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BUSINESS CONDITIONS IN TH E THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT MARCH 1 ,1921 Report o f the Federal Reserve Agent at Philadelphia to the Federal Reserve Board GENERAL SUMMARY USINESS during the past month has been I characterized by variable and even con flicting reports. Developments in the textile lines have resulted in moderately increased operations, and in the shoe industry there has been considerable interest. In the latter, orders were largely for special goods and have not exerted any perceptible influence on staple lines. The test of the permanence of these revivals, however, will be found in the volume of orders placed for late spring, and those for fall ship ment when the general openings are made early in March. The iron and steel industry has passed through a month practically unmarked by any purchas ing interest. Prices have weakened steadily and a prominent independent, corporation in this district has led the way in making quotations below the levels fixed by the Industrial Board in 1919. According to our statistical reports, the whole sale hardware trade in January, 1921, showed a considerable diminution from December and January, 1920. Sales in January of this year were 17.4 per cent below sales in the same month of 1920. This is in large part attributed to the dullness of the building situation. Reports from 13 large cities in this district show that during January, 1921, building permits were issued to a total value of $1,917,548 as compared to $2,018,690 in December, and $4,939,784 in Janu ary, 1920. The inactivity in the lumber and B brick manufacturing trades springs from the same source. A t this time efforts are being made with the building trades unions in the city of Philadelphia to reach an equitable wage basis in the hope that more reasonable costs of construc tion will stimulate building operations. The employment situation is still rather serious. Although some textile factories have increased the number of their employees since January 1, this is not the general situation. The figures reported by employment bureaus in six cities of this district are becoming more signifi cant as the weeks pass by. Comparative figures are given below: Persons requesting Persons asked for positions by em ployers October November December January February 1st week 1st week 1st week 1st week 1st week 2nd week 3,095 3,587 4,655 6,583 5,219 5,657 9,230 6,914 5,134 2,011 706 711 These bureaus, which are operated by the Pennsylvania State Department of Labor, have estimated the number of persons unemployed on the 15th of February, with the following re sults: Philadelphia, 80,000; Altoona, 19,625; Harrisburg, 20,360; Johnstown, 7,700; Wil liamsport, 4,155; Scranton, 13,100. The metal and machinery trades and common labor show the largest number of unemployed. B U S I N E S S 2 C O N D I T I O N S Collections, while generally slow, show a slight measure of improvement in some of the lines reporting to us. Commercial paper dealers state that paper is bringing 7F2 per cent, although sales have been made both above and below this rate. The market for commercial paper does not show much activity at the present time. SYNOPSIS OF BUSINESS SITUATION Compiled as of Feb. 21, 1921 Philadelphia Federal Reserve District R B D u s in e ss P e m a n d r ic e s a w o r M S M a t e r ia l C e r c h a n d ise o l l e c t io n s it u a t io n Brick................................. Limited Downward Improved Carpets and rugs............... Negligible Lower Good Coal, Anthracite................ Fair Slightly lower Coal, Bituminous............... Practically none Very low Cotton cloth...................... Improved Steady Slow Slow Slow Slow Good Slow but improving Cotton yarns..................... Improved Moderate fluctuations Good Slow but improving Fertilizers.......................... Light Downward Ample Slow Furniture........................... Poor Lower; firm Plentiful Groceries............................ Limited Lower Iron and steel.................... Downward Plentiful Leather.............................. Improving Firm Ample at low prices Domestic accts.—satisfactory Foreign accts.—very slow Leather belting.................. Stabilized Good Satisfactory Shoes................................. Considerably improved Firm Good Slight improvement Lumber............................. Limited Ample Slow Office appliances................ Improving Good Fair Ample Fair Very poor Improving Hides................................. Very poor Paper................................. Fair Slow Downward Downward Some lines—lower Others—no change Downward Downward Ample Slow Firm Ample Fair Plumbing supplies.............. Limited Downward Improved Fair Rubber-Tires.................... Slightly improved -Mechanical goods. . Fair -Fibre products...... Poor Lower Lower Lower Ample Ample Ample Slow Slow Fair to good Firm Good Improved Paper boxes....................... More inquiries Slow Slow Printing and publishing. . . . Limited Silk goods.......................... Improved Tobacco............................. Limited Firm Improved Slow Hosiery.............................. Limited improvement Fluctuating Good Improving Underwear (light weight).. . Improved Firm to slightly higher Good Improving Firm Good Slow Advancing Good Improved Wool cloth......................... Increasing Wool yarns........................ Increasing BUSINESS CONDITIONS % ETAI£ TRADE O general statement can be made concern ing retail trade in this district during the past month, as a survey of the situation discloses conflicting trends and tendencies. In the strictly industrial sections where plants have been shut down, or running on half time or less, the volume of sales has been materially affected. Workers, realizing the necessity of con serving their resources, have been especially sparing in their purchases, confining them almost exclusively to absolute requirements. It has only been through the means of repeated price cuts and considerable advertising that any addi tional sales have been effected. In many of these sections, however, manufacturing opera tions have been increased during February, with the result that present prospects are considerably brighter. In the shopping districts of the larger cities, retail trade has been much more active, but here the several stores report varying results. All have advertised extensively, featuring reduction sales on practically every kind of merchandise. I he month of January brought a gratifying response and enabled most of the stores to more or less thoroughly liquidate their holdings. In fact at the present time retail stocks are at the lowest point reached for a number of years. But during February much of the advertising appeal was lost and the public became very cautious, giving more attention to quality and style than to price. As a result the better grade of merchan dise moves freely while it is becoming more and toore difficult to dispose of lower quality goods. The stores which admittedly handle the higher type of merchandise are experiencing very good business. Indeed, from some of these come statements to the effect that the volume of busi ness in dollars thus far during the current month ls considerably greater than the corresponding Period of February, 1920, despite the fact that Prices are universally lower. From stores selling the lower type of merchandise we again have varying reports. Some say that February’s busi ness will compare very favorably with that of February 1920, while others maintain that it will show a considerable decrease. The futility of generalizing on the situation is therefore apparent. N 3 Collection conditions on the whole are very satisfactory, although some stores report a re tardation since the first of the year. Buyers for retail houses are following a very conservative policy and are purchasing only such goods as are needed for filling in depleted stocks and for which there is a present demand. RETAIL TRADE OF DEPARTMENT STORES For the Month of January, 1921 N ber of stores reporting; um Net Sales: For month named com pared to same month, 1920 For period January 1 to end of month named, compared to same period last year.. . Stocks at end of month named: Compared to same month, 1920................................. Compared to previous month.............................. Ratio of average stocks at end of each month for period from January 1 to date, to average monthly sales for same period...................... Ratio of outstanding orders at end of month named, to total purchases during year 1920................................. In O utside All Firm Philadelphia Philadelphia s 42 1 1 31 + 3.0% + 2.9% + 3.2% + 3.0% + 2.9% + 3.2% - 4.5% - -8% -10.7% -11.5% -13.8% - 7.4% 357.5% 281.8% 479.2% 4.5% 4.4% 4.8% CO A .C B it u m in o u s ONDITIONS in the mining of bituminous coal are chaotic, as the demand is prac tically nil, and the mine operators continue to produce coal in order to keep their working organizations together until the time comes when demand will equal or surpass the supply. The underlying factors which have brought about this condition may be summed up as follows: First, the weather has been exceptionally mild; second, many industrial plants have curtailed operations; third, there is a noticeable contraction in the ton nage used by the railroads; and fourth, the uncertainty overhanging future business con ditions. Production of soft coal shows a decline during the week ending February 3. The total output, including lignite and coal coked, estimated on C 4 BUSINESS CONDITIONS the basis of shipments over the principal coal carrying roads, was 8,045,000 net tons, a decrease of 521,000 tons as compared to the preceding week. The average production per working day was 1,341,000 tons, as compared to 1,790,000 tons for the coal year to date. Bituminous prices have dropped with rather startling rapidity from the abnormally high prices of $12 to $16 during the months of August and September to $3.00 and $3.5o. Gas slack has been sold as low as $1.50 and high grade Fairmount coal as low as $2.00. Central Penn sylvania bituminous distressed coal at the piers for Pool 1 and 71 has brought $1.75. Pools 10 and 11 are being offered at $2.40 to $3.00. The transition from a condition of car shortage to one of surplus cars is now complete. It is interesting to note in this connection that since October there have been approximately 300,000 idle cars on the roads throughout the country. Collections in general are considered slow and this is especially true with reference to the amounts owed by the railroads. One firm writes that “ The railroads throughout the eastern ter ritory have been very derelict in meeting their fuel bills. A number of the roads have not been able to pay fuel from September to date.” A n th r ac ite Anthracite production continues heavy, being favored by the mild weather and a liberal car supply. The output for the United States during the first week of February, as given by the Geo logical Survey, was 1,985,000 net tons, which compared favorably with the 2,000,000 ton mark reached the preceding week. Production of anthracite for the coal year 1920-21 aggregates 77,617,000 net tons, or within 1,343,000 tons of the same 1919-20 period. Shipments on the principal carriers were as follows: January, 1921.............................................. 5,740,538tons December, 1920....................................6,436,320 November, 1920................................... 