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BUSINESS CONDITIONS IN T H E THIRD FEDERAL O i l RESERVE DISTRICT PHILADELPHIA J B APRIL 1, 1921 GENERAL SUMMARY T H E variable trends of industry and trade which were noted in our last report continue to be features of the business situation. Retail trade in the district compares favorably Wlth a year ago, sales for the month of February showing an increase of 3.4 per cent over the same ^onth of 1920. The detailed figures for March retail trade will not be available until the next Punted report; such reports as we have received ^re to the effect that trade has not been uniformly good, but taken as a whole it seems to be fairly satisfactory. Textile manufacturers have been fortunate in securing a certain amount of business to tide them over the last few months, but are not prepared to make predictions as to the future. Iron and steel manufacturers and producers of other materials used in construction operations have obtained few orders, and their operations in most cases represent only a small percentage of their productive capacity. The predominant opinion is that conservatism is re quired at this time. The weakness or strength of the markets for basic materials has had a large influence on the finished products. Raw silk prices have been maintained and the demand for silk goods has been quite strong. Raw wool was for a time thought to be on a fairly firm basis, and purchasers did not hesitate to place some orders for finished products; however, with the subsequent weakening of wool prices, due to large importations, the business obtained by cloth mills became less at tractive to manufacturers, who are now accepting orders cautiously, realizing the possibility of can cellations. Weakness in cotton quotations is reflected by small orders in the markets for staple goods; there is, however, a good demand for certain specialties. Shoe manufacturers are still fairly busy turn ing out the fancy styles which are in request. This condition has stimulated a demand for colored calf and kids from the leather makers. Staple lines are quiet. Price reductions in iron and steel products have thus far failed to stimulate any large amount of 2 BUSINESS CONDITIONS new business, and the operations of plants in this district have declined steadily. Railroads have not been in a position to place orders, and the curtailment of this demand, together with the lack of a strong demand for shipbuilding and structural materials, have served to make the SYNOPSIS OF BUSINESS SITUATION Compiled as of March 21, 1921 B u s in e s s Brick.......................... Gas and electric fixtures Hardware.................... Lumber....................... Paints......................... Coal, Anthracite......... Coal, Bituminous........ Confectionery.............. Cotton Goods.............. Cotton yarns............... Groceries..................... Iron and Steel............. Leather....................... Leather goods............. Shoes.......................... Paper.......................... Printing and Publishing Silk............................. D em and Limited Increased Slight increase Limited Varying—household good construction poor Decreased Negligible Decreased Fair Decreased Decreased in all except staples Decreasing Good in colored uppers Limited in staples Increased Good for specialties Decreased in staple lines Limited Decreased Good Tobacco...................... Slight increase Hosiery—seamless....... full fashioned Underwear—light weight heavy weight Wool cloth.................. Wool yarns................. Limited Good Fair Poor Good Fair Philadelphia Federal Reserve District P r ic e s Lower Firm Lower Lower Lower Lower Lower No change Firm Downward Lower Lower Slight increase Firm Slight decrease Firm Lower No change in high grade goods Firm to slight increase M R a w M a t e r ia l o r e r c h a n d is e S it u a t io n Plentiful—prices lower Plentiful—prices lower Good—prices lower Plentiful Plentiful Good Good Good—prices lower Good—prices lower Good—prices lower Good—prices lower Scarcity in some grades Good Good Good Good—prices lower Good—prices lower Good Good—prices low grade leaf Slight reductions in lower low priced cigars Good—prices high grade leaf firm Good Unsettled Firm Good Firm Good Unsettled Good Lower Good Firm Good C o l l e c t io n s Fair Satisfactory Slow Fair Fair except in South Fair Satisfactory Fair Fair Slow Poor Fair Fair Fair to good Fair Fair Fair to good Fairly good Fair to good Fair Fair to good Fair to good BUSINESS CONDITIONS iron and steel markets exceedingly dull. High freight rates have been a great detriment to this industry, having added largely to the costs of production of basic materials. The output of bituminous coal has fallen off since the beginning of the year, owing to the small industrial demand throughout the country, lower consumption by the railroads, and the fall ing off in export shipments. Anthracite produc tion is quite large, but lately the price has de clined slightly with the coming of spring and the consequent lessening in demand. The car supply at the mines has been ample for all requirements. A reduction in the number of employees during the past month is reported from nearly all sec tions of the district, the textile industry being an exception to the general rule, as many mills have added to their forces since January I. Com parative estimates of unemployment, made by the local bureaus of the Pennsylvania Bureau of Employment, are as follows: Philadelphia.............. Altoona..................... Harrisburg................ Johnstown................. Scranton................... Totals.................... Feb. 15 80,000 19,625 20,360 7,700 13,100 140,785 Feb. 28 81,100 21,360 19,810 7,825 12,435 142,530 Mar. 15 83,000 23,350 20,735 7,260 12,770 147,115 Of the estimated total of 14 7,115 men out of employment on March 15th in the five cities mentioned, 35,450, or 24 per cent, were classed as common labor. Some demand for farm workpi's is making itself felt, and contemplated public improvements also are expected to give employ ment to many. Collection conditions have shown little change during the month except in scattered localities. Banks and business houses which report to us on collections state that they are generally slow. The railroads owe large sums of money to firms m this district, and have not been able to pay, some bills dating back to a year ago. Payments from the south and abroad also are notoriously slow. Failures in the Third Federal Reserve District m February, as reported by R. G. Dun & ComPany, showed a decline in number as compared 3 to December, but the liabilities were larger. In point of both number and amount of liabilities it exceeded any February during the last four years, as the figures show: 1921—February..................... January....................... 1920—December................... February..................... 1919—February..................... 1918—February..................... 1917—February..................... Number 71 96 76 23 37 65 65 Liabilities 33,701,526 2,183,908 4,317,296 361,236 447,770 2,639,038 470,444 Borrowings from banks in manufacturing cen ters have fallen off generally as a result of the decline in manufacturing operations, though this has been offset in some cases by the slowness of collections, which compelled business men to bor row from their banks, where possible, to secure funds for current needs. The agricultural sec tions show larger borrowings with the advent of the spring planting season. The figures of 58 member banks, located in four large cities of this district which are manufacturing centers, evi dence the decline in loans. Total borrowings of their customers dropped from $733,919,000 on February 18th to $718,025,000 on March n th . Commercial paper of firms which have shown a favorable ratio of quick assets to current liabili ties in their latest statements has been moving at 7J^ per cent on the average. February sales were rather light and practically all of the demand came from out-of-town banking institutions. R ET A IL TRADE EPO RTS of retail trade conditions during - the past month again exhibited contradic tory trends. Increased business as compared to last year was reported by many concerns, while other statements were directly opposed to these. Store location was not wholly responsible for this situation, for firms in the same sections of this Federal Reserve district were not affected alike. The explanation is to be found in the atti tude of the consuming public. Reduced prices, backed by good quality, are attracting purchas ers, but highly advertised sales in which cheap grades of goods are offered, are being totally neg- R 4 BUSINESS CONDITIONS lected. Quality, at fair quotations, not simply ‘ reduced price, is being sought by the consumer. Those stores which have been able to satisfy this demand have gained the greater portion of the Easter trade. In addition to the stimulation of sales, the problem uppermost in the mind of retail mer chants is that of reducing overhead expenses. There has been no cut in the wages of sales forces, and retailers express a desire to maintain them at present levels. How to reduce overhead, keeping wages constant, is the question. The answer as offered by several concerns is the reduction of the number of employees, both in the store and on the delivery service, and stressing the efficiency factor. The retail trade situation during February is reflected in the following table: RETAIL TRADE Net Sales Jan. 1 to Feb.1921 Feb. 28,1921, compared to compared to Feb. 1920 Jan. 1 to Feb. 28, 1920 +3.4 +4.7 +3.7 Firms in Philadelphia (15)........ Firms outside Philadelphia (31). All reporting firms (46)............ Stocks of Goods +4.4 + 1.6 +3.6 Feb. 28, 1921, Feb. 28, 1921, compared to compared to Feb. 29, 1920 Jan. 31, 1921 Firms in Philadelphia............... Firms outside Philadelphia........ All reporting firms.................... +4.2 +9.4 +5.5 - 11.6 -12.4 - 11.8 Stocks Compared to Sales Average stocks Jan. 1 to Feb. 28 compared to Average sales Jan. 1 to Feb. 28 Firms in Philadelphia........................ Firms outside Philadelphia................ All reporting firms............................. 314.3% 508.6% 365.6% Orders outstanding Feb. 28, Orders Compared to Purchases 1921, compared to total purchases in 1920 Firms outside Philadelphia....... 7.9% 6 .1 % 7.4% Collection conditions are generally satisfactory, although the reports of retardations are increasing in number. The conservative buying policy of the past nine months continues, and stocks are low for this period of the year. The public demand is not being anticipated, and only goods for which there is an immediate outlet are being purchased. COAL A N D C O K E A nthracite H E hard coal industry, during the month of March, has experienced a pronounced slack ening of demand, not only for steam sizes, but for domestic grades as well. The decline in domestic demand, deliveries being 20 to 30 per cent less than for February, is undoubtedly attributable to the remarkably mild winter and to the expecta tion of the usual spring price cut. This expecta tion was realized March 15 with the announce ment that two of the leading railroad coal com panies had made new prices 50 cents to 75 cents lower than the prevailing rates for prepared sizes at the mine. In the case of several leading Phila delphia retailers this action was followed with cuts in domestic sizes ranging from 50 cents to $1.00 per ton. In regard to steam sizes severe competition from bituminous grades has led some of the independents to shade the company prices in steam grades by 15 cents to 25 cents. Com pany mine prices per gross ton for line shipment were as follows on March 15: T Broken........................................................37.75 Egg............................................................ 7.75 Stove.......................................................... 8.05 Nut............................................................ 8.05 Pea............................................................. 6.40 Buckwheat................................................. 3.50 Rice........................................................... 2.50 Boiler......................................................... 2.00 Barley............... 1.50 Culm.......................................................... 1.50 This softening in demand has been reflected in decreased production for the first week in March, as shown by the weekly report of the U. S. Geo logical Survey dated March 12, which estimates BUSINESS CONDITIONS total production of the country for the week endlng March 5th at 1,917,000 tons. This figure rep resents an increase of 101,000 tons over the week ending February 28th, but a decrease of 93,000 tons from the last previous full time week, that of February 24th, owing to the fact that the observ ance of Washington’s birthday subtracted almost an entire day’s output from the total. Except in a few isolated cases, wages have not yet been lowered, and employment is still close to the maximum. Credit conditions are considered satisfactory with few cancellations and fair col lections. B ituminous An almost total collapse of demand has resulted 111 demoralization in the bituminous coal industry. The first week in March witnessed an average daily production of 1,234,000 net tons, which (with the exception of the period of the coal strike from November 1 to December 16, 1919) ls the lowest daily average production in this country since 1914. 5 The chart shown below indicates clearly the decided decline in production this year as com pared to a corresponding period in 1920. Recent conditions in the industry closely resemble the period following the armistice when industrial de pression and a mild winter combined to limit de mand, although it is doubtful if consumers have as large a reserve on hand as they had in 1919. The reasons for the present disorganized condi tion of the industry are quite obvious; industrial demands are less than 50 per cent of normal; railroad demand shows a decline of about 30 per cent from normal; and coking demand is almost negligible, owing to curtailment of blast furnace and foundry operations. A rather important item is the decline in for eign demand, which has resulted in exports of only 712,000 tons in February as compared to 2,248,448 tons in January. French and Italian markets are almost entirely closed to our trade, owing to the surplus of coal caused by German reparations deliveries. The spot prices quoted are merely nominal, as there seems to be little business transacted at any 6 BUSINESS CONDITIONS figure. It will be noticed that prices show a de cline of 5 to io per cent in the past month and 60 per cent since the peak of 1920, with the result that average prices are lower than those set by the War Industries Board in 19 17 : Pool 1............................... Pool 10, 11....................... Pool 9 .............................. Pool 32 (54, 64)................ ................$3.50 ................ 2.25 @ 2.75 ................ 3.25 ................ 2.00 @ 2.25 Although there have been no wage cuts in most of the mines, the employment time is consider ably less than half of normal. Collections are reported as being fairly satisfactory but rather slow, especially in the case of railroads. C oke The demand for metallurgical coke is almost negligible, and the price has been forced down to $4.50 for furnace, which is exactly one-quarter of the peak prices of August, 1920. Even this low price is no inducement to purchasers, with the re sult that almost one-half the beehive ovens are not operating. The estimated production for the week ended March 5th was 181,000 tons, a de cline of 6 per cent from the previous week and of more than 50 per cent from the corresponding week in 1920. The total production of beehive coke to date is 2,098,000 tons, as compared to 4,120,000 for the same period last year. The action of one of the largest independents in cut ting wages 18 per cent has not been followed by other independents, who are awaiting the action of a certain large producer. IRO N AND S T E E L F U R T H E R slackening of demand, slowing • up of production and decline of prices have characterized the iron and steel industry of this district during the past month. Attempts on the part of independents to stimulate demand by cut ting prices have proved ineffectual. The Steel Corporation plants are probably working at not more than 50 to 60 per cent of capacity. The average for the entire industry is probably not A more than 30 to 40 per cent of normal. Seventyfive per cent of the reporting firms of this district report demand as being the same, or less than last month, and it seems evident that inquiries are less than 30 per cent of normal for this period of the year. Demand for pig iron could hardly be less, as there is no contract and little spot busi ness being transacted. Construction work is at a low ebb, and hence there is little demand for structural sizes of steel. In spite of a plentiful supply of raw materials at considerably reduced prices, the cessation of demand has resulted in still further curtailment of operations. Reports indicate that operations in this district are at not more than 25 per cent of capacity, with many plants totally closed. A glance at production figures for the month of February shows quite clearly the present trend in the industry. Pig iron production for the month was 1,937,257 gross tons, a daily average of 69,187 tons, as compared to January’s total of 2,416,292 tons, averaging 77,945 tons daily. The above fig ure represents the smallest output for the month of February during the last five years, and the lowest production for any month since the steel strike in October, 1919. The number of blast furnaces in operation on March 1st was 153, as compared with 183 on February 1st and 201 on January 1st. This shows a net loss of 30 furnaces in the month of February; 16 of the number blown out were those ot the Steel Corporation. Figures showing steel ingot production indicate a similar tendency. Febru ary’s production is reported as 1,749,472 gross tons as compared to 2,203,186 tons for January and 3,299,049 tons for March, 1920. These fig ures show a decline of 453,714 tons, or over 20 per cent as compared to January and of 1,549,577 tons, or 46.9 per cent, as compared to March, 1920. The unfilled tonnage of the U. S. Steel Corpor ation was reported on February 28th as 6,933,867 tons, which is the lowest figure since October, I9 I9, when an unfilled tonnage of 6,472,668 was reported. The figure for February shows a falling off of 639,297 tons from the previous month. This is the seventh consecutive monthly decline reported. This figure is only 62 per cent of the peak unfilled tonnage of 11,118,468 reported in BUSINESS CONDITIONS July, 1920. Judging from the reports of firms in this district, unfilled orders on hand do not aver age more than two or three weeks’ normal production. I he following figures show the orders and ship ments in terms of percentage of capacity of the members of the Bridge Builders and Structural Society, which carries on about 40 per cent of the total business of the country: 1921 February.......................... January............................ 