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MONTHLY REVIEW
ofCreditandBusinessConditions
S e c o n d
F e d e r a l
Federal Eeserve Bank, New York
M o n e y M a r k e t in J u n e
A noteworthy development in the banking situation
du rin g the past month has been the fu rth e r rise in
demand deposits in the w eekly reporting member banks.
This rise, which carried such deposits to new high levels,
was due v e ry largely to increases in the investments of
the reporting banks, especially in N ew Y o rk C ity,
whereas a large p art of the preceding increase in deposits,
since the beginning of this year, w as attributable to the
inflow of funds from abroad.
In N ew Y o rk C ity the increase in demand deposits,
exclusive of inter-bank deposits, and w ith adjustm ents
to eliminate duplications arising out of checks and other
items in process of collection, now amounts to about
$1,000,000,000 since the first week of Ja n u a r y .
The
present level is also more than $1,000,000,000 above the
high point reached in M arch, 1 9 3 7 , and, although exactly
comparable figures are not available, is probably more
than $3,000,000,000, or about 70 per cent, above the
highest point reached in 19 2 9 .
In the 10 0 other p rin cip al cities from which weekly
member bank reports are received, the increase this
yea r has been considerably less— somewhat more than
$300,000,000— and the increase over the high point of
December, 19 3 6 is about $400,000,000. Com pared w ith
the high point of 19 2 9 , the present level of “ a d ju ste d ”
demand deposits in these cities shows an apparent in
crease of approxim ately $2,200,000,000, which, while
substantial, is proportionately much less than the in
crease in N ew Y o rk C ity — probably about 30 per cent.
The greater proportionate increase in N ew Y o rk C ity is
attributable in considerable measure to the accum ula
tion of foreign funds here.
R e s e r v e
D is t r ic t
July
1939
has amounted to $426,000,000, or only about 4 5 per cent
of the increase in deposits.
The rem ainder is fu lly
accounted fo r b y the h eavy movement of funds from
abroad, representing in p art paym ents fo r the excess of
merchandise exports from this country over imports,
but much more large ly the tran sfer of foreign funds to
N ew Y o rk , seeking safety here in view of the disturbed
conditions in Eu ro p e. The latter movement, however,
appears to have ended early in M ay, at least tem porarily,
and the merchandise export balance of this country has
diminished in recent months, so that the influence of
incoming foreign funds on the volume of bank deposits
here has been m aterially reduced in recent weeks.
The increase in the earning assets of the N ew Y o rk
C ity banks du ring the past month continued to be en
tirely in the investment accounts. H oldings of direct
Governm ent obligations, Governm ent guaranteed securi
ties, and other securities (chiefly State and m unicipal
securities) all showed moderate increases. Total loans
declined somewhat furth er, chiefly because of reductions
in loans to security brokers and dealers.
In other p rin cipal cities, the increase in deposits since
the beginning of this y e a r has had no parallel in the
volume of loans and investments, which in fa c t has
declined slightly.
To tal investments of the reporting
banks in 10 0 cities have shown little change, as reduc
tions in holdings of direct Governm ent obligations have
E v e n after m aking allowance fo r idle foreign balances
in this country, however, the high level of demand de
posits, together w ith the large amount of currency now
in circulation, indicates that the money su p p ly at the
present time is fa r larger than it was ten years ago, when
business in this country w as at the highest level ever
attained.
In the five weeks ended Ju n e 28, the increase in total
loans and investments of the reporting N ew Y o rk C ity
member banks amounted to $193,0 00,00 0, as compared
w ith an increase of only $45,000,000 in adjusted demand
deposits.
F o r the whole period, from Ja n u a r y 4 to
Ju n e 28, however, the increase in loans and investments
1,
Adjusted Demand Deposits of Weekly Reporting
Member Banks in Principal Cities
MONTHLY REVIEW, JULY 1, 1939
50
been p ractically offset b y increases in holdings of G ov
ernment guaranteed securities, and other security hold
ings have shown only a small increase. Secu rity loans in
these banks as in the case of the N ew Y o rk C ity banks,
have shown some decline, and commercial and industrial
loans have shown little net change.
The increase in demand deposits in these banks, there
fore, m ust be attributed entirely to factors other than
credit expansion grow ing out of increased bank loans
and investments. P ro bably the most im portant factor
has been the excess of Governm ent expenditures over
receipts, but it is also probable that, to the extent that
the gold inflow this y e a r has been associated w ith p a y
ments fo r this co u n try ’s merchandise export balance,
the proceeds have been w idely distributed and a con
siderable p a rt added to deposits in banks outside N ew
Y o rk C ity ,
L a rg e ly as the result of an increase in reserve require
ments incident to the fu rth er rise in deposits, the increase
in excess reserves of member banks w as checked in Ju n e.
The inflow of gold from abroad, exclusive of gold placed
under earm ark, while substantial, w as at the lowest rate
for an y month since last J u l y , and w as p a rtly counter
balanced by an increase in foreign central bank deposits
in the Fed eral Reserve B anks, which on Ju n e 2 1 reached
a new high level at $354,000,000. T re a su ry disburse
ments, including interest paym ents due Ju n e 1 5 on the
public debt, as well as all other ordinary disbursements,
were about offset by T re a su ry receipts, including second
q uarter income ta x paym ents and the proceeds of a
sale by the Reconstruction F in an ce Corporation of
$71,0 00,0 00 of Sa n Francisco-O akland B a y Toll B rid ge
bonds, in addition to ordinary current revenues.
Some reduction, of a tem porary nature, in member
bank excess reserves is to be expected du ring the coming
week, as a result of month end and holiday currency
demands, but a renewed rise appears to be in prospect
after the F o u rth of J u l y holiday, due p a rtly to seasonal
retirem ent of currency in circulation and p a rtly to a
renewed excess of Governm ent expenditures over receipts.
M oney rates at the end of Ju n e were little changed from
a month previous. Y ield s on T re a su ry bonds and notes
declined fu rth er to new low levels in the ea rly p a rt of
the month, but subsequently moved irre g u la rly higher,
and at the end of Ju n e were sligh tly above the end of
M a y averages.
Money Rates in New York
June 30, 1938 May 31, 1939 June 29, 1939
Stock Exchange call loans.......................
Stock Exchange 90 dav loans.................
Prime commercial paper— 4-6 months..
Bills— 90 dav unindorsed.........................
Average yield on Treasury notes (3-5
years).......................................................
Average yield on Treasury bonds (more
than
years to maturity or call date)
Average rate on latest Treasury bill sale
91 dav issue............................................
Federal Reserve Bank of New York
rediscount rate.......................................
Federal Reserve Bank of New York
buying rate for 90 day indorsed bills.
12
1
*1
1
H
1
*1H
*1H
X -5
A
K
34-H
J{f
%
0.67
0.38
#0.45
2.53
2.13
t
0.011
1
X
2.21
0.004
0.005
1
1
X
X
♦Nominal.
