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BUSINESS CONDITIONS Monthly Review of Agriculture, Industry, Trade and Finance Released for Publication on Afternoon of September 30, 1940 FEDERAL RESERVE BANK OF View of Illinois River from Pere Marquette State Park near Grafton, Illinois. ST. LOUIS SUMMARY OF EIGHTH DISTR ICT Sept. 1, 1940 comp, with Agriculture: 1939 Av. 1923-39 Estimated yield of 7 crops......................— 9.8%— 8.7% A ug. 1940, comp, with Livestock July, 1940 A ug., 1939 Receipts at National Stock Yards..........— 10.9%— 2.4% Shipments from aforesaid Yards............— 11.1 + 2.9 Production and Distribution: Sales by mfrs. and wholesalers..............-f 9.9 -f 6.0 Department store sales..............................+ 23.7 + 11.9 Car loadings............................................... 4- 5.5 + 0.5 Building and Construction: .j . . 1 . /N u m b er... + 4.3 + 20.1 Bldg. permits, incl. repairs \ Cost........... + 461 _ n 6 Value construction contracts awarded.. + 19.8 + 24.4 Miscellaneous: 1 r .« r Number..............-f- 27.3 Commercial failures-j Liabilities............+ 52.3 Consumption of electricity........................— 0.9 Debits to individual accounts..................— 8.7 Life Insurance Sales................................. — 6.9 -j- 44.8 +107.8 + 6.6 + 5.2 + 22.9 Sept. 11, ’40 comp, w ith Member Banks (24): Aug. 14,’40 Sept. 13/39 Gross deposits ........................................... -f* 0.5%+ 5.6% Loans...........................................................1*0 -f- 3.6 Investments.................................................— 1.8 + 5.4 H R O U G H A ugust industry and trade in the Eighth D istrict continued the improvement which took place in greater or lesser degree during the three m onths immediately preceding, and reports covering the first half of September indicate the upswing has proceeded at an acceler ated pace. The expected seasonal expansion began earlier and was more pronounced in business as a whole than has been the case in a num ber of years. Demand for many descriptions of merchandise was more diversified than heretofore, with volume meas urably above th at at the same tim e a year ago. In the rural areas good crops and prospects for larger farm income have had a stim ulating effect on trade, while in the large cities the pickup in indus trial activity has reacted favorably upon both retail and wholesale distribution. D epartm ent store sales in the principal cities during A ugust increased 23.7 per cent over July, which was considerably more than the expected seasonal gain, and were 11.9 per cent above the August, 1939, total. For the first eight months cumulative total exceeded that of the like interval in 1939 by 6.9 per cent. Indicating the response to special sales held in St. Louis and other cities, the volume of business in the week ended September 7 was 44.4 per cent larger than for the same week a year ago, and for the four weeks end ing on that date an increase of 18.7 per cent over a year earlier was shown. Reflecting heavy routine requirem ents and actual and anticipated orders for the national defense pro gram, production of durable and nondurable goods T Page 2 rose during A ugust to the highest levels since last December. Of the m anufacturing lines investigated by this bank, relatively the m ost favorable showing was made by those producing heavy materials, notably iron and steel, engines, machine tools, elec trical supplies, railroad equipment and the general run of building materials. Production of ingots at steel mills in the area rose to the highest point since last January. Shipments of pig iron to district industries and total melt in A ugust were reported the largest for the m onth since 1937. O utput of bitum inous coal at mines in this gen eral area during A ugust was 23 per cent and 19.6 per cent greater, respectively, than a m onth and a year earlier. Petroleum production declined some what, but owing to contributions from new Illinois fields was still in large volume and considerably greater than for A ugust in any previous year. After receding in July, lumber production increased sharply in A ugust and the upw ard trend extended through the first half of September. As in recent months, new orders and shipm ents of lumber con tinued well above current output. Reflecting the higher rate of industrial activity, initiation of several m ajor Government defense pro jects, increased numbers of workers in agriculture incident to fall harvests and in m ining operations, district employment as a whole showed marked im provem ent between the first of A ugust and midSeptember. As elsewhere in the country, Eighth D istrict agricultural prospects underw ent distinct improve ment during A ugust and, according to the U. S. D epartm ent of A griculture’s Septem ber 1 report, outlook is for ample to abundant yields for all the principal crops. Prospective yields of cotton, corn, hay, potatoes, legumes and many less im portant productions, increased from July to August. An exception was tobacco, combined yield of all types of which is expected to be below average, and in the case of burley, the smallest in a num ber of years. The condition of livestock generally m ain tained the high average which has obtained in the past eighteen m onths or more. Recent precipitation has put the soil in good condition, and preparation for planting fall crops is up to seasonal schedule. Commercial failures in the E ighth Federal Re serve D istrict in A ugust, according to Dun and Bradstreet, numbered 42 with liabilities of $638,000, as against 33 defaults in July w ith liabilities of $419,000 and 29 insolvencies for a total of $307,000 in August, 1939. D E TA IL ED SU R V E Y OF DIS TR ICT M A N U F A C T U R IN G A N D W H O L E SA L IN G Lines of Commodities N et Sales Stocks A ugust, 1940 Aug. 31, 1940 D ata furnished by Bureau of Census, compared with comp, with U . S. Dept, of Commerce. July, ’40 A ug., ’39 Aug. 31, 1939 A utom otive S u pplies................................ Boots and S h oes........................................ Drugs and C hem icals.............................. Dry G oods................................................... Electrical S u pplies................................... Furniture..................................................... Groceries....................................................... H ardw are..................................................... Tobacco and its P rodu cts....................... M iscellaneous.............................................. + 9.8% — 15.4 + 12.6 + 84.5 — 0.3 + 17.6 + 9.4 + 10.9 — 3.1 + 9.9 + 6.1% + 1.5 + 0.1 — 5.5 + 2 8 .8 — 1.5 — 8.2 + 2 7 .7 + 5.4 + 6.0 + 26.9% •—•8.4* +- 3 0,. 6 + 5.6 + 4.7 + 4 9 .2 + ’2.’3 Automobiles—Combined passenger car, truck and taxicab production in the U nited States in A ugust totaled 75,873, as against 218,746 in July and 99,868 in A ugust, 1939. Iron and Steel Products — Activities in the iron and steel industry during A ugust and the first half of Septem ber continued the upward trend of recent m onths, and were at the highest rate for any sim ilar period since 1937. In spite of the high rate of production and shipm ents at mills and foundries, backlogs of orders continued to augment, and in the case of some commodities delivery delays were further lengthened. W hile ordering of defense materials, direct and indirect, increased moderately, bulk of improvem ent was attributable to current domestic demands, which are reported well diversi fied, both as to users and commodities. Schedules at steel casting plants, particularly those w orking on orders from railway equipment, engine, m achinery and machine tool builders, were advanced to the highest point of the year. M anu facturers of stoves and heating apparatus report A ugust and early September shipm ents well above those of the same tim e a year and two years earlier. Jobbing foundries increased operations, and as of mid-September averaged four to five days per week. Shipments and the melt of pig iron at district foundries in A ugust were approxim ately 8 per cent higher than in July. W hile books of blast furnace interests were opened for fourth quarter, little iron was bought for th at period, purchases being mainly for spot delivery. Current steel prices were also extended into the fourth quarter. W ith the excep tion of a sharp advance in scrap iron early in Sep tem ber, the general price structure showed little change during the past thirty days. A t mid-Sep tem ber steel ingot production at mills in this area was at 80 per cent of capacity, highest since last January, and comparing with 77.5 per cent a m onth earlier and 66.5 per cent a year ago. For the entire country, production of pig iron in A ugust, according to the magazine “Steel,” was 4,234,576 tons, the largest m onthly total since July, 1929, when 4,236,412 tons were produced. O utput in July aggregated 4,060,513 tons and in A ugust, 1939, a total of 2,979,774 tons was produced. Steel ingot production in the U nited States during A u gust was 6,033,037 tons, as against 5,595,070 tons in July and 4,241,994 tons in A ugust, 1939. R E T A IL T R A D E Department Stores — The trend of retail trade in the Eighth D istrict, as reflected in statistics of de partm ent stores in the principal cities which report to this bank, is shown in the following comparative s ta te m e n t : Ft. Smith, A rk .. . L ittle Rock, Ark. Louisville, Ky. . . Memphis, Tenn. . Pine Bluff, A rk.. Quincy, 111............ St. Louis, M o .. . Springfield, Mo. . A ll Other C ities. . 8th F. R. D istrict Stocks N et Sales on Hand A ugust, 1940 8 mos. ’40 Aug. 31/40 compared with to same comp, with J u ly /4 0 Aug. ’39 period’39 Aug. 3 1 /3 9 + 34.8% + 29.4% + 1-1.4% + 0. 1 % + 2 5 .8 + 12.3 — 13.6 + 8.5 + 18.5 + 12.2 + 2.5 + 7.7 + 18.7 + 9.2 + 2.1 + 6.2 + 2 1 .1 — 2.1 0.7 + 12.3 + + 51.0 + 9.8 — 2.0 + 1.4 + 25.2 + 11.4 + 12.0 + 6.5 + 34.2 + 15.3 + 16.1 — 7.4 + 15.1 + 2 7 .2 + 14.2 + 12.6 + 11.9 + 23.7 + 6.1 + 6.9 Stock T urnover Jan. 1, to Aug. 31, 1940 1939 1.81 2.19 2.80 2.19 1.63 2.58 2.84 2.41 2.16 2.64 1.71 2.01 2.68 2.24 1.88 2.52 2.89 2.00 2.12 2.64 Percentage of accounts and notes receivable out standing A ugust 1, 1940, collected during A ugust, by cities : Installm ent E xcl. Instal. A ccounts A ccounts Fort S m ith ..............% L ittle R o c k ... 12.0 L ouisville . . . . 16.9 M emphis . . . . 23.6 37.6% 35.5 48.9 41.4 Installm ent E xcl. Instal. A ccounts Accounts Quincy ..........................% St. L o u i s . . . . . . . 17.9 Other C i t i e s .. .. 