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MONTHLY REVIEW of Credit and Business Conditions S e c o n d Federal Reserve Agent F e d e ra l R e se rv e Federal Reserve Bank, New York Money Market in November F o llo w in g th e s tre n g th e n in g of th e d o lla r a g a in s t th e E u ro p e a n g o ld ex ch an g es d u rin g th e la tte r p a r t of O ctober, a ren e w ed inflow o f go ld to th e U n ite d S ta te s h as o c c u rre d d u rin g N o vem b er, a n d f u r th e r sh ip m e n ts a re now sch ed u led w h ich w ill a rriv e in th is c o u n try d u rin g D ecem ber. F o r N o v em b er th e re c e ip ts o f go ld am o u n te d to a p p ro x im a te ly $112,000,000, th e la rg e s t inflow fo r a n y m o n th since M arch . T h is new gold m ove m e n t reflects th e fa c t th a t c u rre n t p a y m e n ts b y th is c o u n try on in te rn a tio n a l ac c o u n t a re sm aller th a n p a y m en ts d u e th is c o u n try a n d th a t th is b a lan ce te n d s to re s u lt in go ld sh ip m e n ts to th e U n ite d S tate s. E x c lu d in g th e in c re ase in th e m o n e ta ry g o ld sto ck of th is c o u n try d u e to th e re v a lu a tio n o f th e d o lla r, th e in c re ase since th e b e g in n in g o f th is y e a r h a s am o u n te d to m ore th a n $1,250,000,000. E v e n allo w in g fo r th e in c re a se d p ric e of gold, th is re p re s e n ts a la rg e r in c re ase in th e m o n e ta ry g old stock of th e U n ite d S ta te s th a n in a n y p rev io u s y e ar. W h ile th e a m o u n t of g o ld a d d e d to th e m o n e ta ry stock fro m do m estic so u rces h as been u n u s u a lly la rg e th is y e a r, a m o u n tin g in th e case o f n e w ly m in e d g o ld to m o re th a n $75,000,000 sin ce th e e a rly p a r t o f M arch , a n d in th e case o f reco v eries o f sc ra p g o ld to m o re th a n $90,000,000 sin ce th e b e g in n in g of th e y e ar, b y f a r th e la rg e s t p a r t of th e in c re a se in th e go ld stock — n e a rly $1,100,000,000— h a s re p re s e n te d g o ld receiv ed fro m a b ro a d o r re lea se d fro m e a rm a rk fo r fo re ig n ac c o u n t h ere. W ith th e ex cep tio n o f E n g la n d , fro m w h ich c o u n try la rg e g o ld s h ip m e n ts h a v e b een receiv ed , p re su m a b ly re p re s e n tin g la rg e ly n ew g o ld so ld in th e L o n d o n m a rk e t, th e c o u n try fro m w h ich th e m o st g o ld h a s been receiv ed d u rin g th e c u rr e n t y e a r is F ra n c e , w h ich ra n k s secon d o n ly to th e U n ite d S ta te s in th e size o f its m o n e ta ry g o ld stock. C o n sid erab le a m o u n ts h a v e b een receiv ed also fro m B e lg iu m a n d H o lla n d w hose stocks, w h ile su b s ta n tia l, a re sm all co m p a re d w ith th o se o f th e U n ite d S ta te s a n d F ra n c e . S izab le am o u n ts also h av e been receiv ed fro m In d ia , p re s u m a b ly fro m p riv a te h o a rd s, so th a t th e ir re c e ip t re p re s e n ts a n a d d itio n to th e to ta l stock o f g o ld a v ailab le fo r m o n e ta ry p u rp o se s. A t th e en d of N o v em b er th e m o n e ta ry g o ld sto ck o f th e U n ite d S ta te s w as in excess of $8,100,000,000, w h ich re p re s e n ts a b o u t 37 % p e r ce n t of th e to ta l g old h o ld in g s of th e c e n tra l b a n k s a n d g o v ern m en ts of th e p rin c ip a l co u n trie s of th e w o rld . D is tric t December 1, 1934 A co n sid erab le p a r t o f th e g o ld inflow to th e U n ite d S ta te s fro m o th e r c o u n trie s th is y e a r, e sp ec ially th e h e a v y m o v em en t th a t fo llo w ed im m e d ia te ly a f te r th e re v a lu a tio n o f th e d o lla r, no d o u b t h a s reflected c a p ita l m ov em ents, in p a r t a r e tu r n to th e U n ite d S ta te s of d om estic c a p ita l p re v io u sly h e ld ab ro a d , a n d in p a r t a n inflow of fo re ig n c a p ita l fo r th e p u rp o se of re p u rc h a s in g fo re ig n se c u ritie s o r b u y in g do m estic s e c u ritie s in th is c o u n try . S ev eral o th e r item s th a t fig u re p ro m in e n tly in th is c o u n try ?s in te rn a tio n a l b alan ce of p a y m en ts, how ever, h a v e also te n d e d to in c re a se th e m o v em en t o f g o ld to th is c o u n try . I n th e firs t te n m o n th s of 1934 m e rc h a n d ise e x p o rts fro m th e U n ite d S ta te s w ere n e a rly $500,000,000 la rg e r th a n in th e c o rre sp o n d in g p e rio d of 1933, w h ile in th e sam e p e rio d th e in c re a se in m e rc h a n d ise im p o rts w as less th a n $200,000,000; co n se q u en tly , th e b a la n c e p a y ab le to th e U n ite d S ta te s on m e rc h a n d ise tra n s a c tio n s in creased fro m a b o u t $110,000,000 in th e firs t te n m o n th s of 1933 to $395,000,000 in th e c o rre sp o n d in g p e rio d of 1934. F u rth e rm o re , e x p e n d itu re s a b ro a d b y to u ris ts fro m th e U n ite d S ta te s, w h ich o rd in a rily go f a r to offset p a y m e n ts d u e th is c o u n try on m e rc h a n d ise tra n s a c tio n s a n d in som e re c e n t y e a rs h a v e ex ceed ed th e fa v o ra b le b a lan ce of tra d e of th e U n ite d S ta te s, th is y e a r a re re p o rte d to h av e d im in ish e d co n sid erab ly , d u e in p a r t to th e re d u c e d p u rc h a s in g p o w er of th e d o lla r ab ro a d . P a y m e n ts fo r silv er im p o rts a n d a co n sid erab le d ecrease in incom e receiv ed fro m th e fo re ig n in v e stm e n ts of th is c o u n try a p p a re n tly h av e o n ly p a rtly offset th ese item s. C o n seq u en tly , th e effect o f th e y e a r ’s d e v elo p m en ts on th e w hole h as been to in c re ase th e b alan ce of p a y m e n ts d u e th e U n ite d S tate s, w h ich is se ttle d b y g old sh ip m e n ts. E xcess R eserves an d M o n ey R ates L a rg e ly as a re s u lt o f th e ren e w ed g old inflow , excess reserv es of all m e m b er b a n k s in c re a se d d u rin g N o vem b er to a ro u n d $1,900,000,000, a v olu m e p re v io u sly a tta in e d o nly in A u g u st. I n N ew Y o rk C ity, w h ere m ost of th e in co m in g gold w as receiv ed , th e excess reserv es of th e p rin c ip a l m em b er b a n k s re a c h e d a new h ig h lev el a t a b o u t $700,000,000. N e a r th e en d of th e m o n th , how ever, seasonal c u rre n c y d e m an d s a n d T re a s u ry tra n s a c tio n s re s u lte d in a f a ir ly s u b s ta n tia l re d u c tio n in excess r e serves, b o th in N ew Y o rk C ity a n d in th e c o u n try as a w hole. M oney ra te s re m a in e d v irtu a lly u n c h a n g e d th ro u g h o u t N o v em b er a t th e low levels re a c h e d n e a r th e e n d o f O ctober. MONTHLY REVIEW, DECEMBER 1, 1934 90 Money Rates at New York C N ov. 29, 1933 Oct. 31, 1934 N ov. 30, 1934 Stock Exchange 90 day loans................... Prime commercial paper— 4 to 6 months Bills— 90 day unindorsed........................... Customers’ rates on commercial loans.. Treasury securities Maturing March (yield)........................ Maturing June (yield)............................ Maturing December 1935 (yield). . . . Average rate on latest Treasury bill sales 91 day issue............................ .................. 