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BUSINESS CONDITIONS
Monthly Review of Agricultural, Industrial, Trade and
Financial Conditions in Eighth Federal Reserve District
RELEASED FOR PUBLICATION ON THE AFTERNOON OF SEPTEMBER 30, 1938
i l l Lo cu st Street
S U M MA R Y O F E I G H T H D IS T RI CT
.
.
,
Sept. 1, 1938, comp, with
Agriculture:
Yield 1937 Av.1923-37
Estimated yield of 7 crops.................. — 6.2% + ' 1.2%
_ .
_
,
Aug., 1938, comp, with
Live Stock:
July, 1938 Aug., 1937
Receipts at National Stock Yards.....+ 4.8% — 5.2%
Shipments from aforesaid Yards...... — 1.4
—16.7
Production and Distribution:
Sales by mfrs. and wholesalers..........+15.4
Department store sales......................... +14.9
Car loadings......................................... — 4.4
— 36
— 2.0
—23.1
Building and Construction:
Bldg. permits, incl. repairs { ^ r + 1 1 . 9
-10.6
Value construc. contracts awarded....+59.5
Miscellaneous:
+40.3
Commercial failures { S i l i d c s ' : . : : : : - © !
Consumption of electricity............. ...+ 5.6
Debits to individual accounts............— 7.9
-1 ?
—10.8
—12.7
w
Member isanKs
Ranke
•
Sept. 114,
’ 38,gept
comp,15with
memoer
.
Aug
7 ,3g
>,37
Gross deposits..................................... + 1.9% + 7.2%
Loans.................................................... + 1.2
— 8.4
Investments......................................... .— 0.3
+ 5.0
RADE and industry in the Eighth District
during August continued the upward trends
which began about the middle of July. Im
provement was quite rapid and fairly general through
out August, but since the first week in September the
tempo has slowed somewhat.
T
The decline in prices of farm products had a
retarding influence on distribution of commodities as
a whole and the unseasonably high temperatures of
early September tended to restrict the volume of re
tail buying, both in the country and large urban
centers. Among the beneficial factors affecting the
situation were the almost entire absence of the usual
summer recession in many manufacturing lines, par
ticularly iron and steel and some other durable goods
industries, marked expansion of building during Aug
ust, continued high rate of production at shoe fac
tories and textile mills, increased production at mines
and moderate enlargement of advance buying of
merchandise for fall and winter distribution. Em
ployment and payrolls generally through the district
developed quite decided improvement, and this would
have been more pronounced but for the continuance
of numerous strikes in scattered sections of the area.
Demand for building materials, including structural
steel, glass, fire clay products and lumber, was re
ported more active than at any time this year.
Clearance of summer merchandise was generally
above expectations. Special sales held by merchants
in late August and early September met with good
response and accounted for the movement of a con
siderable volume of such goods. Reflecting increased
Page 2
manufacturing activities, consumption of electric
power by industrial users in the chief centers in
creased 5.6 per cent in August over July, following
a gain of 5.7 per cent in July over June. While
still measurably below a year ago, production at dis
trict coal, zinc and lead mines registered a sharp
increase from July to August. Production of lumber
in states of the district increased in August, and
there was a further gain in orders and shipments as
contrasted with July. Output of petroleum at dis
trict fields in July was greater by 18.5 per cent and
101 per cent, respectively, than a month and a year
earlier. Retail sales of automobiles in August de
creased 0.5 per cent from July, and were approxi
mately one-half smaller than a year ago. Steel ingot
production at mills in this area reached the highest
point since last October.
Gauged by sales of department stores in the prin
cipal cities, the volume of retail trade in August was
14.9 per cent more than in July and 2.0 per cent
smaller than in August, 1937; for the first eight
months this year cumulative total was 7.0 per cent
less than in the comparable period in 1937. Com
bined August sales of all wholesaling and jobbing
firms reporting to this bank were 15.4 per cent greater
than in July and 3.6 per cent less than for August,
1937; total for the first eight months fell 14.8 per
cent below that of the like interval in 1937.
The value of building permits issued for new con
struction in the principal cities in August was about
one-half larger than in July and 19.2 per cent above
the August, 1937, total; for the first eight months
there was a decrease of 23.8 per cent as compared
with the same period a year ago. Construction con
tracts let in the Eighth District in August exceeded
those of July by 59.5 per cent and were 40.3 per cent
more than in August, 1937; cumulative total for the
first eight months was 6.4 per cent below that
for the like period in 1937.
Reports relative to collections during the past
thirty days reflected considerable spottiness, both as
to the several lines and various geographic locations.
On the whole, however, results were somewhat more
satisfactory than a month earlier, though as com
pared with the same period last year the showing
was unfavorable.
Commercial failures in the Eighth Federal Re
serve District in August, according to Dun and Bradstreet, numbered 30, involving liabilities of $169,000,
which compares with 41 defaults with liabilities of
$557,000 in July, and 24 failures for a total of $217,000
in August, 1937.
D E T A I L E D S U R V E Y OF D I S T R I C T
M AN UFACTURIN G AND W H O LE SA LIN G
Lines o f
Commodities
Boots and Shoes.....
Drugs and Chemicals
Dry Goods...............
