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REVIEW MONTHLY Agricultural and Business Conditions TENTH FEDERAL RESERVE DISTRICT VoL. 24, No. 9 SEPTEMBER FEDERAL RESERVE BANK OF KANSAS CITY 30, 1939 Business in the Tenth Federal Reserve District AUGUST 1939 COMPARED WITH AUGUST 1938 Denver-• COLO. % INCREASE % DECREASE _________ li ___: 40 30 20 10 10 20 I I , _ _______ _ : KANSA : l<ANS. 'I --·-··-··--·--·-t!-l--■ -· BUSINESS INDICATORS 30 40 Financial _ 8 MOS. 1939 COMPARED WITH 8 MOS. 1938 % DECREASE % INCREASE 40 30 20 10 10 20 30 40 I Bank Debita_ ■ ■ F. R. Bk. Clearinp_ __Mem. Bk. Loans_ I _.. Mem. Bk. Invest._ ■ __Demnnd Deposita_ ■ ■ ■ _ Lf!e Ins. Sales_ Trade The impact of the war on agriculture and business is the outstanding development of recent weeks. Grain, livestock, and many other prices rose sharply but after the initial uprush they have tended to level off. In many cases stocks were low and forward buying is now reported. Grain and livestock marketings and livestock slaughter are much below a year ago. Hogs are the only exception. The expectation of higher prices had undoubtedly tended to restrict marketings. Both wholesale and retail trade in August were above last year but in the first half of September department store sales were down rather sharply. Probably the extreme heat helped to account for this. Dry weather also did great damage to late crops. Bank loans and deposits are higher but _in recent weeks banks have reduced their holdings of Government securities. Check transactions are unchanged from a year ago. _, I _ Wholesale Sales_. ■ _Retail Sales_ •• Mtrrketing, _ _ oata _ _ _ __cattle_ _ __ __Calves _ _ _ __Hogs _ _ _ __ Sheep _ _ .■ - • Production _ _Flour_ _ _ cattle Slaughter_ _Calf Slaughter_ _Jiog Slaughter__ ■- __Crude Petroleum._ I _ Bituminous CoaL _ Sheep Slaughter_ Zinc Ore Shipments I Lead Ore Shipments • _ Total Awards.__ ---·- -■ •I _ _Lumber Sales_ _ _ Corn _ _ ■ I ■ __ Dept. Store Salea_ _ __Wheat__ _ -,1 I Con,truction ·-····Ree. Awards_ -• -• I I I I ■ • I ■ 1. • ■ _ Value of Permita_ M i,cellaneou, ___ Rainfall _ _ Caah Farm Income• I I __ Employment_ I ____ Pay Rolls __ _ _ I I •For pre.lous month 2 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Member Bank Operations Commercial loans at reporting member banks in the Tenth District, which had declined somewhat at the end of July, resumed their rise in August and showed a substantial further increase in the first half of September. Investments declined sharply between the middle of August and the middle of September as banks sold Government bonds and, to a lesser extent, obligations guaranteed by the Government, the decrease being offset in part by purchases of Treasury bills and notes and other securities. Loans, which are at the highest level of the year, are about 16 per cent above a year ago, while investments are at the lowest level this year and are about 3 per cent smaller than at this time in 1938. Deposits at reporting member banks rose to new record levels in the first half of September and this increase, together with funds acquired from the sale of securities, was reflected in further increases in reserve balances carried at this bank and in. correspondent balances carried at other banks. Adjusted demand deposits are 4 and interbank deposits 14 per cent greater than a year ago. Principal items of condition of 51 member banks: 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. Govt. sec., direct & guar .. -. Total assets................................... F. R. notes in circulation............. Member bank reserve deposits... Change from Sept. 13 Aug. 16 Sept. 14 1939 1939 1938 ( In thousands of dollars) 372,269 -23,194 +53,181 289 -10 +75 16 Zero Zero 204 -1 -217 596 -22 +236 133,336 +12,626 +14,705 548,091 -8,743 +64,759 175,773 +2,249 +10,272 267,726 +7,711 +31,379 Dollar volume of check collections declined somewhat more than seasonally during August but remained 2 per cent above a year ago. So far in 1939, dollar volume is 5 per cent above 1938. Check collections through this bank and branches : ITEMS 1939 August .................. . July ..................... ·--· Eight months ....... . 5,907 6,068 47,515 1938 AMOUNT 1939 (In thousa:ncls) 5,862 $ 938,104 5,866 1,017,525 46,604 7,340,529 1938 $ 919,924 942,074 7,018,611 Bank Debits Debits to individual accounts by banks in reporting centers of the District declined somewhat more than Change from is usual during August. Debits in this District both Sept. 13 Aug. 16 Sept. 14 in August and in the first eight months of 1939 were 1939 1939 1938 (In thousands of dollars) only slightly above last year while for the whole Loans and investments-totaL ___ .__ 653,397 -10,926 +27,574 country debits were 8 per cent larger in August and Loans-total... ............................. _...... 280,814 +8,304 +37,702 Coml., indust., agric ......................... 169,139 +7,587 +21,565 show an increase of 4 per cent for the year to date. Open market paper.............. ·-·········· 18,742 -613 +1,741 Payments by check in thirty District cities: To security brokers and dealers..... 3,369 -988 -584 Other to purchase or carry secur... 9,995 Real estate loans.............................. 25,506 Loans to banks.................................. 404 All other loans.................................. 53,659 :Envestments-total... ......................... 372,583 U.S. Treasury bills.......................... 