#Change of -j-0.04 per cent in average yield due to inclusion in the average
of the new M per cent Treasury notes of June 15. 1944.
fChange of +0.04 per cent in average yield due to dropping of H per cent
Treasury bond? of 1951-51 from the average because this issue is callable
within
years.
2
12
G overnm ent
S e c u r it y H o l d in g s o f
F ed eral R eserve B a n k s
Total Governm ent security holdings of the F ed eral
Reserve Banks, a fter rem aining unchanged since Novem
ber 24, 1 9 3 7 , showed a reduction of $ 13 ,3 7 8 ,0 0 0 in the
statement fo r Ju n e 28, 19 3 9 . Th is reduction was ex
plained in the follow ing announcement issued on
Ju n e 2 9 :
A s a result o f a r ed u ction in h old in g s o f T rea su ry b ills, this
w e e k ’ s statem en t o f c o n d itio n o f F e d e r a l R eserve banks
shows a d eclin e o f $13,378,000 in the S y stem O p en M ark et
A cco u n t. T h is is in a ccord a n ce w ith a c tio n taken b y the
F e d e ra l O pen M arket C om m ittee on Ju n e 21, 1939. F o r som e
tim e past, T rea su ry bills have been p u rch ased f o r the S ystem Js
a ccou n t at or near a n o-y ield basis and the a ccou n t a t tim es
has had d ifficu lty in re p la cin g its m a tu rin g b ills. I t was
d ecid ed th at it w ou ld serve no u s e fu l p u rp ose to con tin u e
fu ll repla cem en t o f m a tu rin g b ills, the su p p ly o f w h ich is n ot
alw ays equ al to the m arket d em and . T h is a c tio n is in response
to tech n ica l con d itio n s in the b ill m arket an d does n o t rep re
sent a ch an g e in g en era l c re d it p o licy .
G o v e r n m e n t S e c u r it ie s
On Ju n e 1 the T re a su ry announced that no new money
would be borrowed on the Ju n e 1 5 quarter date, but that
a 5 y ear note issue would be offered in exchange for the
Septem ber 1 5 , 1 9 3 9 note m atu rity. On Ju n e 5 the form al
offering of an issue of % per cent T re a su ry notes, due
Ju n e 1 5 , 1 9 4 4 , w as made to refun d in advance of m aturity
the $427,000,000 of 1 % per cent T re a su ry notes due
Septem ber 1 5 , 19 3 9 .
U nder this offering, all but
$11,0 0 0 ,0 0 0 of the Septem ber notes were exchanged.
D u rin g the first five days of Ju n e prices of T rea su ry
bonds advanced sh arp ly furth er, as the T re a su ry an
nouncement that no new issue of T re a su ry bonds would
be offered w as con trary to m arket expectations.
The
average price of T re a su ry bonds due or callable after
1 2 years rose about % of a point du ring this period to
new high levels, but meanwhile the price of the September
1 5 notes, w hich had been selling in the m arket on the
basis of their expected “ rig h ts” value fo r exchange into
a new issue of T re a su ry bonds, broke sh arply. B egin
ning on Ju n e 6, however, prices of T re a su ry bonds turned
dow nw ard from the high levels reached earlier in the
month, and for the days through the 16 th a decline of
approxim ately 1 point occurred. Because of the high
levels previously reached b y T re a su ry bond quotations,
the m arket w as extrem ely sensitive to slight changes in
the volume of demand or offerings du ring this period,
and the decline in prices reflected this situation rather
than an y m aterial amount of selling pressure. In the
subsequent week such offerings as had come into the
m arket earlier in the month disappeared and the invest
ment demand quickened slightly on the whole, w ith the
result that the average price of long term T re a su ry bonds
recovered somewhat, but in the closing days of the month
prices declined again to a level about % of a point below
the end of M a y quotations. D u rin g much of the second
h a lf of Ju n e , there were indications of reluctance on the
p a rt of banks to alter their portfolios, in view o f the
approach of the m idyear statement date.
T rea su ry bill financing du ring Ju n e included the sale
of fou r $100,000,000 w eekly issues of 9 1 d ay m aturities,
at average rates which ranged from 0.003 to 0.005 per
cent. These issues replaced sim ilar weekly m aturities.
51
FEDERAL RESERVE BANK OF NEW YORK
B ills
and
MILLIONS
OF DOLLARS
C o m m e r c ia l P a p e r
The bill m arket du ring Ju n e again lacked an adequate
amount of new acceptances w ith which to satisfy the
existing investment demand and consequently continued
inactive. D ea lers’ quoted rates were unchanged. Out
standings of acceptances at the end of M a y totaled
$247,000,000, a rise of $9,000,000 over a month before,
reflecting an expansion in bills draw n to furn ish dollar
exchange which was an outgrowth of the credit extended
early in the month to B ra zil through the E x p o rt-Im p o rt
Bank. In most other types of bills seasonal declines were
experienced. In the comparison with a y ea r ago also, the
influence of the B razilian credit w as evident in the rise in
dollar exchange acceptances, and the M ay , 19 3 9 total
showed a smaller decline from a y e a r ago than any
sim ilar comparison since November, 19 3 7 .
(Millions of dollars)
May 31, 1938 Apr. 29, 1939 May 31, 1939
Domestic shipment...................................
Domestic warehouse credit.....................
Dollar exchange
....................................
Based on goods stored in or shipped
between foreign countries....................
81
64
9
49
1
86
56
8
30
1
64
57
268
238
82
51
7
29
19
59
_____
247
The demand for funds in the commercial paper m arket
remained small du ring Ju n e . The concerns borrowing
in the open m arket represented a diversified list of
enterprises, including grain m illing, where the beginning
of the movement of w inter wheat led to seasonal borrow
ing. The new paper that dealers were able to acquire
fo r resale in the open m arket continued to fa ll f a r short
of satisfyin g the active bank investment inqu iry. Sales
of commercial paper again were made at both % and %
per cent. A t the end of M a y a total of $18 8,50 0 ,0 0 0 of
paper was outstanding through commercial paper houses
reporting to this bank. A t the end of A p r il the total
was $19 1,9 0 0 ,0 0 0 and in M a y of last y ea r an aggregate
amount of $251,20 0 ,0 0 0 was reported.
N e w F in a n c in g
The flotation in Ju n e of a num ber of fa ir ly large
domestic corporate security issues served to increase the
rate of activity to the highest level this year. The Ju n e
total of about $265,000,000 and the m onthly average
d u rin g the second quarter of about $215,0 0 0 ,0 0 0 fa r
exceeded the average of $90,000,000 for the first quarter
of this yea r and slightly exceeded the m onthly averages
fo r the full years 1 9 3 7 and 19 3 8 . The average for the
first h alf of 19 3 9 , however, w as below the average levels
of recent years.
A s has been the case in preceding months, a minor
p art— some $50,000,000— of the funds obtained in Ju n e
was for new capital purposes. A considerable portion of
the amount for refun ding was to refinance at even lower
interest rates issues which were floated only a few years
ago at rates that then produced savings in interest costs.
