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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 30, 1927 WILLIAM McC. MARTIN Chairman of the Board and Federal Reserve Agent H E trend of business in this district during the past thirty days has been in the direc tion of improvement, though reports from both trade and industry still indicate considerable unevenness. In industry production has been held down by uncertainty relative to prices, also by the disposition on the part of distributors and ultimate consumers to buy only for well defined require ments. Due to abnormally high temperatures in late August, and during the first weeks of Septem ber, the pick-up in activities at iron and steel plants and other manufacturing establishments, which ordinarily follow s Labor Day, was not as pro nounced as in some recent years. The extreme hot weather and sunshine, however, proved of inestima ble value to agriculture and were directly responsi ble for marked betterment in the condition of corn, tobacco, cotton and other important crops. Im prove ment in the agricultural situation was reflected in considerably more optimism and confidence among the business community than has existed since last spring. This is true particularly of the country, where purchasing of all varieties of merchandise has increased in a measure too great to be accounted for entirely by seasonal considerations. In the lines investigated increases in August sales over those of the preceding month were the rule, and gains over August last year were recorded in dry goods, hardware, packing-house products, electrical supplies, men’s hats, stoves, farm imple ments and several minor classifications. Decreases under the corresponding period last year were shown in furniture, drugs and chemicals, boots and shoes, clothing, millinery, automobiles, groceries, fire clay products, lumber and explosives. A s has been the case throughout the year, inventories of both wholesalers and retailers are of moderate pro portions, and the disposition am ong manufacturers is to hold production in close relationship to orders booked. During the past several weeks, however, good gains have been made in advance orders, par T ticularly in textiles and hardware. The recent rise in raw cotton to the highest levels of the season served to stimulate purchasing of goods based on that staple, also to quicken buying of other fabrics. In the iron and steel industry a slowing down in new buying and specifications on previously ordered materials was noted. Building materials generally were m oving in smaller volume than heretofore, and purchasing of iron and steel by the railroads and oil industry continues backward. Reports generally from the country indicate im provement in retail distribution, due chiefly to the more favorable crop outlook. In the five largest cities of the district, department store sales in August showed a gain of 12.2 per cent over that month last year. Gains were also recorded by mail order houses and five and ten-cent stores. The amount of savings as reported by member banks was slightly smaller on September 7 than a month earlier, but the total was 6.1 per cent larger than on the corresponding date in 1926. Debits to individual accounts in August decreased 3.5 per cent as com pared with July, but were 1.8 per cent larger than in August, 1926. A ccording to the U. S. E m ploy ment service, Department of Labor, employment conditions in this district underwent no marked change as compared with the preceding month. A falling off in the number of workers occurred in some industries, while in others gains were re corded. A surplus of skilled and common labor in the building industry was general. Railroads slight ly increased their shop and operating forces. The report that Illinois operators and miners would again meet in an effort to end the strike, which has been in effect since April 1, resulted in a lowering of bituminous coal prices and some can cellation of orders. Prior to that announcement trade had been conducted without marked change as contrasted with the preceding thirty days. D e mand for domestic coal has been active? with con- tradin g by householders and dealers somewhat larger than at the corresponding period last year. The movement o f steam coal continues in large volume, with important consumers generally show ing a disposition to maintain their reserves at high levels. Some additional Illinois mines were placed in operation, but most of the tonnage com ing from that state now is from strip mines in the southern counties. Virtually all the coal stored at mines prior to April 1 has been moved. W estern mines were operating at a high rate, and generally finding ready market for their output. Production of bitu minous coal for the country as a whole for the calendar year to September 10, approximately 213 working days, totaled 365,454,000 net tons, against 372,957,000 tons for the corresponding period in 1926, and 332,345,000 tons in 1925. to questionnaires addressed to representative inter ests in the several lines throughout the district showed the follow ing results: W hile running slightly behind the record fig ures of a year ago, freight traffic of railroads operat ing in this district continues