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MONTHLY REVIEW Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. 22, No. FEOEllAL RESERVE BANK OF KANSAS 12 CITY NovEMBEit. 30, 1937 Business in the Tenth Federal Reserve District OCTOBER 1937 COMPARED WITH OCTOBER 1936 i ---------&..--.• : Denver• COLO. % INCREASE % DECREASE i 40 30 20 10 10 20 • ·--------KANSA :• I I I BUSINESS INDICATORS 30 40 ' ·-··-··-··-··-··~-!--- ■ I % DECREASE 40 30 20 10 ·-····Dank Debits ...- ... -- _..Mem. Bk. Loans_. ■ _ ..Life Ins. Sales ...... ■ ._.Wholesale Sales .... I l(ANS. Financial 10 MOS. 1937 COMPARED WITH 10 MOS. 1936 -- % INCREASE 10 20 30 40 ■ F. R. Dk. Clearings. ■ .. Mem. Bk. Invest._. ■ ■ ■ ...Demand Deposita ... I Trade I An increasing number of lines of activity show decreases as compared with a year ago. October was the first month of the year when department store and other retail sales were under the same month last year. Lumber sales were 25% lower. However, wholesale sales were 4% higher. Petroleum and lead production were higher than a year ago, but live-stock slaughter and flour and zinc production were lower. Marketings of grains and live stock, with the exception of hogs, were higher. Payments by check increased and bank loans are 20% above a year ago, but bank investments and deposits continue down. Construction activity is little above a year ago and at a much lower rate than in recent months. Rainfall continues subnormal and the condition of fall seeded wheat is only fair. Cash farm income is nearly 27% above a year ago. ■ ■ .... _. Retail Sales ....- I . Dept. Store Sale.1._ I ......Lumber Sales._ .. •• • I I • • ■ Marketinc• 85 -··-···- ··Corn.---- - I ---···-- Calves ·········- · -·-----Hosr•-·----·· ■ ·- ··--Sheep -·---· Production ·---··-· Flour ______ _Cattle Slausrhter... _ __Cal£ Slaughter-·· .- .Hoe Slaughter.. _. ... Sheep Slaughter... _crude Petroleum ... Zinc Ore Shipment. Lead Ore Shipments Con•tr,cction I _._ Total A ward■ .-- ■ ·--..Rea. A wards ..... _ _ Value of Permita ... Mi•cellaneou, ·-·--·-RainfalL.-. Cub Farm Income • .......Employment ___. --······Pay Rolla .... __ •For prrvlous month •-•• -· -I ··--···-·· Cattle._ ......... ■ I ■ -S3 -··---·-Oata .............. _Bituminous Coal... ■ Ir --···-·-·Wheat.____ I I • ■ I ■ ■ ■ ■ ■ ■ 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Member Bank Operations Commercial loans at reporting member banks in the Tenth District rose slightly further from the middle of October to the middle of November but decreases in most other types of loans more than offset this increase. Investments continued to decline, holdings of United States Government direct obligations and of "other" securities reaching a new low for the year, so that total loans and investments are now close to the level of a year ago. Loans are 19 per cent higher than a year ago but investments are 9 per cent lower, the major part of this decrease being in holdings of securities other than Government obligations. Reserve balances carried with this bank tend lower than in recent months and adjusted demand deposits at the middle of November were slightly lower than four weeks earlier although little changed from a year ago. Balances carried with domestic banks and interbank deposits have increased but correspondent balances with domestic banks are still 29 per cent and interbank deposits 14 per cent lower than a year ago. Principal items of condition of 51 member banks: Change from Nov. 17 Oct. 20 Nov. 18 1937 1937 . 1936 --unthousands of dollars) Loans and investments-total_ ____.... 695,610 -12,106 +6,605 ..:1,613 +46,152 Loans-totaL ____ ··--·······--···-·-········-··-- 287,192 +1,767 * Coml., indust., agric. --············---··--· 181,160 -1,502 * Open market paper... ·---······-··-·-··-·-·- 23,897 To security brokers and dealers._ .. 4,195 -266 -619 Other to purchase or carry secur. 13,669 -473 * -39 +2,156 Real estate loans_········-·········-·········· 20,345 ~ 1,048 +71 -1,316 Loans to banks_____···············-······-··· -1,171 * All other loans·---·-·---·--······-·······-····· 42,878 lnvestments-totaL_._·--··-·--········--··-··- 408,418 -10,493 -39,547 -6,647 -14,544 U. S. Govt. direct obligations.---···· 243,499 -420 -1,333 Oblig. guar. by U.S. Govt.-···--···- 49,156 -3,426 -23,670 Other securities__ ··-····-··--·················· 115,763 -461 +17,603 Reserve with F. R. Bank._·············-··· 168,191 Balances with domestic banks........... . 206,552 +16,599 -85,734 Demand deposits-adjusted ............. . 486,603 -5,516 -1,198 Time deposits. __ .................................. . 147,042 -161 +360 U.S. Govt. deposits ........................... . 10,483 -796 -6,829 Interbank deposits ............................. . 365,836 +9,684 -57,500 *Comparable figures not available. Reserve Bank Operations Holdings of bills discounted for member banks have increased further, reaching 1¾' mil1ion dollars in the first half of November. This total, while small, is the largest since late in ] 933. Seasonal borrowing by banks in connection l•vith crop payments in sugar beet areas accounted for most of this increase. This bank's participation in the open market account of the Federal Reserve System was increased; slightly during the four weeks ended November 17, reflecting increases in holdings of Tre.asury notes and bills and a small decrease in holdings of bonds. Federal Reserve note circulation of this bank, while lower than early in October, continues to hold fairly close to the high level reached at that time. , Principal items of condition of the Federal Reserve Bank of Kansas City and branches: Total reserves·--····································· Bills discounted ..................................... . Bills purchased.