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R eport on S e c o n d F rom B u s in e s s F e d e r a l th e to R e s e r v e F ed eral R eserve th e F ederal N ew Y ork , C o n d itio n s D i s t r i c t A g en t at N ew R eserve Y o rk B oard D ecem ber 20, 1 9 1 9 T h e b a n k in g p ro b le m s of th e co m - c re d it a t a tim e w h e n th e v o lu m e o f c re d it sh ould be in g y e a r w i ll ce n te r la r g e ly a ro u n d th e g r e a t ly e x p a n d e d v o lu m e of b a n k c re d it w h ic h th e w a r re q u ire d a n d w ith w h ic h th e su b sid in g . T h e r e are tw o e ffe c tiv e ch e c k s to su ch e x p a n sio n ; one, th e h igh e r c o st o f go o d s w h ic h , w h e n su p p ly a n d d e m a n d b eco m e m o re n e a r ly b a la n c e d , w ill d e crease c o n su m p tio n ; a n d th e o th er, th e h igh er co st C r e d it and B a n k in g su b sid en ce of w a r fin a n c in g le a v e s us. T o e sta b lish som e co n tro l o v e r it a n d to p re v e n t in so fa r as p r a c tic a b le its d iv e rsio n in to u n d esira b le u ses in ste a d of to re d u ctio n of b a n k d e b ts, is a ta s k re q u irin g o f th e b a n k e rs of th e c o u n tr y n o t o n ly a n u n d e rsta n d in g of th e situ a tio n b u t a c tio n of a m o st d isin terested so rt. F o r th e lon ger th is v o lu m e of c re d it rem ain s in use in excess of o u r re q u irem en ts fo r p ro d u cin g a n d d is tr ib u tin g go o d s a n d c a r r y in g on th e u su al bu sin ess o f th e c o u n tr y , th e lo n ger w ill be d e la y e d a re tu rn to m o re n o rm a l b u sin ess a n d p rice co n d itio n s. T h e a d d itio n a l c re d it c re a te d b y th e F e d e r a l R e s e r v e B a n k d u rin g th e w a r w a s su p p lied a t ra te s w h ich o f n e c e ssity co n fo rm e d to th e T r e a s u r y ’ s p o lic y of b o rro w in g a t lo w ra te s of in terest. D u r in g th e w a r w h en in d u stria l e xp a n sio n w a s clo se ly c o n tro lled b y G o v e r n m e n t re g u la tio n , th e use o f th e cre d it resou rces o f th e F e d e r a l R e s e r v e B a n k w a s con fin ed la r g e ly to p u rp o ses n e c e s sa ry to c a r r y on th e w a r a n d m a in ta in th e c iv ilia n p o p u la tio n . B u t w ith th e re m o v a l of su ch re g u la tio n a n d co n tro l a n d u n d er th e stim u lu s of ch e a p cre d it a n d a n a p p a r e n t ly lim itless d e m a n d fo r go o d s, in d u stria l exp a n sio n h as p ro gre ssed b y leap s a n d b o u n d s, a c c o m p a n ied b y sp e c u la tiv e a c t i v i t y in all k in d s of p ro p e rty . T h is exp a n sio n k eep s u p a p re ssu re fo r LO A N S, D ISC O U N T S Date October 31 November 7 November 14 November 21 November 28 December 5 December 12 December 19 ra te s of th e F e d e r a l R e s e r v e B a n k sh o uld b e a n e f f e c tiv e influence u p o n th e c o st of cred it. T h e y h a v e b een raised tw ic e , on N o v e m b e r 3 a n d D e c e m b e r 1 1 , b u t h a v e n ev e rth e le ss been clo se ly re la te d to th e c e rtific a te ra te p o lic y o f th e T r e a s u r y . T h e y h a v e , h o w e v e r, g iv e n cle a r in d ica tio n to th e m em b er b a n k s of th e d e sira b ility in th e ir o w n in te re st, of e x te n d in g c re d it w ith in cre a sin g re s tra in t a n d c ir c u m sp e ctio n a n d of a d d re ssin g th e m se lv e s to th e g r a d u a l re d u ctio n o f th e ir d e b ts to th e F e d e r a l R e se r v e B a n k . D u r in g th e m o n th th e lo an s of th e N e w Y o r k b a n k s h a v e in a g g r e g a te d eclin ed . S in c e O cto b e r 3 1 , th e loan s, d isco u n ts a n d in v e stm e n ts of th e 1 1 2 re p o rtin g b a n k s of th is d istric t h a v e d eclin ed a b o u t $ 3 2 2 ,0 0 0 ,0 0 0 , of w h ic h a lm o st th e en tire a m o u n t is a cc o u n te d fo r b y th e d ecrease o f th e 7 1 re p o rtin g b a n k s in N e w Y o r k C i t y . T h e fo llo w in g ta b le sh o w s th e cou rse o f th e re d u c tio n , a n d in d ica te s t h a t a t th e v e r y end of th e p erio d th e lo a n s o f th e b a n k s a g a in m o v e d u p w a rd . AND IN V E S T M E N T S (In Millions) 71 Reporting Banks 112 Reporting Banks 2nd Fed. Res. District New York City $5,789 5,744 5,570 5,487 5,468 5,374 5,394 5,474 W h ile loan s of b a n k s in th e N e w Y o r k d is tric t d e clin ed $ 3 2 2 ,0 0 0 ,0 0 0 , b a n k s e lsew h ere in cre a sed th e ir of c re d it w h ic h w ill m a k e it less p ro fita b le fo r b a n k s to b o rro w a n d th u s red u ce th e s u p p ly of c re d it a v a il a b le to th e m fo r fu rth e r e x p a n d in g th e ir lo a n s. T h e $6,397 6,353 6,181 6,097 6,078 5,987 5,994 6,075 794 Reporting Banks All Districts $15,598 15,627 15,422 15,471 15,461 15,452 15,459 15,615 lo an s b y $ 3 3 9 ,0 0 0 ,0 0 0 , th e r e b y s lig h tly m o re th a n o ffse ttin g th e re d u c tio n m a d e in th is d istric t. REPORT ON BUSINESS CONDITIONS T h e r e are o th er e v id e n ce s o f re a c tio n fro m th e p ro g re ssiv e exp a n sio n of O cto b e r. T h e r e h a s been a th e lo w e st p o in t sin ce O cto b e r 2 3 . h o w e v e r, p r o v e d to be tr a n s ito r y . m a rk e d fa llin g off in th e a m o u n t of n e w secu rities o f fered fo r sale, a n d m a n u fa c tu re r s a n d m e rc h a n ts are C a ll m o n e y w a s e asier in th e la s t t h ir t y d a y s th a n fo r som e tim e p a s t, th o u g h th e re n e w a l ra te h a s n o t n o w u n w illin g to m a k e c o n tra c ts a t p re se n t p rices go n e b e lo w 6 p e r c e n t. on th e old b a s is ; in d eed it is re p o rte d to us t h a t w h ere su ch c o n tra c ts fo r m e rly c o v e re d a p erio d of six on N o v e m b e r 2 0 th e d eclin e w a s ra p id to 7 p e r c e n t, a n d th e n to 6 p e r c e n t., risin g a g a in on D e c e m b e r 9 m o n th s t h e y a re n o w g e n e ra lly lim ited to h a lf t h a t tim e . T h u s th e te n d e n c y in a tim e o f r a p id ly e x p a n d in g c re