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MONTHLY REVIEW
of Credit and Business Conditions
Second

Federal

Reserve

D is t r ic t

e e l ee e a k e o ____________ Dc me 1 13
ee b r , 91
F d ra Rs rv A e t________ F d ra Rs rv B n , NwY rk
e e l ee e g n
s c a acpacs a dTes r b a dcrif ae.
uh s ce t ne n r auy ills n et ict s
M n y M rk t inN v m e
oe a e
o e br
Tis dmn wsinrae a t em d o Nvme,
d
h
Amr e c ag int ebnin s ut nhsoc re we t eae Yr ceadgHueidnsd cnine
akd hne h a k g it aio a curd hn e Nwa kC s in t o s b le fisoe br
h h
o ler
ak ot ud
dr g t e ps mnh Te e t ar inr otlo o t e pat e o ar nin boes lon fo c so es
uin h at ot . h xr od ay uf w f h r cic f ra g g rkr as r ut m
r
gldhsbe fo wdb arnwdgino gld Te ohr t a crepne t bns a d t u rlesd
o a en llo e y e e e a f o . h t e hn ors o dn ak n hs e ae
dmn fo c re c hsbe get rdcdu t in a poimt ly$ 6 ,0 0 0 o fud fo ohre p y
e a d r urny a en r aly e ue nil,
pr x ae 1 0 0 ,0 0 f ns r t e mlo­
rcn wesit hsbe o lest a t euul saoa mn. Te ef cs o t ee vr u dvlomns o
ee t ek a en f s hn h s a es nl e t h fet f hs aios ee p e t n
po ot n. Bn f ilue hv d in hdcnidr mnyrt saerf ce int efo w gt b .
r prio s a k a r s ae im is e os e­ o e ae r elet d h llo in ale
aly innme. L u aio o bn ce it hs cn
b
u br iq idt n f ak rd a o­
t ud b t hs be les r p t a inOt br Te
ine , u a en s a id hn coe. h
es r cnit no t e mny mr e, rs lt g fr m
aie o d io f h oe akt eu in o
t eevr u c agsint es ut n hsbe rf ce
hs aio s hne h it aio , a en elet d
inafa ly gnr l, t og mdr t , dc e inoe
ir e ea huh oeae elin pn
mr e mnyr t s
akt oe ae.
Te ga ul dc e in t e led g Er pa e­
h r da elin
h a in uo en x
c ags t a bgnint elat r pr o Ot br cn
hne ht ea h te at f coe o­
t udinNvme, s t a na t ee do t emnh
ine
oe br o ht er h n f h ot
ms o t ee ec ags t a ae sill cnet le ino
ot f hs xhne ht r t ovrib t
gldwr c srt t egldimot pinsa NwYr
o ee loe o h o pr o t t e ok
t a t t egldepr pins Teewr r t e s b
hn o h o xot o t. hr ee ahr u­
sa t l rcips o gldfr mt e Fr Es a ds a
t nia ee t f o o h a at n mll
a ons fr mLt A eic n cut ie ad Cnd,
mut o ain mr a onr s n aaa
a dapr o t egldwic hdbe er akdfo Te d cnina c o t e p c g o boes lon
n at f h o h h a en amr e r h isot une f h lain f rkr as
foe n acut in pee in mnh ws rlesd fo nn a k g le dr lagly e int d a t p o
r ig con
rcd g o t s a e ae r
in
r
dr g Nvme. Te rs lt ws a inrae o a ­ lonwic naedneltt eeeclim aek gynrf
uin oe br h eu a n ces f p a o -b md ific s h e ris o bnin c e o
hh
fu
a
poimt ly$ 2 ,0 0 0 int emnt r gldsoko oe t ef w ffu d inot es c r ymr esin1t 9
r x ae 1 9 0 ,0 0 h o eay o t c f vr h lo o ns t hxeue f akt o9 l
it
t isc ut ydr gNvme. A ant rs lt o gld a dino e asvr sr ino t ebnswe ala2e
h o nr uin oe br s e eu f o n vlvd eee t a n h ak hn r ,
g
imot int ef s e h mnh o t eya,hayloss
prs h irt igt ot s f h e r ev se
in Spe br a d Ot br ad t e gin in rcn
e t me n coe, n h a s ee t
wes t ec u t y gldsoks o s adc efo t e
ek, h o nr ’s o t c hw elin r h
ya t dt o aot $ 7 ,0 0 0 .
er o ae f bu 1 4 0 ,0 0
Dr g Nvme c re c whr wls fr mt e
uin oe br urny it da a o h
bnsapa t hv be lime t t oerqirdfo
ak per o ae en it d o hs e u e r
t e od ay we -e d a d mnh n pyo , ad
h r inr ek n n o t -e d ar lls n
ohrnr a nes I fat a t eacma y gd ­
t e oml ed. n c, s h co pnin ia
ga inict s t e a o n o c re c o t t nin,
r m d ae, h mut f urny usa d g
a e a jut e tfo t euul saoa f cut n, hs
ft r d smn r h s a es nl lut aio s a
dc e ga ullyfo fv cneuiv wes Dr g
elind r d a r i e osc t e ek. uin
t ermine o t eya admn fo a les $0 ,h e a dr f h er e a d r t at 2 0
0 0 0 o a d io a c re c fo t ehlidyt a ei
0,00 f dit nl urny r h o a r d s
nr a t b epce . Fr t e c ut ya awo
omlly o e xet d o h o nr s hle
bn s s e s n inNvme wr rdcdt aot
ak upnios oe br ee e ue o bu
o e h dt enme c sdinOt br
n-t ir h u br loe coe.
Tecsaio o t ewhr wl o dm t dps s
h es t n f h it da a f o e ic e oit
s
adfoe nfu d fr mt ebns ws fo wdb a
n r ig ns o h ak a llo e y n
at e dmn fo h hgae s ot eminet e t
civ e a d r ig r d hr-t r vsmns




