Full text of Economic Policy Review (Federal Reserve Bank of New York) : October 1, 1936

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MONTHLY REVIEW
of Credit and Business Conditions
Second

F ed era l E eserve

M o n e y

A gen t

M a rk e t

in

F e d e ra l

F ed era l E eserve

R e s e rv e

B a n k , N ew

F r a n c e to th e U n ite d

S ta te s,

w h ic h s ta r t e d e a r ly in A u g u s t , c o n t in u e d a t a n in c r e a s e d
ra te

a fte r

th ir d

th e

w eek

e n g a g em en ts
U n ite d

fir s t

fe w

days

o f th e m o n th
of

S ta te s

$ 5 6 ,0 0 0 ,0 0 0

g o ld

in

rea ch ed

on

of

S ep tem b er,

a c c e le r a te d
P a r is
a

S ep tem b er

fo r

of

E a r ly

in

th e

u n til d a ily

s h ip m e n t

m a x im u m
25.

and

r a p id ly

to

m ore

th e

th e
th a n

fo llo w in g

m o r n in g it w a s a n n o u n c e d th a t th e P a r is m a r k e ts w o u ld
b e c lo s e d

on

th a t d a y

and

th a t th e

F ren ch

G overn m en t

w o u ld s u b m it t o th e F r e n c h P a r lia m e n t o n S e p t e m b e r 2 8
a

p rop osal

about

to

red u ce

o n e -fo u r th

to

th e

g o ld

o n e -th ir d .

v a lu e
A t

of

th e

th e
sam e

fr a n c

by

t im e

Y ork

an­

The

a c c o m p a n y in g

n o u n c e m e n t w a s m a d e in P a r is , L o n d o n , a n d W a s h in g to n

ta tio n s

th a t th e F r e n c h , B r itis h , a n d U n ite d S ta te s G o v e r n m e n ts

b e g in n in g

w o u ld

coop era te

in

th e

in te r n a tio n a l e x c h a n g e .

m a in te n a n c e

of

e q u ilib r iu m

in

T h e t e x t o f th e s ta te m e n t is s u e d

in W a s h in g to n fo llo w s .

1. The Government o f the United States, after consultation
with the British Government and the French Government, joins
with them in affirming a common desire to foster those condi­
tions which safeguard peace and will best contribute to the
restoration of order in international economic relations and to
pursue a policy which will tend to promote prosperity in the
T
world and to improve the standard of living of peoples.
2. The Government o f the United States must, o f course, in
its policy towards international monetary relations take into
full account the requirements of internal prosperity, as corre­
sponding considerations will be taken into account by the Gov­
ernments o f France and Great B ritain; it welcomes this oppor­
tunity to reaffirm its purpose to continue the policy which it has
pursued in the course o f recent years, one constant object of
which is to maintain the greatest possible equilibrium in the
system o f international exchange and to avoid to the utmost
extent the creation of any disturbance of that system by Amer­
ican monetary action. The Government of the United States
shares with the Governments of France and Great Britain the
conviction that the continuation of this two-fold policy will
serve the general purpose which all the Governments should
pursue.
3. The French Government informs the United States Gov­
ernment that, judging that the desired stability o f the principal
currencies cannot be insured on a solid basis except after the
re-establishment o f a lasting equilibrium between the various
economic systems, it has decided with this object to propose to
its Parliament the readjustment o f its currency. The Govern­
ment of the United States, as also the British Government, has
welcomed this decision in the hope that it will establish more
solid foundations for the stability of international economic
relations. The United States Government, as also the British
and French Governments, declares its intention to continue to
use appropriate available resources so as to avoid as far as
possible any disturbance o f the basis o f international exchange
resulting from the proposed readjustment. It will arrange for
such consultation for this purpose as may prove necessary with
the other two Governments and their authorized agencies.




O c to b er

1

, 1936

4. The Government o f the United States is moreover con­
vinced, as are also the Governments of France and Great Britain,
that the success o f the policy set forth above is linked with the
development o f international trade. In particular it attaches
the greatest importance to action being taken without delay to
relax progressively the present system o f quotas and exchange
controls with a view to their abolition.
5. The Government o f the United States, in common with the
Governments o f France and Great Britain, desires and invites
the cooperation o f the other nations to realize the policy laid
down in the present declaration. It trusts that no country will
attempt to obtain an unreasonable competitive exchange advan­
tage and thereby hamper the effort to restore more stable
economic relations which it is the aim of the three Governments
to promote.

S e p te m b e r

T h e g o ld m o v e m e n t fr o m

D is t r ic t

of

fo r

th e

th e

of

of

A s

fr a n c

rose

fr o m

e a r ly

part

th e r e d u c tio n
Jan u ary

d ia g r a m

F ren ch

1933.

F ren ch

cou n try
in

th e

in

in

th is

of

1933
g o ld

1934, an d

in

N ew

ch art

term s

arou n d

th e

sh ow s th e

fr a n c

of

th e

p a r ity

to

arou n d
o f th e

p r e s u m a b ly

th e

cu rren cy

o ld

of

6 .6 0

of

quo­

s in c e

in d ic a te s ,

its

v a lu e

cou rse
Y ork

th e

v a lu e
of

th is

3 .9 2

ce n ts

ce n ts

a fte r

d o lla r a t th e e n d

w ill n o w

be

redu ced

t o b e t w e e n a b o u t 4 .3 5 c e n t s a n d 4 .9 6 c e n t s , o r w e l l a b o v e
its o ld p a r it y .

T h e c ir c u m s ta n c e s s u r r o u n d in g th e r e d u c ­

t io n in th e v a lu e o f th e fr a n c a n d th e m e a s u r e s ta k e n b y
th e F r e n c h G o v e r n m e n t a re r e p o r t e d in s o m e w h a t g r e a t e r
d e t a il o n a la te r p a g e o f th is R e v ie w .
D u r in g
fra n c
by

in

th e

o u tflo w s

th e
th is

p e r io d
cou n try

r e v a lu a tio n
of

g o ld

of

fr o m

in

w h ic h

th e

w as

r a is e d

th e

d o lla r ,

F ra n ce

to

v a lu e
to

th ere
th e

of

th e

arou n d
w ere

U n ite d

F ren ch

6 .6 0

ce n ts

recu rren t
S ta te s

and

74

MONTHLY REVIEW, OCTOBER 1, 1936

a ls o

to

L ondon.

B e tw e e n

25,

th e

tem b er
to

th e

1936

U n ite d

S ta te s

G o ld

lo s s e s

to

m ore

th a n

th e

s o u r c e s , b u t s in c e

about

S ta te s

by

e a r ly

1934

fr o m

F ran ce

th e

recen t

th e

to ta l

and

r e c e ip t s

in

1935

E n g la n d

of

th e

g o ld

g o ld

to

m ovem ent
s in c e

L ondon
The

th e

th e

began,

P u rch a ses

are

rep orts

of

rep orted

v a lu e

S ta te s s in c e
t o ta le d

b e g in n in g

a n n ou n cem en t

g o ld

in

1934

fr o m

oth er

reserve

of

th e

o f m o re th a n

R e p o r te d e n g a g e m e n ts o f g o ld fo r e x p o r t

to th e U n ite d

$ 5 0 0 ,0 0 0 ,0 0 0 .

Sep­

F ran ce

$ 1 ,6 6 5 ,0 0 0 ,0 0 0 ,

B a n k o f F r a n c e h as sh o w n a n e t r e d u c tio n
$ 2 ,0 0 0 ,0 0 0 ,0 0 0 .

and

fr o m

t o t a l e d c lo s e t o $ 1 ,0 0 0 ,0 0 0 ,0 0 0 .

U n ite d

o ffs e t

31,

s h ip m e n ts

a g g reg a ted

a n d s h ip m e n ts to L o n d o n
w ere

Jan u ary

rep orted

of

to

in d ic a tin g

g o ld

th e

th a t

in

th e

is

P a r is
even

fr a n c

g o ld

and

m ore

fo r

th a n

s h ip m e n t

r e d u c tio n

su ch

g o ld

g o ld

R u s s ia ,

h o ld in g s ,

w ith

th e

is n o w
in

in

r e la tio n

o f an

exch an ge
s id e r e d
new

to

oth er

em bargo

on

c u r r e n c ie s ,

g o ld

c r e d it
has

on

th e

been

represen t

a lig n m e n t o f

and

fu n d .

fu r th e r

its

th e

in flo w

th e

le v e l

im p o s itio n

e s ta b lis h m e n t o f

T hese

ch an ges

a re

ste p s

an

con ­

to w a rd

a

c u r r e n c ie s .

The

b a s is

g r e a tly

le a s t,

upon

m u ch

le s s

d e fin ite

v a r io u s c u r r e n c ie s to g o ld
s e r ie s

of

W ar.

cu rren cy

G reat

r e la te d

r e a d ju s t m e n t s

B r ita in ,

t h e ir

r e la tio n s h ip s

th a n w a s th e

and

c u r r e n c ie s

ca se in

fo llo w in g

oth er

to

have

of

W o r ld

of

m em ber
19

te m b e r

a

fin a n c in g

on

c u r r e n c ie s

in

years.

F ran ce

and

S ta te s,

have

w h ic h

term s

g o ld

g o ld

a

of

d u r in g

S w itz e r la n d ,

a n n ou n ced

th e n e w

of

in g
fo r

s ta b ilit y

th e

of

v a lu e s o f t h e ir

p ast

of

tw o

cash

U n ite d

by

th e p r o v is io n a l fix in g

w ith in s u ch r a n g e .
th e

b e lg a ,

been

fix e d

F ed eral

a re to

be

o f a s p e c ifie d

g o ld

v a lu e

I n B e lg iu m , th e s p e c ific g o ld v a lu e o f

p r o v is io n a lly

d e fin ite ly a d o p te d , a n d

in

th is

m an n er,

th e ra n g e

has

s in c e

o f p o s s ib le v a r ia ­

t io n in g o l d v a lu e s , o r i g i n a l l y a d o p t e d i n A p r i l 1 9 3 5 , h a s
been

abandoned.

