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BUSINESS AND FIN A N C IA L CONDITIONS IN THE T H IR D FE D E R A L PH ILA D ELPH IA R E SE R V E D IS T R IC T FEBRUARY I, 1922 By RICHARD L. AUSTIN, Federal Reserve Agent and Chairman FEDERAL RESERVE BANK of PHILADELPHIA GENERAL SUMMARY CONTENTS For summary of Federal Reserve Board on business conditions throughout the United States, see pink slip inserted in this report. P age Agriculture ................................................................................................. 21 Autom obiles................................................................................................. 9 Bankers’ acceptances................................................................................ 5 Building materials .................................................................................... 10 Cement .......................................................................................................... 10 Christmas savings clubs.......................................................................... 7 Coal, anthracite........................................................................................... 12 Coal, bituminous......................................................................................... 13 Coke .............................................................................................................. 14 Commercial paper....................................................................................... 5 Cotton ............................................................................................................ 14 Cotton yarn s............................................................................................... 14 Financial situation..................................................................................... 4 Floor coverings........................................................................................... 17 Foreign exchange....................................................................................... 6 General summary...................................................................................... 1 Groceries, wholesale.................................................................................. 20 Hardware, wholesale................................................................................ 12 Hides and skins......................................................................................... 18 Hosiery ........................................................................................................ 16 Iron and steel............................................................................................. 7 Leather .......................................................................................................... 18 Lumber .......................................................................................................... 11 Paint .............................................................................................................. 11 P aper..................... , ...................................................................................... 19 Paper boxes................................................................................................. 20 Pottery .......................................................................................................... 11 Retail trade................................................................................................... 7 Savings deposits......................................................................................... 6 S h o es............................................................................................................. 18 Silk ............................................................................................................... 14 Tobacco, cigars........................................................................................... 23 Underw ear................................................................................................... 17 Wool, raw ................................................................................................... 16 Woolen and worsted goods................................................................... IS Woolen and worsted yarns................................................................... 16 T H A T liquidation is steadily progressing and that necessary readjustments are still being made, preparatory to a return to normal con ditions, is disclosed by a survey of industrial develop ment during the past month. Although individual firms in all branches of industry and trade have received considerable new business, and although a few industries have slightly bettered their positions, little if any improvement in the situation as a whole has been made. Much was looked for immediately after the first of January, but it was an error of course to expect any widespread change in the status with the mere passing of a date. The end of the year reports from the iron and steel industry were almost unanimous in their forecast of considerably better business with the advent of the new year. But thus far the markets have displayed only slight ac tivity, although it is true that more business has been transacted than in the corresponding period of December— one of the dullest months of the year in the iron and steel industry. Some firms report fair sized orders from automobile manufacturers and the railroads. But these have been in a distinct minority, and the few orders received have been confined en tirely to immediate shipment. The industry as a whole has been operating at a rate less than 40 per cent of capacity, but stocks have accumulated never theless, and prices in many cases have sagged. Conditions in the coal industry have not improved to any extent. Retail sales of domestic sizes of an thracite have increased slightly owing to the recent cold weather, but dealers’ stocks have been so heavy that not only has there been no increase in shipments from the mines, but shipments have actually fallen off. Production has been curtailed and unemploy ment in the industry is very prevalent. Railroads and public utilities have made small spot purchases of bituminous coal, but these sales have not resulted in any decided improvement in the market, for the call from industrial firms has been exceedingly small. Production of bituminous coal, too, has been de creased, and many mines have been closed, especially in union fields. In non-union mines wage reductions have been made and operations have been more generally continued. The importation of British coal, although only slight in amount has had a dis concerting effect upon the market. Nor, on the whole has business during January been any better in the textile industries. Sales of cotton goods, which were fairly large at the close of 1921, have declined, and the market has been very quiet. The orders received have been small in size and few in number, and prices in some cases have receded. Cotton yarns have been in scant demand, and sales of raw cotton have been small. The raw wool mar ket, however, has been exceptionally active and is in better position, perhaps, than that of any other raw material. The finer grades have been well bought, and since many of these have been in meagre supply, prices have risen rapidly. The lower and medium grades, too, have been sold in large quanti ties, and this is also true of carpet wools. Raw wool prices in general have advanced considerably, and this increase has been reflected in the price of wool yarns. In spite of the advanced quotations, knitting yarns have been in active demand, and fairly large sales have been made. The woolen and worsted cloth market, however, has been marking time, and there have been few purchases of cloth either for men’s or women’s wear. The carpet and rug industry continues active. Wiltons and Axminsters have been sold far ahead, and manufacturers have refused to accept further orders because of advancing raw wool prices. Velvets and tapestries have also been Ixmght in large volume. Although the raw silk market reacted slightly dur ing the third week of January, quotations in general have been fairly well maintained at the high level reached early in the month after a spectacular ad vance. But buyers of all silk products, in the expecta tion of a further reaction, have refrained from mak ing commitments. As a result, purchases of raw silk have been made only when it was needed for immedi ate use. The demand for broad silks and ribbons has been small, owing to the price increase and to the fact that retail sales have not been large. The de mand for silk and heather hosiery, which was very good for many months, has been adversely affected by the high prices of raw wool and raw silk. Jobbers and retailers have refused to pay the increased prices quoted for hosiery, and the demand, therefore, has fallen, although retail sales have been good. Hosiery production, however, has been maintained at very close to capacity, since orders still on the books are sufficient to assure operations for some months to come. The underwear demand has created an anom alous situation. Very little business in light weight goods for spring has been booked since the rise in the raw cotton market in September, for jobbers who failed to make commitments before that time have refused to pay higher prices for goods which other dealers succeeded in ordering before the advance. Not only have but few orders been placed, but several cancellations have been reported. For heavy weight underwear, on the other hand, there has been a good call for spot shipment, and in addition a large number of orders for next fall have been received. A slight change for the better has occurred in the shoe industry. Shoes of lower and medium grades were fairly active at the close of 1921 and have continued so. Sales of the finer quality of shoes, which were small during November and December, have recently increased. Considerable business has been placed for prompt shipment, and many retailers and jobbers have ordered shoes for spring delivery. As a result, the leather markets have also continued fairly active. The call for the medium and lower grades of upper leather has been good, and the de mand for the finer grades of calf and kid has in creased. Sole leather, too, has sold well, and prices have remained firm. Since the export demand is es sential to the prosperity of the leather industry, it is encouraging to note an increase in the number of orders from abroad. Although these orders have not been large, they have been received with greater regularity. The principal recent shipments have been made to England, Spain, Belgium and Scandinavia. Excess stocks of raw hides and skins have been dis posed of, prices have remained firm, and the tone of the market is good. Conditions in the paper industry are exceedingly dull, the demand for all grades being small. Pro duction is proceeding at about 60 per cent of capacity, but even at this reduced rate stocks are accumulating. In spite of this fact, slight increases in book paper prices have been announced by several firms. Paperbox manufacturers report slight improvement in the demand for their products. The cigar industry has suffered a relapse, attribut able mainly to seasonal conditions. Many of the smaller factories, which were closed for inventory taking, have not been reopened and will not be, ac cording to manufacturers, until the demand improves. There has been no improvement in the call for building materials, for although a large number of building permits has been issued during the last four months, only comparatively few contracts have been let, and on but a small percentage of these has work been started. This, of course, is owing mainly to seasonal conditions; and since the volume of per mits issued has been large, it is probable that con siderable building activity will be witnessed during the spring and summer months. Retail trade during December was exceptionally good, the sales for the month as reported by 47 stores in the Third Federal Reserve District bemg 1.2 per cent above those of the same month of 1920. Since retail prices had declined consider ably during the year, the volume of goods disposed of was really much larger than this percentage indi cates. Trade during January, however, has fallen °ff markedly, and advance reports indicate that sales for this month will be much less than those made during January, 19 2 1. Reports on unemployment, issued by the Pennsyl vania State Department of Labor, reflect well the in dustrial situation in this district during the last six months of 19 21. Unemployment figures declined steadily during the business revival of the fall months, but with the reaction that began in Novem ber and became more pronounced in December, un employment increased rapidly. At the end of the year, the department estimated the number of unem ployed in the six cities of Altoona, Harrisburg. Johnstown, Philadelphia, Scranton and Williams port, to be 243,293, the largest estimate of the year. Some of this increase was attributable to the closing of plants for inventory taking. But to a greater ex tent it was due to the curtailment of production be cause of the absence of