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MONTHLY REVIEW Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. 22, o. 6 FEDERAL RESERVE BANK OF KANSAS CITY JUNE I, 1937 Business in the Tenth Federal Reserve District APRIL 1937 COMPARED WITH APRIL 1936 _._ _____ i._ ___ _ Denver• COLO. --• --·-· -•• - 40 30 20 10 • : ·--------KANSA :• • ·--·-··--·-··-··-r-l--I I % INCREASE 10 20 30 40 % DECREASE ' April was dry and declines occurred in wheat prospects in important sections. Parts of the District received rains in May, but the "dust bowl" regions are still dry. Wheat prices tended lower, but com and oats were higher. Cattle prices were steady, while sheep were lower. Prices of other live stock were little changed. Fann income is about a third higher than last year, due to higher prices of farm products. April department store sales were 5 per cent above a year ago despite the fact Easter was in March this year. Production of flour and petroleum was abnormally large while cattle and hog slaughter and coal production were low. I -7- Trade __ Wholesale Sales .... __ Dept. Store Sales_ _ _ Corn _ _ __ ____ oats _____ ______ cattle_______ __ _ Sheep _ _ _ Comtruction 5B __Total Awards_ I ___ Cattle Slaughter.... __ Calf Slaughter __ __Hog Slaughter__ .... Sheep Slaughter___ .... Crude Petroleum_ ....Bituminous Coal._ Zinc Ore Shipments 17 Lead Ore Shipments M i1cellaneoua ______ Rainfall .._ _ •Cash Farm Income ___ •Employment _____ _____ •Pay Rolls ______ •For pm·lous month -• •• -• ■ ■ ____ Calves ____ ____ Hogs ____ • -· • Marketing& _____Wheat______ _______Flour____ -· --· ■ ____ Lumber Sales ___ Production • ■ ___ Life Ins. Sales __ ?4 _ Value of Permits_ . ■ ■ _.Demand Deposits ... n, ···--·Res. Awards _____ •• ■ __ Mem. Bk. Loans ,__ ■ • 10 20 30 40 .._Mem. Bk. Invest. __ ■ 1• --· _, _, 40 30 20 10 F. R . Bk. Clearings I Deposit.s and bank investments were smaller in April than in March. Commercial loans and member bank reserves were appreciably larger. Financial % INCREASE % DECREASE ........ Bank Debits ______ ■ )(ANS. I BUSINES'S INDICATORS 4 MOS. 1937 COMPARED WITH 4 MOS. 1936 ■ ■ I ■ t• :, . ■ ,i 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS The principal items of the weekly condition statements of the Federal Reserve Bank of Kansas City and branches: Member Bank Operations In the four-week period from April 7 to May 5, loans and investments of fifty-one reporting banks in the Change from Tenth District continued to decline although at a much May 6 April 7 May 6 1937 1937 1936 more moderate rate than in February or March. An (In thousands of dollars) increase in the volume of commercial loans was largely Total reserves .....·-··-·········--···-·-··----· 290,308 +9,685 +48,743 390 +200 +249 offset by a decrease in loans on securities. However, Bills discounted ............ ·-·····-·-···-···· 86 -1 -47 purchased................-.............. . in the case of investments, a further decrease in hold- Bills 683 -31 -260 Industrial advances ........... ·-·······-··134 -5 -456 ings of direct Government obligations and "other" Commit. to make indust. adv.._. __ . 124,128 +2,014 +7,284 Government securities·--····· securities was offset only in small part by an increase U.S. 454,255 +12,610 +59,788 Total resources.. ·-············-·--··-···-····· +576 +14,569 in holdings of obligations guaranteed by the Govern- F. R. notes in circulation............. . 160,930 241;606 +9,317 +68,100 Member bank reserve deposits ... . ment. Dollar volume of check collections through this bank On May 1 the remaining half of the recent increase in reserve requirements became effective. Reserve showed no change from March to April although usually balances at this bank, which had declined somewhat there is a decline. So far this year dol1ar volume is 11 since early March, were built up rapidly during t he per cent ahead of a year ago. Check collections through the Federal Reserve Bank two weeks ended May 5, reaching a level slightly above the previous high of March 10. The increase in reserve of Kansas City and branches: balances was attended by a substantial decline in interAMOUNT ITEMS 1937 1936 1937 1936 bank deposits while demand deposits also decreased. (In thousands) In view of the fact that reserve deposits of all member ApriL...·-··········-·-·· 5,907 $1,069,304 $ 883,693 6,188 919,545 6,109 1,069,392 6,700 banks showed a greater gain than weekly reporting March·---·····--··-···· 3,527,412 23,530 22,780 3,916,918 banks, it is apparent that smaller banks drew rather Four months....... . heavily on correspondent balances. The volume of Bank Debits member bank borrowings at this bank, while larger than Following a somewhat greater than seasonal increase early this year, has shown no appreciable change in conin March, debits to individual accounts by banks in nection with the March 1 and May 1 increases in rereporting centers showed less than the usual seasonal serve requirements, member banks evidently having met decrease in April. any deficiencies by t he sale of securities and by drawing Debits to individual accounts by banks in thirty on bank balances. Tenth District cities: The principal items of the consolidated weekly conChange from Apr. 1937 Mar. 1937 Apr. 1936 dition statements of fifty-one reporting member banks: Loans and investments- totaL .. _ Loans and discounts Secured by stocks and bonds.... All other loans and discounts __. Investments U. S. Govt. direct obligations_. Oblig. guar. by U. S. Govt ....... Other securities_··-······················· Reserve with F. R. Bank.... ·-······· Demand deposits-adjusted__······Time deposits ...........