Electrical Supplies...
Furniture..................
Groceries...................
Hardware..................
All above lines....
Net Sales
August, 1938
8 months 1938
comp, with same
compared with
July, ’ 38 Aug. ’ 37
period 1937
— 7.8%
+ 4.8% + 4 0 .0 %
+ 4.1
— 9.4
— 0.8
+ 58.4
— 20.5
— 15.0
— 20.8
+ 3.7
— 16.1
— 24.2
— 26.0
+43.0
+ 4.9
— 11.7
— 13.9
— 16.5
— 18.5
+ 14.9
+ 15.4
— 3.6
— 14.8
Stocks
Aug. 31, 1938
comp, with
Aug. 31, 1937
......... %
— 25.0
— 30.6
— 34.2
— 11.7
— 18.3
— 22.1
Business of wholesaling and jobbing groups in this
district increased during August and, at a somewhat
more moderate rate, continued the betterment during
the first half of September. In all lines investigated
by this bank August sales exceeded those of July and
the decrease of 3.6 per cent in the total of all lines
as compared with a year earlier, shown in the above
table, was the smallest for any month this year. In
a number of important classifications the increase
from July to August was seasonal in character, but
in the case of dry goods, furniture and hardware was
larger than the average in recent years. In a major
ity of classifications, but more particularly boots and
shoes, dry goods and furniture, advance ordering by
retailers was on a considerably larger scale than
earlier in the year. According to a number of the
reporting firms, there has been more interest in holi
day goods than at this time either a year or two
years earlier. The recent decline in cotton prices has
served to make for hesitation in purchasing of fabrics
based on that staple. Hardware and electrical supply
interests report a noticeable increase in the movement
of building materials.
Automobiles — Combined passenger car, truck
and taxicab production in the United States in August
totaled 90,484 as against 141,437 in July and 394,322
in August, 1937.
Iron and Steel Products — The final weeks of
August and first half of September were marked by
a further moderate increase in activities in the iron
and steel industry in this area. The betterment was
fairly well spread over all sections of the industry
and was supported in the main by steadily increased
purchasing by miscellaneous consumers. While buy
ing still is chiefly for immediate requirements, numer
ous orders placed for finished steel carried specifica
tions for immediate shipment, indicating reduced con
sumer inventories and actual need for the material.
Relatively the highest rate of production was main
tained at plants of specialty makers, including stoves,
heating apparatus, farm implements, machine tools
and machinery. However, expansion took place else
where, schedules at steel mills being stepped up and
operations at jobbing foundries being at the highest
rate in a number of months. Outlet through the
building industry has broadened noticeably, and pend
ing public works projects nearing the contract stage
indicate further improvement during the next several
months. Operations at fabricating yards at midSeptember were at about 40 per cent of capacity, an
increase of 5 per cent over a month earlier. August
sales of warehouse and jobbing interests were 8 per
cent above the preceding month, but still measurably
below August, 1937. Shipments and the melt of pig
iron increased about one-third in August over July,
and made a more favorable comparison with a year
ago than has been the case since last winter. No
announcement has been made on prices for the fourth
quarter, which fact has tended to hold down advance
purchasing of tin plate and some other commodities.
Production of steel ingots in this area as of midSeptember was at 42.5 per cent of capacity, which
compares with 36.3 per cent a month earlier and
74.2 per cent on September 15, 1937. Prices of raw
and finished materials were practically unchanged,
except iron and steel scrap, which advanced to a new
high on the recent upward movement. For the entire
country, production of pig iron in August, according
to the magazine “ Steel,” totaled 1,495,245 tons, the
high point for 1938, and comparing with 1,213,327
tons in July and 3,616,954 tons in August, 1937.
Steel ingot production in the United States in August
was 2,546,988 tons, against 1,982,058 tons in July and
4,877,826 tons in August, 1937.
M INING AND OIL
Coal — There was a fair increase in production
at coal mines in this general area and the country as
a whole during August, as compared with July, and
further improvement was noted during the first half
of September.
The betterment was seasonal in
character, however, and output was still measurably
below that of a year ago. Inventories of coal held
by industrial users are still of considerable size despite
heavier consumption during July and August. On the
other hand, retail stocks have been fairly well liqui
dated and are below a year ago. Production of soft
coal in the United States in August was estimated by
the National Bituminous Coal Commission at 28,280,000 tons, against 23,357,000 tons in July and 33,988,000 tons in August, 1937; for the first eight
months this year 202,840,000 tons were produced,
which compares with 287,442,000 tons during the
same period in 1937. At mines in this district August
production was 22.4 per cent greater than in July
and 5.3 per cent less than in August last year; for
the first eight months output was 23.1 per cent less
than for the comparable period in 1937. Illinois
mines produced 2,760,098 tons in August, as against
2,192,384 tons in July and 3,005,108 tons in August,
Page 3
1937. There were 92 mines in operation in August,
with 24,902 men on payrolls, as against 87 active
mines and ^3,633 operatives in July.
