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MONTHLY REVIEW Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT ' VoL. 22, No. 9 FEDERAL RESERVE BANK OF KANSAS CITY AUGUST 30, 1937 Business in the Tenth Federal Reserve District JULY 1937 COMPARED WITH JULY 1936 _______ l___ _ : ·---------:' KANSA -• % INCREASE % DECREASE 40 30 20 10 10 20 30 COLO. I I 40 ■ Denver• I BUSINESS INDICATORS I I % --• • DECREASE 40 30 20 % 10 ■ F. R. Bk. Clearings. -■ __Mem. Bk. Loans _. ... Mem. Bk. Invest ..... ■ ...Demand Dep~sits ... I _ _Li!e Ins. Salee_ Trade __ .Wholesale Sales._. I High temperatures and dry weather have caused a marked deterioration in the condition of corn and final yields will be app1·eciably under August 1 estimates. Prices of corn and wheat are lower and the general farm situation is somewhat less favorable than a month ago. A large amount of wheat is coming to the market, but supplies of live stock for slaughter are the smallest in years. Flour and petroleum production continues large. Department store sales are 5 % larger than a year ago, but higher retail prices more than account for the larger sales. Wholesale sales, despite higher prices, are lower than a year ago. Demand deposits are 4 % and bank loans nearly 20 % higher than a year ago. Bank investments are lower. Money in circulation continues to rise and payments by check are 16 % greater than a year ago. ■ Marketing& ____ ,Wheat.____ ____ Corn _ _ __ _____ oats. _ __ ___ 1• i-(,7 -59 •• _cattle _ __ ____ Hogs ____ - ______ Sheep .. _. ___ I PratlHction ■ ·----Flour______ ...Cattle Slaughter.__ .....Calf Slaughter __ ___ Hog Slaughter____ .. Sheep Slaughter_ ...Crude Petroleum __ I •-■ .. Bituminous CoaL. +56 Zinc Ore Shipments Lead Ore Shipments _, ____Total Awards.-.. I ... Value of Permits __ -,.--· --• I _____ Calves ___ I • • Construction ____ Res. A wards ____ • ltliacellaneou, - I ■ ✓ I ......Lumber Sales._ .. -81 -fo1 ■ ...Dept. Store Sales .... i-52 • •• • ····-·Retail Sales. _. •• INCREASE 10 20 30 40 ··-··Bank Debits ..- .. Iii KANS. ' ·-··-··-··-··-··~-l--- Financial 7 MOS. 1937 COMPARED WITH 7 MOS. 1936 114 ··----Rainfall. ____ Cash Farm Income.* ____Employment __ .......... Pay Rolls _______ •For previous month • ■ • 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Member Bank Operations At the middle of August loans and investments of reporting memb~r banks 'in the Tenth District .~ere at the highest point of the year. The increase from . the year's low in early June has resulted from a rather substantial growth in .the. volume o! commercial, industrial, and agricultural loans and from a further increase in holdings of Government obligations during the six weeks ended August 18~ The rising volume of loans reflects to a large extent grain financing incident to heavy wheat marketings. Loans are now nearly 20 per cent larger but investments are · slightly smaller than a year ago because of the decline in holdings of "other" securities. Demand and Government deposits rose between July 7 and August 18 but time deposits are smaller. Interbank deposits are also larger but are less than at the middle of July. Correspondent balances with domestic banks have declined and are sharply lower than a year ago. Reserve balances at this bank continue to increase. Principal items of condition of 51 member banks: Change from Aug. 18 July 7 Aug. 19 1937 1937 1936 · (In thousands of dollars) Loans and investments-totaL ___ 728,995 +39,357 +41,618 Loans-total ---------------------------------- 290,080 +31,480 +47,717 ' Coml., indust., agric. __________________ 182,206 +23,743 * Open market paper____________________ 26,561 +6,037 * To security brokers and dealers 4,363 +455 + 10 Othertopurchaseorcarrysecur. 14,199 -239 * Real estate loans________________________ 19,605 +304 +2,109 Loans to banks_ __ _ 899 -156 -2,147 All other loans____________________________ 42,247 +1,336 * Investments-total ________________________ 438,915 + 7,877 -6,099 U. S. Govt. dir'ect obligations _ 266,729 +7,307 +5,758 Oblig. guar. by U.S. Govt.________ 45,849 +2,123 -2,884 Other securities ____ _ __ 126,337 -1,553 -8,973 Reserve with F. R. Bank ______________ 177,289 +7,346 +29,363 Balances with domestic banks______ 201,183 -2,282 -85,893 Demand deposits-adjusted ________ 505,958 + 27,937 + 19,027 Time deposits -------------------------------- 143,976 -519 -2,445 U. S. Govt. deposits_________ _____________ 9,504 +1,816 -12,858 Interbank deposits ___________________ __ 389,620 + 14,612 -21,919 *Comparable figures not available. Reserve Bank Operations Federal Reserve note circulation of this bank continues to rise. From this year's low of slightly less than 158 million in the latter part of March it has risen to about 167½ million in the forepart of August. There was a small decline in the week ended August 18, not unusual for that time of the month, but circulation is still bette~ than 14¼ million higher than a year ago and about 14¾ million above that at the high point in March, 1933. Better crops, an early volume marketing of wheat at good prices, and consequent improvement in trade are factors affecting the increased demand for currency. Principal items of condition of the Federal Reserve Bank of Kansas City and branches: Change from Aug.18 July 7 Aug.19 1937 1937 1936 ( In thousands of