M on ey Rates at New York

N ov. 28, 1930 Oct. 30, 1931 N ov. 30, 1931

Stock Exchange call loa n s.......................
Stock Exchange 90 day loa n s.................
Prime commercial p a p er..........................
Bills— 90 day unindorsed.........................
Customers’ rates on commercial loa n s..
Treasury securities
Maturing March 15 (yield ).................
Maturing September 15 (y ie ld ).........
Federal Reserve Bank of New Y ork re­
discount ra te ...........................................
Federal Reserve Bank of New Y ork
buying rate for 90 day indorsed bills

2
*2-2 H
2 % -3
IV s
t3 .7 3

*3 M -4
3 M -4 M
3H
f 3 .67

2H
*3-3 X
3 H -4
3
t4 .5 0

1.19
1.53

2.32
2 .2 7

1.99
2 .4 0

2^

3H

3X

t2

3H

m vs

* Nominal
t Average rate of leading banks at middle of month
% 1-75 days— 1 per cent
1-45 days— 3 per cent

MILLIONS OF DOLLARS

MONTHLY REVIEW, DECEMBER 1, 1931

90

volume of these loans had to be replaced by bank loans
near the end of that year. The replacement of the com­
paratively small volume of such loans that remained on
November 16 involved a moderate expansion oi the
security loans of the New York banks for their own
account, which was largely obscured by the continued
decline in the total volume of brokers loans, and in other
forms of bank credit.
The general tendency in recent weeks has been toward
a continued, though less rapid, liquidation of bank
credit. In the three weeks ended November 18, the
total loans and investments of reporting member banks
declined $219,000,000, as compared with a decline of
$886,000,000 during October. Approximately two-thirds
of the November reduction was in the investments of
these banks, and the remainder in loans other ^ than
security loans. As in the previous month the decline in
the deposits of these banks, amounting to $359,000,000,
was larger than the decline in loans and investments.
The November decline in deposits, like that in loans and
investments, was at a considerably less rapid rate than in
October, when the deposits of reporting banks declined
more than $1,400,000,000.
Altogether, the available reports indicate a total shrink­
age in bank credit of around $5,500,000,000 since 1929,
and an accompanying shrinkage in bank deposits of
nearly $7,000,000,000. In actual amount these figures
represent by far the largest liquidation of bank credit
and bank deposits which has ever occurred in this coun­
try and, in proportion to the amount outstanding, the
largest shrinkage since 1893.
B

il l

M

a r k et

During the first part of November, the investment
demand for bills increased steadily, both from domestic
and foreign sources, and as offerings of bills to the
discount market were in limited volume, the dealers were
unable to fill all of their orders. Reflecting this condidition, open market offering rates were reduced on
November 6 and 9, and again on November 13, so that
dealers’ offering rates became established at levels %
per cent below those prevailing at the end of October in
the case of unendorsed bills up to 90 day maturity, %
per cent lower for 4 month bills, and % per cent lower
for the 5 and 6 month bills. Bid rates for bills up to
90 days were reduced % per cent, with the result that
the spread between bid and asked rates returned from
% per cent to % per cent, while bid rates for the longer
bills were reduced by the same amount as offering rates,
leaving a % per cent spread.
Despite the lowering of the rate structure of the bill
market, the investment demand continued unsatisfied,
however, as dealers were unable to purchase a sufficient
volume of bills. Shortly after the middle of the month
the investment demand for bills was increased still fur­
ther for a time in connection with the reinvestment of
funds which had previously been employed by non­
banking institutions in the call loan market.
In the last week of the month, however, the situation
in the bill market changed somewhat. Demand for bills




M IL L IO N S OF D O L L A R S

Volum of B
e
ankers Acceptances Outstanding; 1931 C pared w
om
ith
Previous Three Years
declined substantially, and a few banks began to offer
bills to the discount market. The dealers responded
promptly by raising bid and offering rates for bills up
to 90 day maturity by % per cent on November 25.
Their portfolios which were quite small during the early
part of November remained at a low level for the balance
of the month.
Due to the active investment demand, virtually no
bills were offered to the Reserve Banks for System
account. Reserve Bank bill holdings, which reached a
peak of $769,000,000 for the weekly reporting date of
October 21, were reduced $289,000,000 to $480,000,000,
chiefly by maturities, during the period ended Novem­
ber 25. On November 20, the buying rate of the New
York Reserve Bank for bills maturing in 1 to 45 days
was lowered to 3 per cent, with the rate for longer bills
up to 90 days unchanged at 3 % per cent, and on Novem­
ber 27 the rate at which bills are purchased from dealers
under resale agreement was reduced to 3 per cent.
The total volume of bills outstanding was increased
$43,000,000 in October to $1,040,000,000, following a
steady decline since November 1930. As the accompany­
ing diagram indicates, however, the September to Octo­
ber advance this year was considerably less than has
occurred during the same month of other recent years.
An increase in acceptances arising from domestic ware­
house credits more than accounted for the increase in
total outstandings of bills. Export bills showed little sea­
sonal expansion and the volume of acceptances based on
goods shipped between or stored in foreign countries
continued to decline.
C

o m m e r c ia l

P

aper

M

a r k et

Bank investment demand for open market paper was
rather inactive with a somewhat marked concentration
of inquiry coming from banks in the Boston and St.
Louis districts. Due to the limited demand and also to
the continued small volume of new paper coming into the
dealers’ lists, the volume of business transacted in the
open market was of small proportions. Early in Novem­

