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MONTHLY REVIEW
of Credit and Business Conditions
____________________________ S e c o n d
Federal Eeserve Agent

F e d e r a l

D i s t r i c t ____________________________

Federal Eeserve Bank, New York

M o n e y M a r k e t in N o v e m b e r
A fter declining in the three preceding months to com­
paratively small proportions, gold movements again be­
came a factor of some consequence in the money market
during November. The November movements were the
largest since July and resulted in a net loss of 19 million
dollars. A total of about 27 m illion dollars o f gold
was received during the first 21 days o f November,
which brought the total receipts since the im port move­
ment began in September to 42 m illion dollars.
Of
this amount 3 7% million came from England and 4 %
million from Argentina.
In the latter part of the month the leading foreign
exchanges became somewhat firmer and were above the
levels at which gold shipments to this country would
yield a profit. Consequently, no further shipments o f
any size to the United States were reported after the
15th o f the month. A reversal o f the gold movement
occurred after November 21, when the first gold exports
o f the season to Canada were made, and when a substan­
tial amount of gold was earmarked for foreign account.
These new movements took a total of about 47 million
dollars from the gold stock o f the country, and more
than offset, in the money market, the gold im port move­
ment earlier in the month.
A s the accom panying diagram shows, the im port o f
gold this autumn was small in comparison with the large
outflow o f the past year. Follow ing the renewed outflow
in the latter part of November, the monetary gold stock
of this country at the present time is less than 15 million
dollars larger than at the end o f June, and is about 485
million smaller than at the end of May 1927.
Money rates were slightly easier in November partly
because o f gold imports during the first three weeks of
the month, and partly because of a somewhat smaller de­
mand fo r additional Reserve Bank credit than is usual at
this time o f year, and further increases in the acceptance
holdings o f the Reserve Banks, due to the large volume
o f bills outstanding and the generally high level o f inter­
est rates. A s a consequence, member banks were enabled
to repay a part o f their borrowings from the Reserve
Banks, and were in a position to lend a little more
freely. A n increasing proportion o f commercial paper
was sold in the open market at 5 ^ per cent, as compared
with a prevailing rate o f 5 % per cent in O ctober; ac­
ceptance rates remained steady. Y ields on short-term
Government securities declined about y2 per cent, in
some cases to under 4 per cent in the third week o f
November, but later advanced somewhat. A pparently
reflecting a continued strong demand fo r additional
loans, rates on security loans showed no material change




R e s e r v e

December 1,1928

from those o f October and the tendency at the end o f
the month was toward higher levels.
The follow ing
table compares money rates near the end o f November
with those o f a month previous and a year ago.
Money Rates at New York
Nov. 30, 1927
Call money...............................
Time money—90 day..............
Prime commercial paper........
Bills—90 day unindorsed........
Customers’ rates on commer­
cial loans.............................
Treasury certificates and notes
Maturing March 15............
Maturing June 15................
Federal Reserve Bank of New
York rediscount rate..........
Federal Reserve Bank of New
York buying rate for 90 day
bills.......................................

*3H -4H
4K
4

Oct. 31, 1928
*6-8
7
5H

Nov. 28, 1928
* 6 ^ -9
7
5 H -M
4M

3H

4H

t4.28

t5.47

f5.47

3.10
3.17

4.63
4.44

4.30
4.20

3M

5

5

3K

m

* Prevailing rate for preceding week #
t Average rate of leading banks at middle of month

C hanges

in

M e m b e r B a n k C r e d it

The strong demand fo r security loans continued to be
the dominant factor in changes in member bank credit.

M onetary Gold Stock o f the United States, End of Each Month
since December 1926 (N ovem ber 1928 estim ated).

90

MONTHLY REVIEW, DECEMBER 1, 1928
B L N o/D L A S
IL IO S O L R

an increase o f 156 million during October. Demand for
bills, principally by foreign investors, was rather well
sustained, and dealers’ portfolios at the end o f Novem­
ber were smaller than a month earlier. Open market
rates fo r bills were unchanged; the offered rate on the
90-day m aturity has been steady at 4 y2 per cent for the
past three months.
C o m m e r c ia l P a p e r M a r k e t

Loans

to B r o k e r s a n d D e a le r s In S e c u r it ie s P la c e d b y N e w
C it y B a n k s fo r O w n A c c o u n t, fo r o u t-o f-to w n C o rr e ­
sp o n d e n t B a n k s , a n d fo r O th e r s .