182 day issue............................................... Federal Reserve Bank of New York re discount rate............................................... Federal Reserve Bank of New York buying rate for 90 day indorsed bills. . H A Z 1 M -1 M X 1 1 * H -l * % - l M -l M -l x X + 2 .5 8 + 2.1 3 +2.0 4 0 .2 0 0 .2 5 N o yield N o yield 0 .3 9 N o yield N o yield 0 .2 3 o ‘. i 9 0 .2 3 0 .4 3 2 X I X I X X X 1 * Nominal + Average rate of leading banks at middle of month M ember B a n k Credit W eek ly re p o rts fro m m em b er b a n k s in 91 p rin c ip a l cities th ro u g h o u t th e c o u n try show ed a f u r th e r in c re ase of $161,000,000 in n e t d e m a n d d ep o sits d u rin g th e fo u r w eeks e n d ed N o v em b er 21, w h ich c a rrie d th e to ta l am o u n t of su ch d e p o sits above $13,500,000,000. T h is fig u re co m p ares w ith less th a n $10,000,000,000 ju s t a f te r th e b a n k h o lid ay , a n d re p re s e n ts a new h ig h lev el fo r sev era l y e ars. T h e to ta l lo an s a n d in v e stm e n ts of re p o rtin g b an k s, how ev er, show ed a re d u c tio n of a p p ro x im a te ly $162,000,000 d u rin g th e fo u r w eek p e rio d , d u e p a r tly to a ren e w ed re d u c tio n in lo an s on sec u ritie s a m o u n tin g to $76,000,000, a n d p a rtly to seasonal re p a y m e n ts of o th e r fo rm s o f b a n k c re d it. T h e seaso n al rise in co m m ercial lo an s a p p e a rs to h a v e re a c h e d its c re st in O ctober, a n d su b se q u e n tly re p a y m e n ts h a v e ex ceeded new loans. H o ld in g s of se c u ritie s o th e r th a n G o v ern m e n t issues show ed a re d u c tio n o f $39,000,000, w h ich a p p a re n tly reflected chiefly th e re tire m e n t of te m p o ra ry m u n ic ip a l b o rro w in g s o u t of ta x re c e ip ts, b u t h o ld in g s of U n ite d S ta te s G o v ern m e n t se c u ritie s show ed a sm all in crease. o m m e r c ia l P aper M arket T he c o n tin u e d la rg e vo lu m e of b a n k fu n d s seek in g in v e stm e n t in o p en m a rk e t co m m ercial p a p e r co u ld be o n ly p a rtia lly em p lo y ed d u rin g N o v em b er because of th e lim ite d a m o u n t of h ig h g ra d e p a p e r w h ich th e d e alers w ere in a p o sitio n to offer. I n fa c t, co m m ercial p a p e r d e alers re p o rte d th a t new d ra w in g s of n o te s b y in d u s tr ia l a n d m e rc a n tile co n cern s cam e in to th e o p en m a rk e t in sm a lle r volu m e d u rin g N o vem b er th a n in O ctober, w h en to ta l o u ts ta n d in g s d e clin ed 2 p e r c e n t to $188,000,000, th e firs t d e crease to o ccu r in n in e m o n th s. O cto b er o u tsta n d in g s, how ever, re m a in e d 45 p e r c e n t h ig h e r th a n a y e a r ago, a n d to th a t e x te n t th e s u p p ly o f p rim e s h o rt te rm p a p e r h a s been e n la rg e d o v er th is p e rio d . N o ch an g e o c c u rre d in th e r a te s tru c tu r e o f th e com m e rc ial p a p e r m a rk e t d u rin g N ovem ber. P rim e f o u r to six m o n th p a p e r c o n tin u e d to be q u o te d a t a ra n g e of % - l p e r cen t, w ith th e h ig h e st q u a lity p a p e r of w ell k n o w n co n cern s co m m an d in g th e % p e r c e n t r a te a n d h ig h g ra d e p a p e r of co n cern s n o t so w id ely k n o w n p ric e d m ore la rg e ly a t 1 p e r cent. Foreign Exchange D u rin g N o v em b er th e d o lla r show ed co n sid e ra b le s tre n g th in te rm s of th e g old cu rren cies, w ith th e conse quence th a t r a th e r h e av y go ld sh ip m e n ts w ere m ad e fro m F ra n c e , B elg iu m , a n d H o lla n d . T he a c co m p an y in g d ia g ra m show s th e m o v em en t of d o lla r ex ch an g e over th e p a s t e ig h t m o n th s as m e a su re d a g a in s t th e F r e n c h fra n c , a n d in d ic a te s th e e x te n t of th e im p o rts a n d ex p o rts of g old th a t h av e follow ed ch an g es in th e d o lla r ’s p o sitio n in th e ex ch an g e m a rk e t. F re n c h fra n c s , w h ich w ere below th e g o ld im p o rt p o in t a t N ew Y o rk a t th e en d of O ctober, d ro p p e d ev en lo w er to $0.065 8% on N o vem b er 1, an d , d e sp ite s u b s ta n tia l gold sh ip m e n ts, d id n o t rise above $0.0659 u n til th e 19th. S u b se q u e n tly th e fra n c firm ed to a lev el close to th e g old p o in t. B elg as co n tin u e d to be th e w eak est o f th e gold B ill M arket n c ie s a n d re m a in e d w ell below th e g o ld im p o rt D u rin g th e firs t h a lf of N ovem ber, d e a le rs ’ p o rtfo lio s cp uo rre in t ro u g h o u t th e m o n th ; a fte r re a c h in g a low of of b ills re m a in e d a t a b o u t th e level re a c h e d in th e la tte r $0.2330th on th e 15th , how ever, th e te n d e n c y w as ir re g u p a r t of O c to b e r; th e a m o u n t of b u sin ess in th e b ill la rly u p w a rd . T he g u ild e r flu c tu a te d a ro u n d th e estim a rk e t in c re a se d som ew hat in th is p e rio d , b u t d e a le rs ’ DOLLAR5 p u rc h a se s a n d sales a p p ro x im a te ly b alan ce d . A fte r th e m id d le of N ovem ber, a lth o u g h th e to ta l tu rn o v e r in th e m a rk e t w as less th a n in im m e d ia te ly p re c e d in g w eeks, d e a le rs ’ sales ex ceeded th e am o u n ts of b ills th a t th e y p u rc h a se d , a n d p o rtfo lio s w e re re d u c e d to th e v e ry sm all a m o u n ts h e ld p r io r to th e ra te re d u c tio n in O ctober. N o r a te ch an g es o c c u rre d d u rin g N o vem b er an d , a lth o u g h ra te s c o n tin u e d to be q u o te d b y th e d e alers o n ly on a p p li catio n , it w as re p o rte d th a t p ra c tic a lly a ll o f th e b u sin ess w as tra n s a c te d a t ra te s of 3 /1 6 p e r ce n t b id , % P er c e n t offered. D u rin g O ctober, a f u r th e r seaso n al in c re ase of $22,000,000 o c c u rre d in th e volu m e o f b a n k e rs accep ta n ce s o u ts ta n d in g . In c re a se s w ere re p o rte d in dom estic w a re h o u se b ills a n d to a lesser e x te n t in e x p o rt b ills. M ore th a n o n e-h alf of th e in c re a se in o u ts ta n d in g s w as a b so rb e d b y th e ac c e p tin g b a n k s a n d b a n k e rs, w hose Fluctuations of Dollar Exchange Measured in Terms of the French Franc and Gold Movements at New York (Latest exchange h o ld in g s a t th e en d o f O cto b er a m o u n te d to 92 p e r c e n t quotation is for November 27, and latest gold data of th e b ills th e n o u ts ta n d in g . are for week ended November 28) FEDERAL RESERVE AGENT AT NEW YORK Sterling continued its late October trend by m oving up to $ 5 .0 0 % on November 7, the highest quotation since mid-Septem ber. The pound then became unusually steady around $ 4 .9 9 1/^ until toward the end of the month when the quotation declined to $ 4 .9 8 % . The Scandinavian currencies and the Japanese yen, follow ing sterling, were also stronger than in October. T h e official b u y in g ra te fo r A rg e n tin e pesos, w h ich is fixed in re la tio n to th e p o u n d , c o n tin u e d to m ove w ith s te rlin g in th is m a rk e t, b u t th e fre e ra te d e p re c ia te d som ew h at d u rin g th e m o n th . A sim ila r m o v em en t took p lace in B ra z ilia n m ilreis w h ere th e official d o lla r ra te show ed v irtu a lly no ch an g e b u t th e fre e ra te d eclin ed 6 p e r c e n t a ro u n d m id-N ovem ber. C a n a d ia n d o lla rs g a in ed irre g u la rly fro m $ 1 .02]/4 a t th e b e g in n in g of th e m o n th to $1 .02% d u rin g th e fin al w eek. T h e C hinese y u a n w as o nly s lig h tly in flu en ced b y th e p ric e of silv er a n d d eclin ed in te rm s of silv e r to w a rd s th e en d o f th e m o n th . Closing Cable Rates at New York Par of Exchange Exchange on Nov. 29, 1933 Oct. 31, 1934 Nov. 28, 1934 Belgium................................ Denmark.............................. England................................ France................................... Germ any.............................. H olland................................ Italy....................................... N orw ay................................ Spain..................................... Sweden.................................. Switzerland.......................... $ .2354 .4537 8 .2 3 9 7 .0663 .4033 .6806 .0891 .4537 .3267 .4537 .3267 $ .2185 .2310 5.1 7 2 5 .06150 .3760 .6325 .0829 .2605 .1286 .2670 .3030 $ .2333 .2225 4 .9 8 0 0 .06593 .4026 .6767 .0856 .2504 .1366 .2570 .3258 $ .2334 .2227 4.9 8 6 3 .06593 .4019 .6759 .0853 .2506 .1367 .2572 .3242 Canada................................. Argentina............................ Brazil..................................... Uruguay............................... 1.6931 .7187 .2026 1.7511 1.0163 .3355 .0900 .7600 1.0263 .3320 .0825 .8000 1.0253 .3324 .0819 .8000 Japan..................................... India...................................... Shanghai............................... .8440 .6180 .3095 .3875 .3375 .2902 .3755 .3331 .2912 .3760 .3388 $2,300,000 a n d $1,500,000 a w eek re sp ec tiv ely . I n all, a b o u t $125,000,000 w as a d d e d to th e g old stock d u rin g th e m o n th . I n a d d itio n , $2,100,000 o f g o ld w as receiv ed fro m C olom bia w h ich w as im m e d ia te ly e a rm a rk e d on a rriv a l a n d th e re fo re w as w ith o u t effect on th e g old stock. Central Bank Rate Changes E ffectiv e N o vem b er 26 th e B a n k o f I ta ly ra is e d its d isc o u n t ra te fro m 3 to 4 p e r cen t, th e lo w er r a te h a v in g been in fo rce since D ecem b er 11, 1933. O n N o v em b er 1 th e B a n k of J a v a r a te w as re d u c e d fro m 4 to 3 y 2 p e r cent. In fo rm a tio n h a s also been receiv ed th a t d u rin g O cto b er th e d isc o u n t r a te o f th e B a n k of S p a in w as re d u c e d fro m 6 to 5 y 2 p e r cent, a n d th a t th e r a te e sta b lish ed b y th e R eserv e B a n k of N ew Z eala n d , w h ich b e g a n o p e ra tio n s on A u g u s t 1, 1934, is 4 p e r cent. Security Markets D u rin g th e firs t te n d a y s of N ovem b er, th e g e n e ra l level of stock p ric e s a d v a n c e d m o d e ra te ly , a n d a lth o u g h in d u s tria l sh ares show ed th e p rin c ip a l in crease, o th e r g ro u p s of stocks also p a rtic ip a te d to som e e x te n t in th e m ov em ent. A ro u n d th e m id d le o f th e m o n th , how ever, p u b lic u tility stocks d eclin ed s h a rp ly , a n d as a re s u lt th e in d e x of p u b lic u tility stock p ric e s show n in th e accom p a n y in g d ia g ra m b ro k e th ro u g h its p rev io u s low p o in t of J u n e 1932 a n d re a c h e d a new low fo r m a n y y e ars. Som e w eakness c o n c u rre n tly develop ed in ra ilro a d stocks, a n d th e in d u s tria ls tu r n e d irre g u la r in th e face of th e d e c lin in g ten d en c ies in o th e r p a rts of th e m a rk e t. I n th e la tte r p a r t of N o vem b er, how ever, a rec o v e ry in p u b lic u tility stocks o c cu rred , a n d th e sto ck m a rk e t g e n e ra lly show ed a ren e w ed a d v a n c in g ten d en c y . T he n e t re s u lt of th e m o n th ’s tr a d in g w as a rise o f 10 p e r c e n t in in d u s tr ia l stocks a n d of 4 p e r c e n t in r a il sh ares, a n d v ir tu a lly no n e t ch an g e in p u b lic u tility stocks as a g ro u p . T he d a ta in th e d ia g ra m show stock p ric e s in p e r cen tag es of 1926 p rice s, a n d in d ic a te th a t ra ilro a d sto cks as a g ro u p a re now sellin g a t p ric e s a b o u t 38 p e r c e n t as h ig h as in 1926, a n d u tility stocks a t a b o u t 55 p e r c e n t of th e 1926 level, w h ile q u o ta tio n s fo r th e in d u s tr ia l g ro u p a v e ra g e a b o u t 90 p e r c e n t of 1926 p rices. Com PftlCE INDEX Gold Movement A s a re s u lt of th e m o v em en t to th e U n ite d S ta te s w h ich b e g an e a rly in th e m o n th , to ta l im p o rts of gold d u rin g N o vem b er w ere a p p ro x im a te ly $112,000,000. T he la rg e st p a r t of th is a m o u n t— $66,600,000— cam e fro m F ra n c e , a n d in a d d itio n $12,800,000 w as receiv ed fro m B elg iu m , $10,400,000 fro m In d ia , $9,200,000 fro m C an ad a, $8,000,000 fro m H o lla n d , $3,8002000 fro m E n g la n d , a n d $900,000 fro m C h in a. T he m o n e ta ry g old stock of th e U n ite d S ta te s w as f u r th e r in c re a se d b y th e release of $1,800,000 of gold p re v io u sly e a rm a rk e d fo r fo re ig n a c co u n t a t th is b a n k , a n d b y th e re c e ip t a t th e m in ts a n d assay offices o f n ew ly m in e d dom estic g o ld a n d sc ra p g old a v e ra g in g ab o u t IC IES r PUBL 100 \ t \ V\ /•’r 75 50 X 'A V . INDUSTRIALS /I A UT,U7 3 $ ^ m a te d g o ld im p o rt p o in t to N ew Y o rk u n til th e 1 3 th w h en i t d ro p p e d below , a n d d e clin ed to its low of $0.6754 on th e 15th, su b se q u e n tly firm in g som ew hat. Sw iss fra n c s, a lth o u g h lo w er th a n in O ctober, w ere th e s tro n g est of th e gold c u rre n c ie s, a n d m ov ed in d e p e n d e n tly , re m a in in g above th e g o ld im p o rt p o in t u n til N o vem b er 23 rd , w h en, as th e o th e r g old c u rre n c ie s show ed sig n s of s tre n g th e n in g , S w iss fra n c s d ro p p e d to $0.3242. N o g old sh ip m e n ts fro m S w itz e rla n d w ere re p o rte d , how ever. L ire a n d re ic h sm a rk s flu c tu a te d w ith in so m ew h at n a r ro w e r lim its th a n in re c e n t m o n th s, b u t w ere w eak er th a n d u rin g O ctober. 91 j ‘ j r r r' ; t ............ V n v 7 ^ \ — f * v V 'V f t ' ~ y a / r a ,lr o a d s ! 25 fj V - vw t V w ... 1 .1 1 .i ... 1 ....1........ ------ 1— j___ j_....... 1934 Price Movements in Major Groups of Stocks (Standard Statistics Company daily indexes— 1926 average = 100 per cent) 92 MONTHLY REVIEW, DECEMBER 1, 1934 pared with the highest prices reached in 1929 current prices vary from 33 per cent in the case of industrial stocks down to 14 per cent for public utilities. The bond market showed no sustained price movement during November. A ll groups of domestic corporation issues rose somewhat during the first part o f the month, but medium grade bonds turned downward after the 10th of the month, while the highest grade issues continued to rise for a while, reaching a new high fo r recent years shortly after the m iddle of the month. Subsequently the highest grade bonds also tended to recede slightly fo r a time, but toward the end of the month, price advances again predominated, and as a result corporate bonds generally showed some net advance for the m onth as a whole. United States Treasury bonds receded slightly further during the first part of November, and despite a subsequent advance of more than % point did not reach quite as high a level as in October. Foreign bonds as a group showed a moderate net advance for the month. New Financing The volume of new financing announced during November totaled about $100,000,000 according to avail able weekly data, a somewhat smaller volume than in other recent months, due principally to the absence of any large issues such as the Government guaranteed obli gations which enlarged the totals fo r several previous months. H owever, the volume of new issues continued to exceed offerings in the corresponding period a year ago. A n issue of especial interest during November was the public offering of $8,000,000 of 4 per cent serial notes of the Republic of F in la n d out of a $10,000,000 refu n d ing issue. Y ield s ranged from 2.525 per cent on the January 1936 m aturity to 4.826 per cent on the January 1939 m aturity. This issue is the first foreign financing to be registered under the Securities A c t of 1933, and is the first public financing in this country by a European Government in more than four years. The financing was possible by virtue o f the fa ct that F in la n d has m et in fu ll all war debt paym ents due to the U nited States Government. The most im portant issue of the month from the view point of size was an offering of $30,000,000 of State of Illinois relief bonds, m aturing serially from 1935 to 1954, and priced to yield from 0.50 to 3.10 per cent. There was also some