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REVIEW MONTHLY Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. 26, No. 12 FEDERAL RESERVE BANK OF KANSAS CITY DECEMBER 31, 1941 Business in the Tenth Federal Reserve District NOVEMBER 1941 COMPARED WITH NOVEMBER 1940 % DECREASE i -- i . -----------· • Denver• COLO. BUSINESS INDICATORS % INCREASE 40 30 20 10 10 20 30 40 I % INCREASE -- 10 20 30 40 ....... Bank Debits ........ .F. R. Bk. Clearings . KANS . I ·-··-··-··---··-r-l--- -• • -• -•• -• I A sharp rise in prices of farm products, especially cattle and wheat, took place following the outbreak of war in the Pacific. Price ceilings already are in effect on many commodities and others are indicated. Drier weather after mid-November enabled farmers to continue winter wheat seeding. The wheat prospect in the western part of the belt is excellent. Cattle slaughter and the production of petroleum, zinc, and lead are in large volume. Output of flour and coal, after declining in November, again is rising. Construction is very large because of awards for defense projects ; other building is being curtailed by priorities. Farm income is 25 % and employment 11 % higher than last year, but trade gains continue to narrow and inventories to rise. Bank loans are 38 % and deposits about 15% larger than a year ago. Check transactions have increased fully one-fifth. % DECREASE 40 30 20 10 Finance •·---------J KANSA •• 11 MOS. 1941 COMPARED WITH 11 MOS. 1940 ■ ■ I I I -· +51 ...... Life Ins. Sales ..... I .... Failures (Liab.) .... ■ Trtule . ... Wholesale Sales .... ... Dept. Store Sales.... ......Lumber Sales....... ltf nrketirig• +90 .............Wheat .............. ............... Corn ............... +89 ···············oats............... ............. Cattle .............. 1• ............. Calves .............. .............. Hogs ............... ■ .............. Sheep.............. Prmluction .............. Flour............... .... Cattle Slaughter..... .... Sheep Slaughter..... .... Crude Petroleum .... ....Bituminous Coal.. ... .Zinc Ore Shipments .. .L ead Ore Shipments ...Value of Permits.... /JI i•cellaneou• ........... Rainfall ............ Cash _Farm Income•. .....•..Employment~...... •For previous month . ■ ■ ~, • I -• I ..... Calf Slaughter....... ......Hog Slaughter....... .......Res. Awards ......... -· •••• ........Retail Sales......... Cow,truction -'5 -■ ...Demand Deposits ... 9B ......Total Awards ....... I I ... Mem. Bk. Invest..... ■ ■ ■ 1• .... Mem. Bk. Loans .... •• • -· •••• •• • +s, +59 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Principal items of condition of this Reserve Bank: Member Bank Operations The rapid rise in loans at 50 weekly reporting member banks in the Tenth District leveled off in the last half of November but was resumed early in December. The increase, as in preceding months, was chiefly in commercial, industrial, and agricultural loans. Investments increased sharply in the first two weeks of December, owing to large purchases of Treasury bills and notes and Government bonds. Holdings of guaranteed obligations and other securities continued to decline. Loans·at the middle of December were 38 and investments 8 per cent above a year earlier. Volume of loans is little below the all-time high in 1929, and holdings of Government obligations are the largest since the end of 1937. Deposits at these 50 reporting banks have increased somewhat in recent weeks, though adjusted demand deposits are below the record level of early November and interbank deposits are below their high point at the middle of September. Reserve balances carried at this bank reached a new high early in December but have since declined, while balances carried at other banks have been drawn down further. Adjusted demand deposits are 18 and interbank deposits 13 per cent larger than a year earlier. Reserve balances are 16 per cent above a year ago but balances carried at other banks are 4 per cent smaller. Principal items of condition of 50 member banks: Total reserves .................................. Bills discounted............................... Industrial advances........................ Commit. to make indust. adv......... U.S. Govt. sec., direct & guar....... Total assets ...................................... F. R. notes in circulation................ Member bank reserve deposits ...... Change from Dec.17 Nov.19 Dec.18 1941 1941 1940 (In thousands of dollars) 555,281 +6,939 +114,796 2,130 -1,196 +996 87 -8 +1 1,500 -1 +1,465 95,729 +1,797 -11,314 719,195 +17,455 +122,364 257,105 +10,784 +47,778 333,292 -4,612 +48,917 Dollar volume of check collections declined as is usual during November, following a steady rise since last summer to the highest level for any month of record in October. Dollar volume in November and in the first eleven months of 1941 was a fourth larger than in the corresponding periods of 1940. Check collections through this bank and branches: ITEMS 1941 November............ . October.................. Eleven months ...... 6,096 6,689 68,544 AMOUNT 1940 1941 1940 (In thousands) -5,934 $ 1,328,441 $ 1,064,662 6,414 1,525,562 1,132,330 65,183 13,585,207 10,829,945 Bank Debits Debits to individual accounts by banks in reporting centers of the District in November and in the first eleven months of 1941 were about one-fifth larger than in the same periods of 1940. In the forepart of December, volume of check payments was more than a fourth above a year earlier. Change from Payments by check in thirty District cities: Nov.19 Dec.18 Dec. 17 1941 1941 1940 ( In thousands of dollars) Loans and investments-total... .... 