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/Iftontbl^ IRexnew O f C r e d it by th e and B u s in e s s C o n d itio n s F e d e ra l R e se rv e A g e n t at th e F ed era l R eserve B ank o f N ew Y ork A u gu st 28, 1920 T h e C r e d it S itu a tio n H E p eriod fro m J u ly 1 t o A u g u st 20 has been on e o f sh iftin g cre d it, b u t o f n o su bstan tial ch a n ge in th e v o lu m e o f b a n k loan s. T h is, h ow ev er, m a y b e con sid ered as e q u iv a len t t o a sligh t d ecrease in loan s fo r loan s n orm a lly increase so m e w h a t d u rin g J u ly a nd A u g u st in a n ticip a tio n o f a u tu m n d em an d s. S ince J u ly 1 th e d ep osits o f th e N e w Y o r k C ity rep o rtin g b a n k s h a v e d ecreased $ 22 1,0 0 0,0 00 a nd th e F ed era l R e se rv e B a n k o f N e w Y o r k has lo st $64 ,00 0 ,00 0 o f g o ld th ro u g h th e g o ld settlem en t fu n d t o oth er d i s t r i c t s . T T h e loss o f d ep osits is d u e in p a rt t o re d u ctio n s o f o u t-o f-to w n b a n k b a la n ces, b u t m o re la rgely t o th e m a in ten a n ce o f sm aller b alan ces b y co m m e rcia l cu stom ers, eith er t o a v o id fu rth er b o rro w in g o r in a n ticip a tio n o f h a v in g t o b o rro w less d u rin g th e co m in g m o n th s. G ra d u a l liq u id a tio n in th e p rices o f securities has lessened th e d em a n d fo r ca ll m o n e y , resu ltin g in slig h tly lo w e r rates, b u t oth erw ise th e cre d it situ a tion has rem ain ed u n ch a n g ed d u rin g th e p a st th irty d a y s. B etw een ea rly last N o v e m b e r, w hen th e F ed era l R e se rv e B a n k o f N e w Y o r k b ega n increasin g its d is co u n t rate, a n d A u g u st 1, th e n u m b e r o f b an k s b o rro w in g fro m it d ecreased fro m 380 to 313. O f th ose w h ich w e n t o u t o f d e b t t o th e F ed era l R e se rv e B a n k , 7 w ere in N e w Y o r k C ity a n d 60 ou tsid e o f N e w Y o r k C ity . D u r in g these nine m o n th s th e b an k s in N e w Y o r k C ity in creased th eir b o rro w in g s $22,000,000, o r 3 p e r ce n t., w hile th e b an k s in th e d istrict ou tsid e o f N e w Y o r k C ity d ecreased th eir b o rrow in g s $ 61,000,000, or 49 p er cen t. F o r th e co u n tr y a t large, th e ch a rt o n this p a g e in d ica tes fa irly a ccu ra te ly th e ra te a t w h ich lo a n exp an sion w as p ro ce e d in g u n til ea rly in 1920 and th e e ffe ctiv e m a n n er in w h ich th e b an k s h a v e since b een h o ld in g fu rth e r exp an sion in ch e ck . B u s in e s s a n d C r e d it E x p a n s io n of the Federal Reserve System reporting weekly. M a n u fa ctu re rs a n d m erch an ts h a v e a t last co m e t o realize th a t th e p e rio d o f co n s ta n t exp an sion o f th e p a st few years, b a sed u p o n th e co n s ta n t increase o f th e b u y in g p o w e r th ro u g h cre d it exp an sion , sh ou ld cease a n d th a t th e y sh ou ld c o n te n t th em selves w ith a m o re sta b le a n d co n s e rv a tiv e v o lu m e o f business. T h is rea lization has co m e sim u ltan eou sly w ith th e d e te rm in a tio n o f con su m ers t o c o m b a t h igh p rices b y re d u cin g purch ases. N o r is th e m o v e m e n t co n fin e d t o th e U n ite d States. C re d it pressure is b e in g exerted b y th e resp on sible agen cies all o v e r th e w o rld , a n d th e con su m ers’ rea ction a gain st h igh p rices is w orld w id e as w ell. 2 REPORT ON BUSINESS CONDITIONS In e v e r y p eriod o f rising p rices a large v o lu m e o f s p e cu la tiv e d ealin g in co m m o d itie s o ccu rs, n o t o n ly b y th ose w h ose business it is in w h ole o r in p a rt to d o so, b u t b y m a n y w h o, w ith o u t exp erien ce o r a d e q u a te ca p ita l, are able t o en gage in su ch d ealin gs w ith e xcellen t p rosp ects o f success. W h en th e tid e turns a n d p rices d eclin e, n o t o n ly d o sp e cu la tiv e dealin gs a n d th e ca rry in g o f u n n ecessary supplies ten d t o cease on th e p a rt o f th ose w ith exp erien ce a n d ca p ita l, b u t th ose w h o h a v e b een ov er-tra d in g in p r o p o rtio n to th eir ca p ita l find th em selves in difficu lties, and th ose w h o h a v e n either ca p ita l n or exp erien ce are v e r y q u ick ly elim in ated . W h ile prices are rising failures are few . B u t th e y u su a lly increase as p rices d eclin e. S ince J a n u a ry th e n u m b er o f failures has in creased, b u t n o t p ro p o rtio n a te ly to th e h e a v y d eclin es in m a n y c o m m o d itie s. N o r h a v e these declin es b ro u g h t a b o u t a n y su ch business colla p se as m ig h t in tim es p a st h a v e fo llo w e d so severe a d eclin e in m a n y b a sic c o m m o d i ties. E x c e p t fo r th ose trades in w h ich th ro u g h p rice or oth er u n certain ties p rod u cers h a v e a d o p te d a w a itin g a ttitu d e , p ro d u ctio n , d istrib u tio n a n d co n s u m p tio n are still p ro ce e d in g a t a h ig h rate. T h is is an in d ica tio n th a t th o u g h cre d it is h igh a n d u n d er pressure, th e b an k ers a n d business m en o f th e c o u n tr y k n o w th a t th rou g h th e im m en se resou rces o f th e F ed era l R e se rv e S y stem cred it is n everth eless elas tic a n d ca n b e co m m a n d e d a t all tim es w ith in legitim a te lim its fo r n ecessary p r o d u c tiv e a n d d is trib u tiv e req u irem en ts. T h a t som e a d d itio n t o p ro d u ctio n costs is ca u sed b y th e h igh er c o s t o f cr e d it is o b v io u s , b u t co m p a re d to to ta l p ro d u ctio n costs th e a m o u n t a d d e d b y h igh er in terest rates is n eglig ib le, and its effe ct d oes n o t a p p ea r t o b e reflected in h igh er p rices fo r th e g o o d s p ro d u ce d . B ill M ark et T h e bill m a rk et fo r ban k ers a cce p ta n ce s has c o n tin u ed a ctiv e w ith su p p ly m o re p len tifu l to w a rd th e en d o f th e p e rio d and d e m a n d fa irly su stain ed so th a t dealers w ere a ble to re p o rt som e increase in th eir tu rn o v e r. Seasonal m o v e m e n t in grain a n d c o t to n a n d u n usual im p o rts o f sugar a cco u n te d fo r th e b u lk o f in creased draw in gs. R a te s rem ain ed p ra ctica lly u n ch a n g e d , b e st k n o w n n am es co m m a n d in g 6 t o 6 ^ p er ce n t, in th e p rim a ry m a rk et, a cco rd in g t o m atu rities. C o m m e r cia l P a p e r M a r k e t C o n d itio n s in th e co m m e rcia l p a p er m a rk et sh ow ed little ch a n ge d u rin g th e p e rio d . I n N e w Y o r k C ity a n d oth e r large co m m e rcia l cen ters, th e b an k s gen erally refrain ed fr o m b u y in g , and