on a large scale. An especially good show ing is being made in the mer chandise and miscellaneous classification, while coal, ore and forest products show declines under last year. For the country as a whole during the first 35 weeks this year, or to August 27, loadings of revenue freight totaled 34,511,482 cars, against 34,611,028 cars for the corresponding period in 1926 and 33,595,008 cars in 1925. The St. Louis Terminal Railway Association, which handles interchanges for 28 connecting lines, interchanged 221,065 loads in August, against 208,001 loads in July and 228,396 loads in August, 1926. During the first nine days of September the interchange amounted to 62,121 loads, which compares with 62,719 loads during the same period in August and 75,733 loads during the first nine days of September, 1926. Passenger traffic of the reporting roads decreased 9 per cent in A u gust as compared with the same month last year. Estimated tonnage of the Federal Barge Line be tween St. Louis and New Orleans for August was 122,300 tons, the largest on record, and comparing with 96,643 tons in July and 114,352 in August, 1926. Autom obiles — Autom obile production in the United States for the month of August showed an increase over July, but a decrease when compared with August last year. Collections in this district during the past thir ty days continued in the main satisfactory, though as was the case a month earlier, some irregularity was noted, both in reference to locality and the sev eral lines. W holesalers in the large centers report September 1 settlements fully up to expectations, with several important dry goods and hardware firms showing better results than a year ago. Coun try retail merchants generally report conditions more satisfactory than earlier in the year. Answers Excellent Good 2.7% 3.1 3.0 28.8% 26.1 26.8 Fair 54.8% 60.0 60.6 Poor 13.7% 10.8 7.8 Commercial failures in the Eighth Federal R e serve District in August, according to Dun’s, num bered 103, involving liabilities of $750,216, against 51 defaults in July with liabilities of $1,041,215, and 53 failures for $1,326,682 in August, 1926. The per capita circulation of the United States on September 1, 1927, was $40.54, against $40.53 on August 1, 1927, and $42.02 on September 1, 1926. M A N U F A C T U R IN G A N D W H O L E S A L E W hile still running considerably behind the corresponding period a year ago, distribution of automobiles in August registered a sharp increase over July this year. In addition to the actual gain in sales, sentiment among dealers was considerably more optimistic than during the preceding thirty days. The number of prospects and inquiries was larger, and in numerous instances actual sales were deferred only because of a desire to see new models which will be placed on the market during the next few weeks. In the year to year comparison the loss is accounted for largely by smaller sales of one im portant make in the cheap priced car classification. More favorable weather than earlier in the season was mentioned as a factor in the improvement of of business during August over the preceding month. There was the usual pick-up in demand for parts and accessories incident to the touring season. Demand for replacement parts in the country was active, and buying by the general garage trade was larger than at any time since last spring. August sales of new passenger cars by 320 dealers in this district were 26.6 per cent smaller than during the same month in 1926, but 56.3 per cent larger than the July total this year. A ccessory sales of the re porting dealers in August were 12.6 per cent smaller than a year earlier and 22.4 per cent larger than in July this year. The number of new passenger cars in dealers’ hands on September 1 showed a slight increase over a month earlier, and was 9.5 per cent larger than on September 1, 1926. O f the new cars sold 58.3 per cent were on the deferred payment plan, against 53.6 per cent in July and 54.0 per cent in August, 1926. The used car market developed further slight improvement, sales being reported satisfactory and stocks on September 1 showing a decrease under those of both a month and a year earlier. ment of soda fountain supplies during the last half of the month. As a whole, prices showed little varia tion as compared with the preceding thirty days. August sales of the reporting firms were 4.1 per cent larger than in July, and 0.5 per cent smaller than in August, 1927. B oots and Shoes — August sales of the 5 report ing interests were 6.0 per cent smaller than for the same month in 1926, and 9.8 per cent under the July total this year. Stocks on September 1 were 9.2 per cent smaller than a month earlier and 2.3 per cent below those on September 1, 1926. In the monthto-month comparison the unusual decline is due largely to heavy purchasing in July of shoes ordi narily bought in August because of anticipation of an advance in prices. Future business is markedly heavier than at the corresponding time last year or in 1925. Generally satisfactory conditions are re ported through the trade, and orders booked during the first half of September are fully up to expecta tions. The trend of prices of finished goods con tinues upward in sympathy with the strength