d it fo r d ealers a n d p ro d u ce rs to c o n t r a c t a h e a d fo r c o n s ta n tly lo n ger p erio d s h a s been m o d e ra te d . T h e m o v e m e n t o f th e d isco u n ts a t th e F e d e r a l R e s e r v e B a n k o f N e w Y o r k in th e p a s t t h ir t y d a y s h a s b een c o m p lic a te d , p a r tic u la r ly in th e m o n th of D e c e m b e r , b y th e o p e ra tio n s o f G o v e r n m e n t fin a n ce. O n nin e d a y s th e to ta l ea rn in g in v e stm e n ts w ere m o re th a n $ 1,0 0 0 ,0 0 0 ,0 0 0 . S in ce th e m id d le of N o v e m b e r G o v e r n m e n t d ep o sits h a v e been w it h d r a w n w ith fa ir r e g u la r ity . T h e s e d e p o sits, c re a te d c h ie fly b y th e sale on S e p te m b e r 1 5 of ce rtific a te s of in d eb ted n ess, re su lte d , w h e n th e G o v e r n m e n t calle d fo r th e fu n d s, n o t o n ly in a m o m e n ta ry rise in ra te s on th e S t o c k E x c h a n g e m o n e y m a r k e t b u t in th e lo an s a n d d isco u n ts o f th e F e d e r a l R e s e r v e B a n k . I n o th er w o rd s, th e d ep o sits re su ltin g fro m th e sale of c ertificates are u s u a lly c re a te d b y m a k in g en tries on th e b o o k s of th e b a n k s sh o w in g cre d its to th e a c c o u n t o f th e U n ite d S t a t e s a n d it is n o t u n til th e G o v e r n m e n t d e m a n d s th e d ep o sits so e sta b lish e d t h a t th e b a n k h a s to fin d fu n d s w ith w h ic h to p a y . U s u a lly reco u rse is to th e F e d e r a l R e s e r v e B a n k , w h e re th e p u rch a se d c e rtifica te s or o th e r b o n d s are p u t u p as s e c u rity fo r lo an s, w h ic h are g r a d u a lly re d u ce d as th e G o v e r n m e n t d isb u rses th e fu n d s a n d som e p o rtio n o f th e m re tu rn s to th e b a n k s in th e fo rm of c o m m e rc ia l d ep o sits. T h e m a x im u m fo r th e e a rn in g in v e stm e n ts of th is b a n k , $ 1 ,0 7 2 ,0 0 0 ,0 0 0 , w a s re a ch e d on D e c e m b e r 1 5 , a n d w a s a ttr ib u ta b le to a n o th e r cau se . about of $ 2 5 0 ,0 0 0 ,0 0 0 in d eb ted n ess t h a t su m w as p a id w h ic h th e n o u t fo r to 7 p e r cen t, la te ra l a n d d u stria l. tr ic t. ce n t, to p e r c e n t, on a ll in I t is re p o rte d b y th e b a n k s t h a t th e m a jo r m e n t fo r c o tto n a n d to b a c c o . T h e r a te is n o w on a 6 p er cen t, b a sis, as c o m p a re d w ith 5 3 ^ p e r c e n t, to 5 % p e r c e n t, in m id -N o v e m b e r . T h e ra te s a t w h ic h th e F e d e r a l R e s e r v e B a n k p u rch a se s b a n k e rs a c c e p ta n ce s w e re in cre a se d 3^± of 1 p e r ce n t, on N o v e m ber 2 8 . T h e n e w ra te s ra n g e u p fro m th e fo llo w in g m in im u m s fo r b e st k n o w n n a m e s : 4 % p e r c e n t, fo r en d o rsed 9 0 - d a y b ills; 4 % p e r ce n t, fo r 6 0 -d a y b ills a n d 4)^> p e r ce n t, fo r 3 0 - d a y b ills. T h is a c tio n w a s ta k e n to p la c e th is b a n k ’ s p u rch a se ra te s m o re in a cc o rd w ith th e h ig h e r ra te s n o w p r e v a ilin g in th e o p en m a r k e t, w h e re ra te s fo r u n e n d o rsed b ills a re yi to 34: o i l p e r ce n t, h igh er. W h ile b a n k cle a rin g s sh o w a d eclin e fro m th e h igh le v e ls of O c to b e r a n d e a r ly N o v e m b e r , t h e y a re n e v e rth e le ss f a r a h e a d of co rre sp o n d in g p erio d s of la s t y e a r . T h is d eclin e is th e reflectio n of d e cre a se d a c t i v i t y on th e sto c k e x c h a n g e . T h e fo llo w in g g iv e s th e to ta ls o f e a ch w e e k of th e p e r io d : Week Ended November 26 December 3 December 10 December 17 of in co m e a n d excess p ro fits ta x e s , w h ic h o n ly p a r tia lly S to c k o ffset th e d isb u rse m e n ts. M ark et sh a rp 7 per 7 73^ p a r t of th e p a p e r p u r c h a s e d fo r a c c o u n ts o u tsid e of N e w Y o r k h as b een fo r S o u th e rn b a n k s w h ere fu n d s h a v e m o v e d fro m N e w Y o r k in g r e a t v o lu m e in p a y A g a in s t T h e re su lt w a s a a n d on D e c e m b e r 1 5 , w h e n in co m e t a x T h e m a r k e t fo r co m m e rcia l p a p e r h a s c o n tin u e d du ll w ith v e r y little d e m a n d fro m b a n k s in th is d is c e rtifica te s m a tu re d . F r o m a ra te of 1 0 p e r c e n t, p a y m e n ts w e re d u e, to 1 5 p e r c e n t. S u b s e q u e n tly , fo r th e rea so n s m en tio n e d a b o v e , th e ra te d eclin ed to 6 p e r ce n t. T im e m o n e y h a s been s c a r c e a n d tra n sa c tio n s w e re fe w a n d fo r lim ite d p erio d s. R a t e s a re n o m in a lly 6 p e r ce n t, to p e r c e n t, on m ix e d co l O n th a t d a y w e re re c e ip ts of a b o u t $ 1 2 8 ,0 0 0 ,0 0 0 T h is d eclin e, New York City $5,364,902,000 5,046,831,000 5,068,752,000 5,784,012,000 Other (6 Cities) $131,678,000 141,499,000 134,614,000 160,970,000 T h e liq u id a tio n of sto c k s w h ic h a c o rre sp o n d in g in crea se in th e c re d it m o m e n ta rily a v a ila b le in th e b a n k s. S u b s e q u e n t in co m e t a x fo llo w ed th e e x tra o rd in a r y m o n e y co n d itio n s o f e a r ly N o v e m b e r h a s been c o n tin u e d , w ith a fa ir d eg ree o f c o n siste n c y th r o u g h o u t th e p a s t t h ir t y d a y s . T h is liq u id a tio n re c e ip ts, tra n sfe rs b y th e T r e a s u r y fro m o th e r d is p ro ce ed e d w ith o u t sh a rp b re a k s in th e m a r k e t a n d tr ic ts a n d p a y m e n ts of lo a n s b y th e b a n k s o u t of th e w ith lessened p u b lic p a rtic ip a tio n , as is c u s to m a r y rise in th e e a rn in g in v e stm e n ts of th is b a n k and p ro ceed s of ce rtific a te s of in d e b te d n e ss red ee m e d , in re d u ce d r a p id ly th e e a rn in g in v e s tm e n ts of th is b a n k , d e m a n d s u p o n c re d it a p p e a r to h a v e su b sid ed co n sid e ra b ly . u n til on D e c e m b e r 1 9 t h e y re a c h e d $ 9 3 6 ,0 0 0 ,0 0 0 , a d e c lin in g m a rk e t. The fo rm e r e xtra