91

FEDERAL RESERVE AGENT AT NEW YO R K

ber, the prevailing range for prime commercial paper in
the open market became established at 4 -4 % per cent.
Around the middle of the month, however, following a
slightly easier tendency in some other branches of the
money market, the prevailing selling quotations were
reduced to a range of 3% -4 per cent.
The smallness of the current supply of paper is indi­
cated by the dealers’ reports to this bank of their paper
outstanding which on October 31 showed a total of
$210,000,000. This total is 15 per cent less than the
amount outstanding a month earlier, and 57 per cent
below the October 1930 figure.

with the decline in the silver market. Canadian dollars
weakened somewhat during November.
Closing Cable Rates at New Y ork
(In dollars)
Exchange on

Japanese yen also improved their position in Novem­
ber, rising from $0.4915 to $0.4963, the latter rate
being above the gold export point from Japan. The
silver currencies strengthened in the middle of the
month as the price of silver rose but fell back again
DO LLARS




DOLLARS

Nov. 29, 1930 Oct. 31, 1931 Nov. 28, 1931
$ .1409
.1395
.2675
4.8553
.0393
.2384
.4024
.0524
.2674
.1122
.2684
.1936

$ .1395
.1393
.2180
3.8300
.0393
.2365
.4029
.0516
.2140
.0888
.2240
.1949

$ .1415
.1388
.1932
3.5250
.0391
.2378
.4015
.0516
.1910
.0843
.1941
.1939

1.0000
.9648
.1196
1.0342

1.0016
.7813
*
.7875

.8988
.5319
.0625
.4050

.8675
.5882
.0625
.4525

.4985
.3650

F oreign E x ch a n g e
Though irregular and featured by gains in some cur­
rencies, the foreign exchange list on the whole weak­
ened during November. Sterling, in particular, after
strengthening from its late October recession to $3.81%
on November 9, began a new decline which was acceler­
ated in the last week of the month, carrying the pound
to $3.5250 on the 28th. French francs, belgas, and guild­
ers approached their gold import points to New York in
the second half of November, and Swiss francs, though
remaining above par, were down several points from the
month’s opening. The marked recession in the four
principal European exchanges which followed the Octo­
ber rise is shown in the accompanying diagram. Reichs­
marks moved contrary to the general tendency among
Europeans and rose from $0.2358 on November 2 to
$0.2378 on the 28th.
An upward tendency also appeared in the South
American currencies; Argentine pesos rose from $0.5333
on the 2nd of November to $0.6211 on the 11th, receding
to $0.5882 on the 28th; Uruguayan pesos commenced the
month at $0.4300 and closed it at about $0.4525, while
Brazilian milreis held fairly steady in the neighborhood
of $0.0625.

Par
$ .1407
.1390
.2680
4.8665
.0392
.2382
.4020
.0526
.2680
.1930
.2680
.1930

.4963
.3597
.3819

.4895
.2925
.3250

.4963
.2680
.3313

* N ot quoted

G o ld M o v e m e n t
The gold movement was reversed abruptly at the end
of October and during the month of November the
monetary gold stock of the United States was increased
about $129,000,000, due principally to imports of $76,000,000 from Japan at San Francisco and a net decrease
of $28,300,000 in gold held under earmark for foreign
account. In addition, $6,100,000 of gold was received
from Canada, $4,800,000 from India, and $300,000 from
England at the Port of New York; also $1,500,000 from
China and $1,100,000 from Australia at San Francisco.
Exports totaled about $4,400,000 of which $3,000,000
went to Turkey, $700,000 to Peru, and $250,000 to
Switzerland. The November gain of gold reduced the
net decline in this country’s gold stock for the year to
date to about $174,000,000.
A total of £785,000 South African gold arrived in the
London market during November, of which £365,000
was taken for the continent, £180,000 for the United
States, and the balance for the trade at varying prices.
DO LLARS

DO LLARS

92

MONTHLY REVIEW, DECEMBER 1, 1931

Central Bank Rate Changes
On November 5 the Bank of Japan, which has been
undergoing a drain of gold almost uninterruptedly for
nearly two years, raised its rate from 16 rin to 18 rin
per day per 100 yen, the percental equivalent being an
increase from 5.84 to 6.57 per cent per annum. On the
13th, the South African Keserve Bank rate was raised
from 5 to 6 per cent, the lower rate having been in
force since March 13, 1931.
The Austrian National Bank lowered its discount rate
from 10 to 8 per cent on the 13th; the 10 per cent rate
had been effective since July 23, 1931. On the 24th, the
Bank of Danzig rate was reduced to 5 per cent from the
6 per cent level obtaining since September 1 of this year.

PJB IC
l L
U IL IE
T IT S

u
\

L
SR L\
^ V l N C >U T IA S
R ILR A S
A OD
j* \
La
(1 2 AEA3 *o)
9 6 VR<Ei o
v

N e w F in a n cin g
Offerings of new securities other than United States
Government issues continued in small volume during
November, though the total for the month was somewhat
larger than for October. Bond flotations included a
railroad issue for the first time since the middle of
September, and there were a few moderate sized public
utility issues, which had been virtually suspended in
October. State and municipal financing also aggregated
somewhat more than in the preceding month. There
continued to be an absence of foreign bond offerings in
this market. Five issues of United States Treasury bills
were put out during November, in the aggregate amount
of $372,000,000; these issues were largely to replace five
issues totaling $320,000,000 that matured during the
month.
Final figures for October give a total of $45,000,000
of new securities floated during that month. This
amount, which is the smallest for any month since the
war, was only about one-tenth of the October 1930 total.
S ecu rity M a r k e ts
The general movement of stock prices continued
upward during the first few days of November, but sub­
sequently the trend was almost continuously downward.
In the 16 trading sessions between November 10 and
November 28 there were only two days on which the
general level of share prices closed higher than on the
previous day. As a result the prices of late November
were on the average only slightly above the early Octo­
ber lows, whereas in the early part of November the net
recovery from the October lows had amounted to 31
per cent. As the accompanying diagram indicates, the
railroad stocks were the weakest class during the latter
part of November, declining several points beneath the
October low and reaching new low levels for many years.
Industrial and public utility stocks also declined con­
siderably, but in general remained somewhat above their
October low points, although there were numerous excep­
tions in individual stocks.
As in the greater part of October, trading on the
New York Stock Exchange remained comparatively
light. The average daily stock turnover for the whole
month was somewhat less than 2 million shares, and on
most days did not exceed 1 % million shares.




