Full text of Economic Policy Review (Federal Reserve Bank of New York) : January 1, 1937

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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

J a n u a ry

Y ork

th e

D e c e m b e r

p o s s ib ilit y

r e n c ie s
O n D e c e m b e r 2 1 , th e S e c r e t a r y o f th e T r e a s u r y is s u e d
th e fo llo w in g

D is t r ic t

sta te m e n t:

be

c a p it a l w h ic h
w h ic h w o u ld

The Secretary of the Treasury, after conferring with the
Board o f Governors o f the Federal Eeserve System, announces
that he proposes, whenever it is deemed advisable and in the
public interest to do so, to take appropriate action with
respect to net additional acquisitions or releases of gold by the
Treasury Department.
This will be accomplished by the sale of additional public debt
obligations, the proceeds o f which will be used for the purchase
of gold, and by the purchase or redemption of outstanding
obligations in the case of movements in the reverse direction.

th a t

m ig h t

d e v a lu a t io n

fo llo w e d

had

been

by

sent

of

th e

to

th e

S in c e th e e n d o f J a n u a r y 1 9 3 4 , w h e n th e g o ld v a lu e o f
d o lla r w a s r e d u c e d , th e m o n e ta r y

cou n try

had

la r g e ly

in c r e a s e d

as a r e s u lt

of

by

g o ld

m ore

g o ld

th a n

im p o r ts

s to ck

o f th is

$ 4 ,0 0 0 ,0 0 0 ,0 0 0 ,

at N ew

Y ork.

T h is

g o ld im p o r t m o v e m e n t r e fle c te d n o t so m u c h a b a la n c e o f
p a y m en ts
s e r v ic e s

due

w ith

th is

fo r e ig n

ca p ita l, in c lu d in g
rep a ym en t

cou n try

of

on

exch an ges

c o u n tr ie s

th e

as

r e p a tr ia tio n

fo r e ig n

a

of

goods

heavy

in flo w

o f A m e r ic a n

in d e b te d n e s s

to

th is

and
of

c a p ita l,

cou n try ,

th e

b u ild in g u p o f f o r e ig n w o r k in g b a la n c e s in th is c o u n t r y ,
and,

e s p e c ia lly

in flo w

of

s in c e

fo r e ig n

th e

m id d le

c a p ita l

fo r

of

la s t

year,

in v e s t m e n t

in

a

heavy

A m e r ic a n

s e c u r itie s .
The

e x p a n s io n

in

bank

reserves

r e s u ltin g

fr o m

th is

w a s p a r t ly

o ffs e t b y a s u b s t a n t ia l r is e in c u r r e n c y c i r c u ­
by

m em ber

th e

ban k s,

in c r e a s e

w h ic h

in

reserv e

a c c o m p a n ie d

r e q u ir e m e n ts

r a p id ly

In ste a d

o f su ch

o f fo r e ig n

an

o u tflo w , h o w e v e r , a c o n tin u e d

c a p ita l fo llo w e d

th e

d e v a lu a t io n

to

A u gu st

1936

excess

w e r e a b o v e $ 3 ,0 0 0 ,0 0 0 ,0 0 0 .

reserv es

I n v ie w

of

of

in flo w

g o ld

b lo c

c u r r e n c ie s , a p p a r e n t ly r e fle c t in g , in la r g e p a r t , c o n t in u e d
u n c e r t a in ty
a ttr a c tio n

c o n c e r n in g th e s it u a t io n
of

th e

s u b s t a n t ia l r is e
b u s in e s s

A m e r ic a n

in

v o lu m e

p r ic e s

and

in

in

s e c u r ity

w as

E u rope

m a rk ets,

p rom oted

b u s in e s s

by

p r o fits .

and

recovery

B y

th e

w h ere
th e

a
in

la tte r

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

h a d r is e n t o a p p r o x i m a t e l y $ 2 ,2 5 0 ,0 0 0 ,0 0 0 , a n d g o l d w a s
s till c o m in g t o th is c o u n t r y f r o m
in flo w

of

r e ta r d in g
and

of

g o ld
th e

le d

to

in flo w

p r e v e n t in g

of

fo r e ig n

fu r th e r

a d d it io n a l in c r e a s e s in

abroad.

d is c u s s io n

bank

of

c a p ita l

g o ld

T h is c o n tin u e d

p o s s ib le
to

in flo w s

m eans

of

th is

cou n try

fr o m

c a u s in g

reserves.

A s a la r g e p a r t o f th e g o ld in flo w d u r in g th e p a s t th r e e
y e a r s h a s b e e n t h r o u g h th e P o r t o f N e w Y o r k , th e im m e ­
d ia te e ffe c t w a s t o in c r e a s e th e r e s e r v e s o f th e N e w
C it y b a n k s .
tr ib u te d
th rou gh

The

q u ite

r a p id ly

th rou g h ou t

th e

cou n try ,

G o v e r n m e n t o p e r a t io n s , w h e r e b y

o f th e fu n d s

Y ork

a d d it io n a l re s e rv e s , h o w e v e r , w e r e

needed

d is ­

la r g e ly

a c o n s id e r a b le

to m e e t G o v e r n m e n t d is b u r s e ­

m e n t s w e r e r a is e d t h r o u g h s a le s o f T r e a s u r y s e c u r it ie s in
PER CENT

of

e x p a n d in g

b a n k d e p o s its , b u t in a n u m b e r o f w e e k s f r o m
1935

th is

S ta te s

la tio n

and

and

fr o m

c o u n t r y a n d a c o r r e s p o n d in g r e d u c tio n in b a n k re se rv e s.

p art

in c r e a s e in th e m o n e t a r y g o ld s to c k o f th e U n it e d

fo r e ig n

S ta te s,

o f g o ld

p a rt o f N ov em b er excess reserv es fo r
th e

cu r­

of

U n ite d

r e s u lt in a h e a v y o u tflo w

1937

b lo c

g o ld

r e p a tr ia tio n

1,

N ovem ber

m em ber

banks

o f th is g r e a t in c r e a s e

in b a n k r e s e rv e s to a v o lu m e f a r in e x c e ss o f a n y p r o b a b le
n e e d s w ith in th e n e a r fu t u r e , th e B o a r d o f G o v e r n o r s o f
th e

F ed eral

R eserve

S y ste m

m en ts o f m e m b e r b a n k s b y
16,

1936.

e x is tin g

T h is

$ 1 ,5 0 0 ,0 0 0 ,0 0 0
A

ren ew ed

banks

a c tio n

m em ber

b e lo w

r e q u ir e ­

th e

e ffe c t

excess

of

r e d u c in g

reserves

ber

and

d e v a lu a tio n

h ow ever,

O cto b e r

in

excess

due

im m e d ia te ly

o f th e

b lo c c o u n tr ie s a n d
p r e v io u s

in

n e a r ly

reserves

of

m em ber

c o n s id e r a b le




p r e c e d in g

c u r r e n c ie s

o f c e r ta in

th ere

th en

by

part

o f g o ld , w h ic h w a s a c c e le r a te d in

th e

m on th s

reserv e

$ 1 ,8 0 0 ,0 0 0 ,0 0 0 .

e x p a n s io n

fo llo w e d ,

fu r t h e r in flo w

had

bank

to

in c r e a s e d

5 0 p e r c e n t e ffe c tiv e A u g u s t

had

o f th e

and

been

fre q u e n t

a

fo llo w in g

E u rop ean

o t h e r c o u n tr ie s .

to

S ep tem ­

F or

g o ld
som e

d is c u s s io n

of

Excess Reserves Held by Member Banks located in Borough of Man­
hattan of New York City and by “ Country” Member Banks in the
Second Federal Reserve District, Expressed as Percentages
of Required Reserves (Latest figures are for November)

MONTHLY REVIEW, JANUARY 1, 1937

2
th e

N ew

w id e ly
1933

Y ork

m arket

and

th r o u g h o u t th e

th e

fu n d s

cou n try .

th e n

B e tw e e n

a n d D e c e m b e r 1 6, 1 9 3 6 th e n e t g o ld

Y ork

a m ou n ted

to

m ore

th a n

d is tr ib u te d

D ecem ber
in flo w

31,

at N ew

$ 3 ,5 0 0 ,0 0 0 ,0 0 0 , b u t i n

th e

sa m e p e r io d G o v e r n m e n t w ith d r a w a ls o f fu n d s fr o m
d is tr ic t

w ere

c lo s e

to

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

The

r e s u lt

th is

w as

a

g r e a t in c r e a s e in th e a m o u n t o f r e s e r v e s h e ld b y th e b a n k s
a m ou n ts

F ed era l E eserve

of

su ch

B anks

fu n d s

in

w ere

oth er

d e p o s ite d

d is tr ic ts ,

and

t ia l a d d it io n a l a m o u n ts w e r e s e n t b a c k t o N e w
c r e d ite d

to

spondent
T here

th e

b a la n c e s

banks

w as

w ith

a ls o

a

fr o m
N ew

Y ork.

th e

ban ks,
have

of

The

as

of

th e

and
th e

w e ll

h e ld

N ew

cou n try

retu rn

b a n k in g

reserves

by

la r g e

s u b s t a n t ia l flo w

oth er p a rts

th rou g h

c a r r ie d

th e

as

la r g e

flo w

of

oth er

Y ork

banks

a m ou n ts

of

of

corre­

c o m m e r c ia l

C it y

and

ban k s.
fu n d s

a ccou n ts

to

N ew

c h a n n e ls

in

Y ork

r e p le n is h e d

ban k s,

th rou gh ou t

excess

su b sta n ­
Y ork

tow n

d e p o s it

fu n d s

th e

C ity

Y ork

of
to

c o m m e r c ia l

N ew

out

in

and

th e

reserv es

th e se

cou n try ,

d u r in g

th e

r e la tio n

a m ou n ts

to

reserv e

r e q u ir e m e n ts ,

o f e x ce ss re s e rv e s h e ld

by

C it y b a n k s u s u a lly h a v e b e e n n o
in

h ow ever,

of

Y ork

d e p o s it

ce n ta g e

banks by

b a la n c e s

serves n o w

h e ld b y

of

th e la r g e

B u ffa lo )

Y ork
th e

C it y

fir s t

ou t o f tow n

c o n s id e r a b ly
th e fo r m e r .

excess

reserves

“ cou n try ’ ’ banks
and

N ew

as

th e

of

1935,

th e

th e

fo r m

excess

re­

th is d is t r ic t th e p e r ­

reserve

o u t s id e

m u ch

(M a n h a tta n )

p r e c e d in g

average

d is tr ib u tio n

depend

th e

r e q u ir e m e n ts

of

N ew

sam e

as

w as

som ew hat

d ia g r a m

show s.

of

r a t io

le s s

in

th e

of

of

T he p roced u re

reserves

excess

In

N ovem ber

to

reserve

in

th e

paym ent
th e

a

1936

r e q u ir e ­
b a n k s in
Y ork

th e

ury

B ank

in

th e

reserve

th e n

O ffic e ,

th e

a

R eserve

ern m en t

th e
pay

to

pay

T reasu ry
fo r

it

of

a

of

and

s a le

s e c u r itie s

of

reserves,

to

w ill

ca u se

g o ld

in

th e

in

N ew

b e tw e e n

th is

d is tr ic t

P r e s u m a b ly

r e c e ip t s

a p p roa ch

th e y e a rs fr o m
rea ch
so

th e

th a t

on

1920 to

p o in t

of

p u b lic

1930, w h en

e x c e e d in g

debt

fu n d s th ro u g h

fr o m

as G o v ­

a

can

N ew

b a la n c e ,

o f fu n d s

Y ork

G o v e r n m e n t r e c e ip t s

G o v e r n m e n t e x p e n d it u r e s ,

be

r e tir e d ,

th e

m ovem ent

a n d o th e r p a rts o f th e c o u n tr y m a y b e re v e rse d .
oth er

hand,

w ill

d u r in g

G o v e rn m e n t tra n s fe rs b e tw e e n N e w

in c r e a s in g

b u s in e s s

dem ands

fo r

of

Y ork

O n th e

c a p ita l

in

o t h e r lo c a lit ie s m a y r e s u lt in a r e v e r s a l o f th e m o v e m e n t
of

fu n d s

w h ic h

th rou gh

c o m m e r c ia l

has been tow a rd N ew

and

Y ork

b a n k in g

tr a n s fe r s ,

d u r in g th e p a st th re e

T

its

th e

in

th u s

th e

fo r

th e

h o lid a y

w ith
th is

w ill

r e s u lte d
an

to
in

in

le a v e

to

T rea s­
accou n t

th e

g o ld

th e

m em b er b a n k reserv es u n ch a n g ed , a n d

in

w ith

th e

e ffe c ts

of

w ith

p roced u re,

in a c tiv e ,

of

m em ber

to ta l
m ay

w ill

R eserve

th rou gh

in s te a d

th e
con ­

bank

am ount
even

new
th e

e ffe c t o f c a u s in g a s u b s t a n t ia l, t h o u g h t e m p o r a r y , r e d u c ­
tio n

in

excess

N ovem ber

25

reserves

and

of

m em ber

D ecem ber

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

In

23

th e

ban k s.

