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MONTHLY REVIEW
o f C r e d it a n d B u s in e s s C o n d it io n s
Second Federal Reserve District
Federal E eserve A g en t

M o n e y M a r k e t in M a r c h
ONEY rates continued to rise gradually in March.
One factor was a renewed gold export movement,
which in the first 28 days of March amounted to
92 million dollars, more than one-third of which, how­
ever, represented gold that had been taken out of the
gold stock of this country previously through earmark­
ing transactions. The other principal factor was an
expansion of bank loans. As a result of these influences,
open market money rates at the end of March were
slightly higher than a month previous or at the end of
March last year.

M

M oney Rates at New York
Mar. 30, 1927 Feb. 28, 1928 Mar. 30, 1928
Call m on ey.................................................
Tim e money— 90 d a y ..............................
Prime commercial paper.........................
Bills— 90 day unindorsed.......................
Treasury certificates and notes
Maturing June 15.................................
Maturing December 15.......................
Federal Reserve Bank of New York—
rediscount ra te......................................
Federal Reserve Bank of New Y ork—
buying rate for 90 day b ills ...............

4 -4 H
3H

4
3K

* 4 ^ -5
4%
4 -4 M
3M

3.31
3.36

3.30
3.28

3.24
3.33

4

4

4

3H

3M

3H

*4 H

*4M

♦Prevailing rate for preceding week

An important element in the March credit expansion
was a substantial seasonal increase in commercial loans.
MILLIONS o f DOLLARS

)

April 1, 1928

Federal R eserve Bank, New Y ork

The increase since the beginning of February, as the
first diagram below indicates, has been much larger than
last year, apparently reflecting increasing industrial
activity; in fact, the increase in commercial loans this
year has been larger than in the corresponding period
of any year since 1923. On March 21, these loans were
160 million dollars larger than at the same time in 1927.
This increase follows a period during which commercial
loans were little, if any, above the preceding year.
The second diagram indicates that the financing of
trade through acceptances also is considerably higher
than a year ago. A large part of the increased amount
of outstanding acceptances is being carried by foreign
funds invested in this market and thus does not appear
in the loans and investments of domestic banks. Reports
by the American Acceptance Council indicate that a con­
siderable part of the increase in outstandings represents
the financing of goods stored in or shipped between
foreign countries or of American goods exported to for­
eign countries. A somewhat smaller part of the increase
during the year represents the financing through the
bill market of import trade and the domestic storage
of goods.
L oans

o n

S e c u r it ie s

Loans of reporting member banks, secured by stocks
and bonds, showed some increase in March, accompany­
ing an unusually large volume of trading in securities
and an advance in stock prices to new high levels. The
MILLIONS o f HOLLARS

-----

1

-------------------------

"*1 9 2 8

192.8 JT
880 0

80 0
w

.

1 9 2 .7

■,1 9 2 7
8400

8000

400

COMMERCI AL LOANS
Reporting,MemberBanks
A
. 1
1
1'
,
,
1

A m o tm t o f

BILLS Ol IT5TAND1NC
I

i

----- 1------1-

Commercial Loans of Weekly Reporting1 Member Banks.




o

,
'

J

,
F

1 __.i
M

A

M

. ,
J

1--------- 1-----_ J
J

A

--------- i
S

O

N

— »
B

Outstanding Bankers Acceptances Reported by the American
Acceptance Council.

26

MONTHLY REVIEW, APRIL 1, 1928

amount of these loans outstanding on March 21, though
below the first of the year levels, was 700 million dollars,
or 12 per cent, larger than a year previous. The entire
reduction since the first of the year has been in the loans
of New York City banks; security loans of reporting
banks outside of New York on March 21 equaled the
highest level previously reached. In addition, loans to
brokers and dealers in securities placed by New York
reporting banks for interests other than banks have
increased 360 million since the beginning of January and
are about 450 million larger than a year ago.
T re a s u ry

T a x

P e rio d

O p e r a t io n s

Large disbursements and collections were made by the
Reserve Banks for the Treasury around the March 15
tax period, without material effect on the money market.
Redemptions of maturing certificates amounted to 514
million dollars, of which approximately 400 million were
redeemed in New York; income tax collections in this
district up to March 28 totaled 170 million dollars; and
interest payments here were about 35 million. The sub­
stantial excess of disbursements over collections was
covered in the usual manner by day-to-day special
Treasury certificates of indebtedness issued to the Fed­
eral Reserve Bank of New York, which were gradually
reduced, and within a week entirely paid off by income
tax collections here and the transfer from other dis­
tricts of funds obtained through tax collections.
The excess of Treasury payments over collections in
this district was temporarily prevented from creating
a surplus of funds in the money market by the sale for
one day of a $115,000,000 participation in the Treasury
special certificate of indebtedness, and by deferring for
a few days purchases of securities to replace securities
matured or sold on March 15 from the holdings of the
Federal Reserve System. Within a week after the 15th,
tax collections in this district and the withdrawal of
funds from New York to replace tax collections in other
districts had proceeded in sufficient volume to absorb
the surplus funds.
B