·-············-········ U.S. Government deposits. __ ··-···· Interbank deposits ···········-············ Change from May 6 April 7 May 6 1937 1937 1936 (In thousands of dollars) 691,006 -2,647 +62,867 64,572 198,405 -670 +757 +5,269 +25,333 256,804 45,390 135,835 164,953 471,163 145,571 3,647 359,880 -1,178 +629 -2,085 +8,774 -5,980 -275 -1,742 -12,400 +19,561 +2,043 +10,661 +50,529 +37,820 +1,480 - 15,005 +5,049 Reserve Bank Operations Incident to recent changes in the Government securities holdings of the Federal Reserve System, important changes occurred in the portfolio of this bank. This bank's participation in the System account was increased about 2 million dollars during the four-week interval from April 7 to May 5. This increase reflected an increase of 3 million in Government bonds, an increase of 1½ million in Treasury bills, and a decrease of_2½ million in Treasury notes. Albuquerque, N. M ........... 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. ... (In thousands of doliars) 14,418 +475 +3,310 3,529 -187 +543 27,624 - 3,681 +2,648 5,447 +267 +521 8,513 -425 +782 13,512 -6,789 -503 186,249 - 4,842 +39,815 3,482 +212 +308 10,651 +271 +2,366 2,666 - 138 -70 3,949 - 158 +1,006 1,773 -64 + 182 13,754 +1,001 +3,933 2,992 +94 +581 10,524 -822 +1,336 14,937 +49 +2,295 335,244 +7,809 +52,634 3,500 -383 +450 28,183 -2,537 +1,623 7,981 - 274 +82 107,716 - 10,221 +12,286 2,683 -895 -291 159,716 - 3,305 +7,510 3,969 -514 +265 21,948 +2,759 +2,474 9,517 +83 +2,684 27,638 -1 +344 18,966 + 1,607 +2,955 161,668 +2,753 +34,257 50,225 -1,750 +10,038 1,262,874 37,133,334 -19,606 -4,869,696 +186,264 +2,350,672 FEDERAL RESERVE BANK OF KANSAS CITY Trade Wholesale sales and collections, reported by the Department of Commerce: DEPARTMENT STORE SALES Two important factors condition any comparison of department store sales with a year ago~· first, Easter occurred in March this year and in April last year; and, second, retail prices have risen about 8 per cent during the past year. There was a decline of about 5 per cent in sales from March to April as was to be expected but, notwithstanding the early date of Easter this year, the value of April sales was about 5 per cent greater than in April a year ago. However, in view of the rather marked rise in prices, it is possible that the actual volume of goods moving into consumers' hands was less than in April of last year. Cool weather this spring has had a retarding effect on sales, particularly style merchandise. Stocks of merchandise increased about 2 per cent during April and at the close of the month were about 13 per cent heavier than a year ago. Collections on open accounts averaged 46.7 per cent of receivables in April, 46.3 per cent in March, and 45. 7 per cent in April of last year. Installment collections averaged 15.9 per cent in April, 15.8 per cent in March, and 16.3 per cent a year ago. Department store sales and Rtocks in leading cities of the District: SALES STOCKS Apr. '37 4 Mos. '37 Apr. 30, '37 comp. to No. of comp. to comp. to Stores Apr. '36 4 Mos. '36 Mar.31,'37 Apr.30,'36 ~ cent increase or decrease) Denver.............. 4 +13.9 +11.3 + 3.8 +19.4 Kansas City.... 4 -2.9 +6.7 - 1.8 +10.2 Oklahoma City 3 +0.9 +3.5 +2.7 +6.3 Omaha.............. 3 +1.1 +0.6 +1.0 +4.6 Tulsa................ 3 +4.4 +10.8 + 1.8 +12.4 Wichita............ 3 +22.0 +12.6 Zero + 14.2 Other cities ...... 21 +3.7 + 5.7 +4.2 +17.3 District·---·--···· 41 +5.4 +7.6 3 +1.9 +13.0 WHOLESALE SALES The value of April sales of wholesalers exceeded that SALES No. of Firms Drugs................ Dry goods ........ Furniture.......... Groceries.......... Hardware.______ . Paper................ All other lines.. 6 3 4 9 6 3 12 Apr. '37 4 Mos. '37 COLLECTIONS* Apr. Mar. Apr. comp. to comp. to Apr. '36 4 Mos. '36 1937 1937 1936 (Per cent change) (Median percentages) 80.8 82.5 78.1 +3.7 +7.6 52.4 54.7 50.6 +26.8 +24.3 49.7 47.8 48.5 +27.6 +21.9 100.5 99.0 97.0 +9.5 +7.3 49.0 46.0 61.0 +1.2 + 4.8 72.6 62.4 66.8 +21.8 +9.6 80.0 73.1 76.0 +15.0 +15.6 District·----··-·--· 43 +11.4 +10.7 73.3 73.3 69.2 *Amounts collected during month on receivables at beginning of month. Crops Winter wheat prospects in the District declined by about 8½ million bushels during April, principally as a result of declines of 11 million bushels in Kansas and 2 million in Nebraska, offset in part by a gain of 5 million bushels in Oklahoma. The May 1 condition of winter wheat indicated a crop about 80 million bushels larger than a year ago but 13 ½ million bushels under the average from 1928 to 1932. An acute moisture shortage in the western third of Kansas, resulting in considerable crop deterioration, continued in the first three weeks of May. Acreage and production of winter wheat, as estimated by the Department of Agriculture on May 1: PRODUCTION ACREAGE Colo .._... Kans ... .. Mo. _____ . Nebr ... .. N.M .... . Okla. ___ . Wyo ..