2*^33 UNITED STATES DEPARTMENT OF AGRICULTURE Bureau of Agricultural Economics r-fiffiffiikA&L U.S. DEPOSITORY SUPPLEMENTARY REPORT ON AGRICULTURAL CREDIT DEVELOPMENTS RELATING TO COMMERCIAL BANKS By Norman J. Wall, Senior Agricultural Economist Washington, D. C. November 1937 Data on agricultural loans r f commercial "banks for Deoomber 31, 1936 & ni June J>0, 1937 are "based upon official 1 ts of the Gomptroller of the Currency, Federal Deposit Insurance Corporation, and the Board of Governors of the Federal F.eserve System. Data for earlier periods are based in part on such reports and on special surveys conducted by the U. S. Department of Agriculture. Data on demand deposits of country banks are based upon re- ports issued "by the Board of Governors of tne Federal Reserve Sys- tem. Indexes of such deposits series are compiled by the Bureau of Agricultural Ecc ;s« This report supplements and carries forward data contained in the following: Technical Bulletin No. 521. Agricultural Loans of Commercial Banks (July 1936) . Mimeographed report, Recent Agricultural Credit Developments Relating to Commercial Banks (February 1937) • Mimeographed release, Agricultural Loans of Commercial Banks Show Further Decline (June 23, 1937). Technical Bulletin No. 575. Demand Deposits of Country Banks (August 1937) . * N Credit for the preparation and checking of statistical data in thi-e report is due t* Mrs. Lucy R. Hudson and Mrs. Celia S. Bryan. l STPP^MENTAHY REPORT OH AGHICULTUIUL CREDIT DEVELOPMENTS RELATING TO COiMSRCIAL BANKS By Norman J. Wall, Senior Agricultural Economist Agricultural loans of commercial banks, reflecting in part a seasonal expansion, increased l4 percent during the first half of 1937- This is the first increase to "be shown in such loans in any recent year. Personal and collateral loans to farmers increased from $593,cl4,000 to $726,1+00,000, an increase of 22 percent. Loans on farm real estate increased from $487,53^.000 to $5OU,13S,0OO, an increase of only 3 percent. Loans of the latter type have shown "but little change during the last 3 years. Loans "by all three types of hanks increased during this 6-month period, the largest percentage increase being shown for nonmember banks (table l) . Table 1. — Agricultural loans of insured commercial banks, by type of bank, on ~;iven dates Type of loan and date .Nonmember \ State banks State member banks National banks All banks Personal and collateral loans: Dec. 31, IQ3U June 30, IQ36 Dec. 31, IQ36 June 30, 1937 Loans secured by farm real estat Dec 31, I93U June 30, 193b Dec. 31, 1936 June 30, 1937 Total agricultural loans: Dec 31, I93U June 30, I93S Dec. 31, 1938 June 30, 1937 e : 1 ,000 dollars 334,818 240,992 211,477 266,654 237,015 233, OSS 229,307 233.633 571, S33 ^74,080 44o,784 506,287 1,000 dollars 59, IU5 ^9,323 52,196 6l,403 43 , 384 45.357 47,408 49,488 102,529 95.180 99 ,'6o4 110 , 891 1,000 dollars 4l3,o50 37L291 32Q,94l 398,3' 1 43 218,443 210,299 210 , 319 215,017 632,093 531,590 540 , 760 613,360 1,000 dollars 807,613 661,606 593,614 726,400 498,842 489 , 244 487, 53^ 504,138 1,306,455 1,150,850 1,081,148 1,230,538 Personal and collateral loans showed the largest relative increase in the South, an increase representing, largely, the seasonal requirements for - 2 - financing the production of cotton and tobacco. In 10 of the leading cotton- growing States outstanding personal and collateral loans to farmers rose from $109,719,000 at the end of 1936 to $130,084,000 on June 30, 1937, an increase of 64 percent. This compares with an increase «f 11 percent for all other sections of the country combined. Increases in outstanding personal and collateral loans tc f rmera took place during the first half of 1937 in all of the geographic divisions except in the Mountain States. In the latter group, decreases were shown in Col rado , Arizona, Utah, and Nevada. Since the first of the year there has "been an appreciable seasonal liquidation of loans originally made to finance the feeding of cattle and lambs in these States. As compared with 'a year