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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA | | l jl Jp L RESERVE DISTRICT JULY i, 1924 By RICHARD L. AUSTIN, Chairman and Federal Reserve Agent FEDERAL RESERVE BANK of PHILADELPHIA SU M M A R Y OF BUSINESS CONDITIONS IN THE UNITED STATES Production o f basic commodities and factory em ployment showed unusually large declines in M ay and were considerably below the level o f a year ago. Pur chases at wholesale and retail also declined during the month and were somewhat below last year’s volume. Commercial loans at member banks decreased and there was a further decline in money rates. The Federal Reserve Board’s index o f production in basic industries, adjusted to allow for seasonal varia tions, declined about 10 per cent Production in May to a point about 19 per cent below the peak reached a year ago. Particularly marked decreases were shown for production o f iron and-steel and mill consumption ° f cotton. Output o f anthracite, cement and tobacco products, on the other hand, was slightly larger than in April. Factory employment declined 4 per cent in May, the number o f employees being reduced in almost all re porting industries. The largest reduction o f working forces occurred in the textile, metal, automobile and feather industries. The value o f building contracts awarded in May was 13 per cent less than the month before and for the first time since the beginning of the year fell below the corresponding month in 1923. The Department o f Agriculture forecasts as o f June 1 indicated smaller yields o f wheat, oats and barley as compared with the harvests o f 1923. The condition o f the cotton crop on May 25 was 5 per cent lower than a year ago and 7 per cent below the average condition fo r the past ten years. Railroad shipments showed a slight increase in May, but were 8 per cent smaller than a year ago. Car loadings o f all classes o f Trade freight, with the exception o f g r a i n and live stock, were smaller than in May, 1923. Wholesale trade decreased slightly in May and was 6 per cent less than in May, 1923. Sales o f dry goods, shoes and hardware were much smaller than a year ago, while drug sales were slightly larger. Retail trade at department stores and mail order houses declined during May more than is usual at that season and was I n d e x o f U . S . B u r e a u o f L a b o r S t a t i s t i c s ( lt l3 = > 1 0 0 , b a s e a d o p t e d b y B u r e a u ). L a t e s t figure - M a y , 147. 2 T he B usiness R eview W e e k ly fig u r e s fo r m e m b e r b a n k s in 101 fig u r e - J u n e , 11, le a d i n g c it i e s . L a te st smaller than last year. Department store stocks were 4 per cent smaller in May than in A pril and 3 per cent larger than a year earlier. Wholesale prices as measured by the index o f the Bureau o f Labor Statistics, declined 1 per cent during May to a level about 8 per cent Prices below the high point reached in the spring o f 1923. Prices o f all commodities groups, with the exception o f food, de clined in May. During the first half o f June quota tions on wheat, corn, rye and silk increased, while prices o f hogs, beef, cotton and lumber declined. Decreased demand for credit for current business requirements between the middle o f M ay and the mid dle o f June was reflected in a Bank credit smaller volume o f borrowing for commercial purposes at member banks in leading cities. Further purchases o f corporate securities by these banks and larger loans on stocks and bonds, however, resulted in an increase for the month in their total loans and investments. There In d ex of J uly 33 m a n u f a c t u r i n g i n d u s t r ie s M a y , 93. (1919 = 100 ). L a t e s t fig u r e - was an unusually large increase in net demand deposits o f these banks, which carried the total o f these deposits to the highest figure on record. A t the Federal Reserve Banks between May 21 and June 18 there was a further decline in discounts for member banks and in acceptances purchased in the open market. Government security holdings, on the other hand, increased and total earnings assets were some what larger than a month ago. The prevailing ease in the money market was re flected in a further decline from 4*4 to 3 J / 2-3 J4 per cent in rates on prime commercial paper in New York. The June 15 issue o f six-month treasury certificates bore a rate o f 2 j4 per cent, compared with 4 per cent on a similar offering last December. Discount rates at the Federal Reserve Banks o f Cleveland, Richmond, Atlanta, Chicago, St. Louis and San Francisco were reduced from \l/ 2 to 4 per cent during June, and the rates in Boston, New Y ork and Philadelphia were reduced to per cent. 3l/ 2 TABLE OF CONTENTS PAGE Agriculture .................................................. 29 Bankers’ acceptances ................................ 6 Bricks .......................................................... 12 Building ....................................................... 12 Business Indicators ................................. 31 Chemicals ................ 18 Cigars ......... 28 Coal, anthracite .......................................... 16 Coal, bituminous ........................................ 16 Coke .............................................................. 17 Commercial paper ...................................... 6 Confectionery ............................................. 12 Cotton goods ............................................... 19 Cotton, raw ................................................ 18 District summary ...................................... ' 3 Drugs, wholesale ....................................... 11 Drygoods, wholesale ................................ 10 Electrical supplies, wholesale ............... 11 Employment and wages ........................... 3 S p e c ia l A r t i c le PAG E PAGE Financial conditions ................................ Floor coverings .......................................... Foreign exchange ...................................... Groceries, w h olesale................................... Hardware, wholesale ................................. Hides and skins ........................................ Hosiery ....................................................... Iron foundries ........................................... Iron and steel ............................................ Jewelry, wholesale ..................................... Leather .......... Lumber .......... , ............................................ National summary ..................................... Oils ............................................................... Paint ............................................................ Paper .......................................................... Paper, wholesale ....................................... Pottery ....................................................... S h o u ld t h e F e d e r a l R e s e r v e B a n k s P a y 5 24 8 11 11 25 22 15 14 10 25 12 1 17 13 27 11 14 Printing and Publishing ........................ Retail trade .............................................. Savings deposits ...................................... Shoes ............................................................. Shoes, wholesale ...................................... Silk Goods ................................................ Silk, raw ....................................................... Silk, thrown ................................................ Steel foundries _........................................... Summary, district ....................................... Summary, national ............. Synopsis of businessconditions ............. Tobacco l e a f ................................................. Underwear .................................................. Wholesale trade .......................................... W oolen and worsted goods ..................... W oolen and worsted yarns ..................... W ool, raw .................................................... ? ............32 28 8 6 26 10 21 21 22 15 3 1 7 28 23 9 20 20 20 S U M M A R Y OF BUSINESS CON DITIONS IN THE THIRD FEDERAL RESERVE D IS T R IC T Freight car loadings, however, showed the usual sea sonal increase in May and early June, but they are not as large as they were a year ago. Much o f the decline in freight car loadings, as compared with last year, is due to decreased shipments o f coal and ore, as up to the present the movement o f manufactured goods has been well maintained. According to the reports received from 1,041 industrial establishments in Pennsylvania, New Jersey and Delaware the number o f wage earners on the pay-rolls fell off 3.7 per cent between March and April, and total wages paid declined 5.1 per cent. Preliminary reports for the period ending June 15 indicate that these movements have continued, and that especially large declines in employment have taken place at silk and other textile mills and at metal manufacturing plants. Prices, as measured by the index o f the Bureau o f Labor Statistics, declined from 148 in April to 147 in May, continuing the movement that started late in 1923. Lower quotations for farm products and metals were chiefly responsible for the falling off, al though practically all the groups included in the index contributed to the decline. Since June 1, prices o f pig iron, electrolytic copper, and raw cotton, silk, and wool have tended downward, but quotations on corn and wheat have advanced. Interest rates have con tinued to fall, as is indicated by the rates for prime commercial paper which, between May 20 and June 20, declined from 4*4 to 3 % -4 per cent. Partly because o f unseasonable- weather, business ac tivity in this district has continued to decline during the past month, although the rate o f decrease has be come progressively slower. This slackening was evi denced by a further fall in the production o f basic commodities, by a reduction in the number o f em ployees at industrial establishments, and by decreased distribution o f goods. A t the same time wholesale commodity prices have continued to fall, and the de mand for bank credit has lessened. Short time interest rates are easy, and are lower than they were a month ago. The policy o f ordering in small amounts and for prompt shipment continues in practically all industries, and in order to prevent the accumulation o f stocks, many manufacturers have curtailed production. A s a result, consumption and output in many industries are more closely balanced than they were a month ago. Such a condition is found in the iron and steel industry, in which declining business has been accompanied by a sharp reduction o f operations. Although certain types o f fabricated steel have been selling rather achvely, most iron and steel products are in no better demand than they were last month. W ith one or two minor exceptions, no improvement is evident in the market for textiles, and operations have been curtailed further. Hides are not moving as well as they were a month ago, and leather and leather products are in dull request. Paper, tobacco leaf, bituminous coal and d^e various building materials are also in poor demand. .,e estimated value o f building permits issued in 15 ^ties o f the Third Federal Reserve District during Play Was $16,363,575, a decrease o f $11,861,598 from jm ril and $2,327,464 below the figure for May, 1923. espite rainfall in M ay and June, which retarded the evelopment o f many crops, agricultural conditions condnue favorable. T-he distribution o f goods, as measured by the volume u wholesale and retail trade, was less than in May, ~d. Retail trade was 2.4 per cent below that o f a ^ear ago, but this decline is attributable in great part u the exceptionally bad weather that prevailed. O f . e eight wholesale lines reporting to this Bank, sales ln May were smaller in all cases than in May, 1923, and in only three lines were they larger than in April. EMPLOYMENT AND WAGES The number o f wage earners on the pay-rolls o f over 1,000 industrial establishments in Pennsylvania, New Jersey and Delaware declined 3.7 per cent from April to May, a larger reduction than in any other month during the past year. Total wages paid fell off more than 5 per cent, and average weekly earnings, 1.5 per cent. Inasmuch as only 12 firms reported decreases in rates o f pay affecting only 1,267 workers it is evi dent that the loss in average earnings indicates a fur ther curtailment in working hours. Employment in these establishments is now nearly 10 per cent less than it was in the late fall of 1923. 3 J uly T he B usiness R eview 4 EM PLO YM E N T AND W AGES IN PENNSYLVANIA, NEW JERSEY AND DELAWARE Group and Industry Number of plants reporting 1,041 All industries (4 8 ).................. Number of wage earners— week ended May 15, 1924 April 15, 1924 Per cent change 384,315 399,077 - Average weekly earnings— week ended Total weekly wagesweek ended May 15, 1924 April 15, 1924 May 15, 1924 April 15, 1924 Per cent change 5.1 $26.20 $26.59 - 1.5 Per cent change 3.7 $10,068,478 $10,612,501 5,156,144 193,979 422,425 5,578,567 210,938 429,380 - 7.6 8.0 1.6 27.81 28.89 28.03 28.49 29.36 28.76 - 2.4 1.6 2.5 4.3 410,562 435,161 - 5.7 24.64 24.98 - 1.4 13,577 15,532 - 4.9 2.0 372,855 440,373 381,638 461,259 - 2.3 4.5 28.88 28.92 28.11 29.70 + 2.7 - 2.6 + 2.4 4.1 4.7 8.4 2.6 184,629 407,651 125,218 1,335,913 78,185 — 5.5 - 4.6 -1 1 .5 -1 1 .3 + 4.4 31.02 28.45 26.44 27.57 27.07 32.04 28.60 28.46 28.47 26.61 + 3.2 0.5 7.1 3.2 1-7 27,338 11,432 3,699 28,603 - 4.4 12,805 -1 0 .8 4,055 - 8.8 761,423 315,826 107,105 811,815 - 6.2 385,458 -18.1 117,816 - 9.1 27.85 27.63 28.96 28.38 30.10 29.05 - 1.9 8.2 0.3 253 15 36 7 24 68 32 46 17 8 67,840 4,073 5,816 5,107 6,442 16,292 12,098 10,163 5,733 2,116 70,254 4,374 5,957 5,181 7,083 16,900 12,483 10,262 5,874 2,140 - 3.4 6.9 2.4 1.4 9.0 3.6 3.1 1.0 2.4 1.1 1,411,963 96,996 105,288 108,967 141,614 321,776 230,467 210,967 152,234 43,654 1,497,545 112,924 106,169 112,955 157.874 342,632 248,251 211,086 158,721 46,933 - 5.7 -14.1 - 0.8 - 3.5 -1 0 .3 - 6.1 - 7.2 - 0.1 - 4.1 - 7.0 20.81 23.81 18.10 21.34 21.98 19.75 19.05 20.76 26.55 20.63 21.32 25.82 17.82 21.80 22.29 20.27 19.89 20.57 27.02 21.93 + + - 2.4 7.8 1.6 2.1 1.4 2.6 4.2 0.9 1.7 5.9 Foods and tobacco: Bakeries.................................... Canneries.................................. Confectionery and ice cream .. Slaughtering and meat packing Sugar refining........................... Cigars and tobacco.................. 89 21 7 21 13 4 23 26,332 4,765 2,748 5,165 2,644 4,316 6,694 26,887 4,836 2,768 5,315 2,808 4,294 6,862 + - 2.1 1.5 0.7 2.8 5.8 0.5 2.4 605,184 127,698 59,156 109,023 74,206 134,489 100,612 607,942 127,409 59,093 109,828 75,217 132,887 103,508 + + + - 0.5 0.2 0.1 0.7 1.3 1.2 2.8 22.98 26.80 21.53 21.11 28.07 31.16 15.03 22.61 26.35 21.35 20.66 26.79 30.95 15.08 + T + + 1.6 1-7 0.8 2.2 + 4.8 -f 0.7 - 0.3 Building materials: Brick, tile, and terra cotta prod ucts........................................ Cement..................................... Glass......................................... Pottery..................................... 80 26,329 26,357 - 0.1 768,187 773,651 - 0.7 29.18 29.35 - 0.6 22 15 27 16 3,520 7,894 9,786 5,129 3,547 7,777 9,972 5,061 + + 0.8 1.5 1.9 1.3 94,223 228,846 278,409 166,709 94,620 224,364 285,466 169,201 -1- 0.4 2.0 2.5 1.5 26.77 28.99 28.45 32.50 26.68 28.85 28.63 33.43 + + - 0.3 0.5 0.6 2.8 74 39 10 13 8 4 29,651 7,415 2,528 1,429 16,996 1,283 29,931 7,907 2,543 1,456 16,744 1,281 + + 0.9 6.2 0.6 1.9 1.5 0.2 893,235 195,848 66,571 39,294 558,788 32,734 890,881 212,235 72,993 39,146 527,558 38,949 + 0.3 - 7.7 - 8.8 + 0.4 + 5.9 -1 6 .0 30.12 26.41 26.33 27.50 32.88 25.51 29.76 26.84 28.70 26.89 31.51 30.41 + 1.2 - 1.6 - 8.3 + 2.3 + 4.3 -16.1 197 48,746 49,829 - 2.2 1,233,765 2.4 25.31 25.37 - 0 8 22 6 36 7 28 23 24 19 11 13 2,313 3,029 8,872 8,073 353 5,415 5,486 3,869 5,283 2,926 3,127 2,279 3,107 9,201 8,262 386 5,779 + - 1.5 2.5 3.6 2.3 8.5 6.3 5,602 - 2.1 + - 4.9 1.3 2.7 1.2 - 4.3 - 5.6 + 0.6 - 3.5 -1 7 .0 - 8.6 - 3.5 + 4.1 - 1.3 - 6.4 - 0.3 20.59 24.53 27.37 25.87 19.82 18.05 25.51 32.59 26.86 23.19 25.46 21.83 25.33 26.24 26.18 21.84 18.51 25.90 3,688 5,353 3,008 3,164 47,620 74,293 242,839 208,809 6,995 97,755 139,974 126,101 141,926 67,855 79,598 + + 5.7 3.2 4.3 1.2 9.2 2.5 1.5 0.8 0 3.8 0.9 195,819 - 5.3 7,184 - 6.5 14,931 + 0.9 ' Metal manufactures: Automobiles, bodies, and parts. Car construction and repair.. . Electrical machinery and appa ratus...................................... Engines, machines, and machine tools....................................... Foundries and machine shops.. Heating appliances and appa ratus...................................... Iron and steel blast furnaces.. . Iron and steel forgings............ Steel works and rolling mills. . Structural iron works.............. Miscellaneous iron and steel products................................ Shipbuilding............................. Non-ferrous metals.................. 348 22 14 185,417 6,714 15,071 39 16,664 17,417 - 38 72 12,911 15,228 18 12 12 48 11 5,952 14,327 4,736 48,457 2,888 6,098 14,938 4,970 52,894 2,815 47 9 6 Textile products: Carpets and rugs..................... Clothing.................................... Hats, felt and other................. Cotton goods............................ Silk goods................................. Woolens and worsteds............. Knit goods and hosiery........... Dyeing and finishing textiles. . Miscellaneous textile products. Chemicals and allied products: Chemicals and drugs............... Explosives................................. Paints and varnishes............... Petroleum refining................... Coke.......................................... Miscellaneous industries: Lumber and planing mill prod ucts ........................................ Furniture.................................. Musical instruments................ Leather tanning....................... Leather products..................... Boots and shoes....................... Paper and pulp products........ Printing and publishing.......... Rubber tires and goods........... Novelties and jewelry............. All other industries.................. . 