5,765,347 January, 1920.......................................5,713,319 The poor demand for buckwheat is one of the features of the situation. Many of the larger producing companies, due to this lack of demand, are storing this size with a view to marketing same under more favorable circumstances. An thracite operators report that steam sizes gener ally are beginning to feel the effect of the low price of bituminous coal in competition and sales are not as brisk as heretofore. Large apartment houses in Philadelphia and other cities in this district have not been using nearly as much fuel as last winter. In Philadelphia retail prices quoted on the basis of 2240 pounds to the ton for white ash anthracite coal are as follows: Broken and egg................................................314.55 Stove............................................................... 15.00 Nut................................................................. 15.00 Pea.................................................................. 12.00 Buckwheat...................................................... 8.50 Rice................................................................ 7.50 Collections generally are considered slow. IRO^C zAND STEE/l HE iron and steel industry has not shown any improvement during the past month. Prices have still continued on the downward trend; pro duction in practically all lines likewise has de clined and unemployment has grown correspond ingly greater. The recession of prices to lower levels which has been quite marked for the past few months showed some slight signs of becoming stable a week or so ago. With the opening of the month the demand for iron and steel products became perceptibly weaker. The U. S. Steel Corporation’s operations have been between 80 and 90 per cent of capacity as contrasted with 30 to 40 per cent of capacity of the independents. In the scramble to secure new business and to stimulate buying nearly all producers have made successive concessions in price. On Friday, February 7, the Midvale Steel and Ordnance Company, believing that prices were still too high to allow construction contracts to be placed, announced further reductions on plates, shapes and bars, bringing them below the level of the prices fixed by the Industrial Board and those of the Steel Corporation. This cut was followed very closely by similar quotations from the Youngstown Sheet and Tube Company. This T BUSINESS CONDITIONS added stimulus has not produced at the present writing any active demand or interest in the markets. Inquiries are still few, and apparently there is little desire to consummate business at any price. That which is being placed is limited and only for present-day needs. The continued reductions have tended to augment the hesitancy and uncertainty in the minds of consumers as to what the final level of prices will be. Raw materials are plentiful and easy to obtain at lower prices than prevailed a month ago. Coke at the ovens is offered at $4.50 as compared with $5.00 a month ago and $18.00, the peak of 1920 prices. Pig iron also has experienced a further decline in prices during the month. The quotation of No. 2X Pennsylvania pig on Feb ruary 15^ was $30.09 per ton, as compared with $33-25 a month ago and $45.35 a year ago this month. Production of this commodity has led the precipitous downward trend reflected in all lines of the industry. The following is a table ° f pig iron production for 1919, 1920, and January J92i, taken from The Iron Age: Production of coke and anthracite pig iron in the United States hy months, during 1919, 1920, and January, 1921—Gross Tons January. . February. March April.. May. June.. July. . . August.. . September October November December Total, year......... 1919 3,302,260 2,940,168 3,090,243 2,478,218 2,108,056 2,114,863 2,428,541 2,743,388 2,487,965 1,863,558 2,392,350 2,633,268 30,582,878 1920 3,015,181 2,978,879 3.375.907 2,739,797 2,985,682 3,043,540 3,067,043 3,147,402 3,129,323 3,292,597 2.934.908 2,703,855 36,414,114 1921 2,401,845 Statistics on the production of steel ingots, covering 30 concerns which in 1919 produced over 85 per cent of the total output for that year, show that the production of ingots in January Was 2,201,866 gross tons as compared with ^40,365 in December and 2,638,670 tons in November. 'Fhe decrease during January repre sents approximately 5 per cent as compared with Ix*5 per cent in December. In the monthly statement issued by the United States Steel Cor 5 poration on February 10, registering their unfilled tonnage, a decline of 574,958 tons is shown, which compares with a drop of 873,359 tons m December, the largest decline yet recorded in any one month since August, which was the first month to show a decline. Total unfilled orders on January 31, were 7,573,164 tons. The demand for steel castings, which has been quiet for some time has weakened still further. Inquiries are reported to be fewer in number than at this time a month ago. Prices for steel castings are approximately 10 per cent below the level of last month. Wage reductions in this field varying from 10 per cent for the skilled labor to 25 per cent for the unskilled workers, have been put into effect with many men working only three or four days a week. The discrepancy in wage reductions we are told is due to the fact that the unskilled class of labor was receiving an abnormally high rate as compared with the skilled workers. Prices for heavy car wheels are quoted at 2jJ cents per pound as compared with cents a month ago, and 3 cents the peak of prices in 1920. This represents a decline of approximately 30 per cent. Prices of tin plate and steel bars likewise have exhibited a decline, but of greater proportions. At the peak of prices in 1920 steel bars were quoted at $4.50 and tin plate at $14.00, which compares with $2.35 for steel bars and $7.00 for tin plate at this time. No change in these prices has been noted in the last month. This same proportion ate decline also has been experienced in the price of electric furnace steel castings. In 1918, the peak of prices for electric furnace products, they were quoted at 30 cents per pound, which com pares with 19 ^ cents a month ago, and 16 cents at this time. Those concerns which manufacture power transmission machinery have sufficient orders to enable them to operate only a little more than one month on a restricted scale. In this particular line there has been no radical reduc tion of wages. In some instances, however, the bonus and extra compensation have been removed. This divergence from the general trend of wages is largely due to the fact that this industry is characterized by long term contracts and commit ments which were secured during the higher level 6 BUSINESS CONDITIONS of prices, and it is on these contracts that the present production is being carried on. When new business is secured at lower levels manu facturers state that there will be a necessary reduction. The reductions in prices have not been as marked in these products as in other lines, the reason given being that the industry lagged somewhat behind in the upward swing of prices and little business was secured at the highest level. Cancellations which are being received at present are characterized by insist ence; however, requests of this nature are becom ing fewer day by day. Substantially, business in this field is about the same as it has been for some months past, but unless new business is secured presently, operations during the next few months will undergo further curtailment. Collections are slow and unsatisfactory. Sev eral concerns report that within the past month they have received letters from their automobile customers asking for an extension of time. J iU M B E X HILE the majority of the lumber dealers reporting to us state that there has been little change in the demand for lumber, in a few cases there has been a slight improvement due to the favorable weather conditions and other factors of local importance. The prospective clients of building contractors are still inclined to hold off, pending the adjustment of labor costs and a larger supply of mortgage money. The supply of lumber is sufficient to care for immediate needs, but at the primary sources production has been curtailed by closing some mills and operating others on part time. Lum ber prices have been shaded further during the past month, and this instability of prices has been an important factor in delaying buying, as consumers feel that they are in a position to gain by adopting a waiting policy. It should be remembered that the increase in freight rates plays a considerable part in prices at this time. A large dealer in yellow pine writes that, “ due to the freight rate advance, the minimum raise in freight that all lumber yards in this district (the Philadelphia district) had to assume was at W least $5.50 per thousand.” The same concern gives the following comparative quotations on yellow pine: Effective January 5, 1921 6"....... 8"....... 10"....... 12"....... 14"....... 16"....... 18"....... 2x 3 " ... 2x4" ... D ber 1, 1920 ecem Prices at peak 372.00 74.00 82.00 90.00 104.00 111.00 136.00 78.00 80.00 379.00 81.00 89.00 95.00 107.00 114.00 139.00 85.00 87.00 384.00 86.00 91.00 97.00 107.00 114.00 139.00 90.00 92.00 B R IC K , H ERE is little demand for firebrick, and the few orders being received are for material for immediate use. The lull in the industry may be attributed to the fact that the pig iron and steel plants which are the largest users of refrac tory materials, are not making their usual annual repairs to their furnaces. The same quietness exists in the demand for building brick, reflecting the inactivity in the building industry at this time. Brick plants at present are working less than 50 per cent of capacity and many of them have shut down entirely. Prices have undergone two revisions since December, being reduced from the peak price of $55.00 per thousand for firebricks to a level ranging from $40.00 to $45.00 per thousand dur ing the month of January. Face brick have been reduced approximately 10 to 15 per cent. One of the chief .material costs entering into the manufacture of brick is coal, and this has come down considerably in price, further assist ing the brick manufacturer in bringing about a reduction in the cost of production. Most of the reports received from the brick industry say that collections in their line are slow. T P L U M B IN g S UP P H ie s A C C O R D IN G to the number of inquiries ■ Tjl being received by the plumbing supply houses, there is a large volume of work in con templation, but the actual orders are being re BUSINESS CONDITIONS tarded by anticipation of further price recessions. Orders placed have been limited to current requirements. The feeling is generally expressed however, that by spring business will be more normal. The general trend of prices is downward, but the percentage of reduction is variable. The raw material situation shows some im provement, but is still below normal. Manufac turers claim that they are still experiencing some difficulty in securing adequate supplies of steel pipe for which there has been an unusual demand from the southern and western oil fields. Other raw materials, however, are reaching the manu facturer promptly, for the reason that the freight car situation is now excellent. C orrod e C otton G oods SHARP revival of buying activity, followed closely by a decided reaction, was the experience of the cotton goods market since the latter part of January. Immediately upon the opening of the new year, inquiries steadily •ncreased, as did the volume of the hand-tomouth business. This was due mainly to the replacement of retail stocks depleted by the January white sales. Such was the state of the market until the last ten days of the month when this interest took a sharp turn and an active buying movement developed. Many mills re ceived large orders and several, it is reported, sold their entire output for two and three months m advance. Buyers were operating actively, and the industry, as a whole, assumed a most hopeful and optimistic aspect. The supply of many of the finer materials Proved inadequate to the demand for immediate delivery. As a result, and in anticipation of addi tional orders for all grades and types of goods, Production schedules were increased and mills which had been shut down for several months resumed operations. Not all manufacturers, how ever, were willing to book orders for distant deliv“ry, some fearing a recurrence of the cancellation 2vd, while others were of the opinion that quota tions would show considerable strengthening. 