Y o rk

Loans to brokers and dealers in securities made by New
Y ork City banks for their own account increased further
during the past month, and on November 21 were 300
million dollars larger than in the latter part o f August,
but remained slightly below the highest point o f last
May. The total loans and investments o f these banks
have also remained somewhat below the M ay levels, as
their investments have been reduced about 100 million
dollars since that month, and loans other than those
secured by stocks and bonds have shown practically no
net change.
Outside o f New Y ork the tendency appears to have
been similar. Loans to brokers and dealers in securities
placed by New Y ork banks fo r out-of-town correspondent
banks increased approxim ately 200 million dollars from
the latter part of A ugust to November 21 and are larger
than in May. This figure includes, however, not only
loans fo r account of both member and non-member outof-tow n banks, but also loans placed by those banks for
the account o f their customers. The total loans and
investments o f reporting member banks in principal
cities other than New Y ork showed no such liquidation
during the summer as did New Y ork member banks and
the subsequent expansion has carried them to new high
levels.
As the accom panying diagram shows, funds from
sources other than the New Y ork banks and their cor­
respondent banks have continued to play an important
part in the financing o f the security markets and are now
larger than ever before. These loans have considerably
more than doubled during the past year and are now
over three-fourths as large as the combined loans made
by New Y ork banks fo r their own account and fo r out-oftown banks.
B il l M a r k e t

A lthough the supply o f new bills during November
was considerably less than the unusually large volume
created in October, offerings to the market nevertheless
continued rather heavy, as is usual at this season o f the
year. Reflecting the smaller increase in the supply than
in October, offerings o f bills to the Reserve Banks also
were smaller, and the bill holdings o f the System in­
creased only 44 m illion up to November 21, as against




The bank investment demand fo r commercial paper
was reported active throughout November. Open mar­
ket rates fo r prime names eased slightly, and the selling
range became 5^4-5y 2 per cent, the lowest level since
m id-August. There continued to be a dearth o f new
paper com ing into dealers’ portfolios from commercial
and industrial concerns, A t the end o f October, the
amount o f commercial paper outstanding through 24
leading dealers was down to $427,000,000, or 30 per cent
less than the outstandings a year ago. The decline from
the end o f September to the end o f October was less than
1 per cent, h ow ever; this is the smallest month-to-month
decrease since A pril, when a small increase occurred.
C e n tra l B a n k R a te C h an ges
Follow ing a one-half per cent rise on August 7, the
Bank o f Finland raised its discount rate on November
15, again by one-half per cent, to 7 per cent. Recent
economic trends which might have led to this decision
are: an adverse trade balance, a considerable expansion
o f central and commercial bank credit, and a contraction
o f more than 50 per cent in the volume o f the B an k ’s
foreign assets.
On the same day a rise in the discount rate o f the Im ­
perial Bank o f India from 5 to 6 per cent became
effective. Last year this bank raised its rate from 5 to
6 per cent on December 8 and again to 7 per cent on
December 22.
Such changes are attributable to the
seasonal movement o f Indian exports, which commonly
bring about an extension o f credit through the winter
period.
F o r e ig n E x c h a n g e
The foreign exchanges in the latter part o f November
appear to reflect some relaxation in the autumn demand
fo r payments to Am erica as well as slightly lower money
rates in New Y ork. Probably as a result o f these in­
fluences a number o f exchanges were perceptibly firmer
here during the second half o f the month. Chief atten­
tion was again concentrated upon sterling, not because
of any radical movement, but because of the suscepti­
bility of London to gold withdrawals. F airly consistent
weakness in the first two weeks brought the pound
sterling down to the season’s low level at $4.84% on the
14th and permitted an inflow o f gold from E ngland in
November amounting to $25,000,000. Reacting upward,
sterling crossed $4.85 on the 22nd and reached $ 4 .8 5 ^
on the 27th, making gold shipments unprofitable.
In the last days o f the month the reichsmark moved
upw ard to $0.2384, or two points above par. The Dutch
guilder, quoted at $0.4010 on the 5th, firmed to $0.4018
on the 28th. The fluctuations o f the Spanish peseta,
which moved through a range o f thirty points in
October, were very slight in November, this exchange

FEDERAL RESERVE AGENT AT NEW YO R K

91

British, German, Dutch, and Canadian Exchanges at New York in the Autumn of 1928, Compared with 1926 and 1927.

holding steadily at $0.1612 during the second half of the
month. Slight gains were made by the Swiss and Nor­
wegian exchanges, and various European currencies
were reported in steady demand in the last week of
the month.
Canadian exchange rose to a premium on Novem­
ber 19 for the first time since September, the usual
seasonal appreciation of this exchange having hitherto
been adversely affected by the attraction of New York
money rates. However, exports of Canadian grain are
reported to have been very heavy recently and probably
account for the sudden shift in the Canadian rate from
a discount to a premium. The Argentine peso continued
its upward trend, rising eleven points in the month to
$0.9586.
It is now above the gold export point for
New York.
The Japanese yen slipped back from a high of $0.4670
on November 1 to $0.4587 on the 28th, or approximately
its position in mid-October.
Cable Rates
Country
November 30, 1927
A ustria.............................
Belgium ...........................
England...........................
France..............................
Germ any.........................
Ita ly ..................................
Netherlands...................
N orw ay............................
Switzerland....................
Canada............................
Argentina........................
B razil................................
India.................................
Japan................................
Hong Kong, dollar. . .
Shanghai, ta e l...............