demand. This is shown by the fact that the figure for January 15— a time when the taking of inventories was practically completed— was 234,910, a decrease of only 3.4 per cent. The latter total indicates that little improvement in the general situation occurred during the first two weeks of the new year. The number of commercial failures in this district and in the United States as a whole, as reported by R. G. Dun & Company, increased rapidly during the closing months of 19 21, as is shown by the preced ing table. During January the number of failures has risen even more sharply. There were 471 failures in the United States during the week ending December 29; 540 in the week ending January 5; 719 in the week ending January 12, and 639 in the week ending January 19. Considerable emphasis has recently been placed on this increase as pointing to a prolongation of the present inactive state of busi ness. But this does not necessarily follow. With the exception of a few large failures in December, the average liabilities of the recent failures have been decreasing, and a study of failure statistics discloses, first, that in former periods of business depression the largest number of failures occurred at the end of the period or, indeed, when improvement had actually begun; and secondly, that the average liabilities of these late failures were less than those of the failures occurring in the earlier stages of the period. Further more, for many years, the number of failures has tended to increase sharply shortly after the first of the year. Since, in the past, the issuance of new securi ties has usually increased as the end of a period of depression approached, it is interesting to note that in recent months the volume of new securities issued has been growing. The figure for October was $103,148,500, for November $255,937,800, and for December $318,335,100. One of the most favorable factors in the present situation is the apparent stability of wholesale com modity prices. The following table gives the index numbers of the Bureau of Labor Statistics for the years 1919-20-21. ALL-COMMODITY INDEX NUMBER (Bureau of Labor Statistics) 1919 1920 January ............................................. 203 248 February .......................................... 197 249 March ............................................... 201 253 April ................................................. 203 265 M ay................................................... 207 272 June ................................................... 207 269 July ................................................... 218 262 August ............................................. 226 250 September ........................................ 220 242 October............................................. 223 225 November ........................................ 230 207 December ......................................... 238 189 COMMERCIAL FAILURES 1921 United States Number Liabilities January .......... ... 1,895 $52,136,631 February ........ ... 1,641 60,852,449 March ............ ... 1,336 67,408,909 April .............. ... 1,487 38,567,769 May . ... 1,356 57,066,471 June ................ ... 1,320 34,639,375 J u ly .................. ... 1,444 42,774,153 A u gu st............ ... 1,562 42,904,409 September .... ... 1,466 37,020,837 October .......... ... 1,713 53,058,659 November . . . . ... 1,988 53,469,839 December . . . . ... 2,444 87,502,382 Total .......... ... 19,652 $627,401,883 Third District Liabilities Number 96 71 63 65 69 71 72 68 63 77 102 124 941 $2,183,908 3,701,526 1,082,419 1,575,775 1,516,894 1,939,408 1,254,361 2,090,756 978,713 7,890,928 2,944,372 4,176,377 $31,335,437 1921 177 167 162 154 151 148 148 152 152 150 149 149 It will be seen that the peak of prices was reached in May, 1920, and that thereafter there ensued a steady decline until June, 19 21. Since then the index 3 number has fluctuated but four points, and during the last three months of the year prices have changed very little. There have been wide changes in some of the commodity groups, it is true, but the general price level seems to have become fairly well stabil ized. It is also encouraging to note the firm tone of the foreign exchange markets, in spite of recent political developments in Europe. The reports of a group of more than 800 member banks located in the principal cities of the country show a decrease of $1,716,000,000, or 10.5 per cent, in the total loans, discounts and investments of those banks during the past year. That figure, however, is inclusive of rediscounts with the Federal Reserve banks, and, as the reduction of their borrowing from the Reserve banks was $1,364,000,000, it appears that the total of their outstanding loans is still large. Deposits only decreased $255,000,000 in the year, or 1.8 per cent. The course of the loans, discounts and The period from December 14, 19 2 1, to January investments, total deposits, and borrowings from the 18, 1922, was marked by a rather unusual improve Federal Reserve banks during the past two years is ment in the condition of the Federal Reserve banks. shown on the accompanying chart. 1 he holdings of discounted bills decreased 239 mil No changes were made recently in the discount lions of dollars; Federal Reserve notes in circulation rates of the Federal Reserve banks in the eastern sec declined 164 millions; total deposits increased 42 tion of the country, but the market rates on commer millions; and total reserves increased 50 millions. cial paper and bankers’ acceptances continued their The reserve ratio reflected this gain by an advance downward trend. Sales of commercial paper have from 72.6 to 76.0 per cent. Figures from the latest been made in this district at as low as 43/2 per cent, report, and percentages of increase or decrease, as although 4 and 5 per cent are the prevailing rates. compared with a month ago and a year ago, follow : A month ago the lowest rate reported was 5 per cent. Per cent of increase or Bankers’ aceptances are freely offered at 3% and 4 decrease compared with Jan. 18, 1922 Month ago Year ago per cent, as compared with 4 % per cent in the middle Bills discounted ........$ 914,000,000 —20.7% —63.2% of December. In the second week of the month of~ FINANCIAL CONDITIONS Purchased paper....... 95,000,000 Federal Reserve notes in circulation ......... 2,230,000,000 Total deposits ........... 1,785,000,000 Total reserves ......... 3,052,000,000 — — + + 5.0“ 6.9 “ 2.4“ 1.7“ —43.5“ —28.4 “ — 2.1“ +32.6“ In order to get an adequate idea of the changes that have occurred in the various Federal Reserve districts, one cannot do better than compare the adjusted reserve ratio of the Reserve banks. This adjusted ratio is computed by eliminating rediscount ing transactions between the banks, and is therefore more indicative of actual financial conditions in the districts than is the ratio which is usually published. The comparison given below shows that the im provement since a year ago has been quite general. Since last month noteworthy gains were made by the New York, Atlanta, St. Louis, Minneapolis, Kansas City and Dallas banks. Jan. 18, 1922 Boston........................ 77.7% New York ................. 87 6 “ Philadelphia ............... 75:6“ Cleveland ................... 74.6 “ Richmond .................45.9 “ Atlanta ............................ 48.7“ Chicago .......................... 72.8“ St. Louis ....................... 73.3“ Minneapolis ................... 642“ Kansas C ity............... 59.2 “ D allas..... ........................ 47.3“ San Francisco ........... 81.6“ System ......................... 76.0“ Dec. 14, 1921 80.3% 79 8 “ 7^5 “ 71 9 “ 46 j « 41.0“ 76.7“ 68.0“ 56.4“ 48.1 “ 40.6“ 79.3“ 72.6“ am ort or Ku a k 16 ----X T o t a l L o a n s at d I n v e s t m e n t s 14 T o t a l D e p o s it 12 12 10 10 6 0 6 6 4 4 ^T 2 d tal P)QgR 1W1NG3________ 0 I S o u r c e .- F c q 0C 0 1920 4 Billions or 50LUE 16 VL. 14 Jan. 21, 1921 68.4% 37 3 “ 63 0 “ 76 7 “ 44 5« 30.4“ 47 0 “ 47.5“ 34 6 “ 37.7 “ 19.0“ 57.0“ 48.5“ R e p o rF etdine r ga l M ember B an ks R e s e r v e S y stem R e s . B u l l e t in 1921 1922 C om m ercial P aper ferings of acceptances were made at 3J4 Per cent. Our reports indicate that bankers generally are mak ing loans to customers at a 6 per cent rate. The chart on money rates shows the course of the Federal Reserve bank rate, the Bank of England rate, and the market rate for commercial paper, over the last three years, and of bankers’ acceptances over the past two years. The extent of the decline since early in 1921 is worthy of notice. Commercial paper has dropped from 8 to 4^4 per cent, bankers’ ac ceptances from 6 y 2 to 3% per cent, the Federal Re serve bank rate from 6 to 4 j 4 per cent, and the Bank of England rate from 7 to 5^2 per cent. The security markets, though quiet at the end of die year, became more active during the first weeks of January. A comparison of quotations on stocks and bonds follows: Jan. 18, 1922 Dec. 14, 1921 Jan. 17, 1921 Averages: 10 first grade railroad bonds ........................ $87.14 10 second grade rail road bonds ............... 82.79 10 public utility bonds 82.30 10 industrial bonds ... 92.35 40 bonds ...................... $86.14 4 Liberty Bonds ....... 97.87 20 industrial stocks ... 82.33 20 railroad stocks ___ 76.58 $84.67 81.17 80.32 89.14 $83.82 97.46 81.04 74.08 The greatly improved condition of the Philadel phia banks, as shown by their statements of Decem ber 3 1, led dealers in commercial paper to expect that local institutions would be able to follow the ex ample of New York City banks and become buyers of paper in a volume largely in excess of that of last year. But up to the time of writing, the business transacted with the larger city banks and trust com panies has been unusually small for this period of the year. Country banks in this district continue to buy in fair quantity and are the main support of the market. The amount of paper offered has increased somewhat. This is due to lower rates and to the fact that many borrowers of money preferred to wait until after the first of the year to put out notes, in order not to increase the total of bills payable in their annual statement. Names of the highest rating have sold at as low as 4^2, but 4 24 and 5 per cent are the prices at which the largest business has been done. Quotations vary from 4E2 to 5 /4 per cent. Until the 12th of Janu ary, local dealers who carried their paper with Phila delphia banks were at a disadvantage because, though market rates on paper were lower, rates on loans con tinued at 6 per cent; they were, in fact, losing interest on all paper they carried. But on the above date two of the largest banks in the city reduced their rate on loans to 5' per cent and thus relieved the situation. $7920 75.59 71.01 86.20 $78.00 88.34 76.76 76.45 Pates tor Money to r 6 B a n k e r s ’ A cceptances (j OM M ERCIAI . P a p e r ! 9 0 n>ieOD/ v s v r * h / ■ v i _________ B A M K o rE H G t AND : a r i r ~ ~ i 1 n/ / 11 1 , \ \ 7 ---------------- ° ; ‘] 1 : 1.................... « 1 u Although easier monetary conditions and low rates for call money have resulted in a ready market for acceptances, dealers have not been able to get a sufficient amount of these bills to accommodate the demand, and sales during the month of December, according to the reports of four dealers, fell off 31 per cent in the Third Federal Reserve District from the November figure. A decline is also to be found in the countrywide sales, as reported by three deal ers, but this was less than 4 per cent. These sales throughout the country, however, were 39 per cent below those of December, 1920. The monthly reports from 12 accepting banks in this district indicate an increase in the amount of new acceptances created during the month ending January 10, but the amount outstanding on that date was lower than on December 10. Comparative figures follow: «i• t 1 l l '^ T *• '1 :1 Vt ' \ r 48o «o ll >£>00000000008" rm E A L to a v B a n k R a t e r P W lA . — 8 0 Da y s — S? 1919 — 1 F ilB L C B A N K \ ACC E P T A N C E S , , n r a tz. 0 lu 1920 1921 1 1922 Source - F ederal R e a rg u e B ullcti ^ 5 Executed during preceding month Outstanding on date given 1922—January 10................. $4,445,000 1921—December 10 .................. 3,564,000 November 10 .................. 6,325,000 $10,784,000 11,231,000 11,824,000 I he bulk of the new bills result from the financing of the export of cotton and grain, the import of sugar and coffee, the domestic shipment of cotton, the warehousing of cotton and tobacco, and the creation of dollar exchange bills. In this connection it is in teresting to note that the Federal Reserve Bank of Philadelphia purchased in all $24,875,000 worth of acceptances during November and December, and that this amount was distributed as follows: Dollar exchange, 6.9 per cent; warehousing, 6.7 per cent; domestic shipments, 15.6 per cent; imports, 34.5 per cent; exports, 36.3 per cent. Sugar importations amounted to 16.3 per cent of the total. There was a further decline in rates, from 4% Per cent, prevailing a month ago, to 3 and 3 ^ per cent, in the third week of January. A year ago the ruling rates on 60 to 90 day acceptances were from 5 % to 5 per cent. S aving s D eposits For the first time since the month of March, sav ings deposits, as reported by 24 savings banks in this district, have increased. And the gain was no less than $9,489,000. It appears, however, that the bet ter showing is due not so much to current savings during December, as to the crediting of interest and the deposit in savings deposit accounts of unexpended Christmas savings funds that had been removed from other banks. In Outside Philadelphia Philadelphia Totals 1922—January 1.......... $256,228,988 $53,009,979 1921—December 1 .... 