in leather and hides. W hile novelties are still in nota ble demand, style considerations are less a factor than during the past several seasons. D ry Goods — A ctivity in cotton goods incident to the rise in the raw staple, and numerous actual and prospective price advances were factors in in creases in August sales of the 8 reporting firms of 3.1 per cent over the corresponding month in 1926 and 73.5 per cent over the July total this year. Stocks on September 1 were 7.1 per cent larger than on the same date last year and 12.4 per cent less than on August 1 this year. The number of visiting merchants at St. Louis, Louisville and Memphis was considerably larger than last year, and their orders were larger and more varied. Demand for knitted goods showed improvement, and buying of piece goods was on a larger scale. Clothing — The spell of hot weather in late August and early September served to check pur chasing of heavyweight clothing for fall and winter consumption, and reordering of such merchandise has been in relatively light volume. The high tem peratures, however, resulted in a good clearance at retail of summer apparel, and the carryover will be considerably smaller than was thought possible a month or six weeks ago. Manufacturers of both men’s and w om en’s clothing continue to keep pro duction in close relationship to orders booked, and in most instances stocks are below levels usual at this time of year. Sales of boy s’ school suits and the general run of children’s raiment have been rela tively better than in the case of adult’s clothing. Buying of w om en’s suits and coats is reported back ward. Sales during August of the 5 reporting cloth iers were 24.5 per cent smaller than for the same month in 1926 and 11.2 under the July total this year. Drugs and Chemicals — In this classification August business was generally satisfactory, several important firms reporting the heaviest sales for that month in more than five years. A ctivity extended generally through the entire line, with druggist and medical supplies making a particularly good show ing. Some falling off in demand for heavy chemi cals from the manufacturing trade was noted, but this was offset by a marked increase in the m ove Electrical Supplies — August sales of the 5 re porting interests were 8.9 per cent larger than for the same month in 1926, and 24.4 per cent below the July total thi§ year. Stocks on September 1 were 3.9 per cent larger than on the same date in 1926, and 10.8 per cent smaller than on August 1 this year, August shipments were the largest in several years, but new business booked was relatively small. U n favorable weather, reduced building operations, the coal strike and a disposition on the part of retailers to hold down inventories were mentioned among the unfavorable influences. Prices showed no change during the month, and average 5 to 7y2 per cent lower than a year ago. Flour — Production of flour at the 12 leading mills of the district in August was 385,028 barrels, the largest for any month this year, and comparing with 358,760 barrels in July and 456,138 barrels in August, 1926. Flour stocks in St. Louis on Septem ber 1 were 7.5 per cent larger than on August 1, and 22.7 per cent greater than on September 1, 1926. The volume of new business booked by mills in creased noticeably during the past thirty days. Pur chasing by the domestic trade was quite active, and there were fair sales for export, both to Europe and the Latin-American countries. Shipping directions on flour previously purchased were reported by some mills to have been the best for several months. Mill operation was at from 60 to 65 per cent of capacity. Furniture — August sales of the 16 reporting interests were 10.6 per cent smaller than for the same month in 1926, but 8.3 per cent in excess of the July total this year. Stocks on September 1 were 14.9 per cent smaller than thirty days earlier and 32.2 per cent below those on September 1, 1926. Business in the large centers has improved since August 1, and is relatively better than in the rural sections. Retailers in the country are purchasing closely and in small lots. Groceries — Lateness of the packing season, unfavorable weather and the disposition of retailers to purchase for immediate needs only were men tioned as the principal influences in a decrease in August sales of the 11 reporting firms of 10.1 per cent under those of the corresponding month last year. The August total, however, was 8.0 per cent over that of July this year. Stocks on September 1 were 3.0 per cent larger than a month earlier and 4.0 per cent greater than on September 1, 1926. Since the middle of August business has improved somewhat, particularly for forward delivery. The trend of prices was higher. Hardware — Marked improvement in this class ification, both as compared with the preceding month and a year ago, was noted during the past thirty days. Purchasing throughout the entire line was o f a freer character, and certain departments which have lagged for several months showed well defined signs of recovery. The movement of sport ing goods and tourist equipment and supplies was heavier than during any month this year. Further improvement was noted in the call for hand imple