ill

G o ld M o v e m e n t
The outflow of gold during March exceeded that of
any previous month in the history of the country;
slightly over $93,000,000 was exported through the Port
of New York alone. Of this amount, however, $35,800,000
was gold previously earmarked and so the net loss of
funds to the money market from this cause was slightly
over $56,600,000, which is substantially less than the net
loss in either November or December of last year. Exports
to Argentina continued during March; the movement to
Brazil was renewed; a large transfer of earmarked gold
was made to France; there was a substantial flow of
gold to Germany; and smaller shipments went to Italy,
Poland, and England. The import movement at New
York was negligible, comprising chiefly miscellaneous
small receipts from Latin American countries.
Final reports for the entire country for February
showed exports amounting to $25,776,000 and imports
of $14,686,000, resulting in a net export of $11,090,000.
This amount was partly offset by the release of $3,000,000 of earmarked gold; so that the net loss for the month
was $8,090,000, as compared with a net loss of $8,270,000
in January.
Since the beginning of the export movement last Sep­
tember the United States has lost $300,000,000 net of
gold through export movements and earmarkings. Onethird of the exported metal, $113,000,000, has gone to
Argentina, in addition to substantial amounts shipped
to that country from London and South Africa. France
and Brazil together have taken one-half of the re­
mainder. The Canadian movement during this period
has resulted in a net inflow of over $30,000,000.
(In thousands of dollars)
U N IT E D S T A T E S

M a r k e t

The supply of new bills offered to the market was
maintained in large volume in March and was slightly
in excess of the amount of buying orders received by the
dealers. The investment demand, while fairly steady,
was of moderate proportions and took the form chiefly
of buying for foreign account. These conditions re­
sulted in an increase in open market portfolios, which
by the end of the month were the largest since early
in January. Market rates for bills were unchanged
during most of the month, but were advanced % to ^
near the end of the month, and the 90 day maturity was
offered at 3 % per cent.
C o m m e r c ia l P a p e r

M a rk e t

Commercial paper rates advanced somewhat in March,
and prime names were generally sold at a range of 4
to 4 % per cent. The investment demand continued
moderately active until after the middle of the month
when dealers reported a lack of inquiry. Notwith­
standing the reduced volume of sales, dealers’ lists of
paper remained quite moderate, reflecting the small
amounts of new borrowing by users of the open market.
This condition is similar to that of February, when
outstandings through 25 dealers declined 1 % per cent




to $567,000,000 at the end of the month, an amount
nearly 2 per cent smaller than a year ago, following
increases over the previous year in each of the preced­
ing four months.

Source or
Destination

September 1, 1927
to
February 29, 1928
Imports

Argentina...................
A ustralia....................
B elgium ......................
B ra zil..........................
British In d ia .............
British M a la ya .........
C anada.......................
China and H ong Kong
E cu a d or......................
F rance........................
G erm any....................
I ta ly ............................
Java and M a d u ra ..
M e x ico........................
Netherlands...............
P ola n d ........................
R ussia.........................
Sweden........................
United K in g d o m .. . .
Uruguay................... ..
Venezuela...................
All other.....................
T o ta l.......................
Earmarked Account.
T o ta l.......................

P O R T OF
NEW YORK*

Exports

Imports Exports

93,140

19,700

9,746

56,797
1,646
36
* 5
616
2,674
5,200
32
11

Im ports Exports
112,840
9*746

4,200
44,810
4,301
1,286
25,348
5,018

8*504
56,797

25,666
315
l ‘, 43i
3,405
12,055
5,000

TOTAL*

Septem ber 1 , 1927
to
M arch 1— 28, 1928 March 28, 1928

*i30

35,799
21,156
3,000
131
371

1,646
36
* ‘ *5
616
2,804

3*666

4,206
53,314
4,301
1,286
25,348
5,018
60,799
21,471
3.000
1,562
3,776
12,055
8 .0 0 0

5 ,2 6 6

1*027
8,548

32
1 ,6 2 6

11

8 ,0 0 0

1,027
9,568
8 ,0 0 0

*238
3,552

3,100
134

” 72
445

*4io

3 io
3,997

3,510
134

80,553

246,118

647

93,091

81,200

339,209

26,700t

100,7011 38,799f

107,253

346,819

39,446

3f000t 65,4991
96,091

146,699

103,701*
442,910

♦Preliminary. tGoldj released from earmark. {A dditional gold earmarked.

FEDERAL RESERVE AGENT AT NEW YOM

i?

Foreign Exchange Rates at New Y ork in 1928, Compared with 1927 (H eavy line represents 1928 figures; light line represents 1927 figures).

The foregoing table sets forth by countries the principal gold movements since September 1, 1927, together
with the totals of earmarking transactions. Although
the import of about $5,000,000 from Russia last month
is included in the report of gold movements, it has not
been added to the gold stock of the cbuntry through
purchase by the Assay Office or the Reserve Bank.
Foreign E xch a n g e
Sterling exchange continued strong during March,
and a shipment of $1,000,000 of gold was made to Eng­
land on March 21. German marks at 23.92 cents again
reached the high point of December. The Scandinavian
exchanges were likewise stronger, Swedish and Danish
rates rising above par and Norwegian quotations ad­
vancing to 26.71 cents, as compared with an average of
26.61 cents during February. Dutch guilders advanced
to 40.25 cents and Swiss francs to 19.27 cents. French,
Italian, and Belgian rates showed little change, but the
Spanish peseta continued to decline, falling as low as
16.75 cents.
In the Far East, rates on Hong Kong and Calcutta
showed little change during the greater part of March
from the previous month, but the Japanese yen made
a notable advance from 46.73 cents at the close of Feb­
ruary to 47.82 cents on March 27, the highest point
since the reaction caused by the banking crisis last May.
The Canadian dollar went to a premium on March 14
for the first time since December 2. South American
rates continued strong throughout the month. The
Argentine peso was quoted at 42.65 to 42.67 cents and
the Brazilian milreis at 12.04 to 12.07 cents, the latter
being the highest rate since December 1926.
The above diagram indicates the strength of foreign
exchanges compared with last year.
D is c o u n t R ate> A b ro a d
Two reductions in the discount rates of central banks
were made during March. On the 5th, the Bank of Italy
lowered its rate to 6 % per cent from the 7 per cent
rate which had been in effect since June 1925. A rate
of 5 % per cent was adopted by the Bank of Norway
on March 27, following an increase from 5 to 6 per
cent on February 2.




