MONTHLY> REVIEW AGRICULTURAL AND BUSINESS C~NDITIDNS IN THE NINTH FEDERAL RESERVE DISTRICT

Serial VaI. 7 {ISn . 2 R 5 Federal Reserve Sank, Minneapolis, Minn. September 2$, 1938

August business volume in the NintlY District was and far the first eight months this year were only larger than in .Iuly but on the whole, below a year 4 per cent below the January-August total last year. ago, Department store sales, country lumber sales City stores reported a 2 per cent increase, the first and construction activity were above a year ago. increase over the same month a year earlier since Grain marketings were larger than last year but with the one exception of April prices were lower. Farm income was below last when sales were expanded because of the later date year's level. of Easter. Country stores reported an increase of 1 per cent over August last year. The plains section ausli~las of Montana reported the largest increase, 1 ~ per The volurlxe of business in August as measured cent. Every section in North Dakota was above a by our seasonally adjusted indexes increased at a year ago, especially the northeastern part, the state slower rate over July than did July aver June and showing an increase of 7 per cent. South Dakota was the smallest fox August since 1935. Retail dis- reported the second highest state increase, 4 per tribution Compared favorably with a year ago as cent larger than in . Preliminary reports the adjusted index far city department stores was on sales from some of the reporting city stores for higher than in any August since 193Q and inven- the first part of September indicate sales as large tories were eight points below last year. The sales as a year ago. Collections on accounts and notes re- index for country general stores was up one point ceivable aY 45 department stores in the Ninth Dis- from last year and country lumber sales were the trict declined seasonally but were as good as a year highest for any August since 1929. The bank debits, ago. Fatal accounts and notes receivable at these country check clearings and carloadings indexes re- stores increased a trifle during August but with the Iower than last year. exception of July 31, 1938 were the smallest for mained any month end since . Northwestern Business Indexes Lumber sales in board feet at 49fl country lumber (1929-1931-100) yards in August were considerably larger than in Aug. July Aug. Aug. July and the largest of any August since 1929. 1938 1938 1937 1935 Stocks of lurxxbex decreased slightly and were 5 per Sank debits-94 cities...... 85 83 95 94 cent below a year ago. Dollar sales, which include F3ank debits-farming centers 88 89 97 97 materials other than lumber, were 10 per cent above Country check clearings . . . . 144 142 lbl 160 July but a little less than in August 193 7_ Receiv- City department store aalea. . 93 9b 40 9D ables race to 8 per cent above last year, chiefly the City department store stacks 83 79 91 79 result of sales being 5 per cent larger than a year Rural department store sales 93 94 92 45 ago and collection volume being 111 per cent less Country lumber sales ...... I01 89 96 93 than in August last year. Miscellaneous carloadings . . 72 69 90 9t L.C.1.. carloadings ...... 62 b2 69 fig PE CITY DEPARTMENT 5TQRE INDE7SES Daily average bank debits were higher in August ,929'31=1C0 than in July at Minneapolis, St. Paul and the Great 130 f Lakes Ports, but all other sections of the district _- _._ showed moderate declines, All sections of the dis" -__._~_- m trict were below a year ago with the livestock sec- no tion in southeastern Minnesota and west central Wis- loo l~l~ .~ . loo consin having the smallest decline. Country check eo 90 clearings in August were smaller than in July and '~ / 11 per cent below August 1937. Minnesota check ao eo clearings were 6 per cent below and North and vo ,~'. . / ro South Dakota 1 1 per cent below last year with Mon- so Bo tana and northern Wisconsin and showing somewhat greater declines. se fCFa!"i"krlfi"i7"fFk:J"[-.xk""kkif"L'kF7"i'k a"1'a}lfLk:"1/F'Fk7/F'E!"7TG'Ef"ff~L~i 5C Sales at department stores and general stores in Index aF 5alea and Stocks at 19 City Ueparimeni Stores, the district were larger in August than a year ago Adjusted For Seasonal Variation. 144 AGRICULTURAL AND BUSINESS CQNDITIUNS September 28, i 938

Sales at Department Stores August lout was less than one-third of the August Cumulative No. of ~Auk. 1839 ~ 193H 1937 production. Production of gold also increased Stores of AuQ. 1937 of 1937 but remained below last year. Silver produc- Mpls St. Paul, Duluth-Superior . . 21 102 97 tion decreased and was less than one-fourth as large C~untry ~tores . . . , ...... 436 1 O1 9b as a year ago. The number of employees at four of Minnesota ...... 151 9$ 97 the leading Central Minnesota ...... 30 iDfl 98 non-ferrous mines in the district at the N~rtheastern Minnesota . . , . 1 7 98 91 end of the month was 3 per cent larger than in Jmy Red River Valley Minnesota . 10 100 l 00 but only about half as large as in August last year. South Central Minnesota. . . . 33 94 93 ~~utheastern Minnes~ta , . . . 4 9 1 fl4 100 C]thex indicators of business volume that were Southwestern Minnesota ., , . 42 95 99 lower in August than a year ago were new passenger Montana . . . . ., ...... 48 100 92 ear and truck sales in Minnesota and North Dakota, Mountain ...... 14 89 88 Plains ...... 34 I i0 96 life insurance sales, freight carloadings of all com- North Dakota , . . 