle Rock, Ark. — 5 — 5 21 — 15 E. St. Louis, 111.. — 1.91 2.30 + *28 21 — 4 + 6 Quincy, 111............ — +16 10 Evansville, I n d .. . — 14 2.90 1.98 *88 —1 1 + 2 — 15 L ouisville, K y .. . . 2.43 1.81 + 53 + 15 S i Louis, M o .... — 14 + 1 1.87 1.42 + 43 Springfield, M o .. . — 6 — 18 + 9 — 4 — 16 Jackson, Tenn. . . — 4 + 138 1.72 1.99 + 13 + 17 Memphis, T en n .. . — 6 + 33 1.90 1.84 — 3 *A11 other c itie s. . — 13 + 4 + 53 1.83 2.37 + 13 8th F. R. D istrict —12 + 3 *E1 Dorado, Fayetteville, Pine Bluff, A r k .; Alton, Harrisburg, Mt. Vernon, 111.; Vincennes, I n d .; D anville, H opkinsville, M ayfield, K y .; Chillicothe, Mo. T rading days: July, 1942— 26; June, 1942— 26; July, 1941— 26. O utstanding orders of reporting stores at the end of July, 1942, were 26 per cent less than on the corresponding date a year ago. Percentage of accounts and notes receivable outstanding July 1, 1942, collected during July, by cities Instalm ent E xcl. Instal. Instalm ent E xcl. Instal. A ccounts Accounts Accounts Accounts + + 57% 53 63 51 Fort S m ith . . L ittle R o ck . . L ouisville . . . M emphis . . . . + Q uincy............ 2 1 % St. L ouis. . . . 26 Other c itie s .. 5 8th F. R. D ist. 24 63% 71 64 63 IN D E X E S OF DEPARTM ENT STORE SALES AND STOCKS 8th Federal Reserve District (1923-1925 average = 100) June, 1942 1942 May, 1942 July, 1941 82 119 77 81 108 , 87 99 108 108 Sales (daily average), Seasonally a djusted .. . 126 131 126 Stocks, Unadjusted .................................................. , 121 132 130. 128 Stocks, Seasonally ad ju sted .................................. Trading days: July, 1942— 26; June, 1942— 26; July, 1941 -26. SPECIALTY STORES N et Sales July, 1942 7 m os.’42 to same compared with period ’41 June,’42 July,’41 Stocks on Hand July 31,’42 comp, with July 31,’41 Stock Turnover Jan. 1, to July 31, 1942 1941 1.79 1.65 53% M en’s Furnishings .— 36% + 2 4 % +32% 5.10 4.32 58 B oots and S h o e s .. . — 26 +42 +29 Percentage of accounts and notes receivable outstanding July 1, 1942, collected during July: M en’s F u rn ish ings.......................59% Boots and S h oes.............................47% t CHANGES IN P R IN C IPA L ASSETS AND L IA B IL IT IE S FED ER A L RESERVE BANK OF ST. LO U IS (In thousands of dollars) Ausr. 12, A ug. 12. 1942 Change from Tu.............................. July 15, A ug. 13, 1942 1941 14 243 63,183 63,440 14 290 168,700 169,004 + 6 — 100 + 12,179 + 12,085 + + + 656,966 T otal d e p o s i t s . . . . . ............................................ 433,894 F. R. N otes in circulation.............................. 389,730 + 847 — 2,681 + 15,443 + 95,230. + 28,978 + 1 3 2,627 Industrial commitments under Sec. 13b. . — 1,150 + Industrial advances under Sec. 13b. Other advances and r e d is c o u n ts .... U . S. securities......................................... T otal earning a s s e t s ......................... $ 1,047 + 341 Checks (cash items) handled................................ 5,648,038 $2,015,693,340 33,764,459 Collections (non-cash item s) handled................ 89,982 507,171,453 Transfers of funds....................................................... 4,871 46,851,841 Currency received and counted.............................. 11,739,811 1,209,208 Coin received and counted....................................... 13,923,017 1,295,500. Rediscounts, advances and com m itm ents......... 8 N ew issues, redemptions, and exchanges of 190,388,175 securities as fiscal agent of U . S. Govt., etc. 262,894 Bills and securities in custody'— coupons clipped 7,781 RATES OF T H IS BAN K FOR ACCOM M ODATIONS U N D E R TH E FED ER A L RESERVE ACT Advances to banks, secured by direct obligations of _ i per annum the United States, under paragraph 13 of section 1 3 ..1 Advances to member banks, secured by direct obliga tions of the U nited States or by such Government guaranteed obligations as are eligible for collateral, >per annum under paragraph 8 of section 1 3 ............................................1 Rediscounts and other advances to member banks un per annum der sections 13 and 13a..............................................................1 per annum Advances to member banks under section 1 0 (b )................ 1Y Advances to individuals, firms, and corporations, ether than banks, secured by direct obligations of the U nited States, under paragraph 13 of section 1 3 . . . . . . 