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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 S e c o n d Federal Reserve Agent F e d e r a l D is t r ic t August 1 , 1924 Federal Reserve Bank, New York B u s in e s s C o n d it io n s in t h e U n i t e d S t a t e s R ODU CTION of basic commodities and factory employment showed further large declines during June. Trade, both at wholesale and retail, also decreased during the month and was in smaller volume than a year ago. P P roduction The Federal Reserve B oa rd ’s index o f production in basic industries, adjusted to allow fo r seasonal varia tions, declined about 9 per cent, in June to a point 22 per cent, below the level o f the first two months o f the year. Iron and steel and cotton m anufacturing indus tries continued to show the most marked curtailment o f activity, and decreases were general in other industries. Factory employment decreased 3 per cent, in June, the metal, automobile, textile, and leather industries report ing the largest reductions in forces. Value o f building contracts awarded in June was 8 per cent, smaller than in May, though 4 per cent, larger than in June o f last year. Condition of the corn crop on July 1, as reported by the Department of A griculture, was the lowest on record fo r that date and indicated a probable yield o f about 500,000,000 bushels less than last year. Condition o f the cotton crop was reported less satisfactory than a PERCENT. Index off 22 Basic C?pimodities corrected for seasonal Variation (1919 = 100 Per tfent. Latest figure June) R e s e r v e month earlier, while forecasts fo r wheat and oats were larger than in June. T rade Railroad shipments decreased in June and were about 15 per cent, less than a year ago, owing to smaller load ings o f all classes o f freight except grain and livestock. Wholesale trade showed a further slight decline in June and was 11 per cent, smaller than a year ago. Sales of hardware, drugs, shoes, and dry goods decreased, while sales o f groceries and meat increased slightly. Sales of department stores and chain stores showed more than the usual seasonal decrease during June and were smaller than last year. Mail order sales in June showed less than the usual seasonal decline and were larger than a year ago. Department stores further reduced their stocks o f merchandise and slightly increased their outstanding orders. P rices Wholesale prices, as measured by the index o f the Bureau o f Labor Statistics, declined more than one per cent, in June to a level 5 per cent, below the high point fo r this year. Prices o f all groups o f commodities, except clothing, showed declines and decreases were par ticularly large fo r building materials. D uring the first three weeks o f July quotations on wheat, corn, and hogs advanced sharply, while prices o f sugar, cotton goods, and iron and steel products were lower. PER CENT. Index of 0. S. Bureau of Labor Statistics (1913 = 100 Per cent, base adopted by Bureau. Latent figure June) 2 MONTHLY REVIEW. AUGUST 1.1924 PER CEN T BtUJOtlS O r DOLLARS Index of Employment in Manufacturing Industries (1919 Average = 100 Per cent. Latest figure June) B a n k C redit Commercial loans at member banks in leading cities during June and the first two weeks o f July remained at a relatively constant level, considerably below the peak reached in A pril, while investment holdings and loans secured by stocks and bonds increased rapidly and carried total loans and investments to the high point fo r the year. Demand deposits, owing partly to the growth o f bankers’ balances at financial centers, ad vanced to a record level. A t the Reserve Banks there was a continued decline in discounts and an increase in purchases o f Govern ment securities in the open market. A s a consequence, total earning assets in the middle of J uly were only slightly less than at the beginning o f June. Member bank reserve balances increased rapidly, reflecting a return flow o f currency from circulation and further imports of g old ; total deposits at the Reserve Banks on July 16 were larger than at any time since the organization o f the System. Money rates in J uly were comparatively steady but continued to show a somewhat easier tendency. Dis count rates at the Federal Reserve Banks o f Kansas City and Dallas were reduced during J uly from 4y 2 to 4 per cent. B a n k in g C o n d i t io n s in t h e S e c o n d D i s t r i c t Between the middle o f June and the middle o f July the deposits o f reporting member banks in this district showed a further increase o f $100,000,000 to a new high point and their loans and investments increased by a somewhat larger amount, due to increases both in loans on stocks and bonds and in investments. Loans largely fo r commercial purposes were somewhat lower and about $100,000,000 below the high point of the year reached in the spring, reflecting