247,457,000 52,293,000 November 1 .... 248,286,000 52,282,000 October 1............. 249,117,000 52,435,000 September 1 .... 250,088,000 52,670,000 1921—January 1............. 252,607,325 51,377,325 FO R E IG N EX C H A N G E The European exchanges, especially sterling, have continued to display remarkable strength during the past month. Although no marked advances were made, most of the rates have adhered closely to the levels attained on January 1. French exchange, how ever, fell off abruptly following the resignation of the Briand cabinet; but it has strengthened some what since that time. Sterling has been quoted at approximately $4.20 during the month. Even the mark has maintained a position above .5 of a cent for Foreign Exchange : Pa te s Pepcott in '- P Percent ap o f Pa r Sweden '" A tocon 100 — / 90 / / 80 E ngland 70 60 vV . 7A \ V f \ -------------'x- ri —\ r --------------------------------- ^ 1920 •' France A s..,__ v -* v / 50 40 j 30 20 'I taly 1921 10 1922 $309,238,967 299,750,000 300,568,000 301,552,000 302,758,000 303,984,650 0 6 RETAIL TRADE the past thirty days— a very material recovery from the low levels of last fall. The neutral currencies have uniformly been steady and strong, the Swiss franc rising above par for the first time since the war. The accompanying table shows the net changes in the principal exchange rates since last month. The two accompanying charts indicate the fluctua tions in dollar exchange rates and in wholesale com modity prices of England, France, Sweden and Italy during the past two years. It is apparent that, in general, there is some relationship between com modity prices and dollar exchange rates. For ex ample, wholesale prices in Italy have continually been higher than those of any of the other countries shown, and Italian exchange has been lower than that ° f the other countries. Although this relationship holds true for France and Italy, there is a slight discrepancy in the case of England and Sweden; for, while commodity prices in Sweden have been con sistently higher than in England, exchange rates on the former country have been higher rather than lower than exchange rates on England. Hence, although the general tendency of exchange rates is to adjust themselves inversely according to com modity prices, it is evident that trade or other factors may at least temporarily alter this relationship. FOREIGN EXCHANGE RATES Jan. 19 Dec. 19 Net change COMPARISON OF NET SALES July 1 to December 31, 1921, December, 1921, with Julywith1 to December, 1920 December 31, 1920 Firms in Philadelphia (13)........ +3.0% Firms outside Philadelphia (34) —3.6“ All reporting firms (47)............. + 1 2 “ COMPARISON OF STOCKS December 31, 1921, December 31, 1921, with with December 31, 1920 November 30, 1921 Firms in Philadelphia... —10.4% Firms outside Philadelphia... — 1 2 “ All reporting firms......... — 8.2" Firms in Philadelphia................... Firms outside Philadelphia......... All reporting firms......................... Firms in Philadelphia ................. Firms outside Philadelphia......... All reporting firms......................... —12.0% —19.7 “ —13.9“ Percentage of average stocks July 1 to December 31, 1921, to average sales July 1 to December 31, 1921 321.7% 426.6 “ 347.9“ Percentage of orders outstanding December 31, 1921, to total purchases in 1920 6.8% 2.9 “ 5.9" Prices as a whole show a larger degree of stabi lization than has been the case for some time. The number of articles declining and the amounts of the decline are both smaller, and there is an increase in the number of lines that are either unchanged, or have advanced, in price. Wages in the retail stores have decreased very little, but a smaller force is, in many instances, handling a larger amount of merchandise. The ability of the stores to obtain goods at short notice from the manufacturer or jobber has resulted, in a number of cases, in an increased rate of turnover. Collections are good, there being fewer overdue accounts than usual. Percentage of change London ...................... $4.2247 $4.1998 $+.0249 + .6% P aris................................... 0820 .0802 +.0018 + 22 “ A n tw erp ............................. 0783 .0772 +.0011 + 1.4“ .2093 —.0086 — 4.1 “ Copenhagen ...................... 2007 Stockholm ................. .2497 2493 +.0004 + .2 “ Madrid ..............................1497 .1485 +.0012 + .8“ .3656 +-0012 + .3“ A m sterdam .......................3668 Buenos Aires................... 7614 .7558 +.0056 + .7 “ Shanghai .......................... 7429 .7636 —.0207 — 2.7 “ Berne ................................ 1945 .1948 —.0003 — .2“ Milan ................................0438 .0452 —.0014 — 3.1 “ B erlin ................................005172 .005361 —.000189 — 3.5 “ Vienna ..............................000313 .000402 —.000089 —22.1 “ IRON AND STEEL Although sentiment in the iron and steel industry has improved considerably with the advent of the new year, tangible betterment in the nature of in creased orders is only slight, and is by no means general. Indeed, a few firms report that even a smaller volume of orders was received in January than in December, which was notoriously a poor month in the industry. Buyers are still hesitant in placing orders at existing prices, the principal deter rent apparently being the possibility of a reduction in freight rates. It is realized that as the toll is levied on both the finished product and the raw materials for manufacture, costs of transportation enter largely into the price of iron and steel products, and therefore that a reduction in rates would make a RETAIL TRADE Sales in the retail stores during January are smaller than they were in the corresponding period of 1921. The seasonal increase in unemployment, following a period during which conditions of employment have been poor, has been felt by everybody engaged in retail trade, but more especially by the stores deal ing in merchandise of low price. There is also to be considered the fact that during the holiday trade, the percentage of useful articles purchased for gifts was abnormally large, and that these purchases filled many needs that would ordinarily have had to be supplied later in the season. —6.4% —7.5“ —6.7“ 7 considerable difference in prices. The present un certainty as to future freight charges is really more harmful to the trade than would be the knowledge that rates would not be lowered. However, purchasing has not ceased entirely. The automobile industry, in anticipation of increasing operations, is buying somewhat more freely, espe cially sheets. Ih e railroads have also placed large contracts. This renewed interest on the part of the carriers is especially gratifying, as it is realized that until they re-enter the market, no general revival in the industry is possible. Buying of plates and pipe by oil interests, however, has decreased, and building industries are purchasing less structural material. This, however, is a reflection of the season rather than of actually decreasing needs. A few dealers in machinery and machine tools report an improved demand; but this is by no means general in this in dustry, and in practically every case buyers are in sisting upon immediate delivery. In spite of the uncertain nature of the market, prices have remained quite firm since the first of the year. Decline in values during the past year, how ever, has been most severe, and the general average of steel and iron prices now is not more than one- quarter above the pre-war level. The accompanying chart shows the fluctuation in the price of pig iron and of finished steel during the period from 19 14 to 19 21. The Iron Age composite price of pig iron was $18.60 per gross ton on January 10, as com pared with a ten-year pre-war average of $ 15 .7 2 ; and that of finished steel was 2.062 cents per pound on the same date, as against a pre-war average of 1.684 cents. Indeed, some products have been sold at prices equal to or even less than pre-war levels. One large manufacturer of plates in this district re ports that he is selling them now at the rate of 1.50 cents, Pittsburgh base, as compared with a ten-year pre-war average of 1.507 cents. Obviously this quo tation represents a very great reduction in profits, or even a loss, as the raw materials used are, in general, much higher in price. Furthermore, this producer is paying labor 25 cents per hour, nearly twice his pre-war average of 13 cents per hour. An indication of the reductions that have occurred in iron and steel products during the past year is given in the following table showing prices, as quoted by the Iron Age, on January 10, 1922, and on Janu ary 1 1 , 19 21, together with the percentage of decline in each case. Per cent Jan. 10, 1922 Jan. 11, 1921 decline No. 2 X pig iron, Philadelphia, per gross ton............. No. 2 X pig iron, Valley furnace, per gross ton............. Basic pig iron, Valley furnace, per gross ton............. Open hearth billets, Philadelphia, per gross ton............. Bessemer billets, Pittsburgh, per gross ton......................... Wire rods, Pittsburgh, per gross ton ............................. Tin plate, 100 lb. box Pittsburgh .................................... Car wheels, Philadelphia, per gross to n ............................. Heavy steel scrap, Philadelphia, per gross ton............. No. 1 cast, Philadelphia, per gross ton ............................. Iron bars, Philadelphia, per lb............................................. Steel bars, New York, per lb. Tank plates, New York, per lb............................................. Beams, New York, per lb.... Sheets, black, No. 28, Pittsburgh, per lb........................ Plain wire, Pittsburgh, per lb. 8 $21.34 $3325 —35.8 19.50 33.00 —40.9 18.25 30.00 —39.2 33.74 49.24 —31.5 28.00 43.50 —35.6 36.00 —36.8 57.00 475 7.00 —32.1 16.50 25.00 —34.0 11.50 14.50 —20.7 16.50 22.50 —26.7 1.85 cents 2.70 cents —31.5 1.88 ‘‘ 2.73 “ —31.1 3.03 “ —39.6 1.83 ‘ 2.83 “ —33.6 1.88 ‘ 4.35 “ —31.0 3.00 ‘‘ 3.25 “ —30.8 2.25 ‘ It is evident from this table that as compared with the general level of prices, iron and steel products are low rather than high. Very considerable losses were registered on raw material when inventory was taken, but the industry is now ready to start the new year on a much sounder basis, with lower wages, light stocks, more efficient operations, and lower prices on raw materials. Great unevenness in operating conditions is shown by reports from firms in this district. Though most plants have expanded their operations somewhat dur ing January, there are still a number that are en tirely closed down; a few others are operating at 75 or 80 per cent of capacity. The general average rate is about 40 per cent of capacity, a figure some what less than that for the industry as a whole. Em ployment conditions are virtually unchanged, al though working time has been increased with increasing operations. A few further wage reductions were niade on January 1, and unskilled labor is now gen erally receiving from 20 to 25 cents per hour. Fre quently plants are operating only to fill accumulated orders, and, in general, production is being closely adjusted to consumption. Stocks of both raw mate rials and finished products are cpiite low. In spite of the inactivity in iron and steel markets during December, pig iron production registered a substantial increase. The total output for Decem ber, 1,649,086 gross tons, was 16.5 per cent higher than that for the preceding month and nearly double that of July, 1921. Five furnaces were blown in during the month, making a total in blast, on Janu ary 1, of 125-. That this production in December was in excess of steel making requirements is indi cated by the output of steel ingots, which showed a substantial decrease. The monthly total was only l >427,093 tons, as compared with 1,660,001 tons in the preceding month. The unfilled orders lor the United States Steel Corporation on Decem ber 31 were larger than those on November 30 by only a relatively small amount. A total of 4,268,414 tons was carried on the books of the corpora tion on the former date, as compared with 4,250,542 tons on November 30, and with 8,148,122 tons on December 3 1, 1920. The accompanying table shows the record, during the past year, of pig iron production, steel ingot pro duction, and unfilled orders of the United States Steel Corporation. Unfilled Steel ingot Pig iron 1921 orders production production December 4,268,414 1,427,093 1,649.086 November 4 ,250,542 1,660,001 1,415,481 October . 4286,829 1,616,810 1246.676 September 4,560,670 1,174,740 985,529 August .. 4,531,926 1,138,071 954,193 July ........ 4,830,324 803,376 864,555 J u n e ........ 5,117,868 1,003,406 1,064,833 May ........ 5,482,487 1,265,850 1221221 April ___ 5,845,224 1,213,958 1,193,041 March ... 