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MONTHLY REVIEW Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. 24, No. 8 AUGUST FEDERAL RESERVE BANK OF KANSAS CITY 31, 1939 Business in the Tenth Federaij_Reserve District JULY 1939 COMPARED WITH JULY 1938 -- i -----------· .:_________ Denver• COLO. % INCREASE % DECREASE i 40 30 20 10 20 10 _, I I : •• KANSA I )(ANS. I ·----------·--··--r-!--- A short period of very hot and dry weather in July cut in half the corn crop in this District. Since then general rains have occurred and the fall feed outlook is good. Hog prices are the lowest since 1934 and grain prices since 1933. Cattle are two cents below last year, while lambs are unchanged. Cotton is a cent higher but crude petroleum is 40 cents lower. Lead and zinc prices are slightly above a year ago. In recent weeks department store sales have been 8 % above last year, but lumber and life insurance sales are lower. Livestock receipts and slaughter are appreciably greater. Marketings of grains, due to an early movement, are less and flour production is 6 % lower. Deposits and investments of banks have increased in recent weeks while loans have tended to decline. Check transactions are unchanged from a year ago. The volume of money in circulation in-- creases steadily. 30 40 ••• ■ _Mem. Bk. Loans _ I _ Mem. Bk. Invest._ I _Demand Deposita_ ■ ■ Trade I I __Retail Sales_ I _Dept. Store Salea_ I • -- _Lumber Sales_ M<rrl,eting• _ ._Wheat _ _ _ _ Corn _ _ _ _oata _ _ -• ♦,i --H<>ir•-__ _ Sheep _ _ • ■ I Prmluction _ _ Flour_ _ I I _ Cattle Slaughter_Calf Slaughter_ _Hog Slaughter__ ■ • . Sheep Slaughter_ I . Crude Petroleum_ I _Bituminous CoalZinc Ore Shipments Lead Ore Shipments Construction _Total Award•~ - __ .Res. Awarda_ _ Value of Permita_ . Mi.cellaneou• -Rainfall_ _ I I I __ __Calves _ _ ♦ ,9 -· ■ _ __Cattle_ _ •1 ■ ■ I 40 I _ Wholesale Sales_ I I ■ 10 20 30 10 _Life Ins. Sales_ I • • 1938 % INCREASE % DECREASE 40 30 20 F R. Bk. Clearinira . •• ■ Financial 7 MOS. 1939 COMPARED WITH 7 MOS -·· Bank Debita_ I •••• BUSINESS INDICATORS Cub Farm Income..• _Emplorment_ _____ Pay Rolls _ __ •For nrevlotts month -·• ■ I I +SZ 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Principal items of condition of the Federal Reserve Bank of Kansas City and branches: Member Bank Operations The rise in loans at reporting member banks in the Change from Tenth District that had begun early in June leveled Aug. 16 July 19 Aug. 17 1939 1939 1938 off during the first two weeks of August, reflecting ( In thousands of dollars) largely a decrease in commercial, industrial, and agri- Total reserves ....................... ,....... 395,463 +39,051 +85,799 cultural loans, part of which represented the taking Bills discounted............................ 299 -21 +91 Bills purchased............................. 16 Zero Zero over by the Commodity Credit Corporation of cotton Industrial advances..................... 205 -2 -222 and corn loans that were approaching maturity. In- Commit. to make indust. adv...... 618 -9 +185 U.S. Government securities....... 120,710 -2,910 +2,079 vestments have risen somewhat from their low point Total assets................................... 556,834 +34,251 +91,236 early in July. In recent weeks holdings of Treasury F. R. notes in circulation............. 173,524 +1,820 +7,783 bills and Government bonds have declined but these Member bank reserve deposits... 260,015 +18,719 +33,690 Dollar volume of check collections rose somewhat decreases have been more than offset by increased holdings of Treasury notes, of obligations guaranteed more than seasonally during July when it was 8 per by the Government, and other securities. Loans are cent larger than a year ago. For the year to date, 11 and investments 4 per cent larger than a year ago. dollar volume shows an increase of 5 per cent. Check collections through this bank and branches: Adjusted demand deposits of reporting member AMOUNT ITEMS banks, their correspondent balances at other banks, 1939 1938 1939 1938 their reserve balances at this bank, and deposits of (In thousands) other banks at these reporting banks all rose to new July....................... . 6,068 5,866 $1,017,525 $ 942,074 6,170 6,073 950,251 891,780 ........................ high levels during the first two weeks of August. June 41,608 40,742 6,402,425 6,098,687 Seven months ....... Adjusted demand deposits and correspondent balances are 5 per cent larger than a year ago while reserves Bank Debits Debits to individual accounts by banks in reporting are 14 and interbank deposits 13 per cent greater. cent~rs of the District showed about the usual seasonPrincipal items of condition of 51 member banks: al rise during July. However, volume of payments by Change from Aug. 16 July 19 Aug. 17 check both in July and in the first seven months of 1939 1939 1938 1939 was little changed from that in the correspond(In thousands of dollars) Loans and investments-total... ...... 664,323 +4,254 +40,733 ing periods of 1938. For the whole country, debits so Loans-total... .................................... 272,510 -2,330 +27,626 Coml., indust., agric ......................... 161,552 -4,198 +10,564 far this year are 4 per cent larger. Open market paper.......................... 19,355 -426 +2,957 Payments by check in thirty District cities: To security brokers and dealers..... 4,357 Other to purchase or carry secur... 10,091 Real estate loans.............................. 