G o ld

$

.1410
.1397
4 .8 7 7 9
.0393
.2388
.0543
.4040
.2658
.1928
1 .0009
.9718
.1192
.3656
.4577
.5011
.6386

October 31, 1928
$

.1406
.1390
4 .8 4 8 5
.0391
.2382
.0524
.4010
.2665
.1924
.9996
.9574
.1196
.3649
.4656
.5005
.6416

Novem ber 28, 192$
$

.1406
.1390
4.8 5 1 7
.0391
.2384
.0524
.4018
.2666
.1927
1.0 0 1 5
.9583
.1194
.3640
.4587
.4999
.6405

M ovem en t

A substantial gold import movement during the first
three weeks of November w as followed by a reversal of
T
the movement in the latter part of the month, and the net
result of imports, exports, and earmarkings during the
first 28 days of November shows a loss of gold to this
country amounting, according to preliminary calcula­
tions, to $19,000,000. As reported above, the weakening
of sterling made it profitable for American buyers to
import approximately $25,000,000 from London.
The
last of these purchases was made in London on Novem­
ber 13. A shipment of $2,500,000 received from the




Argentine closed the movement from that country. W ith
the rather abrupt rise of Canadian exchange on the 19th,
an efflux of gold began which took $22,000,000 to Canada
between November 21 and 28. A new earmarking move­
ment also developed in the latter part of the month,
which caused a net increase of $25,000,000 in the amount
of gold held under earmark for foreign account.

F o r e ig n T r a d e

Exports of merchandise in October, valued at
$555,000,000, were the largest for any month since Janu­
ary 1921. A ll groups of exports were seasonally larger
than in September, and all, except crude foodstuffs,
showed considerable gains over a year ago. The largest
increase over September occurred in the autumn exports
of crude materials, chiefly raw cotton; the largest in­
crease over last year was in exports of finished manu­
factures, especially automobiles. Grain shipments abroad
were larger than in recent months, but remained smaller
than last year, due no doubt partly to heavy grain
production this year in Canada, and also in Europe.
Imports, valued at $357,000,000, showed more than
the usual seasonal increase over September but remained
practically the same as in October 1927. Compared with
September there were increases in all groups of imports,
the largest of which was an increase of about 19 per cent
in finished manufactures. Increases over last year in
the value of imports of manufactured goods and semi­
manufactures were offset by declines in imports of
crude materials and foodstuffs. The quantity of crude
rubber imported during October was somewhat smaller
than in September, but was substantially larger than in
October 1927; however, the increase in quantity con­
tinued to be more than offset by the lower level of
rubber prices. Raw silk imports were slightly larger in
volume than in September but were somewhat smaller
than in October 1927; silk prices were higher than in
either the previous month or a year ago.

S e c u r ity M a r k e ts

The stock market was strong during most of Novem­
ber, and sales were much larger than in any previous
month. On several days the volume exceeded 6 million
shares, and on most full trading sessions after Election

92

MONTHLY REVIEW,

DECEMBER 1, 1928
jyilLllONSo/UOLl ARS

1916 1917 1910 1919 1920 1921 1922 1923 1924 1925 1926 1927 1926,
Average Yield on 33 Dividend Paying Industrial Common Stocks
Compared with Yield on 15 High Grade Industrial Bonds.
(Source: Standard Statistics Co.)
New

Day the turnover was above 5 million shares. Prac­
tically all groups of stocks showed some net gain for the
month, and in a number of individual issues the advances
were very large. Representative averages of industrial
stocks advanced 18 points or more to new high levels,
public utilities stocks advanced substantially above the
previous high levels of May, and railroad stocks, which
had shown little movement in recent months, advanced
to higher levels than ever before.
A s the accompanying diagram indicates, the recent
advances in industrial common stocks have reduced the
average yield on these shares to the lowest level in many
years. Meanwhile, yields on industrial bonds have ad­
vanced somewhat in recent months; so that stock yields are
now considerably below the yields on high grade bonds.
On only two occasions since the beginning of the war has
such a situation prevailed— in late 1925 and early 1926,
and again early this year— and in these instances stock
yields remained below bond yields for only a short
period.
The trend of domestic corporation bond prices con­
tinued slightly upward during the first part of Novem­
ber, but subsequently prices receded a little and by the
end of the month were at levels little different from those
at the end of October. For the month as a whole,
average prices fluctuated at levels about l 1 points above
/^
the extreme August low and about 2 % points below the
January high levels of the year. Price movements of
foreign bonds were relatively small. There was a further
advance in long-term United States Government issues,
and current prices averaged about 1 % points above the
mid-summer low levels.

