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MONTHLY REVIEW o Cei a dB s n s Cniin f rdt n u i e s o d t o s S e c o n d F e d e r a l Federal Reserve Bank, New York M o n e y M a r k e t in J u l y E x cess reserves of member banks rose to new high levels in J u l y , both in N ew Y o rk C ity and in the country as a whole, despite fu rth er increases in the reserve re quirements of the banks, accom panying continued growth in their deposits, and some reduction in the volume of Governm ent securities held b y F e d e ral Reserve Banks. Disbursements of fu n d s b y the Governm ent were the largest facto r in the fu rth er expansion of member bank reserves, but a continued moderate inflow of gold and disbursement from foreign central bank deposits with F e d e ral Reserve Banks, also were contributing factors. A s T rea su ry balances in the F ed eral Reserve B an ks have not been enlarged b y sales of new securities (except by sales of U nited States savings bonds) in several months, and as Governm ent expenditures have continued to exceed current revenues by substantial amounts, the total amount of T re a su ry balances in the Reserve B anks and cash in the T re a su ry has been reduced fa ir ly steadily since the middle of F e b ru a ry . The sum of the items “ T rea su ry cash ” and “ T re a su ry deposits w ith F ed eral Reserve B a n k s ” , which are cu rren tly reported in weekly statements issued b y the B o ard of Governors of the Fe d e ral Reserve System , after reaching a m axim um of $4,021,0 00,00 0 on F e b ru a ry 1 5 , declined to $3,521,0 0 0 ,0 0 0 on Ju n e 28, and w as reduced fu rth er to $3,248,000,000 on J u l y 26. The disbursement of these funds has tended to increase member bank reserves accordingly. O wing to the fa ct that a large p a rt of the increase in bank reserves du ring the past two months has been due to this factor, most of the net gain in excess reserves since the previous peak was reached on M ay 24 has occurred outside N ew Y o rk C ity . On J u l y 26 the amount of excess reserves held by N ew Y o rk C ity banks w as $2,558,000,000, an increase of only $30,000,000 since M a y 24, whereas the amount held b y all other member banks showed an increase of $150,00 0,000 du ring the same period to about $1,930,000,000 on J u l y 26. The funds paid out b y the T re a su ry fo r Governm ent expenditures are w idely dis tributed throughout the country, whereas the inflow of foreign funds, which accounted fo r m uch of the increase in excess reserves du ring the critical period in European political affairs in the spring, was largely concentrated in N ew Y o rk C ity. The N ew Y o rk C ity member banks, however, continue to hold a substantially larger pro portionate volume of excess reserves, relative to their reserve requirements, than banks in other parts of the country, owing p a rtly to the large accum ulation of fo r R e s e r v e D is t r ic t August 1, 1939 eign funds in N ew Y o rk C ity , and p a rtly to the un precedented volume of idle fund s of banks in other localities that are now on deposit w ith the N ew Y o rk C ity banks. Gold continued to flow to this country in fa ir ly large volume du ring the past month, but, as in Ju n e , a con siderable p a rt was placed under earm ark at this bank on a rriv al fo r the accounts of foreign central banks, and therefore had no effect on bank reserves in this country. Nevertheless, the gold stock of the U nited States in creased about $130,0 00,00 0 fu rth er in the fou r weeks ended J u l y 26 to a new high level. The amount of gold held under earm ark fo r foreign accounts at this bank rose about $170,000,000 fu rth er du ring the month of J u l y , and also reached a new high level. D u rin g the fou r weeks ended J u l y 26, however, deposits of foreign central banks w ith F e d e ral Reserve B an ks were reduced $63,000,000. The amount of curren cy outstanding in the United States has shown a seasonal decrease follow ing a substantial seasonal rise over the Ju n e month end and F o u rth of J u l y holiday, but remains at a high level. O rdin arily the amount of curren cy outstanding on the last W edn esday of J u l y is at approxim ately the lowest level of the year, but this y e a r it rem ained about $380,000,000 above the seasonal low point at the end of Ja n u a r y , ap paren tly reflecting in p a rt the unusual for- Excess Reserves of New York Central Reserve City Member Banks and of All Member Banks in the United States MONTHLY REVIEW, AUGUST 1,1939 58 eign demands fo r U nited States curren cy du rin g late w inter and early spring, and in p a rt a continuation of the u p w ard trend in the volume of currency in use in this country. F ed eral Reserve B an k holdings of T re a su ry bills were reduced $76,000,000 in the five weeks ended J u l y 26, as m aturing bills in the F e d e ral Open M arket A cco un t were replaced only in p a rt by purchases of new bills in the m arket, in accordance w ith the statem ent issued on Ju n e 29. Th is reduction had the effect of offsetting, only to a small extent, the increases in member bank reserves from other sources. M o n ey R ates The increasing volume of idle fund s available for em ploym ent w as reflected in some decline in yields on T re a su ry bonds and T re a su ry notes du ring the past month. Y ield s on the highest grade corporation securi ties also held at about the lowest levels in m any years. A slight rise in yields on T rea su ry bills accompanied the increased su p p ly of such bills available to the m arket, which resulted from the reduction in F e d e ra l Reserve R ank holdings of such bills, but yields on these securities remained almost infinitesimal. To illustrate, the average yield on new T re a su ry bills sold du ring J u l y at no time reached a level sufficiently high so th at an investment of $10 ,0 0 0 in the bills fo r three months w ould produce income of as much as 50 cents. Other money rates re m ained at the previous low levels. Money Rates in New York July 30, 1938 June 30, 1939 July 28, 1939 Stock Exchange call loans....................... Stock Exchange 90 day loans................. Prime commercial paper— 4-6 months.. Bills— 90 day unindorsed......................... Average yield on Treasury notes (3-5 years)....................................................... Average yield on Treasury bonds (more than years to maturity or call date) Average rate on latest Treasury bill sale 91 day issue............................................ Federal Reserve Bank of New York rediscount rate....................................... Federal Reserve Bank of New York buying rate for 90 day indorsed bills 12 1 *1X H X * 1 *1H 1 X-*A Xrh A % % 0.70 0.48 0.43 2.51 2.21 2.13 0.059 0.005 0.019 1 1 1 X X X, * Nominal. M e m b e r B a n k C r e d it T o tal loans and investments of the reporting member banks continued to increase m oderately d u rin g the past month. Com m ercial loans increased rather generally in reporting banks du ring the past month, about a month in advance of the usual seasonal upturn. A t least p a rt of the increase appears to have been due to the p lacing of additional loans of longer m aturities than ordinary com m ercial loans. In some cases the “ term loan s’ ’ were reported to have been obtained fo r the purpose of retirin g outstanding corporation securities, rather than to sup p ly additional w orking capital, but on the other hand, a few instances were reported in w hich at least p a rt of the proceeds of new securities sold du ring J u l y w as to be used to rep ay bank loans. A considerable p a rt of the increase in total loans and investments of w eekly reporting banks in 10 0 p rin cipal cities other than N ew Y o rk in the first three weeks of J u l y was due to an increase in investments, chiefly in T re a su ry bills, but to some extent in T re a su ry notes and bonds. M ost of the increase in investments w as in Chicago banks. The rise in excess reserves of member banks d u rin g the past month has been accom panied b y an even larger rise in demand deposits in reporting member banks, which also reached new high levels in N ew Y o rk C ity and in other leading cities. The p rin cip al contributing factors ap parently were Governm ent expenditures, and increased loans and investments. G o v e r n m e n t S e c u r it ie s A ft e r declining sligh tly fu rth er in the opening days of J u l y , prices of Governm ent bonds rose sh a rp ly in the week follow ing the F o u rth of J u l y holiday, reflecting a moderate revival of investm ent demand, especially for the longer issues, and a lack of a n y substantial offerings. Between J u l y 3 and J u l y 10 the average price of T rea s u r y bonds m aturing or callable a fter twelve years rose a fu ll point, thus regain ing much of the ground lost in the latter p a rt of Ju n e . F o llo w in g this rap id advance, a ctivity in the m arket subsided and prices sagged slightly until the 20th, when a renewed rise began. N ea r the close of the month the average yield on the five longest term T re a su ry bonds w as down to 2 .1 3 per cent as com pared w ith 2 .2 1 per cent at the end of Ju n e , and was thus w ithin a few points of the lowest level that has been reached so fa r. T ra d in g in T re a su ry notes w as quiet, but prices advanced grad u a lly du ring the month, and yields declined correspondingly. The only direct T re a su ry financing du rin g J u l y again consisted of w eekly offerings of $100,000,000 of 9 1 d ay T re a su ry bills to replace m aturities of corresponding amount. A p p a re n tly as a result of the increased sup p ly of T re a su ry bills available to the m arket, incident to the reduction in T re a su ry bill holdings of F e d e ra l Reserve Banks, the average rates at w hich T re a su ry bills were sold d u rin g J u l y rose slightly, ran gin g from 0 .0 12 to 0.019 per cent. On J u l y 24 the T re a su ry, on behalf of the Com m odity C redit Corporation, offered $200,000,000 of Com m odity C redit Corporation % per cent notes due A u g u st 1, 1 9 4 1 . The proceeds of these notes, which are fu lly guaranteed by the U nited States, w ill be used to p a y off corn, cotton, and w heat notes that m ay be presented for paym ent b y banks beginning J u l y 3 1 . C o m m e r c ia l P a p e r a n d B il l s The range of rates fo r average grade prim e 4 to 6 month commercial p aper continued to be % - % P er cent du ring J u l y , w ith somewhat the larger volume of trans actions at the lower quotation. D ealers reported that their acquisitions of paper again were in v e ry small proportions relative to the large amounts fo r which banking investors continued to inquire. The Ju n e 30 total of paper outstanding through reporting commercial houses w as $180,70 0,000 as com pared w ith the M a y 3 1 total of $ 18 8 ,5 0 0 ,0 0 0 ; a y e a r ago outstandings were $225,30 0,00 0. A c tiv ity in the discount m arket fo r bills d u rin g J u l y continued to be restricted to small proportions b y reason of the limited amounts of acceptances released b y ac ceptors to dealers fo r resale in the open m arket. In vest ment demand rem ained active and largely unfilled. D ealers' offering rates continued at levels previously quoted. The total volume of acceptances outstanding at FEDERAL RESERVE BANK OF NEW YORK the end of Ju n e w as $245,000,000 or approxim ately the same as at the end of M ay. Some fu rth er decrease occurred in export bills but slight increases in most of the other classifications largely offset this decline. The decline from a ye a r ago in bills outstanding diminished sligh tly fu rth er in Ju n e . (Millions of dollars) Type of acceptance June 30, 1938 May 31, 1939 June 30, 1939 82 51 7 29 19 82 45 Import. ................................................ Export.......................................................... Domestic shipment.................................. Domestic warehouse credit..................... Dollar exchange......................................... Based on goods stored in or shipped between foreign countries.................... 79 63 9 49 63 59 60 T o t a l................................................... 264 247 245 1 8 30 20 S e c u r ity M a r k e ts Stock prices in J u l y registered the strongest advance fo r an y month since Ju n e , 19 3 8 . T ra d in g du ring the first ten days of the month w as exceptionally dull, on no d ay du ring that period exceeding 500,000 shares on the N ew Y o rk Stock E xch an ge , and on the d ay before the F o u rth of J u l y holiday declining to 240,000 shares, the smallest volume fo r a n y fu ll d a y in m any years. P rices in this p a rt of the month, however, w ere m oderately firm, and in the following week rose substantially, accom panying a rap id increase in the volume of trading, which on J u l y 1 7 and 1 8 was not f a r short of 2,000,000 shares a day. Subsequently trad in g a ctivity diminished somewhat, but fo r the latter h a lf of the month averaged more than 1,000,000 shares a day. A f t e r a p a rticu la rly strong rise on the 17 th , price movements became somewhat irregu lar, but on the whole there were fu rth er small gains. N ear the close of J u l y the average level of stock prices was about 1 3 per cent higher than at the end of Ju n e , and 19 per cent above the lowest level of the year, reached early in A p ril. I t remained, howT ever, about 8 per cent below the highest point of the year, reached early in Ja n u a r y . W h ile the largest gains, in num ber of points, occurred in industrial stocks, the largest percentage rise was in railroad shares. P u blic u tility stocks also advanced sub stantially, and near the end of J u l y were close to the highest levels o f the year. The prin cip al feature of the domestic corporation bond m arket was a sizable advance in medium and low er grade issues, especially in railroad bonds. H ighest grade cor poration bonds also advanced m oderately in the early p a rt of the month, accom panying the rise in T re a su ry bonds, but sagged somewhat in the th ird week of J u l y , and at the close of the month showed average gains of only about % point over closing prices at the end of Ju n e . N e w F in a n c in g A s in Ju n e, new security issues du ring J u l y included a large volume of domestic corporate security flotations. The offering of several fa ir ly large issues again ac counted for a substantial portion of the total, which, next to the Ju n e volume, was the largest m onthly total of this year, amounting to $215,0 00,00 0. W hile a large p a rt of the proceeds w as to be used fo r refunding, some increase occurred in the amount to be devoted to other purposes. 