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MONTHLY REVIEW
o Ce it a dB s e s Cn itio s
f r d n uin s o d n
S e c o n d

F e d e r a l

R e s e r v e

D is tr ic t

Federal Reserve Bank, New York
M o n e y M a r k e t in M a r c h
During the past month there has been a further mod­
erate rise in short term money rates, but the change in
interest rates that attracted considerably more attention
was the further rise in yields on long term high grade
bonds, which has been fully as great as the average ad­
vance in short term money rates during the past two
months. Ordinarily long term interest rates are much
more sluggish than short term rates, and in general move
within a much narrower range.
As the accompanying diagram indicates, the increase
in yields on United States Government bonds and on the
highest grade corporation bonds during the past two
months shows some similarity to other movements in bond
yields that have occurred during the past few years.
The moderate rise in short term money rates that has
occurred during the past few months probably reflects
more accurately than bond yields the extent of the
change in the money market situation. There is still
a large volume of excess reserves in member banks, but
the distribution of the remaining excess is somewhat
uneven and has led to some shifting of earning assets
between banks, and to some extent from banks to other
investors. Partly in reflection of this situation, and
partly in response to changes in other money rates, bill
dealers raised their buying and selling rates on bankers
acceptances twice during March, so that the current
rates are now about the same as those prevailing early
in 1934. This rise in open market bill rates has placed
the rates for unindorsed bills slightly above the rates
at which this bank will purchase indorsed bills, so that
it is now possible for banks or bill dealers in need of
funds to obtain such funds without penalty by selling
bills to the Reserve Banks. This relationship of open
market and Reserve Bank bill rates, therefore, tends
to have a stabilizing effect on the money market. Yields
obtainable on Treasury bills also rose during March
to about the levels prevailing at the beginning of 1934,
and open market commercial paper rates advanced
slightly during the month. The average rate charged
by the large New York City banks on direct loans to
customers, however, remained unchanged.
The recent rise in yields on long term bonds is shown
in perspective in the diagram. Under the pressure of
an extraordinarily large volume of funds seeking invest­
ment and aided by business recovery, bond yields had
previously declined with only comparatively minor inter­




April 1,1937
ruptions for about five years, although during the last
three years short term rates remained practically
unchanged. Even after the rise of the past two months,
long term interest rates are still the lowest in many
years, with the exception of the period since the autumn
of 1935 or the early months of 1936. Short term inter­
est rates also are still considerably lower than at any
time in the 30 years preceding the depression.
M a r . 31, 1936 Feb. 27, 1937 M a r . 30, 1937
Stock Exchange call loans..........................
Stock Exchange 90 d ay lo an s...................
P rim e com m ercial paper— 4 to m onths
B ills— 90 d ay unindorsed ...........................
Custom ers’ rates on com m ercial loans
(A verage rate of leading banks a t
m id dle of m o n th ).................................
T reas u ry securities:
M a tu rin g Septem ber (y ie ld )................
M a tu rin g F e b ru a ry 1938 ( y ie ld ) . . . .
A verage yield on T reas u ry notes (1-5
y e a rs ).............................................................
A verage yield on T re a s u ry bonds (m ore
th a n 5 years to earliest call d a t e ) . . . .
A verage ra te on late st T reas u ry b ill
sales 273 d ay issue....................................
F ed eral Reserve B a n k of N e w Y o r k re­
discount r a t e ...............................................
F ed eral Reserve B a n k of N e w Y o rk b u y ­
ing ra te for 90 day indorsed b ills . . . .

6

1

*1 X
X
ys

1
1

*1 X
X

*1 X

5 /1 6

9 /1 6

1 .7 1

1 .7 1

1 .7 1

N o yield

N o yield

0.21

0 .0 8
0 .5 2

0.68

1.00

fl.2 9

2 .3 8

2.21

2 .5 6

0 .1 3

0 .3 9

0 .6 4

1H

1H

1H

Vi

X

* N o m in a l f Change of + 0 .0 8 fro m previous yields due to the dropping of the 3
per cent T reas u ry note issue of M a rc h 15, 1938 fro m the average as i t m atures
w ith in one year.
PER CENT

1929

1930

1931

1932

1933

1934

1935

1936

1937

O ffering R ate on N in e ty D a y B ankers A cceptan ces and A v era g e Y ield s
on T reasu ry and H ig h Grade Corporation B onds (M o o d y ’ s
In ve sto rs Service data for A a a corporate bonds and
Federal R eserve B an k o f N ew Y o r k average yield
on T rea su ry bonds over 5 years* term to
call date or m a tu rity )

26

MONTHLY REVIEW, APRIL 1, 1937

E xcess R eserves
The volume of excess reserves held by member banks
has fluctuated widely during the past month, especially
in the New York City banks. At the end of February,
despite substantial withdrawals of funds by out of town
banks, the principal New York City banks had about
$800,000,000 of excess reserves. The March 1 increase
in reserve requirements, together with some further
outflow of funds to other parts of the country, reduced
the amount to about $435,000,000, and a further reduc­
tion to about $350,000,000 occurred in the next few days,
largely as a result of the usual first of the month settle­
ments, including the collection of interest and dividend
checks drawn on the New York banks. In the remainder
of the month excess reserves in New York fluctuated
between about $335,000,000 and $470,000,000, reflecting
Government collections and disbursements and move­
ments of funds between New York and other parts of
the country. In the latter part of March, following some
further reduction during the course of the month, the
total balances of out of town banks in the principal
New York City member banks were below $1,700,000,000,
a reduction of approximately $200,000,000 from a month
previous, and of about $475,000,000 from the high point
of last November.
For the country as a whole, excess reserves of member
banks were reduced from about $2,100,000,000 near the
end of February, to a little over $1,300,000,000 early in
March, but a moderate increase followed, and on March
17 the amount rose to approximately $1,450,000,000, due
to a temporary excess of Treasury disbursements over
receipts. In the following week excess reserves declined
again to $1,270,000,000, largely as a result of Treasury
operations including further income tax collections and
a withdrawal of funds from Government depositaries;
Government deposits in the Reserve Banks, which had
been reduced on March 17 to about $87,000,000, rose on
March 24 to $279,000,000. Toward the end of the month
excess reserves were equal to about 15 to 20 per cent
of required reserves in the large New York City mem­
ber banks, and averaged about 35 per cent for all other
member banks.