public u tility financing in the form o f a $10,000,000 Northern States Power Com pany issue, which was offered at a price yielding 5.26 per cent. The Reconstruction Finance Corporation during November disposed of an additional $7,200,000 of m unicipal issues by public sale to a large number o f security houses which presumably w ill reoffer these securities in the market. These m unicipal bonds represent securities originally acquired by the Public W o rk s Adm inistration as collat eral for loans. United States* Treasury financing during November was entirely in the form o f Treasury bills. Three $50,000,000 issues m atured during the m onth and fou r $75,000,000 issues were sold, so that $150,000,000 of new funds was raised. A verage rates on the November bill issues were from 0.21 to 0.23 per cent, or a trifle higher than the rate on the last issue in October. Business Profits Third quarter net profits of 290 industrial and mer cantile concerns which have issued earnings reports were 28 per cent smaller than in the J u ly to September period of 1933, follow ing a substantial increase over last year in the second quarter. In the A p r il to June period the volume of industrial output was somewhat larger than in 1933, while during the third quarter the Federal Reserve B oard index of industrial production averaged nearly 20 per cent below the high level reached during the corresponding period of 1933. In some cases, how ever, profits were reduced by increased production costs or lower selling prices despite increases in the volume of business. The decline from a year ago in aggregate profits for the third quarter of this year was due principally to smaller earnings of the automobile and oil companies, and to a sizable deficit in the steel industry which devel oped from the low rate of operations. Twelve other groups of companies shown in the table also reported somewhat less favorable earnings, but on the other hand there wrere eight groups of concerns which did relatively better in the third quarter than a year ago. These groups include the building supply, chemical and drug, electrical equipment, office equipment, and tobacco companies, all of which increased their net profits, and also the machinery, railroad equipment, and printing and pub lishing concerns which reported some profits this year against deficits last year. A pproxim ately one-third of all the industrial companies whose statements are avail able had deficits this year, compared with one-fourth of the concerns in the third quarter of last year. F o r the first nine months, the increase in aggregate industrial profits was considerably smaller than for the first h alf of the year, but percentage comparisons are of little significance in view of the fa ct that in the early months of 1933 industrial corporations in general had no net profits. N early all groups of companies have shown some improvement in earnings this year, however, the exceptions being the aviation, clothing and textile, and shipping groups. Compared with earlier years, profits for the nine month period appear to have been slightly above the levels prevailing in 1931, but below those of 1930 and a number of preceding years. Reflecting in part a reduced volume of traffic, net operating income of Class I railroads in the third quarter of this year was 38 per cent smaller than in 1933, and after paym ent of fixed charges there was a combined deficit, as against a moderate net income last year. F o r the nine month period, the Class I railroads as a group failed to cover fixed charges by approxim ately $37,000,000, or by the same amount as in the corresponding period of 1 9 3 3 ; in 1932 the shortage after fixed charges was $164,000,000. N et income of 44 public u tility com panies, other than telephone companies, continued to show a decline from a year previous, which fo r the third quarter amounted to 17 per cent. F o r the first nine months of this year, the net income of these companies wras 10 per cent smaller than in 1933, and 19 per cent smaller than in 1932, although the volume of business done by the public utilities has increased considerably during the past two years. FEDERAL RESERVE AGENT AT NEW YORK (Net profits in millions of dollars) Third Quarter Corporation groups 1931 1932 1933 Automobile.................. 1 4 .6 — 2 0 .4 Automobile parts and acc esso ries (excl. tires) .......................... — 0 .4 — 4 .8 Aviation........................ — 0 .2 — 1 .2 Building supplies. . . . 1 .2 — 1 .6 Chemicals and drugs. 2 7 .0 12.1 Clothing and textiles. 0 .9 0 Coal and coke............ — 0 .9 — 1 .8 Copper.......................... — 1 .2 — 2 .0 Electrical equipment. 9 .5 — 1 .4 Food & food products 3 9 .4 2 7 .8 Household equipment — 0 .8 — 0 .9 Machinery................... — 1 .0 — 2 .5 Metals & mining (excl. copper, coal and coke).......................... 3 .2 1 .5 M otion picture and amusement.............. — 3 .4 — 5 .3 Office equipment. . . . 1 .5 — 0 .3 O il................................... 1 .8 1 0 .7 Paper............................. 0 .2 — 0 .3 Printing & publishing 3 .2 — 0 .1 Railroad equipment.. 2 .2 — 0 . 2 Shipping....................... 0 .5 1.1 Steel................................ — 6 .0 — 3 8 .7 Tobacco......................... 1 .4 0 .7 Miscellaneous.............. 4 .1 9 .0 Total, 290 companies 101.7 — 2 3 .5 162.4 149 Class I Railroads Netoperatingineome Net income................ 165.7 8 8 .2 5 4 .4 — 3 9 .0 186.8 115.9 6 4 .0 — 12 .8 44 Public utilities, ex cept telephone cos. N et income.............. 5 4 .5 4 1 .8 Production First nine months 1934 1931 3 9 .6 17.1 6 .0 0 .9 0 .4 2 5 .5 2 .0 — 0 .4 — 0 .1 1 .3 3 6 .0 0 .6 — 0 .1 3 .0 0 .7 0 .4 2 7 .3 0 — 0 .5 — 0 .2 4 .1 3 5 .1 — 0 .2 1 .2 1 0 .7 — 0 .7 4 .6 8 0 .6 0 .7 — 0 .4 — 2 .2 2 8 .7 12 1 .4 — 0 .9 0 .2 8 .3 7 .6 12.1 1932 1934 8 6 .6 — 8 .8 — 3 .3 — 5 .5 4 1 .9 — 3 .7 — 4 .0 — 4 .7 1.1 8 9 .2 — 2 .8 — 8 .4 6 .9 2 .8 — 3 .8 5 4 .7 2 .4 — 2 .8 — 3 .6 — 0 .7 9 0 .1 — 0 .2 — 5 .0 2 1 .5 1 .2 0 .7 7 8 .2 0 .9 1 .4 — 0 .1 1 4 .0 9 6 .3 0 .8 4 .4 5 .0 15 .4 2 6 .2 0 .2 0 .4 — 2 .3 — 1 0 .7 0 .6 6 .6 1 .0 3 .7 2 .6 2 .0 2 0 .4 — 7 .9 1 9 .8 — 4 0 .2 2 7 .8 — 0 .7 2 .5 0 .9 0 .4 0 .8 5 .5 12 .0 1 .5 1 .5 — 0 .1 — 2 .8 — 4 .9 3 .2 7 .8 — 0 .3 0 .8 1 .1 0 .5 1 .1 1 .3 — 103.2 — 5 1 .3 9 .0 — 2 .7 — 2 0 .6 1 .9 0 .7 1 .2 3 .7 0 .1 1 2 .2 1 0.6 2 7 .8 2 0 .1 1 2 .9 2 .5 9 .7 4 1 .8 1 .6 5 .5 3 .7 0 .6 — 7 .5 2 .8 3 7 .7 4 2 .3 35 .1 107.1 — 1 8 .7 1933 8 2 .5 117.4 3 8 9 .3 0 .1 2 0 2 .8 4 3 0 .5 4 0 1 .2 197.8 3 4 1 .5 3 4 2 .6 8 5 .6 — 164.3 — 3 7 .0 — 3 7 .1 198.9 166.0 149.3 135.1 — Deficit Employment R e su m p tio n of a c tiv ity in th e te x tile in d u s try fo llo w in g th e te rm in a tio n of th e s trik e w as th e p rin c ip a l fa c to r in a s u b s ta n tia l in c re ase in to ta l fa c to ry em p lo y m e n t in th e U n ite d S ta te s fro m th e m id d le of S ep tem b e r to th e m id d le of O ctober. T h e e x te n t of th e rise is in d ic a te d b y a n in c re ase of 4 p e r ce n t in th e seaso n ally a d ju s te d in d e x of fa c to ry em p lo y m e n t co m p iled b y th e F e d e ra l R eserv e B o a rd , fo llo w in g a 7 p e r c e n t decrease in S e p tem b er. E m p lo y m e n t in th e g ro u p of in d u s trie s p ro d u c in g n o n -d u ra b le goods show ed a g a in o f n e a rly 8 p e r c e n t d u rin g th e p e rio d , w h ile th e d u ra b le goods g ro u p re g is te re d a d eclin e o f a b o u t 1 p e r c e n t in w o rk in g forces. I n a d d itio n to th e im p ro v e m e n t in fa c to ry em p lo y m en t, seaso n al g a in s w ere re c o rd e d in w h olesale a n d r e ta il tra d e , a n d in coal a n d m e ta l m in in g , a n d em p lo y m e n t on p riv a te b u ild in g p ro je c ts also in c re ased . T he n e t g a in in p riv a te em p lo y m e n t