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Business and Financial
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W ITH SPECIAL REFERENCE TO THE

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September i, 1921
C O M P IL E D A S OF A U G U S T

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R ichard L. A ustin

FEDERAL RESERVE AGENT AND CHAIRMAN

FEDERAL RESERVE

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PHILADELPHIA

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TABLE OF CONTENTS
PAGE
NUMBER

Bankers’ acceptances............

PAGE
NUMBER

8 Hides and skins....................

Brick, building............. -.......

H osiery.................................

Building materials................

Iron and steel........................

Canned goods.......................

3 1 Leather .................................

Carpets and rugs..................

Lum ber.................................

Chemicals.............................

Office appliances..................

Coal, anthracite....................

Coal, bituminous..................

Paint...............v......................
Paper.....................................

Coke......................................

Paper boxes...........................

9 Plumbing supplies................

Commercial paper.—............

Cotton goods.......................

Produce...............

Cotton, raw...........................

Refractories...........................

Cotton, yarns........................

Retail trade...........................

Financial situation................

Rubber goods........................

F lo u r....................................

30 Savings deposits....................

Foreign exchange................

9 Shoes .....................................

Furniture ........
General summary................

S ilk ........................................

3 U nderwear...........................

Glass......................................

Wool goods..........................

Groceries, wholesale............

29 Wool, raw............................

Hardware .............................

Wool and worsted yarns. . . .

BUSINESS A N D F IN A N C IA L
CO N D ITIO N S
GENERAL SUMMARY
LTHOUGH much has been written in recent
k. months concerning the general improve
ment of business conditions, there was little
in the actual situation before the early part
of August to justify optimism. During June
and July, it is true, a fair volume of business was
transacted in the textile and leather and shoe lines,
but it was confined almost entirely to immediate
deliveries, and the orders received by the basic
industries were negligible. The past few weeks,
however, have witnessed some improvement in
conditions,— improvement very limited in scope
but nevertheless real.
The greatest betterment has occurred in the
textile markets, where, for the first time in many
months, fair sized orders for future delivery
were placed. Of the various textile lines in this
district, cotton made the best showing during
the month and is now the most active. The ex
port call for cotton goods, which was fair during
July, remains unchanged, but the domestic de
mand has increased to such proportions that
several mills are booked to capacity until next
April. Ginghams have been the most sought
for, but with a scarcity of these materials, con
siderable interest has been shown in percales
and other print cloth products, and prices of
all these goods have advanced slightly. Tire
fabrics and drills and twills used in the manu
facture of linings for shoes have also shared in
the increased business. Cotton yarns are in
better demand, but owing to the rather large
stocks that buyers have had on hand interest in
yarns is not so great as in cotton goods.
Activity in the wool industry also was greater
during the past month, and operations in cloth

mills have been increased. There has been little
re-ordering of goods for fall shipment and the
total of fall business is considerably below normal,
but the orders placed for goods for next spring
have been gratifying to the entire industry.
Following the openings by the American Woolen
Company, mills in this district showed their
spring samples, and the response was so satis
factory that several manufacturers have found
it necessary to withdraw certain of their lines.
Prices for spring goods are the same as those
quoted for fall materials, and this fact has en
gendered confidence in the stability of the mar
ket. Demand for yarns is also better, especially
for heather mixtures for the hosiery trade; but
orders for yarns are not being placed for ship
ment beyond 60 days. Reflecting improved con
ditions in the woolen cloth and yarn industries,
the demand for raw wool is also stronger, but it
is for immediate delivery only.
Orders placed for heavy weight underwear
during August were of fair size, and although the
total fall business thus far placed is much below
normal, the repeat orders already received and
the prospects for further duplicate orders have
improved the tone of the market. The official
showings of light weight underwear samples for
next spring were virtually ignored, but mills which
have resorted to strenuoussalesmethods have suc
ceeded in booking considerable business. Owing
to the continuation of the strike in Philadelphia
mills, manufacturers were unable to meet the
demand for full-fashioned hosiery, which was
very active during the month. Operations in
these mills have been steadily increasing since
many of the new workers whom manufacturers

BUSINESS

AND

FINANCIAL

S Y N O P S IS
C o m p ile d

as o f A u g u st 2 3 ,

u s in e s s

O F

B U S IN E S S

S IT U A T IO N

1921

em and

Brick.................................... Light
Canned goods..................... Improved

CONDITIONS

T h ir d

P r ic e s

R a w m a t e r ia l or
MERCHANDISE SITUATION

F ederal R eserve

C o l l e c t io n s

Slightly lower
Higher

Easily obtainable
Limited

Fair
Good

D is tr ic t

F in is h e d

stocks

Large
Large
Low—Wilton and
Brussels
Ample-other goods
Ample
Smaller

Carpets and rugs...............

Good

Lower

Firm

Good

Chemicals...........................
Cigars..................................
Coal, anthracite.................
Coal, bituminous...............
Coke....................................

Poor
Improved
Poor
Poor
Poor

Lower
Steady
Lower
Firm
Firm

Lower
Easily obtainable

Fair
Fair to good
Fair
Poor
Fair

Cotton goods......................

Stronger

Firm

Fair

Firm
Firm

Fair

Low—summer fab
rics
Ample—others
Ample

Fair

Sufficient

Steady
Steady
Lower

Easily obtainable
Easily obtainable
Lower

Fair to good
Fair
Fair

Sufficient
Sufficient
Small

Lower

Higher

Good

Ample

Firm
Firm

Good
Good

Limited
Limited

Lower

Fair

Low

Fair
Fair
Slightly
Furniture............................
improved
Glass.................................... Fair
Groceries............................. Fair
Hardware............................ Poor
Poor, but im
Hosiery, seamless, cotton. .
proving
Hosiery, seamless silk........ Strong
Hosiery, full-fashioned. . . . Strong
Poor, but
Iron and steel.....................
slightly better
Cotton yarns......................
Cotton, raw........................

Lower

Leather, upper...................

Good

Firm

Good

Leather, heavy...................
Leather, hides.....................
Leather, belting..................
Lumber...............................

Good
Fair
Poor
Fair

Firm

Good
Good
Fair
Fair

Office appliances.................

Improved

Paint...................................
Paper...................................
Paper boxes........................
Plumbing supplies..............

Shoes...................................
Silk......................................

Fair
Small
Improved
Fair
Tires—good
Mechanical
goods— poor
Good
Decreasing

Firm
Firm
Slightly lower
Steady
Some lines firm
Others lower
Lower
Slightly lower
Lower
Steady

Scarce in high
grades
Ample in other
grades
Sufficient
Sufficient
Large
Smaller

Tobacco...............................

Small

Lower

Underwear, heavy weight. .
Underwear, light weight.. .
Wool cloth..........................
Wool yarns.........................
Wool, raw...........................

Improved
Good
Good
Fair
Fair

Firm
Firm
Firm
Firm
Firm

Rubber................................

Easily obtainable

Fair

Sufficient

Easily obtainable
Easily obtainable
Easily obtainable
Easily obtainable

Fair
Poor to fair
Fair
Fair

Normal
Smaller
Normal
Sufficient

Lower

Firm

Fair

Ample

Firm
Firm

Firm
Slightly lower
Scarce in better grades
Plentiful in lower grades
Firm
Firm
Firm
Firm

Slow to fair
Good

Ample
Ample

Fair

Sufficient

Good
Good
Good
Fair

Ample
Ample
Ample
Ample
—

BUSINESS

AND

FINANCIAL

have been training in the use of the machines
are now able to handle them, but production is
not yet equal to the demand. Sales of seamless
and mock-fashioned silk lines have also in
creased, and the hosiery industry as a whole is
enjoying a fair volume of business. The strike
in the carpet and rug industry was settled during
the month, and as a result, operations were in
creased to meet the new business offered and to
replenish stocks that had been depleted during
the strike. Silk alone, of the textiles, has failed
to better its position since last month. The de
mand for hosiery and other silk knitting yarns is
very good, but with these exceptions business has
fallen off. Weaving yarns are in scant demand
but little business is offered for fall fabrics.
Conditions in the leather trades have also
improved. The export demand for glazed kid
fell off slightly, but this was more than counter
balanced by larger domestic orders. Sales of
calf, too, increased both in number and size.
Sole leathers were moved in fair quantities at
firm prices, and the demand for hides was good.
Large orders for fall shoes were placed during
the month, increased business being especially
in children’s shoes. Jobbers are now buying
more shoes for the fall season and conditions in
the industry as a whole are steadily improving.
Manufacturers of paper boxes report better
business and as a result, types of paper used in
box making are in good demand. Other papers,
however, are generally inactive. Improvement is
also noted in the tobacco industry. Cigars are
selling well, the demand for five-cent brands being
especially good. Agricultural conditions, too,
improved during the month, owing to the heavy
rains.
Of greater significance, perhaps, than the better
conditions in textiles, leather and shoes, and other
lines are recent developments in the iron and steel
industry. For months there was an almost total
absence of demand for these products, and oper
ations were at the lowest point, as compared
with capacity, in history. August, however, has
witnessed the placing of orders for sheet steel and
pig iron, the increase of production schedules in
plants that had continued to operate in face of
the lack of new orders, and the reopening of
some plants which had closed down. Especially

CONDITIONS

encouraging is the fact that railroads have
begun to buy iron and steel for repair purposes.
The increase in beehive coke production is
further indication of greater activity in iron and
steel in the Pittsburgh district. The total volume
of orders recently placed is very small, it is true,
but in view of the completely apathetic state of
the iron and steel markets during the past few
months, the increase in activity is of real impor
tance.
In contrast with those of most other industries
conditions in the coal business showed little
change during the month. Stove coal was in good
demand, but with this exception, sales of other
domestic sizes and of steam sizes of anthracite
were very small and, if anything, less than during
July. This declining demand is reflected in the
smaller differential between independent and
large company prices. The demand for bitu
minous coal is also very poor, but prices hold firm.
As a result of the better demand for most prod
ucts, operations in nearly all industries have
been increased and unemployment is dimin
ishing. The Pennsylvania State Department
of Labor estimated the number of unemployed
in the cities of Altoona, Harrisburg, Johnstown,
Philadelphia, Scranton and Williamsport, on
August 15, as 216,905, a decrease of 1.6 per cent
from the estimate of July 30. Reports received
from individual manufacturers since August 15
indicate a further reduction of unemployment.
Considerableemphasis has been placed in recent
weeks upon the rise of several of the wholesale
commodity index numbers as indicating a turn in
the so-called business cycle. The Bradstreet
number on August 1 was 11.0576, as compared
with 10.7284 on July 1 and 10.6169 on June T*
The Dun index on August 1 registered its first
increase since July 1, 1920, the number being
163,677. On July 1 of this year the Dun index
number was 159,833. The index number of the
Bureau of Labor Statistics showed no increase for
July, but it failed to recede further, the number
for both June and July being 148. Although
it is true that the increase in the Bradstreet
and Dun index numbers and the stabilization of
that of the Bureau of Labor Statistics are very
favorable signs, there is much speculation as to
whether prices have definitely turned upward

BUSINESS

AND

FINANCIAL

or have merely been temporarily halted in their
precipitous decline. In this connection, attention
is called to the accompanying chart, the figures
for which were obtained from a recent issue of the
Annalist, showing the trend of prices since 1810.
There is marked similarity between the periods
following the war of 1812, the Civil War, and the
recent war. In the price declines after each of
the first two conflicts, prices ceased to fall for a
short time and then resumed their downward
course for a number of years. Whether the price
trend in coming years will follow that of the
previous periods is a question which is occupying
much thought.

FIN AN CIAL SITUATION

RESUME of the important events of the
month in the business and financial world
points to the conclusion that business in general

CONDITIONS

is still going through the process of liquidation.
Loans and deposits of banks have decreased, and
their reserves have increased. As previously stated
the latest wholesale commodity price indices have
either remained stationary or shown a tendency to
rise; but the latest weekly food price index (Bradstreet’s) points to a renewed tendency downward.
The volume of business as measured by payments
through banks— debits to individual accounts—has undergone further contraction. Business
profits were again reduced. Stocks suffered re
newed pressure. Interest rates have averaged a
little lower, and bond prices moved somewhat
higher. The President has presented a definite
plan for aiding the railroads, whose earnings con
tinued to show encouraging gains over those ol
a year ago. Foreign trade has further declined.
Not much has been done toward arriving at a
final solution of the tariff problem, but Congress
has cut tax and expenditure estimates for next
year. Wages still continued downward. Specu

BUSINESS

AND

FINANCIAL

lation was at a low ebb and the spirit of enterprise
as measured by new incorporations and new issues
of capital became still more listless. The inflow
of gold from abroad is unabated. In Germany
expansion of the public debt and inflation of the
currency continue, accompanied by active specu
lation. The balance sheet of the Bank of England
shows renewed activity on the part of the borrow
ing public; while that of the Bank of France, after
reflecting a surge upward, coincident with the
lowering of the discount rate from 6 per cent to
5F2 per cent, again recorded a decline of notes,
loans and deposits. In Japan an announcement
was made to the effect that the past fiscal year
had been concluded with a large surplus, and as
Japan was the first nation to feel the effects of
the reaction from the big boom of 1919, this is
encouraging.
The best explanation of these events is that
business in general is still liquidating. On pages
18 and 19, is given a table of figures in further
support of this conclusion.
That this should be so is not to be wondered
at. The process of liquidation is the reverse,
broadly speaking, of the process of inflation.
What happened during the war and post-war
period is now an old story. The difference be
tween events then and now is that at present
they are moving in reverse order. The volume
of business has declined from the unprecedented
peak it had reached, prices have been following
suit, and likewise profits. Those who saw a
plentiful supply of money offered at low rates in
1915 and 1916 and saw an increasing demand
absorb it at higher and higher rates, are now
witnessing the reverse movement in the decline
of bank loans, bank deposits and interest rates.
Wages are falling each month, though other
costs, such as freight rates and rents, have not
yet come down substantially. The spirit of enter
prise and speculation, which was so active during
the boom period, is now dormant. In other
Words, the present trend is a natural and inevita
ble consequence of the preceding trend, and is
not an artificial thing brought about by the
manipulation of some group.
The process of liquidation has been going on
for some time, but there are still important in
dustries and areas of the country in which it is

