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Business Conditions Report o f the Federal Reserve Agent at Philadelphia to the Federal Reserve Board October 28, 1920. FE A T U R E S Reduction in orders to manufacturers. Price readjustment proceeding. Labor situation somewhat better. Transportation continues to improve. GENERAL SUMMARY T h e process of readjustment which is taking place within the Third Federal Reserve District is regarded as the natural result of the tremendous expansion incident to the war. In line with the previous lessons of history, we are told that prices in the manu facturing and wholesale markets generally have been declining, and that orders are being withheld until the purchasers feel that a stable basis has been attained. During the past month prac tically all lines of manufacturing have reported a diminution in demand or a continuation of the inactivity in new business which had been felt for a few months hitherto. The opinion of the community seems to be that there cannot be a return of substantial business conditions until consumers are satisfied that prices are stable. What buying there is is being done very conservatively and only for immediate needs. Back orders are enabling many manufacturers to continue oper ations. Unless there is a revival in business, plants will have to shut down when these orders have been filled. Transportation is for the most part fairly satisfactory; raw materials, with few exceptions, are in ample supply and labor is more plentiful. In other words, the factors affecting supply are favorable and production is now rid of many of the difficulties which it had faced for a long period. 1 Reports which we have received from the Pennsylvania Bureau of Employment state that agricultural laborers are apply ing for work in increasing numbers and that a surplus exists in many lines of manufacturing due to the decline in industrial operations. Common labor demand slightly exceeds supply, but the coming of immigrants to our shores may be expected to help this situation. Applicants for clerical work are said to be par ticularly plentiful. The following figures show the number of men applying to the bureau for work in six of the principal cities of this district during the first two weeks of October. OCTOBER First week S e c o n d week Agriculture ................ Building trades .......... Machinery and metals Clerical ....................... Transportation .......... Sales ............................. Common labor .......... M iscellaneous ............ T otal 56 120 397 293 1 ,0 4 8 952 69 70 88 56 14 1 ,5 8 5 276 335 3 ,0 9 5 ................... 19 1 ,1 4 7 3 ,4 3 0 Collections generally are slow, though a few firms inform us that they have been somewhat better during the last few months. The impossibility of realizing on stocks of goods on hand without large losses have compelled many concerns to post pone their payments. The continued borrowing that this causes is costly on account of the high rates for money. Commercial paper remains firm at 8 per cent for the best names and higher rates are quoted for other firms which are not so well known. RETAIL TRADE Sales still ahead o f last year The continuance of the warm weather during the past month has had an appreciable effect on retail trade, in that it has delayed the fall buying season. This has resulted in a hesitancy on the part of the public to make purchases, and buying as a general thing is being restricted to immediate needs only. As a whole, retail business may be said to be good, with sales showing an increase as compared to this time last year. Prices are distinctly on a downward movement. Collections in the retail trade in contrast with all the textile industries are exceptionally good, with charge accounts being met very promptly. 2 The outlook as a whole is good, and retailers are looking for a fairly large volume of business during the balance of this year and the first quarter of 1921. 1 . . R E T A IL T R A D E O F D E P A R T M E N T ST O R E S For the month o f September, 1920 Per cent increase or decrease Entire Outside o f In District Philadelphia Philadelphia Net sales For month named compared to same month, 1919............ For period July 1 to end of month named, compared to same period last year........ + 10.5 N OTE + 15.1 + 16.9 + 23.1 + 19.5 + 17.6 - f 8.8 + 25.0 + 7.6 + 20.5 + 8.3 375.1 2 Stocks at end of month named : Compared to same month, 1919.................... Compared to previous m o n th ....................... 3. Ratio of average stocks at end of each month for period from July 1 to date, to average monthly sales for same p e rio d ..................... 4. Ratio o f outstanding orders at end o f month named, to total purchases during year 1919 + 21.4 583.6 454.2 1 2 .0 * 7.6 1 0 .1 * Percentages for item 4 corrected since issuance o f advance report. AGRICULTURE The past month has been favorable for the maturing of crops and considerable seeding of winter grains has been done. There has been considerable damage done to unharvested cranberries by early frost, running as high as 25 per cent on individual bogs. The condition of the crop on October 1 was 61 per cent of normal, indicating a production of 120,000 barrels compared with 156,000 barrels last year. The Massachusetts crop is estimated at 291,000 barrels and the Wisconsin crop at 38,000 barrels. The following table will show the condition of crops and yields for the states of Delaware, New Jersey and Pennsylvania: PE N N SY LV A N IA LAST Y EAR O C T O B E R 1, 1920 Crop Estimated condition (per cent) Spring wheat Corn .. . Oats... . Buckwheat... Potatoes... Sweet potatoes Apples......... Pears. 91 92 93 84 85 90 95 92 Estimated yield per acre 16 bu. 44.2 “ 39 “ 20.6 “ 100.3 “ 118.8 “ Estimated total production 368,000 bu. 64,429,000 “ 44,967,000 “ 5,171,000 “ 24,172,000 “ 119,000 “ 22,515,000 “ 661,000 “ 3 PAST TEN YEARS Final production Average production 390,000 bu. 72,192,000 “ 36,859,000 “ 5,530,000 “ 25,400,000 “ 138,000 “ 7,972,000 “ 355,000 “ 61,115,000 bu. 37,898,000 “ 5,640,000 “ 23,580,000 “ NEW JERSEY O C T O B E R 1, 1920 Crop Estimated condition (per cent) Corn.............. Oats................ Buckwheat... Potatoes........ Sweet potatoes A pp les.......... Pears............ 93 87 84 94 96 93 82 Estimated yield per acre 43.7 bu. 32 “ 21 “ 136.3 “ 142 “ ... ... LAST Y E A R Estimated total production 11,187,000 bu. 2,464,000 “ 210,000 “ 14,534,000 “ 1,988,000 “ 3,627,000 “ 827,000 “ TEN YEARS Final production Average production 10,800,000bu. 2,461,000 “ 197,000 “ 10,550,000 “ 1,750,000 “ 2,313,000 “ 500,000 “ 10,603,000 bu. 2,327,000 “ 252,000 “ 9,903,000 “ 2,627,000 “ 2,241,000 “ 605,000 “ D E LA W A R E C om .............. O a ts.............. Buckwheat... P ota toes___ Sweet potatoes Apples.......... Pears............ 96 90 85 88 87 81 75 8,646,000bu. 165,000 “ 117,000 “ 1,056,000 “ 889,000 “ 1,013,000 “ 285,000 “ 6,900,000 bu. 115,000 “ 108,000 “ 913,000 “ 966,000 “ 750,000 “ 200,000 “ It is interesting to note that in a great many rural com munities, the matter of collective buying has been given some consideration. Commodities which are usually bought in carload lots, through the activity of local granges and cooperative soci eties are coal, grain, and fertilizers. By purchasing in this manner, the farmer gets the benefit of the lower market price. Cooperative selling, however, has not as yet been developed to any great extent. The only products being handled in this way at the present time, to any extent, are sweet potatoes, toma toes, cranberries and fruit, all of which are represented by an association. The monetary return farmers are getting for their crops at this time are not satisfactory, as the crops were produced during the time of high price levels and are now being marketed when prices have dropped. It is because of this fact that more of our rural population is drifting to the cities each year, as the cash returns do not warrant the farmers paying the wages by which they can compete with industrial concerns for labor. Farmers as a class are in a receptive attitude toward laborsaving machinery and many of them are working with tractors, power sprayers, seeding machines, gasoline machines, etc., as they look toward the new machinery to help overcome the labor problem. 