6284,765 1,570,978 1,595,522 February 6 ,933,867 1,749,477 1,937,257 January . 7,573,164 2203,186 2,416292 AUTOM OBILES It is quite usual at this time of the year for the automotive industries to experience a falling off in activity. This year, both production and sales have been steadily diminishing in volume since early fall. It is important to note, however, that in the case both of certain high-priced cars and of the popular, inexpensive cars, the present volume of sales is far in excess of what it was at this time last year. In deed, although the total of automobile sales during the past year was from 30 to 40 per cent less than that of the previous year, a few standard makes of proven quality were sold in larger numbers in 1921 than in 1920. This is interesting as pointing to the fact that price is not the sole consideration with the public, and that the demand is more and more coming to be for cars of established reputation. In the endeavor to stimulate demand for spring delivery, further price reductions on many cars and trucks have been announced during the past month. Price revisions in the last year have probably aver aged from 15 to 25 per cent, although one car has been reduced over 40 per cent from its highest point. Furthermore, in addition to these formal price re ductions, many dealers have made generous allow- ances on used cars accepted in part payment for new tracts have been placed, and permits issued, the work cars. A veritable glut exists in the used car market, on which will not begin until spring. Even with and values have dropped heavily. Hence, dealers the advent of spring, however, many of the pro have been forced to dispose of old cars accepted in posed projects may be abandoned if labor and ma exchange, at figures which materially reduced their terial costs become unreasonably high. profits. Plentiful supplies of materials are now available, Operations at present are at a very low ebb, but and prices on most of these seem to be fairly stable. tnost firms are planning a gradual increase in out Laborers in the building trades seem willing to ac put to meet the anticipated spring demand. Condi cept the wages which were paid during the fall and tions are still uncertain, however, and the industry there is every probability of an active program in the is by no means unanimously optimistic. The largest approaching season. producer is operating at about 50 per cent of ca Cem ent pacity, and the general average is somewhat below this figure. Stocks of both raw material and finished As is to be expected at this time of the year, there cars have been reduced to a minimum, and produc is very little demand for cement. Sales have fallen tion schedules are adhering very closely to actual off since December, but even the present small orders. With the inventory losses written off, how volume of shipments is thought to be normal for ever, the industry is in a much healthier condition January. Until about March 1 sales will depend than it was a year ago. solely upon weather conditions. The orders now The accompanying chart shows the automobile being received are almost entirely for immediate de registrations in the United States from 19 14 to 1921. livery, and although manufacturers consider pros Although complete figures for the past year are not pects to be bright, few orders are being placed for available, the total of registrations for the first ten future shipment; in fact, only one firm reports that months shows that the year’s total will represent a the number of future orders is up to normal. Dealers substantial increase over that of 1920. Indeed, the are refraining from ordering in the hope that prices rate of increase was approximately the same as that of the past several years— an indication that the saturation point” wras not, at any rate, reached dur ing 1921. BUILDING M ATERIALS The value of building permits issued in fourteen cities of the Third Federal Reserve District during December was less than half the value of those is sued in November—a decrease, however, that is not unusual for this time of the year. Great as this decline was, the total value of December permits, $ 4 >5 6 4 >9 ° 7 . was tnore than twice that of December, 1920, which was $2 ,15 1,8 17 . Furthermore, the trend of construction during the greater part of 1921, as represented by permits issued in the princi pal cities of the district, was definitely upward, and this is in marked contrast with that of 1920, when the winter brought a severe depression in building activity. The contrast is illustrated in the accom panying chart, showing tendencies during the past three years. An encouraging feature of the recent developments is that an increasing portion of contemplated build ing is for commercial and industrial structures rather than for houses, garages, and the like. Many con 10 will come down— if not through lowered costs of hardwoods are still rather scarce and are sold as manufacture, at least through reductions in freight quickly as they can be supplied. Wherever weather rates. permits, mills are operating at varying percentages Operations vary according to the storage capacity of capacity. Total production for the country has of the various firms. A few who have large stock- naturally decreased. houses are running on full time, others are operating Prices in general are firmer than they have been at 7 5 ’ 5 °> or 2 5 Per cent of capacity, and many, who tor several weeks, and some manufacturers have have filled all available storage place, are closed en- raised quotations on certain grades. Dealers report, 5:1rely. Except with the last group, stocks are ac however, that a wide range of quotations is still re cumulating, as is customary at this season of the ceived in reply to inquiries. The better grades of year. This enables manufacturers to meet promptly hardwood are stronger than any other lines, and in the large and sudden volume of orders which nor some cases have recently advanced in price. mally comes at the beginning of spring activity. Collections are generally reported to be slower than Prices were reduced in December about 15 cents they were three months ago. a barrel. This makes a normal base price at the mill $1.60 per barrel, not allowing for cash discounts, P aint and not including freight charges or charges for Paint sales are now lighter than at any time in the hags. This is to be compared with the pre-war price of about $1.0 5 and the 1920 maximum of $2.50. past year. But manufacturers are not discouraged, ft is stated by manufacturers that the present quo as they never expect an active demand in January. tations are so near to costs that only lower freight In fact, they report that, allowing for seasonal fac rates will permit of further reductions. The cost of tors, spot business may now be considered normal. raw materials is less than it was a year ago. Coal, Salesmen are on the road again, and orders for im the chief of these, in the grades used by cement manu mediate delivery are more numerous than they were facturers, is about 60 per cent of last year’s price. in the latter part of December. A few contracts for Wages, as reported in previous months, were reduced future shipment are being received, but they are not coming in as rapidly as could reasonably be desired. two or three times during 1921. Operations have been reduced somewhat, and now Collections have not changed materially within the past three months and are reported to be from average about 60 per cent of capacity. Even at that fair to good. In some cases a slight slowing up was rate, stocks are accumulating. But as the demand for paint is largely seasonal, and ordinary production noted early in the month. would be sufficient to fill orders received during the L umber busy spring season, this is necessary. Furthermore, Current sales of lumber are small, but a large the continuing of operations at practically the same number of inquiries are coming in, and the trade is rate throughout the year furnishes regular work to ^ept busy estimating on future business. Few def- employees. Supplies held by dealers are small. Although prices of raw materials are firm, or, in nfite orders for delivery in the future, however, are some cases, advancing, and although wages have bring placed; and most of the actual business done not been reduced, the trade is expecting a further re ]s in filling immediate needs. The season, of course, duction in the price of paints. This is one of the ls responsible for this slack demand, but even so, reasons why dealers are keeping stocks low and are the present volume of sales is considered to be satis not placing future contracts. The manufacturers of factory for January. Furthermore, the number of inquiries received gives promise of a good spring white lead have extended the guarantee on their business, although, of course, the outlook may present prices from February 28 to June 30, and change as a result of bad weather, or labor trouble in this has brought forth a fairly good volume of or building circles, or an advance in prices great enough ders. Linseed oil has been firm for several weeks, to destroy the demand. and some crushers have recently advanced their price Stocks in general are being accumulated in prep- from 69 cents to 73 cents a gallon. This compares aration for this anticipated spring business, but the with 75 cents last January and with a war-time burden of carrying these is resting largely upon the maximum of $2.15. The price of turpentine has manufacturers, for dealers, with some exceptions, been rising since early in the fall. are not as yet buying extensively. High-grade Collections are somewhat slow. 11 P ottery Demand for sanitary pottery is described by many manufacturers as being- abnormally good for Jan uary. Orders have increased since December, and in some cases sales are 50 per cent greater than were those of last January. This improvement is attrib uted by the trade to an increase in prices, manu facturers having recently announced advances of from 7 to 10 per cent. These advances, it is held, brought forth a volume of orders from jobbers, who, anticipating lower instead of higher prices, had been operating with small stocks. General reductions were made in September, based, according to the manufacturers, on the hope of being able to reduce wages. But as no agreement could be arrived at with the unions, wages are unchanged. For this reason prices have been returned to the September schedule. The present agreement with the em ployees does not expire until October 1. \\ ith a few exceptions, plants are operating at ca pacity, which is unusual for this time of the year. Most of the orders are for immediate delivery, but many future contracts are being placed, and most firms report sufficient unfilled orders on hand to keep them running for three or four months. In spite of this increased output, stocks held by manu facturers are decreasing, although they are even now considered to be low. Manufacturers of porcelain for electrical supplies report an entirely different situation. Demand is poor, or at best only spotty, and orders, although frequent, are small in size. Plants are running at only 20 per cent of capacity, whereas normally at this time of the year operations should range from 80 to 90 per cent. Unfilled orders on hand are practically negligible. In this branch of the industry goods are made on order, so no stocks are carried. Collections throughout the industry are fairly good, although a few firms report that they are still poor. W holesale H ardw are In spite of the fact that December and January usually prove to be dull months in the hardware trade, local dealers report that business is somewhat better than it was in the fall. The accompanying table shows that the net sales of all reporting firms were slightly greater in December than in November, but were smaller than in December, 1920. Despite this increase in the volume of sales, the accounts out standing showed a considerable decrease as compared with November. W h o le s a le : Har d w ar e T v/ e h t y T wo F ippms imtoA or/w Dolla rs 3200 2600 2400 / / ' '/ A 1600 A\ *» *V / »* , ,x /\ / A ccoumts ' / 1 / OUTSTAMDinG \ 2600 V v/ /" \ A 2000 A Vy 1200 V ineumc or Dcllak •^lY) /M et Sales V . t \ W " \\ A ______ 2400 2000 1600 1200 600 600 400 400 0 Sep 1919 an Jan 1920 o 1921 Source- F ederal t?E3ccvc Bahk o r phiia At the present time hardware firms report a strengthening demand, although most orders are for immediate delivery. Prices have been falling steadily, on finished goods as well as on raw stock. Hence, buyers are cautious in placing future orders. Busi ness, however, is very uneven. Dealers in builders’ hardware report an especially brisk demand, but firms in the coal districts find that purchasing is gradually decreasing, which is evidently due to the expectation of lessened mining operations in the near future and to the possibility of a coal miners’ strike. WHOLESALE HARDWARE TRADE Number of reporting firms—23 December, 1921, December, 1921, compared with compared with November, 1921 December, 1920 Net sales during December........... -}- .4% —20.0% Accounts outstanding December 31 —-8.0 “ —19.3 “ Ratio of accounts outstanding to sales: December, 1921................................................162.8% November, “ ................................................. 