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MONTHLY REVIEW of Credit and Business Conditions S e c o n d Federal Reserve Agent F e d e r a l R e s e r v e Federal Reserve Bank, New York Business Conditions in the United States I N D U S T R IA L activity and the volume of wholesale and retail trade increased in October. Wholesale prices declined somewhat to the level prevailing at mid-year. P r o d u c t io n The Federal Reserve B oa rd ’s index of production in basic industries, which makes allowance fo r seasonal changes, rose by about 4 per cent in October, reflecting increases in the output of most of the 22 commodities included in the index. Particularly large increases in activity were shown for the iron and steel and textile industries, and the output of bituminous coal and of lumber was in large volume. Production of automobiles in October was the largest on record. Payrolls at fac tories, including industries not covered by the produc tion index, increased in October to the highest level since early in 1924. The value of building contracts awarded declined further in October, but the total was consid erably larger than in the corresponding month of any other year. Estimates by the Department o f A griculture in No vember indicate a corn crop of 3,013,000,000 bushels and a cotton crop of 15,298,000 bales, compared with 2,437,000,000 bushels and 13,628,000 bales in 1924. Marketing of crops was seasonally larger in October than in September but averaged nearly 10 per cent less than a year ago. PERCENT. Index o f 22 Basic Commodities Corrected for Seasonal Variation (1919 = IOO Per cent. Latest Figure, October) D is t r ic t December 1, 1925 T rade Wholesale trade, according to the Federal Reserve B oard's combined index o f sales in six leading lines, reached a seasonal peak in October and was in larger volume than fo r any month of the past five years. Sales at department stores and mail order houses, owing partly to favorable weather conditions, showed consid erably more than the usual increase in October and were the largest on record fo r that month. Stocks o f d ry goods, shoes, and hardware at wholesale firms were smaller at the end of October than on September 30, but stocks of groceries were larger. Merchandise stocks at department stores showed slightly more than the usual increase in October, and were somewhat larger than at the end o f October a year ago. Freight car loadings reached a seasonal peak in Octo ber and totaled more than in any previous month, not withstanding reduced shipments o f anthracite and of grains and grain products. P r ices The Bureau o f Labor Statistics index o f wholesale prices, after remaining relatively constant fo r three months, declined from 160 in September to 158 in Octo ber, reflecting declines in the prices o f agricultural products, particularly grains, livestock, meats, cotton, and sugar. Since November 1 prices o f grains, wool, sugar, pig iron, and rubber have increased. PERCENT. Index of U. S. Bureau of Labor Statistics (1913 = 100 Per Cent, base adopted by Bureau. Latest Flgur», O ctober) M ONTHLY REVIEW, DECEMBER 1, 1925 PER CENT. 0TUJON3 o r DOLLARS 1922 Indexes 1923 1954 of 1925 Factory Employment and Factory Payrolls Manufacturing Industries (1919 averages = 100 Per cent. Latest Figures, October) B ank in C r e d it Between the middle of October and the middle of November, loans fo r commercial and industrial purposes at member banks in leading cities continued in a volume about $450,000,000 larger than at mid-summer. Loans on securities increased further and total loans on No vember 11 were about $1,000,000,000 larger than at the opening o f the year. Demand deposits increased fu r ther during October and early November to a level near the high point o f last January. A t the Eeserve Banks total bills and securities in November were in the largest volume fo r the year and about $200,000,000 larger than a year ago. Member bank borrowings declined somewhat from the high point reached early in October, while acceptance holdings continued to increase and on November 18 were larger than at any previous time fo r the year. The growth in Ee serve Bank credit since mid-summer was chiefly in response to the seasonal increase o f money in circulation, whicii on November 1 was about $180,000,000 larger than on August 1. D uring the latter part of October and early part of November open market rates fo r commercial paper and bankers acceptances remained substantially unchanged at the levels reached during the early autumn. Discount rates at the Federal Reserve Banks of Boston, Cleveland, Philadelphia, and San Francisco were advanced from 3y2 to 4 per cent during November. Money Market A lthough there was little change in the general level of rates, slightly easier money conditions prevailed in the New Y ork market after the middle of October