4 It is gratifying to note that most of the banks are cooperating with the farmers. One bank has fostered the Corn Show, another is purchasing a carload of pure-bred cattle and still others have helped farmers’ exhibits by offering prizes. Another bank states that they would rather loan money to the farmers than to send it away from the county at a higher rate of interest. COAL Bituminous production increases Production of bituminous coal in the United States during September totalled 49,205,000 net tons, the largest month’s produc tion since October 1919. For the first 240 working days of this year the output was 416,206,000 net tons, as compared to 364,682,000 tons in 1919 and 461,524,000 in the same period of 1918. The demand for spot coal continues and some buyers are in sore straits for additional supplies. The complaint generally is that while they have notices of shipments from the mines, the railroads are often two weeks in making deliveries. While it is true that the car supply and transportation conditions have im proved, yet a large percentage of available equipment is assigned under mandatory orders of the Interstate Commerce Commission for fuel for public utilities, public institutions, and steam rail roads, all having priority over all commercial users. Prices are still high, but have eased off during the past few weeks. Highest grade coals are selling at about $11 to $12 and lower grades at $8.50 to $9 per ton f.o.b cars at the mines. The export trade, however, is developing added strength and the amount of tonnage consigned to the local piers comes close to being the heaviest on record. Probably the bulk of this business is on the high-volatile coals. On the best Pennsylvania gas grades the prices have been $11 and $11.50 per net ton at mines. The Fairmount coals have kept close behind with the bulk of the sales at $10.75. The supply of labor is becoming considerably easier, due to the fact that there is quite an influx of men into the mining regions coming from the large industrial centers where they have been receiving high wages for the past four or five years. It is also interesting to note that this flourishing condition in the min ing sections is being favorably reflected in the increase of bank deposits in those districts. 5 Anthracite miners return to work The anthracite mines are now nearly at a normal rate of production, the last of the striking miners at Pittston having returned to work on October 8. Every effort is now being made to increase production and make up the deficiency growing out of, first, the outlaw switchmen’s strike in the early part of the year, and second, by the “vacation” idleness of the miners in Sep tember. The deficiency itself is not large and if the present rate of production can be maintained, it is believed that there will not be a serious inconvenience on account of a shortage of fuel this winter, provided ordinary temperatures prevail. Car supply and transportation are in good shape and distribution is being made as equably as possible. The high prices still maintained have caused small con sumers in many instances to take fewer tons at a time. It is reported that some independent operators are getting as high as $14 and $15 a ton at the mines, for prepared sizes. Barley is the only slow size in anthracite, all of the others, especially domestic sizes being urgently sought after. IRON AND STEEL Decrease in current demand Although the past month has shown a decided improvement in the movement of iron and steel products the same improvement is not reflected in the industry as a whole. While many firms have not experienced any shortage of cars and some have been able to move their entire stocks there are still many who are having some trouble with their transportation problems. Many requests for delay in shipment have been granted and cancellations are re ported to be numerous wherever there has been an excuse. The demand for iron and steel products has undergone a rapid decline and we are informed that orders placed recently have been for comparatively small amounts. The unfilled orders on the books of the United States Steel Corporation on September 30 were 10,374,804 tons. Compared with August 31, there is a decline of 430,234 tons as against a decline in the previous month of 313,430 tons which was the first month to show a decrease since May, 1919. Production continues at a very high rate on back orders. Uncertainty as to future prices is the most disturbing factor in the industry today. Consumers have reacted to the general feeling that there would be a weakening in prices and have 6 shown little or no interest in quotations. That there is some rea son for the waiting attitude of consumers is evidenced by the fact that certain grades of pig iron declined in price during the week ending October 21, the decline in No. 2X Pennsylvania being from $53.51 to $51.54 per ton. Coke prices also decreased during the week. The pig iron market has been in rather chaotic con dition for the past several weeks and reselling has dominated the market with few sales at the furnaces. The average daily produc tion of pig iron during September was 104,310 tons, which is the largest since March of this year. A manufacturer of steel forgings gives over-expansion as one of the principal causes of present idleness: “ There are, in round numbers, fifty-six forge plants east of the Mississippi which increased their capacity during war time over 500 per cent. For the past year, the forgings purchased have represented about 15 per cent of a normal pre-war year.” Though such conditions would usually lead to pessimism, that feeling does not predomi nate, as this producer points to saner business and working con ditions as the guiding posts in the future. Our reports would indicate that the steel casting business is now operating at about sixty per cent of capacity. In this phase of industry there is little expectancy that there will be any material improvement for some time; at least not until the rail roads begin to place orders which in normal times constitute the major portion of their output. The decreased operations of the automobile people have had an adverse effect on this line also. Difficulties in making deliveries and high costs have resulted in a material decrease in the demand for steel shapes and a promi nent manufacturer sees nothing in sight to improve the situation for the balance of this year and the early part of next. Prices are weakening. Producers of plumbing supplies report that while the demand for their product during the first nine months of this year was very large, this demand has fallen off very much during the past month and that they do not look for a resumption to any extent until after the first of the year. Although the building contracts let for the first nine months of this year exceed by approximately 20 per cent those of the same period of last year the architects and engineers report little immediate work in hand and that every office has had returned to it large numbers of blue prints that have been put out and returned on account of high prices and a general expectancy of a lower price level being reached before long. 7 While there is still considerable activity in both basic and finished products and many concerns have orders sufficient to run them until after the first of the year, there are others that state that unless healthy buying begins shortly there will be many producers who will be forced to cease operations entirely instead of operating on a reduced schedule as they are at present. Cancellations on the part of automobile manufacturers have also contributed to the unrest which prevails