Supplementary report on agricultural credit developments relating to commercial banks

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Supplementary report on agricultural credit developments relating to commercial banks
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Wall, Norman J
United States -- Dept. of Agriculture
United States -- Bureau of Agricultural Economics
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UNITED STATES DEPARTMENT OF AGRICULTURE
Bureau of Agricultural Economics













RELATING TO COMMERCIAL BANKS
.By Norman J. Wall, Senior Agricultural Economist
L^ U.2EPOSITORYJ______




I
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 cf commercial banks for December
31, 1936 and June 30, 1937 are based unon official reports of the
Comptroller of the Currency, Federal Deposit Insurarnce Corporation,
and the Board of Governors of the Federal F.eserve System. Data for
earlier periods are based in part in such report-' 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 the Federal Reserve Sys-
toem. Inde:es of '-uzh denpsits series are compiled by the Bureau af
Agricultural ECOi,.T.mics.

This report supplements and carries forward data contained
in the foil owing:

Technical Bulletin No. 521, Agricultural Loans nf Omnercial
Banks (July 1936).

Mimeographed report, Recent Agricultural Credit Developments
Relating tr Commercial Banks (February 1937).

Mirmeographed release, Agricultural.Leans of Crmmercial Banks
Show Further Decline (June 25, 1937).

* Technical Bulletin No. 575, Demind Deposits of Country Banks
(August 1937).

'Credit for the pre-oaration and checking nf statistical data
in thi-s report is due t^ Mrs. Lucy R. Hudson and Mrs. Celia S. Bryan.









SUPPLSEM1ENTARY REPORT ON
AGRICULTURAL CRXIT DZVELOPWN'TS RELATING TO COM5CIAL BANKS






By Norman J. Wall, Senior Agricultural Economist






Agricultural loans of commercial banks, reflecting in part a seasonal
expansion, increased 14U 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,.14,000 to $726,400,O00, an
increase of 22 percent. Louans on farm rnal estate increased from $487,534,000
to $50o4,138,000, an increase of only 3 percent. Loans of the latter type
have shown but little change during the last 3 years.

Loans by alU three types of banks increased during this 6-month period,
the largest percentage increase being shown for nonmember banks (table 1).


Table 1.-Agricultural loans of insured commercial banks, by type of bank, on
Eliven dates
-^ .Nonmermber. State : N n A b
----------------------- National :--
Type oi l3an and date State member an : All banks
banks banks
----------------------------------------------- ----------------.------
... ... ... .. ],000 1,000 : 1,000 1,000
dollars: dollars dollars dollars
Personal and collateral loans:
Dec. 31, 1934 .................. : 334,81g : 59,1l45 : 413,650 : 807,613
June 30, 1936 .................: 210,992 : 49,32'3 : 371,291 o61,606
Dec. 31, 1936 ..................: 211,477 : 52,196 329,941 : 593,614
June 30, 137 ..................: 266,6514 61,40 : 39S,343 : 726,400
Loans secured by farm real estate: :
Dec. 31, 1934 ................. : 237,015 : 43,384 : 218,443 : 498,8g42
June 30, 193 .................. : 233,083 : 45,357 : 210,299 : 489,244
Dec. 31, 1136 .................. 229,J07 47,4o0 210,819 : 487,534
June 30, ]-37 ..................: 239,633 : 49,48ss : 215,017 : 504,138
Total agricultural loans:
Dec. 31, 1934 .................. 571,833 : 102,529 : 632,093 :1,306,455
June 30, 1936 ................. : L74,080 : 95,180 : 581,5qO :1,150,850
Dec. 31, 1936 .................. : 440,784 : 99,60o4 : 540,760 :1,01s,148
June 30, 1937 ..................: 506,287 : 110,891 : 6l3,36o :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-
grcwing States outstanding personal and collateral loans to farmers rose from
$109,719,000 at the end of 1936 to $180,084,000 on June 30, 1937, an increase
nf 64+ percent. This compares with an increase nf 11 percent for all other
sections nf the country combined.

