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FEDERAL RESERVE BANK OF ST. LOUIS

MONTHLY REPORT ON
GENERAL BUSINESS AND AGRICULTURAL CONDITIONS
IN FEDERAL RESERVE DISTRICT No* 8
R E L E A S E D FO R P U B L IC A T IO N O N A N D A F T E R T H E
W IL L IA M
C H A IR M A N

M O R N IN G

O F S E P T E M B E R 2 5 , 1919

M C C . M A R T IN

OF T H E B O ARD A N D FEDERAL R E S E R V E A G E N T

Despite unsettled conditions, business activity in this district has continued during the past month and in many
lines has even increased, particularly in those supplying articles needed in building operations. However, the agitation
against the high cost of living, coupled with the unsettled attitude of labor, has tended to steady the market. A
tendency to await developments before making larger commitments for the future has been in evidence, and the
expansive impetus of the early summer months has been checked in a measure by a growing conservatism.
While there are portentous factors in the labor situation, the insistence by the workers that their demands for
shorter hours and higher wages be met seems to be giving way to a realization that their interests are bound up with
the interests o f the community as a whole, and that increased efficiency resulting in greater productivity is the only
way out of the circle of rising costs.
Wholesale prices of food commodities declined sharply during the first week of September, due largely to the
Government's public sale of foodstuffs, but as yet there have been little or no commensurate reductions in the prices
of the retailer to the consumer.
The general prosperity of the agricultural sections of the District and the high prices paid for cotton in the South
have kept indebtedness at a low level and have made collections exceptionally good in this District.
M AN U F A C T U R IN G .— The shortage of coal is hampering manufacturing in some lines, while othfcrs are handi­
capped by the scarcity of raw materials and the lack of skilled labor. These difficulties, however, indicate a large
demand for manufactured products, and are partly due to the exceptionally rapid increase of business within the
past few months. There is a general expectation of a large fall and winter trade.
Clothing manufacturers report increases in their business during August as high as 50% over the corresponding
month last year. One concern states that it made no sales during the past month because its season’s business was
sold up. There are complaints of difficulty in obtaining silks and woolens.
A company manufacturing chemicals says its business decreased 15% during August from the same month last
year and expects further declines from now until the end of the year.
The activity in the petroleum industry has created a large demand for oil well ropes and a large wire rope manu­
facturer says his business has increased 22% over August last year and that his factory is working nearly to capacity.
He says: “ W e cannot get cars promptly * * * many shipments take about twice as long to deliver as they
should.”
The demand for threshing machinery was beyond normal, due to the good crop conditions throughout the
District.
A large biscuit manufacturing concern says its August business increased 20% over July. It reports heavy buying
in the South. Basic prices, it says, decreased about 10%.
A 52% % increase over the same month last year and a 27% increase over July is reported by a manufacturer o f
clay products. He says that his orders on hand for future delivery are 120% larger that at this time last year.
Commenting on an increase of 73% in business over August last year, a large millinery manufacturer says:
“ However, the outlook is precarious, for when top-notch prices are reached the reaction is likely to sweep away the
profits already made or in the making.”
The lumber business is firm, and many saw mills are working day and night.