dealers relied u p o n co u n tr y b an k s t o m a in ta in th eir d istrib u tio n . Sales in th e rural d istricts w ere w id e ly sca ttered a n d in sm all u n its, b u t in th e a g grega te w ere q u ite g o o d . In gen eral, th e b e st a b s o rp tio n co n tin u e d in th e eastern section s. N o g rea t ch a n ge a p p ea red in th e v o lu m e o f offerin gs, w h ich w ere p len tifu l, b u t a p p a re n tly n o t in excessive s u p p ly . In som e quarters it w as re p o r te d th a t offerin gs re ce n tly h a v e n o t a llow ed q u ite so w id e a ch o ice o f h igh est grad e n am es, in d ica tin g an in creasing te n d e n c y o n th e p a rt o f som e business con cern s t o e m p lo y b a n k lines rath er th a n b o rro w in th e o p en m a rk et a t th e p rev a ilin g rates. T h e se ru led a t 8 p er cen t, fo r th e b e st n am es a n d fo r th e larger p ro p o rtio n o f offerin gs, w ith 8 % t o 8 % p er cen t, q u o te d fo r oth er nam es. B a n k D e p o s its a n d L o a n s (In Millions) 72 Reporting Banks in New York City U. S. Securities and Total Loan Loans thereon and (excluding U.S. Investments Net Bonds to secure (including Deposits Circulation) Rediscounts) 4,902 800 5,621 4,924 783 5,618 4,946 799 5,608 5,032 833 5,653 5,036 846 5,684 5,217 968 5,783 Date 1920 Aug. 20 Aug. 13 Aug. 6 July 30 July 23 April 16 1919 Oct. 10 5,397 1,512 6,010 (high) Aug. 15 5,104 1,516 5,614 Between August 15, 1919, and August 20, 1920 New York Banks increased from from 773 to 815. 815 Reporting Banks in all Districts U. S. Securities and Total Loans Loans Thereon and (excluding U.S. Investments NetBonds to secure (including Deposits Circulation) Rediscounts) 14,161 14,097 14,209 14,274 14,467 1,894 1,915 1,960 1,985 2,303 16,820 16,814 16,886 16,903 17,189 (high) 13,699 3,231 15,944 13,401 3,495 15,287 71 to 72 and banks throughout the country FEDERAL RESERVE AGENT AT NEW YORK C a ll M o n e y M a r k e t Call m o n e y rates h a v e ru led a t rela tiv ely m o d e ra te levels. T h e general range th rou g h th e final tw o weeks o f J u ly was 8 to 9 p er cen t., th ou g h th e rate on ce to u ch e d 10 p er cen t, on th e 26th. S to ck liq u i d a tion cau sed an easing in rates early in A u gu st, and renew als fo r a con siderab le p eriod ru led a t 7 per cen t, w ith new loan s as lo w as 6 p er cen t, fo r th e first tim e since th e m id d le o f June. T im e m o n e y , on th e oth er h an d , b eca m e firm er and was q u o te d a t 8 ^ to 9 p er cen t., a ccord in g to collateral. T h ese q u o ta tion s w ere largely n om in al and w h a t little tim e m o n e y was a vaila b le u sually b ro u g h t 9 to 93^ p er ce n t., com p a red w ith 8 ^ to 9 p er cen t, in th e p re ce d in g p eriod . in d en om in a tion s o f $1,000 and o v e r, w hile sales still in clu d e large n u m bers o f $50 and $100 b o n d s. I t d id n o t seem o f in terest t o secure sim ilar d a ta fro m b an k s in N e w Y o r k C ity b eca u se in N e w Y o r k so large a p r o p o rtio n o f th e business is d o n e d ire ctly th ro u g h b rok ers, w hereas in m o s t o u t-o f-to w n p la ces, p a rticu la rly th e sm aller on es, it is d o n e th ro u g h th e b an k s. G overn m en t B on d s T r a d in g in L ib e r ty b o n d s d u rin g th e p a st th irty d a y s has b een rela tiv ely lig h t, co m p a re d w ith p re v io u s m on th s, b o th in th e a ctu a l v o lu m e o f sales and in th e p ro p o rtio n to to ta l b o n d sales. P rices sh ow ed a grad u al settlin g te n d e n cy w h ich w as sligh tly a ccelera ted tow a rd s th e close o f th e p eriod . T h e range o f flu ctu a tion s, h ow ev er, was n arrow , a n d a t th e w idest, in th e case o f th e first and th e th ird 4 ^ s , was n o t q u ite a p o in t and th ree-q u a rters. T h e co m p a ra tiv e steadiness o f L ib e r ty s in th e fa c e o f s to ck m a rk et w eakness w as n o te w o r th y in v iew o f their sharp d eclin e d u rin g th e M a y s to ck liq u id a tion . A s a result, h ow ever, o f grad u al declines, som e o f th e issues are again a p p roa ch in g th e low est prices o f th e year. T h e first a rou n d 84.50, are o n ly h alf a p o in t a b o v e th e lo w level, and th e 3 }^ s, a t 90, are sligh tly less th a n a p o in t fr o m th e y e a r ’ s low est. D u r in g J u ly, sales o f L ib e r ty s on th e N e w Y o r k S to c k E x ch a n g e to ta le d $175,000,000, com p a re d w ith $257,000,000 d u rin g Jun e a n d an average o f $262,000,000 fo r th e first six m on th s o f th e year. Sales in J u ly last yea r w ere $205,000,000. H a v in g h eard fro m a n u m b er o f ban k ers ou tsid e o f N e w Y o r k C ity th a t th eir purch ases o f g o v e rn m e n t b o n d s fo r cu stom ers h a v e re ce n tly exceeded th eir sales w e asked 68 b an k s in rep resen ta tive cities, tow n s and villages in N e w Y o r k and N e w Jersey t o a d vise us o f th eir p urch ases and sales o f L ib e r ty b on d s a n d V ic to r y n otes fo r cu stom ers d urin g M a y , June and J u ly , w ith th e fo llo w in g resu lt: T h eir cu stom ers sold $2,587,000. T h e ir cu stom ers p u rch a sed $3,701,000. O n ly 20 o u t o f th e 68 b an k s re p orted th a t sales e x ce ed ed purchases. I t is q u ite e v id e n t fro m su p p le m en ta ry d a ta furn ished th a t purch ases are m a in ly 3 representative Railway Bonds, from June, 1919. 4 REPORT ON BUSINESS CONDITIONS C e r t if ic a t e s o f I n d e b t e d n e s s T h e offerin g o f on e y ea r 6 p er cen t, certifica tes on A u g u st 16 was h e a v ily over-su b scrib ed . T h e a m ou n t a lloted w as $157,654,500. T h ese certifica tes, like th e 6 p er cen t, certifica tes d u e n ext June, are in d e m a n d a t a sligh t p rem iu m , w hile th ere is a g o o d d em a n d a t p a r fo r th e 5 % p er cen t, certifica tes due in J an u ary and M a r c h , fo r th e D e c e m b e r ce rtifi cates on a 5 % to 5 % basis and fo r th e S ep tem b er certifica tes on a 5 % basis. T h e v o lu m e o f treasu ry certifica tes o f in d eb ted n ess o f all issues ou tsta n d in g on J u ly 31, w as $2,5 90 ,0 00 ,000. A ca refu l stu d y o f th e figures o f th e 815 m e m b er ban k s w h ich re p o rt w eek ly to th e F ed era l R e se rv e B o a r d justifies th e estim ate th a t on th a t d a te, o f th e to ta l v o lu m e o f certifica tes $1,940,000,000 w ere held b y th e p u b lic a n d o n ly $650,000,000 w ere h eld b y th e b an k s o f th e co u n tr y . T h is is a d egree o f d istri b u tio n n o t gen erally realized, fo r m a n y w h o w rite on e co n o m ic a n d fin a n cia l affairs seem t o b e u n d er th e im pression th a t th e