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MONTHLY REVIEW of Credit and Business Conditions S e c o n d Federal Reserve Agent F e d e r a l D is tr ic t Federal Reserve Bank, New York Business Conditions in the United States MPLOYMENT at industrial establishments in creased in February and the output of basic commodities was slightly larger. Distribution both at wholesale and retail continued large; wholesale prices were somewhat higher; and there was a further increase in the volume of borrowing for commercial purposes. P roduction The Federal Reserve Board’s index of production in basic industries, adjusted to allow for length of month and other seasonal variations, increased less than 1 per cent, in February. Production of pig iron, steel ingots, and flour increased while mill consumption of cotton and production of cement and lumber declined. Factory emploj^ment advanced 1 per cent, in February following successive decreases during the three preceding months. Increases in working forces were reported by most in dustries and were particularly large at iron and steel plants, automobile factories, and textile finishing estab lishments. Fuller employment through reduction of part time work is indicated by an increase of over 5 per cent, in average weekly earnings. Building activity was slightly less than in January though contracts awarded were 7 per cent, larger than a year ago. E Index of 22 Basic Commodities corrected for seasonal variation (1919 = 100 Per cent. Latest figure, February) R e s e r v e April l f 1924 T rade Railroad shipments in February were in greater daily volume than in January and car loadings of practically all important commodities were larger than a year ago. The daily average volume of wholesale business increased about 5 per cent, in February but was slightly smaller than a year ago. Sales of meat, dry goods, and hardware were larger than in February 1923, while sales of shoes were smaller. Department store sales in February aver aged about the same daily volume as in January and about 8 per cent, more than a year ago, while merchan dise stocks at these stores at the end of the month were 6 per cent, above last year’s level. Business of mail order houses and chain stores also showed increased activity in comparison with January. P rices Wholesale prices as measured by the index of the Bureau of Labor Statistics advanced slightly in February. Prices of fuel, metals, and building materials increased, while prices of farm products, clothing, and chemicals declined. During the first two weeks in March price declines occurred in wheat, cotton, silk, hides, and rubber, and price advances in hogs, copper, and crude petroleum. MONTHLY REVIEW, APRIL 1, 1924 8IUJON5 OF DOLLARS 4r \ TOTfi V \EARNING/ASSETS u ' , ft i f 'H \ \ DI$CL 3UNT\ 3VVV Ai . . ACcEFfANc & JRITIE5 > C 7 c 1919* 19£0 192.1 192,2 192.3 1924 Index of Employment in Manufacturing Industries (1919 Average = 100 Per cent. Latest figure, February) Reserve Bank Credit— Weekly Figures for 12 Federal Reserve Banks (Latest figures, March 19) B ank Credit assets of this bank rose again and on March 26 stood approximately where they were before the 15th. The volume of borrowing for commercial purposes at member banks in leading cities in the early part of March continued the increase which began in the latter part of January, and on March 12 total loans of the reporting banks were higher than at any time since the seasonal peak at the turn of the year and about $275,000,000 higher than a year ago. At the Federal Reserve Banks during the four week period ended March 19, a further decline in the volume of discounts for member banks and of acceptances was offset by an increase in the holdings of United States securities so that total earning assets were at about the same level as in February. Federal Reserve note circulation con tinued to decline while the total money in circulation increased. Easier money conditions were reflected in a slight decline in rates for commercial paper to 4 y 2 per cent, and also in lower rates for bankers acceptances and reduced yields on Treasury certificates. The March offering of $400,000,000 of one year Treasury certificates bearing interest at 4 per cent., as compared with 4 % per cent, on a similar issue sold in December, was over subscribed. B a n k in g C on dition s, in the Second D istrict Banking movements during March centered largely about the usual Government transactions on March 15, when income taxes became payable and large disburse ments were necessary to redeem maturing Treasury cer tificates and pay interest on the public debt. Following an excess of Treasury disbursements over receipts on March 15, the total earning assets of the Federal Re