Security Issues in 1928 Compared with 1927; Domestic
Corporation Issues, and State, Municipal, and Farm Loan
Issues (Refunding Issues Excluded).
(Source: Commercial & Financial Chronicle)

of the recent months has compared favorably with a
year ago.
W hile firmer money conditions have made the sale
of bonds more difficult, the strength in stocks has been
favorable to the sale of new stock issues, and an in­
crease in this method of financing has more than offset
the decline in bonds. Offerings of State, municipal, and
farm loan bonds in the period from A p ril to October
have been in somewhat smaller volume than a year ago,
and foreign financing during the past four months has
been much curtailed.
The total of new securities offered publicly in Novem­
ber appears to have been in about the same volume as
a year ago.
The number and relative importance of
stock issues increased further during the month— in
one week of the period stock offerings exceeded the
amount of new bonds offered.
Due principally to
$55,000,000 of New York City issues, the total volume
of State, municipal, and farm loan issues was larger
than a year ago, for the first time in some months.
The New York City issues of corporate stock and bonds
were sold at an interest cost to the city of 4.2002 per
cent, the highest rate paid by this city since December
1921. Offerings of foreign securities were only about
one-half as large as in November of last year, but present
indications are that the total amount of security offer­
ings by domestic corporations, including refunding is­
sues, will prove to have been about the same as a
year ago.
E m p lo y m e n t a n d

N ew

F in a n c in g

Final figures on security flotations during October
showed a decline of more than 20 per cent compared
with a year ago. H a lf of the decline, however, was due
to a much smaller volume of refunding issues than in
October 1927, and a considerable part of the remainder
was due to a reduction in offerings of foreign securities
in this market. A s the accompanying diagram indicates,
the amount of new capital obtained by domestic corpora­
tions in October was larger than last year, and in most




W ages

Factory employment showed a further seasonal in­
crease in October. In New York State, employment
remained slightly smaller than a year ago, but has shown
a much larger increase from the beginning of the year
than is usual. In the country as a whole the number of
factory workers employed was larger than in the preced­
ing year for the first time since September 1926. The
ratio between workers called for and registrations for
employment at New York State Employment Offices
showed a seasonal decline in October and November, but
remained slightly above the level of a year ago.

93

FEDERAL RESERVE AGENT AT NEW Y ORK

Employment in iron and steel mills of New York State
increased further above the 1927 level, and in the ma­
chinery and electrical equipment industry exceeded that
of a year ago for the first time in many months. In the
textile industries, employment in the woolen and worsted
and silk mills has increased above the levels of either
1926 or 1927, but employment in the cotton and knit
goods mills remains well below the levels of the past two
years. There has been a seasonal decline in employment
in building material industries since September, and the
usual seasonal curtailment has occurred in out-of-door
activities.

remained somewhat smaller than in 1926. The accom­
panying diagram compares the course of industrial,
public utility, and railroad earnings during the past
three years.
(Net profits in millions of dollars)
Third
Quarter
Corporation Groups

1927

1928

1926

1927

1928

81
4
21
33
4
36
3
7
15
7
6
2
6
5
52

101
11
43
49
3
38
3
10
17

218
25
129
143
16

6
2
14
8
66

6
27
33
21
14
6
19
20
130

248
18
61
119
13
103
8
23

Other mining and smelting.............
Miscellaneous.....................................

11
15
24
14
5
25
5
16
9
13
7
7
5
12
42

20
IS
7
19
13
141

300
28
77
130
9
109
7
27
43
21
17
4
33
22
179

Total 15 groups.............................

210

282

380

905

852

1,006

Other public utilities........................

87
95

55
r 61* ^155
170 1188 % 515

" 173
561

189*
618

Total public utilities.....................

182

225

249*

670

734

807*

Class I railroads................................

185

337

358

891

810

820

Motor accessories..............................
Oil.........................................................
Railroad equipment..........................
Food and food products..................

B u s in e s s P r o fits

Machine and machine mfg..............

Third quarter net earnings of 210 industrial and
mercantile concerns showed an increase of 3 6 % per
cent over the corresponding quarter of last year, which,
however, was a period in which corporation earnings
had shown some decline from those of the previous year.
These tabulations frequently exaggerate the increase in
corporation profits, due to the fact that statements that
are issued early tend to include a large proportion of
reports which make favorable showings. However, it is
noteworthy that third quarter earnings of these com­
panies showed an increase over second quarter earnings,
whereas in recent years, earnings have usually shown a
declining tendency in the third quarter.
The largest percentage increases over last year were
reported by the motor accessories companies, which
tripled their profits, and the oil and copper companies,
the profits of which were more than double those of a
year ago.
Other groups showing substantially larger
profits were the steel, machine and machine manufactur­
ing, automobile, mining and smelting (other than coal),
and miscellaneous companies.
A ll other groups also
reported at least small increases with the exception of
the railroad equipment, coal, and amusement companies.
Net profits of these 210 companies for the first nine
months of this year have been 18 per cent larger than in
the corresponding period of 1927, and about 11 per cent
larger than in 1926. Telephone and other public utility
companies continued to report net earnings around 10
per cent larger than a year ago, both for the third
quarter and for the completed nine months. Net operat­
ing income of the principal railroads increased in the
third quarter to a larger figure than a year ago, but
mWON5qfJX}lUR3

NinefMoaths

Number

Building supplies...............................