Th is fu rth er refun ding has been made possible by the
continued decline in the general level of long term in
terest rates. Several issues were sold during Ju n e at
prices to yield the investor less than 3 per cent. The
QUARTER
QUARTER
QUARTER
QUARTER
Q.UARTER
1935
1936
1937
1938
1939
A v erage M on th ly V olu m e o f D om estic Corporate Security Issu e sy
by Q uarters, 1 9 3 5 -1 9 3 9
larger issues du ring the past month w ere:
$50,000,000 Socon y-V acuu m Oil Com pany debenture
3 ’s of 19 6 4 at 10 4 , fo r refu n din g
30.000.000 Southern C aliforn ia Ed ison Com pany
3% ’s of 19 6 4, placed p riv a tely with
insurance companies, fo r refun ding
27.300.000 G u lf States U tilities Com pany first m ort
gage 3 % ’s of 19 6 9 at 1 0 6 % , fo r re
fu n d in g
25.000.000 Bethlehem
Steel Corporation consoli
dated m ortgage 3 ^ 4 ’s of 19 5 9 at 99, to
replenish w orking capital
22.000.000 W ashington W a te r P ow er C om pany first
m ortgage 3 % ’s of 19 6 4 at 10 5 , fo r
refu n d in g
18.000.000 W est T exas U tilities Com pany first m ort
gage 3 % ’s of 19 6 9 at 1 0 1 % , fo r re
fu n d in g
14.750 .0 0 0 C entral Illinois E le ctric and Gas Com
p a n y first m ortgage 3 % ’s of 19 6 4 , at
1 0 0 % , and
3.000.000 serial debentures o f the same com pany,
due 19 39 -4 9 , to yield 0 .75 to 4.00 per
cent, both fo r refun din g
13.000.000 N ew Y o rk State E le c tric and Gas Corpo
ration first m ortgage 3 % ’s of 19 6 4 , at
10 2 , and
6.000.000 5 % per cent preferred stock of the same
corporation, both fo r refunding.
M unicipal bond aw ards in Ju n e attained a greater
volume than in an y month in several years. A w a rd s
totaled over $200,000,000. The total includes $71,0 00,0 00
of S a n Francisco-O akland B a y Toll B rid ge bonds sold
to dealers by the Reconstruction Fin an ce Corporation.
These bonds were reoffered to the public at prices to
yield from 0.50 to 3.60 per cent fo r serial m aturities
from 19 4 0 to 19 6 4, and at 10 6 , to yield about 3.70 per
cent, on the portion of the issue due in 19 7 6 . Another
$37,000,000 of the total consisted of a number of issues
to finance the acquisition of public u tility properties in
the Tennessee V a lle y area. A n additional $40,000,000
of the m unicipal aw ards was for regu lar refun ding
purposes. Thus, only about $53,000,000 of the m unicipal
total was fo r new undertakings.
52
MONTHLY REVIEW, JULY 1, 1939
In the foreign field, $9,250,000 of Province of N ew
B ru n sw ick 3 ’s of 19 4 4 and 3 % ’s of 19 4 9 were offered in
this m arket at par. Th is issue represents the first
C anadian P ro vin cial or m unicipal financing to be regis
tered under the Securities A c t of 1 9 3 3 .
The security offerings du ring the past month were
favo ra b ly received. In most cases the larger issues were
quickly bid up to prem ium s in the open m arket, and the
few large issues w hich were given ratings below the
grades usu ally purchased by investment institutions
also were successfully distributed.
S e c u r ity M a r k e ts
In response to v a ry in g reports on the domestic business
situation and developments abroad, stock prices con
tinued to fluctuate irreg u la rly du ring Ju n e , and the
volume of trad in g on the N ew Y o rk Stock Exch an ge
remained at an average daily rate of only 500,000 shares.
F o r the first ten days of the month the net result of the
irregu lar movements w as a small net gain in the general
average of share prices, but in the rem ainder of the
month the aggregate of daily losses outweighed gains on
other days, and prices near the end of Ju n e were about
7 per cent lower than at the close of M ay. Recent quota
tions for stocks have averaged about 6 per cent above
the A p r il lows, but 2 2 per cent below the November,
19 3 8 highs.
P rices of corporation bonds were firm du ring most of
the past month. Reflective of the movement of high
grade issues, M o o d y’s average price of A a a bonds ad
vanced about one point fu rth er to a new high level.
M edium grade issues also advanced through the first
three weeks of Ju n e to show a net gain of one point for
this period, according to M o o d y’s average of B a a issu es;
industrial and railroad bonds registered the largest
gains, but public u tility bonds also were somewhat
higher.
In the closing days of the month, however,
declines in B a a issues canceled the earlier gains.
fran cs were somewhat influenced by refu n din g opera
tions w ith respect to D u tch and Sw iss credits to the
F re n ch T re a su ry and railw ays. In itia lly, weakness in
the guilder was accompanied by some advance in Sw iss
francs, but this advance w as canceled in subsequent
dealings. The quotations fo r F re n ch and B elg ian ex
change rem ained steady du rin g Ju n e , as a sustained,
though moderate, m arket demand fo r these currencies
w as met by official gold purchases abroad.
A m o n g the non-European exchanges, the most sig
nificant developments of the month occurred in the
Sh angh ai yu an , the B razilian milreis, and the M exican
peso. The quotation for Shanghai exchange, which had
been pegged at 8 ^ d , was allowed to decline to 6 % d
on Ju n e 8, reportedly as a result of the large d rafts which
had been made on the British-Chinese Stabilization F u n d
in meeting the demands fo r exchange arising from heavy
merchandise im ports and flight of capital from Ja p a n
and N orth China. L a te r in the month w ith d raw als from
Chinese banks operating in Sh angh ai were sharply
restricted, and although this action w as followed by a
brief firm ing of Sh angh ai exchange, the rate quickly
reverted to the 6 % d level.
The recently restored 4‘ fr e e ” rate fo r the B razilian
milreis weakened fu rth e r from the neighborhood of
$0 .0 530 at the end of M a y to $0.0506 on Ju n e 22, reflect
ing the large current commercial demand fo r foreign
exchange.
The possibility that U nited States T re a su ry purchases
of foreign silver m ight be discontinued led the B an k
of M exico and other M exican banks to w ith d raw from
the exchange m arket on Ju n e 2 7, and quotations fo r
the M exican peso in the unofficial m arket thereafter
declined considerably. Subsequently, however, it was
reported that official support was resumed and some
im provem ent in the rate w as shown.
G o ld M o v e m e n t
F o r e ig n E x c h a n g e s
W ith the exception of a decline in the Netherlands
guilder du ring the first h alf of the month, quotations for
the p rin cip al Eu ro p ean currencies showed only minor
fluctuations du ring Ju n e . The pound-dollar rate ranged
between $ 4 .6 8 % and $ 4 .6 8 % . Sterlin g w as m oderately
in demand early in the month, reflecting a p artial return
flow to London of balances which had taken flight to
New Y o rk du ring the preceding period of acute Eu ro p ean
political tension.
