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M O NTHLY R E V IE W of Credit and Business Conditions Second Federal Reserve District FederalEeserveBank,NewYork December1,1941 their customers, i.e., certainforeignaccountsusedbal ancesondeposit withtheFederal ReserveBanktopay OnNovember1,theincreaseinpercentagesofrequired forTreasurybillsawardedtothem,andbanksandother reservesagainst memberbankdeposits, whichhadbeen investorsinpartsof thecountryoutsideNewYorkCity announcedonSeptember 24, went into effect. Excess also were awarded substantial amounts of the new reservesof CentralReserveNewYorkCitybanks, which Treasurybill issues. hadamountedto$1,345,000,000onthepreviousweekly Meanwhile, furtherincreasesincurrencyoutstanding report date, October 29, dropped to $915,000,000 on duringNovembercontinuedtoabsorbmoderateamounts November 1, largely as aresult of therise inreserve o f bankreservesinNewYork. Furthermore, therewas requirements, andonNovember5amountedto$775,000,- so enet reductionintheamount of out-of-townbank 000. Astheaccompanyingdiagramindicates, thisamount bam la ces heldinNewYork City banks, althoughthe wasover$1,000,000,000lessthantheexcessreservesheld amon u t of thedeclinewasmuchlessthaninthethree inSeptemberand$2,800,000,000lessthanattheJanuary weeksne ndedNovember5. highpointoftheyear. T h e a orptionof alargepart of thenewissues of Excess reserves of member banks outside NewYork Treasurybsb by buyers outside NewYorkwas pro City declined from$3,255,000,000 on October 29 to motedbyaills r i s e yields, whichforthelast twoissues $2,635,000,000onNovember5. As is evident fromthe inNovemberavein r a g dslightlyabove%of onepercent. diagram, however, excess reserves outside NewYork This rise inyieldsea ppears to have been attributable Cityhadnot previouslydeclinedas theyhadinNew to several factors: th crease inthe amount of the YorkCity, but hadremainedfairlysteadyat about the weekly issue of Treaseurin y ills from$100,000,000 to same general level as at the opening of the year. $150,000,000 andthento $b 2 00,000,000; the recent in Virtuallyall ofthedeclineinthetotal ofexcessreserves creaseinmemberbankreserve requirementpercentages, of all memberbanksinthefirst tenmonthsof theyear whichespeciallyaffectedtheN Yorkmoneymarket represented a rapid shrinkage in the excess reserves becauseof thepreviouslosses oefw r e servefunds suffered heldbyNewYorkCitybanks. b y N e w Y o r k b a n k s ; a n d p e r h a p s alsothe longrange ThefigurestowhichexcessreservesdeclinedonNovem ber5provedtobethelowestforanystatement datein November, bothinthecaseof theNewYorkCitybanks andother member banks. Inthe threeweeks between November 5andNovember 26, excess reserves inNew York City rose by $315,000,000 to reach a figure of $1,090,000,000, as comparedwith$1,300,000,000 imme 6 diatelybeforetheincreaseinreserverequirement per centages went into effect. The rise inreserves during this threeweekperiodof November is tobeexplained 5 bygainsof fundsthroughtwoprincipal typesof trans actions. First, there was aninflowof funds to New Yorkfromotherparts of thecountrythroughcommer cial andfinancial transactions, asfrequentlyoccursdur ing the middle part of the month. Second, Treasury 3 disbursements of funds inNewYorkfromits deposits 2 attheReserveBank, duringaperiodwhennonewissue ofGovernmentsecurities (otherthanTreasurybills) was sold,exceededreceiptsoffundsintheTreasuryaccount. 1 To some extent Treasury cashreceipts fromthe New Yorkmarket werelimitedbythefact that largeparts O oftheweeklyissuesofnewTreasurybillswereacquired by bidders other thanthe NewYork City banks and M on ey M a r k e t in N o v e m b e r Bl LLIONS OF DOLLARS 7 4 Excess Reserves Held by Member Banks MONTHLY REVIEW, DECEMBER 1, 1941 90 prospect for increased Treasury borrowings resulting almost entirelyanadditiontoholdingsof banksoutside fromfurther enlargement of theNational defensepro NewYork, andoccurred at atime whenthe volume gram. The heavier takings of Treasury bills by pur of bills outstanding was expanding by $250,000,000. chasers other than NewYork City banks appear to Reporting bankholdings of municipal, corporate, and indicate that the Treasurybill market mayserve as a other securities declined $78,000,000 during the four mechanismtoaffordfluiditytothesupplyof funds, as weeks under review, reflecting principally municipal betweenindividual banks andasbetweenvarious parts securitymaturities. of the country. In the past, the stockexchange call Commercial loan expansion during the four weeks loan and bankers acceptance markets were the prin endedNovember 19, amountingto$76,000,000, wasless cipal marketsthroughwhichadjustmentsinthesupply thanhalf thatintheprecedingfourweeks. Bankhold of funds, as betweenindividual institutions andasbe ings of openmarket paper increasedslightly further, tweenNewYorkandtherestofthecountry,wereaccom whilesmall reductionsinsecurityloans andreal estate plished. Thepresentvolumeofbusinessinthesemarkets loansexceededariseof $10,000,000in“other” loans. issosmall astomaketheminadequateforthepurpose. Adjusted demand deposits of the weekly reporting InadditiontotheriseinTreasurybillratesinNovem banks declinedsomewhat further fromthe October 15 ber, therewasalsoafurthermoderateriseinyields on peak during the two weeks ended November 5, and Treasurynotes, andothersecurities of comparablema despiteasubsequent upturnremainedonNovember 19 turity, butnoincreaseoccurredinsuchshorttermrates about $450,000,000 belowthe October 15 total. Mean asthoseonbankersacceptances, openmarketcommercial while, UnitedStatesGovernment depositsinthereport paper, and over-the-counter bank loans to customers, ingbanksrose$130,000,000, reflectingcreditsestablished whichhave beenwell above the yields onshort term onthebooksof thesebankstotheaccount of theTreas Government securities. In summary, it appears that ury, inpayment for purchases of Treasury bills, tax to the extent that the November increase in reserve anticipation notes, and savings bonds. Deposits in requirementpercentageshasbeenaninfluenceonmoney reporting NewYork City banks of out-of-town corre rates, thisinfluencehasbeenmanifestedlargelyinyields spondent banks andsome local banks, after declining onshort termGovernment securities, which over the $311,000,000betweenOctober 15 andNovember 5 (the past fewyears haddeclinedto disproportionately low periodduring whichalarge issue of Treasury bonds levelsunderthepressureofincreasingexcessreserves. was sold andbanks were adjusting their positions to meettheNovember1increaseinreserverequirements), showed a further net reduction of $53,000,000 by November26. Money Rates in New York Nov. 30, 1940 Oct. 31, 1941 Nov. 29, 1941 Stock Exchange call loans....................... Stock Exchange 90 day loans................. Prime commercial paper— 4 to 6 months Bills— 90 day unindorsed......................... Yield on M per cent Treasury note due March 15, 1945 (tax exempt)............. Average yield on taxable Treasury notes (3-5 years).............................................. Average yield on tax exempt Treasury bonds (not callable within 12 years). Average yield on taxable Treasury bonds (not callable within 12 years)............. Average rate on latest Treasury bill sale 91 day issue............................................ Federal Reserve Bank of New York dis count rate................................................ Federal Reserve Bank of New York buying rate for 90 day indorsed bills. . 1 *114 y2- 5 A 7 A 0.48 2.04 0.004 1 *1 H y2 A 7 0.45 0.60 0.84 0 .94 1.88 1.92 2.21 2.24 0.067 0.267 1 1 1 y2 1 *1 H y2 A 7 y2 y2 * Nominal. M ember B a n k C redit Followinganincreaseof$500,000,000inthepreceding four weeks, total loans andinvestments of the weekly reportingbanksin101citiesincreasedonly$38,000,000 duringthefourweeksendedNovember 19, aperiodin whichnolarge“newmoney” securityissuewasfloated bythe Treasury. Aggregateholdings of UnitedStates Government securities increased$43,000,000, asthenet result of ariseof $81,000,000inTreasurybill holdings, anincrease of $52,000,000 inTreasury bondholdings, ariseof $326,000,000inTreasurynoteholdings, anda declineof $416,000,000inholdingsof Governmentguar anteedobligations—the last two changes reflectingthe refinancingof ReconstructionFinance Corporationand Commodity Credit Corporation November maturities intodirect Government securities. Withrespect tothe increase in Treasury bill holdings, this represented G overnment S ecurities OvershadowingotherdevelopmentsintheGovernment securitymarket duringNovember was anextensionof theriseinyields onTreasurynotesandintheaverage rates at whichnewissues of Treasurybills were sold. In addition to factors previously enumerated in this Review,yields onnotes were affectedby uncertainties astowhetherunqualifiedconversionorexchangeprivi legeswouldcontinuetobeaccordedtoholdersof matur ingTreasuryobligations. The accompanying chart indicates the extent of the advance in these yields in recent weeks, against the backgroundoffluctuationsearlierthisyear. OnNovem ber19theyieldonthetaxexempt%percentTreasury notedueMarch15, 1945, afterhavingrisen0.29inthe precedingtwomonths, was0.64percent, comparedwith theyear’shighof0.70percentreachedonFebruary15. Inthesametwomonthperiodtheyieldonthetaxable % percent TreasurynotematuringDecember15, 1945 alsorosefrom0.62to0.83percent. Laterinthemonth, Treasurynoteyieldssteadiedat thehigherlevels. Fol lowingadvancesinbill ratesintheprevioussixweeks, the average rate at whichthe newissue of Treasury bills datedNovember 26 was awarded, 0.267 per cent, wasthehighest inmorethanfouryears. Meanwhile, theyieldonthetaxexempt 2% percent Treasurybondof1960-65, representativeofthebehavior of yields onlong termTreasury bonds generally, ad vanced only slightly during November, following a declinetoarecordlowlevel inOctober. Similarly, only 91 FEDERAL RESERVE BANK OF NEW YORK PCR CENT 2 .3 0 2.20 2.00 1.00 2.4 0 1.90 .9 0 .8 0 .7 0 .6 0 .5 0 .4 0 .3 0 .20 .10 0 1941 Y ield s on U nited S ta tes G overn m ent Securities (O n W ed n esd a y dates— la te st figures are for N ovem ber 2 6 ; for T reasu ry bills, only positive yields show n) furthertoapointaboutonepercentabovethe1940low. Taxsellingwasreportedtohavebeenprevalent during the whole month and to have affected public utility sharesparticularly. Theaveragepriceof publicutility stocksonthe28thwas at thelowest point recordedby Standard’sindexwhichgoesbackto1926. Thevolume of trading onthe NewYork Stock Exchange during Novemberwastheheaviest sinceJuly; onNovember12 over a million shares were traded, the largest daily volumesinceSeptember25. Domesticcorporatebondsshowedlittlenet changein priceforthemonthas awhole, remainingat, or close to, record high levels. Mediumgrade bonds of this type, classified as Baa by Moody’s Investors Service, movedupmorethanhalf apointtoanewhighfor1941 betweenNovember1and6, but hadlostthreequarters of apoint byNovember 12. Other pricemovements in the corporate field were generally minor. Municipal bondquotationsalsomaintainedrecordhighlevels. small increases in average yields onother long term Treasury bonds (both tax exempt and taxable) were hisbank’sseasonallyadjustedindexofthenetprofits recordedinNovember, asprices of theseissuesshowed ofT 167commercialandindustrialcompaniesroseapproxi onlyfractional net declines for themonth. mately 10 per cent between the second and third Thefirst twoof theweeklyissues of Treasurybills quarters of 1941, primarily as a result of a more duringNovember were inthe amount of $150,000,000 favorable showingbythe automotive industry thanis andeachreplaceda$100,000,000maturity. OnNovem usual duringthethirdquarter. ber 13 the Secretary of the Treasury announcedthat Theaccompanyingdiagram,whichshowstherelative the weekly Treasury bill offering would be raised to fluctuations of industrial production and corporation $200,000,000, andthatpayment couldbemadeeitherin profits from1928 to date, indicates that corporation cashorbybookcredit. Accordingly, thelasttwoweekly profits showedno great change during the first nine issues of bills in November were in the amount of months of 1941, whileindustrial production, underthe $200,000,000. As each replaced a maturity of stimulus of the defense effort, was rising rapidly to $100,000,000, the Treasury obtained $100,000,000 of recordhighlevels. Ordinarily, asthediagramindicates, “newmoney’’ duringeachweek. fluctuationsinproductionarereflectedtoalargeextent TheSecretaryof theTreasuryhasannouncedthat a in corresponding changes in net profits, with profits large scale “cash” offering of Treasury obligations risingorfallingatafasterratethanproduction. During (involvingaboutabillionandahalf dollars) isplanned the past nine months, however, increases intaxes, toduringthefirstweekinDecember, andthattheamount of weeklyTreasurybill issues, beginningwiththeissue tobedatedDecember10, willbereducedto$150,000,000. The Secretaryalsostatedthat the$426,000,000 of 1% per cent Treasurynotes due March15, 1942, andthe $310,000,000of %percentReconstructionFinanceCor porationnotesdueJanuary15, 1942, wouldberefunded inJanuary; andthattwoissuesof Federal FarmMort gage Corporation bonds ($236,000,000 of 3 per cent bonds of 1942-47, callable January 15, 1942, and $103,000,000of 2%percent bonds of 1942-47, callable March1, 1942) might alsoberefundedatthat time. B u s in e s s P r o fits P R O D U C T IO N IN D E X P R O F IT S IN D E X S e c u r ity M a r k e ts The irregular downward movement of stock prices whichbegan September 17 continued into November. Following indeterminate fluctuations earlier in the month, Standard’s 90 stockindex onNovember 12-13 brokesharplytoanewlowfor1941, undertheinfluence of newsof labordisputes anddiscussions of additional