in the industry. Manufacturers af alloy and tool steels are especially affected. In some instances demands for revisions of contracts have been complied with but in the main the producers are insisting upon the completion of the contracts. The opinion of one of the large manufacturers of supplies for the automobile industry is that in his judgment the situation now confronting the industry is nothing new as they passed through similar situations at least twice during the last sixteen years but possibly this is the worst one which they have been obliged to face. This situation has been brought about very largely by increased production of cer tain types of cars, for which there is no possible outlet, which finally reacted in a curtailment of credit. Mining machinery and power transmission apparatus is still in very fair demand, but pumping machinery and engines are in smaller request. In no phase of the iron and steel industry has there been any activity in new business although in some instances a lowering of prices has been made. Even the lowering of prices has failed to produce orders in quantity. What prices will do in the future depends largely upon the trend of raw materials. AUTOMOBILES Prices o f many cars lower The past month has experienced a marked reduction in the price of many kinds of passenger cars. These reductions have varied from $140.00 to $1,350.00. From many sources comes the contention that this reduction is due to over-production and tight credit conditions and as a result, forced liquidation on the part of the manufacturers. The manufacturers maintain that it is their duty to liquidate and reduce prices and that their liquida tion is being done at a net loss at the expense of better business tomorrow. Reductions in the medium priced cars is accompanied by a marked hesitancy in the purchasing of the higher priced cars on which no reduction has been announced. To meet this 8 situation the manufacturers of the latter type have made guar antees to the effect that if a reduction is made it will be retro active for a certain period, or that there will be no reduction for a definite period. We are told that within the past few days as a result of these guarantees and reductions there has been a marked increase of inquiries and purchases. BUILDING MATERIALS Little demand fo r lumber The demand for lumber has fallen off steadily in the past few months and sales at the present time are almost at the point of stagnation. Building costs are so high that no one seems to care to build under the very difficult existing conditions, fearlng a property depreciation after the work is completed. The price tendency is distinctly downward, reductions rang ing from 10 to 30 per cent below the peak prices of this year. Lumber prices, however, are generally about 100 per cent above the low levels of 1915. There is a marked improvement in the transportation situa tion, and shippers at both ends are doing everything possible to ex pedite the loading and unloading of cars. The car supply is also more adequate. The railroads are moving lumber much more rapidly than they have been for a long time. Collections on the whole are slow, but are considered fairly satisfactory in view of the difficulty of securing mortgage money and the tightness of the money market in general. Active demand fo r cement The demand for cement is and has been of such proportions that manufacturers are unable to produce in sufficient quantities to meet the situation, except in certain instances where plants catered to specific types of customers. The capacities of the various plants probably would have been adequate under normal conditions, but the difficulty in securing sufficient coal, trans portation difficulties, and the scarcity of efficient help have hampered this industry to a very large extent. Stocks are said to be low in plants all over the country. This combination of influences has been instrumental in maintaining the present high prices, which have been almost sta tionary since last spring. The present figures represent an in crease of slightly more than 100 per cent over pre-war prices. The greatest factor with reference to cement has been the ad 9 vanced price of coal. As an illustration, one concern for the past 17 years was able to purchase coal, that is—screenings from threequarter high volatile coal which is practically a waste product in normal times, at an average of 75 cents per gross ton at the mines. Under normal conditions, at a delivered price of $2.70 a long ton, the cost of the coal used in manufacturing a barrel of cement was 20 cents. The average cost of coal this year is about $14.50 per short ton, delivered, or $1.12 per barrel. It can be readily seen that coal is costing on an average of 92 cents per barrel more than it did in pre-war times. With the exception of a tendency to ask for extensions on maturing trade acceptances, in some cases, the status of collec tions may be regarded as satisfactory. Orders fo r hardware mainly fo r current needs The current demand for hardware has declined noticeably during the past few months with the exception of some heavy lines. While present orders are small and for immediate needs only, manufacturers are, for the most part, running at full capacity where raw materials are available in sufficient quantity. The loosening of transportation has been of material assistance in enabling manufacturers to meet the demand. While some manufacturers are quoting advances or decreases on their goods, due to special conditions applying to them, the majority report stationary prices. W H OLESALE H A R D W A R E TR AD E . Per cent increase or decrease 1. Net sales (selling price) during month a. As compared to previous m onth............................ b. As compared to same month last y e a r or pt‘ ' — .4 -(- 22.4 2. Accounts outstanding at end o f month (selling price) a. As compared to previous month ........................... b . As compared to same month last year. + 3.1 + 27.9 3. Ratio o f accounts outstanding at end o f month to net sales during m o n th ....................................................... 151.9 Paints in actire request The paint industry is enjoying a steady demand for the most part and there are few reports indicating any falling off in orders at this time. Manufacturers are able to meet the demand. Plants are being operated generally 80 to 100 per cent of capacity. While a few lines show decreases in prices, the 10 majority are stationary at levels much in excess of pre-war times. The raw material supply is considerably improved so far as ability to get a sufficient amount is concerned. Prices as a whole are holding their own with the exception of linseed oil which has decreased in price. This, however, is counterbalanced by an increase in the price of pigments. New business quiet in pottery industry The pottery industry at this time is being governed by di verse factors such as diminution of demand, scarcity of skilled labor, shortage of fuel, and the financial situation. The demand for sanitary pottery, porcelain, and specialties has fallen off appreciably during the last three months, largely due to the curtailment in building operations, although some of the local potteries are operating to practically 90 per cent of capacity. This is accounted for by the fact that work is being completed on back orders. Prices have practically remained stationary for some time, but still represent an increase of about 100 per cent over those prevailing before the war. The raw material supply for the most part is steadily im proving, which is attributed chiefly to the improvement in the transportation situation. Skilled labor is scarce and demanding a heavy increase in wages, while on the other hand, unskilled labor is more plentiful than has been the case since the termina tion of the war. However, at the recent conference of pottery men held at Atlantic City during the week of October 13, an agreement was entered into between the manufacturers and em ployees for a period of two years, granting an increase of 5 per cent. Collections are not as good as they were three months ago, but on the whole are fairly satisfactory. COTTON bow demand fo r cotton goods and yarns Business throughout the entire cotton industry is virtually at a standstill. No orders are being placed except where it is absolutely necessary in order to have goods on the shelves. No surplus stocks are being bought, nor are the ordinary needs of the near future being anticipated. Manufacturers of cotton goods and yarn spinners are therefore unable to enter the raw material markets, with the result that the industry is deadlocked. 