earlier, outstanding personal and collateral loans to farmers on June J>0 , 1937 were about 10 percent higher. Increases were shown in all geographic divisions except in the Now England and Middle Atlantic States. In these two groups of States, agricultural l^ans, except for seasonal increases, appear to be continuing the downward trend that has characterized the last several years. Table 2 shows the distribution of per- sonal and collateral loans by Stater, and geographic divisions on December ^1 , 1934, June 30, 193b, December 31, 1??6, and June 30, 1937- (Table 2, p. 3) For the country as a whole, it appears that the d<. I trend in per- sonal and collateral loans to farmers which was, for the most part, charac- teristic of the entire period since 1920 , has come to an end. Prior to 1933- the volume of -personal and collateral loans to farmers held by commercial banks followed, in a general way, the trend of prices received by farmers (fig. l) . In the period following the upturn in farm commodity prices in early 1933 until the end of 1936, there was a divergence in the trend of these two series. Although the index of prices received by farmers increased 25 percent from the end of 193* 1 "to the end of 1936, personal and collateral loans to farmers decreased 2o percent 'during this period. The divergence in trend during these years represents largely the repayment and refinancing f carry-over loans in amounts relatively greater than the net increase in new loans. (Fig. 1 and table 3.) Table 3* — Agricultural loans of commercial banks in stated years 1/ Year Leans secured by farm real estate Personal and collateral leans to farmers Total agricultural loans 1920 1923 1931 (June) 1934 1936 (June) 1936 1937 (June) 1,000 d ollars l,UL,-7,liS3 1,3S5,1C6 9^5.172 498,342 439,244 487. R 34 504.133 1 1 , 000 d cllars 3,869,391' 2.9U3.S18 1,936,360 . 807,bl3 66l.,6o6 . 5 q 3.6iU 726,400 1,000 dcllars 5*317,374 M31.92U 2,881,372 1,306,455 1,15C 85O 1,031,1-8 1,230,578 ly Based upon data reported by tho various s ous surveys conducted 'oy the Department of Agrlo r*-apt for the midyear indicated for 1931 , 193" » and 1937 upervisory banking agencies and upon vari- alture; data relate to the end of year ex- Table 2. — Personal and collateral loans to farmers held by Insured commercial banks, for December yi , 1934. June 30,1936, December 31, 1936. and June 30, 1937, by States and geographic divisions 3tate and geographic division Dec, 31. 193U June 30, 1936 Dec. 31, 1936 June 30, 1937 Amount of Increase or decrease from June 30, 1936 to June 30, 1937 Dec. 31, 1936 to June 30, 1937 . 1,000 dollars Maine New Hampshire Vermont Massachusetts Rhode Island . Connecticut . . New England New York New Jersey . . Pennsylvania Middle Atlantic Ohio Indiana Illinois Michigan Wisconsin last North-Central Minnesota Iowa Missouri North Dakota . . . South Dakota . . . Nebraska Kansas West North-Central Delaware Maryland District of Columbia Virginia West Virginia North Carolina South Carol lna Georgia Jlorida South Atlantic Kentucky Tennessee Alabama Mississippi .... last South-Central Arkansas Louisiana Oklahoma Texas West South-Central Montana . . . I daho Wyoming . . . Colorado . . New Mexico Arizona . . . Utah Nevada Mountain Washington Oregon California Pacific UNITED STATES 2,269 1,136 2.028 397 2,141 11,291 26,032 8.211 30,08 1 ,32%" 24.946 22,788 42.770 8.979 21J2L 121,280 32,353 40,551 34,517 8,736 12,660 32,219 _2L£ 188 & 1.938 h % 19.952 6.113 1U.150 12,896 32.8U7 2. ?25 28-I&2L 23,566 26,61+2 28,955 8,728 87.891 14,562 5.962 21.775 69,171 111.470 9.995 6,760 11.019 16,633 3,12 s * 1.728 8.505 *L 10.U93 7.19 s * ^7,908 65. 59'? 807,613 1,000 dollars I.652 500 2.375 1.510 289 5**5 M.S71 23,l6U 9.103 19.037 alas 16,276 15,1*60 38,108 7.145 Ji853_ 90 , 842 32.137 41.871 31.978 9.177 14,501 36.895 33.736 200,295 786 3.303 l 9.332 2.063 5.485 3.792 10.297 3^48" 10,190 9,66s 13.173 _Z*2 : M£ 8.513 3.637 25,781 69.176 107.107 9,842 8.426 12,1*90 15,044 4,512 3.198 5.217 22L _£d fs 8,988 K%T 661,606 1 ,000 dollars 1,696 503 1,812 1.473 117 1*80 6,081 19.310 4,052 1/ 15,286 38,648 15,1*40 14,009 38.867 7.795 13,009 89,120 30.866 1*1,611 3O.597 8,436 13.394 34,1+62 ?1, I** 190,5 12 597 3.054 8,221 1,408 .2.503 1.073 6.36O 1.775 24.991 9.261* 7,934 6,255 2 / 3,1*12 2b. 865 4.239 2.052 22,008 5 3,88? 