1920 February.......................... Per cent of Capacity Orders Shipments 40 18y i 18 38^ 132 52 The decline in the orders from 132 per cent of capacity in February, 1920, to 18 per cent of capacity in last month is symptomatic of condi tions in the structural steel industry. Export figures for January were at a surprising variance with the apparent trend of the domestic markets. Total exports of iron and steel for January, as reported by the Bureau of Foreign and domestic Commerce, were 547,394 tons, a de 7 cided increase over December’s figure, 497,765 tons, and over the total for January, 1920, which was 333,601. In spite of this seemingly large fig ure, it is becoming increasingly apparent that our firms will have to meet severe competition from European manufacturers. England has already felt the effect of Belgian and German competition, and as the productive capacities of European firms increase, we will be compelled to meet European prices or lose the business. Labor is said to be quite plentiful in this dis trict, and many firms report wage reductions of from 10 to 20 per cent since the first of the year. Employment is at less than 40 per cent of normal. Practically all plants are working on a restricted schedule, and many are being entirely closed due to lack of orders. Very few contracts being made, cancellations are few in number at the present time. Collec tions are reported generally as being poor, espe cially on the part of the railroads, one firm report ing the “ poorest collections in fifty years.” The struggle for the little business offered has resulted in a further general cut in prices of about 10 per cent. The following comparative list of prices from the Iron Age shows a decline since 8 BUSINESS CONDITIONS last month of nearly io per cent and since last year of about 40 per cent: M ar. IS, 1921 Pig iron No. 2X Phila......................... No. 2 Valley furnace.............. Basic Valley furnace.............. Malleable, Valley................... Open hearth billets.................... Iron bars, Phila. per 100 lbs. . .. Sheets, black No. 28 Pitts......... Sheets, galv. No. 28 Pitts.......... Sheets, blue annealed 9-10........ Carwheels, Phila....................... Coke, furnace............................ 327.26 26.00 2 5 .OO 26.00 44.24 2.45 3.85 5.00 3.00 18.00 4.50 F eb. is , 1921 M a r. 16, 1920 330.00 345.35 28.00 41.00 25.00 41.50 28.00 42.00 49.24 64.10 ' 2.70 4.25 4.20 5.50 5.50 7.00 3.20 4.50 23.00 42.50 4.50 6.00 The foregoing chart indicates the marked decline which has taken place during the past year in the prices of steel billets, pig iron and coke. The price of furnace coke in particular has shown a decrease from a peak price of $18 per ton to a present price of $4.50 per ton, or exactly onefourth the peak reached in 1920. Billets and pig have declined to nearly 50 per cent of the peak prices. LUMBER EM A N D for lumber is so dependent upon conditions in various lines of business— such as building, box manufacturing, etc.— and they in turn are so dependent upon other manu facturing lines, that cessation of operations in any department indirectly affects thelumberindustry. Manufacturing in general has been at so low an ebb for many months that box manufacturers catering to industrial plants have found but little outlet for their products, and lumber dealers sup plying these manufacturers report a steadily de creasing demand. Building, which, of course, rep resents the heaviest call upon lumber, also has been far below normal operations for so long a period that comparatively little demand exists from that source. At present production is said to be approxi mately 50 per cent below normal, and in spite of D this curtailed production large supplies of lumber are being accumulated by manufacturers and wholesalers. From outlying cities of this Federal Reserve district are reported numerous inquiries. In some instances, these pertain to building plans which have already been contracted for, and in other cases are thought to be in anticipation of revived building activity in spring. Prices have declined materially, and it is said that at present lumber is easily obtainable at prices 30 to 40 per cent below the cost of present stocks. The continual recession of prices on a few staple lines are shown by the following com parison of prices for the past two months: Penna. hemlock........................ H. maple 4x4"........................ Y. P. boards 1x4"................... N. C. pine air dried roofers 6 ". . Lath, Eastern spruce................. Jan. 7 Feb. 19 350.00 348.00 115.00 115.00 44.00 40.00 28.50 29.00 9.00 8.00 Mar. 19 342.50 110.00 38.00 27.50 8.00 W HOLESALE HARDWARE S U R V E Y of the wholesale hardware trade of this district for the month of February indicated a falling off in demand. Although some concerns report larger sales in volume of articles than in January and the corresponding period of 1920, the volume in dollars is considerably less, as shown by the table. The first few weeks of March show some improvement. The market for mill supplies is practically neg ligible, for large corporations and manufacturing concerns are cutting their purchases to the mini mum and in some cases are cancelling orders already placed. The warm weather, however, has resulted in an increased volume of sales in seasonable implements. Although the city trade has not shown encouraging increases, country business has shown marked improvement. Con cerns with a large part of their business in south ern farming districts were the first to note the improvement in demand. Prices of standard articles have decreased dur ing the month to a point approximately 10 per cent lower than last month’s level. The principal A BUSINESS CONDITIONS decreases have been noted in iron, steel and cop per goods, finishing hardware and galvanized ware, but present prices are conservatively esti mated at almost ioo per cent over the prices of 1 9 14- Wire nails were quoted on March 15th at $3 per 100 pounds, a figure 25 cents lower than bebruary’s quotations. Other standard products have experienced similar declines. The dullness ln the trade, which characterized the first two months of the year, combined with a decided lowering of the cost of raw materials, undoubt edly were responsible in part for the price cutting ° f the past month. The following list shows a composite result of the reports of firms in this district, giving net sales and accounts outstanding for the months of February and January, 1921, and for February, 1920. WHOLESALE HARDWARE TRADE Feb.1921 Feb. 1921 compared to compared to Jan.1921 Feb. 1920 Net sales during month............ -4.4% -12.7% Accounts outstanding at end of month................................... -2.5% -3.9% Ratio of accounts outstanding to sales: Eeb. 1921......................... ....................213.3% Jan. 1921....................... ...................195.2% Dec. 1920......................... ...................165.0% Nov. 1920....................... ...................188.6% Oct. 1920....................... ................... 153.7% Sept. 1920........................ ....................151.9% * Revised Reports from firms in this district indicate that the cancellation evil is almost a thing of the past mid that practically all business is being done on a spot basis; orders are filled promptly and no cancellation is allowed after shipment of goods. Collections are still rather slow. PA IN TS ILD winter weather has resulted in a more favorable situation in paints than in the more basic construction materials. Demand has oeen growing and several concerns described sales cne past month as very good. This demand, however,, __ is restricted largely to those concerns dealing directly with the consuming public. The 9 decline in business activity, which principally af* fects the producer, has resulted in greatly limit ing repairs to manufacturing establishments. The automobile trade, which in normal times con sumes large quantities of paint, has been dull; the consumption by shipbuilders is likewise restricted. Although stocks on hand are ample in all cases, there is a slight tendency to increase them in an ticipation of a revival in business during the next few months. Raw materials which also are in large supply have made further declines in price. Operations are being carried on at from twothirds to full capacity, showing a slight increase over a month ago. Prices have softened slightly in some lines, but as a whole are firm at the levels established in January. Most plants have added a few em ployees to their personnel, expecting to further increase their forces if present conditions con tinue. Cancellations are negligible. Collections are fair, but difficulty is being met by those firms doing business in the South. BRICK S of brick continue to mark time with demand almost negligible. One company reports a slight increase in orders, but inquiries are generally too few to furnish any basis for price quotations. In some cases, al though firms have reduced prices below those quoted last month, they have been unable to stimulate sales. Raw materials are in abundance, but are only a shade lower in price than last month. Oper ations continue dull; many plants are shut down entirely and others are running at less than 50 per cent capacity. Stocks generally have tended to accumulate. Supplies of raw materials are as a rule ample and the coal contracts placed have been for only limited amounts. Employees are being retained principally on part time, and in many cases are kept busy at odd jobs. This inactivity, however, is partly due to seasonal curtailment of operations. There have been no cancellations on recently placed orders. Collections are fair. M an u factu rers 10 BUSINESS CONDITIONS GAS AND E L E C T R IC F I X T U R E S R A C T IC A L L Y all firms in this field report little if any increase in demand over last month, and in comparison with this month last year, orders have fallen off from io to 25 per cent. Although a large amount of surplus goods is not being carried, finished stocks have been generally sufficient, as buying has been for current needs only. Raw materials have been easily obtainable at slightly lower prices. Due to lessened production, however, costs of manufacture on the whole seem to have’increased. Prices for finished products have not changed since last month and remain about 20 per cent lower than in the