Increases in outstanding personal and collateral loans to farmers 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 COlo-
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 30, 1937 rere about 10 percent higher. Increases
were shown in all geographic divisions except in the New England and Middle
Atlantic States. In these two groups of States, agricultural leans, except
for seasonal increases, appear to be continuing the downward trend that has
characterized the last several years. Tablea 2 shows the distribution of per-
sonal and collateral lnans by States and gec':raphic divisions on December 31,
1934, June 30, 1936, Derember 31, 17.6, and June 30, 1937. (Table 2, p.3)

For the country as a whole, it appears that the downward trend in per-
sonal and collateral loans to farriers which was, for the most part, charac-
teristic of the entire period since 1920, has come to an end. Prier to 1933,
the volume of personal and collateral loans to farmers held by commercial
banks follcred, in a general 'vay, the trend of prices received by farmers
(fig. 1). In the period follo!-inc the upturn in farm commodity prices in
early 1933 until the end of 1936, there was a divergenre in the trend of
these two series. Although the index of prices received by farmers increased
25 percent frcm the end of 193h1 to the end of 1936, personal and collateral
loans to farmers decreased 26 percent during this period. The divergence in
trend during these years represerts largely the repayment and refinancing of
carry-over loans in amounts relatively greater than the net increase in new
loans. (Fig. 1 and table 3.)


Table 3.--Agricultural loans rf commercial banks in stated years I/
----------------------------------~-------------
~ Personal and' Total
Year :Loans secured by collateral loans agricultural
:farm real estate : t a l
to farmers loans
7,C00 dollarss 1.000 dollars 1,000 dollars

q1920 .............. : i.,447,4s3 3,869,s91 5,317,374
1923 .............. : ..,3gs,106 21,943,S18 4,331.924
1931 (June) ....... : 9q45,172 1,936,360 2,831,532
1934 ...... ...... : 498,s4? 807,613 1,306,455
1936 (June) 42....... ,244 661,66 1,150,850
1936 h.......: 487,3 5q3,614h 1,01,148
l137 (June) ....... 50-4.139 726,400 1,230,538

j/ Based. upon -data reported by the various supervisory banking agencies and upon vari-
ous surveys eonductsei by the Depiartment of Agrirulture; data relate to the end. of year ex-
rept for the midyear irAivatd. for 1931, 193b, and 1937.







3

Table 2.--Personal and collateral loans to farmers held by Insured commercial banks, for December 31. 19314. Junem 30,1936.
December 31. 1936. and June 30. 1937, by States and geographic divisions
---------------------------------------------------------------------------------------------------------------
...............................Aount of increase or decrease
from
State and ---------------
geo.c vision :. Dec. 31. 934 Jim. 30. 1936 Dec. 31. 1936 June 30. 1937 June 30, 1936 Dec. 31, 1936
geographic division to : to
June 30, 1937 June 30, 1937
------------------------------------ ----------------------: ue3,13 ue3.13
....... ... 1.00..olr 1-dollar. 1odollar. 1 dollars 1,000 dollars 1.00 dollars