last year, but is probably attributable in part to the
substantial reduction in the excess reserves of the New
York banks, which has resulted partly from increased
reserve requirements and partly from the heavy with­
drawals of out of town bank funds referred to above.
The loans of these banks, however, have shown a
renewed increase in recent weeks. Security loans in­
creased $76,000,000 in the four weeks ended March 24,
probably reflecting, at least in part, borrowings by Gov­
ernment security dealers in connection with the March
Treasury financing. All other loans, including chiefly
borrowing by business organizations, increased $91,000,000 to a level slightly above the high point of last Decem­
ber and $400,000,000 above a year ago.
B ills and Commercial P aper
Bill dealers advanced their quotations for bankers
acceptances on March 18 and again on March 23.
The increases in rates for the month were 3/16 per
cent in the case of 30 day bills, about % per cent for
3, 4, 5, and 6 month bills, and 5/16 per cent for 60 day
bills. The current offering rate of 9/16 per cent for 90
day unindorsed acceptances compares with the low of
Ys per cent from October 1934 to July 1936, and with
a buying rate at the Federal Reserve Bank of New York
of
per cent for 90 day indorsed bills, a rate which has
been maintained without change since October 1933.
After the second increase in market rates, a small amount
of bills was sold by an acceptance dealer to the New York
Reserve Bank. The higher rates for bills accelerated
the investment demand for acceptances and retarded
the movement of bills into the market.
The volume of bills outstanding increased $14,000,000
further during February to $401,000,000, the highest
level since April 1935. The February increase was the
sixth consecutive monthly increase, and the first increase
over January in a decade. A rise in the amount of
import bills outstanding to the highest figure since
December 1931 accounted for the contraseasonal advance
in total bills outstanding.
(M illio n s of dollars)
T y p e of acceptance

M ember B ank Credit
H oldings of United States Government securities by
the weekly reporting New York City member banks
declined $240,000,000 further in the four weeks ended
March 24, reflecting largely the redemption of Treasury
bills maturing on March 16 to 18, which had been held
by the New York City banks in large volume. The Gov­
ernment security holdings of these banks have shown a
generally diminishing volume since the beginning of
last July and are now about $800,000,000, or 20 per cent,
below the high point, and $250,000,000 below the volume
of a year ago. This reduction may be attributed partly
to the reduced offerings of additional Government securi­
ties and the increased demand for such securities on the
part of other investing institutions since the middle of




Dom estic sh ipm ent.......................................
D om estic warehouse c r e d it.......................
D o lla r exchange..............................................
Based on goods stored in or shipped
between foreign co u n tries.....................
T o t a l............................................

Feb. 1936

Jan. 1937

Feb. 1937

114
94
9
72

141
83
16

158
85

77

77

377

387

401

2
8
6

68
2

11
6
8
2

A gradual upward tendency in commercial paper
rates continued in evidence during March, and by the
last week of the month the rate for average grade prime
four to six month commercial paper had become estab­
lished at 1 per cent, as compared with % per cent pre­
viously. Dealers’ acquisitions of new paper continued
to increase during March and again represented bor­
rowings by a diversified list of business enterprises.

FEDERAL RESERVE BANK OF NEW YO R K

Except for a short period immediately before the rate
rise, bank investment demand for business notes was
such that the new paper currently acquired by dealers
for resale moved quickly into investment portfolios.
At the end of February commercial paper houses
reported a total of approximately $268,000,000 of paper
outstanding, an increase of about 10 per cent over
January and of 52 per cent over the total a year ago.
The increase between January and February, which
has been exceeded by only one other February increase
since the inception of the reports, followed advances
of approximately 13 per cent each in December and
January, and raised the amount of paper outstanding
to the highest level since August 1931.
Government Securities
In March, for the first time since the summer of 1935,
a substantial recession in Goverment bond prices oc­
curred. Ever since the high point was reached in the
first part of December, Treasury bond prices had been
gradually receding, but the extent of the decline through
February— about % of a point— was moderate as com­
pared with the decline that occurred in the first three
weeks of March, which averaged 3 % points. The total
drop from the December high to the March low thus
amounted to approximately 4 % points, and the average
yield on Treasury bonds of more than five years’ term
to call date or maturity advanced from 2.10 per cent to
2.58 per cent.
Yields on United States Treasury notes rose somewhat
further during March. The extent of the March rise
was somewhat less than in Treasury bond yields, follow­
ing a more rapid rise in note yields between December
and February. Toward the end of March, the average
yield on Treasury notes of one to five year maturity stood
at 1.29 per cent as compared with the November 1936
low of 0.61 per cent. There was also a continued rise in
the rates at which weekly issues of Treasury bills were
awarded. In the case of sales of 273 day bills the rate
on the issue dated March 24 was 0.71 per cent, which
compares with 0.39 per cent on the last issue of Febru­
ary, and a low of 0.08 per cent last November. On the
273 day issue dated Marcli 31 the average rate was
slightly lower at 0.64 per cent.
Treasury financing operations on the March quarterly
tax date were limited to the issuance of $484,000,000 of
2 y 2 per cent Treasury bonds of 1949-53 (additional
bonds of the issue originally sold last December) in ex­
change for 3 per cent Treasury notes maturing April
15, 1937. About 96% per cent of the April 15 notes
outstanding were exchanged, substantially the same pro­
portion as on other recent exchange offerings, and con­
sequently only $19,000,000 of April 15 notes remain to
be redeemed on the maturity date. No new cash was
raised by Treasury security financing on March 15, and
Treasury bill financing in March resulted in a temporary
net reduction of $50,000,000 in the volume of outstanding




2
7

bills. On March 16, 17, and 18, a total of $300,000,000
of Treasury bills matured and were retired out of income
tax receipts by the Treasury, but on March 3 the Treas­
ury began to issue each week $50,000,000 more Treasury
bills than matured, thereby offsetting $250,000,000 of
the bill maturities on March 16-18. Assuming the con­
tinuance of the issue of an additional $50,000,000 of bills
in the first week of April, a total of $300,000,000 of
Treasury bill maturities will again have been arranged
to fall in the next tax period— just following June 15—
to offset income tax collections.
Security M a rk e ts
Coincident with the decline in Government bond prices,
quotations for corporate and municipal fixed interest
securities receded considerably during the first three
weeks of March. Price averages including various grades
of domestic corporation bonds declined more than 2
points during this period, following earlier recessions
of 1 to 2 points from the January highs which marked
the highest levels for many years. Both the best grade
and lower grade bonds were subject to price weakness
in March, and both classes have declined considerably
from their January highs. Expressed on a yield basis,
Aaa corporation bonds declined from a low yield of 3.07
per cent in January to a yield of 3.39 per cent on March
23, and Baa bonds receded from a 4.46 per cent basis to
a 4.81 per cent yield, according to data computed by
Moody’s Investors Service. The higher yields reached
are about the same as prevailed in the early part of
1936. Meanwhile, the yield on high grade municipal
bonds, as compiled by Standard Statistics Company, rose
further in the first three weeks of March to 2.79 per cent,
as compared with about 2.62 per cent at the end of Feb­
ruary, and a low of 2.29 per cent in the first week of
January. The level reached in March in this case also
was the highest since the opening months of 1936.
Stock prices continued to rise during the first ten days
of March, in contrast to the decline in bond prices, and
as a result the general level of share prices reached a
new high since October 1930. During this first part of
March, both industrial and railroad shares advanced,
while the public utilities showed relatively little change.
Between the 11th and 22nd of March, however, there
was a sizable recession in stock prices, and despite some
subsequent upturn, coincident with the recovery in bond
prices, the general average of stock prices toward the
close of the month was about 2 per cent lower than at the
beginning of the month; the railroad stocks were the
only major group to show a net advance for the month.
N e w F inancing
A considerable shrinkage in the volume of new secur­
ity flotations occurred during March accompanying the
development of uncertain market conditions. It was re­
ported that the offering of a number of issues had been
postponed, or registration statements with the Securities