25,049 Loans to banks................................. , 408 All other loans.................................. 51,698 tnvestments-total... ......................... 391,813 U.S. Treasury bills.......................... 4,712 U.S. Treasury notes........................ 81,416 U.S. Govt. bonds .............................. 110,723 Oblig. guar. by U.S. Govt.............. 61,070 Other securities................................ 133,892 Reserve with F. R. Bank. .................. 181,534 Balances with domestic banks ......... 317,745 Demand deposits-adjusted............. 519,075 Time deposits ...................................... 143,198 U.S. Govt. deposits........................... 23,148 Interbank deposits ............................. 410,581 *Comparable figures not available. +652 +3 +285 -86 +1,440 +6,584 -1,104 +4,572 -3,672 +5,372 +1,416 +10,652 +7,676 +15,663 -1,033 -22 +6,948 +476 -2,095 +3,143 -175 +12,756 +13,107 * * * +14,457 +11,054 +22,474 +15,221 +24,002 -1,131 +5,154 +46,643 · Reserve Bank Operations Note circulation of this bank continues to rise, reaching· a new high level of 174¼ million dollars in the second week of August following the previous record of 1721/3 million in the first week of July. Circulation averaged 173½ million during the first half of August as compared with approximately 171¾ million during July and about 170 million during June. Circulation of 173½ million at the middle of August compares with 165¾ million at this time last year and _167¼ million two years ago. 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 ................... . District, 30 cities............... United States, 141 cities.. Change from July 1939 June 1939 July 1938 ( In thousands of dollars) 15,255 -577 +917 3,592 +617 -498 30,807 +3,460 +2,679 5,837 -501 -233 8,319 +135 -308 14,697 +647 -636 155,720 +4,416 -2,722 3,305 +492 +172 15,898 +2,149 -712 2,641 -213 + 102 3,610 -1 +262 1,598 + 122 -113 15,118 +1,573 -3,960 2,993 -220 +14 9,524 +71 +758 19,249 +804 +4,076 354,706 +48,532 -6,063 3,897 +177 - 12 29,260 -979 +717 7,521 -84 -j-532 104,909 -4,744 +8,505 2,546 + 99 + 197 147,531 +1,093 +878 3,522 -28 -193 15,262 + 1,888 -709 11,095 -28 -4,4.48 29,704 +3,859 +1,002 23,081 +2 ,862 +608 126,323 -10,204 +769 51,828 +4,962 -2,679 1,219,348 +60,379 30,476,737 -3,511,183 -1,098 -28,323 FEDERAL RESERVE BANK OF KANSAS CITY Wholesale sales and stocks reported by the Department of Commerce for this District: Trade RETAIL SALES Dollar volume of sales at reporting department stores in the District showed much less than the usual seasonal decline during July, following a larger than seasonal decrease during the preceding month. Sales in July, as in the first six months of the year, were only slightly above a year ago but sales for the first three weeks of August showed an increase of 8 per cent over last year. Stocks of merchandise declined somewhat more than seasonally during July and remain at a level about 2 per cent under a year ago, reflecting conservative inventory policies of retailers. Collections on open accounts averaged 45.1 per cent in July as compared with 45.4 per cent last year, while installment collections averaged 15.3 against 14.4 per cent. Department store sales and stocks in leading cities: SALES STOCKS July '39 7 Mos.'39 July 31, '39 No. of comp.to comp. to comp. to Stores July '38 7 Mos.'38 June 30,'39 July 31,'38 (Per cent increase or decrease) Denver............... 4 +0.2 +o.6 -2.5 -7.4 Kansas City....... 5 +0.9 +1.8 -5.7 -5.5 Oklahoma City.. 3 +13.2 +4.8 -11.3 +5.0 Omaha............... 3 -4.4 -0.9 Tulsa .................. 4 +o.3 -1.0 -10.0 +17.5 Wichita.............. 3 +5.3 -0.6 Other cities ....... 18 -4.6 -1.1 -5.4 -2.4 District.............. 40 +0.5 +0.7 -6.9 -1.7 Total retail sales in the District both in July and in the first seven months of the year were better than 3 per cent above a year ago. Sales of independent retail stores reported by the Department of Commerce: July 1939 per cent change from July 1938 Colo. Kans. Mo. Nebr. N.Mex. ~ Wyo. Automobile ..... +9.6 +30.1 +34.9 +14.5 +11.2 +20.1 +10.8 Country genl.. -9.8 -6.5 +3.0 -11.6 +3.7 -5.8 +3.5 Department.... -4.7 -1.2 +2.9 -6.8 +4.7 +5.3 Drug ................ -2.1 -2.9 +4.1 +4.0 +4.7 -3.1 -3.8 Furniture ........ +3.6 +5.8 +8.4 -19.9 Grocery........... -2.9 -4.0 -2.0 -4.9 Hardware ....... -19.4 -18.6 +8.4 -10.5 Lbr. & mtls ..... -2.8 -1.5 +28.8 -25.7 Men's wear..... -2.7 +3.7 +6.5 Women'swear. .... +7.3 +1.4 +9.1 +11.5 -4.1 -0.8 +8.5 +4.1 +7.8 -4.2 -1.2 .... -17.8 Total... ............. -2.4 +7.6 +1.6 +7.5 -4.6 3 -0.6 SALES STOCKS July '39 7 Mos.'39 July 31, '39 No. of comp.to comp. to comp. to Firms July '38 7 Mos.'38 June 30,'39 July 31,'38 (Per cent increase or decrease) Auto. supplies... 7 +5.4 +1.9 -1.8 ~13.6 Clothing............. 3 -33.3 +29.2 -22.5 Drugs .................. 10 -1.7 -0.3 -0.6 -1.4 Dry goods ........... 7 -7.7 -3.3 +13.0 -18.4 Electrical goods 12 -21.9 · +11.9 -3.5 +6.4 Farm products.. 12 +3.3 -6.3 +7.1 Furniture........... 5 +9.3 +5.0 +1.8 -2.9 Groceries............ 39 -8.5 -2.3 +o.7 -8.4 Hdwre.-totaL. (16) +9.1 +5.4 ·--· General............. 6 +8.3 +2.9 -18.8 -17.8 ]ndustriaL....... 5 +15.6 +11.9 Plbg. & htg....... 5 +1.1 +3.8 Jewelry............... 3 -28.0 +5.2 +7.4 Machinery.......... 4 +o.3 +10.4 +o.8 Paper & prod..... 5 -16.1 -7.3 +5.8 Tobacco & prod. 8 -5.6 -3.4 All other lines... 15 +7.9 +5.4 +2.9 +2.1 TotaL. ................ 