11 Below is given a chart which shows the consumption of raw cotton in the United States by months: C O T T O N C O N S U M P T IO N IN T H E U N IT E D S T A T E S While curtailment of production has been general, many con cerns are still operating, with the result that cotton yarns and cotton goods are rapidly accumulating and will continue to pile up more rapidly now that orders which were booked months ago and were not cancelled have practically all been filled. This complete apathy continues in the face of repeated price declines. The quotations for cotton goods are generally 40 to 50 per cent below the high levels of early 1920, and for yarns 50 to 60 per cent under the peak, but are about double pre-war figures. Manufacturers of heavy cotton fabric are also feeling the effects of the slump in demand, and are quoting prices at a 30 per cent reduction. While no general reduction in wages has been announced and none is expected at this time, it is reported that the employees of a number of mills, facing complete shutdown, have voluntarily accepted a cut of 10 to 15 per cent in order to make it possible for operations to continue. Collection conditions are particularly disconcerting, for the failure to meet bills promptly has made it necessary for manu facturers to secure additional credit extensions in order to con duct their business. The transportation situation shows considerable improve ment, and the congestion of freight and delays in transit have been greatly reduced. 12 WOOL Cancellations in the woolen cloth industry When, during the second week of September, the American Woolen Company announced its prices for spring, 1921, a large volume of business in the woolen and worsted cloth industry was looked for. This has failed to materialize, however, for the 25 per cent reduction was not sufficient to create any consider able interest on the part of clothing manufacturers. As a result many cloth weavers made further concessions, but these also failed to stimulate buying. Reports received by this bank from a large number of corres pondents indicate that so little interest is being manifested in woolen cloth that the volume of business has caused concern. One large manufacturer writes: “ The demand for our product is momentarily at a standstill, due to a violent drop in prices of raw material, the demoralization in the markets for all wool products, and to wholesale cancellations on an unprecedented scale.” The chart given below shows consumption of wool in this country since the beginning of 1919 up to the end of August, 1920: W O O L C O N S U M P T IO N B Y M A N U F A C T U R E R S Prices have been trending lower and lower, and buyers are holding off in the expectation of further declines. Manufac turers, however, feel that these are not warranted by conditions, for although the prices of raw materials have receded, other ele ments entering into production have not decreased, some having even advanced. 13 Lower demand fo r woolen yams Woolen yarn spinners are receiving practically no orders for their product and although the months of September and October are usually the busiest, demand has become almost nil. Raw material is in ample supply and is trending to lower price levels, which correspond in general with the price trends of the finished yarns. The prices of woolen yarn have diminished greatly, being from 35 to 50 per cent lower than peak prices of 1920, but are still double those of 1914. One manufacturer cites the advances in yarns as follows: “ On 1/40’s worsted yarn, which is used as a gauge point, the price in 1912 was from 85 to 90 cents per pound, in 1916 $1.30, in 1920 the peak price was $4.00 and the present price is $2.50.” Consistent with the lack of demand for yarns, mills are oper ating at a very low percentage of their total capacity, varying from 10 per cent to 80 per cent. Those operating at 80 per cent were busy filling back orders but anticipated shutting down en tirely upon the completion of these orders. One factory which is working at 30 per cent of its capacity, reports that from 30 to 40 per cent of this product is for stock. Collections are reported as slow, but more satisfactory than during the early spring. The transportation situation has cleared up, and although embargoes are again in force to some New Haven railroad points, conditions are greatly improved. W o o l market dull W ool dealers are experiencing the dullest period in their history. There is, in effect, no basis for prices of wool as there is practically no market. Offers below market quotations do not even tempt buyers, who are holding off in the expectation of further declines and the few orders being placed are for sample lots. England, which usually takes over the greater part of Aus tralian wool, recently ceased purchasing, throwing the Australian product on the open market, and causing a plentiful supply of the higher grades. The market is also glutted with inferior grades of wool which have declined about 60 per cent, while the better grades have decreased about 50 per cent. Collections are said to be very poor, accounts in many in stances running over the due dates. This is attributed to can cellations which are becoming more numerous every day. 14 SILK Improvement in orders The recent decline in all the textile lines is given as the draw back to an immediate resumption of activity on a large scale, in that it is acting as a deterrent to a large buying movement. In spite of this, however, the demand shows considerable improve ment over last month, and while all the orders placed are small, a steady stream of these is reported. The better feeling in the silk trades has been caused by the apparent success of the action of the Japanese government in stabilizing raw silk prices. These are now fairly firm, and as a result a stop has been put to the slashing of the prices of manufactured goods. Quotations for these are now about 40 per cent below the highest point reached early this year. There are but few complaints from the manufacturing trades as to labor conditions and they may now be said to be satisfactory. The transportation situation is much improved and is causing none of the serious embarrassments which were so common a few months ago. HOSIERY Conditions remain unchanged The hosiery market continues demoralized. The inability of manufacturers to determine upon a price level and to strictly adhere to such a level is reported as the main cause for this situation. During the past month prices have been continually revised, and as a result, jobbers and retailers refuse to enter the markets, in the expectation of further declines. These price changes have been made because of the recessions in yarn prices. Many manufacturers in need of immediate funds have been offer ing stocks at prices much under production costs, and this also has contributed greatly to the instability of hosiery prices. In some quarters, however, there is reported a fair volume of business for immediate needs. Reports of this nature are the great exception, and as a general thing, the hosiery trade in this district may be said to be at a standstill. As a result, the closing of plants is general and unemployment in the industry is pre valent. The employees of two reporting mills have offered to accept reduced wages in order that some operations, however limited, may continue. In mills which are still running the labor situation is wholly satisfactory and is better than at any time in the last few years. 