80 107 99 modities except grains, linseed product shipments, North Central Itivrth Dakota 1 fi 1 fl9 98 lumber cut and shipped by manufacturers, and Northwestern North Dakota, 1 1 1 fl2 92 wholesales of groceries, shoes, hardware and elec- Red River Valley North Dak. 25 109 105 Southeastern North Dakota. . 23 105 93 trical goods. Increases over August last year were Southwestern North Dakota. 5 1 Q6 97 recorded in carloadings of grain and grain products, RedRiver'Valley-Mine . & Iti,D, 35 107 104 warranty deeds and mortgages recorded in Henne- South Dakota ...... 81 1 fl4 96 pin and Ramsey Counties, flour production in Min- Southeastern South Dakota . . f b 100 10I neapolis and Other Eastern South Dakota 54 108 97 outlying mills and flour shipments from Western South Dakota . , . . . f 1 90 86 Minneapolis. Business failures were larger than a Wisconsin and Michigan ...... 76 99 94 year ago, The number of non-farm real estate fore- Northern Wisconsin tSr Mieh. 39 104 97 closures in July was only half as large as in July West CE:ntraI ~Crisconsin . . . . 37 95 92 1937. Building contracts awarded in August for the BANKING Minneapo?is territory as reported by the F. W. City member bank deposits increased during the Dodge Corporation were 12 per cent larger than a four weeks ended September 14 and were larger year ago, Re4ldentlal contracts wexe 30 pex cent than a year ago or on any other reporting date for larger and public utility contracts, 5$ per cent larger more than 20 months. Demand deposits of indi- than in August last year. Public works amounted to viduals, partnerships and corporations were the two-frfths of the total valuation of contracts awarded highest they have been since and but were a little smaller than those of August 1937, an all-time record high was established on Septem- and contracts awarded in the non-residential build- ber 7 fox deposits due tv other banks. Time deposits ing classification wexe less than a year ago. continued to increase for the third consecutive Building permits reported by cooperating officials month, but remained below 3ast year. Loans to cus- in 46 cities in the Ninth District in August were 4 tomers increased about ~l per cent during the four per cent larger than in August last year. Total valua- week period but were 10 per cent below a year ago. tion was l3 pex cent above August 1937, chiefly other invested funds were unchanged during the the result of a large increase in new construction. month, remaining about 12 per cent below Septem- The valuation of repairs and alterations was only ber 1 5, 1937. Reserves held with us declined some- slightly above last year. Twenty-four cities reported what during the four weeks to the level of a year increases and twenty-two reported decreases in total ago but balances due from other banks increased permits. Large increases were reported in Faribault, sharply and were nearly double the last years Little Falls, Minneapolis, Gwatonna and Winona, volume. Minnesota ; Great Falls, Helena and Missoula, Mon- Country member bank deposits averaged a little tana ; Grand Forks, Jamestown and Minvt, North higher during the latter half of August than in the Dakota ; Brookings and Madison, South Dakota ; and latter half of Jmy as a result of a small increase in Rhinelander and Superior, Wisconsin. deposits at Minnesota and Wisconsin hanks. All of Iron mining activity in northern Minnesota and the increase was redeposited with city correspon- Wisconsin increased somewhat in August but re- dents. Total deposits at country banks averaged only mained at about one-third of the 1937 volume, Cax- 3 per cent smaller than during the last half of Ioadings of ore increased 1 1 per cent during Au- August 193 7. Country bank reserve balances with gust and shipments of iron ore from upper lake us were unchanged during the month, leaving ex- parts were a little larger than in July. Iron ore cvn- cess reserves at about the $16 million level. sumptian increased during August as a result of Deposits at all commercial banks in the Ninth another increase of about 7 pex cent of capacity in District increased $25 million between March 7 and operations in the steel industry, but nevertheless ore June 30 according tv call repork abstracts and were shipments continued to be considerably larger than only $9 million below June 30, 1937. Investments consumption and iron are stocks on September 1 decreased $77 million during the period but loans were the largest for that date of any year since 1922 . remained unchanged. Reserves, including cash and Copper productionx in the district increased during balances with other banks, increased $87 million. NINTH FEDERAL RESERVE DISTRICT !45