i —---- 1 ... .. 1 ! -.1, i .
...
1928

1929

1

I
1930

I

. i, . i . .i....
1931

Price M
ovem
ents of Industrial, R
ailroad, and Public Utility Stocks
(Standard Statistics C pany w
om
eekly price indexes)
Bond prices continued to show rather wide movements
in November. Substantial recoveries in domestic cor­
poration bonds occurred during the first ten days of the
month, but subsequently declines of 3 to 6 points in the
various price averages and indexes reduced these indi­
cators to new lows for a number of years. Foreign dollar
bonds likewise advanced somewhat in the first part of
November, and, despite a subsequent decline, remained
above the lowest point reached in early October, accord­
ing to a price average of 40 representative foreign issues.
The partial recovery that took place in United States
Government obligations during the second half of Octo­
ber was extended somewhat further in the first few days
of November. For the remainder of the month, United
States Government obligations showed a declining ten­
dency, losing in all about 1 % points, but the average
price of the eleven Liberty Loan and Treasury bond
issues now outstanding was about 1 % points higher near
the end of November than at the lowest point reached in
October.
B u siness P rofits
Third quarter earnings statements of 278 industrial
and mercantile concerns show that these companies had
net profits 62 per cent smaller than in the corresponding
quarter of last year, and 82 per cent less than in 1929.
The comparisons for the third quarter are somewhat less
favorable than those for the preceding quarters of this
year. Only one of the twenty groups of companies
shown in the following table— the clothing and textiles
group— reported larger net profits than in 1930, and in
this case the increase was slight and was from a low
level. Among the groups of companies showing the more
favorable comparisons of net earnings with those of
previous years were the food and food products, chemi­
cal, paper, and tobacco companies. Net profits of 15
automobile companies, including the General Motors Cor­
poration but not the Ford Company, were 38 per cent

FEDERAL RESERVE AGENT A T NEW Y O R K

smaller than a year ago, and 85 per cent less than in
1929. Among the other groups of industrial and mer­
cantile concerns, declines ranged upward from these
figures; in fact, the steel, copper, machinery, and coal
and coke groups showed deficits.
The oil companies, while showing a large decline from
last year, were able in the third quarter to report some
net profits, whereas in the first half of the year large
deficits occurred. The third quarter of the year normally
represents the period of most active operations for the
oil companies, but the low level of oil and gasoline prices
this year undoubtedly increased the difficulty of showing
profits.
Aggregate net profits of the same 278 companies for
the first nine months of 1931 were 55 per cent smaller
than in 1930 and 72 per cent below 1929. Of the prin­
cipal groups of industries, the copper and oil companies
had deficits for the nine months as a whole.
Net operating income of Class I railroads, both for
the third quarter and for the first nine months, was more
than one-third smaller than in 1930 and more than onehalf smaller than in 1929. Third quarter income of
these roads was the smallest for any year since 1920
when a deficit was reported, and the total for the first
nine months was the smallest since 1921. Telephone
company net operating income for the first nine months
was a little more than 3 per cent larger than in 1930,
and about 1 % per cent larger than in 1929. Net earn­
ings of other public utilities during the first nine months
declined 12 per cent below 1930 and were 17 per cent
less than in 1929, but these represent quite moderate
decreases in comparison with the drop in industrial and
mercantile profits.
(N e t profits in millions of dollars)

Corporation Group

N um ­
ber
of
com­
pa­
nies

Th ird quarter

Nine months

1929

1930

1931

1929

1930

1931

Clothing and textiles...............
Food and food products.........
C hem ical.....................................
Paper...........................................
Tobacco......................................
Autom obile................................
Printing and publishing..........
M ining and smelting (excl.
copper, coal and coke). . . .
Electrical equipm ent...............
Office equipm ent.......................
Railroad equipment.................
O il.................................................
Building supplies......................
Automobile parts and acces­
sories (excl. tire s ).................
M otion picture..........................
M achinery..................................
Steel.............................................
Copper.........................................
Coal and coke............................
Miscellaneous............................

8
30
14
6
7
15
6

2
49
22
5
4
94
7

0
40
17
4
2
23
5

1
32
12
3
2
14
3

2
130
60
12
10
332
23

2
122
52
13
6
147
22

0
106
37
10
5
108
13

12
9
7
6
24
9

13
27
7
10
75
9

5
17
4
9
40
2

3
10
1
2
6
0

39
77
22
25
169
18

21
56
15
26
112
7

11
30
4
5
— 20
0

29
7
17
15
6
7
44

17
12
12
84
10
1
47

5
4
5
32
1
0
27

0
0
— 1
— 17
— 2
— 1
23

58
35
35
241
28
4
140

27
29
23
140
7
2
85

10
13
3
11
— 3
0
68

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

278

507

242

91

1,460

914

411

Telephone (net operating
incom e)...............................

103

67

64

67

206

202

209

Other public utilities (net
earnings).............................

63

83

71

59

261

249

218

To tal public u tilities...........

166

150

135

126

467

451

427

Class I railroads _
(net operating incom e). . . .

