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X-3106
FEDERAL RESERVE
BOARD
For Release in Morning Papers,
?1onda:,r, ;vray 2, 1921.
Tb.e follovving is a. review of general business
and fi1~cial coniitions throughout the several
Federal Reserve Districts during the month of
April, as contained in the fortncoming issue
of t~e Federal Reserve Bulletin.
Complete business recovery is proving to be slower than was predicted by many observers at the close of
of many tjat
too
t~e ye~r
1920.
The expectations
spring of 1921 ·•·ould see economic ani business read-
justment fairly completed have not been realized.
The month of April
bas, however, given evidence of the development of'an improved feeling
in many sections of the country with regard to the business situation
and outlook.
VJhile there is still much uncertainty as to when the re-
adjustment now in process may be expected to reach its end, and while
the business situation in some sections of the country
~1d
in some fielis
of industry is still beset with difficulties, some of the recent factors
of uncertainty are either being eliminated or are of diminishing importance.
Moreover, increasing ci.ppreciation of the nature of the readjust-
ment process in business circles and i.n the community at large is focusing
attention upon the factors t~t are delaying business recovery and is
promoting liscussion with a vie''" to removing obstacles and expediting
recovery.
The point upon ·:vhich the business si tua.tion has pivoted since the
recession movement began last autumn has been prices.
sale prices, which has been
contin~ous
The fall of whole•
and at times precipitate in re-
cent months (especially for the agricultural-raw materials group), appears
l
X-3106
-2-
to be in process of cirrest.
At a.ny rate, n0...-rq wholesale prices
nave shovin a greater degree of stability luring the month of April.
Prices of many basic
cou~odities
have
sb.o~vn,
both by general index
numbers and by reports from the several FGderal Reserve Districts,
less sensitiveness than during the precedinz month.
T~s
fact
is being recognized by buyers, wl:lo are showing an increasing disposition to rega.r1 present price levels as a satisfactory basis
for dealin§,s.
Among the factors tnat are retarding readjustment are retail prices, nigh tra.nsportatlv•1 charges, wages, and the relatively high prices of such highly important requisites of
production as coal and steel.
The
t::;.3t
at vib.ich the readj1,1stment process appears to be
retail price
t:r:::ed~ate
l:t.?<Jrt"•nt
11
poi:c.t
sticldns 11 is the
situatio~
Wage employment conditions were recently made the subject
of a special inquiry by the Federal Reserve Boc1rd.
Yifdle the
inquiry shows that labor is participating in the process of readjustment, tr.e participation bas been uneven as betvvee:l different
sections of
t~e
country, as between different lines of industry,
a.nl as between iifferent groups of
l~bor.
w~ge
readjustment has
been greater dlllong unskilled. v;orkers ani tJ::.ose not possessed. of
a. strong trade organization, anl especially in sections of tC..e
country
'N~ose
industries Ccive felt in a peculiarly high degree
the effects of readjustment.
.-;:·
X-3106
-3-
AGRICULTURE.
The agricultural situation during the month
may be characterized as @Bnerally favorable.
The unseasonable
cold wave which swept over the country about April 1st did some
injury to the spring wheat, but had very little effect upon the
winter wheat.
tha1~
Thus in District No. 11, (Dallas), it is stated
"reports from the wheat belt are generally satisfactory,
and indicate that the crop is in excellent condition", and in
Dis1;rict No. 8, (St. Louis), "little darrage was done to winter
wheat by the recent low temperature.
11
However, the cold wave
chec:ked the ravages from the pests which had been prominent
bec.e.use of the especially mild winter and very little further
trot~le
is contemplated-
The condition of winter wheat on April
1st as reported by the Bureau of Crop Estimates of the United
States
Depart~ent
of Agriculture, was 91.0 per cent as compared
with 75.6 per cent on the same date of 1920.
this report, it is
esti~ated
On the basis of
that there will be a very large
production nearing a banner year in winter wheat.
The estimated
production is 621,000,000 bushels as o! April 1st, 1921, against
577,763,000 bushels on April 1st, 1920, while the acreage for
1921 is 40,605,000 acres, as against 41,757,000 acres on April
1st, 1920.
The seeding of spring oats has been practically com-
pleted in most sections and a considerable amount is already up
and in good condition.
Corn planting has made good progress, es-
pecially in some of the southern sections, although it has been
dela;v·ed in others by the wet and cold weather.
In most sections
the germinating of the seed has been retarded either by the cold
or lack of moisture.
509
I
-4-
FRUIT.
The fruit throughout the fruit growing sections
suffered from the cold wave which was io) lowed by frost.
No. :.2, (San Francisco) states that
11
District
some damage is reported from
practically every fruit and grape growing area but reports indicate no serious reduction of prospective crops from this cause,"
and
District No. 10, (Kansas City) reports that '1 all fruits
were injured more or less by the belarted cold weather. n
The in-
jury appears more serious in District No. 11, (:Dallas) where "it
is believed fruit has been damaged at least 25. per cent and in
some sections even more.,"
COTT.QM·
Good progress has been rr.ade :in the planting of cot-
ton and in South Carolina, Georgia, AlabaT.a, and Mississippi, a
com:iderable amount is up to a good stand. . While the earlier reports indicated a very large reduction in the acreage, it is
now generally understood that the reduction will not be as great
as was previously indicated.
In District No. 11, (Dallas) it is
repC>rted that the decrease will be at least 25 per cent and as
much as 50 per cent in some sections.
Francisco) states that
ap!Jroximately
50
11
Dj.strict No. 12, (San
the acreage this season will be reduced
:per cent and much of it will be 'volunteer 1
cotton grown from last year•s plantings. However, District No.
6,
(Atlanta) reports that ttconservative estiros.tes place the reduction
in acreage compared with last year at from 10 to 20 per cent. n
The use of fertilizer has been considerably less than during previous years, being estimated at about one-fourth to one-third as
much as used a year ago •
•
-5-
•
TOilACCO.
X-3106
A1 though the leaf tobacco market has been dull through-
out the past month, the warehouse sc:JJ.es have been in a larger volume
than is usual at this season of the year.
This was probably due to
the fac·i tha.t sales during the previous months D.a.ve not been as large
as in n:>rma.l times.
However, the demand has been for the better grade
tobacco rather than the cheaper grades.
District No. 8, (St. Louis)
reports that "receipts of tobacco riave been fu.irly heavy and prices for
the better grades well maintained.
11
District No. 3, (Philadelphia)
states that "manufacturers are purchasing only such stocks as they actually need, and most of them nave sufficient supplies on hand for present
purposes.
11
The demand for high grade cig01rs has been in limited prop or-
tions, while the demand for cheaper cigars of a reasonably good quality
has been more pronounced.
Reports from this District indicate that al-
though the industry as a whole is still operating considerably below
normal, "firms which i;i, re manufacturing the cheaper products have increased. production materially and are preparing to operate on a full time
basis.
11
GitAIN MOVEMENTS.
The March movement of grains has on the whole
been in larger amounts than ld.st month and tne same montil a yed.r ago.
Receipi;s of all grains at Minneapolis were 9 per cent greater t.c.an
Februal'y receipts and 18.5 per cent greater than for T!farch, 1920,( While
the
Ma;~ch
receipts at Dulutn were less tb.an for February by 10.6 per
cent, iilley were grea.ter tna.n receipts of Mru.·ch a year ago by 59.9 per
cent.
The receipts for tile two centers combined were 4. 9 per cent
greate:~
than for February and 24.8 per cent greater tban for March, 1920.
-6X-3106
Combir:ed. receipts of w:Ueat e1t IVJinneapo1is an.-1. .Uu1uth were 3. 6 per
cent smaller thctn February i:1lld 17. 6 per cent greater tban March, 1920.
The same tendency is noted in the case of
of Die tric:; no. 10
(I~nSciS
City), wJJ.ere
t~e
four principe1l rnarkets
~.;~t;j:;.:_, ~s
ul wheat Vwere 2. 9
per cent less tna.n for February d.Il.:i 18.4 :per ct::nt. greo.ter thd11 for
March, 1920.
Receipts of corn at Minneapolis,
Dt1lut~,
and the four
principd.l markets of District No. 10, (Kansas City), showed increases
over the previous month c1nl tile same month a year ago.