59 There were a number of preferred stock offerings, and aggregate stock issues expanded from $11,0 0 0 ,0 0 0 in Ju n e to $42,000,000 in J u l y , the largest total since the A p r il figure of $54,000,000. The larger corporate securities issues du ring J u l y w ere : $85,000,000 Shell Union Oil Corp. debenture 2 % ’s of 19 5 4 , at 9 7 % , fo r refun ding $32,700,00 0 W est P enn P ow er Co. 4 % per cent pre ferred stock, at 1 1 0 — subject to prior righ ts of stockholders— fo r refun ding $26,500,000 K an sas P ow er and L ig h t Co. 3 % per cent bonds of 19 6 9 , at 1 0 8 % , fo r refun ding $25,000,000 Southern B e ll Telephone and Telegraph Co. debenture 3 ’s of 19 7 9 — $22,250,00 0, offered p ub licly at 1 0 7 % , and $2,750,000 sold to the trustee of the pen sion funds of the B ell System at 10 6 — $20,000,000 to re p a y advances from the A m erican Telephone and Telegraph Co., rem ainder w orking capital. M unicipal bond aw ards totaled only $75,000,000 in J u ly , follow ing the large total of $192,000,000 in Ju n e . C ity of N ew Y o rk issues of $35,000,000, including 2% serial bonds of 19 4 0 -79 , 4 per cent serial bonds of 19 4 0 -54, and 2'% per cent corporate stock of 19 6 9 , constituted nearly one-half of the offerings. These securities were disposed of w ithin a few hours by the syndicate at prices to yield the investor from 0.30 to 2.8 5 per cent, depending upon m aturity. Fo llo w in g closely upon last m onth’s N ew B ru n sw ick issue, the P rovince of Quebec entered the U nited States security m arket in J u l y , the second Canadian P rovince to register under the Securities A c t of 19 3 3 . The securi ties included $20,000,000 of 3 per cent serials of 19 4 0 -59 , and $10,000,000 of 3 % per cent bonds of 19 5 3 . The month of A u g u st promises to be an active one, according to registrations that are scheduled to become effective du ring the month. H eadin g the list are the P en n sylvan ia Pow er and L ig h t Com pany bonds and de bentures aggregatin g $123,50 0 ,0 0 0 , which would be one of the largest power and light refu n din g operations in several years. The registration is scheduled to become effective on A u g u st *9. F o re ig n E x c h a n g e s W ith the exception of guilders, which showed rather erratic fluctuations, rates fo r the leading Eu ro p ean cu r rencies continued to hold steady du ring J u l y . The pound sterling firmed sligh tly against the dollar tow ard the middle of the month, when rum ors were p u t into circula tion that G erm an y and P oland would reach an agree ment over Danzig. D u rin g the rem ainder of J u l y , how ever, the spot rate continued to fluctuate w ithin the narrow range of $ 4 .6 8 % to $ 4 .6 8 % , and turnover was limited. F re n ch fran cs were m aintained at about 17 6 .7 2 to the pound and, therefore, also ruled steady against the dollar. A s was the case in the previous month, rate changes in the N etherlands exchange responded to internal politi cal developments. R eports tow ard the middle of J u l y that a new N etherlands cabinet committed to a conserva tive financial po licy w ould be form ed under form er 60 MONTHLY REVIEW, AUGUST 1,1939 P rim e M inister C o lijn led to short covering and the spot rate rose to a high of $ 0 .5 3 6 7 on J u l y 24. Renewed signs of weakness, however, developed on subsequent days, as indications of P arliam en tary opposition to the new cabinet grew , and the spot rate reacted to close the month at about $ 0 .5 3 1 3 , only sligh tly above a month ago. Sp o t quotations fo r the other so-called neutral cu r rencies showed only minor fluctuations du ring the month ju st ended, and the discount on three month belgas narrow ed from an equivalent of 4 per cent per annum to 2 per cent, accom panying an easing of open m arket m oney rates in Brussels, which followed the N ational B a n k ’s action in low ering its discount rate from 3 to 2 y2 per cent. The m arket fo r non-European currencies du ring the past month w as featured b y a sharp break in the Cuban peso and renewed weakness in the Chinese yuan. The peso declined a b ru p tly to a discount of about 1 8 per cent against the U nited States dollar ea rly in the month, in response to an intense demand fo r dollars in H avan a induced b y projected Cuban m onetary legislation. Some im provem ent occurred, however, as the original legisla tive program was substantially modified, but the dis count at the end of J u l y , at around 9 % per cent, was considerably in excess of the 5% per cent figure p reva il ing p rior to the recent decline. F o r the second time since the early p a rt of Ju n e the British-Chinese Stabilization F u n d ap paren tly w ithdrew its support of the yu a n on J u l y 18 , allowing the Sh angh ai rate on London to decline from about 6 9 / 1 6 pence, at which level the exchange had recently been pegged, to about 4 % pence. P rio r to Ju n e 8 the rate had been supported at 8 x pence. C an a /4 dian dollars showed a steady im provem ent du ring J u l y and tow ard the end of the month the spot rate was at p a rity w ith the U nited States dollar fo r the first time since the early p a rt of M arch, 19 3 8 . W ith respect to the London bullion m arket, some hoarding demand fo r gold appears to have developed in the latter p a rt of the month ju st ended, and the dollar equivalent of the London m arket price of gold rose as high as $ 3 4 .7 7 % , or more than 2 y2 cents above the theoretical shipping point to this country. Special quarters were reported to have supplied gold to the m arket and on a number of days only a p a rt of the bu yin g orders w as satisfied at the fixing. on the W est Coast, as w ell as at N ew Y o rk , but deduct ing the addition to foreign earm arked holdings, was $10 3,10 0 ,0 0 0 , as com pared w ith $130 ,50 0 ,0 0 0 in Ju n e and a m onthly average of $257,70 0 ,0 0 0 in the first six months of 19 3 9 . The gold stock of the U nited States increased about $130,0 00,00 0 du rin g J u l y , as com pared w ith a gain of $150,000,000 du ring Ju n e