28

M ONTHLY REVIEW, APRIL 1, 1937

and Exchange Commission withdrawn, because of mar­
ket conditions. The total of new bond issues reported
to be so held up was about $160,000,000, so that a 4‘ back­
log’ ’ of new issues was built up for offering when con­
ditions in the bond market are more favorable.
The total of new issues offered in March amounted to
approximately $315,000,000 excluding $69,000,000 of
Conversion Office for German Foreign Debt bonds issued
in exchange for past due coupons on certain German
securities. This compares with more than $600,000,000
of issues in February and $775,000,000 in March 1936.
The most important issue of the month, both because of
its size and the particular time that it reached the offer­
ing stage, was the $130,000,000 Philadelphia Electric
Company 3 % per cent 30 year refunding bond issue.
This issue was offered on March 11 at a price of 102%,
giving a yield to maturity of 3.37 per cent. Prices of
outstanding bonds had declined in the previous part of
March and declined further after March 11, so that the
distribution of this large issue tended to be somewhat
slow, but nevertheless within two weeks after the original
offering it appears that the issue was fully absorbed,
although apparently in part at some concession from the
price at which it was offered by the underwriting syn­
dicate.
Also included in the March total of new financing was
an issue of $15,000,000 State of New York 3 per cent
grade crossing elimination bonds, maturing in from 1
to 50 years, which were awarded by the State at an inter­
est cost of 2.96 per cent and immediately reoffered in
the market at prices to yield from 1 to 3 per cent, accord­
ing to maturity. The 10 year maturity in the public
offering of bonds was priced to yield 2.40 per cent, which
compares with a 1.50 per cent yield on 10 year New York
State bonds included in a sale of last September. Dis­
tribution of the March issue of bonds was reported to
have progressed rapidly.

sulted in a small outflow of funds in 1936, reversing the
1935 inflow.
A marked change took place in the balance of payments
on current account between 1936 and 1935, a net deficit
of $132,000,000 in 1936 replacing a net surplus of
$208,000,000 in 1935. Merchandise exports increased in
value by nearly 8 per cent, while imports increased by
approximately 18 per cent, reducing the export surplus
in merchandise trade from $236,000,000 to $34,000,000.
The increases in sales of American products abroad were
recorded entirely among semimanufactured and manu­
factured goods, sales of raw materials and foods declin­
ing slightly from $742,000,000 in 1935 to $726,000,000
in 1936. The rise in the value of imports, however, was
more evenly spread among the various classes of com­
modities entering that trade, raw materials rising 26 per
cent, semimanufactured goods 20 per cent, manufac­
tured foodstuffs 20 per cent, manufactured goods 15 per
cent, and crude foodstuffs 8 per cent.
Recovery in the United States also resulted in a sub­
stantial increase in the expenditures of American tourists
abroad, and in a small rise in remittances of immigrants
to relatives in foreign countries. No change was recorded
in net interest and dividend receipts from abroad, the
rise in profits on American capital abroad being offset by
higher rates of return paid to foreign owners of increas­
ing amounts of American securities. Payments for net
silver imports fell to $180,000,000 in 1936 from $336,000,000 in 1935, and when these payments are added to the
deficit on current account, the aggregate net payments
to be made to foreign countries for trade in commodities
and services other than gold amounted in 1936 to $312,000,000 as opposed to $128,000,000 in 1935.
The estimated balance of payments is shown in the
following table for 1935 and 1936.
N e t figures in m illions of dollars
( + indicates am ounts p a y a b le b y foreigners to U . S., and — indicates am ounts
p ayable b y U . S. to foreigners on specified transactions)

B a lan ce o f P a y m e n ts o f th e U n ite d States
1935

The net import of capital into the United States in
1936 amounted to $1,141,000,000 as compared with $1,536,000,000 in 1935, according to preliminary estimates
of the balance of payments of the United States recently
issued by the Department of Commerce. Accompany­
ing this inflow of capital, the recorded movement of gold
into the country amounted to $1,030,000,000, after adjust­
ment for reported earmarking operations, which may be
compared with a gold inflow of $1,739,000,000 in 1935.
The character of the capital import movement to the
United States changed markedly in 1936. Whereas
in 1935 transactions in short term banking funds had ac­
counted for $970,000,000, or 63 per cent of the total, in
1936 American banks’ and bankers’ net liabilities to
foreigners rose by $404,000,000, or 35 per cent of the
total capital inflow. The inflow of capital through secur­
ity operations was much heavier in 1936 than in the
previous year, amounting to $792,000,000, or 69 per cent
of the total reported inward movement of capital, as
compared with $462,000,000, or 30 per cent, in 1935.
Other reported capital transactions, consisting of trans­
actions reported by exporters, importers, industrial and
commercial concerns, and by Government agencies, re­




I.

C u rre n t Account
M erchand ise tr a d e .....................................................
T o u ris t exp enditures.................................................
Im m ig ra n t rem ittances and ch a ritab le con tri­
butions.....................................................................
Incom e fro m foreign in v e s tm e n ts .......................
O th e r cu rren t ite m s ...................................................

1936

236
292

+
—

34
373

—
+
+

115
375
4

—
+
—

138
375
30

Balance on curren t a c c o u n t..............
II.

+
—

-j-

208

—

132

C a p ita l Account
Sh ort te rm ban king fu n d s ......................................
Security transactions................................................
C u rren cy shipm ents and receip ts........................
O th e r reported cap ital m ovem en ts.....................

+
+
—
+

970
462

+
+
+
—

404
792

B alance on cap ital account................

1

105

20

75

+ 1 ,5 3 6

+ 1 ,1 4 1

III.

S ilv e r...............................................................................

—

—

IV.

G old shipm ents and e a rm a rk in g s ............................

— 1,739

— 1,030

V.

E rro rs and omissions.....................................................

+

+

336

331

180

201

G o ld M o v e m e n t
The inflow of gold into the United States continued
during March in somewhat larger volume than in the
previous month. Imports affecting the monetary gold
stock totaled $101,100,000, of which $76,600,000 from
England, $5,400,000 from Egypt, $4,200,000 from Can­
ada, $3,700,000 from India, $1,200,000 from Bolivia,

29

FEDERAL RESERVE B A N K OF N EW Y O R K

$1,100,000 from Belgium, and $700,000 from Australia
were received at New York, and $5,700,000 from Japan,
$2,100,000 from Australia, and $300,000 from China
arrived on the West Coast. Part of the gold received
from England proved to be of Russian origin.
These imports, supplemented by receipts from other
sources, including domestic newly mined and scrap gold,
and by the release of approximately $200,000 from
foreign account earmarkings, resulted in an increase of
about $140,000,000 in the monetary gold stock of this
country during the month. The Treasury’s daily state­
ment of March 27 shows $318,400,000 of “ inactive gold”
held in the general fund.
Business Profits
Accompanying continued recovery in the volume of
production and trade and some advance in commodity
prices, profits of 727 industrial and mercantile compan­
ies in 1936 rose 50 per cent over the 1935 level, or virtu­
ally the same percentage gain as occurred between 1934
and 1935. The net profits of these companies rose 26
per cent above the 1930 total, but remained 26 per cent
below the 1929 figure. The number of individual com­
panies reporting net losses in 1936 amounted to 7.6 per
cent of the total tabulated, as against 15.7 per cent of
the total in 1935.
All except 4 of the 37 groups of industrial and mer­
cantile companies shown in the accompanying table had
larger profits in 1936 than in the previous year, and in
several instances the percentage increases were very
large. Prominent among the groups reporting increases
were the aviation, heating and plumbing, railroad equip­
ment, chain restaurant, tire and rubber, shipping, and
steel companies.
The Class I railroads, following deficits sustained in
each year from 1932 to 1935, earned a moderate amount
in excess of interest and other fixed charges in 1936. This
amount, however, was only about one-third as large as
in 1930 and one-fifth of the 1929 net income. Net income
of 62 public utility companies other than telephone com­
panies rose 10 per cent in 1936, but remained 28 per cent
below the 1930 total and 30 per cent less than in 1929.
AUTOMOBI LES
& PARTS

