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C h ic a g o , A I N addition to the effects of industrial dis turbances, economic and business condi tions in the Seventh Federal Reserve District during July were influenced by the usual sea sonal changes. The crop-moving demand for funds from the agricultural districts is not yet general. The volume of business, as indicated by debits to individual accounts during July, was well sustained throughout the district, ex cept in Chicago, although in the first weeks of August there was a considerable falling off in debits outside of Chicago. Government sta tistics, as well as reports direct to this bank, indicate larger crop yields than last year, ex cept for corn, which on August 1 was esti mated at 15,000,000 bushels less in this district. The movement and storage of live stock prod ucts show seasonal trends modified by excep tional conditions. Sales of mail order houses increased; the larger department stores report business ahead of last year. The movement of wholesale goods, except groceries, continued the improvement over last year noted in June. The manufacture of clothing and furniture was seasonally more active, but in almost all other lines declines are reported. Money and Banking The demand for funds from trade and in dustry during July showed little change except in a few manufacturing centers, where there has been a slight increase. In some cases, bor rowers who have been out of the market have applied for accommodation, but others have been paying off old loans, leaving aggregate loans about the same. Reports indicate that u g u st 31, 1922 farmers throughout the district are very con servative in their borrowings and are confin ing the use of credit to obtaining money to meet actual operating expenses. Some bor rowing is reported, however, for the purpose of putting cattle in the pastures. The seasonal marketing of fat hogs is about completed, but the movement to market at present is sufficient to cover operating expenses and to afford some further liquidation. There has been considerable softening of rates during the year on loans secured by firstclass farm mortgages. The customary rate is now 5y2 per cent, with 2 per cent commission on a five-year loan, making gross interest cost about 6 per cent per annum. Few of these loans are now being placed, however, owing to the lack of a demand for funds. The ruling rate on commercial loans, in cities outside of the largest centers, is 6 per cent, although 7 per cent is reported in some cases; in most of the country districts it is higher, running from 7 to 8 per cent, with some loans as low as 6 per cent. Customary money rates reported by Chicago banks were on the same general level in the 30-day period ending August 15 as in the preceding 30 days, although both reduc tions and increases appear in individual cases. Discount rates charged customers for 90-day maturities ranged from to 5J4 per cent with the customary rate remaining at from 5 to 5y2 per cent. The number of business failures in this dis trict in July shows a slight increase over June, but the liabilities involved were considerably Compiled A ugust 28, 1922 greater. In the country as a whole, however, both insolvencies and indebtedness show practically no change. Capital stock sales and transfers as evidenced by the sales of stamps in the first revenue district of Illinois during July were only 55 per cent of the monthly average for the first half of 1922 and were 28 per cent less than in February, the lowest previous month this year. They were only 36 per cent of the January high for 1922. Bankers’ acceptances purchased in this district by six bill dealers reporting direct to this bank increased from a weekly average of $3,239,000 for the five weeks ending July 15, to $3,950,000 weekly average for the four weeks ending August 12. For the same periods average weekly sales decreased from $5,122b000 to $3,795,000. Sales to the reserve bank decreased, but constituted 64 per cent of the total sales in the cur rent period compared with 53 per cent in the pre ceding period. Commercial Paper and Acceptances Purchases of bills by this reserve bank decreased from thirty-six million dollars in June to twenty-one millions in July, while sales from holdings showed little change; bills held at the close of the month were nine millions less than at the close of June, a decrease of 43 per cent. B A N K T R A N S A C T I O N S IN B A N K E R S ' A C C E P T A N C E S Member Banks in the Seventh Reserve District Deposits, as well as loans and discounts, and in vestments, at reporting member banks in Detroit in creased considerably during July over June, but these items showed only slight changes in the member banks in other cities of the district. Both time and demand deposits at Detroit were larger in July than in June. The increase in demand deposits at report ing banks in Chicago was partly offset by a decrease in Government deposits; loans secured by stocks and bonds increased slightly, while other classes of loans decreased. R EP O R TIN G M EM BER BANKS, S E V E N T H C O M P A R A T I V E P O S I T IO N riu.MONSGPOou.O&S 1600 1 h C 11500 1400 LOJ I19« Q 5CBUHt > X .1 1200 *•. Low AM0 C 1100 ITS i . .. . ,* * V ••• .♦ 1000 D e t r o it * .J.3AI1S,0|SS&IHT! M3 HiVESTMi •NTS . 500 * «* « > * 4 0 0 Q rs o u t ! p s S3 9 **• ** * 5 00 ins n @ SisrJ3UMT3 zoo 100 :5 00 Qi p o s m ml LO Att_ 400 200 e r S e lec te d C it ie s 1 __L UAHS, □iSCDUHTS Ana I »VB5Y 1SKTS 500 fliKpUf >» 't . - ; — NJ J A 5 0 h f3 J F M A M J J A 5 0 N OJFM A H J J 1020 1021 IS 2 X Mohthly D a ta Note: 7 ET N , AKS MVIST M N i /**% * Oth August s i!i00 T H Hjsm 0m e 600 Page 2 D IS TR IC T ic a g o m n a c Aggregate sales of six commercial paper dealers in the district reporting direct to this bank show a small increase during July. Compared with a year ago, however, sales have increased nearly 50 per cent; three of these dealers show decreases during the month. Sales are reported well scattered throughout the dis trict, but were heaviest in the large centers. Demand for paper bearing high-grade names was very good; buyers who have not bought for two years are com ing into the market. Dealers report that purchases of Government securities and other tax exempt bonds are affecting sales of commercial paper because of the higher returns received. Grain and milling firms are said to be coming into the market for funds. Rates on paper were reported as low as 3^4 per cent, with the majority of sales at 4 and 4*4, and some as high as 5J4. Acceptance transactions as reported to this bank by twenty-seven banks, representing the bulk of the ac cepting business in the district, show a large increase in bills accepted during July, compared with June, while bills bought by the same banks decreased ap proximately 80 per cent. The decrease this month was caused by three of these banks making rather large purchases in June, but buying little or no bills during July. Bills sold continued the decrease begun in June. Bills held at the close of July changed only slightly from the preceding month. Ten of the re porting banks show no transactions in bankers’ ac ceptances during the month. Purchase rates ranged from 3 to 3*4 per cent, show ing no change from last month. The maturities of bills purchased were divided in the following ratios: 30-day, 7.7 per cent; 60-day, 7.0 per cent; 90-day, 75.1 per cent; 180-day, 10.2 per cent. Bills were re ported drawn against meats and provisions, grain, agricultural machinery, coffee, wool, manufacturing equipment, tea, sugar, and hides. 