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MONTHLY ' REVIEW Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. '12, No. FEDERAL RESER.VE BANK OF KANSAS CITY 10 SEPTEMBER. 29, I 937 Business in the Tenth Federal Reserve District AUCUST 1937 COMPARED WITH AUCUST. 1936 % -·-----L--... i Denver • COLO. ·--------KANSA . % l(ANS . I -·-• • - 40 Financial • _.Wholesale Sa les .. _. ■ ____ Retail Sales. _ . Dept. Store Sales_ . I __ .. Lumber Sales ..- .. ■ lt-lt1rketinga +98 ··-···-·Wheat .. _._ ..... -············Corn .... __. _ _ I ·--···--·Flour._._ _ ... Cattle Slaugh_ter_ . ____ Calf Slau1thter._. ·- - Hoe Slau1thter___ ...Sheep Slaughter._. ■ ...Crude Petroleum._, .. Bituminous Coal.... Zinc Ore Shipments +7Z. Lead Ore Shipments Construction __ Total Awards ...... • -·----Res. A wards ___. ... Value of Permits ... --· -• ■ ···-··-··Cattle.. __ ... ___ l'rotluction I -61 -··-··--··Oats .... --.. - .. __ __ ..Calves ·····-···· - I Trade - · ·····Sheep .....- . • • _ .. Lif'e Ins. Sales ____ ····-·-···Ho1ts --··-······ I ■ ...Demand Deposits ... ■ --· INCREASE 10 20 30 40 _.. Mem. Bk. Invest._.. I 1• 10 F . R. Bk. Clearings .. I •• -•••• % DECREASE _ .Mem. Bk. Loans_ I I -83 % 40 30 20 __ ..Bank Debits ____ I I Unfavorable weather has done great damage to corn and there will be much less than half a crop. Grain and live stock prices tend lower. Bank loans are slightly lower than last month but are 20 % above a year ago. Bank investments tend moderately lower. Payments by check while 12% above last year are down substantially from the preceding month. Demand deposits are slightly higher. · Department store sales are 7 % higher and lumber sales 10 % lower than at the same time last year. Construction is lower than last month and building permits are 44 % below a year ago. Flour production is not so active but petroleum output continues high. Marketings and slaughter of live stock are much larger than last month, but generally lower than last year. Lead and zinc ore shipments continue large and prices are higher. INCREASE 10 20 30 ■ :' • ·-··-··-··-··--·....--.!.--- DECREASE 40 30 20 .. 10 8 MOS. 1937 COMPARED WITH 8 M~S. 1936 BUSINESS INDICATORS Miscellaneorc• ·-----Rainf'all .. _..._._ Cash Farm Income.* ....- Employment ____ .......... Pay Rolls .. _...... •For previous month ■ •• ••• ., -•• ■ ■ •• -·■ 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Member Bank Operations Following a substantial rise in the preceding six weeks, total loans and investments of reporting member banks in the Tenth District declined somewhat from the middle of August to the middle of September. The volume of commercial, industrial, and agricultural loans is now slightly below the year's high of five weeks earlier and investments, which had recently increased, again tend downward. In the past month, the decrease in investments was mainly in holdings of "·o ther" . s~curities, which have declined almost steadily since early this year, but holdings of Government obligations also declined. Loans continue about 18 per cent above and investments about 2 per cent below the level of a year ago. Reserve balances at this bank, correspondent balances with domestic banks, and demand deposits showed little change from the middle of August to the middle of September but interbank deposits are somewhat lower. Time and Government deposits increased. Principal items of condition of 51 member banks: Change from Sept. 15 Aug. 18 Sept. 16 1937 1937 1936 ( In thousands of dollars) · Loans and investments-totaL __ 719,835 -9,160 +34,089 Loans-total ____________ 286,838 -3,242 +43,328 Coml., indust., agric._ _ _ _ 177,999 -4,207 * Open market paper_ _ _ _ 26,253 -308 * To security brokers and dealers 4,458 + 95 -51 Othertopurchaseorcarrysecur. 14,288 +89 * Real estate loans _ _ _ _ 19,953 +348 +2,49G Loans to .banks_________ 806 -93 -2,071 All other loans___________________________ 43,081 + 834 * Investments-total ________________________ 432,997 -5,918 -9,239 U. S. Govt. direct obligations __ 266,111 -618 +7,947 Oblig. guar. by U. S. Govt, ______ 44,437 - 1,412 --4,917 Other securities _ _ _ _ _ 122,449 -3,888 -12,269 Reserve with F. R. Bank ______________ 176,679 -610 +34,422 Balances with domestic banks ____ 199,376 -1,807 -97,701 Demand deposits-adjusted ________ 505,025 -933 + 17,896 Time deposits -------------------------------- 146,458 + 2,482 + 558 U. S. Govt. deposits______________________ 12,786 +3,282 -10,897 Interbank deposits ------------------------ 371,874 -17,746 -40,137 *Comparable figures not available. Reserve Bank Operations Federal Reserve note circulation of this bank rose slightly further in the latter part of August and the first week of September, reaching 168½ million dollars before the return flow of currency after the Labor Day holiday. While now about the same as one month earlier, circulation is better than 8 per cent higher than a year ago. Effective September 3, the discount rate of this bank was reduced from 2 per cent to 11/2 per cent. The previous rate had been in effect since May 10, 1935. Holdings of bills discounted for member banks are now somewhat above the record low volume in January of this year but otherwise continue at a low level. 