195,399 427,281 141,429 1,506,086 74,907 1,263.915 49,740 78,709 241,393 216,273 8,432 106,960 145,099 121,139 143,855 72,483 79,832 32.85 26.87 24.10 25.23 T hird F ederal R eserve D istrict 1924 The largest declines in both employment and earnmgs occurred in the metal manufacturing and textile products groups. O f the 21 industries in these two groups 19 reported reductions in working forces and 17 reported smaller per capita earnings. Automobile factories, machinery plants, forging shops, rolling mills, shipyards and plants producing non-ferrous metal products reported the most important declines in the metal manufacturing group. Am ong the textile in dustries carpet and rug mills and cotton, silk and woolen and worsted mills all showed material losses in employment and in per capita earnings. Curtailment o f operations in most o f the other in dustries included in the survey was less pronounced than in the metal and textile groups. W ith few ex ceptions the foods and tobacco and building material industries reported only minor losses in employment, while per capita earnings increased in most cases. Chemical and drug, hoot and shoe and leather products factories reduced their working forces more than 6 per cent during the month and earnings in each o f these in dustries were also smaller. The table on page 4 shows the changes in employment and wages in the Principal industries o f the three states. FINANCIAL CONDITIONS Declining loans, lower money rates, and an active market for investments were the principal features ° f financial operations during the past month. M ore over, reports on debits to individual accounts at banks ln 18 cities o f the Third Federal Reserve District are now beginning to reflect the falling off in general busi es. The total o f these debits for the four weeks ended June 18 was $1,986,000,000, a decline o f 4.5 Per cent from the figures o f a year ago. From a high point for 1924 o f 364.0 millions on April 9, the commercial loans o f reporting member banks in the Third Federal Reserve District tended slowly downward to 356.4 millions on June 4, but rose ln the succeeding week to 359.9 millions. This latter hgure compares with 356.1 millions a year ago. Secured loans amounted to 289.9 millions in the first report for May, but had receded to 280.7 millions by June 11. Investments increased slightly, the tendency, as m recent months, being to dispose o f Government lssues and purchase other securities, probably because ®f the higher rate o f return obtainable on the latter. f°ta l deposits changed little. ft was noted last month that the total o f bills dis counted held by the Federal Reserve Bank o f Philariphia on May 21— 31.3 millions— was lower than at any time since April, 1919. The four weeks following r°ught further reductions, and on June 18 the amount Utlder discount was only 26.3 millions. Changes in other items during recent weeks, however, were minor. 5 Comparisons o f the principal items with those o f pre ceding periods fo llo w : BANKING STATISTICS Federal Reserve Bank of Philadelphia Changes since All figures in millions of dollars except last item 1924 May 21, 1924 Jan. 2, 1924 June 20, 1923 Earning assets: Bills discounted............ Other............................ 26.3 33.7 —5.0 - .2 -2 8 .7 -1 3 .0 -4 5 .2 - 3.6 Total......................... 60.0 -5 .2 -4 1 .7 -4 8 .8 - .7 -1 .2 - .8 + -2% -3 2 .9 - 3.3 + 4.0 + 10.3% -1 5 .8 + 6.6 +42.7 + 16.1% Federal reserve note cir culation ........................ Total deposits................. Cash reserves................... Reserve ratio............... . . 185.6 119.2 262.6 86.1% Material changes in the rates for money have taken place within the past month. On June 18 the Federal Reserve Bank o f Philadelphia reduced its rediscount rate on paper o f not more than 90 days’ maturity from A]/2 per cent to Zy2 per cent. Other reserve banks re cently reduced their rates. A t this time (June 20) the Boston and New Y ork reserve banks also have a 3 y2 per cent rate; in the Chicago, Cleveland, Atlanta, Richmond, St. Louis, and San Francisco districts the rate is 4 per cen t; and in the other— 4p2 per cent. Commercial paper is now selling, for the most part, at 3%. and 4 per cent, as against 4 y. per cent a month a g o ; the offering H o ld i n g s o f d i s c o u n t e d b i ll s h a v e d e c l in e d m o r e o r le s s s t e a d i ly s i n c e J u l y 1923, r e f l e c t in g le s s d e p e n d e n c e u p o n t h e r e s e r v e b a n k b y t h e m e m b e r b a n k s . O n J u n e 18, 1924, d i s c o u n t s w e r e lo w e r t h a n a t a n y t i m e s i n c e 1918. Source—Federal Reserve Bank of Philadelphia J uly T he B usiness R eview 6 rate for 90-day bankers’ acceptances has been reduced from 3 per cent to 2 per cen t; and call money, which ruled at 3 per cent a month ago, now brings only 2 per cent. The bond market, in particular, has been stimulated by the plenitude o f funds and transactions in the week ended June 14, according to the W all Street Journal, totaled $123,662,000, as against, $59,438,000 a year ago. The average price o f 40 bonds reached a peak, for the year, o f $90.28 on June 16, a gain o f $3.55 from the low point on January 2. Stock prices, too, have increased during the past month. Averages are given in the table: $3,108,000 in the preceding month, and $3,743,000 a year ago. Savings deposits, as reported by 97 banks in the Third District, declined slightly during May. Increases were reported in most o f the Savings deposits cities, but reductions in Philadel phia, Johnstown, Scranton, and Easton were sufficient to carry the total downward. Banks in three additional cities— Allentown, Bethlehem, and Easton— have been added to those previously re porting : SAVINGS DEPOSITS June 19, 1924 Average of— 20 industrial stocks.......... 20 railroad stocks............. 40 bonds........................... 4 Liberty bonds.............. Call money (ruling rate).. Source: $ 93.79 85.13 90.18 101.56 2% May 19, 1924 $ 89.81 81.88 88.62 100.39 3% June 21, 1923 $92.26 81.24 86.55 98.14 5% Wall Street Journal. Average weekly sales o f bankers’ acceptances in the Third District by five dealers were much smaller in the period ending June 11 than Bankers’ at any time since this reporting acceptances system was started, early in 1922. New bills coming into this market are few and the demand for them is poor. The offering rate for 90day bills is now 2 per cent, as contrasted with 3 per cent a month ago. Transactions o f the dealers are summarized here with : TRANSACTIONS IN BANKERS’ ACCEPTANCES Sales in Third District Weekly average for period ending— 1924— June 11 ............................. May 14............................. April 9............................... 1923— June 13............................. 1922— June 11............................. Purchases in Third District To Federal Reserve Bank To others $ 305,000 488,000 56,000 $ 19,000 68,000 463,000 $165,000 269,000 581,000 1,514,000 235,000 320,000 2,949,000 61,000 827,000 Reports o f twelve accepting banks show that $2,827,000 o f bankers’ acceptances were executed by them in the month ending June 10. This figure compares with Third Federal Reserve District Cities Number of reporting banks Per cent increase or decrease June 1, 1924 compared with May 1, 1924 June 1, 1923 Allentown.................................... Altoona........................................ Bethlehem.................................... Chester......................................... Easton.......................................... Harrisburg................................... Johnstown.................................... Lancaster..................................... Philadelphia................................. Reading........................................ Scranton....................................... Trenton......................................... Wilkes-Barre................................ Williamsport................................ Wilmington.................................. York.............................................. Others........................................... 9 5 4 5 6 4 4 3 9 3 6 6 5 4 5 5 14 + -5 + 1.2 + .8 + .4 -1 .0 + 1.5 -1 .2 + 1.5 - .2 + 1.1 - .8 + .4 + .1 + -5 4" -4 +2.7 + .1 + + + + + + + + + + + + + + + + + Totals....................................... 97 - + 7.3 .03 6.7 15.0 13.1 7.5 8.7 3.9 6.9 16.5 6.2 10.8 9.7 3.1 18.2 2.0 7.5 17.7 7.0 During the early part o f June, dealers had a fair list o f names, but as the market for call money became . even more glutted with funds Commercial than it ba(j been> tbe cjty banks r bought commercial paper more freely, and although the lower rates brought some new paper into the market, the supply o f high grade names grew smaller. The class o f paper which had been offered at 4 per cent was marked down to per cent by most dealers, and banks that had hesitated to pur chase at 4 per cent became anxious to buy at that figure, but were not able to obtain the quality o f paper they desired. During the third week in June, however, sev eral o f the city banks bought at and others at % per cent, but some names not so well known are still passing at 4 and 4 j4 per cent. Country banks are buy ing but little though some sales to them at 4J4 per cent and a few at 4 per cent are reported. The chart on page 8 shows the sales o f commer- 3l/ 2 3]/2 3 1924 I T hird F ederal R eserve D istrict 7 SYNOPSIS OF BUSINESS CONDITIONS Bricks Fair Unchanged to lower Moderate Third Federal Reserve District Labor Collections Wages Supply Unchanged Fair Sufficient to lower Chemicals Weak Lower Light Sufficient Unchanged Fair to good Cigars Coal, anthracite Fair to good Fair to good Moderate Moderate Sufficient Sufficient Unchanged Unchanged Fair Fair Coal, bituminous Poor Heavy Sufficient Unchanged Fair Coke Confectionery Poor to fair Fair Moderate Moderate Sufficient Sufficient Unchanged Unchanged Fair Fair Cotton goods Poor Moderate Sufficient Unchanged Fair Drugs, wholesale Fair Drygoods, wholesale Poor to fair Electrical supplies, wholesale Poor to fair Unchanged Slightly higher Unchanged to lower Lower Declining Unchanged to lower Slightly lower Unchanged to lower Unchanged to lower Floor coverings Poor to fair Unchanged Moderate Sufficient Unchanged to lower Moderate to light Moderate Moderate Sufficient Unchanged Compiled as of June 21, 1924 Business Demand Prices Stocks Moderate Fair Moderate Fair Moderate Fair Fair to good Glass Fair Groceries, wholesale Hardware, wholesale Hosiery, fullfashioned Hosiery, seamless Iron and steel Jewelry, wholesale Fair Fair Unchanged to lower Firm Some declines Fair to good Lower Moderate Sufficient Unchanged Fair Fair Poor to fair Fair Moderate Moderate Moderate Sufficient Sufficient Unchanged Unchanged Fair Fair to good Poor to fair Leather, belting Fair Moderate Sufficient Unchanged Fair to good Leather, heavy Poor Lower Lower Unchanged Unchanged to lower Barely steady Unchanged to lower Unchanged to lower Lower Some advances; some declines Heavy Sufficient Unchanged Good Heavy Sufficient Unchanged Good Moderate to heavy Moderate Moderate to heavy Moderate to light Moderate Moderate Sufficient or plentiful Sufficient Unchanged Fair Unchanged Fair to good Sufficient Unchanged Fair to good Sufficient Unchanged Fair Plentiful Unchanged Fair Fair Plentiful Unchanged Fair Moderate to light Sufficient to plentiful Unchanged Fair to good Moderate Sufficient Unchanged Leather, upper Lumber Poor to fair Poor to fair Gils, crude Fair to good Oils, refined Fair to good Paint Fair Some declines Fair to poor Fair Slightly lower Slightly lower Fair Slightly lower _Paper Baper, wholesale Printing and publishing Fair Generally unchanged Unchanged to lower Unchanged Unchanged to lower Lower Lower Decreasing slightly Irregular Unchanged Moderate Sufficient Unchanged Fairly good Irregular Unchanged Moderate Sufficient Unchanged Fairly good Less active Unchanged Fairly heavy Sufficient Unchanged Fair to good Poor Weak Moderate Sufficient Unchanged Fair to good Pottery Poor to fair Shoes, manufacture Poor to fair Shoes, retail Fair Shoes, wholesale Fair goods _SUk, thrown Tobacco leaf Underwear, heavy __ weight Underwear, light __ weight ^ oolen and worsted goods ™oolen and worsted yarns Fair to good Fair to good Fair Quiet • Poor Fair Moderate Fairly heavy Fairly heavy Fair Fair to good Moderate Sufficient Sufficient Unchanged Unchanged Fair Fair Fair Moderate J uly T he B usiness R eview 8 cial paper for the past two years by Philadelphia dealers as reported to this bank and also the prevailing rate for high grade names. Sales have been largest in January and small in A u gu st; in 1922, however, the November sales were less than those o f August. Rates have ruled at the highest in the autumn. Source—Federal Reserve Bank of Philadelphia In May the sales by five reporting firms in the Third Federal Reserve District totalled $9,835,000, as compared with $6,500,400 in April and $5,467,000 in May, 1923. Philadelphia institutions purchased $7,645,000 and outside banks $2,190,000. The range o f rates at which paper was sold during May was again a wide one, the low being 4 per cent and the high 5^4 Per cent. O f the total less than 3 per cent sold at 4, 5 and 5*4 per cent. M ore than one-half o f the busi ness was at 4% per cent and most o f the balance at 4]/2, transactions at 4J4 per cent being comparatively small. N o great variations have occurred in the foreign exchange market during the past month, though the . principal European currencies foreign were sensitive to the political de® velopments in France incidental to the establishment o f a new Government. Sterling fluctuated considerably within a range o f 4 cents and is at present quoted at $4.3304, as compared with $4.3594 on May 21. The decline is partly attributed to the ap proach o f the time when exporters will offer sterling against fall shipments o f grain and cotton. French francs declined during the first part o f June but since then considerable improvement has taken place and on June 21 they were quoted at $.0541. Neither Belgian nor Swiss francs are as high as they were a month ago, though the decline has been small. On June 21, the former were listed at $.0469 and the latter at $.1774. Italian lire are also slightly lower than they were in May, but they have been fairly steady at $.0433 since the first o f this month. Guilders have been remark ably constant in value and are at practically the same levels as they were a month ago. On June 21 they were quoted at $.3742. On the other hand Spanish pesetas declined from $.1385 on May 21 to $.1343 on June 21, a loss o f 42 points. The return of Sweden to the gold standard has greatly stabilized the currency and fluctuations during the past four weeks have been confined to a spread o f less than 6 points. On June 21 kroner were listed at $.2655. Norwegian kroner are not as strong as they were in May. During the month ending June 21, they declined from $.1392 to $.1351, a loss o f 41 points. Currencies o f the principal South American coun tries are all lower than they were at this time in May, though in no case has the decline been great. On June 21, Argentine gold pesos were quoted at $.7400 and Brazilian milreis at $.1089. Quotations for Chilean pesos strengthened somewhat during the middle o f the month but declined on June 21 to $.1067. A more favorable trade balance has materially improved quo tations on Japanese yen and the present value o f $.4108 represents an increase o f almost one cent over that recorded on May 21. Canadian dollars are listed at $.984178, a gain o f several points over the quotation a month ago. FOREIGN EXCHANGE RATES Noon cables June 19, 1924 Mav 19, 1924 June 19, 1923 $4.3270 .0539 .0469 .0433 .000014 .3742 .1687 .2656 .1343 .1769 .7380 .7141 $4.3657 .0553 .0472 .0444 .000014 .3741 .1694 .2655 .1387 .1744 .7467 .7127 $4.6241 .0621 .0528 .0454 .000014 .3926 .1791 .2655 .1488 .1797 .8131 .7255 Par London................. $4.8665 Paris..................... .1930 Antwerp............... .1930 M ilan................... .1930 Vienna.................. .2026 Amsterdam.......... .4020 Copenhagen......... .2680 Stockholm ............ .2680 Madrid................. .1930 Berne .................... .1930 Buenos Aires........ .9648 Shanghai............... .7965 RETAIL TRADE The advent o f warm weather during the latter half o f the month has stimulated retail sales, especially of summer wearing apparel. But advance reports from the majority o f stores indicate that the volume o f retail trade will not be as large as in June, 1923; because the [924 T hird F ederal R eserve D istrict 9 RETAIL TRADE Third Federal Reserve District Comparison of stocks Comparison of net sales Rate of turnover* Index number (Per cent of May, 1924 Jan. 1 to May May 31, 1924 May 31, 1924 Jan. 1 to .Jan. 1 to 1923 monthly with with May 31, May 31, with 31, 1924 average) 1923 May, 1923 with Jan. 1 to May 31, 1923 April 30, 1924 1924 May 31, 1923 All reporting firms.................................................. Firms in— Philadelphia................................................... —Allentown, Bethlehem and Easton.............. —Altoona............................................... —Chester........................................................... — Harrisburg...................................................... —Johnstown...................................................... —Lancaster........................................................ — Reading.......................................................... — Scranton......................................................... —Trenton............ .............................................. —Wilkes-Barre.................................................. —Williamsport.................................................. — Wilmington.................................................... —Y ork................................................................ — All other cities............................................... 107 100 106 103 70 108 93 105 108 99 101 121 96 108 100 106 All department stores...................................................... Department stores in Philadelphia................................. Department stores outside Philadelphia....................... 98 All apparel stores............................................................. Men’s apparel stores............................ — in Philadelphia..................................................... —outside Philadelphia............................................. Women’s apparel stores.................................................. —in Philadelphia.............................. ....................... —outside Philadelphia............................................. 111 93 126 - 2.4% - 2 .4 “ - 1 .3 “ - 9 .0 “ -2 8 .1 “ - 5 .2 “ -1 5 .9 “ + 0 .8 “ + 4 .2 “ - 9 .0 “ - 1 .1 “ + 3 .9 “ - 7 .3 “ - 1 .2 “ - 2 .8 “ + 5 .0 “ + + + - 3.5% 4 .2 “ 2 .6 “ 2 .3 “ + 1-7% + 0 .4 “ + 4 .4 “ + 3 .9 “ - 3.8% 4 .4 “ 0 .9 “ 5 .1 “ 3.3 3.8 2.2 2.6 3.4 3.8 2.4 2.8 + + + + + + + + + 1 .5 “ 8 .7 “ 3 .7 “ 3 .9 “ 3 .8 “ 1 .3 “ 4 .7 “ 2 .0 “ 4 .6 “ 1 .3 “ 7 .7 “ + 6 .2 “ + 27.1 “ - 1 .0 “ - 2 .2 “ + 5 .2 “ + 1 .3 “ + 9 .0 “ + 2 .4 “ + 1 .2 “ - 2 .8 “ + 2 .3 “ + - 2 .3 “ 1 .0 “ 3 .6 “ 5 .0 “ 3 .1 “ 2 .5 “ 0 .7 “ 3 .0 “ 2 .3 “ 5 .0 “ 4 .0 “ 2.3 2.6 2.6 2.2 2.9 2.9 3.1 2.1 1.9 2.5 2.3 2.5 3.3 2.6 2.2 3.3 2.9 3.1 2.2 1.8 2.5 2.2 - + 2 .6 “ + 0 .3 “ + 1 .6 “ + 0 .7 “ - 0 .9 “ + 4 .0 “ - 3 .6 “ - 4 1 “ - 2 .7 “ 3.2 3.6 2.5 3.3 3.7 2.6 + 3 .1 “ - 5 .3 “ - 5 .9 “ - 4 .7 “ + 10.2“ + 14.1 “ - 8 .9 “ + + + + + + + + + + + + + - - 5 .4 “ - 3 .0 “ - 3 .8 “ - 2 .3 “ - 5 .8 “ - 5 .9 “ -1 2 .4 “ 4.3 2.3 2.6 2.0 6.5 7.1 4.8 4.4 2.5 2.9 2.1 6.1 6.6 4.6 3 .0 “ 3 .4 “ 1 .9 “ 11.0“ 2 .7 “ 0 .8 “ 4 .6 “ 16.9“ 19.4“ 3 .2 “ 9 .4 “ 12.6“ 15.9“ 9 .8 “ 6 .3 “ 8 .7 “ 1 .8 “ Credit houses.................................................................... 