9

9S

39

* Partly estimated

B u ild in g

Awards of building and engineering contracts in the
New York and Northern New Jersey district continued
to increase in October; the total for the month was 21
per cent larger than for September and 12 per cent
larger than for October 1927, according to the F . W .
Dodge Corporation report. The increases over a month
earlier and a year ago were due almost entirely to larger
contracts for public works and utilities, which included
a $43,000,000 water supply project and an $8,000,000
subway contract in New York City. Contracts for com­
mercial buildings also showed an increase over the pre­
vious month and a year ago, but residential contracts,
while in slightly larger volume than in September, were
18 per cent smaller than a year ago.
During the first ten months of this year the total vol­
ume of building contracts awarded in the 37 reporting
states has been 7 per cent larger than a year ago. Dur­
ing the first three weeks of November, however, a reduc-

MILLIONSqfD LlARS
O

Quarterly Profits of 105 Industrial Corporations, and 182 Public Utility Corporations, and N et Operating* Income of 185 Class I
Railroads in 1928 Compared with 1926 and 1927.




94

MONTHLY REVIEW, DECEMBER 1, 1928

tion in the daily average of contracts, as compared with
the corresponding period of 1927, indicated a consider­
ably lower level of building operations.
I n d e x e s o f B u s in e s s

P r o d u c tio n

Productive activity continued in October at a high
level. Output of passenger automobiles and trucks
declined about 4 per cent from September, but was
82 per cent above the level of a year ago. Steel ingot
production established a new high record, and pig iron
production was the largest for any October excepting the
war years of 1916 and 1918. Production of coal and of
coke increased more than usual, and copper established
a new post-war high record. Mill consumption of silk
declined from the high level of September, but woolen
mill activity and consumption of cotton increased
sharply; cotton consumption was larger than a year
ago for the first time since last November, and wool
activity was the highest since December 1926.
In November, productive activity was generally at a
lower level, but the decline appears to have been no
larger than is usual for that month.

A c tiv ity

Domestic retail trade increased less than usual in
October following the large volume of September, but
foreign trade increased more than usual. Average daily
car loadings of merchandise and miscellaneous freight
declined slightly; loadings of bulk freight showed about
the usual seasonal increase.
A n extremely large volume of financial activity is
reflected in the establishment of a new high record for
sales of stocks on the New York Stock Exchange, and a
new high record for October for bank debits in New
York City. The velocity of bank deposits also was very
high.
This bank’s indexes of business activity, in which
allowance has been made for year-to-year growth, for
the usual seasonal variations, and where necessary for
price changes, are shown below.

(Computed trend of past years=100 per cent; adjusted for seasonal variations)
1927

1928

f(Com puted trend of past years=100 per cent; adjusted for seasonal variations)
Oct.
1927

Aug.

Sept.

Oct.

92
84
105
97
112
117
82
95
95
99
98
104
96
103
125
98
94

105
114
94
81
117
110
79
100
88r
109
98
104
114
120
134
105r
107

105
119
90
87
118
110
83r
101
78
114
105r
102
105
111
132
100
99

110
118
104
98p
109
109p
88
106
81p
121
99
101
101
116
123

85
91
102
88
94
91
111
100
101
87
103
102
100
98
69
95

90
91
108
80
102
95
95
104
90
88
108r
116
119r
125
155
131

92
88
108
75
89
85
115
106
90
83
108
105
102
134
145
133r

105
81
119
81
99
95
124

1928

Producers1 Goods
Oct.

Aug.

Sept.

103
92
97
114
101
93

102
93
100
110
89
101

104
97
94
102
85
95

103
97
105p
109p

94r
105
108
102
lOlr
100

93r
103
97
137
94r
97

106r
104
109
132
lOlr
96

Pig iron.................................................................
Steel ingots.................................................
Cotton consumption........................................
W oolen mill activity*.....................................
Silk consumption*............................................
Petroleum............................................................
Bituminous coal................................................
C oke.......................................................................
Lum ber.................................................................
Copper, U. S. m ines........................................
Lead........................................................................
Zinc........................................................................
Tin deliveries......................................................
Leather, sole.......................................................
C em ent.................................................................
Paper, total.........................................................
W ood pu lp...........................................................

94
101
101
115p
98
95

Oct.