corresponding period of last year. Operations continue about the same as last month, that is about 50 per cent of normal. The employment situation is generally unchanged, reduced forces and part time work being the rule. Opinions regarding operations in the near future are conflicting; some firms anticipating an early resumption of demand, are carrying em ployees at a loss, while others are curtailing operations in order to minimize stocks. P C O TTO N N E X P E C T E D activity in late January, a decided reaction in February, and a spotty market during March has been the history of the cotton goods industry since the first of the year. The present demand is fairly active for some materials, principally ginghams and per cales, several manufacturers reporting that they have sold their entire output up to M ay 1st. Jobbers in these goods have had good spot busi ness with the retail trade and therefore have made insistend demands upon the manufacturers. In general, the demand for these materials is reported as comparing favorably with this period during a normal year. It must be noted, however, that orders for spring delivery are usually placed during the preceding September, October and November. Since no orders of any kind were booked prior to the revival in January, this de mand must not be construed as indicating a return to normal business. In fact, the industry U as a whole, instead of showing improvement con tinues to react. The volume of business being booked by manu facturers of fine materials is small and is not sufficient to keep plants running at the recently increased schedules. As the orders placed during January are completed, operations are reduced. The cutting up trade is particularly sparing in their buying and their orders are restricted to absolute needs. Immediate shipment is required in almost all cases, and as the supply of finished materials—with the exception of certain special ties—is still rather large, this provision is easily complied with. Manufacturers of heavy cotton fabrics also report a poor demand for their products, and operations are at a low ebb. The continued weak ness of the raw cotton market is responsible in large measure for present conditions. Buyers, noting the weakness in these prices, hesitate to make commitments for finished goods, realizing the possibility of further price recessions. There is no confidence in the general situation and the demand, with the exceptions mentioned above, is restricted. The few orders being placed in the cotton goods industry at the present time are confined to immediate delivery. No attention is being given to fall goods, although normally these are ordered during the current season. Demand in the cotton yarn industry during March also was limited, and spinners who in creased operations during the revival of interest in January and February did not receive sufficient business to operate at the new schedules. To attract orders, lower quotations were made, but the result was a further falling off in demand, for without a firm price basis, buyers refused to operate. Some concerns reduced production, but others preferred tooperateforstock. Thesituation at the present time is comparable with that of last December, the poorest month of 1920. March witnessed a further falling off in raw cotton prices and dealers in this district reported a listless market. Some small orders for sampling purposes were received, but the demand in general was far below normal. The consumption of lint cotton in the United States during February amounted to 395,563 bales. This was greater than the amount con BUSINESS CONDITIONS sumed in January, but the same relative increase over the low point reached in December was not maintained. This is reflected in the chart below showing the trend of cotton consumption in the United States since Ju ly, 1919, as reported by the Census Bureau. COTTON C O N S U M P T IO N 1N T H E U N IT E D S T A T E S 6 00 600 soo 500 400 \ < 0* OK > u . 0 2 0 vo 300 A z < «0 3 0 300 Us 0 ~r\ W > 200 200 n Us 100 JA INDJ r r MJ J s N JF n/ « J I he stock of cotton, exclusive of linters, and active spindles, on February 28th compared as follows: F eb. 2 8 ,1 9 2 1 J a n . 31, 1921 Feb. 28, 1920 mfg. establishments 1,335,435 1,273,067 1,869,368 In warehouses........... 5,597,019 5,645,368 3,530,654 Active spindles.......... 32,458,528 31,509,021 34,655,677 WOOL W ool C loth U H E wool industry seems to be passing **" through what might be termed a transitional Period, which is fraught with optimism for some, ^ t h anxiety for others and with interest for all. Why the unexpectedly heavy demand for wool eloths at the fall openings, and what will be the °utcome of it seems to be the question in the minds of many. 11 Until the flurry of interest in tricotines for the dress goods trade a couple of months ago, the entire wool industry had been dormant for many months. Wool cloths was one of the first indus tries to feel the effects of curtalied consuming demand, and about nine months ago, cancel lations in this branch were rife, jobbers throwing back on the manufacturers huge stocks of finished materials and cancelling orders on partly finished goods. There was practically no spring season and the industry as a whole was rather pes simistic regarding the fall season. The American Woolen Company, however, offered overcoatings and dress goods at from 35 to 50 per cent below prices of last year, and in spite of the skeptical attitude towards the fall openings, received many orders. Smaller manufacturers also met with success, and as a consequence the mills manu facturing these materials are running with in creased operations. Manufacturers are wondering whether this de mand is stimulated by legitimate necessity or is merely a speculative movement. Some feel that the wholesale cancellations at the beginning of the readjustment period left jobbers with slim stocks, and the restricted buying on the part of the public last fall is thought to have resulted in a real scarcity among consumers. With the advent of the fall season, a realization of this state of affairs by manufacturers may be reflected in the demand for overcoatings and dress goods. On the other hand, many believe that a con suming demand is being anticipated and fear the result should it fail to materialize. For this reason, many manufacturers, preferring a smaller number of conservative orders supported by a real demand to many merely speculative ones which might result in cancellations, are warning their purchasers against overbuying, and are even refusing a bulk of the orders being received. A tendency toward cancellations is still noted in this industry, particularly in tricotines, where prices may have dropped or deliveries been de layed. The chart of prices given at the top of the next page (quoted from the Bankers’ Economic Service) is a comparison of the leading numbers of staple worsteds, as quoted by the American Woolen Company: 12 BUSINESS CONDITIONS SPRING 1921 F all 1921 Fulton serges: 3192, 11 oz.......................... 3194, 14 oz.................................................... 3844, 16 oz.................................................... 364, 14 oz....................... 2 0 0 '. ......................................................... Washington serges: 209-2, 9 oz..................................................... 20934-1, 9'A oz.............................................. Washington day: 2 0 0 , 16 oz...................................................... Washington cheviot: 312-32............................................................ Washington French-back: 816-69, 16 oz.................................................. Wood serges: 9479.............................................................. 9709-1............................ Wood unfinished: 9613-1, 13 oz.................................................. Ayer serges: 6192............................................................... 1814-44............................................................. 2.4234 2.85' 3.3734 3.1234 3.10 R e v is e d 2.3734 2.7234 3.25 3.00 1 .2 0 1.25 2.85 1.05 3.25 2.4234 2.0734 2 .1 0 2.4234 2.75' ’ 3.6734 4.25' 4.9734 4.60 4.60 1.65 1.6734 F all 1920 F all F all 1919 1918 F all 1917 4.50 5.50 6.45 2.6234 3.20' 3.7734 2.35 3.7234 4.3734 2.75 3.35 2.25 1.50 1.57 3.50 1.8234 4.15 1916 1.95 2.1734 .95 1.3234 1.0234 2.3734 1.8234 6.6234 3.85 4.4234 2.6234 2 .1 0 1.3734 3.0734 2.75 4.1234 2.50 3.1234 1.75 2.7734 4.2234 5.50 3.70 Augmented production in the hosiery industry early in February created an increased demand for worsted yarns which resulted in sufficient orders to sustain operations during March. One large yarn manufacturer describes the improved conditions at his mill as follows: “ During the latter part of January the knit goods manufac turers began to get business again on their pro ducts, so that they placed good contracts with the spinners for yarns. We booked at that time sufficient business to run our plant at full ca pacity. We are today operating about 80 per cent of our plant and are trying to get to full production as quickly as we can re-form our organization and train in new help for same.” This enlarged demand is not universal, as some yarn manufacturers report a falling off during March. These manufacturers think that the revival of demand during February was due to the feeling that prices were as low as they would go and might stiffen with increased demand for merchandise. The present hesitancy in placing orders is ascribed by some to the situation in the raw wool market. The uncertainty of tariff regulation makes the importation of large quanti ties of foreign wool still a factor to be reckoned F all 1 .2 0 2.0234 2.0234 W ool Y arns O p e n in g 3.30 2.2734 1.7734 with; the large stores of Government wool, which may at any time be thrown on the market; and the domestic clip which is about due, tend to make spinners cautious