Full text of Economic Policy Review (Federal Reserve Bank of New York) : November 1, 1934

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MONTHLY REVIEW
of Credit and Business Conditions
S e c o n d
F ed era l E eserve A g e n t

F e d e ra l

R e se rv e

F ed era l E eserve B an k, N ew Y o rk

D is tric t
N o v e m b e r 1, 19 34

m em b er b a n k lo an s a n d in v e stm e n ts w h ich w as u sed fo r
issu ed b y th e F e d e ra l R eserv e
T o ta l lo an s a n d in v e stm e n ts of w eekly re p o rtin g th e first tim e in th e22r einpdoicrtates,
how ever, th a t th e in crease
m em b er b an k s, w h ich re m a in e d alm o st s ta tio n a ry fro m Bino abrda n kon inOvctober
e
stm
e
n
ts
w
as
p
ro
b
d u e chiefly to p u r ­
th e b e g in n in g of J u ly to th e m id d le of S ep tem b e r, chases of sec u ritie s of G o v ern m eanbtlyag encies
a t are fu lly
show ed a ren e w ed in c re ase on a m o d e ra te scale d u rin g g u a ra n te e d as to b o th p rin c ip a l a n d in te re s th
t
b
ov­
th e p a st m o n th , a n d on O cto b er 24 re a c h e d th e h ig h e st e rn m e n t. T he a m o u n t o f su ch sec u ritie s showy nth be yG th
e
p o in t since th e e a rly p a r t o f J a n u a r y 1932.
re
p
o
rt
o
f
O
cto
b
er
22
w
as
$446,000,000,
w
h
ich
is
a
n
O ne fa c to r in th is u p tu rn in m em b er b a n k c re d it w as a m o u n t m o re th a n sufficient to ac co u n t fo r all o f th e
th e first in c re ase in se c u rity lo an s in sev era l m o n th s. in
re ase in h o ld in g s of se c u ritie s o th e r th a n d ire c t o bli­
F ro m th e b e g in n in g of J u ly u n til th e en d of S ep tem b e r g actio
n s of th e G o v ern m e n t d u rin g th e p a s t y e a r.
th e re w as a ste a d y re d u c tio n in s e c u rity lo an s in th e
N
e
t d e m an d d e p o sits of th e re p o rtin g m em b er b a n k s
r e p o rtin g banks, w h ich p ro b a b ly reflected in p a r t th e increasv,
,000,000 f u r th e r in th e fo u r w eeks en d ed
w eakness in se c u rity p rice s d u rin g m u ch of th a t p erio d . O cto b er 24,$2rM
d
u
to ex ten sio n s o f c re d it by th e
R e g u la tio n T co n cern in g th e *1 E x te n sio n a n d M a in te n an c e re p o rtin g b anks,e apn adr tly
p
a
r
tly
G o v ern m e n t e x p e n d itu re s
of C re d it by B ro k ers, D e alers, a n d M em bers of N a tio n a l of fu n d s ra is e d p re v io u sly to
th ro u g h th e sale of U n ite d
S e c u ritie s E x c h a n g e s ” w as issu ed b y th e F e d e ra l R eserv e S ta te s sec u ritie s a n d p la c e d te m p o ra rily in d o rm a n t
B o a rd n e a r th e en d of S ep tem b e r, a n d its a p p lic a tio n w as G o v ern m e n t dep o sits, w h ich a re n o t in c lu d e d in th e r e ­
d e fe rre d u n til O cto b er 15 to en ab le those affected to p o rte d n e t d e m an d dep o sits. T hese e x p e n d itu re s d u rin g
fa m ilia riz e them selves w ith its p ro v isio n s. N o f u r th e r th e p a s t m o n th are reflected in a re d u c tio n of $239,000,re d u c tio n in se c u rity lo an s h as follow ed th e an n o u n c e ­ 000 in th e a m o u n t o f G o v ern m e n t d ep o sits in these
m e n t of th is re g u la tio n , b u t in fa c t th e v olu m e of su ch ban k s. T he in c re ase in n e t d e m an d d ep o sits in th e
lo a n s in re p o rtin g m em b er b an k s, w h ich in S ep tem b e r re p o rtin g N ew Y o rk C ity m em b er b a n k s d u rin g th e
h a d reac h ed th e low est lev el since 1922, h a s since show n m o n th a m o u n te d to $130,000,000 a n d c a rrie d th e volum e
a slig h t in crease.
of su ch d e p o sits to a lev el n e v e r b e fo re a tta in e d ex cep t
A f u r th e r m o d e ra te in c re ase in a ll o th e r loans, co n­ fo r a s h o rt tim e in th e a u tu m n of 1929. T h e in c re ase of
s istin g la rg e ly o f c re d it ex ten d e d to finance a g ric u ltu re , $160,000,000 in re p o rtin g m em b er b an k s in o th e r cities
com m erce, a n d in d u s try , also c o n trib u te d to th e u p tu r n c a rrie d n e t d e m a n d d e p o sits of th o se b a n k s to th e h ig h est
in to ta l lo an s a n d in v e stm e n ts d u rin g th e p a s t m o n th .
BILLIONS
O n O cto b er 24 th e volu m e of lo an s o th e r th a n s e c u rity
OF DOLLARS
lo a n s in th e w eek ly re p o rtin g m em b er b a n k s show ed a n
in c re ase o f a p p ro x im a te ly $320,000,000 over th e seasonal
low p o in t re ac h ed on J u ly 18. T h is in c re ase is th e
la rg e s t fo r th e c o rre sp o n d in g p e rio d o f a n y y e a r since
1929, w h en th e in c re ase fo r a so m ew h at la rg e r g ro u p of
b a n k s w as of a b o u t th e sam e am o u n t. T h e in c re ase d u r ­
in g th e p a s t th re e m o n th s h as been ab o u t eq u a lly d iv id e d
betw een th e la rg e N ew Y o rk C ity b a n k s a n d th e r e p o r t­
in g m e m b er b a n k s in 90 o th e r cities th ro u g h o u t th e
c o u n try .
T h e a c co m p an y in g d ia g ra m tra c e s th e ch an g es since
th e b e g in n in g of th is y e a r in th e v olu m e of se c u rity
lo an s a n d of all o th e r lo an s m ad e b y all re p o rtin g m em ­
b e r b an k s. A s th e d ia g ra m in d ic a te s, th e sh rin k a g e in
s e c u rity loans betw een J u ly a n d S e p te m b e r exceeded th e
e x p an sio n in " a l l o th e r ” loans, even th o u g h th e in crease
in lo an s of th a t c a te g o ry w as co n sid e ra b ly g re a te r th a n
u s u a l fo r th e tim e of y e a r. T h e d eclin e in th e to ta l v o l­
u m e o f loans, how ever, w as a b o u t offset b y an in c re ase
in b a n k in v e stm e n ts in se c u ritie s o th e r th a n d ire c t o b li­
Movement of Security Loans and All Other Loans of Weekly Report­
g a tio n s o f th e U n ite d S tate s. T h e n ew classificatio n of
ing Member Banks in Principal Cities During 1934
Money Market in October