A

ra th er

v a lu e s

a d o p tio n

of

v a r io u s

s ta b iliz a tio n

c o u n tr ie s , th e

to

a v o id

in

th e

and

upon

in c id e n ta l

th rou gh ou t
m on eta ry

m in e d

g o ld

In

cu rren cy

an

p u b lis h e d

th e

w o r ld
sto ck

of

fu n d s

o f w h ic h
and

th e

d o m e s tic
of

th e

has
of

are

w id e

th e

w o r ld

h ig h e r

s tim u la te d

c r e d it
in

by

th e

in te n d e d

c u r r e n c ie s ,

te rm s

p r ic e s

g row th

of

in

of

c u r r e n c ie s

of

p a id

th e

d u r in g

d o lla r s ,

of

in c r e a s e

p r o d u c tio n ,

e x p a n s io n
term s

great

fo r

so

th e

cu rren cy
fo r

n e w ly

th a t

g o ld
th e

in

th ere

base
p ast

g o ld

and bank

reserv es,

th e r e fo r e ,

in s ta n c e ,

a

in c r e a s e d

new

over

ju s t

d e s p ite

excess

15

c h ie fly

ta x

d a te .

of

dem an ds.

drop p ed
to

to

T reasu ry

Out

s e c u r itie s

on

S ep­

w ith d r a w a ls

reserv es

due

th e

seasonal

in

reserves

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

p r e c e d in g

m eet

T reasu ry

d e p o s its

excess

fu r th e r

to

S ep tem b er

of

a b r o a d , t o g e t h e r w ith

little

banks

in a n c i n g

of

s o ld

about

on

th a t

s e c u r i t i e s o f f e r e d in e x c h a n g e f o r m a t u r ­
a p p r o x im a te ly

in s te a d

of

$ 3 6 0 ,0 0 0 ,0 0 0

d e p o s its

The

p a y a b le

p a y m en ts

w ith

in c o m e

fo r

to

th e

ta x

w ere
th e

new

p a id

G overn ­
T reasu ry

c o lle c tio n s ,

g r e a tly

d is b u r s e m e n ts ,
R eserve
9

B anks

to

and
rose

T rea su ry
fro m

$ 4 1 8 ,0 0 0 ,0 0 0

on

b a la n c e s

about

in

$ 5 5 ,0 0 0 ,0 0 0

S ep tem b er

16.

th e
on

L a te r

in th e m o n th , h o w e v e r , G o v e r n m e n t d is b u r s e m e n ts a g a in
exceeded
m ent

cu rren t

d e p o s its

p roceed s

of

in

r e c e ip t s ,
th e

g o ld

and

R eserve

im p o r ts ,

p a y m en ts
B an k s,

cau sed

a

fr o m

tog eth er

ren ew ed

G overn ­
w ith

th e

e x p a n s io n

o f e x ce ss re s e rv e s in m e m b e r b a n k s.
In

N ew

Y ork

C it y , p a y m e n t s t o

G overn m en t

s e c u r itie s

and

th e

T reasu ry

fo r

in c o m e

fo r

th e

ta x es,

fo r

Sept. 30, 1935 Aug. 31, 1936 Sept. 30, 1936
Stock Exchange call loans.......................
Stock Exchange 90 day loans.................
Prime commercial paper— 4 to 6 months
Bills— 90 day unindorsed.........................
Customers’ rates on commercial loans
(Average rate of leading banks at
middle of m onth )..............................
Treasury securities:
M aturing December (v ie ld )...............
M aturing February 1938 (y ie ld ). . . .
Average yield on Treasury notes (1-5
vears).......................................................
Average yield on Treasury bonds (more
than 5 years to earliest call d ate). . . .
Average rate on latest Treasury bill
sales 273 day issue................................
Federal Reserve Bank of New York re­
discount ra te ..........................................
Federal Reserve Bank of New York
buying rate for 90 day indorsed bills.

34

*U
X

X

1

X

A

1
* ix
X

A

1.67

1.71

1.67

No yield

No yield
0 .13

N o yield
0.25

0.96

0.67

t0.80

2.67

2 .3 0

#2.33

0.23

0.17

0.19

IX

IX

IX

X

X

X

fiv e
th e

d a ta o n th e m o n e ta r y g o ld h o ld in g s o f c e n tr a l




presen t

of

econ om y.

a

o f cu rren cy

G overn m en t

B anks

th e

flu c tu a tio n s

r e s p e c t iv e

r e v a lu a tio n

been

th e

e x tr a o r d in a r y

M ea su red

r e a d ju s t m e n t
yea rs has been

e q u a liz a t io n

fr e q u e n t

e ffe ct

have

and

th e

so f a r as p o s s ib le , th e im p a c t o f s u c h

a d d it io n ,

g o ld

has been

years.

th e

of

o p e r a t io n s

u n n e c e s s a r ily

flu c tu a tio n s

u n it s .

or

in te r n a t io n a l v a lu e s

to p r e v e n t , in

A n

fe a tu r e

d u r in g th e p a st fe w

th e

tog eth er

S ep tem b er

new

gen eral

cu rren cy

a r e s u lt

sto ck o f m o n e ta r y

fr o m

fro m

h ow ever,

dem and.

T reasu ry

w ith in

fix e d a n d in S w it z e r la n d th is a n n o u n c e m e n t h a s b e e n f o l ­
lo w e d

A s

e x c e e d e d in te re s t p a y m e n ts on G o v e r n m e n t d e b t a n d o th e r

th e

c u r r e n c ie s

o f g o ld

fro m

16,

s e c u r itie s ,
in

q u o ta tio n s

fo llo w in g

ra n g e

of

fo r m e r

a b ro a d , th e

T reasury F

and

fu n d s

th £

d a te , a p a r t fr o m

s e c u r itie s ,

t h e ir

v a lu e

th e

S ta te s in d o lla r v a lu e

g o ld

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

$ 4 7 0 ,0 0 0 ,0 0 0

m en t on

degree

e x is tin g

p e r io d ,

over

d e fin ite g o ld v a lu e s f o r th e ir c u r r e n c ie s , b u t h a v e n e v e r ­
c o n s id e r a b le

fr o m

$ 2 ,0 0 0 ,0 0 0 ,0 0 0

S ep tem b er
little

any

fix e d

to

fro m

th e le s s m a in t a in e d

a

of

R eserve

ta x

cu rren cy

of

banks

A u gu st

have

th a t

not

th e

th e fir s t

th e

c o u n tr ie s

s te r lin g ,

of

in c r e a s e d .

r e c e n t in flo w

F ed eral

On

I n g e n e r a l , t h e n e w a l ig n m e n t is b a s e d , f o r t h e p r e s e n t
at

th e

d o lla r s

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

o f g o ld

E x c e s s R e se r v e s

S w is s

a p p r o p r ia te

im p o r ta n t

a p p r o x im a te ly

by

of

th ro u g h

e x p o rts

s ta b iliz a tio n

to

fin d

of

T h e p o t e n t ia l e x p a n s io n

th e

to

term s

n e a r ly e q u a l to th e w o r ld

1931.

of
ago

in th e g o ld v a lu e o f th e d o lla r , t o g e t h e r

heavy

g u ild e r

a llo w e d

to ta l
yea rs

m o n e ta r y g o ld s to c k o f th e U n ite d

d is b u r s e m e n ts

be

in

a

fiv e

c o n t e n t w a s le s s t h a n

f r a n c w o u ld b e r e d u c e d a c c o r d in g ly , a n d th a t th e D u tc h
w o u ld

in d ic a te

w h ereas

o f th e r e d u c tio n

in

fo llo w e d

w as

v a lu e

of

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

la rg e r .

p r o s p e c t iv e

F ren ch

7, w h en

$ 2 1 6 ,4 0 0 ,0 0 0 ,

1936

have been

of

th e

of

A u gu st

b a n k s a n d G o v e r n m e n ts in 5 2 o f th e p r in c ip a l c o u n t r ie s ,
e x c lu s iv e

♦ Nominal
f Change of + 0 .0 8 from previous yields due to the dropping of the
September 15, 1937 Treasury note issue from the average as it matures within
one year. # Average raised + 0 .0 3 by inclusion of 2 X per cent Treasury bonds
of 1956-59.

FEDERAL RESERVE AGENT AT NEW YORK
tog eth er

w ith

d is tr ic ts ,
S ep tem b er
th e

a

p r e c e d in g

red u ced

end

excess

18, as

of

o u tflo w

com pared

A u g u st.

of

reserv es

In

w ith

th e

fu n d s

to

about

la tte r

to

oth er

$ 4 3 0 ,0 0 0 ,0 0 0
$ 7 0 0 ,0 0 0 ,0 0 0

part

of

at

r e d u c tio n

in

excess

reserves

d u r in g

th e

of

w as

a m ou n ted
th e

D e s p ite

m on th

r e p la c e d
on

u n u su al

a c t iv ity

in

th e

m oney

m ark et w as rep orted .

th e

In

th e

fo u r w eeks

in v e s tm e n ts
N ew

Y ork

th e

c h ie fly

and

in c r e a s e s

in

h o ld in g s ,

s e c u r itie s ,

r e d it

p r in c ip a l

c o m m e r c ia l

tog eth er

la r g e ly

to

23

c itie s

lo a n s

and

$ 2 0 0 ,0 0 0 ,0 0 0
a m ou n ted
The

in v e s tm e n ts

and

to

about

and

in c r e a s e

d e a le r s

Y ork

C ity

ban ks,

banks

23, a n d

on

grea ter

in c r e a s e
T reasu ry

r e m a in e d
and

e a r ly

s e c u r itie s
th e

J u ly ,

o u ts ta n d in g ,

e x c lu s iv e

in c r e a s e d
tie s
t io n s

th e

been

oth er

an
of

fig u r e s

w as

by

on

banks

lo a n s
in

to

N ew

r e p o r tin g
S ep tem b er

$ 5 2 7 ,0 0 0 ,0 0 0

r e p o r tin g

e ls e w h e r e s h o w e d
p u rch a ses

la tte r

in c r e a s e
of

th e

S ep tem b er

th e

of

V e te ra n s

of

s e c u r itie s

A d ju s t e d

an

in v e s tin g

d u r in g

th e

in s titu ­

past

fe w

0 0 0 ,0 0 0 o r t h e r e a b o u t s o f 2 %
f o r ca s h s u b s c r ip t io n , a n d
th e

new

15,

1936.

is s u e

s c r ip tio n

fo r

C ash

th a n

T reasu ry

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

books w ere

w as
th e

in

on

excess

n otes

reserves,

on

to
th e

open, and

th e

A u gu st

S econ d
in

15

th e

day

th e

bank
of

as la r g e

as in

s io n

occu rred

th e n e w
lo w in g

bond

a lth o u g h
la tte r

in

n o te s
of

cash .

and

A verage

0 .1 9

per

s e c u r ity

ra tes

ce n t,

p r ic e s ,

fu rth e r
tow a rd

th e

th e

part
in

th e w e e k

h ig h le v e ls .

b e tw e e n

or

w h ic h

th e

th e

s m a ll r e c e s ­

m arket

v o lu m e

of

th e

b ecam e

of

t r a d in g

m on th

a n arrow

th e clo s e o f

in th e f o l ­

in c r e a s in g ly
r e m a in e d

p r ic e s

reced ed

about

m a rk e t, so th a t a v e ra g e
S ep tem b er w ere

ir r e g u la r ,

lig h t.

about

In

*4

th e

p o in t

q u o ta tio n s

%

o f a p o in t

b e lo w th e h ig h e s t le v e ls o f e a r ly S e p t e m b e r , b u t r e m a in e d
of

A u g u st.

The

1 9 5 6 -5 9 , w h ic h

new

2 %

c lo s e d

p r io r to th e s e co n d

per

at 101

cen t

9 /3 2

T rea su ry

on

in it ia l d a y o f t r a d in g o n th e N e w

S ep tem b er

Y ork

h a lf

bonds

S to ck

of

15, th e

E xch an ge,

w e r e q u o t e d a t 1 0 1 a t th e c lo s e o f S e p t e m b e r 2 8 , a n d th e
2 %

p e r c e n t T r e a s u r y b o n d s o f 1 9 5 5 -6 0 , w h ic h
as 1 0 3 %

on

S ep tem b er 2 a n d

103

1 5, clo s e d a t 1 0 2 2 2 /3 2 o n S e p te m b e r 2 8.
w ere som ew hat h ea vy

d u r in g

0 .7 6

per

cen t

on

on

had been

S ep tem b er

T r e a s u r y n ote s

th e la tt e r p a r t o f

S ep tem ­

o u t s t a n d i n g is s u e s o f

1 to

r o s e t o 0 .8 3 p e r c e n t , a s c o m p a r e d

on

S ep tem b er

15.