----······························· Industrial advances·--··························· Commit. to make indust. adv.·-········· U.S. Government securities................ Total resources.---································· F. R. notes in circulation._ ................... Member bank reserve deposits ............ Change from Nov. 17 Oct. 20 Nov. 18 1937 1937 1936 (In thousands of dollars) 303,438 +2,230 +35,756 1,108 +413 + 1,028 80 +1 -7 484 -19 -330 115 -2 -236 124,984 +856 -871 476,830 +5,950 +33,383 167,509 +1,802 +10,087 245,725 +260 +18,389 Dollar volume of check collections showed substantially less than the usual seasonal increase during October. Dollar volume was little changed from that of a year ago. Check collections through this bank and branches: ITEMS 1937 AMOUNT 1936 1937 1936 (In thousands) October ----··················· 6,068 6,292 $ 1,020,277 $1,012,966 September........................ 5,938 6,664 1,007,276 949,099 Ten months.._······-··········· 59,956 58,980 10,111,785 9,651,179 Bank Debits The seasonal increase in debits to individual accounts in October was slightly smaller than usual. While payments by check were about 7 per cent greater than in October of last year, for the first ten months of the year they show an increase of nearly 14 per cent over the corresponding period of 1936. Payments by check in thirty cities: Albuquerque, N. Mex.·---····· Atchison, Kans ...................... . Bartlesville, Okla..----··········· Casper, Wyo.·-·······-··············· Cheyenne, Wyo.·-··-··············· Colorado Springs, Colo.·---··· Denver, Colo........................... Emporia, Kans ....................... Enid, Okla.........·-··················· Fremont, Nebr.·----··············· Grand Junction, Colo,.--······· Guthrie, Okla.·---··················· Hutchinson, Kans.·-··············· Independence, Kans•.............. Joplin, Mo.---······-··············· Kansas City, Kans ................ . Kansas City, Mo.·--··············· Lawrence, Kans.·---··············· Lincoln, Nebr. _ _ _ ........... Muskogee, Okla....-................ . Oklahoma City, Okla............ . Okmulgee, Okla.. _.................. . Omaha, Nebr.·-······················· Pittsburg, Kans ...................... . Pueblo, Colo....--····················· Salina, Kans.·-···················· ..... St. Joseph, Mo ...·--················· ~opeka, Kans........................ . "Tulsa, Okla.·---··-··················· Wichita, Kans............... :........ . District, 30 cities................... . Vnited States, 141 cities....... . Change from Oct. 1937 Sept. 1937 Oct. 1936 (In thousands of dollars) 16,944 +2,618 +2,529 3,695 -2 +250 31,683 -2,279 +6,177 8,397 + 1,950 + 1,666 10,134 +998 +984 16,060 +1,340 +180 186,890 + 15,777 -3,267 3,670 +204 +307 11,755 +69 +1,555 2,492 -72 -394 4,449 +31 +363 1,715 -276 + 118 13,357 +1,204 +753 2,815 +154 +376 10,920 +235 +943 16,103 +813 +1,748 358,014 +15,438 +26,560 3,939 +250 +199 31,145 +2,737 +1,084 9,684 +1,403 +923 113,568 +7,536 +16,826 2,894 +124 +117 166,812 +10,176 +6,261 4,289 +503 +224 17,758 +385 +787 9,975 +328 -818 27,881 -164 -2,312 15,648 +1,316 -1,166 163,766 +11,196 +22,840 49,659 +4,322 +4,25n 1,315,111 +78,314 +90,069 36,073,391 +2,713,628 - 1,239,137 FEDERAL RESERVE BANK OF Trade Dollar volume of sales at reporting department:stores in the District showed much less than the usual seasonal increase during October and for the first time this year fell below dollar volume in the same month a year ago. The decrease in sales from October of last year measured almost 3 per cent and has narrowed the gain for the year to date to less than 5 per cent. The rising trend in retail prices, which largely accounts for the larger sales this year, was halted in September. Since September 1, retail prices have declined almost 1 per cent, according to the ·Fairchild Retail Price Index, although prices on November 1 were still better than 6 per cent above a year ago. Stocks of merchandise"'also showed less than the usual seasonal increase in October. While the retail value of these· stocks is higher than a year ago, it must be remembered that prices also are higher. Collections on open accounts averaged 47.3 per cent of receivables in October this year and 48.5 per cent last year, while installment-collections averaged 15.8 per cent and 15.6 per cent, respectively. Department store sales and stocks in leading cities: SALES STOCKS Oct.'37 10 Mos.'37 Oct. 31,'37 No. of comp. to comp. to compared to Stores Oct.'36 10 Mos.'36 Sept.30,'37 Oct.31,'36 --(Per cent increase or decrease) Denver________ _._..... 4 +3.2 +6.4 -0.7 +0.1 Kansas City. __ .. _ 4 -13.4 +2.7 +8.7 +2.0 Oklahoma City.. 3 -0.8 +3.8 +9.5 +10.5 -5.8 -2.0 -0.5 +8.1 Omaha.·--·-·········· 3 Tulsa. __ ............... 4 +5.3 +9.8 +6.1 +11.3 -3.9 +12.4 +7.6 +13.1 Wichita._··-·········· 3 Other cities._....... 