MONTHLY REVIEW, NOVEMBER 1, 1934

82

te m b e r a p p ro x im a te ly 93 p e r c e n t w ere h e ld b y a c c e p t­
in g b an k s a n d b an k ers, w h ich is th e sam e p ro p o rtio n
as a t th e e n d of A u g u st.
C om m ercial P a per M a rk et
In v e s tm e n t d e m a n d b y th e b a n k s fo r co m m ercial
p a p e r d ra w n by h ig h g ra d e in d u s tr ia l a n d m e rc a n tile
co n cern s re m a in e d activ e d u rin g th e m o n th of O cto ber
a n d d e alers q u ic k ly sold th e new su p p lie s of p a p e r com ­
in g on th e m a rk e t. T h e to ta l volu m e of b u sin ess tr a n s ­
ac ted in th e co m m ercial p a p e r m a rk e t w as a b o u t th e
sam e as in S ep tem b e r, th e tu rn o v e r b e in g lim ite d by th e
co m p a ra tiv e ly sm all a m o u n t of acco m m o d atio n so u g h t
b y b o rro w ers w hose n o te s ca n be sold in th e o pen
m a rk e t. R a te s c o n tin u e d a t a ra n g e of % - l p e r ce n t fo r
av erag e g ra d e p rim e fo u r to six m o n th p a p e r, a lth o u g h
it w as re p o rte d th a t m ore sales w ere m ad e a t % p e r ce n t
th a n a t th e h ig h e r ra te .
T he a m o u n t of co m m ercial p a p e r o u ts ta n d in g , w h ich
M o n e y R a tes
h
a
s
in c re ased each m o n th since J a n u a r y w h en
T h e m o n ey m a rk e t h as been s lig h tly easier, on th e $108,000,000
as o u ts ta n d in g , re a c h e d $192,000,000 a t
w hole, d u rin g th e p a st m o n th . Y ield s on sh o rt te rm G ov­ th e en d of S epwtem
an a m o u n t 2 p e r c e n t la rg e r th a n
e rn m e n t secu ritie s, w h ich rose so m ew h at in S ep tem b e r, a m o n th p rev io u s abne dr, 56
p e r c e n t above a y e a r ago.
tu rn e d d o w n w a rd in O cto b er ac co m p an y in g a rise in th e
p rice s of lo n g te rm G o v ern m e n t secu ritie s, a n d n e a r th e Security Markets
en d o f th e m o n th m a rk e t ra te s fo r b a n k e rs accep tan ces
o f s h o rt m a tu rity w ere re d u c e d slig h tly .
D u rin g O ctober co n sid erab le p ric e ad v an c es o c cu rre d
in th e b o n d m a rk e t, c o n tin u in g th e reco v ery w h ich d e­
M oney Rates at New York
veloped in th e la tte r p a r t of S ep tem b e r. U n ite d S ta te s
T re a s u ry b on ds w ere esp ecially stro n g , a n d th e av erag e
Oct. 31, 1933 Sept. 28, 1934 Oct. 31, 1934
p ric e of these issues show ed a n e t ad v an c e o f 2V8 p o in ts
Stock Exchange call loans..........................
1
1
Stock Exchange 90 day loans...................
fo r th e m o n th . T h e a v erag e y ie ld on a ll o u ts ta n d in g
Prime commercial paper— 4 to 6 months
T re a s u ry bo n d s reced ed to ab o u t 2.90 p e r cen t, as com ­
Bills— 00 day unindorsed...........................
%
4* v’
A
X
Customers’ rates on commercial loans..
f 2 .1 3
t 2 .7 1
1-2.08
p a re d w ith 3.25 p e r ce n t a t m id -S e p te m b e r a n d 2.70
Treasury securities
Maturing March (vield)........................
0 .1 6
N o yield
N o yield
p e r ce n t a ro u n d th e m id d le of J u ly , as th e ac co m p an y ­
Maturing June (yield)............................
0 .1 5
N o yield
N o yield
Maturing December 1935 (yield).. . .
0 .7 2
in
g d ia g ra m in d ic ates, reflectin g th e reco v ery o f n e a rly
0 .3 9
Average rate on latestTreasury bill sales
tw o -th ird s of th e la te su m m e r d eclin e in G o v ern m e n t
0 .1 7
91 dav issue...............................................
182 day issue...............................................
d'.29
o lio
b o n d prices. T he G o v ern m e n t b o n d m a rk e t wTas p a rtic u ­
Federal Reserve Bank of New York re­
discount rate...............................................
2
la rly stro n g ju s t a f te r th e a n n o u n c e m e n t of a call fo r
1H
1H
Federal Reserve Bank of New York
re d e m p tio n on A p ril 15, 1935 of a f u r th e r $1,870,000,000
buying rate for 90 day indorsed bills
H
H
Vi
of F o u rth L ib e rty bonds, re p re s e n tin g th re e -fifth s of th e
* Nominal
t Average rate of leading banks at middle of month
F o u rth L ib e rty L o an bon ds now o u ts ta n d in g . P ric e s of
G o v ern m e n t g u a ra n te e d issues also ad v a n c e d s u b s ta n ­
B ill M ark et
tia lly d u rin g O ctober.
T h e b a n k e rs accep ta n ce m a rk e t w as g e n e ra lly q u ie t
d u rin g O ctober. D e a le rs ’ sales of bills to in v e stin g in s ti­
tu tio n s so m ew h at exceeded th e sm all am o u n ts of new
b ills co m in g in to th e m a rk e t d u rin g th e first th re e w eeks,
a n d p o rtfo lio s of th e d isc o u n t houses co n se q u en tly d e­
clin ed som ew hat. O n O ctober 24 th e d e alers re d u c e d
th e ir ra te s by 1 /1 6 p e r ce n t on m a tu ritie s u p to 90 days,
th e o fferin g ra te b ecom in g % p e r cen t, th e sam e q u o ta ­
tio n th a t w as in effect p rio r to th e ad v an c e in s titu te d
to w a rd th e en d o f S ep tem b e r. F o llo w in g th is re d u c tio n
in ra te s, in v e stm e n t d e m an d fo r b ills slack en ed a n d
d e a le rs ’ p o rtfo lio s te n d e d to in crease slig h tly .
D u rin g S ep tem b e r, th e volu m e of b a n k e rs accep tan ces
o u ts ta n d in g rose $19,000,000 f u r th e r to $539,000,000, re ­
flectin g p rin c ip a lly an in c re ase of $20,000,000 in bills
d ra w n to finance th e sto ra g e of goods in dom estic w a re ­
houses. Im p o rt b ills also in c re ased $5,300,000, w hile
e x p o rt b ills d eclin ed $2,100,000 an d bills based on goods
Average Yield on United States Treasury Bonds (Federal Reserve
sto red in o r sh ip p e d betw een fo re ig n c o u n trie s d ecreased
Bank of New York average of 12 outstanding issues; scale
$3,500,000. O f a ll b ills o u ts ta n d in g a t th e e n d o f S ep ­
inverted to show price movements)

lev el sin ce 1931. F o r a ll re p o rtin g m em b er b a n k s th e
in c re ase in n e t d e m a n d d e p o sits since th e B a n k H o lid a y
now am o u n ts to n e a rly $4,000,000,000.
T h e c o n tin u e d ra p id e x p an sio n of m em b er b a n k d e­
p o sits invo lves th e u tiliz a tio n of a s u b s ta n tia l a m o u n t of
th e reserv es w h ich h av e been a c q u ire d by m em b er b an k s
since M arch 1933, a n d in a d d itio n c u rre n c y re q u ire ­
m e n ts h av e p ro v id e d seasonal em p lo y m e n t fo r som e of
th e idle reserv es o f m em ber banks. C o n seq u e n tly , excess
reserv es of m em b er b an k s have show n no f u r th e r in crease
fo r a n u m b e r of w eeks. T he p re s e n t volu m e of excess
reserv es is m ore th a n dou ble th a t of a y e a r ago, how ever,
as th e a c tu a l a m o u n t o f reserv e b alan ces h eld by m em b er
b a n k s in th e R eserv e B a n k s h a s in c re ased n e a rly
$1,300,000,000 d u rin g th e p a s t y e a r, w h ile th e am o u n t of
fu n d s u sed as re q u ire d reserv e a g a in s t d ep o sits h as in ­
crea se d a b o u t $400,000,000.




