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MONTHLY REVIEW ofCredit andBusiness Conditions Second Federal Reserve District Federal EeserveAgent Federal EeserveBank, NewYork MoneyMarket inJune Excessreservesoftheprincipal NewYorkCitybanks afterfluctuatingaround$1,200,000,000inthelatterpart ofMayandearlyJune, droppedabruptlytoalittleover $600,000,000atthemiddleof June, reflectingtheeffects of Treasuryfinancingandincometaxcollections. For thecountryas awhole, excess reserves rose tonearly $3,000,000,000intheearlypart of themonth, thehigh estlevelsincetheearlypartofMarch,andthendropped to a little over $2,000,000,000 onJune 17. In both casestheamount of excessreservesonJune17wasthe smallest inmore thanayear. As the accompanying diagramindicates, the volume of member bankexcess reserves has been affected by Government financing operations ineachof the recent tax periods, but the reduction attributable to that factor was larger this monththanever before, as Treasury balances in the ReserveBanks reachedanewhighpoint at morethan $1,400,000,000. Theprincipal causeof thisreductioninmemberbank reserves andincreaseinTreasurydeposits onJune 15 wascashpaymentsfornewGovernmentsecurities, which amounted to $475,000,000 in this district and nearly $900,000,000 for the country as awhole. Income tax collections andother Treasury receipts, including the retirement of preferred stock in banks held by the Reconstruction Finance Corporation, substantially exceededinterest payments bytheTreasuryandother Government disbursements. Ontheotherhand, theheavygoldinflowduringthe first three weeks of June tended to increase member bankreserves, chieflyinNewYork, andoffset tosom e extentthewithdrawalsof fundsbytheTreasury. Gold receiptsatthePortof NewYorkduringthefourweeks endedJune24amountedtoapproximately$200,000,000. Thismovement, however, ceasedat theendof thethird weekof June. Veterans Adjusted Service Bonds After June 15, a rapid reaccumulation of excess reserves of member banks occurred, due very largely tothecashingof VeteransAdjustedServicebondsand thechecksissuedtoveteransfortheoddamountspayable inadditiontothebonds, whichwereissuedin$50units. IntheFederal ReserveBankof NewYorkalargestaff hadbeenworkingunderpressureforanumberofweeks topreparetheAdjustedServicebondsandchecksfrom lists certified by the Veterans Administration to the Treasury disbursing officer, and similar staffs were July 1, 1936 organizedineachof theother Federal Reserve Banks andintheTreasuryDepartmentatWashington. Inthis district over 4,000,000 bonds were inscribedwith the names of about 385,000 veterans and prepared, with checks for the oddamounts, for mailing to veterans. Thebulkof thesebondsandcheckswerereadyfor dis tributionandsenttothePostOfficeonorbeforeJune15, sothattheycouldbedistributedpromptlytotheveterans. A large part of the checks for odd amounts were cashedwithinafewdays, andwithinaweekcashpay mentsof checksissuedfortheredemptionof Adjusted Servicebondsreachedadailyvolumeof20to25million dollars inthis district andaround100 milliondollars for the country as awhole, after whichthere was a gradual decline. These payments, together withother Government disbursements, hadthe effect of reducing Treasurybalances intheReserveBanks rapidly. The cashingof AdjustedServicechecks andbonds resulted inasubstantial, thoughprobablytemporary, increasein theamountof currencyoutstanding, however, anduntil thiscurrencyfindsitswaybacktothebanks, payments outoftheTreasuryaccountwillnothavetheirfulleffect inincreasing member bankreserves. Futhermore, as the June month-end and Fourth of July holiday approached, afurther increaseof aseasonal naturein theamount of currencyincirculationwas inprospect. Nevertheless, by June 24, as a result of Treasury disbursements, together with gold imports, excess reservesoftheNewYorkCitybankshadrisentoabout $735,000,000, andexcess reserves of all member banks Excess Reserves of All Member Banks and Treasury Deposits in Federal Reserve Banks MONTHLY REVIEW, JULY 1, 1936 50 hadrisen above $2,400,000,000, and further increases appearedtobeinprospect. Money Rates Despitethewidefluctuationsinmemberbankreserves, moneyratesshowedlittlechangeduringJune, exceptfor aslightincreaseinyieldsonTreasurynotes. M oney Rates a t N ew Y o rk June 28, 1935 M a y 29, 1936 June 29, 1936 Stock Exchange call loans........................ Stock Exchange 90 day loa n s................. P rim e commercial paper— 4 to 6 m onths B ills — 90 day unindorsed........ ................ Customers’ rates on com m ercial loans (Average rate of leading banks a t m idd le of m o n th ) .............................. Treasury securities: M a tu rin g December (y ie ld ) ................ M a tu rin g Feb rua ry 1938 (y ie ld ). . . . Average y ie ld on Treasury notes (1-5 y e a rs )........................................................ Average yield on Treasury bonds (more th a n 5 years to earliest call date) . . . . Average ra te on latest Treasury b ill sales 273 day issue................................ Federal Reserve B ank of N ew Y o rk re discount ra te ........................................... Federal Reserve B a n k of N ew Y o rk b u y ing ra te fo r 90 day indorsed b ills . . . . X *x X X 1 1 x * ix H X 1.79 1.67 1.67 N o yield N o yie ld .14 N o y ield .23 .53 .69 2.4 4 2 .3 2 .12 .20 t .79 #2.34 .19 IX IX IX X X X * N om in al. f -Average raised .05 b y inclusion of l z /% per cent Treasury note issue m a tu rin g June 15, 1941. # Average raised .02 b y inclusion of 2% per cent Treasury bond issue of 1951-54. MemberBank Credit DuringthethreeweeksendedJune17thetotal loans andinvestments of weeklyreportingmember banks in NewYork City increased$480,000,000, to the highest point everreached, largelyinconnectionwiththeGov ernment financingonJune 15. For som eweeks prior tothesubscriptionsforthenewTreasurysecuritiesthe NewYorkCitybankshadbeenaddingtotheirholdings of Government securities, partly throughpurchases of theweeklyissuesof Treasurybills, andapparentlyalso through acquisitions of Treasury notes maturing on June15andAugust 1, whichwereexchangeableforthe newTreasuryissues. IntheweekendedJune17there was afurtherincreaseof $140,000,000, andtotal hold ings reachedavolume $432,000,000 above the largest amountheldinMarch. Theloansof theNewYorkCitybankstobrokersand dealersincreasedbymorethan$200,000,000inthefirst weekof June, probablydueinlargemeasuretodealers’ borrowingstocarrytheportfoliosof Governmentsecuri tieswhichtheyhadacquiredtoexchangefornewissues. AfterJune3thevolumeofsuchloansshowedagradual reduction,butremainedhigheronJune24thanamonth previous. Loansotherthansecurityloansandholdings ofsecuritiesotherthanGovernmentissuesshowedsmall net increasesinthefourweeksendedJune24. In reporting member banks in 100 other principal cities throughout thecountry, holdings of Government securities were reduced gradually for several weeks precedingtheJuneissues, butintheweekendedJune17 therewasanincreaseof $334,000,000 which, asinthe case of the NewYork City banks, raisedGovernment securityholdingstoanewhighlevel. Thesebanksalso hadamoderateincreaseintheirloansonsecurities, and smallincreasesinotherloansandinsecuritiesotherthan Government issues. The increase intheir total loans and investments in the four weeks ended June 24 amountedto$303,000,000. G overnment S e c u r it ie s OnJune1theSecretaryof theTreasuryannounced offeringsof approximately$600,000,000of 2% percent Treasury bonds of 1951-54 and $400,000,000 of 1% percentTreasurynotesdueJune15, 1941, tobeissued onJune15. Additional amountsof thesamesecurities wereofferedinexchange for Treasury notes maturing onJune15andforTreasurynotesmaturingAugust 1. The securities offered for cash subscription were promptly oversubscribed, subscriptions for bothissues being approximately seven