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FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REVIEW OF BUSINESS CONDITIONS IN EIGHTH DISTRICT Released for Publication On and After the Afternoon of September 29, 1928 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent O N S ID E R A B L E irregularity marked the course of trade and industry in this district during the past thirty days. This was true of both the various lines and different localities. Relatively a more favorable showing was made by production than distribution of commodities, and merchandising results in goods for ordinary con sumption were less favorable than in those of the heavier and more permanent sort. W hile purchas ing power of the public continues at the high levels of recent months, there is a disposition to proceed with caution and conservativeness on the part of both merchants and ultimate consumers. In a m ajority of lines investigated, August sales fell be low those of the corresponding month last year, but on the other hand, August totals were for the most part larger than those of July this year. The latter fact, however, was due in a number of important instances to purely seasonal influences, and in no case was the increase in the monthly comparison greater than the average of the past several seasons. In the immediate past some improvement has devel oped in trade, due to more seasonable weather, and sentiment in the business community relative to late fall and winter trade is in the main optimistic. Industrial reports dealing with August activi ties reflect less than the usual curtailment. This is true particularly of iron and steel, building materials, packing and chemicals. W hile the record of August building permits and construction con tracts let showed sharp declines from the preceding month, actual building activities continued on a large scale, and work in progress is sufficient to maintain a similar, or only slightly reduced rate, until cold weather interferes with outdoor opera tions. Distribution of automobiles in the district recorded a notable gain over a year ago. Debits to checking accounts in August were 3.2 per cent less than in July, but 5.4 per cent greater than the August, 1927, total. Savings accounts in August gained 0.2 per cent and 6.1 per cent, respectively, over a month and a year earlier. Department store C sales in the chief cities of the district in August were 9.1 per cent less than for the same month last year. Sales during August by wholesalers of dry goods, clothing, groceries, shoes, stoves, men’s hats, and furniture fell below those of the corresponding period in 1927. Liabilities involved in commercial failures in the district in August were 113.5 per cent larger than in July, and 519.5 per cent in excess of the August, 1927, total. The trend of employment was in the direction of improvement over the preceding thirty days, with conditions as a whole somewhat more favorable than during the corresponding period last year. In the building trades skilled artisans were generally well employed, and unskilled labor was in good de mand, especially in highway and municipal im provement work, and on farms. A number of the major industries added to their working forces, among them automobile assembling plants, packing houses, quarries and cement plants. Railroads also augmented their forces, and there were the usual seasonal gains in flour mills, canning establishments, tobacco warehouses, etc. A surplus of clerical help exists in the principal cities. Crops as a whole in the district underwent moderate improvement from July to August, with specific gains in yields indicated in corn, tobacco, cotton and some minor productions. A s an offset to this favorable develop ment, however, cereal prices continued at the low levels reached in July and early August, and cotton declined to a new low price for the year. Conditions in the bituminous coal trade con tinue com plex and difficult, but the past few weeks have developed rather general improvement. This has been due to greater industrial stability, reduced stocks in the hands of all classes of consumers, and the influence exerted by nearer approach to cold weather. A s compared with the preceding thirty days, prices averaged slightly higher, being affected by the customary September 1 advance on domestic grades. Taken as a whole, production in the district gained in fully the seasonal amount, and in the Indiana and Illinois fields, there was a moderate in crease in the number o f miners working, and a good gain in working time of those previously engaged. Mine operators and distributors, however, reported a general disposition on the part of consumers to take only what was needed for immediate use, and to postpone contracting on a large scale for fall and winter supplies. This attitude was attributed large ly to uncertainty as to wage scales in the union territory, buyers hoping for lower prices as a result of a new agreement. Producers, however, were for the most part unwilling to make any price conces sions. A s a consequence of hand-to-mouth buying during many weeks, reserves of industrial consum ers are low, and in many urban centers, notably St. Louis, domestic deliveries at the middle of Septem ber were substantially smaller than at the same time last year. Production of bituminous coal for the country as a w hole for the present calendar year to September 8, approximately 212 w orking days, amounted