CONDITIONS

not yet complete. The condition of the Federal
reserve banks depends upon the condition of
their member banks; the condition of their mem
ber banks depends upon the status of the com
munities they serve. Hence, the figures accu
rately reflecting the condition of the Federal
reserve banks, also reflect, indirectly but accu
rately, the condition of their respective districts.
Attention is directed, therefore, to the Federal
reserve bank ratio of reserves to liabilities. Since
March 12, 1920, when the lowest reserve ratio
for the entire system was recorded, the ratio of
the Federal Reserve Bank of Boston, calculated
as at present, has risen from 44.2 per cent to
76.6 per cent, a recovery of 32.4 points; that of
the New York bank has gone from 37.9 to 72.2,
a recovery of 34.3 points; the Philadelphia ratio
has advanced 24.0 points; the Cleveland ratio,
25.5 points; the Chicago ratio, 29.6 points; the
St. Louis ratio, 18.1 points; the Kansas City
ratio, 18.3 points; and the San Francisco ratio,
21.8 These figures show that in the areas indi
cated the liquidation has been considerable. But
in other districts business readjustment, as
measured by these ratios, has not progressed as
far. The ratio of the Richmond district has risen
5.3 points, and that of the Dallas district, .8 of
a point; while those of the Atlanta and Minne
apolis districts have declined respectively 5.1
points and 4.1 points. They seem to bear out
the common observation that liquidation is pro
ceeding very unevenly in the different sections
of the country. The first to feel its effects were
the industrial districts, and these are showing the
greatest progress toward its completion and
toward recovery. The farming districts, as these
ratios show, are laboring under a severe handi
cap, the existence of which nearly everybody
recognizes, and which apparently could not have
been avoided. The situation is one that cannot
be forced or handled impatiently. There is
abundant credit to take care of it, but past ex
perience has always shown that time is a neces
sary element as well as money.
Certain of the events of the past month de
serve special attention because of the influence
they may exercise one way or the other upon the
adjustment of important business factors that
are closely inter-related, namely, costs, profits,

BUSINESS

AND

FINANCIAL

prices of various materials, and the buying power
of great groups of consumers, (i) The proposal
to aid the railroads will, if carried out, restore to
some extent the purchasing power of a very im
portant group of consumers, and this should re
sult eventually in lower costs and improved
service. (2) The further reduction of wages in
the iron and steel industry is a most important
step toward the scaling down of costs of produc
tion. (3) Borrowers were benefited by lower
interest rates on securities and commercial paper.
The Federal Reserve Bank of Cleveland reduced
its discount rate from 6 per cent to 5J2 per cent,
the effect of which should be considerable in such
an important industrial district. (4) Judging by
reports as to collections, however, commercial
credits made no more than a nominal recovery
during the month. This credit situation is so
enmeshed with the general business situation
that it cannot show material improvement while
business remains as dull as it has been. Dun’s
and Bradstreet’s failure figures show that the
past month has been a period of severe testing.
(5) The small amount of business available is
making competition much keener than it has
been for a number of years, and business mana
gers realizing this are bending every effort to re
duce costs. Bankers also are preparing for greater
competition. (6) The falling off of foreign trade,
which shows how world wide the depression is,
has aggravated the depression existing in this
country. Improvement in the domestic situation
depends to a considerable extent upon its revival,
and its revival depends in part upon the foreign
trade policies pursued by our business men,
bankers and tariff makers.
Lastly, the government, as well as business,
has taken steps toward readjustment in fiscal
affairs. The director of the budget is striving
with some results to increase government ef
ficiency. Congress seems to have effected a real
reduction in expenditures and in taxes for the
coming year. And the President has called a
disarmament conference which may lead to the
cutting of appropriations for war purposes.
While some of these elements in the situation
are favorable, it should be remembered that any
influence they may have will in all likelihood be
felt more or less slowly. Hence, the safest inter

CONDITIONS

pretation of the events of the month is that liqui
dation is still continuing and that weak spots
are steadily being eliminated.
B ankers’

cceptances

During July another heavy decline in the
sales of bankers’ acceptances in this district was
reported by dealers. The sales of five dealers
totaled only $3,818,000 as against $6,355,000 in
June and $13,815,000 in May. The decrease in
sales as compared with June was 40 per cent. In
July, 1920, only four of these dealers were selling
in this district. The sales for July, 1921, as com
pared with 1920, show an increase of 67 per cent.
The continued falling off in our foreign trade has
been the leading cause in the diminution in sup
ply of bankers’ bills. In the early part of July
the demand was in excess of the supply, and this,
together with the ease in money, caused rates to
fall somewhat. Later in the month the demand
for bills fell off, and since then the supply in most
cases has been found adequate, and rates have
remained steady. Most of the acceptances issued
covered foreign transactions, the exports of grain
and cotton and the imports of sugar being the
largest items of this class. As usual, commer
cial banks are the principal buyers, but industrial
firms have bought a considerable amount. The
report of twelve member banks in this district
shows an increase in bills executed, but a de
crease in those outstanding, as compared with
the previous month. The reports of these banks
are summarized as follows:
Executed during Outstanding on
preceding month
date given

1921—March
April
May
June
July
August

10...........................
10...........................
10...........................
10...........................
10...........................
10...........................

35,325,000
4,558,000
5,611,000
2,795,000
3,121,000
4,852,031

314,127,000
13,234,000
12,892,000
10,798,000
9,286,000
8,756,973

Foreign transactions are responsible for the
great majority of acceptances issued by the
Philadelphia reporting banks. In addition to
sugar, grain and cotton, some of the articles
covered are hides and skins, oil, silk and tobacco.

BUSINESS

AND

FINANCIAL

CONDITIONS

Selling rates are at the present writing as
follows:

Eligible members’
bills......................
Eligible non-mem
bers’ bills.............

30 days

60 days

90 days

180 days

5 -5y i

5 -Syi

5 -lyk

5 -5 K

SX-S'A

5 ^ -5 X

C o m m e r c ia l

Syi-Syi

e p o s it s

People in this district continue to draw their
savings out of banks. This is the fifth con
secutive month that 24 savings banks in this
district have reported such a movement. The
fact that during these five months people not only
were unable to save, but actually drew upon
their past savings to the extent of $5,428,417,
or 1-V5 per cent, is not without significance.
Moreover, increased savings of $36,176 outside
Philadelphia in July, more than counterbalanced
hy a decrease of $1,452,848 in Philadelphia, show
that it is in this city that the greatest depression
is being felt.

1921—August
July
June
May
April
March
1920—August

1.
1.
1.
1.
1.
1.
1.

...
...
...
.. .
...
...
.. .

Outside
Philadelphia

2251,645,886
252,716,953
254,169,801
255,317,181
256,335,641
256,901,359
242,089,856

352,927,485
52,797,413
52,761,237
52,902,375
53,066,733
53,100,429
49,158,306

Totals

3304,573,371
305,514,366
306,931,038
308,219,556
309,402,374
310,001,788
291,248,162

FOREIGN EXCHANGE

Paper

The month of August is usually a dull period
in the commercial paper business and this year
has proved no exception to the usual condi
tion. Until the end of July there was a brisk
demand, lower rates were bringing in new names,
and this reduction caused institutions to buy
more freely, in anticipation of further declines.
In New York some extra choice paper sold as
low as 5^4 per cent, but in the Philadelphia dis
trict 6 per cent was the lowest price, and at this
rate many sales were made. The end of July
marked a considerable change in the situation.
Though paper continued to be offered in fair
volume, banks appeared to have lost all interest.
In this district, banking institutions in agricul
tural communities, such as Lancaster County in
Pennsylvania and portions of New Jersey, have
more money for investment than have those in
the coal and iron centers or the large cities.
Rates are from 6 to 6% per cent.
S a v in g s

In
Philadelphia

E R M A N Y ’S financial transactions in con
nection with reparations payments are again
cited as the chief reason for the erratic fluctua
tions of the foreign exchanges during August.
Sterling continued to lead the market, and inter
est has centered upon a sensational rise of 11
cents which carried this rate up from a closing
of $3.60 on August 6 to $3.71 on August 8.
Strength emanated from London as in previous
movements, and practically all the other Euro
pean rates moved up in sympathy with sterling.
That the market is extremely sensitive is evident
also from the fact that bankers have reported a
rather small volume of bills during the month.
Since August 11, however, most of the exchanges
have continued the usual seasonal decline, which
was interrupted by this unexpected rise. But
even so the present quotations are considerably
higher than they were on August 1, except in the
case of marks. These dropped heavily, being
quoted on August 16 at 1.05 cents, almost the
lowest price ever recorded, but subsequently
recovered most of this loss. Reparations pay
ments are held to be partly responsible for
this weakness, but another factor of importance
is the continuance of inflation in Germany. This
has been accompanied by heavy note expansion
and a rising price level, which have still further
depreciated the internal commodity purchasing
value of the mark.
The neutral European exchanges have dis
played no individual tendencies but have fol
lowed, in general, the lead of sterling. The chart
on page 10 shows the course of dollar exchange
in the principal neutral countries during and
subsequent to the war. It will be seen that

BUSINESS

AND

FINANCIAL

although these currencies have shared in the ex
treme depreciation and seasonal movement which
have characterized practically all of the exchanges
since the war, their fluctuations during the wai
years were of quite a different nature.
During the period of “ pegging,” from October,
1915, to x^pril, 1919, when French and British
rates were stabilized at a slight discount from
par, all the neutral exchanges were quoted at a
premium in the United States. Inasmuch as the
balance of payments between the United States
and these countries was almost continually in our
favor during this period, the discount on the
dollar is not to be attributed to trade factors.
Indeed, the pegging of the British rate at a 2
per cent discount was, in itself, the cause of this
phenomenon. The various neutrals had favorable
financial balances with Great Britain during the
war, and hence the pound was quoted at a dis

CONDITIONS

count. The neutrals therefore were able to ob
tain dollars almost as cheaply as sterling, by
making a triangular purchase of our money
through London. Thus dollar, sterling, and franc
exchange moved as a unit in neutral countries
during the period of pegging.
Following the cessation of pegging in April,
1919, however, the neutral exchanges fell rapidly
and have remained at a considerable deprecia
tion since that date. In the case of these cur
rencies,as in the case of other depreciated moneys,
the depreciation is not attributable to trade
balances alone, but is a reflection of the degree of
currency inflation and the rise of prices in these
countries as compared with the United States.
In other words, since commodity prices in the
United States are on a gold basis, dollar ex
change rates represent very closely the gold
value of these foreign currencies.

BUSINESS

AND

FINANCIAL

RETAIL TRADE
business for July, as measured in
RETAIL
^ dollars, shows a falling off, as compared

CONDITIONS

fabrics and there has been a general decline in
demand for most lines of wearing apparel, both
by men and women. The accumulative effect
of the amount lost by the wage earner through
unemployment is now being felt more decidedly
than in the earlier months in which this condi
tion existed. Then savings could be drawn upon,
but these are now becoming depleted, and en
forced economy is the result.
Retail stores are following the example of their
customers and are buying with great caution
and only to fill present wants. Most merchandise
is in plentiful supply, in the hands of manufac
turers and wholesalers, so that little difficulty is
experienced in securing goods quickly. Fewer
price cuts have been made, and many articles
have shown stability in price.

with July, 1920, of 11.8 per cent. Last year the
reductions made during the late spring and sum
mer months were the first to be made after the
continuous and sensational advances of the pre
vious year, and these reductions induced many
buyers who had been holding off to purchase
rather heavily. This year conditions have been
very different. The market price of practically
all merchandise has been steadily declining.
Prices in the spring were sufficiently below those
of the corresponding period in 1920 to induce
buyers to purchase earlier than they did a year
RETAIL TRADE*
ago. As the public is buying cautiously and only
July 1 to July
to fill immediate needs, these earlier spring pur
July 1921
31 1921
N et sales:
compared to
compared to
chases have made the further reductions in price
July 1920
July 1 to July
31 1920
since then less attractive than were last year’s
Firms
in
Philadelphia
(13).........
1
3
.8
%
1
3 .8 %
reductions. This condition, in the view of some,
Firms outside Philadelphia (34)..
- 6.4%
- 6.4%
accounts for part of the falling off in buying dur
All reporting firms (47)...............
-1 1 .8 %
— 11 8%
ing July. Other influences have contributed, one
July 31 1921
July 31 1921
Sto ck s o f goo d s :
compared to
compared to
being the continued widespread depression in
July 31 1920
June 30, 1921
the iron and steel and affiliated industries. In
Firms in Philadelphia.................
-1 5 .9 %
- 4 .4 %
Firms outside Philadelphia.........
-1 5 .2 %
- 4 .3%
this district the falling off of retail business in
All reporting firms.......................
-1 5 .7 %
- 4 .4%
the towns and cities where these trades pre
Average stocks July 1
to July 31 1921
dominate is very marked.
S t o ck s com pared to s a l e s :
compared to
Average sales July 1
However, when due allowance has been made
to July 31 1921
for the difference between prices now asked and
460.3%
Firms in Philadelphia.............................
those asked a year ago, it will be seen that the
Firms outside Philadelphia....................
479.0%
464.8%
All reporting firms...................................
amount of merchandise purchased has been large
Orders outstanding
and compares favorably with the corresponding
July 31 1921
O rd ers com pared to p u r c h a s e s :
compared to
period of 1920. Merchandise of lower price is,
total purchases in 1920
Jn most instances, selling best. Silks continue
7.9%
Firms in Philadelphia..............................
Firms outside Philadelphia....................
7-5%
to move rather slowly, but ginghams have never
7.8%
All reporting firms...................................
been in better demand. Of course, there are
*Revised percentages.
exceptions to this rule. Cotton stockings are
difficult to sell, whereas retailers can hardly se
cure enough silk stockings to supply their needs.
In the men’s apparel shops, the continued heat
IRON AND STEEL
°f July caused a heavy demand for tropical weight
clothing, and in some cases it is reported to have
M ODEST increase in the volume of orders,
been exceedingly difficult to secure enough of
accompanied by continued price-cutting in
this to supply their customers. Since August 1
the much cooler weather has caused a decided nearly all lines, has characterized the iron and
falling off in the buying of very light weight steel market during the past month. Although