82,182 8.534 8,817 9.794 20.771 4,280 6.82U 9.297 ■ 981 69,298 8.338 7.667 ^9,912 6 5,917 593.614 1,000 dollars 1.219 505 2,1*12 1.377 124 821 6,458 22,268 5.776 15.95 5 ^■999 17.598 16.1+U6 40.378 9.508 1^.627 98,557 44)986 37.532 8.816 13.371 37.501 35,154 ^iiiiL 41+9 2.809 1 10,112 2,301+ 8.116 5.383 13.686 1,963 44,823 9,442 10.613 17.507 9^866 1+7,1+28 10,025 4J24 26,363 ,801 U47 9Ji 10.28U 9,376 12,563 17.405 5.336 4,529 8,232 68,644 10,55U 8.694 71,094 JO, 726,400 1,000 dollars - 433 ♦ 5 ♦ 37 - 133 - 165 27i III - 896 - 3.327 3.082 - 7. 30 5 + 1.322 f 986 + 2.270 + 2.363 + 7.715 1.739 3.115 5.554 361 .130 + 606 ♦ 1.U18 +10,941 - 1, 337 U94 780 2U1 2.631 1.591 3.389 _5Zl + 8,3 7 5 - 748 + 945 + It. 334 + 1,?21 + 6,1*52 + 1,512 + 1,087 + 582 4,625 J ^,625 + 7,806 + 2 1+1+2 950 ,11 82U 1.331 3.015 _!52 9M 8 + 1,566 ♦ 179 ^20,330 +22,075 +64,791+ 1,000 dollars - 477 + 2 ♦ 600 - 96 + 7 + 341 JZL 2.958 1,724 669 5,3 51 + 2,158 + 2,1+37 + 1,511 ♦ 1.713 + 1,618 t 9.**37 + 3,010 + 3.375 + 6.935 + 380 - 23 + 3.039 + 4,008 +20,724 - 14S - 2U5 + 1 + 1.891 ♦ 896 + 5.613 + 4,310 ♦ 7.326 + 188 +19.832 + 178 ♦ 2.679 +11,252 + 6.1. • +20,56 3 i+^i+ 563 5.786 2.672 4,355 +i 9,9 is +32,731 + 1.750 + 559 + 2,769 - 3,366 + 1.056 - 2.295 - 1.065 62 T54" + 2,216 + 1.027 +21.182 ►24,425 +132,786 V 1/ excludes two trust companies which do not accept deposits. 7J Exclude* one bank for which a report was not available. PERSONAL AND COLLATERAL LOANS TO FARMERS AND INDEX OF PRICES RECEIVED BY FARMERS DOLLARS ( MILLIONS ) 3.600 3.200 2.800 2.400 2.000 1.600 1.200 800 400 - Index of prices received by received by ~ I farmers J (1910-14=100) ~ ^7- J I I J I L I y comm Personal and collateral loans to farmers held by commercial banks V -L_l L -1 r/— /- \~J 1920 did 1925 1930 1935 PERCENT 200 180 160 140 120 100 80 60 40 30 1910 1915 U.S. DEPARTMENT OF AGRICULTURE HE( j. „ 7I3 BUREAU OF AGRICULTURAL ECONOMICS AGRICULTURAL LOANS SECURED BY FARM REAL ESTATE AND INDEX OF LAND VALUES DOLLARS MILLIONS ) PERCENT - Index of land values ,_ Agricultural loans, secured by farm real estate, 180 1.400 n ■ ( -ly '-'"""" -s, 1 ku f* held by commercial banks 160 1,200 > I _ / 140 1,000 y .. / £^. 120 800 s ts* •* ir»r» 600 \ ■ lUU -V-rrn 80 400 1 1 9 60 200 J 1 i i 40 - 1 L 1 1 I i l 1 1 1 i i i 1 1912 1915 1920 1925 1930 1935 LAST BAR INDICATES DATA FOR JUNE I9S7: PRECEDING BAR. DECEMBER 21. 1936 U.S. DEPARTMENT OF AGRICULTURE NEG 297K. BUREAU OF AGRICULTURAL ECONOMICS Figure 1. Voluae of these loans has been influenced by level of prices received by faraers and by level of fara land values. In 1914-20, aaount of personal and collateral loans aore than doubled; since 1920 there has been sharp contrac- tion, federally sponsored credit partly accounts for recent divergence between prices received by faraers and voluae of personal and collateral loans held by coaoercial banks. Loans secured by fara real estate showed their first increase for several years between December 31. 1935 aai J*"* 3°. 1936. - 5 - This divergence between the trend of loans and the trend of prices or of general "business activity is usually a characteristic development after major "business depressions such as occurred subsequent to 1920 and 1929- Following such a business depression, a portion of the loans based en the higher price level previously existing, obtained by most types of borrowers from commercial banks, becomes difficult of repayment out of the borrower's current income- Such loans as are not liquidated on or before maturity must be extended and carried over, at least in part, until the borrower's ability to repay becomes improved. With the recovery in business activity, these carry-over loans are reduced by repayments out of improved income, and by re- financing with other agencies, or they are charged off. These reductions tend to