Stocks of
grain at the Minneapolis ani Dulc;. ~t. terminals <.1t the close of i'Jarch
were c: per cent greater than at the close of February and. 8.9 per
cent e:reater than a year ago.
Prices of g.rc.dns during the month of
March exili bi tad. n:ixed tendencies, but there were more decreases than
a.:ivanc.es.
Ti:le media:n price of cash wheat :To. 1 Dark Northern at
mnne2,polis was $1.72
}~OUR.
cl.S
against $1. 75-t for Febru.ary.
Little new domestic dernand for flour is reported, and
buyers have shown ilesita.ncy as a result of the continued fa.ll in
the
pric~
of wheat.
Flour prices in generul £.ave declined similar-
ly, a,lt:houg..:J. it is stated from District No. 12 (Sun Francisco) that
millers who lld.Ve stocks of whea.t bought at cigher prices and who
hold flour milled from this higher priced wheat have snown reluctcJ.nce
to revise flour prices to
cor:resp~nd
export demand is ind.icated.
with present v,rheat prices.
Some
The export trade in District No. 10
(Kansas City) "is reported. fairly satisfactory, with the demand
becoming more general."
Domestic crade in tnat District in the
first week of April however was less encouraging, and mills 'Vhich
had been working on contracts had a.bout caught up with th0 business
r:;,.t! 0.-.
<u~Ju )l
-?-
X-3106
on nand.
Export trade in District No. 12, (San ~Francisco) has in-
cre~sed
sli;ntly, but the ·domestic demand on t~e w~ole has re~ained
st""ticr:tl~'l,
althoug..~
improvements are noted in so!il8 local
areas~
Millers in District No. 8, (St. Louis) report some export .ieman.l,
centering principally upon cleci.rs.
Production of mills represen-
ting c:,bout 75 per cent of the total output in District No. 9 (Hinneapolis)
was 1, 793, 505 barrels during the four weeks ending March 26, a decrease of
3~1
per cent from the figure of 1,854,209 barrels during
the four weeks ending February 2'3, but an increase of 19.9 per cent
over 1;he figure of 1,497, 060 barrels during the four weeks ending
March 27, 1920.
March scipments of flour from Minneapolis and
Dulut1: combined were 8 per cent larger than in February and 15 per
cent larger than in March, 1920.
mills was
30.~
March production of Kansd.S Ci t;y
per cent greater than in
Marc~,
1920, but figures
for all reporting mills in the District showed an increase of only
1.3 p3r cent, from 1,203,651 barrels in March, 1920 to 1,220,039
barrels in i··brct., 1921, due to the falling off in t.c..e output of the
82 interior
mills~
No aPJ:)reciable increase in acti-li ty is reported
in District No. 12, (Sdn Francisco), and mills continue to operate
at approximately 45 per cent of capacity, as compared. vd th 80 per
cent iuring Mcircb., 1920. Output of 76 mills during Mc..rch, 1921 was
627 ~417 barrels, as compared with 573,420 barrels during February
reported by 80 mills..
Plant operations in District No. 8, (St. Louis)
have been at from -±0 to 50 per cent of capacity during tne 30 day
period ending April 15.
X-3106
-8LIV~STOCX.
The condition of lives 'co·:::k on fcn"ID.s .:illd rc.nges con-
tinues excellent, althoug'-' in certain sections, such as Arizona,
rainfall .l:l.a.s bsen deficient and stockmen have suffered ne<.:1vy losses.
The stocker and feeder movement of cattle
-~d
calves at 34 markets
was 233,477 heaJ. during J.brc.l, as com.pdred wit.: 1 G4, 504 head during
February and 239,363 heal during Marc:U, 1920.
corn it is stated. ilas gi ve:r.1 a new impetus ·:;c
:Ki:lnsas ani Nebras:i::.a.
'rlle la.rge surplus of
-c:C~
swine ind1.:..stty in
TJ.lo deffidnd. for stockers in 1'1iarcl.J. at :B'ort Worth
however vvas "quite light, ::md few shipments were secured for return
to the c:ountry.
n
Reports from the principal mc.rkets in District
I
No. 12 (San Francisco) state that
11
inquiriGs are few and stockmen
are not buying to incre,:1se their I:erd.s.
n
The season has been favor-
able for lambing in New Mexico ani Htb.e crop of L:. mbs in tb.at section
and in the Pa.nh.;cndl e is es til'Dd. t.Jd at 85 per ccmt.
11
A goo-i lc.Wlb crop
is re:rorted to be L'l prosJ'ect in District No. 10, (i-:Bnsas City).
Iviovemer:.t to ma,rket of tD.e various classes of live stock differs some-
wbat.
Receipts of cattle ~~ calves dt 1~ western rrar~ets luring
March wera 1 ,llS, 546 he(:;l.d., as con:pc..reJ. ·,.-.,it~ 835,686 head ,luring February
and. 1,193,622 ..:..ea.d d.uring Maret., 1920.
were lJ.l, 89 and 119.
The r2spectiYe index numbers
Receipts of .c.ogs howev3r
s~1.owed
a decrease
from 2,902,107 hedd during :F'ebrudry, corres:ponJ.in:s to an index number
of 141, to 2,390,480 nead during I~arch, corresponding to an index number of 109, as compared wit.J. 2,852,171 ilec.i J.uring 7'!arcb, 1920, corresponiin:;
co an
index number of 130..
Receipts of stJ.eep were greater
during March tban receipts for either February, 1921 or Marc:U, 1920.
X-3106
-9-
'
T'.ne Marca 1921 figure wa.s 1,161, 549
972,647 ilea.d., ani t:ae
!>1a.rc~,
~ead,
tae February figw."e was
1920 figure was 899,750 ..::.ead, waile the
respective index numbers were 85, 7\S and 56.
In
t:ae
Fort Wortll :r:-..ar-
ket, "the heavy increase in receipts of nogs was easily t.b.e most outstanding fe.:.ture," but nevert.u.eless tllere
market was well maintained.
w--o-S
.:2. keen derncmd and the
Tile supply of meat a.nimals at the six
Inarkets of District No. 10, (Za.nsas City) in t.ue first three mont:C.S
of 1921
ments.
is stated to eave been
11arc~
fully up to meat consumption req,uire-
is said to have been one of the poorest rr.onths in the
history of t.ae industry
in that District.
T.ae .:2.bundant supplies
of beef :.n packers' coolers, it is reported from District :~o. 8 (St.
Louis), has a tendency to :Uold down prices.
:S:og prices ::.ave continued
chiefly
.
to decline steadily, and. t:Ois is ascribed. /to air.ll.nisnei
COli.SUi'tl!>~ion
of pork products, lue to adverse industrial con.ii tions.
Tile fresn
.
pork wrltet r.:.owever remains ex.ceptiolidlly acti·..ra in ti:e Pacific Northwest, and. ..::..ed.vy s.c..ipments continue to be received from Middle Wesiiern
points.
:,TON··F.ERROUS METALS.
On Marc.J. 29 seven of t.u.e largest copper
corqJci.llieB of t.c.e Uni tel Stc.tas ceased t::.eir ILinin.s operd.tions.
Several
oti::ler cor1panies stoppe.i 1producin6 during April o.nJ. it is estimated that
the proJ.uction of the mines wllicil concinue to opero.te is less tilan 30 per
cent of the noriili:U tot<iol Jmeric.:m prod.uction of cower.
operatior~
T~e
cessation of
by most of tne larger proiucers was iu~ to t~a large stocks of
copper in the country ani
t.::.e
present unrerrrunerc:.tive copper prices.
a. result of the amJ.ouncement of
t~is
As
curtailment of oining oper;;;.tions the
price of copper (N'ev1 York, net refinery) rose from 12 cents to 12. 50 cents
X-3106
-10-
in the latter part of Marc£., but there bas been sorr..e shading of the latter
price in sales made since April 15.
There wa.:; a slight increa.se in the
prj.ce of zinc during April which presu:nabl y res-cl ted f:.-om the
restricLon in output.
as
compa:~ed
March production of zi:c•.c
With 17, 7G9 ton:::> pl:·c,d"'clced in ]"( ':".. d.~'J.
at a low level, althou1;h stocks of lead in
to be
rrmc~h
copper
o:~
c:.mo~,;.nted
th~;
:L,ec~.d.
severe
to 15,741 tons,
proJ.uction is alao
un:: t0d States are believed
less in proportion to consumption tha:1 L3 t:ie case for either
zinc.