0m m* July A u g . U eeklyOat * Monthly data are averages of weekly figures. In the two weeks ending July 12, increases in de mand deposits were shown in all groups of cities, but since that time the trend generally was downward until August 16, when increases again appeared in all groups, especially large in Chicago. Government deposits did not change materially during July, but were much reduced on August 2; on August 9 they were increased to the highest figure since the mid dle of June. The large increase in investments in Chicago, August 2, is partially accounted for by subscription to the issue of United States Treas ury notes on August 1, for which adjustment on the basis of allotments had not yet been made, but in the week following holdings were still considerably higher than on July 26. Debits by Banks to Individual Accounts W eekly debits to individual accounts by banks in twenty-four leading cities of the district averaged considerably less during July than June, but were more than July a year ago. The decrease is largely due to a smaller volume in Chicago, since aggregate debits for the remainder of the district show increase over June. The Chicago decrease also accounts for the decrease in the total debits of the four largest centers, since Detroit and Milwaukee increased con siderably, while Indianapolis showed only a slight decrease. Last year, Chicago debits for July were only slightly less than those of June and the decrease was more than offset by an increase in Detroit even larger than that of this year. Aggregate debits in the smaller cities show approximately the same in crease over June as was shown last year. centers as well as in each o f the four largest centers, except Chicago, where there was a slight increase. Consideration of the holiday period in July would make the comparison even more unfavorable. Position of the Federal Reserve Bank of Chicago Continued evidence during July pointed to the ability of member banks to finance business and agri culture at this time without calling on the reserve bank for accommodation. The daily average of loans to member banks for July was lower than for June, but the loans did not change appreciably after the decrease in the week of July 12. The daily average of total reserves at the reserve bank during July was much higher than in June, while that of earning assets was much lower, showing a continuation o f the respective trends which began with May. After the week of July 12, however, the changes in these items were not so marked as in the preceding weeks. The ratio of total reserves to de posit and Federal Reserve note liabilities combined averaged 87.3 during July, compared with 79.9 during June and 57.2 in July, 1921. F E D E R A L R E S E R V E B A N K OF C H ICA GO C O M P A R A T I V E P O S I T IO N Debits for the three-week period ending August 16 were considerably less than for the corresponding period in July both in the aggregate for the smaller D E B ITS T O IN D IV ID U A L ACCO UN TS A T C LE A R IN G HOUSE BANKS R A T I O T O A V E R A G E IN 1920 Note: Monthly data are daily averages; weekly data ar* those of statements published each week. Savings Accounts and Deposits The July post-interest period withdrawals of sav ings deposits are reflected in reports to this bank representing approximately 40 per cent of the total savings deposits in the district. Decreases are shown in amount of deposits and average account for the district on August 1 from July 1. The accompanying chart shows decreases slightly smaller for the corre sponding period in 1920, and slightly larger in 1921. Note: Monthly data are average* of weekly figures. Michigan banks report a small increase in savings deposits during the month, while all states in the dis trict show decreases in the average account both August Pag* 3 S A V I N G S C O M P A R E D W I T H 19,20 AVERAGE from the preceding month and a year ago. Compared with a year ago, Michigan again reports an increase of more than 4 per cent in savings deposits, and all other states show decreases ranging from 0.4 per cent in Iowa to 7.8 per cent in Indiana. The major por tion of withdrawals was for investment, but home building and buying of real estate were especially mentioned. Note: Data as of the first of each month. Chart this month differs slightly from charts previously shown owing to increase in number of reporting banks from 189 to 219. Bonds and Investments Bond prices advanced generally during July and the first part of August, but foreign bonds were some what reactionary, strengthening, however, in August. The municipal bond market, which has been heavy, begins to show signs of renewing activities. The steady advance in Liberty bonds suffered a slight reaction the first part of August. The general volume of July business was large, but smaller than that of previous months this year. AGRICULTURAL PRODUCTION AND CONDITIONS Reports from ninety-four county farm bureaus with a membership of 85,141 farmers in Iowa and in those portions of Illinois, Indiana, and Michigan included in this district, show an average yield per acre of wheat for Iowa about four bushels more than last year, for Illinois about two bushels more, while in Indiana and Michigan it is from one to two bushels less. All states except Indiana show a larger yield of oats per acre than last year. Ten individual farm ers in that portion of Wisconsin within this district show the threshing yield of wheat per acre to be 23 bushels against 17y2 last year, and oats, 45 bushels against 30 last year. The average pound weight of wheat per bushel as reported by thirty-nine farmers is 59, and oats, 31. The estimated 1922 wheat harvest for all countries on which figures are available shows a slight increase over 1921. ESTIMATED CROP PRODUCTION In Thousands of Bushels Estimated by United States Bureau of Agricultural Economics S e v e n t h R eserve D is t r ic t U n it e d S tates A u g u st 1, F i n a l , A u g u st 1, F i n a l , 1922 Corn .................... 952,502 Oats ........................... 480,822 Winter Wheat .................... 66,913 Spring Wheat .................... 5,555 Barley* ........................... ................. White Potatoes* .......................... Hay (In thousands of tons).... 19,762 Peaches* ........................................ .. Apples* ................... ......................... Sugar Beets* (In thousands of tons).... „. 1921 967,277 385,091 58,102 4,820 .. .._____ 16,034 . — . 1922 3,016,950 1,251,156 541,809 263,392 191,507 440,000 1921 3,080,372 1,060,737 587,032 207,861 151,181 347,000 110,368 56,000 202,000 96,802 32,700 98,100 5,008 7,780 *District figures not available. Barley yields in this district appear to be larger than last year. The hay crop is exceptionally good. The reports anticipate a slightly smaller yield of corn per acre except in Iowa, where a larger yield than last year is expected. The potato crop is reported better than the previous year, except in Illinois. The acreage of hay, potatoes, and corn is reported larger than in 1921. However, the corn acreage in the Page 4 August separate state of Illinois is indicated to be less. Chinch bugs are reported upon the corn in Iowa, Illinois, and Indiana. Government reports for August 1 were more favor able than a month ago and production estimates were increased except for wheat. The Michigan sugar beet crop is forecast at 726,000 tons compared with 1,153,000, final in 1921, while the Wisconsin crop is estimated at 84,000 tons compared with 148,000 in 1921. Grain Marketing July receipts of oats and corn at primary markets were less than in June, but wheat increased; only corn was larger than in 1921. Total shipments of D A I L Y R A N G E O F G R A IN P R I C E S A T C H I C A G O Business Conditions Throughout the United States Special Summary By the Federal Reserve Board August 31, 1922 H E outstanding feature of the month has been the inherent soundness which the general busi ness situation has manifested in the face of the difficulties encoun tered. This has been shown