dollars) Total reserves ------------------------------- 314,104 + 17,220 + 39,172 ~ills discounted -----c- ____ ___ __ _: ______ ____ __ _ 176 + 86 + 97 Bills purchased -----------------------------87 -9 Zero Industrial advances ______________________ 602 -22 -305 Commit. to make indust. adv. ______ 122 -3 -272 U. S. Government securities ________ 124,128 Zero +1,201 Total resources ------------------------------ 483,311 + 15,870 + 46,918 F. R. notes in circulation ______________ 167,273 +1,865 +14,284 Member bank reserve deposits ___ 256,024 +10,610 +34,512 · Dollar volume of check collections continued to increase by more than the usual amount during July. Dollar volume for July was 8 per cent greater and for the first seven months of this year 5 per cent greater than in the same periods ·of last year. Check collections thro.u gh this bank and branches: ITEMS 1937 July ---------------------- 6,376 June ---------------------- 6,293 Seven months ______ 42,085 AMOUNT 1937 1936 ~-(In thousands) 6,296 $1,171,585 6,559 1,021,409 41,403 7,063,764 1936 $1,081,898 1,248,335 6,725,647 Bank Debits Debits to individual accounts by banks in reporting centers rose sharply in July, showing an increase of 16 per cent over a year ago. This increase compares with an average gain of about 15 per cent for the first seven months of the year. Payments by check in thirty cities: Albuquerque, N. Mex. ___ _ Atchison, Kans. ______________ Bartlesville, Okla. _________ _ Casper, Wyo. __________________ Cheyenne, Wyo. ______________ Colorado Springs, Colo. __ Denver, Colo. __________ _______ _ Emporia, Kans. ----------~--Enid, Okla. _____________________ _ Fremont, Nebr. ________ _____ _ Grand Junction, Colo. ___ _ Guthrie, Okla. _________________ _ Hutchinson, Kans. _________ _ Independence, Kans. ______ Joplin, Mo. _______ ___________ _ Kansas City, Kans. ___ __ _ Kansas City, Mo. ___________ Lawrence, Kans. _________ _ Lincoln, Nebr. _______________ _ Muskogee, Okla. __________ _ Oklahoma City, Okla. _____ Okmulgee, Okla. __________ _ Omaha, Nebr. ________________ _ Pittsburg, Kans. ___________ _ Pueblo, Colo. ___________________ _ Salina, Kans. _________________ _ St. Joseph, Mo. __ ____________ ,_ Topeka, Kans. _________________ _ Tulsa, Okla. ___________________ _ Wichita, Kans. __ . ____________ _ Change from July 1937 June 1937 July 1936 (In thousands of dollars) 16,156 +808 +3,170 5,773 +2,158 -76 31,019 -2,659 +5,614 6,680 +306 +639 9,672 + 760 + 1,919 16,330 + 880 -45 182,774 +10,730 +19,902 4,923 + 1,859 +641 27,664 + 12,971 + 10,524 3,238 + 543 + 253 3,977 +so + 490 2,177 +242 +372 27,189 + 11,524 + 1,104 3,800 + 842 + 803 10,192 + 53 + 525 17,067 + 963 + 1,544 477,212 + 124,829 + 94,848 5,281 + 1,323 +972 30,443 + 1,879 - 227 8,584 + 600 -382 129,737 +9,306 +29,915 2,756 -225 -148 166,718 +12,580 -14,482 4,090 +40 -56 20,284 +3,145 +2,297 25,647 + 11,696 +4,969 33,748 +8,452 -2,063 26,029 +8,341 +4,174 166,997 -297 +34,823 72,390 + 13,166 + 9,906 District, 30 cities ____________ 1,538,547 United States, 141 cities 36,903,337 +236,885 +211,924 +450,507 +2,087,609 FEDERAL RESERVE BANK OF KANSAS CITY 3 -'· ========================================- Trade DEPARTMENT STORE SALES Dollar volume of sales at reporting department stores in this District declined from June to July by about 19 per cent, reflecting the usual summer lull. , July sales were about 5 per cent greater than a year ago but retail trade in July last year was adversely affected by intensely hot weather. So far this year, · dollar volume shows a gain over last year of about 6 per cent. Retail prices continue to rise, according to the Fairchild Index, but at a slower rate than in recent months. While still 17 per cent below the · 1929 level, ret,ail prices are about 9 per cent higher than at this time last year and are about 39 per cent above the 1933 low. Stocks of merchandise declined seasonally during July but continue about 9 per cent above the level of a year ago. Collections on open accounts averaged 44.6 per cent of receivables in July, 44.0 per cent in June, and 45.0 per cent in July of ~ast year. Installment collections averaged 14.0 per cent in July, 14.5 per cent in June, and 14.2 per cent in July a year ago. Department store sales and stocks in leading cities:_ SALES STOCKS July '37 7 Mos. '37 July 31, '37 · comp. to No.of comp. to comp. to Stores July'36 7Mos. '36 Jun.30, '37 Jul.31, '36 (Per cent increase or decrease) Denver ____________ 4 +1.6 +8.o +0.1 +14.7 Kansas City____ 4 +7.2 +6.2 -7.9 +2.5 Oklahoma City 3 +9.5 +2.9 -10.1 +7.8 Omaha ____________ 3 - 3.6 - 2.1 -9.2 +8.4 Tulsa ______________ 4 +7.8 +9.6 -8.1 +6.3 Wichita __________ 3 +16.6 +14.5 - 10.1 +16.7 +6.8 +5.6 -6.3 +7.4 Other cities ·----- 24 District __________ 45 +5.0 +6.2 -5.8 +8.9 month ago, while prices of other commodities are higher. Wholesale sales and collections reported by the De- , partment of Commerce: SALES . July '37 7 Mos. '37 COLLECTIONS* No.of comp. to comp. to July June July Firms July '36 7 Mos. '36 1937 . 1937 1936 (Per cent change) (Median percentages) Drugs _____________ 7 -1.4 +2.9 82.6 81.8 95.4 Dry goods________ 3 + 18.8 + 16.8 44.0 44. 