to 321,699,000 tons, against 363,294,000 tons for the corresponding period in 1927, and 367,503,000 tons in 1926. A ccording to officials of railroads operating in this district, the movement of freight slightly ex ceeded that of the same periods a year and tw o years ago, and the volume continues heavy. Miscellane ous products and grain showed good gains, which more than offset decreases in coal, merchandise and several minor classifications. Except in relatively few instances preparations made by the carriers for handling the grain movement have been adequate to all requirements. For the country as a whole, loadings of revenue freight during the first 35 weeks this year, or to September 1, totaled 33,747,793 cars, against 34,802,007 cars for the corresponding period in 1927, and 35,012,916 cars in 1926. The St. Louis Terminal Railway Association, which handles inter changes for 28 connecting lines, interchanged 240,460 loads in August, against 236,289 loads in July and 221,065 loads in August, 1927. During the first nine days of September the interchange amounted to 67,723 loads, which compares with 69,668 loads during the corresponding period in August, and 62,121 loads during the first nine days of September, 1927. Passenger traffic o f the reporting roads de creased 9 per cent in August as compared with the same month in 1927. Estimated tonnage of the Federal Barge Line between St. Louis and New Orleans in A ugust was 112,500 tons, against 112,284 tons in July and 123,122 tons in August, 1927. Considerable irregularity in collections was noted, both in reference to localities and the several lines. In the main September 1 settlements with wholesalers in the large centers were up to expecta tions, but more backward spots were in evidence than during the tw o preceding months. Answers to questionnaires addressed to leading interests in the several lines scattered through the district showed the follow ing results: Excellent Good Fair Poor August, 1928............... 1.4% 23.6% 58.3% 167% July, 1928..................... 1.3 25.0 57.7 16.0 28.8 54.8 13.7 August, 1927............... 2.7 Commercial failures in the Eighth Federal R e serve District during August, according to Dun's, numbered 99, involving liabilities of $4,765,633, against 98 defaults in July with liabilities of $2,228,466, and 103 failures for $750,216 in August, 1927. The per capita circulation of the United States on August 31, 1928, was $40.52, against $39.67 on July 31, 1928, and $41.42 on August 31, 1927. M AN U FA CTU R IN G AN D W H O L E S A L E Automobiles — Combined passenger car and truck production in the United States in August was the largest for any single month on record, 458,369, against 390,445 in July and 308,807 in August, 1927. Distribution of automobiles in this district dur ing August showed substantial gains over both the preceding month and the corresponding period in 1927. This was the fifth consecutive month in which increases were shown over the same months last year. W hile improvement was general through all classes of makes, most marked betterment was noted in sales of companies which have recently brought out new models and body designs. In the comparison with last year, a measurable part of the gain was accounted for by the heavily increased sales of one manufacturer of cheap-priced cars whose production schedule was sharply curtailed during the latter part of 1927. Results obtained by dealers in the country were more satisfactory than earlier in the year. Completion of the winter wheat harvest, and the marketing of this and other crops supplies farmers with funds for financing their auto m otive requirements. Sales of distributors in the large cities were well balanced, increases being reported quite general am ong all classes of makes. A ccessory business was mainly on a satisfactory basis, showing gains over the preceding thirty days, also over the same time last year. Sales of parts and accessories were stimulated by special cam paigns, also by needs of car owners returning from vacation tours. Stocks of new cars in dealers' hands continue of moderate size, and in a number of in stances requests for expedited deliveries from fac tories were necessary in order to make deliveries to customers. August sales of new passenger cars by 320 dealers scattered through the district were 28.6 per cent larger than in July, and 39.8 per cent greater than in August, 1927. Sales of parts and accessories in A ugust were 3.8 per cent and 8.9 per cent larger, respectively, than a month and a year earlier. Stocks of new passenger cars in dealers’ hands decreased 3.2 per cent between August 1 and September 1, and on the latter date were 0.7 per cent larger than at the same time in 1927. The used car situation was reported as being mainly satisfac tory, though stocks showed a sharp gain as con trasted with the preceding month, due to heavy trading in on purchases of new machines. On September 1, used stocks were 14.5 per cent larger than on August 1, and 8.3 per cent in excess of the total on September 1, 1927. The ratio of deferred payment sales to total sales of dealers reporting on that item was 53.9 per cent in August, against 48.9 per cent in July, and 53.6 per cent in August, 1927. Boots and Shoes — A ugust sales of the 5 re porting interests were 5.5 per cent smaller than for the same month in 1927, and 2.3 per cent under the July total this year. Stocks on September 1 were 5.9 per cent