BUILDING
EQUIPMENT

100

10
0

ELECTRICAL
EQUIPMENT

10
0

(Net profits in millions of dollars)

C o rp o ra tio n G ro up
A g ric u ltu ra l im p lem en ts................
A u to m o b ile s ........................................
A u to m o b ile parts and accessories
(excl. tires) ...................................
B a k e ry p ro d u c ts ...............................
B u ild in g equ ipm ent and supplies.
C hem icals and drugs.......................
C lo th in g and a p p a r e l......................
C o al and coke.....................................
C o n fe ctio n e ry.....................................
C o ntainers— m e ta l and glass
Copper and copper p ro d u c ts . . . .
E le c tric a l eq u ip m en t.......................
Food products— misc.......................
H e a tin g and p lu m b in g ...................
H ousehold eq u ip m en t and sup-

1935

1936

4
13

4 2 .4
3 2 9 .8

2 4 .8
1 7 3 .3

— 1 4 .8
— 3 3 .5

1 8 .1
2 0 0 .3

3 0 .5
3 1 4 .2

43

9 4 .2
1 .3
5 3 .8
1 9 .6
6 9 .2
2 0 6 .4

3 6 .1
— 9 .0
4 5 .9
1 9 .3
3 6 .3
15 9 .1
5 .9
5 .0
2 5 .8
4 0 .2

— 1 8 .6
— 2 .3
2 8 .7

4 8 .8
1 .5
2 0 .7
2 5 .2
2 4 .8
1 5 5 .3
4 .1
3 .1
1 6 .9
4 2 .6
1 4 .0
5 6 .5
8 4 .2

6 0 .0
4 .1
2 6 .9
3 0 .9
4 5 .9
2 0 5 .5
5 .9

10
10
6

36
32
9

12
11
7
10

1929

11.2

L e a th e r and shoes............................
M a c h in e ry and tools........................
M e a t p ac kin g .....................................
M e ta ls and m in in g (excl. copper,
coal and c o k e )...............................
M o tio n p ic tu re s .................................
Office e q u ip m e n t...............................
O il and p e tro le u m ............................
Paper and pap er p ro d u c ts ............
P rin tin g and p u b lis h in g .................
R a ilro a d e q u ip m en t.........................
R estaurants— c h a in .........................
R u b b er and tir e s ..............................
S ilk and hosiery.................................
Stores— m dse......................................
T ex tiles— m is c ...................................

12

1 0 .4
2 7 .2
4 2 .7
3 7 .1
16 7 .1
1 6 3 .6
4 1 .2

30

7 9 .9

31
36

1930

— 3 .3
— 3 .9
— 2 5 .8
— 0 .3

3 7 .9
7 .2
2 4 .6

5 4 .9
7 .3
4 7 .2

— 0 .9
— 1 9 .2

8 3 .1

1 0 8 .1
9 .7
2 9 .7
1 0 5 .7
9 .3
1 6 .7
1 9 .7
—

0.1

25
5

1 0 8 .2
1 3 .1
4 5 .2
1 5 7 .3
1 3 .0
3 8 .9
5 8 .5
9 .9
4 .9
2 5 .3

5 7 .2
1 1 .7
2 9 .0
6 8 .4

11

36
18
16
17
5

6
6
6

16
32
33

21
20

76

T o ta l 37 gro u p s.......................

727

10.1

1 0 .7
3 7 8 .7
1 4 4 .5
6 .9
7 8 .9
1 0 9 .1

1.0

6.2

3 2 .4
4 6 .8
7 .4
4 .2
— 1 6 .3
4 .7

0.2

0.2
2.0
2.8

—
1 7 8 .7 — 1 4 6 .2
8 7 .4
14 .1
— 1 4 .6
—
8 7 .8
8 4 .8
6 7 .4 —

11.0

6.0

2 3 .1
6 1 .7

8.0
1.8
0.2
0 .5
10.8
1.2

1 4 .2
—
—

8.8

5 9 .6
6 6 .5

6.0

144

8 9 6 .8

5 2 3 .9 — 1 5 0 .6

P u b lic u tilitie s , except tele­
phone companies, net incom e

62

3 1 7 .8

3 0 7 .0

2 3 7 .3

—

1 .4

1 6 9 .9

2 0 2 .4

2 2 1 .5

— Deficit

F oreign E x ch an ges
Although the downward revaluation of the French
franc at the end of September 1936 was followed for a
time by a moderate movement of funds to Paris from
foreign financial centers, this return movement appar­
ently was halted about the middle of October, and during
succeeding months the French franc was under persist­
METALS &
MINING

10
0

STEEL

C L A SS I
RAILROADS

10
0

’36

PR OFIT

’35

1929 ’3 2 ’3 5

An nu al N e t Profits or D eficits o f 7 2 7 Industrial and M ercantile C oncerns, C lass I R ailroads, and 6 2 Pu blic U tility C om panies
O th er T h an Telephone Com panies D u rin g 1 9 2 9 , 1 9 3 2 , 1 9 3 5 , and 1 9 3 6 ( 1 9 2 9 = 1 0 0 per cen t)




0.6
1.2

2 9 .6
5 .1
4 .5
1 4 3 .5
1 5 2 .4
1 7 .9
6 3 .4
9 6 .2

2 ,6 8 0 .8 1 ,5 6 3 .9 — 4 8 .0 1 ,3 1 1 .2 1 ,9 7 0 .1

Class I R ailroads, net incom e. .

'36

1929 ’3 2

2.1

4 .4
4 9 .1
1 1 8 .2

12
1929 '3 2 ’3 5

2 2 .5

2.1

0.2
11.8

— 3 .6
7 .1
— 1 5 .8
— 0 .9
—
— 1 8 .1

110.8

10.1

P R O F IT

DE FIC IT

2.8

1 7 .3
4 2 .6
2 7 .5
9 9 .1

— 2 1 .5
8 9 .4
— 1 7 .0

6 7 .9
2 .7

—

12.8

— 1 8 .7
7 2 .9
— 4 .8
— 6 .5
1 4 .3

9 5 .9
1 4 8 .8
1 5 .3

49

11
6

1932

22.0
2.8 — 8.8

4 3 .1
— 2 .4
3 4 .5

M iscellaneous.....................................