I X
X

* X - l
X - l

* x - l
H - l

FEDERAL RESERVE AGENT AT NEW YORK

83

su b sc rip tio n books fo r th e ex ch an g e o f th ese b o n d s in to
3*4: p e r c e n t T re a s u ry b o n d s of 1944-46 rem a in ed o pen
th ro u g h O cto b er 11, a n d a to ta l of $424,000,000 of
F o u rth L ib e r ty ’s w ere so ex ch an g ed . T hese ex chan ges,
to g e th e r w ith th e $596,000,000 ex ch an g ed fo r 4 y e a r
T re a s u ry no tes in S e p te m b e r le ft a b o u t $230,000,000
of called L ib e r ty ’s to be red eem ed in cash on O cto b er 15.
T hese re m a in in g b o n d s w ere p re se n te d fo r p a y m e n t
slow ly because of th e ir w id e d is trib u tio n , on ly ab o u t
$95,000,000 being tu r n e d in by O ctober 25.
O n O ctober 12, th e S e c re ta ry o f th e T re a s u ry called
a n a d d itio n a l $1,870,000,000 of F o u rth L ib e rty bon d s
fo r re d e m p tio n on A p ril 15, 1935. T h e bo n d s in c lu d e d
in th is th ird call fo r re d e m p tio n a re those b e a rin g se ria l
n u m b e rs e n d in g in th e d ig it 5, 6 o r 7. A y e a r ago
a p p ro x im a te ly $6,268,000,000 of F o u rth 4 1/4 ’s w ere o u t­
s ta n d in g , b u t th e a m o u n t h a s been re d u c e d to
$3,138,000,000 as a re s u lt of th e first tw o calls a n d
w ill be f u r th e r re d u c e d to a b o u t $1,268,000,000 by A p ril
15, 1935, by th e th ir d call. D u rin g th e p a st y e a r a b o u t
$2,750,000,000 of F o u r th L ib e rty L o an b o n d s have b een
New Financing
fu n d e d in to o th e r in te re s t b e a rin g sec u ritie s a n d
T h e la rg e st new s e c u rity offerin g s d u rin g O ctober re
a
b
t $380,000,000 o f th e b o n d s in c lu d e d in th e first
w ere a $50,000,000 issue of 3 p e r c e n t H o m e O w n e rs ’ tw oo u calls
e r h av e been p a id off o r w ill be red e em ed
L o an C o rp o ra tio n bon ds d u e in 1952 a n d ca llab le in on p re s e n tae ith
tio
n.
1944, a n d a $30,000,000 re fu n d in g issu e of F e d e ra l
In te rm e d ia te C re d it B a n k s h o rt te rm d e b e n tu re s. B o th Foreign Exchange
of th ese q u a si-g o v e rn m e n ta l issues w ere q u ic k ly ta k e n
W id e flu c tu a tio n s in th e fo re ig n ex ch an g es o c c u rre d
b y su b scrib ers. T he H om e O w n e rs’ L o a n C o rp o ra tio n
in
O ctober as in th e p re v io u s m o n th . A f te r d e c lin in g
b o n d s w h ich a re fu lly g u a ra n te e d as to p rin c ip a l a n d
in te re s t by th e U n ite d S ta te s G o v ern m e n t w ere d is­ s h a rp ly a t th e b e g in n in g of th e second w eek, th e gold
tr ib u te d b y a sy n d ic a te of b o n d houses th a t in c lu d e d a c u rre n c ie s reco v ered a n d m a in ta in e d a v a ry in g p re m iu m
la rg e n u m b e r of firm s, a n d to fa c ilita te a w id e d is trib u ­ a g a in s t th e d o lla r u n til a re su m p tio n of th e d o w n w a rd
tio n of th e issue th e b on ds w ere o b ta in ab le in d e n o m in a­ te n d e n c y in th e second h a lf of th e m o n th c a rrie d th e m
tio n s as low as $25. T he g re a te r p a r t o f th e H om e to a d isc o u n t a n d in som e cases to th e gold im p o rt
O w n e rs ’ L o an C o rp o ra tio n b o n d s now o u ts ta n d in g have p o in ts. M ean w hile, th e s te rlin g c u rren cies, w h ich h a d
been p u t o u t in ex ch an g e fo r m o rtg a g es, a lth o u g h som e w eak en ed in S e p te m b e r a n d e a rly O ctober, re g is te re d n e t
b o n d s have been sold p re v io u sly u n d e r co m p etitiv e b id ­ g a in s fo r th e m o n th .
T h e F re n c h fra n c h e ld c o m p a ra tiv e ly ste a d y a t a lev el
d in g by th e T re a s u ry a c tin g as a g e n t fo r th e H o m e
so m ew h at below its en d of S ep tem b e r q u o ta tio n fo r
O w n e rs ’ L o a n C o rp o ra tio n .
O th e r new s e c u rity issu es d u rin g O cto b er in c lu d e d sev era l d a y s a t th e b e g in n in g of O ctober, d ip p e d to
ab o u t $20,000,000 of sm all S ta te a n d m u n ic ip a l se c u rity $0.06611/4 on th e 9 th , a n d th e n reco v ered to $0.0666 on
flo tatio n s a n d $31,000,000 of c o rp o ra tio n issues, p rin c i­ th e 1 1th . T h is h ig h e r level w as m a in ta in e d u n til th e
p a lly a $20,000,000 issue of E d iso n E le c tric Illu m in a tin g 1 6th , a f te r w h ich a ste a d y d eclin e dev elo p ed w h ich c a rrie d
C o m p an y of B o ston 3 y e a r n o tes, a n d $9,000,000 of q u o ta tio n s to th e estim a te d g o ld im p o rt p o in t on th e
DOLLARS
DOLLARS
S hell U n io n O il C o rp o ra tio n n o te s w h ich w ere re p o rte d
0|----------- ---------.0680
to h ave been p la ced p riv a te ly . T h e re w ere also som e
p u b lic o fferings of p re v io u sly issu ed secu ritie s, in c lu d in g
$8,000,000 o f S co vill M a n u fa c tu rin g C o m p an y d eb en ­
5.055 ■
.0675
tu re s an d also som e m u n ic ip a l bon ds p rev io u sly a c q u ire d
by th e P u b lic W o rk s A d m in is tra tio n a n d re c e n tly p u r ­
COLD
EXPORT
0A
.06 70 -V
poi NT ...... —
ch ased b y b a n k in g hou ses fro m th e R e c o n stru c tio n
F in a n c e C o rp o ra tio n .
N ew fin an c in g by th e U n ite d S ta te s G o v ern m e n t w as
4.955
.066 5
par y
lim ite d to five $75,000,000 issues of 182 d a y T re a s u ry
bills w hich re p la ced five $50,000,000 m a tu ritie s a n d p ro ­
v id e d $125,000,000 of a d d itio n a l fu n d s. R a te s on
4.90o
.0660
gToU d IMPORT
T re a s u ry b ill issues te n d e d d o w n w a rd d u rin g O ctober,
PO INT
th e av erag e ra te on th e issu e d a te d O cto b er 31 b ein g
.06 55
4 3 55
0.19 p e r cent, co m p ared w ith 0.28 p e r ce n t on th e
O cto b er 3 issue. O th e r p u b lic d e b t tra n s a c tio n s d u rin g
O cto b er re p re s e n te d th e co m p letio n of th e re fin a n c in g
4.80^ STERLING
.0650 FRENCH FR ANC
SEPT
OCT
OCT
SEPT
o f th e $1,250,000,000 o f F o u rth L ib e rty L o an bo n d s
Course of Sterling and French Franc Exchanges at New York
w h ich h a d been ca lled fo r p a y m e n t on O cto b er 15. T he
(Latest quotations are for October 29)

I n th e dom estic c o rp o ra tio n b o n d d iv isio n also, p ric e s
c o n tin u e d to follow th e u p w a rd co urse w h ich p re v a ile d
in th e second h a lf of S ep tem b e r. A ll classes of bo n d s
ad v an c ed fro m 1 to 2 p o in ts ; th e h ig h e st g ra d e b o n d
g ro u p rose v irtu a lly to th e h ig h level a tta in e d in J u ly ,
a n d s lig h tly less h ig h g ra d e issues ad v a n c e d to w ith in
1 p o in t of th is level. M ed iu m a n d low er g ra d e issues,
how ever, re m a in e d 4 o r m ore p o in ts below th e h ig h e st
levels of th e su m m er. F o re ig n b o n d s on th e w hole
show ed som e f u r th e r g a in also.
I n c o n tra st to th e ad v an c e in b o n d p rice s, stock p ric e
m o v em en ts w ere irre g u la r a n d tra d in g c o n tin u e d q u ie t
d u rin g O ctober. T he g e n e ra l a v erag e of p rice s flu c tu a te d
w ith in a ra n g e of ab o u t 4 p e r cen t, a lth o u g h to w a rd th e
en d of O ctob er q u o ta tio n s, esp ecially fo r p u b lic u tility
stocks, w ere som ew hat below th e en d of S ep tem b e r level.
B a n k stocks, w h ich a re n o t in c lu d e d in th e g e n e ra l stock
p ric e av erag es, m ad e som e n e t g a in fo r th e m o n th ,
how ever.




.

n\

84

MONTHLY REVIEW, NOVEMBER 1, 1934

2 9 th , as th e a c co m p an y in g d ia g ra m in d ic ates. N o gold
sh ip m e n ts w ere re p o rte d , how ever. T he belga, th e Sw iss
fra n c , a n d th e g u ild e r m oved sim ila rly to th e F re n c h
f r a n c ; th e belga, w h ich w as th e w eak est of th e fo u r c u r­
ren cies, w as q u o ted below p a rity co n siste n tly a n d fell
below th e gold im p o rt p o in t on th e 2 4 th . L ire follow ed
th e sam e g e n e ra l tre n d .
S te rlin g o p en ed th e m o n th a t its low est q u o ta tio n
since F e b ru a r y — $ 4 .9 1 % — a n d a fte r rec o v e rin g slig h tly ,
d ro p p e d to $4.90 on th e 10th. O n th e 1 6th , how ever, th e
p o u n d b e g an to s tre n g th e n , an d , as th e d ia g ra m also
show s, rose m ore th a n 7 ce n ts in th e fo llo w in g w eek,
w h ile th e g old c u rre n c ie s declin ed . O n O ctober 24, s te r­
lin g closed a t $4 .9 8 % a n d a g a in on th e 3 0 th w as above
$4.98. R eich sm ark s, in d e p e n d e n t of th e ten d en c ies of
b o th s te rlin g a n d th e gold cu rren cies, w ere s tro n g e r th a n
in S ep tem b e r a n d rea c h e d a new h ig h o f $0.4073 on th e
1 6 th ; th e y re m a in e d above th e ir p a rity of $0.4033 u n til
th e 2 4 th w h en th e y d ro p p e d to $0.4028, th e ir low fo r
th e m o n th .
A rg e n tin e pesos a n d th e S c a n d in a v ia n c u rre n c ie s fo l­
low ed s te rlin g , b u t th e y en , w h ich m oved w ith th e
p o u n d d u rin g m ost of th e m o n th , d id n o t reco v er as
m u ch as s te rlin g a n d closed th e m o n th w ith a n e t loss.
B ra z ilia n m ilre is h e ld closely to a level of a b o u t $0.0825.
T he silv e r c u rre n c ie s rose s h a rp ly on th e 1 1 th w ith th e
p ric e of silv er, b u t fell co n sid erab ly a f te r im p o sitio n of
a d u ty a n d eq u a liz a tio n c h arg e on silv e r e x p o rts by th e
C hinese g o v ern m en t. T h e S h a n g h a i d o lla r w as q u o te d a t
15 to 20 p e r ce n t d isc o u n t fro m its th e o re tic a l p a rity ,
b ased on c u rre n t silv er p rices, d u rin g th e la tte r p a r t
of th e m o n th . C a n a d ia n d o lla rs, w h ich h a d ru le d above
$1.03 th ro u g h o u t m ost of S ep tem b e r, flu c tu a te d betw een
$1.01% a n d $1.02V2 d u rin g O ctober.