1802“ October, “ ................................................. 164.7 “ September, “ ................................................. 179.8“ August, “ ................................................. 181.0“ July, “ ................................................189.4“ COAL A n t h r a c it e The cold weather of the past month has caused a considerable increase in the sales to consumers of 12 domestic sizes of anthracite. Stove and nut especially have been in fair demand, but deliveries have gener ally been of only small lots. Indeed, the volume of purchasing, although well above that of the same month of last year, has been quite disappointing to dealers, as consumers’ reserves are known to be much smaller than they were last year. Steam sizes are still moving sluggishly, and the cold weather has had but little effect upon demand for these grades. Handto-mouth purchasing is expected for the remainder of the winter, and the extent of even this will depend entirely upon the weather. Retail prices were re duced 25 cents per ton following the removal of the transportation tax on January 1, and domestic sizes are now selling at $14.25 for broken and egg, $14.50 for stove, and $ 11.2 5 f ° r Pea- In fact, even lower Prices are being quoted by some retailers in the at tempt to stimulate purchasing, extra delivery charges being waived in numerous instances. The difficulty which retail dealers have encoun tered in endeavoring to reduce their heavy stocks has led them to curtail materially their purchases from operators. Independent operators, who do not pos sess adequate storage facilities, have made liberal Price concessions in the attempt to move their out put. Quotations of the independents on most do mestic sizes have been reduced to the company level. Tut even this has failed to stimulate purchasing, and outpuf has been materially reduced, many independ ent mines being closed down. The companies also have curtailed production, so that the industry is now °perating at not more than 60 per cent of capacity. Production for the week ending January 14, as re ported by the Geological Survey, was only 1,643,000 Ions, as compared with an average weekly production of from 1,800,000 to 1,900,000 tons during the early fall. Further evidence of curtailment is seen in the re port of the Anthracite Bureau of Information, showmg anthracite shipments for December to have been only 4,635,922 tons, as against 5,314,014 tons for November, and 6,436,320 tons for December, 1920. Both dealers and operators are desirous of reduclng their stocks to a minimum by the end of the present coal year, as the trade generally expects that freight rates and wages will be reduced and prices lowered. As regards wages, the anthracite miners have already demanded a substantial increase, which the operators say they will refuse to concede. Just how far the miners will go in the endeavor to en force their demands is a question, but a strike is a possibility. Most operators and dealers, however, are confident that a wage reduction will eventually be 13 accepted, and that this will result in the lowering of prices to the consumer. B it u m in o u s Although the widespread stagnation which existed in the bituminous industry during December has been followed by a noticeable revival of interest during the past month, the present situation is far from en couraging. Indeed, much of the renewed interest has been evidenced only by inquiries rather than by actual purchases. Railroads and public utilities have done some buying, but industrial firms are showing little interest in the market. The removal of the transportation tax on January 1 reduced prices about 10 cents per ton, but the failure of the rail roads to lower freight rates and the anticipation of such a reduction have acted as deterrents to purchas ing during the past month. Furthermore, whenever possible, consumers are delaying their buying until the next coal year in the expectation that lower wages will reduce prices still more. As yet, however, only minor price changes have occurred— the Coal Age Index of spot prices be ing 83 on January 9, as compared with 84 on January 2. Non-union mines are offering their product at quotations so low that union operators are compelled to choose between closing their mines or selling at a loss. Hence, while non-union opera tors have in numerous cases extended their produc tion somewhat, in union fields additional mines have been closed down and unemployment has increased. Exports have declined, and British competition is becoming serious, not only in the foreign market but in the domestic market as well. Shipments of British and Welsh coal are still being offered at domestic ports at prices which domestic producers are unable to meet. Production reports of the Geological Survey show clearly the deplorable situation which has existed in the industry during the past year. Output during January has improved somewhat as compared with that of December, but it is still far from normal. Total production in the week ending January 14 amounted to 8,268,000 tons, as compared with an average weekly production during December of ap proximately 7,000,000 tons. Total production for the year 1921 was only 407,000,000 tons, the lowest annual total recorded since 1 9 11 . The Geological Survey characterizes the past year as having been one in which the industry suffered the “ most severe prostration since 1893.” Collections are reported as being only fair, al though the railroads are paying more promptly than hitherto. C oke Beehive coke production is still being maintained at a weekly rate well in excess of 100,000 tons, a figure which compares favorably with last summer’s output, but which is much below normal. By-prod uct production is at a higher rate, however, being close to 40 per cent of capacity. The past year was a disastrous one for the beehive industry, production totalling only 5,561,000 tons, as reported by the Geo logical Survey. This is the lowest production re corded since 1885, when 5,107,000 tons were manu factured, and is only 15.0 per cent of the record out put of 37,126,026 tons reached in 1916. Although a portion of this loss has been due to the encroach ment of by-product coke in beehive markets, the total output of both varieties was not more than 26,000,000 tons, which is about the same as the production recorded in 1908. During January a number of contracts have been placed for the coming quarter, and spot sales have been made in small volume. Prices, however, are weak, and spot coke is being sold at $2.75 for furnace and $3.75 for foundry. Competition on new con tracts is being offered by by-product plants, which are enabled to underbid beehive producers because the gain on the sale of by-products offsets the loss on the coke. Coke producers are anxiously watching developments in the iron and steel industry, as the beehive industry is almost entirely dependent upon iron and steel manufacturers for a market for its product. is resumed. At present the market is comparatively quiet, and orders are not coming in as well as was expected; nor are they for large quantities. Grey goods are moving but slowly, and sheetings are dull. Blankets are selling very well and in fairly large quantities. There is also an active demand for denims. Collections are fair and show a slight improvement since last month. C otton Y a r n s The demand for cotton yarns remains dull, and very little trading is reported. Manufacturers are not disposed to accept orders for future delivery at current prices. Buyers are reluctant to purchase for the future and are covering only immediate needs. It appears that neither buyer nor seller is ready to operate to any extent. Orders are for small lots only, and the business being done is far below ex pectations. Collections are fair. SILK During the past month, there was no improvement in the silk goods market. For a number of months, S UPCiffT Cci m m o d i t y P r ic e s Index MUMBERS \ 400 COTTON Activity in the cotton goods market during the first weeks of January has fallen off appreciably in comparison with conditions towards the close of x9 2 1 - At the present time, it is very sensitive to any changes in the raw cotton market, and any de gree of stabilization there will materially aid the cotton goods market. Generally speaking, prices re main firm, although there are a few exceptions; several decreases are noted, and some slight in creases. The demand for cotton goods is very irregular. The fact that almost all stocks of cotton goods are considerably depleted, even more so than those in other textile industries, should eventually lead to an improvement, and some opinions are to the effect that it will only be a matter of time before buying il k AMD A ll 300 200 100 0 i l t 1l» 11 Panv 5 ll k J 1 Jartic 15m:5M 1Uj 1| 1 1 1 1 M 1 11 J e RAD5 TREE!slim xNa CPWhol SALE Price 7 l\ j/ \\ 1 / A \ »/ i ’M'/ * / ft ii 4 V v 1 Y*W '- v RE Aver; 3EPR :cs-1 >0% 1913 1914- 1915 1916 1917 1918 1919 1920 1921 1922 SOUBCE- BgAD3TKEETS a 5. A or A. 14 400 300 200 100 0 retail sales of broad silks ,and ribbons have been rather poor, and retailers are therefore purchasing only as it is necessary to fill in their lines. In almost every instance, the orders are for small lots for im mediate delivery. Jobbers, influenced by the situa tion in the retail trade, have likewise been buying very conservatively. The spring season with the mills has just com menced, and it is rather difficult to form a judgment on the outlook at this time. But orders thus far received are small, and no manufacturers report any business booked for future delivery. The manu facturer’s chief source of trouble all along has been rising raw silk prices, and the recent slight reaction in the raw silk market has not helped much ln making his way easier. Both manufacturers and jobbers are aware that purchasers will object vigor ously to any increase in silk fabrics, and, therefore, are making advances only in cases of absolute ne cessity. The situation at present is rather unsettled. On one hand, consumers are not particularly interested m silk, even at old prices; and on the other, manu facturers are unable to supply goods except at a con siderable advance over prices prevailing late last fall. preponderance of Japanese silk is clearly illustrated. In the year 1920-21, Japan produced approximately 55 per cent of the world’s supply, and during the past few years, about 85 per cent of the raw silk used by the United States has come from that country. Incidentally, the United States is the world’s greatest consumer of silk, and since the war our imports have exceeded those of all European countries combined. In 1919, which was the banner year, the United States imported 44,817,000 pounds of raw silk, val ued at $329,339,000, and almost all of this vast supply was consumed in this country. Our exports of finished products during that year amounted to only $23,903,000. Collections are fair, and in some instances are re ported to have improved. R aw S il k True to the expectations of many engaged in the sfik industry, the raw silk market has experienced a slight reaction, and almost all prices are some what lower. But the decline has been relatively so shght that quotations as a whole have remained feirly firm at a high level. A s a result, the demand for raw silk from all sources has declined, and all buying is for immediate needs only. Manufacturers ° f silk products are indisposed to purchase raw ma terial at present levels, realizing the difficulty of selling their goods at higher prices. At the present time, a very interesting situation exists in the raw silk market. Present prices are almost double the pre-war normal, and some of the leading silk men in the country believe that prices have risen entirely too rapidly and are too high. Others, however, are of the opinion that, considering fhe available supply of silk, the rise was entirely Justified. There is much conjecture as to the future trend of prices, and confidence in their stability is lacking. It is interesting to note from the following chart the relative position of Japan in the silk market. The WOOL W oolen a n d W orsted G oods The experience of manufacturers differs widely as regards the demand for woolen and worsted goods. A majority of firms in this district report little or no demand at this time, but one firm reports that though the demand has not increased, it is normal for this period of the year. Its mills are operating at ca pacity and have sufficient unfilled orders to maintain capacity production for six weeks. On the other hand, some mills have ceased operating entirely, and others are running at a much reduced rate. The average rate of production in the district is approxi mately 55 per cent. Stocks are not accumulating to any great extent. In fact, some firms have no stock on hand and are manufacturing all orders as they come in. For the most part, buyers were not disposed to make any thing but necessary purchases during the month, and were awaiting the opening of the American Woolen Company, on January 23. Prices, styles, etc., are usually determined at these openings, and the book ing of orders then follows. Prices of raw material are increasing steadily, and this has caused many manufacturers to make closer inquiries concerning their