Maine ................ 2.269 : 1.652 1.696 : 1.219 33 477
Neow ampshire ....... 1.136 500 503 505 + 5 + 2
Vermont ............ .3.3-." 2.375 : 1.812 2,412 + 37 + 600
Massachusetts ....... 2.028 1,510 l.73 : 1.377 133 96
Rhode Island ........ 397 289 117 124 165 + 7
Connecticut ......... 2.14 55 480 : 821.. :_+l I ,, + 27
No England ............. 11.291 ,1 6.0i i : 6.45 ..: 4 + 377
New York ............. 26.032 23.164 19.310 22.26 896 + 2,958
New Jersey ..........: 8.211 9,103 4.052 5.776 3,327 + 1,2z4
Pennsylvania ........ 09.01 19.037 :I/ 15.286 : 15.955 +- ,02 + 669
Middle Atlantic ........ 5,0 6,4W 38.648 : .999 ,-70 : 5.,391
Ohio ................ 24.946 16,276 : 15.0 17.598 + 1,322 : 2,158
Indiana .............. 22,788 15.460 1,009 16.6 986 : + 2,437
Illitnois ............: 42.770 : 38.108 : 38.867 40.378 + 2.270 + 1.511
Michigan ............ 8.979 7.145 : 7,795 9,508 + 2,363 + 1,713
Wisconsin ........... 21797 1853 : 13,.009 14.627 .+ I*- 1 6lS
hst North-Central .....: 121.280 9:2 89,120 98,557 + 7,7155 + 9437 --
Minnesota ......... 32,353 32.137 30,r866 33,876 + 1,739 : 3,010
Iow ................: -0.551 : 1.871 11.611 ,.9s6 + 3 ,115 : + 3,375
Missouri ............ 314.517 31.978 30 .97 37,532 + 5,5514 6.935
North Dakota .......... 8.736 : 9.177 S".36 8,S16 361 + 380
South Dakota ........ 12.660 14,501 13.394 13.371 : 1.130 23
Nebras ............: 32.219 36 ,895 3 462 37.501 : + 606 + 3,039
Kansas ..............." 27.31 31.146 35.1+ 4,0_..
West North-Central 2 5..... ..7 200,295 190,512 211.236 10,ll +20,721t
Delaware ............ : 1,938 76 597 49 -337 19
Maryland ............ : 7,84 3.303 3,054 2.8 09- 9 25
District of Columbia : 1 ............... 1 0 : + 1
Virginia ............: 19,952 9,332 8,221 : 10,112 + 780 + 1.891
West Virginia .......: 6,113 : 2,063 : 1.408 2,3014 + 241 : + 896
North Carolina ...... 114,150 5.1,45 .2,503 8,116 + 2.631 : .613
South Carolina ......: 12.896 3.792 : 1.073 5.383 + 1,591 + ,.310
Georgia .............. 32,847 : 10,297 : 6360 : 13.686 + 3.389 + 7.,326
Florida .............. 2.92,5 1,389 1,775 : 1,963 + 74 + i 1
South Atlantic ......... 98,698 "l Z,.. 24.991 44:823 .+ 8.375 : +19M832
Kentucky ............ : 23,566 : 10,190 9.264 91,442 7- 71" : + 178
Tennessee ........... : 26,642 : 9.668 1,934 : 10,613 +* 9 : 125679
Alabama............. 28,955 13.173 255 17.50 4,33 +11252
Mississlppi ......... 8, .72 7,94r 2/ 3,412 9.866 + 1,921 V 6,4r--
East South-Central ..... 7,891 O,97b 26.865 47,429 + 6..2 +20,563

Arkansas ............ 14 .562 8.513 4.239 : 10,025 1.512 + 5 ,86
Louisiana ...........: 5.962 3.637 : 2,052 : 4,724 + 1,087 : + 2,672
Oklahoma ............: 21,775 25.781 22.008 26,363 582 + 4,355
Texas ............... 69.171 69.176 53,.83 73.801 2 +19.918
West South-Central ..... 111.470_ 107.107 82.182 llu.913 7, 806 __+.2.7U____
Montana .............: 9,995 9,842 8,534 10,2814 + 2 : +1,750
Idaho ................ 6.760 8.426 8.817 9,36 + 950 + 5
Wyoming .............. 11,019 12,490 : 9.794 12.503 : + 13 + 7
Colorado ............ : 16.63 15.044 20,771 17.,O5 + 2,36 -3.366
Niew Mexico .......... : 3,12 ,.512 4.2B80 5.336 : 824 +1,056
Arlizona ............... 1,728 3.198 6,824 ,529 : + 1.331 2.295
Utah ................ : 8.505 5.217 9.297 8,232 : + 3,015 : 1,065
Nevada ..............7 767 981 919 152 6
Uoumtai ............... 58.497 _9,b9_ 69.299 "8.+ 9.148 -
Washington ..........: 10.49 8.988 : 8,338 10,5514 + 1.566 2.,216
Oregon .............. 7.19 8,515 7.667 8.,694 + 179 + 1.027
California ....... 47.908 50.76 912 1.094 +20.330 21.182
Pacific ........6........ 25,595 692 r 2917 90.342 22,075 +24:,25__
UTlCn STATES .......... 807.613 661.6o6 : 593.614 726.o00 : +64,7914 +132,786
. ..------------- ..-------------------------=-...........------ ------------ ---------------
Z=,=lud two trust ooafaames which do not accept deposits.
7{ baln d ow which a report wa not available.