by the continuance of activity at a rela tively high level despite labor dis turbances and despite the recession of activity normally expected at this season of the year. Prices of important commodities continued their upward tendency during July but during August conflicting ten dencies were apparent. The excel lent agricultural prospects provide an encouraging outlook for the fall trade. Furthermore, increase of de mand for certain commodities to compensate for restricted output or delay in placing orders is also in prospect. Even so, business must necessarily proceed under handicaps for some time to come, as a result of fuel shortage and transportation difficulties. Manufacturing activity in gener al has been maintained at a high level. In those industries, such as automobiles and building construc tion, in which seasonal recession is T shown, activity is still far in excess of a year ago. Cotton manufactur ing likewise shows some decrease but the reverse is true of woolen manufacturing. The output of nonferrous metals other than copper has also increased, but iron and steel activity shows some decline. Bi tuminous coal production has in creased steadily during the present month. The labor situation showed con siderable improvement during Aug ust. The bituminous coal strike has been settled in many fields and the majority of the New England cot ton mill workers have returned to the factories. Agricultural prospects on the whole continue very satisfactory. Wholesale trade suffered a decline during July as compared with June in all lines except dry goods, but most lines were in a better position than a year ago, especially hard ware. Retail trade, however, was slightly smaller than last year. Financially, few new develop ments occurred during the month. The rapid decline of the mark has been the outstanding feature of the foreign exchanges. corn and wheat were more than in June, but oats de clined; wheat only was less than a year ago. CHICAGO SHIPMENTS OF GRAIN AND FLOUR In Thousands F lou r B b ls. By W heat B u. C orn B u. O ats Bu. R y e B a rl ey Bu. B u. 4,557 7,096 2,793 10,362 2,631 10,353 1,242 2,506 3,023 39 886 76 444 847 1,128 1,423 1,364 924 4,240 5,065 2,176 14 111 11 B oat — July, 1922 ......114 June, 1922 ......131 July, 1921 ........... B y R a il — July, 1922 ..... 569 June, 1922 ......611 July,1921 _....573 Operations of these mills were at 44.1 per cent of capacity— based on a 24-hour working day— during July, while in June they were at 42.0 per cent of ca pacity. The lower operating ratio in June is partly traceable to one more actual working day in that month. In July, 1921, operations were at 43.6 per cent of capacity. P r o d u c tio n P er c e n t c h a n g e f r o m 163 218 242 There is more of a tendency in the district to hold the oat crop than wheat. The movement to terminals is not burdensome at present, but there are some complaints of inability to get cars. The trend of prices paid to producers in the United States for principal crops decreased 0.3 per cent in July, accord ing to Government estimates. The trend of grain prices at Chicago is downward. Domestic business is light, but a liberal export de mand continues in wheat, corn, and rye, and a moderate business in oats. July future sales of produce on exchange as evi denced by the sales of stamps in the first revenue district of Illinois were slightly more than in June, and were 41 per cent more than the low point of 1922 which occurred in February, but were only 59 per cent of the 1922 high in April. J u l y , 1922 J u n e , 1922 J u l y , 1921 Wheat flour ........... ....... (bbls.)....... 372,264 + 1 .4 + 0 .4 All other flour...............(bbls.)....... 36,273 — 4.3 + 8.4 Total ..... ................. (bbls.)........ 408,537 + 0 .9 + 1.0 Movement of Live Stock July receipts and slaughter of live stock in the seventh district were less than in June. SLAUGHTER IN JULY C a tt l e District .................. 216,332 Sixty-eight markets in United States ....... 669,010 H ogs S heep 725,932 273,981 91,972 C alves 1,939,818 955,790 332,502 R E C E IP TS OF L IV E STO CK UNITED STATES VISIBLE SUPPLY OF GRAIN Stocks in public and private warehouses at principal points of accumulation, at lake and seaboard points and in transit August 12, 1922. Figures supplied by the Secretary o f the Chicago Board of Trade. In Thousands of Bushels A u gu st 12, 1922 W heat Warehouses and Afloat....26,596 Bonded ............. ...................... 2 ,0 8 9 J u ly 8 , ugu st O ats 3 6 ,5 8 7 185 R y e B a rl ey 916 2 ,5 2 7 73 47 2 8 ,7 7 9 4 2 ,4 0 0 389 1 ,1 9 5 265 1 ,4 5 5 186 1 2 ,5 2 9 4 7 ,6 2 5 44 2 ,8 4 4 19 2 ,0 5 3 10 1922 Warehouses and A f l o a t . . .. 1 6 , 8 7 9 Bonded ............. ...................... 3 ,7 2 3 A C orn 1 0 ,4 3 4 13, 1921 Warehouses and Afloat....39,514 142 Bonded .............. ...................... Canning August returns to this bank show the pack of late peas exceeds that of 1921 even more than was re ported last year for the early crop. Twenty-seven factories in Wisconsin alone average a gain in the number of cases packed of nearly 90 per cent, only two factories in the district showing a decrease. The Michigan cherry crop is likewise much larger than last year, seven factories having reported an aggre gate increase of nearly 120 per cent. Three returns show similar gains for this year’s canning of berries in addition to five reports from canners not packing berries in 1921. Bean packs to date vary, the red kidney variety being larger than in 1921, but aggre gate packs of green beans at five Michigan and W is consin factories were about 40 per cent less than last year. Prospects for a large tomato pack seem gen eral in various parts of the district. Flour Production July production of flour in the district as reported to this bank by forty-five millers increased approxi mately 1 per cent over the preceding month and a year ago. The wheat flour output continued the in crease started in May. S L A U G H TE R OF LIV E STOCK Per hundred pounds at Chicago W e e k ended A u gu st 12, C lass 1922 Native Beef Steers 750-1,050 lbs........... ....... $ 8.80 1,500-1,800 lb s .............. ....... 10.45 General Average Fat Cows and Heifers ....... 6.05 Canners and Cutters.... ....... 2.85 Calves ........................... ....... 10.75 Stockers and Feeders.. ....... 6.65 Hogs ............................... ....... 8.80* Sheep ............................. ....... 6.30 Yearling Sheep ........... ..... 10.50 Lambs ............................. .... .. 12.07 J uly M o n t h s of Ju ne J u ly 1922 1922 1921 $ 8.75 $ 8.40 $ 7.40 10.25 9.50 6.60 3.20 9.10 6.20 9.80 6.40 10.70 12.90 9.40 8.95 6.40 3.10 9.40 6.90 10.40 6.75 10.25 12.15 8.45 8.10 5.40 2.75 9.75 6.10 9.75 5.40 7.35 10.30 ‘ Average August 1 to 12 inclusive. August Page 5 The movement of feeder cattle, calves, and sheep back to the farms, although less in July than in June, showed a large increase over a year ago. The price of live hogs to the middle of August has declined steadily from the June average. Meats and Provisions Forty meat-packing companies in the United States reporting direct to this bank show a decrease of 0.7 per cent in July dollar sales compared with June, and these were 0.9 per cent less than a year ago. July shipments of meats and lard from Chicago were less than in June. Most firms report that to the middle of August the coal strike had not affected their output. Domestic demand for packing house prod ucts, although somewhat better toward the middle of August, is reported as being affected to some ex tent by unsettled transportation conditions and de creased buying power caused by disturbances in other industries. The principal wholesale price change at Chicago was on pork, which with the exception of loins, was downward in July and the first half of August. Mut ton prices were stronger at wholesale in July than in June, and beef was firmer toward the end of July, but both had slightly downward trends in the first part of August, while veal advanced. Retail prices of meats at Chicago in general followed wholesale during July. COLD STORAGE HOLDINGS OF FROZEN AND CURED MEATS IN THE UNITED STATES* In Thousands of Pounds A u gu st 1 1922 Frozen Beef ... .................... 