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THE MONTHLY REVIEW Of Agricultural, Industrial, Trade and Financial Conditions in the Tenth .Federal Reserve District FEDERAL RESERVE Vol. 18 KANSAS CITY, R BANK Mo., EPORTS covering general business conditions in the Tenth Federal Reserve District for July were favorable for trade and industry and unfavorable for agriculture. Sales of merchandise at both wholesale and retail showed the best improvement over the corresponding month a year ago of the past four years. Production of flour, coal, and petroleum, and shipments of zinc ore and lead ore were larger than for July last year, but the output of cement was smaller. Market receipts of all classes of grain, except wheat, and of all species of livestock exceeded the July, 1932, totals. Meat packing establishments operated at a higher rate of activity than a year ago. Building operations remained inactive. Debits by banks to individual accounts increased substantially both as compared to June this year and July last year. Business failures showed marked improvement, being less numerous than for any month since September, 1928, with the amount of liabilities smaller than for any month since September, 1920. Prices of most agricultural commodities declined during the month. Declines in grain prices were severe although at the close values were higher than on June 1 and substantially above a year ago and the lows of the current year. The foremost unfavorable factors in the agricultural situation are the extremely poor crop prospects and a continuation of low prices for livestock and livestock products. Livestock feeders, dairymen, and poultrymen are confronted with higher feed prices and lower returns than existed at this time last year. The position of sheep raisers has improved somewhat as mutton and wool are higher than a year ago. Preparations for the fall seeding of winter wheat are general but soil conditions in the major wheat producing counties of Kansas are, due to a shortage of moisture, unfavorable. Financial OF SEPTEMBER KANSAS r, 1933 CI TY No. 9 BUSINESS IN THE TENTH FEDERAL RESERVE DISTRICT Percentages of Increase, or Decrease (-), for July 1933 over June 1933 and July 1932 and for the first seven months of 1933 over the like period in 1932. July 1933 7 Mos. 1933 Compared to Compared to Banking June 1933 July 1932 7 Mos. 1932 Payments by check........ - - - - 22.5 18.6 - 9.3 Federal Reserve Bank clearings............ 7.9 22.6 - 3.8 Business failures, number...................... -30.6 -46.8 --28.2 Business failures, liabilitie -40.6 -83.4 -61.6 Loans, 53 member bank 0.5 -10.9 Investments, 53 member banks............ 1.4 19.8 Net demand deposits, 53 member banks - o.8 10.7 Time deposits, 53 member banks·--····· 1.2 - 6.3 Savings deposits, 45 selected banks.-... - 0.4 - 7.6 Savings accounts, 45 selected banks.... 0.2 - 3.8 Distribution Wholesalers' sales, 5 lines combined .... - 0.5 - 1.7 37.5 Retailers' sales, 32 department stores.. -20.8 6.2 -10.4 Lumber sales, 157 retail yards .............. - 8.2 21.0 14.4 Life insurance, writte,..__ _ _ __ - o.6 -12.9 0.9 Construction Building contracts awarded, value. ___ . -0.5 -46.2 -37.3 Residential contracts awarded, value .. -46.2 20.1 - 5.7 Building permits in 16 cities, value. ___ - 5.4 -4.7 -39-4 Production Flour_ _ _ _ _ _ _ _ _ __ 4.8 2.4 4.8 Crude petroleu .. ~ - - - - - 16.3 7.2 34.I Soft coa.....__ _ _ _ _ _ _ _ __ 11.8 9.8 -9.3 Zinc ore (shipped) Tristate District.__. 259•7 o.8 64.3 Lead ore (shipped) Tristate DistricL. -34.2 300.1 28.3 2.2 -18.4 -4.2 Cement._·· · · · · · · - - - - - - -Grain receipts, 5 markets 30.2 Whea"---- - - - - -- - -47.7 -38.4 Corn .... _ _ _ _ _ _ _ __ __ 58.2 1391.3 252.5 Oat.,___ _ _ _ _ _ _ _ _ __ 232.7 92.6 31 •7 Ry.__ _ _ _ _ _ _ _ _ __ 21.8 2362.7 5o3.4 Barley_ _ _ _ _ _ _ _ _ __ 11 5•5 291.5 3.8 Kafir _ _ _ _ _ _ _ _ _ __ 43.4 -49.7 39.7 Livestock receipts, 6 markets Cattl.,__ _ _ _ _ _ _ _ __ -o.8 - 1.0 4.7 Calve.,___ _ _ _ _ _ _ _ __ 1 3•5 13.1 15-5 Hogs _ _ _ _ _ _ _ _ _ __ --22.4 2.5 -4.0 17.6 22.7 -10.3 Sheep...... - - - - - - - - - - Horses and mules .. _ _ _ _ _ __ - 3.8 162.6 18.0 Meat packing, 6 markets Cattle._ _ _ _ _ _ _ _ _ __ I.I 2.2 25.6 Calve..,___ _ _ _ _ _ _ _ __ 7.6 4.3 34:9 Hogs _ _ _ _ _ _ _ _ _ _ __ --26.1 29.8 3.8 -12.1 4.1 Sheep.·-····--------- -4.9 Stocker and feeder shipments, 4 markets Cattle._ _ _ _ _ _ _ _ _ __ -45.8 15.0 -3 2 .7 Calves._ _ _ _ _ _ _ _ _ __ - 2.3 --26.9 51 ·3 Hogs .. _ _ _ _ _ _ _ __ __ 121.9 102.5 467.6 Sheep .... _ _ _ _ _ _ _ _ _ __ -16.9 6.4 -5-4 Combined loans, discounts, and investments of fifty-three reporting member banks in leading cities of the Tenth District continued to increase during the four weeks ended August 9, and on that date were 4.4 per cent larger than one year earlier. Between July 12 and August 9 these banks enlarged their loans 0.5 per cent and their investments 1.4 per cent, with the total of the former, as of August 9, showing a reduction of 10.9 per cent and of the latter an increase of 19.8 per cent as compared to August 10, 1932. Compared to a year ago the reduction in loans and discounts was about equally divided between those secured by stocks and bonds and "all other" Net demand deposits declined o.8 per cent in four weeks loans. The increase in total investments was in United States and increased 10.7 per cent in fifty-two weeks, whereas, time securities as investments in other bonds, stocks, and securities deposits were 1.2 per cent larger on August 9 than four weeks earlier but 6.3 per cent smaller than a year ago. showed a small decline. This Copy Released For Publication In Morning Newspapers, August 29. THE MONTHLY REVIEW RESERVE BANK OPERATIONS: Member banks in the Tenth District reduced their borrowings from the Federal Reserve Bank of Kansas City and branches $3,461,753 in the four weeks ended August 9. Holdings of bills rediscounted for these banks, as of that date, totaled but $4,788,673 as against $21,224,580 on August 10, 1932, and were lower than on any weekly reporting date since March 25, 1925. The total of bills purchased in the open market declined slightly in the four weeks to the lowest levels in nine years. The bank increased its holdings of United States Government securities from $63,146,rno on July 12 to $66,096,100 on August 9, at which time they were $8,829,000 larger than on August 10, 1932. Federal reserve note circulation declined approximately one million dollars between July 12 and August 9, but Federal reserve bank note circulation expanded slightly. Federal reserve note circulation has increased 16.8 per cent since August 10, 1932. AllFederalreserve bank notes have been issued during the current year. On August 9 member banks~ reserve deposits were 10.5 per cent larger than four weeks earlier and 59 per cent larger than on August IO, 1932. Principal resources and liability items of the fifty-three reporting banks and of the Federal Reserve Bank of Kans~s City, as of three dates, follows: REPORTING MEMBER BANKS Aug. 9, 1933 July 12, 1933 Aug. 10, 1932 Loans and investments-total... '/,518,000,000 '/,513,000,000 '/,496,000,000 Loans and discounts-total.