Petroleum — July output of crude oil in states
of the Eighth District was 18.5 per cent greater than
in June and 101.3 per cent greater than that of July,
1937. Cumulative total for the first seven months
this year exceeded that of the like period in 1937 by
88.2 per cent. Stocks on August 1 were 1.3 per
cent and 6.3 per cent greater, respectively, than a
month and a year earlier. Detailed production and
stocks by states are given in the following table:
(In thousands
o f barrels)
Arkansas ......
Illinois ..........
Indiana ..........
Kentucky ......
Totals ...............
*Revised.
Production
July, June, Ju ly,. Cumulative
1938 1938
1938
1937
1937
855
9,988
5,669
1,680 1,272
9,498
2,916
1,642 1,462*
530
531
475
73
84
87
3,158
3,255
506
487
487
3,915
3,305
1,945
23,175
12,315
Stocks
July,
July,
1937
1938
2,291
2,583
11,725 10,948
3,127
2,734
1,155
956
18,298
17,221
R E T A IL T R A D E
Department Stores — The trend of retail trade
in the Eighth District, as reflected in statistics of
department stores in the principal cities which report
to this bank, is shown in the following comparative
statement:
Ft. Smith, Ark. .
Little Rock, Ark
Louisville, K y.....
Memphis, Tenn. .
Pine Bluff, Ark..
Quincy, 111...........
St. Louis, M o.....
Springfield, Mo. .
All Other Cities...
8th F. R. Districi
Net Sales
August,1938
8 mos. 1938
compared with
to same
July, 1938 Aug. 1937 period 1937
+
1.9%
+
6.2%
-12.9%
— 5.9
(—12.5
— 2.1
— 10.6
— 13.0
-11.0
— 5.9
— 3.8
- 9.0
— 14.7
— 1.9
- 2.2
— 7.5
— 6.1
-20.6
— 6.6
— 0.3
-17.9
— 1.4
- f 2.7
- 4.1
— 6.1
+ 1.0
- 0.8
— 2.0
— 7.0
-14.9
Stocks
Stock
on Hand Turnover
Aug. 31, ’ 38 Jan. 1, to
comp, with Aug. 31,
Aug. 31/37 1938 1937
— 2.1% 1.74 1.54
— 15.8
1.80 1.68
2.43 2.62
— 11.5
— 12.4
1.96 1.99
— 6.5
1.45 1.56
— 17.6
1.96 2.08
2.55 2.45
— 17.0
— 17.8
1.85 1.61
— 17.4
1.84 1.70
— 15.3
2.34 2.28
Percentage of accounts and notes receivable out
standing August 1, 1938, collected during August, by
cities:
Installment
Accounts
Fort Smith............ %
Little Rock.... 13.8
Louisville ..... 12.3
Memphis ....... 24.9
Pine B lu ff..............
Excl. Inst’l
Accounts
34.8%
35.3
51.7
39.2
29.3
Installment Excl. Inst’l
Accounts
Accounts
45.1%
Quincy .................. 95
50.2
St. Louis....... 18.4
25.6
Springfield ............
51.3
Other Cities .. 13.7
45.7
8th F. R. Dist. 17.2
and the first half of September increased in about
the expected seasonal amount, and was the highest
for any similar period this year. With the exception
of grain and grain products, however, there were de
creases in all freight classifications as compared with
the preceding three years. The St. Louis Terminal
Railway Association, which handles interchanges for
28 connecting lines, interchanged 73,766 loads in
August, as against 77,141 loads in July and 95,935
loads in August, 1937. During the first nine days
of September the interchange amounted to 21,297
loads, which compares with 21,392 loads during the
corresponding period in August and 24,759 loads dur
ing the first nine days of September, 1937. Passenger
traffic of the reporting lines in August decreased 13.5
per cent in the number of passengers carried and
12.0 per cent in revenue as compared with the same
month a year earlier. For the entire country, loadings
of revenue freight for the first 36 weeks this year,
or to September 10, totaled 20,112,166 cars, against
26,642,409 cars for the corresponding period in 1937
and 24,034,617 cars in 1936. Estimated tonnage of
the Federal Barge Line between St. Louis and New
Orleans in August was 257,300 tons, against 228,937
tons in July and 180,847 tons in August, 1937; cumu
lative tonnage for the first eight months this year
was 1,604,466 tons, as against 1,164,452 tons for the
comparable period in 1937.
AG R IC U LTU RE
Receipts from the sale of principal farm products
of farmers in states including the Eighth District
during the period January-July, 1936, 1937, 1938 and
during July, 1937, and 1938 are given in the follow
ing table:
(In thousands
o f dollars)
_____ July______
1938
1937
Indiana ............... $ 25,694 $ 29,915
43,813
52,164
Illinois .................
Missouri .............
26,461
31,959
Kentucky ...........
11,216
11,581
Tennessee ...........
7,382
8,983
Mississippi .........
2,875
4.610
4,163
5,205
Arkansas .............
