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Business Conditions
Seventh
FEDERAL
Volume 19, No. 11
Reserve
_
C
DISTRICT
MONTHLY REVIEW PUBLISHED BY THE
FEDERAL RESERVE BANK OF CHICAGO
October 28, 1936
DISTRICT SUMMARY
creased slightly during the month, while payrolls
ITH the beginning of fall, an accelerated rate
declined less than is usual.
of output was noted in several manufacturing
as well as food-producing industries of the Seventh Production in reporting food industries rose in
September over a month previous; the gain in pack
Federal Reserve district, some of the gains being
ing-house commodities and in Wisconsin cheese was
contrary to trend for the season, while other indus
counterseasonal and the volumes produced exceeded
tries were maintained at the comparatively high level
the average for September. Sales of meat-packing
of activity that prevailed throughout the summer
products and of butter also gained, but distribution
months. In most reporting groups of wholesale and
of Wisconsin cheese declined in the month. The
retail trade, September sales expanded more than
September movement of grains was generally small.
usual over a month earlier and gains over the month
October 1 forecasts of Seventh district corn and
last year were large. Thus, the third quarter of 1936
potato production were raised over those of a month
closed with production and sales volumes for the year
earlier; practically all of the Seventh district corn
to date substantially in excess of the corresponding
crop is now safe from frost.
months of 1935.
September improvement over August in the whole
A continued heavy demand for steel maintained
sale drug, hardware, and electrical supply trades was
operations of that industry in the Chicago district
greater than seasonal and gains over a year ago
at a high level through September and well into
were substantial. Wholesale grocery sales, however,
October, and September pig iron production was the
showed a contraseasonal recession from a month
largest for any month since June 1930. Activity at
earlier and were smaller than in September last year.
malleable casting foundries expanded in September
The department store and retail shoe trades recorded
as did that at stove and furnace factories, although
above-average expansion in September, and the gain
steel casting foundries recorded a further decline.
in the retail furniture trade was about average; ex
Shipments from furniture factories not only gained
ceptionally large increases were shown over the
more than seasonally over August but were well
same month of 1935.
above average for September. There was a notice
Between September 16 and October 14, total loans
able drop in new building construction started in
and investments of reporting member banks in the
September, but the volume continued to exceed con
Seventh district declined slightly, the result of a
siderably the level of other recent years. The move
decrease in loans on securities and in investments
ment of building materials was well maintained
other than Government securities; commercial loans
through the month. Other industries to record ex
rose 12 million dollars further in this period. De
pansion in September, as reflected in their payrolls,
mand deposits in these banks increased between the
were wood products, chemicals, and paper and print
two dates, while time deposits declined.
ing. Industrial employment in the aggregate in-
W
‘
,
Credit and Finance
In the period September 16 to October 21, 43 million
dollars was added to Seventh district funds from com
mercial and financial operations with other districts,
largely reflecting a net inflow of capital funds from
eastern markets, and the United States Treasury dis
bursed 53 millions here in excess of its receipts. From
this accession of funds, 82 millions was added to mem
ber bank reserve balances—bringing them 17 million
dollars above the September 9 high—and 6 millions to
currency circulation, while reserve bank credit outstand
ing was reduced 8 million dollars, largely through trans
actions in “float.”
The bulk of loans to customers on prime commercial
paper continues to be made at rates from 1/ to 4
per cent, by down-town Chicago banks, and similarly
situated Detroit banks report a range from 1 to 5 per
cent. Rates on time loans secured by prime stock
exchange or other current collateral range from lj4 to
5 per cent in the Chicago, and 1 to 6 per cent in the
Detroit banks. The average rate earned on commercial
TRANSIT OPERATIONS OF THE FEDERAL RESERVE BANK
OF CHICAGO AND DETROIT BRANCH
(Exclusive of Treasury checks and of non-transit items drawn on own bank)
September 1936
September 1935
Total country and city check clearings:
Pieces..................................... .........
9,832,717
9,457,112
Amount.................................. ......... $1,969,690,179
$1,614,686,965
Daily average clearings:
Total items cleared—
Pieces................................. .........
393,309
394,046
Amount............................. .........
*78,787,607
$67,278,623
Items drawn on Chicago—
Pieces................................. .........
63,629*
93,712
Amount............................. .........
*41,085,000
$34,690,000
Items drawn on Detroit—
Pieces................................. .........
18,103
18,480
Amount............................. .........
*9,116,480
$7,807,638
♦Decline in September 1936 is due to packaging of Chicago early clearings
loans by certain of the reporting down-town Chicago
banks was 2.46 per cent for September, unchanged
from August, but somewhat below the 2.93 per cent
earned in September 1935.
The dollar total of acceptances created by banks in
this district in September was seasonally less than in
August, and though 50 per cent greater than a year
ago, continued to be about 58 per cent below the tenyear average. Indications for October are more favor
able, the total for the first fifteen days being consider
ably greater than for the same period last month and
last year. Acceptances outstanding on September 30
totaled 8 per cent above a year ago, but were 57 per
cent below the 1926-35 average for that date. Opera
tions of bill dealers in this district were considerably
heavier than in the preceding period, but again fell
below a year ago, at rates which have prevailed in
recent months.
Middle West sales of commercial paper dealers con
tinued in September to show a more than seasonal de
cline as compared with the preceding month, and were
57 per cent less than the September average, 1926-35.
No material improvement was reported for the first
half of October, packers’ paper being seasonally absent.
Rates remain unchanged, % to Ya per cent for prime
short-term paper, and $4 to 1 per cent for less wellknown names. The bulk of sales was at % per cent.