105 - 6 .5 “ + 0 .8 “ + 5 .1 “ - 5 .0 “ 2.4 2.6 Shoe stores 113 - 5 .3 “ + + - 0 .1 “ 3.5 3.4 5 .6 “ 2 .1 “ * Times per year based on cumulative period. depressed condition of business and the increase of unemployment are causing consumers to buy cautiously. This is particularly noticeable in industrial centers, al though reports from all cities state that price is more ° f a factor in sales than it has been for the past several Kars. Unseasonably cool and rainy weather in the early part o f the month also caused a slowing up o f retail sales. A downward trend is still noticeable in the prices of most textile products, but declines are most pronounced ln spring and summer merchandise, which is now being offered to retailers at considerably lower prices than sixty days ago. Silk goods, knitted woolen sweaters and eapes, carpets and rugs, gloves and silk hosiery are the jtems most affected. Imported fancy goods, such as beaded bags and beaded necklaces, are also offered at concessions in price, as are domestic and imported ancy woolen suits. Furniture prices show little change. Retail sales in this district during May were 2.4 per Cent smaller than those o f May, 1923, and were con siderably behind those for April. W om en’s apparel stores were the only group whose sales exceeded those o f May, 1923, the increase being 10.2 per cent. De partment store sales were 3.0 per cent less, men’s ap parel, 5.3 per cent smaller, and credit houses, 6.5 per cent less, than in May, 1923. Apparently the unseason able weather o f May did not greatly affect sales o f women’s apparel. WHOLESALE TRADE Prices at wholesale have been more stable than in re cent m onths; and except for a few seasonal advances in some grocery articles the changes recorded are down ward. None o f the declines is large, however, though quotations for silk hosiery have fallen to the lowest point in several years. Preliminary estimates indicate that sales in most wholesale lines will be smaller in June than they were in June, 1923. In May, sales in all o f the eight reporting lines were less than in May, 1923, and, with the exception of groceries, hardware and jewelry, were not as large as IO J uly T he B usiness R eview WHOLESALE TRADE Third Federal Reserve District Net sales May 1924 compared with Stocks May 1924 compared with Accounts outstanding May 1924 compared with April 1924 May 1923 April 1924 May 1923 April 1924 Boots and shoes............................................... Drugs................................................................ Drv goods........................................................ Groceries.......................................................... Hardware.......................................................... Jewelrv.............................................................. Paper................................................................ Electrical supplies........................................... -3 0 .5 % - 4 .7 “ - 3 .1 “ + 6 .7“ + 0 .4 “ + 2 .4“ - 3.8“ - 1 4 .3 “ -2 3 .2 % - 0 .8 “ - 1 6 .9 “ -2 2 “ - 8 .3“ -1 3 .7 “ - 1 2 .5 “ - 1 2 .5 “ in April. Collections too are poorer in all lines than they were a year ago and only in groceries and hard ware have they improved as compared with the pre vious month. The trend in stocks is not as marked as that o f sales and collections. In four lines they are larger than they were a month before and in four smaller; and as com pared with those o f May 31, 1923, stocks in five lines were heavier, but those o f shoes, drugs and electrical supplies were lighter. Indications are that sales o f shoes at wholesale will be smaller in June than they were in June, 1923. The dulness which was noted in May Shoes has continued and conditions show but little change. If, how ever, the latter part o f the month should be warm and clear, wholesalers expect that retailers, who have al lowed stocks to become depleted, will buy freely and sales may be large enough to offset the early slackness. Patent leather shoes for women and tennis shoes have been active. Nearly all the sales made are for imme diate shipment but a few houses report some trans actions for September, October and November delivery. The buying policy o f wholesalers is the same as last reported and purchases for the autumn are considerably smaller than they were a year ago. Some buyers have become more interested o f late and a few early orders have undoubtedly been given, but the great bulk o f the business remains to be placed. N o general decrease in the price o f shoes is noted but slight concessions have been granted in a number o f cases. During May, sales decreased 30.5 per cent from those o f April and were 23.2 per cent less than in May, 1923. Stocks show a small decrease as compared with last month and last year, but collections have become slower, the ratio o f accounts outstanding to sales rising from 217.8 on April 30 to 288.4 on M ay 31. It was 236.9 on May 31, 1923. + + + + 3.1% 6.9“ 4 .0 “ 4.1 “ 3 .0“ 15.3“ 1.1“ 3.8“ -1 0 .8 % - 1 2 .8 “ + 3.2“ + 8 .6“ + 7.7“ + 3 .1“ + 4.5“ -1 0 .6 “ + + - 8.3% 3.7“ 2.1 “ 1.2“ 2.0“ 4.3“ 0.5“ 3.1 “ Ratio of accounts outstanding to sales May 1923 May 1924 April 1924 May 1923 - 6.3% + 1.0“ - 8.1 “ - 1.4 % + 0 .5“ + 6.1“ - 4.0“ -1 0 .4 “ 288.4% 142.3 “ 263.4 “ 107.3 “ 167.6 “ 365.6 “ 146.0“ 158.8“ 217.8% 139.7 “ 260.8 “ 112.4 “ 170.3“ 357.5 “ 141.2“ 140.4 “ 236.9% 135.8“ 238.2 “ 106.3 “ 151.5 “ 299.7 “ 133.0 “ 155.2 “ Little if any improvement in the wholesale drygoods trade is shown by the preliminary reports on June business received by this bank. Drygoods As is to be expected at this sea son, however, the number o f orders booked for early autumn delivery has increased, but it is still true that the great bulk o f the buying is in small lots for prompt delivery. Prices are about stationary except for hosiery which again declined, lower quotations having been named for silk, silk and fibre and cotton lines. Hosiery, wash goods, notions, laces and underwear are the articles for which the best demand is noted. Wholesalers continue to buy with great caution and almost wdthout exception the statements show that purchases for next autumn’s trade are smaller than they were at this time in 1923. During May, sales were 3.1 per cent less than in April and decreased 16.9 per cent from those o f May, 1923. Stocks on May 31 were smaller by 4.0 per cent than on April 30, but were 3.2 per cent heavier than on May 31, 1923. Last month stocks were larger by 10.3 per cent than they had been a year previous, this shows that efforts towards the reduction o f stocks have been successful. Collections have not improved, the ratio o f accounts outstanding to sales being 263.4 on May 31, 260.8 on April 30, and 238.2 on May 31, 1923. Sales o f jewelry during early June are reported to be smaller than they were last year, with demand only fair. Some reports state that Jewelry diamonds are selling better and that the request for watches re mains good. V ery little buying, however, is recorded for future delivery, for retailers, as is usual when prices are without change, see no reason to stock up. W hole salers, too, state that their purchases are smaller than at this time last year. In the past two years May sales have been larger T hird F ederal R eserve D istrict }924 than those o f April and this year they also increased, but the gain was less, being only 2.4 per cent. A s com pared with those o f May, 1923, they were 13.7 per cent smaller. Collections are slower, the ratio o f accounts outstanding to sales being 365.6 on May 31, 357.5 on April 30, and 299.7 on May 31, 1923. Stocks are heavier by 15.3 per cent than they were a month before and by 3.1 per cent than they were on M ay 31, 1923. The net sales o f 32 hardware firms in the Third Fed eral Reserve District were .4 per cent greater in May than they were during April, but Hardware were 8.3 per cent less than in May, 1923. Our index o f hard ware sales, based on the average monthly sales in 1923, stood in May at 101, which was the same as the number m the preceding month, but 14 points below the figure for May, 1923. The demand for hardware is only fair and is not as good as it was at either this time last month or a year ago. Building materials and farm hardware compose the majority o f shipments. Prices in many instances are lower than they were a month ago. A s compared with those at this time last year, they are in every case either unchanged or lower. A record o f stocks compiled by us from monthly re ports o f wholesale dealers in the district discloses that during May supplies on hand were 3 per cent smaller than they were in April, but 7.7 per cent larger than in -May o f last year. Collections are only fair. The ratio of accounts outstanding to sales was 167.6 in May as against 170.3 in April and 151.5 in May, 1923. The wholesale drug market is less active than it was m May and sales are about on a par with those o f June, 1923. Patent medicines, toilet Drugs articles, and staples form the bulk of the present demand. Botani cal drugs are in fair request, but prices are slightly lower than they were a month ago, although they dis play an upward tendency. Drugs and fine chemicals are also a trifle cheaper than at the close o f May and are in fair demand. The following table shows the Price indexes o f 40 botanical drugs and o f 35 drugs and fine chemicals as compiled by the “ Oil, Paint and u rug Reporter.” Price index of 40 botanical drugs M a y 26.. June 2 June 9 June 16 Price index of 35 drugs and fine chemicals 1924 1923 1924 1923 139.5 136.8 131.8 136.8 145.2 141.3 141.1 139.9 200.3 200.3 200.1 199.5 171.6 172.2 182.2 183.7 In May wholesale drug sales were 4.7 per cent smaller than in April, and 0.8 per cent less than in May, ii 1923. Stocks at the close o f May were slightly smaller than at the end o f April and considerably smaller than at the close o f May, 1923. The ratio o f accounts out standing to sales was, 142.3 in May, as compared with 139.7 in April and 135.8 in May, 1923. Business in electrical supplies has not improved dur ing the past m onth; reports received by this bank state that sales are either unchanged or Electrical smaller and that trade is consupplies sidered either poor or fair. Prices generally are unchanged but some quotations are lower. M ills’ supplies for cement and brick manufacturers are in fair request and supplies o f wiring devices and house hold appliances are moving to builders and dealers. Collections are fair. Sales during May were lower by 14.3 per cent than in April and by 12.5 per cent than in May, 1923. Col lections are slower, as is shown by the ratio o f out standing accounts to sales, which was 158.8 on May 31, 140.4 on April 30, and 155.2 on May 31, 1923. Stocks increased during May and were 3.8 per cent heavier on May 31 than on April 30; they were smaller, however, by 10.6 per cent than on May 31, 1923. Wholesalers report that sales are smaller than they were in May or in June, 1923. In general, business is barely fair, newsprint being the Paper only important grade o f paper that is in good demand. The call for book and fine papers is fair, but not as heavy as it was last month. Cardboards, box cover papers and some grades of wrapping paper are selling slowly, as are most paper boards. Prices in the open market dis play considerable weakness although most contract prices are firm. Jobbers’ stocks are moderate and about the same in size as a month ago. Collections are fair, but a trifle slower than they were last month. May sales were 3.8 per cent smaller than in April and 12.5 per cent less than in May, 1923. The ratio o f accounts outstanding to sales was 146.0 in May, as compared with 141.2 in April and 133.0 in May, 1923. The demand for groceries is fair and about the same as it was last month. Sugar, beverages, 1923 pack canned fruits and vegetables, preGroceries serving jars, and staples consti tute the bulk o f present sales. The volume o f future delivery orders for canned goods, which are now being solicited by the jobbers, compares favorably with the amount o f orders received a year ago. Prices are practically unchanged, as about the same number o f commodities have advanced as have declined. Sugar, dried fruits, canned milk, and sardines are cheaper than they were a month a go; but butter, eggs, canned fruits, rice and flour are higher. Jobbers’ stocks are smaller than they were a month ago, but are about the same as they were in June, 1923. Sales of groceries at wholesale in May were 6.7 per cent larger than in April, but 2.2 per cent less than in 12 T he B usiness R eview May, 1923. The ratio o f accounts outstanding to sales decreased from 112.4 in A pril to 107.3 in May. CONFECTIONERY M ost manufacturers o f candies report that the demand is not as good as it was in June, 1923, and that the usual seasonal dulness, which is experienced each summer, is more pronounced than it was a year ago. Retailers and jobbers are purchasing very closely and recent price cuts made by many manufacturers have further retarded buying. The new tax law as passed at the last session o f Congress, provides for the dis continuance o f the excise tax upon candies on July 1, but many manufacturers have already reduced prices and will absorb the tax themselves until it is removed. All manufacturers o f hard candies state that their sales are not as large as they were last June and the same condition is reported by the majority o f makers o f cho colates and chocolate-coated candies. In a few cases, however, where manufacturers have opened additional sales territory, business has been slightly larger than it was a year ago. Makers o f bar chocolate, baking choco late, and cocoa, however, report that the demand is good and slightly greater than it was in June, 1923, although not as heavy as it was last month. The average o f factory operations in this district is about 60 per cent o f capacity. A ll factories are operating on a hand to mouth basis and none o f the manufacturers reporting to us has more than one week’s business on hand. Candy prices are weak and show a downward trend. Many manufacturers have lowered their prices, the reductions varying from 5 to 8 per cent. Bar chocolate and cocoa prices, however, are firm. Sugar is consider ably cheaper than it was a month ago and about 15 per cent lower than on May 1. Glucose also shows slight weakness but most other raw materials are unchanged in price. Finished stocks at the factories are moderate and stationary; this is also true o f supplies o f raw materials. The supply o f skilled and unskilled labor is ample and wages are unchanged. Collections are fair, but not as good as they were a year ago. BUILDING Fifteen cities in the Third Federal Reserve District report that during May, 4,254 building permits were issued representing a total estimated cost o f $16,363,575. Though the number o f permits granted was only 306 smaller than in April, the total cost was less by $11,861,598. Most o f the decline occurred in Phila delphia where the total cost during the month amounted to $10,940,375, a loss o f $8,005,885 from the figure in the preceding month. On the other hand, the number o f permits issued in that city increased from 1,582 to 1,735, a gain o f 153. In May, 1923, 4,100 permits were issued in the entire district at a total estimated cost of $18,917,274, o f which 1,566 at a value o f $12,709,660 J uly were taken out in Philadelphia. In Allentown, Altoona, Atlantic City, Camden, Harrisburg, Lancaster, Reading and W ilkes-Barre, the estimated cost was less than in April, but in Williamsport, York, Scranton and Trenton it was greater. In Wilmington and Bethlehem both the number o f permits granted and the estimated cost were larger than in the preceding month. On June 1, the building cost index compiled by the Aberthaw Company stood at 199, a decline o f 1 point from the figure for May 1. Partly on account o f the inclement weather during the first half o f June, the call for bricks has been barely fair and at present is not as Bricks good as it was at this time last month or a year ago. Unfilled orders are somewhat smaller than they were in May and o f those now on the books the greater part are for de livery within 60 days though some are for up to and beyond 90 days. Few manufacturers are running at full time and some plants are closed down altogether. The average rate o f those reporting to us is approxi mately 57 per cent o f capacity, which is lower than it was a month ago. Orders on hand will insure the maintenance o f present production schedules for from 1 to 3 months, the average period being close to 7 weeks. Prices are inclined to be weak and quotations on some grades o f common and face bricks are lower than they were a month ago. Some refractories report that, though prices o f fire bricks are unchanged from those quoted in May, they are far from firm. Resistance to present prices o f building bricks is attributed in part to the increasing use o f substitute materials and to the fact that considerable supplies o f old bricks are avail able, particularly in Philadelphia. In this market on June 21, face bricks were quoted at from $28 to $40 per thousand. Stocks o f both finished bricks and raw materials are moderate and for the most part stationary though supplies o f the former show a tendency to increase. The supply o f both skilled and unskilled workers is sufficient and in several instances plentiful. A few re ductions in wages o f both classes occurred during the month. Collections are fair and are much the same as they were a month ago but are not as satisfactory as they were at this time last year. The demand for lumber is from poor to fair and is not as strong as it was this time last month or a year ago. The call for hardwoods, in Lum ber general, is moderate, but lately there has been an increase in the number o f requests for floorings. Spruce, hemlock and cypress in the cheaper grades are moving rather slowlyYellow pine is in better request than it was a m onth ago, but there has been little if any improvement in the demand for white pine. Practically all manufacturers T hird F ederal R eserve D istrict 1924 13 BUILDING PERMITS Third Federal Reserve District Permits Allentown.......... 114 Altoona.............. 