smaller than a month earlier, and 37.9 per cent larger than on September 1, 1927. D e creases in both the month-to-month and yearly comparisons, were quite general though as con trasted with the preceding month, a relatively better showing was made by children’s and misses’ shoes than was the case with other descriptions. Some slow ing down in demand for men’s shoes and heavy work lines was noted. W hile there were no changes in prices on finished goods w orthy of mention, the trend continues upward. Factory operation was at from 90 to 98 per cent of capacity. Clothing — W eather has been unfavorable for ordering of apparel for fall wear, and sales have been disappointing. The high temperatures, ex tending far into September, however, resulted in an unusually good clearance of light weight clothing, both at wholesale and retail. Ordering of men’s suits and overcoats for late fall and winter has been below expectations, manufacturers and jobbers re porting a disposition on the part of retailers to purchase closely. In the immediate past there has been some improvement in the call for w om en’s woolen and worsted suits and cloaks. Children’s school clothing is reported m oving in good volume. Demand for work clothing continues quiet. Sales of the reporting clothiers in A ugust were 10.6 per cent smaller than for the same month in 1927, and 12.1 per cent below the July total this year. Drugs and Chemicals — August sales of the six reporting interests were 10.8 per cent larger than for the same month in 1927, and 14.3 per cent in excess of the July total this year. Stocks on September 1 were 4.4 per cent larger than a year earlier, and showed no change from those on August 1 this year. Jobbers report business satisfactory in virtually all lines, but with seasonal merchandise particularly active. Sales of heavy chemicals to the general manufacturing trade, especially to the metals indus tries, were substantially larger than last year. Dry Goods — There was the usual heavy sea sonal gain in sales from July to August, the total of the 8 reporting interests for the latter month being 62.6 per cent larger than the former. A s compared with the same month in 1927, however, August sales showed a decrease of 15.1 per cent. Stocks on September 1 were smaller by 4.2 per cent and 12.0 per cent, respectively, than a year and thirty days earlier. Retail merchants visiting St. Louis and other jobbing centers in August and early Septem ber were more numerous than a year ago, but they were ordering with considerable conservativeness. The decline in raw cotton has had a tendency to hold down buying of fabrics based on that staple. The movement of hosiery, ready-to-wear garments and outings has been satisfactory, but staple lines are relatively quiet. Electrical Supplies — August sales of the five reporting firms were 20.7 per cent larger than for the corresponding month in 1927, and 26.9 per cent smaller than the July total this year. Stocks on September 1 were 19.5 per cent smaller than thirty days earlier, and 28.5 per cent larger than on Sep tember 1, 1927. In the yearly sales comparison gains were fairly well distributed through the line, but were most marked in radio material, line and pole hardware and building equipment. Irregular ity was noted in the trade in household appliances. Prices showed little variation as compared with the preceding thirty days. Flour — Production at the 12 leading mills of the district in August totaled 314,685 barrels, which compares with 351,234 barrels in July and 385,028 barrels in August, 1927. Stocks of flour in St. Louis on September 1 were 11.8 per cent smaller than on August 1 and 12.8 per cent less than on September 1, 1927. Business was fairly active, but of a routine sort, and lacking in features of interest or im por tance. The action of the cash wheat market had a tendency to hold down quantity buying, sales being chiefly in small lots for prompt shipments to the domestic trade. Export demand was quiet, com pe tition of the large Canadian wheat crop being keenly felt. Shipping directions were satisfactory, and mills were generously grinding on old orders. Prices were lower on both hard and soft flours. Mill operation was at 50 to 55 per cent of capacity. Furniture — August sales of the 15 reporting interests fell 0.6 per cent below those of the same month in 1927, but were 10.5 per cent larger than the July total this year. Stocks on September 1 were 22.0 per cent and 12.2 per cent larger, respec tively, than a year and thirty days earlier. Retail stocks are universally light, and with better demand in both city and country, retailers are more dis posed to replenish and fill out assortments. Com petition in certain lines is reported very keen, and some cutting under list prices was noted. Groceries — August sales of the 14 reporting interests were 5.6 per cent less than for the same month in 1927, and 3.7 per cent larger than the July total this year. Stocks on September 1 were 7.4 per cent greater than on the same date in 1927, but 1.3 per cent under those on August 1 this year. A m ong causes for the decrease in sales in the yearly com parison, competition of chain stores is mentioned as a factor of grow ing importance. Generally through the district, retailers are carrying small stocks and purchasing chiefly for current requirements. A d vance ordering of canned goods, however, is re ported about equal to the volume at this time last year. The