B e tw e e n

am ount o f cu rren cy

r e d u c tio n

p a y m en ts

fo r

m em ber

bank

reserv es.

th e

new

T rea su ry

p a y m en ts
in te r e s t

e x p e n d it u r e s
s m a lle r

s e c u r itie s

s o ld

by

th e

T reasu ry,

in c o m e t a x a n d o t h e r c o lle c t io n s , e x c e e d e d

s e c u r itie s ,
a

in

a d d it io n , b e tw e e n D e c e m b e r 9 a n d D e c e m b e r 2 3 , ca s h

to g e th e r w ith

by

th a n

p a r t ly

r a is e d

th e

r e d e m p tio n
and

a p p r o x im a te ly

am ount

due

fo r

p a y m en ts,

by

to

th e

in

fa c t th a t th e

T reasu ry

w as

w ith

cash

ra th er

T h is w a s

p r e c e d in g

am ount o f

s m a lle r ,

and

of

red u ce

new

p a r t ly

T r e a s u r y s e c u r i­

(5 5

p e r c e n t in D e c e m b e r as c o m p a r e d w ith 7 7 p e r c e n t

S ep tem b er a n d J u n e ).
reserves

w ith

book

c r e d it

S u ch tr a n s fe r s o f fu n d s fr o m

to

o r d in a r ily

th a n

T rea su ry

p a id

in

fo r

m a t u r in g

G overn m en t

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

severa l

th e

of

oth er

t ie s

exceed

o r d in a r y

bu rsem en t
th en

go

bank

of

G overn m en t
are

r e c e ip t s

fu n d s

back

C u rren cy

d e p o s its

reversed

in

in

w eeks

in to

a ls o

reserves

fr o m
th e

flo w s

and

th u s

to

G overn m en t

reserve

back

to

s u b s t a n t ia lly

cau se
of

banks

in

th e

a g a in

th e

d e p o s its ,

b a la n c e s

th e

m on th

d is ­

w h ic h

th e

and

th e

fo llo w ­

ban k s.

in c r e a s e s
fo llo w in g

C h r is tm a s .
In

G ov­

G overn ­

fu n d s

F ed eral

T h u s,

g o ld ,

th e

th e

new

a

in c r e a s e

The

b a la n c e

in c r e a s e s

tog eth er

in g t a x p e r io d s , a s G o v e r n m e n t e x p e n d it u r e s t e n d

am ount

th e

tra d e ,

T r e a s u r y fin a n c in g in th e D e c e m b e r ta x p e r io d , h a d

to

r e s to r in g

im p o r te d

eserves

at

c e r tific a te

th e

R

xcess

in

and

p r o v id in g

E

in

r e c e iv e d

bank.

g o ld

m ark et.

fu r th e r

bank

U nder

restore

th e

a

e d u c t io n

p resen ted

w hen

a g a in s t th e im p o r te d

b a la n c e

th e n

w hen

im p o r te r

accou n t

th e

e ffe c t

th e

ten d

reserves

p a st,

R

em porary

D u r in g th e p a st m o n th sea son a l d e m a n d s fo r c u r r e n c y

B anks

m em ber

g o ld .

im p o r ts




r e la tio n s h ip

d is tr ic ts .

and

d im in is h , a n d

R eserve

cr e d ite d

a ccou n t,

w ill h o ld

B an k s,

t in u in g

th e

e x p e n d itu r e s

th e b a s is o f e x p e r ie n c e

to

bank

th rou g h

d e p o s it in

and

fo r

out

th e

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

m em ber

G overn m en t

B ank

d e p o s it

m e n t ’s b a la n c e
w h ic h

b e tw e e n

to a r e d u c tio n in th e p r o p o r t io n o f n e w

w ill

excess

th e

w h ic h

o f th e F e d e r a l R e se rv e B a n k
and

reserve

ten d

g o ld

and

or

accou n t

m ade

and

e x p e n d it u r e s

Y o r k , th e g o ld w a s d e p o s ­

ch eck ,

by

above

of
In

rogram

a n n o u n ce m e n t o f th e

q u oted

w h o le .

T rea su ry

R eserve

r e d u c tio n
in

A ssay

a

th e

a c c u m u la t io n
as

P

reasu ry

by

im p o r ts w e r e r e c e iv e d a t N e w
ite d

th e

im p o r ts .

a

and

la tte r

39 p e r cen t fo r N ew

T

e w

T rea su ry

fu r th e r
banks

N

th e

in d ic a te d

th e

m em ber

reserves

upon

r e c e ip t s

b a n k fu n d s b e tw e e n

ern m en t

m oney

p reven t

of

g o ld

a n d in o th e r d is tr ic ts , a n d u p o n t r a n s fe r s o f c o m m e r c ia l

p e r io d s ,

of

excess

by

o u t s t a n d in g in c r e a s e d b y a b o u t $ 2 5 0 ,0 0 0 ,0 0 0 a n d c a u s e d

C it y b a n k s.

S ecreta ry

rea son

C it y

th e

m e n ts w a s a b o u t 6 0 p e r c e n t f o r a ll “ c o u n t r y ”

ffect

by

crea ted

N ew

Y ork

fo r

b a n k s d u r in g m ost o f 1 93 4

th e d is tr ic t as c o m p a r e d w ith

E

of

la r g e ly

G overn m en t

Y ork

h a lf o f 1 93 5 , a n d h as b e e n som ew h a t g r e a te r d u r in g 1 93 6 ,
th e

d e p o s its

th e

c la im s o n

b a n k s in

exceed

In

to

(a ll b a n k s

averaged

h a lf

w ill

g re a te r th a n fo r ban k s

o th e r p a r t s o f th e c o u n t r y , i f a s la r g e , a n d

th e N e w

The

som ew hat

a g a in s t

years.

p a st th ree y ea rs.
In

reserves

Y o r k C it y b a n k s a n d b a n k s in o th e r p a r ts o f th e c o u n t r y

and

in o th e r p a rts o f th e c o u n tr y .
L a rge

excess

re q u ir e d

N ew

Y ork

C it y e x c e ss re s e rv e s ro se t e m p o r a r ily

at

th e m id d le o f th e m o n th , d u e to a n e x c e s s o f r e d e m p tio n s
of

m a t u r in g

banks

fo r

d u r in g
C it y

T reasu ry

pu rch ases

th e n e x t te n

banks

c o lle c tio n s

w ere
and

b ills

of

over

new

d a y s th e

red u ced

th rou g h

T reasu ry

sh ort

te rm

u n ch an ged .

b ills

rose

m oney

tr a n s fe r s

by

th e

s e c u r itie s , b u t

th rou g h
o f bank

Y ork

in co m e
and

ta x

com m er­

R a t e s o n th e w e e k ly is s u e s

som ew h at
ra tes

p a y m en ts

reserv es o f th e N e w

r a p id ly

c ia l fu n d s to o th e r d is tr ic ts .
of

cash

G overn m en t

d u r in g

o t h e r w is e

D ecem ber,
w ere

but

g e n e r a lly

3

FEDERAL RESERVE BANK OF NEW YORK
a n n o u n c e m e n t a n d th e is s u e d a te f o r th e n e w
Dec. 31, 1935 Nov. 30, 1936 Dec. 29, 1936
Stock Exchange call loans.......................
Stock Exchange 90 day loans.................
Prime commercial paper— 4 to 6 months
Bills —90 day unindorsed.......................
Customers’ rates on commercial loans
(Average rate of leading banks at
middle of m on th )..............................
Treasury securities:
Maturing 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 273-274 day issue.........................
Federal Reserve Bank of New York
rediscount rate.......................................
Federal Reserve Bank of New York
buying rate for 90 day indorsed b ills.

1
*1M
M
S
A

M

*1

H

Vs

b o n d s d e c lin e d b y %

1
*1M
M

s e c u r itie s ,

D e c e m b e r 1 5, th e a v e ra g e p r ic e o f o u ts ta n d in g T r e a s u r y
to %

o f a p o in t, a n d in th e s u cce e d ­

in g w e e k th e re w a s a fu r th e r d r o p o f a b o u t Ys o f a p o in t.

H
o

T h e d e c lin e s in a ll o f th e in d iv id u a l 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 it h in 5 y e a r s r e p r e s e n t e d th e lo s s o f o n ly

1.75

1.71

1.71

N o yield

N o yield
0.03

N o yield
0 .2 9

a p a r t o f th e g a in b e tw e e n N o v e m b e r 2 a n d D e c e m b e r 8,
h ow ever,

as

is

show n

by

th e

p r ic e s

fo r

th e

fo llo w in g

T r e a s u r y b o n d s w h ic h a r e o u t s t a n d in g in la r g e s t v o lu m e .
0.73

0.61

10.84

2 .5 0

2.11

J2.15

Issue

0 .0 8

0.0 8

0 .2 9

ix

IX

IX

X

X

X

3 M’s of 1943-45................
3 M’s of 1944-46.................
4’s of 1944— 4 ....................
5
2 M’s of 1945-47.................
3’s of 1946-48.....................
2 M’s of 1951-54................
2 % ’s of 1955-60.................
2 M’s of 1956-59................

* Nominal
t Change of + 0.0 3 from previous yields due to inclusion of new 1M per cent
Treasury notes maturing December 15, 1941.
$ Change of + 0.0 2 in the average yield on United States Treasury bonds due to the
inclusion of the new 2 X per cent Treasury bonds of 1949-53.

