Full text of Economic Policy Review (Federal Reserve Bank of New York) : August 1, 1936

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MONTHLY REVIEW
of Credit and Business Conditions
Second
F ed eral E eserve

M o n e y

F e d e ra l

F e d e r a l E e s e r v e B a n k , N eiv

A gen t

M a rk e t

in

R e s e rv e

in

excess

r e c o g n itio n
A tte n tio n

in

th e

m oney

m arket

s in c e

th e

m id d le

of

A u g u s t 1 ,1 9 3 6

Y ork

re d u c tio n

J u ly

D is t ric t

of

a v a ila b le

fo r

J u ly h a s b e e n fo c u s s e d la r g e ly o n th e 5 0 p e r c e n t in c r e a s e

a fte r

in c r e a s e

in m e m b e r b a n k r e s e rv e r e q u ir e m e n ts th e n a n n o u n c e d b y

m oney

th e

1934

B oard

of

G overn ors

o f th e

F ed era l R eserve

S y ste m

t o t a k e e ffe c t a f t e r t h e c lo s e o f b u s in e s s A u g u s t 1 5 .

The

a n n o u n ce m e n t w a s fo llo w e d b y a b r ie f a n d v e r y m o d e ra te
r e c e s s io n

in

p r ic e s

of

G overn m en t

s e c u r itie s

and

by

th e

ra tes

fa c t

th a t

e m p lo y m e n t
in

had

w hen

reserves,

th e

a ttr ib u te d

w ill

reserve

show n

excess

is
th e

r e m a in

p r im a r ily

of

very

r e q u ir e m e n ts .

little

reserves

v o lu m e

ch an ge

w ere

in

id le

to

m oney

la r g e

even

S h o rt term

s in c e

th e

end

a p p r o x im a te ly

of
th e

v o lu m e w h ic h w ill p r o b a b ly r e m a in a ft e r th e 5 0 p e r c e n t
in c r e a s e in r e s e r v e r e q u ir e m e n ts .

a

S in c e

th e

B o a r d ’s

an n ou n cem en t

th ere

has

been

a

s lig h t a d v a n c e in a c c e p t a n c e ra te s , b u t o th e r m o n e y ra te s

g r a d u a l in c r e a s e in th e v o lu m e o f e x ce ss r e s e r v e s h e ld b y

r e m a in e d

m e m b e r b a n k s a n d o n J u ly 29 th e a m o u n t f o r th e c o u n tr y

u n ch a n ged ,

and

p r ic e s

w e r e p r a c t ic a lly u n a ffe c te d .
m ent bon d
in

th e

p r ic e s h a d

th ree

days

of

c o r p o r a tio n

bonds

B y th e e n d o f J u ly G o v e rn ­

r e g a in e d

b e g in n in g

m ost o f th e

J u ly

15, a n d

grou n d

even

lo s t

a t th e ir

a s a w h o le w a s $ 3 ,0 5 0 ,0 0 0 ,0 0 0 a s c o m p a r e d w i t h
0 0 0 ,0 0 0 o n J u l y
excess

reserves

lo w e s t p o in t s , o n J u ly 1 7 , t h e y r e m a in e d , o n th e a v e r a g e ,

as

h ig h e r

p r in c ip a l

th a n

at

any

t im e

in

recen t

yea rs

p r io r

to

la s t

M arch .

com pared

w h o le

The

s m a ll

r e d u c tio n

in

e ffe c t

on

m oney

ra tes

excess reserv es m a y

of

be

th e

p r o s p e c t iv e

a ttr ib u te d

in

la r g e

1.
on

w ith

fa c to r

w as

th e

F o r th e la r g e N e w
J u ly

in

w ere

in c r e a s e

d is b u r s e m e n t,

of

n e a r ly

$ 8 0 0 ,0 0 0 ,0 0 0

th e

V e te r a n s A d ju s t e d
e x p e n d it u r e s ,

29

about

Y ork

fo r

th e

p r e v io u s ly

r e s e r v e s it u a t io n w h ic h w e r e set f o r t h in th e s ta te m e n t o f

m em b er b a n k reserv es fr o m

th e

b y s o m e r e t ir e m e n t o f c u r r e n c y fr o m

w h ic h

G overn ors

a c c o m p a n ie d

reserve

th e

r e q u ir e m e n ts .

o f th e

F ed era l R eserve

an n ou n cem en t
The

p o s s ib ilit y

o f th e
o f an

S y ste m

ch an ge

in

in c r e a s e

in

The
s m a lle r

g a in s
th a n

fr o m

b o th

m ig h t

of

have

r e s e r v e r e q u ir e m e n ts h a d b e e n r e c o g n iz e d , a n d h a d b e e n

m e n t e x p e n d it u r e s w e r e

a

of

fre q u e n t

t o p ic

of

d is c u s s io n

fo r

a num ber

of

m on th s

fu n d s

1.

The

cou n try

th e

as

c a s h in g

a c c u m u la t e d

e r n m e n t b a la n c e s in th e R e s e r v e B a n k s .

of

J u ly

a
of

S e r v ic e b o n d s a n d o th e r G o v e r n m e n t

fu n d s

p a r t to a g e n e r a l r e a liz a tio n o f th e fa c t o r s in th e e x is tin g
B oard

$ 1 ,2 0 0 ,0 0 0 ,0 0 0 ,

on

th rou gh

$ 2 ,6 7 0 ,-

C it y b a n k s

p r e v io u s ly

in

G ov­

T h e in c r e a s e in

th is s o u r c e w a s s u p p le m e n t e d
th ese
been

p a r t ly

ad van ced

c ir c u la tio n .

sou rces, h ow ev er, w ere
a n tic ip a te d ,
o ffs e t b y
by

th e

th e

as

G overn ­

rep a ym en t

R e c o n s tr u c tio n

p a s t, so th a t th e m a r k e t w a s n o t u n p r e p a r e d f o r th e a c t io n

F in a n c e C o r p o r a t io n to b a n k s, r a ilr o a d s , a n d o th e rs , a n d

ta k e n .

a ls o

recen t

F u r th e r m o r e , it h a d b e e n d e m o n s tr a te d o n s e v e ra l
o c c a s io n s ,

v o lu m e ,

th a t

fo llo w in g

la r g e

T rea su ry

r e d u c tio n s

in

fin a n c in g

th e

am ount

in
of

by

p a y m en ts

fo r

n otes

of

th e

C o m m o d ity

C r e d it

la r g e
excess

r e s e r v e s c o u ld o c c u r , a t le a s t t e m p o r a r ily , w it h o u t a p p r e ­
c ia b le e ffe c t o n th e m o n e y m a r k e t .
on

lo n g

term

s e c u r itie s ,

in

th e

T h e s ta b ilit y o f y ie ld s

fa c e

of

th e

p r o s p e c t iv e

Dec. 31, 1934 June 30, 1936 July 29, 1936
Stock Exchange call loans.......................
Stock Exchange 90 day loans.................
Prime commercial paper— 4 to 6 months
Bills— 90 day unindorsed.........................
Customers’ rates on commercial loans
(Average rate of leading banks at
middle of m on th )..............................
Treasury securities:
Maturing December (y ie ld )...............
Maturing February 1938 (yield)
Average yield on Treasury notes (1-5
y e a rs ).......................................................
Average yield on Treasury bonds (more
than 5 years to earliest call d a te). . . .
Average rate on latest Treasury bill
sales 273 day issue................................
Federal Reserve Bank of New York re­
discount ra te ..........................................
Federal Reserve Bank of New York
buying rate for 90 day indorsed bills.




r ;1 !
:H~1

'

X

5

1

1

I X

H
X

I X

H

3/16

1.96

1.67

1.63

N o yield

N o yield
0.21

N o yield
0.19

1.13

0 .7 8

0.77

2.83

2 .3 5

2.32

0.19

0 .2 2

1H

IX

IX

X

X

X

Excess Reserves Held by Principal New York City Member Banks and
All Other Member Banks, Expressed as Percentages by which
Reserve Balances Exceed Reserves Required Against Member
Bank Deposits (Latest figures are for July 22)

58

MONTHLY REVIEW, AUGUST 1, 1936

C o r p o r a t io n
A lt h o u g h

w h ic h

an

w ere

o ffe r e d

u n u s u a lly

heavy

fo r

s a le

in c r e a s e

on

in

J u ly

th e

14.

am ount

o f c u r r e n c y o u ts ta n d in g o c c u r r e d d u r in g th e la tte r p a r t

of

su ch

fu n d s

e ith e r to

be

a p p a r e n t ly

added

tow n ban ks a n d

a fte r th e J u ly

u su a l season a l m ov em en t.
h ig h
in

le v e l o f

J u ly ,

In

v ie w

in d u s tr ia l a c t iv ity

h o w e v e r , it

appears

g r e a te r th a n th e

of

and

lik e ly

th e

u n s e a s o n a lly

in d u s tr ia l p a y r o lls
th a t, e x c e p t

fo r

th e

The
ended
T h is
N ew

B a n k s in

c o n n e c tio n

w ith

th e

c a s h in g

o f v e te r a n s b o n d s , th e r e t u r n flo w o f c u r r e n c y w o u ld h a v e
b e e n le s s t h a n t h e u s u a l s e a s o n a l m o v e m e n t .

J u ly

000,000 i n

fr o m

R eserve

p r in c ip a l

Y ork

22

show n

by

w as

a

fu r th e r

in c r e a s e

in c r e a s e ,

w h ic h

occu rred

C it y , p r o b a b ly

p a id

A d ju s t e d
In

to

vetera n s

reserves

to

g e n e r a l,

th e

o f th e

ban ks,

Y ork

s e c u r itie s

th e p a st

2y2

w ere h ea vy
th e

lo a n s

th e

in flo w s o f g o ld

w e e k ly

ou t o f tow n
p art

fr o m

abroad.

le v e l o f

N ew

reserv es

s tu d ie s

h e ld

of

by

th e

m e m b e r b a n k s w h ic h

th e

on

N ew

reserv e

F u rth e rm o re ,

Y ork

b a n k s c o n s t itu te s a c la im

o f th e

H ow ever,

h ig h

of

a c o n s id e r a b le

Y ork

p o s itio n

C it y

ban k s.

