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MONTHLY REVIEW of Credit and Business Conditions Second F ed era l R eserv e B a n k , N ew M o n e y M a rk e t in F e d e ra l R e s e rv e D is tric t Y ork D ecem ber 1 c o n s id e r a b le N o v e m b e r in c r e a s e in th e , 1936 am ount of c r e d it ex ten d ed b y s u c h c o m p a n ie s , p r i m a r il y t o fin a n c e s a le s o f a u t o m o T h e p r in c ip a l ch a n g e in m oney ra tes d u r in g th e past b ile s , b u t a ls o t o fin a n c e s a le s o f v a r io u s o t h e r t h in g s s u c h m o n th h a s b e e n a fu r th e r d e c lin e in y ie ld s o n lo n g te r m as h e a tin g a n d v e n tila tin g s e c u r itie s , a p p a r e n t ly r e fle c t in g r e n e w e d p r e s s u r e o f id le e r a to r s , a n d o t h e r h o u s e h o ld a p p lia n c e s . fu n d s t o fin d e m p lo y m e n t . m en ts o f a fte r flu c tu a tin g c lin e d to h ig h new grade ir r e g u la r ly s in c e e a r ly le v e ls f o r m any years, an d lo w c o r p o r a tio n s im ila r m o v e m e n ts . d e c lin e d to 2 .1 2 Y ie ld s o n G o v e rn m e n t b o n d s, and S ep tem b er, d e m u n ic ip a l y ie ld s bonds on show ed T h e a v e ra g e y ie ld o n T re a s u ry b o n d s per ce n t, as co m p a re d w ith about 2 .6 0 p e r c e n t a y e a r a g o , n e a r ly 3 p e r c e n t tw o y e a r s a g o , a n d a h i g h p o i n t o f n e a r l y 4 .5 0 p e r c e n t e a r l y i n 1 9 3 2 . A ver th a t on 15 o f th e June 30, a p p a r a tu s , m e c h a n ic a l r e f r ig p r in c ip a l fin a n c e 1936 th e P u b lis h e d sta te c o m p a n ie s a g g reg a te am ount in d ic a te of c r e d it e x t e n d e d b y s u c h c o m p a n ie s w a s a b o u t $ 1 ,2 0 0 ,0 0 0 ,0 0 0 , a n a m o u n t g r e a t e r t h a n in 1 9 2 9 a n d t h r e e o r f o u r tim e s th e v o lu m e in 1 93 2 . ness is W h ile a s u b s t a n t ia l a m o u n t o f th is b u s i fin a n c e d fin a n c e th rou g h co m p a n ie s , o b ta in e d th rou g h th e n e a r ly bank use of tw o -th ir d s lo a n s th e c a p ita l of th e or th rou g h th e of th e fu n d s a re s a le o f th e a g e y ie ld s o n A a a c o r p o r a t io n b o n d s , w h ic h a re c o m p u t e d n o te s o f th e fin a n c e c o m p a n ie s to b a n k s a n d o t h e r in v e s fr o m to r s a n d in v e s t in g in s titu tio n s . is s u e s of lo n g e r a verage m a t u r it y th a n T reasu ry b o n d s , d e c l i n e d t o a b o u t 3 .1 5 p e r c e n t , a s c o m p a r e d w i t h a b o u t 3 .5 0 p e r cen t a y ea r a g o , 3 .8 5 per cen t tw o y ea rs a g o , a n d a h i g h p o i n t o f a b o u t 5 .3 0 p e r c e n t f iv e y e a r s a g o . R ep orts in d ic a t e d fr o m th a t N ovem ber w as fr o m sou rces m ent s e c u r ity d e c lin e d le v e ls m em ber th e due c h ie fly o th er th a n h o ld in g s s lig h t ly s in c e th e banks stre n g th in to th e th e p art p r in c ip a l fo r m em ber of and in in v e s tm e n ts G overn b a n k s, in reach ed June. citie s m a rk ets ban k s. r e p o r tin g N ovem ber e a r ly th e s e c u r ity dem ands th ese of in of th e H o ld in g s fa ct, lo w e s t of oth er O n J u n e 30, 1 9 3 6 th e 15 c o m p a n ie s r e fe r r e d t o a b o v e s h o w e d n o te s a n d lo a n s p a y a b le a m o u n tin g c o r r e s p o n d in g in d ic a tin g an to $ 8 0 0 ,0 0 0 ,0 0 0 . fig u r e w as in c r e a s e A year p r e v io u s som ew h at over $ 5 0 0 ,0 0 0 ,0 0 0 , o f m ore th a n W h ile have no in c r e a s e d h o ld in g s d ou b t a ccou n ted fo r of fin a n c e in c r e a s e in su ch h o ld in g s w as p r o b a b ly e le m e n t in th e in c r e a s e in lo a n s . N e w Y o r k C it y . m u n ic ip a l b o r r o w in g s . d e c lin e in banks d u r in g th e in d ic a te d in v e s tm e n ts p ast of m on th th e w as r e p o r tin g p a r t ly m em ber o ffs e t f u r t h e r r is e in lo a n s o t h e r th a n lo a n s o n s e c u r itie s . by a L oans com p an y paper th e lo a n s o f th e r e p o r t in g m e m b e r b a n k s , it a p p e a r s t h a t th e th is p o in t h a s b e e n o b ta in e d fr o m The ce n t w ith in p a r t o f th e in c r e a s e in a p p e a rs to h a v e b e e n th e re p a y m e n t o f te m p o r a r y and per th e p a st y e a r. s e c u r it ie s a ls o s h o w e d s o m e r e d u c t io n , o n e f a c t o r in w h ic h S ta te 50 th e not th e m a jo r S o m e d ir e c t e v id e n c e o n th e r e p o r t in g b a n k s in T h e in fo r m a t io n s u p p lie d b y th e s e b a n k s th a t th e ir h o ld in g s o f fin a n c e com pan y paper w e r e n o t la r g e a n d h a d s h o w n o n ly a s lig h t in c r e a s e th is MILLIONS OF DOLLARS MILLIONS OF DOLLARS 16001 3 20 0 r in t h is c a t e g o r y , a m a j o r e le m e n t o f w h ic h is c o m m e r c ia l b o r r o w in g , bank rea ch ed h o lid a y covery got in w e ll th e 1933. h ig h e s t F or under w ay, th e lo a n s in th e b a n k s c o n t in u e d to th e r e p a y m e n t o r w r it in g th e p ast year th ere has le v e l s in c e s o m e t im e b e fo r e th e. a f t e r b u s in e s s v o lu m e of re c o m m e r c ia l to d e c lin e , p r e s u m a b ly 1400 due a m arked u p tu rn , as Jr 1936/ th e T h e m a r g in o v e r a y e a r 1200 in N ew Y ork C it y and 2 40 0 / a g o in th e v o lu m e o f c o m m e r c ia l lo a n s h a s g r o w n s te a d ily re ce n t m on th s, b o th 2800 o ff o f o ld lo a n s , b u t d u r in g been a c c o m p a n y in g d ia g r a m in d ic a te s . w id e r in r J1936 in 1 935 V V V o t h e r r e p o r t in g b a n k s . O n N o v e m b e r 1 8 th e in c r e a s e o v e r a y e a r p r e v io u s i n N e w Y o r k C it y a m o u n t e d t o $ 2 8 1 ,0 0 0 ,- 1000 >r 200 0 0 0 0 , o r a b o u t 2 4 p e r c e n t, a n d th e in c r e a s e f o r a ll b a n k s in 100 oth er p r in c ip a l c itie s a m ou n ted to $ 4 0 2 ,0 0 0 ,0 0 0 , a n in c r e a s e o f 18 p e r ce n t. One e x p la n a t io n th a t has been a d van ced fo r th e ex p a n s i o n i n s u c h lo a n s is in c r e a s e d b a n k h o l d i n g s o f f in a n c e com pan y pap er, as it is know n th a t th e re has been a 800 N E W Y O R K C IT Y J F M A M J J A S O N D OTHER! 1600 L E A D I N G C I T I E S J F M A M J J A S O N D Loans of Reporting Member Banks in New York City and Other Leading Cities, Other than Loans on Securities, Real Estate Loans, Loans to Banks, and Paper Purchased in the Open Market MONTHLY REVIEW, DECEMBER 1, 1936 90 year. M u c h m o r e im p o r t a n t e le m e n ts in th e M in c r e a s e in th e lo a n s o f th e s e b a n k s w e r e c o m m o d it y lo a n s a n d e x t e n A s id e f r o m s io n s o f c r e d it t o a v a r ie t y o f c o m m e r c ia l a n d in d u s t r ia l s e c u r itie s p r e v io u s ly b u s in e s s e s . y ie ld s s e c u r itie s proceed s or In som e ca ses th e banks rep orted o f lo a n s w e r e u s e d t o r e t ir e p r e fe r r e d s to ck s, b u t th e re have th a t th e o u ts ta n d in g b o n d s a ls o been ca s e s th is on T reasu ry ch an ged R o n ey ates th e fu r th e r d e c lin e in y ie ld s o n lo n g te r m n otes, m e n t io n e d , of and in t e r m e d ia t e m oney ra tes som e d e c lin e m a t u r it y , r e m a in e d in su ch as g e n e r a lly un d u r in g N o v e m b e r. y e a r in w h ic h th e p r o c e e d s o f n e w s e c u r it y flo ta t io n s w e r e used to w id e ly e d ly rep a y bank lo a n s . d is tr ib u te d , a n d is h e ld by m em ber banks in s titu tio n s in th e reserves in cr e a s e d u r in g t in u e d in flo w xcess of th e com pan y oth er paper v o lu m e th a n is R th e r e p o r tin g eserves m em ber banks p a st m on th , o f g o ld fr o m have due c o n tin u e d p a r t ly to th e to con a b r o a d a n d p a r t ly to G o v e rn m e n t e x p e n d it u r e s o f fu n d s p r e v io u s ly a c c u m u la t e d in th e F ed eral R eserve N ovem ber cen t 18 B anks reach ed in c r e a s e in and in a new th e th e h ig h T reasu ry, le v e l s in c e p e rce n ta g e s of N ov. 29, 1935 Oct. 30, 1936 N ov. 27, 1936 u n d ou b t p r i n c ip a l c itie s . E E xcess F in a n c e a c o n s id e r a b le and th e r e q u ir e d on 50 p er reserves a n n o u n ce d b y th e B o a r d o f G o v e rn o r s o f th e F e d e r a l R e s e rv e S y s te m w a s m a d e e ffe c tiv e o n A u g u s t 1 6. 