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BUSINESS AND FINANCIAL CONDITIONS THIRD FEDERAL PHILADELPHIA IN THE RESERVE DISTRICT JULY I, 1921 By RICHARD L. AUSTIN, Federal Reserve Agent and Chairman FEDERAL RESERVE BANK of PHILADELPHIA G E N E R A L SU M M A R Y N active trading did not de under construction, and many old orders are velop during the past month, and few being cancelled. _ signs of improvement are apparent in the The demand for petroleum, both crude and usiness world at this time. Buyers in all lines refined, is poor, and that for bituminous and are cautious, confining purchases for the most anthracite coal but little better. Building opera Patt to goods needed for immediate',consumption, tions are still hampered by the strike in the UI1d placing future orders of only limited size. allied trades and, as a result, sales of building Not all industries, indeed, are favored with materials are small. Textiles are in a much even restricted future buying, iron and steel better position, but their condition has not eing a notable example. The last four weeks improved since last month. Silk goods are ave been one of the worst periods ever experi moving in good volume at firm quotations, and enced in that business. The demand suffered a the raw silk market has recovered from its recent Urther relapse, prices declined in spite of the decline. The call for cotton and woolen goods ^tempted stabilization, and production sched- is fair, but yarns and the raw stocks are moving u es were reduced to a point less than 25 per slowly. Knit goods, as a group, are in good cent of the industry’s capacity. Shipbuilding spot demand, but there is still much to be de P ants are in the throes of still greater depression; sired in the way of orders for future delivery. 110 new orders are being received, operations are Full-fashioned hosiery is in urgent request, owing c°nfined to the completion of ships already to the scarcity created by the strike in the o rm ally T A B L E OF CON TEN TS PAGE Agriculture................... g o e r s ’ acceptances. PAGE NUMBER NUMBER .................. 14 .................. .................. 13 .................. 5 ................. 25 .................. 14 7 5 11 P o d d in g m aterials 16 14 Coke............... Commercial paper. Confectionery. . . . Cotton, goods........ Cotton, raw.......... Cotton, yarns........ l?e , lts t0 individua ederal Reserve b; I lllU n r'in l _• 1 23 5 26 18 19 18 .................. .................. .................. 4 9 23 13 4 4 5 4 .. . 21 P a p e r ...................................................... ................... 13 24 PAGE NUMBER 17 P e t r o l e u m ........................................ ................... 23 P r i n t i n g & P u b l i s h i n g ............ .................. R e f r a c t o r i e s ..................................... .................. R e t a i l t r a d e ..................................... .................... .................... 5 .................... .................. 12 6 S i l k .............................................................................. T o b a c c o , c i g a r s ............................. ................. T o b a c c o , l e a f .................................. .................. U n d e r w e a r ........................................ .................. .................. ................. W o o l , y a r n s ..................................... .................. 10 22 20 26 27 22 19 20 19 2 BUSINESS AND F I N A N C I A L C O N D I T I O N S Philadelphia mills. At the present time, there are no signs of a break in this deadlock, though it has existed since the attempt was made at the first of the year to reduce wages 1 5 per cent. The shoe situation is encouraging. Orders for fall delivery are being received daily, and the industry is assuming a more normal aspect. The leather market for the first time in almost a year showed definite signs of improvement. The demand broadened and much activity was displayed in lines which hitherto had been almost totally neglected. A most favorable develop ment was the increased export call. Prices of the more desirable leathers advanced sharply late in M ay; but this in a measure served to check buying, and as a result quotations have reacted slightly. The hide and skin markets, too, improved during the month. Business in the printing and publishing in dustry is small, and for this reason the strike of compositors, pressmen and press feeders has not created so serious a situation as might otherwise have been the case. Retail trade fell off during M ay, the business done being 7.8 per cent less than that of M ay, 1920. The larger portion of this decline is attributable to the difference in the price levels of the two months, and to the fact that sales during M ay, 1920 were greatly stimulated by the 20 per cent discount cam paign. Commodity index numbers for June 1 were below those of M ay 1, but the rate of decline during M ay was decidedly less than in the pre ceding months of the year, and this gave rise to the opinion that a period of stabilization may be approaching. The downward movement of prices, which continued during June, is reflected June 17 Cotton - middling uplands. .. ,1b. Wheat - no. 2 red.............. bu. Corn - - no. 3 yellow.......... bu. Hides - - packer No. 1 native ,ib. Lumber - Tonawanda w. pine per M ft. Pig Iron -no. 2 X Phila......... ton Copper - electrolytic............ ,1b. Lead - - N. Y..................... ,1b. Petroleum, cr. at well............ ,bbl. Hogs - - live....................... . 100 lbs. Rubber - up river fine.......... .lb. Sugar - - fine gran, in bbls.... 100 lbs. .114 1.58 •82% .14 90.00 25.50 .13 % •04% 2.50 7.95 .15% 5.60 May 13 .129 1.68 .80% .12 90.00 25.84 •123% •05% 3.50 8.65 .18 6.60 in the foregoing table, giving quotations for twelve basic commodities on M ay 13 and June 17, as reported by R. G. Dun & Company. It will be seen that the only advances were in corn, hides, and copper. In connection with commodity prices in this country, it is interesting to note the trend of quotations abroad. The index numbers of whole sale prices in Italy, compiled by Prof. Riccardo Bachi, declined 6 per cent during M ay, the textiles, minerals and metals, and chemicals falling most. The total decline since last No vember amounts to 18 per cent. In Germany? the general level of wholesale prices dropped 1.5 per cent during M ay, according to the price index of the Frankfurter Zeitung; “ The All Commodities” Index, compiled by this paper, stands at 1407, as compared with 100 in the middle of the year 1914. The indexes pub lished by the General Statistical Bureau of France recorded a decline of 5 per cent during the month of M ay, for wholesale prices, and 3 per cent for retail prices. Commercial failures reported by R. G. Dun & Company do not yet show any diminution in comparison with previous years. The failures recorded in the Third Federal Reserve District were both heavier and more numerous during M ay, 1921, than they were during any M ay of the past five years. Number May, 1921.................................... April, 1921.................................... May, 1920.................................... May, 1919.................................... May, 1918.................................... May, 1917.................................... 69 65 37 30 45 59 Amount of liabilities 31,516,894 1,575,775 1,085,182 1,096,945 1,121,474 578,653 A comparison of the number and amount of liabilities during the first five months of the years 1917 to 1921 is interesting: Number 1 9 1 7 ....................................................................... 1 9 1 8 ........................................................................ 1 9 1 9 ....................................................................... 1 9 2 0 ....................................................................... 1 9 2 1 ....................................................................... Amount of liabilities 302 289 152 156 364 $ 4 ,3 9 9 ,8 5 5 6 ,4 2 2 ,6 9 3 3 ,6 2 4 ,2 0 0 3 ,1 9 7 ,9 3 2 1 0 ,0 6 0 ,5 2 2 BUSINESS AND F I N A N C I AL C O N D I T I O N S 3 SYN O PSIS OF B U SIN E SS SITU ATIO N Compiled as of June 21, 1921 Third Federal Reserve District B u s in e s s D emand P r ic e s j j R a w m a t e r ia l or m e rch a n d ise situ atio n C o llection s F in ish ed Brick.................... Improved Lower Abundant Fair Adequate Coal, anthracite...... Fair Firm Plentiful Fair Large Coal, bituminous__ Poor Firm Plentiful Poor Large Confectionery........ Poor Lower Plentiful Fair Large Cotton goods......... Fair Firm Abundant Fair Low Cotton yarns......... Poor Slightly lower Sufficient Fair Low Cotton, raw .......... Poor Slightly lower Plentiful Good Gas and electric fix tures. .. . Poor Lower Sufficient Fair Sufficient Glass.. Slight improvement No change |Plentiful Fair Sufficient Groceries__ Fair Lower j Plentiful Poor Moderate Hardware... Fair Lower Sufficient Fair Sufficient Fair to good Fair to good Fair to good Excessive Very low Depleted Hosiery—Seamless j Cotton,—Poor Silk—Good Full fashioned. . Excellent Lower j Good Firm to slightly adv. ! Good Advanced j Good H and steel....... on Negligible Lower Ample Fair Sufficient Leather Good Firm Sufficient Good Large Lumber. Improved Slightly lower Fair Adequate Paint.. Good Same Sufficient Good Low Paper. Poor Lower Plentiful Poor to fair Large Petroleum, crude. .. Poor Lower Abundant Fair Large Petroleum, refined. . Poor Lower Abundant Fair Large Printing, Publishing Poor Firm Plentiful Fair to good Refractories . . Negligible Lower Plentiful Fair Low Shoes Good Unchanged Sufficient Fair Moderate Silk Good Firm Low Fair Adequate Tobacco Better Firm Sufficient Underwear— Heavy weight..... Fair Light weight....... Good for spot Firm Good Fair to good Firm Good Fair to good Low Wo°l, cloth . .. Fair No change Sufficient Good Low Wool yarns... Fair Slightly lower Sufficient Good Adequate ~ °ol, raw -W Poor Slightly lower Sufficient 1Good ! Fair to good Adequate stocks , 4 BUSINESS AND F I N A N C I A L C O N D I T I O N S M ember B an ks F I N A N C I A L C O N D IT IO N S F ederal R e serve B a n ks N June 15, as compared with M ay 18, there was a decline of 5.4 per cent in the holdings of discounted paper by the Federal Reserve Bank of Philadelphia and of 1.1 per cent in Federal Reserve note circulation. Deposits gained 1.7 per cent and total reserves, 0.2 per cent. The reserve ratio increased from 53.8 per cent to 54.1 per cent. A year ago the reserve was 41.6 per cent. O Loans, discounts, and investments of report ing member banks throughout the country, in cluding rediscounts with Federal Reserve banks, on June 8 were 2 billions of dollars below the high point of October 15, 1920. Most of this decline has occurred since the beginning of 1921, as the following table shows: j January 7 1921 L oans and June 8 1921 Per cent of change D is c o u n t s :* The reserve ratio of theFederalReserve system Secured by U. S. on June 15 was 56.8 per cent, which was exactly obligations....... 3 868,235,000 3 665,729,000 -23% Secured by other the same as the ratio on M ay 18. This fact, how stocks and bonds 3,110,850,000 3,017,433,000 - 3% ever, does not fully tell the story, as there has All other loans and discounts. . . 9,316,544,000 8,194,531,000 -12% been a decline in the meantime of $134,874,000 in U. S. securities 1,212,368,000 - 7% discounted paper, and of $92,980,000 in Federal owned.............. 1,311,299,000 1,212,368,000 - 7% Other stocks, bonds Reserve note circulation, and a gain of and securities. . . 1,963,314,000 2,088,765,000 + 6% $66,490,000 in total reserves. The increase in Total loans, dis reserves and decrease in note circulation was counts and in balanced by an increase of $212,585,000 in total vestments* ....... 316,570,242,000 315,178,826,000 - 8% Total deposits.. . 13,965,648,000 13,169,425,000 - 6% deposits. This increase in deposits followed large ly as the result of 300 millions in Treasury one“Including bills rediscounted with Federal Reserve bank. day certificates held on June 15, which was purely a temporary condition incident to pay In dollars the largest decline has occurred in the ments on account of excess profits taxes and the item “ all other loans and discounts,” which in refunding of maturing certificates of indebtedness. cludes rediscounts of commercial paper. Depos Federal Reserve notes in actual circulation its have decreased 6 per cent since the beginning have dropped $730,496,000, or 21 per cent, from of the year and total loans, discounts and invest the peak, and the loans of the system are now ments, 8 per cent. down $1,119,146,000, or 39 per cent, from the M oney R ates high point of last November. Of this latter de As the banking situation improved it became cline, $550,805,000, or 49 per cent was due to the paying off of paper secured by Government war possible to lower rediscount rates at the Federal obligations. The total amount of rediscounting Reserve banks. Their rates on commercial between Federal Reserve banks on June 15 was paper rediscounts are now 6 per cent with the ex $37,458,000, this accommodation being granted ception of Chicago, Minneapolis and Dallas, per cent rate. These three by the Boston and New York banks to the Rich which maintain a mond, Minneapolis and Dallas banks, which banks, however, have all lowered their rates from serve agricultural districts. The largest amount 7 per cent within the past month and a half. I n of borrowing outstanding between Federal Re the open market commercial paper has sold at serve banks was $247,078,000 on October 29, 6j^ per cent in the case of issuing firms of the 1920, this aid being extended by the Boston, highest standing, and bankers’ acceptances up to Philadelphia and Cleveland banks to eight of the 90 days maturity now sell on a 5 J2 per cent basis* other Reserve banks in order to maintain their Call money in the New York market has dropped as low as 5 per cent at the time of writing. Reserve positions. BUSINESS AND F I N A N C I A L C O N D I T I O N S G overnment S ecurity L oans A ready response to security offerings by the Treasury Department has followed every issue. The June 15 issues, consisting of one-year 5F2 Per cent certificates of indebtedness, and threeycar 5 ^ per cent Treasury notes were largely oversubscribed, subscriptions totaling $788,007,°°o and allotments $625,375,000 for the country as a whole. The subscription of the Philadel phia Federal Reserve district was specially grati fying, the total being $105,714,600, or 13.4 per cent of the total. The final allotment given this district was $70,843,000, divided into $25,333,500 of certificates and $45,509,500 of three-year notes. St. Louis, 25 per cent; Minneapolis, 17 per cent; Kansas City, 27 per cent; Dallas, 13 per cent; San Francisco, 24 per cent. C ommercial P a pe r Offerings of commercial paper continue small. Paper of firms which are infrequent borrowers is disposed of to the best advantage and some has sold as low as 6^2 per cent, though the average is 7 per cent. The payment of the June installment of the in come tax has caused some banks to curtail their buying of commercial paper. The total business, however, has varied little from last month. B a n k e r s ’ A cceptances S a vin g s D eposits A decline for the third consecutive month is shown by the deposit of 24 savings institutions in the Philadelphia Federal Reserve district. The !