3 % per annum Industrial advances to member banks, nonmember banks, and other financing institutions under sec tion 13b: r i % to (a) On portion for which such institution is obligated t 1H % Per annum (b) On remaining portion — N o charge to financ ing institution. Federal Reserve Bank will retain interest collected from borrower. Advances to established industrial or commercial [ 2 y2 % to businesses under section 13b................................................ t 5 % per annum Commitments to established industrial or commercial businesses under section 13b.................................................... 10% to 25% of the loan rate charged borrower with a minimum rate of Y % per annum. Commitments to member banks, nonmember banks, and other financing institutions, under section 13b................10% to 25% of the loan rate charged borrower with minimum rate of Y\ % per annum provided: that no commitment will be given on loan on which bor rower is charged over 5% per annum. PR IN C IPA L RESOURCE AND L IA B IL IT Y ITEMS OF REPO RTING M EM BER BANKS (I n thousands of dollars) A ugust 12, 1942 Change from July 15, A ugust 13, 1942 1941 Total loans and investm ents......................... $1,053,528 + 12,677 + 2 0 1,369 Commercial, industrial, agricultural loans 224,739 — 5,933 — 10,100 Open market paper........................................... 15,634 — 2,569 — 5,236 Loans to brokers and dealers in securities 3,272 — 426 — 606 29 Other loans to purchase and carry securities 9,752 — 2,411 61,429 + Real estate l o a n s ............................................. 699 + 1,456 234 Loans to banks......... ......................................... 722 + 635 — Other loans........................................................... 68,975 — 1,145 — 6,183 T otal loans......................................................... 384,523 — 8,768 — 23,314 Treasury b ills....................................................... 83,650 + 18,0.71 + 82,475 Certificates of indebtedness............................ 71,959 + 2,403 + 71,959 Treasury n o t e s .................................................. 61,339 — 3,014 + 26,666 U . S. bonds......................................................... 297,232 + 1,612 + 77,515 Obligations guaranteed by U . S. Gov’t. . . . 35,460 + 1,636 — 42,973 Other securities.................................................. 119,365 + 737 + 9,041 669,005 + 2 1 ,4 4 5 + 224,683 Total investm ents................ ........................... Balances with dom estic ban ks..................... 151,394 + 1,776 — 53,407 Demand deposits — adjusted*....................... 728,772 + 32,945 + 131,873 Time deposits.................. ........... ......................... 184,450 + 199 — 6,434 U . S. Government deposits............................ 37,103 — 11,150 + 15,493 Interbank d e p o s its........................................... 455,959 + 13,502 + 34,512 *Other than interbank and Government deposits, less cash items on hand or in process of collection. Above figures are for 24 member banks in St. Louis, Louisville, M em phis, L ittle Rock and E vansville. T heir resources comprise approximately 75% of the resources of all member banks in this district. (In thousands of dollars) D E B I T S TO I N D I V I D U A L A C C O U N T S July, June, Ju ly,’42, comp, with July, 1942 1942 1941 June,’42 July,M l E l D orad o,......... Ark.$ 9,079 17,369 Fort Sm ith,......... “ H e le n a ,................ “ 1,742 L ittle Rock, . . . . “ 62,026 21,491 Pine Bluff, _____ “ Texarkana,-Ark.-Tex. 17,150 E .S t.L .-N at.S .Y .,U l. 71,783 Q u in c y ,................ “ 12,450 E vansville,........... Ind. 62,005 L o u is v ille ,........... K y. 274,791 Owensboro, . . . . . . “ 8,545 Greenville,......... M iss. 5,858 St. L ou is,. . . . . . . Mo. 815,764 2,783 Sedalia,.................. “ Sp rin gfield ,......... “ 24,038 M em phis,........... Tenn. 184,824 T otals........................1,591,696 A lto n ,.......................111. 12,472 P a d u c a h ,..............K y. 8,174 Cape Girardeau, .M o. 4,055 H a n n ib a l,........... “ 3,773 Jefferson City, . . “ 16,223 J a c k so n ,........... Tenn. 6,585 (Completed August 25, 1942) 8,062 $ 6,304 17,527 14,931 1,741 1,498 61,211 53,986 20,679 8,168 22,189 9,372 76,234 56,281 10,803 13,904 54,754 46,788 255,609 275,181 8,014 5,610 5,371 876,519 759,300 3,213 2,574 23,832 21,382 189,951 176,293 1,658,621' "l,426,035 13,411 9,158 4,251 3,870 16,135 7,137 + 13% __ i -0 + 1 + 4 — 23 — 6 — 10 + 13 -0+ 7 + 4 7 — 13 + 1 — — — — — — 3 4 7 - 44% b 16 - 16 - 15 -163 - 83 - 28 - 15 - 33 - 8 + 27 + + + + + + 9 7 8 12 5 12 11 5 3 + 1 Page 7 INDUSTRIAL PRODUCTION N A TIO N A L SUM M ARY O F CO N D ITIO N S BY B O A R D O F G O V E R N O R S O F F E D E R A L R E S E R V E SY ST E M 1938 1940 Federal Reserve m onthly index of physical volume of pro duction, adjusted for seasonal variation, 1935-39 average = 100. Subgroups shown are expressed in terms of points in the total index. Latest figures shown are for July, 1942. DEPARTMENT STORE SALES AND STOCKS Federal Reserve monthly indexes of value of sales and stocks, adjusted for seasonal variation, 1923-25 average = 100. L atest figures shown are for July, 1942. WHOLESALE PRICES Bureau of Labor Statistics’ w eekly indexes, 1926 average = 100. L atest figures shown are for week ending August 15, 1942. MEMBER BANK RESERVES W ednesday figures. Required and excess reserves, but not the total, are partly estimated. L atest figures shown are for A ugust 12, 1942. Page 8 Production—Industrial output rose further in July and the Board’s season ally adjusted index advanced from 176 to 180 per cent of the 1935-39 average. Activity continued to increase in the machinery and transportation equip ment industries and in