and $16 5,0 0 0 ,0 0 0 d u rin g M ay, reaching a new high figure of approxim ately $ 16 ,2 4 0 ,000,000 at the end of the month. The total increase for the first seven months of the y e a r has been in excess of $1,700,000,000. C e n tra l B a n k R a te C h an g e s The discount rate of the N ational B an k of Belgium , which had been reduced from 4 to 3 per cent on M a y 1 1 , was lowered fu rth e r to 2 y2 per cent on J u l y 6. A cco m p an yin g this reduction, a special discount rate of i y 2 per cent w as established fo r export bills, and the N ational B an k agreed to make advances against T re a su ry securi ties m aturing w ithin 12 0 days at a rate equal to that for ordinary discounts. Effective J u l y 1 5 the discount rate of the B an k of Lith u an ia w as lowered from 7 to 6 per cent, h aving been raised from 5 to 7 per cent on M a y 1 5 . P ro d u c tio n a n d T r a d e The general level of production and trade appears to have been w ell m aintained in J u l y . Shutdow ns of auto mobile plants fo r model changes, w hich form erly came near the y ea r end, but which have been concentrated in A u g u st and Septem ber since 1 9 3 5 , are com ing somewhat earlier this y e a r and there has been a sharp reduction in automobile assemblies, in anticipation of changeovers to new models. I t is reported that one independent m anu factu rer began to assemble 19 4 0 cars du rin g the latter p a rt of J u l y , although final runs on this y e a r ’s models made up the bulk of the m onth’s production. Steel m ill operations, on the other hand, increased steadily after Independence D a y shutdowns, and reached about 60 per cent of cap acity by the final week in J u l y , the highest rate since the peak of 62 or 63 per cent late last year. A s the accom panying diagram indicates, operations at the end of J u l y were at the highest rate, w ith the exception of that tem porary peak, since October, 19 3 7 . A cco rd in g to PER C E N T G o ld M o v e m e n t Gold im ports of all classes at N ew Y o rk totaled $ 2 5 7 ,200,000 du ring J u l y , of w hich $18 1,8 0 0 ,0 0 0 came from E n g lan d , $45,500,00 0 from H olland, $14 ,20 0 ,0 0 0 from Canada, $5,600,000 from Sw itzerland, $3,30 0,00 0 from Mexico, $2,400,000 from China, $2,10 0,00 0 from Colombia, $1,600,00 0 from India, $500,000 from Chile, and $200,000 from E cu ad o r. On the W e st Coast, $11,0 0 0 ,0 0 0 w as re ceived from Ja p a n , $3,800,000 from A u stra lia, $800,000 from China, and $300,000 from India. The amount of gold held under earm ark fo r foreign account at the F e d e ral Reserve B an ks increased about $170,000 ,000 du rin g J u l y , as com pared w ith an increase of $105,00 0,000 in Ju n e , and on J u l y 3 1 foreign hold ings of earm arked gold here amounted to approxim ately $1,300,000,000. The net gain of gold to the U nited States in reported international transactions, including receipts as percentages of capacity) 6 1 FEDERAL RESERVE BANK OF NEW YORK trade reports, automobile companies are not yet taking steel fo r new models in a substantial w a y , bu t steel has been in active demand fo r construction projects and mis cellaneous steel consuming lines. Cotton textile m ills operated at a relatively high rate fo r J u l y , and bitum in ous coal m ining rose further. M erchandise and miscel laneous freigh t car loadings were sligh tly lower than the Ju n e rate in the first three weeks of J u l y , while ship ments of bulk commodities advanced seasonally. D e p a rt ment store sales in this D istrict fo r the first three weeks of J u l y appear to have shown about the usual seasonal decline from the Ju n e level. A f t e r taking seasonal factors into account, industrial production rose considerably between M a y and Ju n e , and ra ilw a y freigh t traffic also increased, while retail trade w as m aintained near the M a y level. T w o developments du ring M a y— heavy orders received du rin g a period of price reductions and the resum ption of bituminous coal m ining— appear to have stim ulated steel m ill operations, and ingot production increased between M a y and Ju n e, instead of declining as in most past years. P ig iron out p u t also expanded, copper production increased moder ately, and automobile assemblies, responding to a w ell m aintained volume of retail sales, were somewhat greater than in M ay, con trary to the usual experience. Cotton mill a ctivity was reduced less than in m any other years, and wool m ills increased their operations. Declines were shown in meat packing and in lead production. D u rin g Ju n e departm ent store sales throughout the U nited States showed approxim ately the usual seasonal decline from the M a y level, but in this D istrict sales were higher than in M a y whereas usu ally little change occurs. Sales of chain grocery stores fo r the country as a whole were about unchanged from M a y to Ju n e , and sales of other chain stores showed about the custom ary seasonal advance, while mail order house sales were somewhat lower than in M a y as in m any recent years. O wing m ainly to resum ption of bituminous coal shipments, total freigh t car loadings rose considerably during Ju n e . Reflecting recovery of w orld trade, large scale n aval construction, and, most recently, inception of the M a ri time Com m ission’s ten y e a r program to rebuild and en large the U nited S ta te s’ m erchant marine, A m erican shipbuilding has displayed a m arked expansion. The accom panying diagram shows an index of m an-hours of employment in p rivate shipyards, adjusted fo r seasonal variation, since 19 2 3 . D u rin g 1 9 2 3 and the first p a rt of 19 2 4 , a ctivity in A m erican sh ipyards as m easured by m an-hours of em ployment continued a decline from the intensive a ctivity of the W a r and early p o st-W ar years, th ereafter showing a tendency to level out. There were two subsequent spurts in activity, in 19 2 6 -2 7 and in 19 29 -30 , separated b y a recession in 19 2 8 , but beginning in 19 3 0 as in most other lines of enterprise a sharp decline set in. In late 1 9 3 2 and early 1 9 3 3 p rivate shipyards were offering only about one-third as much employment as in the early p a rt of 19 30 . F o llo w in g a slow recovery fo r two years, a ctivity was sh arp ly accelerated in 19 3 6 and an even higher level of a ctivity w as m aintained d u r ing 19 3 7 . There w as a relapse last year, but operations have again turned upw ard, and at the present time manhours of employment are approaching the highest levels of 1 9 2 3 , 19 2 6 -2 7 , and 19 2 9 -3 0 . The man-hour figures Man-hours of Employment in Shipbuilding (1 9 23 -2 9 average = 100 per cent; based on data of the United States Bureau of Labor Statistics and National Industrial Conference Board) presum ably understate the recovery in term s of physical production, owing to technological im provements which increase output per m an -h ou r; total tonnage under con struction or contract in p rivate yards, which includes about h a lf of current naval construction, is estimated at around 1,000,000 tons, the largest volume on record, except fo r the W o rld W a r and early p o st-W ar periods. (Adjusted for seasonal variations, for estimated long term trend, and where necessary for price changes) 1938 1939 June April May 37r 50 32 46 62 81 r 54 74 74 89 78 59 72 52 8 6 61 72 62 72 34 89 91 60 97 85 99 83 89 83 62 92 73 June Industrial Production Passenger cars............................................... Motor trucks................................................. Bituminous coal............................................ Crude petroleum........................................... Electric power............................................... Cotton consumption.................................... Wool consumption........................................ Meat packing................................................. Tobacco products......................................... 8 6 6 8 50 89 91p 57 94 98 99 71 7op 57 74 79p 8p 6 94p 92 ’ 97* 113p 104p 84 91 91 73 93p 75 p 8 8 Employment Employment, manufacturing, U. S.......... Employee hours, manufacturing, U. S ... . Construction Residential building contracts................... Nonresidential building and engineering contracts..................................................... 31 37 45 41 45 71 52 49 69 63 85 64 76 60 81 77 77 77 78 80 77r 85 79 114 99 Primary Distribution Car loadings, merchandise and misc......... Car loadings, other....................................... Imports........................................................... 6 6 8 8 91 77 74 84 78 118 93 105r 84p 80p 119p 94 p p Distribution to consumer Department store sales, U. S ................... Department store sales, nd District. . . . Chain grocery sales...................................... Other chain store sales................................ Mail order house sales................................. New passenger car registrations............... 2 100 8 8 87r 40 102 6 8 6 6 102 6 8 Velocity of Deposits* Velocity of demand deposits, outside New York City (1919-25 average = ) ... Velocity of demand deposits, New York City (1919-25 average = ) ............... 100 100 Prices and Wages* 100 General price level (1913 average = ) Cost of living (1913 average = ) Wage rates (1926 average — ) ............ 100 100 V Preliminary. r Revised. 60 59 60 59 42 31 32 34 152 149 152 146 152p 146 lllp 153p 146 111 111 * Not adjusted for trend. MONTHLY REVIEW, AUGUST 1,1939 62 B u ild in g D u rin g Ju n e the average d aily rate of construction contract aw ards in the 37 States included in the F . W . Dodge Corporation su rvey w as 3 per cent below the M a y average. There were substantial decreases in contracts fo r residential building and h eavy engineering projects, which, however, w ere n early offset b y increases in other types of construction, including especially aw ards in the D istrict of Colum bia fo r two U nited States Governm ent buildings and one large office building. Com pared w ith Ju n e a y e a r ago, total contracts showed an increase of 19 p er cent, most of the leading construction categories contributing in some measure to the advance. F o r the first h a lf of 19 3 9 , aggregate aw ards registered a 3 1 per cent gain over the corresponding period in 19 3 8 , owing p rin cip a lly to a 6 1 per cent increase in residential build ing, although gains of sm aller proportions occurred in all the other m ajor types of construction. The value of construction contracts aw arded in the 3 7 States du rin g the first six months of 19 3 9 totaled about $1,700,000,000, corresponding to a m onthly rate more than twice that of 19 3 4 , although equal to only about h alf the m onthly average in the five predepression years, 19 2 5 -2 9 . The accom panying diagram illustrates the v a r y ing composition of construction contracts in 19 2 5 -2 9 , and from 1 9 3 4 to date. Residential building dropped to only about one-sixth of the total in 19 3 4 , but subsequently has grad u a lly returned to near the 19 2 5 -2 9 proportion, ap proxim ately 40 per cent. P u blic works, on the other hand, which represented only 1 4 per cent of all construc tion in 19 2 5 -2 9 , was increased to 40 per cent in the period of low p rivate a ctivity in 19 3 4 , but comprised less than one-fourth of all construction in the first six months of this year. H ow ever, from the standpoint of actual con struction rather than the placement of contracts, public works no doubt constituted a larger percentage of con struction a ctiv ity in the first h a lf of 19 3 9 than is indi cated in the diagram , owing to the heavy volume of P ublic W ork s A dm inistration contracts let in December of last year. Com m ercial and industrial building aw ards remain relatively low com pared w ith other types of con struction, and in the first six months of 19 3 9 averaged about 1 2 per cent of all construction, which was sligh tly P U B L IG W O R K S over h alf the 19 2 5 -2 9 proportion. Contracts fo r public utilities and public purpose building com prised fa ir ly constant percentages of the total throughout the period, although the actual volume has been substantially less than in the 2 0 ’s. The h eavy lines draw n through the columns of the diagram ro u gh ly indicate the division between public and p rivate construction. P riv a te construction, includ ing residential, commercial, and industrial building, as well as public u tility projects, represented 70 p er cent of all construction in the 19 2 5 -2 9 period, but its share of the total w as reduced to sligh tly over 40 p er cent in 19 3 4 . The proportion of p rivate construction recovered grad u a lly in the succeeding three years and follow ing a setback in 19 3 8 has risen again this year, though at no time has it reached the average proportion of 19 2 5 -2 9 . The d aily rate of construction contract aw ards in the N ew Y o rk and N orthern N ew Je r s e y area du ring Ju n e w as 29 per cent lower than in M ay, a considerably larger reduction than fo r the country as a whole. The u n fa v o r able comparison w ith the previous month in this area resulted chiefly from a decline of 4 5 per cent in residen tial building, p a rtly due to the inclusion in the M a y figures of aw ards fo r several large scale housing projects, fo r which there was no counterpart in Ju n e . On the other hand, an increase of 56 per cent over M a y w as registered in commercial and industrial building, the p rin cip al ex planation fo r w hich w as the p lacin g of a contract in Ju n e fo r a large office building in N ew Y o rk C ity. Com pared w ith Ju n e , 19 3 8 , total aw ards in the N ew Y o rk and N orthern N ew Je r s e y area showed a 10 per cent decline; residential building aw ards fell sligh tly below the corresponding month of 19 3 8 fo r