7 44.4 Furniture ________ 3 + 15.4 + 18.9 45.0 52.0 49.0 Groceries ________ 11 -8.3 +6.7 100.0 105.7 108.0 Hardware ________ 6 -1.7 --0.3 55.3 55.3 55.6 Paper ______________ 4 +10.4 +9.2 61.3 64.1 67.4 All other lines__ 18 +6.0 +9.1 68.5 61.7 74.4 District ____________ 52 -0.6 +6.9 70.0 69.1 74.0 *Collections on amounts receivable at beginning of month. Crops Corn prospects, which are less favorable in this · District than in the country as a whole, tend to decline. The crop went back somewhat in Nebraska during July and growing conditions since August 1 indicate a final yield materially below the August 1 estimate. In contrast with prospective yields above the average in eastern Corn Belt states and in the country as a whole, the indicated yield in the western tier of Corn Belt states is generally below average. Corn estimates of the Department of Agriculture: Indicated Final Final August 1 July 1 1936 1935 ( In thousands of bushels) Colo. ______________ 15,492 15,492 11,169 10,761 Kans. ___________ _ 54,876 53,262 11,036 39,420 40,032 72,890 Mo. --------------- 133,516 126,610 Nebr. ___________ _ 179,334 196,830 26,859 106,630 N. Mex. ________ 3,220 3,220 2,185 2,700 Okla. ______________ · 29,785 32.,338 11,772 25,872 Wyo, _ __ 3,794 2,981 984 2,260 Aver. '28-'32 20,847 126,756 146,489 ' 223,843 3,528 51,842 2,341 WHOLESALE SALES The value of wholesale sales in July was, for the first time this year, under that in the corresponding month a year ago. Grocery sales showed a large decrease, accounted for in part by the speculative buying which occurred in July of last year. For the first seven months of the year, wholesale sales show an increase of nearly 7 per cent over the comparable period in 1936. July sales were also smaller than in the preceqing month, sales of drugs declining 8, furniture about 40, hard~are 4, and total sales about 4 per cent. Sales of dry goods were 10, groceries 2, and paper about 7 per cent larger than in June. The recent rise in the general level of wholesale prices was checked in the latter part of July, subsequent declines carrying prices in the first week of August to a point slightly lower than that early in July but still about 8 per cent above a year ago. Prices of farm products, foods, textile products,· building materials, and chemicals and drugs are lower than a 7 States ________ 420,017 u. s. ______________2,658,748 430,733 104,037 260,533 575,646 2,571,851 1,529,327 2,296,669 2,554,772 Despite rust damage, the winter wheat cro1J in Kansas, Nebraska, and Missouri turned out even better than expected earlier. As a result, production in the District is about equal to the average crop harvested from 1928 to 1932. Preparation of seed beds for wheat is well advanced in Kansas and has begun in Nebraska. Present indications are for another large wheat acreage this fall. The general moisture situation as affecting late crops is now measurably less favorable than at the beginning of August following the late July rains. Except in Wyoming, northern Missouri, and parts of central and southe,a stern Kansas, July rainfall was less than normal and dryness continued into the third week of August. Moreover, the lack of moisture was aggravated by abnormally high temperatures and by hot winds over considerable portions of the District. REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 4 Rainfall as reported by the Weather Bureau: 7 Mos.1937 July 1937 Total Normal Total Normal - - ( I n inch~ COLORADO Denver ___________________ _ 7.79 9.30 .95 1.68 19.18 11.63 8.70 2.99 Leadville ---------------4.28 7.68 .68 1.94 Pueblo Lamar ____________________ .20 2.64 4.10 10.63 Garnett _________________ _ 3.21 3.84 .84 1.24 18.72 14.07 Steamboat Springs 3.57 1.72 KANSAS Topeka _ __ Iola ______________ Concordia _ __ Salina ------~-------------Wichita Hays _ __ Dodge City ___________ _ Elkhart Goodland _______________ _ 1.65 3.57 4.06 1.73 4.77 4.94 1.99 1.04 1.36 4.27 3.60 3.78 3.02 3.38 3.17 3.14 3.02 2.58 12.16 26.74 12.91 12.33 18.63 11.26 9.73 3.70 9.66 20.73 22.91 17.46 16.96 18.91 16.10 13.34 10.68 11.97 7.89 3.11 5.13 3.78 4.13 4.62 20.18 18.94 26.90 22.05 22.38 27.72 5.04 3.10 2.72 4.62 1.95 2.21 .32 1.08 3.64 3.86 3.68 3.66 3.10 2.74 1.98 3.01 16.90 13.96 13.39 16.63 11.87 9.10 7.14 6.61 17.34 17.49 18.06 16.67 12.88 12.66 11.12 12.76 .49 .71 2.03 2.77 2.38 1.39 8.14 10.74 5.21 10.33 7.94 4.94 2.47 1.10 .74 1.37 .61 1.24 .66 3.31 3.06 2.86 2.83 2.64 2.74 2.93 19.04 26.91 12.35 19.39 10.39 13.03 8.94 24.14 26.55 18.98 21.41 17.19 18.42 16.63 1.97 3.51 2.79 1.78 2.10 1.10 .69 1.22 8.86 12.01 13.29 11.99 10.21 9.86 8.64 10.64 MISSOURI St. Joseph ______________ Kansas City _________ _ Joplin ---------------------- NEBRASKA Omaha -------------------Lincoln _ _ __ Norfolk Grand Island _________ _ McCook -----------------North Platte __________ Bridgeport ______________ Valentine _____________ _ NF.W MEXICO Clayton __________________ Santa Fe _______________ _ Farmington __________ _ OKLAHOMA Tulsa _____________________ _ McAlester _____________ _ Oklahoma City _____ _ Pauls Valley ________ _ Hobart _ __ _ Enid _ _ _ Woodward _____________ _ WYOMING Cheyenne _______________ _ Casper ____________________ Lander ___________________ _ Sheridan ________________ Grain Marketing Wheat came to market in unusually large volume in July as the result of a combination of high prices and almost simultaneous maturity of the new crop over a wide area. Elevator stocks have increased rapidly and are much above