decline in wheat and cotton prices has adversely affected sales in sections where these are the chief crops. Abundance of fresh fruits and vege tables held down buying of canned and preserved goods. Sales of sugar and preserving equipment were larger than a year ago. Hardware— Continued improvement was noted in this classification, with business reported good throughout the line. Seasonal merchandise is m oving in good volume, and shipping directions on goods ordered for consumption in the late fall and winter are being received in volume earlier than usual. Commodities for use in the rural areas, notably hand implements, wire fencing, roofing, and repair materials of all sorts, are in strong demand. August sales of the 12 reporting firms were 3.2 per cent larger than for the same month in 1927, and 12.7 per cent larger than the July total this year. Stocks on September 1 were 6.9 per cent smaller than thirty days earlier, and 1.4 per cent larger than on Sep tember 1, 1927. Iron and Steel Products — A s was the case dur ing the preceding thirty days, demand for iron and steel goods was unevenly distributed, but both pro duction and distribution were above the average for this particular period during the past several years. Considerably less than the usual seasonal letup in purchasing of raw and finished materials was in evidence, and in the case of raw materials, ship ments and specifications made a particularly favor able showing. W hile there is still a disposition to purchase chiefly for immediate requirements, there was a fair volume of contracting for fourth quarter needs. Generally stocks of raw materials are of moderate proportions, and mills and foundries in many instances were bringing up their reserves in anticipation of expected heavy call for their pro ducts during the balance of the year. The outlet through the building industry continued broad, with call for materials for highway construction and river and municipal improvement work especially good. Some improvement was noted in the demand for oil country goods, notably for metal pipe and tank plates. Purchasing by the railroads is still confined to miscellaneous goods for current require ments, but the volume taken was larger than here tofore, and included a wider variety of items. Autom obile materials remain in heavy demand, and tonnage absorbed by the general manufacturing trade was on the whole well up to expectations. The leading manufacturer of sheets and plates was operating at, or close to capacity, and reported accumulated business to maintain this pace for the next sixty days. Shipments and new ordering of tin plate reached its peak with the heighth of the canning season, and the total tonnage supplied by manufacturers and distributors in this area was larger than a year ago. Implement makers report continued heavy demand for their products, with the tractor division particularly active. Manufac turers of stoves and heating apparatus increased their outputs, and report ordering for late fall and winter satisfactory. The general trend of prices was higher, with specific advances recorded on certain important commodities. Sheets for fourth quarter delivery were advanced slightly, and quotations on pig iron and scrap were higher than thirty days earlier. For the country as a whole, production of pig iron in August totaled 3,136,008 tons, which compares with 3,072,711 tons in July, and 2,950,674 tons in August, 1927. Steel ingot production in the United States in August aggregated 4,178,481 tons, against 3,811,573 tons in July, and 3,498,549 tons in August, 1927. CONSUM PTION OF E L E C TR IC ITY Public utilities companies in the five largest cities of the district reported consumption of electric current by selected industrial customers in August as being 6.1 per cent greater than in July, and 14.4 per cent larger than in August, 1927. Detailed fig ures fo llo w : N o. of A u g. Custom1928 ers * K .W .H . Evansville ... 40 1,500 Little Rock.. 35 2,361 Louisville .... 82 6,236 Memphis ..... 31 1,055 St. Louis...... 126 21,844 July 1928 * K .W .H . 1,445 2,016 5,471 1,227 20,928 Totals.........314 32,996 31,087 * In thousands (000 om itted). A u g. 1928 Aug. A u g. 1928 comp, to 1927 comp, to July, 1928 * K .W . H . A u g. 1927 + 3 .8 % 1,260 + 1 9 .0 % + 1 7 .1 1,997 + 1 8 .2 + 1 3 .9 6,020 + 3.6 — 14.1 1,034 + 2.0 + 4.4 18,534 + 1 7 .9 + 6.1 28,845 + 1 4 .4 R E T A IL T R A D E T he condition of retail trade is reflected in the follow ing comparative statement showing activity at department stores in leading cities of the district: N et sales com parison Stocks on hand A u g. 19288 months ending A u g. 31, 1928 com p, to A ug. 31, 1928 to com p, to A u g. 1927 same period 1927 A ug. 31, 1927 Evansville .......— 10.0% + 0.5% ' — 1 4 .4 ^ ' Little R o ck ......— 2.1 + 1.6 + 1 0 .1 Louisville ........— 14.0 — 5.0 + 1.7 + 4.3 — 10.1 M em phis ..........— 9.4 Q u in cy ............ — 4.0 + 1 2 .0 — 5.8 St. L ou is......... — 9.1 + 1.1 — 5.8 Springfield M o.— 5.8 — 0.8 — 7.7 8th D istrict..... — 9.1 + 1.1 — 4.6 N et sales com parison A ug. 1928 com p, to A u g. 1927 July, 1928 M en ’s furnishings............ + 4.8 % — 9.2% B oots and shoes................— 4.8 — 21.8 Stock turnover Jan. 1, to A u g. 31, 1928 1927 1.55 1.51 1.45 1.55 2.00 2.11 1.98 1.78 1.66 1.40 2.33 2.13 1.04 1.01 2.10 1.98 Stocks on hand A u g . 192$ comp, to A u g . 