Novem ber 2
108
108
114
104
106
101
102
101

December 8

12-32
8-32
11-32
12-32
3-32
17-32
20-32
3-32

110
110
116
106
108
103
104
102

December 22

15-32
13-32
9-32
24-32
1-32
4-32
15-32
21-32

109 20-32
109 20-32
115 20-32
106 3-32
107 18-32
102 18-32
103 23-32
102 4-32

I n th e la tte r p a r t o f th e m o n th T r e a s u r y b o n d s b e ca m e
M
The

o u ts ta n d in g

d u r in g
th a n
C it y

banks

C

a n k

a

lo a n s .

d u r in g

fu r th e r

The

th e

m em ber

in c r e a s e

in c r e a s e

fo u r

som ew h a t

r e d it

d e v e lo p m e n t in

D ecem ber w as

s e c u r ity

B

em ber

w eeks

in

bank

in

lo a n s

oth er

N ew

Y ork

th e

ended

c r e d it

D ecem ber

23

%

fir m e r , th e

a n d y± p o in t.

a vera ge

p r ic e

r e c o v e r in g

T h e n e w is s u e o f 2 %

b e tw e e n

p er cen t T rea su ry

b o n d s o f 1 9 4 9 -5 3 w h ic h w a s flo a t e d o n D e c e m b e r 15 w a s
q u oted

on

th a t

day

at

100

3 0 /3 2

and

at

101

4 /3 2

on

D ecem b er 29.
In

a m o u n t e d t o $ 1 3 8 ,0 0 0 ,0 0 0 , a n d t h e in c r e a s e f o r a ll o t h e r

th e

T reasu ry

n ote

m a r k e t, p r ic e s

d e c lin e d

p rop or­

w e e k ly r e p o r t in g m e m b e r b a n k s th r o u g h o u t th e c o u n t r y

t io n a te ly m o r e th a n in th e T r e a s u r y b o n d m a r k e t, a p p a r ­

in

e n tly r e fle c tin g in p a r t a d e cre a s e in th e “ r ig h ts v a lu e ”

th e fo u r w eek s

$ 1 3 8 ,0 0 0 ,0 0 0 .
th e

t im e

ended

T h is

o f

year,

c o n tr a -s e a s o n a l

D ecem ber

in c r e a s e ,

appears

in c r e a s e

to

in

23

a ls o

w h ic h
have

u n u su al

r e fle c te d

c o m m e r c ia l

t h e r e w e r e o t h e r m in o r e le m e n ts s u c h
era l fu n d s ”

a m ou n ted

w as

lo a n s o n

la r g e ly

lo a n s ,

a

a lth o u g h

a s s a le s o f “ F e d ­

to b o rro w e rs o th e r th a n b an k s.

a ls o m o d e r a te in c r e a s e s in

to
fo r

T h ere w ere

s e c u r itie s , in c lu d in g

of

th e

n earby

m a t u r it ie s

on

th e

r e a liz a tio n

th a t

th e

o p p o r t u n it ie s f o r e x c h a n g in g th e se n o te s in f u ll in to n e w
T reasu ry

o b lig a tio n s

T r e a s u r y ’s
The

w ill

r e q u ir e m e n ts

p r e m iu m s

on

th e

s id e r a b ly , t h e r e b y

b ecom e

fo r

1937

r e d u c in g

le s s

a ssu red

borrow ed

fu n d s

m a t u r it ie s
th e

as

n arrow ed

n e g a tiv e

th e

decrease.

y ie ld s

con ­

p r e v a il­

lo a n s t o G o v e r n m e n t s e c u r it y d e a le r s , a n d a n e t in c r e a s e

i n g o n t h e s e is s u e s , a n d f o r t h e l o n g e r m a t u r it i e s y i e l d s

of

a ll

in c r e a s e d

so m e w h a t;

fo r

r e p o r t in g b a n k s in th e fir s t h a lf o f D e c e m b e r , r e fle c t in g

F ebru ary

1938

w a s s e llin g

pu rch a ses

c e n t o n D e c e m b e r 1 d e c lin e d to a p r ic e w h ic h

$ 1 3 7 ,0 0 0 ,0 0 0

The

of

th e

in c r e a s e

e n tir e ly

in

T reasu ry
banks

in

new

in

b ills

s e c u r ity

T reasu ry

is s u e s

h o ld in g s

on

G overn m en t

Y ork,

fr o m

N ew

th e

th e ir

h o ld in g s

p u rch a ses

A lt o g e t h e r ,

to ta l

lo a n s

and

w as

m a t u r it ie s

N ew

th e

15.

h o ld in g s

as

of

of

of

D ecem ber

s e c u r ity

o u t s id e

banks

exceeded

s e c u r itie s .

G overn m en t

Y ork

new

of

C it y

T reasu ry

in v e s tm e n ts

of

w h ic h

e x a m p le ,

th e

y i e l d t o 0 .3 0 p e r c e n t o n D e c e m b e r 2 4 .
on

a ll o u t s t a n d in g n o te s

h a d d e c lin e d fr o m

of

1 to

n ote

is s u e

due

o f 0 .0 2

a t a y ie ld

per

r a is e d th e

T h e a v era g e y ie ld

5 year

m a t u r it y

w h ic h

0 .8 1 t o 0 .6 2 p e r c e n t b e t w e e n N o v e m ­

b e r 2 a n d D e c e m b e r 8 r o s e t o 0 .8 7 p e r c e n t o n D e c e m b e r
2 4 , a f t e r a d ju s t m e n t f o r th e e ffe c t o f a d d in g th e D e c e m ­

a ll r e p o r t i n g m e m b e r b a n k s r o s e $ 5 4 0 ,0 0 0 ,0 0 0 d u r i n g t h e

ber

f o u r w e e k s e n d e d D e c e m b e r 2 3 to th e h ig h e s t le v e l s in c e

T r e a s u r y n o te s w a s c o n s id e r a b ly m o r e t h a n th e in c r e a s e

A p r il 1931.

in y ie ld s

A d ju s t e d
show ed
w eeks

dem and

d e p o s its

a n e t in c r e a s e
ended

of

D ecem ber

of

th e

$ 1 6 1 ,0 0 0 ,0 0 0

16,

and

r e p o r tin g
d u r in g

rea ch ed

banks

th e

th ree

h ig h e r

a

le v e l

th a n e v e r b e fo r e , n o tw ith s ta n d in g h e a v y w ith d r a w a ls o f
cu rren cy
d e c lin e d

fr o m

th e

banks

som ew hat

in

th e

fo r

th e

h o lid a y

fo llo w in g

tra d e,

but

15

n ote
on

on

P r ic e s

of

o vern m en t

U n ite d

S ta te s

S

e c u r it ie s

T rea su ry

bon d s,

w h ic h

had

2.

n otes

The

th e

bonds

is s u a n c e

8 0 0 .0 0 0

of

ch an ge fo r

of

1%

or

c a lla b le

w ith in

5

y e a r s w a s n e a r ly 2 p o in t s a b o v e th e le v e l w h ic h e x is te d a t
th e b e g in n in g o f N o v e m b e r .

O n D e c e m b e r 7 th e T r e a s u r y

a n n o u n c e d th e d e t a ils o f its q u a r t e r ly fin a n c in g , f o l l o w ­
in g

a n e a r lie r p r e lim in a r y

w ith
b ilit y

w h ic h
of

a

th e

S ecreta ry

fu r th e r

r e q u ir e m e n ts .




In

a n n o u n c e m e n t, in
c a lle d

in c r e a s e

th e

w eek

in

a tte n tio n
m em ber

b e tw e e n

th e

to

c o n n e c tio n
th e

bank
d a te

p o s s i­

reserv e
of

th e

F eb ru a ry

th e p u b lic
th e

r is e

in

advan ced
fr o m

days

fir m e r

n otes.

of

y ie ld s
o n ly

2 .3 2

of

w ith

1 9 4 9 -5 3

cen t

on

ca sh

of

on

fr o m

p er cen t

th e
a

of

m on th ,

con sequ en t

T rea su ry

1937.

of

T reasu ry
per

cen t

2 %

and

bonds

n otes

A lt h o u g h

th e

s u b s c r ip t io n s ,

th e

n o te s m a t u r in g

of

and
1941

D ecem ber
a

to ta l

of

$ 2 0 6 ,in

ex­

15, 1936
$ 1 ,5 0 9 ,-

s e c u r it ie s w a s is s u e d , th e n e t a d d it io n

d e b t w a s o n ly

15

fin a n c in g

$ 7 5 1 ,4 0 0 ,0 0 0

$ 5 5 1 ,2 0 0 ,0 0 0

15,

r e d e m p tio n

D ecem ber

of

per

and

not due

c lo s in g

q u a r te r ly

T rea su ry

4 0 0 .0 0 0 o f n e w

o f bonds

th e

becam e

a llo t m e n t

th e

p r ic e

The

b o n d s , w h ic h

In
a ls o

D ecem ber

fu r t h e r in th e fir s t w e e k o f D e c e m b e r , a n d o n D e c e m b e r 8
a verage

average.

d e c lin e in y ie ld s .

th e

s h o w n a c o n s id e r a b le r is e in N o v e m b e r , a d v a n c e d s lig h t ly

th e

T reasu ry

N ovem ber

T rea su ry

T rea su ry
G

to

2 .1 0 t o 2 .1 5 p e r c e n t , a f t e r d r o p p i n g

in c lu d e d

w eek.

is s u e

of

and

a b o u t $ 3 5 0 ,0 0 0 ,0 0 0 , b e c a u s e

$ 4 0 0 ,0 0 0 ,0 0 0
exch an ges

fo r

of

T rea su ry

o u ts ta n d in g

b ills

to
of
on

T reasu ry

O f th e T r e a s u r y n o te s m a t u r in g D e c e m b e r 15 a n d

F ebru ary

15 th a t w ere e x ch a n g e d fo r n e w

is s u e s 7 3 p e r

ce n t w e re e x c h a n g e d f o r th e b o n d s a n d o n ly 27 p e r c e n t
fo r

th e

n otes,

m a k in g

th is

th e

s m a lle s t

n ote

is s u e

ou t­

MONTHLY REVIEW, JANUARY 1, 1937

4
s ta n d in g .

In

a d d it io n ,

th e

T rea su ry

c o n tin u e d

d u r in g

r o a d s to c k s , 5 p e r c e n t in p u b lic u t ilit ie s , a n d 4 p e r c e n t

D e c e m b e r t o is s u e e a c h w e e k $ 5 0 ,0 0 0 ,0 0 0 m o r e T r e a s u r y

in

b ills

w a s s o m e w h a t le s s

th a n

m a tu red .

b ills h a s b e e n

The

a rra n g ed

m a t u r it y

of

th ese

a d d it io n a l

s o t h a t $ 1 0 0 ,0 0 0 ,0 0 0

fa ll d u e o n

M arch

1 8 — d a y s o n w h ic h

heavy.

T h e r e w a s a s lig h t s t iffe n in g o f r a te s o n T r e a s u r y

v io u s

b ills

d u r in g

in c o m e t a x c o lle c t io n s w ill b e

D e c e m b e r, th e

104

day

is s u e

d a te d

D ecem ­

in

som e

d a te d

D ecem ber

30

y ie ld e d

0 .1 0 9

per

c la s s e s

m ost

ber,

is s u e

th e
in

and

grades

w h o le

th e

D ecem ber
of

ca ses

p r ic e s

e ith e r

r e a t t a in e d p r e v io u s h ig h s .

th e

day

O n

a c t iv e

sto ck

th a n

m arket

in

th e

p re­

d o m e s tic

corp ora te

bonds

a d v a n c e d f u r t h e r d u r in g th e fir s t h a lf o f D e c e m b e r , a n d

b e r 2 b e i n g s o ld a t a n a v e r a g e r a t e o f 0 .0 4 0 p e r c e n t w h ile
78

sh a res.

m on th .

M ost

1 6 , $ 1 0 0 ,0 0 0 ,0 0 0 o n M a r c h 1 7 , a n d $ 5 0 ,0 0 0 ,0 0 0 o n

M arch

in d u s tr ia l

h ow ever,

in c r e a s in g

d e c lin e

occu rred

rea ch ed
In

new

h ig h

ir r e g u la r ity

in

le v e ls

or

th e s e co n d h a lf o f D e c e m ­

th e

d e v e lo p e d

corp ora te

bond

and

m a rk et,

c e n t ; lik e w is e y ie ld s o n th e 2 7 3 d a y is s u e s m o v e d u p f r o m

c o in c id e n t w it h th e r e c e s s io n in th e G o v e r n m e n t s e c u r it y

0 .0 8 8 t o 0 .2 9 4 p e r c e n t .

m a rk et.