Primary Distribution
Car loadings, merchandise and misc........
Car loadings, other..........................................
Exports.................................................................
Imports.................................................................
Panama Canal traffic.....................................
Wholesale trade................................................

Distribution to Consumer
Department store sales, 2nd D i s t .r .........
Chain grocery sales..........................................
Other chain store sales...................................
M ail order sales.................................................
Life insurance paid forr..................................
Advertising..........................................................

Consumers' Goods
Hogs slaughtered..............................................
Cattle slaughtered............................................
Sheep slaughtered............................................
Calves slaughtered...........................................
Farm produce shipped...................................
W heat flour.........................................................
Sugar meltings, U. S. ports..........................
Gasoline................................................................
Anthracite coal..................................................
Newsprint............................................................
Printing activity...............................................
Tobacco products.............................................
Boots and shoes.................................................
Tires.......................................................................
Automobile, passenger....................................
Automobile, truck............................................

General Business Activity
Bank debits, outside of New York C ity.
Bank debits, New York C it y .....................
Velocity of bank deposits, outside of New
York C ity ........................................................
Velocity of bank deposits, New York City
Shares sold, on N . Y . Stock Exchange.. .
Postal receipts...................................................
Electric power...................................................
Employment in the United States............
Business failures...............................................
Building contracts, 36 states.......................
New corporations formed in N . Y . State

106
136

104
149

111
165

106
164

110
144
204
90
104
98
102
139
112

113
166
293
90
109r
99
115
110
108

120
190
398
84
107
98
104
142
100

117
188
389
88

General price level...........................................
Composite index of wages............................
Cost of living......................................................

173
222
169

176
223
172

178
224
173

177
224
172

p Preliminary

98
115
136
126

* Seasonal variation not allowed for

r Revised
Thousands ofC rs
a

‘Th ou san d sojB a le s

1928

'750

/P

1926

300
\

& >6 \
\

200

192/

100
STEEi
IN G O T S
..1 .1
—

J F M A f ' i J J A 5 0 N D

'y

/ JJ

1
9
2
7

80

12
96

)£
\

r Revised

90r

■
r

400

\

600

v m s /- L ^ \

\

AUTOr IQ B ILE
PRODlX T IO N
i i..i
/ i... i..
J F M A n J 'J A 5 O N D

70

!
450

V i9 2 Q

me
60

C O I TON
1
300

JMPTIONI

C O N 31i i i.
J F M A M J

a

192

1927

\\

i1 -i„ , r
.
J A 5 0 N D

50

V

—.i iti.
.. i ~

— i— i
J F M A M J

PETROILEUM
P R O D U CTION
j ..
J A
S O N D

Production of Steel, Passenger A
utom
obiles, andPetroleum an M C
, d ill onsum
ption of C
otton in 1928 C pared w 1926 and 1927.
om
ith




ii3
102p
141p
124
138

Trillions o f B ’ h
o

i

500

p Preliminary

iis
91

95

FEDERAL RESERVE AGENT AT NEW YORK
W h o le s a le T r a d e

D e p a r tm e n t S to re T r a d e

October reports on wholesale trade in this district
showed a larger average increase over a year previous
than in any other month in the past three years. One
more selling day than in October 1927 accounted for a
minor part of the increase. Substantial increases in the
clothing trades, which have reported smaller sales than
a year ago in most of the recent months, were an im­
portant factor, and more active trade was reported also
in a number of other lines.
Commission house sales of cotton goods showed the
largest increase over a year previous in more than a
year, and jobbers’ sales showed a small increase. The
grocery, drug, stationery, and diamond trades reported
larger sales than a year ago, following decreases *in
September, and the shoe, hardware, and jewelry trades
showed smaller decreases than in September. Machine
tool sales continued in more than double the volume of
a year ago.

Total sales of reporting department stores in this
district were more than 4 per cent larger in October
than a year ago, about the same increase as in September.
However, the average daily rate of sales was only
slightly larger than last year in October, as compared
with an increase of about 9 per cent in September.
Newark stores reported a substantially higher daily rate
of sales than in October 1927, but most of the other
localities in the district showed little if any increase.
Apparel stores continued to report much larger sales
than a year previous.

Comm odity

Percentage
Change
October 1928
compared with
September 1928

Net
Sales

Stock
end of
month
+ 1 8 .4

Per cent of
Accounts
Outstanding
September 30,
Collected
in October

Percentage
Change
October 1928
compared with
October 1927

Net
Sales
+ 6 .7
+ 2 2 .2
+ 4 7 .0
+ 2 .8
+ 1.9

Groceries........................
M en’s clothing..............
W om en’s dresses.. . . . .
W om en’s coats and suits
Cotton goods— Jobbers
C otton goods — Com­
mission .......................
Silk goods.......................
Shoes...............................
D rugs..............................
Hardware.......................
Machine tools** ...........
Stationery......................
P aper..............................
Diam onds.......................
Jewelry............................