requirements for the com ing year. Tire rise is attributed to the too drastic decline in 1920 and 19 21, and to the heavy import duty now collected on raw material. These two factors have substantially raised the cost of raw ma terial above the prices paid for that used in goods now being used. Prices of finished good remain firm. Collections are only fair, and have not improved during the past two months. W oolen a n d W orsted Y arns Woolen and worsted yarns of practically all de scriptions, except weaving yarns, have been in much better demand during the past month, especially knitting yarns. In the weaving trade the demand is practically nil, and in view of this the general activity prevailing in the yarn market at present is all the more remarkable. Carpet yarns are very active and many large contracts are reported. As a result of the increased demand, yarn prices have been advanced, and quotations are now from 5 to 15 cents per pound higher than they were at the close of 1921. This increase was generally expected in view of the strong wool market, and some dealers say that a further increase will follow shortly. Yarn mills in this district are operating at an average of about 80 per cent of capacity and have sufficient orders on hand to insure operations at this rate for about three months. Stocks are not accumu lating, and orders are being filled as manufactured. Collections are fairly good, but very little improve ment has been noted. R aw W ool The condition of the raw wool market is very satisfactory. During the first week of the new year, manufacturers were indisposed to buy, preferring to await developments at the Government auction, which was held in Boston on January 5. At this auction, prices of raw wool advanced from 15 to 20 per cent over the prices at the December auction. This, together with the refusal of dealers to make price concessions in order to effect sales, indicates the strength of the market. Prices of raw wool are now the highest recorded for the 1921 clip. This condition is attributed to the increasing scarcity of wools and to the Emergency Tariff, which makes it costly to import wools. Another factor causing higher prices is the speculation and trading among dealers. Manufacturers have not been buying to any extent during the past two weeks; most of them antici pated present conditions and bought steadily during the fall. What trading there is at present is chiefly among dealers, and with these, stocks are small and are moving very rapidly. Some dealers are of the opinion that if we continue to consume wool at the present rate, which is ap proximately 60,000,000 pounds per month, an actual shortage will exist in early spring. Even at this time there is a distinct scarcity of many desirable kinds of wool. On January 1, 1922, there were approxi mately 350,000,000 pounds of wool on hand, and adding to this figure the estimates of the new clip and of the wool held at country points, we have an estimated total of only 620,000,000 pounds for the year’s supply. Collections are only fair, no improvement being noted in the past two months. H O SIERY New orders for hosiery of silk and of heather mixtures have decreased considerably; not that the demand has been less, but that the increase in the cost of yarns has made it impossible for manufacturers to accept business at former prices, unless they hap pened to be well supplied with yarns. In view of the present prices of raw materials, the number of con tracts closed has been small. This, however, does not mean that the outlook for the mills is poor, for in full-fashioned silk hosiery many manufacturers have orders on their books that will take from 3 to 6 months to fill. Similar conditions exist in the heather hosiery trade. Manufacturers of seamless silk wear likewise re port a falling off in business, owing not only to the advance in yarns, but to the. steadily increasing pro duction of full-fashioned goods. The majority of their unfilled orders are for prompt shipment, and as they are not well supplied with forward business, the price to be paid for hosiery in the near future is of vital importance to them. Heavy cotton wear suitable for consumption in agricultural sections is in poor demand, but there appears to be a slight im provement in other cotton and mercerized lines. OPERATIONS IN THE HOSIERY INDUSTRY (In terms of dozens of pairs) Number of reporting firms—31 December, 1921, December, 1921, compared with compared with November, 1921 December, 1920 Firms selling to the wholesale trade: Product manufactured during December .................................. finished product on hand De cember 31 ............................... Orders booked during Decem ber .............................................. Cancellations received during Shipments during December... Unfilled orders on hand De cember 31 ............................... Firms selling 4- 5.0% 4-13.3 “ —21.6“ 4-91.3 “ — .2“ — 4.3 “ - f 172.1% + 5.9“ 4- 82.2 “ 4- 88.3% 4-612.8 “ CONDITIONS IN THE UNDERWEAR INDUSTRY (In terms of dozens) Number of reporting firms—14 Summer underwear: Product manufactured during December................................ Finished product on hand De cember 31................................ Orders booked during Decem ber ....................................... Cancellations received during December................................ Shipments during December. .. Unfilled orders on hand De cember 31 .............................. Number of reporting firms—8 Winter underwear: Product manufactured during December................................ Finished product on hand De cember 31 .............................. Orders booked during Decem ber ............................................ Cancellations received during December................................ Shipmerts during December... Unfilled orders on hand De cember 31................................ 4- 16.9% — 2.6“ — 32.7 “ 4-405.9% 4- 95.4“ 4-118.2 “ 4- 82.9“ — 17.8 4-266.7 “ — 47.5% -f- 20.4“ +102.6“ 4- 81.1 “ — 56.7 “ -f 92.2 “ FLOOR COVERINGS to the retail trade: Product manufactured during December .................................. t'inished product on hand De cember 31 ............................... Orders booked during December ............................................ Cancellations received during December .............................. Shipments during December... Unfilled orders on hand De December, 1921, December, 1921, compared with compared with November, 1921 December, 1920 Carpet and rug manufacturers are, for the most part, well supplied with orders. Wiltons and A xminsters continue to be in demand and the output for the season has been sold. Velvets and tapestries, because of better sales, are being produced in larger quantities than heretofore, some mills working at capacity. The dullest branch of the industry is that making fibre rugs. In these, the competition with cember 31 ............................... Japan is severe, so severe that some mills are making alterations in order to produce other lines. Prices of raw materials are in most instances higher, but as Manufacturers of heavy weight underwear are selling figures on finished goods were made for the booking orders both for prompt shipment, to fill de season, no change in price has been possible. pleted stocks, and for delivery for the fall of 1922. Dullness during the Christmas season and the Though the majority of orders are not large, the weeks following, has enabled linoleum manufacturers total is sufficient to keep mills fairly busy; and as to cut down the amount of unfilled orders on hand, Prices are becoming stabilized, it is expected that and some are now in a position to make prompt buying for future delivery will increase considerably delivery on orders coming in. Many inquiries are being received for lots of large size, and it is expected during the next few weeks. In light weight underwear the amount of business that orders will be forthcoming in sufficient quantity done continues to be disappointing. Buyers in many to enable factories to continue running at full ca instances are holding ofif until the last moment, hop- pacity. Prices are unchanged for both finished mg in this way to secure lower prices. The total products and raw materials. Stocks of all floor coverings in the hands of re quantity bought for spring is estimated to be suf ficient to meet only a small percentage of normal tailers are reported to be small. Activity in the manufacture of carpets and rugs requirements; and as recent experience shows that the principal demand in retail trade is for necessary during the past three years can be traced in the fol articles, it is likely that large purchases of spring lowing chart, the increased production during the latter part of 1921 being worthy of particular note. underwear still remain to be made. — 4.0% + 4.3 “ —27.9 “ —51.8“ —10.2“ —37.9 “ — 3.9% ............. ............. ............. ............. ............. UNDERW EAR 17 kid are low, except in large skins measuring seven feet or over, and tanners find little difficulty in sell ing their present output. Export demand for kid has improved somewhat and shipments are going forward much more steadily than heretofore. H ides a n d S k in s The market for packer hides in this country has held firm, but in Buenos Aires the prices are some what lower and stocks are increasing. Goat skins are extremely firm, and the desirable lots offered, from warehouse or afloat for early arrival, have been well bought up. In the markets of origin— especially in Calcutta, where supplies appear to be small— the lots of good quality are eagerly bought, showing that tanners here are confident of the future leather market, and that even at the advance in price there remains a fair margin of profit for the manufacturer. Calf skins and sheep skins remain quiet, and changes in price have been slight. S hoes LEATH ER Heavy leathers are meeting with increased demand and prices are being maintained better than at any time during the past year. Stocks of some kinds of sole leather have been materially reduced, and the call for certain parts of the hide that were previously neglected has improved greatly. Bellies, for instance, have been selling well and have advanced sharply in price. Even the stock of belting butts, which have recently been the most difficult part of the hide to dispose of, decreased 4 per cent during November, according to the figures of the Bureau of Census, Department of Commerce. Upper leathers are also showing increased firmness in price. The continued demand for a shoe of low cost is making a ready market for side leathers, and for the medium and low grades of kid and calf. An improvement in the market for the better grades of shoes is shown in increased inquiries for No. 1 calf and the upper grades of kid. As the season advances, colors are being purchased more freely. Havana brown is at present one of the most popular shades. Patent leathers continue to be used largely in styles for early spring. Stocks of Improvement is noticeable throughout the shoe trade. The psychology of the situation has changed, and almost everyone, from the small town retailer to the large manufacturer, is beginning to feel more optimistic. During the last year there was a steady decline in the wholesale price of shoes. Cheaper ma terials, lower wages, increased efficiency of labor, and many factory economies, have brought wholesale prices down to the point where, although still above pre-war prices, they may be said to be cheap. Busi ness in the factories in this district is better, both in the country and the city. The wholesaler is placing orders for spring more freely, and the retailer, though still cautious, is moving forward and buying moderately. It seems likely that January, with the meeting and style show of the National Shoe Re tailers’ Association, held in Chicago, followed by the manufacturers’ meeting in New York, will prove to be the turning point in this season’s shoe trade. CONDITIONS IN THE BOOT AND SHOE INDUSTRY Number of reporting firms— 4S (In terms of pairs) Production ...................................... Shipments ........................................ Orders booked ................................ Orders on hand............................... Stocks on hand................................ Number of operatives on payroll. December, 1921, December, 1921, compared with compared with November, 1921 December, 1920 — 1.9% — 1.1 “ —52.4 “ — 9.3 “ + 1.1 “ 0.0“ + 35.9% + 522 “ + 12.0“ -(-292.2 “ + 46.1 “ 4- 31.5“ PAPIER Ih e local paper trade has been practically static ■ for the past four weeks. October was the best month of 1921, but sales fell off during November, and again in December. Stock-taking by printers and other users of paper at the end of the year caused some slackening of demand, and since then recovery has been prevented by the general business inactivity that has prevailed during January. However, the trade is not, as a rule, pessimistic, as it considers present conditions to be for the most part seasonal and is confidently expecting better demand in the spring. Furthermore, the comparison between this January and last is more favorable than have been similar comparisons in recent months. In fact, the industry as a whole is in a much better Position than it occupied a year ago. The fall in demand for the different grades of paper began in November and December, 1920, and January, 1921. At that time production was at maximum capacity, stocks were small, and unfilled orders large. Sud denly orders ceased, many contracts were cancelled, shipments fell off more rapidly than production could be curtailed, and consequently a year ago stocks were accumulating rapidly. Therefore, last January deal ers had large supplies of paper on hand that were bought at high prices, and manufacturers possessed even larger stocks, which had been made at maxi mum production costs to fill contracts that were sub sequently cancelled, or to supply an anticipated demand which, it was later realized, would not develop. At present, it is stated that consumers have practically no paper on hand, that dealers are main taining not more than normal stocks, and that although the mills have greater stocks than they need, they are not accumulating goods as rapidly as they were a year ago. The existence of these ex cessive supplies at the mills is a somewhat depressing factor. On the other hand, the total stock of paper available for use is probably not so great as it seems t° be, for mills are now holding paper formerly carried by dealers and consumers, who, knowing that orders will be filled promptly and not fearing any substantial advances in price, are purchasing °nly according to their needs. As a consequence of decreased shipments, opera tions are being curtailed, but not to the same extent. Reports indicate that production now averages about 60 per cent of normal. A few mills are operating at as much as 85 per cent of capacity, but others are down to as low as 50 per cent. Operations for the year in response to the improved demand reached their highest point in October and November, during which months the output of the mills was between 75 and 80 per cent of capacity. Some manufacturers of wrapping paper were then running on full time and were behind on orders. The accompanying table gives a statistical sum mary of the condition of the paper manufacturing industry last fall. It will be noted that in most cases production increased or held its own during November, although shipments fell off, and that as a consequence stocks were enlarged. Except on wrapping papers and paper board, production and shipments were less than in November, 1920, and in all cases stocks were larger. The increase in the total output and sales of all grades since November, 1920, is not representative of the true situation. It is more than accounted for by the increase of 40,000 tons in the figures for paper board, which was exceptionally dull in November, 1920, and fairly active during the corresponding month in 19 2 1. Also, the tonnage of this product is greater in comparison with its value than is that of other grades. STATISTICAL SUMMARY OF THE PAPER INDUSTRY Stocks at end Production Shipments of month tons tons tons Imports tons Exports tons Newsprint: Nov., 1920.. 122,993 125,323 20,266 61,248 5,544 Oct., 1921.. 101,884 109,110 23,015 75,598 704 Nov., 1921.. 104,604 104,492 23,127 74,544 1,256 Book paper: Nov., 1920.. 89,564 85,827 24,563 590 4,644 Oct., 1921.. 72,139 75,382 32,343 19 736 Nov., 1921.. 73,544 68,827 37,060 8 565 Fine paper: Nov., 1920.. 31,208 29,991 30,185 ................ *$1,020,369 Oct., 1921.. 24,635 26,672 33,957 ................. * 179,553 Nov., 1921.. 24,609 25,177 33,389 ................. * 162,828 Wrapping paper: Nov., 1920.. 65,920 61,034 25,586 167 2,627 Oct., 1921.. 64,518 68,453 52,378 512 717 Nov., 1921.. 65,905 68,078 50,205 615 1,113 Paper board: Nov., 1920.-133,818 127,072 48,969 ............... * $667,038 Oct., 1921.. 181,775 183,568 57,169 ................. * 135,735 Nov., 1921.. 172,582 169,971 59,780 ................. * 123,240 All grades: Nov., 1920..518,144 499,281 193,943 *$7,548,236 *$6,206,482 Oct., 1921..542,408 560,558 244,657 * 6,369,522 * 1,164,230 Nov., 1921..538,876 531,606 248,927 * 6,093,295 * 1,351,243 * Dollars. Figures not given in tons. With the exception of increases in box-board and some advances by book-paper manufacturers, the prices of paper have remained practically unchanged during the past month. Reports were received of a weakening in wrapping paper, but this tendency was not general. The new contract price of $70 a ton on newsprint went into effect January 1, and spot quotations have been reduced accordingly. Sulphite pulp is firm at the higher price attained December i , but the pulp market usually remains unchanged at this time of the year and until the opening of navi gation in the spring. Collections have not changed to any appreciable degree. A slight falling off in payments occurred about the first of the year, but the situation im proved immediately. PAPER BOXES After a period of inactivity lasting through De cember and into the first week of January, paper boxes are now in slightly better demand. Business, although still rather spotty and unsettled, is more stable than in December, and the industry is in a healthier condition than it was a year ago. At that time, the decline in sales was at or approaching its lowest point, prices were falling rapidly, competition was beginning to be keen, and consumers were find ing themselves oversupplied with boxes as the de mand for their products fell off. Large stocks, made in anticipation of a steady demand from regular customers, had to be stored; box board was falling in price; and heavy stocks of it bought at high prices were being carried. In practically all these respects the situation is improved, although there are still some unfavorable factors. Orders are largely for immediate use, and few con tracts for the future can be placed. One firm re ported that only the largest and most far-sighted manufacturers are ordering for future delivery. Un filled orders are therefore small in volume and are being filled promptly. The confectionery and hosiery trades are among those mentioned as now buying boxes more freely. One firm making certain special products is oper ating at capacity, but most of the box manufacturers have reduced the number of their employees, or the number of working hours a week, or both. Present production averages about 60 per cent of capacity. Although those firms who ordinarily keep finished supplies on hand for regular customers are now less hesitant about replenishing these than they were last summer, stocks of made-up goods are by no means large. Stocks held by consumers are smaller than usual, as there is felt to be no necessity of buying before goods are needed. Although competition is still rather keen among the smaller firms, these houses are unable to handle large orders, and therefore prices in general are firmer. Heretofore, it is reported, quotations were frequently made without regard to cost, and as the volume of business was slight, profits for the last year were either small or were wiped out entirely. A factor in stabilizing prices is the recent firmness of box-board. Board was low last summer, and many box manufacturers, considering it below the cost of production, stocked up heavily. When, in the fall, the demand for boxes increased and the price of waste paper rose, board manufacturers advanced their quotations on box-board. The new7 prices con tinued in force for some weeks, but were not sup ported, and therefore began to decline. Recently, however, the market became firmer and prices higher. The advance that occurred wras general, but the quo tations received vary widely, and it is evident that the market is still unsettled. Board manufacturers are offering more for wraste paper since they in creased prices on their finished product. Collections have recently improved and are now fairly good. W HOLESALE GROCERIES The wholesale grocery trade this month reports conditions that are by no means favorable, as is shown by the figures presented herewith. Sales w7ere much smaller in December than in November, which in turn were less than those of October. The demand for holiday goods fell off early in December and was disappointingly small. As a result, the total volume of sales of all reporting firms was lower than it was in any month of 1920. Business in January has also been lifeless, except on certain lines such as canned vegetables, dried fruit and coffee. The marked im provement in the demand for canned goods is at tributed to low stocks and to estimates of a small pack for last season. Although retailers’ stocks in practically all lines are low, they are not building them up and are buying only for present needs. Wholesalers state that orders are much smaller than in normal times. Slight reductions wrere announced in the prices of a variety of products at the first of the year, notably of soaps, cereals and some brands of canned milk. Canned vegetables, however, in response to the better demand, have risen. Coffee also is reported to be higher. Spectacular declines in the butter and egg markets, attributed to mild weather and surplus storage stocks, have occurred during the past month. Early in January, 92 score creamery butter on the Philadelphia wholesale market fell to as low as 34P2 cents a pound, and the general range of prices is well below that ordinarily prevailing at this time of the year. Refined sugar quotations were reduced again in the latter part of December from 5 cents to 4 -9 °. and later by some refiners, to 4.80 cents; and these prices prevailed until January 2 1, when they were again raised to 5 cents. The price for raws fell on December 28 to cents, equivalent to 3.37 cents, duty paid, which is the lowest since June, i 9 i 4 - The market recovered after that, and quota tions are now at 3.86 cents on Cuban, and 3.73 on Porto Rican, raws. The collection situation continues to become worse, as is shown by another increase in the ratio of accounts outstanding to sales. The increasing difficulty in collecting accounts is a subject of uni versal comment from the reporting firms. In fact, many of them have reduced the orders of some of their customers because of failure to pay promptly. commodities than they are paying for goods which they must use. The chart and the tables given herewith show statistically the above facts. In Table A it will be noticed, in regard to conditions a year ago, that the production of the chief crops, except wheat, was greater in 1920 than in 1919, but that the prices received, and consequently the total value of the crops, were considerably less. As an indication of high costs, wages paid to farm labor in certain years are given in Table B. It will be noted that the 1920 averages exceeded those for 1919. The tables further show that in 19 2 1, although the acreage planted to most crops had been increased, the total production was less than in 1920, and because of the continued fall in prices, the value of the crops de clined even further. The index numbers of the Bureau of Labor Statistics show that the wholesale prices of farm products declined 41 per cent from December, 1919, to December, 1920, and 2 i j 4 per cent from the latter date to December, 19 2 1, making a total reduction of 54 per cent within the past two years. On the other hand, the figures for all com modities are only 36 per cent lower. Some idea of the effect which this difference in price changes may WHOLESALE GROCERY TRADE Number of reporting firms—48 December, 1921, December, 1921, compared with compared with November, 1921 December, 1920 kTet sales during December.............. -12.4% —20.6% —10.7“ Accounts outstanding December 31 -8 .2 “ Ratio of accounts outstanding to sales: December, 1921.................................................115.3% November, “ ...................................................... 112.6“ October, “ ................................................108.3 “ September, “ ..................................................105.8“ August, “ ................................................. 98.3 “ July, “ 102.6“ AGRICULTURE hrom an agricultural standpoint the year 1921 was P°t a favorable one, and the position of the farmer ls at present a subject of much discussion. In 1920, crops were planted and cultivated at the greatest cost ever required for the production of farm products, d he prices received were correspondingly high durlng the early months of that year, but after June these prices began to decline on all agricultural comniodities, and consequently 1920 was a disastrous year for farmers. It was thought that 1921 would de much more favorable, as costs were lower than in the preceding year. But prices on most of the im portant products continued to decline more rapidly than costs. In addition, yields per acre and total production were smaller than in 1920, making the total returns received by the farmer considerably less. Furthermore, as is well known, the prices of other commodities have not come down to the same extent, and the agricultural sections of the country are receiving relatively less from the sale of their 21 CROP SUMMARY OF U. S. DEPARTMENT OF AGRICULTURE (Monthly Crop Reporter, December, 1921) T able A Corn Pennsylvania New Jersey . Delaware ... United States All Wheat Pennsylvania New Jersey . Delaware ... United States Oats Pennsylvania ........ ... New jersey........... Delaware .............. United States ....... .... Potatoes Pennsylvania .............. New Jersey................. Delaware ..................... United States ............. Hay—Tame Pennsylvania .............. New Jersey................. Delaware ..................... United States............. Acreage—000’s omitted 1921 1920 1919 Acres Acres Acres Production—000’s omitted 1921 1920 1919 Bus. Bus. Bus. 1,589 1,556 1,581 76,272 70,020 74,307 $0.55 $1.00 $1.47 $41,950 $70,020 $109,231 241 236 261 11,327 10,384 10,440 .53 6,003 8,826 15,973 .85 1.53 177 173 178 6,549 6,488 5,340 .45 .75 1.45 2,947 4,866 7,743 103,850 101,699 97,170 3,080,372 3,208,584 2,811,302 .423 .67 1.345 1,302,670 2,150,332 3,780,597 1,365 1,368 1,425 23,850 22,700 24,898 81 74 85 1,539 1,184 1,530 113 116 126 1,300 1,972 1,512 62,408 61,143 75,694 794,893 833,027 967,979 1.03 1.13 .98 .927 1.70 2.05 1.71 1.437 2.16 24,566 38,590 53,779 2.20 1,739 2,427 3,366 1,274 3,372 3,221 2.13 2.149 737,068 1,197,263 2,080,056 1,238 1,210 1,176 35,283 47,190 36,456 72 72 71 1,728 2,304 2,130 138 231 168 7 6 44,826 42,491 40,359 1,060,737 1,496,281 1,184,030 .45 .45 .46 .303 .66 .75 .70 .46 .80 15,877 31.145 29,165 .80 778 1,728 1,704 124 162 .90 77 .704 321,540 688,311 833,922 246 234 21,586 28,290 23,400 1.33 90 83 9,025 14,040 7,968 1.42 913 1.10 10 11 500 1,060 3,657 3,542 346,823 403,296 322,867 1.111 1.24 1.25 1.00 1.145 1.54 28,709 35,080 36,036 1.69 12,816 17,550 13,466 1.25 550 1,060 1,141 1.595 385,192 461,778 514,855 251 95 10 3,815 3,025 2,939 2,881 3,630 300 301 273 396 73 74 70 88 58,742 58,101 56,888 81,567 4,115 497 104 87,855 have is given in the accompanying chart, showin O* the trend of the prices paid to producers for certain farm products from 19 14 to the present. For the sake of comparison, the Bureau of Labor Statistics’ index number for prices of all commodities is also given. A study of the relation between these curves will afford an approximate idea of the trend in the buying power of our agricultural population during the years indicated. In Table C is presented an aver age of actual prices paid to producers of farm prod ucts all over the country on certain dates. This is a more concrete but less graphic presentation of similar facts given in the chart. Turning to the situation in the Third Federal Re serve District, we find conditions more favorable. This is a result primarily of the proximity of the large city markets, affording a steadier demand, lower freight rates, and consequently higher prices. The past season began with an early period of warm weather, which, however, proved disastrous, as it WAGES OF MALE FARM LABOR—YEARLY AVERAGE T able B 1921 1910 1920 1913 1919 North Atlantic States: Per month, with board. .$21.65 $23.45 $42.18 $51.92 $38.06 Per day at harvest, with board ............................ 1.63 1.67 3.08 3.78 2.73 United States: Per month, with board.. 19.21 21.38 39.82 46.89 30.14 Per day at harvest, with board ............................ 1.45 1.57 3.15 3.60 2.24 (000’s omitted) Total farm value, basis Dec. 1 1921 1920 1919 Price—December 1 1921 1920 1919 Per bu. Per bu. Per bu. 3,889 410 90 86,359 Per ton Per ton Per ton $17.00 18.00 17.50 12.13 $23.50 27.50 21.50 17.76 $24.00 29.10 26.00 20.08 61,710 96,702 93,336 7,128 13,668 11,931 1,540 2,236 2,340 989,693 1,560,235 1,734,085 advanced fruit and truck crops to such an extent that they were materially damaged by sudden frosts. Wet weather early in May, followed by excessive drought in June, retarded the other crops; but in July and August growing conditions improved in this district, although not in the rest of the country. The harvesting season here and elsewhere was entirely satisfactory, and the year ended favorably. Production of the most important crops in the states of this district for the past three years is given in Table A. Many of the county agricultural agents report that the corn crop was better than usual this year; and the government’s final estimate shows an increase in production over that of the last two years. Oats and potatoes, on the other hand, show substantial decline in total yield, and the fail ure of the fruit crops has been previously mentioned. FARM VALUE OF CROPS—AVERAGE FOR UNITED STATES T a ble C Dec. 1, 1913 Wheat ............. $0.80 Corn ................ .bu. .69 Oats ................. .39 Potatoes ......... .69 Sweet potatoes.. .bu. .73 Apples ............. .98 Hay, loose ___ 12.43 Butter ............. ..lb. .29 Eggs ..................doz. .33 Chickens......... ..lb. .12 22 Dec. 1, 1919 $2.15 1.35 .70 1.60 1.34 1.84 20.08 .60 .62 .22 Dec. 1, 1920 $1.44 .67 .46 1.15 1.13 1.15 17.76 .55 .65 .22 June 1, Dec. 1, 1921 1921 $1.27 .63 .40 .67 1.29 1.69 12.52 .29 .19 .21 $0.93 .42 .30 1.11 .88 1.84 12.13 .41 .51 .18 Acreage, it will be noted, was greater than in 1920 in every case. In regard to prices, this section, as was mentioned above, fared better than the rest of the country. Furthermore, much truck farming is done here be cause of nearness to the large cities, and its products have brought good prices all year. Irish potatoes are higher now than they were at this time last year and are almost double their June 1 price. Sweet potatoes have also sold well all year, and in nearby states are bringing more than they did late in 1920, although they are cheaper in the southern states. Fresh vegetables as a rule sold at satisfactory figures throughout the year. The prices on cranberries were higher than usual, and the 1921 crop was particularly targe in New Jersey. In conclusion, it is important to note that because °I the operation of the above factors, the farmers ° f the country are not able to purchase goods as p en sively this year as in previous years. But the S1tuation is not so bad in the Third Federal Reserve district as in the more exclusively agricultural dis tricts further removed from the large markets. Farmers, however, are not holding crops for higher prices as much as they did in 1920. They have reduced their costs in every possible way, they are cutting their purchases down to a minimum, and consequently are becoming better able to meet their outstanding obligations. TOBACCO C igars Figar manufacturers are now in the midst of their ’jsual winter inactivity. With few exceptions, facto,les throughout the district were closed down during Ihe latter part of December for the purpose of taking stock. A few large firms re-opened some of their Ptants on January 4; others did not resume operahons until the middle of the month; and many plants. Particularly those of the smaller firms, are still closed. I he demand for cigars is exceedingly light, and °rders in most cases can be filled from stock. A Humber of the large distributors have requested that regular weekly shipments be postponed until further notice. Until these are resumed sales will continue to be small. COMPILED AS OF [ The situation in regard to finished stocks is favor able. Smokers no doubt still have the usual number of Christmas cigars to be used before they start buying again, and until that time retail and whole sale dealers have, as a rule, enough on hand to meet requirements. This is not true in all cases, however, as many dealers are purchasing cigars now who, either of their own accord or upon the recommenda tion of conservative manufacturers, refrained from buying heavily last month. It is the general opinion that the total number of finished cigars held by re tailers, jobbers and manufacturers is smaller than it was a year ago, and also that they are of more certain quality, for, beginning about this time last year, a large volume of cigars that had been made carelessly during the height of the abnormal 1920 demand was thrown on the market at a sacrifice. Most of those manufacturers who continue to run their factories are accumulating stocks in an ticipation of spring business. If in the spring the demand is greater than their output, they are pre pared to meet it; if not, they can curtail production then. Also, labor is more plentiful now than it will be at that time. Only a few large manufacturers of widely distributed popular brands, however, have adopted such a policy. Some price reductions have been announced this month. For example, certain brands heretofore re tailing at eight cents have been lowered by the manu facturer so that they can now be sold at 7)4 cents. But because of the keen competition existing, many retailers are cutting their margins and selling cigars below advertised prices. Few manufacturers, how ever, have quoted prices at much below last year’s levels. The fall in profits within the past year has not been the result of reducing prices, but rather of the shift in demand toward the cheaper brands, and of the smaller number of cigars sold. As frequently explained in previous reports, price reductions were not more general chiefly because high-priced leaf tobacco was still being used in making cigars and because sfovernment taxes were raised. The demand for cheaper cigars was met by making new brands to sell for five cents. These became popular im mediately and continue to be so. Labor costs were fairly well reduced last year in most cases, but a few very slight cuts have been made by various manufacturers this month. JANUARY 20, 1922 This business report will be sent regularly without charge to any address upon request. 23 RESOURCE AND LIABILITY ITEMS of Member Banks In Philadelphia, Camden, Scranton and Wilmington (000’s omitted) CHARGES TO DEPOSITORS’ ACCOUNTS other than banks’ or bankers’, as reported by Clearing Houses Altoona................. Chester................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre......... Williamsport......... Wilmington........... York...................... Ja n . 11, 1922 D ec. 14, 1921 Ja n . 12, 1921 32,727,000 4,276,000 7,902,000 3,973,000* 4,636,000 322,254,000 8,448,000* 16,385,000 11,495,000 9,421,000 4,158,000 8,486,000 5,447,000 33,108,000 3,686,000 6,978,000 4,452,000* 4,728,000 295,669,000 7,142,000* 15,414,000 11,601,000 9,048,000 4,633,000 5,993,000 3,842,000 33,540,000 4,705,000 7,478,000 4,919,000* 5,693,000 317,875,000 7,671,000* 19,279,000 11,434,000 8,549,000 4,786,000 9,874,000 4,099,000 Loans and discounts: Secured by U. S. securities Secured by other stocks and bonds................... All other......................... Investments: United States bonds. ... U. S. Victory notes........ U. S. Treasury notes.... U. S. certificates of in debtedness.................. Other bonds, stocks and securities..................... Total loans, discounts and investments.... Demand deposits............. Time deposits.................. Borrowings from Federal Reserve Bank............... Totals................ 3397,187,000 3364,700,000 3397,312,000 *Different number of banks reporting. Not included in total. 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......... 3224,563 6,277 3230,840 66,405 19,225 8,665 14,291 3108,586 57,431 1,730 3398,587 376,385 198,042 407,412 45,283 11,342 12,447 155,295 3816,602 3821,720 3906,206 624,324 627,831 672,893 46,221 44,741 36,976 43,531 49,065 110,036 Ja n . 1 6 ,19 22 Jan. 11,1922 Dec. 14, 1921 Jan. 14, 1921 Capital paid in................. Surplus............................ Government deposits. . . . Members’ reserve account Other deposits.................. Total deposits........... Federal Reserve notes__ Federal Reserve Bank notes............................. Deferred availability items All other liabilities........... Total liabilities......... 38,736 38,736 38,494 17,010 17,564 17,945 1,031 2,740 1,459 101,180 97,822 103,799 1,287 1,366 1,203 3103,842 3101,928 3106,117 188,024 203,767 266,856 22,348 5,288 6,525 47,324 56,322 42,286 4,982 1,211 473 3367,831 3398,587 3469,360 P revious m o n th Y e a r ago Philadelphia banks: Loans........................ 3628,929,000 -1.7% -12.8% Deposits.................... 606,459,000 - -7% - 6.7% Ratio loans to de 105%* 111 %* 104% posits ..................... Federal Reserve Bank: Discounts and col lateral loans.......... 371,136,035 —20.7% -50.8% Reserve ratio.............. 75.7% 73 .0%* 59.6%* 90-day discount rate.. 4 y2%* 4%%* 4H% Commercial paper.... 6%* 4 4H% 3202,318 878 3203,196 110,233 43,146 11,155 34,773 3199,307 64,963 1,894 3469,360 LIABILITIES 353,628 198,231 338,880 48,581 9,721 5,990 7,189 159,500 P ercen tag e increase or decrease com pared w ith Jan. 11, 1922 Dec. 14,1921 Jan. 14, 1921 3213,752 7,623 3221,375 60,084 12,706 14,381 12,685 399,856 45,066 1,534 3367,831 350,928 203,802 326,293 46,697 12,103 4,873 10,209 161,697 BUSINESS INDICATORS STATEMENT Federal Reserve Bank of Philadelphia (000’s omitted) RESOURCES A t th e close o f business Ja n . 4, 1922 D ec. 7, 1921 Ja n . 7, 1921 D ecem ber, 1921 P ercen tag e increase or decrease com pared w ith P revious Y ear ago m o n th Bank clearings: In Philadelphia........ 31,904,000,000 + 12.2% -12.1% Elsewhere in district. 186,938,000 +24.6% + 3.7% 32,090,938,000 + 13.2% -10.9% Building permits, Philadelphia............. 3,070,455 -47.0% +112.7% Post Office receipts, Philadelphia............. 1,576,435 +23 .0% - 1-4% Commercial failures in district (per Dun’s)....................... 76* 102* 124 Latest commodity in dex figures: Annalist (food prices only)................ 159.904 -2.6% -20.0% Dun’s...................... 164.444 - -1% -17.2% 11.3725 + .5% -10.2% Bradstreet’s.............. •Actual figures. 24
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