MACHINERY
& TOOLS

100

No.
of
Cos.

30

MONTHLY REVIEW, APRIL 1, 1937
PER C E N T

ent pressure, the stability of exchange rates being
maintained only through supporting operations under­
taken by the French exchange authorities. In this
respect developments in France were in contrast to the
experience of both Holland and Switzerland, where
substantial return movements of capital extending over
a period of several months followed a lowering of the
gold values of their currencies.
The pressure against the franc culminated on March 5,
when it was reported that the proceeds of the £40,000,000 credit extended to the French railways by the London
market at the end of January had been largely utilized
in supporting French exchange. On that day the franc,
which had closed at $0.0464% on March 4, dropped to
a low of $0.0452. Following a meeting of the French
cabinet, a new program designed to end the critical fiscal
and exchange situations was announced. This program
included provision for (1) the establishment of facilities
by which French holders of gold could dispose of their
holdings at the world price and without disclosing their
identity, (2) the flotation in the Paris market of a
national defense loan carrying an exchange guarantee,
stipulated in dollars and sterling and payable at prevail­
ing rates in either French or Swiss francs, (3) curtail­
ment of certain projected Government expenditures, and
(4) the appointment of a committee of experts to
administer the stabilization fund.
The announcement of this program and the French
Government’s success in marketing the new defense loan
brought about a reversal of the direction of the move­
ment of capital. In response to the return movement of
funds, the franc-dollar rate rose gradually from its low
of $0.0452 on March 5 to about $0.0459%, where it seems
to have been held by the French authorities through
purchases of sterling and dollars against sales of francs.
Apart from a slight reaction during the period of
most severe pressure against French exchange, the pounddollar rate was generally steady during March in the
neighborhood of $4.88%. The guilder also weakened
moderately during the early part of March but recovered
thereafter. On the other hand, both the belga and the
Swiss franc showed a firm tendency during the first few
days of the month, but both currencies subsequently
reacted moderately and showed little net change for
March as a whole.
E m p lo y m e n t and P ayrolls
In accordance with the customary seasonal tendency
employment and payrolls in representative New York
State factories advanced from the middle of January to
the middle of February, although the rate of increase in
the case of employment was slightly less than in some
previous years. The gain in the number of workers was
general, nearly all of the major industrial groups sharing
in the advance. In anticipation of an early Easter trade,
clothing manufacturers employed many additional work­
ers, and there were also pronounced employment gains in
the textile and chemical industries.
For the United States as a whole, the employment of
approximately 215,000 additional workers was reported
in the manufacturing and nonmanufacturing industries
surveyed by the Department of Labor, representing a
recovery of about 30 per cent of the reduction in the
preceding month. The February increase was concen-




A v era g e H ourly E arnings in U nited S ta te s Factories (B a sed
N ational Industrial C onference B oard and B ureau of Labor
S tatistics d a ta ; 1 9 2 6 — 1 0 0 per cen t)

on

trated almost entirely in the manufacturing industries
and the seasonally adjusted index of factory employment
computed by the Board of Governors of the Federal
Reserve System advanced approximately 1 per cent to
the highest level since December 1929.
An important feature of the employment situation in
recent months has been the more rapid increase in pay­
rolls than in employment, owing to the combined effect
of increased working hours and of wage rate increases
by many manufacturers. The accompanying diagram
shows the movement since 1929 of an index of hourly
wage rates in manufacturing industries. Wage rates
were slow in responding to the decline in industrial
production and employment following 1929, and it was
not until the final quarter of 1931 that the downward
movement became pronounced. Average wage rates fell
16 per cent from October 1931 to October 1932 and subse­
quently showed a further gradual decline. This tendency
extended through the second quarter of 1933, when the
volume of production and employment was rising rapidly,
and then, under the impetus of the N.R.A., wage rates
moved upward, sharply at first and then more moder­
ately. The rising tendency extended into 1935, and after
reaching a point 3 per cent above the 1929 average the
index followed a level course through the first ten months
of 1936. Since October, however, there have been wide­
spread wage advances and the index has moved up five
points more and is now 8 per cent above the 1929 average.
Since February, the last month shown on the diagram,
there have been important additional increases.
P rodu ction
During March the general level of industrial activity
continued the upward tendency which was resumed dur­
ing February, although output was restricted in some
lines by labor difficulties. Steel production extended
the rise that has prevailed with only minor interruptions
since last July; at the end of the month steel mills were
operating at about 90 per cent of capacity, and actual
output was close to the highest point previously recorded,
in the late spring of 1929. Unfilled orders were reported
as unusually large, owing to the efforts of consumers to
seek protection against future shortages. Cotton mills
also maintained a high rate of activity during March.
In the early part of the month it was reported that in­

FEDERAL RESERVE BANK OF NEW Y O R K

coming orders were considerably in excess of production,
and although new business later decreased, mills still car­
ried substantial backlogs of unfilled orders on their
books. Bituminous coal mining increased further in the
first three weeks of March, and during the same period
electric power output, instead of declining as in most
other years, maintained the February rate. On the other
hand, automobile assemblies, which generally rise at this
time of the year, were restricted by strikes taking effect
on March 8, and labor difficulties handicapped produc­
tion in some other industrial fields as well.
In February the general level of industrial activity
increased more than at this time in most other years,
with the result that the index of industrial production
of the Board of Governors of the Federal Eeserve Sys­
tem, adjusted for usual seasonal variations, rose two
points to 116 per cent of the 1923-25 average. The high
point of the index for the recovery period, attained in
December, was 121. Automobile assemblies gained fol­
lowing settlement of the General Motors strike on Feb­
ruary 11, bituminous coal output expanded, and the rate
of steel production was higher, although in the absence
of a preceding year end slackening the increase in steel
output was not as large as in many past years. Average
daily consumption of cotton by textile mills, already at
the highest level on record, advanced seasonally in Feb­
ruary.
(A djusted fo r seasonal variatio n s and usual year to year grow th)
1936
Feb.

Metals
P ig ir o n .................................................................
Steel........................................................................
L e a d ........................................................................

61
65
51

6
6

Automobiles
Passenger cars....................................................
M o to r tru c k s ......................................................

72
107

Dec.

Jan.

Feb.

110

112
112

103

110
116

62
71

95
119

principal cities, retail trade throughout the country con­
tinued to expand during the first part of the month, as
a result of Easter buying, and wholesale trade appeared
to have been active. For the first three weeks of March
shipments of merchandise and miscellaneous freight over
the railroads showed somewhat more than the usual
expansion, and car loadings of bulk commodities were
little changed, although there is ordinarily a decline at
this time of year.
In February, as the accompanying table indicates,
most indicators of general business activity and the
distribution of goods showed some recession.
(A djusted for seasonal variations, for usual year to year grow th,
_____________________ and where necessary for price changes)_____________________
1936
Feb.

P rim a ry D istrib u tion
C a r loadings, merchandise and misc.
C a r loadings, o th e r ...........................................

101
56
71

102p

D e p a rtm e n t store sales, U . S.......................
D e p a rtm e n t store sales, 2nd D i s t ..............
C h ain grocery sales..........................................
O th e r chain store sales...................................
M a il order house sales....................................
A d v e rtis in g ..........................................................
N e w passenger car reg istra tio n s.................
Gasoline consum ption r ...................................