There has "t.;ec;n little change in the price of lea:i since
the increase to 4. 25 cents ('J:J,3w York and St. J_,ouis bases) on March 31,
out demand continues slack.
mstr~,
t J.jo. 10, (Kansas City) reports tb.at
there are: only 36 lead and zinc mines working a.t present out of a total
of 208 mines,
'
X-3106
-11C0.6L.
Little demand for bituminous coal is reported.
Consumers
are stated to be buying only for irrmedi9.te needs, while industrial demand
is retarded \y the general business situation.
From several Districts i t
is reported that there is no desire to contract for next fall's deliveries
at present prices.
Little change in prices, however, is reported, although in
some Districts it is stated that there is a
sli~ht
downward
trend~
Railroads
in District No. lC {Kansas City) are relying on storage piles for a good
part of their present requirements, and are buying little coal in the market.
One of the princiral producers in District No.
4 (Cleveland), however,
'
states that more inquiries 'Nere received during the first half of Jlpril than
during the first three rr.onths of the present year.
Production shows some
falling off, from 30.851,000 tons during Febn.ary to 30,328,000 tons during
March as compared with 46,332,000 tons during :March 1920.
index numbers are 89, 82, and 126.
The respective
Production of anthracite coal likewise
declined in ~~arch, being 7,ho3,000 tons, corresponding to an index number of
103, as compared with 7,845,000 tons during February, corresponding to an index
n~ber
of 114 and 7,857,000 tons during
index number of lOG.
The customary
~~reb,
1920, corresponding to an
spring reductions of 5u cer.o.ts per ton
on prepared sizes have been announced by all railroad coal companies but one,
and retail prices in District No.
lower than winter prices.
3 ('Philadelphia) are from 75 cents to t1.50
Some quick<=ming of demand is reported from that
district as a result of the slight reductLms in retail !'rices effective
April 1, but "on the wr.ole the result has been disa·pointing to the dealers" ..
'Probably the larg"'r part of March deliveries are stated to remain stored in
the yards of dealers.
The lack of retail derrand is ascribed in part to the
5JUJ
1
'(
-12-
fact that the rerrarkably mild winter has left many consumers with a large
~art
of last winter 1 s supply on hand, as well as tm the expectation of
further decreases before fall, in view of the initial price reductions.
Demand is least for the steam sizes.
Further price declines are reported
in coke, together with a decrease in production.
trict No.
It is stated from Dis-
3 (Philadelphia) that "it is doubtful if more than one fifth
of the nation's productive caracity is being utilized".
'PF.I'ROtFTJM ..
March.
'Production of petroleum showed a light gain during
There has been a continuous increase in the production of the
Kansas-Oklahoma fields since Januar,v 1, 1921, and the average daily production for four weeks ending April 18 was 370,500 barrels, as compared
with an average daily production of 361,250 barrels for the four weeks ending
March 11.
In California the average daily output during March was 337, 683
barrels, as compared with 327,864 barrels in February.
These increases were
partly offset by a decrease in average daily production of District No. 11
(Dallas) from 403,243 barrels in February to 394,174 barrels in March.
There
was a further decline in drilling operations during March.
Most of this de-
crease occurred in District No. 11, where there were only
395 new wells com-
pleted in March, as compared with 491 wells in February.
In District No. 10.
(Kansas City) only 768 new wells were completed in March as compared with
771 in February, but new production amounted to 71,460 barrels
pared with 65, 1)~4 barrels in February.
the California fields, during
~~arch,
~aily
as com-
Sixty-six new wells were completed in
a'3 compared with
tO
in February.
There
-13X-3106
was a distinct slowing down in the price recessions of petroleum products
during March, and this was reflected by the
rronth of a crude oil price of
~1. 75
~aintenance
throughout the
per barrel in roost of the Texas fields ..
Refinery runs in Kansas and Oklahorra were materially increased on April 1
by the re.sumption of 13 refineries wl.,ich were not o-rerated in March.
IRON MID STEEL.
The outstanding event during the month in the iron and
steel industry was the reduction by the United States Steel Corporation on
ftpril 12 of its schedule of prices on various standard products to figures
6 to 15 per cent below the prices of the Industrial ]oard. Prior to the
cut, several of the larger independent producers announced advances of
~2 per ton on bars, plates and structural steel shapes, while subsequently
further reductions were announced by steel corporation mills.
two groups of producers are now in general at the same levels.
Prices of the
The exact
influence wl-:!ich these price changes will exert is as yet uncertain.
It
is stated from District No. 4 that "a dragging market in general has continued"..
Some bet tennent in that District however has been reported with
respect to the automobile and building industries.
"Suspensions of orders
for steel with the mills have been lifted in an increasing way" by. the former indus try, and
11
some new buying has also resulted".
The demand is stated
from District No. 3 (Philadelphia) however to have been far below expectations, and the total consumption of
autorr~bile
and truck roanufacturers is
given as only 5 per cent of the total product of the iron and steel industry.
This District also reports little demand from the building industry.
It is
stated in the various reports that buyers in general apparently lack confidence
-14-
in the presPnt situation.
X-3106
These conditions are reflected in the statistics
showing the scale of or::erations in the industry.
At the close of March
only 103 blast furnaces in the country were active, a decline of 52 during
the roonth, as compared with 317
peak for last year.
ac~ive
at the close of September, the
Pig iron production during Hattch was 1,595,522 tons,
as compared with 1,937,257 tons during February.
bers were 6g and 90.
The -respective index num-
Production of steel ingots declined from 1,749,477
tons during February to 1,570,978 tons during
numbers were 80 and 67.
~,18.rch.
The respective index
A further decrease in the unfilled orders of the
United States Steel Corporation is reported, from 6,933,867 tons at the close
of February, corresponding to an index nurrber of 132, to 6,284, 7tf5 tons at
the close of ~~arch, corresponding to an index number of
119- Reports. in
District No. 3 (~hiladelphia) indicfte that ~reduction is less than 30 per
cent of canacity, and
hands of producers.
~ven
with this output, stocks are accumulating in the
Some resunption of activity in pig iron J reduction is
reported in District No. 6 (.Atltanta)
since the beginning of A-pril.
to large stocks of ore on dock and in furnace yards, there is a slow
of the
ship~ing
Owing
o~ening
season on the Great Lakes.
ftTJ.I"OMOBIL1i'~.
A considerable increase in the demand for standard makes
of autorr.obiles is reported from District 1-Jo. 7 ( C:dcago).
The :mere conserva-
. tive dealers in District No. 3 ('Philadel:pi'lia), hoNever, feel that the natural
seasonal improveTTient a-rpears larger t;1an the facts warrant as conditions in
the trade were exceptionally dull last winter.
A trend toward lower prices
was reported in District No. 7 (Chicago), while in District No .. 3 (Philadelphia)
there was rafher a tendPncy on the pert of the dealer to give extra parts or
accessories in place of reducing the :-orice ..:.n standard r:codels.
Stocks of
X-3106
-15-
cars in the hands of retailers have been reduced below January figures.
It is noted .from District No~ 7 (Chicago), ho•Rever, that caution prevails
an~
that there is still some disposition ra the
p~.rt
of buyers to wait for
luwer prices, while other factors which retard buying are t!1e lack of ca:pi tal
to finance large operations and the curttdlGd 1mying power of the agricultural
sections~
Carload shiprrents of manufacturers producing 2/3 of the countrJ. 1s
output are reported by District No. 7 (t."hicug.)) t:) h.:ive been j,b,5CO during
March as compared with
9 7 929 during February aDd 29 1 :;26 during March, 1920,
while the equivalent of 10 tOOO carloads were dr1.ven away under t·neir ovm
:power in ~arch, 1921 as corr,parsc. with 7,491 d.u~5::lg ]'ebruary and. 57.273 during .•.,,
March 1920..
tions..
In
some instances roanufacturers show a marked i.."'l.cr'3ase in opera.-
From District No.
3 (Philadelphia) it is stated that operations in the
fall and winter "''ere ~ot ewer
:5 pe-::- cent of
1;0r,.r::l:'.~ r>lany plants being entire-
ly closed, 1'Vhile operations in general are now at about Fo -per cent of normal ..