and in most o f November. Demand fo r funds, as reflected by commercial loans of weekly reporting banks, remained slightly below the seasonal high point reached in the middle of October, and the volume o f credit employed in the security markets likewise decreased slightly ac com panying the reaction in prices. The volume of member bank loans and investments in this district remained in November slightly below the Member Bank Credit-—W eekly Figures for Member Banks in 101 Leading Cities (Latest Figures, November 11) total at the beginning o f the year. Net demand deposits increased moderately over October levels, but total de posits including time and Government were little changed at levels lower than at the beginning o f the year. The follow ing table, com paring changes in total loans and investments and deposits o f reporting banks by districts since the first o f the year, indicates how credit tendencies in this district have differed from those in other districts. Per cent Change from January 7 to November 18 Tota Loans and Investments Total Deposits Boston........... New York.. . Philadelphia. Cleveland. . . Richmond. .. Atlanta........ Chicago........ St. Louis........ Minneapolis. . Kansas City. . Dallas............ San Francisco + 7.9 — 0.1 + 5.0 + 6.0 -1- 6.7 +17.7 + 6.0 + 2.0 — 4.7 + 2.0 + 5.6 +12.8 + 6.2 — 3.0 + 2.2 + 5.1 + 7.3 + 1 5 .S + 4.9 — 2.7 — 5.5 O + 0.3 + 9.6 Total.......... + 4.1 + l.g Member bank reserves in this district were generally maintained during November without additional bor rowing at the Reserve Bank until late in the month when currency withdrawals within the district coincided with loss o f funds to the interior and the withdrawal o f gold fo r export to Canada. These requirements fo r funds led to some increase in rediscounts at the Reserve Bank. Reflecting fairly ample supplies of funds during the greater part o f the period, call loans, after touching 5 per cent on the first two days held generally stable around 41/2 to 4 % per cent until late in the month when the rate went to 5 and 5V2 per cent. Commercial paper was also slightly easier in tone, though quoted rates remained little changed at 4*4 to 4y 2 per cent. A t these levels, however, dealers continued to find it difficult to com pete with banks, and supplies of paper continued small as in October when the outstandings o f 26 dealers reached a new low point since 1921. FEDERAL RESERVE AGENT AT NEW YORK In the bill market, on the other hand, supplies o f bills were considerably increased due both to seasonal increase in the amount outstanding and to bank selling late in the month, so that dealers’ portfolios rose to the highest levels of the year, and bid and offer rates held firm at 3 % and 3 % for 90-day bills. Time loans on stock mar ket collateral w7ere steady during the month at 4 % to 5 per cent. Loans largely for Commercial Purposes o f 723 W eekly Reporting Member Banks in all Districts and Outstanding Com mercial Paper o f 26 Dealers Security Markets D uring October and early November the volume of trading on the Stock Exchange exceeded all previous levels and prices likewise rose to new high points. Later in the month industrial prices reacted to levels approxi mately 10 points below the maximum, while railroad issues were irregularly strong. Corporation bond prices were firmer in November, and most United States Government issues also advanced following the announcement later in the month that the Treasury will purchase $50,000,000, or thereabouts, of Third Liberty Loan 41/4 per cent Bonds of 1928, at the lowest prices offered, if at or below the price of 101% and accrued interest. Am ong foreign bonds, French securi ties were weak in sympathy with the decline in exchange. The volume of new domestic security issues was only moderately large in November, but foreign issues aggre gating $180,000,000 were the heaviest fo r any month this year, due largely to the offering of $100,000,000 bonds fo r the Italian Government in connection with an exchange stabilization program. A feature of foreign offerings lately has been numerous loans of German co r porations and Governmental sub-divisions. These totaled $48,000,000 in November, and since the German Government international loan of $110,000,000 in Octo ber 1924 have amounted to $226,000,000, bringing the total of all German issues offered in this market during the past year to $336,000,000. The follow ing table shows the volume of these offerings. Nature of Loan Number of Issues Amount National Government.................................... Provincial and Municipal.............................. Corporate, guaranteed by government........ Corporate, without government guarantee.. 1 17 8 8 $110,000,000 99,000,000 63.000.000 64.000.000 Total............................................................ 