W HOLESALE A N D JOBBING.— It is noteworthy that dealers report good roads and automobiles, along with
high wages and general prosperity, as favorable factors in stimulating trade.
A prominent wholesale dry goods man says he can supply the demand for cotton goods but cannot meet onetwelfth the demand for silks, showing that the better classes of goods are still being called for. Increases over August
last year ranging from 17% to 30% and from 6 % to 30% over July are reported by dry goods houses throughout
the District.
Decreases from August last year ranging from 18H % to 40% are reported by some wholesale grocers. Other
concerns, however, report increases for the same period ranging up to 30% . The volume of business apparently has
fallen off from July, one concern reporting a decrease of 35%. Prospective buyers showed a tendency to wait for
lower prices.
Another large fur auction has just been held in St. Louis, now the largest primary fur market in the world.
Representatives of buyers in many countries bought pelts at an aggregate cost of $15,334,458, making this what is
believed to be the largest sale in the history of the fur trade.
A wholesale shoe dealer reports an increase of 25% over August last year and 50% over July. He complains
of the difficulty in obtaining goods and of slow railroad deliveries.
“ Steady, with some improvement” is the way a wholesale drug company characterizes the present situation.
It anticipates a good fall business.
R ETAIL.— Retail merchants have built up their stocks of goods to a better point than at this time last month.
Some concerns have placed larger orders under the belief that the factories will only be able to fill part of their demands.
While the retail trade continues to show material gains over last year, it has steadied from its previous rapid
growth and is on a par with or shows only slight increases over July.
Dealers anticipate a good fall and winter trade, but in some sections say the prevailing w
rarm weather has delayed
the urgency of the demand for seasonable merchandise,
AG RICULTURE.— Cotton is opening rapidly and picking has begun. The dry weather during the past week
has helped the crop in some sections of the District, but it is late and the amount of 1919 cotton ginned to September
1st is only about one-eighth of the amount for the same period last year. According to the Government report the
only States in which cotton shows an improvement in August over July are: Arkansas, 2% , Missouri 8 % and Ten­
nessee 2% , most of which region lies within this District. The Government estimate as of August 25th places the
average yield per acre at 159.8 pounds and the total production of the United States at 11,230,000 bales.
Plowing for winter wheat is well under way, but in some sections it has been delayed on account of dry weather.
The following table, compiled by the U. S. Bureau of Crop Estimates shows the acreage of the principal crops
in this District, and the estimated production, based on condition September 1st, 1919, as compared to the acreage
and production last year. These figures refer to the entire State of Arkansas and to the parts of Illinois, Indiana,
Kentucky, Mississippi, Missouri and Tennessee that are in the Eighth Federal Reserve District:
1
CROP.

Forecast
of Production,
Based on Condition
September 1, 1919.

Acreage,
1919.

I

Bushels.

Acres.

Acreage,
1918.

Production,
1918.

Acres.

Bushels.

Corn.................. .........................

15,366,000

377,951,000

16,726,000

372,977,000

Oats............................................

2,438,000

67,019,000

2,597,000

77,486,000

Tons.
Hay (all)...................................

5,626,000

Tons.

7,398,000

|
!

5,762,000

6,500,000

While the estimated yield of oats and hay have been slightly reduced since the July forecast, the estimated yield
of corn has been increased about 8,000,000 bushels.
According to government reports, the level of prices paid producers in the United States for the principal crops
decreased about 3.4% during August, while in the past ten years the price level decreased only 1.2% during August.
On September 1st the index figure of prices was 8.3% higher than a year ago.
LIVE STOCK.— The report of the St. Louis National Stock Yards for August, 1919, shows increases in all receipts
and shipments, except in the receipts of hogs, as compared with the corresponding month last year. The comparative
figures are as follows:
Cattle.
August.............................................................
Receipts...........................................................
Shipments.......................................................

1919
138,824
62,726

1918
135,550
42,550

Hogs.
1919
166,807
118,375

1918
193,006
65,122

Sheep.
1919
100,032
24,139

1918
70,603
14,190

Horses and Mules.
1919
22,487
21,968

1918
17,517
16,056

Lower prices will account in large measure for the decrease in the receipts of hogs.
The poor cotton crop dining the past years, as well as the increase in the price of live stock, has taught the Southern
farmers the value of diversifying their products. The raising of live stock is, therefore, rapidly coming to the front
as a factor in Southern farming. A new stock yards was opened recently at Memphis.



LABOR.— Unemployment is now a negligible factor in this District. However, there is some labor unrest,
as is evidenced by small strikes and threats to strike. The South, which suffered most from the shortage of farm labor,
is now better supplied with help, due largely to the fact that numbers of negroes who stopped off in the large cities
after demobilization have now gone back to the farms. It is not believed that the laborers returning from the harvest
fields and from the sugar beet fields will create any problem, since the demand for labor would seem to indicate their
rapid absorption into other lines. In many lines there is a marked shortage of skilled labor.
M any business men and labor leaders look forward hopefully to the coming capital-labor conference in October,
for a clarifying of the present unsettled conditions.
B U IL D IN G .— During August, as during the past few months, building activity continued far in cxcess of the
same period last year. Comparative figures for August arc as follows:

St. Louis............................................................................................................................
Louisville..... .....................................................................................................................
Memphis............................................................................................................................
Little Rock.......................................................................................................................