ments, fencing, stoves and other goods used largely in the country. A ugust sales of the 9 reporting firms were 5.8 per cent larger than for the same month in 1926, and 11.8 per cent greater than the July total this year. Stocks on September 1 showed a gain of 21.8 per cent over those on August 1, but were 14.6 per cent smaller than on September 1, 1926. Iron and Steel Products — The usual seasonal increase in activities at mills, foundries and machine shops was held in check by the spell of extremely hot weather, and ordering in quantity for future needs is under expectations. New busi ness at steel mills in August was under the average for that month during the past five years, with losses most pronounced in the classification of materials used by the railroads. Purchasing by the oil indus try was in smaller volum e than at the corresponding period in recent years, and less life was noted in the demand for building materials. Lateness of the pack was reflected in delayed ordering of tin plate by important canning interests. During the past three weeks, however, some improvement has devel oped in this com m odity, also in the movement of other varieties of sheets, particularly galvanized material. Job foundries and certain specialty manu facturers have been relatively more active than other sections of the industry. Farm implements makers, stove foundries and producers of other com m odi ties used chiefly in the rural areas report increased sales, demand being stimulated by the more hope ful outlook for crops. W ire and wire products con tinue in fair demand and steady in price. Machine and engine builders were operating at a high rate during the past thirty days, but report a reduction in incoming and unfinished orders. Reinforcing con crete material continues to move in heavy volume, with bar manufacturers operating on full schedules. Backward buying by the automotive industry is re flected in dullness in strip steel, automobile sheets and kindred materials. Prices of finished and semi finished iron and steel goods generally underwent no change w orthy of note as contrasted with the preceding thirty days. Production of pig iron for the country as a whole in August totaled 2,950,674 tons, which was 3,949 tons less than in July, and com pares with 3,200,723 tons in August, 1926. Purchas ing of pig iron was moderately active, but as a rule melters have covered less fully on fourth quarter requirements than usual, and there is a general dis position to hold down commitments on all raw materials to well defined needs. August steel ingot production in the United States was 3,470,903 tons, against 3,178,342 tons in July and 3,987,966 tons in August, 1926. R E T A IL T R A D E The condition of retail trade is reflected in the follow ing comparative statement showing activity at department stores in leading cities of the d istrict: Net sales comparison Stocks on hand Stock turnover Aug. 1927 8 months ending Aug. 31, 1927 January 1 to comp, to Aug. 31, 1927 to comp, to August 31, Aug. 1926same period 1926 Aug. 31, 1926 19271926 Evansville .......+33.6% +17.3% +10.6% 151.3 139.2 Little Rock.....+ 6.4 — 4.5 — 2.4 154.9 155.3 Louisville .......+ 11.0 — 0.1 — 9.3 210.7 193.0 Memphis .........+ 10.5 — 5.6 — 10.2 177.6 177.6 Quincy .......... + 3.5 — 7.1 — 10.1 140.4 130.5 St. Louis.........+13.6 — 1.8 — 5.2 213.4 210.5 Springfield, Mo.— 14.7 — 10.8 + 7.4 101.1 108.5 8th District.....+12.2 — 2.4 — 5.8 198,2 194.4 Net sales comparison Aug., 1927 compared to Aug. 1926 July, 1927 Men’s furnishings........... + 15.2% — 5.0% Boots and shoes............ -j-10.0 — 6.1 Stocks on hand Aug., 1927 compared to A ug.'1926 July, 1927 +1^.8% — 0.4% — 1.2 + 4.9 B U IL D IN G In point of dollar value, building permits for new construction in the five largest cities of the district during August showed a decrease of 5.0 per cent under the preceding month, but a gain of 43.6 per cent over the total of August, 1926. A ccord ing to figures compiled by the F. W . D odge Corpor ation, building contracts let in the Eighth Federal Reserve District in August amounted to $34,133,834, which compares with $32,204,565 in July and $48,743,341 in August, 1926. A slightly lower trend was noted in building costs, due to price reductions in lumber and some other materials. Production of Portland cement for the country as a whole in August totaled 18,305,000 barrels, the largest on record and com paring with 17,398,000 barrels in July and 16,995,000 in August, 1926. Building fig ures for August fo llo w : New Construction *Cost Permits 1927 1926 1927 1926 $ 254 $ 400 Evansville .,. 479 '"535 Little Rock 27 81 108 297 256 1,738 1,653 Louisville .... 140 229 Memphis .... 354 686 1,127 864 5,595 2,358 St. Louis... . 