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 o n th ).............................. Treasury securities: Maturing April (yield)......................... Maturing February 1938 (yield)........ Average yield on Treasury notes (1-5 yea 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 rediscount rate........................................ Federal Reserve Bank of New York buying rate for 90 day indorsed b ills.. of w h ic h $ 7 6 5 ,0 0 0 ,0 0 0 . F ed eral th e N ew Y ork C it y banks 1 * 1 X X ys % * i x X % 1.67 1.67 1.71 N o yield N o yield 0.21 N o yield 0.04 0 .7 3 0.81 0 .62 2 .5 8 2 .32 2.12 0 .1 3 0 .12 0 .0 8 1 H 1V 2 1H Vi Vi H h e ld * Nominal about G S overn m en t e c u r it ie s O n N o v e m b e r 2 1 , fo llo w in g m e e tin g s o f th e A d v is o r y C o u n c il, th e P r e s id e n ts of th e m it t e e , th e C h a ir m a n o f th e B oard of T he F ed e ra l R e se rv e B a n k s, a n d th e F e d e r a l O p e n M a rk e t C o m th e fo llo w in g 1 X T h e to ta l f o r t h e c o u n t r y a s a w h o le w a s a p p r o x i m a t e l y $ 2 ,2 7 0 ,0 0 0 ,000, X *1 G overn ors is s u e d stro n g The Board o f Governors o f the Federal Reserve System met during the week with the Federal Advisory Council and later with the Presidents o f the Federal Eeserve Banks. In addition, there was a meeting o f the Federal Open Market Committee. In the course o f these meetings, the business and credit situation was fully reviewed. Particular attention was given to the fact that since the B oard’s action last July in raising re serve requirements, there has been a continued and substantial increase o f member bank reserves, resulting principally from a further large inflow of gold from abroad, so that member bank reserves are once more far in excess of legal requirements and o f present or prospective needs o f commerce, industry and agriculture. Those charged with responsibility for credit and reserve pol icy are now giving careful consideration to the various prob lems raised by the effects o f these reserves with a view to taking such action at such time as it appears to be necessary in the public interest. d u r in g N ovem ber. t iv e s ta te m e n t: G overn m en t s e c u r ity n e a r ly th e Im m e d ia te ly dem and g u a ra n te e d fo r in te r r u p te d r is e E le c tio n and as N ovem ber a c t iv e th ree s e c u r itie s d e v e lo p e d , fro m w as fir s t fo llo w in g T reasu ry is s u e s m arket e n tir e 4 and a to and w eeks of D ay, an ac G overn m en t r e s u lt of an un N ovem ber 19 th e a v e ra g e p r ic e o f T r e a s u r y b o n d s n o t d u e o r c a lla b le w ith in 5 years a d va n ced 1 % p o in ts to a n e w h ig h le v e l. V ir tu a l ly a ll o f t h e o u t s t a n d in g T r e a s u r y b o n d is s u e s r e a c h e d new h ig h w as r e fle c te d q u o ta tio n s in y ie ld on as in d ic a te d is n otes of a d u r in g drop of T re a su ry b o n d s to 1 to in 5 th e year th is 0 .2 0 p e r io d . per a new d ia g r a m . m a t u r it y T h is ce n t in lo w The of y ie ld lik e w is e a d va n ce th e average 2 .1 2 p e r ce n t, on T reasu ry sh ow ed a la r g e d e c l i n e , r e a c h i n g 0 .6 1 p e r c e n t o n N o v e m b e r 1 9 , a s c o m p a r e d w ith In c u r ity th e 0 .8 1 la tte r p er cen t on p a rt of N o v e m b e r 2. N ovem b er, m a r k e t w a s s u b je c t to m ore th e G overn m en t ir r e g u la r ity th a n se in PER CENT 4 .5 i--------------------------- ------------------ ------------------ --------- --------- --------- --------- --------- B e tw e e n A u gu st 12 reserve b a la n c e s m a te ly $ 1 5 0 ,0 0 0 ,0 0 0 in c r e a s e s in e x p a n s io n in of N ovem ber by th a t and bank m em ber $ 7 3 5 ,0 0 0 ,0 0 0 . th e w as reserves bank A p p r o x i absorbed cau sed by r e m a in d e r w a s T h e p r in c ip a l s o u rce m em ber 18 am ount r e q u ir e m e n ts d e p o s its , excess reserves. crease in c r e a s e d reserve of and 4 . 0 ---------------------------------------------------------------------------------------------------------------- by fu r th e r added to o f th is f u r t h e r in w as th e heavy in flo w o f g o ld d u r in g th is p e r i o d ; th e r e m a in d e r o f th e in c r e a s e w a s d u e la r g e ly t o T r e a s u r y d is b u r s e m e n ts o f f u n d s p r e v io u s ly a c c u m u la t e d in G overn m en t d e p o s its in th e R e serve B an k s. N e a r th e excess end reserves cu rren cy of N ovem ber w as cau sed dem an ds, and fu r t h e r s e a s o n a l in c r e a s e in g flo w D ecem b er. o f cu rren cy u s u a lly show In to in tem p ora ry h o lid a y th ere is banks a c o r r e s p o n d in g ly r a p id a in m o n th -e n d s u b s t a n t ia l r e q u ir e m e n ts d u r h ow ever, occu rs r e d u c tio n and u s u a lly cu rren cy Jan u ary, th e a by a and heavy retu rn b a n k reserves in c r e a s e . o L u ...L i . i - l .. l i 1934 1 i i I i i I i i I i I Jj 1935 i Li i j i.-i i i l i i_l 193 6 Average Yields on United States Treasury Bonds and Notes (Averages computed by Federal Reserve Bank of New York for all Treasury bonds not due or callable within 5 years and all Treasury notes maturing between 1 and 5 years) 91 FEDERAL RESERVE BANK OF NEW YORK th e p r e c e d in g p a r t o f th e m o n th , b u t o n b a la n c e little n e t ch an ge occu rred . n ou n ced th e th a t D u r in g its r e fu n d in g th is D ecem ber of 15 p e r io d th e fin a n c in g $ 4 2 9 ,0 0 0 ,0 0 0 of T rea su ry w o u ld T reasu ry an in c lu d e n otes due F e b r u a r y 1 5 , 1 9 3 7 , i n a d d i t i o n t o $ 3 5 8 ,0 0 0 ,0 0 0 o f T r e a s u r y n o t e s a n d $ 4 0 0 ,0 0 0 ,0 0 0 o f T r e a s u r y b ills d u e D e c e m b er 15. T rea su ry s e c u r itie s a c t u a lly flo a te d d u r in g N ovem ber w e r e c o m p o s e d o f f o u r w e e k l y $ 5 0 ,0 0 0 ,0 0 0 is s u e s o f T r e a s u r y b ills , r e p la c in g s im ila r m a t u r it ie s . T h e a v e ra g e y ie ld o n t h e s e b i ll s m o v e d d o w n w a r d t o 0 .0 8 4 p e r c e n t f o r t h e N o v e m b e r 2 5 is s u e , w h ic h is c l o s e t o t h e lo w e s t r a t e e v e r p la c e d o n T r e a s u r y b ills . O n N o v e m b e r 27, th e T re a s u ry a n n o u n c e d a $ 5 0 ,0 0 0 ,0 0 0 is s u e o f 1 0 4 d a y T r e a s u r y b ills , d a te d D e c e m b e r 2 a n d m a t u r in g M a r c h 1 6, 1 9 3 7 , in a d d i t io n t o a $ 5 0 ,0 0 0 ,0 0 0 is s u e o f 2 7 3 d a y b ills t o r e p l a c e t h e D e c e m b e r 2 m a t u r it y . on M a rch T h e r e d e m p t io n o f m a t u r in g b ills 16 w ill a c t as a p a r t ia l o ffs e t to th e lo s s e s of fu n d s to m e m b e r b a n k re s e rv e s o c c a s io n e d b y th e M a r c h q u a r t e r ly in c o m e t a x c o lle c t io n s w h ic h u s u a lly r e a c h th e ir p e a k o n th e 1 6 th . B il l s C an d P o m m e r c ia l aper D e a l e r s ’ p u r c h a s e s a n d s a le s o f b ills d u r i n g N o v e m b e r r e m a in e d v a ile d b ill w ith in th e fo r sam e n arrow s o m e t im e p a s t , a n d m arket a ls o w as lim its th a t have th e ra te s tr u ctu re u n ch a n ged . D u r in g o u t s t a n d in g a m o u n t o f b ills a r is in g f r o m p re o f th e O cto b e r th e d o m e s tic w a r e h o u s e c r e d i t s r o s e $ 9 ,0 0 0 ,0 0 0 f u r t h e r , a n d , a s i n S e p t e m b e r , th is w a s th e p r in c ip a l c h a n g e in t o t a l o u t s t a n d in g s . M o s t o f th e re s t o f th e in c r e a s e f o r im p o r t and creases of of b ills in export b ills , a p p r o x im a te ly o u ts ta n d in g $ 1 5 ,0 0 0 ,0 0 0 la r g e r at of w h ic h $ 3 ,0 0 0 ,0 0 0 . th e th a n b o th O cto b e r o ccu rre d in end of The show ed in to ta l v o lu m e O cto b e r, S ep tem b er, in w as a lth o u g h $ 3 3 ,0 0 0 ,0 0 0 s m a lle r t h a n a y e a r a g o , c h ie fly a s a r e s u lt o f a r e d u c e d am ount o f d o m e s tic t io n s h e ld $ 2 9 6 ,0 0 0 ,0 0 0 w areh ou se o f b ills b ills . on A c c e p tin g O cto b e r in s titu 31, o r about re a c h e d th e o ffe r in g sta g e . and T e le g r a p h 000 w as s e c u r itie s m on th . and Sept. 1936 Oct. 1938 T ota l............................................ 