g rea t b u lk o f th e certifica tes are h eld b y th e b a n k s, as w as th e case w hile g o v e rn m e n t b o n d s w ere b ein g offered t o th e p u b lic. A n d o f th e $650,000,000 estim a ted to b e still h eld b y th e ban k s a con siderab le v olu m e m u st b e h eld b y n o n -b o rro w in g b an k s, as on ly $ 35 0,0 0 0 ,0 0 0 are n o w b e in g used as a basis fo r loan s, or cre d it exp an sion, at th e F ed era l R e se rv e B a n k s. B on d M ark et T h e b o n d m a rk et has m a in ta in ed a ste a d y to n e , d esp ite s to ck m a rk et w eakness, and ra ilroad issues h a v e b een d is tin ctly m ore a ctiv e and firm since th e rate d ecision . S em i-sp ecu la tiv e issues resp on d ed m ore sh arply th a n th e high p riced grou p s, b u t th e la tter also stren gth en ed , con tin u in g an a d v a n ce w h ich since th e first o f J u ly has a vera ged a b o u t 3 p oin ts. P rim e, h igh interest b earin g n otes o f recen t issue con tin u ed in g o o d d em a n d , a n d th o u g h som e o f th e u n d erly in g issues, p a rticu la rly th e c o n vertib les, reflected a t tim es th e d eclin e in stock s, b u y in g w as in sufficient v o lu m e t o stab ilize th e m a rk et. In d u stria l b o n d s w ere rath er irregular, b u t m a in ta in ed a fa irly even a verage th ro u g h o u t th e p e rio d . A n ou tsta n d in g ex ce p tio n w as th e b rea k in Sinclair O il C o m p a n y p er cen t, n otes to 8 6 % in th e ou tsid e m a rk et u p on th e d issolu tion o f th e u n d e r w ritin g s y n d ica te ; these n otes w ere origin a lly o f fered a t 98, t o y ie ld a b o u t 8 p er cen t. P u b lic u tility b o n d s a vera ged low er prices. F oreig n b o n d s w ere u n settled b y th e p olitica l d ev elop m en ts a b roa d , a nd som e ra th er sharp losses occu rre d . T h e n ew B elg ia n 7 % s d e clin e d fr o m 101 to 97, w hile th e 6s, d ue 1925, reflected th e loss of n early 10 p oin ts in B elgia n exch an ge. Swiss 8s and U n ite d K in g d o m 53^s, d u e 1921, w ere som ew h a t low er, a n d P a ris 6s lo st 3 p o in ts to 9 1 ; A n g lo -F r e n ch 5s w ere h eld firm b y a p p ro a ch in g m a tu rity . O th er fo re ig n issues o f m ore d ista n t m atu rities w ere h e a v y , selling a t, o r sligh tly a b o v e , low est prices o f th e yea r. T ra d in g in ra ilroad a n d m iscellan eou s b o n d s w as sligh tly m ore a ctiv e d u rin g J u ly th a n in th e m o n th p rev iou s. Sales to ta le d $ 44 ,800,000 c o m p a red w ith $39,700,000 in Jun e, and $ 42,500,000 in J u ly , 1919. S tock M a rk et F u rth e r exten sive liq u id a tio n has ca rried p rice averages o f in d u strial sto ck s b e lo w th e lo w e st levels, reach ed in F e b ru a ry a n d M a y . T h e In tersta te C o m m e rce C o m m issio n ’ s ra te d ecision cau sed a m o m e n ta ry rally, b u t prices th erea fter co n tin u e d to w eaken u n der sharp selling a ttrib u te d to th rea ten in g p o litica l d e v e lo p m e n ts a b ro a d , co n tin u e d m o n e y strin gen cy , and fallin g c o m m o d ity p rices. In g e n eral, p e rio d s o f a ctiv ity w ere a cco m p a n ie d b y d e clin ing prices, w hile recoveries la ck ed aggressiveness and occu rre d on a red u ced v o lu m e o f sales. R a ilr o a d shares sh ow ed o n ly a m o d e ra te stre n g th en in g as a result o f th e ra te a n n o u n ce m e n t, and d u rin g th e la tte r p a rt o f th e p e rio d th ese issues d id n o t esca p e en tirely fro m th e gen eral w eakness. F o r th e p a st six w eeks, ra ilroad averages h a v e flu ctu a te d a b o u t a gen eral level a p p ro x im a te ly h alf w a y b e tw e e n th e F e b ru a ry lo w p o in t and th e y e a r ’ s h ig h p o in t o f M a rch . M e a n tim e , tw e n ty -fiv e indu strial stock s h a v e fallen 18 p oin ts o n th e avera ge t o 98, or n early 4 p oin ts b e lo w th e F e b ru a ry lo w level. J u ly sales to ta le d 12,500,000 shares, w h ich , th o u g h a slight increase o v e r Jun e, m arks a re d u ctio n o f o v e r 60 p er cen t, fro m J u ly o f last year. N e w F i n a n c in g T h e o u tp u t o f n ew secu rities con tin u es t o d w in dle, as h ig h rates a p p a re n tly are ca u sin g th e p o s t p o n e m e n t o f fin a n cin g op era tion s w h erever p ossible. N e w offerings d u rin g J u ly to ta le d $ 24 1,0 0 0,0 00 , a d ecrease o f $130,000,000 co m p a re d w ith J u ly last y ea r. G o o d d em a n d was sh ow n fo r issues w h ich c o m b in ed h igh degree o f secu rity w ith h igh yield . In th e first seven m on th s of th e yea r, n ew issues h a v e to ta le d $2,041,000,000, a h igh re co rd and $487,000,000 in excess o f th e sam e p e rio d o f 1919. D u rin g J u ly s to ck issues d eclin ed a b o u t 40 p er cen t, in relative v o lu m e , and railroad issues o f all kinds FEDERAL RESERVE AGENT AT NEW YORK aggregated o n ly a b o u t $4,300,000. In d u stria l and p u b lic u tility n otes and b on d s con tin u e t o be offered a t p rices and rates y ield in g 73^ t o 8 ^ per c e n t.; recen tly , th ere has a pp eared to b e a slight increase in th e p ro p o rtio n o f sm all issues a t th e higher yield s. A p p ea ra n ce o f 8 p er cen t, n otes o f co rp ora tion s in g o o d stan d in g was a n ew d e v e lo p m ent, b u t in m o s t cases these d id n o t represent a ny ch a n ge in the yield basis. D e m a n d fo r m u n icip a l b on d s b eca m e som ew h at m ore a ctiv e and th e n u m ber o f offerings increased, b u t am ou n ts in v o lv e d w ere usually sm all. C o rp o ra te m atu rities in S ep tem b er are estim ated at $103,700,000, co m p a re d w ith $33,000,000 in A u g u st, a n d $73,300,000 in S ep tem b er o f last year. I t is rep orted th a t m o st o f these h av e a lread y been p ro v id e d for. F o r e ig n B a n k R a t e s T h e B a n k o f B o m b a y red u ced its d is co u n t ra te fr o m 6 to 5 p er cen t, on J u ly 31. T h e rate w as p re v io u sly red u ced fro m 7 to 6 p er cen t, o n Jun e 18, a n d fro m 8 t o 7 p er cen t, on Ju n e 1. U n settled p o litica l and business co n d itio n s w ith a resu ltan t d ecrease in d em a n d is resp on sible fo r th e re d u ctio n , ra th er th a n an a b u n d a n t su p p ly o f fu n d s. T h ere has b een n o ch a n ge in th e official b a n k rates in lead in g fin ancial cen ters. T h e firm ness o f th e m o n e y m a rk et in L o n d o n is reflected in th e a d v a n ce in th e p riv a te b a n k rate to 6 % @ 0 11 /1 6 p er cen t, fo r 60 d a y s and 6 11 /1 6 @ 6 % fo r 90 d a ys. T h e p resen t b a n k rates are as fo llo w : B ank of B ank of G erm an B ank of B ank of E n g la