fro m S e p te m b e r to O ctober w as e stim a te d b y th e S e c re ta ry of L a b o r a t a p p ro x im a te ly 280,000 p erso n s. E m p lo y m e n t on p u b lic w o rk fin an c ed b y fe d e ra l em erg en cy o u tla y s also in c re a se d fro m S ep tem b e r to O ctober. T he e n ro llm e n t in th e C iv ilia n C o n serv atio n C o rp s d u rin g O cto b er w as a b o u t 55,000 h ig h e r th a n in S ep tem b er, a n d n e a rly 25,000 m o re w ere g iv en re lie f w o rk fu rn is h e d b y th e F e d e ra l E m e rg e n c y R elief A d m in is tra tio n . M ean w hile, th e n u m b e r o f w o rk ers on th e p a y ro lls of th e P u b lic W o rk s A d m in is tra tio n show ed a d ecrease o f 30,000, d u e to th e f a c t th a t th e y e a r ’s ro a d b u ild in g p ro g ra m w as n e a rin g co m pletio n. 93 I n N ovem ber, basic in d u s tria l a c tiv ity on th e w hole a p p e a rs to have c o n tin u e d th e reco v ery b e g u n in th e p re c e d in g m o n th , a lth o u g h som e d iv e rs ity of m ov em ent w as e v id e n t in th e o u tp u t of in d iv id u a l in d u strie s. O p e ra tio n s a t steel p la n ts, w h ich u s u a lly slack en d u rin g N ovem ber, th is y e a r show ed a slow b u t ste a d y rise, an d , as th e a c co m p an y in g d ia g ra m in d ic ates, c u rre n t o u tp u t is r u n n in g a h ead of la s t y e a r fo r th e first tim e since J u n e . P ro d u c tio n w as e stim a te d b y th e Iro n A g e a t 26 p e r cen t of c a p a c ity a t th e first of th e m o n th , a n d a t 29 p e r ce n t a t th e en d of th e m o n th as c o m p ared w ith an O ctober av erag e o f 24.6 p e r cen t. B itu m in o u s coal m in in g , w h ich in p re v io u s y e a rs h a s show n no w ell defined seaso n al m ov em ent fro m O cto b er to N ovem ber, in c re a se d fu r th e r , a n d ele ctric p o w er o u tp u t e x p a n d e d season ally . O n th e o th e r h a n d , au to m o b ile o u tp u t re a c h e d a seasonal low p o in t in N o vem b er, w ith n e a rly h a lf of th e la rg e r p la n ts in th e in d u s try s h u t d ow n as p re p a ra tio n s w ere b e in g m ad e fo r m od el ch anges. T h e te x tile in d u s try a p p a re n tly show ed no f u r th e r reco v ery in N ovem ber, as a v ailab le w eekly fig u res in d ic a te th a t m ill co n su m p tio n of co tto n w as scarce ly m a in ta in e d a t th e O ctober ra te . T he u p tu r n in m a n u fa c tu rin g o u tp u t in O ctober, fo l lo w in g fo u r m o n th s of recession, re s u lte d in a 2 p o in t rise in th e F e d e ra l R eserv e B o a r d ’s seaso n ally a d ju s te d in d e x of in d u s tria l p ro d u c tio n to 73 p e r c e n t of th e 1923-25 av erag e. T h e re co v ery in th e te x tile lin es fo l lo w in g th e te rm in a tio n o f th e strik e w as th e d o m in a n t fa c to r in th e in c re a s e ; a v erag e d a ily co n su m p tio n of co tto n b y th e m ills e x p a n d e d 51 p e r ce n t fro m S ep tem b e r to O cto b er to a p p ro x im a te ly th e lev el of la s t M ay, w ool m ill a c tiv ity in c re a se d a b o u t 50 p e r cent, a n d m ill con s u m p tio n of silk in c re a se d 39 p e r cent. S teel o u tp u t w as e n la rg e d so m ew h at fo r th e first tim e since M ay, zinc sm eltin g o p e ra tio n s rose sh a rp ly , a n d m ach in e tool o rd e rs in c re a se d to th e h ig h e st lev el in five m o n th s. O n th e o th e r h a n d , a c tiv ity a t m e a t p a c k in g p la n ts reced ed fro m th e u n u su a lly h ig h lev el of p re v io u s m on ths. A u to m o b ile o u tp u t d e creased so m ew h at m o re th a n seaso n ally , a n d th e in creases in b itu m in o u s a n d a n th ra c ite coal p ro d u c tio n w ere of less th a n th e u s u a l seasonal p ro p o rtio n s. T he seaso n ally a d ju s te d in d e x of tobacco m a n u fa c tu re s r e ceded s lig h tly in O cto b er fo r th e th ir d successive m o n th . PERCENT 1S>34 - \ / / / / t /I / i / 1I f \ \ w \ V s / / / r ✓ ,- ^ s * / 1 93>3 Ratio of Steel Production to Theoretical Capacity (Iron Age data) MONTHLY REVIEW, DECEMBER 1, 1934 94 PER CENT (Adjusted for seasonal variations and usual year to year growth) 90~ 1933 1934 80 Oct. Aug. Sept. Oct. 44 52 55 67 34 32 38 48 30 32 45 52 30 34 47 65 40 52 41 82 33 78 76p 62 61 72 69 66 58 68 67 65 67 72 67 64 64p 65 p 61p 67 p 64 63p 56 45p 46 69p 80p 82 64 p 67 401________________ .________ , 95 94 72 73 53 76 91 82 p Index of Railroad Loadings of Miscellaneous and Less than Carload Freight (Federal Reserve Bank of New York index, adjusted for seasonal variation and long term growth) 94 74 71 74 132 77 77 82 146 81 73 80 123 80 75 78 30 62 37 74 34 39 52 39 73 34 43 54 36 75 34 39 Metals Pig ir o n ................................ Steel...................................... Lead....................................... Z in c ...................................... 70 Automobile Passenger ca rs...................... M otor trucks........................ Fuels Bituminous coal................... Anthracite coal.................... Petroleum, crude................. Petroleum products............ Electric p ow er...................... 66 Textiles and Leather Products Cotton consum ption........... W ool mill a ctiv ity .............. Silk consum ption................ R ayon deliveries................. Shoes...................................... 88 46 83 Foods and Tobacco Products Meat packing....................... Wheat flour........................... Refined sugar deliveries. . , Tobacco products................ 60 50 1 1 1 1 1 1. 1931 1932 p Preliminary Indexes of Business Activity A v a ila b le d a ta on th e d is trib u tio n of goods in th e first h a lf of N o vem b er co m p a re d fa v o ra b ly writh O cto b er figures. L ess th a n th e u s u a l seaso n al d eclin e o c c u rre d in th e m o v em en t of m e rc h a n d ise a n d m iscellan eo u s fre ig h t over th e ra ilro a d s, a n d th is b a n k ’s seaso n a lly a d ju s te d w eekly in d e x , show n in th e ac co m p an y in g d ia g ra m , ad v a n c e d m o d e ra te ly in N ovem ber. A sm a lle r th a n sea so n al re d u c tio n also o c c u rre d in th e m o v em en t o f b u lk f re ig h t over th e ra ilro a d s, ow ing to in c re a se d coal lo a d ings. D e p a rtm e n t sto re sales in th e M e tro p o lita n a re a of N ew Y o rk show ed a n e x p an sio n of a b o u t th e u su a l seaso n al p ro p o rtio n s. I n O ctober, so m ew h at less th a n th e u s u a l seasonal e x p an sio n o c c u rre d in th e volu m e of r e ta il tra d e . A m o n g th is b a n k ’s seaso n a lly a d ju s te d in d ex es, r a th e r p ro n o u n c e d declin es w ere show n in those co v erin g m a il o rd e r hou se a n d c h a in sto re sales, fo llo w in g s h a rp in c re ases in th ese lin es in th e p re v io u s m o n th . T h e recessio n a p p e a rs to h a v e b een la rg e ly in r u r a l areas, w h ich in th e p rev io u s m o n th show ed la rg e in creases in sales. R e ta il sales of au to m o b iles in th e c o u n try as a w hole show ed no m a te r ia l ch an g e o th e r th a n seasonal. S ev eral o f th e m o re g e n e ra l bu sin ess in d ic a to rs also d e clin ed so m ew h at in O ctober. A less th a n seaso n al in c re ase o c c u rre d in th e volu m e of check tra n s a c tio n s , a n d re d u c tio n s o c c u rre d in ra ilro a d lo a d in g s of b u lk f re ig h t a n d in th e in d ex es of fo re ig n tra d e . T h e in d e x of m e rc h an d ise a n d m iscellan eo u s c a r lo ad in g s, one of th e b e st g e n e ra l b u sin ess in d ex es, how ever, w as u n c h a n g e d fro m S ep tem b e r to O ctober. 