275 Atlantic City . . . 178 Bethlehem......... 71 Camden............. 169 Harrisburg........ 80 Lancaster.......... 123 Philadelphia. . . . 1,735 Reading............. 355 Scranton ............ 231 Trenton............. 267 202 Wilkes-Barre... . Williamsport... . 140 160 Wilmington....... Y ork. . . . 254 Total.............. 4,354 Operations 168 287 178* 71* 173 100 135 2,731 358 231* 293 202* 140* 160 254 5,481 January to May, inclusive May, 1923 May, 1924 Estimated cost Permits Operations $501,975 389,556 374,157 278,581 249,235 297,425 176,350 10,940,375 383,677 762,090 597,470 500,058 205,932 432,087 274,607 114 253 180 69 115 111 144 1,566 405 210 223 159 149 130 272 137 259 180* 69* 172 122 189 2,298 456 210* 284 159* 175* 130 272 $16,363,575 4,100 5,112 1924 1923 Number Estimated cost Number Estimated oost Estimated cost $352,115 365,763 1,086,982 226,235 1,143,725 267,050 435,925 12,709,660 591,975 351,852 714,017 254,777 34,942 231,977 150,279 445 837 1,314 199 424 445 446 5,980 1,419 626 725 486 366 496 739 $2,766,620 1,619,302 5,091,707 744,362 4,324,187 4,296,175 1,555,460 66,808,220 2,675,905 1,711,760 3,340,068 1,213,214 609,682 1,733,615 1,215,755 $90,070,925 14,947 $99,706,032 $2,503,300 1,637,721 2,469,569 681,580 2,061,759 3,665,665 2,580,305 61,459,605 2,949,327 2,189,725 2,495,839 1,766,522 550,427 2,040,702 1,018,879 488 898 821 223 595 446 487 6,767 1,279 775 976 694 484 532 862 $18,917,274 16,327 * Operations not reported. NEW BUILDINGS AND ALTERATIONS 1924 1923 Alterations New Buildings Permits Allentown........ Altoona............ Camden.. . Harrisburg. . Lancaster........ Philadelphia. . . Reading.. Trenton. . . . Williamsport... Wdmington. . . . York. 79 104 66 67 55 941 103 241 54 124 93 Oper ations 133 116 70 85 67 1,917 106 267 54 124 93 Estimated cost Permits Oper ations Estimated cost Permits $463,475 318,412 193,170 285,650 103,845 10,238,070 288,527 528,6S0 170,803 398,729 228,307 35 171 103 13 68 794 252 26 86 36 161 35 171 103 15 68 814 252 26 86 36 161 $38,500 71,144 56,065 11,775 72,505 702,305 95,150 68,790 35,129 33,358 46.300 92 94 68 91 62 817 106 196 66 94 76 and dealers reporting to us state that prices are weak and lower than they were a month ago. Although there have been no drastic reductions in quotations, pur chasers have been able to obtain sizable concessions from time to time. Stocks o f finished lumber in the hands of both manufacturers and dealers are described as either moderate or heavy, but supplies o f raw materials in the hands o f the former are moderate and stationary. Unfilled orders now on the books are some what smaller than they were at this time last month and ° f these the greater part are for delivery within 60 days. There are none for shipment beyond 90 days. Manufacturers reporting to this bank consider from 50 to 60 hours a week as their operating capacity, but the average rate at which they are running is less than 80 New Buildings Oper ations 115 100 125 102 107 1,518 157 256 75 94 76 Estimated cost $298,915 322,620 1,126,450 251,500 380,625 12,053,200 442,675 702,978 29,035 213,873 84,125 Alterations Permits Oper ations Estimated oost 22 159 47 20 82 749 299 27 83 36 196 22 159 47 20 82 780 299 28 100 36 196 $53,200 43,143 17,275 15,550 55,300 656,460 149,300 11,039 5,907 18,104 66,154 per cent o f full time. Unfilled orders being prepared will insure the continuance o f present schedules for from 30 to 60 days. The supply o f both skilled and un skilled labor is either sufficient or plentiful and no wage changes have been reported during the month. Collections, though fair, are not as prompt as they were in May or at this time last year. A t times during the past month, the call for paint has been fairly good, but on other occasions the demand has been scarcely fair. Generally Paint speaking, however, it has not been as strong as it was at this time last month or a year ago. Recently the demand for colors in oil strengthened, but the call for dry pig ments has been rather light. Lithopone and litharge T he B usiness R eview H have been moving in fairly substantial volume, the bulk o f which was composed o f contract deliveries. Several declines in prices have occurred during the month, chief among which have been in those o f dry colors, litharge and red lead. Quotations for lead pig ments are at practically the same levels as those listed a month ago, notwithstanding a recent reduction in the price o f pig lead. On June 21 linseed oil was quoted at 94 cents per gallon for carload lots in cooperage, which was the same as the spot price listed four weeks ago. Manufacturers reporting to us state that stocks o f both finished goods and raw materials are fairly light and are decreasing. O f orders now on the books very few are for delivery beyond 60 days and, as the average rate o f operations is estimated to be about 60 per cent o f capacity, the filling of these orders will not insure the maintenance o f the present rate for much longer than one or two weeks. Manufacturers say that from 50 to hours per week is regarded as full running time. The supply o f both skilled and unskilled workers is sufficient and no wage changes have been reported dur ing the month. On May 15, 1429 employees were on the payrolls o f 13 paint and varnish establishments in this district, a decline o f 1.9 per cent from the number of workers employed on April 15. Total weekly wages paid increased from $39,146 on the latter date to $39,294 on the former. Collections are fair and are about the same as they were a month ago and in June, 1923. 52l/ 2 Closely following present market conditions in the building industry, there has been a slackening in the demand for pottery during the Pottery past month and the call is now, in several cases, even poor. On the other hand, one manufacturer o f plumbing earthen ware states that the demand for his product is still good even though requests have not been as numerous as they were a month ago. Practically all are agreed that the market during June, 1923, was in a consider ably more active condition than it has been during the current month. Most o f the orders now on the books are for delivery within 60 days though a substantial number are for shipment up to and beyond 90 days. Prices are in most instances firm and unchanged from those prevailing at this time last month, but some weakness resulting from competition is reported. This fact is especially true in cases in which new business is being solicited and considerable resistance to present prices has resulted. Quotations for raw materials are firm and, in a few cases, are slightly higher than they were a month ago. Stocks o f finished goods are moderate or light and are increasing, though a few firms carry no stocks whatever as they manufacture only on order. Supplies o f raw materials are either m od erate or light and are for the most part stationary. J uly Manufacturers from whom we receive reports vari ously estimate the number o f working hours considered as weekly capacity to be from 44 to 144, but the aver age is not over 50 hours per week. On that basis the average rate o f present operations is close to 74 per cent o f maximum output. Unfilled orders are smaller than they were a month ago, but a sufficient number yet remain to insure the maintenance o f present operating schedules for from three weeks to the balance o f the year, with an average period o f about 10 weeks. The supply o f both skilled and unskilled labor is either sufficient or plentiful and wages are the same as they were a month ago. Collections are fairly good and, though not quite as satisfactory as they were at this time last month, are as prompt as they were in June, 1923. IRON AND STEEL Expectations o f a more favorable outlook in the iron and steel industry, which were commented upon by observers a month ago, failed to materialize, and the situation, with a few exceptions, is no better than it was in May. The demand for pig iron and iron and steel castings is characterized as little better than poor, but manufacturers o f the latter products are consider ably encouraged because o f the increasing number o f inquiries from railroad and automobile interests. Iron bars are moving slowly and the call is less than it was a month ago. The demand for crude steel, too, is poor, but a fair call for scrap is reported, though orders received are nearly all for small quantities. On the other hand, plates and structural shapes are moving somewhat more briskly than they were at this time last month, most o f the deliveries being made to building contractors. Rolled steel bars and forgings are in poor request and the call for these is noticeably lighter than it was four weeks ago. Similarly, no improvement is apparent in the market for light and heavy hardware or for machinery and tools, and such orders as have been placed are for immediate shipment and represent, for the most part, urgent needs. Railroads are taking only moderate quantities o f steel rails and railroad spikes. The most favorable outlook in the industry is in the fabricated steel market. The demand from bridge and oil interests is stronger than it has been for sev eral weeks. But many miscellaneous articles such as ball bearings, pumps, sheet steel articles, steel shelvings, and charcoal iron boiler tubes are in poor or only fair request. Prices are, in many instances, weak and lower than they were a month ago. Some manufacturers have been willing to sacrifice profits in order to keep their plants running and, as this policy makes for concessions in price, very few quotations can be classed as partic ularly firm. The “ Iron A g e ’s” composite price index o f finished steel fell from 2.639 cents per pound on May r924 T hird F ederal R eserve D istrict 20 to 2.603 cents per pound on June 17, a decrease of 36 points. A similar computation o f pig iron prices revealed that during the same period the index de clined from $21.04 to $20.13 per ton, a reduction o f 91 cents. The present composite price o f the latter product is the lowest in more than two years. Quota tions for Philadelphia 2 X pig iron declined twice dur ing the month and on June 17 were listed at $21.76 per ton, representing a reduction o f $1.00 from the price quoted on May 20. Production continues to decline, though the curtail ment program has not been as drastic as it was during May. In that month the daily average rate o f output o f steel ingots was 24 per cent less than in April. P ro duction o f pig iron also fell off but not as abruptly. During May, output o f pig iron totalled 2,615,110 tons, as compared with 3,233,428 tons in April, a decline o f 618,318 tons or about 19.1 per cent. Unfilled orders o f the United States Steel Corporation fell from 4,208,447 tons on April 30 to 3,628,089 tons on May 31. This reduction o f 580,358 tons brings the total for May down to the lowest level since October, 1914. Last month four more furnaces were blown out in this dis trict leaving only 26 in the blast out o f a total o f 61. The industry as a whole is estimated to be operating at not more than 50 per cent o f capacity. 15 weekly wages paid declined from $1,506,086 to $1,335,913 in the same period. In the accompanying chart is shown the number o f wage earners and total wages paid in 40 identical plants each month since Jan uary, 1923. Collections are much the same as they were a month ago and may be described as fairly good. Reports received from 45 iron foundries in the Third Federal Reserve District show that production in May was 10 per cent less than in April, Iron foundries the largest falling off being re ported by gray iron foundries. Shipments and unfilled orders also declined, both in value and tonnage. Stocks o f pig iron and scrap were slightly heavier in May than in April. Shipments o f gray iron castings by 26 identical firms manufactur ing this product exclusively amounted to 3,431 tons valued at $472,007 in A pril and to 3,349 tons valued at $462,194 in May. Calculated on this basis the average value per ton was $137.57 in April and $138.01 in May. The accompanying table shows the totals for April and May in the principal operating items for the 45 report ing foundries with a monthly capacity o f 14,804 tons. IRON FOUNDRY OPERATIONS*1 Third Federal Reserve District April May Change Capacity of furnaces............ 14,804 tons 14,804 tons 0 Production of castings........ 7,612 “ 6,851 “ - 10 .0 % Malleable iron...................... 1,002 “ 982 “ - 2.0 “ Gray iron.............................. 6,610 “ 5,869 “ -1 1 .2 “ Jobbing..................... . 4,409 “ 3,989 “ - 9.5 “ For further manufacture . 2,201 “ 1,880 “ -1 4 .6 “ Shipments of castings.......... 5,142 “ 4,638 “ - 9.8 “ Value of shipments.......... $807,755 $749,543 - 7 .2 “ Unfilled orders..................... 6,602 tons 6,001 tons - 9 .1 “ Value of unfilled orders.. $1,127,877 $1,078,351 - 4 .4 “ Raw stock............................. Pig iron............................. 9,048 tons 9,122 tons + .8 “ Scrap................................. 3,624 “ + 4 .2 “ 3,777 “ Coke.................................. 2,366 “ .2 “ 2,361 “ The supply o f both skilled and unskilled labor is sufClent and, on account o f the restricted schedules o f operation, is in some instances plentiful. On May 15, ^°>457 employees were on the payrolls o f 48 steel works and rolling mills in this district, a reduction o f 8.4 per cent from the number employed on April 15. Total In our second month’s survey o f the steel foundry industry in this district we publish comparative figures for the principal operating items Steel foundries o f five identical establishments with a monthly steel making ca pacity o f 4,150 tons. Production increased less than 1 per cent while tonnage shipments were 7 per cent larger than in April. The value o f castings shipped, however, showed a reduction o f more than 20 per cent. Unfilled orders, both in tonnage and value, were larger in May than in April. Stocks o f both pig iron and scrap were considerably reduced in May. i6 J uly T he B usiness R eview STEEL FOUNDRY OPERATIONS Third Federal Reserve District Capacity of furnaces............ Production of steel castings. Shipments............................. Value of shipments.......... Unfilled orders.................... . Value of unfilled orders. . . Raw stock: Pig iron............................. Scrap................................. C oke.................................. April May Change 4,150 tons 2,356 “ 2,189 “ $473,855 4,118 tons $680,125 4,150 tons 2,373 “ 2,347 “ $378,742 4,310 tons $788,974 0 + -7% + 7 .2 “ -2 0 .1 “ + 4.7 “ + 16.0“ 2,108 tons 6,372 “ 596 “ 1,148 tons 3,966 “ 712 “ -4 5 .5 “ -3 7 .8 “ + 19.5“ COAL There has been some slackening in the demand for anthracite during the past month but this was expected since for obvious reasons the Anthracite market ordinarily quiets down to some extent at this season. On the other hand, some companies report that the call for stove sizes continues to be fairly strong, and some contracts for substantial tonnages have been signed for fall delivery. A s has been the case for several months, steam sizes are moving slowly owing in great part to competition with bituminous. On June 1 prices o f stove sizes were advanced from 10 to 15 cents following the customary procedure in the summer months. In Philadelphia, Company stove coal is now quoted at from $8.85 to $9.00 per ton and egg sizes, from $8.80 to $8.85 per ton. Quotations for barley are unchanged at $1.50 per ton. In the week ending May 31, production o f anthracite declined on account o f the observance o f Memorial Day, but since then output has again increased and in the week ending June was almost as great as at any time last month. In the table below figures are given showing output in tons for each o f the past five weeks and for the corresponding five weeks o f last year. 7 P r o d u c t i o n o f b o t h a n t h r a c i t e a n d b i t u m i n o u s in J a n u a r y w a s la r g e b u t s in c e th a t m o n t h b it u m in o u s o u t p u t h a s b e e n s h a r p ly c u r t a il e d . Source— U. S Geological Survey Only a slight improvement in demand for bituminous coal is apparent over that during May and the call for all grades is far from satisfactory. Bitum inous The majority o f deliveries are being made to public utilities and railroads, though tonnages taken by the latter have not been as substantial as they were a year ago. The belief fs expressed in one quarter that railroad interests are delaying their purchases and drawing on reserve stocks as a measure o f economy incidental to the falling off of freight and passenger traffic. Then, too, the reduced production schedules o f many coal consuming industries have made it possible for them to stay out o f the market longer than usual. PRODUCTION OF BITUMINOUS* Week ending PRODUCTION OF ANTHRACITE* Week ending May May May June June 17........................... 24........................... 31........................... 7........................... 14 .. ..................... 1924 1.898.000 1.850.000 1.294.000 1.846.000 1.823.000 net tons “ “ “ “ “ “ “ “ 1923 2.045.000 1.956.000 1.606.000 2.046.000 2.053.000 net tons “ “ “ “ “ “ “ “ * Compiled by the Geological Survey. Operators reporting to this bank are running at very close to capacity and, in general, the supply o f both miners and miners’ helpers is adequate. May May May June June 17........................... 24........................... 31........................... 7........................... 14........................... 