Textiles and Leather Products
W o o l consum ption............................................
S ilk m ill a c t iv it y ...............................................
R a y o n deliv eries *..............................................

88
8
6

116
53
106
109r

Foods and Tobacco Products
M e a t p a c k in g ......................................................
W h e a t flo u r..........................................................
Tobacco products..............................................

76
92

88

87
73
94
90
94

138

121
6
6

124

109
140

117
141

135p
p
108
128p

87
81
93

82
84
98

74

69

83

83p
158

102
83
107

112
6
8

98p
59p
94p
94p

112
66

Miscellaneous
C e m e n t..................................................................
T ire s ........................................................................
N e w s p rin t p a p e r ...............................................
M ach in e tools......................................................
p P re lim in a ry

r Revised

40
67
79
105

81
143
82
245

200

* F o r q u a rter ended

In dexes o f Business A c tiv ity
During the first half of March department store sales
in the Metropolitan area of New York were well above
the corresponding period a year ago, but showed slightly
less than the usual increase over the February level after
allowance is made for the concentration of pre-Easter
buying in March this year, and other seasonal factors.
According to the Department of Commerce survey of 36




Feb.

84
85
67

78 r
78
69
104

80
79

90
90
69
98

89
89

102

88
8
6
6
6

80
80
73
89
77
69
79
82

100

63
42

74
50

42

42

69

72

71

69

48
67

44
75 p

N e w life insurance sales.................................
F a c to ry em ploym ent, U n ite d S tates .........
N e w corporations form ed in N . Y . S ta te r
B u ild in g contracts, residentia l.....................
B u ild in g contracts, o th e r ...............................
G eneral price le v e l* ..........................................
Com posite index of w a g e s *...........................
Cost of liv in g * ....................................................

68
8
8
68
21

85
124
103

r Revised

6
8
96
88
77
120p
68p

61

74
34
59

100

151
190
142

159
198
144

161
199
145

* 1913 average =

92
85
79
93p

97

100

lllp

99r
89
91
91
96

Jan.

42

p P re lim in a ry
93
115
85
85

Dec.

General Business A c tiv ity

Fuels
B itum ino us coal.................................................
A n th ra c ite coal...................................................
Petroleum , c ru d e ...............................................
Petroleum products r ........................................
E le c tric p o w e r....................................................

6
6

81
64
89

1937

D istrib u tion to Consumer

B a n k debits, outside N e w Y o rk C i t y . . . .
B a n k debits, N e w Y o rk C i t y . .....................
V e lo c ity of dem and deposits, outside N e w
Y o rk C i t y ........................................................
V e lo c ity of dem and deposits, N e w Y o rk

1937

119
65
85

31

75
51
76

68p

44
73 p
lO lp
72
39
65
161p

200p
145p

100; not adjusted for trend.

B u ild in g
Total building and engineering contracts awarded in
the New York and Northern New Jersey area declined
approximately 7 per cent in February, but on an average
daily basis the rate at which contracts were placed was
slightly higher than in January, although not to the
extent that is usually expected at this time of the year.
Residential building showed a decline of nearly 30 per
cent in the average daily rate of contract awards, as com­
pared with January, when the amount was greatly
increased by contracts for publicly financed housing
projects. In contrast to the decline in residential build­
ing, nonresidential work registered a substantial contra­
seasonal advance. Total contracts were 75 per cent
higher than in February 1936, when the volume of con­
tracts was especially affected by inclement weather. Con­
tracts for residential building and heavy engineering
projects in February were more than twice as large as
in the corresponding month last year; contracts for
public utility work, alone, were nearly six times as large
as in February of last year, the increase being wholly
due to the awarding of further contracts for subway
construction in New York City.
For the 37 States covered by the F. W . Dodge Corpo-

32

M ONTHLY REVIEW, APRIL 1, 1937

ration report, contracts awarded in February declined
to a greater extent than did the total for the New York
and Northern New Jersey territory. The decline, amount­
ing to 23 per cent, was accounted for by smaller contract
figures reported for each of the major building classifica­
tions. Compared with February of last year, however,
total contracts showed an increase of 33 per cent; resi­
dential construction, which more than doubled, recorded
the most pronounced gain. Privately financed projects
constituted 63 per cent of the total of all construction
work awarded in February, a proportion that has been
equaled only once since the summer of 1933.

year to year increase was slightly smaller than in January.
Department store stocks of merchandise on hand, at
retail valuation, were 20.7 per cent higher than last year,
the largest year to year increase since April 1934; large
increases in stocks were reported in most of the depart­
ments. Collections were slightly lower this year than last
in the department stores and also in apparel stores, fol­
lowing ahigher rate of collections in January.
Percentage
change
F e b ru a ry 1937
com pared w ith
F e b ru a ry 1936

P e r cent of
accounts
outstanding
Jan u ary 31
collected in
F e b ru a ry

C o m m o d ity Prices
Marked advances in the quotations for both ferrous
and nonferrous metals were an important factor in the
continued upward movement in general indexes of whole­
sale commodity prices during March. During the first
three weeks of the month the comprehensive Bureau of
Labor Statistics index of 784 quotations rose about 2 per
cent further, the metals group of this index increasing
about 4 per cent to the highest level since early in 1930.
The accompanying table shows the recent high points for
several individual metal prices, compared with the de­
pression low and previous high points. Most of the quo­
tations have reached levels two or three times the 1932-33
low, and in several cases are above the 1929 highs. All
these metals except tin, however, are considerably below
the highs established in 1920.
Spot Price
Scrap steel, P itts b u rg h (dollars a
t o n ) ......................................................
P ig iro n , composite price (dollars a
t o n ) ......................................................
Finished steel composite price
(cents a lb .) .......................................
Zinc, E . St. Louis (cents a l b . ) . . . .
L ead, N . Y . (cents a l b . ) .................
T in , straits, N . Y . (cents a l b .) . . .
Copper, dom estic electrolytic, N .
Y . (cents a l b .) ................................

1920
H ig h

1929
H ig h

193 2-3 3
L ow

R ecent
H ig h

2 9 .0 0

1 9 .7 5

8 .2 5

2 3 .7 5

4 7 .8 3 5

1 8 .7 1

1 3 .5 6

2 3 .2 5

4 .2 2 7
9 .5 0
9 .5 0
6 5 .0 0

2 .3 1 7
6 .8 0
8 .2 5
5 0 .3 7 5

1 .8 6 7
2 .3 0
2 .6 5
1 8 .3 5

2 .6 0 5
7 .5 0
7 .7 7 5
6 7 .0 0

1 9 .5 0

2 3 .8 7 5

4 .8 7 5

1 7 .0 0

Gains also occurred in several other actively traded
commodities in March. During the course of the month,
spot cotton rose about 1 % cents further to 15^4 cents a
pound, the highest price in seven years. Crude rubber,
increasing 5 cents to 27 cents a pound, and cash corn,
rising 15% cents to $1.26% a bushel, also reached their
highest levels in a number of years. Prices of silk, sugar,
and livestock likewise showed net gains, but closed the
month slightly below their March highs.