A s

th e

m on th

w ith

c lo s e d ,

h o w e v e r , p r ic e s o f a ll T r e a s u r y s e c u r itie s t u r n e d s lig h t ly
fir m e r .
B

il l s

an d

C

o m m e r c ia l

T r a d in g a c t iv it y in b ills in c r e a s e d

P

aper

s lig h t ly f o r a s h o r t

t im e a r o u n d t h e m id d le o f S e p t e m b e r b u t f o r t h e m o n t h
a s a w h o le
ch an ge

th e

a ccep ta n ce

occu rred

in

fro m
and

J u ly .
b ills

fo r e ig n

in

B ills

th e

decrease

c o n tin u e d

q u ie t.

N o

o u ts ta n d in g

at th e

end

a c c o m p a n y in g

of

ta b le , t o ta le d

a p p r o x im a te ly

$ 8 ,0 0 0 ,0 0 0

E x p o r t b ill s s h o w e d a d e c r e a s e o f $ 5 ,0 0 0 ,0 0 0

based

on

goods

sto re d

c o u n tr ie s d e c lin e d

in g b a n k s a n d
0 0 0 ,0 0 0

a

m arket

ra tes.

s h ip p e d

b e tw e e n

b y a s im ila r a m o u n t.

in

A ccep t­

b a n k e rs a t th e e n d

o f b ills , o r r o u g h ly

or

o f A u g u s t h e ld

91 p er cen t o f

$ 2 7 9 ,-

a ll b ills th e n

o u ts ta n d in g .
(Millions of dollars)

su b­

D is tr ic t.
r e q u ir e ­

r e d u c tio n

new

A

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

o ffe r in g a n d th e is s u e d a te , a n d

w eek

Type of acceptance

August 1935

July 1936

August 1936

102
81
9
43
4

105
68
10
47
2

104
63
10
50
2

in

T reasu ry

83

84

79

322

316

308

Dom estic shipment....................................
Dom estic warehouse credit......................
Dollar exchange.........................................
Based on goods stored in or shipped bebetween foreign countries...................

ca sh r a th e r th a n w ith
dem an d— 77 p er

June, and

w a s la rg e r

C o m m e r c ia l
s m a lle r ,

T h e to ta l o f th e S e p te m b e r n e w

te m b e r




th e

d a y s o f S e p te m b e r, a n d th e a v e ra g e p r ic e o f

T rea su ry b on d s rea ch ed n ew

t h a n t h e p r o p o r t i o n p a id f o r in c a s h o n t h e M a r c h is s u e s .

c o n s id e r a b ly s m a lle r t h a n

in

M arch .

$ 2 ,0 0 0 ,0 0 0

a m ou n ts.

G overn m en t

t o ta le d

o f th e n e w

reserv e

con sequ en t

p r o p o r tio n

fo r

o n ly

con se­

or

S e p te m b e r w a s lim ite d

0 .1 3

o v e r $ 2 0 0 ,-

R eserve

to th e G o v e rn m e n t o n

ce n t— w a s v ir tu a lly

th a t

s lig h t ly

F ed eral

S ep tem b er

bonds

$ 4 7 0 ,0 0 0 ,0 0 0

m em ber

and

new

one

s e c u r itie s p a id f o r im m e d ia te ly in
d e p o s it s p a y a b le

m a t u r in g

th e

a llo t t e d , o f w h ic h

in c r e a s e

m en ts

p e r c e n t 2 0 -2 3 y e a r b o n d s

a n o ffe r to e x c h a n g e b o n d s o f

s u b s c r ip t io n s

is s u e w a s a c t u a l ly

D e s p ite

th e fir s t f e w

$ 3 0 8 ,0 0 0 ,0 0 0 ,

e c u r it ie s

T h e T r e a s u r y o n S e p t e m b e r 8 a n n o u n c e d its q u a r t e r ly

0 0 0 ,0 0 0

in

o f A u g u st, as sh ow n
S

cash

th e A u g u s t ra tes.

stre n g th

S e r v ic e
th a t

G o v e r n m e n t s e c u r i­

and

banks

o vern m en t

s im ila r

b e tw e e n

but
June

f i n a n c i n g p r o g r a m , w h ic h i n c l u d e d t h e o f f e r i n g o f $ 4 0 0 ,-

m ore

of

5 y e a r m a t u r it y

m on th s.
G

d u r in g

b er, a n d th e a v e ra g e y ie ld

a p p r o x im a te ly

th e re fo re ,

in v e s to r s

in

June

exch an ge

red eem ed

th e

of

15,

part

G overn m en t

in d ic a te ,

m em ber

by

and

o f o u ts ta n d in g

ta k en

th a n

a ll

ended

r e fle c tin g

v o lu m e

p r o p o r tio n

has

C it y

of

be

b ill fin a n c in g

b e lo w

as h ig h

s o ld

d e s p ite

in

T h ese

in

w eeks

s e c u r itie s

le v e ls

$ 5 0 0 ,0 0 0 ,0 0 0
bon ds.

in c lu d e s

$ 6 4 ,0 0 0 ,0 0 0

th e to ta l v o lu m e

Y ork

to

in

le a v in g

a b o v e th e q u o ta tio n s p r e v a ilin g

w h ic h

fo u r

S ep tem b er,

b e lo w

w as

p r e v io u s .

N ew

in

C it y

m em ber

$ 1 5 8 ,0 0 0 ,0 0 0

th e

G overn m en t

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

lo a n s

c o n n e c tio n

Y ork

r e p o r tin g

lo a n s

and

a year
of

in

in

T h e in c r e a s e in

N ew

in c r e a s e d

d u r in g

th a t d a te

th a n

H o ld in g s

new

of

o r g a n iz a t io n s

m em ber

in

a ll

G overn m en t

$ 3 5 0 ,0 0 0 ,0 0 0 .

c la s s ific a t io n

b u s in e s s

som e

fo r

r e fle c tin g

som e

s e c u r ity

in

th rou g h ou t

lo a n s

w ith

and

banks

in c r e a s e s ,

w it h th e S e p te m b e r T r e a s u r y fin a n c in g .
to ta l

th e lo a n s

m em ber

s u b s t a n t ia l

bonds

fo r
in

w a s e v id e n t d u r in g A u g u s t , c o n t in u e d t o b e e x h ib it e d in

S ep tem b er

r e p o r tin g

oth er

show ed

C

a n k

ended

w e e k ly

C it y

cou n try

s e c u r ity
on

of

B

is s u e

m a t u r it ie s

s lig h t ly

em ber

new

p a id

th a n

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

is s u e s v a r ie d

The
M

th e

am ount

s m a lle r

t o fiv e w e e k ly s a le s o f $ 5 0 ,0 0 0 ,0 0 0 o f 2 7 3 d a y b ills w h ic h

S e p t e m b e r m o n e y r a te s in th e N e w Y o r k m a r k e t r e m a in e d
no

of
to

T reasu ry

a ctu a l

m u ch

m a t u r in g

u n ch an ged ,

and

th e

A llo t m e n t s

h o w e v e r , t h e r e w a s a g r a d u a l in c r e a s e t o o v e r $ 5 0 0 ,0 0 0 ,th e

and

q u e n tly

S ep tem b er,

0 0 0 , r e fle c tin g la r g e ly th e e ffe c t o f g o ld im p o r ts .

d a te s,

on

fin a n c in g , h o w e v e r , w a s

o n th e tw o p r e v io u s q u a r te r ly

paper

th o u g h
fo r

cr e d it

d e a le r s

g e n e r a lly
fr o m

rep orted

fa ir ,

con cern s

th e c o m m e r c ia l p a p e r m a r k e t.

dem and
u s in g

th e

a

som ew h at

d u r in g

S ep­

fa c ilitie s

of

B a n k in v e s tm e n t d e m a n d

MONTHLY REVIEW, OCTOBER 1, 1956
fo r

b u s in e s s

o ffe r in g s .
s lig h t ly

n otes

r e m a in e d

A lt h o u g h

fir m e r

m a rk et,

w e ll

th e re

ra te

w as

ten d en cy

q u o ta tio n s

w ere

in

not

in

excess

som e
th e

of

a v a ila b le

in d ic a tio n

of

c o m m e r c ia l

m a te r ia lly

a

paper

a ffe c te d

p a r ity ,
per

and

cen t

th e

S w is s

b e lo w

its

fr a n c ,

fo r m e r

at

2 3 .0 0

p a r ity

ce n ts,

and

clo s e

w as

2 9 .6

th e

new

to

d e fa c t o p a r ity .

and

The

p e r io d

im m e d ia te ly

p r e c e d in g

th e

F ren ch

G ov­

a v e r a g e g r a d e p r im e f o u r t o s ix m o n t h c o m m e r c ia l p a p e r

e r n m e n t ’s d e c is io n w a s m a r k e d b y a p r o n o u n c e d a c c e n t u ­

r e m a in e d

a tio n

at

%

per

ce n t.

A t

th e

end

of

A u gu st

com ­

of

p ressu re

m e r c ia l p a p e r h o u s e s h a d a t o t a l o f $ 2 0 5 ,2 0 0 ,0 0 0 o f p a p e r

r e fle c te d

o u t s t a n d in g ; th is c o m p a r e s w it h

la r g e w id e n in g

of

J u ly ,

and

is

th e

la r g e s t

$ 1 8 7 ,6 0 0 ,0 0 0 a t t h e e n d

am ount

o u ts ta n d in g

s in c e

O cto b e r 1931.

B ank

in

of

d u r in g

The
at

E x ch a n g e s

F ren ch

or

near

cou n try
m e n ts

w ere

in

at

to

g o ld

U n ite d

of

m ade
to

fo llo w in g

th rou gh

its

c o n tin u e

g o ld

26

th is

engage­
2 5, th e

an n ou n ced
a

F ren ch

w ith

sta te m e n ts

use

in

by

a p p r o p r ia te

th e

th e ir

a v a ila b le

th e

$ 2 ,1 5 7 ,0 0 0 ,0 0 0

th e

p rop osed

The

cu rren cy

F ren ch

S ep tem b er

to

vote

m on eta ry

m easu res.

to

th e

red u ce

to

3 4 .3 5

per

g o ld
ce n t,

fo r th e p u r p o s e
fr a n c .
r a is e d

to

in

A lt h o u g h
th rou g h

and

to

m easu res
of

th e

a

of

bank

n otes

2 5 .1 9

s t a b iliz a tio n

d e a lin g s

w ere

th e

fu n d

g o ld .

o f th e

t e m p o r a r ily

B ank

th e m in im u m

in to

a u th o r ity

fr o m

e x c h a n g e v a lu e

th e P a r is m a rk e t a n d
fig u r e

by

on

p rop osed

in c lu d e

fr a n c

e s t a b lis h

exch an ge

con ven ed

G o v e r n m e n t ’s

o f r e g u la tin g th e

u p o n th e F r e n c h

fr o m

o f F ran ce

u n it f o r

F o llo w in g

th e

s w iftly

G o v e r n m e n t ’s d e c i s io n , a c t i o n w a s a ls o

of

g o ld

cen t

a

th o s e

of

F ran ce.

a u th o r iz in g
ren cy

of

In

S w itz e r la n d

a r e d u c tio n

fr o m

2 5 .9 4

in

to

th e

la w s

g o ld

3 4 .5 6

per

th is

le g is la t io n ,

de fa c to
of

r e d u c tio n

3 0 .0 8

per

th e
in

ce n t.