1924 7.031.000 7.163.000 6.699.000 7.373.000 6.999.000 1923 net tons 10.270.000 “ “ 11.049.000 “ “ 10.091.000 “ “ 10.676.000 “ “ 10.573.000 net tons “ “ “ “ “ “ “ “ ♦Compiled by the Geological Survey. Spot prices are slightly lower than they were at this time last month and are from 25 to 50 cents below con tract quotations. In Philadelphia the spot price of Pool 10 coal is now from $1.70 to $2.00 which is the same as it was a month ago, but in instances in which large tonnages are involved, concessions are not uncom mon. Production seems to have found a level between !924 T h i r d F e d e r a l R 6 and 7 million tons per week which is substantially less than it was a year ago, as will be seen in the table on the preceding page, which gives figures showing output in tons for each o f the past five weeks and for the same periods in 1923. The low output during the wreek end ing May 31 was due to the occurrence o f Memorial Day. Many mines are closed down entirely and in no case are collieries reporting to us operating at more than 60 per cent o f capacity. It is doubtful if the average rate o f operations in this district exceeds 40 per cent of full running time. A s is to be expected, there is a surplus o f both miners and miners’ helpers. A s long as production o f iron and steel continues to decline no improvement can be expected in the coke market. Demand is light and, Coke even though output has been con siderably restricted in the past few weeks, production is still in excess o f consump tion. This has brought about a decline in prices o f both foundry and furnace grades. On June 17 furnace coke was quoted at $3.25 per ton and foun dry grades at $4.50 per ton, representing a reduction o f 25 cents in the price o f the latter grade from the quotation listed on May 20. In the week ending May 31, which included M em o rial Day, output o f beehive coke declined to a low level o f 135,000 tons, but during the following week it recovered somewhat. The total for the week endlng June 14 was the lowest in many months. The present rate o f production is about 40 per cent less than the average rate in 1923. In the table below figures are presented showing output in tons for each of the past five weeks. For purposes o f comparison the totals for each o f the five corresponding weeks of the year before are also shown. PRODUCTION OF BEEHIVE COKE* Week ending May May May June June 17 24 31 7 14 1924 182.000 157.000 135.000 151.000 131.000 net tons “ “ “ “ “ “ “ “ 1923 411.000 net tons 415.000 “ “ 395.000 “ “ 405.000 “ “ 406.000 “ “ *Compiled by the Geological Survey. Ihe output o f by-product coke has not declined as sharply as has that o f beehive. During the month o f May the total production o f by-product coke was 2,786,000 tons or 224,000 tons less than that o f April, 6ut was only 11 per cent below the monthly average Production for 1923. D e s e r v e i7 i s t r i c t OILS General opinion seems to be that the refinery demand for Pennsylvania crude oil is somewhat r j , lighter than is usual at this sea- ^'refined S° n ^ie ^ear’ ^ut one ^arSe producer in this district says that the call at present is heavier than during any similar season for years past. The chief reason for this, he continues, is that there has been an extensive advertis ing campaign advocating one hundred per cent use o f Pennsylvania oil products. The demand for many refined oils is not as good as was expected but is better than it was a year ago. The late spring, attended by extremely unsettled weather, has had an unfavor able effect on the markets for gasoline and lubricating oil, which depend to a large extent on the automobile trade. Sales o f the latter product have been cur tailed somewhat by the decline in industrial activity. The call for kerosene is rather dull, as is usually the case at this season, and fuel oil is not moving as well as it did a few months ago, partly for seasonal rea sons and partly because cheap coal has created con siderable competition. The demand for wax, on the other hand, increased noticeably after the end o f the first quarter, and according to one refiner this is the outstanding feature o f the petroleum market at this time. The call for asphalt fell off on account o f the rainy weather. During the first half o f May, prices o f Pennsylvania crude oils were reduced 25 cents per barrel and are now quoted at from $3.75 to $4.25 per barrel at the wells. Quotations on most refined products have changed very little if at all since the first part o f Feb ruary. Prices o f gasoline are slightly lower than they were a year ago but quotations for kerosene are higher. Fuel oils rose somewhat in price at the begin ning o f the second quarter but quotations for lubricat ing oils declined, though they still are higher than they were a year ago. Prices o f wax have fallen to some extent since the middle o f May. In this market on June 16 the tank wagon prices o f gasoline and kero sene were 20 cents and 14 cents, respectively. PRODUCTION OF PETROLEUM** Month 1924 1923 February........................ 55.454.000 barrels* 48,413,000 barrels 56,132,000 “ 59.729.000 “ 58,133,000 “ 59.194.000 “ * Barrels of 42 United States gallons. ** Compiled by the Geological Survey. Since February, production o f petroleum in the entire United States has increased susbtantially and is now greater than it was in December o f last year. i8 T he B usiness R eview Output in the Pennsylvania field also increased from 558,000 barrels in February to 628,000 barrels in March, and again to 659,000 barrels during April. The table on page 17 gives the monthly production o f petroleum in the whole country during the last three months for which figures are available. Figures for the corresponding three months o f the preceding year are also shown. Local producers store only comparatively small quantities o f crude oil for their own account but stocks held by them are beginning to increase as the season advances. Refiners report that supplies o f gasoline had been accumulating up to the first o f May but since then have decreased somewhat. Stocks o f fuel oil are from moderate to fairly heavy but those o f wax, asphalt, and kerosene are either moderate or light. Operations are at a fairly high rate and the supply o f labor is adequate. Collections are in the main satis factory but are not quite as prompt as they were a year ago. J uly PRICES OF DRUGS AMD CHEMICALS r* v . j 35 drug" » fine chemicals 140 25 commercial chemica[s 120 lO O August 1,1914 = lOO _ _ ________ ___ _______ ' *-------" 20 1923 1924 C o m m e r c i a l c h e m i c a l s h a v e b e e n m u c h s t e a d ie r in p r ic e d u r i n g t h e p a s t y e a r t h a n h a v e d r u g s a n d fin e c h e m ic a l s . Source— Oil, Paint and Drug Reporter CHEMICALS Keen competition, present depression in some o f the principal consuming industries, and weakness in prices have continued to affect the market for heavy chem icals in this district during the past month. The bulk o f business has been for spot delivery, although some dealers report that they have orders on their books for September shipment. Since mills are restricting their orders to small quantities, sufficient only to cover their immediate requirements, withdrawals on old contracts are not satisfactory. In consequence, new contracts, es pecially in bleaching powders and chlorines, are limited, and are usually made at lower figures than_last year. Demand for alkalies and bichromate o f soda, potash and oil chemicals is especially dull, owing primarily to the drastic recession in textile and leather trades. W hile charcoal and wood alcohol are reported to be selling slightly better than other wood chemicals, busi ness in methanol, acetate o f lime, and tar is very slow. N or is there any pronounced improvement in the mar ket for phosphates, potashes, and nitrogenous mate rials, the buyers o f which, particularly o f nitrate o f soda, are delaying their purchases. Although the pres ent market for dyestuffs and intermediaries is less active than last month, trading in dry pigments, such as lithopone, appears to show a slight improvement. During the past month paper, plate glass, and table glass industries offered a fair demand for chemicals, but makers o f bottleware continued inactive. The situation in barium products remains somewhat unset tled, though there seems to be some offerings o f imported material at concessions. Aside from the usual routine trading, conditions in fine chemicals are equally quiet, and prices remain unchanged. Dealers’ stocks o f finished goods are light and stationary, and supplies o f raw materials are generally moderate and easily obtainable. Chem ical plants in this district are operating at about 50 to 60 per cent o f single shift capacity, and the supply o f labor is adequate. W hile total weekly wage payments from April 15 to May 15 increased 0.3 per cent, the average weekly earnings increased 1.2 per cent during the same period. Principally because o f sharp competition and dulness in the market, quotations on both heavy and light chemicals are generally lower than they were a month ago, and buyers continue offering firm resistance to prices. The foregoing chart shows, however, that quotations for industrial chemicals on June 16, 1924, were 23 per cent higher than those on August 1, 1914, and on drugs and fine chemicals during the same period they rose 47 per cent. Collections in this district are on the whole satis factory. COTTON The effect o f the drastic curtailment in production in the cotton mills o f the United States is seen in the consumption figures issued by Raw cotton the Bureau o f the Census on June 14. These figures show that in April 480,010 bales were consumed and in May only 413,649 bales; but the most striking comparison is that with May, 1923, when the consumption figure was 620,854 bales. A t that time about 5,000,000 more spindles were in operation than were used this year. Exports, on the other hand, continue to show an increase as com pared with 1923, and the figures for M ay were 326,357 bales as against 160,358 bales in the previous year. The accompanying chart depicts the domestic and export demand for American cotton during the years *9*4 T hird F ederal R eserve D istrict since 1919 and the price o f spot cotton at New Y ork in that period. The latter part o f 1920 was a period of extreme liquidation o f all merchandise, but since then the trend o f cotton prices has been almost steadily upward, and the advance was particularly marked in the latter part o f the years 1921, 1922 and 1923. 19 SUPPLY AND TAKINGS OF AMERICAN COTTON* Season of 1923-1924 In bales Season of 1922-1923 Season of 1921-1922 Visible supply, American, at end of previous season (July 31)........................... Crop in sight, American, on June 20.............................. 10,976,537 10,826,714 10,330,597 Total.............................. 11,846,505 12,794,873 14,443,248 869,968 Visible supply, American, on June 20.............................. World’s takings of American to June 20......................... 1,322,092 1,968,159 1,221,364 4,112,651 2,687,773 10,524,413 11,573,509 11,755,475 * Figures compiled by the New York Cotton Exchange. number o f unchanged. Sources— Cotton Facts, Journal of Commerce, Department of Commerce In the accompanying table is shown the position o f the last crop as compared with that o f the two previous years. A s a market factor, the lack o f demand by American mills continues to offset both the present short supply o f cotton and the unusually poor condition o f the new crop on May 25, as shown by the Govern ment report issued on June 2. This is indicated by quo tations for spot cotton in New York, which fell by June 9 to 28.85 cents after remaining fairly steady between May 21, when the quotation was 32.50 cents, and June 2, the day o f the Government report, when it was 32.75 cents. Another confirmation o f the lack o f home market demand is the reduction during the month ° I about 175 points in the premium o f the July over the October option in New York. Since June 9 a slightly unproved demand for cotton goods has been reflected in a stronger raw cotton market, spot cotton advancing to 29.65 on June 21. Since the date o f the report the weather has on the whole been more favorable for the growth o f the crop, and some private reports have increased their estimates ° I acreage planted. Production o f cotton goods has decreased further during the month, but this curtailment has not been as general as in the previous month. Cotton goods In fact, several firms state that their operations are larger than they^ were a month a g o ; these firms, however, make specialties such as surgical supporters and trusses. A reports, too, state that production is The National Association o f Finishers o f Cotton Fabrics reports to the Federal Reserve Board that iden tical factories in the Third Federal Reserve District operated during May at 71 per cent o f their total average capacity as against 76 per cent in April. In these factories the billings during May totalled 7,078,049 yards o f white goods and 5,142,631 yards o f dyed goods as compared with 6,429,698 yards o f white goods and 5,769,535 yards of dyed goods in April. Prices have declined slightly, but on this point also the statements received are by no means uniform and a good proportion report that their quotations have not changed. The demand continues poor and it is doubt ful whether it is large enough to absorb even the pres ent production, although many o f the reports received indicate that stocks o f finished goods are not increasing. A n equal number o f firms describe them as heavy, as moderate, and as light. Since the first week in June sales appear to have increased slightly in some lines, among which are sheetings and grey goods, and a number o f good sized orders were booked, but the prices obtained were unsatisfactory. Turkish towels, too, are a trifle more active but upholstery tapestries, curtains and table cov ers show little or no improvement. The survey o f employment and wages made by this bank shows that in 24 plants making cotton goods the number o f employees decreased 9.0 per cent between the week o f April 15 and that o f M ay 15 and that total weekly wages paid were 10.3 per cent less in the latter period. Average weekly earnings, however, were only 1.4 per cent lower. These figures indicate that the curtailment in production was accomplished largely through a reduction in the working force and that those retained were working on about the same sched ule as formerly. T he B usiness R eview 20 Collections are unchanged from the previous month and in a majority o f the reports are classed as fair. WOOL Conditions in the Philadelphia market for raw wool continue quiet, and prices are tending downward. Current orders are limited mostly Raw wool to quantities sufficient to cover the immediate needs o f manu facturers o f yarns and goods, as the demand for these products is dull. W hat trading is being done locally is reported to have favored for the most part such better grades o f wools as three-eights and quarterbloods, and to some degree medium grades. Because o f the reduced operations in worsted mills, some deal ers find a slight scarcity o f noils, with a consequent firmness in prices. But the demand for carpet wool in this district is especialy quiet, chiefly because the makers o f carpets are meeting with poor business and are either closing down their plants or are drastically curtailing their production. Supplies o f most wools here are limited, and receipts o f the new wool, which has recently begun to come in, are not large. Contracting for the new clip wools in the west is now less active than it was a month ago. According to in for mation received lately by the Department o f Agriculture there seems to have been some tendency on the part o f the western growers to resist the decline in prices but recent buying indicates that the western growers are willing to grant concessions in order to sell their wools rather than hold them or ship them on consignment. Largely because o f the present contraction in business and weakness in prices, the Eastern market for western wools does not seem to offer any great encouragement at this time, even in the face o f the openings in the heavy-weight season. Quotations are now on a lower level than they were a year ago, and buyers are generally resisting prices. A s is shown by Dun’s index o f ninety-eight quotations, prices for raw wool averaged 77.34 cents per pound on June 14 in contrast with 83.93 cents per pound last year. And the last auction sales in London show that the foreign situation has been somewhat irregular, with prices receding, the chief weakness being in the finer grades o f wools, both merinos and cross breds. But the disparity between foreign and domestic markets still prevails, as is evidenced by the re-exportations o f the lower grades o f wool, which, however, have not been as large as last year. Imports o f wool into this country were smaller than in the preceding month or a year ago, the prices abroad being relatively higher than at home. During May imports amounted to 17,353,190 pounds, as compared with 29,456,578 pounds in April and 47,172,652 pounds a year ago. Collections in the Philadelphia market appear to be satisfactory. J uly Poor business in woolen and worsted goods has con tinued to depress the market for yarns and, as compared with the previous mouth, demand Woolen and for both weaving and knitting worsted yarns yarns shows no improvement. In most cases mills making carpets are operating on short time and some plants have been closed down. A s a result, producers are making only small specifications for yarn on old contracts and new business with the carpet trade is limited. Manufacturers o f knit goods, men’s wear, and dress goods have curtailed operations drastically with the result that current consumption of yarns is relatively small. Moreover, buyers show little inclination to anticipate their future requirements o f yarn. In consequence most spinners find that sales are unsatisfactory and that the bulk o f the business on their books is for delivery during the next sixty days. A few concerns, however, by granting reductions in price have been able to book considerable business for future shipment. Rather than accumulate stocks o f yarn, spinners have restricted production. Curtailment has increased dur ing the past month and the majority o f producers are running at less than 60 per cent o f single-shift capacity. W o o l consumption in this district, which declined nearly 18 per cent during April, showed a further decrease o f 20.8 per cent during May, as shown by returns from 79 establishments in this district. Stocks o f yarn are for the most part moderate, and supplies o f raw mate rial are fairly light. Returns indicate that the supply o f labor exceeds the demand. Collections, in general, are fair though in some cases they are reported to’ be poor. They are not as prompt as they were last month or a year ago. Current demand for woolen and worsted fabrics is, on the whole, unsatisfactory. W ith manufacturers the ww, j j light weight season is now w on ted goods Practica” y over and this is Partl>' responsible tor present quiet con ditions in the market for piece goods. But in spite of the fact that initial business in heavy wreight fabrics was disappointing, duplicate orders have been few. Buyers have preferred not to anticipate their future requirements and, as in other branches o f the textile trade, most o f the orders on the books o f producers are for delivery during the next sixty days. M anufac turers find that demand is less active than either last month or a year ago, though in a few cases reports indicate that buyers have displayed more interest than they did during May. Business in men’s wear has prob ably been somewhat better than that in dress goods. By experimenting with various cloths, however, at least one enterprising maker o f women’s cloakings in