Subsequently, the relative demand
fo r dollars and for sterling fluctuated from d ay to day
in response to news of F a r E a ste rn developments, the
Se n ate ’s refusal to extend the P re sid e n t’s pow er to alter
the gold content of the dollar, and renewed apprehen
sion over the Eu ro p ean situation. The pound-dollar
rate was prevented b y official operations from fluctuat
ing m aterially in response to these v a ry in g market
tendencies.
Pressure against D u tch exchange du ring the first
h a lf of Ju n e resulted in a decline in the guilder rate
from $ 0 .5 37 0 to $0 .530 8. Th is weakness was attributed
largely to fu rth er reports of disagreem ent w ithin the
Netherlands Cabinet on m atters of fiscal policy.
In
addition, rate movements fo r both guilders and Sw iss
Gold continued to move to the U nited States from
abroad du ring Ju n e , though in somewhat diminished
volume. A s in the previous month, a sizable p a rt of the
gold im ported w as placed under earm ark at the Fed eral
Reserve B an k of N ew Y o rk fo r foreign central banks.
Gold im ports of all classes at N ew Y o rk in Ju n e
totaled $207,500,000, of w hich $123,0 0 0 ,0 0 0 came from
E n glan d , $55,50 0 ,0 0 0 from Holland, $16 ,30 0 ,0 0 0 from
Canada, $5,600,000 from Sw itzerland, $2,700,000 from
Mexico, $2,10 0 ,0 0 0 from Colombia, $2,000,000 from
India, and $300,000 from Chile. On the W e st Coast,
$14,20 0 ,0 0 0 was received from Ja p a n , $5,30 0,000 from
A u stra lia, and $600,000 from China. The amount of
gold held under earm ark fo r foreign account b y the
F ed eral Reserve B an ks increased about $105,000,000,
d u ring Ju n e , as com pared w ith an increase of
$250,000,000 in M ay, and on Ju n e 30 amounted to
approxim ately $1,12 5,0 0 0 ,0 0 0 .
The gold stock of the U nited States increased about
$150,000,000 du ring Ju n e , as com pared w ith a gain of
$16 5,0 00,00 0 du rin g M ay, $530,000,000 d u rin g A p ril,
and $385,000,000 du rin g M arch, reaching a new high
figure of approxim ately $16 ,110 ,0 0 0 ,0 0 0 at the end of
the month.
53
FEDERAL RESERVE BANK OF NEW YORK
P r o d u c tio n a n d T r a d e
The volume of business a ctivity, which had leveled
off in M ay follow ing declines in earlier months of the
year, appears to have turned u p w ard in Ju n e . Steel mill
activity, responding to orders placed du rin g a period of
price concessions in M ay, ranged between 5 2 and 5 5 per
cent of capacity in Ju n e , compared with an average rate
of 48 per cent in M a y ; ordinarily steel production tends
to decline in Ju n e. Despite the curtailm ent of automobile
production early in the month b y a strike at plants of a
m ajor producer of car bodies, total assemblies appear to
have shown little change from the M a y level, ap parently
reflecting a well sustained retail demand fo r cars.
Bitum inous coal m ining, which had increased sh arply
in the latter p art of M ay, continued in substantial
volume du ring the first three weeks of Ju n e . The an
nouncement of plans for the restriction of cotton print
cloth production during the third quarter accounted, in
p a rt at least, fo r substantial sales of cotton goods by the
mills, which were reported to have exceeded production
du ring most of Ju n e . The generation of electric power
and shipments of freigh t b y ra ilw a y du ring the first
three weeks of the month showed more than the usual
seasonal advances.
A fte r allowance fo r seasonal factors, business activity
in M ay was little changed from the A p r il level. A lth ough
there was some fu rth er reduction in the output of durable
goods, production of nondurable goods was well m ain
tained and ra ilw a y freigh t traffic increased. Fo llo w in g
the settlement of the labor controversy, bituminous coal
production increased sh arp ly in the latter p a rt of the
month, and there was a simultaneous increase in steel
mill a ctivity which received additional stim ulus through
heavy bu yin g orders placed d u rin g a period of price
reductions in the second h alf of the month. Nevertheless
the daily rate of steel ingot production fo r the month as
a whole declined 5 % per cent from the A p r il average, or
sligh tly more than is usual at this time of the year, and
the d aily rate of p ig iron production w as reduced 19 per
cent. Autom obile assemblies declined considerably more
than usual between A p r il and M ay , reflecting in p art a
well stocked position of dealers, and in p a rt curtailm ent
of operations at some plants owing to strikes in the latter
p a rt of the month. The d aily rate of m ill consumption
of cotton was sligh tly lower than in A p r il, but copper
output, electric power generation, and shoe production
were little changed a fter adjustm ent fo r seasonal factors,
and operations at meat packing establishments advanced
considerably more than is usual at this time of the year.
The dollar value of machine tool orders advanced sh arp ly
in M a y to the highest level since 1 9 3 7 . To some degree
stim ulated b y the N ational defense program as well as
foreign orders, the volume of machine tool orders has
more than tripled in the past twelve months as the
accom panying diagram shows.
Some reduction appears to have occurred in depart
ment store sales du ring M ay, whereas little change w as
to be expected, considering seasonal factors. There was a
rather pronounced decline in chain store sales other than
grocery, but chain grocery store sales and m ail order
house sales showed some increase in M ay. The daily rate
of retail sales of new passenger cars w as m aintained near
the A p r il level.
PER CENT
Index of M achine T ool O rders, A d ju ste d for Seasonal V ariation ( 1 9 2 6
average = 1 0 0 per c e n t; data from N ational M achine
T o ol Builders* A sso cia tio n )
(Adjusted for seasonal variations, for estimated jlong term trend,
and where necessary for price changes)
1939
1938
Industrial Production
Passenger cars...............................................
Motor trucks.................................................
Bituminous coal............................................
Crude petroleum...........................................
Electric power...............................................
Cotton consumption....................................
Wool consumption........................................
Meat packing................................................
Tobacco products.........................................
May
March
April
May
37
58
36
46
62r
83
85r
55
70
57
99
80
92
66
59
72 p
52
90
91
61
72
62
72
34
89
91p
60
97
85
99p
83
89
92
74
92
73
91p
73 p
75
72
80
82
88
91
68
95
113
111
68
50p
88p
92p
94
9Sp
99 p
88
92
Employment
Employment, manufacturing, U. S..........
Employee hours, manufacturing, U. S .. .
85
63
Construction
Residential building contracts...................
Nonresidential building and engineering
contracts.....................................................
30
44
37
45
64
53
71
52
69
61
91
62
78
72
76
60
81
77
91
77
84
78
118p
93
106
67 p
Primary Distribution
Car loadings, merchandise and misc........