BUSINESS

AND

FINANCIAL

CONDITIONS

An encouraging feature of the present situa
sentiment has improved considerably in the trade,
it is too early as yet to determine whether this im tion is the fact that stocks are universally low
provement is likely to be of a permanent nature. and are not accumulating. Finished stocks are
The extensive and continual price cutting is reported to be decreasing and in some instances
hardly to be looked upon as a constructive are almost depleted. Reserves of raw materials
feature. Moreover, the present business repre are also diminishing, and in several cases have
sents largely an accumulation of orders, generally even been resold, that they might be reduced
for small lots and for immediate delivery, which more quickly. Consumers’ stocks are also low,
had awaited the arrival of satisfactory prices; and present purchases are to satisfy immediate
and competition for this business has been so needs only. Hence, any considerable increase of
keen that not only the small companies but the purchasing is bound to stimulate production.
On the other hand, the reports of production
large independents and the Steel Corporation
subsidiaries have quoted prices that are far below and orders placed during July are far from en
the most recently announced “ official” scale. couraging. The actual tonnage of pig iron pro
Pig iron, sheets and tin plate have, perhaps, suf duced was only 864,555, or a daily average of
fered most, being from $4 to $5 per ton under the 27,889; a decrease of 200,278 tons from the pre
official quotations of July. In consequence of vious month. This is a loss of more than 20 per
this instability of prices buyers hesitate to place cent from the June average and represents a
rate of about one-fifth of the nation’s capacity.
future contracts.
The railroads, it had been hoped, would re It is also the lowest tonnage produced in any
enter the market long before now, but reports month since December, 1903, and the lowest
from this district give little or no indication that percentage of activity displayed by the industry
their purchases are increasing. In the central during the present century. A net loss of seven
west, however, a few large contracts have re active furnaces occurred during July,— only 69,
cently been placed for car repair work. Inquiries with a daily capacity of 28,175 tons, being in
from automobile and miscellaneous manufactur blast on August 1.
Steel ingot production was equally disappoint
ing plants in the Philadelphia district are some
ing, showing a loss of 20 per cent from the pre
what more numerous.
In the Pittsburgh section conditions are rather vious month. Returns made by members to the
better. There increased demand has actually American Iron and Steel Institute indicate that
caused a number of mills to be reopened. In the total production of steel ingots was only
this district, on the contrary, reports indicate 803,376 tons, as compared with 1,003,406 tons
that operations have improved but little if any. for June and with an average of nearly 3,000,000
Many plants are entirely closed, and it is doubtful tons per month for the summer of 1920. It seems
if the local industry is averaging more than 20 hardly possible that during the twelve months,
or 25 per cent of capacity. Curtailment of opera production should have contracted to a volume
tions and of employment has resulted in a plenti little more than 25 per cent of what it was a
ful supply of labor, willing to accept much lower year ago.
wages than hitherto. The Steel Corporation on
The unfilled tonnage of the U. S. Steel Corpora
August 20 announced a further reduction in the tion again declined, the July 31 total being
wages of unskilled labor from 37 to 30 cents an 4*830,324 tons, which was a decrease of 287,544
hour, effective August 29. Many independent tons from the tonnage reported on June 30,
steel companies are already paying as low as 25 These orders were less than half those on the
cents per hour for unskilled labor which is only books of the corporation on July 31, 1920, when
5 or 6 cents higher than the pre-war scale. Ac 11,118,463 tons were reported. The report of
cording to the monthly survey of the Bureau the Bridge Builders and Structural Society f°r
of Census, there was a further decline in employ July shows orders and shipments of 32 and 3-*5
ment in the industry during July of 38,331 per cent of capacity respectively, and work
workers or 13.3 per cent.
ahead for only one month, or 61,600 tons.

BUSINESS

AND .FINANCIAL

Machinery and machine tool manufacturers in
this district are sharing to a great extent the
general inactivity of the steel industry, but
operations are on the whole at a higher rate than
in steel. Reports indicate that production aver
ages about 50 per cent of capacity. Orders re
ceived are for very small lots and for immediate
delivery, and finished stocks are, in some in
stances, accumulating.
Collections throughout the industry are re
ported as being fairly satisfactory, but a number
of firms report a recent slowing down. Cancel
lations and suspensions are giving little difficulty,
as most orders are for immediate shipment.

COAL AND COKE
A

n t h r a c it e

ETAIL dealers in this district report that
R
- demand for most of the domestic sizes of
anthracite has declined steadily during the past
month. Stove coal is selling in satisfactory quan
tities practically everywhere, but with this ex
ception domestic sizes are now moving almost as
sluggishly as the steam coals. This decline in
purchasing has caused some surprise to dealers, for
they are of the opinion that the public has not yet
accumulated sufficient reserves to protect itself
against the possibility of a winter shortage.
In consequence of this slackening of demand,
both retail dealers and the larger producers have
been compelled to store practically the entire
output of smaller sizes and an increasingly large
proportion of domestic sizes. Yards are over
stocked at the present time, and dealers have
frequently been compelled to ask for suspensions
or cancellations of contracts they have placed
with operators. Owing to their ample storage
facilities, the large operators, with few excep
tions, have been able to maintain a nearly normal
rate of production, but many of the smaller in
dependents have preferred to close their mines
entirely or reduce operations rather than con
tinue to operate at a loss.
That production in general has decreased is
seen in the recent report of the Geological Survey. According to this, anthracite production
for the four weeks ending August 13 was 6,923,000

CONDITIONS

tons, as compared with 7,387,000 tons for the
same period in 1920. Production for the last
week of that period, however, was 1,772,000 tons
as compared with 1,564,000 tons during the pre
ceding week; but the low output for the latter
period is to be attributed, in part at least, to
recent minor labor difficulties in the Lehigh and
Wyoming regions. And it is encouraging to note
that for the first seven months of the year pro
duction was 53,037,000 tons, as compared with
51,720,000 during the same period in 1920.
Recent price tendencies also reflect the decline
in sales. Although many of the large companies
made the usual ten cent advance on August 1,
retail dealers, in numerous instances, made no
advance. Quotations of the independents during
the past month have receded steadily, until at
present they are only slightly in excess of com
pany prices for domestic coals and are consider
ably less than company prices for steam coals.
This is significant, for the quotations of the in
dependents are sensitive to changing demand,
being higher than the stabilized level of the com
panies in periods of prosperity, and lower when
demand becomes slight.
B it u m in o u s

Although a slightly better sentiment is notice
able of late in the soft coal trade, tangible evi
dence of an improvement, in the form of a larger
volume of orders, is lacking. In fact, many deal
ers report a material decline in demand since last
month. The hope is expressed by many that
some measure of financial relief from the govern
ment will soon enable the railroads to place large
contracts, but at present their purchasing is dis
appointing. Most of their orders are for spot
delivery or prompt shipment, and they demand
the lowest possible prices. Industrial consumers
are also buying very closely and are apparently
unwilling to place contracts for future delivery
at present quotations. Since nearly 60 per cent
of the bituminous output is normally consumed
by railroads and industrial plants, little improve
ment may be expected before these companies
resume purchasing. Export and lake business
has suffered a considerable decline during the
past month, as the accumulation of stocks at the

BUSINESS

AND

FINANCIAL

ports is more than sufficient to care for any im
mediate demand from these sources.
The slight but steady decline in production,
which has continued since the first week of July,
was broken by a marked upturn in output re
ported for the week ending August 13. For this
week, production, as reported by the U. S. Geo
logical Survey, was 7,726,000 tons as compared
with only 7,175,000 for the previous week. Al
though this recovery is encouraging, the present
rate of output is far from satisfactory. The
average weekly output for the four weeks ending
August 13— 7,400,000 tons— is only slightly more
than 70 per cent of that for the same period of
last year. Even in 1914, which was a year of
severe industrial depression, the August output
averaged 8,700,000 tons a week, which is 18 per
cent more than the present rate.
Although the general level of soft coal prices is
practically unchanged, several instances of pricecutting, on both spot and contract coal, have
recently been reported. Prices have weakened
principally as a result of the competition of lower
cost coal from non-union fields. In these dis
tricts, notably the Somerset, Westmoreland and
Connellsville regions, operators have been able
to make wage reductions amounting to from 50
to 75 cents per ton. Competition from these
sources has naturally been disadvantageous to
companies operating in union fields, where they
have been unable to induce miners to accept
wage reductions. In consequence union mines
are universally operating on a much lower sched
ule than are non-union.
Collections are reported as being very slow
and unsatisfactory, especially from the railroads.
C oke

An encouraging, though slight, improvement
in the beehive coke industry is indicated by re
cent production reports of the Geological Sur
vey. During the four weeks ending August 6
there was a steady increase in production, the
output for that period being 190,000 tons,— a
slight but unmistakable gain over the total of
174,000 tons reported for the preceding four
weeks. This is a hopeful sign, but the tonnage
is still at only a small fraction of the normal rate.

CONDITIONS

Total output for the week ending August 13—
43,000 tons— is slightly less than 12 per cent of
that for the corresponding period of 1920. A
production of but 3,562,000 tons is reported for
the first seven months of the present year, as
compared with 12,411,000 tons during the first
seven months of 1920.
These figures, however, are not representative
of the entire industry, as the by-product branch,
which normally produces about half the nation’s
total, is now operating at a rate between 40 and
50 per cent of capacity. Hence the industry as
a whole is operating at over 25 per cent of the
normal rate. A number of smaller companies
have lately resumed manufacture, and it is re
ported that the largest producer in the Connells
ville region is preparing to do so at an early date.
Unemployment is still high, however, and further
wage reductions were announced on August 1.
Sentiment in the trade is much more buoyant
than it was last month, and many operators be
lieve that production and prices have both passed
the lowest point and will henceforth steadily im
prove. Prices have strengthened somewhat dur
ing the month and there are apparently fewer
distress sales. Quotations for spot furnace coke
range from $2.90 to $3, but contract prices are
about 25 cents higher. Spot foundry coke is
still quoted at from $4 to $4.50.

COTTON GOODS

OTTON goods are undoubtedly in a better
position at the present time than are any
of the other textiles. Different classes of goods
vary in activity, it is true, but generally speak
ing the entire market is in better condition than
it has been at any time during the current year.
Whether this position will be maintained or not
is problematical. Heretofore, increased activity
has resulted in higher prices, which in turn have
operated to check the demand. Cotton goods
dealers, however, agree in the opinion that pres
ent activity is based upon an actual shortage
of finished goods. If this is true, any moderate
increase of price will stimulate rather than retard
the present demand.
Reports emanating from both the retail and

BUSINESS

AND

FINANCIAL

the wholesale trade are all to the effect that
business is satisfactory. This is particularly
true in ginghams, some mills being sold up for
six months in advance. The fall buying season
for dry goods has not officially opened, but buy
ers are already placing orders covering a wide
range of materials.
The export trade in sheetings continues in
satisfactory volume, although price advances
resulting from increased domestic business tend
to restrict transactions. Another difficulty in
the selling of goods for export is the fact that
though early deliveries are desired, sheeting mills
will be unable to deliver goods before autumn.
The Levant has been the principal foreign buyer,
although China and South America have pur
chased a variety of small lots.
In the domestic market materials that have
until recently moved sluggishly are in good de
mand. One example of this is found in the sales

CONDITIONS

of drills and twills to shoe manufacturers in
increasing amounts. Percales are in request by
retailers, and this demand is, in turn, reflected
in the strength of the print cloth market. Both
yarns and fabrics for the automobile industry
are subject to greater inquiry as surplus stocks
in the hands of manufacturers are reduced.
Heavy ducks, however, are not in demand, and
but few sales of any size have been reported.
With but few exceptions prices are slightly
better on all cotton goods. The following chart
gives comparative prices on three important
cotton goods articles and the price of raw cotton,
since 1913. It will be seen that quotations for
the first eight months of 1921 correspond very
closely with those of 1917, when the long upward
swing began which culminated in the peak values
of 1920. The August quotation on staple ging
hams is JT cent above the average for the first
six months of this year. Other quotations for

BUSINESS

AND

FINANCIAL

the current month, as shown by the chart, are
slightly lower than the six month average, but
are higher than those for the month previous.
C otton Y