offset the volume of new loans granted, and outstanding lopas con- tinue to decrease even after business recovery sets in. Loans of member banks of the Federal Reserve System, as measured by weekly reporting member banks in leading cities, did not show an upturn until early in 193^, nearly 3 years subsequent to the beginning of the recovery in business activity. The beginning of the upturn in personal and collateral loans to farmers, held by commercial banks, came nearly a year later. As the ratios of both annual gross receipts and net income to total capital investment in agriculture are smaller than in most other industries, the repayment of agricultural loans that have developed into fixed-capital advances is relatively slower than for industry or commerce as a whole. Table 4 indicates the decreasing importance of the refinancing program of the Farm Credit Administration as a factor in curtailing outstanding per- sonal and collateral loans held by commercial banks. As the bulk of refinan- cing of agricultural loans under this emergency refinancing program apparent- ly has been completed, little further reduction in agricultural loans of com- mercial banks is to be expected from this source- Table U. — Loans closed by Federal land banks and Land Bank Commissioner, end estimated use of loan proceeds to refinancing personal and collateral loans held by commercial banks Period Total amoxint of loans closed ±_l Estimated amount used to refinance personal and collateral loans owed by farmers to commercial banks l/ 1933 Dollars 222,396,823 1,233,181,756 kl+3 , 1+79 . ^9 185,1+88,69^ 59,66)4,858 Dollars 36,U73,000 6U, 159, 000 : 21,730,000 7,^53,000 2,Ul3,000 193U 1935 1936 1937 (Jan. -June) 2,19)4,211,581 132,228,000 _l/ Excluding Puerto Rico. With the liquidation of carry-over loans through refinancing and re- payment from income largely completed in most regions, the influence of ris- ing production costs and expansion of farming operations is likely to result - 6 - in an upward trend in the aggregate of personal and collateral loans to farm- ers. The need for many improvements and replacements of a semi-permanent nature, deferred during the depression years of lew income, will "be a factor contributing to increased demand for credit from farmers. In the months im- mediately ahead there will probably be an appreciable demand for loans for feeder and stocker purchases. The supply of feedstuff's in 1937 is larger than in any recent year, and with the ratio between feed costs and fat-cattle prices more favorable to feedstuffs, there will be a strong inducement to in- crease the number of cattle on feed. It is probable that personal and collateral loans to farmers by banks in the Southern States will not show the usual seasonal decrease during the closing months of 1937 because of the loan program of the Commodity Credit Corporation. As during the last half of 193^ ■ it nay be expected that the relationship between current market prices for cotton and the amount per pound which will be loaned by the Commodity Credit Corporation will lead to a large volume of cotton being placed under the cotton-loan pla ... Loans made to finance the growing of cotton will then be replaced, to a large extent, by loans secured by wareho\ised cotton. At the end of 193' + ' largely as a result of the loan programs of the Commodity Credit Corporation, loans secured by warehouse receipts, bills of lading, etc., including Commodity Credit Corpo- ration loans, constituted -1.6 percent of the total personal and collateral loans to farmers held by commercial banks in the South Atlantic States, hf .6 percent of such loans in the East South-Central States, and 28 percent in the West South-Central States. The extent to which country banks expand loans under this program will influence the amount of the usual seasonal increase in balances held with banks in the larger cities, or in investment holdings, or both- If loans of this type are expanded appreciably, there will be a correspondingly smaller decrease in the inflow of funds from urban centers during