34 $336,000,000 The Italian Debt Agreement A s a result o f the conclusion on November 14 of an agreement fo r the funding o f the Italian debt to the United States, subject still to the approval o f Con gress, ten countries have now funded their debts to the United States. B y this agreement Italy agrees to pay a principal amount of $2,042,000,000 in annual instalments over a period of sixty-two years, together with interest beginning after 1930 and ranging u p ward from Ys o f 1 per cent annually from 1930 to 1940 to 2 per cent annually in the last seven years from 1981 to 1987. Payments o f $5,000,000 are to be made in each year up to June 15, 1930, and there after amounts gradually rising from $12,100,000 in 1931 to $79,400,000 in 1987. This method of pay ment is different from that of the British and Bel gian debt settlements which call fo r payments of prac tically constant amounts after the first ten years. Obligations now funded total about $7,400,000,000, including the debts o f Great Britain, Belgium, Czecho-Slovakia, Esthonia, Finland, H ungary, Italy, Latvia, Lithuania, and Poland. Under these agreements payments due in 1926 are as follow s: Great Britain....................................................................................... $160,900,000 Italy...................................................................................................... 5,000,000* Belgium................................................................................................ 3,840,000 Czecho-Slovakia................................................................................... 3,000,000 Poland................................................................................................... l,500,000x Finland................................................................................................. 314,890 Lithuania.............................................................................................. 209.550J Esthonia........................... .................................................................. 100,000x Hungary........................... ................................................................... 67,588J Latvia......................... ........................................................................ 60,000x *Paid in advance in November 1925. xOptional. Total $174,992,028 JPartly payable in bonds. Foreign Exchange A fter recovering to $4.8469, sterling weakened toward the close o f November to $4.8406, and gold ship ments to this country were again reported. French exchange showed a further decline, and at 3.76 cents on November 25 reached the lowest point since March 1924, from which, however, there was later a recovery to around 4 cents. Belgian francs, on the contrary, showed unusual stability, ranging from 4.51 cents to 4.54 cents, and the Italian lira rose above the French franc to 4.07 follow ing conclusion o f the debt funding agreement and flotation o f an exchange stabilization loan in this market. Both Danish and Norwegian currencies, although still strong, reacted slightly from the high levels of the pre vious month. The Canadian dollar reached a new high premium of 3/16, in consequence o f which further substantial ship ments o f gold were sent to that country. Argentine pesos were likewise strong at close to par, while Brazilian exchange turned somewhat reactionary. In the Far East, yen advanced two cents to 43.50 cents, the highest since March 1924, presumably as a result o f recent ship ments o f gold to this country and a more favorable trade balance. M O N T H L Y R E V IE W , D E C E M B E R 1, 1925 Gold Movement ployment in these plants remained much higher than a year ago. E xcept for the receipt of nearly $1,000,000 from Great Britain during the first week of November, imports and exports of gold at the P ort of New Y ork during the first three weeks of November were small. Late in the month, however, an easing in sterling exchange was followed by the import of an additional $1,500,000 from England, while a rise in Canadian exchange was fo l lowed by further exports of $20,000,000 to Canada. F or October gold imports fo r the country totaled $50,741,000, of which $41,900,000 came from England and $4,000,000 from Japan. A s exports, however, totaled $28,000,000, chiefly to Canada, the import bal ance fo r the month was reduced to $22,700,000. F or the two months October and November, preliminary figures indicate imports from Great Britain of $44,000,000 and exports to Canada of $42,000,000. W eekly earnings o f factory workers in New Y ork State averaged $28.57 in October, an increase o f more than a dollar from a year ago, and the highest since 1920. The increase in earnings apparently is due to fu ll time schedules and relatively high employment in the more highly paid trades, as wage rates have been fairly steady fo r the last two years. Recent moves, however, on the part of