CONDITIONS

some time, but the recent purchase of small lots
indicates that the stocks held by tire manufac
turers are being depleted.
R

arns

C otton

Following closely upon the news of the unfavor
The cotton yarn market has improved in
strength during the past month and dealers report able crop report of August 1, the price of spot
a noticeable development in the number of in cotton rose over 150 points. However, by the
quiries. The number of sales is larger, but indi middle of the month a reduction of 70 points had
vidually they remain small in yardage, and no occurred, with a corresponding loss in activity.
The July consumption of cotton amounted to
general disposition is shown to anticipate future
460,139
bales, as compared with 563,064 bales
needs. In a large measure this attitude of the
buyers is attributable to the uncertainty of in July of last year. Consumption for the year
future market conditions. Another reason is ending July 31— the cotton year— amounted to
the existence of distress stocks which will be 5,401,750 bales, as compared with 6,762,207 bales
offered at reduced prices as the holders are forced for the year ending July 31, 1920.
Cotton spindles active during July numbered
to liquidate. Although the number of these is
decreasing, it is the opinion of many dealers 32,446,281, compared with 34,666,794 in July
that a stable price level will not obtain until they of last year.
are sold.
WOOL
Some spinners still claim that in view of the
recent increase in the price of raw cotton, profits
W o o len G oods
on many yarns are nil. In support of this con
MORE optimistic tone has prevailed in the
tention they have announced that they will
woolen goods trade since the successful
suspend operations rather than accept further
business at a loss. However, recent reports point opening of spring lines by the American Woolen
to an increase in the number of active cotton Company on July 25. Within two weeks after
spindles, and it is hoped that further reductions the opening staple lines were sold out and with
of personnel, especially in southern mills, will drawn from the market. Fancy worsted lines
were opened on August 8, and it is reported that
not be necessary.
orders
taken within the first week were sufficient
Past efforts of spinners to increase yarn prices
have been unsuccessful and it is predicted that to insure extensive operations until the begin
the present level will not be maintained. On the ning of the year. Independent mills that followed
other hand some members of the trade, expect the lead of the American Woolen Company have
ing the current quotations to remain firm, have also been successful in placing orders.
Except on a few numbers current fall prices
attempted to place orders for future delivery.
In general, though, spinners do not desire to are continued into the new season. This policy,
be tied up in a rising market, and hence some it is expected, will do much to stabilize the mar
orders which specified late delivery dates have ket, as retailers were apprehensive of possible
been refused. The number of these, however, price-cutting and of its effect upon spring busi
is small.
ness. Clothing manufacturers, however, feel
Carded southern yarns, hitherto a week spot that prices on cloth are still too high and that the
in the market, advanced slightly in price last volume of spring trade will depend largely upon
month. Indeed, gains of from i to 2 cents on their ability to produce garments at a lower cost.
all yarns were general, and some spinners asked
A recent development of interest is the atten
an increase of 5 cents. Weavers are buying for tion given to novelty fabrics. For some time it
towels, upholstery goods, and denims in larger has been the aim of manufacturers to encourage
quantities. Tire yarns have been inactive for a wider use of novelties in order to keep the great

BUSINESS

AND

FINANCIAL

est possible number of looms in operation. This
can be done, it is believed, without materially
reducing the use of staple goods, for fancy fabrics
are usually made up into extra garments, and
the result would be a general increase in mill
operation, which is especially desirable at this
time.
Women’s wear has not been in such demand as
men’s wear during the past few months, and
several explanations have been advanced for the
prevalent dulness in this branch of the trade.
One is the relatively high price demanded by
retailers for finished dress goods. Another rea
son is the present wave of economy and the con
sequent substitution of cotton goods for woolen
fabrics. Further, some mills formerly engaged
in making men’s wear turned their mills over to
the production of women’s wear in the spring,
and thus created an abnormal supply, which is
now being consumed but slowly.

CONDITIONS

Several indications lead manufacturers to be
lieve that an increasing volume of business in
woolen goods will be done within the next few
months. Agents for men’s wear houses have dis
continued the hand-to-mouth buying heretofore
characteristic of the trade. This is mainly the
result of a belief that there is an actual shortage
of finished stocks resulting from decreased mill
production.
W

ool

and

orsted

arns

The general aspect of the woolen and worsted
yarn market has changed but little during the
past month. The sentiment is strong that the
recent spring business done by weavers will result
in satisfactory yarn orders. However, develop
ments at this time do not indicate that cloth
manufacturers intend to anticipate their demands
beyond the sixty-day period. On the other hand,
certain spinners of quality yarns report a con-

Relative : P pices
1913-1921

^EPCEm

PERCENT
*

----“1
l
1
1
1
3 3 0

— DunsIndex Numbers ofWholesale Prices
— ^13 to 2/203 ! BloodWorsted Yaw s

/“
/
/
/
/
/
/

1B13 -

300

ioo

Percent

/ -----------v
\

r
!

/
7
/

150
/
y

350

I1
\
\

300

i
i
\
i

\
\

250

\
\
\

1
1

200

“

i
/

250

i
l
1

\
\
\
\

200

___
VN_____

150

100

50
0

1913

1914

1915

1916

1917

1916

1919

1920

1921

BUSINESS

AND

FINANCIAL

CONDITIONS

BUSINESS

AND

FINANCIAL

CONDITIONS

PROGRESS to lD A T IO N
Table showing how principal assets and liabilities of latest statements have inc^A or decreased (— ) as compared with statements of a year ago and a month ago

FEDERAL%e system
Increase or decrease August 17, 1921
as compared with August 20, 1920

Total reserves........................................ •
Discounts secured by Government obligations
All other discounts..............................................
Bills bought in market.......................................
Securities held.....................................................
Uncollected items................................................

+
—
—
—
—
—

3623,631,000
3741,940,000
3365,392,000
3278,655,000
358,757,000
3253,369,000

Net change...........................................................

—31,074,482,000

1921V — -------------------------------------

Increase or decrease August 17, j
as compared with July 20, *“

+ 386,102,000
— 350,090,000
-3123,942,000
+ 318,003,000
— 38,895,000
— 312,784,000

(29.39%)
(57.00%)
(27.72%)
(86.92%)
(19.33%)
(32.25%)

( 3.24%
( 8.2 %
(11-51%
(7^-5L
( 3.50%,
( 2.34%

— 391,606,000

L ia b il it ie s

Increase or decrease August 17, 1921
as compared with August 20, 1920

Increase or decrease August 17, 1921
as compared with July 20, 1921

jojunent deposits..................................
Her bank deposits...............................
^ d e p o s i t s .....................................
^ a reserve notes in actual circulation
,reserve bank notes— net liability.
If ed availability items........................

— 335,949,000 (65.41%)
— 3172,105,000 ( 9.59%)
— 314,163,000 (31.51%)
— 3671,083,000 (21.13%)
— 384,061,000 (42.33%)
— 3132,974,000 (22.49%)

—315,953,000
— 38,626,000
+ 32,809,000
—360,870,000
—313,373,000
+ 34,577,000

T hange..................................................

—31,110,335,000

—391,436,000

(45.62%)
( 0.53%)
(10.08%)
( 2.37%)
(10.46%)
( 1.00%)

REPORTD%R b a n k s
A ssets

Increase or decrease August 13, 1921
as compared with August 20, 1920

— 3344,144,000
— 342,801,000
— 3175,799,000
—31,370,752,000
— 3162,560,000
— 341,578,000

1921

Increase or decrease August 13.
‘ 'fy l
as compared with July 15.

— 323,188,000
— 322,563,000
+ l(A,S6SfiOO
—3121,037,000
— 347,270,000
— 326,205,000

(35.87%)
( 1.42%)
(11.65%)
(12.01%)
(11.93%)
(11.81%)

LATEST AVAILABLE FIGURES
1920
August

7 %
9-9 y2%
8 %
373.82
374.66
386.22
262
18.8273
252.288
4.57
152
38,507,721
July

Dividends declared............................................................................. ...

346,349,500
3215,661,650
3537,118,000
3651,136,000

|d deposits...............................................
■*ePosits.....................
ftri3rile1n.t deposits.........................................
SreH‘ e w'th Federal Reserve Bank........
! 'scounted with Federal reserve banks

xAhange.........................................

-3175,698,000

—32,137,634,000

Stock prices— *

(3-63%|
(0.75%{
(5.09%
(1-11%(
(3.79%
(7.78 /c)

L ia b il it ie s

c o m p

^ ^ J " 'L v io u s p
MONTH

1921
July

6 %
6-6 tf%
6 'A-6X%
376.99
372.48
368.27
148
10.7284
159.833
2.98
371
37,416,606
June

353,963,000
3124,747,360
3198,000,000
3340,000,000

a°ston.
fcYork.
Mi
'
cWafelphia..
U\ r eland
--mond...
372-5
Cknta-..
365.34
'{fogt i Vt;E°U1s.....
C neaP°Hs..
9 Francisco,
-°mbi>ned.

*42,90?’%

v3320,70^m

Increase or decrease August 13, 1921
as compared with July 13, 1921

—31,360,519,000 (12.08%)
+ 3175,030,000 ( 6.43%)
+ 3235,870,000(162.36%)
— 3483,918,000 (63.83%)
— 3605,244,000 (45.56%)

—3190,463,000
— 34,229,000
+3103,227,000
— 337,657,000
—3119,472,000

—32,038,781,000

—3248,594,000

( 1.89%)
( 0.15%)
(37.14%)
(12.08%)
(14.18%)

AND PREVIOUS YEAR

R e s e r v e ratios

S6,98V!’

Increase or decrease August 13, 1921
as compared with August 20, 1920

.fe fs s is *tios c°mputed as at present.

March 12J

July 18

August 17

44.2%
37.9
40.5
47.3
38.7
46.0
39.5
40.4
43.7
41.3
39.7
42.7

78.9%
68.0
65.4
66.0
43.7
41.8
59.3
53.5
38.6
51.1
42.8
61.3

76.6%
72.2
64.5
69.2
44.0
40.9
69.1
58.5
39.6
59.6
40.5
64.5

36.36

62.2

65.6

BUSINESS

AND

FINANCIAL

stantly increasing business, the majority of which
comes from producers of woolen hosiery.
The finer counts of yarn are the subject of
greatest inquiry, and values are slightly higher.
An example of this is found in 2- 50S , which at
the first of the month were obtainable at $2 per
pound but subsequently advanced to $ 2.10 per
pound. Though prices have not improved on all
yarns the practice of shading prices in order to
secure business has been virtually eliminated.
The knitting yarn trade varies in activity, and
no particular branch is doing more than ordinary
business. Woolen and worsted hosiery is prob
ably in better condition than any of the other
knit goods departments, as it has about 70 per
cent of the total number of machines in opera
tion. The current season for light weight under
wear is practically over, and, as yet, little busi
ness has developed for 1922. In heavy weight
underwear, the market is spotty and the number
of inquiries has decreased since the first of
August. Further reduction of output is expected,
as manufacturers do not believe that retailers
will buy except in small quantities for immediate
sales.
The preceding chart, comparing the price of
worsted knitting yarns with general commodity
prices, shows the approximate parity that exists
between them at present, following the high
prices and violent fluctuations of yarns during
and subsequent to the war. As a result of the
placing of the Underwood tariff on raw wool,
prices for both wool and yarns strengthened
early in 1914. During 1915 and 1916, a gradual
increase occurred, which was caused by allied war
orders and the absence of foreign competition.
Immediately following our entry into the war
in 1917, prices rapidly increased, until Govern
ment regulation became effective in April, 1918.
Following the abrogation of these regulations,
in December of 1918, prices dropped to about
50 per cent above the level of 1913. Specula
tion during 1919 and the first part of 1920 forced
the prices up to even higher levels than those of
1918 and there they remained until the general
period of liquidation began in May, 1920. The
next six months witnessed a rapid decline in yarn
prices of almost 50 per cent, and the August
quotations denote that at present yarns are only

CONDITIONS

17 per cent above the general commodity prices
as shown by Dun’s index number.
R

ool

The raw wool market is in better condition
than it has been at any time during the present
year. The consumption of over 52,000,000
pounds of raw wool in June, the latest figures
available, is the largest for any month since
April, 1920. The total consumption for the first
six months, however, was 24 per cent below that
for the similar period of 1920. This is explained
by the unusually large use of wool during the
first half of 1920. As compared with the inac
tivity of the latter half of 1920, the first six
months of 1921 show a gradual improvement.
The successful opening of spring lines helped
to create a favorable sentiment in the raw wool
market. However, firmer prices are confined to
fine wools, as the summer fabrics are produced
mostly from these grades. In coarse wools values
are slight lower, for it is expected that consump
tion of this grade will decrease. Another reason
for the strong position of fine wools, in compari
son with other grades, is the relatively small
production of fine and half blood staples. It is
evident that with increasing consumption it will
soon be necessary to import fine staple wools
even under a high tariff.
Sales of three-eighths blood have been made
recently at a price of 50 cents, scoured basis.
Fine territory wool has sold at between 60 and
65 cents, clean, and some dealers have refused
offers of 68 cents for choice lots. Australian and
Cape wools have both sold well recently, good
Australian in some cases having brought 75 cents.

SILK

QUIET month has just been experienced in
the silk market. Retail buying of silk goods
diminished more than was expected by dealers,
even the inducement of bargain sales having failed
to stimulate the demand to any extent. Among
wholesalers and manufacturers thosehandlingwell
known brands did the majority of the business.
The buying of broad silks is being restricted

BUSINESS

AND

FINANCIAL

almost entirely to staples. Ordinarily retail
merchants and the cutting-up trade enter the
market at this time of year to supplement the
staple lines they purchased in the spring. This
season, however, these buyers inspect wholesale
stocks and after making a narrow selection
announce their intention of waiting until the
public displays an inclination to buy. In no
case has there been any movement by retailers
to discontinue hand to mouth buying. Whole
salers on the other hand cannot follow this
conservative buying plan as closely as retailers
do, as they must carry a well balanced stock from
which retail buyers can choose.
The ribbon market is still characterized by the
dullness that has prevailed for several months,
although there has been some small lot buying
for samples. In spite of the light demand, ribbon
prices have remained firm, and no reductions are
expected by the trade. Houses doing business in
the dress accessory trade report that the demand
for ribbons is fair and that satisfactory orders
have been booked.
Conditions are unchanged in both the domestic
and primary raw silk markets. Prices in Yoko
hama and Shanghai have receded slightly, but in
Canton and Milan no change is reported. The
Imperial Syndicate of Japan holds 42,000 bales
of raw silk, and about 30,000 bales are held by
individual firms. Last year at this time the total
stock of silk was only 34,000 bales, as compared
with the present supply of 72,000. Imports of
raw silk for July were 8,500 bales greater than
those for June, and for the same period there was
an increase in consumption of 1100 bales.