882,571 +22,258 +159,484 Loans-total... .................................. 468,976 +11,506 +128,116 Coml., indust., agric ....................... 299,775 +13,595 +96,736 Open market paper........................ 28,077 -874 +7,052 To security brokers and dealers.. 3,865 +674 -28 Othertopurchase or carry secur. 10,822 -868 +1,316 Real estate loans............................ 32,900 -141 +1,781 Loans to banks............................... 301 -188 -122 All other loans................................ 93,236 -692 +21,381 Investments-total... ....................... 413,595 +10,752 +31,368 U.S. Treasury bills................ ...... 30,007 +6,098 +1,861 U.S. Treasury notes...................... 47,639 +1,895 -5,734 U.S. Govt. bonds ........................... 121,194 +8,432 +24,727 Oblig. guar. by U.S. Govt............ 88,901 -3,182 +10,216 Other securities.............................. 125,854 -2,491 +298 Reserve with F. R. Bank. ................ 238,554 -1,807 +32,220 Balances with domestic banks ....... 281,633 -6,277 -13,253 Demand deposits-adjusted ........... 656,135 +1,582 +102,272 Time deposits ................................... 138,206 -4,563 -6,496 U.S. Govt. deposits......................... 30,363 +12,206 +17,450 Interbank deposits ........................... 497,264 +6,305 +56,650 Reserve Bank Operations Note circulation of this bank in recent weeks has been rising much more rapidly than earlier, owing to the seasonal demand for currency for Christmas shopping. Circulation in the third week of December was at a new record level of 257 million dollars, which was about 48 million, or 23 per cent, above a year ago and 73 million, or 39 per cent, above two years ago. Albuquerque, N. M .. Atchison, Kans ........ . Bartlesville, Okla .... . Casper, Wyo ............ . Cheyenne, Wyo ........ . Colo. Springs, Colo .. Denver, Colo ............ . Emporia, Kans ........ . Enid, Okla ................ . Fremont, Nebr ........ . Gr. Junction, Colo... . Guthrie, Okla.......... . Hutchinson, Kans ... . Indep., Kans .............. Joplin, Mo ................ . Kansas City, Kans .. . Kansas City, Mo ...... . Lawrence, Kans ....... Lincoln, Nebr ........... . Muskogee, Okla ........ Okla. City, Okla ....... . Okmulgee, Okla........ Omaha, Nebr............ Pittsburg, Kans ...... . Pueblo, Colo............. . Salina, Kans ............. . St. Joseph, Mo .......... . Topeka, Kans ........... . Tulsa, Okla................ Wichita, Kans .......... . Nov. 11 Mos. 1941 1941 (Thousand dollars) 24,979 239,774 3,289 37,859 31,323 330,351 s,194 so,494 11,394 119,274 17,261 161,455 216,393 2,121,618 4,211 41,690 12,520 143,298 3,120 36,904 3,983 41,412 1,886 18,378 12,115 149,223 2,788 33,819 14,341 123,818 20,801 227,823 366,807 4,158,189 3,502 43,471 28,865 323,622 10,001 105,746 119,267 1,249,930 3,015 31,043 180,341 1,944,389 4,487 48,853 21,040 188,843 9,986 120,051 32,628 353,229 17,454 224,674 172,187 1,667,719 65,948 726,723 District, 30 cities ...... 1,424,126 15,093,672 U.S., 274 cities ........ .45,081,000 480,798,000 Change from 1940 Nov. 11 Mos. ~ e r cent) +25 +26 +16 +14 +32 +13 +s +12 +16 +27 -2 +7 +27 +22 +9 +17 +33 +17 +8 + 19 +11 +2 +22 +16 +25 +10 +9 +16 +45 +20 +9 +20 + 16 +18 0 +11 +3 +4 +12 +26 +21 +16 +16 +9 +17 +21 +21 +17 +10 +17 +29 +22 + 17 + 16 +7 +9 +31 +15 +40 +43 -- -+21 +15 +19 +20 FEDERAL RESERVE BANK OF KANSAS CITY 3 Wholesale sales and stocks reported by the Bureau of the Census for this District: Trade RETAIL SALES Department store sales have receded further from SALES STOCKS Nov. '41 11 Mos.'41 N ov.30,'41 the very high level of last summer and early fall, when No. of comp. to comp. to comp. to much buying had been "borrowed" from succeeding Firms Nov. '40 11 Mos.'40 Nov.30,'40 months. Dollar volume of sales in November was (Per cent increase or decrease) supplies....... . 16 0 +13 +24 only 6 per cent larger than a year earlier as compared Auto. Drugs ..................... . 7 +14 +13 +16 with trade gains of 13 per cent for October and 25 per Dry goods.............. . 4 +2 +24 +7 Electrical goods .... . 12 +69 +52 +66 cent for the three preceding months. In the first Farm products...... . 11 +24 +33 +32 three weeks of December, dollar volume was 7 per Furniture.............. . 5 +57 +37 +52 Groceries ............... . 28 +8 +12 +22 cent above last year. Since retail prices, according to Hardware--total... (17) +42 +44 +25 the Fairchild Index, currently are nearly 15 per cent General.. .............. . 5 +10 +38 +18 Industrial. ........... . 6 +94 -1-62 +47 higher than a year ago, the physical volume of sales Plbg. & htg .......... . 6 +46 +31 +19 3 +48 +48 -13 now is probably below last year. Inventories have in- Jewelry.................. . ............. . 4 +37 +49 +52 creased further and, in terms of dollars, are a third Machinery Paper and prod ..... . 4 +25 +20 5 -2 +6 above a year ago, while orders outstanding are nearly Tobacco and prod.. 20 +13 +24 +20 half again larger than a year earlier. Collection ratios All other lines....... . Total....................... 136 +19 +23 +25 continue to show improvement over last year. Department store sales and stocks in leading cities : Crops SALES STOCKS The acreage of winter wheat seeded in the fall of Nov. '41 11 Mos.'41 Nov.30,'41 No. of comp. to comp. to comp. to 1941 was 18 per cent less than in the preceding year Stores Nov. '40 11 Mos.'40 N ov.30,'40 in Kansas, 15 per cent smaller in Oklahoma, and 13 ( Per cent increase or decrease) per cent less in Nebraska, and generally shows an Denver.................... 