S w is s

th e

ce n t,

A n

v a lu e

em ba rgo

en a cted

of

th e

cu r­

and

p r o v id in g
P u rsu an t

B ank

o f th e

on

to

fu n d .

N a tio n a l

g o ld

w ere

co n te n t

f o r t h e e s t a b lis h m e n t o f a s t a b iliz a t io n
to

s im ila r

e ffe c te d

a

th e

and

exchan ge

th e

had

b e g in n in g

p r o v is io n a l r e v a lu a t io n

a
of
of

o f th e

o f M arch
th e

p o i n t o f $ 5 ,4 7 9 ,0 0 0 ,0 0 0

1935, w ere

s u c c e e d in g

q u o ta tio n

fo r

a t its lo w e r

r a p id ly

th e

p o in t

r e a c h in g

w eak n ess

in

of

on

th e

as

th e

days

fe w

e q u iv a le n t

com p a red

w ith

D is c o u n ts o n

in

T h u rsd ay,

fra n c

by

a h a lf.

N ew

Y ork

$ 0 .0 6 5 8

fo rw a r d

D u r in g
an

of

14

5 /1 6

fra n c s

p r e c e d in g

th e

50

per

th e

at

end

c o n tr a c ts o f s h o r te r m a t u r it y ,
d r a in

b a s is , w e r e e v e n w id e r .

r e s u lt in g fr o m

exch an ge,

of

upw ard

th e

S ep tem b er

ten d en cy

d o lla r -s t e r lin g
22.

ra te

In

m ovem ent
on

cen t

B ank

of

an

th e

a cu te

F ran ce

in c r e a s e

on

in

d is ­

3 to 5 p e r c e n t, e ffe c tiv e th e fo llo w in g d a y .

m ost

S ep tem b er

r o u g h ly

per

S ep tem b er 24, a n n o u n ce d

co u n t ra te fr o m

th e

dow n

and

sp o t fr a n c s

g o ld

d is c o u n t

d u r in g

O w in g t o th e h e a v y g o ld

show

d raw n

year

G o v e r n m e n t ’s a c t io n , t h e r a t e f o r t h r e e m o n t h s 7

$ 5 .0 1 %

b r o a d ly

fo llo w in g
w eek

F ren ch
s in c e

s h ip m e n ts ,

o f A u g u st.

th is

w ere

e a r lie r .

a

The

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

p r e v io u s

w h e n c a lc u la te d o n a p e r a n n u m

s p e c ia l

d iffic u ltie s

th e

year

ta k e n b y th e r e m a in in g c o u n t r ie s o f th e g o ld b lo c , w h o s e
m on eta ry

th e

in

S e p te m b e r 25 b y m e a n s o f th e u s u a l m a c h in e r y

co n tra cts

s p e c ia lly

th e

T hese

a p r o h ib itiv e

co n v e r s io n

w as

on

co n te n t

M e a n w h ile

su spen ded

r e s u lt in g

r e a d ju s t m e n t .

P a r lia m e n t

28

exch an ges

of

p ressu re

d u r in g

w a s m a in ta in e d

F ren ch

in te r n a tio n a l

in

w as

and

fr a n c s .

25,

under

la tte r p a r t

of

of

lo s s

S ep tem b er

o f F r a n c e , w h ic h w e r e a t a h ig h
in

w id e n e d

b a s is

fo rw a r d

g o ld

w h ic h

o u tflo w

B e lg ia n m o n e t a r y u n it , a n d th e g o ld h o ld in g s o f th e B a n k

r e s o u r c e s so as t o a v o id a s f a r a s p o s s ib le a n y d is t u r b a n c e
th e

exchan ge,
g o ld

w eeks

r e c u r r e n tly

A p r il 1935, fo llo w in g

a n n ou n ce­

G o v e rn m e n ts , d e c la r in g

to

its

r e d u c tio n

The

s im u lt a n e o u s ly
B r itis h

to

S ep tem b er

P a r lia m e n t

fr a n c .

s te a d ily

s h ip m e n ts

S ep tem b er

to
th e

S ta te s a n d

in te n tio n

on

r e m a in e d

g o ld

and

v o lu m e

p ropose

v a lu e

w as

S ep tem b er
w h ic h

p r o fita b le ,

G overn m en t

d e c is io n
m ent

in

le v e l

in c r e a s in g

F ren ch

th e

fr a n c

th e

tw o

a

ended

$ 5 5 ,7 0 0 ,0 0 0

$ 4 3 ,3 0 0 ,0 0 0
been

rep orted

w eek

of

F ren ch

a c c e le r a te d

o f th e d is c o u n t o n

F ra n ce
th e

d ecrease
F o r e ig n

a g a in s t

a g r e a tly

w as

pound

term s

r e a c h in g

th e

F r id a y ,

th e

in

a

and

$ 5 .0 7 1
/4

days,

th e
On

to

c u r r e n c ie s ,

of

fe w

25.

S ep tem b er

c o n tin u e d

g o ld

h ig h

su bsequ en t

reversed

of

on

h ow ever,

ra te

c lo s e d

S a tu rd a y

at

m orn ­

in g , im m e d ia te ly fo llo w in g th e p u b lic a tio n o f th e F r e n c h
G o v e r n m e n t ’s a n n o u n c e m e n t , m o v e m e n t s
d o lla r

q u o ta tio n

q u ic k ly

b ecam e

a n d $ 4 .9 5 %

on

w ere

som ew hat

m ore

s ta b le ,

in

e r r a tic ,

r a n g in g

th e

but

pound-

th e

b e tw e e n

ra te

$ 4 .9 3 ^

S e p te m b e r 28, 29, a n d 30.

S w is s f r a n c

g o ld

ex p o rts

w as

G o ld

M o v e m e n t

im p o s e d b y th e N e th e r la n d s G o v e r n m e n t a n d a s ta b iliz a ­
tio n

fu n d

D u r in g
th e

th e

above

s e ttlin g

t e m p la te d

29,

p r e v io u s
m arket

b e in g
w h ic h

p a r ity .
w as

d e c lin e d

in

in

of

in

th e

th e

th e

P a r is

in

S ep tem b er

30,

q u oted
w as
The




g u ild e r
or

th e

as

o n ly
on

1 9 .2

per

1 3 .3

th e
fo r

d e c lin e
th e

v a lu e , th e

per

cen t

co n d itio n

in

30

and

at

b e lo w

5 5 .0 0
its

in

con ­

fr a n c -

on

Sep­

b e lo w
th e

its

fr a n c

th e

a d e p r e c ia t io n

q u oted
cen t

to

fr a n c s

$ 0 .0 5 7 5

S e p te m b e r

w as

and

in it ia l

as

fo r

s u s p e n s io n

s m a lle r t h a n

h ig h

s p e c ia l

ra tes

a d ju s t m e n t

m arket

th e f r a n c ’s g o ld

corrected
The

th e
of

o b ta in in g

c o n s id e r a b ly

t o $ 0 .0 4 8 5 , e q u iv a le n t t o

ce n t.

m on th

p rocess

p r o m p tly

c o m m it m e n t s ,

w as

d ecrease

ra te

tem b er

per

d e a lin g s

m a t u r in g

days

w ere

O w in g to th e t e m p o r a r y

d iffic u lty

exch an ge

d o lla r

fe w

bases.

exch an ge

r e s u lt in g

fra n c

la s t

c u r r e n c ie s

to t h e ir n e w
of

The

a u th o r iz e d .

ra te

o f 2 6 .9

ce n ts

fo r m e r

on

g o ld

m ovem ent

of

g o ld

to

th e

U n ite d

S ta te s

w h ic h

b e g a n d u r in g th e e a r ly p a r t o f A u g u s t c o n tin u e d d u r in g
S e p te m b e r a t a n a c c e le r a te d
m on eta ry

000 , 0 0 0 ,
fro m

g o ld
of

s to ck

w h ic h

E n g la n d ,

e r la n d ,
Y ork,

and
and

A u s tr a lia
tog eth er
scrap

and

C h ile

$ 4 0 0 ,0 0 0 f r o m
c o n tin u e d

o f g o ld

fr o m

w ere

fr o m

r e c e iv e d

H ongkong.
of

to

$ 1 0 7 ,-

$ 8 ,1 0 0 ,0 0 0

$ 5 ,7 0 0 ,0 0 0

$ 1 ,7 0 0 ,0 0 0

r e c e ip t s

fro m
S w itz ­

at

cam e

N ew
fr o m

T h e s e im p o r ts ,

n e w ly

m in e d

and

a s s a y o ffic e s a n d t h e r e le a s e
ea rm ark

B ank

o f a p p r o x im a te ly

s to ck

F ran ce,

In d ia ,

C oast

a ffe c t in g th e

a m ou n ted

fr o m

fr o m

fr o m

W est

F ed era l R eserve

g o ld

Im p o rts

H o l l a n d , $ 5 0 0 ,0 0 0

a t th e m in ts a n d

a n in c r e a s e
ta ry

th e

w ith

o f $ 3 ,5 0 0 ,0 0 0
a t th e

fro m

$ 5 0 0 ,0 0 0
on

g o ld

$ 8 2 ,3 0 0 ,0 0 0

$ 6 ,5 0 0 ,0 0 0

C a n a d a , $ 1 ,4 0 0 ,0 0 0

ra te.

o f th is c o u n t r y

of

fo r

N ew

fo r e ig n

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

o f th is c o u n t r y

d u r in g

a ccou n t

Y o r k , r e s u lte d
in

in

th e m o n e ­

S ep tem b er.

77

FEDERAL RESERVE AGENT AT NEW YORK
A d d itio n a l

im p o r ts

to ta lin g

u n d e r e a rm a rk fo r fo r e ig n

$ 3 2 ,4 0 0 ,0 0 0

w ere

p la c e d

a c c o u n t o n a r r iv a l, a n d c o n s e ­

a ls o

to

have

been

q u e n t ly t h e ir r e c e ip t in th is c o u n t r y d id n o t in c r e a s e th e

t ic c o r p o r a t io n

g o ld

in g

sto ck .

som ew hat

is s u e s t o t a le d

$ 7 3 ,0 0 0 ,0 0 0

of

p u b lic

in d u s tr ia l s e c u r itie s , a n d
C e n tra l

B a n k

R a te

S ta te ,

C h a n g es

m u n ic ip a l,

$ 2 0 0 ,0 0 0 ,0 0 0 .
E ffe c t iv e

S ep tem b er

9 th e

d is c o u n t

N a tio n a l B a n k w a s lo w e r e d fr o m
e a r lie r r a te h a d

been

in

fo rce

ra te

2 %

of

th e

S w is s

to 2 p e r ce n t.

s in c e

M ay

3, 1 9 3 5 .