Bond dealers in this district reported improved activ
ity in September, some broadening of investment de
mand, particularly in second-grade obligations, and
greater interest in lower-grade municipals. The general
price level of bonds was well maintained, second-grade
railroad bonds having appreciated markedly. New
capital issues in the United States were somewhat
greater in September than in August; refundings ex
ceeded offerings for new capital. The Chicago Journal
of Commerce average of twenty leading stocks on the
Chicago Stock Exchange rose from $57.22 on Sep
tember 21 to $60.72 on October 10, the highest point
since September 12, 1931. On October 21 the averasre
was $59.73.
FEDERAL RESERVE BANK OF CHICAGO, SELECTED
ITEMS OF CONDITION
(Amounts in millions of dollars)
October
21, 1936
Total Brite and SceurHie8........................
$286.0
Bills Discounted................................
00
Buis Bought................................... o a
U. S. Government Securities..................
283 9
Total Reserves..........................................]
1 7502
Member Bank Reserve Deposits..........
1,058.9
All Other Deposits....................................
18,7
Federal Reserve Notes in Circulation..
920A
Ratio of Total Reserves to Deposits and
Federal Reserve Note Liabilities Comblned- ■ .....................................................
87.5%
♦Number of Points.
Page 2
Change Fbom
September
October
/{,8a, 1936
23, 1935
$ -5.3
$ -72.1
4-n n
i
loo
-5 2
+s| |
+824
—42 2
-4 1
'
+1.0*
Ini
— 7i’»
+245'1
~-7 8
+1074
’
+7.0*
Agricultural Products
The October 1 Government estimate of Seventh I
eral Reserve district corn production was 544,144,
bushels, which reflected a gain of 32 million bus
over a month earlier and of 61 million bushels as c
pared with the 1934 harvest, but a decline of 336 mil
bushels from the production of 1935. The forecast
potatoes in the district was raised to 46,299,000 bus
from 43,976,000 bushels indicated at the beginning
September. Practically the entire corn crop is now s
Moreover, killing frosts in 1936 have thus far 1
confined principally to scattered northern areas of
territory. Late garden truck has done very we!
October and there is a probability that the canr
pack may be larger than indicated a month ago.
abundance of late forage is reported. A continuj
of favorable weather would benefit seed corn.
Corn production in the United States was place*
1,509,362,000 bushels on October 1, a gain of 51 mil
bushels over the September 1 estimate. A large acre
is being planted to winter wheat this autumn.
Grain Marketing
The movement of wheat at primary markets in
United States declined more than seasonally in f
tember to the lowest level since early spring. Imp
of the grain continued much greater than a year
and exports remained in limited volume, though
ceeding those of August. Following earlier stren
prices of No. 2 hard winter for immediate deliver
Chicago weakened at the close of September—coi
dent with reports of good rains in the southern he
sphere—and had shown only partial recovery to $1.1
and $1.23 by October 21. The aggregate of f;
and visible holdings of wheat in the United States
11 per cent smaller on October 1 than a year eai
and 49 per cent below the 1928-32 average for the d
Receipts of corn at these centers were less in S
tember than for any month in the past year, and
shipments were below any period subsequent to
tober 1935. U. S. farm stocks plus visible supplies
October 1 were 9 per cent above the 1928-32 aver;
After displaying weakness at the close of Septeir
and during the first week of October, due to sc
liquidation of long positions and to a continuation
Argentine offerings at United States seaboard poi
quotations at Chicago firmed slightly in mid-Octc
in sympathy with those of wheat, but again eased
the third week of the month.
The September 1936 movement of oats at prim
centers of accumulation in the United States was un
CONDITION OF LICENSED REPORTING MEMBER BANKS
SEVENTH DISTRICT
(Amounts in millions of dollars)
Total loans and investments.............................
Total loans on securities................................
To brokers and dealers:
In New York........................................
Outside New York.................... .... 1j
To others (except banks).........................
Acceptances and commercial paper bought
Loans on real estate........................................
Loans to banks.................................................
Other loans................................................. ’ ’ ’
U. S. Government direct obligations.........
Obligations fully guaranteed by
U. S. Government.......................................
Other securities............................................’ ’
Demand deposits—adjusted.............................
Time deposits.................................................
Borrowings......................................................
Change Froi
October September Octc
14, 1936
16, 1936
16,
$3,041
$ -7 $ +4
244
-11
3
42
199
31
70
8
523
1,611
-6
-2
-3
-3
0
0
+12
+4
+1'
+2i
148
406
2,293
2,293
809
+1
-10
+;
+53
-12
+3:
+<
1
+1
4
+
_
_
_
that of other months subsequent to July last year.
October 1 stocks on farms and in visible positions in
the United States totaled 24 per cent below the 1928-32
average, although the visible supply increased in this
comparison. Prices moved fractionally lower in Sep
tember from August and eased further in the first three
weeks of October.
MOVEMENT OF GRAIN AT INTERIOR PRIMARY MARKETS
IN THE UNITED STATES
(In Thousands of Bushels)
September August September September
1926-35 Av.
1935
1936
1936
Wheat:
Receipts..
Shipments.
Corn:
Receipts. .
Shipments.
Oats:
Receipts..
Shipments.