27,743 Frozen Pork ........ 117,821 Frozen Lamb and Mutton 3,307 Cured Beef and in process 19,234 Dry Salt Pork and in process _____ 179,940 Pickled Pork and in process ............. 386,685 M is ce lla n e o u s M eats ........... 54,752 Lard ......... 143,521 A u gu st 1, J u l y 1, A u g u st 1, F iv e - Y ear 1922 1921 A verage 31,593 128,962 3,720 19,113 66,262 149,435 6,751 17,829 118,540 129,449 4,675 26,571 186,948 231,512 316,299 391,474 346,623 80,995 194,490 378,186 69,449 140,232 54,878 154,254 ‘ Include stocks in both cold storage warehouses and in pack ing plants. Stocks of cured meats at the principal western packing points were more on August 1 than on July 1, but lard stocks were less; both were less than a year ago. Reports from meat-packing companies indicate that shipments forwarded in July for export were slightly more than in June, although demand had a tendency to fall off in the last half of the month and in the first half of August. Germany continues to be one of the best markets for packing-house products. Prices abroad are about on a par with those in this country plus transportation. Reports indicate little change since July 1 in stocks of consigned goods already abroad, although they are possibly a little heavier than a month ago in England, but not so heavy on the continent. Butter, Cheese, Eggs and Poultry Storage holdings of dairy products are increasing. The production of butterj in this district and in the United States was less in July than in June, but more than in July, 1921; the Wisconsin output of cheese was less in July than in June; and the production of both butter and cheese continued to decline the early part of August. The receipts of butter, cheese, and eggs at Chicago were less in July than in June, but more than for the same period last year; and the receipts of poultry at Chicago and of cheese at W is consin markets showed a decline in June over July. The wholesale prices of eggs, poultry, and 92-score creamery butter declined in July; but the prices of wholesale cheese at Plymouth, Wisconsin, showed a slight increase. COLD STORAGE HOLDING OF POULTRY AND DAIRY PRODUCTS IN UNITED STATES* In Thousands of Founds , Poultry ............ ............ Butter ..................... Cheese ....................... Case Eggst ................... — Frozen Eggst ______ — ... A u g u st 1, A u g u st 1, J u l y 1, A u g u st 1, F iv e - year 1922 1922 1921 A verage 30,678 34,387 105,63969,294 57,58743,542 10,225 9,811 27,874 23,538 21,188 85,542 56,316 7,605 27,952 31,403 100,521 68,691 7,158 19,531 ‘ Include stocks in both cold storage warehouses and packing plants. tin thousands of cases, 30 dozen each. JReports of individual producers, Iowa Creamery Butter Manufacturers’ Association, covering Iowa, and the American Association of Creamery Butter Manufacturers, covering most of the states. INDUSTRIAL EMPLOYMENT CONDITIONS The outstanding characteristic in the labor situa tion during the month of July has been the steadiness with which industries have maintained employment despite industrial disturbances. Total employment, except for that of the railroads, suffered no decline. The cement, brick, and clay products industries were delayed by the coal shortage and since early August many plants have suspended operations entirely. Lumber manufacturing showed no let-up in its re quirements for workers, nor did the automobile and accessories industry, although some of the smaller plants laid off men. The greatest change was shown by shoe factories which reported an increase of 12 per cent over the previous month. Packing plants added about 3 per cent more men and the manufac turers of iron and steel, about 2 per cent. The Em ployers’ Association of Detroit, for the week ending Page 6 August August 1, reports a slight decline, the first deviation from a steady increase since the beginning of the year. LABOR REPORTS FROM FIRMS IN THE SEVENTH DISTRICT D i s t r ic t C h ic a g o Number of firms reporting............... .................... 242 Total number employed July, 1922— ........... ..... 239,737 Percentage change in number employed as compared with (a) the preceding month.................. — ..... + 0 .7 (b) the same month a year ago.................. +28.5 Percentage change in amount of payroll as compared with (a) the preceding month.............. + 0 .8 (b) the same month a year ago.................. +24.6 Percentage change in pay per man as com pared with (a) the preceding month................... ........... — 1.3 (b) the same month a year ago----------- ----- — 3.0 Percentage of production to ordinary capacity: (a) July, 1922 ..................... 73 (b ) June, 1922 ...... 76 55 (c) July, 1921 ..... .................................. — 52 45,761 + 2 .2 + 5.5 —0.1 + 0.3 — 2.3 —4.9 69 73 56 The pay per man for the month shows a slight de crease which can be accounted for by the seasonal inactivity, the holidays, and the closing of a number of factories for inventory or repair. None of the in dustries covered report wage reductions, while many mention specific increases. The wage schedules for common labor have increased in many localities in the last thirty days. W oodworking industries in the Chicago district have made advances to bring wages closer in line with other industries; a brick concern made a 5 per cent increase effective July l ; an iron and steel concern raised wages 10 per cent July 24; other increases have ranged from 2J4 to 5 cents an hour. Public works, road construction, and munici pal improvements of many kinds, are becoming im portant factors affecting the supply of common labor for other industries. BITUMINOUS COAL PRODUCTION The coal miners have returned to work in Illinois and operations have been renewed in other fields un der the terms of the Cleveland agreement. Mines in the W est and Southwest and parts of the Pittsburgh district are reported still closed, but they represent only a small part of the total bituminous production of the country. With the Government control of dis tribution for the next few months, the transportation question is now the chief remaining problem in the bituminous situation to be adjusted in order to ob viate the danger of a severe shortage. The anthra cite situation is unchanged. Reserve stocks of coal are fast disappearing. Light and power utilities in this district report supplies adequate to carry them from a few days to a month. Railroads average about twenty days’ supply on hand in addition to current shipments which they may be able to obtain on priorities. The larger industries report less than a month’s reserve. Some manufac turers are endeavoring to meet the situation by sub stituting fuel oil, while others are turning to the public utilities for assistance. Many smaller concerns face a complete shutdown unless they obtain fuel. The supply of anthracite is practically exhausted; the remaining stocks consist of pea and smaller sizes, most of which have already been sold, and are await ing delivery. Retail supplies are the lowest they have been for a long time. Production of bituminous coal has been slowly in creasing since the latter part of July, owing to the gradual improvement in traffic conditions affecting the operating mines. Although approximately 4,600,000 tons were mined during the second week of August, an increase of nearly 300,000 tons over the previous week, this relatively small output