__ . 7 States u. s .. _... Abandoned For harvest Harvested 1937 1936 1937 1936 (Per cent ) a,ooo acres) 826 455 40.0 62.0 13,549 10,452 18.0 26.6 3,116 2,086 8.0 7.6 29.0 15.4 3,157 2,938 246 125 40.0 65.3 4,449 3,440 18.0 29.0 55.0 80.0 1 108 57 20.0 26.7 11.1 24.3 25,451 47,410 Indic. Final 1937 1936 (1,000 bushels) 9,664 5,915 162,588 120,198 42,066 31,290 42,620 45,539 2,460 750 51,164 27,520 1,080 613 19,553 311,642 231,725 37,608 654,295 519,013 of a year ago by about 11 per cent, or approximately Following the rather i avorable moisture situation the average rate of increase so far this year. Sales of through March, rainfall in April was much below normal. dry goods, furniture and house furnishings, and paper This development, together with a continuation of unand paper products continued to show relatively the seasonably cool spring temperatures, was reflected in greatest increases over last year. Total sales in April the backward condition of crops and pastures on May 1. remained at the March level. Sales of drugs were 5 The unusually poor condition of pastures was due in per cent and paper 7 per cent smaller in April than in part to lateness but especially to droughts, close grazMarch; sales of dry goods and furniture were 9 per ing, and winter killing in many areas. The moisture cent larger; and sales of groceries and hardware were situation, however, still was much improved over that virtually unchanged. of a year ago because of above normal precipitation Collections on the whole were made at about the earlier this year. Good rains were received in parts of same rate in April as in March. The highest collection Wyoming, Nebraska, Kansas, and Oklahoma in the percentage was shown by the groceries and foods group, first three weeks of May. Prospects for irrigation water the median collection figure being 100.5 per cent. This continued favorable in Wyoming, Colorado, and New indicates that customers of these firms took less than Mexico, the cool spring having retarded the run-off from high mountain areas. thirty days on the average to pay for their purchases. 0 4 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Rainfall as reported by the United States Weather Bureau: COLORADO Denver...................... Leadville.................. Pueblo......... ·- ········ Lamar·---················· Garnett .................... Sunbeam .................. April 1937 4 Months 1937 Normal Total Normal Total ~ i n c hes_)_ 4.03 1.43 2.06 2.99 6.08 5.87 1.19 1.78 2.68 .84 1.31 2.39 3.43 1.65 .66 1.77 1.30 .21 .59 .75 2.42 .54 .95 2.53 KANSAS Topeka.-................... Iola............................ Concordia................ Salina........................ Wichita.................... Hays.-....................... Dodge City.............. Elkhart. ___ ··-··········· Goodland._ ............... 1.76 3.39 .46 .21 .57 .38 .52 .28 .69 2.78 3.90 2.36 2.47 2.91 2.29 1.94 1.75 2.06 6.24 10.83 4.72 3.94 5.64 2.14 2.95 1.13 3.28 7.33 9.29 5.08 5.56 6.69 4.37 4.01 3.44 3.74 2.01 2.51 2.79 3.19 3.14 4.70 6.72 8.47 12.10 8,62 8,61 11.74 1.67 1.22 2.10 1.09 .61 1.09 .59 1.22 2.51 2.53 2.69 2.45 1.86 2.15 2.12 1.86 4.64 5.18 6.11 3.86 4.00 3.10 1.45 2.31 5.47 5.39 6.36 5.12 3.74 3.90 3.81 4.15 .22 .49 .06 1.70 1.00 .64 1.02 2.55 2.80 3.20 3.22 2.64 2.50 3.70 2.66 2.11 1.76 1.37 .66 4.13 4.58 3.29 3.88 3.10 3.26 2.49 10.36 12.86 5.14 8.68 4.03 3.59 3.90 10.72 12.74 7.57 9.07 6.40 7.10 6.60 1.59 1.86 2.68 1.24 1.99 1.96 2.06 1.92 4.42 5.16 4.59 5.39 4.07 4.71 4.44 4.63 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. __ ·-············ Spring farm work was backward in some sections because of the cool weather. Seeding of oats was about completed as far north as Nebraska by the middle of April and planting of corn and grain sorghums was going forward as rapidly as conditions permitted. Potatoes, although planted late, were growing well. Cotton planting had commenced in Oklahoma and by the middle of May cutting of the first crop of alfalfa was about to start in the southern part of the District. Fruit crop prospects this year are good. ; Grasshoppers were reported hatching in large numbers but as yet have done little damage to crops. Receipts of grain at five markets in the District: Wheat Hutchinson ........ Kansas City ...... Omaha................ St. Joseph .......... Wichita .............. 466 2,101 408 96 576 April 1937.......... March 1937........ April 1936.. ........ 4 Months 1937.. 4 Months 1936.. 3,637 4,832 2,896 16,171 14,994 Com Oats Rye Barley Kafir (In thousands of bush~ 3 4 59 126 8 800 206 98 457 704 35 3 16 128 92 8 1,397 2,087 5,054 7,713 14,971 1,002 1,391 848 5,007 4,379 43 69 66 129 232 239 92 277 431 911 66 57 93 282 455 Cash prices of wheat at the Kansas City market declined during April and the forepart of May, losing the gains recorded in February and March. Corn prices advanced further in April but lost all of this gain early in May as pastures became available. Cash grain prices at the Kansas City market: May 15 Apr. 30 Mar. 31 Apr. 30 Apr. 30 1935 1937 1937 1936 1937 N o.1 hd., dk. wheat, bu. $1.30 ½ $1.33½ $1.41¼ $ ~ $1.05 .91.