146 -3.3 -0.3 -0.1 -8.6 · Crops Abnormally hot, dry weather in July drastically changed prospects for corn and seriously damaged many other late crops in non-irrigated sections of the District just as it has in nearly all of the last ten years. Rains toward the end of the month and early in August came too late to be of material benefit to much of the corn but were favorable for grain sorghums and other forage crops that withstood the drought better and enabled farmers to proceed with the preparation of land for fall wheat planting. Corn prospects near the first of July had been the best of recent years. But high · temperatures, hot winds, and lack of moisture about the middle of the month when corn was at a very critical stage cut the estimated production for Kansas and Nebraska by considerably more than half and sharply reduced the estimates for other states in the District. Early corn in Oklahoma had already matured but late corn was burned badly. Grasshoppers also have done great damage to the crop and much of it is now being cut for fodder. Department of Agriculture corn estimates: Aug.1 1939 +4.9 +2.3 WHOLESALE SALES July 1 1939 ~ .· (In thousands 5,656 6,464 24~52 61~80 108,385 114,520 72,750 167,325 2,160 2,808 29,205 38,940 1,808 2,599 ---· Final 1938 of bushels) 11,319 45~00 106,500 107,735 2,606 · 35,080 2,880 Aver. '28-'37 15,771 The value of July wholesale sales in the District 80,736 dropped more than 3 per cent under a year ago. Of 113,655 159,176 the principal lines, sales of furniture and hardware 2,928 were 9 per cent larger than in July last year, while 35,912 2,071 sales of drugs were 2, dry goods 8, and groceries 9 per cent smaller. Total sales for the first seven months Seven states.......... 244;716 394,536 311,320 410,249 of the year were little changed from 1938. Wholesale United States........ 2,459,888 2,570,795 2,542,238 2,309,674 stocks are about 9 per cent less than a year ago. ColJuly rainfall for Nebraska and Oklahoma averaged lections in July averaged 75.2 per cent, the same ratio only 54, Kansas 43, Colorado 42, and Wyoming 60 per as in July last year. cent of normal, while in New Mexico it was 96 and in Colorado ............... . Kansas ................... Missouri.. .............. . Nebraska .............. . New Mexico ......... . Oklahoma ............. . Wyoming.............. . REVIEW OF AGRICULTURAL AND BUSlNESS co~nITIONS 4 Missouri 78 per cent of normal. The deficiency in Colorado was accentuated by the fact that rainfall in June had been only 35 per cent of normal. Consumption of irrigation water supplies in western sections of the District continued high during July so that the outlook for sufficient water to mature late crops is quite unfavorable. Rainfall July 1939 7 Mos.1939 Total Normal Total Normal COLORADO ---uninche~ 5.51 9.30 Denver................................ 0.08 1.68 9.51 11.53 Leadville............................ 1.80 2.99 6.92 7.58 Pueblo................................ 0.13 1.94 7.19 10.63 Lamar................................ 0.99 2.64 3.84 Garnett............................... 0.85 1.24 3.12 12.74 14.07 Steamboat Springs........... 0.76 1.72 KANSAS 4.27 3.60 3.78 3.02 3.38 3.17 2.58 3.14 3.02 15.43 18.99 13.30 11.06 19.60 10.91 13.61 8.86 7.74 20.73 22.91 17.45 16.95 18.91 15.10 11.97 13.34 10.58 0.96 1.18 1.53 3.78 4.13 4.62 19.45 26.46 27.12 22.05 22.38 27.72 Omaha................................ 4.05 Lincoln ............................... 2.81 Norfolk.............................. 1.89 Grand Island....·-············- 2.27 McCook. ............................. 1.80 North Platte...................... 0.35 Bridgeport......................... 1.53 Valentine........................... 2.22 3.64 3.85 3.58 3.55 3.10 2.74 1.98 3.01 14.70 14.47 11.24 14.56 12.23 9.36 10.58 13.07 17.34 17.48 18.06 16.67 12.88 12.54 11.12 13.16 0.91 2.19 0.15 2.77 2.38 1.39 7.60 7.47 2.71 10.36 7.94 4.90 Tulsa................................... 3.03 McAlester.......................... 4.72 Oklahoma City.................. 0.62 Pauls Valley...·-················ 0.31 Hobart................................ 0.17 Enid .................................... 2.52 1.75 Woodward. 3.31 3.06 2.86 2.83 2.64 2.74 2.93 21.58 23.50 17.76 17.13 16.83 20.48 17.87 24.14 26.55 18.98 21.41 17.19 18.40 15.63 2.10 1.10 0.69 1.22 8.22 6.52 6.73 12.72 10.21 9.85 8.64 10.54 Topeka............................... 1.26 Iola..................................... 2.85 Concordia..............·-·········· 0.34 Salina................................. 1.26 Wichita.............................. 0.72 Hays ................................... 1.04 Goodland ............................ 2.55 Dodge City........................ 0.93 Elkhart.............................. 1.28 MISSOURI St. Joseph .......................... Kansas City....................... Joplin................................. / NEBRASKA NEW MEXICO Clayton.............................. Santa Fe............................ Farmington....................... OKLAHOMA WYOMING Cheyenne........................... Casper................................ Lander................................ Sheridan............................ 0.70 0.47 0.35 2.43 Grain Marketing Wheat marketings increased further during July and were 5 per cent above the ten-year average but fell far short of receipts in July a year ago. The unusually heavy early movement of new crol)'wheat this year had resulted in record marketings for June, and farmers tended to hold wheat when prices in July had dropped substantially below the 1939 Government loan rate. Marketings of corn and oats also were less than in July last year, receipts of corn being only about a third of normal while receipts of oats were about equal to average. July grain receipts at five District markets: Wheat Hutchinson............................ Kansas City........................... Omaha.................................... St. Joseph.............................. Wichita.................................. 4,833,000 33,867,000 10,084,000 6,594,000 6,450,000 July 1939................................ 61,828,000 June 1939............................... 34,583,000 July 1938............................... 75,528,000 7 Mos. 1939............................ 133,569,000 7 Mos. 1938............................ 121,236,000 Corn (In bushels) Oats --. 440,000 666,000 111,000 3,000 246,000 564,000 334,000 21,000 1,220,000 1,705,000 1,404,000 11,183,000 15,352,000 1,165,000 374,000 1,560,000 6,300,000 5,459,000 Owing to the pressure of large world supplies of wheat and prospects for another large domestic corn crop, cash wheat and corn prices continued to decline sharply up to the last week of July, falling to the lowest level since 1933. Since late in July, prices have· generally tended upward, wheat strengthening materially late in August because of unsettled conditions abroad. The lower range of cash prices at Kansas City: Aug. 22 1939 No. 1 hd., dk. wheat, bu ....... $ .64¾ No. 2 mixed corn, bu............ .44½ No. 2 white oats, bu............. .30 ¼ No. 2 rye, bu.......................... .44½ No. 2 barley, bu.................... .41 ½ No. 2 white kafir, cwt......... 1.08 July 31 June 30 -1939 -1939 ~ $ .66½ $ .68¼ .44 .47½ .28½ .31¼ .43½ .45 .39½ .40 1.06 .96 July 30 1938 -$ .68 .52 .23 .45½ .38 .89 Livestock MARKETINGS Marketings of all livestock increased considerably during July, the increase in hog marketings being contrary to the usual seasonal trend. Receipts of cattle were little different from July a year ago but receipts of calves were 30, hogs 64, and sheep 8 per cent heavier. Marketings of cattle were 13 and hogs 30 per cent below the July ten-year average, while calves and sheep exceeded the average by 5 per cent. July livestock receipts at six District markets: Denver......................... Kansas City............... . Oklahoma City........... Omaha......................... St. Joseph ................... Wichita....................... Cattle Calves Hogs Sheep 29,385 114,845 37,858 95,474 25,540 18,521 4,430 30,325 18,735 6,770 4,506 4,467 24,875 143,256 34,062 124,369 68,768 27,783 229,535 84,613 22,656 164,214 55,370 13,277 69,233 423,113 48,573 396,265 53,328 258,232 371,719 2,892,303 384,340 2,269,902 569,565 459,568 527,078 3,768,023 3,934,161 July 1939..................... 321,623 June 1939.................... 242,892 July 1938..................... 316,386 7 Mos. 1939................. 1,965,021 7 Mos.1938 ................. 2,030,911 PRICES Under the pressure of expanding receipts in July and further increases in marketings in August, prices of slaughter livestock are at or near the lowest level this year. Prime finished beef steers in the first week of August sold up to $10.35 a hundredweight as compared with $13 early in June, while hogs and lambs have lost more than $1.50 since late June. Prices of FEDERAL RESERVE BANK OF KANSAS CITY grass fat steers, reflecting a broad feeder outlet, and stocker cattle prices are relatively strong. The rise in hog prices that began about the middle of June was short-lived and hog prices subsequently fell to a new five-year low of $5.55 a hundredweight at the middle of August before rising above a $6 level later in the month. During the first half of 1939 beef steer and lamb prices had generally been considerably above 1938 levels but beef steers are now fully $2 a hundredweight lower than last year and lambs are about the same as a year ago. The disparity in hog prices, which have been below 1938 throughout the year, has recently been more than $3 a hundredweight. Top livestock prices at the Kansas City market: Beef steers ___________ _ Stocker cattle........ Feeder cattle........ . Calves................... . Hogs ....................... Sheep ...................... Lambs ................... . Aug. 22 July June July July July 1939 1939 1939 1938 1937 1936 - - (In dollars per hundr edweight)-10.00 10.25 13.00 12.35 16.65 9.15 9.75 10.00 10.00 9.10 10.00 7.75 8.50 9.00 10.50 10.50 13.25 7 .40 9.00 10.00 9.50 9.00 10.00 8.50 6.15 7.05 7.10 10.05 12.75 10.85 6.50 7.75 7.00 6.15 8.50 7.85 8.25 10.10 10.40 9.35 11.10 10.60 STOCKERS AND FEEDERS Shipments of stocker and feeder livestock from markets back to the country increased considerably during July. The movement was 12 per cent smaller than a year ago for cattle but was substantially heavier for other livestock. Shipments of calves and sheep were especially heavy, sheep being 19 per cent above and calves nearly three times the ten-year average. Cattle shipments were 6 and hogs 41 per cent below average. July stocker-feeder shipments from four markets: Denver......................... Kansas City................ Omaha......................... St. Joseph................... Cattle 5,702 36,194 13,056 3,161 Calves ~ 12,940 2,031 768 July 1939..................... June 1939.................... July 1938..................... 7 Mos. 1939................. 7 Mos.1938................. 