will not go far toward meeting the increasing demand ac centuated by winter fuel requirements. Anthracite production is still limited to the dredg ing of steam sizes from the rivers, and now averages about 27,000 tons per week. With 7,000,000 tons as the normal average monthly production o f hard coal, the country faces on September 1, a potential short age of approximately 33,000,000 net tons. Demand in local markets diminished somewhat following the Government regulation of distribution and the report of an early settlement of the strike, but is still in excess of offerings. The high prices of a month ago, which reached a peak of $13.50 per ton, dropped during the first week of August, and the withdrawal of large buyers from the market caused a decided weakening in the price of all coals. W est ern Kentucky and eastern coals had dropped to a price ranging from $6.50 to $7.00 on August 22, but were practically off the market, while Indiana coal was quoted at $7.00, with offerings light and buying confined largely to railroads, public utilities, and other industrials in the preferred class. Industrials not en titled to priorities have been making inquiries for fuel oil and gas oil in the petroleum market. Prices on fuel oil on August 22 were strong at $1.35 to $1.45 a barrel and on gas oil at 3T2 to 3J4 cents a gallon. / MANUFACTURING ACTIVITIES AND OUTPUT Automobile Production and Shipments A seasonal decline in automobile production was in evidence during July. Manufacturers, reporting through the National Automobile Chamber of Com merce and direct to this bank, representing 99.6 per cent of total June production, produced 222,657 pas senger cars in July compared with 261,924 in June, a decrease of 15.0 per cent. In July, 1921, there was a total production of 165,574 cars. The truck output decreased 17.3 per cent for manufacturers who pro duced 20,891 trucks in July compared with 25,274 in June. Shipping figures for all manufacturers as reported by the National Automobile Chamber of Commerce indicate a larger proportionate decrease in shipments for July compared with June this year than last. July carload shipments this year fell off 17 per cent from June, compared with 4 per cent a year ago; boat shipments decreased 11 per cent compared with 6, a year ago; while driveaways were reduced at about the same rate for the two years. FACTORY SHIPPING FIGURES FOR ALL MANU FACTURERS* C arloads D riveaw ays B oat 1922 1921 1922 1921 1922 July ................... f28,412 19,514 128,022 15,533 16,855 June ................... 34,230 20,269 33,857 18,834 7,737 May ................... 33,416 18,608 28,827 15,193 7,406 April ................... 31,334 20,187 22,381 14,197 2,960 March ................. 27,753 16,287 16,917 9,939 560 February ........... 19,636 9,986 10,173 7,507 180 January ............. 15.357 6,485 7,479 3,185 143 1921 3,726 3,947 2,381 1,619 75 99 93 *Reported by National Automobile Chamber of Commerce. IPartly estimated. Price reductions have been announced by a number of companies since the middle of July. August Page 7 Iron and Steel Production of iron and steel was about the same in July as in June. The shortage of coal forced the banking of some furnaces, and reduced operations in this district as well as in the entire United States. The active demand for iron and steel continues. July sales were only slightly lower than those of the previous month. Prices increased and collections were good. PIG IRON AND STEEL PRODUCTION IN GROSS TONS June J u ly 1922 454,937 2,362,455* Pig Iron Production 1922 Illinois and Indiana.............. 472,179 United States ....................... 2,400,465 Steel Ingot Production (thirty companies) ............. 2,487,104 tUnfilled orders, United States Steel Corporation ............... 5,776,161 2,634,477 5,635,531 J uly 1921 201,175 864,642 803,376 4,830,324 Shoe Manufacturing, Tanning and Hides Production and shipments clearly reflect the one to two-week shut-down by many of the shoe factories for annual vacations, July inventories, and factory al terations. However, July production and shipments although less than in June were more than a year ago. Shipments were equal to 102.0 per cent of the month’s production; twenty companies had unfilled orders on hand amounting to 320.6 per cent of their July production and 315.0 per cent of shipments. Stocks on hand July 31 were 127.4 per cent of July shipments and 129.4 per cent of the month’s pro duction. PERCENTAGE CHANGES IN JULY FROM PREVIOUS MONTHS Based on pairs and compiled from direct reports to this bank N •Revised figures. tAt close of month. um ber of Production ................................... Stocks on hand at end of month Shipments ................................... Unfilled orders on hand at end of month ................................. PIG IRON AND STEEL PRICES AT CHICAGO Per Gross Ton W eek A u g u st 1922 16, July M o n t h s of June J u ly 1922 1922 1921 $ 3 1 .6 5 2 4 .6 5 $ 3 0 .0 0 2 3 .2 5 $ 3 6 .8 5 1 9 .3 5 3 7 .5 0 3 6 .9 6 3 8 .1 4 Pig June 1922 — 1 5 .6 F IR M S 26 21 25 + — 20 N um ber July OF F IR M S 1921 16 + 1 5 .2 ' 11 + 2 3 .6 + 1 5 .2 16 + 2 3 .0 1 .4 4 .4 7 + 1 1 .1 •Eight firms had slightly smaller production than in July, Direct reports to this bank show July production of agricultural implements in the district seasonally less than June by reason of interruptions for inventories and factory alterations. Payrolls for the last week of July were less than for the same period in June. Six of the eight reporting firms had a larger volume of shipments in July than in June, and seven had shipments in excess of the corresponding period last year. There were no important price changes in agricul tural machinery during the month; however, there was a slight decline in the prices of plows and harrows. Agricultural pumps shipped by manufacturers in this district exceeded June shipments in number and value. For the entire United States, the units shipped were more, but the total value was less. A slight falling off in July production of reporting tanneries in this district from that of June was at tributed to a growing scarcity of unskilled labor in the wet work departments. Payrolls for the last part of July increased over the corresponding period in June. The seven reporting companies had in the aggregate a larger volume of sales in July than a year ago; however, three report less business than in June and two, more. Demand for leather which was slack during the last half of July, showed improve ment during the first week in August. Reports from the Bureau o f Census show United States stocks of the principal kinds of leather, except offal, less on July 1 than on June 1. Most important holdings, excepting cut soles, cattle upper, harness, goat and kid leathers, declined from those a year ago. Leather prices are increasing and this is reflected to some extent in the wholesale prices of shoes. The market for packer hides was more active at Chicago in July than in June, but trading in other kinds was somewhat limited, although prices except ing lamb skins, were higher in July than in June. Raw Wool and Finished Woolens PRICES OF GREEN HIDES AT CHICAGO* Iron ........................ —.......... $ 3 3 . 1 5 Malleable .................................. 3 0 .0 0 Composite average 14 iron and steel products in the .......... 3 9 .3 2 Agricultural Machinery W eek M onths oFt J une J uly Manufacturers’ purchases of raw wool in the dis trict fell below those of June, although shipments and receipts at Chicago were more than in June, but less than a year ago. A u g u st 12, J uly 1922 1922 H ides Heavy Native Steers (packer)— $20.00 $18.77 Butt Brand (packer)........................ 18.50 17.00 13.06 Heavy Native Steers (c o u n t r y ) 14.50 Branded (country) .......................... 