10,596
10,627
28,065
18,151
43,624
15,826
47,527
28,461
9,194
4,308
15,737
7,768
7,180
3,035
16,680
9,429
3,998
3,742
13,356
4,493
21,806
7,901
12,826
7,269
Movement
of
Livestock
Livestock receipts at public stockyards in the United
States increased less than seasonally in September over
August, although the volume of cattle, calves, and
lambs was in excess of any month since last October
and that of hogs was greater than at any other time
this year since March. Hog and calf marketings re
mained above a year ago, but those of cattle and lambs
declined in this comparison. With the exception of
calves, the number of each decreased from the 1926-35
September average. Movement to inspected slaughter
—inclusive of animals that did not pass through public
stockyards—diverged in several instances from the
trend of market receipts: the gain over August in cattle
and lamb supply was greater than normal and in hogs
and calves was counter to the usual tendency for the
month; the volume of each exceeded a year ago and,
with the exception of hogs, all gained over the 1926-35
average for September; furthermore, the slaughter
supply of calves was heavier than at any time since the
autumn of 1934, and the number of hogs was lower
than in any previous month of 1936 with the exception
of February and August.
September reshipments to feed lots were above those
of subsequent periods to last autumn, but the move
ment of feeder cattle and lambs not only remained
below the 1931-35 seasonal average but also was under
a year ago.
Meat Packing
Late summer and early autumn slaughter of livestock
in the United States was augmented this year by con
siderable liquidation of fat cattle, light-weight hogs, and
of sows, owing to a smaller corn supply for winter
feeding than a year ago. Therefore, production of
packing-house commodities at inspected slaughtering
establishments rose counterseasonally by 2>l 2 per cent
/
in September over August to a level 33 J4 per cent
higher than a year earlier and 2 per cent above the
1926-35 average for the month. The tonnage sold failed
VOLUME OF PAYMENT BY CHECK, SEVENTH DISTRICT
(Amounts in millions of dollars)
Per Cent of Increase
or Decrease From
September August September
1936
1936
1935
+3.7
+17.8
Chicago.................................................. ...................... $2,946
773
—6.7
+25.3
Detroit................................................... ......................
254
-5.0
+23.0
Milwaukee............................................ ......................
171
-1.9
+21.6
Indianapolis........................................ ......................
Total four larger cities............................................
37 smaller cities................................. ......................
Total 41 centers................................
$4,144
697
+0.8
-3.8
+19.6
+17.8
+0,1
+19.3
to show the usual seasonal excess over current produc
tion and was 3 >4 per cent below the ten-year average,
but aggregated 30 per cent greater than last September
and 9 per cent heavier than in August. Despite an
advance in quotations for beef, veal, and a few pork
cuts, the general price level of packing-house com
modities declined in September from the preceding
month. However, dollar sales billed to domestic and
foreign customers totaled 3per cent more than in
August, 13*4 per cent larger than in the corresponding
period of 1935, and 2 per cent in excess of the 1926-35
September average. Inventories of packing-house com
modities in the United States decreased less than
normally on October 1 from a month earlier and were
203,034,000 pounds above those of a year ago; further
more, their margin under the 1931-35 average was re
duced to 10y2 per cent. Notwithstanding a recession
of \y2 per cent from August, payrolls at the close of
September reflected increases over the same date last
year of 8per cent in number of employes, 16>4 per
cent in hours worked, and 1+4 per cent in wage pay
ments.
_
Shipments for export were reported as being some
what lighter in September than in August, with the
increase in lard forwardings to Cuba more than offset
by a reduction in meat and lard tonnage to the United
Kingdom. Competitive offerings from the European
continent and from South America, at prices much be
low the Chicago parity and under current replacement
costs in this country, continued to depress British trade
in United States meats and lard. Demand from the
remainder of Europe failed to show any noticeable
improvement, except for a slight gain from Switzer
land. On the other hand, Cuban and Porto Rican trade
CROP PRODUCTION
Estimated by the United States Bureau of Agricultural Economics
on the basis of October 1 condition
(In thousands of bushels unless otherwise specified)
United States
Seventh District
Forecast
Final
Average
Forecast Final
1936
1935
1928-32
1935
1936
Corn............................. 544,144
880,218 1,509,362 2.291,629 2,553,424
783,750
1,196,668 1,215,102
Oats..............................369,081
453,391
282,226
281,237
Barley.......................... 3.3.267(a) 47.713(a) 143,916
25.746(c)
37.691(c)
10.204(c)
Soybeans..................... 22.894(b) 34.533(b)
464,203
57,807
519,097
622,252
Winter Wheat........... 62,938
108,136
159,241
241,312
2,134
Spring Wheat............ 2,195
58,928
38,212
6,705(a) 12.911(a) 27,095
8,277
582(a) l,2?6(a)
5,860
8,220
Buckwheat.................
14,123
15,996
240(d)
336(d)
6,276
Flaxseed......................
322,263
387,678
372,115
57,484
Potatoes (white).... 46,299
Potatoes (sweet).... 1.050(b) 1.280(b) 67,520
66,368
83,198
11,858
10,737
13,799
Beans (dry edible)1.. 2.548(e) 4.828(e)
8,118
9,241
7,908
850(f)
686(f)
Sugar Beets2...............
13,247
14,546
17,625
Onions1........................ 3.621(a) 2.559(a)
177(a)
797
845
783
Cabbage for Market2
110(a)
9,168
9,513
8,462
1.186(f) 1.090(f)
19,176
16,891
TomatoeB for Market 1.270(h) 1.301(h) 20,046
Canning Vegetables:
95
135
166
44(g)
32(g)
Cabbage for Kraut2
13*
21
16
2(f)
2(f)
Green Lima Beans2
628
582
860
221(a)
438(a)
Sweet Corn2...........
1,689
1,293
1,739
381(h)
379(h)
Tomatoes2..............
52
48
36
21 (i)
20 (i)
Beets2.......................
161,333
167,283
Apples (total crop).. 10.146(a) 23.303(a) 104,942
52,808
56,451
1.671(h) 6.232(h) 45,715
22,035
23,146
978(h) 1.611(h) 23,936
1,879
2,455
2,200
47(a)
73(a)
Grapes2........................