this district has produced a fabric which has apparently met with favor among buyers. W oolen cassimeres are in dull request but some producers have been able to T hird F ederal R eserve D istrict 1924 - utilize most o f their equipment without accumulating finished goods. The majority o f mills, however, have curtailed oper ations drastically, and in several cases manufacturers are running at only from 10 to 30 per cent o f single- C u r t a i l m e n t i n t e x t il e m i l l o p e r a t i o n s is i n d i c a t e d b y t h e c o n s i d e r a b l e r e d u c t i o n in t h e w a g e t o t a l p a id b y e s t a b l i s h m e n t s in P e n n s y lv a n ia a n d N e w J e r s e y . Source— Federal Reserve Bank of Philadelphia shift capacity. The supply o f labor is plentiful. Returns from 32 establishments making woolen and worsted products in Pennsylvania and New Jersey show that average weekly wages have decreased sharply since March and that total wages paid during the first five months o f 1924 were considerably smaller than during a similar period last year. This is indicated by the fore going chart 1. Notwithstanding curtailment, demand as a rule has not kept pace with production and stocks ° f finished goods in the hands o f producers are reported to be fairly heavy. Supplies o f raw material are moder ate and are tending to decrease. Prices for raw mate rial are somewhat lower than in May. A s compared with last month, quotations on finished goods, though weak, remain substantially unchanged. R is reported, however, that concessions are obtainable and a few concerns have actually reduced prices. Resistance to quotations on the part o f buyers is strong. Collections vary but in general they are satisfactory, though not as prompt as a year ago. SILK Coincident with the general slump in business, activfly in the domestic market for raw silk has been restricted. Manufacturers o f silk Raw silk ' goods have displayed great cau tion in making future commitrnents for raw material and the orders placed have been 21 chiefly to cover their current requirements. This is not unusual, however, in view o f the continued slow move ment o f finished goods and the steady decrease in quo tations on raw silk. That prices have declined more or less steadily since the latter part o f 1923 is indicated by the accompanying chart. Kansai double-extra cracks dropped from $10.50 per pound on October 1 to $8.20 on January 2 and on June 9 the quotation reached $5.20 per pound, the lowest level since 1917. Weakness in raw silk has been largely due to inactiv ity in the domestic market but fluctuations in yen exchange have also exerted some influence on prices. Since last October rates on yen exchange have declined about 18 per cent while quotations on silk have dropped almost 50 per cent. Recently the yen has recovered somewhat but prices for raw silk have failed to advance. Depression in the domestic silk industry is reflected by statistics o f the Silk Association o f America. Dur ing the first five months o f this year deliveries o f raw silk to American mills were 14.1 per cent less than during the same period in 1923, and imports were 12.4 per cent smaller. Both imports and deliveries to mills increased during May, but the former showed a greater gain than the latter with the result that stocks in ware houses increased somewhat. Supplies o f raw silk in the hands o f manufacturers are fairly light but stocks at Yokohama are reported to be considerably larger than they were a year ago. SILK PRICES AMD EXCHANGE RATE ON JAPAN EXCHANGE^ RATE » CENTS DOLLARS POUND % 1Z \ 120 ' \ \ lo Organzine silk > s < w \ 80 J kansai silk double e x ra c ro c k 6 lO O double extra crock y* y ^ 60 Exchange rate on Japan 4 40 2 20 1923 1924 O D u r in g t h e p r e s e n t y e a r tH e d e c l in e in s ilk p r i c e s Has b e e n a c c o m p a n ie d b y a f a l l i n g o ff in t h e J a p a n e s e e x c h a n g e r a t e . Sources—Silk Market Weekly Digest, Journal of Commerce As in most other textiles, business in broad silks has continued relatively quiet. Fall lines have been opened by some concerns at prices conSilk goods siderably lower than a year ago but advance orders are limited. Buyers as a rule have preferred to purchase only such 22 T h e B u s i n e s s goods as are needed immediately or in the near future. In consequence, spring and summer goods are in best demand, although these, too, have moved but slowly. The cold and unseasonable weather has been blamed to some extent for present slack sales o f silk goods, par ticularly o f georgettes. Most o f the demand is for piece-dyed fab rics; and the various crepes and wash silks, are probably selling most actively at the present time. Business in yarn-dyed goods has been compara tively dull, but recently one large producer has noticed improvement in the call for satin-faced goods, such as charmeuse, and for taffetas. Demand for narrow rib bons has continued better than that for the wide vari eties, but orders for the former are only for small quantities. Reports indicate that there has been a somewhat stronger request for prints. Owing to the reluctance o f merchants to order goods in advance and to the unsatisfactory spot sales, tne majority o f mills have restricted production and for the most part are running only from 40 to 60 per cent o f capacity. A s is indicated by the chart on page 21, monthly wages paid to wage earners in 58 plants in Pennsylvania and New Jersey have decreased steadily since January and the total for the first five months o f this year yas 16.5 per cent less than during a like period in 1923. Labor, both skilled and unskilled, has been in plentiful supply. Stocks o f finished goods in weavers’ hands are still fairly heavy, but supplies o f raw materials are rather light and in the majority o f cases they are decreasing. Because o f lower prices for raw silk and dull busi ness in finished goods, quotations on silk fabrics have continued weak. During the past month most producers have made reductions which in some cases have amounted to five or ten per cent. Collections, in general, are fair. Makers o f ribbons, however, find that they are not as prompt as last month or a year ago. Although one or two throwsters in this district have enjoyed a fair request for their products, business in thrown silk is for the most part Thrown silk poor. Both commission and in dependent throwsters reporting to this bank indicate that demand is less active than either last month or a year ago. The present unsatis factory situation has been largely due to dulness in silk goods and to the downward trend o f quotations on raw silk, but the general depression in the textile indus try has also had a sympathetic effect upon the market for thrown silk. Buyers lack confidence in the future and as has been the case for some time they have pur chased little thrown silk in excess o f their immediate needs. Quotations on thrown silk have been weak and irreg ular. A s is shown in the accompanying chart, prices for organzine double-extra cracks fell from about $9.35 per pound in January to $5.35 on June 20, a decrease R July e v i e w o f about 42.8 per cent. A number o f throwsters have reduced quotations during the past month. Some o f the reasons given by throwsters for the steady decline in prices are lack o f business, keen competition, and weak ness in raw silk. Operations in mills making thrown silk have been reduced. Most o f the thowsters in this district are operating at less than 60 or 70 per cent o f capacity and a few are running as little as a third o f their equipment. Unfilled orders show a decrease as compared with last month and at the present rate o f production they will insure operations for only from one to four weeks. Stocks o f thrown and raw silk in the hands o f throw sters are reported to be fairly light. The supply o f labor is sufficient. Collections, which are not as prompt as a year ago, are for the most part fair, though in a few cases they are not satisfactorv. HOSIERY Reports from hosiery manufacturers indicate that business has become decidedly spotty, and that those mills which are making novelties for men, women or children are enjoying the best trade. Considered as a whole, however, the market is less active than it has been in recent months, notwithstanding the fact that sales for export are said to have increased. The call for fullfashioned silk hosiery for women has slackened but some mills are busy and report a good demand for medium and light weights. The flesh colors continue to sell best and, as is to be expected at this season, white hosiery is in increased request. F or men’s wear, spe cialties o f silk and o f mixtures o f silk and fibre are in fair demand. For misses and children, fancy mer cerized length stockings are selling better than any others and several mills making these report that they are not only working night and day shifts but have a considerable volume o f orders booked ahead. Infants’ hosiery is usually offered at this season for next year’s delivery but up to the present few mills have shown their new lines. The trend o f prices continues downward, although a number o f manufacturers state that their quotations are unchanged as compared with those o f a month ago. Nearly all hosiery made either wholly or in part o f pure silk has been reduced in price because o f the lower cost o f hosiery tram, which has fallen about 10 per cent during the month. Operations in 336 identical mills in the United States, summarized in the accompanying table, show that production decreased in April as compared with March, but that orders booked during the month were larger during April. On April 30 unfilled orders also showed an increase as compared with the previous month but stocks o f finished hosiery were smaller. 1924 T F h i r d R e d e r a l HOSIERY INDUSTRY* March April 83,444 1,897,116 603,601 1,112,052 597,541 465,027 28,141 77,741 1,723,955 601,654 1,040,107 514,253 434,428 18,303 Total production.......................................... 4,786,822 Total shipments during month................... 4,622,280 Total finished products on hand, end of 4,410,441 4,340,774 Total orders booked during month............. 3,851,480 dotal cancellations received during month . 241,929 lotal unfilled orders on hand, end of month 7,424,870 8,874,765 4,347,463 210,294 7,461,477 Production: Full-fashioned, men..................... Seamless, men............................... Full-fashioned, women................. Seamless, women.......................... Boys’ and misses’, all styles........ Children’s and infants’, all styles Athletic and sport, all styles....... 23 i s t r i c t state that in early June also business continued to decrease. United States In dozen pairs D e s e r v e month.................................................... 8,920,866 *Compiled by the Bureau of the Census. I f conditions in this district are representative o f the whole country, production again decreased in May, for preliminary figures for the same 116 mills in the Third Federal Reserve District, as summarized below, show a reduction in output as compared with April. This reduction, however, was almost entirely in men’s and ln children’s and infants’ hosiery. Cancellations were considerably larger; this is ascribed by some manufac turers to the lowering o f prices. Reports to this bank The price o f raw materials has been falling except that o f rayon (artificial silk) which is unchanged. Silk prices have declined sharply and hosiery tram now is lower than at any time since 1917 and cotton, mercer ized, and wool yarns have been purchased at recessions. Stocks o f finished hosiery are moderate and except in a few cases have not increased during the month. In fact, over 40 per cent o f the reports received by this bank state that they are lower than they were a month ago. The supply o f labor, both skilled and unskilled, is adequate and wages are unchanged. Collections are fair. UNDERWEAR Further restrictions o f production, continued in activity in demand and somewhat slower collections have featured the market for underwear during the past month. Unseasonable weather has hindered sales o f light weight garments in retail channels, with the re sult that duplicate orders from jobbers and retailers have been unusually small. Demand for heavy weight underwear is very irregular. Initial orders are disap pointing and until retail stocks begin to move, little business is looked for in the primary market. It is re ported that jobbers are awaiting the August cotton re port before entering the market for more heavy weight HOSIERY INDUSTRY* Third Federal Reserve District Men’s In dozen pairs Full-fashioned April Production............................................... Shipments during month.................................. finished product on hand at end of month. . . . Orders booked during month.......................... Cancellations received during month............ Unfilled orders on hand at end of month... . 44,658 34,785 49,709 28,797 1,568 44,433 May 31,158 33,572 31,343 41.843 '245 49.026 Boys’ and misses’ April Production........ Shipments during month................................. inished product on hand at end of month... raers booked during month.......................... ancellatJ008 received during month............. Timed orders on hand at end of month....... 21.616 32,180 63,152 36,241 543 26.021 Preliminary report compiled by the Bureau of the Census. May 22,185 30,755 56,434 16,628 2.615 10,151 1 Women’s Full-fashioned Seamless April 317,098 298,237 526,489 213,551 17,301 392,970 May 290,944 305,785 325,311 262,395 434,147 533,405 660,397 221,237 5,508 14,858 348,071 1,041,311 Children’s and infants’ April 111,384 151,251 302,117 84,354 6,545 229,824 April May 98,992 145,147 254,077 ' 67,956 11,191 124,858 May 315,415 332,784 415,904 243,049 7,738 955,346 Seamless April 4,034 5,411 15,109 5,137 1,390 5,145 May 4,206 6.358 13,082 3,799 1,235 1,471 244,994 240,889 253,485 237,689 13,799 250,297 254,215 247,049 267,686 199,449 8,023 263,676 Total Athletic and sport April May April May 1,058,790 1,094,224 1,658,409 1,227,926 40,878 2,003,386 1,007,894 1,051,900 1,557,730 832,201 51,681 1,739,220 J uly T he B usiness R eview 24 garments. Fluctuations in raw cotton and the slow re tail movement o f underwear are largely responsible for the present conservatism and hesitation on the part of most buyers in making future commitments. The market for men’s and children’s underwear is a little better than for women’s, although both continue slow and dull. Curtailment o f production has continued during the past month, the average rate for all reporting firms being about 40 per cent, as against 52 per cent last month and 60 per cent two months ago. Most o f the orders are booked for delivery within the next 60 days, but a few makers o f underwear indicate that a fair per centage is for shipment after that period. A s compared with the previous month, the unfilled orders are smaller, and at the present rate o f production, they will insure present operations for about 30 days on the average. Supplies o f raw materials are moderate. N o difficulty is had in obtaining labor. Although the total o f wages paid decreased 0.1 per cent from April 15 to May 15, the average weekly earnings per employee were 0.9 per cent larger. Although buyers are offering determined resistance to prices, as in other branches o f the textile industry, none o f the underwear manufacturers report any change within the past month. Collections in this district are not as satisfactory as either last month or a year ago, but they are reported to be fairly good. FLOOR COVERINGS Production o f carpets and rugs continues to be cur tailed and is now down to a point lower than for several years. A number o f estimates have been published re garding the per cent o f plant capacity which is being operated at present and a figure as low as 30 per cent was put out by one authority, but this is probably too low and slightly more than 40 per cent is thought by many in the trade to be nearer to the correct figurp. Axminster mills, in particular, are making a greatly re duced quantity, in fact, a number o f these are closed down. The accompanying chart shows the production o f carpets and rugs in the years 1921 and 1923, divided into the principal kinds. The output o f all descriptions was much larger in the latter than in the former year. Following the reduction in wages made last month in the W ilton mills, a cut o f 10 per cent, and in some cases more has been announced by the makers o f A x minsters. But in mills producing other descriptions wages are, as a rule, unchanged. The survey o f employ ment and wages made by this bank discloses the fact that in 15 plants in Pennsylvania and New Jersey making carpets and rugs, the number o f employees de creased 6.9 per cent between the week ending April 15 and that ending May 15. Total weekly wages fell 14.1 PRODUCTIOM OF CARPETS AMD RUGS Axminsterx. Moquette Bgga Wilton gssa Tapestry velvet V7777\ Tapestry Brussels i - — i V«>ol x. paper fibre i------1 All other^ obv 1921 1923 O lO 20 30 40 50 60 70 80 90 MILL10MS OF Sq, YARDS T h e r e la t i v e l y la r g e in c r e a s e in t h e p r o d u c t i o n o f W i l t o n s in 1923 as c o m p a r e d w it h 1921 w a s la r g e ly d u e t o t h e s t r ik e in t h a t y e a r w h ic h c l o s e d t h e W i lt o n m i l l s f o r a n u m b e r o f m o n t h s . Source—Department of Commerce per cent, and average weekly earnings 7.8 per cent be tween those dates, as is shown in the table on page 4. In Pennsylvania alone, the number o f wage earners in 12 plants fell 8.9 per cent, and total weekly wages and average earnings were lower by 17.5 and 9.8 per cent respectively. Quotations for carpets and rugs are unchanged from those announced a month ago, with the exception o f an advance o f one dollar on the 9 by 12 size o f a wellknown make o f Axminster rug. Recently sales in most lines are reported to have increased somewhat. For the most part, however, buyers are covering only their immediate needs, the individual order being small, and bookings even for late summer and early autumn delivery are the exception. Stocks in manufacturers’ hands, because o f small production, are said to have de creased since the beginning o f June. Raw materials are, in some cases, lower in price; jute has fallen one cent per pound and cotton yarns have declined slightly. W o o l and worsted yarns hold remarkably firm, when the small sales are considered. A t the English auction o f carpet and wools prices de clined from five to ten per cent and a few reports state that quotations in this market are easing somewhat. Carpet and rug manufacturers say that they, too, are buying their supplies for immediate needs only. Linoleums, with the exception o f inlaid, and felt base goods are in good demand for prompt shipment, but little forward buying is reported. Plants are running on full time, except in the inlaid departments, and total production is about 90 per cent o f capacity. Prices of finished products are unchanged, but the trend o f raw material quotations is downward, though the changes have been small. Linseed oil is slightly lower and re' 1924 T hird F ederal R eserve D istrict ports from Argentine indicate that stocks o f seed in that market are large. Because o f increased produc tion, wide burlap, which had been in short supply, is now offered freely. Collections in the floor covering industry are reported as fair or good, but some companies state that small dealers are paying more slowly and that more o f them are in arrears in their settlements than in recent months. They explain this on the ground that retail sales have been retarded by the unusually cool and rainy weather. LEATHER During the past month the hide market has become niore quiet, sales have decreased, and prices, which are barely steady, are about the same Hides and skins as they were a month ago. A m er ican tanners by the end o f May bad covered their wants for the near future and European buying has been much less. The stock o f bides in the country, as reported by the Bureau o f the Census, was 4,277,958 on April 30. This is a decrease o f 8.8 per cent during April and is the smallest stock re ported since these figures were first collected in Septem ber, 1920. On April 30, 1922, the stock was 7,407,862, and on April 30, 1923, 5,553,091, so that the decline has been fairly steady during the past two years. 