Security M a r k e ts
— — --------------------An exceptionally active and strong stock market de­
veloped in March, following the irregular decline of
January and February. The turnover for the month
was the largest on record, with trading on a number of
days close to or above 4,000,000 shares. The entire in­
dustrial list moved irregularly higher throughout the
period, and, toward the end of the month, representative
price averages were up 11 to 24 points from the lowest
points of February to higher levels than were ever
before attained. Railroad stocks also shared in the
advance with an average gain of about 8 points from
the February lows, but remained several points below
the high levels of the autumn of 1927.
Corporation bonds were fairly steady in March; prices
eased slightly further early in the month, but a subse­
quent recovery occurred which carried average prices
close to the highest points of the previous two months.
Foreign bonds as a class were firm, and a substantial
proportion of the active issues sold at the highest prices
of the year. Liberty Loan issues showed net declines
for the month, while Treasury long-term bonds ad­
vanced; near the end of the month the Government list
as a whole was about % point below the highest levels
of the year.
Following a reduction in the volume of new financing
during the first two months of the year, securities offer­
ings in March increased to the largest volume since
December, and were considerably larger than in March
1927. The increase was primarily due to the flotation
of a number of large issues, including principally
$100,000,000 of St. Louis-San Francisco Railway Co. 4 ^
per cent bonds, and $52,000,000 of City of New York 4
per cent corporate stock. Both of these issues were for
the purpose of refunding outstanding obligations. There
were also two large foreign issues during the month;
one a consolidation loan of $30,000,000 of the Kingdom
of Norway; the other the major part of a $35,000,000
Republic of Colombia loan. For the first three months
of this year, refunding issues have been in considerably
larger volume than in the corresponding period last
year, but the volume of new capital issues appears to
have been somewhat smaller.

28

MONTHLY REVIEW, APRIL 1, 1928

F o r e i g n 'T r a d e

Merchandise exports showed a seasonal decline in Feb­
ruary and the total valuation of 373 million dollars was
about the same as a year ago. Imports, valued at 353
million dollars, showed an increase of 15 million over
January, contrary to the usual seasonal movement, and
an increase of 42 million over February 1927.
The quantity of cotton shipped abroad continued to
decline seasonally in February and was almost 400,000
bales less than last year, and, notwithstanding the
higher prices this year, the total value appears to have
been somewhat smaller. Grain exports also were con­
siderably smaller than in the previous month, or in Feb­
ruary of last year. Exports of passenger automobiles
increased considerably in number and value over
January and over a year ago.
The increase in merchandise imports compared with
last year appears to have been chiefly in receipts of raw
silk and coffee. The quantity of both of these com­
modities received in February was nearly one-third
larger than last year, and the value also was larger.
Imports of crude rubber were larger in quantity but
smaller in value than in February 1927.
B u ild in g
Due chiefly to a 34 per cent increase in the New York
and Northern New Jersey District, awards of building
contracts in the territory east of the Rockies during
February were 18 per cent larger than a year ago, and
were in fact larger than for any February in the past.
The total reported by the F. W . Dodge Corporation for
37 states was 9 per cent larger in February than in
January, whereas some decline frequently occurs at this
season of the year, and this bank’s index of construction
contracts advanced to the highest level since December
1926, as the accompanying diagram shows.
PERCENT.

above the trend of past years, probably due in part to
the high per capita income in this country during recent
years, which has left a larger margin of purchasing
power, after provision for the necessities of life, than
in any previous period.
The principal development in February was a large
increase in residential building; residential contracts
awarded in this district were nearly twice as large as in
February of last year, and the total for 37 states was
47 per cent larger, following an increase in January
over last year of 15 per cent.
Reports received by S. W . Straus & Company of
building permits in about 550 cities and towns showed
an increase of 7 per cent over February 1927, which also
reflected chiefly the increase in residential building in
this district. Excluding plans filed in New York City,
the total for the remaining localities throughout the
country shows a decline of 9 per cent.
In dexes o f Business A c tiv ity
No consistent evidence as to the tendency of general
business for February is given by this bank’s indexes of
business activity.
The domestic movement of mer­
chandise and heavy freight, and the foreign trade of
this country showed increases, after allowance for the
usual seasonal variations, and retail trade was more
active than in January. Life insurance sales also in­
creased substantially, and there was a considerable rise
in our index of new incorporations. The indexes of
bank debits, both in New York City and elsewhere
throughout the country, declined, however, and busi­
ness failures were more numerous than in January, after
seasonal adjustment.
This bank’s indexes, in which allowance is made for
seasonal variations, year-to-year growth, and price
changes, are shown below for February, together with
comparative figures for the two months preceding and a
year ago.
(Computed trend of past years=100 per cent)
1927
Feb.

Dec.

Jan.

Feb.

Panama Canal traffic..................................
Wholesale trade............................................

110
107
94
101
94
99

95
86
78
104
88
96

102
93
85
102
85
100

104
96
90p
108p
102
102

Distribution to Consumer
Departm ent store sales, 2nd D ist............
Chain groceries sales...................................
Other chain store sales...............................
M ail order sales........................................
Life insurance paid fo r ................................
A dvertising....................................................