1933 56p 32 71 37 -.1 - 1933 i 1934 (Adjusted for seasonal variations, for usual year to year growth, and where necessary for price changes) Miscellaneous C em ent.................................. T ires....................................... Lum ber................................. Newsprint p a p er................. Machine tools..................... 1 1 .. 1. . .. i. 1934 Oct. Aug. Sept. Oct. 56 56 53r 64r 76 56 58 51r olr 94 55 58 51r 57 r 55 54 4 7r 51 r 78 74 r 71 r 65 86r 75 56 P rim a ry Distribution Car loadings, merchandise and m isc.. . Car loadings, oth er.................................. Exports r ................................................................ Imports r ............................................................... Wholesale tra d e........................................ Distribution to Consumer Department store sales, U. S ................. Department store sales, 2nd D ist......... Chain grocery sales.................................. Other chain store sales r ............................... Mail order house sales............................ Advertising................................................ New passenger car registrations........... Gasoline consumption............................. 71 74 74 78 r 70 56 51 71 74 66 79r 71 72 52p 63 77 r 70 58 53 p 61 43 60 41 57 p 38 41 61 78p 47 25 58 67 60 55 72 General B usin ess Activity Bank debits, outside New York C it y .. Bank debits, New York C ity..................... Velocity of demand deposits, outside New York C it y .................................................. \eIocity of demand deposits, New York C it y . ........................................................... New life insurance sales.............................. Factory employment, United States........ Business failures............................................ Building contracts........................................ New corporations formed, N. Y . State.. . Real estate transfers.................................... 57 46 56 64 79 56 29 69 44 48 62 80 44 45 60 75 42 63 48 59 50 General price level*...................................... Composite index of w ages*............. .. Cost of living*............................................... 133 177 136 138 182 138 p Preliminary r Revised 77 63 21 21 139 179 139 139p 179p 139 : 1913 average=100 Building Som e in c re ase in th e p ro sp e c tiv e a c tiv ity of th e con s tru c tio n in d u s try w as in d ic a te d d u rin g O cto b er b y a n u n sea so n al in c re ase in th e ra te a t w h ich b u ild in g a n d e n g in e e rin g c o n tra c ts w ere a w a rd e d . T h is b a n k ’s season a lly a d ju s te d in d e x rose to 25 p e r ce n t of th e lo n g te rm ra te of g ro w th , a f te r h a v in g h e ld a ro u n d 21 p e r ce n t since A p ril. A m o re th a n seaso n al rise in th e a m o u n t of re s id e n tia l c o n tra c ts c o n trib u te d to th e O cto b er in c re ase in to ta l c o n tra c ts. R e sid e n tia l c o n tra c ts w ere 36 p e r ce n t a h e a d of th e S ep tem b e r volum e, on a n av erag e d a ily basis, a n d w ere also som ew hat la rg e r th a n a y e a r ago 95 FEDERAL RESERVE AGENT AT NEW YORK fo r th e first tim e since A p ril. T h e g a in s in re s id e n tia l c o n tra c ts w ere w id ely d is trib u te d , g e o g rap h ic ally . W h ile H o m e O w n ers L o a n C o rp o ra tio n im p ro v em en ts a n d w o rk fin an ced b y lo an s a rra n g e d u n d e r th e p ro g ra m of th e F e d e ra l H o u sin g A d m in is tra tio n a re in c lu d e d a t le a st in p a r t in th e c o n tra c t to ta ls, th e y do n o t a p p e a r to h av e been a d o m in a n t fa c to r in th e O cto b er e x p an sio n in re sid e n tia l b u ild in g . A la rg e r p a r t of th e in c re ase in to ta l c o n stru c tio n co n tra c ts fro m S ep tem b e r to O cto b er w as d u e to p u b lic w o rk s a n d u tility p ro je c ts, w h ich show ed a n u n sea so n al rise of ab o u t 20 p e r cent. O th e r n o n -re sid e n tia l c o n tra c ts w ere s lig h tly sm aller in O cto b er th a n in th e p re v io u s m o n th . I n th e ag g re g ate , c o n tra c ts fo r p u b lic ly fin an ced b u ild in g , w h ile la rg e r th a n in im m e d ia te ly p re c e d in g m o n th s, w ere in sm aller volu m e th a n a y e a r ago. P riv a te ly fin an ced c o n stru c tio n , on th e o th e r h a n d , w as n o t o n ly la rg e r th a n in th e tw o p re c e d in g m o n th s, b u t w as also so m ew h at la rg e r th a n a y e a r ago. F o r th e first te n m o n th s of 1934, th e to ta l of re p o rte d c o n stru c tio n c o n tra c ts a m o u n te d to $1,339,000,000, a g a in of $453,000,000 over th e c o rre sp o n d in g p e rio d of 1933. P u b lic w o rk s a c co u n ted fo r $248,000,000 of th e in crease, p u b lic u tilitie s fo r $43,000,000, o th e r n o n re s id e n tia l b u ild in g — m o stly e d u c a tio n a l a n d co m m ercial b u ild in g — fo r $150,000,000, a n d re s id e n tia l c o n stru c tio n fo r $12,000,000. P u b lic fu n d s fin an ced p ra c tic a lly a ll o f th e in c re ase in b u ild in g d u rin g th is p e rio d , th e in crease in p riv a te ly fin an ced c o n stru c tio n a m o u n tin g to o n ly $15,000,000. D u rin g th e first h a lf of N o vem b er, all classes of con tr a c ts w ere in sm aller volu m e th a n in O ctober. T he a m o u n t of p u b lic w o rk s a n d u tility c o n tra c ts w as w ell m a in ta in e d , how ever, c o n sid e rin g th e season of th e y e a r. T h e R eal P r o p e rty In v e n to ry of 1934 co n d u c te d b y th e B u re a u of F o re ig n a n d D o m estic C om m erce, w ith th e a id of th e B u re a u of th e C ensus, d iv u lg e d som e im p o r ta n t d a ta c o n cern in g u rb a n h o u sin g co n d itio n s in th e U n ite d S tate s. T he re p o rt show ed th a t n e a rly 50 p e r ce n t of th e fa m ily d w ellin g u n its ca n v assed w ere over 20 y e a rs o ld ; th a t a b o u t 8 p e r c e n t of th e u n its w ere v a c a n t; a n d th a t fo r th e o ccu p ied sp ace o v ercro w d in g w as re p o rte d in 17 p e r ce n t of th e cases. A b o u t 44 p e r ce n t of th e s tru c tu re s w ere in n e ed of m in o r re p a irs , 16 p e r c e n t in n e ed of m a jo r re p a irs , a n d 2 p e r ce n t w ere liste d as u n fit fo r use. I n su m m a ry , th e re p o rt in d ic a te d la rg e o p p o rtu n itie s fo r e x p e n d itu re s on rep la cem e n t, re n o v a tio n , a n d m o d e rn iz a tio n of houses, su ch as are now b e in g fo ste re d by th e p ro g ra m of th e F e d e ra l H o u s in g A d m in is tra tio n . Foreign Trade E x p o rts of m e rc h a n d ise fro m th e U n ite d S ta te s d u rin g O cto b er am o u n te d to $206,000,000, a g a in of 8 p e r ce n t over th e p re c e d in g m o n th , a n d g e n e ra l im p o rts w ere v a lu e d a t $130,000,000, a d eclin e of 2 p e r c e n t fro m th e S ep tem b e r figu re. T he re s u ltin g fa v o ra b le b a lan ce of tra d e a m o u n tin g to $77,000,000 w as th e la rg e st th a t h as o c c u rre d since N o vem b er 1930. I n th e case of ex p o rts, th e in c re ase fro m th e p re v io u s m o n th w as less th a n th e u s u a l seaso n al ex p an sio n , a n d in th e case of im p o rts th e declin e w as c o n tra ry to seaso n al ten d en c y . C o m p a re d PER CENT AGRICULT URAL /v /N /\ v ............ . 1 " \A J NOh JAGRICUL1rURAL 1 1932 1 .. -..J ....... 1......... 1........ 