The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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 Reserve Bank, New York Federal Reserve Agent B u siness C on d ition s in the U n ite d States H E output of ind ustry declined substantially in Ju n e to a level close to that of a y e a r ago, reflect ing reduced activity both in mines and in fa c tories. The value of building contracts aw arded was the largest fo r any month on record. The general level of prices remained p ractically unchanged. T P r o d u c t io n Production of iron and steel and automobiles declined considerably in Ju n e and curtailm ent in these industries continued du ring the early p a rt of J u l y . There were also decreases in Ju n e in silk deliveries, sugar refining, and production of lumber, copper, and anthracite coal. Cotton and woolen m ills continued active fo r this season of the year, and consumption of ra w cotton w as larger than in an y previous Ju n e on record. M eat packing, shoe production, and the m anufacture of building m a terials showed increases. Production of m anufactures, as a group, was sligh tly large r in Ju n e than in the same month of 19 26 , but output of minerals, owing largely to decreased production of coal, was in sm aller volume than a yea r ago. The value of building contracts aw arded in Ju n e was larger than in an y previous month on record, owing chiefly to the steady increase w ithin recent months of contracts fo r public works and public utilities. A w a rd s were p a rticu la rly large, as com pared with previous months of this y e a r and w ith Ju n e of last .PERCENT . August 1> 1927 year, in the N ew Y o rk and Chicago F e d e ral Reserve D istricts. Contracts were aw arded du rin g the first h alf of J u l y in p ra ctica lly the same volume as in the corre sponding period o f last year. On the basis of conditions on J u l y 1 forecasts of the D epartm ent of A g ricu ltu re indicate increases as com pared w ith the 19 2 6 harvested production in the output of wheat, oats, barley, rye, hay, and potatoes, and de creases in corn, tobacco, and the p rin cip al fru it crops. Cotton for which no production estimate was given, shows a decrease of 1 2 per cent in acreage planted, while the total area planted to all crops shows a reduction of 2 per cent. A reduction of 371,00 0,000 bushels in the estimated production of corn, com pared w ith 19 2 6 , indi cates the smallest crop since 19 0 1. T r ade W holesale trade in most leading lines increased sligh tly between M a y and Ju n e , while retail trade showed less than the custom ary seasonal decline. Sales of departm ent stores were in about the same volume as a ye a r ago while those of m ail order houses and chain stores were larger. Sales of meat, d ry goods, and h ard w are at wholesale were sm aller than in Ju n e of last year, while sales of groceries, shoes, and drugs were about the same in volume. Inventories of departm ent stores de clined fu rth er to a level about 3 per cent below that of Ju n e 19 26 . PER CENT TUNER AL0 NJ V A / I MANUFRCTll RE5 1923 1924 1925 1926 1 9 27 Index Numbers o f Production o f Manufactures and Minerals, Adjusted for Seasonal Variations. (1923-25 average = 1 0 0 per cent.) Federal Reserve Board’s Indexes of Value of Building Contracts Awarded, as Reported by the F. W . Dodge Corporation. (1923-25 average = IOO per cent.) 58 MONTHLY REVIEW, AUGUST I, 1927 TERCENT. 200|----175 150 •144 WHOLESALE PRICES 125 100 75 50 25 1923 192.5 192.4 1926 1927 W holesale Price Index of United States Bureau of Labor Statistics. (1913 average = 100 per cent.) Stocks carried by wholesale firms showed no change for the month and were smaller than a year ago. Daily average freight-car loadings failed to show the custom ary seasonal increase between May and June and were in smaller volume from early in May to the middle of July than during the corresponding period of last year. P r ic e s The general level of wholesale commodity prices, according to the Bureau of Labor Statistics index, con tinued practically the same in June as in the two pre ceding months. The prices of agricultural commodities as a group declined slightly while the average for the non-agricultural group remained practically unchanged. There were declines between May and June in the prices of silk, iron and steel, nonferrous metals, build ing materials, and rubber and advances in grains, cot ton, hides and skins, and anthracite coal. During the first three weeks of July prices of wheat, bituminous coal, iron and steel, and rubber declined while those of livestock, cotton, wool, copper, and hides advanced. B an k C r e d it The demand for member bank credit decreased from the latter part of June to the middle of July and on July 20 the loans and investments of member banks in leading cities were more than $200,000,000 lower than a month before. The decline was principally in the banks7 investment holdings and in loans secured by stocks and