½ No. 2 mixed corn, bu... 1.32 1.38 1.30 .½ .62 No. 2 white oats, bu..__ .55.½ .51 .56 .53½ .26 .71 No. 2 rye, bu................. 1.05 1.10 1.10 .51 .71 No. 2 barley, bu........... .82 .87 .90 .44 1.95 2.36 2.29 1.13 No. 2 white kafir, cwt. 2.46 Live Stock MARKETINGS Receipts of cattle, calves, and hogs at six markets in the District declined somewhat in April while marketings of sheep increased. The increase in sheep receipts reflected principally heavy marketings of shorn yearlings and wethers from southwestern areas since the movement of fed lambs from the northern Colorado, Arkansas Valley, and Scottsbluff feeding sections had begun to slacken and was practically completed by early May. Although larger than a year ago, marketings of sheep were 18 per cent below the April average for the past ten years. Cattle marketings were 11 per cent below the average and hogs continued to arrive in less than half the normal volume. Calf receipts were 20 per cent above the average. Live stock receipts at the six markets: Denver.......................... Kansas City................ Oklahoma City............ Omaha .......................... St. Joseph ...... - ........... Wichita ........................ Cattle 36,071 96,417 37,865 76,703 23,365 31,738 Calves 4,820 19,904 9,642 10,057 7,516 6,496 Hogs 28,380 101,259 28,066 84,802 48,235 24,723 Sheep 197,253 157,871 7,970 145,141 119,865 14,480 642,580 315,465 58,435 615,040 68,908 374,933 633,369 387,192 54,977 254,921 1,549,425 2,352,767 218,840 1,829,484 2,330,618 Grain Marketing ~ril 1937 .................... 301,149 arch 1937.................. 336,364 321,878 April 1936......·-··········· Four months 1937...... 1,237,104 Four months 1936...... 1,329,240 Market supplies of grains generally declined in April, reflecting increased activity in spring farm work and further decreases in farm reserves of grains. Receipts of wheat represented but two-thirds and corn about one-third of the April ten-year average volume. Cattle values strengthened at the Kansas City market duringJi.'A.pril while hog prices showed little change and sheep and lamb prices closed somewhat lower. As in March, no strictly prime finished heavyweight steers PRICF.S FEDERAL RESERVE BANK OF KANSAS CITY were available, and the highest April cattle price was far below a nominal quotation of from $15 to $16 for animals of that description. The hog top, while lower than a year ago, was higher than in any other April since 1930, equaling the top price at that time. Increased receipts were a factor i~ the sheep and lamb price decline, but prices still were at the highest April level since 1929. During the forepart of May, hog prices moved up sharply to the highest level of this year and there was also an advance in lamb prices, but cattle prices were barely steady to slightly lower. Comparative top prices paid for full loads of live stock at the Kansas City market: Beef steers............................ Calves·---··························· Stocker cattle...................... Feeder cattle........................ Hogs·-····-······························ Apr. 1937 Mar. 1937 Apr. 1936 (In dollars per hundredweight) 13.50 14.50 9.75 10.00 10.00 9.00 8.76 9.25 8.50 11.16 10.00 8.86 10.20 10.35 10.56 12.76 12.75 12.35 13.00 13.75 12.35 10.50 11.50 10.00 5 below normal. However, moisture supplies were.._ good in the remainder of Wyoming, in the western and mountain sections of Colorado, and in the high sections of New Mexico and were generally ample in the eastern parts of Nebraska, Kansas, and Oklahoma. While ranges and pastures were late, cattle in these two areas were generally in good condition and calf crop prospects were favorable, with good late lamb crop prospects in New Mexico and Colorado. The spring movement of southwestern cattle to the Osage pastures of Oklahoma and the Blue Stem pastures of Kansas, while starting somewhat later than usual because of the slow development of grass, apparently had reached peak volume at about the usual time near the close of April. Reports indicated the movement was virtually completed by the middle of May. Farm Income March receipts from the sale of principal farm products were larger than a year ago in all states in the District except Nebraska, where a considerable amount STOCKERS AND FEEDERS of liquidation of live stock has taken place since last Although stimulated to some extent by growth of summer. Larger receipts from wheat in Kansas, from pastures and other spring feeds, shipments of stocker potatoes in western states, and from cotton in Oklaand feeder cattle, calves, and hogs from four markets homa were contributory factors in these increases. in the District were slightly less in April than in March. Including Government payments, total income in the The countryward movement of sheep increased but fell seven states in March was 38 per cent greater and in 41 per cent below the April ten-year average while the first quarter of the year 19 per cent greater than a shipments of hogs were less than one-third of the average year ago. volume. Shipments of cattle were 4 per cent and calves Cash farm income, estimated by the Department of 9 per cent below the average. Feed costs are high in Agriculture: Live stock Govt. relation to prices of live stock and live stock products, Total and products payments a situation which has been reflected in heavier live (In thousands of dollars) 3,375 14,763 10,169 1,229 stock slaughter. High feed costs have also resulted in Colorado......... . ............. . 