Totals ............. $121,604
Specialty Stores — August results in men’s fur
nishings and boot and shoe lines are shown in the
following table:
Net Sales
August, 1938
8 mos. ’ 38
compared with
to same
July, 1938 Aug. 1937 period 1937
Men’s Furnishings.. + 1.0% — 0.1% — 14.5%
Boots and Shoes.... + 5.7
— 4.3
— 0.3
Stocks
Stock
on Hand Turnover
Aug. 31/38 Jan. 1, to
comp, with Aug. 31,
Aug. 31/37 1938 1937
— 17.7%
1.46 1.62
— 21.9
4.54 4.28
Percentage of accounts and notes receivable out
standing August 1, 1938, collected during August:
Men’s Furnishings................. 25.9%
Boots and Shoes................... 35.5%
TR A N SPO R TA TIO N
According to officials of railroads operating in
this district, freight traffic handled during August
Page 4
$144,417
Cumulative for 7 months
1938
1937
1936
$142,416
256,009
122,997
86,213
61,037
41,965
37,334
$161,928
271,463
131,782
87,458
63,733
51,056
43,854
$142,504
243,493
124.802
60,106
48.555
30 "*75
29,786
$747,971
$811,274
$679,621
Farming Conditions — Taken as a whole, crop
prospects in the Eighth District underwent no marked
change from July to August, and, according to the
U. S. Department of Agriculture, agricultural depart
ments of the several states and other sources of infor
mation, early indications for large yields of the prin
cipal productions were well maintained. With the
exception of winter wheat, all important field crops
are expected to give larger per acre yields than the
average during the 1927-1932 period. The Govern
ment's September 1 report showed moderate increases
from a month earlier on cotton, corn, oats, tame hay,
potatoes and several of the less important crops.
The winter wheat estimate was unchanged and there
was a decline in indicated production of tobacco.
Tree fruits made a less favorable showing, the fore
cast being for smaller production than a year ago
and average. Truck crops harvested have totaled
about 9.0 per cent above the 10-year average. Pros
pects for bumper feed and forage crops remained
unimpaired. The farm labor supply continued ade
quate to excessive with wage scales, particularly in
the cotton sections, below a year ago. The trend of
prices continued downward. As of September 3 the
farm products group of the Bureau of Labor Statis
tics index stood at 67.1 per cent of the 1926 average,
a decrease of 0.2 per cent from the preceding week
and comparing with 68.7 per cent on August 6; 84.6
per cent on September 4, 1937; 82.1 per cent on
September 5, 1936 and 79.9 per cent on September
7, 1935.
Corn — Prospects for corn in this area are un
evenly fair to good, and at mid-September a very
large portion o f the crop was safe from frost damage,
owing to rapid maturity incident to the unusually
high temperatures during the early part of the month.
Production in the Eighth District on acreage grown
for all purposes—grain, silage, hogging and grazing—
is estimated by the Government in its September 1
report at 324,860,000 bushels. This is an increase
of 1,177,000 bushels over the August 1 forecast and
compares with 363,227,000 bushels harvested in 1937
and the 15-year average of 329,752,000 bushels.
Cotton — Prospects for the cotton crop improved
from July to August in all states of the district ex
cept Missouri. In its report based on conditions as
of September 1, the U. S. Department of Agriculture
estimates the total Eighth District yield at 3,131,000
bales, an increase of 110,000 bales over the August 1
forecast. This compares with 4,891,000 bales har
vested in 1937 and the 15-year (1923-1937) average
of 2,881,000 bales. The crop made favorable progress
during the first half of August, but during the last
ten days there was marked deterioration in many
sections, occasioned in part by weevil and worm dam
age and in greater degree by very hot, dry weather
which blighted the poorly rooted, sappy plant. The
plant has opened rapidly, and at mid-September pick
ing and ginning were general. Latest reports indi
cate that turn-out at gins is running high, but slightly
below last year’s unprecedented yield of lint from
given poundage of seed cotton. Relatively little new
crop cotton is being sold, producers being disposed to
await clarification of terms of the Government loan.
Considerable acreage has been plowed under by farm
ers in order to keep within their A.A.A. acreage
allotments. As indicating the rapidity with which
cotton is moving to the gins, combined receipts at
Arkansas and Missouri compresses from August 1 to
September 9 totaled 160,704 bales, as compared with
81,590 bales during the like interval last year. Stocks
on hand as of September 9 totaled 923,934 bales,
against 218,153 on the corresponding date in 1937.
Prices of raw cotton declined to the lowest point of
the season.
Fruits and Vegetables — A measurable increase
in the production of principal commerical truck crops
over 1937 and the 10-year (1927-1936) average is
indicated for states of this district. Growing condi
tions generally through the season were auspicious for
vegetables and, in the case of some species, yields per
acre are close to the highest of record. Fruit pro
duction, on the other hand, is below that of last
year and the average. Apple and peach crops were
heavily damaged by spring freezes, and since, by
fungus and insect pests. The U. S. Department of
Agriculture in its September 1 report estimates the
apple crop in states including the Eighth District at
7.339.000 bushels, against 26,669,000 bushels in 1937
and the 10-year average of 13,257,000 bushels;
peaches, 6,241,000 bushels, against 10,238,000 bushels
in 1937 and the 10-year average of 6,552,000 bushels;
pears, 1,889,000 bushels, against 3,379,000 bushels
in 1937 and the 10-year average of 1,900,000 bushels;
grapes, 26,050 tons, against 44,930 tons in 1937 and
the 10-year average of 31,930 tons; sweet-potatoes,
21.429.000 bushels, against 21,029,000 bushels in 1937
and the 10-year average of 18,163,000 bushels; pea
nuts, 40,975,000 pounds, against 30,515,000 pounds in
1937 and the 10-year average of 36,006,000 pounds.