-..-. 221,000,000 220,000,000 248,000,000 Secured by stocks and bonds 57,000,000 58,000,000 70,000,000 All other loans and discounts 164,000,000 162,000,000 178,000,000 lnvestments-tota._____ 297,000,000 293,000,000 248,000,000 U.S. securities ...... _ _ _ _ 189,000,000 186,000,000 139,000,000 Other securitie.,_____ 108,000,000 108,000,000 109,000,000 Reserve with F. R.. bank..-......... 63,000,000 61,000,000 43,000,000 Net demand deposits.................. 362,000,000 365,000,000 327,000,000 175,000,000 Time deposits_··-························ 164,000,000 162,000,000 Government deposits.................. 10,000,000 10,000,000 4,000,000 FEDERAL RESERVE BANK Aug. 9, 1933 July 12, 1933 Aug. 10, 1932 Gold reserve.,_______ '/,149,962,161 '/,146,670,507 '/, 83,766,574 Other cash .. _ _ _ _ _ _ _ 10,182,6o3 10,527,4II 7,283,283 Bills discounte.~ - - - 4,788,673 8,250,426 21,224,580 Bills purchased............................ 197,822 205,577 945,758 U. S. securities ........ _ _ _ _ 66,096,100 63,146,100 57,267,100 Total bills and securities............ 71,082,595 71,602,103 79,437,438 Total resources .... _ _ _ _ _ 257,303,431 259,273,623 193,033,575 F. R. notes in circulation.·--···· II1,162,235 112,26o,375 95,183,215 F. R. bank notes in circulation 983,722 976,000 Member banks' reserve deposits 106,563,729 96,458,009 67,006,653 The discount rate of the Federal Reserve Bank of Kansas City, on all classes of paper and all maturities, remained unchanged at 3½ per cent. SAVINGS: Reports from forty-five banks in selected cities of the District indicate a slight increase in the number of savings accounts and a slight decrease in the amount of savings deposits during July. On August I total savings deposits, as reported by these banks, were 7.6 per cent and the number of savings accounts 3.8 per cent less than one year earlier. Savings accounts and savings deposits as reported by the forty-five banks for the three dates of comparison: August 1, 1933 ...... _ _ _ _ __ July 1, 193.,.__ _ _ _ _ _ __ August 1, 1932........ "l Savings AccoQDtS 368,411 367,735 383,071 Savings Deposits '$ 99,288,280 99,720,788 107,467,873 Commercial Failures Of the 1,421 July business insolvencies, reported for the United States by Dun and Bradstreet, Incorporated, 75 occurred in this District. Totals for both the nation and the District were the smallest recorded for any month since Septem- her, of the years 1924 and 1928, respectively. The amount of liabilities involved in the defaults were also comparatively light, the District making the best showing since September, 1920, and the United States the best showing since July of that year. Business failures as reported by Dun and Bradstreet, Inc.: TENTH DISTRICT Number Liabilities July 1933 .. _ _ _ _ _ _ 75 '/, 605,334 June I933·-··························· 108 1,019,170 July 1932 ...... _ _ _ _ _ 141 3,639,171 Seven months 1933·--········· 691 9,457,241 Seven months 1932.---······· 962 24,627,018 UNITED STATES Number Liabilities 1,421 f, 27,481,103 1,648 35,344,909 2,596 87,189,639 14,144 355,071,851 20,029 624,473,927 Bank Debits Debits to individual accounts, as reported by banks in twenty-nine leading cities of this District for the five weeks ended August 2, aggregated $1,117,638,000, or 22.5 per cent above the total for the preceding five weeks and I 8.6 per cent larger than for the corresponding five weeks last year. The increase over the preceding year follows an increase of 2..6 per cent reported for June this year over June last year, and otherwise is the first increase reported since November, 1929. The improvement was general with a majority of cities reporting increases for the first time in months. The totals by cities: Albuquerque, N. M _ _ __ Atchison, Kans .. _ _ __ Bartlesville, Oki...__ _ __ Casper, Wyo.·--··························· Cheyenne, Wyo ........................... Colorado Springs, Colo .. -.......... . Denver, Colo .............................. . Enid, Okla ..· - · · · · - - - - Fremont, Nebr..- ........................ . Grand Junction, Colo ................ . Guthrie, Oki...__ _ _ _ __ 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 ............................ . Per cent FIVE WEEK.S ENDED Change August 2, 1933 August 3, 1932 -25.8 1, 6,643,000 '/, 8,951,000 40.6 3, 255,000 4,575,000 20,7II,OOO 27,609,000 33.3 -2.4 4,810,000 4,926,000 - 7.8 5,487,ooo 5,954,000 - 8.2 13,020,000 14,190,000 II.0 113,470,000 125,905,000 15,661,000 11,583,000 35.2. 2,537,000 2,368,000 - 6.7 1,545,000 -13.8 1,793,000 1,808,000 1,302,000 38.9 17,945,000 18,573,000 3.5 18.9 3,900,000 3, 279,000 8,009,000 43.6 5,579,000 -11.5 12,667,000 14,309,000 275,217,000 396,758,000 44• 2 24.4 3,678,000 4,574,000 24,071,000 -4.7 25,247,000 6,801,000 7,410,000 9.0 10.0 82,194,000 74,708,000 25·3 2,765,000 3,465,000 143,181,000 132,014,000 8.5 - 2.2 3,280,000 3,353,000 -21.I 12,137,000 15,388,000 13,755,000 9,562,000 4.1-9 32,182,000 28.9 24,968,000 18,676,000 17,140,000 9.0 - z.6 74,423,000 76,373,000 48,952,000 7.9 45,355,000 Total 29 cities, 5 weeks............ Total 29 cities, 31 weeks............ '/,1,117,638,000 5,381,879,000 '/, 942,353,000 5,933,513,000 - 18.6 9.3 Federal Reserve Bank Clearings The number of checks collected through this bank and branches at Omaha, Denver, and Oklahoma City in July failed to equal the June total but exceeded the total for July, 1932, by 15.5 per cent. However, the dollar volume of checks handled increased 7.9 per cent as compared to June· and was 2.2.6 per cent larger than a year ago. 1v The number and value of checks collected through this bank and branches are shown in the following table: ITEMS July·-················· June ................. . Seven months .. 1933 4,323,092 4,400,107 27,373,67° 1932 3,742,IIO 4,614,109 3 1,593,85 2 AMOUNT 1933 1, 634,691,000 588,055,000 3,6o7,33o,ooo 540,241,000 3,749,7 29,000 THE MONTHLY REVIEW 3 RETAIL TRADE AT 32 DEPARTMENT STORES IN THE TENTH FEDERAL RESERVE DISTRICT SALES STOCKS (RETAIL) ACCOUNTS RECEIVABLE AMOUNTS COLLECTED Stores July 1933 7 Mos. 1933 July 31, 1933 STOCK TURNOVER July 31, 1933 July 1933 Report- Compared to Compared to Compared to July 7 Months Compared to Compared to ing July 1932 7 Mos. 1932 June30,1933 July31,1932 1933 1932 1933 1932 June 30, 1933 July 31, 1932 June 1933 July 1932 Kansas City........ 4 5.2 -13.0 8.5 -13.2 .14 .II I.17 I.IO -14.2 - 0.6 - 3.3 - 3.9 Denver.................. 