800 $8,381 $5,835 Aug. totals 1,800 1,965 8,818 5,844 July totals 1,547 1,798 June totals 1,800 1,799 6,616 6,281 *In thousands of dollars (000 omitted). ______ Repairs, etc. *Cost Permits 1927 1926 1927 1926 io3 $ 45 $ 35 117 73 30 108 132 269 165 84 86 74 305 38 246 508 338 768 491 862 796 903 1,148 828 798 $ 763 $1,244 871 1,266 $ 745 998 C O N S U M P T IO N O F E L E C T R IC IT Y Public utilities in the five largest cities of the district reported consumption of electricity by selected industrial customers in August as being 7.4 per cent greater than in July and 2.0 per cent in excess of August, 1926. Increases were fairly general, but most pronounced in flour mills, cement and glass works, some iron and steel working plants and southern coal mines. Lighter loads were taken by ice manufacturing and electric refrigeration plants. Detailed figures follow : No. of Aug., Aug. 1927 Aug., July, 1926 Custom 1927 1927 comp, to ers *K.W.H. *K.W.H. July, 1927 *K.W.H. 1,437 Evansville .40 1,260 1,311 — 3.9%' Little Rock....35 1,646 1,997 1*971 + 1.3 5,700 Louisville .....83 6,020 5,073 + 18.7 1,806 Memphis ...... 31 1,034 1,240 — 16.7 St. Louis. ... 109 18,534 17,258 17,693 + 7.4 Totals .....298 28,845 26,853 *In thousands (000 omitted). + 7.4 28,282 Aug. 1927 comp, to Aug. 1926 — 12.4% +21.3 + 5.6 —42.8 + 4.7 + 2.0 A G R IC U L T U R E Due to ample sunshine and high temperatures, prospects for agriculture as a whole in this district underwent decided improvement during the past thirty days. A ccording to the U. S. Department of Agriculture, the com posite condition of all crops in states entirely or partly within the Eighth Federal Reserve District was 88.9 per cent on September 1, as compared with 87.0 per cent on August 1. This indicates that crops were 11.1 per cent below their average condition on September 1. On the same date last year, however, crops in the district were 17.1 per cent above their average condition. Bet terment was most pronounced in the case of corn, which in virtually all sections made excellent progress during the latter part of August and the first half of this month. A m on g other crops with brighter outlook than earlier in the season are sweet potatoes, tobacco, grain, sorghums, peanuts, broom corn and some vegetables. Fruits barely held their own, and some showed poorer prospects. N o better ment was shown in rice, and the outlook for pota toes, hay, and pastures was hardly as good as thirty days earlier. Generally the supply of farm labor was adequate to all requirements with some surplus being reported in certain sections of the grain areas. W inter W heat — Virtually no change has taken place in the estimate of winter wheat production in the district since August 1. Threshing returns, however, are in the main disappointing and disclose considerable low grade grain. In all states of the district intentions of farmers are to plant heavier acreages than last fall. W eather and soil conditions have been ideal for fall plow ing and seeding wheat, and a considerable amount of this work has been completed. Corn — Alm ost universally through the district corn has made excellent progress since the middle of August. Beginning at that time, a reaction to real summer weather set in, and temperatures dur ing the first three weeks of this month were consid erably above the seasonal average. These condi tions promoted growth and development of corn, and through the southern stretches of the district the crop has ripened and is beyond danger of frost. In the northern tiers of counties the crop is still from one to three weeks late and will require a de ferred frost date to bring it to maturity. In Illinois and sections of Missouri and other states prospects are still poor as compared with recent years, and there will be much low grade corn, even under fav orable conditions to harvest. Based on the Septem ber 1 condition the output for this district is fore cast at 301,560,000 bushels, a gain of 12,913,000 bushels over the indicated yield on August 1, and comparing with 393,007,000 bushels harvested in 1926. The yield for the United States is estimated at 2, 457,000,000 bushels, against 2,647,000,000 bush els harvested in 1926, and a 5-year average (19221926) of 2,767,000,000 bushels. Oats — For the most part yields indicated by threshing returns are disappointingly low, and the grain is light in weight. Production in the Eighth Federal Reserve District, based on the September 1 report, is estimated at 41,393,000 bushels, against 59,031,000 bushels harvested in 1926. For the entire country the forecast is for 1,191,000,000 bushels, against 1,250,000,000 bushels harvested in 1926, and a 5-year average of 1,352,000,000 bushels. Fruits and Vegetables — Developments during the past thirty days have not changed earlier pros pects for heavily reduced yields of fruits and vege tables as contrasted with recent years. However, the more seasonable weather was beneficial to some vegetables, and for the most part fruit prospects about held their own as compared with the preced ing thirty days. Sweet potatoes improved, and will be a large crop, production in states partly or entire ly within the district being estimated at 20,492,000 bushels, which is only 205,000 bushels less than har vested in 1926, and compares with a 5-year average of 18,700,000 bushels. Based on the September 1 condition the white potato crop in the district is estimated at 13,156,000 bushels, against 13,003,000 bushels harvested last year. Apples are being har vested, and results of the unfavorable growing sea son are reflected in both quantity and quality of the fruit. In states of the district the indicated yield of apples on September 1 was 12,052,000 bushels, against 33,632,000 bushels in 1926. This year the commercial