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 Sept. 15 Aug.18 Sept. 16 1937 1937 1936 ( In thousands of dollars) 313,631 -473 +47,115 524 + 348 + 440 87 Zero Ze1·0 580 -22 -322 120 -2 -263 124,128 Zero +1,201 488,206 + 4,895 +53,478 166,762 -511 + 12,528 255,078 -946 +41,1!)0 Following two months of greater than seasonal increases, dollar volume of check collections showed a greater than seasonal decline in August. So far this year dollar volume is about 6 per cent larger than a year ago. Check collections through this bank and branches: ITEMS 1937 August __________________ 5,865 July _ _ _ _ 6,376 Eight months ______ 47,950 AMOUNT 1937 CTn thousands) 5,621 $1,020,468 6,296 1,171,585 47,024 8,084,232 1936 1936 $ 963,467 1,081,898 7,689,114 Bank Debits Debits to individual accounts by banks in reporting centers declined more than seasonally in August but held at a level about 13 per cent above a year ago. It should be pointed out that this increase reflects in part higher price levels. Payments by check in thirty cities: Change from Aug. 1937 July 1937 Aug. 1936 (In thousands of dollars) Albuquerque, N. Mex. ___ _ 14,345 -1,811 + 1,830 Atchison, Kans. _____________ _ 3,639 -2,134 -139 Bartlesville, Okla. _________ _ 37,429 + 6,410 + 12,646 Casper, Wyo. ___________________ _ 6,055 -625 + 543 Cheyenne, Wyo. _ __ 9,099 -573 +1,364 Colorado Springs, Colo, __ 13,574 -2,756 -663 Denver, Colo. _________________ _ 168,983 -13,791 +11,141 Emporia, Kans. _____________ _ 3,980 -943 + 921 Enid, Okla. _____________________ _ 13,953 -13,711 + 1,624 Fremont, Nebr. _____________ _ 2,769 --469 +33 Grand Junction, Colo. ____ • 3,592 -385 + 290 Guthrie, Okla. _______________ _ 1,964 -213 +452 Hutchinson, Kans. _________ _ 13,325 -13,864 -1,090 Independence, Kans. _____ _ 2,863 -937 + 378 10,108 -84 + 1,336 Joplin, Mo. ---------------------Kansas City, Kans, _________ _ 15,064 -2,003 +2,475 Kansas City, Mo, _____________ _ 375,393 -101,819 + 57,243 Lawrence, Kans. _____________ _ 3,887 -1,394 +442 Lincoln, Nebr. ________________ . 28,055 -2,388 +496 Muskogee, Okla. ___________ _ 7,692 -892 +460 Oklahoma City, Okla. ___ _ 102,532 -27,205 +14,395 Okmulgee, Okla. ___________ _ 2,475 -281 + 134 Omaha, Nebr. _________________ _ 161,146 -5,572 +4,093 Pittsburg, Kans. _____________ _ 3,541 -549 -29 Pueblo, Colo. ___________________ _ 16,957 -3,327 +2,995 Salina, Kans. _________________ _ 11,990 -13,657 +324 St. Joseph, Mo. _____________ _ 28,405 -5,343 -387 Topeka, Kans. _______________ _ 18,871 - 7,158 +238 Tulsa, Okla. ____________________ 157,046 -9,951 +29,079 Wichita, Kans. _______________ _ 47,898 -24,492 +.443 District, 30 cities _____________ 1,286,630 -251,917 United States, 141 cities 31,885,769 -5,017,568 + 143,067 +416,902 FEDERAL RESERVE BANK OF KANSAS CITY Trade DEPARTM E T STORE SALES Dollar volume of sales at reporting department stores in this District showed less than the usual easonal increase from July to August, rising 17 per cent. August sales were 7 per cent higher than a year ago but retail prices, which are about 9 per cent higher, more than account for the larger sales. Moreover, retail trade at this time last year was adversely affected by the prolonged hot weather. Sales so far this year show a gain of about 6 per cent over last year. The Fairchild Retail Price Index, which has been rising steadily since July of last year, has shown only a small advance the past two months. Stocks of merchandise increased somewhat more than seasonally during August but are only about 8 per cent greater in value than a year ago. Since prices are about 9 per cent higher, the actual amount of goods on hand is probably little changed from -that at this time last year. Collections on open accounts averaged 41.3 per cent of receivables in August this year and 41.1 per cent last year, while installment collections averaged 13.1 and 13.7 per cent, respectively. Department store sales and stocks in leading cities: SALES STOCKS Aug .'37 8 Mos.'37 Aug. 31, '37 ·o. of comp. to comp. t o comp. to Stor es Aug.'36 8Mos.'36 July31,'37 Aug.31,'36 ~ r cent increase or decrease) Denver ____________ 4 -j- 4.8 + 7.6 + 4.9 + 13.5 Kansas City____ 4 + 6.3 + 6.2 + 7.4 +o.3 + 8.8 +3.6 + 20.2 + 2.9 Oklahoma City 3 Omaha ____________ 3 + 3.2 -1.5 + 22.9 + 12.4 Tulsa ______________ 4 + 11.7 + 9.6 + 17.8 +2.4 Wichita __________ 3 + 24.7 + 15.6 + 31.3 + 14.0 Other cities ____ 21 + 4.6 + 5.1 +11.1 +6.9 District __________ 42 + 7.0 + 6.3 + 12.3 + 7.8 W H OLESALE SALES The value of wholesale sales in this District rose about 5 per cent from July to August, sales of drugs increasing 4, dry goods 29, and furniture 40 per cent. Sales of groceries and paper showed little change while hardware sales declined 13 per ce-n t. In contrast with the preceding month when sales were below a year ago, August sales were 7 per cent great~r than last year. This increase, however, may be largely accounted for by higher wholesale commodity prices, the