about stocking up for future requirements. Although most raw materials are easily obtain able, a scarcity in the finer grades is noted. Prices seem to be holding firm at the slightly higher levels which were recorded last month. The revived activity is reflected in the capacity being maintained by many mills in the district, some of which have opened since last month and are now running at from 3 3 ^ to 6opercentofcapacity. The steadiness of prices probably accounts for the fact that no cancellations have been recorded since January 1st. Collection conditions are found to vary from fair to good. SI LK O NDITIO NS in the silk piece goods industry continue to display the same conservative strength which has characterized the market since early in February. The demand which had its inception during the latter part of January in a flood of orders for immediate shipment has C BUSINESS CONDITIONS since developed into a steady stream of small sized commitments. These are still confined to nearby delivery however, for buyers are not willing to place, nor manufacturers to accept orders for delivery much beyond thirty days. Retailers are buying cautiously, not yet feeling assured of the permanency of the consuming demand. The cutting up trade, too, is placing only moderate orders at this time, for the end of their season is near at hand. On their part, manu facturers are satisfied with the nature of the orders. Since there is still uncertainty as to the future, they fear a recurrence of the cancellation difficulties if a consuming demand is anticipated by buyers, large orders placed, and the expected demand should fail to materialize. While the individual orders are of moderate Slze, the total volume is placed at 75 per cent of that of the so-called normal year. Many orders are filled from finished stocks, which are being rapidly depleted. The stocks of several numbers ln most active demand were exhausted in the early days of the revival. To replenish these and to keep pace with the present orders for immediate shipment, operations have been systematically mcreased until at the present time 65 to 70 per cent of the industry’s productive capacity is being maintained. Manufacturers are not attempting to force an added demand by displaying new materials, but are contenting themselves with supplying that which now exists. Canton crepes are popular fabrics and there is also a good market for taffetas, crepes de chine, and georgettes. Prices " ave not shown a general increase during the Past month, although in some quarters there are reP°rts of slight advances. Both buyers and sellers express themselves as well satisfied with present levels. Collection conditions are reported as fair. Silk throwsters have also been experiencing a decided improvement in the demand for their products. Since the orders are practically all for Immediate or nearby shipment, operations have keen materially increased. Prices on trams and 0rganzines, however, continued to decline, the Past month having recorded moderate reactions. Election conditions in this industry are variddsly given as fair to good. 13 H O SIERY E B R U A R Y ’S price fluctuations in the seam less hosiery industry, which acted as a check to the good business of the previous month, were partially stabilized in some lines during March. Quotations as a whole did not reach a firm basis, however, and as a result, jobbers and retailers continued to operate cautiously. The auction sale of over 5,000 cases of lisle and mercerized hosiery, conducted by a large concern in New York early in the month, succeeded in fixing market prices for these goods. Purchasers at this sale were small jobbers and retailers, and their bidding resulted in considerably higher prices than were expected by the big jobbers. This sale, having stabilized prices, has had a most salutary effect on the tone of the markets for these goods, but has reacted to the disadvantage of mills in this district by further checking the actual demand for their goods. The price stabili zation has not influenced the silk lines, however, and quotations for these goods continue to fluctuate, strengthening in some quarters and weakening in others. The reports of manufacturers as to the orders booked during the first three weeks of March have been varied. One concern states that the demand was 50 per cent greater than the similar period of February. At the other extreme, a firm reports the orders received as so few that, having completed those placed during January, opera tions were reduced. In general, a rather limited demand is reported, with orders confined to small lots for immediate shipment. In contrast with the seamless hosiery situation is that in the full fashioned industry. When manufacturers attempted a reduction in wages of 15 per cent from the peak levels of 1920, a controversy followed which ultimately resulted in a general strike. Large sized orders were offered for high grade goods for the Easter and spring trades, especially of the shades which have been so much in vogue recently, but manufac turers were forced to reject them. The deadlock in the industry continues at the present writing. A concern that was not affected by the strike reports the receipt of orders which are taxing the capacity of its plant, and because of the inablility F 14 BUSINESS CONDITIONS to deliver in the required time, it was necessary to reject even more orders than were accepted. Finished stocks of these goods are totally depleted and much valuable business is being diverted to other manufacturing sections. There has been an improvement in the collec tion situation during the past month and condi tions are reported as fair to good. OPERATIONS IN THE HOSIERY INDUSTRY Feb. 1921 Feb. 1921 compared to compared to Jan. 1921 Feb. 1920 Firms selling to wholesale trade: Product manufactured during February............................. +29.0% -67.1% Finished product on hand Feb ruary 28............................... + 18.3% Raw materials on hand Feb - 1 1 .8 % ruary 28.............................. - 7.6% -45.3% Orders booked during February + 131.2% - 1 . 1 % Unfilled orders on hand Feb ruary 28............................... + 81.5% -67.6% Firms selling to retail trade: Product manufactured during February............................. +65.6% -89.5% Finished product on hand Feb ruary 28............................... -18.8% -78.0% Raw materials on hand Feb ruary 28............................... + 7.8% -35.9% Orders booked during February +38.8% -10.3% Unfilled orders on hand Feb ruary 28............................... + 108.8% -89.8% UNDERW EAR S compared to a normal year, the volume of «. orders thus far received for 1921 light-weight underwear totals barely 50 per cent. Buyers ignored the markets when the first openings in these goods were made early last fall, and no interest was displayed until the middle of Janu ary. Then followed three weeks in which jobbers and retailers entered the markets in numbers and bought conservatively to fill their early needs; the total of these orders gave the appearance of considerable activity. A few manufacturers at that time booked sufficient business to occupy their mills for three to four months, but the majority were not so fortunate and received only fair-sized orders for immediate shipment. The demand fell off during the latter part of A February and while March has seen some im provement the volume of reorders has not reached expectations. Few, if any orders, are being re ceived for delivery beyond three weeks, most buyers insisting upon immediate shipment. Much business still remains to be booked if the season is to approach normal. Several reporting firms state that they are operating at full capacity, while other manufacturers give their present pro duction at 30 to 40 per cent. Average operations are between 65 and 70 per cent. Prices of light-weight goods are generally firm, although a number of slight advances during the past month have been reported. Collections are reported as fair. General showings of heavy-weight underwear for fall delivery were not made early in March, the time previously set for them. Manufacturers were unable to agree on a price basis and the official announcement of the new level was post poned. Several mills in this district nevertheless offered their lines to the trade, but the response has not been encouraging. When a few mills late in February anticipated the announced open ing and received fair sized orders there was a feeling that the general showings would be pro ductive of good business. The expectations have thus far failed to materialize. Jobbers and re tailers have shown little interest and the orders booked are few. The present situation is similar to that which existed in the light-weight underwear market when the opening of spring, 1921, goods was first made. Most mills manufacturing heavy weight underwear are shut down. A number, how ever, are operating on a 5 to 10 per cent basis. CONDITIONS IN THE UNDERWEAR INDUSTRY Feb. 1921 Feb. 1921 compared to compared to Jan. 1921 Feb. 1920 Product manufactured during February............................... +85.1% - 41.3% Finished product on hand Feb ruary 28................................ - 8.5% + 166.2% Raw materials on hand February 28.......................................... + 5.0% . - 38.9% Orders booked during February. - 2 2 .2 % +359.1% Unfilled orders on hand February 28.......................................... +27.3% - 64.5% BUSINESS CONDITIONS LEATHER S hoes U R IN G February and the first two weeks of March, the volume of orders booked by concerns manufacturing shoes designed for the Easter and early spring trade, reached such pro portions as to tax the productive capacity of these firms. Retailers who delayed buying until the latter part of this period had difficulty in placing their orders, for early in February most Manufacturers booked their limit for March and early April shipment. Individual orders were not of large size, for there have been so many styles offered—especially in women’s and misses’ shoes— a^d the public has so long delayed purchasing, that retailers have been unwilling to stock heavily. They, therefore, have made moderate sized purchases and have restricted them to mimediate and nearby shipment. But the number of these orders has been large, and the time in which they have been placed short, so that the industry has been hard pressed to fill them. This is due, in large measure, to the fact that the demand has been confined ‘almost ex clusively to the new styles, and manufacturers therefore have been unable to draw upon their stocks of finished goods. The interest displayed in the new spring styles, however, has not extended to the staple lines, stocks of these shoes have been accumulating for Months, due to the continued operations of many hrms in face of the almost total absence of de mand. The supply of such goods is ample to P7eet any normal demand which may arise. Unufacturers of heavy work shoes have not siared in the buying activity of the past two Months, and they report a continuation of the m| of the last nine months. R cannot be said that the shoe industry as a whole has returned to a normal basis of activity, M spite of the demand for novelty spring shoes. suallyj shoe orders for spring and summer elivery have been completely placed and largely Made up by this period of the year, and bookings aie °pen for fall styles. Thus far during the current year, little if any attention has been given to fall shipment, and considerable business is still 0 be booked for summer delivery. The results of j 15 the Easter demand will largely determine whether this business will be forthcoming, for orders for late spring and summer delivery are being with held until the disposition of the consumer, both as to style and price, can be adequately sensed. While some concerns report a further retarda tion, collections as a whole are reported as fair to good. L eather The situation in the shoe industry has been duplicated to a great extent in leather circles. As retailers entered the markets, shoe manu facturers in turn, displayed considerable interest in the materials used in producing the novelty goods for Easter and an “ immediate shipment” demand developed for these leathers—colored calf and kid in particular. The finished stocks, however, were soon exhausted and tanners found it difficult to produce the desired quantities for the stipulated deliveries. This was due, not only to the short time between the placing of orders and the requested shipping dates, but also to the scarcity of hides and skins of the requisite quality. While it is true that in general a plethoric condition has existed in the hide and skin markets for almost a year, the supply of the finer qualities has been comparatively scant, and in several grades was not equal to the demand. Prices for these raw materials strengthened, and an increase in the quotation for the finished leathers followed. March witnessed a slight falling off in this de mand, however, for shoe manufacturers have delayed the ordering of further supplies, not having received orders for late spring and summer delivery. The demand which still exists for these leathers is practically the only interest being evidenced in the industry. Manufacturers of staple leathers have not participated to any appreciable extent in the activity of the novelties. There has been a slight increase in the sale of black kid, but the demand is till far below normal and the supply of the finished product more than adequate to meet the present call for it. Firms manufacturing this and other types of staple leathers have not increased their operations. Many plants remain closed and as a result, there is still considerable unemploy ment in the industry. Several tanners who in 16 BUSINESS CONDITIONS creased operations early in January have since gone back to the schedules maintained prior to that time. There has been practically no change in the business received from, foreign sources, and the export trade, therefore, continues slack. Viewed in its entirety, it may be said that the tanning industry has recovered somewhat from the almost complete apathy which characterized it during the latter half of 1920, but it is still far from a normal operating basis. L eather G oods Improvement has been made in the leather goods industry since the first of the year. The month of February witnessed a revival of interest which continued during March, and the industry displayed marked activity. While orders were filled in part from stocks, these were not sufficient in all cases to meet the demand, several concerns reporting the total disposition of inventories of finished goods. This, coupled with the introduc tion and demand for new goods, has resulted in increased operations, and the industry is running at approximately 60 per cent of its productive capacity at the present time. In spite of the increased interest, prices con tinue to decline, slight recessions having been recorded since February. No difficulty is being encounted in securing raw materials. The supply of grades of leather used for traveling and other leather "goods is plentiful. Prices are somewhat lower. Other materials are in good supply with quotations firm at the low levels of late 1920. In general, cancellations are no longer a factor in the industry, although when shipments are not made promptly, a tendency to cancel is noticed in some quarters. Manufacturers as a whole express themselves as well satisfied with conditions at the present time. PAPER LTHOUGH during February there has been a continued increase in the number of in quiries in the paper market, the actual orders placed have showed some slight decline. The policy of A dealers and consumers of paper continues to be “ small lots for quick shipment.” The consensus of opinion is that the present demand is just about 50 per cent of what it would be in a normal year at this period. A year ago the industry was operating at a full 100 per cent capacity, and some concerns were even forced to put in extra hours to meet the excessive demand. Present conditions are entirely different. With few excep tions, orders are not sufficient to keep the mills busy and the average of plant operation con tinues to be from 60 to 75 per cent of capacity. Some plants, which were idle for several months, have accumulated orders sufficient for nearly nor mal operation at the present time, however. These plants which continued their operations during the past few months report ample stocks of standard sizes which have accumulated in the effort to keep their plants running. Manufac turers who accept orders on specification only are proportionately not as restricted in their present operations. Conditions in the wrapping paper market are quiet, even dealers in food products refusing to buy for any but immediate needs. Users of book paper continue to be conservative purchasers and the inactivity of the printing and publishing industry has also had its effect on this line. Newsprint, influenced in part by the imports from Germany and Scandanavia, has shown a considerable decline since the first of February. Sales on the spot market, however, are holding up fairly well. Contract prices, as indicated by bids to the Joint Congressional Printing Com mittee, show a decided drop from prices quoted in the rejected bids of January 31st, which were then stated as “ the lowest that had been re ceived in several years.” During the month of February, the general reduction in price throughout the industry has been approximately 10 per cent, and present prices are from 25 to 30 per cent under those of December. The decline has been steady for the past five months, but in some instances during the past month, competition seemed to cause prices to stiffen somewhat. The raw material situation continues easy with further declines in prices, being regulated largely by the demand. The declines in the past sixty BUSINESS CONDITIONS days have not been so rapid, however, as in the preceding four months period. Although present prices are under those of January ist, they are still ioo to 150 per cent over those of 1914. The employment situation is approximately the same as during January, the manufacturers feeling that forces have been reduced as much as ls possible if their organizations are to be kept together. Even with reduced forces, the same results in production are apparent. Some con cerns are operating with the same force on a shorter time schedule, while others are taking the opportunity to repair machinery and conduct improvements in plants, which up to within the Past few months could not be made because of the necessitv for continued operation. Cancellations are few and these are largely because of reductions on the part of competitors. There are now a number of influences at work to prevent a repetition of the cancellation evil in this industry. In the first place, orders are not bemg placed far enough ahead to cancel; the Purchaser needs the goods even before he orders them. Second, the price declines have been shght in proportion to the drastic cuts of a few months ago and confidence is being restored to some extent. Third, the manufacturers are giving their customers no opportunity to cancel orders, shipping and billing goods promptly, and in this they are aided to a great extent by the improved transportation conditions. And lastly, orders are . such small size that buyers do not feel like risking their business reputation by canceling them. Collections continue to be only fair except with those concerns which deal only with carefully selected customers. p r in t in g T and p u b l ish in g printing and publishing industry showed a more definite decrease in all lines of work urmg the month of February than in any of the Past few months. Although it is reported