6,645 21,932 11,641 4,746 decreased milk production, which in Nebraska, Kansas, Kansas Missouri._........ . 2,406 17,828 13,353 2,069 4,648 21,631 13,107 3,776 and Missouri on April 1 was below the record low of Nebraska......... . · 1,713 New Mexico .... 276 1,107 330 two years earlier. Oklahoma........ 2,425 18,168 7,560 8,183 Wyoming._...... . 3,084 510 2,257 317 Stocker and feeder live stock shipments: Fed lambs............................ New crop spring lambs ...... Sheep......·-····-----········--······· Denver·-······················· Kansas City................ Omaha.......................... St. Joseph .................... Cattle 6,394 40,350 9,914 4,216 Calves 1,673 3,597 1,456 479 Hogs 249 1,730 1,179 484 April 1937.................... March 1987.................. April 1936.................... Four months 1937...... Four months 1936...... 60,874 62,248 61,977 229,611 233,175 7,205 9,315 7,766 32,253 25,751 3,642 3,799 3,458 12,583 14,867 Sheep 4.956 11,740 13,329 10,113 - -- 40,138 32,428 43,912 170,761 148,163 RANGES AND PASTURES Ranges were late on May 1, growth of new feed having been retarded by cold weather and deficient moisture during April. Moisture continued short in northeastern Wyoming and over much of the Plains area from western Nebraska southward. In that area, dust storms have caused some damage to ranges and have been hard on live stock. Cattle were generally thin and have made slow gains and calf crop prospects were Mar. 1937........ Feb. 193L....... Mar. 1936........ 3 Mos. 1937.__. 3 Mos. 1936.__. 19,185 16,941 10,675 56,262 38,167 59,184 46,336 57,897 165,685 179,078 20,650 11,665 3,089 40,955 3,389 99,019 74,942 71,661 262,802 220,634 The national index of prices received by farmers rose 2 points between the middle of March and the middle of April to 130 per cent of the pre-war average. However, the ratio of prices received to prices paid by farmers for all commodities remained unchanged at 97 per cent. A year ago this ratio was 87 per cent. Employment and Pay Rolls Employment and pay rolls in the District as a whole showed little change from the middle of March to the middle of April. However, there was a gain of about 7 per cent in employment and of 12 per cent in aggregate weekly pay rolls as compared with a year ago. REVIEW O}i1 AGRICULTURAL AND BUSINESS CONDITIONS 6 Employment and pay rolls, by states, reported by the Department of Labor: April 1937 per cent change from March 1937 Employment Pay Rolls Colorado...................................................... - 0.4 - 0.1 Kansas.......................................................... - 0.7 +2.8 Missouri. _..................................................... - 0.7 - 0.1 Nebraska...................................................... +1.2 +3.6 New Mexico.. .............................................. +1.9 -3.4 Oklahoma.................................................... . +3.0 +3.6 Wyoming·-··················································· -3.0 -15.2 Flour Milling Volume of southwestern flour production was maintained in April at an unusually high level, milling operations being increased to 73 per cent of capacity from 69 per cent in March. Flour business was more active in the third week of April, when the wheat market declined, than in any other week this year, but flour sales showed only moderate improvement for the month. As ,Ja result of the rather high rate of mill activity, thelf"backlog of orders on mills' books has been reduced to about normal proportions. Shipping directions tended to slacken toward the end of the month. Output of flour in April was 31 per cent greater than a year ago when operations were 55 per cent of capacity. Southwestern flour production, estimated from the weekly reports of the Northwestern Miller: April 1937 Atchison ................................ Kansas City........................ Salina.................................... Wichita ............................... . Other cities......................... . 133,000 642,000 178,000 228,000 1,067,000 Change from March 1937 April 1936 (In barrels) +26,000 +15,000 +172,000 - 14,000 + 26,000 +106,000 +17,000 +204,000 +28,000 TotaL.·-······························· 2,248,000 +46,000 +534,000 *United States.. .................. 