serve Bank of New York, exclusive of a temporary loan to the Treasury, declined $64,000,000, and at $111,000,000 on March 21 were the lowest since 1917. As the collection of tax checks was completed and funds were withdrawn from this district, the total earning There was a further increase during March in the requirements of trade and industry for credit, and the loans of reporting member banks in this district made largely for commercial purposes rose $70,000,000 to a point $150,000,000, or 6 per cent, above the level at the first of the year. Loans on stocks and bonds also in creased, so that notwithstanding a moderate decrease in security investments, total loans and investments rose about $100,000,000 and were slightly higher than at any time since early in 1923. C h anges in M e m b e r B a n k D e p o sits The report of condition of all member banks on De cember 31, published in March, shows comparatively little credit expansion during the year, despite the fur ther inflow of gold at an even more rapid rate than in 1922. A total increase in demand, time, and Govern ment deposits, amounting to $1,130,000,000, or 5 per cent., was less than the normal rate of growth of bank deposits during most of the past fifty years, and was much lower than the increase shown in 1922, which was nearly 3 billions, or 15 per cent. By far the greater part of the total increase in de posits was in time deposits, which rose over a billion. Although business generally was at a high level during the year, demand deposits, which represent more closely active mercantile credit, increased less than $350,000,000, compared with an increase of over a billion and a half in 1922. Government deposits declined $225,000,000. As time deposits, owing to their slower rate of turnover, tend to have less effect upon prices than demand de posits, the high proportion of time deposits in the increase of the past year undoubtedly has been a con tributing factor in the maintenance of general price stability. FEDERAL RESERVE AGENT AT NEW YORK The accompanying diagram compares changes in de mand and time deposits of all member banks, classified by country banks and reserve and central reserve city banks, and indicates a marked increase in the proportion of time to demand deposits in recent years. BILLIONS OF D O LLARS B IL L IO N S OF D O L L A R S Demand and Time Deposits of all Member Banks Money Rates The large excess of government disbursements over receipts in this district on March 15 was followed by a period of marked ease in money and decline in rates to the lowest points in a year or more. Later in the month there was a partial recovery in rates. The prevailing rates for prime commercial paper de clined in the week following the 15th from 4 % per cent, to 4 % per cent., the lowest since early in 1923, and demand for paper became unusually active both in New York City and elsewhere. Reports to this bank from 26 dealers showed an increase of 50 million dollars, to 880 million dollars in the volume of paper outstand ing at the end of February, making a net increase of 112 million dollars since the end of December. The demand for bills increased in March and after the 15th dealers lowered offering rates on maturities up to 90 days from 4-4% per cent, to 3 % -3 % per cent., followed by a recovery of 3% -4 per cent. Dealers’ portfolios showed a substantial reduction from the high points reached in February. The March offering of approximately 400 millions oneyear Treasury certificates at 4 per cent., compared with 4 % per cent, on the one-year issue sold in December, was oversubscribed. Prices of outstanding issues rose sharply after the 15th, but declined again later in the month. In the stock exchange money market unusually heavy offerings of call money after the 15th resulted in a decline in the renewal rate to 3 per cent., the lowest since the summer of 1922, and on the 21st new loans touched 2 % per cent. Time money declined % of 1 per cent, to 4*4-4% per cent. 3 Security Markets Large supplies of available funds and lower money rates were accompanied by activity and strength in the bond market in March. In heavy trading the active Liberty issues rose to new high points since 1922, while the Treasury 4% s at 100 18/32 sold at the highest point ever reached. Representative averages of high grade corporation bonds recovered nearly to the high points reached in January. The volume of new security issues, on the other hand, was unusually small and for the four weeks ended March 22 totaled only about $150,000,000, or less than one-third as much as in the preceding four weeks. This decrease was probably due partly to the exceptionally heavy offerings of February and partly to declines in the prices of outstanding