that ebruary usually shows an increase over the month of January, it is noted that in the instances ere this increase has materialized, it has been of ecidedly smaller proportions than in an average 7 ear. On the whole, the larger work has declined, he 17 except in the cases where plants are operating on contracts placed some time ago. Smaller work shows some decrease except in the case of social and organization work, which however amounts to no considerable portion of the total. The decrease in magazine subscriptions and sales through newsdealers, representing as it does the composite feeling of the people in every sec tion of the country, is an index of the trend of the printing and publishing industry. Advertising, although strengthened somewhat by the campaigns of automobile manufacturers, has continued to decline in volume during the past month. The primary reason for this is the lack of funds on the part of advertisers, for the necessity for advertising is even more urgent now than heretofore. Bradstreet’s Commercial Agen cy reports that 84 per cent of the business failures of the past year occurred among firms which did not advertise. One publisher reports that new orders for advertising are almost equal to cancellations of orders previously received. He also gives the sentiment of the entire industry when he says that the publisher or printer cannot afford to finance proposed advertising campaigns, even though a large amount of business could be secured on a basis of future payment. This state ment is supported by an excerpt from “ Printing A rt” for March 1921 to the effect that “ the average profit in the printing business for the year just past, as indicated by returns now avail able, is just a little over nine per cent.” The situation in the paper market is easy and printers and publishers can obtain almost im mediately any quantity and quality of paper desired. Prices have shown a further decline of about 10 per cent during February, and other supplies have receded slightly. Prices of finished articles have undergone some revision, especially in lower grades of work which are largely machine made. There is some scarcity of highly skilled labor for the best grade of work and the refusal of the unions to accept any wage decrease at the present time has permitted little reduction in prices of high-grade goods. Collection conditions are about the same as last month with a tendency toward slowness and the general condition only fair. BUSINESS 18 CONDITIONS W HO LESALE GRO CERIES U Y E R S in the wholesale grocery market continued during February to purchase carefully, but a more cheerful feeling developed throughout the trade, with the retailer evidencing a continued desire to absorb his loss and reduce prices. Demand for all except staple goods de creased slightly. Some houses which report an increased demand attribute this to one of several causes. First, there is a depletion of the stocks of retailers with whom they deal; second, there has been somewhat of a revival of interest in the sugar situation; and third, concerns have in some instances expanded their business. The reports of increased demand during the month of February are in few instances upheld by the figures accompanying such reports. The logical assumption is that the further declines in prices have caused the total volume of sales, as expressed in dollars, to decline to some extent, while as expressed in quantity a slight increase has probably occurred. The amount of sales as compared to February, 1920, is considerably lower, and we may attribute a large part of this to the radical difference in prices of practically all commodities. The demand during the current year, however, has been thus far on a much lower scale than during the corresponding period of last year. With the exception of sugar, which advanced about one cent per lb., due largely to the control of the Cuban Finance Commission, prices of all goods continued to decline. Canned fruits and syrup declined most sharply. Dried fruits dropped about 15 per cent, with prunes, which have held fairly steady up to this time, included in the general reduction. Canned vegetables receded after the slight increase of last month, although tomatoes have remained practically the same. Flour and rice have been fairly steady with a tendency toward slightly lower levels. Beans and cereals also have declined slightly. Coffee and raisins have shown the only element of strength apparent in the market, with raisins slightly stronger and coffee reflecting a small advance. On the whole, prices for all staples have been B rather quiet, with any price changes leaning toward the side of a decrease. Prices of paper, paper bags and cotton twine have diminished about 15 per cent, but reports indicate that present quotations are considerably above nor mal. According to reports, cancellations continue in scattered instances, where the markets are unfa vorable for the buyer. One concern reports some cancellations of orders recently placed by smaller retailers, but the general feeling is that this con dition is no longer a problem. According to the ratio of accounts outstanding, collections during February showed little change from conditions which prevailed in January. WHOLESALE GROCERY TRADE Feb. 1921 Feb.1921 compared to compared to Jan.1921 Feb. 1920 -24.9% Net sales during month............. -4.2% Accounts outstanding at end of month................................... - 2 .2 % - 20 .6 % Ratio of accounts outstanding to sales: February, 1921................. ...................106.3% January, 1921................... ...................106.7% December, 1920............... ...................101.3% November, 1920............... ...................102.7% 99.3% October, 1920................... 88 . 1 % September, 1920............... C O N FEC TIO N ER Y LTHOUGH the approach of the Easter season k. has tended to increase the demand for special goods in the confectionery line, the general demand is at a rather low ebb, and has suffered some decrease in the past month. The larger concerns which manufacture well-known standard brands of candy, however, have noted some in crease in sales during February, which would lead to the belief that the public in its purchases of candy prefers to buy this type of goods. The supply of Easter goods in concerns which handle specialties in that line is barely sufficient to meet the demand. With the exception of Easter goods, practically A BUSINESS CONDITIONS all manufacturers have on hand sufficient stocks of finished product to meet the present less than normal demand. The failure in the materializa tion of the huge Christmas trade expected last Fall forced many concerns to carry over large quantities of finished goods. The operation of plants at this period of the year would normally be about 80 per cent of capacity, but the present Percentage runs from 50 to 75 per cent. The candy business is to a large extent seasonal, with the Christmas and Easter trades necessitating extra hours during those periods. The inability to secure the amount of sugar required last year and the year before curtailed production to a considerable extent, but even in the face of that difficulty practically all plants were operating at a full 100 per cent capacity at this time last year. The raw material situation is considerably easier than it has been for some time, and prices have declined extensively during the past few Months. Sugar made a slight advance in February, but at the present time is selling at an almost Normal price. Cocoa beans are reported as selling at a price distinctly below normal. Paper and Paper boxes have reached a low point, while tin and glass containers, though much lower in price, are still above normal. Practically no price changes have been made since January 1st, when there were reductions in Poetically all lines. Further slight reductions, however, in standard 5 and 10 cent goods and in Peanut products have been noted. Although there is a distinct change in the employment situation from conditions of last year, there is only a slight difference in the num ber employed at present as compared with the dumber employed on January 1st. Some of the smaller manufacturing concerns report slight ^creases; others report employees working ° n reduced time, while a number of larger concerns report some decrease in the number of crnployees. The cancellation problem has been eliminated because of the present buying policy in the trade, with small orders placed carefully and n° sales for future delivery. Collections on the whole are fair, except throughout the South, and this is largely because of the greater care 19 exercised by the manufacturers in accepting credit risks. TOBACCO H E tobacco industry throughout the district moved into a slightly healthier position during the month of February. A slight increase in the demand for cigars has been noted in scat tered instances, but this is by no means general. Although there appears to be practically no tend ency toward a further decrease, the demand on the whole is still considerably below normal. The open weather which has prevailed throughout most of the district has undoubtedly influenced tobacco sales favorably, while the continued un employment in some sections has had the opposite effect. Stocks of finished goods, materially in creased by accumulations carried over from 1920, are sufficient to meet all current demands, and the size of these stocks has resulted in the cur tailment of operations in many plants to from 50 to 75 per cent of capacity. This, however, is a slight increase over the operations of last month. Raw material for present use is fairly easy to obtain, although there is some scarcity of finer grades. Prices of old leaf, with the exception of wrappers and binders which remain firm, have declined slightly. All the current Pennsylvania crop practically has been bought by manufac