The

A s

of

le s s

th a n

in

S ep tem b er

la s t y e a r , a c c o r d in g to p r e lim in a r y w e e k ly d a ta .

and

The

a b o u t $ 1 7 0 ,0 0 0 ,0 0 0 , i n c l u d ­

u t ilit y

bon ds,

$ 2 8 ,0 0 0 ,0 0 0

fa r m

to ta l

of

D om es­

lo a n

of

a ll

$ 6 7 ,0 0 0 ,0 0 0

of

r a ilr o a d

fin a n c in g

iss u e s ,

of

bon ds.

a gg rega ted

in c lu d in g

som e

s m a ll fin a n c e c o m p a n y iss u e s , w a s in th e n e ig h b o r h o o d o f
$ 3 8 0 ,0 0 0 ,0 0 0 .

The

la r g e r

is s u e s

of

th e

m on th

are

lis te d

b e lo w .

th e 2 5 t h th e B a n k o f F r a n c e r a is e d its d is c o u n t r a t e a n d
its r a t e

fo r

s e c u r itie s

30

day

fr o m

a d van ces

3 to

5

per

on

sh ort term

ce n t,

and

th e

G overn m en t

ra te

fo r

in f o r c e

4 to 6 p e r ce n t.

s in c e J u l y

S e c u r ity

M a rk e ts

M o v e m e n ts
S ep tem b er.
m on th

of

s to ck

p r ic e s

w ere

ra th er

ir r e g u la r

recovered

and

a lth o u g h

fu r th e r
a

fr o m

th e

r e p r e s e n ta tiv e

The

of

a ll

a s id e
of

B e th le h e m
fr o m

s u b s id ia r y

it

p oses in c lu d in g

m a te r ia lly

above

th e

le v e ls

tou ch ed

in

th e

la tt e r p a r t o f J u ly a n d a g a in in th e fir s t p a r t o f A u g u s t .

of

R a ilr o a d a n d in d u s tr ia l s to c k s w e r e th e s tr o n g e s t g r o u p s ,
w h ile th e p u b lic u t ilit ie s r e m a in e d b e lo w

th a t

S ep tem b er

In

th e p e r io d

16, a d ow n w a rd

b e tw e e n

ten d en cy

arou n d

u pw ard

th e

m id d le

m ovem ent

of

of

A u g u st.

p r ic e s

w as

and

8 and

d e v e lo p e d , th e

te n t o f th e d e c lin e b e in g a b o u t th e sa m e
s io n

th e ir J u ly

S ep tem b er

ex­

as in th e r e c e s ­

S u b s e q u e n tly ,

resu m ed,

and

th e

average

th e

S ta te

th e

3 83
0 2 5 -1 .5 0
1.00
3 35
3.53
3.24

th e

N ew

a

cost

to

record .

cou p on

is s u e

th e

The

be

of

fo r
p u r­

fe a tu r e

it

per

P a c ific

w as

th e

V2 p e r

per

cen t— w as

R a ilr o a d

o p e r a t io n

o n ly
4

The

th a t

S t a t e — 1 .3 6

bear

used

S ta t e a t o n e t im e a n d

r e fu n d in g

(w h ic h

becau se,
s e c u r itie s

corp ora te

w as

U n io n

d iffe r e n tia l

bonds

t h e n e w is s u e

of

w ill

oth er

o f b o n d s s o ld b y th e

in te r e s t

c a lle d

in te r e s t

p roceed s
and

Y ork

w a s th e fir s t la r g e

w ith

th e

of

r e t ir e m e n t

a d d it io n a l w o r k in g c a p ita l.

of

lo w e s t o f

t io n

w as

th e

im p r o v e m e n ts ,

la r g e s t b lo c k

A u g u s t h ig h s .

th e

is s u e
fo r

c o m p a n ie s ,

a c q u is itio n s ,

not

S te e l

$ 1 4 ,7 0 0 ,0 0 0

g r o u p s o f s to c k s e s ta b lis h e d a n e w h ig h s in c e A p r i l 1 9 3 1 ,
w as

30
1-10
9 mos.
30
34
30

in

m id -A u g u s t

a verage

Yield to
M a tu rity
(per cent)

$55,000 000
55.000.000
45,000,000
28,000,000
20,000,000
20,000,000

Bethlehem Steel Corporation...........
State of New Y o r k ...................
Commonwealth of Pennsylvania. . .
Louisville Gas & Electric Company,
Union Pacific Railroad C om pany...
D etroit Edison Company..................

D u r in g a p p r o x im a t e ly th e fir s t w e e k o f th e

p r ic e s

d e c lin e ,

T h e lo w e r ra te s h a d b e e n

10.

" Amount

Issue

m o n th s ’ a d v a n c e s o n o th e r s e c u r itie s w a s in c r e a s e d s im u l­
t a n e o u s ly fr o m

Term of
Years

th ree

cen t

cen t

flo ta ­

u n d e rta k e n
b e tw e e n

in te r e s t)

( o n w h ic h t h e c o u p o n r a t e is 3 ^

and

p e r ce n t).

p r ic e s o f in d u s t r ia l a n d r a ilr o a d sh a re s e q u a le d th e h ig h

T h e a d v a n t a g e o f t h e o p e r a t i o n is s o m e w h a t g r e a t e r r e l a ­

le v e ls

t iv e

rea ch ed

e a r ly

in

S ep tem b er,

but

th e

u t ilit ie s

re­

to

m a in e d s o m e w h a t lo w e r a n d w e r e a b o u t 6 p e r ce n t b e lo w

ca ted

th e y e a r ’s h ig h

th e

w h ic h

w as reach ed

in

J u ly .

In

th e la s t

oth er

by

recen t

th e

c a lle d

is s u e

w e e k o f th e m o n t h ,-ir r e g u la r p r ic e m o v e m e n t s p r e v a ile d .

r e fu n d in g

The

be red eem ed

v o lu m e

E xch an ge

of

sto ck

t r a d in g

c o n tin u e d

to

on

be

th e

ra th er

N ew

Y ork

lig h t

S to ck

th ro u g h o u t

S e p tem b er.

The

c o r p o r a tio n

bonds

g e n e r a lly

ad va n ced

d u r­

is

o p e r a t io n s

cou pon

th e

at

is

in d i­

h ow ever,

ra tes,

th a n

s in c e

p a r, w h ereas

s e c u r itie s

to

be

in

m any

r e p la c e d

m ust

a t p r ic e s w e ll a b o v e p a r .

new

is s u e s

d u r in g

r e c e iv e d

a d van ced

in

r e d e e m a b le

o p e r a t io n s

fa v o r a b ly

D o m e s tic

r e fu n d in g

d iffe r e n c e

in

S ep tem b er

th e

som ew h at above

g e n e r a lly

m a rk et,

o r h e ld

and

at th e

w ere

q u o ta tio n s

o ffe r in g

le v e ls .

in g S e p te m b e r, fo llo w in g th e ir r e g u la r m o v e m e n ts d u r in g
A u g u st.

T h e r is e in c lu d e d a ll c la s s e s a n d g r a d e s o f b o n d s

b u t w as m ost p ron ou n ced
r a ilr o a d

bon ds,

le v e ls

1936

of

c r e a s in g
in g s .

w h ic h

rea ch ed

tr a ffic

and

in

th e

rose
in

ca se

above
of

D e s p ite th e m o re r a p id
p u b lic

c o n tin u e

u t ilit y

to

bon ds,

in

p r e v io u s

s e ll a t l o w e r p r i c e s

h ig h
to

ra ilr o a d

in ­

earn ­

a d v a n c e in m e d iu m

grade

g r a d e s o f in d u s tr ia l

h ow ever,

th e

th a n

C o m m o d ity

P r ic e s

grade

respon se

im p r o v e d

r a ilr o a d b o n d s th a n th e c o m p a r a b le
and

m e d iu m

th e ir

F ebru ary,

rep orts

of

r a ilr o a d

bonds

e ith e r o f th e

oth er

F o llo w in g
A u gu st
in d e x

of

B u reau
to

and

w h o le s a le

of

L abor

e q u a l th e

le v e l

a m o d e r a t e r e c e s s io n in th e la t t e r p a r t o f

fir s t p a r t

s ix

of

S e p te m b e r, th e

c o m m o d it y

S ta tis tic s
year

p r e v io u s ly

a d va n ced

h ig h

rea ch ed

of
on

m e n ts r e s u lte d la r g e ly fr o m

r a ilr o a d

bonds

fo o d p ro d u cts g ro u p s.

a re n o w

s e llin g a t p r ic e s t o y ie ld

com p ared
and

4 .1 0

w ith

4 .6 5

p e r cen t fo r

B aa
per

by

M o o d y ’s I n v e s t o r s

cen t

S e r v ic e

a b o u t 5 .1 5 p e r c e n t , a s

fo r

p u b lic

u t ilit y

bonds

in d u s t r ia l b o n d s o f s im ila r g r a d e .

8 1 .5

c o m p r e h e n s iv e

c o m p ile d
in

per

A u gu st

th e

w eek

ended

S ep tem b er

1930,

A u g u s t h ig h .

cen t o f
22,

th e

and

S ep tem b er
e x c e e d in g

th e
1926

d e c lin e d

T hese m ove­

flu c t u a t io n s in th e f a r m

F arm

E x c lu s iv e

by

m id -S e p t e m b e r

m o d e r a t e ly t o w a r d s th e c lo s e o f th e m o n t h .

c la s s e s o f b o n d s ; e x p r e s s e d o n t h e b a s is o f a v e r a g e y ie ld s ,
ra ted

p r ic e s

and

p r ic e s as a g r o u p r e a c h e d in
19

a

by

o f th e

new
a

h ig h

s lig h t

fa r m

and

le v e l

s in c e

m a r g in
fo o d

th e

p ro d u cts

g r o u p s , litt le n e t c h a n g e in b a s ic c o m m o d it y p r ic e s fr o m
N e w

F in a n c in g

The

v o lu m e

e r a t e ly
A u g u st,

o f new

d u r in g
but

th e p r e v io u s m o n t h ’s q u o t a t io n s w a s r e g is t e r e d .
s e c u r ity

S ep tem b er

n e v e r th e le s s

over

o ffe r in g s
th e

r e m a in e d

n u m b e r o f m o n th s e a r lie r th is y e a r .




in c r e a s e d

v o lu m e
s m a lle r

put

m od­

out

th a n

in

in
a

T h e am ou n t appears

A m ong
m ost

th e

in d iv id u a l

s u b s t a n t ia l

in c r e a s e

R is in g s te a d ily f r o m
tio n

of

th e

N um ber

a g r ic u ltu r a l
w as

in

c o m m o d it ie s ,

th e

p r ic e

of

th e

w h ea t.