171

400

283

167

963

659

408

— Deficit




93

E m p lo y m e n t and W a g e s
A further downward movement was apparent in fac­
tory employment and payrolls between the middle of
September and the middle of October. Factory employ­
ment in New York State, contrary to the usual seasonal
tendency, declined 3 per cent, the largest month to
month drop so far this year. For the country as a
whole, factory employment declined 4 per cent, and the
seasonally adjusted index of the Federal Reserve Board
reached a new low level since at least 1919, the first year
for which the index is available. Factory payrolls in
New York State showed a drop of 6 per cent, and a
decline of 4 per cent was shown for the United States
as a whole.
Average weekly earnings in New York State factories
declined further in October to the lowest figure since
1922. As is shown in the accompanying diagram, the
decline in average earnings since the peak of September
1929 has now reached a magnitude equal that of the
decline from 1920 to 1922. These reductions in average
earnings reflect the combined effects of wage rate reduc­
tions and part time employment.
The annual computation of average weekly earnings
of factory office employees made by the New York State
Department of Labor showed the first decline that has
been reported since 1922. The average for October 1931
was $35.49, the lowest level since 1926 and about 5
per cent lower than last year’s figure of $37.48. Average
weekly earnings of factory operatives and office em­
ployees together declined 10 per cent during the year.
As compared with the pre-war average, the net per­
centage rise in office workers’ earnings still falls short
of the net advance in operatives’ earnings, but the dis­
crepancy has been narrowed during the past two years.
The New York State Department of Labor has recently
made public a census of unemployment covering more
than 15,000 usually employed persons of both sexes in
Buffalo. According to this census, 23 per cent of those
able and willing to work were without employment
during the first week of November, and 21 per cent were
employed on a part time basis. For men only the pro­
portion of total unemployment in November 1931 was

94

MONTHLY REVIEW, DECEMBER 1, 1931

24 per cent, as compared with 17 per cent in November
1930 and 6 per cent in November 1929. Of the men who
were able and willing to work but unable to find jobs,
43 per cent had been without employment for at least a
year.
F oreign T r a d e
During October merchandise exports from this coun­
try were valued at $205,000,000, an amount which
showed a percentage gain from the previous month about
equal to the usual seasonal increase. Imports, however,
valued at $169,000,000, were substantially the same as
in September, whereas there is usually an increase
between these two months. In comparison with October
1930, the value of exports was reduced by 37 per cent
and imports by 32 per cent. The year-to-year decline in
exports was somewhat smaller than in other recent
months, while the reduction in imports was larger.
Exports of partly and wholly finished manufactures
and all types of imports registered heavier losses from a
year ago than in September. Exports of crude materials
and of crude and manufactured foodstuffs, however,
showed smaller percentage reductions than in the previ­
ous month. October raw cotton exports were equal in
volume to those of a year ago, but, owing to the decline
in cotton prices through this period, the value of the
shipments was 38 per cent smaller. Cotton shipments to
Great Britain compared more favorably with a year
previous than in several months, and shipments to the
Far East were in substantially larger volume than in
either of the two previous years. The volume of imports
of raw silk was somewhat larger than in October 1930
while receipts of crude rubber were slightly smaller.
C o m m o d ity Prices
Large fluctuations occurred in the prices of certain
individual commodities during November, and on the
whole prices were somewhat firmer in the early part of
the month, but renewed declines in the latter part can­
celed most of the earlier gains, and a few commodities
reached new low levels. The widest fluctuations were in
silver and wheat prices, which are shown in the accom­
panying diagram. Silver, after ranging between 29 and
30 cents during most of October, rose sharply to the

highest level of the year at 37% cents an ounce in the
first half of November, but thereafter reverted to its
October level. The cash price of wheat also advanced
further to a new high for the year in the early part of
the month, the Number 1 Northern grade at Minneapolis
touching 83% cents a bushel, but by the end of the
month had returned to 70% cents, the lowest price since
the third week of October. This quotation remained
13Y2 cents above the summer low, but the futures quota­
tions declined by a larger amount than the cash quota­
tions to a level within about 7 % cents of the October
lows.
An average of crude petroleum quotations continued
to advance in the first half of November, reaching the
highest level since March, and remained steady during
the remainder of the month. The price of scrap steel
has held fairly steady since June, and similar stability
has prevailed in finished steel and, more recently, in pig
iron and some of the non-ferrous metals. Copper, how­
ever, declined to the lowest figure on record and lead
prices showed a small net loss for the month. Hog prices
fell to the lowest level in many years, rubber reached a
new all-time low, cotton reacted following last month’s
sharp advance, and corn prices lost most of the gain
made in October and the first half of November. Prices
of hides rose moderately from the low levels of October.
P ro d u ctio n
Operations in the steel industry averaged slightly
higher in November than in October, contrary to the
usual seasonal movement, but the tendency was down­
ward in the latter part of the month. Production of
crude petroleum, reflecting a resumption in the East
Texas fields, was larger than at any time since August.
Output of bituminous coal and production of cotton
goods were not greatly changed from the October levels.
^ In October, the general tendency of industrial produc­
tion continued to be slightly downward, after seasonal
allowance, and the seasonally adjusted index of the
Federal Reserve Board reached a new low point since
1922. Output of pig iron and steel ingots was further
reduced to the lowest level since 1921. Production of
passenger automobiles dropped about 50 per cent, and
output of motor trucks was also sharply reduced.

6L i
J F M A M J J A S O N




J F M

A M

J J A

S O

N

Movements of Wheat, Silver,

i

J F M

i

1 a)
A M

J J A

S O

Steel, and Petroleum Prices

N

50lri i

i

J F M

i

i

A M

p

i
J J A S O

N

FEDERAL RESERVE AGENT AT NEW Y O R K

95

Declines contrary to the nsnal seasonal tendency occurred
in wool mill activity and in mill consumption of raw
cotton, and a more than seasonal decline took place in
production of boots and shoes. In the output of fuels,
large increases occurred in crude petroleum and in
anthracite coal, while bituminous coal increased by a
little less than the usual seasonal amount.

building contracts was 30 per cent less than in 1930.
The value of residential building was reduced 23 per cent,
but the amount of new residential floor space covered by
contracts was only 13 per cent smaller, indicating that
some part of the decline in the figures for the value of
building has been due to a decrease in building con­
struction costs.