taxlegislation. After aninterveningperiodof slightly higherquotations, thisindexlateinNovemberdeclined Indexes of Industrial Production and B u sin ess P rofits, Q uarterly D ata A d ju ste d for Seasonal V ariation (In du strial production index of B oard o f G overnors of the Federal R eserve S y ste m and Federal R eserve B an k o f N ew Y o r k index o f profits o f 1 67 com m ercial and industrial com p anies; 1 9 3 5 -3 9 a v e r a g e s 1 0 0 per cen t) 92 MONTHLY REVIEW, DECEMBER 1, 1941 getherwithhigherwageandmaterialcosts, havereached $360,000,000 as against $61,000,000 ayear before, and snchproportionsastooffset, inlargemeasure, theeffect wasthelargest since1930. Net incomeof otherpublic on profits of the increased volume of sales together utilities (excludingtelephonecompanies) showedayearwithassociatedreductionsincostsperunit. At current to-yeardeclineof 6percentand1percent, respectively, levelsprofitsofthesecorporationsare20percentbelow duringthethirdquarterandtheninemonthperiods. the 1929 peak, althoughthe volume of productionis about40percent greater. A compilation of the aggregate sales, expense, and profitandlossdatapublishedby60companiesindicates that for the first nine months of 1941 gross sales of this grouprose approximately $1,570,000,000, or some 45percent abovethoseinthecorrespondingperiodof 1940. Profits, beforeFederal taxaccruals, rose96 per cent, whileprofits, afterFederal taxes, were21percent largerthaninthefirstninemonthsof 1940; theaggre gate amount set aside for Federal taxes was approxi matelyfourtimestheamount inthecomparableperiod of 1940. Theaccompanyingtableshowsthatreportednetprofits of abroaderlist of 401commercial andindustrial com paniesduringthethirdquarterwere41percentlarger thanayearearlier. Thisratherlargegainisattributable in part to the fact that last year’s reported third quarter earnings generally were restricted by deduc tions for retroactive tax charges (under the Second RevenueAct of 1940) applicabletothefirst sixmonths of that year, whereas during the 1941 third quarter suchretroactivechargeswerelesscommonbecausecor porationshadtoalargeextentanticipatedtheincreases intaxratesprovidedfor intheRevenueAct of 1941. Other important factors were the high third quarter automobile earnings referredtopreviously andasub stantial increaseinsteel companyprofits. Netprofitsof petroleumcompaniesalsoweremuchlargerthanayear earlierasaresult of ahigherpricestructureforpetro leumproducts andacontinuedlarge demand. For thefirst nine months of theyear net profits of this same group of 401 companies were 26 per cent abovethelevelforthecorrespondingperiodof1940. All groups, withtheexceptionof bakeryproducts, goldand silver mining, andcigar companies, hadlarger profits thanin1940. Thelargest percentagegains occurredin the motion picture, coal mining, lumber and roofing products, hardware, andcopper andbrass fabricating groups. Ingeneral, gainsinnet profits over1940were the greatest in companies producing durable goods; Owing chiefly to asharp decline inthe volume of 185 such companies included inthe table showedan refundingoperations, corporateandmunicipal security aggregategainover 1940 of 32 per cent, whileprofits flotations during November aggregated $195,000,000, of 33 mining companies rose 17 per cent, and 183 only slightly above the lowest monthly total in two companies in the nondurable goods and service lines years. Corporate financing amountedto $121,000,000, showedanincrease of 20 per cent. Profits indurable of which$102,000,000, ormorethan80percent, repre goods industries generallyfluctuate muchmorewidely sentedfunds tobeusedfor newcapital purposes, an unusuallyhighproportion. thanprofitsinnondurablegoodsindustries. Owingtothelargevolumeof freight trafficandalso Most of thelarger issues offeredwere quicklytaken to general exemptionfrompayment of excess profits upbyinvestors. This was especiallytrue of theflota taxes because earnings are still relatively lowonthe tions of $25,000,000Pacific Gas andElectric Company largeamounts of investedcapital, net income, after all bondsand$20,000,000WestinghouseElectricandManu charges, of Class I railroads aggregated $188,000,000 facturing Company debentures, both of which repre during the September quarter, as compared with sentednewcapital. Temporaryfinancing, not included $70,000,000 during the corresponding period of 1940. inthe $195,000,000 total, accountedfor anadditional For the full nine months, net income was about six $146,000,000 andincluded $100,000,000 State of New times that of 1940, amounting to approximately York 0.30 per cent tax anticipation notes maturing (Net profits in millions of dollars) Corporation group Advertising, printing and pub lishing.......................................... Aircraft manufacturing............... Automobiles................................... Automobile accessories (excl. tires)............................................ Building materials: Hardware.................................... Heating and plumbing............ Lumber and roofing................. Other........................................... Chemicals....................................... Copper and brass fabricators. . . . Drugs, cosmetics, and soaps.. . . Electrical equipment................... F oods: Bakery products....................... Beverages................................... Confectionery............................ Flour milling and cereal prod ucts.......................................... Other........................................... Industrial machinery and acces sories ............................................ Mining: Coal............................................. Copper........................................ Gold and silver........................... Other............................................ Motion pictures............................. Office equipment........................... Paper and paper products............ Petroleum....................................... Railroad equipment..................... Steel and iron................................ Stores............................................... T extiles............................................ Tobacco (cigars)........................... Miscellaneous................................ Third quarter No. of cos. 1937 1940 1941 First nine months 1937 1940 1941 2 .4 11.3 15.1 2 .6 15.6 58.7 9 .5 5 .8 199.9 8 .2 23.3 160.5 8 .3 32.2 207.0 11.0 6.9 12.9 46.4 34.1 44.2 4 0.9 5.2 7 2.9 6 11 9 .5 26 37.8 4 1.8 11 13.1 12 17.2 0 .9 5.0 2.9 7 .5 33.9 1.8 13.2 14.0 1.4 4 .6 4 .1 6.7 39.5 2.9 17.4 16.5 3 .8 12.5 8.0 28.5 119.8 8.4 44.4 53.8 2.4 8.2 6 .0 22.4 112.7 5.6 44.5 47.8 4 .2 11.2 10.5 22.8 119.8 9 .6 53.4 54.2 6 1.5 5 2.2 13 53.8 32 8 5 7 6 .3 3 .0 5.0 4 .7 2 .5 4 .8 4 .2 5.9 5 .3 15.5 10.5 14.1 13.6 8 .2 14.8 12.7 12.3 16.5 6 8 4 .2 7.1 5.1 7 .5 7.2 11.6 15.9 25.1 19.0 25.3 22.5 31.8 14.2 7 .9 13.2 4 2.5 25.8 37.2 — 0 .4 2.1 11.7 9 .6 4 .6 6.1 16.5 10.7 4 .0 0 .8 3.1 5 .0 8 .9 6 .6 59.1 23.2 9 .8 7 .1 69.7 77.2 8 .4 9.1 2 .3 3 .5 1.3 1.1 10.9 10.9 3.8 13.5 4 .0 11.7 4 .3 7 .3 9.7 51.2 7 .2 75.6 9 .8 3 .6 1.2 17.2 0.1 40.0 19.9 4 9.5 13.4 18.6 19.5 150.4 32.0 216.7 23.0 9 .0 2 .4 21.6 4 .8 34.4 13.2 33.5 4 .8 13.1 23.9 83.7 21.2 172.2 20.7 9.7 3 .3 2 1.2 8 .5 44.5 12.3 35.1 10.3 20.5 24.1 118.8 27.0 234.4 22.1 10.8 3 .3 32.2 28 12 5 9 7 4 9 14 34 12 32 12 9 5 38 Total, 32 groups........................... 