FEDERAL RESERVE BANK OF ST. LOUIS MONTHLY REPORT ON GENERAL. BUSINESS CONDITIONS IN FEDERAL RESERVE DISTRICT NO. 8 Released for Publication On and After the Morning of October 31, 1922 W IL L IA M McC. MARTIN, CHAIRMAN OF THE BOARD AND FEDERAL RESERVE AGENT D ECIDED improvement has marked the course deliveries of raw materials from distant points by of general business in this district during the recourse to supplies nearer at hand, and in many past thirty days. Removal to a large extent instances the spot material commanded stiff pre­ of the handicaps incident to the coal and railroad miums. In a lesser degree, similar conditions were strikes has had the effect of restoring confidence reported in other industries, and profits were and demands held in abeyance pending the outcome adversely affected. In the case of heavy goods, of these controversies are being filled on a large reports from manufacturers indicate a shortage of scale. With but few exceptions, reports of mer­ raw materials during the balance of the year. In­ chants and manufacturers indicate substantial gains creased activity in manufacturing was reflected in sales over the corresponding period a year ago. in the heavier sales of electric power to industrial In many important lines, notably those based on consumers by public utility companies in the dis­ iron and steel, the volume of business during the trict. period under review would have been considerably Continuance of the dry, hot weather during larger but for the scarcity of freight cars and inter­ September over the greater part of the district ference with transportation service, due to conges­ proved beneficial for harvesting operations, but tion at large terminals. resulted in a further reduction in size of most late The increase in actual volume of trade was crops. Corn particularly suffered from the drouth, accompanied by considerably more optimism than and the further lowering in the estimated yield of has existed during the past several months. In tobacco was due in large measure to lack of mois­ the rural sections the advance in prices of farm ture. Soil preparation and seeding of winter crops products, which took place in late September and was delayed by the dry condition of the soil, and the opening weeks of October, had a buoyant effect, from some important wheat producing counties while in the cities a further reduction in unemploy­ come reports of reduced acreages. The general ment has increased the general purchasing power rains in the second week of October, however, and found reflection in greater activity in the retail worked wonders in the matter of restoring fields department of distribution. The latter fact is true to tillable condition, besides reviving pastures and particularly of the coal fields where mining has promoting growth of seeded grains. been resumed and business more nearly approxi­ The most important development argicultur- mates normal than at any time since the strike was ally, however, was the accretion in prices recorded called last April. on wheat, corn, oats and other farm products. Ordering of goods for late fall and winter con­ Between September 15 and October 14 wheat sumption is on a larger scale than was thought futures in St. Louis advanced approximately 11c possible a few months back. Thus far the upturn per bushel, corn 10c and oats 8c. Cash wheat during in commodity prices, which commenced toward the the same period advanced 13c to 14c, and spot end of August, has not affected purchasing. In corn and oats were proportionally higher than the some lines, notably textiles, boots and shoes, and futures. Coming at a time when the movement of clothing, the higher prices have stimulated buying. these cereals is at its height, the upturn in prices Retail stocks continue moderate, and merchants are will add greatly to returns of the producers, and in disposed to fill out their assortments in order to addition will serve to partially equalize the discrep­ meet the augmented demand. Due to the strikes ancy existing between things which the farmer has and hampered transportation, a scarcity has devel­ to sell and commodities which he is obliged to pur­ oped in certain classes of goods, and both manufac­ chase for his own consumption. The price of hogs turers and wholesalers are far behind on deliveries. and cattle has advanced sympathetically with the Delayed shipments of raw materials have had a rise in corn. tendency to curtail production, but a more general In face of reported car shortage and serious comment is that finished products are accumulating congestion at important terminals, railroads operat­ at points of manufacture. ing in this district accommodated enormous traffic Withal production as a whole recorded progress during the period under review. As contrasted during the period under review. Iron and steel with recent months there was a notable gain in the plants increased their activities, and there were movement of coal, and merchandise, farm products, sharp gains in outputs of shoe, furniture, drug and live stock and lumber were transported in heavy chemical, and fire clay factories, also of flour and volume. Good gains were reported by virtually all lumber mills. Urgent orders held by the iron and the roads over the preceding month, also over the steel works necessitated supplementing expected corresponding period a year ago. Passenger traf­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis fic, however, did not share in the improvement duction of trucks in September totaled 18,268 shown by freight, and a slight decrease was regis­ against 23,897 in August. According to reports of tered under the same month in 1921. The St. Louis 230 dealers scattered through the district, sales of Terminal Railway Association, which includes in cars in September were about 9 per cent larger than its membership 26 roads operating through this for the same month in 1921. A slowing down in gateway, interchanged 185,545 loads in September, sales was noted during the first two weeks of Octo­ the largest number for any month since October, ber, the total falling behind the corresponding 1921, and comparing with 182,683 in August, 168,368 period a year ago. The used car market is reported in July, 167,610 in June and 161,168 in September, in better condition than at any time in eighteen 1921. During the first nine days of October 58,550 months, the surplus having been materially reduced loads were interchanged, against 56,561 loads in during the past six weeks. A steady and satisfac­ the same period of the preceding month. tory growth in sales of accessories is noted, but A further easing in the fuel situation took place recent price cuts have had a tendency to disturb throughout the district during the past thirty days. the tire market, and both volume of sales and pro­ The movement from mines showed a steady in­ fits are disappointing. crease, and additional declines were recorded, both Collections during the period under review in in prices of steaming and heating coal. It is this district were the most satisfactory for any remarked, however, that consumers^ nearest to the month this year. Marked improvement was re­ mines are being much more efficiently supplied ported over the preceding thirty days, and many than those at greater distances, due to congestion important interests showed gains over the same on the railroads. Many mines in the Illinois fields period last year. Particularly notable was the per­ are working only from two to three days a week, formance in the South, where cotton planters are because of inability to obtain empty coal cars. Coke paying their bills and loans at banks have been is still scarce, both metallurgical and domestic materially reduced. October settlements with shoe grades, and relatively little reduction has taken and dry goods houses in the larger cities were heavy, place in prices of this fuel. Production of bitumin­ and somewhat above expectations. A slight slow­ ous coal for the entire country in the second week ing down was reported in settlements in the grain of October was 9,900,000 tons, against 9,711,000 sections, but on the other hand, live stock loans are tons for the same week in 1921 and 12,103,000 in being liquidated promptly. Answers to 333 ques­ 1920. Total production for the calendar year to tionnaires addressed to representative interests in October 7 was 280,719,000 tons, against 304,574,000 various lines throughout the Eighth Federal Reserve tons for the corresponding period in 1921. District asking for data relative to collections show There was a sharp decrease in automobile pro­ the following results: 7.6 per cent excellent; 45.5 duction for the country at large during September, per cent good; 42.4 per cent fair and only 4.6 per as contrasted with August. The output of passen­ cent poor. ger cars during September by companies reporting The per capita circulation of the United States direct or through the Automobile Chamber of Com- on October 1 was $41.04, against $39.93 on Septem­ merce was 186,076 against 248,785 in August. Pro- ber 1 and $42.99 on October 1, 1921. Commercial failures in the 12 Federal Reserve Districts during the months of September and August, with comparative figures for September, 1921, as compiled by Dun’s, were as follows: NUMBER AMOUNT Sept. Aug. Sept. Sept. August Sept. District 1922 1922 1921 1922 1922 1921 Boston, First.......................... ...................... 118 118 124 $ 1,479,198 $ 1,556,039 $ 2,725,247 New York, Second.................................... 376 269 317 12,209,811 7,364,329 10,439,409 Philadelphia, Third.............