(Adjusted for seasonal variations and usual year-to-year growth)

In Metropolitan New York and vicinity, the total
value of contracts awarded since the first of the year
stood 20 per cent below last year at the end of October.
Public works and utilities were 17 per cent smaller, and
other non-residential work was 35 per cent less, while
the value of residential contracts was slightly larger.
Residential building in terms of new floor space con­
tracted for was 2 2% per cent larger than last year. This
increase in residential building has reflected principally
the erection of 1 and 2 family houses.

1931

1930

Sept.

Oct.

Oct.

Metals

Zinc..................................................................
T in deliveries............................................... ..

Automobiles
Passenger cars................................................
M otor trucks..................................................

Fuels
Bituminous coal.............................................
Anthracite coal........ ......................................
Coke.................................................................
Petroleum, crude...........................................
Petroleum products......................................

Aug.

71
69
77
82
71
113

43
48
54
58
38
76

41
43
54p
57
38
70

38
40

31
66

40
59

29
54

15p
37p

88
106
80
86
85

76
66
57
75
80

73
71
55
72
78

71p
93p
55
82p

70
66
113
98
88
78

78
99
77
92
105
97

79
84
94
86

74
62
96
84

86p

72 p

96
91
92
98

91
92
74
88

99
84
80
87

99
84
74
83

94
61
61
84
89
84
80

83
58
45
78
80
78
75

77
51
43
79
86
77 p
77 p

Textiles and Leather Products
Cotton consumption.....................................
Wool m ill a c tiv ity ........................................
Silk consumption...........................................
Leather, sole...................................................
Leather, upper...............................................
Boots and shoes.............................................

Foods and Tobacco Products
Live stock slaughtered................................
W heat flo ur....................................................
Sugar meltings, U. S. p o rts .......................
Tobacco products.........................................

Miscellaneous
Cem ent............................................................
T ire s .................................................................
Lu m b er............................................................
Printing a c tiv ity ............................................
Paper, newsprint...........................................
Paper, other than newsprint......................
Wood p u lp ......................................................

58
37
78

68

In d ex es o f B u siness A c t iv it y
Car loadings of merchandise and miscellaneous freight,
which are considered to be a good indicator of changes
in general business conditions, declined somewhat less
than seasonally during the first half of November, and
department store trade in the New York Metropolitan
area during the same period showed the smallest decline
from sales in the corresponding period of 1930 in a
number of months. Conditions in the latter part of the
month, however, were less favorable for the distribution
of goods.
During October, the distribution of goods and general
business activity showed a further decline, after seasonal
adjustment. Car loadings, both of merchandise and

40
84

(Adjusted for seasonal variations and usuaFyear-to-year growth)
1930

p Preliminary

B u ild in g
The value of building and engineering contracts
awarded in 37 States during October was 28 per cent
smaller than a year ago, reflecting, according to the
F. W . Dodge Corporation report, a decrease of 42
per cent in residential building and also a decrease of
27 per cent in public works and utility projects and one
of 17 per cent in other non-residential contracts. As
compared with September, residential contracts were
increased less than seasonally, and non-residential con­
tracts for the month as a whole showed about the usual
seasonal reduction, despite the influence of the large
“ Radio City” contracts, while public works and utility
projects were reduced somewhat less than in the same
period of other recent years.
Preliminary figures indicate that the course of build­
ing operations continued downward during November.
For the first three weeks of the month, the daily average
of contracts awarded was down more than seasonally
from the October level, with reductions reported in all
of the major groups of construction.
F o r th e first te n m on th s o f 1931, th e to ta l v a lu e o f




1931

Oct.

Aug.

Sept.

84
80
75
95
86
90

72
64
58
74
58
89

67
62
56
76
56
85

67
63
56p
70p
55
80

100
89
89
94
85
86
56

89
91
90
82
74
85
48

85
88
86
77
74
84
45

92
82
84
72
72

76
71

Oct.

Primary Distribution
Car loadings, merchandise and misc........
Car loadings, oth er.......................................
Waterways traffic ..........................................
Wholesale tra d e .............................................

Distribution to Consumer
Departm ent store sales, 2nd D is t.............
Chain grocery sales.......................................
Other chain store sales................................
M a il order house sales.................................
Advertising.....................................................
Gasoline consumption..................................
Automobile registrations.............................

3 5p

General Business Activity
Bank debits, outside of New Y ork C ity .
Bank debits, New Y ork C ity .....................
Velocity of bank deposits, outside of New
York C it y ...................................................
Velocity of bank deposits, New Y ork C ity
Shares sold on N . Y . Stock Exchange. . .
Life insurance paid fo r ................................
Postal receipts................................................
Electric power................................................
Employment in the U nited States...........
Business failures............................................
Building contracts........................................
New corporations formed in N . Y . State
Real estate transfers....................................

91
90

81
67

79
77

100
115
161
91
91
91
84
105
68
90
61

86
77
76
90
81
82
76
104
49
95
52

85
84
141
88
82
83 p
74
108
56
86

72
113
50p
88

General price le v e l*......................................
Composite index of wages*........................
Cost of liv in g *...............................................