12,127
10,284
11,681
1.209(a) 1.437(a)
Strawberries8.............
55 (j)
581
810)
531
520
15,835 :1,152,076 1,296,810 1,427,174
17,627
69,533
62,968
76,146
17,450
All Tame Hay2......... 13,630
47
17(k)
63
14 (k)
41
Broom Corn2.............
95,340
59,983
265 (k) 33,645
45(k)
Pecans5........................
10,638
14,667
11,609
1,267(1)
846
1,352
722(1)
Peppermint Oil5. . . .
*1929-32 average.
!In thousands of 100-lb. bags. !In thousands of tons. *In thousands of
crates. 4In thousands of barrels. 6In thousands of pounds. 6In thousands
of bales, (a) Five States including Seventh Federal Reserve district, (b)
Illinois, Indiana, and Iowa, (c) Indiana, Illinois, Iowa, North Carolina,
Ohio, and Missouri, (d) Iowa, Michigan, and Wisconsin, (e) Michigan and
Wisconsin, (f) Michigan, (g) Wisconsin, Michigan, Indiana, and Illinois,
(h) Michigan, Illinois, Indiana, and Iowa, (i) Wisconsin, Michigan, and
Indiana, (j) Wisconsin, (k) Illinois. (1) Michigan and Indiana.
Page 3
in lard and fats from the United States was fair to
good, with prices realized in those markets fully up to
the Chicago basis. Total inventories of United States
packing-house commodities in foreign markets—in
clusive of stocks in transit—declined on October 1
from the beginning of September, although accumula
tion of American hams in England continued. Imports
of animal products into the United States decreased in
September from August.
Dairy Products
Following a more than normal decline in July and
August from June and reflecting improvement in
pasture conditions, creamery butter production in the
Seventh Federal Reserve district increased 2 per cent
in September over the preceding month; it was, how
ever, 8Yi per cent under a year ago and 5 per cent
less than the 1926-35 average for the month. The dis
trict sales tonnage expanded 6per cent over August
and showed a decline of only 3 per cent from last Sep
tember and of 3J4 per cent from the ten-year average.
Production of the commodity in the United States de
creased less than is usual in September from a month
earlier and approximated the 1926-35 average volume
for September, though remaining considerably under
the corresponding period of 1935. Subsequent to mid
summer price advances which attracted importations of
butter and likewise were conducive to an increased con
sumption of oleomargarine, inventories of creamery
butter in the United States declined less than seasonally
on October 1 from a month earlier and the decrease
in holdings as compared with the 1931-35 average was
only 12 per cent. Moreover, quotations for the com
modity dropped about 3 per cent in September from
August and weakened further in the first three weeks
of October.
American cheese manufacture in Wisconsin expanded
contraseasonally by 5 per cent in September over
August and was 16 per cent greater than the 1926-35
average for the month, though 9 per cent below the
level of a year ago. Distribution of the commodity
from primary markets of that State was rather sharply
lower in all three comparisons and also showed more
than a seasonal deficiency from current production.
Total stocks of cheese in the United States accumu
lated more than is usual on October 1 over a month
earlier and were 9J4 per cent above the 1931-35 average
for the date. After registering a decline of 4 per cent in
September from August, quotations weakened further
in the first half of October, but showed some strength
in the third week of the month.
Industrial Employment Conditions
Seventh district industries maintained their employ-,
ment volume in September with a fractional increase,
but decreased wage payments by one per cent. This
represents a better showing than is normally recorded
for September, as seasonal curtailments in some of the
manufacturing industries, prominent among them the
vehicles and stone-clay-and-glass products groups, gen
erally result in an aggregate recession which in the
past ten years has averaged one-half per cent in number
of workers employed and 3 per cent in their wage pay
ments. The current volumes continued substantially
above those of a year ago, the increases in this com- 1
parison approximating 8pZ per cent in employment and
15 per cent in payrolls.
The durable goods industries continued in September
to show a recession in both employment and payrolls,
but it was at a slower rate than in either of the two
preceding months. Activity in the metal and wood
products industries which recorded further expansion
served to some extent to offset the heavy losses within
the vehicles and stone-clay-and-glass products groups.
The non-durable industries increased employment ma
terially but made practically no change in August pay- *
rolls. The losses in this latter item experienced by the
leather, textiles, and rubber products industries were
about as large as the gains recorded for the chemicals,
food, and paper and printing industries. The result for
all of the manufacturing groups combined was a prac
tically stationary volume of employment as compared
with August but a decrease of about 1J4 per cent in
the amount of wage payments. Gains in both employ
ment and payrolls, however, were contributed by the
non-manufacturing groups. Merchandising recorded <
increases that were the heaviest since last December,
though slightly below those of September a year ago.
Public utilities concerns also showed a gain for the
month, while coal mining and the construction industries
registered minor decreases, the former contrary to the
usual seasonal trend.
EMPLOYMENT AND EARNINGS—SEVENTH FEDERAL
RESERVE DISTRICT
Week of Sept. IS, 1936
Report
Industrial Group
ing
Firms
Cattle
Hogs
301
76
2,403
1,593
1,395
1,549
553
541
458
♦Including a small volume of Government purchases.
AVERAGE PRICES OF LIVESTOCK
(Per hundred pounds at Chicago)
Week Ended
Oct. 17
Sept.
1936
1936
Native Beef Steers (average)..........
$9.15
Fat Cows and Heifers...............
7.00
Calves...........................
Hogs (bulk of sales).....................
9.90
Lambs.............................
9.30
Page 4
ings
Wage
Earn
(000
ers
No.
1,498
322
245
416
2,481
410,774
278,696
21,650
44,537
755,657
325
742
232
137
31
628
2,095
Merchandising2............