the first time this year. H ow ever, fo r the first six months of this ye a r a 68 per cent increase in residential building over the corresponding period of 19 3 8 was the largest contribut ing facto r to a 1 4 per cent gain in total construction con tracts in this period. D u rin g the first three weeks of J u l y , construction con tracts in the 3 7 States were aw arded at an average rate 5 per cent above the Ju n e level, a substantial increase in h eavy engineering aw ards more than offsetting de creases in residential and nonresidential building con tracts. Com pared w ith the first three weeks of J u l y , 19 3 8 , however, all the m ajor construction classifications showed gains, the largest of w hich w as 63 per cent fo r non residential b u ild in g ; all typ es of construction combined increased 4 3 per cent over a y e a r ago. E m p lo y m e n t a n d P a y r o lls P U B L IC P U R P O S E P U B L IC U T IL IT IE S C O M M E R C IA L & IN D U S T R IA L R E S ID E N T IA L 1925-29 1934 AV. 1935 1936 1937 1936 1939 6 M OS. Percentage Distribution of Principal Types of Construction Contracts in 37 States (Based on F. W . Dodge Corporation data) Em ploym ent in nonagricultural occupations through out the country was reported b y the Se cre ta ry of L ab o r to have increased b y approxim ately 400,000 persons in Ju n e , with p ra ctica lly all the m ajor in d u stry classifica tions sharing in the advance. The settlement of the labor controversy in the bituminous coal in d u stry w as responsi ble fo r the reem ploym ent of about 16 2,0 0 0 workers, but even w ith this facto r eliminated the rem aining gain is reported as one of the largest increases in employment fo r the month of Ju n e in the past ten years. Significant gains were reported in w orking forces in m an ufactu rin g and trade, on railw ays, and at public u tility plants. A ltogether it is estimated that there were over 1,200,000 more nonagricu ltural workers employed this Ju n e than FEDERAL RESERVE BANK OF NEW YORK in the same month a y e a r ago, hut employment remained considerably below the level of Ju n e , 19 3 7 . The increase in fa cto ry em ploym ent amounted to less than 1 per cent, but facto ry p ayrolls rose about 2 per cent, and both employment and payrolls ordinarily show slight seasonal declines at this time of the year. B o th durable and nondurable goods industries participated in the ad vance in working forces. E sp e cially pronounced increases took place in the food, building m aterials, woolen, and a ircra ft industries. Gains of 1 1 per cent in employment and of about 22 per cent in payrolls over Ju n e , 19 3 8 were indicated. B oth employment and p ayro lls in N ew Y o r k State factories increased sligh tly between the middle of M a y and the middle of Ju n e , whereas small declines usu ally occur at this time of year. N ine of the eleven p rin cip al industrial groups reported increased w orking forces for Ju n e. A pronounced gain w as registered b y the food group, owing large ly to seasonal expansion in the can ning and p reserving industry, and a sizable rise w as also shown in the fu r, leather, and rubber goods industries. The number of workers engaged in N ew Y o rk C ity cloth ing and m illinery shops declined fu rth er as a result of seasonal factors, but increased em ploym ent w as reported by m en’s clothing factories up -State. A s com pared w ith Ju n e , 19 3 8 , em ployment w as 1 3 per cent higher and p a y rolls rose 19 per cent. C o m m o d ity P r ic e s J u l y was m arked b y fu rth e r sharp declines in grain prices and b y relative steadiness or rising tendencies in quotations fo r m any im portant industrial ra w m aterials. Estim ates of large w orld crops and prospects of sizable carryovers were the dominant factors in the fa ll in grain prices. In the protected domestic m arket the quotation at Minneapolis fo r cash wheat reached the lowest level since October, 1 9 3 3 and meanwhile in the free m arket of Liverpool wheat prices were reported to have reached the lowest point in modern times. Fo llo w in g a decline of 1 1 cents in the domestic price to 6 8 % cents a bushel through J u l y 24, there w as some recovery tow ard the end of the month. Cash corn touched 3 9 % cents a bushel, also the lowest price since the fa ll of 1 9 3 3 , com pared with 4 8 % cents at the end of Ju n e , though the net loss was reduced b y a recovery in the last week of the month. A d d itional factors in this recession were competition from A rgen tin e supplies and fear that the U nited States Governm ent m ight release some of the cereal from the loan stock. I n sym p ath y w ith corn, average hog prices declined to as low as $6 .5 8 a hundredweight, off 39 cents from the end of Ju n e . A d van ces in certain industrial ra w m aterials were as sociated w ith im proved demand and sm all available sup plies, and also w ith special factors affecting p articu lar commodities. The quotation fo r hides increased 1 % cents to 1 2 % cents a pound, p a rtly under stim ulus of a threatened p ack ers’ strike. R a w silk in N ew Y o rk rose 29 cents du ring the month to $ 2 .8 0 % a pound on J u l y 26, a new high since 1 9 3 1 , reflecting the lowest stocks in N ew Y o rk in nearly eighteen years. Sp o t cotton in N ew Y o rk increased *4 cent and on J u l y 1 0 reached 10 .0 2 cents a pound, the highest since A u g u st, 1 9 3 7 , in response to the Governm ent estimate of the second smallest acreage fo r harvest since 18 9 9 . The price later relapsed to 9.34 6 3 cents, but strengthened follow ing the announcement of an export subsidy of 1 % cents a pound, effective J u l y 27, and cotton quotations closed J u l y near their levels at the end of Ju n e . Dom estic wool and crude rubber prices were firm in J u l y , the latter despite an in crease in permissible exports from 5 5 to 60 per cent of basic quotas. A m o n g metal quotations gains predominated. Scra p steel at P ittsb u rgh w as quoted 50 cents higher, at $ 1 5 .7 5 a ton. F o llo w in g large foreign purchases of copper and reports of increased domestic consumption, the price was lifted % cent to 1 0 % cents a pound. The quotation for zinc at E a s t S t. Lo uis w as advanced 10 points to 4.60 cents a pound. F o re ig n T r a d e M erchandise exports from the U nited States in Ju n e were valued at $236,000,000, and im ports at $179 ,0 0 0 ,000. Im ports were 2 3 per cent above the Ju n e , 19 3 8 level, and exports showed a slight increase, the first year-toy e a r gain in the latter since A p ril, 19 3 8 . B oth exports and imports, however, were somewhat sm aller during Ju n e than in the previous month. The export balance w as $57,000,000, com pared w ith $87,000,000 in Ju n e of last year. E x p o rts of the m ajo rity of crude m aterials and crude foodstuffs, including especially grain, crude petroleum, and unm anufactured cotton, continued to be well