7 +8 +16 +31 Hutchinson............. 3 +8 +16 even greater decrease as compared with average Topeka................... . 3 -3 +10 plantings from 1930 to 1939. The decline is due to Wichita.................. . 4 +13 +22 Joplin ..................... . 3 +26 +22 reduced AAA allotments and to unfavorable weather Kansas City.......... . 8 +48 +7 +16 at seeding time. Plantings in Kansas and Nebraska St. Joseph ............... 3 -4 +8 Omaha................... . 4 +4 +13 are well within the allotment, while in Oklahoma they Oklahoma City..... . 6 +5 +15 +46 are somewhat larger. In Kansas and Nebraska, howTulsa...................... . 6 +11 +16 +27 Other cities ........... . 31 -5 +11 +22 ever, there is a large acreage of volunteer wheat in excellent condition that must be plowed up by early District.................. . 78 +6 +15 +33 Sales of independent retail stores, by states, as re- spring to comply with AAA regulations. Department of Agriculture estimates of winter ported by the Bureau of the Census: wheat acreage and condition: Nov. 1941 per cent change from Nov. 1940 Colo. Kans. Mo. Nebr. N.Mex. Okla. Wyo. Apparel... .......... +5 +11 +8 +3 +10 +6 +13 Automobile ....... -12 -15 -24 -37 -11 -27 -22 Department...... + 5 + 10 + 13 -1 +3 Drug .................. +11 +22 +13 +16 -1-10 Dry goods......... Food................... Furniture.......... General............. Hardware........Jewelry..... _...... Lbr. andmtls ... Miscellaneous... +8 +10 +7 +21 +25 + 12 +12 + 20 +8 +9 +1 +9 +11 +5 +17 + 17 +8 +4 +13 0 +11 .... +8 +8 +5 +2 -3 +6 +5 +5 +7 + 13 +10 0 -- -1 +1 +14 +8 +13 +8 +9 +20 0 +4 +15 +5 +3 +9 +51 +7 + 43 + 32 -- FALL SEEDED ACREAGE Aver. 1941 1940 1939 '30-'39 - - (000 omitted) - 1,234 94 10,712 13,064 12,496 14,064 1,336 1,856 1,802 2,048 2,930 3,368 3,021 3,532 302 335 342 380 4,276 5,030 4,657 4,876 160 160 239 206 88 66 93 89 80 93 7 States.. 20,878 25,134 23,737 26,340 39,318 45,663 43,820 47,875 87 u. s......... 1,162 1,321 1,180 '41 - Kans ...... . Mo .......... . Nebr........ N.Mex.... Okla....... . Wyo ........ Colo ........ . 1 Aver. '40 '39 '30-'39 (Percen-t)-90 38 64 88 35 68 72 68 80 81 37 70 50 57 72 77 34 67 92 60 70 CONDITION DEC. 84 55 74 Winter wheat is in excellent condition in the western two-thirds of Kansas and in adjacent parts Gains in wholesale trade also have narrowed in of other states, but the situation is not quite so favorrecent months, though wholesale sales continue to able eastward, where abnormally heavy rainfall from •show a greater increase than retail sales, the value of late September to the second week of November November wholesale sales in this District being 19 seriously delayed seeding operations. Late seeded per cent above last year. Inventories have risen fields in eastern Kansas, however, are comi!lg up to further and are a fourth larger than a year earlier. good stands with continued mild weather, and plantThe November collection ratio was 70 per cent against ing was still in progress at the middle of December, 67 per cent in the same month last year. though such late seedings usually mean materially Total... ...........-.... +2 +8 +9 -1 WHOLESALE SALES +2 +4 +4 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 4 reduced yields. Because of the unprecedented depth of soil moisture this fall, prospects on the whole are very bright for the 1942 wheat crop if the weather should not be too wet next spring. November precipitation in Wyoming was 103 per cent of normal but in Colorado it was only 51, New Mexico 58, Nebraska 77, Kansas 67, Oklahoma 64, and Missouri 87 per cent of normal. However, in the three fall months, September through November, rainfall had been far above normal throughout the District. Rainfall COLORADO Denver.......................... Leadville....................... Pueblo........................... Lamar........................... Steamboat Springs..... 11 Mos.1941 Nov.1941 Total Normal Total Normal (In inches) 16.65 13.32 .79 .55 16.73 17.55 .93 1.05 16.27 11.17 .36 .23 21.54 15.44 .19 .53 22.70 21.16 1.49 1.93 KANSAS Topeka.......................... Iola................................ Concordia...................... Salina............................ Wichita ......................... Hays .............................. Goodland....................... Dodge City................... Elkhart.......................... .65 1.76 .83 .88 .78 .54 .24 .87 .36 1.52 2.22 .99 1.43 1.39 1.01 .72 .73 .84 42.38 32.57 50.42 36.78 28.47 25.92 36.66 26.50 32.33 29.11 27.06 23.07 27.03 18.14 29.76 19.94 26.04 16.97 .96 .94 1.70 1.58 1.83 2.77 35.76 44.86 54.01 34.27 35.78 41.83 1.01 .94 .30 .77 .18 .23 .21 .45 1.07 1.07 1.12 1.04 .78 .47 .43 .56 26.07 22.55 26.57 23.32 25.11 19.57 17.34 21.85 26.84 27.14 27.43 26.31 19.13 17.97 15.71 17.76 Trace .48 .44 .72 .68 .86 37.60 17.37 17.76 16.23 13.53 9.01 1.90 1.40 1.49 1.07 .78 1.61 .74 2.48 2.84 1.87 2.32 1.66 1.60 1.67 62.68 46.36 41.21 51.32 44.86 35.41 45.92 36.83 40.66 29.65 33.10 26.97 29.52 26.00 .71 .46 .86 .48 .52 .75 .60 .63 18.29 15.51 19.91 14.35 14.44 14.21 11.95 14.42 MISSOURI St. Joseph ..................... Kansas City.................. Joplin............................ NEBRASKA Omaha........................... Lincoln.......................... Norfolk. ........................ Grand Island................ McCook ......................... North Platte................ Bridgeport.................... Valentine ...................... NEW MEXICO Clayton......................... Santa Fe....................... Farmington.................. OKLAHOMA Tulsa............................. McAlester..................... Oklahoma City............. Pauls Valley................. Hobart........................... Enid ·······----·---Woodward.................... WYOMING Cheyenne...................... Casper........................... Lander........................... Sheridan....................... Grain Marketing Grain marketings in November were substantially larger than the small marketings of a year ago. Receipts of corn were about a fourth short of the November average of the past ten years, due chiefly to unfavorable weather for harvest and some delay in marketing awaiting the announcement of 1941 loan rates, but receipts of wheat were about equal to average and marketings of other grains were heavy. November grain receipts at five District markets: Wheat Corn ( In bushels) Oats Hutchinson ........................ . Kansas City....................... . Omaha................................. St. Joseph ............................ Wichita................................ 1,129,000 2,520,000 416,000 229,000 1,310,000 1,190,000 1,249,000 302,000 308,000 254,000 314,000 Nov.1941............................. Oct. 1941............................. Nov.1940............................ 11 Mos. 1941....................... 11 Mos. 1940....................... 5,604,000 5,228,000 2,947,000 159,092,000 130,034,000 2,741,000 3,180,000 2,695,000 21,863,000 38,096,000 876,000 1,106,000 466,000 9,234,000 5,561,000 Cash wheat prices were little changed during November but strengthened early in December, reflecting principally an advancing general price level, growing tightness in the cash wheat situation, and unfavorable seeding conditions in some areas this fall. In the second week of December, wheat prices rose sharply following the outbreak of war in the Pacific, prices rising to new high levels since mid-1937 and about 10 cents above the loan rate. To stabilize prices, Government-owned wheat on December 17 was offered for sale at 15 cents above the loan rate, and wheat prices have since eased somewhat. Cash corn prices also advanced, reacting to the rise in wheat but influenced as well by profitable feeding ratios, increasing livestock production, and the likelihood of active participation in the 1941 Federal loan program. The lower range of cash grain prices at Kansas City: No. 1 hd., dk. wheat, bu .. . No. 2 mixed corn, bu ....... . No. 2 white oats, bu ......... No. 2 rye, bu .................... . No. 2 barley, bu ............... . No. 2 white kafir, cwt.... _ Dec.24 Nov. 29 1941 1941 $1.19¾, $1.14 .74 .69¾, .52 .46 .67½ .63 .55½ .52 1.04 .99 Oct. 31 1941 $1.11¾ .70 .43 .58 .51 1.19 Nov. 30 1940 $ .84 1/4 .59¾, .38 ½ .51 .51 .90 Livestock MARKETINGS November marketings of cattle were 15 and calves 13 per cent heavier than a year earlier, while receipts of sheep were about the same and of hogs much below last year. Marketings of calves were slightly above the November ten-year average, but receipts of cattle were 5, hogs 12, and sheep 17 per cent below average. November livestock receipts at six markets: Denver...................... . Kansas City............. . Oklahoma City........ . Omaha....................... St. Joseph ................. . Wichita..................... . Cattle 72,456 122,100 35,750 117,043 37,423 23,281 Calves 26,757 27,718 20,229 16,430 4,673 7,791 Hogs 41,369 189,044 37,472 159,318 89,553 22,004 Sheep 166,803 69,957 11,379 75,262 74,340 9,858 Nov.1941.. ................ Oct.1941.. ................. Nov.1940 .................. 11 Mos. 1941............. 11 Mos. 1940............. 408,053 529,064 354,342 3,913,267 3,670,531 103,598 126,891 91,629 675,780 744,099 538,760 491,341 753,351 5,178,456 6,094,458 407,599 1,129,965 417,651 6,357,696 6,549,302 PRICES The downward trend in fat cattle and lamb prices was reversed after the middle of November by a cur- FEDERAL RESERVE BANK OF KANSAS CITY tailment of marketings and some improvement in consumer demand for meats, and this recovery in fat livestock prices, together with favorable weather conditions, greatly strengthened prices of stocker and feeder cattle and sheep. Hog prices continued to decline through November, though not so markedly as in the two preceding months. In the second week of December, all livestock prices rose sharply in response to war developments, prices of fat steers reaching their highest point in four years and prices of lambs recovering virtually all and hogs about half their decline from four-year peaks early in September. Hog prices were at the highest December level since 1926, and prices of sheep and lambs, calves, and stocker and feeder cattle were the highest since 1929, while fat steer prices were the highest since 1930. Top carlot livestock prices at Kansas City: Dec. 24 Nov. Oct. Nov. Nov. 1941 1941 1941 1940 1939 --(In dollars per hundredweight) Beef steers............... 13.30 12.75 12.85 13.75 11.25 Stocker cattle.......... 12.75 11.25 11.90 10.50 10.00 Feeder cattle............ 12.00 10.90 11.25 10.50 9.35 Calves....................... 13.50 12.50 13.00 11.00 10.00 Hogs.......................... 11.25 10.50 11.25 6.15 6.65 Sheep........................ 10.25 10.25 10.00 7.90 7.90 Lambs ....................... 12.50 11.50 11.90 9.75 9.75 Nov. 1938 -11.85 9.25 9.00 10.00 8.00 8.00. 