15 i S Y N O P S IS Compiled as of October 22, 1920 OF BO ? M E SS Philadelphia Fed* S IT U A T IO N 1Reserve District - 1 ______________________________________________________________________________________________ Business Demand Ability to supply demand Prices 4 Raw material or merchandise situation Attitude o f labor Transportation Collections A U TO M O B ILE S Decreased Able •wer Improved Improved Improved CEMENT Strong Unable Ifm Improved Improved Improved CIGARS Good Able Ifm Good Improved Improved Good COAL, A N T H R A C IT E Strong Unable Ifm Fair Improved Good COAL, B IT U M IN O U S Strong Unable Fair Improved Good COTTON Y A R N S Very inactive Able : **er Good Improved Improved Poor COTTON GOODS Very inactive Able V er Good Improved Improved Poor G RO CER IES Fair Able Good Improved Fair HARDW ARE Decrease Able Improved Improved Improved Fair H O SIE RY Inactive Able 'bstable Good Improved Improved Slow IRON AN D ST E E L Decrease Able Qstable _______ Improved Improved Improved Slow LEATHER Very inactive Able ,^wer Good Improved Improved Poor LUM BER Decrease Able ■*wer Improved Improved Slow P A IN T S Good Able •^tionary --- Improved Improved Good POTTERY Decrease Able ^tionary — "v Improved Improved Fair R E T A IL T R A D E Good Able Improved Good SHOES Inactive eaker Fair Slow ‘ ^ghtly lower Good Able *“ 0wer Good Improved Improved Slow Good Improved Improved Fair SILK GOODS Inactive Able : ttm at low UNDERW EAR Inactive Able '^stable Good Improved Improved Slow W OOLEN YARNS Inactive Able ^ w er Good Improved Improved Slow W O O L E N CLO TH S Inactive Able "iwer Good Improved Improved Slow 16 17 Due to the refusal of jobbers at this time to make any com mitments, there is much discussion among manufacturers with a view to the elimination of the middlemen and the marketing of hosiery directly to the retailer. While this has not yet taken the form of a definite movement, the plan is being earnestly ad vocated in mill circles. OPERATIONS IN THE HOSIERY INDUSTRY F or firms selling to the wholesale trade Per cent increase or decrease for July, 1920 A u g. 1920 Sept. 1920 1. Product manufactured during month (sell ing price) As compared to previous m o n th ............ As compared to same month, 1919........ — 36.2 — 17.5 2. Finished product on hand at end o f month (selling price) As compared to previous m o n th ............ As compared to same month, 1919........ — 33.3 — 43.0 — 58.9 + 137.7 -f 4.5 - f 174.1 — 3.6 + 150.9 3. Raw materials on hand at end of month (cost price) As compared to previous m on th ............ As compared to same month, 1919........ — 5.0 - f 84.5 + + 1.2 91.4 — 5.6 + 49.0 4. Unfilled orders on hand at end of month (selling price) As compared to previous m on th ............ As compared to same month, 1919........ — 17.6 — 35.2 — 13.4 — 61.9 — 22.4 — 71.6 — 49.8 -j 6.4 4- 15.3 23.6 f + 5.1 19.8 — 14.1 4 - 43.5 4- 13.2 63.9 — 3.5 62.3 7.3 + 6.2 — 22.2 F or firms selling to the retail trade 1. Product manufactured during month (sell ing price) As compared to previous m o n th ............ As compared to same month, 1919........ Finished product on hand at end of month (selling price) As compared to previous m o n th ............ As compared to same month, 1919........ 3. Raw materials on hand at end o f month (cost price) As compared to previous m o n th ............ As compared to same month, 1919........ Unfilled orders on hand at end of month (selling price) As compared to previous m o n th ............ As compared to same month, 1919........ 4- 4- 4 - 130.2 4.6 * 160.2 — 29.4 _l_ 76.6 — 10.9 — 82.2 — 13.6 — 87.7 — 38.4 4- UNDERWEAR Buyers stilt disinclined to operate fo r future requirements The general announcement of spring, 1921, underwear prices which was looked for the latter part of September or early Octo ber has not been made, with the result that the stabilization of the market, which it was hoped such an announcement would pro 18 duce, has not come. On the contrary, further instability has been caused by manufacturers here and there having made quo tations, and these are so far out of line that jobbers are less inter ested in the market than ever. No orders for future delivery are being booked and the hand-to-mouth business is very small. As is the case in the hosiery industry, an agreement as to mill prices among manufacturers is necessary before a buying movement can be expected. As a result of the lack of orders, mills are either shut down or running at very reduced capacity, and there is much likeli hood, manufacturers say, that a scarcity in many lines may result next spring, for unless operations are soon resumed, it will be impossible to produce the needed supplies. The manufacturing situation is greatly improved with raw material supplies adequate, transportation no longer furnishing a problem, and the labor supply plentiful and more efficient. Col lection conditions are very poor and the request for extension of due dates is general. The outlook is very uncertain, depend ing in large measure upon the stabilization of yarn quotations and the agreement of manufacturers upon prices. O P E R A T IO N S IN T H E U N D E R W E A R IN D U S T R Y Per cent increase or decrease for July, 1920 A ug. 1920 Sept. 1920 1. Product manufactured during month named a. As compared to previous m o n th .................... b. As compared to same month last year.......... — 16.9 — 13.0 + 4.9 — 11.1 — 27.5 — 33.2 2. Finished product on hand at end o f month named a. As compared to previous m onth...................... b. As compared to same month last year.......... + 46.6 + 27.0 + 279.1 + 24.2 + 70.8 3. Raw materials on hand at end o f month named a. As compared to previous m o n th .................... b. As compared to same month last y e a r .......... — 15.6 _ — 8.8 + 38.9 + 4. Orders booked during month named — 60.0 b. As compared to same month last y ea r........ 5. Unfilled orders on hand at end o f month named a. As compared to previous m onth.................... b. As compared to same month last y ear........ — 23.4 3.0 38.7 — _ 63.9 99.8 53.9* — 51.2 *N O TE —Corrected since last report. CARPETS AND RUGS Current orders very small “ Watchful waiting” seems to characterize the attitude of buyers in the carpet and rug markets. The exceedingly high prices, which prevailed during the past year, for carpets and 19 rugs, resulted in an unprecedented falling off in demand. There was a feeling among some manufacturers that the opening of the spring season, which takes place on October 1, should be deferred for a couple of months, when it was hoped conditions would be come more settled. This, however, was thought by others to be a poor policy and it was decided to hold the opening at the regular time, and to offer a guarantee against a drop in prices during the next five or six months. Even this guarantee failed to stimulate buying, and it is reported that practically no orders are being placed. The percentage of operations varies from 10 per cent of normal to full capacity. Those who report working at full capa city have been manufacturing for stock in the expectation of an increased demand. If this did not materialize they intend to shut down completely. Raw materials are plentiful, with noticeable reductions in wool and jute yarns. The prices of cotton yarns show the great est decline, while those of white fibre, or paper yarns, have been advanced. This falling off in the cost of raw materials is reflected in the manufactured articles by a drop of about 10 to 12 per cent from peak prices of 1920, but present prices are about double those of the pre-war period. Collections are not satisfactory. Many large houses are asking for extensions, and in most cases bills are allowed to run to maturity. Freight conditions show a marked improvement, but express and parcel