PERSONAL AND COLLATERAL LOANS TO FARMERS
INDEX OF PRICES RECEIVED BY FARMERS
DOLLARS -- -- --- -- ---i--- ------
(MILLIONS) Index of prices 1_ 1
3.600 received by Personal and collateral

3.200 farmers loans to farmers held by
( 1910-14100) 10 commercial banks
2.800 -

2,400 k .%4 \

2.000 -- -_ /
/ \__-^
1.600 "-- "-- --

1.200 /-

800 -- --

400--._ _-

0 1 1 11


AND


PERCENT

200

180

160

140

120

*100

80

60

40

30


ILS.OPANTMENT OF AGICULTURE "M0 22I13 I URAU OF AGICULTURAL =MMI10
AGRICULTURAL LOANS SECURED BY FARM REAL
ESTATE AND INDEX OF LAND VALUES


DOLLARS
( MILLIONS)


1,400

1.200

1.000

800

600

400

200

0


1912 1915 1920 1925 1930 1935
LAST BAR INDICATES DATA FOR JUNE 1917: PRECEDING BAR, DECEMBER 51. 1916


PERCENT


180

160

140

120

100

80

60

40


11 S. DEPARTMENT OF AGRICULTURE


NEG. 29714 BUREAU OF AGRICULTURAL ECONOMICS


Frigr 1..--Volum of tbhe loans has bean influenced by level of prices re oive by f ,arers ad by level of fatr land
value. In 1914-20, amount of personal and collateral loans more then doubled; since 1920 there haa been oahp contrac-
tion. Jederally sponsored credit partly accounts for recent divergence between prices received by farmers and volume of
personal mad collateral loans held by commercial bank. Loan secured by farm, real estate showed their firt Increase
for sWeeral y.r between December 31, 1935 an June 30. 193b.







-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 on 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 l.ors7 co.i-
tinue to decren.se even after business recovery sets in. Loans of member
banks of the Federal Reserve System, v.s measured by weekly reporting member
banks in leading cities, did not show an upturn until ezrly in 1936, 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 hold by ccmnercia. 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 4--Loans closed by Federal land banks and Land Bqnik Commissioner, .and
estimated use of loan proceeds to refinancing personal and collateral loans
held by commercial banks

: Estimated amount used to
Period Total amount : refinance personal and
of loans closed / : collateral loans owed by
:farmers to commercial banks 1/
Dollars Dollars
1933 ............ 222,396,g23 36,473,000
1934 ............ 1,293,181,756 64,159,000
1935 ............ 443,479,449 21,730,000
1936 ............ 195,4gS,695r 7,453,000
1937 (Jan.-June) : 59,664,ggs :2,413,000

Total ......: 2,194,211,5g1 132,22S,000
j/ Excluding Puerto Rico.

With the liquidation of carry-over loans through refinancing and re-
payment from income largely completed in nost 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 semipermanent
nature, deferred during the depression years of low 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 feedstuffs 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 nrogr-mn of the Commodity Credit
Corporation. As during the last half of 1934, it may 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 bein, placed under the cotton-loan plan. Loans made
to finance tho rrowin,1 of cotton will then be replaced, to a large extent, by
loans secured by warehoused cotton. At the end of 19314, 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 51.6 percent of the total personal and collateral
loans to farmers held by commercial banks in the South Atlantic States, 47.6
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 th e marketing
season. This type of financing will likewise 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, 1933 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-
flovr of funds from cotton-grorin; 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 -er pound on cotton classing 13/16 inch in staple, and
Middling or better in grade; 7T- cents per pound on cotton classing 7/8 inch
as to staple but under Middling as to grade. The requirements also stipulate
that no loan will be made on 7/S-inch cotton or better in staple rhich is of
a grade not deliverable on contract under the regulations of the New York and
New Orleans cotton exchanges, and no loans -'ill be made on 13/16-inch cotton
under Middling grade.

Consideration is also being given to the advisability of conducting a
corn-loan nro;ram with respect to the 1937 corn crop. 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 senson-
al increase in loans of banks in the Corn Belt.

Loans on Farm Real Estate

Loans of commercial banks secured by farm real estate increased 3.4
percent in the first half of 1937, from $487,534,000 to $50)4,13g,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 ll-rth Central States, con-
tinuing the upward trend that has prevailed in these States since 1934.
Table 5 shows the distribution of farm real estate held by commercial banks,
by States and geographic divisions, on December 31, 1935, June 30, 1936,
December 31, 1936, and June 30, 1937. (Table 5.)

Of all the principal lending agencies, only ccminercial banks, as shown
in table b, increased farm real estate loans during the first h.lf of 1937.
Although the Federal land tanks and Land Bank Commissioner closed loans in
the amount of $59,949,g58 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 $18,041,000 in outstanding mortgage loans dur-
ing this period.


