Every city naturally produces things at the beginning of every turn. This includes popping units and rations, along with producing Shmuckers through means such as farming and mining. The Shmuckers produced go into the treasury automatically, and the upkeep of units (including rations) are automatically deducted from the treasury.
The larger the city, the greater the production.
Production (availability and speed/amount) will vary depending on the surrounding terrain.