n d F ra n ce R e ich sb a n k I ta ly Jap an R a te 7 6 5 6 8 C h an ged A p r il 15, 1920 A p ril 8, 1920 D e c e m b e r 23, 1914 M a y 13, 1920 N o v e m b e r 18, 1919 F o r e ig n E x c h a n g e H e a v y declin es h a v e occu rred in th e E u ro p e a n exch an ges d u rin g th e p a s t th irty d a y s a n d little stren gth w as m a n ifested a t a n y tim e. S terlin g w as ca rried d o w n to 3.5534 fo r d em a n d bills o n A u g u st 4 in a d eclin e w h ich w as secon d in e xten t and v iolen ce o n ly t o th e b rea k o f F e b ru a ry 4, w h en th e p o in t o f 3.18 w as rea ch ed . U n d er th e p ersisten t pressure o f a large v o lu m e o f bills th e b rea k w as p re cip ita te, a m ou n tin g t o eigh t cen ts on a single d a y . R e c e n t w eakness has b een a ttrib u te d in p a r t t o th e R u ss o -P o lis h situ a tion , b eca u se ban k ers and dealers w h o ord in a rily su p p ort th e m a rk et a t this tim e re m a in a lo o f p en d in g d ev elop m en ts, b u t th e m a in 5 cause fo r th e d eclin e a p p ea rs t o b e th e large offerings o f grain and c o t to n bills a t this tim e. A n a d d ition a l fa c to r in th e w eakness is th e fa c t th a t fo r som e tim e E n g la n d has been a ccu m u la tin g d ollar credits, lo o k in g tow a rd s th e m a tu rity o f th e A n g lo -F re n ch loan . T h is has b een co u n terb a la n ced in p a rt b y th e g rea t im p ro v e m e n t in E n g la n d ’ s foreign trad e. H e r exp orts fo r J u ly w ere, in m o n e y valu e, th e largest e ver re p o rte d , and im p orts w ere th e sm allest o f a n y m o n th since N o v e m b e r , 1919, leavin g a d e b it b a l an ce o f o n ly £ 8 ,0 0 0 ,0 0 0 . In spite o f this, th ere has been n o m aterial im p ro v e m e n t in rates and th e m a rk et has b een v e r y irregular d u rin g th e p a st ten d a y s, closin g a t 3 . 5 9 ^ on A u g u st 20, w h ich is 2 3 % cen ts low er th a n o n J u ly 20 and represents a d eclin e o f 26.1 p er cen t, fro m par. C o n tin e n ta l exch an ges paralleled sterlin g a n d b o th fra n cs a n d lire registered even greater d eclin es th an sterlin g. A fte r fa llin g fro m 8.20 on J u ly 20 t o 7.07 d u rin g th e first w eek in A u g u st, fran cs, h a v in g re co v e re d sligh tly, sh ow ed greater resistan ce u n til w ith in th e last th ree d a ys. T h e y closed th e p e rio d a t 7.09, a d eclin e o f 63.3 p er cen t, fro m par. T h e a n n o u n ce m e n t b y M . C asen ave, D ir e c to r G eneral o f th e F re n ch S ervices in th e U n ite d S tates, th a t F ra n ce w o u ld m e e t in fu ll her share o f th e A n g lo F re n ch L o a n p r o b a b ly h a d a stab ilizin g influen ce. L ire also h a v e co n tin u e d t o d eclin e th ro u g h o u t th e p e rio d , fallin g fro m 5.78 o n J u ly 20 to 4.67 on th e 20th o f this m o n th . M a rk s h a v e co n tin u e d w ea k and closed a t 2.00 on th e 20th a gain st 2.55 o n J u ly 20. T ra n sa ctio n s w ere lig h t and th e a m o u n t o f sp ecu la tio n m u ch red u ced . D u e t o a sla ck en in g in A rg e n tin a ’ s exp orts, and th e em b a rg o o n th e e x p o rta tio n o f g o ld , exch a n ge o n th a t co u n tr y has co n tin u e d to reced e. T h e p eso p rice is n o w a b o u t 86, a d eclin e o f 11 p er cen t, fro m par. S h an ghai taels h a v e re co v e re d to 1.14 fro m th e q u o ta tio n o f 1.01 o n J u ly 20, b u t In d ia n rupees h a v e m a d e sligh t a d d itio n a l d eclin es. T h e rate w as 363^ o n th e 20th. R a te s fro m J u ly 24 t o A u g u st 30 are g iv e n b e lo w : High England ............................ Low Last 3.84% 3.55M 3.59% France.............................. 8.285 7.07 7.09 Italy...........................; . . . 5.81 4.67 4.67 Spain................................ 15.88 14.88 15.10 Argentina.......................... 40.85 38.10 38.25 China (HongKong).......... 81.00 72.00 82.00 China (Shanghai)............. 111.50 100.50 113.50 Japan (Yokohoma)........... 51.50 51.125 51.50 Germany........................... 2.56 1.99 2.00 Switzerland....................... 17.51 16.53 16.58 Sweden (Stockholm ) ......... 22.00 20.30 20.30 Holland............................. 34.875 32.625 32.625 Belgium............................. S.71H 7.57}4 7.62 x—Silver exchange basis *—Premium Percentage of Depreciation From Par 26.1 63.3 75.8 21.8 10.0 ---- x -----x 3.3* 91.6 14.1 24.3 18.8 60.5 REPORT ON BUSINESS CONDITIONS 6 Tendencies in Domestic Prices h 1\ D u rin g th e p a st th irty d a y s p rices o f a n u m b e r o f im p o rta n t co m m o d itie s h a v e sh ow ed a d ow n w a rd Av te n d e n cy , such as sugar, coffee, p o ta to e s , w h eat, rye, oa ts, flour, c o tto n a nd tin . certa in o th er On im p o r ta n t co m m o d itie s declin es M ost of ra w or are th e h :i\ ii i in clu d in g p ig iron , h ogs and p a p er h a v e sh ow ed an u pw ard te n d e n cy . £Gft '£'S£/? V£ _ or , th e oth e r h an d , co m m o d itie s 4 fo< sh ow in g sem i-m a n u fa ctu re d ______ sf i — i— i I goods / s w h ich , b e fo r e th e y rea ch th e con su m er, w ill requ ire ii th e a p p lica tion o f la b o r; and w ages are still, on th e w h ole, increasin g. ! T h e decreases sh ow n in th e raw im p o rta n t goods. N ev erth eless, all ou r d om estic p rice indices \ decreases in th e m a n u fa ctu re d / fOt / th rou g h increased a ctu a l or co m e su p p ly , # iA n ...... y .... / ' o f stock s o f g o o d s w h ich h ad b een carried fo r sp e c in on exch an ges, sp ecu la tiv e m ov em en ts m a y h a v e p la y e d th eir p art. ft JA . (ft* ------------ u la tiv e p u rp oses; w hile in th e case o f staples d ealt — / .(t'/T s s 'r z / th rou g h decreased d em a n d , or th rou g h th e release f /$ • a b o u t m a in ly p ro s p e ctiv e Ph_______ A / t y declines h a v e J /A J? * sh ow fu rth er declines d u rin g th e p a st m on th . T h ese p rice *4 \ / co m m o d itie s w ill n atu rally , th erefore, n o t result in eq u a lly ij * + • /QL B u t the fa c t th a t w hile som e /<7/r /<?/<& U9JA. /w r /<?