$ 3 0 0 ,-

h ig h le v e l.

e n tir e ly

o u t s id e
ex­

c a s h in g

of

th e ir

and

in v e s tm e n ts

Y ork
in

C it y

of

r e p o r tin g

G o v e r n m e n t s e c u r ity

banks

show ed

a net de­

th e fo u r w eek s e n d e d

J u ly

22,

N ew

o ffs e t

in

C h ic a g o .

occu rred
Y ork

is s u e s
th e ir

C ity
of

T h is

la r g e ly
banks

to

T rea su ry

m a t u r it ie s ,

s h ift

of

th rou gh
o b ta in

b ills

o w in g

in

to

G overn m en t

th e

fa ilu r e

a llo t m e n t s

s u ffic ie n t

a

s p e c ia l

of

of

th e

v o lu m e

to

dem and

fo r

T r e a s u r y b ills w h ic h r e s u lt e d in u n u s u a lly h ig h b id s fr o m
oth e r q u a rters fo r a fe w

w eeks.

in d iv id u a l

T h e o th e r p r in c ip a l c h a n g e s h o w n b y th e w e e k ly m e m ­

t im e t o t im e

b e r b a n k r e p o r t s w a s a f u r t h e r d e c r e a s e o f $ 1 0 8 ,0 0 0 ,0 0 0

of

h a ve b een m a d e fr o m

b y th e F e d e r a l R e se rv e S y s te m

b a la n c e s

N ew

la r g e ly

y e a r s , e x c e p t in a fe w m o n th s in w h ic h th e r e

e x tr a o r d in a r ily

n e a r ly

b u t t h e r e w a s a n a lm o s t e q u a l in c r e a s e in o t h e r r e p o r t in g

r e q u ir e m e n t s h a s b e e n r a t h e r c o n s is t e n t ly s m a lle r in N e w
C it y b a n k s t h a n in a ll o t h e r m e m b e r b a n k s d u r in g

fro m

a c o n s id e r a b le

th e

c r e a s e o f $ 1 1 3 ,0 0 0 ,0 0 0

excess

to

th rou g h

h o ld in g s

of

rep orts

S e r v ic e b o n d s .

b a n k s th r o u g h o u t th e c o u n tr y .

p r o p o r tio n

out of

th e fo u r w eek s

of

a lm o s t

r e fle c te d

p o r t io n to th e ir re s e r v e r e q u ir e m e n ts , th a n o th e r m e m b e r
th e

w e e k ly

p r in c ip a l c itie s d u r in g

b a n k s s h o w e d n o m a te r ia l c h a n g e .

sh ow s,

Y ork,

of

o r t o b e in v e s te d .

h a d a s m a lle r a g g r e g a t e a m o u n t o f e x c e s s re s e r v e s , in p r o ­

d ia g r a m

N ew

te n t th e p r o c e e d s o f G o v e r n m e n t e x p e n d it u r e s , in c lu d in g

th e N e w Y o r k C it y b a n k s , n e a r th e e n d o f th e m o n th , s till

I n fa c t, as th e p r e c e d in g

to

b a la n c e s

a d ju s t e d d e m a n d d e p o s it s t o a n e w

Y ork

fu n d s

D e s p ite th e la r g e in c r e a s e in th e ir re s e r v e s d u r in g J u ly ,

ch an ge

m e m b e r b a n k s in

r e tir e m e n t o f a p a r t o f th e c u r r e n c y th a t w a s w it h d r a w n
th e

retu rn ed

N ew

M e m b e r B a n k C redit

o f c u r r e n c y to th e R e se rv e B a n k s

4 h o lid a y w a s n o t m u ch

have

th e

o th e r d e p o s ito r s

o f J u n e , la r g e ly in c o n n e c t io n w ith th e c a s h in g o f v e te r a n s
b o n d s , th e r e t u r n flo w

to

h a v e in d ic a te d th a t m o st

in

th e

v o lu m e

of

s e c u r ity

lo a n s .

M ost

of

th is

d ecrease

o f th e m e m b e r b a n k s th r o u g h o u t th e c o u n tr y

h a v e s u ffi­

o c c u r r e d in N e w Y o r k C it y a n d p r o b a b ly r e fle c te d la r g e ly

c ie n t

r e s p e c t iv e

th e liq u id a t io n

excess

reserves

on

d e p o s it

w ith

th e ir

o f b o r r o w in g s b y

th em

a b o u t th e sa m e a m o u n t in th e p r e c e d in g fo u r w e e k p e r io d .

respon den t

h e a v ily u p o n

banks

in

th e ir b a la n c e s w it h

ord er

to

cover

th e

50

c ity
per

in c r e a s e in t h e ir r e q u ir e m e n t s a ft e r A u g u s t 1 5 .

cor­
cen t

In

B il l s

th is

d is t r ic t d u r in g th e fir s t h a lf o f J u ly th e a g g r e g a t e a m o u n t
by

w h ic h

th e re se rv e s o f in d iv id u a l m e m b e r b a n k s, o u t­

w h ic h

had

show n

G overn m en t

and

to d ra w

o th e r s e c u r itie s

d e a le r s in

F e d e r a l R e se rv e B a n k s, so th a t it w ill n o t b e n e c e s s a r y fo r

a net

in c r e a s e

of

C o m m ercial P a per

and

F o llo w in g th e a n n o u n c e m e n t o f th e p r o s p e c t iv e in c r e a s e
in

reserve

r e q u ir e m e n ts

of

m em ber

ban ks,

th ere

w as

a

s id e N e w Y o r k C it y a n d B u ffa lo , f e l l s h o r t o f t h e r e s e r v e s

m o d e ra te

needed

d is c o u n t m a r k e t, b u t as th e in v e s tm e n t d e m a n d

f o r b ills

c o n tin u e d

m a te r ia l

to

cover

a 50

per

cen t

in c r e a s e

in

r e q u ir e m e n ts

w a s le s s t h a n $ 1 0 ,0 0 0 ,0 0 0 .

I n N e w Y o r k C it y a n d B u ffa lo

th e

banks

sh orta g es

s u ffic ie n t

to

of

th e

cover

fe w
th e

la c k in g

in c r e a s e

w ere

excess

reserves

c o r r e s p o n d in g ly

s m a ll.

ch an ge.

in c r e a s e

C it y

th e

am ount

of

a c t iv e , d e a le r s ’ p o r t f o lio s
On

F r id a y ,

J u ly

17,

b ills

o ffe r e d

show ed

h ow ever,

no

som e

to

e s ta b lis h e d

on M o n d a y , J u ly

by

th e

r e m a in in g

d e a le r s .

w e r e o ffe r e d to th e d e a le r s a t th e n e w

fe w

b ills

o t h e r s e c t io n s o f th e c o u n t r y , a s w a s a c o n s id e r a b le p a r t

m a r k e t a g a in
th e

Y o r k . M o s t o f th e g o ld th a t h a s c o m e t o th is c o u n t r y fr o m

o ffe r e d

a b r o a d d u r in g th e p a s t tw o a n d o n e -h a lf y e a r s h a s co m e

* 4 p e r c e n t o ffe r e d f o r 4 m o n t h b ills , a n d %

in th r o u g h

5 /1 6 p e r ce n t o ffe r e d fo r 5 a n d 6 m o n th a cce p ta n ce s .

th e P o r t o f N e w

Y ork, and

a t th e o u tse t th e

p ro c e e d s h a v e b e e n a d d e d to th e re se rv e s o f th e N e w Y o r k
C it y

b a n k s, b u t th e

been

o ffs e t b y

fr o m

N ew Y ork .

m ent

g a in

heavy

o f fu n d s

fr o m

th a t so u rce

G o v e r n m e n t w ith d r a w a ls

has

o f fu n d s

A la r g e p a r t o f th e fin a n c in g o f G o v e r n ­

e x p e n d it u r e s

has

been

done

in

N ew

Y ork,

and

a

th e

m o n th ly

to

record s

in a u g u r a t e d in 1 9 2 5 .
w ith

o th e r in v e s tin g

per

a d e c lin e o f $ 1 4 ,0 0 0 ,0 0 0 f r o m
s in c e

years,

banks and

m a t u r it ie s u p

%

90

A s

cen t

th e

m on th

b id ,

3 /1 6

d a y s , 5 /1 6

per

c lo s e d ,

per

cen t

c e n t b id ,

p e r c e n t b id ,

A s is s h o w n i n t h e f o l l o w i n g t a b le , t h e v o l u m e o f b i ll s

m e n t s e c u r itie s

by

fo r

w ere

o u t s t a n d i n g a t t h e e n d o f J u n e a m o u n t e d t o $ 3 1 6 ,0 0 0 ,0 0 0 ,

c o n s id e r a b le p a r t o f th e p r o c e e d s o f p a y m e n t s f o r G o v e r n ­
p u rch ased

rep orted

q u ie t.

V ery

ra te s, a n d th e b ill

o f th e p r e c e d in g a c c u m u la t io n o f e x c e s s r e s e r v e s in N e w

ra tes

very

1 /1 6

2 0, th e h ig h e r ra te s w e r e

b a n k s w a s c a u s e d la r g e ly b y a h e a v y in flo w o f fu n d s fr o m

becam e

th e

d e a le r s

a d v a n c e d t h e ir ra te s f o r o n e to f o u r m o n t h b ills b y
p er cen t an d

T h e J u ly in c r e a s e in e x c e s s r e s e r v e s o f N e w Y o r k

in

M a y , a n d th e s m a lle s t t o t a l
on

a ccep ta n ce

a y e a r p r e v io u s w a s th e s m a lle s t in
h ow ever.

The

v o lu m e

w ere

T h e s h r in k a g e in v o lu m e c o m p a r e d
d e c lin e

fo r

th e

m ore

th a n

m on th

tw o

occu rred

in s tit u t io n s a n d in v e s t o r s in th is d is t r ic t h a s b e e n t r a n s ­

p r in c ip a lly a s a r e s u lt o f f u r t h e r d e c r e a s e s in e x p o r t b ills

fe r r e d

and

tu res
fu n d s
th e

out
in

o f th e

d is tr ic t to

oth er p a rts

expended

by

of
th e

th e

m eet G overn m en t
cou n try .

G overn m en t

c o u n t r y , h o w e v e r , r e s u lte d

in

The
in

e x p e n d i­

d e p o s itin g

oth er

p a rts

a c c u m u la t io n s

of

w areh ou se

c r e d its .

H o ld in g s

of

a ccep t­

a n ce s b y a c c e p t in g in s titu tio n s w e r e r e d u c e d b y a p p r o x i­

of

m a t e ly $ 2 1 ,0 0 0 ,0 0 0 d u r i n g J u n e , a n d r e p r e s e n t e d

id le

fu n d s in th e b a n k s in th o s e lo c a lit ie s , a n d la r g e a m o u n ts




d o m e s tic

of

87 p e r

ce n t o f a ll b ills o u t s ta n d in g , a s c o m p a r e d w it h 9 0 p e r c e n t
o f th e to ta l in M a y .

59

FEDERAL RESERVE AGENT AT NEW YORK
(Millions of dollars)

A

Type of Acceptance

June 1935

M a y 1936

June 1936

Im p o rt..........................................................
Export..........................................................
Domestic shipment....................................
Domestic warehouse credit.....................
Dollar exchange..........................................
Based on goods stored in or shipped
between foreign countries...............

102
94
9
48
1

110
82
9
46
1

107
74
9
39
2

89

82

85

343

330

316

T o ta l........................................

th e

c o m m e r c ia l

paper

m arket

bank

th e

advan ce

gen eral

in

s to ck

a verage

q u o ta tio n s

of

sh are

d u r in g

p r ic e s

J u ly

above

th e

e a r lie r h ig h s o f 1 9 3 6 , w h ic h w e r e r e a c h e d in A p r i l b y th e
in d u s t r ia ls a n d in F e b r u a r y
u t ilit ie s .

b y th e r a ilr o a d s a n d p u b lic

I n d u s t r ia l s to c k s as a g r o u p r e a c h e d th e h ig h e s t

le v e l s in c e S e p t e m b e r 1 9 3 0 , w h ile f o r th e r a ils a n d u t ili­
t ie s c u r r e n t p r ic e s a r e t h e h ig h e s t s in c e J u l y

1933.