below the levels of a y e a r ago, while increases were again shown in exports of a large number of m anufactured and sem im anufactured products, notably aircra ft, automobiles, iron and steel products, and m anufactures of rubber and textiles. A m o n g the im ports, all of the m ajor economic groups registered increases over Ju n e , 19 3 8 , ran gin g from 4 per cent fo r m anufactured foodstuffs to 44 per cent fo r crude m aterials. W ith the exception of certain food products, including such items as bananas and vegetable oils, most of the leading ind i vidual im ports were larger in quantities and values than a y e a r ago. Im ports of ra w silk and burlap, while smaller in volume, showed increases in value over Ju n e , 19 3 8 , due to increases in the prices of these commodities. D u rin g the first h a lf of 19 3 9 , exports totaled $ 1 ,4 1 5 ,000,000, an amount 1 1 per cent sm aller than fo r the com parable period of last year. Im ports, on the other hand, aggregatin g $1,095,000,000, showed an increase of 1 4 per cent over the first h a lf of 19 3 8 . Th is co u n try ’s export balance thus w as reduced to $320,000,000 fo r the first six months of this year, or only about h a lf the amount in the corresponding period in 19 3 8 . The follow ing table, showing the balance of m er chandise trade b y broad commodity classifications, analyzes this reduction in the export balance. W ith re spect to agricu ltu ral products, exports declined 3 5 per cent in value, while im ports increased 9 per cent over the first h alf of 19 3 8 , thus expanding the dollar excess of im ports of these commodities from $64,000,000 to $252,000,000, as the table shows. The leading factors in this substantial change were large decreases in exports of grain and cotton, and moderate to v e ry large increases in im ports of wool, hides and skins, rubber, foreign tobacco, and ra w silk. A m ong nonagricultural commodities, exports during the first six months of this y e a r were 3 p er cent lower than in the same period of last y e a r while im ports were MONTHLY REVIEW, AUGUST 1,1939 64 PEA CENT 1 8 per cent higher. The excess of exports of this type was reduced in dollar value from $691,000,000 to $ 5 7 7 ,000,000. A change from an export to an im port balance in crude m aterials of nonagricultural origin w as largely due to substantial decreases in exports of crude petro leum and coal, combined w ith an increase in im ports of undressed fu rs. The export balance in both w holly and p a rtly finished m anufactures w as m aterially sm aller than last year, p rin cip a lly because of increases in im ports rather than much change in the exports. N o n agricu l tu ral products showing large gains in im ports included cut diamonds, new sprint, tin, and nickel. (In thousands of dollars; + indicates excess of exports,* — indicates excess of imports**) Agricultural products Nonagricultural products Jan.-June, 1938 Crude materials]............... Crude foodstuffs.............. Manufactured foodstuffs. Semimanufactures........... Finished manufactures. . All groups................. Jan.-June, 1939 Jan.-June, 1938 Jan.-June, 1939 — 17,460 +28,473 — 52,522 — 23,640 + 1,378 — 124,906 — 78,020 — 29,509 — 20,109 + 1,022 + 22,440 — 5,979 — 22,473 +101,660 +595,807 — 14,520 — 5,535 — 22,018 + 47,422 +571,515 — 63,771 — 251,522 +691,455 +576,864 * Domestic exports only. ** Imports for consumption only. D e p a rtm e n t Sto re T ra d e A b o u t the usual seasonal decline d u rin g J u l y in departm ent store sales in this D istrict is indicated by figures fo r the three weeks ended J u l y 22. D u rin g this three week period, sales were about 4 % per cent higher than in the corresponding period of 19 3 8 . In Ju n e total sales of the reporting departm ent stores in this D istrict were about 3 per cent higher than last year, a sm aller advance than in M ay, and apparel store sales were also about 3 per cent higher than in Ju n e , 19 3 8 . These comparisons, however, are influenced by the fa c t that retail sales last y e a r were considerably better in Ju n e than in M ay. A t least p a rtly fo r this reason, departm ent stores in a m ajo rity of the localities recorded sm aller increases in sales du ring Ju n e this yea r than in the previous month. F o r the D istrict as a whole, the d aily rate of sales advanced from M a y to Ju n e , whereas usu ally there is not m uch change between these two months. The total volume of sales of the reporting departm ent stores in this D istrict fo r the first h a lf of 19 3 9 was approxim ately the same as in the corresponding period of last year, compared w ith a decrease of almost 8 per cent between the first h a lf of 1 9 3 7 and 19 3 8 . R atios of m erchandise stocks to sales, seasonally ad justed, fo r departm ent stores in the Second F ed eral Reserve D istrict are shown in the accom panying diagram from 1 9 3 3 to date. Irregu larities in the ratios have been reduced b y the use of a three months ’ m oving average. F ro m an un usually low point early in 1 9 3 3 stocks were built up ra p id ly in relationship to sales, under the im petus of the sharp price increases which took place at the time the N .R .A . w as established. F ro m its peak in the latter p a rt of 1 9 3 3 the ratio worked irre g u la rly lower fo r three years, ow ing p a rtly to a m oderate reduction in stocks, but more large ly to a grad u al rise in sales. L a te in 19 3 6 a second accum ulation of stocks began, again under the inducem ent of rising data, 1 9 2 3 -2 5 = 1 0 0 per cen t) prices, as in 1 9 3 3 . The ratio ceased to advance^in the sp rin g of 1 9 3 7 and then began a slow and irregu lar decline, stocks tending to decrease more ra p id ly than sales. The sharp rise in the ratio in the early months of 19 3 8 w as accounted fo r largely by a fa ir ly rap id decline in sales, although stocks showed a small and tem porary increase at that time. D u rin g the rem ainder of 19 3 8 the decline in the stock-sales ratio was resumed, but in 19 3 9 stocks and sales have m oved ro u gh ly together, and the decline in the ratio appears to have been checked. The present position of the ratio, while not as low as in the sp rin g of 1 9 3 3 or the autum n of 19 36 , indicates that stocks of merchandise in departm ent stores are now quite low relative to the current volume of sales. Percentage change from a year ago Net sales Locality June New York and Brooklyn.............. 2.1 Jan. to June 1.6 1.4 1.8 5 .7 2.0 4 .8 2.8 Northern New York State....... Southern New York State........ Central New York State........... Hudson River Valley District.. Westchester and Stamford. . . . Niagara Falls............................... + + 4 .9 + 3 .8 + + 2.9 + 9 .0 + 7 .4 — 3 .5 + 3 .0 + 4.1 + 9 .6 + 1 1 .3 + — + + + + + + — + + + + — All department stores............ + 2 .9 — 0 .4 Apparel stores......................... + Northern New Jersey.................... 