25 these quotations fail to attract tanners, though their purchases are probably larger than they were in May. On April 30 stocks o f calf and kid were 11.3 per cent and those o f goat and kid 10.6 per cent greater than on March 31. The supply o f calf skins, however, was con siderably below the average o f the past two years. The drastic curtailment in the production o f heavy leathers, which has been in effect for about a year, is now showing its effect clearly on Leather the stocks which in the face o f a slack demand, have been falling almost continuously since October. The following table compares the production and stocks o f April with those o f March and October. HEAVY LEATHER* Production during April compared with March, 1924 Backs, bends and sides.. . -3 .2 % Belting butts................... +4.8 “ Offal, sole and belting___ + 6 . 6 “ October, 1923 Stocks at end of April compared with March, 1924 -2 2 .3 % -4 .3 % - 6 .2 “ -2 4 .1 “ -2 .6 “ -2 .8 “ October, 1923 -1 3 .6 % - 5 .1 “ -1 5 .7 “ ♦Compiled from figures furnished by the Bureau of the Census. Sources— Dun's Review and Department of Commerce Calf skins also have been less active during the ^onth and Chicago packer skins have sold at 20 cents per as compared with cents a month ago. Sheep s |ns, under somewhat restricted trading, have eased in Pri<^e .and quotations for goat skins have fallen sharply °fb in the domestic and foreign markets. The prices o f many varieties are now down to pre-war levels and even Pound 21 Tanners report that during June inquiries for heavy leather have increased, but that actual sales are still small and the gain in business is slight. They anticipate, however, that within a few weeks shoe manufacturers will have booked more business and will enter the market for leather in a larger way. Prices are barely steady. The accompanying chart indicates that the price o f sole leather during the past three years has fol lowed closely that o f hides, and has usually advanced as stocks o f leather decreased and vice versa. The call for calf leather in men’s weights is less than it was a month ago, but for women’s shoes, sales are somewhat larger, especially in the light tan shades. Tan ners o f kid leather have in some instances made a fur ther cut in production, the total o f which is now esti mated to be less than 8,000 dozens per day as compared with 13,000 dozens some months since. On April 30 the stock o f finished kid leather was 23,348,284 skins, the largest since May, 1922. O f this total, tanners held 17,317,270 skins, the heaviest stock held by them since these figures were first collected in December, 1920. Since April, however, the demand for kid leather has improved somewhat and as output has been lowered, stocks are at present thought to be smaller than in April. The lower price o f goat skins has enabled tan ners to shade the price o f leather, especially in the medium grades in which were the principal accumula tions. Patent leather continues to be used largely for 26 T he B usiness R eview women’s shoes and is in better request than any other kind o f upper leather. Our survey o f employment and wages shows that 36 tanners during the week o f May 15 employed 2.3 per cent less people than during the week o f April 15. Total wages paid decreased 3.5 per cent and average weekly earnings fell 1.2 per cent in the same period. Sales o f leather belting have been decreasing during the month and are about 60 per cent of those o f last year. Buying is for immediate needs only and the individual orders are small. Prices are quoted by most belt makers as un changed, but some report that they are 10 per cent lower. Makers o f harness leather, also, state that the market is dull, sales are small and prices are declining. Some makers o f fancy leather goods are running their factories at capacity and have sold their product for some m onths; others, however, state that business has decreased and that they are operating at from 40 to 85 per cent. Prices in some cases are firm and un changed but in others are lower. Business in luggage has decreased, and production has been reduced to about a 75 per cent basis. Sales are at present less than output, so that a further reduc tion is anticipated unless business improves in the near future. W ardrobe trunks are the best sellers, but both bags and suit cases are moving in fair quantity. Manu facturers report that retailers are carrying small stocks and ordering sparingly. Prices have been reduced and competition is said to be very keen. Reports to this bank from factories making leather goods show that employment decreased 8.5 per cent be tween April 15 and May 15, and that total weekly wages fell 17.0 per cent. Individual weekly earnings also de clined, the change being 9.2 per cent. Collections in the taning industry are generally good and have improved during the month. Manufacturers of leather goods, however, report that they have an in creased number o f overdue accounts and that collec tions are only fair. The end o f the spring season finds factories as usual fairly well caught up with their orders and slowing down in their operations. A fter Shoes taking inventories on July 1 most o f them will start to work on the orders booked for late summer and early autumn de livery. These orders, however, are smaller than usual as both wholesalers and retailers have been slow to place contracts. Though recently some early purchases have been made, the hesitant attitude o f buyers in general has been increased by the poor business done in May and the first half o f June by both wholesalers and re tailers. This condition is blamed by many on the cold and rainy season which undoubtedly has affected trade adversely. Prices are well maintained by most manu facturers, but some report a reduction o f about 5 per cent, and it is believed in the trade that many others July would make such a concession if thereby important business could be closed. For women, patent leather and satin continue to be popular for pumps, and, as is usual at this season, much is heard o f an increase in the demand for oxford s for the autumn. It is known, moreover, that a number o f manufacturers are sampling tan calf for the making o f oxfords. Manufacturers o f turns complain that their business is being cut into by M cK ay shoes, for the making o f which improved machinery and processes have been introduced. A ccording to the statistics gathered by this bank the number o f people employed in shoe factories in this district was 6.3 per cent less during the week o f May 15 than in that o f April 15. The total wages paid was 8.6 per cent smaller and the weekly earnings 2.5 per cent less on the former than on the latter date. Production in the United States during April was 27,921,064 pairs as compared with 28,864,463 pairs in March and 31,867,776 pairs in April, 1923. And dur ing the first four months o f 1924 production decreased over 18,000,000 pairs from that o f the corresponding months o f 1923. In the Third Federal Reserve District the following table shows that production during May in 117 identical factories was 8.3 per cent smaller than in April. The output o f boys’ and youths’ shoes, however, increased. BOOT AND SHOE PRODUCTION* Third Federal Reserve District Number May, 1924 1,618,598 High and low cut (leather) total................ 1,487,027 Men’s......................................................... 118,785 174,981 Bovs’ and youths’ .................................... 241,827 Women’s................................................... Misses’ and children’s.............................. 501,304 Infants’ ...................................................... 450,130 131,571 All other leather or part leather footwear** of pairs April, 1924 1,765,148 1,613,119 139,763 150,543 261,855 573,294 487,664 152,029 * Preliminary report compiled by the Bureau of the Census. ** Includes athletic and sporting shoes (leather), shoes with canvas, satin, and other fabric uppers, slippers for housewear, and all other leather or part leather footwear. Collections are fair and about the same as they were a month ago. A t wholesale, sales during May were smaller than in either April or in May, 1923, as is shown on page 10, and preliminary reports for June indicate that sales will be lower than in June, 1923. Smaller sales at retail, also, are reported and the same conditions have operated to curtail business in both the wholesale and retail markets; one o f these conditions has been the unusual number o f cool and rainy days- T hird F ederal R eserve D istrict r924 Retailers believe that a change to warm and clear weather might still result in larger sales than in June of last year. Black satin, patent leather in cut-out effects, and white shoes are in best request for misses and women. Tan oxford s and white sport shoes for men and boys are selling well. Prices at retail show little or no change, though on some lines o f shoes retailers report that concessions are obtainable when buying. Their purchases, however, have been small for this sea son o f the year. Details o f May transactions are shown in the accompanying table. R E T A IL SH O E T R A D E T h ir d F ed eral R eserve D is tr ic t 1* N e t S a le s (in t e r m s o f d o lla r s ) : May, 1924, as compared with April, 1924................ -1 5 .2 % May, 1924, as compared with May, 1923................. - 5.3 “ 2. S to c k s (s e llin g p r ic e ): 27 newsprint is fully as heavy as it was a year ago. Paper converters, principally envelope makers, also report a decline in orders and few factories are operating at more than 65 per cent. The majority o f paper mills are operating on a hand to mouth basis with only a few days’ business on hand and at only 50 or 60 per cent of capacity, but a few have from two to three weeks’ orders ahead. In this district, wall paper factories are the only ones operating on full time. Jobbers report that their sales are smaller than those o f June, 1923, and they characterize business at present as only fair. A s is shown in the table on page 10, wholesale paper sales in May were smaller than those o f May, 1923. Despite the increase in our domestic production o f chemical pulps, imports o f these since the close o f the world war, except in 1921, have been much larger than before the war. A s the following chart shows, the im ports o f chemical pulps during the first five months o f 1922, 1923, and 1924 were twice as great as those for the first five months o f 1914. May, 1924, as compared with April, 1924................ - 0.1% May, 1924, as compared with May, 1923................. + 2.1 “ 3. R A T E O F T U R N O V E R (t im e s per y ear based o n c u m u l a t iv e p e r io d ): January 1 to May 31, 1924........................................ January 1 to May 31, 1923........................................ Number of stores reporting above items: 3.5 3.4 ....... 20 PAPER A further decline in business is reported by the majority o f paper manufacturers, who state that the de mand is fair or poor. The orders receivd by manu facturers thus far in June are smaller than the bookings ° f the first three weeks in May and, except at toilet paper mills, show a considerable decrease from those o f fhe same period in June, 1923. Consequently productl0n continues to decline and some mills are preparing to close down or have already ceased operations. Book and fine papers are in fair demand, but the request for wrapping papers and tag stocks is poor. Toilet tissues and crepe towels are selling in greater volume than a year ago, but not so actively as in the three previous months o f this year. W all paper manufacturers are now sending out samples o f their fall lines and report that a fair amount o f orders is being received. Producers o f building papers, building boards, and boxboards find business much slower than it was last June and poorer than it was last month. About the only important grade ° f paper that is in good demand is newsprint and even °n this grade some Canadian mills have recently cut Pnces. However, this is because o f too rapid expansion ln the productive capacity o f the mills, as the call for D u r in g t h e fir s t five m o n t h s o f 1922, 1923 a n d 1924 i m p o r t s o f c h e m i c a l s w e r e t w ic e as la r g e a s f o r t h e s a m e p e r i o d o f 1914. Source—Department oj Commerce Paper prices display considerable weakness in the open market, although very few mills have announced any price reduction. Contract prices are quite firm and at the few mills where reductions have been made they have not exceeded 5 per cent. Mechanical and chemical pulps show no change in prices, as compared with a month ago. Finished stocks at the mills vary from light to mod erate and are stationary. Supplies o f raw materials are moderate. Both skilled and unskilled labor are in plenti ful supply and wages are unchanged. Collections are fair and slightly slower than they were last month. J uly T he B usiness R eview 28 PRINTING AND PUBLISHING The majority o f job printers report that the demand for printing is not as heavy as it was in April or May and is considerably less than in June, 1923. General job work has fallen off sharply, but direct-by-mail cir culars are in good request. The volume o f work on college and high school annuals has been larger than ever before and this work, together with many corpor ate annual reports, has enabled some printers to main tain a high percentage o f operations. But, on the whole, the demand for printing is only fair and commercial advertising is the only important grade of work that is as heavy as it was last June. A n average o f the reports to us shows that commer cial printers are operating their plants at 70 per cent o f capacity. Magazine publishers state that their sales o f advertising space for their July issues are consider ably smaller than those for the two previous months and are not as large as for the same issues o f last year. Manufacturers o f automobiles, automobile accessories, and tires are not buying as heavily as they did a year ago and these industries are the principal factors caus ing the decrease. Book publishers, too, report that their orders booked during this month are not as large as in June, 1923, although the majority o f them have suf ficient orders on hand to operate at capacity for 30 days ahead. U p to the close o f May, business with the publishers had been excellent. Lithographers also find that sales are not as large as they were a year ago. Since the middle o f April the call for window display adver tising has been only fair. Manufacturers o f food prod ucts have cut their window display purchases sharply, but makers o f perfumes and toilet preparations are still buying heavily. The majority o f lithographers are operating at approximatly 80 per cent o f capacity. Printing and publishing costs have shown a very slight downward trend during the past two months. However, this decline has been due chiefly to a soften ing o f prices on paper and some grades of inks and glue. Labor costs are unchanged. The supply o f both skilled and unskilled labor is plentiful but wages are unchanged. Collections are not as good as last month or as in June, 1923, and can be called only fair. CIGARS The call for cigars has improved somewhat during the past four weeks and is also better than it was a year ago. Delivery dates on orders already taken are pretty evenly distributed over the 30, 60 and 90 day periods, though many are for shipment either immedi ately or after September. The bulk o f orders are for C grade cigars, as is usually the case. Prices o f all grades are firm and unchanged from those prevailing at this time in May, but manufacturers state that, though quotations on raw materials have remained com paratively firm, a downward tendency in prices of some domestic products has been recently observed. Stocks o f both finished goods and raw materials are from moderate to heavy and are decreasing. Cigar makers reporting to us are operating their plants at an average rate o f about 80 per cent o f ca pacity which is higher than it was a month ago. U n filled orders on hand will insure the continuance of the present rate for an average period of close to three weeks. Though some manufacturers will be kept busy on back orders for several weeks, others have very little business ahead and are working on orders as they arrive from day to day. The supply o f both skilled and unskilled workers is either sufficient or plentiful and wages are the same as they were in May. Collections are fair and unchanged from those at this time last month, but more satisfactory than they were a year ago. TOBACCO LEAF Leaf dealers report that the cigar tobacco market is seasonally quiet and that at present the demand is barely fair. In the Lancaster market only small quan tities are being sold and the active export request for the cheap grades, which was so noticeable in the late winter and early spring, has practically disappeared. Few inquiries for 1923 Pennsylvania packed wrappers have been received