post shipments continue to be much too long in transit. The high money rates and difficulty in obtaining loans are given as contributing causes of the depression in this industry, large houses always prompt in payment complaining of inability to obtain loans from banks. GROCERIES Readjustment on in grocery prices General conditions in the grocery trade during September show some improvement, with the business fast recovering from the setback brought on by the break in sugar. Buying was slightly better than in the preceding month, although it is still very con servative. There is an unwillingness to anticipate future needs and a tendency to purchase in moderate quantities not ahead of actual and pressing requirements. The natural consumptive de mand is the main support of the market. Prices on practically 20 everything are tending toward a further slight decline, although there is a feeling that the heaviest losses in certain food prod ucts have been weathered. No general drop has made its appear ance since the break in sugar, but decreases have occurred in the prices of individual articles from day to day. Sugar, flour, canned goods and prepared foods made from sugar and flour, have declined sharply. In some instances new packed goods, such as dried fruits, are held at prices higher, con siderably, than stock remaining of last year’s crop. With less stringent money conditions and cooler weather canned goods may show improvement. Grocery imports have increased stead ily, coffee leading with an increase of 35 per cent thus far this year, over 1919. This increase in supply is undoubtedly one of the causes for the decline which has taken place in that commodity. Rice has also suffered a serious decline, though at present the trade is dull with the export outlet virtually neglected for weeks. Tea conditions remain practically unchanged with the sellers un willing to make further concessions. Developments in the flour market have undermined confidence in prevailing prices. Buying is 3till conservative, although numerous export inquiries are being received from to time. Transportation conditions are good from points east, but poor from points west of Harrisburg. Even from Philadelphia to the interior points west the conditions are generally poor, but as a whole they are improving with the carriers seemingly anx ious for business and arranging for better and prompter service. W H OLESALE G R O C E RY T R A D E Per cent increase or decrease for A ug. 1920 Sept. 1920 1. Net sales (selling price) during month a. As compared to previous m onth..................................... b. As compared to same month, 1919................................. — 29.4 — 3.0 — 14.1 + 5.6 2. Accounts outstanding at end o f month (selling price) a. As compared to previous m onth..................................... b. As compared to same month, 19 1 9 ............................... — 48.8 + 7.8 -f* + 3. Ratio o f accounts outstanding at end o f month to net sales during m onth................................................................... .......... 2.6 9.2 88.1 LEATHER AND SHOES Shoe salesmen unable to book orders The difficulties which shoe salesmen are meeting in their efforts to book orders for next spring’s styles are causing con siderable anxiety in the industry. Manufacturers report very meagre returns from their men, and many have already been, or 21 shortly will be, called in from the road. There is no disposition on the part of jobbers and retailers to place orders in advance. Indeed, even the hand-to-mouth business is exceptionally small in volume. The lack of interest on the part of the retailer is generally felt to have been caused by the refusal of the consumer to take up stocks at any price. When fall shoes first made their appearance they were marked at prices on a par or very little below those of last fall. The failure to move their stocks caused the dealers to resort to numerous sales. But the continuance of the warm weather, and the determination of the public to refrain from buying until prices conform with their ideas on the subject, have caused the reduction sales to fail of the expected results. The retailer, therefore, is placing no orders, and will not, it is said, until a buying movement on the part of the public develops. One manufacturer explains the present lack of demand from the supply standpoint and puts as much stress for this situation upon the manufacturer as upon the retailer. When prices were exceptionally high, he says, manufacturers in their eagerness to do all the business possible oversold their plant capacity to the extent of four or five months. The retailers, fearing advanc ing prices, plunged in and bought far in excess of their needs. When the break in the market came manufacturers were months behind in their orders, and the retail merchant, already heavily stocked, was forced to cancel. Manufacturers, however, were compelled to continue operations on the partly finished goods, and when these were completed, made big concessions in order to dispose of them. The heavy stocks which retailers therefore had and the cessation of buying on the part of the public seems to show, he says, that retailers are overstocked and for this reason are placing no orders. It is the general opinion that no large orders for spring goods will be placed before the end of Jan uary or early February. That the fall season of course is lost irretrievably is expressed by many manufacturers. From the producing standpoint, conditions are entirely satis factory; the labor situation continues to improve, transportation is better, and the raw material supply is sufficient for all require ments and trending lower in price. As a result of this decline in basic materials, the prices for the finished shoe are being variously quoted at from 30 to 50 per cent below the high level of the early part of this year, but are still considerably in excess of pre-war prices and must remain at present prices, it is said, unless wages are reduced. 22 Leather industry reflects lack o f demand fo r shoes As a result of the almost total absence of activity in the shoe manufacturing industry, conditions in the leather trade are cha otic. Tanners report an absence of demand for their product, which, following the increasing lack of interest of the last few months, is now at its lowest ebb. Both sales of finished stock for immediate use and orders for future delivery are decreasing and all concessions in prices fail to stimulate the trade. The prices generally quoted are from 50 to 70 per cent below the peak prices of the business boom of early 1920, but are approximately double the figures of 1914. A manufacturer by shopping about, however, is able to secure leather at practically his own price. The causes to which tanners attribute present conditions are numerous and include the stringent money conditions, the for eign exchange situation, the inevitable reaction from the high prices caused by war conditions, newspaper propaganda against high prices, the work of the Department of Justice and fair price commissions, the refusal of retailers to share in the loss of man ufacturers, and the exceedingly large supply of hides and skins. One manufacturer traces this large volume of skins to the high price of cereals. The farmers, he says, have found it unprofit able to raise every calf into a larger animal and have therefore slaughtered more calves than would have been the case under more normal food prices. Stocks o f hides heavy A plethoric condition exists in the hide markets, and with the absence of demand on the part of tanners the situation may be said to be even worse than in the manufacturing lines. Prices have continually fallen and in some instances are very close to those of 1914. No turn for the better is looked for in hide circles until the manufacturing of shoes and other leather articles is resumed on a large scale. TOBACCO Tobacco, while it may be regarded as a luxury, is holding its own in the face of