general level of which is also about 7 per cent higher than a year ago. Total safes for the first eight months of this· year show an incre;ase of about· 9 per cent over the same period in 1936. Wholesale prices declined in August and the· fir st week of September, the all-commodity index of the Bureau of Labor Statistics reaching the lowest point 3 since the first week in March. In the week ended September 11, prices rose slightly. Wholesale sales and collections reported by the Department of Commerce for this District: No. of Firms Drugs ______________ 10 Dry goods ________ 4 Furnitur e ________ 3 Groceries ________ 10 Hardware ________ 6 Paper ______________ 3 All other lines __ 18 SALES Aug. '37 8 Mo s. '37 COLLECTIONS* comp. to comp. to Aug. July Aug. Aug. '36 8 Mos.'36 1937 1937 1936 (Per cent change) (Median percentages) + 8.2 + 3.7 90.4 87.2 91.9 + 14.9 + 15.3 46.3 49.0 47.9 + 15.6 + 18.4 50.0 45.0 55.0 - 3.0 + 4.4 100.0 100.0 101.0 + 10.8 +0.3 48.8 55.3 64.7 -3.0 +9.9 62.5 69.0 67.6 + 17 .3 + 24.6 69.0 70.0 68.0 District ____________ 54 + 7.3 +8.9 73.0 76.7 79.2 *Collections on amounts receivable at beginning of month. Crops Nebraska corn prospects declined 105 million bushels in August and Kansas prospects 19 million, accompanied by losses of 9 million in Missouri and 5 million in Colorado. As a result, Nebraska will have about a third of a crop, Kansas between a fourth and a third, and Colorado about half a crop. Production in Missouri is not far below normal and Oklahoma already had a little better than half a crop. The size of this year's corn crop is affected not only by drought but also by the fact that planted acreages are far below normal, some corn land having been shifted to wheat. Seedbed preparation for fall wheat is largely completed and drilling of what probably will again be an extremely large acreage is in progress. Corn estimates of the Department of Agriculture: Final Final Aver. Indicated 1935 Sept. 1 Aug-.1 1936 '28-'32 (In thousands of bushels) Colo. _ _ _ 10,328 11,169 15,492 10,761 20,847 39,420 126,756 54,876 11,036 35,508 Kans. 40,032 72,890 146,489 Mo. ---------------- 124,308 133,516 74,358 179,334 26,859 106,630 223,843 Nebr. N. Mex, __________ 3,220 2,185 2,700 3,105 3,628 29,785 11,772 25,872 51,842 Okla. ------------ 29,785 2,260 2,341 2,981 3,794 984 Wyo. -----------7 States ________ 280,373 420,017 104,037 260,533 575,646 u. s. ______________2,549,281 2,658,748 1,529,327 2,296,669 2,554,772 · . . Except in Oklahoma, August rainfall in the District was generally much below normal. Colorado had only 72 per cent of normal rainfall, Nebraska 66, Kansas 65, New Mexico 64, Missouri 54, and Wyoming 50 per cent, while Oklahoma had 104 per cent. This lack of adequate moisture, together with high temperatures, is reflected principally in a sharp de- ·· · cline in corn crop prospects in this District and to a lesser extent in _prospect s for other late crops .as well. Rains· toward the latter part of· August and cooler weather in September were too late to benefit corn materially but are benefiting other·late crops. REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 4 Rainfall as reported by the Weather Bureau: COLORADO Denver ________ Leadville _ ___________ _ Pueblo Lamar _ _________ _ Garnett Steamboat Springs Aug. 1937 8 Mos. 1937 Total Normal Total Normal --nninches_)_ 1.43 8.42 10.73 .63 2.44 21.28 13.97 2.10 9.40 1.02 1.82 5.30 12.65 2.02 5.19 1.09 6.11 1.27 4.32 1.11 15.84 1.92 1.77 20.64 lrANSAS Topeka _ _ __ Iola _ _ _ __ Concordia Salina _______________ _ Wichita _ __ Hays Dodge City ________ _ Elkhart _ __ Goodland _ __ 3.35 1.94 1.98 1.71 2.86 2.82 .60 .52 1.01 4.08 3.64 2.91 3.40 3.13 3.14 2.67 2.15 2.52 15.50 28.68 14.89 14.04 21.39 14.o7 10.33 4.22 10.66 24.81 26.55 20.36 20.35 22.04 18.24 16.01 12.73 14.49 3.24 2.26 1.73 3.83 4.09 3.97 23.42 21.20 28.63 25.88 26.47 31.69 .97 1.69 2.00 3.07 1.37 .76 .27 2.46 3.05 3.57 3.43 3.52 2.57 2.38 1.71 2.37 17.87 15.65 15.39 19.70 13.24 9.86 7.41 8.97 20.39 21.06 21.49 20.19 15.45 15.04 12.83 15.13 .30 1.11 .20 1.94 1.17 1.02 8.44 11.85 5.41 12.27 9.11 6.96 5.76 3.96 2.41 8.41 8.23 6.73 2.54 3.21 3.54 2.89 2.72 2.17 3.48 2.68 24.80 29.87 14.76 27.80 18.62 19.76 11.48 27.35 30.09 21.87 24.13 19.36 21.90 18.31 1.34 .72 .12 .03 1.55 1.24 .53 .91 10.20 12.73 13.41 12.02 11.76 11.09 9.07 11.45 MISSOURI St. Joseph ______________ Kansas City ______ Joplin _ _ __ NEBRASKA Omaha ________ _ Lincoln _________________ _ Norfolk _ __ Grand Island ___ McCook _ __ North Platte _______ _ Bridgeport __________ _ Valentine _____________ NEW MEXICO Clayton Santa Fe __________ _ Farmington _________ OKLAHOMA . Tulsa McAlester ____________ _ Oklahoma City __ _ Pauls Valley ------Hobart _ _ __ Enid _ _ _ __ Woodward _ __ Abnormally low world wheat stocks, together with a higher level of world prices for this season's crop, has facilitated the adjustment of domestic prices to an export basis. Domestic prices now being affected by the world situation, wheat is somewhat lower because of a slow demand from importing countries, increased offerings of Russian grain, and more favorable wheat prospects in Australia and Argentina. Corn prices were steadied in August by deterioration in the crop in the western part of the Corn Belt but are lower in September as new crop corn becomes available from Texas and Oklahoma. Cash grain prices at the Kansas City market: Sept. 20 Aug. 31 1937 1937 No. l hd., dk., wheat, bu.._..