v a g an t FEDERAL RESERVE AGENT AT NEW YORK D a i l y sales fell off m a te r ia lly . I n th e th ir d w e e k of N o v e m b e r th e a v e r a g e w a s 1 , 1 4 5 , 0 0 0 sh a res a d a y ; in th e fo u rth w e e k 9 8 0 ,0 0 0 ; in th e first w e e k of D e c e m b e r 9 3 6 ,0 0 0 ; in th e seco n d w e e k 9 3 8 ,8 0 0 a n d in th e th ir d w e e k fell to 8 6 7 ,2 0 0 sh a res a d a y . A p a r tia l r e c o v e r y of p ric e s w h ic h to o k p la c e e a r ly in D e c e m b e r w a s m o st p ro n o u n ce d in th e h ig h ly s p e c u la tiv e issues, w h ile sh a re s w h ic h a r e c o m m o n ly re g a rd e d as in v e s t m e n t sto c k s re m a in e d c o m p a r a t iv e ly d u ll. T h e m a r k e t h a s b een fa ir ly re sp o n siv e to n e w s d e v e lo p m e n ts. F o r in s ta n ce , th e te rm in a tio n of th e b itu m in o u s m in e rs’ strik e a n d th e a n n o u n ce m e n t of th e A t t o r n e y G e n e ra l t h a t h e w o u ld n o t a p p e a l th e So u th e rn P a c ific oil la n d c a se ca u se d a rise in p a r tic u la r sto c k s a n d le n t a m o m e n ta ry s tre n g th to th e e n la rg e th e ir c a p ita l. N e v e rth e le s s , it is re p o rte d to u s t h a t th e a p p lic a tio n s are still so n u m ero u s t h a t th e b e s t b o n d h o u ses are a b le to co n sid er o n ly a sm all p ro p o rtio n o f th e m a n d in th e a g g r e g a te t h e y a re m u c h b e y o n d th e p o w e r o f th e m a r k e t to a b so rb . D u b io u s Issu es T h e c re a tio n o f a g r e a t b o d y of n e w c a p ita lis ts th ro u g h th e sale of L i b e r t y lo an s a n d b e ca u se of th e g e n e ra lly h ig h e r le v e l o f w a g e s h a s en co u ra g e d th e sin iste r a c t i v i t y of p ro m o te rs a n d salesm en w h o are t r y in g to flo a t sto c k s o f th e m o st d u b io u s c h a ra c te r. B a s e d u p o n th e a n sw e rs to in q u iries m a d e fro m f ift y b a n k s o u tsid e o f N e w Y o r k C i t y , a n d u p o n o th er e v id e n ce w ith in th e M e tr o p o lita n d istric t, it a p p e a rs t h a t th is m o v e m e n t is g e n e ra l in th e la rg e r cities of th e d istric t, p a r tic u la r ly N e w Y o r k , B u ffa lo , R o c h e s rest of th e list. T h e a n n o u n ce m e n t o f th e fra c tio n a l in crease in ra te s b y th is b a n k on D e c e m b e r 1 1 w a s te r, S y r a c u s e , U t i c a a n d B in g h a m to n , b u t w ith v a r y in g in te n sity . I t a p p e a rs t h a t som e of th e p ro m o ters fo llo w ed b y a d a y of h ig h c all m o n e y ra te s a n d a c t iv e are m en w h o se bu sin ess reco rd s do n o t sta n d s c ru tin y , e ith e r fro m th e s ta n d p o in t of su ccess or p erso n a l liq u id a tio n . in te g r ity ,a n d som e of th e m h a v e in tim e s p a s t been T h e liq u id a tio n w h ic h d e v e lo p e d B on d M ark et and N ew F in a n c in g in sto c k s w a s fa r m o re p ro n o u n ce d in th e b o n d m a r k e t. I t m a n ife ste d itse lf te n t a t iv e ly in th e th ird w e e k of N o v e m b e r a n d b e c a m e h e a v y d u rin g th e n e x t tw o w e e k s; a lth o u g h th r e e -q u a rte r s of th e tr a n s a c tion s w e re in U n ite d S t a t e s b o n d s, th e p rice s o f w h ic h fell, th e d eclin es in th e p ric e s of c o rp o ra tio n b o n d s fo u n d g u ilt y of crim e. A p o ssib le in d ic a tio n of th e e x te n t to w h ic h n ew c a p ita l is so u g h t a p p e a rs in th e to ta l of n e w in co r p o ra tio n s. D o u b tle s s o n ly a fra c tio n o f th e to ta l is in te n d e d fo r im m e d ia te issue, d e p e n d in g p rim a rily u p o n th e c a p a c it y of th e p u b lic to b u y ; a n d m a n y a b o u t th re e -q u a rte rs of a p o in t; in d u stria l b o n d s one a n d o n e-h a lf p o in ts ; p u b lic u tilitie s tw o a n d oneq u a rte r p o in ts a n d ra ilro a d b o n d s a b o u t th re e p o in ts. B o n d s o th e r th a n G o v e r n m e n t issues w h ic h w e re of th e m are, of co u rse, of th e h ig h e st c h a r a c te r . N e v e rth e le s s , th e to ta l is n o te w o r th y . In N o v e m b e r n e w in c o rp o ra tio n s in th e E a s t e r n S t a t e s a m o u n te d to $ 1 , 3 4 1 , 0 0 0 , 0 0 0 a n d in O cto b e r $ 2 , 3 6 3 , 0 0 0 ,0 0 0 , as co m p a re d w ith $ 1 3 1 ,0 0 0 , 0 0 0 in N o v e m b e r a y e a r a go . T h e m o n th ly a v e r a g e fo r 1 9 1 9 u p to th is tim e is $ 1 ,0 5 4 ,0 0 0 ,0 0 0 , w h ic h is n e a r ly se v e n m o st h e a v ily sold w e re th o se of ra ilro a d a n d stre e t ra il w a y co m p a n ies w h o se re co rd s o f e a rn in g s are p o o r, a n d of o th er c o rp o ra tio n s w h o se b o n d s a re re g a rd e d a s h ig h g r a d e b u t b e c a u se of th e ir p rice s h a v e th e sm a lle st y ie ld s. I n sp ite o f som e e x ce p tio n s th e b o n d m a rk e t as a w h o le fell to th e lo w e st p rice le v e l re a ch e d since 1 8 9 6 . T h e e ffe c t o f th e d eclin e on L i b e r t y bo n ds w a s to p la c e th e T h ir d 4 J ^ p e r ce n t, a n d th e V ic t o r y 4 % p e r c e n t, issues on a b e tte r th a n tim es th e m o n th ly a v e r a g e sh o w n b y th e fiv e y e a r s p rio r to th e w a r . M o s t of th e n e w in co rp o ra tio n s a re of oil, sh ip p in g a n d c h e m ic a l co m p a n ies a n d c o n cern s e n g a g e d in th e m a n u fa c tu re o f a rticle s, th e c u rre n t p rice s o f w h ic h a re h ig h a n d th e m a rg in s of p ro fit on th e p re se n t b a sis e x c e p tio n a lly go o d . In m a n y cases th e ch a n ce s of re tu rn fo r th e in v e sto r are lim ite d to th e m a in te n a n c e of th e p re se n t p ric e le v e l. T h e m o st re c e n t p re c e d e n ts fo r th is v a s t g r o w th o f 5 p e r cen t, b a sis. n e w en te rp rise s a re to b e fo u n d in th e U n ite d S t a t e s w ere h e a v ie r. F r o m th e m id d le o f N o v e m b e r to th e m iddle of D e c e m b e r , U n ite d S t a t e s b o n d s fell off in 19 0 0 a