The

a d v a n c e in s to c k p r ic e s d u r in g r e c e n t m o n th s h a s b y n o
m e a n s b e e n u n ifo r m
of

In

fu r th e r

r a is e d

in v e s t m e n t

c o m p a n ie s .

in d u s tr ia l

a m o n g a ll is s u e s o r e v e n

S to ck

p r ic e s

c o m p a n ie s ,

fo r

a

in c lu d in g

le a th e r ,

grou ps

m eat

of

p a c k in g ,

t e x t ile s , a n d

but

th e fir s t o f th e y e a r , w h ile n e t in c r e a s e s h a v e r a n g e d f r o m

by

d r a w in g s ,

g r a in

and

w h ic h

m illin g

in c lu d e d

con cern s,

s e a s o n a l b o r r o w in g s

r e m a in e d

s m a ll.

The

p r e v a ilin g r a te f o r a v e r a g e g r a d e p r im e f o u r to s ix m o n t h
p a p e r r e m a in e d a t %

p e r ce n t, a lth o u g h th e re w e r e som e

s m a ll

g a in s

s lig h t ly

c o m p a n ie s .

a v a ila b le .

w hen

th is

c la s s

of

paper

becam e

s h ip p in g ,

N e w

a v o lu m e 9 p e r c e n t s m a lle r t h a n a m o n t h a g o , b u t 6 p e r
c e n t h ig h e r th a n
S e c u r ity

a year

ago.

to

M a rk e ts

S ta te s T r e a s u r y b o n d s s h o w e d a fu r t h e r in c r e a s e

o f m ore th a n

a

r is e

%

p o in t, h ig h

of

about

is s u e s a n

p la c e d

%

g r a d e c o r p o r a tio n

p o in t,

ad van ce

and

/4

of V

m e d iu m

p o in ts .

bonds an

la r g e s t

grou ps

of

fr e ig h t

t r a ffic

s e c u r itie s ,

of

in

J u ly ,

p u b lic ly

a m ou n ted

fig u r e s

and

im p r o v e d

th e

S y ste m

B oard

F ed era l

R eserve

m em ber

banks

a g a in s t

d e p o s its

th a t

cen t on

A u gu st

15

of

G overn ors

reserve

had

be

r e la tiv e ly

to

a s a w h o le . T h e

d u r in g

th e

J u ly ,

and

$ 6 0 0 ,0 0 0 ,0 0 0 ,
in

M ay

June

to ta l.

an n ou n ced

but
The

on

th e

p e r ce n t 6 m o n th c o lla te r a l-

b y c o lla t e r a l n o te s b a c k e d b y th e p le d g e o f c o m m o d it ie s .

ea rn ­
o f th e
of

in c r e a s e d
litt le

o ffe r in g

above

a c c o r d in g

is s u e d

tr u s t n o te s o f th e C o m m o d ity C r e d it C o r p o r a t io n , s e c u r e d

r e q u ir e m e n ts

w o u ld

$ 2 0 0 ,0 0 0 ,0 0 0

s in g le

p u rp ose

F in a n c e

an n ou n cem en t b y

m arket

o ffe r e d

cor­

in g s r e p o r ts .

bond

s e c u r itie s
ta b u la tio n

1 4 t h , w a s $ 1 5 0 ,0 0 0 ,0 0 0 o f %

C o m m o d ity

th e

m a c h in e r y

is s u e s

grade

R a ilr o a d

a p p r o x im a te ly

The

in c r e a s e d

per

a g r ic u ltu r a l

to ta l o f n ew

of

50

and

p r e lim in a r y

w e r e e s p e c ia lly s tr o n g , a p p a r e n t ly r e fle c t in g th e in flu e n c e

The

a c c e s s o r ie s ,

a n a m o u n t a b o u t $ 2 0 0 ,0 0 0 ,0 0 0 s m a lle r t h a n

D u r in g th e fir s t t w o w e e k s o f J u l y , th e a v e r a g e p r ic e o f

a verage

a u to m o b ile

F in a n c in g

The

p r iv a te ly

p ora te

as

C o m m e r c ia l p a p e r d e a le r s h a d a t o t a l o f p a p e r

o u t s t a n d i n g a t t h e e n d o f J u n e a m o u n t i n g t o $ 1 6 8 ,7 0 0 ,0 0 0 ,

U n ite d

su ch

s in c e

la r g e p r ic e a d v a n c e s in th e s to c k s o f th e a u to m o b ile , c o p ­
per,

le v e ls

grou ps

n e t d e c lin e s

fo o d s , s te e l, e le c t r ic a l e q u ip m e n t , a n d o il, t o t h e r e la t iv e ly

s a le s o f e s p e c ia lly h ig h g r a d e n a m e s o f s h o r t m a t u r it y a t
lo w e r

in

fa c t sh ow n

a ll g r o u p s

of

d e m a n d f o r b u s in e s s n o t e s c o n t in u e d a c t iv e d u r in g J u l y ,
new

c o a l, h a v e in

num ber

by

e ffe ct

on

p r in c ip a l e ffe ct w a s

a

of

th is

is s u e

C r e d it

w as

to

C o r p o r a t io n

C o r p o r a t io n .

T here

r e fin a n c e
to

th e

w ere

debt

of

th e

R e c o n s tr u c tio n

a ls o

o ffe r in g s

of

F e d e r a l In te r m e d ia te C r e d it B a n k d e b e n tu r e s a m o u n tin g
t o $ 1 7 ,0 0 0 ,0 0 0 , a n d a n u m b e r o f s m a ll S t a t e a n d m u n i c i ­
pal

is s u e s

P u b lic

a g g r e g a tin g
u t ilit y

$ 4 9 ,0 0 0 ,0 0 0 .

is s u e s

d u r in g

J u ly

a m ou n ted

to

about

$ 2 0 0 ,0 0 0 ,0 0 0 , i n d u s t r i a l is s u e s $ 6 0 ,0 0 0 ,0 0 0 , f in a n c i a l a n d

t e m p o r a r y r e c e s s io n in th e p r ic e s o f T r e a s u r y b o n d s , b u t

in v e s tm e n t

even

in

is s u e s $ 6 0 ,0 0 0 ,0 0 0 , m a k in g a t o t a l f o r p r i v a t e c o r p o r a t i o n

h ig h

le v e ls

th e

case

o f th e se s e c u r itie s th e

w h ic h

an n ou n cem en t

p r e v a ile d

a vera ged

ju s t

o n ly

d e c lin e

p r io r

b e tw e e n

to

%

fr o m

th e

th e

B o a r d ’s

and

p o in t.

A f t e r th is d e c lin e , w h ic h w a s o v e r a t h r e e d a y p e r io d , th e
G overn m en t
s e q u e n t ly

s e c u r ity

recovered

r e c e s s io n .

H ig h

h a r d ly

a ll

at

m arket
th e

grade

by

th e

r e q u ir e m e n ts , a n d

th e

c o n tin u e d
w ith

th e

w h o le ,

p r a c t ic a lly
ad van ce

p r ic e s

of

in

s te a d ie d

grea ter

and

p art

of

p r ic e s
th e

c o r p o r a tio n

bonds

p r o s p e c t iv e

in c r e a s e

w ere

a d va n ce

in

w ith o u t

in te r r u p tio n ,

sto ck

m e d iu m

le s s h i g h

p r ic e s .
grade

F or

bonds

in

a ffe c te d
reserv e

grade
in

th e

up

is s u e s

k e e p in g

m on th

w ere

su b­

p r e v io u s

m a rk et,

th e

n o te s d e c lin e d

fr o m

y ie ld

on

1

to

5

year

0 .7 8 p e r c e n t a t t h e e n d

f i n a n c i n g o f a b o u t $ 3 8 0 ,0 0 0 ,0 0 0 .
p ora te

is s u e s

$ 3 5 ,0 0 0 ,0 0 0

p u b lic ly

o ffe r e d

C o m m e r c ia l

In v estm en t

The

N a rra g a n sett

is s u e o f 3 0 y e a r 3

E le c tr ic

m on th

w as

C o r p o r a t io n

C om pany

3 .3 7 p e r

$ 3 4 ,0 0 0 ,0 0 0

p e r c e n t fir s t m o r t g a g e b o n d s , p r ic e d

in g s .
w as

A n oth er
The

of

N ew

th e

Y ork

la r g e

u t ilit y

E d is o n

of

S 1/^ p e r

cen t

is s u e s

C om pany,

A p r il 1, 1 9 6 6 , w h ic h w e r e p r ic e d

r e fu n d in g

of

th e

I n c .,

bonds

to y ie ld

m on th

is s u e

of

m a t u r in g

3 .1 4 p e r c e n t .

T h e J u l y is s u e s i n c l u d e d a b o u t $ 8 0 ,0 0 0 ,0 0 0 o f s e c u r it ie s
p la c e d

to

th e

T ru st

t o y i e l d 3 .3 5 p e r c e n t , w a s t h e l a r g e s t o f t h e u t i l i t y o f f e r ­

2

of June

r a ilr o a d

15 y e a r 3^2 p e r ce n t d e b e n tu re s p r ic e d to y ie ld
ce n t.

about

T reasu ry

and

T h e la r g e s t o f th e c o r ­
d u r in g

$ 3 0 ,0 0 0 ,0 0 0

d iv is io n s o f th e G o v e r n m e n t s e c u r ­

a vera ge

$ 6 0 ,0 0 0 ,0 0 0 ,

a

r a i l r o a d is s u e s t h e a d v a n c e s w e r e c o n s i d e r a b ly la r g e r .
ity

is s u e s

as

p o in ts o n th e a v e ra g e , a n d in th e ca se o f a n u m b e r o f th e
I n th e s h o rte r te rm

com p a n y

p r iv a te ly .

K ansas

C it y

A m ong

P ow er

and

th ese

is s u e s w e r e

L ig h t

$ 4 0 ,0 0 0 ,0 0 0

C om pany

r e fu n d in g

b o n d s , r e p o r t e d la te in th e m o n t h t o h a v e b e e n
grou p

of

in s u r a n c e

co m p a n ie s .

S im ila r ly ,

s o ld t o a

$ 1 6 ,7 0 0 ,0 0 0

0 .7 2 p e r c e n t o n J u l y 1 4 , a d v a n c e d t o 0 .8 4 p e r c e n t b y t h e

L ong

1 7 th , a n d th e n r e c e d e d

$ 1 0 ,3 0 0 ,0 0 0 r e f u n d i n g b o n d s o f it s s u b s i d i a r y , t h e Q u e e n s

to

0 .7 7 p e r c e n t , t h u s s h o w i n g

n e t d e c l i n e o f 0 .0 1 p e r c e n t f o r t h e m o n t h .
ra te
fr o m

on

w e e k ly

T reasu ry

b ill

s a le s , w h ic h

a

T h e a vera ge
had

d e c lin e d

0 .1 9 p e r c e n t o n t h e is s u e o f J u l y 1 t o 0 .0 7 p e r c e n t

Is la n d

B orou gh

G as

have been
n ote

d e m a n d f o r th e b ills in th e C h ic a g o m a r k e t, in c r e a s e d to

C om pany

c e n t f o r th e is s u e d a t e d J u l y 2 9 .




and

p la c e d

C om pany

E le c tr ic

r e fu n d in g

C om pany,

p r iv a t e ly w ith

w ere

a grou p

a n ce c o m p a n ie s a n d a lo c a l s a v in g s b a n k .

o n t h e n e x t t w o w e e k s ’ s a le s , d u e t o a t e m p o r a r y s p e c i a l

0.22 p e r

L ig h tin g

of

F in a n c e

th e

N ew

Y ork ,

a ls o w a s s o ld

C o r p o r a t io n

C h ic a g o
p r iv a te ly

to a N ew

and
by

Y ork

bonds

rep orted

o f la r g e
A

C it y

to

in s u r ­

$ 1 0 ,9 0 0 ,0 0 0

S t. L o u is
th e

and

R a ilr o a d

R e c o n s tr u c tio n
bank.