401 407.5 319.5 450.4 1,280.5 1,042.1 1,314.3 Class I railroads, Net income................................ 137 42.5 Other public utilities (excl. tele phone COS.), Net income................................. 62 55.7 — ■ Deficit. N ew F in a n c in g 69.8 188.4 54.3 50.8 81.4 60.7 359.7 185.0 193.7 191.8 FEDERAL RESERVE BANK OF NEW YORK in May, 1942, and $35,500,000 Federal Intermediate CreditBank%and%percent consolidateddebentures maturinginMayandSeptember, 1942andsoldonbases of 0.40and0.55percent, respectively. F o r e ig n E x c h a n g e s 93 banks at $0.2331 for specifiedtransactions. However, forothertransactions, suchastheremittanceof funds, under license, to third countries through the medium of Swiss francs, the rate of the latter inthis market appears to be considerably higher, rising to $0.2375 towardtheendof November. Foreign exchange trading during November gave furtherevidenceof thestrengtheningforeignexchange position of Latin America, which for some time has ThegoldstockoftheUnitedStateswasreducedabout been recovering fromthe disruptions to its foreign $15,000,000 in November, the first monthly reduction trade brought about by the outbreakof war. Anim since January, 1938. Gold held under earmark for portant factor inthis improvement inLatinAmerican foreignaccount attheFederal ReserveBanksincreased foreigntrade, inanumberof casesatleast, haspresum about$61,000,000duringthemonthtoreachanewhigh ablybeenheavybuyingbytheUnitedStatesofstrategic of approximately $2,116,000,000. Meanwhile, goldim rawmaterials. This, together with extensive financial portscontinuedinrelativelysmall volume. assistanceofferedby theExport-Import Bankandthe Inthe four weeks endedNovember 19, the Depart UnitedStates StabilizationFund, hasbeenreflectedin ment of Commercereportedthe receipt of $35,100,000 advances inexchange rates of several LatinAmerican of goldintheUnitedStates inthefollowingprincipal countries. amounts: $12,800,000 fromCanada, $6,000,000 from Themost pronouncedriseduringthepast monthoc Australia, $5,600,000 fromRussia, $2,700,000 fromthe curredintheUruguayanpeso, whichappears tohave Philippines, $2,200,000 fromMexico, and $2,100,000 continuedinconsiderabledemandinthenoncontrolled fromColombia. market. Extendingthe improvement whichbeganlate inSeptember, thenoncontrolledratefor this exchange advanced gradually until near the end of November, when it rose abruptly to $0.5210. This level, which According to the F. W. Dodge Corporation report represents anappreciationof 18per cent for thepast covering37EasternStates, constructioncontracts dur twomonths, wasthehighest sinceJanuary, 1938. The ing Octoberwereawardedat adailyrate 14per cent free rate for the Argentine peso also showedfurther belowSeptember, but almost 50 per cent higher than recoveryfromthetemporaryAugust-Septemberreaction inOctoberof lastyearandsomewhatabovetheaverage andbyabout themiddleof Novemberhadreturnedto rateforthefirstninemonthsof 1941. Privateconstruc thehighlevelofabout$0.2390, firstreachedonAugust7. tionawards showedlittle change fromeither the pre Thislevel wasmaintainedduringtheremainderof the cedingmonthor thesamemonthayear ago. Awards month. The refunding operations recently undertaken for public construction, on the other hand, declined by the Argentine Government, whichwill result in a almost onefifthfromSeptember, but wereabout twice considerable savingininterest charges ontheinternal as great as inOctober, 1940. Of the total volume of debt, undoubtedly contributedto this firmness inthe contracts awardedinOctober, approximately one half Argentine exchange rate. Although the free rate for wereGovernment contractsfordefensepurposes. theVenezuelanbolivar continuedtodeclineduringthe InNewYorkStateandNorthernNewJersey,thedaily earlydaysofNovembertoalowof$0.2530, somedemand rateofconstructioncontractawardsrosesharplyduring appearstohavedevelopedat thispoint andbytheend October, andwas 40 per cent abovethe corresponding of themonththebolivar hadrecoveredto$0.2580; at monthof 1940. Primarilyresponsiblefor this increase thislevel, however, theratestill remainedconsiderably were large awards for manufacturing building and belowtheearlyOctoberquotationof $0.2700. engineeringprojects. Contractsforresidential building TheMexicanpeso, whichwill presumablybefurther were somewhat belowthe levels of September of this strengthenedby the economic andstabilization agree year andof October ayear earlier. Government con ments recently enteredintoby the United States and tractsfordefenseconstructionaccountedforalittleover Mexico, continuedtoholdat $0.2050-$0.2070, thelevel onequarterofthemonth’stotal. . whichhas beenmaintainedwithout interruptionsince The Office of Production Management has recently themiddle of last May. Followingthe signing of the publishedfiguresonthesizeof thedefenseconstruction stabilizationagreement, whichmakes $40,000,000 avail programwhichhas contributedsoimportantly to the abletoMexicoforthesupport of thepeso, theMexican presenthighlevelofconstructionactivity. FromJuly1, Finance Minister is reported to have announced on 1940 to October 1, 1941, approximately $8 billionwas November 26 that the peso will be stabilized at 4.85 scheduled for defense construction, of which about pesostothedollar (equivalent to$0.2062). TheCuban $3billionwasearmarkedformilitarypurposes (exclu peso held practically at par with the United States sive of military housing). The programprovides for dollarduringthemonthjustended. an expansion of industrial facilities to cost roughly AstotheblockedEuropeancurrencies, inwhichsmall $2 y2 billion, asumlargerthanall privateexpenditures transactions continuetobeexecutedunder license, the for newfactoryconstructionduringthedecadeof the ratefortheSwedishkronahasremainedaround$0.2385- thirties. Thedefensehousingprogramisroughlyequiva $0.2390dependinguponthesizeof thetransaction, and lent toall expenditures for newresidential buildingin Swiss francs have continuedto be supplied by Swiss 1940; more than $1% billion has beenscheduled for G o ld M o v e m e n t s B u ild in g MONTHLY REVIEW, DECEMBER 1, 1941 94 militaryhousingand$740 millionfor housingdefense workers andcommunityfacilities. In terms of dollar expenditures, a little less than half of the scheduledconstructionprogramhadbeen completedbyOctober1of thisyear. Theprogramsfor militaryhousingandprivatelyfinancedplant expansion wereabouttwo-thirdsfinished,andGovernmentfinanced factory construction had reached the half-way mark, whileonlydnethirdof thefundsformilitaryconstruc tionanddefensehousinghadbeenexpended. Tentative plans indicate afurther expansionof theschedule for defenseconstruction, possiblytoover$10billionbythe endof 1942. Reported Defense Construction Schedules (Dollar figures in millions) Per cent of Total program July 1, 1940- total expended October 1, 1941 as of Oct. 1,1941 Total defense construction........................................ $7,958 46 Military construction (except military housing).. 2,952 33 Industrial facilities...................................................... Financed by U.S. and British Governments. . . . Privately financed*................................................. 2,566 2,207 359 51 49 67 Housing.......................................................................... Military housing...................................................... Defense housing and community facilities.......... 2,440 1,698 742 56 65 36 * Under “ accelerated depreciation” program, Second Revenue Act of 1940. Source: Office of Production Management. E m p lo y m e n t a n d P a y r o lls Therewas practically nonet change inemployment atNewYorkStatefactoriesduringthemonthofOctober, as divergent movements among individual industries largelycanceledeachother. Payrolls decreasedslightly owinginpart totheobservanceof ColumbusDayand religiousholidaysduringthereportedpayperiod. Con tinuedadditionstoworkingforcesatshipyards, aircraft and firearms factories, andother plants with defense workwere largely responsible for the eighteenthcon secutive monthly gain in employment in the metals andmachineryindustrial group. However, avarietyof factorscombinedduringOctobertooffsettheseincreases. Seasonal factors resultedinlarge employment declines at canneriesandwomen’sclothingfirms, labordisputes occurredat several plants, andshortages of materials werereportedtohavecaused‘‘prioritiesunemployment’’ inthenonferrous metal andsilkindustries. Total fac tory employment was 27 per cent above the October, 1940level andpayrollswere51percenthigher. IntheUnitedStatesasawhole, asinNewYorkState, factory employment showed no net increase during October. However, payrollsfortheentirecountryrose 2%percent, presumablyowingtoincreasedwagerates, longerworkinghours, andovertimepayments. Thecon tinuedhiringof newworkersbyconcernswithdefense orderswasoffsetinOctoberbyseasonal declines inthe manufacture of food products and curtailments occa sionedby material shortages. ComparedwithOctober a year ago, factory employment was 18y2 per cent greaterandpayrollswere43y2 percentlarger. Althoughtheriseintotalmanufacturingemployment wascheckedinOctober, asisshownintheaccompanying Em p loym ent in E igh teen Selected P riva te D efen se Industries Com pared w ith T o ta l M an u factu rin g E m p lo ym en t ( 1 9 3 9 average = 1 0 0 per cen t) diagram,workingforcesin18selecteddefenseindustries continued the expansionwhichstartedinMay, 1940. Employment in these industries, as compiled by the Bureauof Labor Statistics, has doubledsincethestart ofthewar, comparedwithanincreaseofaboutonethird inmanufacturingemployment asawhole. Thegreater part of the aggregate gain tookplace at steel mills, foundries, electrical machinery plants, and similar industries whilethe greatest percentageincreases were recorded at plants producing finished war products suchasaircraft, munitions, andships. Bureau of Labor Statistics estimates indicate that total nonagricultural employment intheUnitedStates during October held at approximately the September level of 40,700,000. Month-to-monthchangeswereslight inall major classifications of nonagricultural employ ment. IncomparisonwithOctoberoflastyear, thetotal showed a gain of approximately 3,400,000. Military forces (not includedinthe aboveestimates), although almost 1,300,000largerthanayear ago, increasedonly slightlyoverSeptember. C o m m o d it y P r ic e s Rising price tendencies developed during November in a number of basic commodities, not under ceiling regulations, whichhadshowndownwardreactionsafter themiddle of September. AccordingtotheBureauof LaborStatisticscomprehensiveweeklyindex,theaverage of wholesale commodity prices rose about 1 per cent inNovemberandreachedthehighestlevelsinceJanuary, 1930. Whileincreasesinwholesalecommoditypricesduring November were generally much smaller than in the spring, the greater part of the advances for the war periodhas beenconcentratedinthe past year, as the accompanyingtableindicates. OnNovember22, theall commodity price index stood at a point 16 per cent higher than a year ago and 23 per cent above the prewar level. The most marked price increases were mainly in rawmaterials, particularly farmproducts whichaveraged48percenthigherthaninAugust, 1939. FEDERAL RESERVE BANK OF NEW YORK 95 Prices of foods andtextiles, including importeditems as well as those of domestic origin, alsorose sharply. Ontheotherhand,pricesofmetalsandmetalproducts— of particular importanceinthedefenseprogram—have beensubjectedtoeffectivecontrol measuresandforthe mostparthaveshownrelativelysmall priceadvances. During November various additional price control measures were taken. The Secretary of Agriculture askedthe commodity exchanges to reduce sharply the daily price fluctuations previously allowedonfutures transactions ingrainandcotton. The Office of Price Administrationextendedits mandatory ceiling regula tions to cover about 42 commodity groups currently. Newmaximumquotations were announcedduringNo vember for zinc alloys, steel castings, builders’ hard ware, andupholsteryfabrics, andanumberof revisions weremadeinpreviousceilingschedules. Manufacturers of railwayequipment andof metal officefurniture and equipment, aswell asproducersof suchconsumergoods as electrical appliances, cooking and heating stoves, radios, andrugswererequestednottoadvancetheprices of theseproductsabovetheprevailinglevels. Seasonal factors considered, electric power production appearstohavebeenmaintainedinNovemberat about thesameadvancedlevelasinthethreeprecedingmonths. Total automobileproduction, includingpassengercars andtrucks, apparentlyapproximated350,000unitsdur ingNovember (about30percentbelowthefigureforthe correspondingmonthof last year), reflectingtheinflu enceof restrictionsuponpassengercaroutput effective sincethefirstof August. Fromtheaccompanyingchart of production andretail sales of passenger cars it is evident that dealer inventories of 1942 models were built up in September and October to a substantial extent, following a rapid reduction in passenger car stocksduringtheperiodof recordsalesbetweenMarch andJune of this year andafurther reductionduring July andAugust. EstimatedproductioninNovember, and production quotas for December, January, and February, indicate the