104
98
106
99
110
104

108
104
107
119
107
97

99
101
98
96
98
87

104
103
102
98
113
98

107
124

106
138

107
142

102
135

108
134
189
98
103
100
107
136
116
102

104
136
228
98
102
95
108
138
116
95

109
140
234
88
101
95
108
140
117
93

104
138
196
95

170
221

174
223

173
221

173
221

Primary Distribution
Car loadings, merchandise and m isc.......
Car loadings, other......................................

Index o f Building Contracts Computed by the Federal Reserve
Bank o f New York, Adjusted for Seasonal Variations and
Changes in the Cost o f Construction.

This index shows the level of current building relative
to the long-term trend of building computed for a period
of more than 30 years, after adjustment for changes in
the cost of construction. It indicates that the volume
of building during most of the past six years has been




1928

General Business Activity
Bank debits, outside of N. Y . C it y .........
Bank debits, New Y ork C it y ...................
V elocity of bank deposits outside of
N. Y . C it y ...................................... ..
Velocity of bank deposits, N. Y . C it y ...
Shares sold on N. Y . Stock Exchange ..
Postal receipts...............................................
Electric pow er...............................................
Em ploym ent in the United States...........
Business failures...........................................
Building contracts.......................................
New corporations form ed in N . Y . State
Heal estate transfers....................................
General price le v e l.......................................
C omposite index of wages..........................

^Preliminary

*96
114
151
127
101

29

FEDERAL RESERVE AGENT AT NEW YORK
P r o d u c tio n

Commodity Prices

Productive activity in leading industries showed a
further increase in February from the low levels that
prevailed at the close of last year. The output of both
pig iron and steel ingots continued to increase, and our
indexes, after allowance for the usual seasonal varia­
tions, made substantial advances. Autom obile produc­
tion also increased further, and our combined index of
the production of both passenger cars and trucks reached
the highest level since September 1926. Lum ber pro­
duction showed a further increase of more than seasonal
proportions, and remained considerably above the level
o f last y e a r ; and the index of bitum inous coal output
reached the highest point since A p r il 1927, the begin­
ning of the strike. There is evidence, moreover, that the
advance was not confined to these few im portant indus­
tries, fo r of the 28 production indexes now available
23 increased while only 5 declined.

The tendency of this b a n k ’s weekly index o f basic
commodity prices was gradually downward in February
fo r the fourth consecutive month. A further slight de­
cline occurred early in M arch and at 138.6 on March
10, the index was 5 % per cent below the 1927 high
point of 146.6 reached on October 8, but remained
nearly 8 per cent above the lowest point of last year.
In the subsequent two weeks there was a moderate
recovery. The general index of wholesale prices com­
puted by the Bureau of Labor Statistics showed prac­
tically no change in February follow ing a moderate
decline from October to J anuary.
In the four months from October to F ebruary the
principal declines in prices were in food products, textile
products, fuel, and chemicals and drugs.
Prices of
metals and of hides and leather advanced somewhat dur­
ing this period, and farm products showed no general
change, although there were wide fluctuations in a few
commodities, especially cotton. The upward tendency in
our basic price index recently has been due chiefly to
a moderate rise in raw cotton and smaller increases in
grain prices.

In March, steel m ill operations have remained at the
high level of February, and em ployment at Detroit has
continued the expansion that has been in progress since
the first of the year. Current reports indicate that the
production of petroleum, lumber, and bituminous coal
is holding at about the recent levels, but that the pro­
duction of anthracite coal has shown a slight decline,
and that cotton m ill activity has been curtailed further.
In general, it appears that, except in the automobile
industry, productive activity in M arch did not increase
as rapidly as in J anuary and February.

PER CENT

This b a n k ’s indexes, in which allowance is made for
year-to-year growth and fo r the usual seasonal varia­
tions, are shown below.
( C o m p u t e d tr e n d o f p a s t y e a rs = 1 0 0 p e r c e n t)

1928

1927

Feb.

Dec.

Jan.

Feb.

108
111
108
124
92
121
125
117
102
98
108
108
98
94
108
99
106
106

91
94
97
66
90
115
114
79
93
98
97
100
102
75
104
129
101
99r

95
101
94
67
89
131
111
84
99
98
97
100
90
90
97
141r
100
99

105
115
104
65
88p

76
106
111
105
103
96
78
94
92
106
92
104
104
100
97
107
119
116

89
87
103
100
93
77
110
99
119
99
84
94
102
101
91
99
54
86

103
89
108
95
101
108
103
101
108r
93
84
89
105
105
92
111
104r
89r

Producers* Goods
P i g i r o n ...........................................................
S t e e l i n g o t s ....................................................
C o t t o n c o n s u m p t i o n ....................................
C o t t o n m o v e m e n t ......................................
W o o l e n m i l l a c t i v i t y * .................................
S i l k c o n s u m p t i o n * .......................................
P e t r o l e u m ......................................................
B i t u m i n o u s c o a l ...........................................
C o k e ................................................................
L u m b e r ...........................................................
C o p p e r , U . S . m i n e s ....................................
L e a d ................................................................
Z i n c ..................................................................
T i n d e l i v e r i e s ................................................
L e a t h e r , s o l e .................................................
C e m e n t ...........................................................
P a p e r , t o t a l ...................................................
W o o d p u l p .....................................................