Sheep Calves
391
1,453
Earn
ers
No.
Aug.
1936
$8.50
6.70
10.10
9.50
1935
$10.60
7.55
9.00
10.95
9.50
Omitted)
$
Earn
ings
Non-Durable Goods:
Textiles and Products
Food and Products..
Chemical Products. .
Leather Products....
Rubber Products....
Paper and Printing..
%
%
10,159
7,863
476
899
19,397
+2.1
-6.9
-0.2
+3.7
-1.4
+0.6
-6.3
-2.1
+4.2
-2.2
62,653
119,407
34,721
26,630
13,580
73,199
330,190
1,084
2,595
900
485
302
1,872
7,238
+2.1
+6.9
+3.4
-0.0
+7.6
+ 1.5
+3.8
-3.3
+1.7
+2.6
-9.4
-1.2
+0.7
-0.2
4,576
1,085,847
26,635
+0.1
-1.7
2,499
192
27
303
Durable Goods:
Metals and Products1
Vehicles.......................
Stone Clay and Glass
Wood Products.........
(In thousand*)
Yards in Seventh District,
September 1936..............
Federally Inspected Slaughter,
United States:
September 1936..................
August 1936.........................
September 1935................
Wage
Earn
Total Mfg., 10 Groups.
LIVESTOCK SLAUGHTER
Change From
Aug. 15, 1936
110,554
95,963
2,263
3,093
+5.0
+0.1
-0.9
-5.S
+3.9
+2.4
— 1.4
—5.9
13,797
Total Non-mfg.,
3,021
‘Other than Vehicles.
226,549
5,818
+2.0
+2.4
7,597
1,312,396
32,453
+0.4
-1.0
‘Illinois, Indiana, and Wisconsin.
Major Types of Income and
Business Activity
The accompanying chart shows the trend by
months of major types of income in the Seventh Fed
eral Reserve district in comparison with department
store trade and bank debits activity. From points which
in the summer of 1929 were considerably in excess of
the 1923-25 average level, these series had dropped by
the spring of 1933 to a point below 50 per cent of that
average for trade and debits activity and to approxi
mately 30 per cent thereof for industrial payrolls and
agricultural income. By midsummer of the current
year 1936, debits and agricultural income had recovered
to the 1923-25 average level and industrial payrolls and
department store trade had reached a point within 25
per cent of that level.
SELECTED INDEXES OF INCOME AND BUSINESS ACTIVITY
Manufacturing
Automobile Production and Distribution
The closing of automobile plants during change-over
to new models brought production to the low level of
the year in September, although it exceeded last year’s
September low. Output of passenger automobiles in
the United States numbered 90,597 in the current
period and that of trucks 44,533, or 57 and 28 per cent,
respectively, under August production and 61 y2 and 42
per cent above a year ago. In the first three quarters
of 1936, there were 2,717,900 passenger cars produced
and 618,396 trucks, as compared with 2,358,998 and
516,306 in the same period of 1935.
August 1936
Used Cars:
Number Sold..................
Salable on Hand—
Number..............................
Value.................................
and
Steel Products
LUMBER AND BUILDING MATERIALS TRADE
September 1936: Per Cent
Change From
August
1936
Companies
-5.2
-3.3
+0.8
-56.0
-54.8
20
20
-18.0
-23.3
+56.3
+65.6
37
37
-47.4
-46.8
-3.0
-9.0
37
37
-13.9
+32.9
37
+0.6
+0.8
+17.1
+28.1
37
37
Total Sales in Dollars...........
Lumber Sales in Dollars....
Lumber Sales in Board Feet.
Accounts Outstanding1.........
to
+ 15.0
+21.7
+14.9
8
6
7
+9.0
+ 15.4
+13.7
+5.9
Retail Building Materials:
-76.0
-76.3
September
1935
Number of
Firms or
Y ARDS
Wholesale Lumber:
Sales in Dollars.......................
Sales in Board Feet...............
Accounts Outstanding1..........
Sept. 1935
New Cars:
Wholesale—
Number Sold..................
Value.................................
Retail—
Number Sold...................
Value.................................
On Hand September 30—
Number............................
Value.................................
Iron
Expanding demand from the automotive and the
heavy industries has continued to maintain a high level
of activity in the steel industry of the Chicago district.
Both sales and shipments of finished steel were heavier
in September than a month previous, and the first part
of October gave no indication of any decided change
in trend. Steel ingot output had risen to 76 per cent
of capacity by the first week of October and continued
at that rate through the middle of it; last year at the
same time the rate was slightly under 60 per cent.
Production of pig iron in the Illinois and Indiana dis
trict rose in September over August and was the
heaviest in the daily average for any September since
1929 and for any month since June 1930. Price ad
vances on bars and sheets were announced on October
1, and certain scrap iron and steel items showed further
increases at that time.
September reports from Seventh district foundries
reflected an increase in demand for malleable castings,
orders booked exceeding those of a month earlier by
13 per cent. Production and shipments also rose, by
12 and 5 per cent, respectively, above the volumes re
ported for August. Increases in dollar value were
slightly higher than these gains expressed in tonnage
units. At steel casting foundries, however, there was
a continued decline in the volume of orders booked,
that of 14 per cent from August marking the third
consecutive one since the sharp increase of last June.
Shipments and production of these castings likewise
Class of Trade
MIDWEST DISTRIBUTION OF AUTOMOBILES
September 1936: Per Cent
Change From
Wholesale distribution of automobiles in the Middle
West again reflected production trends in September,
being less than 25 per cent of the August volume.