bonds during February and the first days of March. Railroad and public utility issues constituted the major proportion of the issues during the period. Contrasting with strength in the bond market stock prices showed reactionary tendencies in March. In some industrial groups prices declined to new low points for the year. Railroad shares, on the other hand, were steady and slightly higher than a month ago. Foreign Shipments of United States Currency In the M o n t h l y R e v i e w of February 1 detailed figures were given showing shipments of United States currency to and from foreign countries during the eight months from May through December, as reported by member banks in this district which are the principal shippers of currency. The following table gives the figures by months from May through February 1924. The figures indicate larger net shipments in recent months, due chiefly to increased shipments to Europe, and smaller receipts, particularly from Caribbean countries. Total shipments for the ten month period were $41,764,000, against receipts of $25,317,000, leaving net shipments of $16,447,000. In addition to direct shipments banks in this district during the ten months forwarded $18,590,000 to Cuba by wire transfer through the Fed eral Reserve System, including both the Boston and Atlanta Reserve Banks. Of this amount, $3,645,000* was forwarded during the first two months of this year. M onth Shipments Receipts Net Shipments M a y ................... $ 2,341,000 2,568,000 2,824,000 6,161,000 3,723,000 2.109.000 1.821.000 933,000 1.374.000 1.463.000 $ 1,575,000 D ec..................... Jan..................... F eb..................... $ 3,916,000 2,473,000 3,051,000 1,684,000 7,842,000 3.095.000 3.195.000 3.825.000 5.694.000 6.989.000 T o ta l............. $41,764,000 $25,317,000 $21,019,000 Aug.................... Oct..................... Net Receipts $ . . . . 95,000 * 227,666 4,477,666 4,119,666 986,000 1.374.000 2.892.000 4.320.000 5.526.000 $4,572,000 * From March 1 through March 28 transfers totaled $5,600,000. 4 MONTHLY REVIEW, APRIL 1, 1924 Foreign Exchange Interest in the foreign exchange market during the past month centered on the French franc, which con tinued its downward course until March 8, when a new low point of 3.42 cents was reached. Following the announcement, however, of large credits obtained in New York and London, and adoption of a 20 per cent, increase in taxation, and other fiscal reforms, the rate recovered strongly and on March 24 was 5.61. This was the highest in four months, though still about a cent lower than a year ago, shortly after the French entered the Ruhr. Belgian francs, which touched a new low point at 2.96 cents, rallied to 4.50 cents. Sterling con tinued comparatively steady at about $4.29. Changes in other exchanges included sharp declines in Spanish and Japanese rates, both of which reached new low points for recent years. Weakness in pesetas was generally attributed to political conditions in Spain and developments in the Moroccan campaign. A decline of 3 cents in the Japanese yen to 42 cents, on the other hand, followed an increase in February in the import trade balance of Japan to 186,500,000 yen, or the largest ever reported, reflecting chiefly the purchase of recon struction materials. Foreign Trade Exports of merchandise during February declined about $30,000,000 to $367,000,000, the smallest amount since August, while imports totaling $335,000,000 were the largest since May. The net export balance for the month was $32,000,000 compared with $100,000,000 in January and $3,500,000 in February 1923. The decline in exports was due partly to a further seasonal decrease in the shipments of cotton which, how ever, remained approximately 34 per cent, larger than in February a year ago. Exports of wheat and flour showed a further slight decrease to the lowest point since September 1917 and for the eight months ended with February 1924 were 30 per cent, lower than for the eight months ended February 1923. This decline con trasts with an increase of approximately 13 per cent, in Canadian wheat and flour exports during the corre sponding period. Heavier exports by Canada in the past year have accompanied a considerably lower range of prices in that country than in the United States. During January iron and steel exports rose sharply to the largest amount since February 1921, due largely to heavy shipments to Japan for use in reconstruction work. Gold Movement During February about $35,000,000 of gold was im ported, of which over one-half came from England, and substantial amounts from Canada, France, Argentina, and Australia. Gold exports totaled $505,000. For the first two months of this year net gold imports totaled $80,000,000, compared with $31,000,000 in the corresponding period of 1923, $53,000,000 in 1922, and $72,000,000 in 1921. Indexes of Business Activity Nearly all available indexes of distribution and gen eral business activity were higher in February than in January. An expansion in the primary distribution of goods is indicated by marked advances in indexes of freight car loadings, wholesale trade, and imports and exports. Increases were less marked among indexes of retail distribution, which, on the average, continued close to the computed trend. The following table shows the available indexes for recent months and for the peak month of 1923, expressed as percentages of the computed trend with allowance for seasonal variation. (Computed trend of past y e a rs = 1 0 0 Per cent.) 1924 1923 High Point 1923 Dec. Jan. Feb. 103 103 88 88 97 53 160 101 108 105 88 100 62 146 Ill 119 111 101 105 110 120 108 102r 96 103 85 120 105 99 r 99 96 92 r 101 92 95 103 r 96 107 118 96r 101 r 113 117 105 112 104 106 182 100 102 102 103 99 101 155 101 104 101 109 118 104 99 91 166 99 94 Primary Distribution Car loadings, mdse, and misc.................. Car loadings, other................. .................. Wholesale trade, Second D istrict........... E xports......................................................... Im ports......................................................... Grain exports............................................... Panama Canal traffic................................. Apr. Apr. Feb. July M ay M ay July 114 125 116 95 130 143 166 Distribution to Consumer Department store sales, Second District Chain store sales......................................... Mail order sales.. ....................................... Life insurance paid fo r .............................. Amusement receipts................................... Advertising................................................... June M ar. M ay D ec M ay Apr. General Business Activity Bank debits, outside New Y ork C it y ... * “ New York C ity .................. Postal receipts............................................. Electric pow er............................................. Employment, N. Y . State factories........ Business failures......................................... Building permits......................................... M ay Feb. Mar. M ay Apr. N ov. M ar. 96p 118p 64 147 200 r ==Revised. p = Preliminary. Production Production of basic commodities continued generally at a high rate in February and in many industries showed increases over January totals. Taking the two months together, the output of goods exceeded in many cases the high levels of a year ago when business was expanding at a rapid pace. This was particularly true of the automobile industry and of industries supplying materials for building construction. The diagram on the next page compares total production figures for January and February this year with figures for the same two months last year. In the steel industry an increase in the production of steel ingots during February of 181,000 tons, or 5 per cent., was reflected in an advance in this bank’s index, which allows for seasonal changes, from 101 per cent, of the computed trend to 116 per cent, which, with the exception of May, was higher than at any time in 1923. The index of pig iron production advanced from 94 to 105 per cent, of the computed trend. FEDERAL RESERVE AGENT AT NEW YORK 192.3 JAN-FEB. XX) % PRODUCERS GOODS Employment and Wages COPPER CEM EN T An increase of about 1 per cent, in factory employ ment between January 15 and February 15 was re ported both for New York State and for the country as a whole. This was the first increase for the State since October and resulted chiefly from enlarged ac tivities in the clothing, woolen and worsted, iron and steel, and automobile industries, and in sugar refining. The number of employees is now about 2.5 per cent, smaller than a year ago. The average weekly earnings of factory workers in the State declined slightly during the period to $27.73, compared with a substantial increase for the country as a whole, a difference partly accounted for by the widespread observance of the Lincoln Day holiday in New York City, and partly to the importance of the clothing and textile industries in New York State, in which conditions have been relatively quiet. Compared with a year ago, however, weekly earnings in the State show an increase of 7 per cent. During the month several of the larger eastern rail roads announced settlements with their employees pro viding for an increase in wage rates amounting to approximately 5 per cent. | TIN D E L IV E R IE S 1 Z IN C | BITUMINOUS COAL 1 STEEL INGOTS I P IG IR O N m | COTTON CONSUMPTN | S