5,934 U.S. Treasury notes........................ 82,894 U. S. Govt. bonds.............................. 95,059 Oblig. guar. by U.S. Govt.............. 54,267 Other securities................................ 134,429 Reserve with F. R. Bank ....... -.......... 192,599 Balances with domestic banks ......... 335,223 Demand deposits-adjusted ............. 526,311 Time deposits ...................................... 143,584 U.S. Govt. deposits........................... 23,038 Interbank deposits ............................. 423,152 *Comparable figures not available. -96 +457 -4 +l,961 -19,230 +1,222 +1,478 -15,664 -6,803 +537 +11,065 +17,478 +7,236 +386 -110 +12,571 -2,199 +3,385 -215 +14,009 -10,128 * * * +5,316 +8,775 +24,529 +29,747 +21,100 -334 +5,830 +53,352 Reserve Bank Operations Note circulation of this bank continues to rise, reaching a new high level of 176¼ million dollars in the first week of September before the return flow of currency after the Labor Day holiday. Circulation of 175¾ million at the middle of September compares with 165½ million at this time last year. Coincident with an increase in the System's holdings of Government securities during the first half of September to maintain an orderly market, this bank's holdings of Government securities increased by about 12½ million dollars. Albuquerque, N. Mex....... . Atchison, Kans ................. . Bartlesville, Okla ............. . Casper, Wyo .................... -.. Cheyenne, Wyo ................. . Colorado Springs, Colo .... . Denver, Colo ...................... . Emporia, Kans .................. . Enid, Okla .......................... . Fremont, Nebr .................. . Grand Junction, Colo ........ Guthrie, Okla .................... . Hutchinson, Kans ............. . Independence, Kans ......... . Joplin, Mo .......................... . Kansas City, Kans ............ Kansas City, Mo ............... . Lawrence, Kans ................ . Lincoln, Nebr.................... . Muskogee, Okla ................ . Oklahoma City, Okla ....... . Okmulgee, Okla ................ . Omaha, Nebr ..................... . Pittsburg, Kans ................ . Pueblo, Colo ...................... . Salina, Kans ....................... St. Joseph, Mo .................... Topeka, Kans .................... . Tulsa, Okla ........................ . Wichita, Kans ................... . Change from Aug. 1939 July 1939 Aug. 1938 ( In thousands of dollars) 14,932 -323 +965 2,796 -796 -240 30,227 -580 +3,345 5,325 -512 -337 8,701 +382 +309 14,327 -370 +339 161,520 +5,800 +4,023 2,651 -654 -226 12,646 -3,252 +1,231 2,557 -84 +20 3,906 +296 +783 1,308 -290 -327 10,944 -4,174 -267 2,545 -448 +122 9,555 +31 +863 16,409 -2,840 + 1,129 299,437 -65,269 +3,526 3,411 -486 +358 27,778 -1,482 +1,897 6,992 -529 + 484 90,920 -13,989 -13,714 2,287 -259 +213 146,584 -947 +6,860 3,267 -255 -182 14,738 -524 +1,817 7,263 -3,832 -3,232 25,796 -3,908 + 1,327 19,180 -3,901 + 1,488 128,929 +2,606 +781 44,936 -6,892 +3,213 District, 30 cities............... United States, 141 cities.. 1,121,867 30,613,184 -97,481 +15,568 +136,447 +2,343,011 FEDERAL RESERVE BANK OF KANSAS CITY Wholesale sales and stocks reported by the Department of Commerce for this District: Trade RETAIL SALES Dollar volume of sales at reporting department stores in the District increased by more than the usual seasonal amount from July to August. Sales for August were 7 per cent above a year ago but toward the end of the month and in the first half of September sales dropped considerably under last year, owing in part to unseasonably warm temperatures. Total sales so far this year show little change from the corresponding period of 1938. Stocks of merchandise increased by about the usual amount during August and continue slightly under a year ago. Collections on open accounts averaged 42.8 per cent in August as compared with 42.9 per cent last year, while installment collections averaged 15.3 and 15.1 per cent, respectively. Department store sales and stocks in leading cities: SALES STOCKS Aug.'39 8 Mos.'39 Aug. 31, '39 No. of comp.to comp. to comp. to Stores Aug.'38 8 Mos.'38 July 31,'39 Aug. 31,'38 (Per cent increase or decrease) Denver............... 4 +9.4 +1.8 +7.2 -5.7 Kansas City...... 5 +8.6 +2.6 +6.7 -4.5 Oklahoma City.. 3 +4.6 +4.8 +16.1 +1.5 Omaha............... 3 +5.1 -0.2 + 17.7 +0.1 Tulsa.................. 4 +6.5 -0.1 +13.1 +8.6 Wichita .............. 3 +4.5 +0.1 Other cities....... 19 +5.3 -0.4 +14.9 -0.9 District.............. 41 +7.1 +1.5 +11.4 -2.3 Total retail sales in the District in August were 5 and in the first eight months of the year 4 per cent larger than in the corresponding periods last year. Sales of independent retail stores reported by the Department of Commerce: Aug. 1939 per cent chang·e from Aug. 1938 Colo. Kans. Mo. Nebr. N.Mex. Okla. Wyo. Apparel... ........ +2.8 +7.1 +9.3 +4.3 +0.1 - 0.4 -3.3 Automobile ..... +14.3 -3.5 +23.8 +8.0 -3.4 -7.7 +27.7 Country genl..-13.2 -4.8 Zero -8.5 -0.1 -10.4 +3.8 Department.... +8.6 + 7.6 +10.7 +4.0 -8.7 +2.2 +2.6 Drug................ -3.8 -5.9 +1.8 -2.8 +0.5 -1.4 -11.8 Food............... _ -2.8 -3.5 -4.8 -5.5 -4.9 -5.9 -3.9 Furniture........ +5.1 -7.8 +8.3 -5.9 -5.8 - 10.6 +29.3 Hardware ........ -13.2 -6.6 +3.6 -4.7 .... +4.8 Lbr. & mtls ...... +4.2 -0.5 +26.0 +2.4 +4.8 +2.4 -2.4 Total... ............. +2.1 -1.3 +10.6 +0.1 3 +1.1 -1.7 +2.9 WHOLESALE- SALES The value of August wholesale sales in the District was 2 per cent above a year ago and total sales for the year to date remain at about the same level as last year. Of the principal lines, August sales of dry goods and hardware were little changed from last year while sales of drugs were 5 and groceries 16 per cent lower and furniture 33 per cent larger. Wholesale inventories are about 5 per cent smaller than a year ago. Collections in August averaged· 65.4 per ·cent of receivables against 70.5 per cent in August last year. SALES STOCKS Aug.'39 8 Mos.'39 Aug. 31, '39 o. of comp.to comp. to comp. to ~ Aug.'38 8 Mos.'38 July 31,'39 Aug. 31,'38 ( Per cent increase or decrease) Auto. supplies... 8 +2.4 +2.0 Drugs .................. 10 -4.8 -1.1 +3.1 +oA Dry goods........... 6 -0.6 -2.8 -14.8 +4.1 Electrical goods 11 +17.9 +12.9 -7.0 +4.1 Farm products.. 12 -2.0 +1.4 -7.7 Furniture........... 4 +32.9 +7.4 Groceries ............ 37 -15.5 -4.2 +4.2 -5.8 Hdwre.-total... (16) -1.8 -0.4 +4.3 +1.8 General............. 6 -0.5 +1.2 +2.6 +0.1 Industrial......... 5 -13.1 -0 .2 +8.o +9.0 Plbg. & htg....... 5 +9.9 +4.6 Machinery.......... 4 +16.4 Paper & prod..... 4 -6.4 Tobacco & prod. 6 -3.6 -3.5 All other lines ... 21 -6.6 -3.6 +4.3 +1.2 Total... ................ 139 +2.0 Zero +2.8 -4.6 Crops Rains and more moderate temperatures during the forepart of August had resulted in an appreciable improvement in prospects for many late crops in the District, particularly in sections of southeastern Nebraska, eastern Kansas, and central and western Oklahoma. But very hot and dry weather late in August and in the first half of September has burned late corn, grain sorghums, and cotton badly and has caused extensive damage in addition to that which had already occurred in July. Corn production in this District is very short for the sixth consecutive year, in contrast with another large crop in the central and eastern Corn Belt. Department of Agriculture corn estimates: Sept.1 Aug .1 Final 1939 1939 1938 (In thousands of bushels) 5,656 5,656 11,319 32,487 24,752 45,200 114,520 108,385 106,500 76,388 72,750 107,735 2,916 2,160 2,606 30,178 29,205 35,080 1,808 1,808 2,880 -- Colorado............... . Kansas ................... Missouri... .............. Nebraska .............. . New Mexico ......... . Oklahoma............. . Wyoming.............. . Seven states.......... United States........ 263,953 2,523,092 244,716 2,459,888 311,320 2,542,238 Aver. '28-'37 15,771 80,736 113,655 159,176 2,928 35,912 2,071 410,249 2,309,674 The dry weather by the first of September had practically halted seed bed preparations for winter wheat which had been resumed following early August rains. Nearly all the ground has been prepared for seeding in Kansas and Nebraska and some wheat has been sown in southwestern Kansas for fall pasture but in general the soil is much too dry for seeding. Soil moisture at the middle of September was badly depleted from Oklahoma northward through Nebraska. . August rainfall was very unevenly distributed, with rather wide variations in relatively small areas. For the states as a whole, Kansas had 111 and Missouri 123 4 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS per cent of normal rainfall for the month, while in Oklahoma it was 88, in Nebraska and New Mexico 74, in Wyoming 70, and in Colorado only 54 per cent of normal. Rainfall COLORADO Denver................................ Leadville............................ Pueblo................................ Garnett............................... Steamboat Springs........... Aug.1939 8 Mos.1939 Total Normal Total Normal ~inchesr.43 1.43 5.94 10.73 1.15 2.44 10.66 13.97 .68 1.82 7.60 9.40 .95 1.27 4.07 5.11 .31 1.77 13.05 15.84 KANSAS Topeka ............................... 3.51 Iola..................................... 3.10 Concordia........................... 4.37 Salina................................. 4.48 Wichita.............................. 5.84 Hays ................................... 3.53 Goodland............................ 1.52 Dodge City........................ 2.09 Elkhart.............................. Trace 4.08 3.64 2.91 3.40 3.13 3.14 2.52 2.67 2.15 18.94 22.09 17.67 15.54 25.44 14.44 15.13 10.95 7.74 24.81 26.55 20.36 20.35 22.04 18.24 14.49 16.01 12.73 2.40 4.64 4.99 3.83 4.09 3.97 21.85 30.10 32.11 25.88 26.47 31.69 2.03 2.61 3.77 1.38 1.25 1.17 1.07 2.19 3.05 3.57 3.43 3.52 2.57 2.39 1.71 2.17 16.73 17.08 15.01 15.94 13.48 10.53 11.65 15.26 20.39 21.05 21.49 20.19 15.45 14.93 12.83 15.33 1.37 .94 1.47 2.24 2.28 1.22 8.97 8.41 4.18 12.60 10.22 6.12 1.18 2.47 5.52 2.70 1.80 1.87 .82 3.21 3.54 2.89 2.72 2.17 3.48 2.68 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................................ 22.76 27.35 25.97 30.09 23.28 21.87 19.83 24.13 17.63 19.36 22.35 21.88 18.69 18.31 The lower range of cash prices at Kansas City: No. 1 hd., dk. wheat, bu..... No. 2 mixed corn, bu.......... No. 2 white oats, bu........... No. 2 rye, bu........................ No. 2 barley, bu.................. No. 2 white kafir, cwt....... Sept. 23 Aug. 31 July 31 Aug. 31 1939 1939 1939 1938 $ .86 $ .67 $ .66 ½ $ .63 ¾ .54 1A~ .45 ½ .44 .49 ½ .35 .30¾ .28½ .24 .55 .44 .43 ½ .40 .51 .42 .39½ .39 1.15 1.04 1.06 .80 Wheat marketings declined much more than is usual during August as growers and country elevators tended to hold wheat either for higher prices or for storage under Government loans at rates then well above the market. Wheat receipts were little more than a third of what they were in August a year ago and were less than a third of normal. Corn marketings in August were little more than a fourth of normal. Sharply higher prices in September, however, have loosened country holdings of these grains somewhat and farmers tend to redeem corn loans. August grain receipts at five District markets: Corn (In bushels) Oats 384,000 269,000 238,000 184,000 396,000 352,000 5,000 7,483,000 891,000 61,828,000 1,220,000 20,530,000 - 1,206,000 141,052,000 12,074,000 141,766,000 16,558,000 937,000 1,165,000 2,394,000 7,237,000 7,853,000 Wheat Hutchinson......................... . Kansas City....................... . On1aha................................ . St. Joseph........................... . Wichita............................... . Aug.1939 ........................... . July 1939............................ . Aug.1938........................... . 8 Mos.1939 ......................... . 8 Mos.1938 ........................ . 825,000 3,093,000 2,037,000 378,000 1,150,000 Livestock MARKETINGS Marketings of cattle, calves, and sheep increased and hog marketings declined seasonally in August. Receipts of calves were little changed from August a Enid.................................. year ago, but receipts of cattle and sheep were about 6 Woodward.. WYOMING per cent less while hog receipts continued substantialCheyenne........................... .43 1.55 8.65 11.76 ly above last year. Marketings of cattle were 22, Casper................................ .33 .96 5.85 10.81 Lander................................ .20 .53 6.93 9.07 calves 26, and hogs 32 per cent below the ten year averSheridan............................ 2.22 .91 14.94 11.45 age while sheep exceeded the average by 6 per cent. A holding tendency was evident at times in marketGrain Marketing ings of cattle, calves, and hogs. Following the outbreak of war in Europe, cash August livestock receipts at six District markets: wheat prices in the first week of September advanced Sheep Calves Hogs Cattle the limit of 5 cents on four successive trading days 24,632 379,853 39,542 5,619 Denver......................... before the legal limit on daily fluctuations was doubled Kansas City................ 137,184 26,975 123,800 79,022 42,511 14,077 in order to break the deadlock in the market resulting Oklahoma City........... 40,560 19,631 '115,042 10,118 212,617 ......................... 112,509 from a lack of offerings. In this period wheat prices Omaha 4,686 68,997 31,809 57,917 St.Joseph.................... 3(),993 16,78() 7,343 rose from virtually a seven-year low to the highest Wichita........................ 23,685 point in more than a year while corn prices advanced Aug.1939 .................... 385,289 74,372 · 394,895 771,346 from a six-year low to the highest level in nearly two July 1939..................... 321,623 69,233 423,113 569,565 75,033 301,137 828,560 .................... 411,008 years. Wheat prices are now considerably above the 8Aug.1938 Mos.1939 ................. 2,350,310 446,091 3,287,198 4,539,369 Government loan rate and remain close to the level 8 Mos. 1938................. 2,4~1,919 459,373 2,5_71,039 4,762,7~1 . PRICE8: . established in the first week of September but corn Livestock p_rices .gei:i~r~lly continued to decline up prices have since declined and are again below the.loan. to late August~ then recovered strongly toward the rate. FEDERAL RESERVE BANK OF KA~SAS CITY end of the month, owing in part to seasonal influ.ences, and rose sharply in the first week of September when war hysteria and meager receipts caused a spectacular advance that carried cattle and lamb prices to their highest level since last spring and hog prices to the highest point in almost a year. Coinciding with the upturn in livestock values was a substantial rise in wholesale dressed meat prices and in prices of livestock by-products, notably hides and wool. Beef steer prices advanced fully $1.90 a hundredweight, slaughter lambs $2.25, and hogs $3.25 from August lows and the buying rush extended to stocker and feeder animals as well, although here the gains were less pronounced. At the peak of the rise, beef steers and hogs were back to the level of a year ago and lamb prices were substantially above last year. After the first week of September, prices lost part of their upturn as buying pressure eased and marketings increased to more nearly normal proportions for the season. Top livestock prices at the Kansas City market: Sept. 23 Aug. July Aug. Aug. Aug. 1939 1939 1939 1938 1937 1936 - - (In dollars per hundredweight)-Beef steers........... . 11.00 10.35 10.25 12.35 17.00 9.50 Stocker cattle....... 10.25 9.50 10.00 9.00 10.00 7.25 Feeder cattle......... 9.75 8.65 9.00 10.75 12.40 8.25 Calves.................... 10.00 9.50 10.00 9.50 10.00 7.50 Hogs ...................... . 7.75 6.55 7.05 9.90 13.20 11.55 Sheep.................... . 7.00 7.00 7.75 7.00 8.50 7.75 Lambs ................... . 9.25 9.15 10.10 8.75 11.00 10.25 STOCKERS AND FEEDERS Shipments of stocker and feeder livestock from markets back to the country increased seasonally during August as market supplies increased and rose further in the first week of September when Corn Belt farmers rushed into the market for replacement stock, influenced by abundant feed supplies on hand and the sharply higher prices obtainable for fat livestock after the outbreak of war in Europe. August shipments were markedly above a year ago and generally were quite heavy, the movement of cattle being 7, calves 56, and sheep 23 per cent above the August ten-year average while that of hogs remained at a level about half of normal. August stocker-feeder shipments: Denver......................... Kansas City............... . Omaha........................ . St. Joseph .................... Aug.1939 ................... . July 1939..................... Aug.1938 ................... . 8 Mos.1939 ................ . 8 Mos.1938 ................ . Cattle 16,958 68,137 37,399 6,432 Calves 1,282 14,555 4,840 1,147 128,926 21,824 58,113 16,300 113,022 · 11,563 564,398 119,482 526,855 65,348 Hogs 1,996 1,253 1,027 Sheep 88,511 19,062 95,270 21,502 4,377 4,260 3,710 33,943 30,859 224,345 79,849 167,702 626,959 478,051" 101 RANGES AND PASTURES Following a rather marked decline in condition-in July, ranges and. pastures in the District held .their own in August but again were deteriorating badly 5 early in September because of very hot and dry weather. HowevE:lr, ~attle and sheep continue in good condition and ranges are about equal to average except in Colorado and Wyoming. In these two states, winter range prospects are poor, there is little demand for breeding and feeding _stock, and indications are for heavy marketings of livestock this fall. Contracting offeeder ca_ttle and 13:mbs for fall delivery was slow during August but expanded· early in September, when fat livestock prices advanced sharply, and shipments from the range areas have already begun from two to four weeks ahea~ of the usual .delivery date. Range and pasture conditions reported by the Department of Agriculture: RANGES PASTURES Sept. 1 Sept. l Aver. Sept. 1 Sept. 1 Aver. 1939 1938 '29-'38 1939 1938 '28-'37 (In percentages of 100 as normal) - Colorado......... 64 85 79 45 71 64 Kansas............ 64 69 65 63 70 52 Missouri... ....... 86 67 55 Nebraska........ 77 84 78 45 57 55 New Mexico... 82 82 81 72 61 69 Oklahoma....... 74 80 65 59 66 48 Wyoming......... 68 82 77 57 75 70 Farm Income Cash farm income in the District in July fell 13 per cent under a year ago, reflecting principally smaller receipts from the sale of ·crops although Government conservation and parity payments and receipts from the sale of livestock also were smaller than in July of last year. The decrease in income from crops, which measured 23 per cent, resulted mainly from smaller marketings of wheat and cotton, together with somewhat lower wheat prices than those in July a year ago. Income from meat animals and wool generally was above last year but these increases were more than offset by smaller returns from eggs and dairy products so that income from livestock was 3 per cent lower. Department of Agriculture farm income estimates: July July 7 Mos. 7 Mos. 1939 1938 1939 1938 (In thousands ofdoilars) Colorado...................... 7,257 9,616 54,487 53,747 35,489 41,974 150,653 151,144 Kansas ........ ~ ................ Missouri ..................... . 23,016 27,296 129,076 130,946 Nebraska .................... 18,137 19,167 130,615 113,076 New Mexico................ 2,72'.7 1,747 15,850 14,655 91,760 93,874 Oklahoma.... a•• ~ •• -~. : •••••• . . 2.0;152 · 24,098 Wyoming.................... . 2,864 . 2,640 17,677 15,648 Seven states.~... :.... :.. :. United States............. .109,642 .126,538 · ·590,118 570,000 643,000 3,951,000 673,090 3,984,000 Cash.farm income in the District so far in 1939 still shows an inc:r~ase ·of ·3 per cent over 1938 owing to substantially heavier.Governme_n t payments in earlier months this _year,.~OinEl .-inGrease in. returns. from -livestock, and the Iarge:.volume of commodity credit loans on corn in Nebraska. . · 6 REVIEW OF AGRICULTURAL AND BUSINESS CONDITIONS Flour output reported by the Northwestern Miller: Meat Packing A heavy country demand for stocker and feeder livestock in August greatly curtailed the proportion of market supplies available for immediate slaughter. Packers' purchases of cattle, calves, and sheep were little changed from _the preceding month despite increased marketings and were considerably under purchases in August a year ago. Hog slaughter continues much above last year. The slaughter of cattle was 22, calves 43, hogs 26, and sheep 18 per cent below the August ten-year average. August packers' purchases at six District markets: Denver ....................... Kansas City.............. Oklahoma City......... Omaha....................... St. Joseph .................. Wichita ...................... Aug.1939 .................. July 1939................... Aug.1938 .................. 8 Mos.1939 ................ 8 Mos.1938 ............... Calves 3,491 9,833 11,883 5,105 3,440 3,848 Hogs 21,506 116,412 28,709 90,812 48,463 28,611 187,869 37,600 181,815 37,607 208,399 51,914 1,310,315 261,319 1,377,822 3241385 334,513 3'11,389 275,911 2,869,912 2,275,117 Cattle 16,739 57,777 16-,174 63,040 22,907 11,232 Aug.1939 Kansas City.................... . Salina................................ Wichita ............................ . Other cities ..................... . 652,000 209,000 190,000 1,155,000 Change from July 1939 Aug. 1938 ( In barrels) -6,000 +51,000 -16,000 -17,000 +6,000 +52,000 +113,000 +35,000 Southwest........................ 2,206,000 +154,000 +64,000 United States*................ 