Table 6.--Outstanding farm-mortgage loans of leading lending agencies, Janu-
ary 1, 1929-37
Federal
: Land. Danks and: Life : -mo^^ : ^^ :.^b Three
land ank : aLn nife Commercial Joint stock Three
Period Land Bank insurance sn l State credit
Commi!s ioner companies agencies
-,------------ dollars iOoo dollars i,000 dollars 1,000 dollars :I,000 dollars
1929 .......... 1.183,164 : 2,138,980 / 2 656,516 95.906
1930 ......... 1,18,65 : 2,105,477 : : b2b,'98 9327;4
1931 .......... 1,175,o 2 : 2,059,221 3 945,172 590,1 ,92,698
1932 .......... 1,151,659 2.007, 361 53b,644 q3014
1933 ........... 1,i05,610io 1,869,110 459, 84,075
1934 ........... 1,273,881 : 1,661,046 555,885 392,43d 4957
1935: ........... 2,r1,82 1,258,900 34 9,251 255,31 22
193b ..........: 2, : 962 : 1,054,770 4 g7,50 1/5, 77 48,091
1937 ....... 2,88,912 33.454 487,534 133,499 32,657
1937 (Aug. 1) .: 2,867,40b : A/ 94,759 / 504,13 113,234 2
l Excluding Puerto Rico.
SData unavailable.
June 30.
Estimated.

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,o000o.







8

Table 5.--Loans secured by farm real estate held by insured oommrcial banki for December 31. 1935. June 30. 1936.
December 31. 1136 i. Junp 30. 1937, by State. and geographic division
---------------------------------------------- ------------------ -----------^j~Y y n~Se Wr" 'XeR6FdW8
: from
State end "0::'De"
geographic division Dec 1Q35 June 30. 1936 : Dec. 31. 1936 June 30. 1937 June 30, 1936 Dw. 31t 1936
geo~~t tonhi ivso
:: June 30. 1937 : Je 30, 1937
----------------------------- --------------- --------------------------- _
.1,000 dollars 1.000 dollars 1.000 dollars 1,000 ollers 1.000 dollars. 1.000 dcllaru