HOSIERY
V I L K hosiery is in continued demand in fullfashioned, mock-fashioned and seamless
styles, and the mills making these are well
supplied with orders. Conditions in the fullfashioned mills in which the strike exists are
miproving, and they are now able to work at
tftore than 25 per cent of capacity. This result
has been achieved by teaching new hands. Plenty
°f labor suitable for this is obtainable, but the
number of teachers has been small, which has

CON DIT ION S

greatly retarded the work. It is expected that
from now on progress will be more rapid, as
some of the new men will be able to help in the
teaching. One of the largest full-fashioned mills
in the country has progressed so far as to be on
an almost normal basis.
There has been little change recently in the
price of either finished silk hosiery or of silk yarn.
Prices for both are firmly maintained. The im
proved demand for high grade mercerized goods
previously noted continues, but trade is still
far below normal. Low end cotton has also been
in better demand, but price-cutting is still being
resorted to, and the margin of profit for the
manufacturer is said to be very small. Prices
of all grades of cotton yarn used by the hosiery
trade have advanced recently, the low grades at
least one cent and the highest grades as much
as five cents. Manufacturers who make cotton
goods hope that the advances in yarn will steady
the price of stockings and stimulate trade.
Exports of both cotton and artificial silk
hosiery declined in June, as compared with May.
In cotton the June figures were 190,845 dozen—
the smallest for any month in the year— as
against 191,765 dozen in May. In artificial
silk the June figures were 64,802 dozen as com
pared with 67,802 dozen in May. The exports
of cotton hosiery for the first half of 1921 were
1,380,790 dozen. In 1920 the exports for the
months of March and May were each larger
than this six months’ total.
OPERATIONS IN THE HOSIERY INDUSTRY
No. of firms reporting—29

July 1921
compared to
June 1921

July 1921
compared to
July 1920

Firms selling to the wholesale trade:
Product manufactured during
July..........................................
Finished product on
hand
July 31.....................................
Raw materials on hand July 31. .
Orders booked during July . . . .
Unfilled orders on hand July 31

4.4%

-2 1 -5 %

- 9.4%
+ 2.5%
-3 7 .4 %
- 4.8%

-7 0 .4 %
— 39.1%
+ 5 6 .9 %
+ 3 6 .7 %

+ 9.8%

-2 3 .7 %

+ 1.4%
+ 14.4%
- 3 3 .0 %
+ 18.5%

-6 0 .3 %
-5 1 .9 %

Firms selling to the retail trade:
Product manufactured during
July.........................................
Finished product on hand
July 3 1 ....................................
Raw materials on hand July 31
Orders booked during July........
Unfilled orders on hand July 31

—

5 .9 %

BUSINESS

AND

FINANCIAL

CONDITIONS

UNDERWEAR

CARPETS AND RUGS

HERE has been a decided improvement in
the demand tor heavy weight underwear for
the fall trade, and a number of duplicate orders
have been received by manufacturers. However,
the total business done so far is small in com
parison with that of other years. Jobbers and
retailers have both maintained a very conserva
tive attitude, buying as a rule for immediate
needs only. Some cases have been reported of
requests being made for earlier shipments than
were specified, which shows that in these cases
at any rate stocks are depleted. The situation
is a most difficult one for the manufacturer, for
curtailment in production has undoubtedly been
heavy, and much doubt is expressed as to the
ability of the mills to fill enough orders from now
on, if such orders are received, to make the
season’s business normal.
The opening of light weight underwear for the
spring season was set for August 15. The day
passed without any show of enthusiasm and was
different in no way from any other day. Many
manufacturers have been booking spring orders
for some time and are continuing to do so. The
volume already placed, though not large as com
pared with that of the average year, is consider
able and is a source of encouragement to manu
facturers as an indication of a return to former
methods of merchandising and a departure from
the recent policy of buying only for prompt
delivery.
Prices of all grades of yarn used in the manu
facture of underwear have advanced and are
firm. This has helped to stabilize prices and
has largely stopped price-cutting.
Collections
are slower than they have been in recent months.

HE outstanding feature of the carpet and
rug industry during the past month has been
the settlement of labor difficulties. In the tapes
try and velvet mills of this district operations
were resumed on August 1 on a scale commensu
rate with the limited demand existing at this
time. The strike of weavers in the Wilton and
Brussels mills was also virtually settled, although
not all of the weavers have returned to their
looms. It is expected that all difficulties will be
settled and complete operations be resumed by
the middle of September.
The strike in the Wilton mills was general
throughout the country, and no rugs have been
woven, except by apprentices, since January of
this year. This, together with the fact that a
limited but steady demand has reduced the stocks
that had accumulated before the strike, has
caused an actual dearth of Wilton and Brussels
floor coverings at the present time. The scarcity
is not confined to retail dealers alone, for jobbers
entering the market to replenish their stocks find
that even the larger mills have long since dis
posed of all desirable materials. It is the opinion
of jobbers that Wilton rugs will be sold as rapidly
as they can be produced. A buyer for one of the
large department stores said that all rugs shipped
to him within the next six months would im
mediately go out to customers. However, a large
part of the present demand is for small lots, to
be shipped at once. This is due to the fact that
within two months spring samples will be shown
and orders placed for spring business.
Cheaper rugs have, to a large extent, taken the
place of Wiltons and Brussels since the beginning
of the year. This is particularly true of Axminsters, though other less expensive rugs have been
sold too. However, in general, the lower the
quality of the rug, the less has it been in demand.
The number of idle carpet looms is slowly de
creasing, according to figures compiled by the
Department of Commerce. The following table
shows the percentage of active looms for the
first eight months of 1921, as compared with the
similar period of 1920.

CONDITIONS IN THE UNDERWEAR INDUSTRY
No. of firms reporting—20

July 1921
compared to
June 1921

July 1921
compared to
June 1920

Product manufactured during July
Finished product on hand July 31
Raw materials on hand July 31 . . .
Orders booked during July.............
Unfilled orders on hand July 31. .

— 21.9%
+ 4.9%
— 38.5%
— 28.8%
- 3.9%

— 47.0%
— 36.2%
— 59.6%
+ 97.5%
-4 2 .5 %

BUSINESS

January.........
February.......
March...........
April..............
May...............
June...............
July...............
August..........

1920
Per Cent
of active
looms
to total

Total
looms

69
71
72
71
71
70
67
67

8644
8726
8617
8510
8621
8594
8610
8146

AND

FINANCIAL

Active
looms

1921
Per Cent
of active
looms
to total

Total
looms

Active
looms

6032
6226
6231
6109
6167
6090
5847
5516

54
50
40
43
46
47
49.2
49.5

8686
8574
8617
8562
8535
8568
8577
8618

4714
4312
3406
3663
3963
4027
4230
4273

LEATHER AND SHOES
L

eather

URING the period of the war and since,
there have been great and rapid changes
in the prices of raw hides and skins, and of leather
and leather products. In 1913 and that part
of 1914 prior to the declaration of war, the
prices of heavy native steer packer hides, and
of scoured oak backs, these two being here con
sidered as the standard of values, varied but
little. Throughout this article the prices quoted
refer to the specific grade of hides and grade of
leather noted above. During this time hides
sold at from 17 to 20 cents per pound, and backs
at from 45 to 48 cents per pound.
Almost immediately after the declaration of
war, prices of both began to advance, but until
the opening of 1916 the changes were slight. In
that year hides rose to 32 cents and leather to
87 cents. Thus by December, 1916, the price
of hides and leather averaged 65 per cent above
the pre-war normal, and that of sheepskins for
leather jerkins, 250 per cent. Then Great Britain
inaugurated a system of price fixing which had
a remarkable effect in stabilizing the prices in
this country. Prices began to decline, but only
comparatively small changes occurred until the
U. S. War Trade Board took control over the
Jmportation of hides. In February, 1918, the Hide
and Leather Control Board was formed, and this
Was shortly afterwards reorganized as the Hide,
Leather and Leather Goods Division of the War
industries Board. Under their supervision vari
ous arrangements were made whereby the market
*as controlled, and thereafter the fluctuations
in price were inconsequential.

CONDITIONS

After the armistice was signed prices were 28
cents for hides and 78 cents for leather. But
shortly after the beginning of 1919, the market
then being an open one, prices began advancing.
The greatest excitement prevailed in all branches
of the leather business. Prices changed so
rapidly that in some instances quite unheard of
advances occurred overnight. By July, 1919,
hides had climbed to 52 cents per pound, and
leather to $1.09 per pound. From that point
prices declined almost as rapidly as they had
advanced. By the end of 1920 hides had reacted
to 18 cents, almost exactly where they were in
1913, and leather had fallen to 60 cents. During
the early part of the present year further declines
took place, hides selling below 9 cents per pound,
and leather below 50 cents per pound; although
on account of the thoroughly demoralized condi
tion of the market and because buying was
negligible, it is not possible to state the exact
low price at which these articles were traded in.
All other skins and leathers acted in about the
same way during the period from 1914 to 1921,
except that in calf, sheep and goat skins and the
leather manufactured from them, the fluctua
tions were greater and the changes in price even
more rapid. The principal reason advanced for
the greater activity in these skins and leathers,
is that they were largely imported and that
ocean freights and insurance rates had risen to
unheard of prices. Also at that time the fashion
for women’s kid and calf shoes called for very
high uppers, necessitating the use of much more
leather than normally, and this at a time when
the supply was small.
Thus it will be seen that during the years
under review hides advanced about 35 cents per
pound, and that the leather made from them
advanced over 60 cents per pound. The differ
ence is accounted for in large part by the increase
in the cost of manufacture. Labor in the in
dustry, which, prior to the war, had received very
low wages, received many advances, and the
increase in the cost of fuel and tanning material
was considerable.
Though the peak of prices for raw hides and
skins and sole leather was reached in the summer
of 1919, shoes continued to advance for nearly
a year thereafter, and the peak price for shoes

BUSINESS

AND

FINANCIAL

was not reached until the spring of 1920. The
average price of a group of shoes selected as
typical, rose 29 per cent in 1920.
As in all periods of rising prices, manufacturers,
wholesalers and retailers made unusually large
profits. By a recent report of the Federal Trade
Commission, we are informed that tanners of
shoe leather, making about 65 per cent of the
total production, reported profit on investments
— as represented by capital stock, surplus and
borrowed money— of 13.1 per cent in 1918, and
of 29.8 per cent in 1919. Tanners of kid leather,
making 70 per cent of the total production,
averaged profits of 26.8 per cent in 1918 and 81
per cent in 1919. Shoe manufacturers, making
62 per cent of our output, made a profit of 16.2
per cent in 1918 and 29.8 per cent in 1919. The
large increase in profits was due primarily to the
fact that the selling prices increased out of all
proportion to the increases in costs per unit of
production. Reports from 32 typical shoe whole
salers show an average profit in 1918 of 22 per
cent, and in 1919 of 31 per cent; and reports from
46 typical retail shoe stores show an average
profit in 1918 of 25 per cent, and in 1919 of 32
per cent. These increased earnings in 1919
indicate that, with shoe dealers as with tanners
and manufacturers, the selling prices advanced
more rapidly than did costs. But when the turn
in prices came, the change in conditions was so
sudden, and the fall in prices so great, that much
of the seemingly large profits was quickly ab
sorbed by the consequent losses.
Today, the price of shoes has not fallen to
pre-war levels, though the hide and skins from
which they are made have done so. This is not
difficult to explain, for expenses of all kinds,
though much lower than they were a year ago,
are still considerably above the 1914 level.
Freight rates are higher, and so is fuel. Labor
in both the tannery and the shoe factory is higher,
and so are many of the smaller items which go
into the cost from the time the hide is sold until
the shoe is put into the hands of the consumer.
The prices of all kinds of hides and skins have
advanced since the low point of 1921. The
tanneries, which were either shut down or nearly
so, have increased operations until they are now
working on an average of from 60 per cent to

CONDITIONS

70 per cent of capacity. Shoe manufacturers also
have recovered from the period of stagnation,
and are now increasing their output of shoes
and have sufficient orders on their books to keep
their factories running for several months.
At the time of writing, the upper-leather
market shows considerable activity. Glazed kid,
both black and colored, is in demand. Though
stocks of medium and low grades are still large,
the call for them has shown a decided improve
ment, in spite of the fact that in these grades the
lack of export demand is felt most. The foreign
exchange situation has made it extremely diffi
cult for anything like a steady business to be
done. The reports are that stocks of finished
kid in England are low and that supplies are
needed there, but the unfavorable exchange rate
is causing buyers to hold off in the hope that in
the autumn exchange will be more in their favor.
As an indication of the improvement in glazed
kid, we quote from the report of the Census
Bureau as of June 30, “ Stocks of glazed kid
have decreased 5.4 per cent during June.”
Calf and side leathers are being bought in
good quantity, and prices for both are firm, as
are prices of sole and welting leathers. An
advance on one grade of sole leather was an
nounced by a large tanner. The Census Bureau
reports that June 30 shows the first decline in the
stock of sole leather for a number of months,—4.8 per cent for the month. Welting leather
during the same period showed the effect of
increased business in a decline of 26.2 per cent
in stock on hand.
In belting butts there is little change. A
goodly number of orders is being booked, but
they are of small size and the total is inconsider
able. Glove leather continues dull, but a slight
increase of inquiries is reported.
R

id e s

and

S k in s

A generous amount of business has been done
in hides and calf skins during the month, and
prices remain firm. The possibility of a duty on
hides is still being discussed, and it is said that
some of the most influential members of the
Senate favor such a duty. This has tended to
prevent any recession in prices.

BUSINESS

AND

FINANCIAL

Goat skins continue in good demand and sales
of large lots have been made. East Indian skins,
particularly Patnas, are especially wanted. The
prices quoted for skins from this district vary
considerably. Some of the cablegrams from
Calcutta have asked $i per dozen more than the
price at which sales of goods already shipped
from that port have been consummated. Spanish
skins have also been bought in good sized lots
at firm prices. Brazils are in good demand, and
the supply both here and in Brazil is reported
to be small. Argentina skins of various descrip
tions have sold at prices fully equal to those
obtained at previous sales. The stock in Buenos
Aires is reported to be considerable, but it is
held by large firms, who, up to the present, have
refused to sell at ruling prices.
Sheep skins in London are in increased supply,
and prices are, if anything, a little easier. This,
together with the favorable rate of exchange,
enables tanners in this country who use sheep
skins to procure their supplies at very attractive
figures.