7 Prices did, in fact, increase during the early days of February, but this acted as a check to the demand. Then, too, came the further break in the raw cotton market, and interest on the part of buyers thereupon fell off to a large extent. At the present time, the demand for cotton goods is again conservative, and prices have, in large part, assumed their former levels. Buyers are awaiting a stabilization of quotations and are confining their attention almost exclusively to those materials which are needed to fill in stocks and for which they have an immediate demand. The volume of this business is of fair size, how ever, and the market is in a far better position than it was early in January. The foreign demand is practically dormant and manufacturers are suffering cancellations of goods which are in transit or ready for shipment. It is not any lack in the need of these materials which has created this situation, but rather the inability to make payment. One manu facturer with many foreign accounts reports the receipt of letters stating that goods would be accepted if 90 day datings were given instead of the original terms quoted, namely, cash upon the arrival of the vessel. No cancellations of orders recently placed in the domestic market have been reported. Collection conditions in the cotton goods in dustry, while still very slow, show marked indica tion of improvement. C otton Y a r n s The 1921 market conditions in cotton goods have been in large measure duplicated in cotton yarns. The demand for yarns during the latter part of January, however, did not reach such large proportions as did that for cotton goods; but on the other hand, neither has the reaction been so sharp. At that time buyers in general, and those for the knitting industry in particular, displayed considerable interest in the yarn mar kets. Although this interest waned to a certain extent during February, the actual demand has been sufficiently great during the past month to appreciably reduce the huge supply of finished yarns which had accumulated in the hands of spinners and yarn merchants. This demand was 8 BUSINESS CONDITIONS and still is primarily for immediate shipment, although some orders for March, April and as late as May delivery have been reported. Operations were resumed in a number of mills and practically all those which had been running increased their production. In spite of the fact that the demand has recently decreased some what, these operating schedules have not been reduced, for spinners are of the opinion that present business will continue and will gradually gain strength. At the height of the buying activity, prices in practically all numbers were increased, but at the present time quotations, for the most part, have regained the level oc cupied prior to the inception of the buying movement. In some of the finer counts, how ever, the prices have not only failed to recede, but have recorded additional advances. While cancellations are a thing of the past with most spinners, there are several reports of a recurrence of the practice. Collection condi tions are showing a slight improvement. View ing the situation as a whole, yarn men in general are well satisfied with the results of the past month and are looking forward with a more opti mistic spirit toward further developments. The resumption of manufacturing activity in the cotton industry as a whole during January is reflected in the consumption figures issued by the Census Bureau. During that month 366,270 bales of lint cotton were consumed in mills of the United States, an increase of 71,419 bales over December, 1920. That the industry is still operating far from its total capacity, however, is shown in the fact that 591,921 bales were con sumed in January, 1920, or 225,651 bales in excess of that used in January of this year. The stock of cotton, exclusive of linters and active spindles, on January 31 compared as follows: remains excessive and as a result the cotton mar ket continues to display weakness. JV O O Jl W ool C loth F IRMS reporting to us this month are unani mous in their reports of increased demand for woolen goods. Buyers, however, show a very cautious spirit and the majority of orders are for immediate delivery. This seems to be due to the fear that the revival in demand is temporary and principally to take care of the seasonal change in women’s dress goods. Tricotines, serges and fancy twills are the materials which form the backbone of the demand, and this seems to be the foundation for the fear that the call for these fabrics will end with the Easter season. The timidity shown by purchasers is engen dered by the fluctuations in yarn prices. Any inception of a buying movement has served to advance prices of yarns, which necessitates a corresponding increase in the cost of the manu factured article. Manufacturers feel, however, that a market can be developed only on a gen erally lowered basis, which they insist cannot be maintained if the cost of raw materials is ad vanced. No jobber is willing to stock up with goods which may later fall in price, and the same spirit is reflected in the dealings of the retailer. Each feels that prices are not as low as they could be or will be, and holds off from any buying but that which is absolutely necessary. As a consequence of this restricted buying, prices recede to a point so low that as soon as any activity is resumed they stiffen. Buyers recoil from the advanced prices and the cycle of fluctuations is repeated. A favorable sign is the experience of one of Jan. 31, ’21 D 31, ’20 ec. Jan. 31, ’20 the mills in this district. This mill has received In manufacturing es 1,258,837 tablishments ....... 1,273,067 1,952,326 orders for specialties and fancy goods for six 5,623,538 3,758,329 In warehouses........ 5,645,368 months ahead, but they prefer to limit their orders 29,879,402 33,856,472 Active spindles....... 31,509,021 to three months. Two other large manufacturers of dress goods report that their mills are running Although there is a slight increase in the con at full capacity with both day and night shifts. sumption of cotton in this country, the export Even at this, however, it is impossible to supply demand is so small that the available supply the demands of their customers. BUSINESS CONDITIONS Present prices are firm, being reported as a little better even than a month ago. One line of tricotines is today selling at $3.25 a yard as compared to the peak price of $4.90. A notable growth in the demand for men’s wear is also a new development of the past month. For a long time it had been difficult to stimulate interest in the fabrics used in the manufacture of men’s wear. But during the past month it is said that they have been selling rather freely at an advance of about 7F2 per cent. There is little scope for cancellations in the character of the orders which are being placed, namely, for immediate and even rush delivery. Purchasers, however, are laying great stress on delivery dates, and in a few cases, where it has been impossible to supply the orders in time, they have been cancelled. Wages on the whole have been lowered. The reduction in mills in the city of Philadelphia is generally about 10 per cent, but those located outside Philadelphia report greater reductions varying from 15 to 25 per cent. Collections are still tardy but are improving somewhat. 9 Apr. ’20 2/20 7s worsted. . . 8s worsted............ 2/23s wool yarn. . . D ’20 ec. Jan. ’21 Feb. ’21 32.75 3.25 2.20 31.00 1.12 1.00 31.10 31.15 1.35 1.25 1.00 1.00 This tallies with a corresponding stiffening in the prices of raw materials. With the rising market for yarns, cancellations have ceased to trouble the manufacturers. Col lection conditions are also greatly improved. The only exceptions to this improvement are the firms who have not yet been able to liquidate their stocks. Wages have been reduced in the majority of the plants and there has been a considerable augmenting of the number of employees in the various mills. One manufacturer quotes the actual number of workers as follows: “ Peak number during 1920 was 515; on January 1, 1921, about 200 on half time; at the end of February, approximately 420 on the payroll.’’ Another large employer reports that he is employing practically the same number of workers, but is running more hours in the week. SILK^ W ool Y a r n s I he stagnation in the wool yarn market was mdeed complete, with an entire absence of buying for many months, so that, as one firm tersely but truly says, the only way in which business could trend was upward. Phis upward turn has apparently come with the month of January and has continued through out February, resulting in a stronger market for w°ol yarns than at any time since May 1920. This increased activity is almost exclusively for the spring season’s merchandise. The demand for fall yarns has not revived as yet, but there are a few inquiries. Yarns are very plentiful and prices, which have been below the cost of production, have advanced during the past two months. The following quotations were submitted by one of °ur reporting firms: R APID strides have been made by the silk - industry in its movement toward a nor mal operating basis. The inquiries which were so prevalent during the first weeks of January were followed by a rather active demand and business was characterized as “ brisk” during the latter part of that month and the early days of February. Since that time the demand has slackened somewhat but not to such an extent as to cause any concern. In fact the spirit in the markets at the present time is optimistic, for buyers displayed much interest in the offerings at the silk show in New York. The silk piece goods market was most favored in this revival of interest. Taffetas, particularly in navies and browns, were and continue in active demand. Due to the radical curtailment of operations during the past nine months, a shortage has developed in these numbers, and as a result prices have increased in some quarters. 