m en ted , how ever, b y th e release of $350,000 o f g old
p re v io u sly e a rm a rk e d fo r fo re ig n ac co u n t a t th is b a n k
a n d by th e re c e ip t by th e m in ts a n d assay offices of
n ew ly m in e d dom estic gold a n d s c ra p g o ld a v e ra g in g
ab o u t $2,600,000 a n d $1,100,000 a w eek, re sp ec tiv ely , so
th a t th e gold stock rose n e a rly $25,000,000 d u rin g O cto­
b er. A d d itio n a l tra n s a c tio n s a t N ew Y o rk th a t d id n o t
affect th e gold stock w ere th e re c e ip t of $1,000,000 fro m
C olom bia w h ich w as im m e d iate ly e a rm a rk e d on a rriv a l
a n d th e release fro m e a rm a rk of $1,000,000 of g o ld fo r
e x p o rt to C hile.
Commodity Prices

T he d o w n w a rd m ov em ent in th e p ric e s o f m ost of th e
p rin c ip a l a g ric u ltu ra l co m m odities, w h ich b e g an in th e
e a rly p a r t of S ep tem b e r, c o n tin u e d w ith little in te r r u p ­
tio n d u rin g O ctober. T h e a v erag e p ric e of hogs a t
C hicago show ed an a d d itio n a l d eclin e of $1.16 to $5.37 a
h u n d re d w e ig h t, b u t th e c u rre n t p ric e re m a in s co n sid e r­
ab ly above th e level p re v a ilin g p rio r to th e s u b s ta n tia l
su m m e r ad v an ce. I t is re p o rte d th a t m a rk e tin g s of hogs
h av e been h e a v ie r th a n u su a l th is fa ll, ow ing p rin c ip a lly
to th e re la tiv e ly lim ite d s u p p ly o f feed g ra in s. T h e p ric e
o f ste e rs also show ed a f u r th e r sizable recession d u rin g
O ctober. C ash w h eat d e clin ed 5 ce n ts f u r th e r to $ 1.08%
a bushel, a n d co rn 2 % cen ts to 7 8 % ce n ts a bushel.
L osses also a p p e a re d in th e p rice s of ru b b e r, su g a r,
a n d hides.
I n c o n tra st to th ese m ov em ents, som e ad v an c e o c c u rre d
in th e p ric e s of m e tals d u rin g O ctober. F o llo w in g th e
a n n o u n c e m e n t of th e e sta b lish m e n t of a ta x on silv er
e x p o rts fro m C h in a, th e p ric e of silv e r a t N ew Y o rk
a d v an c ed r a th e r s u b s ta n tia lly d u rin g th e e a rly p a r t of
th e m o n th , a n d by O ctober 16 h a d re a c h e d a p e ak of
Closing Cable Rates at New York
5 5 % cen ts a n ounce, th e h ig h est lev el in a b o u t five y e ars.
S u b se q u e n tly , how ever, th e p ric e reced ed to 53 cen ts
Par of
a n ounce. L e a d show ed a m o d e ra te in crease, a n d sc ra p
Oct. 31, 1933 Sept. 29, 1934 Oct. 30, 1934
Exchange on
Exchange
steel a d v an c ed 25 cen ts to $10.50 a to n in th e la tte r p a r t
$ .2357
$ .2333
$ .2105
Belgium................................. $ .2354
of O ctober, fo llo w in g a d o w n w a rd m o v em en t since th e
.2217
.2227
.4537
.2135
Denmark..............................
8 .2 3 9 7
4 .9 6 1 3
4 .9 8 3 8
4 .7 7 2 5
England................................
en d of F e b ru a ry . T h e p ric e of co p p e r in th e fre e m a rk e t
.06591
.0663
.05918
.06646
France...................................
.4028
.3605
.4056
Germ any..............................
.4033
d e clin ed f u r th e r d u rin g th e first h a lf o f O ctober, b u t
.6767
.6834
.6806
.6105
H olland.................................
rose c o n sid erab ly th e re a fte r, a lth o u g h c o n tin u in g below
.0891
.0865
.0855
.0795
Italy.......................................
.2495
.2508
.4537
.2400
N orw ay.................................
th e official n o m in al p ric e of 9 cen ts a p o u n d .
. 1366
.3267
.1265
.1378
Spain.....................................
.2571
.4537
.2560
.2465
Sweden..................................
A lth o u g h m ost o f th e recession show n in th e B u re a u
.3259
.3267
.2927
.3290
Switzerland..........................
of
L a b o r S ta tis tic s in d e x of w h olesale p ric e s d u rin g
1.0231
1.6931
.9863
1.0275
C anada.................................
O
cto
b er w as d u e to d eclines in th e fa rm p ro d u c ts g ro u p ,
.3825
.3323
.7187
.3308
Argentina.............................
.0819
.0847
.0825
.2026
Brazil......................................
th
e
g
re a te r p a r t of th e s u m m e r’s a d v an c e in th e p ric e s of
.8000
1.7511
.8000
Uruguay...............................
.6800
a
g
ric
u ltu ra l co m m odities has n e v erth ele ss been re ta in e d .
.2908
.2874
.2910
Japan.....................................
.8440
T he in d e x of fa rm p ro d u c ts, w h ich h a d rise n 25 p e r ce n t
.3744
.3758
.3585
Ind ia......................................
.6180
.3661
.3325
.3094
Shanghai..............................
..........
betw een A p ril a n d S ep tem b e r, h as since rece d ed o n ly
a b o u t 5 p e r cent. F o llo w in g m a rk e d s ta b ility fo r a n u m ­
b
e r of m o n th s p a st, th e in d e x of th e p ric e s of com m odi­
Central Bank Rate Changes
ties o th e r th a n fa rm p ro d u c ts a n d foods also d eclin ed
In fo rm a tio n h a s been rece iv ed in d ic a tin g a n ad v an c e m o d e ra te ly in O ctober, chiefly as a re s u lt of decreases in
in th e d isco u n t ra te of th e B a n k of D a n zig fro m 3 to 4 th e p rice s of co tto n goods a n d g asolin e. T h e g e n e ra l
p e r ce n t on S e p te m b e r 21. O n O cto b er 1 th e B a n k of in d e x of w h olesale co m m o d ity p ric e s sto o d a t 76.2 p e r
E sto n ia lo w ered its r a te fro m 5 % to 5 p e r cent.
ce n t o f th e 1926 a v erag e fo r th e w eek en d ed O ctob er 20,
as a g a in s t a n e a rly S e p te m b e r p e a k of 77.8 p e r cent.
Gold Movement

A c tu a l sh ip m e n ts of g old d u rin g O cto b er w ere lim ite d Production
F o llo w in g th e d o w n w a rd m o v em en t o f th e p rev io u s
to im p o rts of $3,400,000 fro m C a n a d a a n d $2,400,000
fro m M exico. T h e effect of th ese tra n s a c tio n s on th e fo u r m o n th s th e av erag e level of basic in d u s tria l o u tp u t
m o n e ta ry g o ld stock of th e U n ite d S ta te s w as s u p p le ­ a p p a re n tly show ed som e s lig h t ex p a n sio n d u r in g O cto­