1927 July, 1928 — 10.1 % + ‘ + 2 .2 % 0.1 + 1 4 .3 Department Store Sales by Departments — As reported by the principal department stores in Lit tle Rock, Louisville, Memphis, and St. Louis. Percentage increase or decrease A u g ., 1928 compared to A u g ., 1927 N e t sales Stocks on hand for month at end of month Piece goods.................................................— 1 5 .7 % — 7 .6 % Ready-to-wear accessories.................. — 7.2 — 8.7 W o m en and misses’ ready-to-wear.. + 3.7 — 4.4 M e n ’s and boys’ wear............................+ 11.2 — 9.3 H om e furnishings................................... — 17.7 — 2.8 BU ILD IN G In point of dollar value, building permits issued for new construction in the five largest cities of the district in A ugust showed a decrease of 22.1 per cent under the preceding month, and of 15.8 per cent under August, 1927. A ccording to statistics com piled by the F. W . D odge Corporation, building contracts let in the Eighth Federal Reserve District in August amounted to $40,706,254, which compares with $50,557,263, in July and $34,133,834 in August. 1927. The average of building costs remained un changed, for while since August 1 there has o c curred a slight advance in steel, other building com modities have softened a little or remained constant. There was no change in labor rates. Production of Portland cement for the country as a whole in A u gust, totaled 18,730,000 barrels, against 17,445,000 barrels in July, and 18,315,000 barrels in August, 1927. Building figures for A ugust follow : N ew Construction Evansville .. Little Rock Louisville .. M em phis ... St. Louis.... Permits 1928 1927 539 479 44 27 205 140 352 354 679 800 A u g . totals 1,819 1,800 July totals 1,593 1,547 June totals 1,777 1,800 * I n thousands of dollars *C ost 1928 $1,455 184 1,731 1,077 2,619 1927 $ 254 108 1,738 686 5,595 $7,066 $8,381 9,163 8,118 7,692 6,616 (000 om itted). Repairs, etc. Permits *Cost 1928 1927 1928 1927 89 129 395 58 105 108 84 74 491 737 711 832 862 796 903 66 $ 20 54 225 107 316 $ 45 73 269 38 338 722 650 853 $763 871 745 A G RICU LTU R E W eather conditions during the past thirty days were in the main favorable for agriculture, and fair improvement took place in crops as a whole. Low temperatures during the first week of September checked development of corn and some other pro ducts, but this was follow ed by a spell of warm, clear weather, ideal for maturing late crops. A ccord ing to the U. S. Department of Agriculture, the composite condition of all crops in states lying partly or entirely within the Eighth Federal Reserve District was 98.8 per cent on September 1. This indicates that crops were 1.2 per cent below their 10 year average condition on that date. The com posite condition was 2.6 per cent above that on August 1, and compares with 88.9 per cent on Sep tember 1, 1927, and 117.1 per cent on September 1, 1926. Generally through the district excellent pro gress was made in fall plow ing and routine farm work. In some sections, however, lack of rain has delayed planting of grain. Winter Wheat — No change of moment took place in the estimate of winter wheat production in this district since August 1. Based on the Sep tember 1 condition, the crop is estimated at 29,621,000 bushels, which compares with 41,701,000 bush els harvested in 1927. Corn — Prospects for this crop improved dur ing August in this district, and based on the Sep tember 1 condition, the estimated production is 386.250.000 bushels, a gain of 5,290,000 bushels over the August 1 estimate, and comparing with 342,426,000 bushels harvested in 1927. For the country as a whole a crop of 2,931,000,000 bushels was indi cated by the September 1 condition. This was a decresae of 3 per cent from the indication a month earlier, and compares with 2,773,708,000 bushels harvested in 1927, and a 5-year average of 2,775,634,000 bushels. In this district the principal im prove ment took place in Missouri and Illinois, with In diana, Kentucky, Tennessee and Arkansas showing smaller prospective yields on September 1 than a month earlier. Practically the entire crop has passed danger from frost. There was less than the usual amount of firing, and quality of the crop is mainly high. Fruits and Vegetables — Conditions were fav orable for late fruits and vegetables and prospects are for heavy yields and generally high quality through the district. In some sections the output of apples, peaches and grapes promises to be the largest on record. Harvesting of apples and peaches progressed well, and heavy shipments were the rule, with mainly auspicious marketing conditions. Improvement took place in both white and sweet potatoe prospects, but prices of white potatoes con tinued low. Based on the September 1 condition, the indicated yield of apples in states entirely or partly within the Eighth Federal Reserve District is 24,532,000 bushels, of which 2,631,000 barrels represent commercial crop. This compares with 10.842.000 bushels in 1927, of which 1,398,000 barrels were commercial crop, and a 5-year average of 29.154.000 bushels gross, and 3,123,000 barrels com mercial crop. The peach crop in these states, based on the September 1 condition, is estimated at 9,322,000 bushels, against 4,429,000 bushels in 1927, and a 5-year average of 8,163,000 bushels. Due to a favorable season and many new vineyards coming into bearing, the grape crop will be by far the largest ever produced, 47,320 tons, against 17,827 tons in 1927, and a 5-year average of 24,107 tons. In the