12.1 10.6 2.8 — Stock on hand end of month Per cent of accounts outstanding May 31 collected in June 1938 1939 4.1 49.8 42.7 53.1 40.1 43.6 38.8 32.9 48.8 44.5 57.3 40.4 41.4 39.1 36.0 2.2 46.4 46.0 + 2 .7 42.1 44.0 — — — — — + + 3 .0 1.7 1.0 1.9 1.9 8.2 8 .3 3 .9 2.1 3.9 3 .8 0 .4 2.1 — Department Store Sales and Stocks, Second Federal Reserve District (1923-25 average = 100) 1938 1939 June Sales, unadjusted.............................................. Sales, seasonally adjusted............................... Stocks, unadjusted............................................ Stocks, seasonally adjusted............................ r= Rv d e ise . April May June 84r r 88 8 6 85 89 8 8 87 90 75 79 78 77 78 76 73 77 FED ERAL RESERVE BANK OF NEW YORK MONTHLY REVIEW , AUGUST 1,1939 Business C on ditions in the U n ited States (S u m m a rized b y the B o a r d o f G ov ern ors o f the F e d e r a l R eserve S y stem ) U T P U T o f fa c t o r ie s and m ines in crea sed in J u n e reflectin g ch iefly sharp ex p a n sion a t steel m ills an d bitu m in ou s c o a l m ines. I n the first h a lf o f J u ly in d u s tria l a c t iv it y w as g en e ra lly m ain tain ed . O P ro d u c tio n * Index o f P h ysical V o lu m e o f Industrial Produc tion, A d ju ste d for Seasonal V ariation ( 1 9 2 3 - 2 5 average = 1 0 0 per cen t) T h e B o a r d 's sea son a lly a d ju s te d in d ex o f in d u stria l p ro d u c tio n a d v a n ced to 97 in J u n e as com p a red w ith 92 in A p r il an d M a y . A t steel m ills o u tp u t in crea sed fr o m a ra te o f 45 p e r cen t o f c a p a c ity in the th ir d w eek o f M a y to 54 a t the end o f J u n e an d to 56 in the th ird w eek o f J u ly . A u to m o b ile p ro d u c tio n , w h ich h a d d eclin ed in M a y , sh ow ed som e in crease in J u n e w h en a d eclin e is cu stom a ry . In the first three w eeks o f J u ly a u tom ob ile o u tp u t w as a t a low er rate, refle ctin g in p a r t cu rta ilm en t p re p a r a to r y to the ch a n g eov er to new m odels. P la te g la ss p ro d u c tio n rose co n sid e ra b ly in Ju n e. O u tp u t o f lu m ber, w h ich u su a lly show s som e in crease over M a y , w as un ch an ged . A m o n g n on d u ra b le g o o d s in d u stries w oolen m ills sh ow ed in crea sed a c tiv ity in Ju n e, an d a c tiv ity a t c o tto n an d silk m ills w as m a in ta in ed th ou g h d eclin es are u sual a t th is season. M ea t p a c k in g w as low er th a n in M a y . M in era l p r o d u c tio n in crea sed c o n sid e r a b ly in J u n e r e fle c tin g a sh arp rise in o u tp u t a t b itu m in ou s c o a l m ines w h ich had been closed d u r in g A p r il an d the first h a lf o f M a y . P r o d u c tio n o f a n th ra cite d eclin ed fr o m M a y to Ju n e an d th ere w as som e r e d u ctio n in o u tp u t o f p etroleu m . V a lu e o f con stru ctio n co n tra cts aw a rd ed d eclin ed in Ju n e, a c c o rd in g to F . W . D o d g e C o rp ora tion figures, re fle c tin g ch iefly a g rea ter th an seasonal d ecrease in p riv a te resid en tia l b u ild in g . C on tracts aw a rd ed f o r p u b lic re si d en tia l c o n stru ction , p r in c ip a lly f o r U n ited S tates H o u s in g A u th o r ity p r o je c ts , w ere m a in ta in ed a t the a d v an ced lev el reach ed in M a y , w h ile p u b lic c o n stru c tio n oth er th an resid en tia l sh ow ed a sm all d eclin e. E Index o f N um ber of F a ctory W o r k e rs Em p loyed, A d ju ste d for Seasonal Variation ( 1 9 2 3 -2 5 average = 1 0 0 per cen t) mploym ent F a c to r y em p loy m en t an d p a y ro lls in crea sed som ew hat fr o m th e m id d le o f M a y t o the m id d le o f J u n e a c c o r d in g to re p o rts fr o m a n u m b er o f im p o rta n t in d u s tria l S ta tes. T h ere w as a sh arp ex p a n sion in em p loy m en t a t bitu m in ou s c o a l m in es fo llo w in g the r e o p en in g o f the m ines in the m id d le o f M a y , and the nu m ber em p loy ed on the ra ilro a d s in crea sed m ore th an season ally fr o m M a y to Ju n e. D i s t r ib u t io n D ep a rtm en t store sales sh ow ed a less th an season al d eclin e fr o m M a y to Ju n e an d th e B o a r d ’ s a d ju s te d in d e x a d v a n ced fr o m 85 to 86, w h ich com p ares w ith a lev el o f 88 d u r in g the first fo u r m on th s o f the y ear. Sales a t v a r ie ty stores an d b y m a il ord er houses sh ow ed litt le ch an g e. F r e ig h t ca r lo a d in g s in crea sed m ore th a n season ally in Ju n e re fle ctin g a sharp rise in sh ipm ents o f c o a l and sm aller in creases in sh ipm ents o f g r a in an d m iscella n eou s fr e ig h t . C o m m o d i t y P r ic e s P r ic e s o f hides, silk, steel scrap , cop p er, an d som e other in d u stria l m aterials a d v a n ced fr o m the m id d le o f J u n e to the th ird w eek o f J u ly , w h ile som e fa r m p rod u cts, p a r tic u la rly g ra in s, d eclin ed . P r ic e s o f m ost other com m od ities sh ow ed litt le ch an ge. A Index of T o ta l L o adings o f R even ue F reig h t, A d ju sted for Seasonal V ariation ( 1 9 2 3 - 2 5 average = 1 0 0 per cen t) B IO S ILL N O D LLA S F O R g r ic u l t u r e A t o ta l w h eat c ro p o f 716,655,000 bu shels w as in d ic a te d on the ba sis o f J u ly 1 c o n d ition s, a c c o r d in g to the D ep a rtm en t o f A g ric u ltu r e . T h is w ou ld be m uch sm aller than la st y e a r ’ s la r g e c ro p and som ew hat b elow the 1928-1937 av erag e. C otton a crea g e in c u ltiv a tio n w as estim a ted to be a b ou t the sam e as la st y e a r b u t on e-th ird less than the 10 y e a r av erag e. A record to b a c c o cro p is in d ica te d . M o st other m a jo r crop s are e x p ected to a p p rox im a te la st y e a r ’ s h arvests an d a re g en e ra lly la r g e r th an a v era g e. B a n k Cr e d it T o ta l loa n s an d investm ents o f m em ber banks in 101 le a d in g citie s c o n tin u ed t o in crea se d u r in g th e fo u r w eeks en d ed J u ly 12, r e fle c tin g la r g e ly pu rch ases o f U n ited S ta tes G overn m en t secu rities. C om m ercia l loan s, w h ich ha d show n little ch an g e in recen t m onths, in crea sed slig h tly . D e p osits and reserves a t these b a n k s rose to new h ig h levels in J u ly , refle ctin g con tin u ed g o ld im p o rts an d T rea su ry disbu rsem en ts fr o m its ba lan ces at the R eserve B an ks. M Wednesday Figures for Reporting Member Banks in 101 Leading Cities (Latest figures are for July 12) oney R ates P r ic e s o f U n ited S ta tes G ov ern m en t secu rities, w h ich h a d d eclin ed som e w h at d u r in g J u n e, r ecov ered p a r t o f the loss in J u ly . T he lo n g e st term T rea su ry b on d o u tsta n d in g sh ow ed a y ie ld o f 2.31 p er ce n t on J u ly 20, as com p a red w ith a record, low o f 2.26 on J u n e 5. O p en m arket m on ey rates sh ow ed litt le ch an g e.
@FedFRASER