14.8 8th F. R. District 17.7 46.8% 52.4 41.6 47.4 Specialty Stores — A ugust results in m en’s fur nishings and boot and shoe lines are shown in the following table: Stocks Stock ___________ N et Sales___________ on Hand A ugust, 1940 8 mos. ’40 Aug. 31,’40 compared with to same comp, with Ju ly,’40 A ug. ’39 period’39 A ug. 3 1 /3 9 M en’s Furnishings + 1 1 .1 % B oots and Shoes. + 2 0 .4 + 2 4 .5 % + 1 1 .0 + 6 .3 % + 3.3 + 1 6 .8 % + 2 0 .5 Turnover Jan. 1, to Aug. 31, 1940. 1939 1.59 4.85 1.65 4.72 Percentage of accounts and notes receivable out standing A ugust 1, 1940, collected during A ugust: M en’s Furnishings. ... . . . . . . .33.9% B oots and Sh oes.....................36.3% M IN IN G A N D O IL Coal — Responding to continued heavy industrial demands, seasonal contracting by retail distributors and a disposition in m any quarters to accum ulate inventories, production of bitum inous coal in A u g ust and early Septem ber was at an unusually high rate. As indicating the desire of industrialists to provide for future requirem ents, bitum inous coal on industrial stock piles on A ugust 1, the latest date for which figures are available, amounted to 37,538,000 tons, an increase of 8.6 per cent over a m onth earlier and of 52.2 per cent over a year ago. Production of bitum inous coal in the U nited States in A ugust increased m easurably over the Page 3 m onth before and a year ago. According to pre lim inary estim ates of the Bitum inous Coal Division, U. S. D epartm ent of the Interior, output am ounted to 39,240,000 tons, as against 36,080,000 tons in July and 35,016,000 tons in A ugust, 1939. Cum ulative tonnage for the first eight m onths this year was 295,345,000 tons, com paring w ith 225,242,000 tons for the like interval in 1939. A t mines in this gen eral area production during A ugust was 22.9 per cent and 19.6 per cent greater, respectively, than a m onth and a year earlier. Cum ulative tonnage to Septem ber 1 was 7.4 per cent larger than during the like period a year ago. O utput of Illinois mines in A ugust was 3,496,144 tons, against 2,797,266 tons in July and 2,884,255 tons in A ugust, 1939. T here were 87 mines in oper ation during A ugust, w ith 23,776 men on payrolls, which compares w ith 81 active mines and 22,295 operatives in July. Petroleum — July output of crude oil in states of the Eighth D istrict was 6.6 per cent less than in June and 50.2 per cent greater than in July, 1939. Cum ulative total for the first seven m onths this year was 94.5 per cent in excess of the correspond ing period in 1939. Stocks on July 31 were 2.5 per cent and 4.9 per cent greater, respectively, than a m onth and a year earlier. Detailed production and stocks by states are given in the following table: P r o d u ctio n ____ (I n thousands of barrels) July, 1940, June, 1940 July, 1939 Stocks , CumulatlY5— July 31, July 31, 1940 1939 1940 1939 A rkansas.............. 2,242 2,119 1,881 14,906 11,645 I llin o is ................ 13,805 15,194 8,737 92,550 42,452 Indiana................ 379 347 115 2,111 517 K e n tu ck y ............ 454 419 503 3,004 3,255 T o ta ls................ 16,880 18,079 11,236 112,571 57,869 1,812 2,025 14,067 13,612 3,658 3,172 1,648 1,377 21,185 20,186 T R A N SP O R T A T IO N The St. Louis T erm inal Railw ay Association, which handles interchanges for 28 connecting lines, interchanged 77,298 loads in A ugust, as against 79,920 loads in July and 76,969 loads in A ugust, 1939. D uring the first nine days of Septem ber the interchange am ounted to 21,358 loads, com paring w ith 22,114 loads during the corresponding inter val in A ugust and 22,991 loads in the first nine days of September, 1939. F or the first eight m onths this year a total of 641,836 loads was interchanged, an increase of 1.9 per cent over the sim ilar period a year ago. For the entire country loadings of revenue freight for the first 36 weeks this year, or to Sep tem ber. 7, totaled 24,145,755 cars, which compares with 21,846,065 cars during the corresponding period in 1939 and 20,112,380 cars in 1938. Estim ated tonnage of the Federal Barge Line between St. Louis and New O rleans in A ugust was 217,200 tons, as against 198,464 tons in July and Page 4 227,887 tons in A ugust, 1939. Cum ulative tonnage for the first eight m onths this year totaled 1,349,038 tons, com paring w ith 1,243,460 tons during the like period a year ago. W H IS K E Y T rade reports indicate a general feeling of optimism and greater confidence in the whiskey industry. Because of recent m ergers and consolida tions of distilling interests, it is believed a stronger position has been created and com paratively little distress liquor is now on the m arket. L argely as a result of this situation, prices are reported to have stiffened in the recent past. A num ber of im portant distillers are planning to increase production during the late fall and w inter, both because of anticipated im provem ent in demand and possibility of increased costs of m anufacture and restriction in use of grain. Both production and consum ption of K entucky bourbon whiskey so far in 1940 are som ew hat ahead of the like period in 1939. A G R IC U L T U R E Combined receipts from the sale of principal farm products and Governm ent benefit paym ents to farm ers in states including the E ighth D istrict during the period January-July, 1938, 1939 and 1940, and during July, 1939 and 1940, are given in the following table: (In thousands