the marketing season. This type of financing will like^isr- reduce, to some extent, the demand that would otherwise prevail in the larger commercial centers for loans to finance the storage of cotton. As these loans can be sold to the Commodity Credit Corporation at any time before July 1, 193^ at par and ac- crued interest at 2\ percent, such loans can be disposed of during the first half of next year as funds are needed by country banks to meet the usual out- flow of funds from cotton-growing sections. The cotton-loan program, as announced by the Commodity Credit Corpora- tion, provides for the making of loans to producers of the 1937 crop on the basis of 9 cents per pound on cotton classing 7/8-inch Middling cotton, or better; 8 cents per pound on cotton classing 13/l6 inch in staple, and Middling or better in grade; ~[\ cents per pound on cotton classing 7/3 inch as to staple but under Middling as to grade. The requirements also, stipulate that no loan will be made on 7/3-inch cotton or better in staple which is of a grade not deliverable on contract under the regulations of the New York and New Orleans cotton exchanges, and no loans - r ill be made on 13/l6-inch cotton under Middling grade. Consideration is also being given to the advisability of conducting a corn-loan program with respect to the 1937 corn cr _ The policy of the Ad- ministration concerning such a loan program will be determined at approxi- mately the time the corn crop of the Corn Belt starts moving to market. If - 7 - country "banks should add any appreciable volume of such loans to their port- folios, such increases in loans would roughly coincide with the usual season-' al increase in loans- of banks in the Corn Belt. Loans en Farm Real Estate Loans of commercial banks secured by farm real estate increased J,.h percent in the first half of 1937 , from $1+87,53^,000 to $50U, 138,000. Al- though a part of this increase represented a seasonal increase in such loans in some of the Southern and Western States, it was nevertheless the largest 6-month increase in any recent year. Increases in such loans were shown in all geographic divisions except in the New England, West South-Central, and Pacific States. The largest increase was in the North Central States, con- tinuing the upward trend that has prevailed in these States since 193^ • Table 5 shows the distribution of farm real estate held by commercial banks, by States and geographic divisions, on December 31 > 1935 • June 30, 193^, December 31 , 1936, and June 30, 1937- (Table 5.) Of all the principal lending agencies, only commercial banks, as shown in table b, increased farm real estate loans during the first half of 1937* Although the Federal land banks and Land Bank Commissioner closed loans in the amount of $59 » 9^+9 . S5S during the first half of 1937- repayments and re- ductions through foreclosures more than offset the new volume of loans, re- sulting in a net reduction of $l8,OHl,000 in outstanding mortgage loans dur- ing this period. Table 6. — Outstanding farm- mortgage loans of leading lending agencies, Janu- ary 1, 1929-37 Period Federal .' land Danks and ! Land Bank ' Commissioner • y Life insurance companies Commercial : "banks Joint stock land "banks Three State credit agencies 1929 1930 1931 1932 1933 1934 1935 1936 1937 1937 Uug. 1 .' 1,000 dollars ...: 1,183,164 ...: 1,185,765 ..,; 1.175.832 ..,! 1.151.659 ...: 1,105,§10 . ..: 1,273,881 . . . : 2 , 501 , 824 ...: 2,853,96b . ..: 2,888,912 ) .: 2,867,406 1,000 dollars 2,138,980 2,105,477 2,0^9,221 2,007,361 l,869,l60 1,661,046 1,258,900 1,054,770 . §3b,454 4/ 894,759 1,000 dollars Jj 945.172 37 555.885 499,251 487.505 , 487,534 ll 504,138 1,000 dollars 656,516 626,§80 590,011 536,644 459.183 392,438 255,931 175-677 133.499 113,234 1,000 dollars 95,906 93,274 92,698 93.014 84,075 79,574 62, 28b 48,091 , 32,657 27 i 3j June 30. 4/ Estimated. 