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

+ 1 3 ,0
+ 5*.4* — 4 .2
— 0 .5
+ 0 .8
— 7 .5
+ 4 .1
— 2 .7
+ 1-4
+ 1 1 3 .0
+ 8 .8
+ 6 .9
+ 1 3 .7
} + 4 .4
— 4 .1

W eighted Average.. .

+ 7 .2

Stock
end of
month

Percentage
Change
October 1928
com pared with
October 1927
Locality

1927

1928

7 7.7
3 4.8

78.5
38.1

— 5 .6

32.2

3 5 ’.6

+ 17 '.6 *
— 16.8
+ 1 7 .0
+ 4 .6

4 9.0
4 9 .0
46.9
4 8.0

4 6.2
48.9
4 4.8
4 8.8

6 9.3
68.1
1 22.1

68’i
.
63.1
} 23.4

5 2.4

53.1

+ 3 .4

+ 1 5 .0

— 6.i

Stocks of merchandise showed a moderate increase
during the month in preparation for the holiday trade,
but were no larger at the end of October than a year
previous. Consequently, the rate of stock turnover re­
mained slightly larger than a year ago.
Collections
against charge accounts were at about the same rate as
in October 1927.

}+

2 .4

Net
Sales

Stock
on hand
end of
month

Per cent of
Accounts
Outstanding
September 30
Collected in
O ctober

1927

1928

New Y o r k ...........................................................
B uffalo................................................................
R ochester...........................................................
Syracuse..............................................................
Newark................................................................
B ridgeport..........................................................
Elsewhere................... ........................................
Northern New Y ork S tate.........................
Central New York S tate............................
Southern New York State..........................
Hudson River Valley D istrict...................
Capital D istrict............................................
W estchester D istrict....................................

+ 4 .4
— 1 .0
+ 1.7
+ 5 .3
+ 1 2 .9
+ 2 .2
— 0 .8
+ 1 5 .3
— 9 .3
+ 3 .3
— 4 .7
— 1 .3
+ 1.4

+ 1 .3
— 3 .0
— 2 .1
+ 2 .4
+ 0 .8
— 11.3
— 10.6

53.4
4 3.0
4 4.0

53.7
4 4.4
4 7.1

4 6.6

4 6.3

3 8 ‘.7

4 0.5

All department stores......................................

+ 4 .8

— 0 .2

4 9.6

49.9

Apparel stores...................................................

+ 1 4 .2

+ 2 .0

4 8.8

48.3

* Quantity not value. Reported b y Silk Association of America.
** Reported b y the National Machine Tool Builders’ Association.

Substantial increases compared with October 1927
. were reported in sales of musical instruments and radio
C h a in S to r e S a le s
receivers, shoes— especially women’s— furniture and
home furnishings, and women’s apparel, and there were
Chain grocery systems in this district reported sub­
moderate increases in various other departments.
stantial increases over October 1927 in total sales and
in average sales per store. Ten cent, tobacco, shoe, and
variety chains all showed smaller increases in total sales
Net Sales
Stock on Hand
Percentage*Change Percentage Change
in October than in September, however, and after allow­
October 1928
October 31, 1928
compared with
compared with
ance for the larger number of stores operated, all types
October 1927
October 31, 1927
other than grocery chains showed smaller sales per store
than a year ago.
Musical instruments and ra d io ...............
+ 6 9 .4
— 36.7
Percentage Change O ctober 1928
com pared with O ctober 1927

Home furnishings........................................
Books and stationery.................................
W omen’s ready-to-wear accessories........

T yp e of Store

Num ber of
Stores

T otal
Sales

Sales per
Store

G rocery........................................................
Ten cen t......................................................
D rug.............................................................
T o b a cco .......................................................
S hoe..............................................................
V ariety.........................................................
C an d y...........................................................

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

+ 1 3 .8
+ 5 .4
+ 2 .6
— 3 .3
+ 4 .2
+ 1 5 .8
+ 1.9

+ 1 3 .4
— 3 .6
— 5 .0
— 8 .0
— 4 .5
— 1.8
— 12.2

T o ta l.........................................................

+ 5 .3

+ 8 .3

+ 2 .9




Luggage and other leather goods............
W om en’s and Misses’ ready-to-w ear.. . .
Cotton goods................................................
M en’s furnishings........................................
Toilet articles and drugs...........................
Linens and handkerchiefs..........................
Toys and sporting goods...........................
Silverware and jew elry..............................
M en’s and B oys’ wear...............................
W oolen good s...............................................
Silks and velv ets.........................................
Miscellaneous...............................................