district proper the yield of white potatoes is esti mated at 20,071,000 bushels, an increase of 742,000 bushels over the A ugust 1 forecast, and comparing with 14,061,000 bushels produced in 1927. The sweet potatoe crop in states partly or entirely within the district is estimated at 18,514,000 bushels, against 20.026.000 bushels in 1927, and a 5-year average of 18.611.000 bushels. Live Stock — Improvement took place in the condition of pastures and generally throughout the district live stock is doing well. There is an abund ance of feed and fodder, mainly of excellent quality. W hile the estimated yield of tame hay in the district is below the record crop of 1927, it is still large, the total being placed at 6,883,000 tons, against 9,038,000 tons harvested a year ago. Prices of farm animals continued at the high levels of the past several months and marketing was on an extensive scale. H ogs were selling at the highest levels since Decem ber, 1926, while cattle prices were the highest since September, 1920. Receipts and shipments at St. Louis, as reported by the National Stock Yards, were as follow s: ______R eceipts_________ A u g. July A ug. 1928 1928 1927 Cattle and Calves......151,092 119,227 180,017 H ogs ............................272,779 257,654 313,683 H orses and Mules.... 2.950 1,811 3,347 Sheep ............................ 58,960 80,186 74,063 Shipments________ A ug. July A ug. 1928 1928 1927 113,898 79,900 115,656 226,932 195,510 231,366 2,033 2,336 2,617 14,906 21,132 18,942 Cotton — Based on the September 1 condition, the U. S. Department of Agriculture estimates the 1928 cotton crop in this district at 2,734,000 bales, an increase of 331,000 bales over the August 1 esti mate, and com paring with a harvested crop of 2.319.000 bales in 1927 and 3,349,000 bales in 1926. For the country as a whole the forecast is for 14.439.000 bales, against 12,599,000 bales in 1927. There were increasing reports of weevils and other insect pests, also of too much rain in Arkansas and elsewhere in late August and early September, with some damage through rotting of bolls. Picking is quite general, and cotton is m oving in increasing volume to the gins and compresses. Except in iso lated cases, the supply of farm labor is sufficient to handle the crop. The first bale of cotton was re ceived at Little R ock on August 17, as compared with A ugust 9 last year. This fairly indicates the slight lateness of the crop. Prices declined rather sharply during the past thirty days, the middling grade at St. Louis selling at 1 6 ^ c per pound on September 15 as contrasted with 19c per pound on August 16. Stocks of cotton in Arkansas warehouses on September 14 totaled 56,195 bales, as against 83,269 bales on the corresponding date last year. Rice — The combined production of rice in Arkansas and Missouri is estimated at 8,075,000 bushels, against 7,513,000 bushels in 1927 and a 5-year average of 7,857,000 bushels. In Missouri, the crop deteriorated during the past thirty days, but improvement took place in the more important state of Arkansas. Quality of the crop is apparently good, and due to the nominal expense of irrigation, production expense was smaller than in some pre ceding years. Harvesting has begun in some coun ties, and will be general by the end of this month. Initial prices for new rice are slightly lower than last year. Tobacco — The yield of tobacco in this district will be considerably larger than a year ago, due to somewhat larger acreage and more favorable season. On the September 1 condition, the Department of Agriculture estimates the crop at 254,375,000 pounds, against 166,876,000 pounds harvested in 1927. Cutting has been pushed forward rapidly, and some premature cutting was necessitated to prevent rust development. Recent weather has been favorable for both cutting and housing the leaf, and curing in barns has proceeded satisfactorily. Late tobacco has made fairly good growth in the burley district, but moisture was inadequate in the dark tobacco areas. Commodity Prices — Range of prices in the St. Louis market between August 15, 1928 and Septem ber 15, 1928, with closing quotations on the latter date and on September 15, 1927: ______ C lose___ W heat H igh L ow Sept. 15, 1928 Sept. 15, 1927 Sept....................... per b u .$ 1 .1 2 ^ $1.06*6 $1.09 $1.28 D e c ......................... “ 1.17 y2 1.11 1.13J4 1 .2 8 # M ay ..................... “ 1.21 1.20 1.21 ....... N o. 2 red winter “ 1.49 1.36 $1.40 @ 1.45 $1.41 @ 1.43 N o. 2 hard.......... “ 1.14 1.07 1.13*4 @ 1.14 1.29 Corn Sept........................ “ 1.03J4 *,8654 1-0354 -9354 D e c ......................... “ .77 .7154 -76% .96*6 N o. 2 m ixed........ “ 1.09 .92 1.08 @ 1.09 .94 N o. 2 white........ “ 1.09 .9354 1.0854 @ 1.09 .94 @ .95 Oats N o. 2 w hite.......... “ .45.36 .4 4 5 4® .45 .50 @ .50*4 Flour Soft patent........per bbl. 7.00 6.50 6.50 @ 7.00 7.00 @ 7.25 Spring patent..... “ 6.25 5.80 5.90 @ 6.10 6.75 @ 7.15 M iddling cotton .....per lb. .19 .16 54 .165^ .2054 H ogs on h o o f.......per cw t. 13.35 10.60 11.7513.35 10.25 12.00 F IN A N C IA L The financial and banking situation in this dis trict during the past thirty days has been marked by further expansion in demand for credit from com mercial, industrial and agricultural sources, and an additional slight advance in interest rates. In the principal industrial centers the period of accumula- lation of merchandise for fall and winter distribution was reflected in heavier borrow ing at the com m er cial banks, and an increase in discounting by mem ber banks with the Federal Reserve Bank. Require ments for financing the crop movements have stead ily increased, reaching the highest point of the year to date in early September. Demands in the South have been particularly strong, mainly for handling the cotton and tobacco crops. W hile cotton has started to move, the volume thus far has not been sufficient to result in perceptible liquidation. In the tobacco areas no permanent liquidation of conse quence is anticipated prior to the opening of the principal tobacco markets. Marketing of the winter wheat crop has resulted in a fair volum e of liquidation in the typical wheat areas. Farmers have reduced their indebtedness with merchants, w ho in turn have reduced their commitments at the banks. Country banks, h ow ever, are still in debt to their city correspondents, and grain elevator and flour milling interests have not measurably reduced their commitments as con trasted with the preceding thirty days. W hile mar keting of live stock has been on an extensive scale, farmers having taken advantage of recent high prices, demand for conditioning farm animals for market continues active. Deposits of reporting member banks, which have declined irregularly since the middle of Janu ary, continued their downward course, reaching a new low point for the year in late August. Since that time, however, a moderate recovery has taken place. Loans of these banks increased further, and at the middle of September were at the highest point since February. Loans based on securities decreased in late A ugust and early September to about the level prevailing in early June. Borrowing by member banks from this institution reached a new high point for the year in the first week of September. The note issue of this bank remained practically constant, and there was no variation in the volum e of its purchased bills. In all sections of the district the trend of inter est rates was upward. A t the St. Louis banks, cur rent rates were as fo llo w s : Prime commercial paper, 5y4 to 5$4- per cent; collateral loans, 5% to 6 per cent; interbank loans, 5% to 6 per cent; loans se cured by warehouse receipts 5y 2 to 6 per cent and cattle loans Sy2 to 6 per cent. 0.6 per cent between August 15 and September 19 and on the latter date were 1.8 per cent smaller than on September 21, 1927. Composite statement fo l lows : *Sept. 19, *A ug. 15, _ 1928 1928 t29 N um ber of banks reporting....................... Loans and discounts (incl. rediscounts) Secured by U . S. Govt, obligations..........$ 3,519 ...$ 3,519 Secured by other stocks and bonds.......... 213,412 ... A ll other loans and discounts....................... 301,580 ... $ 4,345 218,496 285,250 Sept. 21, 1927 31 $ 4,551 205,771 298,393 T otal loans and discounts.................................. $518,511 ,..$518,511 Investments U. S. Government securities....................... 76,446 Other securities.................................................. 132,050 $508,091 $508,715 73,278 135,400 73,916 124,430 Total investments.................................................. $208,496 ... Reserve balance with F . R. bank..................... 45,530 45,530 Cash in vault.......................................................... 7,110 ... 7,110 Deposits N et demand deposits......................................... 379,910 .. 379,910 T im e deposits...................................................... 239,367 ... 239,367 Government deposits......................................... 7,238 .. 7,238 $208,678 44,788 6,658 $198,346 46,740 7,687 377,972 240,484 4,190 394,305 235,618 8,277 T otal deposits...........................................................$626,515 $622,646 $638,200 ,..$626,515 Bills payable and rediscounts with Federal Reserve Bank, Secured by U . S. Govt, obligations........ 15,706 11,252 11,348 26,240 A ll others.......................................................... 25,057 8,247 * In thousands (000 om itted ), tDecrease due to consolidation. T hese banks are located in St. Louis, Louisville, Memphis, Little R ock , and Evansville, and their total resources comprise approxim ately 55.5 per cent of all m ember banks in this district. Federal Operations — During August the Fed eral Reserve Bank of St. Louis discounted for 217 member banks, against 200 in July and 198 in August, 1927. The discount rate remained un changed at 5 per cent. Changes in the principal assets and liabilities of this institution as compared with the preceding month and a year ago appear in the following ta b le: Sept. 20, 1928 .$63,195 11 0 Bills bought........ U . S. Securities.. *A ug. 20, *Sept. 20, 1928 1927 $62,583 $30,673 11 4,868 16,628 35,530 .$63,206 . 57,349 . 85,285 Ratio of reserve to deposits and F. R. N ote L iabilities............... *In thousands (000 om itted ). $79,222 57,310 77,686 $71,071 43,638 81,229 60.9% 48.0% 50.6% Debits to Individual Accounts — The follow ing table gives the total debits charged by banks to checking accounts, savings accounts, certificates of deposit accounts and trust accounts of individuals, firms, corporations and U. S. Government in leading cities of the district. Charges to accounts of banks are not included. *A ug. 1928 East St. Louis & Natl. Stock Yards, 111..$ 76,484 E l Dorado, Ark.... 9,621 Evansville, In d ..... 48,284 Fort Smith, A rk... 11,584 Greenville, Miss.... 3,595 Helena, A rk .......... 