*8 6
100
104p
104
108
93
88
113
114
IlO p
108p

Consumers ' Goods
H o g s s l a u g h t e r e d .........................................
C a t t l e s l a u g h t e r e d .......................................
S h e e p s l a u g h t e r e d ........................................
C a l v e s s l a u g h t e r e d .......................................
F a r m p r o d u c e s h i p p e d ................................
W h e a t r e c e i p t s ..............................................
C o r n r e c e i p t s .................................................
W h e a t f l o u r ...................................................
S u g a r m e l t i n g s , U . S . p o r t s .......................
G a s o l i n e ..........................................................
A n t h r a c i t e c o a l .............................................
N e w s p r i n t ......................................................
P r i n t i n g a c t i v i t y ..........................................
T o b a c c o p r o d u c t s .........................................
B o o t s a n d s h o e s ............................................
T i r e s ................................................................
A u t o m o b i l e , p a s s e n g e r ................................
A u t o m o b i l e , t r u c k ........................................

♦Seasonal variation not allowed for




^Preliminary

rRevised

126
100
114
98

iih
76
*8 5
95
io 7
lO lp
i2 8
92

19£4

1925

19£6

19£7

1928

U n it e d
S ta te s
B u re a u
of Labor
S t a t is t ic s
G e n e ra l In d e x
W h o le s a le P r i c e s a n d F e d e r a l R e s e r v e B a n k o f N e w Y o r k
W e e k l y I n d e x o f B a s i c C o m m o d it y P r i c e s
(1 9 1 3 = 1 0 0 p er c e n t).

of

Employment and Wages
A ft e r rem aining fo r two months at the lowest levels
in several years factory em ploym ent in the entire
country increased 1.7 per cent in February, a slightly
larger increase than is usual in that month. Our index,
in which allowance is made fo r seasonal variations,
showed an advance fo r the first time since last June.
In New Y o rk State, factory em ployment increased 1
per cent from the low level of January. There were
increases in the steel, automobile, railway equipment
and other metal industries, and in clothing and textiles,
which more than offset seasonal declines, principally in
the building materials industries. Factory em ployment
remained lower than a year ago in a m ajority of indus­
tries, however, and the total was about 6 per cent lower.
The ratio of orders fo r workers to applications for
em ployment at N ew Y o rk State em ployment offices has
shown an advance o f something more than seasonal pro­

30

MONTHLY REVIEW, APRIL 1, 1928

portions since the early part o f February, but remains
considerably lower than a year ago.
The State E m ­
ploym ent Service reports that there is still a consider­
able amount o f unem ploym ent, which continues to be
principally among unskilled workers, and seems to be
larger in New Y o rk C ity than in the remainder of the
state.
The building trades have not taken as m any
workers as was expected, but there are indications that
this line is now showing a seasonal upswing. A sub­
stantial improvem ent in the em ploym ent o f skilled
laborers recently, particularly in some of the industrial
cities upstate, is reported.

C o m m o d it y

P e rc e n ta g e
Change
F e b ru a ry 1928
c o m p a re d w ith
Ja n u a ry 1928

Net
S a le s
G r o c e r i e s ........................
M e n ’s c l o t h i n g ..............
W o m e n ’s d r e s s e s ...........
W o m e n ’s c o a t s a n d s u i t s
C o tto n go o d s— Jo b b e rs
C o tto n go o d s— C o m - .

—
+
+
+
+

6
1
4
4

3 .0
7 .3
9 .7
3 .6
1 .3

Sto ck
end of
m o n th
—

0 .7

+

2 *.i

P e rce n tage
Change
F e b ru a ry 1928
c o m p a re d w ith
F e b ru a ry 1927

Net
S a le s
+
3 .6
+
3 .9
— 1 1 .2
—
5 .2
+
7 .6

Sto ck
e nd of
m on th

P e r cent of
A cco u n ts
O u t s t a n d in g
J a n u a r y 31,
C o lle c t e d
in F e b ru a ry

1927

1928

8 .1

6 8 .5
4 5 .1

7 1 .3
3 9 .2

+1516

3 0 ‘. 4

3 i ‘. 5

—
—
+

2 .8
2 .0
2 .9

4 7 .3
3 6 .3
4 6 .9
3 9 .0

4 8 .3
3 5 .0
4 4 .9
4 1 .8

7 7 .2
7 0 .6

7 4 .5
6 6 .0

} -

r.s

2 5 .2

2 7 .6

5 0 .3

4 9 .9

—

S i l k g o o d s .......................
S h o e s ...............................
D r u g s ..............................
H a r d w a r e .......................
M a c h i n e t o o l s * * ...........
S t a t i o n e r y ......................
P a p e r ...............................
D i a m o n d s .......................
J e w e l r y ...........................

+
9 .4
+ 0 .2
+
5 .3
—
9 .6
+
9 .4
—
7 .8
+
2 .4
—
2 .3
— 2 2 .4
+ 1 6 .8

Wholesale Trade

W e i g h t e d a v e r a g e .........

+ 1 7 .9

Total February sales of reporting wholesale houses in
this district showed a small increase over a year ago,
but after allowance fo r the extra business day this year,
the average daily volume of business appears to have
been slightly smaller.
The largest increase over last
year again was in sales of machine tools, which in the
past two months have been the largest in several years,
as the accom panying diagram shows.

♦ Q u a n t it y n o t v a lu e .
R e p o r t e d b y t h e S i l k A s s o c ia t io n o f A m e r ic a .
* * R e p o r t e d b y t h e N a t io n a l M a c h i n e T o o l B u i ld e r s ’ A s s o c ia t io n .

The expansion in the total of factory wage paym ents
from January to F ebruary was slightly smaller than
the increase in the num ber em ployed in New Y o rk State,
but fo r the country as a whole the increase in total
wage paym ents was substantial.