n d ju s t p rio r to th e liq u id a tio n o f 1 8 7 3 , a n d T h e h igh p ric e of m o n e y in N o v e m b e r ca u se d a in G r e a t B r it a in p rio r to th e liq u id a tio n of 18 6 6 . m a rk e d re d u ctio n in th e a g g r e g a te of n e w issues b y A t no o th e r tim e s in m o d ern in d u s tr y h a s th e fo r m a d o m estic c o rp o ratio n s. T h e to ta l fo r t h a t m o n th w a s $ 2 5 3 ,0 0 0 ,0 0 0 , as c o m p a re d w ith $ 3 9 0 ,0 0 0 ,0 0 0 in tio n of n e w c o m p a n ie s ta k e n p la c e on so la rg e a scale. O cto b er a n d $9 0 ,0 0 0 ,0 0 0 in N o v e m b e r a y e a r a go . The o p e ra tio n s o f d ea lers in p o o r or w o rth le ss tim e b ein g a t le a st of th e h ig h tid e o f o fferin gs to sto ck s are p a r tic u la r ly seriou s a t a tim e o f g r e a t e x p a n sio n su ch as th e p re se n t, n o t o n ly b e c a u se of b o n d houses b y co rp o ra tio n s w h ic h a re a n xio u s to th e w a s te of c a p ita l in v o lv e d , b u t b e c a u se fra u d u le n t T h is fa llin g off seem s to re g iste r th e p a ssin g fo r th e REPORT ON BUSINESS CONDITIONS issu es a re lo st sig h t of in th e g en e ra l o u tp o u rin g . R e p o r t s fro m th e b a n k s in c e rta in p a r ts of th e d is t r ic t in d ic a te t h a t a la r g e a m o u n t of L i b e r t y b o n d s h a v e b een secu re d in e x c h a n g e b y p ro m o te rs, w h o p ro m ise q u ic k a n d rich re tu rn s in p la c e of th e in te re st c a rrie d b y th e b o n d s. M a n y sales fo r cash a re re p o rte d also , p a r tic u la r ly to w a g e e arn ers. An e stim a te of th e a m o u n t o f d u b io u s issues on sale, secu red fro m a so u rce sp e cia lizin g in su ch m a tte r s , p u ts th e to ta l a t “ h u n d red s of m illio n s.55 A s u su a l, th e v ic tim s of su ch tr a n sa c tio n s are th o se w h o a re in th e w o rs t p o sitio n fro m k n o w le d g e or e xp erien ce to m e asu re th e w o rth o f secu rities. M e th o d s o f sale in clu d e n o t o n ly n e w s p a p e r a d v e r tise m e n ts a n d offers th ro u g h th e m ails, b u t so lic ita tio n b y a h ig h ly o rg an ize d co rp s of c a n v a sse rs. In a n u m b e r of cases th e n a m e of th e F e d e r a l R e s e r v e B a n k is re p o rte d to h a v e b een u sed fo r th e p u rp o se of c o n v in c in g p ro s p e c tiv e p u rch a se rs of th e v a lu e of th e sto c k o ffered. U s u a lly th e a rg u m e n t h a s been t h a t th e b a n k w h o se sto c k th e c a n v a s s e r is sellin g w ill b e c o m e a m e m b e r o f th e F e d e r a l R e s e r v e s y s te m , or t h a t th e p a p e r to b e h a n d le d b y th e n e w ly th is p u b lic se rv ic e fa r th e r b y g iv in g a d v ic e to all in q u irers, w h e th e r th e y a re cu sto m e rs or n o t. M any b a n k e rs are a lr e a d y d o in g w o rk of t h a t so rt. The F o r e ig n re m a rk a b le d eclin e of th e c h ie f E u r o p e a n e x c h a n g e s in th e tw o E xchan ge w e e k s b e tw e e n N o v e m b e r 2 9 a n d D e c e m b e r 1 3 is, o f co u rse fu n d a m e n ta lly a ttr ib u ta b le to th e excess of our e x p o rts to th e co u n trie s w h o se e x c h a n g e s w ere m o st a ffe c te d o v e r o u r im p o rts fro m th e m . The and F o r e ig n T rade d eclin e does n o t in d ica te so le ly t h a t th e m o n th of N o v e m b e r w a s r a d ic a lly d iffe re n t fro m th e p re c e d in g m o n th s w h e n th e d eclin es w e re less p ro n o u n ce d ; it reflects ra th e r th e c u m u la tiv e e ffe c t o f tr a d e b a l an ces w h ic h h a v e b een ru n n in g in o u r f a v o r fo r m a n y m o n th s, a n d th e re su lts of sp e cu la tio n in th e fo reign e x c h a n g e m a rk e t. I n c o n sid e rin g fo re ig n e x c h a n g e s a t th is tim e one sh o u ld re alize th e w h o lly a b n o rm a l co n d itio n s n o w p re v a ilin g , n o t o n ly in th e tr a d e b a la n ce s w h ic h h a v e b een p iled u p in f a v o r of th e U n ite d S t a t e s — a c o n d i C e r ta in cases of a p p a r e n tly fra u d u le n t in te n t h a v e tio n a g g r a v a te d b y th e in a b ility of m o st E u r o p e a n co u n trie s to settle a d v e rse b a la n ce s in g o ld — b u t the la r g e ly s p e c u la tiv e c h a r a c te r of th e fo re ig n e x c h a n g e m a r k e t itse lf. E x p o r te r s a re sellin g e x c h a n g e a s fa r a h e a d as D e c e m b e r of 1 9 2 0 , a n d im p o rte rs are b u y in g e x c h a n g e th ro u g h as e x te n d e d a p erio d . T h e se ttle m e n t of c u rre n t ite m s is n o t co n tin u o u s as it w a s b efo re th e w a r a n d th e e n tra n c e of th is h ig h ly sp e cu la t iv e b u y in g a n d sellin g h a s th e e ffe c t o f p ro d u cin g a lr e a d y b een b r o u g h t to th e a tte n tio n of th e F e d e r a l or lo c a l p ro se c u to rs, b u t in th e p a s t m o st p ro s e c u tio n s h a v e su cceed ed o n ly w h e n th e fra u d h a s been co m p le te d a n d th e in v e s to r h a s lo st his m o n e y . It is, th erefo re, esse n tia l t h a t in d iv id u a ls b u y o n ly a fte r seek in g a d v ic e fro m tru ste d b a n k e rs or o th ers w h o a re eq u ip p e d w ith so u n d in fo rm a tio n a n d go o d sense on fin a n c ia l m a tte r s . I n a n u m b e r of p r o g re ssiv e c o m m u n itie s th e n e w sp a p e rs n o t o n ly refu se v io le n t m o v e m e n ts of q u o ta tio n s. T h e r e a p p e a rs to h a v e been g e n e ra l fa it h on th e p a r t of those w h o h a d e x c h a n g e to sell t h a t ste rlin g w o u ld no t fa ll b e lo w $ 4 .0 0 , a b elief w h ic h w a s sh a re d b y p u rch a se rs of exchange. C o n s e q u e n tly ste rlin g exch a n g e w a s b o u g h t a t or a b o v e t h a t ra te fo r m o n th s in a d v a n c e a n d sellin g w a s w ith h e ld , w ith th e re s u lt th a t w h e n th e ra te d id g o b e lo w t h a t p o in t a n a c c u m u la tio n of bills a n d c h e ck s w a s th r o w n u p o n th e m a rk e t a n d o rg an ize d “ fin a n ce c o r p o r a t io n 55 w ill be d isco u n te d b y th e F e d e r a l R e s e r v e B a n k . S u c h sta te m e n ts sh o u ld b e sifte d w ith th e g r e a te s t care, b u t u s u a lly th e m a n a p p ro a c h e d b y th e c a n v a s s e r is in no p o si tio n to k n o w th e lim ita tio n s se t b y la w , b o th on F e d e r a l R e s e r v e m e m b e rsh ip a n d d isc o u n ts. to ta k e d u b io u s fin a n c ia l a d v e rtis in g , but have u n d e rta k e n to w a r n th e ir re a d ers a g a in s t u n s c r u p u lo u s v e n d o rs o f sto c k s. O fficers of b a n k s c a n c a r r y F O R E IG N Week Ended E ngland................................................................ France..................................................................... Italy......................................................................... Spam........................................................................ Argentina................................................................ Hong Kong............................................................ China (Shanghai)................................................. Japan....................................................................... a c c o r d in g ly a p re c ip ita te d eclin e o ccu rred . E X C H A N G E NOVEMBER 29 High Low High O th e r E u r o p e a n e x ch a n g e s a c te d sim ila r ly , as a p p ea rs in th e fo llo w in g ta b le : R A T E S DECEMBER 6 Low High 4.06% 3.99^ 3.99% 9.54 9.84 9.86 11.82 v 12.28 12.34 19.95 19.60 19.80 43.15 43.125 43.25 106.00 100.00 103.00 160.00 150.00 150.00 50.50 50.S1M 50.50 3.84% 10.75 12.77 19.65 43.25 101.75 150.00 50.50 DECEMBER 13 DECEMBER 20 Low High Low 3.85J4 10.92 12.94 19.90 43.15 101.00 165.00 50.50 3.65)4 11.87 13.60 19.50 43.15 100.50 159.00 50.50 3.90M 10.03 12.52 19.55 43.15 101.00 165.00 51.50 3.71J4 11.35 13.22 18.70 43.125 99.00 164.00 50.50 FEDERAL RESERVE AGENT AT NEW YORK T h e b r e a k in ste rlin g h a d its c o u n te r p a r t th o u g h in less d eg ree, in e x c h a n g e on C a n a d a , w h ic h on D e c e m b e r 1 1 w a s q u o te d a t a d isc o u n t of 1 1 p e r c e n t. S in c e t h a t tim e it h a s m a d e a p a r tia l r e c o v e r y , th e re su lt no d o u b t of a s u b s ta n tia l sh ip m e n t o f g o ld to th is c o u n tr y . T h e n e c e s s i t i e s of E u r o p e th u s f a r h a v e c o m p li c a te d th e w o rk in g o f th e eco n o m ic la w t h a t a d v e rs e e x c h a n g e s e n c o u ra g e e x p o rts a n d lim it im p o rts on th e p a r t of th e c o u n trie s a g a in s t w h ic h th e a d v e rs e ra te s ru n . O u r im p o rts fro m th e U n ite d K in g d o m h a v e in cre a sed fro m $ 1 2 ,8 0 0 ,0 0 0 in F e b r u a r y to $ 4 1 ,7 0 0 ,0 0 0 in O c to b e r; fro m F r a n c e $ 5 ,0 0 0 ,0 0 0 in T h e e ffe c t o f th is lo n g c o n tin u e d u p h e a v a l in th e e x c h a n g e m a r k e t is m o re a p p a re n t in o u r im p o rts F e b r u a r y to $ 1 4 ,0 0 0 ,0 0 0 in O c to b e r; fro m I t a l y $ 1 ,8 0 0 ,0 0 0 to $ 7 ,2 0 0 ,0 0 0 ; fro m C a n a d a $ 3 7 ,0 0 0 ,0 0 0 t h a n in th e m o v e m e n t o f go o d s a w a y fro m th is c o u n to $ 5 4 ,8 0 0 ,0 0 0 . N o d o u b t a la rg e p a r t of th e in c re a se in im p o rts fro m E u r o p e a n c o u n tries as b e tw e e n th o se tw o m o n th s is a ttr ib u ta b le to th e g r e a te r try . E u r o p e still a p p e a rs to be d e p e n d e n t u p o n u s, n o t o n ly fo r a g r e a t p a r t of th e r a w m a te ria ls re q u ire d fo r h er re h a b ilita tio n a n d fo r th e p u rp o se of k e e p in g h er p eo ple fro m s ta r v in g , b u t fo r fin ish ed m a n u fa c tu re s. I n f a c t , th e re p o rts of th e D e p a r t m e n t of C o m m e rc e in d ic a te t h a t th e v o lu m e o f fin ish ed p ro d u c ts c o m p a re d to th e to ta l of e x p o rts is f a r g r e a te r th is y e a r th a n in th e y e a r b e fo re th e w a r. T h u s in 1 9 1 3 c ru d e m a te ria ls fo r use in m a n u fa c tu r in g w ere 3 1 ^ p e r c e n t, o f th e to ta l. I n O cto b e r of th is y e a r th e c o rre sp o n d in g p e rc e n ta g e w a s 1 9 a n d in S e p te m b e r 1 5 . M a n u fa c tu r e s r e a d y fo r c o n su m p a m o u n t o f a v a ila b le sh ip p in g ; n e v e rth e le ss th e a d v a n c e h a s b ee n c o n tin u o u s th ro u g h th e su m m er u p to O cto b e r, w h e n a d e clin e is o b se rv e d in th e p re v io u s m o n th fo r im p o rts fro m F r a n c e a n d I t a l y . E x p o r t s , on th e o th e r h a n d , sh o w a d e clin e ; th o se to F r a n c e fro m $ 9 3 ,0 0 0 ,0 0 0 to $ 6 7 ,0 0 5 ,0 0 0 ; to I t a l y fro m $ 3 8 ,0 0 0 ,0 0 0 to $ 3 1 ,0 0 9 ,0 0 0 ; w h ile to G r e a t B r it a in th e y a re n e a r ly id e n tic a l a t $ 1 6 5 ,0 0 0 ,0 0 0 w it h , h o w e v e r, a sh a rp in cre a se in J u l y a n d A u g u s t . tio n on th e o th e r h a n d w e re 3 2 p e r c e n t, o f th e to ta l in 1 9 1 3 , a n d in O cto b e r of th is y e a r w e re 3 8 p e r c e n t, a n d in S e p te m b e r a b o u t 3 5 p e r c e n t. I n 1 9 1 3 fo o d stu ffs p a r t l y or w h o lly m a n u fa c tu re d w e re 1 3 p e r of co u rse, th e tr a d e b a la n c e s un less c o rre c te d b y th e cen t, of th e to ta l, w h e re a s in S e p te m b e r a n d O cto b e r m e n t of c re d its. o f th is y e a r t h e y w e re 2 2 p e r c e n t, a n d in J u l y 2 8 p e r c e n t. T h u s it a p p e a rs t h a t o u r e x p o rts u p a t le a s t to th e la te fa ll w e re still in te n d e d v e r y la r g e ly fo r im m e d ia te u se, a n d w h ile e x p o rta tio n of f u lly m a n u fa c tu re d a rticle s to S o u t h A m e r ic a a n d th e th e w h o le t h a t fa v o r a b le tr a d e b a la n ce s w ith E u r o p e O rie n t m a y h a v e a c c o u n te d in so m e degree fo r th is s h ift fro m b e fo re -th e -w a r exp erien ce, n e v e rth e le ss it is sa fe to d e d u ce t h a t o u r e x p o rts w e re re q u ired fo