4 14.2 - 5.2 5.2 - 6.1 .23 .18 1.75 1.48 - 9.2 - 2.0 3.2 12.0 Oklahoma City.... 3 4.7 -1 2.5 1.7 - 8.8 .21 .16 1.93 1.53 -10.1 - 7.5 - 4.3 - 2.4 Tulsa .................... 3 20.0 - 0.3 o.8 7.0 :27 .23 2.76 2.41 - 4.7 11.6 - o.7 1.5 Wichita................ 3 - 7.0 -15.3 - 6.7 -35.1 .20 .15 1.67 1.32 -16.9 -32.9 Even -12-4 Other cities .......... I 5 1 1 1 1 - o.4 -13.3 -I0.I - 3.6 · 9 • 7 1.57 1.5 - 5.9 - 9.3 - 9.7 - 3.5 Total._................. 32 6.2 -10.4 1.3 -11.0 .19 .16 NOTE: Percentages of collections in July on accounts June 30, all stores reporting 34.2. Trade Trade at both wholesale and retail experienced the lthird consecutive and largest improvement over the corresponding month a year ago in July. Dollar sales of thirty-two department stores, located throughout the District, although showing a normal seasonal decline of 20.8 per cent as compared to June, were 6.2 per cent in excess of the July, 1932, total. The increase over July of the previous year is the first recorded since 1929 and compares with increases of o.8 per cent in May and 1.8 per cent in June this year over May and June last year. In 1932,July sales were 29.7 per cent, in 1931, 14.3 per cent, and in 1930, 6.3 per cent less than in the like month of the preceding year. Sales of merchandise at wholesale have increased more rapidly the past three months as compared to the corresponding month of the preceding year than retail sales. Sales of five represen ta ti ve wholesale lines combined, which recorded their first increase in four years of 7 per cent in May, increased 11.6 per cent in June and 37.5 per cent in July as compared to June and July, 1932. The increase for July this year over July last year follows three successive declines of 16.2, 17.4, and 32.8 per cent, respectively, for July of the years 1930, 1931, and 1932 compared to the previous year. Each of the five reporting lines shared in the increase, with sales of dry goods reported as 95.8, groceries 17.6, hardware 34.1, furniture l 14.7, and drugs 3.6 per cent larger than a year ago. Compared to June, sales of dry goods registered the first increase in three years and the largest in over ten years, whereas, those of hardware declined more and of furniture considerably less than the usual seasonal amount. Sales of groceries and drugs, which ordinarily show a slight increase, declined 8.5 and o.8 per cent, respectively. For the first time in seven years stocks of merchandise on hand at the reporting department stores on July 31 were larger than on June 30, increasing 1.3 per cent during the month. However, reductions since July 31, 1932, amounted to II per cent, making the seventh consecutive cut on a year to year comparative basis. All five representative wholesale lines increased their inventories during July, but stocks of dry goods, groceries, hardware, and drugs were 0.4, 8. 1, 4.9, and 12.4 per cent, respectively, lighter on July 31, 1933, than on July 31, 1932, but those of furniture were the same. Reporting Stores Dry goods___ 6 Groceries .... _ _ _ _ 4 Hardwar..___ _ _ _ 9 Furnitur.________ 5 Drugs...... ·-······--·········· 6 1.57 1.4o - 9.1 - 6.2 Collections same month last year 31.4. Collections at both wholesale and retail were, on the whole, better than a year ago. The department stores reported 34.2 per cent of amounts outstanding on June 30 collected in July as compared to collection percentages of 34.3 per cent for June this year and 31.4 per cent for July last year. Grain Marketing Higher prices were an effective stimulant to the unusually heavy marketings of all classes of grain except wheat and kafir in July. Arrivals of all classes of grain at the five principal markets of the District were heavier than in the preceding month and, wheat excepted, substantially larger than a year ago or in recent years. Receipts of wheat were the smallest for any July in eight years, or since the use of the combine became prevalent. They were 47.7 per cent lighter than a year ago and equal to but 40 per cent of average July volume, which is the heaviest of the year ordinarily. The light offerings reflect an extremely short crop and a tendency on the part of producers to hold for higher prices. Marketings of corn, oats, rye, and barley were exceptionally heavy. Receipts of corn were the largest for any month since February, 1930, oat_s since August, 1929, rye since September, 1930, and barley smce October, 1931. The July volume of barley was the largest in three years, that of oats since 1925, and of corn and rye in fourteen years of record. Offerings of kafir were the heaviest in four years but 23 per cent short of normal. Receipts of grain at the five markets are shown in the following table with comparisons to June this year and July, 1932: Hutchinson...... Kansas City..._. Omaha.............. St. Joseph._....... Wichita·--········· Wheat Corn Bushels Bushels 2,000,700 u,250 10,976,000 3,496,500 3,601,600 3,613,400 2,331,200 2,862,000 2,698,500 145,600 July 1933 .......... 21,608,000 June 1933.......... 16,596,100 July 1932_ ........ 41,289,850 7 Months 1933. 69,913,000 7 Months 1932 113,472,550 Barley Bushels 2,500 76,800 121,600 17,500 2,600 Kafir Bushels 16 900 119:000 5,900 221,000 56,450 102,550 582,300 96,500 525,300 506,000 135,900 94,800 97,300 911,000 Oats Rye Bushels Bushels 4,500 596,000 13,500 764,000 1'28,800 596,000 3,000 22,500 10,128,750 1,983,000 6,401,650 1,505,500 679,200 596,000 32,065,050 7,720,000 9,097,550 4,008,500 145,300 119,300 1,812,400 The July grain market was one of the most hectic and erratic in the history of the exchanges. Prices of all grains advanced rapidly up to the forepart of the third week of the month, at WHOLESALE TRADE IN THE TENTH FEDERAL RESERVE DISTRICT SALES OuTSTANDINGS AMOUNTS COLLECTED July 1933 compared to July 31, 1933 compared to July 1933 compared to June 1933 July 1932 June 30, 1933 July 31, 1932 June 1933 July 193:2 34•9 95.8 15.7 10.2 1:2.3 -4•5 - 8.5 17.6 2.9 1:2.8 - 8.8 17.0 -19.6 34.I - 0.9 1.8 - 6.3 18.6 - 9.1 114.7 - 2.8 2.I Z.2 59.2 - o.8 3.6 - 2.9 - 8.5 - 5-5 - 5.7 STOCKS July 31, 1933 compared to June 30, 1933 July 31, 1932 25.5 - 0.4 1.6 - 8.1 2 7--4.9 u.7 Even I.I -12.4 THE MONTHLY REVIEW 4 which time they were at the highest levels in three years, and then in two days, July 19th and 20th, dropped to levels