crop is only 1,607,000 barrels, against 2.949.000 barrels last year and a 5-year average of 3.132.000 barrels. The peach crop in these states is forecast at 4,425,000 bushels, which compares with 11,003,000 last year and 8,163,000 bushels for the 5-year average. The condition of grapes deterio rated further, and prospects are for 20,880 tons, a loss of 1,000 tons under the August 1 estimate, and comparing with 40,264 tons harvested in 1926, and a 5-year average of 24,107 tons. The commercial tomato crop improved and gardens and vegetables* generally were in better condition than a month earlier. Live Stock — Reports from scattered sections of the district indicate generally satisfactory condi tions among live stock. Feed and fodder are plenti ful, and market prices have held at the high levels of the preceding thirty days. Pastures have been adversely affected by the hot dry weather, but in the main are still in good condition for sustaining herds. There was a slight decrease in hay prospects in the district between August 1 and September 1, but the crop will still be considerably larger than last year or the 5-year average. Receipts and shipments at St. Louis, as re ported by the National Stock Yards, were as fol lows : Receipts Aug., July, Aug., 1927 1.927 1926 Cattle and Calves.....180,017 127,262 159,840 Hogs ........................313,683 271,049 290,182 Horses and Mules.... 3,347 1,828 2,408 Sheep ........................ 74,063 88,662 84,625 Shipments Aug., July, Aug., 1927 1927 1926 115,656 87,423 107,701 231,366 204,106 210,474 2,617 2,747 1,500 18,942 28,984 26,732 Cotton — Based on the September 1 condition, the U. S. Department of Agriculture estimates the 1927 cotton crops in the Eighth Federal Reserve District at 2,066,000 bales, which compares with 3,349,000 bales produced in 1926. For the country as a whole the forecast is for 12,692,000 bales, against 17,977,000 bales harvested in 1926. In all states of the district the condition is lower than a year ago, but during the past three weeks weather has been favorable for the plant, and against activi ties of boll weevils and other insect pests, with the result that some improvement is reported in cer tain sections. The Missouri State Board of A gri culture says that under warmth and sunshine re markable recovery from previous unfavorable con ditions has taken p la ce; bolls are showing large and fine. Prices reached a new high point for the season in the first week of September, and through the period under review averaged considerably higher than during the same time last year. Pick ing is becom ing general, but the movement is con siderably smaller than last year. Stocks of cotton on hand in Arkansas warehouses on September 16 totaled 83,269 bales, against 247,493 bales on the corresponding date in 1926. T obacco — Between August 1 and September 1 prospects for tobacco improved markedly under more favorable weather conditions. In this district the September 1 forecast is for 179,649,000 pounds, which is 13,992,000 pounds more than the August 1 estimate, and compares with 304,603,000 pounds har vested in 1926. Early planted tobacco has been ripening in good shape, and curing and housing has become general. W eather conditions are good for air curing. Late tobacco shows less favorable pro gress, with reports of poor condition except where rains have fallen. A t the middle of September ap proximately 55 per cent of the crop has been cut in the burley district, in the aircured and green river districts 24 per cent, in the Springfield territory 52 per cent, Clarksville 35 per cent, Hopkinsville 15 per cent and W estern Paducah district 55 per cent. The United States crop for 1927 is estimated at 1,168,413,000 pounds against 1,301,000,000 pounds in 1926, and a 5-year average of 1,338,000,000 pounds. Commodity Prices — Range of prices in the St. Louis market between August 15, 1927, and Septem ber 15, 1927, with closing quotations on the latter date and on September 15, 1926. Close Wheat High Low Ssept. l4, 1927 Sept 1^26 Sept.................... per bu.$1.41** $1.31# 4 $1.28 $1.34J< Dec. 1.28# 1.36 f 1.47# 1.28# No. 2 red winter $1.41@ 1.43 $1.37@ 1.39 1.50 1.41 No. 2 hard......... 1.29 1.38@ 1.39 1.42# 1.29# Corn Sept. ................. 1.12 # .93 .93# MM Dec...................... .96H .83# 1.16ft .93# No. 2 mixed....... 1.10 .94 .94 No. 2 white....... 1.09# .94 .82# •94@ .95 Oafs No. 2 white..... .52# ,47 Flour Soft patent.......per bbl. 7.50 7.00 Spring patent..... “ 7.45 6.75 Middling cotton....per lb. .22# .19 Hogs on hoof......percwt.12.05 10.25 ^Nominal. .50# 7.00@ 7.25 6.75 @ 7.15 .20# 10.25@12.00 .44@ _.44# 6.75@ 7.25 6.75 @ 7.30 .16# 10.50 @13.75 F IN A N C IA L Demand for credits for general commercial, in dustrial and agricultural purposes, in this district during the past thirty days has been fairly active, and somewhat better than during the similar period immediately preceding. A s has been the case for many months, however, the supply o f loanable money is more than sufficient to cope with every legitimate requirement, and interest rates remain easy at about the levels current at the middle of August. In the large cities demand from important mercantile lines, notably dry goods, apparel, hard ware