$1.07 $1.06 No. 2 mixed corn, bu._________ .95 1.00 No. 2 white oats, bu.__________ .32 .30 .75 No. 2 rye, bu. ----··----------·-· .76 No.2barley, bu. _ _ _ .57 .58 No. 2 white kafir, cwt.________ 1.48 1.54 Grain Marketing Marketings of wheat declined sharply in August and September partly as a result of declining prices but reflecting also a seasonal after-harvest slackening. Following the most rapid rise in history, elevator stocks of wheat at Kansas City reached a peak of almost 35 million bushels in the week ended September 3. This figure compares with a record of 41 million bushels so held in 1931. Receipts of grain at five markets in the District: Hutchinson 845 Kansas City__ 15,242 Omaha __________ 4,029 St. Joseph______ 2,667 Wichita __________ 1,437 Corn Oats Rye Barley (In thousands of bushe~ 1 215 772 128 32 151 1,566 281 336 78 498 86 12 5 15 2 Aug. 1937 ______ 24,220 July 1937 ····-··· 86,069 Aug. 1936 ________ 12,230 8 Mos. 1937 ____ 151,107 8 Mos. 1936.___ 104,965 449 2,851 571 1,345 2,704 2,485 11,300 10,763 28,830 11,632 Wheat 496 224 282 898 698 Kafir 32 382 32 180 50 583 175 1,430 481 2,269 1,050 Aug.31 1936 $1.17½ 1.101/2 .46 .92 .90 1.77 Live Stock MARKETINGS Marketings of live stock increased substantially during August but have slackened in September. Receipts of cattle, calves, and sheep were in good volume, being somewhat larger than in August of last year and exceeding the August ten-year average by a small margin. Hog receipts, which do not usually increase during August, were half again as large as in the preceding month but still were 41 per cent less than a year ago and only about a third of normal. Live stock receipts at six markets in the District: WYOMING Cheyenne _ __ Casper _ _ __ Lander _ ________________ _ Sheridan ______________ _ July 31 1937 $1.17 .92 ½ .30 .81 .55 1.30 Denver -----·-·-·--···-· Kansas City___________ Oklahoma City ______ Omaha -------··-··-···St. Joseph --·-··•··-Wichita -----------·-··- Cattle 44,678 206,261 62,337 137,919 35,639 30,994 Aug. 1937 -------·--- 507,828 July 1937 309,098 Aug. 1936 ------·-···-- 491,596 8 Mos. 1937____________ 2,757,290 8 Mos. 1936_________ 2,793,208 Calves - 7,709 38,674 23,857 18,522 7,558 5,936 Hogs 13,856 76,590 29,331 63,066 25,787 22,708 Sheep 352,765 112,264 15,181 187,710 71,576 6,810 102,256 231,338 746,306 68,284 156,272 454,665 102,057 389,144 908,688 659,958 2,363,043 4,702,215 488,029 3,476,793 4,476,037 PRICES Influenced by increased marketings, the trend of live stock prices at the Kansas City market was lower in August, followed by strength in the first three weeks of September. Grain-fed beef steers, which are becoming increasingly scarce and which represent only a small fraction of total cattle receipts, reached their highest August price in seventeen years but the bulk of fat cattle values was lower. Hog prices, after reaching an eleven-year high early in the month, suffered the sharpest August break on record, declining $1.85 a hundred. Declines in sheep and lamb prices were largely seasonal in nature. Prices in September are somewhat higher than FEDERAL RESERVE BANK OF KANSAS CITY at the close of August. Cattle and hogs are at the highest September level since 1928 and lambs since 1929. Top live stock prices at the Kansas City market: Sept. 20 Aug. July 1937 1937 1937 - ( I n dollars per Beef steers ______________ 17.00 17.00 16.65 Stocker cattle __________ 10.00 10.00 10.00 Feeder cattle __________ 11.50 12.40 13.25 Calves _________ 11.00 10.00 10.00 Hogs _______________________ 11.90 13.20 12.75 Sheep ________________________ 7.60 6.60 6.60 Lambs ______________________ 11.00 11.00 11.10 Aug. Aug. Aug. 1936 1935 1934 hundredweight)-9.50 11.85 10.00 7.25 8.40 5.00 8.25 10.40 8.10 7.60 8.75 6.50 11.65 12.00 7.80 6.25 6.00 6.00 10.25 9.10 7.36 STOCKERS AND FEEDERS Shipments of stocker and feeder live stock to the country increased seasonally during August, rising further in September. Except for hogs, August shipments were much heavier than a year ago and represented the heaviest outbound movement for that month in recent years. Shipments of cattle and calves were 10 and 33 per cent, respectively, above the August ten-year average. Shipments of sheep were about average but hog shipments are still about 42 per cent below the average volume. Increased production of feed grains this year, together with lower live stock prices in August and the present shortage of numbers on feed, tends to increase feeding operations. The corn-hog feeding ratio has only recently attained a prof~table basis for the first time in more than a year. A large number of cattle marketed are being bought for finishing purposes, decreasing the number going to immediate