The improvement in business corrmencing in March reported by dealers in District No. _8 (St. Louis) has continued, but is Dfitful ~ irregular~ and is
found rather in the large cities than in the countcy.
COrrtrON Tl!:X'J'It'li:S.
whole arrounted to
Cotton consvP:pt-lon during March for the country as a
437,933 bales, less than 25 :per cent below the totals for
~~arch of the preceding year.
There 'l'las gre:·ater stabilization in the price of
raw cotton during the reonth, and the price of gray goods after declining to
6~ cents a yard for the standard 38~ inch width, advanced slightly.
Neverthe-
less, District No, 1 (Boston) reports that at present prices the spread between
a :pound. of cloth and a :pound of raw cotton is only 22-5 cents whereas a year
ago it was a!'proximately a dollar.
Fall River sales of print elloths are of
X-3106
moderate proportions,.
chased about
i
Brown sheetings and standard brovvn drills can be pur- .
•
cent a yard below la~j month's levels..
The demand for pillow
/
tubings is such that three well known.brands, sold ahead for rr.onths, are with•
drawn from the market.
The demand
fo~
ginghams has been good and some mills
have sold their entire output from May to .August..
There seem to be no :pro-
nounced general tendencies, as the activity of certain nills manufacturing
fabrics that
ha~pen
to be in derrand at the moment are offset by the relative
inactivity in the gray goods mills.
District No.
3
(Philadelphia) reports that
the demand for heavy cotton fabrics such as are used in the manufacture of
tires is slight, and mills manufacturing goods of this sort have largely curtailed operations.
""'onth.
There has been little change in yarn prices during the
Sales of low priced cotton goods and low priced hosiery were reported
to have irn:rroved son:ewhat, but the demand has been largely met from s tocksr as
yarn ~ills have recently been curtailing their operations.
In the South,
textile mills are re~orted to be running approximately full time in District
No.5 (Richmond).
Some orders are being received for goods used for print
.
cloth, and orders for future deli very are also being taken by knitting mills in
the District.
Wage cuts in the Southern ndlls have been reore drastic than in
other sections and it is said that •m.any people in
the trade claim that the
reductions have been in keeping with the lowered prices for raw material".
In District No.
yardage of
6 (Atlanta) a number of reporting mills show an increase in
4.5 per cent during ?,lfe,reh as
co~red with February, although
,. there was a decrease of 22.1 per cent as conpared with a year ago..
The
t:: ,,...,, rll
ur~~~.J
X.... 3106
-17increase in orders on hand during the rronth was negligible, but much greater
than a year ago when new orders were not acceptable because of the press of work·
It is said that few mills are as yst ''I!Orking at full day ca-:cacity, although a
nurober indicate orders on hand which will req_uire full running time for several weeks for their completion.
The increase in yam output (by :pounds) of
reporting yarn mills increased B per cent during the month, although totals
were 26.2 per, cent belo'.V figures for }(arch, 1920.
There was a slight decrease
of 1.1 ner cent in orders on band as c-,rrpe.red with February, and the time req_uired running full to
reporting 'Tills.
cowplet~
orders on hand average about one month for all
There has been a recent incr:ase in export sales of cot ton
g"ods amounting to between lO,COO to 12,000 bales and· consisting principally
of drills and sheetings to Chine, India, and the Leva"1t.
Thirty-four of the 58 rrembers of tl---e
National .Association of the Finishers of Cotton Fabrics reported total finished yards billed during the month at 86,732,621 yards, as compared with
55, 4y.::, 871 ya,rds in February.
The to tal a ''e rage percentage of capacity
operated was 67 per cent for all re._-corting Districts, as corrpared with 51
per cent during the preceding rronth.
The total yardage of finishing
orders
received for gray goods amounted to 88,342,599, as compared with 76,201,806 irt
February.
The total average work ahead at the end of the month amounted to
8.4 "ays for all, reporting Districts, as compared with 8.5 days during the
preceding month.
moot~ 'l'IH'X'"~'ILF'S.
during the past rronth.
Th9 Boston wool market has exp'2_rienced little change
Not much wool is being sold but prices -nave neverthe-
less strengthened somewhat.
.A lot of the South .American medium grade wool
has been taken from the rr.arket.
Receipts of foreign wool are considerably
-18!
x... 31o6
)
larger than a year ago, it is stated, and.;cornpetent wool men estimate
that there has
~lready
been more wool imported into this country since
the beginning of 1921 than has been consumed by our mills in that period.
In all Districts woolen and worsted mills are showing greater activity,
and in District No. 1 (Boston) several mills are reported to have booked as
rrany orders a,s they care to accept at the present time .. ,,, Top manufacturers
are well booked up and production is not far from capacity.
In District No.
3 (i'hiladelphia) many cloth mills are operating at capacity, while others
are running from
50 per cent to 75 per cent.
In the Philadelphia market
the increased activity is not reflected in the demand for yarn.
Some
yarn rr·anufacturers are running at full capacity, but orders are being
placed for current use alrncs t entirely.
er counts of yarn have
fine counts.
"~'he
'lOt
Manufactur>?rs of medium and low-
done as active business as producers of the
operations of the former are reported to be from one-
third to two-thirds of normal.
The latest figures available prepared by
the Derart··-ent of Comrerce g5.ving percentages of idle hours, to the total
rerorted on March lst showed that
and
37 .9 per cent of the worsted spindles
50.5 :per cent of the woolen spind.les were idle, whereas
the percentages had fallen to
on April 1st
25.7 per cent and 34.1 per cent respective-
ly ..
SitK ~XT!t~S.
There has been a continued increase in the manufactur-
ing activity of the silk Trills during the month and une encouraging factor
tending to sustain the i!T!Proverrent that has already taken place is the
relative stability of the :prices of raw silk.
Derrand for the raw material
for imnsdiate deli very is active but as yet confidence as to market developrrents is not great enough to have resulted in the placing of large orders
for future delivery.
The silk '"arehoused in New York at the end of the
-ronth amounted to 16,386 bales e.s coiDFared with
27 ,92S bales in Februe,ry,
X-3106
-19while
14,043 bales were i:raported. in March as .: .:m:pared with 11.:, 36: ·bales in
February.
The mills i:h Paterson and nAarby tm'r.'ls n.re now. reported to be oper-
ating at about
6o per
cer~t of maximum capacity as ~ompared with
49 per cent du1·<
ing the preceding month.
'HOSI'RRY.
It is stated :t.n the r'eJ?ort f:-on1 District No ..
3 (Philadelphia)
that there has been a. general improvement in tJ."le kl.Osiery in-ius·;; roy during the
past month, and that the derr:and for silk lines h·:,:-:; been especia 1ly marked. A
strike is still in progress in the majority of the }"'hilaclelphia full-fashioned
hosi<ory mills and the result has been that mllls in t:1"J Reading district have
had more orders than they collJ.d accept althcugh the derrand. is for imnediate
delivery •. The inability to
sccu~·e
deliveries on
f.~ ... l··:fashicned
hosiery has in-
creased. the call for other lines, and mills are now working on orders.
The
dairand for mercerized and lisle 'hosiery has shown improverr.ent during the
month but i t is estimated that it is only about
year.
50 per cent that of a normal
'11wenty-five firms selling to the wholesele trade report an increase of
ary 1921.
Ei.ght firms selling to the retail trade had a product
in excess of February; orders b._oked during
~.1arch
were
6t;.5 per cent
5·5 per cent greater
than in February, while unfilled orders on hand at the end of the month were
48.1
~er
cent in excess of the preceding month.
a year ago ''Vas nevertheless negligible. being
The output as compared with
93·3 :per cent below those totals.
-2.0X-3106
UNDEBWEAB.
(~hiladelphia)
season.
The !Ii.ajori ty of underwear milJ.s in District No. 3
are booked to capacity until the end of the light weiGht
Normally orders are placed and largely made up for shipment by
the middle of January; but this y.:;::',r ouying was late and in limited
quantities.
Du-plicate orders, placed in
~~arch
as a result of the un-
expectedly heavy public derrand, have increased the volume of business
beyond the present capacity of the industry.
On the other hand, forward
orders for heavy weight underwear have been few although sor[e r:.ill s have
booked sufficient orders to rraintain total capacity until the end of
August.