declining prices in other commodities. The volume of sales does not show much increase, but the balance between demand and ability to supply is well maintained. Cigar factories on the whole are working close to capacity. There has been a wonderful crop harvested this year as re ported by the United States Department of Agriculture. The 23 condition of the tobacco crop in Pennsylvania on October 1 was 97 per cent of normal, indicating a yield of 1,552 pounds per acre and a production of 59,131,000 pounds as compared with 54,500,000 pounds last year, and an average production for the past ten years of 55,704,000 pounds. Cigar manufacturers are not experiencing much difficulty in securing domestic tobacco at prices which prevailed last year. On the other hand, imported goods, such as Sumatra wrappers, Havana fillers, as well as Porto Rico tobacco, show a hardening tendency. Our exports of cigarettes in June were 1,718,026,000, a gain of 9.3 per cent over June, 1919, and for the 12 months ending June, 1920, exports amounted to 17,547,371,000, an increase of 28 per cent above the preceding twelve months. Cigars and cheroots exported in June were 4,325,000, a decrease of 47 per cent from June, 1919, and exports for the twelve month period were 66,874,000, a gain of 101 per cent over the preceding twelve months and 346 per cent over the corresponding period two years ago. Leaf tobacco exported in June amounted to 28,041,064 pounds, a de crease of 71 per cent compared with a year ago. For the twelve months ended with June, leaf tobacco exports totaled 632,773,620 pounds. Prices for the finished product are reported to be holding up remarkably well. The trade reports satisfactory collections, and that the. transportation situation has improved materially. It is stated also that jobbers are adopting a more conservative attitude in buying. FINANCIAL On October 15, the loans of the Federal reserve banks were $3,093,390,000, which compared with a peak of $3,101,361,000 on the preceding Friday and $2,805,818,000 on January 2. Bills dis counted, other than those secured by Government war obliga tions, have increased steadily since the beginning of 1920. In keeping with the increase in loans, Federal reserve note circula tion reached a record point of $3,353,271,000, on October 15, an in crease in the course of the month of over 60 millions and of over 350 millions since the beginning of the year. The reserve ratio declined slightly to 42.7 per cent. Loans of member banks in the Philadelphia Federal Reserve District also show an increase since the beginning of the year. The statements of 56 institutions which have reported to us on January 2 and October 15, show an increase of $22,155,000 in total 24 loans and investments, or 2.6 per cent. This is made up as fol lows: Loans secured by United States securities and United States securities owned decreased $70,413,000 during that period but all other loans and investments increased $92,568,000. Total deposits, including Government deposits, increased 1.3 per cent. Saving deposits in 24 savings institutions scattered through out the district gained slightly during September; the slow rate of increase is reflected by the table given below: Outside Philadelphia 1919........... .............$46,161,124 1920........... ............. 49,320,000 July, “ ........... ............. 49,575,000 August, “ ........... ............. 49,398,925 Septem ber, “ ........... ............. 49,407,882 O ctob er, “ ........... ............. 49,847,933 O ctob er, June, Philadelphia Grand Total $225,706,991 242,015,060 241,639,724 242,087,992 242,265,851 242,304,419 $271 868,265 291,335,060 291,214,724 291,486,917 291,673,733 292,152,352 A V E R A G E M O N T H L Y D E B ITS T O IN D IV ID U A L A C C O U N T Debits to individual account at the banks which are members of more than 150 clearing houses throughout the country averaged $8,426,000,000 weekly during the month of August. This average was the lowest of the year and during September it increased to $8,552,000,000, possibly due to large tax payments. Inasmuch as these debits are the totals of the charges to the accounts of indi viduals, firms, corporations and the United States Government, they are fairly accurate indicators of business volume if not dis turbed by large financial operations such as the payment of taxes. 25 C O M B IN E D S T A T E M E N T o f the Twelve Federal Reserve Banks ( 0 0 0 ’ » o m it t e d ) RESOURCES Oct. 15, 1920 Gold reserve...................... Legal tender, silver, etc.. $1,992,101 162,810 $1,973,127 160,018 $2,128,443 70,742 Total reserve............ $2,154,911 $2,133,145 $2,199,185 $1,202,593 1,306,610 321,605 $1,698,885 Bills bought in open market $1,192,810 1,581,060 319,520 Total bills on hand .. United States securities.. $3,093,390 328,586 $2,830,808 420,353 $2,464,665 296,598 Total earning assets $3,421,976 $3,251,161 $2,761,263 Bank prem ises.................. Uncollected item s............ 5% r e d e m p t i o n fund against Fed. res. bank n otes............................... All other resources.......... $15,766 998,488 $15,263 1,097,408 $13,336 1,162,167 12,158 6,951 12,024 4,660 12,331 13,530 Total resources........ $6,610,250 $6,513,661 $6,161,812 Oct. 15, 1920 Month ago Year ago Month ago Year ago Bills discounted: Secured by Governm ent war obligations.......................... All oth er................................... LIABILITIES Capital paid i n .................. Surplus............................... Government deposits . . . . Due to members—reserve account............................ Deferred availability items Other deposits, including foreign g o v e r n m e n t credits.............................. Total gross deposits.. Federal reserve notes in actual circulation.......... Federal reserve bank notes outstanding-—net liabilh y ................................... All other liabilities........... Total liabilities........ 422,842 342,938 $97,594 164,745 13,975 $97,366 164,745 135,178 $85,540 81,087 133,639 1,868,016 776,887 1,821,833 676,275 1,841,101 882,156 33,740 42,409 101,430 $2,692,618 $2,675,695 $2,958,326 $3,353,271 $3,289,681 $2,752,569 213,533 88,489 212,219 73,955 249,675 34,615 $6,610,250 $6,513,661 $6,161,812 26 RESOURCE AND LIABILITY ITEM S o f member banks in Philadelphia, Scranton, Camden and Wilmington At the close of business Oct. 15, 1920 Sept. 17, 1920 Jan. 2, 1919 | Inthousands of dollars—~ ~ | L i.e., ooo’s omitted. J U n ited States bonds to secu re c ir c u la t io n .. $11,347 $11,347 $11,097 O th er U n ited States bonds and n o t e s ......... 38,087 38,197 41,512 C ertificates o f indebtedness .......................... 26,701 20,834 60,581 $113,190 T o ta l U n ited States secu rities ow ned $76,135 $70,378 L oan s secu red by U n ited States S ecu rities 36,811 40,861 68,428 A ll oth er loans and investm ents .................. 777,848 777,961 678,237 T o ta l loans and investm ents ................. $890,794 $889,200 $859,855 R eserve w ith F ederal R eserve B a n k ........... 73,260 67,394 59,492 Cash in vault ......................................................... 17,123 19,012 21,027 N et dem and d eposits on w hich reserve is com pu ted .................................................. 693,119 694,606 668,657 T im e d eposits ....................................................... 39,435 39,012 22,651 G overnm ent d ep osits ....................................... 20,692 21,685 43,376 N um ber o f rep ortin g b a n k s............................ 59 59 56 CHARGES TO D EPO SITO R S’ A C C O U N T S other than banks’ or bankers’ , as reported by Clearing Houses Weeks ending Oct. 2 2 , 1 9 20 Sept. 2 4 , 1920 Oct. 2 4 , 1920 $3,612,000 A ltoon a ......................... $3,100,000 Chester .......................... 6,053,000 5,504,000 2,137,000 4,075,000 H arrisburg ................... J oh n stow n L an caster 4,733,000 P h iladelphia 6,580,000 ................ 3,404,000 6,367,000 6,235,000 354,138,000 .................... ...................... ........... 