°ss during M ay was $1,288,518, as compared Jdth $1,182,818 in April, and 599,414 in March, deposits on June 1 were $15,856,532, or 5.4 per cent in excess of June 1, 1920. Philadelphia In 1 9 2 1 — June 1 .„ ....... May 1 . . .. April 1 ...... March 1 __ 1920— J une i . Outside of Philadelphia 3 2 5 4 ,1 6 9 ,8 0 1 2 5 5 ,3 1 7 ,1 8 1 2 5 6 ,3 3 5 ,6 4 1 2 5 6 ,9 0 1 ,3 5 9 2 4 2 ,0 1 5 ,0 6 0 3 5 2 ,7 6 1 ,2 3 7 5 2 ,9 0 2 ,3 7 5 5 3 ,0 6 6 ,7 3 3 5 3 ,1 0 0 , 4 2 9 4 9 , 0 5 9 ,4 4 6 Totals 3 3 0 6 ,9 3 1 ,0 3 8 3 0 8 ,2 1 9 ,5 5 6 3 0 9 ,4 0 2 ,3 7 4 3 1 0 ,0 0 1 ,7 8 8 2 9 1 ,0 7 4 ,5 0 6 1 i i D ebits to I ndividual A ccounts Charges to depositors’ accounts by banks at e principal clearing house centers of the country totalled $7,944,921,000 on June 15, a decrease of A5 Per cent from the corresponding week of 1920. ebits during this week include payments on Recount of excess profits taxes, making it value r s to compare them with other periods during e year. Decreases in each of the Federal Re^ rve districts were as follows: Boston 27 percent; ew York, 10 per cent; Philadelphia, 21 per cent; cveland, 30 per cent; Richmond, 13 per cent; t anta, 33 per cent; Chicago, 28 per cent; 5 Reports received from five dealers in bankers’ acceptances show that sales in this district during M ay increased more than 11 per cent, as compared with sales in April. Not all of these dealers were handling acceptances in M ay, 1920, but com paring the figures of those who were, the increase is in excess of 800 per cent. The great majority of acceptances sold during M ay arose from transactions involving the im portation and exportation of merchandise, the principal articles covered being sugar, silk, cotton and grain. Transactions involving warehousing of staple commodities account for most of the others. In nearly all instances, the commercial banks are the buyers. Reports of twelve Philadelphia district member banks that execute acceptances may be summar ized as follows: 1921 May 10 ..................... Executed during preceding month 35,325,000 4.558.000 5.611.000 2.795.000 Outstanding on given date 314,127,000 13.234.000 12.892.000 10.798.000 The purposes of these acceptances are the same as of those reported by dealers, but the total rep resents a reduction of 5° Per cent, as compared with the previous month, whereas the sales by 6 BUSINESS AND F I N A N C I A L C O N D I T I O N S dealers, as stated above, show an increase. The banks in this district apparently have felt the falling off in our foreign trade more acutely than those in other districts. But the insuffi ciency in the supply of acceptances seems to be general. Purchases by the Federal Reserve Bank of Philadelphia for the first five months of the last three years are: ! 1 " .... 1919 1920 1921 ! January............... February............. March................. ; April................... | May................... 3 883,390 1,541,652 1,828,063 1,918,792 534,512 33,723,290 2,250,264 1,387,821 992,076 503,727 36,671,629 11,001,774 9,022,991 9,859,528 11,037,622 Totals.............. 36,706,409 38,857,178 347,593,544 Although in terms of dollars sales have been declining, they compare favorably with last year’s when measured in units, and though no figures are available, reports received indicate that the number of units sold during May, 1921, was but slightly smaller than in M ay last year. During June, retail sales were satisfactory in the larger cities of this district, but in the rural sections busi ness was particularly dull, for farmers are pur chasing only sparingly. Conservatism still marks the buying policy of retailers. Although all merchants have placed some orders for fall goods, these have not been extended to all lines; and the orders placed have been limited in size, in many cases being sufficient only for the opening of the season. There is no confidence in the stability of prices in the wholesale markets, and likewise no assur ance that the public will buy goods based upon After an advance in late M ay, selling rates have declined, and are at the present writing as follows: RETAIL TRADE Exhibit I 30 Days 60 Days 90 Days 6 Months N et May, 1921 compared to May, 1920 S ales 6% - 8.8% - 4.8% - 7.8% R E T A IL TR A D E M S G EA SU R ED in dollars, retail sales as com pared with those of 1920 declined more Firms in Philadelphia............... rapidly during M ay than in April, the figures for Firms outside Philadelphia........ the latter month being only .4 per cent below All reporting firms.................... those for the corresponding period of last year, whereas sales for M ay were 7.8 per cent less than they were in May, 1920. This wide discrepancy S C S may be accounted for, in part, by the fact that retail sales during M ay, 1920, were far in excess Firms in Philadelphia................ Firms outside Philadelphia........ of those in any similar period in the history of All reporting firms.................... business, owing to the “ Twenty per centoff” sales which were very generally introduced in this dis J O C P trict during that month. The fact that M ay of last year contained five Saturdays, which are the 1 Firms in Philadelphia................ largest sales days in retail trade, and M ay, 1921, i Firms outside Philadelphia........ only four, is also responsible in part for the 1 All reporting firms.................... decrease this year. tocks to cks rders of oods o m pared o m pared to to ales u r c h a se s tSfcSfcS 1 On Firms in Philadelphia (15)......... Firms outside Philadelphia (32).. All reporting firms (47)............. January 1 to May 31, 1921 compared to January 1 to May 31, 1920 1+ 1 Eligible members bills................ SH -SH 7c 5K-5H% 5>^-5y6% 5 H Eligible non-mem bers bills......... 5 H -5 r t% 5H ~5H % 5 X - 6 % May 31, 1921 compared to May 31, 1920 May 31, 1921 compared to April 30, 1921 -17.0% - 8.2% -14.9% - .5% + 2.7% + .2% Average stocks Jan. 1 to May 31, 1921, compared to average sales Jan. 1 to May 31, 1921 314.2% 447.7% 346.1% Orders outstanding May 31, 1921 compared to total purchases in 1920 7.5% 5.0% 7.0% BUSINESS AND F I N A N C I A L C O N D I T I O N S present quotations. For this reason, retailers are unwilling to stock goods until the public atti tude can be gauged by actual sales. A repetition ° f this spring’s orders for immediate shipment is, therefore, the prospect for the autumn. A G R IC U L T U R E f U N FA V O R A B LE weather since M ay i is ^-^responsible for material reductions in crop ^estimates since last month. Six weeks ago, all farming was fully ten days ahead of the normal schedule, but spring work has been so delayed since that time as to cause a loss of this advan tage in most cases. Late frosts in March and April killed the fruit crops. Too much rain early in M ay delayed planting and cultivation. Cold weather throughout the month of M ay and lack of rain since the middle of the month re tarded the growth and development of all prod ucts. The accompanying tables show the condition ° f the main crops in this district on June i, as compiled by the Bureau of Crop Estimates, ^here comparative data are given, the condition of the crops is seen to have been poorer on June i than on M ay i, but better than on June i, *92.0. An increase in the acreage of oats and barley sown this spring in Pennsylvania over last year’s acreage is noted. Reports from all over the district indicate that a large part of last year’s wheat and hay was held by the growers for fugher prices. Some of this has been disposed at low prices in order to make room for the new crop, but a considerable supply is still in the farmers’ hands. I he extent of the damage to fruit by the late *rosts can now be reliably determined. The government report given herewith shows that early estimates were not over-pessimistic. Ap ples were affected to a smaller extent than Peaches and pears. Cherries and plums are reported to have been almost entirely destroyed, ?ue damage in this district being greater than ln the country as a whole. The estimated aPple production in the district is only 21 per Cent of last year’s yield, and the corresponding 7 ratio for peaches is 19.5 per cent, and for pears 16.1 per cent. The progress of truck crops has been slow, as these require warm weather with occasional showers. Because of a favorable start, the strawberry crop was earlier this year than last. During M ay, 596 carloads were shipped from Delaware, and 294 from New Jersey, as compared with a total of 68 carloads from the two states during the same month last year. B y June 1 more strawberries had been sent from Delaware than during the whole of last season, and good prices were received for the entire crop. The condition of blackberries and raspberries is about 90 per cent of normal. All summer vegetables were planted early, but their growth has been retarded by recent unfavorable weather. A large part of last year’s white potatoes were carried over and are still in the hands of farmers. This has helped to keep the price down to the abnormally low level of about 30 cents a bushel, as has also the placing of new potatoes on the market. It is reported from one county that farmers will give potatoes to any one who will haul them away, and it is clear that this year the acreage planted with white potatoes will prove to be considerably smaller. Fertilizer dealers in this district report that tonnage delivered during the six months ending M ay 31 was as large as for the same period in 1919-1920. Sales of raw materials direct to con sumers are great, and to fertilizer manufacturers less. This is in agreement with the reports of the county agents that many farmers have found that they can buy the ingredients and mix their own fertilizers cheaper than they can buy commercial grades. Consequently, the lat ter has come down in price, being 20 to 40 per cent less than they were a year ago. A large number of the farmers still use the ready mixed fertilizers, especially the 16 per cent acid phos phate. The prices of farm products continue to de cline at a faster rate than the general price level. Growers had been holding some crops for higher prices—particularly wheat, hay and potatoes only to be forced to sell them for far less than they could have received in the fall. Conse- 8 BUSINESS AND F I N A N C I A L C O N D I T I O N S CROP CONDITION REPORT June 1, 1921 CONDITION—PER CENT OF NORMAL CROP AND STATE W in t e r W ACREAGE June 1 1921 May 1 1921 June 1 1920 June 1 10-yr. avg. 93 92 86 77.9 95 96 92 88.8 83 74 88 78.2 87 86 87 81.8 92 93.4 86 89.1 91 93 23 18,023 94 94 92 85.7 88 89 90 87.8 89 90 89 89.5 94 87.1 85 87.6 90 90.4 Per cent of 1920 ESTIMATED YIELD* Bushels June[1921 Dec. 1920 27,318 l'958 E 1,796 578*342 28,665 l'962 1*560 729,503 95 92.8 402 251,289 384 209,365 1,198 ' 85 6 44,829 102 100 100 103.5 42,230 2,796 193 1,404,922 45,825 198 1,526,055 21 7,713 103 95.4 583 190,661 480 202,024 1921* h e at Pennsylvania......................... New Jersey........................... Delaware............................... United States........................ S prin g W h e a t Pennsylvania......................... United States........................ O ats Pennsylvania......................... New Jersey............................ Delaware............................... United States........................ 2,720 B a rley Pennsylvania......................... United States........................ R ye Pennsylvania......................... New Jersey............................ Delaware............................... United States........................ H a y (All)** Pennsylvania......................... New Jersey.......................... Delaware............................... United States........................ 95 96 91 90.3 97 97 94 92.5 89 88 90 84.4 91 92 91 88.6 2,726 1,236 60 71,011 2,656 1 155 60 69,318 80 83 76 85 92 93 87 91.5 85 87 86 88.9 87 84 81 88.3 3,618 521 104 100,977 3,970 598 128 108,233 *000’s omitted. **Yield in tons. FRUITS CONDITION—PER CENT OF NORMAL ESTIMATED YIELD* Bushels June 1 1921 June 1 1920 June 1 10 yr. avg. June 1 1921 December 1920 24 35 16 41.8 86 90 70 79.3 75 79 68 71.8 4,778 1,162 181 107,607 23,937 4,134 1,017 240,442 15 15 2 45.6 75 80 66 64.9 60 71 66 61.5 308 279 8 30,982 1,744 1,056 248 43,697 86 80 63 73.4 69 70 54 67.9 172 170 4 8,880 701 843 287 17,279 A pples Pennsylvania.......................................... New Jersey............................................. Delaware................................................ United States.......................................... P e ac h es Pennsylvania.......................................... New Jersey............................................. Delaware................................................ United States.......................................... P ears Pennsylvania.......................................... New Jersey............................................. Delaware................................................ United States.......................................... *000’s omitted. 17 18 1 43.8 - BUSINESS AND F I N A N C I A L C O N D I T I O N S quently, money is scarce throughout the country districts, and the financial status of the farmers ls low. Fruit growers particularly have been unfortunate. Many borrowed heavily for the purpose of cultivating and spraying their or chards, only to see the crops killed by frost when the prospects for an unusually successful season Were brightest. But the majority of farmers in this section are not dependent upon any one crop, and many of them are optimistic as to the future. One fact is quite evident— a strong feeling exists that purchases by farmers will be as few as posSlble until there is a readjustment of prices. Ofis is particularly true in regard to agricul tural machinery. It is estimated that sales this spring of machinery and implements have been Lss than 50 per cent of normal. Manufactur ers are hoping that buying may come later in the year, stimulated by reductions made pos sible through lower steel prices, and perhaps by better prices for some of the farmers’ prod ucts. IR O N A N D S T E E L 9 of 1,193,041 tons, the daily average production was 39)394> as compared with 39,768 tons, or a decrease of 374 tons per day. This figure, which compares with a daily average output in October, 1920, of 106,212 tons, marks the seventh consec utive monthly decline and is the lowest output recorded since July, 1908, when daily production was 100 tons less than the rate for M ay. A net loss of six furnaces in blast brings the country’s total of active blast furnaces to 90, on June 1, as compared with a total of 318 in blast in October, 1920. The estimate of steel ingot production for M ay, based on reports to the American Iron and Steel Institute, was 1,265,850 gross tons, as compared with 1,213,958 tons in April, and 3,015,982 tons in October, 1920. This is an increase of 2,372 tons, or about four per cent over the previous month. The report of the United States Steel Corpora tion of unfilled orders on the books, as of M ay 3 1, is a further indication of the present inactivity of the industry. The reported unfilled tonnage of 5,482,487 is a decrease of 362,737 tons, the tenth consecutive monthly decrease, and repre sents a total of but slightly more than half the unfilled tonnage of 10,940,465, reported on the same date of 1920. |U N E has been the dullest month ever experiin dustry. Operations are at present averaging less than one-fourth of capacity, and neither This slackening in the rate of decrease of pro purrent deliveries nor new orders are at a rate duction has led to the belief, in some quarters, ln excess of 20 per cent of normal. Brice shading has become universal, and the that the industry is “ dragging bottom” and the present quotations are as low as the prices listed weather is clearing. But that this view is not ln April immediately prior to the attempted necessarily sound is seen in the reports of opera stabilization of prices by the larger producers. tions and production during June, which indi ~ue only favorable aspect of the situation is cate a lower rate than for May. The M ay pro ae fact that stocks are not accumulating, and duction was stimulated somewhat by the fact uat neither producers’ nor consumers’ reserves that the larger independents, before raising their a* sufficiently large to permit of much increase prices to the level announced in April, allowed ie °1 consumption without being replenished. Man purchasers to place any orders desired at the ufacturers and dealers apparently appreciate lower rate. The resulting volume of orders was the causes of the present lull and are resigned augmented by an improvement in the Steel to a period of “ watchful waiting,” until increased Corporation’s business immediately following usiness activity necessitates a renewal of pur the announcement of the new price scale. Al though increased purchasing did not continue chasing by railroads and manufacturers. for more than a short time after the new scale Production totals for M ay declined further ,r° m. the low figures of April. Although the pro- was established, it raised the rate of production ^uction of pig iron for the month of M ay (1,221,- in M ay to a point that it would not otherwise " 2l tons) was slightly greater than April’s total have reached. t enced in the history of the iron and steel 10 BUSINESS AND F I N A N C I A L C O N D IT I ON S Letters from firms in this district indicate that though operations during M ay averaged only about 30 per cent of normal, they declined still more, and during June were probably not greater than the average for the entire industry. Fur ther reductions of wages and working hours have been made. The elimination of overtime pay by the independents has further increased the disparity between the wages of the independents and of the United States Steel Corporation. The latter corporation is paying common labor 37 cents an hour, with overtime for all work be yond eight hours; whereas many independents have reduced the hourly rate to 35 cents or less, with no pay for overtime. Unemployment, nevertheless, is still increasing slowly, and plenty of workers are available even at this reduced rate. The widespread belief among buyers that the recent shading of prices will be followed by even greater cuts, resulting from a possible reduction in freight rates, lower production costs, and strenuous competition for the small volume of business available, has led to a policy of buying only in small lots and for immediate consump tion. Price concessions, which were commenced by the smaller companies, are now being made by the larger independents; and in one instance, —namely, wire products— the Steel Corporation followed the declining market with a cut of $5 per ton. Basic valley pig iron has been sold at as low as $20 per ton, and Birmingham at a figure still smaller. Bessemer is offered at as little as $23. Transactions in steel tonnage have taken place at as low as 2.75 cents for blue annealed, 3.85 cents for black, and 4.85 cents for galvanized, as compared with nominal quo tations of 3.00 cents, 4.00 cents, and 5.00 cents respectively. The plate market is especially dull, sales averaging less than 15 per cent of normal, and offerings as low as 2.00 cents, com pared with a nominal price of 2.20 cents, have been made frequently. Demand from railroads, which usually con sume 30 per cent of the entire output, has not improved and is still practically negligible. Automobile demand has fallen off with declining operations in this industry. Inquiries for pipe from oil interests and for fabricated structural steel have increased slightly since last month, but are far from normal. Exports have not improved, the present totals being less than 4o per cent of the average for 1920. European steel continues to appear in small quantities, in eastern markets, at prices far below domestic quotations, and competition from this source, in the foreign market, is becoming even more severe. Raw materials, especially coke and Lake ore, are abundant and are lower in price. Beehive coke is offered at as low as $2.75 for furnace and $3.50 for foundry, and recent reductions in freight rates on Lake shipments of ore have allowed a lower price on that product. The spot market has prevented cancellations, and collections are still slow and unsatisfactory, especially with the railroads. Allied industries utilizing iron and steel prod ucts reflect in general the conditions affecting the basic industry. Steel construction work is far from normal, although some improvement over last month is to be observed. Machine tool manufacturers have reported no material betterment, and present production is not more than 10 or 12 per cent of capacity. Auto mobile plants are slowing down with the approach of summer, and makers of machinery report conditions unchanged. Locomotive and steel car manufacturers, however, are fairly active, working upon recent orders from Mexico and the Orient. S H IP B U IL D IN G H E sensational decline in shipping and ship' building, which has occurred since the armis tice was signed, has reduced the industry to a condition of far less activity than existed for years previous to the war. Ocean freight rates and ship prices,which soared so rapidly during the war, have dropped with even greater rapidity to a fraction of their former values; and the shipbuilding industry, especially in the United States, is simply marking time* The depression has been almost world-wide in ex tent, but the reaction has been more severe in this T BUSINESS AND F I N A N C I A L C O N D I T I O N S country than elsewhere. A striking illustration ° f present inactivity is seen in the report of the Bureau of Navigation, of the Department of Commerce, to the effect that during April no new con tracts for ocean going vessels were received by American yards. The following table, from the bulletin of the Atlantic Coast Shipbuilders’ As sociation, shows the gross tonnage of ships under construction in the leading shipbuilding countries ° f the world, on March 9i of each of the specified years: 1914 1919 1920 1921 United States........ 149,796 4,185,523 2,573,298 1,102,672 United Kingdom. . 1,890,856 2,254,845 3,394,425 3,798,593 British Dominions. 56,806 303,088 231,259 180,402 Denmark...... 19,641 50,929 114,851 123,272 France. 225,996 109,795 240,225 427,186 Holland.. . 121,152 182,308 366,581 417,693 Italy. 59,285 135,034 355,241 351,639 Japan.... 79,260 254,835 285,676 204,346 Other Countries. .. . 740,362 319,909 380,394 390,963 Total................. 3,343,154 7,796,266 7,941,950 7,086,766 It will be seen from this that war demands forced the United States from a position of comparative obscurity as a shipbuilding country in 1914 t° the position of the leading shipbuilding nation ° f the world in 1919, with a tonnage under con struction equal to nearly twice that of her nearest riyal, the United Kingdom, and more than 50 per Cent of the world tonnage for that year. Since } 91 9j however, the tonnage under construction 111 the United States has declined to a figure little tftore than 25 per cent of the total for that year; whereas Great Britain has regained her former Position as the leading maritime nation of the ^°rid. The total tonnage under construction in the United Kingdom, on March 3 1, 1921, was 0ver three times the total in the United States and over 50 per cent of the world total. It is signific<*nt that the world construction during each of years 1919, 1920 and 1921 is over twice that ° f the year 1914, especially in view of the fact that Present demand for shipping space is considerably ess than the existing supply. The major portion of the domestic tonnage now under construction consists of steam and motor Vessels for the carrying of oil in bulk. Eightytw° oil tankers, of a tonnage of 632,016, are now 11 being built in the United States, and they con stitute more than 57 per cent of the nation’s total construction. Resale ship prices have dropped heavily and reached levels, in many cases, far below prewar values. Numerous sales of ships constructed during the war are reported at figures from 15 to 30 per cent of the cost of construction. This de cline in values has been especially marked in Eu rope, where the sale of German ships, delivered under the reparations agreement, has flooded a market almost void of demand. German yards, in contrast with those of other countries, are in creasing activity, in order to replace the tonnage delivered to the Allies; and this new tonnage is of the most modern type and is being equipped mostly with Diesel engines^ Freight rates have been greatly reduced during the past year, but the reduction has failed to stim ulate shipping. Imports and exports between the United States, Europe and South America are few, as compared with those of previous months, but some stimulation will result, it is believed, from the fall shipments of cotton and grain to Europe. Delaware River shipyards, with the exception of one company which has recently received a fairly large order from abroad, are experiencing the same conditions as the industry in general, and are restricting operations to repair work and to the completion of ships already on the ways. In spite of lower production costs, made possible by wage reductions and much cheaper raw mater ials, the present demand for new tonnage is prac tically nil. B U IL D IN G M A T E R I A L S H E building situation in Philadelphia and many other large cities continues to be domi nated by the strike of building workers. Although employees in highly unionized cities have thus far successfully resisted the 20 per cent reduc tion made by contractors, they have done so largely by accepting work in non-unionized dis tricts, notably in the suburbs of these cities, at a scale considerably below the rate offered by contractors. As a result, suburban residential T 12 BUSINESS AND F I N A N C I A L C O N D I T I O N S building is proceeding at a fairly good rate, but construction of larger city buildings is far below normal and cannot be expected to in crease materially during the present year, as the usual period for commencement of operations has passed. The volume of new construction, in