CONDITIONS

unable to turn out shoes to their maximum
capacity.
Collections are reported as being slower than
they were a month ago, especially in the middle
northwest.
This month we have inaugurated our reporting
system in the shoe manufacturing business, and
we give below a table showing the first results
of its operation.
CONDITIONS IN THE BOOT & SHOE INDUSTRY
No. o f firms reporting— 36

(In terms of pairs)
Production....................................
Shipments.....................................
Orders booked..............................
Orders on hand............................
Stocks on hand............................
Number of operatives on payroll.

July 1921
compared to
June 1921

July 1921
compared to
July 1920

- 2 0 .5 %
- 3 6 .5 %
- 4 4 .9 %
+ 1.5%
+ 6.0%
+ 2.3%

-4 .2 %
— 43 .8%
— 27.2%
+23 .6%
+ 6 1 .7 %
+ 11.5%

RUBBER GOODS

Shoes

Shoe manufacturers in this district are now
in the midst of a busy season and are, as a rule,
well supplied with orders. Those making shoes
for girls of school age are particularly well off
in this respect. However, all lines have shared
in the improvement.
Jobbers who delayed placing their orders so
that they might obtain the fullest possible in
formation on styles, have bought decidedly
larger quantities during the past month. The
demand, except for children’s shoes, is almost
entirely in various styles of low shoes.
There has been practically no change in prices
and the market is decidedly firm. All cotton
goods used in shoes are held at prices above those
of a month ago, and sales at the advanced figures
have increased. In some instances manufacturers
of cheap grades of shoes have been able to obtain
slight concessions on their purchases of leather,
but reports of transactions of this kind are fewer
than they were earlier in the season.
Shortage of expert female help in the fitting
toom continues, and this is responsible for the
fact that many factories well sold ahead are

HE rubber situation as a whole shows im
provement, varying in degree with each branch
of the industry. Mechanical goods and rubber
specialties are in limited demand, although stocks
of finished goods are reduced to a minimum. On
the other hand, the demand for tires and rubber
accessories has widened, even beyond expec
tations, during the past two months. The price
of raw rubber, which in May and June reached
the lowest level ever recorded, has recovered
but slightly from that point.
The railroads and the iron and steel industry
are the largest users of mechanical rubber goods,
but during the last year their purchase of these
materials, as of other equipment, has been limit
ed to necessities. Before the present dull period
began large stocks of mechanical rubber supplies
were accumulated by the railroad and steel com
panies. Under normal conditions shortage of such
stocks at any one point would be met by an order
to a producer of such goods. Now, however, a
reshipment of surplus stock is made from the
place of storage to the point where it is needed.
Tire manufacturers report increasing business
as summer advances, and the entire industry is

BUSINESS

AND

FINANCIAL

CONDITIONS

now operating at better than 60 per cent of capa of $114,639,659, as compared with 632,392,636
city. Larger orders are being placed by auto pounds, with a value of $274,156,825, for the
mobile manufacturers for tires to be used as orig corresponding period of 1920.
inal equipment, and at the same time replacemen c
demand is increasing with the advancement of the
CHEMICALS
touring season. The following table, prepared by
the Rubber Association of America, shows the
increase in production and in domestic ship
OREIGN competition continues to be the
ments, and the decrease in stocks, for the first
most disturbing factor in the domestic
five months of 1921.
chemical market. The strong position attained
by the chemical industry during the war years
I n n e r tu b e
T ir e s
has been seriously endangered in many lines by
Shipments
Shipments
competition of lower cost chemicals from abroad.
Production j Stocks
Production
Stocks
domestic
domestic
i
In the export market, European products have
Jan.—
j
practically driven the American manufactures
703,430 5,319,605
965,417
740,824 5,586,163 1,042,617
from the field, and in the domestic market impor
Feb.—
916,627 5,415,464 1,129,881
819,892 5,193,018 1,073,756
tation of fine chemicals and dyes has become in
Mar.—
creasingly
serious. The decline in exports of
1,163,314 4,597,103 1,614,651 1,346,483 5,044,861 1,643,690
Apr.—
certain
typical
chemical products, as reported
1,651,418 4,527,445 1,785,951 1,762,122 4,916,772 1,983,571
by the Department of Commerce, is shown in the
May—
2,100,917| 4,451,668 2,085,882 2,210,040 4,751,880 2,342,567
following table:

So l id tir e s

Production

Jan.—
21,220
Feb.—
23,355
Mar.—
28,710
Apr.—
28,859
May—
35,156

Stocks

Shipments
domestic

Fabrics

Crude Rubber

303,753

29,116

2,598,143

6,625,435

304,374

29,559

2,952,058

7,823,657

283,800

43,926

4,474,965

12,075,298

269,985

42,080

6,524,668

17,191,149

264,633

40,122

7,863,738

21,050,554

The smaller companies, unburdened by highpriced raw material, have been in better shape
financially than the larger firms. As a result
they have priced their product low enough to
more than enable them to keep pace with their
larger competitors in the volume of sales.
The demand for raw rubber has displayed
slight improvement, although manufacturers still
limit their purchases to small amounts. Prices
remain firm. Smoked ribbed sheets are quoted
at 14 1-2 cents, as against the low level of 11 cents
in June. Imports for June were 34 million
pounds, an increase of 48 per cent over the amount
imported during May. Imports for year ending
June 30 were 356,975,223 pounds, with a value

June
1920

R a w m a te r ia l

Acids............................
Dyes & dyestuffs........
Tanning extracts........
Soda salts....................
Potash salts.................
Lime............................

$ 565,347
3,851,180
343,913
2,404,076
383,602
158,103

June
1921

3141,512
605,096
114,040
547,252
37,757
56,945

Per cent
decline

74.7%
84.4
66.6
77.0
90.1
64.0

The course of prices of practically all chemicals
has been downward for over a year. Prices of
the various chemical groups, as shown by aver
ages prepared by “ Drug and Chemical Markets, ”
are from 40 per cent lower than the peak, in the
case of dye intermediates, to nearly 60 per cent
lower in the case of crude drugs. But in spite of
these recessions many products, especially the
coal tars, are still considerably higher than they
were before the war and even relatively higher
than the general average of commodity prices.
During the past few months prices have declined
slightly, but the market is still weak, and
concessions are frequent, especially to meet
foreign competition. Prices of foreign compe
ting chemicals, when expressed in dollars, are
almost without exception below the domestic
level, a condition for which the present exchange
situation is largely responsible.

BUSINESS

AND

FINANCIAL

The uncertainty as to the tariff and the constant
decline in the prices of raw materials have forced
manufacturers of chemicals to follow a very con
servative policy. Operations have been curtailed
to meet existing demands, even though in some
instances this has necessitated the closing of
factories; and stocks are kept as low as possible.
Unemployment is quite high throughout the
industry, and wages have been further reduced,
but the general level is still considerably higher
than in most other industries in this country and
is much above the wage received by European
workers in the same field.
In this district the poor demand for heavy
chemicals reflects the general industrial situation,
and the depression in textiles, leather, and paper
has seriously affected the market for dyes. There
has been, however, a rather surprising improve
ment in the sales of pharmaceuticals and drugs,
one firm doing a nation-wide business reporting
that the demand for these products is better in
this district than in any other section of the
United States.
Collections are described as being only fair
and some firms are having greater difficulty with
them than they had last month.

CONDITIONS

would in all probability be ordered at lower
prices. In most cases quotations have been
lowered as costs have decreased, but paper is the
only element of cost that has declined to any
appreciable extent.
The character of the demand, which is for small
lots to be delivered immediately, indicates that
consumers’ stocks are low. The number of orders
received is large, but they are so small in size as
to keep the total volume of sales down. There
is also very little paper left on the shelves of the
distributors, and they are pursuing similar tac
tics in buying with the result that their rate of
turnover is fairly rapid. Because of these small
stocks any business that is placed is transmitted
almost directly from consumer to mill. Manu
facturers seem to have sufficient supplies on hand,
as they are filling orders immediately although
operations are reduced still more than they were
last month and in this district now average less
than 35 per cent of capacity. Many mills have
closed down entirely during the last few months,
and others make it a practice to cease manufac
turing until enough orders have accumulated to
make further production necessary. In general,
sales exceed production and stocks are being
reduced.
Federal Trade Commission figures for June
PAPER
show that total stocks of paper decreased slightly
during the month, although they increased in
O U M M E R inactivity, which has not been some particular grades such as book and wrap
^-'noticed in the paper trade for several seasons ping papers and board. The supply on hand at
previous to this one, continues to depress busi the end of June was, however, 70 per cent greater
ness, and the general demand for paper is ex than on the same date last year, and 40 per cent
ceedingly low. Slight improvement can be noted above the average for the last three years. The
m some lines, the most recent cases being in the government report also shows that production
Products used by the paper-box trade, box board and shipments are about 40 per cent less than
and cover paper. One dealer reports a material they were a year ago.
Prices are steadier than they have been for
]ncrease in orders for glazed and other papers
used in box-making, and a large manufacturer some months, but the general level is still falling.
°f box board has recently increased plant opera- Dealers are constantly shading their prices, and
tlQns. Some distributors report a better demand a wide variation is always found in quotations on
for book paper. As a rule, however, the printing a particular grade— a situation that makes the
business is dull and purchases of paper by mem market uncertain and discourages future buying.
bers of this trade are at a minimum. Paper Wrapping paper was reduced on some grades
dealers are inclined to attribute present inactivity during the month, and cuts in book paper, card
ln part to the failure of printers to reduce their board, and newsprint were announced at various
charges, which are still so high as to discourage times. Raw material prices also fell. Chemical
fbe placing of many printing contracts that pulp was reduced, and there was no trading worth

BUSINESS

AND

FINANCIAL

noting in scrap paper and rags. On the other
hand, ground wood is in a much better position,
as its production has been curtailed and the sup
ply of it for sale is limited.
Foreign competition is now a disconcerting
factor in the paper market. Scandinavian and
particularly Finnish papers have been sold here
recently at prices below the quotations of do
mestic houses. Government statistics show a
marked reduction in imports of newsprint in
May and June as compared with the same
months last year, but imports of wrapping and
book papers have increased remarkably within
the period, whereas exports of these grades have
fallen off considerably. Foreign pulp has also
entered the domestic market and is offering severe
competition to American manufacturers, who
are still making pulp from high-priced wood. It
is quite generally admitted, however, that do
mestic production of pulp and of some grades of
paper is not sufficient to supply the normal de
mand of this country and that imports are there
fore necessary. Also there is some uncertainty
in regard to imported products because of the
possibility of increased duties, and this makes
dealers hesitant about placing substantial orders
with foreign manufacturers.
Collections with the paper dealers are not satis
factory, particularly in respect to accounts
against printers. Manufacturers report pay
ments to be fair.

PAPER BOXES
HE same spotty demand that has been
experienced by the paper-box trade for ten
months continues to be a characteristic of the
market. Those manufacturers whose sales were
encouraging in June report a falling off in July,
but a better tone seems to prevail this month,
and in some cases sales have increased. A manu
facturer of boxes for druggists’ supplies reports
that jobbers are now buying in fair quantities,
and the demand from the confectionery trade
shows improvement. This may be due not so
much to increased sales of candy as to depletion
of stocks by confectioners, who, as a group, last
fall bought boxes far beyond their needs. Sales
of corrugated boxes also have increased in volume

CONDITIONS

recently, and, though they are still small as
compared with last year, the number of boxes
sold exceeds that in corresponding periods ol
1916 and 1917.
Orders are still small, and there is no tendency
to buy for future requirements.
Paper-box
manufacturers no longer keep on hand stocks
of boxes required by certain customers, in anti
cipation of future orders. This practice was not
general throughout the trade, but it was followed
by some. It is being abandoned now partly be
cause of the cessation of future buying and be
cause of the space and expense required to carry
these stocks, but largely because many customers
are changing their specifications. Therefore
operations are now necessary only when orders
are to be filled, and it is estimated that plants
on the average are still running at less than 50
per cent of capacity. Owing to the long period
over which these reduced operations have ex
tended, many of the plant organizations have
been seriously disorganized. For this reason,
it is thought by some that the coming of a
normal demand would find the trade hardly in
a condition to handle the business and that
prices would therefore go up.
Competition continues to be severe, and
consequently prices are marked down, in most
cases to the lowest possible figure allowed bv
prevailing costs. In fact, manufacturers complain
that under the present small-scale production,
with little change in overhead expenses, the
prices received allow for no profit. Nevertheless,
prices for boxes are still higher than in 1918It is claimed, however, that costs are proportion
ately greater. For example, in the Philadelphia
factories there have been few if any wage cuts,
and as employers are quite generally agreed that
lower wages would be detrimental to the business,
reductions will be avoided unless competition
makes them compulsory. In the smaller towns
many firms are paying less to their employees
than they did last year. The lowest hourly wage
reported for unskilled labor was 16 cents, P alCl
to females. Other rates ranged up to 40 centsBox board fell in price during July to as 1°^
as $26, but has been firmer in August. S o m e
reports have been received of a recent rise to
Many manufacturers have taken advantage 0

BUSINESS

AND

FINANCIAL

the low prices and have bought a large supply
of board for future use. Others think that the
price will not rise high enough within the near
future to make the expense of carrying large
stocks worth while. Their belief is based on the
present low price, on the abundant available
supplies of waste paper from which board is
made, and on the very fact that other manu
facturers have large stocks of board on hand,
which they will use in case the price should rise.
No change has taken place in the matter of
collections. They are still described as being
from poor to fair.

FURNITURE
HE manufacture of furniture has participated
in the general decline of business, and as yet
no decided improvement has taken place. There
has been a temporary quickening of demand
during the past month, attributable, no doubt, to
the August furniture sales; but the orders received
were for immediate delivery and for small quan
tities only. Practically no orders are being re
ceived for future shipment. The slump in building
operations has affected the furniture business to
a great extent, and this, coupled with the lack
of confidence in prices, is making recovery slow.
As a result of these conditions, production
has dropped to from 60 to 33
per cent of ca
pacity, although a few factories have been running at from 80 to 90 per cent of capacity. Where
operations have been greatly reduced a steady
decrease in stocks is reported, but it is generally
conceded that they are still sufficiently large to
Permit of prompt shipment of all orders. Prices
average about 25 per cent lower than the highest
Quotations of 1920, much of this reduction having
taken place since January 1. With one or two
exceptions no further cuts were made during
July or the early part of August.
No difficulty has been encountered in obtainlng labor. Manufacturers are able to secure all
the workers needed at wages 10 to 20 per cent
lower than last year, although a few firms report
that they have not reduced wages. The present
wage rates for unskilled labor range from 30 cents
to 45 cents per hour.
Collections in this industry have been fair.