bonds. Loans for commercial, agricultural, and industrial purposes decreased by about $45,000,000. Demand for Reserve Bank credit in connection with settlements at the end of the fiscal year and increased currency requirements over the holiday period carried total discounts for member banks on July 6 to the high est level since the first of the year. Thereafter, largely in consequence of the return flow of currency from cir culation, there was a decreased demand for member bank accommodation and on July 20 total discounts were in somewhat smaller volume than four weeks ear lier. Holdings of United States securities showed a slight increase during July. Monthly Averages of W eekly Figures for Member Banks in 101 Leading Cities. (Latest figures are averages for three weekly report dates in July.) M on ey M ark et The usual tightening of the money market over the period of mid-year financial settlements and holiday currency requirements resulted in a temporary advance in money rates at the end of June to the highest levels since the beginning of January. Following the holiday, however, there was a large return flow of currency from circulation, some decrease in credit demands, and sub stantial transfers of funds to New York. As a conse quence the borrowing of member banks at the Reserve Bank decreased and money rates declined in the third week of July to approximately the lowest levels of the year. Stock Exchange call money declined on July 21 to 31/2 per cent, equalling the previous low point of March 16, acceptance rates by a decline of about % of one per cent reached the lowest levels in more than a year, and time money was as low as at any previous time this year. The prevailing rate on commercial paper declined near the end of the month to 4-4*4 per cent. Money rates near the end of July are compared in the following table with those of a month previous and a year ago. M oney Rates a t New Y o rk Tim e money— 90 d a y .............................. Prim e commercial p a p e r......................... B ills — 90 day unendorsed....................... Treasury certificates and notes M a tu rin g December 15.. . . J u ly 29 1926 June 29 1927 J u ly 29 1927 *4 *4 -5 *3 H 4 }/2 4 -4 X 3H 3.15 m 4-4X 3 y8- 3 x 3.18 3.24 2 .78 3.19 3H 4 4 3X 3X 3V2 3.42 Federal Reserve B a n k of New Y o rk — rediscount r a te ...................................... Federal Reserve B a n k of New Y o rk — buying rate fo r 90 day b ills ............... 4% 4X 35 A ~3 X =P revailing rate fo r preceding week. A reduction in the amount of currency in circulation was an important factor in the low money rates of July. Factory employment throughout the country has been running between 2 and 3 per cent smaller than a year ago, and retail prices are somewhat lower; consequently, FEDERAL RESERVE AGENT AT NEW YORK the amount of currency needed for payrolls and for retail trade has been smaller than last year. A tem porary increase of more than 100 million dollars in cur rency circulation was required for the month-end and holiday, but by the third week of July this additional currency had been largely retired, and the amount re maining in circulation was at least 100 millions less than a year ago, a decrease corresponding closely to a reduc tion in member bank borrowings from the Federal Reserve Banks. A reduction in the loans and investments of commer cial banks was also a factor in the lower money rates of July, as it involved not only a reduction in the de mand for credit, but also a moderate decline in bank reserve requirements. The principal reduction in mem ber bank credit was in the security loans of banks in this district, although moderate declines in investments and in commercial loans also occurred during the first three weeks of July. The following tabulation sum marizes changes in the loans and investments and de posits of reporting member banks in New York City and in other cities throughout the country. (Change in millions of dollars) June 29, 1927, to July 20, 1927 Loans on stocks and bonds Commercial loans............... Investm ents.......................... Demand deposits................ Time deposits.................... .. New York City Banks Banks -132 - 13 - 32 -189 - 23 — 3 — 77 — 32 + 48 Other Cities — 1 July 21, 1926, to July 20, 1927 New York City Banks Banks + 3 +282 + 44 +229 +135 +32 6 — 101 + 27 8 + 90 + 36 4 Other Cities While complete reports for all reporting banks throughout the country for the week ended July 27 are not yet available, reports from New York City banks indicate some extension of credit, especially in security loans. Brokers loans placed by New York City reporting 59 banks for their own account increased more than 65 millions in the week ended July 27, following a decline of nearly 125 millions in the preceding two weeks, and, as loans placed for correspondent banks and others showed an increase of about 75 millions during the three weeks, the total of these loans to brokers reached a level