10 BUSINESS CONDITIONS A like situation exists as to crepes de chine. Satins and messalines are receiving more atten tion and prices in these materials have also advanced slightly, but manufacturers report that these quotations are still below replacement costs. The largest proportion of the demand has been for immediate or nearby delivery. Jobbers have placed few orders for forward shipment, being unwilling to make commitments in view of the considerable uncertainty which still exists as to the future course of the raw silk market. On their part manufacturers are equally averse to accepting orders for distant delivery. As a result of the present interest in silk piece goods, a number of mills in this district, having largely disposed of their finished stocks, have resumed operations after a lay-off of many months. The industry is by no means running at its total capacity, however, for many concerns question the advisability of manufacturing for stock any materials which may prove to be unsalable. A liberal estimate places the indus try’s present operating capacity at 50 to 55 per cent* No general reduction in wages has been made, but the reports of several manufacturers show decreases from the peak scales of early 1920, varying from 15 to 20 per cent. Collection conditions are much improved and on the whole are reported as fairly satisfactory. The ribbon market is also experiencing a re vival of activity. The manufacturers and selling agents report fairly large orders for immediate and close-by shipment. Future needs are not being generally anticipated, although there have been some orders dated for delivery over the next few months. Stocks of finished ribbons are being rapidly depleted and as a result a resumption of manufacturing activity is reported. Manufacturers of silk wearing apparel report a fair volume of business, made up primarily of small sized orders for the Easter trade. Buyers have thus far refrained from making commitments for shipment beyond that date, but in quiries are very general and producers express themselves as wholly satisfied with recent devel opments. During the latter part of January, the raw silk market experienced the most active demand it had seen since the collapse of the Japanese markets. Manufacturers placed fair sized orders to supply their needs and prices in several numbers strengthened considerably. This de mand sagged off somewhat during the first week of February, but at the present time there is considerable activity in the nature of “ filling in ” orders. According to a recent report of the Silk Associ ation of America, the amount of raw silk with drawn for consumption from stocks stored in New York was 22,176 bales during January 1921, an increase of 12,748 bales over the previous month. As of January, the amount in storage is placed at 31,859 bales. Imports during the month totalled 9499 bales. Taken as a whole the present situation in the silk industry is better than for many months past. All factors are looking forward to a fur ther increase in business and are making prepa rations to supply it. H O SIE R Y A C T IV IT Y in the hosiery markets is again - * jl hampered by the instability of prices. As the frequency and size of orders increased in the general buying movement of January, prices as a whole showed considerable stiffening and a number of advances were made. The rising cotton yarn market at that time was in part responsible for this. These increases served as a partial check on the demand, for many jobbers insisted upon dictating their own terms as they had done for many months past when making small hand-to-mouth purchases. On the other hand, manufacturers and selling agents were equally determined to maintain the new levels. | Considerable business was placed at these prices j until raw cotton quotations broke late in the j month, and yarn prices reacted early in February. I With these developments, the demand fell off sharply and hosiery prices lost much of their previous gain. At many mills the increased price is being maintained, however, and as a result a disparity exists between the quotations on the same numbers offered by different mills. Prices are BUSINESS CONDITIONS fluctuating more or less rapidly and indeed the quotations at individual mills vary from one order to the next. Another disturbing element is the fact that on some lines of hosiery not only have no advances been recorded, but prices have continued to decline since the first of the year. As an example of this, one mill reports that its present quotations on plain silk lines are 7 per cent under those of January 1. The course of prices in the immediate future is very uncertain and jobbers, therefore, are in a quandary and are operating very cautiously. As a result the demand for general lines at the present writing is very limited as compared to this time last month, and exists only where goods must be obtained to fill depleted stocks or where there is a consuming outlet. On the other hand, there is still a fair demand for fancy lines for the Easter trade, and the prices on these are holding firm. In spite of the compara tively sharp reaction from the good business of January, the feeling throughout the industry is fairly optimistic. The orders placed at that time were, in general, sufficiently large to keep the mills running until the end of this month, at the limited capacity they have been main taining recently, and there is a movement afoot to open the fall lines early in March. Already there are isolated cases of orders placed for September and October delivery. Cancellations have again made their appear ance. Jobbers, noting in some cases a slight reduction in quotations as compared to the prices at which they contracted, have attempted to countermand their orders. They are meeting determined resistance from the manufacturers, however, and in no cases are the cancellations being accepted. I'he wage controversy in the full fashioned hosiery industry is still unsettled. As the demand grew stronger and operations were increased, an attempt was made to reduce labor schedules, but this was promptly followed by much dissatis faction, and in some quarters strikes were called. Since mills are not yet running at full capacity, has been possible to obtain the needed forces. In the seamless hosiery industry, the wage rcvisions made have been accepted for the most 11 part, and mill owners report that the employ ment situation is very satisfactory. Collection conditions, while still far from nor mal, are gradually improving. Considered as a whole the hosiery industry, since the first of the year, has made a big step toward recovery, and although much must still be done before business may be called normal, the beginning has been made. OPERATIONS IN THE HOSIERY INDUSTRY January, 1921 For firms selling to the wholesale trade: 1. Product manufactured during month named: a. As compared to previous month............ b. As compared to same month last year.. . 2. Finished product on hand at end of month named: a. As compared to previous month............ b. As compared to same month last year. . . 3. Raw materials on hand at end of month named: a. As compared to previous month............ b. As compared to same month last year.. . 4. Orders booked during month named: a. As compared to previous month............ b. As compared to same month last year. . . 5. Unfilled orders on hand at end of month named: a. As compared to previous month............ b. As compared to same month last year. . . For firms selling to the retail trade: 1. Product manufactured during month named: a. As compared to previous month............ b. As compared to same month last year.. . 2. Finished product on hand at end of month named: a. As compared to previous month............ b. As compared to same month last year.. . 3. Raw materials on hand at end of month named: a. As compared to previous month............ b. As compared to same month last year.. . 4. Orders booked during month named: a. As compared to previous month............ b. As compared to same month last year.. . 5. Unfilled orders on hand at end of month named: a. As compared to previous month............ b. As compared to same month last year. . . - 9.3% - 75.5% - 3.5% + 34.1% - 3.5% - 35.6% +213.5% - 61.9% + 81.9% - 81.0% - 73.8% - 93.2% - 9.4% - H-1% + .7% - 43.6% + 155.4% - 82.3% + 90.2% - 99.3% UNDERW EAR of light-weight under wear have been variously affected by the buying movement which began during the second half of January. There are many statements to the effect that the total output for the next two and three months was sold at that time. an ufacturers M 12 BUSINESS CONDITIONS From one concern comes the report of orders Considered as a whole the underwear industry which will keep its plants running at full capacity is rapidly recovering from the inactivity of 1920. until June i. Other mills, however, were not The individual orders placed have not been large so fortunate, and they state that while some in size and few buyers have made commitments business was booked it was mainly for immedi for more than a small percentage of their spring ate shipment and would barely keep the mills requirements. The buying has been very general, operating until the end of February. As a however, and it is expected that the re-orders will general proposition, however, the demand was be of sufficient size to make the present spring active for about three weeks. During that time, season a normal one. with the exceptions noted above, the mills were unwilling to book orders for distant delivery, being of the opinion that prices would show OPERATIONS IN THE UNDERWEAR considerable improvement. INDUSTRY Quotations were in fact increased and this, January, 1921 * coupled with a declining cotton market, caused 1. Product manufactured during month named: - 12.8% a. As compared to previous month............ a falling off in the demand. At the present b. As compared to same month last year. . . - 69.2% time it is far below the proportions reached dur 2. Finished product on hand at end of month ing the last two weeks in January and the first named: a. As compared to previous month............ + U% in February, but there is sufficient new business, b. As compared to same month last year. . . + 34.2% in addition to re-orders, to give the markets an 3. Raw materials on hand at end of month named: appearance of considerable activity. The spring + 12.1% a. As compared to previous month............ season has already been delayed so long that b. As compared to same month last year.. . - 47.5% 4. Orders booked during month named: jobbers realize the necessity of placing orders +245.0% a. As compared to previous month............ at this time if a shortage is not to develop when b. As compared to same month last year.. . + 71.4% 5. Unfilled orders on hand at end of month the consuming demand arises. Manufacturers named: +267.2% on their part realize that this demand will not a. As compared to previous month............ b. As compared to same month last year.. . - 72.3% develop if prices are increased to any great extent. On the other hand, they contend that present quotations allow for practically no profit and must be increased somewhat. The present C A R P E T S oA N D R U G S problem, therefore, is to fix a price basis which will prove equitable to all factors in the trade A R PE T and rug manufacturers are passing through a discouraging period, which prob and at the same time allow for the setting of an attractive retail price level. ably will not be alleviated until the opening of As the majority of manufacturers have not the fall season on April 1. It is felt by manufacturers that concerns are opened their fall lines the market for heavy weights is dull at this time. The first week in doing business with lower stocks than ever before. March is the date set for the general showing. In spite of this fact, buyers are holding off in A number of mills have anticipated this opening, anticipation of the re-pricing which they feel however, and have received fair sized orders for will take place with the opening of the fall line fall delivery. As a result of these, manufacturers of carpets. The only orders being placed are in cases where are much encouraged and are looking forward eagerly to the general opening. job lots can be bought at great reductions. One The wage reductions which have been put Philadelphia mill during the latter part of Febru into effect have been accepted without comment, ary advertised an extensive manufacturer’s sale since the workers, for the most part, have realized of their rugs at low figures, some as low as 50 per the impossibility of operating without a revision cent of the former prices. This sale included at the present market. Collection conditions are Wiltons, Axminsters, Brussels and velvets. This is an indication that the manufacturer feels improved at this time. C BUSINESS CONDITIONS 13 there is a market for rugs at reduced prices and district has been experiencing a decided revival intends to give the public the opportunity ol of activity. During the third week of January, buyers entered the markets, and as they increased demonstrating it. Prices are much lower and continue to recede, in number and the orders gained in size business being quoted at from 20 to 40 per cent, below assumed quite encouraging proportions. Not the peak prices attained. Raw materials are in all concerns were affected alike by this activity ample supply and are much lower in price. and the reports concerning existing conditions Worsted yarns are in some instances 50 per cent reflect this varied success. lower than they were a year ago, and cotton One of the large manufacturers of children’s yarn which sold for 65 cents a pound a year ago shoes states that sales for the month of January can be bought today for 20 cents a pound. and the first ten days of February were greatly The attempt which was made last month by in excess of the similar period of 1920. This is Wilton and Brussels manufacturers to reduce qualified, however, by the fact that orders for wages 25 per cent was met by opposition. As a 1920 spring goods had, in large measure, been consequence all these mills are at present idle. placed prior to the first of the year. Another Manufacturers feel that in order to institute the concern states that it is unable to accept any lower prices which the public insist upon, it is further orders for March delivery, as the demand necessary to lower operating costs considerably. is far greater than the present supply coupled One of the factors of expense, of course, has been with the inability to meet the demand in the the large increases in the wages of textile workers. required time. This firm ventures the opinion The workers in this industry, however, seem not that many retailers, having delayed the placing yet prepared to accept a reduction in wages. of orders, are finding it difficult to acquire the In contradistinction to this rather disquieting needed stocks for the Easter trade. This state and discouraging condition of affairs is the report ment is certainly true with respect to several from a mill in one of the outlying sections of styles and grades which have been in most active this district. This mill has recently experienced request, but it must be thus qualified. an improvement in the buying demand and At the other extreme are the statements of ascribes it to the general reductions which they several concerns that while they did receive a have offered. They are at present receiving fair amount of business during the early days of orders sufficient to maintain 50 per cent, of their the movement, the present demand is particularly capacity, and although employing practically slow and the inquiries few. The vast majority their full force, they are operating only five days of concerns during the past month have experi a week. enced a liberal increase in business and while Cancellations, having run their course on back this is falling off to a slight extent at the present orders, are no longer a pressing factor. The few time, the orders received will keep most plants orders recently placed are of so insignificant a running until Easter, and many others beyond character that any cancellations of them are that date. considered of no great importance. Cancellations persist in the shoe industry, and Collections appear to vary with the individual while not so vexing a problem as during the last ,Tfill; some have little or no difficulty with them, six months of 1920, continue rather annoying. while others find it necessary to continue exten Many manufacturers, of course, state that they sions. I are free from this evil, but reports of the receipt of cancellations are very common, and several J^EATHEX concerns have written that orders placed during the January activity have been countermanded. S hoes The tendency on the part of most buyers has I been to place substantial orders for Easter, but T N D E R the stimuli of the convention in Milwaukee and the approaching Easter I in their commitments for delivery beyond that season, the shoe manufacturing industry in this time they have been rather conservative. Several 14 BUSINESS CONDITIONS large orders for later spring shipment have been reported, however. While business thus far has been gratifying, the success of the spring season, as a season, depends upon the number and the size of re-orders after Easter. These, in turn, are dependent upon the attitude of the consumer. The principal demand has been for so-called novelty shoes, with special attention being given to style and quality, for the public today not only is demanding a lower price, but is showing more interest in the quality of the goods offered at these reduced prices. Price quotations, which have been trending lower for the last half year or more, seem to have reached a fairly firm basis, no sharp declines having been reported during the past month. Although some few advances have been recorded, and in spots, quotations are still weak, as a general proposition stability has been established. Wage scales have not been reduced in the shoe industry. This statement may seem surprising in view of the numerous revisions in other industries, but it must be remembered that labor rates for shoe workers did not approach the high levels reached in textile and other lines. Collections are still greatly retarded, but there is some evidence of improvement. L e ath er The inquiries which were so general in tanning resulted in an improved demand for leathers, but the sales recorded have not been of sufficient volume to say that there has been an active revival of business. It would seem that shoe manufacturers are fairly well stocked with leather, for in spite of the fact that they have received comparatively large orders for their product they have failed to make an impressive appearance in the leather markets. But the demand is increasing daily, and the situation has improved considerably over that which existed during the closing months of 1920. The principal demand in upper leathers has been for novelties and fancy colors, and in many of these the supply has not been equal to the demand. This is particularly true of some grades of calf skins. There are also some sales of colored glazed kids, and slightly more attention is being given to blacks. The demand for staple leathers is far from active, although in isolated cases there are reports of fair sized orders. While the domestic demand is showing signs of improvement, the export business is, for all practical purposes, negligible. Since the Ameri can tanning industry depends for its prosperity in large part upon the foreign consumption of its products, this phase of the situation is one of the real drawbacks at the present time. The price situation has been greatly stabilized. The continued declines of the latter part of 1920 were checked early in January, and since that time there have been no downward revisions. | Slight advances have been recorded in some of j the leathers for which the demand has been most ! active. Tanners, as a whole, have increased their production and unemployment in the in dustry has been somewhat relieved thereby. ages have been reduced in practically all plants, j WT | with cuts of 25 per cent being common, and i there have been some cases of revisions as great as 30 and 40 per cent. I Cancellations are no longer a problem, for few if any orders for distant delivery are on the books, ! recent business having been confined almost ex| clusively to immediate or nearby shipment, j Collections of domestic accounts are wholly satisfactory, but many foreign accounts are long | overdue and are furnishing much difficulty. The shoe leather industry in general may be | said to be displaying a distinctly better turn than j at any time since last spring when the readjust ; ment had already made considerable progress. j | | | j i j B eltin g I There has been a rather decided improvement ! in the demand for leather belting since the first ! of the year, and though the orders have been small and confined almost entirely to immediate needs, these requirements have become so in | sistent that in the aggregate a fair volume of : business has resulted. W'hile not all manu j facturers have participated in this revival, the j report of a marked growth in the number of j inquiries is universal, and the industry as a whole j is, therefore, prepared for the expected increase | in business. BUSINESS CONDITIONS The increase in the demand for leather belting is indicative of the enlarged activity in many manufacturing industries. Prices have ceased their downward trend and have become fairly firm. Indeed, advances have been noted in several instances, bringing such quotations to a more normal level and prices as a whole have generally strengthened. This is true despite the fact that buyers have attempted to obtain further concessions when making purchases. Wages in this industry have been reduced, tanging from io to 25 per cent generally, with isolated cases of a 35 per cent reduction. Pro duction has been increased, but since even at the present time barely 50 per cent of the in dustry’s total capacity is being operated, labor is easily obtainable at the new rates. Collection conditions, for the most part, have shown con siderable improvement and are reported as very satisfactory. H id e s In spite of the revival in shoe and tanning circles, activity in the hide market continues at a very low ebb and there are no present signs of improvement. There is some slight demand, but it is far from adequate to absorb all the hides that are being offered. Stocks are still rapidly accumulating, and as a result, prices continue on the downward trend which had its inception some nine months ago. When calf skins, which had previously declined to 13 cents a pound from a peak level of $1.05 advanced to 20 cents during January, the tone of this market improved and a recovery in hides in general was looked for, but instead of a further advance, calf skins reacted to 17 cents a lb. and the expected recovery was nipped in the bud. Hide dealers are hoping that the activity in the manufacturing lines will soon be reflected in their market, but at the present time there are indications of this, and the market drifts listlessly with no definite trend. RUBBER | HE rubber industry has been passing through a rather severe period of readjustITlent, during which several large companies 15 found it necessary or advisable to reorganize. This is said to be due to the fact that many firms indulged in over-expansion of their plants in order to take care of the abnormal rush of orders which were received during the past few years. Two factors have contributed largely to the present stagnation in the rubber industry. The first remote and probably fundamental cause of existing conditions was the over-production of rubber for several years back. During this period, in spite of the tremendous demand for rubber, there was an ever increasing surplus at the end of each year. The following table, taken from the Bankers Economic Service, of February 1, 1921, shows this surplus in actual tons: W o r l d ’s P r o d u c t io n Y ear C a n d (in L o n s u m p t io n o n g P r o d u c tio n T o n s o f C r u d e R u b b e r ) C o n s u m p tio n S u r p lu s 1912..................... 