times the amount offered. Allotments of the Treasury bonds amounted to $671,000,000 andof the notes $435,000,000, atotal of $1,106,000,000. Of the total amount, $539,000,000, or slightlyunderhalf, wasallottedinthisdistrict. Holders of TreasurynotesmaturingonJune 15 andAugust 1 showedadistinctpreferenceforthenewTreasurybonds; exchangesof June15andAugust 1notesfortheTreas ury bonds amountedto $956,000,000, while exchanges forthenewTreasurynotestotaledlessthan$69,000,000. The Treasury continuedtoissue $50,000,000 of 273 day Treasury bills and an additional $50,000,000 of Treasury bills due December 15, 1936, each week, whereas maturing Treasury bills amounted to $50,000,000weekly. OnJune25, however, theTreasury announcedthat theweeklyissueof DecemberTreasury billswasbeingdiscontinued. Astrongmarket for Government securities followed theannouncementof thenewTreasurybondsandnotes onJune 1. Quotations onthe securities to be issued June15rosequicklytoapremium,andprices of out standingTreasury issues also advanced. The average yieldonTreasury bonds maturing inmore thanfive years declinedto2.30 per cent, equalingthe previous lowpointforrecentyearsreachedinMay. Subsequently tradingdiminishedinvolumeandpricesrecededgradu ally, but the average yield on Treasury bonds, after allowancefor the effect of the newissue onJune 15, wasthesameat theendof Juneasat theendof May. TheaverageyieldonTreasurynotesof1-5yearmaturity, withsimilaradjustment for theeffect of thenewissue onJune15, alsorosegraduallyafterthefirst fewdays of themonth, andattheendof Junewas0.05percent higherthanattheendofMay. BillsandCommercialPaper Tradingactivityinthebill market duringJunecon tinuedtobesmall involumeandrateswereunchanged. At theendof Mayoutstandingbillsamountedto$331,000,000 as comparedwith$344,000,000 for April, and $375,000,000 ayear ago. The decline for the month reflectedsmall decreases inbills basedonexports and domesticwarehousecredits andinbills basedongoods storedinorshippedbetweenforeigncountries. Accept ingbanks andbankers continuedtoholdabout 90per cent of all billsdrawn. In the commercial paper market also sales volume remainedsmall, dueprimarilytoinabilityof dealersto secureadequatequantities of newpaperwithwhichto fill theactivedemand. Theaveragerunof primefour tosixmonthcommercial papercontinuedat%percent. Especiallychoicenamesofshortermaturity, whenavail FEDERAL RESERVE AGENT AT NEW YORK 51 able, werequotedat slightlylowerlevels. Commercial Aclassificationof foreignlongterminvestments in paperdealersreported$184,000,000ofpaperoutstanding this countryat the endof 1935, accordingtotype of at theendof May as comparedwith$174,000,000 for investment andcountry of ownership, is showninthe April and$173,000,000forMay1935. accompanying table. Foreign holdings of American s ksandbonds, at $2,951,000,000, account for nearly ForeignLong TermInvestments inthe United 6t0ocp er cent of the total. The year-endmarket value States of common stock investments was placed at $2,015,Onthebasisofanextendedspecialsurvey,theFinance 000,000, andthe par value of foreign-heldbonds and Divisionof theDepartment of Commercehasestimated preferredstocks at $936,000,000. Slightlyover 20per thevalueofforeignlongterminvestmentsintheUnited cent of foreigninvestments here are included in the Statesattheendof 1935at$5,035,000,000, ascompared categoryof direct investments, representingtheaggre with$4,270,000,000ayearearlier. Theincreaseinthe gate foreign interest in foreign-controlled industrial recordedvalueofsuchinvestmentsduring1935wasdue corporations in this country. The remaining 20 per bothtotheupwardtendencyofAmericancommonstock cent of foreignlongterminvestments inthis country, prices, whichraisedthemarketvalueof existingforeign showninthe table as “Other Investments”, consists holdings of commonstocks, andtoratherextensivenet ofassetsheldintrustforforeignaccount, thenetequity acquisitionsof Americansecuritiesbyforeigninvestors offoreigninsurancecompaniesinUnitedStatesbranches duringthesecondhalf oftheyear. Theincomederived andaffiliates, andforeign holdings of mortgages and fromforeignlongterminvestments herewas estimated real estate. Themost important iteminthis groupof bytheFinanceDivisionat$140,000,000in1935, indicat investmentsconsistsof securitiesandproperties admin inganaveragerateof returnintheneighborhoodof 3 isteredbytrusteesforforeignbeneficiaries. Suchinvest ments, whicharesomewhat arbitrarilyvaluedat $415,percent. Theabovefigures, combinedwiththeFinanceDivision 000,000, consist inlarge part of stocks andbonds not estimatesof thenominal valueof Americaninvestments elsewhererecorded. inforeigncountriesandtheincomereceivedfromsuch Inexaminingthegeographical distributionof foreign investments, provide ameasure of this country’s net longterminvestments inthis country, it appears that creditor positiononlongtermaccount. The nominal British investments constituted about 27 per cent of valueofAmericanprivatelongterminvestmentsabroad thetotal, Canadianinvestments20percent, andDutch, at theendof 1934, thelatest dateforwhichpublished Swiss, andFrenchinvestments combinedanadditional figures areavailable, was estimatedat $13,114,000,000, 29 per cent. Thesefive countries together heldabout of which$7,818,000,000consistedof direct investments three-quartersofthetotalforeignlongterminvestments abroad, andthe remainder, $5,296,000,000, of foreign inthe UnitedStates, andover half of the remainder dollarbondsandotherportfolioinvestments. Thecurrent was ownedbyEuropeancountries whose holdings are market valueof theseinvestments, however, isconsider notseparatelyshowninthetablebelow. ablylower. Theincomereceivedfromtheseinvestments during1934wasplacedat$455,000,000, andtheindicated averagerateofreturnduringtheyearwasabout3.4per cent. ThenominalvalueofAmericaninvestmentsabroad appearstobeslightlymorethantwoandahalftimesthe valueof foreignlongterminvestmentsinthis country, and the income received on American investments abroadsomewhatmorethanthreetimestheincomepaid onforeigninvestmentsintheUnitedStates. An estimate of foreign investments in the United States prepared by Sir George Paish, editor of the London Statist, for the National Monetary Commis SecurityMarkets sionin1910placedthevalueofforeignlongterminvest ments in this country at roughly $6,000,000,000, of TheaveragedailyturnoverofstocksontheNewYork which$3,500,000,000washeldinGreatBritain, $1,000,- StockExchangewas less than1,000,000 shares during 000,000 in Germany, $750,000,000 in Holland, and June, but stockprices continuedtheirregular advance $620,000,000inFrance. Theincomederivedfromsuch whichbeganinearlyMay. Asaresultthegeneral level investmentswasestimatedatnearly$300,000,000ayear. ofstockpricesattheendofJunestood3%percentabove Onthe basis of this estimate, foreign investments in amonthprevious, but remainedabout 4percent below thiscountrypriortothewarappeartohavebeensome theApril peak. Industrialandrailroadsharesremained what larger thanat the present time, suggesting that belowtheApril level, butthepublicutilitiesroseduring theinvestment of foreigncapital intheUnitedStates thecourseofthemonthtoalevel onlyslightlybelowthe duringthepost-warperiodhasnot beenquitesufficient highpointoflastFebruary, whichwasthehighestsince tooffsettheextensiveliquidationof foreignholdingsof August1933. Americansecuritiesfrom1914to1918. Whenaccount Price movements in the mediumand lower grade istakenof Americanindustrial growthduringthepast domestic corporation bonds were similar to stock twenty-five years, the proportionate share of foreign pricemovements. The advance inJune together with investorsinAmericanindustrywasmuchlargerbefore that of theprevious monthwas sufficient tocancel the thewarthanat thepresent time. April recession, andaveragepricesneartheendof the ( In m illion s of dollars) Stocks and Bonds Great B r ita in ........................ C an a d a ................................... N ethe rla nd s.......................... S w itzerla n d ............................ D ire c t Investm ents O ther Investm ents T o ta l O ther C ou n trie s................... 609 523 429 311 214 865 362 322 249 13 14 85 403 161 106 75 54 240 1,374 1,006 784 399 282 1,190 T o ta l......................... 2,951 1,045 1,039 5,035 MONTHLY REVIEW, JULY 1, 1936 52 m on th w ere about 1 % p o in ts e s ta b lis h e d la s t F e b r u a r y . w h ic h show ed le s s b e lo w H ig h th e y e a r ’s h ig h s 3,985 g r a d e c o r p o r a t e is s u e s , p ron ou n ced d e c lin e s in A p r il, STATE, MUNICIPAL & FARM LOAN con NEW C A P IT A L t in u e d t h r o u g h th e fir s t h a lf o f J u n e th e u p w a r d t e n d e n c y show n in M ay, and p r ic e s fo r a n u m b er o f years. a g a in e s ta b lis h e d new STATE, MUNICIPAL, & FARM LOAN h ig h s REFUNDING S u b s e q u e n tly , h o w e v e r , th e m a r k e t d e v e lo p e d so m e ir r e g u la r ity . N e w F in a n c in g CORPORATE N ew fin a n c in g lo w in g th e s h a r in g M ay in flo ta tio n p u b lic in c r e a s e d th e of s la c k e n in g , in cr e a s e . about o ffe r in g s w ith and c h ie fly of in v o lu m e a ll P r e lim in a r y p r iv a te of d a ta in June $ 2 0 0 ,0 0 0 ,0 0 0 in d ic a te th e in c lu d in g as M ay com p ared and to ta l w a s S ta te NEW C A PITA L fo l c la s s ific a t io n s p la c e m e n ts , The June s e c u r itie s $ 4 0 0 ,0 0 0 ,0 0 0 A p r il. about d u r in g p r in c ip a l $ 7 5 0 ,0 0 0 ,0 0 0 a p p r o x im a te ly $ 1 ,0 0 0 ,0 0 0 ,0 0 0 in and about com p osed 1936 m u n ic ip a l, Offerings of Domestic Securities in First Six Months of 1936 Compared with Corresponding Period of Previous Six Years and Average for 1925-29 (Commercial and Financial Chronicle data, exclud ing investment trust issues; in millions of dollars. June 1936 figures preliminary) $ 1 8 0 ,0 0 0 ,0 0 0 o f p u b l i c u t i l i t y , $ 1 6 0 ,0 0 0 ,0 0 0 o f i n d u s t r i a l , $ 1 1 0 ,0 0 0 ,0 0 0 r a ilr o a d , $ 8 3 ,0 0 0 ,0 0 0 F ed eral L and B ank, a n d $ 1 0 ,0 0 0 ,0 0 0 F e d e r a l I n t e r m e d i a t e C r e d i t B a n k is s u e s . T h e p r o c e e d s o f th e n e w s e c u r itie s c o n t in u e d t o b e c h ie fly fo r th e r e fu n d in g in te r e s t ra tes, part th e of m oney D is t r ib u t io n p roceed ed lo w in g of o u ts ta n d in g in new is s u e s som e r a is e d th e fa ir ly th e of a lth o u g h w as cases to d e v e lo p m e n t of in is h ig h e r le a s t p r o v id e s e c u r itie s s a tis fa c to r ily b e a r in g at a new rep orted s m a ll ir r e g u la r ity is s u e s s o m e w h a t le s s r e a d i l y m on th . tow a rd grade th a n to m e d iu m grade T h e la r g e s t o ffe r in g o f th e m o n th of C o n s o lid a te d b o n d s d u e in 11 and w ere th e m o n th . per F ed era l in end q u oted at a s lig h t cen t bonds of th e in d iv id u a l o f w h ic h about $ 5 8 ,0 0 0 ,0 0 0 3 of per at 1 00 % p r e m iu m in cen t a t th e end of o u ts ta n d in g 4 % p u b lic flo ta tio n s has 1935, show n b u t r e m a in s f a r b e lo w F o r e ig n th e on Ju n e F ederal L an d w ere in a lth o u g h c o n s id e r a b le part th e y of th e c o n tin u e d to ta l. N ew c o n s is te n t g row th s in c e 1933, th e y e a rs p r io r to 1 93 2 . E x ch a n g e s P o litic a l and fin a n c ia l B an k s, hands w h ile d e v e lo p m e n ts in F ra n ce tin u e d to b e th e m a jo r in flu e n c e in th e fo r e ig n m a rk et d u r in g J u n e . Loan T h ese b o n d s w ere to red eem a p r ic e s iss u e s . F arm th a n fo r ity have w a s t h e $ 8 3 ,0 0 0 ,0 0 0 1 9 5 6 , w h ic h w e r e o ffe r e d 1936 to M a rk e t re s p o n s e c o n tin u e d to b e m o re fa v o r a b le t o h ig h is s u e th e in accou n t c a p ita l o b ta in e d b y d o m e s tic c o r p o r a t io n s t h r o u g h s e c u r o f o u ts ta n d in g s e c u r itie s , th e m a r k e t a p p e a r e d t o a b s o r b new to c a p ita l. g e n e r a l, a lth o u g h , f o l som e s m a lle r con exch an ge P r e s s u r e a g a in s t F r e n c h e x c h a n g e a g a in b e c a m e s e v e re in th e e a r ly p a r t o f th e m o n th , b u t a b a ted c o n s id e r a b ly th e r e a fte r . A w ave of in d u s tr ia l s tr ik e s , w h ic h o c c u r r e d s im u lt a n e o u s ly w it h t h e a s s u m p t io n o f o ffic e b y th e n e w P o p u l a r F r o n t G o v e r n m e n t e a r ly in J u n e , s e r v e d t o in t e n s ify r e g a r d in g The th e F ren ch a c c e n tu a tio n th e fe e lin g o f a p p r e h e n s io n fin a n c ia l a n d of p ressu re m on eta ry a g a in s t th e s it u a t io n . fr a n c w as th e r e m a in d e r w e r e h e ld b y v a r io u s G o v e r n m e n t a g e n c ie s . r e fle c te d O n J u n e 3 0 , $ 7 5 ,0 0 0 ,0 0 0 o f N e w Y o r k S t a t e n o t e s m a t u r g o ld in g c o u n t r y , a n d in a fu r t h e r a d v a n c e in th e p o u n d s te r lin g in ce n t. M ay 1937 w ere s o ld a t a p r ic e 0 00 o f 15 y e a r 3 % w h ic h y ie ld 0 .4 0 per p e r ce n t r e fu n d in g d e b e n tu re s a t p a r, im m e d ia te ly la r g e flo ta tio n s w ent w h ic h to F a lls P o w e r 3% c e n t b o n d s m a t u r in g per and th e a wTe r e N ia g a r a 104, to T h e T e x a s C o r p o r a t i o n o n J u n e 1 6 is s u e d $ 6 0 ,0 0 0 ,s lig h t w e ll p r e m iu m . r e c e iv e d O th er w ere The C o . $ 3 2 ,5 0 0 ,0 0 0 is s u e o f r e f u n d i n g W is c o n s in in M a rch P u b lic 1 9 6 6 , o ffe r e d S e r v ic e at C o r p o r a t io n $ 2 5 ,0 0 0 ,0 0 0 is s u e o f r e f u n d i n g 4 ’s m a t u r in g in 25 yea rs, o ffe r e d a t 9 9 % . In in b o th fr o m term s tio n th e of in F ran ce, of b o th to fr a n c -d o lla r N ew per a c c e le r a te d m ost fra n c s of ra te g o ld Y o r k , u n til J u n e fo rw a r d annum fr a n c s m ovem ent s h ip p e d W ith in th e th e p o in t t h r o u g h o u t th is p e r io d . In th e ta k e n f o r s h ip m e n t t o th e U n it e d m on th s th is is flo w rea ch ed c o m p a r e d w it h th e a v e r a g e f o r th e fir s t h a lf o f th e y e a r s and a fr o m B a n k o f F r a n c e f o r th e w e e k e n d e d J u n e 5. in d ia g r a m th e fir s t s ix of year 1 9 2 5 t o 1 9 2 9 , a n d w it h th e fir s t s ix m o n t h s o f e a c h A s th is t o t a l is t h e l a r g e s t s in c e r e fu n d in g a lo n e in o p e r a t io n s . d ia g r a m 1930, due C orp ora te th e fir s t h a lf o f 1 9 3 6 in d ic a te s , c h ie fly to r e fu n d in g exceeded by th e th e 1936 heavy o p e r a t io n s $ 3 0 0 ,0 0 0 ,0 0 0 g o ld lo s s of $ 1 0 0 ,0 0 0 ,0 0 0 O w in g t o th e in t e n s ifie d w h ic h th e op era ted pound over 76% S ta te s. its la r g e s t p r o p o r t io n s F ren ch ad van ced fu r th e r , r e a c h in g fr a n c s and t o u c h in g a on lo a n r e fu n d in g 1935, is s u e s , S ta te , oth er th a n m u n ic ip a l, s e c u r itie s and gu ar a n te e d b y th e U n ite d S ta te s G o v e rn m e n t, w e re so m e w h a t June above s in c e th e 16. T h is F ebru ary A u gu st 1934, d o lla r 1936 w hen th e rep orted fo r th rou g h h ig h cen t w eeks a of ou t m on th by th e s te r lin g , th e d o lla r , q u o ta tio n s lig h t ly of over o n J u n e 4 a n d a g a in q u o ta tio n peak, in dem and and $ 5 .0 4 d u r i n g t h e c o u r s e o f t r a d i n g th rou g h w as d ir e c tly lo w in g fa rm th ree T h is g o ld e a r ly b o th t h e t o t a l o f a ll s e c u r it y is s u e s in t h e fir s t h a l f o f 1 9 3 5 . F o