MONTHLY REVIEW, AUGUST I, 1936

60
T h e m a jo r p o r tio n
c o n tin u e d

to

be

r e fu n d in g o p e r a t io n s .
is s u e s

are to

be used

or

in d ir e c tly

con n ected

w ith

I n som e ca ses th e p r o c e e d s o f th e
to

repay

bank

lo a n s in c u r r e d

p re­

v io u s ly f o r th e r e t ir e m e n t o f o u t s t a n d in g s e c u r it y iss u e s ,
b u t m o r e g e n e r a l ly t h e J u l y is s u e s w e r e t o r a is e f u n d s i n
a d v a n c e o f t h e r e t i r e m e n t o f o u t s t a n d i n g is s u e s .
N e a r th e
an ce

clo s e

C o r p o r a t io n

th e

S e c u r itie s

$ 1 0 0 ,0 0 0 ,0 0 0
3

of

per

cen t

th e

tered

m on th ,

file d

a

r e g is tr a tio n

E xch an ge

d eb en tu res, a n d

la s t

C o m m is s io n

E x ce p t fo r

A p r il,

th is

S e c u r itie s

is

th e

th e

fo r m

c o v e r in g
of

10

15 y e a r

year

3 %

C o r p o r a t io n

la r g e s t

b ecam e

w ith

per

$ 1 1 0 ,0 0 0 ,0 0 0 f i n a n c i n g

T r a n s it

th e

A ct

in

A ccep t­

s ta te m e n t

o n e -h a lf in

B r o o k ly n -M a n h a tta n

s in c e th e

G en era l M otors

is s u e s , o n e -h a lf

ce n t d eb en tu res.
of

th e

and

of

C o r n p r ic e s , w h ic h h a d r e m a in e d f a ir l y s te a d y t h r o u g h

o f t h e p a s t m o n t h ’s s e c u r it y is s u e s

d ir e c tly

s in g le

o p e r a t iv e

r e g is ­

r e g is tr a tio n

in

J u ly

1933.

th e w in te r

P r ic e s

C o n t in u e d
fle c te d

in

num ber of
J u ly .

w ea th er

s iz a b le

c o n d itio n s

w ere

in

th e

a g r ic u lt u r a l c o m m o d it ie s

in

th e fir s t p a r t o f

S u b s e q u e n tly

a

brea k

in

th e

p r ic e s

re­

ad van ces

s e c t io n s o f th e c o u n t r y

d rou gh t

of

in

a

som e

r e s u lte d in m o d e r a te p r ic e r e c e s ­

s io n s , b u t n e a r t h e e n d o f t h e m o n t h t h e r e w a s a r e n e w e d
r is e

in

p r ic e s .

A s

w h e a t p r ic e s ro se
fr o m

th e

M ay.

lo w

th e

a c c o m p a n y in g

s te a d ily

of

th e

th rou gh

year

June

reach ed

10, th e ca sh p r ic e

s in c e

O cto b e r

1935,

and

h ig h e s t s in c e A u g u s t 1 9 2 9 .
t io n ,

a

to ta l

w heat

c o n s id e r a b ly
o r a t io n
d a te

in

b e lo w

th e

e a r ly

th e

m id d le

at

J u ly
of

of

e s tim a te

th e

and

M in n e a p o lis

th e

15%

C h ic a g o

w ith

of

above

show ed

a

th a t

e s tim a te s ,

w heat
and

crop

th e

p r ic e
th e

net

e x c e p tio n

6 3 8 ,4 0 0 ,0 0 0

end

and

w as

th e

fu r th e r

of

advan ce

of

flu c tu a te d

c lo s e d

th e

b u s h e ls

w as

la s t y e a r , b u t

rep orted

p u b lic a tio n

m o n th , w h e a t p r ic e s

ce n ts

a b u s h e l, th e h ig h e s t

b u s h e ls h ig h e r t h a n

June

s p r in g

L a te r in
or

and

O n th e b a s is o f J u l y 1 c o n d i­

h a rvest

e s t im a t e d , 1 5 ,0 0 0 ,0 0 0

th e

in d ic a te s

o f N u m b er 1 N orth ern

w h e a t a t M in n e a p o lis ro s e to $ 1 .4 2 %
p r ic e

d ia g r a m

F o llo w in g th e p u b lic a tio n o f th e G o v e rn m e n t c r o p

r e p o rt on J u ly

d e te r i­
b e tw e e n

th e

rep ort.

ir r e g u la r ly

m on th

at

$ 1 .4 1 ,

J u n e ; w h e a t fu tu r e s
of

16%

m on th .

1

w ere

e s tim a te d

2 ,2 4 5 ,0 0 0 ,0 0 0
crop,

and

Spot

corn

th e
a

p r ic e s
of

b u s h e l,

in

CENTS
PER BUSHEL

th e

a r is e
th e

th e

in

hog

h ig h

to

th e

p r ic e s

fe e d ,

r e s u lte d

arou n d

th e

70

la s t

th e

d ia g r a m ,

th e

la c k

and

a ls o

o f w a ter

and

in c r e a s e d

a tem p ora ry

The

r e fle c te d

in

of

fr o m
$ 1 .0 1

1930.

w as

to

m id d le

J u ly .

cen t

r e a c h in g

A u gu st

at

y e a r ’s

d u r in g
per

s it u a t io n

h ow ever,
in

A g r ic u ltu r e

J u ly

s in c e

p a stu re

O w in g

of

b e lo w

occu rred

of

p r ic e s , s h o w n

of

w h ic h

end

p r ic e

and

o f ste e rs.

p r ic e

occu rred

4 7 ,0 0 0 ,0 0 0

a p p r o x im a te ly

h ig h e s t

corn

p r ic e

or

m a r k e t in g s

d e c lin e

J u ly , b u t

in

liv e ­

a recovery

ce n ts

fo r

at
th e

a t a p p r o x im a te ly th e sa m e le v e l as th e e n d o f J u n e .
C o n t in u in g
spot

cotton

fu tu r e s

at

ad va n ces

th e

u pw ard

p r ic e s
N ew

on

rose

Y ork

th e

54

m ovem ent

of

p o in ts

J u ly

ad van ced

fo llo w in g

days

on
61

M ay

p o in ts ,

brou gh t

and

8

and
and

th e

June,
cotton

fu r th e r

spot

p r ic e

t o 1 3 .6 5 c e n t s , t h e h ig h e s t p r i c e s in c e A u g u s t 1 9 3 4 .

T h is

sh arp

crop

g a in

rep ort b y

fo llo w e d
th e

th e

p u b lic a tio n

D ep a rtm en t o f

of

th e

A g r ic u ltu r e

cotton

in d ic a tin g

an

a c r e a g e o f 3 0 ,6 2 1 ,0 0 0 , w h ic h , a l t h o u g h 1 0 p e r c e n t h i g h e r
th a n la s t y e a r , w a s 2 6 p e r c e n t b e lo w th e 1 9 2 8 -3 2 a v e r a g e ,
a n d w a s lo w e r th a n h a d b e e n a n tic ip a te d .

F u rth e rm o re ,

th e G o v e r n m e n t a n n o u n c e d th a t it w a s c o m p le te ly o u t o f
th e f u t u r e s m a r k e t f o r th e fir s t tim e in s ix y e a r s .

S u bse­

q u e n tly th e p r ic e r e c e d e d s o m e w h a t b u t c lo s e d th e m o n th
w ith a n e t g a in o f 51 p o in ts .
A m ong

th e

n o n a g r ic u ltu r a l

in c r e a s e s w e r e s h o w n in

c o m m o d it ie s

J u ly , a n d

a ls o ,

th e B u r e a u

som e

of Labor

S ta t is t ic s w e e k ly in d e x o f p r ic e s o f a ll c o m m o d it ie s o th e r
th a n fa r m
est

le v e l in

$ 1 .7 1 %

a

p r o d u c t s a n d f o o d s r o s e 0 .7 p o i n t t o t h e h i g h ­
5%

years.

pound.

R aw

D o m e s tic

s ilk

a d van ced

copper

rose

10

25

ce n ts

to

p o in ts

to

9 .7 5 c e n t s a p o u n d t o t h e h i g h e s t p r i c e s i n c e A p r i l 1 9 3 1 ,

DOLLARS
PER CWT.

a n d s c r a p s te e l.

CENTS
PER POUND

Movements of Prices of Leading Agricultural Commodities (Range of prices for 1929-1934; weekly quotations subsequently)




recen t

C o rn c r o p p ro sp e cts on J u ly

D ep a rtm en t

d e te r io r a tio n
rose

June

u n fa v o r a b le
in

th e

b u s h e ls ,

fu r th e r

fir s t

in

by

a n d n e t g a in s a ls o o c c u r r e d in t in

CENTS
PER BUSHEL

r a p id ly

fo llo w e d , a n d b o th h o g a n d s te e r p r ic e s c lo s e d th e m o n th

u n fa v o r a b le

fu r th e r

s p r in g , h a v e a d v a n c e d

d u r in g th e g r o w in g sea son .

sto ck
C o m m o d ity

and

m o n th s as w e a th e r c o n d itio n s b e ca m e p r o g r e s s iv e ly w o r s e

FEDERAL RESERVE AGENT AT NEW YORK
F oreign E xchanges

$ 1 ,4 0 0 ,0 0 0
$ 2 0 0 ,0 0 0

T h e m o n th
in

th e

o f J u ly w a s a p e r io d

fo r e ig n

s id e r a b ly

exchan ge

s m a lle r

th a n

o f c o m p a r a tiv e

m a rk ets.

in

recen t

T u rn over
p r e v io u s

q u ie t

w as

con ­

m on th s,

and

ra te m o v e m e n ts w e r e o f m in o r p r o p o r t io n s .

T h e in w a r d

m ovem ent

abroad

red u ced

of

to

fo r e ig n

c a p ita l

th e

to

th is

s m a lle s t

cou n try

p r o p o r tio n s

fr o m
in

several

w as

m on th s;

in v e s t o r s c o n t in u e d t h e ir p u r c h a s e s o f A m e r ic a n

s e c u r itie s ,
fo r e ig n

but

th ere

d e p o s its

w as

w ith

no

banks

fu r th e r

in

th is

a c c u m u la t io n

of

p art

q u oted

in

d u r in g

of
th is

J u ly ,

th e m o n th .

on

m arket

a lth o u g h

on

June

d u r in g

th e

1 0 th

p r o m p tly
gradu al

th ese

th e

and

to

its

27,

w as

1 1 th

fo r

th e

q u oted

to

pound

J u ly .