slaughter. Stocker and feeder shipments from four markets: Cattle Denver -------------------------- 14,059 Kansas City ---------------- 74,664 Omaha ------------------------- 37,165 St. Joseph ____________________ 6,750 Calves 1,733 9,461 5,632 405 Hogs 7 2,130 1,821 1,754 Sheep 68,304 40,876 73,479 16,551 Aug. 1937 -------------------- 132,638 July 1937 -------------------- 64,754 Aug. 1936 -----------·-------- 85,892 8 Mos. 1937__________________ 564,301 8 Mos. 1936_________ --------- 464,114 17,231 5,398 15,177 72,072 61,687 5,712 4,098 13,856 29,441 46,554 199,210 63,181 154,835 536,950 527,808 RANGES AND PASTURES The usual August decline in the condition of western ranges and pastures was ac~entuated somewhat by lack of moisture and continued warm weather. Cooler weather in September has been helpful. Ranges continue in excellent condition in Wyoming and the western parts of Colorado and New Mexico but are dry and short in Nebraska, eastern Colorado and New Mexico, and western Kansas and Oklahoma. In this drought section, prospects for fall wheat pasture are not favorable. Late August rains appreciably improved ranges and pastures and feed crop prospects in the eastern parts of Oklahoma and 5 Kansas. In the Sand Hills area of Nebraska, pastures are about as poor as in either of the drought years 1934 and 1936 and hay and feed supplies are smaller. Some cattle have been forced to move from eastern Colorado and indications are that fairly heavy shipments may result from other dry areas. Range and pasture conditions reported by the Department of Agriculture: RANGES PASTURES Sept. 1 Sept.1 '27-'36 Sept. 1 Sept. 1 '23-'32 1937 1936 Aver. 1937 1936 Aver. (In percentages of 100 as normal)-Colorado 72 82 83 50 62 80 Kansas _________ 50 43 73 43 14 73 Missouri ____ 70 7 75 Nebraska ____ 63 61 82 33 25 73 New Mexico__ 83 71 82 66 44 82 Oklahoma ____ 69 37 68 46 14 65 ~yoming _____ 89 69 79 81 48 85 Cattle and sheep are generally in good condition and are · moving to market at good weights. This is particularly true of sheep. Contracting of feeder lambs for fall delivery has been on a relatively large scale this year and at steady to higher prices. In Wyoming it is estimated that from 50 to 75 per cent of all lambs had been sold or contracted for by September 1. Farm Income Cash farm income in this District was almost twice as large in July as in the preceding month, mainly as a result of the large volume of wheat marketings at good prices. Moreover, total income was 21 per cent larger than in July of last year although decreases were shown for Nebraska, Wyoming, and New Mexico because of smaller receipts from live stock. Farm income during the first seven months of 1937 has been larger than a year ago in all states of the District except Nebraska, a decline in that state resulting from severely restricted live stock feeding operations. Prices received by farmers are slightly lower than a year ago but prices paid by farmers for what they buy are higher, the ratio being 93 at the middle of August as compared with 98 a year ago. Income estimates of the Department of Agriculture: Live Stock Govt. Crops and Products Payments Total - - (In thousands of dollars ) 3,651 51,224 17,311 10,393 616 22,395 487 4,300 14,125 14,648 10,103 1,507 6,378 3,128 183 212 1,125 962 28 54 36 8,034 65,561 33,084 21,458 2,151 28,827 3,651 July 1937 --·----------- 105,977 June 1937 _____________ 18,821 July 1936 ________________ 66,914 7 Mos. 1937 __ ···----- 213,021 7 Mos. 1936 ------·---- 138,419 54,189 59,112 61,672 402,309 418,835 2,600 6,603 5,622 67,931 49,172 162,766 84,536 134,208 683,261 606,426 Colorado --·------------Kansas -------------------Missouri _______________ _ Nebraska ____________ _ New Mexico _________ _ Oklahoma -------------Wyoming _______ _._______ _ REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 6 Meat Packing Operations at meat-packing plants in the District during August showed a sharp seasonal increase from the rather low level of the preceding month. Even so, the slaughter of cattle, calves, and hogs was somewhat short of that a year ago. The slaughter of cattle and hogs was also below the August ten-year average, cattle falling 9 and hogs 59 per cent below Sheep slaughter, while 13 per cent larger than in August of last year, was 20 per cent below the tenyear average. Packers' purchases at six markets in the District: Cattle 16,426 70,011 21,439 75,801 24,134 14,274 Calves 5,018 26,409 14,845 9,828 7,067 5,888 Hogs 13,839 71,345 24,377 53,601 19,262 21,566 Sheep 50,717 55,645 5,912 100,909 53,229 5,600 Aug. 1937 ______________ 222,085 155,669 July 1937 Aug. 1936 ______________ 287,956 1937 ____________ 1,449,314 8 Mos. 8 Mos. 1936 ____________ 1,661,763 69,055 52,393 78,373 425,887 392,059 203,990 131,675 317,091 2,088,877 2,916,231 272,012 231,954 240,439 2,556,040 2,309,247 Denver ---- -------------Kansas City __________ Oklahoma City ______ Omaha ____________________ St. Joseph ______________ Wichita ------------------ Cold Storage Holdings A further contraseasonal decrease in United States cold storage stocks of beef and poultry and sharply greater than seasonal declines in holdings of pork and lard occurred in August, resulting in stocks of beef which were 15, pork 29, and lard 10 per cent below the September 1 five-year average. Poultry holdings, however, continue high. Stocks of eggs and cheese showed less than the usual seasonal changes but both continue above average. United States cold storage holdings: · Sept. 1 1937 Beef, lbs. ______________ Pork, lbs. -------------------------Lamb and mutton, lbs.