CONDITIONS

Some customers have been taking the time limit
rather than discount their bills, but there have
been few actual losses.

OFFICE APPLIAN CES
PER CE PTIB LE increase in sales during
July and August is reported by manu
facturers and distributors of office appliances.
The reasons given for this activity vary. Some
firms, desiring to economize in every way possible,
are installing mechanical devices and thereby
reducing office forces. On the other hand, the
industries that have more or less passed through
the period of readjustment are preparing for
better business by ordering additional equipment.
The orders placed are not large, but they are of
better size than they were two months ago.
Distributors of office appliances on the whole
are optimistic, as this increase in activity is
occurring in what is usually a dull season.
Stocks in all instances are adequate to meet
present demand.
No such drastic price reductions have been
made in office appliances as have been made in
most other commodities. An average decline
of from 10 to 20 per cent from the peak has taken
place, the greater part of this since January 1.
Prices of filing cabinets and filing equipment
have gone lower than those of other lines. This
is a reflection of the cut in steel and in paper,
which are the principal materials from which the
files and supplies are manufactured. Type
writers, adding and accounting machines remain
stationary in price, except that one firm has just
made a reduction of 10 per cent on writing and
accounting machines,— a drop that brings their
prices almost to the pre-war level.
With one or two exceptions collections are
said to be fair and good.

WHOLESALE GROCERIES

HIS month completes the first year of our
wholesale grocery reporting service and we
now have figures showing the trend of the grocery
market for two years. It will be seen from the
accompanying chart that except for slight re
actions in December and February, sales in-

B U S I N E S S

A N D

F I N A N C I A L

W h olesale Grocery Tr a d e
Sales,Accounts,andPrices
T hirty-eight Firms

Aug-1919-A l#I92i
INDEX

Minion?
OF

DOLLARS

500
/ A
r i \ '
/\ / /
\\i/ j f
/ A
1 A\
/ ' '
V v\
/
/
\\
/

\
\ V

400

IA/

200

*•

Ke y ----- Net S ales
. — A ccounts O utstanding
•••-.W holesale P rices-Index Number

1919

1920

500

100

1921

creased from August, 1919, to June, 1920, at
which time they reached the maximum. There
was a small decrease in July and a very radical
one in August, followed by improvement in Sep
tember, and then by a gradual decline until
March of this year. The volume of sales fell off
again in April and has fluctuated since that time.
Collections were good throughout the first twelve
months of the reporting service, and the ratio of
outstanding accounts to sales averaged only 87.2
for those months. During the last year, how
ever, accounts outstanding at the end of the
month usually have exceeded net sales for the
same month, and the ratio has averaged 101.6.
An interesting relation is shown between the
fluctuations in the volume of sales and the rise
and fall of food prices for the same period. It
will be noted from the chart that the decline in
prices began in May, 1920, whereas sales con
tinued to increase until June, and in July did not
fall to as great an extent as prices. This may be
largely attributed to the sugar situation. Sugar

C O N D I T I O N S

is probably the most important article of sale to
the wholesale grocer, and during the early sum
mer of 1920 that commodity was in great de
mand, and the price soared above all previous
known levels. Sugar consumers, fearing a short
age, bought all they could secure and stored it
away. But on August 12, the price began to de
cline and within 30 days was cut in half. Sugar
sales fell off and consumers began to use their
surplus stocks. This situation no doubt played a
large part in furthering the increase of sales in
June, in retarding the July decrease, and in ac
celerating the abnormal decline that occurred in
August. Also the great disparity between sales
for the past few months and those of the corre
sponding months last year is thereby largely ac
counted for. In the future, this difference should
not be so marked.
Sales during July were slightly below those for
June, which can no doubt be attributed to a
seasonal dulness. The demand in August has
shown no material improvement, but because of
greater firmness in prices and because the market
is less uneven than it has been for some months,
there is a much better feeling among the report
ing firms.
Prices are stronger, and, although some com
modities are still falling, many staples such as
sugar, potatoes, dried fruits and canned goods
have advanced. Various index numbers show
that food products, as a class, have either risen
slightly in price or remained steady all summer.
The sugar situation is much better than it was,
and although the increase in price has not been
great, the rapid decline, which continued from
early April until July, has ceased, purchasers are
less hesitant about buying, and the general tone
of the market indicates more confidence.
Collections are not improving in general. The
ratio of outstanding accounts to sales during
July rose to over 100 per cent and several firms
still report collections to be bad. But a greater
number of good reports were received this month
than last.
F lo ur

The flour market was rather active in the mid
dle o f July, in sympathy with higher quotations

BUSINESS

AND

FINANCIAL

on wheat, but since the first of August there has
been little buying, and the price has again fallen.
The general level of prices on flour is about onethird below that of August of last year, and is
40 per cent below the maximum, which was at
tained in May, 1920. Quotations have not been
steady for some months. They reached their
minimum last May and have been gradually
rising, with frequent fluctuations, since that time.
Millers in this district report that their stocks on
hand are normal. The export demand, which is
an important factor in the market, has been par
ticularly dull recently.
T

P roduce M

arket

Fruits and vegetables have been entering the
Philadelphia market in large quantities and have
sold at good average prices. The midsummer
prices were below those of last year in nearly all
cases, but they compare favorably with those of
previous seasons. Large shipments of Alberta
peaches were made during July from Georgia and
other southern states, and high prices were re
ceived for them; but the southern crop is ex
hausted, and as eastern fruit was almost entirely
destroyed by frosts, there are now few peaches
°n the market. Watermelons and cantaloupes
both brought satisfactory prices in July but quo
tations have been weaker this month. Delaware
and Maryland cantaloupes are largely supplying
the markets at present, and are selling at from
$r-5° to $2 a crate.
The price of potatoes has doubled on some
§rades within the last month. New Jersey
Cobblers rose from 50 cents per five-eighths
bushel basket on July 15 to $1.10 on August 15,
and Virginia Cobblers from $3.50 to $5.50 per
barrel. During the same period last year VirSnfia potatoes fell from $9.50 to $4.25, so that
this year’s prices now exceed those of the same
^ate last season, though in July they were only a
httle over a third of the quotations of a twelve
month before. Butter and eggs have also been
flnite active during the past month. The former,
simulated by heavy consumption and storage
demand and by active speculative interest
Caused by lighter production and poor quality,
r°se about 15 cents in nine weeks without a re

CONDITIONS

cession, and on August 2 reached a new high
level for the season. A slight decline since that
date is attributed to cooler weather and a lighter
demand for cream and unsalted butter by the
ice-cream trade. Cheese and egg prices followed
the same general tendencies.
Canned G

oods

During the spring and early summer, the
canned goods market was depressed— prices were
falling, stocks on hand were excessive, and the
prospects for the future wrere anything but en
couraging. This situation has changed within
the last six weeks, and trading in canned goods
has been much more active. One cause of this
was the poorer condition of crops, due to recent
dry weather. But the most important factor is
the voluntary cut in production by both farmers
and canners.
A large part of the 1920 pack remains unsold
and is being carried by canners, jobbers, and re
tailers. The presence of these large stocks on
the shelves, with the new season fast approaching,
naturally tended to depress prices. Canners,
realizing the gravity of the situation, determined
to reduce the new pack materially and refused
to enter into contracts with farmers for the use
of crops. Consequently, the latter planted a
smaller acreage of vegetables than usual. Then
late frosts practically destroyed the fruit crops,
and the June drought damaged what few vege
tables were planted. Many packers, adhering
to their announced purpose, are not opening their
canneries at all, and others are planning to oper
ate on a reduced basis. As a result, the 1921
pack promises to be small, and last month dealers
began a rush to secure a sufficient supply of last
year’s carry-over to meet their demands.
The position of the canning industry, as a
whole, is better than it was in August, 1920. At
that time, the carry-over was negligible, can
neries were operating, the demand had been
good to date, and prices were high. On the other
hand, canners had contracted with farmers for
their crops at maximum figures, whereas the
market prices for farm products were falling
rapidly, the prospective pack was large, costs
were high, and all indications pointed to a de-

BUSINESS

AND

FINANCIAL

CONDITIONS

dine in prices, which came soon after. The re
sult was that the output was held or sold at a
loss. This year, the stocks on hand, to be sure,
are large, and prices are relatively low, but the
new pack will be small, raw products are being
bought for less money, other costs are much lower,
and prices are going up. Therefore canners are
expecting a profit on this year’s production.
The rise in prices, which began in July, has
been particularly strong in the case of tomatoes.
No. 2 canned tomatoes, quoted as low as 85
cents per dozen on July 20, have been sold in
carload lots since August 1 at over $1, and No.
3s rose from $1.15 to $1.40. This year’s low
prices for these grades were 70 cents and Si re
spectively. California fruits are also selling well,
as the short fruit crop will cut down the volume
of home canning. Apricots rose from $1.75 on
July 20 to $2.io on August 18. Canned salmon
has been another feature in the market. The
output of a certain grade of salmon has been

strikes in the building trades in Philadelphia and
other large cities. Indeed, reports indicate that
the total value of new permits issued has actually
declined. Construction of business and indus
trial structures is almost negligible, and prac
tically the only large operations under way are
public buildings such as schools and court houses.
A fairly large volume of street and road building
and repair work is being done, and this has in
creased somewhat since last month. The bulk of
the present activity, however, is confined to in
expensive repair jobs and alterations and to the
construction of garages and dwellings.
The decrease in building activity is illustrated
by the accompanying table, which shows the
number of permits and the estimated costs of
construction for the months of June and July in
the years 1920 and 1921 in the fourteen largest
cities of the distric t.

WHOLESALE GROCERY TRADE

Allentown.. .
53 3 177,000
46 3 64,475
68 3 207,968
59,717
Altoona........
144
149,043 184
73
243,947
Atlantic City 200
159,115
170,887 237 1,096,770
65
471,758
Camden . . . .
82
148,509 114
96
183,507
45,720
Harrisburg. .
62
290,170
27
45
426,395
60,38S
Lancaster. . .
92
222,360
20
33
106,795
Philadelphia. 1,277 3,824,565 1,407 4,587,395 1,056 4,727,420
422,350
Reading . . . .
224
177,950 278
297,250 213
Scranton. . . .
54
136,070
67 1,114,453
64
206,019
Trenton . . . .
149,731 116 235,960
127
250,360 134
72,478
Wilkes-Barre
153,225
66
77
94,975
62
57,580
Williamsport
19
50
78,420
63,945
36
192,548
Wilmington..
84
86
77,200
172,640 116
119,803
York............
89
132,437 113
38,302
68

No. o f firms reporting— 18

July 1921
July 1921
compared to compared to
June 1921
July 1920

Net sales during month.............................. - 2 . 6 %
Accounts outstanding at end of month. . . . + 5 .1 %
Ratio of accounts outstanding to sales:
July,
1921.........................................
June,
1921.........................................
May,
1921.........................................
April,
1921.........................................
March, 1921...........................................
Feb.,
1921.........................................

— 44.9%
—36.6%

102.6%
96.5%
103.7%
102.3%
90.8%
106.3%

pooled by a number of western packers, and they
are demanding $1.15 a dozen for it, f. o. b.
Seattle. The price on this grade in New York
on July 20 was 90 cents and on August 17 was
$1.10. Other canned products have not risen
to so great an extent, but the general demand is
quite steady, and buying for the future is more
frequent than it was a few weeks ago.
Collections in the canning industry are re
ported to be good.
BU ILDING M A T E R IA L S
HE slackness in building which has prevailed
during the present year apparently remains
unbroken in spite of the virtual settlement of the

C it ie s

July, 1921
Num- Estimated
her
cost

June, 1921
Num Estimated
ber
cost

July, 1920
Num- Estimated
ber
cost

Totals. . . . 2,599 35,875,671 2,874 37,875,639 2,051 37,916,294

During the first seven months of the present
year, in the above cities, a total of 17,494 permits
was issued at an estimated cost of $36,644,547’
or an average cost for each permit of $2io°During the same period of the year 1920 only
15,185 permits were issued in these cities, but the
average cost for each permit was $4470, or mote
than twice that for the present year. This ten
dency to build smaller structures is perhaps moi'e
pronounced in the Philadelphia district than in
other sections of the country.
The present inactivity in the industry as a
whole is largely due to the lack of investment
building, i. e., the construction of office buildings
apartment houses and the like, which are e*'

BUSINESS

AND

FINANCIAL

pected to yield a long term profit to the owner.
High as rents are at the present time they are
not high enough to justify investment in build
ings at their present cost. Either costs must be
so far reduced as to ensure a satisfactory return
on the investment, or rents must rise still further.
The deadlock which now exists between these
two factors— rents and building costs— is prob
ably the most important cause of the present
dulness in the building trades.
G

lass

Considering the season of the year and the
lack of activity in building, the demand for plate
and window glass has been of fair size during
July and August. Practically all of the mer
chandise sold is for use in alterations or small
construction jobs, as no large building operations
have been attempted. Since glass is one of the
last commodities used in building, future de
mand for it can be roughly estimated by present
construction operations. The present building
season, however, is fast approaching an end with
out important developments, and therefore little
material improvement in the plate and window
glass branches of the industry is expected this
Year. The same may be said of wire glass, though
this is in a better position than it was earlier in
the year. Demand for glass from industrial firms
aud from furniture manufacturers is still very
small.
Production of glass has been reduced to a ma
terial extent, and operations in plate glass fac
tories are not more than 50 per cent of normal,
"ottle factories are closed for the month of
August under agreement with their employees,
finished stocks of glass in general are normal
and are not accumulating. Evidently consumptmn has not been curtailed to as great an extent
as production, for the imports of glass during the
year ending June 30, 1921, were 470 per cent
t^ore than for the twelve months ending June,
*920, and the excess over 1919 was even greater.
Window glass led the list in amount imported
and also in ratio of increase, which was 1100 per
ccnt. The cost of manufacture abroad is lower
man here, and the foreign producers are anxious
to recover their lost trade. For this reason, glass