e a r ly in S e p t e m b e r , th e c a s h q u o t a ­
1

N orth ern

grade

at

M in n e a p o lis

78

MONTHLY REVIEW, OCTOBER 1, 1936

ad van ced

12

b e lo w

seven

th e

ce n ts

to

$ 1 .4 8 %

year

and

s u b s e q u e n tly

The

ca sh

h ig h

lo s t

q u o ta tio n

o n ly

fo r

a

b u s h e l,

e s ta b lis h e d
a

s m a ll

corn

or

o n ly

e a r ly

p art

a d van ced

in

of

1

cen t

PASSEN G ER

CARS

M OTOR T R U C K S

A u g u st,

th is

d u r in g

g a in .

th e

fir s t

h a lf o f th e m o n th , b u t r e c e d e d s u b s e q u e n tly , a n d s h o w e d
little

net

g a in

fo r

cen t a p ou n d

th e

a ls o

p a r t th e r e d u c tio n
m ent

rep ort

fo r

m on th .

occu rred
in

A

in

th e c r o p

S ep tem b er

net

spot

g a in

in d ic a te d

1.

of

S te e r

b y th e

p r ic e s

show ed

on th e
but

ten d

average

at

to m o v e

p o in ts to

th is

a d e c lin e

season

of

3 .4 0

o f 90

th e

s o m e w h a t lo w e r .

in

G overn ­

H o g p r ic e s

ce n ts a h u n d r e d ­

year

R aw

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

%

d is p la y e d

a r is in g t r e n d a n d h id e s a ls o r o s e s o m e w h a t .
w e ig h t,

n e a r ly

c o tto n , r e fle c tin g

th ey

su gar

g e n e r a lly

d ecreased

lo w e s t q u o t a t io n

30

s in c e

F ebru ary.
The

p r in c ip a l ch a n g e

in

m e ta l p r ic e s

d u r in g

S ep tem ­

b e r w a s a r is e in s c r a p s t e e l ; a t P it t s b u r g h th e q u o t a t io n
a d va n ced

$2

fu r th e r

to

$ 1 8 .2 5

a ls o p r ic e s w e r e m o d e r a t e ly
m on th

h ig h o f 4 6 %

th e se

ton ,

h ig h e r .

ce n ts a p o u n d

c lo s e d th e m o n t h s lig h t ly b e lo w
w ith

a

e x c e p tio n s , s h o w e d

and

T in

on

Production of Passenger Cars and Motor Trucks During the First
Eight Months of 1928-1936 (Data for First Eight
Months of 1929 = 100 per cent)

C h ic a g o

rea ch ed

a fo u r

S ep tem b er 18 a n d

th is fig u r e .
little

at

M e ta l p r ic e s ,

ch an ge.

ea ch

year

1929

p e r io d .

s in c e

1928,

F rom

in

p e rce n ta g e s

1929

to

1932

of

ou tp u t

p assen ger

car

in

th e

p rod u c­

t io n d e c lin e d 7 5 p e r c e n t , b u t s in c e t h a t t im e 8 p o in t s o f
d e c lin e w e r e

recovered

1 9 3 5 , a n d 8 in

P r o d u c tio n

in

1 9 3 3 , 17 p o in ts in

1 93 6 , so th a t p r o d u c tio n

1 9 3 4 , 1 4 in

in th e fir s t e ig h t

m o n th s o f th e p r e s e n t y e a r w a s w ith in 28 p e r c e n t o f th e
The

le v e l

of

in d u s tr ia l

p r o d u c tio n

th a t

p r e v a ile d

in

1 9 2 9 p e a k , a n d w a s a lm o s t e q u a l t o th e 1 9 2 8 fig u r e , w h ic h

A u g u s t a p p e a r s to h a v e b e e n m a in ta in e d d u r in g S e p te m ­

w a s n e x t t o t h e h ig h e s t in t h e i n d u s t r y 's h is t o r y .

b er.

to flu c tu a te w it h in

p r o d u c tio n

d e c lin e d

th e n a r r o w ra n g e a r o u n d th e 7 0 p e r c e n t o f c a p a c ity le v e l

p r o d u c tio n

fr o m

th a t

s u b s e q u e n tly

S te e l m ill o p e r a t io n s
has

p r e v a ile d

a n tic ip a tio n
a u to m o b ile
over

th e

s in c e

o f p r ic e

c o n tin u e d
A p r il,

r is e s a n d

m a n u fa ctu re r s

m on th

as

a

a lth o u g h

r e s u lte d

w h o le ,

pu rch ases

r e s u m p tio n
in

and

a r is in g

d u r in g

in

o f b u y in g b y
te n d e n cy

th e

la s t

w eek

71

p o in t

recovered
yea r.

a ffe c te d

ity .

of

It

w as

rep orted

op era te

pow er

at

a

th a t

h ig h

p r o d u c tio n

cotton

le v e l

in c r e a s e d

w ere

p r o d u c tio n

sto p p e d

The
tio n

of

th e

S y ste m

c o n tin u e d

and

B oard

1933,

29

som e

in d u s tr y

in

as

of

in d e x

G overn ors

1934,

by

year

a v e ra g e , as p r o d u c tio n

d e c lin e s

in

a ll

in

ca ses.

h ig h e s t

oth er
S te e l

le v e l

fo r

lin e s ,

ou tp u t

any

in

G a in s in

th e

to

th e
th e

a s s e m b ly

lin e s

7

o ffs e t

a llo w e d

per

one

show ed

w ere

cen t

fo r

to

th e

e x c e p tio n ,

and

c o t t o n t e x t ile p r o d u c t io n , in r is in g 4 p e r c e n t, e s ta b lis h e d
a

s im ila r

in

ra yon

record .
m ills ,

fu r n a ce s ,
p eak s.

E xpanded

m eat
and

a c t iv ity

p a c k in g

sh oe

D e c lin e s ,

th e

w as

p la n ts ,

p r o d u c tio n

on

z in c .

a

retu rn ed
W ith

a ls o

flo u r

exceeded

oth er

hand,

e v id e n t

m ills ,

and

a ll p r e v i­

occu rred

in

The

and

tool

th e

c e s s a tio n

is t i m e l y

a u to m o b ile

cars

and




to

of

in

ou tp u t

a s s e m b ly

r e v ie w

in d u s t r y

a c c o m p a n y in g

senger

a ls o

of

o rd ers, fo llo w in g

th e

c o a l,

le a d ,

spu rt

and

in

J u ly ,

on

1936

to th e le v e l o f J u n e .

m o d e ls , it
th e

c lo s e ,

M a c h in e

d ia g r a m

tru ck s

th e

d u r in g

o p e r a t io n s
ex ten t

th e

sh ow s

d u r in g

th e

in

and

yea rs

seasonal

w ere

12

th is

m ay

be

a c t iv ity

year.

1935

1936
June

July

Aug.

53
69
50
67

75
91
59
86

77
95
59
87

81
101
49
81

Automobiles
Passenger carsr..............................................
M otor trucks.................................................

81r
98

92r
101

106r
108

98 v
106p

Fuels
Bituminous coal............................................
Anthracite coal..............................................
Petroleum, crude..........................................
Petroleum products......................................
Electric powerr..............................................

63
43
68
68
86r

79
77
70
69
91r

86
71
68
71
92r

82 p
57 p
70 p

Metals

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

a u t o m o b ile a s s e m b lie s as p r o d u c t io n o f 1 9 3 6 m o d e ls d r e w
tow a rd s

1935,

O f th e

p o in ts

lin e s

p rod u c­

a g g reg a te

fa c to r s

w ith

in

peak.

11

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

F ed era l R eserve

som e

in c r e a s e d

A u gu st

1929

v a r io u s

ch an ges

has

b itu m in o u s

in d u s tr ia l

season al

18

car

cen t— a n d

per

1932,

T ru ck

p assen ger

Aug.

of
of

th a n

th e

to

b e tw e e n

e x ten t
fr o m

to

1929

w a s u n c h a n g e d in A u g u s t a t 1 0 7 p e r c e n t o f th e

by

ous

p r a c t ic a lly
fr o m

le s s

1932— 71

O n th e o th e r h a n d , a u to ­

fu r th e r

a d ju s t e d

u s u a l s e a s o n a l r is e .

b la s t

th e

e le c tr ic

to

to

m od el ch an geovers.

s e a s o n a lly

1 9 2 3 -2 5
th e

fo r

d e c lin e d

m ills

S ep tem b er;

s lig h t ly ;

c o a l o u t p u t ro s e s u b s t a n t ia lly .
m o b ile

t e x t ile

d u r in g

r is e n

C o m p a r is o n s

o p e r a t io n s w e r e e s tim a te d a t a b o u t 75 p e r c e n t o f c a p a c ­
to

1929

d e c lin e
in

som ew hat

of

p ast

recovery
fo u r

p r o d u c tio n

pas­

fir s t e ig h t m o n th s

of

72
134
70
116
99

93
103
56
98
98

105
113
61
119
113

77
68
71
82

84
89
78
83

89
98
57
93

96
102

36
59
68
118r

55
83
74
118r

58
94
71
153r

61

106

118p
67
134
112p

*89

Miscellaneous

in

years.
of

Foods and Tobacco Products
Meat packing.................................................
W heat flour....................................................
Refined sugar deliveries..............................
T obacco products..........................................

94p

Newsprint p a p er...........................................
Machine toolsr...............................................

p Prelim
inary

rR
evised

* For qu
arter en
ded

72p
120r

FEDERAL RESERVE AGENT AT NEW YORK

79

Indexes o f Business A c tiv ity
D u r in g

th e fir s t th r e e w e e k s o f

o f m e r c h a n d is e
roa d s

show ed

p o r tio n s

an

and

a d ju s t m e n t
upw ard

and

ad van ce

rea ch ed

s in c e

S e p te m b e r , s h ip m e n ts

m is c e lla n e o u s
th e

th e

m ovem en t,

of

fr e ig h t

m ore

th a n

h ig h e s t

sum m er

w h ic h

le v e l

of

has

over

r a il­
p ro­

a fte r

season al

The

p resen t

1931.

been

th e

u sual

th e

in

p rogress

s in c e

F e b r u a r y , h as b e en a b o u t 10 p e r ce n t m o re th a n th e u s u a l
s e a s o n a l in cr e a s e .
m is c e lla n e o u s

The

car

p r e s e n t le v e l o f m e r c h a n d is e a n d

lo a d in g s ,

w h ile

o n ly

a b o u t tw o -th ir d s

t h a t o f 1 9 2 9 is 4 0 p e r c e n t a b o v e t h e M a r c h 1 9 3 3 l o w p o i n t .
A n

in c r e a s e

a ls o

show n

r a ilr o a d s

fo r
th e

a
to

fa ll

tard ed

m ore

th e

d u r in g

fo llo w in g
rep orted

of

in

th e

d e c lin e
have

fir s t
in

been

m e r c h a n d is e ,
r e t a il tr a d e

cou n try

th a n

seasonal

p r o p o r tio n s

of

fr e ig h t

m ovem ent

b u lk

th ree

w eeks

A u g u st.

by

c o n tin u e d

covered

by

th e

w e e k ly

tra d e

in c r e a s e d
w a rm

s o m e w h a t, a lth o u g h

th e

S ep tem b er,

W h o le s a le

a c c e le r a te d
but

of

w as

over

w as

dem and

w ea th er

re­

m o s t s e c t io n s

su rvey

of

th e

1929

of

1930

1931

1932

1933

1934

1935

1936

Average Daily Value of Residential Building Contracts in 37 States,
Adjusted for Seasonal Variation (Based on F. W . Dodge Corporation
figures; preliminary data for first three weeks of September)

D e­

p a r t m e n t o f C o m m e r c e c o n t in u e d t o r e p o r t a t le a s t s m a ll
a d v a n c e s in
yea r.
th e

s a le s o v e r t h e

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

R e p o r t s t o th is b a n k

N ew

Y ork

S ep tem b er

on

M e tr o p o lita n

show ed

s a le s

p e r io d s

d e p a rtm e n t sto re
a rea

s lig h tly

in

th e

fir s t

s m a lle r

th a n

o f la s t
s a le s in
h a lf
a

of

year

ago, h ow ever.

a p a rtm e n t
in c r e a s e
o ffs e t

h ou se

in

by

a

s m a ll

f o r A u g u s t a p p e a r b e lo w .