105 75 10 88 3 107 64 10 56 2 110 67 10 65 1 82 76 77 363 315 330 N o ch an ge occu rred d u r in g N ovem ber in th e a c t iv e s u p p ly of new paper 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 th c o m m e r c ia l p a p e r r e m a in e d a t % p e r ce n t. A t o t a l o f $ 1 9 8 ,8 0 0 ,- 0 0 0 o f p a p e r w a s o u ts ta n d in g a t th e e n d o f O c to b e r , c o m but m ade is s u e s d u r i n g of of S ta te , $ 2 3 ,5 0 0 ,0 0 0 F or p u b lic u n til E xch an ge th e of clo s e N o v e m b e r in c lu d e d d o m e s tic r e fu n d in g a $ 1 6 0 ,0 0 0 ,- and o ffe r in g a fte r c o r p o r a tio n m u n ic ip a l, m a k in g som e r a is e d by s e c u r ity th e m on th s and fa rm is s u e to ta l of of over la r g e s t v o lu m e year been th ese of th e a p p r o x i fin a n c in g , lo a n th e is s u e s , A r g e n tin e $ 3 5 0 ,0 0 0 ,0 0 0 am ount of yea r, th e to 1928, as has as fo r c a p ita l s a le g r a d u a lly , has fo r in are th e th e not is s u e s th e som ew h at has been fo r o n ly th e to ta ls o n ly fin a n c in g as th e A lt h o u g h a verage I n c lu d e d of and rea ch ed in c r e a s e d am ount th e d ia g r a m c o r p o r a tio n s th e v o lu m e . m o n th ly la r g e th e new M e a n w h ile , r e f u n d in g is s u e s in c lu s iv e . in of th rou g h in d ic a te s , record average show n by in c a p ita l o n e -fo u r th c a p ita l 1931. been new am ount in c r e a s in g d ia g r a m s in c e have th e c o r p o r a tio n s has a c c o m p a n y in g th is p ast d o m e s tic is s u e s of years of new a m ou n ts p la n t and e q u ip m e n t a d d it io n s a n d im p r o v e m e n t s , b u t a ls o a m o u n ts used to r e tir e p e r io d of pu rp ose ex ten t bank lo a n s s ta g n a tio n of fo r in c lu d e d d e m a n d b y b a n k in v e s to r s f o r c o m m e r c ia l p a p e r , a n d th e be is s u e f o r S e c u r itie s m on th . r a is e d Im p o rt.......................................................... E xport.......................................................... Dom estic shipment.................................... Domestic warehouse credit..................... Dollar exchange......................................... Based on goods stored in or shipped be tween foreign countries........................ th e N ovem b er, not G ov ern m en t, th e r e fu n d in g w ith $ 2 3 5 ,0 0 0 ,0 0 0 a 1925 Oct. 1935 T ype of acceptance w ill $ 9 5 ,0 0 0 ,0 0 0 about (Millions of dollars) in N ew m a te ly th is 9 0 p e r c e n t o f th e to ta l o u ts ta n d in g . r e g is te r e d C o m m is s io n A n o t h e r A m e r ic a n T e le p h o n e C om pany is s u e s by w ere th a t w ere th e fu r n is h in g w o r k in g e q u ip m e n t th e and new fin a n c e c o m p a n ie s , to r e tir e o r ig in a lly fro m b an k s. S e c u r ity M a rk e ts I n d u s tr ia l c a p ita l sto ck d u r in g m a rk ets c a p ita l and p art are of to several th e n e a r ly th e som e A ls o recen t p roceed s b o r r o w in g s ad van ced th e fo r e x p e n d it u r e s . to ta ls tem p ora ry p r ic e s m ade s e c u r ity p la n t in w h ic h in 4 of o b ta in e d per cen t p a r e d w i t h $ 1 9 7 ,3 0 0 ,0 0 0 a m o n t h e a r l i e r a n d $ 1 8 0 ,4 0 0 ,0 0 0 fu r t h e r in th e w e e k fo llo w in g th e N a tio n a l e le c tio n t o n e w a year ago. h ig h s s in c e S e p t e m b e r 1 9 3 0 , w h ile r a ilr o a d s to c k s u n d e r N e w The w e n t little n e t ch a n g e , a n d F in a n c in g to ta l of fe ll sh o rt o f th e new som e s e c u r itie s is s u e d d u r in g O c to b e r v o lu m e , p r in c ip a lly N ovem ber becau se n o d e c lin e . In th e p u b lic u t ilit y s u c c e e d in g w eek sh ares sh ow ed p r ic e m ov em en ts d e v e lo p e d c o n s id e r a b le ir r e g u la r it y , a n d b e g in n in g o n th e 1 8 th a d e c lin e in sto ck p r ic e s got under w ay. T h is de is s u e o f a s iz e c o m p a r a b l e w i t h t h e $ 1 7 5 ,0 0 0 ,0 0 0 A m e r i c lin in g te n d e n c y w a s e v id e n t o n a n u m b e r o f d a y s in th e c a n T e le p h o n e a n d T e le g r a p h r e f u n d i n g is s u e o f O c t o b e r la tte r p a r t o f th e m o n th , so th a t b y th e e n d o f N o v e m b e r MONTHLY REVIEW, DECEMBER 1, 1936 92 sto ck p r ic e s show ed m ix e d c o m p a r is o n s a t th e o p e n in g o f th e m o n th . q u o ta tio n s a cco u n t, 4 0 p e r ce n t fo r th e a cco u n t o f fo r m e r g o ld b lo c I n th e ca se o f th e r a ilr o a d s w ith c o u n tr ie s , a n d th e b a la n c e — 2 3 p e r c e n t— f o r o th e r c o u n th e r e w a s a n e t d e c lin e f o r th e m o n th o f a b o u t 5 p e r c e n t, tr ie s . th e u t ilit ie s w e r e v ir t u a lly u n c h a n g e d , a n d th e in d u s t r ia ls m a jo r e le m e n t in th e a g g r e g a t e in flo w ha d a n et a d va n ce o f 1 % s e c u r ity F o r e ig n r a p id b u y in g ra te in o f A m e r ic a n th e fir s t p a r t m a tte r o f th e in flo w s u b je c t of som e clin e d and ceed ed by p e r ce n t. on of som e s a le s . N et fo r e ig n N ovem b er, b u t ca n s abroad fo r e ig n s e c u r ity d ays w as rep orted T h rou gh ou t tr a n s a c tio n s , s e c u r itie s c o n tin u e d a t a o f c a p ita l fr o m d is c u s s io n , N e t fo r e ig n b u y in g o f A m e r ic a n s e c u r itie s w a s th e th e to a fte r th e to ta le d b a la n c e s b u y in g $ 2 3 ,0 0 0 ,0 0 0 . have been ex The h ow ever, th e b e tw e e n m on th , $ 2 7 3 ,0 0 0 ,0 0 0 , r e fle c te d a o u ts ta n d in g w h ile fe a tu r e and to $ 6 3 3 ,0 0 0 ,0 0 0 . s e c u r itie s fr o m ch an ges fu r th e r th is c o u n t r y o f c a p ita l th r o u g h a m o u n tin g p u rch a ses o f fo r e ig n b eca m e th e de a lo n e in flo w o f th e in of c a p ita l m ovem ent abroad s in c e A m e r i b rok era ge th e of of c a p ita l end of S ep tu r n o v e r o f s to ck s o n th e N e w Y o r k S to c k E x c h a n g e w a s te m b e r 1 9 3 6 w a s a m a r k e d a c c e le r a tio n in fo r e ig n b u y in g c o m p a r a tiv e ly h e a v y , th e a v e r a g e d a ily t u r n o v e r a m o u n t of i n g t o a b o u t 2 ,7 0 0 ,0 0 0 s h a r e s , t h e l a r g e s t s in c e F e b r u a r y . panded H ig h g r a d e d o m e s tic c o r p o r a t io n b o n d p r ic e s a d v a n c e d fu rth e r d u r in g N ovem b er, a c c o m p a n y in g in U n ite d S ta te s G o v e r n m e n t b o n d s . bonds th a n ad van ced in th e m ore ca se of and In th e stre n g th fa c t , h ig h g r a d e th e r is e w a s b e t t e r s u s t a in e d m e d iu m and lo w e r grade A m e r ic a n s e c u r itie s . d u r in g T h is O cto b e r and b u y in g rea ch ed in th e e a r ly p a r t o f N o v e m b e r . w as its g r e a tly la r g e s t ex v o lu m e R e c e n t o ffic ia l s ta te m e n ts c a llin g a tte n tio n to th e p r o b le m s r a is e d b y h e a v y fo r e ig n b u y in g by of A m e r ic a n s e c u r itie s w ere fo llo w e d , h ow ever, s o m e s la c k e n in g o f th e b u y in g m o v e m e n t. is s u e s , (In millions of dollars) a lt h o u g h p r ic e s o f t h e lo w g r a d e iss u e s , f o r th e m o s t p a r t , a ls o in cr e a s e d s o m e w h a t. M e d iu m grade r a ilr o a d 1935 Full year 1936 Through Sept. 30 T otal Inflow in Short Term Banking Funds: England................................................... European Gold B lo c.............................. Other Countries..................................... 337.4 307.0 319.1 100.5 18.9 270.1 437.9 325.9 589.3 is s u e s w e r e a n e x c e p tio n to th e r is in g t r e n d in b o n d p r ic e s , c o n t in u in g to d e c lin e as in O cto b e r, fo llo w in g th e la r g e a d v a n c e s o f p r e v io u s m o n th s . C a p ita l O th e r M o v e m e n ts B e tw e e n U n ite d S ta tes C o u n tr ie s W e e k ly U n ite d s ta t is t ic s of c a p ita l S ta te s a n d fo r e ig n m ovem en ts b e tw e e n c o u n tr ie s , b a s e d u p o n th e S ta te s been p u b lis h e d p e r io d fr o m S ep tem b er to and U n ite d have th e in s titu tio n s c o n tin u e th e p u rsu an t by th e 1936. s e c u r ity th e to th e is th e p u b lic a tio n th rou gh ou t T rea su ry T reasu ry b e g in n in g It d e a le r s of r e g u la tio n s , D ep a rtm en t 1935 in te n tio n to of th e th e A su m m ary fo r e ig n fro m th e of ta b le c o u n tr ie s , banks is c a p ita l of T reasu ry o f th e se fig u r e s a t q u a r t e r ly and fir s t n in e p resen ted b e tw e e n as r e fle c te d brok ers, m on th s of fo r 1936. b e lo w th e s h o w in g U n ite d S ta te s in th e w e e k ly th e fu ll year The 1,353.1 217.5 148.2 8 2.2 124.7 220.5 135.5 342.3 368.7 217.6 T otal............................................ 447.9 480.7 928.6 T otal Net Capital Inflow: E ngland................................................... European Gold B lo c.............................. Other Countries..................................... 