9.50 5 sorghums will more than offset decreased feeding at cottonseed-oil mills, while in Wyoming cattle feeding is expected to be reduced and in New Mexico little changed from last year. Lamb feeding operations, according to the Department of Agriculture, also will be larger than seemed probable earlier. A material increase is indicated for Nebraska, especially in the Scottsbluff and Central Platte Valley areas and around Omaha. Colorado will feed about 25 per cent more lambs than the relatively small number fed last year, with the bulk of the increase occurring in northern Colorado and in the Arkansas and San Luis Valleys. Some increase is in prospect in Missouri and in Kansas, where the fall movement of lambs to wheat pastures exceeded the very heavy movement a year ago, while operations in Wyoming, New Mexico, and Oklahoma are expected to be smaller, a factor in the reduction in Oklahoma being the holding over of lambs in Texas. RANGES AND PASTURES November weather generally was favorable for ranges and livestock, which are in excellent condition and are the best in many years, though the heavy fall rains and late maturity of grass have left range feed STOCKERS AND FEEDERS in some sections not as well cured as usual and the Favorable weather following the wet, soggy condi- continued wet weather and muddy fields and pastures tion of pastures, fields, and feed lots up to early up to early November had been limiting weight gains November resulted in a material broadening of in livestock. Winter wheat pastures are very good country demand for stocker and feeder livestock. in eastern Colorado and New Mexico and in western November shipments of cattle from public markets Kansas and Oklahoma but have been too wet for were 17, calves 8, and sheep 19 per cent larger than grazing in eastern Kansas. There is a strong tendency a year ago, with the movement of cattle 3 and calves in range areas to hold back cattle to utilize feed. 30 per cent above and of sheep only 4 per cent below Farm Income the November average of the past ten years. Cash farm income in the District in October was 25 November stocker-feeder shipments: per cent above a year earlier, reflecting an increase of Cattle 48,914 54,788 45,201 8,109 Calves 22,566 15,554 7,756 1,683 Nov.1941.......................... 157,012 Oct. 1941........................... 225,714 Nov.1940.......................... 134,030 11 Mos. 1941..................... 1,078,859 11 Mos. 1940..................... 1,162,643 47,559 54,446 44,093 214,979 266,355 Denver.............................. Kansas City...................... Omaha............................... St. Joseph......................... Hogs 13 2,927 774 718 Sheep 147,412 11,112 16,792 19,866 4,432 195,182 4,409 695,775 5,540 164,472 45,452 1,845,530 58,277 1,602,526 There was a rather heavy movement of stocker and feeder cattle into Corn Belt states during November. As a result, the Department of Agriculture estimates that cattle feeding this winter will probably equal or exceed last year in Nebraska and Kansas, and the sharp advance in the price of fat cattle in December is expected to improve the demand for stockers and feeders still further. An increase in cattle feeding also is in prospect in Colorado and in Oklahoma, where larger numbers fed on wheat pastures and grain 30 per cent in income from farm marketings, chiefly the result of higher prices. Government payments were less than half of a year earlier. Income was up in all states of the District except Nebraska, where smaller Government payments, greatly reduced hog marketings, and wet-weather delays in harvest and in the movement of late crops to market and into loans contributed to a decline in income. Department of Agriculture farm income estimates: Colorado................. ~i~so~~f~~~~~~~~~~·.~~·.·.~· Nebraska............... . - ew Mexico .......... . Oklahoma............... Wyoming ............... . Seven states........... United States........ Oct. 10 Mos. Change from 1940 1941 1941 Oct. 10 Mos. (Thousand dollars) -U,er cent) 21,596 134,896 +14 +21 34,659 360,038 +39 +46 53,240 319,193 +42 +32 27,867 245,067 -1 +9 14,966 47,141 +8 +12 36,910 214,731 +25 +34 13,824 54,266 +36 +16 203,062 1,484,891 1,375,332 9,174,943 +25 +32 +28 +25 6 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Meat Packing Cattle slaught er continued heavy during N ovember, with packers' purchases of cattle 17 and calves 21 per cent above a year earlier. Hog slaughter was nearly a third under last year's high level. A heavy country demand for stocker and feeder sheep currently is absorbing a large proportion of market receipts so that November packers' purchases were 8 per cent smaller than last year though marketings were about the same. The slaught er of cattle was 4, hogs 9, and calves and sheep 16 per cent below average. November packers' purchases at six markets: Denver....................... Kansas City.............. Oklahoma City......... Omaha....................... St. Joseph.................. Wichita...................... Cattle 17,207 54,184 15,702 63,233 26,889 8,139 Nov. 1941.................. 185,354 Oct.1941................... 215,794 Nov.1940................... 159,089 11 Mos. 1941............. 2,060,623 11 Mos.1940............. 1,764,451 Calves 2,907 10,615 14,404 8,494 2,941 2,129 Hogs 31,038 . 