The uncertah1ty regarding price trends and the lack of definite
inforwation as to stocks carried over from last winter !IiBke buyers hesitant
to adopt a policy for the future.
Twenty firms in District No. 3
(Philadelphia) which make monthly reports to the Federal Reserve Bank
had an increase of 85.3 per ce::1t in their out:,:mt in March as compared with
February although it was still 29.5 per cent below the totals for the same
month of the preceding year.
Orders bocked were 13.5 per cent below
those for February and unfilled orders on hand at the end of the month
were 10 per cent greater than at the end of February.
The 62 mills which rrake reports to the Knit Goods Manufacturers Association had an output in March of 102,415 dozens of winter underwear which
was 31 per cent of normal.
The nroduction of sumrr:er underwear amounted to
318,725 dozens or 62.5 per cent of norrral.
Thirty-eight mills which
furnish data for both February and ~1arch had a production of 261,934 dozens
during the 1a tter month as compared with 14 7, 622 dozens in February. Unfilled
orders on the first of March dropped, however, from 588,127 dozens to 269tl04
dozens.
New orders received during the month of March rose frorr; 205,260
dozens in February to 284,712 dozens in March.
There v.as a slight increase
r::::' .-, '~-'"--J
I
I
•ur:~~
'
'
-21-
X-3106
in cancellations which rose from 1,619 dozens to 5,173 dozens.
SH9EsAND LEATHER.
Prices for hides and skins showed little change
during March and the volume of trading has not increased perceptibly. Demand
for sole leather and staple grades of upper leather contirrues to be slack,
but deiTand for colored glazed kid, suede, calf, ooze, and certain other kinds
of calf leather continues to exceed the available supply.
There was some
increase in the demand for belting leather, harness leather, and upholstery
leather during March.
s~ll.
The volume of leather exports continues to be very
District No. 1 (Boston) reports that "prices on the whole are showing
a slibht strengthening but the very large supplies of leathers in the country
act as a deadening influence on any general upward moverr:ent.
n
There has been
some slackening in the demand for women's shoes since Easter, but this has
been largely counterbalanced by an improvement in demand for men 1 s shoes.
•
Both retail and wholesale sales of shoes are reported to be exceeding production at the present time.
The net result of March operations in District No.
l (Boston) was a reduction in the size of stocks of shoes on hand in factories
and factory warehouses.
Shipments of shoes from the factories of New England
were considerably larger in March than in February, yet orders on hand April
1 showed an increase over those on the books March l.
nproduction was
apparently at a rate slightly below 50 per cent of capacity".
In contrast to
this, District No. 3 ('Philadelphia) reports "that the shoe rr:anufactwing
industry at the present time is operating close to capacity and that business
for the spring and summer seasons is approaching norrr:al 11 •
Bowever, buyers
in that pistrict still refrain from ordering for future delivery and the
business in the hands of the manufacturers is practically entirely for
immediate shipment.
District No. 3 (St. Louis) reports that shoe factory
operation is larger than at any time this year, averaging from 30 to 90 per
;
-22f
X-3016
I
cent of capacity.
Many plants turning out women's and children's footwear
are operating at full time.
"Prices show a further decline, except on
goods in seasonal demand and· the fancy grades of women's W@ar."
Orders
for summer gpods are being obtained in some \'uantity by salesmen in
District No. 7 (Chicago).
Good qualities are wanted and the demand for
novelty lines is stronger than for staple goods.
"The retailers have
brought prices down recently until they are more in line with re~acement
cost but these prices have not kept pace with wholesale. reductions. 11
LUMBEI?.
Demand for lumber increased scrnewhat during March, but only
as a result of a futther reduction in
~rices.
District No. 12 (san Francisco)
repc>rts that "the V'olume of bu.ying is increasing although it is still con-.
servative and purchases are only to meet current needs." Orders received
during
the four weeks ending March 26, by the four lumber rnanufacturers
associations of that District showed an increase of 30.2 per cent over the
:9receding fow: week;s.
per cent and
shi~nts
'Production during the same :9eriod increased 17.1
68.1 per cent.
Uncertainty as to the volume of this
season's operations in the canned fruit and salmon
pac~ing
industries has
resulted in a curtailment of operations of box shoOk mills to 50 per cent
of capacity.
One hundred and eighteen mills belonging to the West Coast
Lumbermen' & Association re"POrted for the four weeks ending March 26, a cut
of 187,917,000 board feet, shipments of 209,970,000 feet, and orders of
213,431.000 feet.
Corresponding figures for the preceding four weeks with
the same number of mills reporting, were as follows:
157,970,000 feet, and 167,483,000 feet.
162,648,000 feet,
In District No. 11 (Dallas) prices
were practically stationary throughout March.
Production
of
29 southern
pine mills during March was equal to 60 per cent of norwal.Orders bodked
by these 29 mills were equivalent to 61 per cent of their
no~mal
production,
i
•
-23-
I
(
whereas the
to
56
30 mills which
X-3106
re:porte~l. ,.:..,n·.J.ng February backed orders equivalent
per cent of their norrr.al production.
slightly in District No.
6
(Atlanta).
the Southern Pine Association was
Prices of pine have sagged
Production of 134 mills belonging to
29.5 :per cent
belm~
norw.al during the week
ending April 1, while shipments were 25.3 per cent below normal production.
Orders received during that week were larger than in any week since January,
but were
23.9
~r
cent below normal production.
Production in the Tennessee
hardwood mills for tre first three months of 1921 is reported to be 75 per
cent lower than in the same
9losed.
~eriod
of 1920, and
~any
of the mills are being
'District No. 3 (St. lJouis) reports that industrial buying has in-
creased somewhat in both softwoods and hardwoods. "Railroads are virtually
in
out of the market, andjconseouence the prices of heavy timber, cross ties,
and car stock have declined more heavily than in any recent month."
Price
reductions were made during Mar·ch by a rr.aj ori ty of the retailers and about
half the rranufacturers reporting in District No.
9
(Minneapolis).
The
March cut of 12 manufacturers was 7 per cent greater tr.an in February, and
shipments were 20 per cent greater, while stocks at the close of the month
had increased
5 per
less, shipnents
cent greater.
.:en t.
J.s compo.red 1vi th ~r.arch, 1920, c~;.t was 26 per cent
66 per cent less and
stocl~s
51 per
at the close of' the month
The demand for lumber has irrr:9roved somewhat in District No. 3
(~hiladelphia), but the price trend has continued downw&rd anQ 30 per cent
of the orders are being filled from stoCk on hand.
BUILDING
during
1\~arch,
O~RATIONS.
Building operations showed increased activity
which is a norma+ condition for this season of the ;r-ear.
Number of building 'r;)ermits, value of building
ue~mits,
and value of contracts
awarded all registered marked increases as comrared with February.
This
increase is particularly large in the case of number of permits, as a result
-24X-3106
of the continued increase in the building of residences.
Contracts
awarded in the New England states amo·!.Ulted to $13,262,000 during March,
an increase of 84 per cent over February.
D5.strict No. 2 (Hew York) reports
contracts &mounting to $29,846,000 an increase of 40 per cent over the
February figure.
Of this total 59 per cent were for residential buildings,
as compared with 48 per cent in February and 40 per cent in January. nThe
increase in residential construction has been confined almost entirely to
the least expensive apa.rtrr:en~.s ar1d small bo;r.esn.
In District No4 3
(Philadelphia) there has been a large increase in the value of building
permits issued during March in comparison with the February figures. Funds
for mortgages have been difficult to obtain, but trere has been a steady
increase in number of houses bot1ght through the building and loan associations.
District No. 4 (Cleveland) shows an increase in value of building
penn its issued during March, but there still seems to be a tendency to wait
for lower costs before commencing construction.
Reports from 23 cities in
District No. 5 (Richrr.ond) show 1,718 permits issued for new construction
during March, in comparison with 894 permits issued in February.
This
number was greater than that for any month since February 1920.
Value of
building permits in District No. 6 (Atlanta) increased about 50 :per cent
for March in comparison with February figures.
Noteworthy increases in
activity occurred in Atlanta, Birmingham and Tampa.
In District No.
7
(Cricago) there was an increase in value both for building permits and contracts awarded during March, as compared with February figures.
District
No. 3 (St. Louis) shows an increase in value of building permits for three
leading cities in March, as compared
wit~
very much below trDse for March, 1920.