554.9 455.1 401.4 2 25.3 239.4 405.5 780.2 694.5 807.0 Grand T otal............................... 1,411.4 870.2 2,281.7 (*) Includes net foreign purchases of securities from Americans, and changes in brokerage balances. F o r e ig n rep orts and net m ove E x ch a n g e s I n g e n e r a l, fo r e ig n e x c h a n g e r a te m o v e m e n ts w e r e c o n th e and 1935 rep orted 389.5 fo r end in te r v a ls . m ovem ent 963.5 rep orts fu r n is h e d to th e F e d e r a l R e se rv e B a n k s b y th e p r in c ip a l b a n k in g T otal............................................ Inflow in Security Transactions^*) E ngland................................................... European Gold B lo c............................. Other Countries..................................... a n d fin e d to pound ra th er n arrow s te r lin g exch an ges m on th , and receded but th e e a r ly and in of of c lo s e o f th e p r e v io u s m o n t h . an w as w h ic h $ 1 ,3 5 3 ,0 0 0 ,0 0 0 , in flo w o f sh ort term a m ou n ted or 59 to per ce n t, A b o u t o n e -th ir d o f th e n e t in flo w c lu d in g and of fo r e ig n rep a y m en ts p u rch ases of c o n s is te d of b a n k in g fu n d s , w h ile th e r e m a in d e r — $ 9 2 9 ,0 0 0 ,0 0 0 — o c c u r r e d t h r o u g h repaym en t $ 2 ,2 8 2 ,0 0 0 ,0 0 0 , s e c u r ity in d e b te d n e s s of sh o rt te rm fo r e ig n t r a n s a c tio n s . o f c a p ita l re p re s e n te d to th is s e c u r itie s by in fo r e ig n sh ort te rm b a la n c e s here, and but ad van ced m on th exchange $ 0 .0 4 6 1 % fo r e ig n e r s . A about 28 per on p a n ie d o f A m e r ic a n th e O f th e to ta l in flo w o f b a n k i n g b a la n c e s , $ 4 3 8 ,0 0 0 ,0 0 0 , by at a 6, and The a m ark ed fra n c s , a n d e q u iv a le n t m on th on of co n tra cts as degree s ta b ilit y cou n try th is fr o m H o lla n d , m ovem ent and of th e fo r m e r g o ld or th rou g h b lo c S w itz e r la n d . W ith c a p ita l abroad fr o m E n g la n d , c o u n tr ie s — F r a n c e , resp ect to in th e s e c u r ity in w a r d tra n sa c t io n s , a b o u t 3 7 p e r c e n t w a s r e p o r t e d a s b e in g f o r B r it is h of m arket a at th e on r is in g part b lo c of th e la tte r le v e ls as th e part at th e s te r lin g , w h ic h end of O cto b e r, de o n N o v e m b e r 6 a n d 7, th e r e m a in d e r N ovem ber ten d en cy , to in of 28. th e F ren ch d r o p p in g $ 0 .0 4 6 5 1 1 th e of th e 27 th is 5 % per fr a n c s d u r in g b e tw e e n 2 2 .9 8 to w id e r ran ge w ith a w h ic h th a n no to on per b e in g ra n g e of th e oth er fo r of fo r at th ree cen t show 2 3 .0 2 d u r in g th e a ccom year 15% and end d is c o u n t w a s N ovem ber, ce n ts th e w as d is c o u n t c o n tin u e d e s ta b lis h e d , flu c t u a t e d som ew hat cen t at ra te N ovem ber com p ared S w is s spot n a r r o w in g N e th e r la n d s g u ild e r , f o r has been pound s im ila r o n ly w h ile $ 3 2 6 ,0 0 0 ,0 0 0 , o r 2 4 p e r c e n t , w a s t r a n s f e r r e d t o t h is fro m sam e d u r in g recovery 7. c e n t, w a s r e c e iv e d th e The as $ 4 .8 7 % $ 4 .8 9 % N ovem ber 32 p e r 1 5 /1 6 som ew hat show ed m on th . w a rd or about The g o ld f o r a b r ie f p e r io d d u r in g th e c o u r s e o f t r a d in g N ovem ber th e ce n t o f th e to ta l m o v e m e n t re p re s e n te d fo r e ig n p u rch a se s s e c u r itie s . $ 4 .8 8 c lo s in g in c o n s id e r a b le p a r t o f th e r e m a in d e r r e p r e s e n t e d in c r e a s e s at at c lin e d s lig h t ly t o a s lo w in d e b te d n e s s cou n try , fo r e ig n q u oted w ere in of m on th s N ovem b er. E u ropean th e re a fte r m e n t o f c a p it a l t o th is c o u n t r y d u r in g th is w h o le p e r io d tw e n ty -o n e d u r in g fo r m e r som ew hat recovered N ovem ber lim its th e a on h ig h q u oted ce n ts. in The d e v a lu a t io n m on th m a jo r over C o n t i- FEDERAL RESERVE BANK OF NEW YORK n e n ta l E u r o p e a n ta tio n s fo r c u r r e n c ie s , b u t th e n e t c h a n g e N ovem ber a s a w h o le in w a s s lig h t , th e quo d o lla r - of O cto b e r, 93 r a is in g th is b a n k ’s g u i ld e r r a t e b e i n g q u o t e d a t 5 4 .3 0 c e n t s o n N o v e m b e r 2 8 a re u s u a lly s lig h t ly lo w e r in as c o m p a r e d w ith r e g is te r e d On N ovem ber n ou n ced th a t, 5 4 .1 5 23, as ce n ts o n th e a S ecreta ry fu r th e r in t e r n a t io n a l m o n e t a r y O cto b e r 31. of ste p th e in e q u ilib r iu m , T reasu ry th e d ir e c tio n a rra n g e m e n ts an in d e x of p o in t have a sh arp a d v a n c in g s in c e M ay th e fo o d a c t io n s c a n n in g se a s o n . on th e a r e c ip r o c a l b a s is w it h and S w itz e r la n d , U n ite d o f th e th is S ta te s tr ip a r tite th e ir th e B e lg iu m , th e c o u n tr ie s a d h eren ce d e c la r a tio n c o n n e c tio n , th a t of w h ic h of to th e S ep tem b er S ecreta ry of th e N e th e r have s ta te m e n t th e U n ite d exchan ge of in te n tio n S ta te s, in e q u a liz a t io n c o u n tr ie s , a g e n c ie s w ill of a ls o th ose or s e ll o ffe r in g s te rm s as th e th e of to c o u n tr ie s g o ld 25, 1936. in te re s t. revok ed s a le s th e w h ose at su ch m ay deem or of In sta te d a lte r e d ) g o ld fu n d s of tr e a s u r ie s tr e a s u r ie s to th e U n ite d a re S ecreta ry p u b lic be to to th e fo r e ig n or fis c a l or fis c a l S ta te s, p r o v id e d ra tes and upon su ch m ost a d v a n ta g e o u s to S im u lt a n e o u s ly w ith th e above a n n o u n c e m e n t , t h e S e c r e t a r y ’s s t a t e m e n t o f J a n u a r y 1934, th e r e g a r d in g s a le of ce n tr a l b a n k s o f g o ld draw n . in th e T h u s, under th e f o r c e , s a le s o f g o ld exchan ge g o ld fo r s ta b iliz a tio n p r iv a te 31, export to sta n d a rd c o u n tr ie s , w a s w it h te rm s th e of w ill b e m a d e fu n d s , s ta te m e n ts by th e fis c a l to agen T h e c o u n tr ie s so fa r d e s ig n a te d b y th e S e c r e ta r y o f th e T r e a s u r y a re E n g la n d , F r a n c e , B e lg iu m , th e N e th e r la n d s , a n d 1931. 4 th e g a in , per cen t E m p lo y m e n t S ep tem b er th e to a d ju s t e d th e in c r e a s e d h ig h e s t in a ll o f th e e x c e p tio n of g r o u p , w h ic h w a s a ffe c t e d b y th e c lo s in g o f th e S w itz e r la n d . th e U n ite d S ta te s as a w h o le fu r th e r g a in s in p r iv a t e e m p lo y m e n t in th e m a n u fa c t u r in g a n d n o n m a n u fa c tu r in g L abor in d u s t r ie s occu rred m id -O c t o b e r , van ces in su rveyed th e sta rte d m ore th e th e fr o m D ep a rtm en t of F eb ru a ry. o b ta in e d m o n th ly a g g r e g a te w e e k ly p a y r o lls w e r e m o r e th a n 000 g rea ter in th e p r e c e d in g to ad A p p r o x im a te ly e m p lo y m e n t in and th a n of m id -S e p t e m b e r s u c c e s s io n la s t w ork ers by p e r io d c o n tin u in g w h ic h 2 2 0 ,0 0 0 m on th . O cto b e r $ 1 6 ,0 0 0 ,- F a ctory p lo y m e n t s h o w e d a n u n se a so n a l g a in b e tw e e n em S ep tem b er a n d O c to b e r , a n d p a y r o lls a d v a n c e d b y c o n s id e r a b ly m o r e th a n th e usual w id e s p r e a d , season al n e a r ly 80 p r o p o r tio n s . per cen t of The th e g a in s w ere m a n u fa c tu r in g in d u s tr ie s c o v e r e d b y th e D e p a r tm e n t o f L a b o r r e p o r t in g m o r e w o r k e r s in O c to b e r th a n in S e p te m b e r , a n d a p p r o x i m a t e ly 8 8 p