1913..................... 1914.................... 1915.................... 1916..................... 1917..................... 1918..................... 1919..................... 1920*................... 98,928 108,440 120,380 158,702 201,598 256,976 296,579 326,860 403,000 95,863 102,455 99,800 135,214 169,474 229,017 201,620 219,497 300,000 3,035 5,985 20,580 23,588 32,124 27,959 94,959 107,093 103,000 Total.................. 1,971,463 1,552,940 418,323 *Estimated The second and more immediate cause of the slump was the general slackening of activities in those industries which usually absorb large quan tities of rubber. The most notable example of this is the automobile industry, which annually consumes about 70 per cent of the rubber im ported into the United States. For several months, tire manufacturers and dealers found themselves with huge accumula tions of stock for which there was almost no demand. It is now reported by firms here and there that a slight revival in the demand for tires took place during January, and has continued through February. This revival is very limited, however. Manufacturers of mechanical rubber goods and specialties also noted a return of activity during the middle of February, with some reporting a decided increase in the volume and the number of orders received. The limited amount of 16 BUSI NES S CONDITIONS building has reacted so adversely upon the manu facturing of code wire that for the first time in years many code wire plants are shut down. Rubber manufacturers catering to the code wire makers, therefore, have been cut off from a very large source of their business. The price trend on tires and mechanical rubber goods is downward, varying in degree from io to 50 per cent. There is much variance with regard to cancellations, some firms still receiving them in considerable numbers and others experi encing none at all. Collections are slow, especi ally in the South and the farming districts, but are not considered any more retarded than they were last month. Vulcanized fibre products, covering as they do so wide a field, are supplied to railroads, textile, silk and woolen mills, automobile companies and trunk manufacturers. These are all lines that have been very dull for many months, and con sequently demand for fibre products is exceed ingly low. The few inquiries and the spasmodic small orders are hailed by some as a sign of the depletion of stocks, which they think presages a recovery in demand. Others, however, feel that buyers are holding off not only in anticipation of lower prices, but also because of a basic lack of demand. Although a few lines are holding firm owing to the fact that the cost of manufacturing them has not been lowered, prices on the majority of fibre products have been reduced from 20 to 30 per cent below peak prices. No cancellations of orders placed since 1921 have been recorded, which is a rather encouraging fact. Except in some special instances, notably the railroads and manufacturers of automobiles and accessories, collections are said to be good. Foreign collec tions are also reported good in most countries, except Italy and France, and in these the ex change conditions necessitate long extensions of credit. In all branches of the rubber, industry, wages have been materially lowered— on the average 15 to 20 per cent— but are still considerably in excess of 1914 levels. Plants are not running at normal capacity, nor in most instances is the full working corps maintained. The employment situ ation is one of dwindling numbers, the majority of firms reporting continual declines in the number of employees from the peak of 1920, with many plants reducing their forces even further since January 1, 1921. /Apropos of operating conditions one manufacturer, whose experience seems to be typical of many, writes: “ We are employing now, actual workers in the mill, 50 per cent of the peak of last year. Our mill is running four days a week, 8 hours a day as com pared with six days a week, 9F2 hours a day during 1920.” Rubber is said to be cheaper at present than at any time in the history of the industry. In order to illustrate the radical decline in its price, we again quote from the Bankers Economic Ser vice: Up-River Para Fine January 1913........................................... 1914.......................................... 1915........................................... 1916........................................... 1917........................................... 1918........................................... 1919........................................... 1920........................................... 1921*......................................... 31.06 .75 .67 .86 .77 .62 .61 .50 .18 Fine Ribbed S m o k e d S h e e ts 31.13 .61 .92 1.00 .79 .60 .52 .55 •18K *Latest quotations The Rubber Growers’ Association, spurred to action by the uneconomic condition created by the excessive production of rubber, pledged themselves to restrict their output 25 per cent for six months, beginning November 1, 1920. This procedure while curtailing production will also have the beneficial effect of conserving the supply of rubber for future needs. The action was given support by London and Javanese planters not members of the Rubber Growers’ Association, and it is expected to result in a more equable relation between production and con sumption. F U R N IT U R E N the general policy of abstinence from buying, pursued for some time, furniture was an almost totally neglected commodity. Retailers, therefore, have been stocked with furniture, which they bought at high prices and I BUSINESS CONDITIONS found it impossible to dispose of. The reduc tions made by manufacturers have not been at all drastic, so that retailers, sharing the public’s expectation of further declines, are holding off. The few orders booked are for replacement only. I he reductions which have been made are said to be principally on the medium and cheaper lines, the better grades remaining firm. Although some factories cut wages about io per cent on the first of February, this reduction seems not to be general. Neither have the plants reduced their working forces to any great extent, most reductions being chiefly in the shipping de partments. The number of working hours, how ever, has been curtailed in most plants. There is no apparent shortage of raw materials. Lumber, mirrors, hardware, varnish and other finishing materials are plentiful, and are also gradually but steadily declining in price. These price declines are deterring manufacturers from stocking up for future requirements. In the majority of factories, cancellations blotted from their books many of the orders received during 1920. The orders booked since January 1, 1921, were all to fill definite requirements, and no cancellations of these have been reported. Collections continue slow, but seem not to cause much concern. 17 which was made in 1919, the capital invested in the paper industry, which is the seventh largest industry in the country, was approximately 114 per cent of the total annual sales. This means that, in order to keep this huge amount of capital productive, the machines, incapable of being con verted to other uses, must be kept in operation. But practically all manufacturers report that for several months they have been running on part time with a full force, or have cut down to a minimum number of employees. However, the past month has shown some improvement in this direction. At the present time the paper plants report a working force of from 60 to 75 per cent of the normal number, a considerable increase from the 35 to 50 per cent on January 1. A reduction in wages has been reported this month by practically all the manufacturing plants. This largely explains the increase in working force, despite the inactivity which is prevalent, for manufacturers express the desire to keep as many of their employees working as possible. The reduction from peak wages, which prevailed in the past year, amounts to from 10 to 20 per cent, but even with this cut they still remain from 50 to 75 per cent over the scale of 1916, and from 150 to 200 per cent over the wages of 1914. Prices have shown a strong tendency down ward, the decline being apparent in all branches of the industry. The total reduction from peak prices during the past few months amounts to LTHOUGH the first week of February from 30 to 40 per cent. Prices are still from 75 L witnessed an increase in the number of to 100 per cent above 1914 prices, but these, the inquiries in the paper market, the general condi manufacturers maintain, were on too low a tion has shown little improvement. The only basis. The greatest declines have occurred in dement of strength which has been evident is a the rougher and heavier grades of paper, with slight increase in orders for low priced small wrapping papers and newsprint showing the goods, but all buyers have been extremely con weakest tendencies. Fine papers, such as bonds servative in any purchases they have made. The and writing papers, have shown the least decrease. concensus of opinion among the prominent paper Spot offers for newsprint are considerably less dealers and manufacturers is that publishers, than the contract prices made in December for printers and small dealers are holding off their the year 1921, but the number of purchasers are orders in expectation of a further recession in limited. The report that the government ex price quotations. Meanwhile, rush orders for pects to save several hundred thousand dollars small quantities recently placed with manufac on the purchase of paper for its printing office turers would tend to prove that the stocks of this year is an indication of the decrease in prices this year as compared to those of last year. Publishing houses are low. According to the census of manufacturers, It is said that bids were the “ lowest that have A 18 BUSINESS CONDITIONS been received in several years,” and competition lor the order was extremely lively. The raw material supply is quite sufficient to meet the needs of the industry, with a continuing recession of prices. There is, however, no as surance of stability in these prices and the timid ity of buyers has retarded activity in the market for pulp and sulphite. The fact that many manufacturers have large stocks of high priced materials on hand also serves to retard the market to some extent. Sulphite underwent a io per cent drop in the beginning of February, and is continuing to decline. Despite a few reports to the contrary, the opinion is that the cancellation evil in the paper industry is about over. Some cancellations, how ever, are reported from foreign purchasers, which may be regarded as a resultof the disadvantageous exchange rate which operates against them. Collections are reported as only fair, largely because of the fact that customers