____ Poultry, lbs. -------------------Miscellaneous meats, lbs. Lard, lbs. __ ____ _ _____ Eggs, shell, cases____________ Eggs,frozen (case equiv.) Butter, creamery, lbs. ____ Cheese, all varieties, lbs. Aug. 1 Sept. 1 Sept. 1 1937 1936 5-Yr. Av. --(In thousands of units) 45,066 51,466 64,255 52,888 · 370,519 467,273 420,848 524,736 1,917 1,840 2,634 1,753 63,759 70,040 65,488 44,910 49,391 58,070 73,154 66,416 118,756 156,959 110,561 131,261 8,388 8,718 7,006 7,444 4,579 4,768 3,103 3,021 132,976 123,863 112,106 134,433 123,264 118,235 107,542 104,755 Flour Milling Activity at southwestern flour mills declined contraseasonally during August and is lower in September as shipping directions on contracts become increasingly difficult . to obtain. Notwithstanding this drop in activity, August output was equal to that of a year ago and was about 5 per cent above the August average for the past ten years. Flour sales, hindered ·by declining prices, were · sharply lower in August than in July with the decline continuing into September. Bakers are reported to be booked well ahead, some as far as January and March, while family trade interest, lacking so far this year, has just begun to appear. Flour production reported by the orthwestern Miller: Change from Aug. 1937 Atchison ---------------------------- 130,000 Kansas City ---------------------- 578,000 Salina ---------------------------------- 188,000 Wichita ------------------------------ 190,000 Other cities ________________________ 1,115,000 July.1937 Aug. 193G ( In barrels) -5,000 -3,000 -72,000 +49,000 -23,000 -47,000 -33,000 -46,000 -53,000 +13,000 Southwest __________________________ 2,201,000 -221,000 + 1,000 United States':' ________ 5,500,000 +17,000 -688,000 ,:,Represents about 60 per cent of total output in U. S. Petroleum Output of crude petroleum in this District continued in August at the high level of the two preceding months but state allowables have been reduced materially for September in an effort to adjust supply to demand when refinery operations decline seasonally. The current high rate of output is illustrated by an August production 17 per cent above a year ago and 32 per cent above the average of the past ten years. Oil production reported by the American Petroleum Institute and the Bureau of Mines: August 1937 Gross D. Av. Colo. ______ 160 Kans. ______ 6,153 N. Mex. __ 3,536 Okla. ______ 20,105 Wyo. ______ 1,806 5 States._ 31,760 u. s. ---·-· 114,990 --zrn 5.1 198.5 114.1 648.6 58.2 1,024.5 3,709.4 July 1937 August 1936 Gross D. Av. Gross D. Av. thousands ~ r e l ~ · 5.0 128 4.1 155 6,427 207.3 5,231 168.8 75.2 3,426 110.5 2,331 20,089 648.1 18,178 586.4 1,619 52.2 1,248 40.3 31,688 110,721 1,022.2 3,571.6 27,143 95,090 875.7 3,067.4 In contrast with last year when production reached a high point in December, accompanied by steady withdrawals from storage, production this year, having caught up with demand, has generally been in excess of needs and has been accompanied by accumulating storage stocks. Coal Output of bituminous coal increased seasonally in August. Production in August was only slightly larger than a year ago but for the first eight months of the year is better than 6 per cent larger. Coal output estimated from reports of the National Bituminous Coal Commission: Aug.1937 Colorado ···---··-·-·-·---··-··-·-· Kansas and Missouri.. ___ _ New Mexico ··-·-·····--·--·--·0 klahoma -----------------··-··-Wyoming _______________________ _ 397,000 432,000 126,000 169,000 401,000 Change from July 1937 Aug. 1936 (In tons) -3,000 +62,000 -22,000 + 76,000 -14,000 + 15,000 +81,000 +28,000 +83,000 +9,000 Six states --------------·-··--··---- 1,525,000 +288,000 United States __________________ 33,665,000 +1,753,000 +27,000 +579,000 7 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead Zinc ore shipments from the Tri-State district slackened in August but lead shipments increased and deliveries of both concentrates were substantially larger than in August last year. Output continues at a good rate. Shipments estimated from Joplin News Herald reports: ZINC ORE LEAD ORE Tons Kansas ___________ ___ 15,134 Missouri __________ 3,035 Oklahoma ____ _ 22,093 Value $ 647,843 130,114 945,404 Tons 1,432 390 3,167 Value $ 106,608 28,857 229,980 Aug. 1937 ________ 40,262 July 1937 ________ 42,510 Aug. 1936 ____ ___ 30,210 8 Mos. 1937 ______ 321,419 8 Mos. 1936 ______ 276,649 $ 1,723,361 1,760,476 936,510 13,296,243 8,786,868 4,989 3,938 2,909 42,152 33,888 $ 365,445 268,800 145,41fi 3,090,838 1,673,458 In the second week of August zinc advanced $2.00 and lead $7.50 per ton. Zinc at $47.50 and lead at $77.50 are now $16.00 and $27.50, respectively, higher than a year ago. Larger shipments, together with higher prices, give a combined shipment value for the first eight months of this year about 57 per cent above that in the same period last year. Employment and Pay Rolls Employment showed virtually no change in the District from the middle of July to the middle of August while pay rolls increased slightly further. Employment was about 5 and pay rolls 10 per cent larger than in August of last year. Preliminary figures of the Department of Labor: August 1937 per cent change from July 1937 Employment Pay Rolls Colorado ------------------------------------------------------ + 1.1 + 4. 