The

s te r lin g

$ 0 .0 6 6 0 % ,
but

in

th e

to

S w is s
Y ork

g o ld

fo r

a h ig h

of

v ic in it y

of

A fte r

r e c e d in g

ra te

rev erted

th e
a g a in

d e v e lo p e d

secon d

h a lf

of

a

th e

fra n c

m oved

m in e d

a d d it io n
h e ld

and

th ere

under
of

m a te ly

scra p

ra te.

ra n ged

w as

a net

earm ark

th e

th e

U n ite d

p r e v io u s

tw o

s ta b ilit y
b e tw e e n

d u r in g
$ 5 .0 1 %

Closing Cable Rates at New York

of

fo r e ig n

S ta te s

to b e r e c e iv e d

$ 2 ,3 0 0 ,0 0 0

accou n t

w as

F o r e ig n

at

in

th is

g o ld
bank.

in c r e a s e d

by

s m a lle r

a p p r o x i­

g a in

th a n

in

T ra d e

D u r in g
to

th e

June

usual

som ew hat
fr o m

m e r c h a n d is e

seasonal

m ore

th e

im p o r ts

ten d en cy ,

th a n

th e

July 30, 1936

c o m p a r a t iv e ly

la r g e

.2242
5.0163
.06604
.4028
.6800
.0789
.2522
.1369
.2589
.3268

Canada............................................
Argentina........................................
B ra z il...............................................
U ru guay..........................................

.9988
.3304
.0857
.8040

.9975
.3344
.0859
.8000

.9998
.3344
.0861
.8000

Jap an...............................................
In d ia .................................................
Shanghai..........................................

.2923
.3747
.3800

.2939
.3792
.3013

.2931
.3791
.3019

co n tra ry

e x p o rts

seasonal

M ay

show ed
r e c e s s io n

to ta l.

Im p o rts

a m o u n t e d t o $ 1 9 2 ,0 0 0 ,0 0 0 , o r 2 3 p e r c e n t m o r e t h a n a y e a r
a g o , a n d e x p o r t s w e r e v a l u e d a t $ 1 8 5 ,0 0 0 ,0 0 0 , a n in c r e a s e
o f 9 p e r ce n t.
fo r

th e

T h e r e s u l t in g $ 7 ,0 0 0 ,0 0 0 e x c e s s o f i m p o r t s

m on th

w as

th e

fo u r th

im p o r t

b a la n c e

to

occu r

s in c e J a n u a r y .
In

th e

case

o f im p o r ts , in c r e a s e s

w id e s p r e a d

am ong

over June

1935

con ­

in d iv id u a l c o m m o d it ie s .

The

g a in in s u g a r r e c e ip t s , w h ic h w e r e la r g e r in q u a n t it y t h a n
in

any

J u n e s in c e

in c r e a s e

over

c o n tin u e d
e x p o rts

1929, a ccou n ted fo r

a year

ago

in

th e

be

s m a lle r
of

p ro d u cts,

and

cotton ,

ago

th a n

in

w as

due

1935.

The

c h ie fly

and

and

r e fin e d

w e r e s m a lle r th a n

to ta l

o f th e

im p o r ts .
and

m eat

s ilk a n d c r u d e p e t r o le u m

u n m a n u fa c tu r e d

and

of

p u lp , tin , w h e a t,

a g r ic u ltu r a l

ste e l p r o d u c ts ,

cru d e

o n e -fo u r th

v a lu e

a ls o in r e c e ip t s o f c r u d e r u b b e r ,

w o o l, w o o d

a year

abroad

paper
ir o n

to

over

m en ts

$ .1688

$ .1691
.2240
5.0163
.06632
.4034
.6814
.0787
.2521
.1375
.2587
.3275

in c r e a s e d

w h ile

cu stom a ry

p r o d u c t s , w h ile im p o r t s o f r a w

June 30, 1936

$ .1692
.2214
4.9562
.06626
.4037
.6802
.0821
.2491
.1373
.2557
.3275

and

m on th s.

u n m a n u fa c tu re d

Belgium ...........................................
D en m a rk .........................................
E ng land...........................................
France..............................................
Germ any.........................................
H olland............................................
It a l y .................................................
N orw ay............................................
Spain................................................
Sweden............................................
Switzerland.....................................

A u s tr a lia

c o n tin u e d

d ecrease

fo r

M a te r ia l g a in s o c c u r r e d

July 31, 1935

g o ld

$ 3 5 ,0 0 0 ,0 0 0 , a c o n s i d e r a b ly

tin u e d

d a y s o f th e m on th .

Exchange on

fr o m

A s a r e s u lt o f a ll t r a n s a c tio n s in J u ly th e m o n e t a r y g o ld
sto ck

about

a n d $ 5 .0 3 , b e i n g q u o t e d n e a r t h e lo w e r fig u r e in t h e la s t
fe w

r e c e iv e d

a t t h e m in t s a n d a s s a y o ffic e s i n m o d e r a t e v o lu m e a n d in

p o in ts

r e c e s s io n s

th e

m arked

ra te

N e w ly

w as

C h in a .

be

o n J u ly 3 0. T h e d o lla r q u o t a ­
th e

show ed

p o u n d -d o lla r

in

J u ly .

le v e l,

te n d e n cy
and

of

in k e e p in g w it h th e P a r is -N e w
The

lo w e r

s m a ll n e t

part

p r e v io u s

g u ild e r

c o n tin u e d

fr a n c , a fte r to u c h in g

m o n th , c lo s in g a t $ 0 .0 6 6 0 %
t io n s

th e ir

s h o w in g

e a r ly

d ow n w ard

c u r r e n c ie s

above

The F ren ch

$ 0 .0 6 6 4 1 /2
$ 0 .0 6 6 3

June,

g o ld

fr o m

m ark et.

F o llo w in g a r e c o v e r y in th e g o ld b lo c e x ch a n g e s in th e
la tt e r

of

61

in c r e a s e

to

la r g e r

to b a cco ,

w ood

in d u s tr ia l

a ir c r a ft.

and

m a c h in e r y ,

E x p orts

p e tr o le u m ,

in

s h ip ­

and

of

raw

a u to m o b ile s

a y ea r ago.

F o r th e y e a r e n d e d J u n e 30, 1 93 6 , e x p o r ts a g g r e g a te d
$ 2 ,4 1 3 ,0 0 0 ,0 0 0

and

e x p o r t b a la n c e

of

c o m p a r e s w ith

im p o r ts

$ 2 ,2 1 8 ,0 0 0 ,0 0 0 ,

$ 1 9 5 ,0 0 0 ,0 0 0 .

T h is

le a v in g

excess

of

an

e x p o rts

$ 3 3 5 ,0 0 0 ,0 0 0 in t h e p r e c e d i n g fis c a l y e a r ,

a n d w a s th e s m a lle s t s in c e th e fis c a l y e a r 1 9 2 2 -1 9 2 3 .
P r o d u c tio n
A

c o n s id e r a b le

fu r th e r

r is e

in

th e

gen eral

le v e l

of

in d u s t r ia l a c t iv it y , a f t e r a llo w a n c e f o r th e u s u a l s e a s o n a l
C e n tra l B a n k
F o llo w in g
th e B a n k
ce n t,

R a te

th e tw o

o f F ran ce

th a t

bank

C h a n g es

r e d u c tio n s

J u n e , w h ic h

d is c o u n t ra te d o w n fr o m

red u ced

e ffe c tiv e J u ly 1 0.

ch a n g es, a p p e a rs to h a v e o c c u rre d

in

its

ra te

fu r th e r

to

brou gh t

6 to 4 p e r
3

per

ce n t,

T h e N e th e r la n d s B a n k , w h ic h lo w e r e d

its d is c o u n t ra te fr o m

4 %

to 3 y

2

p e r c e n t in t w o s te p s in

E ffe c t iv e

J u ly

1

th e

d is c o u n t

L ith u a n ia w a s lo w e r e d fr o m
rep orted
w as

th a t th e

red u ced

ra te

fr o m

ra te

6 to 5 y

2

of

th e

p e r ce n t.

o f th e N a tio n a l B a n k

i y 2 to

7

per

B ank

of

I t is a ls o

o f A lb a n ia

c e n t, e ffe c tiv e

June

p o r t a n t lin e s w h ic h
th e su m m er.

15.

70

per

cen t o f

w h ereas

in

w ork

on

p r ic e s ,

and

a m ou n ted

to

g o ld

at

N ew

$ 8 ,8 0 0 ,0 0 0 , o f w h ic h

I n d i a , $ 2 ,1 0 0 ,0 0 0
and

of

$ 2 0 0 ,0 0 0

fr o m

fr o m




c a p a c ity

in

by

fo r

J u ly .

th ir d

O p e r a tio n s

p r e v io u s ly
som e

th e

s u c c e s s iv e

o u tp u t o f s te e l h a s b e e n
w ere

a ccep ted

b u s in e s s

at

p la c e d

in

m on th ,
red u ced

su p p orted

by

s e co n d -q u a rte r
a n tic ip a tio n

of

p o s s ib le la b o r d iffic u ltie s , b u t it w a s a ls o a p p a r e n t t h a t th e
r e q u ir e m e n ts

cou rse
im p o r ts

c u r t a il o p e r a t io n s d u r in g

of

w ere

ste e l

c o n s u m in g

u n u s u a lly

in d u s tr ie s

la r g e .

fo r

cu rren t

A u to m o b ile

p la n ts ,

a lt h o u g h s la c k e n in g a s s e m b lie s o f c a r s s o m e w h a t o v e r th e

M o v e m e n t

T ota l

o r d in a r ily

m ost yea rs

ord ers

o p e r a t io n s
G o ld

as a r e s u lt o f

S te e l m ills o p e r a t e d in th e n e ig h b o r h o o d o f

s u b s t a n t ia lly

J u n e , r e d u c e d its r a t e t o 3 p e r c e n t , e ffe c t iv e J u l y 7.

in J u ly

th e m a in te n a n c e o f h ig h ra te s o f p r o d u c t io n in m a n y im ­

Y ork

$ 6 ,0 0 0 ,0 0 0

C o lo m b ia , $ 5 0 0 ,0 0 0
E n g la n d .

d u r in g

On

th e

J u ly

ca m e fro m

fr o m
W est

R u s s ia ,
C oa st,

of

a p p a r e n t ly
1 9 2 9 , in
orders

th e

m on th ,

h ig h e r

m a in ta in e d

th a n

in

any

p r o d u c tio n

oth er

J u ly

o r d e r to m e e t a n u n e x p e c te d ly

and

to

b u ild

up

sto ck s

to

cover

la r g e
s a le s

at

a

except

ra te
J u ly

v o lu m e
d u r in g

of
th e

p e r io d w h e n a s s e m b ly lin e s w ill b e s t o p p e d f o r r e t o o lin g

62

MONTHLY REVIEW, AUGUST 1, 1936

PER CENT

1932

w as

reach ed

le s s

th a n

o n e -fo u rth

th r e e -q u a r te r s

t h ir d s o f th e d e c lin e .
com e

c lo s e s t

to

th e

o f th e

of

th e

1929

1929

le v e l,

has

ra te , r e c o v e r in g

tw o -

T h e p r o d u c t io n o f a u to m o b ile s h a s
1929

peak,

h a v in g

recovered

th ree-

q u a r t e r s o f its d e c lin e t o w it h in

18 p e r ce n t o f th e

ou tp u t.