are not dispos ing of their goods, and also that accounts with foreign customers are extremely poor. PAPER^ POXES A N increase in interest on the part of purchasers of paper boxes has been noted during the past few weeks. Although it can hardly be said that conditions have improved to any great extent, the increase in the number of inquiries, which are reported by practically all manufacturers, gives a more encouraging aspect to the industry. There is keen competition for the small orders which are being placed, and all of these are for immediate delivery. It is now practically impossible to persuade consumers in this line to buy for the future. There can hardly be any expectation of other than limited buying, of a hand-to-mouth character,until manu facturing industries have used up the stocks of boxes which were on hand at the time their activities were curtailed. The easing up of the demand in the candy market has also had a detrimental effect on manufacturers who handle that type of business, for the quick turnover in that industry has always necessitated the carry ing of fairly large stocks. The trend of prices has continued slightly downward, with competition playing a large part in price quotations. There is, however, a ten dency toward a stabilization of mill prices at the low point of from twenty-five to forty per cent below the peak of the past year. The raw material supply is ample for all re quirements, and prices are on about the same basis as prevailed January ist. The first of February witnessed a slight advance in the price of board, but since that time it has returned to its former position. The weakening of the market for newsprint has had some influence on the situation. Many manufacturers who, during the shortage of that material, turned their atten tion to its manufacture, have withdrawn from the market and resumed the manufacture of board. There has been no concerted action by manu facturers on the question of wages, some having reduced from ten to twenty-five per cent, and others maintaining the peak wages of 1920. Practically all plants have been operating on part time, however, working forces on January ist being approximately 50 per cent of the number employed in 1920. The encouraging aspect of the market during the past few weeks has caused a number of plants to resume operations on a steadier basis however, and many have increased the working force slightly. This industry has been notably free from can cellations, but suspension of orders and post ponement of delivery have been quite prevalent during the past few months. The situation has not been serious at any time, and conditions at present are encouraging. Collections have shown no appreciable change from the general tendency toward slowness, which has been noticed for some time. P R IN T IN G A N D P U B L ISH IN G HE month of January, 1921, witnessed rather conflicting trends in the printing and publishing industry of the district. Both increases and decreases in the demand for the products of printing establishments are reported. The increase has been noted principally in the T BUSINESS CONDITIONS reports of the larger commercial and publishing houses. Although advertising is still being placed on a conservative basis, which tends to reduce to a considerable extent the larger work of these houses, the total volume of business has been maintained by the demand for pamphlets and catalogs of the simple one and two-color type, and for small weekly publications. The majority of smaller commercial establishments report slight decreases in the demand for both small and large work. In both types of establish ments decrease in demand for high class catalogs, luxury booklets and high-grade books is but a reflection of the inactivity of productive indus tries and of booksellers. Prices of the products of the industry have not shown any marked decline, except where there is price cutting, which indicates a desire for busi ness and a disregard of the costs of producing the goods sold. Many publishers are continuing to operate with supplies of paper purchased at high prices, but by far the majority have reduced their stocks to the minimum which will meet current requirements, and are making only sufficient re placements to meet the daily demand. This they are well able to do, for the paper situation has taken a much easier turn, and where heretofore it was necessary to place orders some time ahead, with no certainty of receiving them on the date prescribed, special orders are now made up almost immediately, and the paper dealers and manu facturers are out on the market to dispose of their Product. The prices of paper have broken considerably during the past few months, with a further reduc tion during January of from io to 15 per cent in the price of bond paper, and slightly greater reductions in book papers. Paper comprises from 30 to 40 per cent of the cost of printed Products, labor another 30 per cent, and the balance is made up of miscellaneous items. Ink, Paste, binding materials and the like have shown no reduction in the past few months, but the proportion of the cost which is represented by these articles is not large. Although some houses report slightly better c°Hection conditions during January, others say that their customers are inclined to ask for extenS1° ns or are giving trade acceptances for from 60 19 to 90 days. The situation seems to show little change on the whole, with the general condition only fairly good. However, this period of the year is usually somewhat slower than other seasons. O F F IC E ^ A P P L IA N C E S HE market for office appliances has shown encouraging tendencies during the past month. Although the demand is only slightly better, the general tone of the market is stronger and inquiries are increasing. In the past few months there has been no actual decrease in the need for office furniture and fixtures, but the tendency has been to withhold orders until the period of readjustment has brought the market to a firmer position. The large institutions seem to be holding off" to a greater extent than the smaller concerns, but salesmen report a growing spirit of optimism. They also report that much harder work is now necessary to secure orders than has been the case during the past year, when demand exceeded the supply. Except in the case of filing cabinets and office furniture, which have declined from 10 to 25 per cent, prices have changed very little. Office sup plies, especially those composed largely of paper, have dropped to some extent, which is a reflection of the drop in paper prices. Typewriters, dictat ing machines and adding machines in almost all cases have maintained a stationary price during the past year or two and, although more effort is required to keep business up to its normal stand ard, there has been no general weakening. The cost of manufacture, represented by the prices of raw materials, has had a downward trend during the past month. The rates of wages, however, have shown slight if any reduc tions. Many manufacturers have been operat ing on a curtailed time schedule, and the general impression seems to be that even with a smaller force and shorter working hours, the output has remained approximately the same. Varnishes and other finishing materials also have declined, resulting in a decrease in the cost of repairs and refinishing as well as in the initial cost of manu facture. Employment in the industry dropped T 20 BUSINESS CONDITIONS rapidly during the latter part of 1920, but since the first of the year the number of employees has shown no marked change in one way or the other. Cancellations, which were general during the last few months of 1920, are no longer a problem, largely due to the stability of the price quotations being made. Many cancellations which occurred were the result of the placing of large orders during the period of scarcity, in order to insure stock to meet anticipated brisk business during the winter months. This did not materialize. Collection conditions are about the same, with some variation in the case of individual houses. On the whole, however, they are fair, with the exception of business placed in the South. TOBACCO ONDITIONS in the tobacco business throughout the district have shown little change during the past month. Demand is some what inactive, with purchases being made only to meet the current requirements of local dealers. The latter part of January witnessed a slight increase in activity, but February thus far has been somewhat below normal. Buyers are still holding off with the hopes of a decrease in prices, but there seems to be less belief that this will materialize. Retailers’ stocks are unquestion ably at a low point, and orders have come in recently with requests for quick delivery. The deadlock which has existed between the packer and grower throughout the Lancaster dis trict on the question of leaf tobacco prices has finally been broken, and the crop is rapidly being bought in. Prices of the various lots have ranged from 16 to 20 cents per pound, but no purchases have been made without careful inspec tion by the representatives of the packers. Al though the crop this year was extremely large, it is generally conceded to be of rather poor quality. However, the leaf tobacco held by the manufacturers and dealers on January 1, accord ing to a report from the Census Bureau, amounted to 1,446,984,469 pounds, compared with 1,318,131,291 pounds held a year ago, and even though this year’s crop will not enter into the manufactureof the article until next year and theyearafter, there is no possibility of a shortage of raw material. C Prices for cigars and cigarettes have been reduced only in a few instances, where reductions in costs other than those represented by raw materials have been brought about. Wages in the manufacturing end of the industry have remained practically the same during the past month, with, however, further slight reductions noted in some cases. In the packing industry there has been a material drop in wages, and the supply of labor, in contrast to the scarcity which existed last year at this time, is very plentiful. For several months past plant operation has been curtailed to a large extent throughout the district and there are no reports of a revival of activity during the past month. Cancellation of orders is no longer a problem of any note and collection conditions are unchanged, with some difficulty noted. W H OLESALE QROCCRY TRADE HE wholesale grocery market during Janu ary and the first week of the month of February showed no material change from condi tions prevailing during the past few months. The activity of the first week of January was apparently occasioned by the decrease in retail ers’ stocks, for since that time the market has settled back to its former quiet position. The outstanding characteristics at the present time are a continued lack of confidence in prices on the part of the retailer, increased caution on the part of the buying public, and slight declines in almost all lines handled by the trade. The re tailer continues to send in frequent orders for small quantities, with a desire for smaller stocks and quick turnover. Reports show that in the sections of the dis trict which have suffered most from unemploy ment, conditions are decidedly more unsteady than in those sections which have not felt the inactivity in manufacturing lines. Standard grocery staples are in the most steady demand, while lines such as high-class canned fruits have been almost neglected, even at reduced prices. In many of