163
221
163

149
214
148

147
213
148

145
208
146

p Preliminary

* 1913 average=100

88
80
115
90
79

96

MONTHLY REVIEW, DECEMBER 1, 1931

miscellaneous freight and of bulk commodities, were
little changed from the previous month, after seasonal
adjustment, and merchandise exports showed about the
usual seasonal expansion. Declines occurred in mer­
chandise imports and in the indexes of bank debits,
wholesale trade, chain store sales, mail order house sales,
advertising, and automobile registrations; and the num­
ber of business failures increased to the highest level
ever recorded for October. Department store sales,
however, increased more than usually in October, and
new corporations formed in New York State also in­
creased somewhat more than seasonally.
D e p a r tm e n t Store T ra d e
Sales of the reporting department stores in this dis­
trict during October averaged 9.4 per cent smaller than
in October 1930, the smallest decline to be shown since
July. The declines reported by stores in Newark, South­
ern New York State, the Capital District, and West­
chester County were smaller than the average, and the
October sales in Buffalo, Rochester, and the Hudson
Valley District, though substantially smaller than a year
ago, were not as far below as in September. In Syracuse,
Bridgeport, and Northern New York State, however,
department store sales during October showed larger
decreases from last year than in September, as did also
the sales of the leading apparel stores in the district.
For the first half of November, sales of the reporting
department stores in the Metropolitan area were 4.8 per
cent smaller than in the comparable period of last year,
the smallest decrease to be reported in the mid-month
report since June, but weather conditions were less
favorable to the distribution of seasonable merchandise
after the middle of the month.
Stocks of merchandise on hand at the end of October,
valued at retail prices, continued to be considerably
below the previous year. The percentage of outstanding
charge accounts collected during October, however, was
only slightly smaller than in the same period in 1930.

Percentage change from
a year ago
Locality
N et sales

Per cent of
accounts
outstanding
September 30,
collected in
October

Jan.
to Oct.

Stock
on hand
end of
month

1930

— 8 .0
— 10.6
— 8 .4
— 10.2
— 6 .2
— 11.1
— 9 .2

— 13.9
— 8 .9
— 11.1
— 14.8
— 9 .4
— 21.0
— 11.1

4 7.6
4 0.9
4 4.6
3 1.4
4 3.3
4 1.8
4 0.8

4 7.8
44.1
4 8.6
28.3
4 1.2
3 8.7
3 7.8

— 9 .4

— 8 .0

Toilet articles and drugs.......................
Toys and sporting goods.......................
Books and stationery............................
Home furnishings....................................
Cotton goods..........................................
Woolen goods...........................................

Oct.

A ll department stores............
Apparel stores..........................

— 19.4

— 10.7

— 13.0
— 19.4

46.1

4 4 .2
4 1.8

October sales and stocks in the principal departments
are compared with those of a year previous in the fol­
lowing table:




3 .7

2 .9
5 .1

—

Stock on hand
percentage change
October 3 1 , 1 9 3 1
compared with
October 3 1 . 1 9 3 0

2.1
2 .4

—
—

Luggage and other leather goods. . . .
Women’s ready-to-wear accessories...
M en’s furnishings...................................

5 .5
5 .6
5 .8

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

— 1 0 .1
—
—
—
—

M en’s and Boys’ w ear...........................
Women’s and Misses’ ready-to-wear..
Linens and handkerchiefs.....................
Silverware and je w e lry ..........................
Musical instruments and rad io...........
Silks and velvets.................................
Miscellaneous...........................................

1
1
1
1

1
2
3
4

.0
.6
.5
.1

— 1 6 .0
— 1 0 .5
— 1 5 .5

— 1 8 .2
— 2 0 .9

—
—
—
—
—
—

— 1 4 .4

— 1 4 .4

— 1 4 .6
— 1 8 .0
— 1 8 .2

1 0 .6
4 .5
5 .2
0 .5
9 .3
7 .9

2
2
2
2

W h o le sa le T r a d e
The total October sales of the reporting wholesale
firms in this district averaged 22 per cent smaller than
a year ago, or about the same decline as in the two
previous months. Sales of drugs, groceries, and men’s
clothing showed the smallest decreases, with the excep­
tion of silk goods, sales of which are reported in yardage
rather than value by the Silk Association of America.
In the case of silk goods the October decline was the first
since May. Decreases in sales of more than 20 per cent
continued to be reported by wholesale hardware, cotton
goods, and paper dealers. Stationery wholesalers re­
ported the largest decline from the previous year since
October 1930, and shoe sales showed the largest decrease
in more than a year. Sales of jewelry and diamonds
continued to be far below the previous year, and machine
tool orders, reported by the National Machine Tool
Builders Association, remained less than half the volume
of a year ago.
Stocks of merchandise on hand at the end of the
month showed sizable decreases from a year ago in all
reporting lines, with the exception of drugs. Collections
in October of this year were somewhat slower than
in 1930.

Commodity

4 4.8

+
+
—

—
—

1931

— 9 .4
Buffalo............................................... — 13.4
Rochester.......................................... — 13.7
Syracuse............................................. — 14.1
N ew ark .............................................. — 6 .2
Bridgeport D is trict......................... — 15.3
Elsewhere........................................... — 10.1
Northern New Y ork State. . . . — 25.3
Southern New Y o rk State........ — 8 .0
Hudson River Valley D is tric t.. — 13.9
Capital D is trict............................ — 7 .9
Westchester D is trict................... — 8 .9

N et sales
percentage change
October 1 9 3 1
compared with
October 1 9 3 0

Percentage
change
October 1931
compared with
September 1931

N et
sales
M en’s clothing...............
Cotton goods..................

Machine too ls**.............
Paper................................

Weighted average. . .