7 Kansas -------------------------------------------------------- + 1.4 + 1.5 Missouri _____________________ --------------------------------- -0.2 + 0.4 Nebraska ---------------------------------------------------- - 1.7 -0.1 New Mexico ---------------------------------------------- -0.2 -0.6 Oklahoma ----------------------------------------------------- + 0.2 + 1.6 Wyoming ---------------------------------------------------- + 2.2 + 13.3 The value of building permits issued in eighteen cities of the District was sharply lower in August than in either the preceding month or the same month last year. As a result, building activity so far this year is now only about 13 per cent above 1936. Building permits issued by eighteen cities: PERMITS 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. ______________ ESTIMATED COST 1937 1936 1()1 85 $ 59 63 50 49 503 575 115 85 19 20 44 36 138 188 158 141 191 173 128 147 39 58 16 18 13 9 25 41 88 85 93 94 219 188 August -------------------------- 2,011 2,038 July ___________ ____________________ 2,067 1,850 Eight months --------·----- 16,054 13,995 1937 147,000 70,000 38,000 584,000 48,000 30,000 37,000 159,000 113,000 408,000 177,000 70,000 12,000 10,000 14,000 137,000 212,000 207,000 $ 2,473,000 3,987,000 30,011,000 $ 1936 198,000 60,000 61,000 1,893,000 62,000 17,000 26,000 233,000 69,000 1,043,000 227,000 17,000 27,000 15,000 29,000 135,000 118,000 181,000 $ 4,411,000 3,867,000 26,619,000 Lumber Retail lumber sales, which in recent months had begun to show some improvement over last year, fell nearly 10 per cent below the level of a year ago during August. However, total sales for the first eight months of this year are approximately the same as in the corresponding period last year. Credit conditions continue somewhat less favorable. The August collection ratio was 32.2 per cent as compared with 41.5 per cent last year. Lumber trade at 155 retail yards in the District: August 1937 per cent change from July 1937 Aug. 1936 Sales of lumber, board feet_______________________ -12.1 -9.8 Sales of all materials, dollars ____________________ -3.2 + 14.6 Stocks of lumber, board feet ______________________ -1.5 + 13.7 Outstandings, dollars ---------------------------------+4.8 +37.4 Building Life Insurance The value of building work contracted for declined in August. A wards, however, were substantially larger than in August of last year because of a greater volume of non-residential contracts. It is residential building that accounts for most of an increase of 12 per cent in building activity so far this year over the like period in 1936. Construction figures of the F. W. Dodge Corporation: TENTH DISTRICT 37 EASTERN STATES Sales of life insurance in the seven states of this District show little change in August or the first eight months of this year from sales in the corresponding periods of last year. The Life Insurance Sales Research Bureau report: Total Aug. 1937 ______ 9,313 July 1937 ______ 10,331 Au.e:. 1936 ___ 6,198 8 Mos. 1937 .___ 87,984 8 Mos. 1936 ___ 78,687 Residential Total Residential (In thousands of dollars) 2,333 285,104 73,448 2,528 321,603 81,046 2,213 275,281 100,523 25,261 2,101,452 671,101 17,874 1,799,919 507,511 Change from Aug. 1937 July 1937 Aug. 1936 (In thousands of dollars) 5,359 -466 -166 Colorado -----------------------------------Kansas _______________ ---------------------8,300 +352 +395 -3,414 + 163 Missouri ------------------------------------ 16,428 5,340 - 439 -464 Nebraska _______ --------------------------1,329 +307 +322 New Mexico -----------------------------Oklahoma _________________________________ _ 7,411 - 1,740 +73 1,336 -3 +259 Wyoming ---------------------------------Seven states ---------------------------- 45,503 United States __________________________ 546,067 - 5,403 -42,456 + 582 +10,707 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS 8 NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION PERCUIT PER ctNT 140 140 130 130 120 110 A. \ "" ,r\\ 100 \ 90 A /.