Although sales of new cars at retail likewise declined
further, they continued to be considerably heavier than
a year ago, and those of used cars maintained a sub
stantially wide margin over last year. With new car
stocks reduced by almost half between the close of
August and September 30, they totaled for the first
time this year under those for the corresponding 1935
date. On the other hand, the number of salable used
cars on hand at the end of September was slightly
greater than a month earlier and sharply above the
number held a year ago. The ratio of deferred payment
sales to total retail sales showed little change between
August and September, but at 51 per cent in the latter
month compared with only 42 per cent for September
last year.
+21.0
+26.7
+29.8
+12.0
153
50
64
151
Ratio of Accounts Outstanding1
Total Dollar Sales During Month
September
1936
Wholesale Trade.........................
Retail Trade................................
August
1936
September
1935
160.5
232.8
151.0
239.2
160.7
251.2
1End of Month.
Page S
decreased during the month, the former by one and
the latter by 4 per cent. Gains over a year ago con
tinued heavy both for steel and malleable castings.
In the manufacture of stoves and furnaces, seasonal
activity was, as is customary, carried over into Sep
tember; molding-room operations were accelerated 6
per cent, orders accepted expanded 34 per cent, and
shipments rose 49 per cent. Increases over a year ago
in these items were slightly higher than those recorded
in August.
„ urniture
F
Furniture manufacturers of the Seventh district
booked orders and made shipments during September
that were well above average in volume. New orders
gained 7/ per cent over the preceding month, exceeded
those of a year ago by 41 per cent, and were 26 per
cent above the 1927-35 September average, while ship
ments showed gains of 25, 32, and 14 per cent in the
respective comparisons. Despite the substantial increase
in shipments over August and a moderate volume of
cancellations, the two combined failed to equal the
amount of new orders, so that unfilled orders on hand
had expanded 4 per cent further by the end of Sep
tember and totaled 84 per cent heavier than on the
same date last year. At 81 per cent of capacity, Sep
tember operations were 6 points higher than a month
earlier and 13 points above a year ago.
Building Materials, Construction Work
Demand for building materials was well sustained
during September, sales of lumber by wholesale and
manufacturing firms of the district decreasing less than
seasonally, while retail distribution of lumber increased
contrary to the usual trend. Sales of all materials
handled at reporting retail yards, which generally rise
in September, increased this year to a greater than
customary extent. Cement moved into consuming
channels within the district at a little slower rate than
in either July or August, while brick deliveries were
reported as slightly higher than in the preceding month.
All building materials continued to show substantial
gains in comparison with the corresponding month a
year ago. Although collections were reported as gen
erally fair, outstanding accounts of wholesale lumber
dealers at the close of September were somewhat larger
in ratio to total dollar sales for the period than a month
earlier and about the same as a year ago. At retail
yards this ratio was lower in both comparisons.
Building Construction
There was a noticeably smaller volume of building
construction started in the Seventh district during Sep
tember than in either of the two preceding months,
according to data on contracts awarded. Although a
substantial falling-off in residential building, following
the sharp expansion of a month previous, contributed
to the decline shown in the total, other types of con
struction likewise recorded considerable recession in the
month. The 28 per cent increase over a year ago in
total contracts awarded was the smallest in this com
parison since June 1935, but the gain in residential
contracts continued large.
BUILDING CONTRACTS AWARDED*
SEVENTH FEDERAL RESERVE DISTRICT
Commodity
Net Sales
Stocks
Accounts
Out
Col
lections
standing
Groceries. . .
Hardware. . .
Drugs...........
Electrical
Supplies...
Ratio of
Accounts
Out
standing
to
Net Sales
-8.2
+28.5
+9.2
+20.3
+32.5
-2.6
-11.3
+19.1
-3.5
-2.2
+28.0
+9.9
81.0
162.2
145.8
+43.6
+34.5
+24.9
+37.6
136.5
Page 6
Residential
Contracts
837,257,118
—29.5 %
+27.8 %
$359,887,656
+78.2 %
$11,300,679
— 34.2 %
+80.4%
$87,970,260
+117.2%
*Data furnished by F. W. Dodge Corporation.
Prospective building, as reflected by building permits
issued, showed an increase in September over August
and was well above September last year. The estimated
cost of permits issued in 99 cities of the district ex
ceeded that of the preceding month by 29 per cent and
was 113 per cent greater than a year ago, while the
number of permits gained 7 and 27per cent in the
respective comparisons.
Merchandising
The wholesale drug, hardware, and electrical supply
trades were in more satisfactory volume in September,
subsequent to the unfavorable trends of the preceding
month. Sales in these groups increased 12, 15, and
7j4 per cent, respectively, over August, all of which
gains were greater than seasonal in extent. The grocery
trade, however, recorded a further recession, the decline
of 4 per cent from a month earlier being contrary to
trend for September; furthermore, sales totaled 8 per
cent below those of the corresponding month a year ago.
In the other lines, gains over 1935 were among the
best of the year to date. As a result of the decline in
the grocery trade from last September, sales in that
group for the first three quarters of 1936 aggregated
only fractionally above those for the same period of
1935; drug sales were 3 per cent larger in this com
parison, while hardware and electrical supply sales were
heavier by 24 and 33 per cent, respectively. Ratios of
accounts outstanding to net sales were lower for Sep
tember in all groups than a month previous, and except
in groceries were under a year ago.
The 18 per cent increase recorded this September
over last in department store trade of the Seventh dis
trict represented the largest gain in the yearly com
parison since April 1934. However, this favorable
showing is modified to some extent by the fact that in
the month last year sales had expanded less than sea
sonally and there was one less trading day in the period,
daily average sales this September totaling only 13 per
cent in excess of those a year ago. As compared with
August, sales expanded 29 per cent in the current
DEPARTMENT STORE TRADE IN SEPTEMBER 1936
WHOLESALE TRADE IN SEPTEMBER 1936
Pek Cent Change From Same Month
Last Year
Total
Contracts
Period
Locality
Per Cent Change
September 1936
From
September 1935
Per Cent
Change
First Nine
Months 1936
From Same
Period 1935
Ratio of September
Collections to
Accounts
Outstanding
End of August
Net
Sales
Stocks
End of
Month
Net Sales
1936
1935
Chicago.................