11.50 10.38 During the quiet market at the close of the month, the prices of raw wool had a tendency to weaken, but resumed strength the first week in August when manufacturers seemed inclined to buy. S kins Spring offerings of light-weight finished woolens and worsteds show an advance of 3 to 5 per cent in price over last year, but this is not so large as antici pated, for raw materials show a much larger increase. Demand for worsteds has been slow; they have not followed the market for raw material as closely as woolens. July shipments and receipts of green hides and skins were less than in June, but exceeded those of a year ago. Direct reports indicate that purchases of green hides by tanners in the district were less than in June. Holdings o f green hides in the United States on July 1 compared with June 1 show the following changes: cattle hides, — 0.3 per cent; calf and kip Page 8 August Calf .......... ................ .......................... 19.50$: 18.50 1.30 Lamb (p a c k e r ) ......... .....- .......... .. 1.43 1922 $16.75 15.50 10.80 8.30 1921 $12.87 13.12 8.19 4.00 14.70 1.33 16.63 .55 •Prices per hundred pounds; lamb skins, price per skin. tFive weeks’ average in June, four in July. $Range $16.00 to $23.00. skins, + 6,0; goat and cabretta skins, + 8.6; sheep and lamb skins, — 1.5 per cent, but all except goat and cabretta skins were less than the previous year. Clothing and Tailoring Industry While production and shipments in the wholesale clothing industry were somewhat heavier during the month o f July, the increased activity was largely due to seasonal factors and does not indicate any real improvement in the industry. Orders for fall mer chandise are still lagging about 13.0 per cent behind those of the fall season last year, with production and shipments showing a corresponding decline compared with that period. Orders this season are coming prin cipally from the larger centers; the merchants in the smaller towns still buying, for the most part, on a close basis. Fall prices are approximately 10.0 per cent below those of a year ago, but the present wool situation indicates that some adjustment will have to be made. The seasonal slump in the Tailors-to-the-Trade industry continues, with orders, production, and ship ments falling considerably below those of June. In spite of this drop, and the fact that July is normally a dull month, the industry is in a much better con dition than it was a year ago. PERCENTAGE CHANGES IN WHOLESALE CLOTHING Number of firms reporting................................................... 7 Orders for fall from opening of season to date of report compared with orders during a similar period of time for last year’ s fall season............... ................................ .— 12.6 Number of suits made as compared with— (a) June, 1922 .....................................................................+ 9.4 — 12.1 (b) July, 1921 .......................................... Number of suits shipped as compared with— (a) June, 1922 ..................................................................... +35.4 (b) July, 1921 ..................................................................... — 15.7 PERCENTAGE CHANGES IN TAILORS-TO-THE-TRADE Number of firms reporting................................................... 11 Orders for suits compared with— (a) June, 1922 ..................................................................... — 35.4 (b) July, 1921 ..................................................................... +31.8 Number of suits made as comparedwith— (a) June, 1922 .....................................................................— 36.6 (b) July, 1921 ......................................................................+35.8 Number of suits shipped as compared with— (a) June, 1922 ..................................................................... — 37.7 (b) July, 1921 ..................................................................... +36.2 Furniture The success of the June-July semi-annual markets is again reflected in current reports from forty-two furniture manufacturers in this district. July orders show an increase even over the volume booked in June, and unfilled orders on hand August 1 show an increasing demand. Buyers maintained their policy of buying in small quantities. PERCENTAGE CHANGE IN MOVEMENT OF FURNITURE D is t r ic t C hange F rom 1922 J une July Number reporting* .......... $2,782,390 42 Orders .............................. 1,826,320 Shipments ........................ 66,405 Cancellations ................... Unfilled orders, August 1 3,702,669 Production percentage of 77.8 normal ........................... + 14.0 + 1.7 — 59.4 U n it e d S tates C hange J u ly F rom Ju ne 1922 $4,429,105 92 3,061,137 130,835 5,379,306 + 13.4 — 2.7 — 38.8 __ _ 79.2 *Based on combined returns to Associated Furniture and to this bank. Figures available from sixteen manufacturers in the district reporting direct to this bank show the con dition of the industry improved compared with that of a than ders, than year ago. July orders were 5.1 p,er C£nJ m,ore in July, 1921, shipments, 36.9, and unfilled or 8.4, while cancellations were 63.2 per cent less a year ago. Boxes and Containers Reports to this bank from fourteen manufacturers of boxes and containers in the Seventh Reserve dis trict indicate very little change in the industry during the month of July. Sales and production remained at practically the same level reached during June, thirteen concerns averaging 76.8 per cent of ordinary capacity. Compared with a year ago, conditions show a marked improvement. Below are percentage com parisons of July with June, 1922, and July, 1921. N umber R eporting Sales in dollars............... ............... 14 Box board consumption.. .................. 10 J une J uly + 0 .3 1921 +37.1* —0.4 + 3 8 .9 1922 ’ Thirteen firms. Confectionery July candy sales as reported to this bank by dealers in the district were larger than last month and a year ago. Returns from confectionery factories show re ductions since June in the number of men employed, but the number is still ahead o f 1921. Paper Industry Fourteen paper mills reporting to this bank were employing 2.7 per cent more men at the end of July than in June. Compared with a year ago, the per centage was 21.3 in the number of men and 11.9 in the amount of payrolls. July purchases of all classes of paper as shown by statistics of the National Paper Trade Association were larger than during June, and for most classes were ahead of a year ago. Shipments fell off for cover and writing papers, tissue, and bags. Stocks on hand August 1, compared with January 1 inventories, ranged from 61 per cent for tissue to 112 for cover paper. Returns from five wholesalers in this district show dollar sales above July, 1921, and for three dealers, larger than last month. Sales by a sixth firm fell off both from June and a year ago. Cement Cement reserves are running low; most of the plants in the district are operating on reduced sched ules and many of them have ceased operations en tirely because of their inability to secure fuel. Shipments in July were heavier than those for June. Many of the plants have large contracts on their books which they will be unable to fill unless opera tions can be resumed shortly. The heavy volume of shipments is due to the large amount of cement roads, concrete pavements, and other public constructon work in progress, as well as to the extensive building activity. Prices made no further advances during July and in a few cases declined slightly from increases made during June. For the country as a whole the total output of cement was fully as large in July as in June according to figures issued by the United States August Page 9 Geological survey. Shipments also increased slightly maintaining a volume about 20 per cent ahead of