(Adjusted for seasonal variations, for usual year to year growth,
and where necessary for price changes)
1935

oth er
fo r

h o u s in g

heavy

decrease

in

o f n o n r e s id e n t ia l b u ild in g .
1935,

I n d e x e s o f b u s in e s s a c t iv it y

and

co n tra cts

a ll

tered

s iz a b le

show n
2 %

of

in

th e

m a jo r

p r o je c t s .

co n tra cts

In

fo r

of

w ith

w h ic h

w as

A u gu st
b e in g

a p p r o x im a te ly

t im e s la r g e r , a n d t h e t o t a l o f a ll c o n t r a c t s w a s m o r e

F o r th e 37 S ta te s c o v e r e d b y th e F . W . D o d g e
June

r e g is ­

g a in

th a n d o u b le th e v o lu m e o f a y e a r a g o .

1936

Aug.

w as
ty p es

b u ild in g

m o st o u ts ta n d in g

r e s id e n t ia l b u ild in g

s lig h t

w ork
oth er

c o m p a r is o n

c la s s ific a t io n s

a d v a n ce s, th e

A

e n g in e e r in g

July

Aug.

r a t io n

c o m p le te

rep ort,

to ta l

co n tra cts

in

C orpo­

A u gu st

a p p r o x im a t e ly 7 p e r c e n t lo w e r th a n in J u ly .

w ere

C on tra cts

Primary Distribution
Car loadings, merchandise and m isc.r. . .
Car loadings, otherr.....................................
E xp orts...........................................................
Im ports...........................................................

62r
61r
48
66

71r
76 r
53
80

72 r
80r
51
81

72 r
77 r
51 p
74 p

Distribution to Consumer
Department store sales, U. S .r .................
Department store sales, 2nd D is t............
Chain grocery salesr....................................
Other chain store salesr..............................
Mail order house salesr...............................
Advertising.....................................................
New passenger car registrationsr..............
Gasoline consum ption..................................

82r
70
68r
89r
77 r
60
79r
85

87 r
74
71 r
99r
98r
65
lOlr
87

88r
73
73r
95r
91r
65
97 p
92

90 r
72
72r
96r
92r
65
90p

63
45

67
43

65
41

65p
39

m en ts.

T h e fig u r e f o r A u g u s t 1 9 3 6 , d u e to th e in c lu s io n

of

F ed eral

67

73

71

70

rea ch ed

45
55
83
36
59

44
54
88
43
57

40
54
89
55
61

40
52
90p
57
56

a lth o u g h

146
187
141

152
191
142

154
193r
143

155p
194p
142p

General Business Activity
Bank debits, outside New York C it y ... .
Bank debits, New York C ity.....................
V elocity of demand deposits, outside New
York C it y ...................................................
Velocity of demand deposits, New York
C it y ..............................................................
New life insurance sales..............................
Factory employment, United States........
Building contracts........................................
New corporations formed in N. Y . S tate. .
General price level*......................................
Composite index of w ages*........................
Cost of livin g *...............................................

f o r h e a v y e n g in e e r in g
w ork

w ere

r Revised

to

th e

in c lu s io n

The
1934

lo w

each
th e

A

c o n tin u e d

A u gu st
a rea

in

w as

th e

a d va n ce
N ew

in d ic a te d

in

Y ork

by

an

b u ild in g
and

a c t iv ity

N orth ern

in c r e a s e

of

16

d u r in g

N ew
per

F .
fo r

W .
by

w h ic h

D odge
a

The

C o r p o r a tio n

d a ta ,

g a in

in c lu d e d

of

60

per

several




cen t

P u b lic

in c r e a s e ,
w as
in

la r g e ly

r e s id e n t ia l

W ork s

a c c o m p a n y in g
fo r

h o u s in g

of

th e

u sual

s in c e

fig u r e s
som e

d ia g r a m ,

w h ic h

season al

r e fe r r e d
th e

fir s t

r e c e s s io n , th e

m ove­

to

D ecem ber

fo r

th e

th rou gh

r e s id e n t ia l c o n tr a c ts

p r o je c t s

p o in t

fr o m

1932

above,

1929,
th ree

and

w eeks

a verage

le v e l

T h e d a ta f o r th e fir s t th r e e w e e k s o f S e p t e m b e r s h o w e d
a

d e c lin e

in

w orks

and
and

n o n r e s id e n tia l

u t ilit ie s ,
an

th e

b u ild in g

co n tra ry

in c r e a s e

in

to

th e

heavy

oth er
usual

th a n

p u b lic

season al ten ­

e n g in e e r in g

w ork

of

u s u a l se a so n a l p r o p o r tio n s .

E m p lo y m e n t

a n d

P a y r o lls

J ersey

cen t

sh ow n

fr o m

r e c o v e r y in r e s id e n t ia l b u ild in g .

over

N ew Y ork

S ta te f a c t o r y e m p lo y m e n t a d v a n c e d a b o u t 1

fr o m

years.

con ­

p r o je c ts .
b u ild in g

p e r io d

v o lu m e

a d ju s t e d

in d ic a te

to ta l

fiv e

r e s id e n t ia l

o f r e c e n t m o n t h s h a s b e e n s u c h as to in d ic a t e s u b s t a n t ia l

p e r ce n t, a fte r

n e a r ly

th e

p r e lim in a r y

S ep tem b er

th e

d a ily

h ig h e s t

J u l y in b u ild in g a n d e n g in e e r in g c o n t r a c t s t o th e la r g e s t
in

of

by

a verage

th e

r e s id e n t ia l

le v e l

m on th ,

le s s t h a n

B u ild in g

but

F e d e r a l h o u s in g
in

is i n d i c a t e d

sh ow s th e

of

of

recovery

e x tr e m e ly

in

* 1913 ave ra ge* 100. N ot adjusted for trend.

o th e r ty p e s o f n o n r e s id e n tia l
s m a lle r ,

tr a c ts s h o w e d a g a in o f n e a r ly 4 0 p e r c e n t o w in g la r g e ly

d en cy

p Preliminary

and

c o n s id e r a b ly

by

th e

a ccou n ted
co n tra cts

A d m in is tr a tio n

th e

a llo w a n c e

m id d le

of

J u ly

fo r
to

th e
th e

u su a l season al ch an ge,
m id d le

of

A u g u st,

and

p a y r o l l s i n c r e a s e d n e a r l y 2 p e r c e n t m o r e t h a n is u s u a l a t
th is

tim e

fa c to r y

of

th e

yea r.

e m p lo y m e n t

T h is
reach ed

b a n k 's
th e

a d ju s t e d
h ig h e s t

in d e x

le v e l

of

s in c e

MONTHLY REVIEW, OCTOBER 1, 1936

80
S ep tem b er
th e

1930

h ig h e s t

and

p o in t

th e

a d ju s t e d

s in c e

M ay

m ent w as rep orted

in

fic a tio n s

e x c e p tio n

m ost

w ith

th e

p ron ou n ced

p a y r o ll in d e x

1931.

a ll o f th e m a j o r

g a in

in

of

rose

In creased

th e

to

e m p lo y ­

in d u s t r ia l c la s s i­
fo o d

e m p lo y m e n t

grou p.

occu rred

The

in

th e

Y ork
to

Im p rovem en t

d ep a rtm en t

g a in s

in

over

a p p a r e l sto re s

in

th is

th a n

sto re s

tw o

show ed

years.

d is tr ic t

la s t y e a r , b u t t h a t w a s

O cto b e r

w ere
th e

th e

S a le s
7 .3

la r g e s t

of

th e

per

s m a lle s t

year

le a d in g

cen t

h ig h e r

in c r e a s e

s in c e

1935.

D e p a r t m e n t s to r e s to c k s o f m e r c h a n d is e o n h a n d w e r e

c lo t h in g in d u s t r y , w h e re th e n u m b e r o f w o r k e r s in c r e a s e d
at m o re th a n th e c u s to m a r y se a so n a l ra te .

S ta te

year

9 .8

per

c e n t h ig h e r th a n

la s t y e a r , th e

m o s t s u b s t a n t ia l

in p r i v a t e e m p lo y m e n t in t h is S t a t e is f u r t h e r e v i d e n c e d

in c r e a s e to b e s h o w n in o v e r t w o y e a r s .

in

c o lle c t io n s in A u g u s t w e r e a t th e s a m e r a t e a s la s t y e a r ,

a

c o m b in e d

m ent

report

S e r v ic e

w h ic h

and

in d ic a te s

of

th e

th e

N ew

N a tio n a l

th a t

th e

tw o

Y ork

S ta te

s e r v ic e s

p la c e d

m a te ly 38 p e r ce n t m o r e w o r k e r s in p r iv a t e
d u r in g A u g u s t th a n in th e sa m e m o n th
F or

th e

e n tir e

in d u s t r ie s
Labor

cov ered

in c r e a s e d

p e r io d

fr o m
r a is in g

s in c e

J u ly

fa c tu r in g

by

fo r

J u ly

m ent ad van ced
t io n s ,

cou n try

15

by

to

The

covered

by

in

m on th

F a ctory

in

to

th e

of

in

th e

e m p lo y m e n t

D ep a rtm en t

p o in t

in

m anu­

of

71

of

th e

th e

L abor

90

rep ort­

T r a d e

of

th is

cou n try

p r e v io u s

m on th ,

w as

s u b s t a n t ia lly

e x p o rts

a n d im p o r t s t o $ 1 9 5 ,0 0 0 ,0 0 0 .
of

4

per

cen t

over

a year

th e

a m o u n tin g

to

sam e

as

in

w h ile

1935

1936

+ 1 1 .0
+ 14.7
— 1.4
+ 0 .8
+ 8 .6
+ 1 2 .1
— 4 .0

42.7
45.6
42.1
33.4
34.8
39.3
29.6

41.1
46.4
46.6
35.3
36.4
40.8
30.4

All department stores........

+ 2.

+ 9.8

39.9

39.9

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

+ 7 .3

+ 7 .6

34.9

34.6

w h o le s a le

fir m s

Net
New Y o r k ......................................
Buffalo............................................
Rochester.......................................
Syracuse.........................................
Northern New Jersey.................
Bridgeport......................................
Elsewhere......................................
Northern New York S ta te .. .
Southern New York State. . .
Central New York State........
Hudson River Valley District
Capital D istrict........................
Westchester and Stamford. . .
Niagara Falls............................