Detroit..................
Milwaukee...........
Other Cities.........
+17.3
+19.4
+ 18.4
+ 16.1
+3.7
+6.3
+13.1
+6.0
+14.0
+9.9
+13.1
+10.3
31.3
47.2
36.8
31.8
31.2
44.4
36.6
29.9
7th District..........
+17.6
+6.1
+12.2
36.7
35.2
for September and is larger by far than recorded in
any of those years. As a result, sales were 21 per cent
greater than in the month last year, the increase being
the heaviest over a year ago so far in 1936 and com
paring with one of only 3 per cent shown in August.
In the first nine months of this year, the dollar volume
sold exceeded that for the same period of 1935 by 11
per cent. At the end of September, stocks were 3^4
per cent higher than at the close of August and 7 per
cent above those held on the corresponding date of 1935.
The retail furniture trade recorded about a seasonal
rise in September. Aggregate sales of furniture and
housefurnishings by reporting dealers and department
stores exceeded those of the preceding month by 30
per cent; the 1927-35 average gain for the period is
32 per cent. As compared with the corresponding
month of 1935, sales totaled 28 per cent larger in Sep
tember this year. Stocks, which increased 3 per cent
during the month, were 12per cent heavier than at
the same time last year.
month, which gain is somewhat greater than average
for the period; increases ranged from only 16 per cent
in the aggregate for stores in smaller centers to 63 per
cent in Detroit where special sales affected the trend.
It will be noted in the table that the volume of business
done by Chicago stores in the first three quarters of
1936 recorded the greatest increase over the same
period of 1935—14 per cent—and that Detroit showed
the smallest gain—-a little under 10 per cent. A rise
of 9 per cent took place in stocks between the close of
August and September 30, and they totaled 6 per cent
above those on the same date last year. Stock turn
over for the first nine months this year was 3.35 times
as compared with 3.09 times in the corresponding
period of 1935.
An exceptionally sharp expansion took place during
September in the retail shoe trade, sales of reporting
dealers and department stores totaling 86^2 per cent
in excess of those a month previous. This gain com
pares with one of 52 per cent in the 1926-35 average
MONTHLY BUSINESS INDICES COMPUTED BY FEDERAL RESERVE BANK OF CHICAGO
(Index numbers express a comparison of unit or dollar volume for the months indicated, using the monthly average for 1923-1924-1925 as a base, unless
otherwise indicated. Where figures for latest month shown are partly estimated on basis of returns received to date, revisions will be given the following
month. Data refer to the Seventh Federal Reserve district unless otherwise noted.)
Casting Foundries—
Shipments:
Steel—In Dollars........................................
In Tons............................................
Malleable—In Dollars..............................
In Tons..................................
Stoves and Furnaces—
Shipments (in dollars)...................................
Furniture—
Orders (in dollars)..........................................
Shipments (in dollars)...................................
Output of Butter by Creameries—
Production........................................................
Sales....................................................................
Wholesale Trade—
Net Sales (in dollars):
Groceries.......................................................
Hardware......................................................
Drugs.............................................................
Retail Trade (Dept. Stores)—
Net Sales (in dollars):
Chicago.........................................................
Detroit...........................................................
Indianapolis.................................................
Milwaukee....................................................
Other Cities..................................................
Seventh District—Unadjusted...............
Adjusted...................
Sept.
1936
Aug.
1936
July
1936
97
No. of
Firms
Meat Packing—(U. S.)—
Sales (in dollars).............................................
94
91
May
1936
Apr.
1936
Sept.
1935
Aug.
1935
July
1935
June
1935
May
1935
Apr.
1935
91
85
85
86
84
82
83
86
82
June
1936
..
..
..
..
12
12
21
21
85
94
50
73
86
96
48
69
77
85
53
77
74
80
56
82
64
68
56
81
59
60
61
89
39
39
37
66
38
37
36
53
33
32
38
55
27
25
39
57
34
31
43
65
38
38
48
72
..
8
274
183
154
170
176
156
196
133
100
117
127
115
..
..
12
12
91
89
89
72
100
65
60
61
67
59
62
64
61
64
61
56
74
44
43
39
50
46
43
54
..
59
103
104
101
98
114
111
145
133
140
120
89
99
112
107
131
130
153
134
173
141
144
130
99
94
..
..
..
28
11
12
74
96
83
77
84
74
85
90
76
70
94
77
65
102
76
66
88
78
81
75
76
72
71
77
74
71
70
68
76
70
69
76
74
66
72
73
...
...
...
27
5
4
...
...
...
41
82
82
84
134
116
94
83
96
94
72
81
83
77
71
75
93
63
72
73
68
59
65
91
87
93
93
87
79
87
89
86
100
97
90
86
90
88
84
102
94
93
81
89
84
73
110
95
80
71
81
79
63
74
77
69
69
68
85
55
58
64
59
52
56
78
76
78
79
75
71
76
77
73
92
88
76
75
78
77
75
96
88
85
75
81
76
31
118
72
163
127
182
128
205
132
199
142
227
19
83
62
149
94
153
100
165
104
147
132
175
Automobile Production—(U. S.)—
Passenger Cars................................................
Trucks................................................................
Building Construction—
Contracts Awarded (in dollars):
Residential....................................................