21 +0.2 +3.6 +2.3 +3.6 -2.6 +4.7 3 Wholesale sales and collections reported by the Department of Commerce for this District: DEPARTMENT STORE SALES District__·--··········· 42 KANSAS CITY +3.4 +4.5 WHOLESALE SALES The value of wholesale sales in this District declined about 7 per cent from September to October, sales of drugs declining about 3, groceries 10, and hardware 7 per cent. However, total sales were 4 per cent larger than in October of last year, although sales of drugs, dry goods, and hardware were also somewhat lower than a year ago. For the first ten months of the year, the value of wholesale sales is better than 6 per cent larger than a year ago, all lines sharing in this increase. The downward movement in wholesale commodity prices in October continued into November, carrying the all-commodity index of the Bureau of Labor Statistics to its lowest point this year and within 2 per cent of the level of a year ago in the week ended November 13. Wholesale prices of farm products, textile products, and chemicals and drugs are lower than ·a year ago but prices of foods, hides -and leather products, fuel and lighting materials, -metals and ·metal products, buildnfg materials, artd housefurnishing . goods are still above a year ago. SALES Oct.'37 10 Mos.'37 COLLECTIONS* No. of comp.to comp.to Oct. Sept. Oct. Firms Oct.'36 10 Mos.'36 1937 1937 1936 - - (Per cent change). (Median percentages) Drugs.. -................. 9 -3.6 +4.4 79.1 83.4 80.0 Dry goods... ---·-···· 3 -6.4 34.0 38.7 Grocer~·-····-········ 10 +1.1 +7.0 89.5 95.1 91.9 Hardware._............ 5 -4.4 +1.4 51.5 50.5 45.4 Paper·----·············- 4 +13.6 +10.7 64.3 62.8 58.9 All other lines...... 19 +22.1 +16.6 67.0 67.0 56.6 ------ District...........·-···-- 50 +4.0 +6.3 71.0 77.1 73.0 *Collections during month on receivables at beginning of month. Crops_ Weather conditions have been unusually favorable for maturing and harvesting~late crops. The growing season has been long and yields of many late crops, particularly in northern portions of the District, have turned out slightly better than anticipated earlier, indicating a further easing of the feed situation. The weather, however, has been poor "wheat weather," rainfall being light and surface moisture being rapidly depleted by above-normal temperatures and high winds. Following the general rains which fell about the middle of October and which enabled farmers to complete seeding operations that had been largely discontinued because of dry soil, little moisture was received until the middle of November when moderately heavy rains and snows occurred over eastern Kansas and adjoining parts of other states. Freezing temperatures which followed the snow will help to endi~grasshopper damage which has necessitated reseeding of a considerable acreage of winter wheat. The condition of winter wheat is good in western and southwestern Nebraska, in most of Oklahoma, and in parts of central and eastern Kansas but elsewhere the situation is not so favorable. In the Plains area west of the hundredth meridian, roughly from central Nebraska, western Kansas, and the Oklahoma Panhandle westward, rainfall during the three summer moisture-storage months, July through September, was only about 67 per cent of normal or about the same as last year. East of this line, rainfall for the period averaged about 84 per cent of normal, better than last year but still somewhat short. The average soil moisture depth in Kansas at seeding time this year was about 12 inches as compared with nearly 18 inches a year ago. October rainfall was about normal in Nebraska and New Mexico, but Wyoming had only 90, Colorado 66, Oklahoma 86, Missouri 85, and Kansas 73 per cent of normal rainfall. Subsoil moisture is seriously deficient over wide areas and heavy general rains are needed to replenish these small reserves before the ground freezes. Snow 'in several states near the end of November provided needed surface moisture. REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Rainfall as reported by the Weather Bureau: -".. ~ "'- "' '? .. '"";_. ' CoLORADO Denver.............................. I..eadville. ___····-··-··-······· Pueblo·--··························· I,amar···- ··························· Garnett·--················-······· 10 Mos.1937 Oct.1937 Total Normal Total Normal ----nn·inches) · 12.77' .55 9.53 1.05 24.22 16.62 2.26 1.26 10.81 .48 6.13 .66 14.91 .88 1.03 6.30 6.51 6.40 .35 .54 23.93 19.67 2.54 1.97 St.eamboat Springs.......... lCANsAs Topeka.............................. 1.40 Iola.. - ................................ 1.13 Concordia.---··················· 1.58 Salina ...... ·-······················· 2.13 Wichita. __......................... 1.12 Hays.... ·-··························· 1.59 Dodge City...... ................ .87 Elkhart.............................. .86 Goodland....·-··················· 1.01 2.42 3.16 1.97 2.00 2.59 1.55 1.30 1.66 1.37 17.33 31.90 18.11 17.05 24.31 17.28 12.04 6.86 12.15 31.05 34.66 24.93 25.07 2'l.72 22.06 19.21 16.13 17.42 2.8~ 2.92 3.46 26.50 22.66 32.79 32.69 33.95 39.06 Cash wheat prices had declined to the lowest level in more than a year early in November but strengthened slightly about the middle of the month on reports of frost damage to the Argentine wheat crop and renewed buying by importing countries. Cash prices of corn and other feed grains continue to decline, heavy market ings of com being the principal weakening influence. Cash grain prices at the Kansas City market : Nov. 23 Oct. 30 No. No. No. No. No. No. 1 hard, dark wheat, bu ... 2 mixed com, bu ............. 2 white oats, bu.............. . 2 rye, bu....... .................... 2 barley, bu...................... 2 white kafir, cwt.·--······· 1937 1937 $ .93¼ $1.01 .63 .65½ .31,½ .32 .69 .72 .49 .53 .89 .90 Sept. 30 1937 $1.12 ¾ .70 .32 ½ .79 .60 1.14 Oct. 31 1936 $1.19½ 1.11,½ .45 ,½ .92 .87 1.78 MISSOURI St. Joseph. ___................... 1.26 Kansas City·-- ················· 1.16 Joplin .... ·······-··················· 1.33 NllBRASKA Omaha........._................... Lincoln .............................. Norfolk._ ........................... Gn1nd Island.