by dealers and thus far no market has been established. Prices are a trifle weaker than they were 60 days ago and those growers who did not sell their crops in the early spring are finding it difficult to secure buyers. Consequently they are ob taining prices from 15 to 25 per cent lower than were paid the growers in March. The 1923 fillers are sell ing at from 10 to 12 cents per pound, 1922 wrappers at from 24 to 28 cents per pound, and 1922 fillers at 10 to 12 cents in the Lancaster market. Consider able quantities o f 1922 packed wrappers are still in the dealers’ hands and estimates made by them place the total at from 5,000 to 10,000 cases. In Wisconsin considerable amounts o f the 1923 crop are still held by farmers who are not members o f the pool, and leaf dealers who have recently visited that market state that these growers are finding it difficult to sell their crop. The Wisconsin Tobacco Growers Association, however, is steadily disposing o f its hold ings. One dealer estimates that in Ohio about 10 per cent o f the total 1923 output o f the Zimmer Spanish, Gebhart, and Dutch varieties is still in the farmers’ hands. Prices that are now being paid to the growers in these two districts are at feast 25 per cent lower than they were four months ago. The demand for B grades o f Ohio tobacco is good, but the frost-damaged tobacco is a drug on the market. The Connecticut pool which is steadily disposing of T hird F ederal R eserve D istrict j924 29 its holdings announces that the 1923 Havana Seed is one of the finest crops ever grown. A n unusually small percentage o f poor tobacco was found among the thousands o f cases that the pool has thus far inspected. W ith the advent of clear warm weather in the latter half o f the month crop growth, however, has been rapid, and should this condition continue the lateness o f the season will be decidedly reduced. Most o f the large American buyers at the Sumatra inscription in Holland have now returned home and they report that only about two thousand bales o f Sumatra, that are suitable for the American market, remain unsold. Approximately the same quantities were purchased for American account as were taken last year and at prices almost the same as were paid in 1923. Vast quantities o f Sumatra were sold for European account at the inscriptions and returning American buyers state that consequently the prospects for the sale o f American tobacco to the Continent are not very bright. The state departments o f agriculture estimate from the June 1 condition, that the production o f all small grains (except oats in New Jersey) will be smaller than it was last year and below the ten-year average. The table at the foot o f the page shows the condition and estimated yields o f grains. The per acre yield o f rye, however, is almost equal to the ten-year average, but that o f wheat is smaller than it was last year and below the average, as is illus trated in the following chart. GRAIN YIELDS AGRICULTURE BUSH ELS f PER ACRE Excessive rainfall and cool cloudy days during the earJy half o f the month prevented the normal develop ment o f all crops and increased the lateness o f the season. The harvest o f strawberries, which is normally completed by the middle o f June, really only began in midmonth this year and the cherry crop is fully two weeks late. However, the yields o f these fruits are bountiful and should exceed those o f 1923. County agents report that the stands o f wheat, oats, rye, and hay are excellent, although growth is somewhat be low normal. The outlook for the corn crop is rather doubtful, owing to the lack o f sunshine, and in many counties farmers did not plant until after the middle ° f the month. Potatoes are generally in good con dition, although planting has been greatly retarded in many sections, because o f the abnormally moist con dition o f the soil. Early June peas are below normal condition despite the heavy rainfalls on which they usually thrive, as the excessive moisture has favored the heavy development o f root rot. Other early truck cr°ps show a fair stand, but growth is greatly retarded. Winter* wheat I Rye United States _________________ P M Penna., hewJersey «. belawane gg3g- 1922 1923 1924 S lfd i 1922 1923 1924 T h e e s t im a t e d y ie ld s p e r a c r e o f r y e a n d w h e a t i n 1924 a r e s m a l le r th a n th e te n -y e a r average. Source— Department of Agriculture Tree fruits are in excellent condition and the outlook for yields on June 1 was much better than on June 1, 1923, and considerably above the average. The follow- PRODUCTION OF GRAINS AND HAY Production (000's omitted) State Pennsylvania Delaware. .. New Jersey. Pennsylvania New Jersey. , Pennsylvania New Jersey. , Pennsylvania Crop Winter wheat << << a n Oats............ n R ye............ u Tame hay. . Per cent normal June 1 1924 Estimated from June 1 condition 1923 10 year average 85 89 20,451 bushels 1,525 1,331 29,112 1,847 3,307 1,097 3,892 tons 24,168 bushels 1,908 1,480 33,930 1,632 3,655 1,157 3,066 tons 24,356 bushels 1,656 “ 1,523 39,062 2,202 3,908 1,203 4,139 tons 88 78 85 93 92 88 T .SO B h e u s i n e s s ing table shows the condition o f apples, peaches and pears on June 1 in the states o f Pennsylvania and New Jersey. CONDITION OF FRUITS Condition—Per cent of normal State Fruit June 1, June 1, 1924 1923 Pennsylvania........................... Apples U Pears U Peaches New Jersey............................. Apples Pears (( Peaches 89 88 84 85 86 89 84 75 81 78 80 84 Average June 1 past 10 years 73 65 60 77 66 R e v i e w July age is much more abundant that it was a year ago, and this fact is a source o f much relief to dairymen. On account o f the poor hay harvest o f last season, many dairy farmers ran short o f roughages and fed their herds small rations in the late winter and early spring. Consequently many herds were put on pastures very early this year and were in a poor, scraggy condition. Good pastures have enabled the herds to pull through, without heavy purchases o f hay from outside sources by the dairym en; but their physical condition is still below normal and will scarcely be improved until the new hay crop is harvested. Throughout this district the number o f milch cows is slightly greater than it was a year ago, and county agents state that the herds are steadily being improved through better methods of selection and breeding. Frequent complaints are made by dairymen in counties distant from the large cities that milk prices are too low, but, in general, the dairy ing industry is earning a profit. Spraying programs were seriously interrupted by the The agricultural outlook in the Third District is continual rains and consequently insect pests and fun- • distinctly favorable, and most farm agencies state that gus diseases are somewhat more common than a year farmers are more hopeful than they have been for ago. The Oriental peach moth, the apple-tree tentseveral years. True, in some sections, plant diseases caterpillar and apple scab are most in evidence. The are more prevalent than a year ago because o f the heavy two latter are easily controlled by spraying, however, rains, but this condition is not particularly alarming. and the damage they have done so far has not been The late season and the shortage o f farm labor have heavy. But the Oriental peach moth is difficult to con resulted in noticeable decreases in the acreage under trol and it may cause considerable injury. . cultivation in a few counties; but this should bring Pastures are, on the whole, in good condition al better farm prices for the crops that are being cul though here, too, growth has been slow. But pastur tivated. C O M P I L E D A S O F J U N E 21, 1924. This business review will be sent regularly without charge to any address upon request ! 924 T h i r d F e d e r a l R e s e r v e D i s t r i c t 3i BUSINESS INDICATORS Third Federal Reserve District Latest compared with. The following data refer to the Third Federal Reserve District, except where otherwise noted Retail trade—net sales f (152 stores) Department (64 stores)..................... Apparel (46 stores).............................. May, 1924 April, 1924 May, 1923 Previous month Year ago Shoe (22 sto re s).................................... Credit (20 sto re s).................................. $24,147,000 $19,093,000 $3,511,000 $478,000 $1,065,000 $26,850,000 $20,754,000 $4,473,000 $564,000 $1,059,000 $24,741,000 $19,690,000 $3,407,000 $505,000 $1,139,000 -1 0 .1 % - 8 .0 “ -2 1 .5 “ -1 5 .2 “ + 0 .6 “ + - Wholesale trade—net sales (176 firms) Boots and shoes (14 firm s)................. Drugs (15 firm s)...................................... Drygoods (19 firm s)............................... Electrical supplies (7 firm s)............... Groceries (59 firm s)............................... Hardware (33 firm s).............................. Jewelry (16 firm s)................................... Paper (13 firm s)........................................ $11,-588,709 $390,761 $1,459,673 $991,841 $545,621 $4,282,476 $2,411,323 $397,169 $1,109,850 $11,703,592 $561,951 $1,531,689 $1,023,697 $636,672 $4,014,401 $2,400,667 $381,098 $1,153,417 $12,534,829 $509,066 $1,471,566 $1,193,820 $623,239 $4,378,047 $2,630,268 $460,461 $1,268,362 - 1.0” -3 0 .5 “ - 4 .7 “ - 3.1“ -1 4 .3 “ + 6 .7 “ + 0 .4 “ + 4 .2 “ - 3 .8 “ - 7.5” -2 3 .2 “ - 0 .8“ -1 6 .9 “ -1 2 .5 “ - 2 .2 “ - 8 .3 “ -1 3 .7 “ -1 2 .5 “ Production: Shoes* (117 factories).................................................. Pig iron............................................................................... Hosiery* (116 m ills)...................................................... Hon castings (45 foundries)...................................... Steel castings (5 foundries)........................................ Cem ent................................................................................ A nthracite......................................................................... Bituminous coal (Central district— percentage of fulltime o u tp u t).................................................... W ool consumption* (79 m ills)................................. Active cotton spindles (Pennsylvania and New Jersey) ....................................................... 1,618,598 prs. 188,246 tons 1.007,894 doz. prs. 6,851 tons 2,373 tons 3.463.000 bbls. 7.745.000 tons 1,765,148 prs. 211,975 tons 1,058,790 doz. prs. 7,612 tons 2,356 tons 3.024.000 bbls. 6.811.000 tons 42.3% 5,242,370 lbs. 38.1% 6,617,744 lbs. 556,593 567,700 - 8 .3 “ -1 1 .2 “ - 4.8 “ -1 0 .0 “ + 0 .7 “ + 14.5“ + 13.7“ 281,163 tons 3.347.000 bbls. 8.573.000 tons 57.1% 584,647 2.4% 3 .0 “ 3.1“ 5 .3 “ 6 .5 “ -3 3 .0 “ + 3.5 “ - 9 .7“ + 11.0“ -2 0 .8 “ -2 5 .9 “ - 2 .0 “ - + 1.1“ -1 5 .6 “ -1 0 .4 “ +26.7 “ -6 9 .6 “ -3 0 .5 “ 4 .8 “ Distribution: I reight car loadings (Allegheny district—weekly average).................................................................... 184,020 i onnage of vessels (port of Philadelphia).......... 1.394.000 tons Exports of wheat (from port of Philadelphia).. 2.722.000 bus. 3.667.000 lbs. Exports of flour (from port of Philadelphia) . . . . Imports of crude oil (into port of Philadelphia).. 11,068.000 gals. 182,000 2.904.000 tons 3.865.000 bus. 5.866.000 lbs. 14,322,000 gals. 218,152 1.555.000 tons 2.149.000 bus. 12.046.000 lbs. 15.931.000 gals. -5 2 .0 “ -2 9 .6 “ -3 7 .5 “ -2 2 .7 “ Financial: Loans, discounts and investments of member banks (weekly average).......................................... $947,400,000 $938,600,000 $937,500,000 $32,900,000 $40,500,000 $46,200,000 $2,827,000 $3,108,000 $3,743,000 $324,000 $9,835,000 $528,272,000 $556,000 $6,500,000 $528,435,000 $1,894,928,000 0 .9 “ + :i.i“ - 1 8 .8 " -2 8 .8 “ 9 .0 “ -2 4 .5 “ $1,749,000 $5,467,000 $492,252,000 -4 1 .7 “ + 5 1 .3 “ - .03“ -8 1 .5 “ +79.9 “ + 7 .3“ $1,283,641 $16,363,575 $1,942,353,000 63 $1,548,342 $28,225,173 $1,973,625,000 79 81,814,176 $18,917,274 2 .4 “ -1 2 .7 “ -1 7 .1 “ -4 2 .0 “ - 4 .0 “ -3 0 .4 “ -2 9 .2 “ -1 3 .5 “ $68,521,100 $38,875,174 $33,350,000 384,315 399,077 - 3 .7 “ $26.20 $26.59 - 1.5“ $74,322,000 $81,989,000 - 9 .4 “ + Bills discounted held by Federal Reserve Bank of Philadelphia (daily average)........................... Acceptances executed (12 banks for month ended 10th of following m o n th ).......................... “ ankers’ acceptances sales (5 dealers—weekly average for period ended middle following month).............................................................. Commercial paper sales (5 dealers)...................... Savings deposits (97 banks)............................... - General: debits (18 cities)................................................. Commercial failures...................................................... mmmercial failures—liabilities......................... m ding permits (15 cities)................................ mlding contracts awarded (Philadelphia p district)........................................... ............... . . 55 mPloyment—number of wage earners (1,041 Plants in Pennsylvania, New Jersey and D elaw are)....................................................... verage weekly earnings (384,000 wage earners g Pennsylvania, New Jersey and Delaware') a os of life insurance (Pennsylvania, New Jersey and Delaware)..................................... t EaUeaUt ° [ C en su s P relim in ary figures. $73,394,000 - + 7 6 .3 “ + 105.5“ + 1.3“ T 32 h e B u s i n e s s R e v i e w J uly SHOULD THE FEDERAL RESERVE BANKS PAY INTEREST? A t the present time there is a bill before the House o f Representatives which would require Federal Reserve Banks to pay interest to their member banks on balances which the member banks must keep with them. Many questions naturally arise. W h y isn’t interest paid now ? W hy didn’t the authors o f the Federal Reserve System provide for such payment o f interest? Does the present law work an injustice to member banks? And wouldn’t the proposed amendment be a wise one ? Banking Sentim ent Against Measure A superficial observer might expect bankers to be united in favor o f such an amendment, for their banks would be the benefactors, getting 2 % interest where they now get nothing, but such is not the case. A ma jority o f Am erica’s ablest bankers is unqualifiedly op posed to the measure on the ground that it is fundamentally unsound in principle. The amendment, in their judgment, would lead to disturbing banking conditions affecting the whole country, which would be a very high price to pay in exchange for a mere 2% interest. This opposition is based on a thorough un derstanding o f the genius o f the System. It is o f the most vital importance in considering the proposed amendment, to keep constantly in mind the undisputed fact that The Federal Reserve Banks were never in tended to be primarily money making institutions. A fter paying 6 % dividends to stockholders banks and building up a surplus equal to 100% o f their capital stock, the Federal Reserve Banks must, under the law, pay the balance, if there is any, into the United States Treas ury as a franchise tax except 10% which shall be paid into the surplus. The system is not in existence to make a profit for itself, the government, or for any one class, including the banks, but such excess profits as it may ever make will go to the government. It was created and put into effect to “ furnish an elastic currency, to afford means o f rediscounting commercial paper, to establish a more effective supervision o f banking in the United States and for other purposes,” including the mobilization o f the banking reserves o f the country. T w o years ago Mr. James B. Forgan, Chairman o f the Board o f the First National Bank o f Chicago, in The Annals o f the American Academy o f Political and Social Science, urged in no uncertain terms that the System “ limit itself to the purposes for which it was created,” adding that the reason for the establishment o f the Federal Reserve Banks was “ to prevent losses to the business and banking communities o f the coun try.” Mr. Forgan apparently foresaw just such meas ures as the one now proposed and wisely warned the country. I f the amendment now in question is adopted. the Federal Reserve System will find it much more difficult, if not impossible, to limit its operations “ to the purposes for which it was created.” And that is the very reason why so many bankers are opposed to the suggested amendment. W hat good is 2 % interest which the banks would receive on their balances in their respective Federal Reserve Banks if at the same time irreparable harm is done to the banking system upon whose stability and power to serve, the member banks and the nation depend ? Public Good, Not Earnings, Primary Considera tion of Federal Reserve Banks The harm would come through a change o f policy in the management o f the various Federal Reserve Banks which the payment o f interest would force upon them. It is estimated that the Federal Reserve Banks would have to pay approximately $40,000,000 a year in interest (2 % on $2,000,000,000) to their member banks if the amendment is carried. This enormous sum is almost as large as the present gross income o f the banks from lending and investing operations. Is it not apparent that if the law demanded the Federal Reserve Banks to pay interest on balances, they would have to shape their policies with a primary reference to earnings rather than to the public good ? This policy if carried out would defeat the very aims o f the Federal Reserve System. The Federal Reserve System is just what its name implies— a system o f reserve banks to which the mem ber banks go whenever necessary. Unwise administra tion o f a Federal Reserve Bank could very conceivably impair its ability to serve its member banks when they most needed assistance and had a right to get it, in the interest o f legitimate industrial and agricultural de mands. Drain the reservoir o f its water in times of abundant rain, and then suffer the consequences when the drought comes. Under the present law there is no such temptation for the Federal Reserve Banks— their concern is primarily that o f the public good. Add an annual interest burden o f $40,000,000 and you force the Federal Reserve Banks to think more o f earnings and less o f what it best for the public welfare— a very unsound principle. I f they had to pay this interest, they would be obliged to expand greatly their loans and compete with all member banks for such loans to get the money with which to pay the interest. T o earn $40,000,000 out o f which to pay 2 % on balances would necessitate the investment, on a 4 % basis, o f one billion dollars. Any provision in the law which would em courage the Federal Reserve Banks to expand unduly their reserve credits is dangerous.
@FedFRASER