AGFt1CLILTURE being marketed as freely as usual due in part to the tendency among northwestern cattle raisers tv in- Farmers' cash income from the sale of seven im- crease their herds and in part to a desire to put portant products in August was 14 per cent below more weight an the surplus stack before selling. a year ago but larger than in any other year since Shipments of stocker and feeder cattle increased 1934. Income from durum wheat, flax and kings August but were about one-third less than was all larger than last year, but reduced prices during About 14 per cent less feeder cat- more than offset increased marketings of bread in August 1937 . eight months of spring wheat, rye and potatoes, and income from tle were shipped during the first during that period of 1937 . A broad de- these items remained below a year ago. Dairy prod- 1938 than throughout August, reflecting the uct marketings were in about the same volume as mand prevailed supplies of feed available this fall. Prices ad- last August but prices averaged 19 per cent lower. large Burin; the month, averaging about 54 cents These estimates do not include government pay- vanced July. During the first half of Septem- ments. higher than in ber supplies increased but they were rapidly taken The USDA's estitxaate of cash income received and most Bond western steers were selling at $7.54- during July by farmers in the Ninth District was $$ .25 . higher than in June and nearly as large as in July Dairy caw trade during August and the first part 1937 . An increase of 35 per cent in income Exom remained steady. Shipper demand livestock and livestock products in South Dakota of September continued broad for good quality cows and prices brought South Dakota's income well above last July. remained firm. Pear quality cow prices declined in Minnesota income was about as large as a year ago sympathy with butcher cow prices. The bulk of the and the other states and part states of the district cows brought $54-$84, the range being $34-$95 . showed moderate declines. Hog receipts at South St. Paul during August in- at terminals increased seasonally Grain marketings creased seasonally from July and were nearly double August and as a result of the larger praduc- during those of August 1937. The first eight months hog early movement v£ grain this year were tion and receipts were nearly one-quarter larger than during substantially larger than a year ago. During the first that period last year. Heavy receipts a£ unfinished ten days of September marketings continued to be hogs in August coupled with a dull demand created large but by mid-month were beginning to dwindle, a near glut condition, The latter part of the month, throughout the third week of the month. decreasing however, found the quality of receipts improving Grain prices declined further during August and the and coal weather spurred the demand fox dressed September. At mid-September, how- first part of pork, firming the live market. The spring pig crop firmed the market and prices ad- ever, war rumors started to arrive in the first part of September but vanced sharply. the decline in price expected by most buyers did Livestock prices showed mixed trends during not develop because of the increased demand far August. Cattle prices were generally firm. Advances dressed pork. A top of $9 .14 was established dur- were registered in all classes of cattle with the ex- ing the second week of September, the highest price ception of highly finished butcher steers and butcher paid since the first days of August. cows and heifers. In spite of large receipts during Receipts of sheep and lambs in August increased and the first half of September prices remained firm seasonally but were smaller than a year ago. During a "top" of $12 . l 5 was recorded during the second the first eight months of this year, however, sheep week, the highest prise paid at South St. Paul since receipts were slightly larger than Ear that period last last November . Hag prices declined $ 3 .44 to $$.54 year. August experienced a downward trend in in August compared with $1 1 .54 in August 1937. sheep and lamb prices and according tv the USDA, July to $$.25 Larnb prices declined from $8 .75 in "Same further weakness in prices o£ lambs may de- in August, $2.44 below August last year. velop in the late summer and fail as slaughter sup- Other farm product prices were practically un- plies increase." During the first two weeks of Sep- changed from ]uly, but were all lower than a year tember prices continued tv decline as marketings ago. $utter, milk and Wool prices remained at July became heavy at midwestern paints. F'at Iambs were levels but poultry prices declined and egg prices selling at from $6.75-$7 .54 at mid-September. advanced slightly . The Minnesota farm price index Cold storage holdings of cream, butter and cheese declined from 73 in July to 64 in August compared increased seasonally during August and were higher to $7 in August 1937. than usual on September l . Poultry holdings in- Receipts of cattle and calves at South St. Paul creased a little more than usual and remained above in August increased less than usual and were one- normal, but holdings of eggs declined and were 1 6 quarter smaller than in August last year. During the per cent below the September l 5-year average. first eight months of 1938 slightly more cattle were Holdings o£ all classes of meats were below the 5- marketed than during the same period last year but year average. Pork and bee£ holdings were only calf marketings during that period were only three- about two-thirds of normal, lamb and mutton fourths the volume of a year ago. Market receipts slightly below the usual amount on September 1 and are of higher quality this year. Young cattle are not lard holdings 1 3 per cent below the 5-year average. 146 AGRICULTURAL AND BUSINESS CQNDITIDNS septe:nber za, I93a

ixousrniu ~aaoucnox National Summary v~ Business Conditions