organized labor to secure higher wages have ineluded demands by New Y ork City building trades unions for higher wage scales when the present agree ments expire at the end of the year, and a proposal by the western group of the railway brotherhoods to demand a restoration o f war-time wage rates. Foreign Trade The value of both imports and exports o f merchan dise again increased in October, but exports at $492,000,000 were 7 per cent less than in October 1924, while imports at $375,000,000 were 21 per cent larger than a year ago. Compared with October 1924, there was a large increase, both in incoming and outgoing trade, in the proportion of crude materials for use in m anufac ture. Contrary to usual tendencies, exports of grains and grain products were $15,000,000 lower than in Septem ber, and the smallest since the low point in the summer of 1924. Cotton exports, on the other hand, valued at $176,000,000, were more than $78,000,000 above Septem ber, and in volume the largest for a single month since 1915. F or the crop m oving year since August 1 cotton shipments amounting to nearly 2y2 million bales have been heavier than for any similar period since 1913. This reflects larger production this year, as the percent age of exports to output is running no higher than in other years. Employment and Wages Factory employment in New Y ork State increased 2 per cent further in October, and with the exception of last March was the highest since A p ril 1924. E m ploy ment in other forms of industrial and commercial activi ties was also high, and reports indicate difficulty in some sections in securing enough farm help and skilled build ing labor. The most important gain in factory employment was in the metal working group of industries. Employment in iron and steel mills was 15 per cent greater than in the previous month or a year ago, and gains were re ported in automobile, machinery and electrical appar atus, brass and copper, and typewriter plants. W orking forces were substantially expanded also in the woolen and worsted mills, and moderate gains occurred in cot ton goods and knit goods. Curtailment in building materials was unusually small for the season and em Production M anufacturing activity continued to increase in Octo ber, according to this bank’s indexes o f production, and in many lines was substantially above the trend shown by past years. Average daily iron and steel production increased an additional 7 per cent, and unfilled orders o f the Steel Corporation rose nearly 400,000 tons to the highest level since the end of A pril. Railroad buying continues to supplement active demand from other consuming in dustries, and purchasing generally fo r the first quarter of 1926 is reported in increasing volume. Due partly to the anthracite strike, production of bituminous coal in October and November reached high est levels since 1920, and since the first o f the year has exceeded that of a year ago by 8 per cent. Beehive coke (Computed trend of past years=100 per cent) 1925 1924 Producers’ Goods Bituminous coal........................................ Copper, U. S. mines................................. Tin deliveries............................................ Gas and fuel oil........................................ Cotton consumption................................ Woolen mill activity*.............................. Leather, sole............................................. Silk consumption*.................................... Oct. Aug Sept. Oct. 75 85 94 103 88 99 120 98 91 97 121 107 81 111 81 98 96 100 110 107 127 108 78 83 131 103 79 130 84 105 lOOr 103 105 110 125 100 85 88 131 106r 71 122 89 104 106 104 101 113 105 121 101 110 106 99 102 78 102 114 139 113 95 100 87 120 124 104 105 114 93 99 99 93r 100 74 101 137 125 108 81 101 104 95 96 90 102 107 94 113 141r lOOr 105 80 108 130 134 114 85 105 ** 126 117 163 91 94p 126 108p 79 136 Consumers' Goods Cattle slaughtered.................................... Calves slaughtered................................... Sheep slaughtered..................................... Hogs slaughtered...................................... Sugar melt.ngs, U. S. ports..................... Wheat flour............................................... Tobacco, manufactured........................... Gasoline.................................................... Paper, total............................................... Boots and shoes........................................ Anthracite coal......................................... Automobile, passenger............................. Automobile, truck..................................... *=Seasona, var ation not a’lowed for. **=Strike. p ~ Preliminary. 