l in c r e a s e s th ree per e n d e d J u n e 1 9 , th e g o ld h o ld in g s o f th e B a n k o f F r a n c e o f d o m e s tic year. of P a r is on 30 th e v o lu m e su bsequ en t fr o m d e c r e a s e d $ 2 0 4 ,0 0 0 ,0 0 0 , o f w h ic h n e a r l y $ 1 6 0 ,0 0 0 ,0 0 0 w a s th e a c c o m p a n y in g s e c u r itie s flo a te d excep fir m n e s s , d is c o u n t above of th is n e ig h b o r h o o d s h ip p in g q u oted to th e s lig h t t e m p o r a r y 19, a n d w as w as d o lla r s . of r e m a in e d e ffe c tiv e ou tw a rd w h ic h and o c c a s io n a l p e r io d s $ 0 .0 6 5 8 % , th e m on th an and m easu res w as w as ta k e n fr a c t io n a lly th e to h ig h e s t e ffe ctu a te 53 FEDERAL RESERVE AGENT AT NEW YORK th e S ilv e r p e r io d P u rch ase A ct of 1934 o f m o d e r a te w e a k n e ss in The a b a tem en t o f p re ssu re s u s p e n s io n o f th e ou tw a rd w ere fo llo w e d by a a g a in s t th e g o ld fra n c The and m ov em en t fr o m th e F ran ce fo llo w e d a n a d d re s s o n J u n e 19 in th e C h a m b e r o f D e p u t ie s by th e F ren ch G o v e r n m e n t ’s M in is te r m on eta ry p rogram in c lu d e d to s p e c u la tio n ch eck a of and F in a n c e , fin a n c ia l r e je c tio n of a g a in s t th e o u tlin in g th e p rogram . d e v a lu a t io n , fra n c , T h is p e n a ltie s and T h e fr a n c -d o lla r ra te p r o m p tly w e n t a b o v e th e e ffe c tiv e g o ld to a m o d e ra te th e u pw ard m on th , cou n t th e on p o in t fr o m te n d e n cy c lo s in g th ree e q u iv a le n t at and on fo rw a r d a b ou t 15 c o n tin u e d d u r in g $ 0 .0 6 6 3 % m on th of P a r is per th e fra n c s la n d th e g o ld v ir tu a lly The a and recovery m o d e ra te cea sed in in fr o m th e F ren ch net p o u n d -d o lla r o u tflo w ra te th ir d to The of red u ced The w eek w as $ 5 .0 1 % and of m on th . a c c o m p a n ie d in s te r lin g , on June a d v a n ce d to $ 5 .0 3 % e ffe c tiv e s im u lt a n e o u s ly a d van ces by th e 22, b u t o n th e 2 7 th . Closing Cable Rates at New York $ .1694 .2207 4.9413 .06639 .4048 .6837 .0831 .2483 .1376 .2546 .3285 B elgium ........................................... Denm ark......................................... E ngland........................................... France.............................................. Germ any.......................................... H olland............................................ It a ly ................................................. N orw ay............................................ Spain................................................ Sw eden............................................ Switzerland..................................... June 29, 1936 $ .1692 .2231 4.9950 .06583 .4024 .6752 .0786 .2511 . 1365 .2577 .3230 fo llo w in g F ran ce. redu ced, on g o ld , th e s la c k e n in g of th e T h e b a n k ’s o t h e r r a t e s w e r e w ith th e w h ic h e x c e p tio n r e m a in s at of 9 th e per ra te ce n t, as T h e N e th e r la n d s B a n k r a te , w h ic h h a d b e e n r a is e d fr o m 3 % to 4 % p e r ce n t o n J u n e 4, w a s re d u c e d to 4 p e r ce n t e ffe c tiv e th e 2 5 th C o m m o d ity W ea th er m any a n d to 3% p e r ce n t e ffe c tiv e th e 3 0 th . P r ic e s .9988 .3295 .0857 .8000 .9984 .3330 .0859 .8000 .9975 .3350 .0859 .8000 Japan............................................... Ind ia................................................ Shanghai.......................................... .2909 .3737 .3956 .2930 .3774 .2988 .2942 .3796 .3013 r e s u lte d u n fa v o r a b le in fo r th e s u b s t a n t ia l p r ic e grow th ad van ces n u m b e r o f a g r ic u lt u r a l c o m m o d it ie s d u r in g J u n e . p r ic e s show ed m on th , a n d on June m a ted little th e m ovem ent in th e G overn m en t J u n e 1 0 , in w h ic h e a r ly 1 crop b u s h e ls , about a W heat part of th e r e p o r t , is s u e d w in te r w h e a t p r o d u c tio n a t 4 8 1 ,8 7 0 ,0 0 0 of in w a s e s ti 1 8 ,0 0 0 ,0 0 0 b u s h e ls a b o v e th e M a y 1 e s tim a te , a n d th e s p r in g w h e a t c r o p w a s e s tim a te d at about e ffe ct o n 2 0 0 ,0 0 0 ,0 0 0 q u o ta tio n s . h ow ever, sh arp b u s h e ls , D u r in g a p p a r e n t ly th e r e m a in d e r in c r e a s e s w ere show n had o f th e in w heat p r ic e s , r e fle c t in g p r iv a t e r e p o r ts o f d a m a g e to th e s p r in g w heat crop by d r o u g h t in th e N o rth w e s t a n d h ig h te m p e r a t u r e s t o g e t h e r w it h in s e c t in fe s t a t io n in o th e r a re a s. $ .1691 .2245 5.0263 .06633 .4036 .6810 .0787 .2527 .1375 .2593 .3275 C anada............................................ A rgentina........................................ B razil............................................... Uruguay.......................................... co n d itio n s crops m on th , M ay 29, 1936 June 29, 1935 2 6 th , fix e d o n M a y 7. little Exchange on th e o u tflo w o f g o ld fr o m to oth er S w itz e r th e o f F r a n c e w a s lo w e r e d 6 to 5 p e r c e n t e ffe c t iv e J u n e 2 4 a n d a g a in t o 4 p e r cen t fo r C h a n g e s o f th e B a n k d is th e s e co n d h a lf o f m ovem ent r e c e d in g s te r lin g s u b s e q u e n t ly w as H o lla n d exchan ge d ow n w ard 27. a year. g o ld b lo c c u r r e n c ie s a ls o r e c o v e r e d in June, r e m a in d e r June cen t show R a te d is c o u n t ra te fro m m easu res d e s ig n e d to b r in g a b o u t a r e p a t r ia t io n o f F r e n c h c a p ita l. s h ip p in g C e n tra l B a n k d o lla r e x c h a n g e . A s p e c ia l 19 G overn m en t d e s c r ib in g th e crop s e r io u s report w as dam age w e a th e r in th e n o r th w e s t e r n a re a . is s u e d ca u sed by on June th e dry C o n s e q u e n t ly , th e ca s h p r ic e f o r N u m b e r 1 N o r th e r n w h e a t a t M in n e a p o lis ro se to $ 1 .3 5 % a b u s h e l, w h ic h is 20% ce n ts o f M a y a n d v i r t u a l l y a t t h e y e a r ’s h ig h . above th e end T h e S ep tem b er fu t u r e f o r w h e a t a t C h ic a g o a ls o a d v a n c e d 11% 96% ce n ts to 6 8 % ce n ts a b u s h e l, a n d s p o t c o r n ro s e 7 % ce n ts a b u s h e l, th e h ig h e s t s in c e r e a c tio n , h o w e v e r , w a s s h o w n in la s t ce n ts to N ovem b er. Som e g r a in p r ic e s to w a r d th e clo s e o f th e m o n th . H ig h e r p r ic e s f o r t r u c k c r o p s , e s p e c ia lly p o t a t o e s , a ls o r e s u lte d fr o m G o ld p roved The m ovem ent of g o ld to th is cou n try w h ic h began d u r in g th e la s t w e e k o f A p r i l c o n tin u e d in la r g e v o lu m e th ro u g h th e th ir d w eek in th e r e w e r e n o r e c e ip t s fr o m g o ld , h ow ever, c o n tin u e d June, but a fte r th e F r a n c e a n d H o lla n d . to a r r iv e fr o m 23rd Som e I n d ia . ta ry g o ld sto ck of $ 2 9 ,1 0 0 ,0 0 0 fr o m $ 6 ,9 0 0 ,0 0 0 $ 2 ,1 0 0 ,0 0 0 On th e t r a lia th e fr o m U n ite d In d ia , by and and assay $ 2 0 0 ,0 0 0 w as g o ld g o ld fo r sto ck m a te ly fo r e ig n of cou n try $ 2 0 5 ,0 0 0 ,0 0 0 o f a ll t r a n s a c tio n s . a t th is d u r in g w as th e P r iv a te s e v e r a l tim e s fa v o r a b le w e a th e r, a n d ce n ts a pound, but e s tim a te s d u r in g sp ot cotton s u b s e q u e n tly of th e June cotton b ecau se ro se as h ig h d e c lin e d to crop of un a s 1 2 .4 9 c lo s e th e m o n t h a t 1 2 .3 9 c e n t s a p o u n d , c o m p a r e d w i t h 1 1 .7 7 c e n t s A s a r e s u lt o f a r e d u c t io n in m a r k e t in g s th e a v e ra g e p r ic e o f h o g s m a d e a n a d v a n c e m o r e th a n s u ffic