B
A

s lig h t

C

il l s a n d

in c r e a s e

in

o m m e r c ia l

tr a d in g

P

th e

m a te r ia lly

p r e v a ile d

fo r

th e

m any

ch a ra cte r
m on th s.

p r e v io u s
occu rred

o f th e

A s

a v a ila b le

sh ow ed

bond

avera ges

r e c e s s io n s

of

in

is

N e w

m a rk et th a t has

u s u a lly

th e

case,

F in a n c in g

$ 7 5 0 ,0 0 0 ,0 0 0 , w e r e i n t h e l a r g e s t v o l u m e s in c e J u n e w h e n
about

In

N ovem ber

a

fu r th e r

r is e

of

$ 4 0 0 ,0 0 0 ,0 0 0

$ 1 9 ,0 0 0 ,0 0 0 t o $ 3 4 9 ,0 0 0 ,0 0 0 o c c u r r e d i n t h e t o t a l v o lu m e

and

of

A lt h o u g h

o u ts ta n d in g

b ills w h ic h , h o w e v e r , r e m a in e d

0 0 0 s m a lle r t h a n
w as due

c h ie fly

a yea r ago.
to

T h e in c r e a s e

a s e a s o n a l in c r e a s e

of

$ 3 8 ,0 0 0 ,-

over

O cto b e r

$ 1 0 ,0 0 0 ,0 0 0

in

la r g e r

$ 3 0 0 ,0 0 0 ,0 0 0
th e

f o r th e p u r p o s e
in g

la r g e r

m a jo r

s e c u r itie s

D e c e m b e r flo ta tio n s w e r e

th a n

p art

of

th e

p r e c e d in g

m on th

in

th e

o f p r o v id in g

c a r r y in g

in

th a n

D ecem ber

1935.

new

is s u e s

h ig h e r

ra tes

of

A t

b e u s e d in w h o le o r in p a r t f o r f u t u r e n e w

about

end

of

N ovem ber

$ 3 0 9 ,0 0 0 ,0 0 0

of

a c c e p tin g

b ills

and

in s tit u t io n s

oth er

h e ld

in v e s to r s

h e ld

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

d itu r e s
p la n t

(Millions of dollars)

F rom

N ov. 1935

Oct. 1936

Nov. 1936

Im p o rt..........................................................
E xport..........................................................
Dom estic shipment....................................
Dom estic warehouse cred it.....................
Dollar exchange..........................................
Based on goods stored in or shipped be­
tween foreign countries........................

105
84
11
100
3
84

77

76

T ota l.................................................

387

330

349

110
67
10
65
1

112
77
13
70
1

c o m m e r c ia l p a p e r

e r s ’ lis t s f o r s a le .
ce n t,

but

th ere

C o m m e r c ia l

to

exceed

som e

h ig h

paper

to b e s o ld

c h ie fly

tr a n s a c tio n s

grade

d e a le r s

paper

at

%

e n tered

rep orted

a

at %
per

th e

to ta l

per
cen t

m a rk et.

of

$ 1 9 1 ,-

3 0 0 .0 0 0 o f p a p e r o u t s t a n d in g a t t h e e n d o f N o v e m b e r , a s
com p ared

w ith

$ 1 9 8 ,8 0 0 ,0 0 0

a m on th

e a r lie r

and

o ffe r in g

o p e r a t io n
C om pany,

d eb en tu res

3 .1 5 p e r c e n t .

th e

$ 1 7 8 ,-

is s u e

y ie ld
fo r
of

of

3 .0 0

in

D ecem ber.

th e

O f

A m e r ic a n

p u b lic ly

of

year

o ffe r e d

flo a te d

3*4

per

c e n t, w h ic h

year

at

years

on

a

la r g e

corp ora te

O k la h o m a

$ 2 6 ,8 0 0 ,0 0 0

y ie ld in g

3 .6 0

p r ic e s

m oved

q u ite

ir r e g u la r ly

d u r in g

h a lf o f D e c e m b e r, a r e c e d in g te n d e n c y

in

th e

th e fir s t w e e k

b e in g fo llo w e d b y so m e fir m in g in th e s e c o n d w eek .
m id -D e c e m b e r

3 .6 1

and

per

E le c tr ic

L ig h t

and

and

Pow er

of

at

B y

re p r e s e n tin g

in

of

of

In

to ta le d

about

w e r e s lig h t ly lo w e r a n d u t ilit y s to ck s w e r e little c h a n g e d .

o f N ew

Y ork

In

t u t io n s

$ 6 0 ,0 0 0 ,0 0 0

th e

th ir d

w eek

of

th e

m on th ,

o f D ecem b er,

but

s to ck s

show ed

a ra th er

g e n e r a l d e c lin e , a v e r a g e p r ic e s d r o p p in g 4 p e r c e n t d u r ­

th e

S ta te ,

y ie ld in g
35

of

T h ere

ir r e g u la r

D e tr o it a n d

a g a in

t e n d e n c y s lig h t ly h ig h e r .
tow a rd
h ig h s

th e

clo s e

in d ic a te s




of

th e

average

A

p r e v a ile d

w ith

th e

gen eral

c o m p a r is o n o f p r ic e s q u o te d

year

w ith

d e c lin e s

of

th e
11

N ovem ber
per

cen t

in

$ 4 4 ,0 0 0 ,0 0 0

10
per

bonds
G as,

B a ltim o r e
bonds

35

H ou ston
y ie ld in g

C om pany

of

I n th e a g g re g a te

c o r p o r a tio n

$ 8 0 ,0 0 0 ,0 0 0

p art

year

30

of

3 .9 5

C o n s o lid a te d

year

w ere

w as

fin a n c in g

sto ck

S ears,

is s u e s

R oebu ck

m u n ic ip a l,

and

fa rm

lo a n

fie ld ,

is s u e s

$ 1 7 0 ,0 0 0 ,0 0 0

fo r

D ecem ber.

The

S ta te

a llo t t e d t o a la r g e g r o u p
of

6

m on th

ta x

o f fin a n c ia l in s ti­

a n tic ip a tio n

n otes,

o n ly p a r t o f w h ic h w e r e s u b s e q u e n tly r e o ffe r e d p u b lic ly .

in g th is p e r io d , a n d in th e s u b s e q u e n t p a r t o f th e m o n t h
m ov em en ts

d o m e s tic

w h ic h

O th er

C om pany

c e n t , $ 2 7 ,5 0 0 ,0 0 0
30

to

y ie ld

m on th

$ 9 ,5 0 0 ,0 0 0

C om pany

per

lo w

a n d C o m p a n y s to c k to b e is s u e d to in c r e a s e w o r k in g c a p ita l.

sh ares

o p e n in g

per
y ie ld

p r ic e

is s u e .

E le c tr ic

C om pany

C om pany

la r g e

r a ilr o a d

th e

w ere

$ 5 7 5 ,0 0 0 ,0 0 0

an n ou n ced,

h ig h e r

at

sto c k s

and

re fu n d ­

a

new

th e

$ 2 3 ,0 0 0 ,0 0 0

3 .0 6

a

com p an y

P ow er

y e a r b o n d s y ie ld in g

w as

to

$ 2 5 ,0 0 0 ,0 0 0
bonds

cen t a n d

E d is o n

ce n t,

s lig h t ly

th a n

in d u s tr ia l

fir s t

is s u e

secon d
3 %

102

c o r p o r a tio n

is s u e s

G as

O h io

per

a

cen t

rep resen ted

y e a r d e b e n tu re s o f th e sam e

about
S to ck

th is

T e le p h o n e
30

D e l a w a r e b o n d s y i e l d i n g 4 .1 1 p e r c e n t .

M a rk e ts

on

T e le p h o n e

r e fu n d in g

3 .3 4 p e r c e n t , a n d $ 2 0 ,0 0 0 ,0 0 0 A r m o u r a n d
S e c u r ity

to

c a p ita l e x p e n ­

A m e r ic a n

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

y e a r b o n d s, y ie ld in g
ce n t,

are

e x p e n d it u r e s

$ 1 6 0 ,0 0 0 ,0 0 0

C om pany

la r g e r

$ 3 5 ,0 0 0 ,0 0 0

c a p ita l

th ere

w h ic h

m ade.

s iz e , t h e

by

w ere

30

per

recen t
th e

of

of

L a te r in th e m o n th th e P a c ific T e le p h o n e

T e le g r a p h

L ig h tin g

4 0 0 .0 0 0 a y e a r a g o .

of

C om pany

la r g e s t

p roceed s

a lr e a d y

v ie w p o in t

th e

and

A v e r a g e g r a d e p r im e f o u r to s ix m o n t h
w ere

u n u s u a lly

th e

T e le g r a p h

cen t

th e

r e im b u r s e m e n t

T e le g r a p h

d r a w in g s th a t ca m e in t o d e a l­

c o m m e r c ia l p a p e r c o n tin u e d
w hen

c o n tin u e d

is s u e s

r e fu n d in g

D u r in g D e c e m b e r in v e s tm e n t d e m a n d b y th e b a n k s fo r
m arket

of

e q u ip m e n t

and

in g

open

or

and

w as

Type of acceptance

m o d e ra te a m ou n ts o f n ew

num ber

s o ld

o u tsta n d ­

in te r e s t,

w ere

a

w ere

fu n d s to re d e e m

e x p o r t b ills a n d $ 5 ,0 0 0 ,0 0 0 in d o m e s t ic w a r e h o u s e c r e d i t s .
th e

of

fro m

N e w s e c u r itie s o ffe r e d d u r in g D e c e m b e r , t o t a lin g a b o u t

th a n

e a r lie r .

end

h ig h s .

t h e a m o u n t w a s $ 7 8 5 ,0 0 0 ,0 0 0 .

m on th

th e

p o in t

th e

d e a le r s ’ p o r t fo lio s a t th e y e a r e n d w e r e s o m e w h a t la r g e r
a

near

about

aper

a c t iv ity

b ill m a r k e t d u r in g D e c e m b e r b u t n o t o f s u c h e x te n t as to
ch an ge

The

m on th

s o ld

w ere

a ls o

s iz a b le

C h ic a g o .

$ 1 0 ,0 0 0 ,0 0 0

of

s e c u r ity

is s u e s

T he P ort o f N ew
40

year

bonds

fo r

by

th e

Y ork

c itie s

of

A u th o r ity

c o n s tr u c tio n

of

1936

p a r t o f th e m id t o w n H u d s o n E iv e r T u n n e l ; th e s e s e c u r i­

r a il­

t ie s w e r e p u b l i c l y o f f e r e d a t a p r i c e t o y i e l d 2 .8 0 p e r c e n t .

FEDERAL RESERVE BANK OF NEW YORK
F ed eral
th e

In te r m e d ia te

s a le

of

p a r t ia l

C r e d it

$ 2 4 ,4 0 0 ,0 0 0

r e p la c e m e n t

D ecem ber

of

B ank
sh ort

fin a n c in g
term

m a t u r it ie s

in c lu d e d

of

fir s t

rea ch ed

a d van ced
m on th ,

to

p art

th e

of

th e

m arket

p r e m iu m s

h ow ever,

on

$ 3 3 ,5 0 0 ,0 0 0

$ 9 ,6 0 0 ,0 0 0

over

th e

q u ic k ly

is s u e

som e

ra te c o u p o n

new

is s u e s

absorbed

p r ic e s .

w ith

c o in c id e n t

p r ic e s , s e v e ra l o f th e lo w

m on th ,

w ere

L a te r

e a s in g

and

in

The

p r in c ip a l

T hese

E u rop ean
d o lla r

q u oted

m a rk et.
at

In d ia ,

$ 4 ,1 0 0 ,0 0 0

im p o r ts

w ere

o f g o ld

fr o m
and

fro m

a n arrow

tow a rd

quo­

C anada,

scra p

earm ark

g o ld ,

by

fo r

of N ew

sou rces,
and

th e

in

N ovem b er,

of

end

w as

fr a c ­

r e v a lu a tio n

T h e F r e n c h f r a n c r e c o r d e d a s im ila r s m a ll g a in

of

o v e r th e sa m e p e r io d , r is in g fr o m

$ 1 ,1 3 5 ,0 0 0 ,0 0 0 ,

been

h ig h e r

d o m e s tic

c o n s e q u e n tly

D ecem ber

$ 0 .0 4 6 6 %

at

1935, and

g o ld

sto ck

fo llo w in g

an

in c r e a s e

o f $ 1 ,3 9 0 ,0 0 0 ,0 0 0
p r o fit

of

r is e n

s lig h t ly

in

1936

by

w e e k ly

a B r itis h

of

$ 1 ,8 9 0 ,0 0 0 ,0 0 0

m ore

th a n

th e

F ren ch

s y n d ic a te

th e

$ 0 .5 4 7 6

u pw ard

th e

m on th ,

w h ic h

in s ta lm e n t s ,

of

about
C e n tra l B a n k

to $ 0 .0 4 6 7 ]^ .

th e

had

no

The

£ 4 0 ,0 0 0 ,0 0 0

T reasu ry

in

d ir e c t

F eb ru a ry

e ffe c t

D u tch

d u r in g
le v e l

v ir tu a lly

th e

ten d en cy
g u ild e r
th re e

r e m a in e d

it

fir s t

fir m .

u n ch an ged

d u r in g

show n

rose

w eeks

on

th e

a p p r o x im a te ly

th e

p re­

$ 0 .5 4 4 0

to

D ecem ber,

of

The

th e

in

fr o m

at

S w is s

w as

a t $ 0 .2 2 9 9 .

m on th

fr a n c

The

b e lg a w e a k e n e d a t th e e n d o f th e m o n th fr o m

$ 0 .1 6 9 2 t o

$ 0 .1 6 8 6 % .