109 117 95 102 122 95 115 71 106 iis 87 lOOp ** 169 179 128 r=Revised FEDERAL RESERVE AGENT AT NEW YORK production continued to increase and was nearly double that of a year ago. October production of passenger automobiles amount ing to 392,600 vehicles was larger than ever before; while this was due partly to the temporarily curtailed production in August and September, the output for the three months combined was much above that of any corresponding three months except in 1923. P rodu c tion of trucks, although lower than in September, was still nearly 30 per cent above the computed trend. in the textile industry, this bank's indexes of woolen mill activity and cotton consumption rose above 90 per cent of the computed trend, compared with 77 to 78 per cent during the summer, and the index of silk con sumption reached the highest level since March. Other m ajor lines operating at high levels of activity during the month were cement, copper, lumber, and zinc pro duction. higher than a year ago compared with gains o f 12 to 13 per cent earlier in the year. These increases have not been confined to the larger cities but have been widely distributed throughout the smaller cities as well. The accompanying diagram giving the figures fo r various cities in this district illustrates the uniform character of the increases over a year ago. Railway shipments o f merchandise and miscellaneous freight, while seasonably somewhat reduced from the high point in October, continued above all previous years, and retail sales through department stores and mail order houses were unusually large. Factory labor continued well employed, building remained at high levels, and real estate transfers were substantially above estimated normal, as measured by the trend of past years. Accom panying these evidences o f business activity, the volume o f speculation on the New Y ork Stock Exchange attained new high levels. (Computed trend of past years=100 per cent) Indexes of Business Activity 1925 1924 Further expansion of trade and general business ac tivity was indicated by this bank's indexes for October and the first part of November. Bank debits outside of New York, which closely reflect business conditions, reached new high levels for all time, 15 per cent 500 Department store sales, Second Dist.. . . Chain store sales....................................... Mail order sales........................................ Life insurance paid for............................. Real estate transfers................................ Magazine advertising............................... Newspaper advertising............................ BUFF ALO 200 V y Sept. Oct. 103 98 99 111 106 201 103 103 104 91 102 114 83 94 106 96 90 95 118 89 93 103 94 93 95p 118v 98 95 110 110 111 100 96 103 98 120 120 101 94 95 102 94 116 122 112 105 95 106 99 128 116 113p 106 100 103 103 109 122 110 122 112 121 General Business Activity V h e w a r k NORTHERN ^ r _ NEW J E R S E Y / * yVA R O C H ESl IOO 90 80 V A v * a i7 ^ y v Bank debits, outside of New York City. Bank debits, New York City.................. Bank debits, 2nd Dist. excl. New York City........................................................ Velocity of bank deposits, outside of New York City..................................... Velocity of bank deposits, New York / $ Shares sold on New York Stock ExPostal receipts........................................... Electric power........................................... Employment, N. Y. State factories........ Business failures....................................... Building permits....................................... ■^ALBANY 70 60 50 *= Seasonal variation not allowed for 99 107 105 110 93 105 99 102 95 121 122 123 105 101 105 98 105 167 188 99 107 98 101 184 210 103 108 100 97 184 307 104 ioo 97 204 p=Preliminary SYRACUSE Building 40 30 P A S S A IC 20 Aug. Distribution to Consumer 400 300 Car loadings, merchandise and misc....... Car loadings, other................................... Wholesale trade, Second District............ Grain exports............................................ Panama Canal traffic............................... MILLIONS Of DOLLARS Oct. Primary Distribution V "a \ Y 4*. . . ii ^ Y A / v P v ~ r v B IN G H A M T O N v / W STAM FORD 10 19£3 1 9 2 .4 19 Z 5 Monthly Volume of Bank Debits for Selected Cities in the Second Federal Reserve District. Building undertakings continued large in October, approximately 27 per cent above a year ago, according to the F . W . Dodge C orporation's figures o f contracts let and the S. W . Straus Com pany's report o f permits issued. In this district contracts, after fallin g below a year ago in the first half o f this year, gained 63 per cent over 1924 in the months from July to October, while fo r the country as a whole, a gain of 15 per cent during the first six months was converted into a gain o f 50 per cent from July to October. The follow ing table, compares MONTHLY KEVIEW, DECEMBER I, 1925 r e r C ent. 220 1925 1894 Building Permits in Leading Cities in Percentages o f 1913. (Changes in Construction Costs Allowed For. Black Areas Represent Deviations from the General Trend.) the percentage increase fo r the entire ten months over last year with changes in previous years. 