/<? prices w ere increasing and m a n y rem ain ed stable, so large a n u m b er o f im p o rta n t com m od itie s h a v e d eclin ed , on e a t a tim e, in respon se to co n d itio n s in th e Movement of Wholesale Prices in Five Leading Countries. for 1913 taken as a base of 100. Prices resp ectiv e industries, in d ica tes th a t w ith fu rth er cre d it in flation ch eck ed n atural law s are o n ce m ore op era tin g. R e ta il p rices, w h ich T h e B ritish E co n o m is t in d e x fo r J u ly a d v a n ce d w hile th e S ta tist in d ex d e clin e d , b u t th e ch a n ge in lagg ed b eh in d w holesale prices on th e u p w a rd m o v e m e n t, are likew ise laggin g b o th cases w as slight. The d ro p in th e F re n ch in d ex fo r Jun e was u n u su a lly h e a v y — 10.4 p e r cen t. on th e d ow n w a rd cou rse, and h a v e sh ow n fe w a p p re — a n d it n o w stands 15.6 p er ce n t, b e lo w th e p ea k cia ble declines as y e t. rea ch ed in A p ril. P rices in J a p a n co n tin u e d to d eclin e in J u ly and w ere 25.6 p e r ce n t, lo w e r th an W o r ld C o m m o d ity th e h igh p o in t rea ch ed in M a rc h . P r ic e s T h is is th e g r e a t est d eclin e in a n y o f th e re p o rte d indices. T h e general d eclin e in prices w h ich b ega n d u rin g A p ril and M a y con tin u ed w ith som ew h a t increased T h e ch a rt a b o v e presents th e m o v e m e n t o f w h ole im petu s, w ith th e ex ce p tio n o f B ritish p rices, and sale p rice indices in fiv e o f th e lead in g cou n tries and furnishes fu rth er in d ica tio n th a t th e p ea k has b een in d icates th e sim ilarity o f th e cou rse o f p rices in p assed. all o f these A lth o u g h th e p ercen ta ge o f d eclin e in th e several cou n tries varies con sid era b ly it is significan t cou n tries since th e b eg in n in g o f th e E u ro p e a n W a r. th a t th e tu rn in g p o in t in th e presen t m o v e m e n t w as rea ch ed in p ra ctica lly all th e p rin cip a l cou n tries w ith in a few w eeks tim e. T h e tren d is n o w d o w n T h e ta b le at th e to p o f th e fo llo w in g p a g e gives th e latest a vaila b le figures o f th e va riou s w a rd in e v e ry co u n tr y fo r w h ich indices are a v a il n u m bers a ble, w ith th e ex cep tion o f A u stralia. p reced in g figures and p ercen ta ge ch an ges. of w holesale p rices, to g e th e r w ith in d ex the FEDERAL RESERVE AGENT AT NEW YORK W h o le sa le Price Indices Country United States Bureau of Labor. . . This bank’s index................... (12 basic commodities) Dun’s.................................... Bradstreet’s.......................... . British Economist......................... British Statist............................. French......................................... Italian......................................... Japanese...................................... Canadian....................................... Swedish......................................... Australian...................................... Latest Available Preceding 262 (July average) 104.6 (Aug. 14) 269 (June average) 106.7 (Aug. 7) 208.7 (Aug. 1) 204.4 (Aug. 1) 292.46 (July 31) 299 (July) 493 (June) 614 (June) 239 (July) 258 (June) 364 (July) 233 (June) 215.41 (July 1) 210.06 (July 1) 291.39 (June 30) 300 (June) 550 (May) 659 (May) 248 (June) 263 (May) 866 (June) 225 (May) Per Cent. Change -2.60 -1.9 -3.1 -2.7 + .4 -.3 -10.36 -6.83 -3.63 -1.90 -.5 +3.55 Highest 272 (May average) 112.9 (May 17) 217.81 (May 1) 226.46 (Feb. 1) 310,14 (Mar. 31) 313 (April) 584 (April) 679 (April) 321 (Mar.) 263 (May) 366 (June) 233 (June) Per Cent. Decline from High Point 3.68 7.3 4.2 9.7 5.7 4.4 15.58 9.57 25.55 1.90 .5 .00 All indices have been converted to a 1913 base with the exception of this bank’s index which is based on prices at the armistice. Prices and W a g e s in O ther W a r Periods In many current discussions of the probable course of the deflation which appears to have begun it is quite commonly said that wages and prices must come down together, some writers even going so far as to assert that wages must come down before commodities can decline. It may be helpful in consider- ing this question to study the actual experience of two war periods concerning which reasonably accurate statistics are available; namely, the Napoleonic war period in England, and the Civil War period here, The two subjoined charts show clearly the relative -course of wages and prices in those periods. Course of Prices and Wages during and after the Napoleonic War*. Course of Prices and Wages during and after the Civil War. REPORT ON BUSINESS CONDITIONS After the Napoleonic wars it will be seen that prices in England declined, at first rapidly and then steadily, over a long period of years, while wages receded not only more gradually but much less. During the thirteen years following the Civil War it will be seen that our prices in currency dropped rapidly, while for seven years wages act ually rose. While unquestionably in the years following the European war the law of supply and demand will operate with respect to labor as well as to commodi ties, the foregoing charts indicate that in labor the law operates less promptly and freely. It is, of course, impossible to predict the future, but two things should be remembered at this time; that labor is now much better organized to resist wage reduc tions than it was in either 1815 or 1865, and that since 1914 the United States has received about 3,000,000 less immigrants than would normally have entered the country. in July shows that there has been little decline in the production of luxuries and that manufacturers of jewelry, pianos and player pianos, furniture and sim ilar articles are kept busy. Manufacturers of metal goods, machinery and conveyances, locomotives, clocks, typewriters and the like are active, although there has been a seasonal decline in plants making agricultural implements. Printing and paper goods and all kinds of chemicals showed increased activity in July as compared with June. Makers of men’s and women’s clothing, boots and shoes, furs and leather goods are still experiencing the dullness of a month ago. The lack of demand by retail customers is assigned as the principal reason. Our index figures on production and consumption, the great volume of freight movement and the con tinued high level of bank clearings all tend to show that manufacturing in July in the country as a whole was remarkably high for this usually dull month. M a n u fa ctu rin g Iron and M e ta ls Improved transportation which enabled some man ufacturers to make up orders in hand has doubtless been a leading factor in maintaining industrial activity in this district during the past month. There is some evidence of declining activity in textile mills, in plants manufacturing building materials and in factories making pleasure automobiles. The decline, however, is generally not so great as is popularly believed and is offset by seasonal increases in the manufacture of foods, heating apparatus, and other articles. The knit goods industry is particularly dull be cause of the lack of spring orders due to a price dead lock between manufacturers and distributors. Mills are running about 50 per cent, of capacity, generally, but they are kept busy only by