58,113 36,343 66,299 435,472 413,833 16,300 11,044 6,940 97,658 63,785 Hogs 1,925 868 1,387 Sheep 18,231 12,820 43,910 4,888 4,260 4,636 2,920 29,666 27,149 79,849 50,095 61,580 402,614 310,349 80 On August 1 the number of cattle on feed for market in Nebraska was 20 and in Kansas and Missouri 10 per cent larger than a year ago. However, cattle feeding operations are still much below pre-drought years, the number on feed in Kansas being only about oneseventh and in Missouri two-fifths of what it was at this time in 1933. RANGES AND PASTURES Dry, hot weather in July caused a sharp decline in the condition of ranges and pastures and some loss of flesh in cattle and sheep. Prospects for fall and winter grazing, however, were improved by rains late in July and early in August. Although there has so far been no forced liquidation of breeding stock, short 5 feed production and the rather poor condition of ranges in many sections are expected to increase fall marketings of cattle and sheep and to check somewhat the tendency to restock. WOOL Preliminary estimates indicate that the 1939 wool clip in the District was about 3 per cent larger than last year and 6 per cent above the 1928-37 average, reflecting chiefly an increase in the number of sheep shorn. Wool prices advanced during July to the highest level of the current season and are somewhat above the low level of a year earlier. Department of Agriculture estimates of shorn wool production: WOOL PRODUCTION SHEEP SHORN Aver. 1939 1938 '28-'37 (Thousand pounds) 13,244 12,862 12,729 3,733 3,566 3,261 9,379 8,636 7,534 2,967 2,456 2,775 14,462 15,400 16,233 2,106 1,938 1,208 32,932 31,389 30,510 Aver. 1939 1938 '28-'37 (Thousand head) 1,635 1,588 1,586 472 485 462 1,384 1,332 1,121 376 326 369 2,110 2,169 2,348 260 228 153 3,395 3,236 3,274 Seven states..... 78,823 76,246 74,250 United States .. 375,699 371,972 355,812 9,632 9,364 9,313 47,455 46,609 44,816 -- Colorado .......... . Kansas ............. . Missouri .......... . Nebraska .......... New Mexico ..... Oklahoma........ . Wyoming ......... . -- ----- Farm Income Cash farm income in the District in June was little changed from a year ago, a decrease of 8 per cent in income from crops being offset by substantially larger Government payments and a small increase in income from livestock. During the first half of 1939, receipts from the sale of crops were only 3 and livestock 2 per cent larger than last year but Government payments were half again larger and total income has increased 8 per cent. By states, Nebraska shows an increase for the year of 20 per cent, Wyoming 14, Colorado 7, Kansas 5, Oklahoma 3, and New Mexico and Missouri 2 per cent. The large increase for Nebraska is due mainly to large returns from commodity credit loans and sales of corn and that for Wyoming to increased r~turns from meat animals and wool. Income in Kansas and Missouri has been seriously affected by smaller returns from wheat and dairy products and in Oklahoma and New Mexico by greatly reduced income from cotton. Department of Agriculture farm income estimates : June 1939 Colorado..................... . Kansas ......................... Missouri. ..................... Nebraska ................... . New Mexico ............... . Oklahoma................... . Wyoming ................... . Seven states............... United States............. June 6 Mos. 6 Mos. 1938 1939 1938 ( In iii"ou"sands ofcloilars) 6,146 5,139 47,230 44,131 18,584 20,034 115,164 109,170 18,171 20,187 106,060 103,650 15,235 13,861 112,478 93,909 2,583 1,629 13,123 12,908 17,242 15,984 71,608 69,776 2,242 2,469 14,813 13,008 80,203 552,000 79,303 559,000 480,476 3,381,000 446,552 3,341,000 6 MVI~W OF AGRlCULTtJRAL ANb Bt1S1N~SS CONDITIONS Meat Packing Meat-packing operations in the District increased seasonally during July. Packers' purchases of hogs continue substantially above a year ago and purchases of cattle in July were 11 and sheep 3 per cent larger than last year. Purchases of calves, however, were 6 per cent smaller because of an abnormally heavy stocker and feeder demand that curtailed supplies available for slaughter. The slaughter of cattle was 12, calves 26, hogs 21, and sheep 11 per cent below the July ten-year average. July packers' purchases at six District markets: Denver.................... Kansas City.......... Oklahoma City..... Omaha................... St. Joseph .............. Wichita .................. Cattle 15,845 52,369 18,013 66,132 19,808 9,648 Calves 3,002 11,760 11,784 4,517 3,576 2,968 Hogs 19,120 139,592 25,493 101,408 60,968 24,808 July 1939............... June 1939............... July 1938............... 7 Mos.1939 ............ 7 Mos.1938 ............ 181,815 155,045 172,632 1,122,446 1,169,423 37,607 30,224 39,971 223,719 272,471 371,389 346,167 220,284 2,535,399 1,999,206 but declined abruptly in the first week of August when prices showed further weakness. Flour output reported by the Northwestern Miller: July 1939 Kansas City............... :.... . Salina............................... . Wichita ............................ . Other cities ..................... . 600,000 225,000 185,000 1,042,000 Change from June 1939 July 1938 ( In barrels) -80,000 +15,000 -3,000 +6,000 +24,000 +13,000 -3,000 -75,000 Southwest........................ 2,052,000 +22,000 -125,000 United States*................ 