1933 J 1 1 1 ...... _ 1934 Indexes of the Quantity of Agricultural and Non-Agricultural Exports (Department of Agriculture index for agricultural exports; non agricultural index derived from Department of Commerce index of total exports. Unadjusted for seasonal varia tion; 1923-25 averages 100 per cent) w ith a y e a r ago, e x p o rts c o n tin u e d to show a n in crease, w hich, how ever, w as re d u c e d in O cto b er to o n ly 7 p e r cent, th e sm allest y e a r to y e a r g a in since J u n e 1933. Im p o rts, as in th e th re e p re c e d in g m o n th s, w ere below th e re la tiv e ly h ig h fig u res fo r th e c o rre sp o n d in g p e rio d of 1933, th e O cto b er d eclin e a m o u n tin g to 14 p e r cent. In d ex es of th e q u a n tity of a g ric u ltu ra l a n d n o n a g ric u ltu ra l e x p o rts, show n in th e ac co m p an y in g d ia g ra m , in d ic a te th a t th e vo lu m e of a g ric u ltu ra l ex p o rts show ed a s lig h t d o w n w a rd te n d e n c y in 1933 w h ich has becom e m ore p ro n o u n c e d in 1934, w h ile th e volu m e of n o n -a g ric u ltu ra l e x p o rts h as e x p a n d e d r a th e r con siste n tly since e a rly in 1933. A m o n g th e a g ric u ltu ra l ex p o rts, co tto n a n d tobacco a re th e m ost im p o rta n t com m o d ities, a n d in n o n -a g ric u ltu ra l ex p o rts, au tom obiles, c ru d e a n d refin ed p e tro le u m a n d m e tals a re th e la rg e st co m ponents. D a ta a v ailab le fo r in d iv id u a l co m m odities in d ic a te a c o n tin u a tio n d u rin g O cto b er of th e ten d en c ies show n in th e d ia g ra m . C o m p a re d w ith a y e a r ago, e x p o rts of c o p p er in O ctober in c re a se d a b o u t 75 p e r c e n t in q u a n tity a n d 50 p e r ce n t in v a lu e ; th e n u m b e r of p a sse n g e r a u to m obiles a n d tru c k s sh ip p e d a b ro a d in c re a se d a little over 35 p e r c e n t; a n d e x p o rts of c o tto n clo th g a in e d a b o u t o n e -fo u rth , b o th in v o lu m e a n d v alu e. O n th e o th e r h a n d , th e q u a n tity of ra w c o tto n sh ip p e d ab ro a d , w h ile show in g a seaso n al in c re a se o v er S ep tem b e r, re m a in e d 40 p e r ce n t less th a n a y e a r ago, re d u c tio n s o c c u rrin g in e x p o rts to a ll of th e m a jo r im p o rtin g co u n trie s ex cep t J a p a n . E x p o rts of u n m a n u fa c tu re d tobacco show ed a slig h t decrease fro m a y e a r ago in volum e, a lth o u g h th e v a lu e w as 75 p e r c e n t la rg e r, d u e to h ig h e r p rices. S h ip m e n ts of m e a t p ro d u c ts w ere 13 p e r ce n t sm aller in q u a n tity , b u t w ere v a lu e d s lig h tly h ig h e r th a n a y e a r ago. A s in th e case of e x p o rts, a la rg e in c re ase c o m p ared w ith O ctober 1933 o c c u rre d in im p o rts of co p p er. Im p o rts of s u g a r w ere 40 p e r ce n t la rg e r in a m o u n t a n d 23 p e r ce n t g re a te r in v alu e. R ece ip ts o f c ru d e ru b b e r, a lth o u g h c o n tin u in g in s u b s ta n tia lly sm a lle r vo lu m e th a n la s t y e ar, w ere 30 p e r ce n t h ig h e r in v alu e. Im p o rts of coffee w ere in p ra c tic a lly th e sam e q u a n tity as in 1933, 96 MONTHLY REVIEW, DECEMBER 1, 1934 b u t w ere 20 p e r c e n t la rg e r in v alu e. R e ce ip ts o f ra w silk, how ever, w ere o n ly a b o u t 75 p e r c e n t as la rg e in q u a n tity a n d 50 p e r ce n t as la rg e in v a lu e as la s t y e ar. la rg e r th a n la s t y e a r. C ollections c o n tin u e d h ig h e r th is y e a r th a n a y e a r ago b o th in d e p a rtm e n t a n d a p p a re l stores. Commodity Prices F o llo w in g th e d o w n w a rd m o v em en t th a t h a d been in p ro g re ss sin ce th e e a rly p a r t of S ep tem b e r, p ric e s of fa rm p ro d u c ts a d v a n c e d so m ew h at d u rin g N ovem ber. T he m o st p ro n o u n c e d in c re ase o c c u rre d in th e cash p ric e of c o rn w h ich rose 1 6 % cen ts to 94 ce n ts a b u sh e l a t C hicago, th u s re a c h in g th e h ig h e st lev el in fo u r y e ars. A r a th e r sizable a d v a n c e w as also sh o w n in ra w su g a r, th e p ric e of w h ich a d v a n c e d 2 6 % p o in ts to 3 .08% cen ts a p o u n d . P ric e s of h id e s a n d liv esto ck reco v ered s lig h tly , a n d c o tto n ad v a n c e d to th e h ig h e st p ric e since th e la tte r p a r t o f S ep tem b e r. D iv erse m o v em en ts w ere a p p a r e n t in th e p ric e s of m e tals d u rin g N o vem b er. S c ra p steel a t P itts b u r g h ad v an c ed $0.75 f u r th e r to $11.25 a to n , th e h ig h e st level since A u g u st. T h e p ric e of silv er a t N ew Y o rk also rose d u rin g th e co u rse of th e m o n th re a c h in g 5 5 % cen ts a n ounce, a new h ig h fo r th e p a st five y e ars, a n d closed th e m o n th w ith a n e t g a in of 2 % cen ts o ver th e en d of O ctober. Som e d ecline, on th e o th e r h a n d , w as show n in th e p ric e s o f le a d a n d zinc. A m o n g o th e r im p o rta n t basic co m m odities, th e p ric e of ra w silk ro se 16 ce n ts to $1 .3 4 % a p o u n d , th e h ig h e st p ric e in seven m o n th s, w h ile ru b b e r w as f a ir ly s te a d y d u rin g N ovem ber. Percentage change October 1934 compared with October 1933 Per cent of accounts outstanding September 29 collected in October Locality N et sales Stock on hand end of month 1933 1934 + 9 .1 + 8 .4 + 5 .8 + 3 .0 + 4 .3 + 1 1 .4 + 6 .0 — 4 .5 + 3 .0 + 3 .3 + 6 .9 + 9 .8 — — — — — — — 9 .1 8 .1 1 4 .4 1 3 .2 9 .2 2 .9 1 0.1 4 7 .7 4 3 .8 4 4 .0 3 0 .1 3 8 .8 3 6 .7 3 0 .3 5 0 .2 4 7 .5 4 5 .6 3 7 .6 4 3 .6 4 1 .9 3 0 .1 All department stores............................ + 8 .1 — 9 .3 4 3 .0 4 6 .3 Apparel stores........................................... + 1 1 .3 + 1 5 .5 4 4 .4 4 6 .6 New Y o rk ................................................................. Northern New Jersey.......................................... Bridgeport................................................................ Elsewhere................................................................. Northern New York S tate............................ Southern New York S ta te............................ Hudson River Valley D istrict..................... Capital D istrict................................................. Westchester and Stamford............................ Wholesale Trade O ctober sales of th e re p o rtin g w h olesale firm s in th is d is tric t a v e ra g e d 16 p e r c e n t h ig h e r th a n a y e a r ago, th e m ost fa v o ra b le co m p ariso n since la s t M ay, w h en a n in crease of a b o u t th e sam e p ro p o rtio n s o c cu rred . T he g a in s in sales show n b y th e d ru g , h a rd w a re , p a p e r, Department Store Trade d iam o n d , a n d je w e lry re p o rtin g firm s m ad e th e b est D u rin g th e first h a lf of N ovem ber, sales of th e r e p o rt co m p ariso n s w ith a y e a r ago since la s t s p rin g , a n d in th e in g d e p a rtm e n t sto res in th e M e tro p o lita n a re a of N ew case of th e g ro ce ry co ncerns, th e in c re ase over la s t y e a r Y o rk w ere 8 p e r ce n t h ig h e r th a n in th e co rre sp o n d in g even e x c lu d in g liq u o r sales am o u n te d to 11 p e r cent, p e rio d a y e a r ago, a n d ex clu d in g liq u o r sales fro m th is w h ich w as th e la rg e st in c re ase on th is b asis since M arch . y e a r ’s fig u res th e in c re ase am o u n te d to alm o st 6 p e r S ales of silk goods, re p o rte d on a y a rd a g e b asis b y th e cen t. T h e re p o rts in d ic a te a b o u t th e u s u a l seaso n al ex N a tio n a l F e d e ra tio n of T ex tiles, show ed th e la rg e st y e a r to y e a r ad v an c e since J u ly 1933. O th e r w h olesale lin es p a n sio n fro m O cto b er to N ovem ber. re p o rte d in creases in sales, ex cep t th e shoe g ro u p I n O ctober, to ta l sales of th e re p o rtin g d e p a rtm e n t walso hose sales w ere s lig h tly sm a lle r th a n a y e a r ago. sto res in th is d is tric t w ere 8 p e r c e n t h ig h e r th a n a S tocks of m e rc h an d ise on h a n d w ere above a y e a r ago y e a r ago, a n d a f te r allo w in g fo r one m o re sh o p p in g d a y th is y e a r th e ad v an