Car loadings, other.......................................
Exports...........................................................
Distribution to Consumer
Department store sales, U. S.....................
Department store sales, nd District. . . .
Chain grocery sales......................................
Other chain store sales................................
Mail order house sales.................................
New passenger car registrations................
2
88
71
86
77
66
90
44r
99r
69
88
85
79
114
99
r
69p
61
60
59
60
38
36
31
32
152
148
153r
146
152p
146
ll l p
152p
146
ll l p
76
74
101
86
81
115
102
Velocity of Deposits*
Velocity of demand deposits, outside New
York City (1919-25 average =
) ...
Velocity of demand deposits, New York
City (1919-25 average =
) ...............
100
100
Prices and Wages*
General price level (1913 average = 100)
Cost of living (1913 average =
) ........
Wage rates (1926 average = 100)............
100
p Preliminary.
r Revised.
111
111
* Not adjusted for trend.
B u ild in g
O w ing to the inclusion of contracts fo r several large
scale housing developments in the N ew Y o rk and N orth
ern N ew Je r s e y area du rin g M ay, there w as a 62 per cent
MONTHLY REVIEW, JULY 1, 1939
54
Percentage Change in Average Daily Contracts
A L L O TH E R
N. Y. and Northern N . J.
May, 1939
compared with
37 States
May, 1939
compared with
O NE FAM ILY
S A L E OR R E N T
Apr., 1939
Building
O N E FAM ILY
OW NER OCCUPANCY
Residential....................................
Commercial and industrial........
Public purpose*...........................
All building...............................
APARTM EN TS
All construction.......................
Apr., 1939
May, 1938
+ 17
— 16
+ 55
+
— 15
- 26
-f 62
— 9
— 26
+19
+107
+ 13
— 33
+ 31
—21
+ 1
+16
— 94
— 44
— 17
— 98
— 73
— 38
— 19
—11
— 7
— 52
— 23
1
— 24
— 7
+
Engineering
Public works.................................
Public utilities..............................
All engineering.........................
May, 1938
—
12
4
5
* Includes educational, hospital, public, religious and memorial, and
social and recreational building.
P ercentage D istribu tion of Principal T y p e s of R esidential B uilding
C ontracts in the N ew Y o r k and N orthern N ew Jersey and U p State N ew Y o rk A rea (B a sed on F . W . D odge Corporation
d a ta ; m onth ly averages for years 1 9 3 5 -3 8 and
first 5 m onth s of 1 9 3 9 )
increase over A p r il in the daily average rate of residen
tial building contract aw ards in this area, according to
figures compiled by the F . W . Dodge Corporation. H o w
ever, decreases in most other types of construction offset
the increase in residential building, so that construction
as a whole showed little change from the A p r il average.
Com pared w ith a y e a r ago, residential building contracts
were more than doubled, although total construction
contracts were reduced n early 2 5 per cent, owing m ainly
to an exceptionally large decrease in public u tility con
tracts which both in M ay, 19 3 8 and in A p r il of this year
had been considerably enlarged by aw ards on a w ater
su p p ly project fo r N ew Y o rk C ity.
The accom panying diagram illustrates the tendency
in the area corresponding approxim ately w ith the Second
F ed eral Reserve D istrict fo r apartm ent house construc
tion to constitute an increasingly larger p art of residential
b u ild in g; the proportion rose from 40 per cent in 1 9 3 5
to 60 per cent in the first five months of 19 3 9 , owing
only in minor degree to slum clearance housing projects,
under the supervision of the U nited States H ousing
A u th o rity. Contracts fo r one fam ily houses constructed
fo r sale or rent have constituted around 30 per cent of
the total throughout the period, while the proportion of
aw ards for owner-occupied houses has fallen from about
one-fourth of the total in 1 9 3 5 to 9 per cent in the first
five months of this ye a r. In term s of dollar value, how
ever, recent m onthly contract aw ards fo r owner-occupied
houses have been at about the same average level as in
19 3 5 , although well below the 19 3 6 and 1 9 3 7 levels. Con
tracts fo r one fa m ily houses fo r sale or rent are more
than two and a h a lf times as large as in 1 9 3 5 and
apartm ent house contracts have quadrupled. R esidential
building of all kinds this y ea r has been approxim ately
three times the 1 9 3 5 m onthly average in value.
To tal construction contracts aw arded du ring M a y in
the 3 7 States included in the F . W . Dodge Corporation
su rvey were at a daily rate 7 per cent below the A p r il
average. The decrease from the previous month occurred
despite a contraseasonal increase in residential building
contracts of 1 7 per cent. A w a rd s for heavy engineering
projects in the 3 7 States showed a 19 per cent decline
from the com paratively large A p r il volume, and other
types of construction were reduced in som ewhat sim ilar
proportions. A slight increase over a y e a r ago in total
construction was due chiefly to a gain in residential
building, which amounted to 5 5 per cent.
F o r the first three weeks of Ju n e , construction contract
aw ards in the 3 7 States showed a fu rth e r reduction,
owing to decreases from the M a y rate of 2 5 per cent in
both residential building and heavy engineering projects.
Com pared w ith the corresponding period in Ju n e , 19 3 8 ,
however, total construction registered a 5 per cent in
crease, reflecting a gain of 26 per cent in residential
building, offset in p a rt by small declines in nonresidential
building and heavy engineering contracts.
E m p lo y m e n t a n d P a y r o lls
Despite a decline in U nited States facto ry employment
in M ay the total number of workers in all nonagricultural
pursuits increased by approxim ately 180,000 persons, ac
cording to the Se cre tary of Labor. The return of about
80,000 bituminous coal m iners to work between m id -A p ril
and m id-M ay follow ing the settlement of the labor con
troversy, and a substantial increase in em ployment in
both p rivate and public construction, contributed m ate
rially to the advance. A fu rth er large increase in
bituminous coal employment undoubtedly occurred after
the M ay 1 5 p a yro ll period covered b y the D epartm ent
of L a b o r ’s estimates.
The decrease in facto ry employment from A p r il to M ay
was sligh tly greater than usual, and wage disbursements,
which ordinarily are little changed between these months,
were reduced somewhat. Lab o r difficulties, which resulted
in a reduction in the number of workers at some automo
bile plants, together w ith somewhat more than the usual
reductions in the shoe, w om en’s clothing, and cotton
goods industries, accounted in p a rt fo r the larger than
seasonal decline in facto ry employment in M ay.