a year ago. Receipts of oats and rye were also rather large for July but corn marketings are almost negligible, being only about one-seventh of their normal volume. Receipts of grain at five markets in the District: Wheat Hutchinson ____ Kansas City____ Omaha ____________ St. Joseph ______ Wichita __________ 7,966 48,066 11,686 8,389 9,952 July 1937 ________ 86,069 June 1937 ________ 21,881 July 1936 ________ 60,670 7 Mos. 1937 ____ 126,887 7 Mos. 1936 ___ 92,736 Corn Oats Rye Barley Kafir (In thousands of bushe~ - 1 1 3 276 396 28 67 46 248 628 178 88 43 304 17 21 1 4 17 3 571 1,461 3,033 10,861 26,126 1,346 696 2,826 7,912 9,148 224 11 64 402 415 180 263 286 1,048 1,686 60 66 146 449 875 The carryover of wheat in the United States on July 1 was estimated at about 90 million bushels as compared with about 136 million a year ago an,d 146 million two years ago. This situation, coupled with small world wheat stocks and the prospect this sea- · son for the smallest world supplies in ten years, has maintained prices above the level of a year ago or recent years. Cash corn prices are somewhat lower than a year ago but are about 40 cents above the December futures quotation. Cash offerings are well below current trade needs and elevator stocks are being rapidly depleted. Cash grain prices at the Kansas City market: No. No. No. No. No. No. Aug.14 1937 1 hd., dk. wheat, bu, ____ $1.10¼ 2 mixed corn, bu, __________ 1.07¼ 2 white oats, bu,____________ .29 2 rye, bu, ___________ .80 2 barley, bu. _________________ .62 2 white kafir, cwt,________ 1.35 July 31 1937 $1.17 .92½ .30 .81 .55 1.30 June 30 July 31 1937 1936 $1.18½ $1.16½ 1.24 ½ 1.09 ½ .47 .45 .90 .87 .72 .84 2.20 1.64 Live Stock MARKETINGS The movement of gr3:ss cattle to market which had started much earlier than· usual was checked in the latte~ part of July by rains which encouraged farmers to hold back .supplies. Cattle receipts were 17 per cent below the July ten-year average but receipts of calves, which alone showed an increase over a year ago, continue heavy. Marketings of sheep were 16 per cent below the average and hog marketings continue at a low level, being less than a fourth of normal. Live stock receipts at six markets in the District: . Denver ________________._ ___ Kansas City __________ Oklahoma City ______ Omaha _ ________ St. Joseph ______________ Wichita ------------------ Cattle 25,811 115,415 47,158 76;295 25,255 19,164 July 1937 -------------- 309,098 June 1937 ______________ 364,449 July 1936 -------------- 381,397 7 Mos. 1937 ____________ 2,249,462 7 Mos. 1936 ------~.--- 2,301,612 Calves 4,683 25,468 18,854 9,184 5,847 4,248 Hogs 14,083 44,199 15,053 48,691 20,507 13,739 68,284 156,272 .69,918 208,065 67,548 478,209 457,702 2,131,705 385,972 . 3,086,649 Sheep 196,336 68,374 14,603 110,945 59,101 5,206 454,565 · 501,098 524,331 3,955,909 3,867,349 . PRICES Reflecting the small slaughter supplies available, _ prices of beef cattle and hogs continued upward in · July and the first two weeks of August, cattle reaching $16.85 and hogs $13.20 per hundredweight at the Kansas City market. Sheep and lamb prices are seasonally lower, lambs having declined about $2.50 from their spring peak, but prices have recently ,. shown strength. Beef cattle are at the high_e st Aug- , ust level in seventeen years, hogs in ~leven, and lambs in eight years. Ther~ has also been an incr~ase h:i . the average price of stocker and feeder cattle to a _. new high since 1930. This situation is influenced FEDERAL RESERVE BANK OF KANSAS CITY not only by prospects for abundant feed supplies this season but also by- small cattle supplies naturally resulting from successive years of feed shortages. Top li e stock prices at the Kansas City market: July 1937 0n Beef stee1·s ____________________ 16.65 8tocker cattle ______________ 10.00 Feeder cattle ________________ 13.25 Calves ---------------------------- 10.00 Hogs ---------------------------- _ 12.75 Sheep ---------------------------- 6.50 Lambs ---------------------------- 11.10 June July July July 1937 1936 1935 1934 dollars per hundredweight)15.00 9.15 12.00 9.00 9.50 7.75 8.40 5.00 10.25 7 .40 8.50 6.60 9.75 8.50 8.50 5.00 11.80 10.85 10.75 4.75 7.00 6.25 5.00 4.50 12.50 10.60 8.60 8.10 STOCKERS AND FEEDERS Shipments of stocker and feeder cattle to the country continued heavy in July, exceeding the ten-year aver.age by 9 per cent, but shipments of calves and sheep were about 17 and hogs 50 per cent below the average volume. The large number of cattle going to the country reflects lowering feed costs and the rather wide margin existing between prices of finished and unfinished cattle. If hog prices hold near present levels, the price of corn as indicated by the December future will return the hog-corn feeding ratio to an unusually favorable basis. Stocker and feeder shipments from four markets: Denver ---·--- --------------Kansas City ---------------Omaha ---------- ---------------St. Joseph ____ ------------- Cattle 6,200 37,277 18,139 3,138 July 1937 ____________________ 64,754 June 1937 _ _ _ 64,721 July 1936 ____________________ 64,148 7 Mos. 1937 _ _ _ _ 431,663 7 Mos. 1936 ______________ 378,222 3,414 1,084 365 Hogs ~ 1,897 1,083 690 Sheep 24,002 14,226 20,811 4,142 5,398 8,848 7,565 54,841 46,510 4,098 3,393 7,463 23,729 32,698 63,181 45,589 