general, although not equal to the expectations of con tractors, has shown a fairly steady improvement in the past few months. Building permits issued by 201 cities during April aggregated $152,000,000 in value, as compared with $124,000,000 in 184 cities during March. The figure for April was about 24 per cent lower than that for the same month of 1920, but the number of permits issued is nearly 14 per cent greater. The report of the Bridge Builders’ and Struc tural Society shows that members had on their books at the end of M ay orders equal to 37^2 per cent of capacity, as compared with 31 per cent of capacity in April. The figure for M ay, 1921, however, is only a little more than half that for M ay, 1920, when a tonnage equal to 61 per cent of capacity was reported. Thus, although the tonnage placed is greater than it has been for several months, it is rather disap pointing when compared with figures for the same month of 1917, 1918 and 1920, and is not much better than the report for 1919, which was a year of greatly diminished construction. That the major portion of this spring’s con struction program consists of houses rather than of factories and office buildings, is indicated by the apparently anomalous increase in the num ber and decrease in the value of building opera tions since last year. Lower construction costs are hardly sufficient to account for this disparity, and the negligible demand for structural steel affords additional evidence that construction of large buildings has fallen off. B u il d in g B r ic k Firms in this district report a materially strengthened demand for building brick since last month, but in spite of this improvement, current sales are far less than they were in the same period last year, and the volume of deliv eries is probably not more than 50 or 60 per cent of that of June, 1920. Part of the present recovery is due to the usual seasonal demand for the completion of houses, but a recent price reduction for Phila delphia brick, from $20 per thousand to $18 per thousand, has also contributed to the increased volume of orders. This last cut has lowered the price of common brick about 33 per cent from the peak price of 1920. The improved demand for building brick, however, has not materially increased produc tion, as the accumulated stocks held by manu facturers are more than sufficient to supply cur rent requirements, at the present rate of con sumption, until well into August. Although many plants are entirely closed down, opera tions in general are between 60 and 70 per cent of capacity. Wage reductions, averaging be tween 20 and 25 per cent, have been made since the first of the year. Raw materials are plentiful, but, as no freight cuts have been made, are not lower in price. Credit conditions have not changed since last month. No cancellations are reported, but collections are only fair. R e f r a c t o r ie s The market for refractories, in contrast to that for building brick, is still exceedingly dull, and demand is even less than it was last month, d he situation of course is largely dependent upon conditions in iron and steel, and no material improvement may be expected before a revival occurs in that industry. Prices are merely nom inal, and although they have not been reduced, it is doubtful whether price-cutting alone would stimulate business to any considerable degree. Operations are at an extremely low ebb? many of the plants being closed and the remain der running at less than 20 per cent of capacity* Although manufacturers’ stocks are not large at the present time, there is no incentive t0 replenish them; and since steel plants in general? with the exception of the Steel Corporation units? have very small reserves, any large increase 111 the activity of steel mills would result in tFj immediate exhaustion of both consumers’ an BUSINESS AND F I N A N C I A L C O N D I T I O N S producers’ stocks. Such an occurrence would of course bring a prompt renewal of business. Unemployment and wage reductions have naturally been quite general in the industry. Credit conditions are unchanged and collections are reported as being fair. G lass Little change has occurred during the past yn°nth in the status of the glass industry, to Judge by reports from firms in this district. The market for plate and window glass is still Egging, although a recent quickening has been noted in the demand for window glass. Owing to the peculiarities of the tank method of manu facture, it is impossible for a glass plant to operate at a rate much less than capacity; hence the practice has been to operate for a few weeks and then to close down while awaiting depletion of stocks and accumulation of orders. The present demand probably does not average more than 30 per cent of normal, and practically no plants ln this district are running continuously. More0yer, recent slight improvements in demand, Welcome as they are, have not been sufficient t° mduce manufacturers generally to recom mence operations. Similar conditions are reported in the markets or plate glass, wire glass and table glassware, and it is doubtful if manufacturers of these goods are operating at more than 30 or 40 per cent of capacity. The general situation is a reflection 0 building conditions, and as buildings now under construction reach completion later in the eason, it is expected there will be an increased call for window glass, plate glass and wire glass. Production costs have declined somewhat u.ring the present year, but no change in the PriCe of finished products has been made in the Past month. Employment is intermittent and e average unemployment is rather high. . ages have been reduced about 25 per cent, 111 general, since last year. Credit conditions are fairly satisfactory, no material change being recorded. L um ber k The lumber trade is still largely dominated y the freight rate situation. Rates are so high 13 at present as to prevent profitable shipment of any but the most expensive kinds of lumber. In many of the lower grades, the rate is equal to, or greater than the mill price, and producers are forced to sell these at a sacrifice. This condi tion has had the effect of closing over half the hardwood mills, and of seriously curtailing oper ations in the Southern pine district and the Pacific northwest. Most mill owners who have continued production, claim that at present prices they are doing business at a loss, and that their only object in operating is to keep their organizations intact for more prosperous times in the future. On account of high freight charges, southern pine is encountering severe competition, in eastern markets, from Douglas fir. This has been shipped by water from Pacific ports, through the Panama Canal, more cheaply than it could be shipped by rail from the South. Lumber dealers in this district report a great improvement in demand during June. A few firms received a volume of orders during the first week that surpassed the total for the entire preceding month. Practically all of this additional busi ness, it seems, is in structural lumber, as hard wood dealers who supply furniture manufacturers make no mention of increased activity. Not withstanding this recent betterment, however, sales are not more than 40 per cent of normal in Philadelphia, and are less than 70 per cent of normal throughout the district. Philadelphia yards are in general well stocked, but dealers outside of the city have been compelled to re plenish their reserves. The cancellations from which the trade suf fered last winter are no longer a source of diffi culty, but collections are slow. P aints The paint market is approaching its usual seasonal period of inactivity, which covers the months of Ju ly and August. Demand and sales have slackened somewhat since M ay, but not more so than had been expected by the trade. As not more than 35 per cent of the total out put of paint is used in new construction, this industry has been less affected by the slump in building than were manufacturers of other 14 BUSINESS AND F I N A N C I A L C ON D IT I O N S building materials. In fact, some aspects of the business readjustment have actually been favor able to paint dealers, as house painting was stimulated in many cases by unemployment and by the fact that many people have been com pelled to purchase houses which they formerly rented, and were therefore interested in having them put in good condition. Wholesale and retail prices have been prac tically stationary during the past month, al though the market for linseed oil, the principal raw material, has stiffened slightly. Manu facturers’ stocks are somewhat depleted, as is usual at this season of the year. The slack months of Ju ly and August, December and January are devoted largely to the accumulation of reserves, which are sold and delivered during the intervening periods. Operations and em ployment are at a rate very close to capacity and they will probably increase somewhat during the next two months, in preparation for fall deliveries. Credit conditions are quite satisfactory, col lections usually being reported as very good. G as and E lectric F ix t u r e s Little change has occurred in the gas and electric fixture business during the past month, but dealers expect an augmented demand as houses now under construction approach com pletion. Although raw materials are quite plentiful and are obtainable at slightly lower prices than prevailed last month, the charges for finished products are practically stationary at a level of about 20 per cent lower than the peak prices of last year. Certain dealers, however, are offering discounts from regular quotations when large quantities are ordered. Wage reductions have been fairly general, and employment and operations are curtailed to about 75 per cent of normal, in some cases to much less than this. As customers are purchasing from hand to mouth, there are few cancellations. Collections, however, are still moving slowly. W holesale H a r d w a r e The present industrial situation is having its effect on the wholesale hardware trade. Sales in M ay showed a decrease for the first time in many months. Firms dealing in agricultural implements report a further decline in June, but demand as a whole continues to be fair. In quiries from the larger buyers are increasing, but purchases are still being made in small quantities and for immediate requirements onlyCompared with last year, the decrease in sales is quite marked, but this is partly attributable to the sharp decline in prices and to the abnor mally large volume of business done a year ago. Prices are still tending downward, and further reductions on certain articles are not improbable if iron and steel prices continue to fall. Supply is ample and immediate delivery is possible in nearly all lines. Collections are only fair, and although the total of accounts outstanding at the end of May was slightly less than that at the end of April, the ratio of this figure to net sales for May shows a material increase. The following table is an indication of the present sales and credit conditions as reported by hardware dealers in this district: COAL A N D C O K E B ituminous D A IL Y production of bituminous coal for the four weeks ending June 4, remained practi BUSINESS AND F I N A N C I A L C O N D I T I O N S cally stationary, averaging slightly less than 1.340.000 tons, according to estimates of the U.S. Geological Survey. The uninterrupted decline ln output from a daily production of nearly 1.900.000 tons for the week ending January 1, to approximately 1,000,000 tons for the week ending April 9, was followed by an equally rapid increase during the five weeks following, which brought Production to the present level. But this output ls still considerably below the average for the same period during each of the past four years. The following table shows the total production, ln net tons, during the first 13 1 working days of the last five years: IS The seriousness of the present situation is ap parent from the fact that 1921 production, to date, is not only very considerably lower than that for the same period of 1917, 1918 and 1920, but is 7 per cent lower than that of 1919, when a mild win ter, industrial curtailment and heavy stocks in the hands of consumers all combined to restrict mine operations. The present restricted pro duction points to a much more drastic industrial readjustment than was experienced in 1919, but consumers’ reserves, with the exception of those of public utilities, are materially lower than were stocks held during that year. Export demand, which increased as a result of the British coal miners’ strike and was partly re sponsible for the greater output of the past month, has dropped considerably although the strike con tinues, for business depression in Europe is so general that coal consumption there is only a fraction of normal. The heavy shipments of coal W h o le s a le : P r ic e s A m t h r a c it e C o a l vs . G e m e r a l P r ic e s iN D E xiia Do llars p e r Ton 215 1 4 .6 4 / 250 r k e v :------ A ll Commodities Price Imdex Bureau o r Labor _ _ _ A nthracite CoalW holesale Price B ureau o f Labor 1913 * IOO 225 200 / ------- 7 - ■vy \ / ~ 1 3 .3 1 \ V \ k/ V 1 1 .9 8 \ \ \ V ' 1 0 .6 5 \ 175 / / / - f ----1 / 150 1 9 .3 2 \ \ 7 .9 8 1 125 6 .6 5 S' 100 5 .3 2 75 3 .9 9 50 2 .6 6 25 1 .3 3 O O A pr A ug 1915 1914 1915 1916 Dec Apr* A u g Dec A p r A u g Dec A p r A u g 1917 1918 1919 1920 Dec A p r Atxj 1921 Dec 16 BUSINESS AND F I N A N C I A L C O N D I T I O N S to the Great Lakes, consequent upon the opening of navigation, are also declining materially, owing to the fact that the requirements of the northwest are slight and that stocks are accumulating rapid ly at the Head-of-the-Lake docks. Public utilities have taken advantage of the present low prices to increase their supplies con siderably, but industrial consumers and railroads are buying for immediate