174,729 27,290 144,012 82,712 19,210 41,490 478,991 47,301 442,754 34,224 698,323 354,164 4,598,903 367,597 5,402,831 Sheep 26,342 52,669 6,627 54,985 54,154 6,316 201,093 286,257 219,691 3,168,639 3,098,088 Cold Storage Holdings After allowing for usual seasonal changes, United States cold storage stocks of beef, lamb, poultry, and cheese continued to increase and of pork and lard to decline during November, and there was also some decrease in holdings of butter and eggs. Stocks of nearly all commodities are very large in comparison with recent years, with holdings of poultry, cheese, frozen eggs, and butter at or near record levels for the season. Stocks of lard are nearly four times as large as at this time in 1917 and are more than double stocks in 1918, during the first World War, but total meat stocks are 23 per cent smaller than in 1917 and 41 per cent less than in 1918. United States cold storage holdings: part to heavy buying last summer, but early in December flour sales increased as wheat prices strengthened and sales were exceptionally large immediately following the outbreak of war in the Pacific on December 7. Export trade has improved somewhat since mills may now buy Government-owned wheat at a discount in order to compete in Latin America. Flour output reported by the Northwestern Miller: Kansas City........... Salina..................... Wichita................... Other cities............ Nov. 11 Mos. Change from 1940 1941 1941 Nov. 11 Mos. --(In barrelsr~ e r cent) 535,000 6,225,000 +11 +9 165,000 2,079,000 -18 -1 135,000 1,834,000 -12 +14 1,227,000 13,971,000 -4 +s Southwest.............. 2,062,000 24,109,000 -2 +8 United States*...... 5,615,000 63,603,000 -4 +2 *Represents about 64 per cent of total output in United States. Petroleum Crude oil production in the District in November continued at a level about 13 per cent above a year earlier, almost double the rate of increase for the first eleven months of the year. Output was 16 per cent above the November ten-year average. Oil production reported by the American Petroleum Institute and the ·Department of the Interior: Colorado................. Kansas.................... Nebraska................ New Mexico........... Oklahoma............... Wyoming................ Nov. 11 Mos. Change from 1940 1941 1941 Nov. 11 Mos. (In barrel~ ----n5er cent) 164~000 1,625,000 +31 +32 7,464,000 75,125,000 +33 +25 179,000 1,528,000 3,511,000 36,160,000 + 16 +1 12,763,000 141,756,000 +3 -1 2,408,000 27,330,000 +16 +17 Six states............... 26,489,000 283,524,000 United States ........ 124,424,000 1,276,645,000 +13 +16 +7 +3 The rapid decline in stocks of crude oil produced in this District has leveled off in recent weeks, partly the result of a decrease in the emergency movement of Mid-Continent crude by rail to the eastern seaboard, following the resumption of shipments of Gulf Coast Dec. 1 Nov. 1 Dec. 1 Aver. 1941 1941 1940 '36-'40 crude by tanker. Crude stocks in this District are 14 --(l'n thousands of units)-Beef, lbs ................................. 115,468 89,793 71,508 79,665 per cent less than a year ago. Pork, lbs ................................ 352,272 Lamb and mutton, lbs ........ 6,400 P~ultry, lbs .......................... 172,436 Miscellaneous meats, lbs ..... 72,830 ~ard, lbs ................................ 172,027 ggs, shell, cases................. 1,657 Eggs, frozen (case equiv.). 3,711 Butter, creamery, lbs .......... 152,526 Cheese, all varieties, lbs ....- 188,225 J J 313,268 408,900 4,783 4,427 127,981 159,110 63,553 65,572 173,156 232,472 3,857 1 969 4,396 2:608 186,635 67 598 188,727 137:389 362,070 4,504 132,595 66,790 107,731 1 883 2:539 94 614 120~12 Coal November output of bituminous coal in the District was unchanged from a year earlier, but for 1941 to date output shows an increase of 11 per cent. Bituminous coal production estimated from reports of the Department of the Interior: Flour Milling Activity at southwestern flour mills in November declined sharply from the rather high level of the pre- Colorado................. Kans. and Mo ......... ceding month and production, though above the New Mexico.......... . November average of the past ten years, was slightly Oklahoma............... Wyoming................ under a year earlier. Flour sales in November averaged only 26 per cent of production capacity, owing in Six states............... United States........ Nov. 11 Mos. Change from 1940 1941 1941 Nov. 11 Mos. --(In tons) ~ e r cent) 688,000 6,043,000 -10 +6 680,000 6,677,ooo +a +12 118,000 1,064,000 +24 +10 212,000 1,581,000 +5 +11 663,ooo 5,816,ooo +a +14 2,361,000 21,181,000 42,865,000 454,473,000 0 +7 +11 +10 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead November shipments of zinc ore from the Tri-State district were 21 per cent larger than a year ago, almost double the rate of gain for the first eleven months of the year, and lead shipments were 22 per cent larger than a year earlier. Production in the Tri-State area is running approximately 50 per cent above normal. Unsold stocks of zinc and lead are virtually negligible as the ore is being shipped out about as fast as it can be produced, with some producers sold well ahead. November shipments from the Tri-State district: ZINC ORE LEAD ORE Kansas ......................... Missouri ..................... . Oklahoma.................... Tons Value 10,580 $ 584,862 3,681 203,513 24,902 1,376,564 Tons Value 1,390 $ 95,308 146 10,009 201,321 2,939 Nov.1941.. .................. Oct.1941.. ................... Nov.1940 ................... . 11 Mos. 1941.. ............. 11 Mos. 1940............... 