FEDERAL RESERVE AGENT AT NEW YORK

85

ber. T he a c tiv ity of te x tile m ills in c re a se d c o n sid erab ly in d u s trie s o f stocks a c c u m u la te d in th e second q u a rte r
fo llo w in g th e te rm in a tio n of th e s trik e in th e la tte r p a r t in a n tic ip a tio n of p ric e in creases, a n d p a rtly to som e
of S ep tem b e r, a n d o p e ra tio n s in th e co tto n te x tile in ­ re d u c tio n in th e a c tiv ity of co n su m in g in d u strie s . A c­
d u s try a re estim a te d to have reac h ed th e h ig h est ra te co m p an y in g th e p ro n o u n c e d fa llin g off in o p e ra tio n s a t
since la s t s p rin g . A t silk m ills p ro d u c tio n ad v a n c e d b o th steel a n d te x tile m ills d u rin g th e p a s t few m on th s,
s h a rp ly in th e first h a lf of O cto b er b u t d eclin ed a g a in in v e n to rie s a re re p o rte d to have been re d u c e d co n sid er­
to w a rd s th e e n d of th e m o n th , ow ing to ren e w ed lab o r ab ly , so th a t a n y s u b s ta n tia l in c re ase in d e m a n d fo r th e
difficulties. O p e ra tio n s in th e steel in d u s try w ere q u ite p ro d u c ts of th ese in d u s trie s sh o u ld be reflected r a th e r
stab le, ac co rd in g to th e e stim ates of th e Iro n A ge, r a n g ­ p ro m p tly in h ig h e r o p e ra tin g schedules. In th e au to m o ­
in g b etw een 2 3 a n d 26 p e r c e n t of c a p a c ity , w h ich bile in d u s try also, p ro d u c tio n w as re d u c e d m o re ra p id ly
is s lig h tly above th e S ep tem b e r av erag e of 22.7 p e r cent. th a n sales to co n su m ers reced ed , as is u s u a l d u rin g th e
I n e le ctric p o w er o u tp u t th e u su a l seaso n al ex p an sio n su m m e r a n d fa ll m o n th s.
o c cu rred . O n th e o th e r h a n d , au to m o b ile p ro d u c tio n
I n m a rk e d c o n tra s t to th e co urse of a c tiv ity in th e
d ro p p e d r a th e r s h a rp ly as w o rk on c u rre n t m odels d rew o th e r in d u s trie s show n in th e d ia g ra m , o p e ra tio n s a t
to w a rd s a clo se; o p e ra tio n s a t m e at p a c k in g p la n ts d e­
(Adjusted for seasonal variations and usual year to year growth)
clin ed s u b s ta n tia lly fro m th e e x tra o rd in a rily h ig h level
of th e p rev io u s m o n th ; a n d th e o u tp u t of b itu m in o u s
1934
1933
coal d id n o t show th e u su a l a u tu m n ex p an sio n .
T he F e d e ra l R eserve B o a r d ’s seaso n ally a d ju s te d in ­
July
Sept.
Sept.
Aug.
d ex o f in d u s tria l p ro d u c tio n fo r S e p te m b e r d ro p p e d 2
Metals
p o in ts f u r th e r to a level a b o u t eq u al to th e low p o in t of
39
34
30
51
Steel........................................................................
32
38
32
57
th e a u tu m n of 1933. T he S ep tem b e r declin e w as cau sed
46
45
38
48
p rin c ip a lly by th e s h a rp c o n tra c tio n of te x tile m ill o u t­
52
48
48
66
p u t d u e to th e strik e . T h e re w as also a g re a te r th a n Automobiles
Passenger cars....................................................
54
41
33p
41
season al re d u c tio n in au to m o b ile p ro d u c tio n , a n d th e
Motor trucks......................................................
74
82
78 p
61
o u tp u t o f shoes d ecreased co n sid erab ly . O n th e o th e r Fuels
h a n d , steel m ill a c tiv ity reco v ered s lig h tly in th e la tte r
Bituminous coal.................................................
67 p
70
66
68
Anthracite coal...................................................
72 p
66
58
85
p a r t o f th e m o n th , a n d fo r S ep tem b e r as a w hole a v e r­
Petroleum, crude...............................................
71
67 p
68
75
ag ed a b o u t th e sam e as in th e p re v io u s m o n th . C oal p ro ­
Petroleum products........................................
67
67
72
Electric power....................................................
62 p
67
6 5p
69
d u c tio n in c re ased m ore th a n seasonally, a n d o p e ra tio n s
and Leather Products
a t m eat p a c k in g p la n ts w ere e x p a n d e d in S ep tem b e r fo r Textiles
Cotton consumption........................................
72
91
68
56
Wool mill activity............................................
th e th ir d successive m o n th .
73 p
105
78
4 5p
Silk consumption............................................
53
53
46
45
S ep tem b e r w as th e fo u r th co n secu tiv e m o n th in w h ich
Rayon deliveries................................................
87
76 p
99
102
89
80p
88
th e re w as a recession in in d u s tria l a c tiv ity , a la rg e p a r t
and Tobacco Products
o f w h ich w as d u e to declines in th e o u tp u t of tex tiles, Foods
M eat packing.....................................................
126
132
146
133
steel, a n d au tom obiles. A s th e a c co m p an y in g d ia g ra m
Wheat flour.........................................
79
77
81
70
Refined
sugar
deliveries...............................
62
77
80
show s, th e s h a rp te m p o ra ry declin e in th e te x tile in d u s ­
Tobacco products...........................................
83
82
80
78
tr y d u rin g S ep tem b e r follow ed sev era l m o n th s of re ­ Miscellaneous
s tric te d o p e ra tio n s, w h ich reflected g e n e ra l c u rta ilm e n t
33
43
43
39
54p
72
51
52
a t co tto n m ills as w ell as a c o m p a ra tiv e ly low level of
32
41
36
39
Newsprint paper...........................................
74
73
75
a c tiv ity in th e w ool a n d silk in d u strie s . I n th e steel
70
Machine tools.................................................
33
34
34
29
in d u s try th e s u b s ta n tia l declin e in o u tp u t d u rin g re c e n t
m o n th s w as d u e p a rtly to th e use b y steel co n su m in g
p Preliminary
PER CENT

PER CENT

Indexes of Production in Important Lines (Adjusted for seasonal variation; trend of past years=100 per cent)




MONTHLY REVIEW, NOVEMBER 1, 1934

86

m e a t p a c k in g p la n ts in c re a se d s h a rp ly th ro u g h S ep tem ­ on th e o th e r. T h e in c re ase in d e p a rtm e n t sto re tr a d e
b e r. T h is in crease w as th e re s u lt of h eav y sh ip m e n ts of fro m th e low p o in t of M arch 1933, as m e a su re d b y th ese
liv esto ck fro m d ro u g h t area s, th e a c cele ra ted m a rk e tin g indexes, h as a m o u n te d to 78 p e r ce n t fo r th e A tla n ta
of hogs in view of h ig h feed p rice s, a n d th e p ro cessin g d is tric t a n d 69 p e r ce n t fo r D a llas, as co m p a re d w ith
o f c a ttle p u rc h a s e d in co n n ectio n w ith th e G o v ern m e n t 32 p e r c e n t fo r P h ila d e lp h ia a n d 18 p e r c e n t fo r N ew
Y o rk . T he r a p id reco v ery in th e tw o S o u th e rn d is tric ts
re lie f p ro g ra m .
p ro b a b ly is chiefly a re s u lt of th e m a rk e d in c re ase in
fa
rm incom e in those d is tric ts . A c c o rd in g to estim ates
Indexes of Business Activity
of th e D e p a rtm e n t of A g ric u ltu re , f a r m e r s ’ cash incom e
D u rin g th e first h a lf of O ctober, d e p a rtm e n t sto re fro m m a rk e tin g s of c o tto n a n d co tto n seed d u rin g th e
sales fo r th e c o u n try as a w hole a p p e a r to h av e show n first n in e m o n th s of th e c u rre n t y e a r w as 27 p e r ce n t
ab o u t th e u s u a l a u tu m n in crease, ac c o rd in g to p re lim i­ h ig h e r th a n in th e c o rre sp o n d in g p e rio d of la st y e a r a n d
n a ry in d ic a tio n s, a n d c a r lo a d in g s of m e rc h a n d ise a n d 44 p e r c e n t above th e first th re e q u a rte rs of 1932, a n d
m iscellaneo us fre ig h t also show ed ab o u t th e u s u a l sea­ w h en re n ta l a n d benefit p a y m e n ts by th e A g ric u ltu ra l
so n al ch an g e over S ep tem b e r. A co n sid erab le d ecline A d ju s tm e n t A d m in is tra tio n a re ta k e n in to acco u n t, th e
o ccu rred , how ever, in th e m ov em ent of b u lk fre ig h t over in creases a re 36 p e r c e n t ov er 1933 a n d 80 p e r cen t
th e ra ilro a d s, ow ing to re d u c e d sh ip m e n ts of g ra in , liv e­ o ver 1932.
stock, a n d ore.
D u rin g S ep tem b e r, d iv e rse ten d en c ies w ere a p p a re n t
(AdjustecTfor seasonal variations, for usual year to year growth,
and where necessary for price changes)
in th is b a n k ’s seaso n ally a d ju s te d in d e x es of g e n e ra l
b u sin ess a c tiv ity a n d th e d is trib u tio n of goods. T w o of
1933
1934
th e m o st im p o rta n t in d ic a to rs of b u sin ess volum e,
n a m ely ra ilro a d fre ig h t traffic a n d check p a y m e n ts o u t­
Sept.
July
Aug.
Sept.
side N ew Y o rk C ity , w ere m a in ta in e d a fte r seasonal a d ­
Primary Distribution
ju s tm e n t a t a p p ro x im a te ly th e sam e level as in A u g u st.
Car loadings, merchandise and misc.........
55
57
56
55
Car loadings, other..........................................
60
60
58
58
A la rg e r th a n seasonal in c re ase in r e ta il tra d e in a g ric u l­
49r
52 r
51r
54r
tu r a l section s w as reflected in a s h a rp ad v an c e in th e
Imports r ............................................................
65r
62r
51r
57 r
Wholesale trade.................................................
82
91
94
86
in d e x of m a il o rd e r house sales a n d in a re p o rte d g a in
to Consumer
of 44 p e r c e n t fro m A u g u s t to S ep tem b e r in sales of Distribution
Department store sales, U. S .......................
74
73
71
78
sto res se rv in g r u r a l area s. I n a d d itio n , c h a in sto re sales
Department store sales, 2nd D ist..............
76
72
67
74
Chain grocery sales..........................................
72
66
66
65
rose c o n sid erab ly ev en a f te r seasonal a d ju stm e n t. I n
Other chain store sales r................................
85r
86r
78 r
79r
Mail order house sales....................................
62
69
67
75
d e p a rtm e n t sto res in cities th ro u g h o u t th e c o u n try , how ­
Advertising..........................................................
54
56
58
60
New passenger car registrations.................
ev er, th e la rg e sales in c re ase re c o rd e d in A u g u s t w as
55
60
5 5p
53 p
Gasoline consumption.....................................
72
72
69
follow ed b y a so m ew h at sm aller th a n seasonal e x p an sio n
Business Activity
in S ep tem b e r, a n d r e ta il sales of new p a sse n g e r a u to m o ­ General
Bank debits, outside New York C it y .. . .
59
62
61
60 p
Bank debits, New York C ity.......................
41
biles a n d sales of life in su ra n c e w ere re d u c e d s lig h tly
47
48
43
Velocity of demand deposits, outside New
m ore th a n u su a lly .
York C it y ........................................................
72
66
78
68
Velocity of demanddeposits.NewYorkCity
56
52
45
48
T h e c o n tra s t b etw een r e ta il tra d e reco v ery in som e of
Shares sold, N . Y . Stock Exchange r. . . .
lOOr
46r
43r
New life insurance sales.................................
64
63
62
60
th e a g ric u ltu ra l d is tric ts a n d in in d u s tria l section s is
Factory employment, United States.........
75 p
79
80
81
Business failures................................................
42
58
45
44
in d ic a te d in th e a c co m p an y in g d ia g ra m , w h ich show s
Building contracts............................................
24
21
21
21
seaso n ally a d ju s te d in d e x es of d e p a rtm e n t sto re sales in
New corporations formed, N . Y . State..
59
70
66
63
Real
estate
transfers........................................
43
50
48
th e N ew Y o rk a n d P h ila d e lp h ia d is tric ts on one h a n d ,
General price level*..........................................
133
139p
138
138
a n d in th e A tla n ta a n d D a lla s F e d e ra l R eserv e d is tric ts
Composite index of w ages*..........................
177
182
182
180p
Cost of living*....................................................
139
135
137
138
PERCENT
PERCENT
p Preliminary