1/ Excluding Puerto Rico. £j Data unavailable . Following 1933) the emergency refinancing program of the Farm Credit Administration was an important factor tending to reduce the outstanding vol- ume of farm real estate loans held by commercial banks. This factor, as in- dicated in table 7. has decreased greatly in importance, the estimated amount of such loans being refinanced in the first half of 1937 amounting to only $5,512,000. 8 Table *>. —Loans secured by farm real estate held by Insured commercial banks for December 31 . 1935. June 30, 1936 . December 31, 1336. and June 30. 1937. by States and geographic divisions " XmbunV of" Increase" or" d"ecr ease" from State and ' geographic division : Dec- " l • 1935 . 1.000 dollars Maine New Hampshire Vermont Massachusetts Rhode Island . Connecticut .. New England New York New Jersey . . Pennsylvania Kiddle Atlantic Ohio Indiana Illinois Michigan Wisconsin East North-Central Minnesota Iowa Missouri North Dakota . .. South Dakota ... Nebraska Kansas West North-Central Delaware : Maryland : District of Columbia: Virginia : West Virginia : North Carolina : South Carol lna : Georgia : Florida : South Atlantic : Kentucky Tennessee Alabama Mississippi .... East South-Central Arkansas Louisiana Oklahoma Texas West South-Central Montana . . . Idaho Wyoming . . . Colorado . . New Mexico Arizona . . . Utah Nevada Mountain Washington Oregon California Pacific 1.627 651 11, u-- 1.587 253 i,3-;s 17.186 3.712 20,71_5_ Ul,bl3 32.U6U 18. 523 22,489 11,1*00 19.2U5 10U.121 1^.339 30.1*52 12,656 2.570 2.010 U.368 J. " 80, 2d3 3.U3 9.365 121 lU.936 M i!o5! 5.887 1.83U 1*5,506 1.151 i.OUl* 16.966 10,228 3.83^ 10, ^9 Ul , U87 M71 7.7^3 3.192 1M5 U 30,860 1.366 1.257. 2! 533 591 Zk8- 2.530 10 g 3.62U 2.350 109.986 ll^ibO UNITED STATES U87.505 June 30, 1936 1.000 dollars 1.52U 6l 8 10,1*58 1.367 2W* l.U H2 §- 16.73 1 * 3. 803 20,025 uo, 562 3U.0U3 18,017 22,117 10,892 18.939 10U.008 lU.288 3U.09U 18,602 2,1*65 2,051 5.16U 8.093 8^,757 2.976 9.376 108 15.325 M75 6.103 1,18k 6.U1U 1,681 17.728 10.358 i*,i30 10,052 s U.90U 6.990 3.321 lU ,527 . -2?,7 U 2 1.U92 1,205 1,081 2.569 565 1,068 2,611 282 10.873 U.727 2.28U 10,7,037 ,031 ?0U8 11U.048 1*89. 2UH Dec. 31, 1936 1.000 dollars 1.589 629 9.325 1,178 2U2 2.1U2 1 5,105 16,328 3.775 20 , 29U **o. 797 3^.U9l 17.798 22.31U 10.81*8 252_ ICh 10U , 810 1U.878 35.9U8 18,1*10 1.95 1 * 1.933 5.52U 8,571 87,218 2.951 9.^98 167 15.199 U.695 5.789 1.169 5.9U8 1,9 81 18.102 10.31U 1+.082 _8,5J9_ slip U.U13 6.535 3.331 1 3, ^ 27.813 1.311 1,170 1.073 2.331 527 1.059 2,621 21*0 10,332 3.657 2.250 107.078 112,985 1*87. 51k June 30. 1937 1.000 dollars 1.587 613 9.01*0 LI65 253 1,1*18 1U.076 15.827 3.66U 22.58U ■*2,075 36,961 19. W3 23.15& 11. 380 19. 6 58 116, 5iF 15.827 39.875 18,803 1,856 1.991 6,230 93.816 2.858 9.529 118 15.782 U.51U 7.016 1.583 7.275 i,9 lfr gois s a 18,1*1*6 10.61*1* U.506 ,9,187 ^,7 *3 t.695 6,605 3.W*6 13.0^9 27,79 5 1.263 1.209 1.177 2.U06 U! 2.785 230 io.5°3 3.772 2.335 105.718 111,825 50 1*, 133 June 30, 1936 to June 30. 1937 1.000 dollars - 1 63 , 5 1*18 202 9 15- - 1,5 68 - 907 - 139 ♦ 2,552. 1,5 1 3 2.918 1.UU6 1.037 1*88 6,608 1.539 5.781 201 609 60 1.066 ■l.lUl ?.^ c ? 118 153 10 "»57 339 913 399 861 _233_ JL2 r 2 - 718 286 376 865 _5I5_ Dec. 31, 1936 to June 30. 1937 1,000 dcllars 2 - 16 - 285 - 13 ♦ 11 721* 209 385 125 i,\7 8 229 U 96 163 7 207 17U 8 J12. 955 51 1J12_ 2.??' «-ll*,89U - 1.029 501 111 Lgag. 33ZL 2.U70 1.665 8U0 532 5,806 ♦ 9>*9 ♦ 3.927 ♦ 393 - 98 ♦ 58 ♦ 706 663 H521 93 : § ♦ 583 - 181 ♦ 1.227 ♦ UlU ♦ 1.327 JiL ♦ 3.192 31*1* 330 U21+ 208 1,."-- 282 70 115 18 1*8 39 10U 75 198 16U J5P_ .251: 115 f 5 - 1,160 •■l6,6oU Table 7. — Loans closed by Federal ? and "banks and Land Bank Commis-sione'r , and estimated use of loan proceeds to refinance farm real estate loans held by comrercial banks Period Total amount of loans closed Esti.aat.ed amount used to refinance farm real estate loans held by commercial banks 1933 Dollars 222.336,823 1,283,181,7% 443,479,449 185,488,695 59,664,858 Dollars 41,811,000 229 690 000 1934 1935 b? 53I 000 19% 19,907,000 5,512,000 1937 (Jan. -June), Totals : 2,194,211,581 359,451,000 Short - t erm Loans from Federally Sponsored Agencies Short-term leans cf a character similar to those