70,348 337,740 372,973 Calves 535 On August 1 the number of cattle on feed for market in Nebraska was 45, in Missouri 25, and in Kansas 40 per cent smaller than a year ago. Moreover, these decreases were from a relatively small number on feed at this time last year, uninterrupted declines having occurred in Kansas since 1928 and in Nebraska and Missouri since 1933. Approximately only onetenth as many cattle are now on feed in Kansas as at the peak in 1928. Feeding operations, however, are expected to increase this coming winter and spring. RANGES AND PASTURES Feed on mountain ranges and in the foothill areas of Wyoming, Colorado, and New Mexico continued good through July but ranges and pastures are only fair in western Nebraska and are poor in western Kansas and Oklahoma. Pastures are fair in eastern ebraska and Kansas and are good in eastern Oklahoma. Cattle and sheep are generally in good condition and have made good summer gains except ·in a few of the drier areas. Because of the marked improvement which has taken place in range conditions 6 during the past year, no extensive forced liquidation of live stock is likely to occur although short feed may necessitate some movement of cattle from the western parts of Nebraska, Kansas, and Oklahoma, depending upon later rains and feed crop developments. The 1937 lamb crop in this District shows little change from that of a year ago but is nearly 11 per cent greater than that in 1935, a decline in the number of breeding ewes as compared with the last two years being offset or more than offset by an increased number of lambs saved per ewe. Winter and spring losses were about average despite the severe and prolonged winter and short feed supplies. In contrast with a year ago, ranges and pastures generally favor a rapid finishing of this year's crop. Lamb contracting for fall delivery was very active in July at steadily rising prices. Preliminary estimates indicate about the same amount of wool shorn and to be shorn in this District in 1937 as in 1936. The number of sheep shorn is smaller than last year but fleece weights average slightly higher. Farm Income Cash farm income in June, as in the preceding month, was little changed from that of a year ago but income for the first half of the year still shows an increase of 10 per cent. Substantially larger receipts from crops this year, principally in Kansas, Colorado, and Nebraska, together with larger Government payments ·in all states of the District, are factors in this increase. However, total receipts in Nebraska are less than in 1936 because of a sharp reduction in receipts from live stock. In New Mexico and Oklahoma, declines in receipts have been more than offset by increased Government payments. Income estimates of the Department of Agriculture: Colorado _______________ _ Kansas ·__ _ _ _ Missouri _______________ _ Nebraska _ __ _ New Mexico __________ Oklahoma _____________ _ Wyoming ______________ 1,150 8,437 2,358 2,302 167 4,265 142 June 1937 ______________ 18,821 May 1937 ______________ 15,278 June 1936 _____________ 15,594 6 Mos. 1937 ____________ 107,044 6 Mos. 1936____________ 71,505 Live Stock Govt. and Products Payments ( In thousands of dollars) 5,985 518 14,493 910 16,411 2,004 11,479 2,867 1,325 44 7,076 140 2,343 120 59,112 58,509 57,129 348,120 357,163 6,603 7,909 11,836 66,331 43,550 Total 7,653 23,840 20,773 16,648 1,536 11,481 2,605 84,636 81,696 84,669 620,496 472,218 The ratio of prices received by farmers to prices paid for what they buy rose one point from the ·middle of June to the middle of July. At 94 per cent, this ratio is now only one point higher than a year ago. u v REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Meat Packing Operations at meat-packing plants in the District declined in July,_output falling to the1owest July level in many years. Cattle and sheep slaughter were little better than 70 per cent .o f the July average of the past ten years and hog slaughter was only 25 per cent of the average. Calf slaughter, however, continues high, being 5 per cent above the average in July. High prices obtainable for dairy products have been an important factor in the large slaughter supplies of calves. · Packers' purchases at six markets in the District: Denver _ ________ Kansas City __________ Oklahoma City --· --Omaha . St. Joseph ______________ Wichita ------------------ Cattle 13,196 47,476 23,209 44,611 18,162 · 9,116 July 1937 ______________ 166,669 June 1937 ______________ 188,960 July 1936 ______________ 224,679 7 ·Mos. 1937___________ 1,227,229 7 Mos. 1936____________ 1,373,807 Calves 3,883 18,941 11,799 7,561 5,504 4,705 52,393 53,119 57,206 356,832 313,686 Hogs 13,341 38,374 10,667 40,498 16,629 12,266 Sheep 31,933 51,329 10,301 78,671 56,066 4,754 231,964 131,675 294,716 187,474 265,166 400,706 1,884,887 2,284,028 2,599,140 2,068,808 Cold Storage Holdings Contraseasonal declines in United States cold storage stocks of beef, poultry, miscellaneous meats ·arid lard, and larger than usual decreases in holdings of pork and lamb occurred in July. Input of eggs and cheese was slightly less and of butter slightly more than usual. Stocks of pork are now 19 and miscellaneous meats 8 per cent below the average for the past five years _but holdings of other commodities, pa~ticularly poultry, continue high. United States cold storage holdings: Aug. 1 July 1 Aug. 1 Aug. 1 1937 1937 1936 6-Yr.Av. - ~ ( In thousands of units) Beef, lbs. _______ ------------------ 51,86~ 63,622 42,914 44,495 Pork, lbs. ------------------------ 468,898 578,424 441,961 581,362 Lamb and mutton, lbs.