orders for fall goods. Woolen mills are no more active than a month ago and some cotton mills have recently reduced opera tions to a part time schedule. Shipments of iron and steel are moving in slightly larger volume than a month ago and the supply of coal and coke is more ample. The unfilled tonnage of the United States Steel Corporation made a gain of 139,651 tons in July, against a gain of 38,351 tons in June, and reached a total of 11,118,468 tons, the highest point since June, 1917. As July is normally a dull month in the steel industry, this increase was fairly large, although it was chiefly due to delayed shipments and to purchases to forestall possible higher prices following the freight rate increase. Steel ingot production in July was nearly 10,000 tons a day less than in June, pig iron production 2,500 tons a day less. Domestic and foreign demand for steel is moderate, as exports are declining and the falling off in the requirements of the automobile, shipyard and building industries is only partly offset by the purchases of railroads and of implement works. Markets for the non-ferrous metals have been very quiet. Prices have held firm, with the exception of tin which has declined cents a pound to 48 cents. The passenger automobile trade has also shown a falling off. There have been recent cancellations of orders for automobile steel and for other materials used in the industry. The Iron Age estimates that manufacturers have curtailed production from 10 per cent, to as high as 75 per cent. A plant manufacturing a well-known make of car recently announced that it would run on a four-day schedule. The extreme dullness in the crude rubber market reflects unsettled conditions in the tire industry. The report of the New York State Industrial Com mission on employment in New York State factories C o tto n and W o o l Unstable conditions in the dry goods markets, a lower volume of exports and the rapid improvement in the various crop condition reports have borne cot ton prices downward during the month after rather wide fluctuations. The Polish crisis, with its conse FEDERAL RESERVE AGENT AT NEW YORK quent uncertainty as to the future of European markets, and incoming shipments of the new crop have more than counterbalanced the continued reports of crop damage by insects and by excessive rains in parts of the belt. Spot cotton declined $50 a bale from 43.5 cents per pound on July 23 to 33.5 cents on August 20. The near months followed it but the distant deliveries held steadier. During the month of July wholesale cotton piece goods declined about 3 cents a yard or approximately 10 per cent. Despite the frequent and persistent rumors of cur tailment of production by cotton mills, domestic consumption, according to our index figures based on 100 as the average for 1917, stood at 94.4 in July, against 97.8 in June. This is only slightly more than the usual seasonal decline of 2 per cent, for the period. The Census Bureau places the July consumption at 525,405 bales, against 555,521 bales in last June, and 510,328 bales in July of 1919. Active spindles in July were nearly 500,000 more than in July of last year. Exports were only 211,841 bales in July, against 241,450 in June of this year and 528,902 in July last year. The Government report on July 25 indicated a crop of approximately 12,519,000 bales, against 11,329,755 in 1919. In the wool market there is some slight evidence of improvement, but quotations are still mostly nominal, stocks are high and the demand is far below normal. A better demand for cloth appears to be developing and there is some prospect of increased mill operations after Labor Day. E x p o rt T ra d e Slackening in the volume of export buying has become more marked during the past thirty days. Some important exporters say that within this period what has been a seller’s market has become a buyer’s market. Instability of prices has made buyers hesi tate. Some markets have been over-bought, and reports of congested warehouses abroad are not infrequent. In a number of lines, goods sold have been turned back upon the market in large quanti ties. Renewed weakness in the foreign exchanges and the unsettling political situation in Europe have restricted purchases, and some countries, particularly those in South America and the West Indies, have been affected by the depressed condition of the markets for wool, hides, rubber, sugar, coffee and cocoa. Credits are becoming more diflicult to arrange, due to money stringency in all countries. As trans portation conditions in this country have improved, exporters now are bending their major efforts to hasten deliveries of materials already contracted for. 9 Export inquiries for leather were reported some what more active, but demand for textiles, drygoods, and kindred materials is very slow. New buying of cotton goods is nearly at a standstill, and there is disposition to cancel orders. The stronger houses, however, report that cancellations are generally being refused. Dull conditions in the markets for cotton manufacturers are reflected in light buying of raw cotton by British and Continental mills. Ex ports from this country for July were only 211,841 bales, or much the smallest of any month since the early period of the war. The foreign steel market is distinctly slower. Buy ing is tending to become hand-to-mouth, as both buyers and sellers are reluctant to undertake com mitments far in advance. Reports from Europe tell of growing accumulations of certain classes of ma terials in dealers’ hands and of offerings below manufacturers’ prices. The Japanese market has not strengthened, and Japanese re-selling is material ly affecting other Far Eastern markets. China con tinues quiet, and there is less demand from India. South American buying has also fallen off, and exporters are now receiving some cancellations from that quarter. Building materials, hardware, construction machi nery, and machine tools have been somewhat more resistant to the general softening. Building sup plies available at the seaboard have been actively bought for Cuba and South America where large construction projects are under way. Export de mand for oil and coal still exceeds supply. Coal shipments during July were very heavy notwith standing priority allocations to New England. Preliminary figures for the month indicate that the railroads surpassed all previous totals in movements to tidewater. More stringent priority orders by the Interstate Commerce Commission, which went into effect August 2, caused only a slight decrease in exports during the first week of August which were at the rate of over a million tons a month. Copper buying, which was more active for a time last month, has again dwindled. Tonnages sold were small, with France the principal buyer. It is reported that Japanese re-selling has diminished. Grain exports continue heavy; for the six weeks ended August 12 the movement totaled 56,000,000 bushels, compared with 35,000,000 bushels in the same period last year. Foreign buying is reported to have slackened temporarily within the last few weeks during the period of extreme unsettlement in grain prices and foreign exchange rates. Buying of other foods continues generally light. 