February, but these figures are
In District No.9 (Minneapolis)·1847
permits valued at $2,647,666 were issued in the reporting centers in March,
as compared with 783 permits valued at $2,179,784 in February.
This increa~e
1
I
4
-25-
I
X-3106
is due to a su0stantial gain in the number of permits issued for repairs
and alterations.
2,178 contracts in
Seventeen cities in District No. 10 (Kansas City) issued
~!!arch,
an increase of
al~out
100 per cent over the
· February figaxe and an increase of about 18 n.er cent over the total of
March, 1920.
District No. 11 (Dallas) reports that both the number and
value of ·huilding pennits issued in NT..arch was the largest rnontrly total
since October, 1920.
The value of building per.mits for 20 cities of
District No. 12 (San Fr~n,~:!.sc'-; amounted to ~16 .:)42, £35, an increase of
·57 per cent over February, 1921, and 27 per cent over
~,'arch,
1920.
Number of permits in those cities increased 47 per cent over February, 1921.
and
38
l)er cent over March, 1920.
"Declining prices of building materials
and some reduction in labor costs have reduced the number of factors which
have been retarding building
EMPLOYMENT.
in~uiry
operat::.r-~,s. 11
The Federal Reserve Banks have just completed a special
into changes in employment conditions and in rates of wages
occurring during the year ending April first.
The results of this inquiry
will be published in the Federal Reserve Bulletin for May.
In addition to presenting facts
concerning wages and employment as compared with a year ago, however, several
Districts present comparative data for the months of February and March.
In District No. 3 (Philadelphia), for exan:q;>le, the estimates of the local
officers of the Pennsylvania Bureau of Employment indicated that on April·
15 unempfoyment was still increasing in the cities of
~hiladel~hia.,
Altoona,
Harrisburg, Johnstown and Scranton taken as a group, since the total nurriber
of unerr~loyed was re~orted at 177,645 on April 15 as corr~red with 147, 115
on March 15.
In District No. } (Chi(:ago) questionnaires are sent regularly
-C:b-
X-3106
to representative manufacturing concerns and for the month of
~1arch
returns were received frorr' 61 firms then err.:_)loyin; 41,000 persons and
statistics showeo. a reduction of 6.. 5 per cent in numbers errrployed ~s con;pared with February.
The
great~st
r3ductions in volurr£ of employrrenc
were in the metal and rr:achinery trades and among the wor1.ers in railroad
equipmer1 t sho": s.
On the other hand, the automotive industry has shown
a steady increase since December, on the basis of returns :·1:ade by 79 firn:s
to the Employers' Association of Detroit.
In Decerr~er only 14 per cent
as :r.any rLen were en.ployed as in septer.1ber, the time of greatest activity
when 176,00? were on the pay rolls.
On April 12, the number had risen to
100,347 from the December minirr.um, or 57 p~r cent of the September total.
From District No. 8. (St. Louis) it is also re::)orted .that "Fe~~eral and State
labor commissioners and employrr;ent agencies show a further increase in unemployment •.. with most acute conditions in the ire tal industries and trans:portation and com:non labor nost affected".
clothin~;
In textiles, boots and shoes,
and furniture, however, the number of unemnloyed was considerably
decreased during the month of 1\f;arch by resum:9tion of plant operations.
It
was like•vise true that unemployment increased _in District No. 9 (Minneapolis)
during 'rarch.
According to renorts from the Federal employment agencies
in Hinneapoli s, St, 'Paul ~nd Duluth, rec.uests for help wanted were
cent of those for February in the case of men, while
men were placed in ¥arch as in February.
73.4 per
83.·5 per cent as many
For women, howevert there was an
3.4 -per cent increase in rer:uests for hel!' wanted and a 5.2 :rjer cent in..;,
crease in numbers placed as comr;ared with February.
Reports of mining
comuanies indicated no substantial change in numbers 'employed in March.
As a matter of fact,
the largest Montana and Michigan mines were closed on
,.- ,......-,.,
(.~
<G;<c~)f)
-·27April 1.
X-3106
Lumber companies employing 1, 762 men in March had reduced their
(San Franc is co) stated that unemployment 5.n that terr:i.tory was less than
a month ago, excepting the sections of .Arizona and Utah in which the large
copper mines, now closed, are located.
o·uts5 de of mining. the J.umber
industry re-ported the greatest amount of unemployment but work was in process of resumption.
~ortland
reported a decided decrease in
\ll~employment,
as did Seattle, while conditions in Spokane were practically unchanged.
Indus trial concerns in Califm·nia were employing more men than they were a
. month ago.
Although a large amount of surplus labor in the industrial centers
has been absorbed by the seascn:n increase in derrand for farm labor, it is
very generally corrmented up•:.n th<it farmers are endeavoring to economize by
doing more work themselves and dependinc: less upon hired
~elp.
Consequ~ntly,
the relief to the unemployed with the opening up of spring farming activities
is not likely to be so great as was anticipated.
In view of the unusual
supply of farm labor and the restricted demand, it is inevitable that wages
should show a sharp decline.
District No.
4 {Cleveland) reports that in
the State of Ohio wages for farm hands now average $40 a month with board,
as compared with
$52
last year.
In District No.
6
(Atlanta) it is said
that many farmers are without money to hire labor and are cultivating only
so much land as can be managed with the help of their families.
In District
No. 9 {Minnea-oolis) economies in expenditures for hired help are likewise
being practiced.
Farm laborers in consequence are receiving from $35 to
$45 per month with board as compared with $70 to $30 a year ago.
A similar
situation prevails in District No. 10 (Kansas City) and it is said that
laborers are reluctant to work at the reduced rates of wages now prevalent.
I
...
'
'
X-3106
-28VfBOLESALE TRADE.
Although the sales of reporting wholesale firms
are much below the totals given for a year ago, as would Qe expected in
view of the heavy declines that have taken place in wholesale pri_ces, a
number of Districts which present month to month comparisons for leading
lines such as groceries, dry goods, boots and shoes and hardware report.
decided increases in March sales as compared with February.
No.
3
(Philadelphia) the hardware sales of
25
re~orting
In District ·
firffis increased
30.2 per cent during the month although the volume of business was still
It was. stated
19.2. per cent below the totals for last year.
~hat
current
. sales largely represent sms.ll orders of goods wanted for immediate use,
as
the result of a seasonal demand for such articles
garden .tools, wire fencing and netting.
farm implements,
In the wholesale grocery trade
increased sales had also occurred and could be partially attributed to
a seasonal increase in derr.a.nd.
The net sales of
50· reporting stores
were·l8.6 per cent larger in March than in February, but 27~9 per cent
below the figures for March 1920,
Purchases were said to be for imnediate ·
needs an:d business confined largely to staples.
In District No. 4
(Cleveland) the net sales of 14 reporting grocery firms and 7 hardware
firms showed declines as compared with a year ago somewhat analogous to
those of District No .• 3 (?hiladelphia), being 16.3 per cent lower for.
hardware and
33.1
per cent lower for groceries.
reporting)were 14.9 per cent below last year.
sales of groceries
Dry goods sales
(6
firms
In District No. 5 (Richmond)
(9 firms reporting), dry goods (8
firrr~),
hardware
( 8 firms) and boots and shoes (8 firms) show increases over February ranginf:
from 8.6 per cent in the case of groceries to
of boots and shoes..
53.4
per cent in the case
The Easter demand probably explains the heavy increase
r'!"'
)...
X-3106
-29-
Decreases for t"h.ese 4 lines as com-
in March sales of boots and shoes.
pared with \'larch, 1920 ranged fror:: 23. ~ per cent jn t"he case of groceries
to 38.3 per cent in the case of dry goods.
in the value of sales is
~rob~bly
entirely
In all these cases, the drop
accctu~ted
for by lower prices
and in some cases, the amount of sales if measured in physical units
would undeniably be greater.
lines, groceries
(10
In District l'Jr;. 6 (Atlanta) the 4 reporting
iin1s), dry goods
(13
f:i.rrrs), herd111lare (6 firms).
and boots and shoes (7 firms) all reported increases in Harch sales as
compared with February, re.nc:;ing from 6.0 p~::;r cent in hardware to
72.6 per cent in the case or' boots and shoes.
crease was no doubt in great; p3.rt seasonal.