Maine ...............: 1.627 1.24 : 1.589 1.587 63 2
New Hampehire ...... 651 : 618 629 613 5 16
Vermnont ............." 11.45 : 10,458 9.325 9.040 1,4118 285
Masseeachusetts ......: 1.557 1.367 : 1.178 1,165 : 202 13
Rhode Island ....... : 23 2.4 : 242 253 9 11
Connecticut ........: 1.3 :.- 1,.433 : 2142 1.4l8- -- 1 .-_2
le En gland ............ 16.91 15.61 : 15.105 1406 : .W 1,029
Noe York ...........: 17.lSb : 16.7314 16.328 15,827 907 : 501
Noe Jersey .........: 3.712 : 3.803 3. 77 3.664 139 111
Pennsylvania .......' 20,15 20.025 20.294 .22,84 544 2.59 2,g9
Middle Atlantic ........ .-4l.bl3 40.562 : 10.397 : 42.07 1.513 4 1,b[To_
Ohio ................ 32.464 314.043 341-491 36 1 2,s2i
Indiana ............ 18.523 : 18.017 17,798 19,t + 1, 1:.5
Illinois ............. 22 ,89 22,117 : 22,314 : 23.151 : 1.037 : 0
Michigan ...........: 11.400 10,892 : 10.8 8 11,380 : 488 : 532
Wlisconsin ........... 19.245 1.939 .12.359 -.19.65s8 ..1.....:9
last North-Central ....: 104.121 .10400 104810 110.616 :- 6.60 58,-
Minnesota .......... 1,339 : 11. 288 : 14,878 : 15.827 : 1.539 949
Iowa ................ 530452 34.094 35.948 39.875 5,781 + 3,927
Missouri ........... 1s,656 : 18.602 8.1810 18.803 201 : 393
North Dakota .......: 2.570 2.465 : 1.951 : 1,856 609 98
South Dakota ....... 2.010 : 2,051 1,933 1.991 60 : 58
Nebraska ...........: 4.36 : 5,1641 5.52 6,230 1.o66 : 706
Kansas ..............: 7.868 8.093. 8T.51 9,234 .12111 +" 66--
Vest North-Central .....;- 47 87.218 N8 9,059 b39
Delaware ............ 3,113 : 2,.976 : 2,951 2.858 118 : 93
Maryland ........... : 9.365 : 9.376 : 9,498 9,529 153 +
District of Columbia: 121 108 : 167 118 : 10 :
Virginia ........... 14.936 : 15.325 15.199 15.782 457 : 53
West Virginia ........ 41.151 4,: 1175 : .695 5: +.5 339 11
North Carolina .....: 5.044 : 6.10 : 5.789 : 7,016 913 2 1.227
South Carolina .....: 1,055 : 1.1 1.169 : 1.583 : + 399 14
Oeorgla ............ 5 .5.887 6,.414 : 5,948 7.275 : + 1.327
Florida ............ 1 5431 : 1.681 1.98. 1 1,91 .1 233 67
South Atlantic ........ 45:,5.506 42 47397 50.589 503.27 3,192
Kentucky ........... 16.966 17.728 18.102 : 18,6 78 Ti 344
Tennesseee ..........: 10,228 10,358 10.311 : 10O.644 286 : *
Alabams ............ 3.83 4.130 4,082 : 4.506 376 : *
Mississippi ........: 10,59 10,052 : 8.979 : 9,187-- 5- -* : -
East South-Central .... 41,47 -- 2.268 : 1,41:77 : 42,73 5"15 1, ME
Arkansas ...........4: .971 4.90 : 4-413 4.695 : 209 + 282
Louisiana .......... .7,743 : 6.990 6.535 6.605 385 : 70
Oklahoma ........... 3,192 : 3.321 3.331 3.6 3 125 115
Teas ..............: 14,954. 1 1.527 13,534 13,049 1.-418 4-
West South-Central .... 30,360 872 08 27,813 '27,795 1,947 : 18
Montana ............: 1,366 1.492 : 1,311 1.263 229 4B
Idaho.............. 1.257 1.205 1.170 1.209 + : 3
Wyoming ............ 1.3 46 1.081 1,073 1.177 : 96 : 104
Colorado ............ 2.533 : 2.569 : 2.331 2.106 163 : 75
New Mexico ......... 591 565 527 572 7 t 45
Arizona ............: 84: l,: 1o68 : 1,059 861 207 -18
Utah ...............: 2.530 : 2,611 2.621 2.785 i74 2 1
Nevada ............. .. 273 : 29 240 290 8 :s.-S_-
Mountain .............. 10 7 10,.873 : 10.332 10.3 23--: 1
Washington ......... 3.624 : 14,727 : 3.657 3.772 955 115
Oregon .............. 2.350 2,281 : 2,250 2.335 : 51 : 5
Califtbrnia ......... 109.986 j107.037 : 107.078 : 105T.718- 1,29 4-4 2
Pacific ................ llr_9_b0 : 114,01 : 112.985 111.825 : 2.223 : 1.,1b0
UNITED STA2ES ..........: 487.505 : 489.24 : 487,534 : 504,138 .114,894 : *+16,6o4









Table 7.--Loans closed by Flderal ?and banks a d Land Banlk Commisioner, and
estimated use of loan proceeds to refinance farm real estate loans
held by comrercia] banks
S Estimated amount used to
Period Total amount of loans closed refinance farm real estate loans
: held by commercial banick
---- -----.----- -- ------ -------------- ------------b1a-------
Dollars .o-l-ars
1933 ........... : 222.336,823 41 811,000
1934 ........... : 1,283, 11,75b 229,k & ,000
1935 ....53...... 443,04'44-9 "0b2 .000
193b 1,48,b9: 19,907,000
1937 (Jan.-June): 59,64,85"998 5,512,000
Totals .... 2,194,211,581 359,451,000


Short-term Loans from Federally Sponsored Agencies


Short-tern loans of a character similar to those made by commercial
banks held by Federally sponsored credit agencies were at arprorximately the
same level on June 30, 1937 as a year earlier. As indicated In figure 2,
loans of this type, until 1937. have been declining slightly each year since
1954.

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 leans
of each of the three tyres of advances included in this series are shown in
table 8.

It will be seen that the riuction in loans of the regional agricul-
tiural credit corporations and of "other financing institutions" has been more
than offset by the increase in loans by the production credit associations.