R a te

C h a n g es

E ffe c t iv e D e c e m b e r 3 th e d is c o u n t ra te o f th e N e th e r ­

c o n tin u e d to n a r r o w , th e q u o ta tio n f o r th re e m o n th
tra cts d e c lin in g fr o m
annum

to

per

p e r cen t on

c o m b in e d
c o v e r in g
flo w

B ank

of

4

ce n t.

per

N orw ay

P r o d u c tio n
A c c o r d in g
b a n k , th e

th e e q u iv a le n t o f l i t

ce n t, as co n tr a s te d
O cto b e r 2.

per

w ith

a

con ­

cen t p er

d is c o u n t

of

T h is m o v e m e n t r e fle c te d th e

e ffe ct o f s e v e ra l r e la te d
o f s h o r t p o s itio n s in

o f fu n d s to A m s te rd a m

p r e v io u s

2 p e r c e n t, a le v e l

d is c o u n t

ra te

had

O n th e 7 th , th e

ra te

been

fr o m
in

3%

fo rce

to

s in c e

c a p ita l

fo r m e r ly

m a rk ets,

a p p lie d

by

and
th e

fa c to r s , in c lu d in g

D u tch

fr o m

th e

exch a n g e, a retu rn

b o th L o n d o n

and N ew

th e

rem oval

N e th e r la n d s

of

B ank

s u p e r v is io n
to

fo r w a r d

e x c h a n g e d e a lin g s a n d to th e e x t e n s io n o f fo r e ig n c r e d it s
D u tch

c o m m e r c ia l b a n k s.

fr a n c s

th e

a ls o

fo rw a r d

cen t p er an n u m
about

%

v ir tu a lly

b e lg a

a n d
to

T ra d e

The

fo rw a r d

d is a p p e a r e d .

rose

s o m e w h a t,

d is c o u n t

The

on

p r e m iu m

r e a c h in g

%

in

1936

a p r e lim in a r y
of

c o m p ila t io n

p r o d u c tio n

and

m ade b y

th is

tra d e

th is

in

1935

to ta l.

T h e e s t im a t e d b u s in e s s v o lu m e f o r

1936 w as

a b o u t 4 5 p e r c e n t g r e a te r th a n in th e lo w y e a r 1 9 3 2 , a n d

th a t

y e a r ’s

to ta l,

1 9 3 0 , c o m in g w ith in

but

r e m a in e d

17

per

3 p er cen t

cen t

b e lo w

of
th e

a g g re g a te fo r th e p e a k y e a r , 1 92 9 .
T h e ra te o f r e c o v e r y in p r o d u c tio n a n d tr a d e h a s b e e n
c o n s id e r a b ly

a c c e le r a te d

a c c o m p a n y in g d ia g r a m

in

th e

past

in d ic a te s .

tw o

years,

T h is d ia g r a m

as

th e

is b a s e d

o n t h is b a n k ’s fin a l e s tim a t e s o f th e v o lu m e o f p r o d u c t i o n
a n d tra d e f o r th e y e a rs b e tw e e n
p u te d fr o m
p r in c ip a l

at

its

2 y 2 to

c o u n tr y in 1 9 3 6 w a s a p p r o x im a te ly 15 p e r ce n t a b o v e th e

and

S w is s

r a is e d

to ta l v o lu m e

p r e lim in a r y

on

The

fro m

M a y 1933.

Y o r k , th e d e v e lo p m e n t o f e a s ie r c o n d it io n s in th e m o n e y

by

w a s lo w e r e d

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

D u r in g D e c e m b e r , th e fo r w a r d d is c o u n t o n th e g u ild e r

6%

o f th e

$ 2 ,8 0 0 ,0 0 0 ,0 0 0 .

exch an ges.

C o n t in u in g
v io u s

an

a s a w h o le

1 9 3 4 , e x c lu s iv e

la n d s B a n k

fo r e ig n

n e w ly
w as

a p p r o x im a te ly

r e a c h e d o n ly t w ic e p r e v io u s ly s in c e 1 8 4 2 .

to

th ere

F o r th e y e a r

has

1 0 5 .1 7 t o 1 0 5 .1 3 f r a n c s p e r p o u n d d u r i n g t h e m o n t h .
ex te n d e d

of

accou n t at

Y o r k , a n d b y r e c e ip t s

T h e L o n d o n - P a r is r a t e a ls o h e ld w it h in a n a r r o w r a n g e o f

c r e d it

H ong­

r e le a s e

fo r e ig n

in c lu d in g

f o r th e m o n th .

m on eta ry

had

t io n a lly

in

and

C oa st.

s u p p le m e n t e d

fr o m

oth er

o f th is c o u n t r y
th e

w h ic h

s te r lin g ,

c lo s e

th e

g e n e r a lly

r a n g e in a c o m p a r a tiv e ly

pound

at th e

w ere

D e c e m b e r , a lth o u g h

$ 4 .9 1 % .

rep a y m en t,

to ta le d
E n g la n d .

A u s t r a l i a a n d $ 4 0 0 ,0 0 0 f r o m

o n th e W e s t

th e F e d e r a l R e se rv e B a n k
g o ld

sto ck

fr o m

S w itz e r la n d w e r e r e c e iv e d a t N e w Y o r k ,

$ 2 ,6 0 0 ,0 0 0
of

g o ld

$ 3 3 ,9 0 0 ,0 0 0

w ere

is s u e s w h ic h

c u r r e n c ie s

d u r in g

The

$ 4 .9 0 %

m on eta ry

in c r e a s e o f a b o u t $ 7 5 ,0 0 0 ,0 0 0 i n t h e m o n e t a r y g o l d s t o c k

ta tio n s m o v e d w it h in
in a c t iv e

fr o m

k o n g a r r iv e d

th e

E x ch a n g e s

a g a in s t th e

th e
w h ic h

a n d $ 1 ,1 0 0 ,0 0 0 f r o m

m in e d

fir m

of

bond

in

p r ic e d v e r y c lo s e t o th e m a r k e t t e n d e d to m o v e m o r e s lo w ly .
F o r e ig n

a ffe c t in g

$ 5 2 ,4 0 0 ,0 0 0 ,

$ 3 ,3 0 0 ,0 0 0 f r o m

th e

w h ic h

Im p o rts

in

d eb en tu res,

15.

D u r in g

of

5

d a ta o n

e s tim a te

grou ps

of

1919

and

1935, as co m ­

o v e r 2 0 0 b u s in e s s s e r ie s , a n d
fo r

d a ta

1936
w h ic h

a n d h a v e in th e p a s t g iv e n fa ir ly

com p u ted
are

fr o m

a v a ila b le

o n th e
th ose

p r o m p tly

c lo s e in d ic a t io n s o f th e

m o v e m e n t o f th e m o r e c o m p r e h e n s iv e d a ta .

T h e p r e lim i-

PERCENT

125 i------------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -------------------------- ------ ------

per

in m id -D e c e m b e r a n d c lo s in g th e m o n t h

per

ce n t.

T h ree

m on th

fo rw a r d

co n tra cts

in th e F r e n c h fr a n c r e a c h e d a d is c o u n t o f a p p r o x im a te ly
9 %

p e r ce n t a t th e e n d o f D e c e m b e r.

On

D ecem ber

n ou n ced

a

10,

ch an ge

th e

in

p o u n d s te r lin g fr o m

A r g e n tin e

its

o ffic ia l

G overn m en t

s e llin g

ra te

fo r

an­
th e

17 p e so s to 16 p e so s, o r th e e q u iv a ­

le n t , a t $ 4 .9 1 p e r p o u n d

s t e r lin g , o f 3 0 .7 c e n t s p e r p e s o .

T h e o ffic ia l b u y in g r a te r e m a in e d u n c h a n g e d a t 15 p e s o s
per pound.
m arket

M e a n w h ile , th e r a te f o r th e p e s o in th e fr e e

a d van ced

d u r in g

D ecem ber

fr o m

28

ce n ts

to

3 0 .6 c e n ts .
5 0 ___ I___ L J ___ 1
G o ld
A

M o v e m e n ts
m o d e r a te ly

im p o r te d

in to




la r g e
th e

1

1

!

I

I

I

I

1 1 1

1919*20 '21 ’2 2 ’23 ’24 ’25 '26 ’27 ’28 ’29 ’30 ’31 ’32 ’33 ’3 4 ’35 ’36

am ount

U n ite d

of

g o ld

S ta te s

c o n tin u e d

d u r in g

to

be

D ecem ber.

Index of General Production and Trade in the United States (Prelim­
inary estimate for 1936 based on principal series— ratio
scale used to show proportionate changes;
1923-25 average = 100 per cent)

MONTHLY REVIEW, JANUARY 1, 1937

6

n a r y e s tim a te f o r 1 9 3 6 w a s a r r iv e d a t b y u s in g s e r ie s o n

in g o t

th e

te n d e n c y in m o st y e a r s , a n d r e a c h e d a h ig h e r le v e l th a n

p r o d u c tio n

tu ra l
and

of

m a n u fa ctu re s

p r o d u c tio n ,

ra ilr o a d

m is c e lla n e o u s

A ctu a l
w ere

fig u r e s

used,

car

fr e ig h t,

fo r

at

tog eth er

and

lo a d in g s

and

of

fir s t

11

e s tim a te s

a g r ic u l­

m e r c h a n d is e

c o n s tr u c tio n

le a s t th e
w ith

m in e r a ls ,

co n tra cts.

m on th s

fo r

th e

of

1936

r e m a in in g

la r g e s t

any

p e rce n ta g e

in c r e a s e

d u r in g

1936

w as

in

expanded

p r e v io u s

a u to m o b ile

3

per

N ovem b er.

a s s e m b lie s

A

as

th e h ig h
of

ce n t,

in

co n tra st

m arked

v o lu m e

m o d e ls w a s a tt a in e d , a n d a n

ra te

p o r tio n o f th e y e a r.
The

in

ou tp u t

g a in

to

occu rred

p r o d u c tio n

a dvan ce

th e

of

in

new

o f 3 p er cen t over

le v e l o f th e p r e c e d in g m o n t h w a s s h o w n in th e
c o n s u m p tio n

of

h ig h e s t r a te o n r e c o r d .

cotton

by

t e x t ile

m ills

to

th e

I n c r e a s e s a ls o o c c u r r e d in p i g ir o n ,

c o n s t r u c t io n a c t iv it y , w h ic h , a lth o u g h 4 3 p e r c e n t la r g e r

le a d , z in c , a n d c o a l o u t p u t , n e w s p r in t p a p e r p r o d u c t io n ,

th a n in 1 9 3 5 , w a s o n ly a b o u t o n e h a lf th e v o lu m e f o r th e

a n d a c t iv it y a t m e a t p a c k in g p la n ts .

peak yea r, 1928.

rose

a

R e s id e n tia l b u ild in g c o n tin u e d to sh o w

s o m e w h a t la r g e r

th ere

w ere

a ls o

co n s tr u c tio n .

r e la tiv e

g a in

s u b s t a n t ia l

th a n

oth er

in c r e a s e s

in

c la s s e s ,

oth er

but

typ es

of

T h e n e x t la r g e s t in c r e a s e , 1 7 p e r c e n t, w a s

in th e o u t p u t o f m a n u fa c t u r e s , w h ic h

in

1935

le d

in th e

s h a r p ly

J u ly ,

and

th a n

in

th a t

1 9 2 9 b u t r e m a in e d

yea r.