39,163 $ 2,164,939 43,878 2,350,769 32,468 1,566,269 433,929 21,440,717 390,264 16,080,082 4,475 $ 306,638 4,419 302,848 3,668 244,926 48,302 3,286,395 41,320 2,457,912 Employment The following table shows Department of Labor estimates of employment in nonagricultural establishments. The October figures are preliminary. Department of Labor employment estimates: Colorado............... . Kansas .................. . Missouri. ............... . Nebraska .............. . New Mexico .......... . Oklahoma............. . Wyoming............... Seven states.......... Oct. Sept. Change from 1940 1941 1941 Oct. Sept. ·--(Number)-(Per cent) 256,000 246,000 + 11 +7 328,000 327,000 +7 +10 907,000 881,000 +16 +13 220,000 219,000 +8 +9 78,ooo 81,000 +8 +14 315,ooo 314,ooo +7 +8 61,000 59,000 +13 +7 2,165,000 2,127,000 +11 +11 Building November construction awards in this area were double a year ago, owing to an exceptionally large amount of awards for public works and utility construction. Defense work accounts for the gain over a year earlier as non-defense construction has been greatly reduced in recent months by shortages of critical materials and the allocation of these materials to projects necessary to defense and the health and safety of the civilian population, including housing for defense workers, highways, and essential community facilities as well as plants, ammunition depots, storage warehouses, air bases, and army cantonments. Construction figures of F. W. Dodge Corporation: The value of November building permits issued in reporting District cities was about the same as a year earlier, in contrast wit h a gain of 13 per cent for the first eleven months of the year. The slackening evident in recent months is due primarily to a drastic curtailment in non-defense building. Value of building permits issued in District cities: Albuquerque, N. M .. Cheyenne, Wyo ......... Colo. Springs, Colo .. Denver, Colo.............. Hutchinson, Kans .... . Joplin, Mo .................. Kansas City, Kans ... Kansas City, Mo ....... Lincoln, Nebr ........... . Okla. City, Okla ....... . Omaha, Nebr ............ Pueblo, Colo ............. . Salina, Kans .............. Shawnee, Okla ......... . St. Joseph, Mo .......... Topeka, Kans ............ Tulsa, Okla................ Wichita, Kans ........... Change from 1940 Nov. 11 Mos. (Per cent) - 13 +4 -5 +29 +21 -13 +6 +19 +4 -16 +240 - 14 +380 - 23 - 21 +24 +10 -6 -21 -8 +50 -1 -48 +22 +233 -38 -85 -23 -8 +71 -14 - 21 -27 +11 +73 +102 - - -+2 +13 Lumber Retail lumber sales in the District in November were 17 per cent less than a year earlier, when Government buying had been in large volume. Sales in the first eleven months of 1941, however, still show a gain of about a third over the same period of 1940. Lumber stocks are 10 per cent heavier than a year ago, though this increase is much less than for other recent months. Collection ratios in November were under a year earlier for the first time in fourteen months. Lumber trade at 148 chain retail yards: Nov.1941 per cent change from Oct.1941 Nov. 1940 -17 Sales of lumber, board feet ..................... . -12 Sales of all materials, dollars ................. . -12 +16 Stocks of lumber, board feet ................... . -2 +10 Outstandings, dollars ............................... . -1 +so Life Insurance Life insurance sales in the District in recent months have been appreciably above the very low levels prevailing at this time a year earlier. The Life Insurance Sales Research Bureau report: Colorado ................ . Kansas .................... Missouri. ................ Nebraska ............... . New Mexico .......... . Oklahoma.............. . Wyoming ............... . Kansas City area................ 43,157 279,480 37 Eastern states ............... 458,620 5,575,848 Seven states ........... United States....... . +86 +57 Nov. 11 Mos. 1941 1941 ---v:>onars ) 176,000 2,236,000 164,000 1,648,000 70,000 754,000 935,000 14,337,000 24,000 368,000 68,000 524,000 24,000 720,000 284,000 4,243,000 97,000 2,355,000 361,000 5,177,000 428,000 5,061,000 50,000 1,245,000 30,000 330,000 5,000 164,000 11,000 574,000 63,000 1,129,000 278,000 5,389,000 379,000 5,763,000 Distr ict, 18 cities ...... 3,447,000 52,017,000 Nov. 11 Mos. Changefrom1940 1941 1941 Nov. 11 Mos. (Thousand dollars) (Per cent) Residential building.......... 6,335 70,130 +21 +59 Nonresidential bldg........... 8,650 96,668 -36 +94 Public wks. construction... 9,921 51,201 +549 +14 Utility construction........... 18,251 61,48i +1,062 +437 +98 +21 7 Nov. 11 Mos. Change from 1940 1941 1941 Nov. 11 Mos. (Thousand dollars) (Per cent) 4,106 52,999 +3 +1 7,420 79,769 +27 +15 14,833 178,522 + 6 0 5,223 61 ,484 +8 +s 1,294 12,108 +60 -6 6,852 82,041 -1 -4 873 11,281 +9 +17 40,600 581,692 478,204 6,439,557 +9 + 15 +2 +s REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 8 NATIONAL SmvIMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDU STRIAL PRODUCTION f>tillCCHT 180 170 160 I 150 140 130 120 ~( \ 110 100 90 80 ,.._/ /✓+\ ...:___1I /' 7 7 '\I _7 I 7 II" 170 160 150 140 130 120 110 100 '-i . 