substantially below July I quotations, but still above those of June I. All exchanges were closed for two days, reopening Monday, July 24, under rigid restrictions, with prices "frozen" at a minimum equal to the close of July 20 and with limits on maximum daily fluctuations in the various classes of grain. Thereafter prices advanc.ed and the minimum restrictions were removed, to be restored as of the close of July 31, following three days of declining prices, and to remain in effect until August I 5 when they expired. Maximum daily fluctuations in effect after July 31 were 5 cents per bushel for wheat, rye, and barley, 4 cents for corn, and 3 cents for oats. The principal changes in cash grain prices at Kansas City in July, and comparisons with a year ago, are shown in the following table: Aug. July July July July June July 19, 31, 20, 19, 18, 30, 30, 193 2 1933 1933 1933 1933 1933 1933 No. 1 Hd. & dk. wheat'$ .81,¾ '$ .86¼ '$ .81 '$ .96 '$1.07 '$ .89,½ '$ .46,¼' No. 2 Mixed corn.......... .49 .43,¾ .48,½ .51 .57½ •49 .32 No. 2 White oats.......... .34 .32 .28 .38 .43,½ .42 .18 No. 2 Rye.. _.................. .70 .67 .6o .75 .85 .69 .39 No. 2 Barley.... ·-·········- .47 .44 .44 .54 .58 .44 .24 No. 2 Kafir.................... 1.15 1.08 1.01 1.05 1.36 1.27 .60 July and 1933 highs: Wheat,$1.09,corn, 58,½, and oats 48 cents per bushel. Flour Production Retailers' stocks of flour being exempt for thirty days from the processing tax on wheat of 30 cents per bushel, effective July 9, mills were forced to operate at a high rate of activity the first week of July to meet the tremendous rush for shipping directions on old contracts. Thereafter directions slowed up and sales slumped although the sharp break in grain prices encouraged some buying late in the month. The July output of flour at Tenth District mills was 4.8 per cent in excess of the unusually heavy June production and 2.4 per cent larger than a year ago, but 7 per cent short of the ten-year average for the month. Mills operated at 62.4 per cent of full-time capacity in July as against 59.5 per cent in June and 60.5 per cent in July, 1932. Output of flour at Tenth District mills as estimated from the weekly reports of southwestern mills to the Northwestern Miller: Atchiso Kansas City Omaha.. _ Salina.... Wichit Outsid July 193·3 Barrels III,012 493,557 109,157 u3,007 168,285 929,436 June 1933 Barrels 130,235 481,716 110,403 121,276 162,236 830,822 July 1932 Barrels 1o9,974 573,554 67,845 1 55,9 1 5 195,261 777,56o Tota,____________ 1,924,454 1,836,688 1,880,109 *United State________ 5,518,722 5,342,066 5,181,530 *Represents about two-thirds of the total output in the United States. Flour prices advanced rapidly with wheat the first half of the month and then followed the collapse and partial recovery in grains closing the month about $1.50 per barrel over June. This increase over the June close was due almost entirely to the processing tax on wheat. As corn and other grains advanced and pastures and meadows were adversely affected by dry weather, the demand for millfeeds improved and prices were higher. Quotations were reduced with the break in grain prices and showed little net change for the month. Crops Tenth District crops, with the exception of corn, white potatoes, and pastures, held their own or improved slightly in July but, nevertheless, present prospects are, on the whole, the poorest in years. Only two crops, tobacco and grapes, hold promise of exceeding the five-year average production and but five crops, spring wheat, sugar beets, beans, tobacco, and apples, are forecast as larger than in 1932. All other crops will be substantially smaller than a year ago or the five-year average. The forepart of July was hot and dry but cooler temperatures and rains late in July and the first three weeks of August, which although largely local in character eventually covered most of the District, afforded temporary relief. Crops in Colorado, Wyoming, western Kansas, and western Oklahoma suffered the most injury in July. Sugar beets, dry beans, and cotton held up well during the month. Pastures are extremely poor, those in the central part of the District furnishing little or no feed. Kansas reports a large acreage of sorghums and other forage crops planted in July to relieve the shortage of hay and other feeds. An unusually large acreage of alfalfa is being cut for seed and yields are good. Missouri is the only state to report fruit prospects as better than a year ago. Melon harvest is on in the Colorado Valley and grape cutting and apple harvest have commenced in the Ozarks. Plowing of wheat stubble had become general by mid-August. In the major wheat counties of western Kansas, where the soil is dry and hard, progress is difficult and for fall seeding conditions to be normal this area must receive an abundance of moisture by October 1st. Drouth has affected a larger area than in 1930, extending over practically the whole of the United States. The national outlook for various crops, as forecast by the Department of Agriculture on the basis of August I prospects, is herewith briefly summarized: CORN: Second smallest crop since 1901, promising to be but 215,000,000 bushels larger than the very short crop of 1930. ALL WHEAT: Smallest crop in forty years. OATS: Smallest crop since 1894. BARLEY: Smallest crop since 1922. GRAIN SORGHUMS: Prospective yields below average in all states. TOTAL GRAINS: Production will be 16 per cent less than in any of the last ten years and 24 per cent less than the average. TAME HAY: Condition below eight-year average in nearly all states, with crop forecast as smallest in twenty years with one exception, 1930. TOTAL HAY: Production forecast as 12 per cent below the five-year average, 10 per cent below 1932, and about the same as in 1931 and 1930, when similar conditions prevailed. PASTURES: August 1 condition the lowest on record. COTTON: Expected to be the smallest in ten years due to the reduction in acreage under the Agricultural Adjustment Program. The August 1 condition was the highest for that date since 1915, excepting 1931. POTATOES: Reduction about 18 per cent below a year ago and the smallest crop since 1916. SWEET POTATOES: Improved in July with present prospects indicating a crop 7 per cent above average. SUGAR BEETS: Improved in July. Acreage is large and if conditions are favorable the remainder of the season the crop will be the largest ever made. BEANS: A crop of 9,365,000 bags of 100 pounds each compared to the 1932 crop of 10,164,000 bags and the 1926-1930 average production of n,100,000 bags. TOBACCO: Due to the increased acreage, is expected to exceed last year's very short crop, but below production in any of the preceding five years. APPLES: Four per cent larger than the short crop of 1932 but 13 per cent below average. PEACHES: About 7 per cent larger than last year but a fifth smaller than the five-year average. PEARS: Prospects are for a crop 3 per cent less than average production. GRAPES: Production forecast as 19 per cent less than a year ago and 27 per cent under the five-year average. VEGETABLES: Seriously affected in practically all areas. 