and food products, has been active and well up to the seasonal average. A s compared with the preceding month, no change of moment has taken place in commitments of leading manufacturing lines other than those affected by seasonal consider ations. Financing of the grain movement has reached its peak, and some liquidation by interests engaged in the grain trade is reported. Country banks in the winter wheat sections have as a rule increased their balances with city correspondents, and in some instances are seeking investments for surplus funds. Demand in the South for financing the cotton crop is increasing, but thus far needs for this purpose have been cared for largely by local resources. Country banks in the cotton areas have increased their demand for currency, particu larly in the Memphis district. Banks specializing in live stock loans report a fair demand for funds, but also a fair volume of current liquidation of prior loans. The volume of reserve credit in use in the Eighth district during the period under review has been uniformly below a year ago. Deposits of the reporting member banks hold up well, and loans of these banks at the middle of September reached a new high point for the year. A t the St. Louis banks current interest rates were as follow s: Prime com mercial loans, 4 to 5 per ce n t; interbank loans, AJ /2 to 5*4 per cent; collateral loans Ay2 to 5 per cent; loans secured by warehouse receipts, 4y2 to 5 per cent; cattle loans, 5y2 to 6 per cent. Federal Reserve Operations — During August the Federal Reserve Bank of St. Louis discounted for 198 member banks, against 183 in July and 220 in August, 1926. The discount rate remained un changed at 3y2 per cent. Changes in the principal assets and liabilities of this institution as compared with the preceding month and a year ago are shown in the follow ing ta b le: Sept. 20, *Aug. 20, 1927 --1927 Bills discounted.............................................. $30,673 $28,906 Bills bought.................................................... 4,868 3,879 U. S. Securities............................................. 35*530 32,046 Total bills and securities...........................71,071 F. R. notes in circulation.............................43,638 Total deposits............................................... .81,229 Ratio of reserves to deposit and F. R. Note liabilities...................... .50.6% *In thousands (000 omitted). Sept. 20, 1926 64,831 41,073 81,936 77,837 47,693 77,547 52.6% 43.7% Debits to Individual Accounts — The follow ing comparative table gives the total debits charged by banks to checking accounts, savings accounts, cer tificates of deposit accounts, and trust accounts of individuals, firms, corporations and U. S. Govern ment in leading cities of the district. Charges to accounts of banks are not included. *August, 1927 E. St. Louis & Nat’l. Stock Yards, 111..$ 54,122 El Dorado Ark.... 8,412 Evansville, Ind..... 48,165 Fort Smith, Ark.... 12,176 Greenville, Miss.... 3,071 Helena, Ark......... 3,145 Little Rock, Ark.. 71,474 Louisville, Ky....... 177,753 Memphis, Tenn.... 127,390 Owensboro, Ky.... 5,452 Pine Bluff, Ark.... 10,927 Quincy, 111.......... 12,869 St. Louis, Mo....... 689,763 Sedalia, Mo.......... 4,244 Springfield, Mo.... 14,327 *July, 1927 *August, 1926 Aug., 1927 comp, to July, 1927 Aug. 1926 $ 50,366 9,185 51,162 13,283 2,601 3,175 72,157 192,700 127,536 5,023 10,907 12.484 717,503 4,312 15.484 $ 50,969 11,028 41,505 11,632 3,293 4,676 77,113 185,562 '125,920 5,031 9,768 12,522 661,883 4,197 15,762 + 7.5% — 8.4 — 5.9 — 8.3 -1-18.1 — 0.9 — 0.9 — 7.8 — 0.1 4- 8.5 + 0.2 + 3.1 — 3.9 — 1.6 — 7.5 + 6.2% —23.7 + 16.0 + 4.7 — 6.7 — 32.7 — 7.3 — 4.2 + 1.2 + 8.4 + 11.9 + 2.8 + 4.2 + 1.1 — 9.1 — 3.5 + 1.8 Totals.......... $1,243,290 $1,287,* *In thousands (000 omitted). *1,220,861 Condition of Banks — Loans and discounts of reporting member banks on September 14 showed an increase of 1.4 per cent compared with August 17, and a decrease of 2.4 per cent as contrasted with September 15, 1926. Deposits increased 1.4 per cent between August 17 and September 14, and on the latter date were 1.2 per cent larger than on Septem ber 15, 1926. Composite statement follow s: Loans and discounts (incl. rediscounts) *Sept. 14, *Aug. 17, *Sept. 15, 1927 1927 1926 31 31 ..$ 4,561 Investments U. S. Gov’t securities..... Other securities............... Total investments................. Reserve balance with F. R. Cash in vault......................... Deposits Net demand deposits...... Time deposits.................... Government deposits........ Total deposits............................................... Bills payable and rediscounts with Federal Reserve Bank Secured by U. S. Gov’t obligations.. ,. All others........... ....... .......................... ,, *In thousands (000 omitted). (Compiled September 23, 1927). 