\ \~ 80 I /V rv 110 PRODUCTION AND EMPLOYMENT too Volume of industrial production, as measured by the Board's seasonally adjusted index. was 117 per cent of the 1923-1925 average in August as compared with a level of 114 per cent in June and July and 118 per cent during the spring. Steel production rose slightly further and was close to the high level prevailing before strikes curtailed output in June. Automobile production was maintained in considerably larger volume than is usual in the month preceding the shift to new model production. Lumber output declined, following a period of increase. In the nondurable goods industries output increased in August, reflecting chiefly increases at cotton and woolen textile mills, following considerable declines in the preceding month. Activity at meat-packing establishments increased somewhat from an extremely low level. Shoe production showed less than the usual seasonal rise. At mines, output of coal increased less than seasonally, while crude petroleum production continued to expand. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, declined somewhat in August and the first half of September. Awards for private residential building showed little change and were in about the same volume as in the corresponding period of 1936, while publicly-financed residential building declined and was in considerably smaller volume than last year. Factory employment, which had increased in July, showed Tess than a seasonal rise in August. Factory pay rolls increased by about the usual seasonal amount. The number employed at steel mills increased somewhat further, while at automobile factories, railroad repair shops, and sawmills employment declined. In the textile industries employment in the production of fabrics decreased somewhat, while employment in the production of wearing apparel increased. Changes in employment in most other manufacturing industries were small. 80 10· \r ..,, ✓ 60 120 90 I\ V \. 10 /\ r )~ 60 50 50 1929 1930 1931 1932 1933 1934 1935 1936 1937 Index of physical volume of production, adjusted for seasonal variation, 1928-1925 average 100. By months, January 1929 through August 1987. = FACTORY .EMPLOYMENT AND PAYROLLS 70 1-----+-~-\-""""""- - + -l--+-::-----+A...'-+---+-----l 70 60 l----l----'--+--"4---><-4-'-- - - ~--+--_,._------1 60 50l----l---+----1-1,--l--#-f----l---+--_,._------150 40 1----l---+---+--"'-_ _ _ __ __ __,._------140 _ ~.___. 1929 _.__ 1930 _ _._ 1931 _ _.__..___._........_....___.~ 1932 1933 1934 1935 19341 In August industrial activity advanced from the level of the two preceding months and on a seasonally adjusted basis was close to the volume of last spring. Early reports for September indicate a decline in steel output and a seasonal decrease in the production of automobiles. 1937 Indexes of number employed and pay rolls, without adjustment for seasonal variation, 1928-1925 averqe 100. By months, January 1929 through August 1987. Indexes compiled by the United States Bureau of Labor Statistics. = AGRICULTURE Department of Agriculture crop estimates based on September 1 conditions were about the same as the estimates a month earlier, except for an increase in cotton and a decrease in corn. Output of leading crops is substantially larger than last season. Supplies of live stock and meats are expected by the Department of Agriculture to continue smaller than last year. EXCESS RESERVES OF MEMBER BANKS DISTRIBUTION Mail order sales and sales at department stores showed somewhat less than the usual seasonal increase from July to August. Freight carloadings continued at the ·1evel of the previous month. COMMODITY PRICES 1933 1932 1934 1935 1936 Cotton prices declined considerably further from the middle of August to the third week of September and there were smaller decreases in cotton goods, silk, hides, steel scrap, copper scrap, and lumber. Prices of live stock and live stock products, after some decline in the latter part of August and the first week of September, advanced sharply in the middle of September. 1937 Wednesday figures of estimated excess reserves for all member banks and New York City, January 6, 1982, through September 22, 1987. BANK CREDIT MEMBER BANK RES?'VES ~D RELATED ITEMS 111.LtO.O#DO.L.w I IL l.lONSO/fDOLLAAS 12 8 ,./ II GoldS-J 10 _/ / ' i~ lf",_I cu-,q MONEY RATES 0 1934 Excess reserves of me.m ber· banks increased in the five-week period ending September 22 from $800,000,000 to $1,000,000,000 as the result of a release of gold by the Treasury from its inactive account. The bulk of the increase in excess reserves went to New York City banks and on September 22 these banks had excess reserves of $350,000,000, Chicago banks had $50,000,000, and banks elsewhere $600,000,000. Commercial loans at reporting member banks in 101 leading cities, reflecting in part seasonal demands, continued to increase substantially durlng the four weeks ending September 15, both in New York City and outside. Holdings of United States Government obligations and of other securities showed a further decrease, with the result that total loans and investments declin_ed somewhat. 1935 1936 1937 1934 1935 1936 1937 Wednesday figures. January 8, 1934, through September 22, 1987. Rates on 9-month Treasury bjlls declined from 0.71 per cent early in September to 0.44 per cent later -in the month, and average yields on longterm Treasury notes declined from about 1 ¾ per cent to below 1 ½ per cent.