Declines of sligh tly more than the usual proportions
also occurred in N ew Y o rk State fa cto ry em ploym ent and
payrolls between the middle of A p r il and the m iddle of
M ay. Reductions in the number of workers were reported
by the m ajo rity of industries and employment w as lower
55
FEDERAL RESERVE BANK OF NEW YORK
CENT
100
90
80
70
large figure a y e a r ago, and shipments of crude m aterials
were reduced 1 3 per cent. M eanwhile, however, exports
of wholly and p a rtly finished products showed sizable
increases. A m ong the im ports large advances compared
w ith M ay, 19 3 8 , occurred in all the m ajor groups, except
m anufactured foodstuffs, the increases ran gin g from
20 per cent fo r finished m anufactures to 5 5 per cent for
crude m aterials. F o r the first five months of this year,
all the prin cip al classifications of exports except m anu
factu red foodstuffs registered decreases from the corre
sponding period in 19 3 8 , while im ports of all types
excepting m anufactured foodstuffs were larger in value
than in the comparable 19 3 8 period.
60
Percentage change
Dollar value
(in millions)
May, 1939
50
Indexes o f Fa ctory E m p loym ent in the U nited S tates and in N ew Y o rk
S tate, A d ju ste d for Seasonal Variation (1 9 2 9 = 1 0 0 per cen t)
May, 1939
compared with
May, 1938
Jan.-May, 1939
compared with
Jan.-May, 1938
Exports^ Imports^ Exports Imports Exports Imports
16.1
48.3
140.5
62.3
25.9
26.1
39.8
40.1
— 12.9
— 68.3
+ 1 4 .9
+ 1 1 .7
+
10.1
+ 5 4 .7
+ 3 2 .4
— 0.4
+ 4 3 .7
+
— 30.5
— 53.7
+ 6 .4
— 7.3
— 3.1
+ 1 9 .3
+ 1 7 .1
— 15.1
+ 2 4 .8
+ 1 0 .4
245.9
194.2
— 3.1
+ 3 2 .0
— 13.2
+ 1 2 .4
30.2
in all of the p rin cipal industrial districts of the State.
A s in the preceding month, however, the most pronounced
declines occurred in the apparel industries where em
ploym ent ordinarily decreases at this time of year.
Com pared with M ay, 19 3 8 , employment was 10 per cent
higher and payrolls w ere 1 5 ^ 2 P er cen^ l^r oe rIn the accom panying diagram changes in facto ry em
ploym ent in the U nited States and in N ew Y o rk are
compared for the period from 19 2 9 to date. In the period
of drastic employment reduction extending from the
latter p art of 19 2 9 to the low levels of 1 9 3 2 and 1 9 3 3 the
employment indexes for both areas moved approxim ately
parallel to each other, but in the subsequent recovery up
to the middle of 1 9 3 7 N ew Y o rk State showed a smaller
increase in employment than the country as a whole. B y
Ju ly , 1 9 3 7 employment in the U nited States had advanced
to a point slightly above the 19 2 9 average while N ew
Y o rk employment failed to reach the level p revailin g in
19 29 . O wing to a less severe decline in employment in
New Y o rk State from the middle of 1 9 3 7 to the middle
of 19 3 8 the relative positions of the indexes were reversed
and currently employment in this State stands at a
higher level relative to the 19 2 9 average than is the case
for the entire country. The fa c t that N ew Y o rk em ploy
ment has shown more moderate fluctuations throughout
most of the period under review is ap paren tly due in
p a rt to the im portance in this State of the clothing and
other consumer goods industries.
Crude materials.................
Crude foodstuffs................
Manufactured foodstuffs..
Semimanufactures.............
Finished manufactures. ..
F o r e ig n T r a d e
C o m m o d ity P ric e s
M erchandise exports from the U nited States during
M a y were valued at $249,000,000, a gain of 8 per cent
over A p ril, which is con trary to the usual seasonal move
ment between these two months. In the case of imports,
which were valued at $203,000,000, the rise of 9 per cent
from the A p r il figure w as about in accordance w ith
seasonal expectations. Com pared with M ay, 19 3 8 , exports
were 3 per cent lower, while im ports were 37 per cent
larger. The excess of exports therefore w as reduced to
$47,000,000 in M ay of this y e a r from $109,000,000 a
ye a r ago, but was substantially the same as in A p ril.
E x p o rts of crude foodstuffs du ring M ay registered a
decline in value of 68 per cent from the com paratively
Declines in grain prices and increases in quotations
fo r certain industrial raw m aterials predom inated in the
wholesale commodity m arkets du ring Ju n e .
F o llo w in g the sizable advance in M ay, wheat prices
moved lower during Ju n e , owing largely to favorable
weather fo r the grow ing sprin g crop and to grad u ally
increasing receipts of new w in ter wheat at Southwestern
points. A f t e r equaling the season’s high of 8 7 % cents a
bushel on Ju n e 1 , the cash quotation fo r sprin g wheat at
M inneapolis declined 6 % cents to 8 V /4 cents a bushel,
canceling two-thirds of the M a y advance, and w inter
wheat at K an sas C ity dropped 8 % cents to 7 6 % cents
a bushel. The Governm ent Ju n e 1 crop report, released
10.8
20.0
♦Domestic exports only.
♦♦Imports for consumption only.
W ith respect to exports of ind ividual commodities
du ring M ay, large decreases from a y e a r ago continued
to be reported in grain shipments, and exports of cotton
and coal continued substantially lower both in quantity
and in value. On the other hand, exports of A m erican
a ircra ft again increased, and exports of automobiles,
copper, m etal-w orking m achinery, petroleum products,
and m anufactures of rubber and tobacco were m aterially
larger than a y e a r ago. A m o n g the leading im port com
modities, increases over M ay, 19 3 8 were fa ir ly general,
the chief exceptions being substantial declines in receipts
of su gar and of rough, uncut diamonds, the latter accom
panied b y a large increase in im ports of cut diamonds.
Im ports of cocoa and wool were about five times as large
as the small quantities received a y e a r ago, and im ports
of nickel and crude petroleum were twice as large. Su b
stantial gains occurred also in the volume of im ports of
hides and skins, rubber, tin, and unm anufactured to
bacco. R a w silk im ports w ere substantially the same in
quantity as a y e a r ago, but ow ing to the price rise
showed an increase of about 3 5 per cent in value.
56
MONTHLY REVIEW, JULY 1, 1939
M IL L IO N S
OF B U S H E LS
1200
1000
800
600
4 00
In M ay, total sales of the reporting departm ent stores
in this D istrict were 8.3 per cent higher than last year,
but about h a lf of the increase w as due to one more
business d ay than in M ay, 19 3 8 . Stores in most localities
reported moderate increases in average daily sales over a
y ear ago, but fo r the D istrict as a whole departm ent
store sales showed a more than seasonal decline com
pared w ith A p ril. M a y sales of the leading apparel
stores in this D istrict were 4.8 per cent higher than
last year, but on an average daily basis the increase was
quite small.
Stocks of merchandise on hand in the department
stores, at retail valuation, were about 5 per cent lower
at the end of M ay, 19 3 9 than a y ea r previous, and
apparel store stocks were approxim ately 2 per cent lower.