5,363,000 -47,000 +266,000 *Represents about 60 per cent of total output in United States. Flour prices at the Kansas City market declined during the forepart of April but later regained most of the loss, while millfeeds closed sharply lower. Declines of $4.50 a ton for zinc and $14.00 a ton for lead during April reflected the unsettled condition of domestic and foreign markets. At the close of the month, zinc at $45.00 and lead at $70.00 per ton were $4.50 and $25.00, respectively, below this year's high point reached in March. However, zinc still was $13.00 and lead $20.00 higher than a year ago. Petroleum Daily average output of crude petroleum in the District continued to increase in April, gross production reaching a record high level for that month which was 19 per cent above a year ago and 29 per cent above the April average during the past ten years. Field operations have been active, particularly in Kansas, and current reports indicate a heavy drilling program in prospect for spring and summer months. Crude oil production, estimated from American Petroleum Institute data and reports of the Bureau of Mines: APRIL 1937 Gross D.Av. Colo.._... K ans .... N.M ..... Okla ....... Wyo.·-··· 5 States u. s....... 130 5,743 3,165 19,728 1,599 4.4 191.4 105.5 657.6 53.3 --- - -30,365 1,012.2 103,956 3,465.2 APRIL 1936 MARCH 1937 Gross D.Av. Gross D.Av. (In thousands of barrels-)5.3 159 142 4.6 163.6 4,908 6,030 194.5 69.6 2,088 3,162 102.0 574.2 17,226 20,173 650.8 36.8 1,104 50.5 1,564 - - - - -- 31,071 1,002.4 106,724 3,442.7 -----25,485 849.5 90,479 3,016.0 The high level of production resulted in further heavy runs to storage in Oklahoma and Kansas, where stocks of crude petroleum rose from 119,616,000 barrels on April 3 to 122,454,000 barrels on May 1. Stocks in the Rocky Mountain area showed virtually no change. With the approach of the season of heavy consumption, there was less concern over gasoline stocks. Crude oil prices were unchanged but prices of tractor fuels and kerosene tended to weaken by early May because of the delay in plowing operations. Coal Zinc and Lead Zinc and lead shipments from the Tri-State district of Oklahoma, Kansas, and Missouri declined in April, zinc falling below a year ago. Demand for concentrates was much less active than in March and output also showed a tendency to level off. Zinc and lead shipments, estimated from the weekly reports of the Joplin News Herald: ZINC ORE Output of bituminous coal in the District during April declined substantially from the unusually high level reached in March. This decline in production was a natural result of the previous accumulation of stocks in anticipation of a possible strike at bituminous coal mines on April 1. Bituminous coal production, estimated from reports of the Bureau of Mines: Colorado............................. . Kansas and Missouri... ...... . New Mexico ..... .................. . Oklahoma ........................... . Wyoming............................. . Change from April 1937 March 1937 April 1936 (In tons) -455,000 -114,000 312,000 -141,000 250,000 - 658,000 133,000 -64,000 +18,000 25,000 -110,000 -16,000 -96,000 309,000 -282,000 Six states.............................. United Stat es...................... 1,029,000 -1,569,000 25,735,000 -25,580,000 LEAD ORE Kansas............. . Missouri ........... . Oklahoma ........ Tons Value 13,030 $ 570,967 3,772 164,926 25,037 1,094,149 Tons Value 1,508 $ 108,066 487 35,290 3,803 274,812 April 1937....... . March 1937...... April 1936. ...... 4 Mos.193L ... 4 Mos.1936._ .. . 41,839 $1,830,042 45,484 2,029,127 42,924 1,372,479 163,069 6,701,419 153,665 4,915,647 5,798 $ 418,168 7,712 650,980 3,270 163,500 21,733. 1,672,290 17,391 848,625 -349,000 -4,717,000 FEDERAL RESERVE BANK OF KANSAS CITY Meat Packing Packers' purchases at the six principal markets in the District indicated a decline in the slaughter of all classes of live stock in April. Cattle and hog slaughter was much lighter than a year ago, cattle falling 11 per cent and hogs 52 per cent below the April ten-year average. The slaughter of calves and sheep, however, was heavier than a year ago, calves exceeding the average by 32 per cent but sheep falling 14 per cent below the average volume. Packers' purchases at the six markets: Denver.......................... Kansas City.... ............ Oklahoma City............ Cattle 16,077 42,686 21,985 St. Joseph .................... Wichita ........................ 53,516 17,089 13,616 April 1937.................... March 1937.................. April 1936 .................... Four months 1937...... Four months 1936...... 188,694 186,397 712,970 783,405 Omaha .......................... Calves 3,194 17,191 4,862 7,664 164,969 7,329 7,002 Hogs 26,851 93,835 21,565 73,092 46,333 23,756 Sheep 31,624 105,557 7,221 104,678 94,569 14,159 357,808 47,242 285,432 52,045 382,656 330,158 316,545 39,119 333,720 202,607 1,368,549 1,405,847 177,774 1,519,327 1,312,406 7 of 21 per cent in total awards for the first four months of 1937 as compared with the same period in 1936. The value of construction contracts awarded, reported by the F. W. Dodge Corporation: TENTH DISTRICT Total April 1937.... March 1937.. April 1936.... 4 Mos.1937.. 4 Mos.1936.. 