of dollars) M isso u r i.. . . . . . . . . M ississippi......... July 1940 1939 $27,890, 46,476 29,384 11,891 9,237 3,605 6,448 134,931 $25,120 44,341 24,847 10,355 7,962 2,679 6,981 122,285 Cumulative for 7 months 1939 1938 1940 $149,762 $163,923 $145,767 295,708 288,442 314,755 131,757 134,945 151,068 100,177 82,454 88,889 71,836 66,913 67,883 59,193 55,669 53,901 51,228 50,397 53,225 859,661 824,587 893,644 Farm ing Conditions — U nder more favorable w eather in A ugust, crop prospects generally in the E ighth D istrict underw ent distinct improvement, according to reports of the U. S. D epartm ent of A griculture, agricultural departm ents of the several states and other informed sources. This upw ard trend in the agricultural position continued during the first half of Septem ber, so th at the outlook as a whole is considerably more prom ising than earlier in the season. Q uite general precipitation in late A ugust served to break the drouth over wide areas and bettered prospects to the extent of about 5 per cent. Yields per acre of the chief productions are now expected to be about 1 per cent higher than last year and 16 per cent above the 10-year (19291938) average. A lthough several im portant crops, including cot ton, corn and legumes, are in danger from early frosts and w et w eather, extensive areas have passed the danger point, and abundant harvests seem al m ost assured. T he tonnage of hay and forage saved may be a new record and will be in excess of cur rent needs. Cotton is expected to yield above half a bale per acre and total yield in this district will be only slightly below the average of the preceding seventeen years. F ru it crops will be below a year ago, but probably ample. Commercial vegetable production will be large, and in this area equal to or slightly higher than in 1939. An exception to the general im provem ent in A ugust was tobacco which deteriorated during the m onth, the Septem ber 1 estim ate being for a crop of all types about 20 per cent below the average of the preceding 17 years. Q uite generally through the district farm sched ules as of m id-Septem ber were well up to the sea sonal average. Soil preparation for planting fall cereals has made good progress, particularly since the recent rains. Despite the fact th at the num ber of persons employed on farm s increased more sharply than usual during A ugust, farm labor is adequate for all requirem ents. Prices of farm prod ucts were stationary during A ugust, but during the final week of th a t m onth and in early Septem ber the trend was quite sharply upward. As of Septem ber 7, the farm products group of the U. S. Bureau of Labor S tatistics’ price index stood at 67.6 per cent of the 1926 average as compared w ith 65.2 per cent on A ugust 10 and 68.1 per cent on Septem ber 9,1939. the 10-year average for th at date. Rains in the early part of A ugust were timely, and particularly bene ficial in the northern stretches of the area. To the south precipitation was som ew hat too abundant, causing shedding, and prospects there are relatively less favorable than elsewhere. Picking has become general in lower A rkansas and Mississippi. There continued to be little trading in old cotton in this territory, which was lim ited largely to medium grades and staples. However, greater inter est was exhibited in new crop cotton for early fall delivery. Owning to lateness of the crop, relatively little actual new crop cotton has appeared in local markets. Prices of spot cotton declined during the first half of September. In the St. Louis m arket the middling grade ranged from 9.40c to 10.35c between A ugust 15 and Septem ber 16, closing at 9.40c on the latter date, which compares w ith 10.35c on A ugust 15 and 8.70c on Septem ber 15, 1939. As indicating lateness of the crop, combined receipts at A rkansas and M issouri compresses from A ugust 1 to Septem ber 13 totaled only 16,830 bales, as against 241,509 bales during the corresponding period a year earlier. Shipm ents during the same interval were 48,161 bales, compared with 83,994 bales a year ago. Stocks on hand as of Septem ber 13 totaled 869,891 bales against 1,551,989 bales on the corresponding date in 1939. Corn — A fter receding in July, corn prospects improved m arkedly in A ugust. Based on Septem ber 1 conditions, the U. S. D epartm ent of A gri culture estim ates the E ighth D istrict yield at 302,378.000 bushels, an increase of 5,026,000 bushels over the A ugust 1 forecast, and com paring with 342.860.000 bushels harvested in 1939 and the 17year (1923-1939) average of 331,104,000 bushels. To the south the crop is free from frost damage, but in the northern counties a considerable acreage is subject to damage from early cold weather. Fruits and Vegetables — Except for m oderate im provem ent in apples, w hite potatoes, sw eetpotatoes and some lesser productions, prospects for fruits and vegetables underw ent little change during August. The apple crop in states of the district is officially estim ated at 5,790,000 bushels, against 9.588.000 bushels in 1939 and the 5-year (1934-1938) average of 6,967,000 b u sh e ls; peaches, 3,772,000 bushels, against 8,999,000 bushels last year and 10year (1929-1938) average of 6,985,000 bushels; grapes, 36,490 tons, against 39,580 tons in 1939 and 10-year average of 33,816 to n s; sw eetpotatoes 