200
1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939
A n nu al H a rv e sts o f W in te r and Spring W h e a t, 1929-1938, and
D epartm ent o f A g ricu ltu re E stim ate o f 1939 W h e a t
Production B ased on June 1 Conditions
a t the close of business Ju n e 9, placed the w inter crop
a t 5 2 3 ,4 3 1,0 0 0 bushels, and sp rin g wheat production
between 145,000,000 and 170,000,000 bushels. A s the
accom panying diagram indicates, without allowance for
the effect o f favorable weather since Ju n e 1 , the esti
mated total 19 3 9 wheat crop is considerably sm aller
than those of the two preceding years and is also below
the 19 2 8 -3 7 average o f 7 52,9 52,0 0 0 bushels. Th is y e a r ’s
crop is considered about equal to average domestic
requirements. C ash corn declined 3 cents to 4 9 % cents
a bushel du rin g Ju n e .
Silk eased to $ 2 . 5 1 % a pound, ow ing in p a rt to a
decrease in mill consumption, and rubber w as sligh tly
lower at 1 6 % cents a pound. Cotton prices, however,
reached higher levels for the y e a r du ring Ju n e . R a in fa ll
detrim ental to the grow ing crop, active demand for
cotton textiles, the possible im pounding of 600,000 bales
of the staple through the A n glo -A m erican agreem ent to
exchange cotton fo r rubber, and passage by the House of
R epresentatives of the p a rity paym ent and surplus
rem oval appropriations all contributed to the rise. On
Ju n e 8 spot cotton in N ew Y o rk reached 10 cents a pound,
the highest since A u g u st, 1 9 3 7 , but subsequently the
quotation receded to 9.83 cents, v irtu a lly unchanged
since the end of M ay. The quotation fo r the October
contract advanced over % cent to 8.82 cents a pound on
Ju n e 2 7 and thereafter receded slightly.
A m o n g the metals, scrap steel at P ittsb u rgh closed
the month at $ 1 5 . 2 5 a ton, up 8 7 % cents from the end of
M ay, and the price at Chicago showed a net gain of
3 7 % cents to $ 1 3 . 3 7 % a ton. Fo llo w in g a rise on the
London M etal E x ch a n ge , lead advanced 10 points in
N ew Y o rk to 4 .85 cents a pound, while tin showed no
net change, despite an increase in the export quota for
the third quarter from 40 to 4 5 per cent of “ sta n d ard ”
production.
D e p a rtm e n t Sto re T ra d e
F o r the three weeks ended Ju n e 24, departm ent store
sales in this D istrict w ere about 3 % per cent higher
than in the corresponding period of 19 3 8 , and a gain
over the M a y daily rate of sales was indicated, whereas
u su ally there is little change between the two months.
Percentage
change
May, 1939
compared with
May, 1938
Stock
on hand
end of
month
Locality
Net
New York and Brooklyn...........
Buffalo............................................
Rochester.......................................
Syracuse.........................................
Northern New Jersey.................
Bridgeport.....................................
Elsewhere......................................
Northern New York State.. .
Southern New York State. . .
Central New York State........
Hudson River Valley District
Westchester and Stamford.. .
Niagara Falls............................
+ 6 .5
+ 1 1 .4
+ 1 1 .3
+ 1 5 .0
+12.1
+10.6
+ 1 3 .7
— 1.5
+ 1 5 .4
+ 11.4
+ 1 5 .6
+ 1 6 .8
+ 7 .4
Per cent of
accounts
outstanding
April 30
collected in
May
1938
1939
5 .9
4 .1
3 .9
2 .3
4 .7
3.1
+ 0.2
4 9.7
43.0
54.1
4 0.4
4 2.5
40.3
32.4
4 8 .?
45.7
56.7
40.1
40.8
41.1
34.4
—
—
—
—
—
+
All department stores. . .
+ 8.1
5.1
46.3
4 5.6
Apparel stores..................
+ 4.;
— 1.8
45.2
46.2
Department Store Sales and Stocks, Second Federal Reserve District
(1923-25 average — 100)
1938
1939
May
March
April
May
Sales, unadjusted..............................................
Sales, seasonally adjusted...............................
81
84
80
91
86
89
85
88
Stocks, unadjusted............................................
Stocks, seasonally adjusted............................
83r
81r
78
78
78
77
78
76
Classification
Home furnishings........................................
Silverware and jewelry..............................
Women’s ready-to-wear accessories........
Men’s furnishings........................................
Men’s and Bovs’ wear...............................
Women’s and Misses’ ready-to-wear ..
Luggage and other leather goods............
Books and stationery.................................
Linens and handkerchiefs.........................
Toys and sporting goods...........................
Musical instruments and radio...............
Toilet articles and drugs...........................
Silks and velvets.........................................
Woolen goods..............................................
Miscellaneous...............................................
Net sales
percentage change
May, 1939
compared with
May, 1938
Stock on hand
percentage change
May 31, 1939
compared with
May 31. 1938
+ 1 6 .0
+
+ 1 0 .4
+ 8 .9
+ 8 .7
+
+ 7 .4
+ 7 .3
+ 4.1
+ 3.7
—
— 0 .9
— 2 .9
— 3.6
— 4 .3
— 7 .4
— 13.7
— 17.8
+ 8 .3
—
— 5 .8
+ 13.4
— 11.4
— 10.7
— 93
— 9 .2
—
+
— 7 .6
— 4 .8
— 10.3
+ 2 .5
+ 1 4 .6
+ 2 .7
— 5 .2
— 12.3
—
+
10.6
8.0
0.8
10.0
10.8
6.6
1.8
0.1
FEDERAL
RESERVE
BANK
OF
NEW
YORK
MONTHLY REVIEW, JULY 1, 1939
Business C on ditions in the U n ited States
(S u m m a rized b y the B o a r d o f G ov ern ors o f the F e d e r a l E eserve S y stem )
I n d u s tr ia l p ro d u c tio n , w h ich had been r e ce d in g on a sea son a lly a d ju ste d
ba sis d u rin g the first fo u r m onths o f th is y ea r, sh ow ed little ch an g e in M a y
and in creased con sid e r a b ly in the first th ree w eeks o f Ju n e. T h e ad van ce
reflected p r in c ip a lly la r g e r ou tp u t o f steel an d coa l, w h ich h a d p re v iou sly
show n c o n sid era b le d eclin es.
P
Index of Physical Volume of Industrial Produc
tion, Adjusted for Seasonal Variation
(1923-25 average = 100 per cent)
Index of Total Loadings of Revenue Freight,
Adjusted for Seasonal Variation (1 9 23 -2 5
average =
per cent)
100
r o d u c t io n
a n d
E
m p l o y m e n t
I n M a y the B o a r d 's sea son a lly a d ju s te d in d ex o f in d u s tria l p ro d u c tio n was
at 92 p er cen t o f the 1923-192J5 av erag e, the sam e as in A p r il. V o lu m e o f m a n u
fa c t u r in g p r o d u c tio n d eclin ed som ew hat fu rth e r , ow in g ch iefly to red u ction s
in ou tp u t o f steel and au tom ob iles, b u t m in era l p ro d u c tio n in creased as m ost
b itu m in ou s co a l m ines w ere reop en ed a fte r the m id d le o f the m onth.