P r o d u c tio n

of

m a in e d

w a s a ls o t h e la r g e s t s in c e 1 9 2 9 .
and

m is c e lla n e o u s

a m ou n ted
th e

to

12

p r e v io u s

per

yea r.

or

T h ese

m in e r a ls

and

1935 an d

car

lo a d in g s

c o n s id e r a b ly

fr e ig h t

w as

3

som e

per

cen t

11 p e r

of

in

fo r

1936

th a n
th e

in

above

th e

lo w

p r o d u c tio n

year

1935, b u t

th e p e a k y e a r

t r u c k c r o p s t o t a l e d le s s t h a n in

in

1936

r e m a in e d

1931.

F ie ld

and

1 9 3 5 , d u e c h ie fly to c u r ­

t a ile d p r o d u c t io n o f g r a in s , a p p le s , p o t a t o e s , a n d t o b a c c o ,
but

th ere

liv e s to c k

w as

a

s u b s t a n t ia l

in c r e a s e

m a r k e te d , r e fle c tin g

an

o f h o g s a n d c a ttle , w h ic h in
due

to

d rou gh t

fo rce d

a reas,

s p r in g p ig

som e

th e

in c r e a s e

am ount

in

of

m a r k e t in g s

of

w as

liv e s to c k

due

to

th e

fr o m

la r g e r

th e
1936

crop.

appears

d en cy

of

fr o m

a v a ila b le

in d u s tr ia l

ex ten d ed

in to

w hen

d a ta

p r o d u c tio n

D ecem b er.

o p e r a t io n s

th a t

th e

e v id e n t

J u d g in g

e s tim a te s , s te e l m ill a c t iv it y
ber

r is in g

in

79

fro m

per

ten ­

N ovem ber
th e

w as

in

r e la te d

in

to

cen t

s e a s o n a l a c t iv ity

o p p o s ite te n d e n c y

s p e c ia l

a n tic ip a tio n

of

in

in d u s tr ie s .

la b o r

d iffic u ltie s ,

th e r,

and

th e

w e ll s o ld
is h e d

of

c a p a c ity .

1935

p o s itio n

v o lu m e

tio n

sam e

of

p e r io d

o f th e

b itu m in o u s
The
tio n

of

S y ste m
1 9 2 3 -2 5

re­

p r e v a ilin g

1936

N ov.

Fuels
Bituminous coal............................................
Anthracite coal..............................................
Petroleum, cruder.........................................
Petroleum products......................................
Electric p ow er...............................................

Oct.

N ov

86
100
47
79

94
102
57
82

99
115
59
87

102
104

Automobiles
Passenger cars................................................
M otor tr u c k s .................................................

Sept.

69
81
54
71

Metals
Pig iro n ...........................................................

117
119

79
57

94 p
93 p

87
58
88 p
73
94 p

97 p
77 p
87 p

74
55
86r
70
87

Textiles and Leather Products
Cotton consum ption....................................
W ool consum ption........................................
Silk mill a ctiv ity ...........................................
R ayon deliveries*..........................................

87
70
85r
72
94

86
121
63
99
110
81
87
90
49
93
81r
99

Foods and Tobacco Products
M eat packing.................................................
W heat flour....................................................
T obacco products..........................................

105
102
64
118
109

94 p

102
102
65
97
113p

106

94
77
94

101
80
93

108
82
95

Newsprint paper r .........................................
Machine to o ls................................................

65
104
80r
119

70
107
82r
127

74

p Preliminary
In d e x e s

by

at
of

th e

A lt h o u g h

cotton

63p
92

th e

reta rd ed

in d u s t r y

cu rren t

s a le s ,

w as

ch an ge
and

and

som ew hat

o w in g

d e s p ite
rep orted

e le c tr ic

pow er

u su a l sea son a l te n d e n cy , rose
coal

s e a s o n a lly
th e B o a r d

p r o d u c tio n
a d ju s t e d
of

w as
in d e x

G overn ors

s lig h t ly
of

in

fu r th e r ,

have
In

r e fle c ­
w h ile

lo w e r .

in d u s tr ia l

o f th e

th e

d im in ­

to

o u tp u t, p a r t ly

by

fu r ­

to

a

to

oth er

expanded

m ills ,

and

p e r cen t

above

th e

p rod u c­

F e d e ra l R eserve
fig u r e

of

a go, a n d 4 p e r cen t a bov e th a t o f N o v e m b e r 1929.




a c t iv ity

com p a red

o f fr e ig h t

in

D ecem ber

a year
S te e l

fa v o r a b ly

over

th e

b u t o f le s s t h a n
and

r e t a il

rep orted

m e n t sto re

in

gen era l

of

have

been

tra d e

h a lf

le a s t

in

new

show ed

appears

in

Y ork

c o m p a r a tiv e ly

part

w h ic h
to

in

C ity

th e

S h ip m e n ts

tim e

o f year,

v o lu m e .

and

poor

w ere

D ep a rt­

N orth ern

sta rt

a p p a r e n t ly

th e

to

a fte r

a u t o m o b ile s

la r g e

u n fa v o r a b le

c o n s id e r a b ly

m on th s,

a s e a s o n a l d e c lin e ,

p assen ger

m ade

N ew

D ecem ber,

at

a

in

a fte r

im p r o v e d

p r e c e d in g

th e u s u a l a m o u n t f o r

Jersey,
of

w ith

r a ilr o a d s

s a le s

to

in

w as

N ew
fir s t

a ttr ib u ta b le

w ea th er

r e m a in in g

th e

c o n d itio n s ,

p e r io d

b e fo re

C h r is tm a s , a n d f o r D e c e m b e r 1 t o 2 4 , in c lu s iv e , a v e r a g e
d a ily

s a le s

p r e v io u s ,

ro se 5 p o in ts in N o v e m b e r to 1 1 4 p e r ce n t o f th e
a vera g e, 19

B u s in e s s

A c tiv ity

a llo w a n c e f o r th e u s u a l s e a s o n a l m o v e m e n ts .

ord ers

th e

in d u s tr y ,

a s s e m b lie s

o f B u s in e s s

fillin g

in

86 p
150

* For quarter ended

have

r a ilr o a d s

t e x t ile

r Revised

a p p a r e n t th is

in c r e a s e d d u r in g th e fir s t t h r e e w e e k s o f th e m o n t h .
th e

th a t

N ovem ­

ad va n ces, to

a u to m o b ile

a u to m o b ile

a c t iv ity

a c t iv ity

p r ic e

h ig h e r ra te s o f c o n s u m p tio n
ste e l u s in g

th a n

th e

h ow ever,

(Adjusted for seasonal variations and usual year to year growth)

S te e l p r o d u c tio n h a s d e c lin e d in m o st y e a r s in N o v e m b e r

p la c e d

d e liv e r ie s ,

lo w e r

o f la s t

sh ow ed

d u r in g th e su m m er.

w e e k ly

in

w a s h ig h e r th a n

a vera ged

a n d D e c e m b e r, a n d th e
year

v o lu m e

pow er

Miscellaneous

P r o d u c tio n
It

a le v e l d e fin ite ly

S o m e o f th e 1 9 3 6 in c r e a s e

m ovem ent

and

in

1 9 3 5 w e r e s e v e r e ly r e d u c e d

a s a r e s u lt o f th e 1 9 3 4 d r o u g h t .
w as

R ayon

year

th e 1 9 2 9 v o lu m e .

a g r ic u ltu r a l

ce n t b e lo w

e le c tr ic

m e ta ls

m ore

lo a d in g s

a n d w e r e a b o u t 3 2 p e r c e n t b e lo w
to ta l v o lu m e

a d van ce.

of

M a c h in e t o o l o r d e r s

th e p e a k

1936, and

a s a w h o le , h o w e v e r , d id n o t r is e a b o v e th e t o t a l f o r 1 9 3 1 ,

The

g e n e r a tio n

T h e in c r e a s e in m e r c h a n ­

fr e ig h t

ce n t,

at

a p p r o x im a te d

1 2 p e r c e n t s m a lle r

in c r e a s e d a b o u t 13 p e r c e n t b e tw e e n
d is e

th e

u su a l seasonal

re c o v e r y m o v e m e n t, so th a t 1936 o u tp u t e x ce e d e d th a t o f
a ll y e a r s b a c k to

and

v o lu m e
cou n try

w ere

and

as

in

th e

9

in

over

year

per

cen t

w as

1931.

In

rep orted

a y e a r p r e v io u s

1936

la r g e r

a p p r o x im a te ly

D ecem ber

r e t a il t r a d e

le a s t a s m u c h
F or

about

w ere

d ep a rtm en t

o th er
to

th a n

th e

p a rts

have

as in
sto re

c o u n t r y a s a w h o le w ill a p p a r e n t ly s h o w

a

sam e

year
d o lla r

of

in c r e a s e d

N ew
s a le s
an

th e
at

Y ork.
fo r

in c r e a s e

th e
of

FEDERAL RESERVE BANK OF NEW YORK
P RC N
E ET

b e r to

th e

m id d le

7

o f N o v e m b e r a lth o u g h

s o n a l m o v e m e n t is d e c i d e d l y
th is

b a n k ’s

s e a s o n a lly

th e

dow n w ard .

a d ju s t e d

u su al sea­

C o n s e q u e n t ly ,

in d e x

of

e m p lo y m e n t

r o s e t o th e h ig h e s t le v e l s in c e J u l y 1 9 3 0 , a n d th e a d ju s t e d
p a y r o lls
1931.

N
V

in d e x

o f 10 p e r ce n t, a n d
F rom
th e

O cto b e r

fo o d

and

in c r e a s e s

1931

1932

1933

1934

1935

1936

11%

of

cen t

m ore

a fte r

s a le s

1929

of

20

1929

a

rose

per

m en t sto re
fo r

th e

ce n t.

in

A s

as

30 p er

cen t

in

th e

show
th e

N ew
an

p o in t

s in c e

M a rch

Y ork

a c c o m p a n y in g

drop

1933

in

w as

com p ared
1933

to

fu r th e r

th is

th e

40

so

w ith

th a t

in

s o m e w h a t c lo s e r to

a s a w h o le

th a n

fo r

a

b u ild in g

in d u s tr ie s .

s m a ll

of

p o p u la tio n

in c r e a s e
of

w ere

a

m id d le

sta rte d

la s t

w ere

ago,

of

and

$ 5 0 ,5 0 0 ,0 0 0

th e

F ebru ­

rep orted

on N o v e m b e r 15

year

n e a r ly

th e

cou n try,

c o n t in u in g

w ork ers

th e s e in d u s t r ie s

in c lu d e

o f th e

fr o m

w h ic h

m ore

in d u s t r ie s

w h ic h

N ovem ber,

ad van ces

d a te

L abor,

th is y e a r

w e e k ly

p a y r o ll

h ig h e r .

