* -2- 



Since which time it has leveled off. The 3 oer cent increase during 

 ^^ the last month is the first substantial increase we have had for some 

 time and indicates that the demand for farm products will be further 

 strengthened by this improvement if it continues. 



The strike situation has not improved during the past week. 

 The mine strikes are causing steel plants to close their blast furnaces. 

 For the month of October, steel output was 99 per cent of capacity but 

 eased slightly in the first half of November. Coal production declined 

 somewhat in October and early November. Construction permits declined 

 slightly in October, particularly for publicly financed work. There 

 was an increase in privately financed projects. Awards for residentiail 

 building failed to show the usual seasonal increase at this time. 



The Bureau of Labor Statistics index of the cost of living 

 increased two points in October to lOS per cent of the 1935-39 average. 

 This increase in cost of living has not been as great as the increase 

 in consumers' incomes, and the purchasing power of consumers has in- 

 creased substantially. 



Although the new reserve requirements v/hich went into effect 

 November 1 reduced their excess reserves to 34' billion dollars, loems 

 and investments of Federal Reserve Member Banks continued to increase 

 during October and the first half of November. That means that additional 

 buying power is being added to the current supply of funds. 



Although we have heard considerable comment by Washington 

 officials to the effect that we shall have to do without a great many 

 conveniences and luxuries during the coming months and for the duration 

 of the war because of shifting from "business as usual" to defense 

 efforts, nevertheless, there will be enormous sums of money available 

 to spend for consumer goods that are produced. Agriculture will certain- 

 ly receive its share of this income. With the increased production of 