made by commercial banks held by Federally sponsored credit agencies were at approximately the same level on June JO , 1937 as a year earlier. As indicated in figure 2, loans of this type, until 1937- have been declining slishtly each year since 193^. This series of loans (which excludes emergency drought, rehabilitation, and seed loans) now largely reflects the loaning activities of the production credit associations. Changes during the last year in the outstanding loans of each of the three tyres of advances included in this series are shewn in table g. It will be seen that the reduction in loans of the regional agricul- tural credit corporations and of "other financing institutions"- has been more than offset by the increase in loans by the production credit associations. Table 9 shows a comparison between the volume of personal and collat- eral loans of commercial banks and those of a similar character held by Fed- erally sponsored credit agencies. Loans held by Federally sponsored agencies which have a relatively marked seasonal variation, increased 3^" percent dur- ing the first 6 months of 1937 a s compared with an increase of 22 percent in personal and collateral leans of commercial banks. Tablo -"-Out s \ §?d i ng_ she r t - 1 e r m _1 c an s _ t o__ _f ar me r_s_ Month and year December 31 , 1920 December 31, 1923 June 30 , 1931 December 31 , I934 June s0 , I936 December 31, 1936 June 30, 1937 Commercial banks ' _- I70C0"aoTIars~~ 2,943,818 l '?o I ~ 661^606 593,614 726,400 Federally sponsored credit agencies \J "1,000 dollars" 9,105 79,20b 203 , 626 229 , 506 171-.517 230 , 302 Total 1.000 dollar? 3,869,891 2,952,923 2,015,5^ 1,011,239 891,112 7b5,131 956,702 1/ This series includes short-term loans similar in character to those made by commer- cial banks , excluding emergency drought, rehabilitation, and seed loans. Types cf loan? incited are Federal intermediate credit bank loans to, and discounts for, "other finan- cing institutions", regional agricultural credit corporation loans, and production credit £.Soocig,t Loa loans . 10 200 150 100 50 U S DEPARTMENT OF AGRICULTURE NEG 3214S BUREAU OF AGRICULTURAL ECONOMICS Table 8. — Short-term loans from Federally sponsored agencies, June 30, 193b- 1937 Agency ; June 30,1936 June 30,1937 : Increase or : decrease ,1,000 dollars ! 1,000 dollars : 1.000 dollar Production credit associations . Regional agricultural credit 139 ,.468 36,026 ! 54,012 : 160,051 22, 9H i 47,337 : +20,583 -13,112 Federal intermediate credit bank; loans to and discounts for ! other financing institutions - 6,675 Total i : 229,506 : : 230,302 ! + 796 - 11 - D eman d Deposits of Country Banks Demand deposits of country "banks, except for seasonal variations, have continued the steady upward trend that has prevailed since early 1933- The increase has "been most rapid in the Corn Belt States, where deposits in July 1937 were 16.7 percent higher than the 1924-29 ^ monthly average. In 20 of the leading agricultural States, demand deposits in July 1937 were 6 percent higher than a year ago. (Figs. 3 and 4.) With agricultural income estimated at about $9,000,000,000 in 1937, compared with $7,365,000,000 in 1936, and with a more even distribution of such income, it may be e:rnected that deposits will show a further increase. As compared with the past year, however, there will he some variations in the seasonal flow of income which will affect the movement of demand deposits in country hanks. In 193^ the drought and shortage of feed crops brought about a larger proportio?i of livestock marketings before the beginning of 1937 than is ordinarily the case. With more abundant feed supplies this season, live- stock marketings in the first part of 193S are likely to be larger than in the corresponding period of 1937- Income from Government payments in 1933, including those to cotton producers in connection with the 1937 crop, nay he somewhat greater than in 1937- Disbursements under the 1937 Agricultural Conservation Program may reach a total of $440,000,000. It is expected that between 5 and 10 percent of