124 5,060 7,752 $ 4,447 202,803 296,285 $ 7,269 189,966 325,978 $503,535 $523,213 70,942 123,933 64,735 113,975 $194,875 46,195 7,224 $178,710 49,788 7,933 398,333 236,385 620 413.145 217,680 6,120 $635,338 $636,945 7,771 6,685 6,182 12,819 BUSINESS CONDITIONS IN T H E U N ITE D STA TES P R O D U C T IO N — Production of anthracite and bitu minous coal which showed a considerable decline earlier in the season, increased sharply in August and in the early weeks of September. This rise wras reflected in an advance in the Board’s index of mineral output from 98 per cent of the 1923-1925 average in July, to 106 per cent in August. The index of manufactures as a whole showed practically no change for the month. The iron and steel industry con tinued during August and September with little change in demand or in production, and the output of newsprint, lum ber, and cement showed only customary seasonal changes PERCENT __________________________________________ PERCENT of the month were in about the same dollar volume as a year ago. Stocks carried by wholesale firms continued in August generally smaller than last year. Freight carloadings of nearly all types of commodities increased considerably in August and the early part of September but, with the excep tion of grains and miscellaneous products, loadings for all groups continued in smaller volume than in the same period of last year. PRICES — Wholesale commodities prices, as measured by the index of the Bureau of Labor Statistics, increased from 145 in July to 147 in August. There were large inPERCENT PERCENT 200 Minerals -1 r 7 j .m ^-—c l r v * m \ r X V actures Manuf? 150 150 vv w WHOLESALE PRICES PRlODUCTION OF MANUFACT URES AND MINERALS i l AN Commodities Agricutturaf •+♦* Non-Agricu/turai I 100 1925 192*f 1323 1926 1923 1927 1924 1925 1926 1927 100 Index numbers of production of manufactures and minerals, adjusted for seasonal variations (1923 = 100). Latest figures, August: Manufactures, 106; minerals, 106. Indexes of United States Bureau of Labor Statistics (1913 = 100). Latest figures, August: All commodities, 146.6; non-agricultural, 144.5; agricultural, 148.1. in August. Consumption of cotton remained unusually large for this season of the year, and there was an increase in the production of automobiles, which, however, remained below the output of August of last year. Output of shoes and rubber tires increased from July to August by less than the customary seasonal amount. Factory employment was in practically the same vol ume in August as in July and both employment and pro duction were smaller than a year ago. The volume of build ing contracts awarded in Augrust was smaller than in August creases in the prices of farm products and of clothing materials, while most of the other groups showed only slight changes. The price of raw cotton advanced from 17^2 cents a pound on August 1 to over 23 cents on Sep tember 8, but since that date has declined about three cents a pound. Prices of cotton goods, cattle, hogs and sugar also increased during August and the first three weeks of September, while those of grains declined recently. There have been reductions in the prices of some iron and steel products. PERCENT 150 PERCENT 150 * 1W p s Rayrolls ^ ---------------J / " V 100 Employment SO so FACTORY EMPLOYMENT AND PAYROLLS 11 o 1923 0 192*> 192S 1926 1927 Federal Reserve Board’s indexes of factory employment and payrolls (1919—100). Latest figures, August: Employment 91.2; payrolls, 104.4. 1926 which was a month of unusually large awards. The largest decreases, as compared with last year, were in the Boston, New York, and Chicago Federal reserve districts. In the first half of September awards were in practically the same volume as in the corresponding period of last year. The Department of Agriculture’s estimate of corn pro duction on the basis of September 1 conditions was 2,457,000,000 bushels compared with 2,647,000,000 harvested in 1926. The total yield of wheat is expected to be somewhat larger than a year ago. The forecast of the yield of cotton was 12,692,000 bales representing a reduction of 800,000 bales from the August estimate, and of over 5,000,000 bales from last year’s crop. T R A D E — Distribution of merchandise at wholesale and retail increased more than is usual in August, and sales were generally larger than in August of last year. Sales of wholesale firms in most leading lines were larger than a year ago. Inventories of department stores showed less than the usual seasonal increase in August and at the end B A N K C R E D IT — Total loans and investments of member banks in leading cities between August 17 and September 21 increased by $400,000,000 to the largest fig ure on record. There were increases in loans on securities, and in investments, as well as the usual seasonal growth in Joans for agricultural and commercial purposes. The vol ume of reserve bank credit increased during the month end ing September 21 reflecting the seasonal growth in the de mand for currency, and the export of gold. The increase was entirely in the holdings of acceptances and United States securities as there was little change in discounts for member banks. In the open money markets rates on security loans increased slightly during September while rates on commercial paper and 90 day bankers’ acceptances remained unchanged at the lowest level of the year. Dis count rates at the Federal Reserve Banks of Philadelphia, Chicago, San Francisco and Minneapolis were reduced dur ing September from 4 to 3J / 2 per cent, the rate prevailing in the other eight districts.
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