r T h e m o v e m e n t o f th e e x c h a n g e s p rim a r ily fo llo w s, sh ip m e n t of g o ld or se cu ritie s, or b y th e e sta b lish T h e ta b le g iv e n b e lo w sh o w s on h a v e d e cre a se d , b u t fo r th e te n m o n th s a re tre m e n d o u sly in excess o f th e c o rre sp o n d in g p e rio d of 1 9 1 3 . I t a p p e a rs a lso t h a t o u r a d v e rs e b a la n c e w ith C h in a is m o re th a n th re e tim e s w h a t it w a s in 1 9 1 3 ; w ith J a p a n is so m e w h a t le ss; w ith B r a z il a b o u t d o u b le ; w h ile w ith A r g e n t in a it is a lm o st e q u iv a le n t to w h a t o u r fa v o r a b le b a la n c e w a s in th e e a rlier y e a r . th e s a tis fa c tio n of E u r o p e ’ s im m e d ia te n eed s TRA D E BALANCES (000 Omitted) February France. Germany. Canada........................................................... Argentine....................................................... Brazil.............................................................. *Excess of imports over exports. $153,046 87,970 36,382 *1,296 10,411 3,028 4,969 6,380 July $181,874 42,744 22,278 2,136 *11,704 *28,565 17,440 *2,364 *16,271 T h e sum m ary reports for foreign tra d e in N ovem ber secu red on D e c e m b e r 2 0 fro m th e D e p a r t m e n t August $180,010 44,370 21,834 11,438 *4,995 *9,966 23,117 *5,578 *13,195 September October $118,960 35,732 21,416 7,250 *3,224 *27,100 35,337 *24,764 *25,944 $123,247 53,451 24,647 18,506 *12,103 *23,598 13,099 *9,899 *11,893 10 Months 1919 $1,648,390 670,099 325,279 47,505 *34,479 *26,387 194,217 *24,330 *83,376 10 Months 1913 $238,123 7,123 17,480 118,975 *10,842 *30,299 339,075 28,374 41,342 a t $ 7 4 0 ,0 0 0 ,0 0 0 , th e h ig h e st sin ce la s t J u n e , w h e n th e ma ax x im im u um m ot of $9*u $ 9 2 0 ,u ,0 u 0u 0 ,u ,0 u 0u 0 w tta in d .. Im p o r ts , m wa a ss a a xta me eu $ 4 2 9 ,0 0 0 ,0 0 0 o n ly $ 6 0 0 0 0 0 0 show th a t b o th im ports and exports valued a t were less rose m aterially in th a t m onth. T o ta l exports stood th a n th e to ta l for S eptem ber, th e h,ghest ever REPORT ON BUSINESS CONDITIONS rea ch ed . T h e b a la n c e o f tr a d e in o u r fa v o r , n e a r ly $ 3 1 2 ,0 0 0 ,0 0 0 , w a s la r g e r th a n in th e tw o p r e v io u s one- p rice s a little m o re c lo s e ly th a n h ith e rto . I n one in sta n c e it is re p o rte d t h a t th e d e m a n d fo r g o o d s o f th e h ig h e st p ric e h a s fa lle n o ff so m e w h a t. C ash p u rch a se s a re still la r g e a n d a n in crea se o f b u y in g b y o u t-o f-to w n p u r c h a se rs is o b se rv e d . T h e m o n th of N o v e m b e r w a s one I n B u ffa lo it is re p o rte d to u s t h a t th e v o lu m e of sales h a s been m u c h in e xce ss of la s t y e a r a n d t h a t m o n th s. S h ip m e n ts o f c o tto n , re p o rte d to b e th e la r g e s t on re co rd , a m o u n te d to 9 2 4 ,0 0 0 b a le s, v a lu e d a t $ 1 8 1 , 3 0 0 ,0 0 0 , a n d a cc o u n te d q u a r te r o f th e to ta l e x p o rts. W h o le s a le fo r n e a r ly of v e r y g e n e ra l a d v a n c e s in c o m p e o p le w h o se in co m es fo r m e rly w e re lim ite d are n o w m o d ity p rice s. B r a d s t r e e t ’ s in d e x n u m b e r on D e c e m b e r 1 w a s 2 0 . 1 7 5 6 a s c o m p a re d w ith 1 9 .9 0 2 6 a m o n th p re v io u s, a n d w ith 2 0 .0 0 1 7 p u r c h a s in g je w e lr y a n d o th e r e x p e n siv e a rtic le s o f lu x u r y to a m u c h g r e a te r e x te n t th a n h e re to fo re . o n A u g u s t 1 , w h e n th e p re v io u s h ig h re c o rd o f 1 9 1 9 M e r c a n tile w a s e sta b lish e d . w as 19 .0 15 1 . a lm o st a ll lines o f m e rc h a n d ise h a v e re s u lte d in g e n era l sh o rte n in g of c re d its. W h ile it a p p e a r s, fo r th e p re se n t a t le a st, t h a t p ro d u c tio n is f a r sh o rt of th e d e m a n d , P r ic e s O n D e c e m b e r 1 , 1 9 1 8 th e n u m b e r T e x tile s p ro v isio n s a n d iron a n d steel a cc o u n te d fo r th e la r g e r p a r t of th e rise d u rin g N o v e m b e r ; b u t te n o u t o f th irte e n g ro u p s of co m m o d ities sh o w ed a d v a n c e s , a n d a m o n g th e in d iv id u a l co m m o d ities 4 6 o u t of 1 0 6 rose. B r a d s t r e e t ’ s a v e r a g e o f fo o d p rice s d id n o t, h o w e v e r, m a k e a n e w h ig h re co rd . On D e c e m b e r 1 it w a s 5 . 1 8 a g a in s t 4 .9 7 e a r ly in N o v e m b e r a n d 5 .0 4 th e firs t of D e c e m b e r , 1 9 1 8 . The h ig h reco rd of th e p re se n t y e a r w a s 5 . 3 0 a t th e end of Ju ly . I n co n sid erin g th e c u rre n t h ig h p rice s a t w h o lesale fo r c o m m o d itie s it sh o u ld b e n o ted t h a t in th e a v e r a g e or t y p ic a l y e a r p rio r to th e w a r w h o lesale p rice s in th is c o u n tr y re a ch e d th e ir h ig h e st le v e l a ro u n d th e end o f N o v e m b e r a n d th e n d eclin ed . R e ta il I n q u ir y fro m te n C r e d its The h ig h p ric e s now p r e v a ilin g in c a u tio u s m a n u fa c tu re r s a re d isin clin ed to c o m m it th e m se lv e s in th e ir b u sin ess d e a lin g s to a c o n tin u a n c e o f p ric e s a t th e p re se n t le v e l o v e r a lo n g p erio d . I n a lm o st a ll lin es, w h a t is k n o w n te c h n ic a lly as a se lle r’s m a r k e t e x is ts ; t h a t is, th e seller is free to se le ct th o se w ith w h o m h e w ill d e a l. A llo t m e n t of go o d s is g e n e ra l a n d in th e w o o len tr a d e th e a llo t m e n ts h a v e fa lle n in c e r ta in case s as lo w as 2 5 p e r c e n t, of la s t y e a r ’ s re q u ire m e n ts. T h is p o w e r o f th e d e a le r to ch o o se th o se to w h o m h e w ill sell g o o d s fro m a la rg e n u m b e r of a p p lic a n ts is re g a r d e d a s o f itse lf in su ra n c e a g a in s t c a n c e lla tio n o f o rd ers sh o u ld th e d e m a n d s u d d e n ly su b sid e a n d p ric e s fa ll. d e p a rtm e n t sto re s in G r e a te r N e w Y o r k sh o w s t h a t th e sales u p to th