these lines the output has been far beyond the normal demand, and prudence has prompted the retailer to reduce his inventory of such goods. T BUSINESS CONDITIONS Sugar declined sharply the first of February, all of the large refiners having reduced their prices to a basis of about seven cents per pound. The present quotation is the lowest that has been made in the past two years, and is very nearly at a pre-war normal price. Flour, in some in stances, has declined slightly, but the jobbing trade is still considerably below normal. In the market for tea and coffee no material change has been evident, although the tendency of the coffee market is toward a firmer basis. Rice has dropped slightly, and the price, now practically a pre-war °ne, has attracted a fairly good volume of sales. The market for dried fruits is decidedly weak, the only exception being found in the sales of prunes, which are somewhat larger. Canned vegetables have had an almost normal demand, at prices from 30 to 40 per cent below those of last summer. Canned tomatoes have shown an element of strength, with a general increase in price of from 10 to 15 per cent. The conclusions to be drawn from these condi tions are that the public are buying carefully, are consuming only the foods which are required, and with few exceptions are avoiding the more expensive and luxurious delicacies, which found a ready market during the period of high wages, and correspondingly high prices. The cancellation evil in the grocery trade is almost a thing of the past, but there are scattered reports of retailers who still persist in this prac tice. Collections continue slow, especially in the sections where unemployment is apparent, and m the case of retailers who still persist in their refusal to liquidate stocks and accept the loss on sales at market prices. I he trend of the wholesale grocery market may ke seen from the following figures for the month °f January: W H OLESALE HARDW ARE TRADE HE following figures reflect conditions in the wholesale hardware trade for the month of January, 1921, as compared to December, 1920, and January, 1920: T WHOLESALE HARDWARE TRADE January, 1921 1. Net sales (selling price) during month: a. As compared to previous month............... b. As compared to same month last year...... 2. Accounts outstanding at end of month (selling a. As compared to previous month............... b. As compared to same month last year...... 3. Ratio of accounts outstanding at end of month to net sales during month.......................... 106.7% 1 -6 .1 % -9 .6 % 203.8% EPORTS received from fertilizer companies state that the demand for fertilizers is light, and that farmers have been holding off in the endeavor to secure lower prices. The with holding of orders has borne fruit, as evidenced by the following quotation from the letter of a large manufacturer: “ Manufacturers of and dealers in fertilizers and fertilizer materials have capitulated to the buyers’ boycott, and on the 15th of January a revised scale of prices was announced by leading companies which brought the manufactured goods down to the replacement level. . .” Another manufacturer writes that present prices represent a reduction of approxi mately 30 per cent from the peak. Raw ma terials are ample in supply. The quietness in current demand is in part due to seasonal conditions, and the approach of the planting season assures a certain amount of busi ness. Collections generally are slow. R F IN A N C IA L ^ C0 N D IT I0 N S - 1L9% - 31.9% - 9.0% - 20.8% -26 .0% -17 .4 % F E R T IL IZ E R ^ WHOLESALE GROCERY TRADE January, 1921 • Net sales (selling price) during month: a. As compared to previous month............... b. As compared to same month, 1920............ • Accounts outstanding at end of month (selling price): j1* As compared to previous month............... b. As compared to same month, 1920............ • Ratio of accounts outstanding at end of month to net sales during month............................. 21 F ed eral R e se rve B a n k s ISCOUNTS of member banks at the Fed eral Reserve Bank of Philadelphia, on February 17, amounted to $i 53j774> 000> an in crease of 119,141,000 or 14 per cent in the course D BUSINESS 22 CONDITIONS of the month. On the same date last year, how ever, member banks’ borrowings were $249,483,000, or very near the peak, so that comparison over the period of a year shows a large decrease. Note circulation on January 17 was $265,461,000, as compared to $255,304,000 on February 17. Net deposits changed only slightly during the month, but cash holdings declined from $213,809,000 on January 17 to $184,326,000 on February 17. As a consequence, the reserve ratio declined from 59.6 per cent on January 17 to 52.6 per cent on February 17. The combined statements of the Federal Re serve system show continued improvement, as reflected in the following figures: S a v in g s B a n k D e p o sit s Saving deposits reported by 24 institutions in this district showed a further increase during the month of January, participated in by institutions both in and outside of the city of Philadelphia. In explanation of this increase in the face of curtailed employment, one banker gives the fol lowing reasons: “ Less extravagance; money coming out of ‘ hiding,’ earnings ‘ go further’ because of lower prices of commodities. Some industries resumed operations after January 1st, giving employment to an increased number of workers.” Comparative figures on savings de posits follow: O utside of Philadelphia Feb. 18,1921 Jan. 14, 1921 Feb. 20, 1920 Total bills on hand........ 32,531,282,000 32,652,952,000 32,890,227,000 Note circula tion.......... 3.037.444.000 3.159.491.000 2.977.124.000 Total reserves 2.352.990.000 2.288.538.000 2.035.440.000 Reserve ratio. 50.3% 42.7% 48.1% R epo rtin g M e m b e r B a n k s The total loans and investments of the report ing member banks in Philadelphia, Camden, Scranton and Wilmington have changed little during the past month, and the same is true of deposits and other items contained in their weekly reports. In Philadelphia 1921-February 1. . 352,189,574 3256,574,783 January 1 . . . 51,140,089 253,320,499 1920-December 1.. 51,237,019 243,506,317 November 1. 49,155,891 242,990,138 February 1. . 48,255,184 241,033,243 Total 3308,764,357 304,460,588 294,743,336 292,146,029 289,288,427 D e b it s to I n d iv id u a l A ccount Debits to individual accounts, as reported by the member banks of 13 clearing houses in this district, in general fell off from the figures of last month and a year ago, as shown by the following figures: February 16, 1921, $360,659,000; Janu ary, 19, 1921, $405,930,000; February 18, 1920, $405,577,000. It should be noted that in three of the cities— Harrisburg, Johnstown and Read ing— a larger number of banks have reported to us this year. COMPILED AS OF FEBRUARY 19, 1921 This business report will be sent regularly to any address upon request. BUSINESS STATEMENT Federal Reserve Bank of Philadelphia (000’s omitted) Resources CONDITIONS 23 BUSINESS AND FINANCIAL INDICATORS Feb. 17,1921 Feb. 17,1921 M ago Year ago onth Gold reserve. . . 3181,429 3212,984 3134,491 Other cash............................ 466 2,898 825 Total reserve................... 3184,327 3213,809 3134,957 Discounts—Secured by U. S. securities......................... 3108,104 3106,915 3154,513 54,491 45,672 Discounts—all other............ 37,699 9,285 23,480 7,206 Purchased bills.................... 33,336 U. S. securities.................... 38,207 32,306 Percentage increase or decrease com pared w ith Previous m Year ago o. Philadelphia banks: Loans........................ 3712.969.000 - 1 % - 1 1 Deposits.................... 627,025,000 —4 % - 7 Ratio loans to deposits 114% 108 %* 120 Federal Reserve Bank: Discounted paper. . . . 3153.776.000 + 7 % - 2 3 Reserve ratio............. 52.6% 61 %* 40 90-day discount rate. . 6 %* 6 6% Commercial paper........ 6 7A % 7H % * % % %* % %* %* %* Total earning assets......... 3210,592 3192,106 3248,516 Uncollected items................ All other resources............... 362,273 2,817 361,622 2,026 391,519 2,463 Total resources................. 3460,009 3469,463 3477,455 Liabilities Capital paid in.................... Surplus................................ Profit and loss.................... Government deposits. .”....... Members’ reserve account. . Collection items, etc............ Feb.17,1921 M ago Year ago onth 38,570 17,010 1 32,773 104,377 50,105 38,494 17,010 1 3806 106,778 47,380 38,130 8,805 7 32,726 107,926 84,926 Gross deposits................... 3157,255 3154,964 3195,578 Federal reserve notes........... 3255,304 3265,461 3235,594 26,673 22,195 Federal reserve bank notes... 19,582 2,668 All other liabilities............... 1,338 2,287 Total liabilities................ 3460,009 3469,463 3477,455 RESOURCE AND LIABILITY ITEMS of Member Banks in Philadelphia, Scranton, Camden and Wilmington At the close of business Feb.11 1 Jan. 14 1 Feb. 13 1921 | 1921 | 1920 (In thousands of dollars) United States bonds............ Victory notes........................ Certificates of indebtedness.. 3 4 5 ,7 0 0 12 ,2 5 5 1 2 ,0 1 6 3 4 4 ,9 0 5 1 1 ,1 8 9 1 1 ,8 1 0 3 3 8 ,3 4 3 1 1 ,5 7 6 4 9 ,9 0 0 Total U. S. securities owned. Loans secured by U. S. securities.................................. All other loans and investmerits... ........................... 3 6 9 ,9 7 1 3 6 7 ,9 0 4 3 9 9 ,8 1 9 3 5 ,5 3 7 4 2 ,2 2 9 5 5 ,7 7 1 7 3 0 ,3 8 2 7 2 8 ,3 9 1 7 1 7 ,4 9 8 Total loans and investments 3 8 3 5 ,8 9 0 Reserve with Federal Reserve Bank................................ 6 7 ,2 8 2 Cash in vault...................... 1 5 ,3 8 0 Net demand deposits........... 6 5 3 ,2 2 2 I ime deposits..................... 3 8 ,2 8 0 5 ,7 0 4 Government deposits.......... 58 Number of banks reporting.. 3 8 3 8 ,5 2 4 3 8 7 3 ,0 8 8 6 3 ,9 0 7 1 8 ,4 0 5 6 6 1 ,7 5 6 3 7 ,0 0 3 6 ,2 2 7 59 5 9 ,8 3 8 1 7 ,9 1 6 6 6 5 ,6 0 4 2 6 ,0 7 0 5 ,8 9 9 56 Jan., 1921 Percentage increase or ipared with decrease coT Previousm Year ago o. Bank clearings: In Philadelphia......... 31,852,696,905 - 1 5 121,043,528 - 6 Elsewhere in district. . Total........................ 31,973,740,433 - 1 4 31,124,440 - 4 8 Building permits, Phila.. 1,276,857 - 2 0 Post office receipts, Phila Commercial failures in d istrict (per Brad81 82 street’s) .................... Commodity indices (latest): Annalist (food prices 184.753 - L 2 only)..................... 3185,822 - 6 .5 Dun’s........................ 3123,689 -2 .3 Brads treet’s .............. % % % % % -15 -11 -14 -6 8 - 1 % % % % % * 36 % -36.5% % -26.8% % —40.8% *Actual figures CHARGES TO DEPOSITORS’ ACCOUNTS Other than Banks’ or Bankers’, as Reported by Clearing Houses W Ending eeks Feb. 16, 1921 | Jan. 19, 1921 Feb. 18, 1920 Altoona................ 32.930.000 5.430.000 Chester................ 5.900.000 Harrisburg........... 4.227.000 Johnstown........... 4.790.000 Lancaster............. Philadelphia......... 282,597,000 6.228.000 Reading............... 15.151.000 Scranton .............. 11.387.000 Trenton............... 8.256.000 Wilkes-Barre........ 3.699.000 Williamsport........ 7.627.000 Wilmington...... ,. . 3.437.000 York.................... 33.828.000 33,101,000 5.579.000 4.775.000 2.720.000 7,032,000* 3.626.000 5.212.000 5.341.000 6.054.000 320,858,000 331,070,000 5.711.000 6.459.000 12,068,000 12.762.000 11,188,000 12.597.000 8.722.000 8.743.000 3.805.000 4.546.000 9.356.000 8.527.000 4.094.000 3.733.000 Totals.............. 3360,659,000 3405,930,000 3405,577,000 * Larger number of banks reporting.
@FedFRASER