6,092,000 +425,000 -21,000 ~" Represents about 60 per cent of total output in United States. Petroleum Daily average crude oil production in the District in August dropped about 30 per cent under the level Sheep that had prevailed during the five preceding months 43,577 58,652 as a result of the shutdown of wells in Kansas, Okla7,345 homa, and New Mexico on August 16 for the balance 101,485 47,545 of the month. August output was also 30 per cent 9,446 under a year ago and the ten-year average. Oil production reported by the American Petroleum 268,050 273,162 Institute and the Bureau of Mines: 313,277 2,452,609 2,52'5,093 Cold Storage Holdings Colo.................. Kans................. N. Mex............. Aug. 1939 July 1939 Aug. 1938 Gross D. Av. Gross D. Av. Gross D. Av. ------ -(In thousands of barrels) 123 4.0 126 4.1 128 4.2 *3,927 *126.7 5,488 177.0 5,190 167.4 1,936 62.5 3,363 108.5 2,974 96.0 *9 370 *302.2 13,960 450.3 14,616 471.5 1:992 64.2 1,920 61.9 1,814 58.5 In comparison with usual seasonal changes, United Okla................. States cold storage stocks of most commodities con- Wyo.................. tinued to decline rather sharply in August. September States........... 17,348 559.6 24,857 801.8 24,722 797.6 1 holdings of lard and cheese were little different from 5U.S.................. 85,013 2,742.4 110,937 3,578.6 106,165 3,424.7 the average for that date during the past five years, *Includes oil run to pipe lines after the shutdown. which includes the drought period, but stocks of beef Stocks of crude petroleum, which already were at a were 39, pork 9, and shell eggs IO per cent below while low level, were drawn upon heavily during the last half stocks of lamb were 22, poultry 20, frozen eggs 10, and of August and there were also heavy withdrawals from butter 19 per cent above the average. stocks of gasoline because of the restriction placed on United States cold storage holdings: refinery operations by inadequate crude supplies. Sept. 1 Aug.1 Sept. 1 Aver. Gasoline prices have improved and crude oil price 1939 l'.939 1938 '34-'38 _ _(.I n thousands of units)-- schedules were restored on September 1 to the level Beef, lbs................................. 33,147 33,456 34,467 54,134 prior to the cut of 20 cents a barrel on August 10, with Pork, lbs ................................. 361,626 454,766 334,777 398,095 trade reports indicating that less crude is now being Lamb and mutton, lbs.......... 2,390 1,893 1,861 1,952 Poultry, lbs............................ 63,789 64,918 54,941 53,024 sold below the posted price than formerly. Miscellaneous meats, lbs..... 66,470 69,013 Lard, lbs................................. 112,145 139,815 Eggs, shell, cases........... _.... 6,596 7,024 Eggs, frozen (case equiv.).. 3,883 4,125 Butter, creamery, lbs ........... 173,093 165,183 Cheese, all varieties, lbs ...... 124,885 117,598 60,167 64,662 116,620 113,193 5,942 7,330 3,572 3,534 201 1252 1451113 150,248 121,757 Flour Milling Activity at southwestern flour mills rose seasonally in August and output for the month was 3 per cent larger than a year ago and the ten-year average. Production for the year to date is little changed from last year. Flour sales, following one. of the lightest Augusts of record, increased to 135 per cent of capacity in the first week of September when wheat prices advanced sharply and flour prices rose as much as $1 a barrel. Flour production also expanded sharply early in September, reaching a record level at that time. Coal Bituminous coal production in the District increased seasonally during August. Output was 3 per cent less than in August a year ago but production for the year to date is 2 per cent larger than last year. Coal output estimated from reports of the National Bituminous Coal Commission: Aug. 1939 Colqrado........................... . Kansas and Missouri.. ... . N~w Mexico ..................... . Oklahoma.. (. .................... . Wyoming.......................... · 395,000 420,000 95,000 151,000 430,000 Six s.t ates ................ "··-···.. 1,491,000 United States ................... 34,470,000 Change from July 1939 Aug.1938 (In tons) +132,000 , +71,000 -111,000 +109,000 -9,000 +8,000 +116,000 +11,000 Zero +84,000 +449,000 +5,335,000 -38,000 +5,805,000 FEDERAL RESERVE BANK OF KANSAS CITY Zinc and Lead Production and shipments of zinc and lead ore from the Tri-State district increased during August. Output of both zinc and lead continues much above a year ago but August shipments of zinc were 25 per cent smaller and lead little changed from last year. Stocks of orC\ are at a rather low level and producers were reluctant to dispose of ore until prices advanced sharply in the first half of September to their highest level in about two years. Shipments subsequently have shown large gains. August ore shipments from the Tri-State district: ZINC ORE LEAD ORE Tons Value 9,902 $ 310,086 2,568 80,398 19,786 619,737 Tons Value 1,282 $ 73,502 381 21,770 2,385 137,117 Aug. 1939..... ...... ........... . 32,256 $1,010,221 July 1939... ..... ................ 28,589 858,762 Aug. 1938....................... 43,001 1,193,310 8 Mos. 1939.................... 257,347 7,675,094 8 Mos. 1938.................... 241,441 6,588,544 4,048 $ 232,389 3,849 213,399 4,210 226,214 40,188 2,185,469 33,931 1,687,011 Kansas ........ ................... . Missouri. ....................... . Oklahoma ...................... . Employment and Pay Rolls Industrial employment and pay rolls increased from the middle of July to the middle of August in nearly all states of the District. Employment is about 1 and pay rolls 2 per cent above a year ago. Preliminary figures of the Department of Labor: 7 The value of building permits issued in reporting District cities decreased further during August but remained 14 per cent above that for the same month a year ago. Value of permits for the year to date shows an increase of 47 per cent over last year. August building permits in eighteen District 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................ 1939 88 50 56 904 71 25 48 175 255 172 163 61 15 25 29 83 170 285 1938 67 58 40 567 83 20 49 143 203 208 169 63 20 17 13 90 181 279 August............................ 2,675 2,270 July................................. 2,347 1,941 Eight months ................. 17,471 15,640 ESTIMATED COST 1939 $ 219,000 $ 92,000 41,000 1,027,000 32,000 47,000 37,000 168,000 161,000 329,000 270,000 83,000 20,000 35,000 36,000 96,000 382,000 241,000 1938 127,000 79,000 18,000 647,000 36,000 28,000 63,000 176,000 262,000 506,000 196,000 38,000 39,000 9,000 13,000 132,000 349,000 199,000 $ 3,316,000 $ 2,917,000 3,811,000 2,817,000 32,762,000 22,353,000 Lumber Board feet lumber sales at reporting retail yards in the District increased further during August but remained at a level 3 per cent under a year ago, narrowAugust 1939 per cent change from ing the increase for 1939 to date to only 4 per cent July 1939 over 1938. Dollar sales of all materials in August Employment Pay Rolls were 8 per cent above last year. Colorado..................................................... +o.5 +3.9 Lumber stocks declined as is usual during August Kansas........................................................ +O.l - 0.8 Missouri...................................................... - 2.4 - 1.8 and continue 6 per cent under a year ago. Collections Nebraska.................................................... +1.5 +1.6 in August averaged 32.3 per cent as compared with New Mexico................................................ +1.4 +5.5 Oklahoma................................................... +0.4 +o.9 33.7 per cent in July and 32.0 per cent in August, 1938. Wyoming.................................................... +1.6 +11.1 Lumber trade at 153 retail yards in the District: Seven states ............................................... - 0.8 +0.1 Building Value of construction awards declined during Au- gust in the Kansas City area (Nebraska, Kansas, Oklahoma, and western half of Missouri) and was 8 per cent less than a year ago, owing largely to substantially smaller awards for commercial, public, and other types of nonresidential building. Total awards so far this year, however, still show an increase of 6 per cent over last year. In the first half of September, awards were more than half again larger than a year ago. Construction figures of F. W. Dodge Corporation: Life Insurance Life insurance sales in the District in August were 5 per cent smaller but in the first eight months of the year 4 per cent larger than a year ago. The Life Insurance Sales Research Bureau report: Aug. 8 Mos. 8 Mos. 1939 1938 1938 thousands of dollars) 3,345 27,348 20,419 4,182 24,439 24,360 1,619 16,767 23,145 1,122 14,117 10,136 Colorado.................................... Kansas ..................................... . Missouri. .................................. . Nebraska .................................. New Mexico ............................ . Oklahoma................................. Wyoming .................................. Kansas City area............... 9,435 10,268 82,671 78,060 37 Eastern states............... 312,328 313,141 2,311,575 1,847,212 Seven states............................. United States........................... Residential building ......... . Nonresidential building ... . Public wor ks constr ucti on Utility construction.......... Aug. 1939 (In 2,711 2,035 3,188 1,501 Sales of lumber, board feet................. ...... Sales of all materials, dollars.................. Stocks of lumber, board feet.................... Outstandings, dollars................................... Aug.1939 per cent change from July 1939 Aug . 1938 +8.5 - 3.0 + 7 .5 + 7. 7 - 1.9 - 6.4 +2.6 - 2.0 Change from Aug. 1939 July 1939 Aug . 1938 ( In thousands of dollars) 4,879 +769 + 99 5,869 -348 - 1,110 15,684 +598 + 33 5,361 +1,054 + 188 999 - 18 -94 6,775 - 289 -976 1,058 +90 - 124 40,625 479,794 + 1,856 +17,371 - 1,984 + 8,877 REVIEW OF . AGRICULTURAL AND BUSINESS CONDITIONS 8 NATIONAL SUMMARY OF BUSINESS CONDITIONS By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION , PERCENT P&RCENT 140 140 130 130 120 120 119 110 100 100 90 90 80 80 70 70 60 60 1935 1934 1936 1937 1939 1938 Index of physical volume of production, adjust ed for sea sona l variation, 1923-1925 ·average = 100. By months , January, 1934, through Augu st, 193 9. · DEPARTMENT STORE SALES AND STOCKS PERCENT PERCE"1' r------r--- .- - - - - . - - -.-----r---___:_,; 110 11 0 100 90 80 70 60 t - - - - - - - - + - - - + -- - 1 - - - - + - - - -+--- - - I 60 50 1---------t-----r---+----+---- + - - - - I 50 40 - - ~- - ~ - - - ' - -- - ' - -1934 1935 . 1936 1937 1938 -'------' 40 1939 Ind:..:xes of value of sales and stocks, adjusted for sea sonal Yar iation, 1923-1'925 average=l00. By mon t h s, January, 1934, through August, 1939. WHOLESALE PRICES P£RC£NT rfF -;:.:.:-- ~ - ----..