+ 1 2 .5
— 31.7
+ 1 6 .1
— 1 9 .2 *
— 21.3
+ 2 0 .7
+ 1 9 .5
— 2 0.5
+ 3 .4
+ 1 3 .7
+ 2 0 .6
+ 10.2
— 2 .8

Stock
end of
month
— 2 .1
—
+
—
+
—

5 .8
7 .6 *
4 .1
9 .6
7 .2

— 4 .7
— 6 .5

Percentage
change
October 1931
compared w ith
October 1930

N et
sales

Stock
end of
month

Per cent of
accounts
outstanding
September 30
ecollected
in October

1930

1931

— 18.7
— 2 0.7
— 16.6
— 2 7.7
— 24.9
— 1 1 .5 * — 1 2.2 *
— 32.1
— 18.9
— 13.5
+ 1 7 .0
— 2 0.8
— 9 .9
— 5 0.6
— 2 6.0
— 21.4
— 4 6.4
— 4 0.6 }
— 37.3
— 39.0

81.1
3 8.0
37.4
4 6.7
52.8
40.6
48.3

8 1.2
3 3.7
3 6.4
5 4.4
3 9 .8
3 1 .2
45.1

6 4.8
5 7.0
21.9

67 .3
4 6.9
} 19.0

— 2 2.3

5 3.6

5 0.9

* Quantity not value. Reported by Silk Association of America
** Reported by the National Machine Tool Builders Association

FED ERAL RESERVE BAN K OF NEW YO RK

MONTHLY F2VIEW, DECEMBER 1, 1931
B u sin e ss

C o n d itio n s

in

th e

U n ite d

S ta te s

(Summarized by the Federal Reserve Board)
RODUCTION and employment in manufacturing industries declined further
in October, while output of minerals increased more than is usual at this
season. There was a considerable decrease in the demand for Reserve Bank
credit after the middle of October, reflecting a reduction in member bank
reserve balances and, in November, an inflow of gold, largely from Japan.
Conditions in the money market became somewhat easier.

P

P r o d u c t io n a n d

Index N ber of P
um
roduction of M
anufactures
an M
d inerals C bined, Adjusted for Seasonal
om
Variations (1923-25 average = 100 per cent)

Federal R
eserve B
oard’s Index of Factory Em
­
ploym w Adjustm for Seasonal Varia­
ent ith
ent
tions (1923-25 average = IO per cent)
O

E mployment

Total output of manufactures and minerals, as measured by the Board’s
seasonally adjusted index of industrial production, declined from 76 per cent
of the 1923*1925 average in September to 74 per cent in October. Output of
steel remained unchanged at 28 per cent of capacity in October, although it
usually shows an increase for that month; in the first half of November activity
at steel mills increased somewhat. Automobile production declined sharply in
October; production of shoes and woolens decreased and cotton mill activity
showed little change, although an increase is usual at this season. Output of
bituminous coal increased seasonally, and there were large increases in the
output of anthracite and petroleum.
Volume of factory employment declined substantially from the middle of
September to the middle of October. At woolen mills where an increase in
employment is usual at this season, there was a large decrease. In the auto­
mobile and shoe industries reductions in employment were considerably larger
than usual, while in the canning industry the decline was wholly of a seasonal
character. In the silk goods and hosiery industries employment increased by
more than the usual seasonal amount.
The November cotton crop estimate of the Department of Agriculture was
16,903,000 bales, 600,000 bales larger than the October estimate and 3,000,000
bales larger than last year in spite of a reduction in acreage.
Data on the value of building contracts awarded in the period between
September 1 and November 15, as reported by the F. W. Dodge Corporation,
showed a continuation of the downward movement. In this period value of
contracts was 29 per cent smaller than in the corresponding period of 1930,
reflecting smaller volume of construction and somewhat lower building costs.
D is t r ib u t io n

1
9

1

A.LL

OTHER Ijca n s / A

Total volume of freight-car loadings remained unchanged in October, while
loadings of merchandise decreased. Department store sales increased by somewhat more than the usual seasonal amount.

....... ..

!

A

. /

)N
LOANS C SECURITIES
r v

\

^J

W h o l e s a l e P r ic e s

\

-

V
6

^

-

J

VESTMENTS
s c L .........

1927

1928

! _ , ____
L
1929

1930

1931

M
onthly Averages of W
eekly Figures fo ^ R
r e­
porting M ber Banks in Leading C
em
ities
(Latest figures are averages of first
three w
eeks of Novem
ber)

1927

1928

1929

1930

1931

M
oney R
ates in the N York M
ew
arket (N
ovem
ber
rates are averages for the first 21 days)




The general level of wholesale prices declined from 69.1 per cent of the
1926 average in September to 68.4 per cent in October, according to the Bureau
of Labor Statistics. Prices of grains, cotton, and silver, after showing a rapid
rise beginning early in October, declined considerably, but in the third week of
November were still above their October low points; prices of hides and petro­
leum were also higher in the middle of November than in early October. During
this period the prices of livestock and meats declined rapidly, reflecting in part
developments of a seasonal character.
Bank

C r e d it

Reserve Bank credit, which had increased rapidly between the middle of
September and the third week of October, declined by $265,000,000 during the
following four weeks. This decline reflected a large reduction in member bank
and other balances at the Reserve Banks and also an inflow of gold, chiefly
from Japan. Demand for currency, which had been on a large scale during
September and the first three weeks of October, showed relatively small fluctua­
tions after that time and in the second week of November declined by some­
what more than the seasonal amount.
Loans and investments of member banks in leading cities continued to
decline during recent weeks, and on November 18 the total volume was
$500,000,000 smaller than five weeks earlier. This decrease reflected substantial
reductions in loans on securities and in other loans, as well as in the banks’
holdings of investments. At the same time deposits of these banks also declined
with a consequent reduction in the reserve balances which they were required to
hold with the Reserve Banks.
Money rates in the open market, wliich had advanced sharply during
October, declined somewhat early in November. Rates on prime commercial
paper declined from a range of 4-4% per cent to a range of 3 %-4 per cent,
and rates on bankers acceptances from 3 ^ to 2% per cent.