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

+ 1 8 .2
+ 9 .8
+ 6 .7
— 4 .1
+ 1.6
+ 4 .6
— 5 .6
+ 3 .8
— 2 .8
— 6 .8
+ 1 3 .6
— 0 .9
+ 9 .9
— 9 .1
+ 7 .1
— 10.3
— 6 .0
— 6 .4

96

MONTHLY REVIEW, DECEMBER 1, 1928

P RE T
E CN
B usiness C o n d itio n s in th e U n ite d States
(Summarized by the Federal Reserve Board)
TND USTRY continued active in October and the distribution o f commodities
* was in large volume. Wholesale commodity prices declined sharply owing
chiefly to decreases in the prices o f farm products. Member bank credit in
use increased in October and November, while Reserve Bank credit outstanding
showed little change. Conditions in the money market were somewhat easier.
P r o d u c t io n

Index N u m b ers .of Production o f M an u factu res
and M in erals, A d ju ste d for Seasonal V a ria ­
tions ( 1 9 2 3 - 2 5 average = 100 per c e n t ).
PERC EN T

W h o le sa le Price Index o f U nited S tates B ureau
o f Labor S ta tistic s ( 1 9 2 6 average =
1 0 0 per c e n t ).

Industrial production continued in October at the high level o f September
and considerably above the level o f a year ago. Output o f minerals increased
over September, while the production o f manufactures declined slightly. Fac­
tory employment and payrolls increased to the highest level since early in
1927. The production o f pig iron was particularly large in October and the
first half o f November, and the output o f steel continued in record volume.
Automobile production declined considerably in October after exceptional
activity in September, and showed further reduction in November, as is usual
at this season. Activity increased in October in meat-packing and in the
textile industries, with the exception o f silk. Copper mining and smelting
continued at a high level, and the output o f coal and petroleum increased by
more than the usual seasonal amount, while the production o f zinc declined.
There was also a decline in the output o f lumber and building materials.
Building contracts awarded continued to increase in October and were
larger than in that month o f any previous year, but declined sharply during
the first two weeks o f November. The increase in October was due principally
to large contracts for engineering and industrial projects.
The November cotton crop estimate o f the Department o f Agriculture
was slightly larger than the October estimate and indicated a yield o f
14,133,000 bales, 1,178,000 more than the production o f 1927. Ginnings o f the
current crop prior to November 14 totaled 11,320,302 bales, compared with
10,894,912 in the similar period of a year ago. Indicated yields o f wheat,
corn, oats, potatoes, and tobacco were larger than the 1927 crops, while esti­
mates of hay, rye, and flaxseed were smaller.
T rade

Department store sales in October were in about the same volume as in
the same period in the preceding year, but showed somewhat less than the
seasonal increase from the high level o f September. Inventories o f these
stores increased during the month, but continued smaller than a year ago.
The volume o f distribution at wholesale was larger than in September and
showed a substantial gain over October 1927. Freight car loadings continued
larger in October and November than a year ago, reflecting chiefly large load­
ings o f miscellaneous freight.
P r ic e s

M o n th ly A v e ra g e s o f W e e k ly F igu res for
M em ber B an ks in 101 Leading Cities
(L a t e s t F igu res are A v era g es for 3
W e e k ly Report D a tes in N o v e m b e r ).
B 1LL10 N 5 o f D O LLA R S

Wholesale commodity prices declined in October after a continuous in­
crease for three months, and the Bureau o f Labor Statistics index for October,
at 97.8 per cent o f the 1926 average, was over 2 per cent below that for
September. This decline reflected chiefly large decreases in prices o f farm
and food products and hides and leather. Prices o f industrial commodities
increased slightly, with small gains recorded in metals, building materials, and
chemicals and drugs. The principal increases occurred in prices o f iron and
steel, copper, and raw silk. During the first three weeks o f November prices
o f cotton, pig iron, copper, and petroleum increased, and prices o f most farm
and food products, except corn, pork, and sugar, recovered somewhat after the
October decline.
B a n k C r e d it

R eserv e B an k C red it:
M o n th ly A v e ra g e s o f
D aily F igu res for 1 2 Federal R eserve B anks
( L a t e s t F igu res are A v e r a g e s o f first
2 3 da ys o f N o v e m b e r ).




Between October 24 and November 21 there was a considerable increase
in loans and investments o f member banks in leading cities, but at the end
o f this period the total was still below the large volume outstanding* at the
middle o f the year. Loans chiefly for commercial purposes remained at a
high level during the period and loans on securities showed further growth,
reflecting a marked increase in the volume o f loans to brokers and dealers in
securities. Investments showed further decline.
During the four weeks ended November 21 there was little change in the
volume o f Reserve Bank credit in use. Reserve Bank holdings o f acceptances
increased further and discounts for member banks declined.
During the last week o f October and the first three weeks o f Novembe
conditions in the money market were somewhat easier; the rate on four t
six months commercial paper declined from a level o f 5 l/2 per cent to a rangt
o f from 5 % to 5% per cent, and rates on call and time loans in the open
market also declined slightly.