the decrease in general business activity. Comparison o f the figures fo r New Y ork City, fo r the Second District, and fo r the country indicates that more than half the expansion o f loans and deposits Reserve Bank Credit— Weekly Figures for 12 Banks (Latest figure July 23) Federal Reserve shown by all reporting banks in recent weeks has been in the New Y ork City banks. W hile the deposits o f all reporting banks have expanded by a billion and a quar ter dollars since the first o f March, those o f banks in New Y ork City alone have expanded by over 700 mil lions in the same period. This expansion in bank credit and the ease in money conditions which has accompanied it may be traced largely to the cumulative effect o f continued gold im ports, a movement o f funds from the interior and some return o f currency from circulation. The rapidity o f the changes in money conditions in the past two months, however, may be further and more immediately ac counted fo r by a change in the relationship between New Y ork City member banks and the Federal Reserve Bank. E arly in June the New Y ork C ity member banks practically extinguished their indebtedness to the R e serve Bank. Up until that time these banks had been almost continuously in debt at the Reserve Bank fo r many months, with the exception o f a few brief periods. Under these conditions gold imports or other funds received were utilized to pay off loans at the Reserve Bank and the funds were thus retired from circulation, without the creation o f additional bank credit and with but little effect on m oney conditions. B ut with member banks out o f debt at the Reserve Bank any gold or other funds received were added to their reserves and became immediately available as the basis fo r increased deposits and loans and investments and exercised a direct influ ence toward easier money conditions. The accom panying diagram shows by days since the first o f the year the discounts and advances o f the Federal Reserve Bank o f New Y ork fo r New Y ork City banks, and shows also the changes in the prevail ing rates o f interest fo r prime com mercial paper in the open market and the call loan renewal rate. The diagram shows that declines in rates were simultaneous with the retirement o f borrowings at the Reserve Bank. The tem porary increase in Reserve Bank advances early in J uly is accounted fo r largely by the demands for FEDERAL RESERVE AGENT AT NEW YORK currency over the Fourth o f J uly holiday and some temporary loss o f funds to the interior in connection with the usual first o f the month disbursements. A fte r the early part o f the month the flow o f funds tended to be toward New York. D a i l y B o r r o w in g s b y P r in c ip a l N e w Y o r k C i t y M e m b e r B a n k s fro m th e F e d e r a l R e s e r v e B a n k , a n d R a t e s fo r C o m m e rc ia l P a p e r a n d C a ll L o a n R e n e w a ls . ( L a t e s t fig u r e s J u l y 2 6 ) Further details o f the changes in the bank situation appear in the follow ing table, which presents a rough balance sheet o f the changes between March 5, approxi mately the low point o f the year, and J uly 16, fo r some of the m ajor resource and liability items o f all reporting banks and those located in New Y ork City alone. The table shows that member bank bills payable and redis counts at the Reserve Banks have been largely reduced and reserve balances increased fo r all reporting banks and fo r New Y ork City banks. These increased re serves, capable under the law o f supporting nearly ten times their amount in deposits (aside from usual cur rency requirements), have foun d employment, as indi cated by the increases shown in the table, chiefly in loans on stocks and bonds and in investments in securities. Changes from March 5 to July 16, 1924 (In millions of dollars) Reporting member banks All reporting in New York City member banks Resources: Loans on stocks and bonds................................ All other loans (commercial)............................. Investments........................................................ +315 — 55 +271 + 363 — 77 + 453 Total loans and investments........................... .. Balances at Federal Reserve Banks.................. Due from banks1 .................................. .. Cash........................................................... .. +531 +135 + 25 — 1 + 739 + 176 + 232 — 6 Total (selected items only)........................ +690 +1,141 Liabilities: Net demand deposits.............. .................... .. Time deposits................. ................................... Government deposits................ ......................... +655 + 85 — 17 + 987 + 287 — 23 Total deposits.................................................... Bills payable and rediscounts............................ +723 — 24 +1,251 — 178 Total (selected items only)*.......................... +699 +1,073 1 Reserve Bank cities only. * The difference between this total and total resources may be accounted for by changes in items not reported and the fact that net demand deposits as reported do not include all “ due to banks” , which have increased 246 millions in New York City and 421 millions in all Reserve Bank cities. M o n e y R a te s In July money rates generally held near the low levels reached in June, except fo r a tem porary advance in call money and acceptances at the first o f the month which accompanied a shifting o f funds incident to J uly 1 disbursements. The open market rate on prime commercial paper de clined an additional % o f one per cent, to 3 % - 3 Y2 per cent., the lowest since 1916. B uying by banks in New Y ork and other large centers continued active, but buy ing by country banks was curtailed as a result o f the decline in rates. The supply o f paper was somewhat larger, and the total volume outstanding through 26 reporting dealers increased slightly to $865,000,000. D ealers’ portfolios o f bankers’ bills rose early in July to the highest level since Spring, accom panying the tem porary firmness in money. A rise o f Ys o f one per cent, to 2*4 per cent, in dealers’ buying rates on 60-90 day bills, follow ed in some cases by an advance o f % to 2 % per cent, in offering rates, led to a later decline in port folios to approxim ately the low point fo r the year. A ccom panying this decline rates receded to their form er levels. Yields on short term Government securities were slightly lower in July. In the Stock Exchange money market, loans fo r 60-90 days declined % o f one per cent, to 2 ^ - 2 % per cent, and six m onths’ maturities were quoted at 3 % per cent. Call money after a period o f tem porary firmness at the first o f July returned to the 2 per cent, level reached early in June. S e c u r it y M a r k e t s The continued flow o f funds into the security markets fo r employment was reflected by a further advance in bond prices in July. In active trading, the Liberty 4 1/4 per cent, issues reached higher prices than ever before, and the W all Street Journal average o f 40 high grade corporation issues rose about a point to levels close to the highest fo r recent years. In the stock market also, continued easy money was accompanied by enlarged trading and rising prices. Transactions rose to above a m illion shares daily fo r the first time since February. P ublic utility and railroad issues were especially strong and price averages in the latter group reached the highest levels since 1922. In dustrial stocks also rose sharply and recovered most o f the loss sustained earlier in the year. The volume o f new securities offered was somewhat smaller in July than in June, in keeping with the usual seasonal tendency. Both fo r the quarter and fo r the first six months o f the year, however, the totals were sub stantially larger than fo r the corresponding periods o f 1923, due to an increase in issues involving new capital. R efunding issues were smaller than a year ago. A factor in the larger volume o f new issues sold here in the past six months has been an increase in offerings o f foreign securities. These increased from $237,000,000 in the final half of last year to $384,000,000, and were the largest fo r any six months period since the first part o f MONTHLY REVIEW, AUGUST 1, 1924 4 1922. The accom panying diagram compares the volume o f foreign financing in the New Y ork and London mar kets by six months periods in recent years. E xcept fo r the first part o f 1923, the volume sold in New Y ork has been consistently larger in recent years than that sold in London, notwithstanding that rates fo r long term funds have continued to be somewhat higher in this country than in London. 669 S 3 NEW YORK 1 H LONDON been paid off or refunded into the long term Treasury bonds o f 1947-1952, or Treasury notes aggregating $3,700,000,000 distributed in convenient maturities at the tax periods during the next three years. (In millions) 1920 1921 1922 1923 1924 Liberty Loan Bonds... $16,304 Victory notes............... 3,468 Treasury 4J4% bonds. Cert, of Indebtedness.. ’ *3,625 Treasury notes............ Treasury Savings Cert. ‘ ” 954 1919 $15,335 4,246 $15,235 3,914 $15,082 1,991 $14,887 $14,378 * 2,769 * " 828 ’ 2,699 311 694 ’ 1,829 2,246 679 ' ‘ * 764 1,032 4,104 337 * **764 808 3,735 413 Total War D ebt.. $24,351 $23,178 $22,853 $21,827 $21,124 $20,098 481 442 404 384 Receipts o f United States currency from abroad by banks in this district continued in June to exceed ship ments to foreign countries by an increasing margin. Total net receipts amounting to $6,288,000 were the largest fo r any month fo r which reports have been re ceived. The large excess o f receipts continued to reflect chiefly smaller shipments to central and eastern Europe, and increased receipts from England, H olland, Ger many, and Switzerland. The follow ing table gives the total figures by months. n Ip; JAN-JUN. JUL'DEC 192.1 Par JAN-JUN JUL-DEC 19ZZ JAN-JUN JUL-DEC- 19£3 Value o f F o r e ig n C a p ita l Is s u e s O ffe red in N e w Y o r k L o n d o n b y S ix M o n th P e r io d s in M illio n s o f D o lla r s . ( P o u n d s C o n v e rte d a t C u r r e n t R a te s o f E x c h a n g e ) and G ov ern m en t D e b t The preliminary Treasury statement o f the public debt at the close of the fiscal year ended June 30, 1924, shows a reduction of $1,099,000,000 in the year in the total gross debt from $22,350,000,000 to $21,251,000,000. This is the largest reduction in any year since 1920, when nearly $900,000,000 of the decrease was accom plished out o f the general fu n d balance. In addition to the regular purchases fo r the sinking fund, the use o f $135,000,000 from the general fun d balance and the payment b y the British Government o f $111,000,000 in United States securities on account o f $161,000,000 in terest and principal due on its debt to this Government, there was available fo r debt reduction at the end o f the fiscal year a surplus of Government receipts over ex penditures amounting to over $500,000,000. This sur plus was partly the result o f a decrease in expenditures below the estimates and partly due to the receipt o f funds from the sale of railroad loans held by the Gov ernment and receipt o f $50,000,000 in cash from Great Britain, representing the balance due this year on its debt. The accom panying table shows the changes in the various classes of the war debt at the close o f each fiscal year since June 30, 1919. D uring this period the volume o f Liberty bonds outstanding has been reduced by about 2 billions. A pproxim ately $4,250,000,000 in V ictory notes and $2,817,000,000 in Treasury certificates have F o r e ig n S h ip m e n t s o f U n it e d S t a t e s C u r r e n c y 1923 Shipments Receipts May......... June......... July.......... Aug.......... Sept.......... Oct........... Nov.* Dec........... $3,916,000 2.473.000 3.051.000 1.684.000 7.842.000 3.095.000 3.195.000 3.825.000 $2,341,000 2.568.000 2.824.000 6.161.000 3.723.000 2.109.000 2.621.000 933,000 $1,575,000 1924 Jan........... Feb........... Mar.......... Apr........... May*....... June......... 5.694.000 6.989.000 2.095.000 940.000 292.000 681.000 1.374.000 1.463.000 2.074.000 2.601.000 5.206.000 6.969.000 4.320.000 5.526.000 Total... $45,772,000 $42,967,000 $20,240,000 Net Shipments ' 227,666 4,119,666 Net Receipts $ 95,000 4,477,606 986.000 574.000 2.892.000 21,000 1,661,000 4.914.000 6.288.000 $17,435,000 ♦Revised figures Since May 1923 banks in this district have also fo r warded $32,000,000 to Cuba by wire transfer through this bank and the Reserve Banks o f Boston and Atlanta. O f this amount, $17,000,000 has been forw arded this year. F o r e ig n E x c h a n g e Contrary to the usual seasonal tendency, sterling rose more than 8 cents in July to a new high point fo r the year at over $4.41, or about 10 cents above the level of June 1. French and Belgian francs, on the other hand, were somewhat lower than in June. Dutch, Swiss, and Canadian exchange rates advanced in July, and the Danish rate recovered partly from the sharp break that follow ed abandonment o f the Govern- FEDERAL RESERVE AGENT AT NEW YORK G o ld M o v e m e n t Imports o f gold in June totaled $25,181,000 and were the smallest for any month since June last year. Figures fo r the Port o f New Y ork indicate some further decline in the volume of imports in the first three weeks o f July. O f the June imports, $13,000,000 came from England, $4,000,000 from Argentina, and over $2,000,000 each from Canada and the Netherlands. E xports totaled only $268,000. F or the first six months o f this year net imports amounting to $222,387,000 were the largest fo r any six months period since 1921. The follow ing table shows the net imports by principal countries by six months periods, fo r the past year and a half. A pproxim ately half o f the large imports o f the past six months have been from Great Britain. (000’a omitted) Country England....................................... Germany..................................... France......................................... Sweden........................................ Netherlands................................ British India............................... China & Hong Kong................. Canada........................................ Mexico......................................... Argentina.................................... All Other..................................... Net Imports............................ 