e r c e n t s h o w in g p a y r o ll in c r e a s e s . now T reasu ry tr e a s u r ie s , o r c ie s o f d e s ig n a t e d f o r e i g n c o u n t r ie s . F or p r in c ip le s T reasu ry s t a b iliz a tio n g o ld a g e n c ie s o ffe r t o s e ll g o l d su ch m ay a d d it io n th a n to n o tifie d (h e r e a ft e r , a n d u n til, o n t w e n t y -fo u r h o u r s ’ n o tic e , th is O c to b e r th a n in c o n tr a -s e a s o n a l m ore in d e x F a c t o r y p a y r o lls w h ic h th e m a jo r in d u s t r ia l c la s s ific a t io n s w it h b e e n m a d e b y th e U n ite d S ta te s T r e a s u r y f o r g o ld tr a n s la n d s , a d ju s t e d h ig h e s t le v e l s in c e A u g u s t 1 9 3 0 . The of num ber in d u s tr ie s w h ile of w ork ers ad van ced by in th e 4 e m p lo y m e n t in th e in d u s tr ie s , a ffe c te d by g rea ter d u r a b le per cen t c o m b in e d th a n goods d u r in g grou p O cto b e r, n o n d u r a b le goods s e a s o n a l d e c lin e s in a n u m b e r o f th e f o o d in d u s tr ie s , d e c r e a s e d a p p r o x im a t e ly 1 per ce n t. F rom th e la tte r part of 1929 to th e e a r ly m o n th s o f 1 9 3 3 , e m p lo y m e n t in th e d u r a b le g o o d s g r o u p G o ld M o v e m e n t D u r in g d e c lin e d N ovem ber im p o r ts of g o ld in to th e U n ite d a b le m u ch goods S ta te s c o n tin u e d in m o d e r a te ly la r g e th o u g h d im in is h in g in d ic a te s . v o lu m e . 1934, I m p o r t s a ffe c tin g th e m o n e t a r y g o ld s to c k to ta le d $ 6 9 ,1 0 0 ,0 0 0 , o f w h ic h $ 4 4 ,0 0 0 ,0 0 0 f r o m 000 fr o m S tr a its goods a s lig h t ly E u s s ia w ere s te a d ily in c r e a s in g Y o r k , a n d o n t h e W e s t C o a s t $ 1 ,9 0 0 ,0 0 0 d u r a b le goods A u s tr a lia fr o m and $ 3 0 0 ,0 0 0 and Y ork th e in as th e b a la n c e b o th in th e a c c o m p a n y in g of 1933 grou ps n on du r d ia g r a m and th rou gh ou t recovered m a te r ia lly , le v e l in d u s tr ie s b e lo w has r e m a in e d th e a verage e m p lo y m e n t n a rrow ed th e at about fo r u n ch an ged 1 9 2 3 -2 5 , fa c to r ie s d is p a r ity at w h ile p r o d u c in g b e tw e e n th e H ongkong. t h e r e le a s e o f $ 3 ,7 0 0 ,0 0 0 ea rm a rk fo r fo r e ig n R eserve B a n k o f N ew g o ld fr o m fr o m a n d $ 4 0 0 ,0 0 0 f r o m T h e s e im p o r ts , to g e th e r w ith o f g o ld fr o m I n d i a , $ 3 ,7 0 0 ,0 0 0 f r o m B e lg iu m , th a n e m p lo y m e n t 1 9 3 5 a n d 1 9 3 6 th e n u m b e r o f w o r k e r s in th e n o n d u r a b le S e ttle m e n ts , ca m e fr o m b u t in fr o m $ 2 ,5 0 0 ,0 0 0 r e c e iv e d a t N e w D u r in g e m p lo y m e n t $ 4 0 0 ,0 0 0 C a n a d a , $ 6 ,0 0 0 ,0 0 0 f r o m S w itz e r la n d , E n g l a n d , $ 9 ,9 0 0 ,- fu r th e r in d u s tr ie s , PER CENT a cco u n t a t th e F e d e r a l a n d a s u b s t a n t ia l a m o u n t o f o t h e r s o u r c e s , in c lu d in g d o m e s t ic n e w ly m in e d scrap g o ld , $ 1 4 0 ,0 0 0 ,0 0 0 in r e s u lte d in an in c r e a s e th e m o n e ta r y g o ld sto ck of c lo s e to o f th is c o u n t r y d u r in g th e m o n th . C e n tra l B a n k -R a te C h a n g e s E ffe c t iv e N o v e m b e r 2 6 th e S w is s N a tio n a l B a n k lo w e r e d its d is c o u n t r a te f r o m 2 to i y 2 p e r ce n t, a n d o n N o v e m b e r 1 t h e B a n k o f L a t v ia r e d u c e d its r a t e f r o m p e r ce n t. E ffe c tiv e th e 1 9 th , th e N a tio n a l B a n k m a r k r a is e d its r a t e f r o m E m p lo y m e n t a n d E m p lo y m e n t to r ie s in in c r e a s e d u su a l b e tw e e n of D en 3 y 2 to 4 p e r ce n t. P a y r o lls r e p r e s e n ta tiv e a p p r o x im a te ly th e m id d le 5 y 2 to 5 of 1 N ew per Y ork S ta te cen t m ore S ep tem b er a n d fa c th a n is th e m id d le Indexes of Employment in Industries Producing Durable and Non durable Goods, Adjusted for Seasonal Variation (1923-25 average=100 per cent) 94 MONTHLY REVIEW, DECEMBER 1. 1936 tw o grou ps th e d e p r e s s io n . goods w h ic h group d e v e lo p e d A lt h o u g h as a d u r in g th e e a r ly e m p lo y m e n t w h o le is s till in b e lo w years th e of d u r a b le p r e -d e p r e s s io n le v e ls , a n u m b e r o f t h e in d i v i d u a l in d u s t r ie s w it h in th e group th e are now e m p lo y in g m ore p e r io d p r io r to th e d e p r e s s io n . w ork ers th a n in E m p lo y m e n t in th e b la s t fu r n a c e , s te e l w o r k s , a n d r o llin g m ills i n d u s t r y in ber exceeded th a t of any m on th th e n u m b e r o f w o r k e rs in s in c e A p r il O cto 1924, and th e g la s s in d u s t r y w a s h ig h e r t h a n a t a n y t im e s in c e N o v e m b e r 1 9 2 6 . B u s in e s s P r o fits T h e c o n tin u e d th e J u ly th e ca se per to of cen t la r g e lis t b a s ic over a 229 of th is y e a r , p r o d u c tio n year w as ago, in c r e a s e s in d u s tr ia l is s u e in t e r im per q u a rter in d u s tr ia l p e rce n ta g e of 66 e x p a n s io n in t h e v o lu m e o f b u s in e s s i n S ep tem b er in and a g a in of 23 p r o fits . m e r c a n tile by F or con cern s, 192 8 a la r g e r th a n in th e c o r r e s p o n d in g but r e m a in e d la rg e s t r e la tiv e 41 per cen t in c r e a s e w as p e r io d of q u a r te r p r o fits le s s th a n in 1929. sh ow n by th e s te e l 1929 1930 N et in c o m e la r g e r th a n year ago, rep orted s u p p ly , th e by and in M ore in th e th e had p a rts la r g e r and and 20 in c r e a s e s and la s t in of oth er M ore year in and con cern s. 1930, m in in g com p a n y th a n occu rred a c c e s s o r ie s s h ip p in g sh ow n but o n ly (e x c lu s iv e grou ps d id a p r o fits v ie w p o in t th a n in th e t h ir d q u a r te r 1929. N et n in e p r o fits of m on th s of 1935, b u t w ere c e n t b e lo w th e sam e 229 1936 w ere 65 c o m p a n ie s per cen t 4 p e r c e n t le s s t h a n in 1929. F or fo r th e la r g e r th a n 1930, an d t h is p e r io d , c o n s id e r a b le fir s t in 39 p er in c r e a s e s o v e r 1 9 3 0 p r o fit s w e r e s h o w n b y th e a u to m o b ile , c lo t h in g and t e x t ile , a n d m e ta ls in c r e a s e s grou p w ere had m on th s p a n ie s sh ow n p r o fits of and 1929. by m in in g seven e x c e e d in g The r e p o r tin g n e t oth er p r o p o r tio n lo s s e s o f th e to ta l in 1 9 3 6 fr o m grou ps, and th ose w as s m a lle r grou ps, of of th e but no fir s t n in e in d iv id u a l com red u ced to 10 23 p e r ce n t in 1 9 3 5 . per cen t T h e cou rse o f in d u s t r ia l p r o fit s s in c e 1 9 2 8 is in d ic a t e d i n t h e a c c o m p a n y in g p a n ie s d ia g r a m , w h ose n in e m o n th s The year, w h ic h fig u r e s is have o f each y ea r C la s s I r a i l r o a d s earn ed a based been on d a ta c o m p ile d of am ount of and in r e s u lte d som e in s te a d N et in o f th e o p e r a t in g d u r in g th e th is e a r n in g s net in g a in , th e in c o m e fo r d e fic its s h o w n f o r in c o m e fir s t c e n t le s s t h a n in N e t o p e r a t in g n in e th e b e fo re m on th s fo llo w in g fir s t of fir s t n in e th e of im year m on th s s e v e r a l p r e v io u s y e a r s . paym ent of p re m arked h a lf th e a fte r th e 1936 of fix e d r e m a in e d ch arges 33 1 9 3 0 a n d 5 4 p e r c e n t le s s t h a n i n in c o m e fir s t in c o m e , v io u s years, com q u a r t e r o f th is net ch a r g e s , a s a g a in s t d e fic its in tw o 168 fo r p a y m e n t o f fix e d p rovem en t te le p h o n e c o m p a n ie s per 1929. fo r th e fir s t n in e m o n t h s w a s 1 7 p e r c e n t la r g e r t h a n a y e a r a g o . 193 4 1935 1936 u t ilit ie s 1930 and 2 5 p e r c e n t le s s t h a n w as 15 per cen t p e r c e n t s m a lle r th a n in 1929. (Net profits in millions of dollars) Third Quarter First nine months Corporation group 1929 1930 1935 1936 1929 A utom obiles.............................. Automobile parts and acces sories (excl. tir e s )................. Building supplies..................... Chemicals and drugs.............. Clothing and textiles.............. Coal and coke........................... Electrical equipment.............. Food and food products........ Household supplies................. Machinery and tools............... Metals and mining (excl. coal and c o k e ) ............................. Office equipm ent..................... O il............................................... Paper and paper p rod u cts.. . . Printing and publishing.......... Railroad equipm ent................ Shipping.................................... 89.6 25.3 3 3.4 4 8.9 307.7 145.0 132.4 227.0 2 2.2 6 .4 5 .7 8 .2 1.9 4 .7 43.1 30.7 32.2 2 .0 0 .5 0 .5 1.3 — 0 .2 — 0 .3 35.1 16.7 9 .0 4 9.5 40.3 27.9 5 .3 1.9 3 .0 8 .1 2 .7 3 .1 11.4 4 .2 4 3.3 1.3 0 .4 14.8 37.6 4 .2 6 .8 7 9.0 36.1 3 6.2 2 0.4 12.7 3 .2 124.6 100.2 8 1.5 3 .2 1 .5 1.1 4 .1 1 .8 0 .8 8 8.8 5 4.5 29.5 131.3 122.0 7 5.8 13.9 6 .4 4 6 24 .0 15.5 8 .7 16.0 5 .9 6 .9 3 .5 5 1.2 26.1 1.7 1.2 6 .6 5 .2 12.3 11.6 1.2 0 .1 8 4.2 3 3.4 3 .4 2 .1 18.3 14.8 16.1 3 .7 29.7 0 .9 1 .8 5 .8 1.5 29.1 1.1 12.8 4 5.8 2 4.9 31.1 4 3.8 21 .8 14.4 10.6 12.5 113.6 6 7 .5 39.9 6 7.5 4 .2 4 .1 2 .4 2 .0 2 1.8 2 0.9 7 .1 6 .1 30.6 3 2.8 0 .9 11.8 2 .2 3 .7 1.6 — 1.5 241.9 142.1 7 .5 62.3 5 .4 8 .7 2 1 2 .3 53.3 39.5 21.7 32.3 Total, 229 com panies......... 466.2 232.2 165.5 275.4 1,342.4 848.9 494.2 813.1 144 Class I Railroads Net operating incom e......... 393.3 278.7 126.3 196.6 * * Net incom e............................ — 4 .6 6 6.5 945.3 648.2 321.2 434.9 * * -6 6 .2 42.8 T o b a cco ..................................... Miscellaneous........................... 12.0 3 .2 18.6 0 .8 1 .5 0 0 .3 2 .6 0 .9 8 .5 82 Telephone companies Net operating incom e......... * * 48.6 56.4 54 Other public utilities Net incom e........................... 57.1 52.4 3 7.8 43 .8 — Deficit 1930 * * 1935 1936 4 6 .0 8 .7 117.2 2 .5 2 .0 4 2.9 9 7.4 6 8 18.4 144.7 169.8 187.7 180.9 122.7 140.6 * N ot available. o f th e n in e y e a r p e r io d . d u r in g th e th ir d m o d e ra te p u b lic w ere grou p s o f con cern s th a n 1933 t e x t ile , b u ild in g in d u s tr ie s . m e ta ls and and over p r o fits d ru g, c o k e ), tool p r o fits a u to m o b ile c h e m ic a l p e rce n ta g e and in o n e -h a lf o f th e b e tte r fr o m of m a c h in e r y ta b le coal la r g e s h ip p in g , c lo th in g in c r e a s e th e th a n oth er th e average a ls o of and 1932 la s t y e a r , b u t w a s 2 2 c o m p a n ie s , w h ic h w e r e ju s t b e g in n in g to s h o w n e t p r o fit s a 1931 Net Profit or Deficit of 168 Industrial and Mercantile Companies During First Nine Months of 1928-1936 (In millions of dollars) w h ic h e a r n in g s r e p o r t s , t h ir d q u a r t e r p r o fits w e r e cen t 1930, in to a c c o m p a n ie d b u s in e s s la s t y e a r a n d 1 9 p e r c e n t a b o v e th e t h ir d The w h ic h a m ou n ted P r o d u c tio n I n d u s tr ia l p r o d u c tio n le v e l d u r in g N o v e m b e r. c o n tin u e d at a r e la tiv e ly h ig h L ess th a n th e u su a l sea son a l re c e s s io n o c c u r r e d in s te e l m ill o p e r a t io n s , w h ic h a p p a r e n t ly averaged a rou n d w ith 7 6 ^ p e r ce n t in O cto b e r. 74 per cen t of c a p a c ity as com p a red O p e r a tio n s w e r e s u p p o r te d b y r a ilr o a d o r d e r s , r is in g r e q u ir e m e n ts o f th e a u t o m o b ile in d u s try , a n d to w a r d th e e n d o f th e m o n th b y p u rch a se s m ade fr o m b e fo r e p r ic e advan ces b ecam e th e w e e k ly r e p o r ts , p r o d u c t io n ad van ced to above 1 0 0 ,0 0 0 u n it s e ffe c tiv e . J u d g in g o f a u to m o b ile s w a s per w eek d u r in g th e c o u r s e o f th e m o n th , a n d in th e la tte r p a r t o f N o v e m b e r FEDERAL RESERVE BANK OF NEW YORK ra n ahead O rd ers h o lid a y g o o d s w a s s tim u la te d f o r c o t t o n t e x t ile s c o n t in u e d in h e a v y v o lu m e , a n d d e s p it e d itio n s . I n th e N e w a u n fille d sto re fu r th e r. a lly h ig h o f th e c o r r e s p o n d in g ra te orders of w ere E le c tr ic cotton m ill rep orted pow er to p e r io d a c t iv ity have ou tp u t rea ch ed in 1935. 95 b a c k lo g s of been b u ilt up a new h ig h le v e l d u r in g s a le s to a lm o s t appear Y ork to th e h ig h e s t fiv e years. have le v e l seasonal c o a l m in in g b u lk c o m m o d it ie s a n d The tio n s e a s o n a lly o f th e S y ste m of in d e x G overn ors r e m a in e d u n c h a n g e d o f th e 1 9 2 3 -2 5 th e a d ju s t e d B oard O cto b e r of of in in d u s tr ia l th e O cto b e r at 109 p e r cen t a v e ra g e , a le v e l n e a r ly 1935 in d e x of 95. 15 p e r cen t a b ov e S te e l in g o t cr e a s e d 5 p e r c e n t to a le v e l e x c e e d e d in ous O cto b e rs , in w ere a ls o z in c , e le c tr ic 1928 e v id e n t in pow er and 1929. t io n in c r e a s e d in of in o n ly tw o p r e v i p ig m a c h in e a c t iv it y a t m e a t p a c k in g p la n ts . o u tp u t E x p a n d in g p r o d u c tio n o u tp u t, p rod u c F ed era l R eserve t e n d e n c ie s iro n , tool le a d , and ord ers, and r e fle c tin g in s te a d of in c r e a s e d by w h ic h n e w th e in in p art of in d u s tr y . to in C o tto n at t e x t ile o p e r a t io n s th a t m ills , le v e ls , w h ic h show ed d u r in g w as le s s s m a lle r w ere th a n a year p r e v io u s ly th e usual in O cto b e r, b u t th e to ta l a m o u n t o f c o t A n th r a c ite co a l p r o d u c tio n fu r th e r . (Adjusted for seasonal variations and usual year to year growth) a u tu m n , th e m o v e m e n t of Aug. Sept. Oct. Metals Pig ir o n ........................................................... Steel................................................................. Lead................................................................. Z in c .................................................................. 62 72 56 66 81 101 49 81 86 100 47 79 94 102 57 82 Automobiles Passenger cars............................................... M otor trucks.................................................. 94 101 98 106 117 119 Fuels Bituminous coal............................................ Anthracite c o a l ............................................ Petroleum, cru d e.......................................... Petroleum products...................................... Electric p ow er............................................... 76 57 71 70 85 83 57 70 72 95 87 70 69p 72 94p 95p Textiles and Leather Products C otton consum ption.................................... W ool consumption........................................ Silk mill a ctiv ity ........................................... R ayon deliveries*......................................... Shoes................................................................ 83 123 70 104 100 106 120 67 134 113 105 102 64 118 108p 102 95 p 65p 97 112p Foods and Tobacco Products M eat packing................................................ W heat flour.................................................... Refined sugar deliveries.............................. T obacco products......................................... 80 91 79 91 96 102 57 89 94 77 71 94 101 80 Miscellaneous Cement............................................................ Tires................................................................. Newsprint paper r ........................................ Machine tools................................................ 43 67 80r 99 61 95 81r 120 65 104 80p 119 70 r Revised goods fir s t 79p 57 p Distribution to Consumer Department store sales, U. S ..................... Department store sales, 2nd D is t............. Chain grocery sales...................................... Other chain store sales................................ Mail order house sales................................. General Business Activity Bank debits, outside New Y ork C it y .. . . Bank debits, New Y ork C ity ..................... Velocity of demand deposits, outside New York C it y ........................................ Velocity of demand deposits, New Y ork C ity ........................................................... New life insurance sales.............................. Factory employment, UnitedfStates........ Building contracts........................................ New corporations formed in N. Y , State. . General price level*...................................... Composite index of wages*......................... Cost of livin g *............................................... 