5 THE MONTHLY REVIEW Tenth District and United States production of the principal crops, as forecast August I by the Department of Agriculture, compared to the final returns for 1932, in thousands of uni ts, ooo omitted: TENTH DISTRICT Winter wheat, bu ..___ Spring wheat, bu ...--- All wheat, bu .......--·· Corn, bu._____ Oats, b ~ - - - Tame hay, tons·-······-· Potatoes, bu................. Cotton, bales................ Tobacco, pounds·-•·-··· Forecast Aug. 1, 1933 117,372 7,479 12.4,851 413,836 79,134 8,307 23,988 866 5,335 UNITED STATE S Production Forecast 1932 Aug. 1, 1933 183,800 340,355 6,117 159,316 189,917 499,671 524,390 2,273,019 145,427 666,745 8,809 64,910 30,854 29:2,668 900 n,314 4,807 1,299,154 Production 1932 461,679 264,604 726,283 2,875,570 1,:238,:231 69,794 357,679 13,002 1,015,512 Deducting 10,304,000 acres from the area of cotton under cultivation on July I as the probable removal by the Agricultural Adjustment Administration and allowing for the average abandonment on the remaining acreage, the indicated acreage to be harvested this year is placed at 29,704,000 acres, with a production of 12,314,000 bales of 500 pounds each. Cotton in this District has, with the exception of upland fields withstood the heat and drouth well and the August I condition is above average. Grasshoppers have done some damage but boll weevil infestation has been light. Most areas received rains by the third week of August and the crop is making good progress. Livestock MARKETING: July receipts of all species of livestock at the six principal market centers of the Tenth District were larger than a year ago, with marketings of calves and sheep exceeding the June totals. Supplies of hogs, including those shipped direct to packers' yards, sheep, and horses and mules exceeded the ten-year July average, whereas, marketings of cattle were equal to but 83.6 per cent and calves 72.3 per cent of the average. Offerings of cattle were comparatively light until higher corn prices and the drouth forced shipments. Quality was the best of the year, improving as the month advanced. The marketing of hogs was also stimulated by higher feed costs and receipts, although as usual considerably lighter than in June, were the heaviest for July since 1929. PRICES: Beef steers advanced 25 to 50 cents and cows and heifers 15 cents per hundredweight in July. Other classes of cattle were mostly steady. The top for July and the seven months this year was '$7.10 compared to $9.35 last year. The July top for beef steers was the lowest for that month since 1906 and of heifers and feeders since 1911. Hog prices worked lower during the month, closing : at the low point for a loss of 35 to 50 cents per hundred pounds. The top was $4.70, or the lowest for the month since 1899, compared to $4.90 in June this year and $5, or the 1932 top, last July. Sheep and lambs made the most favorable showing of any class of livestock, most classes closing the month 50 cents to 1,1 per hundredweight higher, with practically all classes but ewes selling at $1 to $1.50 above a year ago. Excluding 1932, the July top for fat lambs was the lowest since 1912 and fat ewes were the lowest in forty years. MEAT PACKING: Packers purchased a larger than usual proportion of cattle and hogs, about the normal ratio of calves, and a smaller percentage of the sheep and lambs arriving at the six markets in July. Purchases of hogs, including those bought direct, were the heaviest for any July since 1924 and of cattle the largest since 1930. The July report of the number of animals slaughtered under Federal meat inspection in the United States shows increases of 22.6 per cent for cattle, 23.7 per cent for calves, 39.7 per cent for hogs, and 1.1 per cent for sheep compared to July, 1932. Totals for the seven months show increases for cattle, calves, and hogs of 5.7, 5.0, and 5.8 per cent, respectively, and a decrease of 5.8 per cent for sheep and lambs compared to the like period last year. RANGES AND PASTURES: The August 1 condition of western ranges is described by the Division of Crop and Livestock Estimates, United States Department of Agriculture, as extremely varied, ranging from fairly good in the higher elevations to extremely poor in the lower drouth areas. A continuation of the hot, dry weather through July reduced range conditions markedly and the August I condition of 74 per cent of normal was, with the exception of 1931, the lowest for that date in the eleven years of record. The drouth situation is reported as acute in the Texas Panhandle, western Oklahoma, western Kansas, southeastern Colorado, and northeastern New Mexico. Cattle and sheep in these drouth areas show heavy shrink, with shipments of cattle from them becoming increasingly heavy, and shipments of sheep and lambs expected to be forced. Livestock on the higher ranges have held up well. Recent rains have replenished water supplies and improved pastures in the Flint Hills and Blue Stem regions of Oklahoma and Kansas. CATTLE ON FEED: Estimates of the United States Department of Agriculture place the number of cattle on feed August 1 in the eleven corn belt states as 13 per cent larger than a year ago with the total approximating the five-year average. Nebraska reports an increase of 20 per cent, Kansas a decrease of 5 per cent, and Missouri no change. A survey of the advanced intentions of feeders indicates fewer feeder cattle will be purchased the remainder of the year than in the corresponding period a year ago. All states report a reduction JULY MOVEMENT OF LIVESTOCK IN THE TENTH DISTRICT R E CE I p T 22,498 4,971 7,065 2,722 5,624 3,912 Cattle 16,691 6,032 2,656 3,380 Calves 3,545 572 1,088 603 Hogs 4,568 2,212 1,124 13,535 46,792 758,9 27 615,437 28,759 42,734 53,076 351,661 3o5,759 5,808 5,945 7,94o 60,918 40,254 21,439 9,66o 3,777 Wichita ____ ·-········-· July 1933 310,956 Omaha_ _ _ __ St. Joseph---··-·····Denver_ _ _ __ Oklahoma City ___ _ 40,524 523,396 977,9 25 624,480 41,230 5oi,473 298,769 5,699,6o6 4,476,55 2 264,172 5,938,897 4,989,636 *Includes 135,184 hop shipped direct to packers' yards. 