10 REPORT ON BUSINESS CONDITIONS R e ta il T ra d e With the single exception of April, retail trade in this district during July was the dullest of any month this year, according to reports from department stores in New York and other cities. There has been considerable liquidation of retail stocks by reduction sales, but it has been at the expense of profits. Frequently clothing and shoes have been sold below replacement values. Stocks have been reduced but stores are delaying refilling their shelves pending the development of a retail demand and the advent of expected lower prices in textiles, clothing and kindred lines. There have been numerous sales of men’s clothing where a uniform price on all grades has been used to offset the loss of high-priced stock by mixing it with low-grade stock. However, men’s clothing has held comparatively steady as compared with women’s apparel, which has shown larger reductions. August furniture sales have been well patronized and a demand for the better grade of furniture has been noted. Sales of jewelry to the wage-earning class have declined somewhat but not so much as sales to wealthier customers. Downtown sales are better maintained than are those in the Fifth Avenue district. The demand for pianos, other musical instruments and specialties is still active. The demand for passenger automobiles is reported as far less than it was several months ago. This is ordinarily a dull season, but the quietness is abnormal. What purchases are made are fre quently on a time-payment basis and buyers look more carefully to the utility and cost of upkeep of the car they buy. Conservatism in all kinds of purchases is the rule and this attitude of the public is welcomed by the better class of stores as offering them an opportun ity to do business on a more stable basis. The following schedule compiled from figures furnished us by department stores shows that sales in this district in July increased 24.4 per cent, as compared with the corresponding month a year ago. B usiness o f D e p a r tm e n t Stores Percentage of increase in net sales from July 1 to July 31 over net sales during same period last year............................................................................................................................ Percentage of increase of stocks at close of July, 1920 over stocks at close of same month last year............................................................................................................................. Percentage of increase of stocks at close of July, 1920 over stocks at close of June, 1920. .. Percentage of average stocks at close of each month from July 1 to average monthly net sales during same period................................................................. ........................................... Percentage of outstanding orders at close of July to total purchase during calendar year, 1919. ^Decrease New York City and Brooklyn Outside New York Second District 22.5 26.9 24.4 46.1 *4.3 30.9 4.6 39.5 *5 390. 15.7 485.3 18.9 440.1 17.4 Failures C ollection s During July the number of commercial failures in this district increased, as the following figures, taken from the Dun reports for the Second Federal Reserve District, indicate: Collections in the textile trades, particularly, continue very slow, and an investigation by one of the New York credit agencies indicates that about 20 per cent, of the accounts of the smaller concerns are overdue. While the accounts of the larger tex tile houses are in somewhat better condition, it was estimated that 12 to 15 per cent, of these payments were also delayed. While this is a very high per centage of slow accounts, the general opinion of the trade looks for some gradual improvement in pay ments as prices steady. Delayed collections are also reported generally throughout the millinery, fur manufacturing, clothing, men’s furnishings and leather trades. Prompt collections are reported in the drug jobbing, crockery, glassware, hardware, and cutlery trades, while the piano trade reports con tinued good payments. Number of Failures 1920 1919 January February March April May June July 103 75 139 Liabilities 1920 1919 117 133 164 172 134 102 102 107 93 104 79 $ 1,212,644 1,062,322 6,213,228 2,865,153 2,413,591 16,218,230 11,438,511 $ 3,258,200 2,686,546 4,033,008 4,365,253 3,194,187 4,040,301 1,836,523 903 721 $41,423,679 $23,414,018 FEDERAL RESERVE AGENT AT NEW YORK B u ild ing The most encouraging feature of the building sit uation is the awakening of the public to the serious ness of the housing shortage, which is intensified by the difficulties of obtaining mortgage money and building materials. In an effort to cope with the matter, the Governor of New York has called a special session of the state legislature to meet in September to consider ways and means of supplying the state with more adequate housing facilities. It is estimated that New York City is short over 100,000 apartments, to house about 400,000. One computation places the shortage for the whole country at 5,000,000 houses; but other estimates vary widely. Yet only one plan for an apartment house was filed in Manhattan in July, and figures compiled by the Dodge Company show that con tracts awarded for residential buildings in this dis trict and in the territory east of the Missouri and north of the Ohio Rivers declined even from the June low level. In New York City a number of residences and apartments have been broken up into smaller units and in the suburban districts houses which have for merly been occupied only during the summer are being prepared for winter occupancy. These meas ures will afford some relief when the return to the city occurs in October. Although more cars have been directed by the Interstate Commerce Commission to the carrying of building materials, transportation facilities for those materials are very, inadequate. Producers have curtailed production despite the demand, prices hold high and those contemplating building projects hesi tate to cope with the present difficulties. The Dodge figures show that contracts awarded in July in the most heavily populated part of the United States totaled $204,000,000, against $261,000,000 