on July 27 nearly 540 millions or 21 per cent higher than a year ago, and the highest with one exception since the records were started in January 1926. Commercial loans were reduced 90 million dollars in the first three weeks of July, chiefly in other Federal Reserve Districts, and were smaller on July 20 than at any time since February. The low level of commercial loans in July is seasonal, however, and is usually fol lowed by a substantial increase in August. B il l M arket The supply of bills coming into the market in July was light as the result of seasonal influences, and at the same time an active investment demand for bills de veloped. The net result of these conditions was a deple tion of dealers’ portfolios to the smallest amount since last September, and in order to attract more bills into the market, dealers made several reductions in the rates for the various maturities of bills. The ninety day maturity which was offered by dealers at a range of 3 % -3 % per cent at the opening of the month, was re duced to 3 % per cent shortly afterwards, but as the demand continued to increase, subsequent reductions brought the offering rates down to per cent toward the close of the period, the lowest level since May 1926. Com m e r c ia l P aper M arket Commercial paper dealers reported only a fair bank demand for paper, chiefly from interior institutions, during most of July, and a prevailing rate for prime names of 4 % per cent. Toward the end of the month, however, the demand not only from the interior, but also from New York City banks, became considerably more active and a large proportion of the sales was made at 4 per cent. Open market borrowers continued to make limited requests for new loans and supplies of paper remained small. At the end of June, reporting dealers had outstanding $579,000,000 of paper, an amount slightly smaller than a month earlier and 11 per cent below the outstandings of June 30, 1926. Security M a rk e ts 19 2 6 192.7 Loans to Brokers and Dealers in Securities placed by New York City Reporting Member Banks. Following an irregular decline in June, stock prices moved generally upward in July. Industrial stock aver ages advanced about 10 points during the month to levels several points above the previous high levels of May. Prices of railroad stocks also were higher than in the previous two months and in fact representative averages advanced to points slightly above the former high levels of 1906. Corporation bonds, which had been declining gradu ally since early in May, showed a firmer tendency in July. In the foreign bond list, there was also some improvement in prices, and United States Government obligations generally showed small net increases for the month. 60 MONTHLY REVIEW, AUGUST 1, 1927 N e w F inancing Corporate financing totaled $3,831,000,000 during the first half of this year, a larger amount than in any corresponding period in the past and nearly $1,000,000,000 larger than a year ago. This increase was chiefly due to the very large volume of refunding issues floated during the period, as the first section of the accompany ing diagram shows, but there was also an increase of nearly $300,000,000 in new capital issues. The classifi cation of these security offerings by type of issue shows that the principal increase was in long term bond issues. United States Net Imports and Exports o f Gold. lands and $4,900,000 from Australia. Exports, consist ing of small shipments largely to Latin America and the Far East, amounted to $1,800,000. For the first six months of this year, imports have amounted to $161,400,000 and exports to $29,900,000, yielding a net import of $131,500,000. A summary of the principal gold movements thus far this year is given in the following table: (In thousands of dollars) imms 1924 1925 1926 1927 1924 1925 1926 1927 Flotations o f Corporate Securities in First Half o f Each Year, Showing Relative Amount o f Refunding and New Capital Is sues, and Type o f Securities Issued. (In millions of dollars) Following indications in recent months that the flota tion of new issues had been proceeding more rapidly than their distribution, the amount of new securities offered in this market during July was about one-half as large as the amount offered during each of the preceding three months, and was also somewhat smaller than a year ago. Public utility issues were the largest element in the domestic group, followed by industrial offerings. Foreign issues were considerably below the June total and were generally small with the exception of the major part of a $30,000,000 German Central Bank for Agriculture offering and a large part of a $30,000,000 issue of the United Steel Works Corporation of Germany. G old M o v e m e n t Gold movements in July were the smallest for any month this year, but reported shipments continued to indicate at least a small net import of gold, following a steady inflow in every month since last September, as the accompanying diagram shows. The import of $4,000,000 from Canada in consequence of the discount on Canadian exchange, and of an additional $4,500,000 from the Netherlands accounted for nearly all of the $9,000,000 received at New York during the first 29 days of the month. Exports were over $1,000,000, nearly half of which went to Mexico. In June imports into the United States totaled $14,600,000, and included $7,400,000 from the Nether- January to June 1927 United States Source or Destination C anada............................................... France................................................. E ngland.............................................. Germ any............................................ M e x ico................................................ Chile ................................................. C h ina*................................................ A ustralia............................................ Japan.................................................. British M a la y a ................................ All other........................................... T o ta l............................................... Imports Exports 46,519 21,001 39,383 4,309 8,i56 3,263 3,732 1,673 12,173 20,000 July 1 to 29 New Y ork and St. Lawrence Dist. Imports Exports 4,001 13,924 4,529 3,468 "6 7 5i3 * 26 3,095 5,472 1,527 3,549 *420 323 178 161,372 29,872 8,976 1,081 ♦Including H ong Kong. C h a n g es in C en tral B a n k R a te s The discount rate of the Austrian National Bank was raised from 6 per cent to 7 per cent July 21, and the discount rate of the Imperial Bank of India was reduced from 5 per cent to 4 per cent on July 28. T h e Foreign E xch anges During July the foreign exchanges generally moved within unusually narrow limits, but several European rates developed considerable strength. Sterling was rather heavy, declining to $4.8506, on the 23rd, the low est quotation since the middle of May; but this decline was followed by a quick recovery to $4.8525, compared with $4.8538 the best quotation in June. The Conti nental gold exchanges, which had begun to show firmness about the middle of June, continued to move upward. The German mark, which did not rise above 23.70 cents FEDERAL RESERVE AGENT AT NEW YORK in June, advanced to 23.78 cents, the highest quotation since January; the Netherlands florin, barely over 40 cents in early June, moved up to 40.06 cents; and the Swiss franc rose to 19.26 cents, the best figure since January. Swedish crowns were firm, just under parity, and Danish crowTns nearly motionless just below the Swedish. The Italian lira, which has been subject to extreme fluctuations in recent months, and in June moved between 5.84 cents and 5.50 cents, steadied near the lower level, and during the greater part of July stood fast at about 5.43 cents. The French and Belgian francs were featureless; and the peseta steady somewhat above 17 cents. In the Far East, the Japanese yen, which had risen from 46.02 cents to 47.44 cents in June, became steadier a little above 47 cents. The rupee was quoted at about 36 cents throughout the month. The fluctuations in bar silver were unusually narrow, amounting to only a little more than one cent, with the better figures toward the end of the month; the silver exchanges showed corre spondingly little movement. The Canadian dollar, which in June had moved from a small premium to a substantial discount, remained de pressed during most of July, but rallied somewhat toward the close of the month. 61 1925. Unskilled factory and railroad workers are in almost all cases hired at hourly rates varying from 40 to 50 cents an hour, and unskilled building laborers at somewhat higher rates. Some surplus of unskilled labor was noted and in several instances a reduced rate of turnover was reported. Factory employment showred a small seasonal reduc tion in June and remained about 2 V2 per cent lower than a year ago. The general tendency of factory employ ment in the United States has been dowTmvard for sev- PERCENT. Foreign T ra d e An even balance of trade was reached in June, both imports and exports being valued at about $359,000,000. This is the first time imports have been as large as exports since early last year. Exports were $34,000,000 smaller than in May, while imports were $13,000,000 larger. Compared with June 1926, there was a gain of $21,000,000 in exports and of $23,000,000 in imports. Smaller shipments abroad of raw cotton and grains accounted for over half the decline from May to June in the total value of exports. Both cotton and grain exports, however, continued to show gains over a year ago. Quantity receipts of raw silk and crude rubber declined in June, but were larger than a year previous. Totals for the fiscal year ended June 30 indicate a gain of $217,000,000 in exports and a decline of $208,000,000 in imports compared with the previous year. Thus, the favorable balance of trade increased from $289,000,000 in the previous fiscal year to $714,000,000 this year. A. large part of the gain in exports was due to heavier demand for grains, to supplement Europe’s comparatively small crop last year. The value of cotton exported during the year wTas approximately $50,000,000 smaller than in the previous year, although the quantity shipped was 40 per cent larger than last year, and, in fact, the largest ever reported. The price decline in crude rubber alone more than accounted for the decline in the value of all imports. E m p lo y m e n t and W a g e s Reports to this bank from representative employers in this district continue to indicate a high degree of stability in the wages paid to male unskilled labor. The average hourly rate reported on July 1 was 49 cents, which has been the prevailing average since the end of Factory Employment in the United States. eral years. The gradual increase in factory production, shown by a diagram on the first page of this Review, would indicate, however, that the decline in factory em ployment has been due to more effective methods of production, rather than to reduced activity of our manu facturing industries. It appears probable that the great activity in the construction industry in recent years has been absorbing workers released from manu facturing, as there has been little evidence of unem ployment. Indexes o f B usiness A c tiv ity Notwithstanding some irregularity as compared wTith the previous month and a year ago, this bank’s indexes of business activity for June generally reflected a con tinued high level of trade. Retail distribution of goods, as shown by department store and mail order sales, in creased in June and was somewhat larger than a year ago. Merchandise imports increased contrary to the ordi nary seasonal tendency, and although exports showed more than the usual decline from May, both elements in foreign trade remained larger than in June of last year. Indexes of debits to individual accounts in New York City and for the balance of the country again were slightly smaller than in the previous month after sea sonal adjustment, but remained appreciably higher than a year ago. Merchandise and miscellaneous car loadings were slightly below the large volume of a year ago and other loadings, comprising the bulk commodities, were consid erably smaller. Business failures showed less than the MONTHLY REVIEW, 61 usual seasonal decline and continued more numerous than a year ago. In the following table are given June indexes of busi ness activity in per cent of trend with allowance for seasonal variations, and, where necessary, for price changes. Primary Distribution Car loadings, merchandise and misc. . . . Car loadings, other...................................... E xports........................................................... Im ports........................................................... Grain exports................................................ Panama Canal traffic.................................. Distribution to Consumer Department store sales, 2nd D ist............ Chain store sales.......................................... Mail order sales............................................ Life insurance paid fo r ................................ Real estate transfers.................................... Magazine advertising.................................. Newspaper advertising............................... General Business A ctivity Bank debits, outside of N. Y . C it y ......... Bank debits, New York C it y .................... Bank debits, 2nd Dist. excl. N. Y . C ity. Velocity of bank deposits, outside N. Y . C it y ................................................. Velocity of bank deposits, N. Y . C ity.. . Shares sold on N. Y . Stock E xch an ge*.. Postal receipts............................................... Electric p ow er............................................... Employment in the United States........... Business failures........................................... Building perm its........................................... New corporations formed in N. Y. State 1927 June April M ay June 110 109 105 104 126 135 107 104 103 106 97 lOOp 132p 90 108 91 120 82 96 100 102 96 99 108 116 103 114 96 110 105 107 101 101 111 118 106 101 115 181 99 112 121 148 87 101 100 106 112 94 100 100 106 96 103 (Computed trend o f past years=100 per cent) 96 97 101 100 119 137 109 117 135 104 116 134 104 107 134 229 97 116 108 131 214 92 116 99 106 128 219 95 103 116 148 138 100 121 129 114 116 113 123 129 123 General price level................................... 186 183 184 184 *=Seasonal variation not allowed for. Preliminary. Bituminous coa l............................................ Copper, U. S. mines.................................... Tin deliveries................................................. Consumers’ Goods Cattle slaughtered........................................ Calves slaughtered....................................... Sheep slaughtered........................................ Hogs slaughtered.......................................... Sugar meltings, U. S. p orts....................... W heat flour................................................... Paper, to ta l................................................... Boots and shoes............................................ Anthracite co a l............................................. Automobile, a ll............................................. Automobile, passenger................................ Automobile, truck........................................ *=Seasonal variation not allowed for. / y *i 1925 0 1L.L.L INGOTS i i 1—*—i— J- F- M- A M J 1. _I, . J 1 1 A- 5- O N D f A\ 600 J * \ L \ \ / \ 450 \ \/ 1925 J A 5 108 98 87 99 94 102 104 94 117r 104 106 87 88 98 108 ii6 89p 132 80p 75 107 88 125 76 79 119 122 87 84 126 111 86 109 91 97 109 106 82 116 136 124 125 93 96 106 125 131 99 109 96 94 105 98 78 103 149 142 116 94 94r 93 113 US 92 p = Preliminary, 102 92 119 101 101 106 85 107 116 83 106 98 92 110 90 104 101 105 76 106 141 127 113 87 iio io 2 p 88 94 116 121 86 100 102 93 91 r —Revised. 927 1927, V. 50 1926^ /' VS./' 1925 40 \ v’\ 192^7 rsy ym b 300 '“ AUTOMOBILES & TRUCKS i i 1 i i L i—i— ---1—i-l-J- F M A M. J 114 HOr 87 99 GO 750 -^926^ 115 111 70 1926 7 114 108 mUOHSo/TONS 900 v « s r / '•k June 114 Tobacco, m anufactured.............................. TIIOUSANPSofBALES # M ay 99 105 95 92 83 135 107 67 105 Leather, so le ................................................. Silk consum ption*........................................ 6, --- ^ April 100 102 110 Gas and fuel o il............................................ C otton consum ption.................................... W oolen mill a ctiv ity *................................ More than the usual seasonal decline in output from May to June was reported by a number of industries. The accompanying diagram indicates that steel ingot production was smaller in June than a year previous, but remained higher than in June 1925, while auto mobile production was substantially smaller than in June of either of the past two years. The output of pig iron, leather, newsprint, anthracite coal, and refined sugar, and mill consumption of silk and tin deliveries T//OU5AND5ofCAK5 June Producers’ Goods ioo 111 1927 1926 P rodu ction M ILLIONSofTONS 1927 all showed reductions after adjustm ent for the usual seasonal changes. Mill consumption of cotton, however, reached an unusually high level in June, and more than seasonal increases occurred in the production of zinc, cement, flour, and shoes. Bituminous coal output, as the diagram shows, has been m aintained at about the 1925 level since the strike in unionized mines began A pril 1, and no evidence of a shortage has appeared as yet. Activity in the auto mobile industry appears to have been maintained in July at about the same level as in June, and steel production is reported to have shown little change. Reports from the Association of Cotton Textile Merchants of New York indicate that cotton mill activity remained at a high level, for although new business has fallen off somewhat accompanying the rise in cotton prices, ship ments continue heavy and substantial unfilled orders remain. (Computed trend of past years=100 per cent) 1926 AUGUST 1, 0- N D 150 -----w i ivjii CONSUMPTION , , 1 , , 1 0 J F M- A M J J t i„ A S - O N D ccDAL PRODUCTION fBi itcminousJ I ■, 1 , , 1 .i i J- F- M- A M J- J . A- 5 O N D- Production o f Steel Ingots, Automobiles, and Bituminous Coal, and Mill Consumption of Cotton in 1927, Compared with 1925 and 1926. FEDERAL RESERVE AGENT AT NEW YORK <V3 C rops B u ild ing The report of the Department of Agriculture on July 1 crop conditions showed improvement in some crops, but even less favorable prospects than a month previous for others. The great irregularity in the prospects for the various crops is indicated in the accompanying diagram. The volume of building and engineering construction work undertaken in June was the largest ever reported, according to statistics compiled by the F. W . Dodge Corporation from 37 states east of the Rockies. Contract awards were 15 per cent larger than in May and 16 per cent larger than in June 1926. Contracts let in the New York and Northern New Jersey district were larger than in any previous June, due to the inclusion in the figures of large contracts for road work and subway construction. For the first half of 1927, total building contracts awarded were 2 per cent larger than last year. The increase over last year was due chiefly to an increased amount of engineering projects, such as roads, subways, and bridges, rather than to construction of residential and industrial buildings, contracts for wThich showed appreciable decreases from a year ago. In the NewTYork district construction projects totaled 5 per cent less than in the corresponding period of .1926. Public works and utilities projects were considerably larger than last year, but the effect of these on the