Table 9 shor7s a comparison between the volume of personal and collat-
eral loans nf commercial banks and those of a similar character held by Fed-
erally sponsored credit agencies. Loznrs held by Federally sponsored agencies
which have a relatively marked seasonal variation, increased 34' percent dur-
ing the first 6 months rf 1937 as compared with an increase of 22 percent in
personal and collateral loans of commercial banks.

_Tabin 2.--Outstanding short-term loans to farmers

Month and year : Commer-.ial banrks Federally sponsored Total
credit agencies 4j
- -----_- ^ ^ o -^ ^ g-- --------as" "" ^ 00 ol a ?" "
-OqO7oilars 1,_000 dollars
December 31, 1920 3,8;9,891 ....................... 3,3Aq,891
Df.lember 31, 1923 2,943,8l8 9,105 2,952,923
June 30, 1931 .... 6 .. 3b.,3 79,206 2,015,
December 31,.1934 : 07,6l 203,626 1,011,239
June 3O, 193b .... 66l6,60 229,506 ,891,12
December 31, 13936 : 593,614 171,517 7b5131
J'ne 30, 1937 .... 72 ,400 230,302 956,72

I/ This series includes short-term loans similar in character to those made by commer-
"ial banks, excluding emergency drought, rehabilitation, and seed loans. Types ,f loans
-Dnliided are Federal intermediate credit bank loans to, and disn.ounts for, "other finan-
cing institutionss, regional agricultural credit corporation loans, and productica credit
53sSo.it, ionri lr.ans.


























FIGURE 2


NEG 32146 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 dollars


Production credit associations .: 139,468 : 160,051 : *20,583
Regional agricultural credit
corporations ...............: 36,026 : 22,914 : -13,112
Federal intermediate credit bank: :
loans to and discounts for :
other financing institutions:
except cooperatives ........ : 54,012 : 47.337 6.675 .


229,506


: 230,302


+ 796


.1


200


150


100


50


0


US DEPARTMENT OF AGRICULTURE


Total .................. :


-7






- 11 -


Demand Dep^eits of Counmtry banks
Demand deposits of couz-try banks, except for seasonal variations, have
continued the steady upward trend that has prevailed since early 1933. The
increase has been most ranid in the Cor'i 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 $7,65,000.000 in 1936, and with a more even distribution of
such income, 4t may be e:xected that deposits will show a further increase.
As compared 1ith the past year, ho'-ever, there will be some variations in the
seasonal flow of income which will affect the movement of demand deposits in
country banks. In 1936 the drought !3nd shortage of feed crops brought about
a larger proportion of livestock markrtings before the beginning of 1937 than
is ordinarily the case. With noro abundant feed supplies this season, live-
stock ;.arketings in the first part of 193S are likely to be larger than in
the corresponding period of 1937.

Income from Government payments in 1935, including those to cotton
producers in connection with the 1937 crop, may be somewhat greater than in
1937. Disbursements under the 15937 Agricultura2. Conservation Program may
reach a total of $440o,Coo,ooO. It is expected that between 5 and 10 percent
of these payments will be made duriut the last 2 months of this year, with
the bulk of payments being disbursed to farmers in the first quarter of 1935,
It is estimated that the number of granits to be made under this program may
exceed 4,100,000.

Under the cotton price-adjustment-payment plan, announced on August30,
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 193S agricultural prcram to be formulated under legislation to be en-
acted pursuant to Senate Joint Resolution 207, and who sell cotton from the
1937 crop before July 1. 1939. The amount to be paid to such cotton prordu-
cers will be the difference between 12 cents a pound and the average price of
7/S-inch Middlin-; cotton on the 10 spot markets on the day of sale, but not
to exceed 3 cents a poutd. Payment will be made on 65 percent of a producer's
base production, unless such payments do not approximate the $130,000,000
appropriated, in which case payments will be made with respect to a larger
proportion of tho base production.

Data presenting annual and monthly averages of demand deposits of
country banks f'r 20 rf the. leading agricultural States and for 3 regional
groups of States are presented in t."ble .10 *1






./ Complete monthly data fnr these indexes are .vaila.lle in Terhniral Bulletin 575,
U. Department of Agriculture, Demand Deposits of Country Banks. 1937.