S teel in g o t p ro d u ctio n , w h ich had been at an a v era g e rate o f 52 p er cen t
o f c a p a c ity in A p r il, d eclin ed to 45 p er cen t in the th ird w eek o f M a y . A b o u t
th is tim e p rices o f som e ty p e s o f steel w ere red u ced co n sid e ra b ly and orders
w ere p la c e d in su b sta n tia l volum e. S u b sequ en tly steel ou tp u t in creased and
the cu rren t ra te is a b ou t 55 p er cen t o f c a p a c ity , a p p ro x im a te ly the lev el m a in
ta in ed d u r in g the first qu arter o f th is y ea r.
I n the a u tom ob ile in d u s try ou tp u t w as red u ced b y a b o u t one fifth at the
b e g in n in g o f M a y , an d in th e la tter p a r t o f the m onth there was fu rth e r c u r
ta ilm en t p a r tly as a result o f a strik e at a b o d y p la n t w h ich led to the clo sin g
o f m ost a ssem b ly lines o f one m a jo r p rod u cer. * I n the e a rly p a r t o f Ju n e the
strik e w as settled an d b y the m id d le o f the m on th ou tp u t h a d risen to a level
h ig h er th an th a t p re v a ilin g d u rin g m ost o f M a y . L u m b er p ro d u c tio n in creased
fu rth e r in M a y fo llo w in g less than the usual seasonal rise d u rin g th e first
q u arter o f th is y ear.
O u tp u t o f n on d u ra b le m a n u fa ctu res in the a g g r e g a te w as a t a b ou t the
sam e rate in M a y as in A p r il. A t w oolen m ills a c tiv ity in creased sh arply,
fo llo w in g a d eclin e in A p r il, and at co tto n an d r a y on m ills ou tp u t w as m a in
tain ed . M ill con su m p tion o f raw silk sh ow ed a fu rth e r sharp d eclin e. A t m eat
p a c k in g establish m en ts ou tp u t in crea sed m ore th an seasonally, and as in M a rch
an d A p r il w as con sid e r a b ly la r g e r th an a y e a r a g o, r e fle ctin g a sharp in crease
in the nu m ber o f h og s slau g h tered . F lo u r p ro d u c tio n con tin u ed in la r g e r volum e
th an is u su al a t th is season, w h ile a t su ga r refineries there w as a d ecrease
in ou tp u t.
M in era l p r o d u c tio n in creased in M a y ow in g ch ie fly to the reo p e n in g o f
m ost bitu m in ou s c o a l m ines. A n th r a c ite p ro d u c tio n , w h ich h a d been in la rg e
volu m e in A p r il, d eclin ed in M a y , w h ile ou tp u t o f cru de p etroleu m in creased
som ew hat fu rth e r .
V a lu e o f resid en tia l b u ild in g con tra cts, w h ich had show n a con sid era b le
d eclin e in A p r il, in crea sed in M a y , a c c o r d in g to figu res o f the F . W . D o d g e
C orp ora tion . P u b lic resid en tia l aw a rd s w ere h ig h er o w in g to a g rea ter volu m e
o f U n ited S ta tes H o u sin g A u th o r ity p r o je c t s ; p riv a te aw ard s also in crea sed
b u t on a sea son a lly a d ju ste d ba sis w ere b e lo w the h ig h level reach ed in F e b r u
a ry an d M arch . C on tracts f o r b o th p u b lic an d p riv a te n on resid en tia l c o n str u c
tion d eclin ed in M a y , fo llo w in g in crea ses in the p re c e d in g tw o m onths.
F a c to r y em p loy m en t an d p a y ro lls sh ow ed little ch an g e fr o m the m id d le
o f A p r il to the m id d le o f M ay , a c c o r d in g t o rep orts f o r a nu m ber o f States.
Distribution and Commodity P rices
Indexes of Wholesale Prices Compiled by United
States Bureau of Labor Statistics (1926
average =:
per cent)
100
BILLIONS
OF DOLLARS
12i
D ep a rtm en t store sales d eclin ed fr o m A p r il to M ay , w h ile sales at v a r ie ty
stores an d b y m a il ord er houses sh ow ed litt le ch an g e. In the first tw o w eeks
o f J u n e d ep a rtm en t store sales in creased .
F r e ig h t car lo a d in g s in crea sed in the la tte r h a lf o f M a y , refle ctin g ch iefly
ex p a n sion in c o a l shipm ents. I n the first h a lf o f Ju n e lo a d in g s o f c o a l in creased
fu rth e r an d sh ipm ents o f oth er classes o f fr e ig h t also w ere in la rg e r volum e.
P r ic e s o f in d u s tria l m aterials, su ch as steel scrap , hides, w ool, an d p rin t
cloth s, a d v a n ced som ew hat fr o m the m id d le o f M a y to the th ird w eek o f Ju n e.
W h ea t, silk, an d c o a l p rice s d eclin e d ea rly in J u n e, fo llo w in g in creases in
M a y , an d there w ere fu rth e r d eclin es in p rice s o f liv e sto c k an d m eats.
B
Wednesday Figures for Reporting Member Banks
in 101 Leading Cities (Latest figures
are for June 14)
a n k
C
r e d it
a n d
M
o n e y
R
a tes
D u rin g the^ fo u r w eeks en d ed J u n e 14 t o ta l loa n s an d investm ents at
m em ber ba n k s in 10.1 le a d in g citie s in crea sed b y $2 70,0 00,0 00, fo llo w in g a
d eclin e o f $2 00,000,000 in the p re c e d in g fo u r w eeks. T h e m a jo r in crease was
in h o ld in g s o f T rea su ry notes an d b o n d s a t N ew Y o r k C ity banks. D em and
d ep osits in creased sh arply to n ew h ig h levels b oth in N ew Y o r k an d in the
le a d in g citie s ou tsid e N ew Y o rk .
D u rin g the first three w eeks o f J u n e excess reserves o f m em ber banks
sh ow ed little ch a n g e fr o m the new h ig h lev el o f $4,300,000,000 reached on
M a y 24. C on tin u ed g o ld im p orts la r g e ly w en t in to earm arked g o ld and in to
ba lan ces h eld f o r fo r e ig n a cco u n t a t the F e d e r a l R eserve B an ks.
P r ic e s o f U n ited S ta tes G overn m en t secu rities, w h ich ha d a d v an ced sh arply
fr o m A p r il 11 to J u n e 5, re a ch in g a n ew h ig h lev el, eased s lig h tly d u rin g the
n ex t tw o w eeks. T h e y ie ld on the lo n g e s t term T rea su ry b on d o u tsta n d in g
d eclin ed fr o m 2.49 p er cen t on A p r il 11 to 2.26 p er cen t on J u n e 5 and increased
to 2.32 p er cen t on J u n e 19. O th er m on ey rates sh ow ed little chan ge.
@FedFRASER