e m id d le o f D e c e m b e r a s c o m p a re d w ith th e co rre sp o n d in g p erio d of 1 9 1 8 in cre a sed on th e a v e r a g e 4 0 p e r ce n t, in th e to ta l v a lu e o f sales, a n d 1 9 p er c e n t, in th e n u m b e r of u n its sold. So m e o f th e m e rc h a n ts e x p ressed d isa p p o in tm e n t in th e size o f C h ris tm a s b u y in g , w h ic h m a y b e a ttr ib u te d to e x p e c ta tio n s b a se d on th e im m en se sales, b o th re la tiv e a n d a b so lu te , fo r th e m o n th of O cto b e r. I t a p p e a rs also t h a t th e M o s t m a n u fa c tu re r s a n d d istrib u to rs o f d r y go o d s, te x tile s, h a r d w a r e , b o o ts a n d sh oes a n d sim ila r m e r c h a n d ise , a re so ld u p a s f a r a h e a d a s t h e y w ill ta k e o rd ers. M o s t c o n tr a c ts a re p la c e d a t p re se n t p ric e le v e ls, th o u g h in a fe w case s th e stip u la tio n h a s been fo r th e fix a tio n of p ric e s a t th e d a te o f d e liv e r y , or th e m a k in g o f a p ric e n o w , w ith d e liv e r y a t th e c o n v e n ie n ce o f th e seller. S o m e o f th e la r g e s t m a n u fa c tu re rs a n d d istrib u to rs re p o r t t h a t th e ir c o n tr a c ts , b a se d u p o n p re se n t p ric e s, ru n o n ly a b o u t h a lf as re p re ssiv e m easu re s called fo r b y th e sh o rta g e of coal f a r in to th e fu tu re as in n o rm a l tim e s ; th u s m a n u T rade a ffe c te d sales in th is p erio d . N e v e r th e le s s th e p re s e n t h o lid a y seaso n is th e h e a v ie s t in th e exp e rie n ce o f N e w Y o r k sto res. C e r ta in o f th e sto res re p o rt t h a t th e sales o f u til fa c tu re rs a n d d istrib u to rs w h o h a v e been in th e h a b it o f c o n tr a c tin g fo r six m o n th s a h e a d a t fixed p ric e s a re n o w c o m m ittin g th e m se lv e s th r o u g h a p e rio d o f o n ly th re e m o n th s. I n b rief, b o th sellers a n d b u y e r s a im to w a r d a q u ic k tu rn o v e r . ities h a v e fa lle n off m o re th a n th e sales of lu xu ries. T h is is e x p la in e d n o t o n ly b e ca u se o f th e n a tu re of h o lid a y p u rc h a sin g , b u t b e ca u se of th e in clin a tio n referred to la s t m o n th of b u y in g e x p e n siv e a rticle s re g a rd le ss of th e ir in h ere n t v a lu e . D e m a n d fo r h igh C o lle c tio n s The C r e d it C le a r in g H o u se re - p o rts, b a se d on tr a n s a c tio n s b e tw e e n w h o lesalers a n d re ta ile rs in v o lv in g a b o u t $ 10 0 ,0 0 0 ,0 0 0 , in th e c u rr e n t p erio d and F a ilu r e s p ric e d go o d s is g e n e ra lly re p o rte d , b u t a t th e sam e w ere s lig h tly b e tte r th a n in th e p re c e d in g fo u r w eek s, tim e it a p p e a rs t h a t p u rch a se rs a re in clin ed to w a tc h a n d c o n sid e ra b ly b e tte r th a n a y e a r a g o . O n th e FEDERAL RESERVE AGENT AT NEW YORK o th er h a n d , th e v o lu m e o f in d e b te d n e ss in crea sed an d w a s a b o u t th e sa m e as fo r th e co rre sp o n d in g season la s t y e a r . 99 F a ilu re s in th is d is tr ic t d u rin g N o v e m b e r w ere as a g a in s t 101 la s t y e a r . Th ere w as re d u ctio n in th e liab ilitie s in v o lv e d fro m in N o v e m b e r , 1918, to $1,548,918 a slig h t $1,674,791 th is y e a r . w a s re p o rte d in Y o u n g s t o w n a n d o th er cen ters. P ric e s of p ig iron , steel b illets a n d ra ils rose m o re r a p id ly th a n d u rin g th e steel strik e . O rd ers fo r steel are b e in g a c c e p te d c o n d itio n a lly , or declin ed a lto g e th e r ; a n d it m a y b e som e w e ek s b e fo re th e steel m a r k e t re c o v e rs fro m th e c u m u la tiv e e ffe ct of th e tw o strik es. F o r th e c o u n tr y as a w h o le th e re w ere fe w e r failu res la s t C o tto n m o n th th a n in a n y N o v e m b e r sin ce D u n ’s reco rd s th e first th ree w eek s of D e c e m b e r in d ica te a m a d e n ta l to th e liq u id a tio n of m id N o v e m b e r w a s re v e rse d la te in th e m o n th , a n d on D e c e m b e r th e p ric e o f f o r t y cen ts a p o u n d fo r sp o t d e liv e r y w a s rea ch e d . T h is p ric e te ria l d ecrease p erio d in excee d e d t h a t re a c h e d in O cto b e r a n d is th e h ig h e st fo r a c e n tu ry , s a v e th e C iv il W a r p erio d , w h e n p rices 1894, b e g a n in w ith th e sm a lle st lia b ilitie s fo r a n y N o v e m b e r in fifteen y e a rs . P r e lim in a r y figu res fo r 1918. in o v e r th e co rre sp o n d in g T h e r e is no le t u p in th e d e m a n d C lo th in g , D ry failu re s f ° r h ig h g r a d e w e a rin g a p p a re l. G ood s On co n t r a r y , th e d e m a n d h as b r o a d ened a n d g a rm e n ts a re a sk e d fo r in a w id e r v a r ie t y of fa b ric s . N o p ro m ise of relief in and T e x tile s T h e d eclin e of c o tto n p rice s in ci- M ark et 5 w e re sta te d in d e p re cia te d c u rr e n c y . W it h th e issu a n c e of th e G o v e r n m e n t cro p re p o rt, w h ic h set a n e s tim a te of 325.000 th e cro p 11,030,000 1 at b a le s, about b ales a b o v e th e O cto b e r e stim a te , th e p ric e on th e N e w Y o r k m a r k e t declin ed to a p o in t n o t fa r a b o v e w h a t it w a s in m id -N o v e m b e r clo th in g p rices is h eld o u t fo r th e n e a r fu tu re . D o m e s tic c o tto n co n su m p tio n in N o v e m b e r w a s B o t h jo b b e rs a n d m a n u fa c tu re r s of h o sie ry an d k n it go o d s a re e x tre m e ly b u s y . B u y i n g h as in crea se d d u rin g th e la s t tw o w e ek s o w in g to th e fe a r of still h ig h e r p rices a n d b e c a u se sto c k s a re lo w a t a tim e w h en p ro d u ctio n is still b e lo w n o rm a l. L e a d in g p ro d u ce rs of w oolen s a n d w o rste d s are m a k in g p la n s to a llo t th e ir p ro d u c ts fo r th e fa ll seaso n as th e y d id fo r th e co m in g sp rin g. 490,698 b a les a g a in s t 555,344 th e p re v io u s m o n th , a n d 455,611 in N o v e m