d u r in g

A u to m o b ile

p r o d u c tio n

1929

th e fir s t h a lf o f

1 9 3 6 w a s a t a ra te c o m p a r a b le to th a t o f 1 9 2 8 , w h e n o u t­
p u t w a s n e x t to th e la r g e s t o n r e c o r d .
M a c h in e
m easured
d rop p ed
um e,

tool
in

ord ers,

d o lla r

th e

o n ly

one

of

th e

a m ou n ts ra th e r th a n

fo u r

s e rie s

p h y s ic a l u n it s ,

in 1 9 3 2 to o n ly a n e ig h th o f th e 1 9 2 9 d o lla r v o l­

but

th e

su bsequ en t

recovery

has

been

u n u s u a lly

r a p id a n d n e a r ly 7 0 p e r c e n t o f th e lo s s h a s b e e n r e g a in e d .
T h e le v e l o f o r d e r s r e c e iv e d d u r in g th e fir s t s ix m o n th s o f
th e

year

1 9 1 9 -3 5

has

been

p e r io d .

exceeded

The

p r o d u c tio n — re a ch e d
t io n s , in
ce r ta in

la s t

in

o n ly

lin e

its lo w

in

th ree

th e

years

in

th e

d ia g r a m — ce m e n t

p o in t, w ith

b u ild in g

op era­

1 9 3 3 , a n d lik e b u i l d i n g , h a s r e c o v e r e d le s s t h a n
oth er

im p o r ta n t

in d u s t r ie s

p r o d u c in g

d u r a b le

g o o d s , t h o u g h it h a s a d v a n c e d a q u a r t e r o f th e w a y fr o m
th e 1 9 3 3 lo w p o in t to w a r d th e 1 9 2 8 p e a k .
(Adjusted for seasonal variations and usual year to year growth)

Yearly Output of Four Important Industries Since 1919, Relative to
1923-25 Average (Data for first six months of 1936 on yearly
basis used to show comparison with preceding years)
fo r

1 9 3 7 m o d e ls .

cotton

D u r in g

th e fir s t p a r t o f J u l y

at a

h ig h le v e l, a n d a lt h o u g h t h e s a le s v o lu m e f e l l o ff la t e r in
have

p r o d u c tio n

been

o f cotton

m a in ta in e d

at

th r o u g h o u t th e m o n th .
ro se

fu r th e r

d u r in g

t e x t ile s w a s r e p o r t e d

an

u n s e a s o n a lly

h ig h

fir s t

h a lf

of

J u ly

w h ile

t io n

s e a s o n a lly

o f th e

S y ste m

a d ju s t e d

B oard

of

a d van ced

o f th e 1 9 2 3 -2 5

in d e x

G overn ors

2 p o in ts

of
of

d u r in g

th e

in

to

103

a v e r a g e , th e h ig h e s t le v e l f o r

a s a r e s u lt o f o r d e r s r e c e iv e d
p r ic e s , w a s

v ir tu a lly

in

p rod u c­

F ed era l E eserve

June

w it h o n e e x c e p t io n , s in c e A p r i l 1 9 3 0 .
van ce

in d u s tr ia l

per

cen t

a n y m on th ,

S te e l o u tp u t, p a r t ly

a n tic ip a tio n

u n ch an ged ,

o f th e

ad­

a lth o u g h

th e

s u m m e r c o n t r a c t i o n is u s u a l l y i n p r o g r e s s a t t h is t im e o f
y e a r , a n d a u to m o b ile p r o d u c t io n d e c lin e d o n ly 5 p e r c e n t
fr o m

M ay.

A n

u n u s u a lly

a ls o m a in t a in e d
of

cotton ,

in

w h ic h

cotton

in d ic a te s

h ig h

le v e l o f

m ills ; d a ily
th e

ra te

c o t t o n t e x t ile s , w a s u n c h a n g e d f r o m
th e s tim u lu s
w ere

o f r is in g

rep orted

O rd ers

to

r e c e iv e d

s lig h t ly

la r g e r

th a n

been

in

m a n u fa ctu re
and

excess

cotton

of

of

goods

p r o d u c tio n .

m a c h in e

tool

m a n u fa ctu re r s

in

and

w ere

M ay,

w as

M a y , a n d s a le s u n d e r

p r ic e s o f c o tto n

have
by

o p e r a t io n s

m ill c o n s u m p t io n

of

A pril

M ay

June

45
53
48
67

71
81
56
78

72 r
85
61
82

75
91
59
86

Automobiles
Passenger cars...............................................
M otor trucks.................................................

58
102

69
102

Fuels
Bituminous coal............................................
Anthracite coal..............................................
Petroleum, crude..........................................
Petroleum products......................................
Electric power...............................................

85
112
69
67
74

89
77
72
69
77

79
81
71
69
78p

80 p
78p
71 p

71
129
55
85
97

92
87
56
94
100

89
98r
54
88
103p

93
109 p
56 p
98 p
98 p
84
89

Metals
Steel.................................................................

b itu m ­

in o u s c o a l o u t p u t w a s a p p r o x im a t e ly u n c h a n g e d .
The

June

to

ra te

T h e g e n e r a tio n o f e le c tr ic p o w e r

th e

1936

s a le s o f

g o o d s , s tim u la te d b y r is in g p r ic e s , c o n tin u e d

th e m o n th

1935

w ere

a p p a r e n t ly

th e

Textiles and Leather Products
Cotton consumption....................................
Wool consumDtion........................................
Silk mill a c tiv ity ...........................................
Rayon deliveries*..........................................
Foods and Tobacco Products
M eat packing.................................................
Wheat flour....................................................
Refined sugar deliveries r............................
Tobacco products.........................................

66
101

69 p
113p

78p

67
85
71r
81

83
83
80r
90

81
81
73 p
84

83

44
50
73
76

58
83
70
96

59
80
70
97

74p
99

S ta te ,

w h ic h

had

Miscellaneous
Newsnrint paper...........................................
Machine tools................................................
p Preliminary

r Revised

E m p lo y m e n t

a n d

* For quarter ended
P a y r o lls

la r g e s t f o r J u n e o f a n y y e a r e x c e p t 1 9 2 9 in th e s e v e n te e n
y e a r p e r io d fr o m

1 9 2 0 to d a te .

S m a ll in c r e a s e s o c c u r r e d

F a ctory

e m p lo y m e n t

in

N ew

Y ork

in o p e r a t io n s a t z in c s m e lte r s , m e a t p a c k in g p la n ts , w h e a t

in c r e a s e d s o m e w h a t fr o m

f lo u r m ills ,

The

in g

and

t h a n is u s u a l i n J u n e , a n d p a y r o l l s s h o w e d a p p r o x i m a t e l y

ra te

of

and

e le c tr ic

m ills

p r o d u c in g

pow er

n e w s p r in t

p r o d u c tio n

rose

paper.

s e a s o n a lly ,

th e u s u a l s e a so n a l r e d u c tio n ,

T h e e x te n s iv e r e c o v e r y th a t h a s o c c u r r e d in th e m a n u ­
f a c t u r i n g o f c e r t a i n i m p o r t a n t t y p e s o f d u r a b l e g o o d s is

la r g e ly

m a c h in e r y ,

a ffo rd

1936
a

have

been

c o m p a r is o n

y ea rs b a ck to 1919.




a d ju s t e d

w ith

to

annual

D a t a f o r th e fir s t

an
d a ta

a n n u a l b a s is
fo r

to

p r e c e d in g

T h e r a te o f s te e l p r o d u c t io n , w h ic h in

s lig h t ly

m ore

S e a s o n a l r e d u c tio n s

in w o r k in g fo r c e s in th e c lo t h in g a n d t e x t ile g r o u p s w e r e

e v id e n t in th e a c c o m p a n y in g d ia g r a m .
of

d e c lin e d

th e a v e r a g e d e c lin e f o r th a t m o n th .

b itu m in o u s c o a l o u t p u t w a s s u b s t a n t ia lly u n c h a n g e d .

h a lf

M a r c h to M a y in s te a d o f s h o w ­

creased

o ffs e t

by

e m p lo y m e n t

b u ild in g

m a te r ia l,

g a in s
and

e m p lo y m e n t w a s r e p o r t e d

in

fo o d
in

th e

m e ta ls

and

in d u s tr ie s .

In ­

a ll o f th e u p -S ta t e

in d u s tr ia l d is tr ic ts w ith th e e x c e p tio n o f S y r a c u s e w h e re
s t r ik e

co n d itio n s

a ccou n ted

fo r

a

sh arp

r e d u c tio n

in

63

FEDERAL RESERVE AGENT AT NEW YORK

c o n s t r u c t io n a n d r e la t iv e ly s m a ll in c r e a s e s in th e n u m b e r

PERCENT

o f w o r k e r s in r e t a il t r a d e a n d in th e p u b lic u t ilit ie s w e r e
o ffs e t i n p a r t b y d e c r e a s e d e m p lo y m e n t a t c o a l m in e s .
B u ild in g
In

th e N e w

Y ork

and

N orth ern N ew

J e rse y area co n ­

tr a c ts f o r b u ild in g a n d e n g in e e r in g p r o je c t s a w a r d e d d u r ­
in g J u n e w e r e 16 p e r c e n t la r g e r th a n in M a y a n d m o re
th a n

7 0 p e r c e n t la r g e r th a n in

June

1935.

R e s id e n tia l

c o n tr a c ts a d v a n c e d f o r th e fo u r t h c o n s e c u tiv e m o n th a n d
w e r e in g r e a t e r v o lu m e th a n in a n y m o n t h s in c e N o v e m ­
ber

1931,

w h ile

co n tra cts

r e c o v e r e d s h a r p ly fr o m
m on th s
June

and

w ere

1935.

The

m ore
June

fo r

heavy

e n g in e e r in g

w ork

th e d e c lin e o f th e tw o p r e c e d in g
th a n

th ree

in c r e a s e s

tim e s

in

w e r e s lig h t ly o ffs e t, h o w e v e r , b y

as

th ese

h ig h

as

in

c la s s ific a t io n s

a r e d u c tio n in c o n tr a c ts

f o r n o n r e s id e n tia l w o r k o th e r th a n th e h e a v y e n g in e e r in g
typ e.

Seasonally Adjusted Indexes of Employment in Certain Industries
(1923-25 average = 100 per cent)
w o r k in g

fo rce s .