The yield of white potatoes in the district proper is
forecast at 14,194,000 bushels, as against 12,716,000
bushels harvested in 1937 and the 15-year (1923-1937)
average of 13,506,000 bushels.
Livestock — The high condition of livestock gen
erally throughout the district which marked earlier
months this year was well maintained during August
and the first half of September. Abundant feed sup
plies in both 1937 and 1938 are reflected in increased
numbers of meat animals, especially in sections where
herds were curtailed by drouth in 1934 and 1936.
Quite generally the number of hogs on farms show
an increase this season. Present indications are for
increased cattle feeding operations this fall and winter.
For the most part pastures have been unusually favor
able and continue to furnish good feed in many
sections. Production of tame hay in the district is
forecast by the U. S. Department of Agriculture at
6.842.000 tons, against 6,162,000 tons harvested in
1937 and the 15-year (1923-1937) average of 6,486,000 tons. Influenced by these conditions, milk pro
duction per cow on September 1 averaged 12.4
pounds, the highest for that date in the 14 years of
Page 5
record, and comparing with 11.6 pounds a year earlier
and the 10-year average of 11.4 pounds.
Receipts and shipments at St. Louis as reported
by the National Stock Yards were as follows:
Receipts
July,
Aug.,
Aug.,
1938
1938
1937
Cattle and Calves......... 159,441 133,615 198,719
Hogs ............................. 181.713 174,500 126,231
Horses and Mules....... 2,747
1,391
3.829
Sheep ........................... 94,234 108,697 133,509
Shipments
Aug.,
July, Aug.,
1938
1938
1937
97,682 87,653 137,565
102,205 109,996 71,578
2.500
1,157
3.824
30,049 36,828 66,130
Totals ....................... 438,135 418,203 462,288
232,436 235,634 279,097
Tobacco — In its report based on conditions as
of September 1, the U. S. Department of Agriculture
estimates the Eighth District tobacco crop at 285,932,000 pounds, a decrease of 5,414,000 pounds under
the August 1 forecast and comparing with 301,156,000
pounds produced in 1937 and the 15-year (19231937) average of 287,280,000 pounds. The decline
in prospects from July to August occurred principally
in the dark fired districts and was attributable to
wildfire, a fungus disease caused by excessive rain
fall prior to harvesting the crop. The burley crop has
come through in relatively good condition. Cutting
and housing has been about completed and curing is
progressing satisfactorily. Reports relative to the
one sucker crop are spotty and irregular, both as to
quantity and quality. Harvesting of this type had
been about completed in the third week of September.
C O M M O D ITY PRICES
Range of prices in the St. Louis market between
August 15, 1938, and September 15, 1938, with closthe latter date and on September
Low
High
Wheat
*Sept.................. p<
*Dec....................
*May .................
No. 2 red winter
No. 2 hard “
Corn
*Sept...................
*Dec....................
*May ...... ...........
No. 2 mixed....
No. 2 white.....
Oits
*Sept...................
*Dec....................
*May .................
No. 2 white.....
Flour
Soft patent....... p
Spring “ .......
Close
Sept. 15, 1938
$
Sept. 15, 1937
5 .6854
.6 8 ^
.707/g
.6854
.72 y2
$ .617/8
.63
.645/g
.65
.65 54
.53*/2
.513^
.53 3/4
.53 ^
.54
.49 y4
.48
.50
.48
.50
.52
.50
.5254
.5354
.54
1.04
.6354
.65
1.07
1.09
.2654
.265/s
.2 7H
.2854
.23*4
.2 3tf
.2454
.26
.2654
.25^
.26 ^
•28J4
.3254
.307/s
.32
.3254
3.75
5.75
9.30
3.25
5.10
6.00
.64^
.6SH
667/s
.68
.69
3.40@3.70
5.10(3)5.40
7.25@9.10
$
1.03
1.0454
1.0654
1.08
1.0954
5.45@ 5.95
7.05@ 7.45
10.25@12.60
*Nominal quotations.
W H ISK E Y
Developments in the whiskey industry during
August indicated no change worthy of note as con
trasted with the depressed conditions which have
obtained in recent months. Certain reports reflect
a slight strengthening in values of bulk whiskey, with
prices a shade higher than in July. On the other
hand, many sales are reported at figures below cost
of production. It is reported that certain manu
facturers dealing in bulk liquor only and without
Page 6
adequate selling outlets will not reopen their distil
leries. These bulk distilleries represent principally the
smaller units. One concern having in storage approxi
mately 55,000 barrels of whiskey has announced that
it will dispose of its stock and liquidate its business.
Production has been heavily reduced and this has had
the effect of partly correcting conditions of over
production existing in the market. As of mid-September only five of the 63 distilleries in Kentucky were
active, and these were on part-time schedules.
BUILDIN G
The dollar value of permits issued for new
construction in the five largest cities of the district
in August was 49.3 per cent greater than in July
and 19.2 per cent more than in August, 1937. Accord
ing to statistics compiled by the F. W. Dodge Cor
poration, construction contracts let in the Eighth
District in August amount to $22,666,000 which com
pares with $14,214,000 in July and $16,160,000 in
August, 1937. Building figures for August follow :
(Cost in
thousands)
Evansville .......