total was more than offset by substantial reductions in residential and indus trial contracts. \92Z-Z6 AVERAGE 10 0°/o Barley 7-(a.y (all tame) 5pringZdR eai I Zdinter COfieat \ O a ts I POTATOES (M ite) Rye Pears Peaches Corn Tobacco JJpples (CommlJ C h ain Store Sales July 1 Forecasts o f 1927 Crop Production Compared with Average Harvests in 1922-1926. Chain store business compared more favorably with that of a year ago in June than in May in all reporting lines. The largest increases continued to be in grocery and variety stores, but ten-cent stores and drug stores also showTed substantial gains in total sales. Shoe sales were slightly larger than in June 1926, following a re duction in May, and the June decline in candy sales was smaller than that of the previous month. The expansion since June 1926 in the number of units operated exceeded the gain in total sales in several lines, so that sales per store were smaller than a year ago. For all types of stores combined, however, sales per store continued to average larger than last year. Hay lands were benefited by the cool, wet weather that retarded other crops, and the prospect on July 1 was for the largest production on record. Substantial improvement occurred during June in the small grains, so that July 1 forecasts of the winter and spring wheat, oats, barley, rye, and rice crops were all close to or above the average harvests of the past five years. The indicated yield of potatoes also is considerably larger than a year ago, and about equal to the five year average. Conditions remained very unfavorable for corn, however, and the July 1 forecast was for the smallest crop since 1901. Indicated yields of fruits and tobacco were also small. While no official estimate of the cotton crop has been issued, the reported reduction of 12 per cent in the acreage planted would indicate a crop considerably below the extremely large harvest of 1926. (In millions'' Crop 1922-1926 Average Harvest 1926 Harvest 1927 July 1 Forecast Corn bushels ................................................. W inter wheat bushels......................................... Spring wheat, bushels ........................................ Oats bushels........................................................... Barley, bushels....................................................... R ye bushels ..................................................... Rice, bushels........................................................... Potatoes bushels ......................... ....................... T obacco, pounds.................................................... H ay tame tons .................................. *............ Apples commercial tirop barrels....................... Peaches total crop, bushels................................ Pears, total crop, bushels.................................... 2,766 556 252 1,353 194 63.7 36.4 394 1,343 90.9 33.7 54.0 2 0.8 2,645 627 205 1,254 191 4 0.0 4 1.0 356 1,323 86.4 39.4 68.4 2 5.6 2,274 579 274 1,349 243 6 1.8 39.9 393 1,099 101 26.2 4 5.5 17.6 Percentage Change June 1927 from June 1926 T ype of Store Number of Stores T otal Sales + 8 .6 + 8 .6 + 2 0 .8 + 3 .1 + 7 .7 + 1 5 .3 + 1.6 + 2 3 .0 + 1 0 .0 + 1 2 .4 + 0 .1 + 2 .1 + 2 4 .8 — 4 .8 + + — — — + — + 8 .3 + 1 7 .9 Sales per Store Percentage Change First Six Months 1927 from 1926 Total Sales Sales per Store 13.3 1.3 7 .0 3 .0 5 .2 8 .2 6 .3 + 2 0 .0 + 10.4 + 14.4 + 3 .6 — 0.1 + 2 6 .7 — 3 .5 + 10.4 + 2.1 — 8 .1 — 0 .3 — 8 .9 + 9 .3 — 7 .3 + 8 .9 + 1 6 .6 + 7 .4 D e p a rtm e n t Store T rade; Due chiefly to substantial increases in New York and vicinity, total June sales of department stores re porting to this bank were nearly 5 per cent larger than a year previous. As in many other recent months, unusually large increases were reported from Newark and Westchester County. Outside of the metropolitan 64 MONTHLY REVIEW, AUGUST lf 1927 area of New York, a majority of the reporting stores had smaller sales than in June 1926. For the first half of 1927, sales of reporting depart ment stores averaged less than 2y 2 per cent larger than in the corresponding period last year, but apparel store sales averaged 5 per cent larger. The value of merchandise stocks carried in several localities has been reduced considerably during the past year, and in all cases the rate of stock turnover was higher in June than a year previous. Percentage Change June 1927 from June 1926 Locality Net Sales S tock on hand end of month Per cent of Percentage Change First Charge Accounts Six Months Outstanding M ay 31 1927 from 1926 Collected in June Net Sales Average Stock on hand 1927 1926 New Y o r k ....................... B uffalo............................ R ochester....................... Syracuse......................... N ewark........................... B ridgeport...................... Elsewhere....................... North. N. Y . S ta te .. Cent. N. Y . State. . . South. N. Y . S tate. . Hud. R iv. Val. Dist.. Capital D istrict........ Westchester D is t.. . . + 6 .0 — 2 .3 — 6 .2 — 3 .8 + 9 .0 — 1.7 + 1.3 — 5 .4 + 1.4 — 4 .9 + 2 .7 — 0 .2 + 15.2 — 0 .8 — 13.1 — 11.8 — 2 3.0 + 4 .8 — 8 .3 — 2 .3 + 2 .4 — 0 .2 — 2 .4 — 1.1 + 9 .2 — 3 .6 — 0 .9 — 5 .2 — 1.6 — 1.4 + 1.3 — 3 .4 + 1 2 .6 — 0 .5 — 11.5 — 2 .8 — 2 0.2 + 3.1 — 6 .6 + 0 .1 50.9 5 5.0 3 9.9 2 6.3 4 8.4 49.1 52.2 4 3.4 24.9 50.4 3 4 ’. i 33! 6 All department stores. . + 4 .7 — 2 .7 + 2 .4 — 1.8 4 7.7 4 6.7 Apparel stores................ M ail order houses......... + 5 .4 + 1.5 + 0 .9 + 5 .2 — 0 .7 + 4 .4 4 6.0 4 3.7 As the following table indicates, the principal in creases in sales in Jane were in the apparel depart ments. Considerable increases were reported also in home furnishings, stationery, and sporting goods, and sales of woolen goods continued above the very low level of a year ago, but sales of cotton goods and silks were smaller. Musical instruments and ra d io............... Shoes.............................................................. Toys and sporting good s .......................... W oolen goods............................................... Books and stationery................................ W om en’s ready-to-wear accessories. . . . H osiery......................................................... W om en’s and Misses’ ready-to-wear. . . M en’s furnishings....................................... Home furnishings....................................... M en’s and B oys’ w ear.............................. Luggage and other leather g ood s........... Silverware and jew elry............................. Furniture...................................................... Linens and handkerchiefs........................ Toilet articles and drugs.................. Cotton good s............................................... Silks and velvets........................................ Miscellaneous.............................................. Net Sales Percentage Change June 1927 from June 1926 Stock on Hand Percentage Change June 30, 1927 from June 30, 1926 + 2 3 .0 + 1 7 .1 + 1 5 .6 + 1 5 .3 + 1 3 .4 + 9 .4 + 9 .4 + 9 .2 + 8 .8 + 8 .7 + 5 .8 + 2 .0 + 1.4 + 1.2 + 1 .0 + 0 .7 — 1.7 — 12.4 — 3 .8 — 2 1.8 + 8 .9 — 2 .7 — 13.1 + 4 .1 — 1 .3 + 1 7 .0 + 1 .7 + 1 6 .1 — 2 .7 — 3 .1 — 1 .8 — 1.8 — 3 .0 + 4 .4 + 1.8 — 8 .3 — 2.1 — 6 .0 The rate of collections on charge accounts has been increasing this year and in recent months has been higher than a year ago, as the accompanying diagram shows. Last year the rate of collections ran steadily below that of 1925. PERCENT. Percentage o f Outstanding Charge Accounts Collected by New York City Department Stores in Each Month since March 1925. W h o le sa le T ra d e Sales of representative wholesale houses reporting to this bank continued in June to average about 5 per cent smaller than a year previous. Substantial declines were again reported in women's apparel, stationery, and dia monds, and machine tool sales were much smaller than a year ago, following an increase in May. Shipments of drugs and hardware also were somewhat smaller than in June 1926, but increases were reported in groceries, cotton goods, silk goods, shoes, and paper. Stocks of shoes on hand at the end of June were much larger than a year ago, and cotton goods stocks held by jobbers showed a considerable increase, following the heavy mill shipments of recent months. Stocks of groceries, silk goods, and diamonds and jewelry were somewhat larger than a year ago, while stocks of drugs and hardware were considerably smaller. The ratio of collections to accounts receivable in general showed little change from June 1926. Percentage Change Percentage Change June 1927 June 1927 from from M ay 1927 June 1926 Com m odity Net Sales Groceries.......................... + 5 .4 M en’s clothing............... — 11.3 W om en’s dresses............ — 2 4.7 W om en’s coats and suits — 3 7.3 Cotton goods— Jobbers. + 9 .6 C otton goods— C om + 1 4 .4 mission ......................... Silk g ood s........................ + 1 4 .9 + 2 7 .6 Shoes.......................... .. D rugs................................ + 2 .4 H ardware......................... + 6 .4 Machine tools**............. + 8 .9 Stationery....................... — 3 .9 Paper ............................ — 2 .4 D iam onds........................ — 17.1 Jewelry............................. + 2 7 .3 Weighted Average. .. — 2 .7 Stock end of month — 9 .2 — 2 .3 + 0 .4 * + 1 2 .7 + 8 .1 — 10.2 }+ 0 .3 Net Sales + 1.9 — 0 .3 — 16.9 — 3 1.8 + 4 .8 + 2 .2 + 6 .3 + 6 .8 — 5 .7 — 2 .2 — 2 5.5 — 15.8 + 4 .0 — 23.9 + 0 .7 — 5 .4 Stock end of month + 6 .4 + 1 7 .3 + 3 .7 * + 5 0 .1 — 19.2 — 14.0 }+ 1-4 Percentage Change in N et Sales First Six Months 1927 from 1926 — 4 .0 — 9 .4 — 12.1 — 12.9 — 3 .0 — 5 .2 — 6 .2 + 4 .2 — 5 .5 — 2 .7 — 10.7 — 8 .7 + 2 .3 — 17.9 — 10.5 — 6 .7 * = Quantity not value. Reported b y the Silk Association of America. * * = Reported by the National Machine T ool Builders’ Association.
@FedFRASER