E m p lo y m e n t in

is in flu e n c e d t o

a c o n s id e r a b le

N ew

Y ork

ex ten t b y

C it y , w h ic h

th e im p o r ta n c e

o f th e c lo t h in g a n d a llie d in d u s t r ie s , w a s s o m e w h a t lo w e r
in J u n e th a n in M a y .
F o r th e U n ite d
in

b o th

tr ie s ,

S ta te s as a w h o le p r iv a t e

m a n u fa c tu r in g

covered

by

and

rep orts

e m p lo y m e n t

n o n m a n u fa c tu r in g

to

th e

D ep a rtm en t

in d u s ­

of

L abor,

in c r e a s e d f o r th e f o u r t h c o n s e c u t iv e m o n t h in th e p e r io d
fr o m

M ay

15

to

June

15, bu t

th e

g a in s

in

th e

la s t t w o

m o n th s w e r e m u c h s m a lle r t h a n th o s e r e p o r t e d in M a r c h
and

A p r il.

s e a s o n a lly

F a ctory
in

June

e m p lo y m e n t

fo r

th e

a d va n ced

secon d

m o n th

co n tra -

r a is in g

th e

s e a s o n a lly a d ju s t e d in d e x t o t h e h ig h e s t p o in t s in c e S e p ­
te m b e r
w as

1930.

a g a in

The

con cen tra ted

in d u s t r ie s ,

and

g ro u p s su ch
fo u n d r ie s
s in c e

in c r e a s e

in

in

th e

th e

e m p lo y m e n t

num ber

d u r a b le

in

of

goods

severa l

w ork ers
grou p

im p o r ta n t

of

sub­

a s b la s t f u r n a c e s , s te e l w o r k s , r o l l i n g m ills ,

and

m a c h in e

shops

reach ed

th e

h ig h e s t

cou rse

o f e m p lo y m e n t s in c e

1929

in

th ree

im p o r ­

g o o d s in d u s t r ie s — a g r ic u lt u r a l im p le m e n ts ,

e le c tr ic a l m a c h in e r y , a n d r a ilr o a d
show n

in

th e

e q u ip m e n t a n d r e p a ir

a c c o m p a n y in g

d ia g r a m .

E ach

s e r ie s h a s b e e n a d ju s t e d f o r th e u s u a l s e a s o n a l v a r ia t io n s .
A lt h o u g h
its

th e

w o r k in g

a g r ic u ltu r a l

fo r c e s

m ore

im p le m e n t

d r a s tic a lly

in d u s tr y

in

th e

red u ced

p e r io d

fr o m

1 9 2 9 t o 1 9 3 2 t h a n th e o t h e r in d u s t r ie s s h o w n , it h a s s in c e
e x p e r ie n c e d

a

cen t

of

average

now

at w ork .

th e

m ore

a ls o

p o in t

1933, bu t

1929 average.
roa d

has

th a n

p r o b a b ly

due

recovery ,

num ber

of
in

in c r e a s e d
is

s till

and

about

e m p lo y e e s
th e

an

in c r e a s e

of

show ed

146

per

th e

ce n t,

g rea test

oth er

H eavy

e x p a n s io n

ty p es

of

non­

r e s id e n t ia l w o r k a d v a n c e d b y a p p r o x im a t e ly 65 p e r c e n t,
and

co n tra cts

fo r

a b o v e th ose fo r

r e s id e n t ia l b u ild in g

w ere

44

per

cen t

th e fir s t s ix m o n t h s la s t y e a r .

F o r th e 37 S ta te s c o v e r e d b y th e F . W . D o d g e C o r p o r a ­
t io n r e p o r t c o n tr a c ts in J u n e w e r e 8 p e r ce n t h ig h e r th a n
in

M ay

and

57

per

cen t

above

th e

to ta l fo r

June

1935.

R e s id e n t ia l c o n tr a c ts a d v a n c e d 5 p e r ce n t fu r t h e r in J u n e
to th e h ig h e s t le v e l r e a c h e d
aw ard s fo r h ea vy

in

th e p a s t fiv e y e a r s , w h ile

e n g in e e r in g p r o je c t s w e re 2 6 p e r ce n t

h ig h e r th a n in M a y a n d m o r e th a n d o u b le t h e ir v o lu m e a t
t h is t im e la s t y e a r .
h ow ever,
fir s t

O th er ty p e s

d e c lin e d

s ix

m on th s

s lig h tly
of

1936

o f n o n r e s id e n tia l w o r k ,

fr o m

M ay

to ta l

to

June.

co n tra cts

w ere

F or

th e

a p p r o x i­

m a t e ly 7 8 p e r c e n t a b o v e th o s e p la c e d in th e fir s t h a lf o f
1935,

ea ch

m a jo r

c la s s ific a t io n

of

b u ild in g

r e c o r d in g

a

s u b s t a n t ia l in c r e a s e .
D a ta

fo r

th e

fir s t h a lf

o f J u ly

in d ic a te

a

fu r th e r

in ­

per

1929

a re

and

w as

r e p a ir

th e

to

ca se

40

th e

shop
in

per

fr o m
cen t

in d u s t r ie s

th e

n e c e s s it y

d a ily a w a r d s b e in g a p p r o x im a t e ly
ra te m a in ta in e d in
c o n s id e r a b ly
year,

le s s

co n tra cts

June.

th a n
fo r

17 p e r ce n t a b o v e th e

R e s id e n tia l c o n tr a c ts

is

cu stom a ry

p u b lic

w orks

a t th is
and

d e c lin e d

tim e

u t ilit y

of

th e

p r o je c ts

s h o w e d a p r o n o u n c e d c o n t r a -s e a s o n a l r is e , a n d o t h e r n o n ­
r e s id e n t ia l c o n tr a c ts
to ta l v o lu m e

a d va n ced

th e c o r r e s p o n d in g p e r io d
In d e x e s

o f

m ore

o f c o n tr a c ts p la c e d

B u s in e s s

u s u a lly .

The

w a s tw ic e as h ig h

th a n

as in

la s t y e a r .

A c t iv ity

e le c tr ic a l m a c h in e r y

c o n s id e r a b ly

about

in

90

its

lo w

b e lo w

th e

T h e c o m b in e d w o r k in g fo r c e s in th e r a il­

e q u ip m e n t

d e c lin e

r a p id

E m p lo y m e n t

in d u s tr y
in

w ith

c o n s tr u c tio n

cr e a s e in th e v o lu m e o f t o ta l b u ild in g c o n tr a c ts , a v e r a g e

ta n t d u r a b le
s h o p s — is

e n g in e e r in g

le v e ls

1930.

The

F o r th e fir s t h a l f o f 1 9 3 6 t o t a l c o n t r a c t s w e r e n e a r ly

75 p e r ce n t h ig h e r th a n in th e sa m e p e r io d o f 1 9 3 5 .

oth er

of

show ed

tw o

le s s

in d u s tr ie s ,

m a in ta in in g

e x is tin g

A c c o r d in g to a v a ila b le w e e k ly d a ta th e d is t r ib u t io n o f
g o o d s in
June.
fr e ig h t

th e fir s t h a lf o f J u ly
S h ip m e n ts
over

m ovem ent

th e

of

of

r a ilr o a d s

b u lk

com p ared

m e r c h a n d is e
in c r e a s e d

c o m m o d it ie s

la r g e ly to a la r g e in c r e a s e in

w ith

m is c e lla n e o u s

s o m e w h a t,

w as

g r a in

fa v o r a b ly

and
a ls o

and

h ig h e r ,

s h ip m e n ts a n d

th e
due

to a n

e q u ip m e n t, as th e b u ild in g o f n e w

fr e ig h t ca rs a n d lo c o ­

u n s e a s o n a l r is e in lo a d in g s o f liv e s to c k , r e fle c t in g f o r c e d

m o tiv e s

lo w

m a r k e t in g s

drop p ed

to

m o d e ra te r e c o v e r y
A m ong

th e

grou ps

fu r th e r

g a in




le v e l,

and

o n ly

a

th u s fa r .

by
in

th e

in d u s t r ie s ,

D ep a rtm en t

e m p lo y m e n t

in

in d u c e d

by

d rou gh t

c o n d itio n s .

th e D e p a r tm e n t o f C o m m e rce fr o m
in c r e a s e d

M a y to J u n e w a s r e p o r t e d in 11 o f th e

su rveyed

la r g e

e x tr e m e ly

n o n m a n u fa c tu r in g

e m p lo y m e n t fr o m
16

an

has occu rred

of

L abor.

p r iv a te

A

b u ild in g

R ep orts

to

3 6 c itie s t h r o u g h o u t

t h e c o u n t r y in d i c a t e d c o n s id e r a b le in c r e a s e s in r e t a il s a le s
of

sum m er

w h o le s a le

c lo th in g

tra d e

m e r c h a n d is e

got

and

becam e
under

v a r io u s

m ore
w ay.

v a c a tio n

a c t iv e
In

th e

as

ite m s ,

b u s in e s s

N ew

Y ork

in

and
fa ll

M etro-

64

MONTHLY REVIEW, AUGUST 1, 1936

p o l i t a n a r e a , h o w e v e r , d e p a r t m e n t s t o r e s a le s a p p e a r e d t o

h ig h e r

have

w h ereas

d e c lin e d

p a n y in g
June

som ew h at

e x c e e d in g ly
in d e x e s

fo llo w in g

of

m ore

th a n

s e a s o n a lly ,

accom ­

h o t w ea th er.

b u s in e s s

th a n

in

th e

c o r r e s p o n d in g

d u r in g

th e

fir s t

s ix

1 .8 p e r c e n t l o w e r t h a n i n

a c t iv ity

a re

show n

in

Jan.
to June

June

Distribution to Consumer
Departm ent store sales, U. S.................
Department store sales, 2nd D is t........
Chain grocery sales..................................
Other chain store sales............................
M a il order house sales.............................
Advertising.................................................
New passenger .car registrations...........
Gasoline consumption..............................

76
70
61
85
80
58
61
77

General Business Activity
Bank debits, outside New Y ork C ity ..
Bank debits, New York C ity ................
Velocity of demand deposits, outside New
Y ork C it y ...................................................
Velocity of demand deposits, New York
C ity ..............................................................
New life insurance sales..............................
Factory employment, United States........
Business failures............................................
Building contracts........................................
New corporations formed in N . Y . State. .

April

M ay

67
52
72r

66
72
59
72

67
70
53p
81p

83r
76
59
88
90
68
79p
87

82
74
60
92
90
65
85 p

76
71
61
85
83
66
80

65
44

General price level*......................................
Composite index of wages*........................
Cost of liv in g *...............................................