313,388 June 1933 2g6,86o July 193 7 Months 1933--··-- 2,o66,566 7 Months 1932___ 2,0S7,26o Pu1cHASED Fo1 SLAUGHTE1 STOCKERS AND FEEDERS Sheep 96,205 157,u9 76,:234 262,617 11,6o5 11,657 Calves Kansas City.·---····- s Hogs •251,309 232,629 u7,363 59,080 46,881 51,665 Cattle u2,014 106,827 33, 1 78 16,704 2 5,653 16,580 Sheep II,757 21,334 5,627 4,785 43,503 68,569 46,324 52,343 364,805 33,859 342,7u Cattle 60,403 77,364 26,155 9,478 13,946 7,539 194,885 197,036 155,214 1,207,817 1,181,363 Calves 16,795 4,399 5,573 1,742 5,216 2,256 Hogs •231,991 197,657 111,871 42,984 42,336 47,925 Sheep 74,446 133,394 69,017 13,II8 10,259 8,008 308,242 35,98I 674,764 324,168 913,237 33,439 26,670 2¢,184 519,695 '206, 197 5,085,447 2,475,889 197,668 4,901,5o6 2,817,076 6 THE MONTHLY REVIEW which is attributed to poor corn prospects and not so much to difficulties of financing as in I 932. THE LAMB CROP: A 1933 lamb crop 2.5 per cent smaller than a year ago, IO per cent less than 1931, and the smallest since 1929 is estimated by the United States Department of Agriculture. The principal losses were in the thirteen western states and due to adverse breeding conditions last fall, poor range conditions, and heavy losses of both ewes and lambs during the spring storms of April and May. The New Mexico crop was the smallest in recent years, and the Wyoming crop, where the lambing percentage is the lowest in ten years, was the smallest since 1929. A summary of the 1933 lamb crop report follows, with figures for ewes and lambs in thousands: Colorado ___....... New Mexico. __. Wyoming.......... United States.- Breeding Ewes January 1 1933 1932 1931 1,425 1,542 1,500 2,172 2,158 2,070 3,058 3,1 IO 2,950 36,196 36,735 36,213 Number of Lambs Docked 1932 1933 193 1 1,097 1,126 1,230 1,086 1,122 1,346 1,621 2,084 2,419 28,998 29,727 32,230 WOOL: Production of shorn wool in the United States for 1933 is estimated at 348,914,000 pounds, or about 1 per cent above that of 1932 and 7 per cent below the record production of 1931. A smaller number of sheep were, or are to be, shorn this year than last but fleeces are somewhat heavier, averaging 7.90 pounds this year against the low average of 7.75 pounds last year. Consumption of wool in the first six months this year, as reported by manufacturers to the Bureau of Census, was 50 per cent greater than for the first half of 1932 and domestic supplies at the beginning of the season were reported small. Wool prices reached their low point in July, 1932, but advances since April have carried present values to the highest levels since the spring of 1930, or about 130 per cent above a year ago. World production of wool is reported as smaller than a year ago. Wool production figures, as estimated by the United States Department of Agriculture, ooo omitted: Colorado..·-······· New Mexico·--· Wyoming...... -.. United States._. Number of Sheep Shorn 1933 1932 1931 1,523 1,600 1,736 2,490 2,520 2,520 3,060 3,390 3,600 44,087 44,431 46,284 Pounds of Wool Produced 1933 193 2 193 1 12,489 12,000 13,541 16,185 16,600 16,632 27,846 30,510 36,000 348,194 344,354 372,228 DAIRY AND POULTRY PRODUCTS: Prices of butter and butterfat, which advanced in June and the forepart of July, subsequently declined, and on August 16 were on a parity with quotations as of March 31 this year and July 31, 1932, or but slightly above the lows of the present depression. Milk production in the United States for the first six months of 1933 approximated that of 1932, although Government estimates placed the number of milk cows on farms June 1 as 2.3 per cent more than one year earlier and 14 per cent above the numbers as of June 1, 1928. The Department of Agriculture reported the commercial hatchery production of baby chicks for the first half of 1933 as about 8 per cent greater than for the corresponding period of 1932. First quarter hatchings were less and second quarter hatchings materially larger than a year ago, indicating pullets will commence laying later this year than last. There were about the same number of hens on farms July 1 this year as on July 1, 1932, but the total was 2 per cent less than two years ago and 7 per cent below the five-year average. Poultry and egg prices continue virtually steady at the lowest levels in recent years. On August 18 eggs were quoted at 9½ cents per dozen-at Kansas: City, or 5 cents under a year ago, and the various classes of poultry were averaging about 2 cents per pound less. Cold Storage Holdings Contrary to the usual seasonal tendencies, United States cold storage holdings of beef increased 19, pork 6.3, poultry 3.1, miscellaneous meats 15.2, and lard 11.8 per cent during July. Seasonal increases in stocks of eggs, butter, and cheese, although larger than in July, 1932, approximated the five-year average. Inventories of lamb and mutton showed about the normal reduction. Due to the rapid accumulation in recent mo'nths, August 1 stocks of all commodities except beef, lamb and mutton, and cheese exceeded the five-year average for that date, in contrast to substantial shortages the forepart of 1933. Holdings of beef are but 0.7 per cent and cheese 0.5 per cent short of normal, whereas, those of mutton show a loss of 33 per cent. August 1 holdings of all commodities, exclusive of lamb and mutton, were somewhat larger than a year ago. Cold storage holdings in the United States as reported by the Bureau of Agricultural Economics: *Aug. l 1933 41,845 Beef, lbs.·-- --················· Pork, lbs................. 807,855 Lamb and mutton, lbs ....................... 1,596 Poultry, lb 44,041 **Turkeys, lbs .................. 5,7°9 74,589 Miscellaneous meats, lbs.·-················· Lard, lbs,.·-·········································· 218,267 Eggs, cases............................................ 9,5°3 Eggs, frozen (case equivalent ) .. ........ 3,075 Butter, creamery, lbs.·---·-·····--·········· 150,907 Cheese, all varieties, lbs ..................... 94,300 **Included in Poultry. *Subject to revision. July I 1933 35,136 76o,96o 1,807 4 2,7°5 7,260 64,836 186,250 9,364 2,943 106,378 78,7 15 Aug. I Aug. I 1932 5-Yr.Av. 26,719 4 2, 147 643,052 727,968 1,012 2,368 39,233 3 1,47 1 5,985 51,570 121,618 6,431 2,832 uo,247 76,3 27 (ooo omitted). 