90 00 70 70 1936 1935 1937 1938 1940 1939 1941 Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average=l00. By months, January, 1935, through November, 1941. WHOLESALE PRICES OF BASIC COMMODITIES ;\Ji 180 160 140 l-------+---,r1t~, FOODSTUFFS +---I---+-~. - ,,, \\ • 160 -t---+--+---+-11, "'-'-----1 ' 1935 1936 1937 140 120 193 8 1939 1940 1941 Bureau of Labor Statistics' indexes based on 12 foodstuffs and 16 industrial materials, August, 1939=100. Thursday figures, January 3, 1935, through December 11, 1941. MEMBER BANI< RESf:.RVE.3 A ND RELATE.D 81LL10.'lS OF OOLL.._R~ ITEMS S 1LLIONS0r DOI.LAR S Industrial activity was maintained at a high rate in November and the first half of December and distribution of commodities continued in large volume. Our entry into the war was reflected in a sharp advance in the prices of some commodities, some decline in security prices, and further curtailment of nonmilitary production. PRODUCTION Volume of industrial output was sustained in November at the high rate of the previous two months, although a decline is usual at this season. The Board's adjusted index advanced from 163 to 167 per cent of t~~ 1935-~~ _averag~. In industries engaged in production of armament and mumtion~ ac~1vity contI~ued to increase and in most other lines volume of output was mamtamed or declmed less than seasonally. Crude petroleum production increased further in November. BitumiI1;ous coal production declined somewhat owing to temporary shutdowns at some mmes during November, and anthracite production was curtailed as a result of unusually warm weather in some areas and the existence of considerable stocks of coal accumulated in earlier months. Following a declaration of war by this country in early December further steps were taken to curtail output of nondefense goods using critical materials. Output quotas for passenger cars and household appliances were greatly reduced and cessation of output of some other products ,vas ordered as of the end of January. Also, the production and sale of new automobile tires and tubes for civilian use were halted temporarily, pending establishment of a system for controlling their distribution. Value of construction contracts awarded in November declined sharply from the high level of other recent months, according to figures of the F. vV. Dodge Corporation. Awards for privately-financed construction decreased more than seasonally and contracts for publicly-financed projects also declined following a continued large volume of awards since last spring. Total awards in November were about a fifth larger than a year ago, while for the first ten months of the year they were three-fifths larger. DISTRIBUTION Volume of retail trade increased in November following some decline in the previous month. Department store sales, as measured by the Board's seasonally adjusted index, advanced to 115 per cent of the 1923-25 average as compared with 105 in October and 116 in September. Larger sales in November were also reported by variety stores. Sales of automobiles increased somewhat, according to trade reports, but, as in other recent months, new car sales were smaller than output and dealers' stocks rose further. In the second week of December sales at department stores rose less than seasonally, particularly in the coastal regions. Freight traffic on the railroads continued in large volume in November and the first half of December. Grain shipments increased considerably and loadings of miscellaneous merchandise, which includes most manufactured µroducts, were maintained at the high level reached several months earlier. Coal loadings declined somewhat, owing in part to temporary shutdowns at some mines. Shipments of most other classes of freight decreased less than seasonally. COMMODITY PRICES ,=,=:=!:===--!cc=~"" 14 4 r - - - - ' - -- " - - - - - - 1 0 ~----'------'-----'0 1939 I<>-~:) I'?'\ I 1939 1$40 1541 Wednesday figures, January 4, 1939, through December 10, 1941. MONEY RATES IN NE W YORK CITY Following the entry of the United States into the war, prices of grains, livestock, and foods rose sharply. Prices of most industrial materials traded in the organized markets, being limited by Federal regulation, showed little change. Additional measures to prevent advances in wholesale prices were soon announced for wool and shellac and for cocoa, coffee, pepper, and fats and oils. Retail food prices, as measured by the Bureau of Labor Statistics' index. increased 1 ½ per cent further from the middle of October to the middle of November to a level 18 per cent above a year ago. Indications are that retail prices of both foods and other commodities continued to rise in December. BANK CREDIT ' Total loans and investments at banks in leading cities continued to advance during November and the first two weeks of December, owing mostly to increased holdings of Government securities at banks outside New York City. Commercial loans, after showing little net change in November, again increased sharply in the first two weeks of December. Excess reserves increased through most of the period as a result of Treasury expenditures from Reserve Bank balances, but declined sharply on December 15 when these balances were replenished in connection with the issue of 1.6 billion dollars of new Government securities. Money in circulation has continued to show a marked increase. l'•./\jl,\ I """·,, 1----_,_'f_'~_'"_-'''\-, "\ TREASURY NOTES ,, / '\,.~ I ) •) fU,IIS I ~l - + - - - 1 - - - - - l '\,.,./~.J,_ :~ I \.,,,J \-..J,1\,,v:"''\,. / 0 L___..=__i_:c____:c____:.J___ 1935 1936 1937 I ___;:~=·,~.~~ 1938 1939 1940 1941 Weekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds callable after 12 years, and average discount on new issues of Treasury bills offered within week. For weeks ending January 5, 1935, through December 13, 1941. YIELDS ON UNITED STATES GOVERNMENT SECURITIES 0 The yield on 2½ per cent United States Government bonds of 1967-72, which !eached a record low level of 2.32 per cent on November 5, advanced somewhat m November_ and, after the entry of the United States into the war, rose to 2.50 p~r cent. Yields on short-term Governrnent securities increased further. The yield on Treasury notes of December 1945 advanced to 0.93 per cent on December 17. compared with 0.62 per cent on September 15, and the rate on three-month bills rose to .295 per cent.
@FedFRASER