Little Rock.......
August Totals..
July
“ ..
June
“ ..
New Construction
Cost
Permits
1938
1937
1938 1937
15
6 $ 73 $ 210
364
20
126
315
431
92
228
196
461
286
280
25
413
986
295
283
668
650
770
702
573
638
Repairs, etc.
Permits
Cost
1938
1937
1938 1937
$ 43
$134
103
184
37
98
54
30
33
269
44
213
46
139
91
91
84
180
147
169
1,704
1,998
2,987
2,031
1,360
1,738
531
529
580
711
684
815
377
287
334
570
624
549
CONSUM PTION OF E LE C TR IC ITY
Public utilities companies in six large cities of
the district report consumption of electric current by
selected industrial customers in August as being 5.6
per cent greater than in July and 10.8 per cent less
than in August, 1937. Detailed figures follow:
Aug.,
No. of
Custo
1938
mers K.W .H.
Evansville .. ..... 40
2,043
2,364
Little Rock ..... 35
Louisville .... ... 82
8,861
..... 31
1,976
763
Pine B luff .. ..
20
St. Louis .... „ . 204
26,669
(K .W .H .
in thous.)
.....412
42,676
Aug.,
July,
1938
1937
K.W .H. K.W .H.
2,559
3,078
2,264
2,398
7,957
9,938
2,231
1,805
552
597
29,651
25,247
August, 1938
compared with
July, 1938 Aug., 1937
-20.2%
— 33.6%
— 1.4
4- 4.4
f-11.4
— 10.8
— 11.4
- 9.5
+ 38.2
-27.8
- 5.6
— 10.1
40,429
+
47,848
5.6
— 10.8
LIFE INSURANCE
Sales of new, paid-for, ordinary life insurance
in states including the Eighth District during Au
gust, the preceding month, and a year ago, together
with the cumulative totals for the first eight months
this year and the comparable period in 1937 are
shown in the following table:
(In thousands
1937
of dollars)
1938
1938
Arkansas ...... ,$ 2,854 $ 3,029 $ 3,701
43,735
. 37,149
37,603
13,216
, 10,283
10,996
Kentucky ...... .
5,239
4,962
6,827
3,250
Mississippi ....
3,297
2,610
16,428
. 15,651
15,483
8,650
Tennessee ......
6,099
6,287
. 80,572
United States.. 470,917
80,970
457,224
Cumulative Totals
1938
1937
$ 25,554 $ 31,633
322,573
397,941
90,855
115,993
47,301
51,795
24,443
28,760
129,672
156,455
53,943
68,170
Cumul.
change
— 19.2%
— 18.9
— 21.7
— 8.7
— 15.0
— 17.1
— 20.9
694,341
850,747 — 18.4
95,807
546,067 3,972,034 4,950,941 — 19.8
BANKING AND FINANCE
The Eighth District banking and financial status
during the past thirty days developed little change
worthy of note as contrasted with the preceding
several months. During August the demand for
credit from mercantile and manufacturing sources
was quiet, with liquidation of previous loans generally
greater than new commitments and renewals.
Throughout the period there was a steady reduction
in bankers' portfolios of commerical paper purchased
in the open market, while loans to finance the pur
chase of stocks and bonds increased. Since the first
week in September there has been a noticeable in
crease in borrowings at commerical banks, accounted
for principally by requirements in connection with
the harvesting and movement of the cotton and
tobacco crops. Because of the depressed price of
wheat, the dollar volume of borrowings by grain
handling and flour milling interests as of mid-Septem
ber was reported below that at the same time last
year and during the past several seasons. Quite
generally through the district inquiries for funds to
finance livestock operations continue in good volume.
Member Banks — Gross deposits of reporting
member banks in the principal cities, which have been
moving irregularly upward since early June, set a
new high record for the year on September 14. Be
tween August 17 and September 14, total loans and
investments of these banks increased 0.4 per cent,
the gain being confined to loans, investments showing
a slight decrease. Reserves increased 5.1 per cent
and were about one-fourth larger than a year ago.
Reflecting largely withdrawals by country banks from
their city correspondents to satisfy agricultural re
quirements, the due from banks item receded 5.3 per
cent, but as of September 14 was still 58.5 per cent
larger than on the corresponding report date in 1937.
Statement of the principal resource and liability
items of the reporting member banks follows:
(In thousands of dollars)
Sept. 14,
1938
Aug. 17,
1938
Sept. 15,
1937
Loans— total .................................................... $287,467 $284,005 $313,690
174,612
192,504
Commercial, industrial, and agricultural*.. 177,459
11,701
4,858
Open market paper.......................................
4,660
5,891
4,837
Loans to brokers and dealers.............. ......
5,241
12,389
12,705
Other loans to purchase or carry securities 12,667
47,952
45,869
Real Estate loans.......................................... 47,819
7,554
6,420
Loans to banks..............................................