$ 1 7 8 ,0 0 0 ,0 0 0

im p o r ts

g a in e d

Per cent of
accounts
outstanding
July 31
collected in
August

+ 0 .2
+ 14.1
+ 1 3 .4
+ 2 .4
+ 6 .1
+ 1 0 .1
+ 4 .8
+ 9 .4
— 2 .1
+ 5 .9
+ 6 .6
+ 7 .9
+ 0 .3
+ 1 3 .3

Locality

E x p o r t s s h o w e d a n in c r e a s e

ago

lo w e r .

Stock
on hand
end of
month

e m p lo y ­

h ig h e s t

d is tr ib u te d ,

s lig h t ly

Per cent
change
August 1936
compared with
August 1935

th e

D ep a rtm en t

D u r in g A u g u s t th e a m o u n t o f th e fo r e ig n m e r c h a n d is e
tra d e

c o lle c t io n s w e r e

e m p lo y m e n t

in g m o re w o r k e r s in A u g u s t th a n in J u ly .
F o r e ig n

a p p a r e l sto re

th e u s u a l sea so n a l p r o p o r ­
in d e x

w e ll

th e

th e
15.

w h ile

a p p r o x i­

la s t y e a r .

c o n s e c u tiv e

in c r e a s e
w as

S e r v ic e

e m p lo y m e n t

to

A u gu st

a d ju s t e d

in d u s tr ie s

in d u s tr ie s

s ix th

m o re th a n

th e

1930.

p r iv a te

rep orts

th e

E m p lo y ­

R e -e m p lo y m e n t

D e p a r tm e n t s to re

15

p e r c e n t ; b o th e x p o r ts a n d im p o r ts w e r e la r g e r in v a lu e
th a n

in

th e

1930.
w as

The
th e

c o r r e s p o n d in g
$ 1 7 ,0 0 0 ,0 0 0

s ix th

com p ares

im p o r t

w ith

an

1935.

The

m on th s

of

year

an

export

p e r io d

excess

b a la n c e

of

to

occu r

year
fo r

th is

yea r,

in

A u gu st

fir s t e ig h t

s m a lle r

in c r e a s e

as

in d iv id u a l

th e

a g a in s t

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

A u gu st
to

F or

th e

p o r tin g
N ew

Y ork

s p o n d in g

w ere

N ew

a year

cu rred
In

in

w h ic h

cen t

lo w e r

ago,

and

in

s a le s

J ersey

to ta l

of

th ose

rep orted

th e

2 .6

is

Y ork

of

m ore

th e

Y ork
fo r d
s a le s

fa v o r a b le

B u ffa lo ,

S ta te , N ia g a r a
sto re s s h o w e d
of

th e

R o ch e ste r,




have

be

lin e s

th a n

ago

in

in

r e p o r tin g
per

th a n

in

J u ly .

rep orted
th e

several

s u b s t a n t ia l.

c e n t h ig h e r

ty p es

D ru g

A lt h o u g h

s m a lle r

p r e v io u s
of

th a n

th e

w h o le s a le

fir m s

show ed

of

in

s a le s

g a in s

tra d e
a

th is

m ost

in c r e a s e s

m on th ,

in

la s t y e a r , a
th e
in

over

a

c o n tin u e d

s lig h t ly

la r g e r

in

and

d e c lin e

c o n s id e r a b ly

of

s ilk

N a tio n a l

lo w e r

th a n

goods,

fo r

one

la s t

la s t

N ew

m u ch

d a ily

le s s

s a le s

a vera ge

in

s a le s

C en tra l N ew

s in c e

year,

of

on

a

T e x tile s ,

fo llo w in g

fo u r

m o n t h s in w h ic h in c r e a s e s o c c u r r e d .

Percentage
change
August 1936
compared with
August 1935

and

S ta m ­

M ay, and

N orth ern

Comm odity

le s s

N orth ern

W estch ester

rep orted

F e d e r a tio n

d e p a rtm en t

w ere

D a ily

and

S a le s
th e

oc­

F e d e r a l R e s e r v e D is tr ic t

B r id g e p o r t,

by

th e

s in c e

average

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

w ere

d e c lin e .

b a s is

s a le s

in c r e a s e

and

w h ic h

s m a lle r

yard age

s to re s.

r e p o r tin g

C it y

a

occu rred

s to r e s in

in c r e a s e

C a p it a l D is tr ic t,

F a lls ,

th e

usual

o ffs e ttin g

c o m p a r is o n s .

S yracu se,

corre­

th e

s m a lle s t

but

m o st o th e r p a rts o f th e S e c o n d
m ade

of

th e

a llo w a n c e

th e

J u ly ,

re­

in

to

an

th e
a rea

p e r c e n t h ig h e r th a n

in c r e a s e s

in

of

th a n

B r o o k ly n

m a k in g

year

show ed

had

th a n

and

S a le s o f N e w

store s

appears

a m ore

a fte r

th is

th a n
le s s

T h e r e p o r tin g

D is tr ic t

s a le s

s a le s

M e tr o p o lita n

per

S e p tem b er.

even

day

to ta l

th e

year

a

ago, but

D ecem ber.

th a n

in

th is d is t r ic t w e r e

s h o p p in g
Jersey

1 .1

th e
1 0 .6

i n c r e a s e in s a le s t h a n in J u l y , a n d s h o e c o n c e r n s r e c o r d e d

S ep tem b er

sto re s

th e M a n h a tta n

A u g u st,

s to r e s in
year,

of

e x p a n s io n

A u g u s t to

N orth ern
over

h a lf

p e r io d

seasonal
fr o m

fir s t

T r a d e

d e p a rtm en t

of

a veraged

year

S to re

s a le s

d is tr ic t

o f la s t y e a r .

D e p a rtm e n t

T ra d e

in

fo r
th e

W h o le s a le

and

$ 3 ,0 0 0 ,0 0 0

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

$ 2 9 ,0 0 0 ,0 0 0

s in c e

A u gu st

of

im p o r ts
to

any

im p o r ts

b a la n c e

a m ou n ts

of

of

of

b a la n c e

export

A u gu st

th is

m on th

excess

N ew

Groceries.......................
M en’s clothing.............
Cotton go o d s...............
R ayon and silk g o o d s.
Shoes..............................
Drugs.............................
H ardware......................
Stationery.....................
P aper.............................
D iam onds.....................
Jew elry..........................
Weighted average.

Net
sales

Stock
end of
month

+ 9 .4
— 1 .8
+ 1 4 .9
+ 8 .2
— 14.4*
— 3 .0
+ 1 5 .2
+ 2 2 .5
+ 12.9
+ 9 .6
+ 4 .9
+ 2 .5
— 2 .2
+ 2 4 .4
+ 2 4 .7 + 112.0
+ 10 .i

Per cent of
accounts
outstanding
July 31
collected in
August

1935

1936

9 4.6
55.1
43.9
6 2.4
33.9
25.3
46.3
55.9
43.9
22.6

90.3
46.4
42.9
6 4.4
3 8.3
27.8
44.6
58.8
58.8
} 2 2.3

59.2

57.3

Q
uantity figu reported by th N al F
res
e ation ederationof T
extiles, Incorporated
not included in w ted average for total w olesale trade.
eigh
h

FEDERAL RESERVE BANK OF NEW YORK
MONTHLY REVIEW, OCTOBER 1, 1936
B u s in e s s C o n d it io n s in t h e U n it e d S ta t e s

(Summarized by the Board of Governors of the Federal Reserve System)

I N DUSTRIAL

activity increased seasonally in August, and there was a sub­
stantial increase in factory employment and payrolls. Commodity prices,
which had advanced for three months, showed little change after the middle of
August.
P r o d u c t io n

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

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

and

E

m ploym ent

The Board’s index o f industrial production, which makes allowance for
usual seasonal movements, remained unchanged in August at 107 per cent of
the 1923-1925 average. Output o f steel increased by more than the seasonal
amount and the higher level was maintained in the first three weeks o f Sep­
tember. Production of automobiles was sharply reduced as plants were closed
for inventory taking and for mechanical changes in connection with the intro­
duction o f new models. Output o f nondurable manufactures increased further
in August, reflecting chiefly continued expansion in activity at textile plants
and shoe factories. At bituminous coal mines output increased less than is
usual at this season and at anthracite mines production declined. Output of
petroleum showed an increase.
Factory employment rose further between the middle of July and the
middle of August by an amount larger than is usual at this season. There were
substantial increases in working forces at establishments producing textiles
and wearing apparel and smaller increases in most other lines, partly offset in
the total by a decline in employment in the automobile industry. Factory pay­
rolls increased.
Value o f construction contracts, which had increased sharply in July, de­
clined somewhat in August, according to the figures of the F. W. Dodge Cor­
poration. The value of nonresidential projects was smaller than in July but
larger than in other recent months. Residential building increased consider­
ably, reflecting a marked increase in contracts for apartments, several of
which were publicly financed projects. Awards for single-family houses, which
have accounted for most o f the increase in residential building during the past
year and a half, showed little change in August.
A

g r ic u l t u r e

Department o f Agriculture crop estimates based on September 1 conditions
were about the same as the estimates made a month earlier, except for a sharp
decline in prospects for cotton. Prospective output of leading crops, with the
exception of cotton and winter wheat, is considerably smaller than last year,
but, in comparison with the drought year 1934, it is larger, except for com
and potatoes.
D is t r ib u t io n

Freight car loadings o f most classes of commodities showed about the
usual seasonal increase from July to August. Shipments o f grain, however,
declined sharply and the increase in total loadings was less than seasonal.
Department store sales increased by less than the usual amount and the Board *s
seasonally adjusted index was 86 per cent of the 1923-1925 average as com­
pared with 91 per cent in July and 87 per cent in June.
C o m m o d it y P r ic e s

Wholesale Price Index of United States Bureau
of Labor Statistics (1926 average =
100 per cent)

Wholesale commodity prices showed little change between the middle of
August and the third week o f September, following three months o f advance.
Prices o f steel scrap and chemicals and drugs continued to advance and there
were also increases in the prices o f hides and nonferrous metals. There was a
seasonal decline in hog prices. Cotton, which advanced in price early this
month at the time o f the official crop report, declined after the middle o f the
month.
B a n k C r e d it

(Latest figures are for Septem 16)
ber




Demand deposits of reporting member banks in leading cities increased
somewhat further in the four weeks ended September 16, reflecting gold im­
ports, Treasury expenditures, and an increase in bank loans. Growth in loans
was principally in so-called “ other” loans, which include loans to customers
for agricultural, commercial, and industrial purposes. These loans are now at
the highest level since early in 1933. Loans to security dealers showed an
increase, as is usual, prior to flotation of the new issue of Treasury bonds on
September 15. A part o f the new Treasury issue was purchased by reporting
banks, principally by drawing upon their balances with the Reserve Banks.
Largely as a consequence of payments to the Treasury excess reserves of
member banks showed a decrease o f $280,000,000 in the week ended September
16. This decline followed an increase o f nearly $200,000,000 in the preceding
three weeks, when the Treasury was reducing its deposits with the Reserve
Banks. Since early in August there has been a renewed inflow o f gold and
the country’s monetary gold stock has increased by about $100,000,000 in the
past month.