r Revised

* 1913 average = 1 0 0

Building

Seasonally Adjusted Indexes of Department Store Sales in Indus­
trial and Agricultural Districts (Federal Reserve data;
1923-25 average= 1 0 0 per cent)




I n to ta l d o lla r v alu e, th e a m o u n t o f b u ild in g a n d
e n g in e e rin g c o n tra c ts a w a rd e d in S ep tem b e r w as a b o u t
8 p e r c e n t sm aller th a n th e A u g u s t to ta l, b u t a f te r
allo w ance fo r difference in n u m b e r of b u sin ess d a y s a n d
fo r u s u a l seaso n al m ov em ents, little ch an g e a p p e a rs to
h av e o c c u rre d in th e ra te o f a c tiv ity a n d th is b a n k ’s
in d e x of b u ild in g c o n tra c ts re m a in e d fo r th e th ir d con­
secu tiv e m o n th a t 21 p e r ce n t of th e lo n g tim e tre n d .
P u b lic ly fin an ced b u ild in g c o n tra c ts w ere a w a rd e d on a
so m ew h at la rg e r scale th a n in th e p rev io u s m o n th , w h ile
p riv a te ly fin an ced c o n tra c ts d eclin ed . B o th ty p e s of
b u ild in g w ere in sm aller a m o u n t th a n in S ep tem b e r 1933,
b u t in th e case of p u b lic ly fin an ced b u ild in g th is is d u e
in p a r t to th e fa c t th a t th e c o m p ariso n is w ith th e

FEDERAL RESERVE AGENT AT NEW YORK
PERCENT

87

Foreign Trade

T h e to ta l fo re ig n m e rc h a n d ise tra d e o f th e U n ite d
S ta te s d u rin g S e p te m b e r show ed a s u b s ta n tia l in crease
o ver th e p re c e d in g m o n th . E x p o rts a m o u n tin g to
$192,000,000 w ere 20 p e r c e n t above a y e a r ago a n d
co n tin u e d to be la rg e r th a n in th e c o rre sp o n d in g m o n th
o f a n y y e a r since 1930. G e n e ra l im p o rts v a lu e d a t
$132,000,000, how ever, w ere 10 p e r ce n t below th e v alu e
o f a y e a r ago.
A n u m b e r of th e m a jo r e x p o rt co m m odities co n tin u e d
d u rin g S ep tem b e r to be sh ip p e d a b ro a d in co n sid erab ly
la rg e r volum e th a n in 1933, a n d th e v a lu e of these s h ip ­
m e n ts also w as h ig h e r. E x p o rts of w h eat w ere m ore
th a n dou ble th e sm all q u a n tity of a y e a r ago, a n d co p p e r
e x p o rts a g a in w ere a b o u t tw ice as la rg e as a y e a r ago
in q u a n tity a n d v alu e. A g a in o f 60 p e r ce n t over a y e a r
ago o c c u rre d in th e n u m b e r of p a sse n g e r c a rs a n d tru c k s
Estimated Volume of Building Construction in the United States
s h ip p e d ab ro a d , a n d th e re w as a sim ila r in c re ase in
and England (Adjusted for seasonal variation; 1924 averages
100 per cent)
v alu e. E x p o rts of u n m a n u fa c tu re d tobacco a n d of c ru d e
a n d refin ed p e tro le u m also w ere s u b s ta n tia lly h ig h e r
p e rio d of ra p id e x p an sio n in c o n tra c ts p la c e d u n d e r th e th a n in 1933. R aw c o tto n e x p o rts, how ever, a lth o u g h
P u b lic W o rk s A d m in is tra tio n .
sh o w in g a seasonal in c re ase over th e p re c e d in g m o n th ,
T he c u m u lativ e to ta l of c o n tra c ts a w a rd e d d u rin g th e w ere still o nly a b o u t o n e -h alf of th e volu m e a n d 70 p e r
first n in e m o n th s of th e y e a r w as 62 p e r ce n t la rg e r th a n ce n t of th e v alu e of a y e a r ago.
R e p o rte d im p o rts of s u g a r fo r dom estic co n su m p tio n
th e to ta l fo r th e c o rre sp o n d in g p e rio d of la s t y e a r a n d
n e a rly eq u al to th e to ta l fo r th e e n tire y e a r 1933. P u b lic in c re ased d u rin g S e p te m b e r fro m th e sm all a m o u n ts in
w o rk s c o n tra c ts w ere m o re th a n twTice as la rg e as in th e re c e n t m o n th s to n e a rly fo u r tim es th e a m o u n t of a y e a r
first n in e m o n th s of 1933, p u b lic u tility c o n tra c ts show ed ago. T h is u n u su a l in c re ase re s u lte d fro m th e release of
a n in c re ase of 66 p e r cen t, a n d o th e r n o n -re sid e n tia l la rg e q u a n titie s of s u g a r, p re v io u sly im p o rte d b u t h e ld
c o n tra c ts, a rise o f 46 p e r cen t, m o st of th ese in creases in b o n d ed w areh o u ses, a f te r th e re d u c tio n in th is co u n ­
re p re s e n tin g p u b lic ly fin an ced p ro je c ts. R e sid e n tia l co n­ t r y ’s ta riff ra te on s u g a r im p o rts fro m C u b a becam e
tra c ts a w a rd e d d u rin g th e first n in e m o n th s of th e y e a r effective e a rly in S ep tem b e r. R e ce ip ts of coffee show ed
a n in c re ase over a y e a r ago of 10 p e r ce n t in q u a n tity
w ere o n ly 4 p e r c e n t a h e a d of la s t y e a r.
D u rin g th e first h a lf of O ctober, all ty p e s of c o n tra c ts a n d ab o u t 30 p e r c e n t in v a lu e. R aw silk im p o rts w ere
w ere a w a rd e d a t a h ig h e r d a ily av erag e ra te th a n in ab o u t th e sam e in volu m e as in S ep tem b e r 1933, b u t
S ep tem b e r. R e sid e n tia l c o n tra c ts in c re ased c o n sid erab ly re m a in e d c o n sid erab ly sm a lle r in v alu e, d u e to low er
m ore th a n seaso n ally , a n d n o n -re sid e n tia l w o rk in c re a se d p rices. O n th e o th e r h a n d , im p o rts of c ru d e ru b b e r
c o n tra ry to th e u s u a l seaso n al te n d e n c y , esp ecially p u b lic w ere s u b s ta n tia lly below th e re la tiv e ly la rg e q u a n tity of
a y e a r ago, b u t w ere 35 p e r ce n t la rg e r in v alu e, ow ing
w o rk s a n d u tilitie s.
to
h ig h e r p rices. B o th th e q u a n tity a n d th e v a lu e of
T he ac c o m p a n y in g d ia g ra m show s th e co urse of b u ild ­
in g a c tiv ity in th e U n ite d S ta te s a n d E n g la n d since im p o rts of ra w w ool, tin , co p p er, a n d n ick el show ed co n­
1928. I n th is c o u n try , th e v olu m e of b u ild in g d e clin ed sid e ra b le decreases fro m la s t y e a r.
r a p id ly fro m 1928 th ro u g h th e first p a r t o f 1933, fo l­ Employment
lo w in g w h ich th e re w as a n in c re ase in th e la tte r p a r t of
F a c to ry em p lo y m e n t in th e U n ite d S ta te s show ed a
1933 d u e to e x p an sio n in p u b lic w o rk s a n d o th e r p ro je c ts
fin an ced by p u b lic fu n d s. A fte r som e recession th e vol­ s h a rp decline fro m th e m id d le of A u g u s t to th e m id d le
um e of b u ild in g in re c e n t m o n th s h as show n no f u r th e r of S ep tem b e r c o n tra ry to th e u s u a l seasonal ten d en c y ,
te n d e n c y to in crease, a n d a lth o u g h th e c u rre n t volu m e ow ing chiefly to th e te x tile strik e . W o rk in g forces in all
is m o d e ra te ly above th e low p o in t of 1933 it re m a in s m a n u fa c tu rin g in d u s trie s w ere re d u c e d b y ab o u t 300,000
so m ew h at lo w er th a n a t th e e n d o f 1931. I n E n g la n d , p e rso n s a n d th e d eclin e in em p lo y m e n t in th e te x tile in ­
th e low p o in t of th e seven y e a r p e rio d w as reac h ed a t th e d u s try alone w as e stim a te d a t 246,000 b y th e S e c re ta ry
en d of 1931 a n d since th a t tim e b u ild in g a c tiv ity h as o f L ab o r. E m p lo y m e n t also d e creased in th e iro n a n d
in c re ased g re a tly , d u e la rg e ly to e x p e n d itu re s fo r re si­ steel, au to m o b ile, a n d shoe in d u strie s . T he seaso n ally
d e n tia l w o rk in c lu d in g slu m rem ov al. T h e re c e n t volu m e a d ju s te d in d e x of fa c to ry em p lo y m e n t co m p u te d b y th e
is m ore th a n tw ice th a t p re v a ilin g a t th e en d of 1931 F e d e ra l R eserv e B o a rd d eclin ed n e a rly 7 p e r ce n t in
a n d is co n sid erab ly above th a t of 1928, w hich, how ever, S ep tem b e r a n d w as 5 p e r c e n t lo w er th a n a y e a r ago.
w as n o t a y e a r of as g re a t b u ild in g a c tiv ity in E n g la n d A m o n g th e n o n -m a n u fa c tu rin g in d u strie s , seasonal in ­
as in th e U n ite d S ta te s. T h e d a ta fo r b o th c o u n trie s creases in em p lo y m e n t w ere rec o rd e d in re ta il tra d e a n d
show n in th e d ia g ra m a re on a 1924 base, a n d in th a t coal m in in g , a n d sm all g a in s o c c u rre d also in p riv a te
y e a r th e g re a t p o st-w a r p e rio d o f c o n stru c tio n a c tiv ity b u ild in g c o n stru c tio n a n d p u b lic u tilitie s. T h e n e t d e­
in th is c o u n try w as w ell u n d e r w ay. N ev erth eless, th e crease in w o rk in g fo rces o f b o th m a n u fa c tu rin g a n d
re c e n t v o lu m e in th e U n ite d S ta te s is f a r below th e n o n -m a n u fa c tu rin g in d u s trie s re p o rtin g to th e B u re a u
of L a b o r S ta tis tic s w as e stim a te d a t a b o u t 130,000.
tr e n d of b u ild in g ov er a lo n g p e rio d of y e ars.