c e a m o u n te d to ab o u t 4 p e r cen t, th e in n e a rly all of th e lin es re p o rtin g th ese fig u res. C ollec la rg e st y e a r to y e a r g a in in sales since la s t M ay. E x tio n s a v e ra g e d c o n sid erab ly h ig h e r th is y e a r th a n la st. clu sive of liq u o r bu sin ess, th e in c re ase in O ctober to ta l sales w as 6 p e r cen t. O n a n av erag e d a ily basis, sales Per cent of of th e N ew Y o rk a n d C a p ita l D is tric t d e p a rtm e n t sto res Percentage < accounts change |f outstanding show ed th e la rg e s t in c re ases since M ay, a n d sales of th e October 1934 . September 29 compared with collected in R o ch ester, S y rac u se, N o rth e rn N ew J e rse y , a n d B rid g e October 1933 October p o rt d e p a rtm e n t sto res co m p ared m ore fa v o ra b ly w ith Commodity a y e a r ago th a n in th e p a s t tw o o r th re e m o n th s. T he Stock Net end of r e p o rtin g sto res in W e stc h e ste r a n d S ta m fo rd h a d a month 1933 1934 sales la rg e r volu m e of sales th a n a y e a r ago fo llo w in g a d e + 2 8 .2 + 1 4 .9 8 9 .1 9 9 .8 crease la s t m o n th . I n th e o th e r lo c alities co v ered by th e M en’s clothing........................................................ + 1 3 . 9 3 5 .1 4 3 .1 + 3 .2 3 4 .0 4 0 .8 re p o rts th e y e a r to y e a r co m p ariso n s fo r av erag e d a ily 5 8 .0 6 7 .1 + 2 8 . 8 * + 5 .7 * sales w ere less fa v o ra b le in O cto b er th a n in S ep tem b e r. — 1 .0 + 2 2 .7 3 2 .7 2 5 .8 + 1 0 .8 D r u g s ........................................................................ T o ta l sales of th e le a d in g a p p a re l sto res in th is d is tric t 5 0 .4 4 5 .3 + 1 7 .2 + 1 6 .8 4 4 .3 4 5 .7 w ere 11 p e r c e n t h ig h e r th a n a y e a r ago, b u t on a n Paper ................................................................. ++ 68 .2.0 4 8 .6 4 2 .7 J 2 1 .1 — 2 .5 \ 1 8 .8 av erag e d a ily basis th e in c re ase w as s lig h tly less th a n + 1 9 .1 + 2 7 .2 Jewelry...................................................................... + 4 .1 in th e p rev io u s m o n th . 6 1 .7 5 3 .9 Weighted average........................................ + 1 6.3 D e p a rtm e n t sto re stocks of m e rc h an d ise , a t r e ta il v a lu a tio n , w ere sm aller th a n a y e a r ago fo r th e th ir d * Quantity figures reported by the National Federation of Textiles, Incorporated, co nsecu tiv e m o n th , w h ile a p p a re l sto re stocks co n tin u e d not included in weighted average for total wholesale trade. FEDERAL RESERVE BANK OF NEW YORK M O NTH LY REVIEW , DECEMBER 1, 1934 B u sin ess C o n d itio n s in th e U n ite d S ta te s (Summarized by the Federal Eeserve Board) OLUME of industrial production and factory employment, which usually shows little change at this season, increased in October, reflecting chiefly the resumption of activity at textile mills. Wholesale commodity prices, after declining in September and October, advanced in the first half of November. V I n d u s t r ia l P r o d u c t io n Index Number of Production of Manufactures and Minerals Combined, Adjusted for Sea sonal Variation (1 9 23 -2 5 average = 100 per cent) and E mploym ent Activity at industrial establishments, as measured by the Board's season ally adjusted index, showed an increase from 71 per cent of the 1923-1925 average in September to 73 per cent in October. Among the industries pro ducing durable manufactures, output at steel mills increased from 23 per cent of capacity for the month of September to 25 per cent for October, while output of automobiles and lumber declined. In November activity at steel mills continued to increase and in the week ended November 24 was at about 28 per cent of capacity. Automobile production has declined further in con nection with the preparation of new models. The production of non-durable manufactures in the aggregate showed a considerable growth in October, reflecting sharp increases at cotton, woolen, and silk mills, offset in part by a decline in activity at meat packing establishments. The increase in output at textile mills after the strike in September brought output to a higher level than in August. Among the minerals, daily output of crude petroleum de clined in October and that of anthracite increased by an amount smaller than is usual at this season. Factory employment and payrolls in the country as a whole increased con siderably between the middle of September and the middle of October. Sharp increases were reported at mills producing textile fabrics, while in the auto mobile, shoe, and canning industries there were declines of a seasonal nature. The value of construction contracts awarded was somewhat larger in October than in any other recent month. There was an increase in residential work as well as in publicly financed projects. A g r ic u l t u r e Index of Factory Employment with Adjustment for Seasonal Variation (1 9 23 -2 5 average = 100 per cent) Department of Agriculture estimates, based on November 1 conditions, indicate a cotton crop of 9,634,000 bales, 26 per cent smaller than the 1933 crop, and a corn crop of 1,372,000,000 bushels, 41 per cent smaller than last season and 45 per cent smaller than the 1927-1931 average. The tobacco crop is also considerably smaller than usual, while the white potato crop is slightly above the five year average. D is t r i b u t io n The number of freight cars loaded per working day decreased from Sep tember to October. Department store sales showed a seasonal increase and were at about the same level, on a seasonally adjusted basis, as in most other months since March. Rural sales of general merchandise, as reported by the Department of Commerce, increased by less than the usual seasonal amount following an unusually large increase in September. C o m m o d i t y P r ic e s Indexes of Daily Average Value of Department Store Sales ( average=:100 per cent) 1923-25 Wholesale commodity prices, as measured by the Bureau of Labor Statis tics weekly index, declined from 77.8 per cent of the 1926 average in the week ended September 8 to 76.0 per cent in the week ended November 3 and then rose in the following two weeks to 76.7 per cent. The decline was largely in prices of farm products and foods but there were also some decreases in the prices of textiles and building materials. Increases in the first half of November were largely in the prices of farm products. The price of scrap steel also advanced, while lead and zinc declined. B a n k C r e d it Wednesday Figures for Reporting Member Banks (Latest figures are for November 14) Excess reserves of member banks were about $1,910,000,000 on November 21, showing an increase of $150,000,000 in the preceding five weeks. The increase in reserves held was $200,000,000, of which $50,000,000 covered a growth in required reserves. Additions to reserves resulted mainly from gold imports and further issues of silver certificates. Loans and investments of reporting member banks in leading cities de clined somewhat in the four weeks ended November 14, following an in crease in the previous month. Substantial declines were shown in loans on securities and in holdings of securities other than those of the United States Government. Other loans, which had increased considerably in previous months, also showed some decline, while holdings of direct obligations of the United States Government and of securities fully guaranteed by the Govern ment increased considerably. Customers ’ deposits continued to increase, while Government deposits declined. There was a further decline in open market rates on bankers acceptances at the end of October to an offering rate of % per cent. Yields on short term Government securities and other short term open market money rates showed little change.
@FedFRASER