IL K CONSUMPTION I CONSUMERS GOODS AUTOMOBILE TRUCKS H H H H ” PASSENGER ■ B O B HOGS SLAUGHTERED ■ B U S CIGARETTES CALVES slaughter 'd SHEEP CATTLE ■ H O B BBBHH ■ H H H fl - WHEAT FL O U R M H H H ■ ■ ■ ■ TOBACCO CON5UHPT B SUGAR M ELTIN G S H U ■ ■ ■ ■ ANTHRACITE COAL ■ ■ ■ ■ CIGAR CONSUMPT'N ■ B B B B I B 0 0 T 5 & SH O E5 ■ ■ ■ ■ Production of Basic Commodities during January and February of 1924 (In percentages of production in January and February of 1923) While cotton consumption declined 69,000 bales, the index adjusted for seasonal variation was unchanged at 5 per cent, below the computed trend. The following table compares this bank’s indexes of production for re cent months with the high points of last year. (Computed trend of past years =100 Per cent.) 1923 High Point 1923 1924 1924 Dec. Jan. Feb. Producers' Goods C otton consum ption................................................ W oolen mill a ctiv ity * .............................................. Pig i ron ........................................................................ Steel ingots................................................................. Lum ber........................................................................ Cem ent........................................................................ Copper, U. S. mines.................................................. Zinc*............................................................................. Tin deliveries.............................................................. Petroleum .................................................................... Gas and fuel o il......................................................... Leather, sole............................................................... Bituminous coa l......................................................... M ay A pr. M ay M ay Oct. Jan. Aug. M ar. N ov. Aug. Jan. Aug. Apr. 108 120 124 122 137 164 111 85 150 146 112 106 117 82 91 93 84 122 153 104 81 91 131 105 83 89 95 94 94 101 137 177 111 81 91 126 r 109 84 108 95 96p 105 116 Consumers’ Goods Cattle slaughtered..................................................... Calves slaughtered.................................................... Sheep slaughtered..................................................... Hogs slaughtered....................................................... Sugar meltings, U. S. porta..................................... Wheat flour................................................................ Cigars.......................................................................... Cigarettes ................................................................ T o b a cco....................................................................... Gasoline....................................................................... Automobile tires*...................................................... N ewsprint................................................................... Paper, tota l................................................................ Boots and shoes......................................................... Anthracite coa l.......................................................... Automobile, all.......................................................... Automobile, passenger............................................. Automobile, truck.................................................... M ay Oct. M ay Aug. Oct. Mar. Oct. Jan. Jan. Jan. Mar. M ay Feb. Apr. Feb. N ov. Oct. Deo. 118 146 104 149 137 122 95 100 110 123 178 124 119 118 112 161 171 145 90 140 83 109 96 91 79 80 86 119 116 104 90 75 93 151 153 145 106 145 92 113 90 99p 82 99 115 125 144 109 100 79 97 142 139 151 105 148 92 118 123 120p 87 79 1106 =Revised * Preliminary. ■Seasonal variation not allowed for. 167 llO p 72 151 133p Automobile Production and Sales Continuation of heavy production in the automobile industry was indicated by an output of 367,500 pas senger cars and motor trucks in February, or 33 per cent, more than in February a year ago. For the two months of January and February production amounted to 683,600 vehicles, or about 50 per cent, above the com puted line of growth shown by the industry during the past 15 years. The accompanying diagram shows the average monthly production of passenger cars and trucks during the past 13 years and gives also the comparative figures for pro duction in January and February of the past 3 years. I IPASSENGERCARS M MOTORTRUCKS 84p 113 lis 107 92p 109 151 155 137 164 ,, 40 47 ftfin 1911 19ia 1913 J914 1915 1916 1917 I918x 1919 1« Monthly Average l 1921 1922. 