1923 First Half 1924 Second Half $ 41,961 26,889 5,010 3 6,009 13,327* 1,391 30,993 318 55 10,975 $105,010 22,726 11,366 $109,641 $184,432 2 7.193 1,311* 2,029 16,676 2.194 5,233 13,314 First Half $110,492 4,819 9,749 6,192 34,499 ' 5,i43 25,677 1,162 8,458 16,196 $222,387 ♦Net Exports F o r e ig n T r a d e Exports o f merchandise during June declined to $307,000,000 and were the smallest of any month since Ju ly 1923. Imports also showed a falling off, and at $277,000,000 were the smallest since September 1923. The excess of exports over imports fo r the fiscal year ended June 30 was $754,000,000 as com pared with $176,000,000 in 1922-23, $2,862,000,000 in 1920-21, and $471,000,000 in 1913-14. The increase in the export balance in 1923-24 over the preceding year was the com bined result of a decline in imports and an increase in exports, largely in consequence of heavy shipments of cotton at high prices, which more than offset a decline in foodstuffs. On the import side, the greatest decreases occurred in the group of crude materials fo r use in manufacturing, particularly in silk and rubber. P r o d u c t io n In June industrial activity declined further and in some o f the m ajor industries was the lowest in more than two years. Late in July, however, there was evidence o f some recovery in the volume o f buying and in production. Iron and steel production decreased over 20 per cent, to the lowest since the winter o f 1921-22, and mills at the close o f June were estimated to be operating somewhat under 45 per cent, o f maximum capacity, compared with over 90 per cent, three months previous, while early in July there was a further decrease in the rate o f output. B uying and production increased slightly later in the month. Unfilled orders o f the Steel Corporation at the end o f June were the smallest since May 1911. M ill consumption o f cotton declined 15 per cent, to the smallest in 10 years, excepting only the last two months o f 1920, and this ban k ’s index at 61 per cent, o f normal, as measured by the trend o f past years, was close to the lowest ever reached. W oolen mill activity at 76 per cent, o f the trend was the lowest since A p ril 1921. Both in cotton and woolen goods, however, the market was more active late in July. A further decline in automobile production cut the total for June 35 per cent, below June o f last year, and automobile truck production also declined heavily. In the week o f July 22, however, employment at automobile plants at Detroit increased slightly fo r the first time since March 18. Bituminous coal production continued near the low level reached in A pril, but this ban k ’s index, which allows fo r seasonal changes, shows further decline. The follow ing table shows this ban k ’s indexes o f production expressed as percentages o f the com puted trend, with allowance fo r seasonal variations. (Computed trend of past years=100 Per cent.) 1923 1924 Jan.-June Average Producers' Goods Steel ingots............................... Bituminous coal....................... Copper, U. S. mines................ Tin deliveries........................... Zinc*......................................... Petroleum................................. Gas and fuel oil........................ Cotton consumption................ Woolen mill activity*.............. Cement..................................... Lumber..................................... Leather, sole............................. 113 114 109 93p 114 80 131 104 104 115 143 124 Newsprint................................. Paper, total.............................. Boots and Shoes....................... Anthracite coal........................ Automobiles, all....................... Automobiles, passenger........... Automobiles, truck.................. 102p 104 75 si* 89p 151 100 ‘ 74* 105 126 95 Consumers' Goods Cattle slaughtered................... Calves slaughtered................... Sheep slaughtered.................... Hogs slaughtered..................... Sugar meltings, U. S. ports. .. Wheat flour.............................. Cigars........................................ Cigarettes................................. Tobacco, manufactured.......... Gasoline.................................... 92 94 90 toco© •eti m ent’s stabilization plan. Brazilian quotations declined in consequence o f internal political disturbances. The return to a gold basis by Sweden on A p ril 1 has been follow ed by a slight advance in the external rates fo r krona, while the more evenly balanced state o f Japanese foreign trade in M ay and June has caused a further recovery o f about 1 cent in the value o f the yen. Italian exchange continued com paratively stable; during the past year lire have deviated less than 7 per cent, from the average, compared with fluctuations o f 20 to 25 per cent, in the French and Belgian francs. 