magnitude of the expectedde clineinpassengercaroutputincomingmonths. If cars areproduceduptotheprescribedlimits, total passenger car productionin the August-February period would It appearsfromavailableinformationthat industrial fall 40percentshortofproductioninthecorresponding operations duringNovember continuedalongthe lines year-agoperiod,August, 1940-February, 1941. ofrecenttendencies. Wellsustainedorexpandingopera P T O tions wereindicatedindefenseindustries, while“nonessential” activities using scarce materials were held InOctobertheseasonallyadjustedindexofproduction underrestraintbyGovernmentlimitationsuponproduc and trade computed at this bank declined one point tionor byunavailability of rawmaterial supplies. In further to108 per cent of estimatedlongtermtrend. thefieldof retail trade, weeklyfigures ondepartment Thefigurefor Octoberayearagowas 96. Thedecline storesales showedalarger increaseover October than of theindexinOctober, likethelarger declineinSep isusuallythecase, followingtherecessioninthatmonth. tember, resultedfromslackeninginthevolumeof retail Although hampered by labor disputes, particularly trade, seasonal factors considered. Thegeneral level of the“captive” coalminecontroversy, aswell asbyscrap production, ontheother hand, appears tohavemoved shortages, steel mill operationsagainheldwithinafew somewhat higherinOctober. percentage points of rated capacity. Trading in the Department store sales, whichonthe average have cotton gray goods market was generally slack during shownlittle changebetweenSeptember andOctoberin November, butactivityatthemillswasreportedtohave past years, thisyearfell about 10percent, whilesales continuedat ahighlevel. After reachingthefall peak of mail order houses andvariety chainstore systems inOctober, loadings of railway freight declinedsome increasedconsiderablylessthanusual betweenSeptem whatintheearlyweeksof November, butthereduction ber and October. There was a substantial seasonal waslesspronouncedthanusual atthistimeof theyear. increase inretail sales of newpassenger cars, but the THOUSANOS OF CARS U nited S tates Production and R etail Sales of P a ssen ger Au tom obiles (D epartm en t of Com m erce production data through O ctober and Au tom obile M an u factu rers A sso ciation data on retail sa le s; N ovem ber production estim a ted ; D ecem ber, 1941F ebruary, 1 9 4 2 production figures are Office o f Production M a n a gem en t a llotm en ts) United States Bureau of Labor Statistics Weekly Indexes of Wholesale Commodity Prices Index Percentage change Nov. 22, November 1941 compared with 22, 1941 (1926 = 100) Nov. 23, 1940 Aug. 26, 1939 + 3 1 .3 + 2 2 .9 + 2 1 .8 + 1 1 .4 + 1 5 .5 + 8 .7 + 1 2 .7 + 6 .2 + 9 .7 + 1 2 .4 + 4 7 .8 + 3 4 .2 + 3 4 .1 + 2 4 .1 + 2 0 .6 + 1 9 .7 + 1 6 .9 + 1 0 .6 + 8 .5 + 1 9 .2 Farm products............................................ Foods............................................................ Textile products......................................... Hides and leather products..................... Chemicals and allied products............... Building materials..................................... Housefurnishing goods............................. Metals and metal products..................... Fuel and lighting material....................... Miscellaneous.............................................. 90.3 89.5 90.4 114.9 89.5 107.4 101.7 103.4 79.4 87.1 All commodities................................. 92.2 + 1 6 .0 + 2 3 .3 Raw materials............................................ Semimanufactured articles...................... Manufactured products........................... 89.7 8 9.5 94.0 + 2 3 .4 + 1 1 .2 + 1 3 .4 + 3 5 .5 + 2 0 .3 + 1 8 .5 P r o d u c tio n and T rade roduction and rade in ctober 96 MONTHLY REVIEW, DECEMBER 1, 1941 volumeof saleswas43percent lowerthaninOctober, 1940. Afteradjustmentforseasonal factors, theflowof goods through primary distribution channels, as evi denced by railway freight traffic, appears to have decreasedslightly betweenSeptember and October. 1941 1940 October Indexes of Production and Trade* (100 = estimated long term trend) Index of Production and Trade............ 96 Production.................................................. 99 August Sept. October 109p 108p 116 115p 117p 124 131 118 127p 135p 118p 128p 138p 119p Producers’ goods— total..................... Producers’ durable goods............... Producers’ nondurable goods........ 10 00 1 100 1 Consumers’ goods— total.................... Consumers’ durable goods............. Consumers’ nondurable goods. . . . 97 96 97 105 108 105 102p 96p 104p 104p 9 5p 106p Durable goods— total.......................... Nondurable goods— total................... 99 99 110 124 123p IlOp 125p lllp Primary distribution................................ Distribution to consumer....................... Miscellaneous services............................. 87 96 93 108 115 105 103p lOOp 103p lOlp 95p 102p Cost 'of Living, Bureau of Labor Statistics (100 = 1935-39 average)....................... 100 106 Wage Rates (100 = 1926 average)............................ 114 123 124 Velocity o f Demand Deposits* (100 = 1919-25 average) New York City....................................... Outside New York City......................... 26 54 27 61 27 59 p Preliminary. D e p a rtm e n t 109 30 59 liquors. Substantial year-to-year gains, however, con tinued in sales of home furnishings and household appliances. Forthethreeweeks’ periodendedNovember22, sales ofthereportingdepartmentstoreswere8percenthigher thaninthecorrespondingweeksof 1940, andthedaily rate of sales for this portionof November appears to haveincreasedmorethanusual overthe Octoberlevel. Thisbank’sseasonallyadjustedindexof department storestocksadvancedfourpointsfurtherduringOctober to113 per cent of the 1923-25 average. Retail stocks of merchandise onhand inthe reporting department storesat theendof themonthwere36per cent higher thanattheendof October, 1940. Fromreportsgathered fromalimitednumberof thelarger department stores inthisDistrict, it appearsthat substantial year-to-year increasesininventories werecommoninpractically all typesof merchandise, thelargest increasesoccurringin hosiery, luggage, radios and musical items, toys and sporting goods, umbrellas, stationery, women’s under wear and accessories, infants’ wear, men’s and boys’ furnishings, some lines of household furnishings, and silverware. Outstanding orders for merchandise pur chasedbythestores, butnotyetdelivered,whileapproxi mately50percent higherat theendof October, 1941, than a year before, were lower than at the end of September, indicatingthat previouslyorderedmerchan disemovedintostockswithout newcommitmentsbeing madeat acorrespondingrate. * Adjusted for seasonal variation. S to re Percentage changes from a year ago T rade During October sales of the reporting department storesinthisDistrictwereonlyabout5percenthigher thaninOctober, 1940, thesmallestyear-to-yearadvance sinceearlyspring. As indicatedonthe accompanying chart, October sales fell considerably belowthe high September level, principally reflecting curtailment of retailbuyingfollowingtheimpositionofthenewFederal excise taxes on October 1. Large reductions between October, 1940 and October, 1941 were reported in sales of furs, women’s coats andsuits, andwines and Net Sales Department stores Stock on hand end of month October, 1941 October, 1941 Jan. through October, 1941 0 + 7 + 5 + 12 +16 + 4 + 4 + 9 + 6 + 16 +19 +15 + 6 +23 +2 1 +34 +24 +34 +27 +13 + 12 +15 +14 +22 +27 +12 +14 + 19 +15 +23 +27 +22 +12 +23 +24 +34 +20 +25 +16 +16 +35 +34 + 27 +39 All department stores................... + 5 +14 +36 Apparel stores................................ — 5 + 11 +37 New York City.......................................... Northern New Jersey............................... Westchester and Fairfield Counties. . . . Lower Hudson River Valley................... Poughkeepsie.......................................... Upper Hudson River Valley................... Central New York State......................... Mohawk River Valley.......................... Northern New York State....................... Southern New York State....................... Binghamton............................................. Western New York State........................ Niagara Falls.......................................... +35 +35 +33 +52 + 57 +34 +54 +54 +49 +55 +33 Indexes of Department Store Sales and Stocks, Second Federal Reserve District (1923-25 average = 100) 1940 Index o f Dollar Volum e o f Sales o f Reporting Department Stores in Second Federal Reserve District, not Adjusted for Seasonal Variation (1923-25 average= 100 per cent) 1941 October August Sept. October Sales (average daily), unadjusted................. Sales (average daily), seasonally adjusted... 109r 95r 100 134 125 120 112 98 Stocks, unadjusted............................................ Stocks, seasonally adjusted............................ 95r 84r 98 103 113 109 128 113 r Revised. MONTHLY REVIEW, DECEMBER 1, 1941 Business Conditions in the United States 1935 1936 1937 1938 1939 1940 1941 Index of P h ysical V o lu m e of Industrial Produc tion, A d ju ste d for Seasonal V ariation ( 1 9 3 5 1 9 3 9 a v e r a g e ^ 1 0 0 per cen t; durable m an u factures, nondurable m anufactures,^ and m inerals expressed in term s of points in total index) Indexes of V alu e o f D epartm en t Store Sales and S tocks, A d ju sted for Seasonal V ariation ( 1 9 2 3 -1 9 2 5 a v e r a g e ^ 1 0 0 per cen t) W ed n esd a y F igu res o f T o ta l M em ber B ank R eserve B alances at Federal R eserve B anks, w ith E stim ates of Required and E x cess R eserves (Summarized by the Board of Governors of the Federal Reserve System) I N D U STRIAL activity continued to increase in October and the first half of November and there was some further advance in prices of industrial materials and finished products. Distribution of commodities to consumers declined in this period following an unusually large volume o f trade in the preceding three months. P roduction Volume of industrial production increased further in October and the B oard’s seasonally adjusted index advanced from 161 to 164 per cent of the 1935-39 average. Increases in activity occurred mainly in industries producing machinery, armament, and other durable manufactures required under the defense program. In the meatpacking industry activity also advanced consid erably and output of other manufactured food products, which has been un usually large in recent months, declined less than seasonally. Automobile production increased during October and in the first half o f November was sustained at about the rate reached at the beginning o f the month. Production in October approximated the quota permitted for the month, whereas in August and September output had been considerably below the quotas set, owing in part to delays incident to the changeover to new model production and to difficulties in obtaining certain materials. Since the begin ning of the model year production has been substantially in excess of retail sales and dealers’ stocks have risen sharply. Output of cars and trucks in October was about one-fourth smaller than in October last year; in the industry as a whole, however, activity, as measured by man-hours worked, was about the same as a year ago, apparently reflecting a shift to armament production. In most other manufacturing industries output in October was maintained at or near the rates prevailing in other recent months. At cotton mills activity increased, following some reduction in the previous month, while at wool mills there was a slight decline from the peak reached in September. Steel produc tion rose to an average rate o f about 99 per cent of capacity during October but declined slightly in the first half o f November. Coal production declined somewhat in October and early November, while output o f crude petroleum increased further to new record levels. Iron ore shipments down the Lakes were maintained at a high rate and through the end of October amounted to 71,600,000 gross tons, a larger volume than had previ ously been transported in any complete shipping season. Value o f construction contract awards decreased slightly in October, according to figures of the F. W. Dodge Corporation. Declines in awards for publicly financed work were partly offset in the total by an increase in privately financed projects. Awards for residential building showed little change, al though an increase is customary in this month. Contract awards in October continued in larger volume than a year ago. Total awards were 60 per cent larger, reflecting increases of 13 per cent in private construction and o f 112 per cent in public work. D istribution Distribution of commodities to consumers declined in October following an unusually large volume o f trade in the preceding three months. During the third quarter sales had been stimulated considerably by several factors, notably apprehension that there might be shortages and higher prices o f many consumers’ goods later on, as well as desire to avoid stricter instalment credit terms, effective September 1, and higher taxes on many products effec tive October 1. Railroad freight car loadings declined somewhat from September to October, owing principally to decreased shipments o f grain products and coal. Shipments of livestock increased and ore loadings showed less than the usual seasonal decline. Commodity P rices Prices of agricultural commodities, which had declined from the early part of September to the middle o f October, have advanced somewhat since that time and prices of industrial commodities have increased further. Recent advances for industrial