6,102
37,782
32,621
Other loans* .............................. ................... 33,519
352,046
370,603
Investments— total ....7..................................... 369,486
205,495
209,916
U. S. Gov’t obligations................................. 207,833
45,735
63,117
Obligations guaranteed by U. S. Gov’t..... 61,455
100,816
97,570
Other securities ............................................ 100,198
882,352
928,455
Gross deposits ................................................ 946,159
692,203
736,248
Demand deposits .......................................... 754,272
190,149
192,207
Time deposits ................................................ 191,887
*Including both loans “ on securities” and “ otherwise secured and
unsecured” .
Above figures are for 24 member banks in St. Louis, Louisville^
Memphis, Little Rock and Evansville. Their resources comprise approxi
mately 62.0% of the resources of all member banks in this district.
Aggregate amount of savings deposits held by
selected member banks on September 7 was 0.1 per
cent greater than on August 3 and 1.8 per cent in
excess of the total on September 1, 1937.
Interest rates remained practically unchanged
at the record low levels which have obtained in recent
months. At downtown St. Louis banks rates charged
as of the week ended September 15 were as follows:
Customers' prime commerical paper, \y2 to 5 per cent;
collateral loans, 2 to 6 per cent; loans secured by
warehouse receipts, 1 to 5 per cent; interbank loans,
3 to 4 per cent and cattle loans 4 to 6 per cent.
Federal Reserve Operations — The volume of
the major operations of the Federal Reserve Bank
of St. Louis (including its Louisville, Memphis and
Little Rock branches), during August, 1938, is indi
cated by the following figures:
Pieces
Amounts
Checks (cash items) handled.................................. $ 5,032,325 $977,858,700
Collections (non-cash items) handled.................
87,349
26,828,579
Transfers of funds..................................................
4,592
237,203,301
31,266,082
Currency and coin received and counted............. 20,539,744
Rediscounts, advances and commitments.............
20
590,000
New issues, redemptions, and exchanges of secur
ities as fiscal agent of U. S. Govt., etc............
11,088
8,686,087
Bills and securities in custody— coupons clipped
8,458
...................
Changes in the principal assets and liabilities of
this bank appear in the following table:
Sept. 20,
1938
(In thousands of dollars)
59
Industrial advances under Sec. 13b..... $
345
Other advances and rediscounts...........
2
Bills bought (including participations)
U. S. securities........................................ 115,463
115,869
Total earning assets............................
346,082
Total reserves
281,769
174,025
Industrial commitments under Sec. 13b
Ratio of reserve to deposit
and F. R. Note liabilities.................
Aug. 20,
1938
150
140
2
114,411
114,703
$
326,297
263,625
171,686
Sept. 20,
1937
253
601
85
111,385
112,324
$
290,974
217,127
180,757
639
585
1,037
75.9%
75.0%
73.1%
Following are the rates of this bank for accom
modations under the Federal Reserve Act:
(1) Rediscounts and advances to member banks, under
Sections 13 and 13a...................................................... 1^2% per annum
(2) Advances to member banks, under Section 10b...........2 % per annum
(3) Rediscounts, purchases, and advances to member
banks, nonmember banks and other financing in
stitutions under Section 13b:
(a) On portion for which such institution obligated..3^2 % per annum
(b) On remaining portion............................................ 4 % per annum
(4) Commitments not exceeding six months to member
banks, nonmember banks and other financing in
stitutions, to rediscount, purchase, or make ad
vances, under Section 13b.......................................... Vz% flat.
(5) Advances to established industrial or commercial ( 4 % to
businesses, under Section 13b............................... ( 5j^% per annum
(6) Advances to individuals, firms and corporations,
including nonmember banks, secured by direct
obligations of United States under Section 13.......4 % per annum
Debits to Individual Accounts — The follow
ing comparative table of debits to individual accounts
reflects spending trends in this district:
Aug. 1938 comp, with
Jul. 1938 Aug. 1937
(In thousands
Aug.,
of dollars)
1938
East St. Louis and Natl.
Stock Yards, 111...$ 36,249
El Dorado, Ark....
5,730
Evansville, Ind...... 24,202
Fort Smith, Ark.... 10,250
Greenville, Miss. ..
3,646
Helena, Ark...........
1,363
Little Rock, Ark.... 29,260
Louisville, Ky....... 136,161
Memphis, Tenn...... 86,312
Owensboro, Ky......
5,587
Pine Bluff, Ark....
6,462
Quincy, 111..............
7,591
St. Louis, Mo........ 491,080
Sedalia, Mo............
1,747
Springfield, Mo...... 12,816
Texarkana,Ark.-Tex. 6,069
July,
1938
Aug.,
1937
$ 34,492
5,177
28,975
10,386
3,761
1,294
30,822
142,067
93,305
5,379
6,647
7,179
547,020
1,755
13,467
6,904
$ 37,816
4,943
34,038
10,725
3,849
1,453
32,754
150,903
99,844
6,162
7,878
8,151
567,750
1,991
14,783
7,600
+ 5.1%
+ 10.7
— 16.5
— 1.3
— 3.1
+ 5.3
— 5.1
— 4.2
— 7.5
+ 3.9
— 2.8
+ 5.7
— 10.2
— 0.5
— 4.8
— 12.1
Totals ................ $864,525
$938,630
$990,640
— 7.9
(Completed September 22, 1938)
— 4.1%
+ 15.9
— 28.9
— 4.4
— 5.3
— 6.2
— 10.7
— 9.8
— 13.6
— 9.3
— 18.0
— 6.9
— 13.5
— 12.3
— 13.0
— 20.1
— 12.7
Page 7
N A T I O N A L SUMMARY OF BUSINESS CONDITIONS
BY BOARD OF GOVERNORS OF FE D E R A L R E SE RV E SYSTEM
Industrial activity increased considerably in August and advanced
further in September. Factory employment and payrolls also showed a
substantial rise in August, and distribution of commodities to consumers
increased seasonally.