__ 1,838 2,171 · 1,478 1 642 Poultry, lbs. -------------------- 70,126 77,173 49,220 42,366 Miscellaneous meats, lbs. 58,170 69,198 61,896 63:167 Lard, lbs. -------- --------------- 157,382 185,124 117,026 147,167 Eggs, shell, cases ____________ 8,714 8,648 7,336 8 036 Eggs,frozen (case equiv.) 4,775 4,709 3,300 3;201 Butter, creamery, lbs. ____ 124,030 83,119 103,269 124,663 Cheese, all varieties, lbs. 118,302 105,318 97,403 95,709 Flour Milling ~outhwestern flour mills, operating at the highest July rate in eleven years, produced about 8 per cent more flour than a year ago and about 19 per cent more than the average for July during the past ten years. · The high production rate of July continued into August. So far this year, flour production shows ari increase of almost 15 per cent over that in 1936. .· Flour sales in the Soqthwest increased sharply in Jtily, volume reaching 310 per c_e nt of mills' capacity in the closing week of the month, then dropping back more nearly to normal for this season of the year in August. Sales to bakers have been in good volume and mills now have a sizable backlog to work on although family trade orders are still much below a year ago. Flour prices were irregularly lower in July but are slightly firmer in August as millfeeds continue the decline begun after the middle of July. Flour production reported by the Northwestern Miller: July 1937 Atchison ________ -----------------··-- 133,000 ~:i?~:s--~~~~-----------------------:_: ~~i:zzg Wichita -------------------------------- 236,000 Other cities __________________________ 1,168,000 Change from June 1937 July 1936 ( In barrels) - 17,000 + 16,000 +10,000 +144,000 +42,000 +24,000 +36,000 +20,000 +137,000 +12,000 . So~thwest ---------------------------- 2,422,000 + 241,000 + 183,000 Umted States* -------------------- 6,483,000 +207,000 -776,000 *Represents about 60 per cent of total output in U. S. Petroleum Preliminary figures indicate that daily average crude oil production in the District continued in July at the level of the preceding month and about 22 per cent above a year ago. Although output is already in excess of allowables recommended by the Bureau of Mines and, in some areas, greater than available outlets, some increase appears probable in August when . refinery operations are expected to reach a new high. There has been some improvement in demand for gasoline but prices have not strengthened. Oil production reported by the American Petroleum Institute and the Bureau of Mines: July 1937 Gross D. Av. Colo. ______ 149 Kans. ______ 6,187 N. Mex.__ 3,547 Okla. ______ 19,528 Wyo. ______ 1,683 5 States __ u. s. ------ 31,094 110,306 ~ 4.8 199.6 114.4 629.9 54.3 1,003.0 3,558.3 June 1937 July 1936 Gross D. Av. Gross D. Av. thousands of barrels_)__ 109 3.6 147 4.8 6,039 201.3 4,968 160.3 3,331 111.0 2,280 73.6 19,165 638.9 16,952 546.8 1,437 4 7.9 1,212 39.1 30,081 106,812 1,002.7 3,527.1 25,669 92,078 824.6 2,970.3 Coal Output of bituminous coal showed less than the usual seasonal increase during July and little change from output in July of last year. Coal output estimated from reports of the National Bituminous Coal Commission: July 1937 Colorado ---------------------------Kansas and Missouri_ ______ New Mexico _____________________ _ Oklahoma ______________ w yom1ng . ____________________________ 319,000 371,000 141,000 89,000 323,000 Six states -------------------------- 1,243,000 United States _ _ _ __ 31,610,000 Change from June 1937 July 1936 (In tons) -42,000 +26,000 +41,000 -40,000 + 15,000 +19,000 + 61,000 +3,000 -37,000 - 32,000 +28,000 - 116,000 -24,000 - 395,000 FEDERAL RESERVE BANK OF KANSAS· CITY Zinc and Lead Following a ten-day shutdown in order to dispose of accumulating zinc concentrate stocks, operations at Tri-State mine mills and tailing plants were resumed about the middle of July and output and shipments of zinc rose steadily. There is an active demand for zinc and a fair demand for lead but shipments of lead were much smaller than in either the preceding month or the same month last year. Shipments estimated from Joplin News Herald reports: Building permits issued in eighteen cities of the District declined in number but increased in value during July. The value of permits in July, however, was but 3 per cent greater while for the year to date value is 24 pe~ cent greater than a year ago. Building permits issued by eighteen cities: PERMITS Albuquerque, N. Mex. __ Cheyenne, Wyo. ~--------Colorado Springs, Colo. Denver, .Colo. _______________ _ Hutchinson, Kans. _____ _ Joplin, Mo. ___________________ _ ZINC ORE LEAD ORE Kansas City, Kans. _____ _ Tons Value Tons Value Kansas City, Mo. _________ _ Kansas ___________ 14,240 $ 589,370 1,485 $ 101,360 Lincoln, Nebr. _____________ _ Missouri ________ 3,127 129,452 350 23,870 Oklahoma City, Okla. __ Oklahoma ______ 25,143 1,041,654 2,103 .143,570 Omaha, Nebr. ______________ Pueblo, Colo. _______________ _ July 1937 ------- 42,510 $ 1,760,476 3,938 $ 268,800 Salina, Kans. ________________ June 1937 -------- 39,058 1,607,700 6,091 