ie n t to can cel th e r e c e s s io n in M ay. The p r ic e of s te e r s c o n t in u e d t o m o v e s o m e w h a t lo w e r d u r in g th e fir s t M e x ic o , p art fro m A us of th e m on th , but s u b s e q u e n tly recovered a la r g e p a r t o f t h is lo s s . R u s s ia . fr o m F o llo w in g th e d e c lin e s show n in th e tw o p r e v io u s m o n t h s , a s u b s t a n t ia l a d v a n c e o c c u r r e d in r a w s ilk p r ic e s d u r in g J u n e , th e s p o t q u o ta t io n r is in g 10 ce n ts to $ 1 .6 1 % to b e r e c e iv e d o ffic e s , b u t w a s m o r e accou n t th e to E n g la n d , r e c e iv e d c o n tin u e d a n e t in c r e a s e o f $ 2 4 ,8 0 0 ,0 0 0 i n m ark fr o m fr o m b e n e fic ia l. lo w e re d F ran ce, C h in a . N e w ly m in e d a n d s c r a p a t th e m in ts fr o m $ 1 3 ,6 0 0 ,0 0 0 $ 1 ,5 0 0 ,0 0 0 $ 6 0 0 ,0 0 0 f r o m a m ou n ted cam e $ 2 ,4 0 0 ,0 0 0 C o lo m b ia , C oa st, S ta te s $ 1 6 0 ,6 0 0 ,0 0 0 H o lla n d , fr o m W est and of w h ic h w ere a t th e e n d o f M a y . T o t a l im p o r ts o f g o ld a t N e w Y o r k a ffe c tin g th e m o n e $ 2 2 0 ,0 0 0 ,0 0 0 a d v e rs e w e a th e r c o n d itio n s , a lth o u g h r a in fa ll in th e e a s te rn S ta te s in th e la tt e r p a r t o f th e m o n th M o v e m e n t g o ld bank. th a n o ffs e t h e ld u n d e r e a r The in c r e a s e d by m on th a as m on eta ry a p p r o x i net r e s u lt a pound. h ig h e r R ayon d u r in g and d o m e s tic th e m o n th . w ool A m ong p r ic e s th e a ls o m oved p r in c ip a l m e ta ls , s c r a p s te e l a t P i t t s b u r g h d e c lin e d f u r t h e r t o $ 1 3 .2 5 a t o n , a le v e l $ 2 .5 0 b e lo w th e y e a r ’s h ig h F e b r u a r y , b u t la t e r r o s e t o $ 1 3 .5 0 . rea ch ed la s t T h e p r ic e o f tin a ls o s h o w e d fu r t h e r n e t lo s s d u r in g J u n e . c o n tin u e d at p r e v io u s ly cu rren t p o in t O th e r m e ta l p r ic e s le v e ls . 54 MONTHLY REVIEW, JULY 1, 1936 E m p loy m en t and P ayrolls B e tw e e n th e th e num ber fa c to r ie s m id d le of A lt h o u g h th e o f A p r il w ork ers in c r e a s e d r ic s , in d u c e d b y th e r is e in r a w fo r th e in c r e a s e s and e m p lo y e d in th e in fo u r th ea ch of m id d le N ew of c o n s e c u tiv e th e M ay Y ork past S ta te m on th . tw o m on th s m on th . ch an ge rose c o tto n p r ic e s d u r in g th e T h e g e n e r a t i o n o f e l e c t r i c p o w e r , wTh i c h d o e s n o t s u b s t a n t ia lly fu r th e r fr o m d u r in g M ay th e fir s t to June h a lf of in m ost th e years, m on th , but b it u m in o u s c o a l m in e s w e r e s o m e w h a t le s s a c t iv e t h a n in M ay. w e r e s m a ll, th e m o v e m e n t s w e r e c o n t r a r y t o th e u s u a l s e a sonal te n d e n cy and c o n s e q u e n tly th is b a n k ’s ber 1930. r a is in g th e F a ctory th e a d ju s t e d h ig h e s t num ber p a y r o lls p o in t in d e x s in c e o f w ork ers a ls o a d v a n c e d in u n s e a s o n a lly , a p p r o x im a te ly A u gu st th e 1931. b u ild in g 2 per cen t to In crea ses in th e m a te r ia l, m e ta l a n d m a c h in e r y , a n d c h e m ic a l g r o u p s w e r e o ffs e t o n ly in p a r t b y d e c r e a s e d e m p lo y m e n t in th e c lo t h in g , sh oe, a n d p a p e r in d u s tr ie s . F or th e cou n try as a w h o le , p r iv a te e m p lo y m e n t in m a n u fa c t u r in g a n d n o n m a n u fa c t u r in g in d u s tr ie s c o v e r e d b y r e p o r t s to th e D e p a r t m e n t o f L a b o r in c r e a s e d f o r th e th ir d c o n s e c u tiv e m o n th in th e p e r io d b e tw e e n A p r il 15 a n d M a y 1 5 , b u t th e in c r e a s e w a s s m a lle r t h a n of th e tw o p r e c e d in g seasonal ten d en cy , w hat fu r th e r in m on th s. fa c to r y M ay C on tra ry e m p lo y m e n t r a is in g th e to in e ith e r th e u sual a d va n ced som e s e a s o n a lly a d ju s t e d in d e x 1 p e r c e n t to a le v e l a b o u t 5 p e r ce n t h ig h e r th a n a y e a r a g o ; th e im p r o v e m e n t w a s la r g e ly con cen tra ted th e d u r a b le g o o d s in d u s t r ie s , w h ic h a s a g r o u p g a in o f 2 p e r c e n t in th e n o n d u r a b le due p r im a r ily le a th e r to a b le g o o d s grou p in v o lu m e o f in d u s tr ia l p r o d u c tio n , as m e a s u r e d grou p season al r e g is te r e d of th e The F ed eral in d e x R eserve sto o d S y ste m , at 101 as c o m p a r e d w ith M a y 1935. per 1 00 in d ecreases C om p ared has show n w ith an in th e a year 2 in c r e a s e in A p r il, 93 12 o f th e 16 grou ps su rveyed by th e e m p lo y m e n t D ep a rtm en t of L a b o r s h o w e d in c r e a s e d e m p lo y m e n t f r o m A p r il to M ay. The b u ild in g p r in c ip a l s tr u c tio n g a in w h ic h rep orted M a y th a n in A p r il. in g and in th e s iz a b le g a in s . occu rred 15 in p r iv a te per cen t m ore con w ork ers in E m p lo y m e n t in a n th r a c ite c o a l m in v a r io u s s e r v ic e in d u s t r ie s a ls o rep orted E m p lo y m e n t in r e t a il t r a d e r e m a in e d p r a c t ic a lly u n c h a n g e d , w h ile e m p lo y m e n t in w h o le s a le t r a d e P r o d u c tio n I n d u s t r ia l o u t p u t in th e u sual c u r ta ilm e n t e a r ly p art ch eck ed of of in g en era l d oes n o t a p p e a r to seasonal s la c k e n in g in a u t o m o b ile p r o d u c tio n occu rred th e th e m on th la tte r but w as p a rt, due w e ll have June. rep orted to to S om e in have s u s ta in e d th e been s a le s o f c a r s . S te e l m ills a p p a r e n t ly e q u a le d o r e x c e e d e d le v e l R e q u ir e m e n ts cu rren t t io n , of ta in e d , and of and d u r in g ord ers p r ic e s a fte r J u ly d e c lin e s th e p r o d u c tio n r a ilw a y , v o lu m e th a t of in som e pron ou n ced June m ills a u to m o b ile d e c lin e d , as th e in d u s tr y fo r dem and fo r but cou rse booked in uses of w as June a in M ay. s te e l d u r in g p r o d u c tio n w hen a s s e m b lie s o p e r a t io n s o f th e in d e c lin e d rea ch ed M ay p r e c e d in g w ere th e 5 m on th ; w e ll as p r o d u c tio n in c lu d e d in th e r e c e iv e d by m a c h in e season al d e c lin e con stru c w e ll m a in c o n s id e r a b le a n tic ip a tio n a r u le , b u t in c r e a s e d th is o u tp u t year it in s te a d , is th e th e a v e ra g e o f A p r il, season al p e a k ; per and c o a l d e c lin e d 6 p e r ce n t. as g r a d u a lly p e r c e n t b e lo w ce n t b e lo w p r o d u c tio n cotton m ill th e h ig h ra te of b itu m in o u s O u t p u t o f ir o n , le a d , a n d z in c , of e le c tr ic pow er B o a r d ’s i n d e x , r o s e in tool b u ild e r s fo llo w in g th e w h ic h is M ay, and show ed g a in in o n ly th e not ord ers a s m a ll p r e c e d in g m on th . (Adjusted for seasonal variations and usual year to year growth) 1935 1936 M ay Mar. Apr. M ay 47 54 52 63 59 68 48 72 71 81 56 78 71 85 61 82 Automobiles Passenger ca rs............................................... M otor trucks................................................. 51 78 66 107 69 102 66 101 Fuels Bituminous coal............................................ Anthracite coal.............................................. Petroleum, crude.......................................... Petroleum products...................................... Electric p ow er............................................... 72 82 68 65 72r 77 53 71 68 75 73 125 56 74 104 84 98 55 91 101 92 87 56 94 100 89 93 54 88 lO lp 72 78 87 81 86 89 112 87 83 83 84 90 81 81 45 53 74 60 49 64 72 80 58 83 70 96 Metals Textiles and Leather Products Cotton consum ption.................................... W ool consumption........................................ Silk mill a ctiv ity ....................................... R ayon deliveries*.......................................... of Foods and Tobacco Products Meat packing................................................. W heat flour.................................................... Refined sugar deliveries.............................. T obacco products.......................................... 89 77 72 69 76?) 80p 81p 73 p 78 p 84 Miscellaneous Newsprint paper............................................ Machine tools................................................ 59 7Op 97 h ig h e r rep orted fo llo w in g th e m a rk et fo r co tto n p Preliminary. * For quarter ended. B u ild in g fo r A c t i v i t y a t c o t t o n t e x t ile m ills a ls o s t r e n g t h e n in g in p r e v a ilin g m is c e lla n e o u s w as 1. o p e r a t io n s A p r il a n d r e t a il th e a verage in a u t o m o b ile m on th , a n d w as 4 % d e c lin e d s o m e w h a t. show n 85 d u r ers as in M a y 1 9 3 5 . in M arch , a n d T h e ra te o f and th e e m p lo y m e n t in d u s tr ie s M ay. average M a y , a t 71 p e r cen t p e r c e n t h ig h e r th a n in t r ie s a r e e m p lo y in g p r a c t ic a lly th e s a m e n u m b e r o f w o r k th e n o n m a n u fa c tu r in g in in 1 9 2 3 -2 5 w e r e a t th e h ig h e s t p o in t s in c e A p r i l 1 9 3 0 . o f n e a r ly 11 p e r c e n t w h ile th e n o n d u r a b le g o o d s in d u s A m ong s lig h t ly d e c lin e , t e x t ile ago rose ce n t o f th e S te e l m ill o p e r a t io n s in o f c a p a c ity , w e re 2 y show ed a a s lig h t by th e s e a s o n a lly a d ju s t e d in d e x o f th e B o a r d o f G o v e r n o r s th e n u m b e r o f e m p lo y e e s , w h e r e a s goods in d u s t r ie s . The a d ju s t e d in d e x o f 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 O c t o a fa b A s la c k e n in g in s o m e t y p e s o f b u ild in g a c t iv it y d u r in g M a y r e s u lte d in a d e cre a s e o f 8 p e r c e n t in t o ta l a w a r d s o f b u ild in g cov ered and by th e e n g in e e r in g co n tra cts F . W . D odge in th e C o r p o r a tio n d e c lin e w a s c o n fin e d t o th e h e a v y e n g in e e r in g n o n r e s id e n tia l ty p es of b u ild in g , and 37 S ta te s rep orts. and r e s id e n t ia l The oth er con t r a c t s s h o w e d a f u r t h e r in c r e a s e o f 5 p e r ce n t, co n tr a r y to th e u su a l se a so n a l m o v e m e n t. T o t a l c o n tr a c ts in M a y FEDERAL RESERVE AGENT AT NEW YORK w e re a b o u t 7 0 p e r ce n t a b o v e th o se p la c e d in th e 55 PER CENT corre s p o n d in g m o n th o f 1 9 3 5 ; c o n tr a c ts f o r h e a v y e n g in e e r in g p r o je c t s w e r e m o r e th a n d o u b le th e v o lu m e o f a y e a r a g o , a n d r e s id e n t ia l b u ild in g c o n t r a c t s w e r e 5 6 p e r c e n t la r g e r th a n in M a y In 1935. th e S e co n d F e d e r a l R e s e r v e D is t r ic t th e d e c lin e in to ta l b u ild in g c o n s tr u c tio n fr o m A p r il to M a y w as som e w h a t m o re p r o n o u n c e d th a n in o th e r a rea s d u e p r in c ip a lly to a s h a r p e r r e d u c tio n in c o n tr a c ts f o r p u b lic w o r k s a n d u t ilit ie s . R e s id e n t ia l c o n t r a c t s in th is d is t r ic t , h o w e v e r , in c r e a s e d som ew h at m ore th a n in th e to ta l of th e 37 S ta te s. D a t a f o r th e fir s t h a lf o f J u n e in d ic a t e a fu r t h e r s lig h t r e d u c tio n in th e v o lu m e o f to ta l b u ild in g c o n tr a c ts in S ta te s. 37 D e c lin e s in th e c la s s ific a t io n s e m b r a c in g r e s id e n tia l a n d n o n r e s id e n tia l b u ild in g oth er th a n heavy e n g i n e e r in g w o r k w e r e la r g e ly o ffs e t b y a n in c r e a s e in a w a r d s Indexes of Sales in Three Major Types of Retail Trade (Adjusted for seasonal variation; 1929-31 average — IOO per cent) f o r p u b lic w o r k s a n d u t ilit y p r o je c t s . In d e x e s o f B u s in e s s A c t iv ity c e p tio n D u r i n g th e fir s t h a l f o f J u n e s o m e s la c k e n in g a p p e a r s o f tw o m o n th s in s a le s h a v e b e e n 1934, u rban a t a c o n s id e r a b ly d e p a r tm e n t sto re lo w e r le v e l r e la tiv e to to h a v e o c c u r r e d in th e u p w a r d m o v e m e n t in th e v o lu m e th e 1 9 2 9 -1 9 3 1 v o lu m e th a n th e o t h e r t y p e s o f r e t a il t r a d e o f d is tr ib u tio n o f g o o d s th a t w a s e v id e n t in M a y . s in c e N ew Y ork m a in e d M e tr o p o lita n w e ll above area a year d ep a rtm en t ago, but sto re appear I n th e s a le s to re have ad th rou g h ou t of th e C om m erce U n ite d on r e t a il S ta te s tra d e in d ic a te in th a t 36 sto re of 1933. s a le s in Th^ M ay a d ju s t e d 1936 w as s a le s 1935 a year ago, ad verse w arm e ffe cts w e r e w ea th er in fe lt som e fr o m p a rts d rou gh t of th e and M ay L ittle ch a n g e fr o m th e M a y Primary Distribution Car loadings, merchandise and m isc........ Car loadings, oth er....................................... th e m e r c h a n d is e and m is c e lla n e o u s or b u lk fr e ig h t grou ps. In crea ses p r e d o m in a te d in M ay u r e s o f g e n e r a l b u s in e s s a c t iv it y g o o d s , th e m ost p r o n o u n c e d tra d e. T h e a c c o m p a n y in g th ree im p o r ta n t lin e s of am ong v a r io u s d ia g r a m r e t a il m eas a n d th e d is tr ib u tio n g a in s t a k in g p la c e sh ow s th e t r a d e — s a le s in cou rse of of r e t a il of gen eral m e r c h a n d is e in s m a ll t o w n s a n d r u r a l a r e a s , d e p a r t m e n t store s a le s in u rban lo c a lit ie s , and v a r ie ty sto re s a le s — e a c h a d ju s t e d f o r th e u s u a l s e a s o n a l v a r ia t io n s , a n d o n a 1 9 2 9 -1 9 3 1 b a s e . S in c e 1 9 2 9 c o n s id e r a b le d iffe r e n c e s h a v e occu rred m ov em en ts in th e of th e th re e typ es b u t in e a c h ca s e a n u n s e a s o n a l in c r e a s e in th e in d e x u p to th e h ig h e s t p o in t in M ay of tra d e b rou gh t several years. The i n d e x o f s a le s o f g e n e r a l m e r c h a n d is e i n s m a ll t o w n s a n d r u r a l a re a s, w h ic h ch ases of goods a m p litu d e of by r e fle c ts t o fa rm e rs, m ovem ent th a n 1 92 9 p e a k to th e 1 9 3 3 lo w a c o n s id e r a b le has th e show n oth er a e x ten t p u r m u ch tw o; in p r o g r e s s w h ic h p o in t th ere w a s a d r o p h a s r e s u lte d in th e M ay 65 59 52 74r 66 67 52 71 66 72 59 72 72 69 60 77 74 64 59 84 78 75 61 81 95 65 85 87 76r 71r 61 85 83r 66 81p 88 82 76 59 88 90 68 75p 65 43r 66 45r 66 41r 65 v 4 2p 65 72 71 70 New life insurance sales.............................. Factory employment, United States........ Business failures............................................ Building contracts........................................ New corporations formed in N. Y . State. 41 54 82 43 25 55 48 49 85 35 41 54 43 49 86 33 45 53 40 53 87 p 35 43p 55 General price level*...................................... Composite index of w ages*........................ Cost of livin g *............................................... 143 186 140 151 189 141 150 188 141 150p 189p 142 Distribution to Consumer Department store sales, U. S ..................... Department store sales, 2nd D ist............. Chain grocery sales...................................... Other chain store sales................................ Mail order house sales................................. Advertising..................................................... New passenger car registrations............... Gasoline consum ption.................................. General Business Acitivity Bank debits, outside New Y ork C it y .. . . Bank debits, New York C ityr................... Velocity of demand deposits, outside New York C it y ................................................... Velocity of demand deposits, New York of p Preliminary. th e 66 F o r e ig n recovery o f 7 0 p e r c e n t o f t h e lo s s , a n d t h e M a y i n d e x r e a c h e d t h e h ig h e s t p o in t s in c e D e c e m b e r 1 9 2 9 . Apr. w id e r fr o m p e r c e n t , b u t s in c e t h a t t im e a m a r k e d u p w a r d m o v e m e n t has been Mar. 58 60 47 69 le v e l o c c u r r e d in th e m o v e m e n t o f r a ilr o a d fr e ig h t , e ith e r in of th e cou n try . W h o le s a le tr a d e g a v e e v id e n c e o f b e in g w e ll m a in ta in e d d u r in g th e fir s t h a lf o f J u n e . in d e x about 1936 c o n tin u e d to r u n h ig h e r th a n in th e c o r r e s p o n d in g p e r io d u n u s u a lly at (Adjusted for seasonal variations, for usual year to year growth, and where necessary for price changes) citie s w h ile sum m er sa m e le v e l as in A u g u s t 1 9 3 1 . v a n c e d le s s t h a n s e a s o n a lly o v e r M a y , a n d r e p o r t s t o th e D ep a rtm en t th e d e p a rtm en t T h e d e c lin e in v a r ie t y in c r e a s e d 000 , 0 0 0 , * 1913 average = 100. T ra d e M e r c h a n d is e M ay r Revised. w h ile e x p o rts fr o m u n s e a s o n a lly im p o r ts th e and show ed U n ite d w ere th e S ta te s v a lu e d u s u a l s lig h t d u r in g at $ 2 0 1 ,- decrease s t o r e s a le s w a s m u c h le s s s e v e r e , a m o u n t in g t o 3 5 p e r c e n t, and a n d o f th is o v e r t w o -t h ir d s h a s b e e n r e c o v e r e d . 0 0 0 ,0 0 0 e x p o r t b a la n c e w a s th e fir s t t o o c c u r s in c e J a n u T he con w ere v a lu e d at $ 1 9 1 ,0 0 0 ,0 0 0 . The r e s u lt in g $ 1 0 ,- t r a c t io n in d e p a r t m e n t s t o r e s a le s in u r b a n lo c a lit ie s w a s a r y , a n d c o m p a r e d w i t h a n e x c e s s o f i m p o r t s o f $ 5 ,0 0 0 ,0 0 0 g rea ter in th a n in v a r ie ty s to re s a le s but le s s th a n in th e M ay o f la s t y e a r . E x p orts show ed a g a in g e n e r a l m e r c h a n d is e s to r e s, a n d n o t m u c h m o r e th a n h a lf cen t a n d o f th e lo s s h a s b e e n r e g a i n e d ; c o n s e q u e n t ly , w it h th e e x - c o n t in u in g th e in c r e a s e s o f th e p a s t t w o y e a r s . im p o r ts a g a in of 12 per cen t of over M ay 22 per 1935, MONTHLY REVIEW, JULY 1, 1936 56 D ep a rtm en t T h e v a lu e o f a ll m a n u fa c t u r e d p r o d u c t s e x p o r t e d d u r in g M ay r e m a in e d p r e c e d in g m on th , at about but th e sam e a ccou n ted fo r le v e l as c o n s id e r a b ly th e s e c o n d c o n s e c u tiv e m o n th . E x p orts 1935. p ro d u cts in a m a jo r ity of of m ore th e fin is h e d s to ck s r e t a il v a lu a t io n , w e r e s lig h t ly t h a n h a lf o f th e in c r e a s e o v e r a y e a r a g o in t o t a l e x p o r ts . of sto re th e in ca ses d ep a rtm en t sto re s w as m e r c h a n d is e h ig h e r th a n on hand, la s t y e a r at fo r T h e ra te o f c o lle c tio n s in s lig h t ly lo w e r th a n in M ay s h o w e d la r g e r g a in s o v e r 1 9 3 5 th a n in A p r i l ; th e in c r e a s e over a year ago in num ber of m o to r tru ck s ex p o rte d c e n t, a lth o u g h th e a c c o m p a n y in g in c r e a s e s in v a lu e w e r e not as la rg e , a p p a r e n tly due to th e s a le abroad la r g e r p r o p o r t io n o f lo w e r p r ic e d c a r s th is y e a r . of a Locality N o ta b le in c r e a s e s o v e r a y e a r a g o lik e w is e o c c u r r e d in e x p o r t s o f a g r ic u ltu r a l, in d u s tr ia l and m a n u fa c t u r e s , a n d r e fin e d p u rch a ses in o f A m e r ic a n A p r il, co n tra ry to e le c tr ic a l p e tr o le u m cotton th e m a c h in e r y , p ro d u cts. w ere s lig h t ly la r g e r th a n u su a l season al te n d e n cy , and s h o w e d in c r e a s e s o v e r a y e a r a g o o f 2 2 p e r c e n t in v o lu m e and 18 per A m ong c e n t in th e v a lu e . in d iv id u a l a g o w e r e n o t as u n ifo r m im p o r ts , r e c e ip t s p ro d u cts, le u m , 55 per to an q u a n tity num ber a ls o in On s e a s o n a lly R e c e ip ts of in c r e a s e in over lik e w is e sugar cru d e a year ra w year cru d e hand, in m a jo r o f w h ic h fr o m a g a in th e show ed R e la t iv e ly occu r in of due in c r e a s e s w ood a n d p a p e r p r o d u c ts , b e v e ra g e s, w o o l, a n d c o tto n . W h o le s a le D u r in g fir m s in lo w e r The S to re T ra d e to ta l th a n of s a le s la s t y e a r , d e c lin e s th e in th e and sto re s in th e M e tr o p o lita n area of N ew of s ilk S hoe p e r io d th a n year ago, but show ed u s u a l se a s o n a l e x p a n s io n T ota l M ay s a le s of som ew hat le s s th a n th e over M ay. th e grocery, fir s t in dru g, goods w ere d ep a rtm en t a sto re s con cern s a g a in rep orted a y e a r a g o , a lth o u g h th e s h o p p in g M ay in th e d a ily in cr e a s e ra te s in c e of s a le s M arch w as 1934. and 13 per The s to r e s in a ll lo c a lit ie s r e c o r d e d la s t, th e ce n t, in c r e a s e th e r e p o r tin g r e g is te r in g C it y , N o r t h e r n N ew r e g is te r e d th e la r g e s t a d v a n c e s in 2 yea rs o r m ore. w as D is tr ic t, a n d rep orted A n a ls o N ew th e th e W estch ester Y ork d a ily and to d ep a rtm en t year c o m p a r is o n R o ch e ste r, la rg e r m on th s. sto re s and of th a n s to re s th e a lm o s t B r id g e p o r t a d va n ces S a le s in m ade in in a stores th e m ost N ia g a r a Y ork year B u ffa lo , c o n s id e r a b ly im m e d ia te ly F a lls p r e c e d in g and C en tra l N e w Y o r k S ta te , s h o w n s e p a r a t e ly f o r th e fir s t tim e , w e r e a ls o s u b s t a n t ia lly la r g e r th a n a year ago. le a d in g a p p a r e l s to r e s in th is d is t r ic t w e r e S a le s of th e 1 5 .3 p e r c e n t h ig h e r th a n la s t y e a r , a la r g e r in c r e a s e t h a n con a year h ig h e r th a n la s t yea r, a lo w e r v o lu m e of s a le s d e c r e a s e w a s n o t a s la r g e g o o d s a n d je w e lr y th e la r g e s t g a in s in c e S ep tem b er th e la r g e s t a d v a n c e s in c e Per cent of accounts outstanding April 30 collected in M ay Net Stock end of month 1935 1936 9 4.0 35.7 39.7 67.1 38.2 29.4 47.3 58.6 4 9.6 21.8 87.9 34.4 40.9 64.4 4 3.9 38.0 46.4 59.6 61.6 } 21.7 56.2 55.4 S ta m fo rd and show ed paper th e and Comm odity s a le s in fa v o r a b le y ea r; and Percentage change M ay 1936 compared with M ay 1935 s a le s S ta te , s t o r e s ; t h e d a ily r a t e o f s a le s in t h e S o u t h e r n N e w S ta te yea r. m on th s, c o m p a r is o n s w ith e x c e p t i o n a l l y la r g e i n c r e a s e i n s a le s by of a la r g e s t C a p it a l D is tr ic t, a verage num ber d ep a rtm en t s u b s t a n t ia l g a in s in J ersey , N orth ern R iv e r V a lle y over record ed 1934. o v e r la s t y e a r , a n d s e v e r a l lo c a lit ie s , in c lu d in g N e w Y o r k H udson in con cern s T h e cotton 1 9 3 5 , a n d th e la tte r r e c o r d in g year d ecrease w h o le s a le 1 p e r cen t fir m s , h o w e v e r , s h o w e d s a le s w e ll a b o v e la s t y e a r ’s le v e l, th e fo r m e r th is r e p o r tin g H a r d w a r e s a le s a n d y a r d a g e s a le s a ft e r m a k in g a llo w a n c e f o r d iffe r e n c e s in th e n u m b e r o f b e tw e e n th e a p p r o x im a te ly s ta t io n e r y , in th is d is t r ic t w e r e 9 p e r c e n t h ig h e r t h a n la s t y e a r , a n d days 4 5.2 s u b s t a n t ia lly as in th e p r e v io u s m o n th . r e p o r tin g 46.9 4 6.8 b u t th e in c r e a s e s r e p o r t e d w e r e n o t a s la r g e a s in A p r i l. Y o r k w e r e 9 .1 p e r c e n t h i g h e r t h a n i n t h e c o r r e s p o n d i n g a 4 7.3 + 12.0 d ia m o n d s a le s a g o in 4 to 5 m o n th s . d ep a rtm en t of th is d is t r ic t a v e r a g e d c e r n s m a d e th e le a s t fa v o r a b le D u r i n g t h e fir s t h a l f o f J u n e , t o t a l s a le s o f t h e r e p o r t in g + 0 .7 + 15.3 T ra d e M ay m e n ’s c lo t h in g la r g e s t s a le s D e p a rtm e n t + 9 .0 Apparel stores............................................ an s u b s t a n t ia l n ic k e l, 50.4 48.1 47.7 39.3 4 1 .8 40.6 36.6 — + — — + + — and w as la r g e im p o r ts 1936 50.5 4 8 .4 46.6 3 8.6 4 3.7 3 9.8 3 5.3 All department stores.............................. P h ilip p in e s . a 1935 + 8 .2 + 1 4 .6 + 6 .3 + 7 .0 + 1 1 .1 + 6 .9 + 1 3 .2 + 7 .2 + 4 .8 + 1 1 .2 + 1 3 .3 + 10.3 + 3 3 .0 + 1 5 .1 of show ed q u a n tity Stock on hand end of month 0 .1 9 .6 5 .8 4 .8 5 .9 1 .8 4 .0 New Y o rk ............................................................ Buffalo................................................................. R ochester............................................................. Syracuse............................................................... Northern New Jersey...................................... Bridgeport........................................................... Elsewhere............................................................ Northern New York S tate......................... Southern New York S tate.......................... Central New York State............................. Hudson River Valley D istrict................... Canital D istrict.......................................... Westchester and Stam ford......................... Niagara F alls................................................. p etro r e c e ip t s A p r il, p art im p o r ts in a n im a l fo o d s ilk , oth er th a n ago. to of th e ru bber c o n tin u e d a occu rred and o f 22 p e r c e n t in v a lu e , th e in c r e a s e a n d v a lu e v e g e ta b le le s s over a year ago ce n t in of im p o r ts fe r t iliz e r s . w h ile in c r e a s e a and and su ga r, of over in M a y as in m o s t r e c e n t m o n th s . S u b s t a n t ia l d e c r e a s e s in th e in c r e a s e s Net sales w ood F o r e ig n Per cent of accounts outstanding April 30 collected in M ay Percentage change M ay 1936 compared jwith M ay 1935 a m o u n te d to 7 3 p e r c e n t a n d in p a s s e n g e r ca r s to 31 p e r in A p r il. Groceries....................... M en’s clothing............. Cotton go o d s................ R ayon and silk g o o d s. S hoes.............................. Drugs............................. Hardware...................... Stationery..................... P ap er............................. D iam onds..................... Jew elry.......................... W eighted average. + 2 .4 — 20.4 + 2 1 .7 + 1 8 .6 * — 10.8 + 5 .5 + 1 3 .4 + 6 .6 — 0 .2 — 10.0 + 4 6 .3 — 0 .8 — 9 .0 + 2 6 .1 + 1 7 .3 — 6 .4 + 8 5 .4 Quantity figures reported by the National Federation of Textiles, Incorporated, not includedinweightedaverage for total wholesaletrade. FEDERAL RESERVE BANK OF NEW YORK M O NTH LY REVIEW , JU LY 1, 1936 B u s in e s s C o n d i t i o n s in t h e U n it e d S ta t e s (Summarized by the Board o f Governors o f the Federal Reserve System) OLUME o f industrial production, which had increased sharply in April, was maintained in May, and there was an increase in distribution o f commodities to consumers. 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) Index Numbers of Factory Employment and Pay rolls, Without Adjustment for Seasonal Varia tion (1923-25 average = 1 0 0 per cent) PER CENT / --------- and E m ploym ent The B oard’s seasonally adjusted index o f industrial production in May was 101 per cent o f the 1923-1925 average, as compared with 100 per cent in April. Production o f durable manufactures increased further, reflecting larger output o f steel and lumber, partly offset in the total by a reduction in the output of automobiles from the high level o f April. A t steel mills the rate o f activity in May was higher than at any other time since the spring o f 1930. This level has been maintained in June, reflecting in part some accumulation o f steel by fabricators in advance o f the effective date of recently announced price increases. Declines in production were reported for many nondurable manu factures; at woolen mills, however, activity increased. Output o f bituminous coal declined from April to May, while output o f crude petroleum continued in large volume. Factory employment increased slightly between the middle o f April and the middle o f May, contrary to the usual seasonal tendency. Increases were reported at plants producing iron and steel products, machinery, and most other durable manufactures. Changes in employment in industries producing non durable manufactures were largely o f a seasonal nature. Factory payrolls were somewhat larger in the middle o f May than a month earlier. Total value o f construction contracts awarded, according to figures o f the F. W. Dodge Corporation, declined slightly from April to May. Awards for residential building continued to increase and in May, as in other months this year, were substantially larger than a year ago when residential building was first beginning to increase from the extreme low level o f the depression. D is t r ib u t io n >■ --- ) ) ) V s. FOODS OTHER r jy cCOMMODITIES—/f WLXJu* \ r ) X\f/'V i w V PRODUCTS ) | 1929 1930 1931 1932 1933 1934 1935 1936 Group Price Indexes of the Bureau of Labor Statistics (1926 average = 100 per cent) Department store sales, which usually decline at this season, increased from April to May and there was also a rise in sales at variety stores and mail order houses. Freight car loadings increased by slightly more than the usual seasonal amount. Co m m o d it y P B (Latest figures are for June 17) r ic e s Wholesale prices o f commodities, which had declined from the middle o f April to the middle o f May, have advanced somewhat sinee that time and in the week ended June 20 were at 78.7 per cent o f the 1926 average, according to the index o f the Bureau o f Labor Statistics. In recent weeks prices o f livestock and livestock products, grains and flour, and textile raw materials and finished products have advanced. For many steel products price increases have been announced to take effect early in the third quarter. ank C r e d it Excess reserves o f member banks, after a slow increase in May and the early part o f June, declined by $900,000,000 in the week ended June 17. The reduction in excess reserves was due principally to an increase in the deposits maintained at the Reserve Banks by the Treasury, which received large payments for new securities issued, as well as quarterly tax installments. A t that time the Treasury began to distribute checks and adjusted service bonds to veterans and there was an increase in the demand for currency in connection with the cashing o f these bonds and checks. United States Government obligations held by reporting member banks in leading cities, which had increased somewhat in May and early June, showed a further sharp increase in the week ended June 17 in connection with the new issue o f Government securities. Bank loans also increased.
@FedFRASER