the output; stocks fell off correspondingly. Lumber Sales of lumber declined 5 to 26 per cent during July, as reported by manufacturers and dealers of the district. Of fifteen reports only one gave an increase in the volume of business for the month. The decline was largest the latter part of July and early August; the normal seasonal decline was perhaps augmented by the strike situation. Buyers hesitate to commit themselves for the future and cover only immediate requirements. Despite the slow action of buyers, dealers have experienced some difficulty in filling or ders, by reason of delayed shipments from southern and western mills, which are accepting new business subject to railroad conditions. Unfilled orders indi cate a large unsatisfied demand. Maple flooring mills show a general decrease in activity; stocks have been reduced approximately 9 per cent and unfilled orders, 5 per cent during the month, according to reports of twenty mills. Operations in the mills of Wisconsin and Northern Michigan have been retarded by a shortage of labor in the logging camps. On the west coast, forest fires are still seriously interfering with the output of logs. At Chicago the receipts of lumber for the month were 21 per cent less than in June, but 40 per cent ahead of a year ago. While there is little uniformity in prices, definite advances have been made by both mills and dealers. Brick Brick orders were still greatly in excess of stocks early in July; twenty-five plants in Illinois, Indiana, and Wisconsin had a demand of 60 per cent over supply, according to the latest available report of the Common Brick Manufacturers’ Association. Up to that time only one plant had closed and production had not yet suffered materially from the lack of fuel, but since then several plants have ceased operations entirely, and others are merely trying to tide over until a strike settlement can be effected. In some plants boilers have been equipped with burners for the use of fuel oil. The demand for brick during July was above nor mal at this season. Street paving has been carried on extensively, and as soon as the pressure of work on the farms lessens, Iowa farmers are expected to be in the market for a larger volume of both drain and building tile. Supplies, however, are running lower. Some reports from plants that have already closed state that their supply of brick on hand will be ex hausted by September 1. However, the selling price of brick made very few advances during July. Construction Contracts and Building Permits Building activity in the district was equal to last month, public construction work increased, but the building of residences declined. Contracts awarded during July amounted to $83,159,795 or about 7 per cent more than those awarded in June. The increase Page 10 August over a year ago is more than 100 per cent, the largest shown in any recent month. Conditions, however, are not uniform throughout the district; Indiana showing a decided increase during July; Illinois, a slight increase, and Michigan, a marked decline. The contracts awarded for residential construction fell off 27 per cent; all states except Indiana shared in the decline. Twenty-two out of thirty cities for which permit figures have been obtained, show decreases in valua tion. The decreases are considerably larger than for June, especially in the larger cities. PERMITS AND COSTS OF BUILDING CONSTRUCTION Per cent change from J u l y , 1922 J u n e , 1922 P e r m it s E s t im a t e d P e r m it s C ost C ost Chicago .... 1,144 Ind’apolis .. 1,167 Des Moinel 196 Detroit ....... 2,418 Milwaukee.. 3,041 25 other cities ....... 3,748 Total ......11,714 $16,214,300 3,349,348 776 315 7,389,769 3,218,983 — 19.5 — 11.8 — 12.5 — 15.7 — 12.2 J u l y , 1921 P e r m it s C ost — 39.0 +46.3 — 50.1 — 10.7 — 18.8 +51.7 +35.5 +98.0 +70.8 +19.0 + 15.8 +139.0 + 53.9 —■ 9.3 + 56.2 10,387,691 — 7.3 — 7.1 +37.5 $41,336,406 — 12.2 — 23.2 +39.3 + + 85.9 30.5 Transportation Conditions Freight carloadings in the Western territory and throughout the United States for the month of July, increased over the corresponding period of last year, but were slightly below last month’s figures. The western grain movement which is now progressing shows a 28 per cent increase over the previous month, but is less than the shipments for the corresponding period of last year. REVENUE FREIGHT CARLOADINGS For Four Weeks Preceding Dates Named W estern T e r r it o r y G r a in and G r a in L ive P roducts S t o c k July 29, 1922 126,269 77,064 M e r c h a n - M is c e l C oal dise lan eou s 60,066 305,493 T otal 729,155 1,298,044 U n it e d S tates — July 29, 1922 200,914 106,622 353.738 925,397 1,713,412 3,300,083 Percentage Change Current Period from Preceding Periods W estern T e r r it o r y — July 1, 1922 +28.8 July 29, 1921 — 18.0 — 10.7 +17.1 + 8.8 — 38.3 — 5.9 + 7.5 — 2.7 +36.1 — 1.2 + 14.2 — 9.2 + 13.2 — 6.6 — 44.3 — 6.8 + 12.5 — 5.5 +67.4 — 4.7 + 10.0 U n ite d S tates — July 1, 1922 +25.8 July 29, 1921 — 10.3 Live stock shipments have declined since the first day of the year, but for July were about 17 per cent more than those of 1921. Coal loadings through out the United States show a decrease compared with last month, although in the Western territory about 8 per cent more coal was loaded. The larger increase over last year in the miscellan eous group may be accounted for by the shipments of ore and forest products, which are much more than those of 1921 and are running about even with the shipments of 1920. Idle freight cars, because of no requisition for the week ending July 31 numbered 174,927, a reduction of 64,298 cars in a month’ s time; of the latter figure 16,291 were coal cars, 38,734, freight cars, and 9,273, miscellaneous cars. CARLOAD SHIPMENTS OF NEW FRUITS AND VEGETABLES FOR THE UNITED STATES N ew A ppl e s This season to July 29 ....... 3,091 Last season to July 29 ____1,176 P e ac h e s W ate r P ears m e lo n s P otatoes O n io n s 10,813 1,216 34,596 _ _ 46,672 7,597 14,353 1,367 31,106 39,081 6,669 MERCHANDISING CONDITIONS Wholesale Trade Gains over 1921 in dollar sales as noted last month by all groups of wholesalers reporting to this bank, were maintained during July, except for groceries. Shoe sales averaged the largest increase so far this year, while that for hardware exceeded any shown since similar data have been collected (September, 1921). Compared with June, individual sales fell off for all but nine firms. Prices continued at the June level during July with a slight upward tendency being felt in most lines. In hardware this was confined especially to heavy staples, while certain manufactured products are still being reduced. With the exception of sugar, which reached a new high record, no general changes were reported by grocers, although various commodities were readjusted here and there in both directions. The dry goods, hardware, and drug groups report higher inventories than at the beginning of the month, but over two-thirds of the firms are still carrying lower stocks than a year ago. Although dollar col lections by twenty-nine dealers, out of fifty-one, were ahead of a year ago, the ratio to accounts outstanding June 30, is lower for most of the groups this year than in 1921. N et Sales— ■Change M erchandise N umber Groceries ........... Hardware ........... Shoes ................. Dry Goods ....... Drugs ................. Auto Accessories J u n e , 1922 — 17.3 — 19.8 — 39.0 ....... 43 ........ 18 ....... 12 ____ 11 ........ 11 ___ — 0.2 — 10.2 9 — 6.3 from J u l y , 1921 — 7.4* + 2 0 .6 + 15.8 + 7-5 + 5.2 + 7 2 .7 *42 firm s. Chain Store Sales July sales reported to this bank by four chain stores are larger than last month and for three firms are ahead of a year ago. A fifth, giving data for 1922 only made a gain over June. FEDERAL RESERVE BANK OF CHICAGO STATISTICS OF SALES BY FOUR GROCERY CHAINS (1921 Monthly A verage— 100) January 1922 _____________________ ____ _______ _____ 104.2 1921 101.4 F e b ru a ry ....................................... ........... .............................. 