raw materials and finished products have been more restricted than in earlier periods, reflecting partly an extension o f Federal maximum price action particularly to petroleum products and to selected metal, chemical, and textile products. Prices in retail markets have continued to advance sharply. In September the cost o f living, as measured by the Bureau of Labor Statistics index, in creased 2 points to 108 per cent of the 1935-39 average and was 7 per cent above the level of last March. Since September retail food prices, which usually decline at this season, have increased further and preliminary data indicate that retail prices of other commodities have continued to rise. B ank Credit Total loans and investments at reporting member banks rose further dur ing October and the first two weeks in November. Holdings of United States Government securities increased and commercial loans continued to advance. Excess reserves of member banks declined from 4.7 billion dollars to 3.5 billion on November 1, reflecting the increase in reserve requirements previously announced by the Board to be effective on that date. 1935 1936 1937 1938 1939 1940 Money Rates in New Y ork City 1941 U nited S tates Government Security M arket Long term Treasury bonds declined slightly in price during the early part o f November, following a relatively sharp increase after the middle of Sep tember to a record high level around November 1. Yields on short term issues have firmed since early in September, the yield on Treasury notes of December 1945 advancing from 0.62 per cent on September 15 to 0.83 on November 15, and the bill rate rising to 0.258 per cent. FEDERAL RESERVE BANK OF NEW YORK Defense Savings Bonds In order to promote the establishment of payroll (3) Tocreateabacklogofsavings, whichthesavers deductionplans inthe offices andplants of additional will haveavailabletospendafterthedefenseprogram curtailedandproductionof civiliangoodsinlarger business concerns andother organizations, sothat em is q u antities again becomes possible and desirable in ployees mayhave available this convenient methodof ord ertomaintaintotal productionandemployment. accumulatingfundsforthepurchaseof SavingsBonds, anactiveprogramhasbeenannouncedbytheDefense The greatly increased rates of Federal income and Savings organizations in this District. In NewYork excess profits taxation which are applicable to 1941 City, the chairmanof the Greater NewYork Defense incomewill of courseabsorblargeamountsof purchas Savings committee, Mr. Lewis W. Douglas, President, ing power of persons subject to suchtaxes, andwill Mutual Life Insurance Company, announcedthat Mr. concurrentlyprovidelargeamountstoaidinfinancing GeorgeL.Harrison,President, NewYorkLifeInsurance the National defense program, but to the extent that Company, hadacceptedthechairmanshipof thefinance taxes are raised, the capacity of income tax payers, groupof theNewYorkCitycommittee, whichincludes especially of those whoseincome has not increased, to insurancecompanies, banks, andinvestment houses. It purchase Savings Bonds is lessened. To anincreasing is reported that 100 life insurance underwriters in extent, therefore, thesuccessoftheDefenseSavingspro NewYork City are about tobeginsystematic promo gramwill depend upon acceleration of purchases of tion of the payroll deduction plan among employers DefenseSavings obligationsbythoseindividuals whose inthis area, aneffort whichis expectedtobesupple income has increased. Furthermore, for thoseworkers mentedbysimilarworkbyrepresentativesof investment who, under the present income tax law, still are not banking organizations. Plans are also being made by subject toincometaxationtoanymaterial extent, if at the Defense Savings organizations to present to labor all, systematicpurchasesof DefenseSavingsobligations organizations the payroll deductionplanfor the pur will affordanopportunitytoparticipateinthefinanc chase of Savings Bonds. Information coming to the ingofthedefenseprogram,aswell asprovideareserve Federal Reserve Bankof NewYorkindicates that the foruseduringtheperiodof economicadjustment tobe numberof payroll deductionplansestablishedbyindus expectedontheterminationof thedefenseprogram. trial, commercial, financial, andother organizations is S N constantlygrowing. T h e d a ily r a t e o f s a le s o ries EDefense Savings TheNewYorkState Committeefor the Sale of De Bonds inthe SecondFederfalSeR eserve District during fenseBondsandStampsisheadedbyGovernorLehman, November showedafurther incre seinthenumber of Honorary Chairman, RichardC. Patterson, Jr., Chair bondsissued, but, becauseof anina c reasedproportionof man, andMrs. Lytle Hull, Vice Chairman; Mr. Nevil thesmaller denominations, thedaily lumeindollars Ford, onleave fromthe First Boston Corporation, is wasslightlylowerthaninOctober. Thevo n umberofbonds StateAdministrator. Anup-Stateorganization, similar issuedduringNovemberreachedadailyav rageof8,471, totheNewYork City committee, has alsobeenestab anincreaseofabout7percentoverthedaeily averageof lished,headedbyMr. EdwardH.Letchworth,ofBuffalo, 7,929 bonds issuedinOctober. For thedolla mount anddivisional, county, city, andtownorganizations to ofbondssold,however, thedailyaveragewas$7r61a ,0 0, as promote the sale of Defense Savings obligations have comparedwith$834,000inOctober—anindicatedr0 e c beenorarebeingorganized. InNewJersey, the State tionof about9percent. Thesefiguresincludesalesdu b Committee is headed by Governor Edison, Honorary qualifiedissuing agencies, i.e., commercial andsavingy Chairman, and Mr. A. W. Hawkes, Chairman; Mr. banks, buildingandloanassociations, andcreditunionss, JohnE.ManningisStateAdministrator. InConnecticut, andbytheFederal ReserveBankof NewYork, but do the State Committee is headed by Governor Hurley, ot include sales by post offices; owing to the larger HonoraryChairman, andMr. R. B. Newell, Chairman; n numberof holidays andSundaysinNovemberthedata Mr. T. S. SmithisStateAdministrator. h avebeenplacedonadaily averagebasis inorder to The saleof Defense Savings obligations onas wide ob taincomparability. Since May 1, sales of Series E spreadascaleas possiblehas thefollowingobjectives: bon sinthisDistricthaveaggregated$143,024,200, and (1) Toprovidefunds totheGovernment toaidin thed n umberof bondshastotaled1,261,000. Thesteady financingtheNational defenseprogram. g r o w t hinthenumberof bondsbeingissuedinthisDis (2) Tocheckinflationarytendencies byabsorbing trict a pparentlyreflectsissuesof bondswhicharebeing part of the increasedincome beingearnedby large numbers of the population, which otherwise might paid for with funds accumulated in the accounts of competeintheacquisitionofcertaingoods, thesupply employees coveredbypayroll deductionplans adopted ofwhichislimitedbecauseofdefenseproductionneeds. bybusinessconcernsandotherorganizations. ales in ovember
@FedFRASER