86p 58 p 71p p Preliminary R e p o rts to th e th e and r e t a il of 93 cou n try tra d e, cars fo r th e fir s t year th e in goods con n ected w ith a re s h o w n b e lo w . as 82p 127 Oct. Aug. Sept. Oct. 67 68 51 72 72 77 51 73 73 78 53 76 74 80 78 70 70 85 86 60 82 92 88 72 72 96 92 65 90 88 88 74 68 96 97 65 102 90 87 p 75 68 96 101 69 91p 63 45 65 39 66 41 67p 41 65 70 67 68 42 60 88r 42 58 40 52 95 r 57 56 42 55 95 r 46 60 40 54 96p 44 58 148 189 141 156 194 143 156 191 144 156p 193p 143p * 1913 average=100; not adjusted for trend. In th e N e w Y ork a n d N orth ern N ew Jersey 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 w o r k d u r in g O c to b e r s lig h t ly h ig h e r s u b s t a n t ia l g a in s o th er th a n th a n in w ere 35 cen t T h ere fu r th e r c o n tr a c tio n above th e w ere n o n r e s id e n tia l w o r k e n g in e e r in g ty p e s , b u t th ese o ffs e t b y per S ep tem b er. in r e s id e n t ia l a n d th e h e a v y w e re la r g e ly in g a in s th e v o lu m e T o ta l c o n tr a c ts in O c to b e r c o r r e s p o n d in g m on th of 1 9 3 5 , a n d f o r th e fir s t t e n m o n t h s o f 1 9 3 6 th e t o t a l w a s F or b e lo w w ith am ount th e th e of O cto b e r fr o m e x p a n s io n fo r d is tr ib u tio n d a ta C om m erce in d ic a te dem and 19 3 6 64 p e r c e n t h ig h e r th a n in th e sa m e p e r io d a y e a r a g o . fa v o r a b ly lim ite d r Revised o f n e w p u b lic w o r k s p r o je c t s . N ovem ber, D ep a rtm en t o f th ro u g h o u t th e r a il and B u ild in g w ere A c t iv ity h a lf com p a red to by s tr ik e , new a c t iv ity Primary Distribution Car loadings, merchandise and m isc........ Car loadings, other....................................... E xp orts........................................................... * For quarter ended o f B u s in e s s a c c o r d in g goods 1935 th e p o r a tio n of of (Adjusted for seasonal variations, for usual year to year growth, and where necessary for price changes) New passenger car registrations.............. Gasoline consumption.................................. Oct. th e of a u t o m o b ile m o d e ls w e r e g e n e r a lly a n n o u n c e d O c t o b e r in d e x e s o f b u s in e s s 19 3 6 1935 D u r in g s h ip m e n ts s h ip p in g 1935, o p e r a t in g in c r e a s e r o s e le s s t h a n s e a s o n a lly in O c t o b e r , a n d r a y o n d e liv e r ie s In d e x e s in u sual ago. t o n c o n s u m e d b y m ills in t h a t m o n t h w a s e x c e e d e d in o n ly p Preliminary th e th e a u t o m o b ile in d u s t r y w a s r e la t iv e ly s m a ll in N o v e m b e r . B it u m in o u s c o a l p r o d u c th a n fiv e o t h e r m o n t h s o n r e c o r d . d e c lin e d season a n d m is c e lla n e o u s and to th a n ra ilr o a d s u p p lie s P r io r th a n a d ju s t m e n t a b o u t th e u su a l p r o p o r tio n s , b u t a u to S ep tem b er h ig h le s s th e m o b i l e a s s e m b lie s r o s e le s s t h a n la s t y e a r , f o l l o w i n g a d e c lin e m ore s h ip m e n ts o w in g w ea th er co n a rea d e p a rtm en t seasonal o f m e r c h a n d is e w a ter lo a d in g s a u to m o b ile in advan ced a fte r c u r ta ilm e n t o c c u r r e d fr e ig h t, fa v o r a b le C o n s id e r a b ly N o v e m b e r , 1 2 p e r c e n t a b o v e a y e a r a g o , a n d b itu m in o u s a ls o in c r e a s e d . by M e tr o p o lita n w in te r in ra te a v a ila b le . 37 c itie s and S ta te s th o se covered b y co n tra cts aw a rd ed in th e S e p te m b e r d e c lin e . ever, w as in th e th e F . O cto b e r p r e v io u s W . D odge w ere C or som ew h at m o n th , c o n tin u in g T h e t o ta l v a lu e o f c o n tr a c ts , h o w a p p r o x im a te ly 13 per cen t h ig h e r th a n in O c t o b e r 1 9 3 5 , a n d f o r t h e f i r s t t e n m o n t h s t h e t o t a l wTa s 63 p e r ce n t a b o v e th e c o r r e s p o n d in g p e r io d D a ta w h o le s a le apparel 37 rep ort, in in 1935. f o r th e fir s t h a lf o f N o v e m b e r in d ic a t e in c r e a s e s a ll o f th e m a jo r c la s s ific a t io n s of b u ild in g . A vera ge 96 MONTHLY REVIEW, DECEMBER 1, 1936 d a ily c o n t r a c t a w a r d s f o r a ll c la s s e s o f c o n s t r u c t io n r o s e r e m a in in g a p p r o x im a te ly is o n s w it h d u r in g 8 per cen t above th e ra te m a in ta in e d O cto b e r. lo c a lit ie s a year S ep tem b er. rep orted ago in of th e S a le s th e m ore d a ily le a d in g fa v o r a b le ra te com p ar o f s a le s t h a n apparel sto re s in d i s t r i c t w e r e 1 8 .6 p e r c e n t h i g h e r t h a n l a s t y e a r , a n d C o m m o d ity F o llo w in g in th e P r ic e s th e la tte r of m ovem ent O cto b e r, th e w h ic h gen eral of d u r in g com and th e in d e x of 15 raw la s t M a y . occu rred a verage w h o le s a le p r ic e s o f p r in c ip a l c o m m o d it ie s a d v a n c e d N ovem b er, p ro d u cts 6 per cen t above crea se. th e m e ta ls O cto b e r w ere F o llo w in g an lo w . P r ic e im p o r ta n t m ovem en ts fa cto r a s u b s t a n t ia l in c r e a s e in in th e in th e in p r ic e of Locality c o p p e r f o r e x p o r t, th e s p o t q u o t a t io n f o r d o m e s tic c o p p e r on N ovem b er 6 rose % p r ic e of le a d a ls o ce n t to in c r e a s e d 10% 40 ce n ts a p o u n d . p o in ts to 5 .2 2 % N et sales a p o u n d , a n d a 2 0 p o i n t a d v a n c e r a i s e d z i n c t o 5 .0 5 c e n t s a pound. A ra th er s iz a b le ad van ce a ls o occu rred p r ic e o f t in , w h ic h r o s e a s h ig h a s 5 3 .6 2 % and c lo s e d N ovem ber ce n ts a t th e end at o f th e 5 2 .6 0 ce n ts, in th e ce n ts a p o u n d , com p ared p r e v io u s m o n th . The w ith 46 N ovem ber a d v a n c e in n o n fe r r o u s m e ta ls r a is e d p r ic e s in m o s t ca ses t o th e h ig h e s t le v e ls in fiv e o r s ix y e a r s . S p o t s ilv e r a t N e w Y o r k r o s e 2 % to 47% ce n ts M ay, but an a fin e ou n ce, ir r e g u la r th e d e c lin e ce n ts o n N o v e m b e r 9 fir s t ch an ge fo llo w e d , so g a in f o r th e m o n th a m o u n te d to o n ly % A m ong th e o th er c o m m o d it ie s s in c e s h o w in g g a in s o f O c to b e r a n d th e h ig h e s t p r ic e $ 2 .0 6 % a spot pound. s ilk P r ic e s in c r e a s e d of w ool 20 and ce n ts h id e s h ig h e r . O n th e o th e r h a n d , a d e c lin e o f 5 % a bushel occu rred in cash A n d u r in g upw ard th e fir s t w eek of in e s tim a te d in c r e a s e th e re over w as m on th , a 1936 th e p r o d u c tio n O cto b e r m o d e ra te h ow ever, th e in but a ls o D u r in g th e S to re fir s t p r ic e a m on th Y ork s io n over in th e In h a lf sh ow ed m ore O cto b e r, and c o r r e s p o n d in g O cto b e r to ta l 4 9.9 4 8.9 48.9 spot of 7 9 1 ,0 0 0 th e c lo s e recovered est a d va n ce w are fir m s m on th s. in in s a le s sh ow ed The shoe s in c e th e even record ed of by th e th e m e n ’s le v e l s in c e th a n th e s m a lle s t 1 3 .9 p e r io d s a le s a fte r per a year of th e a llo w in g M arch m ost fa v o r a b le s in c e la s t M a y . J ersey sto re s 1934, N a tio n a l c lo th in g F e d e r a t io n w ere of th e area and in th e h ard in e ig h t s a le s le s s s a le s in of T e x tile s , h ig h e r Percentage change October 1936 compared with October 1935 of cen t h ig h e r th a n ago. r e p o r tin g d e p a rtm en t and H udson Com m odity Net sales and Y ork record ed by d a ily Y ork th e la r g e s t p e r - average s a le s a and s u b s t a n t ia l year p r e v io u s N orth ern g a in s in n C £! p £ ti< $ ? & . Paper. DaDer................................................... iam onds. Jewelry----- <^C S ta te store s sh o w e d w ith C ity MTOceTiesen’s clothing............. Cotton goods................ R ayon and silk g o o d s . Shoes. r .n R iv e r V a lle y . W eighted average 1 .J N ew s a le s , th e la r g e s t in th r e e m o n th s , a n d d e p a r t m e n t s to r e s i n 1 M in s u b s t a n t ia lly f o r t h e e f f e c t o f o n e m o r .e ^ , -^ rocer:e~s * c o m p a r is o n s T he N ew a ls o 1936, g a in rep orted in c r e a s e s th e u s u a l se a so n a l e x p a n w ere th e S o u th e r n a n d C e n tra l N e w th e Jan u ary s a le s th a n in fiv e m on th s. and s a le s th a n a of year 1934. th e M e tr o p o lita n d e p a r tm e n t s to r e s in c r e a s e d ce n ta g e s fir m s a y e a r a g o s in c e a g o , a n d j e w e l r y s a le s s h o w e d t h e la r g e s t g a in s in c e M a y e a r lie r . N o v e m b e r , t o t a l s a le s S a le s o f th e B u ffa lo D is tr ic t S ta tio n e r y O n t h e o t h e r h a n d , y a r d a g e s a le s o f s ilk g o o d s , r e p o r t e d S a t u r d a y th is y e a r , th e in c r e a s e w a s th e la r g e s t in t h r e e 1 m on th s. m on th s. s m a lle s t con cern s s t o r e s in t h is d i s t r i c t w e r e 1 3 .7 p e r c e n t h i g h e r t h a n la s t year, an d fiv e O c t o b e r 1 9 3 5 , a n d th e g r o c e r y , p a p e r , a n d d ia m o n d fir m s b a le s , a in c r e a s e A u g u s t 1 9 3 5 , c o t t o n g o o d s c o n c e r n s r e g is t e r e d th e s m a ll th e of to s m a lle s t r e c o r d e d t h e fir s t d e c r e a s e in s a le s f r o m cotton fo llo w in g T ra d e T ra d e r e p o r t in g d e p a r tm e n t sto re s in N ew by 4 8.8 + 3 .8 th e m oved a t 1 2 ,4 0 0 ,0 0 0 b a le s , a n e s tim a te r e a c tio n ; spot m o d e r a te ly h ig h e r th a n D e p a rtm e n t 1 + 3 .4 + 1 8 .6 t h i s d i s t r i c t a v e r a g e d 5 .7 p e r c e n t h i g h e r t h a n l a s t y e a r , to r e le a s e o f th e N o v e m b e r 1 G o v e r n m e n t c o t t o n c r o p r e p o r t , w h ic h + 1 3 .7 T o t a l O c t o b e r s a le s o f t h e r e p o r t i n g w h o le s a le fir m s in about fu r th e r ce n ts to $ 1 .4 0 % sh ow n N ovem ber, All department stores. Apparel stores. W h o le s a le w h e a t a t M in n e a p o lis , r e fle c t m ovem ent w as 51.9 55.1 52.6 55.2 4 4.7 4 6.6 38.6 d u r in g in g in p a r t im p r o v e d p r o s p e c t s f o r S o u t h e r n H e m is p h e r e crops. 52.1 5 1.8 4 8.2 5 1.0 4 3.6 41.2 37.0 ce n t. c r u d e r u b b e r r e a c h e d 18 1 1 /1 6 ce n ts a p o u n d , 1 9 /1 6 ce n ts seven years, a n d 1936 + 2 .4 + 1 5 .3 — 0 .1 + 0 .1 + 8 .4 + 1 0 .8 — 6 .6 net t h e m o n t h , r a w s u g a r r o s e 3 0 p o i n t s t o 3 .6 5 c e n t s a p o u n d , a b o v e th e e n d 1935 + 1 2 .0 + 2 7 .7 + 1 5 .0 + 6 .2 + 2 0 .3 + 1 6 .0 + 1 2 .5 + 9 .9 + 7 .0 + 1 3 .6 + 2 1 .1 + 1 2 .4 + 3 .3 + 2 1 .8 la s t th a t th e Stock on hand end of month New Y o r k ........................................ B uffalo.............................................. R ochester......................................... Syracuse........................................... Northern New Jersey................... Bridgeport........................................ Elsewhere......................................... Northern New York S ta t e .. . . Southern New York State. . .. Central New York State.......... Hudson River Valley D istrict. Capital D istrict.......................... W estchester and S ta m ford .. .. Niagara F alls.............................. The ce n ts Per cent of accounts outstanding September 30 collected in October Percentage change October 1936 compared with October 1935 p u t e d b y M o o d y ’s I n v e s t o r s S e r v i c e r o s e t o a p o i n t a b o u t n o n fe rro u s on a n a v e r a g e d a ily b a s is th is in c r e a s e w a s th e la r g e s t s in c e dow n w ard part in th is 1 Stock on hand end of month Per cent of accounts outstanding September 30 collected in October 1935 1936 + 3 .1 + 1 1 .6 + 8 .1 + 3 .4 + 1 3 .8 * — 11.4 + 1 0 .6 + 1 2 .6 — 3 .2 + 0 .9 + 2 1 .3 + 1 3 .8 + 6 2 .4 + 1 4 2 .7 9 6.8 44.1 94.1 4 3 .5 6 i ’.3 46.4 48.3 55.0 46 .8 21.4 59.2 4 3.5 48.0 51.9 6 6.8 } 18.7 + 5 .7 6 2.4 6 1.2 incorporated, FEDERAL RESERVE BANK OF NEW YORK M O N T H L Y R E V I E W , D E C E M B E R 1, 1 936 B u s in e s s C o n d i t i o n s in th e U n ite d S ta te s (Summarized by the Board o f Governors o f the Federal Reserve System) OLUME o f industrial production increased seasonally in October and there was a substantial rise in employment and payrolls. Prices of a number o f industrial raw materials and finished products have advanced. V 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) and E m ploym ent In October the B oard’s seasonally adjusted index o f industrial production was at 109 per cent o f the 1923-1925 average, about the level o f the three preceding months. Steel production was in larger volume than in any other month since 1929, and the rate o f activity was sustained in the first three weeks of November. Output o f automobiles rose sharply from September to October. The increase in this period was less than a year ago, reflecting the faet that this year the date o f the shift to production o f new models was less uniform among the leading producers, but in the first three weeks o f November produc tion increased further and was larger than last year. Activity at textile mills, which usually increases in October, declined slightly from the high level o f September. In the meat packing industry output showed a further increase. Coal production increased seasonally, and production o f crude petroleum con tinued at recent high levels. Factory employment increased by more than the usual seasonal amount between the middle o f September and the middle o f October. Increases in employment were general among the durable goods industries, with the largest expansion reported at factories producing automobiles and machinery, while changes in employment in the nondurable goods industries were largely o f a seasonal character. Factory payrolls rose by considerably more than the usual seasonal amount. Indexes of Daily Average Value of Department Store Sales, Adjusted for Seasonal Variation and Unadjusted (1923-25 average100 per cent) Value o f construction contracts awarded, as reported by the F. W . Dodge Corporation, was slightly smaller in October than in September, with a decline in publicly owned projects partly offset in the total by an increase in awards for private nonresidential construction. D is t r ib u t io n I b v -F OODS ) ) \ Sales by department stores and by mail order houses serving rural areas increased from September to October by a larger amount than is usual at this season. Variety store sales showed a less than seasonal rise. Freight car loadings increased further in October, reflecting chiefly a larger volume of shipments o f miscellaneous freight and o f coal. OTHER c;OMMOCHTIES_ r Jd C o m m o d it y P r ic e s \ V 'W v\N FA,K DIU rA M PRODUCTS 1 201____________________________________________________ _ 1929 1930 1931 1932 1933 1934 1935 1936 Group Price Indexes of Bureau of Labor Statistics (1926 average= 1 0 0 per cent) The general level o f wholesale commodity prices advanced somewhat during the first three weeks o f N o v e m b e r , following two and a half months o f little change. Since the middle o f October prices o f a number o f industrial raw materials, particularly nonferrous metals, hides, rubber, silk, and wool, have shown a considerable rise and there have also been substantial increases in the prices o f some finished products, including automobile tires, glass, woolen goods* and cotton goods. B ank Cr e d it Member bank reserves increased in the four weeks ended November 18, chiefly as the result o f transfers of gold to the United States. On that date member bank reserves were $2,270,000,000 larger than legal requirements, the highest level since the increase in reserve requirements which became effective in the middle o f August. Adjusted demand deposits at weekly reporting member banks in leading cities have continued to increase, and on November 18 amounted to about $15,400,000,000. Since the end o f last May these deposits have increased by over $800,000,000, reflecting a rise in deposits outside New York City. Time deposits at reporting banks have remained at about the $5,000,000,000 level. 1932 1933 1934 1935 1936 Member Bank Reserve Balances (Latest figures are for November 18) Holdings o f United States Government obligations at reporting banks have recently declined somewhat further. Since the end o f June the decline has amounted to about $300,000,000 and has been at New York City, with little change elsewhere. Holdings o f other securities have declined in recent weeks, reflecting chiefly a reduction in the amount held by New York City banks. Loans to customers have shown some further increase.
@FedFRASER