18,005.000 bushels, against 16,451,000 bushels in 1939 and 10-year average of 19,050,000 bushels. In the district proper the w hite potato crop is forecast at 13.329.000 bushels, com paring w ith 12,048,000 bushels in 1939 and 17-year (1923-1939) average of 13.446.000 bushels. Cotton — As elsewhere in the country, prospects for cotton in this area improved m arkedly during A ugust, and scattered reports covering the first half of Septem ber indicate continuance of the b etter m ent. In its report as of Septem ber 1, the U. S. D epartm ent of A griculture estim ates the E ighth D istrict crop at 3,326,000 bales, an increase of 326,000 bales over the A ugust 1 forecast, and com paring w ith 3,429,000 bales produced in 1939 and the 17year (1923-1939) average of 2,954,000 bales. The m onth of A ugust was exceptionally favorable for grow th and developm ent of the cotton crop and the Septem ber 1 condition in all states of this dis trict, w ith the exception of M ississippi, was above Livestock — U nder ideal w eather conditions and ample supplies of all descriptions of feed; the con dition of livestock m aintained the high average which ha$ obtained during the past eighteen m onths or more. The condition of pastures varied rather broadly, but as of m id-Septem ber was well above th at obtaining earlier in the season, except in the Page 5 dry areas. Production of tam e hay in the Eighth D istrict is estim ated by the U. S. D epartm ent of A griculture in its Septem ber 1 report at 7,758,000 tons, which compares w ith 7,643,000 tons in 1939 and the 17-year average of 6,585,000 tons. D uring A ugust prices of all livestock advanced substantially, the gains being ascribed to better consumer demand and reduced supplies. As com pared with the preceding month, hog prices were up 15 per cent; beef steers, 9 to 13 per cent; calves, about 21 per cent, while lambs advanced to a lesser degree. W holesale m eat prices were also higher. Production of m eat was slightly higher than in A ugust last year, and w ith the exception of hogs, m arketings of livestock were not greatly different. As forecasting prices, initial sales of E astern Carolina flue cured tobacco were held on Septem ber 3, and with good-sized offerings average price for the first day was $18.36 per cwt. compared with $17.11 per cwt. for the opening day last season. CO M M O D ITY PR IC ES Range of prices in the St. Louis m arket between A ugust 15 and Septem ber 16, 1940, w ith closing quotations on the latter date and on Septem ber 15, 1939, follow s: Close H igh Low Sept. 16, 1940, Sept. 15, 1939 $ $ T o ta ls..............................416,680 467,664 426,733 178,232 200,450 173,207 *Includes only stock shipped from yards for slaughter in other markets or to farms for feeding purposes. W heat *Sept......... .per bu. $ .7 3 V8 *D ec.......... .75 ■7534 * M ay .............. N o. 2 red winter “ •8454 No. 2 hard “ “ .80 Corn *Sept....................... “ •6 1 ^ .5 5 / *D ec...................... “ *M ay. . ................ .5 6 H .6534 N o. 2 m ixed. . . . “ No. 2 w hite. . . . “ .73H Oats .29 *Sept....................... “ .29 *D ec...................... “ *M ay ..................... “ •29 No. 2 w hite. . . . “ .32 Flour Soft paten t.........perbbl. 5.60 Spring “ ......... “ 5.05 M iddling Cotton per lb. .1035 7.45 H ogs on H oof . . per cwt. *Nom inal quotations. Tobacco — Ow ing to dry weather and other handicaps, condition of the tobacco crop in this area declined sharply during August, and as a result production will be the smallest in a number of years. In its Septem ber 1 report, the U. S. De partm ent of A griculture estimates the Eighth Dis trict yield of all types at 228,959,000 pounds, a decrease of 16,098,000 pounds from the A ugust 1 forecast, and com paring with 282,074,000 pounds harvested in 1939 and the 17-year (1923-1939) aver age of 285,401,000 pounds. T he dollar value of perm its issued for new con struction in the five largest cities of the district in A ugust was 68.3 per cent greater than in July and 3.6 per cent less than in A ugust, 1939. According to statistics compiled by the F. W . Dodge Corpora tion, construction contracts let in the E ighth Dis trict in A ugust am ounted to $25,170,000, which compares with $21,016,000 in July and $20,226,000 (revised figure) in A ugust, 1939. Building figures for A ugust follow: Receipts and shipm ents at St. Louis as reported by the National Stock Y ards were as follows: _________Receipts_______ A ug., 1940 July, 1940 Cattle and C alves......... 122,761 131,325 H o g s .................................. 215,704 219,256 Horses and M u les----1,116 733 Sheep ................................ 