5 112 114 109 89 91 119 110 117 101 116 154 113 111 109 105 134 138 120 * = Seasonal variation not allowed for. ii2* 101 90p 94 125p 129p 109p 1924 April May 101 81 74 77 98 96 78 128 105 70 84 139 i 95 Ui ' 99 143 73 127 110 82 87 136 128 71 106 130 89 126 117 117 77 85 97 128 150 114 107 101 85 125 131 102 p—Preliminary 120 66 118 127 101 118 103 122 85 92 June 66 61 73 98p 71 71 6i 76p 138 63* 91p 117p 93 119 108 120 101 122 138 119 91 ioe 90 85p 108 113 89 92p 97p 76p 102 88 86 MONTHLY REVIEW, AUGUST 1,1924 6 I n d e x e s o f B u s in e s s A c t i v i t y Indexes o f trade and business activity generally showed larger declines in June than in previous months. Wholesale trade in this district declined to 76 per cent, o f the com puted trend, the lowest in any month fo r which comparative figures are available. Department store and chain store sales were also smaller, but mail order trade increased, accom panying higher farm prices. W hile railroad shipments of merchandise and miscel laneous freight were smaller than a year ago, they were approximately equal to normal, as measured by the trend o f past years. In the first two weeks of July, loadings o f grain and livestock were higher than a year ago. The index o f bank debits outside New Y ork City de clined in June but was equal to the com puted trend of past years, while the index fo r New Y ork City remained well above the trend. A further decline o f 3 per cent, in factory employment in New Y ork State, follow ing the reductions in the preceding two months, carried this bank’s index down to the lowest point since May 1922. There was also a substantial decline in postal receipts. (Computed trend of past years==100 Per cent.) 1923 W a g e s a n d E m p lo y m e n t Reports to this bank from representative employers in this district indicate that wage rates in general have held steady during recent months notwithstanding the sharp d ecline'in the volume o f factory employment. A wage rate averaging 48 cents an hour fo r unskilled labor in J uly was the same as in A p ril and the same as in June 1923. A ll employers, however, report a con siderable surplus o f labor, frequently o f skilled as well as unskilled, and a marked reduction in the labor turn over. Practically all employers express themselves as anticipating little decrease in the labor surplus in the near future. The follow ing diagram indicates the course o f this bank’s index o f unskilled labor wages, together with a price index o f 20 basic commodities. D uring the past year, while wages have been stationary, the index o f basic commodities declined 8 per cent., until the rise o f the past few weeks. 1924 1924 Jan.-June Average June in prices o f lumber, structural steel, plate glass, and certain paint materials, which resulted in a de cline o f 4.2 per cent, in the Department o f L a b o r’s building materials index. This was follow ed in J uly by further decreases in lumber and brick. Apr. May June 100 99 99 96 86 P rim ary Distribution Car loadings, merchandise and miscellaneous........................ Car loadings, other.................. Wholesale trade, Second Dis trict ...................................... Exports..................................... Imports..................................... Grain exports........................... Panama Canal traffic.............. 108 117 105 106 110 102 106 82 118 95 90 108 69 136 112 110 76 89 105 74 125 102 94 96 96 103 95 97 105 112 93 97 99 101 91 93 103 105 102 ‘ 99* 96 102 102 94 i03‘ 93 110 104?* 108z> 107 105 105 109 99p 109p 94 109 101 108 93 113 111 112 141 97 90 75 129 91 65 129 Distribution to Consumer Department store sales, Second District*............................... Chain store sales*.................... Mail order sales....................... Life insurance paid for............ Amusement receipts................ Magazine advertising.............. Newspaper advertising............ 99 100 97 99 97 113 95 108 General Business Activity Bank debits, outside of New York City............................. Bank debits, New York City . Postal receipts......................... Electric power.......................... Employment, N. Y. State fac tories ..................................... Business failures....................... 108 103 110 103 94 100 96 104 102 97 108 90 * = Allowance made for late Easter. p=Preliminary. B u ild in g There was a furth er decline in June in the value o f building permits issued in 158 selected cities and in the F . W . Dodge C orporation’s report o f contracts awarded in 36 States. In both cases, however, the monthly totals are higher than a year ago, when there was a tem porary lull in building operations. Indications o f changing tendencies in the building materials situation appeared in substantial reductions in Wages of Unskilled Labor compared with Prices of Basic Commodities (1913 average = 1 0 0 Per cent.) F actory employment declined an additional 3 per cent, in June both in the country as a whole and in New Y ork State, making the net decline since March o f this year approxim ately 10 per cent., and bringing the index o f factory employment to the lowest since