-................. McCook ...... ·-··-··············· NorthPlatt;e.................... 1.43 2.29 2.19 1.48 1.46 1.27 .76 2.17 1.88 1.73 2.12 1.20 1.08 1.09 1.30 20.10 19.05 20.37 22.73 16.66 12.02 8.70 10.66 25.77 25.92 26.31 25.27 18.36 17.62 15.28 17.69 ,~:ethi°~:::::::::::::::::::::::: .64 ~ - - -······················· Santa Fe.--.-· Farmington .................... :: OKLAHOMA .67 .66 .72 1.26 1.18 .81 11.68 16.21 7.48 15.18 11.74 7.99 Tulsa.--····························· 2.38 Oklahoma City··- ···-······· Pauls Valley.~--······-······· Hobart.............................. Enid.......·-······················· Woodward. ....................... 2.26 2.83 2.66 4.26 4.03 8.68 4.27 2.86 3.47 3.04 2.92 2.22 34.24 34.44 19.91 33.03 24.66 28.42 19.13 34.36 37.82 27.78 30.78 26.31 27.88 23.33 Cheyenne.......................... 1.23 Casper.·---················· ·..... .78 !Alnder........ ·-··········-······· .9,9 Sheridan............................ .95 .96 1.41 1.36 1.07 11.92 14.13 14.61 13.47 13.92 13.74 11.36 13.79 NEWMExlco McAlester____ ................... 8.21 WYOMING Grain Marketing Marketings of grain were generally in good volume in October and substantially heavier than a year ago. The corn crop had matured somewhat early and receipts of com increased sharply, exceeding the October average during the past ten years by nearly 10 per cent. Wheat marketings were about 25 per cent below average, while receipts of oats approximated the average volume. Receipts of grain at five markets in the District: Hutcbins_on. ___··········· Kansas CitY·--··········· Omaha........................ St. Joseph.__··············· Wichita __ ................... Wheat Com -- O n thousands of bushels) - - 914 4,662 931 610 1,228 - 1 1,035 1,646 691 43 Oat.a 320 412 404 3 ----,,. Rye Barley K-afir 1 76 73 14 3 39 134 6 6 104 18 4 -- ·131 -- ---178 . 8,145 3,216 1,139 167 Oct. 1937.............. ·-··· Sept. 1937.___............. 8,361 555 1,296 163 7,301 1,738 Oct.1986................... . 776 66 1() Mos. 1937............. . 167,&13 15,071 13,197 1,218 10 Mos. 1936.............. 118,118 32,138 13,245 860 ·- - - 168 161 1..,160 70 68 682 2,549 1,190 Live Stock IIARKETINGS Marketings of live stock increased seasonally in October although receipts of cattle were about 10 and sheep 15 per cent below normal as measured by the October average volume during the past ten years. Receipts of calves were about average but market supplies of hogs continue about 50 per cent of normal. Marketings of cattle and sheep were about 9 per cent larger than a year ago but hog marketings showed a decrease of 39 per cent from October of last year and little change as compared with the low level of two years ago following the 1934 drought. Live stock receipts at six markets in the District: Denver......................... . Kansas City................. . Oklahoma City............ Omaha......................... . St. Joseph·---··············· Wichita._ ...................... . Cattle 97,940 182,079 43,482 165,501 32,945 25,864 647,811 Oct.1987..................... . Sept. 1937.___ ............... 481,862 501,646 Oct. 1936...................... 10 Mos. 1937-.............. . 3,786,963 10 Mos. 1936............. _. 3,788,309 Calves 11,287 53,461 21,318 31,095 8,289 8,368 Hogs . 16,524 103,622 23,713 80,915 66,964 19,702 Sheep 668,604 112,043 9,014 156,610 68,604 15,383 133,818 311,440 1,030,168 108,638 275,336 967,883 133,628 510,375 948,988 802,314 2,949,819 6,690,266 729,801 4~386,652 6,311,320 PRIC~ Cattle an_d hog prices dropped sharply in October, declining as m~h as $.2.~50 a hundredweight at the Kansas City mark~t, but ijheep and lamb prices were steady to only moderately lower at the close of the month. In the fir$t two weeks of November, th.ere w~ a further decline in cattle ~d hog prices while sheep and lamb price$ were abo;ut ~teady to slightly higher. The decline in cattle. prices was from an un:usually high level, but the drop in hog prices was a continuation of a seasonal decljne under way siJ}Ce August and in whi~h hog prices have fallen abo_u t a third under th~i_r AJ.J,gUst high, the l~g~t clecli;n~ il'.l rece_nt yearij. fat cattle and. hp_gs sllowed.·DJ.Qre of a d~in~ than. oth~r cl.a~. Cattle aen4 e}ieep prices are still m:uch hjgb.er tha1J. a year ago but hog prices are lower, being the lowest since early 5 FEDERAL RESERVE BANK OF KANSAS CITY in 1935. Hogs are selling at a narrower price range than a year ago, cattle wider, and lambs about the same. Top live stock prices at the Kansas City market : Nov. 23 Oct. Sept. Oct. Oct. Oct. 1937 1937 1937 1936 1935 1934 ~ dollars per hundredweight) Beef steers ............................ 14.50 16.00 17.25 10.40 12.00 9.35 Stocker cattle·---················· 8.25 10.00 9.25 7.50 9.00 5.65 Feeder cattle........................ 8.50 10.75 12.00 8.25 8.75 7.00 Calve,.c; ................................... 10.00 10.00 10.50 9.00 9.50 6.50 Hogs................. .................... 7.50 11.45 12.25 10.20 10.65 6.10 SheeP----······----···················· 6.25 6.75 8.25 6.50 6.25 4.40 Lambs. __ ............................... 