MONTHLY REVIEW, NOVEMBER 1, 1934

88

In c re a se d em p lo y m e n t on p ro je c ts fin an c ed b y F e d e ra l
em erg en cy o u tla y s offset in p a r t th e losses re p o rte d in
p riv a te in d u s try . I n S ep tem b e r th e re w ere 160,000 m ore
p e rso n s th a n in A u g u s t on w o rk re lie f jo b s p ro v id e d by
th e F e d e ra l E m e rg e n c y R e lie f A d m in is tra tio n . O n th e
o th e r h a n d , th e e n ro llm e n t a t C iv ilian C o n serv atio n
C am p s w as re d u c e d by a b o u t 50,000, a n d th e re w ere
a b o u t 35,000 few er w o rk ers on th e p a y ro lls of th e P u b lic
W o rk s A d m in is tra tio n . T he n e t in crease in em p lo y m e n t
on th ese em erg en cy p ro je c ts of th e F e d e ra l G o v ern m e n t,
th e re fo re , a m o u n te d to ab o u t 75,000.
Wholesale Trade

S e p te m b e r sales of th e re p o rtin g w h olesale firm s in
th is d is tric t a v e ra g e d 5 p e r cen t h ig h e r th a n a y e a r ago,
a slig h tly sm a lle r in c re ase th a n in th e p re v io u s m o n th .
In c re a se s in sales over la s t y e a r w ere re p o rte d b y th e
g ro ce ry , m e n ’s clo th in g , d ru g , a n d h a rd w a re firm s. I n
th e case of th e g ro ce ry co ncerns, how ever, sales of goods
o th e r th a n liq u o r w h ich d id n o t e n te r in to la s t y e a r ’s
b u sin ess w ere 3 p e r ce n t sm aller th a n a y e a r ago. D e­
clin es in sales w ere re c o rd e d by th e s ta tio n e ry a n d je w ­
e lry firm s, b u t th e y w ere n o t as la rg e as those show n in
A u g u st. S ales o f co tto n goods a n d silk goods w ere
m o d e ra te ly sm a lle r th a n la s t y e a r, fo llo w in g in creases
in th e p re v io u s m o n th , a n d sales of p a p e r a n d d ia m o n d
co n cern s show ed th e la rg e s t re d u c tio n s since th e s p rin g
of 1933.
S tocks o f m e rc h a n d ise on h a n d w ere w ell above a
y e a r ago in d o lla r v a lu e fo r all re p o rtin g lin es ex cep t
je w e lry . C ollections c o n tin u e d h ig h e r th is y e a r th a n la st
in m ost of th e re p o rtin g lines.
Per cent of
accounts
outstanding
August 31
collected in
September

Percentage
change
September 1934
compared with
September 1933
Commodity
N et
sales
Groceries....................................................................
M en’s clothing........................................................
Cotton goods............................................. .............
Silk goods.................................................................
Shoes ........................................................................
Drugs..........................................................................
Hardware..................................................................
Stationery ...............................................................
Paper
...............................................................
D iam onds..................................................................
Jewelry.......................................................................
Weighted average........................................

+
+
—
—
—
+
+
—
—
—
—
+

12 9
1 5.4
8 .5
9 .4 *
1 6 .0
1 0 .0
4 .9
4 .6
8 0
2 8 .8
6 .6
5 .0

Stock
end of
month
+

6 .6

+ 1 2 .7 *
+ i 6 .3
+ 5 .4
+ 1 0 .4
— 2 .1

j

1933

1934

8 8 .4
4 0 .3
3 1 .4
4 8 .0

9 3 .7
3 9 .6
3 8 .1
5 7 .9

2 3 .7
4 1 .3
44 1
4 0 .2

3 7 .3
4 4 .3
40 6
4 6 .4

25 .3

} 2 1 .8

5 3 .4

5 7 .5

fro m la s t y e a r, b u t a f te r m a k in g allo w ance fo r one less
sh o p p in g d a y th is y e a r th e re w as a sm all in c re a se in
th e av erag e d a ily volum e o f sales. A s u b s ta n tia l in ­
crease in th e first h a lf of th e m o n th w as fo llo w ed b y
r a th e r p o o r b u sin ess in th e la tte r h a lf, a p p a re n tly d u e
la rg e ly to b a d w e ath e r. F o r th e m o n th as a w hole th e
in c re ase o ver A u g u s t w as so m ew h at less th a n u su al.
W ith th e ex clu sio n of liq u o r, th is y e a r ’s sales w ere
4 p e r c e n t below S ep tem b e r 1933.
O n a n a v erag e d a ily basis, sales o f th e N ew Y o rk ,
B uffalo, N o rth e rn N ew J e rs e y , S o u th e rn N ew Y o rk
S ta te , H u d so n R iv e r V alley , a n d C a p ita l D is tric t d e­
p a rtm e n t sto res co m p ared m ore fa v o ra b ly w ith la s t y e a r
th a n in A u g u st, w h ile th e sales of r e p o rtin g sto res in
o th e r lo calities co m p ared less fa v o ra b ly in S ep tem b e r
th a n in th e p rev io u s m o n th . S ales of th e le a d in g a p p a re l
sto res in th is d is tric t on a d a ily b asis w ere n e a rly 8 p e r
cen t la rg e r th a n a y e a r ago, a la rg e r in c re a se th a n in
A u g u st.
S tocks of m e rc h a n d ise on h a n d , a t r e ta il v a lu a tio n ,
w ere g e n e ra lly sm aller th a n a y e a r ago, b u t it sh o u ld
be n o te d th a t in S ep tem b e r of la s t y e a r re ta il stocks
reflected th e effects of h e av y b u y in g of m e rc h a n d ise in
th e im m e d iate ly p re c e d in g m o n th s in a n tic ip a tio n of
p ric e ad v an ces. C ollections in S e p te m b e r co n tin u e d
h ig h e r th a n a y e a r ago in d e p a rtm e n t sto res, b u t w ere
u n c h a n g e d in a p p a re l stores.
Percentage
change
September 1934
compared with
September 1933
Locality

N et
sales
New Y o rk .................................................................
Buffalo........................................................................
Rochester..................................................................
Syracuse....................................................................
Northern New Jersey..........................................
Bridgeport................................................................
Elsewhere..................................................................
Northern New York State............................
Southern New York S tate............................
Hudson River Valley D istrict.....................
Capital D istrict.................................................
Westchester and Stamford............................