Total...............................................................
...
. ..
39
54
59
77
36
72
43
58
40
61
35
54
21
43
17
42
20
38
26
34
18
33
16
36
Iron and Steel—
Pig Iron Production:*
Illinois and Indiana...................................
United States............................................ .
Steel Ingot Production—(U. S.)*.............
.. .
...
. .
103
93
120
97
89
121
101
85
113
101
88
115
100
87
117
94
82
114
68
60
85
65
58
81
53
50
66
59
53
68
67
57
73
65
57
76
♦Average daily production.
Page 7
NATIONAL SUMMARY OF BUSINESS CONDITIONS
INDUSTRIAL PRODUCTION
(By the Board of Governors of the Federal Reserve System)
T/'OLUME of industrial production was maintained in September and emV ployment at factories increased seasonally. Distribution of commodities to
consumers increased. Commercial loans of city banks showed further growth.
Production and Employment
50
Index of physical volume of production, adjusted for
seasonal variation, 1923-1925 averages 100. By months,
January 1929 to September 1936.
PER CENT
120
PER CENT
--
120
FACTORY EMPLOYMENT AND PAYROLLS
Employment
Payrolls
1934
Indexes of number employed and payrolls, without
adjustment for seasonal variation, 1923-1925 averages
100. By months, January 1929 to September 1936.
Indexes compiled by the United States Bureau of Labor
Statistics.
MUONS Qf DOLLARS
MILLIONS OF DOLLARS
600
CONSTRUCTION CONTRACTS AWARDED
Industrial output in September, as measured by the Board’s seasonally ad
justed index, was 109 per cent of the 1923-1925 average, approximately the
level of the two preceding months. Output of steel was about the same as in
August and in the first three weeks of October the rate of activity rose to a
higher level than at any time since 1930. Automobile production showed a
sharp seasonal decline in September and a considerable seasonal advance in the
first three weeks of October. Production of lumber and cement showed a
further rise and increases in activity were also reported at meat-packing
establishments and at cotton and silk textile factories. At woolen mills there
was little change in production, although an increase is usual in September.
Output of coal increased more than seasonally, and crude petroleum production
continued in large volume.
Factory employment increased seasonally in September and payrolls were
maintained at the August level. The number employed in most industries
producing durable goods continued to increase, while at automobile factories
there was a seasonal decline. Employment decreased at woolen mills and
showed a smaller increase than is usual at this season at cotton mills and at
establishments producing women’s clothing.
Value of construction contracts awarded, as reported by the F. W. Dodge
Corporation, declined somewhat further in September from the relatively high
level reached in the middle of the year. There was a decrease in awards for
residential building, reflecting chiefly a smaller volume of contracts for apart
ment construction which in August had included several large publicly-financed
projects. Awards for non-residential work declined, partly as a result of a
reduction in contracts for public works and utilities which have been in large
volume during recent months.
Agriculture
Crop conditions improved somewhat from September 1 to October 1, ac
cording to the Department of Agriculture, but estimates for corn and many
other crops are still considerably below the harvests of last year. The cotton
crop is estimated at 11,600,000 bales, an increase of 500,000 bales from the
estimate made a month earlier and of 1,000,000 bales from the 1935 crop.
Total cash farm income, including all Government payments, is estimated by
the Department of Agriculture at $7,850,000,000 for the calendar year 1936 as
compared with $7,090,000,000 in 1935.
Distribution
All Other
Residential
1929
1930
1931
1932
1933
1934
1335
1936
Three-month moving averages of F. W. Dodge data
for value of contracts awarded in 37 Eastern States,
adjusted for seasonal variation. Latest figures based
on data for August and September and estimate for
October.
BH.UOH5 Of DOLLtRS
MEMBER BANK CREDIT
■ILUOWS Of DOLLAM
Totol Loons
Investments
Demand DepositsI Adjusted
Distribution of commodities to consumers increased by more than the usual
amount in September, following a less than seasonal rise between July and
August. Sales at department and variety stores and by mail order houses
serving rural areas were in larger volume in September’
Volume of freight carried by railroads increased, reflecting larger shipments
of coal, ore, and miscellaneous freight and a decline in loadings of grain.
Commodity Prices
The general level of wholesale commodity prices has shown little change in
the last two months. From the middle of September to the third week in
October sugar and butter prices declined, and there were decreases also in
prices of hogs and pork, as is usual at this season. Price advances were
reported for leather and coke and higher prices for some finished and semi
finished steel products became effective on October 1.
Bank Credit
U S Govt Obligations
1
txjiunces S,
Bonks in UOl
.Time Deposits
U S Govt Deposits
Other Loans
to Customers
Loans on SeT
to Customers
Street Loar
Bd d foes"
Wednesday figures for reporting member banks in
101 leading cities. September 5, 1934, to October 14,
1936. Loans on real estate, loans to banks, and ac
ceptances and commercial paper bought included in total
loans and investments but not shown separately.
Page 8
Loans of reporting member banks in leading cities, other than loans on
securities, continued to increase in September and the first half of October.
On October 14 the volume of these loans was more than $400,000,000 larger
than on July 29. About half of this increase was at New York City banks
and the remainder principally at banks in western and southern cities. Hold
ings of United States Government obligations have declined in recent weeks
at New York City banks and have increased somewhat at other banks. Deposits
of reporting banks have continued to increase.
Excess reserves of member banks increased by $410,000,000 in the five weeks
ending October 21, reflecting a reduction of $300,000,000 in Treasury holdings
of cash and balances at the reserve banks and an increase of $250,000,000 in
monetary, gold stock, the effects of which were partially offset by a seasonal
increase in money in circulation and a further growth in required reserves.
@FedFRASER