L o c a lity
Net
sales
N e w Y o r k .................................................................
B u ffa lo ........................................................................
R ochester..................................................................
S yracuse....................................................................
N o rth e rn N e w Jers e y ..........................! ..............
B rid g e p o rt.................................................................
Elsew here..................................................................
N o rth e rn N e w Y o rk S ta te ............................
Southern N e w Y o rk S t a t e ............................
C e n tra l N e w Y o rk S ta te ................................
Hudson R iv e r V a lle y D is t r ic t .....................
C a p ita l D is t r ic t .................................................
W estchester and S ta m fo rd ............................
N ia g a ra F a lls ......................................................




8.0
0.8

1936

1937

+ 2 2 .9
+ 1 8 .7
+ 1 8 .0
+ 1 3 .8
+
+ 5 .9
— 1 .4

4 5 .0
4 7 .2
4 6 .2
3 6 .8
4 1 .1
3 8 .9
3 1 .4

4 3 .9
4 6 .7
4 6 .0
3 8 .4
4 0 .7
3 8 .6
3 1 .1

20.6

2.8

A ll d ep artm en t stores.................................

+

7 .0

+ 2 0 .7

A p p a re l stores.................................................

+

5 .4

+

2.8

4 3 .3

4 2 .6

4 2 .3

4 1 .1

W h o le sa le T ra d e
Total February sales of reporting wholesale firms aver­
aged 17.9 per cent higher than last year, a larger increase
than in January. Sales of the shoe concerns, and yardage
sales of silk goods reported by the National Federation
of Textiles, recorded the most substantial gains over a
year previous since July 1933. The cotton goods firms
registered the largest year to year increase since Septem­
ber 1935, and the diamond concerns the largest increase
in a year. Sales of grocery, men’s clothing, and paper
firms also showed larger increases than in January, and
sales of the stationery concerns were reduced by a smaller
percentage than in the previous month. On the other
hand, hardware firms registered a smaller increase in
sales than in the two preceding months, and the jewelry
concerns recorded an increase which was considerably
less than in most months of the previous year.
Percentage
change
F e b ru a ry 1937
com pared w ith
Fe b ru a ry 1936

D e p a r tm e n t Store T ra d e
During the first half of March, total sales of the report­
ing department stores in the Metropolitan area of New
York were 7.8 per cent higher than in the corresponding
period a year ago, but somewhat less than the usual sea­
sonal advance from the February level appears to have
occurred.
In February total sales of the reporting department
stores in this district were 7 per cent larger than last
year, and after allowing for differences in the number
of shopping days between this year and last, the increase
in average daily sales was about 11 per cent, a larger gain
than in the preceding two months. Sales of the leading
apparel stores in this district were approximately 5 % per
cent higher than last year, and even on a daily basis the

+ 5 .6
+ 1 3 .6
+ 6 .4
+ 5 .7
+ 1 5 .0
+
+
+ 0 .4
+ 4 .9
+ 5 .8
+ 4 .0
+
— 1 3 .1
— 2 .3

Stock
on hand
end of
m onth

C o m m o d ity
G roceries..........................
M e n ’s c lo th in g ..............
C o tto n goods..................
R a yo n and silk goods.
Shoes.................................
H a rd w a r e ........................
S ta tio n e ry .......................
P a p e r .................................
D ia m o n d s ........................
J ew elry.............................
W eig h ted a v e ra g e .

Net
sales
+ 7 .2
+ 8 .2
+ 2 3 .4
+ 4 9 .7 *
+ 6 5 .0
+ 1 5 .4
— 0 .6
+ 1 7 .9
+ 5 3 .1
+ 1 3 .9
+ 1 7 .9

Stock
end of
m onth
+ 1 3 .0

+ 3 8 ’. 9
+ i 2 .7
+ 7 2 .4

P e r cent of
accounts
outstanding
Jan u ary 31
collected in
F e b ru a ry

1936

8 .9
6
49 .8

1937

.0
.1
.1
.6
.8
.8

37 .7
55 .4
25
35
56 .7
53

87
48
38
53 .7
28
33
56 .3
58.

5 5 .6

5 5 .4

.8
.2
.1
22.6 } 23 .5

* Quantity figures reported by the National Federation of Textiles, Incorporated,
not included in weighted average for total wholesale trade.

FED ERAL RESERVE

BANK

OF

NEW

YORK

MONTHLY REVIEW, APRIL 1, 1937

Business Conditions in the United States
( S u m m a r iz e d b y th e B o a r d o f G o v e rn o rs o f th e F e d e r a l R e s e rv e S y s te m )

V

O L U M E o f p r o d u c t i o n , e m p l o y m e n t , a n d t r a d e in c r e a s e d m o r e t h a n s e a s o n ­
a l l y i n F e b r u a r y a n d w h o le s a le p r ic e s o f i n d u s t r i a l c o m m o d it ie s c o n t i n u e d

to a d v a n c e .

Production

and

Employment

T h e B o a r d ’ s i n d e x o f i n d u s t r i a l p r o d u c t i o n , w h ic h m a k e s a l lo w a n c e f o r
c h a n g e s i n th e n u m b e r o f w o r k in g d a y s a n d f o r u s u a l s e a s o n a l v a r ia t io n s , w a s
1 1 6 p e r c e n t o f th e 1 9 2 3 -1 9 2 5 a v e ra g e i n F e b r u a r y as c o m p a re d w it h 1 1 4 in
J a n u a r y a n d a n a v e ra g e o f 1 1 5 i n th e la s t q u a r t e r o f 1 9 3 6 . A t s te e l m ills

Index N um ber of Production of M an u factu res
and
M inerals
Com bined,
A d ju ste d
for
Seasonal V ariation ( 1 9 2 3 - 2 5 average
— 1 0 0 per cen t)