1919
August
Permits
Cost
819
$3,352,928
187
427,530
158
1,287,125
96
520,056

1918
Permits
Cost
421
$ 671,900
86
137,640
55
107,440
61
64,145

Real estate transactions indicate a disposition on the part of landlords to sell wherever possible rather than to
rent. There is still a dearth of residences, but the number of buildings now in process of construction should relieve
this condition considerably by next spring.
B A N K IN G .— There is a strong demand for money in this District at the present time, which bankers attribute
largely to the increased money value of transactions resulting from high prices, and also to the financial requirements
of crop movements and of the picking and ginning of cotton.
There were no marked changes in rates during the past month though there was a slightly upward tendency.
The high, low and customary discount and interest rates prevailing in St. Louis, Louisville, Memphis and Little Rock,
from August 16th to September 15th, as reported by banks located in those cities, were as follows:
St. Louis

H
Customers' prime commercial paper:

6
6

Prime commercial paper purchased in
open market:

L

Louisville

c

5M 5 «
5^2 5J4

o'A 5H o}4
Bankers' acceptances of 60 to 90 days:
Endorsed......................................... *.....
Loans secured by prime stock exchange
collateral or other current collateral:

Commodity paper secured by warehouse
receipts, etc....................................................
Loans secured by Liberty Bonds and

5J4
6
5M

5J
'2
5«

5
5

oy2 5 ^
5H
5H

6

5J* 6

6

4M

L

6
6

5^

Memphis

H

C
6
6

L

Little Rock

C

H

L

C

6
6

7
7

6
6

5^

5J* 5M 5H
5 ^ 5M 5 }/o
5
5
5

5H 6
6

S'A 5 «

6
6
6

5M oH
6

6

6

.....

5^2

6
6J*

oH 5V2

4 V 4H
8
4 y8 4Yie

6
6
6
6

H

5J*
6
6

5^

6
6
6
6

5
5
5
5

6
6
6
6

6
6

6
6

6
6

7
7
73^
8

6
6
6
6

6
6X
6a
7

6

5

6

6

6

6

7

6

7

6

5

53^

6

4% 5

7

5M

6

Commercial paper dealers report a strong demand for paper, with rates firm at 5J£ to 5}<2 for the best grades of paper.

In August, the Federal Reserve Bank of St. Louis discounted a total of $152,420,282.83 of paper for 185 different
member banks, which is an increase of $5,593,125.83 over the amount of paper discounted during July, and a decrease
of 5 in the number of banks accommodated. There was no change in the discount rates of the Federal Reserve Bank
during the past month. The rates in effect on September 18, 1919, were as follows:
M E M B E R B A N K S ’ C O LLA TE R A L N O TE S:

15 days
and less

Secured by Liberty Bonds or Treasury Certificates..........................................................
Secured by War Finance Corporation Bonds.......................................................................
Secured by Bills Receivable........................................................................................................

4%
5%
4%
4%
4%

61 to 90
days

4M %
5H %

4H%

*h ‘<
4J^%

4% %
m %

4%
5%
4%

R ED ISCO U N TS:
Secured by Liberty Bonds or Treasury Certificates..............................................
Secured by War Finance Corporation Bonds...........................................................
Commercial Paper..............................................................................................................
Agricultural or Livestock Paper....................................................................................
Trade Acceptances..............................................................................................................
Bankers’ Acceptances purchased at the market rate, subject to agreement.

16 to 60
days




91 days to
6 months

The condition of the banks in this District at the present time, and the changes during the past month, are re­
flected in the following comparative statement,; showing the principal resources and liabilities of member banks in
St. Louis, Louisville, Memphis, Little Rock and Evansville:
Sept. 5, 1919
35

Number of Banks reporting..................................................
United States
Other United
United States
United States

Aug. 8, 1919
35

5 17,154,000
15.713.000
10.324.000
40.856.000
84.047.000

Bonds to secure circulation......................
States Bonds, including Liberty Bonds..
Victory Notes................................................
Certificates of Indebtedness......................

Total United States securities owned............................................

$ 17,155,000
17.184.000
12.143.000
35.199.000
81.681.000

27.753.000
135.568.000 1
276.520.000 /

Loans secured by - United States Bonds and Certificates.................
Loans secured by stocks and bonds, other than U. S. securities..
All other loans and investments..............................................................

523.888.000

Total loans and investments..