1920 Percentage change from pre ceding year......................... 1921 1922 1923 1924 1925 — 0.6 — 8.2 +42.0 + 4.8 + 12.3 +28.4 Residential building continues to be largely respon sible for the maintenance o f high building totals, al though commercial building has increased substantially and shows a larger percentage gain than other types. The accom panying diagram, com paring permit figures for a wide sampling o f cities, in percentages of 1913 and after conversion as nearly as possible to 1913 dollars, indicates the extent to which current totals have been running above the long term trend. W hile precise esti mates of building surplus or shortage are impossible, owing to such factors as changing standards of living, changing character of cities through suburban develop ment, longer use of old buildings, etc., it would now seem probable that recent construction has eliminated most of the shortage heretofore existing as a result o f underbuilding during the war. This conclusion appears to be in keeping with the general consensus of estimates by competent authorities and with the moderate decline in rentals in many sections. Business Profits A continued high level o f industrial profits was indi cated by the third quarter earnings o f 99 industrial cor porations which, although slightly below those o f the second quarter, were otherwise the largest in more than three years. F or the three quarters combined, earnings were the largest o f any recent year and 9 per cent greater than in the whole o f 1924. Despite the reduced prices o f cars effective in the third quarter, profits of motor and accessory companies held close to the high total of the second quarter, and fo r the nine months exceeded the w7hole o f 1923 and 1924 by 15 and 60 per cent respectively. In the steel indus try, on the other hand, continued low prices were re flected by a decline in earnings as com pared with 1923 though the totals rose somewhat above 1924. In other groups listed in the table below, earnings both fo r the third quarter and for the nine months exceeded corre sponding periods in either o f the two years. Telephone companies continued to report a steady ex pansion in earnings, while profits o f class 1 railways, both fo r the third quarter and the nine months were also the largest in recent years. In the case of the railroads, earnings in August and September were fo r the first time since the passage o f the Transportation A ct at a rate exceeding 5 % per cent on tentative valuation, the figure fixed by the Interstate Commerce Commission as com prising a fair return on investment. (Net profits in millions of dollars) 1923 1924 No of Corpo rations 1st Quar. 2nd Quar. 3rd Quar. 14 15 11 14 11 10 24 37 20 24 12 8 3 13 47 24 43 13 10 4 13 28 16 39 13 9 3 14 112 60 106 38 27 10 40 130 67 146 48 30 12 54 Class I RR............................................... 99 70 193 117 36 185 154 35 262 122 30 277 393 101 724 Total..................................................... 362 338 451 1 429 1,218 Motor & Motor Accessories................... Food & Food Products........................... Metal & Mining...................................... Machine Manufacturing....... ................. Miscellaneous.......................................... Total 7 groups......................................... Nine Twelve 1st Months Months Quar. 1925 Nine Twelve 1st Months Months Quar 2nd Quar. 3rd Quar. 32 29 42 12 7 3 14 21 22 28 13 8 3 11 20 18 17 14 6 3 6 73 69 87 39 21 9 31 94 84 107 51 30 11 40 487 136 979 139 35 203 106 37 188 84 36 287 329 108 678 1,602 377 331 407 1.115 Nine Months 2nd Quar. 3rd Quar. 36 23 30 12 11 4 13 60 31 31 15 10 4 16 54 28 30 16 11 4 16 150 82 91 43 32 12 45 417 151 987 129 44 204 167 46 234 159 46 359 455 136 797 1,555 377 447 561 1,388 7 FEDERAL RESERVE AGENT AT NEW YO R K Commodity Prices A steady decline in commodity prices during October was indicated by this bank’s weekly index of 20 basic commodities, and by a decline of 1.3 per cent in the Department o f Labor index of average wholesale prices. In November, however, firmer prices were reflected in a recovery by this ban k’s index of most of the October decline. Important elements in the November advance were substantial gains in wheat and cotton prices. Wheat reached the highest level since August and spot cotton at 21.65 cents on November 21 was 2 ^ cents above the October low point. In the case of corn, on the other hand, prices declined follow ing a further increase in the crop estimate and were nearly 30 cents lower than a year ago. Eubber advanced to within a few cents of the July high point, and prices o f both raw and refined sugar showed moderate recoveries from the low levels of October. P ig iron prices were also higher, but copper declined steadily after the first week of the month. PERCENT. 