the summer o f 1922. Because o f part time employment the reduction in payrolls was even greater. D u rin g the past month the decline in employment was more general than heretofore and was apparent, to some extent, even in building materials industries, which heretofore have been maintained at a high level o f activity. The few increases were chiefly in seasonal industries such as m en ’s clothing and food products. In part, the supply o f labor released from factories has been absorbed by seasonal outdoor occupations, such FEDERAL RESERVE AGENT AT NEW YORK as work on the farms. State employment offices report a slight increase in the first half o f July in the ratio o f requests fo r workers to applicants fo r work. This ratio, however, remained below the average fo r the entire month o f June, and considerably below the aver age o f earlier months of the year. C rop s 7 W hile the general tendency o f prices o f agricultural commodities has been upward, prices o f many other basic materials have continued to sag. Reflecting these diverse movements the index o f prices o f 20 basic com modi ties computed by this bank, rose 6.3 per cent, between June 21 and July 26. The Department o f Labor index o f prices o f more than 400 commodities was 1.6 per cent, lower in June than in May. In its July forecast, the Department of A griculture placed the condition of the corn crop lower than ever before at this season, and notwithstanding a small in crease in acreage planted, the indicated crop was 17 per cent, smaller than last year and 13 per cent, below the five year average. A n unusually cold May fo l lowed by an excessively wet June were responsible fo r the poor condition o f the corn crop, but were favorable fo r the wheat, oats, barley, and rye crops, the estimates fo r which were above the June figures. A fter rising 5.6 points in June, the condition o f the cotton crop declined 2.7 points to 68.5 by July 16, but the prospective crop at 11,934,000 bales was still 18 per cent, larger than last y ea r’s harvest. The follow ing table compares the July forecasts of yields this year with the final estimates fo r 1923 and with a five year average. Average Prices at Chicago of Wheat (No. 2 Red Winter) and Corn (No. 3 Mixed Yellow) (Latest Figures July 26) (In millions) Crop Winter wheat................................ Spring wheat................................. All wheat....................................... Corn............................................... Oats................................................ Potatoes......................................... Tobacco......................................... Hay................................................ Cotton............................................ Apples............................................ Unit Bushel Bushel Bushel Bushel Bushel Bushel Pound Short ton Bales Bushel 1918-1922 Average Harvest 625 256 881 2,899 1,303 490 1,361 86 10.9 167 1923 Harvest 572 213 785 3,046 1,300 509 1,491 89 10.1 197 1924 July Forecast 543 197 740 2,515 1,356 464 1,294 90 11.9 196 C o m m o d i t y P r ic e s The tendency of commodity prices to d rift steadily lower was cut short by the sharpest rise in grain prices in two years. A s the accom panying diagram shows, corn reached the highest level since 1920 with a 44 per cent, rise from an average price o f 77 cents in May to $1.11 at the end o f the third week o f July, a figure more than double the price in the fall o f 1921. W heat prices in July were the highest since May 1922, and showed an advance of nearly 25 per cent, since the first o f June and o f 44 per cent, from the lowest point o f 1923. Prices of other farm products have moved irregu larly. The first effect o f higher corn on the market fo r hogs was a decline in prices, caused by heavy shipments to avoid the higher cost o f feeding. In July, however, the effects of higher priced feed were apparent in a 28 per cent, advance in hog prices. Prices paid fo r cattle have shown little tendency to rise. W ool reached the lowest level since May 1922 in the first week o f July, but made a substantial recovery in the follow ing two weeks. W h o le s a le T r a d e Wholesale trade continued to decline in June, and this bank’s weighted index o f sales o f 163 dealers in 11 principal lines was 17 per cent, lower than a year ago and at the lowest point in the past five years. E xcept fo r diamonds and drugs, sales in all reporting lines were smaller than in June 1923, but the declines were especially large in cotton goods, w om en’s clothing, and machine tools, fo r which they ranged from 35 to nearly 50 per cent. Grocery and hardware sales were also considerably smaller than last year, and stationery sales fell below the year previous fo r the first time since October. The follow ing table compares sales in June in the different wholesale lines with June sales in previous years. Dollar Value of June Sales (June 1923=100 Per cent.) (a) Cotton................................ (b) Silk..................................... (6) Women’s dresses............... (c) Women’s coats and suits.. Machine Tools............................. Weighted Average................... 1920 1921 1922 1923 1924 90 98 136 106 165 161 125 54 85 82 114 120 77 99 100 100 100 100 100 100 100 100 100 100 110 104 186 94 77 90 72 95 84 75 70 80 125 153 117 96 157 92 103 90 82 39 86 93 99 63 48 100 100 100 100 100 71 87 54 135 89 87 100 112 86 88 75 88 108 94 92 92 87 85 77 65 88 68 58 83 MONTHLY REVIEW, AUGUST 1, 1924 D ep a rtm en t S tore Business Sales by department stores in this district fo r June were 2 per cent, smaller than in June a year ago and 9 per cent, below the computed trend of past years, after allowance fo r seasonal variation. The decline in sales occurred in all reporting cities except Newark and Rochester, and was particularly large in Buffalo and Syracuse, where large reductions have occurred in fac tory employment. E xcept fo r woolen goods, furniture, and other home furnishings, sales in all the m ajor departments o f the stores were smaller than in June 1923. Per cent. Change in Sales over June 1923 Woolen goods................................... Furniture.......................................... Home furnishings....................... Women’s ready-to-wear accessories Women’s & Misses’ ready-to-wear. Hosiery............................................. Shoes................................................. Men’s and Boys’ wear.................... Cotton goods.................................... Silk goods......................................... Miscellaneous................................... +22.6 + 5.6 + 0.6 — 1.6 — 1.8 — 1.8 — — — — 3.3 4.0 4.8 5.4 — 2.8 Sales by mail order houses in June were 4 per cent, larger than a year ago, and after allowing fo r the usual seasonal variation and price changes, were about 3 per cent, above the trend o f past years. The follow ing table gives the detailed changes in department store sales in June and stocks on July 1 o f this year and previous years. Net Sales during June (June 1923=100 Per cent.) 1920 1921 1922 1923 1924 1920 1921 1922 1923 1924 Per cent. Sales of each Dept, to Sales of all Departments Elsewhere, 2d Dist................. 1.3 5.4 13.7 17.9 10.9 3.8 4.0 8.7 5.4 5.3 23.6 C h a in S t o r e S a le s Stocks of goods held by department stores on July 1 were 2 per cent, larger than a year ago, the same increase as was shown June 1, but considerably smaller than the increases shown earlier in the year. The tendency o f the stores to keep stocks at the lowest possible level is re flected in the figures o f the outstanding orders o f the stores fo r goods. The diagram at the foot o f the page, com paring the percentages of these orders by months to total purchases of the stores the year before, indicates that on June 1 the amount o f advance ordering was at the lowest level in recent years, a condition reflected also by the sharp decline in wholesale trade. On July 1 the volume of advance ordering showed an increase. Stock on Hand July 1 (July 1, 1923=100 Per cent.) All dept, stores................... Mail order houses................... 98 93 87 92 95 107 94 87 90 90 83 94 86 100 99 112 94 95 100 100 100 94 115 101 96 100 107 100 102 118 87 87 100 105 100 103 150 104 102 100 109 100 87 144 113 96 100 105 86 100 91 114 96 97 100 99 91 100 92 101 100 99 100 96 90 100 95 91 82 90 100 107 95 98 89 72 90 100 98 112 79 100 104 92 89 80 90 85 86 92 91 95 100 102 94 Sales by chain stores were 5 per cent, larger in June than in June a year ago, chiefly due, however, to the opening o f new stores. A ll types o f stores reported decreases from last year in the volume o f sales per store. The detailed changes are shown in the follow ing table. Number of Stores Per cent. Change in sales per store June 1923 to June June June June June 1920 1921 1922 1923 1924 June 1924 Dollar Value in Percentages Type of Store June 1923 June 1924 15,396 438 1,817 134 305 2,759 309 18,443 576 1,952 149 368 2,772 317 85 67 72 7J 89 95 67 73 71 78 88 94 89 21,158 24,577 81 72 88 80 75 82 78 83 91 108 107 105 100 86 100 100 100 100 100 100 100 99 96 92 — 10.2 — 18.4 — 2.1 — 10.1 — 18.0 — 4.5 — 10.2 81 100 105 — 9.5 M IL L IO N S OF DOLLARS £00. r STOCKS 192.4___ 192?^ 100 90 80 70 60 50 SALES 1924 40 ig2.3\ SO 20 M o n t h ly P e rc e n ta g e s o f O u ts ta n d in g O rd e rs to T o t a l P u r c h a s e s in P re v fo trs Y e a r o f R e p r e s e n ta tiv e D e p a r tm e n t Sttfrefs h i th e Setttmd D i s t r i c t ( L a t e s t fig u r e J u l y 1 ) JAN. FEB. MAR-APR NAY JUN. JUL. AUG. SEP. OCT. NOV. DETC. S a fe s and S tc tk * on H a n d o f R e p r e s e n ta tiv e in th e S e co n d D i s t r i c t D e p a rtm e n t S to re s
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