1 .4
2 .1
4 .7
1 3 .5
4 .2
3 .3
2 .6
1 0 .3
1 -2
2 .5
3 .2
8 .4

—
—
—
—
—
—
—

1933

1934

9 .7
1 0 .8
9 .4
1 0 .0
1 0 .5
2 0 .2
9 .6

4 2 .1
3 9 .6
3 8 .6
2 6 .6
3 4 .0
3 2 .0
2 6 .5

4 3 .4
4 2 .0
4 0 .3
3 1 .4
3 6 .4
3 4 .1
2 5 .6

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

— 2 .1

— 1 0 .0

3 7 .8

3 9 .6

+

+ 1 6 .9

3 7 .7

3 7 .7

Musical instruments and radio.................

D u rin g th e first h a lf of O ctober, sales of th e r e p o rtin g
d e p a rtm e n t sto res in th e M e tro p o lita n a re a of N ew Y o rk
w ere a p p ro x im a te ly 5^2 p e r c e n t ah e a d of th e c o rre ­
sp o n d in g p e rio d a y e a r ago, a n d it a p p e a rs th a t slig h tly
m o re th a n th e u s u a l seaso n al ex p an sio n o c c u rre d in
co m p ariso n w ith S ep tem b e r sales. E x c lu d in g th e sales
of w in es a n d liq u o rs fro m th is y e a r ’s figures, th e y e a r
to y e a r in crease am o u n te d to a little over 3 p e r cent.
F o r th e m o n th of S ep tem b e r, sales o f th e re p o rtin g
d e p a rtm e n t sto res in th is d is tric t d e clin ed 2 p e r ce n t

—
+
—
—
—
—
—
—
+
—
—
—

Stock
on hand
end of
month

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

* Quantity figures reported by the National Federation of Textiles, Incorporated,
not included in weighted average for total wholesale trade.

Department Store Trade

Per cent of
accounts
outstanding
August 31
collected in
September

M en’s furnishings............................................
W om en’s and Misses’ ready-to-w ear... .
Luggage and other leather goods.............
W om en’s ready-to-wear accessories.........
Woolen goods...................................................
M en’s and Boys’ wear..................................
Linens and handkerchiefs............................
Books and stationery....................................
Silks and velvets.............................................
H osiery...............................................................
Toilet articles and drugs..............................
Toys and sporting goods..............................
Silverware and jew elry.................................
Cotton goods....................................................
Home furnishings............................................
Furniture............................................................
Miscellaneous....................................................

3 .8

N et sales
percentage change
September 1934
compared with
September 1933

Stock on hand
percentage change
September 29, 1934
compared with
September 30, 1933

+ 1 4 .6
+ 4 .6
+ 01
— 1 .3
— 13
— 1 .8
— 3 .6
— 5 0
— 6 6
— 6 .7
— 8 .2
— 9 .3
— 1 0 .3
— 1 1 .0
— 1 2 .3
— 1 2 .8
— 1 3.1
— 1 4 .5
+ 1 3 .4

— 7 9
+ 4 .7
— 1 2 .4
— 1 4 .6
— 13 .1
— 1 5 .6
— 0 .3
— 3 .4
— 1 2 .5
— 2 .6
— 1 1 .3
— 2 7 .6
+ 1 .1
— 1 4 .0
— 1 1 .3
— 1 6 .2
— 6 .8
— 3 .7
— 5 .6

FEDERAL RESERVE BANK OF NEW YORK
M O NTH LY REVIEW , NOVEMBER 1, 1934

B u sin ess C o n d itio n s in th e U n ite d S ta te s
(Summarized by the Federal Reserve Board)

OLUME of industrial production remained unchanged in September when
there is usually a seasonal increase and factory employment and payrolls
declined. An important factor in the decrease was the strike in the textile
industry. Retail trade in rural districts showed a large increase, and sales at
department stores in cities also increased, though somewhat less than season­
ally. Deposits at banks and commercial loans continued to increase.

V

P r o d u c t io n

Index Number of Production of Manufactures
and Minerals Combined, Adjusted for Sea­
sonal Variation (1923-25 average =r.
100 per cent)

Index Numbers of Factory Employment and
Payrolls, Without Adjustment for Seasonal
Variation (1923-25 average= 1 0 0
per cent)

and

E

m ploym ent

Volume of industrial production, as measured by the Board ’s seasonally
adjusted index, declined from 73 per cent of the 1923-1925 average in August
to 71 per cent in September. There were substantial declines in activity at
cotton and woolen mills, reflecting the influence of the textile strike, and in
the output of shoes, automobiles, and lumber. After the termination of the
strike textile production increased. Steel mill operations, which had declined
sharply during the summer, have been at a higher level in recent weeks than
in the early part of September. Production of beef and lamb increased
further in September, reflecting in part the disposal of animals bought in
the drought areas by the Federal Government. Wheat flour production and
sugar meltings also were larger in September. Output of anthracite and
bituminous coal showed a larger than seasonal increase.
Factory employment and payrolls declined considerably in September,
largely as a result of the textile strike. The number of workers employed was
substantially reduced in the automobile, iron and steel, and shoe industries, as
well as in the basic textile industries. There was a larger than seasonal
increase in employment in clothing industries, while in the nonferrous metals,
building materials, food products, and paper and printing industries employ­
ment was sustained. Among non-manufacturing lines, employment increased
seasonally from August to September at coal mines and in retail trade. There
was also a substantial increase in number of persons provided with work by the
Emergency Work Program of the Federal Relief Administration, while employ­
ment on public works decreased somewhat.
The value of construction contracts awarded, as reported by the F. W.
Dodge Corporation, continued in about the same volume during September as
in other recent months.
Department of Agriculture crop reports for October 1 indicated a cotton
crop of 9,443,000 bales as compared with a yield of 13,047,000 bales last year.
The corn crop, which averaged 2,510,000,000 bushels from 1927 to 1931, is
estimated at 1,417,000,000 bushels this year. Hay and pasture conditions im­
proved in September and weather in the first half of October was generally
favorable for forage crops. The yield of white potatoes is estimated at 362,000,000 bushels, about equal to the average for 1927-1931.

D istribution

Daily average railroad freight car loadings increased from August to
September by about the usual seasonal amount, but declined slightly in the
first half of October. Sales at department stores increased from August to
September by somewhat less than the estimated seasonal amount, while retail
sales of general merchandise in rural districts, as shown by reports of mail
order houses and chain stores to the Department of Commerce, increased
considerably.
C o m m o d i t y P r ic e s

Group Price Indexes of the Bureau of Labor
Statistics (1926 averages 100 per cent)

^ALL OTHER LOANS
U. S. SECURITIE
w..

J S N r f r "

kNS ON SECURITIE
V

s

^

SECURITIES
.1932

1

.

.

1933

,

----1----1____ L—..,

Wednesday Figures for Reporting Member
Banks (Latest figures are for October 17)




Wholesale prices of farm products and foods, which had advanced sharply
in August and the first week of September, subsequently declined somewhat.
The weekly index of wholesale prices of the Bureau of Labor Statistics, which
had advanced from 74 per cent of the 1926 average at the beginning of Juno
to 78 per cent early in September, stood at 70 per cent in the second week
of October. Recent declines occurred principally in those products which had
increased most rapidly in preceding weeks, such as wheat, cotton, livestock,
and meats. Prices of commodities other than farm products and foods have in
general shown little change since last January, but within recent weeks prices
of textile products and scrap steel declined slightly and gasoline prices showed
a considerable decrease. The open market price of silver advanced sharply in
the lirst lialf of October.
B

ank

C r e d it

Excess reserves of member banks have shown no material change during
the past month and on October 17 amounted to about $1,750,000,000. A reduc­
tion in Treasury cash and deposits with the Federal Reserve Banks somewhat
more than offset a seasonal growth of $57,000,000 in the volume of money in
circulation and a continued growth in required reserves arising from a growth
in deposits. Volume of Reserve Bank credit outstanding showed little change.
At reporting member banks in leading cities there was a further growth
in deposits and in loans and investments. Between September 19 and October
17 total deposits of the banks increased by about $500,000,000. Commercial
loans to customers and member banks’ holdings of United States Government
securities increased further, while security loans declined.
Short term money rates continued at low levels during September and
the first three weeks of October. Yields on Government securities declined in
October, following an increase in August and September.