377,703,000 R eading ......................... 4,651,000 4,555,000 Scran ton ........................ 14,603,000 12,622,000 T ren ton ......................... 16,528,000 11,093,000 9,095,000 7,776,000 5,067,000 3,690,000 W ilk es-B a rre W illia m sp o rt 10,891,000 ............. 8,206,000 10,615,000 .............................. ............. 5,479,000 4,511,000 4,303,000 ........................ ............. $501,270,000 $439,189,000 $455,187,000 W ilm in g to n Y o rk ............. ............. T o ta ls ............... 27 IN D IC A T O R S Percentage increase or decrease com pared w ith Previous month % Federal Reserve Bank: Discounts and collateral loans.......... Reserve r a tio ....................................... 90-day discount rate........................... $172,050,000 51 6 % % 6 49 6 % %* %* 8 % 8 %* Commercial paper rate........................... — + — 1 % 4 % 107 % * — + 4 S'Afr* Previous month Year ago Bank clearings: In Philadelphia..................................... Elsewhere in district............................ $ 2 ,0 5 3 ,3 7 9 ,1 8 7 + 3 % 1 2 6 ,0 0 7 ,5 9 5 + 4 % Total clearings................................. $ 2 ,1 7 9 ,3 8 6 ,7 8 2 + 3 % + 11 % 7 fa $ 2 ,6 8 7 ,2 9 5 + 26 2 5 1 .8 1 7 $ 2 3 7 ,3 4 1 $ 1 6 .9 0 9 4 ^Actual figures. — $ 1 ,3 2 8 ,8 8 4 Latest commodity index figures: Annalist (food prices o n ly )................ Dun’s ..................................................... Bradstreet’s ........................................... 28 % % fa* Percentage Increase or decrease com pared w ith Sept., 1920 Building permits, Philadelphia............. Post office receipts, Philadelphia.......... Commercial failures in district (per Bradstreet’s ) ............................... 8 1 114 1 $744,987,000 717,706,000 104 O Philadelphia banks: L o a n s..................................................... D eposits................................................. Ratio o f loans to deposits.................. Year ago * Oct. 18, 1920 H - B U S IN E S S 31 — — — -f 7 °/ o 6 % 7 % — 49 + 21 % * % 28 6 .1 % — 2 .8 % + 0 .6 % 6 .2 % — 1 3 .4 % 1 0 .7 % * ON THE HORIZON Resources of all banking institutions in the United States totalled 53 billion dollars on June 30, 1920, according to a state ment of the Comptroller t>f the Currency. This figure is said to be in excess of the combined bank assets of all other leading nations of the world. Total loans and discounts were $30,891,000,000, an increase of $5,805,000,000 over June 30, 1919, and total deposits were $41,714,000,000, an increase of $4,045,000,000 in the same period. V In his annual report, President R. S. Hance, of the American Bankers’ Association, makes the following comments with regard to the Federal reserve system: “A review of the year just passed would be incomplete with out comment on the Federal reserve system and its activities. Regardless of whether we criticise details of operation, or agree in all rulings of the Board, we must admit that the Federal re serve system has proven its sound fundamental principles and rendered a service to the country for which all citizens should be grateful and bankers should realize and appreciate.” Professor Irving Fisher’s plan for stabilizing the dollar was condemned by the currency commission of the Association, after exhaustive investigation. In its resume for the year 1919, the National Automobile Chamber of Commerce cites the Farm Journal to the effect that of the 7,558,000 cars in use, 2,366,000 were farmer owned, or nearly one-third of the total registration. While motor vehicles increased 1,313,000 during the year, the total number of horses decreased from 21,555,000 to 21,482,000. 29 It requires five acres to feed a horse. The replacement of motor power for the remaining animal power would release for food purposes over 100,000,000 acres or nearly the total corn acreage in the United States.—" Facts and Figures of the Automobile In dustry” ¥ At the convention of the Atlantic Deeper Waterways Asso ciation much was said in favor of a deep canal at sea level across New Jersey. Mayor Donald, of Trenton, said in part: “ The time has come to join the Delaware with the Atlantic with a sea level canal across Jersey! One year after this New Jersey canal is completed it will carry more tonnage in one year than the Panama Canal in ten years. We did not hesitate in the case of the Panama cut. Why should we halt now with a great national proposition?” Lewis Nixon, of New York, said the railroads must stop an tagonizing waterway development because canals will supple ment rail service by taking from them much that they carry at a loss, only to be compensated by charging higher on other freight. Vessels of the United States Shipping Board carried 13,379,234 tons of export merchandise and 7,236,168 tons of imports dur ing the fiscal year ended June 30 last, according to a statement of Shipping Board activities. The cargo carried, the report states, constituted 30 per cent of the country’s export business and 27 per cent of the imports, the percentages being fixed on the return of the total foreign commerce of the United States for the fiscal year. The business of the Shipping Board was handled through forty-nine American ports, New York ranking first with 23.2 per cent of the exports and 36.6 per cent of the imports, or 27.9 per cent of the total business. Baltimore and Philadelphia ranked second, each with 10 per cent, and New Orleans third with 7.6 per cent. IS The official reports of the Comptroller’s office show that the huge issues of Liberty and Victory obligations issued since the outbreak of the war are being steadily absorbed and digested by in WORLD REO/STRAT/O A/ OF CARS PROPORTIONAL TO POPULATION '/'//St'//. m //. /> 7S//A //.'/'/ T o ta l M oto r -... / c a p 70 r v r p r G S . . 2IS S , ‘j'/' .J /, / . . • . v e h ic l e s - 6.750,000 at o r p o p u ia t / n o / u • • * * • • - - ' * * e/ -33-/23 • ses-eoo" c ap toev rp r • " • ’ - p oo - so o o r oopulat/ p o 3 0 0 -/0 0 0 ‘ /ooo -2000 m 2000-3000 ‘ 3000 ' ' OPM O Pf permanent investors and that the amount of these bonds, upon which money is being loaned by the banks is being constantly reduced. The amount of Liberty bonds owned by the national banks on June 30, 1920, was only $778,361,000, a reduction since Decem ber 31, 1919, of $64,811,000. The amount of Victory notes owned by the same institutions on June 30, 1920, was $249,615,000, a reduction of $54,574,000 since December 31, 1919. As the total resources of the national banks on June 30 last amounted to $22,196,000,000, we find that on the date named they had only three and one-half per cent of their total resources invested in Liberty bonds, and one per cent additional in Victory notes. 8 * ? America’s spurt in shipbuilding during the war has turned into a sharp decline, and at present England, which was 1,931,000 gross tons behind at the end of the first quarter of 1919, is shown to be 1,959,000 in the lead. These figures were made public in a statement from Lloyd’s Register of Shipping. On the present reduced scale of output the American yards show an increase of 1,097 per cent over the total under construction just prior to the war. Britain’s gain in the same period represents only 116 per cent over the production in the pre-war period. As the yard re ports showed on September 30, Britain has 3,731,000 gross tons building while the United States could report only 1,772,000. However, in certain angles of the construction business, this country holds a good lead. Returns made to Lloyd’s Register show that the United States is meeting the demand for tankers with a remarkable output. Briefly, the American shipbuilder is launching more than double the number of ships of this class under construction in Great Britain and the rest of the world together.—New York Sun. * 8? C O M P IL E D A S O F O C T O B E R 22, 1920 This business report 'will be sent regularly to any address upon request. 32