8.75 10.75 11.75 9.20 10.00 6.60 lambs fed in northern Colorado will be nearly 20 per cent larger than last year, but numbers in the Arkansas and San Luis Valleys are expected to be little different and the total number to be fed, while larger than last year, will be smaller than two years ago and below average for the state. A decrease in lamb feeding operations is in prospect in Wyoming and New Mexico. There has been a considerable movement of lambs into Oklahoma and Kansas to be finished on wheat pastures. RANGES AND PASTURES Mild, open weather permitted the full use of ranges an<l pastures and the late use of higher and foothill STOCKERS AND FEEDERS ranges into November but, because of light rainShipments of stocker and feeder cattle, calves, and fall, ranges continue dry and short in the western part sheep showed a substantial further increase in October, of Nebraska, Kansas, and Oklahoma and in eastern with market supplies at the season's highest level and Colorado. Range feed is good in Wyoming, the mountain prices adjusting to a new corn crop basis. Although and western sections of Colorado, New Mexico, and consid~rably higher than in October of last year, the in eastern Oklahoma. Wheat pastures are only fair outward movement of cattle was about 8, calves 3, in western Kansas and Oklahoma but are good in parts and sheep 18 per cent below the October ten-year aver- of the eastern sections of these states. Live stock is age. Hog shipments were smaller than in the preced- generally going into the winter in good condition. ing month and were almost 60 per cent below either Farm Income a year ago or the ten-year average volume. Cash farm income in the District was about 27 per Stocker and feeder shipments from four markets: cent greater in September than a year ago. As in other Cattle Denver.................................. Kansas CitY·--····················· Omaha.................................. St. Joseph·---······················· ~ Oct. 1937 .... .......................... 226,707 136,374 153,345 927,382 726,723 Sept. 1937.............................. Oct. 1936 .... ·············-··········· 10 Mos. 1937........................ 10 Mos. 1936........................ 89,506 73,440 8,548 Calves 6,384 16,435 12,838 1,486 -~ 37,143 21,003 30,970 130,218 112,369 Hogs 240 1,710 1,171 1,425 Sheep 380,053 29,587 68,700 24,748 4,546 503,088 5,718 228,954 11,100 377,072 39,705 1,268,992 82,442 1,097,248 According to the Department of Agriculture, developments to November 1 continued to point to a considerable increase in cattle feeding operations in Nebraska and Kansas during the coming winter and spring over a year earlier although the number of cattle to be fed will not be large in comparison with numbers fed in most years before 1934. Kansas and Nebraska are the only Corn Belt states where the supply of feed grains per animal is below average. Cattle feeding operations are expected to show some increase in Oklahoma but little change from last year in Rocky Mountain states where record numbers were fed last year. Shipments of feeder lambs into northern Colorado and the Scottsbluff, Nebraska, feeding areas were much larger than in October of last year. Deliveries of feeder lambs by Wyoming growers had been virtually completed by the middle of November, bringing to a close a rather active marketing season in that state. The nwnber of lambs on feed this season will probably be the largest of record in the Scottsbluff area but, although larger than last year, far below normal in Nebraska as a whole, the Department stated. The number of recent months, most of this increase came from crops, mainly wheat. Income from live stock and its products was only 9 per cent larger than in September of last year while receipts from the sale of crops were nearly twice as large. Income for the first nine months of the year shows an increase of nearly 17 per cent over that in the corresponding period of 1936. This increase reflects higher prices received by farmers during the first half of the year and a larger volume of sales in the third quarter. The effects of last year's drought are evident in grain and live stock marketings in Nebraska where fann income is 4 per cent lower, but income in other states in the District ranges from 9 per cent higher in Wyoming to 31 per cent higher in Colorado and Kansas. Sharply lower prices in recent weeks for certain farm products will undoubtedly necessitate a revision downward of estimates of fann income for 1937 made earlier in the year. Income estimates of the Department of Agriculture: Colorado............... . Kansas ................. . Missouri ............... . Nebraska ............. . New Mexico......... . Oklahoma............. . Wyoming ............. . Live Stock Govt. Crops_ and Products Payments (In thousands of dollars) 5,362 10,146 61 16,348 18,515 137 6,611 20,687 408 7,051 17,622 136 1,835 1,722 68 8,686 8,989 272 1,212 7,031 36 Sept. 1937·-··-······· Aug. 1937............. . Sept. 1936·--- ······· 9 Mos.1937.......... 9 Mos.1936 .......... 47,105 53,918 2~,779 314,044 188,715 -84,712 - -1,118 71,372 78,447 558,393 565,595 1,363 1,510 70,402 53,771 Total 15,569 35,000 27,706 24,809 3,625 17,947 8,279 132,9.85 126,64.3 104,736 942,839 808,081 G REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Meat Packing Flour production reported by the Northwestern Miller: Except for a moderate increase in hog slaughter, operations at meatpacking plants in the District tended to decline in October. The slaughter of cattle, calves, and sheep was about 20 per cent lower and that of hogs a third lower than a year ago. Calf slaughter continues high but cattle slaughter was about 15 and hog and sheep slaughter nearly 40 per cent below the October average for the past ten years. Several good years will be necessary before an increase in the number of live stock will bring about normal slaughter conditions. Packers' purchases at six markets in the District: Cattle Denver.......................... 22,967 Kansas City.-............... 60,057 Oklahoma City............ 19,974 Omaha.......................... 