C o m m o d ity

P r ic e s

T h e u p w a r d m o v e m e n t o f p r ic e s o f th e p r in c ip a l b a s ic

fo r

c o m m o d it ie s w h ic h b e g a n in N o v e m b e r c o n t in u e d d u r in g

e n tir e

in c r e a s e

1936

d ep a rt­

1929

le v e l

D ecem b er, a n d
by

s a le

p r ic e

in d e x

S ta tis tic s fr o m
on

fo r

th e

h ig h e s t
grou ps

c o m p ile d

p o in t

19

by

th a n

s in c e

th e

A c t iv e ly

on

w ere

e s ta b lis h e d

B u reau

O cto b e r

rea ch ed

in

S ep tem b er

c o m p r is e d

th e a d v a n ce .

th e y e a r

T h e c o m p r e h e n s iv e w h o le ­
of

Labor

7 8 4 c o m m o d ity q u o ta tio n s w a s 3 p e r ce n t

th e y e a r ’s lo w

th e
1936

h ig h s

D ecem ber

cen t above

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

new

a n u m b e r o f c o m m o d it ie s .

h ig h e r

th is d is t r ic t .

1935

w o r k in g

m id d le

sam e

d is b u r s e m e n ts

th e

t e x t ile

th e

cen t

th e

an

th e

by

o ffs e t b y

in

and

in

th a n

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

1 ,1 0 0 ,0 0 0

th e

e m p lo y m e n t

th is

fo r

per
fo r

at

w ork ers

m a c h in e r y ,

and

m o n th ly

e m p lo y e d
th a n

of

in

m ore

v o lu m e

cen t

35

s a le s

in

sh ow n

d o lla r

per

w ith

1936

d is tr ic t,

th a n

th e

O ver

w ere

D ep a rtm en t

fu r th e r

s u c c e s s iv e
a ry.

th e

to

in c r e a s e o f 17 p e r ce n t.

d e c lin e s

S ta te s a s a w h o le , p r iv a t e e m p lo y m e n t

h a lf th e

a

O cto b e r

in c r e a s e

s u b s e q u e n tly

ce n t, as co m p a r e d

s a le s w e r e

cou n try

has

The

to

w h o le ,

som ew hat

1933,

recovery.

fr o m
as

to

t h is d is t r ic t , b u t f r o m
cou n try

and
w ill

per

d e c lin in g

fr o m

r a p id

cou n try

10

1935,
s a le s

th a n

show ed

in d ic a te s , d e p a r t m e n t s to r e t r a d e f o r th e e n tir e

cou n try ,
d is tr ic t

over

D is tr ic t

a p p r o x im a te ly

d ia g r a m

of

Per

R eserve

to

an

grou ps

num ber

m a n u fa c tu r in g

m ore

Dollar Volume of Sales of Reporting Department Stores in the New
York Federal Reserve District and in the United States, Yearly
1929-1936 (1929 = 100 per cent; 1936 partly estimated)

p a y r o lls

and

F o r th e U n ite d

1...

about

h ig h e s t

N ovem ber

th e

m e ta ls

r e p o r tin g
1930

to

c lo th in g

in

m a te r ia l,

in

F ed era l

th e

w o r k e r s e m p lo y e d in N e w Y o r k S ta te s h o w e d a n in c r e a s e

\ \ n e w YORK DUSTRICT
\ V ” i
\ \
\ \
\ \
\
\
\
>
V"..
\
\
UNITED STATES'

1929

reach ed

C o m p a r e d w ith a y e a r a g o , th e n u m b e r o f fa c t o r y

in

th is

31, a n d

M ay, and

1930.

7

per

rea ch ed

V ir tu a lly

a ll

p a r t ic ip a t e d

in d e x

in

t r a d e d b a s ic c o m m o d it ie s , s u c h

as

a r e i n c l u d e d in t h e M o o d y ’s I n v e s t o r s S e r v ic e c o m m o d it y
N ov.
Primary Distribution
Car loadings, merchandise and misc........
Car loadings, other.......................................
Exports...........................................................
Im p o rts ...........................................................
Distribution to Consumer
Department store sales, U. S.....................
Departm ent store sales, 2nd D is t.r..........
Chain grocery sales......................................
Other chain store sales................................
M a il order house sales r .............................
Advertising.....................................................
New passenger car registrations...............
Gasoline consumption..................................
General Business Activity
Bank debits, outside New York C it y .. . .
Bank debits, New York C ity .....................
Velocity of demand deposits, outside New
York C ity ...................................................
Velocity of demand deposits, New York
C it y .............................................................
New life insurance sales..............................
Factory employment, United States........
Building contracts........................................
New corporations formed in N . Y . State.
General price le v e l* ....................................
Composite index of wages*........................
Cost of liv in g *...............................................

68
64
63
71

Sept.
73
78
53
76

Oct.

Nov.

74
80
56
72

78
87

p r ic e in d e x , s h o w e d
age.

S in c e

88
87 r
68
96
98r
65
102
90

27
90
92r
70
96
95r
72
80p

87
87r
68
96
lO lr
69
93
94

a la r g e r r is e t h a n th e g e n e r a l a v e r ­

end

of

O cto b e r

th is

in d e x

of

a c tiv e ly

t r a d e d b a s ic c o m m o d it ie s h a s r is e n 1 4 p e r c e n t t o a p o in t
per

now
79
83r
70
92
84r
64
85
88

th e

cen t above

about

160

th e

per

1936
cen t

lo w

rea ch ed

above

th e

in

lo w

M ay, and
p o in t

of

is

th e

d e p r e s s io n in F e b r u a r y 1 9 3 3 .
M a r k e d a d v a n ce s o c c u r r e d in th e p r ic e s o f a g r ic u ltu r a l
c o m m o d it ie s

d u r in g

D ecem b er.

The

cash

q u o ta tio n

N u m b e r 1 N o r t h e r n w h e a t a t M in n e a p o lis ro s e 2 3 %
to $ 1 .6 3 %

fo r

ce n ts

a b u s h e l, t h e h ig h e s t p r ic e s in c e J u l y 1 9 2 6 , a n d

fu t u r e s q u o t a t io n s s h o w e d a d v a n c e s w h ic h w e r e n e a r ly as
66
50

66
41

67p
41

69 p
50

72

67

68

72

43
58
89r
51
56
149
189
142

42
55
95r
46
60
156
191
144

40
54
96r
44
58

45
54
97r
55p
59
157 p
19 5p
143 p

156
194
143

la r g e .
75

C o rn rose 4 %

ce n ts

and

hogs

c e n ts a b u s h e l, a n d s te e r s a d v a n c e d
65

ce n ts

a

h u n d r e d w e ig h t.

S m a lle r

p r ic e in c r e a s e s o c c u r r e d in h id e s a n d r a w s u g a r .
a t 2 3 34
/

ce n ts a p o u n d , a n d

a pound

R ubber

d o m e s t ic w o o l a t 9 5 .3 4 c e n ts

r e a c h e d th e h ig h e s t le v e l s in c e 1 9 2 9 , a n d c o t t o n

p r ic e s g a in e d a b o u t %

cen t a p ou n d .

R aw

s ilk , h o w e v e r

s h o w e d a n e t r e c e s s io n , f o l l o w i n g a n a d v a n c e t o w a r d th e
end

o f N ovem ber.

S e v e r a l m e ta l p r ic e s r e a c h e d le v e ls in D e c e m b e r w h ic h
p Prelim inary

r Revised

* 1913 average = 100; not adjusted for trend

h a d n o t b e e n a tt a in e d in th e la s t s ix o r s e v e n y e a r s .
s te e l

E m p lo y m e n t

a n d

P a y r o lls

in c r e a s e d

E m p lo y m e n t a n d p a y r o lls in N e w Y o r k S ta te fa c to r ie s
r e m a in e d v ir t u a lly u n c h a n g e d




at

fro m

th e m id d le

of

O cto ­

P itts b u r g h
45

p o in ts

rose
to

$2

5 .5 0

to

$ 1 9 .2 5

ce n ts

a

a

ton ,

pound,

S crap

and

b o th

z in c

p r ic e s

th e h ig h e s t s in c e 1 9 2 9 , w h ile a d v a n c e s in c o p p e r a n d le a d
p r ic e s r a is e d th e m

t o n e w le v e ls s in c e 1 9 3 0 .

8

MONTHLY REVIEW, JANUARY 1, 1937

B u ild in g
T o ta l b u ild in g

and

e n g in e e r in g

co n tra cts

aw ard ed

in

th e N e w Y o r k a n d N o r th e r n N e w J e r s e y a re a d e c lin e d 2 2
p e r c e n t in N o v e m b e r , b u t o n a n a v e r a g e d a ily b a s is , c o n ­
t r a c t s w e r e o n ly 8 p e r c e n t b e lo w th e O c to b e r r a te , w h ic h
w a s a b o u t in a c c o r d w ith th e c u s to m a r y se a so n a l c h a n g e .
F o r th e fir s t tim e in
th e

a verage

d a ily

co r r e s p o n d in g

n e a r ly

v o lu m e

p e r io d

a year and

w as

a year

lo w e r

a h a lf, h o w e v e r ,

th a n

e a r lie r ,

due

th a t
to

fo r

th e

d e c lin e s

of

11

T h is e s tim a te in c o m b in a t io n w it h fig u r e s f o r th e fir s t
m on th s

year

o f th e y e a r

1936

in

th e

a p p r o x im a te ly

in d ic a te s

S econ d

th a t t o t a l s a le s f o r

F ed era l E eserve

D is tr ic t

9 .8 p e r c e n t h i g h e r t h a n i n

th e

w ere

1935, as co m ­

p a r e d w i t h a n i n c r e a s e o f o n l y 1 .7 p e r c e n t b e t w e e n 1 9 3 4
an d 1935.
T ota l

N ovem ber

s to re s

in

th is

1935,

but

a fte r

s h o p p in g

s a le s

d is tr ic t

of

a llo w in g

d a y s , th e

th e

w ere

7 .6

fo r

in c r e a s e

r e p o r tin g

per

cen t

d iffe r e n c e s

w a s th e

d ep a rtm en t

h ig h e r

th a n

in

num ber

in

of

la r g e s t s in c e

J u ly .

2 4 p e r c e n t in h e a v y e n g in e e r in g w o r k a n d o f 33 p e r c e n t
in o t h e r t y p e s o f n o n r e s id e n t ia l b u ild in g , w h ic h w e r e n o t
a lto g e th e r o ffs e t b y
co n tra cts.

a g a in

A lt h o u g h

of

73

co n tra cts

per

fo r

ce n t in

n o n r e s id e n tia l

w ork

in g e n e r a l w e r e s m a lle r t h a n a y e a r a g o , th e a v e r a g e d a ily
ra te

of

c o m m e r c ia l

N ovem ber

1936

N ovem ber 1935.
co n tra cts fro m
r e s id e n t ia l

and

w as

fa c to r y

m ore

b u ild in g

th a n

tw ic e

aw ard s

as

h ig h

in

as

in

oth er

th a n

a d v a n c in g

heavy

e n g in e e r in g

5 p e r ce n t a n d p u b lic

w o r k s a n d u tilitie s o v e r 1 4 p e r c e n t.
F or

th e

fir s t

e le v e n

m on th s

of

1936

to ta l

co n tra cts

e x c e e d e d th o s e p la c e d in th e sa m e p e r io d o f 1 93 5 b y m o re
th a n

50

per

ce n t.

A ll

m a jo r

b u ild in g

c la s s ific a t io n s

s h a r e d in th e a d v a n c e o v e r a y e a r a g o , r e s id e n t ia l b u ild ­
in g

w ith

an

in c r e a s e

of

63

per

cen t

r e g is te r in g

th e

la r g e s t g a in .
F o r th e 37 S ta te s c o v e r e d b y

th e F . W . D o d g e

C orp o­

r a t io n r e p o r t , to ta l c o n tr a c ts a w a r d e d in N o v e m b e r w e r e

8 per

th e

ce n t lo w e r th a n in

d iffe r e n c e
O cto b e r,

rose

in

w o r k in g

and

th is

11 p o in ts to

g row th .