a c t i v i t y c o n t i n u e d t o in c r e a s e i n F e b r u a r y a n d t h e f i r s t t h r e e w e e k s o f M a r c h
a n d , a l t h o u g h t h e g r o w t h w a s s o m e w h a t le s s t h a n s e a s o n a l, o u t p u t c u r r e n t l y is
a t a b o u t th e p e a k le v e l re a c h e d i n t h e s u m m e r o f 1 9 2 9 . A u to m o b ile p r o d u c tio n ,
w h i l e f l u c t u a t i n g c o n s id e r a b ly w i t h s t r ik e s a t i m p o r t a n t p l a n t s , h a s b e e n l a r g e r
f o r th e y e a r to d a te t h a n i n t h e c o rr e s p o n d in g p e r io d la s t y e a r . O u tp u t o f p la t e
g la s s i n F e b r u a r y s h o w e d a s h a r p r is e f r o m t h e l o w l e v e l o f t h e t w o p r e c e d in g
m o n t h s w h e n s t r ik e s c u r t a i l e d p r o d u c t i o n . A t t e x t i l e m i l l s a n d sh o e f a c t o r i e s
a c t i v i t y c o n t i n u e d a t a h i g h l e v e l , w h i l e o u t p u t a t m e a t p a c k i n g e s t a b lis h m e n t s
d e c lin e d s o m e w h a t f u r t h e r .
M i n e r a l p r o d u c t i o n in c r e a s e d , r e f l e c t i n g c h i e f ly
g r e a t e r o u t p u t o f c o a l a n d a f u r t h e r r is e i n c r u d e p e t r o l e u m p r o d u c t i o n .
V a l u e o f c o n s t r u c t i o n c o n t r a c t s a w a r d e d t h is y e a r , a c c o r d in g t o t h e F . W .
D o d g e C o r p o r a t i o n , h a s b e e n c o n s id e r a b ly l a r g e r t h a n a y e a r a g o , r e f l e c t i n g a n
in c r e a s e d v o lu m e o f p r i v a t e r e s i d e n t i a l b u i l d i n g a n d o t h e r t y p e s o f p r i v a t e
c o n s t r u c t i o n , w h i l e t h e v o lu m e o f p u b l i c l y f in a n c e d w o r k h a s b e e n s m a l le r .
F a c t o r y e m p l o y m e n t a n d p a y r o l l s i n c r e a s e d f r o m t h e m id d le o f J a n u a r y t o
th e m id d le o f F e b r u a r y b y m o re t h a n th e u s u a l s e a s o n a l a m o u n t. T h e n u m b e r
e m p lo y e d i n t h e m a c h i n e r y i n d u s t r ie s in c r e a s e d c o n s id e r a b ly a n d t h e r e w e r e
s m a l le r in c r e a s e s a t a u t o m o b i l e a n d p l a t e g la s s f a c t o r i e s .
I n th e n o n d u r a b le
g o o d s i n d u s t r ie s as a g r o u p t h e r e w a s a s e a s o n a l r is e i n e m p l o y m e n t .

Distribution
W h o lesa le Price Index o f U nited S tates B ureau
of Labor S ta tistic s ( 1 9 2 6 average = 1 0 0
per cen t)
BILLIONS
OF DOLLARS
8f

D e p a r t m e n t s t o r e s a le s i n c r e a s e d f r o m
J a n u a r y to F e b r u a r y a n d th e
B o a r d ’ s s e a s o n a lly a d j u s t e d i n d e x a d v a n c e d f r o m 9 3 t o 9 5 p e r c e n t o f t h e 1 9 2 3 1 9 2 5 a v e r a g e . S a le s a t v a r i e t y s to r e s a ls o in c r e a s e d m o r e t h a n s e a s o n a lly , w h i l e
m a i l o r d e r s a le s , l a r g e l y i n r u r a l a r e a s , s h o w e d le s s e x p a n s io n t h a n is u s u a l a t
t h is t i m e o f y e a r . T o t a l f r e i g h t c a r l o a d i n g s in c r e a s e d i n F e b r u a r y a n d t h e f i r s t
h a l f o f M a r c h , o w in g i n p a r t t o s e a s o n a l in flu e n c e s .

Commodity Prices
of

T h e g e n e r a l l e v e l o f w h o le s a le c o m m o d i t y p r i c e s a d v a n c e d f r o m t h e m i d d l e
F e b r u a r y to th e t h ir d w e e k o f M a r c h , r e f le c tin g p r i n c ip a ll y f u r t h e r s u b ­

s t a n t i a l in c r e a s e s i n t h e p r ic e s o f i n d u s t r i a l m a t e r i a l s . P r i c e s o f i r o n a n d
s te e l, n o n f e r r o u s m e t a ls , l u m b e r , c o t t o n , r u b b e r , a n d h id e s a d v a n c e d c o n s id e r ­
a b l y a n d t h e r e w e r e a ls o in c r e a s e s i n t h e p r ic e s o f c o t t o n g o o d s , p a p e r , a n d
f u r n i t u r e . W h e a t p r ic e s h a v e a d v a n c e d i n r e c e n t w e e k s f o l l o w i n g a d e c lin e i n
th e l a t t e r p a r t o f F e b r u a r y .

Bank C
redit
1932

1933

1934

1935

1936

1937

M em ber B ank R eserve B alances (L a te s t F igu res
are for M arch 2 4 )

O n M a r c h 1 , w h e n th e f ir s t h a l f o f th e re c e n t in c re a s e in re s e rv e r e q u ir e ­
m e n t s w e n t i n t o e f f e c t , exc e s s r e s e r v e s o f m e m b e r b a n k s d e c lin e d f r o m $ 2 , 1 0 0 , 0 0 0 ,0 0 0 t o a b o u t $ 1 , 3 0 0 , 0 0 0 , 0 0 0 . I n t h e n e x t t h r e e w e e k s , w h ic h i n c lu d e d t h e
M a r c h t a x c o lle c t i o n p e r i o d , exc e s s r e s e r v e s s h o w e d m o d e r a t e f lu c t u a t i o n s a r o u n d
t h e n e w l e v e l . I n c o n n e c t io n w i t h t h e i n c r e a s e i n r e s e r v e r e q u i r e m e n t s t h e r e
w e r e s o m e w i t h d r a w a l s o f b a n k e r s ’ b a la n c e s f r o m c i t y b a n k s b u t p r a c t i c a l l y
n o b o r r o w in g b y m e m b e r b a n k s f r o m th e R e s e rv e B a n k s .
H o l d i n g s o f U n i t e d S t a t e s G o v e r n m e n t o b l i g a t io n s a t r e p o r t i n g m e m b e r
b a n k s i n l e a d i n g c i t i e s d e c li n e d b y $ 2 8 0 ,0 0 0 ,0 0 0 i n t h e f o u r w e e k s e n d e d M a r c h
1 7 , a p a r t o f t h e d e c li n e r e f l e c t i n g l a r g e m a t u r i t i e s o f T r e a s u r y b i l l s . C o m ­
m e r c i a l lo a n s i n c r e a s e d f u r t h e r a t r e p o r t i n g b a n k s a n d o n M a r c h 1 7 w e r e a b o v e

A

la s t y e a r ’s h ig h le v e l re a c h e d o n D e c e m b e r 3 0 .
s e c u r it ie s in c r e a s e d s h a r p ly .

U
v
LL' ; ^
V.
*\

Money Rates

K
:SERVE BAtM DISCOUhJT RATE

—:
f

\_ J

/

—

..... .......
P

" " i
i
^COMMERCIAL PAPER RATE

----------------'^ACCEPTANCE RATE

M on ey R ates in the N ew Y o rk M ark et (M arch
rates are averages for the first 2 7 d a y s)




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5 /1 6

ro s e f r o m a f la t %

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day

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a c c e p ta n c e s

o f 1 p e r c e n t to 9 / 1 6 o f 1 p e r c e n t a n d c o m m e r c ia l p a p e r

p e r c e n t t o a r a n g e o f b e t w e e n % a n d 1 p e r c e n t.

B o n d y i e ld s , w h ic h u n t i l r e c e n t l y h a d b e e n n e a r
re a c h e d la s t D e c e m b e r, a d v a n c e d b y b e tw e e n % a n d
2 4 w e r e a t a b o u t t h e le v e ls p r e v a i l i n g e a r l y i n 1 9 3 6 .

th e e x tr e m e lo w p o in t
p e r cen t an d on M a rc h