CONDITIONS

manufacturers are favoring increased tariff duties
on their products.
This large volume of imports has been, and no
doubt will continue to be, a factor in the price
situation. Prices are now about 50 per cent be
low the peak of last year. The decline has
slackened recently, as the price level is approach
ing nearer to the costs of production, which have
not descended so rapidly. Freight is an impor
tant item with glass manufacturers, particularly
in its adding to the cost of coal and other raw
materials. Furthermore, wages have not been
reduced except in some specialized lines. A wage
conference between the pressed and blown glass
manufacturers’ association and their employees’
union, held in Atlantic City in the latter part of
July, resulted in no satisfactory agreement, and
at this writing the question of wages is still under
discussion.
Collections are reported by vari ous firms as
being either fair or good.
B

u il d in g

r ic k

Demand for building brick has been light dur
ing the summer, and, as yet, has shown no signs
of improvement. Sales are small, since no large
operations are under construction, and brick is
used only on small jobs or in repair work. Pro
duction has been reduced further during the last
month and, in general, will not average over 40
per cent of capacity. Such reductions were found
to be necessary in order to prevent undue accu
mulation of finished stocks, which are still rather
large, considering that no great activity is antici
pated this year.
Prices have been further shaded and are now
less than two-thirds of last year’s maximum.
Certain grades of building brick that sold last
year at $20, $25 and $28 are now $13, $17 and
$20 respectively. The pre-war quotations on
these grades were, in the above order, $7, $8 and
3 i 2. An important factor in keeping prices from
reaching these former low levels is the failure of
freight rates to come down. The rates on coal
are 50 per cent higher than the pre-war cost of a
ton of coal with the freight charges included.
Wages also are still much higher than in 1914,
although they are lower than they were last year.

BUSINESS

AND

FINANCIAL

One Philadelphia manufacturer now pays com
mon laborers $3.25 for a ten-hour day, as com
pared with $4.75 last year and $1.75 before the
war.
Collections are only fair, and on some accounts
are slow.
R e f r a c t o r ie s

Fire-brick is not selling even as well as building
brick, and the decline of demand in this branch
of the trade which began some months ago
has continued. Furthermore, no indications of
improvement are to be noted. Many manu
facturers have found it necessary to close down
entirely, and others are operating on a less
than 25 per cent basis. Stocks in general are
large, but as a result of curtailed production
are being slowly liquidated.
Prices of refractories suffered further reduc
tions about August 1 of from 6 to 10 per cent
and are now 25 per cent below the quotations of
January 1. Labor costs have been reduced, and
the hourly wage for unskilled labor, reported by
manufacturers outside of Philadelphia, is less
than 30 cents.
Collections are fair and have shown no change
since last month.
L umber

July was the dullest month for the lumber
business, in point of production and sale, since
early in the year. Statistics published by the
National Lumber Manufacturers’ Association
show that the total of lumber cut and the totals
of orders and shipments, of all members through
out the country, were smaller in July than in
either May or June, and that the ratio of orders
and shipments to the lumber cut also declined,
which would indicate an increase in stocks. As
the demand for the higher grades of lumber is
good, some mills make it a practice to continue
production, sell the better stuff, and store the
remainder. Consequently, the stocks of low
grade lumber are rather large, particularly with
the manufacturers. Dealers have fairly well dis
posed of surplus supplies and are preventing
undue accumulations by purchasing only in small
lots for immediate delivery.

CONDITIONS

There is now a better feeling throughout the
industry, as inquiries have been stimulated by
the revival in building activity which is expected
to result from the partial settlement of the build
ing trades strike on August 1. Almost all of the
lumber now sold is for use in general building
construction, the demand for industrial purposes
and shipbuilding and from the railroads and the
furniture trade being practically nil. Wooden
box manufacturers, however, have been fairly
active.
Lumber prices have been reduced to a greater
extent than those of other building materials,
but they are still nearly 100 per cent above the
pre-war figures. Nor have they come down as
much as the general price level. Some grades
have probably reached bottom, but not all. Com
petition is serving to bring prices down, but for
some months now the rate of decline has been
rather slow.
Labor has caused no especial difficulty in the
lumber trade proper. The early deflation of
prices in the industry was made possible largely
by extensive wage reductions in southern mills.
Labor seems to be quite plentiful throughout the
Third Federal Reserve District, and the hourly
wage for unskilled labor has, in general, suffered
reductions. One firm in the northern part of the
state reports that it is paying $1.75 for a tenhour day.
Collections are generally said to be fair.
P aint

The event of outstanding importance in the
paint industry during the last month was the
general revision of price lists on August i>
whereby quotations were reduced about 17 per
cent on nearly all grades. The price of readymixed paint was cut 50 cents a gallon and is now
$2.50, as compared with $4 a year ago. This
reduction was made first by western manufac
turers, the eastern producers announcing similar
cuts soon afterward. The price of white lead
came down at the same time three-fourths of a
cent a pound on all grades. Dry lead is noW
quoted at 7F4 cents, and lead in oils at 12U
cents a pound. Linseed oil has been fairly steady
for some time, fluctuating slightly between 75

BUSINESS

AND

FINANCIAL

CONDITIONS

and 80 cents a gallon, to which level it arose a though on some commodities there were slight
few months ago, after a sensational decline from decreases. Brass goods are about 30 per cent
lower than last year, and some cast-iron products
$2.25, its peak price, to as low as 51 cents.
The general store demand for paints continues are as much as 60 per cent lower. Labor costs
to be almost normal; but the normal demand at have been reduced, but not to so great an extent
this time of the year is only a slight one. Con as the prices of finished goods.
sumption of paint by manufacturing firms, rail
Collections are characterized as fair by all re
roads, and shipbuilding plants, and in new con porting firms.
struction work, is still at a minimum, and any
H ardw are
dullness in the industry, beyond that due merely
to a seasonal lack of orders, can be attributed
The volume of hardware sales for August de
largely to inactivity in these fields, for it is from
clined
materially, and buyers show continued
these sources that probably 40 per cent of the
hesitancy
in placing orders for fall delivery. In
demand for paint originates. Operations con
stability
of
prices and expectations of further re
tinue on a reduced basis and average about 75
ductions
have
prevented purchasers from placing
per cent of capacity. Every possible effort is
many
future
contracts.
Although demand for
made to prevent the accumulation of finished
stocks, and some manufacturers report that sup most lines, especially mill supplies and builders’
plies are low. But the majority report supplies hardware, is very poor, retail merchants report a
to be normal. Stocks of raw materials are greatly fair call for seasonable and sporting goods.
The following table, prepared from reports
reduced.
Few wage reductions have, as yet, been made j rendered by typical hardware firms in this dis
m the paint industry, but labor costs are some trict, is fairly representative of the present situ
what lower because of increased efficiency on the ation. It is noticeable that both net sales and
Part of employees. Undesirables have been accounts outstanding in July show a decided de
eliminated and a better grade of workers has crease as compared with the previous month and
with the same month of last year. That collecbeen secured.
Collections are generally considered to be ; tions are becoming less satisfactory is evident
; from the fact that the reduction in accounts outfair.
| standing was not as large as that in net sales.
P l u m b in g S u p p l ie s
The ratio between these items in July was over
I 20 per cent higher than it was in June.
Manufacturers of plumbing supplies report
WHOLESALE HARDWARE TRADE
that small orders for immediate delivery have
recently shown a slight increase in number, but
July 1921
July 1921
No. o f reporting firms—25
compared to compared to
not in size. Very few orders for the future have
July 1920
June 1921
been placed, but those received are for larger
Net sales during month............................ — 17.8% - 3 8 . 2 %
*°ts than are the spot sales. The little improve
Accounts outstanding at end of month. . . . - 7.2% — 31.1%
ment that has been felt has not yet been sufficient
Ratio of accounts outstanding to sales:
to make increased operations necessary. In fact,
1921..................... ................... 189.4%
July,
June, 1921..................... ................... 167.5%
stocks are rather large for the present light de
May, 1921..................... ................... 169.4%
mand, and production has been more than suf
April, 1921..................... ................... 155.2%
March, 1921..................... ................... 172.2%
ficient to take care of the business offered.
Feb., 1921..................... ................... 213.3%
Brices were fairly steady during the past month

This business report will be sent regularly without charge to any address upon request

BUSINESS

AND

FINANCIAL

CHARGES TO DEPOSITORS’ ACCOUNTS
other than banks’ or bankers’, as reported by Clearing Houses

CONDITIONS

RESOURCE AND LIABILITY ITEMS
of Member Banks
in Philadelphia, Camden, Scranton and Wilmington
(000’s omitted)
At the close of business

Aug. 17, 1921 July 13, 1921 Aug. 18, 1920
Altoona............ 3 2,872,000
4,060,000
Chester.............
6,700,000
Harrisburg.......
4,267,000
Johnstown.......
4,173,000
Lancaster.........
Philadelphia.... 273,046,000
7,150,000
Reading............
12,598,000
Scranton..........
9,975,000
Trenton............
7,991,000
Wilkes-Barre...
3,737,000
Williamsport...
6,653,000
Wilmington---3,323,000
York.................

32,631,000
33,209,000
5,950,000
4,078,000
6,853,000
2,067,000
4,650,000
4,962,000
4,390,000
5,522,000
289,668,000 330,977,000
3,481,000
4,563,000*
12,238,000
17,474,000
11,936,000
10,552,000
8,578,000
8,879,000
4,295,000
4,675,000
7,132,000
8,060,000
3,717,000
4,249,000

Totals........... 3346,545,000 3369,471,000 3405,315,000
♦Smaller number of banks reporting.

Aug. 17, 1921

Month ago

Year ago

3204,829
3,010

3204,415
3,753

3170,625
473

Total reserves.........
Discounts— secured by
U. S. securities........
Discounts— all other. .
Purchased bills...........
U. S. securities............

3207,839

3208,168

3171,098

85,949
29,371
1,887
27,377

85,638
33,197
1,492
28,379

136,899
40,865
12,489
37,591

Total earning assets.
Uncollected items.......
All other resources.. . .

3144,584
49,263
1,612

3148,706
48,626
1,502

3227,844
69,619
2,304

3403,298

3407,002

3470,865

Aug. 17,192 1

Month ago

Year ago

Total deposits.........
Federal Reserve notes
Federal Reserve Bank
notes.........................
Deferred availability
items.........................
All other liabilities___
T o t a l L i a b i l i t i e s ..

Jan. 7,1921

3 49,607

348,623

337,934

180,597
340,243

192,948
343,188

198,983
378,718

46,212
6,208
8,964

46,993
6,330
9,271

45,283
11,342

29,307

7,976

12,447

155,509

157,711

154,363 I

3816,647
611,082
41,470

3813.040
625,106
41,316

3839,070 |
672,893
36,976 1

74,022

76,504

110,036 |

Percentage increase or
decrease cornpared with
Previous
month

RESOURCES

Capital paid in............
Surplus.........................
Government deposits..
Member banks — reserve account...........
Other deposits.............

July 13,1921

August IS, 1921

Gold reserves..............
Legal tender, etc.........

LIABILITIES

Total loans, discounts
and investments.. . .
Demand deposits................
Time deposits.....................
Borrowings from Federal
Reserve Bank...................

Aug. 10, 1921

BUSINESS INDICATORS

STATEMENT
Federal Reserve Bank of Philadelphia
(000’s omitted)

T otal R esou rces.

Loans and discounts:
Secured by U. S. securities
Secured by other stocks
and bonds.....................
All other............................
Investments:
United States bonds........
U. S. Victory notes..........
U. S. Treasury notes.. . .
U. S. certificates of indebtedness.....................
Other bonds, stocks and
securities.......................

38,656
17,564
847

38,613
17,564
3,674

38,312
13,069
1,106

103,337
1,320

99,208
1,388

107,531
3,114

3105,504
216,543

3104,270
219,130

3111,751
262,309

7,320

8,946

19,835

43,762
3,949

44,883
3,596

53,127
2,462

3403,298

3407,002

3470,865

Philadelphia banks:
Loans....................... 3665.553.000
578,996,000
Deposits..................
Ratio loans to de
posits....................
115%
Federal Reserve Bank:
Discounts and col
lateral loans........ 3114.923.000
Reserve ratio..........
„ 64.9%
90-day discount rate
Commercial paper. ..
6K %

-1 .1 %
-4 .4 %
in .2% *

Year ago

-1 1 .7 %
-1 5 .0 %
111.0%*

-3 6 .4 %
-2 .2 %
49.%*
65.4%*
6.%*
5£%*
61-61%*
8 .% U
Percentage increase or
decrease co mpared with

July, 1921

Bank clearings:
In Philadelphia. . . 31,665,000,000
Elsewhere in dis
trict....................
151,374,000

Previous
month

Year ago

-5 .9 %

— 24.2%

-3 .3 %

— 22.5% 1

Total.................. 31,816,374,000 - 5 . 7 %
Building permits,
Philadelphia..........
3,824,565 — 16.6%
Post office receipts,
Philadelphia..........
1,068,577 - 8 . 0 %
Commercial failures in
71*
district (per Dun’s)
72
Commodity index
numbers:
Annalist (food
+ 8 .2 %
174.293
prices only)........
+ 2.4 %
163.677
Dun’s.....................
Bradstreet’s...........
11.0576
+ 3.1%
♦Actual figure

— 24.0%
— 19.1%
— 16.0%

!
|

29* |

— 37.9%
— 35.1%
-4 1 .3 %

Full text of Business Review (Federal Reserve Bank of Philadelphia) : September 1, 1921

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