26.366.000
*410,288,000
518.335.000

43.005.000
42.118.00
Reserve with the Federal Reserve Bank........................
10.195.000
9,656,000
Cash in vault.............................................................................
326.599.000
Net Demand deposits on which reserve is computed..
320.753.000
100.895.000
99.780.000
Time deposits............................................................................
23.310.000
23.771.000
Government deposits..............................................................
^Includes loans secured by stocks and bonds, other than U. S. securities, which are now reported separately.

The volume of banking business transacted in this District during the past month is indicated by the following
comparative table, compiled from information received from the Clearing Houses in the cities shown:
Debits to Individual Accounts, week ending:

Aug. 13

St. Louis................................................................................................. $150,219,000
Louisville................................................................................................
32,497,000
Memphis................................................................................................
23,900,000
Little Rock...........................................................................................
7,786,000
Evansville..................................... .........................................................
5,080,000

Aug. 20

Aug. 27

Sept. 3

$156,707,000
35.702.000
25.463.000
6.580.000
3.889.000

$124,052,000
29.464.000
21.484.000
0,182,000
4,383,000

$114,866,000
25.968.000
23.746.000
10.019.000
4,256,000

The resources and liabilities of the Federal Reserve Bank of St. Louis on September 12, 1.919, as compared to
a month ago, and a year ago, are shown in the following statement :
RESOURCES:

Aug. 8, 1919

Gold coin and certificates................................................................................................... $ 2,760,000
Gold settlement fund— F. R. Board...............................................................................
24,175,000

Sept. 12, 1919
$

2,524,000
11.979.000

Sept, 13, 1918
5

1,411,000
21.694.000

Total gold held by Bank............................................................................................
26,935,000
Gold with foreign agencies............................................................................................................................
Gold with Federal Reserve Agent...................................................................................
51,360,000
Gold Redemption Fund.......................................................................................................
6,474,000

54^721*000
5.743.000

23.105.000
233.000
56.668.000
2.588.000

Total gold reserve.........................................................................................................
Legal tender notes, silver, etc...........................................................................................

84,769,000
4,536,000

74.967.000
5.272.000

82.594.000
471.000

89,305,000

80.239.000

83.065.000

59,490,000
10,271,000
9,612,000

60.400.000
14,230,000*
14.918.000

31.704.000
32.115.000
1.600.000

Total reserves..
Bills discounted— Secured by Government war obligations....................................
Bills discounted— All other.................................................................................................
Bills bought in open market....................................................................................... :.....

14.503.000

Total bills on hand...................
U. S. Government Bonds................
U. S. Certificates of Indebtedness.

.......................
.......................
.......................

79,373,000
1,153,000
17,068,000

89.548.000
1.153.000
17.068.000

65.419.000
1,153,000
321.000

Total earning assets..................

.......................

97,594,000

107^769,000

66.893.000

.......................
.......................
.......................
.......................

691,000
51,784,000
658,000
510,000

691.000
57.559.000
660.000
563,000

'''*1,318,*0(K
>

TO TAL RESOU RCES............................................................................................... $240,542,000

$247,481,000

8189,613,000

$

$

Bank premises.........................................................................................
Uncollected items and other deductions from gross deposits..
5 % redemption fund against F. R. Bank notes.........................
All other resources................................................................................

LIA B IL IT IE S:
Capital paid in........................................................................................................................ $ 3,945,000
Surplus..................................................................... .................................................................
2,589,000
Government deposits............................................................................ ................................
5,124,000
Due to members— Reserve Account...............................................................................
62,752,000
Deferred availability items.................................................................................................
38,988,000
Other credits............................................................................................................................
4,143,000
Total gross deposits......................................................................................................
F. R. Notes in actual circulation.....................................................................................
F. R. Bank notes in circulation— net liability.............................................................
All other liabilities.................................................................................................................

4,005,000
2.589.000
2.542.000
62.441.000
46.089.000
4.512.000

38,337,000

3,731,000
9^696*000
53.537.000
26.989.000
651,000

111,007,000
106,004,000
16,298,000
699,000

115.584.000
108.039.000
16.278.000
986,000

90.873.000
92.866.000
192,000
1,951,000

TOTAL L IA B IL IT IE S.............................................................................................. $240,542,000

$247,481,000

$189,613,000