65,241 20,842 St. Joseph·-··-··············12,530 Wichita·-··············-········ Oct. 1937...................... 201,611 Sept. 1937.__................. 217,317 Oct.1936 ...................... 256,907 10 Mos. 1937................ 1,868,242 10 Mos. 1936.-. ............. 2,201,839 Cold Stor~e HoJdings Calves ' 4,412 23,545 15,749 16,271 6,549 4,678 Hogs 16,253 94,967 19,813 68,662 61,974 19,084 Change from Oct. 1937 Sept. 1937 Oct. 1936 ~In barrels) Atchison.............................. 129,000 +9,000 -4,000 Kansas City·--··················· 653,000 +19,000 +62,000 Salina.................................. 199,000 +10,000 +18,000 Wichita·--··························· 212,000 +7,000 -41,000 Other cities.___ ................... 1,078,000 +34,000 -97 ,000 Southwest.__······················· 2,271,000 +79,000 -62,000 United States*·--··············· 5,968,000 +96,000 -90,000 •Represents about 60 per cent of total output in United States. Flour business in the southwest was active in the first part of October and again early in November when flour prices broke sharply, recording a net loss of from 25 to 85 cents per barrel. In the second week of NovemSheep ber, flour prices recovered moderately. Bran prices 50,444 advanced because of poor pastures but prices of shorts 68,547 4,362 have declined with corn prices. 68,884 44,472 6,209 71,204 280,753 242,918 243,860 71,139 317,419 87,824 420,915 309,161 568,230 2,613,490 3,116,377 569,134 3,651,716 2,910,250 Petroleum Daily average production of crude petroleum in the District showed another 5 per cent decrease in October and is still lower in November. October output, while 22 per cent above the October average, was only 6 per cent larger than a year ago. Oil production reported by the American Petroleum Institute and the Bureau of Mines: After allowing for the usual seasonal changes, United Oct. 1937 Sept. 1937 Oct. 1936 Gross D. Av. Gross D. Av. Gross D. Av. States cold storage stocks of most commodities con- ---(Inthousandsofbarre~ - tinued to decline in October. Total stocks of meats, Colo................. -133 4.3 120 4.0 151 4.9 having declined more than 60 per cent from the un- Kans.·----··-··· 5,747 185.4 5,918 197.3 5,157 166.4 Mex........... 3,238 104.5 3,410 113.7 2,540 81.9 usually high level of last spring, are the smallest in N. Okla................. 18,251 588.7 18,523 617.4 18,259 589.0 many years. Stocks of eggs, poultry, and cheese are Wyo................. 1,821 58.7 1,719 57.3 1,315 42.4 still high, but stocks of beef were 41, pork 34, lard 52, 5 States·--······· 29,190 941.6 29,690 989.7 27,422 884.6 and butter 13 per cent below the November 1 average U.S ................. 111,610 3,600.3 109,980 3,666.0 95,795 3,090.2 for the past five years. The upward trend in stocks of crude petroleum in the Mid-Continent area since early in the year was United States cold storage holdings: broken early in September. Since that time the genNov. 1 Oct. 1 Nov. 1 Nov. 1 1937 1937 1936 5-Yr. Av. eral t endency has been downward, most of a small (In thousands of units) 74,818 increase in stocks in October being lost in the first week Beef, lbs.·----··························· 43,862 38,746 104,961 of November. Of chief concern at the present time is 265,957 282,534 354,960 405,441 Pork, lbs .............·-··················· Lamb and mutton, lbs.......... . 2,369 1,887 5,930 3,291 the decline in gasoline tank-car prices which started 69,212 Poultry, lbs.·-······-··-··············· 76,179 61,721 104,981 64,987 about the middle of October. Miscellaneous meats, lbs.·---· 42,223 43,858 77,411 !Alrd, lbs................................... 39,421 72,614 94,748 81,814 5,157 7,058 3,788 4,293 Coal Eggs, shell, cases. __ ················· Eggs, frozen (case equiv.) ..... . 3,819 4,235 2,344 2,374 Butter, creamery, lbs............ . 98,539 118,697 105,368 112,788 Out.put of bituminous coal showed a further seasonal Cheese, all varieties, lbs ......... 112,376 117,610 118,907 107,315 increase in October. Production in October was slightly smaller than a year ago but for the year to date it is Flour Milli°I still more than 5 per cent larger. Coal output estimated from reports of the National Activity at southwestern flour mills increased slightly Bituminous Coal Commission: in October but is seasonally lower in November. While Change from current output is below a year ago, October showing Oct. 1937 Sept. 1937 Oct. 1936 a decrease of about 3 per cent, production for the year (In tons) 731,000 +149,000 -54,000 to date still shows a gain of 10 per cent over last year. Colorado.--····························· Kansas and Missouri... ........ . 647,000 +101,000 +20,000 Shipping directions on flour contracts continue to come New Mexico..·-······················· 156,000 +19,000 -7,000 268,000 +68,000 +27,000 in freely and mills for the most part are operating on Oklahoma.--··························· Wyoming_............................. . 631,000 +105,000 +4,000 heavy schedules, averaging from 70 to 75 per cent of Six states ............................... . 2,433,000 +442,000 -10,000 capacity. United States·---··················· 40,040,000 +985,000 -3,281,000 7 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead Zinc and lead shipments from the Tri-State district declined in October and show a further decrease in November. Output of concentrates has dropped rapidly and more than a score of mines and mills have closed because of the sharp recession in ore· prices. Shipments estimated from Joplin News-Herald reports: ZINC ORE LEAD ORE Kansas ..................... . Missouri... ................ . Oklahoma._.............. . Tons 12,529 4,197 21,695 Value $474,789 159,224 822,651 Tons 1,572 583 3,355 Value $ 105,795 38,394 223,980 Oct. 1937.................. Sept. 1937... __ ........... Oct. 1936.................. 10 Mos. 1937............ 10 Mos. 1936............ 38,421 44,144 41,925 403,984 357,754 $ 1,456,664 1,919,136 1,320,637 16,672,043 11,338,738 5,510 6,567 4,305 54,229 41,601 $ 368,169 493,350 215,250 3,952,357 2,059,125 Since the middle of September, zinc ore prices have declined from $47.50 a ton to $37.00 and lead ore prices from $77.50 to $56.00. At the middle of November, zinc is still $5.00 a ton higher than a year ago, but lead is $2.00 a ton lower. Zinc has averaged about $44 a ton this year against $32 last year and lead $73 against $50. The value of building permits issued in eighteen cities of the District showed a further increase in October but was little changed from that in October of last year. The total value of permits so far this year is 12 per cent larger than in 1936. Building permits issued by eighteen District cities: PERMITS 1937 Albuquerque, N. Mex .... . Cheyenne, Wyo ............... Colorado Springs, Colo ... Denver, Colo.................. . Hutchinson, Kans ........... . Joplin, Mo.·----··············· Kansas City, Kans......... . Kansas City, Mo ............ . Lincoln, Nebr.·-··············· Oklahoma City, Okla.... . Omaha, Nebr.................. . Pueblo, Colo .................... . Salina, Kans .................... . Shawnee, Okla................ . St. Joseph, Mo ................ . Topeka, Kans ....... ......... . Tulsa, Okla ...................... . Wichita, Kans ................ . 1936 9f° 99$ 66 71 616 124 16 34 191 161 173 121 82 29 19 21 84 95 223 44 64 576 83 16 49 240 161 190 169 61 21 17 34 99 102 228 ESTIMATED COST 1937 198,000 $ 72,000 36,000 597,000 66,000 62,000 196,000 168,000 82,000 376,000 217,000 60,000 82,000 8,000 18,000 133,000 1,443,000 164,000 1936 163,000 78,000 67,000 603,000 271,000 62,000 62,000 958,000 94,000 384,000 239,000 13,000 28,000 66,000 39,000 106,000 346,000 289,000 October·-····•······················ 2,212 2,232 $ 3,938,000 $ 3,868,000 3,277,000 2,714,000 September........................ 2,259 1,989 Ten months...................... 20,425 18,216 37,226,000 33,202,000 Employment and Pay Rolls Lumber Following a decline in the preceding month, employment and pay rolls rose from the middle of September to the middle of October. Employment was about 2 per cent and pay rolls 6 per cent larger than in October of last year. Preliminary figures of the Department of Labor: Board feet lumber sales, which usually increase somewhat in October, showed little change from the preceding month and a decrease of nearly 25 per cent from sales in October of last year. As a result, total sales so far this year are now about 3 per cent below sales in the same peiiod of 1936. October collections averaged 36.2 per cent of amounts receivable as compared with a ratio of 33.0 per cent in September and 43.1 per cent in October a year ago. Lumber trade at 155 retail yards in the District: Colorado._ .............................................. . Kansas...... •-··········································· Missouri ................................................. . Nebraska............................................... . New Mexico·--······································· Oklahoma............................................... . Wyoming ............................................... . October 1937 per cent change from September 1937 Employment Pay Rolls +4.1 + 5.3 -1.2 -0.4 +0.8 +2.0 +5.7 +4.8 -0.9 +3.2 +0.2 +1.5 +4.0 +6.2 Building Construction awards increased somewhat in October as a result of a larger volume of contracts for nonresidential building but were little changed from a year ago. While awards so far this year are 6 per cent larger than last year, it is reported that contracts have been let for only about 60 per cent of the work contemplated in comparison with 97 per cent last year. Construction figures of the F. W. Dodge Corporation: 37 EASTERN STATES Residential Total Residential (In thousands of dollars) 2,478 202,081 65,485 2,677 207,072 65,590 2,372 226,840 79,736 30,416 2,510,604 802,175 24,355 2,260,029 667,917 TENTH DISTRICT Total October 1937..·-··· 9,047 September 193L. 7,362 October 1936........ 8,861 10 Months 1937... 104,383 10 Months 1936... 98,276 Oct. 1937 per cent change from Sept. 1937 Oct. 1936 +1.3 -24.8 Sales of lumber, board feet .......................... Sales of all materials, dollars....................... . +10.6 +0.6 -2.3 +14.2 Stocks of lumber, board feeL .................... . Outstandings, dollars._ .................................. . Zero +21.9 Life Insurance Life insurance sales in the seven states of the District increased nearly 10 per cent during October. Sa1es were 4 per cent larger than in October of last year. The Life Insurance Sales Research Bureau report: Colorado._................................ . Kansas ..................................... . Missouri.. .................................. Nebraska ................................. . New Mexico.............................. . Oklahoma·-······························· Wyoming ................................. . Seven states._........................... United States._......................... Change from Oct. 1937 Sept. 1937 Oct. 1936 (In thousands of dollars) 5,914 +908 +485 7,327 +169 +364 16,986 +2,096 +662 6,240 + 109 -657 1,045 -277 -64 8,089 +929 +878 1,034 +59 +72 46,636 579,704 +3,983 +79,270 +1,740 +2,831 8 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION PER CENT PER CENT 140 140 130 130 120 tto too - \,r\\ /\.. \ 90 80 r /V A \.