77,099 116,350 A ug., 1939 ______ Shipments*______ Aug., 1940 July, 1940 134,071 56,195 62,683 203,260, 96,799 100,280 2,729 1,186 1,207 86,673 24,052 36,280 A ug., 1939 63,382 77,569 2,629 29,627 $ .6554 .67 .68 .71 .78 .72 3/8 -73SA .74 .8354 .7 854 •S7H Page 6 .845/8 .89 .8854 .555/8 .5 4 /s .577/8 .6 0 /s .5134 .5 2 % .6454 .5 3 # .543^ .643^ ■72*4 .57 .72 .73V a .257/8 .2834 .285/6 .2654 .275^ .29 H .355/8 .34H .3 5 ^ .40 .29 .315-2 4.50 4.50, .0940 6.35 4.90 @ 5.60 5.75 @ 6 .5 0 4 .90 @ 5 .0 5 .0940 6.49 5.75@ 6.05 .0870 7.74 B U IL D IN G N ew Construction More or less severe drouth conditions obtained during m ost of A ugust and many crops began firing in the fields. As a result num erous growers began harvesting, even though plants were still immature. D uring the latter p art of the month there was gen eral precipitation, which benefited th at part of the crop rem aining in the field. Approximately 45 per cent of the burley crop had been harvested by midSeptember, and about the same proportion of the one sucker crop, and w eather has been fairly favor able for first stages of curing. As a whole, pros pects are rather unfavorable for burley, both as to quantity and quality. However, higher prices are looked for because of the current estim ate for bur ley, sm allest in thirteen years, or about 65 per cent of norm al for K entucky. Recent activity in old crop stocks has m easurably reduced quantities held by dealers. .8254 .8354 ( Cost in thousands) Permits 1940 1939 E vansville. . . . L ittle R ock . . . Louisville M em p h is......... St. L o u is......... Aug. T o ta ls. . . July “ June “ 43 40 159 547 340 1,129 964 808 19 31 134 288 285 757 668 758 Repairs, etc. Cost 1939 1940 $ 119 134 504 757 1,813 3,327 1,977 1,866 Permits 1940 1939 $ 60. 71 1,910 369 1,041 3,451 2,777 1,610 118 87 50 177 199 631 723 628 135 139 42 181 212 709 634 748 1940 Cost 1939 $ 73 72 23 134 20,5 507 647 560 $ 90 53 33 370 340 886 417 428 C O N SU M PT IO N OF E L E C T R IC IT Y Public utilities companies in six large cities of the district report consum ption of electric current by selected industrial custom ers in A ugust as being 0.9 per cent less than in July and 6.6 per cent more than in A ugust, 1939. Detailed figures follow: (K .W .H . in thous.) N o. of A ug., July, Custom 1940 1940 ers K .W .H . K .W .H . E van sville. .,, , 40 L ittle R ock. . . . 34 L ouisville . . . 82 . 31 Pine B lu f f .., , 20 . . . 233 , . 440 4,361 2,467 11,963 2,758 529 30,112 52,190 4,353 2,210 11,284 2,625 611 31,597 52,680 A ug., 1939 K .W .H . 3,957 2,467 9,737 2,462 658 29,679 48,960 A ugust, 1940 compared with July, 1940 A ug., 1939 + 0.2% + 11.6 + 6.0 + 5.1 — 13.4 — 4.7 — 0.9 + 10.2% -0+ 2 2 .9 + 12.0 — 19.6 + 1.5 + 6.6 B A N K IN G A N D F IN A N C E In the E ighth D istrict the banking and financial situation was m arked by a further m oderate increase in demand for credit, which extended quite gener ally through all the principal borrow ing groups. Com m itments of m ercantile and m anufacturing interests were larger in the aggregate, reflecting the usual seasonal borrow ing to finance merchandise for late fall and w inter consumption. Requirem ents for funds to move crops increased noticeably over the preceding th irty days, particularly in the cotton and tobacco producing areas. In num erous instances country banks were reported to be increasing their loans from city correspondents to tide over until crops are m arketed. Ow ing to the large quantities of w heat going into the Government loan, however, borrow ing by grain handling and flour milling inter ests is relatively less than at the same time in m any past seasons. Thus far interest rates have failed to respond to the better credit demand, and rem ained at, or about the low levels which have obtained in recent months. Inquiry for funds to condition livestock for m arket continued in substantial vol ume, being stim ulated by the relatively high price of m eat animals. M ember Banks — In the four-week period ended Septem ber 11, total loans of reporting member banks in the principal cities increased 1.0 per cent and were 3.6 per cent greater than at the corres ponding tim e a year ago. Gross deposits showed little change, but throughout the period continued m easurably higher than a year earlier. Total reserve balances increased 3.9 per cent and as of September 11 were about one-fifth larger than on the corres ponding report date in 1939. There was a slight decrease in the due to banks item, reflecting mainly w ithdraw als of funds by country correspondents to accommodate agricultural borrow ers. Statem ent of the principal resource and liability items of the reporting m em ber banks follow s: (I n thousands of dollars) Sept. S'et>t. 11, 11. 1940 Change from Aug. 14, Sept. 13, A v 1940 1939 769 — 5,738 Commercial, industrial, agricultural loans. .. $182,849 + 9,790 + Open market paper................................................ 348 + 4,872 4,003 + 634 — 1,0,36 L oans to brokers and d ealers....................... Other loans to purchase and carry securities. 12,383 184 — 1,344 281 + 4,202 55,407 + Real E state lo a n s..................................................... — 774 1,995 + 547 Loans to b an ks......................................................... 63,163 + 888 Other lo a n s....................... ........................................ + 11,191 10,800 5,989 Treasury b ills............................................................ + 8,338 38,622 — . 942 — 11,643 Treasury n o tes......................................................... + 6,751 455 U . S. b on ds................ ............................................... 147,846 + Obligations guaranteed by U .S . Governm ent. 71,770 545 + 6,506 169 + 9,502 Other securities......... ............................................. 108,386 + — 4,242 Balances with dom estic banks............................ 178,240 1,164 + 39 ,8 4 5 505,939 9,643 Demand deposits— adjusted*.............................. + + 694 Tim e deposits............................................................ 