Ti"ie last named heavy in-
Dcc;reases in sales as carr.-
pared with a year ago va.riea. f?;·om 33.6 per cent in the case of groceries,
to 45.6 per cent in the case of: hardware.
{Chicago) report very cautious buying.
V'hvlesalers in District No. 7
Grocery s&les were
below the level of a year ago, with 22 firms
to the percentage reduction in sales of the
District No. 3 ("Philadel3)hia).
a
decre~se
of
35.9
re~orting,
25
per cent
a drop very close
50 concerns reporting in
Th& d1·y gooU.s trade
(13
firms) reported
per cent for March as compared with a year ago, while
the ·sales of ten shoe wholesalers were .31.6 :?e:r cent be1ow Y:a:rch 1920,
but 20 per cent above sales for tb.e preceding month.
District No.
10
(Kansas City) with
4
Grocery sales in
firms reporting, increased 19.5 per
cent during the rr:onth, while they were 22.7 :9er cent below the totals of
a year ago.
(3
The very heavy increase in r.~rdware sales of 65.5 per cent
firms reyorting) as compared with February is no doubt attributable to
the seasonal derrand of a largely agricultural district.
per cent below those of March,
1920.
Sales were
34·3
District No. 11 (Dallas), in contra-
distinction to other sections does not show the same tendency toward a
..-~~
,._
·uh_)<)
X-3106
-30revival of wholesale trade.
and
Returns from 2 concerns selling hardware
2 selling farm implements record declines of 29.3 per cent and 13.4
per cent respectively in sales as compared with the 'Preceding months.
Grocery sales (4 firms) which elsewhere show a decided increase are
0.7 per cent below February volume and dry goods sales (4 firms) although
16.1 per cent greater in March than in February have not advanced as
greatly as in most of the other Districts.
All dealers, it is said,
re'Port that the buying derrand is light, conservatism is the outstanding
feature with the trade, and dealers are reluctant to place orders in
very large amounts fo1· future delivery.
In District No. 12 (San Francisco)
all reporting lines have increased sales as compared with the month of
February.
As
in other Districts, the increase in shoe sales has been
very heavy, averaging 68.4 'Per cent for 15 firms.
Grocery sales (30
firms), dry goods (11 firms) and hardware (23 firms) increased 20.9 per
·cent, 28.5 per cent and
33·9 per cent respectively over the "Preceding
month.
The declines as compared with a year ago were 16 per cent for
shoes,
7.3 per cent for groceries, 29.1 per cent for dry goods and 33.6
per cent for hardware.
Given the decreases in wholesale 'Prices, the
declines probably do not indicate any shrinkage in the physical volume
of trade in any of these reporting lines.
I
~
l
,
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X-3106
RETAIL TR.ApE.
The irregularity wLlich bas been noted in the retail
trade situation for the pg,st fe·N mont:as is
stn:.
evident.
Discrimina-
tion in favor of better quality of goods characterizes the attitude of
.the buying public.
A representative view of the situation is ·stated by
District No. 3• (Philadelphi~), "purchasers are exceptionall~ careful
in t:aeir shopping
~d
retailers have found that sales to a certain class
of trade can be effected more easily by stressing the q_uali ty factor
"
rather than tbe prices.
There has been a seasonal incred.Se in sales,
n
d-ue to t.b.e opening of spring and t:iie pre-Easter shopping, but the increase haS not been greater than~ ye~r ago,
T:ais is illustr~ted by tAe
fact tba.t th.e increase in net s.:1.les when compared \vith a year a60
in March than. in February•
les$
\Vas
T:au.s; in Di$ trict No. 1 (Boston), t:C..e increase
in net sales over the same month a year a.go
Wci.s
1.5 per cent• .in District
No. 3 (Philadelphia), 1.8 per cent. and in District No. 5 (Richmond), 2.7
per cent.
In the Middle Western districts decreases ·in net sales \vere
prominent.
In District No. 8 (St. Louis) t:l.lere
cent, in District·
n.
No.
'~
a. year ago.
~
a iecrease of 6 per
(Minneapolis) 11.2 per cant, and in District lTo.
(Dallas) 15 .. 0 per cant.
but the amount on
Wci.S
T.c.er.; wo.s the us·Ucal season.:J. increase in s·;,ocks,
wa.s considerably smaller in every District than
T:OO rapid.i ty of stock turnover bQ.s been increQ.sing.
Tt.e out-
standing Orders at 't:Oe close Of Ma.rcA remained practically const~t •
indicated that
\V:.:U.Ch
the merc:.:ants are not placing orders to a.ny great extent.
District No.. 3 (P:Uladelphia) statas
t~t
'
"retail store rLdl'lagers continue
to keep close VMtch of their buyers, limiting them to practically .aand to
mout~ purc~ses."
l.
~.
-32-
1.
X-3106
of the striking featur·es of the presen":. L1J.ustrial si tua~ion.
war prices or sorr;ething ap-1-,roacl'ling
tiJ.eu~
Pre-
ex.ist in rn<:my important lines
of wholesale trade while at the same time in other lines comr.1odi ties
are being sold at twice or even more tb.an t-rice 1913 values.
The same
unevenness exists in some cases betw·een t:Ue prices of raw ILateria.ls
and finished goo::ls in the same industry.
In thl;) case of raw cotton,
for instance, both Eg;y-ptLm and .American, the present level is lower
tbah the average for tb.r:: year 1913.
Althong:O. certain grades of South
American wool are below the 1913 average, wool prices as a whole
appear to be still abollt a ',:iJ.j.rd higher tnan before the war.
Finished
IIld.terials in these t\iO :ines, :..owever, hav·e not been reduced as much as
the ravv materials..
An average of th:~ee leading grades of cotton goods
shows present prices to be at least 20 per cent· hi~ller than before the
war, and. a woolen clot.a of d. stanlard type is now selling at
proximately t·vice as much as in 1913..
ap-
T:Lle discrepancy between. the
prices of rd.W and r.uanufa.ctured goo.is in tie hide and leather :industry
is even rr;ore
extreme
t~n
in the cotton cmd wool industrj_es.
An
average of leading grades of domestic anl foreign skins s~ows the
present level of prices to be
war level.
a.pproxima.~ely
one-third unde:t t.c.e pre-
Shoe prices. on t:ae other ::.and, would. seem to be db·out
twice as Ligh as in 1913.
Except in t:C.e ca.se cf v;nea.t and rye 1 ;rices of lec1di:rF~ cer8a.ls
closely approach pre-war levels.
In spite of this, however, t:ae trend
of the market recently .uas been continually d.owrNrard.
Prices of live
stock and meats, on the other hand, although at a level at least 10
per cent above pre-war prices, (an in sorr;e cases more) have been showing
,.
I
-33-
'
,.l
X-3106
considerable strengtil during recent months.
1
T.cerz ~s, !lOWever, recently
been a downward movement in son:e of the r:.ea.t :.?roiucts.
.Another group
/
of comnodi ties w!lich ara at or b.Jlow pre-war price levels are the leading non-ferrous metals, sucb. as copper, zinc, lead, and tin.
In 1913
electrolytic copper sold at an average of 15~ cents a pound.
Recent
quotations are at 12 to 12~ cents a pound.
Zinc ~d tin ~re also below
the pre-war price, and lead is at approximately the same point as in
1913.
Nevertheless, this group of industries is in a highly
disorg~ized
cond.i tion ani production ha.s been ~ed.vily curtailei.
In
d.
large group of im:rorta.nt industries, on the otaer J:land., prices
a.:re still from 50 to 100 per cent above pre-war levels.
T:C..is is ·true
in spite of the fa.ct tba.t in a consid.erable number of cases, price reductions bclve
be~n
basis for trading.
ing comwodities.
mdde which
appe~r
sufficient to make a possible
Most nota~vorthy in tb.is group a.ra t:Oe fuel ani buildBitundnous coal, in
spi~e
of consid.erable reductions,
now averages around 100 Fer cent above the pre-war figtire, and anthracite is at a similar ratio as compared witn the 1913 level.
appears to be a bout t·.vice c<.s
~i
Coke also
g:O. ..:.s ·befo..~e the war wil.ile iron and
steel prices (t~ting into consideration t:O.e United States Steel Col~Or~tions
~ed.uctions) ~re
between 50 ani 75 per cent above the 1913 average.