17,237 8,350 10,940 44,247 36,469 PERMITS Albuquerque, N. M ....... Cheyenne, Wyo ............... Colorado Springs, Colo. Denver, Colo ................... Hutchinson, Kans ........... Joplin, Mo ....................... Kansas City, Kans ......... Kansas City, Mo.·--·-····· Lincoln, Nebr.·---··········· Oklahoma City, Okla ..... Omaha, Nebr .. - ............... Pueblo, Colo..-··--··········· Salina, Kans.·--··············· Shawnee, Okla ................. St. Joseph, Mo.·---········· Topeka, Kans ................. Tulsa, Okla.·---··············· Wichit a, Kans ................. 1937 1936 106 85 52 65 85 47 729 525 80 139 22 23 55 49 290 256 194 204 205 265 206 141 75 111 20 25 16 13 51 29 129 98 140 263 108 226 ---- April. ................................. 2,827 2,300 March·--··························· 2,194 2,023 Four months.................... 7,102 5,980 ESTIMATED COST 1937 $ 265,000 $ 302,000 125,000 1,004,000 47,000 28,000 79,000 499,000 138,000 472,000 774,000 56,000 34,000 9,000 23,000 1,036,000 767,000 281,000 1936 176,000 47,000 45,000 652,000 35,000 51,000 93,000 313,000 147,000 680,000 444,000 46,000 47,000 7,000 17,000 117,000 289,000 212,000 $ 5,939,000 $ 3,418,000 5,163,000 3,042,000 15,667,000 12,509,000 The value of construction contracts awarded in this District in April was substantially larger than that in the preceding month or in April of last year, reflecting principally increases in awards for non-residential building. However, it was the increase in awards for residential building that accounted for most of an increase Residential 108,013 90,168 67,151 339,591 191,031 Lumber Board feet sales of lumber at reporting retail yards in the District showed a further seasonal expansion in April but continued below the level of a year ago, total sales thus far this year showing a decline of 5 per cent. Collections showed further improvement in April averaging 43.1 per cent of outstandings at the beginning of the month as compared with 41.9 per cent" in March and -45.5 per cent in April of last year. · Lumber trade at 157 retail yards in•.the District: Building Spring building operations, as reflected by the number and value of permits issued for new construction, alterations, and repairs in eighteeen cities of the District, expanded further in April. The number of permits was the largest for April since 1929 and their estimated value the highest since 1930. Because of the substantial March and April gains, building activity was about 25 per cent ahead of a year ago. Building permits reported by the eighteen cities: 37 EASTERN STATES Residential Total (In thousands of dollars) 4,237 269,934 3,889 231,246 2,460 234,806 14,176 932,540 7,843 780,678 Sales of lumber, board feet........................ Sales of all materials, dollars .................... Stocks of lumber, board feet ................... . Outstandings, dollars._ .............................. . April 1937 per cent change from March 1937 April 1936 +23.6 -3.2 +21.5 +15.0 -1.6 +11.0 +13.6 +21.0 Life Insurance April sales of ordinary life insurance in the seven states, all or parts of which comprise this District, showed a gain of 14 per cent over a year ago. As a result of this large increase, total sales for the first four months of 1937 were raised to a".level about 5 per cent above a year ago. · Life insurance sales reported by the Life Insurance Sales Research · Bureau: Colo............. . Kans ............ . Change from April 1937 4 Mos. 1937 Apri! 1936 4 Mos. 1936 (Per cent) (In thousands of dollars) 6,953 23,714 30,111 77,971 24,894 4,801 35,179 4,307 +19 +10 Nebr............ . N.M ............ . Okla.·---······· Wyo.·--········· 8,764 21,654 6,370 1,305 9,442 1,289 +14 +19 Zero +3 +16 +7 +3 +8 +4 +9 7 States_...... U. S· -···-······· 55,777 692,062 200,977 2,639,666 +14 +5 +16 +9 Mo.·-············· -1 -4 Cold Storage Holdings Although United States cold storage stocks of beef, lamb and mutton, and poultry declined more than seasonally and lard stocks declined contraseasonally during April, the general level of cold storage stocks continued to be substantially above that of recent years. Withdrawals of butter and cheese were smaller and the in-movement of eggs larger than usual. Stocks of pork increased contraseasonally. 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION PCRetHT Industrial activity in April and the first half of May was maintained at the relatively high level of recent months. The general level of wholesale commodity prices declined somewhat, reflecting considerable reductions in prices of many raw materials and semi-finished products. PERCENT 140 140 130 130 A. 120 "I \ r /~ 110 "'\ \/\ 100 90 80 A \ 70 60 I\ I\ 120 )V' 110 PRODUCTION, EMPLOYMENT, AND TRADE 100 The Board's seasonally adjusted index of industrial production in April continued at 118 per cent of the 1923-1925 average. Manufacturing production rose further, reflecting increased output of durable goods. Activity at steel mills was at a rate slightly higher than in March and about equal to that in the peak month of 1929. Automobile production continued to expand. In the first three weeks of May output in these industries was maintained at the levels reached at the close of April. Increases in output in April were also reported for lumber and plate glass. At textile mills where output has been at a high level in recent months there was a slight reduction in activity. At bituminous coal mines output declined sharply following an increase in March, when consumers accumulated stocks of coal in anticipation of a strike. Crude petroleum output, which had risen sharply from November to March, showed further growth in April. Production of most metals also increased. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, increased more than seasonally from March to April and continued higher than a year ago, reflecting, as in earlier months of the year, a larger volume of residential building and of other privately-financed work. Contracts awarded for publicly-financed construction have been considerably smaller in the first four months of this year than in the corresponding period of 1936. Employment rose further between the middle of March and the middle of April. There was a considerable growth in the number of persons employed in manufacturing and on the railroads, little change in those employed in the public utility industries and in trade, and a decline at bituminous coal mines. At factories the principal increases in employment were reported by the steel, machinery, and automobile industries, while the number employed in the clothing industry de. clined. Working forces at textile mills were maintained, although a decrease is usual at this season. Factory pay rolls increased more than employment, reflecting chiefly further increases in wage rates. In April sales at department stores showed little change and mail order sales were also maintained at the March level, while sales at variety stores declined. 90 V 80 I\ V \r-'1 70 60 V 50 50 1930 1929 1931 1932 1933 1934 1935 1936 1937 Index of physical volume of production, adjusted for seasonal variation, 1928-1925 average 100. By months, January, 1929, through April, 1937. = FACTORY EMPLOYMENT AND PAYROLLS PERCENT 120 100 9 r--->t;;;:--+--+---+--+-----+---l---~--l 100 oi-----iH~--+--t---t--+--..h4.J!-----l90 50t---+- - + - - - + 40 50 r----i--+--t---X-----l'\-l--+-----+--+--1----l 40 30 30 1929 I~ 1931 1932 I~ 1934 1935 1936 1937 Indexes of number employed and pay rolls, without adjustment for seasonal variation, 19281926 average 100. By months, January, 1929, through April, 1987. Indexes compiled by the United States Bureau of Labor Statistics. = COMMODITY PRICES EXCESS RESERVES OF MEMBER BANKS BILLIONS OF DOLLARS BIL.LIONS Of' DOLLARS 4 4 The general level of wholesale commodity prices, as measured by the index of the Bureau of Labor Statistics, declined from 88.3 per cent of the 1926 average at the beginning of April to 86.9 in the middle of May. Prices of nonferrous metals, steel scrap, cotton, and rubber declined considerably and there were also decreases in the prices of grains, cotton goods, silk, hides, and chemicals, while prices of shoes and clothing showed further small advances. Since the middle of May prices of hogs and pork have advanced sharply and grain prices have also risen. BANK CREDIT 0 1932 1933 1934 1935 1936 1937 Wednesday figures of estimated excess reserves for all member banks and for New York City, January 6,- 1932, through May 19, 1987. MEMBER BANK CREDIT 81..UONS aF D('U._ARS 91UIOOIS 0, DOI.UN 17 2,4 16 23 15 22 14 21 13 20 12 ti 11 10 Following upon the final increase in reserve requirements, which became effective on May 1, excess reserves of member banks declined from $1,600,000,000 to about $900,000,000, and in the first three weeks of May fluctuated around the new level. Adjustments by banks to the new requirements were reflected in a decrease in interbank balances and in a small increase in borrowings. The Federal Reserve System in April purchased $96,000,000 of United States Government securities, for the purpose of easing the adjustment to the new requirements and preserving orderly conditions in the money market. Total loans and investments of reporting member banks showed a small decline from the middle of April through May 19. Holdings of United States Government obligations and other securities showed some decline, which was offset in part by increases in loans. While domestic interbank and United States Government deposits declined further, balances of foreign banks and other demand and time deposits at reporting member banks increased. MONEY RATES •34 1935 1936 1937 '34 1935 1936 1937 Wednesday figures for reporting member banks in 101 leading cities, September 5, 1934, through May 19, 1937. The open-market rate on 90-day bankers' acceptances, which between January and the latter part of March had advanced from 3/16 to 9/16 per cent, was reduced to 1/2 per cent on May 7, and the rate on nine-months Treasury bills declined to .62 per cent on May 24 compared with a high point of .74 per cent on May 3. Other short-term rates have shown little change in recent weeks. Yields on long-term Treasury and other high-grade bonds have declined somewhat.