5,516 71,181 153,969 9,318 2,876 12 8,497 94,815 Lum.her Retail lumber sales, as indicated by the reports of 157 yards in the District, although 8.2 per cent smaller in July than in June, were 21 per cent larger than a year ago. Dollar sales of all materials were also below the June volume but exceeded the July, 1932, total by 19.3 per cent. Stocks of lumber, in board feet, were increased 2.4 per cent during July but at the end of the month were 7.7 per cent lighter than on the corresponding date last year. Collections in July were equal to 24.2 per cent of amounts outstanding on June 30, which ratio compares with 22.7 per cent reported for June this year and 20 per cent for July last year. Retail lumber trade as reported by 157 retail yards in percentages of increase or decrease: Sales of lumber, board fee,...__ _ _ __ Sales of all materials, dollar,.__ _ _ _ _ Stocks of lumber, board fee.__ _ _ _ __ Outstandings, end of month.___ _ __ _ July 1933 Compared to June 1933 July 1932 - 8.2 21.0 1 9·3 1 ·3 2.4 - 7.7 - 1.5 -16.2 Building The F. W. Dodge Corporation reported the value of total building contracts awarded in the Tenth District during July at $4,407,818 and the expenditures for residential construction at $725,295. These totals reflect a decline of 46.2 per cent in total awards but an increase of 20.1 per cent in residential building as compared to July last year. The value of total awards is the smallest reported for any July in recent years which, excluding 1932, is also true of residential contracts. THE MONTHLY REVIEW The F. W. Dodge Corporation reports on total building contracts awarded in this District and the United States: July·-················· June.................. Seven months.. TENTH DISTRICT 1933 1932 '/, 4,407,818 '/, 8,195,303 4,428,226 4,009,432 24,087,040 38,406,385 UNITED STATES 1933 f, 82,693,100 102,980,100 515,444,700 193 2 '/,128,768,700 113,075,000 795,848,400 A consolidation of the reports of building permits issued in sixteen Tenth District cities during July shows that, although a slightly larger number of permits were issued during the month than a year ago, the · estimated cost of construction declined. The number and value of building permits issued in sixteen cities of this District: Albuquerque, N. M... ·-··············· Colorado Springs, Colo.·-··········· Denver, Colo ............................... 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, Oki Wichita, Kans ............................. Total 16 cities, July.................... Seven months .............................. PERMITS 1932 1933 44 43 18 25 306 271 IO 14 26 33 133 94 27 44 60 79 61 79 22 36 IO 13 2 13 26 17 42 47 49 54 S2 39 9 15 6,41'3 874 7,349 ESTIMATED CosT 1933 1932 '/, 29,5 23 $ 17,563 10,5>.22 10,885 161,683 189,015 11,275 4,500 20,407 21,975 132,300 127,450 26,660 32,389 142,684 68,IIS 106,955 lI0,57,5 6,167 4,172 16;200 5,3 15 10,800 JOO 1 7,735 10,620 18,6'20 20,945 24, 275 72,7 15 2 5,795 31,689 t, 727,079 4,693, 173 '/, 762,745 7,747,618 Cement Production of finished cement at Tenth District mills in July was the largest for any month since October and shipments the smallest since March. The July output was 18.4 per cent smaller than a year ago but shipments were 10.8 per cent larger. Production, shipments, and stocks of finished cement as estimated by the Bureau of Mines in thousands of barrels: TENTH DISTRICT UNITED STATES Production Shipments Stocks Production Shipments July 1933.......... 734 666 1,856 8,609 8,697 1,789 June 19JJ·-······· 718 701 7,804 7,979 July 1932.......... 900 610 1,964 7,659 9,218 7 Months 1933 3,315 3,861 36,277 36,624 7 Months 1932 3,459 3,609 41,815 43,522 Stocks 19,848 19,9j6 22,512 Bituminous Coal Output of soft coal at mines in the six coal producing states of the District, as estimated from the weekly reports of the Bureau of Mines, increased seasonally in July. Total production for the month was 11.8 per cent greater than in July, 1932, but otherwise lower than for any July in recent years. The figures follow: Colorado·- -········ Kansas .............. Missouri New Mexico Oklahoma. ___··········· Wyoming........ *July 1933 Tons 205,000 93,000 190,000 75,000 100,000 •June 1933 Tons 188,000 92,000 187,000 77,000 245,000 227,000 56,000 July 1932 Tons 175,000 78,000 253,000 63,000 68,ooo 175,000 Total six states............................ 908,000 827,000 812,000 Total United States ... _ _ _ _ 29,457,000 25,320,000 17,857,000 *Estimated from the weekly reports of the United States Bureau of Mines. 7 Petroleum Crude oil production in this District increased 88,ooo barrels per day in July. Increases in Oklahoma and Kansas were large, whereas, changes in Wyoming, Colorado, and New Mexico were minor. The July output for these five states, as estimated from the weekly reports of the American Petroleum Institute, totaled 24,532,000 barrels and was the largest monthly total in three years. Compared to the Bureau of Mines estimates for June this year and July last year, the July production was 16.3 per cent larger than for the preceding month and 34.1 per cent larger than for the corresponding month of 1932. The gross production figures, for the five states and the United States, follow: July 1932 •July 1933 June 1933 Oklahom...__ _ _ _ _ __ Kansas .... _ _ _ _ _ __ Wyoming........... _ _ __ Colorado,_ _ _ _ _ _ __ New Mexico........._ _ __ Barrels 18,435,000 4,003,000 856,000 77,000 1,161,000 Total five states.......................... 24,532,000 Total United States.................... 82,165,000 *Estimated, American Petroleum Institute. Barrels 15,507,000 Barrels 13,075,coo 3,486,000 973,000 77,000 1,051,000 2,855,000 21,094,000 82,841,000 18,287,000 66,310,000 1,162,000 94,000 1,101,000 Mid-continent crude oil prices, which were more or less confused the greater part of July by numerous schedules, are now clarified. Current 'posted prices ranged from 30 cents per barrel for oil testing below 25 degrees gravity to 62 cents per barrel for oil testing 40 degrees and over. A year ago the price spread was from 76 cents to $1 per barrel and two years ago from 30 cents to 42 cents per barrel. Field operations although showing a slight increase over June, when they were the least active, are extremely light. There were fewer wells completed in July and a smaller number of rigs up and wells drilling at the close of the month than at any corresponding time in recent years. Zinc and Lead In comparison to the record low levels of a year ago, shipments of zinc ore and lead ore from the Tri-state district shmved increases of 260 and 300 per cent, respectively, for the five weeks ended August 5, 1933, over the corresponding five weeks last year. As both classes of ore are selling much higher than a year ago, values show greater improvement than tonnage and are larger than at any time since January, 1931. The combined value of ores shipped for the first thirty-one weeks of 1933 exceeded that for all of last year. Shipments of zinc ore for the five weeks ended August 5 were o.8 per cent larger and of lead ore 34.2 per cent smaller than for the five weeks ended July 1. Zinc ore and lead ore shipments from mines in Oklahoma, Kansas, and Missouri: Oklahoma.......................................... Kansas.............................................. Missouri............................................ ZINC ORE Tons Value 17,777 1, 608,002 6,288 215,645 787 26,430 5 Weeks ended Aug. 5, 1933·-····· 24,852 'f, 850,077 5 Weeks ended July I, 1933........ 24,658 734,102 5 Weeks ended Aug. 6, 1932._..... 6,910 I 13,526 31 Weeks ended Aug. 5, 1933........ 147,,122 3,437,014 31 Weeks ended Aug. 6, 1932........ 89,686 1,548,701 LEAD ORE Tons Value 2,274 'f,I I 8,432 456 23,821 183 9,544 2,913 4,426 728 18,763 14,625 '/,151,797 220,386 19,463 777,299 518,172 Zinc ore prices advanced $2.50 per ton to $35 as compared with the 1933 low of $16, a 1932 low of $14, a July, 1932, price of $15 per ton and are now at the highest levels since June, 1930. Lead ore prices were unchanged at $52.50 per ton as against $32.50 January I and $30 a year ago. 8 THE MONTHLY REVIEW Business Conditions in the United States By the Federal Reserve Board .... MCIIIT PUICOIT 1"0 INDUSTRIAL PRODUCTION 1JO IJO ,A. 120 110 ,- \ / IDO ,0 120 '~\ 110 I 'I"'\. IO '- 10 '° so !RD 1ffl 100 ' I \....,r- ..J 19ll 1932 ,ott 90 80 10 60 lt:IS so Index number of industrial production, adjusted for seasonal variation. (1923-1925 avcrage-100.) Latest figure, July, 98. PfllC(.wf 120 110 110 IOO 100 ,0 90 80 10 70 70 60 50 50 WI 40 )0 Indexes of factory employment and payrolls, without adjustment for seasonal variation. (1923-1925 avcrage-100.) Latest~ figures, July, employment, 68.9; payrolls, 49.9. P[RC~: 110 100 80 80 '° '° ftO ~ 20 20 Indexes based on three month moving averages of F. W. Dodge data for 37 eastern states, adjusted for seasonal variation. (1923-1925 average--100.) Latest figures July, total 22, residential 13. BILLIONS C:, DOLLARS 'l BILLIOHS MtMBtR BANK CREDIT or DOLLARS g l'l33 Wednesday figures for reporting member banks in 90 cities. Latest figures arc for Wednesday, August 16. Industrial production increased further from June to July, contrary to seasonal tendency, and in recent weeks has continued at a relatively high level. Since the middle of July there have been reductions in wholesale prices of leading raw materials while prices of many other products have advanced. PRODUCTION AND EMPLOYMENT: Volume of industrial output, as measured by the Board's seasonally adjusted index, advanced from 91 per cent of the 1923-1925 average in June to 98 per cent in July, which compares with 6o per cent in March. The principal increase in July was at steel plants where activity advanced from 46 per cent of capacity to 59 per cent. Production in the lumber and coal industries was also in larger volume and daily average output of automobiles showed none of the usual seasonal decline. Output at shoe factories and woolen mills continued at an unusually high rate while consumption of cotton by domestic mills decreased somewhat. Cigarette production declined sharply from the high level of May and June. Since the middle of July a decrease has been reported in the output of steel. Working forces and payrolls at factories increased considerably between the middle of June and the middle of July. As in other recent months the largest increases were generally at establishments fabricating raw materials into semi-finished products. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a decline in July followed by an increase in the first half of August. Total awards during the six weeks were in about the same volume as in the preceding six weeks and in larger volume than in earlier periods this year. Department of Agriculture estimates as of August I indicate harvests generally smaller than a year ago. The cotton crop is forecast at 12,314,000 bales, a reduction of 700,000 bales from last season, reflecting curtailment in acreage as a part of the program of the Agricultural Adjustment Administration, offset in large part by an unusually high yield per acre. The wheat crop is estimated at 500,000,000 bushels, a reduction of 225,000,000 bushels from last year's small harvest. Feed crops are expected to be unusually small. DISTRIBUTION: Freight traffic increased further from June to July by _a substantial amount, but in recent weeks shipments, particularly of miscellaneous freight and grains, have been somewhat smaller. Department store sales declined in July by about the usual seasonal amount. They were larger than a year ago, however, and trade reports for the first half of August indicate an increase in sales. WHOLESALE PRICES: Wholesale prices of commodities increased further dur• ing the first three weeks of July and, according to the index of the Bureau of Labor Statistics, there has been little change in their general level since that time. Prices of grains, cotton, and many imported raw materials, however, were considerably lower in the third week of August than in the middle of July while prices of textiles were higher, reflecting in part the application of the processing tax on cotton. Prices of leather and coal also advanced during this period. FOREIGN EXCHANGE: In the exchange market the value of the dollar in terms of the French franc advanced from a low of 69 per cent of its gold parity on July 18 to 75 per cent at the beginning of August and since that time has fluctuated between 73 and 7 5 per cent. BANK CREDIT: Net demand deposits of weekly reporting member banks in 90 cities declined between the middle of July and the middle of August, owing in large part to further withdrawals of bankers' balances from banks in New York City and elsewhere. The banks' loans decreased by 'l,71,(X)O,(X)O during the period, reflecting chiefly a reduction in loans to brokers and dealers in securities. Their holdings of United States Government securities, after declining between July 19 and August 9, increased during the week ending August 16 in connection with Treasury financing at that time. Total reserves of all member banks increased by $81,000,000 during the four-week period ending August 16, reflecting chiefly the purchase of $42,000,(X)O of United States Government securities by the reserve banks and a return of $23,000,000 of currency from circulation. The growth in member bank reserves, occurring at a time when reserve requirements were being reduced in consequence of the decline in their deposits, brought their excess reserves to a level above 1,550,000,000. Money rates in the open market generally continued at low levels.
@FedFRASER