415,520 Shawnee, Okla. __:___ ~----July 1936 -------- 27,295 839,350 5,520 276,017 St. Joseph, Mo. _____-_________ 7 Mos. 1937____ 281,167 11,672,882 37,163 2,726,393 Topeka, Kans. _____________ _ 7 Mos. 1936 ___ 246,439 7,850,358 30,979 1,528,042 . Tulsa, Okla. -------0---------Zinc ore prices advanced 50 cents a ton about the Wichita, Kans. ___________ _ middle of July. In the ,second week of August, zinc showed a further advance of $2.00 and lead ·prices rose about $7.50 per ton. Zinc is now selling at $47.50 and lead at $77.50 per ton. These prices compare with $31.00 and $50.00, respectively, a year ago. Employment and Pay RoHs Employment and pay rolls in the District showed a further small gain from the middle of June to the middle of July. Employment is about 7 and pay rolls about 10 per cent greater than in 1936. Preliminary figures of the Department of Labor: July 1937 per cent change from June 1937 Employment Pay Rolls · Colorado ------------------------- - - - - - - +3.4 -0.3 Kansas ---------------------------------------------------+o 9 +o 9 Missouri -------------------------------------------------0:3 + 1:5 Nebraska ------------------------------------------------0 .6 -1.1 New Mexico -----------------------------------------+1.6 +LO Oklahoma _________________ +0.6 +1.1 Wyoming - -------- -------------------------------------+ 2.7 -9 .3 Building 1937 104 58 72 493 90 27 47 196 139 173 161 54 15 - 16 27 55 101 239 1936 69 55 32 420 55 32 43 218 128 209 123 47 21 12 41 · 69 117 159 ESTIMATED CosT 1937 1936 $ 142,000 $ 113,000 129,000 132,000 35,000 47,000 679,000 707,000 35,000 56,000 51,000 50,000 40,000 . 70,000 379,000 407,000 . 160,000 125,000 477,000 1,300,000 1,121,000 323,000 37,000 24,000 19,000 28,000 29,000 -- 4,-000 22,000 · 24,000 57,000 ·84,000 364,000 206,000 211,000 167,000 -- July -------------------------------- 2,067 1,850 June ·------------------------------- 2;311 2,112 Se~en months ---------·-=- 14,043 11,957 $ 3,987,000 3,421,000 27,538,000 $ 3,867,000 3,059,000 _22,298,000 Lumber Retail lumber sales. have recently begun to show a small though sustained improvement over a year ago. Following increases in the two preceding months, July showed a gain of 5 per cent. In contrast with an increase of about 35 per cent for the year 1936 over 1935, however, . sales so far this year have increased littl~ more than one per cent over the 1936 level. The July collection ratio was 38.6 per cent as pared with 46.4 per cent last year. Lumber trade at 156 retail yards in the District: com- July 1937 per cent change from June 1937 July 1936 Sales of lumber, board feet ____ ___________ _ + 17 .1 + 5.0 . Sales of all materials, dollars _________________ + 1,Q + 21.~L _. Stocks of lumber, board feet ___________________- -1.0 +14.0 Outstandings, dollars __ -------------~--·- _________ + 2.3 + 38.9 Life Insurance July sales of new paid-for ordinary life insurance Value of construction contracts awarded in this District dropped sharply in July, falling 21 per cent in this District were about 2 per cent smaller than a below a year ago and narrowing the increase for the .year ago but sales for the first seven months of the · first seven months of this year over last to about 9 year are 3 per-cent larger. · The Life Insurance Sales Research Bureau report: per cent. Residential construction continues to feaChange from · ture building activity. July 1937 June 1937 July 1936 Construction figures of the F. W. Dodge Corpora. (In thousands of dollars) Colorado __ ___________ ·- ·-------------5,825 --447 +309 tion: · 37 EASTERN STATES Residential Total Residential (In thousands of dollars) 2,528 321,603 81,046 2,926 318,092 93,078 2,270 294,835 72,094 22,928 1,816,348 597,653 15,661 1,524,637 406,988 TENTH DISTRICT Total July 1937 ______ 10,331 June 1937 ______ 15,279 July 1936 ____ 13,082 7 Mos. 1937 ____ 78,672 7 Mos. 1936 ___ 72,488 7,948 19,842 5,779 1,022 9,151 1,339 + 10 -2,874 -620 -29 +814 +281 --434 +663 -'-l,031 --412 +186 ' -104 Seven states -------------------------- 50,906 United States ------------------------ 588,523 -2,865 -57,472 . -833 -14,977 Kansas ·----------------------------------- M"1ssoun. _ ____________________________ _ Nebraska ______________ _________________ _ New Mexico _---------------- ----------Oklahoma -------------------------------W yommg . ------·------------------------_ 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System Total volume of industrial production and distribution of commodities to consumers showed little change from June to July, when allowance is made for the usual summer declines. INDUSTRIAL PRODUCTION 130 IZO 110 100 - \1, A \ IO 110 IOO /V A 90 'V I\ \.l I \ V \/"~ ... 'II\ 10 r 120 ) V\. 10 10 " IO 70 IO 90 50 1929 1930 1931 1932 1933 1934 1935 1936 1937 Index of physical volume of production, adjusted for seasonal variation, 1923-1926 average 100. By months, January 1929 through July 1937. = ,.._ FACTORY EMPLOYMENT PUllet.N1' IZO 120 110 ~ 100 IO 110 ,_, I\ \~ IO \. 70 IO - I\.,, " I ~- 100 ) 90 AGRICULTURE 10 vJ 70 10 IO 50 1121 1950 1931 1932 1j33 1934 1935 1931 1937 Index of number employed, adjusted for seasonal variation, 1923-1926 average 100. By months, January 1929 through July 1937. = POIIU Nf 120 110 110 100 too ~ ... " 10 ,.. ~ ~ 70 60 ~ 90 . .