Crude petroleum and petroleum products are s-till more them twice the
pre-war price in spite of recent drastic reductions in
t~e
mid-continental
fields.
In
tb.~
levels..
same way h4'nbe1·, brick <::..nd. cem;;nt are far above pN-war
.An a.vero.ge of tl:u-13e lead.ing gra.ies of lumber shows present
prices at least 50 per cent
~igber
than beforG the war while brick and
-34X-3106
cement are between two and three times the 1913 level.
Although a study of the component parts of tae price structure is
essential to an understanding of the difficulties of tbe present situation, the
~ovement
of prices in general is of value also.
tions in the different parts of
aver~ge
for prices as
t~e
a whole.
The wide
varia~
system are tnus elilldnated in the
It should be remembered, howeverJ
wbere use is made of such an avera;e,
t~t
it consists of widely diverse
elements.
The all coffiffiodities index number constructed by the Board shows
a reduction of 3 per cent during
January and February
wa~S
1~rch,
while the rate of decline in
5 per cent, and that of December 9 per cent.
During recent months the raw materials index number has declined more
rapidly than tbat for manufactured goods, the reduction since January
amounting to 11 per cent in raw materials as compared with 3 per cent
in consumers' goods.
The index number now stands at 50 per cent above
the 1913 average.
Retail prices of 43 articles of food were reduced only l per cent
during March according to the index nurober of the Bureau of Labor
Statistics.
No statistics are available showing the reduction Ln the
price of clothing or miscellaneous articles at
S3:IPPING.
retail~
Hore optimism regarding the outlook prevailed in ship-
ping circles than for
son~
months past.
This was lue more to the ex-
pectations a.roused by a numbar of developrr:ents tban to any change in the
underlying situation.
Among t4e events of the month was tbe continuance
of the British coal strike with a
moderate expansion of the demand for
-35X-3106
cnartersof American coal-carr;ying ships for
promp~
dolhrery.
Another
encouraging feature of the freight m"":cket 'Nas t1:.8 firrr.er tendency of
rates in certain directions.
The settlement of the rate war between the
Nortn Atlantic - United I<::i.ngdom Conference a.nd the Frenc:O. I.ine, which
h~i
been waged since
II'..a.rket..
l~st
Fall, :Oelped to give tone to the ocean freight
The decision of tb.e Shipping Board to charter its vessels in
future on the bare-boat plan was regarded by
operato~s
possibilities for che::1per operation of vessels.
as opening up
The wage situation re-
II'ains unsettled, the calling of a strike by tb.e marine engineers at New
York for the first of May being the outstanJ.ing development toward the
end of April.
The Division of Oferations of tne Shipping Boari stated
t.c.at, on April 5th, 653 steel ships of 4,279,531 clea:iwei.ght tons, were
either already idle or hai been orlered withdrawn from service until
conii tions ir.aprove,
That number consi tutes 45 per cent of tne GoverrJZLent-
owned steel merchant ships.
Tb.e
shipbui1iin~
situation remains unchanged,
';vi th yards merely corr;pleting ord.ers already on
~ni,
no new tonnc.ge of
any size having been booked by American yards so far this year.
The re-
cent cut in steel prices has not been suffic:i:ent to a,ffect s:C.ipbuilding
favorably.
Of the
S~'ippin3
Boo,rJ's buil.1L:g program, 4 1,;, ste':;;:::. vessels
of 489,150 deadweight tons remain to be delivered., all of wnic}l are now
under
cons~ruction.
According
·~o
present :plans, the last of these
will be corq,letei anJ. deli-.rered about
~'l.pril,
1S22.
,.-I"
i>.~•
.;Ji':u.f,_J
COPY.
X-3107a
DEPARTMENT OF JUSTICE,
W.A SBINGTON.
December
9, 1919.
Dear Mr. Secretary:
In response to your request for my opinion
concerning the powers of the Federal Reserve Board to regulate discount rates of the several reserve batiks, I reply as
follows:
By section
14 of the Act of Congress, designated by the
short title "Federal Reserve Act 11 {Act of Dec. 23, 1913, 38
Stat.251), .it is provided that hevery Federal reserve barik
shall have power" (d)to establish from time to time, subject to review and
determination of the Federal Reserve Board, rat~s of
discount to be charged by the Federal reserve bank for
each class of paper which shall be fixed with a view
of accommodating commerce and business.
By section
4 of said act each Federal reserve bank is
under the supervision and control of its own board of directors, subject, however, to the provision of section 11 of
said act which provides, in part, that
The Federal Reserve Board shall.be authorized and
empowered* * * (j) to exercise general supervision
over said Federal reserve banks,
,. ...
~
-2-
X-3107a
Said Federal Reserve Board is also further authorized and empowered to examine at its 6iscretion the
accounts 1 booKs and affairs of each Federal reserve
bank * * *and to require such statements and reports
as it may deem necessary.
(Sec.lL sabdiv.a.)
By
section 12 there is also craated a Federal Advisory
Council composed of representatives chosen in the manner prescribed
in said section, which is to confer directly with the Federal Reserve Board.
Among its powers it is authorized to "call for infor-
mation, to make recommendations in re~rd to discount rates, rediscount businesslf) etc.
The question for determination is whether, taking into
consideration the language of section 14 (d)J giving the power
to the Federal reserve banks to establish from time to time rates
of discount, "subject to review and determination of the Federal
Reserve Board", and the further power of the Federal Reserve Board
to exercise general supervision over said Federal reserve banks,
the power of the Fede~l Reserve Doard is limited to reviewing and
approving or disapproving rates of discount made by euch banks, or
whether said Board mayJ in the exercise of its powers} fr~ time
to time review the rates of discount in use and direct specific
changes and alterations thereof.
The legislative history of the act shows that as originally
drawn section 14, aubsec. (d) conferred the power upon the Federal
reserve banks to make discou..."lt rates
"sv.b~ect
to review" by the
Federal Reserve Board, and that said section was amended in committee by adding the words "and determination" after the word
"reviewn, so as to make said section read as now enacted.
,_,- .r:-
-~-.....
,iJ!'±.t~
,.
-3-
X-3107a.
It is quite evident that if the
Fede~l
Reserve Board is con-
fined to the power to review and approve or disapprove
~tes
of
discount made by the Federal reserve banks, and is without power to
itself direct specific changesJ the words nand determination" are
wholly without significance.
The very signification of the word
"determina.tionfl used in such a connection) carries with it the right
to pass upon and to decide a.nd
done.
fix~
and thus determine what should be
Coupling this with the power given the Federal Reserve Board
to supervise the business of each
Federal reserve bank 1 taking also
into consideration the recommendations contemplated by tht Advisory
Council to the Federal Reserve Board in regard to discount
rates~
such power would be futile if such Federal Reserve Board could not,
if agreeing to such recommendations, direct them to be carried out.
I think it is quite clear that the Fede~l Reserve Board is the ultimate
authority in regard to rediscount rates to be charged by the several
Federal reserve banks and ma.y prescribe such rates.
This is in all cases necessarily a review of rates existing at
the time in the ba.nk 1 and therefore strictly calls for the exercise
of this power; the determination reached
by
the Board carries with it
the exercise of the power of determination specified in sec. 14~
subdiv. (d); and also exercises the power of supervision granted in
sec. ll, subdiv. (j}.
The scheme of the entire act is to ba;7e Federal reserve ban~s in
different parts of the country so that their operations may be
accommodated to the business needs of each section, and to vest final
-4-
X-3107a
power in the Federal Reserve Bo3.rd 1 eo as to insure a conduct of
business by each bank which will not be detrimental to the carrying
out of the entire plan.
The powers of the Federal Reserve Board
are therefore to be exercised in regard to each reserve bank as
the conditions surrounding ea.id bank may dictate, keeping in view
the general purpose and plan of the Federal Reserve Act.
in mind such general
purpo~e,
Bearing
I am of the opinion that the Federal
Reserve Board has the right under the powers conferred by the
Federal Reserve Act, to determine what rates of discount should be
charged from time to time by a Federal reserve bank, and under their
powers of review and supervision, to require
sue~
rates to be put
into effect by such bank.
Very respectfully,
(Signed) Ale..&:. C. King
Acting Attorney General.
Bon. Carter Glass,
The Secretary of the Treasury,
•
Washington, D. C.
@FedFRASER