-- -.------.----.-----, 110 Industrial activity, which had increased substantially during the summer, showed a sharp advance in the first half of September after the outbreak of war in Europe. Prices of basic commodities and equity securities rose sharply while prices of high-grade bonds declined. PRODUCTION In August, the Board's seasonally adjusted index of industrial production was at 102 per cent of the 1923-1925 average as compared with 101 per cent reached in July. Volume of manufacturing production increased further, but mineral production declined, owing to a temporary curtailment in output of ·crude petroleum. In the iron and steel industry output increased somewhat further in August and rose sharply in the first half of September, steel ingot production reaching a rate of 70 per cent of capacity in the week ending September 16 as compared with about 63 per cent at the beginning of the month. Automobile production showed about the usual sharp seasonal changes in this period as the shift to new model production was being made. Output of plate glass increased sharply. Production of nondurable manufactures advanced in August, reflecting chiefly increased activity at cotton and woolen textile mills. At meat-packing establishments activity declined less than seasonally, while at flour mills, where output has been at a high rate in recent months, there was not the usual large seasonal increase. Shoe production advanced seasonally. At coal mines output increased by about the usual seasonal amount and shipments of iron ore were at the highest .rate of this season. Petroleum production declined sharply during the latter half of August, reflecting shutdowns of wells in most of the principal oil producing states, but increased rapidly in the first half of September when the wells were reopened. Value of construction contracts, as reported by the F. W. Dodge Corporation, increased somewhat in August, owing to larger awards for publicly-financed projects, including several large dams and an increased volume of United States Housing Administration projects. Private residential building showed little change, although there is usually some seasonal decline. Other private construction, which in July had been the highest for any month in two years, declined in August. DISTRIBUTION Department store sales increased more than seasonally from July to August. The Board's adjusted index advanced from 86 to 89 per cent of the 1923-1925 average and was at about the level reached in the latter part of last year. Sales at variety stores showed little change in August. Freight carloadings rose somewhat further in August, reflecting chiefly continued increases in shipments of coal and miscellaneous freight. COMMODITY PRICES 100 ~ - ----<f-- -+---+----+----t------1 100 I 90 90 l----- - - - - l - - = 7 0 , . , , - - - - F - 80 80 70 70 FAR PilODUCTS 60 50 L,..__ __J_ ___L_ ___L_ _- - - - ' - - ~- - ' - - - _ . . , . . 1936 1934 1937 1938 50 1939 Indexes compiled by the United States Bureau of Labor Statistics, 1926=100. By weeks, 1934 t hrou g h w eek ending September 16, 1939. Prices of most basic foodstuffs and industrial materials advanced sharply in the first half of September. Prices of wheat, corn, sugar, cocoa, and vegetable oils as well as of hides, rubber, wool, zinc, and tin showed the largest increases. The general level of wholesale commodity prices as measured by the Bureau of Labor Statistics index rose 3.1 points and in the week ending September 9 was at 78.4 per cent of the 1926 average, about the same level as a year ago. AGRICULTURE Crop prospects showed some improvement on September 1 over a month ,.earlier, according to the Department of Agriculture. Indications are that production of all leading crops except cotton will be average or above average in volume. A cotton crop of 12,380,000 bales, about 10 per cent below the 1928-1937 average, is forecast. This compares with a crop of 11,940,000 bales in 1938 and an estimated world consumption of 11,265,000 bales of American cotton during the past season. GOVERNMENT SECURITY MARKET MONEY RATES IN NEW YORK .CITY 3 3 2 Average yields on long-term Treasury bonds, which had advanced fractionally since last June, increased sharply by about ½ of 1 per cent in the latter half of August and early September. In pursuance of the System's policy of endeavoring to maintain orderly conditions in the money market, the Federal Reserve banks during the first half of September increased their holdings of Government securities by about $400,000,000. On September 1 the Board of Governors of the Federal Reserve System announced that the Federal Reserve banks are prepared at this time to make advances on Government obligations to member and nonmember banks at par and at the same rate of discount. · BANK CREDIT 0 L...__:::___Jc_~_:,,__:__:,_:__:_J,_ _ 1934 1935 , 1936 1937 ___i:= ~......- . . L . _ ~ 1938 1939 For weeks ending J a nuary 6, 1934, through September 16, 1939. 0 Total investments held by reporting member banks in 101 leading cities declined during the first half of September. At New York City banks the decline represented the redemption at maturity of Federal Farm Mortgage Corporation bonds and at banks in other leading cities it represented the sale of Treasury bills and bonds. Commercial loans of city banks showed a subs_tantial growth during August and the first half of September.
@FedFRASER