other lines producing war products. Shipbuilding expanded further and 71 merchant vessels were delivered in July. These had an aggregate deadweight tonnage of 790,300 tons — an all-time record for a single month’s deliveries. In the automobile industry armament production increased in July to an annual rate of about $5 billion as compared with a peak year’s civilian output of $4 billion. Iron ore shipments down the Great Lakes reached a new record of 13.4 million gross tons in July and plans were announced for improving rail and harbor facilities so that shipments next season could exceed considerably prospective shipments of 90 million tons or more this year. Last season 80 million tons were shipped. In most other lines of manufacturing and mining, activity in July was maintained at about the levels prevailing in June. There were reports that some plants were forced to curtail operations owing to lack of certain mate rials, and further investigations were undertaken to determine present and prospective availability of material supplies. Value of construction contracts awarded in July showed a reduction of about 20 per cent from the record level reached in June, according to figures of the F. W. Dodge Corporation. Declines were reported for most types of construction; awards for manufacturing buildings, however, increased fur ther and constituted about one-third of total contracts let. As in June, pub licly-financed work amounted to over 90 per cent of the total. In the first seven months of this year, awards were about 50 per cent larger than in the corresponding period last year. Distribution — Distribution of commodities to consumers declined less than seasonally in July. The Board’s adjusted index of department store sales, which had dropped from a peak of 138 per cent of the 1923-25 average in January to 104 in June, rose to 117 and sales by variety stores and mail order houses also advanced, after allowance for usual seasonal changes. In the first half of August department store sales increased by more than the usual seasonal amount. Railroad freight-car loadings increased more than seasonally in July and rose somewhat further in the first half of August. Shipments of miscel laneous merchandise, which include most manufactured products, and of for est products continued to rise. Grain shipments also increased but the rise was less than is usual at this time of year. Loadings of coal declined some what from the high level of other recent months. Commodity Prices — Wholesale and retail food prices advanced further in July and the early part of August, while prices of petroleum products on the East Coast were reduced, and those for most other consumer goods con tinued to show little change. In raw material markets price declines occurred for cotton, inedible fats and oils, and some scrap items, particularly non-fer rous metals and paper. Demand for materials used more exclusively for war products continued strong and prices of these materials were sustained at ceiling levels. Federal subsidies were arranged for additional commodities and Govern ment war risk rates on shipments of imported commodities were reduced. These actions were taken to bring about price reductions, as in the case of petroleum products on the East Coast, and to prevent further price increases, particularly for imported commodities. About 30 new maximum price sched ules were announced, chiefly for miscellaneous civilian products, and in some instances these schedules permitted substantial increases over ceilings set by the General Maximum Price Regulation. Bank Credit — Excess reserves of member banks declined by about 200 million dollars in the four weeks ended August 19. An increase of about 400 million dollars of currency in circulation during this period was paral leled by a corresponding amount of Reserve Bank purchases of Government securities. There was an increase of 300 million dollars in required reserves resulting from a growth in deposits at member banks. Excess reserves in New York and Chicago reached the lowest levels since the third quarter of 1937. Effective August 20 reserve requirements on demand deposits at cen tral reserve city banks were reduced from 26 per cent to 24 per cent by action of the Board of Governors of the Federal Reserve System. This had the effect of converting over 400 million dollars from required to excess reserves. Member banks in leading cities continued to increase their holdings of United States Government securities, particularly in the week ended August 19, in which delivery of the new 11J/-2 months’ % per cent certificates of indebtedness was made. Loans, which had declined during the second quar ter of the year, have recently shown little change. Adjusted demand deposits continued to increase at reporting banks, although purchases of Government securities, particularly the Zy2 per cent Treasury bonds of 1962-67, by investors other than banks temporarily reduced demand deposits of individuals and added to United States Government deposits.
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