New Y o r k ......................................... + 1 3 .0
B uffalo............................................... + 1 7 .1
Rochester..........................................
+ 1 1 .2
Syracuse............................................
+ 1 .8
Northern New Jersey..................... + 1.3
Bridgeport........................................ + 9 .1
Elsewhere.......................................... + 6.1
Northern New York State. . . . + 5 .2
Southern New York State........ — 1.2
Central New York State........... + 9 .5
Hudson River Valley D istrict.. + 1 3 .1
Capital D istrict........................... + 5 .8
Westchester and Stam ford. . . . + 4 .1
Niagara Falls...............................
+ 8 .3

D e p a rtm e n t

S to re

th e

fir s t

of

1 3 .1

p e r io d

a

som ew hat

per

cen t

year

ago,

m ore

a c c o m p a n y in g
in

N ew

Y ork

in c r e a s e

over

N orth ern
s a le s ,
s a le s
N ew
In

and
a

+

1-7

4 5.8

4 9.0

+ 16.7

+ 9 .3

42.9

44.4

70

73

W h o le s a le

40
53
87
35
42
55

44
55
88p
33
43
57

t h is d is t r ic t a v e r a g e d

144
188
140

150
188
141

150
190
142

152p
190
142

J u ly ,

T ota l

T ra d e

June

s a le s

N ew

th a n

s a le s

of

J u ly

ago,

1935

had

in

p art

on

th e

s in c e M a r c h .
rose

r e p o r tin g

s in c e

th e

lin e s

s a le s

J u ly

o f s ilk

1933,

to ta l

le v e l,

R e p o r t in g

sto re s

a

1 0 .8

per

s m a lle r

lo c a lit ie s

th e

th a n

rep orted

in c r e a s e s in

th e

p r e v io u s

D is tr ic t
S ou th ern

fir m s

and

in

N ew

S a le s o f t h e

in

M ay.

g a in s

d a ily

in

ra te

m on th .

w as

S ta te

per

le a d in g

cen t

c o n c e r n s r e g is t e r e d th e la r g e s t in c r e a s e in

record ed

la r g e r

a d va n ces

ago.

but

th e

d ecrease

s a le s
of




s a le s

th a n

in

w as

s m a lle r

th a n

in

th e

M ay.
a year

p r e v io u s

tw o m on th s.
F o r t h e fir s t 6 m o n t h s o f 1 9 3 6 , t o t a l s a le s o f t h e r e p o r t ­
in g

w h o le s a le

con cern s

in

th is

d is tr ic t

averaged

8 .4

per

in

c o m p a r e d w ith

of

th e fir s t h a lf o f 1 9 3 4 a n d 1 9 3 5 .

of

th e

s a le s

ta x

a n in c r e a s e o f o n ly

in
Percentage
change
June 1936
compared with
June 1935

d e p a r tm e n t sto re s

th a n

th a t

sto re s

sh ow n

in

0 .4 p e r c e n t b e t w e e n

Per cent of
accounts
outstanding
M ay 31
collected in
June

Comm odity
Net

m ost

Stock
end of
month

Percentage
change in
net sales
First six
mos. 1936
from 1935

1935

1936

90.4
4 0 .8
4 0 .0
59.3
4 1.4
2 2.9
4 8.9
59.4
4 9.2
2 5.7

9 0.4
4 5.4
4 3 .0
6 5.0
4 3 .0
3 2.8
4 8.4
60.6
5 1.8
} 2 8.5

55.7

5 8.4

o v e r la s t y e a r , b u t th e

s a le s w e r e
of

sto re s

N orth ern
show ed

not
in

as la r g e
th e

N ew
th e

in

as

C a p ita l

Jersey,

le a s t

th is

la s t y e a r , b u t

th is

in

c o n c e r n s r e m a in e d b e lo w

v o lu m e

and

fa v o ra b L e

d is tr ic t w e re

on

an

average

D u r i n g t h e fir s t h a l f o f 1 9 3 6 , t o t a l s a le s o f t h fc /y ^ o r t ;d e p a r tm e n t sto r e s in

p ron ou n ced

in c r e a s e

la r g e r

a p p a r e l sto re s

h ig h e r th a n

m ost

ago.

a d va n ce

cen t

D ep a rtm en t

S a le s

S yracu se,
Y ork

th e

la r g e s t

red u ced

d a i l y b a s is t h e in c r e a s e w a s le s s t h a n t h a t r e p o r t e d i n M a y ;

in g

s a le s

th e

a ll o f

year

1 9 3 4 , a n d s a le s o f t h e g r o c e r y , d r u g ,

S a le s o f m e n ’s c l o t h i n g

cen t

c o m p a r i s o n s i n a v e r a g e d a i l y s a l e s i n a n u m b e r o f m oittJ S fc.
1 5 .6

je w e lr y

sh ow ed

a

ce n t h ig h e r th a n in th e c o r r e s p o n d in g p e r io d o f 1 9 3 5 , as

per

th e

d ia m o n d

o f s h o p p in g d a y s b e t w e e n t h is y e a r a n d la s t , t h e in c r e a s e

in

goods

over

in

in it ia t io n

s a le s

in

sto r e s

J u n e t o t a l s a le s o f th e r e p o r t i n g

in

fir m s

S a le s o f n e a r ly

s u b s t a n t ia lly

Jersey.

in c r e a s e

w h o le s a le

s a le s s in c e la s t F e b r u a r y , a n d t h e h a r d w a r e a n d s t a t io n e r y

d e c lin e d

June

r e p o r tin g

2 8 .0

to

have

th e

show ed

a

r e p o r tin g

c o r r e s p o n d in g

to

fr o m

w h ile

th e

in M a y , b u t a ft e r a llo w in g f o r d iffe r e n c e s in th e n u m b e r
w as

r e p o r tin g

th e la r g e s t in c r e a s e

i n t h is d i s t r i c t w e r e 1 0 .7 p e r c e n t h i g h e r t h a n la s t y e a r .
The

th e

10 p e r c e n t h ig h e r th a n la s t y e a r ,

th e

Y ard age

a rea o f N e w Y o r k

in

appear

B r o o k ly n

Jersey

of

p a p e r , c o t t o n g o o d s , a n d s h o e fir m s m a d e th e m o s t f a v o r ­

s a le s

s e a s o n a lly

year

+ 9 .4
+ 5 .4
+ 1 1 .7
+ 8 .9

43
49
86
33
45
53

e x tr e m e ly h o t w e a th e r.

a ttr ib u ta b le
in

but

52.5
50.2
5 1.0
40.1
45.3
41.7
37.1

a b le y e a r t o y e a r c o m p a r is o n s in e ig h t m o n t h s t o a y e a r .

h ig h e r

th a n

4 9.2
4 7.3
46 3
3 6.7
4 2.7
3 8.2
3 3.0

+ 1 5 .6

71

d e p a r tm e n t s to r e s in th e M e t r o p o lita n
w ere

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

+ 1 0 .7

45
55
81
44
31
59

T ra d e

h a lf

+ 9 .4
+ 1 0 .9
+ 7 .6
+ 7 .8
+ 7 .9
+ 7 .5
+ 6 .7
+ 1.1
+ 2 .1

Apparel stores.........................

The
D u r in g

1936

67 p
43

* 1913 average=100

r Revised

1935

All department stores............

in c r e a s e s in c e M a y
p Preliminary

w ere

Stock
on hand
end of
month

June

65
42

41

yea r,

Per cent of
accounts
outstanding
M ay 31
collected in
June

Net Sales

Locality

59
64
53
76

la s t
s a le s

1934.

1936

June

of

1935

Percentage change from
a year ago

(Adjusted for seasonal variations, for usual year to year growth,
and where necessary for price changes)
1935

of

th e

ta b le .

Primary Distribution
Car loadings, merchandise and m isc...
Car loadings, other..................................
Exports.......................................................
Im po rts.......................................................

p e r io d

m on th s

d is tr ic t w e re

8 .9

per

c e r it

8

Groceries........................
M en’s clothing..............
Cotton goods. . ........
Rayon and Silk goods.
Shoes...............................
D rugs..............................
Hardware.......................
Diamonds
Jewelry..
Weighted average.

+ 9 .6
— 10.0
+ 2 2 .4
+ 4 1 .0 *
+ 1 9 .8
+ 16.6
+ 1 3 .8
+ 1 0 .6
+ 15.9
+ 2 7 .1
+ 5 4 .3
+ 1 0 .0

— 8 .4

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

+ 3 .7
+ 1 0 .7
+ 1 5 .2
+ 2 .4 *
— 3.1
+ 11.8
+ 9 .9
+ 1 0 .1
+ 4 .8
+ 2 4 .8
+ 3 6 .9
+ 8 .4

Quantity fighres reported by the National Federation of Textiles, Incorporated
ii<Hlacm&^d in weighted average for total wholesale trade.

FEDERAL RESERVE BANK OF NEW YORK
MONTHLY REVIEW, AUGUST 1, 1936
B u s in e s s C o n d i t i o n s

in t h e U n it e d

S ta te s

(Summarized by the Board of Governors of the Federal Eeserve System)
T TOLUME o f production, employment, and trade was sustained in June at
▼ the May level, although usually there is a decline at this season. Whole­
sale prices o f commodities advanced between the middle o f May and the third
week o f July, reflecting in part the effects of the drought.
P r o d u c t io n

Index Number of Production of Manufactures and
Minerals Combined, Adjusted for Seasonal
Variation (1923-25 average
= 100 per cent)
PER CENT

A

Index of Factory Employment with Adjustment
for Seasonal Variation (1923-25 average
= 100 per cent)
PER CENT

and

E

m ploym ent

The B oard’s seasonally adjusted index o f industrial production increased
from 101 per cent o f the 1923-25 average in May to 103 per cent in June.
Steel production continued at about 70 per cent of capacity in June and the
first three weeks o f July, although a considerable decline is usual at this season.
Output o f automobiles declined seasonally. The cut of lumber showed a
seasonal rise in June following a substantial increase in the preceding month.
Production increased at woolen mills and was sustained at cotton mills where
a decline is usual in June. Output o f foods increased.
Factory employment and payrolls showed a slight increase between the
middle of May and the middle o f June, contrary to seasonal tendency. Steel
mills and plants producing machinery employed more workers, and at auto­
mobile factories there was less than the seasonal decline. At textile mills
employment was unchanged, although a decline is usual in June, while the
clothing industries reported a decrease in the number employed.
Total value o f construction contracts awarded, as reported by the F. W.
Dodge Corporation, increased somewhat from May to June and continued to
be substantially larger than a year ago. There was a further increase in
residential building.
g r ic u l t u r e

Crop estimates by the Department o f Agriculture on the basis of July 1
conditions indicated little change from last year for wheat and corn and
considerable declines for oats, hay, potatoes, and tobacco. Since July 1 pros­
pects have been reduced by extreme drought over wide areas. Cotton area in
cultivation on July 1 was estimated by the Department o f Agriculture at
30.600.000 acres compared with 27,900,000 acres last year and an average o f
41.400.000 acres in the years 1928-1932.
D is t r ib u t io n

Freight car loadings increased seasonally in June, and the distribution o f
commodities to consumers was maintained at the May level. In recent months
retail trade as measured by sales o f automobiles and by the volume o f business
of department, variety, and mail order stores has expanded considerably.
C o m m o d it y P r ic e s

Wholesale Price Index of United States Bureau
of Labor Statistics (1926 average
= 100 per cent)

The general level of wholesale commodity prices, as measured by the index
of the Bureau o f Labor Statistics, advanced by about 3 per cent between the
middle of May and the third week of July, following a decline of about the
same amount earlier in the year. Prices o f wheat, flour, feed grains, and
dairy products advanced sharply, owing primarily to the drought, and there
were increases also in the prices of hogs and pork, cotton and cotton textiles,
silk, rubber, copper, and finished steel.
B a n k Cr e d it

Member Bank Reserves and Related Items
(Latest figures are for July 22)




Gold imports, which had been in large volume in May and June, declined
in July. Funds held by the Treasury as cash and on deposit with Federal
Reserve Banks declined, as the result o f disbursements in connection with
the cashing o f veterans’ service bonds. Consequently reserve balances o f
member banks, which had declined in June, rose once more to tlieir previous level.
Total loans and investments o f reporting member banks in leading cities,
after increasing sharply at the end of May and the early part o f June, declined
somewhat in the four weeks ended July 15, reflecting largely a reduction in
loans to security brokers and dealers in New York City. Balances held for
domestic banks increased by $800,000,000 during the period, as a consequence
of redeposit with reporting banks o f a considerable part o f funds acquired
by banks through Treasury disbursements.