—
+
+
+

}+

4 .9 *
6 .4
0 .3
6 .9

i '. i

+
+
—
+
+
+
—
+
—
+

3 .9
0 .9
1 5 .5
1 0 .4
0 .3
4 0 .4
3 .2
9 .9
1 1 .7
1 .0

+

1 .2

Department Store Trade
F ebruary sales of leading department stores in this
district averaged 4.6 per cent larger than a year ago,
apparently due largely to an extra selling day this year.
The daily rate of sales was approxim ately the same as
in February 1927, whereas January sales were 3 per
cent smaller than last year. A p p a re l stores sales showed
an unusually large increase, and m ail order houses re­
ported somewhat larger increases than in January.
Increases in the rate of stock turnover and in the rate
o f collections, compared with F ebruary 1927, appear to
have been due largely to the extra business day this
year.

P e rc e n ta ge
Change
F e b ru a ry 1928
c o m p a re d w ith
F e b ru a ry 1927
L o c a lit y

Net
S a le s

1922
M a c h in e

1923

Tool

O rd e rs

1924

1925

1926

1927

R e p o rt e d b y th e N a t io n a l
B u ild e r s * A s s o c ia t io n .

1928

M a c h in e

Moderate increases were reported also in sales of gro­
ceries, m e n ’s clothing, cotton goods, drugs, and paper.
Sales of w om en’s clothing showed a substantial seasonal
increase over January, but remained smaller than last
y e a r ; sales of shoes and diamonds also were consider­
ably smaller.
Silk goods, jew elry, and hardware sales
were close to those o f a year ago.
Shoe stocks, which had been running substantially
larger than a year previous, showed less than the usual
seasonal increase in February, and at the end of the
month were slightly smaller than a year ago. Grocery
stocks were considerably smaller than in February 1927,
but stocks held by cotton goods jobbers were substan­
tially larger.




R o c h e s t e r ...........................................................

Tool

N o r t h e r n N e w Y o r k S t a t e ........................
C e n t r a l N e w Y o r k S t a t e ............................
S o u t h e r n N e w Y o r k S t a t e .........................
H u d s o n R i v e r V a l l e y D i s t r i c t ...................
C a p i t a l D i s t r i c t ............................................
W e s t c h e s t e r D i s t r i c t ....................................

+
5 .2
+
1 .2
—
3 .6
+
2 .8
+
6 .5
—
8 .5
+
5 .1
+
9 .7
+ 1 3 .3
—
2 .3
+
7 .3
+
2 .3
+ 1 8 .8

Sto ck
on hand
end of
m o n th
—
+
+
+
+
—
—

P e r cent of
C h a rge
A cco u nts
O u t s t a n d in g
J a n u a r y 31,
C o lle c t e d i n
F e b ru a ry

1927

1928

1 .5
4 .8
3 .1
1 .3
1 .8
6 .5
8 .1

4 4 .7
4 9 .3
3 7 .3

4 9 .6
4 9 .4
4 0 .2

4 5 .6

4 5 ’. 0

3 0 *.7

ai’.o

A l l d e p a r t m e n t s t o r e s ......................................

+

4 .6

—

1 .0

4 3 .8

4 6 .7

A p p a r e l s t o r e s ...................................................
M a i l o r d e r h o u s e s .............................................

+ 1 4 .6
+
7 .4

+

9 .3

4 3 .4

4 8 .0

The largest increases in department store sales, com­
pared with last year, were in books and stationery,
sporting goods, shoes, and toilet articles and drugs.
Sales of w om en’s apparel, furniture, and home furnish­
ings also showed moderate gains, but sales of m e n ’s wear
and silk goods were slightly smaller than a year ago.

31

FEDERAL RESERVE AGENT AT NEW YORK

N e t S a le s
P e rc e n ta ge C h a n g e
F e b ru a ry 1928
c o m p a re d w ith
F e b ru a ry 1927

B o o k s a n d s t a t i o n e r y ..............................
T o y s a n d s p o r t i n g g o o d s ........................
S h o e s ............................................................
T o i l e t a r t i c l e s a n d d r u g s ........................
W o m e n ’s a n d M i s s e s ’ r e a d y - t o - w e a r . .
C o t t o n g o o d s .............................................
H o m e f u r n i s h i n g s .....................................
M e n ’s f u r n i s h i n g s .....................................
H o s i e r y .......................................................
F u r n i t u r e ....................................................
W o m e n ’s r e a d y - t o - w e a r a c c e s s o r i e s . . .
W o o l e n g o o d s ............................................
L u g g a g e a n d o t h e r l e a t h e r g o o d s .........
S i l v e r w a r e a n d j e w e l r y ............................
L i n e n s a n d h a n d k e r c h i e f s .......................
M e n ’s a n d B o y s ’ w e a r ............................
S i l k s a n d v e l v e t s ......................................
M u s i c a l i n s t r u m e n t s a n d r a d i o .............
M i s c e l l a n e o u s ............................................

Stock on H a n d
P e rc e n ta g e C h a n g e
F e b r u a r y 29, 192 8
c o m p a re d w ith
F e b r u a r y 28, 192 7

— 2.2
— 1.2

+ 1 6 .1
+ 1 3 .8

+11.0
+10.6
+
+
+
+
+
+

+ 4.9
— 1.7

— 1.0
— 2.2

7 .4
5 .6
5 .3
4 .9
3 .7
3 .2

+ 3.7
+ 3.9
+ 7.4

+ 1.1

+ 2.1
+ 2.0
+
+

1 .9
0 .7

—
—

1 .3
3 .2

— 5.7
— 14.0
—23.8

— 1.1
+ 2.0
+ 8.2

— 0.2

— 7.6
— 36.4
— 4.3

—22.0
— 2.0

does not publish statements o f earnings. In other lines
o f business, however, there were equally substantial
increases; clothing and textile companies reported net
profits almost twice as large as in 1 9 2 6 ; leather and
shoe concerns had an exceptionally good y e a r ; rubber
companies reported profits 50 per cent larger than in
1 9 2 6 ; and earnings of chemical and drug companies,
stores, and miscellaneous companies were all above the
totals fo r 1926.
E arnings of telephone companies continued to show
a steady increase, and other public utilities reported
even larger increases.
Class I railroads, on the other
hand, reported net operating income about 12 per cent
smaller in 1927 than in 1926 and slightly smaller than
in 1925, reflecting largely the reduction in traffic.
Net earnings o f a number of im portant groups of
companies fo r the past three years are shown in the
diagram below in percentages of the 1926 earnings.