104.4 106.6 102.6 89.9 89.0 92.7 T urnN et S a l e s -C h a n g e S t o c k s -C h a n g e over No. J u n e , 1922 J u l y , 1921 J u n e , 1922 J u l y , 1921 + 3.5* — 10.7* — 17.9 + 2.4 Chicago ..... 12 + 12.4 — 1.2t — 27.2 + 2 .I f Detroit ....... 5 + 0.7 — 6.8 — 4.7 Des Moines 3 — 25.8 Indianapolis 3 + 3.6 — 28.0 Milwaukee.. 4 — 24.6** + 2.3 — 1 -711 — 3.0tt — 2.6§ — 6.7 [| Outside ..... 42 — 20.2J — 5.2 — 7.2 — 9.0 — 1.1 D is tr ic t___69 — 26.7 R ate 4.1* 3.Of 3.4 2.6§§ 2.0U 1.8 *9 firms; t 4; J 39; § 35; | 34; tf 36; **66; tt 57; f t 56; §§58. ] Foreign Commerce and Stock of Gold A substantial increase in gold imports and slightly de creased commodity exports and imports are the outstand ing features of the foreign trade situation of the United States for the month of July. Compared with June, ex ports of merchandise declined 8.9 per cent in value, while imports dropped about 3.6 per cent. The favorable trade balance shows a reduction of nearly 63.3 per cent, which the Department of Commerce believes to be a sign of improvement, pointing to a gradual return to more normal relations between our exports and im ports. MERCHANDISE* J u ly J u ne J uly S even M onths 1922 1922 Imports ........... 251,000 260,461 Exports ........... .. 305,000 334,684 1921 178,159 325,181 1922 1,670,408 2,125,628 EXF.tp8 nr°tl' 54,000 147,022 455,220 •Figures from dollars. Department of 1921 1,498,635 2,859,658 99.9 March ........ ..... .......................................................... 11S.9 April ........................................... ............................. .. 116.0 May ........... ................... ............. ......... .......... .......... 110.7 June ---------------------------------------------------------------- 111.0 July --------------------------- ------------- ------------- ------ 115.1* Retail Trade For the fourth consecutive month aggregate dollar sales of department stores reporting to this bank are ahead of 1921. The increase, however, has not yet become general among the smaller stores, two-thirds of which continued during July with lower sales than last year. The seasonal decline from June, as shown by all but two firms, is somewhat larger than in 1921, being 21.6 per cent for average daily sales as com pared with 20.2 per cent a year ago. The majority of stores reduced their stocks during July, and for about half the firms inventories are lower than last year, making with the heavier sales a more rapid rate of turnover for the district as a whole. Of forty-five returns giving dollar amounts, twentythree show collections larger than during July, 1921. *3 chains. FEDERAL RESERVE BOARD STATISTICS OF CHAIN STORE SALES THROUGHOUT THE UNITED STATES (1919 Monthly Average— ■100) J u ly June J uly Grocery ___ ........................ 16 Drug .......... ................................ 7 Shoe _____ ............. ............ 5 Five & Ten. ------------------ -------- 4 1922 132.2 125.6 101.1 126.3 Cigar — .... ................ ........ 127.3 1922 133.4* 123.5* 123.1* 124.9 81.3 105.8 1921 115.1 122.1 100.9 108.0 55.6 128.5 C h a in N um ber 3 •Partly estimated. Mail Order July reports show that for the second time this year monthly sales of Chicago’s two leading mail order houses were ahead of a year ago, while Federal Reserve Board statistics for July show aggregate sales of four houses also larger than July, 1921. 74,223 Commerce, 1,361,023 in thousands of Gold imports during July were the highest for the present year, and were nearly three and one-half times those of June. This increase was due largely to heavy shipments from Great Britain, $38,065,994 out of the total gold imports of $42,986,727 being from that source. GOLD* July June J u ly 1922 ------------------- 42,987 ....................... 645 1922 12,977 1,601 1921 64,247 3,735 1922 165,999 10.790 1921 410,190 10,425 Excess of imports....... 42,342 11,376 60,512 155,209 399,765 Imports Exports •Figures from dollars. Department of Commerce, S even M o n t h s in thousands of The stock of gold available for money August 1 was $3,812,129,284, as compared with $3,184,579,256 a year ago. August Page 11 ELASTIC CURRENCY AND ITS BENEFITS TO BUSINESS The volume of Federal Reserve notes varies as the requirements for currency increase or decrease to meet demands for the movement of crops and manu factured products. Prior to the establishment of the Federal Reserve System, the note currency of the country did not quickly expand and contract in response to the sea sonal needs of business and agriculture. The Federal Reserve Act gave this elasticity of note currency by providing for Federal Reserve notes which may be partly secured by gold and partly by borrowers’ paper. The paper used as collateral affords the needed elasticity, since the volume of borrowers’ paper ex pands and contracts with the needs of business and agriculture. This quality distinguishes Federal Re serve notes from all other currency and fills the longfelt need for an elastic currency to meet the seasonal demands of the Middle West. The paper securing Federal Reserve notes may be that of farmers, manufacturers, or other producers representing products in the process of production or marketing, or that of merchants representing goods in movement to market, on hand, or in the process of export or import. However, the paper must be endorsed by a member bank before it is eligible for rediscount at the Federal Reserve Bank, and must mature within ninety days after the date o f redis count, except notes, drafts, and bills drawn or issued for agricultural purposes, or based on live stock, all of which may run for a maximum of six months. It was this principle of elasticity established through the rediscounting of paper and the issuing o f Federal Reserve notes that made it possible for the Federal Reserve Bank of Chicago to furnish, through the member banks, the currency needed by business men and farmers of this district during 1920 and 1921. In the last few months, the gold holdings of the Federal Reserve bank have so increased and the amount of notes outstanding decreased that the Federal Reserve notes are now secured by more than 100 per cent in gold. The point is that while the security back of the notes is absolutely safe, Federal Reserve notes are elastic because the borrowers’ paper increases and decreases in volume with the demands of business for accommodation; and is based upon goods readily salable, Government obligations, or other assets, which may be realized upon almost without delay. The safety of the notes is further augmented by the minimum reserve requirement of 40 per cent of gold against all notes in circulation. When business activities increase, the amount of borrowers’ paper increases. The local banks present the paper of the business man and the farmer to the Federal Reserve bank and notes are issued. Then the local banker is able to supply the needs o f his cus tomers with the Federal Reserve notes. In like manner, when the volume of business de creases, the borrowers return currency to their banks in payment o f loans, and as the banks ship the cur rency to the Federal Reserve bank to liquidate their borrowings, the equivalent in Federal Reserve notes is retired from circulation. Thus the elastic quality of the Federal Reserve.notes makes it possible to meet the seasonal needs of business and agriculture and at the same time avoid inflation. ERRATA Milwaukee retail trade percentages given are for the district; those for the district are as given for Milwaukee. Peg* IS August
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