· 110 ,.,.,_/'~ 70 J 10 110 50 1121 1930 1931 1932 1933 1934 1935 1936 1937 Index compiled by the United States Bureau: of Labor Statistics, 1926 100. By months, 1929 to 1931 ; by weeks, 1932 to date. Latest figure is for week ending August 14, 1937. = MEMBER BANK LOANS ANO INVESTMENTS I\LLION5 <1f DOU.AAS I 8 1Lt..lONS OF 0CH..LAA5 LOANS ,__._ A cotton crop of 15,593,000 bales, representing an increase of 3,200,000 hales over last season, was forecast by the Department of Agriculture on the basis of August 1 conditions. Official estimates indicate that other major crops will be considerably larger than last season and about equal to the average for 1928-1932. Preliminary estimates by the Department of Agriculture indicate that cash farm income, including Government payments, will total $9,000,000,000 for the calendar year 1937, an increase of 14 per cent over 1936. DISTRIBUTION WHOLESALE PRICES 90 · PRODUCTION AND EMPLOYMENT The Board's seasonally adjusted index of industrial production was 114 per cent of the 1923-1925 average in July, the same as in June and 4 points lower than in March, April, and May. At steel mills, where output in June had been curtailed by strikes, activity increased considerably in the early part of July and was maintained at the higher level between the middle of July and the third week of August. Lumber production also increased in July, while output of plate glass showed a substantial decrease. Automobile assemblies declined seasonally. Output of nondurable manufactures decreased considerably, owing largely to a marked decline in activity at cotton and woolen textile mills. Meat packing also declined, while flour milling and sugar refining increased. At mines, output of anthracite was reduced in July, while output of most other minerals showed little change. Construction contracts awarded, as reported by the F. W. Dodge Corporation, were maintained in July at the level reached in June. Non-residential construction expanded further, reflecting principally a large volume of awards for iron -and steel plants and for railroad projects. Residential building showed a seasonal decline. Factory employment increased somewhat from the middle of June to the middle of July, when a decline is usual, and factory pay rolls decreased less than seasonally. The largest increases in employment were in the steel industry and in the food industries, particularly at canning factories. Other manufacturing industries as a group showed somewhat less than the usual seasonal decline. INVESTMENTS 1I _ __ __ __, 10 4 Distribution of commodities to consumers in July continued at the level of other recent months, when allowance is made for the usual summer decline. Sales at department stores and variety stores showed slightly less than the seasonal decrease in July, while mail-order sales declined somewhat more than seasonally. Freight carloadings increased, reflecting in part larger shipments of grains and forest products. 0oMMODITY PRICES From the middle of July to the third week of August prices of grains and cotton declined substantially, while live stock and meats showed a further increase. Automobile prices were raised by most producers, carpet prices advanced, and there were increases in several industrial raw materials, including hides, zinc, lead, and steel scrap. Cotton goods and rubber declined somewhat. BANK CREDIT From the middle of July to August 4, excess reserves of member banks were sharply reduced from $960,000,000 to $700,000,000, but subsequently they increased to $780,000,000 on August 18. These changes in member bank reserves reflected principally fluctuations in the volume of Treasury deposits at Federal Reserve banks, together with a seasonal increase in money in circulation. Excess reserves at New York City banks declined from $230,000,000 to about $40,000,000 and subsequently increased to $130,000,000. Total loans and investments of reporting member banks increased somewhat during the four weeks ending August 18. reflecting principally an increase of $150,000,000 in commercial loans offset in part by a further decline in holdings of United States Government obligations, principally at New York City banks. The growth in commercial loans occurred · both in New York City and in other cities and included the purchase by banks of a large portion of the $60,000,000 of 9-month notes sold by the Commodity Credit. Corporation on August 2. United States Government deposits at reporting banks increased during the period, reflecting purchases by banks of Treasury bills on a book-credit basis. Bankers' balances and other demand deposits showed further declines at New York City banks. MONEY RATES o ~ - - - - - - - - ' - - ~ ~_.__ ___._ __.__ ___. o ·34 1938 19345 1937 •34 1935 1936 1937 Wednesday figures for reporting member banks in 101 leading cities, September 6, 1934, through August 18, 1937. Loans on real estate and loans to banks excluded. Rates on Treasury bills declined slightly after the middle of July, and open-market yields on Treasury notes and bonds also declined until early in August, but later there was a rise in yields. In the latter part of August discount rates were reduced from 2 per cent to 1 ½ per cent at the Federal Reserve Banks of Atlanta, Chicago, and Minneapolis. The 2 per cent rates had been in effect since early in 1935.
@FedFRASER