requirements only. The expectation of an early lowering of freight rates and of a possible reduction in miners’ wages is, it seems, the chief reason for this hesitation to buy in quantity and for future needs. Prices have weakened materially during the past month, and virtually all business is spot. The C oal A g e index of spot prices for soft coal de clined during the week of June 4 from 100 to 96, which is the lowest average recorded during the past two months. Consumers expect lower prices, and producers and dealers are appar ently satisfied to deal in spot coal only, as they are confident of a higher market in the fall and winter. A nthracite C oal Dealers in this district report a reduced demand for all prepared domestic sizes of hard coal. A midsummer reaction was to be expected, but the trade believed that the modest buying of the early spring presaged for this year a longer buying season than usual. Steam sizes, of course, still remain a drug on the market and are show ing, if anything, less activity than they dis played last month. Retail prices of all sizes and company mine prices have remained stationary, most dealers having refrained from announcing the usual monthly increase. Newspaper agitation and the congressional investigation of the industry have tended to strengthen the widespread public belief that present prices are inordinately high and will be materially reduced by fall, and the expectation that a freight rate reduction will follow the recent railroad wage reduction is a further important deterrent to purchasing. But though present prices of hard coal are nearly double the prewar quotations, it is apparent that they are largely, if not entirely, due to greatly increased produc tion costs. The chart on page 15 shows monthly com pany mine quotations of anthracite coal com pared with the monthly index number of the Bureau of Labor, which represents the composite price of 327 commodities. It will be seen that, although anthracite prices rose much more slowly than the general price level during the years of the war, the present price is relatively higher than the price of other commodities. The pro duction costs of hard coal, however, have not been noticeably reduced during the past year, since the principal item—wages—is determined by a contract that does not expire until April, 1922. The rate of production for the present year, in general, has been much higher than that of 1920; the entire production to June 4 being 39,146,000 net tons, or approximately 2,000,000 tons higher than last year’s total of 37,147,000 tons for the same period. C oke The beehive coke industry has reached a state of almost complete paralysis. The total estimated production for the week ending June 4 was only 62,000 tons, or 7,000 tons less than the aver age daily output for the corresponding week of 1920. The total production for the four weeks ending June 4 was 269,000 net tons, as compared with 1,610,000 net tons for the same period of 1920, and the entire production to date is only one-third of what it was up to this time last year. The output of by-product coke is at a much high er rate than that of beehive, because the demand for gas and other by-products makes operation of by-product ovens profitable in spite of the fact that the differential in freight rates favors beehive coke. Conditions in the Connellsville district are the worst in its history, and the ovens of the largest producer, a Steel Corporation subsidiary? have been entirely shut down. Unemployment, naturally, is very great in the industry, and those few firms that are still operating are paying much lower wages. Prices have reflected the almost total absence of demand, and concessions have been made on almost all orders of considerable size. There is no contract business, and spot furnace coke is get1' BUSINESS AND F I N A N C I A L C O N D I T I O N S erally listed at $3, though prices as low as $2.75 have been quoted on some orders. Foundry coke ls still offered at from $3.75 to $4, which indicates that the demand for this is greater than for the blast furnace fuel. Credit conditions are unchanged. No cancel lations are reported, but collections are poor. PETRO LEUM C rude O il pj’ V ID E N C E is plentiful that the petroleum in■ ^du stry is passing through the same period of awkward readjustment as has embarrassed other ^dustries during the past year. The rate of consumption of crude petroleum has lessened considerably in the last six months, and this in Bie face of increased domestic production and greatly increased importation from Mexico, ^■ he total domestic output for the first three Months of 1921 was 114,003,000 barrels, as compared with 102,328,000 barrels for the same Period of 1 920, and the imports from Mexico are estimated at nearly 6,000,000,000 gallons, or about twice the total of a year ago. Such a condition of affairs has naturally brought about a raPid accumulation of stocks by producers and Dpe lines, and has given rise to a widespread Price-cutting campaign to induce purchasing. Pennsylvania crude oil, for example, declined during the first four months of 1921 from the high Point of $6.10 per barrel on January 1 to $3 per parrel on April 1. Following a slight reaction during April, the price has again dropped and on J 4 was quoted at $2.75 per barrel at the well, qhc present quotations of Eastern crudes, as shown in the following table, though they are less than half the highest prices of 1920, are still conSlderably above the pre-war level:1 May 19, 1921 Pennsylvania... . Corning Cabell Somerset Somerset light. . . . June 1. 1921 June 16, 1921 33.25 2.15 2.06 1.85 2.05 33.00 1.90 1.81 1.60 1.80 32.50 1.40 1.31 1.10 1.30 1 ue same tendency toward lower levels is ob served in the other producing fields of the United tates and in foreign fields, as well. 17 The rapid accumulation of stocks by dealers has become a serious factor in the situation. Certain pipe line companies have been forced to curtail their purchases because of insufficient stor age capacity, and some producers in the southern fields are demanding governmental restriction of output. Should the present rate of production and consumption continue for the remainder of 1 9 2 1, a contingency that is hardly probable, it is estimated that there will be a surplus of over 50,000,000 barrels of crude oil, at the end of the year. R efined P roducts Much the same demoralization as exists in the crude petroleum market is observed in the mar kets for refined oil products, with the exception of gasoline. The demand for gasoline continues to be fairly satisfactory, especially in the middle west, where the seasonal effects of automobile and farm tractor consumption are more marked. In eastern markets dealers report a tendency toward sluggishness, the demand being somewhat less than it was in the same period last year. This, together with the fact that production in the first three months of this year was over 20 per cent greater than in the corresponding period of 1920, has brought about rather heavy accumulation of stocks, especially in the east. The price of gasoline, though it has followed the downward trend of crude oil prices, has not de clined to so great an extent as these. It is still quoted in steel barrels, at least nominally, at 26 cents, as against 31 cents in January. This price has been frequently shaded, however, on orders of considerable size. In the case of the other principal refined prod ucts, fuel oil, kerosene and lubricating oils, the tendency toward dullness has been much more pronounced. Kerosene stocks are accumulating rapidly, and price concessions have failed to pro duce any stimulation of consumption. Refiners are offering kerosene at 14 cents in carload lots, but practically no business is being done at that figure. Exports have declined to about 90 per cent of the volume for the same period last year, and domestic consumption continues to fall off as new methods of lighting are introduced in 18 BUSINESS AND F I N A N C I A L C O N D I T I O N S agricultural regions and as kerosene is more and more displaced by gasoline for fuel purposes. The lethargy in fuel oil and lubricating oils is more directly a reflection of the general business and shipping situation. Fuel oil comprises near ly 5o per cent in volume of the yield of domestic refineries, averaging 16,000,000 to 18,000,000 barrels per month. In addition to this, the United States imports about 80 per cent of Mexico’s monthly production of approximately 15,000,000 barrels, with the result that this country controls a very large proportion of the world’s output. Practically 90 per cent of this amount is con sumed by oil-burning ships and by industrial firms in the United States, and the present stagnation in shipping and in many manufacturing industries has greatly restricted the market for this product. Dealers’ reserves are accumulating rapidly in spite of attempts to stimulate buying by the cut ting of prices. The general tendency, however, —manifested by ship owners, railroads, and in dustrial plants—is to use fuel oil more extensive ly, and it is believed therefore that the present situation is merely temporary. Lubricating oils, of course, are likewise affected by industrial curtailment, as the greatest demand for these is from textile manufacturers, metal working plants, and the like. Exports of lubri cating oils have also slackened considerably, aver aging only about 70 per cent in volume, as com pared with last year. Most firms in this district report declining sales, accumulating stocks, and, recently, a consider able curtailment of operations. This has been accompanied, in many instances, by large reduc tions of working forces and by wage cuts of from 20 to 30 per cent during the present year. Few cancellations are being made, but collections in general are reported as only fair. to increased popularity of ginghams and to diffi culties incident to their manufacture. The steady position of print cloth goods, in contrast with other gray goods, is accounted for by the increase in favor of percales and draperies. The quietness of the mid-season period is fur ther accentuated by the uncertainty of labor con ditions in southern mills. But the stopping of 500,000 spindles by the strike in South Carolina will reduce production and permit the distribu tion of stocks that had been rapidly accumulating. Contrary to the expectations of jobbers, the light trading in June did not result in lower prices generally. Colored cottons, however, which oc cupied a strong position in southern markets, have recently receded, and in many cases price concessions averaging 10 per cent in value have been made to expedite the movement of these stocks. This unusual situation is due to the curtailment of production, and to the fact that mills that are operating have sufficient orders to carry them well into the fall. The market in sheets and pillow cases is sold up, and manufacturers are refusing to promise deliv eries before August. In strong contrast with the sharp demand for sheetings and ginghams is the lack of interest in ducks and drills. Buyers re fuse to pay the prices asked by producers, even though the quotations are very close to the cost of manufacture. C otton Y arns Unchanged prices and a slightly diminished volume of sales are reported by the spinners of cotton yarn. The uncertainty of the future market trend is exemplified by the refusal of both buyers and spinners to enter upon contracts far more than two months in advance. Carded yarns have been receiving little atten tion, and the supply is more than adequate f°r present requirements. Combed yarns are slight' COTTON ly stronger than carded, although the demand f°r certain numbers is decreasing. Several of the C otton G oods combing yarn mills have recently closed down, C O N SER V A T IV E tone prevails through awaiting the accumulation of a satisfactory vol out the cotton goods market. Certain ume of orders, and this has made the supply and demand more nearly coordinate. It has specialty styles, such as ginghams, are active; several buyers being unable to secure the quanti resulted in some slight competition for specif ties they desire. This dearth of material is due combed yarns. A B U S I N E S S AND F I N A N C I A L C O N D I T I O N S Spinners are determined not to accept further reductions in price, as they claim that production costs are higher than present quotations. Should further reductions in values occur, spinners -in the south fear they will be forced to close temporarily. The expected revival of business in tire yarns has failed to develop. The large users of these are decreasing production, and it is not expected that their influence as buyers of yarn will be Noticed for some time. Credit conditions force the smaller manufacturers to buy for immediate use only, although their yarn stocks are depleted. R a w C otton Continuation of British labor troubles, favorable weather in the South, and the higher crop estimates have tended to restrain increases in raw cotton values. Recent reports indicate that there is a possiuflity of adjusting the wage difficulties between textile workers and mill owners in England. However, any buoyant effect that this might have upon the market is counterbalanced by the butters’ strike, as some English mills are closed are running on part time because of lack of fuel. The government estimate of crop conditions on M y 25 is that the present crop is 66 per cent of la uormal. This figure is 10.7 per cent below the ten year average for this period, but it is also 3.6 Pcr cent above the estimate of last year on the Corresponding date. Moreover, probabilities ave been enhanced by the favorable weather Prcyailmg through the cotton belt since May 25. the Bureau of Census reports a consumption 0 .439:884 bales of lint cotton in M ay as compared W 408,882 bales in April, and 541,377 a vear lth *g°- This is an increase over April of 31,002 ales and over March of 1,951 bales. Stocks of cotton, exclusive of linters, and ac1Ve spindles were as follows: May 31, 1921 Apr. 30, 1921 May 31, 1920 ^ manufacturing establishm ents (bales)....... Af'^are^O Ses (bales) . . . U spindles (no.) .. . 