CUMPiLED BY THE BDARb DF GDVERNDRS OF THE FEDERAL RESERVE SYSTEM, 5EI''TEMI3ER 23, 1938 industrial activity increased considerably in August and advanced further in 5epiember. Factory employment and payrolls also showed a substantial rise in August, and distribution of commodities to consumers increased seasonally. PRDDI]CTfDN: The volume aF industrial pxoduction showed a further cansid- exable increase in August, and the $card's seasonally adjusted index rose From 83 to 88 percent of the 1923-1425 average. In manufacturing, increases in output were Fndex oP physical volume of pmducti~n, general except in the automobile industry where there was a sharp seasonal decline ndjuated Ior seasonal variation, 1923-1925 as plants were closed for inventory taking and far preparations fnr the shift to new averaKe - I09 . By months, model pxoduction. At steel mills where activity had risen considerably in July, doers to . was a further advance in August and production was at an average rate of 42 per- cent of capacity as compared with 35 percent in the previous month. output of lumber and plate glass also increased. In the textile industry the sharp advance that ('(K'ySgU~T[pH pnrraAC,s AwRRLEO had been under way since early summer continued. Mill consumption of wool and cotton increased further, and deliveries of rayon were maintained at the high level reached in July. Shoe production showed a further increase and activity at meat packing establishments showed less than the usual seasonal decline. Production of bituminous coal and crude petroleum increased somewhat Further. In the first three weeks of September steel ingot production continued to in- crease, while automobile production remained at the low level reached in August . Output of crude petroleum was reduced, as wells in were closed an bath Sat- urdays and Sundays, whereas in August only Sunday closings had been required . The value of construction contracts awarded in 3 7 eastern states increased con- siderably in August, ar_cording to figures of the F. W. Dodge Corporation. The in- Tiirer.-month moving oversees of F. W. crease was in publicly-financed projects and reflected partly the expansion of the LlodKe data for value of contrasts awarded public works administration program . and the award of the first contract for the in 3T Eastern States, adjusted far aea- slum clearance projects of the United States Housing Authority. Awards for private nona! variation . J .atest figures based on residential building continued at shout the same rate as in July and were close to the data far June, July and August 1938 . level reached in the spring of 1937. Commercial building, which had increased in July owing to the award aF a contract For a large office .building, declined in August tv about the level of other recent months . uw~ar sArFS iH a[w mar cin EMPLDYMENT : Factory employment and payrolls showed a marked rise from the middle of July to the middle of August, while in nonmanufacturing industries employment showed little change. The number employed at Factories producing durable goods increased for the first time since the summer of 1 937 and in the non- durable goods industries, where employment had increased in July, there was a Further rise, Most leading industries reported increases in the number of workers. DISTRiSLITIDN: Distribution of commodities to consumers increased seasonally Pram July to August. Department store sales showed about the usual rise and mail order sales increased, while variety store sales declined. In the first half of Septem- ber sales at department stares increased more than seasonally . Freight carlaadings increased somewhat further in August, reflecting chiefly Discount rate of Federal Reserve Bank ; miscellaneous freight. weekly averages of daily yields on S to u larger shipments of year Treasury notes and on Treasury hands CDMMDi7iTY PRICES: Prices of silk and rubber showed same advance Pram calEable after 8 yearn, and weekly average the middle of August to the third week of September and there were also increases o£ daily dealers' quotations an 90 day at the e=id of the period in nonferrous metals, Wheat prices fluctuated considerably Treasury bills or rate on new bills offered but showed little net change in this period. Prices of cotton and wool declined some- is week . For weeks ended January 6. 1934 what, and there were further decreases in prices of some finished industrial products. to Sel7tember 17, 1938 . BANK CREt11T' : A heavy inflow of gold from abroad during the Eve weeks end- ing September 21 resulted in an increase of over $Sba million in the monetary geld stock. Member bank reserves were increased by Treasury payments fnr gold acquired but were sharply reduced in the last week of the period by payments to the Treasury for cash purchases of new securities and quarterly income tax collections. As a con- sequence of these transactions, excess reserves, which had increased Yo $3,13D rtiil- lion were reduced to $2,740 million on 5eptembcr 21 . Total leans and investments of reporting member banks in leading cities in- creased sharply during August and the first three weeks of September, reflecting chiefly an increase in holdings of United Stares government obligations. Balances held in City for foreign hanks showed a substantial increase. MONEY RAT1tiS AND BDND YiELllS: The average yield on long-term Treasury bonds increased in September From the low point reached at the end of August. The Wednesday figures, January 3, 1934 W average rate on new issues of Treasury Gills increased to .11 percent, compared September 21, 7938 . with .05 percent, YicIds vn high-grade corporate bands increased slightly.