~ 70 " 110 \ 100 90 V -f\~v 'it'\ 120 )V"\\ 80 70 60 50 50 1929 1930 1811 t~ 1933 1934 1935 1936 l'.l'.'17 Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average 100. By months, January 1929 through October 1987. = FACTORY EMPLOYMENT PER CENT P£ACEN f 120 120 tto 110 loo /\ 90 eo '\ \ ... w . _) A/\_, \. r " 18~ 1934 vJ -A 100 \ so ~IV eo ro 50 50 1929 1930 1931 11H PRODUCTION AND EMPLOYMENT I \r+J .., 60 Volume of industrial production showed a further sharp decrease in October and the first three weeks of November, and there was a reduction in employment. Commodity prices continued to decline. Distribution of commoditfos to consumers was maintained at the level of other recent months. 1935 1!/36 1937 Index of number employed, adjusted for seasonal variation, 1923-1925 average 100. By months, January 1929 through October 1937. = In October the Board's seasonally adjusted index of industrial production was 103 per cent of the 1923-1925 average as compared with 111 per cent in September and an average of 116 per cent in the first eight months of this year. There was a marked curtailment of activity in the durable goods industries. Output of steel ingots, which had shown a steady decline since August, was at an average rate of 59 per cent of capacity in October and by the third week in November the rate had declined to 36 per cent. Automobile production increased considerably in October as most manufacturers began assembly of 1938 model cars. In the first three weeks of November output of automobiles showed little change from the level reached at the end of October, with assemblies by one leading manufacturer continuing in exceptionally small volume. Production of lumber and of plate glass declined further in October. In the non-durable goods industries, where output had been declining since the spring of this year, there was a further decrease in October. Cotton consumption showed a sharp reduction and activity at woolen mills and shoe factories continued to decline. There was an increase in output at sugar refineries, where activity had been at a low level in September. In most other lines changes in output were largely seasonal. Mineral production continued at about the level reached at the close of 1936 and maintained throughout this year. Value of construction contracts awarded in October and the first half of November was smaller than in the preceding six weeks, according to figures of the F. W. Dodge Corporation. The decline was chiefly in private non-residential construction. Factory employment declined substantially in October and pay rolls showed little change, although an increase is usual at this season. Declines in the number employed were reported by factories producing steel, machinery, lumber, and textiles, and in many smaller industries. There was a seasonal increase in employment at automobile factories. Employment and pay rolls increased seasonally at mines and at establishments engaged in wholesale and retail trade. WHOLESALE PRICES PU. CE NT PEA CENT 110 .....----.---,-------.----r---.---, 110 DISTRIBUTION 100 Sales at department stores and mail order sales increased seasonally in October. Throughout the year sales at department stores have been sustained, with seasonal fluctuations, and the Board's adjusted index of these sales has shown little change. so 80 70 Freight-car loadings declined in October and the first half of November, reflecting smaller shipments of forest products, ore, and miscellaneous frelght. 60 50 40 30 1932 1933 1934 1935 1936 1937 Indexes compiled by the United States Bureau of Labor Statistics, 1926 100. By weeks, 1932_ to date. Latest figure is for week ending November 20, 1987. = COMMODITY PRICES Prices of industrial materials, particularly non-ferrous metals, steel scrap, rubber, and hides, declined further from the middle of October to the third week of November, and there were some decreases in the prices of finished industrial products. Live stock and meat prices declined substantially and coffee pricesdroppedsharplyfollowing the announcement by Brazil of modification of its control policy. MEMBER BANK CREDIT BANK CREDIT 16 t - - + --.....----+------1 f--+---+-----¾---~ 15 14 t - - t - -, ~'----+----l t--1-- ----- - + - - ~ 13 t--1----,,r~ - t - - - - - + - -----I 34 1935 1936 19J7 t---1---:::,o'jW;=, '34 ' "~ INC Wednesday figures for reporting member banks In 101 leadinir cities. September 15, 1934, throueh November 17, 1937. During the first half of November the Federal Reserve banks purchased $28,525,000 of United States Government securities, in accordance with the policy adopted in September to provide additional reserves for meeting seasonal currency and other requirements. From the middle of October to November 17, excess reserves of member banks increased from about $1,000,000,000 to $1,100,000,000, reflecting the Federal Reserve security purchases and a considerable decline in required reserves at member banks in New York City, caused partly by a reduction in demand deposits arising from a liquidation of brokers' loans. Loans to brokers and dealers reported by banks in leading cities declined by $250,000,000 during the four weeks ending November 17. Commercial loans,following a steady increase for several months, declined after the middle of October. Member banks in New York City increased their holdings of United States Government securities by over $150,000,000 while banks outside New York City showed a further reduction. Deposits continued to show moderate reductions.
@FedFRASER