5,668,000 +78,661 -120,000 *Represents about 60 per cent of total output in United States. Petroleum Preliminary estimates indicate that daily average crude oil production in the District in July remained at about the level of the four preceding months. Output for July, which was equal to the average of the past ten years, was 5 per cent above a year ago, but production for the year to date is still slightly below last year. 273,162 Oil production reported by the American Petroleum 272,471 264,114 Institute and the Bureau of Mines: Sheep 34,580 67,210 12,065 101,285 47,769 10,253 2,184,559 2,211,816 July 1939 Gross D. Av. ( In 4.0 123 5,364 173.0 3,371 108. 7 13,924 449.2 1,965 63.4 -- Cold Storage Holdings June 1939 Gross D. Av. ---- July 1938 D. Av. Gross thousands of barrels) 122 4.1 109 3.5 Colo.................. United States cold storage stocks of meats, poultry, Kans... 5,218 173.9 4,869 157.1 .............. 3,204 106.8 2,927 94.4 and lard declined somewhat more than is usual during N. Mex............. 14,241 474.7 13,941 449.7 Okla................. July, while stocks of eggs and butter increased less and Wyo.................. 1,823 60.8 1,730 55.8 cheese more than is usual. August 1 holdings of pork States........... 24,747 798.3 24,608 820.3 23,576 760.5 were about equal to the average for that date during 5U.S .................. 110,558 3,566.4 104,607 3,486.9 102,898 3,319.3 the past five years, while stocks of beef were 31 and Stocks of crude petroleum produced in this District, eggs 4 per cent below average. Stocks of lamb and which are at the lowest level of recent years, declined cheese exceeded the average by 6, poultry 26, miscel- further in July. Reflecting in part relatively low gasolaneous meats 12, lard 4, and butter 25 per cent. Total line prices, several major refiners early in August anstocks of meat, although not far below recent years, nounced a reduction of 20 cents a barrel in posted are well below those prior to 1935. prices of crude oil which had been unchanged since United States cold storage holdings: October, 1938, and are now the lowest since 1933 . . In Aug.1 July 1 Aug.1 Aver. an effort to protect the price of crude, all oil wells in 1939 1939 1938 '34-'38 Kansas, Oklahoma, New Mexico, Texas, Louisiana, --(In thmis'a'nds of units) Beef, lbs................................. 33,491 33,591 35,925 48,265 and Arkansas were closed on August 16 for the balPork, lbs ................................. 454,958 496,796 378,981 460,339 Lamb and mutton, lbs.......... 1,892 1,837 1,972 1,783 ance of the month. Poultry, lbs............................ 65,138 Miscellaneous meats, lbs..... 68,948 Lard, lbs................................. 139,941 Eggs, shell, cases................. 7,017 Eggs, frozen (case equiv.).. 4,086 Butter, creamery, lbs ........... 165,094 Cheese, all varieties, lbs...... 119,291 67,470 68,452 148,377 6,977 4,042 131,609 98,850 52,640 51,613 60,808 61,724 123,677 135,119 6,411 7,874 3,867 3,746 173,257 131,751 134,351 112,102 Flour Milling Operations at southwestern flour mills rose somewhat further during July but output for the month was slightly below average and was 6 per cent less than in July a year ago. Production for the first seven months of the year shows little change from last year. Flour sales were in large volume in July, particularly in the first half of the month when wheat prices dropped substantially below the Federal loan level, Coal July production of bituminous coal in the District was slightly larger than a year ago and output for the year to date shows an increase of 3 per cent. Coal output estimated from reports of the National Bituminous Coal Commission: July 1939 Colorado ........................... . Kansas and Missouri.. ... . New Mexico ..................... . Oklahoma......................... Wyoming......................... . 263,000 311,000 87,000 35,000 346,000 Six states.......................... 1,042,000 United States ................... 29,490,000 Change from June 1939 July 1938 (In tons) +18,000 +55,000 -13,000 +107,000 -11;000 +22,000 -32,000 +16,000 +34,000 +49,000 +234,000 +1,590,000 +11,000 +6,123,000 7 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead July ore shipments from the Tri-State district continued much above a year ago, zinc shipments showing an increase of 11 and lead of 25 per cent. July ore shipments from the Tri-State district: ZINC ORE LEAD ORE Kansas........................... Missouri......................... Oklahoma...................... Tons Value 8,202 $ 246,407 2,343 70,409 18,044 641,946 -- Tons Value 1,139 $ 62,813 290 16,013 2,420 134,673 July 1939....................... June 1939....................... July 1938....................... 7 Mos. 1939.................... 7 Mos. 1938.................... 28,589 $ 858,762 34,486 1,034,576 25,790 715,710 225,091 6,664,873 198,440 5,395,234 3,849 $ 213,399 4,538 245,749 3,079 163,341 36,140 . 1,953,080 29,721 1,460,797 -~ --- Reflecting stronger foreign and domestic metal markets and an extremely low level of stocks, zinc concentrate prices advanced $1.50 and lead nearly $3 a ton in the last week of July and the forepart of August to the highest level for zinc since last November and for lead since October, 1937. Employment and Pay Rolls Industrial employment and pay rolls in the District increased further from the middle of June to the middle of July when empk)yment was 3 and pay rolls 5 per cent higher than a year earlier. So far this year, employment has averaged only 1 and pay rolls 3 per cent above 1938. Preliminary figures of the Department of Labor: July 1939 per cent change from June 1939 Employment Pay Rolls Colorado..................................................... +3.4 -0.7 Kansas........................................................ +0.4 +1.1 Missouri...................................................... +1.4 +0.4 Nebraska.................................................... +0.6 +0.6 New Mexico................................................ -0.4 +4.9 Oklahoma................................................... Zero -0.8 Wyoming.................................................... +0.1 -5.5 Seven states............................................... Value of construction contracts awarded during July in the Kansas City area (Nebraska, Kansas, Oklahoma, and western half of Missouri) was 19 per cent larger than a year ago. Awards so far this year, however, are only 8 per cent larger than last year because of a 37 per cent decrease in public works construction. In the first half of August awards were 12 per cent above a year ago. Construction figures of F. W. Dodge Corporation: Residential building ......... . Nonresidential building ... . Public works construction Utility construction ......... . Kansas City area............... 10,740 July 7 Mos. 7 Mos. 1938 1939 1938 thousands of dollars) 2,345 24,637 17 ,o7 4 2,375 22,404 20,178 3,052 13,579 21,526 1,252 12,616 9,014 9,024 PERMITS 1939 79 Albuquerque, N. Mex .. . 43 Cheyenne, Wyo .............. 59 Colorado Springs, Colo. 670 Denver, Colo ................. . Hutchinson, Kans ........ . 77 Joplin, Mo ..................... . 43 46 Kansas City, Kans ....... . 182 Kansas City, Mo ........... . Lincoln, Nebr ................. 220 Oklahoma City, Okla .... 178 Omaha, Nebr ................ . 163 Pueblo, Colo ................... 66 Salina, Kans ................. . 18 Shawnee, Okla .............. . 11 St. Joseph, Mo .............. . 20 Topeka, Kans ................ . 75 Tulsa, Okla ................... . 154 Wichita, Kans ............... . 243 ESTIMATED COST 1938 98 $ 57 32 566 66 16 35 116 161 131 152 69 16 6 19 55 125 221 July................................. 2,347 1,941 June................................ 2,427 2,255 Seven months ................ 14,796 13,370 73,236 1939 150,000 $ 64,000 47,000 843,000 21~00 77,000 56,000 300,000 163,000 502,000 281,000 42,000 42,000 12,000 508~00 100,000 426,000 177,000 1938 448,000 71,000 15,000 550,000 34~00 19,000 30,000 306,000 98,000 343,000 266,000 60,000 40,000 9,000 2~000 62,000 244,000 197,000 $ 3,811,000 $ 2,817,000 7,628,000 2,642,000 29,446,000 19,436,000 Lumber Board feet sales of lumber at reporting retail yards in the District increased from June to July but, as in the preceding month, sales were under a year ago, the July decline measuring 3 per cent. Total sales so far in 1939 now show an increase of only 5 per cent over the corresponding period in 1938. Stocks of lumber, which tended to increase during July, are 6 per cent under a year ago. Collect ions in July averaged 33.7 per cent as compared with 34.1 per cent in June and 33.5 per cent in July last year. Lumber trade at 152 retail yards in t he District: +0.1 Building July 1939 ( In 3,233 2,398 3,590 1,519 The value of building permits issued in reporting District cities declined rather sharply during July but remained 35 per cent above that for the same month a year ago. Value of permits for the year to date shows an increase of 52 per cent over last year. July building permits issued in District cities : Sales of lumber, board feet ....................... Sales of all materials, dollars ................. . Stocks of lumber, board feet ................... . Outstandings, dollars .................................. . July 1939 per cent change from June 1939 July 1938 +8.5 -3.0 +1.2 -2.4 +o.5 -6.4 -2.3 -1.2 Life Insurance Life insurance sales in the District in July were 9 per cent smaller but in the first seven months of the year 5 per cent larger than a year ago. The Life Insurance Sales Research Bureau report: Change from July 1939 June 1939 July 1938 ( In thousands of dollar s ) 4,110 -905 - 678 Colorado .................................... 6,217 - 470 -154 Kansas ..................................... . Missouri.. ................................. . 15,086 - 1,319 -397 N ebraska................................. . 4,307 -1,433 -1,012 New Mexico ............................ . 1,017 +76 -27 Oklahoma................................. 7,064 -846 -1,062 Wyoming ......... ......................... 968 - 94 -424 67,792 Se'ven states............................. 38,769 - 4,991 -3,754 37 Eastern states ............... 299,883 239,799 1,999,247 1,534,071 United States........................... 462,423 -62,502 +5,199 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTIO~ ·PERCENT PERCENT 140 140 1301------,,-----+---+---+-----+------1130· In July industrial activity, seasonally adjusted, rose sharply and was close to the level reached last December. Prices of some industrial materials increased in recent weeks while those for agricultural products continued to decline. PRODUCTION 70 - - ~ f - - - - - + - - - + - - - + - - - - - + - - - - - - 1 7 0 60~~---''------'----'----'----'------'60 1934 1935 1936 1937 1938 1939· . 1 __ .._x of phys ical volume of production, adjusLd for s~asonal variation, 1923-1925 average =100. By months, January, 1934, through July, 19S9. FREIGHT CARLOADINGS PERCENT 110 100 t - - - - - - , - - - - + - - - + - - - + - - - - - + - - - - - - 1 1 0 0 90 1 - - - - - - , - - - + - - - + - - - + - - - - + - - - - - - 1 9 0 80 70 60 50 1 - - - - - - , - - - + - - - + - - - + - - - - + - - - - l 50 40 ......,__ ___,_ ____.