1,2 7 9 ,3 14 4 ,7 39 ,8 5 1 3 2,63 1,05 1 1,3 16 ,0 15 5,028,631 32,535,725 1,698,833 2,586,868 34,069,744 19 WOOL W ool C loth O NDITIONS in the woolen cloth market have undergone little change since last month. When the fall lines were opened early in M ay, the larger mills adopted the conservative policy of selling for only three months in advance. As a result of this, few cancellations have oc curred and buyers are finding that the weavers, in most cases, are unable to accept duplicate orders. Mills that are in a position to accept such orders are making slight advances in price on material to be delivered in August and September. Staples have been gaining in importance since the opening of the spring season. Serges, espe cially for men’s wear, are being produced by cer tain manufacturers, who, because of difficulties of production, have discontinued the weaving of fancy back overcoatings. The manufacture of herringbones and pencil stripes has reached such proportions that dealers anticipate that the de mand for these fabrics will decrease as soon as dis tribution becomes more thorough. Requests for tweeds are increasing for use in specialty goods and sport suits. In general, the public is interested in staple goods of the better quality, at a medium price. Inferior goods have received little attention from the buyers, even when representing good values, and manufacturers feel that to increase prices on quality goods would restrict future purchases. W ool and W orsted Y arns Inquiries for yarns have been numerous, but actual orders placed show very little increase over the business done in May. Weavers are work ing upon orders received in the spring and to complete these contracts are occasionally find ing it necessary to purchase yarns in small lots. The speculative element is entirely absent in the yarn market, as purchases are being made only when the amount of the order has already been covered by the sale of a corresponding amount of finished cloth. This practice is favored by most operators as a safer and more satisfactory 20 BUSINESS AND F I N A N C I A L C O N D I T I O N S method of conducting business during the present period of readjustment. Knitting yarns are recovering somewhat from the marked inactivity of the early spring months. The retail season in lightweight knit goods, which is just opening, is expected to be a good one; and if the anticipated volume of business is realized, the knit-goods yarn market will be materially strengthened. Specialty yarns, notably those used in hosiery and light knit underwear, have been the subject of numerous inquiries, which have not, however, resulted in the placing of extensive orders. Prices remain unchanged, except in knitting yarns, which have been reduced from io to 15 per cent since contracts were placed early in the year. As a result of these reductions, knitters have shown no hesitation in cancelling orders— at least, in cases where spinners have refused to adjust contract prices accordingly. R a w W ool The first three weeks in June have been marked by a continuation of the slow but steady gain in the deman 1 for raw wool, which has been a fea ture of the market since the first of the year. The sales made, though not large in number, were of sufficient size to prevent any noticeable decrease in values. Importation of fine wools has been virtually stopped by the passage of the Emer gency Tariff. However, the effect of this had already been discounted by the trade, and its re sults in strengthening the market were negligible. Mills are actively engaged in producing cloth, but wool dealers do not anticipate extensive pur chases until the next lightweight season opens in August. The latest report of the Bureau of Markets re cords a total wool consumption of 144,830,000 pounds for the first four months of 1921, as com pared with 234,537,000 pounds for the same period of 1920, or a falling off of 38 per cent. An encouraging feature is noticed, however, in the decreasing disparity between recent months and the same months a year ago. The loss in consump tion, on a percentage basis, during each of the first four months of 1921, compared with the same months of 1920, was as follows: January, 58 per cent; February, 43 per cent; March, 30 per cent; April, 20 per cent. The subjoined table shows the wool consump tion for the first four months of the years 1918 to 1921, inclusive, in thousands of pounds: 1921 1920 1919 1918 January.............. February............ March................ April.................. 26,300 31,449 40,828 46,253 63,059 55,247 58,344 57,887 32,573 23,186 29,320 39,159 53,827 52,890 58,878 57,651 Totals............. 144,830 234,537 124,238 223,246 The new clip is coming into the eastern market slowly and, for the most part, on consignment. At a recent sale in Texas, transactions are report ed at about 24 cents for the best wool. S IL K G E N E R A L improvement in the primary raw silk markets has been followed by increased activity among manufacturers. Hosi ery mills are heavy purchasers, and it is becom ing difficult for them to obtain present, or even short-time deliveries on silk suitable to their needs. Broad silk manufacturers are still oper ating conservatively, but they report a steady gain in business. The thrown silk market has strengthened since the first of June. Throwsters report that organine double extra has recently been quoted at $8.15, and note advances in other grades. L is felt that this situation will prevail for some time, as silk weavers are sold ahead on produc tion and have but small supplies of raw material on hand. Though actual fall buying has just begun, the business of silk goods manufacturers thus far has been satisfactory. Crepes and satins are the prominent fall fabrics, but the retailer is distrib uting fall orders over a wider range of styles than he has been in the past. Manufacturers, in general, feel that the present price of raw silk is unjustifiably high, and especi' ally in comparison with the price of raw materials for other textiles. It is true that a scarcity ot silk for immediate delivery exists in this country? but there are adequate supplies in the primary A BUS I NESS AND F I N A N C I A L C O N D I T I O N S Markets. Syndicate holdings in Japan are over 4°)Ooo bales, and 35,000 bales are held by interests not connected with the Imperial Raw Silk Company. Hence, manufacturers are con vinced that quotations will be reduced by fall, and it is this attitude that is largely responsible for the conservative purchasing of the present time. The following figures, compiled by the Silk Association of America, denote imports and consumption for the first five months of the cur rent year: 1921 January........ February. . March. . . April... M ay. Storage first of month bales 44,536 31,859 27,928 16,386 20,038 Imports bales 9,499 12,794 14,043 32,552 27,712 Total bales 54,035 44,653 41,971 48,938 47,750 Storage end of month bales 31,859 27,928 16,386 20,038 20,541 Con sumption bales 22,176 16,525 25,585 28,900 27,209 It is seen from this that as between April and lay there was a decrease in imports of approximately 5,000 bales, and a loss in consumption of over 1,000 bales. The amount of silk in ware houses is practically unchanged. H O S IE R Y J n c r e a s e d demand for some lines, at advanclng prices; fewer inquiries for others, with Quotations at new low levels; and the reappear ance of distress stocks, were the outstanding evelopments in the hosiery market during the rst three weeks of June. Practically no business 'Vas transacted in low-end cotton hosiery, and to lspose of the large accumulations of these goods, tftnnufacturers offered them at prices below any recorded since the inception of the readjustment Movement. . ^ decided contrast with this condition of affairs ts afforded by the situation in the full-fashioned Sl k hosiery market. There have been insistent CQuests for these goods, but with the prolonga!0n ° f the strike in Philadelphia, and the fact at many mills were sold up months in advance, ese could not be satisfied. Jobbers whose Mocks had been totally depleted offered premi 21 ums in order to obtain immediate deliveries, and manufacturers, though they have not taken ad vantage of the shortage to exact premiums, have, as is natural under the circumstances, increased regular quotations. Unable to secure supplies, and unwilling to encounter a like experience dur ing the fall season, buyers have ordered well in advance, and many mills are booked to capacity until the first of the year. In seamless silk lines, there is likewise excep tionally active trading, but it is confined to im mediate delivery, and in large measure is the result of the shortage in full-fashioned hosiery. Orders for future delivery have been placed in limited quantities only, for it is realized that if a settle ment of the strike in the full-fashioned mills is effected, manufacturers will soon be able to sup ply these goods in abundance. Since the demand for seamless silk lines is confined almost entirely to immediate shipment, and since the supply is insufficient to meet it, prices are considerably higher, especially in novelty lines. Although staple cotton hosiery has been par ticularly inactive, considerable business has been done in distinctive specialty numbers. Manu facturers who have introduced new goods have found a ready market for them, and are operating at full capacity. OPERATIONS IN THE HOSIERY INDUSTRY May, 1921 compared to April, 1921 May, 1921 compared to May, 1920 + 8.8% - 57.1% - 10.9% + 6.6% + 103.3% + 39.8% - 53.6% - 51.4% +450.9% - 27.6% + 19.5% — 77.0% - 9.3% + -6% — 28.1% + 16.1% - 64.4% — 42.8% +341.9% — 35.3% F ir m s se l l in g to th e w h o le sa l e t r a d e : Product manufactured during May................................. Finished product on hand May 31............................. Raw materials on hand May 31 Orders booked during May. . . . Unfilled orders on hand May 31 F ir m s se l l in g trade: to the r e ta il Product manufactured during May................................. Finished product on hand May 31............................. Raw materials on hand May 31 Orders booked during May. . . . Unfilled orders on hand May 31 22 BUSINESS AND F I N A N C I A L C O N D I T I O N S U ND ERW EAR A SH O ES A N D L E A T H E R S hoes S E E M IN G L Y anomalous situation existed HOE manufacturers have been kept busy in the lightweight underwear market during filling late spring orders, the volume of this June. There was a shortage of goods for spot business proving to be much larger than seemed delivery, and the demand was particularly active, probable in the earlier part of the year. As a rule, but at the same time numerous cancellations orders direct from retailers for the fall trade have were received. These were practically all due been entirely satisfactory to manufacturers, al to the failure of manufacturers to meet shipping though jobbers in this district have been holding date stipulations. There is a shortage, it is back and have placed very few orders for fall true, but the season is rapidly drawing to a close goods. Both staples and novelties are selling and the goods are needed for immediate use. well. An increasing demand for black shoes is The receipt of underwear some weeks hence noted, including a strong revival of interest in would avail jobbers but little in meeting the patent leather in various styles. The advance demand for the present season, and as they believe in leathers and the hardening of prices for cotton that next season’s prices will be lower, they are goods have convinced many buyers that shoes unwilling to carry over stocks. will be no cheaper in the near future, and have This attitude, however, is by no means uni stimulated business for the fall. Retail trade has been distinctly good. Even versal, for a number of buyers have already men’s wear, which has lagged for some placed orders for the spring of 1922. Under normal conditions this is a not uncommon prac time, shares in the improvement. Wholesalers, tice at this time of the year, but in view of the too, have enjoyed a good business and have re extreme cautiousness of recent months, these duced their stocks of low shoes to small propor tions. They have been forced to decline many orders are significant and most encouraging. orders for prompt shipment because their stocks As a class, however, jobbers are very conserva of the goods ordered have been exhausted, and it tive, especially as regards heavyweight under has been impossible to secure additional supplieS wear. Normally, orders for these goods should from the manufacturers in time for the spring long since have been placed, and mills should trade. The above noted hesitation on the part be operating at total capacity. But reports of the jobber to buy for the fall trade is due to his received indicate that production, at an average, having in stock a considerable quantity of staple is only 40 or 50 per cent of capacity. Practically lines from last year. He expects that the busi all jobbers have made some commitments, but ness in novelties will be much the same as it was these have been limited in size. With manu last spring; that is to say, that it will begin late facturers refusing to produce for stock, and and continue through the season with orders for with buying restricted as it is, each succeeding prompt shipment. After Ju ly 4, it is believed? week brings the situation closer to that of the jobbers will display a keener interest in fall busi season for light weights in the spring of 1921. ness. Raw stock in the higher grades of calf and kid is decidedly scarce. The increase in demand for CONDITIONS IN THE UNDERWEAR INDUSTRY patent leather, coming after the long period May 1921 May 1921 compared to compared to manufacturing inactivity in this line, has found Apr. 1921 May 1920 very little on the tanners’ or dealers’ shelves. Product manufactured during May .... + 1-7% - 28.6% In this district, no change has occurred in labor Finished product on hand May 31...... + 3.3% + 36.0% conditions. Some manufacturers complain Raw materials on hand May 31.......... -39.9% - 43.9% Orders booked during May................ -15-6% + 142.6% the increasing difficulty of competing with man Unfilled orders on hand May 31.......... -11.7% - 49.4% ufacturers in other districts, where reductions in wages have been effected. S B U S I NE SS AND F I N A N C I A L C O N D I T I O N S An item of unusual interest in the statistics compiled by the Department of Commerce is to the effect that 806,827 pairs of men’s shoes, val ued at $2,341,399, were shipped to Russia in Eur°pe, during April. The only cancellations reported are on account °.f tate delivery, and are few in number. Collec tions, except in some portions of the southern states, are generally good. L eather The demand for all leathers for shoe uppers has been good, although some slight falling off from the very large business of last month is noted. However, this may be accounted for by the fact fhat some shoe manufacturers covered their needs last month, and also that in nearly all in stances the end of June is stock-taking period, and the desire is to keep down the inventory as low as Possible. The export demand has not kept pace W lth the domestic, but foreign markets have taken some goods. In Europe competition is very een with Germany. A few foreign sales of pat, side leather and of glazed kid have been made, ut in unimportant quantities. Indeed, some Manufacturers who have good foreign connect!°ns and who usually share in the export business ave had no inquiries. Sole leather is in very much the same position as the upper leathers above noted. There have een large sales, especially in the higher grades, a. < the demand has now slackened off somewhat, n jt though sales are continuing in considerable volH?16’ Belting and harness leathers have not s ared in the revival of trade. Stocks are large demand is small. . trunk and bag manufacturers report a steady lrnPr°vement in volume of business. Prices this jrear, especially in leather goods, are materially ower than a year ago, and business generally is ln a healthy seasonal condition. In fancy leather goods, there is the usual be^een-season dullness. Factories are busy pro. ttdng stock for the fall trade, for which advance n ications are satisfactory. Collections in all the leather trades are good in most localities. R a w S kin s and 23 H ides The available supply of goat skins of desired quality, both on the spot and in nearby positions, has been bought by tanners, and fair quantities have been procured from markets of origin. These purchases have resulted in rather sharp ad vances, and some tanners have withdrawn from the market, hoping that the price of raw skins will ease off. Calf skins, after an almost vertical rise from 13 cents to 23 cents, have dropped to 18 cents. Hides, after a similar advance, have also declined. The tanners of calf skins have tem porarily ceased purchasing, and tanners in all lines are fearful that the continued advance in raw stocks will force such an increase in the price of leather as will retard trade considerably. The hide and leather figures for April, prepared by the Bureau of the Census, show a decrease in stocks of hides of 5 per cent; of horse hides, colt hides, etc., 4 per cent; of goat skins, io }4 per cent; and an increase of calf skins of 6 per cent. P R IN T IN G A N D P U B L IS H IN G H E important factor in printing and publish ing circles, since May 1, has been the strike of the compositors, pressmen and press feeders. The original causes of the strike date back two years to a conditional promise, made by the employing printers of Philadelphia to their workers, that a 44 hour week would be granted M ay 1, 1921. The employers claim that the conditions of the promise have not been fulfilled and that a reduction of hours at this time is uneconomic and contrary to the public interest. The compositors walked out on M ay 1. The Philadelphia pressmen did not obey the order of the national association to strike because of a long standing disagreement between the two organizations. About this time,however, a court decision restored harmony between them, and on M ay 6, the pressmen, together with their feeders, walked out of all plants except those of two large magazine publishers, and out of these on M ay 16. Whatever may have been the origi- T =5 24 BUSINESS AND FINANCIAL nal cause of the strike, both sides now agree that the issue is whether there shall be open or closed shop in the printing plants of Philadelphia. At first, relations were comparatively friendly, but the fight is becoming more bitter, and recently some cases of violence have been reported. The effect of the strike upon business has been comparatively slight, because of the extremely dull state of the industry. The general apathy in the business world to-day is naturally re flected in the printing and publishing trade. Advertising of all kinds has been materially cut down, and this affects both magazine publishers and commercial printers. Cata logues are reduced in size, are less elaborate, and few new editions are being issued. There seems to be no agreement among reporting firms as to whether the decrease in business has been greater in job printing or in the larger work. A report from a reliable source places the de mand for printing and publishing at approxi mately 60 per cent of capacity and considers that three-fourths of this work is being done. In other words, the shops are running at 45 per cent of capacity. Some open shop plants and others which have granted the 44 hour week have been able to continue normal operations. Many customers, in sympathy with the employ ing printers, are withholding orders or are not demanding immediate fulfillment, or perfect workmanship, while the trouble continues. The employers claim that except during the first two or three weeks in M ay the shops have been able to fill satisfactorily most of the orders received. They say that labor is steadily being recruited; that some of the strikers are returning and workers have been brought in from all over the country; that operations are being increased every day, and that it is expected the plants will soon be able to handle all business offered. On the other hand, union officials contend that the plants are not operating at more than 25 per cent of capacity. They admit that workers are being recruited, but few of them, they hold, are from the union ranks and most of them are unskilled, so that the work being done is not of standard quality. In spite of recent inactivity, prices for printing and publishing work have not been decreased CONDITIONS to any appreciable extent, except in certain competitive lines in which charges are deter mined by manufacturing costs. These costs are lower only in so far as they are affected by the raw material market, as labor, power and indirect expenses have shown no marked decline as yet. Collections are reported as improving and may be described as being fair to good. PAPER T H E continuation of the strike in the printing and allied trades is being felt in the fine and book paper market of Philadelphia through a paucity of orders. Operations in the printing shops were gradually increased during the month as non-union workers were employed, but the in dustry is not running at more than 45 per cent of normal. Purchases of paper by printers, al though increasing weekly, have been curtailed to a greater extent because of uncertainty regarding the future. Orders are placed for only so much as is actually needed to meet present require ments. Printers will buy in small lots at long rate rather than purchase quantities larger than are needed to fill orders on hand. It is difficult to determine to what extent dull ness in the fine paper market is due to the print ing strike, and how much to other factors. A similar inactivity exists in the demand for coarse papers. A strike in the large northern newsprint mills since early in M ay has resulted in a consider able curtailment of production. This served to steady the market to a certain extent, yet most of the large mills announced that the price newsprint for the third quarter of the year would be $95 per ton, a reduction from $ 1 1 0 and which were the prices during the second quarterThe reason for this decline is said by one dealer to be the large stocks of paper which manufactur ers had on hand at the beginning of the strikeBut this supply is being depleted, and mills settling the differences with their employees an are resuming operations. None of the mills 1 the Philadelphia district were affected by th strike. The demand for wrapping paper fell off some" what in June, and this was attended by a dow^ B U S I N E S S A N D F I N A N C I A L C O N D I T I O N S 25 ward revision in price. Tissues are reported to decline in prices continued, but to a less degree be one of the brightest spots in the New York than during any month this year. Since M ay 31 Market, but large stocks on hand in Philadelphia the situation has been much the same, although have caused weakness in the local market. The improvement is reported in some cases. The demand for board has been steadier in the past summer season is ordinarily an inactive one. month, and prices have receded no further. Net sales during M ay were 43.4 per cent less Prices in general, considering all grades of pa than they were in the same month last year,— per, continued to decline during the month, many a decrease that has been attributed in large part reductions of io per cent being reported. The to lower prices. The high prices received last general level is estimated to be from 30 to 50 per year for such staples as sugar and potatoes would cent below the peak prices obtained last year. account partly for the large volume of sales at All firms have sufficient stocks on hand to sup that time, as expressed in dollars. Three dif ply present needs; in fact, many of them are over ferent firms have furnished data on this point. supplied. Dealers are purchasing from manu One found that there was an average decline facturers only such lots as are required to meet in the prices of 25 staples, during the year, of ordinary demands, which are very low. On the 35 per cent; and that in the same period sales °ther hand, manufacturers are operating their fell off 45 per cent. Another firm, experiencing Plants only when necessary to fill orders received, the same decrease in sales, judged that 42 per or to maintain stocks at the required minimum, cent of this could be accounted for by decline where it is customary to keep certain supplies on in prices. In the latter case, the relative volume uand. It has been estimated that the fine paper of sales of each commodity was considered, and rrulls are running at Irom 40 to 50 per cent of ca therefore this figure is a little more accurate than pacity. The coarse paper mills in this district the first. The third furnished the following comparative quotations on certain staple articles are reported as doing a little better. The situation in regard to raw materials is sim- that have a rapid turnover: uar to that existing in the finished paper market, Per cent May, 1920 May, 1921 of change nactivity continues, and prices are still falling, ronounced reductions, amounting to about 20 -5 2 % 3 3 .2 5 New cabbage...... per crate $ 6 .7 5 P^r cent, were made in the contract price of both -3 0 % 2 .1 0 3 .0 0 Onions............... per crate .6 5 -8 6 % 4 .7 5 Potatoes (old).... per bushel leached sulphite and soda pulp, effective June 1. 3 .0 0 -4 5 % 5 .5 0 Potatoes (new). . .per basket ° reign competition is partly responsible for these 9 .0 0 -4 3 % Potatoes (new). . . per barrel 1 6 . 0 0 7 .0 0 -6 3 % 1 9 .0 0 Sugar................. per cwt. . eclines, as Scandinavian pulp of excellent qual.3 2 - 3 4 - 5 0 % .6 6 - 6 8 Tub butter......... per lb. 1 X ls being offered on the American market at .2 8 -3 0 - 3 8 % .4 6 - 4 8 Fresh eggs.......... per dozen Prices below those asked for the domestic product. ulp wood has dropped considerably and is reIn spite of an increased duty on Cuban sugar, Ported to be below the cost of production, but as the sugar market declined rapidly during the e rnills usually buy their wood supply eighteen month. The large companies quoted fine granu *J*°nths in advance, they are still making pulp lated, on M ay 21, at 6.30 to 6.60 cents. Re r° m high-priced raw material. ductions made at frequent intervals since then have failed to stimulate buying. The price quoted by all companies, on June 17, was 5-6°, W H O L E S A L E G R O C E R IE S and the market was still weak. I H E R E was no change of any importance in the wholesale grocery market during May. s shown by the accompanying table, net sales Weie practically the same as in April, and the accounts outstanding changed but slightly. The Butter, which in the middle of May fell to a new low level, became firmer and rose about 12 per cent. Cheese was also steadier. The prices of flour and lard fluctuated slightly. Dried fruits were weak. Canned goods were generally steady 26 BUSINESS AND F I N A N C I A L C O N D I T I O N S and increased slightly in price. Potatoes fell about 50 per cent. Collections are poorer than they have been for some months. Although many firms con sider them fair, it is quite generally agreed that they must be followed up more closely. WHOLESALE GROCERY TRADE May 1921 May 1921 compared to compared to Apr. 1921 May 1920 Net sales during month..................... + 1.7% -43.4% Accounts outstanding at end of month. + -3% - 36.0% Ratio of accounts outstanding to sales: May 1921................................. ........ 