3,398 Little R ock, Ark.. 70,419 Louisville, K y ..... 186,041 Memphis, T enn..... 124,584 Ow ensboro, K y.... 5,763 Pine Bluff, Ark.... 9,238 Quincy, 111............ 12,719 St. Louis, M o ........ 727,333 Sedalia, M o ............ 4,413 Springfield, Mo.... 16,007 **Texarkana, A rk .-T e x ........ 14,168 *July, 1928 *A u g. 1927 $ 69,289 10,465 46,566 12,607 3,101 3,446 69,545 195,034 132,327 5,803 8,781 12,568 763,694 4,374 16,308 $ 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 A u g. 1928 com p, to July, 1928 A ug. 1927 + 10.4% 8.1 + 3.7 — 8.1 + 15.9 — 1.4 + 1.3 — 4.6 — 5.9 — 0.7 + 5.2 — + 4 1 .3 % + 14.4 + 0.2 + 8.0 — 4.9 + 17.1 — - 1.5 + 4.7 — + 1-2 Condition of Banks — Loans and discounts of — 4.8 + 0.9 the reporting member banks on Sept. 19, 1928, — 1.8 showed an increase of 2.1 per cent as contrasted 13,045 + 3.0 13,758 + with A ugust 15, 1928 and an increase of 1.9 per cent Totals............ $1,323,651 $1, .,367,666 $1,256,335 — 3.2 + * In thousands (000 om itted). as compared with Sept. 21, 1927. Deposits increased **Includes one bank in Texarkana, T exas, not in Eighth D istrict. (Compiled September 22, 1928) 2.2 + 5.7 — 15.5 — 1.2 + 5.4 + 4.0 + 11.7 8.6 5.4 BU 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 Volume of industrial and trade activity increased in August, and there was a further advance in wholesale com modity prices. Reserve bank credit outstanding increased in September, reflecting in part seasonal demands for cur rency and credit. Money rates remained firm. P R O D U C T IO N — Production of both manufactures and minerals increased considerably in August. The produc tion of manufacturing plants being larger than at this sea son of any earlier years. Automobile production was in record volume in August and available information indicates that output was maintained by many producers at such level M anufactures, 114; minerals, 105. during September. Iron and steel production continued large in August and September and output of non-ferrous metals increased between July and August. Textile mill activity which had been somewhat reduced in recent months, also showed a substantial increase. Factory employment and payrolls have increased since midsummer and in August w'ere close to the levels of a year ago. In the building industry there was evidence of recession in a sharp decline, after the early summer, in contracts awarded, which were in smaller volume during August than while inventories in several lines of whblesale trade were somewhat larger than last year. Freight car loadings were in about the same volume in August as a year earlier. Ship ments of miscellaneous commodities and grains were larger, and those of coal, livestock, and forest products smaller than last year. P RICES — The general level of commodity prices in creased in August and the Bureau of Labor Statistics index, as 98.9 per cent of the 1926 average, was the highest in nearly two years. Increases in August were chiefly in the prices of livestock and livestock products, which are now Index of United States Bureau of L abor Statistics (1 9 2 6 = 1 0 0 ). Latest figures, A u g u st: Farm products, 107.0; non-agricultural com m odities, 96.7. higher than at any time since 1920. There were also small increases in fuels, metals and building materials. Grains and cotton showed sharp declines and there were decreases, also, in hides and skins and wool. Since the first of Septem ber there have been some declines in livestock and meats, and a sharp further decrease in cotton, while prices of pig iron, copper, and petroleum have advanced. M E M B E R B A N K C R E D IT S — Between the middle of August and the middle of September there was a consid erable increase in the loans and investments of member 1924> Federal R eserve B oard’ s indexes of value of building contracts awarded as reported by the F. W . D od ge Corp., (1923-25 a v e ra g e s 100). Latest figures, A u g u st: A djusted index, 111; unadjusted, 126. in the corresponding month of any year since 1924. In the first three weeks of September, however, awards were somewhat larger than last year. Estimates of the Depart ment of Agriculture for September 1 indicate that the yield of principal crops will be larger than last year and above the average for the preceding five years. T R A D E — Trade distributions of commodities showed seasonal increases in August, although sales in most lines of wholesale and retail did not equal the unusually large sales of August, 1927. Department store stocks increased as usual in August, but continued smaller than a year ago, 1925 1926 1927 1928 M onthly averages of daily figures for 12 Federal reserve banks. figures are averages of first 22 days in September. Latest banks in leading cities. Part of the increase was in loans on securities and part reflected a seasonal increase in other loans. Deposits of the member banks also increased during the period. Volume of reserve bank credits outstanding in creased during the four weeks ending September 19, in response to seasonal demand for currency and growth in member banks’ reserve requirements. The increase in total bills and securities was largely in holdings of acceptances and discounts for member banks. During the same period there were further increases in open market rates on collat eral loans and on commercial paper, w hile rates on bankers’ T acceptances were reduced from 4 ^ per cent to 4^2 per cent.