190,323 606 — , — 5,800 U . S. Government d ep osits................................ ., 15,143 36 Inter-bank deposits................................................ 345,809 — 1,180 + 31,259 B orrow ings............................................................................................................................... *Other than inter-bank and Government deposits, less cash item s on hand or in process of collection. A bove figures are for 24 member banks in St. Louis, Louisville, M em phis, L ittle Rock and E vansville. Their resources comprise approximately 63.3% of the resources of all member banks in this district. The aggregate am ount of savings deposits held by selected m ember banks as of Septem ber 4 was 0.3 per cent less than on A ugust 7 and 0.4 per cent smaller than on Septem ber 6, 1939. Federal Reserve Operations — The volume of the m ajor operations of the Federal Reserve Bank of St. Louis, during A ugust, 1940, is indicated b e lo w : (Incl. Louisville, M emphis, L ittle Rock branches) Pieces Amounts 5,231,820 $1,475,451,221 Checks (cash item s) han dled................................ Collections (non cash items) handled................ 53,944 27,292,793 Transfers of funds....................................................... 4,517 284,139,734 8,508,027 27,317,475 Currency received and counted.............................. Coin received and counted..................................... 11,640,857 1,243,659 Rediscounts, advances and com m itm ents......... 11 440,00.0 N ew issues, redemptions' and exchanges of securities as fiscal agent of U . S. Govt., etc. 13,913 37,266,325 Bills and securities in custody— coupons clipped 8,090 ............................... Changes in the principal assets and liabilities of this bank appear in the following ta b le : Change from Sept. 19, 1940 & 20 Other advances and rediscounts.................. 90 Bills bought (including participations) . . . U. S. securities.................................................... 112.’876 Total earning assets....................................... 112.980 A ug. 19, 1940 -0— 20 -0— 372 — 392 Total reserves.............................................. — 6,239 — 7,699 + 1,380 Sept. 19, -----1939 2 + — 792 — 12,233 — 12,312 + 68,592 + 38,652 + 17,50.4 — — (In thousands of dollars) Industrial commitments under Sec. 13 b .. Ratio of reserve to deposit and F. R. N ote liab ilities......................... 470,849 379,778 200,458 368 81.1% 6 — 0.2% + 56 4.3% Following are the rates of this bank for accom modations under the Federal Reserve A ct: Advances to banks, secured by direct obligations of the United States, under paragraph 13 of Section 1 3 .. >per annum Advances to member banks, under paragraph 8 of Sec tion 13, secured by direct obligations of the U nited States or by such Government guaranteed obliga tions as are eligible for collateral thereunder................ . Rediscounts and other advances to member banks under Sections 13 and 13a......................................................... 1 Vi % per annum Advances to member banks under Section 10b................ . 2 % per annum Advances to individuals, firms, and corporations, other than banks, secured by direct obligations of the United States, under paragraph 13 of Section 1 3 ........... Rediscounts, purchases, and advances to member banks, nonmember banks, and other financing insti tutions, under Section 13b: (a) On portion for which such institution is obligated 3 # % per annum (b) On remaining portion.................................................... 4 % per annum Commitments, not exceeding 6 months, to member banks, nonmember banks, and other financing insti tutions, to rediscount, purchase, or make advances, under Section 13b ....................................................................... x/i % flat Advances to established industrial or commercial 1 4 % to businesses under Section 13b............................................... 1 5 lA % per annum Since the last issue of this review, the State Bank of Lebanon, Lebanon, Mo., has been adm itted to membership in the Federal Reserve System. Debits to Individual Accounts — The following comparative table of debits to individual accounts reflects spending trends in this d istric t: (In thousands of dollars) A ug., 1940 El Dorado, Ark.$ 5,339 “ Fort Smith, . . . 11,672 “ 1,170 L ittle R ock,. . . . “ 33,997 “ Pine Bluff, 6,296 Texarkana, Ark. -Tex. 6,916 E .S t.L .-N at.S . Y .,. 111. 40,928 “ 8,733 31,993 Ind. ..K y . 