these payments will be made during the last 2 months of this year, with the bulk of payments being disbursed to farmers in the first quarter of 193&- It is estimated that the number of grants to be made under this program may exceed 4,100 ,000. Under the cotton price-adjustment -payment plan, announced on August 30 > 1937> the Secretary of Agriculture is authorized to use not to exceed $130,000,000 for payment to cotton producers who show proof of compliance with a 1933 agricultural program to be formulated under legislation to be en- acted pursuant to Senate Joint Resolution 207, an Tj. Department of Agriculture, Demand Deposits of Country Banks. 1937 • 12 3d S"£ s- a - • u.-d o ■ - a ► i o x: o S. • i ^-."fr* •£ w — " 9 *• •*« re c • •gi° .«,-'""• u «ccu — « — t "-" >• ■ • B e~ « . _ "8 e « >>1 S *" H C >>h h O ■ m Jo; • 5 «j o u at -a~< o «. • a o 3 k * — i -- t » *- u • q ; 9.9 S 8.75 ! I B • — -■ ,»J IX C • T3 O •£ -" # *"~ •*- ; - ■ >- a » v • g- J iio».„ ~* m »~ -* •« **c*a k, c • c k -a c - 2 l, • •pi: •- o.- -> a ° 9 !■ a*» +» u *» ■ a • ^••a-ea-c in z o a UJ ae ► • M i: 2 < ae UJ B 2 Ul 2 It n H X 0, LJ G a z < 2 III a -: -j J ' ^W,,^ VI Ul " »- < »- f * «^ i sf — 1 °* ^^^^ \ H (ft 111 < -j in -1 Ul a z O o'j J m - il 4 11 1 | . Hi 2 • 5 2 1 O J is -i Q J : ^ 3= ' 7 ^ 32 -■ 1/ * ; "^ A ' < - s i/i Ul 1- < 1- N K \ 1 13 Z < ■ 02 O Mi ^^ f ^9$ '= O . O hi N O 1 31* - lU-i iis-i • sS-j • o « c ■ 00 . -• a • -a j3 -^ 1- So ** ** 5.- 5 I" u C • U.-o • P • c ^ • — 1 •• • _, 0.00 ■ ■ • ■ -* o — •a, " S °°- S>^ • e ^ 5 c -"^ • ► « u. c " 3 h • -1 O-O j • B ^4 kH^H- - 13 - Table 10. — Demand deposits of Country banks (Index 1924- 29 = 100) 1/ 1924 to date : Twenty leading Year : agricultural States 2/ : Seven : Eight : Eight and :1011th ' Unadjusted Adjusted Tor \ seasonal variations : Corn Belt : States 3/ : cotton-growing : States hj : range ; States ^J 1924 ': 96.6 • 100.1 ! 98.3 ' 96.1 1925 : 102.1 : 103.1 : 105.2 : 9b. 5 192b : 101.6 ! 102.3 : 104.7 98.9 1927 1928 i 99-0 1 101.7 l Th b : 99.7 : 100 . 1 98.7 ; 106 '.h 1929 ! 99-0 : 97-2 s 93-0 : 103.6 1930 ; 89.4 90.7 77.2 91.3 1031 ' 75-4 78.I 59-6 76.2 1932 : m 59.6 41.8 54-2 1933 48.8 41.4 4o.3 rl 63.9 1934 bb.O , 70.7 r, 59-1 1935 193b i 6/ $/ 6/ §/ 97-b~ 106.9 - 94-7 101.3 193b January . . 90.9 1 89.3 9§-? 91.2 98.8 February - . 91.1 89-b 93.6 §9-1 96.8 March . . . . : 91.5 90.7 160.2 §9-4 96.8 April . . . . : 92.0 : 92.1 : 101.2 88.4 9°-3 May : 92-4 ! 9^-7 ; 102.2 86.5 96.9 June : 94.0 : 104.2 86.4 97-8 July : 99-1 : 101.8 : 109.7 i 89.7 100.7 August . . . : 100. b : 103.2 : 112.5 90.1 99-9 Sept ember : 102.5 : 102.9 113.3 96.8 102.4 October . . : 104.5 : 10b. 1 : 102.6 ; 113.1 105.6 105.7 November . : 103.9 : 114.1 111.2 109.4 113.6 December . : IO6.5 : 105.0 115.2 111.6 : 1937 i January . . : 106.8 i 104.9 ; 115.0 1 112.5 ! 111.0 February . : 10b. 1 : IO4.6 : 114-7 : 111.3 109.5 Mar<~h . . . . : 105.4 : 104-5 « 115.0 : 110.0 108.8 April : IO5.8 : IO5.9 i 115.7 II5.6 107 . 8 108.8 May : 104.6 : 106 . 1 : 104.2 109.1 June : 104-2 : 106.8 : 115.9 99-6 9b. 9 i IO8.9 July : IO5.4 : IO8.1 : lib. 7 ; IO7.9 August . . . : IO0.3 : 109 .0 : 117.8 I16.9 : 97-1 108.1 September : 106. b : 107.0 : 100.4 i 109.8 1/ Based upon data reported by member banks of the Federal Reserve System located in planes of less than 15,000 population (population classification of 1930 Census). Each deposit series is weighted, the deposits for each State having b«en given a weight equal to the proportion, in the base period, of that State's cash farm income to the total cash farm income of the group of States. 2/ Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Mississippi, Missouri, Nebraska., New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, and Wisconsin. 3/ Ohio, Indiana, Illinois, Minnesota, Missouri , Nebraska, and Iowa. _4/ North Carolina, South Carolina, Georgia, Alabama, Mississippi, Arkansas, Louisiana, and Oklahoma. ^J Montana, Colorado, Arizona, Idaho, Nevada, New Mexico, Utah, and Wyoming. 6/ Five months of 1935 are unavailable. UNIVERSITY OF FLORIDA 3 1262 08921 4893