1923- Actual Production Monthly Production of Motor Vehicles in the United States (In thousands of cars) Manufacturers and dealers located in this district report that stocks of cars in dealers’ hands are consider 6 MONTHLY REVIEW, APRIL 1, 1924 ably larger than at this time last year, partly due to efforts to avoid a shortage of cars this spring such as occurred last year. Current sales in the East are re ported to be running larger than last year, but in parts of the Central and Far West sales are reported to be lower than a year ago. Makers are said to be watching the market with unusual care and to be prepared to ad just production promptly to meet any change in demand. R a ilw a y E q u ip m e n t P urchases After a period of reduced purchases in the latter half of 1923, buying of railway equipment has shown a con siderable increase accompanying early indications of heavy traffic this year. Department of Commerce re ports show that deliveries of locomotives continued at a high rate through 1923, but were steadily reducing un filled orders until at the end of the year they repre sented only a little more than a month’s work at the current rate of production. In the first two months of 1924 output was reduced and renewed buying appeared, so that the unfilled order record shows an upward turn at the end of February. Freight car orders in February totaling 29,291 were the largest for any month in two years, excepting only March 1923 and April 1922. After April last year orders were small until the end of the year, when buying was resumed, and the total for the four months from November to February inclusive was 50,961 cars. Re newed buying of passenger cars is also indicated by the Railway Age report of 326 ordered during the month of February. Contracts awarded throughout 36 States also showed large increases over a year ago in the New York dis trict, but decreases in the middle Atlantic, Central West, and Northwestern territories. The continued large building totals throughout the winter have reflected partly a movement to spread con struction work over a greater part of the year, which has been particularly favored in this district by weather conditions. Partly because of this the index of build ing computed by this bank, which allows for a normal seasonal variation as well as for changes in the cost of construction, rose in February to a point 10 per cent, above the high level of March 1923. The accompanying diagram shows the movement of this index and com pares with it changes in the index of pig iron produc tion, which is largely affected by building operations. PER CENT. Due both to advances in building materials and wages the cost of construction index computed by this bank advanced to 194 per cent, of the 1913 cost, or about 3 per cent, below the May high point of last year. This index takes no account of changes in the efficiency of labor or extra wage payments above the regular scale. THOUSANDS R e a l E s ta te an d R e n ts Domestic Purchases of Railway Freight) Cars February) (Latest figure B u ild in g Building permits issued in 158 selected cities during February increased 24 per cent, over the January total and were 24 per cent, larger than in February a year ago. In New York City permits reached the highest level since March 1923, but in many sections of the South and West permits were smaller than last year. Real estate operators and builders in New York City report a somewhat reduced demand and occasional con cessions in rents for commercial buildings and high grade apartments, as a result of the active construction in recent years, but a continued large demand for one and two-family houses and for apartments to rent for less than $12 to $15 per room. Notwithstanding the heavy building of houses in the outlying boroughs and suburbs, speculative builders and promoters of large development projects continue to re port a rapid turnover of this type of construction. Sta tistics of building permits for the first two months of this year show an increase of 25 per cent, as compared with last year in permits granted for one and two-family houses and a decrease of nearly 50 per cent, in permits granted for apartment houses. Builders, and bankers and insurance companies mak ing loans on real estate report a plentiful supply of funds for high grade mortgages. Some loans are being made as low as 5 per cent, in Manhattan, but the pre 7 FEDERAL RESERVE AGENT AT NEW YORK vailing rate is nearer to 5 ^ per cent., and in the out lying boroughs 6 per cent. in some cases a loss, after allowing for the extra day dur ing the month. W h o le sa le T ra d e Wholesale trade in this district during February, as reported by 163 dealers, showed more than the usual seasonal increase over January and this bank’s weighted index of sales, after allowing for seasonal variation and price changes, was 11 per cent, above the