55

A vera ge

a p p r o x im a te ly

days,

th e

ra te

at

w h ic h

con ­

b a n k ’s
per

per

a d ju s t e d

ce n t o f th e lo n g

d a ily

21

s e a s o n a lly

co n tra cts
cen t

in

h ig h e r

term

in d e x

tren d

N ovem ber

th a n

in

of

w ere

N ovem ber

1 9 3 5 , a n in c r e a s e o f 8 8 p e r c e n t f o r r e s id e n t ia l w o r k b e in g
p a r t ly o ffs e t b y a s m a lle r v o lu m e o f c o n s t r u c tio n o f o th e r
typ es.
w ere

F o r th e fir s t e le v e n m o n th s o f 1 9 3 6 t o ta l c o n t r a c t s
57

per

cen t

in

excess

o f th o se

p la c e d

in

th e

sam e

p e r io d la s t y e a r , e a c h m a jo r c la s s ific a t io n o f c o n s t r u c t io n
r e c o r d in g

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

D a t a f o r th e fir s t h a lf o f D e c e m b e r in d ic a t e a s la c k e n ­
in g in b u ild in g
p r o p o r tio n s .
cen t fro m
th e

a c t iv ity

A vera ge

th e

average

w h ic h

o f m ore th a n
d a ily

th e u s u a l se a so n a l

co n tra cts

d e c lin e d

le v e l o f N o v e m b e r , a n d 4 1

fo r

w as

1935

1936

New Y o r k ...........................................................
Buffalo.................................................................
Rochester............................................................
Syracuse..............................................................
Northern New Jersey......................................
Bridgeport...........................................................
Elsewhere............................................................
Northern New York S ta te.........................
Southern New York S ta te..........................
Central New York State.............................
Hudson River Valley D istrict...................
Capital D istrict.............................................
Westchester and Stam ford.........................
Niagara F alls.................................................

+ 7 .6
+ 4 .4
+ 7 .6
+ 1 2 .4
+ 9 .2
+ 3 .7
+ 4 .4
— 4 .5
+ 1.9
+ 4 .0
+ 8 .7
+ 9 .2
— 3 .4
+ 1.1

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

53.3
51.6
50.1
4 2.6
4 4 .8
4 2.4
3 5.0

51.3
4 4 .4
50.6
4 2 .8
45 .0
4 4 .0
36 .2

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

+ 7 .6

+ 6 .9

49.4

48.1

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

+ 1 5 .2

+ 2 .4

49.3

4 9 .0

O c to b e r , b u t a ft e r a llo w in g fo r

tr a c ts w e r e p la c e d w a s 9 p e r c e n t a b o v e th a t m a in ta in e d
in

Net
sales

O c t o b e r to N o v e m b e r w a s c o n fin e d t o n o n ­

c o n s tr u c tio n

a

th e

co r r e s p o n d in g

r e la tiv e ly

a c t iv e

per

p e r io d

p e r io d

a

28

per

cen t fr o m
year

fo r

ago,

W h o le s a le
In

T ra d e

N ovem ber

to ta l

S to re

la r g e r

in c r e a s e

th a n

ago.

w as

d ep a rtm en t

rayon

and

s ilk

goods

in g

2 0 b u s in e s s
th a n

d a y s s a le s w e r e

la s t.

The

N ew

8 .9

Y ork

one

m ore

s h o p p i^ i^ )

per
and

c e n t la r g e r th is
B r o o k ly n

sto re s

r e c o r d e d a n 8 .5 p e r c e n t i n c r e a s e i n s a l e s f o r t h e 2 & d ^ ty s,
w h ile
per

th e

N orth ern

c e n t in c r e a s e .

p e r io d u p

to

N ew
On

Jersey

th e

b a s is

sto res
of

r e g is te r e d

th e se

fig u r e s

C h r is tm a s , th e t o ta l f o r th e m o n t h

a

iG fjS

fo r

th e

appears

t o h a v e b e e n a b o u t e q u a l to th e D e c e m b e r 1 9 3 1 to ta l.




O cto b e r.

rep orted

w h o le s a le

S a le s

of

th e

m e n ’s

by

th e

N a tio n a l F e d e r a ­

a m o u n t s in t h r e e t o fiv e m o n t h s , a n d s a le s o f t h e g r o c e r y ,
h a rd w are, a n d

p a p e r fir m s

O cto b e r.

d ia m o n d

s a le s

The

s u b s t a n t ia lly

a lth o u g h

th e

past

m on th s.

fe w

show ed
and

th e

a

g a in s

d ecrease

s ta t io n e r y

h ig h e r
w ere
The
in

show ed

and

th a n

in

shoe

fir m s ,

on

th e

th a n

th e

th a n
o th er

s in c e

in

rep orted

p r e c e d in g

s m a lle r

la r g e s t

rep orted

g a in s

con cern s

th e

som ew hat

s a le s , t h e

fir m s

la r g e r

je w e lr y

year,
in

th e

hand,

la s t A p r il,

la r g e s t

d e c lin e

in

s a le s in o v e r a y e a r .

Comm odity
Net
sales

sto re s

d a y t h is y e a r t h a n la s t, h o w e v e r , a n d f o r th e c o r r e s p o n d ­

year

in

Percentage
change
Novem ber 1936
compared with
Novem ber 1935

r e p o r tin g

T here

r e p o r tin g

t io n o f T e x tile s , in c r e a s e d o v e r a y e a r a g o b y th e la r g e s t

i n t h e M e t r o p o l i t a n a r e a o f N e w Y o r k w e r e 1 2 .5 p e r c e n t
a year

th e

p r o je c ts

F o r th e C h r is tm a s s h o p p in g p e r io d , D e c e m b e r 1 to 2 4

h ig h e r th a n

of

c lo t h in g a n d c o t t o n g o o d s c o n c e r n s , a n d y a r d a g e s a le s o f

T r a d e

in c lu s iv e , t o t a l s a le s o f t h e

s a le s

f i r m s a v e r a g e d 7 .8 p e r c e n t h i g h e r t h a n i n 1 9 3 5 , a s l i g h t l y

fin a n c e d b y th e F e d e r a l G o v e r n m e n t.
D e p a rtm e n t

Stock
on hand
end of
month

Locality

T h e d e c lin e in th e d a ily r a te o f b u ild in g

t y p e s , r e s id e n t ia l w o r k

Per cent of
accounts
outstanding
October 31
collected in
Novem ber

Percentage
change
N ovem ber 1936
compared with
Novem ber 1935

r e s id e n t ia l

/Groceries.........................
C >len/i: clothiRg...............
C ottfow g ood ^ . .... .:vfi
R ayon and silk go'dt&i .
Shoes................................
H ardware........................
S tationery.......................
.Pftper.. .,. v .. v.............
JQiamonde
.. \ . J........
j•
Jewelry v s
.
........
Weighted a v e r s e '- .

Stock
end of
month

+ 1 2 .4
+ 4 .9
+ 1 0 .3
+ 16.7
+ 15.0*
— 11.8
+ 1 1 .4
+ 2 3 .8
— 6 .7
+ 10.4
+ 2 0 .9
+ 5 .3
+ 5 6 .1 + 145.6
+ 7.

Per cent of
accounts
outstanding
October 31
collected in
Novem ber

1935

1936

87.2
31.7
36.7
6 1.8
34.4
47.7
5 3.5
47.1
17.3

8 5.2
35.3
39.6
6 0.0
4 1 .4
4 6.6
5 6.5
55.6
} 15.8

53.7

54.8

*Q
uantity figu reported by th N
res
e ational F
ederation of T
extiles, Incorpo­
rated. not included in w
eighted average for total w olesale trade.
h

FEDERAL RESERVE BANK OF NEW YORK
M O N T H L Y R E V I E W , J A N U A R Y 1, 1937

B u s in e s s C o n d i t i o n s in t h e U n it e d S ta t e s

(Summarized by the Board of Governors o f the Federal Eeserve System)
RODUCTION, wage payments, and the distribution o f commodities to
consumers increased considerably from October to November. Wholesale
commodity prices have advanced steadily since the end o f October.

P

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)

Indexes of Daily A ve ra g e Value of Department
Store Sales, Adjusted for Seasonal Variation
and Unadjusted (1923-25 average =
100 per cent)

and

E

m ploym ent

The Board’s index o f industrial production, which makes allowance for
changes in the number o f working days in the month and for the usual seasonal
variations, was 114 per cent of the 1923-1925 average in November, as compared
with 109 per cent in October. Output o f both durable and nondurable manufac­
tures showed a considerable rise. Production o f steel ingots increased further to
a rate o f 79 per cent o f capacity in November, and output o f automobiles also
increased. Figures for the first three weeks o f December indicate continued
expansion in output o f both steel and automobiles. In the plate glass industry,
where there has been a strike, production was sharply reduced in November, and
activity at lumber mills declined, reflecting the effects o f the maritime shipping
strike on the Pacific Coast. Increases in output were reported at meat packing
establishments and textile mills, and sugar meltings and output o f tobacco
products declined by less than the usual seasonal amount. A t mines, coal produc­
tion increased and output o f crude petroleum and iron ore showed a smaller than
seasonal reduction.
Value o f construction contracts awarded, according to figures o f the
F. W. Dodge Corporation, continued at about the same rate in November as in
the previous month.
Factory employment showed little change from October to November,
although a decrease is usual at this season o f the year, and the Board fs seasonally
adjusted index advanced to 96 per cent o f the 1923-1925 average. The number
employed at factories producing durable goods continued to increase, with the
largest expansion in the automobile and machinery industries. There was a
decline in employment at lumber mills and in the glass industry. In the non­
durable goods industries as a group employment showed a smaller decline than
is usual in November. At shoe factories and establishments producing wearing
apparel smaller than seasonal declines were reported and there were increases in
employment at cotton and woolen textile mills and at meat packing plants.
D is t r ib u t io n

Department store sales increased substantially in November, and there was
also a rise in sales at variety stores and at chain grocery stores. Sales by general
merchandise stores and mail order houses serving rural areas declined from the
high level reported for October.
Freight car loadings showed a smaller than seasonal decrease in November.
Loadings o f coal, coke, and grain increased contrary to the usual tendency, and
shipments o f miscellaneous commodities and o f most other classes o f freight
declined by less than the seasonal amount.
C o m m o d it y P

Group Price Indexes of Bureau of Labor Statis­
tics (1926 average = 100 per cent)

r ic e s

The general level o f wholesale commodity prices continued to advance from
the middle o f November to the third week o f December. There were substantial
increases in the prices o f wheat, flour, nonferrous metals, and rubber. Prices of
wool, cotton yarns, and worsted yarns advanced somewhat further and cotton,
pig iron, and steel scrap prices also increased in this period.
B a n k Cr e d it

W
ednesday Figures for Reporting M ber B
em
anks
(Latest figures are for D
ecem 16)
ber




The reserve position o f member banks in recent weeks has been influenced
largely by temporary seasonal developments in connection with holiday currency
requirements and mid-December financing by the United States Treasury.
Notwithstanding the increased demand for currency for Christmas shop­
ping, there was a further growth in demand deposits at weekly reporting member
banks through the first half o f December, reflecting additions to monetary gold
stock, as well as a sharp increase in bank loans.
At reporting banks outside New York City holdings o f Government securi­
ties increased by $140,000,000 in the four weeks ended December 16, while at
New York'City banks they showed a further small decline. There was an increase
of $100,000,000 in loans to brokers and dealers in securities in New York City,
largely for the purpose of buying United States Government securities. Com­
mercial loans showed a further increase o f $150,000,000, carrying the total
volume of such loans to a level $800,000,000 higher than a year ago.