in June, a decline of about 22 per cent. In the Second Federal Reserve District contracts awarded declined from 974 to 885 and their value from $69,000,000 to $36,000,000, more than 45 per cent. C ro p C o n d itio n s Prospects for excellent harvests in the Second Federal Reserve District were improved during July by frequent and evenly distributed rains with moderate temperatures over the entire area. With the single exception of corn the yields per acre are expected to exceed the average in practically the entire district. While the yield of corn will be less than last year it is expected to be well up to the ten year average, 11 a crop of 34.2 million bushels in this Federal Reserve District being forecast for the 1920 harvest as com pared with 41 millions in 1919. Winter wheat has averaged 22.3 bushels per acre, or more than the ten year average, and a total wheat harvest of 11.8 million bushels is forecast. Oats have improved very materially and an increase of 10 bushels per acre is expected over the 1919 yield or a harvest of 44.6 millions of bushels. Other field crops will show an average yield or better. A yield of 34 million bushels of potatoes is ex pected in New York for 1920 as compared with 39.5 millions last year,or a reduction of 14 percent., partly the result of an 8 per cent, reduction in acreage. Fruit prospects continue to improve, and apples in particular will show a heavy yield. E m p lo y m e n t The closing of a number of knitting and textile mills and the curtailment at some other factories have thrown considerable numbers out of employment, but apparently they have found work elsewhere. At least, the report of the New York State Industrial Commission shows that there was a decrease of only one-half of one per cent, between June and July in the number of factory workers employed in this state. The lines of business showing the most marked reductions in number of operatives are the manufac ture of stone, clay and glass products, fur and leather apparel, textile products and clothings with smaller reductions in agricultural implements and cutlery. There were gains in metals, chemicals, wood products and food. The shortage of farm labor which seemed ominous a few months ago has been largely overcome by the industry of those who were available and by the redoubled efforts of the farm owners in their own fields. There appears to be little labor unrest in this district. A number of small strikes have been set tled during the past month and there is still employ ment enough to prevent any substantial increase in idleness. Reports of the greater efficiency of labor are frequent, but the lessening of the pressure for greater production in some instances has tended to make the employers less exacting. The report of the New York State Industrial Com mission shows that the average weekly earnings of factory workers in the state were $28.49 in July, a decrease of 28 cents from the June average, but an increase of $5.39 over the average for July, 1919. REPORT ON BUSINESS CONDITIONS 12 Im m ig ra tio n Immigrants have been coming to the United States in constantly increasing numbers and taxing ship capacity. Large numbers have booked pas sage for America and doubtless many more would come from Germany and Austria if restrictions were removed. But some observers in close touch with conditions abroad find the present influx due chiefly to abnormal conditions in Poland, to political unrest in Spain, Portugal and Ireland, and to the return to this country of Italian reser vists accompanied in some cases by their friends and relatives. Approximate figures of arrivals and departures at this port from January 1 to July 31, 1920, are as follows: Departures Arrivals 24,529 25,051 January 22,086 24,379 February 18,714 29,098 March 26,169 36,958 April 21,162 40,048 M ay 37,584 49,715 June 32,935 56,102 July Total 259,058 185,472 R ailroa d s and T ra n sp o rta tio n The railroads continue to report a steady im provement in transportation conditions as shown in the increased volume of freight handled, as well as in the reduction of congestion, and the coincident decrease in car shortage figures. Traffic on most roads entering New York appears to be holding steady at recent high figures and is even increasing slightly, while there is now very little con gestion. Some export freight has accumulated in one or two of the yards, but for the most part the handling of this type of freight is being done without delay. The movement of much of the freight consigned to New England points has been facilitated by diverting it around the New York gateway, thus aiding also the free movement of cars consigned to New York. A vigorous campaign for prompt loading and unloading of cars in the railroad terminals has met with good results and delays for these purposes are being shortened. The movement of coal continues to show rather sharp increases over the corresponding periods of last year. The New York Central, for instance, reports an increase of 20 per cent, in the July movement of loaded coal cars as compared with the same period of last year. Another road, an important carrier of anthracite, reports an increase of 16 per cent, over last year in the amount of coal carried in the last two weeks of July, and of 26 per cent, in the first two weeks of August over the coal traffic in the same per iod of 1919. While the month to month increases in the volume of freight handled by most roads are now rather small and are accomplished for the most part rather by more efficient handling of the cars available than by the use of additional labor or equipment, the in creases over last year are being well maintained. Individual roads have reported to us increases of 10 to 15 per cent, each month over the same periods of last year. For the entire country it is reported that 4,351,363 cars of commercial freight were loaded in the five weeks ended July 31 as compared with 4,273,343 cars in the same period of last year, or an increase of about 2 per cent. In addition to the improved railroad traffic the final satisfactory settlement of the local dockworkers5 strike has done much recently towards helping the return to normal in transportation conditions. This strike, which had been in existence since March, had held up the handling of both foreign and coast wise freight shipments at many of the large piers. With the return to work of these striking longshore men in the first part of August a heavy accumulation of freight delayed at the terminals, was released. Work at the docks is now going forward at practi cally normal speed. (The figures contained in this report have been compiled as of August 20, 1920)
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