computed trend compared with 5 per cent, above in January and 9 per cent, below in December. Compared with a year ago the increase in sales amounted to 2 per cent., or practically the same increase as was shown in January. Sales of hardware continued to show the most consistent increases over a year ago, but substantial gains occurred also in sales of dry goods, including cotton goods which showed losses in the preceding three months. Stationery and grocery sales likewise showed larger increases in February than in January, while drug sales continued substantially larger than a year ago. Trade in clothing, on the other hand, showed relatively small increases except in women’s coats and suits which was considerably under last year. Sales of shoes, dia monds, and jewelry continued to show losses, and a sharp decline in machine tools was in contrast with large gains at this time a year ago. Com m odity Dollar Value of February Sales (February 1923 = 100 Per cent.) Per cent. Change in Sales over Feb. 1923 Per cent, of Sales in each Dept, to Sales of all Departments + 2 3 .7 + 2 2 .5 + 2 0 .3 + 1 9 .4 + 1 9 .1 + 1 7 .2 + 9 .7 + 8 .8 + 8 .2 + 3 .3 + 1 6 .3 2 .7 8 .8 16.1 13.8 6 .6 3 .1 4 .1 5 .1 9 .2 2 .3 28.2 H osiery................................................................................... W om en’s and misses* ready-to-wear................................ House furnishings................................................................. W omen’s ready-to-wear accessories................................. M en’s and boys’ wear......................................................... Shoes....................................................................................... Cotton goods......................................................................... Silk goods ............................................................................ Furniture................................................................................ W oolen good s........................................................................ Miscellaneous........................................................................ Stocks of goods on hand March 1 were 5 per cent, higher than a year ago, identically the same increase as was shown on February 1, but much below the average increase of 10 per cent, shown during preceding months. The average sales check during February was $2.06, un changed from last year. N et Sales During February (Feb. 1923 = 100 Per cent.) 1920 1921 1922 1923 99 102 97 93 Rochester.......... 101 104 Bridgeport......... 113 99 EIsewhere^dDist. A pparel.............. 90 Mailorderhouses 147 101 100 110 97 117 107 114 110 97 77 97 97 91 91 115 95 103 112 96 71 100 100 100 100 100 100 100 100 100 100 All dept, stores. . . New Y o r k ......... 1 Stock on Hand M arch 1 (M ar. 1,1923 = 100 Per cent.) **• 1924 1920 115 113 110 123 134 118 115 120 114 115 115 116 124 116 141 141 118 98 96 1921 1922 1923 1924 96 97 106 88 129 118 95 85 81 97 98 100 92 101 104 102 101 92 100 100 100 100 100 100 100 100 100 105 105 99 103 121 111 105 106 111 1920 1921 1922 1923 1924 Hardware.................................................... Dry G ood s.................................................. (a) C otton .............................................. (b) Silk.................................................... Stationery................................................... D rugs........................................................... Groceries..................................................... C lothing...................................................... (a) M en’s ............................................... (6) W om en’s dresses............................ (c) W om en’s coats and suits............. Jewelry........................................................ Shoes............................................................ Machine t o o l s .......................................... D iam onds.................................................... 128 111 98 124 111 92 113 92 85 96 97 176 210 159 125 93 84 76 92 102 72 91 74 55 93 81 69 100 60 42 75 76 82 70 92 88 86 70 48 95 75 67 89 22 40 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 119 109 106 112 108 106 105 98 103 101 89 92 89 84 78 February sales by mail order houses were 15 per cent, larger than in February a year ago, a slightly larger increase than was shown in January, and this bank’s index of mail order sales, in which allowance is made for seasonal variation and price changes, stood at 95 per cent, of the computed trend, compared with 92 per cent, in January and 85 per cent, in December. W eighted average................................. 