175 vN 150 Net I Percentage Change Commodity Groceries........................................ Men’s clothing.............................. Women’s dresses........................... Women’s coats and suits.............. Cotton-Jobbers............................. Cotton-Commission houses.......... Silk goods...................................... Shoes.............................................. Drugs............................................. Hardware....................................... Machine tools............................... Stationery...................................... Paper.............................................. Diamonds...................................... j Jewelry...........................................J Weighted Average. 7^^ V Oct. 1925 from Sept. 1925 Oct. 1925 Oct. 1925 from from Oct. 1924 Sept. 1925 0 +16.1 — 12.7 — 15.6 +47.3 + 2 .6 — 5.3 — 2.4 + 2.6 +34.1 +13.2 + 2.4 +17.7 +15.1 +20.1 +30.2 Stock at end of month Percentage Change + 0.9 — 11.5 — 2.1 + 8.5 + 5.8 +20.1 + 6.3 + 3.9 + 7.0 +51.0 + 7.5 + 6.3 — 4.2 — 4.0 Oct. 1925 from Oct. 1924 +11.8 + 0 —10.0 — 13 + 'i!2 * +28 +19 — 5.0 fr-4.3 4.0 + 2.e + 7.2 *Stock at first of month— quantity not value Chain Store Sales 125 100 Due, however, to the failure o f wholesale groceries to show an increase, and to decreases in sales o f wom en’s clothing and of jew elry and diamonds this bank’s weighted index o f trade increased only 3 per cent over October 1924. Stocks o f merchandise on hand continued to show about the same changes from a year ago as at the end of September. Stocks o f cotton goods, hardware, and jew elry and diamonds remained smaller, grocery stocks were little changed, while stocks o f shoes and silk goods were substantially larger than in October 1924. JAN- FE8- MAR-APR-MAY JUN -JUL- AU&SEP OCT- NC^ DEC- JAM- FIB- MAR APR MAY JUN JUL- AUG- 5EP OCT- NOV- DEO 1924 1925 Price Indexes o f 20 Basic Commodities in the United States and in England. 1913 == 100 Per cent. ( L a t e s t F ig u r e s , N o v e m b e r 2 1 ) This ban k ’s index of the general price level, which includes not only wholesale and retail prices but also rents and wages, advanced in October to 187 per cent o f the 1913 level, compared with 186 in the three months preceding and 182 in October o f last year. Wholesale Trade A further increase in wholesale trade, partly seasonal, occurred in October, and sales in a m ajority o f lines also exceeded those of a year ago. The largest increase, as in other recent months, was in machine tool sales, which reached the highest level fo r any October since 1920. Silk goods sales showed a notable increase, and cotton goods sales were somewhat larger than a year ago notwithstanding sharp fluctuations in raw cotton. Hardware sales were larger than in any other month in the last five years, and sales o f stationery, shoes, paper, and drugs also showed considerable increases. Chain stores shared with other lines o f retail trade in unusually large sales in October. V ariety stores re ported a gain o f more than 40 per cent over October last year and grocery stores showed the largest increase in sales in recent years. Sales o f shoe and ten cent stores also were unusually large and the increases in other types o f chain stores compared favorably with those in most earlier months this year. New stores opened showed an increase over last year ranging from 6 per cent in drug chains to 24 per cent in groceries. W hile this accounts for a considerable part of the gain in total sales, sales per store fo r several lines showed large gains over a year ago and fo r all chains combined averaged 4 per cent higher. Percentage Change October 1925 from October 1924 Grocery................................................... Candy..................................................... Number of Stores +18.4 +23.7 +18.6 + 6.5 + 5.7 + 8.6 +12.4 Total Sales +40.6 +31.1 +18.5 +16.8 +14.3 + 8.7 + 5.3 Sales per Store +18.8 + 6.1 — 0.1 + 9.6 + 8.1 + 0.2 — 0.4 +20.5 +25.4 + 4.1 M O N THLY REVIEW, DECEMBER 1,1925 gage and other leather goods, cotton and silk goods, and books and stationery. Department Store Trade Department store sales in this district were 15 per cent larger in October than a year previous, the largest gain in any month in the last three years. A fter allow ance for seasonal variations and price changes, the Octo ber volume of business appears to have been substan tially above the estimated normal or trend of growth. A pparel store sales showed an increase of 19 per cent over the previous year, after the com paratively dull business of September. Follow ing the heavy sales of October, stocks of merchandise in department stores at the end of the month were less than 1 per cent larger than a year ago, and the rate of stock turnover was therefore higher than in October of last year. A pparently as a result o f the high level of sales and relatively small stocks, outstand ing orders for additional merchandise at the end o f the month showed a smaller seasonal decline than usual, and were substantially larger than at the end of October in the last two years. Net Sales Stock on Hand Percentage Change Percentage Change October 1925 October 31, 1925 from from October 1924 October 31, 1924 New York................................... Buffalo........................................ Rochester................................... Syracuse..................................... Newark....................................... Bridgeport.................................. Elsewhere................................... Northern New York State . . . Central New York State. . . . Southern New York State. .. Hudson River Valley District Capital District..................... Westchester District.............. +15.3 + 8.5 +16.8 +11.1 +21.3 +20.1 + 13.9 + 2.0 +11.3 +11.9 + 11.5 + 27.3 + 4.3 + + + + All department stores............... +15.1 + 0.8 Apparel stores............................ Mail order houses...................... + 19.5 +29.3 — 0.7 0.9 0.1 1.1 0.4 0 + 3.8 + 1.0 The largest percentage increase in sales over last year was in radio sets, but a more important element in the high level of total sales was a large increase in all o f the main apparel departments, follow ing quiet business in several of these lines in September. Substantial gains were reported in toilet articles and drugs, toys and sporting goods, furniture and home furnishings, lug- . depY Musical instruments and radio.............. Men’s and Boys’ wear............................ Women’s and Misses’ ready-to-wear. . . Men’s furnishings................................... Hosiery.................................................... Toilet articles and drugs........................ Toys and sporting goods........................ Furniture................................................. Shoes........................................................ Home furnishings.................................... Luggage and other leather goods.......... Cotton goods........................................... Books and stationery.............................. Silks and velvets..................................... Women’s ready-to-wear accessories. . . . Silverware and jewelry........................... Linens and handkerchiefs....................... Woolen goods.......................................... Miscellaneous.......................................... 100 s M ILLIO N S OF COLLARS 100 CHAIN ^TORE SALI LS S A LI :s 1--------- ------ — 13.8 + 3.6 — 8.0 + 0.8 + 8.6 + 4.1 — 5.1 + 4.6 + 3.0 + 0.7 + 5.6 + 8.4 + 1.2 — 10.1 — 6.5 — 3.5 + 3.4 — 6.3 — 7.5 In view of the increase in the past few years in the use of instalment credit in merchandising, this bank recently sought inform ation as to the amount of instal ment credit in use in the department store trade in this city. W hile the practise o f granting instalment credit has spread during the past year to a number o f stores here tofore on a cash basis, in general the results o f the inquiry did not indicate any recent considerable growth in the use of this form of credit in department store trade. A wide variance in the practise was revealed; some stores are trying it experimentally, while others have fu lly adopted the plan and are pushing it. A fewr o f the stores have carried on an instalment business fo r several years in such articles as furniture, rugs, pianos, and other household articles. In form a tion secured from some of these stores indicated that while instalment sales have shown a somewhat greater increase over a year ago than cash sales in particular lines, the total amount o f instalment sales and accounts outstanding has not expanded more rapidly than total cash sales. In general instalment sales in this city are still only a small part o f the total volume o f depart ment store business. 1 1 i POKE +33.7 +29.7 + 24.4 +22.7 +21.4 +20.6 +19.8 +16.4 +16.1 +15.3 +14.8 +14.6 +13.3 +12.6 +12.4 + 9.7 + 6.1 — 10.7 + 8.6 Instalment Sales by Department Stores M ILL IO N S OF DOLLARS M IL L 1 0 N 5 OF OOLLARS ' Net Sales Stock on Hand Percentage Change Percentage Change October 1925 Oct. 31, 1925 from from October 1924 Oct. 31, 1924 MAIL OFIDER SALE S I 75 75 1925 'J / 50 50 1925 1924 1925 : Z5 1924 1924 ) ........... . JAN- FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Z5 JAM FEB MAR APR MAY JUN JUL AU& SEP OCT NOV DEC JAN FEB MAR APR MAY JUM JUL AUG SEP OCT NOV DEC Retail Sales o f D epartm en t Stores in the Second D istrict, and Sales b y Chain Stores and Mail Order H ouses in 192 5 Com pared w ith 192 4 .
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