__ __.__ __.__ __,__ 1934 1935 1936 . 1937 193_ 8 ____,40 _ 1939 The Board's index of industrial production, according to preliminary returns, advanced to 102 per cent of the 1923-1925 average in July as compared with 98 in June and 92 in April and May. The advance in July reflected chiefly a considerable further increase in output of iron and steel, which usually declines at this season. Steel ingot production rose from an average rate of' 52 per cent of capacity in June to 57 per cent in July and in the first three weeks of August was maintained around 60 per cent which for the month would represent about the usual seasonal increase. Lumber production showed little change in July, although a decline is usual. In the automobile industry output showed a sharp seasonal curtailment during July and the first half of August, reflecting preparations for the shift to new model production which will be made about a month earlier this year than in other recent years. Retail sales of new cars continued in excess of production and dealers' stocks were greatly reduced. Plate glass production declined sharply in July, following a substantial increase in June. Changes in output of nondurable manufacturers in July were largely of a seasonal nature. At cotton textile mills and meat-packing establishments activity showed somewhat less than the usual declines and at sugar refineries output increased from the low level reached in June. Flour production continued in substantial volume. Mineral production expanded further in July as output of bituminous coal continued to increase and petroleum production, which had been reduced in June, rose sharply. On August 14 the Texas Railroad Commission ordered a shutdown of most Texas oil wells for 15 days, beginning August 15, and subsequently similar shutdowns were ordered in several other important oil producing states. Value of construction contracts, as reported by the F. W. Dodge Corporation, increased somewhat in July, owing principally to a small rise in contracts for public projects. Awards for residential work, both public and private, were practically unchanged from the June total. EMPLOYMENT ., d totnl !,· :1 \;r--s of r-c-v<::nu e freieht, arljusted for seasonal ~.ariation, l!l2 S-l!l25 a ve rage =1 00. By months, January, 1934, through July, 193!). Factory employment, which usually declines in July, was maintained this year at about the June level and pay rolls showed a less than seasonal decrease, according to reports from a number of leading industrial states. DISTRIBUTION WHOLESALE PRICES PERCENT PERCENT 110 . - " - - ~ - - - - - ~ - - ~ - - - . - - - , 1 1 0 100 90 Sales at department and variety stores in July showed about the customary seasonal decline. In the first half of August department store sales increased. Freight carloadings increased further from June to July. Loadings of coal continued to expand and shipments of miscellaneous freight, which usually decline at this season, showed little change. COMMODITY PRICES 80 ~=;;;:;:~~~~~~'m-H -~!\1--==~----j 70 00 70 FA PRODUCTS Prices of most farm products and foods declined from the beginning of July to the middle of August. Some industrial materials, principally st~el scrap, nonferrous metals, and textile fabrics, showed advances in this period, while crude petroleum prices were reduced. AGRICULTURE 60 50 ' - - - - ' - - - - L - - - - ' - - - - ' - - - - ' - - - _ _ , . . 50 1939 1934 1936 1937 1938 1935 .,c::; cc. 1> il ed l:,y t he United States l3unau of Lailor Statis.:ics, 1926=100. By w eeks, 1!)34 through week ending August 12, 1939. BANK CREDIT MEMBER EiANK RESERVES BILLIONS OF OOIJ.ARS BILIJONS OF DOLLARS On August 1 prospects for major crops were about the same as a month earlier, according to the Department of Agriculture. The first official estimate on cotton indicated a crop of 11,400,000 bales, somewhat smaller than last year's crop and 2,400,000 bales less than the 1928-1937 average . World carry-over of American cotton, however, was estimated to have been somewhat larger on August 1 than the record volume of a year ago. 12 12 Total loans and investments of member banks in 101 leading cities increased substantially during the four weeks ending August 9, reflecting chiefly increases in holdings of United States Government obligations and the purchase by New York banks of a large share of a new issue of New York State short-term notes. Commercial loans continued to increase at New York banks but declined at banks in 100 other leading cities as corn and cotton loans that were approaching maturity were taken over by the Commodity Credit Corporation in accordance with a standing agreement. Deposits at reporting banks remained at high levels. Excess reserves of member banks increased further to new high levels in the latter part of July and the first half of August, owing principally to gold imports and net Treasury disbursements, partly offset by a reduction in Federal Reserve bank holdings of Treasury bills. MONEY RATES 1934 1935 1936 1937 1938 1939 W ednesday figures of total member bank re~c rve ta:a:1ccs at Federal Reserve banks, with estimat. s of r equired and excess reserves, Janu• ary 31 19341 tqrou~h .4u~st 161 193~. The average rate on new issues of 90-day Treasury bills has increased slightly in recent weeks and on August 10 was 0.032 per cent. Prices of Treasury bonds showed little change from the middle of July to the middle of August.
@FedFRASER