turers and dealers at prices ranging from 15 to 20 cents, and they have now withdrawn from the market, with their requirements apparently satis fied. Prices reflect no material change, especially in fine cigars, as the raw material being used con tinues of high value. Cheaper cigars have in some instances been reduced, however, and retail ers are endeavoring to rid themselves of all excess stocks. Cancellations of orders of from one to three week periods are noted, but strictly speaking these are merely postponements until the retail sales show some improvement. Collections are fairly good, due largely to the strict terms of the industry, but there are instances of a request for note settlement or short renewals. T 20 BUSINESS CONDITIONS F I N A N C I A L CO NDITION S F ederal R eserve B anks O LD IN GS of discounted paper by the Federal Reserve Bank of Philadelphia on March 19th were $150,763,000, as compared to $156,220,000 on February 19th and $207,283,000 on March 19,1920. Cash reserves on March 19th were $186,578,000, a gain of 4 per cent over the previous month and of 32 per cent over the figures of a year ago. Federal Reserve note cir culation of this Bank continued its downward trend from the high point of $283,740,000 (reached on December 23, 1920), the circulation on March 19th being $241,514,000. The total bill holdings of all of the Federal Reserve banks amounted to $2,347,699,000 on March 18th, a decline of 8 per cent from February 1 8th. With this decline in bills there also has been a decline in the circulation of Federal Re serve notes from $3,037,444,000 on February 18th H to $2,962,880,000 on March 1 8th and a gain in the gold reserves of $73,387,000. Federal Re serve note circulation is now down $442,051,000 or 13 per cent from its peak. Large importations of gold received during the last few months are undoubtedly an important factor in increasing the gold reserves. The chart below shows the trend of total holdings of discounted and purchased paper, Federal Reserve notes in circulation and total reserves for the Federal Reserve system from the beginning of 1917 to the end of February. M ember B ank R eports Loans and discounts by member banks when added to rediscount accommodations obtained from the Federal Reserve Bank give an indication of the trend of borrowings. In the following table, loans and discounts of 58 member banks in Philadelphia, Camden, Scranton and Wilmington BUSINESS CONDITIONS have been segregated from the other investments of those institutions: L oan s and D isco u n ts Jan. 7 14 21 28 Feb. 4 11 18 25 Mar. 4 11 R eserv e B ank T o ta l borrow ings A ccom m od ation o f C u sto m ers $615,404,000 613.103.000 616.785.000 610.705.000 608.983.000 610.637.000 608.696.000 604.810.000 603.082.000 603.568.000 $110,036,000 110.432.000 103.610.000 111.353.000 111.986.000 113.913.000 125.223.000 124.526.000 119.711.000 114.457.000 D ep o sits $725,440,000 $709,869,000 723.535.000 698.759.000 720.395.000 698.077.000 722.058.000 690.938.000 720.969.000 687.418.000 724.550.000 691.502.000 733.919.000 675.485.000 729.336.000 677.124.000 722.793.000 678.394.000 718.025.000 685.151.000 From December 18th to March n th there was a decline in loans and discounts at the member hanks and in their borrowings from this Bank, mdicating a reduction in the total of customers’ borrowings of 115,894,000. Deposits, which had been decreasing down to February 18th, have since shown an upward trend. D ebits to I ndividual A ccount Charges to depositors’ accounts by banks which are members of the 13 clearing houses in *his district increased 2.7 per cent for the four weeks ending March 16, in comparison with the Preceding four weeks’ period. S avings D eposits Reports from 24 savings banks in the district show a small but steady increase in deposits 21 for the fourth consecutive month. Evidently unemployment and part-time work have not been able thus far to counterbalance the good habit of saving. Some of the banks showed a decline in deposits, which they ascribed largely to invest ment in securities, but their deposit losses were not sufficient to offset the gains on the part of the other institutions. Comparative total figures are given below: In Philadelphia 1921-March 1...... $256,901,359 February 1.. 256,574,783 January 1 ... 253,320,499 1920-December 1.. 243,506,317 March 1...... 241,958,044 Outside of Philadelphia Totals $53,100,429 $310,001,788 52,189,574 308,764,357 51,377,325 304,697,824 51,237,019 294,743,336 48,082,290 290,040,334 C ommercial P aper The average rate on commercial paper bearing good names has been 7^ per cent, and the paper of concerns which showed an exceptionally attrac tive ratio of quick assets to current liabilities has been moving at 7X per cent. February sales were comparatively light, though one or two of the dealers stated that they compared favorably with February of 1920. Many of the larger concerns which issue paper have been turning their attention to liquidating and others hesitate to enter the market because of the slackening in trade and the high rates demanded by the banks on paper which they purchase. The banks are stressing particularly a low ratio of quick assets to debt and sound inventory values. Country banks have been the principal customers. COMPILED AS OF MARCH 22, 1921 This business report w ill be sent regularly to any address upon request. 22 BUSINESS RESOURCE AND LIABILITY ITEMS of Member Banks in Philadelphia, Camden Scranton, and Wilmington CHARGES TO DEPOSITORS’ ACCOUNTS Other than Banks’ or Bankers’, as Reported by Clearing Houses M ar. 16, 1920 W eeks E nding Feb. 16, 1920 M ar. 17, 1919 Altoona................ 33.538.000 32.930.000 33,457,000 Chester................ 5.187.000 5.430.000 5.271.000 Harrisburg........... 6,240,000* 5,900,000* 4.240.000 Johnstown............ 4,855,000* 4,227,000* 3,42,3000 Lancaster............. 5.790.000 4.790.000 5.926.000 Philadelphia......... 331,786,000* 282,597,000 385,555,000 Reading............... 6.308.000 6,228,000* 6.059.000 Scranton.............. 13.351.000 15.151.000 12.442.000 Trenton............... 10.500.000 11.387.000 11.712.000 Wilkes-Barre........ 8.442.000 8.256.000 8.358.000 Williamsport........ 4.061.000 3.699.000 4.501.000 Wilmington.......... 8.463.000 7.627.000 10.326.000 York.................... 4.385.000 3.437.000 4.333.000 Totals............... 3406,337,000* 3360,659,000* 3465,604,000 *Larger number of banks reporting. Gold reserve......................... Other cash............................ Total reserve................... Discounts—Secured by U. S. securities.......................... Discounts—all other............ Purchased bills.................... U. S. securities.................... Total earning assets......... Uncollected items................ All other resources............... Total resources................. L IA B IL IT IE S 3108,104 45,672 23,480 33,336 3210,592 362,273 2,817 3460,009 M ar.19,1921 M onth ago 38,609 17,010 1 6,366 97,536 1,025 3104,927 3269,554 46.039 46.039 2,999 3467,078 38,570 17,010 1 2,773 104,377 337,934 198,042 379,428 45,283 11,342 12,447 155,295 3839,771 672,893 36,976 110,036 335,537 194,928 380,172 45,700 12,225 12,016 155,282 3835,890 653,222 38,280 113,913 3162,735 49,238 5,591 31,988 3249,552 376,031 16,822 3480,229 Y ear ago 38,198 8,805 14 16,016 94,837 3107,150 3110.853 3255,304 325 6485 19,582 22,344 50,105 70,239 2,287 3,353 3460,009 3480,291 M a r. 21 1921 Philadelphia banks: Loans.......................... 3714.992.000 Deposits...................... 619,978,000 Ratio loans to deposits 115% Federal Reserve Bank: Discounted paper.... 3151.031.000 54% 90-day discount rate. . 6% Commercial paper........ F eb ., 1921 P ercen tag e increase or decrease co m p ared w ith P revious m o n th Y ear ago +0.3 % - 12 -9 114 % %* 119 - 2 % -2 6 53 %* 41 -1 6 %* 7X% * 6 6 % % %* % %* %* %* P ercen tag e increase or decrease com p ared w ith P revious m o n th Bank clearings: In Philadelphia......... 31,547,995,871 -1 6 Elsewhere in district.. 94,337,880 -22 Total......................... 31,642,333,751 -17 Building permits, Phila.. 31,345,170 +20 1,178,330 - 8 Post office receipts, Phila Commercial failures in district (per Brad52 81 street’s) ..................... Latest commodity index figures: Annalist (food prices 194,556 +5.3 3181,921 -2.1 3118,650 -4.1 Bradstreet’s.............. *Actual figures Y ear ago % —13 % % —12 % % % % * a Y ear ago 3182,782 3181,429 3137,394 3,796 2,898 492 3186,578 3184,327 3137,886 373,167 77,596 14,149 33,669 3198,589 350,626 31,293 3467,078 Loans and discounts: Secured by U. S. securities. 333,155 Secured by other stocks and bonds ............................. 194,274 All other........................... 376,139 Investments: United States bonds......... 43,702 U. S. Victory notes........... 10,305 U. S. certificates of indebt edness ............................. 13,180 Other bonds, stocks and se curities ........................... 155,496 Total loans, discounts and investments.................. 3826,251 Demand deposits................ 646,040 Time deposits..................... 39,111 Borrowings from Fed. Res. Bank................................. 114,457 2 8 1 1+ Capital paid in..................... Surplus................................ Profit and loss.................... Government deposits........... Members’ reserve account. . Other deposits...................... Total deposits................. Federal reserve notes........... Federal reserve bank notes... Deferred availability items.. All other liabilities............... Total liabilities................. M ar.19,1921 M onth ago A t the close of business M ar. 11 i Feb. 11 1 Jan. 7 1921 | 1921 1 1920 (In thousands of dollars) BUSINESS AND FINANCIAL INDICATORS STATEMENT Federal Reserve Bank of Philadelphia (In thousands of dollars) RESO URCES CONDITIONS % -34.8% % —28.1% % -43.0%
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