b e r , 1918. I t w a s lo w , h o w e v e r, as co m p a re d w ith som e p re v io u s N o v e m b e r s , a n d th e co m p a riso n s w ith th e 1918 figu res a re m is le a d in g b eca u se of th e a b n o rm a l c u rta ilm e n t of c o n su m p tio n d u rin g th e la t te r h a lf of la s t y e a r . E x p o rts in b o th S e p te m b e r a n d O cto b e r w e re b e lo w th o se of th e p re v io u s y e a r . F o r th e la tte r m o n th th e y w e re 1920 352,231 b ales a g a in s t 386,995 W h e re a u tu m n p rice s h a v e b een m en tio n ed th e y are tw o y e a r s ago . I n N o v e m b e r , h o w e v e r, th e e x p o rts a m o u n te d to b a le s, w h ic h is th e m a x im u m sh ip m e n t fo r a n y sin gle m o n th . E n g la n d , a cc o rd in g up 50 to 75 cen ts a y a r d o v e r sp rin g p rices. C o t to n go o d s h a v e been a c t iv e a n d h a v e m a in ta in e d or e v e n exceed ed th e p re v a ilin g h igh p ric e le v els. Iro n T h e co a l strik e h a s h a d a m ore and d istu rb in g e ffe ct u p o n th e iron a n d steel tr a d e th a n d id th e steel strik e. F o r th e tw o m o n th s ju s t p rio r to th e la t te r our a v e r a g e m o n th ly p ro d u ctio n of p ig iron w a s to n s, fro m w h ic h it fell to in O cto b e r a n d re c o v e re d to to n s in N o v e m b e r . F o r th e w h o le p e rio d of th e steel strik e th e c o n se q u e n t loss of S te e l 1,863,558 2,392,350 iron p ro d u ctio n w as a p p a r e n tly about 2,586,000 1,2 0 0 ,0 0 0 to th e D e p a r t m e n t of C o m m e rc e ta b u la tio n , to o k b a le s a n d F r a n c e bales. 521.000 120,311 B u ild in g c o n tra c ts a w a rd e d in N o v e m b e r in N e w Y o r k a n d N o r t h O p e r a tio n s ern N e w J e r s e y , a cc o rd in g to F . W . D o d g e C o m p a n y , a m o u n te d to or less th a n fo r O cto b e r. T h e n o te w o r th y p o in t is n o t th e d ecrea se, b u t ra th e r its sm alln ess. A t th is seaso n of th e y e a r , b e c a u se o f th e co m in g of B u ild in g $50,636,000 585,000 tio n to g e th e r w ith th e re la tiv e m o v e m e n ts of iron O cto b e r a n d steel p rices in d ica te t h a t p ig iron w a s a ffe c te d w h e re a s th is tim e it w a s o n ly steel. The e m b a rra ssm e n t $2,- cold w e a th e r, c o n tr a c t a w a rd s n o r m a lly sh o w a m u c h la r g e r declin e. th a n 530,565 924,000 to n s ; a n d th e un filled to n n a g e of th e S te e l C o r p o r a m ore a y e a r ago, and to I n th e t y p ic a l y e a r th e d eclin e fro m N ovem ber is 11 3 ^ about 5.1 per c e n t., p e r cen t. re s u ltin g fro m th e co a l strik e a n d th e r e s tric tiv e o rders of th e T h e to ta l v o lu m e of b u ild in g in th is d is tric t fo r F u e l A d m in is tra tio n in d ica te d in th e o p e ra tio n of th e y e a r th u s fa r is v e r y m u c h a b o v e n o rm a l in co st, iron a n d so m e w h a t a b o v e in floor sp a ce. and steel p la n ts e a r ly in D e c e m b e r. w a s p a r tic u la r ly n o tice a b le T h e sh o rta g e of co k e b e c a m e a c u te b y D e c e m b e r 8, a n d c u rta ilm e n t of p ro d u ctio n e lev e n m o n th s to D e c e m b e r 1 a g a in s t a p re v io u s h ig h re co rd of T h e a w a rd s fo r $503,729,000 $316,014,000; a n d w ere REPORT ON BUSINESS CONDITIONS R e sid e n tia l b u ild in g co n tin u es on a la rg e scale in in d u s tr y , is a ttr ib u te d to th e se ttle m e n t o f la b o r tro u b le s. A b o u t h a lf th e steel w o rk e rs o u t on strik e th is d is tr ic t; 3 4 p e r ce n t, of th e a w a rd s fo r N o v e m b e r in O cto b e r h a d re tu rn e d a t th e tim e of th e N o v e m c a m e in t h a t cla ssifica tio n , w h ic h in clu d e s n o t o n ly b er re p o rts. th e h ig h e st reco rd b efo re th e w a r w a s $ 2 3 5 ,6 9 4 ,5 0 0 . T h e p r in te r s ’ strik e, w h ic h w a s s lo w ly d e ta c h e d d w e llin g s, b u t a p a r tm e n t h o uses, h o tels, d isso lv in g a m o n th a go , c a m e to a n en d w it h a n in g a ra g e s a n d sta b le s. T h u s th e co n tin u e d rise in p rices of b u ild in g m a te ria ls h a s n o t y e t red u ce d th e crea se of $ 6 .0 0 a w ee k . A m o n g th o se w h o h a v e g e n e ra lly re tu rn e d to th e ir fa c to rie s or p la n ts a re e x te n t o f b u ild in g o p e ra tio n s b e lo w n o rm a l. s h ip y a rd iron w o rk e rs, silk g lo v e m a k e rs, o p e ra tiv e s on m e n ’ s fu rn ish in g s a n d in la u n d rie s, a n d c ig a r A n e m p h a tic im p ro v e m e n t in la b o r co n d itio n s h a s ta k e n p la c e in L abor th is d istric t. T h e re p o rt of th e N e w Y o r k S t a t e In d u s tria l C o m m issio n for th e m o n th of N o v e m b e r sh o w s a n in crease of 3 p e r ce n t, in th e to ta l n u m b e r of w o rk e rs e m p lo y e d in 1 ,5 6 0 re p re se n ta tiv e m a n u fa c tu rin g esta b lish m e n ts. A m a te ria l p a r t of th is in crease, w h ic h is re p o rte d in n e a r ly e v e r y d iv isio n of m a k e rs. T h e c u m u la tiv e e ffe c t o f th e steel a n d co al strik es w a s fe lt in th e a u to m o b ile g ro u p , w h e re th e sh o rta g e of m a te ria l forced th e la y in g off o f a n u m b e r of w o rk e rs. A d ecrea se is re p o rte d in th e n u m b e r of w o rk e rs e n g a g e d in th e c o tto n go o d s m ills, th e re s u lt of a n e xten sio n to a n o th e r lo c a lit y of th e la b o r tro u b le s in t h a t in d u s tr y . P ro h ib itio n h a s re su lte d in a co n tin u in g declin e in th e e m p lo y e e s of b re w e rie s. T h is re p o rt is p re p a re d m o n th ly fo r th e F e d e r a l R e s e r v e B o a r d . C o p ie s a re issu ed fo r th e in fo rm a tio n of m e m b e r b a n k s a n d th o se w h o h a v e c o n trib u te d to w a r d its p re p a ra tio n . A d d itio n a l cop ies m a y b e o b ta in e d b y a d d re ssin g FED ER AL R ESER VE AGENT, F ed eral R e se rv e B a n k of N e w Y o r k . 1 5 N a ssa u Street, N e w Y o rk .