103 •7% Apr. 1921 ................................. ........ 102 ■ 3% Mar. 1921 ................................. ........ 90 •8% Feb. 1921 ................................. ........ 106 •3% Jan. 1921 ................................. ........ 106 •7% Dec. 1920 ................................. ........ 101 •3% C O N F E C T IO N E R Y H E situation in the confectionery business may be summarized in a few words. Man ufacturers have stocks either of raw materials bought at peak prices or of finished goods made from these raw materials. The demand for can dy has been very slight since the Easter flurry, and factories are operating on a reduced schedule. Lower prices, made possible by cheaper sugar, have failed to stimulate business. The present season is always a time of little activity in the confectioner’s business, and this year it is duller than usual. The demand is es timated to be only 50 per cent of what it was at this period last year, and it is still declining. Some high-grade standard candies are selling fair ly well as compared with two or three years ago, although sales have dropped since last year. It has been estimated that 80 per cent of the output of candy is of grades which are sold by manufac turers at less than 25 cents a pound. These are handled by small retail confectioners and grocers and purchased by people of limited means; and it is the manufacturers of such candies who have suffered the greatest loss of business. Factory operations to date have been reduced to a greater extent than sales— an indication that sales have largely been made from supplies of fin T ished goods on hand. In some cases these sur plus stocks have been fairly well disposed of; but the present character of the demand, requiring immediate delivery, makes it necessary to main tain at least some reserves. The reserves of makers of fine candies are always small, as these goods must be delivered as fresh as possible. Prices for confectionery are from 20 to 35 per cent less than they were at this time last year, and they continue to decline. Penny candies are con siderably cheaper; package goods have been in creased in quantity and lowered in price; and the wholesale prices for fine confections have been re duced about 25 per cent. There is some com plaint from manufacturers of the failure on the part of retailers to lower their selling prices pro portionately. One manufacturer writes, “ Can dies which are selling at wholesale for 90 cents a pound, and retailing at S i.25, are today selling for 70 cents wholesale and Si retail. But a great many retailers have not yet made the cut public. The prices of raw materials are from one-third to one-half of last year’s quotations. Sugar, which was bringing over 20 cents a year ago and was hard to get at that price, can now be secured in any quantity at less than six cents. Cocoa beans, boxes, and other materials have also been materially reduced. The fly in the ointment lS that most manufacturers are even now heavily stocked with supplies bought at three or font times the present prices. Reports regarding collections are conflictingIn a few cases they are described as poor, and m one particular instance as very good. TOBACCO C ig a r s R A C T IC A L L Y all manufacturers report a slight improvement in sales of cigarS during the past month. This does not mean, however, that the demand is normal; as a mat' ter of fact, sales are still much smaller than thef were at this period last year. It means, simply that there is a somewhat more optimistic feeling in the industry and that buying is steadier than it has been at any time in the past six months’ The best sellers to-day are the cigars that re' tail for eight or ten cents. A few well-kno^11 P BUS I NE S S AND F I N A N C I A L C O N D I T I O N S and popular brands of higher-priced cigars are enjoying an almost abnormal demand. But pecullar conditions exist in each of these cases and they are exceptions to the general rule. At the other extreme, there is considerable request by smokers for a cheap cigar, and some manufac turers have sought to meet this demand by re ducing prices or by making a less expensive product. A . large Philadelphia producer re cently announced that he would soon place on the market a new brand to sell at five cents. Bhe accompanying table gives data obtained from reports of sales of stamps on tobacco prod ucts, by the Commissioner of Internal Revenue: 27 late operations so that the number of cigars produced will equal the number sold as nearly as possible. Certain firms have been able to operate on a normal basis, but they are excep tions to the rule. Operations throughout the industry average only about 80 per cent of capacity. Collections are improving and in most cases are said to be good. Because distributors are not ordering cigars until they are actually needed, there are no cancellations. L eaf Little change has taken place in the leaf tobacco situation during the month. The Suma tra inscriptions in Holland were the chief event 1920 1921 Pr d c o ut of interest. American buyers at the sale met March April January February March April severe foreign competition, said to have been 1 C igars (large) largely from Germany; and the bids were higher '-lass— A (under 6c) 167,420 146,760 127,046 130,856 155,633 152,850 this year than last, in spite of the fact that the B (6-8c) ...... 240,534 215,438 147,317 162,517 168,066:159,156 new crop is reported to be of inferior quality. C (9-15c).... 327,339 289,461 176,891 187,282 217,1951219,252 J (16-20c).. . 12,067 7,946 9,718 13,097 17,527 14,403 Moreover, the government duty on Sumatra E (over 20c). 5,880 3,972 1,826 2,972 2,922 2,442 has been increased, and it is felt that the mount Total. . . . 753,240 663,577 162,798 496,724 561,343 548,103 ing cost of Sumatra, which is an important con stituent in many American brands, is quite These data furnish a reliable index ol cigar out of harmony with the general state of affairs sales and point to certain interesting conclu- in the cigar manufacturing industry and with S1°ns. It is seen that the volume of sales this the demand for cigars of lower price. Practically all of the old tobacco is in the 7 ear has been smaller than it was in the same Months last year. The lowest point in cigar hands of manufacturers and the market is in Production was reached in January, an increase active. Packers have bought up most of the occurred during February and March, but fewer 1920 crop. A few remaining stocks were pur C1gars were sold in April than in March. It is chased from Lancaster County growers within noteworthy that though more class D cigars the last few weeks and at prices higher than wcre sold this year than in the like period of 1920, those prevailing last month. The fact that sjdes of such cigars fell off during April, while some very good crops brought as much as 25 those of class C slightly increased. The figures cents encouraged other growers to ask higher thus confirm the statement made above, that the prices, and sales consequently fell off. Planting of the 1921 crop has begun in Public is buying fewer expensive cigars and more Lancaster County and is expected to continue Medium-priced ones than it was two months ago. Lxcess stocks of cigars left in the hands of for two or three weeks. The weather has been Manufacturers early in the year have been de ideal and the soil is in good condition. Reports ceased in most cases by cutting down pro- of wildfire in the tobacco beds have been in uction. For a time, factories were closed all vestigated by government experts. They found ° ver the district, but they are now being reopened a few isolated cases and issued instructions as j 7ery day, as sales increase, and old stocks are to the best means of preventing the spread of the lsP°sed of. Manufacturers endeavor to regu disease. in t e r n a l revenue f ig u r e s on tax p a id TOBACCO PRO DUCTS (Number of cigars for which stamps were sold.) —(000*s omitted) 28 BUSINESS AND F I N A N C I A L C O N D I T I O N S CHARGES TO DEPOSITORS’ ACCOUNT other than banks’ or bankers’, as reported by Clearing Houses | June IS,1921 May 18, 1921 June 18,1920 Altoona.......... Chester.......... Harrisburg...... Johnstown...... Lancaster....... Philadelphia.... Reading.......... Scranton......... Trenton.......... Wilkes-Barre... Williamsport... Wilmington.... York.............. 33,190,000 33,524,000 33,556,000 4,459,000 4,792,000 6,371,000 7,056,000 6,545,000 4,746,000 4,823,000 4,866,000 4,649,000 5,071,000 6,623,000 4,871,000 307,859,000 320,858,000 399,673,000 8,089,000 6,286,000 7,267,000 15,754,000 13,613,000 14,552,000 11,100,000 11,500,000 13,000,000 8,546,000 9,352,000 9,434,000 4,148,000 4,662,000 3,644,000 7,340,000 7,621,000 8,378,000 4,601,000 4,601,000 3,923,000 Totals......... 3390,156,000 3405,120,000 3485,667,000 June 15, 1921 Month ago Year ago 3176,554 4,310 3139,427 255 Total reserves........ 3181,254 Discounts—secured by 104,111 U. S. securities...... 34,969 Discounts—all other. . 8,149 Purchased bills......... 48,489 U. S. securities.......... 3180,864 3139,682 109,324 37,641 8,336 36,063 170,471 29,673 1,926 33,293 Total earning assets. 3195,718 Uncollected items...... 67,426 All other resources.... 2,059 3191,364 53,888 2,489 3235,363 78,966 2,492 3446,457 3428,605 3456,503 T otal R e so urces . .. LIABILITIES June 15, 1921 Month ago Capital paid in.......... 38,616 Surplus.................... 17,010 Government deposits.. 1,303 Member banks — reserve account......... 105,406 Other deposits.......... 1,954 Total deposits....... 3108,663 Federal reserve notes.. 226,633 Federal Reserve Bank 11,078 notes..................... Deferred availability 70,159 items.................... All other liabilities.... 4,298 T otal L ia b il it ie s .. 3446,457 1 Loans and discounts: Secured by U. S. securities 340,262 338,487 3 94,776 Secured by other stocks 194.723 and bonds.................. 190,586 194,817 574,007 All other....................... 348,187 363,637 Investments: United States bonds....... 45,611 40,273 45,245 9,317 U. S. Victory notes........ 8,749 9,323 U. S. certificates of in 52,526 debtedness................. 9,809 14,373 Other bonds, stocks and * securities................... 159,863 155,691 Total loans, discounts and investments.... 3804,067 3821.573 3965,622 674,876 Demand deposits............. 621,181 640,016 32,769 Time deposits.................. 41,065 41,450 Borrowings from Federal Reserve Bank................ 110,482 56,463 98,257 * Included in “all other loans and discounts” item. June 20, 1921 3176,235 5,019 Gold reserves............ Legal tender, etc....... At the close of business Date Month ago Year ago June 8, 1921 May 11, 1921 June 11, 1920 BUSINESS INDICATORS STATEMENT Federal Reserve Bank of Philadelphia (000's omitted) RESOURCES | RESOURCE AND LIABILITY ITEMS of Member Banks in Philadelphia, Camden, Scranton and Wilmington 000’s omitted Year ago 38,615 17,010 1,063 38,317 8,805 694 104,342 1,444 3106,849 229,259 101,236 5,682 3107,612 247,287 13,075 18,990 49,981 3,816 59,736 5,756 3428,605 3456,503 Philadelphia banks: Loans................... 3695.463.000 Deposits............... 601,277,000 Ratio loans to de posits ................ 115.7% Federal Reserve Bank: Discounts and col lateral loans....... 3133.892.000 Reserve ratio......... 57.8% 90-day discount rate 6% Commercial paper... 6H -7% May. 1921 Percentage increase or decrease compared with Previous Year ago month - -3% -9.4% -1.5% —12.6% 113.6% 111.6% -5.8% —32.0% 43.0% 55.3% 6% 6% 8% 7H % Percentage increase or decrease compared with Previous Year ago month Bank clearings: In Philadelphia. . . 31,609,595,000 -5.3% —22.9% Elsewhere in dis trict ................. 150,779,000 -11.7% —18.5% Total............... 31,760,374,000 -6.6% —22.6% Building permits, Philadelphia........ 3,569,890 + 13.7% -13.3% Post office receipts, Philadelphia........ 1,155,200 -11.2% —13.3% Commercial failures in 37 district (per Dun’s) 69 65 Latest commodity in dex figures: Annalist (food prices only)......... 164.862 -4.0% -48.2% 165,995 - -4% -36.7% Dun’s.................. Bradstreet’s......... 10,617 -1.9% —46.6% BUSINESS AND F I NA NC I AL C OND IT I ONS 29 Hnamcial A DBuoinro Indicators H S ie ia itl The: Federal mio am or DLC OW L douar: 3000 2500 Mios in n C h a p p e d t o D e p o s it o r s A c c o u n ts 6.000 6 ./ . / f4 1920 T A — i ^ 2000 i § t> 000' o o ooooj* 4000 1921 3.000 3000 2000 ’ r / 500 00 0 1000 J f J 1914 1915 1916 1917 191Q 1919 1920 1921 1922 5000 2000 / 1 J \ J\ 300 T IT 2000 o 0 0 2 0 1000 or D0U.AC3 3000 KEY F e d e r a l ResERVErMoiTSiri _ C ir c u l a t io n . . . . T o t a l B il l s o o o o T o t a l R e .-3E.Kv u 500 Minion BAMK3 O udlDLOFNEw VoRk J_ o r DOLLARS Jan Feb Mar Apr flay June July Aug 3ep Oct Mov 0 Dec 30 BUSINESS AND FINANCIAL CONDITIONS ADVANCES THROUGH WAR FINANCE CORPORATION The War Finance Corporation has issued a booklet which outlines, in a general w ay, T the requirements of the Corporation in connection with advances to American exporters and American banks, bankers and trust | companies for the purpose of assisting in the exportation of domestic products. Informa tion is given as to the filing of applications, limitations on advances, collateral security required, details as to interest payments, payment of advances of proceeds, etc., with samples of the forms to be used. Copies of j this booklet (known as “Circular No. 1 of the War Finance Corporation”) may be obi tained upon request to the Federal Reserve I Bank of Philadelphia. I j 1 j I , j ! j 1 COMPILED AS OF JUNE 23, 1921 This business report will be sent regularly without charge to any address upon request. BUS I NE SS AND F I N A N C I A L C O N D I T I O N S 31
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