108 82 77 100 102 Chain Store Sales D e p a r tm e n t Store B usiness Continued heavy sales of house furnishings and cutrate sales of apparel, together with an extra day’s busi ness, contributed largely to an increase of 15 per cent, in sales of department stores in this district over February a year ago. Substantial increases occurred in all report ing cities of the district, but were particularly marked in Newark, Rochester, and Syracuse. This bank’s index of sales, which allows for seasonal variation and price changes, was practically at the 100 per cent, normal line as computed from the trend of sales in previous years, compared with 4 per cent, below this line for the preced ing three months. Sales in all major departments of the stores were larger than last year but showed the greatest increases in apparel and in house furnishings other than furniture. Sales of piece goods showed relatively little increase and February chain store sales were 18 per cent, larger than a year ago, and this bank’s adjusted index of sales was 1 per cent, above the computed trend, compared with 8 per cent, below in January. Nearly all types of stores showed large increases in aggregate sales, while shoe, 10-eent, and tobacco stores showed particularly large increases in sales per store. Number of Stores Dollar Sales During February (In percentages) Type of Store S hoe........................ D rug........................ Per cent. Change in sales per store Feb 1923 to Feb 1924 Feb 1923 Feb 1924 292 454 99 1,783 15,473 2,737 300 333 548 116 1,894 18,985 2,699 320 111 55 83 72 80 97 94 121 86 89 80 76 106 94 115 80 91 86 82 100 96 100 100 100 100 100 100 100 132 130 125 120 116 113 109 + 1 5 .5 + 7 .3 + 6 .6 + 1 2 .9 — 5.3 + 1 4 .5 + 2 .4 21,138 24,895 79 81 85 100 118 — 0 .2 Feb Feb Feb Feb Feb 1920 1921 1922 1923 1924 MONTHLY REVIEW, APRIL 1, 1924 1?ERCENT, An Index of the General Price Level Compared with Wholesale Prices and Wages (1913 = 100 Per cent.) An Index of the General Price Level For many years indexes have been available showing the course of commodity prices at wholesale, and more recently indexes have been prepared showing changes in the retail prices of foods, in wages, in the cost of living, in the cost of building construction, etc. There has been, however, no index which would combine all these things and trace the average course of all kinds of payments, or, as it might be termed, the general price level. The diagram at the top of this page presents an attempt to provide just such an index. Indexes of com modity prices, cost of living, rents, and wages have been worked back for half a century, weighted in accordance with their estimated relative importance in the sum total of expenditures, and combined into a single index. The diagram above shows the movement of this index by years, and compares with it the changes in two of its component groups, namely, wholesale commodity prices and wages. It will be seen that the three lines run closely together, except in times of wide price changes, when wages show more resistance to changes than do wholesale prices. In such periods there is a tendency for wages to retain permanently a larger share of their ad vances than do commodity prices or other elements entering into the general price level. A permanently higher level of wages was established after the Civil War, whereas commodity prices gradually receded to their previous level. Again, following the World War, wages have retained a large share of their gains, an advantage made possible by the adoption of labor saving devices and more skilled personnel management result ing in a higher per capita production. In February of this year the index of wholesale com modity prices computed by the Department of Labor stood at 152 per cent, of the 1913 level; the general average of wages paid to factory workers, unskilled labor, clerks, school teachers, etc., was 210 per cent, of the 1913 average; rents were approximately 165 per cent.; and the general cost of living 171 per cent. The weighted combination of these four groups, or the gen eral price level, stood at 181 per cent. The index of the general price level may be taken to represent approx imately the price changes which are reflected in the volume of credit or bank clearings. F ed era l R eserve B o a rd A n n u a l R ep o r t The annual report of the Federal Reserve Board, covering its 10th year of operation, is of special interest because the report is devoted to a discussion of the pol icies of the Federal Reserve Board and Banks. The topics covered are: Federal Reserve Discount Policy Open Market Policy Gold and Credit Currency and Credit Guides to Credit Policy Copies may be obtained by addressing the Federal Reserve Board, or the Federal Reserve Agent, Federal Reserve Bank of New York.