155,143 Owensboro, 6,072 4,285 Miss. Mo. 548,980. “ 2,155 “ 15,553 Springfield,. . . . Tenn. 115,099 994,331 (Completed September 24, 1940) A ug., 1939 July, 1940 $ 5,295 11,343 1,369 37,357 7,197 6,617 41,193 8,572 35,751 169,795 6,026 4,081 612,450 2,062 16,484 123,769 1,089,361 $ 5,055 10,721 1,478 38,0.96 6,217 6,191 36,170 7,631 28,303 143,696 8,501 3,736 528,573 1,910 13,592 105,381 945,251 A u g .,’40 comp, with July,’40 A u g .,’39 + 0.8% + 5.6% + 2.9 + 8.9 — 14.5 -20.8 — 9.0 -10.8 — 12.5 b 1.7 + 4.5 -11.7 — 0,6 -13.2 + 1.9 -14.4 — 10.5 -13.0 — 8.6 - 8.0 -28.6 + 0.8 + 5.0 + 14.7 — 10.4 + 3.9 + 4.5 + 12.8 + 14.4 — 5.7 — 7.0 + 9.2 + 5.2 — 8.7 Page 7 N A TIO N A L SUMMARY OF B U S IN E S S C O N D ITIO N S B Y B O A R D O F G O V E R N O R S OI? F E D E R A L R E S E R V E SY ST E M INDUSTRIAL PRODUCTION Index of physical volum e of production, adjusted for sea sonal variation, 1935-1939 = 100. B y months, January, 1934, to August, 1940. L atest figure 123. FACTORY EMPLOYMENT Production and employment in August showed a further rise from the level maintained in June and July and distribution to consumers also in creased. Prices of industrial materials were somewhat higher in the middle of September than a month earlier. Industrial Production — The Federal Reserve index of industrial pro duction is estimated at 123 in August as compared with 121 in June and July and 111, the low point for the year, in April. This rise has reflected chiefly £he direct and indirect effects of the defense program on industries producing durable goods and textiles. Steel production rose further in August as new orders for steel continued in large volume, and for the month as a whole mills operated at 90 per cent of capacity. Following a temporary decline over the Labor Day week, the rate of output advanced to 93 per cent of capacity in the third week of September. In most branches of the machinery industries activity showed a continued expansion in August and there were further sharp increases in shipbuilding and the manufacture of aircraft. With the growth in production of finished durable goods, consumption of nonferrous metals advanced to the highest levels since last winter. Output of automobiles was in small volume in August owing to the sea sonal change-over to 1941 model cars. The low point in production was reached early in August; there was a gradual rise later in that month fol lowed by a sharp advance in the first two weeks of September as most companies began volume production on new models. Lumber production, which had declined in July, rose considerably in August. Textile mill activity continued to increase in August and was at the highest level since last January. Cotton consumption advanced considerably further and silk deliveries rose from the small volume of recent months. Activity at wool textile mills increased seasonally, following a sharp rise in July, while at rayon mills activity showed a less than seasonal increase but continued at a high level. Index of number employed, adjusted for seasonal variation, 1923-1925 average = 100. B y months, January, 1934, to August, 1940. CONSTRUCTION CONTRACTS AWARDED Mining of bituminous coal in August was maintained in large volume for the season, while production of anthracite declined. Output of crude petro leum declined somewhat further. Value of new construction work undertaken in August was at about the same level as in July, according to reports of the F. W. Dodge Corporation and the Federal Reserve Bank of San Francisco. The volume of contracts for public projects continued unusually large and the amount of new private work started was larger than in July. Residential building was at the highest level in recent years, on a seasonally adjusted basis, reflecting further increases in both private and public contracts. Distribution — Distribution of commodities to consumers increased con siderably from July to August. Sales at department stores and by mail order houses showed a sharp rise and there was a less than seasonal decline in variety store sales. In the early part of September department store sales continued to increase. Freight-car loadings advanced from July to August when little change is usual. Shipments of coal and miscellaneous freight increased while loadings of grain showed more than a seasonal decline. Three-month m oving averages of F. W . D odge Corporation data for value of contracts awarded in 37 Eastern States, adjusted for seasonal variation. L atest figures based on data for July and A ugust and estimate for September. DEPARTMENT STORE SALES AND STOCKS Commodity Prices — Prices of several industrial materials, including copper, zinc, steel scrap, lumber, hides, and print cloth, advanced somewhat from the middle of August to the middle of September and, owing partly to seasonal developments, prices of foodstuffs were also higher. Prices of most other commodities showed little change in this period, although some paper items were reduced and several new models of automobiles were announced at advanced prices. Agriculture — Production prospects for most major crops increased dur ing August, according to the Department of Agriculture. On the basis of September 1 conditions the cotton crop was estimated at 12,772,000 bales, about 1,340,000 bales more than was indicated at the beginning of August. Preliminar}' estimates by the Department indicate that cash farm income, including Government payments, will be about $8,900,000,000 for the calendar year 1940 as compared with $8,540,000,000 last year. Bank Credit — Commercial loans increased somewhat at banks in New York City and in 100 other leading cities during the four weeks ending Sep tember 11, while their holdings of investments showed little change. Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average = 100. B y months, January, 1934, to A ugust, 1940. Page 8 United States Government Security Prices — United States Govern ment security prices increased in the last half of August and the first week in September and were steady in the second week in September.
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