Business Profits in 1927

( N e t p r o f it s i n t h o u s a n d s o f d o lla r s )

Earnings reports of 381 industrial and mercantile
concerns now available indicate that net profits of these
companies in 1927 averaged about 8 per cent smaller
than in 1926, but were larger than in any other recent
year. The reduction in industrial profits from the 1926
level was due prim arily to declines in a few large indus­
tries, especially oil and steel. I f these two groups be
excluded from the tabulation, the net profits of all other
m anufacturing and commercial companies would show
some increase in 1927 over the previous year.
Profits in the oil industry were reduced by nearly
one-half in 1927, reflecting lower prices, and steel com­
pany profits declined by about 25 per cent. There were
also smaller reductions in railroad equipment, motor
accessories, metal and m ining, and building supply com­
pan ies; and the coal companies had a very poor year,
owing to the strike. The automobile industry as a whole
showed slightly larger profits in 1927, but when the very
large earnings o f the General M otors Corporation are
subtracted from this group, the rem aining companies
show a reduction of 24 per cent from the 1926 figure.
This figure is exclusive of the F o rd Com pany, which

C o r p o r a tio n

G ro u p s

S t e e l c o m p a n i e s .................
R . R . e q u i p m e n t ...............

N um ­
ber

1924

1925

1927

1926

26
12
31
22

1 3 7 ,9 1 8
2 7 ,8 4 8
1 5 3 ,6 0 0
1 3 5 ,5 9 9

1 7 0 ,7 5 9
1 8 ,0 1 3
26 7 ,1 6 4
2 6 0 ,1 8 2

2 1 7 ,3 1 3
4 0 ,5 6 7
2 8 7 ,6 2 1
2 9 9 ,4 8 1

1 6 3 ,0 1 0
3 1 ,5 1 8
1 5 0 ,3 4 2
3 1 4 ,9 7 7

18
11
39
16
9
9
6
24
19
19
11
18
14
19
58

3 1 ,8 7 2
4 3 ,7 5 5
1 5 5 ,8 7 6
9 0 ,1 2 8
1 9 ,8 7 8
1 1 ,4 3 1
6 ,6 9 1
5 ,7 4 4
8 3 ,3 8 7
4 7 ,6 5 0
723
2 5 ,8 5 5
5 0 ,1 7 1
5 8 ,8 2 4
1 3 7 ,0 8 8

4 1 ,1 0 2
8 3 ,0 9 8
1 6 0 ,9 9 1
1 0 0 ,1 4 9
2 2 ,5 9 3
11 ,4 3 9
7 ,8 7 5
2 1 ,1 8 1
10 5 ,1 8 6
6 7 ,0 1 9
2 ,6 9 2
3 6 ,4 8 9
5 6 ,5 4 2
6 4 ,2 6 2
1 7 5 ,5 4 8

3 6 ,6 4 7
3 7 ,6 3 9
1 7 5 ,1 1 2
10 8 ,5 6 2
1 9 ,1 0 3
1 1 ,3 9 5
1 1 ,0 6 9
1 2 ,5 7 4
10 9 ,5 4 2
8 3 ,3 1 4
5 ,7 2 9
4 5 ,1 2 9
6 9 ,0 3 9
6 4 ,4 6 1
1 8 7 ,9 0 3

2 9 ,5 5 4
5 6 ,5 9 7
1 6 7 ,5 3 0
11 2 ,6 6 6
2 9 ,7 4 0
1 1 ,3 1 7
~
9 ,5 7 8
2 3 ,7 5 4
1 2 6 ,3 5 3
7 0 ,4 7 5
29
4 5 ,0 7 9
7 5 ,7 3 5
55 ,1 2 4
2 0 6 ,5 1 2

T o t a l 1 9 g r o u p s .............

381

1 ,2 2 4 ,0 3 8

1,6 7 2 ,2 8 4

1 ,8 2 2 ,2 0 0

1 ,6 7 9 ,8 9 0

O t h e r p u b l i c u t i l i t i e s ........

78
51

1 5 0 ,7 0 8
1 8 1 ,0 1 5

1 8 6 ,4 2 6
2 1 5 ,0 5 8

21 2 ,2 2 5
2 5 0 ,7 5 4

22 6 ,3 8 3
28 6 ,4 3 6

M o t o r a c c e s s o r i e s ( e x c l.
R u b b e r .................................
F o o d a n d fo o d p r o d u c t s . .
T o b a c c o ...............................
L e a t h e r a n d s h o e s .............
A m u s e m e n t .........................
C l o t h i n g a n d t e x t i l e s ........
S t o r e s ....................................
M e t a l s a n d m i n i n g ............
C o a l ......................................
M a c h in e & m ach. m fg ....
C h e m i c a l s a n d d r u g s ........
B u i l d i n g s u p p l i e s ...............
M is c e lla n e o u s in d u s t r ie s . .

T o t a l p u b lic u t ilit ie s . . .