DEMAND DEPOSITS OF MEMBER BANKS* BY REGIONS

PEICENT | r r I 1 F


125



100


SLOCATED IN PLACES UNDER i.000 POPULATION IN OHIO.
INDIANA. ILLOIS. IOWA, MIHHESOTA. MISSOURI. AND HEAUIAS.A



194 2900 RANGE S TAT ES












'LOCATED IN PLACES UNDER 18,000 POPULATION
FN MONTANA, COLORADO AONA, IDAHO, NEVADA.
HEW MEXICO UTAH. AND WTOMIHO
. .lil.IIl.. ,1,1,1.,111-.,IJ~ .i J.. ,.I .' u ..., ,.I,.,... .. .,. .,


1923 0925 1927 1929 1931
A DATA HOTAVAILADLE
U I EPAMIT O, f "R0ICU5U l


1933 1935 1937

l. 11I $ Ia. 3Iit Of ADi A IILLTRftR I0"CoIIC


DEMAND DEPOSITS OF COUNTRY BANKS! FARM INCOME. PRICES
RECEIVED BY FARMERS. AND RURAL RETAIL SALES
PERCENT "--------
1924 Z9-100 DEMAND DEPOSITS AND
I I i FARM INCOME I


192 .. J. .J.... l....,..L ... 1925 1927 I...
1923 1925 1927 I


l.. Of-,M1


- T


1924 29.100


I.-
In I


I


- I -


CORN BE


LT STATES







13 -
Table 10.--Demand deposits of Aountry banks -i, 1924 to date
(index 1924- 29 = 100)
--------------------------------------------------------------------------
Twenty lending
Year agricultural States 2/ Seven Eight Eight
and :u--- -- Corn Belt cotton-growing range
S Unadjusted : esoal" States 3j/ Stateas 4/ States
___ sevariations:
.- -


1924
1925
192 :
l192
1929
1929
1930
1931
1932
1933
1934
1935 6/
193b

1936
January ..
February .
March ....:
April .... :
May ...... :
June.....
July .....
August ...:
September
October .
November
December

1937
January ..
February .
March ....
April ....
May ......
June.....
July.....
August ...
September


96.6
102.1
101.6
99.0
101.7
99.0

97.4
75-4
5* 4
96.0

97.;


90.9
91.1
91.5
92.0
92.4
94.0
99.1
100 .b
102.5
101.5
106.5


106.8
lOb106.1
105.4
105.8
104.4
104.2
105.4
100.3
1O6.


85
89.0
90.7
92.1


103.2
102.9
102 .
103.9
105.0


104o.9
104.5
O104.5
105.9
lOb. 1
106.8
108.31
109.0
107.0


6/


100.1
103.1
102.g
57.b
99.7
97.2
90.7
78.1

70.7
io6.9


98.2
98.6
100.2
101.2
102.2
104.2
109.7
112.5
113.3
113.1
114.1
115.2


ll5.o
114.7
115.o
115.7
115.
115.9
117.8
116.9


98.3
105.2
104.7
100.1
98.7
93.0
77.2
5 .6
41.8
41.4
59.1

94.7
94-7



8P:4
86.5
86.4
89.7
90.1
96.8
105.b
111.2
111.6


112.5
111.3
110.0
107.8
104.2
9,.6
9o.9
97.1
100.4


I/ 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 been 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 nf States.


2-/ Arkansas, Georgia,
Missouri, Nebraska, New
South Da-kota, Texas, ani


Illinois, Indiana, Iowa, Kansas, Michigan,
York, North Carolina, North Dakota, Ohio,
Wisconsin.


Minnesota, Mississippi,
Okluhoma, Pennsylvania,


3/ Ohio, Indiana, Illinois, Minnesota, Missouri, Nebraska, and lowa.


4/ North Carolina, South Carolina, Georgia, Alabama,
and Oklahoma.


Mississippi, Arkansas, Louisiana,


5/ Montana, Colorado, Arizona, Idaho, NCvaAa, New Mexico, Utah, and Wyoming.
6/ Five months of 1935 are unavailable.


9b.l1
96.1
9b .5
98.9
98.
l04:4
103.6
91.3
7b.2
54-7
40.8
93.9
101.3


98.8
96.8
96.8
96.3
9b.
97.-
10oo0.7
99.9
102.4
105.7
ilog
113.4


111.0
ioq.8
108.8
109.1
1o8.8
107.9
1o2.9
10 .1
109.8




UNIVERSITY OF FLORIDA
IIINI II1igIIIIII 111111111111II
3 1262 08921 4893



















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