IN D U S T R IA L PRODUCTION
Index of physical volume of production, adjusted for
seasonal variation, 1923-1925 average = 100. By months,
January, 1934, through August, 1938. Latest figure 88.
CONSTRUCTION CONTRACTS AWARDED
Three-month moving averages of F. W . Dodge data for
value of contracts awarded in 37 Eastern States, ad
justed for seasonal variation. Latest figures based on
data for June and July and estimate for August, 1938.
M E M B E R EANK R E SER VES AND RELATED ITEM S
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
Production — Volume of industrial production showed a further con
siderable increase in August, and the Board’s seasonally adjusted index
rose from 83 to 88 per cent of the 1923-1925 average. In manufacturing,
increases in output were general except in the automobile industry where
there was a sharp seasonal decline as plants were closed for inventory
taking and for preparations for the shift to new model production. At
steel mills, where activity had risen considerably in July, there was a
further advance in August and production was at an average rate of 42
per cent of capacity as compared with 35 per cent in the previous month.
Output of lumber and plate glass also increased. In the textile industry
the sharp advance that had been underway since early summer continued.
Mill consumption of wool and cotton increased further, and deliveries of
rayon were maintained at the high level reached in July. Shoe production
showed a further increase and activity at meat-packing establishments
showed less than the usual seasonal decline. Production of bituminous
coal and crude petroleum increased somewhat further. In the first three
weeks of September steel ingot production continued to increase, while
automobile production remained at the low level reached in August. Out
put of crude petroleum was reduced as wells in Texas were closed on
both Saturdays and Sundays, whereas in August only Sunday closings
had been required.
Value of construction contracts awarded in 37 Eastern States increased
considerably in August, according to figures of the F. W. Dodge Corpora
tion. The increase was in publicly-financed projects and reflected partly
the expansion of the Public Works Administration program and the
award of the first contract for the slum clearance projects of the United
States Housing Authority. Awards for private residential building were
at about the same rate as in July and close to the level reached in the
spring of 1937. Commercial building, which had increased in July, owing
to the award of a contract for a large office building, declined in August
to about the level of other recent months.
Employment — Factory employment and payrolls showed a marked
rise from the middle of July to the middle of August, while in nonmanu
facturing industries employment showed little change. The number em
ployed at factories producing durable goods increased for the first time
since the summer of 1937 and in the nondurable goods industries, where
employment had increased in July, there was a further rise. Most leading
industries reported increases in the number of workers.
Distribution — Distribution of commodities to consumers increased
seasonally from July to August. Department store sales showed about
the usual rise and mail order sales increased, while variety store sales
declined. In the first half of September sales at department stores in
creased more than seasonally. Freight-car loadings increased somewhat
further in August, reflecting chiefly larger shipments of miscellaneous
freight.
Wednesday figures, January 3, 1934, through September
21, 1938.
MONEY RATES IN NEW YORK C ITY
Commodity Prices — Prices of silk and rubber showed some advance
from the middle of August to the third week of September and there were
also increases at the end of the period in nonferrous metals. Wheat
prices fluctuated considerably but showed little net change in this period.
Prices of cotton and wool declined somewhat, and there were further
decreases in prices of some finished industrial products.
Bank Credit — A heavy inflow of gold from abroad during the five
weeks ending September 21 resulted in an increase of over $500,000,000 in
the monetary gold stock. Member bank reserves were increased by Treas
ury payments for gold acquired, but were sharply reduced in the last
week of the period by payments to the Treasury for cash purchases of
new securities and quarterly income tax collections. As a consequence of
these transactions, excess reserves, which had increased to $3,130,000,000,
were reduced to $2,740,000,000 on September 21. Total loans and invest
ments of reporting member banks in leading cities increased sharply during
August and the first three weeks of September, reflecting chiefly an in
crease in holdings of United States Government obligations. Balances
held in New York City for foreign banks showed a substantial increase.
Discount rate of Federal Reserve Bank; weekly averages
of daily yields on 3 to 5-year Treasury notes and on
Treasury bonds callable after 8 years, and weekly aver
age of daily dealers’ quotations on 90-day Treasury bills
or rate on new bills offered in week. For weeks ending
January 6, 1934, through September 17, 1938.
Page 8
Money Rates and Bond Yields — The average yield on long-term
Treasury bonds increased in September from the low point reached at the
end of August. The average rate on new issues of Treasury bills in
creased to 0.11 per cent, compared with 0.05 per cent. Yields on high-grade
corporate bonds increased slightly.
@FedFRASER