129

3 3 1 ,7 2 3

4 0 1 ,4 8 4

4 6 2 ,9 7 9

5 1 2 ,8 1 9

T o t a l 2 1 g r o u p s .........

510

1 ,5 5 5 ,7 6 1

2 ,0 7 3 ,7 6 8

2 ,2 8 5 ,1 7 9

2 ,1 9 2 ,7 0 9

C l a s s I R . R ........................

183

9 8 7 ,1 3 3

1 ,1 3 6 ,9 7 3

1 ,2 3 3 ,0 0 3

1 ,0 8 5 ,3 4 2

LEATHER
& SHOES

■RUBBER.

1925 1926 1927

1925 1926 1927

1925 1926 192.7

1925 1926. 1927

1925 1926 1927

1925 1926 1927

1925 1926 1927

METALS 8
MINING

CHEMICALS
& DRUGS

BUILDING
SUPPLIES

STORES

TELEPHONE

OTHER
UTILITIES

RAILROADS

ioo|

1925 1926 1927

^ K o o | io o | H ^ K ^ | io o |

1925 1926 1927

A nnual N et




P r o f it s

CLASS I

of

1925 1926 1927

In d u s t r ia l,

1925 1926 1927

1925 1926 1927

M e r c a n t ile , a n d P u b lic U t i l i t y C o r p o r a t io n s ,
R a ilr o a d s , in P e r c e n t a g e s o f 1 9 2 6 .

and

N et

1925 1926 1927
O p e r a tin g

In c o m e

1925 1926 192.7
of

C la s s

I

32

MONTHLY REVIEW, APRIL 1, 1928

PERCENT

Business C onditions in the U nited States
(Summarized by the Federal Reserve Board)
RODUCTION and distribution of commodities increased further in Feb­
ruary, while wholesale commodity prices remained practically unchanged.
Commercial loans of member banks showed a larger increase in February and
the first half of March than at the same season in other recent years.

P

P r o d u c t io n

In d e x N u m b e r s o f P r o d u c t io n o f M a n u f a c t u r e s
a n d M in e r a ls , A d ju s t e d fo r S e a s o n a l V a r i a ­
t io n s (1 9 2 3 - 2 5 a v e r a g e = 1 0 0 p e r c e n t ) .

PERCENT.

Production of manufactures in February, as indicated by the Federal Re­
serve Board ’ a index, increased 3 per cent over January and was 2 per cent
larger than a year ago, while production of minerals declined slightly and
continued to be substantially smaller than last year. Factory employment and
payrolls showed a seasonal increase in February but continued at a lower
level than a year ago. Output of iron and steel, automobiles, and agricultural
machinery has increased considerably since the first of the year. Daily
average production of steel ingots in February was larger than in any other
month since last March, and current reports indicate that output was sus­
tained in the first three weeks in March. Production of nonferrous metals
also increased in February. Activity in the textile industries has shown little
change since the first of the year. Production of bituminous coal and crude
petroleum, which decreased in February, increased slightly in the first half of
March. Building contracts awarded were larger in February than in the
corresponding month of any previous year, reflecting chiefly a large volume
of awards for residential construction in the New York and Chicago Districts.
Contracts let in the first two weeks of March were in approximately the same
volume as in the corresponding period of last year.
T rade

of

Labor

S t a t is t ic s
(1 9 2 6
100 p e r c e n t).

Sales of wholesale firms in leading lines increased in February and were
slightly larger than a year ago, while sales of department stores, after allow­
ance for the customary seasonal changes, were in about the same volume as
in January and somewhat smaller than a year ago. Stocks of merchandise
carried both by wholesale firms and by department stores showed a seasonal
increase in February.

a verag e =

Freight car loadings have shown somewhat more than the usual seasonal
increase since the beginning of the year, but have continued to be in smaller
volume than in the corresponding period of last year, owing chiefly to much
smaller shipments of coal. Loadings of merchandise in less than carload lots
and of miscellaneous commodities have been less than in the corresponding
period of the last two years, while loadings of livestock and grain products
have been larger.
P r ic e s

M o n th ly A v e ra g e s o f W e e k ly F ig u r e s fo r M e m ­
b e r B a n k s in 101 L e a d in g C i t ie s ( L a t e s t
f ig u r e s a r e a v e r a g e s fo r t h r e e w e e k ly
r e p o r t d a t e s in M a r c h ) .

oormutciJ.PAPER f/~\_
r H ""A /
W i ___

“V
\
vnr •

\fZJLR.8AIL.--------

H

*ACJCEPTANrCE.r

-b

B ank

1_

The volume of Reserve Bank credit outstanding increased somewhat from
February to March, chiefly in consequence of increased borrowings by member
banks, which in part reflected further withdrawals of gold for export.

1925

1926

1927

1928

Weekly Rates in the New York Money Market.




C r e d it

From the middle of February to the middle of March the loans and invest­
ments of member banks in leading cities increased by $200,000,000, reflecting
a growth in the banks’ commercial loans. The banks’ loans on securities and
investments showed little change for the period.

J

1924

The general level of wholesale commodity prices, as indicated by the Bureau
of Labor Statistics index, remained practically unchanged in February at
approximately 96 per cent of the 1926 average. There were decreases in the
prices of cotton, sugar, nonferrous metals, chemicals, and rubber, as well as a
seasonal decline in dairy products. Increases occurred in prices of grains,
metals, hides and leather products, and steel. In the first two weeks in March,
prices of grains, hogs, and cotton advanced, while those of cattle and rubber
showed further declines.

During the four weeks ended March 21 conditions in the money market were
firmer; the rate on prime commercial paper increased from 4 to 4-4^4 per cent
and there were advances in time rates on security loans.